GLOBEX TRAVELS & EXCHANGE LTD, MUMBAI V. DCIT CIR 9(3)(2), MUMBAI

ITA 1969/MUM/2017

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 8985 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 20-03-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T S KHALSA L D
• Assessee Lawyers: PARESH SHAHLD
• Keywords: Business expenditure; FORM 26AS
• Section: 143(3); 142(1); 143(2)

Judgement Text

ITA NO.1969/MUM/2017 GLOBEX TRAVELS & EXCHANGE LTD. ASSESSMENT YEAR: 2008-09 1 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.1969/MUM/2017 ( / ASSESSMENT YEAR: 2008-09) GLOB EX TRAVELS & EXCHANGE LTD. B-109, PRANAV COMMERCIAL COMPLEX M.G. ROAD, MULUND(W) MUMBAI-400 080. / VS. D CI T - 9( 3 ) (2) ROOM NO.418, 4 TH FLOOR AAYKAR BHAWAN, MK ROAD MUMBAI-400 020. !' ./ ./PAN/GIR NO. AABCG-4127-C ( '$ /APPELLANT ) : ( %&'$ / RESPONDENT ) ASSESSEE BY : SHRI PARESH SHAH-LD AR REVENUE BY : SHRI T.S. KHALSA- LD. SR. DR / DATE OF HEARING : 07/01/2021 / DATE OF PRONOUNCEMENT : 07/01/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2008-09 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-16, MUMBAI, [IN SHORT REFER RED TO AS CIT(A)], APPEAL NO.CIT(A)-16/IT-273/DCIT-9(3)(2)/ 2014-15 DATED 10/02/2016 ON CERTAIN GROUNDS OF APPEAL. 2. THE REGISTRY HAS NOTED A DELAY OF 344 DAYS IN TH E APPEAL, THE CONDONATION OF WHICH HAS BEEN SOUGHT BY THE ASSESSE E ON THE BASIS OF CONDONATION PETITION WHICH IS SUPPORTED BY THE AFFIDAVITS OF ITA NO.1969/MUM/2017 GLOBEX TRAVELS & EXCHANGE LTD. ASSESSMENT YEAR: 2008-09 2 ASSESSEES DIRECTOR AS WELL AS MANAGER AND ACCOUNTA NT. THE DELAY HAS BEEN ATTRIBUTED, INTER-ALIA, TO THE FACT THAT B USINESS OPERATIONS HAD CLOSED DOWN AND THERE WAS FREQUENT CHANGE IN TH E BOARD OF DIRECTORS. FURTHER, THE CONCERNED DIRECTOR LOOKING AFTER THE TAXATION MATER WAS SUFFERING FROM MEDICAL ADVERSITIES. ALSO, THERE WAS LACK OF COORDINATION BETWEEN ASSESSEES ADVOCATE AND CHA RTERED ACCOUNTANT WHICH LED TO DELAY IN FILING OF APPEAL. UPON PERUSAL OF THESE DOCUMENTS, WE ARE INCLINED TO CONDONE THE DEL AY AND PROCEED FOR DISPOSAL OF THE APPEAL ON MERITS. 3. DURING THE COURSE OF HEARING, LD. AR, SHRI PARE SH SHAH, WITHDREW GROUND NO.2 OF THE APPEAL WHEREAS GROUND N OS. 5 & 6 ARE GENERAL IN NATURE. THE EFFECTIVE GROUNDS URGED BEFO RE US ARE GROUND NOS. 1, 3 & 4 WHICH READ AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED ASSESSING OFFICER ERRED IN IGNORING MATERIAL AVAILA BLE WITH HIM AND DISALLOWED EXPENSES IGNORING THE NATURE THEREOF, AUDIT REPORT, BOOKS OF ACCOUNTS AND SUBMISSIONS FILED. 2. WITHDRAWN 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LEARNED ASSESSING OFFICER ERRED IN ADDING SAME INCOME T WICE - INTEREST INCOME - FIRST BY TREATING BUSINESS LOSS AS NIL (WHEREIN INTEREST IN COME IS REFLECTED) AND THEN BY CONSIDERING UNDER THE HEAD INCOME FROM OTHER SOURCE S. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED ASSESSING OFFICER ERRED IN DENYING CLAIM OF CARRY F ORWARD OF BUSINESS LOSS OF PRIOR YEAR (AY 2008-09) OF RS. 43,53,265/- 5. GENERAL IN NATURE 6. PRAYER 4. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AN D PERUSED RELEVANT MATERIAL ON RECORD. OUR ADJUDICATION TO TH E SUBJECT MATTER OF APPEAL WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPH S. 5.1 THE ASSESSEE WAS ASSESSED FOR THE YEAR UNDER CO NSIDERATION U/S 143(3) R.W.S. 147 ON 29/01/2015. THE ASSESSEE H AD NOT FILED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. HOWEVER, THE ITA NO.1969/MUM/2017 GLOBEX TRAVELS & EXCHANGE LTD. ASSESSMENT YEAR: 2008-09 3 PERUSAL OF FORM 26AS INFORMATION REVEALED THAT THE ASSESSEE RECEIVED INTEREST INCOME, COMMISSION AND RENTAL INC OME AGGREGATING TO RS.10.96 LACS. ACCORDINGLY, THE CASE WAS REOPENED AS PER DUE PROCESS OF LAW. THE STATUTORY NOTICES U/ S 143(2) & 142(1) WERE ISSUED IN DUE COURSE OF TIME. THE ASSES SEE WAS STATED TO BE ENGAGED IN THE BUSINESS OF FOREIGN EXCHANGE, TOUR & TRAVELLING ETC. BUT THE BUSINESS WAS STATED TO BE C LOSED DOWN DURING JUNE-JULY OF THE FINANCIAL YEAR. NO BUSINESS ACTIVITIES WERE STATED TO BE CARRIED OUT THEREAFTER EXCEPT FOR COMP LETION OF LEGAL FORMALITIES REQUIRED FOR CLOSURE OF BUSINESS. 5.2 UPON PERUSAL OF FINANCIAL STATEMENTS, IT TRANSP IRED THAT THE ASSESSEE CLAIMED EXPENDITURE OF RS.69.95 LACS AND C OMPUTED BUSINESS LOSS OF RS.45.53 LACS. ACCORDINGLY THE ASS ESSEE WAS DIRECTED TO FURNISH REQUISITE DETAILS AS WELL AS DO CUMENTARY EVIDENCES TO SUBSTANTIATE THE EXPENDITURE SO CLAIME D IN THE PROFIT & LOSS ACCOUNT. BUT DESPITE BEING PROVIDED WITH SEVER AL OPPORTUNITIES, THE ASSESSEE COULD NOT FILE REQUISIT E DETAILS / DOCUMENTARY EVIDENCES. CONSEQUENTLY, THE BUSINESS L OSS OF RS.45.53 LACS AS CLAIMED BY THE ASSESSEE WAS DISALL OWED AND THE TOTAL INCOME WAS COMPUTED AT RS.5.29 LACS. 6. THOUGH THE ASSESSEE PREFERRED FURTHER APPEAL BEF ORE LD. CIT(A) BUT EVEN DURING APPELLATE PROCEEDINGS, NO SP ECIFIC EVIDENCES SUPPORTED WITH NECESSARY BILLS AND VOUCHE RS COULD BE PRODUCED. THE LD. CIT(A) NOTED THAT THE ASSESSEE HA D CLAIMED EXPENDITURE OF RS.69.95 LACS WHEREAS LD. AO DISALLO WED ONLY EXPENDITURE OF RS.45.53 LACS WHICH MEAN THAT EXPEND ITURE OF RS.24.41 LACS WAS ALREADY ALLOWED WHICH WOULD BE SU FFICIENT TO ITA NO.1969/MUM/2017 GLOBEX TRAVELS & EXCHANGE LTD. ASSESSMENT YEAR: 2008-09 4 COVER THE NECESSARY EXPENDITURE TO BE INCURRED BY T HE ASSESSEE FOR CLOSED BUSINESS. IT HAS ALSO BEEN OBSERVED THAT EVE N DURING APPELLATE STAGE, NO COGENT MATERIAL OR EVIDENCES CO ULD BE PRODUCED TO SUBSTANTIATE THE CLAIM. ACCORDINGLY, TH E ASSESSMENT AS FRAMED BY LD. AO WAS CONFIRMED. AGGRIEVED, THE ASSE SSEE IS IN FURTHER APPEAL BEFORE US. 7. AFTER CONSIDERING RIVAL SUBMISSIONS AND MATERIAL ON RECORD, WE FIND THAT THE POSITION BEFORE US HAS REMAINED, M ORE OR LESS, THE SAME. THE ASSESSEE IS UNABLE TO SUBSTANTIATE THE EX PENDITURE THUS CLAIMED IN PROFIT & LOSS ACCOUNT WITH DOCUMENTARY E VIDENCES. NO NEW MATERIAL HAS BEEN PLACED BEFORE US WHICH WOULD WARRANT US TO DEVIATE FROM THE STAND OF LD. CIT(A). THE COMPLETE ONUS TO SUBSTANTIATE THE BUSINESS EXPENDITURE WAS ON ASSESS EE AND DESPITE BEING PROVIDED WITH AMPLE OPPORTUNITIES TO DO THE SAME, THE ASSESSEE IS UNABLE TO FILE THE REQUISITE DETAIL S AND DOCUMENTARY EVIDENCES. ACCORDINGLY, WE SEE NO REASON TO INTERFE RE WITH THE IMPUGNED ORDER. GROUND NO.1 STAND DISMISSED. IN GRO UND NO.3, IT HAS BEEN PLEADED THAT INTEREST INCOME HAS BEEN ADDE D TWICE SINCE THE INTEREST INCOME WAS CREDITED TO PROFIT & LOSS A CCOUNT WHILE THE SAME HAS SEPARATELY BEEN TREATED AS INCOME FROM OTH ER SOURCES. WE ARE OF THE CONSIDERED OPINION THAT IF INTEREST I NCOME IS EXCLUDED FROM PROFIT & LOSS ACCOUNT, THE BUSINESS LOSS WOULD INCREASE FURTHER. HOWEVER, THE SAME WOULD STILL BE NOT BE ALLOWABLE S INCE THE ASSESSEE HAS NOT SUBSTANTIATED ANY EXPENDITURE. THE INTEREST INCOME HAS RIGHTLY BEEN ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES KEEPING IN VIEW THE ASSESSEES NATURE OF BUSINESS. IN GROUND NO.4, THE ASSESSEE SEEK CARRY FORWARD OF BUS INESS LOSSES. ITA NO.1969/MUM/2017 GLOBEX TRAVELS & EXCHANGE LTD. ASSESSMENT YEAR: 2008-09 5 THIS GROUND BECOME INFRUCTUOUS IN VIEW OF THE FACT THAT BUSINESS LOSSES AS COMPUTED BY THE ASSESSEE HAVE BEEN HELD T O BE NOT ALLOWABLE. 8. THE APPEAL STAND DISMISSED IN TERMS OF OUR ORDER . ORDER PRONOUNCED ON 07 TH JANUARY, 2021. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 07/01/2021 SR.PS, JAISYVARGHESE / COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT 2. %&'$ / THE RESPONDENT 3. - ( ) / THE CIT(A) 4. - / CIT CONCERNED 5. ./% ( 0 , 0 , / DR, ITAT, MUMBAI 6. /123 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.