M/s. LIBRA REALTORS PVT. LTD., THANE V. ACIT CIR-4, THANE

ITA 2066/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6105 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 04-04-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MICHAEL JERALD
• Section: 143(3); 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI SHAMIM YAHYA (A.M.) & SHRI PAWAN SINGH (JM) ITA NO. 2066/MUM/2018(ASSESSMENT YEAR : 2012-13) M/S LIBRA REALTORS PVT LTD GROUND FLOOR, DEWAN TOWER STATION ROAD, NAVGHAR VASAI, THANE-401 202 PAN : AAACL1096N VS ACIT, CENT.CIR-4, THANE APPELLANT RESPONDEDNT APPELLANT BY NONE RESPONDENT BY SHRI MICHAEL JERALD (SR DR) DATE OF HEARING 03-02-2020 DATE OF PRONOUNCEMENT 07-02-2020 O R D E R PER PAWAN SINGH, JM : THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE OR DER OF CIT(A)-3, THANE FOR ASSESSMENT YEAR 2012-13. THE ASSESSEE HA S RAISED THE FOLLOWING GROUNDS OF APPEAL:- GROUNDS OF APPEAL AGAINST THE APPELLANT ORDER & GR OUNDS OF DECISION DATED 01/12/2017 PASSED BY THE HON'BLE COMMISSIONER OF IN COME TAX (APPEALS) - 3, THANE. FOLLOWING GROUNDS OF APPEAL ARE WITHOUT PREJUDICE T O EACH OTHER: 1. THE LEARNED CIT (A) HAS ERRED IN LAW & ON FACTS IN UPHOLDING THE LEARNED AO'S ACTION OF DISALLOWING INTEREST EXPENSES TO THE TUNE OF RS.4,66,06,955/- U/S 37(1) OF THE IT ACT, 1961, WHICH IS BAD IN LAW. 2. THE LEARNED CIT (A) HAS ERRED IN LAW & ON FACT S IN UPHOLDING THE LEARNED AO'S ACTION OF DISALLOWING TRAVELLING EXPENSES TO T HE TUNE OF RS.30,82,359/- WHICH IS BAD IN LAW. 2 ITA NO.2066/MUM/2018 2. BRIEF FACTS OF THE CASE AS EXTRACTED FROM THE OR DER OF THE LOWER AUTHORITIES ARE THAT HE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF BUILDER AND DEVELOPER. THE ASSESSEE, WHILE FILING RETURN OF INCOME DECLARED NIL INCOME UNDER THE NORMAL PROVISIONS OF THE I.T. ACT AFTER CLAIMING CURRENT YEARS BUSINESS LOSS AND CARRIED FORWARD TO SUBSEQU ENT YEAR FOR R.4.91 CRORES AND SET OFF OF CURRENT YEAR INCOME FROM HOUSE PROPE RTY AMOUNTING TO RS.8.50 LAKHS AND INCOME FROM OTHER SOURCES OF R.60,000. T HE CASE WAS SELECTED FOR SCRUTINY. THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 20-03-2015. THE AO, WHILE PASSING THE ASSESSMENT ORDER DISALLOWED I NTEREST EXPENSES OF RS.4.66 CRORES AND TRAVELLING EXPENSES OF RS.30,82, 359/-. ON APPEAL BEFORE CIT(A), BOTH THE DISALLOWANCES WERE CONFIRMED. THU S, FURTHER AGGRIEVED, THE ASSESSEE HAS FILED PRESENT APPEAL BEFORE US. 3. NONE APPEARED ON BEHALF OF ASSESSEE DESPITE SERV ICE OF NOTICE OF HEARING. PERUSAL OF RECORD REVEALS THAT SEVERAL AD JOURNMENTS WERE SOUGHT ON BEHALF OF ASSESSEE BY M/S THAR & CO, CAS. HOWEVER, TODAY NEITHER ANY ADJOURNMENT APPLICATION HAS BEEN RECEIVED NOR ANY R EPRESENTATION FROM THE OFFICE OF THE CA HAS BEEN TURNED OUT TO ATTEND THE PROCEEDINGS. THEREFORE, WE ARE LEFT WITH NO OPTION EXCEPT TO DECIDE THE MAT ERIAL AVAILABLE ON RECORD, AFTER HEARING SUBMISSION OF LD. DR FOR THE REVENUE. 4. WE HAVE HEARD THE SUBMISSIONS OF THE HE LD. DR F OR THE REVENUE .THE LD DR FOR THE REVENUE SUPPORTED THE ADDITIONS / DIS ALLOWANCES MADE BY THE 3 ITA NO.2066/MUM/2018 AO. FOR DISALLOWANCE OF INTEREST EXPENSES, THE LD. DR SUBMITS THAT DURING THE ASSESSMENT, THE ASSESSEE IN SHOW CAUSE AGAINST THE INTEREST DISALLOWANCE SUBMITTED THAT ADVANCE OF RS.30 CRORES WAS GIVEN TO SATYAM REALTORS AS PART OF CONSIDERATION FOR PURCHASE OF PROPERTY, THE ASSE SSEE FAILED TO SUBSTANTIATE THE CLAIM BY PRODUCING DOCUMENTARY PROOF. THE ASSE SSEE FAILED TO PROVE THAT THE ADVANCES WERE GIVEN FOR ANY BUSINESS EXPEDIENCY . ON DISALLOWANCE OF TRAVELLING EXPENSES, THE LD. DR SUBMITS THAT ASSESS EE HAS NOT FURNISHED ANY DETAIL OR EXPLANATION AND EVIDENCES WITH REGARD TO TRAVELLING EXPENSES AND FAILED TO SUBSTANTIATE THE EXPENSES, IF THE EXPENSE S WERE MADE WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. THE LD. D R FURTHER SUBMITS THAT EVEN BEFORE TRIBUNAL, THE ASSESSEE HAS NOT GIVEN AN Y EVIDENCE. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF LD. DR FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 6. GROUND 1 RELATES TO DISALLOWANCE OF RS.4.66 CRORES U/S 37. DURING THE ASSESSMENT TH E AO DISALLOWED THE INTEREST EXPENSES BY TAKING VIEW THAT ASSESSEE FAIL ED TO SUBSTANTIATE THAT ADVANCE MADE TO SATYAM REALTORS WAS ON ACCOUNT OF A NY BUSINESS EXPEDIENCY. THE LD. CIT(A) AFFIRMED THE ACTION OF AO WITH SIMILAR REASONING. BEFORE US, THE ASSESSEE NEITHER CAME FO RWARD NOR FILED ANY DOCUMENTARY EVIDENCE TO PROVE THE BUSINESS EXPEDIEN CY. NO DOCUMENTARY EVIDENCE TO SUBSTANTIATE THE GENUINENESS OF TRANSAC TION FOR MAKING ADVANCE 4 ITA NO.2066/MUM/2018 PAYMENT TO SATYAM REALTORS. THEREFORE, WE DO NOT F IND ANY MERIT IN THE GROUNDS OF APPEAL. 7. WITH REGARD TO THE SECOND GROUND PERTAINING TO D ISALLOWANCE OF TRAVELLING EXPENSES OF RS.30,82,359/-, WE NOTED THA T THE ASSESSING OFFICER DISALLOWED THE SAME IN ABSENCE OF ANY EVIDENCES. B EFORE THE LD.CIT(A) ALSO, THE POSITION REMAINED THE SAME. THE ASSESSEE ONLY STATED THAT THE EXPENDITURE WAS INCURRED SUBSTANTIALLY BY DIRECTOR, MR. ROMY MEHTA. IN THE ABSENCE OF ANY DETAILS OF EXPENDITURE COMING FORTH, THE LD. CIT(A) CONFIRMED THE DISALLOWANCE. THE ASSESSEE IS NOT BE FORE US TO MAKE THE SITUATION GOOD SO AS TO ENABLE US TO ARRIVE AT A DI FFERENT CONCLUSION. THE ASSESSEE NEITHER FILED ANY SUBMISSIONS NOR ANY DOCU MENTARY EVIDENCES TO SUBSTANTIATE THAT THERE WAS ANY BUSINESS EXPEDIENCI ES ON THE EXPENSES INCURRED ON TRAVELLING. THEREFORE, WE CONFIRM THE ACTION OF LD. CIT(A). GROUND 2 OF THE ASSESSEE FAILS. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07-02-2020. SD/- SD/- (SHAMIM YAHYA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIALMEMBER MUMBAI, DT : 07 TH FEBRUARY , 2019 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 5 ITA NO.2066/MUM/2018 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI