MANTRI REALITY LTD ( FORMERLY M/S ANJIR PROPERTIES P.LTD), MUMBAI V. ITO WD 3(1)(1), MUMBAI

ITA 2089/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3694 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 16-06-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 15-03-2013
• Court: TRIBUNAL
• Department Lawyers: K V VISPUTE
• Keywords: Onus to prove
• Section: 143(3)

Judgement Text

1 ITA 2089/MUM/2013 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBI BENCHES B, MUMBAI BEFORE SHRI JOGINDER SINGH (JUDICIAL MEMBER) AND SHRI ASHWANI TANEJA (ACCOUNTNT MEMBER) I.T.A. NO.2089/MUM/2013 (ASSESSMENT YEAR: 2003-04) M/S MANTRI REALTY LTD (FORMERLY M/S ANJIR PROPERTIES PVT LTD G-1, COURT CHAMBERS 35, NEW MARINE LINES, CHURCHGATE MUMBAI. VS ITO, WD.3{L)(L) MUMBAI PAN : AABCA9969J (APPELLANT) (RESPONDENT) APPELLANT BY NONE RESPONDENT BY SHRI K.V. VISPUTE DATE OF HEARING : 27-04-2016 DATE OF PRONOUNCEMENT : 29-04-2016 ORDER PER ASHWANI TNEJA, AM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD.COMMISSIONER OF INCOME-TAX{APPEALS)-5, MUMBAI [H EREINAFTER CALLED 'CIT{A)' DATED 07-12-2012 PASSED AGAINST THE ASSESS MENT ORDER U/S 143(3) DATED 30-03-2006 FOR ASSESSMENT YEAR 2003-04 RAISIN G THE FOLLOWING GROUNDS OF APPEAL: 2 ITA 2089/MUM/2013 ' THE APPELLANT COMPANY PREFERS AN APPEAL AGAINST AN ORD ER DATED 27112/2012 PASSED BY LD. COMMISSIONER OF INCOME TAX (A) 5, MUMBAI ON FOLLOWING AMONGST OTHER GROUNDS EACH OF WHICH ARE WITH OUT PREJUDICE TO ANY OTHER :- 1.0 ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF LEGAL FEES OF RS.5,OO ,OOOL- AND SITE DEVELOPMENT EXPENSES OF RS. 26,12,225/- ON HOLDING SUCH AS CONTINGENT LIABILITY ON IGNORING THE VITAL FACT THAT THE APPELL ANT FOLLOWED PROJECT COMPLETION METHOD AND RECORDED THE ASCERTAINED LIABIL ITY RELATED TO THE COMPLETED PROJECT; 2.0 ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, LD. C/T(A) ERRED IN CONFIRMING THE DISALLOWANCE OF STAMP DUTY AND REGISTRA TION CHARGES OF RS4,23,387/- UNDER THE REASON THAT APPELLANT WAS NOT REQUIRED TO INCUR SUCH EXPENSE; 3.0 ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, LD. C/T(A) ERRED IN CONFIRMING THE DISALLOWANCE OF SALES PROMOTION EXPENS ES OF RS.2,76,332/- ON HOLDING SUCH AS PERSONAL EXPENSES OF THE DIRECTORS; 4.0 ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, LD. C/T(A) ERRED IN CONFIRMING THE TROVELLING EXPENSES OF RS.82,159/- ON HOLDING SUCH AS PERSONAL EXPENSES OF THE DIRECTORS. 3. IT IS NOTED THAT THIS APPEAL HAS BEEN FIXED FOR HEARING ON VARIOUS OCCASIONS ON WHICH ADJOURNMENT HAS BEEN SOUGHT BY THE ASSESSEE'S COUNSEL. ON THE LAST DATE OF HEARING, I.E. ON 16-09-2015 ALSO REQUEST FOR ADJ OURNMENT WAS FILED ON BEHALF OF THE ASSESSEE AND ACCORDINGLY THIS CASE WAS ADJOU RNED FOR 27-04-2016. ON THE DATE OF HEARING, NONE APPEARED ON BEHALF OF THE ASS ESSEE. IT IS FURTHER NOTED BY US THAT BEFORE THE LD. CIT(A) ALSO NO REPRESENTATIO N WAS MADE PROPERLY BY THE ASSESSEE DESPITE THE FACT THAT ID.CIT(A) DID FIX TH E HEARING ON MORE THAN 12 OCCASIONS. IT IS NOTED THAT NONE APPEARED ON BEHALF OF THE ASSESSEE ON 11 OUT OF 12 OCCASIONS BEFORE THE CIT(A). UNDER THESE CIRC UMSTANCES WE HAVE NO OPTION BUT TO DECIDE THE APPEAL EXPARTE ON THE BASI S OF RECORDS AVAILABLE BEFORE US. 3 ITA 2089/MUM/2013 4. GROUND NO.1: THIS GROUND DEALS WITH DISALLOWANCE OF LEGAL FEE O F RS.5 LAKHS AND SITE DEVELOPMENT EXPENSES OF RS.25,1 2,225 BY HOLDING THE SAME AS CONTINGENT LIABILITY. 5. IT IS NOTED THAT PROPER DETAILS WERE NOT GIVEN B Y THE ASSESSEE BEFORE THE ASSESSING OFFICER. EVEN BEFORE THE CIT(A) NONE HAD APPEARED AND NO DETAILS, SUBMISSIONS OR DOCUMENTARY EVIDENCES WERE SUBMITTED TO NEGATE THE OBSERVATIONS OF THE ASSESSING OFFICER. RELEVANT OBS ERVATIONS OF LD.CIT(A) ARE REPRODUCED HEREUNDER FOR THE SAKE OF READY REFERENC E; 4.1 VARIOUS REASONS HAVE BEEN GIVEN BY THE AO FOR DISALLOWING THE SAME. THE SAME BE READ AS A PART OF THIS ORDER ALSO AND THE SAME ARE NOT BEING REPEATED FOR THE SAKE OF BREVITY. THE AO HAS STATED THAT ASSESSEE HAS NOT FURNISHED THE DETAILS OF THE OUTSTANDING EXPENDITURE INCURRED WHICH HAVE BEEN ADJUSTED AGAIN ST THE PROVISIONS FOR OUTSTANDING LIABILITY. THE APPELLANT HAS FAILED TO DISCHARGE THE ONUS TO PROVE THAT THE LIABILITY FOR WHICH THE PROVISIONS HAS BEEN MADE IS AN ASCERTAINED LIABILITY. 4.2 UNDER THE AFORESAID FACTS AND CIRCUMSTANCES THE DISALLOWANCE OF PROVISIONS FOR OUTSTANDING LIABILITY AMOUNTING TO R S. 31,12,225/- MADE BY THE AO IS UPHELD. 6. WE FIND THAT THERE IS NOTHING EVEN BEFORE US SO AS TO REVERSE THE ACTION OF LOWER AUTHORITIES. NOTHING HAS BEEN BROUGHT TO JUSTIFY THESE CLAIMS. UNDER THESE CIRCUMSTANCES DISALLOWANCE MADE BY THE ASSESS ING OFFICER CANNOT BE DISTURBED AND, THEREFORE, ORDER OF THE LD.CIT(A) IS UPHELD AND ACCORDINGLY, GROUND NO.1 IS DISMISSED. 7. GROUND NO.2 : IN THIS GROUND, THE ASSESSEE HAS CHALLENGED THE DISALLOWANCE OF STAMP DUTY AND REGISTRATION CHARGES OF RS. 4,23,387. IN THIS CASE ALSO POSITION REMAINS THE SAME AS NO REPRESENTATION WAS MADE BEFORE THE ID.CIT(A). RELEVANT PART OF ORDER OF CIT(A) IS REPRODUCED BELO W: 4 ITA 2089/MUM/2013 5.1. THE AD HAS STATED THAT THE STAMP DUTY AND REG ISTRATION CHARGES RELATE TO FLAT NO 301 WHICH HAVE BEEN PAID BY THE ASSESSEE AS PER MUTUAL AGREEMENT, THE AD STATED THAT THE ASSESSEE IS A BUI LDER AND THE STAMP DUTY AND REGISTRATION CHARGES ARE NORMALLY PAID BY THE BUYER AND NOT THE BUILDER. NO COPY OF MUTUAL AGREEMENT WAS FILED. THE ASSESSEE FAILED TO DISCHARGE THE ONUS. THE ASSESSING OFFICER THEREFORE HELD THAT THE PAYMENTS WERE FOR EXTRANEOUS CONSIDERATION. 5.2 IN VIEW OF THE FACTS STATED BY THE A.D., THE DI SALLOWANCE MADE BY THE A.O. IS UPHELD. 8. NOW BEFORE US ALSO NOTHING HAS BEEN BROUGHT TO J USTIFY THE CLAIM AND, THEREFORE, WE FIND IT APPROPRIATE TO UPHOLD THE ORD ER OF THE LOWER AUTHORITIES ON THIS ISSUE AND, THEREFORE, GROUND NO.2 IS DISMIS SED. 9. GROUNDS NO.3 & 4 : THESE GROUNDS PERTAIN TO DISALLOWANCE OF SALES PROMOTION EXPENSES AND TRAVELLING EXPENSES. 10. IT IS NOTED THAT POSITION WITH RESPECT TO THESE TWO GROUNDS IS ALSO SIMILAR AS IN THE ABOVE SAID GROUNDS. NOTHING HAS BEEN BROUGHT EVEN BEFORE US TOJUSTIFY THE CLAIM MADE BY THE ASSESSEE. UNDER THESE CIRCUMS TANCES, WE HAVE NO OTHER OPTION BUT TO UPHOLD THE ORDERS OF THE LOWER AUTHOR ITIES. GROUNDS 3 & 4 ARE DISMISSED. 11. AS A RESULT, APPEAL FILED BY THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING. SD/- SD/- (JOGINDER SINGH) (ASHWANI TANEJA) JUDICIAL MEMBER (ACCOUNTANT MEMBER) MUMBAI, DT : 29 TH APRIL, 2016 PK/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 5 ITA 2089/MUM/2013 3. THE CIT(A) 4. THE CIT 5. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE , B BENCH (TRUE COPY) BY ORDER