B.R. TV, MUMBAI V. ITO 11(1)1, MUMBAI

ITA 2158/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88500 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 02-03-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 30-03-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: NEHA BARVE
• Keywords: Depreciation

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B MUMBAI , BEFORE SHRI D. MANMOHAN, VICE PRESIDENT(M.Z.) AN D SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.2158/MUM/2012 (A.Y.2007-08) M/S. B.R. T.V. ANAND VILLA, PLOT NO.G-38 15 TH ROAD, SANTACRUZ (W) MUMBAI- 400 054. GIR NO./PAN : AAAFB 0941 M (APPELLANT ) VS. THE INCOME TAX OFFICER WARD 11(1) 1 MUMBAI. (RESPONDENT) A PPELLANT BY : MS. NEHA BARVE RESPONDENT BY : SHRI V.K. BORA DATE OF HEARING : 02 /0 3 /2015 DATE OF PRONOUNCEMENT : 02 /0 3 /2015 ORDER PER CHANDRA POOJARI, A.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) DATED 6.2.2012 FOR THE ASSESSMENT YEAR 2007-08. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF EXPE NSES AT THE RATE OF 10% OUT OF CONVEYANCE, FOOD ALLOWANCE MOTOR CAR EXPENSE S, OFFICE EXPENSES, TELEPHONE, TRAVELLING, DEPRECIATION ON CAR, MEDICAL , LAUNDRY STAFF WELFARE, MOTOR CAR REPAIRS AND INTEREST ON CAR LOANS. 2 ITA NO.2158/M /12 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS.3 .50 LACS OUT OF EXPENSES INCURRED FOR PRODUCTION OF THE SERIALS APRADHI KAU N AND VIRASAT. 2. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. 2.1 IN THIS CASE THE ASSESSEES TOTAL RECEIPTS WERE SHOWN AT RS.18.09 CRORES. HOWEVER, THE ASSESSEE SHOWED NET PROFIT AT RS.1.11 LACS ONLY I.E. VERY LOW PROFIT. MOST OF THE EXPENDITURE LIKE CONVE YANCE, FOOD ALLOWANCE, TELEPHONE, MOTOR CAR ARE IN THE NATURE OF EXPENDITU RE WHEREIN PERSONAL ELEMENT IS INVOLVED. FURTHER, MOST OF THE EXPENSES WERE COVERED BY SELF- MADE CASH VOUCHERS. THERE IS EVERY CHANCE OF INFLAT ING THESE EXPENDITURES AND ALSO IT IS NOT POSSIBLE TO VERIFY EXACTLY HOW M UCH WAS INFLATED. IN THE CIRCUMSTANCES THE AO DISALLOWED 10% OF THE EXPENDIT URE ON ADHOC BASIS. SIMILARLY HE HAS DISALLOWED RS.4.00 LACS OF EXPENSE S INCURRED FOR PRODUCTION OF THE SERIALS APARADHI KAUN AND VIRA SAT. HOWEVER, CIT(A) GAVE A RELIEF OF RS.50,000/- IN RESPECT OF PRODUCTI ON EXPENSES AND SUSTAINED ONLY RS.3.50 LACS ON THIS COUNT. THE LD. ARS CONTENTION IS THAT THE AO DISALLOWED THE EXPENDITURE ONLY ON THE BASIS OF PRESUMPTION AND ASSUMPTIONS WITHOUT PINPOINTING THE EXACT DISALLOWA NCE. BUT FACTS SUGGEST THAT ASSESSEES BOOKS OF ACCOUNT ARE NOT FULLY VERI FIED, HENCE, IT CANNOT BE CONSIDERED AS TRUE AND CORRECT. IN OUR OPINION, THE CASE WARRANTS CERTAIN DISALLOWANCES IN VIEW OF THE SELF MADE CASH VOUCHER S AND LOW PROFIT DECLARED BY THE ASSESSEE. IN THESE CIRCUMSTANCES, W E RESTRICT THE DISALLOWANCE OF EXPENDITURE @ 5% INSTEAD OF 10% MAD E BY AO. IN RESPECT OF PRODUCTION EXPENSES, SINCE IT IS ADHOC DISALLOWA NCE, WE ARE INCLINED TO 3 ITA NO.2158/M /12 REDUCE IT TO RS.3.00 LACS IN PLACE OF RS.3.50 LACS SUSTAINED BY LD. CIT(A). THUS, THE DISALLOWANCE IN THIS CASE OF PRODUCTION E XPENSES IS TO BE RS.3.00 LACS. THIS GROUND RAISED BY THE ASSESSEE IS PARTLY ALLOWED. 3. IN THE RESULT, ASSESSEES APPEAL IN ITA NO.2158/ MUM/2012 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 02/03/2015 ! ' # $%& 02/03/2015 ' ( / D. MANMOHAN ) ( / CHANDRA POOJARI ) / VICE PRESIDENT (MZ) / ACCOUNTANT MEMBER MUMBAI; $% DATED 02/03/2015 . % . ./JV, SR. PS ()* ()* ()* ()* +*!) +*!) +*!) +*!) / COPY OF THE ORDER FORWARDED TO : 1. ,- / THE APPELLANT 2. (.,- / THE RESPONDENT. 3. / ( ) / THE CIT(A)- 4. / / CIT 5. *0' ()% , , / DR, ITAT, MUMBAI 6. '12 3 / GUARD FILE. % % % % / BY ORDER, .*) () //TRUE COPY// 4 44 4 / 5 5 5 5 6 6 6 6 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI.