PREMCHAND ROYCHAND & SONS, MUMBAI V. A.C.I.T.RG.-12(1), MUMBAI

ITA 2242/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100589 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 10-12-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 18-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PREMANAND J
• Keywords: Depreciation; Business expenditure; Notional interest; Revenue expenditure; Capital expenditure
• Section: 143(3)

Judgement Text

M/S PREMCHAND R OYCHAND & SONS ITA NO. 2 242 /MUM/20 1 1 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C , MUMBAI . . , , BEFORE SHRI B R BASKARAN , ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , J UDICIAL MEMBER ITA NO. : 2242 /MUM/20 1 1 ( ASSESSMENT YEAR: 200 3 - 0 4 ) M / S PREMCHAND R OYCHAND & SONS , 63, BOMBAY SAMACHAR MARG, FORT, MUMBAI - 400 001 .: PAN: AA AF P 4126 G VS ASST COMMISSIONER OF INCOME TAX RANGE 12(1), AAYAKAR BHAVAN, MUMBAI - 400 020 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KIRIT K A M D AR SHRI SUKESH KOTHARI RESPONDENT BY : SHRI PR E M ANAND J /DATE OF HEARING : 25 - 06 - 201 5 / DATE OF PRONOUNCEMENT : 12 - 08 - 201 5 ORDER , . . : PER AMIT SHUKLA, AM : THE A FORESAID APPEAL HA S BEEN FILED BY THE ASSESSEE A GAINST THE IMPUGNED ORDER DATED 16 . 12 .20 1 0 , PASSED BY CIT (A) - 23 , MUMBAI FOR THE QUANTUM OF ASSESSMENT PASSED U/S 143(3) FOR THE ASSESSMENT YEAR 2003 - 04. IN THE GROUNDS OF APPEAL, THE ASSES S EE HAS RAISED FOLLOWING GROUNDS : THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE FOLLOWING: INCOME FROM HOUSE PROPERTY OF MADHU KUNJ PROPERTY 1 . ERRED IN CONFIRMING THE COMPUTATION OF ANNUAL LETTING VALUE IN RESPECT OF FLAT C OF THE MADHU KUNJ PROPERTY SITUATED AT 7, NARAYAN DHABOLKAR ROAD, MUMBAI 400 006 [HEREINAFTER REFERRED TO AS THE MADHU KUNJ PROPERTY] AT RS 20,33,939; 2 . FAILED TO APPRECIATE THAT IN V IEW OF SECTION 7 OF THE BOMBAY RENTS, HOTEL AND LODGING HOUSE RATES CONTROL ACT, 1947 THE M/S PREMCHAND R OYCHAND & SONS ITA NO. 2 242 /MUM/20 1 1 2 ANNUAL VALUE OF MADHU KUNJ PROPERTY IS TO BE DETERMINED ON THE BASIS OF THE RENT ACTUALLY RECEIVED; 3 . ERRED IN CONFIRMING COMPUTATION OF NOTIONAL RENT AT RS 2,40,000 ON THE BASIS OF DATA AVAILABLE OF A FLAT IN WORLI WHICH HAD BEEN LET OUT AT RS 25,000 PER MONTH, ALONG WITH AN INTEREST FREE DEPOSIT OF RS 1,20,00,000 AND THEN ADDING PROPORTIONATE NOTIONAL INTEREST AT 18% PER ANNUM OF RS 17,28,000 BASED ON THE SECURITY DEPO SIT OF RS 1,20,00,000 PLACED IN RELATION TO THE WORLI FLAT. TREATING REPAIRS AND MAINTENANCE EXPENDITURE AS CAPITAL EXPENDITURE 4 . ERRED IN CONFIRMING THE DISALLOWANCE OF FOLLOWING OFFICE REPAIRS AND MAINTENANCE EXPENDITURE BY TREATING THE SAME TO BE IN THE NATURE OF CAPITAL EXPENDITURE AND ALLOWING DEPRECIATION ON THE SAME, INSTEAD OF TREATING THE SAME AS REVENUE EXPENDITURE: EXPENDITURE OF RS 80,000 INCURRED ON SHIFTING OF WATER LINE; EXPENDITURE OF RS 90,000 INCURRED ON PURCHASE OF PAINTINGS; EXPEND ITURE OF RS 35,360 INCURRED ON PURCHASE OF ARTIFICIAL PLANTS; AND EXPENDITURE OF RS 16,81,727 INCURRED ON RENOVATION OF TOILET. DISALLOWANCE OF PROFESSIONAL FEES PAID 5 . ERRED IN CONFIRMING DISALLOWANCE OF PROFESSIONAL FEES EXPENDITURE OF RS 53,02,992, PA ID TO PREROY AG, BY TREATING THE SAME AS EXCESSIVE AND UNJUSTIFIABLE. 6 . WITHOUT PREJUDICE TO THE ABOVE, ERRED IN ENHANCING THE DISALLOWANCE OF PROFESSIONAL FEES EXPENDITURE BY RS 9,75,143 (RS 53,02,992 DISALLOWED BY THE LEARNED CIT(A) MINUS RS 43,27,849 DISA LLOWED BY THE LEARNED AO), WITHOUT ISSUING ANY NOTICE / PROVIDING ANY OPPORTUNITY. AD - HOC DISALLOWANCE OF EXPENSES 7 . ERRED IN CONFIRMING THE ADHOC DISALLOWANCE OF E XPENSES ON TELEPHONE, TELEX, AND FAX CHARGES OF RS. 1,20,155 BEING 10 PER CENT OF THE EXPEND ITURE INCURRED; M/S PREMCHAND R OYCHAND & SONS ITA NO. 2 242 /MUM/20 1 1 3 8 . ERRED IN CONFIRMING THE ADHOC DISALLOWANCE OF MOTOR CAR EXPENSES OF RS 89,758, BEING 20 PERCENT OF THE MOTOR CAR EXPENSES INCURRED; 9 . ERRED IN CONFIRMING THE ADHOC DISALLOWANCE OF DEPRECIATION ON MOTOR CAR RS. 1,38,881/ - , BEING 20 PER CENT OF THE MOTOR CAR DEPRECIATION CLAIMED. 2. AT THE OUTSET, THE LD. COUNSEL SUBMITTED THAT MOST OF THE ISSUES RAISED ARE COVERED BY THE DECISION OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 1998 - 99 TO 2002 - 03. 3. T HE ASSESSEE IS A PA RTNERSHIP FIRM ENGAGED IN THE BUSINESS OF PROVIDING BUSINESS CENTRE SERVICES AND MAKING INVESTMENTS. THE FIR S T ISSUE RAISED BY THE ASSESSEE VIDE GROUND NO. 1 IS THAT , THE LD. CIT(A) HAS ERRED IN COMPUTING THE INCOME FROM HOUSE PROPERTY AT RS. 20,33,939/ - . THE ASSESSING OFFICER HAS ADOPTED THE ANNUAL LETTING VALUE AS ADOPTED IN AY 2002 - 03 AT RS. 20,20,375/ - AS AGAINST RS. 59,000/ - SHOWN BY THE ASSESSEE AND THEREBY COMPUTED THE NET INCOME FROM THE HOUSE PROPERTY IN THE FOLLOWING MANNER: PROPERTY AT MADHUKUNJ , 7, NARAYAN DABHOLKAR ROAD, MUMBAI - 6 (TOTAL AREA 10620 FEET) ANNUAL LETTING VALUE AS ADOPTED IN AY 2002 - 03 RS. 20,20,375/ - ADD: RECOVERABLE FROM TENANT AS PER STT. RS. 13,564/ - RS. 20,33,939/ - LESS: DEDUCTION U/S 24(A) @ 30% RS. 6,10,18 1/ - NET INCOME FROM HOUSE PROPERTY RS. 14,23,757/ - ============= 4 . THE LD. CIT(A) FOLLOWING THE EARLIER YEAR ORDERS OF THE CIT(A), UPHELD THE ALV DETERMINED BY THE ASSESSING OFFICER. 5 . WE FIND THAT THIS ISSUE HAD COME UP FOR CONSIDERAT ION BEFORE THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR S 1998 - 99, 2001 - 02 & 2002 - 03 , WHEREIN THE TRIBUNAL HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AFTER OBSERVING AND HOLDING AS UNDER: 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND THE PAPER BOOK SUBMITTED BY THE M/S PREMCHAND R OYCHAND & SONS ITA NO. 2 242 /MUM/20 1 1 4 LD. COUNSEL FOR THE ASSESSEE. WE FIND FORCE IN THE SUBMISSION OF LD. COUNSEL THAT FLAT C OF MADHU KUNJ PROPERTY HAS BEEN LET OUT SINCE JULY, 1970. WE HAVE ALSO THE BENEFIT O F THE ORDER OF TRIBUNAL IN ITA NO. 5752/B/86 (SUPRA) BY WHICH IT IS CLEARLY ESTABLISHED THAT FLAT C OF MADHUKUNJ BECAME THE ASSET OF THE FIRM M/S. PREMCHAND ROYCHAND & SONS WITH EFFECT FROM JUNE, 1979. AFTER CONSIDERING ALL THESE FACTS IN TOTALITY, WE HA D NO HESITATION TO HOLD THAT FLAT C IS ON THE SAME PLATFORM AS FLAT A & B OF MADHUKUNJ PROPERTY AND THEREFORE THE ALV OF THE FLAT C SHOULD BE COMPUTED IN THE SAME LINE AS THAT OF FLAT A & B OF MADHUKUNJ PROPERTY. THE FINDINGS OF THE LD. CIT(A) ARE REVE RSED AS WE HAVE HELD THAT ALV OF FLAT C OF MADHUKUNJ HAS TO BE DETERMINED AS PER THE STANDARD RENT. WE DO NOT FIND ANY REASON TO SUSTAIN THE MONEY VALUE OF INTEREST FREE DEPOSIT OF RS. 60,88,738/ - AS COMPUTED BY THE AO AND CONFIRMED BY LD. CIT(A). THEREF ORE, THE AO IS DIRECTED TO DELETE THE ADDITION OF MONEY VALUE OF INTEREST FREE DEPOSIT. ACCORDINGLY, GROUND NO. 1 WITH ALL ITS SUB GROUNDS ARE ALLOWED . 6 . THUS, CONSISTENT WITH THE VIEW TAKEN IN THE EARLIER YEARS, WE DIRECT THE ASSESSING OFFICER TO COMPUT E THE INCOME AS PER THE DIRECTION GIVEN BY THE TRIBUNAL. ACCORDINGLY , THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 7 . THE NEXT ISSUE RAISED IS DISALLOWANCE OF VARIOUS OFFICE REPAIRS AND MAINTENANCE EXPENDITURE BY TREATING THE SAME TO BE IN THE NATURE OF CAPITAL. THE CIT(A) HAS DISALLOWED FOLLOWING EXPENSES: EXPENDITURE OF RS 80,000 INCURRED ON SHIFTING OF WATER LINE; EXPENDITURE OF RS 90,000 INCURRED ON PURCHASE OF PAINTINGS; EXPENDITURE OF RS 35,360 INCURRED ON PURCHASE OF ARTIFICIAL PLANTS; AND EXPENDITURE OF RS 16,81,727 INCURRED ON RENOVATION OF TOILET. 8 . SO FAR AS THE ISSUE RELATING TO PURCHASE OF PAINTING IS CONCERNED, THE LD. COUNSEL SUBMITTED THAT THE SAME STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL IN TH E EARLIER YEARS. SO FAR AS THE ISSUE RELATING TO EXPENDITURE ON SHIFTING OF M/S PREMCHAND R OYCHAND & SONS ITA NO. 2 242 /MUM/20 1 1 5 WATERLINE, RENOVATION OF TOILETS THOUGH HAD NOT COME U P FOR CONSIDERATION BEFORE THE TRIBUNAL IN EARLIER YEARS BUT ARE PURELY REVENUE IN NATURE, BECAUSE NO ENDURING BENEFIT HAD BEE N DERIVED TO THE ASSESSEE IN INCURRING SUC H EXPENDITURE. 9 . ON THE OTHER HAND, LD. DR STRONGLY RELIED UPON THE ORDER S OF THE ASSESSING OFFICER AS WELL AS CTI(A). 1 0 . AFTER CONSI D ERING THE RIVAL SUBMISSIONS AND THE RELEVANT FINDING S GIVEN IN THE IMPUGNE D ORDER, WE FIND THAT SO FAR AS THE ISSUE RELATING TO THE DISALLOWANCE ON ACCOUNT OF PAINTINGS IS CONCERNED , THE TRIBUNAL IN THE EARLIER YEAR S HAS TREATED THE SAME AS REVENUE EXPENDITURE ON THE GROUND THAT CONSIDERING THE NATURE OF ASSESSEES BUSINESS , WHE REIN THE ASSESSEE HAS TO MAINTAIN BUSINESS CENTRE BY GIVING IT A DECENT LOOK, THEREFORE, DISPLAY OF PAINTING ON ITS WALL IS TO BE TREATED AS BUSINESS EXPENDITURE. ACCORDINGLY, RESPECTFULLY FOLLOWING THE SAME WE HOLD THAT SUCH AN EXPENDITURE OF RS. 90,000/ - INCURRED ON PURCHASE OF PAINTINGS IS TO BE TREATED AS REVENUE EXPENDITURE. SO FAR AS EXPENDITURE INCURRED ON SHIFTING OF WATERLINE OF RS. 80,000/ - , WE FIND THAT IT IS PURELY IN THE NATURE OF REPAIR AND MAINTENANCE CHARGE AND SAME CANNOT BE TREATED AS CAPI TAL EXPENDITURE AS NO NEW ASSET CAN BE SAID TO BE BROUGHT INTO EXISTENCE. THEREFORE, SAME IS ALLOWED AS REVENUE EXPENDITURE. SIMILARLY, S O FAR AS EXPENDITURE INCURRED ON ARTIFICIAL PLANTS AT RS 35,360/ - , THE SAME IS IN THE LINES OF THE TRIBUNAL ORDER OF TH E EARLIER YEAR IN RESPECT OF PURCHASE OF PAINTINGS, WHICH IS TO BE HELD AS BUSINESS EXPENDITURE ONLY BECAUSE THIS AGAIN IS TO GIVE A DECENT LOOK TO THE BUSINESS CENTRE. TH U S EXPENDITURE INCURRED ON PURCHASE OF ARTIFICIAL PLANT IS TREATED AS A BUSINESS EXPE NDITURE . 11. SO FAR AS EXPENDITURE INCURRED ON RENOVATION OF TOILET, IT IS SEEN THAT EXPENDITURE HAS BEEN INCURRED ON ACCESSORIES USED IN TOILET ALONG WITH THE EXPENDITURE ON BRICKS AND MASONRY FOR LAYING PERMANENT WALLS, DOORS, TILES, TOILETS , TILES, CO UNTER ETC. ALL T HESE ARE DEFINITELY M E ANT FOR CREATING AN ASSET FOR ENDURING BENEFIT AND SAME M/S PREMCHAND R OYCHAND & SONS ITA NO. 2 242 /MUM/20 1 1 6 HAS RIGHTLY BEEN TREATED AS CAPITAL EXPENDITURE BY THE LD. CIT(A). ACCORDINGLY, THE SAID AMOUNT HAS RIGHTLY BEEN DISALLOWED BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A). HOWEVER, THE ASSESSEE IS ENTITLED FOR DEPRECIATION ON THIS AMOUNT , WHICH WE DIRECT THE ASSESSING OFFICER TO ALLOW IN ACCORDANCE WITH THE RELEVANT RULES. 12. IN GROUND NOS. 5 & 6, THE ASSESSEE HAS CHALLENGED THE DISALLOWANCE OF PROFESSIONA L FEES PAID TO PREROY AG, ON THE GROUND THAT THE SAME IS EXCESSIVE. 13. THE ASSESSEE HAS PAID PROFESSIONAL FEES OF RS. 63,87,487/ - AS AGAINST THE LAST YEAR S CLAIM OF RS. 20,59,638/ - . IN RESPONSE TO THE SHOW CAUSE NOTICE, WHY SUCH AN EXPENDITURE HAS INC REASED SUBSTANTIALLY, THE ASSESSEE DID NOT GIVE ANY EXPLANATION AS OBSERVED BY THE ASSESSING OFFICER . FURTHER DURING THE YEAR THE ASSESSEE S RECEIPTS IS RS.1,99,47, 418 / - AS AGAINST LAST YEARS RECEIPT OF RS. 1,93,77,2 4 6/ - . THE EXPENDITURE IN COMPARISON HAS INCREASED MANIFOLD, THEREFORE , SUCH AN INCREASE OF EXPENDITURE IS NOT JUSTIFIED. ACCORDINGLY, HE DISALLOWED THE CLAIM OF PROFESSIONAL FEE AT RS. 43,27,849/ - , AFTER ALLOWING WHAT WAS CLAIMED IN EARLIER YEAR. 14. BEFORE THE CIT(A), THE ASSES S EE SUBMITTED T HA T PROFESSIONAL FEES ARE TOWARDS ACC OUNTING MATTERS, MANAGEMENT FEES, TAX MATTERS ETC. INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS. THE PROFESSIONAL FESS CONSTITUTE MAINLY MANAGEMENT FEES AMOUNTING TO RS. 53,02,992/ - PAID TO PREROY AG. THE SAID FIRM IS MAINLY ENGAGED IN PROVIDING BUSINESS, C ONSULTANCY SERVICES IN THE AREA OF INVESTMENT, BUSINESS STRATEGY, INSURANCE, STRUCTURING NEW JOINT VENTURES, PROMOTION STRATEGIES ETC. THE LD. CIT(A) HELD THAT N O DETAILS OF SERVICES RENDERED BY THIS LAW FIRM TO THE ASSESSEE HAVE BEEN PROVIDED. HE HELD THAT THE MERE SUBMISSION OF INVOICES RAISED CANNOT BE ALLOWED. NOTHING HAS BEEN SHOWN THAT SUCH A HUGE PAYMENT IS FOR BUSINESS OF THE ASSESSEE, WHE N ITS MAIN BUSINESS IS TO RUN BUSINESS CENTRE. ACCORDIN GLY, HE DISALLOWED THE ENTIRE AMOUNT OF RS. 53,02,993/ - PAID TO PREROY AG. M/S PREMCHAND R OYCHAND & SONS ITA NO. 2 242 /MUM/20 1 1 7 15. THE LD. COUNSEL SUBMITTED THAT THE LD. CIT(A) HAS ENHANCED THE AMOUN T O F DISALLOWANCE OF RS. 43 LAKHS TO 53 LAKHS WITHOUT ISSUING ANY SHOW CAUSE NOTICE OR ENHANCEMENT NOTICE A S REQUIRED U/S 250. THEREFORE, SUCH DISALLOWANCE/ENHANCEMENT CANNOT BE SUSTAINED . ON THE OTHER HAND, LD. DR STRONGLY RELIED UPON THE ORDER OF THE CIT(A) AND SUBMITTED THAT SO FAR AS THE ISSUE RELATING TO QUANTUM OF ENHANCE ME NT, THE MATTER CAN BE RESTORED BACK TO THE FILE OF THE CIT(A). 16. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND ON PERUSAL OF THE IMPUGNED ORDER, WE FIND THAT LD. CIT(A) HAS DISALLOWED THE ENTIRE PAYMENT OF PROFESSIONAL FEE PAID TO PREROY AG ON THE GROUND THAT NO DETAILS OF SERVICES REN DERED HAVE BEEN PROVIDED BY THE ASSESSEE. SUCH A DISALLOWANCE HAD LEAD TO ENHANCEMENT OF DISALLOWANCE, BECAUSE THE ASSESSING OFFICER HAS DISALLOWED ONLY RS. 43,27,849/ - . THUS, WE FEEL THAT IN THE INTEREST OF JUSTICE, THIS MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE CIT(A) TO COMPLY WITH THE MANDATORY REQUIREMENT OF THE LAW FOR GIVING SHOW CAUSE NOTICE TO THE ASSESSEE BEFORE ENHANCEMENT. ACCORDINGLY, GROUND NOS. 5 & 6 ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 17. GROUND NO. 7 TO 9, THE ASSESSEE HAS CHALLENGED THE AD - HOC DISALLOWANCE OF EXPENSES ON ACCOUNT OF TELEPHONE, TELEX, FAX, MOTORCAR EXPENSES AND DEPRECIATION. IT HAS BEEN ADMITTED BY BOTH THE PARTIES THAT THIS ISSUE HAD COME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE IN THE EARLIER YEARS. 18. AFTER CONSIDERING THE RELEVANT FINDING GIVEN IN THE RELEVANT ORDER AND ALSO EARLIER ORDER OF THE TRIBUNAL, WE FIND THAT THE CIT(A) HAS CONFIRMED THE DISALLOWANCE OF 10% IN RESPECT OF TELEPHONE, TELEX AND FAX CHARGES ON THE GROUN D THAT SAME WAS CONFIRMED BY THE TRIBUNAL IN THE AY 2002 - 03 AND ALSO MOTOR CAR EXPENSES AND DEPRECIATI O N TOO HAS BEEN CONFIRMED @ 20% FOLLOWING THE CIT(A) ORDER FOR THE EARLIER YEARS. THE TRIBUNAL HAS DECIDED THIS ISSUE IN THE FOLLOWING MANNER: M/S PREMCHAND R OYCHAND & SONS ITA NO. 2 242 /MUM/20 1 1 8 8. GROUND NO. 2 RELATES TO DISALLOWANCE OF RS. 14,06,991/ - BEING 10% OF THE EXPENDITURE INCURRED IN RESPECT OF TELEPHONE, TELEX AND FAX CHARGES. 9. WE FIND THAT THE AO HAS DISALLOWED 20% OF THE EXPENDITURE CLAIMED UNDER THE HEAD TELEPHONE, TELEX AND FAX CHARGES OUT OF TOTAL DEBIT OF RS. 14,06,991/ - . THE LD. CIT(A) RESTRICTED THE DISALLOWANCE UNDER THIS HEAD 10% AND CONFIRMED THE ADDITION OF RS. 14,06,991/ - . 10. BEFORE US, THE LD. COUNSEL SUBMITTED A CHART SHOWING THE AMOUNTS DEBITED, RECOVERIES MADE FROM TENANTS AND THE NET AMOUNT CLAIMED AS DEDUCTION. THE LD. DR RELIED UPON THE FINDINGS OF THE LD. CIT(A). 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE CHART SUBMITTED BY THE LD. COUNSEL. WE FIND THAT OUT OF TOTAL DEBIT OF RS. 14,06,991/ - , THE ASSESSEE HAS RECOVERED A SUM OF RS. 9,58,197/ - FROM ITS TENANTS THEREBY RESULTING INTO A NET AMOUNT OF RS. 4,48,794/ - . EVEN IF THE FINDINGS OF THE AO ARE ACCEPTED THAT PERSONAL ELEMENT CANNOT BE DENIED DISALLOWANCE OF 10% ON THE GRO SS AMOUNT IS NOT JUSTIFIABLE. IT APPEARS THAT THIS BIFURCATION OF EXPENSES WAS NOT BEFORE THE LOWER AUTHORITIES. WE THEREFORE DEEM IT FIT TO RESTORE THIS MATTER BACK TO THE FILE OF AO. THE AO IS DIRECTED TO VERIFY THE DETAILS OF THIS CHART AND RESTRICT THE DISALLOWANCE OF 10% TO NET AMOUNT ONLY. THIS GROUND OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. THUS , FOLLOWING THE ORDER OF THE TRIBUNAL, WE RESTORE THIS MATTER BACK TO THE FILE OF THE ASSESSING OFFICER WITH SIMILAR DIRECTIONS. ACCORDINGLY, TH ESE GROUNDS ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. M/S PREMCHAND R OYCHAND & SONS ITA NO. 2 242 /MUM/20 1 1 9 19. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH AUGUST , 2015. SD/ - SD/ - ( . . ) ( ) ( B R BASKARAN ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIA L MEMBER MUMBAI, DATE: 12 TH AUGUST , 2015 / COPY TO: - 1 ) / THE APPELLANT. 2 ) / THE RESPONDENT. 3) THE CIT (A) - 23 , MUMBAI. 4 ) THE CIT 12 , MUMBAI. 5 ) , , / THE D.R. C BENCH, MUMBAI. 6 ) \ COPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / , DY. / ASSTT . REGISTRAR I.T.A.T., MUMBAI * . . *CHAVAN, SR.PS