MR. STANEY SILVESTER MENEZES , Mumbai V. ITO 23(3)(3), Mumbai

ITA 2364/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 6745 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 12-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Keywords: Bogus purchase; Depreciation; Business expenditure; Principle of natural justice; Accommodation entries
• Section: 69C; 133(6); 143(1); 13; 37

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI VIKAS AWASTHY, JM & SHRI S . RIFAUR RAHMAN, AM ./ I.T.A. NO . 2364 & 2365 /MUM/2019 ( / ASSESSMENT YEAR: 20 10 - 11 & 20 11 - 12 ) MR. STANEY SILVESTER MENEZES, A - 201, SAIDHAM LOYALA C.H.S. LTD. NAHUR VILLAGE ROAD, MULUND (W), MUMBAI - 400 080 / VS. ITO 23(3)(3) C - 10, PRATYAKSHKAR BHAVAN, BANDRA(E), MUMBAI - 400 051 ./ ./ PAN NO. AAWPM9376R ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI RAHUL HAKANI , AR / RESPONDENTBY : SHRI SANJAY J. SETHI, DR / DATE OF HEARING : 13.01 .202 1 / DATE OF PRONOUNCEMENT : 18.01.2021 / O R D E R PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER : THE PRESENT TWO A PPEAL S HAVE BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMIS S IONER OF INCOME TAX (APPEALS) - 40 IN SHORT REFERRED AS LD. CIT(A) , MUMBAI, DATED 23 .01.2019 2 I.T.A. NO. 2364 & 2365 /MUM/201 9 MR. STANEY SILVESTER MENEZES FOR A SSESSMENT YEAR (IN SHORT A Y ) 2010 - 11 AND 2011 - 12 RESPECTIVELY. 2. SINC E THE ISSUES RAISED IN BOTH THE APPEALS ARE IDENTICAL, THEREFORE, FOR TH E SAKE OF CONVENIENCE, THESE APPEALS ARE CLUBBED, HEARD AND DISPOSED O F F BY THIS CONSOLIDATED ORDE R. FIRSTLY, WE A RE TAKING APPEAL IN ITA NO. 2364 /MUM/2019 FOR AY 2010 - 11 . 3 . THE BRIEF FACTS OF THE CASE ARE , THE ASSESSEE IS A MANUFACTURER AND SUPPLIER OF IRON GATES, GRILLS, SHUTTERS AND VARIOUS FABRICATION WORKS LIKE GANTRY, PILE CAP SHUTTERING, LINERS ETC. IN BRIDGE CONSTRUCTION. THE ASSESSEE HAS D ECLARED INCOME UNDER THE HEAD PROFITS AND GAINS FROM BUSINESS OR PROFESSION. A SSESSEE FILED ITS RETURN OF INCOME ON 26.09.2010 DECLARING TOTAL INCOME OF RS. 5,11,360/ - / - . THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT. FURTHER THE CASE WAS SELECTED FOR SCR UTINY AND STATUTORY NOTICES WERE ISSUED AND SERVED ON THE ASSESSEE. IN RESPONSE, AR OF THE ASSESSEE FILED THE RELEVANT INFORMATION AS CALLED FOR. 4. AFTER VERIFICATION OF DETAILS FILED BY THE ASSESSEE, AO DISALLOWED THE FOLLOWING EXPENSES AND ADDED TO THE TOTAL INCOME. 3 I.T.A. NO. 2364 & 2365 /MUM/201 9 MR. STANEY SILVESTER MENEZES I . RS. 20277/ - I.E. 10% OF RS. 202771/ - ON ACCOUNT OF DEPRECIATION ON CAR FOR WANT OF VERIFICATION AS THE ELEMENT OF PER SONAL USE IN RESPECT OF CAR CAN NOT BE RULED OUT. II . THE INFORMATION HAS BEEN RECEIVED FROM DGIT (INVESTIGATION)/ SALES T AX DEPARTMENT REGARDING HAWALA BILLERS WHO HAD GIVEN ACCOMMODATION ENTRIES TO ASSESSEE IN THE FOLLOWING CASES. S.NO NAME OF THE PARTY PROPRIETORY CONCERN TIN F.Y. AMOUNT 1. NIRAJ DINESH LIMBACHIYA SHEETAL TRADING CO . 27250554020V 2009 - 10 . 218453/ - 2. KAMLESH KISHORBHAI SHETH AMBIKA TRADE IMPEX 27350705382V 2009 - 10 54501/ - 3. VINIT VINAYAK GAWADE SOMNATH INTERNATIONAL 27470616755V 2009 - 10 96468 / - 4. CHANDRAKANT J. DHERAI BHUMI SALES CORPORATION 27470704928V 2009 - 10 341437/ - 5. GOPAL SINGH RAWAT G R TRADE LINK 27710642619V 2009 - 10 176790/ - 6. BHARAT P MAKHWANA HUF PAYAL ENTERPRISE 27870658730V 2009 - 10 140216/ - 7. RAMESH JOTIRAM PANCHAL ADINATH TRADING COMPANY 27930682074V 2009 - 10 205452/ - 5. IN ORDER TO VERIFY THE GENUINENESS OF THE TRANSACTIONS, AO ISSUED NOTICE U/S 133(6) TO ALL THE PARTIES AND MOST OF THE SHOW CAUSE NOTICES WERE RETURNED UNSERVED EXCEPT M/S BHUMI SALES CORPO RATION AND M/ S G. R. TRADE LINK WHO HAD FILED A LETTER BEFORE AO THAT THEY HAVE NOT MADE ANY SALES TO THE ASSESSEE. 4 I.T.A. NO. 2364 & 2365 /MUM/201 9 MR. STANEY SILVESTER MENEZES ACCORDINGLY, AO TREATED THE WHOLE PURCHASES AS BOGUS AND MADE 100% DISALLOWANCE ON THE ALLEGED BOGUS PURCHASES. 6 . AGGRIEVED BY THE ABOVE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) AFTER CONSIDERING THE SUBMISSION OF ASSESSEE, SUSTAINED THE ADDITION @ 100% TO M/S BHUMI SALES CORPORATION AND M/S G. R. TRADE LINK BY CONSIDERING THAT THEY HAVE NOT MADE ANY SALES TO THE ASSESSEE AND RESTRICTED THE A DDITION @ 6% TO THE OTHER 5 PARTIES . 7 . NOW BEFORE US, THE ASSESSEE HAS PREFERRED APPEAL BY RAISING THE GROUNDS OF APPEAL AS UNDER: - 1. THE LEARNED CIT(A) ERRED IN CONFIRMING ADDITION U/S. 69C OF ALLEGED BOGUS PURCHASES OF RS. 3,41,437 / - MADE FROM M/S. BHUMI SALES CORPORATION WITHOUT APPRECIATING THAT SECTION 69C IS NOT APPLICABLE AS PAYMENTS FOR PURCHASES WERE MADE THROUGH BANKING CHANNELS AND FURTHER ASSESSEE HAD FILED PURCHASE BILLS, DEL IVERY CHALLAN AND WEIGH BRIDGE RECEIPTS AND BILLS TO PROVE THAT PURCHASES WERE GENUINE AND HENCE ADDITION OF RS. 3,41,437 / - MAY BE DELETED. 1.1 THE LEARNED CIT(A) ERRED IN CONFIRMING ADDITION U/S. 69C OF ALLEGED BOGUS PURCHASE OF RS. 5 I.T.A. NO. 2364 & 2365 /MUM/201 9 MR. STANEY SILVESTER MENEZES 3,41,437/ - MADE F ROM M/S. BHUMI SALES CORPORATION WITHOUT APPRECIATING THAT SAID ADDITION WAS MADE BY ASSESSING OFFICER IN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AS NO OPPORTUNITY OF CROSS - EXAMINATION OF SHRI CHANDRAKANT J. DHERAI PROPRIETOR OF M/S. BHUMI SALES C ORPORATION WAS PROVIDED TO THE ASSESSEE AND HENCE ADDITION OF RS. 3,41,43 7 - MAY BE DELETED. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING ADDITION U/S. 69C OF ALLEGED BOGUS PURCHASES OF RS. 1,76,790/ - MADE FROM M/S. G.R. TRADE LINK WITHOUT APPRECIATING THAT SECTION 69C IS NOT APPLICABLE AS PAYMENTS FOR PURCHASES WERE MADE THROUGH BANKING CHANNELS AND FURTHER ASSESSEE HAD FILED PURCHASES BILLS, DELIVERY CHALLAN AND WEIGH BRIDGE RECEIPTS AND BILLS TO PROVE THAT PURCHASE WERE GENUINE AND HENCE ADDITION OF R S. 1,76,790/ - IS MAY BE DELETED. 2.1 THE LEARNED CIT(A) ERRED IN CONFIRMING ADDITION U/S. 69C OF ALLEGED BOGUS PURCHASES OF RS. 1,76,790 / - MADE FROM M/S. G.R. TRADE LINK WITHOUT APPRECIATING THAT SAID ADDITION WAS MADE BY ASSESSING OFFICER IN GROSS V IOLATION OF PRINCIPLES OF NATURAL JUSTICE AS NO OPPORTUNITY OF CROSS - EXAMINATION OF SHRI GOPAL SINGH RAWAT, PROPRIETOR OF M/S. G.R. TRADE LINK WAS PROVIDED TO THE ASSESSEE AND HENCE ADDITION OF RS. 1,76,790/ - MAY BE DELETED. 6 I.T.A. NO. 2364 & 2365 /MUM/201 9 MR. STANEY SILVESTER MENEZES 3. WITHOUT PREJUDICE TO A BOVE, THE LEARNED CIT(A) ERRED IN SUSTAINING ADDITION OF ENTIRE AMOUNT OF ALLEGED BOGUS PURCHASES FROM M/S. BHUMI SALES CORPORATION AND M/S. G.R. TRADE LINK. 4. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE ANY OF THE ABOVE GROUNDS OF APP EAL. 8 . BEFORE US, LD. AR BROUGHT TO OUR NOTICE PAGE 4 OF THE STATEMENT OF FACTS FILED BEFORE LD. CIT(A), IN WHICH ASSESSEE HAS OBJECTED FOR 100% ADDITION OF ALLEGED PURCHASES BY THE AO RELYING ON THE STATEMENT OF M/S BHUMI SALES CORPORATION AND M/S G. R. TRADE LINK WITHOUT GIVING THEM OPPORTUNITY TO CROSS EXAMINE TO THE ABOVE SAID PARTIES. HE SUBMITTED THAT LD. CIT(A) HAS NOT ADJUDICATED THE ABOVE PLEA RAISED BY THE ASSESSEE RAISED BEFORE HIM. ON THE ALTERNATIVE PLEA, HE SUBMITTED THAT THE PURCHASES MADE FROM THESE PARTIES MAY BE TREATED SIMILAR TO THE OTHER PARTIES ON WHICH LD. CIT(A) MADE ADDITION @ 6% AND PRAYED THAT EITHER DELETE THE ADDITION SUSTAINED BY LD. CIT(A) ON RELYING O N VARIOUS JUDICIAL PRONOUNCEMENTS IN CASE OF VIOLATION OF NATURAL JUSTICE I.E. SUSTAINING THE ADDITION WITHOUT GIVING OPPORTUNITY FOR CROSS EXAMINATION TO THE OTHER PARTIES OR TO RESTRICT THE DISALLOWANCE @ 6%. 7 I.T.A. NO. 2364 & 2365 /MUM/201 9 MR. STANEY SILVESTER MENEZES 9. ON THE OTHER HAND, LD. DR OBJECTED TO THE SUBMISSION OF THE LD. AR AND SUBMITTED THAT ASSESSEE HAS CLAIMED THE ABOVE SAID PURCHASES IN THEIR P & L ACCOUNT AND IT IS THE DUTY OF ASSESSEE TO BRING THE PARTIES BEFORE THE AO TO PROVE THE GENUINENESS OF THE TRANSACTION. SINCE, ASSESSEE HAS FAILED TO C OMPLY THE SAME, AO HAS ISSUED SHOW CAUSE NOTICE U/S 133(6) TO ALL THE PARTIES AND THOSE PARTIES HAVE CONFIRMED THAT THEY HAVE NOT MADE SALES WITH THE ASSESSEE. HE FURTHER S UBMITTED THAT AO IS NOT BOUND TO GIVE ONE MORE OPPORTUNITY TO CROSS EXAMINE BY THE A SSESSEE . HE RELIED AND SUPPORTED THE FINDINGS OF AO AND LD. CIT(A). 10 . CONSIDERED THE RIVAL SUBMISSION S OF BOTH THE PARTIES AND MATERIAL PLACED ON RECORD. WE NOTICE THAT 2 OF THE ALLEGED PARTIES I.E. M/S BHUMI SALES CORPORATION AND M/S G. R. TRADE LINK H AVE CONFIRMED BEFORE THE AO THAT THEY HAVE NOT SUPPLIED ANY MATERIAL TO THE ASSESSEE AND ASSESSEE HAS CLAIMED THE ALLEGED PURCHASES AS THEIR EXPENSES IN THEIR FINANCIAL STATEMENT. IT IS FACT THAT ASSESSEE IS INDULGED IN SUBMITTING BOGUS PURCHASES IN ORDER TO REDUCE THE PROFIT MARGIN AGAINST THE SALES MADE BY THEM. IT IS FACT ON RECORD THAT AO HAS NOT DOUBTED THE SALES TRANSACTIONS AND AO HAS 8 I.T.A. NO. 2364 & 2365 /MUM/201 9 MR. STANEY SILVESTER MENEZES DISALLOWED THE PURCHASE FROM THE ABOVE SAID 2 PARTIES. CONSIDERING THE FACTS THAT THEY HAVE NOT MADE ANY SALES TO THE ASSESSEE, HOWEVER ASSESSEE HAS FILED COPY OF THE PURCHASES, WHICH ARE PLACED ON RECORD, AO SHOULD HAVE GIVEN OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE THOSE PARTIES. SINCE ASSESSEE HAS MADE A PLEA BEFORE LD. CIT(A) AND LD. CIT(A) SHOULD HAVE GIVEN AN O PPORTUNITY OR ADJUDICATE ON THIS ISSUE. THEREFORE, FOR THE SAKE OF NATURAL JUSTICE, WE ARE INCLINED TO SUSTAIN THE ADDITION @ 6% SIMILAR TO THE OTHER ALLEGED PURCHASES. ACCORDINGLY, ADDITION IS SUSTAINED @ 6% TO THE ALLEGED PURCHASES. THEREFORE, THE GROUND S RAISED BY THE ASSESSEE ARE PARTLY ALLOWED. 11. CONSEQUENTLY, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. 12. NOW COMING TO ITA NO. 2365/MUM/2019 FOR ASSESSMENT YEAR 2011 - 12 FILED BY THE ASSESSEE. 13. THE BRIEF FACTS OF THE CASE ARE, DURING THIS ASSESSMENT YEAR, AO RECEIVED INFORMATION FROM THE SALES TAX D EPARTMENT THAT ASSESSEE HAS IN DULGED IN BOGUS PURCHASES. ON VERIFICATION, AO OBSERVED THAT ASSESSEE HAS MADE PURCHASES FROM M/S PAYAL 9 I.T.A. NO. 2364 & 2365 /MUM/201 9 MR. STANEY SILVESTER MENEZES ENTERPRISES OF R S. 3,17,872/ - AND M/S PAYAL ENTERPRISES IS A HAWALA DEALER, ISSUING BILLS WITHOUT ACTUAL SALES OF GOODS. ACCORDINGLY, AO MADE 100% DISALLOWANCE TO THE ALLEGED PURCHASES. 14. AO FURTHER OBSERVED THAT ASSESSEE HAS CLAIMED LABOUR CHARGES OF RS. 11,24,133/ - A ND THIS LABOUR CHARGES WERE PAID TO VARIOUS LABOURERS ON DAY TO DAY WORK AND PAYMENTS WERE MADE IN CASH AND ALL THE VOUCHERS WERE SELF MADE WHICH WERE NOT INDEPENDENTLY VERIFIABLE. ACCORDINGLY, HE DISALLOWED AN AMOUNT OF RS. 75,000/ - 15. AO FURTHER OBSERVE D THAT ASSESSEE HAS CLAIMED DEPRECIATION ON MOTOR CAR EXPENSES TO THE EXTENT OF RS. 2,89,594/ - AND ASSESSEE WAS ASKED TO PROVE THE LOG BOOK FOR RUNNING THE MOTOR CAR. SINCE ASSESSEE COULD NOT SUBMIT ANY LOG BOOK FOR USE OF MOTOR CAR FOR PERSONAL OR OFFICIA L USE, AO MADE DISALLOWANCE @ 20% OF THE SAID EXPENSES. 16 . AGGRIEVED BY THE ABOVE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) AFTER CONSIDERING THE SUBMISSION OF ASSESSEE, LD. CIT(A) SUSTAINED THE ADDITIONS MADE 10 I.T.A. NO. 2364 & 2365 /MUM/201 9 MR. STANEY SILVESTER MENEZES ON BOGUS PURCHASE AND LABOUR CHARGES. WITH REGARD TO DISALLOWANCE OF MOTOR CAR, HE REDUCED THE DISALLOWANCE FROM 20% TO 10%. 17 . AGGRIEVED WITH THE ABOVE, ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: - 1. THE LEARNED CIT(A) ERRED IN CONFIRMING ADDITION U/S. 69C OF ALLEGED BOGUS PURCHASES OF RS. 3,17,872 / - FROM M/S. PAYAL ENTERPRISES WITHOUT APPRECIATING THAT SECTION 69C IS NOT APPLICABLE AS PAYMENT IS MADE THROUGH BANKING CHANNELS AND FURTHER ASSESS E E HAD PRODUCED PURC HASE BILLS, BANK STATEMENTS, DELIVERY CHALLANS, WEIGH BRIDGE BILLS TO PROVE THE GENUINENESS OF THE PURCHASES AND HENCE THE ADDITION OF RS. 3,17,872/ - MAYBE DELETED. 1.1 WITHOUT PREJUDICE TO ABOVE, THE LEARNED CIT(A) ERRED IN CONFIRMING ADDITION OF ENT IRE ALLEGED BOGUS PURCHASE OF RS. 3,17,872/ - FROM M/S. PAYAL ENTERPRISES. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING AD HOC ADDITION OF RS. 75,000/ - PERTAINING TO LABOUR CHARGES WITHOUT APPRECIATING THAT ASSESS E E HAD GIVEN ALL DETAILS TO PROVE THE GEN UINENESS OF LABOUR CHARGES AND FURTHER ASSESSING OFFICER DID NOT FIND ANY DEFECT IN THE BOOKS OF 1 1 I.T.A. NO. 2364 & 2365 /MUM/201 9 MR. STANEY SILVESTER MENEZES ACCOUNTS OF THE ASSESS E E AND HENCE ADDITION OF RS. 75,000 MAY BE DELETED. 2.1 WITHOUT PREJUDICE TO ABOVE, THE LEARNED CIT(A) FAILED TO APPRECIATE THAT AD - H OC DISALLOWANCE OF LABOUR CHARGES OF RS. 75,000 IS ON A VERY HIGHER SIDE AND HENCE SAME MAY BE REDUCED. 3. THE LEARNED CIT(A) ERRED IN RESTRICTING DISALLOWANCE OF MOTOR CAR EXPENSES AND MOTOR CAR DEPRECATION TO 10% ON AD - HOC BASIS WITHOUT APPRECIATIN G THAT THE MOTOR CAR WAS USED WHOLLY AND EXCLUSIVELY FOR BUSINESS PURPOSE AND SAME IS ALLOWABLE U/S. 37 AND HENCE, THE AD - HOC DISALLOWANCE OF RS.28,959 MAY BE DELETED. 3.1 WITHOUT PREJUDICE TO ABOVE, THE LEARNED CIT(A) FAILED TO APPRECIATE THAT AD - HO C DISALLOWANCE OF MOTOR CAR EXPENSES AND DEPRECIATION OF RS. 28,959 IS ON A VERY HIGHER SIDE AND HENCE SAME MAY BE REDUCED. 4. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 18. BEFORE US, LD. AR SUBMITTED THAT ASSESSEE HAS PURCHASED MATERIA L FROM M/S PAYAL ENTERPRISES DURING THIS YEAR , AO TREATED THE PURCHASES AS BOGUS PURCHASES. HE BROUGHT TO OUR NOTICE THAT ASSESSEE HAS PURCHASED FROM THE SAME SUPPLIER IN EARLIER 12 I.T.A. NO. 2364 & 2365 /MUM/201 9 MR. STANEY SILVESTER MENEZES ASSESSMENT YEA R ALSO AND IN THAT ASSESSMENT YEAR, LD. CIT(A) HAS SUSTAINED THE ADDITION @ 6%. IN THIS YEAR, LD. CIT(A) AGAIN TREATED THE ABOVE SAID PURCHASES FROM THE SAME PARTIES AS BOGUS BUT SUSTAINED ADDITION 100% OF THE PURCHASES AS BOGUS. WITH REGARD TO OTHER DISA L LOWANCE, HE SUBMITTED THAT AO CANNOT DISALLOW THE ADHOC DISALLOWANCE WITHOUT THERE BEING ANY REASON. IT IS A NORMAL BUSINESS EXPENDITURE INCURRED FOR THE PURPOSE OF BUSINESS. WITH REGARD TO MOTOR CAR EXPENSES, HE PRAYED THAT FURTHER RELIEF MAY BE GRANTED T O THE ASSESSEE. 19 . ON THE OTHER HAND, LD. DR SUBMITTED THAT ALL THE DISALLOWANCES WERE MADE BASED ON THE REPORT OF SALES TAX DEPARTMENT AND IT IS FACT THAT ALL THESE PARTIES WERE HAWALA OPERATORS SUPPLIED BILLS WITHOUT MAKING ANY SALES. HE RELIED ON THE ORDERS PASSED BY THE REVENUE AUTHORITIES. 20 . CONSIDERED THE RIVAL SUBMISSION AND MATERIAL PLACED ON RECORD. WITH REGARD TO BOGUS PURCHASE, WE NOTICE THAT M/S PAYAL ENTERPRISES NO DOUBT ALLEGED AS BOGUS PURCHASE IN THE EARLIER YEAR ALSO AND THE DISALLOWAN CES WERE RESTR ICTED TO 6% OF THE ALLEGED PURCHASES BY THE THEN LD. CIT(A). THIS YEAR A LSO, THE ASSESSEE 13 I.T.A. NO. 2364 & 2365 /MUM/201 9 MR. STANEY SILVESTER MENEZES HAS PURCHASED FROM THE SAME PARTY AND THIS YEAR, LD. CIT(A) DISALLOWED 100% OF ALLEGED PURCHASES. IN OUR VIEW, THERE CANNOT BE DIFFERENT TREATMENT FOR T HE SIMILAR TRANSACTION. THEREFORE, WE DIRECT THE AO TO RESTRICT THE DISALLOWANCE @ 6% OF THE PURCHASES SIMILAR TO THE EARLIER ASSESSMENT YEAR. ACCORDINGLY, GROUND NO. 1 RAISED BY THE ASSESSEE IS ALLOWED. 21. WITH REGARD TO LABOUR CHARGES DISALLOWED BY THE AO ON ADHOC BASIS, WE NOTICE THAT AO HAS MADE A GENERAL COMMENT ON THIS EXPENDITURE THAT THESE WERE NOT VERIFIABLE INDEPENDENTLY AND MADE DISALLOWANCE ON ADHOC BASIC WITH OBSERVATION THAT ASSESSEE HAS SELF MA DE VOUCHERS AND INCURRED EXPENDITURE IN CASH. IT IS THE DUTY OF THE AO TO VERIFY THE VOUCHERS AND CHECK THAT WHETHER THIS EXPENDITURE WAS ACTUALLY INCURRED FOR THE PURPOSE OF BUSINESS OR NOT . I F IT IS NOT, HE CANNOT PROCEED TO DISALLOW ON ADHOC BASIS WITHO UT THERE BEING ANY REASON. THEREFORE, WE ARE INCLINED TO TREAT THE WHOLE EXPENDITURE AS INCURRED FOR THE PURPOSE OF BUSINESS. ACCORDINGLY, GROUND NO. 2 RAISED BY THE ASSESSEE IS ALLOWED. 14 I.T.A. NO. 2364 & 2365 /MUM/201 9 MR. STANEY SILVESTER MENEZES 22. WITH REGARD TO GROUND NO. 3, WE NOTICE THAT LD. CIT(A) HAS SUSTA INED THE ADDITION TO THE EXTENT OF 10% OF THE MOTOR CAR EXPENSES SINCE THERE IS NO RECORD ON UTILIZATION OF THE VEHICLE. IN OUR VIEW, LD. CIT(A) HAS A LREADY GIVEN SUBSTANTIAL RELIEF AND REASONABLE. T HEREFORE , WE SEE NO REASON TO GRANT ANY FURTHER RELIEF TO THE ASSESSEE. ACCORDINGLY, GROUND NO. 3 RAISED BY ASSESSEE IS DISMISSED. 23. CONSEQUENTLY, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. 24 . IN THE NET RESULT, BOTH THE APPEAL S FILED BY THE ASSESSEE ARE PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 18.01. 2021 . SD/ - SD/ - ( VIKAS AWASTHY ) (S. RIFAUR RAHMAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 18.01. 2021 SR.PS . DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 15 I.T.A. NO. 2364 & 2365 /MUM/201 9 MR. STANEY SILVESTER MENEZES 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI