BIREN DEVJI PALANI, MUMBAI V. ASST CIT RG 20(1), MUMBAI

ITA 2397/MUM/2012

• Counselvise Citation: 239719914 RSA 2012
• Duration Of Justice: 3 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 03-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 11-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J K GARGDR
• Assessee Lawyers: JITENDRA SINGH
• Keywords: Opportunity of being heard
• Section: 69C

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NOS.2395, 2396 AND 2397/MUM/2012 ASSESSMENT YEARS: 2006-07, 2007-08 AND 2008-09 SHRI BIREN DEVJI PALANI, 207, NIMBUS TRADE CENTERE, OPP. MALAD, LINK ROAD, ANDHERI (W), MUMBAI-400058 / VS. THE INCOME TAX OFFICER, WARD-20(1)(2), PIRAMAL CHAMBERS, LALBAUG, MUMBAI-400061 ( '#$ /ASSESSEE) ( / REVENUE) P.A. NO. AEWPP8926N '#$ / ASSESSEE BY SHRI JITENDRA SINGH / REVENUE BY SHRI J.K.GARG-DR % & ' ( / DATE OF HEA RING : 27/08/2015 ' ( / DATE OF ORDER: 22/09/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THESE THREE APPEALS ARE BY THE ASSESSEE FOR ASSESS MENT YEARS 2006-07, 2007-08 AND 2008-09, CHALLENGING THE IMPUGNED ORDERS DATED 03/02/2012 AND 02/02/2012 RESPECTIVELY. BIREN DEVJI PALANI ITA NO.2395, 2396 AND 2097/MUM/2012 2 2. WE HAVE HEARD SHRI JEETENDRA SINGH, LD. COUNSEL FOR THE ASSESSEE AND SHRI J.K. GARG, LD. DR. THE FIRST GROUND IN ITA NO.2395/MUM/2012 PERTAINS TO DISALLOWANCE OF TELEPHONE EXPENSES OF RS.6,155/-, THE CLAIM OF THE LD. COUNSEL IS THAT THIS IS EXCESSIVE ON THE OTHER HAND, THE LD . DR DEFENDED THE DISALLOWANCE. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE T HAT IDENTICALLY IN THE CASE OF ASSESSEE FOR A.Y. 2005-0 6 VIDE ORDER DATED 25/10/2013 (ITA NO.1399/MUM/2010), THIS GROUN D WAS DECIDED AGAINST THE ASSESSEE. FOLLOWING THE SAM E REASONING, WE FIND NO INFIRMITY IN THE IMPUGNED ORD ER, THUS, THIS GROUND IS REJECTED. 3. THE NEXT GROUND PERTAINS TO OFFICE EXPENSES OF RS.14,100/-. THE LD. COUNSEL FOR THE ASSESSEE CONTE NDED THAT SUCH DISALLOWANCE IS HIGHLY EXCESSIVE. ON THE OTHE R HAND, THE LD. DR DEFENDED THE CONCLUSION ARRIVED AT IN TH E IMPUGNED ORDER. 3.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE T HAT IN ITS ACCOUNTS, THE ASSESSEE DEBITED RS.1,40,996/- TOWARD S OFFICE EXPENSES. ON VERIFICATION BY THE LD. ASSESSING OFFI CER, IT WAS FOUND THAT THE ASSESSEE COULD NOT PRODUCE ALL THE B ILLS/ VOUCHERS AND MOST OF THE EXPENSES WERE INCURRED IN CASH, WHICH WERE BASED UPON SELF MADE VOUCHERS, ACCORDING LY, 10% OF THE TOTAL EXPENSES WERE DISALLOWED. ON APPEAL, T HE LD. COMMISSIONER OF INCOME TAX (APPEALS) AFFIRMED THE S AME. KEEPING IN VIEW, THE TOTALITY OF FACTS AND UNCONTRO VERTED BIREN DEVJI PALANI ITA NO.2395, 2396 AND 2097/MUM/2012 3 FINDING THAT THE EXPENSES WERE NOT PROPERLY VOUCHED AND CASH WAS PAID, THUS, 10% OF THE DISALLOWANCE IS QUI TE REASONABLE, THEREFORE, THIS GROUND OF THE ASSESSEE IS ALSO HAVING NO MERIT, CONSEQUENTLY, DISMISSED. 4. THE NEXT GROUND PERTAINS TO UPHOLDING THE DISALLOWANCE OF RS.13,31,360/- MADE ON ACCOUNT OF I NTEREST CLAIM. THE CRUX OF ARGUMENT IS THAT THE LD. COMMISS IONER OF INCOME TAX (APPEALS) COULD NOT APPRECIATE THE FACT THAT THE INTEREST WAS PAID ON BORROWED FUNDS THAT TOO FOR TH E PURPOSES OF BUSINESS. THE ASSESSEE CLAIMED THAT HE IS IN A POSITION TO EXPLAIN THE CLAIMED EXPENSES WITH DOCUM ENTARY EVIDENCE. THE LD. DR DEFENDED THE CONCLUSION ARRIV ED AT IN THE IMPUGNED ORDER BY ARGUING THAT IT MAY NOT BE SE T ASIDE TO THE ASSESSING OFFICER AGAIN, AS THE CLAIMED LOAN TO MR. JOY INTERNATIONAL IS AN INVESTMENT IN SHARES. 4.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WITHOUT G OING INTO MUCH DELIBERATION, MATERIAL AVAILABLE ON RECORD AND THE ARGUMENTS ADVANCED BY THE LD. RESPECTIVE COUNSEL, W E ARE OF THE VIEW, THAT MANDATE OF THE CONSTITUTION IS TO LE VY AND COLLECT DUE TAXES. IF THE ASSESSEE IS IN A POSITION TO SUBSTANTIATE ITS CLAIM, THEREFORE, THE LD. ASSESSIN G OFFICER IS DIRECTED TO EXAMINE THE CLAIM OF THE ASSESSEE AND D ECIDE AFRESH IN ACCORDANCE WITH LAW. THE ASSESSEE BE GIVE N OPPORTUNITY OF BEING HEARD WITH FURTHER LIBERTY TO FURNISH EVIDENCE, IF ANY, IN SUPPORT OF ITS CLAIM. THE ASSE SSING OFFICER IS DIRECTED TO EXAMINE WHETHER IT IS A LOAN OR INVE STMENT IN SHARES, THUS, THIS GROUND IS ALLOWED FOR STATISTICA L PURPOSES. BIREN DEVJI PALANI ITA NO.2395, 2396 AND 2097/MUM/2012 4 THIS WILL ALSO COVER GROUND A (1 TO 3) OF ITA NO. 2396/MUM/212 AND IDENTICAL GROUND NO.A(1 TO 3) IN I TA NO. 2397/MUM/2012 ALSO, THUS, THE RESPECTIVE GROUNDS IN THE RESPECTIVE APPEAL ARE ALLOWED FOR STATISTICAL PURPO SES. 5. THE ONLY GROUND REMAINED FOR OUR CONSIDERATION IS WITH RESPECT TO DISALLOWANCE OF CREDIT CARD EXPENSE S OF RS.6,06,650/- (ITA NO.2397/MUM/2012). THE CRUX OF ARGUMENT ADVANCED ON BEHALF OF THE ASSESSEE IS THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FAIL TO APPREC IATE THAT SUCH EXPENSES ARE REFLECTED IN THE BOOKS AND ALSO I N A POSITION TO PRODUCE THE RECORD. THE LD. DR DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER. 5.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON THE BA SIS OF AIR INFORMATION, THE ASSESSING OFFICER FOUND THAT THE A SSESSEE INCURRED EXPENDITURE OF RS.6,06,650/- THOROUGH A CR EDIT CARD ISSUED BY AMERICAN EXPRESS BANK. THE ASSESSEE WAS ASKED TO EXPLAIN ITS POSITION ALONG WITH SOURCE OF THESE EXPENSES THROUGH ORDER SHEET ENTRY DATED 29/11/2010. THE ASS ESSEE CLAIMED THAT THESE EXPENSES WERE NOT INCURRED BY TH E ASSESSEE AND AT THE SAME TIME DID NOT DISPUTE THAT THE ASSESSEE WAS HAVING CREDIT CARD. THIS ISSUE HAS BEE N DISCUSSED AT PAGE-3 OF THE ASSESSMENT ORDER. THE AS SESSEE HAS NOT PRODUCED ANY EVIDENCE CONTRADICTING THE INF ORMATION CONFRONTED TO THE ASSESSEE AND ALSO THE POSSESSION OF THE CREDIT CARD. IT WAS ESTABLISHED THAT THE CARD WAS I SSUED IN THE NAME OF THE ASSESSEE, THUS, IT IS THE DUTY OF THE A SSESSEE TO EXPLAIN THE NATURE AND THE SOURCE OF EXPENDITURE, T HUS, WE BIREN DEVJI PALANI ITA NO.2395, 2396 AND 2097/MUM/2012 5 AFFIRM THE STAND OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IN HOLDING THAT IT WAS UNACCOUNTED EXPEND ITURE WITHIN THE PROVISIONS OF SECTION 69C OF THE ACT. TH IS GROUND OF THE ASSESSEE IS HAVING NO MERIT, THEREFORE, DISM ISSED. FINALLY, I. ITA NO.2395/MUM/2012 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES, II. ITA NO. 2396/MUM/2012 IS ALLOWED FOR STATISTICAL PURPOSES AND III. ITA NO.2397/MUM/2012 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 22/09/2015. SD/ - (ASHWANI TANEJA) SD/ - (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % & MUMBAI; ) DATED : 22/09/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. +,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 % 1 ( + ) / THE CIT, MUMBAI. 4. 0 0 % 1 / CIT(A)- , MUMBAI 5. 34 .' , 0 +( ' 5 , % & / DR, ITAT, MUMBAI 6. 6# 7& / GUARD FILE. / BY ORDER, /3+ . //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % & / ITAT, MUMBAI