BLISS COMMERCIAL P.LTD, MUMBAI V. DCIT 12(1)(2), MUMBAI

ITA 241/MUM/2017

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4297 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 12-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.241/MUM/2017 ( / ASSESSMENT YEAR: 2012-13) BLISS COMMERCIAL PRIVATE LIMITED 401, JHULELAL, 16 TH ROAD KHAR(W), MUMBAI-400 052 / VS. DE PUTY COMMISSIONER OF INCOME TAX-12(1)(2) AAYKAR BHAVAN, M.K. ROAD MUMBAI-400 020 ! ./ ./PAN/GIR NO. AABCB-4598-C ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) A SSESSEE BY : NONE RE VENUE BY : SHRI M.K.SINGH, DR / DATE OF HEARING : 03/10/2018 / DATE OF PRONOUNCEMENT : 10/10/2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2012- 13 CONTEST THE ORDER OF THE LD. COMMISSIONER OF INC OME TAX (APPEALS)-20, MUMBAI, [CIT(A)], APPEAL NO. CIT(A)- 20/DCIT.12(1)(2)/IT-179/2014-15 DATED 23/09/2016 QUA CONFIRMATION OF DISALLOWANCE OF CERTAIN EXPENSES FOR RS.10.20 LA CS. THE 2 ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. DEPUTY COMMISSIONER OF INCOME TAX-CIRCLE 12(1)(2), MUMBAI [AO] U/S 143(3) OF THE INCOME TAX ACT, 1961 ON 26/02/2015 WHEREIN THE LOSS OF THE ASSESSEE HAS BEEN DETERMINED AT RS.122.56 LACS AFTE R CERTAIN DISALLOWANCES / ADJUSTMENTS AS AGAINST RETURNED LOS S OF RS.133.10 LACS E-FILED BY THE ASSESSEE ON 27/09/2012. 2. NONE HAS APPEARED FOR ASSESSEE AND NO VALID ADJO URNMENT APPLICATION IS ON RECORD DESPITE SERVICE OF NOTICE. THE PERUSAL OF ORDER SHEET ENTRIES REVEALS THAT THE ASSESSEE HAS REMAINE D NEGLIGENT IN ATTENDING THE HEARING ON LAST OCCASION ALSO. LEFT W ITH NO OPTION, WE PROCEED TO DISPOSE-OFF THE SAME IN TERMS OF RULE 24 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963 ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING LD. DEPARTMENTAL REPRES ENTATIVE, SHRI M.K.SINGH WHO HAS JUSTIFIED THE STAND OF LOWER AUTHORITIES IN MAKING IMPUGNED ADDITIONS / DISALLOWANCES. 3. THE FACT ON RECORD REVEALS THAT THE ASSESSEE BEI NG RESIDENT CORPORATE ENTITY WAS ENGAGED IN MANUFACTURING OF FABRICS ON CONTRACT BASIS. DURING ASSESSMENT PROCEEDINGS, IT WAS NOTED THAT TH E ASSESSEE DID NOT CARRY OUT ANY BUSINESS ACTIVITY DURING THE IMPUGNED AY AND EARNED MEAGER INCOME IN THE SHAPE OF INTEREST / DIV IDEND. THEREFORE, VARIOUS EXPENDITURE AGGREGATING TO RS.135.35 LACS A S CLAIMED BY THE ASSESSEE IN THE PROFIT & LOSS ACCOUNT, IN THE OPINI ON OF LD. AO, COULD NOT BE ALLOWED TO THE ASSESSEE. AFTER CONSIDERING A SSESSEES SUBMISSIONS, THE EXPENSES AGGREGATING TO RS.10.20 L ACS REPRESENTING 3 EXPENSES OTHER THAN RENT, DEPRECIATION & INSURANCE WERE DISALLOWED IN THE ABSENCE OF ANY BUSINESS ACTIVITY. 4. AGGRIEVED, THE ASSESSEE AGITATED THE SAME BEFORE LD. CIT (A) VIDE IMPUGNED ORDER DATED 23/09/2016 WHEREIN LD. CI T(A), AFTER DUE CONSIDERATION OF FACTUAL MATRIX, CONFIRMED THE STAN D OF LD. AO BY OBSERVING AS UNDER:- 5.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AND TH E SUBMISSIONS MADE IN THUS REGARDS. IT IS SEEN THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. ON PERUSAL OF THE BOOKS OF ACCOUNTS OBSERVED T HAT THE ASSESSEE HAD NOT CARRIED OUT ANY BUSINESS ACTIVITY DURING THE YEAR. IT WAS NOTICED BY THE A.O. FROM THE PROFIT & LOSS ACCOUNT THAT DURING THE YEAR, THE ASSESSEE HAD GENERATED MERELY A SUM OF RS. 75,773/- AS DIVIDEND AND RS.1,4 9,740/- AS AND BY WAY OF INTEREST INCOME ON BANK DEPOSITS AND AFTER CLAIMING VARIOUS EXPENSES TOTALING TO RS.1,21,07,228/-, THE ASSESSEE HAD DECLARED NET LOS S OF RS.1,18,81,715/-. IN THE COMPUTATION OF TOTAL INCOME, THE ASSESSEE HAD ADDED DEPRECIATION AS PER COMPANIES ACT AT RS.47,08,587/- AND CLAIMED DEPRECI ATION AS PER I.T. ACT OF RS.61,36,991/-. THUS, CONSIDERING THE PROFIT & LOSS ACCOUNT AND COMPUTATION OF TOTAL INCOME, AND SINCE THERE WAS NO BUSINESS ACTIV ITY DURING THE IMPUGNED YEAR THE A.O. HAD DISALLOWED AND AMOUNT OF RS.10,20,558/ - OUT OF THE TOTAL CLAIM OF EXPENSES. IT IS NOTED THAT THE A.O. HAS EXAMINED TH E DETAILS OF EXPENSES AND ALLOWED A SUBSTANTIAL PORTION OF EXPENSES. THE BALA NCE OF RS.10,20,558/- WAS DISALLOWED AS THE EXPENSES DEBITED TO PROFIT & LOSS ACCOUNT WERE FOUND TO BE EXCESSIVE AND NOT CONNECTED TO THE BUSINESS ACTIVIT Y OF THE ASSESSEE. DURING APPELLATE STAGE ALSO THE ASSESSEE HAS FAILED TO EST ABLISH THAT THE EXPENSES CLAIMED WERE ALLOWABLE AND INCURRED WHOLLY AND EXCL USIVE FOR THE PURPOSE OF BUSINESS OF ASSESSEE. HAVING REGARD TO THE FACTS OF THE CASE THE DISALLOWANCE OF EXPENSES OF RS.10,20,558/- MADE BY THE A.O IS FOUND TO BE IN ORDER AND IS UPHELD. ACCORDINGLY, THIS GROUND OF APPEAL IS DISMISSED. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. UPON THOUGHTFUL CONSIDERATION, WE FIND THAT THE FINDINGS OF LD. AO HAVE REMAINED UN-CONTROVERTED. IN THE ABSENCE OF ANY BUSINESS ACTIVITY, THE VARIOUS EXPENDITURE AS CLAIMED BY THE ASSESSEE COULD NOT BE ALLOWED UNLESS IT WAS DEMONSTRATED THAT INCURRIN G OF THE SAME QUALIFIES THE THRESHOLD CONDITIONS AS PRESCRIBED BY SECTION 37(1). 4 NOTHING ON RECORD SUPPORTS THE STAND OF THE ASSESSE E. THEREFORE, FINDING NOTHING PERVERSE IN THE ORDERS OF LOWER AUT HORITIES, WE DISMISS THE APPEAL. 6. THE APPEAL STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH OCTOBER, 2018. SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED :10.10.2018 SR.PS:-THIRUMALESH ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. + ,$ - , - , / DR, ITAT, MUMBAI 6. , ./0 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI