JIVESH R. SACHDEV, MUMBAI V. ITO 20(1)(3), MUMBAI

ITA 250/MUM/2011

• Counselvise Citation: 25019914 RSA 2011
• Duration Of Justice: 3 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 02-04-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 11-01-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PITAMBER DAS
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Unexplained cash credit; Gift; Depreciation; Source of fund; Additional evidence; Corroborative evidences
• Section: 68; 145; 10; 14A; 37(1)

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - I BENCH. .. , ! , BEFORE S/SH.I.P.BANSAL, JUDICIAL MEM BER & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO.250/MUM/2011, ' ' ' ' # # # # / ASSESSMENT YEAR-2005-06 SHRI JIVESH R. SACHDEV 116, MORYA ESTATE, NEW LINK ROAD, ANDHERI(WEST),MUMBAI-400053 VS ITO 20(1)(3), MUMBAI. PAN: AAHPS3385F ( $% / APPELLANT) ( &'$% / RESPONDENT) '() '() '() '() * * * * / ASSESSEE BY : SHRI M. SUBRAMANIAN + * / REVENUE BY : SHRI PITAMBER DAS ' ' ' ' + ++ + ), ), ), ), / DATE OF HEARING : 02-04-2014 -.# + ), / DATE OF PRONOUNCEMENT : 09-04-2014 ' ' ' ' , 1961 + ++ + 254 )1( )/) )/) )/) )/) 0 0 0 0 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM ! ! ! ! ' ' ' ' : CHALLENGING THE ORDER DATED 31.01.2008 OF THE CIT(A )-31,MUMBAI, ASSESSEE HAS FILED FOLLOWING GROUNDS OF APPEAL : 1.THE LEARNED COMMISSIONER OF INCOME TAX APPEALS H AD ERRED IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE IN UPHOLDING THE ADDITION OF A SUM OF RS.4,88,950/- BEING GIFT OF SHARES FROM THE MOTHER OF THE ASSESSEE FROM HER DEMAT ACCO UNT. THE OBSERVATIONS AND REMARKS IN THIS REGARD ARE AGAINST FACTS AND THE LAW AND IN ANY CAS E DO NOT JUSTIFY THE SUSTAINING OF ANY ADDITION U/S 68 OF THE INCOME TAX ACT, 1961. 2.THE LEARNED COMMISSIONER OF INCOME TAX APPEALS HA D ERRED IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE IN NOT ALLOWING IN FULL T HE CLAIM OF THE ASSESSEE THAT NO DISALLOWANCE OUGHT TO HAVE BEEN MADE IN EXPENSES CLAIMED OF DEPR EDATION OF RS.50,343/-BANK CHARGES OF RS. 1,852/-, AND PROFESSIONAL TAX OF RS.2,500/- U/S 14A READ WITH RULE 8 D.THE REMARKS MADE IN THIS REGARD ARE AGAINST FACTS AND THE LAW AND DO NOT JUS TIFY ANY DISALLOWANCE U/S 14A IN THE PRESENT CASE. 3.THE LEARNED COMMISSIONER OF INCOME TAX APPEALS HA D FURTHER ERRED IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE IN UPHOLDING THE ESTIMATI ON OF NET PROFITS U/S 145A AND 145(3) R.W.S. 144, AT THE RATE OF 5% OF THE TURNOVER OF RS.7,82,214/-. THE OBSERVATIONS AND REMARKS IN THIS REGARD ARE AGAINST FACTS AND IN ANY CASE DO NOT JUSTIFY ANY ES TIMATION. IN ANY CASE AND WITHOUT PREJUDICE, TO THE GROUND THAT NO ESTIMATION IS CALLED FOR, THE ES TIMATION MADE IS FAR TOO EXCESSIVE. 4.THE LEARNED COMMISSIONER OF INCOME TAX APPEALS HA D ERRED IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE IN UPHOLDING THE DISALLOW ANCE U/S 40(A)(IA) OF R. 1,00,000/- TOWARDS EXHIBITION EXPENSES, AND RS. 25,154/- TOWARDS XEROX AND STATIONERY EXPENSES. 5.THE APPELLANT CRAVES LEAVE TO ALTER, AMEND OR ADD TO THE AFORESAID GROUNDS OF APPEAL. 2. FIRST GROUND OF APPEAL IS ABOUT THE ADDITION OF A S UM OF RS.4,88,950/-,MADE BY THE AO,U/S.68 OF THE ACT.DURING THE ASSESSMENT PROCEEDINGS AO FOUND THAT THE ASSESSEE HAD CLAIMED A RECEIPT OF A GIFT OF RS.4.88 LAKHS.ON BEING ASKED TO EXPLAIN THE SOURCE OF THE SAID GIFT ALONG WITH SUPPORTING DOCUMENTARY EVIDENCES,THE ASSESSEE EXPLAINED THAT T HE GIFT RECEIVED WAS IN THE FORM OF SHARES OF VARIOUS COMPANIES FROM HIS MOTHER SMT. RAJ SACHDEV OUT OF LOVE AND AFFECTION.AS PER THE AO, NO CONFIRMATION OR GIFT DEED OR ANY OTHER EVIDENCE TO ESTABLISH THE GENUINENESS OF GIFT WAS FILED. HE 2 ITA NO. 250/MUM/2011 SHRI JIVESH R. SACHDEV HELD THAT THE ASSESSEE HAD FAILED TO PROVE THE CRED IT WORTHINESS OF THE DONOR, THAT MERE SUBMISSION OF DETAILS OF GIFT OF SHARES AND SCRIPTS WERE NOT S UFFICIENT TO ESTABLISH THE IDENTITY OF THE DONOR,TH AT THE ENTIRE GIFT AMOUNT CREDITED IN HIS CAPITAL ACCO UNT WAS UNEXPLAINED CASH CREDITS OF THE ASSESSEE WITHIN THE MEANING OF THE PROVISIONS OF SECTION 68 OF THE ACT. 2.1. IN THE APPELLATE PROCEEDINGS,BEFORE THE FIRST APPEL LATE AUTHORITY(FAA),ASSESSEE SUBMITTED THAT THE AO HAD OVERLOOKED AND IGNORED THE SUBMISSI ONS MADE BY THE ASSESSEE,THAT THE GIFT WAS RECEIVED FROM HIS MOTHER AND NOT FROM A THIRD PERSO N,THAT THE SHARES TRANSFERRED WERE ALREADY EXISTING IN THE DC-MAT ACCOUNT OF HIS MOTHER,THAT T HE ASSESSEE HAD OFFERED PROPER EXPLANATION. BEFORE THE FAA CERTAIN ADDITIONAL EVIDENCES WERE FI LED.AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE ORDER OF THE AO,HE HELD THAT THE A SSESSEE HAD NOT FURNISHED ANY OTHER DETAILS OR PARTICULARS OR EVIDENCES IN RESPECT OF THE ALLEGED GIFT DURING THE COURSE OF ASSESSMENT PROCEEDIN - GS,THAT THE CREDIT OF SHARES OF VARIOUS COMPANIES I N HIS DEMAT STATEMENT IN THE MONTH OF DECEM - BER,2004 FURNISHED BY THE ASSESSEE, DID NOT PROVE T HAT THE SAME WERE ACQUIRED OUT OF GIFT RECEIVED FROM HIS MOTHER,THAT NO EVIDENCES WERE PLACED ON RE CORD TO PROVE THAT THE SHARES CREDITED IN THE DEMAT A/C. OF HIS MOTHER,THAT THERE WAS NO EVIDENCE TO ESTABLISH THAT THE SHARES CREDITED IN HIS DEMAT ACCOUNT HAD ORIGINATED FROM THE DE-MAT ACCOU NT OF HIS MOTHER,THAT THE EXACT SOURCE OR ACCOUNT FROM WHICH THOSE SHARES WERE TRANSFERRED TO HIS DEMAT ACCOUNT WAS NOT PROVED BY THE ASSESSEE. 2.2. BEFORE US,AUTHORISED REPRESENTATIVE (AR) SUBMITTED THAT ASSESSEES MOTHER HAD GIFTED SOME SHARES,THAT ALL THE DETAILS WITH REGARD TO THE GIFT MADE WERE PRODUCED BEFORE THE AO, THAT GIFT-DEED WAS PRODUCED BEFORE THE FAA AS AN ADDITIONAL EVIDEN CE,THAT THE SHARES WERE HELD BY THE ASSESSEES MOTHER FOR A LONG PERIOD, THAT ADDITION CONFIRMED BY THE FAA U/S.68 WAS AGAINST THE PROVISIONS OF THE ACT, THAT ASSESSEE HAD NOT TAKEN ANY LOAN FROM HIS MOTHER. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTED THAT ASSESSEE HAD NOT PRODUCED GIFT-DEED BEFORE THE AO, THAT NO EVIDENCE WAS PRODUCED TO PROVE THAT SHARES WERE HEL D BY THE MOTHER OF THE ASSESSEE FOR A LONG PERIOD.HE SUPPORTED THE ORDER OF THE AO AND FAA. 2.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US . WE FIND THAT COPY OF THE DEMAT ACCOUNT OF THE MOTHER OF THE ASSESSEE WAS SUBMITTED BEFORE THE AO, THAT FROM THE D-MAT ACCOUNT IT IS EVIDENT THAT SHARES WERE SHOWN AS OPE NING BALANCE FOR THE YEAR UNDER CONSIDERA - TION.WE FIND THAT WHILE DECIDING THE ISSUE AO/FAA H AS NOT GONE INTO ASPECT OF HOLDING PERIOD OF THE SHARES.IN OUR OPINION,IT IS VERY IMPORTANT AND VITAL FACT TO DECIDE THE APPEAL.IF THE SHARES WERE HELD BY THE MOTHER OF THE ASSESSEE FOR THE EARLIER YEARS ALSO AND SAME WERE PURCHASED BY HER FROM THE EXPLAINED SOURCE OF INCOME THEN NO ADDITION CAN BE MADE FOR THE YEAR UNDER APPEAL. IN THESE CIRCUMSTANCES,WE ARE OF THE OPINION THAT IN THE INT EREST OF JUSTICE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION.HE IS DIR ECTED TO AFFORD A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE.GROUND OF APPEAL NO.1 IS AL LOWED,IN PART, IN FAVOUR OF THE ASSESSEE. 3. IN THE NEXT GROUND THE ASSESSEE HAD CONTESTED THAT THE FAA HAD ERRED IN CONFIRMING THE DISALLOWANCE OF RS.55,989/- MADE BY THE AO BY INVOK ING THE PROVISIONS OF SECTION 14 A OF THE ACT.AO FOUND THAT THE ASSESSEE WAS A PARTNER IN THE FIRM IN WHICH HE HAD RECEIVED INTEREST AND REMUNERATION,BESIDES SHARE OF PROFIT,THAT HE HAD CL AIMED VARIOUS EXPENSES AGAINST THESE TAXABLE AND TAX FREE INCOME EARNED FROM HIS PARTNERSHIP FIR M. CONSIDERING THIS,HE HELD THAT THE EXPENSES CLAIMED FOR EARNING SHARE OF PROFIT WERE EXEMPT UND ER SECTION 10 OF THE ACT,THAT SAME WERE NOT ALLOWABLE AS PER THE SPECIFIC PROVISIONS OF SECTION 14 A OF THE ACT. ACCORDINGLY, PROPORTIONATE EXPENDITURE,AMOUNTING TO RS,55, 989/-,WAS DISALLOWE D ON THIS ACCOUNT. 3.1. BEFORE THE FAA,ASSESSEE ADMITTED THAT HE HAD TAXAB LE AND NON- TAXABLE SOURCES OF INCOME DURING THE YEAR UNDER APPEL,THAT AO MADE DISALLOWAN CE, WITHOUT APPRECIATING THE MERITS OF THE CASE AND THE NATURE OF INCOME EARNED BY THE ASSESSE E,THAT THE EXPENSES CLAIMED INCLUDED DEPRECIATION OF CLAIMED ON BUSINESS PREMISES USED F OR THE CONDUCT AND RUNNING OF HIS PROPRIETARY 3 ITA NO. 250/MUM/2011 SHRI JIVESH R. SACHDEV BUSINESS,THAT THE ENTIRE DEPRECIATION CLAIMED WAS OUTSIDE THE MISCHIEF OF THE PROVISIONS OF SECTION 14A OF THE ACT,THAT OTHER CHARGES ALSO WERE NOT HIT BY THE PROVISIONS OF SECTION 14A.AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE ASSESSMENT ORDER,FAA REFERRED TO THE ORDER OF THE HONBLE JURISDICTIONAL HIGH COURT DELIVERED IN THE CASE OF GODREJ BOYCE AND COMPANY AND HELD THAT ALTHOUGH THE PROVISIONS OF RULE 8D OF THE RULES,DID NOT APPLY TO ASSESSMENT YEARS PRIOR TO AY 2008-09, STILL THE AO COULD MAKE DISALLOWANCE U/ S.14A(1) OF THE ACT,THAT EXPENSES PERTAINING TO THE EXEMPTED INCOME WERE CLAIMED BY THE ASSESSEE .HE DIRECTED THE AO TO DISALLOW THE PROPORTIONATE EXPENSES PERTAINING TO HIS NON-TAXABL E INCOME ON THE BASIS OF TURNOVER OF TAXABLE AND NON-TAXABLE INCOME SHOWN FOR THE RELEVANT ASSES SMENT YEAR. 3.2. BEFORE US,AR SUBMITTED THAT DISALLOWANCE MADE BY TH E AO WAS NOT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 14A OF THE ACT,THAT WHILE MAK ING THE DISALLOWANCE, HE HAD TAKEN INTO CONSIDERATION THE AMOUNT OF DEPRECIATION ALSO, THAT NO BASIS FOR MAKING THE SAID DISALLOWANCE WAS GIVEN BY THE AO.HE RELIED UPON THE ORDER OF NANAVAT I & CO.(16 ITR-TRIB.614).DR SUPPORTED THE ORDERS OF THE FAA. 3.3. AFTER CONSIDERING THE RIVAL SUBMISSIONS,WE ARE OF T HE OPINION THAT MATTER NEEDS FURTHER VERIFI - CATION.ON A QUERY BY A BENCH,AR ADMITTED THAT MOTOR CAR WAS BEING USED BY THE ASSESSEE FOR HIS PERSONAL WORK.HE ALSO ADMITTED THAT AFTER THE AMEND MENTS IN THE PROVISIONS OF PARTNERSHIP FIRM THERE WAS CHANCE IN THE LAW ABOUT COMPUTING THE TAX ABLE INCOME OF THE PARTNERSHIP OF THE FIRM. WE ALSO FIND THAT AO HAD CONSIDERED THE DEPRECIATIO N CLAIMED BY THE ASSESSEE FOR WORKING OUT THE DISALLOWANCE U/S.14A.IN OUR OPINION THE MATTER NEED S FURTHER VERIFICATION AT THE LEVEL OF THE AO.THEREFORE, IN THE INTEREST OF JUSTICE MATTER IS BEING RESTORED BACK TO HIS FILE AND HE IS DIRECTED TO DECIDE THE ISSUE AFRESH AFTER GIVING A REASONABL E OPPORTUNITY OF HEARING TO THE ASSESSEE. 4. GROUND NO.4 IS ABOUT ESTIMATION OF NET PROFIT AT TH E RATE OF 5% OF THE TURNOVER OF RS.7,82,214/- UNDER SECTION 145 (3) R.W.S. 144 OF THE ACT.DURING THE ASSESSMENT PROCEEDINGS AO CALLED FOR INFORMATION UNDER SECTION 133 (6) OF THE ACT WERE F ROM VARIOUS PERSONS WITH WHOM THE ASSESSEE CLAIMED TO HAVE BUSINESS TRANSACTIONS DURING THE RE LEVANT ASSESSMENT YEAR,BUT THE ENQUIRY LETTERS ISSUED WERE EITHER RETURNED BACK UNSERVED BY THE PO STAL AUTHORITIES OR THE PARTIES DID NOT COMPLY WITH OR THERE WERE DIFFERENCES IN THE TRANSACTIONS IN COMPARISON TO ASSESSEES ACCOUNTS.THE SAME WAS CONVEYED TO THE ASSESSEE WITH A DIRECT TO FURNI SH CONFIRMATIONS OF CONCERNED PARTIES ALONG WITH DOCUMENTARY EVIDENCES.AS PER THE AO, THE ASSES SEE COULD FURNISH RELEVANT CONFIRMATIONS ONLY IN RESPECT OF FIVE PARTIES THAT TOO WITHOUT SU PPORTING DOCUMENTS.AO HELD THAT DUE TO NON- COMPLIANCE OF THE ASSESSEE,SUCH TRANSACTIONS HAD TO TREATED AS UNCONFIRMED. AO FURTHER OBSERVED THAT THE ASSESSEE HAD CLAIMED HUGE EXPENSES UNDER T HE HEADS ADVERTISING, COMMISSION,RENT AND CONSTRUCTION EXPENSE IN ITS PROFIT & LOSS ACCCUNT.A S PER AO,ASSESSEE DID NOT PRODUCE RELEVANT DETAILS AND SUPPORTING EVIDENCES EXCEPT FOR FURNISH ING THE NAMES OF THE PERSONS WITH REGARD TO COMMISSION PAID.HE HELD THAT ADDRESSES OF FIVE PERS ONS WERE NOT FURNISHED. THEREFORE, ON ACCOUNT OF THESE FACTS THE AO WAS OF THE OPINION THAT THE E XPENSES CLAIMED BY THE ASSESSEE REMAINED UNVERIFIED AND UNCONFIRMED.IN VIEW ABOVE DEFECTS AN D DISCREPANCIES,HE ASKED THE ASSESSEE TO SHOW CAUSE AS TO WHY HIS BOOKS OF ACCOUNT SHOULD NO T BE REJECTED BY INVOKING THE PROVISIONS OF SECTION 145 OF THE ACT AND FURTHER THE TRADING RESU LTS SHOULD NOT THE ESTIMATED BASED ON THE BEST OF THE JUDGMENT WITHIN THE MEANING OF THE PROVISIONS O F SECTION 144 OF THE ACT. ULTIMATELY, THE AO DULY TAKING INTO CONSIDERATION THE SUBMISSIONS OF T HE ASSESSEE,REJECTED THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE AND ESTIMATED HIS NET PR OFIT @5%OF THE TOTAL TURNOVER AND THE SAME WAS ADDED TO HIS TOTAL INCOME. 4.1. ASSESSEE PREFERRED AN APPEAL BEFORE THE FAA.AFTER C ONSIDERING HIS SUBMISSIONS AND THE ORDER OF THE AO HE HELD THAT THE ASSESSEE COULD NOT PRODU CE EVIDENCES REQUIRED FOR CLAIMING EXPENSES AS DEBITED IN HIS P&L ACCOUNT,THAT THE AO HAD MADE NEC ESSARY ENQUIRY BY ISSUING ENQUIRY LETTERS U/S.133(6) OF THE ACT TO THE PARTIES/PERSONS CONCER NED,THAT AS A RESULT THEREOF HE HAD FOUND A 4 ITA NO. 250/MUM/2011 SHRI JIVESH R. SACHDEV NUMBER OF DISCREPANCIES,THAT IN CERTAIN CASES THE E NQUIRY LETTERS ISSUED WERE RETURNED BACK UN - SERVED AS THE PARTIES/PERSONS WERE NOT AVAILABLE IN THE GIVEN ADDRESSES,THAT THE DISCREPANCIES NOTICED BY THE AO AS A RESULT OF THE ENQUIRY CONDUC TED WERE DULY BROUGHT TO THE NOTICE OF THE ASSESSEE,THAT HE DID NOT SUBMIT THE CONFIRMATIONS A ND THE RELATED DOCUMENTARY EVIDENCES,THAT THE PAYMENTS WERE MADE MOSTLY IN CASH,THAT THE SUBMISSI ONS OF THE ASSESSEE WERE VAGUE AND EVASIVE IN AS MUCH AS HE HAD FAILED TO FURNISH THE NECESSAR Y DETAILS AND DOCUMENTARY EVIDENCES IN SUPPORT OF HIS CLAIM OF EXPENDITURE INCURRED,THTA IT WAS A SETTLED POSITION OF LAW THAT THE ASSESSEE HAD TO PROVE NECESSARY EVIDENCES FOR CLAIM OF THE EXPENSES U/S.37(1) OF THE ACT.RELYING UPON THE MATTER OF THE HONBLE JURISDICTIONAL HIGH COURT DELIVERED IN THE CASE OF RAMANAND SAGAR REPORTED IN 256ITR134,HE HELD THAT ONUS FOR ALLOWABILITY OF A P ARTICULAR EXPENDITURE INCURRED FOR BUSINESS PURPOSE,AS REQUIRED U/S.37(1) OF THE ACT,WAS COMPLE TELY ON THE ASSESSEE,THAT THE ASSESSEE COULD NOT SATISFY THE BASIC REQUIREMENTS OF THE PROVISION S OF SECTION 37(1) OF THE ACT,THAT THE ASSESSEE COULD NOT RECONCILE THE DISCREPANCIES POINTED OUT B Y THE AO DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS,THAT THE FINDINGS OF THE AO WERE BASED ON THE ENQUIRIES CONDUCED, THAT THE FINDINGS GIVEN BY THE AO REMAINED UNEXPLAINED,THAT THE AO WA S FULLY JUSTIFIED TO HOLD THAT BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE DID NOT PROJECT CORRECT PROFITABILITY FOR THE RELEVANT ASSESSMENT YEAR,THAT THE AO HAD RIGHTLY REJECTED TH E BOOKS OF ACCOUNT BY INVOKING THE PROVISIONS OF SECTION 145(3)OF THE ACT AND ESTIMATING THE NET PROFIT AT THE RATE OF 5% OF HIS TOTAL TURNOVER. 4.2. BEFORE US,AR SUBMITTED THAT AO HAD NOT POINTED OUT ANY DEFECT IN THE METHOD OF ACCOUNTING ADOPTED BY THE ASSESSEE, THAT BOOKS OF ACCOUNTS WER E NOT REJECTED BY HIM, THE GP ADOPTED BY THE AO WAS WITHOUT ANY BASIS,THAT THE ASSESSEE WAS READ Y TO PRODUCE NECESSARY EVIDENCE IN THIS REGARD,THT MATTER SHOULD BE SENT BACK TO THE AO.DR SUBMITTED THAT ASSESSEE HAD NOT FURNISHED THE NECESSARY DETAILS BEFORE THE AO/FAA. 4.3. AFTER HEARING THE RIVAL SUBMISSIONS AND REQUEST MAD E BY THE AR,WE ARE REMITTING BACK THE ISSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION OF THE ISSUE.ASSESSEE IS DIRECTED TO FURNISH DETAIL S ABOUT THE EXPENDITURE INCURRED BY HIM DURING THE FR ESH PROCEEDINGS.GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 5. LAST GROUND OF APPEAL IS ABOUT ADDITION OF RS.1,30, 214/-U/S 40(A)(IA) OF THE ACT.DURING THE ASSESSMENT PROCEEDINGS,ON VERIFICATION OF THE TDS D ETAILS FILED BY THE ASSESSEE,AO FOUND THAT HE HAD DEPOSITED TDS AFTER THE PRESCRIBED TIME LIMIT P RESCRIBED UNDER THE PROVISIONS OF THE ACT.THEREFORE,THE CORRESPONDING EXPENSES CLAIMED W ERE HELD TO BE INADMISSIBLE AS PER THE PROVISIONS OF SECTION 40 (A) (IA) OF THE ACT.HE FUR THER HELD THAT THE ASSESSEE HAD NOT MADE ANY SUCH DISALLOWANCE IN HIS COMPUTATION OF TOTAL INCOME,THA T THE ASSESSEE HAD NOT FURNISHED THE DETAILS OF EXPENSES CLAIMED AND CREDITED OR PAID TO VARIOUS PE RSONS / PARTIES AND THE DETAILS OF TAX DEDUCTED AS PER THE VARIOUS PROVISIONS OF THE ACT,THAT MOST OF THE ASSIGNMENTS/CONTRACTS OF THE ASSESSEE WERE OVER BY THE END OF JANUARY,2005; THEREFORE, TH E EXPENSES INCURRED PERTAINED TO THE PERIOD PRIOR TO THE END OF JANUARY,2005,THAT THE EXPENSES INCURRED OR PAYMENTS MADE WERE IN THE NATURE OF CONTRACTUAL OBLIGATIONS FULFILLED AS A SUB-CONTR ACTCR.IN ABSENCE OF PROPER DETAILS FURNISHED BY THE ASSESSEE, THE AO MADE A DISALLOWANCE OF RS. 11, 30,500/- ON THE BASIS OF AMOUNT OF TDS PAID LATE. 5.1. IN THE APPELLATE PROCEEDINGS,FAA AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE,INCLUDING THE PAPER BOOK,HELD THAT THE ASSESSEE HAD NOT DEDUC TED TAX AT SOURCE IN RESPECT OF THE PAYMENTS MADE ON ACCOUNT OF EXHIBITION EXPENSES(RS.1,00,000 /-)AND PRINTING & STATIONERY(25,154/-),THAT HE DID NOT PAY THE DEDUCTED TAX ON TIME WITH THE CENTR AL GOVERNMENT.FAA ISSUED A SPECIFIC SHOW CAUSE NOTICE TO THE ASSESSEE ON 17.09.2010 IN THIS REGARD AND ASKED HIM AS TO WHY ADDITION AS PER THE PROVISIONS OF THE ACT SHOULD NOT BE MADE TO HIS INCOME.ASSESSEE FILED HIS REPLY ON 11.10. 2010. AFTER CONSIDERING THE SAME,HE HELD THAT THE L UMP SUM PAYMENT OF RS.1 LAKH MADE ON ACCOUNT OF EXHIBITION EXPENSES INCURRED TOWARDS HIS CONTRACTUAL OBLIGATIONS WAS LIABLE FOR THE DEDUCTION OF TAX U/S.194C OF THE ACT,THAT IN RESPE CT TO THE PRINTINGAND STATIONERY CHARGES,EXCEPT ON ACCOUNT OF ZEROX CHARGES OF RS.25,154/- PAID TO ROSHNI STATIONERY AND ZEROX,NO OTHER 5 ITA NO. 250/MUM/2011 SHRI JIVESH R. SACHDEV PAYMENTS MADE WERE LIABLE FOR TDS U/S.194C OF THE A CT,THAT THE ASSESSEE WAS REQUIRED TO DEDUCT TDS U/S.194C ON ACCOUNT OF STATIONERY AND ZEROX CHA RGES PAID, THAT THE DEDUCTION CLAIMED BY THE ASSESSEE OF RS.L, 25,L54/-WAS TO DISALLOWED AS PER THE PROVISIONS OF SECTION 40(A)(IA) R.W.S.194C OF THE ACT. 5.2. BEFORE US,AR SUBMITTED THAT PROVISIONS OF SECTION 4 0(A)(I) OF THE ACT WERE NOT APPLICABLE IN THE CASE OF THE ASSESSEE,THAT DOCUMENTS PRODUCED BY THE ASSESSEE WERE NOT CONSIDERED BY THE AO, THAT THE ASSESSEE WAS READY TO PRODUCE ALL THE NECE SSARY EVIDENCE REQUIRED BY THE AO, IF THE MATTER WAS RESTORED BACK TO THE FILE OF THE AO.DR STATED T HAT HE HAD OBJECTION, IF THE MATTER WAS SENT BACK TO THE AO FOR FRESH ADJUDICATION. 5.3. CONSIDERING THE SUBMISSIONS OF BOTH THE REPRESENTAT IVES,IN THE INTEREST OF JUSTICE,WE ARE RESTORING BACK THE MATTER TO THE FILE OF THE AO FOR CONSIDERING ALL THE NECESSARY EVIDENCES BEFORE TAKING FINAL DECISION.ASSESSEE IS DIRECTED TO PRODU CE THE EVIDENCES,THAT HE WANTS TO RELY UPON. GROUND NO.4 IS ALLOWED,IN PART,IN FAVOUR OF THE ASS ESSEE. AS A RESULT,APPEAL FILED BY THE ASSESSEE STANDS PAR TLY ALLOWED. 1)2 '() + 0 3 4 + ) 56. ORDER PRONOUNC ED IN THE OPEN COURT ON 9 TH APRIL,2014 . 0 + -.# 7 8' 9 &6 ,201 4 . + / 9 SD/- SD/- ( .. / I.P. BANSAL) ( ! ! ! ! / RAJENDRA) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, 8' /DATE: 09.04 . 2014. SK 0 0 0 0 + ++ + &): &): &): &): ; :#) ; :#) ; :#) ; :#) / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / $% 2. RESPONDENT / &'$% 3. THE CONCERNED CIT(A)/ < = , 4. THE CONCERNED CIT / < = 5. DR I BENCH, ITAT, MUMBAI / :>/ &)' , . . . 6. GUARD FILE/ / 1 ':) ':) ':) ':) &) &)&) &) //TRUE COPY// 0' / BY ORDER, ? / 5 DY./ASST. REGISTRAR , /ITAT, MUMBAI