ASST CIT 24(3), MUMBAI V. PRADEEP G. SINHA, MUMBAI

ITA 2593/MUM/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0273 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2010-2011
• Appeal Filed On: 06-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SANJAY R PARIKHLD
• Keywords: Business income; Salary income
• Section: 143(3)

Judgement Text

ITA NO.2302 &2593/MUM/2015 PRADEEP G SINHA ASSESSMENT YEAR 2010-11 IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI , , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER I.T.A. NO.2302 &/MUM/2015 ( ASSESSMENT YEAR:2010-11) PRADEEP G SINHA 408 RAHEJA PLAZA, OFF ANDHERI LINK ROAD, ANDHERI (W ) MUMBAI-400 053 VS. ASST.CIT 20(2) MUMBAI 400 020 !' # PAN/GIR NO. AAPPS4576E ( '$ APPELLANT ) : ( %&'$ RESPONDENT ) & I.T.A. NO.2593 &/MUM/2015 ( ASSESSMENT YEAR:2010-11) ASST.CIT 24(3) ROOM NO. 613, 6 TH FLOOR, PIRAMAL CHAMBERS, LALBUAG, PAREL MUMBAI 400 012 VS. PRADEEP G SINHA 408 RAHEJA PLAZA, OFF ANDHERI LINK ROAD, ANDHERI (W ) MUMBAI-400 053 !' # PAN/GIR NO. AAPPS4576E ( '$ APPELLANT ) : ( %&'$ RESPONDENT ) ASSESSEE BY : SHRI SANJAY R. PARIKH, LD. AR REVENUE BY : SHRI M.C. OMI NINGSHEN, LD. DR 2 ITA NO.2302 &2593/MUM/2015 PRADEEP G SINHA ASSESSMENT YEAR 2010-11 ' ( DATE OF HEARING : 15/06/2017 )*+ ( / DATE OF PRONOUNCEMENT : 09/08/2017 O R D E R PER SANJAY GARG (JUDICIAL MEMBER) 1 . THESE ARE THE CROSS APPEALS ONE BY THE ASSESSE AND THE OTHER BY THE REVENUE ARISING OUT THE ORDER DATED 12/02/2015 OF L D. COMMISSIONER OF INCOME- TAX (APPEALS)-36 [HEREINAFTER REFERRED TO AS CIT(A) ]. 2. FIRST WE TAKE UP THE REVENUE APPEALS. GROUND NO.1: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE MADE ON ACCOUNT OF COMMISSION OF RS. 6,53,683/- PAID TO PRADEEP G SINHA HUF CONSIDERING THE ASSESSEES SUBMISSIONS. THE COMMISSION PAID TO THE HUF IS NOT ALLOWABLE AS THE ASSESSE FAILED TO JUSTIFY THE PAYMENTS. GROUND NO.1 TAKEN BY THE REVENUE IN ITS APPEAL IS R EGARDING THE ACTION OF THE CIT(A) IN DELETING THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF COMMISSION PAYMENT OF RS.6,53,683/- BY THE ASSES SEE TO HIS OWN HUF. 3. THE ASSESSE IS ENGAGED IN THE BUSINESS OF MAINTAINING OF TEXTILE MACHINERY AND ACTING AS AGENT FOR JAPANESE, GERMAN AND AMERICAN TEXTILE MACHINERY MANUFACTURERS. DURING THE ASSESSMENT PROC EEDINGS, THE 3 ITA NO.2302 &2593/MUM/2015 PRADEEP G SINHA ASSESSMENT YEAR 2010-11 ASSESSING OFFICER (IN SHORT AO) OBSERVED THAT THE PROPRIETARY CONCERN OF THE ASSESSE HAS PAID COMMISSION, TO PRADEEP SINHA ( HUF). THE COMMISSION WAS PAID OUT OF COMMISSION AMOUNT RECEIV ED FROM TMT MACHINERY JAPAN. THE AO ASKED THE ASSESSE ABOUT THE JUSTIFICATION OF THE COMMISSION SO PAID BY THE PROPRIETORSHIP CONCERN O F THE ASSESSE TO THE HUF, OF WHICH THE ASSESSE HIMSELF WAS THE KARTA. THE ASSESSE EXPLAINED THAT THE HUF HAS BEEN ASSISTING IN RENDER ING OF SERVICES TO TMT MACHINERY JAPAN. TWO SONS OF THE ASSESSE BEING MEMB ERS OF THE HUF ALSO HAD HELPED IN THE BUSINESS OF THE ASSESSE. CONSIDER ING THE VARIOUS SERVICES AVAILED BY THE ASSESSE FROM ITS HUF, THE ASSESSE PAID A NOMINAL COMMISSION OF 1.70 PER CENT OF THE TOTAL COMMISSION RECEIVED FROM TMT MACHINERY JAPAN. THE AO, HOWEVER, DID NOT AGREE WI TH THE ABOVE SUBMISSIONS OF THE ASSESSE AND DISALLOWED THE COM MISSION PAYMENT SO PAID BY THE ASSESSE TO THE HUF. BEING AGGRIEVED B Y THE ABOVE ORDER OF THE AO, ASSESSEE CARRIED OVER THE MATTER TO THE CI T(A). THE LD. CIT(A) CONSIDERING THE SUBMISSIONS OF THE A SSESSE OBSERVED THAT IT WAS NOT ONLY DURING THE CURRENT YEAR, RAT HER THE ASSESSE HAS BEEN MAKING PAYMENTS OF COMMISSION TO HUF IN EARLIER YE ARS AS WELL . THAT THE HUF COMPRISED OF THE ASSESSE, HIS WIFE MS.SANJITHA SINHA AND TWO SONS. THE TWO SONS OF THE ASSESSEE HOLD DEGREES IN BUSINE SS ADMINISTRATION AND ENGINEERING RESPECTIVELY. THE HUF DURING THE YEAR U NDER CONSIDERATION HAD ALSO EARNED COMMISSION INCOME FROM OTHER PARTIES AL SO. THEREFORE THE 4 ITA NO.2302 &2593/MUM/2015 PRADEEP G SINHA ASSESSMENT YEAR 2010-11 RENDERING OF SERVICES BY THE HUF NOT ONLY TO THE AS SESSE BUT TO THE THIRD PARTIES WAS NOT IN DOUBT. EVEN THE HUF WAS THE OWNE R OF PREMISES ADMEASURING ABOUT 2500 SQ.F WHICH WAS USED BY THE ASSESEES PROPRIETORSHIP CONCERN FOR BUSINESS PURPOSES . THE ASSESSE DURING THE YEAR HAD RECEIVED RENT/COMPENSATION FOR USE OF THE PREMISES AND FACILITIES BELONGING TO HUF FROM FOREIGN COMPANIES BUT THE SAI D AMOUNT HAS BEEN DULY OFFERED TO TAX IN THE HANDS OF THE ASSESSE. NO RENTAL INCOME HAS BEEN FURTHER REMITTED BY THE ASSESS TO THE HUF. THE LD. CIT(A) CONSIDERING THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE, DELETE D THE DISALLOWANCE MADE BY THE AO IN RESPECT OF THE COMMISSION PAID BY THE ASSESSEE TO THE HUF. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF T HE PARITIES HAVE ALSO GONE THROUGH THE RECORD. WE FIND THAT THE ASSESSE H AS DECLARED TOTAL INCOME OF RS.4,68,44,690/- WHEREAS, THE COMMISSION AMOUNT PAID TO THE HUF IS ONLY RS. 6,53,683/-. IT HAS NOT BEEN DENIED BY THE AO THAT THE HUF, APART FROM OFFERING SERVICES TO THE PROPRIET ORSHIP CONCERN OF THE ASSESSE, IS OFFERING SIMILAR TYPE OF SERVICES TO T HIRD PARTIES ALSO. THE HUF HAS ALSO OFFERED FOR TAXATION ITS BUSINESS INCOME. THE TWO SONS OF THE ASSESSE WHO SUITABLY QUALIFIED, BEING THE MEMBERS OF THE HUF, HAVE BEEN RENDERING THE SERVICES TO THE ASSESSE AS WELL AS TO THE THIRD PARTIES ON BEHALF OF HUF. NO SEPARATE EXPENDITURE FOR SALARY HAS BEEN BOOKED BY THE ASSESSEE WITH REGARD TO THE SERVICES DONE BY HIS TWO SONS. EVEN, NO EXPENDITURE/RENT HAS BEEN BOOKED BY THE ASSESSE IN RESPECT OF THE 5 ITA NO.2302 &2593/MUM/2015 PRADEEP G SINHA ASSESSMENT YEAR 2010-11 PREMISES USED BY THE ASSESSEES PROPRIETORSHIP CON CERN WHEREAS, THE ASSESSE HAS SHOWN RENTAL INCOME IN HIS RETURN IN RE SPECT OF SAID PREMISES RECEIVED FROM THIRD PARTIES. THEREFORE WE ARE N OT INCLINED TO ACCEPT THE CONTENTION OF THE REVENUE THAT IT IS A COLORABLE DEVICE OF THE ASSESSEE TO REDUCE THE EXPENDITURE. WE THEREFORE DO NOT FIND A NY INFIRMITY IN THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND THE SAME IS UP HELD. 5. GROUND NO.2 : ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE MADE ON ACCOUNT OF SALARY OF RS. 16,90,000/- PAID TO MS. SANJITHA SINHA SINCE THE ASSESSE FAILED TO JUSTIFY THE BASIS FOR PAYMENT OF SUCH A HUGE SALARY TO HIS WIFE. THE ASESSEE HAS ALSO NOT P ROVIDED ANY SUPPORTING DOCUMENTARY EVIDENCES LIKE APPOINTMENT. IN GROUND NO. 2, THE REVENUE HAS AGITATED THE ACTION OF THE CIT(A) IN DELETING DISALLOWANCE MADE AN ACCOUNT OF SALARY P AYMENT OF RS. 16,90,000/- PAID TO MS. SANJITHA SINHA, WIFE OF TH E ASSESSE. THE AO DISALLOWED THE SALARY PAID TO MS, SANJIT HA SINHA OBSERVING THAT SHE WAS ALSO AN EMPLOYEE/DIRECTOR OF M/S TSUDA TECH INDIA PVT.LTD. FURTHER THAT NO LETTER OF APPOINTMENT, MUSTROLL OF EMPLOYEES, PROFESSIONAL TAX DETAILS ETC. WERE FURNISHED. IN APPEAL BEFORE THE CIT(A), THE ASSESSEE SUBMI TTED THAT MS. SANJITHA SINHA HAD BEEN WORKING AS GM OF THE ASSESSE PROPRIE TORSHIP CONCERN FOR A NUMBER OF YEARS AND SHE HAD BEEN PERFORMING NECESSA RY FUNCTIONS WHICH WERE DULY EVIDENCED BY RECORD OF EMAILS ETC. WITH THE BANK MANAGERS AS ALSO WITH THE REPRESENTATIVES OF THE CONCERNED PART IES WITH WHOM THE ASSESSES HAS DONE BUSINESS DEALINGS. THAT MS. SANJI THA SINHA WAS A 6 ITA NO.2302 &2593/MUM/2015 PRADEEP G SINHA ASSESSMENT YEAR 2010-11 GRADUATE FROM PATNA COLLEGE AND ALSO HOLDING DEGREE IN MASS COMMUNICATION FROM IMC NEW DELHI. IT WAS FURTHER SU BMITTED THAT SHE BEING IN CHARGE OF OVERALL MANAGEMENT OF BUSINESS WAS AU THORIZED TO SIGN SALARY CHEQUES, MAKE CORRESPONDING WITH FOREIGN PARTIES, S IGN INVOICES, CORRESPOND WITH THE TAX CONSULTANTS ETC. THE LD. CIT(A) CONSIDERING THE ABOVE SUBMISSION, O BSERVED THAT MS. SANJITHA SINHA HAS BEEN DRAWING SALARY FROM THE ASS ESSES PROPRIETORSHIP CONCERN FOR PAST MANY YEARS AND IT WAS EVIDENT THA T SHE WAS IN CHARGE FOR REGULAR ADMINISTRATIVE MATTERS OF THE ASSESSEES PR OPRIETORSHIP CONCERN EVEN IN THE EARLIER ASSESSMENT YEARS INCLUDING AY 2 007-08 & 09-10, FOR WHICH YEARS, THE ASSESSMENT IN THE CASE OF THE AS SESSEE WAS DONE UNDER SCRUTINY ASSESSMENT PROCEEDINGS U/S 143(3) OF THE I .T.ACT BUT NO SUCH DISALLOWANCE ON ACCOUNT OF SALARY PAID TO MS. SANJI THA SINHA HAS EVER BEEN MADE. THEREFORE CONSIDERING THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) DELETED THE DISALLOWANCE SO MADE BY THE AO ON THIS ISSUE; THE REVENUE THUS HAS COME IN APPEAL BEF ORE US. 6. THE LD. AR OF THE ASSESSE HAS BROUGHT OU R ATTENTION TO THE COPY OF THE INCOME TAX RETURN/ COMPUTATION OF INCOME OF MS. SANJITHA SINHA. IT IS SEEN FROM THE STATEMENT OF INCOME THAT MS. SANJITHA SINHA HAS SHOWN SALARY INCOME FROM M/S TSUDATECH INDIA PRIVATE LIMI TED OF RS. 7,20,000/- AND FROM ASSESSEES PROPRIETORSHIP CONCERN AT RS. 1 6,90,000/-. APART FROM THAT SHE HAS ALSO SHOWN INCOME FROM OTHER SOURCES A T RS. 1,32,496/- . IT 7 ITA NO.2302 &2593/MUM/2015 PRADEEP G SINHA ASSESSMENT YEAR 2010-11 COMES OUT THAT SHE IS ALREADY TAXED AT THE MAXIMUM SLAB OF INCOME TAX, THEREFORE THERE SEEMS NO ATTEMPT ON THE PART OF THE PAYEE AND RECIPIENT TO DIVERT INCOME FROM THE FORMER TO THE LATER AVOID TA XES .THE LD. CIT(A) HAS ALREADY DISCUSSED IN DETAIL ABOUT THE SERVICES AND DAY TO DAY ADMINISTRATION DONE BY MS. SANJITHA SINHA IN RELATION TO THE BUSIN ESS ACTIVITIES OF ASSESSEES PROPRIETORSHIP CONCERN, THEREFORE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) ON THIS ISSUE. GROUND NO.3 TO 9: GROUND NO.3 : ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE MADE ON ACCOUNT OF STA FF WELFARE EXPENSES OF RS. 4,18,536/- AT 15% INSTEAD OF THE 57% DISALLOWED BY AO. THE AO HAS CORRECTLY MADE THE DISALLOWANCE ON THE BASIS THAT THERE WERE NO BILLS TO SUPPORT THESE EXPENSES AND THE ASSESSE HAD PRODUCED ONLY SOME SELF MADE VOUCHERS T O CORROBORATE THE EXPENSES. GROUND NO.4: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE MADE ON A CCOUNT OF SALES PROMOTION EXPENSES OF RS. 6,22,532/- AT 15% INSTEAD OF THE 65.66% DISA LLOWED BY AO. THE AO HAS CORRECTLY MADE THE DISALLOWANCE ON THE BASIS THAT THERE WERE NO BILLS TO SUPPORT THESE EXPENSES AND THE ASSESSE HAD PRODUCED ONLY SOME SELF-MADE VO UCHERS TO CORROBORATE THE EXPENSES. GROUND NO.5 : ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE MADE ON A CCOUNT OF DIESEL AND PETROL EXPENSES OF RS. 14,59719/- AT 15% INSTEAD OF THE 65.66% DISA LLOWED BY AO. THE AO HAS CORRECTLY MADE THE DISALLOWANCE ON THE BASIS THAT T HESE EXPENSES WERE SUBSTANTIATED BY SELF-MADE VOUCHERS ONLY AND ALSO THE SAME EXPLAN ATION HAS BEEN OFFERED FOR CAR HIRE CHARGES AND CAR MAINTENANCE EXPENSES. GROUND NO.6: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE MADE ON A CCOUNT OF CAR HIRE EXPENSES OF RS. 1,01,977/- AT 15% INSTEAD OF THE 50% DISALLOWED BY AO. THE AO HAS CORRECTLY MADE THE DISALLOWANCE ON THE BASIS THAT THERE WERE NO BILLS TO SUPPORT THESE EXPENSES AND THE ASSESSE HAD PRODUCED ONLY SOME SELF-MADE VOUCHERS T O CORROBORATE THE EXPENSES. GROUND NO.7: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE MADE ON A CCOUNT OF CAR MAINTENANCE EXPENSES OF RS. 1,64486/- AT 15% INSTEAD OF THE 40% DISALLOW ED BY AO. THE AO HAS CORRECTLY 8 ITA NO.2302 &2593/MUM/2015 PRADEEP G SINHA ASSESSMENT YEAR 2010-11 MADE THE DISALLOWANCE ON THE BASIS THAT THERE WERE NO BILLS TO SUPPORT THESE EXPENSES AND THE ASSESSE HAD PRODUCED ONLY SOME SELF-MADE VO UCHERS TO CORROBORATE THE EXPENSES . GROUND NO.8 : ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE MADE ON A CCOUNT OF OFFICE EXPENSES OF RS. 77,758/- AT 15% INSTEAD OF THE 50% DISALLOWED BY AO . THE AO HAS CORRECTLY MADE THE DISALLOWANCE ON THE BASIS THAT THERE WERE NO BILLS TO SUPPORT THESE EXPENSES AND THE ASSESSE HAD PRODUCED ONLY SOME SELF-MADE VOUCHERS T O CORROBORATE THE EXPENSES. GROUND NO.9 : ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE MADE ON A CCOUNT OF TRAVEL EXPENSES OF RS. 38,18,728/- AT 15% INSTEAD OF THE 50% DISALLOWED B Y AO. THE AO HAS CORRECTLY MADE THE DISALLOWANCE ON THE BASIS THAT THESE EXPENSES W ERE SUBSTANTIATED BY SELF-MADE VOUCHERS ONLY AND ALSO THE ASSESSE WAS NOT ABLE TO PRODUCE THE OTHER NECESSARY EVIDENCES LIKE THE TICKETS, THE PURPOSE OF VISIT, B USINESS EXIGENCY OF THE VISITS. SO FAR AS GROUNDS NO.3 TO 9 ARE CONCERNED, THEY A RE IN RELATION TO VARIOUS DISALLOWANCES AS MENTION IN THE RELEVANT GROUNDS OF APPEAL. THE SAME WERE MADE BY THE AO ONLY ON ESTIMATE BASIS THE LD. CIT(A) CONSIDERING THE DISALLOWANCE IN RELATION TO THE EAC H OF THE ITEM HAS RESTRICTED THE DISALLOWANCE TO 15 PER CENT OF THE E XPENDITURE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSION AND HAVE ALSO GONE THROUGH THE IMPUGNED ORDER OF THE CIT(A). IN RELATION TO S TAFF WELFARE EXPENSES, THE LD. CIT(A) HAS OBSERVED THAT THE SAME LOOKED TO BE REASONABLE EVEN MOST OF THE ENTRIES WHICH HAD BEEN IDENTIFIED BY TH E AO ON THE BASIS OF SELF- MADE VOUCHERS RELATE TO EXPENSES INCURRED ON FOOD. HE FURTHER FOUND THAT THE SELF-MADE VOUCHERS CONTAINED PARTICULARS OF THE PERSONS CLAIMING THE EXPENSES ALONG WITH NAME OF THE RESTAURANT /HOTEL FROM WHICH FOOD HAS BEEN ORDERED. CONSIDERING THE OVERALL FACTS AND CIR CUMSTANCES, THE LD. 9 ITA NO.2302 &2593/MUM/2015 PRADEEP G SINHA ASSESSMENT YEAR 2010-11 CIT(A) RESTRICTED THE DISALLOWANCE TO 15% AS AGAINS T THE DISALLOWANCE OF 57% MADE BY THE AO, OBSERVING THAT EXISTENCE OF SOM E PERCENTAGE OF PERSONAL EXPENSE COULD NOT BE RULED OUT. SIMILARLY IN RESPECT OF SALES PROMOTION EXPENSES, THE LD. CIT(A) HAS GIVEN HIS FI NDINGS IN PARA 5.5.1 OF THE ORDER AND HAS OBSERVED THAT THE NATURE OF THE B USINESS OF ASSESSEE BEING THAT OF COMMISSION AGENT, THE REQUIREMENT OF KEEPING THE PRINCIPALS, CLIENTS AND THEIR REPRESENTATIVES HAPPY CANNOT BE D ENIED. HOWEVER HE RESTRICTED THE DISALLOWANCE TO 15 % OF THE EXPENSE S CLAIMED UNDER THIS HEAD AS AGAINST 65.66 PER CENT MADE BY THE AO. THE LD. CIT(A) IN SIMILAR MANNER CONSIDERED THE EXPENSES ON ACCOUNT OF DIESEL AND PETREL AND RESTRICTED THE SAME TO 15% OF THE TOTAL EXPENDITURE . HE ALSO RESTRICTED THE EXPENDITURE IN RELATION TO CAR HIRE CHARGES, CAR M AINTENANCE CHARGES, CONVEYANCE EXPENSES, OFFICE EXPENSES, TRAVEL EXPENS ES TO THE EXTENT OF 15% CONSIDERING THE NATURE OF THE EXPENSES, THE NAT URE OF BUSINESS OF THE ASSESSEE AND THE RELEVANCE OF THE EXPENDITURE TO THE BUSINESS ACTIVITY OF THE ASSESSEE. HE, HOWEVER, UPHELD THE DISALLOWANCE IN RELATION TO MOBILE AND TELEPHONE EXPENSES AND CAR INSURANCE EXPENSE MA DE BY THE AO TO THE EXTENT OF 10 % CONSIDERING THE SAME AS REASONABLE. NOW THE DEPARTMENT, BEFORE US, HAS COME IN APPEAL AGITATING THE ACTION OF LD. CIT(A) IN RESTRICTING THE ABOVE DISA LLOWANCES UP TO THE EXTENT OF 15 % AS AGAINST DISALLOWED BY THE AO FROM 40 % T O 57% AS DISCUSSED ABOVE. THE AO HAD NOT DENIED INCURRING OF THE EXPEN SES BY THE ASSESSEE 10 ITA NO.2302 &2593/MUM/2015 PRADEEP G SINHA ASSESSMENT YEAR 2010-11 IN RELATION TO ABOVE STATED ITEMS. THE AO HAS MADE DISALLOWANCE ONLY ON ESTIMATION BASIS FINDING CERTAIN DISCREPANCIES IN T HE BILLS AND VOUCHERS AND OBSERVING THAT PERSONAL ELEMENT CANNOT BE RULED OUT . HOWEVER LD. CIT(A) CONSIDERING THE OVERALL FACTS AND CIRCUMSTANCES O F THE CASE HAS RESTRICTED THE EXPENSES UP TO EXTENT OF 15 % WHICH SEEMS TO B E QUITE REASONABLE. WE, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORD ER OF THE CIT(A) IN RESTRICTING THE SAID DISALLOWANCES TO 15 % AND THE SAME IS ACCORDINGLY UPHELD. ITA.NO. 2302/MUM/2015- ASSESSEES APPEAL: NOW COMING TO THE APPEAL OF THE ASSESSEE, THE ASSESSEE IN HIS APPEAL HAS AGITATED THE ACTION OF THE CIT(A) IN RE STRICTING THE DISALLOWANCE UP TO THE EXTENT OF 15 % AND ALSO THE UPHOLDING OF THE DISALLOWANCE MADE BY THE AO AT THE RATE OF 10% IN RELATION TO TELEPH ONE EXPENSES AND CAR INSURANCE EXPENSES. AS DISCUSSED ABOVE, THE LD. CIT (A) HAS CONSIDERED THE JUSTIFICATION OF THE EXPENDITURE IN RELATION TO EACH OF THE ITEMS AND CONSIDERING THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE HAS RESTRICTED THE DISALLOWANCES UP TO THE EXTENT OF 15 % IN RELA TION TO VARIOUS ITEMS AND UPHELD THE DISALLOWANCE AT THE RATE OF 10% AS EXPEN SES IN RELATION TO TELEPHONE EXPENSES AND CAR INSURANCE EXPENSES. THE LD. AR THOUGH HAS PLEADED THAT THERE WAS CERTAIN REIMBURSEMENT OF EXP ENSES WHICH THE ASSESSEE HAS OFFERED AS ITS INCOME THEREFORE AT LEA ST SAME SHOULD BE REDUCED FROM DISALLOWANCE MADE BY THE CIT(A). WE AR E NOT INCLINED TO 11 ITA NO.2302 &2593/MUM/2015 PRADEEP G SINHA ASSESSMENT YEAR 2010-11 ACCEPT THE ABOVE CONTENTION OF THE LD. AR. THE DISA LLOWANCE AT THE RATE OF 15% HAS BEEN DONE BY THE CIT(A) AFTER CONSIDERING THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE AND IT WILL ALSO TAKE CAR E OF THE REIMBURSEMENTS. THE ASSESSEE HAS ALREADY BEEN GIVEN SUBSTANTIAL REL IEF BY THE LD. CIT(A) BY RESTRICTING THE DISALLOWANCE UP TO THE EXTENT OF 15 % EXPENSES AS AGAINST MADE BY THE AO OF AN AVERAGE OF 50 %. IN VIEW OF TH E ABOVE, ORDER OF THE CIT(A) IS UPHELD. 5. IN THE RESULT BOTH THE APPEALS I.E, ONE BY THE A SSESSEE AND THE OTHER BY THE REVENUE ARE HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09 TH AUGUST, 2017. SD/- S D/- (MANOJ KUMAR AGGARWAL) (SANJAY GARG) / ACCOUNTANT MEMBER / JUDICIAL MEMBER ,' MUMBAI; DATED : 09.08.2017 SR.PS:- THIRUMALESH 12 ITA NO.2302 &2593/MUM/2015 PRADEEP G SINHA ASSESSMENT YEAR 2010-11 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 1 ' GUARD FILE ! / BY ORDER, ' !# $ (DY./ASSTT. REGISTRAR) ,' / ITAT, MUMBAI