DCIT 9(2), MUMBAI V. NESCO LTD, MUMBAI

ITA 2789/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3528 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 23-04-2014
• Court: TRIBUNAL
• Department Lawyers: BHARTI SINGH
• Keywords: Business income
• Section: 143(3); 14A

Judgement Text

, , B, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.2789/MUM/2014 ASSESSMENT YEAR: 2010-11 DCI T - 9(2), ROOM NO.218, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. RD, MUMBAI-400020 / VS. NESCO ESTATE, W. E. HIGHWAY, GOREGAON (E), MUMBAI-400063 (REVENUE ) (RESPONDENT) P.A. NO. AAACN1222E CO NO. 162/MUM/2015 (ARISING OUT OF ITA NO.2789/MUM/2014) ASSESSMENT YEAR 2010-11 NESCO ESTATE, W. E. HIGHWAY, GOREGAON (E), MUMBAI-400063 / VS. DCIT - 9(2), ROOM NO.218, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. RD, MUMBAI-400020 (ASSESSEE ) (REVENUE) P.A . NO. AAACN1222E / ASSESSEE BY NONE (AR) / REVENUE BY MS. BHARTI SINGH ( CIT - DR) / DATE OF HEARING : 16/05/2016 / DATE OF ORDER: 25/05/2016 NESCO LTD. 2 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE HAVE BEEN FILED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), MUMBAI-20 {(I N SHORT CIT(A)}, DATED 11.02.2014 PASSED AGAINST ASSESSME NT ORDER U/S 143(3) DATED 20.03.2013 FOR THE ASSESSMENT YEAR 2010- 11. 2. DURING THE COURSE OF HEARING, NONE APPEARED ON BEHA LF OF THE ASSESSEE AND MS. BHARTI SINGH, DEPARTMENTAL REPRESENTATIVE (CIT-DR) APPEARED ON BEHALF OF THE R EVENUE. WE SHALL FIRST TAKE UP REVENUES APPEAL IN ITA NO.2789/MUM/2014 FOR ASSESSMENT YEAR 2010-11FILED O N THE FOLLOWING GROUNDS: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER U/S 14A OF T HE ACT AMOUNTING TO RS.1,06,41,261/- WITHOUT APPRECIAT ING THE FACT THAT THE ASSESSING OFFICER HAD MADE DISALLOWANCE U/S14A AS PER PROVISIONS OF RULE 8D OF I.T. RULES 1962 ? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) WAS RIGHT IN DELET ING THE ADDITION OF RS.19,22,861/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF 'PROVISIONS OF EXPENDITURE' WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD NOT PAID THE SAME IN THE SUBSEQUENT YEARS AND HAS WRITTEN BACK THE SAME ONLY DUE TO SCRUTINY ASSESSMENTS? NESCO LTD. 3 3. GROUND NO.1: THIS GROUND DEALS WITH THE GRIEVANCE OF THE REVENUE AGAINST THE DISALLOWANCE MADE BY THE AO U/S 14A WHICH WAS DELETED BY THE LD. CIT(A). THE DISALLOWAN CE WAS MADE BY THE AO IN THE ASSESSMENT ORDER ON THE GROUN D THAT ASSESSEE HAD RECEIVED DIVIDEND INCOME FOR RS.5,65,6 0,705/- AND THE ASSESSEE HAD MADE VOLUNTARY DISALLOWANCE IN ITS RETURN FOR RS.63,03,383/- COMPRISING OF DIRECT EXPE NSES NAMELY SECURITY TRANSACTIONS TAX, DEMAT CHARGES AND 0.5% OF AVERAGE INVESTMENTS, BUT NO DISALLOWANCE WAS VOLUNT ARY MADE BY THE ASSESSEE ON ACCOUNT OF INTEREST. UNDER THESE CIRCUMSTANCES, IT WAS NOTED BY THE AO THAT THE ASSE SSEE HAS DEBITED INTEREST EXPENDITURE FOR AN AMOUNT OF RS.1,28,05,216/- IN ITS BOOKS OF ACCOUNTS AND ACCOR DINGLY AO MADE FURTHER DISALLOWANCE U/S 14A ON ACCOUNT OF INT EREST FOR THE PROPORTIONATE AMOUNT OF RS.1,06,41,261/-. 3.1. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFO RE THE LD. CIT(A) AND SUBMITTED THAT NO DISALLOWANCE ON AC COUNT OF INTEREST WAS CALLED FOR DOE TO THE REASON THAT ASSE SSEES OWN FUNDS ARE FAR MORE THAN THE AMOUNT OF INVESTMENT I N TAX-FREE SECURITIES. THE ASSESSEE SUBMITTED COMPLETE FACTS I N THIS REGARD BEFORE THE LD. CIT(A). THE LD. CIT(A) CONSID ERED ALL THE FACTS AND FOUND THAT ASSESSEE HAD SUFFICIENT FUNDS TO MAKE INVESTMENTS IN TAX-FREE SECURITIES. THE DETAILED FI NDINGS GIVEN BY THE LD. CIT(A) ARE REPRODUCED HEREUNDER: I HAVE CONSIDERED THE FINDING OF THE ASSESSING OFF ICER, RIVAL SUBMISSION OF THE APPELLANT AND HAVE ALSO PER USED THE EVIDENCES ON RECORD, CAREFULLY. I FIND THAT LD. ASSESSING OFFICER HAS DISALLOWED EXPENDITURE OF RS.1,06,41,261/- (GROSS AMOUNT RS.1,69,44,644/-) NESCO LTD. 4 WITHOUT ANY VALID REASON OR ON THE BASIS OF FACTS. LD. ASSESSING OFFICER HAS WRONGLY CONSIDERED AN INTEREST EXPENDITURE OF RS.1,28,05,216/- FOR DISALLOWANCE OF CORRESPONDING EXPENDITURE AS PER RULE 8D WHEREAS THERE IS NO SUCH ELEMENT OF INTEREST EXPENDITURE RELATING TO EARNING OF DIVIDEN D OF RS.5,65,60,705/-. IT IS VERY OBVIOUS THAT LD. ASSESSING OFFICER HAS NOT PROPERLY APPRECIATED THE FULL FACTS OF THE CASE. IN PARA 4.5 LD. ASSESSING OFFICER HAS GIVEN DETAILS OF NEGATIVE BALANCE BETWEEN 28.04.2009 TO 20.05.2009 WHICH IS FOUND TO BE VERY VAGUE RATHER CONTRADICTS THE FINDING OF THE ASSESSING OFFICER. AS CAN BE SEEN THAT THERE IS TOTAL INVESTMENT REFLECTED BETWEEN THIS PERIOD IS OF RS.7,57,05,373/-. WHEREAS AVAILABILITY OF FUND IS OF RS.10,81,09,709/- WHICH MEANS, AS COMPARE TO INVESTMENT THERE IS MUCH MORE INTEREST FREE DEPOSITS. IT APPEARS FROM THE ASSESSMENT ORDER THAT LD. ASSESSING OFFICER HAS IGNORED THE FACT OF AVAILABILITY OF TOTAL INTEREST FREE FUNDS AND INVESTMENT THEREOF. 5.4 DURING THE COURSE OF APPELLATE PROCEEDINGS, LD. A.R. HAS DEMONSTRATED WITH THE HELP OF THE EVIDENCES SUBMITTED TO THE ASSESSING OFFICER BY LETTER DATED 04.03.2013 THAT TOTAL INVESTMENT DURING THE YEAR IS OF RS.1,14,93,00,000/- WHEREAS TOTAL REDEMPTION OF MUTUAL FUND, OPENING BALANCE AND DIVIDEND IS OF RS.1,17,99,27,701/-. THUS, AS COMPARE TO OVERALL INVESTMENT, APPELLANT HAS GOT MORE INTEREST FREE FUND. THE DETAILS OF SUCH AVAILABILITY OF FUNDS AND INVESTMENT THEREOF HAS BEEN SHOWN AT PAGE NO.17. 18 AND 19 OF THE PAPER BOOK. IT IS PERTINENT TO MENTION THAT APPELLANT HAS BEEN SUCCESSFUL IN DEMONSTRATING THE EVIDENCES OF INTEREST FREE FUND INVESTED DURING THE YEAR. WITH A VIEW TO MAKE THIS FINDING MORE AUTHENTIC, IT IS NECESSARY TO GIVE THE DETAILS OF INTEREST FREE FUND S AVAILABLE WITH THE APPELLANT SO AS TO EXPLAIN THE INVESTMENT. SAME IS AS UNDER: NESCO LTD. 5 (I) SHARE CAPITAL RS.7,04,59,960 (II) GENERAL RESERVES-(INCLUDING TRANSFER DURING THE YEAR RS.53,74,43,373 RS.150,09,86,12 3 (III) BALANCE OF PROFIT & LOSS A/C. RS.50,00 ,000 TOTAL OWN FUNDS- RS.157,64,46,083/- B INTEREST FREE FUNDS- (I) ADVANCES FROM IT PARK LICENSEES RS.2,79,45,4 54 (II) ADVANCE FROM CONVENTION & EXHIBITION ORGANIZER S RS.16,82,84,518 (III) SECURITY DEPOSIT FROM EXHIBITORS RS.31,19, 593 (IV) SECURITY DEPOSITS FROM IT PARK LICENSEES RS.2 ,81,98,595 (V) SECURITY DEPOSITS FROM LICENSEE (OTHER) RS.11 ,31,31,982 TOTAL INTEREST FREE FUNDS RS.34,06,80,142 GRAND TOTAL OF OWN FUNDS AND INTEREST FREE FUNDS(A +B)RS.191,71,26,225 THUS, IT IS VERY EVIDENT THAT AS COMPARE TO TOTAL INVESTMENT OF RS.1,14,93,00,000/-, APPELLANT HAS GOT INTEREST FREE FUNDS OF RS.1,91,71,26,225/-. AS SUCH, THE FINDING OF THE ASSESSING OFFICER IS FACTUALLY INCORRECT. 5.5 FURTHER, THE ANALYSIS OF INDIVIDUAL INVESTMENT MADE FROM INTEREST FREE FUNDS SUPPORT THE CONTENTION OF THE APPELLANT. IT CAN BE SEEN THAT ON 18.03.2009, THERE WAS REDEMPTION OF ICICI PRUDENTIAL FMP OF RS.1 CRORE AND ON 25.3.2009 SALE PROCEEDS OF MUTUAL FUNDS IS OF RS. 2 CRORES WHICH WAS UTILIZED IN THIS FINANCIAL YEAR I.E. 2009-10. I T IS VERY EVIDENT FROM THE DETAILS SUBMITTED BY THE APPELLANT THAT UPTO 30.04.2009, THERE WAS A REDEEMED AMOUNT OF RS.11,67,98,101/- WHEREAS INVESTMENT IN HDFC CASH MANAGEMENT FUND WAS ONLY OF RS.2,05,00,000/- . THUS, THERE WAS SURPLUS OF RS. 9,62,98,101/-. SIMILARLY, IN THE MONTH OF MA Y THERE IS TOTAL REDEMPTION OF FUND OF RS.15,27,09,639/- WHEREAS INVESTMENT IS ONLY OF RS. 6 CRORES, THUS THERE IS POSITIVE BALANCE OF RS.9,27.09,639/-. SIMILARLY, IN THE MONTH OF JUNE DIVIDEND AND REDEEMED FUND WAS OF RS.16,97,09,956/- WHEREAS INVESTMENT WAS OF NESCO LTD. 6 RS.14,35,00,000/-. THERE AGAIN THERE WAS SURPLUS OF RS.2,62,09,956/-. IN THE MONTH OF JULY INTEREST FREE FUND IS FOUND TO BE OF RS. 9801.6371/- WHEREAS INVESTMENT IS ONLY OF RS.720,00,000/- THUS THERE IS SURPLUS INTEREST FREE FUND OF RS.2,60,16,731/-. FURTHER, I FIND THAT IN THE MONTH OF AUGUST INTEREST FREE FUND IS OF RS.11,36,37,853/- WHEREAS INVESTMENT IS ONLY OF RS.10,40,00,000/-. THUS, THERE IS SURPLUS OF RS.96,37,853/-. THUS, THROUGHOUT THE YEAR THERE IS SURPLUS OF INTEREST FREE FUND. SUCH INFORMATION IS AVAILABLE IN THE DETAILS SUBMITTED B Y THE APPELLANT. THE OVERALL PICTURE OF INVESTMENT AN D INTEREST FREE FUND HAS BEEN CLARIFIED EARLIER. IT I S TO BE REITERATED THAT DURING THE YEAR APPELLANT HAS ALSO RECEIVED DIVIDEND OF RS.319,21,262/- WHICH HAS BEEN INVESTED. FURTHER, IT IS IMPORTANT TO NOTE THAT DURING THE YEAR APPELLANT HAS RECEIVED RENTAL INCOME AND BUSINESS INCOME TO THE EXTENT OF RS.119,81,96,927/- AND HAS SHOWN NET PROFIT OF RS.78,72,77,164/-. OBVIOUSLY, SUCH INCOME IS AVAILABLE FOR ANY SUCH INVESTMENT, HENCE IT IS WRONG ON THE PART OF THE ASSESSING OFFICER TO PRESUME THAT OVER DRAFT FACILITY HAS BEEN UTILIZED FOR INVESTMENT. THE DETAILS GIVEN BY THE ASSESSING OFFICER IN PARA 4.5 OF THE ASSESSMENT ORDER DOES NOT POSSESS FULL INFORMATION AS THERE IS OPENING BALANCE COMPRISING OF REDEMPTION OF RS. 3 CRORES. THUS, IT IS - VERY OBVIOUS THAT NO INTEREST BEARING FUND HAS BEEN UTILIZED FOR INVESTMENT. AS SUCH THE FINDING OF THE ASSESSING OFFICER SUFFERS WITH INFIRMITY AND HAVING LACK OF FACTS. THUS, IN THE LIGHT OF THE ABOVE, I REACH TO THE CONCLUSION THAT LD. ASSESSING OFFICER HAS WRONGLY OBSERVED THAT APPELLANT HAS FAILED TO PROVE THE NEXUS BETWEEN OWN FUNDS AND ITS UTILIZATION IN INVESTMENT, THEREFORE, SUCH DISALLOWANCE OF NOTIONAL EXPENDITURE IS NOT SUSTAINABLE. FURTHER, APPELLANT HAS SUO MOTTO CALCULATED THE DISALLOWABLE EXPENDITURE TO THE EXTENT OF RS.63,O3,383/- WHICH IS REASONABLE AND FOUND TO BE ACCEPTABLE AS ASSESSING OFFICER HAS NESCO LTD. 7 NOT REFUTED THE SAME WITH ANY CONTRARY EVIDENCE. THUS, THE ADDITION BY WAY OF DISALLOWANCE OF FURTHER EXPENDITURE OF RS.1,06,41,261/- IS DELETED. 3.2. DURING THE COURSE OF HEARING, LD. DR WAS NOT ABLE TO CONTROVERT FACTUAL FINDINGS GIVEN BY THE LD. CIT(A) . IT IS NOTED THAT LD. CIT(A) HAS VERY CAREFULLY ANALYSED THAT OW N FUNDS AND INTEREST FREE FUNDS OF THE ASSESSEE WERE TO THE TUN E OF RS.191.71 CRORES AS AGAINST TOTAL INVESTMENT OF RS. 114.93 CRORES. IT IS FURTHER NOTED BY THE LD. CIT(A) AFTER PERUSING MINUTE DETAILS THAT EVEN IF THE NEXUS OF BORROWED F UNDS AND FUNDS INVESTMENT WAS TO BE ANALYSED, IT WAS FOUND T HAT NO BORROWED FUNDS WERE USED IN MAKING TAX-FREE INVESTM ENTS. IT WAS FOUND THAT ONLY SURPLUS FUNDS OR INTEREST-FREE FUNDS WERE USED FOR MAKING INVESTMENT IN TAX-FREE REVENUES. U NDER THESE CIRCUMSTANCES, WE FIND THAT LD. CIT(A) HAS RIGHTLY DELETED DISALLOWANCE MADE BY THE AO, AND NO INTERFERENCE IS CALLED FOR IN THE WELL REASONED ORDER OF LD. CIT(A). NOTHING H AS BEEN BROUGHT ON RECORD BEFORE US TO NEGATE THE FACTUAL F INDINGS RECORDED BY THE LD. CIT(A). THEREFORE, WE UPHOLD TH E ORDER OF THE LD. CIT(A) AND DISMISS THE GROUNDS RAISED BY TH E REVENUE. 4. GROUND NO.2: IN THIS GROUND THE REVENUE IS AGGRIEVED WITH THE ACTION OF LD. CIT(A) IN DELETING THE ADDITION O F RS.19,22,861/- MADE BY THE AO ON ACCOUNT OF PROVISI ONS OF EXPENDITURE. 4.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WA S NOTED BY THE AO THAT ASSESSEE HAS SHOWN IN ITS BALA NCE SHEET NESCO LTD. 8 BROUGHT FORWARD AMOUNT OF PROVISION OF EXPENSES MAD E IN EARLIER YEARS FOR RS.19,22,861/-. IT WAS FURTHER NO TED BY HIM THAT THE SAID AMOUNT WAS WRITTEN BACK BY THE ASSESS EE IN SUBSEQUENT YEARS. IN VIEW OF THESE FACTS THE AO WAS OF THE VIEW THAT SINCE THE PROVISION HAS BEEN WRITTEN BACK BY T HE ASSESSEE IN SUBSEQUENT YEARS, THEREFORE, IT WAS PROVED THAT PROVISIONS WERE ACTUALLY NOT REQUIRED TO BE MADE ORIGINALLY. I N VIEW OF THESE FACTS, HE ADDED TO THE TOTAL INCOME OF THE AS SESSEE, THE AMOUNT OF RS.19,22,861/- BEING THE AMOUNT OF PROVIS IONS MADE IN EARLIER YEARS AND BROUGHT FORWARD IN THE IM PUGNED YEAR IN THE BALANCE SHEET. 4.2. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFO RE THE LD. CIT(A) WHEREIN IT WAS SUBMITTED THAT THE IMPUGN ED AMOUNT OF PROVISIONS WAS MADE IN F.Y. 2004-05 TO 20 08-09 AND THE CORRESPONDING EXPENSES WERE ALLOWED IN THE RESPECTIVE ASSESSMENT YEAR. BUT IN THE SUBSEQUENT YEARS WHEN I T WAS FOUND THAT THESE AMOUNTS WERE NEITHER PAID NOR PAYA BLE, THEN THE SAME WERE OFFERED TO TAX IN F.Y. 2012-13. IT WA S FURTHER SUBMITTED THAT ASSESSEE HAD MADE PROVISIONS IN THE BOOKS OF ACCOUNTS IN A BONAFIDE MANNER AND IN ALL FAIRNESS WHEN THIS AMOUNT WAS FOUND TO BE NO MORE PAYABLE, THE SAME WA S WRITTEN BACK. UNDER THESE CIRCUMSTANCES THIS AMOUNT COULD NOT HAVE BEEN ADDED BACK BY THE AO IN THE IMPUGNED YEAR AS NEITHER THE EXPENSES RELATED TO IMPUGNED YEAR NOR S AID AMOUNT WAS WRITTEN BACK IN THE IMPUGNED YEAR. IT WA S FURTHER SUBMITTED THAT THE DECISION OF WRITING BACK WAS A C ONSCIOUS DECISION TAKEN AFTER EVALUATING THE ACTUAL LIABILIT Y. IT WAS LASTLY NESCO LTD. 9 SUBMITTED THAT IN ANY CASE THE ASSESSEE HAS ALREADY INCLUDED THIS AMOUNT IN ITS TAXABLE INCOME IN FINANCIAL YEAR 2012-13, AND THEREFORE, THERE WAS NO JUSTIFICATION TO INCLUD E THE SAME AGAIN IN THE INCOME OF IMPUGNED YEAR WHICH HAS RESU LTED INTO DOUBLE ADDITION OF SAME INCOME. AFTER ANALYZING THE SUBMISSIONS OF THE ASSESSEE, LD. CIT(A) DELETED THE ADDITION MADE BY THE AO AGAINST WHICH REVENUE FILED AN APPEA L BEFORE THE TRIBUNAL. 4.3. WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE L OWER AUTHORITIES AND SUBMISSIONS MADE BY THE LD. DR BEFO RE US. IT IS NOTED THAT LD. CIT(A) HAD ANALYSED ALL THE FACTS CAREFULLY AND FOUND THAT THE ADDITION MADE BY THE AO WAS CONT RARY TO LAW AND FACTS OF THE CASE. THE RELEVANT FINDINGS OF HIS ORDER ARE REPRODUCED BELOW: 63. I HAVE CONSIDERED THE ISSUE UNDER APPEAL, CAREFULLY. I FIND THAT THERE IS NO CLAIM OF ANY SUC H EXPENDITURE OF RS.19,22,864/- IN THIS YEAR. IN FACT , SUCH LIABILITIES WERE ARISEN IN FY 2004-05 TO 2008-09 ON ACCOUNT OF BILLS, RAISED FOR REPAIRS AND MAINTENANCE, PROFESSIONAL CHARGES, ADVERTISEMENT EXPENSES AND SOME MISCELLANEOUS EXPENSES, BY RESPECTIVE PARTIES. THESE EXPENSES WERE ALLOWED IN EARLIER YEAR ON THE BASIS OF EVIDENCES ON RECORD. THE DETAILS OF SUCH EXPENSES HAS BEEN SUBMITTED BY THE APPELLANT BY LETTER DATED 04.03.2013 TO THE ASSESSING OFFICER WHICH HAS BEEN ALSO SUBMITTED ALONG WITH PAPER BOOK AND DETAILS IS REFLECTED AT PAGE NO.163 ONWARDS. OBVIOUSLY, THIS IS NOT THE PROVISION OF EXPENDITURE OF THIS YEAR, RATHER THIS IS OUTSTANDING LIABILITY OF EARLIER YEARS WHICH WAS STILL PENDING IN THIS YEAR FOR PAYMENT. THUS, IT IS VERY EVIDENT THAT ASSESSING OFFICER HAS NOT PROPERLY APPRECIATED THE FACTS OF THE CASE. IT IS N OT NESCO LTD. 10 MALAFIDE CLAIM OF ANY EXPENDITURE. DURING THE COURSE OF BUSINESS SUCH LIABILITY HAS BEEN ARISEN, THEREFORE APPELLANT HAS CLAIMED THE SAME IN ROUTINE WAY IN PRECEDING YEARS, BUT WHEN, SUBSEQUENTLY, SUCH LIABILITY IS FOUND NOT PAYABLE ON ACCOUNT OF VARIOUS REASONS, SAME HAS BEEN WRITTEN BACK AND OFFERED FOR TAXATION IN FY 2012713, THEREFORE THERE IS NO REASON FOR DISALLOWING SUCH EXPENDITURE AND LEVYING DOUBLE TAX ON IT. 1, THEREFORE, FIND NO CONVINCING REASON WITH THE ASSESSING OFFICER TO DISALLOW SUCH OUTSTANDING LIABILITY IN THIS YEAR. IT IS A FACT THAT BEFORE ST ART OF SCRUTINY PROCEEDING, APPELLANT HAS SUO MOTTO ADDED AS PER ANNEXURE 'C' OF THE BALANCE SHEET SUCH AMOUNT OF RS.19,22,861/-, HENCE DUE TAX HAS ALREADY BEEN OFFERED. IT IS ALSO IMPORTANT TO POINT OUT THAT APPELLANT HAS DECLARED SUBSTANTIAL INCOME FOR TAXATION IN BOTH THE YEARS, HENCE THERE IS NO MALAFIDE INTENTION TO REDUCE TAX BURDEN OR TO REDUCE PROFIT OR INCOME OF ANY ASSESSMENT YEAR. THERE IS NO SORT OF ANY BENEFIT SUBSTANTIAL IN NATURE, HENCE SUCH DISALLOWANCE OF EXPENDITURE IS NOT SUSTAINABLE. THEREFORE, DISALLOWANCE OF SUCH EXPENDITURE OF RS.19,22,8611- IS DELETED BECAUSE SAME HAS ALREADY BEEN OFFERED IN SUBSEQUENT YEAR AND ASSESSING OFFICER HAS NOT REDUCED THE SAME IN SUBSEQUENT YEAR FROM THE ASSESSMENT OR HAS REMITTED THE CORRESPONDING REFUND TO THE APPELLANT. 4.4. IT IS NOTED BY US THAT LD. CIT(A) HAS RIGHTLY HELD THAT THERE WAS NO OCCASION WITH THE AO TO MAKE ADDITION IN THE YEAR UNDER CONCERN AND FURTHER IN ANY CASE THIS AMOUNT H AS ALREADY BEEN OFFERED BY THE ASSESSEE FOR FINANCIAL YEAR 2012- 13. THUS, TAKING INTO ACCOUNT ALL THE FACTS AND CIR CUMSTANCES OF THIS CASE THERE WAS NO JUSTIFICATION WITH THE AO TO MAKE ADDITION OF THIS INCOME IN THE YEAR UNDER CONCERN, AS PER LAW. THUS, IN OUR VIEW, LD. CIT(A) HAS RIGHTLY DELETED T HIS ADDITION NESCO LTD. 11 AND WE DO NOT FIND ANY APPROPRIATE REASON TO MAKE A NY INTERFERENCE IN THE FINDINGS RECORDED BY THE LD. CI T(A). THUS, THE ORDER OF LD. CIT(A) IS UPHELD AND GROUNDS RAISE D BY THE REVENUE IS DISMISSED. NOW WE TAKE UP C.O. NO.162/MUM/2015 FOR A.Y. 2010-1 1: 5 . IT IS NOTED THAT IN THE CROSS OBJECTIONS, THE ASS ESSEE HAS NOT TAKEN ANY NEW ISSUE. THE ASSESSEE HAS SIMPLY SU PPORTED THE ORDER OF LD. CIT(A) ON THE SAME GROUNDS ON WHIC H REVENUE HAS FILED BEFORE THE TRIBUNAL. 5.1. SINCE APPEAL OF THE REVENUE HAS ALREADY BEEN DISMI SSED ON THESE GROUNDS, THE CO BECOME INFRUCTUOUS AND WE DO NOT FIND IT NECESSARY TO ADJUDICATE THE SAME SEPARATELY AND THEREFORE THE SAME MAY BE TREATED AS DISMISSED BEIN G INFRUCTUOUS. 6. IN THE RESULT, REVENUES APPEAL AS WELL AS ASSESSE ES CROSS OBJECTIONS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH MAY, 2016. SD/- (MAHAVIR SINGH) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER MUMBAI; DATED: 25/05/2016 CTX? P.S/. .. NESCO LTD. 12 # $%&'&($ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !'# / THE RESPONDENT. 3. $# $# % ( ) / THE CIT, MUMBAI. 4. $# $# % / CIT(A)- , MUMBAI 5. ()* # !+ , $# # +- , / DR, ITAT, MUMBAI 6. *. / / GUARD FILE. / BY ORDER, '#( ! //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI