RITA INTERNATIONAL, MUMBAI V. ACIT 15(2), MUMBAI

ITA 2845/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2361 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 25-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VISHWAS JADHAVSR
• Keywords: Business expenditure; Notional interest
• Section: 143(3)

Judgement Text

D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO. 2845 /MUM/2014 ( / ASSESSMENT YEAR : 2009-10) M/S RITA INTERNATIONAL, 6, SHIVNERI CHS, PARSIWADA, CHAKALA, ANDHERI (E), MUMBAI 400099. / V. THE A.C.I.T. 15(2), BKC, BANDRA (E), MUMBAI. ./ PAN : AAGFR 3596M ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY SHRI VISHWAS MEHENDALE REVENUE BY : SHRI VISHWAS JADHAV,SR. DR / DATE OF HEARING : 23.5.2016 / DATE OF PRONOUNCEMENT : 29-07-2016 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE ASSESSEE, BEING ITA NO. 2845/MUM/2014, IS DIRECTED AGAINST THE APPELLATE ORDER DATED 27 TH FEBRUARY, 2014 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 26 MU MBAI (HEREINAFTER CALLED THE CIT(A)), FOR THE ASSESSMENT YEAR 2009-10, THE APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) ARISING FROM THE ASSESSME NT ORDER DATED 30 TH DECEMBER, 2011 PASSED BY THE LEARNED ASSESSING OFF ICER (HEREINAFTER CALLED THE AO) U/S 143(3) OF THE INCOME TAX ACT,1961 (HE REINAFTER CALLED THE ACT). ITA 2845/MUM/2014 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE MEMO OF APPEAL FILED WITH THE INCOME TAX APPELLATE TRIBUNAL, MUMBA I (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED C.I.T.(A) ERRED IN CONFIRMING THE FINDINGS O F THE ASSESSING OFFICER THAT THE CLAIM OF INTEREST OF RS. 4,55,798/- I S NEITHER ADMISSIBLE AS BUSINESS EXPENDITURE NOR AS DEDUCTION FROM THE INC OME FROM OTHER SOURCES. II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED C.I.T.(A) ERRED IN HOLDING THAT THE CLAIM OF RS. 4,55,798/- AS INTEREST IS NOT ALLOWABLE AS BUSINESS EXPENDITURE AS TH E APPELLANT WAS NOT CARRYING ON ANY MONEY LENDING BUSINESS AND, THER EFORE, THE INTEREST INCOME WAS ASSESSABLE UNDER THE HEAD INCOME FROM OTHE R SOURCES AND NOT AS INCOME FROM BUSINESS. III) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C.I.T.(A) ERRED IN DISMISSING THE GROUND RE GARDING LEVY OF INTEREST U/S. 234 A, B & C ON THE GROUND THAT THE LEVY O F INTEREST UNDER THIS SECTION IS CONSEQUENTIAL AND THEREBY DISMISSING THE LEGAL GROUND AS TO WHETHER THE INTEREST UNDER THE AFORESAID SECTION IS LEVIABLE OR NOT. IV) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED C.I.T.(A) ERRED IN NOT DELETING THE DISALLOWAN CE OF 10% OF EXPENSES AMOUNTING TO RS.5,95,508/-. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A PARTNERSHIP FIRM DERIVING INCOME FROM BUSINESS BEING MANUFACTURER OF PLASTICS MOULDED CRATES. THE ASSESSEE DERIVED PROFIT OF RS. 65,50,13 4/- DURING THE ASSESSMENT YEAR AND HAD CLAIMED DEDUCTION U/S 80-IB(4) OF THE ACT. THE DEDUCTION WAS CLAIMED BY THE ASSESSEE U/S 80IB(4) OF THE ACT WHI CH INCLUDED INTEREST ON BANK FD OF RS. 19,844/-, INTEREST RECEIVED ON LOANS OF RS. 17,16,501/- GIVEN AND INTEREST ON INCOME TAX REFUND OF RS. 21,298/-. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY DEDUCTION ON THE INTEREST EARN ED ON FIXED DEPOSIT, LOANS AND ADVANCE AND INTEREST ON INCOME TAX REFUND CLAIM ED U/S 80IB(4) OF THE ACT SHOULD NOT BE DISALLOWED AS THIS IS NOT AN INCOME D ERIVED FROM THE BUSINESS. THE ASSESSEE HAS IN ITS P&L ACCOUNT SHOWN INTEREST RECEIVED ON LOAN OF RS. ITA 2845/MUM/2014 3 12,60,703/- ,BUT THE SAME WAS NET OF INTEREST I.E. NET OF GROSS INTEREST INCOME OF RS. 17,16,501/- AND THE INTEREST EXPENSE OF RS. 4,55,798/. THE INTEREST INCOME EARNED BY THE ASSESSEE WAS IN THE OPINION OF THE AO NOT DIRECTLY DERIVED FROM THE MANUFACTURING ACTIVITY AND HENCE I S NOT ELIGIBLE FOR DEDUCTION U/S. 80IB(4) OF THE ACT. THE A.O. RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF LIBERTY INDIA V. CIT, (2009) 183 TAXMAN 349 (SC), AND HELD THAT IN THE PRESENT CASE IT COULD NO T SAID THAT INTEREST INCOMES ARE RELATED WITH THE BUSINESS WITH FIRST DEGREE AND ACCORDINGLY, THE AO DISALLOWED INTEREST INCOME OF RS. 17,57,643/- AND A DDED BACK THE SAME TO THE INCOME OF THE ASSESSEE VIDE ASSESSMENT ORDER DA TED 30 TH DECEMBER, 2011 PASSED BY THE AO U/S 143(3) OF THE ACT. WITH RESPECT TO CERTAIN EXPENSES AS DETAILED HEREUN DER, THE ASSESSEE HAD MADE PAYMENT IN CASH. THE ASSESSEE WAS ASKED TO EX PLAIN THE SAME WITH EVIDENCE THAT THE EXPENDITURE WAS WHOLLY AND EXCLUS IVELY INCURRED FOR THE PURPOSE OF BUSINESS AND NO PERSONAL ELEMENT IS INVO LVED. HOWEVER, IN THE ABSENCE OF SATISFACTORY REPLY, THE A.O. DISALLOWED 10% OF THE TOTAL EXPENSES FROM THE RESPECTIVE HEADS AS DETAILED HEREUNDER:- PARTICULARS OF EXPENSES TOTAL AMOUNT CLAIMED (RS) AMOUNT OF DISALLOWANCE / ADDITION MADE (RS) CONVEYANCE EXPENSE 3,14,680 31,468 STAFF WELFARE 72,771 7,277 TELEPHONE CHARGES 50,418 5,041 SUNDRY EXPENSES 1,18,720 11,872 VEHICLE EXPENSE 38,919 3,892 TOTAL 5,95,508 59,550 ITA 2845/MUM/2014 4 THE AMOUNT OF RS. 59,550/- BEING 10% OF RS. 5,95,50 8/- WAS THUS ADDED TO THE TOTAL INCOME OF THE ASSESSEE BY THE AO VIDE ASS ESSMENT ORDER DATED 30 TH DECEMBER, 2011 PASSED BY THE AO U/S 143(3) OF THE A CT. 4. AGGRIEVED BY THE ASSESSMENT ORDER DATED 30 TH DECEMBER, 2011 PASSED BY THE AO U/S 143(3) OF THE ACT, THE ASSESSEE FILED ITS FIRST APPEAL BEFORE THE LD. CIT(A) WHO REJECTED THE CONTENTION OF THE ASSES SEE WITH RESPECT TO THE INTEREST INCOME ON THE GROUND THAT THE ASSESSEE HAS PRODUCED THE COPY OF ACCOUNTS AND FROM COPY OF ACCOUNTS , IT IS OBSERVED THAT THE ASSESSEE HAS RECEIVED INTEREST FROM INCOME TAX REFUND, LOANS AND BANK DEPOSIT WHILE PAYMENTS OF INTEREST EXPENDITURE IS ON ACCOUNT OF B ANK, AUTO LOAN ETC.. THE LEARNED CIT(A) OBSERVED THAT THE ASSESSEE IS NOT AB LE TO DEMONSTRATE THAT THE INTEREST HAS BEEN PAID FOR EARNING INTEREST INCOME. THE LEARNED CIT(A) FURTHER OBSERVED THAT THE INTEREST INCOME WAS ASSESSABLE UN DER THE HEAD INCOME FROM OTHER SOURCES AND INTEREST EXPENDITURE IS INC URRED BY THE ASSESSEE FOR ITS BUSINESS AND HENCE THE LD. CIT(A) DISMISSED THI S GROUND OF THE ASSESSEE VIDE APPELLATE ORDER OF THE LEARNED CIT(A) DATED 27 -02-2014. WITH RESPECT TO THE DISALLOWANCE OF 10% OF EXPENSES AGGREGATING TO RS. 5,95,508/- , WHEREBY DISALLOWANCE WAS MADE BY THE A O OF RS. 59,550/- BEING 10% OF TOTAL EXPENSES ON ESTIMATE BASIS, IT WAS SUB MITTED BY THE ASSESSEE THAT FRINGE BENEFIT TAX(FBT) ON THESE EXPENSES HAVE ALSO BEEN PAID, HENCE, NO DISALLOWANCE SHOULD BE MADE. HOWEVER, AS PER TH E LD. CIT(A) THE PAYMENT OF FBT MADE ON THESE EXPENSES HAS NOT BEEN SUBSTANT IATED BY THE ASSESSEE, HENCE, THE LD. CIT(A) RESTRICTED THE DISALLOWANCE T O 5% OF THE TOTAL AGGREGATE EXPENSES OF RS.5,95,508/-, VIDE APPELLATE ORDER OF THE LEARNED CIT(A) DATED 27-02-2014. 5. AGGRIEVED BY THE APPELLATE ORDER DATED 27-02-20 14 PASSED BY THE LD. CIT(A), THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. ITA 2845/MUM/2014 5 6. BEFORE THE TRIBUNAL, THE LD. COUNSEL FOR THE ASS ESSEE SUBMITTED THAT INTEREST INCOME OF RS.17,57,643/- HAS BEEN DISALLOW ED U/S 80IB(4) OF THE ACT AS HELD TO BE NOT DERIVED FROM THE BUSINESS. IT IS THE SAY OF THE LD. COUNSEL THAT INTEREST INCOME INCLUDED AN AMOUNT OF RS. 17,1 6,501/- BEING INTEREST INCOME FROM RITA INDUSTRIES , SISTER CONCERN OF THE ASSESSEE. THE LD. COUNSEL SUBMITTED THAT THE ASSESSEE HAS AN RUNNING LOANS AN D ADVANCE ACCOUNT WITH THE SAID SISTER CONCERN NAMELY RITA INDUSTRIES WHER EBY THERE WAS RUNNING DEBIT AND CREDIT ENTRIES. A CHART IS PLACED IN THE PAPER BOOK VIDE PAGE NO. 7 AND 8. IT IS THE CONTENTION OF THE LD. COUNSEL THA T THE ASSESSEE HAD ALWAYS RECEIVABLE FROM THE SAID SISTER CONCERN RITA INDUST RIES THROUGHOUT THE PREVIOUS YEAR AND HENCE INTEREST WAS RECEIVABLE FRO M THE SAID CONCERN RITA INDUSTRIES AND NEVER EVER DURING THE PREVIOUS YEAR THE INTEREST WAS PAYABLE TO THE SAID SISTER CONCERN RITA INDUSTRIES AS THERE W AS NEVER EVER ANY AMOUNT STOOD PAYABLE AT THE ANY TIME DURING THE ENTIRE PRE VIOUS YEAR TO SAID SISTER CONCERN M/S RITA INDUSTRIES WHEREBY IN CONSEQUENCE THEREOF THE ASSESSEE BECAME INDEBTED TO THE SAID SISTER CONCERN RITA IND USTRIES . THUS, ONLY FOR THE LIMITED PURPOSES OF COMPUTING THE NET INTEREST RECE IVABLE FROM SAID SISTER CONCERN RITA INDUSTRIES , THE INTEREST HAS BEEN SHO WN TO BE RECEIVABLE AND PAYABLE TO THE SAID SISTER CONCERN RITA INDUSTRIES BASED ON ADVANCES MADE AND ADVANCES RECEIVED BACK BY THE ASSESSEE . THUS F OR THIS REASON ALONE THE GROSS INTEREST RECEIVABLE WAS SHOWN ON NOTIONAL BA SIS TO BE RS. 17,16,501/- FROM SAID SISTER CONCERN RITA INDUSTRIES , WHILE TH E NOTIONAL INTEREST PAYABLE TO THEM WAS RS. 4,55,798/- SINCE IT WAS A RUNNING ACCOUNT BETWEEN THE TWO CONCERNS AND NET AMOUNT OF INTEREST INCOME OF RS. 1 2,60,703/- WAS THE REAL INTEREST INCOME WHICH WAS IN-FACT RECEIVABLE BY THE ASSESSEE FROM SISTER CONCERN RITA INDUSTRIES ON WHICH EVEN TAX WAS DEDUC TED AT SOURCE BY THE SAID SISTER CONCERN RITA INDUSTRIES AS IS REFLECTED IN T HE LEDGER ACCOUNT PLACED IN FILE. HENCE, IT WAS SUBMITTED THAT HYPOTHETICAL AN D NOTIONAL CALCULATIONS WERE MADE , WHILE ACTUALLY AND IN REALITY , NET INTERE ST INCOME OF RS. 12,60,703/- ITA 2845/MUM/2014 6 WAS RECEIVABLE BY THE ASSESSEE FROM ITS SISTER CONC ERN RITA INDUSTRIES ON WHICH TAX WAS ALSO DEDUCTED AT SOURCE AS PER PROVIS IONS OF THE ACT BY THE SAID SISTER CONCERN RITA INDUSTRIES. THUS, IT WAS SUBM ITTED THAT RS.4,55,798/- WAS NOT INTEREST EXPENDITURE INCURRED BY THE ASSESS EE AND ONLY RS.12,60,703/- WAS INTEREST INCOME OF THE ASSESSEE FROM LOANS WHICH SHOULD BE DISALLOWED U/S 80IB(4) OF THE ACT ALONG WITH RS. 19844/- BEING INTEREST ON FIXED DEPOSITS AND RS.21,298/- BEING INTEREST ON IN COME TAX REFUNDS, AND NOT RS.17,57,643/- AS WAS DONE BY THE AUTHORITIES BELOW . THE LEARNED COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT THE AO HAS DISALLOWED 10% OF EXPENSES WHEREBY DISALLOWANCE OF RS.59,550/- WAS MADE ON AGGREGATE EXPENSES OF RS.5,95,508/- , WHICH WAS REDUCED TO 5% BY THE LEARNED CIT(A) IN THE FIRST APPEAL. THE LEARNED COU NSEL FOR THE ASSESSEE SUBMITTED THAT THE DISALLOWANCE HAS BEEN MADE ON ES TIMATE AND ADHOC BASIS WHICH IS NOT PERMISSIBLE UNDER THE PROVISIONS OF TH E ACT AND ALSO FBT IS PAID ON THESE EXPENSES BY THE ASSESSEE. THE LEARNED COUN SEL DREW OUR ATTENTION TO ACKNOWLEDGMENT OF RETURN OF INCOME FILED WITH THE R EVENUE FOR THE IMPUGNED ASSESSMENT WHICH IS PLACED IN FILE WHEREBY THE VALU E OF FRINGE BENEFIT COMPUTED WAS RS.112321/- AND FRINGE BENEFIT TAX LIA BILITY WAS ASSESSED AT RS.38,178/- . THE ASSESSEE HAS ALSO PLACED THE WORK ING OF VALUE OF FRINGE BENEFIT AND TAX THEREON. THE LEARNED COUNSEL SUBMIT TED THAT SINCE FBT WAS PAID , EXPENSES CANNOT BE NOW DISALLOWED. 7. THE LD. D.R. ON THE OTHER HAND RELIED ON THE ORD ER OF THE AUTHORITIES BELOW. THE LEARNED DR SUBMITTED THAT GENUINENESS O F THE EXPENSES WAS DOUBTED BY THE REVENUE. 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND ALS O PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE OBSERVED THAT THE ASSE SSEE HAS AN RUNNING LOANS AND ADVANCE ACCOUNT WITH THE SAID SISTER CONCERN OF THE ASSESSEE NAMELY RITA ITA 2845/MUM/2014 7 INDUSTRIES WHEREBY THERE WAS RUNNING DEBIT AND CRED IT ENTRIES. A CHART IS PLACED BY THE ASSESSEE IN THE PAPER BOOK VIDE PAGES NO. 7 AND 8. IT IS OBSERVED THAT THE ASSESSEE HAS A RUNNING ACCOUNT WI TH RITA INDUSTRIES WHEREBY THERE WAS ALWAYS RECEIVABLE FROM THE SAID S ISTER CONCERN RITA INDUSTRIES THROUGHOUT THE PREVIOUS YEAR AND HENCE I NTEREST WAS RECEIVABLE FROM THE SAID CONCERN RITA INDUSTRIES AND NEVER EVE R DURING THE PREVIOUS YEAR THE INTEREST WAS PAYABLE TO THE SAID CONCERN RITA I NDUSTRIES AS THERE WAS NEVER EVER DURING THE ENTIRE PREVIOUS YEAR ANY AMOU NT STOOD AT THE ANY TIME WHEREBY THE ASSESSEE BECAME INDEBTED TO THE SAID SI STER CONCERN OF THE ASSESSEE NAMELY RITA INDUSTRIES . THUS, WE HAVE OBS ERVED THAT ONLY FOR THE LIMITED PURPOSES OF COMPUTING THE NET INTEREST RECE IVABLE FROM SAID SISTER CONCERN RITA INDUSTRIES , THE INTEREST HAS BEEN SHO WN TO BE RECEIVABLE AND PAYABLE TO THE SAID SISTER CONCERN RITA INDUSTRIES BASED ON ADVANCES MADE AND ADVANCES RECEIVED BACK BY THE ASSESSEE FROM . THUS FOR THIS REASON ALONE THE GROSS INTEREST RECEIVABLE WAS SHOWN ON NOTIONA L BASIS TO BE RS. 17,16,501/- FROM SAID SISTER CONCERN RITA INDUSTRIE S , WHILE THE NOTIONAL INTEREST PAYABLE TO THEM IS RS. 4,55,798/- SINCE IT WAS A RUNNING ACCOUNT BETWEEN THE TWO CONCERNS AND NET AMOUNT OF INTEREST INCOME OF RS. 12,60,703/- WAS THE REAL INTEREST INCOME WHICH WAS RECEIVABLE BY THE ASSESSEE FROM SISTER CONCERN RITA INDUSTRIES ON WHI CH EVEN TAX WAS DEDUCTED AT SOURCE BY THE SAID SISTER CONCERN RITA INDUSTRIE S AS IS REFLECTED IN THE LEDGER ACCOUNT FILED WITH THE TRIBUNAL . THUS, IT IS OBSERVED THAT HYPOTHETICAL AND NOTIONAL CALCULATIONS WERE MADE , WHILE ACTUAL LY AND IN REALITY , NET INTEREST INCOME OF RS. 12,60,703/- WAS RECEIVABLE BY THE ASSESSEE FROM RITA INDUSTRIES ON WHICH TAX WAS ALSO STATED TO BE DEDUC TED AT SOURCE AS PER PROVISIONS OF THE ACT BY THE SAID SISTER CONCERN RI TA INDUSTRIES. THUS, IT IS OBSERVED THAT RS.4,55,798/- WAS NOT INTEREST EXPEN DITURE INCURRED BY THE ASSESSEE AND ONLY RS.12,60,703/- WAS NET INTEREST I NCOME OF THE ASSESSEE FROM LOANS WHICH SHOULD BE DISALLOWED U/S 80IB(4) O F THE ACT ALONG WITH RS.19844/- BEING INTEREST ON FIXED DEPOSITS AND RS. 21,298/- BEING INTEREST ON ITA 2845/MUM/2014 8 INCOME TAX REFUNDS WHICH WILL ALSO STOOD DISALLOWED U/S 80IB(4) OF THE ACT, AND NOT RS.17,57,643/- AS WAS DONE BY THE AO AND SU STAINED BY THE LEARNED CIT(A). HOWEVER, THE LEARNED CIT(A) HAS GIVEN CATEG ORICAL FINDING THAT INTEREST EXPENDITURE IS TOWARDS BANK LOAN AND AUTO LOANS IN PARA 3.3 PAGE 2 OF THE APPELLATE ORDER OF THE LEARNED CIT(A) WHICH IN OUR CONSIDERED VIEW NEEDS VERIFICATION BY THE AO OF THE AUTHENTICITY AND CORR ECTNESS OF THE CLAIM AND WORKING OF INTEREST INCOME THERE-OF AS CONTENDED BY THE ASSESSEE BEFORE US AND SET OUT BY US IN THIS ORDER ABOVE. THUS, FOR LI MITED VERIFICATION OF THE AUTHENTICITY AND CORRECTNESS OF THE CLAIM AND WORKI NG OF INTEREST INCOME THERE-OF THE ASSESSEE , WE ARE INCLINED TO SET ASID E AND REMIT THE MATTER BACK TO THE FILE OF AO FOR MAKING NECESSARY VERIFICATION OF THE AUTHENTICITY AND CORRECTNESS OF THE CLAIM AND WORKING OF INTEREST IN COME THERE-OF THE ASSESSEE BEFORE ALLOWING THE CLAIM OF THE ASSESSEE. THIS DIS POSES OF GROUND NO (I) AND (II) RAISED BY THE ASSESSEE IN MEMO OF APPEAL FILED WITH THE TRIBUNAL. WE ORDER ACCORDINGLY. WITH RESPECT TO THE AD-HOC DISALLOWANCE OF RS.59,5 50/- ON ESTIMATED BASIS BEING 10% OF THE AGGREGATE EXPENSES OF RS. 5,95,508 /-, THE LD. CIT(A) RESTRICTED THE DISALLOWANCE TO 5% OF AGGREGATE EXPE NSES . WE HAVE OBSERVED THAT THE ASSESSEE HAS DULY PAID FBT OF RS. 38178/- DURING THE ASSESSMENT YEAR ON THE TOTAL FRINGE BENEFIT VALUE OF RS. 1,12, 321/-. WE HAVE OBSERVED THAT THE EXPENSES OF CONVEYANCE, STAFF WELFARE, TEL EPHONE CHARGES AND VEHICLE EXPENSES ARE DULY INCLUDED IN FRINGE BENEFIT VALUE FOR THE PURPOSES OF COMPUTATION OF FBT AND MORE-OVER THE REVENUE HAS NO T POINTED ANY DEFECT IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE OR EXPENSES CLAIMED BY THE ASSESSEE, AND ADHOC DISALLOWANCE WAS MADE BY THE R EVENUE, HENCE, KEEPING IN VIEW FACTS AND CIRCUMSTANCES OF THE CASE , THE A DDITION OF RS.29,775/- AS SUSTAINED BY LEARNED CIT(A) TOWARDS EXPENSES DISALL OWED ON AD-HOC BASIS ON ESTIMATION CANNOT BE SUSTAINED. THIS DISPOSES OF GR OUND NO. (IV) RAISED BY THE ASSESSEE IN MEMO OF APPEAL FILED WITH THE TRIBUNAL. WE ORDER ACCORDINGLY. ITA 2845/MUM/2014 9 9. THE GROUND NO (III) RAISED BY THE ASSESSEE IN ME MO OF APPEAL FILED WITH THE TRIBUNAL IS CONSEQUENTIAL AND DOES NOT REQUIRE ADJU DICATION AND HENCE IS DISMISSED. WE ORDER ACCORDINGLY. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA N0. 2845/MUM/2014 FOR THE ASSESSMENT YEAR 2009-10 IS AL LOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JULY , 2016. # $% &' 29-07-2016 ( ) SD/- SD/- (SAKTIJIT DEY) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 29-07-2016 [ .9../ R.K. R.K. R.K. R.K. , EX. SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ / DR, ITAT, MUMBAI D BENCH 6. (BC D / GUARD FILE. / BY ORDER, = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI