ITO 26(2)(5), MUMBAI V. RIZWAN REHAN MALIK, MUMBAI

ITA 2965/MUM/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7931 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 25-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: E SRIDHAR
• Assessee Lawyers: N O N E
• Keywords: Unexplained expenditure; Tax effect
• Section: 133(6); 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D , MUMBAI BEFORE S HRI R.C. SHARMA (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 2965 /MUM/2017 ASSESSMENT Y EAR: 2009 - 10 THE ITO 26 (2)(5), R. NO. 506 , 5 TH FLOOR, C - 11, PRATAKSHYAKAR BHAVAN, BANDRA KURLA COMP LEX, BANDRA (EAST), MUMBAI - 400051 VS. SHRI RIZWAN REHAN MALIK, 18, FRIENDS HOUSING SOCIETY, L.B.S. MARG, 90 FEET ROAD, SAKINAKA, MUMBAI - 400072 PAN: AMQPM7948D (APPELLANT) (RESPONDENT) REVENUE BY : SHRI E. SRIDHAR ( CIT D R) ASSESSEE BY : NON E DATE OF HEARING: 19 /09 /201 8 DATE OF PRONOUNCEMENT: 19 / 09 /201 8 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER DATED 16.01.2017 PASSED BY THE C OMMISSIONER OF INCOME TAX (APPEALS) - 38 (FOR SHORT THE CIT(A) , MUMBAI, FOR THE ASSESSMENT YEAR 2009 - 10 , WHEREBY THE LD. CIT(A) HAS PARTLY ALLOWED T HE APPEAL FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDER PASSED U/S 143 (3) R.W.S 147 R.W.S. 263 OF THE I NCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2. AGGRIEVED BY THE ORDER OF LD. CIT (APPEAL S ), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING EFFECTIVE GROUNDS : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN RESTRICTING THE DISALLOWANCE OF RENTAL EXPENSES MADE BY THE AO AS UNEXPLAINED EXPENDITURE OF RS. 42,00,000/ - TO RS. 2 ITA NO. 2965 MUM/2017 ASSESSMENT YEAR: 2009 - 10 5,00,000/ - THEREBY GRANTING THE ASSESSEE A RELIEF OF RS. 37,00,000/ - . 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN IGNORING THE FACT THAT THE ASSESSEE HAD INCURRED TOTAL CASH EXPENSES AMOUNTING TO RS. 56,38,196 DURING THE YEAR, INCLUDING RENT EXPENSES OF RS. 42,00,000/ - WHEREAS CASH WITHDRAWALS FROM BANKS WERE TO THE TUNE OF R S. 35,33,412/ - ONLY WHICH CORROBORATES THE FACT THAT THE ASSESSEE HAD CLAIMED BOGUS RENT EXPENSES TO THE TUNE OF RS. 18,11,579/ - (CASH EXPENSES OF RS. 56,38,196 (LESS) CASH WITHDRAWAL RS. 35,33,412/ - (LESS) CASH IN HAND AS ON 31.03.2009 RS. 2,93,205). 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) FAILED TO APPRECIATE THAT THE AO HAD ISSUED NOTICES U/S 133(6) TO ALL THE 40 PARTIES TO VERIFY THE GENUINENESS OF RENT EXPENSES CLAIMED, HOWEVER, THE NOTICES COULD NOT BE SERVED ON ANY OF THE 40 PARTIES AND THE ASSESSEE ALSO EXPRESSED HIS INABILITY TO PRODUCE THESE PARTIES ALONGWITH THEIR COPY OF RETURN, LEDGER ACCOUNT, BILLS RAISED AND COPY OF BANK STATEMENTS. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. C IT (A) ERRED IN IGNORING THE FACT THAT NEITHER BOOKS OF ACCOUNTS NOR SUPPORTING DOCUMENTARY EVIDENCES WERE FURNISHED BY THE ASSESSEE TO DISCHARGE THE ONUS CAST ON HIM IN TERMS OF PROVISIONS OF SECTION 37(1) OF THE I.T. ACT, 1961. 3 . THIS CASE WAS FIXED FOR TODAY FOR HEARING. HOWEVER, WHEN THE CASE WAS CALLED OUT FOR HEARING, NONE APPEARED ON BEHALF OF THE RESPONDENT/ASSESSEE. WE NOTICE THAT THE TAX EFFECT OF THE RELIEF GRA NTED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS BELOW RS.20 LACS AND AS PER THE CBDT CIRCULAR NO. 3/2018, F. NO. 279/MISC.142/2007 - ITJ (PT) DATED 11 TH JULY, 2018 ISSUED BY CENTRAL BOARD OF DIRECT TAXES, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, 3 ITA NO. 2965 MUM/2017 ASSESSMENT YEAR: 2009 - 10 GOVERNMENT OF INDIA LIMIT FIXED BY THE CBDT FOR FILING THE APPEAL BEFORE THE ITAT IS 20 LACS . 4 . THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FAIRLY CONCEDED THAT TH IS APPEAL IS NOT MAINTAINABLE IN LIGHT OF THE ABOVE SAID CBDT CIRCULAR. THE LD. DR ALSO DID NOT POINT OUT THAT TH IS APPEAL FALL S IN ANY OF THE EXCEPTIONS CARVED OUT IN THE ABOVE S AID CIRCULAR. 5 . WE HAVE GONE THROUGH THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND THE GROUNDS OF APPEALS. WE FIND THAT THE TAX EFFEC T IN THE ABOVE REFERRED APPEAL IS LESS THAN RS. 20 LACS. ACCORDINGLY, W E DISMISS THE AFORESAID APPEAL FI LED BY THE REVENUE. IN THE RESULT, THE APPEAL BY THE REVENUE IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON 19 TH SEPTEMBER , 2018 . SD/ - SD/ - ( R.C. SHARMA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 19/ 09 / 201 8 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / TH E APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . 4 ITA NO. 2965 MUM/2017 ASSESSMENT YEAR: 2009 - 10 / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI