ACIT 8(3), MUMBAI V. WESTERN EXPRESS INDUSTRIES LTD ( EARLIER KNOWN AS GTC GLOBAL LTD), MUMBAI

ITA 3013/MUM/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9296 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 10-12-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 03-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRITAM SINGH
• Keywords: Business income
• Section: 37(1)

Judgement Text

. , IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI , BEFORE SHRI R.K.GUPTA , J M ITA NO. 3013 / MUM/ 20 1 2 ( ASSESSMENT YEAR : 200 5 - 20 0 6 ) ACIT 8(3) , MUMBAI VS. WESTERN EXPRESS INDUSTRIES LTD. (EARLIER KNOWN AS GTC GLOBAL LTD), TOBACCO HOUSE, S.V.RD., VILE PARLE (W) , MUMBAI - 400 056. PAN/GIR NO. : A AACG 4094 K ( APPELLANT ) .. ( RE SPONDENT ) /REVENUE BY : MR. PRITAM SINGH /A SSESSEE BY : MR . GAURAV BANSAL DATE OF HEARING : 10 TH DEC ., 2012 DATE OF PRONOUNCEMENT : 12 TH DEC. ,2012 O R D E R THIS IS AN APPEAL PREFERRED BY THE DEPARTMENT AGAINST THE ORDER DATED 29 - 2 - 2012 OF LEANED CIT(A) - 18 , MUMBAI RELA TING TO THE ASSESSMENT YEAR 200 5 - 0 6 . 2 . THE ONLY ISSUE IN THE APPEAL OF THE DEPARTMENT IS AGAINST ALLOWING EXPENSES OF RS. 31,37,457 / - UNDER SECTION 37(1) OF THE ACT. 3 . THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE WITH REGARD TO EXPENSES CLAIMED AT RS. 31,37,457/ - BY OBSERVING THAT THERE IS NO RECEIPT ON ACCOUNT OF BUSINESS INCOME DURING THE YEAR UNDER ITA NO. 3013 /20 1 2 2 CONSIDERATION. THE REFORE, THESE EXPENSES ARE NOT ALLOWABLE. ACCORDINGLY, HE DISALLOWED. 4 . BEFORE CIT(A) , IT WAS SUBMITTED THAT WHETHER THERE IS ANY INCOME OR NOT BUT EXPENDITURE INCURRED IN THE REGULAR COURSE OF BUSINESS THEN THEY ARE ALLOWABLE EXPENDITURE. IT WAS FURTHE R SUBMITTED THAT ON IDENTICAL FACTS FOR THE ASSESSMENT YEARS 2001 - 02 AND 2004 - 05, IDENTICAL CLAIM OF THE ASSESSEE HAS BEEN ALLOWED BY LEARNED CIT(A) . COPY OF THE ORDER OF THE SAME HAS ALSO BEEN FILED. RELIANCE WAS PLACED ON VARIOUS CASE LAWS, WHICH HAVE BE EN MENTIONED IN THE ORDER OF THE CIT(A) AT PAGE 3. 5 . AFTER CONSIDERING THE SUBMISSION S AND TAKING INTO CONSIDERATION THE DECISION IN THE CASE OF CIT VS. RAJENDRA PRASAD MOODY, 115 ITR 519 , THE CIT(A) HELD THAT FURTHER EXPENDITURE IN THE COURSE OF TRADE , WHICH IS UN - REMUNERATIVE IS NONETHELESS A PROPER DEDUCTION , IF WHOLLY AND EXCLUSIVELY MADE FOR THE PURPOSE OF TRADE. THE CIT(A) ALSO OBSERVED THAT IT DOES NOT REQUIRE THE PRESENCE OF THE RECEIPT ON THE CREDIT SIDE TO JUSTIFY THE DEDUCTION OF AN EXPENSE. ACCORDINGLY, HE HELD THAT SINCE THESE EXPENSES ARE INCURRED FOR BUSINESS PURPOSE, GENUINENESS IS NOT DOUBT, THEREFORE, THEY ARE ALLOWABLE. ACCORDINGLY, CLAIM OF THE ASSESSEE WAS ALLOWED. 6 . LEARNED DR HAS PLACED RELIANCE ON THE ORDER OF THE ASSESSING OFF ICER. ITA NO. 3013 /20 1 2 3 7 . ON THE OTHER HAND, LEARNED COUNSEL OF THE ASSESSEE PLACED RELIANCE ON THE ORDER OF LEARNED CIT(A) . IT WAS FURTHER SUBMITTED THAT FOR THE ASSESSMENT YEAR 2004 - 05, THE TRIBUNAL HAS ALLOWED SIMILAR CLAIM IN FA VOUR OF THE ASSESSEE. 8 . AFTER CONSIDER ING THE ORDER OF THE ASSESSING OFFICER AS WELL AS THE ORDER OF THE LEARNED CIT(A) , AND OTHER MATERIAL PLACED ON RECORD, I FOUND NO INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) . I NOTED THAT SIMILAR CLAIM OF EXPENSES WERE DISALLOWED FOR THE EARLIER YEAR. LE ARNED CIT(A) ALLOWED THE ISSUE IN FAVOUR OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2001 - 02 & 2004 - 05 BY OBSERVING THAT THESE EXPENSES WERE INCURRED FOR BUSINESS PURPOSE. IN TH IS YEAR ALSO, THE ASSESSEE HAS INCURRED THE EX PENDITURE, WHICH WERE FOR BUSINESS PU RPOSE. WHETHER THERE IS ANY BUSINESS RECEIPT OF INCOME OR NOT, THE CLAIM OF THE ASSESSEE CANNOT BE DISALLOWED, IF THEY ARE GENUINELY INCURRED FOR BUSINESS PURPOSE. THEREFORE, I SEE NO REASON TO INTERFERE IN THE ORDER OF THE CIT(A) . ACCORDINGLY, I CONFIRM T HE ORDER OF THE LEARNED CIT(A) . 9 . IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF DEC. 2012. 2012 SD/ - ( ) ( R.K.GU PTA ) / JUDICIAL MEMBER MUMBAI ; DATED : 12 /12 / 2012 . ITA NO. 3013 /20 1 2 4 /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) - X, MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( DY./ASSTT. REGISTRAR) / ITAT, MUMBAI