Smt. Sangeetha jain, Bangalore V. ACIT, Bangalore

ITA 317/BANG/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9459 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2009
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-09-2009
• Assessment Year: 2000-2001
• Appeal Filed On: 11-03-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation; Reasonable cause; Condonation of delay
• Section: 234B; 139(1); 139(4); 148

Judgement Text

PAGE 1 OF 14 ITA NOS. 317 TO 319/BANG/2008 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE SHRI K K GUPTA, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE, K, JUDICIAL MEMBER ITA NOS.317, 318 & 319/BANG/2008 (ASSESSMENT YEARS: 2000-01, 2001-02 & 2003-04) SMT. SANGEETHA JAIN, NO.26, REST HOUSE ROAD, BANGALORE. . APPELLANT VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1(4), BANGALORE. .... RESPONDENT APPELLANT : SHRI V CHANDRASHEKAR RESPONDENT : SMT. JACINTA ZIMIK VASHAI O R D E R PER GEORGE GEORGE K, JM : THESE THREE APPEALS PREFERRED ARE DIRECTED AGAINST THE ORDERS OF THE CIT(A)-VI, BANGALORE FOR THE ASSESSMENT YEARS 2000-01,2001- 02 AND 2003- 04. I. ITA NO:317/B/08: PAGE 2 OF 14 ITA NOS.317 TO 319/BANG/2008 2 2. THE ASSESSEE, AN INDIVIDUAL, HAS RAISED SEVEN GR OUNDS, OUT OF WHICH, GROUND NOS: 1, 2, 6 AND 7 BEING GENERAL AND NOT SPECIF IC AND, THEREFORE, THEY ARE NOT ADJUDICATED. THE REMAINING THREE GROUNDS AGITATED ARE REFORMULATED, IN A CONCISE MANNER, AS UNDER: (I) DISALLOWANCE OF RS.210895/- BEING EXPENDITURE FROM THE CONSOLIDATED P & L ACCOUNT; (II) DENIAL OF LOSS CLAIMED AT RS.507504/- FROM MARUTI ENTERPR ISES; & (III) LEVYING OF INTEREST U/S 234A AND U/S 234B OF THE ACT. II. ITA NO:318/B/08: 3. THE ASSESSEE, HAS RAISED NINE GROUNDS, OUT OF WH ICH, GROUND NOS:1, 2, 8 AND 9 BEING GENERAL AND NOT SPECIFIC, THEY DO N OT QUALIFY FOR ADJUDICATION. THE REMAINING GROUNDS ARE REFORMULA TED, IN A CONCISE MANNER, AS UNDER: (I) DISALLOWANCE OF RS.395570/- BEING EXPENDITURE RELATING TO INTEREST PAID TO OTHER LOANS; (II) DISALLOWANCE OF RS.152761/- BEING DEPRECIATION ON FIXED ASSETS; (III) RESTRICTING THE EXPENSES TOWARDS REAL ESTATE BUSINES S OF RS.24625/- (IV) CONFIRMING THE VALIDITY OF RE-OPENING OF ASSESSMENT U/S 148 OF THE ACT; & (V) LEVYING OF INTEREST U/S 234A AND U/S 234B OF THE ACT. III. ITA NO:319/B/08: PAGE 3 OF 14 ITA NOS.317 TO 319/BANG/2008 3 4. SIMILARLY, THE ASSESSEE HAS RAISED NINE GROUNDS. ON A PERUSAL, GROUND NOS:1, 2, 8 AND 9 BEING GENERAL AND NOT SPECI FIC IN NATURE WHICH, IN OUR CONSIDERED VIEW, DO NOT SURVIVE FOR ADJUDICATIO N. THE REMAINING FIVE GROUNDS AGITATED ARE REFORMULATED, IN A CONCISE MAN NER, AS UNDER: A. DISALLOWANCE OF RS.29372/- BEING EXPENDITURE RELATING TO THE INTEREST PAID ON VEHICLE LOAN; B. DISALLOWANCE OF RS.272130/- IN RESPECT OF EXPENDITURE RE LATING TO INTEREST PAID TO KSFC; C. DISALLOWANCE OF DEPRECIATION CLAIMED ON VEHICLE AT RS.129433/-; D. DISALLOWANCE OF 25% OF EXPENSES CLAIMED FOR EARNING CO MMISSION; & E. LEVYING OF INTEREST U/S 234A AND 234B OF THE ACT. 4.1 SUBSEQUENTLY, THE ASSESSEE HAD FURNISHED AN APP LICATION FOR CONDONATION OF DELAY IN PREFERRING THESE APPEALS U/ S 5 OF THE LIMITATION ACT, 1963 ALONG WITH AN AFFIDAVIT IN ORIGINAL, IN WHICH, TH E ASSESSEE HAD SUBMITTED, THE RELEVANT PORTION OF WHICH ARE EXTRACTED AS UNDER 3. THE ORDER OF THE FIRST APPELLATE AUTHORITY WAS R ECEIVED, COLLECTED AND SAME WAS GIVEN TO THE ACCOUNTANT OF THE APPELLA NT. THE SAID ACCOUNTANT HAD MISPLACED THE ENTIRE FILE RELATING T O THE ASSESSMENT YEARS WHICH ARE ON APPEAL. AS THE SAID FILES COULD BE TRACED ONLY ON 10.3.2008 AND AFTER LEARNING THAT THERE IS A DELAY OF 11 DAYS IN FILING THE SAME WAS FILED THE VERY NEXT DAY OF TRACING THE FILE; 4. IN VIEW OF THE ABOVE THE APPELLANT COULD NOT FILE THE APPEAL BEFORE THIS HONBLE TRIBUNAL WELL IN TIME AND BY THE TIME THE APPELLANT TRACED THE FILE, ARISE 11 DAYS DELAY TO FILE APPEAL BEFORE THE HONBLE TRIBUNAL. 5. IT IS OUR HUMBLE REQUEST THE HONBLE BENCH TAKES A LENIENT AND COMPASSIONATE VIEW AND CONDONE THE DELAY OF 11 DAYS IN FILING THE APPEAL BEFORE THIS HONBLE BENCH AND HEAR THE SAME O N MERITS FOR THE ADVANCEMENT OF SUBSTANTIAL CAUSE OF JUSTICE; 6.. PAGE 4 OF 14 ITA NOS.317 TO 319/BANG/2008 4 4.2 THE ASSESSEES APPLICATION WAS PLACED BEFORE THI S BENCH FOR CONSIDERATION. AFTER DUE CONSIDERATION OF THE ASSE SSEES PLEA, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE WAS PREVENTED BY A REASONABLE CAUSE IN NOT PREFERRING THESE APPEALS WITHIN THE TIME STIPUL ATED UNDER THE ACT. THE DELAY OF ELEVEN DAYS WAS CONDONED AND THE REGISTRY WAS DIRECTED TO TAKE THESE APPEALS ON RECORD AND PLACE THEM FOR ADJUDICA TION. 4.3 AS THE ISSUES RAISED IN THESE APPEALS ARE INTER- LINKED, THEY ARE TAKEN UP FOR CONSIDERATION TOGETHER AND DISPOSED OFF IN T HIS COMMON ORDER, FOR THE SAKE OF CONVENIENCE. I . ITA NO: 317 /B/08 -- A.Y 2000-01 : 5. IN THE FIRST EFFECTIVE GROUND, THE ASSESSEE HAD AGITATED TO THE DISALLOWANCE OF RS.210895/- BEING EXPENDITURE FROM THE CO NSOLIDATED P & L ACCOUNT. THE AOS VERSION WAS THAT EVEN AFTER ARRI VING AT A NET PROFIT OF RS.8.57 LAKHS FROM MARUTHI BUSINESS CENTRE AND LOSS OF RS.5.07 LAKHS FROM MARUTHI ENTERPRISES, THE ASSESSEE HAD CLAIMED A FUR THER EXPENDITURE OF RS.2,25,297/- BY PREPARING ANOTHER P & L ACCOUNT SO AS TO BRING THE PROFIT FURTHER DOWN TO RS.1.25 LAKHS WHICH WAS NOT SUPPORTED BY ANY BOOKS OF ACCOUNT AND OTHER RELEVANT SUPPORTING DOCUMENTS. T HUS, THE EXPENDITURE OF RS.2.25 LAKHS WAS DISALLOWED BY THE AO. 5.1 WHEN THE MATTER WENT BEFORE THE CIT(A) FOR REDRE SSAL, AFTER CONSIDERING THE ASSESSEES CONTENTION, THE CIT(A) HAD OBSERVED THUS GROUND NO.3:..OBVIOUSLY THE APPELLANT HAD THREE P ROFIT AND LOSS ACCOUNT VIZ., (A) ONE FOR M/S.MARUTI BUSINESS CENTRE , (B) ONE FOR PAGE 5 OF 14 ITA NOS.317 TO 319/BANG/2008 5 M/S.MARUTI ENTERPRISES AND (C) ANOTHER CONSOLIDATIN G THE ABOVE TWO. IN THE CONSOLIDATED P & L ACCOUNT, HE (SIC) SHE CLAIME D FURTHER EXPENDITURE OF RS.210895 [INTEREST PAID, BANK CHARGES, AUDIT FEE, IN TEREST ON VEHICLE LOAN, DEPRECIATION ETC]. IT IS SUBMITTED BY THE AUTHORISED REPRESENTATIVE THAT THE EXPENSES ARE NOT DIRECTLY CO NNECTED ETHER WITH MARUTHI BUSINESS OR WITH MARUTI ENTERPRISES, BU T, ARE INCURRED BY THE ASSESSEE TOWARDS THE BUSINESS AS A WHOLE. IT MAY BE MENTIONED THAT NEITHER AT ASSESSMENTS STAGE NOR AT APPELLATE STAGE THE DETAILS OF THE ABOVE AND THE RELATED BUSINESS COULD BE FURNISHED TO EXAMINE THE LIVE LINK BETWEEN THE CLAIM OF EXPENDITUR E AND THE SO CALLED BUSINESS AS A WHOLE. IN VIEW OF THE ABOVE THIS G ROUND IS DISMISSED. 5.2 DURING THE COURSE OF HEARING, THE LD. A R REITER ATED WHAT HAS BEEN CONTENTED BEFORE THE LOWER AUTHORITIES. EVEN BY PE RUSING THE PAPER BOOK FURNISHED BY THE LD.A.R, WE COULD NOT FIND ANY TANG IBLE EVIDENCE TO SUBSTANTIATE THE ASSESSEES CLAIM. WE ARE, THEREFO RE, OF THE CONSIDERED VIEW THAT THE CIT (A) WAS FULLY JUSTIFIED IN HIS FI NDING WHICH REQUIRES NO INTERFERENCE AT THIS STAGE. IT IS ORDERED ACCORDIN GLY. 6. THE NEXT EFFECTIVE GROUND IS WITH REGARD TO THE DENIAL OF LOSS CLAIMED AT RS.507504/- FROM MARUTI ENTERPRISES. THE ASSESSEE WAS A PROPRIETRIX OF THIS CONCERN WHERE A HOTEL IN THE NAME OF HAVEL I WAS RUN. AS PER THE P & L ACCOUNT, A LOSS OF RS.5.07 LAKHS WAS ARRIVED AT. THE ASSESSEE HAD CLAIMED A TOTAL EXPENDITURE OF RS.687504 AGAINST THE RENT AL RECEIPT OF RS.1.5 LAKHS AND THUS ARRIVED AT A LOSS OF RS.5.07 LAKH S. IN THE ABSENCE OF ANY BOOKS OF ACCOUNT AND OTHER DETAILS AS SOUGHT FO R VERIFICATION, THE AO HAD REJECTED THE LOSS CLAIM OF RS.507504/-. 6.1 BEFORE THE CIT(A), IT WAS CONTENDED THAT SHE HAD INCURRED EXPENDITURE OF RS.687504/ AS DETAILED BELOW: (A) BANK CHARGES RS. 372 (B) ELECTRICITY CHARGES RS. 49587 PAGE 6 OF 14 ITA NOS.317 TO 319/BANG/2008 6 (C) INTEREST ON KSFC LOAN RS. 403982 (D) INSURANCE PREMIUM PAID THROUGH KSFC RS. 11563 (E) REPAIRS AND MAINTENANCE RS. 222000 WHICH RELATE TO M/S.MARUTHI ENTERPRISES TO EARN INC OME FROM LEASE RENT OF THE PREMISES TO MULTINATIONAL COMPANIES. IN THE AB SENCE OF ANY LEASE DEED, THE CIT (A) WAS OF THE VIEW THAT THE RECEIPT CLAIME D BY THE ASSESSEE AT STAKE. AFTER SCREENING THE PAPERS FURNISHED DURING THE APPELLATE STAGE WITH REGARD TO THE CLAIM OF EXPENDITURE, THE CIT(A) OPIN ED THAT THEY PERTAIN TO M/S.HAVELI AND NOT TO M/S.MARUTI ENTERPRISES. THE INTEREST ALLEGED TO HAVE BEEN PAID TO THE LOAN AVAILED FROM KSFC WAS NOT BY MARUTI ENTERPRISES, BUT, BY HOTEL HAVALI ON 23.10.1996 AMOUNTING TO RS.23.85 LAKHS. IN CONCLUSION, HE ASSERTED THAT THE EXPENSES CLAIMED WERE NOT PERTAINE D TO MARUTI ENTERPRISES AND, THUS, DISMISSED THE ASSESSEES CLA IM IN TOTO. 6.2 BEFORE US ALSO, THE ASSESSEE COULD NOT SUBSTANTIA TE HER CLAIM WITH ANY TANGIBLE EVIDENCE. WE HAVE DULY PERUSED THE BALANCE SHEETS, P & L ACCOUNTS ETC. [PAGES 11 - 21 OF PAPER BOOK], WHICH, IN OUR CO NSIDERED VIEW, CANNOT, IN ANY WAY, COME TO THE RESCUE OF THE ASSESSEE. IN VI EW OF THE MATTER, WE ARE IN TOTAL AGREEMENT WITH THE FIRST APPELLATE AUTHORI TY. THUS, THE ASSESSEE FAILS ON THIS COUNT. 7. THE LAST GROUND IS LEVY OF INTEREST U/S 234A AND 234B WH ICH ARE MANDATORY AND CONSEQUENTIAL IN NATURE. THUS, THIS GROUND IS DISMISSED AS NOT MAINTAINABLE. II. ITA NO: 318 /B/08 A.Y 2001-02 : 8. THE FIRST EFFECTIVE GROUND IS WITH REGARD TO DISALLOWANCE OF RS.395570/- BEING EXPENDITURE RELATING TO INTEREST PAID TO OTHER LOANS. ON PAGE 7 OF 14 ITA NOS.317 TO 319/BANG/2008 7 A PERUSAL OF THE IMPUGNED ORDER OF THE LD.CIT (A), WE FIND THAT THE ASSESSEE HAD FURNISHED A COPY OF THE ACCOUNT OF KAR NATAKA STATE FINANCIAL CORPORATION, BANGALORE. ACCORDING TO THIS DOCUMENT, KSFC HAD GIVEN TERM LOAN ON 29/10/1996 AMOUNTING TO RS.23.85 LAKHS TO M/S.HOTEL HAVELLI WHICH, ACCORDING TO THE ASSESSEE, WAS CLOSED IN OCTOBER 1998. THEREFORE, THE CIT(A) WAS OF THE VIEW THAT THERE WAS NO NEXUS BETWE EN THE EXPENDITURE AND DEPRECIATION CLAIMED BY THE ASSESSEE AND HER BU SINESS OF SUB- LEASING/LEASING/PROPERTY DEALING AND, THEREFORE, SU STAINED THE ACTION OF THE AO IN DISALLOWING THE EXPENDITURE CLAIMED ON DEPREC IATION AND INTEREST PAYMENT TO KSFC. 8.1 THE STAND OF THE CIT(A) WAS VEHEMENTLY CONTESTED BY THE LD. A.R. HOWEVER, ON THE OTHER HAND, THE LD.D.R HAD FURNISHE D A COPY OF DEMAND NOTICE DATED 24/2/2003 (THOUGH IT PERTAINS TO THE AY 2003-04), WE FIND THAT THE NAME AND ADDRESS OF THE UNIT/PROMOTER WAS HOTEL HAVELI AND NOT IN THE NAME OF THE ASSESSEE AS CLAIMED. AS RIG HTLY POINTED OUT BY THE LOWER AUTHORITIES, THERE CANNOT BE ANY NEXUS BETWEEN THE INTEREST PAYMENTS ON LOANS AND THE BUSINESS OF THE ASSESSEE. THUS, W E ARE DECLINED TO ENTERTAIN THE ARGUMENT OF THE ASSESSEE ON THIS COUN T. THE FIRST APPELLATE AUTHORITY WAS JUSTIFIED IN DISALLOWING THIS CLAIM O F ASSESSEE WHICH, IN OUR CONSIDERED VIEW, DOESNT REQUIRE OUR INTERFERENCE A T THIS STAGE. IT IS ORDERED ACCORDINGLY. 9. THE SECOND EFFECTIVE GROUND IS IN RESPECT OF DISALLOWANCE OF RS.152761/- BEING DEPRECIATION ON FIXED ASSETS. IN THE ABSENCE OF ANY DETAILS OF RELEVANT ASSETS AND LIABILITIES, THE AO DISALLOWED THE CLAIM OF THE ASSESSEE AS NOT JUSTIFIED. EVEN ON APPEAL, THE CIT( A) WAS ALSO OF THE SIMILAR VIEW THAT IN THE ABSENCE OF THE COPY OF THE LEASE D EED WHEREBY SHE HAD PAGE 8 OF 14 ITA NOS.317 TO 319/BANG/2008 8 PURPORTED TO HAVE TAKEN THE PROPERTY ON LEASE FROM HER CHILDREN, THE LOWER AUTHORITIES WERE RATHER HANDICAPPED TO ARRIVE AT A CONCLUSION WHETHER THE PROPERTY TAKEN ON LEASE WAS SUB-LET TO BIRLA 3M LTD W ITH INFRASTRUCTURE ETC. 9.1 IN THE INTEREST OF JUSTICE AND EQUITY, WE ARE OF THE UNANIMOUS VIEW THAT THIS ISSUE SHOULD BE REMANDED BACK ON THE FILE OF THE AO WITH A SPECIFIC DIRECTION TO LOOK INTO ALL THESE ASPECTS I N A COMPREHENSIVE MANNER AND TO DECIDE THE ISSUE IN ACCORDANCE WITH THE LAW WHILE KEEPING IN VIEW THE LEGAL PRECEDENTS. IN THE MEANWHILE, THE ASSESSEE, THROUGH HER A.R, IS ADVISED TO FURNISH ALL THE REQUIRED MATERIALS SUCH AS COPIES OF LEASE AGREEMENTS AS MENTIONED SUPRA WHICH WOULD FACILITAT E THE AO TO FINALIZE THE ISSUE IN AN EXPEDITIOUS MANNER. IT IS ORDERED ACCOR DINGLY. 10. THE THIRD EFFECTIVE GROUND REVOLVES AROUND THE R ESTRICTING THE EXPENSES TOWARDS REAL ESTATE BUSINESS OF RS.24625/-. EVE N AT THIS POINT OF TIME ALSO, THE ASSESSEE HAD NOT BROUGHT ON RECORD A NY COHESIVE EVIDENCE TO JUSTIFY HER CLAIM THAT SHE GOT A COMMISSION TO THE EXTENT OF RS.98000/-. THE MERE ASSERTION OF THE LD.A R THAT THE ASSESSEE HAD EARNED INCOME OUT OF ESTATE AGENCY ACTIVITY DOESNT CARRY ANY CONVICT ION OR WEIGHT-AGE WITHOUT ANY DOCUMENTARY EVIDENCE TO THE CONTRARY. IN VIEW OF THE ABOVE, WE HAVE NO RESERVATION IN UPHOLDING THE ACTION OF THE LOWER AU THORITIES. THE ASSESSEE FAILS ON THIS COUNT. 11. THE FOURTH GROUND IS WITH REGARD TO CONFIRMING THE VALIDITY OF RE- OPENING OF ASSESSMENT U/S 148 OF THE ACT BY THE CIT( A). THE REASONING FOR THE CIT(A)S STAND WAS THAT GROUND NO.2.IN THIS CASE, THOUGH THE APPELLANT HAS TAXABLE INCOME, SHE DID NOT FILE THE RETURN IN TIME EITHER U/S 139(1) OR 139(4) OF THE I.T.ACT. THE RELEVANT ASSESSMENT YEARS WAS 2001-02. SO SHE HAD PAGE 9 OF 14 ITA NOS.317 TO 319/BANG/2008 9 TIME UPTO 31.3.2003 TO FILE THE RETURN OF INCOME. THE AP PELLANT FILED THE RETURN ON 30.9.2003 DECLARING INCOME OF RS.115138/-. THUS, T HE RETURN FILED BY HER WAS A NON-EST RETURN WHICH ITSELF DEMO NSTRATE THAT INCOME HAD ESCAPED ON THE DATE OF ISSUANCE OF NOTICE U/S 1 48 OF THE I.T.ACT I.E., ON 13/8/2004. THE AO BEING SATISFIED ABOUT THE NON-EST N ATURE OF RETURNED INCOME AND CONSEQUENTIAL ESCAPEMENT OF INC OME HAD ISSUED THE NOTICE U/S 148 OF THE I.T.ACT. I CONSIDER THE ACTION OF AO JUSTIFIED AND CORRECT AS PER LAW AND ON THE FACTS OF THE CASE.. 11.1 DURING THE COURSE OF HEARING, THE LD.A.R HAD NOT BROUGHT ANY TANGIBLE REASONING TO OBJECT TO THE STAND OF THE CIT(A) IN U PHOLDING THE ACTION OF THE AO IN REOPENING THE ASSESSMENT U/S 148 OF THE ACT. 11.2 WE HAVE DULY CONSIDERED THE RELEVANT RECORDS. THOUGH THE ASSESSEE HAS NOW BEEN CHALLENGING THE REOPENING OF THE ASSE SSMENT, HER AUTHORISED REPRESENTATIVE HAD APPEARED THE HEARINGS ON 11 TH AND AGAIN ON 24.11.2005 AND HAD FURNISHED CERTAIN DETAILS IN RESPONSE TO QU ESTIONNAIRE WHICH GOES TO PROVE THAT THE ASSESSEE HAD CONCEDED THE ACTION OF THE AO IN REOPENING THE ASSESSMENT IN QUESTION AND HAD INDEED CO-OPERAT ED IN FINALIZATION OF THE ASSESSMENT PROCEEDINGS. IN VIEW OF THE ABOVE AND A LSO NO VALID REASON HAS BEEN BROUGHT ON RECORD TO QUESTION THE VERY VALIDIT Y OF REOPENING OF THE ASSESSMENT, WE FIND NO REASON TO INTERFERE WITH THE STAND OF THE LOWER AUTHORITIES. IT IS ORDERED ACCORDINGLY. 12. THE LAST GROUND IS LEVY OF INTEREST U/S 234A AND 234B W HICH ARE MANDATORY AND CONSEQUENTIAL IN NATURE. THUS, THIS GROUND IS DISMISSED AS NOT MAINTAINABLE. III. ITA NO:319/B/08 A.Y 2003-04: PAGE 10 OF 14 ITA NOS.317 TO 319/BANG/2008 10 13. THE ASSESSEE DERIVED INCOME FROM HOUSE PROPERTY, BUSINESS AND OTHER SOURCES. SHE HAD SHOWN RECEIPT OF LEASE RENT OF RS .2.25 LAKHS AND COMMISSION OF RS.72500/-, OUT OF WHICH, THE FOLLOWING EXPENSES WERE CLAIMED: BANK CHARGES RS. 125 INTEREST ON VEHICLE LOAN 29372 INTEREST PAID TO KSFC 272130 DEPRECIATION ON VEHICLE 129433 RS.432186 ON THE QUERIES OF THE AO TO EXPLAIN AS TO HOW THE CL AIM FOR SUCH EXPENDITURE WAS JUSTIFIABLE AGAINST THE LEASE RENT A ND ALLEGED COMMISSION RECEIPT, THE ASSESSEES RESPONSE WAS THAT SHE HAD N OT MAINTAINED ANY BOOKS OF ACCOUNT, THAT SHE HAD TAKEN THE PROPERTY ON LEAS E FROM HER CHILDREN WHICH WAS SUB-LET TO M/S.RELIANCE INFOCOMM LTD. AND THAT SHE HAD EARNED COMMISSION OUT OF SEVERAL DEALS STRUCK DURING THE P REVIOUS YEAR UNDER DISPUTE. HOWEVER, IN THE ABSENCE OF ANY SUPPORTI NG DOCUMENTS OR VOUCHERS OR BOOKS OF ACCOUNT AND ANY OTHER SPECIFIC DETAILS, THE ASSESSEE WAS REQUIRED BY THE AO TO SHOW-CAUSE AS TO WHY THE LOSS CLAIMED IN THE COMPUTATION OF BUSINESS PROFIT SHOULD NOT BE REWORK ED BY RESTRICTING THE EXPENSES ON A REALISTIC BASIS. AS THERE WAS NO COMP LIANCE FROM THE ASSESSEE, THE AO WENT AHEAD WITH THE FINALIZATION O F THE ASSESSMENT. OUT OF THE GROSS RECEIPTS OF RS.297500 [LEASE RENT RECEIPT O F RS. 225000 + 72500/- BEING ALLEGED COMMISSION RECEIPT], HE HAD ALLOW ED BANK CHARGES OF RS.125 AND 25% ON COMMISSION OF 72500/- AGGREGATING TO RS.182 50, AND THE BALANCE OF RS.279250 WAS BROUGHT ON THE TAX NET. 13.1 AGGRIEVED, THE ASSESSEE HAD APPROACHED THE LD.C IT (A) FOR REDRESSAL. AFTER CONSIDERING THE CONTENTIONS OF THE ASSESSEE, THE LD.CIT (A) HAD PAGE 11 OF 14 ITA NOS.317 TO 319/BANG/2008 11 VIRTUALLY DISMISSED THE APPEAL IN TOTO. THE RELEVA NT PORTIONS OF THE FINDINGS OF THE CIT (A) ARE SUMMARIZED AS UNDER: INTEREST ON LOAN : (I) NO COPY OF LEASE DEED WHEREBY THE ASSESSEE CLAIMED TO HAVE TAKEN THE PROPERTY ON LEASE FROM HER CHILDREN WAS P RODUCED EITHER BEFORE THE AO OR DURING THE APPELLATE STAGE; (II) EVEN THE LEASE DEED THROUGH WHICH THE PROPERTY ALON G WITH FURNITURE HAD BEEN LEASED OUT TO M/S.RELIANCE INFOC OMM LTD WAS NOT PRODUCED; (III) THE ENCLOSURES FURNISHED ALONG WITH THE WRITTEN SUB MISSION DO NOT SUBSTANTIATE THE CLAIM OF THE EXPENDITURE; (IV) WITH REGARD TO KSFC LOAN, THE ASSESSEE HAD FILED A COPY OF THE A/C NO:13210071 OF KSFC WHICH WAS A DEMAND NOTICE FOR PAYMENT OF INTEREST OF RS.272130/-. HOWEVER, THE DEMAND NOTICE DOES NOT CONTAIN THE NAME OF THE ASSESSEE, B UT, HOWEVER, SHOWS THE DEMAND ON M/S.HOTEL HAAVELI WHICH THE ASS ESSEE CLAIMED TO HAVE CLOSED IN OCTOBER, 1998; & (V) AS THERE WAS NO LIVE NEXUS BETWEEN THE BUSINESS RUN AND THE EXPENDITURE CLAIMED BY THE ASSESSEE. INTEREST ON VEHICLE LOAN AND DEPRECIATION ON FIXED A SSETS : (I) THE DOCUMENT PRODUCED UNDER THE CAPTION CONTRACT REPAYMENT SCHEDULE REPORT OF FORD CREDIT INDIA DOE S NOT PROVE THAT RS.29732/- WAS ACTUALLY PAID BY THE ASSESSEE. THE DOCUMENT SHOWS THAT THE VEHICLE WAS PURCHASED THROU GH HIRE PURCHASE AGREEMENT (HPA). AS PER HPA, THE OWNERSHI P DOES NOT VEST WITH THE PURCHASER UNLESS THE LAST INSTALL MENT WAS PAID WHICH WAS DUE ONLY BY 3.6.2005; (II) NO RC BOOK WAS PRODUCED AND NO PROOF OF USE OF THE VEHICLE FOR BUSINESS EARNING WAS MADE AVAILABLE DURING THE APPE LLATE PROCEEDINGS; (III) FOR THE CLAIM OF DEPRECIATION, U/S 32(1) OF THE ACT, THE OWNERSHIP AS WELL AS THE USE OF THE ASSET IN THE CO URSE OF BUSINESS NEEDS TO BE PROVED. HERE THE OWNERSHIP WA S NOT PROVED. COMMISSION RECEIP T : PAGE 12 OF 14 ITA NOS.317 TO 319/BANG/2008 12 (I) NO PROOF WAS PRODUCED EVEN AT THE APPELLATE STAGE A S TO WHEREFROM THE ASSESSEE GOT THE COMMISSION OR ANY RE LEVANT BOOKS OR BANK BOOK WHEREIN THESE RECEIPTS FIND A PL ACE. 13.2 AGGRIEVED, THE ASSESSEE HAS COME UP WITH THE PR ESENT APPEAL. (1) DISALLOWANCE OF RS.29372/- BEING EXPENDITURE RELATING TO THE INTEREST PAID ON VEHICLE LOAN & DISALLOWANCE OF DEPRECIATIO N CLAIMED ON VEHICLE AT RS.129433 EVEN AT THIS STAGE, NO DOCUMENTARY EVIDENCE HAS B EEN ADDUCED TO SUBSTANTIATE THAT THE ASSESSEE HAD INCURRED THE ABO VE EXPENDITURE BEING INTEREST PAID ON VEHICLE LOAN. AS RIGHTLY HIGHLIGH TED BY THE CIT (A), NO RC BOOK HAS BEEN PRODUCED TO SHOW THAT THE ASSESSEE HAD OWNED A VEHICLE. IN VIEW OF THE ABOVE, WE ARE IN TOTAL AGREEMENT WITH T HE FINDING OF THE CIT (A) ON THIS COUNT. SINCE THE ASSESSEE HAD FAILED TO PR OVE THAT SHE OWNED A VEHICLE, THE QUESTION OF ALLOWING DEPRECIATION FOR A NON-EXISTING VEHICLE DOES NOT ARISE. (2) D ISALLOWANCE OF RS.272130/- IN RESPECT OF EXPENDITURE REL ATING TO INTEREST PAID TO KSFC : NO PROOF IS FORTH-COMING FROM THE ASSESSEE-SIDE. HOWEVER, THE LD. D R HAD PRODUCED, DURING THE COURSE OF HEARING, A COP Y OF DEMAND NOTICE ISSUED BY KSFC TO HOTEL HAVELI. WE HAVE PERUSED TH E SAME. AS POINTED OUT BY THE CIT(A), WE FIND THAT THE DEMAND NOTICE WAS M EANT FOR HOTEL HAVELI AND NO EVIDENCE WAS FORTH-COMING TO SUGGEST THAT HO W THIS DEMAND NOTICE HAD CORRELATED WITH PRESENT THE ASSESSEE. THUS, WE FALL IN LINE WITH THE CIT (A) IN CONFIRMING THIS ADDITION. 3. DISALLOWANCE OF 25% OF EXPENSES CLAIMED FOR EARNI NG COMMISSION : PAGE 13 OF 14 ITA NOS.317 TO 319/BANG/2008 13 NO DOCUMENTARY EVIDENCE WORTH THE NAME HAS BEEN BROUGHT ON RECORD EVEN AT THIS STAGE TO SUGGEST THAT THAT THE ASSESSE E PURPORTED TO HAVE EARNED THIS COMMISSION OUT OF SEVERAL DEALS STRUCK DURING THE YEAR UNDER DISPUTE. SHE HAD MISERABLY FAILED TO SHOW EVEN A S INGLE DEAL WHICH SHE PURPORTED TO HAVE HANDLED. IN THE ABSENCE OF ANY S ORT OF PROOF, WE ARE UNABLE TO CONCEDE TO HER REQUEST. WE, THEREFORE, UPHOLD THE ACTION OF LOWER AUTHORITIES ON THIS COUNT. 13.3 ON A PERUSAL OF THE IMPUGNED ORDER OF THE AO, W E FIND THAT THE ENTIRE GROSS RECEIPTS OF RS.2,79,250/- [AFTER SETTING OFF OF BANK CHARGES + 25% COMMISSION RECEIPTS] HAS BEEN BROUGHT ON TAX NET B Y THE AO, IN THE ABSENCE OF ANY PROOF. EVEN AT THE APPELLATE STAG E, THE ASSESSEES REQUEST WAS TURNED DOWN BY THE CIT(A) ON THE GROUND THAT CO PY OF LEASE DEED WHEREBY THE ASSESSEE HAD TAKEN THE PROPERTY ON LEAS E FROM HER CHILDREN WAS NOT PRODUCED FOR HIS CONSIDERATION. DURING THE COURSE OF HEARING BEFORE US, THE LD.A.R FURNISHED A PAPER BOOK CONTAINING 1 57 PAGES WHICH CONSIST OF, INTER ALIA, COPIES OF (I) AGREEMENT OF LEASE DA TED 31.3.1994 BETWEEN THE MINOR CHILDREN OF THE ASSESSEE AND HERSELF AND (II) AGREEMENT OF LEASE DATED 21.9.1994 BETWEEN M/S.MARUTHI BUSINESS CENTRE AND M/S.BIRLA 3M LTD. ETC., IN THE INTEREST OF JUSTICE AND EQUITY, WE ARE OF THE UNANIMOUS VIEW THAT THIS ISSUE SHOULD BE REMANDED BACK ON THE FILE OF THE AO WITH A SPECIFIC DIRECTION TO LOOK INTO THIS ASPECT WITH RE FERENCE TO THE NEW EVIDENCE WHICH WAS NOT BEFORE HIM WHEN THE ASSESSME NT WAS CONCLUDED AND TO TAKE APPROPRIATE ACTION IN ACCORDANCE WITH LAW A FTER AFFORDING A REASONABLE OPPORTUNITY TO THE ASSESSEE OF BEING HEA RD. IN THE MEANWHILE, THE ASSESSEE, THROUGH HER A.R., IS ADVISED TO FURNI SH THE COPIES OF THE AGREEMENT OF LEASE DEED DATED: 31.3.1994 AND 21.9.1994 AND OTHER RELEVANT PAGE 14 OF 14 ITA NOS.317 TO 319/BANG/2008 14 MATERIALS IN HER POSSESSION WHICH WOULD FACILITATE THE AO TO FINALIZE THE ISSUE IN AN EXPEDITIOUS MANNER. IT IS ORDERED ACCOR DINGLY. 14. LEVYING OF INTEREST U/S 234A AND 234B OF THE ACT ARE MA NDATORY AND CONSEQUENTIAL IN NATURE. THIS GROUND, IS, THEREFOR E, DISMISSED AS NOT MAINTAINABLE. 15. IN THE RESULT - (I) THE ASSESSEES APPEAL FOR THE AY 2000-01 IS DISMISSED . (II) THE ASSESSEES APPEAL FOR THE AY 2001-02 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES ; & (III) THE ASSESSEES APPEAL FOR THE AY 2003-04 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 25TH SEPTEMBER, 2009. SD/- SD/- (K K GUPTA) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE: D A T E D :25TH SEPTEMBER, 2009. COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR, ITAT, BANGALORE. 6 GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRA R, ITAT, BANGALORE. MSP/23/9/