DCIT CEN CIR 23, MUMBAI V. NEW DIMENSION CONSULTANTS P. LTD, MUMBAI

ITA 3414/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92289 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-04-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 28-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revenue expenditure

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO.3414/MUM/2011 ASSESSMENT YEAR: 2008-09 ACIT CENTRAL CIRCLE-23, ROOM NO.464, 4 TH FLOOR, AAYAKAR BHAVAN, M.K.MARG, MUMBAI-400020 / VS. M/S NEW DIMENSION CONSULTANTS P. LTD. INTERNATIONAL BUSINESS PARK, OBEROI GARDEN CITY, OFF. W.E. HIGHWAY, GOREGAON (EAST), MUMBAI-400063 ( / REVENUE) ( '#$% & /ASSESSEE) P.A. NO. AAACN9155A / REVENUE BY SHRI VIJAY KUMAR BORA-DR '#$% & / ASSESSEE BY SHRI R. MURALIDHAR ' ( ) & * / DATE OF HEARING 06/04/2015 ) & * / DATE OF ORDER: 06/04/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 22/02/2011 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI, M/S NEW DIMENSION CONSULTANTS P. LTD. 2 ON THE GROUND IN DELETING THE LEGAL EXPENDITURE INC URRED FOR ACQUISITION OF IMMOVABLE PROPERTY AND FURTHER TREAT ING THE SAME AS REVENUE EXPENDITURE AGAINST CAPITAL EXPENDI TURE OPINED BY THE ASSESSING OFFICER. 2. DURING HEARING OF THIS APPEAL, THE LD. DR, SHRI VIJAY KUMAR BORA, STRONGLY DEFENDED THE ASSESSMENT ORDER BY CONTENDING THAT THE LEGAL AND PROFESSIONAL FEE A MOUNTING TO RS.20,16,358/- WAS RIGHTLY TREATED AS CAPITAL IN NATURE AND THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WI THOUT APPRECIATING THE FACTS WRONGLY TREATED THE SAME AS OF REVENUE IN NATURE. IT WAS FURTHER CONTENDED THAT S UCH LEGAL EXPENSES INCURRED FOR ACQUISITION OF PROPERTY ARE O F CAPITAL IN NATURE. ON THE OTHER HAND, THE LD. COUNSEL FOR T HE ASSESSEE, SHRI R. MURALIDHAR, DEFENDED THE CONCLUSI ON ARRIVED AT IN THE IMPUGNED ORDER. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE C OMING TO ANY CONCLUSION, WE ARE REPRODUCING HEREUNDER THE BR EAK-UP OF LEGAL EXPENSES, INCURRED BY THE ASSESSEE, AMOUNT ING TO RS.20,16,358/- FOR READY REFERENCE AND ANALYSIS:- SL. NO. NAME OF PROFESSIONAL/ COUNSEL NATURE OF EXPENSES AMOUNT (IN RUPEES.) 1. MR. BIRENDRA SARAF- ADVOCATE FEES FOR SETTLING MEMORANDUM OF APPEAL, CONFERENCES WITH THE REPRESENTATIVES OF THE APPELLANT & SHIVSHAHI SOCIETY, OTHER SENIOR COUNSELS. 2,69,000 M/S NEW DIMENSION CONSULTANTS P. LTD. 3 APPEARANCE IN THE HONBLE BOMBAY HIGH COURT AT VARIOUS HEARING, SETTLING DRAFT SPECIAL LEAVE PETITION (SLP) TO THE HONBLE SUPREME COURT PREPARATION OF OTHER LEGAL DOCUMENTS LIKE AFFIDAVIT, RE- JOINDERS ETC. 2. M/S IC LEGAL FEES FOR DRAFTING MEMORANDUM OF UNDERSTANDING (MOU) CONFERENCES WITH THE REPRESENTATIVES OF THE APPELLANT & SHIVSHAHI SOCIETY & OTHER SENIOR COUNSEL AT VARIOUS OCCASIONS ETC. 3,27,500 3. M/S NAIK, NAIK, LYER & CO. ADVOCATES DRAFTING, FINALIZING AND FILING OF APPEAL, AFFIDAVIT ETC. IN THE HONBLE BOMBAY HIGH COURT, APPEARANCES IN THE HONBLE BOMBAY HIGH COURT AT VARIOUS HEARINGS, CONFERENCES AT VARIOUS OCCASIONS, INSPECTIONS CHARGES, DOCUMENTATION CHARGES, DRAFTING FINALIZING & FILING REJOINDER, FOLLOW-UP, MISCELLANEOUS EXPENSES ETC. 4,80,000 4. MR. J.J. BHAT SENOIR COUNSEL APPEARANCES IN THE HONBLE BOMBAY HIGH COURT AT VARIOUS HEARING, CONFERENCES AT VARIOUS OCCASIONS ETC. 6,50,000 5. MR. S.U. KAMDAR APPEARANCES IN THE HONBLE BOMBAY HIGH COURT AT VARIOUS HEARING 60,000 6. MR. RAVI KADAM APPEARANCES IN THE HONBLE BOMBAY HIGH COURT AT VARIOUS HEARING 1,05,000 MR. SHYAM DIVAN APPEARANCES IN THE HONBLE BOMBAY HIGH COURT AND HONBLE SUPREME COURT AT VARIOUS HEARING 70,000 7. MR. VINEET B. NAIK APPEARANCES IN THE HONBLE BOMBAY HIGH COURT AT VARIOUS HEARING 51,000 8. OTHER MISCELLANEOUS CHARGES : FOR LEGAL DOCUMENTATIONS, RELATED EXPENSES 3,858 TOTAL 20,16,358 2.2. IF THE AFOREMENTIONED DETAILS OF EXPENSES ARE ANALYZED, WE FOUND THAT THE AMOUNTS WERE INCURRED O N M/S NEW DIMENSION CONSULTANTS P. LTD. 4 VARIOUS OCCASIONS FOR THE PURPOSES MENTIONED IN THE CHART MEANING THEREBY THESE ARE LEGAL AND PROFESSIONAL EX PENSES MOSTLY MADE TO ADVOCATES/PROFESSIONALS FOR LEGAL DOCUMENTATION AND OTHER RELATED PURPOSES, LIKE DRAF TING OF MOU, SLP, APPEALS, CONFERENCES, DISCUSSION AND APPEARANCES BEFORE THE HONBLE COURTS. EVEN THE LD. ASSESSING OFFICER HAS NOT DISPUTED THAT THE IMPUGNE D EXPENSES WERE INCURRED. AS A DEVELOPER, THE ASSESS EE MADE EFFORTS FOR ACQUISITION OF VARIOUS PROPERTIES AND S OME OF THE EFFORTS YIELDED POSITIVE RESULTS, WHEREAS IN SOME I NSTANCES, THE EFFORTS COULD NOT GET THE DESIRED RESULTS. HOW EVER, THE FACT REMAINS THAT EXPENSES WERE INCURRED AND THE SA ME WERE DEPICTED IN THE PROFIT AND LOSS ACCOUNT. THE EXPENSES WERE INCURRED TO SAFEGUARD THE BUSINESS INTEREST I. E. INCURRED FOR BUSINESS PURPOSES. THERE IS UNCONTROVE RTED FINDING IN PARA 4.4 OF THE IMPUGNED ORDER THAT IDEN TICAL PAYMENTS WERE ALLOWED BY THE DEPARTMENT ITSELF FOR BUSINESS PURPOSES. SINCE THE EXPENSES WERE INCURRED WHOLLY A ND EXCLUSIVELY FOR BUSINESS PURPOSES, THEREFORE, THESE EXPENSES WERE RIGHTLY TREATED AS REVENUE EXPENSES, CONSEQUEN TLY, WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LD . COMMISSIONER OF INCOME TAX (APPEALS), MORE SPECIFIC ALLY WHEN NO ADVERSE MATERIAL WAS BROUGHT ON RECORD BY T HE REVENUE IN SUPPORT OF ITS CLAIM. THE STAND OF THE L D. COMMISSIONER OF INCOME TAX (APPEALS) IS AFFIRMED. FINALLY, THE APPEAL OF THE REVENUE IS HAVING NO MER IT, THEREFORE, DISMISSED. M/S NEW DIMENSION CONSULTANTS P. LTD. 5 THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 06/04/2015. +, ) -. /'0 06 /0 4 /2015 ) ( 5 SD/- SD/- ( D.KARUNAKARA RAO ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER ( MUMBAI; /' DATED : 06/04/2015 F{X~{T? P.S/. '. . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. 6789 / THE APPELLANT 2. :;89 / THE RESPONDENT. 3. + + <& ( 67 ) / THE CIT, MUMBAI. P4. + + <& / CIT(A)- , MUMBAI 5. >? :&'# , + 67* 6# , ( / DR, ITAT, MUMBAI 6. $ @( / GUARD FILE. / BY ORDER, ;>7& :& //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ( / ITAT, MUMBAI