S.V. BUSINESS P. LTD, MUMBAI V. ASST CIT CEN CIR 38, MUMBAI

ITA 3500/MUM/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6688 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 19-06-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 17-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NIRJA PRADHAN
• Keywords: Depreciation; Loose papers; Document seized; Valuation report; Documents seized

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - E BENCH. .. , ! , BEFORE S/SH.I.P.BANSAL, JUDICIAL MEMBE R & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO. 3500/MUM/2012, ' ' ' ' # # # # / ASSESSMENT YEAR-2009-10 M/S. S.V. BUSINESS PVT. LTD., C/O. SHANKARLAL JAIN & ASSOCIATES, 12, ENGINEER BUILDING, 265, PRINCESS STREET, MUMBAI-400002 VS ACIT CEN CIR 38, MUMBAI. PAN: AAECS1117M ( $% / APPELLANT) ( &'$% / RESPONDENT) '() '() '() '() * * * * / ASSESSEE BY : NONE + * / REVENUE BY : SHRI NIRJA PRADHAN ' ' ' ' + ++ + ), ), ), ), / DATE OF HEARING : 19-06-2014 -.# + ), / DATE OF PRONOUNCEMENT : 19-06-2014 ' ' ' ' , 1961 + ++ + 254 )1( )/) )/) )/) )/) 0 0 0 0 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM ! ! ! ! ' ' ' ' : CHALLENGING THE ORDER DATED.25.04.2012 OF THE CIT(A )-41,MUMBAI, ASSESSEE HAS RAISED FOLLOWING GROUNDS APPEAL: 1.THE LD. CIT(A) ERRED IN CONFIRMING DISALLOWANCE A S MADE BY THE LD. ASSESSING OFFICER OUT OF DEPRECIATION OF RS.279720/- MERELY FOLLOWING EARLIE R YEARS ASSESSMENT ORDER, WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE LAW APPL ICABLE THERETO. 2.THE APPELLANT PRAY THAT DISALLOWANCE MADE BE DELE TED. 3.THE APPELLANT CRAVE YOUR HONOURS LEAVE TO ADD, A LTER OR AMEND ANY GROUND OF APPEAL AT THE TIME OF HEARING OR BEFORE. 2. ASSESSEE-COMPANY FILED ITS RETURN OF INCOME ON 30.0 9.2009 DECLARING INCOME OF RS. 3.60 LAKHS. ASSESSING OFFICER(AO)FINALISED THE ASSESSMENT U/S.1 43(3) OF THE ACT ON 30.11.2011,DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 37.14 LAKHS . 3. DURING THE ASSESSMENT PROCEEDINGS, AO DIRECTED THE ASSESSEE TO RECALCULATE ITS ALLOWANCE FOR DEPRECIATION IN VIEW OF THE FACT THAT IN THE EARLIE R ASSESSMENT YEAR,AO HAD DISALLOWED DEPRECIA - TION OF RS. 3.10 LAKHS.THE ASSESSEE REPLIED THAT AD DITION MADE BY THE AO WAS CONFIRMED BY THE FIRST APPELLATE AUTHORITY (FAA),THAT IT HAD FILED A N APPEAL BEFORE THE ITAT AGAINST THE ORDER OF THE FAA, THAT MATTER SHOULD BE KEPT PENDING TILL TH E DISPOSAL OF APPEAL BY THE TRIBUNAL. HOWEVER, WITHOUT PREJUDICE TO THE ABOVE,THE ASSESSEE FILED A REVISED DEPRECIATION CHART.ACCORDINGLY,AO DISALLOWED RS.2.79 LAKHS UNDER THE HEAD EXCESS DEPR ECIATION CLAIMED. 4 .ASSESSEE PREFERRED AN APPEAL BEFORE THE FAA.AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AND THE ASSESSMENT ORDER, HE HELD THAT IN THE AY 20 08-09 DEPRECIATION AMOUNTING TO RS.3.10 LAKHS TO THE BUILDING WAS DISALLOWED AND WAS CONFIRMED BY THE FAA,THAT MATTER WAS PENDING BEFORE THE TRIBUNAL,THAT THE ASSESSEE HAD SUBMITTED A REVISED DEPRECIATION CHART,THAT THE AO HAD RIGHTLY DISALLOWED DEPRECIATION OF RS.2.79 LAKHS. 5. DURING THE COURSE OF HEARING BEFORE US, AUTHORISED REPRESENTATIVE (AR)FAIRLY CONCEDED THAT THE TRIBUNAL,VIDE ITS ORDER DATED 16.05.2014 (ITA NO. 7 019/7020 AND 7054/MUM/2010-AYS 2006-07, 2007-08 AND 2008-09)HAD DECIDED THE ISSUE AGAINST T HE ASSESSEE.DEPARTMENTAL REPRESENTATIVE (DR) INFORMED US THAT AO HAD NOT FILED ANY APPEAL B EFORE THE TRIBUNAL FOR THE YEAR UNDER APPEAL. AFTER CONSIDERING THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT TRIBUNAL,VIDE ITS ORDER DATED. 2 ITA NO. 3500/MUM/2012 M/S. S.V. BUSINESS PVT. LTD. 16.05.2014,(SUPRA) HAS DECIDED THE ISSUE AS UNDER: 6.IN THE APPEAL FOR ASSESSMENT YEAR 2008-09 BEING ITA NO.7054/MUM/2010, WHICH IS DIRECTED AGAINST THE ORDER OF ID. CIT(A)-41,MUMBAI DATED 30. 8.2010,THE SOLITARY ISSUE RAISED BY THE ASSESSEE RELATES TO DISALLOWANCE OF RS.3,10,800/- M ADE BY AO AND CONFIRMED BY LD.CIT(A) ON ACCOUNT OF DEPRECIATION ON BUILDING. 7.DURING THE COURSE OF SEARCH, CERTAIN LOOSE PAPERS INVENTORISED AS PAGES 7 TO 16 WERE FOUND AND SEIZED FROM THE POSSESSION OF THE ASSESSEE SHOWING RECEIPTS IN CASH AGGREGATING RS.40,06,000/. IN THE STATEMENT RECORDED DURING THE COURSE OF SEARCH U/S 132(4) OF THE ACT, THE ASSESSEE EXPLAINED THAT THE TRANSACTIONS REFLECTED IN THE SAID LOSE PA PERS AS THAT OF SALE OF SCRAP OF DRUMS, SCREENS, NICKEL, PLASTIC BAGS, DAMAGED MOTORS, DAMAGED ETC.H E ALSO AGREED THAT THE SAID TRANSACTIONS WERE NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNT AND OF FERED AN AMOUNT OF RS.40,60,000/- AS ADDITIONAL INCOME FOR ASSESSMENT YEAR 2007-08. IN T HE STATEMENT, IT WAS STATED ON BEHALF OF THE ASSESSEE THAT OUT OF THE AMOUNT OF RS.40,06,000/-,T HE SUM OF RS.31,08,000/ WAS UTILIZED FOR ADDITIONAL CONSTRUCTION OF THE EXISTING FACTORY BUI LDING AT MIDC,DOMBIVILI.IN HIS BOOKS OF ACCOUNT, ENTRIES WERE RECORDED BY THE ASSESSEE SHOW ING AN AMOUNT OF RS.31,08,000/- SPENT ON ADDITIONAL CONSTRUCTION OF FACTORY BUILDING AND DEP RECIATION THEREON WAS CLAIMED BY THE ASSESSEE IN THE RETURN OF INCOME FILED FOR THE YEAR UNDER CO NSIDERATION I.E.ASSESSMENT YEAR 2008-09. AO HOWEVER,DISALLOWED THE CLAIM OF THE ASSESSEE FOR TH E SAID DEPRECIATION ON THE GROUND THAT NO DOCUMENTARY EVIDENCE WAS PRODUCED BY THE ASSESSEE I N SUPPORT OF ITS CLAIM FOR THE SAID EXPENSES INCURRED ON CONSTRUCTION OF FACTORY BUILDING. 8.THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF ITS CLAIM FOR DEPRECIATION ON ADDITIONAL FACTORY BUILDING WAS DISPUTED BY ASSESSEE IN THE APPEAL FIL ED BEFORE THE LD.CIT(A) AND AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE AND MATERIAL A VAILABLE ON RECORD, THE LD.CIT(A) CONFIRMED THE DISALLOWANCE MADE BY AO ON ACCOUNT OF DEPRECIAT ION FOR THE FOLLOWING REASONS 1.4 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPEL LANT, ORDER OF THE AO AND FACTS OF THE CASE CAREFULLY. IT IS NOTICED THAT THE APPELLANT HAS CLA IMED AN AMOUNT OF RS.31,08,000/- INCURRED FOR ADDITION TO THE FACTORY BUILDING.THE AO HAS CLEARED FOR THE DETAILS AND BILLS ETC TO PROVE THE GENUINENESS OF THE EXPENSES INCURRED FOR THE ADDITI ON TO THE FACTORY BUILDING. HOWEVER, THE APPELLANT HAS FAILED TO SUBMIT ANY EVIDENCE TO SUBS TANTIATE ITS CLAIM EXCEPT THE ARGUMENT THAT THE AMOUNT IN ADDITION OF THE BUILDING WAS INCURRED OUT OF THE ADDITIONAL INCOME DECLARED ON ACCOUNT OF SALE OF SCRAP AND WASTE IN AY 2007-08. AS PER TH E PROVISION OF THE INCOME TAX ACT TO THE ONUS IS ON THE ASSESSEE TO PROVE THE DOCUMENTARY EVIDENCE B EFORE THE AO BEFORE CLAIMING ANY DEDUCTION. THE HONBLE SUPREME COURT IN THE CASE OF CIT V/S CA LCUTTA AGENCY 19 ITR 119 HAS HELD THAT THE ONUS IS ON THE ASSESSEE TO PROVE THE GENUINENESS OF THE EXPENDITURE BEFORE CLAIMING ANY DEDUCTION WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES ON TH E ISSUE INVOLVED IN THE APPEAL FILED FOR THE ASSESSMENT YEAR 2008-09 AND ALSO PERUSED THE RELEVA NT MATERIAL ON RECORD. THE LD.COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE RELEVANT SEIZED DOCUMENTS PLACED AT PAGES 24 TO 31 OF HIS PAPER BOOK TO POINT OUT THAT THE FACT OF HAVING SPE NT/UTILIZED THE SALES PROCEEDS OF SCRAP FOR BUILDING WORK WAS CLEARLY MENTIONED IN THE SAID DOC UMENTS. HE HAS ALSO INVITED OUR ATTENTION TO THE COPY OF THE STATEMENT OF THE ASSESSEE RECORDED DURING THE COURSE OF SEARCH PLACED AT PAGES 11 TO 20 OF HIS PAPER BOOK AND POINTED OUT THAT IN REP LY TO QUESTION NO.5, IT WAS CLEARLY STATED BY THE ASSESSEE THAT UNACCOUNTED SALES PROCEEDS OF SCRAP T O THE EXTENT OF RS.31,08,000/- WERE UTILIZED FOR THE CONSTRUCTION OF FACTORY BUILDING IN MIDC, DOMBI VILI. RELYING ON THE DECISION OF A CO-ORDINATE BENCH OF TRIBUNAL IN THE CASE OF BIREN V.SAVLA V/S ACIT (2006) 100TTJ(MUMBAI) 1006 AND THE DECISION OF THE HONBLE KERALA HIGH COURT IN THE CA SE OF CIT V/S P D ABRAHAM ALIAS APPACHAN AND ANR (2012) 252 CTR (KER) 407, HE HAS CONTENDED THAT THE STATEMENT OF THE ASSESSEE AS WELL AS CONTENTS OF THE RELEVANT DOCUMENTS CANNOT BE ACCEPT ED IN PART AND REJECTED IN PART. 10.THE LD. DR, ON THE OTHER HAND, STRONGLY RELIED O N THE ORDERS OF AUTHORITIES BELOW IN SUPPORT OF THE REVENUES CASE. 11.AFTER CONSIDERING THE RIVAL SUBMISSIONS AND ON P ERUSAL OF RELEVANT MATERIAL ON RECORD, WE FIND NO INFIRMITY IN THE IMPUGNED ORDER OF ID. CIT(A) CO NFIRMING THE DISALLOWANCE MADE BY AO ON ACCOUNT OF ASSESSEES CLAIM FOR DEPRECIATION ON ADD ITIONAL CONSTRUCTION OF FACTORY BUILDING IN MIDC,DOMBIVILI.ALTHOUGH IT WAS INDICATED IN THE RELEVANT SEIZED DOCUMENTS THAT THE UNACCOUNTED SALES PROCEEDS OF SCRAP WERE PARTLY USED FOR BUILDI NG PURPOSES AND THE ASSESSEE ALSO REITERATED 3 ITA NO. 3500/MUM/2012 M/S. S.V. BUSINESS PVT. LTD. THIS POSITION IN HIS STATEMENT RECORDED UNDER SECTI ON 132(4), WE ARE OF THE VIEW THAT THE SAME BY ITSELF WAS NOT SUFFICIENT TO ESTABLISH THAT THE AMO UNT OF RS.31,08,000/- WAS INCURRED BY THE ASSESSEE ON THE CONSTRUCTION OF ADDITIONAL FACTORY BUILDING IN MIDC,DOMBIVILI.THE ONUS IN THIS REGARD WAS ON THE ASSESSEE TO SUBSTANTIATE ITS CLAIM FOR THE E XPENDITURE INCURRED ON THE CONSTRUCTION OF ADDITIONAL BUILDING BY PRODUCING THE RELEVANT DOCUM ENTARY EVIDENCE SUCH AS BILLS, VOUCHERS ETC. EVEN IF SUCH BILLS /VOUCHERS WERE NOT MAINTAINED BY THE ASSESSEE IN SUPPORT OF EXPENDITURE INCURRED OUTSIDE THE BOOKS OF ACCOUNT, THE ASSESSEE COULD HAVE AND SHOULD HAVE SUBSTANTIATED ITS CASE BY PRODUCING VALUATION REPORT OR BUILDING PLAN S SHOWING THAT THE ADDITIONAL CONSTRUCTION WAS INDEED MADE AT ITS FACTORY BUILDING SITUATED IN MID C, DOMBIVALI THE STATEMENT OF THE ASSESSEE AND INDICATION IN THE RELEVANT SEIZED DOCUMENTS WAS NOT SUFFICIENT TO ESTABLISH THAT THE AMOUNT OF RS.31,08,000/-WAS INCURRED BY ASSESSEE ON ACCOUNT O F CONSTRUCTION OF ADDITIONAL FACTORY BUILDING AND THAT TOO TO ITS EXISTING BUILDING IN MIDC,DOMBI VALI.IN OUR OPINION,IT IS THUS NOT A CASE WHERE THE STATEMENT OR RELEVANT SEIZED DOCUMENTS ARE PART LY ACCEPTED AND PARTLY REJECTED BY THE AUTHORITIES BELOW AS SOUGHT TO BE CONTENDED BY THE ID COUNSEL FOR THE ASSESSEE. IT IS THE CASE WHERE THE SAID STATEMENT AND THE RELEVANT SEIZED DOCUMENT S WERE NOT SUFFICIENT TO ESTABLISH THE CASE OF THE ASSESSEE OF HAVING SPENT AN AMOUNT OF RS.31,08,000/ -FOR THE CONSTRUCTION OF ADDITIONAL FACTORY BUILDING AND THE CLAIM OF THE ASSESSEE FOR DEPRECIA TION ON SUCH ADDITIONAL BUILDING AS DISALLOWED BY AUTHORITIES BELOW ON THE GROUND THAT THE ASSESSE E FAILED TO SUBSTANTIATE THE CLAIM BY BRINGING ANY DOCUMENTARY EVIDENCE.WE,THEREFORE, FIND NO INFI RMITY IN THE ORDERS OF AUTHORITIES BELOW IN DISALLOWING THE ASSESSEES CLAIM OF AND CONFIRMING THE SAID DISALLOWANCE,WE DISMISS THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-09. RESPECTFULLY FOLLOWING THE ABOVE ORDER WE ARE DECID ING THE EFFECTIVE GROUND OF APPEAL AGAINST THE ASSESSEE. AS A RESULT,APPEA L FILED BY THE ASSESSEE STANDS DISMISSED. 1)2 '() + UK UKUK UK 3 + ) 45. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH ,JUNE,2014 . 0 + -.# 6 7' 19 TWU , 201 4 . + / 8 SD/- SD/- ( .. / I.P. BANSAL) ( ! ! ! ! / RAJENDRA) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, 7' /DATE: 19.06 . 2014. SK 0 0 0 0 + ++ + &)9 &)9 &)9 &)9 : 9#) : 9#) : 9#) : 9#) / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / $% 2. RESPONDENT / &'$% 3. THE CONCERNED CIT(A)/ ; < , 4. THE CONCERNED CIT / ; < 5. DR E BENCH, ITAT, MUMBAI / 9=/ &)' , . . . 6. GUARD FILE/ / 1 '9) '9) '9) '9) &) &)&) &) //TRUE COPY// 0' / BY ORDER, > / 4 DY./ASST. REGISTRAR , /ITAT, MUMBAI