PRADEEP G. SINHA, MUMBAI V. ADDL CIT 20(2), MUMBAI

ITA 3511/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3323 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 15-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R SINDHU
• Assessee Lawyers: SANJAY R PARIKH
• Keywords: Business income
• Section: 143(1)

Judgement Text

P A G E | 1 ITA NO. 3511 & 3512/MUM/2017 A.YS. 2011 - 12 & 2012 - 13 SHRI PRADEEP G. SINHA VS. THE ADDL. COMMISSIONER OF INCOME TAX - 20(2) IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI G.MANJUNATHA, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NOS.3511 & 3512/MUM/2017 (ASSESSMENT YEARS: 2011 - 12 & 2012 - 13 ) SHRI PRADEEP G. SINHA 408, RAHEJA PLAZA, OFF ANDHERI LINK ROAD, ANDHERI (WEST), MUMBAI - 400 053 VS. THE ADDL. COMMISSIONER OF INCOME TAX - 20(2), ROOM NO. 707B, C - 10, PRATYAKSHA KAR BHAVAN, BANDRA KURLA COMPLEX, MUMBAI - 400 050 PAN AAPPS4576E (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SANJAY R. PARIKH, A.R RESPONDENT BY: SHRI R. SINDHU, D.R DATE OF HEARING: 06 .02.2019 DATE OF PRONOUNCEMENT: 0 8 .02.2019 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE CONSOLIDATED ORDER PASSED BY THE CIT(A) - 51, MUMBAI, DATED 16.02.2017 FOR A.Y. 2011 - 12 & A.Y. 2012 - 13, WHICH IN TURN ARISES FROM THE RESPECTIVE ASSESSMENT ORDER S PASSED UNDER SEC.143(3) OF THE INCOME TAX, 1961 (FOR SHORT I.T. ACT) , DATED 13.03.2014 AND 0 8.11.2014 FOR THE AFOREMENTIONED RESPECTIVE YEARS . AS COMMON ISSUE S ARE INVOLVED IN THE AFOREMENTIONED APPEALS, HENCE THE SAME ARE BEING TAKEN UP AND DISPOSED OFF TOGETHER BY WAY OF A CONSOLIDATED ORDER. WE SHALL FIRST ADVERT TO THE APPEAL OF THE ASSESSEE FOR A.Y. 2011 - 12. THE P A G E | 2 ITA NO. 3511 & 3512/MUM/2017 A.YS. 2011 - 12 & 2012 - 13 SHRI PRADEEP G. SINHA VS. THE ADDL. COMMISSIONER OF INCOME TAX - 20(2) ASSESSEE ASSAILING THE ORDER OF THE CIT(A) HAS RAISED BEFORE US THE FOLLOWING GROUNDS OF APPEAL: (A) DISALLOWANCE OUT OF STAFF WELFARE EXPENSES - 79,910/ - 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 36, MUMBAI [CIT(A)] ERRED ON FACTS AND IN LAW IN CONFIRMING THE ORDER PASSED BY THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE - 20(2), MUMBAI (AO) MAKING A DISALLOWANCE OF RS. 79,910/ - , BEING 10% OF THE TOTAL STAFF WELFARE EXPENSES. 2. THE APPELLANT PRAYS THAT THE DISALLOWANCE OF RS. 79,910/ - AS MADE BY THE AO OUT OF STAFF WELFARE EXPENSES AND AS CONFIRMED BY THE CIT(A), MAY BE DELETED. B) DISALLOW ANCE OUT OF SALES PROMOTION EXPENSES - RS. 1,49,094/ - 3. THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ORDER PASSED BY THE AO MAKING A DISALLOWANCE OF RS. 1,49,094/ - , BEING 10% OF THE TOTAL SALES PROMOTION EXPENSES. 4. THE APPELLANT PRAYS THAT THE DISALLOWANCE OF RS. 1,49,094/ - AS MADE BY THE AO O UT OF SALES PROMOTION EXPENSES AND AS CONFIRMED BY THE CIT(A), MAY BE DELETED. C) DISALLOWANCE OUT OF OFFICE EXPENSES - RS. 35,346/ - 5. THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ORDER PASSED BY THE AO MAKING A DISALLOWANCE OF RS. 35,346/ - , BEING 10% OF THE TOTAL OFFICE EXPENSES. 6. THE APPELLANT PRAYS THAT THE DISALLOWANCE OF RS. 3 5,346/ - AS MADE BY THE AO OUT OF OFFICE EXPENSES AND AS CONFIRMED BY THE CIT(A), MAY BE DELETED. D) DISALLOWANCE OUT OF CAR HIRE CHARGES - RS. 30,719/ - 7. THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ORDER PASSED BY THE AO MAKING A DISALLOWANCE OF RS. 30,719/ - , BEING 10% OF THE TOTAL CAR HIRE CHARGES. 8. THE APPELLANT PRAYS THAT THE DISALLOWANCE OF RS. 30,719/ - AS MADE BY THE AO OUT OF CAR HIR E CHARGES AND AS CONFIRMED BY THE CIT(A), MAY BE DELETED. E) DISALLOWANCE OUT OF CAR INSURANCE - RS. 16,415/ - 9. THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ORDER PASSED THE AO MAKING A DISALLOWANCE OF RS. 16,415/ - , BEING 10% OF THE TOTAL CAR INSURANCE. 10. THE APPELLANT PRAYS THAT THE DISALLOWANCE OF RS.16,415/ - AS MADE BY THE A.O OUT OF CAR INSURANCE AND AS CONFIRMED BY THE CIT(A), MAY BE DELETED. P A G E | 3 ITA NO. 3511 & 3512/MUM/2017 A.YS. 2011 - 12 & 2012 - 13 SHRI PRADEEP G. SINHA VS. THE ADDL. COMMISSIONER OF INCOME TAX - 20(2) F) DISALLOWANCE OUT OF CAR MAINTENANCE EXPENSES RS.30,970/ - 11. THE LEARNED CIT( A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ORDER PASSED BY THE AO MAKING A DISALLOWANCE OF RS. 30,970/ - , BEING 10% OF THE TOTAL CAR MAINTENANCE EXPENSES. 12. THE APPELLANT PRAYS THAT THE DISALLOWANCE OF RS. 30,970/ - AS MADE BY THE AO OUT OF CAR MAINTENANCE EXPENSES AND AS CONFIRMED BY THE CIT(A), MAY BE DELETED. G) DISALLOWANCE OUT OF DIESEL AND PETROL EXPENSES - RS. 78,557/ - 13. THE LEARNED C IT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ORDER PASSED BY THE AO MAKING A DISALLOWANCE OF RS. 78,557/ - , BEING 10% OF THE TOTAL DIESEL AND PETROL EXPENSES. 14 . THE APPELLANT PRAYS THAT THE DISALLOWANCE OF RS. 78,557/ - AS MADE BY THE AO OUT OF DIESEL AND PETROL EXPENSES AND AS CONFIRMED BY THE CIT(A), MAY BE DELETED. H) DISALLOWANCE OUT OF TRAVELLING EXPENSES - RS. 5,08,118/ - 15. THE LEARN ED CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ORDER PASSED BY THE AO MAKING A DISALLOWANCE OF RS. 5,08,118/ - , BEING 10% OF THE TOTAL TRAVELLING EXPENSES . 16 . THE APPELLANT PRAYS THAT THE DISALLOWANCE OF RS.5,08,118/ - AS MADE BY THE A.O OUT OF TRAVELLING EXPENSES AND AS CONFIRMED BY THE CIT(A), MAY BE DELETED. I) DISALLOWANCE OUT OF CONVEYANCE EXPENSES RS.56,846 / - 17. THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ORDER PASSED BY THE AO MAKING A DISALLOWANCE OF RS. 56,846/ - , BEING 10% OF THE TOTAL CONVEYANCE EXPENSES. 18. THE APPELLANT PRAYS THAT THE DISALLOWANCE OF RS. 56,846/ - AS MADE BY THE AO OUT OF CONVEYANCE EXPENSES AND AS CONFIRMED BY THE CIT(A), MAY BE DELETED. J) DISALLOWANCE OUT OF MOBILE EXPENSES - RS. 1,17,795/ - 19. THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ORDER PASSED BY THE AO MAKING A DISALLOWANCE OF RS. 1,17,795/ - , BEING 10% OF THE TOTAL MOBILE EXPENSES. 20. THE APPELLANT PRAYS THAT THE DISALLOWANCE OF RS. 1,17,795/ - AS MADE BY THE AO OUT OF MOBILE EXPENSES AND AS CONFIRMED BY THE CIT(A), MAY BE DELETED. 2. BRIEFLY STATED, THE ASSESSEE HAD E - FILED HIS RETURN OF INCOME FOR A.Y. 2011 - 12 ON 16.09.2011, DECLARING TOTAL INCOME AT RS.7,22,02,320/ - . THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED AS SUCH UNDER SEC. 143(1) OF THE I.T. ACT. SUBSEQUENTLY, THE P A G E | 4 ITA NO. 3511 & 3512/MUM/2017 A.YS. 2011 - 12 & 2012 - 13 SHRI PRADEEP G. SINHA VS. THE ADDL. COMMISSIONER OF INCOME TAX - 20(2) CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTIN Y ASSESSMENT UNDER SEC. 143(2). THE A.O DISALLOWED 10% OUT OF CERTAIN EXPENSES CLAIMED BY THE ASSESSEE IN ITS PROFIT & LOSS ACCOUNT VIZ. (I) S TAFF WELFARE EXPENSE (RS.79,910/ - ); (II) SALES PROMOTION EXPENSES (RS.1,49,094/ - ); (III) OFFICE EXPENSES (RS.35,34 6/ - ); (IV) CAR HIRE CHARGES (RS.30,719/ - ); (V) CAR INSURANCE (RS.16,415/ - ); (VI) CAR M AINTENANCE E XPENSES (RS.30,970/ - ); (VII) DIESEL & PETROL EXPENSES (RS.78,557/ - ); (VIII) TRAVELLING EXPENSES (RS.5,08,118/ - ); (IX) CONVEYANCE E XPENSE (RS.56,846/ - ); AND (X ) MOBILE EXPENSES (RS.1,17,795/ - ). THE A.O AFTER INTER ALIA MAKING THE AFORESAID DISALLOWANCE ASSESSED THE INCOME AT RS.7,54,02,090/ - . 3. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) . THE CIT(A) OBSERV ED THAT AS DISALLOWANCE OF 15% OUT OF THE AFOREMENTIONED EXPENSES MADE BY THE A.O IN THE CASE OF THE ASSESSEE FOR A.Y. 2010 - 11 WAS UPHELD BY HIS PREDECESSOR, VIDE HIS ORDER PASSED IN APPEAL NO. CIT(A) - 31/I.T. - 90/ACIT - 20(2)/13/14, DATED 13.02.2015, TH EREFORE, SUSTAIN ED THE DISALLOWANCE OF 10% OF THE AFOREMENTIONED EXPENSES MADE BY THE A.O DURING THE YEAR UNDER CONSIDERATION. 4. THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE AT THE VERY OUTSET OF THE HEARING OF THE APPEAL SUBMITTED THAT THE ORDER OF THE CIT(A) SUSTAINING THE 15% DISALLOWANCE OUT OF THE AFOREMENTIONED EXPENSES IN THE CASE OF THE ASSESSEE FOR THE IMMEDIATELY PRECEDING YEAR VIZ. A.Y. 2010 - 11 HAD BEEN UPHELD BY THE TRIBUNAL I.E. ITAT H BENCH , MUMBAI , VIDE ITS ORDER PASSED IN PRADEEP G. SINHA VS. ACIT 20(2), MUMBAI [ITA NO. 2302/MUM/2015; DATED 09.08.2017] AND THE APPEAL OF THE ASSESSEE HAD BEEN DISMISSED (COPY PLACED ON RECORD). I T WAS SUBMITTED BY THE LD. A.R THAT THE ISSUE S WHICH HAD BEEN ASSAILED IN THE PRESENT APPEAL BY THE ASSES SEE WERE SQUARELY COVERED AGAINST THE ASSESSEE IN THE BACKDROP OF THE AFORESAID ORDER PASSED BY THE TRIBUNAL IN THE CASE OF THE ASSESSEE FOR A.Y 2010 - 11 . P A G E | 5 ITA NO. 3511 & 3512/MUM/2017 A.YS. 2011 - 12 & 2012 - 13 SHRI PRADEEP G. SINHA VS. THE ADDL. COMMISSIONER OF INCOME TAX - 20(2) 5. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, A COORDINATE BENCH OF THE TRIBUNAL I.E ITAT H BENCH , MUMBAI IN THE ASSESSES OWN CASE FOR THE IMMEDIATELY PRECEDING YEAR VIZ. A.Y. 2010 - 1 1 I.E PRADEEP G. SINHA VS. ACIT 20(2), MUMBAI [ITA NO. 2 302/MUM/2015; DATED 09.08.2017] HAD UPHELD THE DISALLOWANCE OF 15% OF THE AFOREMENTIONED EXPENSES. WE FIND THAT THE CIT(A) IN THE CASE BEFORE US WHILE UPHOLDING THE DISALLOWANCE OF 10% OF THE AFORESAID EXPENSES HAD RELIED UPON THE ORDER PASSED BY HIS PREDE CESSOR FOR THE PRECEDING YEAR VIZ. A.Y. 2010 - 11. IN OUR CONSIDERED VIEW , NOW WHEN THE ORDER OF THE CIT(A) FOR A.Y. 2010 - 11 HAS BEEN UPHELD BY THE COORDINATE BENCH OF THE TRIBUNAL, THUS NO INFIRMITY DOES EMERGE FROM THE ORDER PASSED BY THE CIT(A) FOR THE Y EAR UNDER CONSIDERATION I.E A.Y 2011 - 12 . WE THUS IN TERMS OF OUR AFORESAID OBSERVATIONS AND THE CONCESSION ON THE PART OF THE LD. A.R THAT THE ISSUE S INVOLVED IN THE PRESENT APPEAL ARE SQUARELY COVERED AGAINST THE ASSESSEE PURSUANT TO THE AFORESAID ORDER O F THE TRIBUNAL IN THE CASE OF THE ASSESSEE FOR THE IMMEDIATELY PRECEDING YEAR VIZ. A.Y. 2010 - 11, FIND NO MERIT IN THE PRESENT APPEAL AND DISMISS THE SAME . 6. THE APPEAL FILED BY THE ASSESSEE IS DISMISSED IN TERMS OF OUR AFORESAID OBSERVATIONS. A.Y. 2012 - 13 ITA NO 3512/MUM/2017 7. WE FIND THAT AS THE FACTS AND THE ISSUE S INVOLVED IN THE PRESENT APPEAL REMAINS THE SAME AS WERE THERE IN THE APPEAL OF THE ASSESSEE FOR THE IMMEDIATELY PRECEDING YEAR VIZ. ITA NO. 3511/MUM/2017 FOR A.Y. 2011 - 12, THUS O UR ORDER PASSED WHILE DISPOSING OF F THE AFOREMENTIONED APPEAL FOR A.Y 2011 - 12 SHALL APPL Y MUTATIS MUTANDIS FOR THE DISPOSAL OF P A G E | 6 ITA NO. 3511 & 3512/MUM/2017 A.YS. 2011 - 12 & 2012 - 13 SHRI PRADEEP G. SINHA VS. THE ADDL. COMMISSIONER OF INCOME TAX - 20(2) THE PRESENT APPEAL. THE APPEAL OF THE ASSESSEE FOR A.Y. 2012 - 13 I.E. ITA NO. 3512/MUM/2017 IS DISMISSED I N THE SAME TERMS. 8. THE APPEALS OF THE ASSESSEE FOR A.Y. 2011 - 12 & A.Y. 2012 - 13 I.E ITA NOS. 3511 & 3512/MUM/2017 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 8 . 02.2019 S D / - S D / - ( G.MANJUNATHA ) ( RAVISH SOOD ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 0 8 . 0 2 . 2 0 1 9 PS. ROHIT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI