MONALISA KNITWEAR EXPORTS, MUMBAI V. ITO 18(1)(3), MUMBAI

ITA 3553/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1576 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 25-05-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 22-05-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Depreciation; Business expenditure; Bad and doubtful debts
• Section: 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, B, MUMBAI BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 3553/MUM/2008 (ASSESSMENT YEARS: 2004-05) M/S MONALISA KNITWEAR EXPORTS 7, CAMA INDUSTRIAL ESTATE SUNMILL COMPOUND, LOWER PAREL (W), MUMBAI-400013 PAN: AAAFM9971A .APPELLANT V/S INCOME TAX OFFICER WARD 18(1)(3), PIRAMAL CHAMBERS, LALBAUG, MUMBAI-400012. .. RESPONDENT APPELLANT BY : SHRI VIMAL PUNAMIY A RESPONDENT BY : S/SHRI S S RANA, L K AGRAWAL AN D PITAMBAR DAS O R D E R PER VIJAY PAL RAO,JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 05.02.2008 OF CIT(A)-XVIII FOR THE ASS ESSMENT YEAR 2004-05. 2 THE ASSESSEE HAS RAISED FOLLOWING GROUNDS : 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF ITA NO. 3553/MUM/2008 (ASSESSMENT YEARS: 2004-05) 2 EARNEST MONEY DEPOSIT WRITTEN OFF AMOUNTING TO RS.8,08,440/-; 2. ON THE FACTS AND CIRCUMSTANCES O THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF ASSETS WRITTEN OFF AMOUNTING TO RS.3,15,669/- 3. ON THE FACTS AND CIRCUMSTANCES O THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF SUNDRY BALANCE WRITTEN OFF AMOUNTING TO RS.6,55,780/- 4. ON THE FACTS AND CIRCUMSTANCES O THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF REPAIR, MAINTENANCE EXPENSES AMOUNTING TO RS.88,903/- 3. THE ASSESSEE WAS DOING THE BUSINESS OF READYMADE GARMENTS AND TEXTILES TRADING IN EXPORT AND LOCALLY . THE ASSESSEE WERE GETTING GOODS MANUFACTURED THROUGH J OB WORK. AFTER 31 ST MARCH 2000, THE ASSESSEE WAS JUST SELLING THE STO CK OF THE GOODS AND EARNING COMMISSION INCOME. THE A SSESSEE FILED ITS RETURN OF INCOME ON 01.11.2004 DECLARING TOTAL LOSS OF RS.5,51,918/-. IN THE SCRUTINY ASSESSMENT, THE AO MADE THE ADDITION ON ACCOUNT OF DISALLOWANCE OF FORFEITED M ONEY WRITTEN OFF, DISALLOWANCE OF ASSETS WRITTEN OFF, THE DISALL OWANCE ON ACCOUNT OF SUNDRY BALANCE WRITTEN OFF AND REPAIRS A ND MAINTENANCE. THE ASSESSEE CHALLENGED THE ADDITION S MADE BY THE AO MADE BEFORE THE CIT(A). THE APPEAL OF T HE ASSESSEE WAS DISMISSED VIDE IMPUGNED ORDER. ITA NO. 3553/MUM/2008 (ASSESSMENT YEARS: 2004-05) 3 4. THE FIRST GROUND OF APPEAL IS REGARDING DISALLOW ANCE OF EARNEST MONEY DEPOSIT WRITTEN OFF. THE ASSESSEE DE POSITED EARNEST MONEY OF RS.8,08,440/- WITH AEPC. THE SAID MONEY WAS FORFEITED ON ACCOUNT OF NON-UTILISATION OF EXP ORT QUOTA BY THE ASSESSEE. THE ASSESSEE PREFFERED AN APPEAL A GAINST THE FORFEITED BEFORE THE 1 ST AND 2 ND APPELLATE AUTHORITY, BUT LOST THE SAME VIDE ORDER DATED 26.5.1998 AND 03.07.2002 RESPECTIVELY. IN THE SUBSEQUENT YEAR I.E. FINANCE YEAR 2002- 03, THE ASSESSEE DECIDED NOT TO PURSUE THE SAID ISS UE AND TO CLAIM IT AS TRADING LOSS OF THE FINANCIAL YEAR 2002 -03. ACCORDINGLY, THE ASSESSEE WRITTEN OF EARNEST MONEY DEPOSIT OF RS.8,08,440/- ON 01.04.2003 AND CLAIMED THE SAME AS BUSINESS LOSS. THE AO DISALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE EXPENDITURE WAS NOT INCURRED DURING THE YEAR RELEVANT TO THE PREVIOUS YEAR. 5. ON APPEAL, THE CIT(A) HAS ALSO CONFIRMED THE DISALLOWANCE MADE BY THE AO ON THE SIMILAR REASONI NG. 6. BEFORE US, THE LEARNED AR OF THE ASSESSEE HAS SUBMITTED THAT THOUGH THE APPEAL OF THE ASSESSEE AG AINST THE FORFEITURE OF EARNEST MONEY WAS DISMISSED IN 2004 B UT THE ASSESSEE DECIDED TO ACCEPT THE FORFEITURE OF EARN EST MONEY AND TREAT IT AS BUSINESS LOSS/EXPENDITURE IN THE PR EVIOUS YEAR ITA NO. 3553/MUM/2008 (ASSESSMENT YEARS: 2004-05) 4 RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION AND ACCORDINGLY, WRITTEN OFF THE SAME. HE HAS FURTHER CONTENDED THAT DEDUCTION IN RESPECT OF TRADING LOSS CAN BE C LAIMED BY THE ASSESSEE IN THE YEAR IN WHICH IT HAS DECIDED T O ACCEPT THE LOSS. THE ASSESSEE SUBMITTED THAT WHEN IT WAS NOT POSSIBLE FOR HIM TO RECOVER THE LOSS, THEN THE ASSESSEE DECI DED NOT TO PURSUE THE MATTER FURTHER AND CLAIM THE SAME AS TRA DING LOSS IN THE RELEVANT ASSESSMENT YEAR. THUS THE SAME IS ALLO WABLE AS BUSINESS EXPENDITURE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. HE HAS RELIED UPON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASES OF JOBHIRAM RAMCHANDRA V/S CIT REPORTED IN 61 ITR 693 AND CIT V/S SASSO N DAVID AND CO. REPORTED IN 146 ITR 390. 7. THE LEARNED DR SUBMITTED THAT THE ASSESSEE WRITT EN OFF THE FORFEITURE OF EARNEST MONEY IN THE YEAR 2004 BU T THE CONCERNED AUTHORITIES DISMISSED THE CLAIM OF THE AS SESSEE IN THE YEAR 2002 AND THEREAFTER THE ASSESSEE HAS NOT T AKEN ANY STEP AGAINST THE DECISION OF THE CONCERNED AUTHORI TIES AND THEREFORE, THE LOSS WAS CRYSTALLIZED IN THE YEAR 2 002. THE LEARNED DR FURTHER SUBMITTED THAT, THERE IS NO BA SIS FOR CLAIMING THE LOSS AS BUSINESS LOSS DURING THE YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION AS THE LOSS WAS CRYSTALLIZED IN THE EARLIER YEARS. HE HAS RELIED U PON THE ORDERS OF THE AUTHORITIES BELLOWS. ITA NO. 3553/MUM/2008 (ASSESSMENT YEARS: 2004-05) 5 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND REL EVANT RECORD. THE CLAIM OF THE ASSESSEE WAS DISALLOWED BY THE LOWER AUTHORITIES ON THE GROUND THAT THE LOSS WAS NOT SUFFERED DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. IT IS NOT DISPUTED BY THE REVENUE T HAT FORFEITURE OF EARNEST MONEY FOR NON-UTILISATION OF EXPORT QUOT A IS A TRADING LOSS OF THE ASSESSEE. ONCE THE BUSINESS LO SS OR LIABILITY IS NOT DISPUTED BY THE REVENUE THEN THE QUESTION OF ALLOWABILITY OF THE YEAR SHOULD BE CONSIDERED AND D ECIDED FROM THE BUSINESSMANS POINT OF VIEW. SINCE THE ASSESSE E HAS DECIDED TO ACCEPT THE FORFEITURE OF EARNEST MONEY A S BUSINESS LOSS AND WRITTEN OFF THE SAME IN THE YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION THEN IT CANNOT BE DISALLOWED MERELY ON THE GROUND THAT THE AUTHORITIE S REJECTED THE CLAIM OF THE ASSESSEE AGAINST THE FORFEITURE IN THE YEAR 2002 AND THE ASSESSEE COULD HAVE CLAIMED THE SAME I N THE RELEVANT YEAR WHEN IT WAS FINALLY REJECTED BY THE A UTHORITIES. IN VIEW OF THE DECISIONS OF THE JURISDICTIONAL HIGH CO URT IN THE CASES OF JOBHIRAM RAMCHANDRA V/S CIT AND CIT V/S SASSON DAVID AND CO. (SUPRA) RELIED UPON BY THE ASSESSEE, WE ARE OF THE CONSIDERED OPINION THAT THE BUSINESS LOSS WRITT EN OFF BY THE ASSESSEE IN THE YEAR SHOULD BE ALLOWED AS BUSINESS EXPENDITURE IN THE ASSESSMENT YEAR UNDER CONSIDERAT ION. ITA NO. 3553/MUM/2008 (ASSESSMENT YEARS: 2004-05) 6 ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES QU A THIS ISSUE ARE SET ASIDE. 9. THE SECOND GROUND OF APPEAL IS REGARDING DISALLO WANCE OF ASSETS WRITTEN OFF. THE ASSESSEE HAS WRITTEN OFF AN AMOUNT OF RS.3,15,669/- BEING FIXED ASSETS WRITTEN OFF. THESE ASSETS INCLUDE VARIOUS ITEMS LIKE, COMPUTER, CYCLE , ELECTRICAL INSTALLATION, FACTORY EQUIPMENTS ETC. THE AO DISAL LOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE ASSESS EE HAS MERELY WRITTEN OFF FIXED ASSTS FROM THE BALANCE SHE ET AT COST BY WAY OF JOURNAL ENTRIES WITHOUT GIVING ANY EXPLANAT ION AS TO WHY THE SAME WERE WRITTEN OFF. AS THE AO HAS DI SCUSSED THE SECTION 50 OF THE INCOME TAX ACT,1961, AND HELD TH AT THE WRITTEN OFF OF ASSETS HAS NOT CONSIDERED AS DEPRECI ABLE ASSETS BY THE ASSESSEE, THEREFORE, IT CAN BE A LONG TERM C APITAL LOSS. HENCE, IT CAN BE SET OFF UNDER THE HEAD INCOME FRO M BUSINESS: 10. ON APPEAL, THE CIT(A) HAS CONFIRMED THE DISALLO WANCE MADE BY THE AO. 11. BEFORE US, THE LEARNED AR OF THE ASSESSEE HAS S UBMITTED THAT THESE FIXED ASSETS WERE VERY OLD ASSETS ON WHI CH DEPRECIATION CLAIM ALLOWED ONLY UP TO 31.3.2000 I. E. FOR THE ASSESSMENT YEAR 2000-01. THEREAFTER NO DEPRECIATIO N WAS CLAIMED BY THE ASSESSEE AND A NOTE HAS MADE BY THE ITA NO. 3553/MUM/2008 (ASSESSMENT YEARS: 2004-05) 7 ACCOUNTANT THAT THE DEPRECIATION HAS NOT BEEN CHAR GED DUE TO INADEQUACY OF THE PROFITS. THE LEARNED AR HAS REFE RRED THE COPY OF THE FINANCIAL ACCOUNT FOR THE YEAR 1999-200 0. THUS, THE LEARNED AR HAS URGED THAT THESE ASSETS ARE DEPR ECIABLE ASSETS AND DEPRECIATION WAS CLAIMED UP TO 31.3.200 0 AND THEREFORE IT CANNOT BE CONSIDERED AS LONG TERM CAPI TAL ASSETS. 12. ON THE OTHER HAND, THE LEARNED DR HAS SUBMITTED THAT THE ASSESSEE HAS STOPPED ITS BUSINESS IN TRADING IN THE EXPORT OF TEXTILE AND DOMESTIC TRADING ALSO. THEREFORE, N O DEPRECIATION WAS ALLOWABLE ON THIS ASSETS AS THE SA ME WAS NOT USED FOR THE BUSINESS PURPOSE OF THE ASSESSEE. HE HAS RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSION AND THE RELEVANT RECORD. IT IS UNDISPUTED FACT THAT THE AS SESSEE WAS USING THESE ASSETS FOR BUSINESS PURPOSES AND CLAIMI NG DEPRECIATION ON THE SAME UP TO THE YEAR 2000. IN TH E SUBSEQUENT YEARS THE ASSESSEE DID NOT CLAIM ANY DEP RECIATION ON THESE ASSETS. IN THE FINANCIAL YEAR UNDER CONSI DERATION, THE ASSESSEE HAS WRITTEN OFF THESE ASSETS BEING OLD AND DISCARDED. WHEN THE ASSESSEE IS STILL OPERATING AND OFFERING T HE INCOME FROM BUSINESS THOUGH BY EARNING COMMISSION INCOME IN THE SAME LINE OF BUSINESS THEN IT CANNOT BE SAID THAT THE ASSESSEE HAS COMPLETELY CLOSED ITS BUSINESS. AS PE R THE ITA NO. 3553/MUM/2008 (ASSESSMENT YEARS: 2004-05) 8 PROVISIONS OF SECTION 32 AND EXPLANATION 5 THERETO, THE DEPRECIATION IS ALLOWABLE EVEN IF THE ASSESSEE HAS NOT CLAIMED DEDUCTION IN RESPECT OF DEPRECIATION. THE EXPLANATI ON 5 TO SECTION 32 IS REPRODUCED BELOW FOR THE SAKE OF CONV ENIENCE :PROVISIONS OF DEPRECIATION. 32. (1) [IN RESPECT OF DEPRECIATION OF .I) [EXPLANATION 5.FOR THE REMOVAL OF DOUBTS, IT IS H EREBY DECLARED THAT THE PROVISIONS OF THIS SUB-SECTION SH ALL APPLY WHETHER OR NOT THE ASSESSEE HAS CLAIMED THE DEDUCTI ON IN RESPECT OF DEPRECIATION IN COMPUTING HIS TOTAL INC OME;] OR PROFESSION OF THE ASSESSEE SINCE THE ASSETS WERE BUSINESS ASSETS AND THE ASSE SSEE CLAIMED THE DEPRECIATION UP TO 31.3.2000, THEREFORE , THE ASSETS SHALL BE WRITTEN OFF AS PER THE WRITTEN DOWN VALUE AS ON THE DATE OF WRITTEN OFF. AS PER THE PROVISIONS OF SE CTION 32, A NOTIONAL DEPRECIATION IS TO BE ALLOWED AND HAS TO B E COMPUTED FOR FINDING OUT THE WRITTEN DOWN VALUE ON THE DATE OF WRITTEN OFF OF THE ASSETS BY THE ASSESSEE AND ACCORDINGLY THE C LAIM OF THE ASSESSEE SHALL BE ALLOWED BEING TERMINAL DEPRECIATI ON U/S 32(1)(III) OF IT ACT. HENCE, WE DIRECT THE AO TO A LLOW THE CLAIM OF THE ASSESSEE TO THE EXTENT OF WDV OF THE ASSETS AFTER ADJUSTING THE NOTIONAL DEPRECIATION FROM THE EARLI ER YEARS DURING WHICH NO DEPRECIATION WAS CLAIMED BY THE ASS ESSED. ITA NO. 3553/MUM/2008 (ASSESSMENT YEARS: 2004-05) 9 14. THE THIRD GROUND OF APPEAL IS REGARDING DISALL OWANCE OF SUNDRY BALANCES WRITTEN OFF AMOUNTING TO RS.6,55,78 0/-. THE AO DISALLOWED THE CLAIM OF THE ASSESSEE WHEN THE A SSESSEE FAILED TO SHOW THAT THESE AMOUNTS HAVE ACTUALLY OFF ERED AS PART OF TRADING INCOME IN THE CURRENT YEAR OR IN THE EAR LIER PREVIOUS YEAR. 15. ON APPEAL, THE CIT(A) HAS CONFIRMED THE ORDER OF THE AO. 16. BEFORE US, THE LEARNED AR HAS SUBMITTED THAT TH ESE BAD DEBTS BEING BROUGHT FORWARD FROM EARLIER YEARS AND NOT RELATED TO THE YEAR UNDER CONSIDERATION. HE HAS FURTHER S UBMITTED THAT THE ASSESSEE BOOKED ALL THE SALES TRANSACTION IN THE RESPECTIVE YEAR OF SALES AND THE INCOME HAS BEEN AS SESSED FOR THE YEARS. HE HAS REFERRED THE DETAILS OF PAR TIES, AMOUNT, AND REASON, FOR WRITTEN OFF WHICH IS AT PAGE 4 OF AOS ORDER WHICH ARE AS UNDER : S.NO. NAME OF PARTY RS. REASON FOR WRITE OFF 1 AKTAR HUSSAIN 26,787 PARTY NOT TRACEABLE 2 SUDITI INDUSTRIES LTD 1,21,365 PARTY IS NOT PAYING THE MONEY 3 TRANSWORLD CARGO SERVICES 19,152 DEBIT NOT IS NOT ACCEPTED BY PARTY 4 COT SILK TEXTILES 2,46,762 ADVANCE GIVEN FOR PURCHASE FORFEITED BY PARTY FOR NOT TAKING DELIVERY IN TIME 5 HAROLD I PAPER CO. INOC 2,11,078 THE FOREIGN BUYER IS NOT PAYING THE MONEY DUE TO QUALITY PROBLEM 6 SHILPA CREATION EXPORTS 59,400 PARTY IS NOT PAYIN G THE MONEY 6,84,544 LESS: OTHER BALANCES WRITTEN OFF 28,764 NET AMOUNT W/O 6,55,780 ITA NO. 3553/MUM/2008 (ASSESSMENT YEARS: 2004-05) 10 HE SUBMITTED THAT WHEN THE AMOUNT OF DEBTS WERE PE RTAINING TO THE SALE TRANSACTIONS THEN THE CLAIM OF THE ASSE SSEE CANOT BE DENIED. 17. ON THE OTHER HAND, THE LEARNED DR SUBMITTED THA T THE ASSESSEE HAS FAILED TO PRODUCE ANY DETAIL OR EVIDEN CE BEFORE THE LOWER AUTHORITIES AND THE CLAIM OF THE ASSESSEE WAS DISALLOWED ONLY ON THIS ACCOUNT. EVEN THE ASSESSE E HAS NOT PRODUCED ANY DOCUMENTARY EVIDENCE TO SHOW THAT THES E BAD DEBTS WERE PERTAINING TO THE SALES AND ALREADY OFF ERED FOR TAXATION IN THE EARLIER YEARS. HE HAS RELIED UPON T HE ORDERS OF THE LOWER AUTHORITIES. 18. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND RE LEVANT RECORD. WE NOTE FROM THE DETAILS AT PAGE 4 OF TH E ASSESSMENT ORDER REPRODUCED IN ITS FOREGOING PARAG RAPH THAT THE ASSESSEE HAS WRITTEN OFF CERTAIN AMOUNT AGAINST THE PARTIES SHOWN THEREIN. WE FIND THAT AS REGARDS COT SILK TE XTILES , THE ADVANCE GIVEN FOR PURCHASE FORFEITED BY THE PARTY F OR NOT TAKING DELIVERY IN TIME. THEREFORE, THE SAID AMOUN T CANNOT BE A PART OF TRADING INCOME IN ANY OF THE PREVIOUS YEA RS. SIMILARLY, IN THE CASE OF TRANSWORLD CARGO SERVICE S THE AMOUNT PERTAINING TO THE DEBIT NOTE ISSUED BY THE A SSESSEE, BUT IT WAS NOT ACCEPTED BY THE PARTY AND THEREFORE, THE SAID AMOUNT ALSO WAS NOT ASSESSABLE AS INCOME OF THE A SSESSEE ITA NO. 3553/MUM/2008 (ASSESSMENT YEARS: 2004-05) 11 FOR THE EARLIER PREVIOUS YEAR. AS REGARDS, OTHER BAD DEBTS, WHEN THE ASSESSEE HAS FAILED TO FURNISH THE RECORD AND EVIDENCE TO SHOW THAT THE SAID AMOUNTS WERE PART OF THE TRADING INCOME OF THE ASSESSEES EARLIER YEARS THEN IT IS NOT ALLOWABLE AS DEDUCTION AS BAD DEBTS WRITTEN OFF. A CCORDINGLY, WE DO NOT FIN ANY ERROR OR ILLEGALITY IN THE ORDER OF THE CIT(A). 19. THE FOURTH GROUND OF APPEAL IS REGARDING DISALL OWANCE ON ACCOUNT OF REPAIR AND MAINTENANCE EXPENSES AMOUNTIN G TO RS.88,903/- THE AO DISALLOWED THIS EXPENDITURE ON THE GROUND TH AT OUT OF THE AMOUNT OF RS.88,903/- A SUM OF RS.32,08 0/- WERE PERTAINING TO THE PREVIOUS YEAR 1999-2000 AS THE BILLS WERE RAISED IN THE SAID YEAR. THEREFORE, AS PER THE A O SAID EXPENDITURE DOES NOT PERTAIN TO THE ASSESSMENT YEAR UNDER CONSIDERATION. AS REGARDS THE BALANCE AMOUNT OF R S.56,013/-, THE ASSESSEE HAS NOT PRODUCED ANY BILL TO SHOW THE EXPENDITURE WAS INCURRED DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. 20. ON APPEAL, THE CIT(A) CONFIRMED THE DISALLOWAN CE MADE BY THE AO. 21. BEFORE US THE LEARNED AR OF THE ASSESSEE HAS S UBMITTED THAT SINCE THE ASSESSEE HAS PAID PART OF THESE EXPE NDITURES DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR, THEREFORE THE EXPENDITURE WAS CLAIMED IN THIS YEAR. HE HAS F URTHER ITA NO. 3553/MUM/2008 (ASSESSMENT YEARS: 2004-05) 12 POINTED OUT THAT THE ASSESSEE HAS NOT CLAIMED ANY E XPENDITURE TOWARDS REPAIRS AND MAINTENANCE IN THE EARLIER YEAR S. THEREFORE, THE SAME SHOULD BE ALLOWED IN THIS YEAR . 22. ON THE OTHER HAND, THE LEARNED DR HAS POINTED THAT THE EXPENDITURE WAS NOT INCURRED PERTAINING TO THE PERI OD RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION THEREFOR E IT CANNOT BE ALLOWED. 23. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND RE LEVANT RECORD. IT IS UNDISPUTED FACT THAT THE EXPENDITURE TO THE TUNE OF RS.32,080/- PERTAINING TO THE YEAR 1999-2000 AS THE BILLS WERE RAISED IN THE YEAR. THEREFORE, THERE IS NO QUESTION OF ALOWABILITY OF THE SAID EXPENDITURE IN THE YEAR UND ER CONSIDERATION. AS REGARDS REMAINING AMOUNT, WHEN T HE ASSESSEE FAILED TO PRODUCE ANY RECORD OR EVIDENCE T HAT THE EXPENDITURE WAS INCURRED DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION EVEN BEFORE US, THEN THE SAME CANNOT BE ALLOWED. ACCORDINGLY, WE DO NOT FIN D ANY ERROR OR ILLEGALITY IN THE ORDER OF THE CIT(A) QUA THIS ISSUE. 24. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. PRONOUNCED IN THE OPEN COURT ON 4.6.2010 SD SD (P.M.JAGTAP) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMB ER MUMBAI, DATED 4TH JUNE 2010 SRL:28510 ITA NO. 3553/MUM/2008 (ASSESSMENT YEARS: 2004-05) 13 COPY TO: 1. M/S MONALISA KNITWEAR EXPORTS 7, CAMA INDUSTRIAL ESTATE SUNMILL COMPOUND, LOWER PAREL (W), MUMBAI-400013 2. INCOME TAX OFFICER WARD 18(1)(3), PIRAMAL CHAMBERS, LALBAUG, MUMBAI-400012. 3 CIT MUMBAI CITY-VIII, MUMBAI. 4.CIT (A)-XVIII, MUMBAI. 6. DR B BENCH BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI