MOTIRAM TOLARAM, MUMBAI V. ASST CIT CEN CIR 31, MUMBAI

ITA 3683/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 72007 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 24-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GANESH BARE
• Assessee Lawyers: J P BAIRAGRA
• Keywords: Fair market value

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE S/SHRI B.R.MITTAL,(JM) AND RAJENDRA (AM) . . , , ./I.T.A. NO.3683/MUM/2012 ( / ASSESSMENT YEAR : 2008-09) MOTIRAM TOLARAM LAALASIS, PLOT NO.291, 11 TH ROAD, CHEMBUR, MUMBAI-400071 / VS. ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-31, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020. ( & / APPELLANT) .. ( ' & / RESPONDENT) ./ ./PAN/GIR NO. : AABFM5203G & / APPELLANT BY : SHRI J.P.BAIRAGRA ' & * /RESPONDENT BY : SHRI GANESH BARE * - / DATE OF HEARING : 11.12.2013 * - /DATE OF PRONOUNCEMENT : 24.12.2013 / O R D E R PER B.R.MITTAL, JM: THE ASSESSEE HAS FILED THIS APPEAL FOR ASSESSM ENT YEAR 2008-09 AGAINST THE ORDER OF LD. CIT(A) DATED 14.3.2012 TAKING THE FOLL OWING GROUND : THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANC E OF RS.10,80,000/- UNDER SECTION 40A(2) AND ADMINISTRATIVE EXPENSES OF RS.2 ,36,000/-/-PAID TO M/S KUKREJA SERVICES PVT. LTD. 2. FACTS IN BRIEF ARE THAT DURING THE COURSE OF ASS ESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS MADE PA YMENT OF RS. 11,80,000 (RS.9,44,400 + RS.2,36,000/-) TOWARDS BUSINESS CEN TRE FACILITY AND ADMINISTRATION CHARGES TO M/S. KUKREJA SERVICES PVT LTD., A SISTER CONCERN FOR PROVIDING CERTAIN SERVICES TO THE ASSESSEE. THE ASSESSING OFFICER REFERRING T O SIMILAR PAYMENTS MADE TO THE SAME PARTY IN EARLIER YEARS, THE AO OBSERVED THAT EXPENS ES WERE UNDULY HIGH AND UNREASONABLE HAVING REGARD TO THE FAIR MARKET VALUE OF THE GOODS, SERVICES OR FACILITIES FOR WHICH PAYMENT WAS CHARGED DURING THE ASSESSMENT YEAR UNDER CONSIDERATION. AO ALSO OBSERVED THAT THERE HAS BEEN A QUANTUM LEAP IN THE CORRESPONDING AMOUNT OF I.T.A. NO.3683/MUM/2012 2 EXPENSES INCURRED DURING THE YEAR VIZ-A-VIS ASSESSM ENT YEARS 2005-06 AND 2006-07. AO ALSO OBSERVED THAT ASSESSEE DID NOT PRODUCE ANY D OCUMENTARY EVIDENCES TO PROVE THE EXACT CRITERIA ON WHICH THE PAYMENT HAS BEEN MADE T O ITS SISTER CONCERN. ACCORDINGLY, HE DISALLOWED THE PAYMENTS U/S.40A(2)(B) OF THE ACT MADE TO THE SISTER CONCERN BY THE ASSESSEE. IN THE FIRST APPEAL, LD CIT(A) RESTRICTE D THE DISALLOWANCE TO RS.10,80,000/- LAKHS. BEING AGGRIEVED, ASSESSEE IS IN FURTHER AP PEAL BEFORE THE TRIBUNAL. 3. AT THE TIME OF HEARING, LD A.R. PRODUCED A DECIS IONS OF ITAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2003-04 IN I.T.A. NOS 413 9 & 6114/NM/2007 ORDER DATED 20.10.2009 AND ITA NO.1219 & 2040/MUM/2010 (AY-2006 -07 & 2007-08), DATED 8.5.2013 AND SUBMITTED THAT ON SIMILAR FACTS THE T RIBUNAL HAS DECIDED THE ISSUE IN ASSESSEES FAVOUR. ON THE OTHER HAND, LD D.R. DUT IFULLY SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 4. WE HAVE CONSIDERED SUBMISSIONS OF LD REPRESENTAT IVES OF PARTIES AND ORDERS OF AUTHORITIES BELOW AS WELL AS THE DECISION OF THE TR IBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2003-04, 2006-07 & 2007-08 (SUPRA) . WE OBSERVE THAT SIMILAR ADDITION WAS MADE BY THE AO IN ASSESSMENT YEARS 200 3-04,2006-07 & 2007-08 (SUPRA) AND LD CIT(A) IN THE ASSESSMENT YEAR 2003-04 DELETE D THE ADDITION FOLLOWING THE DECISION OF THE TRIBUNAL IN ANOTHER GROUP CASE, NAM ELY M/S. VAZIRANI LAND DEVELOPERS. IN THE ASSESSMENT YEARS 2006-07 & 2007-08 ALSO, ON IDENTICAL FACTS SIMILAR ADDITION HAS BEEN MADE BY THE AUTHORITIES BELOW WAS DELETED BY TRIBUNAL TO WHICH ONE OF US IS A PARTY (JM). HENCE, FOLLOWING THE DECISION OF THE T RIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2003-04 AND 2006-07 & 2007-08 (SUP RA) AND ALSO IN THE ABSENCE OF ANY CONTRARY DECISION BROUGHT TO OUR NOTICE, RESPEC TFULLY FOLLOWING THE SAME, WE DELETE THE ADDITION OF RS.10,80,000/- FOR ASSESSMENT YEAR UNDER CONSIDERATION CONFIRMED BY LD. CIT(A). 5. IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH DECEMBER, 2013. F G 24 TH DECEMBER, 2013 * SD SD ( / RAJENDRA) ( . . /B.R.MITTAL) / ACCOUNTANT MEMBER / JUDICIAL MEMBER I.T.A. NO.3683/MUM/2012 3 MUMBAI: 24 /12/2013 . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. & / THE APPELLANT 2. ' & / THE RESPONDENT. 3. K ( ) / THE CIT(A)- CONCERNED 4. K / CIT CONCERNED 5. L 'N , - N , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) - N , /ITAT, MUMBAI