GRAND WOOD WORK & SAW MILLS, MUMBAI V. ITO 20(1)(2), MUMBAI

ITA 380/MUM/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9542 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 17-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHAUDHARY ARUN KUMAR SINGH LD
• Assessee Lawyers: MANDAR VAIDYALD
• Keywords: Business income; Additional evidence; Revenue expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G, MUMBAI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER & SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NO.380/MUM/2017 ASSESSMENT YEAR: 2012-13 GRAND WOOD WORK & SAW MILLS PLOT NO.127 E.S. PATANWAL A CROSS ROAD GORUPUDE ROAD MUMBAI- 400 023 PAN AAAFG1160F VS. INCOME TAX OFFICER - 20(1)(2) ROOM NO.119,1 ST FLOOR PIRAMAL CHAMBERS, LALBAUGH MUMBAI- 400 012 (APPELLANT) RESPONDENT) & ITA NO.7556/MUM/2016 ASSESSMENT YEAR: 2012-13 INCOME TAX OFFICER - 20(1)(2) ROOM NO.119,1 ST FLOOR PIRAMAL CHAMBERS, LALBAUGH MUMBAI-400 012 VS. GRAND WOOD WORK & SAW MILLS PLOT NO.127 E.S. PATANWALA CROSS ROAD GORUPUDE ROAD MUMBAI-400 023 PAN AAAFG1160F (APPELLANT) RESPONDENT) ASSESSEE BY : SHRI MANDAR VAIDYA, LD. AR REVENUE BY : SHRI CHAUDHARY ARUN KUMAR SINGH, LD. DR DATE OF HEARING :13.12.2018 DATE OF PRONOUNCEMENT :19.12.2018 ITA NOS.380/MUM/2017 &7556/ MUM/2016 GRAND WOOD WORKS & SAW MILLS 2 O R D E R PER SHRI M. BALAGANESH, ACCOUNTANT MEMBER THESE CROSS APPEALS ARISE OUT OF THE ORDER OF THE L D. COMMISSIONER OF INCOME-TAX (APPEALS)-32 [CIT(A)], MUMBAI [ IN SH ORT THE LD. CIT(A)] IN APPEAL NO. CIT(A)-32/IT-182/ITO-20(1)(2)/15-16 DATED 25/10/2016 AGAINST THE ORDER OF ASSESSMENT FRAMED U /S 143(3) OF THE INCOME TAX ACT,1961 [HEREINAFTER REFERRED TO AS THE ACT] DATED 23/03/2015 BY THE INCOME TAX OFFICER-20(1)(2), MUMB AI [HEREINAFTER REFERRED TO AS THE LD. AO] FOR THE A SSESSMENT YEAR [AY] 2012-13. 2. FIRST LET US TAKE UP ASSESSEE APPEAL IN ITA NO.3 80/ MUM/2017. AT THE OUTSET, THE LD.AR OF THE ASSESSEE BROUGHT TO OUR NOTICE THAT THOUGH THE REGISTRY HAS ISSUED DEFECT N OTICE STATING THAT THERE IS A DELAY OF 362 DAYS IN FILING OF APPEAL BE FORE THIS TRIBUNAL BY THE ASSESSEE, EFFECTIVELY THERE WAS NO DELAY AT ALL IN AS MUCH AS THE DATE OF COMMUNICATION OF THE ORDER OF LD. CIT(A ) WAS WRONGLY MENTIONED IN THE ORIGINAL FORM 36 AS 22/11/2015 INS TEAD OF 22/11/2016. HE ALSO DREW OUR ATTENTION TO PAGE NO. 87 OF THE PAPER BOOK EXPLAINING THE SAME IN THE FORM OF A LETTER AD DRESSED TO THE REGISTRY. WE HAVE GONE THROUGH THE SAME AND FIND TH AT THERE IS NO DELAY IN FILING OF APPEAL BY THE ASSESSEE IN THE IN STANT CASE. 3. THE FIRST ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN UPHOLDING THE ADDIT ION IN THE SUM OF RS.17,11,818/- U/S 41(1) OF THE ACT IN RESPECT OF L IABILITY WRITTEN BACK PERTAINING TO DUES PAYABLE TO BOMBAY PORT TRUST (IN SHORT BPT). ITA NOS.380/MUM/2017 &7556/ MUM/2016 GRAND WOOD WORKS & SAW MILLS 3 4. THE ASSESSEE IS A REGISTERED PARTNERSHIP FIRM C ARRYING ON WAREHOUSING BUSINESS UNDER THE NAME AND STYLE OF M/ S. SANKALCHAND AMRITALAL PAREKH AND ALSO ENGAGED IN MA NUFACTURING OF WOODEN ARTICLES FOR THE USE OF TEXTILE INDUSTRY UNDER THE NAME AND STYLE OF M/S GRAND WOOD WORKS & SAW MILLS. THE INCOME DERIVED FROM THESE TWO ACTIVITIES WERE OFFERED BY T HE ASSESSEE AS BUSINESS INCOME. THE ASSESSEE HAS OBTAINED WAREHOUS ING LICENSE FROM MUNICIPAL CORPORATION OF GREATER MUMBAI AND CA RRYING ON WAREHOUSING BUSINESS SINCE LAST SEVERAL YEARS. THE ASSESSEE IS A TENANT OF BPT. THE ASSESSEE IS LIABLE TO PAY RENTA LS IN RESPECT OF PREMISES TAKEN ON LEASE TO BPT. BPT INCREASED THE R ENTALS WHICH WAS SUBJECT MATTER OF LITIGATION FOR AY 1990-91,91- 92 & 92-93. HOWEVER, THE ASSESSEE IN THE PAST, HAS PROVIDED FOR THE INCREMENTAL RENTALS PAYABLE TO BPT AND CLAIMED THE SAME AS DEDUCTION IN THE RETURNS FILED FOR AY 1990-91,91-92 & 92-93. THIS WAS DISALLOWED BY THE LD. AO. THE RENTALS WERE ULTI MATELY FIXED AT A PARTICULAR PRICE BY THE HONBLE SUPREME COURT VID E ITS ORDER DATED 13/01/2004. BUT THE DISPUTE IN INCOME TAX PROCEEDIN GS REGARDING THE ALLOWABILITY OF RENTALS WHICH WERE MADE ONLY ON A PROVISIONAL BASIS BUT NOT ACTUALLY PAID TO THE TENANT WERE PEND ING BEFORE THE HONBLE BOMBAY HIGH COURT. PURSUANT TO ORDER OF THE HONBLE APEX COURT FIXING THE RENTALS PAYABLE TO BPT, THE HONBL E BOMBAY HIGH COURT IN ITA NO. 838 & 839 OF 2000 DATED 04/09/2008 HELD THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION ONLY TO THE EXTE NT OF RENT ULTIMATELY FIXED BY THE HONBLE APEX COURT. THIS DE CISION WAS RENDERED BY THE HONBLE BOMBAY HIGH COURT PURSUANT TO THE APPEAL ITA NOS.380/MUM/2017 &7556/ MUM/2016 GRAND WOOD WORKS & SAW MILLS 4 PREFERRED BY THE REVENUE BEFORE HONBLE COURT AGAIN ST THE ORDER OF TRIBUNAL WHEREIN, RELIEF WAS GRANTED TO THE ASSESSE E. THE GIVING EFFECT ORDER TO THIS HIGH COURT ORDER WAS PASSED BY THE LD. AO ON 30/03/2009 WHICH ARE ENCLOSED IN PAGE NOS. 52 TO 54 OF THE PAPER BOOK. 5. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSE E WROTE BACK THE LIABILITIES REPRESENTING INCREMENTAL RENTALS PA YABLE TO BPT IN THE SUM OF RS.17,11,818/- (RS.5,96,358/- PERTAINING TO GRAND WOOD WORKS AND SAW MILLS AND RS.11,15,459/- PERTAINING T O SANKALCHAND AMRITALAL PAREKH AS STATED SUPRA) AND CREDITED THE SAME TO ITS PROFIT AND LOSS ACCOUNT. THE ASSESSEE IN THE RETURN OF INC OME FILED FOR THE AY 2012-13 REDUCED THIS SUM OF RS.17,11,818/- IN TH E COMPUTATION OF INCOME ON THE GROUND THAT FOR THE EARLIER YEARS, THE INCREMENTAL RENTALS WERE NOT ALLOWED AS A DEDUCTION PURSUANT TO GIVING EFFECT ORDER PASSED FOR ORDER OF HONBLE BOMBAY HIGH COURT DATED 30/03/2009. THE LD. AO IGNORED THE GIVING EFFECT OR DER PASSED BY HIS PREDECESSOR PURSUANT TO HIGH COURT ORDER AND SI MPLY PROCEEDED TO ADD THE SUM OF RS.17,11,818 /- OF THE SECTION 41(1) OF THE ACT ON THE GROUND THAT THE TRIBUNAL HAD GRAN TED RELIEF TO THE ASSESSEE AND HENCE ASSESSEE CANNOT BE GIVEN DOUBLE BENEFIT FOR THE VERY SAME AMOUNT. THIS ACTION OF THE LD. AO WAS UPHELD BY THE LD. CIT(A). AGGRIEVED, THE ASSESSEE IS IN APPEAL BE FORE US. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. FROM THE FA CTS NARRATED ABOVE, WE FIND THAT THE ASSESSEE IS ENTITLED FOR DE DUCTION OF RS.17,11,818/- AS AN ITEM TO BE REDUCED FROM COMPUT ATION OF TOTAL ITA NOS.380/MUM/2017 &7556/ MUM/2016 GRAND WOOD WORKS & SAW MILLS 5 INCOME. WE FIND THAT THE LOWER AUTHORITIES HAD ERRO NEOUSLY PROCEEDED ON THE GROUND THAT ASSESSEE WAS GRANTED R ELIEF BY THIS TRIBUNAL VIDE ORDER DATED 31/03/1994 FOR AY 1990-91 ,91-92 & 92- 93 IN RESPECT OF PROVISION MADE FOR INCREMENTAL REN TALS. BUT THE LOWER AUTHORITIES HAD GROSSLY ERRED IN NOT CONSIDER ING THE GIVING EFFECT ORDER TO HIGH COURT ORDER PASSED BY THE LD. AO ON 30/03/2009 WHEREIN, ULTIMATELY THE ASSESSEE WAS DEN IED THE BENEFIT OF DEDUCTION TOWARDS PROVISION FOR INCREMEN TAL RENTALS AS THE INCREASED RENTALS WERE DETERMINED AT A PARTICUL AR FIGURE BY HONBLE APEX COURT VIDE ITS ORDER DATED 13/01/2004. WE HOLD THAT THERE IS NO DOUBLE BENEFIT CLAIMED BY THE ASSESSEE IN THE FACTS OF THE INSTANT CASE AS NARRATED ABOVE. MOREOVER, WE HO LD THAT THE PROVISIONS OF SECTION 41(1) OF THE ACT COULD BE INV OKED ONLY IF DEDUCTION FOR THE VERY SAME SUM HAS BEEN ALLOWED IN EARLIER YEARS FOR THE ASSESSEE, WHICH IN THE FACTS OF THE INSTAN T CASE, WAS NOT GRANTED VIDE ORDER OF LD. AO DATED 30/3/2009. ACCO RDINGLY, WE DIRECT THE LD. AO TO DELETE THE ADDITION MADE IN TH E SUM OF RS.17,11,818/- U/S 41(1) OF THE ACT AND ALLOW THE G ROUND NO.1 RAISED BY THE ASSESSEE. 7. THE NEXT GROUND TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) WERE JUSTIFIED IN UPHOLDING THE DISA LLOWANCE OF RS.2,04,186/- IN RESPECT OF SALES PROMOTION EXPENSE S IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THE LD. AO OBSERVED THAT FROM THE DETAILS OF SALES PROMOTION EXPENDITURE FURNISHED IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD DEBITED TH E SUM OF RS.2,04,186/- TOWARDS SALES PROMOTION EXPENSES IN I TS ITA NOS.380/MUM/2017 &7556/ MUM/2016 GRAND WOOD WORKS & SAW MILLS 6 WAREHOUSING BUSINESS. FROM THE DETAILS SUBMITTED BY THE ASSESSEE, THE LD. AO OBSERVED THAT THIS EXPENDITURE OF RS. 2,04,186/- PERTAINS TO PURCHASE OF GOLD AND SILVER WHICH WERE GIVEN TO VARIOUS CUSTOMERS FOR PROMOTING ITS BUSINE SS. THE ASSESSEE ALSO PLEADED THAT THE WAREHOUSING RECEIPTS DERIVED BY IT WERE OFFERED TAX AS INCOME FROM BUSINESS AND THAT T HE SAID SALES PROMOTION EXPENDITURE WERE INCURRED IN ORDER TO PRO MOTE THE SAID BUSINESS AND TO INVITE NEW CUSTOMERS FOR ITS WAREHO USING ACTIVITY. THE LD. AO HELD THAT THIS SUM OF RS.2,04,186/- INCU RRED TOWARDS SALES PROMOTION AS REPRESENTING PURCHASE OF GOLD AN D SILVERS HAS GOT NOTHING TO DO WITH THE WAREHOUSING ACTIVITY OF THE ASSESSEE ACCORDINGLY PROCEEDED TO DISALLOW THE SAME. THIS AC TION OF THE LD. AO WAS UPHELD BY THE LD. CIT(A). AGGRIEVED, THE ASS ESSEE IS IN APPEAL BEFORE US. 7.1. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND F ROM THE CONSOLIDATED MANUFACTURING, TRADING, PROFIT AND LOS S ACCOUNT FOR THE YEAR ENDED 31/03/2012 RELEVANT TO AY 2012-13, N ET SALES DERIVED FROM MANUFACTURING OF WOODEN ARTICLES WERE ONLY RS.93,029/- AND CLOSING STOCK OF RS.89,619/-. THE W AREHOUSING RECEIPTS DURING THE YEAR WAS RS.79,41,384/-. APART FROM THIS, THE ASSESSEE HAD REFLECTED INTEREST INCOME ON FIXED DEP OSITS OF RS.5,95,014/- AND LIABILITIES NO LONGER REQUIRED WR ITTEN BACK TO THE TUNE OF RS.17,11,818/- BY WAY OF CREDIT TO THE PROF IT AND LOSS ACCOUNT. THE LD. AR ARGUED THAT SALES PROMOTION EXP ENDITURE INCURRED BY THE ASSESSEE IN THE PAST WERE DULY ALLO WED AS DEDUCTION AND HENCE THERE IS NO REASON FOR THE REVE NUE TO TAKE A ITA NOS.380/MUM/2017 &7556/ MUM/2016 GRAND WOOD WORKS & SAW MILLS 7 DIVERGENT VIEW DURING THE YEAR UNDER CONSIDERATION. WE FIND THAT THIS ARGUMENT OF THE LD. AR IS NOT ACCEPTABLE IN AS MUCH AS, DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD PURC HASED GOLD AND SILVER FOR ALLEGEDLY GIVING THE SAME TO ITS CUS TOMERS TO THE TUNE OF RS.2,04,186/- AND DEBITED THE SAME IN ITS WAREHO USING BUSINESS. WE DO NOT HAVE ANY DETAILS BEFORE US TO ASCERTAIN W HETHER SIMILAR ITEMS OF EXPENDITURE IN THE FORM OF PURCHASE OF GOL D AND SILVER WERE INCURRED IN THE PAST AND WHETHER THE SAME WERE ALLOWED AS REVENUE EXPENDITURE BY THE DEPARTMENT FOR THE EARLI ER AY. HENCE WE HAVE TO LOOK AT THIS ISSUE IN ISOLATION BASED ON THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THE ASSES SEE HAD DULY PRODUCED THE BILLS FOR INCURRENCE OF PURCHASE OF GO LD AND SILVER TO THE TUNE OF RS.2,04,186/-. BUT WE FIND THAT THE ASS ESSEE HAD NOT ESTABLISHED THE NEXUS BETWEEN THE INCURRENCE OF THI S EXPENDITURE VIS--VIS THE WAREHOUSING REVENUE DERIVED BY IT. HE NCE, WE HOLD THAT THE LOWER AUTHORITIES WERE JUSTIFIED IN DISALL OWING THIS CLAIM OF RS.2,04,186/- TOWARDS SALES PROMOTION EXPENSES. ACC ORDINGLY, THE GROUND NO. 2 RAISED BY THE ASSESSEE IS DISMISSED. 8. THE GROUND NO.3 RAISED BY THE ASSESSEE IS GENERA L IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. 10. LET US COME TO REVENUE APPEAL IN ITA NO.7556/MU M/2016 THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WH ETHER THE RENTAL INCOME DERIVED FROM THE WAREHOUSING ACTIVITIES OF T HE ASSESSEE IS TO BE BROUGHT TO TAX UNDER THE HEAD INCOME FROM BUS INESS OR UNDER ITA NOS.380/MUM/2017 &7556/ MUM/2016 GRAND WOOD WORKS & SAW MILLS 8 THE HEAD INCOME FROM HOUSE PROPERTY IN THE FACTS AN D CIRCUMSTANCES OF THE CASE. THE INTERCONNECTED ISSU E INVOLVED THEREIN IS WITH REGARD TO VIOLATION OF PROVISIONS O F RULE 46A OF THE INCOME TAX RULES BY THE LD. CIT(A) BY NOT AFFORDING AN OPPORTUNITY TO THE LD. AO WHILE GRANTING RELIEF TO THE ASSESSEE IN RESPECT OF THIS ISSUE. WE FIND THAT THE IMPUGNED ISSUE IS FAIRLY CO VERED IN FAVOUR OF THE ASSESSEE IN ITS OWN CASE BY THE ORDER OF THIS T RIBUNAL FOR AY 2010-11 IN ITA NO.206/MUM/2015 DATED 22/06/2017. TH E SAID ORDER IS REPRODUCED PAGE NO. 93-96 OF PAPER BOOK HE REIN UNDER: - THIS APPEAL BY REVENUE UNDER SECTION 253 OF INCOME TAX ACT IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOM E TAX (APPEALS)-29 [CIT(A)-29, MUMBAI] DATED 10-10-2014 FOR THE AY 201 0-11. FOR THIS REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN NOT ALLOWING AO TO EXAMINE THE FACT S PRODUCED BEFORE HIM TO TREAT WAREHOUSE RENT INCOME OF RS.62,56,664/ - UNDER THE HEAD BUSINESS INCOME & ALLOWED ALL THE EXPENSES'. 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DECIDING WAREHOUSE RENT INCOME UNDER THE HEAD BUSINESS INCOME AND ALLOWED ALL EXPENSES EVEN WHEN PREREQUISITE TO RULE 46A OF THE I. T. RULES WERE NOT IN EXISTENCE A ND WITHOUT AFFORDING SPECIFIC OPPORTUNITY TO THE AO AS REQUIRED UNDER RU LE 46A. 2. WE HAVE HEARD THE RIVAL SUBMISSIONS OF LD REPRES ENTATIVES BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. AT THE OUTSET, OF THE HEARING THE LEARNED AR OF THE ASSESSEE ARGUED THAT THE GROUNDS OF APPEAL RAISED BY REVENUE IN THE PRESENT APPEAL IS SQUARELY COVERED IN FAVOUR OF ASSESSEE AND AGAINST REVENUE IN ASSESSEES OWN CASE FOR AY 2007-08 IN ITA NO. 785/MUM/2012 DATED 28-10-2015. ON THE OTHER HAND, THE LEARNED DR FOR REVENUE NOT DISPUTED THE CONTENTION OF THE L EARNED AR OF THE ASSESSEE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE ORDER OF CO-ORDINATE BE NCH IN ASSESSEES OWN CASE FOR AY 2007-08. WE HAVE SEEN THAT THE REVENUE HAS RAISED IDENTICAL GROUND OF APPEAL FOR AY 2007-08 AND THE CO-ORDINATE BENCH OF TRIBUNAL PASSED THE FOLLOWING ORDER IN PARA 4 WHICH READS AS UNDER: - ITA NOS.380/MUM/2017 &7556/ MUM/2016 GRAND WOOD WORKS & SAW MILLS 9 4. AFTER CONSIDERING THE FACTS ON RECORD AND THE RIVAL CONTENTIONS PUT FORWARD BEFORE US, WE OBSERVE THAT THE ASSESSEE IS NOT MERELY LETTING OUT ITS PREMISES FOR WAREHOUSING BUT WERE DOING COM PLEX COMMERCIAL ACTIVITY. ALL THE DUTIES CAST UPON THE ASSESSEE WAS RESPONSIBLE FOR ENSURING THE INCOMING AND, OUTGOING OF GOODS APART FROM PROVIDING ADEQUATE SECURITY. THE CONSIDERATION RECEIVED BY TH E ASSESSEE FROM CLIENT IS NOT FOR LETTING THE PROPERTY ON RENTAL BA SIS BUT THE CONSIDERATION RECEIVED IS EXCLUSIVELY FOR PROVIDING THE BENEFITS OF BUSINESS SERVICE FACILITIES TO THE CLIENT. THE ASSESSEE IS NOT PROVI DING WAREHOUSING SEX- VICE TO ONE OR TWO FIXED CUSTOMERS. THERE IS NUMBER OF CUSTOMERS TO WHOM WAREHOUSING SERVICE IS PROVIDED. APART FROM TH AT THE GODWOWN CONTROL OF THE ASSESSEE; CUSTOMER HAD NO RIGHT OF O CCUPANCY. AS PER THE DEFINITION OF BUSINESS U/S 2(13) OF THE ACT, BU SINESS INCLUDE ADVENTURE OR CONCERN IN THE NATURE OF TRADE. THE WO RD ADVENTURE' IMPLIES A CALCULATIVE RISK AND SYSTEMATIC PATTERN A ND OPERATION INVOLVED IN A TRADE OR PRACTICE THAT WILL FULFIL TH E INSTANT' CASE OF THE ASSESSEE. IT IS PROVIDING ROUND THE CLOCK SERVICE T O THE CLIENTS FROM VARIOUS ASPECTS FROM LETTING OUT OF GOODS, THEIR SE CURITY ETC. WILL DEFINITELY FALL WITHIN THE PURVIEW OF BUSINESS INCO ME. WE ALSO FIND FROM THE ORDER OF THE ID. CIT(A) THAT THE A.O. HAS ACCEP TED THE CLAIM OF THE ASSESSEE AND TREATED THE INCOME AS BUSINESS INCOME IN ASSESSMENT YEARS 2005-06 & 2006-07. THEREFORE, WE SUSTAIN THE ORDER OF THE ID. CIT(A) TREATING THE ASSESSEE'S INCOME AS BUSINESS I NCOME. THIS GROUND OF THE REVENUE IS, THEREFORE, DISMISSED. 5. IN GROUND NO. 2, THE REVENUE IS AGGRIEVED BY THE DECISION OF ID. CIT(A) IN ALLOWING THE INCOME OF THE ASSESSEE AS BU SINESS: INCOME AND ALSO ALLOWING ALL THE EXPENSES BY VIOLATING RUL E 46A OF THE INCOME TAX RULES, 1962. 6. RULE 46A PROVIDES THAT WHENEVER SOME ADDITIONAL EVIDENCE IS ACCEPTED BY THE ID. CIT(A), THEN HE MUST GIVE AN OP PORTUNITY TO THE A.O. FOR CROSS EXAMINATION OR THOSE EVIDENCES AND O R CLARIFICATION OF THE GENUINENESS OF SUCH EVIDENCES PUT FORWARD. THAT IN THE PRESENT CASE, THE ID. CIT(A) IN HIS ENTIRE ORDER, WE DO NOT FIND ANYWHERE IN ACCEPTING ANY ADDITIONAL EVIDENCES. THE LD. D.R. AL SO FAILED TO SHOW US ANY ADDITIONAL EVIDENCES WHICH WERE THE LD. CIT( A). THUS, WHEN IT IS A FACT ON RECORD THAT THE ID. CIT(A) HAS NOT ACCEPT ED ANY ADDITIONAL EVIDENCE, IS NO QUESTION OF VIOLATION OF RULE 46-A BY THE LD. CIT(A). THEREFORE, THIS GROUND OF THE REVENUE IS ALSO DISMI SSED'. CONSIDERING THE ABOVE REFER DECISION OF THE TRIBUNAL, WE FIND T HAT THE GROUNDS OF APPEAL RAISED BY REVENUE ARE SQUARELY COVERED AGAIN ST THE REVENUE. THE FACTS OF THE PRESENT AND GROUNDS OF APPEAL RAIS ED BY REVENUE ARE EXACTLY IDENTICAL. BY CONSIDERING THE ABOVE APPEAL IN ASSESSEES OWN CASE, WE DO NOT FIND ANY MERIT IN THE APPEAL RAISED BY THE REVENUE. HENCE, WE DISMISS THE SAME. 4. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ITA NOS.380/MUM/2017 &7556/ MUM/2016 GRAND WOOD WORKS & SAW MILLS 10 11. SINCE THE GROUND RAISED DURING THE YEAR UNDER C ONSIDERATION AND THE GROUNDS RAISED BY THE REVENUE FOR AY 2010-1 1 SUPRA ARE SIMILAR, THE ABOVE DECISION RENDERED BY THIS TRIBUN AL FOR AY 2010- 11 WOULD APPLY MUTATIS MUTANDIS TO THE FACTS OF THE INSTANT CASE. WE ALSO FIND THAT NO ADDITIONAL EVIDENCES WERE FILE D BY THE ASSESSEE BEFORE LD. CIT(A) AND HENCE THERE COULD NO T BE ANY VIOLATION OF PROVISIONS OF RULE 46A OF THE RULES AS CONTENDED BY THE REVENUE IN ITS GROUNDS. 11.1. RESPECTFULLY FOLLOWING THE AFORESAID DECISION , THE GROUNDS RAISED BY THE REVENUE ARE HEREBY DISMISSED. 12. TO SUM UP, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 19 TH DECEMBER, 2018. SD/- SD/- (AMARJITH SINGH) (M. BALAGANESH ) JUDICIAL MEMBER ACCOUNTANT M EMBER MUMBAI, DATED : 19 TH DECEMBER, 2018 * THIRUMALESH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. THE CIT 5. THE DR, B BENCH, ITAT, MUMBAI ITA NOS.380/MUM/2017 &7556/ MUM/2016 GRAND WOOD WORKS & SAW MILLS 11 BY ORDER //TRUE COPY// (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI