GAURISONS, MUMBAI V. ITO 12(3)(1), MUMBAI

ITA 3906/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92353 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 11-02-2015
• Assessment Year: 1998-1999
• Appeal Filed On: 04-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PAVAN KUMAR BEER LA
• Assessee Lawyers: NARYAN ATAL
• Keywords: Business income; Business expenditure; Bad and doubtful debts
• Section: 133A; 133(6)

Judgement Text

M/S. GAURISONS ITA 3906 / M/20 12 ITA 3907 /MUM/20 12 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI . . , , BEFORE SHRI B R BASKARAN , ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA ITA NO. : 39 0 6 /MUM/20 12 (ASSESSMENT YEAR: 1998 - 99) M/S GAURISONS , 161 - C, MITTAL TOWER, NARIMAN POINT, MUMBAI - 400 021 .: PAN: AAAFG 1167 C VS IT O - 1 2 ( 3 ) ( 1 ) , AAYAKAR BHAVAN, MUMBAI - 400 020 (APPELLANT) (RESPONDENT) ITA NO. : 3907 /MUM/20 12 (ASSESSMENT YEAR: 2002 - 03 ) M/S GAURISONS , 161 - C, MITTAL TOWER, NARIMAN POINT, MUMBAI - 400 021 .: PAN: AAAFG 1167 C VS IT O - 12 ( 3 ) (1) , AAYAKAR BHAVAN, MUMBAI - 400 020 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NARYAN ATAL RESPONDENT BY : SHRI PAVAN KUMAR BEERLA /DATE OF HEARING : 11 - 0 2 - 201 5 / DATE OF PRONOUNCEMENT : 21 - 04 - 201 5 ORDER , : PER VIVEK VARMA, JM: THE TWO APPEAL S ARE FILED BY THE ASSESSEE A GAINST THE ORDERS OF CIT(A) 23, MUMBAI, DATED 27.04.2012, WHEREIN, THE CIT(A) HAS SUSTAINED THE LEVY OF PENALTY OF RS. 1,80,375/ - IN ASSESSMENT YEAR 2002 - 03 AND RS. 2,95,989 IN ASSESSMENT YEAR 1998 - 99 U/S 271(1)(C). 2. SINCE BOTH THE APP E ALS PERTAIN TO THE SAME ASSESSEE, WE ARE DISPOSING OFF BOT H THE AP P EALS THROUGH COMMON AND CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. M/S. GAURISONS ITA 3906 / M/20 12 ITA 3907 /MUM/20 12 2 3 . THE FACTS ARE THAT THE ASSESSEE IS A FIRM ENGAGED IN BUSINESS OF TRADING IN OXYGEN CYLINDERS, WASHING MACHINE, MARBLES, WAREHOUSING AND OTHER COMMERCIAL ACTIVITIES . ITA NO. 390 6 /MUM/2012 : ASST. YEAR 1998 - 99 : 4. THE FOLLOWING GROUNDS HAVE BEEN TAKEN: THE UNDER MENTIONED GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO ONE ANOTHER: 1. THE LEARNED CIT(A) HAS ERRED IN RECORDING IN PARA (3) THAT NO REQUEST WAS MADE FOR FURTHER TIME, WHEN IN FACT M/S TODARWAL & TODARWAL, CHARTERED ACCOUNTANT FOR APPELLANT HAD SENT A LETTER FOR THE SAME ON 09 TH APRIL 2012 AND THE SAME WAS NOT ACCEPTED BY THE LEARNED CIT(A). 2. THE LEARNED CIT(A) FAILED TO APPRECIATE THE VARIOUS CASE LAWS CITE D IN SUBMISSION DATED 15 TH MARCH, 2012 BY M/S TODARWAL & TODARWAL, CHARTERED ACCOUNTANTS ON BEHALF OF THE ASSESSEE. 3. THE LEARNED CIT(A) ERRED IN CONFIRMING THE PENALTY OF RS. 2,95,989/ - U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. 4. SHE FURTHER ERRED IN HOLDING THAT THE DISALLOWANCE WAS A CASE OF CONCEALMENT AND THAT THE ASSESSEE HAD FURNISHED IN ACCURATE PARTICULARS OF INCOME. 5. SHE FAILED TO APPRECIATE THAT NO PENALTY WAS LEVYING U/S 271(1)(C), IN THE SAID MATTER. 6. THE APPELLANT PRAYS THAT THE PENALTY OF RS. 2,95 ,989/ - U/S 271(1)(C) BE DELETED. 5. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO MADE THE ADDITION ON ACCOUNT DIFFERENCE IN OPENING AND CLOSING STOCK AT RS. 1,58,500/ - AS THERE WAS NO TRADING ACTIVITY. THE AO ALSO DISALLOWED RS. 3,34,399/ - CLAIMED AS B AD DEBTS AND RS. 1,78,345/ - ON ACCOUNT OF TRAVELLING, TELEPHONE, ELECTRICITY, BUSINESS DEVELOPMENT EXPENSES AND MAINTENANCE CHARGES. 6. THESE DISALLOWANCES WERE AGITATED BEFORE THE CIT(A) WHO GAVE RELIEF ON ACCOUNT OF BAD DEBTS AND SUSTAINED THE OTHER DIS ALLOWANCE. THOSE DISALLOWANCES WERE SUSTAINED BY THE ITAT. 7. IN THE PENALTY PROCEEDINGS, THE AO PROCEEDED TO LEVY THE PENALTY ON THE TWO ADDITIONS SUSTAINED @ 150%. 8. WE ARE THEREFORE SIZED WITH THE TWO ITEMS OF ADDITION ONLY. 9. THE FACT THAT THERE WAS NO BUSINESS DURING THE YEAR IS FACT. 10. IT IS ALSO A FACT THAT THE ASSESSEE VALUED ITS CLOSING STOCK AT COST OR MARKET VALUE WHICHEVER IS LOWER AND ON THAT BASIS ADOPTED M/S. GAURISONS ITA 3906 / M/20 12 ITA 3907 /MUM/20 12 3 THE MARKET VALUE OF OBSOLETE STOCK IS ALSO NOT DISPUTED. THE REVENUE AUTHORITIE S WERE OF THE VIE W THAT THE COST SHOULD HAVE BEEN TAKEN, ACCORDING TO US, WAS AN INFIRM PRESUMPTION. THE ASSESSEE DURING REGULAR PROCEEDINGS AND IN PENALTY PROCEEDINGS SHOWED THE VALUE & REASONABLE VALUE OF ITS PRODUCTS. THIS INFORMATION AND DETAIL WAS ALWAYS THERE WITH THE REVENUE AUTHORITIES. IN SUCH A CASE, AN ALLEGATION ON THE ASSESSEE THAT IT HAD CONCEALED INCOME OR PROVIDED INACCURATE PARTICULARS OF INCOME , WOULD BE WRONG. 11. IN S O FAR AS DISALLOWANCE OF ITEMS OF P&L ACCOUNT ARE CONCERNED, IT IS FACT THAT THE AO HAD MADE THE DISALLOWANCES ON AD - HOC BASIS, BECAUSE THE ASSESSEE COULD NOT PROVIDE NECESSARY DETAILS. 12. NO DOUBT THE ASSESSEE COULD NOT PROVIDE THE NECESSARY DETAILS, BUT THE FACT REMAINS THAT THESE EXPENSES WERE ROUTINE ADMINISTRATION EXPENSES. THE ASSESSEE IS NOT A PROPRIETARY CONCERN, WHERE ONE CAN THINK OF DISALLOWANCES MADE ON PERSONAL USE. IN SUCH A CIRCUMSTANCE , PENALTY IS NOT EXIGIBLE. 13. CONSIDERING THE ENTIRE C IRCUMSTANCE , WE ARE OF THE OPINION THAT PENALTY IS NOT EXIGIBLE. 14. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) & DIRECT THE AO TO DELETE THE PENALTY AS IMPUGNED BY HIM. 15. THE APPEAL, AS FILED BY THE ASSESSEE IS THEREFORE ALLOWED. ITA NO. 390 7 /M UM/2012 : ASST. YEAR 2002 - 0 3 : 16. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: THE UNDER MENTIONED GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO ONE ANOTHER: 1. THE LEARNED CIT(A) HAS ERRED IN RECORDING IN PARA (3) THAT NO REQUEST WAS MADE FOR FURTHER TIME, WHEN IN FACT M/S TODARWAL & TODARWAL, CHARTERED ACCOUNTANT FOR APPELLANT HAD SENT A LETTER FOR THE SAME ON 09 TH APRIL 2012 AND THE SAME WAS NOT ACCEPTED BY THE LEARNED CIT(A). 2. THE LEARNED CIT(A) FAILED TO APPRECIATE THE VARIOUS CASE LAWS CITED IN SUBMISSI ON DATED 15 TH MARCH, 2012 BY M/S TODARWAL & TODARWAL, CHARTERED ACCOUNTANTS ON BEHALF OF THE ASSESSEE. 3. THE LEARNED CIT(A) ERRED IN CONFIRMING THE PENALTY OF RS. 1,80,375/ - U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. M/S. GAURISONS ITA 3906 / M/20 12 ITA 3907 /MUM/20 12 4 4. SHE FURTHER ERRED IN HOLDING THAT THE DIS ALLOWANCE WAS A CASE OF CONCEALMENT AND THAT THE ASSESSEE HAD FURNISHED IN ACCURATE PARTICULARS OF INCOME. 5. SHE FAILED TO APPRECIATE THAT NO PENALTY WAS LEVYING U/S 271(1)(C), IN THE SAID MATTER. 6. THE APPELLANT PRAYS THAT THE PENALTY OF RS. 1,80,375/ - U/S 27 1(1)(C) BE DELETED. 17. THE FACTS PERTAINING TO ADDITION MADE AND PENALTY LEVIED ARE I) DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO HAD OBSERVED THAT THE FIRM HAD DEBITED OFFICE RENT AT RS. 1,20,000/ - FOR THE USE OF OFFICE PREMISES AT 304 - B, MANISH COMMERCIAL BUILDING, WORLI. HOWEVER, IT WAS OBSERVED FROM THE RECORDS THAT THE FIRM HAD GIVEN OFFICE ADDRESS AS 161 - C, MITTAL TOWER, NARIMAN POINT, MU M BAI. TO SUBSTANTIATE THE CLAIM, THE ASSESSEE FIRM FILED CONFIRMATION FROM ANIKA GUPTA AND AVANTIKA GUPTA, HAVING RECEIVED RS. 10,000/ - PER MONTH EACH FOR THE USE OF PREMISES AT MANISH COMMERCIAL BLDG. WHICH WERE SIGNED BY MR. SUSHIL KUMAR GUPTA, THE PARTNER OF THE FIRM IN THE CAPACITY AS NATURAL GUARDIAN. SINCE AS PER CONFIRMATION THE RENT PAID COMES TO RS. 2,40,000/ - , THE ASSESSEE WAS ASKED TO EXPLAIN THE SAME AND ASSESSEE VIDE LETTER DTD. 5/12/2000 STATED THAT 'THE FIRM HAS PAID OFFICE RENT OF RS. 5000/ - PER MONTH EACH TO AVANTIKA GUPTA AND ANIKA GUPTA. DUE TO TYPOGRAPHICAL ERROR THE SAME HAS BEEN MENT IONED AS RS. 10,000/ - PER MONTH '. II) AS REGARDS UTILIZATION OF OFFICE PREMISES, IT WAS REVEALED FROM THE LOCAL ENQUIRY THAT THE FIRM HAD NEVER OPERATED FROM THE OFFICE AT 304B MANISH COMMERCIAL BUILDING. UNDER THE CIRCUMSTANCES, THE AO HAD CAME TO THE CONCLU SION THAT THE PAYMENT OF OFFICE RENT IS A DEVISED ONLY TO INFLATE THE EXPENSES IN HANDS OF THE ASSESSEE FIRM AND REDUCE THE PROFIT AND ACCORDINGLY, DISALLOWED THE PAYMENT OF OFFICE RENT AT RS. 2,40,000/ - . III) THE ASSESSEE FIRM HAD DEBITED AN AMOUNT OF RS.4,43 ,789/ - ON ACCOUNT OF REPAIRS. ASSESSEE FIRM HAD FILED A DEBIT NOTE FROM MANGLA SHELTER P.M. AND ALSO DETAILS OF REPAIRS AND MAINTENANCE. THE AO HAD OBSERVED THAT THERE WAS NO GODOWN SHOWN 10 THE BALANCE SHEET AND THE PLACE OF REPAIRS SHOWN IN DEBIT AND DET AILS DIFFERS THEREFORE, THE ASSESSEE WAS ASKED TO EXPLAIN SUCH HUGE EXPENDITURE. THE ASSESSEE FIRM VIDE LETTER DTD. 6/11/2000 STATED THAT THEY HAVE NO OWNERSHIP GODOWN AND THEY HAVE RENTED GODOWN AT BYCULLA. THE AO HAD OBSERVED THAT THE OWNER OF THE GODOWN PREMISES WAS ONE DIANA SOAP CO SITUATED AT SUSSEX CROSS ROAD BYCULLA AND NOT SAIDPUR JUTE CO. AS SHOWN IN THE DEBIT NOTE FOR REPAIRS OF MANGLA SHELTERS PVT.LTD. THE ASSESSEE FIRM ALSO FAILED TO FURNISH THE DETAILS CALLED BY AO, SUCH AS APPLICATION FOR PER MISSION WITH APPROVED PLAN, ARCHITECT'S CERTIFICATE, PLAN SUBMITTED TO BMC, NOC FROM BMC AND COMPLETION CERTIFICATE FROM BMC ETC. SINCE THE ASSESSEE FIRM FAILED TO FURNISH THE REQUISITE DOCUMENTARY EVIDENCES, THE AO HAD CAME TO THE CONCLUSION THAT NO REPAI R WORK WAS CARRIED OUT AT DIANA SOAP CO. COMPOUND BUT OBTAINED A DEBIT NOTE FROM MANGALA SHELTERS P. LTD., A GROUP CONCERN TO INFLATE THE EXPENSES AND AVOID TAX. ACCORDINGLY, THE EXPENSES OF RS. 4,43,789/ - WERE DISALLOWED AND ADDED BACK TO THE INCOME . 1 8 . THE IMPUGNED ISSUES REACHED THE ITAT IN QUANTUM, WHEREIN THE COORDINATE BENCH RESTORED THE ISSUES TO THE AO FOR FRESH ADJUDICATION. IN THE ASSESSMENT PROCEEDINGS CONSEQUENT TO ITAT M/S. GAURISONS ITA 3906 / M/20 12 ITA 3907 /MUM/20 12 5 ORDERS, THE AO SOUGHT INFORMATION U/S 133A AND IN THESE PROCEEDINGS AS WE LL, THE ASSESSEE WAS UNABLE TO SUBSTANTIATE. 19 . THE FACTS ON WHICH THE ADDITIONS WERE MADE AND PENALTY IMPOSED ARE, DURING A.Y. 1998 - 99, THE ASSESSEE FIRM HAD A GODOWN, BEING TAKEN ON RENT FROM M/S. DIANA SOAP. THE ASSESSEE FIRM INCURRED EXPENSES OF RS. 4,43,789/ - FOR THE REPAIRS OF THE GODOWN. THE ASSESSING OFFICER HAS DISALLOWED REPAIRS AND MAINTENANCE EXPENSES OF RS.4,43,789/ - ON THE GROUND THAT THERE WAS ERROR IN THE ADDRESS WHICH WAS LATER RECTIFIED BY THE CONTRACTOR. THE ASSESSEE WAS UNDER THE B ONA FIDE BELIEF THAT THE EXPENSES ARE ALLOWABLE. THE ASSESSEE WAS USING THE PREMISES AS S WAREHOUSE AND INCOME FROM WAREHOUSING WAS TREATED AS BUSINESS INCOME IN PREVIOUS YEARS . AND THE APPELLANT HAD PAID RENT OF RS.5,000I - PER MONTH TO AVANTIKA GUPTA AND RS.5,000/ - PER MONTH TO ANIKA GUPTA. THE AGREEMENT PERTAINING TO LEASE OF PREMISES AT MANISH BUILDING WAS OVER. CONFIRMATION FROM THE OWNER THAT PREMISES WAS RENTED WERE PRODUCED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS RAISED THE ISSUE OF TWO PREMISES 304 B AND 304 C. HE FAILED TO APPRECIATE THAT BOTH 304 B AND 304 C TOGETHER FORM ONLY ONE PREMISE AND WHICH HAS BEEN TAKEN ON RENT BY THE APPELLANT. THE SECRETARY OF MANISH COMMERCIAL CENTRE WAS ASKED BY THE ASSESSING OFFICER TO FURNISH THE NAME OF THE FLAT OWNER CONFIRMATION WHETHER THE FLAT IS GIVEN AND NAME OF THE CONCERN. THERE WAS NO RESPONSE FROM THE SECRETARY AND THERE IS NO SECRETARY FOR THE SOCIETY. THE MANAGEMENT OF THE SOCIETY IS TAKEN OVER BY DEPUTY REGISTRAR OF SOCIETY WHO APPOI NTED AN ADMINISTRATOR TO MANAGE THE SAME. THE ADMINISTRATOR ATTENDS THE PREMISES FOR JUST A FEW MINUTES IN A FORTNIGHT AND THEREFORE APPARENTLY DID NOT REPLY. THE OFFICE PREMISES WAS USED FOR THE PURPOSE OF BUSINESS. TURNOVER OF RS.29,55,212/ - WAS MADE POS SIBLE DUE TO TAKING THIS PREMISE ON RENT. PREVIOUS YEAR TURNOVER WAS NIL. THE PREMISES WAS USED FOR THE PURPOSE OF BUSINESS AND HENCE THE EXPENDITURE OF RS.1,20,000/ - ON ACCOUNT OF OFFICE IS ALLOWABLE AS BUSINESS EXPENDITURE . THE FIRM HAS NOT PAID ANY OTH ER OFFICE RENT TO ANY OTHER ENTITY AND HAS NO OFFICE PREMISES OF ITS OWN. THE APPELLANT ALSO FILED CONFIRMATION FROM AVANTIKA GUPTA AND ANIKA GUPTA WHO CONFIRMED HAVING RECEIVED RS.60,000/ - EACH FROM THE APPELLANT AS RENT FOR ONE YEAR FOR THE PERIOD APRIL 1997 TO MARCH, 1998. ON THE OTHER HAND, THE ASSESSING OFFICER AFTER DISCUSSING IN DETAIL IN THE ASSESSMENT ORDER CAME TO THE CONCLUSION THAT THE APPELLANT HAS NOT BEEN ABLE TO ESTABLISH THAT IT HAD CARRIED OUT THE BUSINESS FROM THE PREMISES (304 B OR 304 C ) WHICH HAVE BEEN TAKEN ON RENT FROM AVANTIKA GUPTA AND ANIKA GUPTA. THE APPELLANT HAS ALSO NOT SUBMITTED ANY DOCUMENTARY EVIDENCE TO PROVE THAT THE BUSINESS WAS CARRIED OUT AT MANISH COMMERCIAL CENTRE. THEREFORE THE ASSESSING OFFICER HELD THAT THE PAYMENT OFFICE RENT IS DEVISED ONLY TO INFLATE THE EXPENSES IN THE EXPENDITURE HEAD TO REDUCE THE PROFIT AND TO SHOW INCOME IN THE HANDS OF THE MINORS. ACCORDINGLY, THE ASSESSING OFFICER DISALLOWED THE RENTAL EXPENDITURE OF RS.1,20,000/ - . THE ASSESSING OFFICER IS SUED NOTICES U/S 133(6) TO SMT. ANJANA GUPTA MOTHER OF THE MINORS MS. AVANTIKA ET MS. ANIKA GUPTA AND SECRETARY OF MANISH COMMERCIAL CENTRE, WORLI. IN RESPONSE, SMT. ANJANA GUPTA VIDE LETTER DATED 23/02/2005 FURNISHED (I) COPY OF RETURN OF INCOME IN WHICH THE INCOME OF MINORS MS. AVANTIKA & MS. ANIKA GUPTA CLUBBED WITH THE M/S. GAURISONS ITA 3906 / M/20 12 ITA 3907 /MUM/20 12 6 INCOME OF SMT. ANJANA GUPTA U/S 64(1A) OF THE I.T. ACT (II) PROOF OF RENT RECEIVED (III) COPY OF PURCHASE AGREEMENT OF FLAT NO.304C (IV) IN RESPECT OF RENT AGREEMENT IT IS STATED THAT THE RE WAS NO AGREEMENT WITH M/S GAURISONS. THOUGH THE NOTICE U/S 133(6) OF THE I.T. ACT WAS DULY SERVED TO THE SECRETARY OF MANISH COMMERCIAL CENTRE, NO REPLY RECEIVED FROM THE SOCIETY TILL DATE, IN RESPECT OF I) NAME OF THE OWNERS OF FLAT NO.304B AND 304C II) CON FIRMATION WHETHER THE FLAT WERE GIVEN ON LEASE III) NAME OF THE CONCERN CARRYING OUT BUSINESS FROM FLAT NO.304B AND 304C. THE ASSESSING OFFICER HELD THAT THE CLAIM OF RENT OF ASSESSEE FIRM IS NOT FOUND GENUINE FOR THE REASONS DISCUSSED AS UNDER: I) THERE WAS NO RE NT AGREEMENT BETWEEN M/S GAURISONS AND MS. AVANTIKA & MS. ANIKA GUPTA II) THE ASSESSEE HAS NOT FURNISHED ANY DOCUMENTARY EVIDENCE TO SHOW/PROVE AT MANISH COMMERCIAL CENTRE. III) AS PER THE CONFIRMATION THERE ARE TWO FLATS BEARING NOS. 304B AND 304C GIVEN ON LEASE TO M/S GAURISONS BUT AS PER ITAT ORDER IT IS SEEN THAT ONLY FLAT NO. 304B WAS GIVEN ON RENT TO M/S GAURISONS. IV) THE CONFIRMATION OF SHRI DILBERSINGH NEGI, WATCHMAN OF SOCIETY, NOT BEARING ANY DATE OR NOT MENTIONED THE SPECIFIC PREMISES OF MANISH COMMERCIAL CENTRE FROM WHICH SHRI SUSHIL GUPTA PARTNER OF M/S GAURISONS CARRIED OUT THE BUSINESS. V) THERE WAS NO INFORMATION IN RESPECT OF FLAT NO. 304B, IN THE REPLY RECEIVED FROM SMT. ANJANA GUPTA, WHICH CAN PROVE THAT M/S. GAURISONS CARRIED OUT THE BUSINESS FROM FLA T NO. 304B. VI) THE SOCIETY OF MANISH COMMERCIAL CENTRE NOT FURNISHED THE INFORMATION IN RESPECT OF OWNERSHIP OF FLAT NOS. 304B AND 304C AND WHETHER THE FLATS WERE GIVEN ON LEASE DURING THE PERIOD 1997 - 98 AND THE NAME OF CONCERN CARRYING OUT THE BUSINESS ACTIV ITIES FORM THE SAID PREMISES. IN THE ORIGINAL ORDER THE ASSESSING OFFICER STATED THAT THE ASSESSEE FIRM'S MAIN OFFICE SITUATED AT 161 - C, MITTAL TOWER, NARIMAN POINT, MUMBAI. AS REGARDS THE CLAIM OF THAT THE PARTNER WAS SITTING IN WORLI OFFICE IT IS WORT H MENTIONING HERE THAT SHRI SUSHI L GUPTA IS KARTA OF HUF OF SUSHILKUMAR GUPTA WHO IS PARTNER OF THE ASSESSEE FIRM. HE IS ASSOCIATED WITH NUMBER OF CONCERNS OF HIS GROUP AND ALL THE OFFICES OF GROUP CONCERNS ARE SITUATED AT 161C, MITTAL TOWER, MUMBAI. THERE WAS ONLY ONE EMPLOYEE SHRI SATPATHY AND IT IS CLAIMED BY THE ASSESSEE THAT THE EMPLOYEE WAS SITTING IN THE PREMISES SITUATED AT MANISH COMMERCIAL CENTRE AND THE PARTNER SHRI SUSHI( GUPTA WAS ALSO OCCASIONALLY SITTING THERE. AT PRESENT, SHRI SATPATHY IS NO T EMPLOYEE OF M/S GAURISONS, ALSO THE WHEREABOUTS OF SHRI SATPATHY NOT KNOWN TO THE ASSESSEE, THEREFORE, IT IS NOT POSSIBLE TO CONFIRM THE SAME FROM HIM. FROM THE AFORESAID DISCUSSION, THE ASSESSEE ITSELF HAD NOT CONFIRMED THAT FROM WHICH PREMISES (30413 O R 304C) THE BUSINESS WAS CARRIED OUT. ALSO IT HAS NOT SUBMITTED ANY DOCUMENTARY EVIDENCES TO PROVE THAT THE BUSINESS WAS CARRIED OUT AT MANISH COMMERCIAL CENTRE. THEREFORE, IT IS CLEAR THAT THE PAYMENT OF OFFICE RENT IS DEVISED ONLY TO INFLATE THE EXPENSES IN THE HEAD OF THE ASSESSEE TO REDUCED THE PROFIT AND TO SHOW INCOME IN THE HANDS OF THE MINORS . 20 . IN THE ORIGINAL PROCEEDINGS, THE COORDINATE BENCH OF THE ITAT, MUMBAI, RESTORED THE ISSUES TO THE AO FOR ASCERTAINING THE CORRECTNESS OF THE EXPENSES I NCURRED. IN THE ASSESSMENT AND APPELLATE AND PENALTY PROCEEDINGS POST ITAT ORDER, AS WELL, THE M/S. GAURISONS ITA 3906 / M/20 12 ITA 3907 /MUM/20 12 7 ASSESSEE WAS UNABLE TO SUBSTANTIATE ANYTHING WITH ANY COGENT MATERIAL. 2 1 . THE CIT(A) IN PENALTY PROCEEDINGS, THEREFORE, SUSTAINED THE PENALTY LEVIED BY THE AO. 2 2 . AGAINST THIS ORDER OF THE CIT(A), THE ASSESSEE IS BEFORE THE ITAT. 2 3 . BEFORE US, EXCEPT FOR MAKING SUBMISSIONS THAT THE CA FIRM TODARWAL 7 TODARWAL HAD MADE THE SUBMISSIONS. THIS ACCORDING TO US DOES NOT SERVE ANY PURPOSE. UNLESS THE ASSESSEE IS ABLE TO FULLY SUBSTANTIATE FROM HIS RECORDS, WHICH ARE WORTH CONSIDERATION WITH, THE EVIDENCE, THE QUERY OF THE AO/ REVENUE AUTHORITIES REMAIN UN - COMPLIED WITH AND GETTING AND EXPECTING A RELIEF IS A HAPPY PRESUMPTION BY THE ASSESSEE. 2 4 . SINCE, EVEN BEFORE US THE ASSESSEE WAS UNABLE TO BRING ANYTHING WORTH THE SALT TO SUBSTANTIATE T HE EXPENSES, WE DO NOT INTEND TO INTERFERE WITH THE ORDER OF THE CIT(A), WHICH WE SUSTAIN. 2 5 . CONSEQUENTIALLY, THE APPEAL AS FILED BY THE ASSESSEE IS DISMISSED. AS A RESULT: ITA NO.3906/MUM/2012, APPEAL BY THE ASSESSEE IS ALLOWED ITA NO. 390 7 /MUM/2012, APPEAL BY THE ASSESSEE IS DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST APRIL , 2015. SD/ - SD/ - ( . . ) ( ) ( B R BASKARAN ) ( VIVEK VARMA ) ACCOUNTANT MEMB ER JUDICIAL MEMBER MUMBAI, DATE: 21 ST APRIL , 201 5 M/S. GAURISONS ITA 3906 / M/20 12 ITA 3907 /MUM/20 12 8 / COPY TO: - 1) / THE APPELLANT. 2) / THE RESPONDENT. 3) THE CIT (A) - 23 , MUMBAI. 4) THE CIT - 12 , MUMBAI/CIT - 12 , MUMBAI . 5) , , / THE D.R. G BENCH, MUMBAI. 6) COPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * . . *CHAVAN, SR.PS