N. JAMNADAS & CO., MUMBAI V. ACIT CEN CIR 39, MUMBAI

ITA 4139/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7435 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 16-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S PADMAJA
• Assessee Lawyers: Y P TRIVEDI SENIOR
• Keywords: Gift; Business expenditure; Commercial expediency; Capital expenditure
• Section: 143(3); 153A; 37(1); 37; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F MUMBAI BEFORE SHRI C.N. PRASAD (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 4139/MUM/2016 ASSESSMENT YEAR: 2010 - 11 & ITA NO. 4140/MUM/2016 ASSESSMENT YEAR: 2011 - 12 & ITA NO. 4141/MUM/2016 ASSESSMENT YEAR: 2012 - 13 N. JAMNADAS & CO., 16, BANK STREET, FORT, MUMBAI - 400001. VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 6(4), ROOM NO. 1925, 19 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI - 400021. PAN NO. AACFN8427F APPELLANT RESPONDENT ITA NO. 4250/MUM/2016 ASSESSMENT YEAR: 2010 - 11 & ITA NO. 4226/MUM/2016 ASSESSMENT YEAR: 2011 - 12 & ITA NO. 4248/MUM/2016 ASSESSMENT YEAR: 2012 - 13 THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 6(4), ROOM NO. 1925, 19 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI - 400021. VS. N. JAMNADAS & CO., 16, BANK STREET, FORT, MUMBAI - 400001. PAN NO. AACFN8427F APPELLANT RESPONDENT N. JAMNADAS & CO. ITA NO. 4139 TO 4141/MUM/2016 & 4250, 422, 4248/MUM/2016 2 ASSESSEE BY : MR. Y.P. TRIVEDI , SENIOR ADVOCATE REVENUE BY : MS. S. PADMAJA, CIT (DR) DATE OF HEARING : 11/04 /201 8 DATE OF PRONOUNCEMENT : 25/04/2018 ORDER PER BENCH THE CAPTIONED CROSS APPEALS - THREE BY THE ASSESSEE AND THE THREE BY THE REVENUE ARE DIRECTED AGAINST THE ORDER OF THE COMMISS IONER OF INCOME TAX (APPEALS) - 54 , MUMBAI [IN SHORT CIT(A) ] AND ARISE OUT OF THE ASSESSMENT COMPLETED U/S 143(3) R.W.S. 153A OF THE INCOME TAX ACT 1961 (THE ACT). AS COMMON ISSUES ARE INVOLVED, WE ARE PROCEEDING TO DISPOSE THEM OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. WE BEGIN WITH THE ASSESSMENT YEAR (AY) 2010 - 11. THE ASSESSEES APPEAL 2 . DURING THE COURSE OF HEARING, THE LD. COUNSEL SUBMITS THAT THE ASSESSEE WOULD NOT LIKE TO PRESS I & II GROUND OF APPEAL. CONSEQUENTLY, THE ABOVE GROUND S OF APPEAL ARE DISMISSED AS NOT PRESSED. 3 . THE III GROUND OF APPEAL READ S AS UNDER: 1. THE LEARNED CIT (A) ERRED IN CONFIRMING PART DISALLOWANCE IN RESPECT OF MISCELLANEOUS EXPENSES WHICH ARE IN THE FORM OF BUSINESS PROMOTION EXPENSES GIFT AND CHANDLA EXPENSES. 2. THE LEARNED CIT (A) ERRED IN ABRUPTLY ALLOWING ONLY PART RELIEF TO THE AFORESAID EXPENSES WITHOUT APPRECIATING THE FACT THAT THE SAME WERE INCURRED FOR THE PURPOSE OF APPELLANT'S BUSINESS ONLY. MORE SO, MAJOR N. JAMNADAS & CO. ITA NO. 4139 TO 4141/MUM/2016 & 4250, 422, 4248/MUM/2016 3 EXPENSES WERE ALLOWED BY THE CIT (A) IN EARLIER YEARS ON THE BASIS OF THE SAME SET OF FACTS. 3. THE LEARNED CIT (A) ERRED IN CONFIRMING DISALLOWANCE OF RS.77,59 8/ - BEING 25.70% OF RS.3,01,939/ - DISALLOWED BY THE ASSESSING OFFICER UNDER THE HEAD BUSINESS PROMOTION EXPENSES, GIFT AND CHANDLA EXPENSES ON AN AD - HOC BASIS BY ALLEGING THAT THE SAME WERE NOT INCURRED WHOLLY AND EXCLUSIVELY FOR THE BUSINESS. 4. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT THE APPELLANT FIRM INCURRED EXPENSES ON PRESENTATION OF GIFT ARTICLES NOT BEARING T HE LOGO OF THE APPELLANT FIRM AND THEREFORE THE SAME WOULD BE DEDUCTIBLE IN VIEW OF THE RATIO LAID DOWN BY THE HON'BLE BOMBAY HIGH COUR T IN THE CASE OF CIT VS. ALLANA SONS PVT. LTD. REPORTED IN 21ITR 690. 5. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT THE EXPENSES LIKE BUSINESS PROMOTION GIFT AND CHANDLA EXPENSES COULD NEVER BE DESCRIBED AS CAPITAL EXPENSES NOR WERE PERSONAL EXPENSES O F APPELLANT FIRM AND HENCE SAME ARE ADMISSIBLE EXPENSES HAVING BEEN LAID OUT WHOLLY AND EXCLUSIVELY FOR T HE PURPOSES OF THE BUSINESS OF THE APPELLANT . 4 . BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD CLAIMED GIFT EXPENSES, CHANDLA AND ENTERTAINMENT AMOUNTING TO RS.3,01,939/ - . THE ASSESSING OFFICER (AO) ASKED THE ASSESSEE , DURING THE COURSE OF ASSESSMENT PROCEEDINGS , TO JUSTIFY THE CLAIM OF SUCH EXPENSES UNDER THE PROVISIONS OF SECTION 37 WITH SUPPORTING DOCUMENTS. THE ASSESSEE VIDE ITS LETTER DATED 29.01.2014 SUBMITTED THAT IT DISTRIBUTED GIFTS AMONGST CUSTOMERS AND ASSOCIATES ON AUSPICIOUS OCCASIONS LIKE DIWALI AND CLAIMED THAT THE EXPENSES INCURRED WERE OUT OF COMMERCIAL EXPEDIENCY AND THUS CLEARLY ALLOWABLE U/S 37 OF THE ACT. HOWEVER, THE AO WAS NOT CONVINCED WITH THE ABOVE EXPLANATION OF THE ASSESSEE BECAUSE THE ASSESSEE FAILED TO DISCHARGE ITS ONUS THAT THE EXPENSE S WERE N. JAMNADAS & CO. ITA NO. 4139 TO 4141/MUM/2016 & 4250, 422, 4248/MUM/2016 4 WHOLLY AND EXCLUSIVELY FOR THE BUSINESS PURPOSE. THEREFORE, THE AO MADE A DISALLOWANCE OF THE ABOVE SUM OF RS.3,01 ,939/ - . 5 . AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) FOLLOWED THE ORDER OF HIS PREDECESSOR FOR AY 2009 - 10 AND RESTRICTED THE DISALLOWANCE TO RS.77,598/ - (BEING 25 .7 % OF THE TOTAL DISALLOWANCE OF R S.3,01,939/ - ). 6 . BEFORE US, THE LD. COUNSEL OF THE ASSESSEE SUBMITS THAT THE DISALLOWANCE CANNOT BE MADE ON AD - HOC BASIS ON SURMISES. ON THE OTHER HAND, THE LD. DR SUPPORTS THE ORDER PASSED BY THE LD. CIT(A). 7 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. IN THE INSTANT APPEAL , THE ASSESSEE FAILED TO SUBSTANTIATE ITS CLAIM BEFORE THE AO THAT THE EXPENSES INCURRED TOWARDS GIFT, CHANDLA AND ENTERTAINMENT WERE WHOLLY AND EXCLUSIVELY FOR BUSINESS PURPOSES. SIMILAR ISSUE AROSE BEFORE THE ITAT B BENCH, MUMBAI IN THE CASE OF THE ASSESSEE FOR THE AY 2009 - 10 (ITA NO. 4413/MUM/2012). THE TRIBUNAL RESTRICTED THE DISALLOWANCE TO 10% OF SUCH EXPENSES. FACTS BEING IDENTICAL, WE FOLLOW THE ABOVE ORDER OF THE TRIBUNAL AND DIRECT T HE AO TO RESTRICT THE ABOVE DISALLOWANCE TO 10% OF SUCH EXPENSES. 8 . FACTS BEING IDENTICAL, OUR DECISION FOR THE AY 2010 - 11 APPLIES MUTATIS MUTANDIS TO AY 2011 - 12 AND AY 2012 - 13 IN RESPECT OF BUSINESS PROMOTION, GIFT AND CHANDLA EXPENSES. 9 . FOR THE AY 2011 - 12 AND AY 2012 - 13, THERE IS AN ADDITIONAL ISSUE PERTAINING TO THE ORDER OF THE LD. CIT(A) UPHOLDING THE DISALLOWANCE N. JAMNADAS & CO. ITA NO. 4139 TO 4141/MUM/2016 & 4250, 422, 4248/MUM/2016 5 MADE BY THE AO ON ACCOUNT OF MEMBERSHIP FEES PAID TO CLUB. IN THE AY 2011 - 12 AND AY 2012 - 13 THE AO DISALLOWED THE CLAIM OF EXPENDITURE OF RS.41,760/ - AND RS. 20,500/ - RESPECTIVELY MADE BY THE ASSESSEE AS ENTRANCE FEES ON THE ARGUMENT THAT CONSIDERING THE LONG DURATION OF MEMBERSHIP, THE SAME IS CAPITAL EXPENDITURE. IN APPEAL, THE LD. CIT(A) FOLLOWED THE ORDER OF HIS PREDECESS OR FOR THE AY 2009 - 10 AND CONFIRMED THE ABOVE DISALLOWANCE MADE BY THE AO. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. THE REASONS GIVEN BY THE AO THAT LONG DURATION OF MEMBERSHIP MAKES AN EXPENDITURE CAPITAL IS NOT TENABLE IN LAW. THEREFORE, WE DELETE THE DISALLOWANCE OF RS.41,760/ - IN AY 2011 - 12 AND RS.20,500/ - IN AY 2012 - 13 MADE BY THE AO AND LATER ON CONFIRMED BY THE LD. CIT(A). THUS, THE 6 TH GROUND OF APPEAL IN AY 2011 - 12 AND AY 2012 - 13 ARE ALLOWED. 1 0 . IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE ARE PARTLY ALLOWED. THE REVENUES APPEAL 1 1 . THE SOLE GROUND OF APPEAL FILED BY THE REVENUE READS AS UNDER: WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS RIGHT I N HOLDING THAT ONLY A PART OF THE EXPENDITURE PROHIBITED BY LAW CAN BE DISALLOWED U/S 37(1) OF THE INCOME TAX ACT, 1961, CONTRARY TO THE FACT THAT THE ENTIRE EXPENDITURE OUGHT TO BE DISALLOWED IN TERMS OF SECTION 37(1), AS THE PAYMENT IS ADMITTEDLY IN THE NATURE OF SPEE D MONEY PAID IN CASH AND ILLEGAL AS PER LAW AS ALSO AGAINST THE PUBLIC POLICY. N. JAMNADAS & CO. ITA NO. 4139 TO 4141/MUM/2016 & 4250, 422, 4248/MUM/2016 6 1 2 . DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR A.Y. 2010 - 11 , THE AO NOTICED THAT THE ASSESSEE COLLECTS CERTAIN FEES OR SERVICE CHARGES FROM ITS CLIENTS. A PORTION OF THIS IS SPENT FOR MAKING PAYMENTS TO PORT EMPLOYEES, AND OTHER SUCH PAYMENTS WHICH ARE OTHERWISE NOT SANCTIONED AS PER LAW. THESE AMOUNTS ARE NEITHER CREDITED NOR DEBITED IN THE PROFIT AND LOSS ACCOUNT BUT ROUTED THROUGH THE BALANCE SHEET. IN TH E RETURN OF INCOME FILED ON 25.08.2012, IN RESPONSE TO NOTICE U/S 153A, THE ASSESSEE HAS DISALLOWED RS.13,37,024/ - ON ACCOUNT OF SUNDRY EXPENSES U/S 37(1) AND ADDED THE SAME WHICH WAS NOT OFFERED IN THE ORIGINAL RETURN OF INCOME FILED U/S 139 DATED 23.09.2 010. THIS AMOUNT IS 25% OF RS.53,48,095/ - , WHICH IS THE TOTAL EXPENDITURE INCURRED IN THE IMPUGNED ASSESSMENT YEAR. BY DOING SO, THE ASSESSEE SUBMITTED BEFORE THE AO THAT IT HAS FOLLOWED THE ORDER OF THE ITAT, MUMBAI IN ITS OWN CASE FOR AY 1997 - 98 AND AY 1 998 - 99 DATED 11.02.2011. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD ENCLOSED COPIES OF CERTAIN JOBS IN RESPECT OF ITS VARIOUS CLIENTS WHICH INCLUDE COPY OF QUOTATIONS GIVEN TO THE CLIENTS, COPY OF INVOICES/DISBURSEMENT ACCOUNTS RAISED TO THE CLIENTS AND CERTAIN SUPPORTING DOCUMENTS (BILLS/INVOICES) IN RESPECT OF VARIOUS EXPENSES SHOWN IN SUCH BILLS/INVOICES AND COPY OF THE AGREEMENT WITH THE PRINCIPAL/CLIENT ON SAMPLE BASIS. THE AO FOUND THAT (I) SUCH SUNDRIES/SUNDRY EXPENSES/MISCELLAN EOUS EXPENSES DO NOT HAVE ANY SUPPORTING DOCUMENTS E.G. BILLS/INVOICES ETC., (II) SUCH EXPENSES HAVE BEEN CLAIMED ONLY ON THE BASIS OF SELF - MADE CASH VOUCHERS AND THERE ARE NO SUPPORTING DOCUMENTS, VIZ. BILLS, INVOICES, ETC. IN THIS RESPECT, (III) THESE Q UOTATIONS AND COPY OF INVOICES RAISED TO CLIENTS DO NOT SUGGEST OR N. JAMNADAS & CO. ITA NO. 4139 TO 4141/MUM/2016 & 4250, 422, 4248/MUM/2016 7 DO NOT EVEN INDICATE THAT THE ASSESSEE WOULD INCUR OR HAS INCURRED SUCH ILLEGAL EXPENSES/SPEED MONEY PAYMENTS ON BEHALF OF ITS CLIENTS AND WOULD CLAIM THE SAME, (IV) THE ASSESSEES CLAIM TH AT ITS CLIENTS WERE AWARE OF SUCH SPEED MONEY PAYMENTS/ILLEGAL EXPENSES IS NOT BASED ON ANY EVIDENCE AND IT IS MERELY THE ASSESSEES ASSUMPTION. THE AO , ON PERUSAL OF CERTAIN SELF - MADE CASH VOUCHERS PRODUCED BY THE ASSESSEE ON SAMPLE BASIS , NOTICED THAT EVEN NAME OF PERSONS WERE NOT MENTIONED ON MANY VOUCHERS AND WHEREVER SOME NAMES WERE APPEARING, THE ASSESSEE FAILED TO FURNISH ANY FURTHER DETAILS ABOUT SUCH PERSONS IN RESPECT OF WHICH SUCH SPEED MONEY PAYMENTS/SUNDRY EXPENSES HAVE BEEN CLA IMED. THE AO HELD THAT THE ASSESSEE HA D MADE PAYMENTS OF SPEED MONEY ETC. AT VARIOUS PORTS. THESE EXPENSES WERE MADE TO VARIOUS GOVERNMENT AGENCIES, AND THE ASSESSEE FAILED TO PROVE THAT THESE WERE IN THE NATURE OF BUSINESS EXPENSES. THE AO OBSERVED THAT THERE IS NO PROVISION UNDER THE ACT TO PARTIALLY ALLOW ANY EXPENDITURE INCURRED BY THE ASSESSEE. REFERRING TO SECTION 37(1), THE AO HELD THAT THE EXPENDITURE INCURRED BY THE ASSESSEE SHOULD BE WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND SHOULD NOT BE FOR THE PURPOSE WHICH IS AN OFFENCE PROHIBITED BY LAW. THE ASSESSEE HAS DISALLOWED IN ITS RETURN OF INCOME AN AMOUNT OF RS.13,37,024/ - (BEING 25% OF RS.53,48,095/ - ). THEREFORE, THE AO MADE A DISALLOWANCE OF THE BALANCE AMOUNT OF RS.40,11,071/ - . 1 3 . AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) NOTED THAT IN AY 2009 - 10, THE CIT(A) HAD RESTRICTED SUCH ALLOWANCES TO THE EXTENT OF 25% OF SUCH N. JAMNADAS & CO. ITA NO. 4139 TO 4141/MUM/2016 & 4250, 422, 4248/MUM/2016 8 EXPENSES. AGAINST THE DECISION OF THE LD. CIT(A), THE REVE NUE FILED AN APPEAL BEFORE THE ITAT. THE TRIBUNAL VIDE ITS ORDER DATED 23.07.2013 UPHELD THE ORDER OF THE LD. CIT(A) AND DISMISSED THE APPEAL OF THE REVENUE. IN THE PRESENT CASE, THE LD. CIT(A) FOLLOWED THE SAID ORDER OF THE APPELLATE AUTHORITIES FOR THE I MMEDIATE PRECEDING ASSESSMENT YEAR 2009 - 10 AND DIRECTED THE AO TO ACCEPT RS.13,37,024/ - (25% OF THE DISALLOWANCE OF RS.53,48,095/ - ) AND DELETE THE BALANCE AMOUNT OF RS.40,11,071/ - . 1 4 . BEFORE US, THE LD. DR RELIES ON THE DECISION IN T. LAKHAMSHI LADHA & C O. V. CIT (2016) 70 TAXMANN.COM 10 (BOM) AND SMT. KUSUM R. GHUWALEWALA (2009) 29 SOT 368 (MUM). ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSESSEE RELIES ON THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE AY 1997 - 98 & AY 1998 - 99 (ITA NO. 4321 & 43 22/MUM/2008), AY 2007 - 08 (ITA NO. 5293/MUM/2010), AY 2002 - 03 TO AY 2004 - 05 (ITA NO. 2339 TO 2341/MUM/2011), AY 2008 - 09 (ITA NO. 5317/MUM/2011), AY 2005 - 06 & AY 2006 - 07 (ITA NO. 8188 & 8189/MUM/2011) AND AY 2009 - 10 (ITA NO. 4300/MUM/2012). 1 5 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. IN T. LAKHAMSHI LADHA & CO. (SUPRA), RELIED ON BY THE LD. DR , THE ASSESSEE - FIRM WAS ENGAGED IN THE BUSINESS OF LETTING ON HIRE TARPAULIN SHEETS FOR PURPOSE OF ERECTING WEATHER SHEDS. IT CLAIMED DEDUCTION OF CERTAIN AMOUNT ALLEGEDLY PAID AS SECRET COMMISSION TO EMPLOYEES OF ITS CUSTOMERS AS PER TRADE PRACTICE IN ORDER TO APPROVE ASSESSEES CONTRACTS , RATES AND HELP IN GETTING QUICK PAYMENT ON SUCH HIRE CHARGES. HOWEVER, THE ASSESSEE DI D NOT PROVIDE NAMES OF RECIPIENTS, N. JAMNADAS & CO. ITA NO. 4139 TO 4141/MUM/2016 & 4250, 422, 4248/MUM/2016 9 NAME OF PARTNER WHO DEALT WITH THE CLIENTS AND EVIDENCE TO ESTABLISH THAT PAYMENT OF SUCH COMMISSION WAS MATTER OF TRADE PRACTICE IN LINE OF BUSINESS. THE HONBLE HIGH COURT HELD THAT ON FACTS PAYMENT OF SECRET COMMISSION COULD NOT BE ALLOWED AS BUSINESS EXPENDITURE. IN SMT. KUSUM R. GHUWALEWALA (SUPRA), RELIED ON BUY THE LD. DR, THE ASSESSEE WAS ENGAGED IN BUSINESS OF CARGO MARKETING AGENCY FOR AIRLINES. SHE PROCURED BUSINESS FROM COURIER COMPANIES AND OBTAINED AGENCY CO MMISSION. THE ASSESSEE CLAIMED DEDUCTION OF A SUM OF RS.43,50,616/ - STATING THAT IT WAS PAID AS SECRET COMMISSION/KICKBACK FOR EARNING ADDITIONAL BUSINESS. THE AO DISALLOWED THE ASSESSEES CLAIM STATING THAT IN VIEW OF EXPLANATION TO SECTION 37(1) , ILLEGAL PAYMENTS WERE NOT ALLOWABLE EXPENSES. ASSESSEE EXPLAINED THAT SAID COMMISSION WAS PAID TO CARGO MOVERS FOR OBTAINING C ARGO AND IN RETURN SHE HAD RECEIVED INCENTIVES FROM AIRLINES FOR HIGHER VOLUME OF BUSINESS AND CLAIMED THAT SUCH EXPENDITURE WAS INEVITAB LE, LEGITIMATE AND CUSTOMARY IN ASSESSEES LINE OF BUSINESS AND HAD BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR PURPOSE OF BUSINESS AND WAS NOT HIT BY EXPLANATION TO SECTION 37(1). IT WAS FOUND FROM RECORDS THAT (I) NO TAX WAS DEDUCTED BY THE ASSESSEE ON AMOU NT - IN - QUESTION; (II) ASSESSEES SUBMISSION WAS THAT SAID PAYMENTS WERE MADE FOR OBTAINING C ARGO BUT IDENTITY OF REAL RECIPIENTS HAD NOT BEEN EXPLAINED AT ALL; AND (III) THERE WAS NOTHING ON RECORD TO PROVE THAT OTHER COMPANIES IN SIMILAR BUSINESS WERE ALSO PAYING KICKBACK/SECRETE COMMISSION. IN VIEW OF THE SAID FACTS, THE TRIBUNAL HELD THAT SECRETE COMMISSION/KICKBACK PAID BY THE ASSESSEE COULD NOT BE TREATED AS GENUINE AND DISALLOWANCE OF IMPUGNED PAYMENT BY THE AO WAS JUSTIFIED. N. JAMNADAS & CO. ITA NO. 4139 TO 4141/MUM/2016 & 4250, 422, 4248/MUM/2016 10 1 5 .1 IN THE INSTANT CASE, THE EXPENDITURE INCURRED BY THE ASSESSEE IS IN THE NATURE OF SPEED MONEY. IT IS NOT IN THE NATURE OF SECRET COMMISSION. THE SAME ISSUE AROSE BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE FROM AY 1997 - 98 TO AY 2009 - 10. IN ALL THESE YEARS THE TRIBUNAL HAS DIRECTED THE AO TO RESTRICT THE DISALLOWANCE TO 25% OF SUCH EXPENSES. FACTS BEING IDENTICAL, WE FOLLOW THE ORDER OF THE CO - ORDINATE BENCH IN THE CASE OF THE ASSESSEE FOR THE ABOVE ASSESSMENT YEARS AND UPHOLD THE ORDER OF THE LD. CIT(A). 1 6 . IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. 1 7 . TO SUM UP, THE APPEALS FILED BY THE ASSESSEE ARE PARTLY ALLOWED WHEREAS THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 25/04/2018. SD/ - SD/ - ( C.N. PRASAD ) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 25/04/2018 RAHUL SHARMA, SR. P.S. 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 . BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI