VIJAYKUMAR SATRAMDAS LAKHANI, NAVI MUMBAI V. ITO WD 22(3)(4), NAVI MUMBAI

ITA 4381/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2731 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 23-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRI
• Assessee Lawyers: MRS RITIKA AGARWAL
• Keywords: Business income; Depreciation
• Section: 143(3); 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F , MUMBAI , , BEFORE SHRI AMIT SHUKLA , JUDICIAL MEMBER AND SHRI ASHWANI TA NEJA , ACCOUNTANT MEMBER ITA NO. : 4380 /MUM/201 4 (ASSESSMENT YEAR: 200 9 - 1 0 ) VISHANDAS S LAKHANI, 408, PERSEPOLIS, SECTOR - 17, VASHI, NAVI MUMBAI - 400 703 PAN: AA EPL 4713 H VS THE IN C OME TAX OFFICER WARD 22(3) - 4, VASHI NAVI MUMBAI (APPELLANT) (RESPONDENT) ITA NO. : 4381 /MUM/201 4 (ASSESSMENT YEAR: 200 9 - 1 0 ) VIJAYKUMAR S LAKHANI, 408, PERSEPOLIS, SECTOR - 17, VASHI, NAVI MUMBAI - 400 703 PAN: AAEO PL 471 2 G VS THE IN C OME TAX OFFICER WARD 22(3) - 4, VASHI N AVI MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : MRS. RITIKA AGARWAL RESPONDENT BY : SHRI S PANDIAN /DATE OF HEARING : 21 - 07 - 2016 / DAT E OF PRONOUNCEMENT : 21 - 07 - 2016 ORDER , : PER AMIT SHUKLA , JM: THE AFORESAID APPEAL S HA VE BEEN FILED BY THE ABOVE NAMED ASSESS E E S AGAINST SEPARATE IMPUGNED ORDER OF EVEN DATE , 31.03 .2014 , PASSED BY LD. CIT ( A PPEALS ) - 33 , MUMBAI FOR THE QUANTUM OF ASSESSMENT PASSED UNDER SECTION 143(3) FOR THE ASSESSMENT YEAR 200 9 - 1 0. SINCE THE ISSUES INVOLVED IN BOTH THE APPEALS ARE COMMON, ARISING OUT OF IDENTICAL SET OF 2 ITA NO. : 4 380/MUM/2014 VISHANDAS S LAKHANI ITA NO. : 438 1 /MUM/2014 VIJAYKUMAR SATRAMDAS LAKHANI FACTS, THEREFORE, SAME WERE HEARD TOGETHER AND ARE BEING DISPOSE D OFF BY WAY OF THIS CONSOLIDATED ORDER. 2. WE WILL FIRST TAKE - UP ITA NO.4380/MUM/2014, WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS: - 1 THE L EARNE D CIT(A) ERRED IN CONFIRM ING THE ACTION OF THE AO IN ASSESSING AN INCOME OF RS.20,97,020/ - AS AGAINST THE INCOME DECLARED AT RS.2,52,618/ - . 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ORDER PASSED BY THE ASSESSING OFFICER IN TREATING THE BUSINESS RECEIPTS AS INCOME FROM OTHER SOURCES AND DISALLOWING THE TOTAL EXPENSES CLAIMED. 3. THE LEARNED AO ERRED IN DISALLOWING THE EXPENSES CLAIMED IN THE BUSINESS ACCOUNT AGAINST THE BUSINESS INCOME. 4. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTION OF THE AO IN DISALLOWING THE EXPENSES AS PER THE P/L ACCOUNT CONSISTING OF VARIOUS EXPENSES SUCH AS AUDIT FEE, B ANK CHARGES, CONVEYANCE EXPENSES, DEPRECIATION, CAR INSURANCE CHARGES, INTEREST ON LOAN AND OTHER EXPENSES WITHOUT ANY VALID OR COGENT REASONS. 3 . THE FACTS IN BRIEF ARE THAT, THE ASSESSEE IS A PARTNER IN THE FIRM, M/S GOKUL CONSTRUCTIONS WHICH WAS ENGA GED IN CONSTRUCTION BUSINESS AND UNITED MARINE PHARMACY. DURING THE YEAR, THE ASSESSEE DERIVED INCOME FROM SHARE OF PROFIT AND REMUNERATION INCOME FROM THE FIRM , M/S GOKUL CONSTRUCTIONS AND INCOME FROM BUSINESS. THE AO NOTED THAT, ASSESSEE HAS CLAIMED VARI OUS EXPENSES DEBITED IN THE PROFIT AND LOSS ACCOUNTS, THE DETAILS OF WHICH ARE AS UNDER: - SR. NO. EXPENSES UNDER SEPARATE HEADS EXPENSES CLAIMED RS. 1 AUDIT FEE 11,030 2 BANK CHARGES 16,665 3 CONVEYANCE 1,16,838 4 DEPRECIATION 3,03,839 5 CAR INSURANCE CHARGES 22,973 6 INTEREST ON LOAN 8,25,985 7 INT. ON CAPITAL (UMP) 3,77,550 8 LOAN EXPENSES 32,243 9 MEMBERSHIP & SUBSCRIPTION CH. 7,000 10 PROFESSIONAL FE ES 50,000 11 REP. & MAINTENANCE 27,644 12 TELEPHONE CHARGES AGAINST REMUNERATION AND MEDICAL INCOME & SHARE IN PROFIT FROM FIRM 10,809 3 ITA NO. : 4 380/MUM/2014 VISHANDAS S LAKHANI ITA NO. : 438 1 /MUM/2014 VIJAYKUMAR SATRAMDAS LAKHANI 4 . IN RESPONSE TO THE SHOW CAUSE NOTICE AS TO WHY THE EXPENSES CLAIMED AGAINST T HE REMUNERATION INCOME FROM THE FIRM SHOULD NOT BE DISALLOWED, THE ASSESSEE SUBMITTED THAT , THE PAYMENT OF EXPENSES RELATES TO EARNING OF BUSINESS INCOME AND HAD ALSO BEEN SHOWN A GAIN S T INCOME FROM MEDICAL PROFE SS ION . HOWEVER, THE AO REJECTED THE ASSESSEE S CONTENTION ON THE GROUND THAT ASSESSEE COULD NOT PROVIDE ANY DETAILS OF THE EARNING OF MEDICAL INCOME AND THE EXPENSES COULD NOT BE ESTABLISHED AGAINST THE BUSINESS INCOME. ACCORDINGLY, HE TREATED THE MEDICAL INCOME DECLARED BY THE ASSESSEE AT RS.5,56,10 0/ - AS INCOME FROM OTHER SOURCES AND ALSO DISALLOWED THE EXPENSES EX CEPT THE BANK INTEREST OF RS.13,55,724/ - . 5 . BEFORE THE LD. CIT(A), THE ASSESSEES SUBMISSIONS WAS THAT ASSESSEE WAS A DOCTOR BY PROFESSION AND HAD EARNED INCOME FROM MEDICAL PRACTICE A T RS.5,56,100/ - . THE ASSESSEE IS ALSO A PARTNER IN A FIRM , WHICH IS ENGAGED IN THE FIELD OF CONSTRUCTION FROM WHICH HE HAD RECEIVED REMUNERATION , WHICH IS CHARGEABLE UNDER THE HEAD INCOME FROM BUSINESS AND PROFESSION . THUS, BOTH THE STREAMS O F INCOME WER E ASSESSABLE UNDER THE HEAD BUSINESS INCOME AND PRO FESSION. EVEN OTHERWISE, I F THE INCOME IS TO BE TREATED AS INCOME FROM OTHER SOURCES THEN ALSO EXPENSES RELATABLE TO EARNING OF SUCH INCOME HAS TO BE ALLOWED UNDER SECTION 57(III). THE ASSESSEES SUBMISS ION HAVE BEEN INCORPORATED BY THE CIT(A) IN PARA 2.3. HOWEVER, THE LD. CIT(A) REJECTED THE ASSESSEES CONTENTION AFTER OBSERVING AND HOLDING AS UNDER: - IN GROUND NO.1, THE APPELLANT HAS CHALLENGED ACTION OF AO IN TAXING MEDICAL INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES AS AGAINST BUSINESS INCOME DECLARED BY THE APPELLANT 4 ITA NO. : 4 380/MUM/2014 VISHANDAS S LAKHANI ITA NO. : 438 1 /MUM/2014 VIJAYKUMAR SATRAMDAS LAKHANI IN THE RETURN OF INCOME. HOWEVER, NEITHER BEFORE ME NOR BEFORE THE AO , APPELLANT DID NOT FILE ANY MATERIAL TO SHOW THAT APPELLANT WAS ENGAGED IN THE PROFESSION OF MEDICAL PRACT ICE. APPELLANT DID THE LIFE MEMBERSHIP CERTIFICATE ISSUED BY INDIAN MEDICAL ASSOCIATION DATED 31.03.2001. THIS DOES NOT ITSELF SUPPORT APPELLANTS CLAIM THAT APPELLANT WAS ENGAGED IN MEDICAL PRACTICE DURING THE YEAR UNDER CONSIDERATION. IN VIEW OF THIS, I FIND NO REASON IN INTERFERING WITH THE ACTION OF THE AO IN THIS REGARD. THIS GROUND OF APPEAL IS THEREFORE DECIDED AGAINST THE APPELLANT. AS REGARDS GROUND NO.2 TAKEN BY THE APPELLANT, I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER AND THE SUBMISSIONS MADE FOR THE APPELLANT. IN SO FAR AS THE ALLOWANCE OF EXPENDITURE IS CONCERNED THE AO HAS ALREADY ALLOWED THE INTEREST EXPENDITURE AS A NEXUS IN EARNING THAT INCOME. THEREFORE, IN SO FAR AS THE ASSESSEE WAS ABLE TO PROVE HIS CLAIM, THE ASSESSING OFFICER HA S ALLOWED THE DEDUCTION. HOWEVER, AS REGARDS ALL OTHER EXPENSES CLAIMED BY THE APPELLANT, IN THE ABSENCE OF ANY MATERIAL PRODUCED EITHER BEFORE THE AO OR BEFORE ME, I DO NOT FIND ANY REASON TO VITIATE THE ORDER OF THE AO. SECONDLY, APPELLANT WAS SHOWN INCO ME OF MEAGER AMOUNT OF RS.5,00,000/ - AGAINST WHICH HE HAS CLAIMED HUGE EXPENSES LIKE CONVEYANCE, DEPRECIATION ETC. WHICH HAS IN TURN AN EFFECT TO REDUCE THE TAXABLE REMUNERATION CHARGEABLE TO TAX. THUS, WHAT IS SHOWN AS INCOME FROM PROFESSION IS NOTHING BU T AN ALIBI TAKEN TO REDUCE THE BURDEN OF TAX. THEREFORE, IN THE ABSENCE OF ANY MATERIAL PRODUCED TO JUSTIFY TO PROVE ANY INCOME AND EXPENDITURE BY COGENT EVIDENCE SAVE AND EXCEPT THE SUBMISSION MADE TAKING AN EXCUSE UNDER THE GUISE OF PROFESSIONAL RECEIPT S, I AM NOT INCLINED TO ACCEPT THE ARGUMENT OF THE APPELLANT AND DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE AO. ACCORDINGLY THE GROUNDS NO.1 & 2 RAISED BY THE APPELLANT ARE DISMISSED. 6 . BEFORE US, LD. COUNSEL, MRS. RITIKA AGARWAL SUBMITTED THAT, FIRS T OF ALL, ASSESSEE IN SUPPORT OF HIS MEDICAL INCOME HAD FILED CO P Y OF LEDGER ACCOUNT NOT ONLY BEFORE THE AO AS WELL AS BEFORE THE LD. CIT(A) , WHICH ARE APPEARING FROM PAGE S 25 TO 32 OF THE PAPER - BOOK. THE ASSESSEE HAD ALSO FURNISHED COPY OF CERTIFICATE OF LIFE MEMBER OF INDIAN MEDICAL ASSOCIATION (IMA) AS WELL AS REGISTRATION CERTIFICATE ALLOTTED BY MEDICAL COUN CIL OF INDIA (MCI). 5 ITA NO. : 4 380/MUM/2014 VISHANDAS S LAKHANI ITA NO. : 438 1 /MUM/2014 VIJAYKUMAR SATRAMDAS LAKHANI UNLESS THE ASSESSEE IS CONDUCTING MEDICAL PROFESSION, SUCH CERTIFICATE WILL NOT BE GRANTED. THUS, IT CANNOT BE SAID THAT ASS ESSEE WAS NOT HAVING IN COM E FROM MEDICAL PROFESSION. SH E FURTHER SUBMITTED THAT, ALL THE EXPENSES HAVE BEEN INCURRED THROUGH ACCOUNT PAYEE CHEQUE S , BARRING EXPENDITURE AMOUNT OF RS.11,712/ - , WHICH WAS INCURRED IN CASH FOR CAR REPAIR AND MAINTENANCE. THE BR EAK - UP OF EXPENSES CLAIMED , AS SUBMITTED BEFORE US ARE AS UNDER: - S. NO. DETAILS OF EXPENSES BANK CASH JOURNAL ENTRIES TOTAL 1 AUDIT FEES 11,030 - - 11,030 2 BANK CHARGES 16,666 - - 16,666 3 BANK INTEREST 13,55,725 - - 13,5 5,725 4 CONVEYANCE 1,16,839 - - 1,16,839 5 DEPRECIATION - - 3,03,840 3,03,840 6 INSURANCE CAR 22,973 - - 22,973 7 INTEREST ON LOAN 8,23,873 - 2,112 8,25,985 8 INTEREST ON CAPITAL IN CASE OF M/S UNITED MEDIC ARE &PHARMACY (PARTNERSHIP FIRM) - 3,77,550 3,77,550 9 SHARE OF LOSS IN CASE OF M/S UNITED MEDICARE & PHARMACY (PARTNERSHIP FIRM) - 2,088 2,088 10 LOAN EXPENSES 32,243 - - 32,243 11 MEMBERSHIP FEES 7,000 - - 7,000 12 PROFESSIONAL FEES 50,000 - - 50,000 13 CAR REPAIR AND MAINTENANCE 25,932 11,712 - 37,644 14 TELEPHONE EXPENSES 10,809 - - 10,809 TOTAL 24,73,090 1 1,712 6,85,590 31,70,392 AS REGARDS, THE ALLEGATION BY THE LD. CIT(A) THAT DETAILS AS REQUIRED HAS NOT BEEN FILED BY THE ASSESSEE, SHE SUBMITTED THAT, SAME IS INCORRECT OBSERVATION, BECAUSE DURING THE COURSE OF THE APPELLATE PROCEEDINGS SP ECIFIC DETAILS FOR THE EARNING OF MEDICAL PROFESSION AND DETAILS OF EXPENSES W ERE SUBMITTED BEFORE THE LD. CIT(A) IN RESPONSE TO QUERY RAISED BY HIM. THIS IS EVIDENT FROM THE ORDER SHEET ENTR IES OF THE APPELLATE PROCEEDINGS WHICH HAS BEEN OBTAINED UNDER THE RTI ACT. TO DEMONSTRATE , SHE FILED COPY OF ORDER UNDER SECTION 7(1) OF THE RTI ACT, 2005 ALONG WITH THE PHOTO - COPY OF ORDER SHEET ENTRIES . FROM THE ORDER SHEET ENTRY ITSELF SHE POINTED 6 ITA NO. : 4 380/MUM/2014 VISHANDAS S LAKHANI ITA NO. : 438 1 /MUM/2014 VIJAYKUMAR SATRAMDAS LAKHANI OUT THAT THE LD. CIT(A) HAD ASKED TO FURNISH THE DETAILS OF BUSINES S INCOME AND EXPENSES AND IN RESPONSE TO THE SAME THE ENTIRE DETAILS HAVE BEEN FURNISHED WHICH IS EVIDENT FROM THE DOCUMENTS APPEARING IN THE PAPER BOOK FILED BEFORE US . THUS, THIS ALLEGATION OF THE LD. CIT(A) IS FACTUALLY INCORRECT IN THE WAKE OF THE EVID ENCES AND DOCUMENTS ON RECORD. THUS, NO DISALLOWANCE OF EXPENDITURE SHOULD BE MADE ON THIS GROUND . 7 . ON THE OTHER HAND, LD. DR STRONGLY RELIED UPON THE ORDER OF THE CIT(A). 8 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT FINDING G IVEN IN THE IMPUGNED ORDERS AS WELL AS MATERIALS PLACED BEFORE US. THE MAIN DISPUTE RELATES TO DISALLOWANCE OF EXPENDITURE AS CLAIMED BY THE ASSESSEE IN THE PROFIT AND LOSS ACCOUNT AND ALSO TREAT ME N T OF THE BUSINESS INCOME AS INCOME FROM OTHER SOURCES . THE MAIN ALLEGATION OF THE LD. CIT(A) FOR DISPROVING THE MEDICAL INCOME AS BUSINESS INCOME IS THAT, THE ASSESSEE COULD NOT FURNISH ANY DETAILS OR EVIDENCES BEFORE HIM. SUCH A FINDING OF THE LD. CIT(A) HAS BEEN DISAPPROVED/ REBUTTED BY THE LD. COUNSEL BY P RODUCING THE CERTIFIE D COPY OF ORDER SHEET ENTR IES OF THE FIRST APPELLATE PROCEEDINGS, WHEREIN, THE LD. CIT(A) HIMSELF HAD ASKED FOR THE DETAILS OF BUSINESS INCOME AND EXPENDITURE. IN RE S P ONSE TO THE SAID ORDER SHEET ENTRY DATED 03.07.2013, THE ASSESSEE HAD FILED THESE DETAILS ON 20 TH AUGUST, 2013. FURTHER, FR O M THE PERUSAL OF THE PAPER BOOK SUBMITTED BEFORE US, IT IS SEEN THAT ASSESSEE HAD FURNISHED COPY OF LEDGER ACCOUNT OF MEDICAL INCOME GIVING DATE WISE DETAILS AND INCOME EARNED ALONG WITH THE COPY OF CERTIFICATE OF LIFE MEMBER SHIP OF IMA AND REGISTRATION CERTIFICATE ALLOTTED BY MCI. THUS, THE FACTUM OF INCOME FROM MEDICAL PROFESSION CANNOT BE DISREGARDED ONCE THESE FACTS HAVE BEEN BROUGHT ON RECORD AND NO ADVERSE MATERIAL HAS BEEN BROUGHT OR ENQUIRY W HATSOEVER HAS BEEN DONE BY AO . THE AO 7 ITA NO. : 4 380/MUM/2014 VISHANDAS S LAKHANI ITA NO. : 438 1 /MUM/2014 VIJAYKUMAR SATRAMDAS LAKHANI HAS TREATED THIS INCOME AS INCOME FROM OTHER SOURCES , WHICH HAS NO BASIS IN THE WAKE OF THESE EVIDENCES. ACCORDINGLY, WE HOLD THAT THE INCOME OF RS.5,56,100/ - SHOWN BY THE ASSESSEE IS NOTHING BUT MEDICAL INCOME SHOWN BY THE ASSESSEE WHICH IS CHARGEABLE UNDER THE HEAD INCOME FROM BUSINESS AND PROFESSION UNDER SECTION 28. FURTHER, FROM THE NATURE OF EXPENSES DEBITED IT IS QUITE EVIDENT THAT THESE EXPENDITURES ARE PURELY FOR THE PURPOSE OF EARNING OF BUSINESS INCOMES S HOWN, LIKE IN THE NATURE OF AUDIT FEES, BANK CHARGES, INTEREST ON LOAN, INSURANCE S, PAYMENTS MADE FOR PROFESSIONAL FEES, TELEPHONE EXPENSES, CAR REPAIRS ETC. ALL THESE EXPENSES HAVE BEEN INCURRED BY WAY OF ACCOUNT PAYEE CHEQUES B A R R ING ONE MINOR ITEM OF RS .11,712/ - , WHICH IS IN CASH . THUS, NEITHER THE GENUINENESS OF THE EXPENDITURE IS DOUBTED NOR IT IS THE CASE OF THE REVENUE THAT THESE ARE UNVERIFIABLE. THUS, WE DO NOT FIND ANY REASON TO HOLD THAT THESE EXPENDITURES ARE TO BE DIS ALLOWED. ACCORDINGLY, WE AL LOW THE EXPENDITURE CLAIMED BY THE ASSESSEE WHICH HAS BEEN DEBITED IN THE PROFIT AND LOSS ACCOUNT AGAINST THE BUSINESS INCOME. THUS, GROUNDS RAISED BY THE ASSESSEE ARE TREATED ALLOWED. 9 . N OW WE WILL TAKE - UP , ITA NO.4381 OF 2014 , WHICH ADMITTEDLY, THE FAC TS ARE QUITE SIMILAR TO THE ABOVE APPEAL . HERE IN THIS CASE, THE ASSESSEE HAD SHOWN BUSINESS INCOME FROM REAL ESTATE TRANSACTION / COMMISSION AT RS.5,78,500/ - . THE ASSESSEE IS IN THE FIELD OF CONSTRUCTION AND CONSULTANCY IN REAL ESTATE BUSINESS FOR THE LAST 20 YEARS ; AND IS ALSO A PARTNER IN M/S GOKUL CONSTRUCTION FROM WHER E HE HAS RECEIVED REMUNERATION F OR HIS SERVICES. ALL THESE INCOMES ARE ASSESSABLE UNDER THE HEAD INCOME FROM BUSINESS AND PROFESSION . AUTHORITIES BELOW HAVE DISALLOWED EXPENDITURES ON TH E GROUND THAT, FIRSTLY , THE ASSESSEE COULD NOT ESTABLISH THE EXPENSES CLAIMED AGAINST THE BUSINESS INCOME AND SECONDLY , DETAILS OF BUSINESS INCOME HAVE NOT BEEN SHOWN . A CCORDINGLY , IT WAS TREATED AS INCOME FROM OTHER SOURCES AND EXPENSES WERE DISALLOWED BY THE 8 ITA NO. : 4 380/MUM/2014 VISHANDAS S LAKHANI ITA NO. : 438 1 /MUM/2014 VIJAYKUMAR SATRAMDAS LAKHANI AO AND CONFIRMED BY LD. CIT(A). THE REASONING GIVEN BY AO AND CIT(A) ARE EXACTLY SAME , AS HAS BEEN GIVEN IN THE EARLIER CASE . 10 . HERE IN THIS CASE ALSO, THE LD. COUNSEL HAD FILED THE COPY OF ORDER SHEET - ENTRY OF THE FIRST APPELLATE AUTHORITY TO CONT ROVERT THE FINDING OF THE LD. CIT(A) . IN THIS CASE ALSO ALL THE DETAILS OF EARNING OF BUSINESS INCOME AS WELL AS DETAILS AND NATURE OF EXPENSE INCURRED WERE FILED ALONG WITH THE LEDGER ACCOUNT BEFORE THE LD. CIT(A). THE BREAK - UP OF EXPENDITURE AS GIVEN BEFO RE US ARE AS UNDER: - S. NO. DETAILS OF EXPENSES BANK CASH JOURNAL ENTRIES TOTAL 1 AUDIT FEES 11,030 - - 11,030 2 BANK CHARGES 1 4 , 525 - - 1 4 , 525 3 BANK INTEREST 1 2 ,5 9 , 40 5 - - 1 2 ,5 9 , 40 5 4 CONVEYANCE 2,44,427 - - 2,44, 427 5 DEPRECIATION - - 1,76,999 1,76,999 6 INSURANCE CAR 2 4 , 51 7 - - 2 4 , 51 7 7 INTEREST ON LOAN 15,14,310 - 2,112 15,14,310 8 LOAN PROCESSING CHARGES 17,595 - - 17,595 9 CAR MAINTENANCE - 24,141 - 24,141 1 0 MEMBERSHIP FEES 26 ,000 - - 26 ,000 11 PROFESSIONAL FEES 6 5,000 - - 6 5,000 1 2 TELEPHONE EXPENSES 34,874 - - 34,874 TOTAL 32,11,683 24,141 1,76,999 34,12,823 LD. COUNSEL DREW OUR ATTEN TION TO COPY OF THE LEDGER ACCOUNT AS PLACED IN THE PAPER BOOK AND SUBMITTED THAT, ASSESSEE HAS BEEN EARNING BUSINESS INCOME NOT ONLY IN THIS YEAR BUT ALSO IN THE EARLIER YEARS FOR WHICH REGULAR BOOKS OF ACCOUNTS, LEDGER ACCOUNTS HAVE BEEN MAINTAINED. THE LEDGER ACCOUNT REVEALED THAT RS. 5 ,78,500/ - HAS BEEN EARNED AS COMMISSION INCOME WHICH HAS BEEN SHOWN AS SUCH IN THE RETURN OF INCOME . THUS, SHE SUBMITTED THAT, SUCH AN INCOME HAS TO BE TREATED AS BUSINESS INCOME AND EXPENDITURE S INCURRED NEEDS TO BE ALLOWE D. 9 ITA NO. : 4 380/MUM/2014 VISHANDAS S LAKHANI ITA NO. : 438 1 /MUM/2014 VIJAYKUMAR SATRAMDAS LAKHANI 11. AFTER CONSIDERING THE RELEVANT FINDING GIVEN IN THE IMPUGNED ORDERS AS WELL AS MATERIAL PLACED BEFORE US, WE FIND THAT ASSESSEE HAD FILED ALL THE DETAILS OF INCOME EARNED AND EXPENDITURE INCURRED. LOOKING TO THE NATURE OF EXPENDITURE AND ALSO THE F ACT THAT THE SAME HAS BEEN INCURRED MOSTLY THROUGH ACCOUNT PAYEE CHEQUE S , IT CAN NOT BE HELD THAT EITHER THE EXPENSES ARE UNVERIFIABLE OR THEY HAD NOT BEEN INCURRED FOR THE PURPOSES OF THE EARNING OF THE INCOME SHOWN BY THE ASSESSEE. IN ANY CASE, THE AO HIM SELF HAS COMPUTED THE INCOME FROM BUSINESS WHICH IS IN THE FORM OF REMUNERATION FROM THE FIRM. HOWEVER, HE HAS TREATED THE BUSINESS INCOME AT RS.5,78,500/ - AS INCOME FROM OTHER SOURCES WHICH, IN OUR OPINION, IN WAKE OF EVIDENCES FILED CANNOT BE UPHELD . A CCORDINGLY, LIKE IN THE EARLIER APPEAL, WE HOLD THAT INCOME OF RS.5,7 8 , 5 00/ - IS ASSESSABLE AS BUSINESS INCOME UNDER SECTION 28 AND EXPENDITURE CLAIMED IN THE PROFIT AND LOSS ACCOUNT HAVE TO BE ALLOWED AS DEDUCTION WHICH COMPUTING THE INCOME OF THE ASSESS EE. THUS, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 12. IN THE RESULT, BOTH APPEALS FILED BY THE ASSESSEES STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 1 ST JULY, 2016 . SD/ - SD/ - ( ) ( ) ( ASHWANI TANEJA ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICI AL MEMBER MUMBAI, DATE: 2 1 ST JULY, 2016 10 ITA NO. : 4 380/MUM/2014 VISHANDAS S LAKHANI ITA NO. : 438 1 /MUM/2014 VIJAYKUMAR SATRAMDAS LAKHANI / COPY TO: - 1 ) / THE APPELLANT. 2 ) / THE RESPONDENT. 3 ) THE C IT 6 , MUMBAI . 4 ) THE C IT - III , MUMBAI 5 ) , , / THE D.R. F BENCH, MUMBAI. 6 ) \ C OPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * . . *CHAVAN, SR.PS