FASHION FORECASTS (INDIA), MUMBAI V. D.C.I.T. 17(1), MUMBAI

ITA 4470/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100501 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 25-02-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 02-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHAMMED RIZWAN
• Assessee Lawyers: SANJAY PARIKH
• Keywords: Unexplained expenditure; Depreciation
• Section: 69; 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI D . K ARUNAKARA RAO , ACCOUNTANT MEMBER AND SHRI SANJAY GARG , JUDICIAL MEMBER ITA NO. 4470 /MUM./ 2012 ( ASSESSMENT YEAR : 20 08 0 9 ) M/S. FASHION FORECASTS (INDIA) 124, BHARAT INDUSTRIAL ESTATE T.J. ROAD, SEWREE (WEST) MUMBAI 400 015 PAN AAAFF5173F .. APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CIRCLE 17(1), MUMBAI .... RESPONDENT ASSESSEE BY : SHRI SANJAY PARIKH REVENUE BY : SHRI MOHAMMED RIZW AN DATE OF HEARING 11 .0 8 .2015 DATE OF PRONOUNCEMENT 11.08.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER TH E PRESENT APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 22 ND MAY 2012 , PASSED BY THE LEARNED COMMISSIONER ( APPEALS) 34 , MUMBAI , FOR THE ASSESSMENT YEAR 20 0 8 09 . THE GROUNDS RAISED BY THE REVENUE ARE AS FOLLOWS: A . ADDITION UNDER SECTION 69C - RS. 2,32,672/ - 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 34, MUMBAI [CIT(A)] ERRED ON FACTS AND IN LAW IN SUSTAINING THE ADDITION MADE BY THE LEARNED DEPUTY COMMISSIONER OF INCOME M/S. FASHION FORECASTS ( INDIA) 2 TAX - 17(1), MUMBAI (AO) UNDER SECTION 69C OF THE INCOME TAX ACT, 1961 TO THE EXTENT OF RS. 2,32,672/ - ON THE ALLEGED GROUND THAT THE INVOICES RELATING TO AIR CONDITIONER SYSTEM WERE NOT IN THE NAME OF THE APPELLANT. 2. THE APPELLANT PRAYS THAT YOUR HONOURS HOLD THAT THE APPELLANT HAD NOT INCURRED ANY UNEXPLAINED EXPENDITURE WITHIN THE MEANING OF SECTION 69C AND HENCE THE ADDITION U/S. 69C OF RS. 2,32,672/ - MAY BE DELETED. B. DISALLOWANCE OF DEPRECIATION ON AIR CONDITIONER - RS. 34,9011 - 3. THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN UPHOLDING THE ORDER OF THE AO DISALLOWING DEPRECIATION ON AIR CONDITIONER SYSTEM AMOUNTING TO RS.34,901/ - . 4. THE APPELLANT PRAYS THAT YO UR HONOURS HOLD THAT THE APPELLANT HAD RIGHTLY CLAIMED DEPRECIATION ON AIR CONDITIONER SYSTEM AMOUNTING TO RS.34,901/ - AND HENCE THE DISALLOWANCE IN TH IS REGARD MAY BE DELETED. 2. FACTS IN BRIEF : THE FACTS IN RELATION TO THE EFFECTIVE ISSUE RAISED BEFORE US ARE THAT THE ASSESSING OFFICER HAD FOUND THAT THE INVOICE RELATING TO INSTALLATION OF AIR CONDITIONERS W AS NOT IN THE NAME OF THE ASSESSEE BUT WAS IN THE NAME OF ITS SISTER CONCERN M/S. DEARLY FASHION FORECAST (INDIA). THE ASSESSING OFFICER MADE ADDITIO NS IN RESPECT OF THE SAID AMOUNT UNDER SECTION 69 OF THE ACT. THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE IS THAT THE EXPENDITURE WAS DULY ACCOUNTED IN THE BOOKS OF ACCOUNT, HENCE, THE PROVISIONS OF SECTION 69C OF THE ACT, ARE NOT ATTRACTED IN T HIS CASE. HE HAS FURTHER SUBMITTED THAT THE EXPENDITURE WAS DULY INCURRED FOR INSTALLATION OF THE AIR CONDITIONERS WHICH WERE PURCHASED VIDE INVOICE DATED 26 TH DECEMBER 2006, COPY OF WHICH HAS BEEN PLACED AT PAGE 24 OF THE PAPER BOOK. M/S. FASHION FORECASTS ( INDIA) 3 3. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS RELIED UPON THE FINDINGS OF THE AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE EXPENDITURE IN RELATION TO WHICH THE ADDITIONS HAVE BEEN MADE BY THE ASSESSING OFFICER WAS DULY ACCOUNTED IN THE BOOKS OF ACCOUNT. UNDER SUCH CIRCUMSTANCES, THE PROVISIONS OF SECTION 69C OF THE ACT ARE NOT ATTRACTED IN THE PRESENT CASE. THE ASSESSING OFFICER CAN DISALLOW THE EXPENDITURE IF TH E SAME I S NOT INCURRED BY THE ASSESSEE OR I S NOT IN RELATION TO THE BUSINESS ACTIVITIES OF THE ASSESSEE. IN THIS CASE, T HE ASSESSING OFFICER HAS MADE THE ADDITION ONLY BECAUSE THE BILLS HAVE NOT BEEN ISSUED IN THE NAME OF THE ASSESSEE BUT IN THE NAME OF OT HER PARTY , CLAIMED TO BE ITS SISTER CONCERN OF THE ASSESSEE. THE ASSESSING OFFICER HAS NOT EXAMINED AS TO WHETHER THE EXPENDITURE CLAIMED HAS ACTUALLY BEEN INCURRED OR NOT BY THE ASSESSEE. EVEN THE LEARNED CIT(A) HAS ALSO FAILED TO TAKE INTO CONSIDERATION THIS FACTUAL ASPECTS OF THE CASE. WE, THEREFORE, DEEM IT FIT AND PROPER TO RESTORE THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR A FRESH EXAMINATION AS TO WHETHER OR NOT THE EXPENDITURE CLAIMED BY THE ASSESSEE WAS ACTUALLY INCURRED AND THEREAFTER TO PASS ASSESSMENT ORDER AFRESH ON THIS ISSUE AFTER PROVIDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. WE ORDER ACCORDINGLY. M/S. FASHION FORECASTS ( INDIA) 4 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT O N 1 1 TH AUGUST 2015. SD/ - D. KARUNAKARA RAO ACCOUNTANT MEMBER SD/ - SANJAY GARG JUDICIAL MEMBER MUMBAI, DATED : 11.08.2015 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE C OPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT. REGISTRAR) ITAT, MUMBAI