LAXMAN S. RAPOLU, DOMBIVALI V. ITO 15(2)(1), MUMBAI

ITA 4574/MUM/2015

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2520 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 06-08-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VISHWAS JADHAV
• Assessee Lawyers: RAMULU RAPOLU
• Keywords: Business income; Business expenditure
• Section: 133(6)

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , BEFORE SHRI SANJAY ARORA , AM ./ I.T.A. NO. 4574/MUM/2015 ( / ASSES SMENT YEAR: 2009 - 10) LAXMAN S. RAPOLU NO. 8, MEADOWS CHS, LODHA HEAVE, NILJE, DOMBIVALI (E), THANE 421 203 / VS. ITO - 15(2)(1), MATRU MANDIR, NANA CHOWK, MUMBAI ./ ./ PAN/GIR NO. AHIPR 0930 K ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI RAMULU RAPOLU / RESPONDENT BY : SHRI VISHWAS JADHAV DATE OF HEARING : 01.12.2015 DATE OF ORDER : 10 .12.2015 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN A P PEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 17 , MUMBAI (CIT(A) FOR SHORT) DATED 09.3.2015 , DISMISSING THE A SSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S.143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREIN AFTER) FOR THE ASSESSMENT YEAR (A.Y.) 2009 - 10 VIDE ORDER DATED 30.12.2011. 2. THE ONLY ISSUE IN APPEAL RELATES TO THE DISALLOWANCE OF THE ASSESSEE - APPELLANTS CLAIM FOR FRANCHISE FEES , CLAIMED TO BE PAID IN THE SUM OF RS.5,92,500/ - , IN THE COMPUTATION OF HIS BUSINESS INCOME. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, AN INDIVIDUAL, ENGAGED IN THE BUSINESS OF DATA ENTRY, CLAIMED TO HAVE PAID THE IMPUGNED SUM TO ONE , MR. RAVI KUMAR , FOR GETTING BUSINESS. IT WAS EXPLAINED BY HIM IN THE ASSESSMENT PROC EEDINGS ( VIDE LETTER DATED 26.12.2011 ) , THAT THOUGH HE INITIALLY 2 ITA NO. 4574/ MUM/ 2015 (A.Y. 2009 - 10) LAXMAN S. RAPOLU VS. ITO G O T SOME BUSINESS THROUGH THE SAID PERSON , THEREAFTER R AVI KUMAR DISAPPEARED AND WAS NOT TRACEABLE. NOTICE U/S. 133(6) (DATED 26.9.2011) SENT TO THE SAID PARTY EARLIER HAD CAME BACK UN - SERVED , WITH THE POSTAL REMARK U NKNOWN . THE ASSESSEE HAD FAILED TO PRODUCE THE SAID PARTY. UNDER THE CIRCUMSTANCES, IN VIEW OF THE ASSESSING OFFICER (A.O.) , NEITHER THE GENUINENESS OF THE SAID PARTY NOR OF THE ASSESSEES CLAIM WAS PROVED. HE, ACCORDINGLY, DISA LLOWED THE SAME. NO IMPROVEMENT IN H IS CASE BEING MADE IN THE FIRST APPELLATE PROCEEDINGS, THE SAME STOOD CONFIRMED IN APPEAL, SO THAT THE ASSESSEE, AGGRIEVED, IS IN SECOND APPEAL. 3. DURING HEARING, AS IN THE PAST, THE ASSESSEES BROTHER , SH . RAMULU RAPO LU, ATTENDED. THE ASSESSEE, HE WOULD SUBMIT, HAS NOT BEEN ABLE TO E N GAGE ANY COUNSEL, EVEN AS HE HAD APPROACHED AS MANY AS FOUR CAS. THIS IS AS ON AN EARLIER OCCASION ADJOURNMENT HAD BEEN SOUGHT ON THAT GROUND. THE HEARING MAY, THEREFORE, BE PROCEEDED WITH ; HIS BROTHER , WHO HA D AUTHORIZED HIM (LETTER ON RECORD) , CONTINU ING TO BE N OT WELL. IN CANVASSING THE CASE, THE FACTS WITH WHICH HE WAS WELL CONVERSANT , THE ASSESSEES CASE, HE CLARIFIED, CONTINUED TO BE THE SAME AS BEFORE THE REVENUE AUTHORITIES. THAT IS , THAT THE ASSESSEE HAD BEEN DUPED. THE LD. DEPARTMENTAL REPRESENTATIVE (DR), ON THE OTHER HAND, PLEADED THAT THE ASSESSEES CASE CONTINUED TO BE WHOLLY UNSUBSTANTIATED; RATHER, ONLY A MAKE - BELIEVE. 4 . THE PARTIES HAVE BEEN HEARD, AND THE MATERIAL ON RECORD PERUSED. THE ONLY EVIDENCE ADDUCED BY THE ASSESSEE, AS GATHERED FROM THE READING OF THE ASSESSMENT A N D THE IMPUGNED ORDE R ; THE ASSESSEE HAVING NO T ADDUCED ANY MATERIALS BEFORE THE T RIBUNAL , I S TOWARD THE IMPUGNED PAYMENT BEING MADE BY A BANK DRAFT. EVEN THOUGH STATED TO BE TO THE SAID RAVI KUMAR, EVEN THIS CAN NOT BE SAID TO BE PROVED. EVEN SO, WHO IS THIS PERSON, AND WHAT ARE H IS A N TE CE DE NT S? HOW WAS HE IN A POSITION TO GET THE BUSINESS TO THE ASSESSEE, AS WHERE THE ASSESSEE PARTICIPATED IN A TEND ERING PROCESS, IN WHICH THE SAID PERSON HAD OR COULD PLAYED A PAR T ? WAS THERE ANY PAST ASSOCIATION WITH HIM? WHAT IS THE BASIS OF THE AMOUNT WORKED OUT, WHICH IS PAID NOT IN A ROUND SUM , AND ADMITTEDLY WITHOUT ANY AGREEMENT OR CONTRACT? WHAT BUSINESS 3 ITA NO. 4574/ MUM/ 2015 (A.Y. 2009 - 10) LAXMAN S. RAPOLU VS. ITO WAS O BTAINED THROUGH THIS PERSON? THERE IS NO EXPLANATION /S , MUCH LESS SUBSTANTIATION, TO ANY OF THESE AND THE LIKE QUESTIONS THAT ARISE INTO THE MATTER. HOW COULD, THEN, IT ALL BE SAID THAT THE AMOUNT PAID WAS BY WAY OF FRANCHISE FEE , WHICH IS ORDINARILY WHERE SOME RIGHTS ARE GIVEN FOR USE OF A BRAND, PATENT, ETC ? HOW , THEN , COULD IT BE SAID TO REPRESENT BUSINESS EXPENDITURE? THE I NVOICE FILED BY THE ASSESSEE IN ITS RESPECT WAS ON A PLAIN PAPER, INSPIRING NO CO NFIDENCE . CONSIDERED FROM ANY ANGLE, THE ASSESSEES CASE IS WITHOUT ANY BASIS AND MATERIAL S WHATSOEVER , I.E., STANDS COMPLETELY UNPROVED IN TERMS OF SECTION 37(1). THE DENIAL OF DEDUCTION BY THE REVENUE IS THUS ON MERITS. NO GROUND O R INTERFERENCE IS MADE OUT , AND THE ASSESSEE FAILS. I DECIDE ACCORDINGLY. 6. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON DECE MBER 01 , 201 5 AT THE CONCLUSION OF THE HEARING ITSELF. SD/ - (S ANJAY ARORA) / A CCOUNTANT MEMBER MUMBAI ; DATED : 10 . 12 .201 5 . . ./ ROSHANI , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI