LAW CHARTER, MUMBAI V. ASST CIT CIR 11(2), MUMBAI

ITA 4875/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1252 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2010-2011
• Appeal Filed On: 22-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V J ASRANI
• Keywords: Business income; Business expenditure; Principle of natural justice; Additional evidence; Question of law; Reasonable cause; Revised return
• Section: 143(3); 37

Judgement Text

I IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO. 4875/ MUM/2016 ( / ASSESSMENT YEAR : 2010-11) LAW CHARTER, 1, RAJA BAHADUR MANSION, HANUMAN STREET, FORT, MUMBAI 400 023. / V. THE ASSTT. COMM. OF INCOME TAX CIRCLE 11(2), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. ./ PAN : AABFL 2094 G ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY : SHRI V.J. ASRANI REVENUE BY : SHRI SUNIL KUMAR AGARWAL, DR / DATE OF HEARING : 13-04-2017 / DATE OF PRONOUNCEMENT : 21-04-2017 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE ASSESSEE, BEING ITA NO. 4 875/MUM/2016, IS DIRECTED AGAINST THE APPELLATE ORDER DATED 18 TH APRIL, 2016 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 5, MUMBAI (HE REINAFTER CALLED THE CIT(A)), FOR THE ASSESSMENT YEAR 2010-11, THE APPE LLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) ARISING FROM THE ASSESSMENT ORDE R DATED 31 ST DECEMBER, 2012 PASSED BY THE A.O. U/S 143(3) OF THE INCOME-T AX ACT, 1961 (HEREINAFTER CALLED THE ACT). ITA 4875/MUM/2016 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN MEMO OF APPEAL FILED WITH THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI (HER EINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- 1. RE.: NON-ADMISSION OF ADDITIONAL EVIDENCE : 1:1 THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERR ED IN NOT ADMITTING THE ADDITIONAL EVIDENCE FILED BY THE APPELL ANT BEFORE HIM WITHOUT APPRECIATING THE FACT THAT THE APPELLANT HAD SU FFICIENT CAUSE/REASONS FOR NOT FILING THE ADDITIONAL EVIDENCE BEFORE THE ASSESSING OFFICER. 1:2 THE APPELLANT SUBMITS THAT CONSIDERING THE FACTS AND CIRCUMSTANCE OF ITS CASE AND THE LAW PREVAILING ON TH E SUBJECT THE ADDITIONAL EVIDENCES WERE GERMANE TO THE ISSUE AT HAND AND WERE ADMISSIBLE IN TERMS OF RULE 46A OF THE INCOME-TAX RUL ES,1962 AND THE COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE CON SIDERED THE SAME WHILE DECIDING THE APPEAL. 2: RE.: DISALLOWANCE OF LIFE INSURANCE PREMIUM RS. 3,00,000/-: 2:1 THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERR ED IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING OFF ICER OF RS. 3,00,000/- BEING LIFE INSURANCE PREMIUM PAID BY THE APPELLANT FOR ITS PARTNERS. 2:2 THE APPELLANT SUBMITS THAT CONSIDERING THE FACTS AND CIRCUMSTANCES OF ITS CASE AND LAW PREVAILING ON THE SU BJECT THE EXPENDITURE BY WAY OF LIFE INSURANCE PREMIUM INCURR ED BY IT WAS WHOLLY, EXCLUSIVELY AND NECESSARILY FOR THE PURPOSE OF ITS BUSINESS AND IS HENCE ALLOWABLE IN COMPUTING ITS BUSINESS INCOME AND THE COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE HEL D AS SUCH. 2:3 THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER B E DIRECTED TO DELETE THE DISALLOWANCE SO MADE BY HIM AND TO RE-COM PUTE ITS TOTAL INCOME ACCORDINGLY. 2:4 WITHOUT PREJUDICE TO THE AFORESAID THE COMMISSIONE R OF INCOME- TAX (APPEALS) HAS ERRED IN NOT ACCEPTING THE REVISED C LAIM MADE BY THE APPELLANT DURING THE COURSE OF THE ASSESSMENT PROCEED INGS OF TREATING THE SAID PREMIUM AS A PART OF PARTNER'S REMUNERATION, WHICH CLAIM WAS NOT MADE BY IT AT THE TIME OF FILING ITS RETURN OF INCO ME FOR THE YEAR. ITA 4875/MUM/2016 3 3:0 RE.: DISALLOWANCE OF CONVEYANCE, TELEPHONE, ELE CTRICITY AND ENTERTAINMENT EXPENSES: 3:1: THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS ER RED IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING OFF ICER IN RESPECT OF CONVEYANCE, TELEPHONE, ELECTRICITY AND ENTERTAINMENT EXPENSES AMOUNTING TO RS. 5,15,000/- INCURRED BY THE APPELLANT . 3:2 THE APPELLANT SUBMITS THAT CONSIDERING THE FACTS AND CIRCUMSTANCES OF ITS CASE AND THE LAW PREVAILING ON THE SUBJECT, THE SAID EXPENSES ARE ALLOWABLE WHILE COMPUTING ITS TOTAL INCOM E AND THE COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE HEL D AS SUCH. 3:3 THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER B E DIRECTED TO DELETE THE DISALLOWANCE SO MADE BY HIM AND TO RE-COM PUTE ITS TOTAL INCOME ACCORDINGLY. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM OF PRACTICING SOLICITORS. THE CASE WAS SELECTED FOR SCRUTINY BY THE A.O. FOR FRAMING ASSESSMENT U/S 143(3) OF 1961 ACT AND TWO ADDITIONS WERE MADE BY THE AO VIDE ASSESSMENT ORDER DATED 31-12-2012 PASSED BY TH E AO U/S 143(3) OF 1961 ACT. FIRSTLY, THE ADDITION WAS MADE BY THE AO ON ACCOUNT OF LIC PREMIUM OF RS. 3 LACS DEBITED TO THE P&L ACCOUNT WH ICH WAS INCURRED FOR THE PARTNER OF THE ASSESSEE FIRM. THE A.O. DISALLOWED THE SAME ON THE GROUNDS THAT THE PARTNERS OF THE FIRM ARE THE OWNERS OF TH E FIRM AND THEY HAVE DEFINITE PERCENTAGE OF SHARE IN PROFITS AND LOSS EARNED BY T HE FIRM. THE PARTNERS TAKE THEIR OWN DECISION AND SUPERVISION TO CONTROL OVER THE BUSINESS ACTIVITIES OF THE FIRM AND DO NOT DEPEND ON THE ORDERS AND DIRECT IONS OF OTHERS AND THEY CANNOT BE TREATED AS EMPLOYEES. HENCE, THE A.O. DE NIED THE DEDUCTION TOWARDS LIFE INSURANCE PREMIUM OF RS. 3,00,000/- U/ S 37 OF THE ACT AND ADDED BACK THE SAME TO THE INCOME OF THE ASSESSEE. SECONDLY, THE A.O. OBSERVED THAT CERTAIN EXPENSES WERE REIMBURSED TO T HE PARTNER WHICH IS IN THE NATURE OF PERSONAL EXPENSES OF THE PARTNERS, WHICH WAS CERTIFIED BY TAX- AUDITOR TO BE EXPENSES OF PERSONAL NATURE REIMBURSE D TO PARTNERS IN FORM NO. 3CD FOR ASSESSMENT YEAR 2010-11 IN COLUMN NO. 17(B) . THE HEAD OF THE EXPENSES ARE AS UNDER:- ITA 4875/MUM/2016 4 1. CONVEYANCE EXPENSES : RS. 2,60,000/- 2. TELEPHONE EXPENSES : RS. 45,000/- 3. ELECTRICITY EXPENSES : RS. 1,50,000/- 4. ENTERTAINMENT EXPENSES : RS. 60,000/- TOTAL : RS. 5,15,000/- =========== THE ASSESSE WAS ASKED TO FURNISH THE DETAILS OF REI MBURSEMENT OF EXPENSES TO PARTNERS AND HOW THE REIMBURSEMENT OF EXPENSES IS A LLOWABLE IN CASE OF THE ASSESSEE FIRM. IN REPLY, THE ASSESSEE EXPLAINED AS UNDER:- 'WE ARE A FIRM OF PROFESSIONALS AND ATTEND TO THE W ORK OF THE PARTNERSHIP AND CLIENTS EVEN FROM THE RESIDENCE AND ARE REQUIRED TO ENTERTAIN CLIENTS AND OTHERS IN CONNECTION WITH THE PROFESSION. PARTNER SPENDS THESE FOR THE PURPOSES OF AND INCIDE NTAL TO THE ACTIVITIES OF THE PARTNERSHIP WHICH CONTRIBUTES TO THE GENERATION OF THE INCOME OF THE FIRM AND ARE LEGITIMATE PAYMEN TS DEDUCTIBLE AND HAVE BEEN CLAIMED AND ALLOWED SINCE THE INCEPTI ON OF THE FIRM. THESE ARE REIMBURSED AS PER THE PROVISIONS OF THE PARTNERSHIP. THE ABOVE CONTENTIONS OF THE ASSESSEE WAS REJECTED BY THE A.O. ON THE GROUND THAT THE ASSESSEE FIRM HAS NOT PRODUCED ANY EVIDENC E WHICH COULD SHOW THAT THE ABOVE EXPENSES HAD BEEN INCURRED BY THE PARTNER S FOR ATTENDING THE CLIENTS AND MOREOVER THE AUDITOR OF THE ASSESSEE HA D HIMSELF IDENTIFIED THESE EXPENSES BEING OF PERSONAL NATURE REIMBURSED TO THE PARTNERS IN THE TAX-AUDIT REPORT IN FORM NO 3CD IN CLAUSE 17(B), WAS THE OBSE RVATION OF THE AO. THUS, THE A.O. TREATED THE SAID EXPENSES OF RS. 5,15,000/ - AS PERSONAL EXPENSES OF THE PARTNERS AND THE SAME WERE DISALLOWED AND ADDED TO THE INCOME OF THE ITA 4875/MUM/2016 5 ASSESSEE, VIDE ASSESSMENT ORDER DATED 31-12-2012 PA SSED BY THE AO U/S 143(3) OF 1961 ACT. 4.AGRIEVED BY THE ASSESSMENT ORDER DATED 31-12-2012 PASSED BY THE A.O. U/S 143(3) OF 1961 ACT, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO BY FOLLOWING HIS PREDECESSORS APPELLATE ORDERS DATED 07-12-2011 FOR ASSESSMENT YEAR 2008-09, DISMISSED THE APPEAL F ILED BY THE ASSESSEE, VIDE APPELLATE ORDERS DATED 18.04.2016 THE ADDITIONAL E VIDENCES SUBMITTED BY THE ASSESSEE BEFORE THE LEARNED CIT(A) WERE NOT ADMITTE D BY LEARNED CIT(A) AS IT COULD BE BORNE OUT ALSO FROM THE APPELLATE ORDERS D ATED 07-12-2011 PASSED BY LEARNED CIT(A) FOR ASSESSMENT YEAR 2008-09 , WHI CH WAS RELIED UPON BY LEARNED CIT(A) FOR ADJUDICATING APPEAL FOR THE INST ANT YEAR , THAT THE THEN LEARNED CIT(A) PASSED THE APPELLATE ORDERS DATED 07 -12-2011 FOR ASSESSMENT YEAR 2008-09 BY NOT CONSIDERING THE ADDITIONAL EVID ENCES FILED BY THE ASSESSEE WHICH WERE NOT ALLOWED TO BE ADMITTED. 5. AGGRIEVED BY THE APPELLATE ORDER DATED 18-04-201 6 PASSED BY LEARNED CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUN AL. 6. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT ONE OF GROUNDS OF APPEAL RAISED BY THE ASSESSEE IS THAT TH E LD. CIT(A) HAS NOT ADMITTED THE ADDITIONAL EVIDENCE FILED BY THE ASSES SEE BEFORE HIM. IT IS SUBMITTED THAT NON ADMISSION OF THE ADDITIONAL EVI DENCES FILED BY THE ASSESSEE HAS LED TO GROSS VIOLATION OF PRINCIPLES O F NATURAL JUSTICE. IT WAS ALSO BROUGHT TO OUR NOTICE THAT LEARNED CIT(A) RELIED UP ON HIS PREDECESSOR APPELLATE ORDERS DATED 07-12-2011 PASSED FOR ASSESS MENT YEAR 2008-09 WHEREIN ALSO THE LEARNED CIT(A) HAS DECLINED TO ADM IT THE ADDITIONAL EVIDENCES. THE LD. COUNSEL REQUESTED THAT THE MATT ER MAY BE SET ASIDE TO THE FILE OF THE LD. CIT(A) AS THE LD. CIT(A) REJECTED T HE ADDITIONAL EVIDENCE FILED BY ITA 4875/MUM/2016 6 THE ASSESSEE AND DECLINED TO ADMIT THE SAME AND HEN CE PROCEEDINGS HAD GOT VITIATED AT THE STAGE OF APPELLATE PROCEEDINGS BEFO RE LEARNED CIT(A). 7. THE LD. D.R., ON THE OTHER HAND, SUPPORTED THE O RDERS OF AUTHORITIES BELOW. 8. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE OBSERVED THAT THE ASS ESSEE IS A FIRM OF PRACTICING SOLICITORS. THE ASSESSEE HAS CLAIMED AS BUSINESS EXPENSES LIC PREMIUM OF RS. 3 LACS PAID BY THE ASSESSEE FOR PAR TNER OF THE ASSESSEE WHICH EXPENSES WERE DEBITED TO PROFIT AND LOSS ACCOUNT. . THE A.O. DISALLOWED THE SAME ON THE GROUNDS THAT THE PARTNERS OF THE FIRM ARE THE OWNERS OF THE FIRM AND THEY HAVE DEFINITE PERCENTAGE OF SHARE IN PROFI TS AND LOSS EARNED BY THE FIRM. THE PARTNERS TAKE THEIR OWN DECISION AND SUPE RVISION TO CONTROL OVER THE BUSINESS ACTIVITIES OF THE FIRM AND DO NOT DEPEND O N THE ORDERS AND DIRECTIONS OF OTHERS AND THEY CANNOT BE TREATED AS EMPLOYEES O F THE ASSESSEE FIRM. HENCE, THE A.O. DENIED THE DEDUCTION TOWARDS LIFE I NSURANCE PREMIUM OF RS. 3,00,000/- PAID FOR PARTNERS OF THE ASSESSEE U/S 37 OF THE ACT AND ADDED BACK THE SAME TO THE INCOME OF THE ASSESSEE. SEC ONDLY, EXPENSES OF CONVEYANCE, TELEPHONE, ELECTRICITY AND ENTERTAINMEN T EXPENSES TOTALING RS. 5,15,000/- WERE ALSO DISALLOWED BY THE A.O. ON THE GROUND THAT THE ASSESSEE FIRM HAS NOT PRODUCED ANY EVIDENCE WHICH COULD SHOW THAT THE ABOVE EXPENSES HAD BEEN INCURRED BY THE PARTNERS FOR ATTE NDING THE CLIENTS AND MOREOVER THE AUDITOR OF THE ASSESSEE HAD HIMSELF ID ENTIFIED THESE EXPENSES BEING OF PERSONAL NATURE REIMBURSED TO THE PARTNERS IN THE TAX-AUDIT REPORT IN FORM NO 3CD , WAS THE OBSERVATION OF THE AO. THUS, THE A.O. TREATED THE SAID EXPENSES OF RS. 5,15,000/- AS PERSONAL EXPENSES OF THE PARTNERS AND THE SAME WERE DISALLOWED AND ADDED TO THE INCOME OF THE ASSESSEE. IT IS THE SAY OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ADDITIONA L EVIDENCE FILED BEFORE THE LD. CIT(A) WAS REJECTED BY LEARNED CIT(A) WHICH IS IN V IOLATION OF RULE 46A OF THE ITA 4875/MUM/2016 7 INCOME-TAX RULES, 1962. THE LD. CIT(A) ADJUDICATED THE APPEAL BASED UPON THE APPELLATE ORDER OF HIS PREDECESSOR FOR A.Y. 200 8-09 , BY HOLDING AS UNDER:- GROUND NO. (1) 3. IN GROUND NO. (1) APPELLANT CHALLENGES DISALLOWA NCE OF LIFE INSURANCE PREMIUM AMOUNTING TO RS.3,00,000/-. 3.1 APPELLANT HAD DEBITED LIFE INSURANCE PREMIUM OF RS.3.00,000/- IN THE PROFIT AND LOSS ACCOUNT. AO HAD DISALLOWED T HE CLAIM OF THE APPELLANT. 3.2 THIS IDENTICAL ISSUE WAS CONSIDERED BY CIT(A) - 3 VIDE ORDER DATED 07.12.2011 IN PARA 1.3.1 FOR A.Y. 2008-09 WHE RE IT IS HELD AS UNDER: 1.3.1 IT IS FURTHER SEEN THAT THE APPELLANT HAS FAI LED TO PRODUCE ANY EVIDENCE WHICH SHOWS THAT IN THE EVENT OF DEATH OF ANY PARTNER, THE FIRM AND NOT THE PARTNER' S LEGAL HEIR SHALL RECEIVE THE SUM ASSURED SO THAT THERE IS NO PROFESSIONAL SET BACK TO THE FIRM AND THE FINANCIA L POSITION OF THE FIRM SHALL NOT GET ADVERSELY EFFECTED. THEREFOR E, THE EXPENDITURE INCURRED ON ACCOUNT OF INSURANCE PREMIU M IS NOT FOR THE BENEFIT OF THE ASSESSEE FIRM. THEREFORE, TH E SAME CANNOT BE TREATED AS INCURRED WHOLLY AND EXCLUSIVEL Y FOR THE PURPOSE OF APPELLANT. THEREFORE, I AM IN AGREEMENT WITH THE AO THAT THE CLAIM WHICH WAS NOT MADE IN THE ORIGINAL RETURN CANNOT BE CLAIMED BY WAY OF REVISED RETURN AS HELD BY THE SUPREME COURT IN THE CASE OF GOETZE INDIA LTD. 284 ITR 323(SUPREME COURT). THE CASE LAW S RELIED BY THE APPELLANT CANNOT BE TAKEN AS PRECEDENT AS TH E FACTS OF THE CASE ARE DIFFERENT AND DEPEND UPON EACH CASE TO EACH CASE. THERE/ORE, THERE CANNOT BE ANY PRECEDENT ON T HE FACTS OF THE CASE, AS EVERY DECISION HAS TO BE UNDERSTOOD IN THE LIGHT OF THE FACTS OF THAT CASE'. AS RIGHTLY SAID B Y THE HON'BLE SUPREME COURT IN WILLIE (WILLIUM) SLANAY V. STATE O F M.P. (AIR) (1956)(SUPREME COURT)116, (1966) (2 SCR 1140) THAT THERE IS NO SUCH A JUDICIAL PRECEDENT ON FACTS THAT COUNSEL AND EVEN JUDGES, ARE SOMETIMES PRONE TO ARGUE AND T O ACT AS IT THEY WERE A DECISION IS AVAILABLE AS A PRECEDENT ONLY IF IT DECIDES A QUESTION OF LAW. THEREFORE, IT IS NOT NEC ESSARY TO REFER ALL THE JUDGMENTS RELIED UPON BY AR IN ITS WR ITTEN ITA 4875/MUM/2016 8 SUBMISSIONS. IN THE LIGHT OF THE ABOVE FACTS AND DI SCUSSIONS, I AM OF THE CONSIDERED OPINION THAT THE EXPENDITURE AMOUNTING TO RS.3,00,000/- INCURRED ON ACCOUNT OF I NSURANCE PREMIUM IN PARTNERS LIFE IS NOT INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OF THE FIRM AND THEREFORE, THE SAME IS DISALLOWED BY THE A.O. ACCOR DINGLY, THIS GROUND OF APPEAL IS TREATED AS DISMISSED. FOLLOWING THE ABOVE DECISION OF CIT(A), MY PREDECES SOR, DISALLOWANCE MADE BY THE AO IS CONFIRMED. THIS GROU ND OF APPEAL IS DISMISSED. GROUND NO. (2) 4. ON GROUND NO.2 APPELLANT CHALLENGES DISALLOWANCE OF CONVEYANCE, TELEPHONE, ELECTRICITY AND ENTERTAINMEN T EXPENSES AMOUNTING TO RS.5,15,000/-. 4.1 AO HAD DISALLOWED APPELLANT'S CLAIM OF CONVEYAN CE, TELEPHONE, ELECTRICITY AND ENTERTAINMENT EXPENSES TO THE TUNE OF RS.5,15,000/- ON THE GROUND THAT APPELLANT HAD NOT PRODUCED ANY E VIDENCE FOR INCURRING OF EXPENSES. 4.2 THIS IDENTICAL ISSUE WAS CONSIDERED BY CIT(A)-3 VIDE ORDER DATED 07.12.2011 IN PARA 2.3 FOR A.Y. 200809 WHERE IT IS HELD AS UNDER: 2.3 I HAVE CONSIDERED THE FACTS AND MATERIAL ON REC ORD. IT IS SEEN THAT THE TAX AUDITOR IN HIS AUDIT REPORT HAS C LEARLY MENTIONED IN COL. NO. 17(B) THAT THE ABOVE EXPENDIT URE ARE PERSONAL IN NATURE WHICH HAVE BEEN REIMBURSED TO TH E PARTNERS. IT IS FURTHER SEEN THAT THE APPELLANT HAS NOT ADDUCED ANY EVIDENCE BEFORE THE AO THAT SAME WERE INCURRED BY THE PARTNER FOR THE PURPOSE OF BUSINESS OF THE APPELLANT FIRM. IT IS ALSO NOTICED THAT THE TELEPHO NE EXPENSES ARE IN RESPECT OF TELEPHONE INSTALLED AT THE RESIDE NCE. SIMILARLY, ELECTRICITY EXPENSES ARE IN RESPECT OF E LECTRICITY BILL OF THE RESIDENCE OF THE PARTNERS. FURTHER, MOTOR CA R EXPENSES ARE ALSO INCURRED BY THE PARTNERS IN THEIR PERSONAL CAPACITY. HENCE, THE EXPENDITURE SO INCURRED CANNOT BE TREATE D AS EXPENDITURE PERTAINING TO ASSESSEE FIRM. THE ADDITIONAL EVIDENCE FILED BY THE APPELLANT ARE NOT ALLOWED TO BE ITA 4875/MUM/2016 9 ADMITTED. THERE HAS BEEN NO SUFFICIENT AND REASONABLE CAUSE FOR NOT PRODUCING THE SAME BEFORE THE AO. IN THE LIGHT OF THESE FACTS, I AM OF THE CONSIDERED OPINION THAT EXPENDITURE INCURRED BY THE PARTNERS PERTAINS TO TH E PARTNERS IN THEIR PERSONAL CAPACITY AND CANNOT BE TREATED AS BUSINESS EXPENDITURE OF THE FIRM. THEREFORE, THE DISALLOWAN CE SO MADE IS CONFIRMED. FOLLOWING THE ABOVE DECISION OF CIT(A), DISALLOWANC E MADE BY THE A.O. IS CONFIRMED.THIS GROUND OF APPEAL IS DISMISSE D. THE ASSESSEES CONTENTION IS THAT THE ADDITIONAL EV IDENCES FILED BY THE ASSESSEE GOES TO THE ROOT OF THE MATTER WHICH WERE NOT CONSIDERED BY LEARNED CIT(A). IT WAS SUBMITTED THAT LEARNED CIT(A) WHILE CONFIRMING THE ASSESSMENT ORDER DATED 31-12-2012 HAS MERELY RELIED UPON HIS P REDECESSOR ORDER FOR ASSESSMENT YEAR 2008-09, WHEREIN ALSO THE THEN LEAR NED CIT(A) DID NOT ALLOW THE ADMISSION OF ADDITIONAL EVIDENCES FILED BY THE ASSESSEE AS WELL FRESH CLAIM WHICH WAS NOT MADE IN THE RETURN OF INCOME WAS NOT ALLOWED TO BE MADE BY LEARNED CIT(A) IN VIEW OF DECISION OF HONBLE SUPR EME COURT IN THE CASE OF GOETZE INDIA LIMITED 284 ITR 323(SC) BY LEARNED CIT (A) WHILE ADJUDICATING THE APPEAL FOR ASSESSMENT YEAR 2008-09. THE FRESH CLAIM ALBEIT WHICH WAS NOT MADE BEFORE THE AO VIDE RETURN OF INCOME INCLUD ING REVISED RETURN OF INCOME CAN BE MADE IN THE APPELLATE PROCEEDINGS AS PER RATIO OF LAW LAID DOWN BY HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. PRUTHVI BROKERS AND SHAREHOLDERS (2012) 349 ITR 336(BOM.) , WHICH CLAIM RAISED BY THE ASSESSEE BEFORE LEARNED CIT(A) WAS NOT ALLOWED BY THE LEARNE D CIT(A). THUS KEEPING IN VIEW FACTUAL MATRIX OF THE CASE AS WELL IN THE INTE REST OF JUSTICE AND FAIR PLAY, WE ARE OF CONSIDERED VIEW THAT ONE MORE OPPORTUNITY NEEDS TO BE GRANTED TO THE ASSESSEE AND HENCE WE ARE INCLINED TO SET ASIDE AND RESTORE THIS MATTER BACK TO THE FILE OF THE LD. CIT(A) FOR DE-NOVO ADJU DICATION OF THE APPEAL ON MERITS IN ACCORDANCE WITH LAW . THE LEARNED CIT(A) IS DIRECTED TO ADMIT THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE AS WELL FRESH CLAIMS WHICH WERE NOT FILED BEFORE THE AO AND DETERMINE THE MATTER/ISSUE S DE NOVO ON MERITS IN ITA 4875/MUM/2016 10 ACCORDANCE WITH LAW. THE ASSESSEE IS DIRECTED TO P RODUCE ALL NECESSARY AND RELEVANT EVIDENCES BEFORE THE LD. CIT(A) TO SUBSTA NTIATE ITS CLAIM. NEEDLESS TO SAY THAT PROPER AND ADEQUATE OPPORTUNITY OF BEING H EARD SHALL BE PROVIDED BY THE LD. CIT(A) TO THE ASSESSEE IN ACCORDANCE WITH T HE PRINCIPLES OF NATURAL JUSTICE IN ACCORDANCE WITH LAW. WE ORDER ACCORDINGL Y. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 4875/MUM/2016 FOR ASSESSMENT YEAR 2010-11 IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST APRIL, 2017. # $% &' 21-04-2017 ( ) SD/- SD/- (MAHAVIR SINGH) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 21-04-2017 [ .9../ R.K. R.K. R.K. R.K. , EX. SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ / DR, ITAT, MUMBAI I BENCH 6. (BC D / GUARD FILE. / BY ORDER, = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI