SHANKARLAL KANJI BHANUSHALI, MUMBAI V. ACIT CENT CIR. 38, MUMBAI

ITA 4995/MUM/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0542 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 02-08-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 04-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER ITA NOS.4995/MUM/2016 TO 5000/MUM/2016 (AYS. 2005-06 TO 2009-10 & A.Y.2011-12) SHANKARLAL KANJI BHANUSHALI, B-202, VISHWAMITRA BUILDING, 1, BAL RAJESHWAR ROAD, SAPARISHI PARK, MULUND (W), MUMBAI 400 020 PAN: AATPB 6516B ...... APPELLAN T VS. THE ACIT, CEN.CIR.38, AAYKAR BHAVAN,M.K.ROAD, MUMBAI 400 020. .... RESPOND ENT APPELLANT BY : NONE RESPONDENT BY : MS. N. HEMALATHA DATE OF HEARING : 02/08/2017 DATE OF PRONOUNCEMENT : 02/08/2017 ORDER THE CAPTIONED ARE SIX APPEALS BY THE ASSESSEE FO R ASSESSMENT YEARS 2005-06 TO 2009-10 AND ASSESSMENT YEAR 2011-12, WHE REIN SOME OF THE ISSUES INVOLVED ARE COMMON, THEREFORE, THEY HAVE BE EN CLUBBED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. ALL THE CAPTIONED APPEALS ARISE OUT OF DIFFERENT ORDERS OF CIT(A) -52, MUMBAI DATED 31/05/2016, WHICH IN TURN ARISE OUT OF ASSESSMENTS MADE BY THE ASSESSING OFFICER UNDER SECTION 143(3) R.W.S. 1 53C OF THE INCOME TAX 2 ITA NOS.4995/MUM/2016 TO 5000/MUM/2016 (AYS. 2005-06 TO 2009-10 & A.Y.2011-12) ACT,1961 ( IN SHORT THE ACT) FOR ASSESSMENT YEARS 2005-06 TO 2009-10 AND ASSESSMENT YEAR 2011-12 DATED 26/3/2013. 3. AT THE TIME OF HEARING, IT WAS NOTICED THAT THE APPEALS HAVE BEEN FIXED ON MORE THAN ONE OCCASION AND NONE APPEARED ON BEHA LF OF THE ASSESSEE EVEN AFTER THE NOTICE FOR HEARING HAS BEEN ISSUED B Y RPAD. THEREFORE, I PROCEED TO DISPOSE-OFF THE APPEAL EX-PARTE QUA THE APPELLANT ASSESSEE AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE ON MERI TS IN TERMS OF RULE -24 OF INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963. 4. THE FIRST COMMON ISSUE IN ALL THE APPEALS ARISES FROM THE ACTION OF THE LOWER AUTHORITIES IN DISALLOWING 10% OF TOTAL EXPEN SES INCURRED IN CASH. IN BRIEF, THE RELEVANT FACTS ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CLEARING AND FORWARDING AGENT WITH RESPECT TO EXPOR T AND IMPORT OF GOODS. THE ASSESSING OFFICER NOTED THAT ASSESSEE HAD INCUR RED CASH EXPENSES IN RESPECT OF SALARIES, TELEPHONE, PRINTING, CONVEYANC E, ETC. IN ALL THE ASSESSMENT YEARS AND THAT A LARGE PART OF SUCH EXPENSES WERE U NSUPPORTED BY BILLS AND VOUCHERS. THE ASSESSING OFFICER, THEREFORE, DISALL OWED 10% OF SUCH EXPENSES. THE CIT(A) HAS ALSO NOTICED THAT ASSESSEE WAS UNAB LE TO SUBMIT ANY SUPPORTING PROOF IN RESPECT OF CASH EXPENSES, WHICH WERE ENTIRELY BASED ON SELF MADE VOUCHERS, THUS, HE HAS SUSTAINED THE DISA LLOWANCE. 5. BEFORE ME, THE LD. DEPARTMENTAL REPRESENTATIVE P OINTED OUT THAT AT THE STAGE OF THE ASSESSING OFFICER AS WELL AS CIT(A ), ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE THE CASH EXPENSES AND, THEREFO RE, A PARTIAL DISALLOWANCE OF 10% OF THE CASH EXPENSES IS QUITE JUSTIFIED. 3 ITA NOS.4995/MUM/2016 TO 5000/MUM/2016 (AYS. 2005-06 TO 2009-10 & A.Y.2011-12) 6. I HAVE PERUSED THE ORDERS OF THE AUTHORITIES BEL OW AND FIND MERIT IN THE IMPUGNED DISALLOWANCE, INASMUCH AS, CERTAIN ELEMENT OF UNVERIFIABILITY IN THE SELF MADE CASH EXPENSE VOUCHERS CANNOT BE RULE D OUT. MOREOVER, THE CIT(A) NOTES THAT THE ASSESSEE WAS ALSO NOT ABLE TO ESTABLISH THE LINKAGE BETWEEN SUCH CASH EXPENSES AND THE NAME OF THE CLIE NTS FOR WHOM IT WAS SPENT. CONSIDERING THE FACTS AND CIRCUMSTANCES AS EMERGING FROM THE ORDERS OF THE AUTHORITIES BELOW AND IN THE ABSENCE OF ANY MATERIAL TO THE CONTRARY, I HEREBY AFFIRM THE DISALLOWANCE SUSTAINED BY THE CIT (A). THUS, ON THIS ASPECT ASSESSEE FAILS. 7. THE SECOND COMMON ISSUE IN ALL THE ASSESSMENT YE ARS IS WITH REGARD TO THE DISALLOWANCE OF INTEREST EXPENDITURE ON UNSECUR ED LOANS RAISED. THE ASSESSING OFFICER AS WELL AS THE CIT(A) HAVE DISALL OWED THE INTEREST EXPENDITURE ON LOANS ON THE GROUND THAT IT WAS PAID TO FRIENDS AND RELATIVES AND THAT THE ASSESSEE COULD NOT SUBSTANTIATE THAT T HE UNSECURED LOANS WERE ACTUALLY USED FOR THE PURPOSES OF BUSINESS. IN THE ABSENCE OF ANY MATERIAL TO THE CONTRARY, I HEREBY AFFIRM THE AFORESAID FINDING S. THUS, ON THIS ASPECT ALSO ASSESSEE FAILS. 8. THE THIRD ISSUE WHICH IS RELEVANT FOR ASSESSMENT YEARS 2006-07 TO 2009-19 AND 2001-12 ONLY IS ON ACCOUNT OF THE ADDIT ION MADE BY THE INCOME- TAX AUTHORITIES, ON THE BASIS OF ENTRIES APPEARING IN FORM NO.26AS IN RESPECT OF VARIOUS PARTIES WHO HAD DEDUCTED TAX AT SOURCE IN RESPECT OF PAYMENTS MADE TO THE ASSESSEE. THE ASSESSING OFFICER AS WEL L AS CIT(A) NOTED THAT CERTAIN ENTRIES APPEARING IN FORM NO.26AS DID NOT F ORM PART OF THE INCOME DECLARED BY THE ASSESSEE AND, THEREFORE, THE RESPEC TIVE DIFFERENCE IN THE AFORESAID ASSESSMENT YEARS HAS BEEN ADDED TO THE TO TAL INCOME OF THE 4 ITA NOS.4995/MUM/2016 TO 5000/MUM/2016 (AYS. 2005-06 TO 2009-10 & A.Y.2011-12) ASSESSEE. IN THE ABSENCE OF ANY MATERIAL CONTRAR Y TO THAT CONSIDERED BY THE LOWER AUTHORITIES, THE POSITION NOTED BY THE CIT(A) CONTINUES TO PREVAIL EVEN BEFORE ME AND, THEREFORE, THE STAND OF INCOME-TAX A UTHORITIES IS UPHELD AND ASSESSEE FAILS ON THIS ASPECT ALSO. 9. IN THE RESULT, CAPTIONED APPEALS OF THE ASSESSEE ARE DISMISSED, AS ABOVE. THE ABOVE DECISION WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF THE DEPARTMENTAL REPRESENTATIVE AT THE CONCLUSI ON OF THE HEARING ON 02/08/2017 SD/- (G.S. PANNU) ACCOCUNTANT MEMBER MUMBAI, DATED 03/08/2017 VM , SR. PS 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