PREETI GOBIND JHANGIANI, MUMBAI V. ITO 11(1)(3), MUMBAI

ITA 5211/MUM/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8065 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 05-11-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 11-09-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P N DEVDASANDR PER R K
• Assessee Lawyers: R C JAIN
• Keywords: Depreciation; Wrong claim; Onus to prove
• Section: 37(1)

Judgement Text

1 ITA NO.5211/MUM/2009 IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI C MUMBAI C MUMBAI C MUMBAI C BENCH BENCH BENCH BENCH MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI R V EASWAR, PRESIDENT & R V EASWAR, PRESIDENT & R V EASWAR, PRESIDENT & R V EASWAR, PRESIDENT & SHRI R K PANDA, AM SHRI R K PANDA, AM SHRI R K PANDA, AM SHRI R K PANDA, AM ITA NO. ITA NO. ITA NO. ITA NO. 5211/MUM/2009 5211/MUM/2009 5211/MUM/2009 5211/MUM/2009 (ASST YEAR (ASST YEAR (ASST YEAR (ASST YEAR 2006 2006 2006 2006- -- -07 0707 07) )) ) PREETI GOBIND JHANGIANI 17 SEA MIST 14 PALI ROAD BANDRA (W) MUMBAI 50 VS THE INCOME TAX OFFICER WARD 11(1)(3), MUMBAI ( (( (APPELLANT APPELLANT APPELLANT APPELLANT) )) ) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) PAN NO. PAN NO. PAN NO. PAN NO.ACZPJ7129C ACZPJ7129C ACZPJ7129C ACZPJ7129C A SSESSEE BY SHRI R C JAIN REVENUE BY SHRI P N DEVDASAN/DR PER R K PANDA, AM PER R K PANDA, AM PER R K PANDA, AM PER R K PANDA, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 24.6.2009 OF THE CIT(A)-XI, MUMBAI RELATING TO ASSE SSMENT YEAR 2006-07. 2 THE FIRST ISSUE IN GROUNDS OF APPEAL NO.1 BY THE ASSESSEE RELATES TO THE ORDER OF THE CIT(A) IN CONFIRMING THE ADDITION OF R S. 35,75,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ADVANCES RECEIVED. 2.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SEE IS AN ACTRESS. IN HER INCOME AND EXPENDITURE ACCOUNT SHE HAD SHOWN GROSS RECEIPTS OF RS. 30,92,000/- FROM ADVERTISEMENT, MODELLING, MUSIC ALBUM AND ACTI NG. AFTER DEBITING VARIOUS EXPENSES OF RS. 26,26,060/- WHICH INCLUDES PAYMENT OF COMMISSION OF RS. 5,60,000/-, SHE DECLARED NET PROFIT OF RS. 4, 31,940/-. IN HER BALANCE SHEET AS ON 31.3.2006 SHE HAD SHOWN ADVANCE RECEIVED RS. 35, 75,000/-. 2 ITA NO.5211/MUM/2009 2.2 THE ASSESSING OFFICER NOTED FROM THE TAX AUDIT REPORT THAT THE ASSESSEE IS FOLLOWING CASH METHOD OF ACCOUNTING WHEREAS AS PER BALANCE SHEET SHE HAD SHOWN ADVANCE OF RS. 35,75,000/-. THEREFORE, THE AS SESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE SAME SHOULD NOT BE TREATED AS I NCOME IN VIEW OF CASH METHOD OF ACCOUNTING. IT WAS SUBMITTED BY THE ASSE SSEE THAT THE ADVANCES RECEIVED IS IN THE NATURE OF BOOKING FOR NEXT YEAR. HOWEVER, THE ASSESSING OFFICER WAS NOT CONVINCED WITH THE EXPLANATIONS GIV EN BY THE ASSESSEE ON THE GROUND THAT THE ASSESSEE IS FOLLOWING CASH SYSTEM O F ACCOUNTING. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND APPL YING PROVISIONS OF SEC. 37(1) OF THE I T ACT, THE ASSESSING OFFICER DISALLOWED T HE SAME AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 3 BEFORE THE CIT(A), THE ASSESSEE REITERATED THE SA ME SUBMISSIONS AS MADE BEFORE THE ASSESSING OFFICER. IT WAS SUBMITTED THA T THE AMOUNT IN QUESTION WAS THE ADVANCE RECEIVED AND A LIABILITY. THE ASSESSEE NEVER CLAIMED ANY DEDUCTION U/S 37(1) OF THE I T ACT. IT WAS SUBMITTED THAT TH E BURDEN OF PROOF WAS ON THE INCOME TAX DEPARTMENT THAT SUCH RECEIPTS WERE TAXAB LE. REFERRING TO A COUPLE OF DECISIONS, IT WAS SUBMITTED THAT THE VIEW OF THE ASSESSING OFFICER IS BASED ON CONJECTURE AND NOT ON EVIDENCE. THE PAYMENTS RECEIV ED WERE ADVANCES AND WAS A CONSEQUENCE OF THE RELATIONSHIP OF A DEBTOR AND C REDITOR. IT WAS ACCORDINGLY RIGHTLY TREATED AS LABIALITY IN THE BALANCE SHEET. 3.1 HOWEVER, THE CIT(A) WAS NOT CONVINCED WITH THE EXPLANATIONS GIVEN BY THE ASSESSEE. HE NOTED THAT THE UNDISPUTED AND ADMITTE D FACT IS THAT THE ASSESSEE FOLLOWS CASH SYSTEM OF ACCOUNTING. IN SUCH A SITUA TION, THE MONIES RECEIVED COULD NOT BE TREATED AS LIABILITY. THE EXPLANATION OF THE ASSESSEE THAT THE ADVANCE RECEIVED BY ANY PROFESSIONAL IS CAPITAL IN NATURE AT THE TIME OF RECEIPT IS 3 ITA NO.5211/MUM/2009 QUITE GENERAL IN NATURE AND DOES NOT SPECIFY AS TO HOW IN A CASE WHERE THE ASSESSEE ADMITTEDLY FOLLOWS CASH SYSTEM OF ACCOUNTI NG, THE MONIES RECEIVED WOULD BE TREATED AS CAPITAL IN NATURE AND NOT AS RE VENUE IN NATURE. DISTINGUISHING THE VARIOUS DECISIONS CITED BEFORE H IM, HE UPHELD THE ACTION OF THE ASSESSING OFFICER. 4 AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASSE SSEE IS IN APPEAL HERE BEFORE US. 5 THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THE PAST, THE ASSESSEE HAS BEEN ASSESSED AS PER HER SYSTEM OF ACCOUNTING. THEREFORE, NOTHING COULD HAVE BEEN ADDED. IN HIS ALTERNATIVE CONTENTION, HE SUBMITTED THAT ONLY THE ACTUAL AMOUNT RECEIVED DURING THE YEAR AMOUNTING TO RS. 16 ,01,049/- MAY AT BEST BE ADDED TO THE GROSS RECEIPT. 5.1 THE LD DR ON THE OTHER HAND SUPPORTED THE ORDER S OF THE ASSESSING OFFICER AND THE CIT(A). HE SUBMITTED THAT THE ASSESSEE IS F OLLOWING CASH SYSTEM OF ACCOUNTING FROM ACTING. THEREFORE, AS AND WHEN SHE RECEIVES MONIES, INCOME ACCRUES TO HER. SINCE THE ASSESSEE IS FOLLOWING CA SH SYSTEM OF ACCOUNTING, THE ASSESSEE HAS TO OFFER THE SAME TO TAX AS SOON AS TH E SAME IS RECEIVED. HE SUBMITTED THAT IN CASE THE ARGUMENT OF THE LD COUNS EL THAT THE AMOUNT RECEIVED DURING THE YEAR MAY BE ADDED IS ACCEPTED THEN SUITA BLE DIRECTION MAY BE GIVEN FOR REOPENING THE CASE OF THE YEAR IN WHICH SUCH MO NEY HAS BEEN RECEIVED. 6 WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BO TH THE PARTIES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. THERE IS NO DISPU TE TO THE FACT THAT THE ASSESSEE 4 ITA NO.5211/MUM/2009 IS AN ACTRESS AND DERIVES INCOME FROM ADVERTISEMENT , MODELLING, MUSIC ALBUM AND ACTING. THERE IS ALSO NO DISPUTE TO THE FACT THAT THE ASSESSEE FOLLOWS CASH SYSTEM OF ACCOUNTING. IN CASH SYSTEM OF ACCOUNTING ALL THE RECEIPTS DURING THE YEAR HAS TO BE TREATED AS INCOME OF THE YEAR AND AL L THE PAYMENTS FORAND EXPENSES ARE TO BE TREATED AS EXPENDITURE OF THE YE AR. THE SURPLUS OR DEFICIT SHALL BE TREATED AS INCOME OR LOSS OF THE YEAR. IN SUCH A SYSTEM, THERE IS NO QUESTION OF RECEIPT IN ADVANCE OR OUTSTANDING LIABI LITY. MERELY BECAUSE THE ASSESSEE WAS FOLLOWING SOME WRONG SYSTEM OF ACCOUNT ING, THE SAME, IN OUR OPINION, CANNOT BE LEGALISED; ESPECIALLY IN AN ASSE SSMENT FRAMED U/S 143(3); IT CANNOT PERPETUATE A WRONG METHOD OF ACCOUNTING. 6.1 IT IS THE ALTERNATIVE CONTENTION OF THE LD COUN SEL FOR THE ASSESSEE THAT THE ACTUAL ADVANCE OF RS. 16,01,049/- RECEIVED DURING T HE YEAR MAY BE ADDED TO THE GROSS RECEIPT. IN OUR OPINION, IF THAT IS DONE, TH EN THE AMOUNT WHICH HAS NOT BEEN OFFERED TO TAX IN THE PRECEDING YEAR HAS TO BE BROUGHT TO TAX IN THAT YEAR. WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO CONS IDER THE ADVANCE RECEIVED DURING THE YEAR AS PART OF THE INCOME. AT THE SAME TIME, HE IS DIRECTED TO TAKE CONSEQUENTIAL MEASURES BY REOPENING THE ASSESSMENT AND BRING TO TAX THE AMOUNT RECEIVED AS ADVANCE IN THE RESPECTIVE PRECED ING YEARS. WE HOLD AND DIRECT ACCORDINGLY. THE ISSUE IN THE GROUNDS OF APP EAL NO.1 IS ACCORDINGLY PARTLY ALLOWED. 7 THE SECOND ISSUE IN THE GROUNDS OF APPAL NO.2 RE LATES TO THE ORDER OF THE CIT(A) IN CONFIRMING THE DISALLOWANCE OF RS. 5,60,0 00/- MADE BY THE ASSESSING OFFICER U/S 40(A)(IA) OF THE ACT. 5 ITA NO.5211/MUM/2009 7.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSE SSEE IN HER INCOME & EXPENDITURE ACCOUNT HAS DEBITED COMMISSION PAYMENT OF RS. 5,60,000/-. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THE DETAILS OF TDS COMPLIANCE UNDER CHAPTER XVII B OF THE I T ACT AND SHOW CAUSE AS TO WHY DISALLOWANCE U/S 40(A)(IA) SHOULD NOT BE MADE IN RESPECT OF THE COMM ISSION PAID AT RS. 5,60,000/-. 7.2 IT WAS EXPLAINED BY THE ASSESSEE THAT SHE WAS U NDER THE IMPRESSION THAT INDIVIDUALS ARE NOT SUPPOSED TO DEDUCT THE TAX AT S OURCE. SO, INADVERTENTLY SHE DID NOT DEDUCT THE TAX AT SOURCE FROM THE COMMISSIO N PAID AT RS. 5,60,000/-. HOWEVER, THE ASSESSING OFFICER WAS NOT CONVINCED WI TH THE EXPLANATION OF THE ASSESSEE. APPLYING PROVISIONS OF SEC. 40(A)(IA) HE DISALLOWED THE COMMISSION PAYMENT OF RS. 5,60,000/-. 7.3 BEFORE THE CIT(A), IT WAS SUBMITTED THAT BEING IN FILM INDUSTRY, THE ASSESSEE HAD TO AVAIL OF HELP OF SOME PERSONS KNOW N AS LIAISON SERVICE PROVIDERS. THERE IS NO RELATIONSHIP OF PRINCIPAL A ND AGENT BETWEEN THE ASSESSEE AND SUCH LIAISON PERSONS. THEREFORE, ALTHOUGH IN CO MMERCIAL TERMS, IT IS LOOSELY REFERRED TO AS COMMISSION, STRICTLY, IT IS NOT CO MMISSION BUT AN OFFERING OF GRATUITOUS INCENTIVE FOR DEVELOPING AND CULTIVATING OUR BUSINESS RELATIONSHIP WHICH IS MUTUALLY GRATIFYING. THE PROVISIONS OF SEC . 194H AND THE BOARDS NOTIFICATION WAS ALSO BROUGHT TO THE NOTICE OF THE CIT(A). 7.4 HOWEVER, THE CIT(A) WAS NOT CONVINCED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND UPHELD THE ACTION OF THE ASSESSING OF FICER. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASSESSEE IS IN APPEAL HERE BEFORE US. 6 ITA NO.5211/MUM/2009 8 THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT OU T OF THE TOTAL COMMISSION OF RS. 5,60,000/-, THE ASSESSEE HAS PAID ONLY AN AM OUNT OF RS. 2,60,000/- AND THE BALANCE AMOUNT OF RS. 3 LACS WAS SHOWN AS COMMISSI ON OUTSTANDING WHICH IS AS PER BALANCE SHEET AS ON 31.3.2006 AND A COPY OF WHI CH IS PLACED AT PAGE 20 OF THE PAPER BOOK. HE SUBMITTED THAT THE PROVISIONS OF SEC. 194H ARE NOT APPLICABLE TO THE FACTS OF THE CASE OF THE ASSESSEE. HE SUBMI TTED THAT SINCE THE ASSESSEE IS FOLLOWING CASH SYSTEM OF ACCOUNTING, THE PAYABLE AM OUNT COULD NOT HAVE BEEN CLAIMED; THEREFORE, THE ADDITION MAY BE RESTRICTED TO RS. 3 LACS ONLY. HOWEVER, HE EXPRESSED HIS INABILITY TO GIVE THE FULL DETAILS REGARDING THE NATURE OF THE COMMISSION ETC., AT THE TIME HEARING. 8.1 THE LD DR ON THE OTHER HAND SUBMITTED THAT SINC E THE ASSESSEE HAS VIOLATED THE PROVISIONS OF SEC. 194H BY NOT DEDUCIN G THE TAX AT SOURCE, THE AMOUNT HAS TO BE DISALLOWED. 9 WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BO TH THE PARTIES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. THERE IS NO DISPU TE TO THE FACT THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF RS. 5,60,000/ AS COMMISSIO N AS PER INCOME & EXPENDITURE ACCOUNT FOR THE YEAR ENDING 31.3.2006. THERE IS ALSO NO DISPUTE TO THE FACT THAT AN AMOUNT OF RS.3 LACS HAS BEEN SHOWN AS COMMISSION OUTSTANDING IN THE BALANCE SHEET AS ON 31.3.2006. WE FIND THE ASSESSING OFFICER DISALLOWED THE ENTIRE COMMISSION OF RS. 5,60,000/- ON THE GRO UND THAT THE ASSESSEE HAS NOT DEDUCTED TAX AT SOURCE FROM SUCH COMMISSION WHICH H AS BEEN UPHELD BY THE CIT(A). IT HAS BEEN MENTIONED EARLIER IN THE PRECE DING PARAGRAPH 6 THAT IN CASH SYSTEM OF ACCOUNTING, ONLY THE AMOUNT RECEIVED DURI NG THE YEAR HAS TO BE TAKEN AS INCOME OF THE YEAR AND THE PAYMENTS RELATING TO EXPENDITURE MADE DURING THE YEAR ARE TO BE TREATED AS EXPENDITURE FOR THE YEAR. THEREFORE, ONLY THE AMOUNT, 7 ITA NO.5211/MUM/2009 WHICH HAS BEEN PAID DURING THE YEAR ON ACCOUNT OF C OMMISSION, HAS TO BE ALLOWED AS ALLOWABLE EXPENDITURE. SINCE THE ASSES SEE HAS CLAIMED COMMISSION OF RS. 5,60,000/- OUT OF WHICH AN AMOUNT OF RS. 3 L ACS IS SHOWN AS OUTSTANDING; THEREFORE, THE ASSESSEE FIRST OF ALL SHOULD NOT H AVE CLAIMED THE COMMISSION WHICH IS PAYABLE. THEREFORE, OUT OF RS. 5,60,000/- , RS.3 LACS IS DISALLOWED BEING WRONG CLAIM MADE BY THE ASSESSEE, WHO FOLLOWS CASH SYSTEM OF ACCOUNTING. 9.1 SO FAR AS THE REMAINING AMOUNT OF RS. 2,60,000/ - IS CONCERNED, IN OUR OPINION, THE PROVISIONS OF SEC. 194H ARE NOT APPLIC ABLE TO THE ASSESSEE SINCE HER GROSS RECEIPTS DURING THE YEAR IS RS. 30,92,000/-, WHICH IS BELOW THE PRESCRIBED LIMIT OF RS. 40 LACS FOR AN INDIVIDUAL FOR ATTRACTI NG THE PROVISIONS OF SEC. 194H. WE, THEREFORE, SUSTAIN THE DISALLOWANCE OF RS. 3 LA CS OUT OF THE COMMISSION DISALLOWED AT RS. 5,60,000/-. THE 2 ND ISSUE IN THE GROUNDS OF APPEAL IS ACCORDINGLY PARTLY ALLOWED. 10 THIRD ISSUE IN GROUNDS OF APPEAL RELATES TO THE ORDER OF THE CIT(A) IN CONFIRMING THE DISALLOWANCE OF RS. 1,05,376/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PERSONAL ELEMENT. 10.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSE SSING OFFICER FOR WANT OF FULL DETAILS AND CONSIDERING PROBABLE PERSONAL ELEMENT D ISALLOWED AN AMOUNT OF RS. 1,05,376/- ON ADHOC BASIS BEING 10% OF THE FOLL OWING EXPENSES: I) TELEPHONE & MOBILE EXPENSES RS. 2, 16,296/- II) ELECTRICITY & GAS EXPENSES RS. 50,958/- III) BOOKS & PERIODICALS RS. 45,615/- IV) CLOTHS & OTHER ACCESSORIES RS. 82,650/- V) TRAVELLING & CONVEYANCE RS. 2,12,360/- VI) CAR RENT RS. 85,50/- VII) FITNESS EXPENSES RS. 2,10,520/- VIII ENTERTAINMENT RS. 65,870/- IX) SUNDRY/MISC. EXPENSES RS. 84,000/- 8 ITA NO.5211/MUM/2009 10.2 IN APPEAL, IT WAS SUBMITTED THAT THE AUDITORS IN THE AUDIT REPORT DID NOT FIND ANYTHING OF PERSONAL NATURE; THEREFORE, NO DIS ALLOWANCE IS CALLED FOR. FURTHER, THE ASSESSEE HAD A WITHDRAWAL OF RS. 4,70,112/- AN D THE ASSESSEE IS AN UNMARRIED SINGLE PERSON STAYING WITH HER PARENTS. THEREFORE, NO DISALLOWANCE IS CALLED FOR. 10.3 HOWEVER, THE CIT(A) REJECTED THE EXPLANATION G IVEN BY THE ASSESSEE AND UPHELD THE ACTION OF THE ASSESSING OFFICER. WHILE D OING SO, HE NOTED THAT THE EXPENSES SUCH AS THOSE ON ELECTRICITY AND GAS, TRAV ELLING, FITNESS, CLOTHS AND ACCESSORIES, ETC DO HAVE VERY STRONG PERSONAL ELEM ENT BUILT IN. BESIDES, TELEPHONE & MOBILE, ENTERTAINMENT AND MISCELLANEOUS EXPENSES TOO MAY HAVE PERSONAL ELEMENT. SINCE THESE EXPENSES WERE NOT V ERIFIABLE TO THE EXTENT THEY WERE INCURRED IN CASH; THEREFORE, SOME DISALLOWANC E WAS CERTAINLY IN ORDER. SINCE THE ASSESSING OFFICER HAS DISALLOWED ONLY 10% OF SUCH EXPENSES, HE HELD THE SAME IS REASONABLE. 11 AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL HERE BEFORE THE TRIBUNAL. 11.1 THE LD COUNSEL FOR THE ASSESSEE REITERATED THE SAME SUBMISSIONS AS MADE BEFORE THE ASSESSING OFFICER AND THE CIT(A). THE L D DR SUBMITTED THAT THE ASSESSEE HAS PAID RENT TO HER FATHER FOR MOTOR CAR RENT AND HAS ALSO CLAIMED DEPRECIATION. THIS INDICATES THAT SHE IS HAVING TWO MOTOR CARS. FURTHER, MOST OF THE EXPENSES ARE MADE IN CASH AND ARE UNVERIFIABLE IN NATURE. THEREFORE, DISALLOWANCE MADE BY THE ASSESSING OFFICER AT 10% I S VERY REASONABLE AND THE SAME NEEDS TO BE SUSTAINED. 9 ITA NO.5211/MUM/2009 12 AFTER CONSIDERING THE RIVAL ARGUMENTS MADE BY BO TH THE PARTIES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). THE LD COUNSEL FOR THE ASSESSEE COULD NOT CONTROVERT THE SUBMISSIONS MADE BY THE LD DR TH AT THE ASSESSEE HAS CLAIMED DEPRECIATION ON MOTOR CAR AND SIMULTANEOUSLY HAS DE BITED THE CAR RENT AMOUNTING TO RS. 85,500/- WHICH HAS BEEN PAID TO H ER FATHER. THE ASSESSING OFFICER HAS GIVEN A FINDING THAT THE ASSESSEE HAS S UBSTANTIAL WITHDRAWAL OF CASH FROM HER BANK ACCOUNT WHICH CLEARLY INDICATES THAT MOST OF THE EXPENSES ARE MADE IN CASH. FURTHER, THE ASSESSEE HAS ALSO DEBITE D ELECTRICITY, GAS EXPENSES, CLOTHS AND OTHER ACCESSORIES, ENTERTAINMENT AND SUN DRY/MISCELLANEOUS EXPENSES. PERSONAL ELEMENT IN SUCH TYPE OF EXPENSES, IN OUR O PINION, CANNOT BE RULED OUT. THE DISALLOWANCE OF 10% MADE BY ASSESSING OFFICER A ND UPHELD BY THE CIT(A) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE BEING VERY REASONABLE THE SAME, IN OUR OPINION DOES NOT CALL ANY INTERFERENCE. WE, ACCORDINGLY UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE. THE ISSUE IN GROUNDS OF A PPEAL NO.3 IS ACCORDINGLY DISMISSED. 13 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THE 16 TH , DAY OF MAR 2011. SD/- SD/- ( (( ( R V EASWAR R V EASWAR R V EASWAR R V EASWAR ) )) ) PRESIDENT ( (( ( R K PA R K PA R K PA R K PANDA NDA NDA NDA ) )) ) ACCOUNTANT MEMBER PLACE: MUMBAI : DATED: 16 TH , MAR 2011 RAJ* 10 ITA NO.5211/MUM/2009 COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI