NATIONAL REFINERY P. LTD, MUMBAI V. DCIT CIR 5(2), MUMBAI

ITA 5277/MUM/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0425 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 09-11-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T A KHAN LD
• Assessee Lawyers: KEYURI DESA I LD
• Section: 143(3)

Judgement Text

ITA NO 5277/MUM/2015 NATIONAL REFINERY PRIVATE LIMITED ASSESSMENT YEAR 2011-12 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.5277/MUM/2015 ( / ASSESSMENT YEAR: 2011-12) NATIONAL REFINERY PRIVATE LIMITED GROUND FLOOR MILAN BUILDING 87, TARDEO ROAD OPP. AC MARKET MUMBAI 400 034 / VS. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 7(2) AAYKAR BHAVAN M.K.ROAD MUMBAI -400 020 ! ./ ./PAN/GIR NO. AAACN-2799-J ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : KEYURI DESAI, LD. AR REVENUE BY : T.A.KHAN, LD. DR / DATE OF HEARING : 09/08/2017 / DATE OF PRONOUNCEMENT : 11/08/2017 ITA NO 5277/MUM/2015 NATIONAL REFINERY PRIVATE LIMITED ASSESSMENT YEAR 2011-12 2 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2011-12 ASSAILS THE ORDER OF LD. COMMISSIONER OF IN COME TAX (APPEALS)-10 [CIT(A)], MUMBAI DATED 24/08/2015 QUA CONFIRMATION OF CERTAIN ADDITIONS, WHICH WE SHALL TAKE UP ON SUCCEE DING PARAGRAPHS. 2. BRIEFLY STATED, THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE ENGAGED AS MELTERS, REFINERS, ASSAYERS OF PRECIOUS METALS HAS BEEN ASSESSED FOR IMPUGNED AY U/S 143(3) ON 05/02/2014 A T RS.8,91,83,620/- AS AGAINST RETURNED INCOME OF RS.8,80,76,354/- E-FILED BY THE ASSESSEE ON 30/09/2011. THE ASSESSEE, INTER-ALIA, HAS SUFFERED ADDITION OF RS.9,86,924/- OUT OF LEGAL & PROFESSIONAL FEES, RS.1,00,000/- OUT OF MISCELLANEOUS EXPENSES AND RS.20,000/- OUT OF CONVEYANCE EXPENSES. ALL THESE ADDITIONS ARE THE SUBJECT MATTER OF THIS APPEAL. 3. DURING ASSESSMENT PROCEEDINGS, IT WAS NOTED THAT THE ASSESSEE PAID AN AMOUNT OF RS.9,86,924/- ON ACCOUNT OF PROFE SSIONAL / LEGAL EXPENSES INCURRED FOR ADVOCATE IN CONNECTION WITH C RIMINAL PROCEEDINGS AGAINST THE DIRECTOR AND SHAREHOLDERS OF THE COMPAN Y AND THEREFORE NOT ALLOWABLE, BEING PERSONAL IN NATURE. THE DISALLOWAN CE OF RS.1.00 LACS OUT OF MISCELLANEOUS EXPENSES AGGREGATING RS.13.61 LACS WAS MADE SINCE THE SAME WERE CLAIMED AGAINST SELF MADE VOUCH ERS. SIMILAR ADHOC DISALLOWANCE OF RS.0.20 LACS WAS MADE OUT OF RS.1.2 9 LACS CLAIMED AS CONVEYANCE EXPENSES. 4. AGGRIEVED, THE ASSESSEE CONTESTED ALL THE THREE ADDITIONS WITHOUT ANY SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER D ATED 24/08/2015 ITA NO 5277/MUM/2015 NATIONAL REFINERY PRIVATE LIMITED ASSESSMENT YEAR 2011-12 3 WHERE THE DISALLOWANCE OF PROFESSIONAL / LEGAL EXPE NSES WAS CONFIRMED BY FOLLOWING DECISION IN ASSESSEES OWN CASE FOR AY 2005-06, 2007-08 & 2008-09. THE OTHER ADDITIONS WERE CONFIRMED SINCE T HE VOUCHERS PRODUCED BY THE ASSESSEE REMAINED NON-VERIFIABLE. A GGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LD. REPRESENTATIVE FOR ASSESSEE [AR] DREW OU R ATTENTION TO THE FACT THAT SIMILAR ISSUE OF PROFESSIONAL / LEGAL FEE S CROPPED UP IN ASSESSEES OWN CASE FOR EARLIER YEARS BEFORE THIS T RIBUNAL VIDE ITA NOS.25/MUM/2010, 7507/MUM/2010, 6114/MUM/2011 & 483 4/MUM/2012 ORDER DATED 28/09/2016 WHERE THE ISSUE HAS WENT AGA INST THE ASSESSEE. REGARDING ADHOC DISALLOWANCE, IT WAS CONTENDED THAT THE ADDITION WA S ON THE HIGHER SIDE. PER CONTRA, LD. DR PLACED RELIANCE ON THE FINDINGS OF LOWER AUTHORITIES. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE CITED ORDER OF TRIBUNAL FOR EARLIER YEARS. AS RIGHTLY POINTED OUT, THE ISSUE OF DISALLOWANCE OF PROFESSIONAL / LEGAL EXPENSES STOOD AGAINST THE ASSESSEE BY THIS TRIBUNAL SINCE IT HAS BEEN OBSERVE D THAT THE EXPENSES WERE INCURRED FOR THE PURPOSE OF GAINING CONTROL OV ER THE COMPANY AND HENCE NOT ADMISSIBLE TO THE ASSESSEE. THEREFORE, FO LLOWING THE SAME, THIS GROUND OF ASSESSEES APPEAL STANDS DISMISSED. 7. REGARDING ADHOC DISALLOWANCE AGAINST MISCELLANEOUS EXPENSES AND CONVEYANCE EXPENSES, THE ADDITION OF RS.0.20 LA CS AGAINST CONVEYANCE EXPENSES IS FAIR AND REASONABLE AND HENC E REQUIRE NO INTERFERENCE ON OUR PART. HOWEVER, THE DISALLOWANCE OF RS.1.00 LACS OUT OF MISCELLANEOUS EXPENSES IS ON THE HIGHER SIDE AND THEREFORE, IN ORDER TO PUT THIS ISSUE AT REST, WE RESTRICT THE SAME TO RS.0.50 LACS. THE LD. ITA NO 5277/MUM/2015 NATIONAL REFINERY PRIVATE LIMITED ASSESSMENT YEAR 2011-12 4 AO IS DIRECTED TO RE-COMPUTE THE INCOME OF THE ASSE SSEE IN TERMS OF OUR ABOVE ORDER. 8. RESULTANTLY, THE ASSESSEES APPEAL STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH AUGUST, 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 11. 08.2017 SR.PS:- THIRUMALESH ! / 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 FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI