ADDL CIT 17(2), MUMBAI V. NATRAJAN VENKATRAMAN, MUMBAI

ITA 5612/MUM/2012

• Counselvise Citation: 561219914 RSA 2012
• Duration Of Justice: 3 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 05-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR YOGESH KAMATH
• Assessee Lawyers: DR P DANIEL
• Keywords: Gift; Depreciation; Business expenditure; Assessment record; Onus to prove

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.5612/M/2012 ASSESSMENT YEAR: 2009-10 ACIT-17(2), R.NO.217, 2 ND FLOOR, PIRAMAL CHAMBERS, MUMBAI VS. SHRI NATRAJAN VENKATRAMAN, 1001/102, MOUNT EVEREST, A WING, WADALA LINK ROAD, BHAKTI PARK, WADALA (E), MUMBAI 400 037 PAN: ACUPV4686K (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : DR. P. DANIEL, A.R. REVENUE BY : DR. YOGESH KAMATH, D.R. DATE OF HEARING : 02.06.2015 DATE OF PRONOUNCEMENT : 09.09.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 07.06.2012 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2009-10. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CJT(A) HAS ERRED IN DISALLOWING THE ENTIRE ADDITION MADE BY THE AO ON A CCOUNT OF COMMISSION/BROKERAGE OF RS.10,75,373/- WITHOUT APPR ECIATING THE FACT THAT THE ASSESSEE NEITHER OFFERED THE SAME FOR TAXATION NOR PRODUCED ANY EVIDENCE TO SHOW THAT THE DEDUCTORS HAVE REVERSED THE ENTRIES W RONGLY MADE BY THEM IN THIS RESPECT IN THEIR ORIGINAL TDS RETURNS BY WAY OF ITS REVISION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ENTIRE DISALLOWANCES MADE BY THE AO OUT OF BUSINESS PROMOTION EXPENSES OF RS. 15,78,532/-, ELECTRICITY EXPENSES OF RS.1,24,221/- AND RENT PAYMENT OF RS. 1,04,750/- WITHOUT APPRECIA TING THE FACT THAT THE EXPENSES UNDER THESE HEADS WERE INCURRED BY THE ASS ESSEE IN CASH AND ALSO IN SPITE OF SUFFICIENT OPPORTUNITIES HAS FAILED TO PRO DUCE BILLS / VOUCHERS IN ITA NO.5612/M/2012 SHRI NATRAJAN VENKATRAMAN 2 SUPPORT OF THESE EXPENSES AND OTHER DETAILS LIKE NA MES AND ADDRESSES OF THE PERSONS TO WHOM THE PAYMENT FOR THESE EXPENSES WERE ALLEGED TO BE MADE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING 25% DISALLOWANCES MADE BY THE AO OUT OF BOOKS & PERIODICALS EXPENSES OF RS. 69,500/- AND PRINTING A ND STATIONERY OF R5.4,39,966/- TO 10% WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE INSPITE OF SUFFICIENT OPPORTUNITIES HAS FAILED TO ESTABLISH TH E CO-RELATION BETWEEN INCOME OFFERED AND EXPENDITURE CLAIMED UNDER THESE HEADS W ITH SUPPORTING DOCUMENTARY EVIDENCES. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING 25% DISALLOWANCES MADE BY THE AO OUT OF ENTERTAINMENT EXPENSES OF RS. 6,58,692/- AND MISCELLANEOUS EXPENS ES OF RS. 88,639/- TO 10% WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE INS PITE OF SUFFICIENT OPPORTUNITIES HAS FAILED TO ESTABLISH THE CO-RELATI ON BETWEEN INCOME OFFERED AND EXPENDITURE CLAIMED UNDER THESE HEADS WITH SUPP ORTING DOCUMENTARY EVIDENCES. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ENTIRE DISALLOWANCES MADE BY THE AO OUT OF SALARY EXPENSES OF RS.12,44,600/- WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE INSPITE OF SUFFICIENT OPPORTUNITIES HAS FAILED TO P RODUCE SALARY REGISTER AND CONFIRMATION FROM THE PERSONS TO WHOM THE SALARY HA S ALLEGED TO BE PAID WITH SUPPORTING DOCUMENTARY EVIDENCES. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE ENTIRE DISALLOWANCES MADE BY THE AO OUT OF MEETING EXPENSES OF RS.10,91,632/- TO 20% WITHOUT APPRECIAT ING THE FACT THAT THE ASSESSEE INSPITE OF SUFFICIENT OPPORTUNITIES HAS FA ILED TO PRODUCE BILLS / VOUCHERS AND OTHER DETAILS SHOWING THE VENUE AND PU RPOSES OF THE MEETING IN RESPECT OF WHICH SUCH EXPENSES HAVE BEEN CLAIMED. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY THE AO ON AC COUNT OF COMMISSION/ BROKERAGES OF RS.751636/- RECEIVED FROM M/S. ANIK D EVELOPERS WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE INSPITE OF SUFFICIENT OPPORTUNITY HAS FAILED TO FURNISH THE PROOF FOR PAYMENT OF HIS ADVA NCE OR ANY OTHER EVIDENCE TO SHOW THAT THE SAID RECEIPT IS TOWARDS REFUND OF PER SONAL ADVANCE GIVEN BY THE ASSESSEE TO THE SAID CONCERN FOR CARRYING OUT OF IN TERIOR DECORATION WORK IN HIS PERSONAL FLAT. 8. A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING 25% DISALLOWANCE MADE BY THE AO OUT OF DEPRECIATION EXPENSES OF RS.1,34,672/- WITHOUT APPRECIATING THE FACT THAT THE LD. CIT(A) HAS ALREADY RESTRICTED THE DISALLOWANCE MADE UNDER THIS HEAD TO 10% IN EARLIER PART ITA NO.5612/M/2012 SHRI NATRAJAN VENKATRAMAN 3 OF HIS ORDER. B) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING 25% DISALLOWANCES MADE BY THE AO OUT OF DRIVER'S SALARY OF RS. 1,28,000/- TO 10% WITHOUT APPRECIATIN G THE FACT THAT THE ASSESSEE INSPITE OF SUFFICIENT OPPORTUNITIES HAS FAILED TO P RODUCE SUPPORTING DOCUMENTARY EVIDENCES IN RESPECT OF THE SAME. 9. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING 25% DISALLOWANCES MADE BY THE AO OUT OF TRAVELLING EXPENSES AND CONVEYANCE EXPENSES OF RS. 14,78,880/- TO 10% OF RS. 3,69,720/- WITHOUT APPRECIATING THE FACT THAT THE EXPENSES CLA IMED UNDER THIS HEAD AMOUNTED TO RS. 14,78,880/- AND NOT RS.3,69,720/- A ND ALSO THE ASSESSEE IN SPITE OF SUFFICIENT OPPORTUNITIES HAS FAILED TO PRO DUCE PROPER DOCUMENTARY EVIDENCES TO SUBSTANTIATE THE EXPENSES CLAIMED UNDE R THIS HEAD. 10. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING 25% DISALLOWANCES MADE BY THE AO OUT OF GIFT EXPENSES OF RS.1,07,665/- TO 10% WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE EVEN FAILED TO PRODUCE BASIC INFORMATION LIKE ITS NATURE , KIND AND PROOF/ CONFIRMATION OF THE RECIPIENT IN RESPECT OF EXPENSE S CLAIMED UNDER THIS HEAD. 2. GROUND NO.1 : FACTS RELATING TO GROUND NO.1 ARE THAT THE ASSE SSEE HAS BEEN CARRYING ON BUSINESS OF COMMISSION AGENT A ND COMMISSION INCOME WAS SHOWN AT RS.1,64,06,455/- FROM TWINKLE E NVIROTECH LTD. AND RS.1,46,37,959/ FROM ROYAL TWINKLE STAR CLUB LTD. AS AGAINST THE GROSS COMMISSION RECEIPT OF RS.3,10,44,414/- NET PROFIT B EFORE TAX WAS DECLARED AT RS.2,28,56,539.68/-. FROM THE DETAILS GENERATED FROM ITS, IT WAS FOUND BY THE ASSESSING OFFICER (HEREINAFTER REFERRED TO A S THE AO) THAT THE ASSESSEE HAD RECEIVED BROKERAGE INCOME OF FROM TW INKLE ENVIROTECH LTD. RS.1,64,19,419/- AND RS.1,57,02,958/- FROM RO YAL TWINKLE STAR CLUB LTD. THUS, TOTAL DIFFERENCE BETWEEN THE BROKER AGE SHOWN BY THE ASSESSEE IN HER PROFIT AND LOSS ACCOUNT AND DETAILS GENERATED FROM THE SYSTEM WAS COMPUTED AT RS.10,77,963/-. 3. THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SAME AN D IT WAS SUBMITTED ITA NO.5612/M/2012 SHRI NATRAJAN VENKATRAMAN 4 THAT THERE WERE SOME DOUBLE ENTRIES AND THAT THE IN COME SHOWN BY THE ASSESSEE WAS CORRECT. THE ASSESSEE ALSO SUBMITTED C ONFORMATION LETTERS FROM BOTH COMPANIES IN RESPECT OF COMMISSION EARNED AND TDS DEDUCTED THEREON IN SUPPORT OF HIS CONTENTION. HOWEVER, THE AO DID NOT ACCEPT SUCH SUBMISSION OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAD FAILED TO PRODUCE DOCUMENTARY EVIDENCE THAT THE TWO COMPAN IES FROM WHOM THE ASSESSEE HAD RECEIVED COMMISSION HAD ALSO REVERSED THE ENTRIES WRONGLY MADE IN THE ORIGINAL TDS RETURN BY WAY OF FILING OF REVISED TDS RETURN. THEREFORE THE AO DISALLOWED THE DIFFERENCE OF RS. 1 0,75,373/-. 4. IN APPEAL BEFORE THE CIT(A), THE ASSESSEE REITER ATED HIS SUBMISSIONS. LEARNED CIT(A), AFTER GOING THROUGH T HE DETAILS SUBMITTED BY THE ASSESSEE, OBSERVED THAT THE AFOREMENTIONED A DDITIONS WERE MADE ON THE BASIS OF AIR INFORMATION BUT THE SAME WERE NOT SUSTAINABLE AS BOTH THE COMPANIES HAD UPLOADED ERRONEOUS ENTRIES INTO 2 6AS SYSTEM AND THEY HAD RECTIFIED/REVERSED THE SAID ENTRIES. CORRECT P AYMENT OF COMMISSION HAD BEEN UPLOADED INTO SYSTEM. THESE FIGURES TALLY WITH THE COMMISSION ACTUALLY RECEIVED BY THE ASSESSEE. THE CORRECT COMM ISSION RECEIVED FROM TWINKLE ENVIROTECH LTD. AMOUNTED TO RS.1,64,06,455/ /- AND FROM ROYAL TWINKLE STAR CLUB RS.1,46,37,959/ -. HENCE THERE WA S NO DISCREPANCY. THE CONFIRMATIONS IN THIS RESPECT WERE ALSO RECEIVE D FROM M/S.TWINKLE ENVIROTECH AND M/S ROYAL TWINKLE STAR CLUB AND THE FIGURES TALLIED WITH THE ASSESSEES CLAIM. FURTHER THE BANK ACCOUNT OF T HE ASSESSEE DID NOT REFLECT ANY ADDITIONAL COMMISSION RECEIPTS RELATING TO THESE OVERSTATED FIGURES. THE TDS CREDIT CLAIMED BY THE ASSESSEE WAS ALSO PROPORTIONATE TO THE AMOUNT RECEIVED AS COMMISSION. THE DEDUCTOR HAD ALSO FILED COPY OF 16A FROM WHICH TALLIED WITH THE FIGURES. ITA NO.5612/M/2012 SHRI NATRAJAN VENKATRAMAN 5 5. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. AFTER CAREFUL CONSIDERATION, WE FI ND THAT LD. CIT(A) DID NOT COMMIT ANY ERROR IN GRANTING APPROPRIATE RELIEF TO THE ASSESSEE. IT WAS THE CASE OF THE ASSESSEE THAT HE HAD EARNED TOTAL C OMMISSION OF RS.3,10,44,414/- FROM BOTH THE PARTIES AND CONFIRMA TIONS WERE ALSO SUBMITTED. THE ASSESSEE ALSO PRODUCED THE TDS CERT IFICATE IN WHICH CORRECT AMOUNT WAS SHOWN. IN VIEW OF THESE EVIDENCE S, WE ARE OF THE OPINION THAT THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). THE GROUND NO.1 OF THE APPEAL IS THEREFORE DISMISSED. 6. GROUND NO. 2, 3, 4, 6, 8, 9 &10 ARE IN RESPECT OF DISALLOWANCE OF EXPENDITURE IN RELATION TO BUSINESS PROMOTION, ELEC TRICITY, RENT PAYMENT, BOOKS AND PERIODICALS, PRINTING AND STATIONERY, ENT ERTAINMENT & MISC. EXPENSES, MEETING EXPENSES, VEHICLE EXPENSES, DEPRE CIATION, VEHICLE INSURANCE, DRIVERS SALARY, TRAVELLING EXPENSES AN D GIFT EXPENSES. THE AO OBSERVED THAT THE ASSESSEE, DURING THE ASSESSMENT Y EAR UNDER CONSIDERATION HAD DEBITED THE ABOVE STATED VARIOUS EXPENSES TO THE P & L ACCOUNT. THE AO CALLED FOR LEDGER ACCOUNT OF ELECT RICITY PAYMENT, RENT PAYMENT AND BUSINESS PROMOTION PAYMENT ALONG WITH B ILLS & VOUCHERS. ON VERIFICATION OF THE SAME, IT WAS OBSERVED BY THE AO THAT THE EXPENDITURE AMOUNT OF RS.18,07,503.40/- INCURRED TO WARDS ELECTRICITY PAYMENT, RENT PAYMENT AND BUSINESS PROMOTION PAYMEN T WAS IN CASH BUT THE DOCUMENTARY EVIDENCE FOR THE SAME HAD NOT BEEN PRODUCED. HE FURTHER OBSERVED THAT THE LD. A.R. OF THE ASSESSEE HAD SUBMITTED A LIST OF AS MANY AS 800 PERSONS IN RESPECT OF WHOM BUSINESS PROMOTION EXPENSES HAD BEEN INCURRED BUT NO ADDRESSES OF THE SAID PERS ONS WAS FURNISHED. HENCE, THE AO ADDED THE ENTIRE AMOUNT OF RS.18,07, 503.40/- BACK TO THE INCOME OF THE ASSESSEE. HE ALSO DISALLOWED THE ENTI RE EXPENDITURE OF ITA NO.5612/M/2012 SHRI NATRAJAN VENKATRAMAN 6 RS.1,78,761/- IN RESPECT OF TELEPHONE CHARGES. HE ALSO DISALLOWED 25% OF THE EXPENSES AMOUNTING TO RS.1,60,578/- OUT OF THE EXPENSES INCURRED IN RELATION TO VEHICLE EXPENSES, VEHICLE INSURANCE, DRIVERS SALARY AND DEPRECIATION OBSERVING THAT INVOLVEMENT OF PERSONAL ELEMENT IN THESE EXPENSES COULD NOT BE RULED OUT. THE AO ALSO DISALL OWED AN AMOUNT OF RS.3,14,204/- BEING 25% OF THE EXPENSES INCURRED ON BOOKS AND PERIODICALS, PRINTING AND STATIONERY, ENTERTAINMENT EXPENSES AND MISC. EXPENSES HE FURTHER DISALLOWED 25% AMOUNTING TO R S.3,69,720/- OUT OF THE EXPENSES INCURRED IN RESPECT OF TRAVELLING AND CONVEYANCE. HE DISALLOWED AN AMOUNT OF RS.1,07,665/- IN RESPECT OF GIFT EXPENSES AND AN AMOUNT OF RS.10,91,632/- IN RESPECT OF MEETING EXPE NSES. 7. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. THE AO HAD DISALLOWED THE ABOVE ST ATED EXPENDITURE AS THESE WERE PAID IN CASH AND THE ASSESSEE COULD NOT SUBMIT APPROPRIATE EVIDENCE TO PROVE INCURRENCE OF EXPENDITURE. THE AS SESSEE SUBMITTED BEFORE THE LD. CIT(A) THAT FOR EARNING COMMISSION I N RESPECT OF FUND MOBILIZING, COMMISSION AGENTS HAD BEEN ASSIGNED CER TAIN RESPONSIBILITIES FOR WHICH THE ASSESSEE HAD TO MAINTAIN OFFICE AT SE VERAL PLACES TO OFFER CUSTOMER SERVICE AND ALSO TO PAY SOME PORTION OF TH E COMMISSION BACK. IT WAS ALSO SUBMITTED THAT THE NET PROFIT DECLARED BY THE ASSESSEE ON THE ENTIRE RECEIPT WAS 78.92%, THEREFORE DISALLOWANCE M ADE BY THE AO WAS NOT RIGHT. FROM THE DETAILS, THE LD. CIT(A) OBSERVED THAT SO F AR AS THE EXPENSES INCURRED UNDER THE HEAD BUSINESS PROMOTION EXPENSE S WERE CONCERNED, THE AO HAD DISALLOWED THE EXPENSES IN THEIR ENTIRE TY. LEARNED CIT(A) OBSERVED THAT THE SAID AMOUNT COULD CONSIST OF INIT IAL MEMBERSHIP FEES PAID BACK OR DISCOUNT GIVEN TO NEARLY 600 PERSONS I N RESPECT OF WHOSE ITA NO.5612/M/2012 SHRI NATRAJAN VENKATRAMAN 7 MEMBERSHIP ASSESSEE HAD EARNED COMMISSION AND THESE AMOUNTS RANGE FROM 1600 TO 2100 AND CANNOT BE ADEQUATELY VOUCHED. THE LIST OF MEMBERS IN RESPECT OF WHOM COMMISSION PAID WAS ALRE ADY SUBMITTED TO THE AO. ON THESE FACTS LD. CIT(A) OBSERVED THAT THE ENTIRE EXPENSES COULD NOT BE DISALLOWED. THE ASSESSEE HAD DISCHARGE D HIS BURDEN OF PROOF BY SUBMITTING THE NAME OF THE PERSONS TO WHOM SUCH INCENTIVE/DISCOUNT/COMMISSION HAD BEEN PAID. AFTER CONSIDERING THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) DELETED THE DISALLOWANCE MADE ON ACCOUNT OF BUSINESS PROMOTION EXPENSES, RENT AND ELECTRICITY EXPENSES. HOWEVER, LEARNED CIT(A) UPHE LD THE DISALLOWANCE AT 20% OF THE EXPENSES INCURRED IN RESPECT OF TELEP HONE AND 10% OF EXPENSES INCURRED ON ACCOUNT OF VEHICLE, CAR DEPREC IATION AND PERIODICALS/PRINTING AND STATIONERY, TRAVELLING AND CONVEYANCE, ENTERTAINMENT & GIFT EXPENSES. HE ALSO UPHELD THE DISALLOWANCE TO T HE EXTENT OF 20% IN RESPECT OF MEETING EXPENSES. LEARN ED CIT(A) HAD ALSO TAKEN INTO CONSIDERATION THAT ACCORDING TO THE CBDT INSTRUCTION NO.225/26/2006-ITA-II(PT.) DATED 8.9.2010, WHEREIN GUIDELINES FOR COMPLETION OF SCRUTINY ASSESSMENT SELECTED ON THE B ASIS OF AIR INFORMATION LAID DOWN AND IF DISALLOWANCES ARE MAD E IN EXCESS OF RS.10 LAKHS, THEN THE AO HAS TO OBTAIN PRIOR PERMISSION/A PPROVAL OF THE JURISDICTIONAL CIT TO PROCEED WITH AREA OF INVESTIG ATION OTHER THAN AIR BASED SCRUTINY ASSESSMENT. HE OBSERVED THAT SUCH IN STRUCTIONS HAVE NOT BEEN FOLLOWED AND FROM THE ASSESSMENT RECORD HE NOT ED THAT THE AO DID NOT CONSIDER THE AFOREMENTIONED CBDT INSTRUCTIONS W HILE PROCEEDING TO MAKE OTHER DISALLOWABLE BUSINESS EXPENSES. IT IS IN THESE CIRCUMSTANCES, LD. CIT(A) HAS DELETED THE DISALLOWANCE MADE BY THE AO TO THE EXTENT MENTIONED ABOVE. ITA NO.5612/M/2012 SHRI NATRAJAN VENKATRAMAN 8 8. THE LD. AR OF THE ASSESSEE HAS BROUGHT OUR ATTE NTION TO THE ORDER DATED 25.3.2015 IN I.T.A. NO. 5613/MUM/2012 IN THE CASE OF THE WIFE OF THE ASSESSEE NAMELY MRS. VASANTHY NATRAJAN WHEREIN THE TRIBUNAL IN IDENTICAL FACTS AND CIRCUMSTANCES HAS UPHELD THE DE LETION OF SIMILAR TYPE ADDITIONS OBSERVING AS UNDER: 14. AFTER HEARING BOTH THE PARTIES, WE ARE OF THE OPINION THAT THE DISALLOWANCE DELETED BY LEARNED CIT(A) IS ON THE SU BMISSIONS AND EXPLANATION SUBMITTED BY THE ASSESSEE AND SOME OF THE DISALLOWA NCES HAVE BEEN UPHELD ON THE BASIS OF ESTIMATE. KEEPING IN VIEW OF THE ENTI RETY OF THE FACTS MENTIONED ABOVE AND ALSO FACT THAT THE ASSESSEE HAS SHOWN NET PROFIT @ 78.92%AND ALSO FACT THAT THE ASSESSING OFFICER DID NOT FOLLOW THE AFOREMENTIONED INSTRUCTION OF CBDT, WE ARE OF THE OPINION THAT NO INTERFERENCE IS REQUIRED IN THE ORDER OF LEARNED CIT(A) SO AS TO IT RELATES TO GROUND 2 TO 5 OF THE DEPARTMENTAL APPEAL. IT MAY BE MENTIONED HERE THAT THE DEPARTMENT DID NO T BRING ANY MATERIAL ON RECORD TO SUGGEST THAT FINDINGS RECORDED BY LEARN ED CIT(A), ARE CONTRARY TO THE FACTS NARRATED BY LEARNED CIT(A). 15. IN VIEW OF THE ABOVE DISCUSSION, WE DECLINE TO INTERFERE IN THE RELIEF GRANTED BY LEARNED CIT(A) IN RESPECT OF GROUND NO. 2 TO 5 AND THEY ARE DISMISSED. 9. SINCE THE FACTS IN THIS CASE ARE IDENTICAL, WE D O NOT FIND ANY REASON TO INTERFERE WITH THE WELL REASONED ORDER OF THE CI T(A) ON THE ABOVE ISSUES IN THE CASE OF THE ASSESSEE ALSO. THESE GROU NDS ARE ACCORDINGLY DISMISSED. 10. GROUND NO. 5 : THIS GROUND OF APPEAL IS IN RELATION TO THE ISS UE OF ALLOWABILITY OF SALARY EXPENSE OF RS.12,44,600/-. T HE AO HAD DISALLOWED THE ENTIRE EXPENSES UNDER THIS HEAD STATING THAT SA LARY REGISTER AND FORM NO.16A, ETC. WERE NOT SUBMITTED. 11. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT THE SALARY HAD BEEN PAID TO 13 EMPLOYEES FOR THE ENTIRE YEAR WITH A SAL ARY RANGE OF RS.60,000/- TO RS.1,20,000/- ANNUALLY. THERE WAS N O NEED TO DEDUCT TAX AS THE EMPLOYEES REMUNERATION WAS BELOW TAXABLE LI MIT. ITA NO.5612/M/2012 SHRI NATRAJAN VENKATRAMAN 9 THE LD. CIT(A) CONSIDERING THE FACTS AND CIRCUMSTAN CES OF THE CASE OBSERVED THAT AN AMOUNT OF RS.12,44,600/- WAS THE B ARE MINIMUM TO BE PAID FOR A GROUP OF 13 EMPLOYEES FOR RUNNING THE BU SINESS. HUGE INCOME UNDER THE HEAD COMMISSION HAD BEEN OFFERED TO TAX B Y THE ASSESSEE AND IT COULD NOT BE PRESUMED THAT THE ESTABLISHMENT COULD BE RUN WITHOUT EMPLOYEES. HE THEREFORE FINDING THE SALARY EXPENDIT URES AS GENUINE, ALLOWED THE SAME. AFTER CONSIDERING THE REASONING G IVEN BY THE LD. CIT(A), WE DO NOT FIND ANY INFIRMITY IN THE SAME. T HE FINDINGS OF THE LD. CIT(A) ON THIS ISSUE ARE THEREFORE UPHELD. 12. GROUND NO. 7 : THE AO FURTHER OBSERVED THAT THE ASSESSEE HAD RECEIVED COMMISSION/BROKERAGE OF RS.75,636/- FROM A NIK DEVELOPMENT CORPORATION AND HENCE ADDED THE SAME TO THE TOTAL I NCOME OF THE ASSESSEE. THE ASSESSEE EXPLAINED TO THE AO THAT ANIK DEVELOPM ENT CORPORATION HAD REFUNDED RS.75,636/- AS EXTRA LABOUR WORK IN FL AT PURCHASE. THE AO HOWEVER DID NOT FIND THIS EXPLANATION AS CONVINCING AND THEREFORE ADDED THE SAME INTO THE INCOME OF THE ASSESSEE. 13. IN APPEAL BEFORE THE CIT(A), THE ASSESSEE STATE D THAT THIS PARTICULAR SUM WAS ADVANCE FOR LABOUR CHARGES TO ANIK DEVELOPE RS FOR INTERIOR DECORATION IN THE PERSONAL FLAT. DUE TO CERTAIN REA SONS THE FUND WAS REFUNDED TO THE ASSESSEE AND TDS WAS DEDUCTED BY TH E ANIK DEVELOPERS BY MISTAKE. TDS CERTIFICATE WAS ALSO NOT ISSUED BY ANIK DEVELOPERS. AFTER CONSIDERING THE RELEVANT FACTS AND CIRCUMSTAN CES, THE LD. CIT(A) OBSERVED THAT THERE WAS NO INCOME TO THE EXTENT OF RS.75 636/-. IT WAS A PERSONAL ADVANCE FOR INTERIOR DECORATION WORK TO TH E BUILDER WHICH HAD BEEN REFUNDED BY THEM TO THE ASSESSEE. HE FURTHER O BSERVED THAT THE ASSESSEE WAS NOT A DEVELOPER OR IN THE DEVELOPMENT BUSINESS AND THERE WAS NO INCOME TO THE EXTENT OF RS.75,636-. HE THER EFORE DELETED HE ITA NO.5612/M/2012 SHRI NATRAJAN VENKATRAMAN 10 ADDITION. WE DO NOT FIND ANY INFIRMITY IN THE ABOVE GIVEN REASONING OF THE CIT(A). THIS GROUND IS ACCORDINGLY DECIDED IN FAVOU R OF THE ASSESSEE. 14. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.09.2015. SD/- SD/- (G.S. PANNU) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 09.09.2015. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.