BPM SECURITIES PVT.LTD., MUMBAI V. INCOME TAX OFFICER 2(1)(1), MUMBAI

ITA 5684/MUM/2009

• Counselvise Citation: 568419914 RSA 2009
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 26-07-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 23-10-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T T JACOB
• Assessee Lawyers: D H SHAH
• Keywords: Unexplained expenditure
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F MUMBAI BEFORE SHRI P.M. JAGTAP (AM) AND SMT. ASHA VIJAYARA GHAVAN (JM) ITA NO.5684/MUM/2009 ASSESSMENT YEAR-2005-06 M/S. BPM SECURITIES PVT. LTD., VEENA CHAMBERS, 21, DALAL STREET, MUMBAI-400 001 PAN-AAACB 3291M VS. THE ITO 2(1)(1), AAYAKAR BHAVAN, MUMBAI-400 020 (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI D.H. SHAH RESPONDENT BY: SHRI T.T. JACOB O R D E R PER ASHA VIJAYARAGHAVAN (JM) THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER DATED 10.8.2009 PASSED BY THE LD. CIT(A)-II FOR THE ASSESSMENT YEAR 2005-06. 2. THE ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE I.T. ACT DETERMINING THE TOTAL INCOME AT RS. 34,14,180/- A S AGAINST THE RETURNED INCOME OF RS. NIL. IN THE ASSESSMENT ORDER, THE AS SESSING OFFICER HAS NOTED THAT THE ASSESSEE COMPANY HAD PAID BROKERAGE CHARGES OF RS. 25 LAKHS. THE COMPANY HAS ALSO RECEIVED PROFESSIONAL FEE OF RS. 49 LAKHS FROM M/S. ENCORP E-SERVICES LTD. FORMERLY KNOWN AS M/S. APOLLO INTERNATIONAL. THE AO VERIFIED THE PAYMENT OF BROK ERAGE PAID TO BANHEM SECURITIES PVT. LTD. BY ISSUE OF LETTER U/S. 133(6) . ITA NO. 5684/M/09 2 A) INFORMATION U/S.133(6) WAS ALSO CALLED FROM ENCORP SERVICE LTD. IN RESPECT OF THE PROFESSIONAL SERVICES RENDERED BY THE ASSESSEE COMPANY TO THEM AND COPIES OF AGREEMENTS/ CORRESPON DENCE MADE WITH THEM. B) IN RESPONSE TO THE SAME M/S. ENCORP SERVICES LTD. V IDE LETTER DATED 29.3.2007 PRODUCED LETTER OF AUTHORITY / AGREEMENT WITH THE ASSESSEE COMPANY REGARDING THE PROFESSIONAL SERVICE S RENDERED. C) THEY WERE AGAIN VIDE LETTER DATED 17.04.2007 ASKED TO FURNISH DETAILS OF BANKING FACILITIES ARRANGED BY THE ASSES SEE COMPANY ALONGWITH COPY OF SANCTION LETTER, PROOF OF COMMISS ION PAID AND DISBURSEMENT OF FUND ETC. D) M/S. ENCORP SERVICE LTD. FORMERLY APOLLO INTERNATIO NAL LTD. HAS FORWARDED A COPY OF THE LETTER ADDRESSED BY BANK OF RAJASTHAN TO APOLLO INTERNATIONAL LTD. DATED 14.01.2004 INFORMIN G THEM OF THE APPROVAL FOR TERM LOAN IN THEIR FAVOUR. E) IN RESPONSE TO INFORMATION CALLED U/S.133(6) FROM B ANHEM SECURITIES PVT. LTD. THE COMPANY HAS SUBMITTED COPI ES OF FOLLOWING DOCUMENTS: I. LETTER DT. 08.07.03 ADDRESSED BY M/S. BANHEM SECURITIES TO MR. RASTOGI, MANAGER OF BANK OF RAJASTHAN. II. LETTER DT. 09.09. 03 OF BANK OF RAJASHTAN ADDRESSED TO M/S. APOLLO INTERNATIONAL. III. UNSIGNED/UNDATED COPY OF A LETTER OF M/S. APOLLO INTERNATIONAL LTD. ADDRESSED TO MANAGER BANK OF RAJASTHAN REQUESTING FOR CREDIT FACILITIES ON LOTTE RY BUSINESS. F) SUBSEQUENTLY A LETTER WAS ISSUED TO M/S. BANHEM SEC URITIES PVT. LTD. TO PRODUCE AN AUTHENTIC SIGNED COPY OF THE LET TER OF APOLLO INTERNATIONAL LTD. TO BANK OF RAJASTHAN AND A COPY OF AGREEMENT/ APPOINTMENT BETWEEN ASSESSEE COMPANY AND BANHEM SEC URITIES ITA NO. 5684/M/09 3 PVT. LTD. ASSIGNING THIS CONTRACT OF ARRANGING LOAN TO M/S. BANHEM SECURITIES PVT. LTD. G) IN RESPONSE TO THIS M/S. BANHEM SECURITIES PVT. LTD . HAS FORWARDED A COPY OF LETTER DT. 19.06.03 OF M/S. BPM SECURITIES ADDRESSED TO THE DIRECTOR MR. BANKIM MEHTA OF BANHE M SECURITIES STATING THE TERMS AND CONDITIONS OF ARRANGING CREDI T FACITLITY AND FEES PAYABLE AGAINST THE SAME. THEY FURTHER CONTEND ED THAT THE ORIGINAL SIGNED COPY OF LETTER OF APOLLO INTERNATIO NAL LTD TO BANK OF RAJASTHAN WAS FORWARDED TO THE BANK AND THEY DO NOT HAVE THE SIGNED COPY OF THE SAME. THEREFORE, THE SAME MAY BE VERIFIED FROM THE BANK DIRECTLY. H) IN THE ABOVE CIRCUMSTANCES OF THE CASE, A LETTER WA S ISSUED BY THE A.O. TO BANK OF RAJASTHAN U/S.133(6) CALLING FOR IN FORMATION ON : (I) DETAILS OF CREDIT FACILITY GRANTED & (II) ROLE OF B PM SECURITIES AND BANHEM SECURITIES PVT. LTD. IN THIS TRANSACTION. I) THE BANK OF RAJASTHAN VIDE LETTER NO. OVMBI/ADV/720 /07 DATED 27.08.2007 HAS SUBMITTED A LETTER WHEREIN THEY HAVE REMARKED AS FOLLOWS: 2. WE HAVE NO KNOWLEDGE OF THE ROLE OF M/S. BPM SE CURITIES AND M/S. BANHEM SECURITIES PVT. LTD. IN THIS TRANSACTIO N. J) SUBSEQUENTLY M/S. BPM SECURITIES WAS ISSUED A LETTE R AT 31.08.2007 INFORMING THEM ABOUT THE ABOVE REMARKS O F BANK OF RAJASTHAN AND CALLING FOR THEIR COMMENTS ON THE SAM E. THEY WERE ALSO GIVEN AN OPPORTUNITY TO INSPECT THE DOCUMENT O N 04.09.2007. FURTHER, THE ASSESSEE COMPANY WAS ASKED TO SHOW CAU SE AS TO WHY THE EXPENSES ON BROKERAGE OF RS.25 LACS IN LIEU OF THE TRANSACTION FOR ARRANGING LOAN TO ENCORP LTD. FROM BANK OF RAJA STHAN SHOULD NOT BE DISALLOWED. K) CONSEQUENT TO THE ABOVE LETTER, THE DIRECTOR OF THE ASSESSEE COMPANY MS. KHURSHID ATTENDED ON 04.09.07 AND TOOK INSPECTION OF THE ABOVE DOCUMENT VIZ. LETTER OF BANK OF RAJAST HAN. THE ITA NO. 5684/M/09 4 ASSESSEE COMPANY WAS ALSO GIVEN AN OPPORTUNITY VIDE ASSESSING OFFICERS LETTER DATED 31.08.2007 TO FILE THEIR SUB MISSION BY 20.09.2007. HOWEVER, NOBODY ATTENDED FOR THE HEARIN G DATE, NOR ANY DETAILS WERE FILED. L) THE ASSESSEE WAS ISSUED ONE MORE LETTER DATED 20.09 .2007 SERVED ON 21.09.2007 BY THE A.O. CONFIRMING THE INSPECTION TAKEN OF THE DOCUMENT BY MS. KHURSHID DIRECTOR OF THE COMPANY AN D SIMULTANEOUSLY GRANTING ONE MORE OPPORTUNITY TO SHO W CAUSE AS TO WHY THE EXPENSES ON BROKERAGE SHOULD NOT BE DISALLO WED AS UNEXPLAINED EXPENDITURE U/S.69C OF THE I.T. ACT. M) IN RESPONSE TO THIS LETTER THE APPELLANT REPLIED TH AT THE MATTER IS FOUR YEARS OLD AND AT THIS STAGE IT WOULD NOT BE PO SSIBLE FOR BANK OF RAJASTHAN TO MAKE ANY POSITIVE STATEMENT REGARDING THIS ROLE. IT WAS ALSO SUBMITTED THAT SHRI NARENDRA JAIN, CHIEF M ANAGER OF BANK OF RAJASTHAN HAS EXPIRED AND, THEREFORE, NO CO NCLUSIVE EVIDENCE COULD BE PRODUCED AT THIS STAGE. NEVERTHEL ESS THE APPELLANT SUBMITTED THAT THEY HAVE RECEIVED PAYMENT OF RS.50 LAKH FROM M/S. ENCORP LTD. WHICH IS A PROOF THAT SERVICE S WERE RENDERED BY THE APPELLANT AND IN TURN PAYMENT WAS MADE TO M/ S. BENHEM SECURITIES FOR SERVICES RENDERED. 3. THE AO DID NOT AGREE WITH THE ASSESSEE AND ADDED THE AMOUNT TO THE TOTAL INCOME OF THE ASSESSEE. 4. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE T HE LD. CIT(A) AND SUBMITTED THAT THE AO IS NOT JUSTIFIED IN DISALLOWI NG RS. 25 LAKHS AS BROKERAGE PAID BY THE ASSESSEE. IT WAS FURTHER SUB MITTED THAT THE ASSESSEE HAS RECEIVED RS. 50 LAKHS FROM M/S. ENCORP SERVICE LTD. IS EVIDENCE ENOUGH THAT THE COMPANY HAS RENDERED SERVI CES TO ENCORP LTD.. IN TURN THE COMPANY HAS PAID BROKERAGE TO M/S. BENH EM SECURIEIS WHICH SHOULD BE ALLOWED. HE FURTHER SUBMITTED AS F OLLOWS: ITA NO. 5684/M/09 5 (I) IT IS SUBMITTED THAT THE A.O. HAS RECEIVED SOM E INFORMATION FROM THE BANK DIRECTLY U/S.133*6). THE INFORMATION FURNISHED BY THE BANK WAS REVEALED TO APPELLANT THAT THE BANK DOES NOT KNOW T HE ROLE PLAYED BY BPM SECURITIES AND BANHEM SECURITIES. HOWEVER, IT I S A FACT THAT BANHEM SECURITIES P. LTD. HAS ADDRESSED A LETTER TO THE BANK OF RAJASTHAN ON 9 TH SEPTEMBER, 2003 WHICH INDICATES THAT THE APPELLANT THROUGH ITS SUB-MANDATE IS PURSUING THE MATTER FOR LOAN FACILITY. IT IS NOT DENIED THAT THE APOLLO INTERNATIONAL LTD. (NOW ENCO RP SERVICES LTD. AFTER DEMERGER) AVAILED THE SERVICES OF THE APPELLANT FOR ARRANGING THE LOAN OF RS.23 CRORES. THE INCONSISTENCY ABOUT THE DATE OF S ANCTION OF THE LOAN MENTIONED BY THE BANK AND DATE MENTIONED BY ENCORP SERVICES LTD. IS NOT RELEVANT AS FAR AS THE APPELLANT IS CONCERNED. THERE IS NO DENIAL OF THE FACT THAT THE LOAN WAS SANCTIONED BY THE BANK O F RAJASTHAN. THE FACILITIES WAS AVAILED BY APOLLO INTERNATIONAL LTD. (NOW ENCORP SERVICES) AND SERVICES WERE RENDERED BY THE APPELLANT THROUGH BANHEM SECURITIES P. LTD. THE CONSISTENCY OF THE DATES HER E AND THERE WOULD NOT HAVE ANY BEARING ON THE FACTS OF SERVICES RENDERED. IT IS POSSIBLE THAT WHILE FURNISHING THE INFORMATION BY THE BANK, THE B ANK MUST HAVE MADE A MISTAKE IN VERIFYING THEIR RECORD. THE APPELLANT HAS NEVER OCCASIONED TO CROSS VERIFY THE INFORMATION FURNISHED BY THE BA NK. IN FACT THE SANCTION LETTER HAS BEEN ISSUED BY THE BANK TO APOL LO INTERNATIONAL LTD. ON 14.01.2004 IS THE CORRECT DATE. COPY OF THE SANC TION LETTER IS ENCLOSED HEREWITH ALONGWITH OTHER TERMS AND CONDITI ONS AS ANNEXURE V. IN FACT THE APPELLANT HAS VIDE LETTER DATED 15.11.0 7 REQUESTED THE A.O. TO CROSS EXAMINE THE BANK OFFICER WITH REGARDS TO T HE SERVICES RENDERED BY THE APPELLANT/BANHEM AND ALSO CORRECTNESS OF THE DATE ABOUT THE SANCTION. THE A.O. DID NOT TAKE ANY ACTION ON THE R EQUEST. (II) AS REGARDS THE DATE OF MANDATE GIVEN TO THE AP PELLANT AND THE DATE ON WHICH THE SUB MANDATE WAS GIVEN TO BANHEM SECURI TIES LTD. THE INCONSISTENCY IS ONLY DUE TO THE AGREEMENT RECORDED IN THE MANDATE AT LATER STAGE. IN THE NORMAL BUSINESS PRACTICE ON THE BASIS OF ORAL UNDERSTANDING THE PROCEDURE OF PREPARING THE DATE F OR THE BANK LOAN MUST HAVE BEEN STARTED EARLIER ON THE BASIS OF SUCH ANTICIPATED WORK THE SUB-MANDATE WAS GIVEN IN THE MONTH OF JUNE 2003 . WHEREAS THE FINAL MANDATE HAVE BEEN PREPARED IN DECEMBER 2003. IT IS PERTINENT TO NOTE THAT THE LOAN WAS SANCTIONED ON 14.1.2004 WHIC H IS AFTER THE DATE OF MANDATE SIGNED IN DECEMBER 2003. ALSO CORRESPOND ENCE MADE BY BANHEM ON 8.7.2003 WITH RASTOGI, MANAGER, BANK OF R AJASTHAN AND ON 9.9.2003 WITH NARENDRA JAIN, CHIEF MANAGER, BANK OF RAJASTHAN ARE AFTER THE DATE OF SUB MANDATE GIVEN TO BANHEM. THES E TWO LETTERS ADDRESSED TO THE BANK HAVE NOT BEEN CONTROVERTED BY THE AO NOR THE A.O. HAS REQUESTED THE BANK TO THROW LIGHT ON THESE TWO LETTERS. ITA NO. 5684/M/09 6 THE INCOME RECEIVED FROM ENCORP HAVE BEEN RECORDED IN THE BOOKS OF THE APPELLANT AND THE SERVICES RENDERED BY BANHEM H AVE BEEN PROVED WITH THE DOCUMENTARY EVIDENCE. THE QUESTION OF DISA LLOWING OF SUB BROKERAGE DOES NOT ARISE AT ALL. IT IS THEREFORE, S UBMITTED THAT THE ADDITION MADE ON DISALLOWING THE FEES MAY BE DELETE D. 5. THE LD. CIT(A) HELD AS FOLLOWS: I HAVE DULY CONSIDERED THE SUBMISSION OF THE A.R. AND I FIND THAT THE A.O. HAS RIGHTLY POINTED OUT THE INCONSIST ENCY IN THE STATEMENT OF THE APPELLANT. IT IS SEEN FROM THE LET TER FILED BY THE ASSESSEE THAT THE FINAL ORDER WAS RECEIVED BY THE A SSESSEE IN DECEMBER, 2003 BUT THE MANDATE WAS GIVEN IN THE MON TH OF JUNE, 2003. THE DISCREPANCY HAS NOT BEEN CLARIFIED BY THE APPELLANT. BESIDES, BANK OF RAJASTHAN HAS DENIED ANY INVOLVEME NT OF THE APPELLANT IN ARRANGING FINANCE TO BANHEM SECURITIES . THE A.O. HAS POINTED OUT THAT THE DIRECTOR OF BANHEM SECURITIES AND BPM SECURITIES WAS SAME. HENCE, IT APPEARS THAT THE ASS ESSEE HAS INDULGED INTO A COLLUSIVE TRANSACTION. IT IS VERY S TRANGE THAT THE BANK OF RAJASTHAN HAS INFORMED THE A.O. THAT APOLLO INTE RNATIONAL LTD. (M/S. ENCORP LTD. EXISTING NAME OF APOLLO INTERNATI ONAL) WAS SANCTIONED TERM LOAN OF RS.2000 LAKH ON 23.3.2003 W HEREAS THE ASSESSEE IS CLAIMING THAT BANHEM SECURITIES WERE SU B-MANDATE DON 19.6.2003 AND BANHEM SECURITIES APPROACHED THE BANK OF RAJASTHAN ON 8.7.2003. THE A.R. COULD NOT CLARIFY A S TO HOW ENCORPS LETTER DATED 7.11.2007 REFERS TO THEIR MAN DATE DATED 10.12.2003. HENCE IT TRANSPIRES THAT NO SERVICES WE RE RENDERED BY THE APPELLANT TO ENCORP AND HENCE NO BROKERAGE IS P AYABLE TO BANHEM SECURITIES BY BPM SECURITIES. BANK OF RAJASTHAN ITSELF HAD CLARIFIED THAT THEY AR E NOT AWARE OF ANY ROLE PLAYED BY THE APPELLANT OR THE BANHEM S ECURITIES. THE STATEMENT OF THE A.R. THAT THE BANK OFFICIALS MIGHT HAVE INTIMATED THE WRONG DATE CANNOT BE ACCEPTED. IT IS FOR THE AP PELLANT TO PROVIDE EVIDENCE IN SUPPORT OF HIS ARGUMENT THAT THEY HAVE RENDERED SERVICES FOR WHICH BROKERAGE WAS RECEIVED AND IN TU RN THE BROKERAGE WAS PAID TO BANHEM SECURITIES. I DO NOT FIND ANY EV IDENCE ON RECORD TO SHOW THAT THE APPELLANT HAS RENDERED ANY SERVICE S IN ARRANGING FINANCE FOR M/S. APOLLO INTERNATIONAL LTD., NOW M/S . ENCORP LTD. I FIND FORCE IN THE ARGUMENT OF THE A.O. THAT PAYMENT OF BROKERAGE BY BPM SECURITIES TO BANHEM SECURITIES IS A COLLUSIVE TRANSACTION AS THE DIRECTOR, NAMELY MR. BANKIM MEHTA, IS A COMMON DIRE CTOR FOR BOTH THE CONCERNS. I DO NOT AGREE WITH THE SUBMISSIONS O F THE A.R. THAT BEFORE RECEIVING MANDATE IN WRITING THE DISCUSSIONS WERE ON PRIOR ITA NO. 5684/M/09 7 THE MANDATE RECEIVED BY THE ASSESSEE IN WRITING. TH ERE IS NO EVIDENCE ON RECORD TO SUBSTANTIATE THE ARGUMENT OF THE A.R. HENCE, THE DISALLOWANCE MADE BY THE A.O. IS CONFIRMED AND APPEAL ON THIS GROUND IS DISMISSED. 6. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON T HE ORDER OF THE LOWER AUTHORITIES. THE LD. COUNSEL FOR THE ASSESSE E REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A). 7. WE ARE IN AGREEMENT WITH THE VIEW TAKEN BY THE L D. CIT(A) FOR THE FOLLOWING REASONS: 1) THE BANK OF RAJASTHAN HAS IN RESPONSE TO NOTICE U/ S. 133(6) SUBMITTED AS FOLLOWS: THAT M/S. APOLLO INTERNATIONAL LTD. WAS SANCTIONED A TERM LOAN OF RS.2000.00 LACS ON 23.03.2003. THE NAME OF THE COMPANY WAS SUBSEQUENTLY CHANGED TO M/S. ENCORP LTD . (EXISTING NAME). THE SAME IS FULLY REPAID ON 23.08. 2007. . WE HAVE NO KNOWLEDGE OF THE ROLE OF M/S. BPM SECU RITIES AND M/S. BANHEM SECURITIES PVT. LTD. IN THIS TRANSACTIO N. 2) THE CORRESPONDENCE BETWEEN THE ASSESSEE-COMPANY AND M/S. BENHEM SECURITIES FOR SUB MANDATE DT. 19.6.2003 AND LETTER OF M/S. BENHAM SECURITIES TO BANK DT. 8.7.2003 ARE MUC H AFTER THE LOAN SANCTIONED AS PER LETTER OF BANK OF RAJAST HAN. FURTHER THE INFORMATION GIVEN BY ENCORP VIDE LETTER DT. 7.1 1.2007 REFERS TO MANDATE DT. 10.12.2003. ITA NO. 5684/M/09 8 3) THE BANK STATES THAT LOAN WAS SANCTIONED IN MARCH, 2003 WHEREAS M/S. ENCORP SERVICES LTD. MENTIONS THE SANC TION DATE AS DECEMBER, 2004. 4) THE BANK HAS DENIED ANY ROLE PLAYED BY BPM SECURITI ES AND M/S. BENHEM SECURITIES IN THIS TRANSACTION. 5) IT CANNOT BE DENIED THAT THE BANK CAN DEFINITELY ID ENTIFY THE PERSON/INSTITUTION WHO NEGOTIATED WITH THEM FOR TH E LOAN ON THE BASIS OF THE CORRESPONDENCE MADE, THOUGH THE MA TTER WAS FOUR YEARS OLD. IT IS A FACT THAT ON THE BASIS OF THE SAME THEY HAVE CONFIRMED THE CREDIT FACILITY GRANTED TO APOLL O INTERNATIONAL LTD. AND THE ROLE OF BPM SECURITIES AND BANHEM SEC URITIES IN THESE TRANSACTIONS. 6. THE ASSESSEE COMPANY HAS NOT DEDUCTED TDS ON THE BROKERAGE PAID 7. THE EXPENDITURE ON BROKERAGE PAID TO BANHEM HAS TO BE GENUINE, IT CANNOT BE THE CASE THAT THE SUB-MANDATE BY THE3 ASSESSEE COMPANY TO BENHAM FOR PAYING BROKERAGE IS GIVEN MUCH BEFORE THE MANDATE RECEIVED FROM APOLLO INTERN ATIONAL AND THAT THE MANDATE OF ENCORP (FORMERLY APOLLO)AND THE SUB- MANDATE OF BPM TO BENHAM WAS GIVEN MUCH AFTER THE L OAN WAS SANCTIONED AS PER BANK OF RAJASTHANS LETTER. 8. THE SEQUENCE OF EVENTS AND DATES FAIL TO SUBSTANTIA TE THAT THE ASSESSEE COMPANY HAD INCURRED EXPENSES ON BROKERAGE OF RS. 25 LAKHS TO BENHEM SECURITIES PVT. LTD FOR OUTSOURC ING THE BUSINESS OF ARRANGING THE BANKING FACILITIES FOR AP OLLO INTERNATIONAL LTD. ITA NO. 5684/M/09 9 9. THE COMMON DIRECTOR VIZ., BANKIM MEHTA SUGGEST THA T IT IS A TAX PLANNING EFFORT IN ORDER TO AVOID PAYMENT OF TA XES BY THE ASSESSEE COMPANY AND TO DIVERT THE PROFITS TO ANOTH ER COMPANY. 8. IN SHORT, THE ENTIRE EFFORT MADE BY THE ASSESSEE FOR ARRANGEMENT OF LOAN AND SERVICES WHICH WERE RENDERED BY THE ASSESS EE TO M/S. ENCORP LTD. IS NOT SUPPORTED BY ANY CORROBORATIVE EVIDENCE AS BANK OF RAJASTHAN ITSELF DENIES THE ROLE PLAYED BY THE ASSESSEE OR M/ S. BENHAM SECURITIES. FURTHER M/S. APOLLO INTERNATIONAL LTD. I.E. M/S. EN CORP LTD. WAS SANCTIONED TERM LOAN ON 23.3.2003 WHEREAS THE ASSES SEE IS CLAIMING THAT M/S. BENHAM SECURITIES WERE SUB-MANDATED ON 19.6.20 03 AND APPROACHED THE BANK OF RAJASTHAN ON 8.7.2003 I.E. O N SUBSEQUENT DATES. FURTHER THE INFORMATION GIVEN BY MS/. ENCORP LTD. D T. 7.11.2007 REFERS TO THEIR MANDATE DT. 10.12.2003. HENCE THERE IS SUR ELY SOME INCONSISTENCY WITH RESPECT TO THE DATES WHICH REMAI NS UNEXPLAINED. HENCE, WE CONFIRM THE ORDER OF THE LD. CIT(A) AND W E ARE OF THE VIEW THAT NO SERVICES WERE RENDERED TO THE ASSESSEE BY M/S. B ENHAM SECURITIES PVT. LTD. HENCE THE EXPENDITURE ON BROKERAGE IS DIS ALLOWED U/S. 37(1). 9. THE SECOND GROUND OF APPEAL IS WITH RESPECT TO D ISALLOWANCE OF THE EXPENSES AMOUNTING TO RS. 56,805/-. 10. THE LD. COUNSEL FOR THE ASSESSEE SHRI D.H. SHAH SUBMITTED BEFORE US CERTAIN VOUCHERS CONSISTING OF PURCHASE OF GROCE RY, PROVISION AND OTHER EXPENSES. HE CLAIMED THAT THESE EXPENSES ARE INCURRED FOR OFFICE PURPOSES I.E. TOWARDS STAFF WELFARE AS WELL AS ENTE RTAINMENT. THE COUNSEL SUBMITTED THAT THE ASSESSEE HAS TO NECESSAR ILY SPEND CERTAIN EXPENSES ON SNACKS, TEA, COFFEE ETC. FURTHER THE A SSESSEE HAS PRODUCED COPIES OF BILLS IN THE PAPER BOOK. ON PERUSAL OF T HE SAME WE FIND THAT THERE ARE VARIOUS EXPENSES SUCH AS PLUMBING, LEGAL EXPENSES AND ALSO PURCHASE OF 5 KG OF HONEY WHICH ARE SO VARIED AND N EEDS SOME ITA NO. 5684/M/09 10 EXPLANATION. IN THESE CIRCUMSTANCES, WE SET ASIDE THE ISSUE TO THE FILE OF THE AO. THE ASSESSEE SHALL SUBMIT THE BILLS/VOUCHE RS PRODUCED BEFORE US IN SUPPORT OF ITS CLAIM BEFORE THE AO. THE AO S HALL DECIDE THE SAME IN ACCORDANCE WITH LAW. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 30 TH DAY OF JUNE, 2011 SD/- SD/- (P.M. JAGTAP) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDIC IAL MEMBER MUMBAI, DATED 30 TH JUNE, 2011 RJ COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR F BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, I.T.A.T, MUMBAI ITA NO. 5684/M/09 11 DATE INITIALS 1 DRAFT DICTATED ON: 22 . 0 6 . 201 1 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 23 .0 6 .2011 ______ SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: _________ ______ JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: _________ ______ JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: _________ ______ SR. PS/PS 6. KEPT FOR PRONOUNCEMENT ON: _________ ______ SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: _________ ______ SR. PS/PS 8. 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK: DATE ON WHICH FILE GOES TO AR _________ ______ 10 . DATE OF DISPATCH OF ORDER: _________ ______