PRASHANT J ANDHARIA, MUMBAI V. DCIT 8(2), MUMBAI

ITA 5710/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88107 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 16-09-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R N DSOUZA
• Assessee Lawyers: SANJAY R PARIKH
• Section: 14A

Judgement Text

, , , , , ,, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI . . , ! '# , $ BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO.5710/MUM/2013 ASSESSMENT YEAR: 2010-11 SHRI PRASHANT J. ANDHARIA, GHASWALA BUILDING, 2 ND FLOOR, SIR M.V. ROAD, ANDHERI(EAST), MUMBAI - 400069 / VS. DCIT - 8(2), ROOM NO.216(A), AAYKAR BHAVAN, M.K.MARG, MUM BAI - 400020 ( '() /ASSESSEE) ( *# / REVENUE) P.A. NO.AACPA8400A '() + , + , + , + , / // / ASSESSEE BY): SHRI SANJAY R. PARIKH *# + , + , + , + , / REVENUE BY SHRI . R.N. DSOUZA - DR + )-! / / / / DATE OF HEARING : 27 /01/2015 ./0 + )-! / DATE OF PRONOUNCEMENT : 27 /01/2015 '1 '1 '1 '1 + )-! / DATE OF ORDER : 28 /01/2015 '1 '1 '1 '1 / / / / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) : THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 30/07/2013 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- A). DISALLWOANCE U/S 14A_ RS.1,65,830/- I. THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-17, MU MBAI ERRED ON FACT AND IN LAW IN UPHOLDING THE ORDER OF THE DEPUTY COM MISSIONER OF SHRI PRASHANT J. ANDHARIA 2 INCOME TAX-8(2), MUMBAI (ASSESSING OFFICER) WHEREBY THE ASSESSING OFFICER HAD MADE A DISALLOWANCE OF RS.1,65,830/- U/ S 14A. II. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED ON FACTS AND IN LAW IN HOLDING THAT THE APPELLANT HAD AGREED TO THE DIS ALLOWANCE U/S 14A READ WITH RULE 8D AS MADE BY THE ASSESSING OFFICER. III. THE APPELLANT PRAYS THAT THE DISALLOWANCE OF RS.1,6 5,830/- MADE BY THE ASSESSING OFFICER U/S 14A AND AS CONFIRMED BY T HE CIT(A) MAY BE DELETED. B. DISALLOWANCE OUT OF ADMINISTRATIVE AND SELLING E XPENSES RS.29,875/- IV THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ER RED ON FACTS AND IN UPHOLDING THE ORDER OF THE ASSESSING OFFICER MAKING A DISALLOWANCE OF RS.29,875/- OUT OF ADMINISTRATIVE AND SELLING EXPEN SES. V. THE APPELLANT PRAYS THAT THE DISALLOWANCE OF RS .29,875/- OUT OF ADMINISTRATIVE AND SELLING EXPENSES AS MADE BY THE ASSESSING OFFICER AND AS CONFIRMED BY THE CIT(A) MAY BE DELETED. 2. SO FAR AS, DISALLOWANCE OF RS.1,65,830/- U/S 14A OF THE ACT READ WITH RULE 8D OF THE RULES IS CONCERNED, WE FIN D THAT AS PER LETTER DATED 15/11/2012, OF THE ASSESSEE, ADDRESSED TO THE DCIT, THE ASSESSEE, DURING THE RELEVANT PERIOD EARNED RS. 89,981/- (DIVIDEND FROM SHARES), RS.2,92,557 (DIVIDEND FROM MUTUAL FUND) AND RS.6,12,061/- (PPF INTEREST). THIS INCOME WAS G ENERATED FROM THE SHARES, MUTUAL FUND AND PPF, WHICH WAS TRE ATED AS INVESTMENT IN THE BALANCE SHEET. THE EXPENSES DEBI TED TO THE PROFIT AND LOSS ACCOUNTS, RELATES TO THE BUSINESS, CARRIED OUT BY THE ASSESSEE AND THUS, THERE IS NO NEXUS OF THE EXP ENSES DEBITED TO THE PROFIT & LOSS ACCOUNT AND THE INCOME GENERAT ED OUT OF INVESTMENT. THE CLAIM OF THE ASSESSEE IS THAT UNSE CURED LOANS WERE UTILIZED FOR PAYMENT OF IMPORTS OF CHEMICAL FO R TRADE OR FOR PAYING IMPORT DUTIES OR FOR ESTABLISHING THE FIXED DEPOSIT WITH THE BANK WHICH WAS REQUIRED AS COLLATERAL SECURITY BY THE BANK SHRI PRASHANT J. ANDHARIA 3 FOR LETTER OF CREDIT FOR IMPORT OF CHEMICALS. IT WA S EMPATHETICALLY ASSERTED THAT NONE OF THE LOAN, TAKEN ON WHICH INTE REST WAS PAID, WAS UTILIZED FOR INVESTMENT PURPOSES. IN VIEW OF TH ESE FACTS, WE FIND MERIT IN THE EXPLANATION OF THE ASSESSEE, CONS EQUENTLY, THIS GROUND OF THE ASSESSEE IS ALLOWED. 2.1. SO FAR AS, DISALLOWANCE OF RS.29,875/- OUT OF ADMINISTRATIVE AND SELLING EXPENSES IS CONCERNED, S EPARATE BOOKS OF ACCOUNTS WERE MAINTAINED. THE STAND OF THE REVEN UE IS THAT SUCH EXPENSES WERE MADE ON KACHHA COPY/SELF MADE DO CUMENTS AND SUCH EXPENSES WERE PAID TO FAMILY MEMBERS OF TH E ASSESSEE. IN VIEW OF THIS FINDING, THE STAND OF THE LD. COMMI SSIONER OF INCOME TAX (APPEALS) IS AFFIRMED. THIS GROUND OF T HE ASSESSEE IS DISMISSED. FINALLY, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 28/01/2015. '1 + ./0 2'3 28/01/2015 / + 9 SD/ - (N.K.BILLAIYA) SD/ - (JOGINDER SINGH) ! '# ! '# ! '# ! '# / ACCOUNTANT MEMBER '# '# '# '# / JUDICIAL MEMBER MUMBAI; 2' DATED : 28/01/201 5 F{X~{T? P.S/. .. '1 + :) ;0) '1 + :) ;0) '1 + :) ;0) '1 + :) ;0)/ COPY OF THE ORDER FORWARDED TO : 1. <= / THE APPELLANT 2. :><= / THE RESPONDENT. 3. ? ( ) / THE CIT, MUMBAI. 4. ? / CIT(A)- , MUMBAI 5. A9 :) , , / DR, ITAT, MUMBAI SHRI PRASHANT J. ANDHARIA 4 6. 9B' C / GUARD FILE. '1 '1 '1 '1 / BY ORDER, >) :) //TRUE COPY// D DD D/ // /E * E * E * E * (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI