PRAVIN TRUST, MUMBAI V. ITO 14(1)(1), MUMBAI

ITA 5773/MUM/2012

• Counselvise Citation: 577319914 RSA 2012
• Duration Of Justice: 2 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 18-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 17-09-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PREMANAND J
• Keywords: Business expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C, MUMBAI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.5773/M/2012 ASSESSMENT YEAR: 2009-10 M/S. PRAVIN TRUST, 1 ST FLOOR, 333, SHAIKH MEMON STREET, CORNER OF MIRCHI GALLY, GREEN MARKET, MUMBAI 400 002 PAN: AAATP 0521H VS. ITO 14(1)(1), R.NO.204, 2 ND FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI - 400021 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI APURVA SHAH, A.R. REVENUE BY : SHRI PREMANAND J., D.R. DATE OF HEARING : 18.12.2014 DATE OF PRONOUNCEMENT : 04.03.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 25.06.2012 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [(HEREINAFTER REFERRED TO AS CIT(A)] RELEVANT TO ASSESSMENT YEAR 2009-10. 2. THE SOLE GROUND TAKEN BY THE ASSESSEE IS RELATIN G TO THE CONFIRMATION OF DISALLOWANCE OF BUSINESS EXPENSES OF RS.3,02,333/-. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (HEREINAFTER REF ERRED TO AS THE AO) OBSERVED THAT THE ASSESSEE HAD CLAIMED DIFFERENT BUSINESS EX PENSES AMOUNTING TO RS.3,02,333/- INSPITE OF THE FACT THAT THERE WAS NO BUSINESS ACTIVITY DURING THE YEAR. BEING NOT SATISFIED WITH THE EXPLANATION GIV EN BY THE ASSESSEE IN RESPECT OF THE MATTER, HE DISALLOWED THE EXPENSES. ITA NO.5773/M/2012 M/S. PRAVIN TRUST 2 3. IN APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE SU BMITTED THAT THERE WAS A TEMPORARY LULL AND BUSINESS HAD BECOME TEMPORARY DO RMANT. HOWEVER, THE STOCK WAS NOT WRITTEN OFF. DUE TO THE POOR FINANCI AL CONDITION OF THE ASSESSEE, NO SALE OR PURCHASE TRANSACTION WAS CARRIED OUT DUR ING THE YEAR. THE LD. CIT(A), HOWEVER, OBSERVED THAT THE ASSESSEE HAD CAR RIED OUT ITS BUSINESS ACTIVITY UP TO THE FINANCIAL YEAR 2003-04 ONLY. TH E ASSESSEE HAD SHOWN OPENING STOCK CONSISTING OF GROUNDNUTS, CHILLY, CUM IN SEEDS, CORIANDER SEEDS ETC. WHICH WERE CARRIED FORWARD AS CLOSING STOCK. THE BUSINESS WAS NOT CONTINUED AFTER A.Y. 2004-05. HENCE, IT COULD NOT BE SAID THAT THERE WAS A TEMPORARY LULL. THE CLAIM OF THE EXPENSES WAS NOT JUSTIFIED WITHOUT CARRYING OUT ANY SINGLE TRANSACTION OF TRADING. HE THEREFOR E CONFIRMED THE DISALLOWANCE. 4. WE FIND THAT THE STOCK IN TRADE HAS BEEN SHOWN O F GROUNDNUTS, CHILLY, CUMIN SEEDS, CORIANDER SEEDS ETC. WHICH COMMODITIES ARE PERISHABLE IN NATURE. THE ASSESSEE HAD CARRIED OUT ITS LAST BUSINESS ACTI VITY IN THE YEAR 2004. THE STOCK, WHICH HAS A VERY SMALL SHELF LIFE, CANNOT BE PRESUMED TO HAVE EXISTED UP TO THE YEAR UNDER CONSIDERATION. EVEN THE ASSESSEE HAS NOT GIVEN ANY EVIDENCE TO SHOW THAT THE BUSINESS HAS BEEN RECOMMENCED EVEN TILL DATE. UNDER SUCH CIRCUMSTANCES, THE CLAIM OF EXPENDITURE IN RELATION TO BUSINESS ACTIVITY OF THE ASSESSEE CANNOT BE HELD TO BE JUSTIFIED. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND THE SAME IS HEREBY UPHE LD. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS THE REFORE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04.03.2015. SD/- SD/- (R.C. SHARMA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 04.03.2015. * KISHORE, SR. P.S. COPY TO: THE APPELLANT ITA NO.5773/M/2012 M/S. PRAVIN TRUST 3 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.