MILIND R. HEBLI, THANE V. ITO WD 1(2), THANE

ITA 5847/MUM/2013

• Counselvise Citation: 584719914 RSA 2013
• Duration Of Justice: 1 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 02-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 30-09-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN
• Assessee Lawyers: BHUPESH N EGANDHI
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A , BENCH MUMBAI , BEFORE SHRI R.C.SHARMA , A M & SHRI SANJAY GARG , J M ITA N O. 58 47 / MUM/20 1 3 ( ASSESSMENT YEAR : 20 09 - 2010 ) MILIND R. HEBLI, 1004, GARDEN ENCLAVE, BLDG. NO. 7, VASANT VIHAR, POST OFFICE, APNA BAZAAR, THANE (WEST) - 400 610 VS. ITO WARD - 1(2), THANE PAN/GIR NO. : A A CPH 5580 L ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : SHRI BHUPESH N EGANDHI /REVENUE BY : SHRI ASGHAR ZAIN DATE OF HEARING : 2 ND DECEMBER , 201 4 DATE OF PRONOU NCEMENT 2 ND DECEMBER , 201 4 O R D E R PER R.C.SHARMA (A.M) : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 19 - 8 - 2013 FOR THE ASSESSMENT YEAR 20 09 - 2010 , IN THE MATTER OF ORDER PASSED U/S. 143(3) OF THE ACT. 2. RIVA L CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. THE ASSESSEE IS ENGAGED IN MANUFACTURING OF ENGINEERING GOODS AND DEALERS OF INDIAN OIL CORPORATION. DURING THE COURSE OF SCRUTINY ASSESSMENT THE AO DISALLOWED THE EXPENDITURE ON ENTERTAINMENT, SUNDRY EXPE NSES AND OFFICE EXPENSES. WE FOUND THAT DISALLOWANCE OF 10% ON EXPENDITURE SO CLAIMED WAS MADE BY AO ON THE P L EA THAT THESE EXPENSES WERE UNVERIFIABLE IN NATURE AND ALSO THERE WAS PERSONAL ELEMENT. KEEPING IN ITA NO. 5847 / 1 3 2 VIEW THE DOCUMENTARY EVIDENCE PRODUCED BEFORE L OWER AUTHORITIES, WE RESTRICT THE DISALLOWANCE TO THE EXTENT OF 5% INSTEAD OF 10% MADE BY THE AO ON ADHOC BASIS. 3. THE NEXT GRIEVANCE OF THE ASSESSEE RELATES TO DISALLOWANCE OF INTEREST . THE AO HAD DISALLOWED THE INTEREST OF RS. 2,57,953/ - AND RS. 1,97,663 / - ON THE PLEA THAT ASSESSEE HAS UTILIZED BORROWED FUNDS FOR PURPOSE OTHER THAN BUSINESS. FROM THE RECORD WE FOUND THAT FOLLOWING ADVANCE GIVEN BY THE ASSESSEE WAS RELATING TO THE BUSINESS : - NAME AMOUNT(RS.) DEPOSIT WITH INDIAN OIL CO. 1,00,000 SALE S TAX REFUND RECEIVABLE 33,875 PREPAID EXPENSES 24,860 TELEPHONE EXPENSES RECEIVABLE 5,440 MANGESH STAFF ADVANCE 10,000 WATER CONNECTION DEPOSIT 10,000 =========== TOTAL 1,85,175 FURTHER THE LOAN AND ADVANCES OF RS. 19 ,65,437/ - SHOWN IN THE BALANCE SHEET OF M/S PELEECON LINKERS WERE AS UNDER : - M/S SHRI LAXMI NARSIMHA PETROLEUM 2,84,911 MRS. SUNITA HEBLI - STAFF 16,80,526 =========== TOTAL 19,65,437 THUS, IT IS CLEAR THAT AN ADVANCE OF RS. 2,84,9 11/ - WAS GIVEN TO OTHER PROPRIETORY CONCERN OF THE ASSESSEE HIMSELF AND THE SAME WAS UTILIZED FOR THE PURPOSE OF BUSINESS. REGARDING ADVANCE OF RS. 16,80,526/ - GIVEN TO MRS. SUNITA HEBLI, WIFE OF THE ASSESSEE, WE FOUND THAT SHE WAS WORKING AS AN EMPLOYEE W ITH THE ASSESSEE AND THE ADVANCE WAS GIVEN OUT OF OWN ITA NO. 5847 / 1 3 3 CAPITAL WHICH WAS IN THE PROPRIETORY CONCERN AT RS. 29,79,061/ - AS ON 31ST MARCH, 2009. FURTHER, AN ADVANCE OF RS. 4,50,000/ - OUT OF THE TOTAL ADVANCE WAS GIVEN ON 07/04/2008 OUT OF THE MATURITY PROCEED S OF PPF ACCOUNT AMOUNTING TO RS. 4,53,995/ - CREDITED IN THE BANK ACCOUNT WITH ICICI BANK LTD. THE COPY OF BANK ACCOUNT WAS FILED TO SUPPORT THE CONTENTION. OTHER AMOUNTS HAVE BEEN GIVEN OUT OF RECOVERY FROM THE SALES PROCEEDS AND DEBTORS DULY REFLECTED IN THE BANK ACCOUNT WITH THE THANE JANATA SAHAKARI BANK LTD. THUS, ADVANCE WAS GIVEN EITHER OUT OF INTEREST FREE FUNDS OR FOR BUSINESS PURPOSES. 4. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY MERIT IN THE DISALLOWANCE MADE BY THE AO. THEREFORE, WE DIRECT TO DE LETE THE SAME. 5 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 02/12 / 201 4 . 02/12 / 2014 SD/ - SD/ - ( ) ( SANJAY GARG ) ( ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 02/12 /2014 /PKM , PS COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A), MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//