VILAS TRANSPORT COMPANY, MUMBAI V. ITO 13(2)(1), MUMBAI

ITA 6717/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3390 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 22-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 19-11-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S SENTHIL KUMAR
• Keywords: Business expenditure; Opportunity of being heard; Principle of natural justice
• Section: 40A(3); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ' F ' BENCH, MUMBAI BEFORE SHRI JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN , JUDICIAL MEMBER ITA NO. 6717 /MUM/201 3 (ASSESSMENT YEAR: 2009 - 10 ) M/S. VILAS TRANSPORT COMPANY VS. INCOME TAX OFFICER - 13(2)(1) 103/104, VYAPAR BHAVAN 49, P . D M ELLO ROAD, CARNAC BUNDER, MUMBAI 400009 A AYAKAR BHAVAN, M.K. ROAD MUMBAI 400020 PAN - AAAFV0760G APPELLANT RESPONDENT APPELLANT BY: NONE RESPONDENT BY: SHRI S. SENTHIL KUMAR DATE OF HEARING: 31.05 .2016 DATE OF PRONOUNCEMENT: 03 .0 6 .2016 O R D E R PER JASON P. BOAZ, A.M . THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - 24 , MUMBAI DATED 25 . 03 .201 3 FOR A.Y. 2009 - 10 . 2 . THE FACTS OF THE CASE, BRIEFLY, ARE AS UNDER: - 2.1 THE ASSESSEE, A FIRM ENGAGED IN BUSINESS AS CLEARING HOUSE AGENT (CHA) FILED ITS RETURN OF INCOME FOR A.Y. 2008 - 09 ON 30.09.2009 DECLARING INCOME OF ` 8,20,590/ - . THE CASE WAS TAKEN UP FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF TH E INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') VIDE ORDER DATED 29.12.2011 WHEREIN THE INCOME OF THE ASSESSEE WAS DETERMINED AT ` 53,40,357/ - IN VIEW OF THE FOLLOWING DISALLOWANCES: - (I) UNEXPLAINED CASH EXPENDITURES ` 30,40,357/ - (II) DISALLOWANCE UNDER SECTI ON 40(A)(IA) ` 13,39,302/ - (III) DISALLOWANCE OF EXPENSES ` 1,95,395/ - ITA NO. 6717/MUM/2013 M/S. VILAS TRANSPORT COMPANY 2 2.2 AGGRIEVED BY THE ORDER OF ASSESSMENT DATED 29.12.2011 FOR A.Y. 2009 - 10, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) - 24, MUMBAI. THE LEARNED CIT(A) DISPOSED OFF THE ASSESSEE S APPEAL BY THE IMPUGNED ORDER DATED 25.03.2013 , DISMISSING THE GROUNDS RAISED BY THE ASSESSEE IN RESPECT OF THE DISALLOWANCES LISTED AT (II) AND (III) AT PARA 2.1 OF THIS ORDER, AND ENHANCED THE DISALLOWANCE ON THE ISSUE AT (I) ABOVE FROM ` 30,40,357/ - MADE BY THE AO TO ` 81,05,294/ - UNDER SECTION 40A(3) OF THE ACT. 3 . AGGRIEVED BY THE ORDER OF THE CIT(A) - 24, MUMBAI DATED 25.03.2013, THE ASSESSEE HAS PREFERRED THIS APPEAL RAISING THE FOLLOWING GROUNDS: - 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED ASSESSING OFFICER ERRED IN DISALLOWING 20% OF CASH PAID ON ACCOUNT OF STEVEDORING EXPENSES PAID ON BEHALF OF YOUR APPELLANTS PRINCIPLE. YOUR APPELLANT STATES THAT THEY HAVE NOT CLAIMED ANY EXPENDITURE IN THEIR PROFIT & LOSS ACCOUNT ON ACCOUNT OF STEVEDORI NG CHARGES OR HANDLING CHARGES. ALL PAYMENTS OF STEVEDORING CHARGES OR HANDLING CHARGES ARE ON BEHALF OF PRINCIPLES. THE DISALLOWANCE OF CASH EXPENSES BY ASSESSING OFFICER IS RS.30,40,357/ - . THE LEARNED COMMISSIONER APPEAL ERRED IN ENHANCING THE ABOVE DISA LLOWANCE TO THE ACTUAL PAYMENT OF SUM OF RS.8L,05,294/ - (RS.69,16,056/ - LOADING CHARGES RS. L1,89,238/ - SWEEPING LABOUR CHARGES ) U/S 40A (3) OF THE INCOME TAX ACT. YOUR APPELLANT PRAYS THAT TOTAL DISALLOWANCE OF RS.81,05,294/ - ON THIS - GROUND BE DELETED. 2) THE LEARNED ASSESSING OFFICER AND COMMISSIONER APPEAL ERRED IN DISALLOWING LEGAL FEES OF RS.10,27,560/ - AUDIT FEES OF RS.55,000/ - AND PROFESSIONAL FEES OF RS.2,91,242/ - UNDER SECTION 40(A)(IA) OF THE INCOME TAX ACT. YOUR APPELLANT PRAYS THE THIS FEES AR E ALREADY PAID DURING THE YEAR. YOUR APPELLANT PRAYS THAT THE ABOVE EXPENSES BE ALLOWED BEING BUSINESS EXPENDITURE OF YOUR APPELLANT. ADDITION MADE ON THIS ACCOUNT TOTALING RS.13,39,322/ - BE DELETED. 3) THE LEARNED ASSESSING OFFICER AND COMMISSIONER APPEAL ERRED IN DISALLOWING 30% OF CLEARING AND FORWARDING EXPENSES AT RS.6,51,318/ - AND MAKING ADDITION OF RS.1,95,395/ - TO YOUR APPELLANTS INCOME. YOUR APPELLANT STATES THAT THE NATURE OF EXPENSES ARE SUCH THAT IT HAS TO BE PAID IN CASH TO DOCK AUTHORITIES DUR ING THE COURSE OF BUSINESS ACTIVITY OF YOUR APPELLANT. YOUR APPELLANT PRAYS THAT DISALLOWANCE OF 30% OUT OF CLEARING AND FORWARDING EXPENSES BE DELETED. 4) YOUR APPELLANT CRAVES TO ADD, ALTER OR AMEND ANY OF THE GROUNDS OF APPEAL AT OR BEFORE HEARING. ITA NO. 6717/MUM/2013 M/S. VILAS TRANSPORT COMPANY 3 4 . THE CASE WAS FIXED FOR HEARING ON VARIOUS DATES AND ON MOST OCCASIONS EITHER NONE APPEARED ON BEHALF OF THE ASSESSEE OR LETTERS WERE FILED ON BEHALF OF THE ASSESSEE SEEKING ADJOURNMENTS FOR VARIOUS REASONS LIKE PAPER BOOK IS UNDER PREPARATION, GROUNDS OF APPE AL FILED TO BE REVISED, AMENDED, REPRESENTATIVE IS NOT WELL, ETC. WHEN THE CASE WAS CALLED FOR HEARING ON 31.05.2016, NONE WAS PRESENT FOR THE ASSESSEE, BUT THE LEARNED D.R. FOR REVENUE WAS PRESENT AND READY TO ARGUE THE CASE ON BEHALF OF REVENUE. IN THESE CIRCUMSTANCES, AS LAID OUT ABOVE, WE ARE OF THE VIEW THAT THE ASSESSEE IS NOT INTERESTED IN PURSUING THIS APPEAL SERIOUSLY AND THEREFORE PROCEED TO DISPOSE OFF THIS APPEAL WITH THE ASSISTANCE OF THE LEARNED D.R. AND THE MATERIAL ON RECORD. 5 . GROUND NO. 1 - DISALLOWANCE UNDER SECTION 40A(3) 5.1 IN THIS GROUND, THE ASSESSEE ASSAILS THE IMPUGNED ORDER OF THE LEARNED CIT(A) AS ERRONEOUS IN ENHANCING THE DISALLOWANCE OF ` 30,40,357/ - MADE BY THE ASSESSING OFFICER (AO) @20% OF CASH PAID EXPENSES ON ACCOUNT OF STEV EDORING EXPENSES PAID ON BEHALF OF THE ASSESSEES PRINCIPAL TO ` 81,05,294/ - ON TOTALLY DIFFERENT ITEM S , BEING THE ACTUAL PAYMENT OF LOADING CHARGES OF ` 69,16,056/ - AND SWEEPING LABOUR CHARGES OF ` 11,89,238/ - . IT IS SUBMITTED THAT THE AFORESAID DISALLOWANCE BE DELETED. 5.2 PER CONTRA, THE LEARNED D.R. SUPPORTED THE IMPUGNED ORDER OF THE LEARNED CIT(A) ON THIS ISSUE. THE LEARNED D.R. SUBMITTED THAT IN THE IMPUGNED ORDER, THE LEARNED CIT(A) HAS CORRECTLY HELD THAT THE ACTION OF THE AO IN DISALLOWING ` 30,40, 357/ - I.E. 20% OF PAYMENTS OF STEVEDORING CHARGES UNDER SECTION 40A(3) OF THE ACT ON PRESUMPTIONS, WITHOUT VERIFYING THE DETAILS OF ACTUAL CASH PAID ABOVE ` 20,000/ - , WAS ERRONEOUS AND BASELESS. IN THIS REGARD THE LEARNED CIT(A) IN APPELLATE PROCEEDINGS HAD CALLED UPON THE ASSESSEE TO FILE DETAILS OF STEVEDORING CHARGES, HANDLING CHARGES AND SWEEPING LABOUR CHARGES. ON AN EXAMINATION THEREOF, THE LEARNED CIT(A) WAS OF THE VIEW THAT IN RESPECT OF STEVEDORING CHARGES OF ` 75,32,257/ - SINCE IT APP EARED THAT PAYMENTS WERE MADE BY THE ASSESSEE TO THE LABOURERS DIRECTLY, NO PAYMENT TO A SINGLE PERSON WAS MADE IN EXCESS OF ` 20,000/ - AND THEREFORE THE AOS ADDITION WAS NOT UPHELD. IT IS ITA NO. 6717/MUM/2013 M/S. VILAS TRANSPORT COMPANY 4 SUBMITTED THAT, HOWEVER, WITH RESPECT TO THE DETAILS OF PAYMENT OF HANDLING CHARGES OF ` 69,16,056/ - AND SWEEPING LABOUR CHARGES OF ` 11,89,238/ - , SINCE THE ASSESSEE HAS MADE CASH PAYMENTS EXCEEDING ` 20,000/ - DIRECTLY TO A CONTRACTOR/PERSON, THE PROVISIONS OF SECTION 40A(3) OF THE ACT WOULD APPLY ON THE ACTUAL PAYMENT AND T HEREFORE PROCEEDED TO ENHANCE DISALLOWANCE TO ` 81,05,294/ - (I.E. ` 69,16,056/ - OF HANDLING CHARGES PLUS ` 11,89,238/ - ON ACCOUNT OF SWEEPING LABOUR CHARGES). IT IS PRAYED BY THE LEARNED D.R. THAT SINCE THE ASSESSEE HAS NOT FURNISHED ANY MATERIAL EVIDENCE TO CONTROVERT THE FINDING OF THE LEARNED CIT(A), THE ENHANCED DISALLOWANCE OF ` 81,05,295 UNDER SECTION 40A(3) OF THE ACT BE UPHELD. 5.3.1 WE HAVE HEARD THE LEARNED D.R. FOR REVENUE AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. THE FINDING/DECIS ION OF THE LEARNED CIT(A) ON THIS GROUND AT PARA 4.3 TO 4.4.5 OF THE IMPUGNED ORDER IS EXTRACTED HEREUNDER: - 4.3 DECISION : - 4.3.1 I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS MADE BY THE ASSESSEE. ASSESSEE HAS OBJECTED TO THE ADDITION OF RS. 30,10,357/ - MADE U/S 40A(3) OF I.T. ACT, 1961 ON THE GROUND THAT EXPENSES IN CASH HAVE BEEN INCURRED ON BEHALF OF THE PRINCIPALS AND THESE EXPENSES ARE NOT CLAIMED AS DEDUCTIBLE EXPENDITURE IN PROFIT AND LOSS ACCOUNT. IT IS OBSERVED FROM THE RECORDS TH AT ASSESSEE IS ENGAGED IN THE BUSINESS OF CLEARING HOUSE AGENT AND CLEARS GOODS FROM THE SHIPPING DOCKS AT MUMBAI ON BEHALF OF THE PRINCIPALS WHOSE GOODS ARRIVE AT DOCKS FROM TIME TO TIME. ASSESSEE INCURS EXPENSES ON BEHALF OF ITS PRINCIPALS FOR GETTING GO ODS CLEARED FROM DOCKS AND BILLS THESE EXPENSES ALONG WITH ITS AGENCY CHARGES TO THE PRINCIPALS AS PER THE TERMS OF AGREEMENT WITH THE PRINCIPALS. ASSESSEE INCURS VARIOUS TYPES OF EXPENSES AT THE DOCKS, NAMELY, LOADING AND UNLOADING CHARGES, TRANSPORT CHAR GES, STEVEDORING CHARGES, ETC. FOR CLEARING THE GOODS. ASSESSING OFFICER NOTICED DURING THE COURSE OF HEARING THAT ASSESSEE HAD INCURRED TOTAL EXPENSES OF RS. 1,52,01,788/ - IN CASH IN RESPECT OF STEVEDORING CHARGES AND HANDLING CHARGES AND FOR WHICH ONLY S ELF PREPARED UNSIGNED VOUCHERS WERE AVAILABLE WITH THE ASSESSEE. A.O. CALLED FOR THE BILLS/INVOICES FOR THESE VOUCHERS BUT ASSESSEE COULD NOT PRODUCE THE SAME ON THE GROUND THAT ALL BILLS/INVOICES ALONG WITH THE VOUCHERS IN ORIGINAL WERE HANDED OVER TO THE PRINCIPALS FOR VERIFICATION AND PAYMENT. IT HAS ALSO BEEN SUBMITTED THAT THESE STEVEDORING AND HANDLING CHARGES HAVE BEEN PAID TO GANG LEADER (15 TO 20 GANGS EACH CONSISTING OF 13 TO 15 LABOURERS WHO WORK ON CLEARING CONSIGNMENTS OF GOODS). ASSESSEE HAS A LSO PAID BANKING CASH TRANSACTION TAX ON WITHDRAWALS OF CASH FROM THE BANKS. ITA NO. 6717/MUM/2013 M/S. VILAS TRANSPORT COMPANY 5 ASSESSING OFFICER HELD THAT ASSESSEE VIOLATED THE PROVISIONS OF SECTION 40A(3) OF I.T. ACT, 1961 AND SINCE PAYMENTS IN CASH EXCEEDED RS. 20,000/ - , DISALLOWANCE U/S 40A(3) OF I.T. ACT, 1961 WAS JUSTIFIED IN THE FACTS OF THE CASE. 4.3.2 IT A PPEARS FROM RECORDS THAT ASSESSEE HAS INCURRED EXPENSES IN CASH EXCEEDING RS.20,000/ - TO VARIOUS PERSONS FOR GETTING GOODS CLEARED FROM DOCKS ON BEHALF OF ITS CLIENTS/PRINCIPALS AND HAS BILLED THESE TO ITS PRINCIPALS AND DOES NOT HAVE ANY PROOF BY WAY OF BILLS/INVOICES/RECIPIENT SIGNED VOUCHERS IN RESPECT OF THESE EXPENSES. ASSESSEE HAS PAID BANKING CASH TRANSACTION TAX IN RESPECT OF WITHDRAWAL OF CASH FROM BANKS AND HAS TERMED THESE PAYMENTS AS SPEED MONEY INCURRED IN THE PROCESS OF CARRYING ON ITS BUSINESS. IT IS FURTHER OBSERVED THAT ASSESSEE HAS SHOWN OUTSTANDING CREDITORS IN ITS BOOKS TO WHOM CASH PAYMENTS HAVE BEEN MADE AND ASSESSEE HAS ACCOUNTED FOR GROSS RECEIPTS IN ITS BOOKS BECAUSE TDS IS CLAIMED BY THE ASSESSEE IN RETURN OF INCOME AND COMPUTATION OF TOTAL INCOME ON GROSS BASIS. DURING THE COURSE OF APPELLATE PROCEEDINGS ASSESSEE WAS ISSUED A SHOW CAUSE NOTICE DATED 14.3.2013 AND ASSESSEE WAS ASKED TO FURNISH DETAILS AND DOCUMENTS REGARD ING THE STEVEDORING CHARGES, LABOUR HANDLING CHARGES AND SWEEPING CHARGES PAID BY THE ASSESSEE IN CASH TO VARIOUS PARTIES. ASSESSEE HAS REPLIED VIDE LETTER DATED 21/3/2013 AND SUBMITTED THAT IT HAS PAID RS. 75,33,257/ - AS STEVEDORING CHARGES, RS. 69,16,056 / - AS HANDLING CHARGES AND RS. 11,89,238/ - AS SWEEPING CHARGES TO VARIOUS GANGS OF WORKED AT THE DOCKS FOR LOADING AND UNLOADING GOODS AND THESE CHARGES ARE PAID IN CASH TO THE GANG LEADER WHO DISTRIBUTES THESE PAYMENTS TO GANG WORKERS IN THE TEAM WHO WORK ED TOGETHER AS A TEAM TO EITHER LOAD OR UNLOAD GOODS IN/FROM THE SHIP AT THE DOCKS. IT HAS BEEN SUBMITTED THAT THESE PAYMENTS ARE MADE AS PER DOCK LABOUR LAWS AND ARE PAID IN CASH IMMEDIATELY AFTER THE COMPLETION OF WORK. ASSESSEE HAS ALSO FILED XEROX COPI ES OF VOUCHERS PREPARED BY THE ASSESSEE AND THE LABOUR PAYMENT SHEETS GIVING DETAILS OF LOADING AND UNLOADING EXPENSES GANG WISE AND SHIP WISE ON VARIOUS DATES. FOR EXAMPLE, ASSESSEE HAS PAID RS. 1,47,139/ - TO SITARAM P. MALIK DT. 25/5/2008 FOR SWEEPING LA BOUR CHARGES. OTHER PAYMENTS MADE UNDER THE HEAD LABOUR HANDLING CHARGES AND SWEEPING CHARGES ARE ALSO IN SIMILAR IDENTICAL MANNER WITH THE ONLY DIFFERENCE THAT THE DATE, QUANTUM AND SHIP DIFFER. HOWEVER THE BASIC ISSUE REMAINS THE SAME, ASSESSEE HAS MADE CASH PAYMENTS EXCEEDING RS. 20,000/ - TO ONE PERSON IN ONE DAY EVEN THOUGH HE MAY HAVE DISTRIBUTED THE SAME TO OTHER LABOURERS IN SUMS WHICH ARE LESS THAN RS. 20,000/ - . ISSUE IN ASSESSEES CASE IS THAT ASSESSEE PAYS THE GROSS AMOUNT EXCEEDING RS. 20,000/ - I N A DAY TO THE TEAM LEADER WHO ULTIMATELY DISTRIBUTES TO THE TEAM MEMBERS. SECTION 40A(3)IS AMENDED FROM A.Y. 2009 - 10 ONWARDS AND ANY VIOLATION OF THE PROVISIONS ATTRACTS TOTTAL DISALLOWANCE OF THE AMOUNT AND NOT 20% OF IT. 4.3.3 THE ASSESSEE SUBMITTED DUR ING THE APPELLATE PROCEEDINGS THAT IN THE EARLIER YEAR THE CIT(A) DELETED SIMILAR DISALLOWANCE MADE BY ITA NO. 6717/MUM/2013 M/S. VILAS TRANSPORT COMPANY 6 THE ASSESSING OFFICER. AT THIS JUNCTURE IT IS RELEVANT TO SEE THE DECISION OF THE CIT(A), THE SAME IS AS UNDER : - CIT(A) ORDER NO. CIT(A) - 24/13(2)(1)/420/09 - 10 DT. 28.01,2011 'THE ASSESSING OFFICER HAS ADHOC BASIS HAS DISALLOWED 2096 OF THE TOTAL AMOUNT WITHDRAWN FROM BANK ASSUMING THAT THE AMOUNT WITHDRAWN FROM THE BANK IS FOR THE EXPENDITURE OF THE APPELLANT BUSINESS TO WHICH THE PR OVISIONS OF SECTION 40A(3) ARE APPLICABLE. WE SUBMIT THAT PROVISIONS OF SECTION 40(A)3 CAN BE APPLIED ONLY IN CASE OF AN ASSESSEE WHO HAS CLAIMED DEDUCT/ON AND THE EXPENDITURE IS INCURRED IN CONTRAVENTION OF SECTION 40A(3). PLEASE REFER TO SECTION 40A. THI S SECTION SAYS THAT WHILE COMPUTING THE INCOME UNDER THE HEAD 'PROFITS & GAINS OF BUSINESS OR PROFESSION' THE PROVISIONS OF SECTIONS 40 A WILL BE APPLICABLE. SECTION 40A(3) IS ONE OF THE SUB - SECTION OF SECTION 40 A. WHILE COMPUTING A TAXABLE INCOME UNDER T HE HEAD 'PROFITS & GAINS OF BUSINESS OR PROFESS/ON' THE PROVISION OF SECTION 40A(3) ARE INVOKED. OUR CLIENT HAS NOT CLAIMED ANY EXPENDITURE TO WHICH THE ASSESSING OFFICER HAS MADE REFERENCE. WE THEREFORE SUBMIT THAT NO DISALLOWANCE CAN BE MADE IN THE HANDS OF OUR CLIENT U/S 40A(3). WITHOUT PREJUDICE TO ABOVE WE SUBMIT THAT THE ASSESSING OFFICER ON ADHOC BASIS HAS ASSUMED THAT TOTAL WITHDRAWAL FROM THE BANK IS SPENT ON EXPENDITURE TO WHICH THE PROVISIONS OF SECTION 40A (3) ARE APPLICABLE. HE HAS DISALLOWED 20% OF THE TOTAL WITHDRAWALS FROM THE BANK. ON THIS GROUND ALSO WE SUBMIT THAT THE ADDITION MADE IS NOT JUSTIFIED AND BE DELETED. 2.2. I HAVE CONSIDERED THE SUBMISSION OF THE LD. COUNSEL AND ON THE BASIS OF FACTS AND DETAILS BROUGHT ON RECORD AND THE SUBMI SSIONS MADE ABOVE, IT IS CLEAR THAT NO SUCH DISALLOWANCE CAN BE MADE. ACCORDINGLY, THE SAME IS DELETED AND THIS GROUND OF APPEAL IS ALLOWED.' 4.3.4 FROM THE ABOVE, IT IS UNDERSTOOD THAT THE CIT(A) HAS DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AS THE ASSESSING OFFICER WAS NOT EMPOWERED TO ESTIMATION OF 20% OF TOTAL PAYMENTS MADE IN CASH. HE DID NOT QUALIFY ANY OTHER ISSUE. I WAS ALSO OF TH E SAME VIEW THAT THE ASSESSING OFFICER IS NOT EMPOWERED TO ESTIMATE CERTAIN PERCENTAGE FOR DISALLOWANCE WITHOUT VERIFYING THE DETAILS. THEREFORE, THE DECISION OF THE CIT(A) RELIED ON BY THE ASSESSEE IS OF NO HELP. 4.3.5 AS REGARDS, THE OTHER CONTENTION OF THE ASSESSEE THAT THE ASSESSEE HAS MADE PAYMENTS ON BEHALF OF ITS PRINCIPALS IS ALSO NOT TENABLE FOR THE REASON THAT THE PAYMENTS MADE IN CASH ARE NOT BETWEEN THE ASSESSEE AND THE PRINCIPAL I.E. NOT BETWEEN PRINCIPAL AND THE AGENT. THE PAYMENTS HAVE BEEN M ADE BY THE ASSESSEE TO SOME PARTIES ON BEHALF OF THE PRINCIPALS CONTRAVENING THE PROVISIONS OF SEC. 40A(3). IT IS ALSO TO BE MENTIONED HERE, THE ASSESSEE HAS SHOWN THE GROSS RECEIPTS WHICH INCLUDE THE TOTAL AMOUNTS RECEIVED BY THE ASSESSEE, THE SAME ARE AS UNDER : - GROSS RECEIPT RS: - 1. M/S E. D & F MAN COMMODITIES INDIA P. LTD. 6510327.00 2. M/S ISPAT INDUSTRIES LTD. 10899281.00 3. M/S STATE TRADING CORPN. LTD. 40729638.00 GROSS TOTAL AMOUNT RS.... 58139246.00 ITA NO. 6717/MUM/2013 M/S. VILAS TRANSPORT COMPANY 7 LESS : EXPENDITURE PAID ON BEHALF OF CUSTOMER TOTAL PAYMENT OUT OF TOTAL PAY. PAID BY CASH 1. STEVEDORING CHARGES 2. HANDLING CHARGES 3. TRANSPORTATION CHARGES 4. GODOWN RENT 5. TARPALINE PURCHASE 6. CUSTOME O.T. & OCTROI AGENCY CHARGES RECEIVED TOTAL 86 81435.00 210990112.00 18654939.00 5123220.00 98431.00 458954.00 53702991.00 --------------------- 4436255.00 58139246.00 =========== 7533257.00 6916056.00 --- --- NOTE: CASH LABOUR CHARGES STEVE D ORING & HANDLING CHARGES IS PAID AS PER VESSEL WISE PAYMENT TO OUR LABOURS BY CASH VOUCHERS SUBMITTED TO OUR CLIENT FOR FINAL PAYMENT OF BILLS. 4.3.6 IT IS VERY CLEAR FROM THE ABOVE, THAT THE ASSESSEE RECEIVED AMOUNTS FROM THE PRINCIPALS AND THE SAME ARE REFLECTED IN THE ABOVE STATEMENT. IN FACT, THE A SSESSEE SHOULD HAVE SHOWN/ ACCOUNTED ALL GROSS RECEIPTS IN ITS TRADING/ P&L A/C BUT THE ASSESSEE DID NOT SHOW THESE AMOUNTS. THE ASSESSEE HAS EXCLUDED THESE AMOUNTS RECEIVED FROM THE PRINCIPALS AND PAYMENTS MADE TO THE PERSONS IN CASH IN ITS FINANCIAL STAT EMENTS AND CONSEQUENTLY IN THE RETURN OF INCOME; WHICH IS NOT FACTUALLY AND LEGALLY CORRECT. IN ORDER TO ASCERTAIN THE FACTS I HAVE ALSO CALLED FOR TDS CERTIFICATES ISSUED BY THE PRINCIPALS, AND THE ASSESSEE PRODUCED ONE SAMPLE TDS CERTIFICATE WHEREIN THE TDS HAS BEEN MADE ON THE GROSS AMOUNT I.E . WHATEVER AMOUNT THE ASSESSEE REFLECTED IN THE GROSS RECEIPTS. THE ASSESSEE'S AR ALSO INFORMED THAT TDS HAS BEEN MADE BY THE PRINCIPALS ON THE GROSS AMOUNT ONLY. THIS FINDING OF THE FACT GOES TO PROVE THAT THE ASSE SSEE'S PRINCIPALS MADE PAYMENT TO THE ASSESSEE ONLY AND NOT TO THE INDIVIDUAL PARTIES. THEREFORE, THE ASSESSEE IS STATUTORILY OBLIGED TO ADHERE TO THE PROVISIONS OF THE ACT WHILE CONDUCTING HIS BUSINESS AFFAIRS, PARTICULARLY IN THE CONTEXT OF PAYMENT OF CA SH IN EXCESS OF RS. 20,000/ - AS THE SAME IS IN VIOLATION OF PROVISIONS OF SEC. 40A(3). THUS, THE CONTENTION OF THE ASSESSEE THAT IT MADE PAYMENTS ON BEHALF OF PRINCIPALS AND THE ASSESSEE WAS NOT LIABLE TO BE VISITED WITH THE PROVISIONS OF SEC. 40A(3) ARE M ISPLACED AND UNFOUNDED. THEREFORE, THE ASSESSEE'S RELIANCE ON THE CASE LAWS CITED BY IT ARE OF NO HELP. 4.4 ENHANCEMENT : - 4.4.1 IN THIS CASE, THE ASSESSING OFFICER HAS ESTIMATED 20% OF PAYMENTS MADE BY THE ASSESSEE IN CASH, AND DISALLOWED U/S 40A(3) OF I.T. ACT WITHOUT VERIFYING THE DETAILS OF THE ACTUAL CASH PAID ABOVE ITA NO. 6717/MUM/2013 M/S. VILAS TRANSPORT COMPANY 8 RS. 20,000/ - . THE ASSESSING OFFICER IS NOT MANDATED TO P RESUME THINGS WHILE INVOKING SPECIFIC PROVISIONS OF THE ACT. THEREFORE, THE ACTION OF ASSESSING OFFICER IS NOT CORRECT AND WITHOUT ANY BASIS. TO VERIFY THE ISSUE OF CASH PAYMENTS MADE BY THE ASSESSEE I HAVE CALLED FOR THE DETAILS OF HEADWISE VIZ. STEVEDORI NG EXPENSES, LABOURER PAYMENT AND HANDLING CHARGES. I HAVE ALSO MADE NOTING IN THE ORDER SHEET WHICH IS AS UNDER : - 21/3/13 SHRI JAYANT B. SHAH, CA & AR APPEARED & CASE DISCUSSED. HE FURNISHED THE DETAILS OF CASH PAYMENTS, LEDGER EXTRACTS, & VOUCHERS & I T IS SEEN FROM THE DETAILS AMOUNTS PAID BASICALLY TO A GANG LEADER AND INTUM HE DISTRIBUTED THE PAYMENTS WHETHER THE GANG LEADER CAN BE TREATED AS PERSON AS MENTIONED IN THE SUB - SECTION (3) OF SECTION 404 CASE DISCUSSED.' THE ASSESSEE SUBMITTED THE DETAILS UNDER HEADWISE. THE BREAK - UP OF THESE EXPENSES ARE AS UNDER : - STEVEDORING CHARGES - RS.75,33,257/ - HANDLING CHARGES - RS. 69,16,056/ - SWEEPING LABOUR CHARGES - RS. 11,89,238/ - 4.4.2 THE SAME HAS BEEN EXAMINED AND FOUND THAT OUT OF THE TOTAL EXPENDITURE INCURRED THE ASSESSEE MADE CASH PAYMENTS EXCEEDING RS.20,000/ - DIRECTLY TO A PERSON UNDER THE HEADS HANDLING CHARGES AND LABOUR CHARGES. HOWEVER, WITH RESPECT TO STEVEDORING EXPENSES OF RS. 75,32,257/ - IT APPEARS THAT THE ASSESSEE MADE PAYMENTS DIRECTLY TO LABOURERS AS THERE IS NO GANG LEADER'S NAME APPEARING IN THE VOUCHERS. THUS, IT IS CONSTRUED THAT THE ASSESSEE MADE PAYMENTS LESS THAN RS. 20,000/ - TO A SINGLE PERSON IN RESPECT OF STE VEDORING EXPENSES OF RS. 75,32,252/ - BUT IN CASE OF TWO ITEMS OF EXPENDITURE VIZ RS. 69,16,056/ - FOR HANDLING CHARGES & RS. 11,89,238/ - FOR SWEEPING LABOUR CHARGES AS THE AMOUNTS PAID TO A PERSON WAS MORE THAN RS.20,000/ - , THE PROVISIONS OF SECTION 40A(3) ARE CLEARLY APPLICABLE IN THE EXPENDITURE HEADS, HANDLING CHARGES AND LABOUR PAYMENTS. THE PROVISIONS OF SEC. 40A(3) ARE AS UNDER : - 'WHERE THE ASSESSEE INCURS ANY EXPENDITURE IN RESPECT OF WHICH A PAYMENT OR AGGREGATE OF PAYMENTS MADE TO A P ERSON IN A DAY, OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE DRAWN ON A BANK OR ACCOUNT PAYEE BANK DRAFT EXCEEDS TWENTY THOUSAND RUPEES, NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF SUCH EXPENDITURE.' 4.4.3 IT IS ALSO IMPORTANT TO NOTE THAT THE PROVISIONS OF SEC. 40A(3) HAVE UNDERGONE A SUBSTANTIAL CHANGE FROM A.Y. 2008 - 09 WHEREIN THE CHANGES MADE ARE THAT THERE ARE NO EXCEPTIONS TO THE VIOLATION OF PROVISIONS U/S 40A(3). IN OTHER WORDS THE PROVISIONS HAVE BECOME MORE STRINGENT THAN BEFORE. THUS, IF ANY PAYMENT MADE ABOVE RS. 20,000/ - IN CASH TO A PERSON IN A DAY SUCH AMOUNT WILL ATTRACT THE PROVISIONS OF THIS SECTION FOR DISALLOWANCE. ITA NO. 6717/MUM/2013 M/S. VILAS TRANSPORT COMPANY 9 4.4.4 IN VIEW OF THE FACT PROVISIONS OF SECTION 40A(3) OF I.T. ACT, 1961 ARE CLEARLY ATTRACTED IN THIS CASE AND THE DISALLOWANCE IS ENHANCE D TO THE ACTUAL PAYMENT OF SUM OF RS. 81,05,294/ - (RS. 69,16,056/ - HANDLING CHARGES & RS. 11,89,238/ - SWEEPING LABOUR CHARGES) U/S. 40A(3) OF I.T. ACT, 1961. IN THIS CONNECTION, RELIANCE IS ALSO PLACED ON THE FOLLOWING DECISIONS: - I ) CI T V/S. PADMAVATHI RAJE COTTON MILLS CAL - 239 1TR 355 II ) CIT V/ S. GREWAL GROUP OF INDUSTRIES P&H - 110 ITR 278 III ) CIT V/S. KISHAN CHAND MAHESH DASS P&H - 121 ITR 232 4.4.5 IN THE RESULT, THE GROUND OF APPEAL IS NOT ONLY DISMISSED BUT DISALLOWANCE IS ENHANCED. 5.3.2 ON A PERUSAL OF THE FINDING/DECISION OF THE LEARNED CIT(A) IT IS SEEN THAT HE HAS RENDERED A FINDING TO THE EFFECT THAT THE DECISION OF THE AO IN DISALLOWING UNDER SECTION 40A(3) OF THE ACT AN AMOUNT OF ` 30,40,357/ - @20% OF PAYMENTS OF STEVEDORING CHARGES IS ERRONEOUS AND BASELESS, BASED ON PRESUMPTIONS AND WITHOUT VERIFYING THE DETAILS OF ACTUAL CASH PAID AND TO WHOM. IN THIS REGARD IT IS SEEN THAT ON EXAMINATION OF DETAILS FILED BY THE ASSESSEE BEFORE HIM IN RESPECT OF STEVEDORING CHARGES AMOUNTING TO ` 75 ,32,257/ - THE LEARNED CIT(A) RENDERED THE FINDING THAT SINCE THE PAYMENTS WERE MADE DIRECTLY BY THE ASSESSEE TO THE LABOURERS NO PAYMENT TO A SINGLE PERSON WAS MADE IN EXCESS OF ` 20,000/ - AND THEREFORE ALSO THE DISALLOWANCE THE AO MADE UNDER SECTION 40A(3) OF THE ACT WAS NOT SUSTAINABLE AND ACCORDINGLY DELETED. THIS ISSUE IS NOT BEFORE US IN THE PRESENT APPEAL. 5.3.3 THE ISSUE IN DISPUTE BEFORE US IN THIS GROUND IS IN RESPECT TO THE ENHANCEMENT OF INCOME BY THE LEARNED CIT(A) TO THE EXTENT OF ` 81,05,294/ - U NDER SECTION 40A(3) OF THE ACT COMPRISING THE EXTENT OF ACTUAL PAYMENTS OF HANDLING CHARGES PAID, ` 69,16,056/ - AND ` 11,89,238/ - ON ACC OUNT OF SWEEPING LABOUR CHARGES . I T IS SEEN FROM PARA 4.4.1 OF THE IMPUGNED ORDER, THAT THE LEARNED CIT(A) VIDE ORDER SHEET NOTING DATED 21.03.2013 HAD MERELY CALLED FOR DETAILS OF STEVEDORING EXPENSES, HANDLING CHARGES AND LABOURERS PAYMENT. FROM A PERUSAL OF PARAS 4.4.2 TO 4.4.9 OF THE IMPUGNED ORDER, IT IS SEEN THAT ONLY ON THE BASIS OF EXAMINATION OF THE DETAILS FILE D BY THE ASSESSEE, THE LEARNED CIT(A) PROCEEDED TO RENDER AN ADVERSE FINDING THAT LED TO ENHANCEMENT OF THE ASSESSEES INCOME TO THE EXTENT OF ITA NO. 6717/MUM/2013 M/S. VILAS TRANSPORT COMPANY 10 ` 81,05,294/ - BY VIRTUE OF THE DISALLOWANCE UNDER SECTION 40A(3) OF THE ACT. WE FIND THAT IT IS CLEAR FROM THE IMP UGNED ORDER THAT WHEN THE LEARNED CIT(A) WAS OF AN ADVERSE VIEW IN THE MATTER, HE OUGHT TO HAVE , BUT DID NOT PUT THE ASSESSEE ON NOTICE TO SHOW CAUSE WHY THE SAID ENHANCEMENT OF ` 81,05,294/ - , COMPRISING THE TOTAL OF ACTUAL PAYMENTS OF HANDLING CHARGES AND SWEEPING LABOUR CHARGES, UNDER SECTION 40A(3) SHOULD NOT BE MADE IN ITS HANDS. 5.3.4 AS PER T HE PROVISIONS OF SECTION 251(1) ( A), THE LEARNED CIT(A) WHILE DISPOSING AN APPEAL AGAINST AN ORDER OF ASSESSMENT, SHALL HAVE THE POWERS TO CONFIRM, REDUCE, ENHANCE OR ANNU L THE ASSESSMENT . S ECTION 251(2) OF THE ACT STIPULATES THAT THE LEARNED CIT(A) SHALL NOT ENHANCE AN ASSESSMENT, OR A PENALTY, ETC. UNLESS THE APPELLANT HAS HAD A REASONABLE OPPORTUNITY OF SHOWING CAUSE AGAINST SUCH ENHANCEMENT. AS PER THE RELEVANT P ORTION OF THE LEARNED CIT(A)S FINDING IN THE IMPUGNED ORDER EXTRACTED ABOVE (SUPRA), WE FIND THAT THE LEARNED CIT(A) DID NOT AFFORD THE ASSESSEE IN T HE CASE ON HAND ANY OPPORTUNITY WHATSOEVER, LET ALONE REASONABLE OPPORTUNITY OF SHOWING CAUSE AGAINST SUC H ENHANCEMENT AND IN OUR CONSIDERED VIEW THIS FAILURE ON THE PART OF THE LEARNED CIT(A) BEING IN VIOLATION OF THE BASIC PRINCIPLES OF NATURAL JUSTICE WOULD RENDER HIS ENHANCEMENT UNSUSTAINABLE IN LAW. WE, THEREFORE, IN THE INTEREST OF SUBSTANTIAL JUSTICE S ET ASIDE THE LEARNED CIT(A)S FINDING ENHANCING THE ASSESSEES INCOME BY ` 81,05,294/ - UNDER SECTION 40A(3) OF THE ACT, COMPRISING THE TOTAL ACTUAL PAYMENT OF HANDLING CHARGES PLUS SWEEPING LABOUR CHARGES AND RESTORE THE MATTER TO HIS FILE FOR DE NOVO CONSI DERATION AND ADJUDICATION THERE ON AFTER AFFORDING THE ASSESSEE ADEQUATE OPPORTUNITIES TO MAKE SUBMISSIONS, FILE DETAILS, DOCUMENTS, ETC. REQUIRED IN THIS REGARD. IT IS ORDERED ACCORDINGLY. CONSEQUENTLY, GROUND NO. 1 OF THE ASSESSEES APPEAL IS TREATED AS ALLO WED ONLY FOR STATISTICAL PURPOSES. 6 . GROUND NO. 2 - DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT 6.1 IN THIS GROUND THE ASSESSEE CONTENDS THAT THE AUTHORITIES BELOW ERRED IN DISALLOWING LEGAL FEES OF ` 10,27,565/ - , AUDIT FEES OF ` 55,000/ - AND PROFE SSIONAL FEES UNDER SECTION 40( A) (IA) OF THE ACT. IT IS CONTENDED THAT ITA NO. 6717/MUM/2013 M/S. VILAS TRANSPORT COMPANY 11 SINCE THESE FEES ARE ALREADY PAID DURING THE YEAR AND THE PARTIES TO WHOM THESE FEES HAVE BEEN PAID HAVE DISCLOSED THESE AMOUNTS IN THEIR RETURNS OF INCOME , THE ABOVE EX PENSES BE ALLOWED AS THE DISALLOWANCE OF ` 13,39,322/ - IN THIS REGARD BE DELETED AS IT IS UNSUSTAINABLE. 6.2 THE LEARNED D.R. PLACED STRONG RELIANCE ON THE FINDING OF THE LEARNED CIT(A) IN THE IMPUGNED ORDER. ACCORDINGLY TO THE LEARNED D.R., THE AO NOTICED THAT THE ASSESSEE HAD PAID THE AFORESAID EXPENSES COMPRISING LEGAL FEES, AUDIT FEES AND PROFESSIONAL FEES WITHOUT DEDUCTION OF TAX AT SOURCE AS REQUIRED UNDER CHAPTER XVII OF THE ACT AND THEREFORE INVOKED THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AND DISALLOWED THE EXPENDITURE CLAIMED BON THE AFORESAID EXPENSES AMOUNTING TO ` 13,39,322/ - . IT IS SUBMITTED THAT THE AFORESAID DECISION WAS CORRECTLY UPHELD BY THE LEARNED CIT(A). 6.3.1 WE HAVE HEARD THE LEARNED D.R. FOR REVENUE AND PERUSED AND CAREFULLY CONS IDERED THE MATERIAL ON RECORD. THE ISSUE BEFORE US IS WITH RESPECT TO THE DISALLOWANCE OF ` 13,39,322/ - MADE AND SUSTAINED BY THE AUTHORITIES BELOW UNDER SECTION 40(A)(IA) OF THE ACT IN RESPECT OF PAYMENTS MADE BY THE ASSESSEE FOR AUDIT FEES, LEGAL FEES AND PROFESSIONAL FEES FOR NON - DEDUCTION OF TAX AT SOURCE ON SUCH PAYMENTS. AT THE OUTSET IT MUST BE MENTIONED THAT WHILE MAKING THIS DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT IT IS SEEN THAT NEITHER THE AO NOR THE LEARNED CIT(A) HAS MENTIONED UNDER WHIC H SECTION OF THE ACT THE ASSESSEE WAS REQUIRED TO DEDUCT TAX AT SOURCE ON THE AFORESAID PAYMENTS. MOREOVER, WE OBSERVE THAT, THE ASSESSEES CONTENTIONS RECORDED AT PARA 5.2 OF THE IMPUGNED ORDER THAT NO DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT WAS C ALLED FOR SINCE THE PARTIES TO WHOM SUCH PAYMENTS WERE MADE DURING THE YEAR, I.E. ADVOCATE, LAWYER, ETC. HAD INCLUDED THE SAME IN THEIR RESPECTIVE RETURNS OF INCOME; WAS ALSO BRUSHED ASIDE WITHOUT BEING ADD RESSED BY THE LEARNED CIT(A) WHILE RECORDING HIS FINDING. WE, THEREFORE, IN THE INTEREST OF EQUITY AND JUSTICE SET ASIDE THE FINDINGS OF THE AUTHORITIES BELOW AND RESTORE THIS ISSUE TO THE FILE OF THE LEARNED CIT(A) FOR DE NOVO EXAMINATION AND ADJUDICATION THEREON IN ACCORDANCE WITH LAW BY WAY OF A SPEAK ING ORDER , AFTER AFFORDING ITA NO. 6717/MUM/2013 M/S. VILAS TRANSPORT COMPANY 12 BOTH THE AO AND THE ASSESSEE, ADEQUATE OPPORTUNITY OF BEING HEARD AND TO FILE DETAILS/SUBMISSIONS REQUIRED IN THIS REGARD. IT IS ACCORDINGLY ORDERED. CONSEQUENTLY, GROUND NO. 2 OF THE ASSESSEES APPEAL IS TREATED AS ALLOWED FOR ST ATISTICAL PURPOSES. 7 . GROUND NO. 3 - DISALLOWANCE OF CLEARING AND FORWARDING CHARGES 7.1 IN THIS GROUND, THE ASSESSEE CONTENDS THAT THE AUTHORITIES BELOW HAVE ERRED IN DISALLOWING ` 1,95,395/ - BEING 30% OF CLEARING AND FORWARDING EXPENSES AMOUNTING TO ` 6,51,318/ - . IT IS PRAYED THAT THIS DISALLOWANCE BE DELETED, SINCE THE NATURE OF THE EXPENSES ARE SUCH THAT IT HAS TO BE PAID IN CASH TO DOCK AUTHORITIES DURING THE COURSE OF ITS BUSINESS ACTIVITY. 7.2 THE LEARNED D.R. PLACED STRONG RELIANCE ON THE DECISION OF THE AUTHORITIES BELOW. ACCORDING TO THE LEARNED D.R., THESE CASH EXPENSES CLAIMED TO BE INCURRED FOR CLEARING AND FORWARDING ACTIVITIES, IN THE NATURE OF ENTRY PERMIT CHARGES FOR THE ASSESSEES EMPLOYEES/LABOURERS FOR ENTRY INTO BOMBAY DOCKS AND JNPT AT NAVA SHEVA FOR WORK ARE SUPPORTED ONLY BY SELF MADE VOUCHERS. THE LEARNED D.R. SUBMITS THAT CONSIDERING THE NATURE OF BUSINESS AND THE FACT OF THESE EXPENSES CLAIMED BEING SUPPORTED ONLY BY SELF MADE VOUCHERS, THE AUTHORITIES BELOW HAVE BEEN MORE THAN REASON ABLE IN ALLOWING 7 0% OF THE EXPENDITURE CLAIMED AND IN ONLY DISALLOWING 30% THEREOF. 7.3 WE HAVE HEARD THE LEARNED D.R. FOR REVENUE AND PERUSED AND CAREFULLY CONSIDERED THE ORDERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE WITH THE FACT THAT THE CASH EX PENDITURE OF ` 6,51,318/ - CLAIMED TO HAVE BEEN INCURRED FOR CLEARING AND FORWARDING ACTIVITIES OF THE EMPLOYEES/ LABOURERS OF THE ASSESSEE FIRM AT BOMBAY DOCKS AND JNPT, NAVA SHEVA ARE ONLY SUPPORTED BY SELF MADE VOUCHERS. IN OUR VIEW, THE AUTHORITIES BELOW APPEAR TO HAVE BEEN REASONABLE IN ALLOWING 70% OF THE EXPENDITURE CLAIMED AND IN DISALLOWING ONLY 30% THEREOF, CONSIDERING THE BUSINESS ACTIVITIES OF THE ASSESSEE. FROM THE DETAILS ON RECORD, WE FIND THAT APART FROM RAISING THIS GROUND OF APPEAL, THE ASSE SSEE HAS FAILED TO PLACE ON RECORD BEFORE US ANY MATERIAL EVIDENCE TO CONTROVERT THE FACTUAL FINDINGS ITA NO. 6717/MUM/2013 M/S. VILAS TRANSPORT COMPANY 13 RENDERED BY THE AUTHORITIES BELOW ON THIS ISSUE. IN THIS VIEW OF THE MATTER, WE FIND NO REASON TO INTERFERE WITH OR DEVIATE FROM THE FINDING RECORDED BY T HE LEARNED CIT(A) IN THE IMPUGNED ORDER AND THEREFORE UPHOLD THE DISALLOWANCE OF 30% OF CLEARING AND FORWARDING EXPENSES. CONSEQUENTLY, GROUND NO. 3 OF THE ASSESSEES APPEAL IS DISMISSED. 8 . GROUND NO. 4 OF THE ASSESSEES APPEAL BEING GENERAL IN NATURE, NO AD JUDICATION IS CALLED FOR THEREON AND CONSEQUENTLY THE SAME IS DISMISSED AS INFRUCTUOUS. 9 . IN THE RESULT, THE ASSESSEES APPEAL FOR A.Y. 2009 - 10 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD JUNE , 2016. SD/ - SD/ - ( SANDEEP GOSAIN ) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 3 RD JUNE , 2016 COPY TO: 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE CIT(A) - 24 , MUMBAI 4 . THE CIT - 13 , MUMBAI 5 . THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.