OMPRAKASH & CO., MUMBAI V. DCIT CEN CIR 31, MUMBAI

ITA 6770/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83497 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 06-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K KARDA M
• Keywords: Business expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ./I.T.A. NO.6770/M/2012 ( AY: 2009 - 2010 ) OMPRAKASH & CO, LAALASIS, PLOT NO.219, 11 TH ROAD, CHEMBUR, MUMBAI - 400 071. / VS. DCIT - CENTRAL CIRCLE - 31, R.NO.409, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400 020. ./ PAN : AAAO1648Q ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI J.P. BAIRAGRA / RESPONDENT BY : SHRI A.K. KARDAM / DATE OF HEARING :6 .8.2014 / DATE OF PRONOUNCEMENT :6 .8.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT (A) - 40, MUMBAI DATED 22.8.2012 FOR THE ASSESSMENT YEAR 2009 - 2010. 2. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: THE LD CIT (A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 12,69,351/ - BEING 75% OF ADMINISTRATIVE EXPENDITURE ON THE GROUND THAT THE SAME SHOULD BE CAPITALIZED TOWARDS VERSOVA PROJECT WHICH WAS UNDER CONSTRUCTION DURING THE YEAR. 3. THE SOLITARY ISSUE INVOLVED IN THIS APPEAL IS THAT THE CIT (A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 12,69,351/ - BEING 75% OF THE ADMINISTRATIVE EXPENSES. IN THIS REGARD, REVENUE OFFICERS ARE OF THE OPINION THAT THE ADMINISTRATIVE EXPENSES COMMONLY INCURRED FOR NOT ALLOCABLE TO ANY PROJECT OF THE ASSESSEE SHOULD BE CAPI TALIZED TOWARDS VERSOVA PROJECT. AT THE OUTSET, SHRI J.P. BAIRAGRA, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THE ASSESSEE UNDERTOOK COUPLE OF BUILDING PROJECTS NAMELY KUKREJA HEIGHTS AND FOUR BUNGALOWS SITE AT VERSOVA. DURING THE YEAR, ASSESSEE SHOWED THE BOTH PROJECTS AS WORK - IN - PROGRESS. THE SIMILAR TREATMENT WAS GIVEN IN THE PRECEDING ASSESSMENT YEAR 2007 - 2008 ALSO. LD COUNSEL FOR THE 2 ASSESSEE BROUGHT OUR ATTENTION TO PAGE 3 OF THE PAPER BOOK (P & L ACCOUNT FOR THE YEAR UNDER CONSIDERATION) AND MEN TIONED THAT THE TOTAL EXPENDITURE CLAIMED AS BUSINESS LOSS RELATES TO THE SALARIES AND OTHER OFFICE RELATED EXPENSES AND THE SAME ARE NOT ALLOCABLE TO ANY OF THE SAID TOW PROJECTS. HE ALSO BROUGHT OUR ATTENTION TO PAGE 5 OF THE PAPER BOOK (P & L ACCOUNT FOR THE EARLIER YEAR) AND MENTIONED THAT THE ASSESSEE INCURRED RS. 16.74 LAKHS ON IDENTICAL EXPENSES AND THE ASSESSING OFFICER ALLOWED THE SAME AS BUSINESS EXPENSES OF THE ASSESSEE. FURTHER, HE FILED A COPY OF THE ASSESSMENT ORDER TO DEMONSTRATE THAT N O ADDITION WAS MADE IN THE AY 2008 - 2009. HE ALSO MENTIONED THAT THE ASSESSING OFFICER IS ONE AND THE SAME FOR BOTH THE AYS AND HE HAS TAKEN A DIFFERENT LINE FOR MAKING ASSESSMENT WHEN THE FACTS ARE IDENTICAL. FINALLY, HE DEMONSTRATED THAT THE ASSESSING O FFICER WHILE ACCEPTING THE CLAIM OF THE ASSESSEE IN THE ASSESSMENT YEAR 2008 - 2009 HAS REJECTED CLAIM OF THE ASSESSE FOR THE CURRENT ASSESSMENT YEAR IS NOT SUSTAINABLE IN LAW IN VIEW OF THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF COMMISSIONER O F INCOME - TAX VS GOPAL PUROHIT , WHICH APPROVED THE MUMBAI HC JUDGMENT (228 CTR 582). 4. ON THE OTHER HAND, LD DR RELIED ON THE ORDERS OF THE AO AND THE CIT (A). 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS T HE RELEVANT MATERIAL PLACED BEFORE US. ON HEARING BOTH THE PARTIES, WE FIND THAT THE ASSESSING OFFI CER HAS TAKEN A DIVERGENT STAND ON AN IDENTICAL ISSUE IN TWO ASSESSMENT YEARS WHEN THE FACTS ARE COMPARABLE . WE CANNOT APPRECIATE THIS KIND OF APPROACH OF T HE AO , MORE SO, WHEN THE EXPENSES IN QUESTION ARE UNDISPUTEDLY OF THE COMMON NATURE AS EVIDENT FROM THE CLAIMS IN THE P & L ACCOUNT S OF BOTH THE YEARS . THEREFORE, WE ARE OF THE OPINION, THE ORDER OF THE CIT (A) NEEDS TO BE REVERSED ON THE ISSUE OF CONSISTENCY WITHOUT GOING INTO THE MERITS OF THE CASE. ACCORDINGLY, GROUND RAISED BY THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH AUGUST, 2014. SD/ - SD/ - (AMIT SHUKLA) (D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 6 /08/2014 3 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI