K STEAMSHIP AGENCIES P. LTD, MUMBAI V. ACIT CEN CIR-39, MUMBAI

ITA 6894/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2129 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-05-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 03-12-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM GAUR
• Assessee Lawyers: HARISH SHAH
• Keywords: Set aside
• Section: 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI. BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER. I.T.A. 6894 /MUM/2008. ASSESSMENT YEAR : 2006-07. K. STEMSHIP AGENCIES P. LTD., AS STT. COMMISSIONER OF 16, BANK STREET, FORT, VS. INCOME TAX, CEN. CIR-39. MUMBAI. MUMBAI. PAN AAACK2904Q APPELLANT RESPONDENT APPELLANT BY : SHRI HARISH SHAH. RESPONDENT BY : SHRI VIKRAM GAUR. O R D E R PER J. SUDHAKAR REDDY, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE CIT(APPEALS)-CENTRAL-VIII, MUMBAI DAT ED 15-09-2008 FOR THE ASSESSMENT YEAR 2006-07 ON THE FOLLOWING GROUND S : 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD. COMMISSIONER OF INCOME TAX (A), CENTRAL VII, MUMBAI HAS ERRED IN CONFIRMING DISALLOWANCE OF RS.5,36,300/- BY APPLYIN G PROVISION OF SECTION 37(1) R.W. EXPLANATION THEREOF. 2. THE LD. C.I.T.(A) FAILED TO APPRECIATE THAT EXPENSE S HAD BEEN INCURRED BY THE APPELLANT AS AN INCENTIVE TO THE LA BOUR FOR INCREASE IN PRODUCTIVITY AND FOR SPEEDING OF THE WORK AND THAT SUCH EXPENSES DO NOT STAND COVERED BY EXPLANATION (1) TO SECTION 37. 3. THE LD. C.I.T.(A) IN CONFIRMING DISALLOWANCE RELIE D ON THE ORDER OF HIS PREDECESSOR IN YOUR APPELLANTS CASE FOR ASSESS MENT YEAR 2005- 06 IN WHICH HE RELIED THE C.I.T.(A)S ORDER OF M/S N. JAMNADAS & 2 CO. WHEREIN FACTS AND CIRCUMSTANCES OF THE CASE WER E ENTIRELY DIFFERENT. 4. THE DECISION OF THE C.I.T.(A) IS CONTRARY TO THE DE CISION OF THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH IN THE CASE OF NEW DHOLERA SHIPPING & TRADING CO. LTD. VS. ASST. COMMI SSIONER OF INCOME-TAX (INV.), CIRCLE-2(1), MUMBAI FOR ASSESSME NT YEAR 1988- 89 (I.T.A. NO.9205/BOM/91), ASSESSMENT YEAR 1989-90 (I.T.A. NO. 8825/BOM/92) & ASSESSMENT YEAR 1991-92 (I.T.A. NO. 48M/95). THE APPELLANT PRAYS THAT THE EXPENSES OF RS.5,36,30 0/- IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND LOOKING TO THE NA TURE OF BUSINESS ARE CLEARLY ALLOWABLE IN LAW. 5. THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER BE DIRECTED TO DELETE THE AFORESAID DISALLOWANCE OF RS.5,36,300/- AND MOD IFY THE ASSESSMENT ACCORDINGLY. 6. EACH OF THE ABOVE GROUNDS OF APPEAL ARE INDEPENDENT AND WITHOUT PREJUDICE TO EACH OTHER 7. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, TO AME ND OR WITHDRAW ALL OR ANY OF THE GROUNDS OF APPEAL HEREIN AND TO SUBMI T SUCH STATEMENTS, DOCUMENTS AND PAPERS AS MAY BE CONSIDERED NECESSAR Y EITHER AT OR BEFORE THE TIME OF HEARING OF THE APPEAL. 2. AFTER HEARING RIVAL CONTENTIONS, WE FIND THAT T HE CIT(APPEALS) HAS AT PAGE 3 PARA 2.6 RELIED ON THE ORDER PASSED BY HIS PREDECESSOR IN THE ASSESSEES CASE FOR THE ASSESSME NT YEAR 2005-06, ORDER DATED 22-08-2007, AND HELD THAT THE INCREASE OF DIS ALLOWANCE BY 25% WAS JUSTIFIED. IT IS BROUGHT TO OUR NOTICE THAT THE A-1 BENCH OF THE MUMBAI TRIBUNAL IN I.T.A. NO. 6573/MUM/2007, ORDER DATED 1 3 TH MAY, 2009, HAS FOLLOWED THE DECISION OF THE TRIBUNAL IN THE ASSESS EES OWN CASE FOR THE ASSESSMENT YEAR 2004-05 IN I.T.A. NO. 5453/MUM/2007 AND RESTORED THE MATTER BACK TO THE FILE OF THE AO FOR READJUDICATIO N ON THE BASIS OF 3 DIRECTIONS GIVEN FOR ASSESSMENT YEARS 2002-03 AND 2 003-04. RESPECTFULLY FOLLOWING THE SAME, WE SET ASIDE THIS APPEAL TO THE FILE OF THE AO. 3. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 14 TH DAY OF MAY, 2010. SD/- SD/- (VIJAY PAL RAO) (J. SUDHAKAR REDDY) JUDICIAL MEMBER. ACCOUNTANT MEMBER. MUMBAI, DATED : 14 TH MAY, 2010. WAKODE COPY FORWARDED TO : 1. APPELLANT. 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, A-BENCH. (TRUE COPY) BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI BENCHES, MUMBAI.