SANTOSH B. POWLE, MUMBAI V. ACIT 18(3), MUMBAI

ITA 7498/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9895 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 20-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR LD
• Assessee Lawyers: NISHIT GANDHI LD
• Section: 143(3)

Judgement Text

ITA NO 7498/MUM/2016 SANTOSH B. POWLE ASSESSMENT YEAR 2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 7498/MUM/2016 ( / ASSESSMENT YEAR: 2009-10) SANTOSH B. POWLE 101,10 TH FLOOR PARSHURAM NIKETAN SHIVAJI PARK, MAHIM MUMBAI 400 016 / VS. ASSISTANT COMMISSIONER OF INCOME TAX 18(3) MUMBAI ! ./ ./PAN/GIR NO. AAJPP-1107-A ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : NISHIT GANDHI, LD. AR REVENUE BY : SUMAN KUMAR, LD. DR / DATE OF HEARING : 17/08/2017 / DATE OF PRONOUNCEMENT : 06/09/2017 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2009-10 ASSAILS THE ORDER OF LD. COMMISSIONER OF IN COME TAX ITA NO 7498/MUM/2016 SANTOSH B. POWLE ASSESSMENT YEAR 2009-10 2 (APPEALS)-33 [CIT(A)], MUMBAI DATED 13/10/2016 QUA CONFIRMATION OF CERTAIN ADDITIONS / DISALLOWANCES. 2.1 BRIEFLY STATED THE ASSESSEE BEING RESIDENT INDIVIDUAL ENGAGED IN THE PROFESSION AS CHARTERED ACCOUNTANT UNDER PROPRIETORSHIP CONCERN NAMELY SANTOSH B.POWLE & CO. WAS ASSESSED U/S 143(3) FOR IMPUGNED AY ON 29/12/2011 AT RS.93,24,140/- AFTER CERTAIN AD DITIONS / DISALLOWANCES AS AGAINST RETURNED INCOME OF RS.80,6 6,760/- FILED BY THE ASSESSEE ON 14/09/2009. THE ASSESSEE, INTER-ALIA, HAS SUFFERED CERTAIN ADDITIONS AGAINST INTEREST, TELEPHONE AND CAR EXPENSES , WHICH ARE THE SUBJECT MATTER OF THIS APPEAL. 2.2 DURING ASSESSMENT PROCEEDINGS, IT WAS NOTED THA T THE ASSESSEE CLAIMED INTEREST & BANK CHARGES OF RS.3,74,188/- & RS.28,474/- RESPECTIVELY AGAINST BANK OVERDRAFT LOAN. THE ASSESSEE JUSTIFIED THE SAME ON THE PREMISES THAT THE SAID LOAN WAS TAKEN T O MEET THE WORKING CAPITAL REQUIREMENT OF THE ASSESSEE AND TO TAKE CAR E OF THE PERSONAL EXPENSES SINCE IT WAS NOT HAVING REGULAR STREAM OF INCOME. HOWEVER, NOT CONVINCED, LD. AO DISALLOWED THE SAME. 2.3 THE ASSESSEE SUFFERED ANOTHER DISALLOWANCE OF R S.70,979/- AGAINST MOBILE EXPENSES WHICH WAS HELD IN THE NAME OF ASSESSEES WIFE. SIMILARLY, ANOTHER ADHOC DISALLOWANCE OF 20% WAS MADE AGAINST CAR AND TELEPHONE EXPENSES AGGREGATING TO RS.3,66,247/- WHICH CAME TO RS.73,249/-, TO ACCOUNT FOR PERSONAL ELEMENT . 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITHO UT ANY SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 13/10/2 016 WHERE THE LD. CIT(A) CONFIRMED THE STAND OF LD. AO SINCE THE ASSE SSEE COULD NOT ITA NO 7498/MUM/2016 SANTOSH B. POWLE ASSESSMENT YEAR 2009-10 3 SUBSTANTIATE THE FACT THAT THE EXPENSES WERE INCURR ED FOR PROFESSIONAL PURPOSES. AGGRIEVED, THE ASSESSEE IS IN FURTHER APP EAL BEFORE US. 4. THE LD. COUNSEL FOR ASSESSEE [AR] REITERATING TH E CONTENTIONS AS RAISED BEFORE LOWER AUTHORITIES CONTESTED THE ADDIT IONS WHEREAS LD. DR JUSTIFIED THE ADDITIONS SINCE THE ASSESSEE COULD NO T ESTABLISH THE FACT THAT THE EXPENSES WERE INCURRED FOR PROFESSIONAL PURPOSE S AND THE ADDITION WAS QUITE FAIR & REASONABLE. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD INCLUDING FINANCIAL STATEMENTS F OR THE RELEVANT AY PRODUCED BEFORE US. A PERUSAL OF THE BALANCE SHEET AT YEAR-END REVEALS THAT AGGREGATE OF CURRENT LIABILITIES, SUNDRY CREDITORS AND ADVANCES WELL EXCEEDED THE AGGREGATE OF CURRENT ASSETS, SUNDRY DEBTORS AND LOANS & ADVANCES , WHICH WEAKENS THE ARGUMENT OF THE ASSESSEE THAT T HE LOAN WAS OBTAINED TO MEET THE WORKING CAPITAL REQUIREMEN T OF THE ASSESSEE. FURTHER, IT IS ADMITTED FACT THAT THE ASSESSEE RECE IVED MAJORITY OF PROFESSIONAL RECEIPTS AT THE BEGINNING OF THE YEAR. THEREFORE, NO RELIEF COULD BE GRANTED TO THE ASSESSEE ON THIS ACCOUNT AN D HENCE, THE SAME IS CONFIRMED. SIMILARLY, THE MOBILE EXPENSES OF RS. 70,979/- WERE CLAIMED AGAINST MOBILE NUMBER OF THE ASSESSEES WIFE AND IT NOWHERE EMANATES THAT THE ASSESSEES WIFE HELPED IN ASSESSEES PROFE SSION IN ANY MANNER AND THEREFORE, THIS ADDITION ALSO STANDS CONFIRMED. HOWEVER, 20% ADHOC DISALLOWANCE AGAINST CAR AND TELEPHONE EXPENSES IS ON THE HIGHER SIDE. WE RESTRICT THE SAME TO THE EXTENT OF 10%. 6. RESULTANTLY, THE ASSESSEES APPEAL STANDS PARTLY ALLOWED. ITA NO 7498/MUM/2016 SANTOSH B. POWLE ASSESSMENT YEAR 2009-10 4 ORDER PRONOUNCED IN THE OPEN COURT ON 06 TH SEPTEMBER, 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 06. 09.2017 SR.PS:- THIRUMALESH ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. , ( ) / THE CIT(A) 4. , / CIT CONCERNED 5. $'. , . , / DR, ITAT, MUMBAI 6. / / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI