MARRIOTT PROPERTIES AND DEVELOPERS P.LTD, MUMBAI V. ITO 8(2)(3), MUMBAI

ITA 7517/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4518 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 03-11-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 17-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K DHONDIAL J
• Assessee Lawyers: NIYATI D MEHTA
• Keywords: Business expenditure
• Section: 28

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI , ! ' , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, ITA NO.7517/MUM/2014 ASSESSMENT YEAR:2010-11 M/S MARRIOTT PROPERTIES AND DEVELOPERS PVT. LTD. 108, 7 BUNGALOW, SHIVAM APARTMENTS, J. P. ROAD, VERSOVA, ANDHERI (WEST), MUMBAI-400053 / VS. ITO-8(2)(3), MUMBAI, / ASSESSEE / REVENUE P.A. NO. AAFCM8465M $ % & / ASSESSEE BY MISS NIYATI D. MEHTA $ % & / REVENUE BY SHRI A.K.DHONDIAL JCIT-DR / DATE OF HEARING 04/01/2016 & / DATE OF ORDER: 04/01/2016 & / O R D E R THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DA TED 23/09/2014 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ONLY GROUND RAISED IN THIS APPEAL PERTAINS TO D ISALLOWING 2 EXPENSES DEBITED TO THE PROFIT & LOSS ACCOUNT I.E. ACCOUNTING CHARGES (RS.48,000/-), LEAVE AND LICENSE EXPENSES (RS.1,36,230/-), PROFESSIONAL FEE (RS.59,144/-) AND PRELIMINARY EXPENSES OF RS.3,500/-. 2. DURING HEARING OF THIS APPEAL, THE LD. COUNSEL FOR THE ASSESSEE MISS NIYATI D. MEHTA SUBMITTED THAT BU SINESS EXPENSES ARE ALLOWABLE AGAINST INCOME FROM BUSINESS , U/S 28 OF THE ACT AS THE ASSESSEE COMPANY CARRIED OUT ITS BUSINESS ACTIVITY AS PER MOU AND ALL THE ACTIVITIES/EXPENSES WERE ROUTED THROUGH PROFIT & LOSS ACCOUNT OR BALANCE SHE ET. IT WAS ALSO EXPLAINED THAT SALARY REMUNERATION TO ACCOUNTI NG STAFF, FEE FOR PROFESSIONAL WORK OF ROC, DOCUMENTS REGISTR ATION CHARGES AND PRELIMINARY EXPENSES WERE ACTUALLY INCU RRED DURING REGULAR COURSE OF BUSINESS FOR BUSINESS PURP OSES, THUS, HAS TO BE ALLOWED. ON THE OTHER HAND, THE LD . DR, SHRI A.K. DHONDIAL, DEFENDED THE DISALLOWANCE BY INVITIN G MY ATTENTION TO THE REASONING AND THE FACTS CONTAINED IN THE IMPUGNED ORDER. 2.1. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACT S, IN BRIEF, ARE THAT FROM THE PROFIT & LOSS ACCOUNT OF THE ASSE SSEE COMPANY, THE LD. ASSESSING OFFICER OBSERVED THAT TH E ASSESSEE CREDITED RS.1,89,000/- ON ACCOUNT OF LEAVE AND LICE NSE CHARGES, RS.59,144/- AS PROFESSION CHARGES LIKE AUD IT, UPLOADING ROC FORMS/EXPENSES AND RS.17,978/- AS ROC EXPENSES ETC. THE LD. ASSESSING OFFICER DISALLOWED THE SAME. 3 ON APPEAL, THE LD. COMMISSIONER OF INCOME TAX (APPE ALS) AFFIRMED THE STAND OF THE LD. ASSESSING OFFICER. I T IS NOTED THAT THE LD. ASSESSING OFFICER AS WELL AS THE LD. C OMMISSIONER OF INCOME TAX (APPEALS) DISALLOWED THE EXPENSES ON TECHNICAL GROUNDS. AT THE SAME TIME, THE ASSESSING OFFICER A S WELL AS THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS NO T DISPUTED INCURRING OF EXPENSES, THEREFORE, BUSINESS EXPENDITURE HAS TO BE ALLOWED. IT IS NOT THE CASE OF THE REVENUE THAT EITHER THE CLAIM OF THE ASSESSEE IS BO GUS OR THE SAME WERE NOT INCURRED BY THE ASSESSEE. IT IS NOTIC ED THAT THESE EXPENSES WERE INCURRED FOR BUSINESS PURPOSES IN NORMAL COURSE OF BUSINESS. BUSINESS HAS BEEN DEFIN ED IN SECTION 2(13) OF THE ACT WHICH INCLUDES ANY TRADE, COMMERCE OR MANUFACTURE OR ANY ADVENTURE OR CONCERN, IN THE NATURE OF TRADE, COMMERCE OR MANUFACTURE. THESE WORDS ARE WID E IMPORT, THE UNDERLYING IDEA BEING OF CONTINUOUS EXE RCISE OF AN ACTIVITY. THE NATURE OF EXPENSES, CLAIMED BY TH E ASSESSEE, LIKE PROFESSION FEES, LEGAL EXPENSES, STAMP DUTY, L EASE AND LICENSES EXPENSES, ROC EXPENSES ARE NECESSARY FOR S MOOTH RUNNING OF THE BUSINESS. A BUSINESS IS COMMENCED AS SOON AS AN ESSENTIAL ACTIVITY OF THAT BUSINESS STARTED. SINCE, THE ASSESSEE WAS DOING HIS BUSINESS IN ACCORDANCE WITH MOU AND NOT DISPUTED BY THE REVENUE, THEREFORE, THE EXP ENSES SO INCURRED BY THE ASSESSEE SEEMS TO BE JUSTIFIED, CON SEQUENTLY, THE SAME ARE ALLOWED. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. 4 THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN T HE PRESENCE OF LD. REPRESENTATIVE OF BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 04/01/2016. SD/- (JOGINDER SINGH) ! ' / JUDICIAL MEMBER MUMBAI; DATED : 04/01/2016 F{X~{T? P.S / ! & $ )!*+ ,&+-* / COPY OF THE ORDER FORWARDED TO : 1. '#$%& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. ) ) * ( '#$ ) / THE CIT, MUMBAI. 4. ) ) * / CIT(A)- , MUMBAI 5. -./ ' , ) '#$ ' 1 , / DR, ITAT, MUMBAI 6. /2 3$ / GUARD FILE. & / BY ORDER, (-# ' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI