ACIT 19(3), MUMBAI V. BACHOOALI AQEEL ALIAS AQEEL, MUMBAI

ITA 8730/MUM/2011

• Counselvise Citation: 873019914 RSA 2011
• Duration Of Justice: 3 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 01-07-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 26-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK BATRA SR
• Section: 143(3)

Judgement Text

1 ITA NO.8730/MUM/2011 (A.Y.2006-07) , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B MUMBAI . . , . . , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND SHRI B.R.BASKARAN, ACCOUNTANT MEMBER ITA NO.8730/MUM/2011 (A.Y.2006-07) ACIT - 19(3) ROOM NO.305, 3 RD FLOOR PIRAMAL CHAMBERS, PAREL MUMBAI-400 012. GIR NO./PAN : AACPB 9807 G (APPELLANT ) VS. BACHOOALI AQEEL ALIAS AQEEL , 101, NEPTUNE II, 1 ST FLOOR, NARGIS DUTT ROAD, PALI HILL, BANDRA (W) MUMBAI-400 050. (RESPONDENT) APPELLANT BY : SHRI VIVEK BATRA SR. AR RESPONDENT BY : NONE DATE OF HEARING : 07/01/2015 DATE OF PRONOUNCEMENT : 07/01/2015 ORDER PER I.P.BANSAL, J.M: THIS APPEAL IS FILED BY THE REVENUE . IT IS DIRECTE D AGAINST THE ORDER PASSED BY CIT(A) DATED 19/10/2011 FOR ASSESSMENT YEAR 2006-07 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS :- (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE OF EXPENS ES ON ACCOUNT OF JUNIOR ARTIST FEES AT RS. 32,150/- BEING 10% AS AGAINST OF RS. 2,25,050/- BEING 70% DISALLOWED BY ASSESSING OFFICER, IGNORING THE F ACT THAT THE ASSESSEE HAS FAILED TO ESTABLISH THAT THE SAID EXPENSE WERE INCU RRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS BY SUBMITTING THE SUPPORTIN G DOCUMENTARY EVIDENCES DURING THE COURSE OF ASSESSMENT PROCEEDINGS. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE ON ACCOUN T OF BUSINESS, TRAVEL & PROMOTION EXPENSES AT RS. 2,56,034/- BEING 10% AS A GAINST OF RS. 2 ITA NO.8730/MUM/2011 (A.Y.2006-07) 12,87,173/- BEING 50% DISALLOWED BY ASSESSING OFFIC ER, IGNORING THE FACT THAT THE ASSESSEE HAS FAILED TO ESTABLISH THAT THE SAID EXPENSES WERE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS BY SUBMITTING THE SUPPORTING DOCUMENTARY EVIDENCES DURING THE COURSE OF ASSESSME NT PROCEEDINGS. (3) THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE AO BE RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY.' 2. THE ASSESSEE IS DERIVING INCOME FROM BUSINESS/PR OFESSION BY VIRTUE OF BEING A DISC JOCKEY AND MUSIC PERFORMER. THE ASSESSEE CLAIM ED A SUM OF RS.3,21,500/- TOWARDS JUNIOR ARTIST FEE. FROM THE DETAILS FURNISHED THE AO NOTICED THAT THESE WERE SELF MADE VOUCHERS. AO ASKED THE ASSESSEE TO PRODUCE JUNIOR A RTIST WHICH WERE NOT PRODUCED, THEREFORE, DISALLOWED 70% OF THE EXPENSES AND IN TH IS MANNER A SUM OF RS.2,25,050/- WAS DISALLOWED. 3. SIMILARLY, OUT OF BUSINESS, TRAVEL AND PROMOTION EXPENSES 50% DISALLOWANCE WAS MADE WHICH WAS CALCULATED AT RS.12,80,173/-. TOTAL EXPENSES INCURRED ON THESE ITEMS WAS A SUM OF RS.25,60,346/-. AO ISSUED SUMMONS TO T HE ASSESSEE AND ASSESSEE DID NOT ATTEND. THEREFORE, AO MADE THE DISALLOWANCE. 3.1 BEFORE LD. CIT(A) IT WAS SUBMITTED THAT THE ASS ESSEE COULD NOT ATTEND BEFORE THE AO AS HE WAS PERFORMING ABROAD AND AS PER REQUIREME NT OF HIS PROFESSION HE HAS TO TRAVEL A LOT ALONGWITH GROUP AND, THEREFORE, EXPEN SES COULD NOT BE DISALLOWED TO THE EXTENT OF 50%. CONSIDERING THE DETAILED SUBMISSIONS FILED BY THE ASSESSEE THE LD. CIT(A) HAS COME TO A CONCLUSION THAT DISALLOWANCE M ADE BY AO WAS ON THE HIGHER SIDE AND IT WAS REDUCED TO 10% FROM 50%. 3.3.1 ON THE ISSUE OF JUNIOR ARTIST THE LD. CIT(A) HAS FOUND THAT IN SUBSEQUENT ASSESSMENT YEARS I.E. 2007-08 AND 2008-09 EVEN DURI NG SCRUTINY ASSESSMENT UNDER SECTION 143(3) NO SUCH DISALLOWANCE WAS MADE. HOWEV ER, KEEPING IN VIEW THE FACT THAT JUNIOR ARTIST WERE NOT PRODUCED BEFORE THE AO, LD. CIT(A) HAS RESTRICTED THE 3 ITA NO.8730/MUM/2011 (A.Y.2006-07) DISALLOWANCE TO 10%. THE DEPARTMENT IS AGGRIEVED WI TH SUCH RELIEF GRANTED BY CIT(A) AND RAISED AFOREMENTIONED GROUNDS. 4. THE LD. DR RELYING ON THE ASSESSMENT ORDER SUBM ITTED THAT ADDITION WAS RIGHTLY MADE BY THE AO AND CIT(A) HAS WRONGLY DELETED THE S AME. ON BEHALF OF THE ASSESSEE A WRITTEN SUBMISSION HAS BEEN SUBMITTED IN WHICH ARGU MENT RAISED BEFORE CIT(A) HAS BEEN REITERATED. 5. WE HAVE HEARD THE LD. DR AND CONSIDERED THE WRI TTEN SUBMISSIONS FILED BY ASSESSEE. WE HAVE ALSO CAREFULLY GONE THROUGH ASSES SMENT ORDER AS WELL AS ORDER PASSED BY LD. CIT(A). THE RELIEF REGARDING DISALLO WANCE MADE IN RESPECT TO JUNIOR ARTIST FEE IS BASED ON ORDER PASSED BY AO IN SUBSEQUENT YE ARS. MOREOVER AS PER REQUIREMENT OF THE PROFESSION OF THE ASSESSEE THESE TYPE OF EXP ENSES ARE NECESSARY AND NO MATERIAL HAS BEEN BROUGHT ON RECORD TO SHOW THAT IT WAS CLAI MED IN EXCESS BY THE ASSESSEE. THEREFORE, WE DECLINE TO INTERFERE IN THE RELIEF GR ANTED BY CIT(A) AND GROUND NO.1 IS DISMISSED. 6. SO FAR IT RELATES TO GROUND NO.2 HERE ALSO IT HA S BEEN FOUND BY THE LD. CIT(A) THAT DISALLOWANCE IS ON HIGHER SIDE AND DISALLOWANC E IS RESTRICTED FROM 50% TO 10%. NO PARTICULAR MATERIAL HAS BEEN SUBMITTED BY THE DEPAR TMENT TO DISLODGE ESTIMATE MADE BY CIT(A). THEREFORE, WE DECLINE TO INTERFERE IN THE R ELIEF GRANTED BY CIT(A) AND GROUND NO.2 IS ALSO DISMISSED. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07/01/2015 ! '#$ % &' 07/01/2015 # ! ( SD/ - SD/ - ( . . /B.R.BASKARAN ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; & DATED /01/2015 . . ./ JV , SR. PS 4 ITA NO.8730/MUM/2011 (A.Y.2006-07) ! !! ! )*+ )*+ )*+ )*+ ,+$* ,+$* ,+$* ,+$* / COPY OF THE ORDER FORWARDED TO : 1. -. / THE APPELLANT 2. )/-. / THE RESPONDENT. 3. 0 ( ) / THE CIT(A)- 4. 0 / CIT 5. +( )* , , / DR, ITAT, MUMBAI 6. (1 2 / GUARD FILE. / BY ORDER, /+* )* //TRUE COPY// 3 33 3 / 4 4 4 4 5 5 5 5 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI