ROHIDAS HARI JATHAR, Thane V. ACIT CIRCLE-4, MUMBAI, Thane

ITA 962/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 8796 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 19-02-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Keywords: Corroborative evidences
• Section: 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC MUMBAI BEFORE SHRI C.N. PRASAD (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 962/MUM/2019 ASSESSMENT YEAR: 2010-11 ROHIDAS HARI JATHAR, A-102, MAGDHA CHS LTD., CHANAKYA NAGARI, SAMEL VILLAGE, NALLASOPARA (W), THANE-401203. VS. ASST. CIT, CIRCLE-4, ROOM NO. 2, A WING, ASHAR I.T. PARK, AMBIKA NAGAR, WAGLE ESTATE, THANE-400604. PAN NO. ADIPJ 2562 M APPELLANT RESPONDENT ASSESSEE BY : NONE REVENUE BY : MS. SMITA VERMA, DR DATE OF HEARING : 06/01/2021 DATE OF PRONOUNCEMENT : 11/01/2021 ORDER PER N.K. PRADHAN, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVA NT ASSESSMENT YEAR IS 2010-11. THE APPEAL IS DIRECTED AGAINST THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS)-3, MUMBAI [IN SHORT CIT(A)] AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) THE INCOME TAX ACT 1961, (THE ACT). THOUGH THE CASE WAS FIXED FOR HEARING ON 06.02.202 0, 06.03.2020, 13.03.2020 AND 06.01.2021, NEITHER THE ASSESSEE NOR HIS AUTHORIZED REPRESENTATIVE APPEARED BEFORE THE TRIBUNAL ON THE ABOVE DATES. THEREFORE, CONSIDERING THE NON-COMPLIANCE BY THE ASSESSEE, WE ARE PROCEEDING TO ITA NO. 962/MUM/2019 ROHIDAS HARI JATHAR 2 DISPOSE OFF THIS APPEAL AFTER EXAMINING THE MATERIA LS AVAILABLE ON RECORD AND AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATI VE (DR). 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR (AY) 2010- 11 ON 22.09.2011 DECLARING TOTAL INCOME OF RS.3,42,810/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT IS OBSERVED BY THE ASSESSING OFFICE R (AO) THAT THE ASSESSEE HAS DEBITED RS.3,45,190/- AS INCENTIVE PAYMENT, RS. 2,56,910/- AS SALARY PAYMENT AND RS.19,215/- AS STAFF WELFARE EXPENSES. STATING THAT AGAINST THE GROSS COMMISSION RECEIPTS OF RS.10,54,139/-, THE AB OVE EXPENSES WERE QUITE HIGH, HE ASKED THE ASSESSEE TO PRODUCE THE EM PLOYEES FOR EXAMINATION AND FILE CONFIRMATION. IN RESPONSE TO IT, THE ASSES SEE PRODUCED SHRI SAGAR BHOGTE TO WHOM HE HAD PAID SALARY OF RS.41,600/- AN D INCENTIVE OF RS.62,376/-. THE ASSESSEE ALSO PRODUCED SHRI ABHIMA NYU SINGH TO WHOM HE HAD PAID SALARY OF RS.40,600/- AND INCENTIVE OF RS. 16,520/-. IN RESPECT OF OTHER FOUR EMPLOYEES THE ASSESSEE EXPRESSED HIS INA BILITY TO PRODUCE THEM. THE AO HAS FURTHER OBSERVED THAT THE ASSESSEE COULD SUBSTANTIATE THE CLAIM OF SALARY TO THE TUNE OF RS.82,200/- AND INCENTIVE PAYMENT OF RS.1,24,896/- ONLY. THEREFORE, HE TREATED THE BALANCE OF SALARY T O THE TUNE OF RS.1,74,710/- AND INCENTIVE PAYMENT OF RS.2,20,294/ - AS FICTITIOUS EXPENSES. THUS HE MADE A DISALLOWANCE OF THE ABOVE WHICH COMES TO RS.3,94,004/-. FURTHER NOTING THAT THE ASSESSEE HAS DEBITED RS.19 ,215/- AS STAFF WELFARE EXPENSES WHICH HE FAILED TO SUBSTANTIATE WI TH DOCUMENTARY EVIDENCE, THE AO MADE AN ADDITION OF THE ABOVE AMOU NT. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE F ILED AN APPEAL BEFORE THE LD. CIT(A). WE FIND THAT THE LD. CIT(A) VIDE OR DER DATED 01.11.2018 DISMISSED THE APPEAL BY AGREEING WITH THE FINDINGS OF THE AO. ITA NO. 962/MUM/2019 ROHIDAS HARI JATHAR 3 4. THE LD. DR SUBMITS THAT THE ORDER PASSED BY THE AO IS BASED ON FACTS AND THEREFORE, THE ORDER OF THE LD. CIT(A) BE AFFIR MED. 5. WE HAVE HEARD THE LD. DR AND PERUSED THE RELEVAN T MATERIALS ON RECORD. THE NATURE OF BUSINESS OF THE ASSESSEE IS I NSURANCE COMMISSION. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO HAD ISSUED A SHOW CAUSE NOTICE DATED 14.02.2013 TO THE ASSESSEE TO EX PLAIN THE FOLLOWING : 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS YOU WERE REQUESTED SO SUBMIT CONFIRMATIONS OF INCENTIVE PAYMENT AND SALARY PAYME NT ALONG-WITH THE WORK ATTENDED BY THE VARIOUS EMPLOYEES/SUB AGENTS ON VAR IOUS OCCASIONS. HOWEVER, IT HAS BEEN OBSERVED THAT YOU HAVE NOT SUBSTANTIATED Y OUR CLAIM OF INCENTIVE PAYMENT AND SALARY PAYMENT WITH DOCUMENTARY EVIDENC ES. YOU ARE HEREBY REQUESTED TO SHOW CAUSE AS TO WHY THE INCENTIVE PAY MENT OF RS.3,45,190/- AND SALARY PAYMENT OF RS. 2,56,910/- SHOULD NOT BE DISA LLOWED AND ADDED TO YOUR TOTAL INCOME. SIMILARLY, STAFF WELFARE EXPENSES OF RS.19,215/- SHOULD NOT BE DISALLOWED AND ADDED TO YOUR TOTAL INCOME. 3 YOUR REPLY, IF ANY, SHOULD REACH ON OR BEFORE 25/ 02/2013 WITH SUPPORTING EVIDENCES, WHICH IS THE LAST AND FINAL DATE HEARING IN YOUR CASE. FAILURE ON YOUR PART MAY CONSTRAIN THE UNDERSIGNED TO PRESUME THAT YOU HAVE NOTHING TO SAY AND YOU DO NOT HAVE ANY OBJECTIONS TO THE PROPOSED LINE OF ACTION. IN RESPONSE TO THE ABOVE SHOW CAUSE NOTICE, THE AS SESSEE COULD PRODUCE SHRI SAGAR BHOGTE TO WHOM HE HAD PAID SALAR Y OF RS.41,600/- AND INCENTIVE OF RS.62,376/-. THE ASSESSEE COULD ALSO P RODUCE SHRI ABHINANYU SINGH TO WHOM HE HAD PAID SALARY OF RS.40,600/- AND INCENTIVE OF RS.62,520/-. IN RESPECT OF THE FOUR EMPLOYEES, THE ASSESSEE FAILED TO PRODUCE THEM BEFORE THE AO FOR EXAMINATION. IT IS A LSO FOUND FROM THE MATERIALS AVAILABLE ON RECORD THAT THE ASSESSEE FAI LED TO FILE CONFIRMATION IN THE SHAPE OF SUPPORTING EVIDENCE IN RESPECT OF THE REMAINING FOUR ITA NO. 962/MUM/2019 ROHIDAS HARI JATHAR 4 EMPLOYEES. CONSIDERING THE ABOVE FACTS, THE DISALLO WANCE OF RS.3,95,004/- MADE BY THE AO IS AFFIRMED. HOWEVER, THE DISALLOWANCE OF RS.19,215/- MADE BY T HE AO IN RESPECT OF STAFF WELFARE EXPENSES IS DELETED ON THE GROUND THAT THE DETAILS AS CALLED FOR VIDE QUESTIONNAIRE ISSUED ALONG WITH NOTICE U/S 142(1) DATED 01.10.2012 WERE FILED BY THE ASSESSEE AS MENTIONED AT PARA 2 OF THE ASSESSMENT ORDER DATED 01.03.2013. 6. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/01/2021. SD/- SD/- (C.N. PRASAD) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 11/01/2021 RAHUL SHARMA, SR. P.S. 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. BY ORDER, //TRUE COPY// (DY./ASSISTANT REGISTRAR) ITAT, MUMBAI