AVIAS CORPORATE SERVICES P. LD, V. ITO 3(1)(1),

MA 508/MUM/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 8801 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-06-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 19-10-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M MURALI
• Assessee Lawyers: MADAN VAIDYA
• Keywords: Opportunity of cross examination

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH, A, MUMBAI BEFORE SHRI D.K. AGARWAL, JUDICIAL MEMBER AND SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER MA NO: 508/MUM/2011 ARISING OUT OF :2251/MUM/2010 ASSESSMENT YEAR : 2006-07 M/S. AVIAS CORPORATE SERVICES P. LTD. C/O. V. NAIR & ASSOCIATES, B-48, GURUDEV APARTMENT, CHEMBUR NAKA MUMBAI-400 071. PAN NO.: AAECA 8577 F INCOME TAX OFFICER WARD 3(1)(1), 6 TH FLOOR AAYAKAR BHAVAN, M.K. ROAD MUMBAI-400 020. (APPLICANT) VS. (RESPONDENT) APPLICANT BY : SHRI MADAN VAIDYA RESPONDENT BY : SHRI M. MURALI DATE OF HEARING : 8.6.2012 DATE OF PRONOUNCEMENT : 20.6.2012 ORDER PER RAJENDRA SINGH (AM). THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY THE AS SESSEE REQUESTING FOR AMENDMENT OF THE ORDER DATED 23.12.20 10 OF THE TRIBUNAL IN ITA NO.2251/M/2010 ON GROUNDS OF SOME APP ARENT MISTAKES. THE MISTAKE HAS BEEN POINTED OUT IN RELATIO N TO DISALLOWANCE OF BROKERAGE EXPENDITURE AND DISALLOWANCE OF CAR HIRE CHARGES. 2. AS REGARDS THE BROKERAGE PAYMENT, THE ASSESSEE HAD CLA IMED SUB-BROKERAGE EXPENDITURE OF RS.24,97,485/- IN RELATI ON TO HIS BUSINESS OF PROVIDING FINANCE. THE AO NOTED THAT THE A SSESSEE COULD NOT PRODUCE ANY EVIDENCE REGARDING SERVICES RENDERED AND THREE PARTIES HAD DENIED INVOLVEMENT OF ANY SUB-BROKING. FU RTHER, TWO MA NO.508/M/11 ARISING OUT OF ITA NO.2251/M/10 A.Y:06-07 2 PARTIES TO WHOM SUBSTANTIAL BROKERAGE HAD BEEN PAID WE RE RELATIVES OF DIRECTORS. THE AO DISALLOWED THE ENTIRE EXPENDITURE BU T CIT(A) IN APPEAL ALLOWED ONLY 20% WHICH WAS CONFIRMED BY THE TRI BUNAL AFTER OBSERVING THAT BURDEN WAS ON THE ASSESSEE TO PRODUCE EVID ENCE FOR SERVICES RENDERED BY SUB-BROKERS. 2.2 THE ASSESSEE IN THE MISCELLANEOUS APPLICATION HAS SUBMITT ED THAT THE AO HAD EXAMINED THE PARTIES AT THEIR BACK WITHOUT GIVING OPPORTUNITY OF CROSS EXAMINATION AND THEREFORE, THERE WAS APPARENT MISTAKE. WE FIND THAT THIS ASPECT HAD BEEN DULY CONSIDERE D BY THE TRIBUNAL IN PARA-2.6 IN WHICH THE TRIBUNAL OBSERVED T HAT THE DISALLOWANCE HAD BEEN MADE NOT ONLY ON THE BASIS OF DE NIAL OF THE PARTIES BUT ON THE GROUND THAT THERE WAS NO EVIDENCE R EGARDING SERVICES RENDERED. THE TRIBUNAL ALSO OBSERVED THAT IN TH E ABSENCE OF EVIDENCE, THE ENTIRE EXPENDITURE WILL BE DISALLOWED M EANING THEREBY THAT CIT(A) HAD TAKEN A REASONABLE VIEW. THE TRIBUNA L, THEREFORE, UPHELD THE DISALLOWANCE BY CIT(A) @ 20%. THE TRIBUNAL HAD ALSO CONSIDERED THE CLAIM OF THE ASSESSEE THAT NO DISALLOWANCE H AD BEEN MADE IN THE EARLIER YEAR AND REJECTED AS EARLIER YEAR S ASSESSMENTS WERE COVERED UNDER SUMMARY CLAIM. WE, THEREFORE DO NO T SEE ANY APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL. 3. THE SECOND MISTAKE POINTED OUT IS WITH REGARD TO DISA LLOWANCE OF CAR HIRE CHARGES. THE ASSESSEE HAD CLAIMED EXPENDITURE OF RS.34,20,000/- ON ACCOUNT OF CAR HIRE CHARGES. THE AO NOT ED THAT CAR HIRE CHARGES HAD BEEN PAID TO THE FAMILY MEMBERS OF TH REE DIRECTORS. THE AO THEREFORE MADE COMPARISON WITH THE CAR HIRE CHAR GES BEING PAID BY INCOME TAX DEPARTMENT AND AFTER MAKING ALLO WANCE FOR MODEL AND USAGE, DISALLOWED THE SUM OF RS.22,44,000/-. IN APP EAL CIT(A) REDUCED THE DISALLOWANCE TO RS.17,17,000/-. BEFORE THE TRIBUNAL THE MA NO.508/M/11 ARISING OUT OF ITA NO.2251/M/10 A.Y:06-07 3 ASSESSEE SUBMITTED THAT IN THE INCOME TAX DEPARTMENT, CARS WERE BEING USED FOR 11 HOURS A DAY FOR SIX DAYS IN A WEEK WH EREAS IN THE CASE OF THE ASSESSEE USAGE WAS FOR 7 DAYS AND 24 HOUR BASIS. T HE TRIBUNAL HOWEVER NOTED THAT THE PAYMENTS HAD BEEN MA DE TO CLOSE RELATIVES AND NO LOG BOOKS WERE MAINTAINED AND IN SOME CASES ANNUAL HIRE CHARGES EXCEED THE COST OF THE CAR. THE TRIBUNAL AFT ER CONSIDERING THE USAGE AND MODELS USED FOUND THE DISALLOWANCE MADE BY CIT(A) REASONABLE. IN THE MISCELLANEOUS APPLICATION, THERE IS NO APPARENT MISTAKE POINTED OUT AND ONLY THE POINTS MADE EARLIER HAVE BEEN REPEATED. WE, THEREFORE, DO NOT SEE ANY APPARENT MIST AKE IN THE ORDER OF THE TRIBUNAL WHICH IS A REASONED AND SPEAKING ORDER AND APPLICATION IS, THEREFORE, REJECTED. 4. IN THE RESULT, MISCELLANEOUS APPLICATION STANDS REJECTED . ORDER PRONOUNCED IN THE OPEN COURT ON 20.06.2012 SD/- SD/- (D.K. AGARWAL) ( RAJENDRA SINGH ) JUDICIAL MEMBER AC COUNTANT MEMBER MUMBAI, DATED: 20.06.2012. JV. COPY TO: THE APPLICANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.