SHAH FORGED ROLLS P.LTD, V. ASST CIT 10(3),

MA 600/MUM/2012

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0030 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-03-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2007-2008
• Appeal Filed On: 20-09-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M SUBRAMANIAN

Judgement Text

1 MA NO. 600/MUM/ 2012 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J BEFORE SHRI P.M. JAGTAP, AM AND SHRI S.T.M. PAVALAN , JM MA NO. 600/MUM/2012 ARISING OUT OF ITA NO. 2718/MUM/2010 ASSESSMENT YEAR 2007-08 M/S SHAH FORGED ROLLS P. LTD., 16, ANTARIKSH, MURAR ROAD, MULUND (WEST), MUMBAI 400 080. PAN AAACS 7225C VS. ASSTT. COMMISSIONER OF INCOME TAX 10(3), MUMBAI. 20 APPLICANT RESPONDENT APPLICANT BY SHRI M. SUBRAMANIAN RESPONDENT BY SHRI RAJARSHI DWIVEDY ORDER PER P.M. JAGTAP, A.M. BY THIS MISC. APPLICATION, THE ASSESSEE IS SEEKING RECTIFICATION OF THE MISTAKES ALLEGED TO HAVE CREPT IN THE ORDER OF THE TRIBUNAL DTD. 31-01-2013 PASSED IN ITA NO. 2718/MUM/2010 FOR A.Y 2007-08. 2. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFOR E US THAT THE FOLLOWING THREE SUBSTANTIVE GROUNDS WERE RAISED BY THE ASSESS EE IN ITS APPEAL FILED BEFORE THE TRIBUNAL:- 1. ON THE FACTS OF THE CASE THE COMMISSIONER (APPEA LS) HAS ERRED IN HOLDING THAT DISALLOWANCE OF CASH EXPENSES OF RS. 3,67,107/ - IS JUSTIFIED. 2. THE COMMISSIONER (APPEALS) IS NOT JUSTIFIED IN C ONFIRMING THE ORDER OF ASST. COMMISSIONER OF INCOME TAX HOLDING THAT A SUM OF RS. 3,67,107/- IS DISALLOWED. 2 MA NO. 600/MUM/ 2012 3. THE COMMISSIONER (APPEALS) IS NOT JUSTIFIED IN C ONFIRMING THE ORDER OF ASST. COMMISSIONER OF INCOME TAX DISALLOWING RS. 3, 67,107/- AS ASSUMING BUT NOT ACCEPTING THE DISALLOWANCE, THE DI SALLOWANCE ACTUALLY WORKS OUT TO BE RS. 33,038/- ONLY AT 5% OF CASH EXP ENSES OF RS. 6,60,775/-. 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT OUT OF THE THREE AFORESAID GROUNDS, GROUND NO. 3 INVOLVED THE ALTERNATIVE CLAI M OF THE ASSESSEE THAT IF AT ALL THE DISALLOWANCE OF EXPENSES AS MADE BY THE A.O . AND CONFIRMED BY THE LD. CIT(A) WAS TO BE SUSTAINED, THE SAME SHOULD HAVE BE EN WORKED OUT TO RS. 33,038/- BEING 5% OF THE CASH EXPENSES OF RS. 6,60, 775/-. HE SUBMITTED THAT THE TOTAL EXPENSES INCURRED BY THE ASSESSEE IN CASH WERE ONLY TO THE TUNE OF RS. 6,60,775/- AND THE DISALLOWANCE MADE BY THE A.O. ON THE GROUND OF UN- VOUCHED AND UNVERIFIABLE ITEMS INVOLVED IN THE SAID EXPENSES SHOULD HAVE BEEN RESTRICTED TO 5% OF THE CASH EXPENSES AND NOT 10% O F THE TOTAL EXPENSES. HE SUBMITTED THAT THIS ALTERNATIVE CLAIM MADE BY THE A SSESSEE IN GROUND NO. 3 SPECIFICALLY RAISED IN THE APPEAL FILED BEFORE THE TRIBUNAL HAS NOT BEEN ADJUDICATED BY THE TRIBUNAL WHICH HAS GIVEN RISE TO A MISTAKE APPARENT FROM RECORD. 4. THE LD. D.R., ON THE OTHER HAND, INVITED OUR ATT ENTION TO THE RELEVANT PORTION OF THE ASSESSMENT ORDER TO SHOW THAT CERTAI N EXPENSES CLAIMED BY THE ASSESSEE TOTALING TO RS. 36,71,065/- WERE EXAMINED/ VERIFIED BY THE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDING. HE SUBMITTED T HAT ON SUCH VERIFICATION/EXAMINATION, THE A.O. FOUND THAT CERTA IN EXPENSES WERE INCURRED BY THE ASSESSEE IN CASH. HE SUBMITTED THAT ON THE BASIS OF THIS FINDING AS WELL 3 MA NO. 600/MUM/ 2012 AS THE OTHER ADVERSE FINDINGS RECORDED BY THE A.O., 10% OF THE TOTAL EXPENSES OF RS. 36,71,065/- WERE DISALLOWED BY THE A.O. AND THE RE WAS NOTHING IN THE ASSESSMENT ORDER TO SHOW THAT SUCH DISALLOWANCE WAS INTENDED TO BE MADE BY THE A.O. OUT OF ONLY CASH EXPENSES. HE ALSO INVITE D OUR ATTENTION TO PARA NO. 8 OF THE TRIBUNALS ORDER TO SHOW THAT THIS FACTUAL P OSITION OF DISALLOWANCE OF 10% MADE BY THE A.O. OUT OF TOTAL EXPENDITURE INCURRED BY THE ASSESSEE WAS CORRECTLY UNDERSTOOD AND APPRECIATED BY THE TRIBUNA L WHILE CONFIRMING THE SAID DISALLOWANCE. HE CONTENDED THAT THERE IS THUS NO M ISTAKE APPARENT IN THE ORDER OF THE TRIBUNAL REQUIRING RECTIFICATION U/S 2 54(2) OF THE ACT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT ON THE BAS IS OF VARIOUS ADVERSE FINDINGS RECORDED IN THE ASSESSMENT ORDER INCLUDING THE FIND ING RELATING TO EXPENSES INCURRED IN CASH, THE DISALLOWANCE WAS MADE BY THE A.O. AT 10% OF CERTAIN EXPENSES IDENTIFIED BY HIM SPECIFICALLY IN THE ORDE R TOTALING TO RS. 36,71,065/-. THE A.O. THUS NEVER INTENDED TO MAKE THE DISALLOWAN CE OF 10% ONLY OUT OF CASH EXPENSES AND THIS POSITION WAS RIGHTLY APPRECIATED BY THE TRIBUNAL WHILE DECIDING THIS ISSUE IN PARA 8 OF ITS ORDER WHICH RE ADS AS UNDER :- WE HAVE HEARD BOTH THE PARTIES, PERUSED THE RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE FACT IS THAT THE ASSESSEE HAS NOT FILED ALL THE DETAILS IN RESPECT OF THE EXPENSES INCURRED AND THE PAYMENTS WERE MADE IN CASH AND ALSO THE SUPPORTING VOUCHERS FILED BY THE ASSESSEE SELF-MADE. IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE THE A.O. MADE THE DISALLOWANCE OF 10% OUT OF THE TOTAL EXPENDITURE INCURRED AND THE CIT(A) HAS CONFIRMED THE SAID DISALLOWANCE. ON CONSIDERATION OF THE FACTS AND CI RCUMSTANCES OF THE CASE, WE NO INFIRMITY IN THE ORDER OF THE CIT(A) AND THE SAM E IS HEREBY UPHELD. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE IN THIS REGARD ARE DISMISSED. 4 MA NO. 600/MUM/ 2012 6. AS IS CLEARLY EVIDENT FROM THE RELEVANT PORTION OF THE TRIBUNALS ORDER EXTRACTED ABOVE, THE FACT THAT THIS DISALLOWANCE OF 10% WAS MADE BY THE A.O. OUT OF THE TOTAL EXPENSES WAS PROPERLY AND CORRECTL Y UNDERSTOOD AND APPRECIATED BY THE TRIBUNAL WHILE CONFIRMING THE SA ID DISALLOWANCE AND THERE IS NO MISTAKE APPARENT FROM RECORD IN THE ORDER OF THE TRIBUNAL AS ALLEGED BY THE ASSESSEE IN THE PRESENT MISC. APPLICATION REQUIRING RECTIFICATION U/S 254(2). WE, THEREFORE, FIND NO MERIT IN THE SAID MISC. APPL ICATION AND DISMISS THE SAME. 7. IN THE RESULT, THE MISC. APPLICATION FILED BY TH E ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 08-03-2013. SD/- SD/- (S.T.M. PAVALAN) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 08-03-2013. RK COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CONCERNED - MUMBAI 4. THE CIT- CONCERNED, MUMBAI 5. THE DR BENCH, J 6. MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI