SHUBHADA ENTERPRISES,ANDHERI V. ITO WARD 26(3)(2), BKC

ITA 1456/MUM/2025

AI Insights

Shubhada Enterprises appealed against the order of the National Faceless Appeal Centre, Delhi, which upheld various additions and disallowances made by the Assessing Officer for the assessment year 2016-17. The main issues in the appeal included the addition of Rs. 5,39,720 as reimbursement of expenses from Abbott India Ltd., disallowance of rent expenses amounting to Rs. 3,45,780, and disallowance of deduction under section 24 of Rs. 54,026 from rent received. The Tribunal found that the matter required further examination and allowed the assessee to present additional evidence to support their claims.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314271 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KARPE
• Assessee Lawyers: YASH SANGHARJKA
• Keywords: Additional evidence; Business expenditure; TDS

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH MUMBAI BEFORE HON’BLE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA No. 1456/Mum/2025 (Assessment Year: 2016-17) Shubhada Enterprises 9-10 Luthra Premises, Andheri Kurla Road, Near Saki Naka, Andheri (E). Vs. ITO, Ward – 26(3)(2) Pratyakshakar Bhavan, C-11, BKC, Bandra East – 400051. PAN/GIR No. AABFS2977F (Applicant) (Respondent) Assessee by Shri Yash Sangharjka Revenue by Shri Avinash Karpe, Sr. DR Date of Hearing 28.04.2025 Date of Pronouncement 08.05.2025 आदेश / ORDER PER SANDEEP GOSAIN, JM: The present appeal has been filed by the assessee challenging the impugned order 31.12.2024 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi (NFAC) for the assessment year 2016-17, the assessee has raised the following grounds of appeal: The learned Commissioner of Income-tax (Appeals) has erred in confirming the action of the Assessing officer in making addition of Rs.5,39,720/- being reimbursement of expenses received from Abbott India Ltd. Your appellant submits that this addition is not warranted and ought to be deleted. 2 ITA No. 1456/Mum/2025 Shubhada Enterprises, Mumbai The learned Commissioner of Inrome-tax (Appeals) has erred in confirming the action of the Assessing Officer in disallowing rent expense of Rs. 3,45,780/-. Your appellant submits that the rental expenses are incurred wholly and exclusively for purpose of business and ought to be allowed in full as claimed. The Learned Assessing Officer be directed to allow the same. The Learned Commissioner of Income-tax (Appeals) has erred in confirming the action of the Assessing Officer in disallowing deduction u/s 24 of Rs. 54,026/- from rent received from property owned by your appellant. Your appellant submits that the deduction u/s 24 ought to be allowed as deduction. The Learned Assessing Officer be directed to allow the same, Appellant craves leave to add, alter or delete any ground(s) either before or in the course of the hearing of the appeal. 2. At the very outset, the Bench noticed that assessee had moved an application for filing additional evidence but the same was not pressed, and in this regard an endorsement has been made on the application itself, therefore the said application stands dismissed as not pressed. 3. Now coming to the merits of the case, the assessee is an partnership firm, engaged in the business of acting of C & F joint for Multinational Pharma Company. The assessment order was completed in the present case by making additions under different heads which were upheld by Ld. CIT(A) as well. Now the present appeal has been filed raising the grounds of appeal which are mentioned above. 3 ITA No. 1456/Mum/2025 Shubhada Enterprises, Mumbai 4. Ground No. 1, this ground raised by the assessee relates to upholding of additions made by AO on account of reimbursement of expenses received from Abbott India Pvt Ltd. 5. I have heard counsels for both the parties and perused the material placed on record. From the records, I found that Ld. CIT(A) uphold the additions made by Ld.AO by passing the following order: “I have carefully considered the facts of the case, material available on record and the submissions of the appellant It is seen that the appellant has earned Commission Income from M/s Abbot India during the relevant period for providing Warehousing and Distribution Services and has claimed various expenses related in handling of the goods. Further the appellant has also been reimbursed various expenses. The Assessing Officer has examined the relevant invoices and identified those related to the preceding and current previous year. Though the appellant has claimed that the expenses were not routed through the Profit and Loss Account it has not substantiated it's claim with the reconciliation of the same with the copy of account of M/s Abbot India and business expenses claimed in the Profit and Loss Account. Further, the appellant has not submitted copy of any agreement or any other document in terms of which the expenses are to be borne by the appellant or reimbursed by M/s Abbot India. Thus, I do not find any reason to interfere with the disallowance and the same is upheld”. 6. After evaluating the orders passed by revenue authorities and the facts, I found that since the assessee 4 ITA No. 1456/Mum/2025 Shubhada Enterprises, Mumbai could not substantiate its claim that the reconciliation of the same, therefore considering the interest of justice I am of the view that matter needs to be restored back to the file AO for afresh adjudication and assessee is liberty to submit copy of agreement or any other documents in terms of which the expenses were born by the assessee or reimbursement of expenses received from M/s Abbott India Pvt Ltd. 7. Ground No. 2, This ground raised by the assessee relates to upholding the disallowance of rental expenses, and in this regard I have heard the counsels for both the parties and perused the material placed on record and the orders passed by the revenue authorities. Ld. CIT(A) has rejected the claim of assessee by passing the following order: “I have carefully considered the facts of the case, material available on record and the submissions of the appellant. It is seen that the Assessing Officer disallowed the rent expenses as the appellant did not furnish copies of Rent Agreements, Proof of Payment, proof of TDS or Confirmed Copies of Accounts during the assessment proceedings. The appellant has claimed that the rent agreements were not renewed, however, did not submit Proof of Payment, TDS or Confirmed Copies of Accounts during the assessment or appellate proceedings. Since the claim is not supported by relevant documents I do not find any reason to interfere with the disallowance and the same is upheld”. 5 ITA No. 1456/Mum/2025 Shubhada Enterprises, Mumbai 8. Whereas on the contrary, assessee submitted that these rental expenses were incurred wholly and exclusively for the purpose of business and already filed the required documents and the findings of the revenue authorities is factually incorrect but at this stage assessee has failed to point out the documents which were produced before the AO or Ld. CIT(A). Therefore considering the interest of justice I am of the view that matter needs to be restored back to the file AO for afresh adjudication and assessee is at liberty to submit copy of agreement, proof of payments, proof of TDS or any other documents in order to substantiate its claim. 9. Ground No. 3, This ground raised by the assessee relates to upholding the disallowance of deduction u/s 24 of the Act, the operative para of Ld. CIT(A) is reproduced herein below: I have carefully considered the facts of the case, material available on record and the submissions of the appellant. It is seen that the Assessing Officer has given a categorical finding that the appellant claimed Society Maintenance Charges, Electricity Charges as Business Expenses and therefore deduction u/s 24 of the Act was not admissible. The appellant has not made any submission controverting the findings of the Assessing Officer. Thus, I do not find any reason to interfere with the disallowance of Standard deduction and the same is upheld. 6 ITA No. 1456/Mum/2025 Shubhada Enterprises, Mumbai 10. Whereas on the contrary, Ld. AR submitted that assessee is entitled for statutory deduction u/s 24 of the Act but the same was wrongly denied and still can prove its entitlement by filing documents. Therefore considering the interest of justice I am of the view that matter needs to be restored back to the file AO for afresh adjudication and assessee is liberty to submit documents to substantiate its claim. 11. Before parting, I make it clear that my decision to restore the matter back to the file of the AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the Ld. AO independently in accordance with law. 12. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 08.05.2025. Sd/- (SANDEEP GOSAIN) JUDICIAL MEMBER Mumbai, Dated 08/05/2025 KRK, PS 7 ITA No. 1456/Mum/2025 Shubhada Enterprises, Mumbai आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. संबंधधत आयकर आयुक्त / The CIT(A) 4. आयकर आयुक्त(अपील) / Concerned CIT 5. धिभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, मुम्बई / DR, ITAT, Mumbai 6. गार्ड फाईल / Guard file. आदेशानुसार/ BY ORDER, सत्याधपत प्रधत //True Copy// 1. उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai 8 ITA No. 1456/Mum/2025 Shubhada Enterprises, Mumbai Date 1. Draft dictated on 29.04.2025 2. Draft placed before author 29.04.2025 3. Draft proposed & placed before the second member 4. Draft discussed/approved by Second Member. 5. Approved Draft comes to the Sr.PS/PS 6. Kept for pronouncement on 7. File sent to the Bench Clerk 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk 10. Date of dispatch of Order. 11. Dictation Pad is enclosed "