ASHOK N. SHAH, MUMBAI v. ITO 24(1)3), MUMBAI

ITA 1634/MUM/2010 | 2006-2007
Pronouncement Date: 28-01-2011 | Result: Allowed

Appeal Details

RSA Number 163419914 RSA 2010
Bench Mumbai
Appeal Number ITA 1634/MUM/2010
Duration Of Justice 10 month(s) 27 day(s)
Appellant ASHOK N. SHAH, MUMBAI
Respondent ITO 24(1)3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 28-01-2011
Assessment Year 2006-2007
Appeal Filed On 03-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI BEFORE SHRI R.S. SYAL (AM) AND SMT ASHA VIJAYARAGHA VAN (JM) ITA NO.1634/MUM/2010 (ASSESSMENT YEAR-2006-07) SHRI ASHOK N. SHAH B-2 GIRIRAJ CHS LTD. MAMLEDAR WADI MALAD(W) MUMBAI-400 064 PAN-AAGPS 4063D VS. THE ITO-24(1)(3) C-13 PRATYAKSHAKAR BHAVAN BANDRA KURLA COMPLEX BANDRA MUMBAI-400 051 (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI S.S. PHADKAR RESPONDENT BY: SHRI SURENDRA KUMAR O R D E R PER ASHA VIJAYARAGHAVAN (JM) THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. CIT(A)-34 MUMBAI DATED 22.12.2009 FOR THE A.Y.2 006-07. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A SELF-EMPLOYED PROFESSIONAL AND IS PROVIDING CONSULTANCY IN ACCOUN TANCY TAXATION AND FINANCIAL MATTERS. 3. THE RETURN OF INCOME WAS FILED DECLARING A TOTAL TAXABLE INCOME OF RS. 3 75 540/-. THE ASSESSEE IS FOLLOWING CASH BAS IS OF ACCOUNTING IN RESPECT OF HIS PROFESSIONAL RECEIPTS. DURING THE YE AR THE ASSESSEE RECEIVED PROFESSIONAL FEES OF RS. 5 91 417/- AND CO MMISSION INCOME OF RS. 19 976/- AND HAS INCURRED EXPENDITURE OF RS. 2 61 238/- FOR EARNING SUCH INCOME. THE DETAILS OF EXPENSES INCUR RED FOR THE PURPOSE OF BUSINESS IS AS UNDER: ITA NO1634/M/10. 2 PARTICULARS AMOUNT (RS) B ANK CHARGES 150 COMPUTER EXPENSES 4 250 CONVEYANCE 19 550 DEPRECIATION ON AIR CONDITIONER 1 920 DEPRECIATION ON COMPUTER 447 ELECTRICITY EXPENSES 17 590 ENTERTAINMENT EXPENSES 11 114 NEWSPAPER & SUBSCRIPTION 2 650 OFFICE & GENERAL EXP ENSES 14 594 POST & COURIER CHARGES 1 950 PRINTING STATIONERY XEROX ETC. 16 760 PROFESSION TAX PAID 2 500 PROFESSIONAL FEES 26 500 SALARY TO EMPLOYEES 86 855 STAFF WELFARE 19 729 TELEPHONE EXPENSES 31 429 TRAVELLING EXPENSES 3 250 TOT AL EXPENSES 2 61238 4. THE ASSESSING OFFICER INITIATED ASSESSMENT PROCE EDINGS U/S. 143(2) OF THE ACT VIDE NOTICE DT. 28.6.2007. VIDE LETTER DT. 5.11.2007 THE AO CALLED FOR DETAILED INFORMATION IN RESPECT O F RETURN OF INCOME FILED BY THE ASSESSEE. IN RESPONSE THE ASSESSEE O N VARIOUS OCCASIONS (13/12/2007 29/01/2008 21/2/2008 & 29/2/2008) HAS SUBMITTED ALL THE INFORMATION/DETAILS AS REQUIRED BY THE AO A LONGWITH BOOKS OF ACCOUNTS AND VOUCHERS/BILLS IN SUPPORT OF ALL THE E XPENSES INCURRED FOR THE PURPOSE OF HIS BUSINESS. NO ADVERSE OBSERV ATIONS WERE MADE BY THE AO IN RESPECT OF THE BUSINESS ACTIVITY AND THE BUSINESS EXPENDITURE INCURRED BY THE ASSESSEE. SUBSEQUENTL Y THE AO REQUESTED TO SUBMIT EXPLANATION IN RESPONSE TO THE REPLY FURNISHED BY VARIOUS PARTIES PURSUANT TO NOTICES ISSUED U/S. 133 (6) OF THE ACT AND THE HEARING ADJOURNED TO 29.5.2008. THE AO WITHOUT ANY INTIMATION TO THE ASSESSEE PASSED AN EX-PARTE ORDER ON 28.5.2 008 (I.E. BEFORE THE ITA NO1634/M/10. 3 SCHEDULED DATE FIXED FOR FURNISHING REPLY BY THE AS SESSEE) AND MADE DISALLOWANCE OF RS. 2 61 238 BEING ALL THE EXPENSE S INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS THEREB Y ASSESSING THE TAXABLE INCOME AT RS. 6 36 778/- AS AGAINST THE RET URNED INCOME OF RS. 3 75 540/-. 5. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE T HE LEARNED CIT(A) AND SUBMITTED AS FOLLOWS: IT IS ARGUED THAT THE APPELLANT WAS NOT CONFRONTED ABOUT THE MATERIAL GATHER U/S. 133(6). IT WAS ALSO ARGUED TH AT THE EXPENSES WERE DISALLOWED WITHOUT APPRECIATING THE F ACTS AND EVIDENCE. LOOKING TO THESE ARGUMENTS AND SUBMI SSIONS OF THE APPELLANT A REMAND REPORT WAS CALLED FOR AN D THE AO WAS DIRECTED TO SEND HIS REMAND REPORT. THE AO WAS SUBMITTED HIS REMAND REPORT DT. 11.11.2009 WHEREIN HE HAS SUBMITTED THAT FINAL HEARING WAS FIXED ON 29.4.200 8 BUT NOBODY ATTENDED AND ORDER WAS PASSED ON THAT DATE B UT DUE TO A TYPOGRAPHICAL MISTAKE THE DATE IN THE ORD ER WAS SHOWN AS 28.5.2008. 6. THE LEARNED CIT(A) HELD AS FOLLOWS: I HAVE CAREFULLY CONSIDERED THE FINDING OF THE AO AND THE SUBMISSIONS OF THE APPELLANT. THE APPELLANT HAS TR IED TO REBUT THE REMAND REPORT AND STATED THAT ENTIRE EXPE NDITURE CLAIMED IS GENUINE EXPENDITURE. THEREFORE THE SAM E SHOULD BE ALLOWED OR FURTHER OPPORTUNITY MAY BE GIVEN IT WAS PLEADED. AS FAR AS THE DATE 28.5.2008 IS CONCERNED IT IS VERY CLEAR FROM THE COPY OF ORDER SHEET THAT FINAL HEARING WAS FIXED ON 29.5.2008 AND THE AO HAS MADE NOTING O N 29.5.2008 THAT THE ORDER U/S. 143(3) WAS PASSED. T HIS FACT INDICATE THAT THERE WAS A TYPOGRAPHICAL ERROR IN TH E ORDER BY MENTIONING THE DATE OF ORDER 28.5.2008 WHICH DOES N OT MAKE THE ORDER INVALID. OTHERWISE ALSO SUCH TYPOGR APHICAL ERRORS ARE COVERED BY SEC. 292(B) OF THE I.T. ACT. AN OPPORTUNITY WAS GIVEN TO THE APPELLANT BY CALLING R EMAND REPORT. THUS I HAVE NO FORCE IN GROUND NO. 1 & 2 A ND THE SAME ARE DISMISSED. ITA NO1634/M/10. 4 7. AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A) ASS ESSEE PREFERRED AN APPEAL BEFORE US AND RAISED THE FOLLOWING GROUND S: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED CIT(A) ERRED IN DISMISSING THE GROUNDS REGARDING THE ASSESSMENT BEING PASSED WITHOUT AFFORDING A PROPER OPPORTUNITY OF BEING HEA RD AND IGNORING THE FACTS & EVIDENCE ON RECORD. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LEARNED CIT(A) ERRED IN SUSTAINING THE DISALLOWANCE OF THE ENTIRE EXPENSES OF RS. 2 61 238 /- ON THE GROUND THAT AS THE EXPENSES WERE REIMBURSED TO THE ASSESSEE BY TWO OF HIS CLIENTS THERE WAS NO JUSTIF ICATION FOR THE CLAIM OF EXPENSES OF RS. 2 61 238/-. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT(A) ERRED IN SUSTAINING THE ADD ITION OF THE ENTIRE EXPENSES OF RS. 2 61 238/- MADE BY TH E AO. 8. WE HEARD BOTH THE PARTIES. WE FIND THAT THE AO HIMSELF STATED IN THE REMAND REPORT DT. 11.11.2009 THAT FINAL HEARING WAS FIXED ON 29.4.2008 BUT NOBODY ATTENDED AND THE ORDER WAS PAS SED ON THAT DATE BUT DUE TO A TYPOGRAPHICAL MISTAKE THE DATE OF ORD ER WAS SHOWN AS 28.5.2008. THE AO WITHOUT ANY INTIMATION TO THE AP PELLANT PASSED AN EX-PARTE ORDER ON 28.5.2008 EVEN BEFORE THE SCHEDUL ED DATE FIXED FOR FURNISHING REPLY BY THE ASSESSEE. IN OUR OPINION TH E AO MADE ARBITRARY DISALLOWANCE OF THE ENTIRE EXPENSES WITHOUT ANY JUS TIFICATION AND VIOLATING THE PRINCIPLE OF NATURAL JUSTICE BY NOT G RANTING AN OPPORTUNITY TO THE ASSESSEE OF BEING HEARD AND TO S UBMIT EXPLANATION WITH RESPECT TO THE ALLOWABILITY OF BUSINESS EXPEND ITURE. WE THEREFORE REMIT THE MATTER TO THE FILE OF THE AO TO DECIDE T HE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING A REASONABLE OPPORTUNITY TO T HE ASSESSEE. ITA NO1634/M/10. 5 9. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 28 TH DAY OF JANUARY 2011 SD/- SD/- (R. S.SYAL) ( ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL M EMBER MUMBAI DATED 28 TH JANUARY 2011. RJ COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CENTRAL - I CONCERNED 5. THE DR I BENCH TRUE COPY BY ORDER ASST. REGISTRAR I.T.A.T MUMBAI ITA NO1634/M/10. 6 DATE INITIALS 1 DRAFT DICTATED ON: 24 . 01. 201 1 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 25 . 01 .201 1 ______ SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: ______ JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: ______ JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: SR. PS/ PS 6. KEPT FOR PRONOUNCEMENT ON: ______ SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: ______ SR. PS/PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK: ______ 9 DATE ON WHICH FILE GOES TO THE AR 10 . D ATE OF DISPATCH OF ORDER: ______