SMT MANJU RAJA, MUMBAI v. THE ITO 20(2)-2, MUMBAI

ITA 2988/MUM/2008 | 2001-2002
Pronouncement Date: 30-09-2011 | Result: Partly Allowed

Appeal Details

RSA Number 298819914 RSA 2008
Assessee PAN ABVPR4286N
Bench Mumbai
Appeal Number ITA 2988/MUM/2008
Duration Of Justice 3 year(s) 4 month(s) 28 day(s)
Appellant SMT MANJU RAJA, MUMBAI
Respondent THE ITO 20(2)-2, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted I
Tribunal Order Date 30-09-2011
Date Of Final Hearing 19-09-2011
Next Hearing Date 19-09-2011
Assessment Year 2001-2002
Appeal Filed On 02-05-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH MUMBAI BEFORE SHRI J. SUDHAKAR REDDY ACCOUNTANT MEMBER AN D SHRI VIJAY PAL RAO JUDICIAL MEMBER ITA NO. 2988/MUM./2008 (ASSESSMENT YEAR : 2001-02 ) MRS. MANJU RAJA 1703/4 SHEFFIELD TOWER LOKHANDWALA COMPLEX ANDHERI (E) MUMBAI 400 053 PAN ABVPR4286N .. APPELLANT V/S INCOME TAX OFFICER WARD-20(2)(2) MUMBAI .... RESPONDENT ASSESSEE BY : MR. HARESH PURUSHOTTAM DAS REVENUE BY : MR. SUNIL KUMAR SINGH DATE OF HEARING 19.09.2011 DATE OF ORDER 30.09.2011 O R D E R PER J. SUDHAKAR REDDY A.M. THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 29 TH JANUARY 208 PASSED BY THE COMMISSIONER (APPEALS)-XX MUMBAI FOR ASSESSMENT YEAR 2001-02. 2. THERE IS A DELAY OF TEN DAYS IN FILING OF THIS APPE AL. THE ASSESSEE FILED AN AFFIDAVIT EXPLAINING THE DELAY. AFTER PERUSING T HE SAME AND HEARING BOTH THE PARTIES WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE WAS MRS. MANJU RAJA ITA NO.2988/M/2008 2 PREVENTED BY SUFFICIENT CAUSE FROM FILING THIS APPE AL IN TIME. CONSEQUENTLY WE CONDONE THE DELAY. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A N INDIVIDUAL AND IS IN THE BUSINESS OF UNDERTAKING MANNING JOBS AS A SUB-C ONTRACTOR FROM ONGCS MAIN CONTRACTOR. SHE OPERATES IN THE NAME AND STYLE OF M/S. ROOPSWAROOP SHIPPING MANAGEMENT CO. THE MANNING JOBS INCLUDE PR OVIDING OF MANPOWER FOR SHIPPING COMPANIES AND ALSO UNDERTAKE TO PROVID E PROFESSIONALS WITH MARINE BACKGROUND SUCH AS CAPTAIN CHIEF OFFICER R ADIO OFFICER ETC. TO SHIPPING CORPORATION OF INDIA FOR THEIR FOREIGN GO ING VESSELS. SHE ALSO UNDERTAKES CONSULTANCY JOBS OF TECHNICAL NATURE AND ASSISTS IN COMPLYING WITH ALL LEGAL FORMALITIES FOR SALE RUNNING AND MA INTAINING OF VEHICLES. DURING THE YEAR THE ASSESSEE SHOWED TOTAL RECEIPTS AT ` 40 58 726 AND DECLARED A NET PROFIT OF ` 4 89 060. THE NET PROFIT PERCENTAGE WORKED OUT TO 12.5%. THE ASSESSING OFFICER DETERMINED THE TOTAL INCOME AT ` 7 74 155 BY ORDER DATED 7 TH MAY 2003. THEREAFTER THE COMMISSIONER IN HIS ORD ER DATED 5 TH AUGUST 2004 PASSED UNDER SECTION 263 SET ASIDE THE ASSES SMENT FOR FRESH ADJUDICATION BY OBSERVING THAT THE ASSESSING OFFICE R HAS PASSED THE ORDER IN UNDUE HASTE AND WITHOUT MAKING RELEVANT ENQUIRIES. THE ASSESSEE DID NOT CARRY THE MATTER IN APPEAL. THERAFTER THE ASSESSIN G OFFICER PASSED AN ORDER 31 ST DECEMBER 2005 UNDER SECTION 143(3) R/W 263 OF THE ACT INTER-ALIA DISALLOWING SUPERVISION CHARGES TO THE TUNE OF ` 8 50 000 AND DETERMINED THE TAXABLE INCOME AT ` 16 24 155. 4. AGGRIEVED THE ASSESSEE CARRIED THE MATTER BEFORE T HE FIRST APPELLATE AUTHORITY WHEREIN THE COMMISSIONER (APPEALS) CONFI RMED THE ORDER OF THE ASSESSING OFFICER. FURTHER AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. (1) THE LEARNED COMMISSIONER OF INCOME TAX (A) - X X MUMBAI. [HEREINAFTER REFERRED AS THE LEARNED CIT(A)J ERRE D IN CONFIRMING THE DISALLOWANCE OF RS. 8 50 000/- DISREGARDING THE DET AILS DOCUMENTS AND EXPLANATIONS GIVEN IN RESPECT OF THE PAYMENT OF SUPERVISION CHARGES. MRS. MANJU RAJA ITA NO.2988/M/2008 3 (2) ON THE FACTS & CIRCUMSTANCES THE LEARNED CIT(A ) ERRED IN HOLDING YOURE YOUR APPELLANT FAILED TO PRODUCE CON FIRMATIONS OR COMPLETE ADDRESS DESPITE OF GIVING THE AMPLE OPPORT UNITY WHICH IS CONTRARY TO THE FACT AS YOUR APPELLANT HAD GIVEN S UBMITTED AND EXPLAINED THE CLAIM. (3) ON THE FACTS & CIRCUMSTANCES YOUR APPELLANT PRA YS THAT THE SUPERVISION CHARGES OF ` 8 50 000/- MAY BE ALLOWED. 5. LEARNED COUNSEL MR. HARESH PURUSHOTTAM DAS ON BEH ALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS PASSED ORDER DATED 5 TH OCTOBER 2006 UNDER SECTION 154 OF THE ACT WHEREIN THE DISALLOWANCE OF SUPERVISION CHARGES OF ` 8 50 000 WAS REDUCED BY AN AMOUNT OF ` 2 00 000 PAID BY MR. MISHU RAJA AND THAT THE COMMISSIONER ( APPEALS) IGNORED THIS FACT. HE FURTHER SUBMITTED THAT THE DETAILS AND CON FIRMATIONS WERE SUBMITTED IN CASE OF TWO OTHER PAYMENTS AND THESE WERE ALSO N OT CONSIDERED BY THE COMMISSIONER (APPEALS). HE SUBMITS THAT THE ASSESSE E WAS DOING WORK FOR ONGC AND SCI AND NO PAYMENT COULD HAVE BEEN RECEIVE D BY HER UNLESS THE WORK IS DONE. LEARNED COUNSEL EXPLAINED THAT THE AS SESSEE SUPPLIED CREW MEMBERS SUCH AS FITTERS TIME KEEPERS ETC. AFTER TAKING THEIR BIODATA AND VERIFYING WHETHER THEY HAVE CERTIFICATES ISSUED BY MERCANTILE MARINE DEPARTMENT OF GOVT. OF INDIA. HE SUBMITTED THAT THE SE PETTY WORKERS COULD NOT BE TRACED AFTER A TIME GAP OF FIVE YEARS. HE PO INTED OUT THAT THE PAYMENTS MADE COULD BE LINKED TO THE DRAWINGS IN BA NK ACCOUNT. HE FURTHER SUBMITTED THAT THE BUSINESS ITSELF WAS DISCONTINUED ABOUT FIVE YEARS AGO AND UNDER THESE CIRCUMSTANCES THE ASSESSEE WAS HANDICA PPED IN PRODUCING BOOKS OF ACCOUNT VOUCHERS ETC. HE EMPHASISED THAT THE ASSESSING OFFICER IN THE FIRST ROUND OF ASSESSMENT PROCEEDINGS VERIFIED BOOKS OF ACCOUNT VOUCHERS ETC. HE PRAYED THAT THE DISALLOWANCE BE D ELETED. 6. LEARNED DEPARTMENTAL REPRESENTATIVE MR. S.K. SINGH ON BEHALF OF THE REVENUE OPPOSED THE CONTENTIONS BY POINTING OUT TH AT THE ASSESSEE HAS NOT DISCHARGED THE BURDEN THAT LAY ON HER TO PROVE HER CLAIM OF HAVING INCURRED SUPERVISORY CHARGES. HE TOOK THIS BENCH TO THE ORDE RS OF THE ASSESSING OFFICER AND COMMISSIONER (APPEALS) AND SUBMITTED TH AT THE ASSESSEE COULD MRS. MANJU RAJA ITA NO.2988/M/2008 4 NOT PRODUCE THE PARTIES OR EVEN COMPLETE ADDRESS HA S NOT BEEN FILED TO PROVE THE PAYMENTS. HE SUBMITTED THAT THE ORDER OF THE COMMISSIONER (APPEALS) BE UPHELD. 7. RIVAL CONTENTIONS HEARD. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ON PERUSAL OF THE PAP ERS ON RECORD AS WELL AS THE CASE LAWS CITED BEFORE US WE HOLD AS FOLLOWS:- 8. AS FAR AS THE RECTIFICATION ORDER UNDER SECTION 154 IS CONCERNED AS THE ASSESSING OFFICER HIMSELF HAS REDUCED THE FIGURE OF ` 2 00 000 FROM THE TOTAL DISALLOWANCE THE COMMISSIONER (APPEALS) SHOU LD HAVE ALSO REDUCED THE SAME. COMING TO THE SUPERVISION CHARGES PAID TO MR. KIRAN SHAH AND MR. P. DOSHI THE ASSESSEE HAS SUBMITTED CERTAIN PROOF BY WAY OF CONFIRMATION LETTERS FROM THEM AS WELL AS COPIES OF RETURN OF IN COME FILED BY BOTH THESE PERSONS. BOTH THE ASSESSING OFFICER AS WELL AS COMM ISSIONER (APPEALS) HAVE NOT CONSIDERED THE SAME. IN OUR OPINION THE ASSESS EE SHOULD GET RELIEF ON THESE TWO ISSUES. 9. COMING TO THE BALANCE FIGURE OF ` 5 50 000 THE BURDEN OF PROOF WAS NOT DISCHARGED BY THE ASSESSEE. THE ASSESSEE BY IT S OWN SUBMISSIONS HAD THE BIODATAS COPIES OF CERTIFICATES OF VARIOUS COU RSES ATTENDED BY THE CANDIDATES AND COPIES OF CERTIFICATES ISSUED BY MER CANTILE MARINE DEPARTMENT ARE THE BASIS FOR SENDING THEM FOR WORK WHICH COULD HAVE BEEN PRODUCED AS EVIDENCE. SUCH EVIDENCES WERE NOT PRODUCED. EVEN MO DE OF PAYMENT HAS NOT PRODUCED. ONLY A COPY OF BANK ACCOUNT LINKING T HE PAYMENT TO PARTICULAR WITHDRAWALS HAS BEEN FURNISHED. IN OUR OPINION SUC H EVIDENCE IS NOT SUFFICIENT TO ALLOW ENTIRE CLAIM OF THE ASSESSEE. 10. KEEPING IN VIEW THE FACT THAT THE ASSESSEE HAD SHUT DOWN BUSINESS MORE THAN FIVE YEARS BACK AND ALSO THE FACT THAT TH ESE WORKERS SUCH AS FITTERS CARPENTERS ELECTRICIANS ETC. ARE NOT ST ATIONERY IN A GIVEN ADDRESS AND PLEADINGS OF THE ASSESSEE EXPRESSING HER DIFFIC ULTIES ON THE FACTS AND CIRCUMSTANCES OF THE CASE TO PRODUCE EVIDENCE WE ARE OF THE CONSIDERED MRS. MANJU RAJA ITA NO.2988/M/2008 5 OPINION THAT THE INTEREST OF JUSTICE WOULD BE MADE IF THE DISALLOWANCE IS RESTRICTED TO ` 2 00 000 ON AD-HOC BASIS AS THE FACT THAT THE ASS ESSEE WOULD HAVE BEEN INCURRED EXPENDITURE CANNOT BE DISPUTED. DISALLOWANCE IN QUESTION SUSTAINED BY US IN OUR OPINION WOULD TAK E CARE OF ANY POSSIBLE INFLATION OF EXPENDITURE. 11. IN THE RESULT ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON SD/- VIJAY PAL RAO JUDICIAL MEMBER SD/- J. SUDHAKAR REDDY ACCOUNTANT MEMBER MUMBAI DATED: COPY TO : (1) THE ASSESSEE; (2) THE RESPONDENT; (3) THE CIT(A) MUMBAI CONCERNED; (4) THE CIT MUMBAI CITY CONCERNED; (5) THE DR I BENCH ITAT MUMBAI. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY ASSISTANT REGISTRAR SR. PRIVATE SECRETARY ITAT MUMBAI BENCHES MUMBAI