The Karsons Auto Ancillary India Ltd., Mumbai v. Addl.CIT Range 9(3), Mumbai

ITA 4232/MUM/2004 | 2000-2001
Pronouncement Date: 30-04-2010

Appeal Details

RSA Number 423219914 RSA 2004
Assessee PAN AAACT3895R
Bench Mumbai
Appeal Number ITA 4232/MUM/2004
Duration Of Justice 5 year(s) 11 month(s) 5 day(s)
Appellant The Karsons Auto Ancillary India Ltd., Mumbai
Respondent Addl.CIT Range 9(3), Mumbai
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2010
Appeal Filed By Assessee
Bench Allotted F
Date Of Final Hearing 13-04-2010
Next Hearing Date 13-04-2010
Assessment Year 2000-2001
Appeal Filed On 25-05-2004
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F BEFORE SHRI N.V. VASUDEVAN (JM) & PRAMOD KUMAR (AM) I.T.A.NO. 4232/MUM/04 (ASSESSMENT YEAR : 2000-01) THAKKARSONS AUTO ANCILLARY INDIA LIMITED B-1/1 MAYUR MISCELLANEOUS APPLICATION KRUPA SOCIETY OPP GOKHALE SCHOOL SHIMPOLI ROAD BORIVALI WEST MUMBAI-400 092. VS. ACIT RANGE 9(3) AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. APPELLANT RESPONDENT PAN/GIR NO. : AAACT3895R ASSESSEE BY : SHRI FARROQ IRANI DEPARTMENT BY : SHRI V. OJHA ORDER PER N.V. VASUDEVAN JM :- THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 23.3.2004 OF LEARNED CIT(A) IX MUMBAI RELATING T O A.Y. 2000-01. 2. FIRST ISSUE THAT ARISES FOR CONSIDERATION IN THI S APPEAL BY THE ASSESSEE IS AS TO WHETHER THE LEARNED CIT(A) WAS JU STIFIED IN CONFIRMING THE DISALLOWANCE OF BROKERAGE EXPENSES OF RS. 1 00 000/- MADE BY THE ASSESSING OFFICER. 3. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINES S OF MANUFACTURING OF AUTOMOBILE COMPONENTS CHASIS ASSE MBLY. THE ASSESSEE CLAIMED AS A DEDUCTION WHILE COMPUTING INC OME A SUM OF RS. 1 00 000/- BEING BROKERAGE PAID TO ONE MR. JYOTINDR A T. DOSHI. THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO FURNI SH PROOF OF PAYMENT COPY OF LEDGER ACCOUNT DETAILS OF NATURE OF SERVIC ES RENDERED FOR WHICH THAKKARSONS AUTO ANCILLARY 2 BROKERAGE WAS PAID. IN RESPONSE TO THE QUERY OF THE ASSESSING OFFICER THE ASSESSEE SUBMITTED THAT IT WAS PROCURING RAW MATERI AL FROM TATA IRON & STEEL CO. LIMITED (TISCO). MR. DOSHI LIAISED BETWEE N TISCO AND THE ASSESSEE TO ENSURE THAT THE ASSESSEE RECEIVES RAW M ATERIAL AS AND WHEN THE SAME IS REQUIRED BY THE ASSESSEE. IT WAS IN CO NNECTION WITH SUCH SERVICES THAT THE BROKERAGE WAS PAID. IT IS NOT IN DISPUTE THAT THE PAYMENT TO MR. DOSHI WAS MADE BY CHEQUES. THE ASSES SEE DID NOT PRODUCE ANY EVIDENCE REGARDING NATURE OF SERVICES R ENDERED BY MR.DOSHI AND THEREFORE THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION. THE LEARNED CIT(A) CONFIRMED THE ORD ER OF THE ASSESSING OFFICER HOLDING THAT THE ASSESSEE DID NOT FURNISH A NY EVIDENCE REGARDING NATURE OF SERVICES RENDERED BY MR. DOSHI. AGGRIEVE D BY THE ORDER OF LEARNED CIT(A) THE ASSESSEE HAS RAISED GROUND NO. 1 BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE SUBMISSIONS OF LEARNED COUNSEL FOR THE ASSESSEE WHO SUBMITTED THAT MR. DOSHI WAS AN UNREL ATED PARTY AND THAT THE PAYMENT OF BROKERAGE WAS MADE BY CHEQUE. IT WAS ALSO SUBMITTED THAT THE BUSINESS PROFIT OF THE ASSESSEE WAS ABOUT RS.3.5 CRORES AND THERE CANNOT BE ANY REASON AS TO WHY THE ASSESSEE SHOULD MAKE A FALSE CLAIM FOR DEDUCTION OF A SUM OF RS. 1 LAKH. WE ARE OF THE VIEW THAT SUCH GENERAL SUBMISSION WILL NOT BE S UFFICIENT TO ALLOW THE CLAIM OF THE ASSESSEE. THE ONUS WAS ON THE ASSESSE E TO PROVE THE NATURE OF SERVICE RENDERED BY MR. DOSHI FOR WHICH BROKERAG E WAS PAID. ADMITTEDLY NO EVIDENCE WHAT SO EVER HAS BEEN PRODU CED BY THE ASSESSEE. IN SUCH CIRCUMSTANCES WE ARE OF THE VIEW THAT THE DISALLOWANCE OF COMMISSION WAS JUSTIFIED. WE THEREFORE UPHOLD THE O RDER OF LEARNED CIT(A). 5. NEXT ISSUE THAT ARISES FOR CONSIDERATION IS AS T O WHETHER LEARNED CIT(A) WAS JUSTIFIED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER EXCLUDING BANK INTEREST OF RS. 27 88 107/- FROM THE PROFITS OF THE BUSINESS WHILE COMPUTING DEDUCTION U/S. 80IA OF THE ACT. WE ARE OF THE VIEW THAT THE CLAIM OF THE ASSESSEE WAS RIGHTLY REJ ECTED BY THE REVENUE THAKKARSONS AUTO ANCILLARY 3 AUTHORITIES. ADMITTEDLY INTEREST EARNED BY THE ASS ESSEE WAS ON FIXED DEPOSITS WHICH WERE MADE OUT OF PROFITS EARNED BY T HE ASSESSEE. THE INDUSTRIAL UNDERTAKING IS NOT SOURCE OF THE INTERES T INCOME EARNED BY THE ASSESSEE. THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF PANDIAN CHEMICALS 262 ITR 278 AND THE RECENT DECISION OF H ON'BLE SUPREME IN THE CASE OF LIBERTY INDIA LTD. 317 ITR 218 CLEARLY SUPPORT THE STAND OF THE REVENUE THAT INTEREST ON FD CANNOT BE SAID TO B E DERIVED FROM INDUSTRIAL UNDERTAKING SO AS TO ELIGIBLE FOR DEDUCT ION U/S. 80IA OF THE ACT. WE THEREFORE CONFIRM THE ORDER OF LEARNED CIT( A). 6. OTHER ISSUES RAISED BY THE ASSESSEE IN GROUND NO . 3 DOES NOT ARISE OUT OF ORDER LEARNED CIT(A). 7. IN THE RESULT APPEAL BY THE ASSESSEE IS DISMISS ED. ORDER HAS BEEN PRONOUNCED ON 30 TH DAY OF APRIL 2010. SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER SD/- (N.V. VASUDEVAN) JUDICIAL MEMBER DATED : 30 TH APRIL 2010 COPY TO : 1. THE ASSESSEE 2. THE RESPONDENT 3. THE CIT(A)-CONCERNED. 4. THE CIT CONCERNED. 5. THE DR CONCERNED MUMBAI 6. GUARD FILE BY ORDER TRUE COPY ASSTT. REGISTRAR ITAT MUMBAI PS