JT CIT (OSD) 2(2), MUMBAI v. THE MANJIRI STUD FARM P.LTD, MUMBAI

ITA 4807/MUM/2012 | 2009-2010
Pronouncement Date: 10-11-2017 | Result: Dismissed

Appeal Details

RSA Number 480719914 RSA 2012
Assessee PAN AAACT1947J
Bench Mumbai
Appeal Number ITA 4807/MUM/2012
Duration Of Justice 5 year(s) 3 month(s) 21 day(s)
Appellant JT CIT (OSD) 2(2), MUMBAI
Respondent THE MANJIRI STUD FARM P.LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 10-11-2017
Appeal Filed By Department
Tags No record found
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 10-11-2017
Date Of Final Hearing 28-04-2015
Next Hearing Date 28-04-2015
First Hearing Date 28-04-2015
Assessment Year 2009-2010
Appeal Filed On 20-07-2012
Judgment Text
1 MANJARI STUD FARM PVT LTD IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C MUMBAI BEFORE SHRI D.T. GARASIA (JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) I.T.A NO.3842/MUM/2012 - AY 2008-09 I.T.A NO.4329/MUM/2012 - AY 2009-10 THE MANJARI STUD FARM PVT LTD 41/44 SHAPOORJI PALLONJI CENTRE MINOO DESAI MARG COLABA MUMBAI-400 005 PAN :AAACT1947J VS THE JOINT CIT-2(2)(4) MUMBAI APPELLANT RESPONDEDNT I.T.A NO.4807/MUM/2012 (ASSESSMENT YEAR 2009-10) THE JOINT CIT(OSD) CIRCLE- 2(2)(4) MUMBAI J VS THE MANJARI STUD FARM PVT LTD 41/44 SHAPOORJI PALLONJI CENTRE MINOO DESAI MARG COLABA MUMBAI-400 005 PAN :AAACT1947 APPELLANT RESPONDEDNT ASSESSEE BY SHRI CHETAN KARIA REVENUE BY SHRI R.S. ARNEJA (CIT-DR) / SHRI SUMAN KUMAR DATE OF HEARING 26-09-2017 DATE OF PRONOUNCEMENT 10-11-2017 O R D E R PER G MANJUNATHA AM : THESE CROSS APPEALS BY THE ASSESSEE AND THE REVEN UE FOR THE ASSESSMENT YEAR 2009-10 AND THE APPEAL FILED BY THE ASSESSEE F OR THE ASSESSMENT YEAR 2 MANJARI STUD FARM PVT LTD 2008-09 ARE DIRECTED AGAINST SEPARATE BUT IDENTICA L ORDERS OF THE CIT(A)-5 MUMBAI DATED 25-04-2012 AND 01-03-2012 FOR THE ASSE SSMENT YEARS 2008-09 & 2009-10. SINCE THE FACTS ARE IDENTICAL AND ISSU ES ARE COMMON IN THESE APPEALS FOR THE SAKE OF CONVENIENCE THEY WERE HEA RD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER. 2. THE BRIEF FACTS OF THE CASE EXTRACTED FROM ITA NO.4 807/MUM/2012 ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINES S OF DEVELOPMENT OF INFORMATION TECHNOLOGY INFRASTRUCTURE SERVICES DE VELOPMENT OF RESIDENTIAL TOWNSHIP AND DEVELOPMENT OF SPECIAL ECONOMIC ZONES FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ON 29-09-200 9 DECLARING TOTAL INCOME AT NIL. THE CASE WAS SELECTED FOR SCRUTINY AND NOT ICES U/S 143(2) DATED 24-08- 2010 AND U/S 142(1) DATED 08-02-2011 ALONG WITH QUE STIONNAIRE WERE ISSUED CALLING FOR VARIOUS DETAILS. IN RESPONSE TO NOTICE S THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED FROM TIME T O TIME AND FURNISHED THE DETAILS AS CALLED FOR. THE ASSESSMENT WAS COMPLET ED U/S 143(3) ON 29-12-2011 DETERMINING THE TOTAL INCOME AT RS.179 50 73 585 IN TERALIA MAKING ADDITIONS / DISALLOWANCES TOWARDS UNEXPLAINED SHARE CAPITAL EX PENSES ATTRIBUTABLE TO INCOME FROM HOUSE PROPERTY PROFESSIONAL FEES TO BE AMORTISED DEPRECIATION ON SERVICE APARTMENTS INTEREST DISALLOWANCE ON ASS ETS NOT PUT TO USE AND UNEXPLAINED CREDITS. AGGRIEVED BY THE ASSESSMENT ORDER THE ASSESSEE 3 MANJARI STUD FARM PVT LTD PREFERRED APPEAL BEFORE THE CIT(A). 3. BEFORE THE CIT(A) THE ASSESSEE HAS FILED ELABORATE WRITTEN SUBMISSIONS TO CHALLENGE EACH AND EVERY ADDITIONS MADE BY THE AO. THE CIT(A) FOR THE DETAILED REASONS RECORDED IN HIS ORDER DATED 25-04- 2012 PARTLY ALLOWED APPEAL FILED BY THE ASSESSEE WHEREIN HE SUSTAINED ADDITIO NS TOWARDS DISALLOWANCE OF PROPORTIONATE EXPENSES ATTRIBUTABLE TO INCOME FROM HOUSE PROPERTY DEPRECIATION ON SERVICE APARTMENTS INTEREST DISALL OWANCE ON ASSETS NOT PUT TO USE; HOWEVER DELETED ADDITIONS MADE BY THE AO TOWA RDS PROFESSIONAL FEES TO BE AMORTISED UNEXPLAINED CREDITS AND ADDITION TOWA RDS SHARE CAPITAL U/S 68 OF THE INCOME-TAX ACT 1961. AGGRIEVED BY THE ORDER O F CIT(A) THE ASSESSEE AS WELL AS THE REVENUE ARE IN APPEAL BEFORE US. I.T.A NO.4807/MUM/2012 4. THE REVENUE IN ITS APPEAL HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1.(A) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (A) ERRED IN COMING TO THE CONCLUS ION THAT THE SHARE CAPITAL CONTRIBUTION AMOUNTING TO US $ 2 02 6 2 114 EQUIVALENT TO INR 168 00 78 431/- BY M/S. STRAND DE VELOPERS MAURITIUS LTD. STANDS EXPLAINED BY THE COMMUNICATI ONS DATED 22- 12-2011 OF MAURITIUS REVENUE AUTHORITY WITHOUT SCR UTINISING AND BRINGING ON RECORD THE REASONS FOR THE DIFFERENCE I N THE COMMUNICATION OF MAURITIUS REVENUE AUTHORITY DATED 21-1 1-201 1 ON WHICH THE ADDITION U/S. 68 HAD BEEN MADE AND T HE LATER COMMUNICATION DATED 22-12-201 1.' (B) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) ERRED IN TECHNICALLY NOT GIVING AN OPPOR TUNITY TO THE A.O TO COMMENT ON THE DIFFERENCE BETWEEN THE TWO COMMUNICATIONS OF MAURITIUS REVENUE AUTHORITY AND D RAWING A 4 MANJARI STUD FARM PVT LTD UNILATERAL CONCLUSION.' 1. (A) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) ERRED IN COMING TO A CONCLUSION THAT THE ASSESSEE HAD DISCHARGED THE ONUS RELYING UPON THE RECONCILI ATION PROVIDED BY THE APPELLANT ASSESSEE WHEN THERE WERE NO THORO UGH ENQUIRIES MADE UNDER SECTION 250(4) EITHER BY HIMSE LF OR THROUGH THE A.O.' (B) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) ERRED IN FAILING TO FOLLOW PRINCIPLES OF NATURAL JUSTICE BY FAILING TO PROVIDE AN OPPORTUNITY TO THE A.O. TO RE BUT THE EVIDENCE FURNISHED BY THE ASSESSEE DURING THE APPELLATE PROC EEDINGS III CLEW CONTRAVENTION OF RULE 46A OF INCOME TAX RULES. ' 5. THE FIRST ISSUE THAT CAME UP FOR OUR CONSIDERATION IS ADDITION TOWARDS SHARE CAPITAL U/S 68 OF THE ACT. THE LD.DR SUBMITT ED THAT THE LD.CIT(A) ERRED IN COMING TO THE CONCLUSION THAT SHARE CAPITAL CONTRIB UTION AMOUNTING TO US$2 02 62 114 EQUIVALENT TO INR 168 78 00 431 OF M /S STRAND DEVELOPERS MAURITIUS LTD STANDS EXPLAINED BY THE COMMUNICATION S DATED 22-12-2011 OF MAURITIUS REVENUE AUTHORITIES WITHOUT SCRUTINIZING AND BRINGING ON RECORD THE REASONS FOR THE DIFFERENCE IN THE COMMUNICATION OF MAURITIUS REVENUE AUTHORITIES DATED 21-11-2011 ON WHICH ADDITION U/S 68 HAD BEEN MADE. THE LD.DR FURTHER SUBMITTED THAT THE LD.CIT(A) ERRED IN TECHNICALLY NOT GIVING OPPORTUNITY TO THE AO TO COMMENT ON THE DIFFERENCE BETWEEN THE TWO COMMUNICATIONS OF MAURITIUS REVENUE AUTHORITIES AND DRAWING A UNILATERAL 5 MANJARI STUD FARM PVT LTD CONCLUSION. THE CIT(A) ERRED IN COMING TO THE CONC LUSION THAT THE ASSESSEE HAD DISCHARGED THE ONUS CAST UPON IT RELYING UPON THE R ECONCILIATION PROVIDED BY THE ASSESSEE WITHOUT THERE BEING NO ENQUIRY MADE EI THER BY HIMSELF OR THROUGH THE AO. THE LD.DR FURTHER SUBMITTED THT THE INITIA L COMMUNICATION RECEIVED FROM MAURITIUS REVENUE AUTHORITIES ON 21-11-2011 CO NTAINS INCOME-TAX RETURNS FILED BY STRAND DEVELOPERS MAURITIUS LTD WI TH MAURITIUS REVENUE AUTHORITIES DOES NOT INDICATE ANY INVESTMENT BY THE CREDITOR IN THE ASSESSEE COMPANY. THE LETTER RECEIVED FROM THE MAURITIUS RE VENUE AUTHORITIES CLEARLY STATES THAT THE COMPANY HAD FILED INCOME-TAX RETURN S AS PER WHICH IT HAS RETURNED A NET LOSS OF MAURITIUS RS.3 802 AND THE B ALANCE-SHEET ATTACHED WITH THE COMMUNICATION DOES NOT SHOW ANY INVESTMENT IN T HE ASSESSEE COMPANY. THE SUBSEQUENT INCOME-TAX RETURN FILED BY STRAND DE VELOPERS MAURITIUS LTD THOUGH CONTAINS THE DETAILS OF INVESTMENT IN INDIAN COMPANY THE SAID DOCUMENT HAS NOT BEEN RELIED UPON BY THE AO BECAUSE IT HAD NOT BEEN RECEIVED THROUGH PROPER CHANNEL. THE LD.DR FURTHER SUBMITTED THAT ANY INFORMATION WITH REGARD TO THE INVESTMENT FROM OUTS IDE INDIA VERIFICATION CAN BE CONDUCTED THROUGH FT & TR DIVISION OF DEPARTMENT OF REVENUE UNDER THE MINISTRY OF FINANCE AS THE SAID AUTHORITY IS THE DE SIGNATED AUTHORITY UNDER THE BILATERAL TREATY WITH EACH COUNTRY U/S 90 OF THE IN COME-TAX ACT 1961. THE INITIAL COMMUNICATION RECEIVED FROM THE MAURITIUS R EVENUE AUTHORITIES 6 MANJARI STUD FARM PVT LTD THROUGH FT & TR CLEARLY ESTABLISHES A FACT THAT STR AND DEVELOPERS MAURITIUS LTD DOES NOT HAVE CAPACITY TO INVEST SUCH A HUGE AMOUNT IN THE ASSESSEE COMPANY. THEREFORE THE AO CAME TO THE CONCLUSION THAT THE A SSESSEE HAS NOT DISCHARGED THE ONUS OF PROVING THE CAPACITY AND CREDITWORTHINE SS OF THE INVESTOR. THOUGH THE SUBSEQUENT COMMUNICATION RECEIVED FROM MAURITIU S REVENUE AUTHORITIES THROUGH PROPER CHANNEL INDICATES INVESTMENT IN ASSE SSEE COMPANY BY STRAND DEVELOPERS MAURITIUS LTD THE REASONS FOR DIFFERENC E BETWEEN THE TWO COMMUNICATIONS RECEIVED FROM MAURITIUS REVENUE AUTH ORITIES HAS NOT BEEN EXPLAINED BY THE ASSESSEE TO THE SATISFACTION OF TH E AO. THE CIT(A) WITHOUT CONDUCTING ANY FURTHER ENQUIRY WITH REGARD TO THE C OMMUNICATION RECEIVED FROM MAURITIUS REVENUE AUTHORITIES AND ALSO WITHOUT AFFORDING ANY OPPORTUNITY TO THE AO TO OFFER HIS COMMENTS ON SUCH DEVIATION DELETED ADDITION MADE BY THE AO TOWARDS SHARE CAPITAL SIMPL Y ON THE BASIS OF SECOND COMMUNICATION RECEIVED FROM MAURITIUS REVENUE AUTHO RITIES BY HOLDING THAT THE ASSESSEE HAS PROVED THE GENUINENESS AND CREDITW ORTHINESS OF THE PARTY. 6. THE LD.AR FOR THE ASSESSEE ON THE OTHER HAND STRO NGLY SUPPORTED THE ORDER OF THE CIT(A) AND SUBMITTED THAT THE LD.CIT(A ) DELETED THE ADDITION MADE BY THE AO TOWARDS SHARE CAPITAL U/S 68 OF THE ACT ON THE BASIS OF LETTER DATED 22-12-2011 RECEIVED FROM MAURITIUS REVENUE AUTHORI TIES THROUGH PROPER CHANNEL I.E. THE FT & TR DIVISION OF DEPARTMENT OF REVENUE MINISTRY OF 7 MANJARI STUD FARM PVT LTD FINANCE WHICH IS THE AUTHORIZED AGENCY UNDER THE BI LATERAL TREATY WITH EACH COUNTRY BY INDIA U/S 90 OF THE INCOME-TAX ACT 1961 . THE COMMUNICATION RECEIVED FROM MAURITIUS REVENUE AUTHORITIES THROUGH FT & TR CLEARLY ESTABLISHES THE FACT THAT THE ASSESSEE COMPANY HAS RECEIVED SHARE CAPITAL AND SHARE APPLICATION MONEY FROM M/S STRAND DEVELOPERS MAURITIUS LTD. THE LD.AR FURTHER SUBMITTED THAT THE MAURITIUS REVENUE AUTHOR ITIES IN THEIR LETTER DATED 26-12-2011 EXPLAINED THE REASONS FOR DIFFERENCE IN EARLIER COMMUNICATION SENT VIDE LETTER DATED 21-11-2011 WHICH STATES THAT THE EARLIER LETTER SENT ALONG WITH THE INCOME-TAX RETURN FILED WITH MAURITIUS REVENUE AUTHORITIES WAS INCOMPLETE AND COMPUTER PRINT OUT OF THE RETURN WH ERE ALL THE DETAILS HAD THROUGH OVERSIGHT NOT BEEN INPUT. THE SUBSEQUENT C OMMUNICATION DATED 22- 12-2011 CONTAINS THE RETURN FILED BY M/S STRAND DEV ELOPERS MAURITIUS LTD WHICH ESTABLISHES THE FACT OF INVESTMENT IN ASSESSE E COMPANY. THE SAID COMMUNICATION ALSO FORWARDED THE FULL DETAILS LIKE NAME ADDRESS AND CITIZENSHIP OF DIRECTORS COPY OF SHARE CERTIFICATE ISSUED BY THE ASSESSEE BANK STATEMENTS OF M/S STRAND DEVELOPERS MAURITIUS LTD THE BUSINESS CUSTOMER INFORMATION AND ACCOUNT OPENING FORM OF HSBC BANK M AURITIUS LTD THE INCOME STATEMENT OF STRAND DEVELOPERS MAURITIUS LTD. ALL THESE DOCUMENTS WERE RECEIVED FROM THE MAURITIUS REVENUE AUTHORITIES WHI CH WAS FORWARDED BY THE UNDER SECRETARY (FT & TR) TO CBDT FTD DIVISION-II O N 10-01-2012. BASED ON 8 MANJARI STUD FARM PVT LTD THESE DETAILS THE CIT(A) HAS COME TO THE CONCLUSIO N THAT THE ASSESSEE HAS DISCHARGED THE IDENTITY GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF THE PARTIES. 7. THE LD.AR FURTHER SUBMITTED THAT UNDER THE PRESENT LAW IN CASE AMOUNT RECEIVED FROM OUTSIDE INDIA THE REQUIRED ENQUIRY T O BE CARRIED OUT BY THE AO SHOULD BE THROUGH FT & TR DIVISION OF DEPARTMENT OF REVENUE UNDER THE MINISTRY OF FINANCE AND HENCE THE AO CANNOT IGNORE THE DOCUMENTS RECEIVED THROUGH PROPER CHANNEL TO HOLD THAT THE ASSESSEE HA S FAILED TO DISCHARGE ITS ONUS IN PROVING THE CREDITS. NEITHER THE AO NOR T HE ASSESSEE HAD ANY POWER TO CAUSE NECESSARY ENQUIRY EXCEPT REQUESTING THE DE SIGNATED AUTHORITY. IN THIS CASE THE AO HAS RECEIVED THE INFORMATION THROUGH F T & TR DIVISION WHICH HAS BEEN FORWARDED BY THE AO TO THE CIT(A) IN THE APPEL LATE PROCEEDINGS AND THE CIT(A) HAS GIVEN OPPORTUNITY OF HEARING TO THE ASSE SSEE ON THE SAID COMMUNICATION WHICH IS EVIDENCED FROM THE FACT THAT THE CIT(A) IN HIS ORDER HAS CLEARLY STATED THAT HE HAD THE BENEFIT OF DISCU SSION WITH THE AO ON THE SUBJECT MATTER. THEREFORE THERE IS NO MERIT IN TH E ARGUMENT OF THE REVENUE THAT THE CIT(A) HAS DECIDED THE ISSUE WITHOUT CONDU CTING NECESSARY ENQUIRIES AND ALSO NOT GIVING PROPER OPPORTUNITY TO THE AO. THE ASSESSEE HAS FULLY DISCHARGED ITS ONUS BY FURNISHING NECESSARY EVIDEN CE TO PROVE THE GENUINENESS OF SHARE CAPITAL RECEIVED FROM M/S STRAND DEVELOPER S MAURITIUS LTD AND HENCE 9 MANJARI STUD FARM PVT LTD THE CIT(A) WAS RIGHT IN DELETING THE ADDITION MADE BY THE AO AND HIS ORDER SHOULD BE UPHELD. 8. WE HAVE HEARD BOTH THE PARTIES PERUSED THE MATERIA L AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE AO MADE ADDITION TOWARDS SHARE CAPITAL ON THE GROUND THAT THE ASSESS EE HAS FAILED TO DISCHARGE ONUS CAST UPON IT BY FILING NECESSARY EVIDENCE TO P ROVE GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES. THE AO NEVER DISPUTED THE IDENTITY OF THE SHAREHOLDER. THE AO HAS ACCEPTED T HE FACT THAT THE ASSESSEE HAS RECEIVED SHARE CAPITAL AS WELL AS SHARE APPLICA TION MONEY FROM M/S STRAND DEVELOPERS MAURITIUS LTD. THE AO MADE ADDITION SOL ELY ON THE BASIS OF COMMUNICATION RECEIVED FROM MAURITIUS REVENUE AUTHO RITIES WHICH SUGGEST THAT THE MAURITIUS COMPANY DID NOT HAVE FUNDS TO MA KE INVESTMENT IN ASSESSEE COMPANY. BASED ON THE REPLY AND EVIDENCES FURNISHED BY THE FT & TR DEPARTMENT OF REVENUE THE AO CAME TO THE CONCL USION THAT THE ASSESSEE HAS FAILED TO DISCHARGE CAPACITY AND CREDITWORTHINE SS OF THE SHAREHOLDER. THE CONTENTION OF THE ASSESSEE IS THAT IT HAS DISCHARGE D THE INITIAL ONUS CAST UPON IT BY PROVING IDENTITY GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE PARTY. THE ASSESSEE FURTHER CONTENDED THAT THOUGH INITIAL COMMUNICATION RECEIVED FROM MAURITIUS REVENUE AUTHORITIES DID NOT CONTAIN FULL DETAILS ABOUT INVESTMENT MADE BY M/S STRAND DEVELOPERS MAURITIUS LTD SUBSEQUENT 10 MANJARI STUD FARM PVT LTD COMMUNICATION RECEIVED ON 21-12-2011 FROM MAURITIUS REVENUE AUTHORITIES PROVES THE FACT OF INVESTMENT MADE BY M/S STRAND DE VELOPERS MAURITIUS LTD IN THE SHARE CAPITAL AND SHARE APPLICATION MONEY OF TH E ASSESSEE COMPANY. THE ASSESSEE FURTHER CONTENDED THAT THE MAURITIUS REVEN UE AUTHORITIES IN THEIR LETTER DATED 21-12-2011 HAS CLARIFIED THE REASONS F OR DIFFERENCE FOR TWO COMMUNICATIONS SENT ABOUT M/S STRAND DEVELOPERS MAU RITIUS LTD AND ALSO CLARIFIED SUCH DIFFERENCE IN THE EARLIER COMMUNICAT ION IS ON ACCOUNT OF INCOMPLETE COMPUTER PRINT OUT OF THE RETURN WHERE A LL DETAILS HAD THROUGH OVERSIGHT HAD NOT BEEN CONSIDERED. THE MAURITIUS R EVENUE AUTHORITIES HAS SENT A SUBSEQUENT COMMUNICATION AS PER THE REQUEST OF THE AO THOUGH IT HAS RECEIVED BY THE AO SUBSEQUENT TO COMPLETION OF ASSE SSMENT THE SAID COMMUNICATION RECEIVED FROM THE DIRECTOR GENERAL OF MAURITIUS REVENUE AUTHORITIES CONTAINS ALL NECESSARY DETAILS REQUIRED BY THE AO LIKE NAME ADDRESS AND CITIZENSHIP OF DIRECTORS COPY OF SHARE CERTIFICATE ISSUED BY THE ASSESSEE COMPANY INCOME-TAX RETURN FILED BY MAURIT IUS COMPANY WITH MAURITIUS REVENUE AUTHORITIES BANK STATEMENTS OF M /S STRAND DEVELOPERS MAURITIUS LTD THE BUSINESS CUSTOMER INFORMATION CU M ACCOUNT OPENING FORM OF HSBC MAURITIUS LTD AND FINANCIAL STATEMENT OF M/ S STRAND DEVELOPERS MAURITIUS LTD FOR THE YEAR ENDED 31-03-2009. THE S AID COMMUNICATION HAS BEEN RECEIVED THROUGH PROPER CHANNEL THROUGH THE FT & TR DIVISION OF 11 MANJARI STUD FARM PVT LTD DEPARTMENT OF REVENUE MINISTRY OF FINANCE WHICH WA S FORWARDED BY THE UNDER SECRETARY FT & TR-II CBDT ON 10-01-2012 TO THE JURISDICTIONAL AO. THE AO HAS FORWARDED THE SECOND COMMUNICATION RECEIVED FROM THE MAURITIUS REVENUE AUTHORITIES TO THE CIT(A) IN THE REMAND REP ORT AND SUBMITTED THAT COPY OF RETURN AND BALANCE-SHEET FURNISHED BY MAURI TIUS REVENUE AUTHORITIES WAS FOUND TO BE CORRECT. 9. THE FACT WITH REGARD TO THE IDENTITY OF THE SHAREHO LDER M/S STRAND DEVELOPERS MAURITIUS LTD HAS NOT BEEN DISPUTED BY B OTH THE AUTHORITIES. THE AO HAS DISPUTED THE FACT THAT THERE IS A DIFFERENCE IN TWO COMMUNICATIONS RECEIVED FROM MAURITIUS REVENUE AUTHORITIES WHICH H AS NOT BEEN PROPERLY EXPLAINED BY THE ASSESSEE WITH NECESSARY EVIDENCES. THE AO HAS NEVER DISPUTED THE SUBSEQUENT COMMUNICATION RECEIVED FROM THE MAURITIUS REVENUE AUTHORITIES THROUGH PROPER CHANNEL. THE AO ALSO NO T DISPUTED THE FACT THAT SUCH COMMUNICATIONS CAN BE RECEIVED ONLY THROUGH FT & TR DIVISION DEPARTMENT OF REVENUE MINISTRY OF FINANCE AS THE S AID AUTHORITY IS THE DESIGNATED AUTHORITY UNDER THE BILATERAL TREATY WIT H EACH COUNTRY BY INDIA U/S 90 OF THE INCOME-TAX ACT 1961. THE SECOND COMMUNI CATION RECEIVED FROM THE MAURITIUS REVENUE AUTHORITIES CONTAINS FULL DETAILS SOUGHT BY THE AO INCLUDING THE NAME ADDRESS AND CITIZENSHIP OF DIRECTORS COP Y OF SHARE CERTIFICATE ISSUED BY THE ASSESSEE COMPANY INCOME-TAX RETURN FILED BY MAURITIUS COMPANY WITH 12 MANJARI STUD FARM PVT LTD MAURITIUS REVENUE AUTHORITIES BANK STATEMENTS OF M /S STRAND DEVELOPERS MAURITIUS LTD THE BUSINESS CUSTOMER INFORMATION CU M ACCOUNT OPENING FORM OF HSBC MAURITIUS LTD AND FINANCIAL STATEMENT OF M/ S STRAND DEVELOPERS MAURITIUS LTD. THE AO ALSO NOT DISPUTED THE FACT T HAT THE REASONS FOR DIFFERENCE IN TWO COMMUNICATIONS SENT BY THE MAURIT IUS REVENUE AUTHORITIES HAS BEEN CLARIFIED BY THE DIRECTOR GENERAL OF MAURI TIUS REVENUE AUTHORITIES IN THEIR COMMUNICATION DATED 21-12-2011 WHICH HAS BEEN EXTRACTED BY THE CIT(A) IN HIS ORDER AT PARA 3.4.1. THE OTHER DOCUMENTS SE NT BY THE MAURITIUS REVENUE AUTHORITIES HAS ALSO BEEN LISTED BY THE CIT(A) IN T HE SAME PARAGRAPH. BY THESE DOCUMENTS A CLARIFICATION HAS BEEN RECEIVED FROM T HE DIRECTOR GENERAL OF MAURITIUS REVENUE AUTHORITIES WHICH WAS FORWARDED B Y THE UNDER SECRETARY FT & TR-II CBDT DIRECTLY TO THE AO. THEREFORE WE ARE OF THE VIEW THAT THERE IS NO MERIT IN THE ARGUMENTS OF THE LD.DR THAT THE CIT (A) HAS NOT CONSIDERED THE NECESSITY OF FURTHER ENQUIRY WITH REGARD TO THE GEN UINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES. WE FURTHER ARE OF THE OPINION THAT ONCE COMMUNICATION RECEIVED FROM THE DESIGNATED AUTHORIT Y THROUGH FT & TR WHICH IS THE AUTHORIZED AGENCY FOR EXCHANGING INFORMATION BETWEEN TWO COUNTRIES U/S 90 OF THE INCOME-TAX ACT 1961 AND SUCH INFORMA TION HAS BEEN RECEIVED THROUGH PROPER CHANNEL THEN THERE IS NO SCOPE FOR THE AO AS WELL AS THE CIT(A) TO CONDUCT FURTHER ENQUIRIES WITH REGARD TO THE CRE DITWORTHINESS OF THE PARTIES. 13 MANJARI STUD FARM PVT LTD 10. COMING TO THE OTHER ARGUMENTS OF THE LD.DR. THE LD .DR SUBMITTED THAT THE CIT(A) HAS NOT GIVEN PROPER OPPORTUNITY TO THE AO TO COMMENT ON THE DIFFERENCE BETWEEN TWO COMMUNICATIONS RECEIVED FROM MAURITIUS REVENUE AUTHORITIES AND ALSO FAILED TO CONDUCT NECESSARY EN QUIRIES EITHER BY HIMSELF OR THROUGH AO WHICH VIOLATES RULE 46A OF THE INCOME-TA X RULES 1962. WE DO NOT FIND ANY MERIT IN THE ARGUMENT OF THE LD.DR FOR THE SIMPLE REASON THAT THE CIT(A) HAS RELIED UPON THE DOCUMENT RECEIVED THROUG H A DESIGNATED AUTHORITY WHICH HAS BEEN FORWARDED BY UNDER SECRETARY FT & T R-II CBDT DIRECTLY TO THE AO. THE AO HAS FORWARDED SUCH INFORMATION IN A CLO SED COVER TO THE CIT(A) AND ALSO STATED IN THE REMAND REPORT THAT THE INFOR MATION RECEIVED FROM THE MAURITIUS REVENUE AUTHORITIES INCLUDING THE FINANCI AL STATEMENT OF M/S STRAND DEVELOPERS MAURITIUS LTD WAS FOUND TO BE CORRECT. WE FURTHER NOTICE THAT THE CIT(A) HAS GIVEN A CATEGORICAL FINDING IN HIS ORDER TO THE EFFECT THAT HE HAD AN OCCASION TO DISCUSS WITH THE AO ON THE COMMUNICATIO N RECEIVED FROM THE MAURITIUS REVENUE AUTHORITIES AND HENCE THERE IS N O MERIT IN THE ARGUMENT OF THE REVENUE THAT THE CIT(A) HAS PASSED THE ORDER IN VIOLATION OF RULE 46A IN THE BACK OF THE AO. WE FURTHER NOTICE THAT THE COMMUNI CATION RECEIVED FROM THE MAURITIUS REVENUE AUTHORITIES HAS PROVED THE FACT T HAT M/S STRAND DEVELOPERS MAURITIUS LTD HAS INVESTMENT IN THE SHARE CAPITAL O F THE ASSESSEE COMPANY AND ALSO THAT SUCH INVESTMENT HAS BEEN DISCLOSED IN THE IR INCOME-TAX RETURN FILED 14 MANJARI STUD FARM PVT LTD WITH THE MAURITIUS REVENUE AUTHORITIES. WE FURTHER NOTICE THAT THE LETTER OF THE MAURITIUS REVENUE AUTHORITIES DATED 21-12-2011 FORWARDED BY THE FT & TR DIVISION TO THE COMMISSIONER VIDE LETTER DATED 28-1 2-2011 CLEARLY STATED TO THE COMMISSIONER OF INCOME-TAX THAT AFTER EXAMINING THE ABOVE RECEIVED INFORMATION IF ANY FURTHER INFORMATION IS REQUIRED THE SAME MAY BE INFORMED TO THEM. EVEN THE SECOND LETTER OF THE MAURITIUS R EVENUE AUTHORITIES DATED 26-12-2011 WAS FORWARDED BY FT & TR DIVISION TO THE AO AGAIN CLEARLY STATED TO THE AO THAT IF ANY FURTHER INFORMATION WAS REQUI RED THE SAME MAY BE INFORMED TO THEM. THE AO AFTER RECEIPT OF INFORMA TION FROM THE FT&TR DIVISION HAS NOT CHOSEN TO CALL FOR ANY OTHER INFOR MATION WITH REGARD TO THE AMOUNT RECEIVED FROM M/S STRAND DEVELOPERS MAURITIU S LTD AND NOW ACCUSING THE CIT(A) OF NOT GIVING PROPER OPPORTUNITY TO COMM ENT ON THE DIFFERENCE BETWEEN THE TWO COMMUNICATIONS OF MAURITIUS REVENUE AUTHORITIES. WE FURTHER OBSERVE THAT THE REASONS FOR DIFFERENCE BET WEEN TWO COMMUNICATIONS SENT BY MAURITIUS REVENUE AUTHORITIES HAS BEEN CLAR IFIED BY THE DIRECTOR GENERAL OF MAURITIUS REVENUE AUTHORITIES IN THEIR S ECOND COMMUNICATION DATED 21-12-2011 WHICH CLEARLY STATES THAT THE INIT IAL COMMUNICATION SENT ALONG WITH INCOME-TAX RETURN OF M/S STRAND DEVELOPE RS MAURITIUS LTD IS INCOMPLETE AND ALSO SUBSEQUENT INCOME-TAX RETURN CO PY IS A FULL FLEDGED RETURN FILED BY THE ASSESSEE WHICH CLEARLY ESTABLISHES INV ESTMENT MADE IN ASSESSEE 15 MANJARI STUD FARM PVT LTD COMPANY. THE OTHER DETAILS LIKE SHARE CERTIFICATE ISSUED BY THE ASSESSEE COMPANY AND BANK STATEMENT OF M/S STRAND DEVELOPERS MAURITIUS LTD CLEARLY ESTABLISHES RECEIPT OF MONEY BY THE ASSESSEE COMPAN Y. THE ASSESSEE ALSO FURNISHED COPIES OF FCGPR AND OTHER COMPLIANCES WIT H RESPECT TO RBI AND FOREIGN INWARD REMITANCE CERTIFICATE WHICH CLEARLY PROVES THE IDENTITY GENUINENESS OF TRANSACTIONS OF INVESTMENT RECEIVED FROM M/S STRAND DEVELOPERS MAURITIUS LTD. THE SUBSEQUENT COMMUNICA TION RECEIVED FROM MAURITIUS REVENUE AUTHORITIES ALONGWITH THE INCOME- TAX RETURN FURTHER PROVE THE FACT OF CREDITWORTHINESS OF THE SHARE AND CAPAC ITY TO INVEST IN ASSESSEE COMPANY. THEREFORE WE ARE OF THE CONSIDERED VIEW THAT THE AO WAS INCORRECT IN HOLDING THAT THE ASSESSEE HAS FAILED TO DISCHARG E THE GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES. THE CIT(A) AFTER CONSIDERING RELEVANT FACTS HAS RIGHTLY DELETED ADDITIONS MADE B Y THE AO TOWARDS SHARE CAPITAL RECEIVED FROM M/S STRAND DEVELOPERS MAURITI US LTD. WE DO NOT FIND ANY ERROR OR INFIRMITY IN THE ORDER OF CIT(A). HEN CE WE ARE INCLINED TO UPHOLD THE ORDER OF CIT(A) AND DISMISS THE GROUND RAISED B Y THE REVENUE. 11. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS D ISMISSED. ITA NO. 3842/MUM/2012 & ITA NO.4329/MUM/2012 ASSE SSEES APPEALS 12. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATION F ROM ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2008-09 AND 2009-10 IS DISA LLOWANCE OF PROPORTIONATE 16 MANJARI STUD FARM PVT LTD ADMINISTRATIVE AND OTHER SALES AND MARKETING EXPENS ES ATTRIBUTABLE TO INCOME FROM HOUSE PROPERTY. THE FACTUAL MATRIX OF THE IMP UGNED ADDITION ARE THAT THE ASSESSEE COMPANY IS IN THE BUSINESS OF DEVELOPING A ND RENDERING INFORMATION TECHNOLOGY AND INFRASTRUCTURE PARK CALLED OZONE IT PARK AT PUNE. THE ASSESSEE GENERALLY ENTERS INTO TWO SEPARATE AGREEME NTS ONE FOR LETTING OUT OF PREMISES AND ANOTHER ONE FOR LETTING OUT OF AMENITI ES . INCOME FROM LETTING OUT OF PREMISES IS OFFERED TO TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND INCOME FROM LETTING OUT OF AMENITIES IS OFFERED TO TAX UNDER THE HEAD INCOME FROM BUSINESS OR PROFESSION. THE ASSESSEE HAS PREP ARED CONSOLIDATED BOOKS OF ACCOUNT FOR ITS BUSINESS ACTIVITY. THE ASSESSEE HA S CLAIMED VARIOUS EXPENDITURE IN THE P&L ACCOUNT PREDOMINANTLY MOST OF THE EXPEN DITURE ARE IN THE NATURE OF GENERAL ADMINISTRATION AND OTHER EXPENSES. THE EXPENSES SPECIFICALLY RELATES TO INCOME FROM HOUSE PROPERTY HAS BEEN SUO MOTO DISALLOWED BY THE ASSESSEE IN THE COMPUTATION OF INCOME. THE ASSESSE E HAS TREATED INCOME FROM LETTING OUT OF PREMISES UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND COMPUTED INCOME BY ALLOWING STATUTORY DEDUCTIONS PR OVIDED U/S 24(A) & (B). DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO CALLED UPON THE ASSESSEE TO EXPLAIN AS TO WHY ADMINISTRATIVE AND OTHER EXPEN SES SHOULD NOT BE PROPORTIONATELY DISALLOWED IN PROPORTION TO INCOME FROM HOUSE PROPERTY AND INCOME FROM BUSINESS. IN RESPONSE TO THE SHOW CAUS E NOTICE THE ASSESSEE 17 MANJARI STUD FARM PVT LTD SUBMITTED THAT IT HAS DISALLOWED EXPENSES SPECIFICA LLY RELATED TO THE ACTIVITY OF INCOME FROM HOUSE PROPERTY IN THE COMPUTATION OF IN COME. THE ASSESSEE FURTHER CONTENDED THAT THE REMAINING EXPENSES ARE I N THE NATURE OF GENERAL ADMISTRATIVE AND OTHER EXPENSES BUT MAINLY INCURRE D IN THE BUSINESS ACTIVITY OF THE ASSESSEE THEREFORE NO FURTHER DISALLOWANCE IS CALLED FOR IN PROPORTION TO INCOME EARNED FROM THE ACTIVITY OF LETTING OUT OF P REMISES AND LETTING OUT OF FIT OUTS. 13. THE AO AFTER CONSIDERING THE EXPLANATION OF THE AS SESSEE OBSERVED THAT THE REVISED RETURN FILED BY THE ASSESSEE REJECTED I N VIEW OF THE FACT THAT IT HAS BARRED BY LIMITATION. THE AO FURTHER OBSERVED THAT THE ASSESSEES BUSINESS CONSISTS OF LETTING OUT OF PREMISES ALONGWITH FIT O UTS. THE ASSESSEE ITSELF HAS ADMITTED THE FACT THAT IN SOME CASES THE PREMISES WERE LET OUT ALONG WITH FIT OUTS AND IN SOME OTHER CASES ONLY PREMISES WERE LE T OUT. THE ASSESSEE COMPANY HAS ENTERED INTO SEPARATE AGREEMENTS FOR PR EMISES AND FIT OUTS. THE ASSESSEE HAS NOT MAINTAINED SEPARATE ACCOUNT FOR I TS BUSINESS ACTIVITY AND ITS INCOME FROM HOUSE PROPERTY. THE ASSESSEE HAS MAINT AINED CONSOLIDATED ACCOUNTS WHEREIN IT DEBITED VARIOUS EXPENDITURE INC LUDING EXPENDITURE ATTRIBUTABLE TO THE ACTIVITY OF INCOME FROM HOUSE P ROPERTY. THE ASSESSEE ALSO CLAIMED SEPARATE DEDUCTION U/S 24(A) @30% OF THE AN NUAL LETTING VALUE (ALV) IN COMPUTING INCOME FROM HOUSE PROPERTY. HOWEVER THE ASSESSEE HAS NOT 18 MANJARI STUD FARM PVT LTD DISALLOWED PROPORTIONATE EXPENDITURE DEBITED TO THE P&L ACCOUNT WHICH ARE RELATABLE TO THE ACTIVITY OF INCOME FROM HOUSE PROP ERTY. THEREFORE CONSIDERING THE TOTAL EXPENDITURE THE AO HAS WORKE D OUT PROPORTIONATE EXPENSES RELATABLE TO THE ACTIVITY OF INCOME FROM H OUSE PROPERTY AND DETERMINED TOTAL DISALLOWANCE OF RS.3 11 63 455. T HE AO HAS DETERMINED EXPENSES RELATABLE TO THE ACTIVITY OF INCOME FROM H OUSE PROPERTY ON THE BASIS OF INCOME EARNED BY THE ASSESSEE FROM VARIOUS HEADS OF INCOME. SINCE THE ASSESSEE HAS ALREADY DISALLOWED AN AMOUNT OF RS.1 1 7 97 918 THE BALANCE AMOUNT OF RS.1 93 65 537 HAS BEEN ADDED TO THE INCO ME OF THE ASSESSEE. 14. AGGRIEVED BY THE ASSESSMENT ORDER THE ASSESSEE PRE FERRED APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A) THE ASSESSEE HAS RE ITERATED ITS SUBMISSIONS MADE BEFORE THE AO. THE ASSESSEE FURTHER CONTENDED THAT THE AO WAS INCORRECT IN DISALLOWING PROPORTIONATE EXPENDITURE ON THE BASIS OF GROSS INCOME FROM VARIOUS HEADS OF INCOME IGNORING THE FACT THAT THE ASSESSEE ITSELF HAS DISALLOWED EXPENSES WHICH ARE DIRECTLY RELATABLE TO THE ACTIVITY OF INCOME FROM HOUSE PROPERTY WHILE COMPUTING THE INCOME FROM BUSI NESS. THE ASSESSEE FURTHER SUBMITTED THAT THE METHOD FOLLOWED BY THE A O TO DETERMINE THE DISALLOWANCE IS INCORRECT INASMUCH AS HE HAS TAKEN PROPORTIONATE DISALLOWANCES ON THE BASIS OF GROSS INCOME EXCLUDIN G CERTAIN EXPENSES ALREADY DISALLOWED BY THE ASSESSEE. THE CIT(A) AFTER CONS IDERING RELEVANT SUBMISSIONS 19 MANJARI STUD FARM PVT LTD OF THE ASSESSEE AND ALSO RELYING UPON THE DECISION OF SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD 328 ITR 323(SC) OBSERVED THAT THE ASSESSEE COULD HAVE CLAIMED DEDUCTION OF PROPERTY MAINTENANCE EXPE NSES U/S 37 OF THE I.T. ACT ONLY BY FILING A REVISED RETURN. SINCE THE ASS ESSEE HAS NOT FILED THE REVISED RETURN WITHIN THE TIME THE AO WAS RIGHT IN NOT ENT ERTAINING THE CLAIM OF THE ASSESSEE AND ALSO DISALLOWANCE OF PROPORTIONATE EXP ENSES OUT OF THE ADMINISTRATIVE AND SELLING AND OTHER EXPENSES WHICH ARE RELATABLE TO THE ACTIVITY OF INCOME FROM HOUSE PROPERTY. AGGRIEVED BY THE ORDER OF CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 15. THE LD.AR FOR THE ASSESSEE SUBMITTED THAT THE LD.CI T(A) WAS ERRED IN UPHOLDING THE DISALLOWANCE OF PROPERTY MAINTENANCE EXPENSES INCURRED BY THE ASSESSEE FOR THE PURPOSE OF EARNING INCOME TAXABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS ON THE GROUND THAT THE CLAIM OF THE ASSESSEE IS NOT MADE IN THE RETURN OF INCOME. THE LD.AR FURTHER SUBMITT ED THAT THE ASSESSEE ITSELF HAS DISALLOWED CERTAIN EXPENSES DIRECTLY ATTRIBUTAB LE TO THE ACTIVITY OF INCOME FROM HOUSE PROPERTY AND THE AO WHILE WORKING OUT PR OPORTIONATE DISALLOWANCE HAS NOT CONSIDERED THE EXPENSES ALREADY DISALLOWED BY THE ASSESSEE LIKE RATES AND TAXES PROPERTY MAINTENANCE EXPENSES DONATION AND PROFESSIONAL FEES. THE LD.AR FURTHER REFERRING TO THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF RAJASTHAN STATE WAREHOUSING CORPORATION VS CIT 242 ITR 451 (SC) 20 MANJARI STUD FARM PVT LTD SUBMITTED THAT ONCE THE ASSESSEE IS INTO THE UNDIVI SIBLE BUSINESS DISALLOWANCE OF ADMINISTRATIVE AND OTHER EXPENSES ON THE BASIS O F INCOME RECEIVED FROM VARIOUS ACTIVITIES CANNOT BE DISALLOWED. THE LD.AR FURTHER SUBMITTED THAT IF AT ALL DISALLOWANCE IS REQUIRED TOWARDS ADMINISTRATIVE AND OTHER EXPENSES DISALLOWANCES WORKED OUT BY THE AO IS INCORRECT AS HE DID NOT CONSIDER CERTAIN EXPENSES DISALLOWED SUO MOTU BY THE ASSESSEE IN THE RETURN OF INCOME AND EXPENSES IN NATURE OF CORPORATE AND ROUTINE EXPENSE S ALLOWABLE U/S 37 OF THE ACT THEREFORE IF AT ALL ANY EXPENDITURE IS DISALL OWABLE IT CAN BE DISALLOWED TO THE EXTENT OF RS.36 29 367 BUT NOT THE DISALLOWANCE WORKED OUT BY THE AO OF RS.1 17 97 918. THE ASSESSEE HAS FILED A PAPER BOO K EXPLAINING THE DEFECTS IN DISALLOWANCE WORKED OUT BY THE AO AND ALSO FILED CO PY OF DISALLOWANCE WORKED OUT EXPLAINING THE REASONS FOR EXCLUSION OF CERTAI N EXPENSES. 16. THE LD.DR ON THE OTHER HAND STRONGLY SUPPORTED TH E ORDER OF THE CIT(A). THE LD.DR FURTHER SUBMITTED THAT THE AO HAS RIGHTY WORKED OUT PROPORTIONATE EXPENSES AS THE ASSESSEE HAS FAILED TO DISALLOW EXP ENSES INCURRED IN RELATION TO INCOME FROM HOUSE PROPERTY OUT OF TOTAL ADMINISTRAT IVE AND OTHER EXPENSES INCURRED. THOUGH THE ASSESSEE HAS INCURRED VARIOUS EXPENDITURE FAILED TO DISALLOW EXPENSES RELATABLE TO THE ACTIVITY OF INCO ME FROM HOUSE PROPERTY EVEN THOUGH IT HAS CLAIMED SEPARATE DEDUCTIONS TOWARDS INCOME FROM HOUSE PROPERTY U/S 24(A) OF THE ACT. SINCE THE ASSESSEE HAS FAILED TO DISALLOW 21 MANJARI STUD FARM PVT LTD EXPENDITURE AND ALSO MAINTAINED A COMMON SET OF BOO KS OF ACCOUNT FOR BOTH THE ACTIVITIES THE AO WAS RIGHT IN DISALLOWING PRO PORTIONATE EXPENDITURE ON THE BASIS OF INCOME GENERATED FROM VARIOUS ACTIVITIES. 17. WE HAVE HEARD BOTH THE PARTIES PERUSED THE MATERIA LS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES B ELOW. THE AO HAS DISALLOWED PROPORTIONATE EXPENSES DEBITED IN THE P& L ACCOUNT ON THE BASIS OF INCOME EARNED FROM DIFFERENT HEADS OF INCOME. THE AO HAS DISALLOWED EXPENSES RELATABLE TO INCOME UNDER THE HEAD INCOM E FROM HOUSE PROPERTY ON THE GROUND THAT THE ASSESSEE HAS CLAIMED SEPARAT E DEDUCTIONS AS PROVIDED U/S 24(A) & 24(B) IN THE COMPUTATION OF INCOME UNDE R THE HEAD INCOME FROM HOUSE PROPERTY WHEREAS FAILED TO DISALLOW CORRESPO NDING EXPENDITURE DEBITED IN THE P&L ACCOUNT WHILE COMPUTING INCOME UNDER THE HEAD INCOME FROM BUSINESS. THE AO HAS DETERMINED TOTAL DISALLOWANC E OF RS.1 85 29 602 THE CALCULATION OF WHICH IS REPRODUCED IN THE ORDER OF CIT(A) AT PARA 3.3. ON PAGE 10. IT IS THE CLAIM OF THE ASSESSEE THAT WHILE COM PUTING DISALLOWANCE OF EXPENSES INCURRED IN RELATION TO HOUSE PROPERTY TH E AO HAS WRONGLY EXCLUDED EXPENDITURE SUOTO MOTO DISALLOWED BY THE ASSESSEE I N ITS COMPUTATION TO THE EXTENT OF RS.97 94 884 AS AGAINST TOTAL DISALLOWANC ES MADE BY THE ASSESSEE FOR RS.1 20 45 714. THE ASSESSEE FURTHER CONTENDED THA T IT HAD DISALLOWED EXPENSES LIKE RATES AND TAXES PROPERTY MAINTENANCE EXPENSES PROFESSIONAL 22 MANJARI STUD FARM PVT LTD FEES AND DONATIONS WHICH WORKS OUT TO RS.1 20 45 71 4. THE ASSESSEE HAS FILED WORKING EXPLAINING THE COMPUTATION FOR DISALLOWANCE BY THE AO AND ACTUAL DISALLOWANCES REQUIRED TO BE MADE WHILE COMPUTING I NCOME UNDER THE HEAD INCOME FROM BUSINESS. ACCORDING TO THE ASSESSEE THE AO HAS FAILED TO EXCLUDE RATES TAXES DONATION AND PROFESSIONAL FEES. THE A SSESSEE FURTHER CONTENDED THAT EXPENSES IN THE NATURE OF CORPORATE / ROUTINE EXPENSES ALLOWABLE U/S 37 EXCLUSIVELY PERTAINS TO BUSINESS ACTIVITY OF THE AS SESSEE ALSO HAS BEEN INCLUDED BY THE AO IN DETERMINING THE TOTAL DISALLOWANCES. THE ASSESSEE FURTHER CONTENDED THAT ALL EXPENSES RELATABLE TO THE ACTIVI TY OF INCOME FROM HOUSE PROPERTY HAS BEEN SUO MOTO DISALLOWED BY IT IN THE COMPUTATION AND IF ALL FURTHER DISALLOWANCE IS REQUIRED TOWARDS GENERAL AD MINISTRATIVE AND OTHER EXPENSES INCLUDING SALES AND MARKETING THE SAME SH ALL BE WORKED OUT EXCLUDING THE DISALLOWANCES ALREADY MADE BY THE ASS ESSEE IN ITS COMPUTATION AND ALSO ROUTINE CORPORATE AND OTHER EXPENSES WHIC H ARE PURELY RELATABLE TO THE BUSINESS ACTIVITY OF THE ASSESSEE. 18. HAVING HEARD BOTH THE SIDES WE FIND FORCE IN THE A RGUMENTS OF THE LD.COUNSEL FOR THE ASSESSEE THAT THE AO WHILE CALCU LATING DISALLOWANCE OF EXPENDITURE RELATABLE TO INCOME FROM HOUSE PROPERTY HAS ALLOWED DEDUCTIONS TOWARDS PROPERTY MAINTENANCE EXPENSES ALREADY DISAL LOWED BY THE ASSESSEE IN ITS COMPUTATION AND FAILED TO DEDUCT RATES AND TAXE S PROFESSIONAL FEES AND 23 MANJARI STUD FARM PVT LTD DONATIONS WITHOUT ANY REASON. WE FURTHER OBSERVE T HAT THE ASSESSEE HAS ALREADY DISALLOWED ON ITS OWN EXPENSES DIRECTLY REL ATABLE TO THE ACTIVITY OF INCOME FROM HOUSE PROPERTY. THE OTHER EXPENSES DEB ITED IN THE P&L ACCOUNT ARE PURELY IN THE NATURE OF CORPORATE / ROUTINE EXP ENSES ALLOWABLE U/S 37. THE AO HAS NOT GIVEN ANY REASONS FOR NOT CONSIDERING TH E EXPENSES ALREADY DISALLOWED BY THE ASSESSEE IN ITS COMPUTATION AND A LSO CORPORATE AND OTHER ROUTINE EXPENSES WHICH ARE ALLOWABLE U/S 37. THER EFORE WE ARE OF THE CONSIDERED VIEW THAT THE ISSUE NEEDS TO BE EXAMINED BY THE AO IN THE LIGHT OF THE SUBMISSIONS OF THE ASSESSEE THAT IT HAD ALREADY DISALLOWED EXPENSES OF RS.1 20 45 714 OUT OF TOTAL EXPENSES DEBITED IN THE P&L ACCOUNT AND ALSO CERTAIN EXPENSES ARE PURELY IN THE NATURE OF CORPOR ATE / ROUTINE EXPENSES ALLOWABLE U/S 37 OF THE ACT. HENCE WE SET ASIDE T HE ISSUE TO THE FILE OF THE AO AND DIRECT HIM TO CONSIDER THE ISSUE AFRESH IN ACCO RDANCE WITH LAW AFTER GIVING OPPORTUNITY OF HEARING TO THE ASSESSEE. 19. INSOFAR AS ASSESSMENT YEAR 2009-10 IS CONCERNED TH E ASSESSEE HAS NOT CHALLENGED THE DISALLOWANCE OF PROPORTIONATE EXPENS ES WORKED OUT BY THE AO ON THE BASIS OF INCOME GENERATED FROM THE ACTIVITY OF INCOME FROM HOUSE PROPERTY INCOME FROM BUSINESS AND INCOME FROM OTHE R SOURCES EXCEPT TO THE EXTENT OF RS.1 17 97 918 BEING PROPERTY MAINTENANCE EXPENSES. THE ASSESSEE HAS DISALLOWED A SUM OF RS.1 17 97 918 WHILE COMPUT ING INCOME UNDER THE 24 MANJARI STUD FARM PVT LTD HEAD INCOME FROM HOUSE PROPERTY IN ITS ORIGINAL R ETURN OF INCOME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAS FILED REVISED RETURN CLAIMING PROPERTY MAINTENANCE EXPENSES DISALLOWED I N COMPUTING INCOME FROM HOUSE PROPERTY AGAINST GROSS RECEIPT RECEIVED FROM THE ACTIVITY OF PROPERTY MAINTENANCE CHARGES FROM THE TENANTS. THE ASSESSEE FURTHER CONTENDED THAT BY MISTAKE IT HAS SUO MOTO DISALLOWE D EXPENDITURE INCURRED TOWARDS PROPERTY MAINTENANCE LIKE SECURITY WATCH A ND WARD AND OTHER EXPENSES WHICH ARE INCURRED EXCLUSIVELY IN CONNECTI ON WITH PROPERTY MAINTENANCE CHARGES RECOVERED FROM THE TENANTS WHIC H IS DEDUCTIBLE AGAINST INCOME FROM BUSINESS. THE ASSESSEE FURTHER CONTEND ED THAT IT HAS FILED A REVISED RETURN REVISING ITS CLAIM IN RESPECT OF PRO PERTY MAINTENANCE CHARGES. HOWEVER THE AO HAS DISALLOWED ITS CLAIM MERELY ON THE GROUND THAT THE REVISED RETURN FILED BY THE ASSESSEE IS BELATED AND HENCE CANNOT BE ALLOWED IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN TH E CASE OF GOETZE (INDIA) LTD VS CIT (SUPRA). THE ASSESSEE FURTHER SUBMITTED THA T THE AO HAS NOT DISPUTED THE FACT THAT PROPERTY MAINTENANCE EXPENDITURE HAS BEEN INCURRED AGAINST PROPERTY MAINTENANCE CHARGES RECEIVED FROM THE TENA NTS. HE DENIED THE CLAIM ON TECHNICAL GROUND THAT RETURN FILED BY THE ASSESS EE IS BARRED BY LIMITATION. 20. HAVING HEARD BOTH THE SIDES AND CONSIDERED MATERIAL AVAILABLE ON RECORD WE FIND THAT THE ASSESSEE HAS SUO MOTO DISALLOWED P ROPERTY MAINTENANCE 25 MANJARI STUD FARM PVT LTD EXPENSES OF RS.117 97 918 WHILE COMPUTING INCOME FR OM BUSINESS ON THE GROUND THAT SUCH EXPENDITURE CANNOT BE ALLOWED AS D EDUCTION. THE ASSESSEE FURTHER CONTENDED THAT IT HAS REVISED ITS RETURN OF INCOME REVISING THE CLAIM OF DISALLOWANCE OF PROPERTY MAINTENANCE EXPENSES AGAIN ST INCOME FROM HOUSE PROPERTY. THE ASSESSEE FURTHER CONTENDED THAT EXPE NDITURE INCURRED UNDER THE HEAD PROPERTY MAINTENANCE EXPENSES ARE IN THE NATU RE OF SECURITY WATCH AND WARD AND OTHER EXPENSES INCURRED AGAINST PROPERTY M AINTENANCE CHARGES RECEIVED FROM THE BUILDING. WE FURTHER OBSERVE THA T THE AO HAS NOT DISPUTED THE FACT THAT EXPENSES INCURRED BY THE ASSESSEE HAV E NEXUS WITH THE INCOME EARNED FROM THE PROPERTY. THE AO HAS DENIED THE DE DUCTION ONLY ON THE GROUND THAT THE REVISED RETURN FILED BY THE ASSESSE E IS BEYOND LIMITATION. WE DO NOT FIND ANY MERITS IN THE FINDINGS OF THE AO FO R THE REASON THAT IT IS SETTLED POSITION OF LAW THAT JUST ASSESSMENT DOES NOT DEPEN D ON AS TO WHAT IS CLAIMED BY THE ASSESSEE BUT ON PROPER COMPUTATION OF INCOM E DEDUCED BASED UPON THE PROVISIONS OF LAW. THE ASSESSING AUTHORITY CAN NOT ALLOW THE CLAIMS OF THE ASSESSEE IF THE RELATED FACTS AND PROVISIONS OF LAW DID NOT APPROVE IT AND SIMILARLY IT IS ALSO THE DUTY OF THE AO TO ALLOW E VEN THOSE BENEFITS ABOUT WHICH THE ASSESSEE IS IGNORANT BUT OTHERWISE LEGALLY ENT ITLED TO. THERE IS NO ESTOPPELS AGAINST THE PROPER APPLICATION OF LAW. T HE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS PRITHVI BROKERS & SHARE HOLDERS PVT LTD 349 ITR 336 26 MANJARI STUD FARM PVT LTD (BOM) OBSERVED THAT IF A CLAIM IS NOT MADE BEFORE T HE AO IT CAN BE MADE BEFORE AN APPELLATE AUTHORITY. THE JURISDICTION OF THE APPELLATE AUTHORITY TO ENTERTAIN SUCH A CLAIM HAS NOT BEEN NEGATED BY THE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD VS CIT (SUPRA). THE HONBLE BOMBAY HIGH COURT ALSO OBSERVED THAT THE SUPREME COURT IN GOETZE (INDIA) L TD HAS MADE A POINT THAT ISSUE IN THE CASE OF POWERS OF THE ASSESSING AUTHOR ITY AND THE JUDGEMENT DOES NOT IMPINGE ON THE POWERS OF THE TRIBUNAL TO ENTERT AIN AND ALLOW ADDITIONAL CLAIMS. 21. IN THIS CASE ADMITTEDLY THE ASSESSEE HAS FILED RE VISED RETURN DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO MAKE A CLAIM OF DEDUCTION TOWARDS PROPERTY MAINTENANCE EXPENSES AGAINST BUSINESS INCO ME WHICH HAS NOT BEEN TAKEN COGNIZANCE ON ACCOUNT OF LIMITATION. THEREFO RE WE ARE OF THE CONSIDERED VIEW THAT CONSIDERING THE FACTS AND CIRC UMSTANCES OF THE CASE AND ALSO RELYING UPON THE DECISION OF HONBLE SUPREME C OURT IN THE CASE OF GOETZE (INDIA) LTD AND BOMBAY HIGH COURT IN THE CASE OF CI T VS PRITHVI BROKERS & SHAREHOLDERS PVT LTD (SUPRA) THE CLAIM OF THE ASSE SSEE WITH REGARD TO THE DEDUCTION TOWARDS PROPERTY MAINTENANCE EXPENSES AGA INST BUSINESS INCOME NEEDS TO BE CONSIDERED IN THE LIGHTS OF THE FACTS W ITHOUT GOING INTO THE TECHNICALITY OF THE ISSUE OF LIMITATION OF FILING R EVISED RETURN. THEREFORE WE SET ASIDE THE ISSUE TO THE FILE OF THE AO AND DIRECT HI M TO CONSIDER THE ISSUE AFRESH 27 MANJARI STUD FARM PVT LTD AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING T O THE ASSESSEE. 22. IN THE RESULT APPEAL FILED BY THE ASSESSEE IN ITA NO.3842/MUM/2012 AND ITA NO.4329/MUM/2012 ARE ALLOWED FOR STATISTICAL PU RPOSE. THE APPEAL FILED BY THE REVENUE IN ITA NO.4807/MUM/2012 FOR THE ASSE SSMENT YEAR 2009-10 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH NOVEMBER 2017. SD/- SD/- (D.T. GARASIA) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DT : 10 TH NOVEMBER 2017 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR ITAT MUMBAI