M/s. SINDOORI TRADERS P. LTD., MUMBAI v. ITO Wd. -8(3)(2), MUMBAI

ITA 4940/MUM/2008 | 2000-2001
Pronouncement Date: 21-05-2010 | Result: Partly Allowed

Appeal Details

RSA Number 494019914 RSA 2008
Assessee PAN AAACS6166Q
Bench Mumbai
Appeal Number ITA 4940/MUM/2008
Duration Of Justice 1 year(s) 9 month(s) 15 day(s)
Appellant M/s. SINDOORI TRADERS P. LTD., MUMBAI
Respondent ITO Wd. -8(3)(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 21-05-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted E
Tribunal Order Date 21-05-2010
Date Of Final Hearing 15-12-2009
Next Hearing Date 15-12-2009
Assessment Year 2000-2001
Appeal Filed On 05-08-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH MUMBAI. BEFORE SHRI R.V.EASWAR SR.VP AND SHRI R.K. PANDA AM I.T.A.NOS.4940 TO 4942/MUM/2008 (ASSESSMENT YEARS: 2000-01 2002 -03 & 2005-06) M/S.SINDOORI TRADERS PVT.LTD. 301A SOLARIS-1 SAKI VIHAR ROAD ANDHERI (E) MUMBAI-400 072. PAN:AAACS6166Q VS. THE INCOME TAX OFFICER-8(3)(2) AAYAKAR BHAVAN M.K.ROAD MUMBAI-400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : MR. PRAKASH PANDIT RESPONDENT BY : MR. A.K.ATRI DR O R D E R PER R.V.EASWAR SENIOR VICE PRESIDENT: THESE APPEALS BY THE ASSESSEE RELATE TO THE ASSESSMENT YEARS 2000-01 20 02-03 AND 2005-06. SINCE THEY INVOLVE COMMON ISSUES THEY AR E DISPOSED OF BY A SINGLE ORDER FOR THE SAKE OF CONVENIENCE. 2. THE ASSESSEE IS A PRIVATE LIMITED COMPANY. IN RE SPECT OF THE ASSESSMENT YEAR 2000-01 THE ASSESSMENT ORIGINAL LY COMPLETED UNDER SECTION 143(1)(A) WAS REOPENED UNDE R SECTION 147 AND CERTAIN DISALLOWANCES AND ADDITIONS WERE MA DE. BEFORE US THE ASSESSEE HAS CHALLENGED THE JURISDICTION OF THE ASSESSING OFFICER TO REOPEN THE ASSESSMENT. AT THE TIME OF T HE HEARING OUR ATTENTION WAS DRAWN TO THE ORDER OF THE TRIBUNAL DA TED 18 TH SEPTEMBER 2008 IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2001-02 IN ITA NO.7623/MUM/2004 IN WHICH THE REASSESSMENT MADE UNDER SECTION 147 ON SIMILAR CIRC UMSTANCES HAS BEEN UPHELD. A COPY OF THE SAID ORDER HAS BEEN FILED. THERE IS NO DISPUTE THAT THE ASSESSMENT FOR THE ASSESSMEN T YEAR 2000-01 WAS REOPENED FOR THE SAME REASONS. THEREF ORE RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL CI TED ABOVE WE ITA NO.4940 TO 4942/M/08 2 UPHOLD THE JURISDICTION OF THE ASSESSING OFFICER TO REOPEN THE ASSESSMENT AND DISMISS THE FIRST GROUND. 3. THE SECOND GROUND RELATES TO THE TREATMENT TO BE GIVEN TO THE INCOME FROM RUNNING A BUSINESS SERVICE CENTRE. THE INCOME- TAX AUTHORITIES HAVE TREATED THE INCOME AS PROPERTY INCOME WHEREAS THE ASSESSEE HAS CLAIMED THAT IT SHOULD BE ASSESSED AS BUSINESS INCOME. THIS ISSUE IS ALSO COVERED AGAINS T THE ASSESSEE BY THE ORDER OF THE TRIBUNAL IN ITS OWN CA SE CITED SUPRA. SINCE THE FACTS AND THE CONTROVERSY ARE THE SAME FOR THE YEAR UNDER APPEAL RESPECTFULLY FOLLOWING THE ORDER WE UPHOLD THE ACTION OF THE INCOME-TAX AUTHORITIES AND DISMIS S THE GROUND. 4. AS REGARDS THE GROUND NOS. 3 & 4 RELATING TO INT EREST PAYABLE BY THE ASSESSEE ON ACQUISITION OF THE PROPE RTY LET OUT AND INTEREST ON 10% NON-CONVERTIBLE DEBENTURES WHIC H WERE STATED TO BE USED IN ACQUIRING THE PROPERTY WHICH W AS LET OUT THESE HAVE NOT BEEN CONSIDERED BY THE CIT(A) ON THE GROUND THAT THEY INVOLVE ENQUIRY INTO ORIGINAL FACTS. IT APPEAR S THAT THESE ISSUES WERE RAISED BEFORE THE CIT(A) BY WAY OF ADDI TIONAL GROUNDS. SINCE THE CIT(A) IS EMPOWERED TO PERMIT TH E APPELLANT TO GO INTO ANY GROUND OF APPEAL RAISED BY WAY OF AD DITIONAL GROUND UNDER SUB-SECTION 5 OF SECTION 250 AND THE O NLY CONDITION IS THAT THE OMISSION TO RAISE THE GROUND IN THE ORIGINAL MEMORANDUM OF APPEAL WAS NOT WILFUL AND UNREASONABL E WE FIND THE ACTION OF THE CIT(A) TO BE NOT IN ACCORDAN CE WITH LAW. WE THEREFORE DIRECT HIM TO EXAMINE THE ADDITIONAL G ROUNDS IN THE LIGHT OF THE AFORESAID STATUTORY PROVISION AND TAKE A FRESH DECISION IN ACCORDANCE WITH LAW. 5. GROUND NO.4 IS THAT DISALLOWANCE OF ADMINISTRATI VE EXPENSES SUCH AS RENT PROFESSIONAL CHARGES AUDIT FEES SALARIES STAFF WELFARE ETC. IS NOT JUSTIFIED MEREL Y ON THE GROUND ITA NO.4940 TO 4942/M/08 3 THAT AN AD-HOC 15% EXPENDITURE AGAINST THE INCOME F ROM OTHER SOURCES WAS ALLOWED. THE ONLY ARGUMENT OF THE ASSES SEE BEFORE US WAS THAT 15% WAS TOO LOW. NO REASON OR EVIDENCE WAS ADDUCED BEFORE US IN SUPPORT OF THE SUBMISSION. WE ACCORDINGLY DISMISS THE GROUND. 6. GROUND NOS. 6 & 7 ARE GENERAL AND REQUIRE NO DEC ISION. 7. IN THE RESULT THE APPEAL FOR THE ASSESSMENT YEA R 2000-01 IS PARTLY ALLOWED. 8. AS REGARDS THE APPEAL FOR THE ASSESSMENT YEAR 20 02-03 THE GROUNDS ARE IDENTICAL WITH THE GROUNDS RAISED I N THE APPEAL FOR THE ASSESSMENT YEAR 2000-01. IN LINE WITH OUR D ECISION FOR THAT YEAR GROUND NOS. 1 2 & 5 ARE DISMISSED AND G ROUND NOS. 3 & 4 ARE ALLOWED FOR STATISTICAL PURPOSES. THE APPE AL IS PARTLY ALLOWED. 9. IN THE APPEAL FOR THE ASSESSMENT YEAR 2005-06 T HERE IS NO CHALLENGE TO THE JURISDICTION OF THE ASSESSING OFFI CER TO REOPEN THE ASSESSMENT. THE OTHER GROUNDS ARE THE SAME AS I N THE ASSESSMENT YEAR 2000-01. IN LINE WITH OUR DECISION FOR THAT YEAR WE DISMISS THE GROUND NOS.1 & 4. GROUND NOS.2 & 3 ARE RESTORED TO THE CIT(A) FOR FRESH DECISION. THIS APP EAL IS PARTLY ALLOWED. 10. TO SUM UP ALL THE THREE APPEALS ARE PARTLY ALLO WED. ORDER PRONOUNCED ON THIS 21 ST DAY OF MAY 2010. SD/- ( R.K. PANDA ) SD/- ( R.V.EASWAR ) ACCOUNTANT MEMBER SENIOR VICE PRESIDEN T MUMBAI DATED 21 ST MAY 2010. SOMU ITA NO.4940 TO 4942/M/08 4 COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-8 MUMBAI. 4. THE CIT(A)-XXIX MUMBAI 5. THE DR E BENCH /TRUE COPY/ BY ORDE R ASSTT. REGISTRAR I.T.A.T MUMBAI