CHIMAN R. PATEL, MUMBAI v. ACIT 15(3), MUMBAI

ITA 5214/MUM/2013 | 2009-2010
Pronouncement Date: 28-04-2015 | Result: Dismissed

Appeal Details

RSA Number 521419914 RSA 2013
Assessee PAN AJFPP4167P
Bench Mumbai
Appeal Number ITA 5214/MUM/2013
Duration Of Justice 1 year(s) 9 month(s) 5 day(s)
Appellant CHIMAN R. PATEL, MUMBAI
Respondent ACIT 15(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-04-2015
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 28-04-2015
Date Of Final Hearing 22-04-2015
Next Hearing Date 22-04-2015
Assessment Year 2009-2010
Appeal Filed On 23-07-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL ' D ' BENCH MUMBAI BEFORE SHRI D. MANMOHAN VICE PRESIDENT AND SHRI RAJENDRA ACCOUNTANT MEMBER ITA NO.5214/MUM/2013 (ASSESSMENT YEAR: 2009 - 10 ) SHRI CHIMAN R. PATEL VS. A C I T - 15(3) SHOP NO. 363 BAPTY LANE OPP. MUNICIPAL INDL. ESTATE GRAND ROAD (E) MUMBAI 400004 2ND FLOOR MATRU MANDIR TARDEO MUMBAI 400007 PAN - AJFPP4167P APPELLANT RESPONDENT APPELLANT BY: NONE RESPONDENT BY: SHRI PREMANAND J. DATE OF HEARING: 22.04. 2015 DATE OF PRONOUNCEMENT: 2 8 .04.2015 O R D E R PER D. MANMOHAN V.P. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY CIT(A) - 26 MUMBAI AND IT PERTAINS TO A.Y. 2009 - 10. 2. THE CASE WAS ADJOURNED FROM TIME TO TIME AND NOTICES WERE ISSUED TO THE ASSESSEE BY RPAD AT THE ADDRESS MENTIONED IN FORM NO. 36 BUT NONE APPEARED ON BEHALF OF THE ASSESSEE. WE THEREFORE PROCEED TO DISPOSE OF THE APPEAL EXPARTE QUA ASSESSEE. 3. WE HEARD THE LEARNED D.R. AND CAREFULLY PERUSED THE RECORD. 4. FOLLOWING GROUNDS WERE URGED BY THE ASSES SEE: - 1. THE LEARNED CIT(A) ERRED IN DISALLOWING THE PURCHASES AMOUNTING TO RS.2 51 20 930/ - BY TREATING THE SAME AS ALLEGED BOGUS PURCHASES WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT(A) ERRED IN DISALLOWING THE LA BOUR EXPENSES OF RS.29 31 200/ - BY CONSIDERING THE SAME AS NON GENUINE EXPENSES WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE LEARNED CIT(A) ERRED IN MAKING AN ADDITION OF RS.33 95 000/ - BY TREATING THE GENUINE UNSECURED LOANS AS ALL EGED UNACCOUNTED CASH CREDIT AND ALSO DISALLOWED THE INTEREST EXPENSES AMOUNTING TO ITA NO.5214/MUM/2013 SHRI CHIMAN R. PATEL 2 RS.66 066/ - PAID FOR SAID UNSECURED LOAN WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE LEARNED CIT(A) ERRED IN DISALLOWING THE CLAIM OF TRAVELLING E XPENSES OF RS.60 182/ - ON THE ALLEGED PLEA THAT THE SAME HAS NOT BEEN INCURRED FOR BUSINESS PURPOSE WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE LEARNED CIT(A) ERRED IN DISALLOWING THE CURVING BENDING AND BUFFING CHARGES A MOUNTING TO RS.82 8000/ - ON ADHOC BASIS (I.E. 10% OF TOTAL EXPENSES) AS BEING NOT VERIFIABLE AND INCURRED IN CASH WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. THE LEARNED CIT(A) ERRED IN DISALLOWING THE MOTOR CAR RENT AMOUNTING TO RS.23 600/ - ON ADHOC BASIS (I.E. 10% OF ` 1 18 000/ - ) AS BEING NOT VERIFIABLE AND INCURRED IN CASH WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. THE LEARNED CIT(A) ERRED IN MAKING AN ADDITION OF RS.2 22 152/ - ON THE BASIS OF NON MATCHING OF AIR VIS - AVI S BOOKS OF ACCOUNTS AS ALLEGED UNACCOUNTED RECEIPT WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND SALE OF METAL FURNITURE. FOR THE YEAR UNDER CONSIDERATION ASSESSEE DECLARED TOTAL INCO ME OF ` 18 71 072/ - WHEREAS ASSESSMENT WAS COMPLETED ON A GROSS TOTAL INCOME OF ` 3 37 73 700/ - . THE AO MADE THE FOLLOWING ADDITIONS: A. BOGUS PURCHASES ` 2 52 20 930/ - B. LABOUR EXPENSES ` 29 31 200/ - C. LOANS AND INTEREST ON LOANS ` 33 95 000 + ` 66 066/ - D. TRAVELLING EXPENSES ` 60 182/ - E. CASH EXPENSES ON CURVING ` 82 800/ - BENDING AND BUFFING F. MOTOR CAR RENT ` 23 600/ - (20% OF ` 1 18 000/ - ) G. UNACCOUNTED RECEIPTS (ON THE ` 2 22 152/ - BASIS OF UNMATCHING AIR VIS - A - VIS BOOKS OF ACCOUNT) 6. THE LEARNED CIT(A) CONFIRMED THE ADDITIONS BY CONSIDERING THE ISSUES IN DETAIL WHICH ARE SUMMARISED AS UNDER: - I) BOGUS PURCHASES : BASED ON THE FINDING OF THE AO IN THE REMAND REPORT AS WELL AS THE SUBMISSIONS OF THE ASSESSEE IT IS NOTED THAT SUFFICIENT OPPORTUNITIES W ERE PROVIDED TO THE ASSESSEE TO PROVE THE GENUINENESS OF THE PURCHASES BUT THE ASSESSEE COULD NOT PROVE THE SAME. THEREFORE SIMPLY ON THE BASIS OF THE PURCHASE INVOICES AND CHEQUE PAYMENTS IT CANNOT BE ASCERTAINED THAT THE PARTIES HAVE ITA NO.5214/MUM/2013 SHRI CHIMAN R. PATEL 3 ACTUALLY SUPPLIED A NY MATERIAL TO THE ASSESSEE. THE OVERALL CONDUCT OF ALL THESE PARTIES IS HIGHLY SUSPICIOUS. THEY HAVE OPERATED THE BANK ACCOUNTS ONLY FOR A SHORT DURATION WHICH IS A CHARACTERISTIC OF THE PARTIES PROVIDING ACCOMMODATION ENTRIES OF BOGUS PURCHASES. II) LABOUR E XPENSES : AS COULD BE NOTICED FROM THE REMAND REPORT AS WELL AS THE SUBMISSION OF THE ASSESSEE THERE WAS ABNORMAL INCREASE IN LABOUR CHARGES IN THE LAST MONTH OF THE YEAR (ROUGHLY 80%) WHICH DOES NOT COMMENSURATE WITH THE INCREASE IN THE OUTPUT OF THE ASSES SEE. CONCERNED PARTIES COULD NOT BE LOCATED BY THE AO AND IN THE INSPECTORS REPORT IT WAS REVEALED THAT THESE PARTIES DO NOT EXIST IN THE GIVEN ADDRESS AND HENCE THE ONUS IS ON THE ASSESSEE TO PRODUCE THE CONCERNED PARTIES. ASSESSEE FAILED TO DO SO. THERE FORE THE LEARNED CIT(A) UPHELD THE DISALLOWANCE MADE BY THE AO. III) UNSECURED LOANS AND INTEREST THEREON : HERE ALSO THE LEARNED CIT(A) CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND THE REMAND REPORT OF THE AO AND OBSERVED THAT EXCEPT THE SUM STANDING IN THE N AME OF M/S. MINAXI METAL INDUSTRIES WHICH HAS BEEN DISALLOWED UNDER THE HEAD PURCHASE NEITHER AT THE TIME OF ASSESSMENT NOR IN THE REMAND PROCEEDINGS THE ASSESSEE COULD FILE CONVINCING DOCUMENTARY EVIDENCES TO ESTABLISH EVEN THE IDENTITY OF THE LENDERS. HE HOWEVER RESTRICTED THE ADDITION ON UNSECURED LOANS TO THE TUNE OF ` 28.95 LAKHS AND THE ALLEGED INTEREST ON SUCH LOAN WAS ALSO NOT ALLOWED AS DEDUCTION. IV) TRAVELLING EXPENSES : ASSESSEE COULD NOT SHOW ANY CONVINCING REASON WHICH COULD JUSTIFY THAT THE PAYMENT IN QUESTION WAS WHOLLY AND EXCLUSIVELY FOR BUSINESS PURPOSES. OTHERWISE ALSO IT IS NOT EXPLAINED AS TO HOW THIS TRAVELLING EXPENSE HELPED THE BUSINESS OF THE ASSESSEE. THEREFORE THE CLAIM WAS DISALLOWED. V) CURVING BENDING AND BUFFING EXPENSES & CA R RENT : THE EXPENSES UNDER THESE HEADS WERE INCURRED IN CASH AND NO DOCUMENTARY EVIDENCE WAS FILED TO SUPPORT THESE EXPENSES. IN THE REMAND PROCEEDINGS THE ASSESSEE MERELY ARGUED THAT THE ONUS IS ON THE AO TO PROVE THAT THE EXPENDITURE IS NOT GENUINE AND N O FRESH EVIDENCE HAS BEEN FURNISHED IN SUPPORT OF HIS CLAIM. FOR WANT OF PROPER EVIDENCE ITA NO.5214/MUM/2013 SHRI CHIMAN R. PATEL 4 THERE REMAINS A POSSIBILITY OF PERSONAL USE OF VEHICLE THE CIT(A) WAS OF THE OPINION THAT A REASONABLE DISALLOWANCE WILL MEET THE ENDS OF JUSTICE AND ACCORDINGLY REST RICTED THE DISALLOWANCE AT 10% OF THE EXPENDITURE. VI) ADDITION OF ` 2 22 152/ - : AS PER THE AIR DATA BASE ASSESSEE RECEIVED THE SUM AS CONTRACT RECEIPT FROM M/S. RATNAMANI METALS AND TUBES LTD. WHICH IS NOT DISCLOSED IN THE PROFIT & LOSS ACCOUNT. DURING THE RE MAND PROCEEDINGS IT WAS SUBMITTED THAT RECEIPT OF ` 1 71 034/ - HAS BEEN OFFERED FOR TAXATION BUT THE ASSESSEE HAS NOT FILED ANY EVIDENCE TO PROVE THE SAME. THE LEARNED CIT(A) FURTHER NOTICED THAT THERE IS A DIFFERENCE BETWEEN THE PAYMENT SHOWN BY /S. RATNAM ANI METALS AND TUBES LTD. AND THE AMOUNT OWNED BY THE ASSESSEE DURING THE REMAND PROCEEDINGS. NEITHER AT THE TIME OF ASSESSMENT PROCEEDINGS NOR AT THE TIME OF REMAND PROCEEDINGS ASSESSEE FURNISHED ANY CLARIFICATION OR CONFIRMATION FROM CONCERNED PARTY. UND ER THESE CIRCUMSTANCES THE DISCREPANCY OF ` 2 22 152/ - STILL REMAINS UNEXPLAINED AND THUS CONFIRMED THE ACTION OF THE AO. 7. FURTHER AGGRIEVED ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. EVEN AT THIS STAGE NO MATERIAL WHATSOEVER WAS FURNISHED TO CONTRADICT THE FINDINGS OF THE AO AS WELL AS THE CIT(A). ON THE CONTRARY THE AO IN THE REMAND PROCEEDINGS HAD CONSIDERED EACH ASPECT METICULOUSLY AND THE SAME WERE TAKEN NOTE OF BY THE LEARNED CIT(A). EVENTHOUGH THE REMAND REPORT WAS PUT TO THE ASSESSEE DURING THE COURSE OF FIRST APPELLATE PROCEEDINGS NO EVIDENCE WHATSOEVER WAS PLACED BEFORE THE CIT(A) TO CONTRADICT THE CONCLUSIONS REACHED BY THE AO. UNDER THESE CIRCUMSTANCES WE ARE OF THE FIRM VIEW THAT THE ORDER PASSED BY THE LEARNED CIT(A) DOES NOT CALL FOR AN Y INTERFERENCE. 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 8 TH APRIL 2015. SD/ - SD/ - ( RAJENDRA ) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI DATED: 2 8 TH APRIL 2015 ITA NO.5214/MUM/2013 SHRI CHIMAN R. PATEL 5 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 26 MUMBAI 4. THE CIT 15 MUMBAI CITY 5. THE DR D BENCH ITAT MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI N.P.