M/S. S.K.FINANCE, MUMBAI v. DCIT WD 13(2), MUMBAI

ITA 6190/MUM/2008 | 2005-2006
Pronouncement Date: 04-02-2010 | Result: Partly Allowed

Appeal Details

RSA Number 619019914 RSA 2008
Bench Mumbai
Appeal Number ITA 6190/MUM/2008
Duration Of Justice 1 year(s) 3 month(s) 19 day(s)
Appellant M/S. S.K.FINANCE, MUMBAI
Respondent DCIT WD 13(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 04-02-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted E
Tribunal Order Date 04-02-2010
Date Of Final Hearing 25-11-2009
Next Hearing Date 25-11-2009
Assessment Year 2005-2006
Appeal Filed On 16-10-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E : MUMBAI BEFORE SHRI D.K. AGARWAL (JM) AND SHRI RAJENDRA SINGH (AM) ITA NO.6190/MUM/2008 ASSESSMENT YEAR : 2005-06 M/S. S.K. FINANCE SHOP NO.1 SARAWATI SADAN 113/115 KESHAVJI NAIK ROAD CHINCH BUNDER MUMBAI-400 009. ..( APPELLANT ) P.A. NO. (AAQFS 3123 C) VS. DY. COMMISSIONER OF INCOME TAX WARD 13(2) AAYAKAR BHAVAN MUMBAI. ..( RESPONDENT ) APPELLANT BY : S HRI PRADEEP KAPASI RESPONDENT BY : SHRI SATISH SHARMA O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 25.7.08 PASSED BY THE LD. CIT(A) FOR THE ASSESSMENT YEAR 2005-06. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE F IRM IS ENGAGED IN THE BUSINESS OF DEALING IN SHARES AND SECURITI ES FINANCING ITA NO.6190/M/08 A.Y: 05-06 2 BADLA FINANCE FINANCIAL SERVICES AND CONSULTANCY . IT FIL ED RETURN DECLARING TOTAL INCOME OF RS.11 44 290/-. HOWEVER TH E ASSESSMENT WAS COMPLETED AT AN INCOME OF RS.12 28 590/- AFTER TREA TING THE SHORT TERM CAPITAL GAINS AS TRADING INCOME RS.7 62 892/- DISAL LOWANCE OF CAR EXPENSES AND DEPRECIATION RS.41 886/- BUSINESS DEVELO PMENT EXPENSES RS.40 004/- AND DISALLOWANCE U/S.14A RS.2 513/- VIDE ORDER DATED 15.11.2007 PASSED U/S.143(3) OF THE INCOME TAX ACT 1961(THE ACT). ON APPEAL THE LD. CIT(A) WHILE UPHOLD ING THE VIEWS OF THE ASSESSING OFFICER DISMISSED THE APPEAL. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US. 4. GROUND NO.1 IS AGAINST IN TREATING THE SHORT TERM CAPITAL GAINS OF RS.7 62 892/- AS BUSINESS INCOME. 5. THE BRIEF FACTS OF THE ABOVE ISSUE ARE THAT DURING THE COURSE OF ASSESSMENT IT WAS INTERALIA OBSERVED BY THE AO THAT THE ASSESSEE HAS CLAIMED SHORT TERM CAPITAL GAIN OF RS.8 89 846/-. THE ASSESSEE WAS ASKED TO STATE THE REASONS AS TO WHY SHORT TERM CAPITAL GA INS SHOULD NOT BE TREATED AS TRADING INCOME FROM PROFESSIONAL SERVI CES. IT WAS EXPLAINED BY THE ASSESSEE THAT THE BUSINESS OF THE ASSESSEE W AS ITA NO.6190/M/08 A.Y: 05-06 3 FINANCING AND MONEY LENDING AS PER OBJECT CLAUSE OF THE PARTNERSHIP DEED THE SHARES WERE HELD BY THE ASSESSEE AS INVESTMENT A ND NOT STOCK IN TRADE THE PORTFOLIO MANAGERS SERVICES WERE ENG AGED TO LOOK AFTER THE SHARE PORTFOLIO THE ASSESSEE HAD SUBSTANTIAL DI VIDEND INCOME OF RS.50 277/- THE SHARES WERE HELD IN THE DMAT ACCOUNT FOR FAIRLY LONG TIME THE SHARES WERE NOT FREQUENTLY OR REGULARL Y DEALT WITH OWN FUNDS WERE USED FOR THE PURPOSE OF INVESTMENT AND THE T RANSACTIONS WERE DELIVERY BASED AND PAYMENTS HAVE BEEN MADE TO TH E BROKER ON BILL TO BILL BASIS. HOWEVER THE ASSESSING OFFICER DID NO T ACCEPT THE ASSESSEES SUBMISSION. HE OBSERVED THAT THE ENGAGEMENT OF POR TFOLIO MANAGER AND CLAIM OF EXPENSES ITSELF SHOWS THE INTENTION OF THE ASSESSEE TO MAKE PROFITS BY DEALING IN SHARES. FURTHER T HAT NO PART OF BORROWED FUNDS USED FOR THE PURPOSE OF TRADING IN SHAR ES COULD NOT BE PROVED BY THE ASSESSEE INASMUCH AS THE ASSESSEE WHILE MAKING SUBMISSION ON DISALLOWANCE U/S.14A HAS ADMITTED THAT THE ENTIRE OPERATIONS OF THE FIRM RESULTED IN ONE INDIVISIBLE ACTI VITY. FURTHER BORROWED FUNDS AND SELF GENERATED FUNDS GO TO THE COMMO N POOL AND SEGREGATION OF SUCH FUNDS THEN BECOMES DIFFICULT. HE THE REFORE REJECTED THE CLAIM OF THE ASSESSEE AND TREATED THE NET TA XABLE TRADING GAINS OF RS.7 62 892/- AS INCOME FROM BUSINESS. ON APPEA L THE LD. CIT(A) WHILE OBSERVING THAT THE INTENTION OF THE ASSESSE E WAS TO DO BUSINESS AND NOT TO DO INVESTMENT AND THE PERIOD OF HOL DING AND ITA NO.6190/M/08 A.Y: 05-06 4 FREQUENCY OF TRANSACTION HAS NO RELEVANCE ON FACTS OF THIS CASE UPHELD THE VIEW TAKEN BY THE AO. 6. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE WHILE REITERATING THE SAME SUBMISSIONS AS SUBMITTED BEFORE TH E AO AND THE LD. CIT(A) FILED THE FOLLOWING CHART TO SHOW THAT ON SIMILAR FACTS AND CIRCUMSTANCES THE TRIBUNAL IN OTHER CASES HAS ACCEPTED THE SH ARE TRANSACTIONS AS SHORT TERM CAPITAL GAINS : CHART COMPARING VOLUMES WITH OTHER DECIDED CASES CRITE- RIA S.K. FINANCE (ASSESSEE) LAXMICHAND KENIA RAMJI KENIA DHIRAJ KENIA BHARAT KENIA KUNVERJI KENIA PERIOD OF HOLDING 106 DAYS 134 DAYS 86 DAYS 107 DAYS 116 DAYS 124 DAY S NO. OF SCRIPS PURCHA -SED 51 106 144 129 142 213 NO. OF SCRIPS SOLD 49 104 129 105 168 173 VALUE OF PURCHA -SES 79 15 605 2 65 81 691 2 45 03 380 1 53 70 408 2 72 94 423 20 08 45 292 VALUE OF SALES 79 35 156 2 38 20 271 2 06 27 334 1 31 47 240 3 69 83 128 10 59 95 053 NO. PURCHA -SE DAYS 315 DAYS 268 DAYS 234 DAYS 261 DAYS 236 DAYS 177 DA YS NO. SALE DAYS 312 DAYS 195 DAYS 214 DAYS 240 DAYS 202 DAYS 162 DAYS IN SUPPORT HE HAS ALSO FILED COPY OF TRIBUNAL ORDERS I N THE ABOVE CASES AS UNDER: 1. SHRI LAXMICHAND KUNVERJI KENIA VS. ACIT IN ITA NO.2697/MUM/2009 FOR A.Y. 2005-06 DATED 22.10.2009. ITA NO.6190/M/08 A.Y: 05-06 5 2. SHRI DHIRAJ DEVJI KENIA VS. ACIT AND SHRI RAMJI DEVJ I KENIA VS. ACIT IN ITA NO.2701 & 2703/MUM/2009 FOR A.Y.2005-06 DATED 18.8.2009. 3. SHRI BHARAT KUNVERJI KENIA VS. ADDL. CIT IN ITA NO.6544/MUM/2008 FOR A.Y. 2005-06 DATED 15.5.2009. 4. SHRI KUNVARJI NANJI KENIA VS. ADDL. CIT IN ITA NO.6545/MUM/2008 FOR A.Y. 2005-06 DATED 28.4.2009. 5. SHRI GOPAL PUROHIT VS. JCIT IN ITA NO.4854/MUM/2008 FOR A.Y. 2005-06 DATED 10.2.2009. 6. CIT VS. GOPAL PUROHIT IN INCOME TAX APPEAL NO.1121 OF 2009 JUDGMENT DATED 6.1.2010 OF HONBLE BOMBAY HIGH COURT HE FURTHER SUBMITS THAT THE LD. CIT(A) IN THE ASSESSEES O WN CASE FOR THE ASSESSMENT YEAR 2006-07 HAS ACCEPTED THE SHORT TERM CAP ITAL GAIN AS SHOWN BY THE ASSESSEE . HE FURTHER SUBMITS THAT THE ASSESSEE HAS COMPLIED WITH ALL THE TESTS AS LAID DOWN IN CBDT CI RCULAR NO.4 OF 2007 DT.15.6.2007 TO SHOW THAT THE TRANSACTION SHOULD B E TREATED AS INVESTMENT VIDE PAGE 11 TO 14 OF THE ASSESSEES PAPER BOO K. HE FURTHER SUBMITS THAT IN THE BALANCE SHEETS FOR THE YEAR ENDED 31.3.2004 AND 31.3.2005 APPEARING AT PAGE 26 TO 29 OF THE ASSESSEES PAPER BOOK THE ASSESSEE HAS SHOWN THE INVESTMENT IN SHARES A S INVESTMENT. HE THEREFORE SUBMITS THAT THE SHORT TERM C APITAL GAINS SHOWN BY THE ASSESSEE BE TREATED AS SHORT TERM CAPITAL GA IN AND NOT AS BUSINESS INCOME. 7. ON THE OTHER HAND THE LD. DR WHILE RELYING ON T HE ORDER OF THE AO AND THE LD. CIT(A) FURTHER SUBMITS THAT THE COMPLI ANCE SHOWN BY THE ASSESSEE AS YES AT PAGE 14 OF THE ASSESSEES PAPER BOOK IS A ITA NO.6190/M/08 A.Y: 05-06 6 SUBJECTIVE COMPLIANCE SHOWN BY THE ASSESSEE IN RESPECT OF ALL THE TESTS LAID DOWN IN THE CBDT CIRCULAR NO.4 OF 2007 DATED 15 .6.2007 THEREFORE IN VIEW OF THE FINDING RECORDED BY THE A O AND THE LD. CIT(A) THE SAME IS NOT APPLICABLE IN THE CASE OF THE ASSESSEE FOR H OLDING THAT THE TRANSACTIONS ARE FOR INVESTMENT IN SHARES AND NOT FO R BUSINESS PURPOSES. HE THEREFORE SUBMITS THAT THE ORDER PASSED BY T HE AO IN TREATING THE TRANSACTIONS AS BUSINESS TRANSACTIONS BE UPHEL D. 8. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE R IVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAS NOT SHOWN THE INVESTMENT IN SHARES AS INVEST MENT IN THE BALANCE SHEETS FOR THE ASSESSMENT YEARS 2004-05 AND 200 5-06. IT IS ALSO NOT THE CASE OF THE REVENUE THAT THE SAID INVESTM ENT IN SHARES AND MUTUAL FUND WAS FOUND TO BE FALSE AND UNTRUE. T HE REVENUE HAS PLACED NO MATERIAL TO SHOW THAT THE ASSESSEES CASE DOES NOT FALL ON THE TESTS LAID DOWN BY THE CBDT IN ITS CIRCULAR NO.4 O F 2007 (SUPRA) TO SHOW THAT THE SHARES HELD BY THE ASSESSEE ARE AS STOCK IN TRADE AND NOT HELD AS INVESTMENT. FURTHER IT IS EVIDENT FROM THE CHART FILED BY THE ASSESSEE REPRODUCED HEREINABOVE THAT THE PATTERN O F PURCHASE AND SALE OF SHARES BY THE ASSESSEE IS ALMOST SIMILAR TO THE O THER CASES DECIDED BY THE TRIBUNAL(SUPRA). ITA NO.6190/M/08 A.Y: 05-06 7 9. IN CIT VS. GOPAL PUROHIT IN IT APPEAL NO.1121 OF 2009 DATED 6.1.2010 THE HONBLE JURISDICTIONAL HIGH COURT HAS UPH ELD THE FINDING OF THE TRIBUNAL HOLDING THAT THE DELIVERY BASED TRAN SACTIONS IN THE PRESENT CASE SHOULD BE TREATED AS THOSE IN THE NATURE OF INVESTMENT TRANSACTIONS AND THE PROFIT RECEIVED THEREFROM SHOULD BE TREATED EITHER AS SHORT TERM OR AS THE CASE MAY BE LONG TERM CAPITAL G AIN DEPENDING UPON THE PERIOD OF THE HOLDING AND THE FI NDING OF THE FACT ARRIVED AT BY THE TRIBUNAL DOES NOT CALL FOR INTERFER ENCE IN AN APPEAL U/S.260A AND DISMISSED THE REVENUES APPEAL. 10. IN THIS VIEW OF THE MATTER AND IN THE ABSENCE OF A NY DISTINGUISHING FEATURE BROUGHT ON RECORD BY THE REVENU E WE RESPECTFULLY FOLLOWING THE AFORESAID DECISION AND CONSISTEN T VIEW OF THE TRIBUNAL IN THE ABOVE CASES RELIED ON BY THE LD. COUN SEL FOR THE ASSESSEE WHEREIN IT HAS BEEN CONSISTENTLY HELD THAT THE P ROFIT ON SALE OF SHARES IS ASSESSABLE UNDER THE HEAD SHORT TERM CAPITAL GA IN HOLD THAT THE SHARE TRANSACTIONS ARE IN THE NATURE OF INVEST MENT AND THE PROFIT RECEIVED THEREFROM IS ASSESSABLE AS SHORT TERM CAPITA L GAIN AS SHOWN BY THE ASSESSEE. THE GROUNDS TAKEN BY THE ASSESSEE IN THIS REGARD ARE THEREFORE ALLOWED. ITA NO.6190/M/08 A.Y: 05-06 8 11. GROUND NO. 2 IS AGAINST THE SUSTENANCE OF DISALLOWAN CE OF CAR EXPENSES AND DEPRECIATION THEREON. 12. THE BRIEF FACTS OF THE ABOVE ISSUE ARE THAT IT WAS O BSERVED BY THE AO THAT THE ASSESSEE HAS CLAIMED MOTOR CAR EXPENSES OF RS.74 792/- AND DEPRECIATION THEREON RS.1 34 642/-. IN THE ABSE NCE OF ANY MATERIAL TO SHOW THAT THE ENTIRE EXPENSES HAVE BEEN IN CURRED IN RELATION TO BUSINESS THE AO DISALLOWED 20% OF SUCH EXP ENSES INCLUDING DEPRECIATION AGGREGATING TO RS.41 886/- AND ADDED TO THE INCOME OF THE ASSESSEE. ON APPEAL THE LD. CIT(A) WHILE OBSERVING THAT THE PERSONAL USE OF THE CAR IS NOT RULED OUT AND K EEPING IN VIEW THAT THE CORRESPONDING DISALLOWANCE OF DEPRECIATION HAS T O BE MADE IN VIEW OF THE PROVISIONS OF SEC.38(2) OF THE ACT DISTIN GUISHED THE DECISION OF THE TRIBUNAL RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE AND THEREBY CONFIRMED THE DISALLOWANCE MADE BY THE AO. 13. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSESSEE WHILE REITERATING THE SAME SUBMISSIONS AS SUBMITTED BEFORE THE LD. CIT(A) FURTHER SUBMITS THAT THE CAR WAS USED FOR BUSINESS PURPOSES A ND IN VIEW OF THE DECISION OF THE TRIBUNAL IN MUKESH K. SHA H 92 TTJ 1060(MUM.) THE DISALLOWANCE OF DEPRECIATION IS NOT CAL LED FOR. HE THEREFORE SUBMITS THAT THE DISALLOWANCE OF CAR EXPENSES A ND ITA NO.6190/M/08 A.Y: 05-06 9 DEPRECIATION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) BE DELETED. 14. ON THE OTHER HAND THE LD. DR SUPPORTS THE ORDER OF THE AO AND THE LD. CIT(A). 15. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE R IVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT 1/5 TH DISALLOWANCE OF CAR EXPENSES AND DEPRECIATION WAS MADE BY THE AO ON THE GROUND THAT NO MATERIAL WAS PRODUCED TO SHOW THAT THE CAR WAS ENTIRELY USED FOR BUSINESS PURPOSES. EVEN AT THIS STAGE TH E ASSESSEE PLACED NO MATERIAL TO SHOW THAT THE CAR WAS EXCLUSIVELY U SED FOR BUSINESS PURPOSES OR THE PARTNERS ARE HAVING THEIR PERSONA L VEHICLES FOR THEIR PERSONAL USE. IN THE ABSENCE THEREOF WE A RE OF THE VIEW THAT THE AO WAS JUSTIFIED IN MAKING THE DISALLOWANCE. IN VIEW OF THE SPECIFIC PROVISIONS OF SEC.38(2) R.W.S. 32(1)(II) OF THE ACT THE APPLICATION OF WHICH HAS NOT BEEN CONTROVERTED BY THE L D. COUNSEL FOR THE ASSESSEE THE DECISION IN MUKESH K SHAH VS. ITO (200 5) 92 TTJ 1060(MUM.) RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE IS DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. HOWEVER KEEPING IN VIEW THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE DISALLOWANCE OF CAR EXPENSES AND DEPRECIATION IS ITA NO.6190/M/08 A.Y: 05-06 10 RESTRICTED TO 1/6 TH AS AGAINST 1/5 TH SUSTAINED BY THE LD. CIT(A). THE GROUND TAKEN BY THE ASSESSEE IS THEREFORE PARTLY ALLOWED . 16. GROUND NO.3 IS AGAINST THE PARTIAL DISALLOWANCE OF BUSINESS DEVELOPMENT EXPENSES RS.40 004/-. 17. THE BRIEF FACTS OF THE ABOVE ISSUE ARE THAT IT IS OB SERVED BY THE AO THAT THE ASSESSEE HAS CLAIMED BUSINESS DEVELOPMENT EXPEN SES RS.4 00 047/-. THE EXPENSES ARE IN THE NATURE OF FOOD AND GIFT ARTICLES. IT IS NOT VERIFIABLE WHETHER THE ENTIRE EXP ENSES HAVE BEEN WHOLLY AND EXCLUSIVELY LAID OUT FOR THE PURPOSE OF BU SINESS HENCE HE DISALLOWED 10% OF SUCH EXPENSES I.E. RS.40 004/- AND ADDE D TO THE INCOME OF THE ASSESSEE. ON APPEAL THE LD. CIT(A) WHILE OBSERVING THAT THE BILLS DO NOT SPEAK ANYTHING AND THE PURPOSE OF E XPENSES IS NOT CLEAR AGREED WITH THE FINDING OF THE AO AND CONFIRME D THE DISALLOWANCE. 18. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE SUBMITS THAT ALL THE EXPENSES HAVE BEEN INCURRED FOR BUSINESS P URPOSES AS THE ASSESSEE IS ENGAGED IN THE BUSINESS OF FINANCING . THE ASSESSE E HAS TO ON A REGULAR BASIS INFORM AND EDUCATE ITS CLIENTS WITH RESPECT TO THE VARIOUS NEW PRODUCTS AND SCHEMES BY WAY OF CONDUCTING VARIOUS ITA NO.6190/M/08 A.Y: 05-06 11 SEMINARS AND MEETINGS WHEREIN ALL THE CLIENTS ARE INVITE D. AS A RESULT THE FIRM HAS TO INCUR VARIOUS EXPENSES FOR THE REFRESHME NTS AND IN SOME CASE LUNCH FOR THE CLIENTS. HE FURTHER SUBMITS THAT AL L THE EXPENSES ARE VOUCHED AND VERIFIABLE SUPPORTED BY BILL S AND THE PAYMENT WAS MADE BY ACCOUNT PAYEE CHEQUES EXCEPT IN ONE CASE WHERE THE PAYMENT WAS MADE IN CASH FOR RS.1 261/- DULY REFLECTED IN THE BANK STATEMENT. HE THEREFORE SUBMITS THAT THE EX PENDITURE HAS BEEN WHOLLY INCURRED FOR BUSINESS PURPOSES ALLOWABLE AS A REVENUE EXPENDITURE UNDER THE ACT. THE RELIANCE WAS ALSO PLACED ON THE DECISION OF THE TRIBUNAL IN ACIT VS. METALLIZING EQUIP MENT(P) LTD. (100 TTJ 449) TO CONTEND THAT THE AO IS UNDER AN OBLIGATI ON TO ALLOW SALE PROMOTION EXPENSES IF RELEVANT BILLS ARE HELD BY THE A SSESSEE AND THE AO HAS TAKEN NO STEPS IN EXAMINING THE GENUINENESS OF TH E BILLS. HE THEREFORE SUBMITS THAT THE DISALLOWANCE SUSTAINED BY T HE LD. CIT(A) BE DELETED. 19. ON THE OTHER HAND THE LD. DR WHILE RELYING ON T HE ORDER OF THE AO AND THE LD. CIT(A) FURTHER SUBMITS THAT IN THE ABS ENCE OF ANY MATERIAL TO SHOW THAT THE ENTIRE EXPENSES HAVE BEEN IN CURRED WHOLLY AND EXCLUSIVELY FOR BUSINESS PURPOSES THE DISALLOWANCE MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) BE UPHELD. ITA NO.6190/M/08 A.Y: 05-06 12 20. AFTER HEARING THE RIVAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD WE FIND THAT THERE IS NO DISPUTE T HAT THE ASSESSEE HAS FILED DETAILS OF EXPENSES SUPPORTED BY BILLS CLAIMING THAT ALL THE EXPENSES HAVE BEEN INCURRED FOR CONDUCTING VARIOUS SEMINA RS AND MEETINGS TO EDUCATE AND UPDATE ITS CLIENTS IN RESPECT OF ITS BUSINESS OF FINANCING . THE ESTIMATED DISALLOWANCE OF RS.40 004/- BEING 10% OF BUSINESS DEVELOPMENT EXPENSES (SALE PROMOTION EXPENSES) RS.4 00 457/- WAS MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) ON THE GROUND THAT THE EXPENSES HAVE NOT BEEN INCURRED WH OLLY AND EXCLUSIVELY FOR BUSINESS PURPOSES. CONSIDERING THE TOTAL ITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE INCLUDING THE DECISION RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE WE ARE OF THE VIEW THAT TH E PERSONAL USE BY THE PARTNERS OUT OF THE AFORESAID SALE PROMOTION EX PENSES IS NOT RULED OUT EVEN AT THIS STAGE HENCE WE RESTRICT THE DI SALLOWANCE TO 5% AS AGAINST 10% OF TOTAL SALE PROMOTION EXPENSES SUSTAINED BY THE LD. CIT(A). THE GROUND TAKEN BY THE ASSESSEE IS THEREFORE PARTLY ALLOWED. 21. GROUND NO.4 IS AGAINST THE SUSTENANCE OF DISALLOWANCE OF RS.2 513/- U/S.14A OF THE ACT. 22. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE SUBMITS THAT HE DOES NOT WANT TO PRESS THE ABOVE GROUND WHICH W AS NOT OBJECTED TO BY THE LD. DR. ITA NO.6190/M/08 A.Y: 05-06 13 23. THAT BEING SO AND IN THE ABSENCE OF ANY SUPPORTING MATERIAL THE GROUND TAKEN BY THE ASSESSEE IS THEREFORE REJECTED BEING NOT PRESSED. 24. GROUND NO.5 IS AGAINST THE LEVY OF INTEREST U/S.23 4A 234B 234C AND 234D. 25. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE SUBMITS THAT CONSEQUENTIAL RELIEF IN THIS REGARD BE ALLOWED T O THE ASSESSEE WHICH WAS TO OBJECTED TO BY THE LD. DR. 26. THAT BEING SO AND IN THE ABSENCE OF ANY SUPPORTING MATERIAL WE ARE OF THE VIEW THAT THE LEVY OF ABOVE INTEREST IS MANDATORY. HOWEVER THE AO IS DIRECTED TO ALLOW CONSEQUENTIAL RELIE F TO THE ASSESSEE. THE GROUND TAKEN BY THE ASSESSEE IS THEREFORE P ARTLY ALLOWED. 27. IN THE RESULT THE ASSESSEES APPEAL STANDS PARTLY ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 4.2.2010 SD/- SD/- (RAJENDRA SINGH) ( D.K. AGARWAL ) ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI DATED: 4.2.2010. JV. ITA NO.6190/M/08 A.Y: 05-06 14 COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT(A) CONCERNED MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 19.1.10 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 20.1.10 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 4.2.2010 SR.PS/PS 7. FILE SENT TO THE BENCH CLERK 4.2.2010 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER