UNIQUE PROPERTIES & SECURITIES PRIVATE LIMITED, MUMBAI v. ASSISTANT COMMISSIONER - CENTRAL CIRCLE 38, MUMBAI

ITA 66/MUM/2018 | 2011-2012
Pronouncement Date: 08-11-2019 | Result: Allowed

Appeal Details

RSA Number 6619914 RSA 2018
Assessee PAN AAACU0702G
Bench Mumbai
Appeal Number ITA 66/MUM/2018
Duration Of Justice 1 year(s) 10 month(s) 3 day(s)
Appellant UNIQUE PROPERTIES & SECURITIES PRIVATE LIMITED, MUMBAI
Respondent ASSISTANT COMMISSIONER - CENTRAL CIRCLE 38, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 08-11-2019
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted F
Tribunal Order Date 08-11-2019
Last Hearing Date 21-01-2019
First Hearing Date 06-03-2019
Assessment Year 2011-2012
Appeal Filed On 04-01-2018
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 66/MUM/2018 ASSESSMENT YEAR: 2011-12 UNIQUE PROPERTIES & SECURITIES PRIVATE LIMITED 4 TH FLOOR MALHOTRA HOUSE OPP. GPO FORT MUMBAI-400001. VS. ASSISTANT COMMISSIONER-CENTRAL CIRCLE 38 [NOW DCIT CENTRAL CIRCLE 6(3)] 19 TH FLOOR AIR INDIA BUILDING NARIMAN POINT MUMBAI-400021. PAN NO. AAACU0702G ASSESSEE BY : SHRI PRAYAG JHA - AR REVENUE BY : SHRI D.G. PANSARI - DR DATE OF HEARING : 14/08/2019 DATE OF PRONOUNCEMENT : 08/11/2019 ORDER PER N.K. PRADHAN AM THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVA NT ASSESSMENT YEAR IS 2011-12. THE APPEAL IS DIRECTED AGAINST THE ORDER O F THE COMMISSIONER OF INCOME TAX-54 MUMBAI [IN SHORT CIT(A)] AND ARISE S OUT OF THE ASSESSMENT COMPLETED U/S 143(3) OF THE INCOME TAX ACT 1961 (T HE ACT). 2. THE 1 ST GROUND OF APPEAL THE LD CIT(A) ERRED IN NOT ACCEPTING THE ASSESSEES CONTENTION THAT PROFIT ON SALE OF LAND WAS LONG TERM CAPITAL GAINS AND NOT BUSINESS I NCOME AS INADVERTENTLY SHOWN IN THE IT RETURN. APPELLANT RESPONDENT ITA 66/MUM/2018/A.Y.2011-12 UNIQUE PROPERTIES & SECURITIES PRIV ATE LTD. 2 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E APPELLANT-COMPANY FILED ITS RETURN OF INCOME FOR THE AY 2011-12 ON 14.10.20 10 DECLARING TOTAL INCOME OF RS.4 59 836/-. THEREAFTER IT FILED A REVISED RET URN OF INCOME ON 23.11.2011 DECLARING TOTAL INCOME OF RS.2 00 292/-. DURING THE YEAR UNDER CONSIDERATION THE APPELLANT HAD SOLD A PROPERTY LAND ADMEASURING 1.87 ACRES AND BUILDING ADMEASURING 1550 SQ FT. AT SURVEY NO. 79 OF VILLAGE GAJULARAMARAM TALUKA- MEDCHAL DISTRICT RANGA REDDY TO SUPERMAX PERSONA L CARE PVT. LTD FOR A CONSIDERATION OF RS.10 70 00 000/-. THE APPELLANT H AS SHOWN PROFIT FROM SALE OF LAND AT RS.8 32 55 976/- UNDER THE HEAD PROFITS AND GAINS FROM BUSINESS OR PROFESSION IN THE RETURN OF INCOME FILED. THE DEPR ECIATION SCHEDULE ATTACHED TO THE AUDIT REPORT REFLECTS THE LAND AND THE FACTO RY BUILDING IN QUESTION AS FIXED ASSETS ON WHICH DEPRECIATION HAS BEEN CLAIMED YEAR AFTER YEAR. IN VIEW OF ABOVE FACTS THE AO TREATED THE PROFIT ON THE SAID SALE OF LAND AS INCOME FROM BUSINESS OR PROFESSION AND DISALLOWE D THE EXPENDITURE CLAIMED ON THE PREMISE THAT THE ASSESSEE DID NOT CA RRY OUT ANY BUSINESS ACTIVITY DURING THE YEAR AND THEREFORE IS INELIGIB LE FOR ANY EXPENDITURE. 4. IN APPEAL THE LD CIT(A) OBSERVED THAT (I) THE A PPELLANT HAS NOT DECLARED LONG TERM CAPITAL GAINS (LTCG) IN THE RETURN OF INC OME IT HAS CLEARLY SHOWN THEM AS INCOME FROM BUSINESS OR PROFESSION ARISING FROM PROFIT ON SALE OF LAND (II) THE APPELLANT HAS SHOWN COST OF THIS LAN D AT RS.1 26 10 175/- IN THE BLOCK OF ASSETS; COST OF THE BUILDING ON THIS LAND WAS SHOWN AT RS.12 06 585/- AFTER REDUCING DEPRECIATION THE WDV AS ON 31.03.201 0 OF RS.3 08 567/- (III) AS PER APPELLANTS OWN ADMISSION THE NET GAIN OF RS.8 32 92 969/- WAS SHOWN IN THE ITR-6 UNDER THE HEAD PROFITS AND GAINS FROM BU SINESS OTHER THAN ITA 66/MUM/2018/A.Y.2011-13 UNIQUE PROPERTIES & SECURITIES PRIV ATE LTD. 3 SPECULATIVE BUSINESS (IV) NOWHERE THE PROPERTY H AS BEEN SHOWN AS AN INVESTMENT BY THE ASSESSEE. IN VIEW OF ABOVE FACTS THE LD. CIT(A) HELD THAT I NCOME IS LIABLE TO BE TAXED AS INCOME FROM BUSINESS AND NOT LTCG. 5. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE REL YING ON THE DECISION IN CIT VS. PRUTHVI BROKERS & SHAREHOLDERS (2012) 23 TAXMANN.COM 23(BOM.) SUBMITS THAT THE ASSESSEE IS ENTITLED TO RAISE BEFORE THE A PPELLATE AUTHORITIES ADDITIONAL GROUNDS IN TERMS OF ADDITIONAL CLAIMS NOT MADE IN R ETURN FILED BY IT. FURTHER RELYING ON THE DECISION IN CIT V. ACE BUILDERS (P.) LTD (2015) 144 TAXMAN 855(BOM.) IT IS STATED BY HIM THAT AN ASSESSEE IS ENTITLED TO EXEMPTION U/S. 54E IN RESPECT OF CAPITAL GAINS ARISING ON TRANSFER OF CAPITAL ASSETS ON WHICH DEPRECIATION HAS BEEN ALLOWED. FURTHER RELYING ON THE DECISION IN TUTICORIN ALKALI CHEMICALS AND FERTILIZERS LTD. (1997) 93 TAXMAN 502 (SC) IT IS EXPLAINED THAT ACCOUNTING ENTRIES ARE NOT FINAL AND DECISIVE. THE LD. COUNSEL SUBMITS THAT THE LTCG WAS WRONGLY SHOWN IN THE ITR-6 IN PART B UNDER THE HEADING PROFIT AND GAINS FROM BUSINESS OTHER THAN SPECULATIVE BUSINESS AND THIS MISTAKE WAS REALIZED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND COMPUTATION OF TOTAL INC OME AS PER LAW WAS SUBMITTED BEFORE THE AO AND THE AMOUNT OF RS.8 32 5 5 976/- WAS NET PROFIT AS PER PROFIT AND LOSS ACCOUNT WHICH INCLUDED LTCG. IT IS STATED THAT THE APPELLANT INDICATED THE NET PROFIT IN PART B OF THE ITR BUT T HE AMOUNT OF LTCG WAS NOT SHOWN SEPARATELY UNDER THE SPECIFIC HEAD IN THE ITR AND THE COLUMN IN WHICH LTCG WAS TO BE SHOWN WAS LEFT BLANK. ITA 66/MUM/2018/A.Y.2011-14 UNIQUE PROPERTIES & SECURITIES PRIV ATE LTD. 4 THE LD. COUNSEL SUBMITS THAT THIS WAS PURELY A CLE RICAL MISTAKE AND IT HAPPENED DUE TO INADVERTENCE. 6. ON THE OTHER HAND THE LD. DEPARTMENTAL REPRESEN TATIVE (DR) SUBMITS THAT THE APPELLANT HAS ADMITTED THAT THE COST OF TH IS LAND WAS SHOWN AT RS.1 26 10 175/- IN THE BLOCK OF ASSETS. FURTHER T HE COST OF THE BUILDING ON THIS LAND WAS SHOWN AT RS. 12 06 585/- AND AFTER REDUCIN G DEPRECIATION THE WDV AS ON 31.03.2010 WAS RS. 3 08 567/-. AS PER THE APP ELLANTS OWN ADMISSION THE NET GAIN OF RS.8 32 92 969/- WAS SHOWN IN THE I TR-6 UNDER THE HEAD PROFITS AND GAINS FROM BUSINESS OTHER THAN SPECULA TIVE BUSINESS. THUS THE LD. DR SUBMITS THAT AS PER THE APPELLANT S OWN ADMISSION THE LAND AND BUILDING IN QUESTION WERE ALWAYS SHOWN AS FIXED ASSETS IN THE HAND OF THE COMPANY AND DEPRECIATION HAS BEEN CLAIMED ON THE BUILDING FROM YEAR TO YEAR AND THE PROPERTIES BEING BUSINESS ASSETS A NY PROFIT ARISING FROM SALE OF SUCH ASSETS WILL HAVE TO BE TAXED AS PROFIT AND GAINS AND NOT LTCG. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD. THE REASONS FOR OUR DECISION A RE GIVEN BELOW. IN ACE BUILDERS (P.) LTD (SUPRA) THE ASSESSEE A PRIVATE LIMITED COMPANY HAD A FLAT WHICH WAS SHOWN AS CAPITAL ASSET IN ITS BOOKS OF ACCOUNT. IT CLAIMED DEPRECIATION THEREON FROM YEAR-TO-YEAR. THE RESULTI NG WRITTEN DOWN VALUE AS ON 31-3-1991 WAS RS.1.43 LAKHS. IN THE PREVIOUS YEA R RELEVANT TO THE ASSESSMENT YEAR 1992-93 IT SOLD THE SAID FLAT FOR RS. 5.20 LAKHS AND INVESTED THE NET SALE PROCEEDS IN THE UNITS OF 'UTI CAPITAL GAINS SCHEME WITH A VIEW TO CLAIM DEDUCTION UNDER SECTION 54E AND ACCORDINGLY IN THE RETURN OF INCOME IT DECLARED NIL INCOME UNDER THE HEAD 'INCOME FROM CAPITAL GAINS'. THE ASSESSING ITA 66/MUM/2018/A.Y.2011-15 UNIQUE PROPERTIES & SECURITIES PRIV ATE LTD. 5 OFFICER HELD THAT SINCE THE ENTIRE BLOCK OF BUILDIN G HAD CEASED TO EXIST ON ACCOUNT OF SALE OF THE FLAT THE WRITTEN DOWN VALUE OF THE ASSET WAS LIABLE TO BE TAKEN AS COST OF ACQUISITION UNDER SECTION 50(2) AN D THAT AS THE ASSESSEE HAD AVAILED DEPRECIATION ON THE SAID ASSET THE GAIN AR ISING ON TRANSFER OF SUCH A LONG-TERM CAPITAL ASSET WAS LIABLE TO BE TREATED AS SHORT-TERM CAPITAL GAIN AND THEREFORE THE BENEFIT UNDER SECTION 54E WAS NOT AV AILABLE. ON APPEAL THE COMMISSIONER (APPEALS) UPHELD THE ORDER OF THE ASSE SSING OFFICER. ON FURTHER APPEAL THE TRIBUNAL HELD THAT THE DEEMING FICTION ATTACHED TO SECTION 50 HAD TO BE RESTRICTED ONLY FOR THE METHOD OF COMPUTING T HE CAPITAL GAINS AND COULD NOT BE READ INTO WHILE CONSIDERING THE CASE FOR NON -CHARGEABILITY OF CAPITAL GAIN. ACCORDINGLY TRIBUNAL HELD THAT THE ASSESSEE WAS ENTITLED TO THE EXEMPTION UNDER SECTION 54E. ON APPEAL THE HONBLE BOMBAY HIGH COURT HELD:- THE ASSESSEE FULFILLED ALL THE CONDITIONS SET OUT IN SECTION 54E TO AVAIL EXEMPTION BUT THE EXEMPTION WAS SOUGHT TO BE DENIED IN VIEW O F FICTION CREATED UNDER SECTION 50. THE ASSESSEE COULD NOT BE DENIED EXEMPTION UNDE R SECTION 54E BECAUSE FIRSTLY THERE IS NOTHING IN THE SECTION TO SUGGEST THAT THE FICTION CREATED IN SECTION 50 IS NOT ONLY RESTRICTED TO SECTIONS 48 AND 49 BUT ALSO APPL IES TO OTHER PROVISIONS. ON THE CONTRARY SECTION 50 MAKES IT EXPLICITLY CLEAR THAT THE DEEMED FICTION CREATED IN SUB- SECTIONS (1) AND (2) OF SECTION 50 IS RESTRICTED ON LY TO THE MODE OF COMPUTATION OF CAPITAL GAINS CONTAINED IN SECTIONS 48 AND 49 AND C ANNOT BE EXTENDED BEYOND THAT. SECONDLY IT IS WELL ESTABLISHED IN LAW THAT A FICT ION CREATED BY THE LEGISLATURE HAS TO BE CONFINED TO THE PURPOSE FOR WHICH IT IS CREATED. THIRDLY SECTION 54E DOES NOT MAKE ANY DISTINCTION BETWEEN DEPRECIABLE ASSET AND NON-DEPRECIABLE ASSET AND THEREFORE THE EXEMPTION AVAILABLE TO THE DEPRECIAB LE ASSET UNDER SECTION 54E CANNOT BE DENIED BY REFERRING TO THE FICTION CREATE D UNDER SECTION 50. SECTION 54E SPECIFICALLY PROVIDES THAT WHERE CAPITAL GAIN ARISI NG ON TRANSFER OF A LONG-TERM CAPITAL ASSET IS INVESTED OR DEPOSITED (WHOLE OR AN Y PART OF THE NET CONSIDERATION) IN ITA 66/MUM/2018/A.Y.2011-16 UNIQUE PROPERTIES & SECURITIES PRIV ATE LTD. 6 THE SPECIFIED ASSETS THE ASSESSEE SHALL NOT BE CHA RGED TO CAPITAL GAINS. THEREFORE THE EXEMPTION UNDER SECTION 54E COULD NOT BE DENIED TO THE ASSESSEE ON ACCOUNT OF THE FICTION CREATED IN SECTION 50. [PARAS 24 AND 25] IT IS TRUE THAT SECTION 50 IS ENACTED WITH THE OBJE CT OF DENYING MULTIPLE BENEFITS TO THE OWNERS OF DEPRECIABLE ASSETS. HOWEVER THAT RES TRICTION IS LIMITED TO THE COMPUTATION OF CAPITAL GAINS AND NOT TO THE EXEMPTI ON PROVISIONS. IN OTHER WORDS WHERE DEPRECIATION HAS BEEN AVAILED ON LONG-TERM CA PITAL ASSET THEN THE CAPITAL GAIN HAS TO BE COMPUTED IN THE MANNER PRESCRIBED UNDER S ECTION 50 AND THE CAPITAL GAINS TAX WILL BE CHARGED AS IF SUCH CAPITAL GAIN HAS ARI SEN OUT OF A SHORT-TERM CAPITAL ASSET BUT IF SUCH CAPITAL GAIN IS INVESTED IN THE MANNER PRESCRIBED IN SECTION 54E THEN THE CAPITAL GAIN SHALL NOT BE CHARGED UNDER SECTION 45. TO PUT IT SIMPLY THE BENEFIT OF SECTION 54E WILL BE AVAILABLE TO THE ASSESSEE IRRES PECTIVE OF THE FACT THAT THE COMPUTATION OF CAPITAL GAINS IS DONE EITHER UNDER S ECTIONS 48 AND 49 OR UNDER SECTION 50. THE CONTENTION OF THE REVENUE THAT BY A MENDMENT TO SECTION 50 THE LONG-TERM CAPITAL ASSET HAD BEEN CONVERTED INTO TO SHORT-TERM CAPITAL ASSET WAS ALSO WITHOUT ANY MERIT. THE LEGAL FICTION CREATED BY THE STATUTE IS TO DEEM THE CAPITAL GAIN AS SHORT-TERM CAPITAL GAIN AND NOT TO DEEM THE ASSE T AS SHORT-TERM CAPITAL ASSET THEREFORE IT CANNOT BE SAID THAT SECTION 50 CONVER TS LONG-TERM CAPITAL ASSET INTO A SHORT-TERM CAPITAL ASSET. [PARA 26] THEREFORE THE TRIBUNAL WAS JUSTIFIED IN ALLOWING T HE BENEFIT OF EXEMPTION UNDER SECTION 54E TO THE ASSESSEE IN RESPECT OF THE CAPI TAL GAINS ARISING ON THE TRANSFER OF A CAPITAL ASSET ON WHICH DEPRECIATION HAT BEEN ALLOWE D. [PARA 27] THE ABOVE DECISION HAS RELEVANCE IN THE INSTANT AP PEAL IN THE BACKDROP OF THE SALE DEED DATED 30.12.2002 FOR PURCHASE OF P ROPERTY AND DEED OF CONVEYANCE DATED 31.03.2011 FOR SALE OF PROPERTY. T HE ABOVE ASPECTS HAVE NOT BEEN EXAMINED BY THE LOWER AUTHORITIES. THEREFORE WE SET-ASIDE THE ORDER OF THE LD. CIT(A) ON THE ABOVE ISSUE AND RESTORE THE M ATTER TO THE FILE OF THE AO TO ITA 66/MUM/2018/A.Y.2011-17 UNIQUE PROPERTIES & SECURITIES PRIV ATE LTD. 7 MAKE AN ORDER AFRESH. WE DIRECT THE APPELLANT TO FI LE THE RELEVANT DOCUMENTS/EVIDENCE BEFORE THE AO. NEEDLESS TO SAY THE AO WOULD GIVE REASONABLE OPPORTUNITY OF BEING HEARD TO THE APPELL ANT BEFORE FINALIZING THE ORDER. THUS THE 1 ST GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOS ES. 8. THE 2 ND GROUND OF APPEAL THE LD CIT(A) ERRED IN UPHOLDING THE DISALLOWANCE T O THE EXTENT OF RS.71 39 143/- OUT OF TOTAL DISALLOWANCE OF RS.1 11 59 033/- WITHO UT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE PROPERLY. 9. IN THE PROFIT AND LOSS ACCOUNT THE APPELLANT HA S SHOWN RENTAL INCOME OF RS.2 39 500/- PROFIT ON SALE OF LAND RS.9 41 12 11 5/- AND OTHER INCOME OF RS.63 394/- TOTALLING TO RS.9 44 15 009/-. OUT OF T HIS INCOME IT HAS CLAIMED EXPENDITURE OF RS.1 11 22 040/- THE DETAILS OF WHI CH ARE AS UNDER: AMOUNT (RS.) REPAIRS & MAINTENANCE 19 526 RENT 330 RATES & TAXES 41 14 754 AUDITORS REMUNERATION 5 515 INSURANCE PREMIUM 4 181 LEGAL & PROFESSIONAL FEES 69 53 633 INTEREST PAID 21 001 BANK CHARGES 400 DIRECTORS MEETING FEES 1 800 FILLING FEES 900 LOSS ON DISCARDED ASSETS ---- 1 11 22 040/ - ITA 66/MUM/2018/A.Y.2011-18 UNIQUE PROPERTIES & SECURITIES PRIV ATE LTD. 8 OUT OF THE RATES AND TAXES OF RS.41 14 754/- AN AMO UNT OF RS.40 12 575/- WAS PAID AS STAMP DUTY ON SALE OF LA ND. THIS BEING MANDATORY TAX/DUTY TO BE PAID THE LD. CIT(A) HELD IT AS ALLO WABLE. SIMILARLY AUDITORS REMUNERATION TO THE TUNE OF RS.5 515/- AND DIRECTOR S MEETING FEES OF RS.1 800/- WERE HELD TO THE ALLOWABLE BEING REGULAR ADMINISTRATIVE EXPENSES OF THE APPELLANT. THUS OUT OF THE DISALLOWANCE OF RS. 1 11 20 040/- MADE BY THE AO AN AMOUNT OF RS.40 19 890/- WAS DELETED BY THE LD. CIT(A). 10. BEFORE US THE LD. COUNSEL SUBMITS THAT THE LD. CIT(A) HAS CONFIRMED THE DISALLOWANCE TO THE EXTENT OF RS.71 39 143/- OUT OF TOTAL DISALLOWANCE OF RS.1 11 59 033/- WITHOUT APPRECIATING THE FACTS OF THE CASE. IT IS STATED THAT A MAJOR CHUNK OF THE DISALLOWANCE IS RS.69 53 633/- I NCURRED TOWARDS LEGAL AND PROFESSIONAL FEES. IT IS SUBMITTED BY HIM THAT ALLE GRA CORPORATE FINANCE HAS NEGOTIATED THE DEAL BETWEEN THE PURCHASER AND THE S ELLER AND THEREFORE HAS BEEN PAID SUCCESS FEE. IN THIS REGARD COPY OF BILL OF ALLEGRA CORPORATE FINANCE WAS FILED BEFORE US. FURTHER REFERRING TO THE OTHE R EXPENSES THE LD. COUNSEL SUBMITS THAT THESE WERE INCURRED FOR BUSINESS PURPO SE AND SHOULD BE ALLOWED IN APPEAL. 11. ON THE OTHER HAND THE LD. DR SUBMITS THAT AS R ECORDED BY THE LD. CIT(A) DURING THE COURSE OF APPELLATE PROCEEDINGS THE APP ELLANT WAS ASKED TO EXPLAIN THE NOMENCLATURE SUCCESS FEE AND SERVICES RENDERED BY ALLEGRO CORPORATE FINANCE. IN RESPONSE TO IT THE APPELLANT MERELY RE PLIED THAT SUCCESS FEE HAS BEEN PAID BY CHEQUE AND THEREFORE IT IS TO BE ALLOW ED. IT IS SUBMITTED BY THE LD. DR THAT THERE IS NO AGREEMENT OR TERMS OF REFER ENCE FOR THE SERVICES TO BE RENDERED BY ALLEGRO CORPORATE FINANCE. IT IS FURTHE R ARGUED THAT AS PER THE SALE DEED THE ADDRESS OF BOTH THE PURCHASER AND SELLER IS THE SAME I.E. 4 TH FLOOR ITA 66/MUM/2018/A.Y.2011-19 UNIQUE PROPERTIES & SECURITIES PRIV ATE LTD. 9 MALHOTRA HOUSE OPP. GPO MUMBAI 400001 AND BOTH THE PARTIES HAPPEN TO BE SISTER CONCERNS OCCUPYING THE SAME PREMISES. THE LD. DR SUBMITS THAT THE APPELLANT HAS FAILED TO BRING ON RECORD ANY EVIDENC E OF ANY KIND OF NEGOTIATION/SERVICE RENDERED BY ALLEGRO CORPORATE F INANCE WHICH WOULD ENTITLE IT TO RECEIVE THE PAYMENT OF RS.69 48 900/- . THUS THE LD. DR SUPPORTS THE ORDER PASSED BY THE LD. CIT(A). 12. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE THE CRUCI AL POINT IS EVIDENCE REGARDING NEGOTIATION/SERVICE RENDERED BY ALLEGRO CORPORATE F INANCE WHICH WOULD ENTITLE IT TO RECEIVE PAYMENT OF RS.69 48 900/-. IN THIS RESPECT ONE HAS TO KEEP IN MIND THE FACT THAT THE EXPENDITURE SHOULD BE IN RESPECT OF BUSINESS WHICH WAS CARRIED ON BY THE APPELLANT AND THE PROFITS OF WHICH ARE TO BE COMPUTED AND ASSESSED AND SHOULD BE INCURRED AFTER THE BUSI NESS IS SET UP. THE EXPENSES SHOULD HAVE BEEN LAID OUT OR EXPENDED WHOL LY AND EXCLUSIVELY FOR THE PURPOSE OF SUCH BUSINESS. WE FIND IN THE INSTAN T APPEAL THAT THE APPELLANT COULD NOT FILE THE COMPLETE DETAILS IN RESPECT OF T HE DISPUTED EXPENSES EITHER BEFORE THE AO OR THE CIT(A). IN THE INTEREST OF JUS TICE WE SET-ASIDE THE ORDER OF THE LD. CIT(A) ON THE ABOVE ISSUE AND RESTORE THE M ATTER TO THE FILE OF THE AO TO MAKE AN ORDER AFRESH IN RESPECT OF DISALLOWANCES OF RS.71 31 143/- KEEPING IN MIND THAT (I) IT SHOULD BE IN RESPECT OF BUSINESS W HICH WAS CARRIED ON BY THE APPELLANT AND THE PROFITS OF WHICH ARE TO BE COMPUT ED AND ASSESSED AND SHOULD BE INCURRED AFTER THE BUSINESS IS SET UP (I I) IT SHOULD HAVE BEEN LAID OUT OR EXPANDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF SUCH BUSINESS. WE DIRECT THE APPELLANT TO FILE THE RELEVANT DOCUM ENTS/EVIDENCE BEFORE THE AO. NEEDLESS TO SAY THE AO WOULD GIVE REASONAB LE OPPORTUNITY OF BEING ITA 66/MUM/2018/A.Y.2011-110 UNIQUE PROPERTIES & SECURITIES PRIV ATE LTD. 10 HEARD TO THE APPELLANT BEFORE FINALIZING THE ORDER. THUS THE 2 ND GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 13. THE 3 RD GROUND OF APPEAL: WITHOUT PREJUDICE TO GROUND NO. 2 THE LD CIT(A) ER RED IN NOT APPRECIATING THAT AMOUNT OF RS.36 993/- DEBITED AS DEPRECATION WAS AD DED TWICE BECAUSE THIS AMOUNT WAS NOT DEDUCTED WHILE ADOPTING THE FIGURE OF RS.8 32 92 969/- AS INCOME FROM BUSINESS AND FURTHER DISALLOWED AND ADDED BACK BEIN G INCLUDED IN THE AMOUNT OF RS.1 11 59 033/-. 14. AS THE 2 ND GROUND OF APPEAL HAS BEEN RESTORED TO THE FILE OF THE AO THE 3 RD GROUND OF APPEAL BECOMES ACADEMIC IN NATURE. HOWEV ER TO ENSURE THAT THERE IS NO DOUBLE ADDITION WE DIRECT THE AO TO KE EP IN MIND THE ABOVE CONTENTIONS OF THE APPELLANT WHILE DECIDING THE 2 ND GROUND OF APPEAL. 15. IN THE RESULT THE APPEAL IS ALLOWED FOR STATI STICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 08.11.2019 SD/- SD/- (SAKTIJIT DEY) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 08.11.2019 S. SAMANTA P.S.(ON TOUR) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR ITAT MUMBAI 6. GUARD FILE. BY ORDER //TRUE COPY// ( ASSISTANT REGISTRAR) ITAT MUMBAI