9911796707
TMI Blog2012 (9) TMI 721X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The return was filed declaring total income at Rs. 36,06,10,969/-. However the assessment was completed at an income of Rs. 38,42,19,370/- including the disallowance of expenses Rs. 2,18,67,277/- and other expenses Rs. 17,41,127/-, vide order dtd. 14-5-2010 passed u/s 143(3) of the Income Tax Act, 1961 (the Act). On appeal the ld. CIT(A) partly allowed the appeal. 3. Being aggrieved by the order of the ld. CIT(A) the assessee and the Revenue both are in appeal before us. ITA No. 5606/Mum/2011 (Assessee's appeal). 4. All the grounds taken by the assessee are against the only relief allowed by the ld. CIT(A) of Rs. 3 lacs out of total disallowance of expenses Rs. 17,41,127/-. 5. Brief facts of the above issue are that the A.O. observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O. and ld. CIT(A). 8. We have carefully considered the submissions of the rival parties and perused the material available on record. We find the facts are not in dispute inasmuch as it is also not in dispute that the ld. CIT(A) while allowing the relief of Rs. 3 lacs has followed the appellate order for the A.Y. 2006-07. We further find that the Tribunal in assessee's own case in ITA No. 2474/M/2011 for A.Y. 2007-08 order dtd. 11-4-2012 while following the order of the Tribunal for A.Y. 2006-07 restricted the disallowance to 50% out of disallowance sustained by the ld. CIT(A) vide finding recorded in para 7 & 8 of the order as under:- "7 We have heard the ld AR of the assessee as well as the ld DR and considered the relevant material. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal disallowance sustained by the learned CIT(A)towards these expenses at Rs. 3.74 lakhs is reduced by 50% to Rs. I .81akhs. We hold accordingly". In the absence of any distinguishing features brought on record by the parties, we respectfully following the order of the Tribunal supra and keeping in view the rule of consistency, hold that it will meet the ends of justice if the total disallowance sustained by the Id. CIT(A) towards these expenses at Rs,7,57,390/- is reduced by 50% to Rs. 3,78,695/-. Accordingly, the assessee gets a relief of Rs. 3,78,695/-. We hold and order accordingly. The ground taken by the assessee is, therefore, partly allowed, while the grounds taken by the revenue are rejected." 8 Accordingly, following the ear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade the disallowance of Rs. 2,18,67,277/- and added back the same to the taxable income. On appeal the ld. CIT(A) following the order of the Tribunal in assessee's own case, however, directed the A.O. to restrict the disallowance at 25% and deleted the balance amount of addition. 11. At the time of hearing the ld. D.R. supports the order of the A.O. 12. On the other hand the ld. Sr. Counsel for the assessee submits that this issue is covered by the order of the Tribunal in assessee's own case, therefore, following the same he has no objection if the disallowance of expenditure is restricted to 25% of the expenses. He also placed on record a copy of the order of the Tribunal. 13. We have carefully considered the submissions of the rival p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clients of the assessee were aware that they were required to reimburse the illegal expenses. In fact it is clear that after assessee filed its reply neither the assessee nor the A.O. made any effort to prove that such expenditure was illegal and was being reimbursed by such clients/principals. Therefore, in the interest of justice we would like to decide the issue finally. 8. In the case of A.P.L. (India) P. Ltd. vs. DCIT 96 ITD 227 (Mum) it was held as under: - "I. Section 37(1) of the income-tax Act, 1961, Business expenditure - Allowability of - Block period 1-4-1989 to 16-11-1999 - Whether payment of 'speed money' to dock workers of Port Trust for expediting process of loading/unloading of ships is a legitimate business expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1998- 99 respectively being alleged illegal expenses." In the present case also Ld. Sr. Advocate agreed that he will have no objection if sundry expenses are disallowed to the extent of 25% of the expenses. Therefore, in view of the concession made by the Ld. Sr. Advocate as well as the order of the Tribunal in the case of M/s. N. Jamnadas & Co. vs. ACIT supra], we set aside the order of the Ld. CIT(A) and direct the AD to make the disallowance of 25% of the sundry expenses." 5. Accordingly, following the earlier order of the Tribunal, we direct the Assessing Officer to make the disallowance of 25% of the sundry expenses." In absence of any distinguishing feature brought on record by the Revenue, we respectfully following the consiste ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
