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TMI Blog2012 (10) TMI 507X X X X Extracts X X X X X X X X Extracts X X X X ..... - ITA No. : 3443/Mum/2011 - - - Dated:- 31-7-2012 - SHRI B. RAMAKOTAIAH AND SHRI AMIT SHUKLA, JJ. Appellant by : Shri C. G. K. Nair Respondent by : Shri D. D. Anjaria ORDER Per AMIT SHUKLA, J.M.: This appeal has been filed by the department against the order dated 25.02.2011 passed by the Ld. CIT(A)-20, Mumbai for the quantum of assessment for the Assessment Year 2007-08 on the following grounds:- 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance of Rs..44,29,684 pertaining to Repairs Maintenance , ignoring the finding of the Assessing Officer that these expenses were of the nature of capital expenditure and therefore ineligible for deduction as revenue expenditure for computing the total income. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in granting relief to the extent of Rs..25,76,267 in relation to the addition on account of rent contract receipt, in so far as the Ld. CIT(A) failed to appreciate the fact brought out in assessment order in support of the addition. 3. On the facts and in the circumstances of the case and in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) the assessee furnished all the relevant bills and vouchers along with the details of expenses in support of the entries in the books of accounts shown before the A.O. The Ld. CIT(A) remanded all the evidences, bills and vouchers along with the books of accounts to the A.O. to submit his remand report after admitting the additional evidence in terms of Rule 46A(1). 3.1 Ld. CIT(A) after carefully considering the contentions of the assessee and the remand report furnished by the A.O. as well as material placed before him, he held that the A.O. has rightly exercise the power u/s.145(3) and upheld the assessment made u/s.144. However, on merits after considering each and every expenses and the comments of the A.O. and the material placed before him he allowed most of the additions after detailed analysis which for the sake of ready reference and also to appreciate the merits of each and every addition is reproduced herein below :- 8. By applying the provisions of section 145(3) and section 144 th eA.O. was entitled to estimate income upon the basis and in the manner in which in his opinion income would be properly deducted. But the assessment must be a fair and honest estimate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o classify them as capital expenditure. There is no basis for making the impugned addition. I therefore delete the amount added of Rs..4429684. Rent and contract receipts 10. The A.O. obtained information in AIR regarding tax deduction at source on rent amounting to Rs.1284205 and contract receipts of Rs.1502072 totaling to Rs.2786277. He observed that though the appellant claimed that they were accounted in its books, the same was unverifiable on account of non-production of books of accounts and other documents. He, therefore, added them to the income of the appellant. 10.2. Being aggrieved, the appellant submits that entire receipt of Rs.2786277 added by the A.O. has been accounted for. The aforesaid income represents income from on hiring the hotel rooms, auditorium and banquet hall. It furnished detailed statement showing date, name of the parties, invoice no. and income head for total amount of Rs.1284205 and similarly, for Rs.1502072 along with the copies of invoices, vouchers etc in the additional materials furnished which were forwarded to the A.O. for his report. The appellant pleads that the disputed amount should be deleted. 10.3 In the remand report, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng aggrieved, the appellant submits that the audit fee was paid to the chartered accountant and the same was debited to legal professional fees. The legal fees were paid to Shirish Gupte, Dinesh Gandhy, Rajendra Pal and Subhash Desai, all advocates for defending a suit filed by MMRDA in matter of lease rent and occupancy of land. It furnished the copy of ledger account showing the details. In remand report, the AO states that the appellant has not given justification for the payment and has not furnished corroborative evidence. I have considered the matter. The AO is not correct in stating that the appellant has not given any justification for the expenses. The same is given in the Statement of Fact along with details of payment. The AO did not even ask the appellant to furnish any other material which he though of corroborative in nature. There is no basis for maintaining the addition. I, therefore, delete the amount added of Rs.5,48,426 on account of impugned disallowance. Excess expenditure 15. The A.O. compared the expenses debited to the P L A/c under 15 sub-heads with similar expenses incurred last year. They comprised expenses on salaries, stipend, consultancy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the reason that the books of accounts were not produced, the AO treated the two sums totaling 1,948 as expenses not allowable and added to the income of the appellant. 20. Being aggrieved, the appellant submits that the amount of Rs.11,000 was received from Shri Chandurkar 17 years ago as a well wisher and friend. Regarding the outstanding liabilities for expenses totaling Rs.39,1O,948, it submits that they were paid in the subsequent year. It furnished details along with the dates of payment in the Annexure filed with the Statement of Facts and pleaded that the addition made be deleted. In the remand report, the AC merely reiterates the stand taken in the assessment order and states that it did not furnish any documentary evidence in remand proceedings to support the claim. In the rejoinder, the appellant denies that the AO ever asked for any details in remand proceedings. 21. I have considered the dispute. Merely because the expenses remained unpaid at the end of the year cannot make them inadmissible deduction. The AO merely reiterates the stand taken in the assessment order without utilizing the opportunity given to him to examine the materials after verifying them f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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