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TMI Blog2015 (5) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... igible. - Decided in favour of assessee. Penalty u/s 271(1)(C) - disallowance the payment of office Rent - Held that:- Before us, except for making submissions that the CA firm Todarwal & Todarwal had made the submissions. This according to us does not serve any purpose. Unless the assessee is able to fully substantiate from his records, which are worth consideration with, the evidence, the query of the AO/ revenue authorities remain uncomplied with and getting and expecting a relief is a happy presumption by the assessee. Since, even before us the assessee was unable to bring anything worth the salt to substantiate the expenses, we do not intend to interfere with the order of the CIT(A), which we sustain. - Decided against assessee. - ITA No. : 3906/Mum/2012, ITA No. : 3907/Mum/2012 - - - Dated:- 21-4-2015 - Shri B R Baskaran And Shri Vivek Varma JJ. For the Appellant : Shri Naryan Atal For the Respondent : Shri Pavan Kumar Beerla ORDER Per Vivek Varma, JM: The two appeals are filed by the assessee against the orders of CIT(A) 23, Mumbai, dated 27.04.2012, wherein, the CIT(A) has sustained the levy of penalty of ₹ 1,80,375/- in assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue whichever is lower and on that basis adopted the market value of obsolete stock is also not disputed. The revenue authorities were of the view that the cost should have been taken, according to us, was an infirm presumption. The assessee during regular proceedings and in penalty proceedings showed the value reasonable value of its products. This information and detail was always there with the revenue authorities. In such a case, an allegation on the assessee that it had concealed income or provided inaccurate particulars of income, would be wrong. 11. In so far as disallowance of items of P L account are concerned, it is fact that the AO had made the disallowances on ad-hoc basis, because the assessee could not provide necessary details. 12. No doubt the assessee could not provide the necessary details, but the fact remains that these expenses were routine administration expenses. The assessee is not a proprietary concern, where one can think of disallowances made on personal use. In such a circumstance, penalty is not exigible. 13. Considering the entire circumstance, we are of the opinion that penalty is not exigible. 14. We, therefore, set aside the order of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the firm had never operated from the office at 304B Manish Commercial Building. Under the circumstances, the AO had came to the conclusion that the payment of office rent is a devised only to inflate the expenses in hands of the assessee firm and reduce the profit and accordingly, disallowed the payment of office Rent at ₹ 2,40,000/-. iii) The assessee firm had debited an amount of ₹ 4,43,789/- on account of Repairs. Assessee firm had filed a Debit Note from Mangla Shelter P.M. and also details of repairs and maintenance. The AO had observed that there was no godown shown 10 the Balance Sheet and the place of repairs shown in Debit and details differs Therefore, the assessee was asked to explain such huge expenditure. The assessee firm vide letter dtd. 6/11/2000 stated that they have no ownership godown and they have rented godown at Byculla. The AO had observed that the owner of the godown premises was one Diana Soap Co situated at Sussex Cross Road Byculla and not Saidpur Jute Co. as shown in the debit note for repairs of Mangla Shelters Pvt.ltd. The assessee firm also failed to furnish the details called by AO, such as Application for permission with approved p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... just a few minutes in a fortnight and therefore apparently did not reply. The office premises was used for the purpose of business. Turnover of ₹ 29,55,212/- was made possible due to taking this premise on rent. Previous year turnover was Nil. The premises was used for the purpose of business and hence the expenditure of ₹ 1,20,000/- on account of office is allowable as business expenditure . The firm has not paid any other office rent to any other entity and has no office premises of its own. The appellant also filed confirmation from Avantika Gupta and Anika Gupta who confirmed having received ₹ 60,000/- each from the appellant as rent for one year for the period April 1997 to March, 1998. On the other hand, the Assessing Officer after discussing in detail in the assessment order came to the conclusion that the appellant has not been able to establish that it had carried out the business from the premises (304 B or 304 C) which have been taken on rent from Avantika Gupta and Anika Gupta. The appellant has also not submitted any documentary evidence to prove that the business was carried out at Manish Commercial Centre. Therefore the Assessing Officer held th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said premises . In the original order the Assessing Officer stated that the assessee firm's main office situated at 161-C, Mittal Tower, Nariman Point, Mumbai. As regards the claim of that the partner was sitting in Worli office it is worth mentioning here that Shri Sushil Gupta is Karta of HUF of Sushilkumar Gupta who is partner of the assessee firm. He is associated with number of concerns of his group and all the offices of group concerns are situated at 161C, Mittal Tower, Mumbai. There was only one employee Shri Satpathy and it is claimed by the assessee that the employee was sitting in the premises situated at Manish Commercial Centre and the partner Shri Sushi( Gupta was also occasionally sitting there. At present, Shri Satpathy is not employee of M/s Gaurisons, also the whereabouts of Shri Satpathy not known to the assessee, therefore, it is not possible to confirm the same from him. From the aforesaid discussion, the assessee itself had not confirmed that from which premises (30413 or 304C) the business was carried out. Also it has not submitted any documentary evidences to prove that the business was carried out at Manish Commercial Centre. Therefore, it is cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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