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TMI Blog2016 (12) TMI 242X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of disallowance on account of car expenses, depreciation of motor car, telephone expenses, conveyance allowance and travelling expenses - Held that:- We find that the adhoc disallowances has been made by the AO at the rate of 20% of the total expenses in respect of car expense, depreciation , telephone, office expenses, conveyance, miscellaneous expense, foreigen travel and other travelling. The ld CIT(A) reduced qua car , depreciation and telephone to 1/6th whereas the disallowance in respect of office expense, conveyance and miscellaneous was retained at 10% and the disallowance on account of foreign travel and other travel was confirmed. . Having seen the nature of expenses incurred , we find that the basis of confirmation is tribunal decision and CIT(A) decisions in the case of the assessee himself. Further we find that disallowances were purely on adhoc basis. We are therefore of the considered opinion that it would be justified and reasonable if the disallowances is restricted to 10% of the total expenses Addition on account of commission income on the basis of AIR information available with the department - Held that:- We find from the reconciliation statement that m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d served upon the assessee. 3. The issue raised in ground No.A is against the confirmation of action of the AO by the ld.CIT(A) in treating the Short Term Capital Gains (STCG) of ₹ 13,77,568/- as income from business. 4. Facts relating to the above issue are that the assessee has shown STCG of ₹ 13,77,568/- on sale of investments. The AO observed that the activities of the assessee were of trading nature as he was involved in sale and purchase of shares and thus dealing in shares at a very frequent interval. The AO was of the opinion that the assessee was routinely involved in share transactions and therefore, the AO treated this gain as income from business by rejecting all the contentions of the assessee. 5. At the outset, the ld. AR fairly conceded that the issue involved in this ground is covered against the assessee by the decision of the Mumbai Bench of the Tribunal in assessee s own case in ITA No. 7881/Mum/2010 AY : 2007-08 dated 12.09.2012. 6. We have heard the rival submissions and perused the materials on records including the orders of authorities below. We find that an identical issue has been decided by the Tribunal in ITA No. 7881/Mum/2010(s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apital gain as business income. In view of the fact that in the assessee s own case the issue has been decided against the assessee. We, therefore , respectfully following the decision of the coordinate bench uphold the orders of authorities below in treating the STCG as income from business. 7. Grounds of appeal No.B is against the confirmation of the action taken by the AO in making the disallowance u/s 14A read with Rule 8D of ₹ 18,91,670/- by the ld. CIT(A). During the course of assessment proceedings, the AO observed that the assessee has earned dividend income and no expenses for the earning of the dividend income were apportioned and disallowed as per the provisions of section 14A of the Act. The assessee was asked vide show cause notice dated 24.11.2010 as to why the provisions of section 14A read with rule 8D should not be invoked which was replied by the assessee by submitting that the provisions of section 14A r.w.r 8D were not applicable to the assessee as no expenses have been incurred in relation to exempt income. However the AO brushing aside the contentions of the assessee invoked the provisions of section 14A read with rule 8D and made disallowance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lling expenses as under:- Sr. No. Particulars Amount (Rs) A Adhoc disallowance of car expenses 54,408 B Adhoc disallowance of depreciation on Motor car 28,555 C Adhoc disallowance of Telephone expenses 43,912 D Adhoc disallowance of office expenses 63,550 E Adhoc disallowance of conveyance 10,786 F Adhoc disallowance of Misc. expenses 15,278 G Adhoc disallowance of foreign expenses 1,73,752 J Adhoc disallowance of traveling expenses 2,04,596 12. The AO during the course of assessment proceedings found that the above said expenses from C to E were incurred by the assessee and charged to the profit and loss account which included personal element as the assessee could not prove the genuineness of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of expenses incurred , we find that the basis of confirmation is tribunal decision and CIT(A) decisions in the case of the assessee himself. Further we find that disallowances were purely on adhoc basis. We are therefore of the considered opinion that it would be justified and reasonable if the disallowances is restricted to 10% of the total expenses. Accordingly, we set aside the order of the ld.CIT(A) and direct the AO to make the disallowance equal to 10% of total expenses claimed by the assessee. Accordingly, this ground is partly allowed. ITA No.7362/Mum/2013(AY-2009-10) 14. Ground No.A is against the confirmation of addition of ₹ 27,49,000 by the ld.CIT(A) as made by the AO on account of commission income on the basis of AIR information available with the department by disregarding the facts that the assessee was following cash system of accounting. 15. Brief facts of the case are that the assessee was engaged in the business of commission agent and during the course of assessment proceedings, the AO found that the assessee has credited commission of ₹ 86,51,000/- whereas as per the AIR information available with the AO the commission received was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- on account of foreign travel expenses. 19. We find from the record that the ld.CIT(A) while confirming the action of AO observed that the assessee failed to demonstrate that the expenses of ₹ 2000/- were incurred wholly and exclusively for the purpose of business. We do not find any infirmity in the findings of the ld.CIT(A) and accordingly same is confirmed on this issue. This ground is rejected. 20. The next is C ground which is in respect of disallowance of travelling expenses of ₹ 4,969/- made by the AO and confirmed by the ld.CIT(A). 21. We find that the ld.CIT(A) upheld the action of the AO on the ground that the assessee failed to prove that one of his employees visited Shirdi for cracking the business deal with one of the client but relevant documents have not been submitted as to which employee was sent to Shirdi, to whom did he meet and what business purpose was served. Since, the assessee failed to controvert the findings of the AO before the ld.CIT(A) and here also no contrary documents were submitted by the ld.AR to disprove the finding of the ld.CIT(A), we confirm the findings of the lower authorities. Ground taken by the assessee is rejected ..... X X X X Extracts X X X X X X X X Extracts X X X X
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