MUKESH DANDUMAL ROHIRA ,MUMBAI vs. ACIT, CENTRAL CIRCLE 6(2), MUMBAI

आयकरअपीलीयअिधकरण�ायपीठमुंबईम�। IN THE INCOME TAX APPELLATE TRIBUNAL “J (SMC)” BENCH, MUMBAI BEFORENARENDER KUMAR CHOUDHRY, JM & SHRI ARUN KHODPIA, AM I.T.A. No.8358/Mum/2025 (Assessment Year: 2016-17) Mukesh DandumalRohira ACIT Central Circle 6(2), Mumbai 112 Bldg.2A, Windermere, Off Air India Building, Nariman Point, Link Road, Oshiwara, Mumbai- Vs. Mumbai-400021 400053 PAN: ADSPR8053R Assessee- अपीलाथ� / Appellant Revenue-��थ�/ Respondent :

Assesseeby : Shri Vimal Punmiya& Mitesh Shah : Shri Aditya Rai (Sr. DR) Revenueby : 16.04.2026 Date of Hearing : 18.05.2026 Date of Pronouncement

O R D E R Per Arun Khodpia, AM: The captioned appeal is preferred by the assesseeto challenge the order of Commissioner of Income Tax Appeals-54, Mumbai [in short, “the Ld. CIT(A)”] dated 08.10.2025 for the assessment year 2016-17, which in turn arises from assessment order u/s 143(3) of the Income Tax Act, 1961 (in short, “the Act”), dated 13.12.2018 passed by Assistant Commissioner of Income Tax Central Circle 6(2), Mumbai (in short, “the Ld. AO”). The grounds of appeal are as under:

ITA No. 8358/Mum/2025 Mukesh DandumalRohira “1. The learned Commissioner of Income (Appeals) [CIT(A)] has erred in law and on facts and circumstances of the case in upholding the disallowance of Rs.16,75,510/- under various heads of business expenditure claimed by the Appellant detailed as under:- Nature of Business Total Amount of Expenditure Allowed Expenditure Expenditure claimed such expenditure (In (In Rs.) Disallowed (In Rs.) (In Rs.) Rs.) Power and Fuel 81,640 60,000 21,640 Rent 9,55,800 Nil 9,55,800 Salaries/Wages 13,53,800 10,00,000 3,53,800 Advertisement 2,81,570 Nil 2,81,570 Interest 65,700 Nil 65,700 Total 16,75,510 2. The learned CIT(A) has erred in law and on the facts and circumstances of the case, in relying upon the report of Income Tax Inspector, who had inspected the business premises of the Appellant after four years, wherein the circumstances had changed and therefore unreliable. 3. The learned CIT(A) has erred in law and on the circumstances of the case, in not relying upon the third-party confirmation produced before him as additional evidence and disallowing Rs. 2,81,570/- on account of advertisement expenses. 4. The learned CIT(A) has erred in law and on the facts in coming to conclusion that the Appellant has not furnished satisfactory explanations and supporting evidences and therefore upheld disallowance of expenses like Power & Fuel, Salaries / Wages, and Interest. 5. The learned CIT(A) has upheld the levy of interest charged u/s. 234-A, u/s. 234-B and u/s. 234-C aggregating to Rs.1,88,126/- without a speaking order of A.O” 2. Brief facts of the case are that the assessee has filed his return of income on 17.08.2016 declaring total income of Rs.9,51,440/-. The said return, thereafter,

was selected for scrutiny assessment. Accordingly, notices u/s 143(2) and 142(1) were issued, calling upon the assessee to furnish certain details. The assessee did not respond to the notices. Finally, a notice on 07.12.2018 has been issued informing the assessee that in view of failure to furnish details as required vide

ITA No. 8358/Mum/2025 Mukesh DandumalRohira notice u/s 142(1), the assessment would be completed under best judgment following the provisions of section 144 of the Act. 3. In response to aforesaid notice, Counsel of the assessee appeared before the Ld. AO and furnished information. The Ld. AO has observed from the information furnished before him that certain expenses claimed by the assessee are not supported with requisite / sufficient evidence regarding payment or the explanations furnished are not found satisfactory so as to allow the claim of the assessee. Accordingly, certain disallowances were made, which enhances the income of assessee, the reasons for such disallowances,quantum thereof and findings, extracted from the order of Ld. AO are as under: “The expenses claimed as per the Profit and Loss Account are tabulated below and remarks are given against each item: Particulars Amount Remarks Disallowed

No evidence, allowed Power and fuel 81,640 21,640 Rs.5,000/- p.m. Rent agreement in name of Rent 9,55,800 wife and for residence. Not 9,55,800 allowed No evidence, allowed Rs. Salaries/wages 13,53,800 3,53,800 10,00,000/- Sales Promotion 1,12,980 Allowed – reasonable 0 Advertisement 2,81,570 No evidence. Not allowed. 2,81,570 Conveyance 1,07450 Allowed-reasonable 0 Telephone 43,480 Allowed-reasonable 0 Other expenses 45,780 Allowed-reasonable 0 Interest 65,700 No evidence. Not allowed 65,700 Total 16,75,510 5. The above disallowance/partial disallowance/allowance merits further discussion, which is as follows:

ITA No. 8358/Mum/2025 Mukesh DandumalRohira a. Power and fuel - It is stated in the letter that electricity bills are attached but the same were not enclosed. However, no business can run without electricity. Therefore, although bills are not produced, allowing a sum of Rs.5,000/- would be reasonable. b. Rent - The assessee has submitted a copy of a rent agreement by which his wife, Mrs. Reshma M. Rohira, has taken a residential flat on rent. It is expressly mentioned in the same that thelicensee is in need of a RESIDENTIAL PREMISES. No nexus has been established between the rent paid for residential premises with income declared by the assessee. Therefore, the claim of expense on rent is fully disallowed. c. Salaries/wages - Other than a hand written list stating that a Secretary, driver, accountant and 3 helpers were employed no other document has been produced to prove that salaries were paid by the assessee. However, to run the brokerage business the assessee would have employed some staff. Allowing Rs. 10,00,000/- would meet the ends of justice. d. Sales promotion It is stated that the expense of Rs 1 12,980/- was incurred in entertaining customers with tea and snacks. The claim is found to be reasonable, hence allowed. e. Advertisement - Copies of 2 invoices issued by one Global Advertisers for Rs.4,800/- and Rs.16,800/- have been submitted. However, the invoices are not made on the assessee. In the absence of any evidence, evidence, the claim of advertisement expenses cannot be allowed. Hence, disallowed fully. f. Conveyance, telephone and other expenses These expenses are found to be reasonable. hence allowed. g. Interest - No information has been provided as to amount of loan taken, interest paid to whom and at what rate and whether tax was deducted at source has been provided. Therefore, the claim that interest was paid cannot be allowed. Hence, disallowed fully. h. As recorded on proceeding sheet dated 12.12.2018, the representative of the assessee has not given any reason for submitting complete details.”

Particulars Profits and gains of business or profession As per assessee's computation 13,17,023

ITA No. 8358/Mum/2025 Mukesh DandumalRohira Add: Expenses disallowed - Paras 4,5 16,75,510 29,92,533

Income from other sources As per assessee's computation 15,713

Income from house property As per assessee's computation -2,00,000 Gross Total Income 28,08,246 Less; Deduction under Chapter VIA U/s. 80C – Para 6 1,12,406 U/s.80TTA –as claimed 1,301 1,13,707 Total income 26,94,539 Total income – rounded off u/s 288A 26,94,540 5. Being aggrieved, assessee preferred an appeal before the Ld. CIT(A), wherein the different expenditures claimed by the assessee and disallowed by the Ld. AO are discussed by the Ld. CIT(A) and has confirmed the disallowance of such expenses as made by the Ld. AO. However, the claim of assessee u/s 80C and 80D are allowed with directions to the AO for necessary verification in this respect. The appeal of assessee, therefore was party allowed. 6. Dissatisfied with the aforesaid disallowance made by AO and confirmed by Ld. CIT(A), assessee preferred an appeal before us.

ITA No. 8358/Mum/2025 Mukesh DandumalRohira 7. Before us, Ld. AR of the assessee explained the nature and justification for claim of each and every expenditure along with relevant evidence, which was disallowed by the AO and confirmed by the Ld. CIT(A). 8. Per contra, Ld. Sr. DR representing revenue vehemently supported the orders of revenue authorities. 9. We have considered the rival submissions, perused the material available on record. On a thoughtful and detailed consideration of the facts in the present case and perusal of evidence for expenses, as explained by the Ld. AR on behalf of the assessee during the hearing before us and contested by the Ld. Sr. DR, we have arrived at some amicable conclusions, so as to harmoniously close the litigation. Accordingly, the disallowances to be confirmed or deleted, as per following observations: (i) Power & Fuel: The Ld. AO has rightly adjudicated the issue; therefore, no further relief can be granted. (ii) Rent: Since the assessee was using the premises for its business as well for the residents, 50% of the rent paid by the assessee shall be allowed against the request to allow at least 2/3rd of the said rent. (iii) Salary & Wages: Since, the salary and wages expenditure incurred are pertains to the business of the assessee, no disallowance can be made. Therefore, the disallowance of Rs.3,53,800/- has been directed to be deleted.

ITA No. 8358/Mum/2025 Mukesh DandumalRohira (iv) Advertisement, Interest, etc.: 50% is allowed as against disallowance made by the Ld. AO.

Particulars Amount Remarks by Ld. AO Disallowed Sustainable Quantum of by Ld. AO, Disallowance as per our sustained by findings Ld. CIT(A) Power and fuel 81,640 No evidence, 21,640 21,640/- allowed Rs.5,000/- p.m. Rent 9,55,800 Rent agreement in 9,55,800 4,77,900/- name of wife and for residence. Not allowed Salaries/wages 13,53,800 No evidence, allowed 3,53,800 0 Rs. 10,00,000/- Advertisement 2,81,570 No evidence. Not 2,81,570 1,40,785/- allowed. Interest 65,700 No evidence. Not 65,700 32850/- allowed Total 16,75,510 6,73,175/- 10. The Ld. AO is directed to re-compute the taxable income of the assessee, in above terms. 11. Resultantly, the appeal of assessee stands partly allowed, in terms of our aforesaid observations. Order pronounced in the open court on 18-05-2026.

Sd/- Sd/- (NARENDER KUMAR CHOUDHRY) (ARUN KHODPIA) JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai, Dated : 18-05-2026. Ankit K., Sr. PS

ITA No. 8358/Mum/2025 Mukesh DandumalRohira

Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT

BY ORDER,

(Dy./Asstt. Registrar) ITAT, Mumbai