ANAND BAL DHURI,MUMBAI vs. ITO WD 11(1)(1), MUMBAI

O R D E R

Per Manoj Kumar Aggarwal (Accountant Member ):- 1. Aforesaid matter is a recalled matter since the appeal was initially dismissed by Tribunal vide order dated 26/09/2018. However, the order has

Anand Bal Dhuri Assessment Year-2007-08 been recalled, upon assessee’s application, vide M.A. No.206/Mum/2019 order dated 07/07/2019. Accordingly, the appeal has come up for fresh hearing before the Bench. The assessee is aggrieved by confirmation of certain additions as made by Ld.AO in an assessment framed u/s. 143(3) on 23/12/2009. The assessee is a resident individual and stated to be engaged in the business of arranging loans. The assessee reflected net profit of Rs.3.20 Lacs against professional receipts of Rs.20.71 Lacs. Upon hearing rival submissions, our adjudication to the same would be as follows. 2.1 The following quantum additions, upon confirmation by learned first appellate authority, is under challenge before us: - No. Particulars Amount (Rs.) 1. Addition on account of professional fees 1,28,736/- 2. Disallowance of commission and 10,13,100/- professional fee 3. Adhoc disallowance of certain expenses 1,10,730/- @ 20% 4. Unexplained cash credit u/s. 68 39,600/- 2.2 During assessment proceedings, it transpired that the assessee proposed to arrange certain loan for an entity namely M/s. Elite International Pvt. Ltd. and received on account payment of Rs.68.60 Lacs. However, the transaction remained un-fructified and the assessee was to refund the amount of Rs.56.60 Lacs after retaining fees of Rs.12 Lacs. However, as against the same, the assessee credited only an amount of Rs.10,71,264/- in the Profit & Loss Account and accordingly, the differential i.e. Rs.1,28,736/- was added to the income of the assessee. Further, as a consequence, commission and professional fees of Rs.10.13 Lacs claimed

Anand Bal Dhuri Assessment Year-2007-08 by the assessee were disallowed in view of the fact that the assessee failed to perform his obligation and no loan was arranged. Another addition of Rs.1.10 Lacs was adhoc disallowance @20% against office expenses, driver’s salary, Telephone expenses & Travelling Expenses aggregating to Rs.5,53,651/- since the expenditure was not fully verifiable. The last addition of Rs.39,600/- is addition u/s 68, being the difference in balance reflected by the assessee against M/s. Elite International Pvt. Ltd. and amount demanded by that entity from the assessee. 3.1 Upon careful consideration, we find that the addition of Rs.1,28,736/- would be sustained since no plausible explanation has been put forth by Ld. AR before us, in this regard. Ground No.1 stand dismissed. 3.2 The disallowance of expenditure of Rs.10.13 Lacs, in our considered opinion, was not justified since the assessee was engaged in the business of arranging loans and whatever business expenditure was incurred for the purpose of business, was allowable to the assessee. The deduction of the same was not dependent upon the successful arranging of loans. The Ld. AO has not doubted the genuineness of the expenditure and has accepted the income offered by the assessee out of this transaction. Therefore, the reasoning put forth by Ld. AO could not be a ground to deny the legitimate business expenditure. Therefore, the disallowance of Rs.10.13 Lacs stand deleted. Ground No. 2 stand allowed. 3.3 The adhoc disallowance @20% as made by Ld.AO on account of expenditure aggregating to Rs.5,53,651/- was on the higher side. We restrict the same to 10%. Ground No. 3 stand partly allowed.

Anand Bal Dhuri Assessment Year-2007-08 3.4 The addition made u/s 68 for Rs.39,600/- would not be sustainable in view of the fact that the same was matter of reconciliation only and the differential amount could not be said to be unexplained cash credit within the meaning of Section 68. Ground No. 4 stand allowed. The other grounds are general in nature and would require no adjudication. 4. The appeal stands partly allowed. Order pronounced in the open court on 26th August, 2019.

Sd/- Sd/- (Saktijit Dey) (Manoj Kumar Aggarwal) �ाियक सद� / Judicial Member लेखा सद� / Accountant Member मुंबई Mumbai; िदनांकDated : 26/08/2019 Sr.PS:-Jaisy Varghese आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : अपीलाथ�/ The Appellant 1. ��थ�/ The Respondent 2. आयकरआयु�(अपील) / The CIT(A) 3. आयकरआयु�/ CIT– concerned 4. िवभागीय�ितिनिध, आयकरअपीलीयअिधकरण, मुंबई/ DR, ITAT, Mumbai 5. गाड�फाईल / Guard File 6. आदेशानुसार/ BY ORDER,