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Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI
Before: SHRI G.S.PANNU & SHRI RAVISH SOOD
ORDER PER G.S.PANNU,A.M:
The captioned are bunch of four appeals pertaining to the same assessee for assessment years 2003-04, 2005-06 to 2007-08.
At the time of hearing, it was noticed that on an earlier date an adjournment application was moved on behalf of the assessee, in terms of which the matter was adjourned for today. On the appointed date of hearing, neither the assessee nor any representative appeared on its behalf and, therefore, in terms of Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963, the appeal is being disposed off exparte, qua the assessee after hearing the respondent Revenue on merit.
The Ld. Departmental Representative appearing for the Revenue pointed out that the issues in all the assessment years were quite similar and arise out of the respective assessments made by the Assessing Officer under section 143(3) r.w.s. 153A of the Act dated 20/12/2010, as a consequence of search and seizure action carried out by the Department under section 132(1) of the Act in the Arch Group of cases on 24/04/2008.
Firstly, we may take up the appeal in 2003-04, which is directed against an order passed by CIT(A)-37, Mumbai dated 13/02/2012, which in turn, arises out of an order passed by the Assessing Officer under section 143(3) r.w.s. 153A of the Income Tax Act, 1961 (in short ‘the Act’) dated 20/12/2010.
4.1 In this appeal, the grievance of the assessee is against the action of the CIT(A) in confirming the disallowance of Salary expenditure and Professional fee of Rs.4,95,187/- and Rs.2,68,350/- respectively.
4.2 In brief, the relevant facts are that in response to a notice issued under section 153A of the Act, assessee filed a return of income declaring a loss of Rs.2,96,744/-, which was similar to the return of income originally filed under section 139(1) of the Act for the instant assessment year. In the ensuing assessment, the Assessing Officer noted that no business activity was carried out by the assessee and the only income declared was by way of interest. The Assessing Officer disallowed the expenditure debited in the P&L Account on account of salaries - Rs.4,95,187/- and Professional fee – Rs.2,68,350/- on the ground that there was no business activity carried out by the assessee. The CIT(A) has also affirmed the decision of the Assessing Officer.
4.3 Before us, none appeared on behalf of the assessee to support the Grounds of appeal raised. The Ld. Departmental Representative, on the other hand, pointed out that in para 2.4.15 of the order, the CIT(A) has sustained the addition, inter-alia, on the ground that no submissions were made by the assessee on merits of the claim of salary and professional fee. Quite clearly, the aforesaid position continues before us and, therefore, we uphold the findings of the CIT(A) to the effect that assessee had failed to substantiate the claims of the aforesaid expenditure and, therefore, the appeal of the assessee has to fail. Thus, in so far as, the appeal of the assessee for assessment year 2003-04 is concerned, the same is dismissed.
5. In the appeal for assessment year 2007-08, the issue relates to allowability of financial charges of Rs.79,100/- debited by the assessee in the P&L Account. The Assessing Officer noted that no business activity had materialized during the year under consideration and that the funds relatable to the aforesaid financial charges could be understood not to have been used for the purposes of business. Therefore, the expenditure was disallowed, which, has also been affirmed by the CIT(A). It is noticed that the CIT(A) has passed a common order for the three assessment years and the findings of which we have approved for the assessment year 2003-04 in relation to the claim of salary and Professional fee payment, also apply in so far as the allowability of financial charges are concerned. Thus, for the reasons discussed in the earlier paras, in assessment year 2007-08 also the order of the CIT(A) is affirmed and assessee fails in its appeal.
6. In the appeals for the assessment years 2005-06 and 2006-07, the issue involves the allowability of financial charges, which is similar to the issue discussed by us in the earlier appeal and, therefore, in these two years also, the order of the CIT(A) is affirmed and assessee fails in its appeals.
Resultantly, the captioned appeals of the assessee are dismissed.
Order pronounced in the open court in the presence of Departmental Representative at the conclusion of hearing on 22/05/2017.