What did the Tribunal hold?

The Tribunal dismissed the grounds related to the disallowance of expenses, following its own precedents. For the addition related to Specialty Food India Ltd., the Tribunal remanded the issue to the Assessing Officer for fresh examination.

The assessee is aggrieved by the disallowance of various expenses and an addition on account of a transaction with Specialty Food India Ltd. The Revenue contended that similar disallowances were confirmed in prior assessment years.

What were the issues?

Whether the disallowance of various expenses is justified and whether the addition on account of a transaction with a third party is sustainable without proper confirmation.

Parekh Distributors vs ACIT | ITAT Mumbai 2015

Income Tax Appellate Tribunal, MUMBAI BENCHES “C”, MUMBAI

Before: Shri Joginder Singh, & Shri Ashwani Taneja

For Appellant: Shri Nitish Joshi &, Shri S.S. Jhunjhunwala

For Respondent: Shri Somnath Ukkal-DR

Hearing: 03/11/2015

आदेश / O R D E R

Per Joginder Singh (Judicial Member) The assessee is aggrieved by the impugned order dated 23/07/2012 of the ld. First Appellate Authority, Mumbai.

2 Parekh Distributors

During hearing of this appeal, at the outset, the Ld. DR, Shri Somnath Ukkal, contended that so far as, confirming the disallowance of 5% of motor car expenses amounting to Rs.22,884/- (5% of Rs.4,57,684/-), telephone expenses amounting to Rs.59,556/-(5% of Rs.11,91,118/-), conveyance expenses amounting to Rs.20,291/- (5% of Rs.4,05,829/-), Staff welfare expenses amounting to Rs.11,439/- (5% of Rs.2,28,789/-), Sundry expenses amounting to Rs.1,47,569/-(5% of Rs.29,51,385/-) and travelling expenses amounting to Rs.70,734 (5% of Rs.14,14,672/-), identically, were decided against the assessee for A.Y. 2006-07 (ITA No.2661/Mum/2010) and in some other assessment year also. This factual matrix was not controverted by the ld. counsel for the assessee.

2.1. We have considered the rival submissions and perused the material available on record. We find that for A.Y. 2006-07, in the case of the assessee itself, the Tribunal vide order dated 11/03/2015 (ITA NO.2661/Mum/2010), wherein, such disallowances were confirmed upto 10% and the Tribunal vide order dated 30/05/2012 considered the facts confirmed the disallowance at 5%, therefore, following the above decision and the material available on record, we find no merit in these grounds (grounds no.1 to 7), therefore, the grounds are dismissed and decided against the assessee.

The next ground pertains to confirming the addition of Rs.5,39,068/- in respect of transaction with Specialty Food 3 Parekh Distributors India Ltd. on the basis of ITS details downloaded from the system. The ld. counsel invited our attention to page 4, para - 7 of the assessment order and para 4.3 (page-5) of the impugned order along with page 35 of the paper book along with page 24 of the paper book containing the letter of the assessee to Specialty Food. It was contended that the addition may be deleted. On the other hand, the ld. DR, defended the conclusion arrived at in the impugned order.

3.1. We have considered the rival submissions and perused the material available on record. We note that the assessee admitted to have entered into transaction with M/s Specialty food India Pvt. Ltd. and in spite of providing of ample opportunities could not furnish confirmation from Specialty food India Pvt. Ltd., therefore, in the absence of such confirmation, the addition was confirmed. Before us, the ld. counsel for the assessee, invited our attention to page- 24 of the paper book containing letter dated 16/11/2011 addressed to Specialty Food India Pvt. ltd. in which some details of TDS has been mentioned. We note that this letter was never produced before the Assessing Officer. Therefore, we remand this issue to the file of the ld. Assessing Officer to examine the claim of the assessee and then decide in accordance with law. The assessee be given opportunity of being heard, thus, this ground of the assessee is allowed for statistical purposes only.

Finally, the appeal of the assessee is partly allowed for statistical purposes only.

4 Parekh Distributors This Order was pronounced in the open court in the presence of ld. representatives from both sides at the conclusion of the hearing on 03/11/2015.

PAREKH DISTRIBUTORS,MUMBAI vs. ASST CIT CIR 12(3), MUMBAI

What did the Tribunal hold?

What were the facts?

What were the issues?

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