Income Tax Appellate Tribunal - Mumbai
Jayavant Products Ltd, Mumbai vs Assessee on 29 August, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES "J", MUMBAI
BEFORE SHRI DINESH KUMAR AGARWAL (J.M.)
AND SHRI N.K. BILLAIYA (A.M.)
ITA No. 5093/Mum/2011
Assessment Year : 2008-09
Jayavant Products Limited, Deputy Commissioner of
1401, Raheja Centre, Income-Tax,
Nariman Point, Central Circle -11,
Mumbai -400021. Vs. Mumbai.
PAN AAACJ4489R
(Appellant) (Respondent)
Shri Vijay Mehta
Assessee by :
Mrs. Harsha Parmar
Department by : Shri K.G. Kutty
Date of hearing 22-8-2012
Date of pronouncement 29-8-2012
ORDER
PER DINESH KUMAR AGARWAL, J.M.
This appeal preferred by the assessee is directed against the order dtd. 18-4-2011 passed by the ld. CIT(A) - 37, Mumbai for A.Y. 2008-09.
2. Briefly stated facts of the case are that the assessee is a public limited company and filed its return of income declaring total income of Rs. 'Nil'. On going through the final account and the details of return of income furnished, the A.O. noted that the assessee has not carried out any business as such. However, the assessee has credited its P&L account with Rs. 6,080/- as commission and brokerage and sundry balances written off of Rs. 4,64,318/-. On being asked, it was explained 2 ITA No. 5093/MUM/2011 that the aforesaid commission and brokerage was earned from M/s Senorita Impex Pvt. Ltd. for the parties introduced by the assessee to the said M/s Senorita Impex Pvt. Ltd. for investment in mutual funds and insurance business. The A.O. doubted the services rendered and has observed that there should be Contract Agreement between the assessee company and the said M/s Senorita Impex Pvt. Ltd. The A.O. also observed that earning commission and brokerage is not the main object of the assessee company. The A.O. concluded that the assessee had not carried out any business activity during the financial year 2007-08 relevant to A.Y. 2008-09 and held that since there were no business expenses, hence, he disallowed the entire expenses of Rs. 614981/- debited to P&L account and accordingly completed the assessment at an income of Rs. 4,70,400/- vide order dtd. 23-11-2010 passed u/s 143(3) of the Income Tax Act, 1961 (the Act). On appeal the ld. CIT(A) while confirming the prior period expenses Rs. 1,74,844/-, ROC filing fees Rs. 93,500/-, Legal and professional fees Rs. 2,65,246/- and listing fees Rs. 77,650/-, deleted the balance amount of disallowance and accordingly partly allowed the appeal.
3. Being aggrieved by the order of the ld. CIT(A) the assessee is in appeal before us.
4. Grounds No. 1 & 5 are general in nature which require no adjudication and, hence, the same are rejected being infructuous. 3 ITA No. 5093/MUM/2011
5. Ground No. 2 is against the sustenance of disallowance of prior period expenses Rs. 1,74,844/-.
6. At the time of hearing the ld. Counsel for the assessee submits that the prior period expenses Rs. 1,74,844/- is a separate item debited in the P&L account and not the part of the disallowance of Rs. 6,14,981/- as evident from the copy of P&L account appearing at page 6 of the assessee's paper book, therefore, the ld. CIT(A) has erred in confirming the disallowance of Rs. 1,74,844/- on the ground that the same is not pressed by the assessee.
7. On the other hand the ld. D.R. supports the order of the ld. CIT(A).
8. We have carefully considered the submissions of the rival parties and perused the material available on record. We find that in ground No. 6, before the ld. CIT(A) the assessee has challenged the disallowance of prior period expenses Rs. 1,74,844/- and the ld. CIT(A) on the basis of the letter filed by the assessee on 18-4-2011 that he is not pressing the above ground, confirmed the disallowance made by the A.O. It is not the case of the assessee that he has not taken such ground of appeal or there is no such withdrawal made by the assessee. This being so, we are of the view that the ground raised by the assessee is devoid of any merit and, hence, the same is rejected.
4 ITA No. 5093/MUM/2011
9. Ground No. 3 & 4 are against the sustenance of disallowance of ROC filing fees Rs. 93,500/-, Legal and professional fees Rs. 2,65,246/- and listing fees Rs. 77,650/-.
10. At the time of hearing the ld. Counsel for the assessee submits that the assessee is showing brokerage income from the financial year ended on 31-3-2005 onwards. He further submits that there is no increase in the share capital of the assessee company. The ld. Counsel for the assessee while referring to the details of legal and professional fees Rs. 2,65,246/- appearing at page 13 of the assessee's paper book submits that the expenses claimed by the assessee of ROC filing fees Rs. 93,500/-, Legal and professional fees Rs. 2,65,246/- and listing fees Rs. 77,650/- are routine expenses which the assessee has to incur on year to year basis, therefore, the disallowance made by the A.O. and sustained by the ld. CIT(A) be deleted.
11. On the other hand the ld. D.R. supports the order of the A.O. and the ld. CIT(A).
12. We have carefully considered the submissions of the rival parties and perused the material available on record. We find that there is no dispute that during the year under consideration, there is no increase in the share capital of the assessee. This being so and keeping in view that the assessee is showing brokerage income from the A.Y. 2005-06 onwards and the expenses claimed by the assessee on ROC filing fees Rs. 5 ITA No. 5093/MUM/2011 93,500/-, Legal and professional fees Rs. 2,65,246/- and listing fees Rs. 77,650/- are routine expenses, the genuineness of which has not been doubted by the Revenue, we are of the view that the expenses claimed by the assessee are allowable as revenue expenditure and, hence, the disallowance of these expenses aggregating to Rs. 4,36,396/- made by the A.O. and sustained by the ld. CIT(A) is deleted. The grounds taken by the assessee are, therefore, allowed.
13. In the result, the assessee's appeal stands partly allowed.
Order pronounced on 29-8-2012.
Sd/- Sd/-
(N.K. BILLAIYA) (DINESH KUMAR AGARWAL)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, Dated : 29-8-2012
RK
Copy to:
1. The Appellant
2. The Respondent
3. Commissioner of Income Tax (Appeals)- 37, Mumbai
4. Commissioner of Income Tax - Central -1 Mumbai
5. Departmental Representative, Bench 'J', Mumbai //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI