IN THE ITAT MUMBAI BENCH ‘L’
S.H.A.M.K. International (P.) Ltd.
versus
Income-tax Officer 9(3)(1), Mumbai
IT Appeal Nos. 6756 to 6758 (Mum.) of 2008 & 407 (Mum.) of 2009
[Assessment years 2000-01 to 2002-03 & 2005-06]
August 10, 2012
ORDER
I.P. Bansal, Judicial Member
All these appeals are filed by the assessee and they are directed against three separate orders passed by Ld. CIT(A),Cen-1, Mumbai dated 29/9/2008 for assessment years 2000-01, 2001-02 & 2002-03 and another order dated 29/11/2008 for assessment year 2005-06. Grounds of appeal in all these appeals read as under:
Grounds of Appeal for A.Y.2000-01:
“The grounds of appeal are without prejudice to one another. Learned C.I.T (Appeals)/C/I and Learned ITO 9(3) (1) have erred in matter of fact as well as law as under:
1. Re-opening u/s 147/148 is without valid reasons.
2. Treating appellant as Permanent Establishment of a Foreign Company and treating receipts from them as business receipt and expenditure as business expenditure.
3. Rejection of Books of accounts u/s 145 on irrelevant and incorrect grounds
4. Making addition of Expenditure which is not charged to P&L A/c nor claimed any deduction there of at any time.
i. Addition of Expenses out of cash expenses 50,000/-
ii. Disallowance of Donation Rs. 3,65,242/-
5. Addition of Expenses charged to Profit & loss A/c Rs.50,000/- out of cash, conveyance & telephone expenses.
6. Addition of Rs 10,27,199/- on estimation basis 5% of total expenditure of Rs. 2,05,43,980/- as a new ground of addition and without considering over all facts.
7. An applicant craves for leave to add, omit or alter grounds of appeal
8. Prayer: All additions may be removed”
Grounds of Appeal for A.Y.2001-02:
“The grounds of appeal are without prejudice to one another. Learned C.I.T (Appeals)/C/I and Learned ITO 9(3) (1) have erred in matter of fact as well as law as under:
1. Re-opening u/s 147/148 is without valid reasons.
2. Treating appellant as Permanent Establishment of a Foreign Company and treating receipts from them as business receipt and expenditure as business expenditure.
3. Rejection of Books of accounts u/s 145 on irrelevant and incorrect grounds
4. Making addition of Expenditure which is not charged to P&L A/c nor claimed any deduction there of at any time.
i. Addition of Expenses out of cash expenses 50,000/-
ii. Disallowance of Donation Rs. 3,70,038/-
5. Addition of Expenses charged to Profit & loss A/c Rs.75,000/- out of cash, conveyance & telephone expenses.
6. Addition of Rs 20,94,671/- on estimation basis 5% of total expenditure of Rs. 4,81,93,425/- as a new ground of addition and without considering over all facts.
7. An applicant craves for leave to add, omit or alter grounds of appeal
8. Prayer: All additions may be removed”
Grounds of Appeal for A.Y.2002-03:
“The grounds of appeal are without prejudice to one another. Learned C.I.T (Appeals)/C/I and Learned ITO 9(3) (1) have erred in matter of fact as well as law as under:
1. Re-opening u/s 147/148 is without valid reasons.
2. Treating appellant as Permanent Establishment of a Foreign Company and treating receipts from them as business receipt and expenditure as business expenditure.
3. Rejection of Books of accounts u/s 145 on irrelevant and incorrect grounds
4. Making addition of Expenditure which is not charged to P&L A/c nor claimed any deduction there of at any time.
i. Addition of Expenses out of cash expenses 50,000/-
ii. Disallowance of Donation Rs. 3,76,177/-5. Addition of Expenses charged to Profit & loss A/c Rs.75,000/- out of cash, conveyance & telephone expenses.
6. Addition of Rs 12,56,012/- on estimation basis 5% of total expenditure of Rs. 2,51,20,253/- as a new ground of addition and without considering over all facts.
7. An applicant craves for leave to add, omit or alter grounds of appeal
8. Prayer: All additions may be removed”
2. As it can be seen from the above grounds some of the grounds are common. For A.Y 2000-01 to 2002-03 the assessee is also assailing assessment on the invalidity of reassessment proceedings. The copy of reasons recorded for each of the assessment year has been placed at Page-4 of the paper book filed for the respective years. The main reason stated is that the assessee had received certain payments in the respective years from one UAE concern named as M/s. Miraj Pte. Ltd. (Sharjah ,UAE) on account of advertisement and business promotions and assessee had made certain expenditure against those receipts under various heads and all these entries were not routed through P&L Account. Certain donations were also debited which according to AO were not allowable as business expenditure. As no written agreement between assessee and the said concern was made available for receiving that money and making expenditure the AO has formed a belief that income chargeable to tax has escaped in the hands of the assessee. Year wise receipts and expenditure and also imports by the assessee from the said concern has been tabulized in assessment order and is reproduced below for the sake of convenience.
