TMI Blog2010 (11) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has made different hire charges to different parties ranging from Rs.90,000/- to Rs.1,80,000/- The A.O. invoked the provisions of section 40A(2)(b) of the I.T. Act and estimated 50% of the total payment of hire charges as reasonable and made disallowance of 50% amounting to Rs.3,90,000/- Held that:- assessee tried to distinguish the payments by filing various computation statements of individual persons by way of additional evidences to justify that these people have offered income and paid taxes. What we notice from the documents placed on record is that most of them were having marginal incomes and tax payable was very marginal at reduced rates whereas the firm could have paid tax at a higher rate had the amounts been paid reasonably. - Decided against the assessee. - ITA No. 666/Mum/2006 and ITA No. 1555/Mum/2007 - - - Dated:- 19-11-2010 - D. Manmohan, B. Ramakotaiah, JJ. Sanjay R. Parikh for the Appellant Hari Govind Singh for the Respondent ORDER B. Ramakotaiah: ITA No.666/Mum/2006 and ITA No.842/Mum/2006 are cross appeals by the assessee and the Revenue for A.Y. 2002-03 and ITA No.115/Mum/2007 is assessee's appeal for A.Y. 2003-04 against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice and that affidavit filed in this regard can not be entertained at this stage as the appellant has not demonstrated with any evidence to show that the AO's action was ever challenged to allow the AO to rebut the appellant's claim. Thus in absence of any such evidence brought on record I am not inclined to accept the argument of the appellant and hence this ground of appeal is rejected." 3. The assessee is contesting the issue in five grounds, ground No.1 being on validity of the assessment and ground Nos. 2 to 5 on merits. The Revenue is contesting the issue on the restriction of vehicle maintenance expenses from 10% to 5% made by the CIT(A). For the sake of clarity these grounds are extracted as under:- Assessee's Appeal ITA No. 666/Mum/2006: A.Y. 2002-03 "1. VALIDITY OF ASSESSMENT On the facts and in the circumstances of the case and in law the Assessment made is bad in law in as much as that the mandatory requirement of issuing of notice U/s. 143(2) within a statutory period of 12 months was not fulfilled. The learned C.I.T. (appeal) erred in concluding that there is no merit in appellant's ground ignoring even the affidavit filed by the appellant wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee brought to the notice of the A.O. in the course of assessment proceedings that the assessee has not received any notice under section 143(2) and even then the assessee submitted information with reference to section 142(1) issued subsequently in 2004. It was further submission of the learned counsel that just because the assessee has participated in the assessment proceedings there is no bar in raising legal objection on the issue of jurisdiction and relied on the decision of the Special Bench in the case of Kuber Tobacco Products (P.) Ltd. vs. DCIT 117 ITD 273 (Del) (SB). On merits its was submitted that the issues are covered against the assessee by the ITAT orders in earlier years. 5. The learned D.R., however, could not furnish any evidence in support of having served the notice on 18.10.2003 but relied on the findings of the CIT(A). 6. We have considered the issue. The main contention of the assessee is that the so called noticed issued on 16.10.2003, i.e. within one year of filing the return had not been served on the assessee as stated in the assessment order. The paper book placed on record also indicates that the assessee, after receipt of notice under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count was held against the assessee in the earlier years as the CIT(A)'s order in those years were upheld by the ITAT. The other issues of vehicle maintenance and disallowance of vehicle hire charges and also under section 40A(3) were held against the assessee in the other assessment years and in the Revenue appeal on the issue of vehicle maintenance restricted to 5%, the same was also held against the Revenue in earlier years. A detailed discussion was made in assessee's appeal for A.Y. 2003-04. Consequently on merits the grounds on disallowances in both the appeals are to be rejected. Since ground No. 1 on the issue of jurisdiction was allowed, the appeal of the assessee was treated allowed and Revenue appeal was accordingly dismissed. ITA No. 1555/Mum/2007: A.Y. 2003-04 9. Assessee has raised the following grounds:- "1. ORDER U/S. 144 On the facts and in the circumstances of the case and in law the learned CIT(A) erred in confirming that the Assessing Officer was fully justified in rejecting the books of accounts and passing order U/s. 144, without dealing with the written submissions dtd 15/6/06, 22/8/06 and 12/12/06 (copies enclosed) 2. DISALLOWANCE OF VEHI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.90,000/- which was paid to Mr. Mangilal Garg (HUF) as reasonable and disallowed the balance account on that basis. 13. Similar issue was already held against the assessee vide orders of the ITAT in ITA No.8171/Mum/2004 for A.Y. 2001-02. As this issue was already held against the assessee in earlier year on similar set of facts, We cannot deviate from the findings. Moreover, the assessee tried to distinguish the payments by filing various computation statements of individual persons by way of additional evidences to justify that these people have offered income and paid taxes. What we notice from the documents placed on record is that most of them were having marginal incomes and tax payable was very marginal at reduced rates whereas the firm could have paid tax at a higher rate had the amounts been paid reasonably. In view of this we do not find any merit for admitting the additional evidences or in deviating from the earlier orders on the issue. Accordingly ground is rejected. 14. In the result, appeal in ITA No.666/Mum/2006 is allowed and appeals in ITA No.842/Mum/2006 and ITA No.1555/Mum/2007 are dismissed. Order pronounced in the open court on 19.11.2010. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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