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Neptune Container Line and Logistics Pvt. Ltd. Versus DCIT 2 (2) (OSD) , Mumbai

2016 (9) TMI 750 - ITAT MUMBAI

Addition on account of Bogus Expenditure - Expenditure disallowed based on the investigations done by EOW - Held that:- Assessee has claimed the expenditure as it has shown and cheques were issued in the name of Eureka corporation against services rendered by it. Irrespective of the fact that same has not reached destination in spite of their usual mode of payment through banking channel. Moreover, the said amount was paid after deducting TDS. It shows that bonafide of payment in this regard. In .....

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y of the amount in question. It shows that Dilip Mehta of M/s. Eureka Corporation has no grievances against assessee. So, the expenditure in question should not be disallowed in the hands of assessee, irrespective of the fact that same has been fraudulently cornered by somebody, for which, separate legal proceeding claimed to be subjudice. Accordingly, this amount in question should not be disallowed. Regarding other amounts, payments had been made of ₹ 1,19,755/- to Piyush Chheda and S .....

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re directed to be allowed. - Decided in favour of assessee - ITA. Nos. 7027 & 7028/Mum/2011 - Dated:- 8-8-2016 - SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER. For The Appellant : Shri H. N. Motiwala, A.R. For The Respondent : Shri Randhir Gupta, D.R. ORDER PER SHAILENDRA KUMAR YADAV, J.M: Both appeals have been filed by assessee against the orders of Commissioner of Income-Tax (Appeals)-5, Mumbai, dated 06.07.2011 for both A.Ys. i.e. 2003-04 & 2004-0 .....

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OW, where as details available on the records shows proper care was taken at the time of payment and the Learned Assessing Officer has relied only on the findings of EOW. 2) The Learned Commissioner of Income Tax (Appeal) - 5, Mumbai has erred in confirming the action of the Learned Assessing Officer even known the fact that Shri Piyush Chheda was arrested and released on the bail, and these statements were recorded by EOW, which has no relevant on the our Company as we have given these cheques .....

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ri Piyush Chheda, Shri Dhaval Naik and M/s. Eureka Corporation. On the basis of statements of Shri Piyush Chheda and Shri Dawal Naik to EOW, Shri Piyush Chheda along with wife Smt. Meenal Chheda had opened fraudulent bank accounts where they had deposited chques, which they obtained fraudulently with the help of Shri Mayur Walia. The amount which was due to Eureka Corporation was being paid after obtaining the proper invoices deducting the TDS and issued account payee cheques. The owner of Eurek .....

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expenditure detailed as under: S. No. Name F.Y. 2002-03 F.Y. 2003-04 Total 1 Piyush Chheda 180682 119755 300437 2 Eureka Corporation 632765 632765 3 Dhaval Naik 356208 101390 457598 Total 536890 853910 13,90,800 In appeal, this addition was confirmed by CIT(A). 2.1 Assessee reiterated the submissions made before the authorities below and submitted that expenditure in question at the hand of assessee was genuine, so, same should be allowed. On the other hand, ld. Departmental Representative supp .....

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key person within the whole transaction is Sales Executive/Sales Person/ Sales Manager of the company who agrees to pay the commission on behalf of company through the broker Eureka Corporation, Piyush Chheda and Daval Naik and company was receiving the cargo and as per agreed terms by the Manager, company was liable to pay the brokerage/commission against the invoices raised by them. During this period, company has issued all the cheques against invoices raised by them. After checking the TDS .....

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l expenses of assessee), laid out or expended wholly and exclusively for the purposes of business or profession shall be allowed in computing income chargeable under the head Profits and gains of business or profession . Commission paid to Piyush Chheda and Dhaval Naik should be allowed as business expenditure. Even commission was due/paid and payable to Eureka Corporation. However, these cheques issued to Eureka Corporation were fraudulently encashed by Piyush Chedda and Minal Piyush Chedda. It .....

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eached destination in spite of their usual mode of payment through banking channel. Moreover, the said amount was paid after deducting TDS. It shows that bonafide of payment in this regard. In this situation, expenditure in question should not be disallowed on the basis of statements of somebody in proceedings before EOW. Moreover, there is nothing on record that the proceedings of EOW were confronted to the assessee in this regard in any manner. Sequence of the facts show that assessee made pay .....

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oceeding claimed to be subjudice. Accordingly, this amount in question should not be disallowed. Regarding other amounts, payments had been made of ₹ 1,19,755/- to Piyush Chheda and ₹ 1,01,390/- to Dhaval Naik. Those payments to Piyush Chheda and Dhaval Naik should not be disallowed on the analogy of Eureka Corporation as same have been paid to respective parties against their services rendered to assessee. The facts of Eureka Corporation are different from the payments made to Piyus .....

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ssing Officer in confirming the additions of ₹ 5,36,890/- on account of Bogus Expenditure disallowed based on the investigations done by EOW, where as details available on the records shows proper care was taken at the time of payment and the Learned Assessing Officer has relied only on the findings of EOW. 2) The Learned Commissioner of Income Tax (Appeal) - 5, Mumbai has erred in confirming the action of the Learned Assessing Officer even known the fact that Shri Piyush Chheda was arrest .....

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