TaxTMI 
TaxTMI 
2016 (9) TMI 750
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....posed of by common order for the sake of convenience. 2. In ITA No.7028/Mum/2011 for A.Y. 2004-05, assessee has filed appeal on following grounds: "1) The Learned Commissioner of Income Tax (Appeal) - 5, Mumbai has erred in confirming the action of the Learned Assessing Officer in confirming the additions of Rs. 8,53,910/- 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 th....
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....oration has shown the said amount outstanding. Cheques issued to Piyush Chheda and Dawal Naik was against proper invoices. Assessing Officer has made addition on account of bogus 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.....
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....f capital expenditure or personal 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 does not change the colour of liability in the hands of assessee. There is nothing on record to suggest that assessee had not incurred this expenditure in lieu of services rendered to it. There is connivance of asses....
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....ose 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 Piyush Chheda and Dhaval Naik. These have been incurred by assessee for the business purpose. So, same should not be disallowed for reasons discussed above. Accordingly, these amounts in question are directed to be allowed. 2.3 As a result, appeal filed by assessee for A.Y. 2004-05 is allowed. 3. In ITA No.7027/Mum/2011 for A.Y. 2003-04, assessee has filed appeal on following grounds: "1) The Learned Commissioner of Income Tax (Appeal) - 5, Mumbai has erred in ....