Dimples Cine Advertising Pvt.Ltd., Parke Avenue, 16th/29th Road, Junction, Near Pali Market, Bandra (W), Mumbai-400050 Vs. Income Tax Officer, 9(1)(3), Mumbai.
August, 19th 2015
IN THE INCOME TAX APPELLATE TRIBUNAL "D" BENCH, MUMBAI
BEFORE S/SHRI B.R.BASKARAN,AM AND LALIT KUMAR, JM
( / Assessment Year :2006-07)
Dimples Cine Advertising / Income Tax Officer, 9(1)(3),
Parke Avenue, 16th/29th Road,
Junction, Near Pali Market,
( /Appellant) .. ( / Respondent)
. / . /PAN/GIR No. :AAACD3788P
/ Appellant by None
/Rspondent by Ms.Anu Aggarwal
/ Date of Hearing : 18.8.2015
/Date of Pronouncement: 18.8.2015
/ O R D E R
PER B.R.BASKARAN, AM:
The assessee has filed this appeal challenging the order dated 02-
08-2010 passed by Ld CIT(A)-19, Mumbai and it relates to the assessment
2. None appeared on behalf of the assessee. From the order sheet
noting, we notice that the assessee has refused to receive the notice sent
by the Registry. Hence, we proceed to dispose of the appeal ex-parte
without the presence of the assessee.
2 I T A N o . 7 3 7 3 / Mu m / 2 0 1 0
3. We heard Ld D.R and perused the record. Following two issues are
urged before us by the assessee:-
(a) Disallowance made u/s 40A(2)(b) of the Act.
(b) Disallowance of rent .
The facts of the case are that the assessee is engaged in the business of
leasing, finance, cinema advertising and manpower supply services. On a
perusal of the Profit and Loss account of the assessee, the AO noticed that
the business receipts of the assessee has fallen down by 20%, where as
the expenses claimed by the assessee has increased four times. On a
further closer examination of the expenses, the AO noticed that the salary
paid to the directors has gone up from Rs.60,000/- to Rs.10,20,000/-, i.e.,
in the immediately preceding year the assessee had paid a salary of
Rs.60,000/- to its director, whereas during the year under consideration,
the salary has been paid to the tune of Rs.10,20,000/-. Hence the AO
considered that the salary payment made to the directors is excessive and
unreasonable. Accordingly invoked the provisions of sec. 40A(2)(a) of the
Act and restricted the deduction towards salary paid to the directors to
Rs.2,40,000/- and disallowed the balance amount of Rs.7,80,000/-. The
assessee had claimed rent expenditure of Rs.1,80,000/-. The AO noticed
that the assessee's sister concern is also operating from the same
premises and accordingly restricted the deduction towards rent at
Rs.90,000/- and accordingly disallowed the balance amount of
4. In the appellate proceedings, the ld CIT(A) confirmed both the
disallowances cited above and hence the assessee has filed this appeal
5. The Ld D.R submitted that the assessee has not substantiated the
salary payment of Rs.10,20,000/- made to the directors, particularly when
the business of the assessee is going down. Accordingly, the ld D.R
3 I T A N o . 7 3 7 3 / Mu m / 2 0 1 0
submitted that the assessing officer was reasonable in restricting the
deduction of salary paid to the directors at Rs.2,40,000/-. With regard to
the rent expenditure also, the ld D.R submitted that the same premises
was used by two concerns and hence the AO was justified in disallowing
50% of the rent claim.
6. On consideration of the Ld D.R's submissions and the facts
prevailing in the case, we do not find any infirmity in the decision of Ld
CIT(A) in confirming both the disallowances referred above. Before us, no
material was placed by the assessee in order to contradict the views taken
by the tax authorities. Accordingly, we have no other option but to
confirm the order passed by Ld CIT(A).
7. In the result, the appeal filed by the assessee is dismissed.
Pronounced accordingly on 18th August 2015.
18th August, 2015
(LALIT KUMAR) ( B.R. BASKARAN)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai: 18th Aug, 2015.
. ../ SRL , Sr. PS
/Copy of the Order forwarded to :
1. / The Appellant
2. / The Respondent.
3. () / The CIT(A)- concerned
4. / CIT concerned
5. , , /
DR, ITAT, Mumbai concerned
6. / Guard file.
/ BY ORDER,
, /ITAT, Mumbai