IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 3215/M/09 ASSESSMENT YEAR: 2006-07 MR. ATUL M. OZA, APPELLANT 2, GOODLUCK APARTMENT, SUBHAS LANE, MALAD (E), MUMBAI 400 097. (PAN AADPO9878K) VS. INCOME TAX OFFICER, RESPONDENT 24(1)(3), MUMBAI. APPELLANT BY : MR. RAHUL K. HAKANI RESPONDENT BY : MR. S.K. MADHUKAR O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A)- XXIV, MUMBAI, PASSED ON 24.02.2009 FOR THE ASSESSMENT YEAR 2006-07. 2. GROUND NO. 1 IS IN RESPECT OF DISALLOWANCE OF RS . 1,41,021/- ON ACCOUNT OF MATERIAL CHARGES. 3. THE ASSESSEE CLAIMED EXPENSES OF RS. 2,96,579/- TOWARDS MATERIAL CHARGES AND RS. 20,400/- AS ELECTRICAL SPA RES AND FITTING CHARGES. THE AO ASKED THE ASSESSEE TO PRODUCE BILLS BUT THE SAME WERE PRODUCED ONLY FOR RS. 1,75,958/-. SINCE THE AS SESSEE COULD NOT PRODUCE THE BILL, THE AO MADE ADDITION OF RS. 1,41, 021/- BY TREATING IT AS BOGUS EXPENSES. THE CIT(A) CONFIRMED THE ORDER O F THE AO. 4. THE LEARNED AR WHILE REFERRING TO THE STATEMENT OF FACTS, FILED BEFORE THE CIT(A), SUBMITTED THAT DURING THE ASSESS MENT PROCEEDINGS THE AO ASKED ABOUT THE SUBMISSIONS BILLS, COMPLETE BILLS COULD NOT BE ITA NO. 3215/M/09 MR. ATUL M. OZA 2 SUBMITTED BECAUSE THE SAME WERE NOT LOCATED. HOWEV ER, PAYMENTS WERE MADE BY THE ASSESSEE TO VARIOUS PARTIES THROUG H CROSSED CHEQUES AND TO THIS EFFECT THE ASSESSEE FURNISHED BANK ACCO UNT INDICATING THE PAYMENTS TO VARIOUS PARTIES. THE ASSESSEE NOW LOCAT ED THE BILLS, THEREFORE, THE SAME WERE FURNISHED BEFORE THE CIT(A ). THE LEARNED AR CONTENDED THAT IN SPITE OF BILLS SUBMITTED BEFORE T HE CIT(A), THE CIT(A) COULD NOT CONSIDER THE SAME. 5. AFTER HEARING THE LEARNED DR AND PERUSED OF STAT EMENT OF FACTS FILED BEFORE THE CIT(A), I FIND SUBSTANCE IN THE SU BMISSION OF THE LEARNED AR. SINCE THE BILLS WERE NOT PRODUCED BEFOR E THE AO AND THE SAME ARE REQUIRED TO BE VERIFIED AT THE AOS STAGE, THEREFORE, I REMIT THE MATTER BACK TO THE FILE OF THE AO WITH A DIRECT ION TO DECIDE THE ISSUE AFRESH AFTER CONSIDERING THE ASSESSEES SUBMI SSIONS AND BILLS PRODUCED BY HIM IN ACCORDANCE WITH LAW AFTER PROVID ING OPPORTUNITY OF HEARING TO THE ASSESSEE. 6. GROUND NO. 2 IS IN RESPECT OF DISALLOWANCE OF FU EL AND DEPRECIATION EXPENSES OF RS. 15,000/- AND GROUND NO . 3 IS IN RESPECT OF TELEPHONE EXPENSES OF RS. 7,500/-. 7. THE AO MADE THE AFORESAID DISALLOWANCES ON ACCOU NT OF PERSONAL USE OF CONVEYANCE AS WELL AS TELEPHONE. TH E CIT(A) CONFIRMED THE ACTION OF THE AO. 8. AFTER HEARING THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSING THE RELEVANT MATERIAL ON RECORD, I FIND FR OM P & L A/C, OF WHICH A COPY HAS BEEN PLACED AT PAGE NO. 21 THAT TH E ASSESSEE HAS CLAIMED CAR REPAIR AND MAINTENANCE EXPENSES OF RS. 14,869/- AND DEPRECIATION ON CAR OF RS. 25,500/- & PETROL EXPENS ES OF RS. 15,532/-. THE TOTAL OF THESE EXPENSES COMES ABOUT TO RS. 55,0 00/, OUT OF WHICH THE AO HAS DISALLOWED AD-HOC EXPENSES OF RS. 15,000 /-, WHICH IS ON HIGHER SIDE. IT WILL BE FAIR AND REASONABLE , IF TH E DISALLOWANCE IS ITA NO. 3215/M/09 MR. ATUL M. OZA 3 RESTRICTED TO 10% OUT OF TOTAL EXPENSES, WHICH COME S TO RS. 5,500/-. I DO SO, AND THE AO IS DIRECTED ACCORDINGLY. AS REGAR DS TELEPHONE EXPENSES, THE ASSESSEE HAS CLAIMED RS. 18,509/- TOW ARDS TELEPHONE EXPENSES, OUT OF WHICH THE AO DISALLOWED RS. 7,500/ -, WHICH IS ALSO ON HIGHER SIDE, THEREFORE, THE SAME IS RESTRICTED T O 10% OUT OF TOTAL EXPENSES AND THE SAME COMES TO AROUND RS. 1850/-, W HICH IS ROUNDED OFF TO RS. 2,000/-. THUS, GROUND NO. 2 & 3 ARE PAR TLY ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 18.11.2009. SD/- (A.L. GEHLOT) ACCOUNTANT MEMB ER DATED: 18 TH NOVEMBER, 2009 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, SMC BEN CH, I.T.A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI. KV S.NO. DESCRIPTION DATE INITIALS 1. DRAFT DICTATED ON 13.11.09 SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR 17.11.09 SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER