1 acd IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 1024 OF 2009 M/s Global Credit Corp. Pvt.Ltd. Now Known as M/s Golbal Mansions Pvt.Ltd. ...Appellant Versus Income Tax Officer 2(1)-4, Mumbai ...Respondent. ---- Mr. R.V. Desai, Sr. Advocate with Mr. A.R. Singh, and Mr. Paras Savla, for the Appellant. Mr. A.S. Shivsaran, for the Respondent. --- CORAM : V.C.DAGA AND J.P.DEVADHAR, JJ. DATED : 16th November, 2009 P.C. : 1. Heard learned senior Advocate for the Appellant and Shri Shivsaran learned counsel for the Revenue. Perused appeal. 2. This appeal is directed against the order of the Income Tax Appellate Tribunal, Mumbai Bench dated 19.12.2008 in I.T.A. No. 1486/M/2005 for the Assessment year 1999-2000 to canvas the question as to whether the Tribunal was correct in holding that the sum of Rs.1,00,00,000/- claimed as 2 professional expenses was not an expenditure laid out or expended wholly and exclusively for the purpose of the Appellant’s business and whether disallowing thereof towards legal and proper. 3. We were taken through the impugned order and the findings incorporated therein. Perused application with annexures. 4. Learned senior Advocate appearing for the Appellant tried to make good his submissions presenting calculations relating to the transaction in question. 5. Learned counsel appearing for the Respondent reiterated the submission which was made before the Tribunal and urged that the burden is upon the assessee to establish the genuineness of the claim. It is not for the Assessing Officer to place evidence on record to support the claim of the assessee. According to learned counsel for the Respondent burden of proof would be on the assessee alone. What would keep on shifting is onus. That would get shifted on the Assessing Officer only upon the discharge of prima facie onus by the assessee. According to him, mere debit note from M/s Saimangal Investrade Limited in the sum of Rs.1,00,00,000/- does not constitute prima facie proof of the claim of deduction so as to shift onus on the Assessing Officer. According to him to justify huge expenditure of Rs.100,00,000/- on account of professional charges one has to have a 3 transaction of heavy magnitude. There must be some co-relation between the stakes involved and expenses to be incurred. There had to be some reasonable commercial approach while incurring expenditure. The decision to spend such huge amount of expenditure must reflect business expediency. In the name of business expediency assessee cannot be allowed to claim expenses which no reasonable business mind would accept and has no nexus with the object to be achieved. According to him the Tribunal was justified in recording finding of fact based on appreciation of evidence which can hardly constitute substantial question of law. 6. In reply, learned senior Advocate for the Appellant submits that so far as the business expediency is concerned, assessee himself is a best judge and assessing officer cannot examine it as Appellate Authority. 7. The very same rival submissions were canvased by both the parties before the Tribunal. The said submissions were considered by the Tribunal in the following words: “ Mere Debit Note from M/s Saimangal Investrade Limited that the sum of Rs.1,00,00,000/- has been debited on account of professional advise does not meet the requirement of furnishing of sufficient proof for the claim of deduction. After all, a sum of Rs. 1,00,00,000/- for giving professional advise as to when the shares should be sold or even identifying the buyers is not a small amount from point of taxation. The assessee is required to discharge the 4 burden. Apart from the fact that the assessee has miserably failed to establish the genuineness of the claim, the factors referred to by the Revenue authorities also suggest that the claim made by the assessee does not appear to be genuine. First of all, the assessee has not made a proper reflection of the claim in the books of account. There is a head of “Professional fee” in the Balance Sheet, in which only a sum of Rs.4,00,000/-has been reflected. It was only on the basis of the scrutiny that the Assessing Officer found that the assessee had deducted Rs.5,00,000/- from M/s Saimangal Investrade Limited on account of professional charges. The assessee had not reflected the amount of Rs.1,00,00,000/-under the heard “Professional charges”. Subsequently, the assessee has been asked to furnish evidence in support of the claim that the amount of Rs. 1,00,00,000/- had been paid for services rendered. The assessee had simply given an explanation without any supporting evidence. The Assessing Officer has found a fault even with the explanation of the assessee. The Assessing Officer had also asked the assessee to give the details of the buyers who had been identified by M/s Saimangal Investrade Limited so as to make proper enquiry. So however, the assessee has failed to give the details on the ground that the brokers are not supposed to give the details of the buyers of the shares. Thus contradicts the claim of the assessee that the buyers have been identified first by M/s Saimangal Investrade Limited and thereafter the sale had been effected through the brokers. If the buyers had been identified first by M/s Saimangal Investrade Limited, then the names of the buyers could have been available to M/s Saimangal 5 Investrade Limited as well as to the assessee. So however, the names of the buyers had also not been given to the Assessing Officer to prevent enquiry and verification of the claim of the assessee. It is well established principle of law that the mere payment is not sufficient for allowance of deduction. The CIT(A) has also referred to the decision of the Supreme Court in the case of Laxminarayan Cotton Mills Co. Ltd. (Supra) to support the finding that the burden of proof that the services are rendered lies on the assessee. Reliance has also been placed on the decision of the Supreme Court in the case of Swadesh Cotton Mills Co. Ltd. (supra) to support the contention that even if there is an agreement and proof of actual payment, the assessee has to establish that such a payment was made wholly and exclusively for the purposes of business and that the Assessing Officer was found to take into account all relevant factors to decide as to whether the amount has been expanded for purposes of business. Taking the totality of the facts and circumstances of this case into consideration, we are of the view that the assessee having failed to establish that Rs.1,00,00,000/- paid to M/s Saimangal Investrade Limited for any professional services rendered in connection with the sale of shares of GTL, the Revenue authorities, in our view, are justified in not accepting the claim of the assessee as genuine. We accordingly confirm the disallowance and dismiss the ground of appeal raised by the assessee.” 8. Having taken overall view of the matter and agreeing with the 6 Revenue, we do not find any fault with the view taken by the Tribunal. The Tribunal has appreciated the facts and circumstances available on record and also tried to dissect the transaction. The assessee was asked to furnish evidence in support of the claim by the Tribunal. However, the assessee had sought to offer explanation without producing any supporting evidence. The view taken by the Tribunal cannot be faulted. We concur with the view taken by the Tribunal. After having seen the calculations produced on record, it is clear to our judicial mind that the business transaction was not of such magnitude on which somebody can be heard of spending rupees one crore only for some advise of which no proof and/or nature thereof could be produced on record by the assessee in spite of specific directions in that behalf. 9. In the result, Appeal stands dismissed in limine with no order as to costs. (J.P.DEVADHAR, J.) (V.C.DAGA J.) 7