Print Link Computer and Communication Pvt. Ltd, Bhubaneswar V. ACIT, Bhubaneswar

CO 2/CTK/2014

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 3045 (ITAT-CUTTACK)
• Duration Of Justice: 3 year(s) 6 month(s) 6 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 12-07-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 15-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 06-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: B K MAHAPATRA
• Keywords: Unexplained cash credit; Bogus Share capital; Gift; Commercial expediency
• Section: 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PA V AN KUMAR GADALE, JM ./ ITA NO. 496 & 497 / CTK /20 1 3 ( / ASSESSMENT YEAR : 20 09 - 20 1 0 & 2010 - 2011 ) ACI T, CIRCLE - 2(2), BHUBANESWAR VS. PRINTLINK COMPUTER AND COMMUNICATION PRIVATE LIMITED, 783, SAHID NAGAR, BHUBANESWAR ./ ./ PAN/GIR NO. : A A BCP 0619 G ( / APPELLANT ) .. ( / RESPONDENT ) AND CROSS OBJECTION NO. 02&03 /C TK /20 1 5 (ARISING OUT OF ITA NO.4 96&497 /CTK/201 3 ) ( / ASSESSMENT YEAR : 2009 - 2010 & 2010 - 2011 ) PRINTLINK COMPUTER AND COMMUNICATION PRIVATE LIMITED, 783, SAHID NAGAR, BHUBANESWAR VS. ACIT, CIRCLE - 2(2), BHUBANESWAR ./ ./ PA N/GIR NO. : A ABCP 0619 G ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI D.K.PRADHAN , DR /AS SESSEE BY : SHRI B.K.MAHAPATRA , AR / DATE OF HEARING : 1 5 / 0 6 /201 7 / DATE OF PRONOUNCEMENT 12 / 07 /201 7 / O R D E R PER SHRI PA V AN KUMAR GADALE, JM : TH E CAPTIONED TWO APPEALS HAVE BEEN FILED BY THE REVENUE AND THE ASSESSEE HAS FILED CROSS OBJECTIONS AGAINST THE COMMON ORDER OF CIT(A) - II , BHUBANESWAR , DATED 29.08.2013 , PASSED IN I.T. APPEAL NO. 283/2011 - 12 & 158/2012 - 13 , ARISING OUT OF THE ORDER PASSED BY THE AO U/S. 14 3(3) OF THE I.T.ACT . 2. SINCE THE ISSUES INVOLVED IN THE AFORESAID APPEALS ARE COMMON, THEREFORE, FOR THE SAKE OF CONVENIENCE, BOTH APPEALS OF T HE REVENUE ALONG ITA NO S . 496&497/13 & CO NO S . 02&03 /1 4 2 WITH CROSS OBJECTIONS FILED BY THE ASSESSEE ARE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER. WE SHALL TAKE THE APPEAL OF THE REVENUE IN ITA NO.496/CTK/2013 (AY : 2009 - 2010), WHEREIN THE FOLLOWING GROUNDS HAVE BEEN RAISED : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.55,66,082/ - MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S.68. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.70,20,469/ - MADE BY THE AO ON ACCOUNT OF DISALLOWANCE U/S.40(A)(IA). 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN ACCEPTING THE CONTENTION OF TH E ASSESSEE AND NOT ACCEPTING THE FINDINGS OF THE AO IN VIOLATION OF RULE 46A. 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE B USINESS OF SUPPLY AND SALE OF COMPUTERS AND RELATED EQUIPMENTS. THE ASSESSEE FILED ITS RETURN OF INCO ME FOR THE ASSESSMENT YEAR 2009 - 2010 ORIGINALLY ON 30 - 9 - 2010 SHOWING TOTAL INCOME OF RS.46,62,500/ - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY UNDER CASS AND SUBSEQUENTLY, NOTICE U/S.142(1) OF THE ACT WAS ISSUED ALONG WITH QUESTIONNAIRE. THOUGH LD . AR OF THE ASSESSES DID NOT APPEAR ON THE DATE GIVEN BY THE AO, HOWEVER, ON 8.11.2011 THE LD. AR OF THE ASSESSEE APPEARED AND FURNISHED SOME DETAILS. ON PERUSAL OF THE FINANCIAL STATEMENT S THE AO FOUND THAT THE ASSESSEE DURING THE YEAR UNDER CONSIDERATIO N OBTAINED LOAN FROM THREE CREDITORS AGGREGATING RS.55,00,000/ - AND ISSUED NOTICE U/S.133(6) OF THE ACT , H OWEVER, THE NOTICE CAME BACK WITH A POSTAL REMARK NO SUCH COMPANY IN THIS ADDRESS. ITA NO S . 496&497/13 & CO NO S . 02&03 /1 4 3 THEREAFTER A SHOW CAUSE NOTICE DATED 9.12.2011 WAS ISSUED TO THE ASSESSEE, SHOW CAUSE AS TO WHY THE LOAN TRANSACTION OF RS.55,00,000/ - WITH THREE CREDITORS SHOULD NOT BE TREATED AS UNEXPLAINED CASH CREDIT BECAUSE OF NON - VERIFICATION OF IDENTITY, GENUINENESS & CREDITWORTHINESS OF THE LOAN CREDITORS. IN COMPLIANCE, THE A SSESSEE COULD NOT FURNISH ANY SATISFACTORY EXPLANATION S , AND THE AO MADE AN ADDITION OF RS.55, 66 , 082 / - . ON THE SECOND DISPUTED ISSUE OF DISALLOWANCE OF EXPENSES . T HE AO FOUND THAT THE ASSESSEE HAS CLAIMED DEDUCTION OF EXPENSES WHICH ARE IN THE NATURE OF SE RVICE OUTSOURCE S AND THE ASSESSEE HAS DEDUCTED TO THE EXTENT OF RS.18,96,705/ - AND FOR THE BALANCE AMOUNT TDS WAS NOT DEDUCTED FOR THE VARIOUS REASONS AND FURTHER OUT OF TOTAL TRANSPORTATION CHARGES THE ASSESSEE HAS DEDUCTED TDS ON RS.9,66,834/ - AND ON THE BALANCE AMOUNT THERE WAS NO TDS DEDUCTION . FURTHER THE EXPLANATION S SUBMITTED BY THE ASSESSEE ON NON - DEDUCTION ARE NOT SATISFACTORY AND SUPPORTIVE AND FINALLY , THE AO MADE ADDITION OF RS.70,20,469/ - ALONG WITH OTHER ADDITIONS AND A SSESSED THE TOTAL INCOME AT RS.1,83,49,440/ - AND PASSED THE ORDER U/S.143(3) OF THE ACT. 4. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). IN THE APPELLATE PROCEEDINGS LD. AR OF THE ASSESSEE ARGUED THE GROUNDS AND REITERATED THE SUBMISSIONS MADE B EFORE THE AO . LD. CIT(A) CONSIDERING THE WRITTEN SUBMISSIONS AND THE PAPER BOOK FILED BY THE ASSESSEE, FORWARDED TO THE AO FOR REMAND REPORT AND THE SAME WAS RECEIVED FROM THE AO AND DIRECTED THE ASSESSEE TO FILE REJOINDER. ON THE DISPUTED ISSUE OF DISALLO WANCE OF RS.55,00,000/ - , THE AO HAS ISSUED ITA NO S . 496&497/13 & CO NO S . 02&03 /1 4 4 NOTICE U/S.133(6) OF THE ACT WHICH WAS RETURNED BACK WITH A POSTAL REMARK AS NO SUCH COMPANY IN THIS ADDRESS. LD. AR EXPLAINED BEFORE THE CIT(A) THAT THIS COMPANY BELONGS TO THE SAME GROUP AT KOLKATA AND THEIR R ESPONSE TO NOTICE HAD BEEN RECEIVED BY THE LD. AO THROUGH COURIER ON 25.12.2011 , WHEREAS THE REMAND REPORT WAS SENT BY THE AO ON 2.1.2013. THE CIT(A) DEALT WITH THE OBSERVATIONS OF THE AO ON THE REMAND REPORT ALLOWING THAT ALL THE THREE ALLEGED CREDITORS WERE MERE PAPER COMPANIES AND DID NOT HAVE REAL FUNDS FOR ADVANCING MONEY TO THE ASSESSEE. THE L D. CIT(A) DEALT WITH THE DOCUMENTS AND OBSERVED THAT THE LOAN CREDITORS HAVE OBTAINED H UGE SHARE PREMIUM ON SHARE APPLICATION MONEY THOUGH NOT ENGAGED IN ANY SE RIOUS BUSINESS. LD. CIT(A) CONSIDERED THE FACTS THAT THE LOAN CREDITORS ARE ASSESSED TO TAX AND THE ALLEGED CREDITORS UNEQUIVOCALLY CONFIRM THEIR CREDITS WITH THEIR FULL DETAILS AND LD. CIT(A ) , HELD THAT THE TAXING AUTHORITIES CANNOT PENALIZE THE BORROWER /ASSESSEE ON THE GROUND OF CREDITWORTHINESS OF THE ALLEGED CREDITORS. THE CIT(A) REL IED ON THE CATENA OF JUDICIAL PRONOUNCEMENTS /DECISIONS AND DELETED THE MADE U/S.68 AND OBSERV ED AT PAGE - 6 WHICH READS AS UNDER : - DUE TO THE PREDOMINANT LEGAL VIEW THAT W HEREVER THE IDENTITIES OF CREDITORS ARE NOT IN QUESTION AND FUNDS FLOW FROM THE CREDITORS TO THE ASSESSEE ARE GENUINE THROUGH BANKING CHANNEL AND ABOVE ALL WHERE THE ALLEGED CREDITORS UNEQUIVOCALLY CONFIRM THEIR CREDITS WITH THEIR FULL DETAILS, THE TAXING AUTHORITIES CANNOT PENALIZE THE BORROWER/ASSESSEE ON THE GROUND OF CREDITWORTHINESS OF THE ALLEGED CREDITORS. IT IS WISER TO TAKE ON THE ALLEGED CREDITORS IF THERE IS DOUBT REGARDING THE GENUINENESS OF THEIR FUNDS OF SOURCES THEREOF. IN T HIS VIEW OF THE M ATTER, I HAVE TO DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.55,66,082/ - MADE U/S.68. ITA NO S . 496&497/13 & CO NO S . 02&03 /1 4 5 ON THE SECOND DISPUTED ISSUE OF DISALLOWANCE FOR NON - DEDUCTION OF TDS, THE CIT(A) REFERRED TO THE REMAND REPORT AND OBSERVED THAT WHEREVER THERE HAS BEE N NO TDS, THE ASSESSEE WAS NOT GUILTY OF NON - DEDUCTION AS PER LAW AND DELETED THE ADDITION U/S.40(A)(IA) OF THE ACT. 5. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE IS IN APPEAL AND THE ASSESSEE IS IN CROSS OBJECTION BEFORE THE TRIBUNAL. 6. BEFORE US, L D. DR ARGUED THAT THE CIT(A) WAS NOT CORRECT IN DELETING THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S.68 WITHOUT CONSIDERING THE BASIC REQUIREMENTS OF THE GENUINENESS AND CREDITWORTHINESS AND PRAYED FOR ALLOW ING OF THE APPEAL. 7. CONTRARY, THE LD. AR RELIED ON THE ORDERS OF CIT(A) AND SUPPORTED THE CASE WITH THE DOCUMENTS. 8. WE HAVE HEARD THE SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE SOLE CRUX OF THE ISSUE BEING UNSECURED LOAN OBTAINED BY THE ASSESSEE AND THE AO MADE ADDITION U/ S.68 AND THE CIT(A) HAS DELETED THE ADDITION WITHOUT EXAMINING THE GENUINENESS AND CREDITWORTHINESS OF THE LOAN CREDITOR S . IN THE COURSE OF HEARING, LD. AR REFERRED TO THE B ANK STATEMENT OF THESE THREE LOAN CREDITORS WHERE THE INCOME IS GENERATED AND RELIE D ON THE A UDITED B ALANCE SHEET, PROFIT AND LOSS ACCOUNT AND I NCOME TAX RETURN AND THE ASSESSEE HAS OBTAINED LOAN S FROM THESE COMPANIES OUT OF THE SHARE APPLICATION TRANSACTIONS . THE AO HAS MADE AN OBSERVATION THAT THE ASSESSEE HAS NOT PROVED THE INGREDIENT S REQUIRED U/S.68 OF THE ACT, WHEREAS THE CIT(A) BASED ON THE REMAND REPORT AND MADE AN EXHAUST IVE FINDINGS IN HIS ORDER AND DELETED ITA NO S . 496&497/13 & CO NO S . 02&03 /1 4 6 THE ADDITION BASED ON THE JUDICIAL DECISIONS. WE FIND THAT BEFORE THE CIT(A), LD. AR HAS RELIED ON PLETHORA OF JUDICIAL PR ONOUNCEMENTS, WHEREIN THE RATIO OF DECISION OF HONBLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS (P) LTD., [2008] 216 CTR 195 (SC), HAVE BEEN FOLLOWED. THE CIT(A) HAS FOUND THAT SHRI ASHOK AGRAWAL AND SRI ISWAR SHARA (IDENTIFIED DIRECTORS) WERE RUNNING T HE 3 COMPANIES IN QUESTIONS AT THE IDENTIFIED ADDRESS AND THE ACCOUNTS WERE AUDITED. THE COMPANIES WERE ALSO OPERATING BANK ACCOUNT AND THE TRANSACTIONS OF LOAN HAVE BEEN ROUTED THROUGH BANKING CHANNEL. THEREFORE, THE IDENTITY OF THE COMPANIES AND GENUINE NESS OF THE TRANSACTIONS FROM THE COMPANIES TO THE ASSESSEE ARE NOT IN QUESTION. IN OUR OPINION, WHERE THE IDENTITIES OF CREDITORS ARE NOT IN QUESTION AND FUNDS FLOW FROM THE CREDITORS TO THE ASSESSEE ARE GENUINE THROUGH BANKING CHANNEL AND ABOVE ALL WHERE THE ALLEGED CREDITORS UNEQUIVOCALLY CONFIRMED THEIR CREDITS WITH THEIR FULL DETAILS, THE ASSESSEE SHOULD NOT BE PENALIZED ON THE GROUND OF CREDITWORTHINESS OF ALLEGED CREDITORS. ACCORDINGLY, WE ARE IN AGREEMENT WITH THE FINDINGS OF THE CIT(A) IN THIS REGA RD AND UPHOLD THE SAME . HENCE, THIS GROUND OF REVENUE IS DISMISSED. 9 . ON THE SECOND DISPUTED ISSUE OF NON - DEDUCTION OF TDS, THE LD. DR SUBMITTED THAT THE TDS WAS NOT DEDUCTED ON PAYMENT AND THE LD. CIT(A) WAS NOT CORRECT IN DELETING THE ADDITION AND LD. A O RELIED ON CIT(A)S ORDER . WE FIND THE CIT(A) HAS MADE AN EXHAUSTIVE DISCUSSION S IN HIS ORDER AND DEALT WITH THE PROVISIONS AND FURTHER SUBMITTED THAT THE ASSESSEE WAS NOT TREATED AS ASSESSEE IN DEFAULT FOR APPLYING THE ITA NO S . 496&497/13 & CO NO S . 02&03 /1 4 7 PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. THE L D. CIT(A) RELIED ON THE MATERIAL SUBMITTED BEFORE HIM IN APPELLATE PROCEEDINGS, WHICH WERE FORWARDED TO THE AO FOR REMAND REPORT AND HAS NOT DEDUCTED TDS WHERE THE PAYMENT S ARE BELOW RS.20000/ - AND TEST CHECKED THE TRANSACTION AND EXPENSES WE RE NOT DISPUTED BY THE REVENUE. ACCORDINGLY, WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) ON THIS GROUND AND UPHOLD THE SAME. THIS GROUND OF REVENUE IS DISMISSED. 1 0 . IN REGARD TO GROUND NO.3, ON THE QUERY OF THE BENCH TO REVENUE TO ID ENTIFY ANY FRESH DOCUMENTS HAVE BEEN FILED BEFORE THE CIT(A) IN VIOLATION OF RULE 46A, THE LD. DR COULD NOT PLACE ANY SATISFACTORY EXPLANATION AND, A CCORDINGLY, WE DISMISS THIS GROUND OF REVENUE. 11 . THUS, APPEAL OF THE REVENUE IN ITA NO.496/CTK/2013 (AY : 2009 - 2010) IS DISMISSED. 1 2 . SINCE WE HAVE DISMISSED THE A PPEAL OF THE REVENUE, THEREFORE, THE CROSS OBJECTION (I.E. CO NO.02/CTK/2014) FILED BY THE ASSESSEE SUPPORTING THE FINDINGS OF THE CIT(A), BECOME S INFRUCTUOUS AND THE SAME IS DISMISSED. 1 3 . NOW, W E SHALL TAKE UP THE REVENUES APPEAL IN ITA NO. 497/CTK/2013 (AY : 2010 - 2011), WHEREIN FOLLOWING GROUNDS HAVE BEEN RAISED : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS. 66 , 15 , 842 / - MA DE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S.68 IN REGARD TO LOANS SHOWN BY THE ASSESSEE . 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS. 14.00,000/ - MADE BY THE AO U/S.68 ON ACCOUNT OF UNEXPLAINED SHARE CAPITAL. 3 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.98,343/ - ITA NO S . 496&497/13 & CO NO S . 02&03 /1 4 8 MADE BY THE AO DISALLOWING THE EXPENSES WITHOUT PROPER NEXUS WITH THE BUSINESS. 4 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.50,500/ - MADE BY THE AO ON ACCOUNT OF ROC FILING EXPENSES. 5 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIF IED IN ACCEPTING THE CONTENTION OF THE ASSESSEE AND NOT ACCEPTING THE FINDINGS OF THE AO IN VIOLATION OF RULE 46A. 1 4 . THE REVENUE HAS CHALLENGED THE ACTION OF CIT(A) ON THE GROUND OF DELETION OF UNEXPLAINED CASH CREDIT S . THE SIMILAR ISSUE WAS DECIDED BY US IN THE ASSESSMENT YEAR 2009 - 2010, WHERE THE TRIBUNAL HAS DISMISSED THE VERY SAME ISSUE IN PARA 8 OF THIS ORDER. ACCORDINGLY THIS GROUND OF REVENUE IS DISMISSED. 15 . ON SECOND GROUND , THE LD. DR ARGUED THAT THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE A DDITION OF RS.14 LAKHS MADE BY THE AO U/S.68 OF THE ACT ON ACCOUNT OF EXPENDITURE. THE AO WHILE PERUSING THE FINA NCIAL STATEMENTS FOUND THAT THOUGH THE RECONCILIATION STATEMENT COULD NOT SATISF Y THE ACCOUNTING PRINCIPLE S , SRI RAJESH KUMAR DORA DOES NOT HAV E SUFFICIENT FUNDS IN THE ACCOUNT S WHERE FOR THE CAPITAL INTRODUCTION BY ISSUANCE OF A CHEQUE FOR RS. 14 LAKH. HENCE, THE CREDIT OF RS. 14 LAKHS STANDS UN - EXPLAINED AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 1 6 . THE CIT(A) HAS DEALT WITH THE ISSUE AT PAGE 9 OF THE ORDER AND CONSIDER ED THE WRITTEN SUBMISSIONS AND DELETED THE ADDITIONS OBSERVING AS UNDER : - IN THE REJOINDER, THE A/R HAS ELABORATELY EXPLAINED THE RECONCILIATION OF THE ACCOUNTS. IT WILL SUFFICE TO SAY THAT IN THE ASSESSMENT ORDER, THE AO WAS ANALYZING ONLY THE SHARE CAPITAL ACCOUNT AND NOT THE BANK ACCOUNT OF THE APPELLANT COMPANY. A CHEQUE OF ITA NO S . 496&497/13 & CO NO S . 02&03 /1 4 9 RS.14,00,000/ - WAS AVAILABLE WITH COMPANY ON 31.03.2010(THE CORRESPONDING CREDIT HAD NOT COME TO THE BANK ACCOUNT OF THE COMPANY). THE COMPANY WA S IN A POSITION TO CREDIT THIS AMOUNT IN THE SHARE CAPITAL ACCOUNT. THE CHEQUE COULD BE PRESENTED FOR CORRECTION AFTER 31.03.2010 AND WAS IN FACT COLLECTED FROM THE SAVINGS BANK ACCOUNT OF SHRI DORA ON 05.04.2010. I SEE NO INCONGRUITY IN THE BANK RECONCILI ATION OR IN THE CREDIT OR RS.14,00,000/ - TOWARDS SHARE CAPITAL OF THE APPELLANT COMPANY. THEREFORE, THE ADDITION MADE IN THIS REGARD STANDS DELETED. 1 7 . WE, ON PERUSAL OF THE ORDER OF CIT(A), FOUND THAT THOUGH THE ASSESSEE HAS ISSUED THE CHEQUE FOR THE PU RPOSE OF SHARE CAPITAL, TH E CHEQUE WAS CLEARED SUBSEQUENTLY IN THE NEXT ASSESSMENT YEAR I.E. ON 5.4.2010 . HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A), WHO TOOK A REASONABLE DECISION CONSIDERING THE FACTS AND TRANSACTION DELETED THE ADDITION . ACCORDINGLY, WE UPHOLD THE SAME AND DISMISS THIS GROUND OF REVENUE. 18 . WITH REGAR D TO ADDITION OF RS.98,343/ - MADE BY THE AO, THE CIT(A) AFTER VERIFICATION OF THE ARTICLES AND THE PERSONS/ BUSINESS ENTITIES TO WHOM THESE HAVE BEEN PRESENTED , HELD THAT TH ESE PRIZES/CUSTOMARY GIFTS ARE NORMAL FOR MAINTAINING A H EALTHY BUSINESS CONTACT S AND DIRECTED THE AO TO ALLOW THE EXPENDITURE IN FULL. WE FIND FROM THE OBSERVATION S OF THE LD. CIT(A) AND CONSIDERING THE NATURE OF BUSINESS TRANSACTIONS , NEXUS OF COMMERCIAL EXPEDIENCY, THE ASSESSEE COMPANY HAS TO MAINTAIN ITS RELATION WITH THE DISTRIBUTORS, AND FURTHER THE GENUINENESS OF THE EXPENSES IS NOT DOUBTED BY THE REVENUE. ACCORDINGLY , WE ARE NOT INCLINED TO INTERFERE IN THE ORDER OF THE CIT(A) OF THIS DISPUTED ISSUE A ND UPHOLD THE ACTION OF CIT(A) AND REVENUES APPEAL ON THIS GROUND IS DISMISSED. ITA NO S . 496&497/13 & CO NO S . 02&03 /1 4 10 19 . GROUND NO.4 RELATES TO ADDITION OF RS.50,500/ - MADE BY THE AO ON ACCOUNT OF ROC FILING EXPENSES. THE AO FOUND THAT THE ASSESSEE HAS INCREASED THE SHARE CAPITAL AND PAID RS.50, 5 00/ - TOWARDS ROC FILING FEE AND SINCE THE EXPENSES IS IN THE NATURE OF CAPITAL, THE SAME WAS NOT ALLOWED, WHEREAS THE CIT(A) OBSERVED AT PAGE 11 OF HIS ORDER THAT THE ASSESSEE COMPANY HAD ITSELF DISALLOWED TH E SAID AMOUNT AND THE CIT(A) VERIFIED TH E R ETURN OF INCOME AND WAS SATISFIED WITH THE DISALLOWANCE AND DIRECTED THE AO TO DELETE THE ADDITION. WE, CONSIDERING THE ARGUMENTS OF THE LD. DR AND AR, OF THE VIEW THAT THE CIT(A) HAS DEALT WITH THE DISPUTED ISSUE WHICH IS ACCEPTABLE AND, THEREFORE, WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF THE CIT(A) IN THIS REGARD AND UPHOLD THE SAME. 20 . IN REGARD TO GROUND NO. 5 , THIS ISSUE HAS ALREADY BEEN DECIDED BY US WHILE CONSIDERING THE APPEAL OF REVENUE IN ITA NO.496/CTK/2013 FOR THE ASSESSMENT YEAR 2009 - 2010, WHEREIN WE HAVE DISMISS THIS GROUND THE LD. DR COULD NOT PLACE ANY SATISFACTORY REPLY BEFORE US IN RESPECT OF VIOLATION OF RULE 46A. ACCORDINGLY, THIS GROUND OF REVENUES APPEAL IS DISMISSED. 2 1 . THUS, WE DISMISS THE APPEAL OF THE REVENUE IN IT A NO.497/CTK/2013. 2 2 . IN CROSS OBJECTION NO. 03/CTK/2014 (AY 2010 - 2011), GROUNDS NO. 1 TO 6 RAISED BY THE ASSESSEE ARE IN SUPPORT OF THE ORDER OF THE CIT(A) . HOWEVER, IN REGARD TO GROUND NO.7 RAISED IN THE CROSS OBJECTION ON FOREIGN TRAVEL EXPENSES OF RS.47 ,725/ - DISALLOWED BY THE AO , L D. AR SUBMITTED THAT THESE EXPENSES ARE TOWARDS TOUR OF ONE OF THE DIRECTOR OF THE COMPANY . E VEN BEFORE US THE ASSESSEE COULD NOT PRODUCE BILLS/VOUCHERS ITA NO S . 496&497/13 & CO NO S . 02&03 /1 4 11 AND EXPLAIN THE WAY SAID TOUR WAS FOR THE PURPOSE OF ASSESSEES BUSINESS, WHOLLY AND EXCLUSIVELY. HOWEVER, THERE IS NO SATISFACTORY REPLY FROM THE LD. AR AND ALSO NO EVIDENCE FILED IN THIS REGARD. ACCORDINGLY, WE DISMISS THE CROSS OBJECTION OF ASSESSEE. 2 3 . IN THE RESULT, APPEALS OF THE REVENUE I.E. ITA NOS. 496 & 497 /CTK/2013 ARE DISMISSED AND THE CROSS OBJECTION FILED BY THE ASSESSEE I.E. CO NO. 02 &03 /CTK/2014 ARE ALSO DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 12 / 07 / 201 7 . SD/ - ( N. S. SAINI ) SD/ - ( PA V AN KUMAR GADALE ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 12 / 07 /201 7 . . / PKM , SENIOR PRIVATE SECRETARY / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//