M/s Lokhit Developers, RAJKOT-GUJARAT V. The Income Tax Officer, Ward 1, GANDHIDHAM

CO 23/RJT/2010

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 6014 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 1 month(s) 7 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 27-05-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-05-2011
• Assessment Year: misc
• Appeal Filed On: 20-04-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Keywords: Depreciation
• Section: 37(1); 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI A.L. GEHLOT (AM) AND SHRI N.R.S. GANESA N (JM) I.T.A. NO.1193/RJT/2009 (ASSESSMENT YEAR 2006-07) ITO, WD.1 VS M/S LOKHIT DEVELOPERS GANDHIDHAM NEW VEGETABLE MARKET-17 ANJAR-KUTCH PAN : AACFK6147M (APPELLANT) (RESPONDENT) C.O. NO.23/RJT/2010 (ARISING OUT OF I.T.A. NO.1193/RJT/2009) (ASSESSMENT YEAR 2006-07) M/S LOKHIT DEVELOPERS VS ITO, WD.1 ANJAR KUTCH GANDHIDHAM (CROSS OBJECTOR) (RESPONDENT) ASSESSEE BY : SHRI KALPESH DOSHI REVENUE BY : SHRI AVINASH KUMAR O R D E R PER N.R.S. GANESAN, JM THE REVENUE HAS FILED THE APPEAL AGAINST THE ORDER OF CIT(A)-II, RAJKOT DATED 27-10-2009 PERTAINING TO ASSESSMENT YEAR 2006 -07. THE ASSESSEE HAS FILED THE CROSS OBJECTION ON THE VERY SAME ORDER. THEREFORE, WE HAVE HEARD BOTH THE APPEAL AND THE CROSS OBJECTION TOGETHER AND DIS POSE OFF THE SAME BY THIS COMMON ORDER. 2. LET US FIRST TAKE THE REVENUES APPEAL. 3. THE FIRST ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO ADDITION OF RS.2,80,000 ON ACCOUNT OF TRUCK PLYING INCOME. SHR I AVINASH KUMAR, THE LD.DR SUBMITTED THAT THE ASSESSEE HAS ALSO FILED CROSS OB JECTION WITH REGARD TO VERY SAME ISSUE TO THE EXTENT OF ADDITION OF RS. 95,257 CONFIRMED BY THE CIT(A). ITA NO.1193/RJT/2009 CO 23/RJT/2010 2 ACCORDING TO THE LD.DR THE ASSESSEE IS NOT ENTITLE D FOR ANY CLAIM OF EXPENSES FOR RUNNING THE VEHICLE. MOREOVER, THE ASSESSEE HAS NO T SUBSTANTIATED THE EXPENDITURE INCURRED. THEREFORE, THE ASSESSING OFF ICER HAS TREATED THE INCOME UNDER INCOME FROM OTHER SOURCES. ACCORDING TO TH E LD.DR ONCE THE INCOME WAS SHOWN U/S 44AE THERE WAS NO QUESTION OF ANY FURTHER EXPENDITURE TO BE ALLOWED. ON THE CONTRARY, SHRI KALPESH DOSHI, THE LD.REPRESE NTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS SHOWN THE GROSS REC EIPT OF RS.2.80 LAKHS. THE ASSESSEE HAS CLAIMED EXPENDITURE TOWARDS FINANCE CH ARGES, SALARY TO DRIVER, DIESEL, DEPRECIATION AND OTHERS. ACCORDING TO THE LD.REPRESENTATIVE, THE ASSESSING OFFICER HAS ACCEPTED THE INCOME ON ONE HA ND, HOWEVER, FAILED TO ALLOW THE EXPENDITURE. THE ASSESSE HAS SHOWN THE INCOME UNDER SECTION 44AE FOR TWO MONTHS. THEREFORE, BOOKS WERE NOT REQUIRED TO BE M AINTAINED. EVEN IF THE BOOKS ARE REJECTED, THE ESTIMATION HAS TO BE MADE ONLY U/ S 44AE OF THE ACT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMIT TEDLY, THE ASSESSEE HAS SHOWN THE INCOME U/S 44AE AND CLAIMED THE EXPENDITU RE. THE QUESTION ARISES FOR CONSIDERATION IS WHEN THE ASSESSEE HAS SHOWN TH E INCOME UNDER SECTION 44AE WHETHER IT CAN CLAIM ANY FURTHER EXPENDITURE O R NOT. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF SECTION 44AE OF THE ACT. SUB SECTION (3) OF SECTION 44AE CLEARLY STATES THAT ANY DEDUCTION ALLO WABLE U/SS 30 TO 38 SHALL FOR THE PURPOSE OF SUB SECTION (1) OF SECTION 44AE DEEM TO HAVE ALREADY BEEN GIVEN FULL EFFECT AND NO FURTHER DEDUCTION UNDER THIS SEC TION SHALL BE ALLOWED. HOWEVER, BY WAY OF PROVISO IN CASE OF FIRM THE SALARY AND IN TEREST TO ITS PARTNERS CAN BE REDUCED FROM THE INCOME COMPUTED U/S 44AE. THEREFO RE, ONCE THE ASSESSEE HAS SHOWN THE INCOME U/S 44AE THERE IS NO QUESTION OF ANY FURTHER DEDUCTION EITHER AS EXPENDITURE OR AS DEPRECIATION. THEREFORE , IN OUR OPINION, THE CIT(A) IS NOT CORRECT IN ALLOWING DEPRECIATION AND OTHER EXPE NSES. ONCE THE PROFIT WAS ESTIMATED, ALL EXPENDITURE AND ALLOWANCES U/SS 30 T O 38 OF THE INCOME-TAX ACT ARE DEEMED TO HAVE BEEN ALLOWED, THEREFORE, THERE I S NO QUESTION OF ANY FURTHER ALLOWANCE. IN VIEW OF THE ABOVE, THE ASSESSING OFF ICER IS DIRECTED TO COMPUTE THE INCOME U/S 44AE OF THE ACT. HOWEVER, WE MAKE IT CL EAR THAT THE ASSESSEE IS NOT ITA NO.1193/RJT/2009 CO 23/RJT/2010 3 ENTITLED FOR ANY DEDUCTION TOWARDS EXPENSES AND DEP RECIATION EXCEPT PARTNERS SALARY AND INTEREST. 5. THE NEXT ISSUE ARISES FOR CONSIDERATION BOTH IN REVENUES APPEAL AND ASSESSEES CROSS OBJECTION IS WITH REGARD TO DISALL OWANCE OF RS.6,02,811 TOWARDS EXPENSES AGAINST SALE OF PLOTS. 6. SHRI AVINASH KUMAR, THE LD. DR SUBMITTED THAT TH E ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS DEBITED CERTAIN EXPENSES FOR WHICH NO PROOF WAS FILED. SINCE THE ASSESSEE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNT, THE EXPENSES CLAIMED BY THE ASSESSEE WAS DISALLOWED. ACCORDING TO THE LD. DR THE ASSESSEE HAS NOT ESTABLISHED THE GENUINENESS OF THE EXPENSES CLAIMED FOR SALE OF THE PLOTS. 7. ON THE CONTRARY, SHRI KALPESH DOSHI, THE LD. REP RESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE CARRIED OUT LA ND DEVELOPMENT ACTIVITY AND INCURRED EXPENDITURE. THE ASSESSEE HAS SOLD SOME O F THE LANDS AND THE BALANCE WAS RETAINED AS STOCK IN TRADE. ACCORDING TO THE L D.REPRESENTATIVE, THE ASSESSEE HAS INCURRED EXPENDITURE IN LAND LEVELING, PLOTTING , SWEEPER AND ADMINISTRATIVE EXPENSES. THE LEARNED COUNSEL FURTHER SUBMITTED TH AT THE ASSESSING OFFICER MADE DISALLOWANCE ON PRESUMPTION AND SURMISES. THE VOUCHER PRODUCED BY THE ASSESSEE WERE SIGNED AND STAMPED. ACCORDING TO THE LD.REPRESENTATIVE, THE EXPENDITURE WAS CLAIMED AS PART OF THE CLOSING STOC K. THE ASSESSEE HAS MADE TOTAL PLOTTING OF 1057 PLOTS OUT OF WHICH 112 WERE SOLD AND THE BALANCE 945 PLOTS WERE SHOWN AS CLOSING STOCK. THE ASSESSING OFFICER HAS NOT DOUBTED THE SALE PROCEEDS. THEREFORE, THE EXPENSES ARE ALLOWABLE AN D THE CIT(A) IS NOT JUSTIFIED IN DISALLOWING 20% OF THE EXPENDITURE. THE LD.REPR ESENTATIVE PLACED HIS RELIANCE ON THE DECISION OF THE HYDERABAD BENCH OF THIS TRIB UNAL IN VISHAL INFRASTRUCTURE VS ACIT 107 TTJ 484 (HYD). ITA NO.1193/RJT/2009 CO 23/RJT/2010 4 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND HAVE ALSO CONSIDERED THE MATERIAL AVAILABLE ON RECORD. ADMIT TEDLY THE ASSESSEE CLAIMED EXPENDITURE OF LAND LEVELING, PLOTTING, SWEEPER EXP ENSES AND ADMINISTRATIVE EXPENSES. THE ASSESSEE CLAIMS THAT THE VOUCHERS WE RE SIGNED, STAMPED AND DULY AUTHENTICATED. HOWEVER, THE ASSESSING OFFICER FOUND THAT THE VOUCHERS PRODUCED BEFORE HIM COULD NOT ESTABLISH THE GENUINE NESS OF THE PAYMENT. THEREFORE, THE ASSESSING OFFICER REQUESTED THE ASSE SSEE TO PRODUCE ALL THE BOOKS OF ACCOUNT, DOCUMENTS, ETC FOR VERIFICATION. HOWEV ER, THE ASSESSEE COULD NOT PRODUCE THE SAME. THE QUESTION ARISES FOR CONSIDER ATION IS WHEN THE ASSESSEE COULD NOT ESTABLISH THE PAYMENT, CAN HE CLAIM THE S AME AS EXPENDITURE. WE HAVE CAREFULLY GONE THROUGH THE DECISION OF THE HYD ERABAD BENCH OF THIS TRIBUNAL IN VISHAL INFRASTRUCTURE (SUPRA). IN THE CASE BEFO RE THE HYDERABAD BENCH OF THE TRIBUNAL, THE ASSESSEE COMPANY WAS ENGAGED IN THE B USINESS OF ENGINEERING AND CONSTRUCTING ACTIVITY. THE ASSESSEE CARRIED ON THE WORK BY ITSELF AND IN FEW CASES THE WORK WAS DONE THROUGH SUB CONTRACTORS. A FTER REFERRING TO THE VOUCHER, THE HYDERABAD BENCH OF THIS TRIBUNAL HAS OBSERVED A S FOLLOWS: THE ASSESSING OFFICER HAD NOT BEEN ABLE TO QUANTIF Y ANY PARTICULAR ITEM OF DEDUCTION OR EXPENDITURE AS DISALLOWABLE IT EM FOR TAX PURPOSES AND ONLY GENERAL OBSERVATIONS WERE MADE. NO SPECIFIC DEFECT HAD BEEN POINTED OUT OR A SPECIFIC ADDITION MADE OTHER THAN MAKING GENERAL STATEMENTS AS TO THE AUTHENTICITY OF THE VOUCHERS. SIMPLY STATING THAT THE EXPENDITURE WAS NOT VERIFIA BLE WITHOUT PINPOINTING ANY VOUCHERS SPECIFICALLY WHEN THE ASSE SSEE WAS DISPUTING SUCH A FINDING AND WAS PRODUCING EVIDENCE TO COUNTER THE FINDINGS OF THE ASSESSING OFFICER, COULD NOT BE A V ALID REASON FOR REJECTION OF BOOKS. HOWEVER, DEPENDING ON THE NATU RE OF WORK, CERTAIN PERCENTAGE OF VOUCHERS IS BOUND TO BE SELF- MADE OR LOCAL PURCHASE VOUCHERS. IN SUCH CASES, THE EXPENDITURE CLAIMED ON SUCH VOUCHERS CAN BE EVALUATED ON THE BASIS OF REAS ONABLENESS AND THE ASSESSING OFFICER HAS ALL THE POWERS TO DIS ALLOW A CERTAIN PERCENTAGE OF SUCH EXPENDITURE IF HE FINDS THAT THE CLAIMS ARE UNREASONABLE. BUT TO REJECT THE ENTIRE BOOKS OF AC COUNT ON THE BASIS THAT THEY ARE SOME SELF-MADE VOUCHERS FOR LAB OUR, MATERIAL, TRANSPORT, ETC., CANNOT BE COUNTENANCED. REASONABL ENESS OF THE CLAIM OF EXPENDITU4RE UND3ER EACH HEAD MAY BE A MAT TER OF ADJUDICATION BUT NOT REJECTION OF BOOKS. ITA NO.1193/RJT/2009 CO 23/RJT/2010 5 9. HOWEVER, WE FIND THAT THE ANDHRA PRADESH HIGH CO URT IN THE CASE OF TRANSPORT CORPORATION OF INDIA VS CIT 256 ITR 701 ( AP) HAS WITH RESPECT TO SIMILAR PAYMENT OF EXPENDITURE HAS OBSERVED AS FOLL OWS: THE TRIBUNAL, DEALING WITH THE QUESTION WHETHER T HE NECESSARY CONDITIONS TO ALLOW DEDUCTION UNDER SECTI ON 37(1) OF THE ACT, DID EXIST, PLACING RELIANCE ON THE JUDGMENT OF THE SUPREME COURT IN SASSOON J. DAVIDS CASE [1979] 118 ITR 261 , HELD THAT THE NECESSARY CONDITIONS DID EXIST AND THAT THE EXPRESS ION WHOLLY AND EXCLUSIVELY OCCURRING IN SUB-SECTION (1) OF SECTIO N 37 OF THE ACT, DOES NOT MEAN NECESSARILY. IN OTHER WORDS, ACCOR DING TO THE TRIBUNAL, ORDINARILY IT IS FOR THE ASSESSEE TO DISC HARGE WHETHER ANY EXPENDITURE SHOULD BE INCURRED IN THE COURSE OF HIS BUSINESS OR TRADE AND SUCH EXPENDITURE MAY BE INCURRED VOLUNTAR ILY AND WITHOUT ANY NECESSITY AND IF SUCH EXPENDITURE IS INCURRED, EVEN VOLUNTARILY FOR PROMOTING THE BUSINESS INTEREST AND TO EARN PRO FITS, THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION UNDER SUB-S ECTION (1) OF SECTION 37 OF THE ACT, THOUGH THERE IS NO COMPELLIN G NECESSITY TO INCUR SUCH EXPENDITURE. THERE CANNOT BE ANY QUARRE L WITH THE ABOVE PROPOSITION. BUT THE QUESTION IS WHETHER SUC H PAYMENT IS MADE EITHER TO THE PETTY BROKERS OR TO THE EMPLOYEE S OF THE CUSTOMERS OF THE ASSESSEE-COMPANY. THE ASSESSING A UTHORITY, AFTER APPRECIATION OF THE ENTIRE MATERIALS COLLECTE D BY HIM AND PLACED BEFORE HIM, HAS RECORDED THE FINDING THAT TH E PAYMENT OF SECRET COMMI9SSION IS NOT ESTABLISHED. SUCH A FIND ING RECORDED BY THE ASSESSING AUTHORITY AND AFFIRMED BY THE APPELLA TE AUTHORITY, COULD BE UPSET BY THE TRIBUNAL, BEING THE FINAL FAC T-FINDING AUTHORITY UNDER THE ACT, ONLY IF THE FINDINGS RECORDED BY THE ORIGINAL AUTHORITY AND AFFIRMED BY THE APPELLATE AUTHORITY CANNOT BE S USTAINED ON THE BASIS OF THE RELEVANT MATERIALS AND THE EVIDENCE ON RECORD. AS ALREADY POINTED OUT SUPRA, AS A MATTER OF FACT, THE FACTUAL FINDING RECORDED BY THE TRIBUNAL, IS BASED ON NO EVIDENCE , BUT IS BASED ON IRRELEVANT CONSIDERATIONS WHEREAS THE FINDING RE CORDED BY THE ASSESSING AUTHORITY IS BASED ON RELEVANT MATERIALS AND EVIDENCE. 10. IN VIEW OF THE ABOVE OBSERVATION, THE DECISION OF THE HYDERABAD BENCH OF THIS TRIBUNAL MAY NOT BE ANY HELP TO THE ASSESSEE. THEREFORE, IT IS FOR THE ASSESSEE TO ESTABLISH THAT THE EXPENDITURE WAS INCU RRED FOR THE PURPOSE OF SALE OF THE PLOTS. THE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS EVEN THOUGH THE ASSESSING OFFICER HAS REQ UESTED FOR THE SAME. THE CIT(A) FOUND THAT BOTH THE ASSESSEE AND THE ASSESSI NG OFFICER ARE CORRECT, ITA NO.1193/RJT/2009 CO 23/RJT/2010 6 HOWEVER, HE ESTIMATED THE DISALLOWANCE AT 20%. THE FACT REMAINS IS THAT IT IS FOR THE ASSESSEE TO ESTABLISH THE EXPENDITURE AND THE A SSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNT AND ALL VOUCHERS EVEN THOUGH I T WAS DIRECTED TO DO SO BY THE ASSESSING OFFICER. WHEN THE ASSESSING OFFICER DIRECTED THE ASSESSEE TO PRODUCE THE SAME IT IS THE DUTY OF THE ASSESSEE TO PRODUCE THE SAME BEFORE THE ASSESSING OFFICER. THEREFORE, IN OUR OPINION, THE MATTER NEEDS TO BE EXAMINED AFTER CONSIDERING THE VOUCHERS AND BOOKS OF ACCOUNT SAID TO BE MAINTAINED BY THE ASSESSEE. ACCORDINGLY WE SET ASIDE THE ORDER OF TH E LOWER AUTHORITIES AND REMAND BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSEE IS DIRECTED TO PRODUCE ALL THE VOUCHERS AND BOOKS OF A CCOUNT BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE TH E ISSUE IN THE LIGHT OF THE VOUCHERS AND BOOKS OF ACCOUNT PRODUCED BY THE ASSES SEE AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER GIVIN G A REASONABLE OPPORTUNITY TO THE ASSESSEE. 11. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF RS.20,12,351 TOWARDS BOGUS SUNDRY CREDITORS. 12. THE LD.DR SUBMITTED THAT THE ASSESSEE CLAIMED S UNDRY CREDITS TO THE EXTENT OF RS.20,68,799. THE ASSESSEE HAS NOT PRODU CED THE COMPLETE AND EXHAUSTIVE LIST OF SUNDRY CREDITORS. THE ASSESSEE HAS ONLY FILED THE NAMES AND AMOUNT. THEREFORE, IT COULD NOT BE VERIFIED BY THE ASSESSING OFFICER. IN RESPECT OF ONE SHRI PRAHLADBHAI PATEL THE ASSESSING OFFICER DE PUTED THE WARD INSPECTOR TO VERIFY THE WHEREABOUTS OF THE PARTY. HOWEVER, THE WARD INSPECTOR REPORTED THAT SHRI PRAHLADBHAI PATEL WAS NOT AVAILABLE AT THE GIV EN ADDRESS. IN THE ABSENCE OF ANY DETAILS, THE ASSESSING OFFICER MADE ADDITION OF RS.20,12,351. HOWEVER, THE CIT(A) FOUND THAT THE ASSESSEE HAS FILED THE LIST O F CREDITORS WITH CONFIRMATION LETTERS AND THAT IT IS FOR THE ASSESSING OFFICER TO ISSUE SUMMONS, IF THE GENUINENESS WAS SUSPECTED. ACCORDING TO THE LD.DR THE CIT(A) IS NOT CORRECT IN SAYING THAT THE ASSESSEE HAS FILED THE LIST OF CRED ITORS AND THE CONFIRMATION LETTERS. WHAT WAS FILED BEFORE THE ASSESSING OFFIC ER IS ONLY THE NAMES AND ITA NO.1193/RJT/2009 CO 23/RJT/2010 7 AMOUNT AND NOT THE OTHER DETAILS. THEREFORE, THE A SSESSING OFFICER COULD NOT VERIFY THE SAME. THEREFORE, THE CIT(A) IS NOT JUST IFIED IN DELETING THE ADDITION. 13. ON THE CONTRARY, SHRI KALPESH DOSHI, THE LEARNE D REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS FURNISHED THE COPY OF THE ACCOUNT CONFIRMATION LETTER AND IDENTITY CARD TO PROVE THE IDENTITY OF THE CREDITOR. ACCORDING TO THE LDE.REPRESENTATIVE, THE DEPOSIT IS NOT RECEIVED FOR THE YEAR UNDER CONSIDERATION. THEREFORE, IT CANNOT BE ADDED. THE LD.REPRESENTATIVE PLACED HIS RELIANCE ON THE DECISION OF DELHI BENCH OF THIS TRI BUNAL IN THE CASE OF SHRUI VARDHMAN OVERSEAS LTD VS ACIT 24 SOT 393 (DEL) AND THE JUDGMENT OF THE GUJARAT HIGH COURT IN ITO VS PIC (GUJARAT) LTD 1219 TTJ 410 (AHD); DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN KASHUKA TRADING 26 SOT 388 (MUM) AND THE DECISION OF THIS BENCH OF THE TRIBUNAL IN HAREN DRA KARIA 1138/RJT/2009 AND THE JUDGMENT OF THE MADHYA PRADESH HIGH COURT IN TH E CASE OF NAVENDRAM AHUJA 290 ITR 453 (MP). 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND HAVE ALSO CONSIDERED THE MATERIAL AVAILABLE ON RECORD. THE A SSESSING OFFICER CATEGORICALLY STATES THAT THE ASSESSEE HAS FAILED TO FILE THE COM PLETE AND EXHAUSTIVE DETAILS OF SUNDRY CREDITORS. WHAT WAS FILED IS THE NAMES AND THE AMOUNT. IN RESPECT OF ONE OF THE NAMES, THE EXISTENCE OF THE INDIVIDUAL WAS N OT FOUND AT THE GIVEN ADDRESS. HOWEVER, THE CIT(A) FINDS THAT THE ASSESSEE HAS FIL ED THE CONFIRMATION LETTER AND ALL THE ADDRESSES OF THE SUNDRY CREDITORS. THE ASS ESSEE ALSO CLAIMS BEFORE THIS TRIBUNAL THAT THE IDENTITY AND ADDRESS LIST WERE FI LED BEFORE THE ASSESSING OFFICER. THEREFORE, THERE CANNOT BE ANY CONFUSION WHETHER TH E ASSESSEE HAS ACTUALLY FILED ALL THE DETAILS BEFORE THE ASSESSING OFFICER OR NOT . SINCE THE ASSESSEE CLAIMS THAT THE DETAILS OF SUNDRY CREDITORS, ADDRESS CONFIRMATI ON LETTERS ARE FILED BEFORE THE ASSESSING OFFICER, IN OUR OPINION, EXAMINATION OF T HE MATTER ONCE AGAIN CANNOT PREJUDICE THE INTEREST OF ANY OF THE PARTY. SINCE THE ASSESSING OFFICER HAS NOT EXAMINED THE CONFIRMATION LETTERS AND OTHER DETAILS FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER, IN OUR OPINION, THE MATTER N EEDS TO BE EXAMINED. ITA NO.1193/RJT/2009 CO 23/RJT/2010 8 ACCORDINGLY WE SET ASIDE THE ORDER OF THE LOWER AUT HORITY ON THIS ISSUE AND REMAND BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE ISSUE ON THE BASIS OF MATERIAL WHAT WAS FILED BY THE ASSESSEE AND DECIDE THE ISSUE IN ACCORDANCE WITH LA W AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 15. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE A ND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27-05-2011. SD/- SD/- (A.L. GEHLOT) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT, DT : 27 TH MAY, 2011 PK/- COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-II, RAJKOT 4. THE CIT-I, RAJKOT 5. THE DR, I.T.A.T., RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT