Shri Sandeep S. Nanavati, Surat V. The ACIT., Circle-5, Surat

CO 32/AHD/2011

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9515 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 1 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2014
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 07-05-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 14-02-2011
• Court: TRIBUNAL
• Department Lawyers: SAMIR TEBRIWAL
• Assessee Lawyers: PRAKRUTI UPADHYAY
• Keywords: Business expenditure; Corroborative evidences
• Section: 133(6)

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD , , , , 0 00 0 0 00 0 , , , , !' !' !' !' ! # ! # ! # ! # BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ITA NO. 233/AHD/2011 ASSESSMENT YEAR 2007-08 ACIR, CIRCLE-5, SURAT VS SH. SANDEEP S. NANVATI C-5, KRISHNA NAGAR SOCIETY, OPP. CHOKSIWADI, NEW RANDER ROAD, SURAT. PAN: AAOPN1000D $%/ APPELLANT '($% / RESPONDENT CO NO. 32/AHD/2011 ASSESSMENT YEAR 2007-08 SH. SANDEEP S. NANVATI C-5, KRISHNA NAGAR SOCIETY, OPP. CHOKSIWADI, NEW RANDER ROAD, SURAT. PAN: AAOPN1000D VS ACIR, CIRCLE-5, SURAT $%/ APPELLANT '($% / RESPONDENT REVENUE BY : SH. SAMIR TEBRIWAL, SR. DR ASSESSEE(S) BY : MS. PRAKRUTI UPADHYAY, AR ) * +'/ // / DATE OF HEARING : 07/05/2014 ,-. * +' / DATE OF PRONOUNCEMENT : 16 1616 16 /05/2014 !1 !1 !1 !1/ // / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AND THE CR OSS- OBJECTION FILED BY THE ASSESSEE. 2. GROUND NO. 1 OF THE APPEAL OF THE REVENUE AND G ROUND NO. 1 OF THE CROSS-OBJECTION OF THE ASSESSEE ARE DIRECTED AG AINST THE ORDER OF THE ITA NO. 233 & CO NO. 32/AHD/2011 SANDEEP S. NANAVATI VS ACIT, C-5, SURAT FOR A.Y. 2007-08 - 2 - CIT(A) IN RESTRICTING THE ADDITION MADE ON ACCOUNT OF VARIOUS EXPENSES TO RS 3,00,000/- IN PLACE OF RS 33,73,566/- MADE BY THE A SSESSING OFFICER. 4. IN THE CROSS-OBJECTION, THE GRIEVANCE OF THE AS SESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING RS 3,00,000/- FROM OUT O F THE DISALLOWANCE OF 25% OF LABOUR WAGE EXPENSES AND 20% OTHER DIRECT EX PENSES LISTED BY THE ASSESSING OFFICER. 5. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS ING OFFICER OBSERVED THAT THE ASSESSEE HAS DEBITED FOLLOWING EX PENSES IN HIS ACCOUNT MAINTAINED FOR SURAT: I) LABOUR SUPPLY EXPENSES RS 41,85,939/- II) LABOUR WAGES EXPENSES RS 68,75,038/- RS 1,10,60,977/- III) FABRICATION LABOUR EXP. RS 89,066/- IV) TRANSPORTATION EXPENSES RS 21,93,410/- V) TRACTOR RENT RS 6,62,127/- VI) MISCELLANEOUS EXPENSES RS 97,005/- RS 30,41,608/- 6. THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE STATING THAT NO SUPPORTING EVIDENCES HAVE BEEN PROD UCED IN RESPECT OF EXPENSES AND THAT SOME OF THE EXPENSES WERE INCURRE D IN CASH AND WHY 25% OF THE LABOUR WAGE EXPENSES OF RS 26,65,244/- A ND 20% OF OTHER EXPENSES OF RS 6,08,321/- SHOULD NOT BE DISALLOWED. THE ASSESSEE IN REPLY TO SHOW CAUSE NOTICE PRODUCED BILLS, VOUCHERS AND T HE NAME AND ADDRESSES OF THE LABOUR SUPPLIERS, FABRICATION EXPENSES, TRAN SPORTATION EXPENSES, TRACTOR RENT BEFORE THE ASSESSING OFFICER. THE ASS ESSEE ALSO FILED LEDGER COPY, PHOTOCOPIES OF BILLS ALONGWITH ORIGINAL BILLS FOR VERIFICATION BEFORE THE ASSESSING OFFICER. PARTY-WISE CONFIRMATION OF SUPP LY OF LABOUR ETC. WAS ALSO FILED. IN SUPPORT OF LABOUR WAGE EXPENSES, DAILY W AGES REGISTER FOR WORKERS, PHOTOCOPY OF LETTER REQUESTING ISSUE OF GATE PASS F OR LABOUR, LABOUR REGISTER, STATEMENT OF EPF WERE SUBMITTED. PHOTOCOPIES OF BI LLS FOR TRANSPORTATION EXPENSES, TRACTOR RENT AND PAYMENT CONFIRMATION ETC . WERE ALSO SUBMITTED. ITA NO. 233 & CO NO. 32/AHD/2011 SANDEEP S. NANAVATI VS ACIT, C-5, SURAT FOR A.Y. 2007-08 - 3 - COMPARATIVE STATEMENT OF EXPENSES WITH EARLIER YEAR S WAS ALSO PROVIDED. IT WAS SHOWN THAT FABRICATION EXPENSES REDUCED FROM 0. 45% IN ASSESSMENT YEAR 2006-07 TO 0.18% IN THE YEAR UNDER REFERENCE. MISCELLANEOUS EXPENSES, TRACTOR RENT WERE SHOWN TO BE COMPARABLE WITH PRECEDING YEARS. IT WAS ALSO SUBMITTED THAT THE ASSESSEE HAD NOT CHA NGED ITS METHOD OF ACCOUNTING AND THE BOOKS WERE SUBJECTED TO TAX AUDI T. 7. THE ASSESSING OFFICER WAS OF THE OPINION THAT T HE ASSESSEE HAD NOT BEEN ABLE TO FURNISH DOCUMENTARY EVIDENCES OF R ENDERING OF SERVICES, NATURE OF WORK DONE AND HAS NOT BEEN ABLE TO ESTABL ISH THE TOTAL VOLUME OF WORK DONE IN TERMS OF CUBIC METRES OF EARTH MOVED. ACCORDING TO HIM, THE ASSESSEE SHOULD HAVE PRODUCED CERTIFICATES FROM ENG INEERS OVERSEEING THE WORK REGARDING QUANTUM OF WORK DONE. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAD NOT BEEN ABLE TO ESTABLI SH WHICH PARTICULAR EXPENSES HAD BEEN INCURRED FOR WHAT PURPOSES. HE, THEREFORE, HELD THAT THE BOOKS OF ACCOUNT WERE INCORRECT AND INCOMPLETE AND THE CORRECT PROFIT HAD NOT BEEN OFFERED TO TAX. ACCORDINGLY, HE REJECTED THE BOOKS OF ACCOUNT AND DISALLOWED 25% LABOUR EXPENSES, 20% OTHER EXPENSES AND MADE ADDITION OF RS 33,73,566/-. 8. ON APPEAL, THE CIT(A) RESTRICTED THE DISALLOWAN CE TO RS 3,00,000/- BY OBSERVING AS UNDER: I HAVE GONE THROUGH THE FACTS OF THE CASE, THE REA SONS GIVEN BY THE A.O. FOR REJECTING THE BOOK OF ACCOUNTS AND SUB MISSIONS OF THE APPELLANT DURING THE COURSE OF APPEAL PROCEEDIN GS. THE APPELLANT HAD PROVIDED ALL THE DETAILS AND EVIDENCE S BEFORE THE A.O. REGARDING INCURRING OF EXPENSES. THE A.O. REJE CTED THE BOOKS OF ACCOUNTS FOR THE REASONS THAT EVIDENCES RE GARDING RENDERING OF SERVICES AND CO-RELATION OF THE EXPENS E WITH VOLUME OF WORK DONE HAD NOT BEEN ESTABLISHED BY THE APPELL ANT. IT IS SEEN FROM THE ASSESSMENT ORDER THAT THE APPELLANT H AD NOT BEEN ASKED TO CARRY OUT SUCH AN EXERCISE AND THEREFORE D RAWING ADVERSE CONCLUSION WAS NOT CORRECT. IN ANY CASE, TH IS ASPECT CAN BE INFERRED FROM THE DETAILS OF BILLS RAISED BY THE APPELLANT ON HIS ITA NO. 233 & CO NO. 32/AHD/2011 SANDEEP S. NANAVATI VS ACIT, C-5, SURAT FOR A.Y. 2007-08 - 4 - PRINCIPALS AND THE BILL ACTUALLY RAISED BY THE SUPP LIERS. THESE DETAILS ARE NOT REQUIRED TO BE MAINTAINED IN ANY BO OKS OF ACCOUNTS. THEREFORE IN MY OPINION, REJECTION OF BOO KS OF ACCOUNTS WAS NOT CORRECT HAVING SAID THAT, IT IS AL SO OBSERVED THAT EXPENSES HAD BEEN INCURRED IN CASH AND THAT IN THE STATEMENT OF FACTS, THE APPELLANT DOES MENTION THAT ALL BILLS AND VOUCHERS WERE NOT POSSIBLE TO BE PRODUCED SINCE THI S HAD TO BEEN DESTROYED AFTER THE FLOODS. FROM THE DETAILS S UBMITTED DURING THE COURSE OF APPEAL PROCEEDINGS, IT IS SEEN THAT MANY OF THE VOUCHERS ARE SELF MADE. THEREFORE, IN MY OPINIO N, THERE IS A LIKELIHOOD THAT SOME PORTION OF EXPENDITURE COULD N OT BE JUSTIFIED AND THEREFORE IT WOULD BE REASONABLE IF A DISALLOWA NCE OF RS. 3,00,000/- IS MADE OUT OF CLAIM OF LABOUR CHARGES A ND OTHER EXPENSES. THE A.O. IS DIRECTED TO RESTRICT THE DISA LLOWANCE TO RS.3,00,000/- ONLY. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER DISALLOWED 25% OUT OF TOTAL LABOU R EXPENSES OF RS 1,10,60,977/- AMOUNTING TO RS 27,65,244/- AND 20% OUT OF THE TOTAL OTHER EXPENSES OF RS 30,41,608/- WHICH WORKED OUT TO RS 6 ,08,321/-. IN THIS WAY, HE MADE TOTAL DISALLOWANCE OF RS 33,73,566/- O N THE GROUND THAT ASSESSEE COULD NOT FURNISH ANY DOCUMENTARY EVIDENCE FOR RENDERING OF SERVICES, NATURE OF WORK DONE AND COULD NOT ESTABLI SH THE TOTAL VOLUME OF WORK DONE IN TERMS OF CUBIC METRES OF EARTH REMOVED AND THAT THE ASSESSEE HAD NOT PRODUCED CERTIFICATE FROM ENGINEERS OVERSEE ING THE WORK REGARDING THE QUANTUM OF WORK DONE AND THAT THE ASSESSEE IN H IS OPINION, COULD NOT ESTABLISH WHICH PARTICULAR EXPENSES WERE INCURRED F OR WHAT PURPOSES. ON APPEAL, THE CIT(A) RESTRICTED THE DISALLOWANCE TO R S 3,00,000/- ON THE GROUND THAT THE ASSESSING OFFICER REJECTED THE BOOK S OF ACCOUNT ON THE GROUND THAT EVIDENCES REGARDING RENDERING OF SERVIC ES AND CO-RELATION OF EXPENSES WITH VOLUME OF WORK DONE HAS NOT BEEN ESTA BLISHED BY THE ASSESSEE WITHOUT ASKING THE ASSESSEE TO CARRY OUT S UCH EXERCISE AND THEREFORE DRAWING ADVERSE CONCLUSION WAS NOT CORREC T. HE OBSERVED THAT IN THE INSTANT CASE, THIS ASPECT CANNOT BE INFERRED FR OM THE DETAILS OF BILLS ITA NO. 233 & CO NO. 32/AHD/2011 SANDEEP S. NANAVATI VS ACIT, C-5, SURAT FOR A.Y. 2007-08 - 5 - RAISED BY THE ASSESSEE ON HIS PRINCIPALS AND THE BI LL ACTUALLY RAISED BY THE SUPPLIERS AND THESE DETAILS ARE NOT REQUIRED TO BE MAINTAINED IN ANY BOOKS OF ACCOUNT, AND THEREFORE, IN HIS VIEW, REJECTION OF B OOKS OF ACCOUNT WAS NOT CORRECT. HE FURTHER OBSERVED THAT IT IS ALSO OBSER VED THAT EXPENSES HAVE BEEN INCURRED IN CASH AND THAT IN THE STATEMENT OF FACTS, THE ASSESSEE DOES MENTION THAT ALL BILLS AND VOUCHERS WERE NOT POSSIB LE TO BE PRODUCED SINCE THESE HAD BEEN DESTROYED AFTER THE FLOODS. HE OBSE RVED THAT FROM DETAILS SUBMITTED DURING THE COURSE OF APPEAL PROCEEDINGS, IT IS SEEN THAT MANY OF THE VOUCHERS ARE SELF-MADE. THEREFORE, HE OPINED T HAT THERE WAS LIKELIHOOD THAT SOME PORTION OF THE EXPENDITURE COULD NOT BE J USTIFIED AND THEREFORE, IT WOULD BE REASONABLE IF DISALLOWANCE OF RS 3,00,000/ - WAS MADE OUT OF THE CLAIM OF LABOUR CHARGES AND OTHER EXPENSES. 10. THE AR OF THE ASSESSEE SUBMITTED THAT SIMILAR DISALLOWANCE OF EXPENSES WAS DELETED BY THE TRIBUNAL IN THE SUBSEQU ENT ASSESSMENT YEAR 2008-09. THEREFORE, SHE CONTENDED THAT THE ISSUE I NVOLVED IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE DECISION OF THE T RIBUNAL IN THE CASE OF THE ASSESSEE ITSELF PASSED IN ASSESSMENT YEAR 2008-09 I N ITA NO. 2897/AHD/2011 AND CO NO. 270/AHD/2011 ORDER DATED 3 1.08.2011 AND IN VIEW THEREOF THE ENTIRE ADDITION INCLUDING RS 3,00, 000/- CONFIRMED BY THE CIT(A) IS LIABLE TO BE DELETED. THE DR ALSO CONCED ED BEFORE US THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY TH E ORDER OF THE TRIBUNAL PASSED IN THE CASE OF THE ASSESSEE FOR ASSESSMENT Y EAR 2008-09. IN VIEW OF THE ABOVE SUBMISSION OF BOTH THE PARTIES, WE DELETE ADDITION OF RS 3,00,000/- SUSTAINED BY THE CIT(A). THEREFORE, THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED AND GROUND OF CROSS-OBJECTION OF THE ASSESSEE IS ALLOWED. 11. GROUND NO. 2 OF THE APPEAL OF THE REVENUE IS D IRECTED AGAINST THE ORDER OF THE CIT(A) DELETING THE ADDITION OF RS 1,52,252/- MADE ON ACCOUNT OF UNACCOUNTED PURCHASES. ITA NO. 233 & CO NO. 32/AHD/2011 SANDEEP S. NANAVATI VS ACIT, C-5, SURAT FOR A.Y. 2007-08 - 6 - 12. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SING OFFICER OBSERVED THAT THE ASSESSEE HAS MADE PURCHASES FROM THE FOLLOWING PARTIES: SR. NO. NAME OF THE PARTY NATURE OF TRANSACTION AMOUNT INVOLVED 1 M/S SHAH ASSOCIATES PURCHASE OF CEMENT RS 1,68,00 0 2 M/S MANISH BROS. PURCHASES OF BUILDING MATERIALS RS 2,87,388/- 3 M/S BHAGWATI CORPN. PURCHASES OF STEEL RS 45,497 4 -DO- M.S. WIRE RS 1,08,123 TOTAL RS 6,09,008 THE ASSESSING OFFICER ISSUED NOTICE U/S 133(6) TO T HE ABOVE PARTIES. NO CONFIRMATIONS/REPLIES WERE RECEIVED. THE ASSESSEE WAS GIVEN OPPORTUNITY TO EXPLAIN THE SAME. THE ASSESSEE DID NOT COMPLY. TH EREFORE, THE ASSESSING OFFICER OPINED THAT THE CLAIM OF PURCHASES OF RS 6, 09,008/- WAS NOT GENUINE, AND THE ASSESSING OFFICER DISALLOWED 25% OF THE PUR CHASES OF RS 6,09,008/- AND THEREBY MADE ADDITION OF RS 1,52,252/- TO THE I NCOME OF THE ASSESSEE. 13. ON APPEAL, THE CIT(A) DELETED THE DISALLOWANCE BY OBSERVING AS UNDER: I HAVE GONE THROUGH THE FACTS OF THE CASE. IT IS SEEN THAT NOTICES ISSUED BY THE A.O. HAD BEEN SERVED ON THE C ONCERNED PARTIES. THIS ESTABLISHES THE IDENTITY OF THE PART IES. THE APPELLANT HAD PRODUCED THE LEDGER ACCOUNTS, BILLS A ND PAYMENT DETAILS BEFORE THE A.O. WHICH ESTABLISH THE GENUINE NESS OF THE TRANSACTIONS. IN MY OPINION, THE APPELLANT CANNOT BE HELD RESPONSIBLE FOR NON-RECEIPT OF REPLIES ESPECIALLY W HEN HE HAS PROVIDED ALL RELATED EVIDENCES. IN ANY CASE CONFI RMATION WAS RECEIVED, THOUGH BELATED, AND A COPY HAS BEEN SUBMI TTED WHICH TAKES CARE OF THE REASON FOR DISALLOWANCE. THE ADD ITION MADE IS THEREFORE DELETED. THIS GROUND OF THE APPELLANT IS ALLOWED. 14. THE DR SUPPORTED THE ORDER OF THE ASSESSING OF FICER WHEREAS THE AR OF THE ASSESSEE RELIED ON THE ORDER OF THE CIT(A ). ITA NO. 233 & CO NO. 32/AHD/2011 SANDEEP S. NANAVATI VS ACIT, C-5, SURAT FOR A.Y. 2007-08 - 7 - 15. AFTER CONSIDERING THE RIVAL SUBMISSIONS, PERUS ING THE ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE ASSESSING OFFICER DISALLOWED 25% OUT OF THE TOTAL P URCHASES OF RS 6,09,008/- ON THE GROUND THAT THE SUMMONS SENT TO THE 4 PARTIE S FROM WHOM THE SAID PURCHASES WERE MADE WERE SERVED ON THE PARTIES BUT NO CONFIRMATIONS/REPLIES WERE RECEIVED FROM THEM. THE REFORE, IN THE OPINION OF THE ASSESSING OFFICER, PURCHASES WERE NOT GENUINE. ON APPEAL, THE CIT(A) HELD THAT NOTICES ISSUED BY THE ASSESSING OFFICER W ERE SERVED ON THE CONCERNED PARTIES WHICH ESTABLISHES IDENTITY OF THE PARTIES. THE ASSESSEE PRODUCED LEDGER ACCOUNTS, BILLS AND PAYMENT DETAILS BEFORE THE ASSESSING OFFICER WHICH ESTABLISH THE GENUINENESS OF THE TRAN SACTION. HE OBSERVED THAT THE ASSESSEE COULD NOT BE HELD RESPONSIBLE FOR NON- RECEIPT OF REPLIES FROM THE PARTIES WHEN THE ASSESSEE PROVIDED ALL THE RELA TED EVIDENCES. HE ALSO OBSERVED THAT IN ANY CASE, THE CONFIRMATIONS WERE R ECEIVED THOUGH BELATED AND COPY WAS SUBMITTED WHICH TAKES CARE OF THE REAS ON FOR DISALLOWANCE. HE, THEREFORE, DELETED THE ADDITION. WE FIND THAT THE DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER ON A WRONG FOOTING. THE D R COULD NOT PRODUCE ANY MATERIAL BEFORE US TO SHOW FURTHER STEPS TAKEN BY T HE ASSESSING OFFICER TO VERIFY THE GENUINENESS OF PURCHASES EVEN WHEN NO RE PLY WAS RECEIVED FROM THE SUPPLIERS THOUGH NO SUMMONS OR NOTICES WERE DUL Y SERVED UPON THEM. IN OUR CONSIDERED VIEW, FROM THE ABOVE FACTS IT CAN NOT BE INFERRED THAT THE PURCHASES WERE BOGUS. WE, THEREFORE, CONFIRM THE O RDER OF THE CIT(A) AND DISMISS THE GROUND OF APPEAL OF THE REVENUE. 16. GROUND NO. 3 AND 4 OF THE REVENUES APPEAL ARE DIRECTED AGAINST THE ORDER OF THE CIT(A) RESTRICTING THE DISALLOWANC E TO RS 8,367/- ON ACCOUNT OF BUSINESS EXPENSES IN PLACE OF RS 16,735/- MADE B Y THE ASSESSING OFFICER AND RESTRICTING THE DISALLOWANCE TO RS 18,426/- ON ACCOUNT OF TELEPHONE AND VEHICLE EXPENSES INSTEAD OF RS 36,851/- MADE BY THE ASSESSING OFFICER. ITA NO. 233 & CO NO. 32/AHD/2011 SANDEEP S. NANAVATI VS ACIT, C-5, SURAT FOR A.Y. 2007-08 - 8 - 17. GROUND NO. 2 OF THE CROSS-OBJECTION OF THE ASS ESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) CONFIRMING 10% DISA LLOWANCE OUT OF THE BUSINESS EXPENSES AND TELEPHONE AND VEHICLE EXPENSE S. 18. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED T HE ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSING OFFICER DISALLOWED 20% OUT OF OFFICE EXPE NSES RS 8,729/, PETROL EXPENSES RS 13,450/- AND TRAVELLING EXPENSES RS 61, 496/- TOTALLING TO RS 83,675/- AND THEREBY MADE DISALLOWANCE OF RS 16,735 /- AND MADE A DISALLOWANCE OF 20% OUT OF POS & TELEPHONE EXP. RS 1,66,848/-, VEHICLE EXPENSES RS 17,409/- TOTALLING TO RS 1,84,257/- AND THEREBY MADE DISALLOWANCE OF RS 36,851/-, IN THIS WAY HE MADE A TOTAL DISALLOWANCE OF RS 53586/-. ON APPEAL, THE CIT(A) SUSTAINED DISALLOWA NCE 10% OF THE ABOVE EXPENDITURE AND ALLOWED RELIEF AT THE RATE OF 10% O F THE EXPENDITURE. 19. BOTH THE PARTIES ARE IN APPEAL BEFORE US AGAIN ST THE AFORESAID ORDER OF THE CIT(A). 20. WE FIND THAT THE DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER BECAUSE OF INABILITY OF THE ASSESSEE TO PRODUCE VOU CHERS IN RESPECT OF ABOVE EXPENSES. THE ASSESSEE HAS NOT DISPUTED THE ABOVE FACT. FURTHER, NO MATERIAL WAS BROUGHT ON RECORD BY THE REVENUE TO SH OW THE BASIS ON WHICH THE ASSESSING OFFICER MADE THE DISALLOWANCE AT THE RATE OF 20%. 21. FURTHER, WE FIND THAT THE ASSESSEE COULD NOT B RING ANY MATERIAL TO SHOW THAT THE EXPENSES CLAIMED UNDER THESE HEADS WERE REASONABLE WHEN COMPARED TO THE PAST ACCEPTED POSITION AND VOLUME O F THE BUSINESS SECURED DURING THE YEAR. IN SUCH CIRCUMSTANCES, WE DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). WE, THEREF ORE, CONFIRM THE ORDER OF ITA NO. 233 & CO NO. 32/AHD/2011 SANDEEP S. NANAVATI VS ACIT, C-5, SURAT FOR A.Y. 2007-08 - 9 - THE CIT(A) AND DISMISS THE GROUND OF APPEAL OF THE REVENUE AS WELL AS GROUND OF CROSS-OBJECTION OF THE ASSESSEE. 22. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED AND THE CROSS-OBJECTION OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 16 TH OF MAY, 2014 AT AHMEDABAD. SD/- SD/- (MUKUL KR. SHRAWAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 16/05/2014 GHANSHYAM MAURYA, SR. P.S.