Appeal details
Counselvise Citation
[2018] 119 COUNSELVISE.COM (IT) 4359 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 10 month(s) 8 day(s)
Appellant
Respondent
Appeal Type
Cross Objection
Pronouncement Date
31-10-2018
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
C
Assessment Year
2011-2012
Appeal Filed On
22-12-2015
Judgement Text
1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH C: NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 3699/DEL/2015 A.Y.: 2011-12 ACIT, CC-17, VS. M/S PIRON EDUCATION PVT. LTD. ROOM NO. 356, C/O DR KUMAR & ASSOCIATES, 2-E, ARA CENTRE, SS-20, 2 ND FLOOR, JHANDEWALAN EXTN., ADITYA MEGA MALL CBD NEW DELHI GROUND EAST, DELHI 110 032 (PAN: AAECP5217F) (APPELLANT) (RESPONDENT) C.O. NO. 385/DEL/2015 (IN ITA NO. 3699/DEL/2015) A.Y. 2011-12 M/S PIRON EDUCATION PVT. LTD. VS. ACIT, CC-17, C/O DR KUMAR & ASSOCIATES, ROOM NO. 356, SS-20, 2 ND FLOOR, 2-E, ARA CENTRE, ADITYA MEGA MALL CBD JHANDEWALAN EXTN., GROUND EAST, NEW DELHI DELHI 110 032 (PAN: AAECP5217F (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. VED JAIN, ADV. & SH. ASHISH GOE L, CA DEPARTMENT BY : SMT. RANU MUKHARJEE, SR. DR. 2 O R D E R PER H.S. SIDHU, JM THIS IS AN APPEAL BY THE REVENUE AND CROSS OBJECTION B Y THE ASSESSEE AGAINST THE ORDER DATED 25.3.2015 OF THE LD. CIT(A)-25, NEW DELHI RELEVANT TO ASSESSMENT YEAR 2011-12. THE GROUNDS R AISED IN THE REVENUES APPEAL READ AS UNDER:- 1 THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRE D IN LAW AS WELL AS ON FACTS IN ALLOWING THE RELIEF OF 50% OF T HE TOTAL ADDITION OF RS. 79,41,900/- MADE BY AO ON ACCOUN T OF DISALLOWANCE OF BOGUS EXPENSES AND RECEIPTS FROM M/S ESAJV. 2 THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRE D IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS.66,32,788/- MADE BY AO ON ACCOUNT OF UNEXPLAINED CASH RECEIPTS FROM STUDENTS AND TRAINEES. 3 THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERR ED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 40,25,735/- MADE BY AO ON ACCOUNT OF BOGUS PURCHASE OF FIXED ASSETS._ 4 THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERR ED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 30,76,879/- MADE BY AO ON ACCOUNT OF ADVERTISEMENT AND BUSINESS PROMOTION EXPENSES. 5 THE LD COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED M LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 1,53 ,80,453/- MADE BY AO ON ACCOUNT OF UNACCOUNTED INCOME BEING LOAN REPAYMENT. 3 6 THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERR ED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS.5 ,62,725/- MADE BY AO ON ACCOUNT OF UNACCOUNTED INCOME BEING CREDIT APPEARING IN THE NAME OF M/S PIRON DESIGN (P) LTD. 7 THE LD COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED M LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS.1,13, 87,296/- MADE BY AO ON ACCOUNT OF UNEXPLAINED ADMINISTRATIVE EXPENSES. 8. (A) THE ORDER OF THE CIT (A) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING OF THE APPEAL. 2. THE GROUNDS RAISED IN THE ASSESSEES CROSS OBJECTION READ AS UNDER:- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN SUSTAINING THE PART ADDI TION TO THE TUNE OF 50% OF ADDITION OF RS. 79,41,000/- BEING AMO UNT OF SERVICES BILLED TO ESAJV PURELY ON MERE / SOLE BASIS OF CONJECTURES AND SURMISES AND HEARSAY AT PAGE 27 OF WHILE DISPOSING GROUND NO. 2 & 3. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF IMPARTING EDUCATION, CONDUCTING COACHING C LASSES OF DIFFERENT COURSES, INFRASTRUCTURE CONSULTANCY, ETC. ASSESEE FI LED ITS RETURN OF INCOME ON 5.8.2011 DECLARING AN INCOME OF RS. 21,84,630 /-. THE SAID RETURN WAS SELECTED FOR SCRUTINY AND ASSESSMENT UNDER SECTION 143(3 ) OF THE 4 INCOME TAX ACT, 1961 (IN SHORT ACT) WAS COMPLETED VI DE ORDER DATED 09.1.2014 AT AN INCOME OF RS. 5,11,92,406/- BY MAKING VARIOUS ADDITIONS AND DISALLOWANCES. AGAINST THE ASSESSMENT ORDER, THE ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 25.3.2015 DELETED ALL THE ADDITIONS AND DISALLOWANCES EXCEPT ONE WHERE HE GAVE A PARTIAL RELIEF. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AND ASSESSEE HAS FILED THE CR OSS OBJECTION. THE GROUNDS RAISED BY THE REVENUE IN ITS APPEAL ARE AS UNDE R: 4. GROUND NO. 1 IN THE REVENUES APPEAL AND GROUND N O. 1 IN THE CROSS OBJECTION OF THE ASSESSEE ARE COMMON AND THE SAME IS BEIN G TAKEN UP TOGETHER. AS PER THE ASSESSMENT ORDER THE ASSESSEE HAS RECEIVED A SUM O F RS. 79,41,900/- FROM M/S ESAJV D-ART INDO INDIA PVT. LTD . A SURVEY UNDER SECTION 133A WAS CARRIED OUT AT THE PREMISES OF THE ASSESSEE AND THE ASSESSEE WAS FOUND ENGAGED IN THE BUSINESS OF PROVIDING E-L EARNING ONLY AND AS SUCH A COMPANY DOES NOT HAVE ANY DOMAIN EXPERTISE OF PROVIDING THE SERVICES AND TRAINING WHICH IT CLAIMED TO HAVE PROVI DED TO THE ABOVE ENTITIES. IT HAS BEEN FURTHER STATED THAT THERE WAS NO EVIDENCE FOUND OF ANY MANAGEMENT OR OTHER CONSULTANCY WORK HAVING BEEN DONE BY THE ASSESSEE COMPANY. ON THE BASIS OF THIS SURVEY, THE AO HAS HELD TH AT THE ASSESSEE COMPANY HAS NOT PROVIDED ANY SERVICE AND HAS ADDED THE ENTIRE AMOUNT OF RS. 79,41,900/- AS INCOME OF THE ASSESSEE. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE HAS RESTRICTED THE ADDITION T O 50% OF THE AMOUNT OF THE SERVICES BILLED TO THE ABOVE ENTITY. IT WAS CONTENDED BY THE LD. AR THAT BOTH THE AO AS WELL AS LD. CIT(A) HAVE NO T APPRECIATED THE FACTS IN THE RIGHT PERSPECTIVE. IN THE PRESENT CASE, THE ASSESSEE HAS RECEIVED THE 5 ABOVE AMOUNT AND HAS INCLUDED THE SAME IN THE PROFIT AND LOSS ACCOUNT AND PAID TAXES THEREON. THE ASSESSEE HAVING ALREADY OFFERED THE AMOUNT TO TAXATION, THE ADDITION OF THE SAME AMOUNT AGAIN IS PE R-SE UNTENABLE. THE LD. AR FURTHER SUBMITTED THAT THERE WERE NO INCRIMINA TING MATERIAL WAS FOUND DURING THE SURVEY AND NO INDEPENDENT ENQUIRY HAS BEEN CARRIED OUT BY THE AO. THE AO HAS GOT CARRIED AWAY WITH THE SHUNG LU COMMITTEE REPORT, IGNORING THE FACT THAT THERE IS NO CONNECTION W ITH THE ASSESSEE. IN REPLY, THE LD. DR PLACED RELIANCE ON THE ORDER PASSED B Y THE AO. SHE CONTENDED THAT THE ADDITION HAS BEEN RIGHTLY MADE BY THE AO. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECO RDS ESPECIALLY THE IMPUGNED ORDER AND THE PAPER BOOK. ONGOING THRO UGH THE FACTS, IT IS EVIDENT THAT THE ASSESSEE HAS RECEIVED A SUM OF RS. 79,41, 600/- AS CONSULTANCY INCOME. THE SAID AMOUNT HAS BEEN INCLUDED IN T HE CONSULTANCY INCOME DECLARED BY THE ASSESSEE. THE ASSESSEE HAVING INCLUDED THE SAID AMOUNT IN ITS INCOME, WE WONDER HOW THE SAME AMOUNT CAN BE ADDED AGAIN WHILE COMPUTING TAXABLE INCOME. IRRESPECTIVE OF THE FACT WHETHER ASSESSEE HAS RENDERED ANY SERVICES OR NOT, THE AMOUNT RECEIVED BY THE ASSESSEE IS INCOME IN ITS HAND. THE ASSESSEE HAVING INCLUDED SUCH INCOME IN ITS PROFIT AND LOSS ACCOUNT, THE SAME AMOUNT CANNOT BE ADDED AND WE DIRECT THE AO TO DELETE THE ENTIRE AMOUNT. ACCORDINGLY, GROUND NO. 1 OF REVENUES APPEAL IS DISMISSED AND GROUND NO. 1 OF THE CROSS OBJECTION OF TH E ASSESSEE IS ALLOWED. 6. GROUND NO. 2 IN REVENUES APPEAL IS REGARDING DELE TION OF ADDITION OF RS. 66,32,788/- MADE BY AO ON ACCOUNT OF UNEXPLAINED C ASH RECEIVED FROM STUDENTS AND TRAINEES. AS PER THE ASSESSMENT ORDER, THE AO ASKED THE ASSESSEE TO EXPLAIN THE CASH DEPOSIT MADE IN THE VARIOUS B ANK ACCOUNTS HELD BY THE ASSESSEE. THE ASSESSEE SUBMITTED ITS REPLY THAT T HE SAME WERE MADE FROM THE FEES RECEIVED FROM STUDENTS AND TRAINEES. THE AO HOWEVER HELD THAT THE CONTENTION OF THE ASSESSEE THAT IT HAS PRO VIDED CLASSROOM 6 COURSES AND TRAINING CANNOT BE ACCEPTED AND ACCORDINGLY HE MADE THE ABOVE ADDITION IN THE HANDS OF THE ASSESSEE AS ITS UNDISCL OSED INCOME. THE LD. CIT(A) HAS DELETED THE ADDITION HOLDING THAT THE SAME IS FULLY ACCOUNTED FOR AND ROUTED THROUGH REGULAR BOOKS OF ACCOUNTS AND HE NCE THE ADDITION MADE BY AO IS EX-FACIE BAD. ON THE OTHER HAND, LD. DR PLACED RELIANCE ON THE ORDER OF THE AO AND SUBMITTED THAT LD. CIT(A) WA S NOT JUSTIFIED IN DELETING THE ABOVE ADDITIONS. IN REPLY, THE LD. AR SU BMITTED THAT ASSESSEE COMPANY IS ENGAGED IN IMPARTING EDUCATION, CONDUCTING COACHING CLASSES OF DIFFERENT COURSES. THE LD. AR INVITED ATTENTION TO PB. PG. 91 WHICH IS A SUMMARY OF THE INCOME RECEIVED DURING THE YEAR FROM VA RIOUS COURSES BEING RUN BY THE ASSESSEE COMPANY WHICH INCLUDE ACCA CLASSES, BSE AND PIRON IFRS CERTIFICATION COURSE, CIMA, CPA CLASSES, CPA DISTANCE LEARNING PROGRAM, IFRS CLASSES, IFRS E-LEARNING, ETC. THE ASSESSEE COMPANY HAS RECEIVED FEES FROM THE VARIOUS STUDENTS AND THE SAME HAS BEEN DULY ACCOUNTED FOR IN THE CASH BOOK REGULARLY MAINTAINED. TH E LD. AR ALSO INVITED ATTENTION TO PB. PG. 251-253 WHICH IS A SUMMARY OF TH E CASH RECEIVED AND CASH DEPOSITED IN THE BANK. IT WAS ALSO SUBMITTED THAT SUCH FEES HAVING BEING TAKEN INTO INCOME, THERE WAS NO JUSTIFICATION FO R MAKING ADDITION. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS ESPECIALLY EH IMPUGNED ORDER. AFTER PERUSING THE SAME, WE NOTE THA T THE CASH DEPOSITED IN THE BANK ACCOUNT IS DULY ACCOUNTED FOR. THE ASSESSEE IS M AINTAINING REGULAR BOOKS OF ACCOUNTS AND THE CASH DEPOSITED IN THE BANK ACCOUNT IS DULY REFLECTED IN THE CASH BOOK MAINTAINED BY THE ASSESSEE . IT IS NOT THE CASE OF THE AO THAT SUCH CASH DEPOSITED IN BANK ACCOUNT IS NO T ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. THUS, THE CASH DEPOSITED IN BANK ACCOUNT IS ACCOUNTED FOR CASH AND WE UPHOLD THE ORDE R OF THE CIT(A) IN DELETING THE ABOVE SAID ADDITION BY HOLDING THAT THE CASH DEPOSITED IN THE BANK IS FULLY ACCOUNTED FOR AND THE ADDITION MADE BY T HE AO IS EX-FACIE BAD. ACCORDINGLY, GROUND NO. 2 OF REVENUES APPEAL IS DISMI SSED. 7 8. GROUND NO. 3 OF REVENUES APPEAL IS REGARDING DEL ETION OF ADDITION OF RS. 40,25,735/- MADE BY THE AO ON ACCOUNT OF BOGUS PURCHAS E OF FIXED ASSETS. AS PER THE ASSESSMENT ORDER THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF ONLY PROVIDING E-LEARNING. IT HAS BEEN ALLE GED THAT DURING THE COURSE OF THE SURVEY NOT EVIDENCE OF ANY BUSINESS ACTIVITY OTHER THAN E- LEARNING WAS FOUND. EVEN THE SERVICES WHICH MR. ANKUR A GGARWAL AND MR. ASHISH AGGARWAL CLAIMED TO HAVE RENDERED TO OTHER CORP ORATE CLIENTS ARE ONLY E-TRAINING. ON THIS BASIS, THE LD. AO HELD THAT THERE IS NO NECESSITY OF THE ASSESSEE COMPANY FOR ACCUMULATING SUCH FIXED ASSETS FOR RUN NING ITS BUSINESS. ON THIS BASIS, THE LD. AO HELD THAT THE EXPEND ITURE INCURRED BY THE ASSESSEE FOR PURCHASE OF ASSETS AMOUNTS TO BOGUS EXPENDITU RE AND IS LIABLE TO BE ADDED TO THE TOTAL INCOME. THE LD. CIT( A) HAS DELETED THE ADDITION HOLDING THAT ADDITION CANNOT BE SUSTAINED SP ECIALLY WHERE MERE PERCEIVED NECESSITY IS NO GROUND TO MAKE THE ADDITION FO R GENUINE AND FULLY VERIFIABLE EXPENSES OF DEPRECIATION AND ADDITION TO FI XED ASSETS. THE LD. DR BEFORE US PLACED RELIANCE ON THE ORDER PASSED BY THE AO. THE LD. AR IN REPLY, PLACED RELIANCE ON THE ORDER OF THE LD. CIT(A) . IT WAS SUBMITTED BY THE LD. AR, THAT ASSESSEE HAS PURCHASED COMPUTERS AND FURNI TURE WHICH WAS NECESSARY FOR ITS BUSINESS. THE ASSESSEE HAS BEEN MAINTAINING REGULAR BOOKS OF ACCOUNT WHICH HAVE BEEN DULY AUDITED AND HAVE NOT BEEN REJECTED BY THE AO. FURTHER, THE AO HAS NOT POINTED OUT ANY DISCREPANCY IN THE DETAILS OF THE FIXED ASSETS ALONG WITH THE BILLS TO THE AO. THE ADDITION HAS BEEN MADE ON FLIMSY GROUNDS. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS, ESPECIALLY THE IMPUGNED ORDER. AFTER PERUSING THE ORDER OF TH E AO, IT IS APPARENT THAT THE AO HAS MADE THE ADDITION BY GOING IN TO TH E ISSUE OF NECESSITY OF THE ASSESSEE COMPANY FOR PURCHASING SUCH FIXED ASSETS FOR RUNN ING OF ITS BUSINESS. THE AO, IN FACT, IS CHALLENGING THE WISDOM OF THE ASSESSEE IN BUYING THE FIXED ASSETS. AS PER THE FACTS ON RECORD, IT I S EVIDENT THAT 8 ASSESSEE IS IMPARTING EDUCATION FOR VARIOUS COURSES BEING RUN BY IT. FOR IMPARTING EDUCATION AND RUNNING THESE COURSES THE ASSESSEE HAS TO HAVE THE FIXED ASSETS. THE ASSESSEE IN FACT HAS PURCHASED THESE FIXE D ASSETS. IT IS NOT THE CASE OF THE AO THAT ASSESSEE HAS NOT PURCHASED THESE FIXED ASSETS. THE AO IS LOOKING INTO THE COMMERCIAL EXPEDIENCY OF TH E ASSESSEE. WE ARE OF THE VIEW THAT AO CANNOT EXAMINE THE BUSINESS, WISDOM AND THE COMMERCIAL EXPEDIENCY OF THE ASSESSEE. THE ASSESSEE HAVING PUR CHASED THE FIXED ASSETS FOR THE PURPOSE OF ITS BUSINESS, NO ADVERSE VI EW CAN BE TAKEN. WE FURTHER NOTE THAT THE AO DESPITE ASSESSEE CLAIMING ON LY DEPRECIATION ON SUCH FIXED ASSETS, HAS ADDED BACK THE ENTIRE AMOUNT. THIS CLEARLY SHOWS THE ARBITRARINESS ON THE PART OF THE AO. THE LD. CIT(A) H AS CONSIDERED THE FACTS IN THE RIGHT PERSPECTIVE AND HAS RIGHTLY DELETED THE ADDITION. ACCORDINGLY, WE UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE AND THE GROUND NO. 3 OF THE REVENUES APPEAL IS DISMISSED. 10. GROUND NO. 4 IN REVENUES APPEAL IS REGARDING DEL ETION OF ADDITION OF RS. 30,76,879/- MADE BY AO ON ACCOUNT OF ADVERTISEMENT AND BUSINESS PROMOTIONAL EXPENSES. THE LD. DR PLACED RELIANCE ON T HE ORDER OF THE AO AND CONTENDED THAT THE LD. CIT(A) WAS NOT JUSTIFIED I N DELETING THE ADDITION. AS AGAINST THIS THE LD. AR PLACED RELIANCE ON THE ORDE R OF THE LD. CIT(A). IT WAS CONTENDED THAT COMPLETE DETAILS WERE SUBMITTED BEFO RE THE AO AS IS EVIDENT FROM THE PAPER BOOK AND THE AO HAS MADE THE ADDITION ARBITRARILY IGNORING THE FACTS AND THE PROVISION OF SECTION 37 OF THE ACT. 11. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS ESPECIALLY THE IMPUGNED ORDER. AFTER PERUSING THE ASSESSMENT ORDER, WE NOTE THAT THE AO HAS MADE THE ABOVE ADDITION BY HOLDING THAT THER E IS NO NECESSITY FOR THE ASSESSEE TO INCUR SUCH EXPENDITURE AS THE ASSESSEE COMPANY IS HAVING A TURNOVER OF RS. 2 CRORE AND IMPARTING TRAINING TO ONL Y E-LEARNING. THE AO FURTHER HELD THAT THE ASSESSEE HAS FAILED TO SUBMIT THE SU PPORTING EVIDENCES REGARDING THESE EXPENSES. HOWEVER, THE LD. CIT(A) HAS DE LETED THE ADDITION 9 HOLDING THAT ASSESSEE HAS SUBMITTED THE COMPLETE DETAILS AS IS EVIDENT FROM THE PB. PAGES WHICH WERE BEFORE THE AO. THE LD. CIT( A) FURTHER HELD THAT THE OBSERVATIONS OF THE AO THAT THERE IS NOT NECESSITY FOR INCURRING SUCH EXPENDITURE IS DE-HORS THE PRESCRIPTION OF SECTION 37 OF THE ACT. WE ARE OF THE VIEW THAT THE LD. CIT(A) WAS JUSTIFIED IN DELETI NG THE ADDITION MADE BY THE AO. THE ASSESSEE HAS SUBMITTED THE COMPLETE DETAILS AND THE OBSERVATIONS OF THE AO THAT ASSESSEE HAS NOT SUBMITTED THE SUPPORTING EVIDENCE IS FACTUALLY INCORRECT. THE ASSESSEE HAS ACTUALLY INCU RRED THESE EXPENDITURES AND THE SAME ARE DULY ACCOUNTED FOR IN TH E BOOKS OF ACCOUNTS. THE ASSESSEE IS IMPARTING EDUCATION AND TRAINING. THE EXP ENDITURE INCURRED IS FOR PUBLICIZING SUCH EDUCATION AND TRAINING COURSES BE ING RUN BY THE ASSESSEE. THUS, THE EXPENDITURE IS DIRECTLY RELATED TO THE BUSINESS OF THE ASSESSEE AND THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDI TION. WE UPHOLD THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND REVENUES G ROUND NO. 4 IS DISMISSED. 12. GROUND NO. 5 IN REVENUES APPEAL IS REGARDING DEL ETION OF ADDITION OF RS. 1,53,80,453/- MADE BY THE AO ON ACCOUNT OF LOAN RE PAID BY THE ASSESSEE DURING THE YEAR. THE LD. DR PLACED RELIANCE ON T HE ORDER OF THE AO IN SUPPORT OF ITS CONTENTION WHEREAS THE LD. AR PLACED RELIANCE ON THE ORDER PASSED BY THE CIT(A). IT WAS SUBMITTED BY THE LD. AR TH AT THE ASSESSEE HAS SUBMITTED THE COMPLETE DETAILS IN RESPECT OF EACH TRANSACTI ON ALONG WITH ALL EVIDENCES AS IS EVIDENT FROM THE PAPER BOOK BEFORE THE AO AND THIS ADDITION HAS BEEN MADE ARBITRARILY WITHOUT APPLICATION OF MIND AS IS EVIDENT FROM THE ASSESSMENT ORDER. THE LD. AR SUBMITTED THAT CIT(A) HAS RI GHTLY DELETED THE ADDITION. 13. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS, ESPECIALLY THE IMPUGNED ORDER. WE FIND THAT THE AO HAS HELD THA T THE UNACCOUNTED INCOME OF THE ASSESSEE IS CHANNELED THROUGH OTHER COMPANIES BACK INTO ASSESSEES COMPANY THROUGH VARIOUS MODES. THE AO FURTHER HE LD THAT M/S 10 PIRON DESIGN PVT. LTD. DOES NOT HAVE CREDIT WORTHINESS A ND SO IS THE CASE OF DIRECTORS OF THE COMPANY. THE CIT(A) HAS DELETED THE AD DITION BY HOLDING THAT ASSESSEE HAS FILED SUFFICIENT EVIDENCE. IT HAS HELD THA T ALL THE PARTIES HAVE SUFFICIENT CREDITWORTHINESS AS CAN BE SEEN FROM THE F INANCIAL AND OTHER DOCUMENTS AVAILABLE ON RECORD. 13.1 ONGOING THROUGH THE ASSESSMENT ORDER WE NOTE THAT THE AO HAS MADE ADDITION IN RESPECT OF THE AMOUNT PAID BACK BY THE ASSESSE E TO THE FOLLOWING PARTIES NOT THE AMOUNT RECEIVED FROM THESE PARTIES: S.NO. NAME OF THE PARTY FROM WHOM LOAN HAS BEEN ACCEPTED TOTAL AMOUNT RECEIVED DURING AY 2011-12 TOTAL AMOUNT PAID BACK DURING AY 2011-12 INTEREST PAID CLOSING BALANCE AS ON 31.3.2011 1 M/S DOLPHIN SPACE SYSTEMS RS. 23,58,400 RS. 23,58,400 NIL NIL 2 M/S PIRON CONSULTING PVT. LTD. RS. 8,94,100 RS. 89,41,000 NIL NIL 3 M/S INDO SOLUTIONS PVT. LTD. RS. 1,25,52,000 RS. 85,28,000 NIL RS. 40,90,000 4 M/S PIRON DESIGN PVT. LTD. RS. 42,14,000 RS. 5,89,000 NIL RS. 36,25,000 5 SH. ASHISH AGGARWAL RS. 7,64,453 RS. 7,64,453 NIL NIL 6 SH. ANKUR AGGARWAL RS. 36,63,500 RS. 22,46,500 NIL RS. 14,17,000 TOTAL RS. 2,44,46,453 RS. 1,53,80,453/- NIL RS. 54,51,000/- 13.2 IN RESPECT OF THE FIRST PARTY NAMELY M/S DOLPHIN S PACE SYSTEM, THE ASSESSEE HAS RECEIVED A SUM OF RS. 23,58,400/- AND PAID BACK THE SAME AMOUNT DURING THE YEAR. THE DOCUMENTS FILED BEFORE TH E AO IN RESPECT OF THIS CREDITOR IS PLACED IN PB. PG. 266-287 WHICH INCLUD E CONFIRMATION, COPY OF LEDGER ACCOUNT, COPY OF BANK STATEMENT AND COPY OF AU DITED FINANCIALS. THIS IS A PROPRIETORSHIP CONCERN OF ONE OF THE DIRECTOR MR. ASHISH AGGARWAL. AS PER THE PROFIT AND LOSS ACCOUNT IT HAS MADE A SALE OF R S. 4,98,28,165/-. 11 IT HAS FILED THE INCOME TAX RETURN DECLARING A TAXABLE INCOME OF RS. 10,19,401/- WHICH INCLUDE PROFIT FROM THIS CONCERN OF RS. 8,87,582/-. THIS CONCERN HAS GOT LOAN FROM BANKS AND OTHER FINANCIAL INST ITUTIONS WHICH INCLUDE NSIC LTD. THE PAYMENT HAS BEEN MADE FROM ITS REGULAR BANK ACCOUNT MAINTAINED WITH VIJAYA BANK. IT HAS A RUNNING ACCOUNT BEING A SISTER CONCERN WITH ASSESSEE AS IS EVIDENT FROM THE COPY OF ACCO UNT PLACED AT PB. PG. 267. 13.3 THE SECOND CASE IS THAT OF PIRON CONSULTING PVT. LT D. THIS IS A SISTER CONCERN OF THE ASSESSEE. THE ASSESSEE HAS RECEIVED A SUM OF RS. 8 ,94,100/- DURING THE YEAR AND PAID THE SAME BACK DURING THE YEA R. THE DOCUMENTS FILED BEFORE THE AO IN RESPECT OF THIS CREDITOR IS PLA CED IN THE PB. PG. 288- 306 WHICH INCLUDE CONFIRMATION COPY OF LEDGER ACCOUNT, BA NK STATEMENT AND AUDITED BALANCE SHEET AND ITR. THIS COMPANY IS BEING ASSESSE D WITH THE SAME AO AND IN FACT ASSESSMENT ORDER FOR THE SAME YEAR UN DER CONSIDERATION HAS BEEN PASSED BY THE AO ON 26 TH FEBRUARY, 2014 UNDER SECTION 143(3) AND NO ADVERSE INFERENCE HAS BEEN DRAWN IN RESPECT OF THIS AMOUNT RECEIVED AND PAID BACK DURING THE YEAR IN THA T ORDER. THE COPY OF ACCOUNT IS PLACED AT PB. PG. 289 WHICH IS A RUNNING ACCOU NT. THE AO HAS SIMPLY ADDED THE AGGREGATE AMOUNT OF THE CREDIT WITHO UT EVEN CONSIDERING THAT THIS IS A RUNNING ACCOUNT BETWEEN THE TWO CONCERNS. T HE PAYMENTS HAVE BEEN MADE AND RECEIVED FROM THE REGULAR BANK AC COUNT AND THERE IS NOTHING ABNORMAL IN THE BANK STATEMENT SO AS TO DRAW ANY ADVERSE INFERENCE ABOUT THE TRANSACTIONS ENTERED INTO WITH THIS COMPANY. 13.4 THE THIRD CASE IS THAT OF INDO SOLUTION PVT. LTD. IN THIS ACCOUNT THERE WAS AN OPENING DEBIT BALANCE OF RS. 36,15,000/- AND ASSE SSEE HAS RECEIVED RS. 1,25,52,000/- AND PAID BACK RS. 85,28,000/- DURING THE YEAR WITH THE RESULT THAT THERE WAS A CLOSING CREDIT BALANCE OF RS. 4,09 ,000/-. THE DOCUMENTS FILED IN RESPECT OF THIS ACCOUNT BEFORE THE AO ARE PLACED AT PB. PG. 315 TO 388 WHICH INCLUDE CONFIRMATION, LEDGER ACCO UNT, BANK STATEMENT, 12 ITR AND AUDITED BALANCE SHEET. THIS IS ALSO A SISTER CONCERN OF THE ASSESSEE. THIS ACCOUNT IS ALSO A RUNNING ACCOUNT. THE AO IN THIS CASE ALSO HAS SIMPLY ADDED THE ENTIRE AGGREGATE CREDIT WITHOUT EVEN CONSIDE RING THE FACT THAT THIS IS A CURRENT ACCOUNT BETWEEN THE TWO RELATED CONCER NS. ALL THE PAYMENT HAVE BEEN MADE AND RECEIVED THROUGH THE RUNNING BANK ACCOUNT. THIS COMPANY HAS FILED ITS ITR FOR THE YEAR UNDER CONSIDERATI ON OF RS. 41,60,505/-. IT HAS A GROSS INCOME FROM OPERATION OF 18 ,52,99,273/-. THERE IS NOTHING ABNORMAL IN THE TRANSACITONS ENTERED IN TO BY THE ASSESSEE WITH THIS COMPANY AND ALSO IN THE BANK ACCOUNT OF THIS COMPAN Y. 13.5 THE FOURTH CASE IS THAT OF PIRON DESIGN PVT. LTD . WHICH AGAIN IS A GROUP COMPANY. THE ASSESSEE HAS RECEIVED A SUM OF RS. 14,42 ,000/- AND HAS PAID BACK RS. 5,89,000/- WITH THE RESULT THAT THERE IS A CLOSING CREDIT BALANCE OF RS. 36,25,000/-. INTERESTINGLY THE AO HAS M ADE ADDITION OF RS. 5,89,000/- ONLY BEING THE AMOUNT PAID BACK BY THE ASSE SSEE DURING THE YEAR. THE DOCUMENTS FILED IN RESPECT OF THIS ACCOUNT BEFO RE THE AO ARE PLACED AT PB. PG. 389 410 WHICH INCLUDE CONFIRMATION , COPY OF LEDGER ACCOUNT, BANK STATEMENT, ITR AND AUDITED FINANCIALS. THI S IS ALSO A RUNNING ACCOUNT AS PER THE COPY OF ACCOUNT PLACED AT PB. PG. 390. THIS COMPANY HAS A GROSS INCOME FROM OPERATION OF RS. 2,14,64,220/- A ND ASSESSMENT OF THIS COMPANY HAS ALSO BEEN COMPLETED BY THE SAME AO VIDE ORDER DATED 28 TH JANUARY, 2014 AND NO ADVERSE INFERENCE HAS BEEN DRAWN IN RESPECT OF THE TRANSACTION ENTERED INTO BY THE ASSESSEE WITH THIS C OMPANY. ALL THE PAYMENTS ARE THROUGH REGULAR BANK ACCOUNT AND THERE IS NOTHING ABNORMAL IN THE BANK STATEMENT AND THE TRANSACTION ENTERED INT O BY THE ASSESSEE. 13.6 THE FIFTH CASE IS THAT OF MR. ASHISH AGGARWAL, DIR ECTOR OF ASSESSEE COMPANY. THE ASSESSEE COMPANY HAS RECEIVED A SUM OF RS. 7,64 ,453/0 AND PAID BACK RS. 7,64,453/-. THE DOCUMENTS FILED BEFORE TH E AO IN RESPECT OF THIS ACCOUNT ARE PLACED AT PB. PG. 256 TO 265 WHICH IN CLUDE CONFIRMATION, COPY OF LEDGER ACCOUNT, BANK STATEMENT AND ITR. THE A SSESSEE HAS ALSO 13 FILED AUDITED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT OF THE PROPRIETORSHIP FIRM OF MR. ASHISH AGGARWAL ALSO. AS PER THE ITR THE T AXABLE INCOME DECLARED IS 10,19,400/-. THIS IS ALSO A RUNNING ACCOUNT WITH A DIRECTOR MR. ASHISH AGGARWAL AS IS EVIDENT FROM THE COPY OF ACCOUNT P LACED AT PB. PG. 258. THE AO HAS SIMPLY ADDED THE AGGREGATE CREDIT WITH OUT CONSIDERING THE NATURE OF THE ACCOUNT BEING THAT OF A CURRENT ACCOUNT. THE PAYMENTS HAVE BEEN MADE AND RECEIVED THROUGH REGULAR BANK ACCOUNT OF MR. ASHISH AGGARWAL AND THERE IS NOTHING ABNORMAL IN THE BANK S TATEMENT OF MR. ASHISH AGGARWAL SO AS TO DRAW ANY ADVERSE INFERENCE. 13.7 THE SIXTH AND THE LAST CASE IS THAT OF MR. ANKUR A GGARWAL, DIRECTOR OF THE ASSESSEE COMPANY. ASSESSEE HAS RECEIVED A SUM OF RS. 36,63,5 00/- DURING THE YEAR AND HAS PAID BACK RS. 22,46,500/- WITH THE RESULT THAT THERE WAS A CREDIT BALANCE OF RS. 14,17,000/-. THE AO INTEREST INGLY HAS MADE ADDITION NOT OF THE AMOUNT RECEIVED BY THE ASSESSEE COMPA NY BUT OF THE AMOUNT PAID BACK I.E. RS. 22,46,500/-. THE DOCUMENTS IN SUPPORT OF THIS ACCOUNT ARE PLACED IN PB. PG. 307 TO 314 WHICH INCLUDE CONFIRMATION, LEDGER ACCOUNT, ITR AND BANK STATEMENT. MR. ANKUR AGGARWAL HA S ALSO FILED HIS RETURN DECLARING INCOME OF RS. 9,01,940/-. HE IS ALSO HAV ING A RUNNING ACCOUNT AS IS EVIDENT FROM THE COPY OF ACCOUNT PLACED AT PB . PG. 308. ALL THE PAYMENTS ARE THROUGH REGULAR BANK ACCOUNT AND THER E IS NOTHING ADVERSE ABOUT THE TRANSACTIONS ENTERED INTO BY THE ASSESSE E. 13.8 THE ABOVE ANALYSIS OF EACH OF THE CREDITORS SHOWS TH AT ASSESSEE HAS FILED SUFFICIENT EVIDENCES SO AS TO ESTABLISH IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS. AS DISCUSSED ABOVE, THERE I S NOTHING ABNORMAL SO AS TO DRAW ANY ADVERSE INFERENCE AGAINST THE ASSESSEE. IT MAY BE RELEVANT TO POINT OUT THAT HE AO HAS MADE ADDITI ON WITHOUT APPLICATION OF MIND. THIS FACT GETS ESTABLISHED THAT AO HAS MADE ADDITI ON OF THE AMOUNT PAID BACK AND NOT THAT OF THE AMOUNT RECEIVED BY THE ASSESSEE. IN FACT, THE ABOVE ANALYSIS CLEARLY DEMONSTRATE THAT THE ASSESSEE HAS DI SCHARGED ITS 14 ONUS FULLY IN RESPECT OF THE CREDIT. THE OBSERVATION MAD E BY THE AO IN THE ASSESSMENT ORDER ARE FACTUALLY INCORRECT. THE AO HAS NOT BR OUGHT ANY MATERIAL SO AS TO DRAW ANY ADVERSE INFERENCE. HE HAS IND ULGED INTO SURMISES. THE CIT(A) HAS RIGHTLY DELETED THE ADDITION A ND ACCORDINGLY WE UPHOLD THE ORDER OF THE CIT(A) DELETING THE ADDITIO N. IN THE RESULT THE GROUND NO 5 IS DISMISSED. 14. GROUND NO. 6 IS REGARDING DELETION OF ADDITION OF RS. 5,62,725/- MADE BY THE AO IN RESPECT OF THE CREDIT APPEARING IN THE NA ME OF PIRON DESIGN PVT. LTD. IT WAS SUBMITTED BY THE LD. DR THAT THE LD. CIT(A) HAS GONE WRONG IN DELETING THIS ADDITION IGNORING THE OBSERVAT ION OF THE AO IN THE ASSESSMENT ORDER. THE LD. AR IN REPLY SUPPORTED THE ORDE R OF THE LD. CIT(A). IT WAS SUBMITTED THAT THE ADDITION HAS BEEN M ADE BY THE AO WITHOUT APPRECIATING THE FACTS AND IN MOST ARBITRARY M ANNER. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS PURCHASED FURNITUR E AND FIXTURES AMOUNTING TO RS. 5,62,725/- FROM PIRON DESIGN PVT. LT D. AS PER THE LEDGER ACCOUNT AND COPY OF THE INVOICE AT PB. PG. 402 412. AO HAS WRONGLY ASSUMED THAT IT IS A CASH CREDIT. THE BALANCE STANDING RS. 5,62,725/- IS AGAINST THE GENUINE AND BONAFIDE SUPPLY OF THE FURNI TURE. PIRON DESIGN PVT. LTD. IS A GROUP COMPANY AND THE TRANSACTION HAS BEEN EN TERED INTO ORDINARY COURSE OF BUSINESS AND DULY ACCOUNTED FOR. IT WAS FURTHER SU BMITTED THAT PIRON DESIGN PVT. LTD. HAS BEEN ASSESSED BY THE SAME AO U NDER SECTION 143(3) AND NO ADVERSE INFERENCE ON THIS ACCOUNT HAS BEEN DRAWN THEREON. IT WAS FURTHER SUBMITTED THAT THE LD. CIT(A) HAS APPR ECIATED THE FACT CORRECTLY AND HAS RIGHTLY DELETED THE ADDITION. 15. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS ESPECIALLY THE IMPUGNED ORDER. AS RIGHTLY CONTENDED BY THE LD AR THE AO HAS GONE WRONG IN ASSUMING THESE TRANSACTIONS AS THAT OF CASH CREDIT. THE ASSESSEE DURING THE COURSE OF THE ASSESSMENT HAS SUBMITTED THE DETA ILS OF THE FURNITURE AND FIXTURE PURCHASED BY IT FROM THIS COMPAN Y PIRON DESIGN PVT. 15 LTD. AND THE BALANCE OF RS. 5,62,725/- APPEARING IN T HE NAME OF THIS COMPANY IS ON ACCOUNT OF THE PURCHASE OF FURNITURE AND FIXTURE. FURTHER, THE AO HAS GONE WRONG IN DRAWING INFERENCE ABOUT THE CREDI T WORTHINESS ON THE BASIS OF THE INCOME DECLARED BY THIS COMPANY. FIRSTLY, TH E TRANSACTION IS NOT THAT OF CASH CREDIT. EVEN ASSUMING THAT THIS IS A CASH CRED IT, ASSESSEE HAS FILED ALL NECESSARY EVIDENCES SO AS TO ESTABLISH THE IDENTIT Y AND GENUINENESS AND CREDITWORTHINESS. IT IS NOT ONLY THE INCOME OF THE Y EAR UNDER CONSIDERATION THAT CAN ONLY ESTABLISH THE CREDITWORTHINE SS OF THE CREDITOR. IT IS THE SOURCE FROM WHICH THE CREDIT HAS ARISEN WHICH IS IMPO RTANT FOR ESTABLISHING THE CREDITWORTHINESS AND THE GENUINENESS. IN THIS CASE, THE ASSESSEE HAS PURCHASED THE FURNITURE AND THE CREDIT HAS ARI SEN ON THAT ACCOUNT. CONSIDERING THIS FACT, WE HOLD THAT CIT(A) WAS RIGHT IN DELETING THE ADDITION. WE UPHOLD THE ORDER OF THE CIT(A) AND THI S GROUND NO. 6 OF THE REVENUE IS DISMISSED. 16. GROUND NO. 7 IN REVENUES APPEAL IS REGARDING DEL ETION OF ADDITION OF RS. 1,13,87,296/- MADE BY THE AO ON ACCOUNT OF UNEXPLA INED ADMINISTRATIVE EXPENSES. THE LD. DR SUPPORTED THE ORDER PASSED BY THE AO AND CONTENDED THAT LD. CIT(A) HAS GONE WRONG IN DELET ING THE ADDITION. IN REPLY, THE LD. AR SUBMITTED THAT THE ADDITION HAS BE EN MADE BY THE AO IN MOST ARBITRARY MANNER IGNORING THE FACTS OF THE CASE. HE SUBMITTED THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF IMPARTING EDUCATION A ND TRAINING AND ALL THESE EXPENSES HAVE BEEN INCURRED FOR THIS BUSINESS AS IS EVIDENT FROM THE DETAILS SUBMITTED BEFORE THE AO. THE ASSESSEE HAS MAI NTAINED REGULAR BOOKS OF ACCOUNTS WHICH HAVE BEEN AUDITED. THE AO HAS NO T REJECTED THE BOOKS OF ACCOUNTS. THE LD. AR THUS CONTENDED THAT LD. C IT(A)S ORDER NEED TO BE UPHELD. 17. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS, ESPECIALLY THE ORDER OF THE LD. CIT(A). WE FIND THAT THE AO H AS MADE THE ABOVE ADDITION BY HOLDING THAT AT THE TIME OF THE SURVEY N O EVIDENCE OF ANY 16 BUSINESS ACTIVITY OTHER THAN E-TRAINING WAS FOUND. ON T HIS BASIS HE HAS HELD THAT ASSESSEE HAS RAISED BOGUS INVOICES AGAINST THE EXPEND ITURE. ON THE ISSUE OF THE RENT AND ELECTRICITY EXPENSES THE AO HAS OBSE RVED THAT ASSESSEE HAS NOT SUBMITTED THE LEASE / RENT AGREEMENT. ON THE ISSUE OF TELEPHONE EXPENSES THE AO HAS OBSERVED THAT THE ASSESSEE HA S FAILED TO EXPLAIN TO THE NEED FOR MAINTAINING 30 TELEPHONE CON NECTIONS. THE LD. CIT(A) HAS DELETED THE ADDITION HOLDING THAT ALL THE SE EXPENSES ARE INCURRED FOR THE PURPOSE OF BUSINESS AND ALLOWABLE UNDER SECTION 37(1) OF THE ACT. ON GOING THROUGH THE FACTS AND EVIDENCES ON RECORD, WE N OTE THAT ASSESSEE IS IN THE BUSINESS OF IMPARTING EDUCATION AND TRAINING. AS PER THE DETAILS OF THE RECEIPTS PLACED AT PB. PG. 91,ASSESSEE HAS RECEIVED F EES FOR ACCA CLASSES, BSE AND PIRON IFRS CERTIFICATION COURSE, CIMA, CP A CLASSES, CPA DISTANT LEARNING PROGRAM, IFRS CLASSES, IFRS E-LEARNING AND TRAINING PROGRAM. THE EXPENSES INCURRED BY THE ASSESSEE AS TABULATED BY THE AO IN THE ASSESSMENT ORDER ARE PROFESSIONAL CHARGES OF FACULTY, SAL ARIES, GRATUITY, RECRUITMENT, STAFF WELFARE, REPAIR AND MAINTENANCE, B OOKS AND PERIODICALS, PRINTING STATIONARY, LEGAL AND PROFESSIONAL CHARGES, ET C. THE RECEIPTS BY THE ASSESSEE FROM THE ABOVE COURSES HAVE BEEN ACCEPTED BY THE AO . THE AO ON THE BASIS OF THE SURVEY IS REPEATEDLY MAKING AN ALLEGA TION THAT THE ASSESSEE IS PROVIDING E-LEARNING TRAINING THROUGH FEXIGURU SO FTWARE AND HENCE THERE IS NO NEED TO INCUR ANY EXPENDITURE. THIS UNDERSTANDING OF THE AO IS INCORRECT. THE ASSESSEE MAY BE PROVIDING E-LEARNING TRAIN ING BUT FOR THAT ALSO IT NEED FACULTY, IT NEED CONSULTATION, IT NEED CLA SSROOM, IT NEED TO PAY SALARY TO THE STAFF. IT IS NOT THAT E-LEARNING SOFTWARE WILL DO EVERYTHING. FURTHER, THE FACT THAT ASSESSEE IS ALSO IMPARTING EDUCATIO N THROUGH CLASSES AS IS EVIDENT FROM THE DETAILS OF THE RECEIPT. THE AO T HOUGH HAS MADE AN ALLEGATION THAT THE ASSESSEE HAS RAISED BOGUS INVOICES BUT T HERE IS NO MATERIAL TO SUPPORT SUCH ALLEGATION. THE ASSESSEE HAS SUBMIT TED COMPLETE DETAILS ALONG WITH EVIDENCES TO THE AO AND THE AO HAS N OT POINTED OUT ANY 17 SPECIFIC EXPENDITURE INCURRED BY THE ASSESSEE WHICH IS NOT A CTUALLY INCURRED SO AS TO DECLARE SUCH EXPENDITURE AS BOGUS. BOGUS WILL MEAN A CLAIM WHICH IN FACT HAS NOT BEEN ACTUALLY INCURRED. ONGOING THROU GH THE DETAILS OF THE EXPENSES WHICH HAVE BEEN DISALLOWED BY THE AO WE ARE OF THE VIEW THAT THESE ARE THE NORMAL ADMINISTRATIVE EXPENSES REQUIRED FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE. THE ASSESSEE HAS MAINTAINED REGU LAR BOOKS OF ACCOUNTS AND IN THE ABSENCE OF ANY SPECIFIC ADVERSE FINDIN G THE DISALLOWANCE OF THE SAME CANNOT BE SUSTAINED. THE AO HAS MADE OBSERVAT ION REGARDING THE RENT DEED / AGREEMENTS. THE OBSERVATION MADE ARE INCORRECT. THE ASSESSEE HAS SUBMITTED THREE RENT DEEDS / AGREEMENTS IN RESP ECT OF THE PROPERTY FOR WHICH RENT HAS BEEN PAID AS STATED BY TH E AO IN THE ASSESSMENT ORDER. AS REGARDS THE OBSERVATION MADE BY THE AO REGARDING THE CHANGE OF REGISTERED OFFICE AND NOT SUBMISSION OF RE NT AGREEMENT IN RESPECT THEREOF, THE AO HAS GONE WRONG IN DRAWING ADVE RSE INFERENCE AS NO RENT WAS PAID FOR THESE OFFICES WHICH WERE SHIFTED THREE TIMES DURING THE YEAR. IN THE ABSENCE OF ANY CLAIM ON ACCOUNT OF RENT OF THESE PREMISES, THERE WAS NO REASON TO DRAW ANY ADVERSE INFERENCE. SIMI LARLY ON THE ISSUE OF TELEPHONE EXPENSES, THE OBSERVATION MADE BY THE AO THAT THERE IS NO NEED FOR MAINTAINING 30 TELEPHONE CONNECTIONS IS UNTENA BLE. THE ASSESSEE HAVING INCURRED THE EXPENDITURE, THE AO CANNOT QUESTI ON THE WISDOM OF THE ASSESSEE. THE OBSERVATION OF THE AO REGARDING CLASSROOM ACTI VITY IS ALSO INCORRECT. THE AO HAS IGNORED THE FACT WHICH HAS BEEN RI GHTLY RECORDED BY THE CIT(A) THAT THIS CLASSROOM EXPENSES RELATE TO PAYMEN T MADE TO RELIANCE WEBSTORE THROUGH WHICH APPARENTLY E-LEARNING CLASSES WERE CONDUCTED. WE HAVE ALSO GONE THROUGH THE DETAILS OF THE VARIOUS EXPENSES PLACED IN THE PB. PG. 413-456. THESE DETAILS INCLUDE DETAILS OF SALARIES PAID TO EMPLOYEES WITH THE SERVICES RENDERED, DETAILS OF THE TRAVELLING EXPENSES INCURRED, DETAILS OF THE PROFESSIONAL CHARGES ETC. AFTER E XAMINATION OF THESE DETAILS, WE ARE OF THE VIEW THAT ALL THESE EXPENDITU RE ARE RELATED TO THE 18 BUSINESS ACTIVITY OF THE ASSESSEE AND IT CANNOT BE SAID THAT THESE EXPENDITURE HAVE NOT BEEN INCURRED. ACCORDINGLY, WE HO LD THAT THE CIT(A) WAS RIGHT IN DELETING THE ADDITIONS AND THEREFORE, WE UPHOLD THE ORDER OF THE CIT(A). THIS GROUND NO. 7 OF THE REVENUES APPEAL IS DISMISSED. 18. GROUND NO. 8 OF THE REVENUES APPEAL IS GENERAL IN NATURE AND HENCE NEED NO ADJUDICATION. 19. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED AN D CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 31-10-2018. SD/- SD/- [L.P. SAHU] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 31/10/2018 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. DR , ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES
