Smt. Namita Patwa, Dewas V. The DCIT 1(1), Ujjain

CO 77/IND/2013

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 2970 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 10 month(s) 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 25-05-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 09-05-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 22-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Assessee Lawyers: S S DESH
• Keywords: Unexplained cash credit
• Section: 133(6); 68; 37

Judgement Text

DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 1 , , IN THE INCOME TAX APPELLATE TRIB UNAL, INDORE BENCH, INDORE BEFORE SHRI C.M. GARG, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER .../ I.T.A. NO. 297/IND/2013 / ASSESSMENT YEAR: 2008-09 DY. COMMISSIONER OF INCOME TAX 1(1) UJJAIN :: / APPELLANT VS SMT. NAMITA PATWA DEWAS PAN AJAPP1214C :: ! / RESPONDENT CO NO. 77/IND/2013 ARISING OUT OF ITA NO. 297/IND/2013 SMT. NAMITA PATWA DEWAS :: OBJECTOR VS ADDL. COMMISSIONER OF INCOME TAX RANGE 1, UJJAIN :: RESPONDENT .../ I.T.A. NO. 410/IND/2013 / ASSESSMENT YEAR: 2009-10 DY. COMMISSIONER OF INCOME TAX 1(1) UJJAIN :: / APPELLANT VS SMT. NAMITA PATWA DEWAS PAN AJAPP1214C :: ! / RESPONDENT DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 2 CO NO. 79/IND/2013 ARISING OUT OF ITA NO. 410/IND/2013 SMT. NAMITA PATWA DEWAS :: OBJECTOR VS ADDL. COMMISSIONER OF INCOME TAX RANGE 1 UJJAIN :: RESPONDENT '# $ % & / REVENUE BY SHRI MOHD. JAVED '( $ % & / ASSESSEE BY SHRI S.S. DESHPANDE ) * $ (+ DATE OF HEARING 9.5. 2017 ,-./ $ (+ DATE OF PRONOUNCEMENT 2 5 .2.2017 / O R D E R PER SHRI C.M. GARG, JM THE REVENUE HAS FILED THESE APPEALS WHEREAS THE ASS ESSEE HAS FILED CROSS OBJECTIONS CHALLENGING THE ORDERS OF TH E FIRST APPELLATE AUTHORITY, UJJAIN, DATED 25.2.2013 AND 28.3.2013 FO R THE ASSESSMENT YEARS 2008-09 AND 2009-10, RESPECTIVELY. SINCE COMMON GROUNDS ARE INVOLVED, THESE APPEALS AND CROS S OBJECTIONS ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FO R THE SAKE OF CONVENIENCE. DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 3 2. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE REVENUE IN THE APPEAL FOR THE ASSESSMENT YEAR 2008-09 :- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITI ON OF RS.27,86,037/- OUT OF THE ADDITION OF RS. 34,82,537 /- MADE BY THE A.O. ON ACCOUNT OF BOGUS COMMISSION PAYMENT EVEN WHEN ASSESSEE FAILED TO ESTABLISH THE GENUINENESS OF SUCH CLAIM. IT IS TO BE NOTED THAT A S PER THE SETTLED JUDICIAL PRINCIPLES PAYMENT HAS TO BE PROVE D BY THE ASSESSEE WHILE CLAIMING AN EXPENDITURE. 2. THE LD. CIT(A) SUSTAINED THE ADDITION OF RS.11,5 2,168/- INSTEAD OF THE TOTAL ADDITION OF RS. 36,44,271/- MA DE BY THE A.O. ON ACCOUNT OF DISALLOWANCE OF TRAVELLING E XPENSES. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LD. CIT(A) WAS JUSTIFIED IN GIVING PARTIAL RELI EF TO THE ASSESSEE EVEN WHEN ASSESSEE FAILED TO DISCHARGE HER RESPONSIBILITY TO PROVE THE GENUINENESS OF TRAVELLI NG EXPENSES. IT IS TO BE NOTED THAT AS PER THE SETTLED JUDICIAL PRINCIPLES PAYMENT HAS TO BE PROVED BY THE ASSESSEE WHILE CLAIMING EXPENDITURE. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITI ON OF RS. 5,45,822/- UNDER SECTION 68 WITHOUT EXAMINING THE CREDITWORTHINESS AND GENUINENESS OF THE SAID TRANSA CTION. 3. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSE E IN THE CROSS OBJECTION FOR THE ASSESSMENT YEAR 2008-09 :- 1. THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDI TION OF RS.6,96,500/- IN RESPECT OF COMMISSION PAID TO VARI OUS PARTIES. 2. THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDI TION OF RS.11,52,168/- OUT OF TRAVELLING EXPENSES. IT WAS P ROVED DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 4 BEFORE THE LD. CIT THAT THE SAID EXPENSES INCURRED WERE GENUINE AND FOR THE PURPOSES OF THE BUSINESS. THE A DDITION MAY PLEASE BE DELETED. 3. THE ORDER OF THE LD. CIT(A) BE MAINTAINED ON GRO UNDS ALLOWED BY HIM. 4. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE REVENUE IN THE APPEAL FOR THE ASSESSMENT YEAR 2009-10 :- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITI ON OF RS.34,55,809/- OUT OF THE ADDITION OF RS. 43,19,761 /- MADE BY THE A.O. ON ACCOUNT OF BOGUS COMMISSION PAYMENT EVEN WHEN ASSESSEE FAILED TO ESTABLISH THE GENUINENESS OF SUCH CLAIM. IT IS TO BE NOTED THAT A S PER THE SETTLED JUDICIAL PRINCIPLES PAYMENT HAS TO BE PROVE D BY THE ASSESSEE WHILE CLAIMING AN EXPENDITURE. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS JUSTIFIED IN GIVING PARTIAL RELI EF TO THE ASSESSEE OF RS.33,66,941/- OUT OF TOTAL ADDITION OF RS.48,27,028/- MADE BY THE A.O. EVEN WHEN ASSESSEE FAILED TO DISCHARGE HER RESPONSIBILITY TO PROVE THE GENUINENESS OF TRAVELLING EXPENSES. IT IS TO BE NOT ED THAT AS PER THE SETTLED JUDICIAL PRINCIPLES PAYMENT HAS TO BE PROVED BY THE ASSESSEE WHILE CLAIMING AN EXPENDITUR E. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITI ON OF RS.75,000/- ON ACCOUNT OF INTEREST ON UNSECURED LOA N U/S 68 WITHOUT EXAMINING THE CREDITWORTHINESS AND GENUINENESS OF THE SAID TRANSACTION. IT IS TO BE NO TED THAT ON THE SAME ISSUE DEPARTMENT IS IN APPEAL IN THE CA SE OF THE SAME ASSESSEE FOR A.Y. 2008-09 BEFORE HON'BLE I TAT, INDORE. DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 5 5. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSE E IN THE CROSS OBJECTION FOR THE ASSESSMENT YEAR 2009-10 :- 1. THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDI TION OF RS.8,63,952/- IN RESPECT OF COMMISSION PAID TO VARI OUS PARTIES. 2. THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDI TION OF RS.14,60,087/- OUT OF TRAVELLING EXPENSES. IT WAS P ROVED BEFORE THE LD. CIT THAT THE SAID EXPENSES INCURRED WERE GENUINE AND FOR THE PURPOSES OF THE BUSINESS. THE A DDITION MAY PLEASE BE DELETED. 3. THE ORDER OF THE LD. CIT(A) BE MAINTAINED ON GRO UNDS ALLOWED BY HIM. 6. SINCE COMMON GROUNDS ARE INVOLVED IN ALL THESE A PPEALS AND CROSS OBJECTIONS, WE WOULD LIKE TO DISPOSE OF ITA N O. 297/IND/2013 FOR THE ASSESSMENT YEAR 2008-09 FIRST AS A MODEL. ITA NO. 297/IND/2013 : A.Y.2008-09 7. GROUND NO. 1 OF THE REVENUES APPEAL RELATES TO DELETION OF ADDITION OF RS. 27,86,037/- OUT OF THE ADDITION OF RS.34,82,537/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF BOGUS C OMMISSION PAYMENT. 8. THE FACTS, IN NUTSHELL, ARE THAT THE ASSESSEE DE BITED COMMISSION EXPENDITURE AMOUNTING TO RS. 34,82,537/ - TO THE P&L ACCOUNT. IT WAS THE CLAIM OF THE ASSESSEE THAT SHE HAD PAID DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 6 COMMISSION TO AGENTS ON ACCOUNT OF MATERIAL SUPPLIE D IN DIFFERENTE INDUSTRIES THROUGH THEM. THE ASSESSING OFFICER FOUN D THAT THE ASSESSEE HAS NOT ENTERED INTO ANY WRITTEN AGREEMENT WITH THE AGENTS AND COMMISSION WAS SAID TO BE BASED ON SOME SPECIFIED PERCENTAGE ON SALES AS PER THE ORAL TERMS AND CONDI TIONS. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN THE SAME IN RESPONSE TO WHICH IT WAS STATED BY THE ASSESSEE THA T COMMISSION WAS PAID FOR PROCURING ORDERS AND SUPPLYING MATERIA L IN DIFFERENT FACTORIES. IT WAS ALSO STATED THAT THE EMPLOYEES OF THE ASSESSEE APPROACH PERSONS WORKING IN THE PURCHASE DEPARTMENT S OF CLIENT COMPANIES AND CONTACT PERSONS WHO ARE IN A POSITION TO GIVE ORDERS OR INFLUENCE THE ORDERS AFTER MAKING PAYMENT OF COM MISSION TO THEM. ON CONSIDERATION OF THE SUBMISSIONS OF THE AS SESSEE, THE ASSESSING OFFICER DID NOT FIND ANY FORCE IN THE SAM E AND ACCORDINGLY DISALLOWED THE ENTIRE COMMISSION EXPENSES CLAIMED B Y THE ASSESSEE. 9. AGAINST THE DISALLOWANCE MADE BY THE ASSESSING O FFICER, THE ASSESSEE APPROACHED THE COMMISSIONER OF INCOME TAX (APPEALS) BY WAY OF FILING FIRST APPEAL BEFORE HIM. ON CONSIDER ATION OF THE SUBMISSIONS OF THE ASSESSEE IN THE WAKE OF THE FACT S OF THE CASE AND DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 7 THE LEGAL POSITION, THE COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE ADDITION OF RS. 27,86,037/- OUT OF THE TOTAL ADDITION OF RS. 34,82,537/-. NOW THE ASSESSEE IS IN APPEAL BEF ORE THE TRIBUNAL. 10. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES A ND CAREFULLY CONSIDERED THE RELEVANT MATERIAL PLACED ON RECORD O F THE TRIBUNAL, INTER ALIA, PAPER BOOKS FILED BY THE ASSESSEE AND T HE IMPUGNED ASSESSMENT ORDER AND THE FIRST APPELLATE ORDER. FRO M THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 25.2 .2013 WE OBSERVE THAT THE COMMISSIONER OF INCOME TAX (APPEAL S) HAS GRANTED RELIEF TO THE ASSESSEE BY OBSERVING AS UNDER :- 3.2.5 I HAVE CONSIDERED THE FINDING OF THE A.O. A ND THE WRITTEN SUBMISSION OF THE APPELLANT CAREFULLY. THE A.O. HAS DISALLOWED ENTIRE COMMISSION EXPENDITURE WHICH IS N OT JUSTIFIED. THE A.O. HAS CALLED FOR INDEPENDENT INFORMATION FRO M THE PARTIES DURING THE A.Y. 2008-09 IN THE CASE OF THE APPELLAN T AND THEY HAVE CONFIRMED THE INVOLVEMENT OF COMMISSION AGENT EXCEPT FOUR PARTIES WHO HAVE DENIED INVOLVEMENT OF ANY LIAISON AGENT. THE TURNOVER OF THE APPELLANT COMPANY WAS INCREASED DUR ING THE YEAR UNDER CONSIDERATION WHEREAS EXPENSES WERE INCR EASED DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 8 SLIGHTLY ON ACCOUNT OF COMMISSION COMPARED TO PRECE DING EYAR IN PROPORTION TO SALES. A.O. COULD NOT DECIDE THE BUSI NESS NEED OF THE APPELLANT HE HAS ONLY TO SEE THAT EXPENSES SHOU LD BE INCURRED WHOLLY AND EXCLUSIVELY FOR THE BUSINESS PU RPOSES. IN THE ABSENCE OF WRITTEN AGREEMENT WITH THE COMMISSIO N AGENT AND SALES TO THE SAME PARTIES IN THE SUBSEQUENT YEA R COULD NOT MAKE THE EXPENSES INGENUINE OR NOT INCIDENTAL TO BU SINESS. THE APPELLANT HJAS FURNISHED EVIDENCES IN SUPPORT OF TH E EXPENSES INCURRED ON ACCOUNT OF COMMISSION WHICH WAS NOT CON SIDERED BY THE A.O. IT HAS ALSO FILED THE CONFIRMATION AND COP IES OF THE RETURN OF THE MAJOR COMMISSION AGENTS. THE APPELLAN T HAS PLACED RELIANCE ON THE VARIOUS DECISION OF HON'BLE APEX COURT, HON'BLE M.P. HIGH COURT, HON'BLE ITAT INDORE BENCH, INDORE ETC. IN THE CASE OF CIT VS. DHANRAJGIRI RAJA NMARSINGIRJ I (1973) 91 ITR 544 (SC) HON'BLE APEX COURT HELD THAT : IT IS NOT OPEN TO PRESCRIBE WHAT EXPENDITURE AN AS SESSEE SHOULD INCURRED AND IN WHAT CIRCUMSTANCES HE SHOULD INCUR EXPENDITURE. EVERY BUSINESS BUSINESSMAN KNOWS HIS INTEREST BEST. DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 9 3.2.6 IN THE CASE OF HEMRAJ NABHOMAL SONS VS. CIT( 2005) 278 ITR 345 (MP) HON'BLE M.P. HIGH COURT HAS TAKEN A VIEW THAT ONCE THE AFOREMENTIONED CONDITIONS ARE FOUND SATIS FIED, THEN IT IS NOT PROPER ON THE PART OF A.O. I.E. TAXI NG AUTHORITIES TO PROBE ON THE QUESTION AS TO WHETHER THE EXPENDITURE WAS LEGITIMATE OR NECESSARY ETC. THIS T YPE OF INQUIRY IS NEITHER CONTEMPLATED NOR CALLED FOR. IT IS ONLY WHEN THE A.O. FINDS THAT CLAIM SO MADE IS BOGUS OR FALSE OR NOT INCURRED AS A FACT, IT CAN BE DISALLOWED, EL SE NOT. 3.2.7 IN THE CASE OF RAVI MARKETING (P) LTD. VS. CI T ON 18 JANUARY, 2005 EQUIVALENT CITATIONS : (2005) 198 CTR CAL 354, 2006 280 ITR 519 CAL. HON'BLE COURT HELD THAT : WHETHER AN EXPENDITURE, EXPEDIENT FOR THE PURPOSE OF PROMOTION OF SALES OR THE BUSINESS AND THE AMOUNT A ND THE MANNER IN WHICH TO BE EXPENDED IS TO BE LOOKED AT B Y THE AUTHORITIES BELOW UNDER THE IT ACT OR THE COURT FRO M THE VIEWPOINT OF THE ASSESSEE NOT FROM ITS ARMCHAIR THE ASSESSEE KNOWS HIS BUSINESS. IT IS HIS SUCCESS OR FAILURE IN THE BUSINESS DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 10 WHICH IS MATERIAL TO HIM. IT IS NOT FOR THE COURT O R THE IT AUTHORITY TO SUGGEST OR ADVICE TO PRESUME OR SURMIS E AS TO THE EXPEDIENCE. WHAT THE AUTHORITIES UNDER THE ACT CAN DO IS THAT THEY CAN EXAMINE THE GENUINENESS OF THE EXPENDITURE AND THE PURPOSE FOR WHICH IT WAS EXPENDED. ONCE IT IS ESTAB LISHED THAT THE AMOUNT WAS GENUINELY EXPENDED AND IT WAS EXPEND ED FOR A PARTICULAR PURPOSE, THE ONLY DISCRETION THAT IS L EFT TO THE AUTHORITY UNDER THE ACT IS TO APPLY THE LAW ON THE BASIS OF SUCH ESTABLISHED FACT OR FINDING. IF THE PURPOSE F OR WHICH IT IS EXPENDED IS ELIGIBLE FOR DEDUCTION UNDER A PARTICUL AR HEAD NO DISCRETION IS LEFT TO THE AUTHORITY EITHER TO SURMI SE WITH THE QUANTUM THAT OUGHT TO HAVE BEEN SPENT OR TO SURMISE OR PRESUME THE PURPOSE DIFFERENTLY AND CONVERT THE SAM E UNDER SOME OTHER HEAD 3.2.8IN THE CASE OF PROCHEM LABORATORIES PVT. LTD. VS. ACIT (TRIB INDORE) HON'BLE ITAT, INDORE BENCH, INDORE HE LD THAT :- U/S 37 OF THE INCOME TAX ACT, 1961 COMMISSION PA IDBY ASSESSEE TO UNRELATED CONCERN (AGENT) FOR PROCURING ORDER A.O. HELD THAT THERE WAS NO WRITTEN AGREEMENT FOR S UCH DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 11 PAYMENT, AGENT HAD ITS OWN BUSINESS AND WAS NOT ENGAGED IN PROVIDING AGENCY SERVICE AND THE MANAGER OF ONE OF THE CUSTOMER DID NOT KNEW THE AGENT COMMIS SION WAS ALSO PAID BY SISTER CONCERN TO SAME AGENT WHICH WAS DISALLOWED BY A.O. BUT ADDITION IN CASE OF SISTER C ONCERN WAS DELETED BY CIT(A) HELD THERE IS NO NEED OF WRITTEN AGREEMENT TURNOVER HAS SUBSTANTIALLY INCREASED DU E TO AGENT AGENT IS AN UNRELATED PARTY WHO IS REGULARL Y ASSESSED TO TAX AND HAS OFFERED THE COMMISSION IN I TS RETURN COMMISSION IS ALLOWABLE. 3.2.9 THE APPELLANT HAS ALSO PLACED RELIANCE ON THE DECISION OF HON'BLE ITAT, INDORE BENCH, INDORE IN T HE CASE OF SAHANI TRADING CO. VS. ACIT (2012) 20 ITJ 773 IN WH ICH HON'BLE ITAT HAS ALLOWED PAYMENT OF COMMISSION AS T URNOVER OF THE APPELLANT COMPANY WAS SUBSTANTIALLY INCREASE D AND COMMISSION WAS PAID BY CHEQUE AFTER DEDUCTING TDS. 3.1.10 IT IS NOT THE CASE OF A.O. THAT APPELLANT HA S NOT PAID ANY COMMISSION ON SALES. THE APPELLANT HAS PAID COM MISSION IN EARLIER AND SUBSEQUENT YEARS. THE NATURE OF THE APPELLANTS DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 12 BUSINESS REQUIRES SUCH COMMISSION PAYMENT IN A COMP ETITIVE MARKET FOR ACHIEVING HIGHER SALES AND FOR ENSURING REALISATION OF ITS SALE PROCESS. NOTHING HAS BEEN BROUGHT ON RE CORD BY THE A.O. TO SUGTEST THAT PAYMENT OF COMMISSION WAS WITH OUT BUSINESS NEEDS AND PAYMENT OF THE COMMISSION A SUPP ORTED BY THE MATERIAL PLACED ON AS DISCUSSED ABOVE. CONSI DERING THE FACTS THERE WAS DENIAL OF FOUR PARTIES OF INVOLVING ANY LIASON AGENT IN A.Y.2008-09 WHEN A.O. HAS CALLED FOR THE I NFORMATION U/S 133(6) AND NON PRODUCTION OF COMMISSION AGENTS WHOM APPELLANT HAS PAID COMMISSION MORE THAN RS. 1,00,00 0/- INSPITE OF ASKING FOR THE SAME BY THE A.O., ALTHOUG H APPELLANT HAS FILED CONFIRMATIONS AND COPY OF THE RETURNS OF SOME OF THE COMMISSION AGENTS, DISALLOWANCE TO THE EXTENT OF 20 % OF COMMISSION EXPENSES WILL MEET END OF JUSTICE. ON T HE SIMILAR FACTS DISALLOWANCE OF 20% CONFIRMED IN THE CASE OF APPELLANT IN PREVIOUS YEAR 2008-09. HENCE, ADD MADE BY THE A.O. IS CONFIRMED TO THE EXTENT OF RS. 8,63,952/- AND APPEL LANT WILL GET RELIEF OF RS. 34,55,809/- DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 13 11. THE LEARNED DR SUPPORTING THE ACTION OF THE AS SESSING OFFICER SUBMITTED THAT THE ASSESSING OFFICER HAS RI GHTLY HELD THAT MERELY BECAUSE THE ASSESSEE ESTABLISHED THE EXISTEN CE OF AGREEMENT BETWEEN HIM AND HIS AGENTS AND THE ACTUAL PAYMENT T HEREIN,IT WOULD NOT TAKE AWAY THE JURISDICTION OR DISCUSSION OF THE ASSESSING OFFICER TO CONSIDER WHETHER THE EXPENDITURE WAS GEN UINELY AND EXCLUSIVELY INCURRED FOR THE PURPOSE OF BUSINESS AN D WHETHER THE EXPENDITURE WAS COMMERCIALLY EXPEDIENT. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS ELABORATELY DEALT WITH TH E ISSUE AND THE CONCLUSION IN PARA 3.15 OF THE ASSESSMENT ORDER AS TO WHY THE EXPENDITURE WAS NOT INCIDENTAL TO OR EXPEDIENT FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. THEREFORE, THE COMMISSIO NER OF INCOME TAX (APPEALS) WAS QUITE UNJUSTIFIED IN GRANTING PAR T RELIEF TO THE ASSESSEE. 12. REPLYING TO THE ABOVE, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT WAS NOT THE CASE OF THE ASSESSING OFFICER THAT THE ASSESSEE HAS NOT PAID ANY COMMISSION ON SALES AND U NDISPUTEDLY THE ASSESSEE HAS PAID COMMISSION IN EARLIER AND SUB SEQUENT ASSESSMENT YEARS ON THE IDENTICAL FACTS AND CIRCUMS TANCES AS THE DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 14 NATURE OF THE ASSESSEES BUSINESS REQUIRED COMMISSI ON PAYMENT IN THE COMPETITIVE MARKET FOR ACHIEVING HIGHER SALES A ND FOR ACHIEVING REALISATION OF SALE PROCESS. THE LEARNED COUNSEL F OR THE ASSESSEE POINTED OUT THAT THE ASSESSING OFFICER HAS NOT BROU GHT ON RCORD ANY ALLEGATION TO ESTABLISH THAT THE PAYMENT OF COMMISS ION WAS WITHOUT BUSINESS NEEDS AND IT WAS SUPPORTED BY RELEVANT MAT ERIAL ON RECORD. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHE R SUBMITTED THAT DESPITE THE COMMISSIONER OF INCOME TAX (APPEALS) AC CEPTING ALL THE CONTENTIONS OF THE ASSESSEE, HE MADE AD HOC DISALLO WANCE OF 25% OF TOTAL COMMISSION PAID WITHOUT ANY BASIS. THEREFORE, THE PART DELETION MADE BY THE COMMISSIONER OF INCOME TAX (AP PEALS) MAY KINDLY BE CONFIRMED AND PART CONFIRMATION OF DISALL OWANCE MADE BY THE COMMISSIONER OF INCOME TAX (APPEALS) WITHOUT AN Y REASONING AND BASIS MAY KINDLY BE ALLOWED TO THE ASSESSEE. 13. ON CAREFUL CONSIDERATION OF THE ABOVE RIVAL SUB MISSIONS, WE ARE OF THE VIEW THAT WHILE GRANTING PART RELIEF TO THE ASSESSEE THE COMMISSIONER OF INCOME TAX (APPEALS) HAS FOLLOWED T HE RATIO OF THE DECISION OF ITAT, INDORE BENCH IN THE CASE OF SAHNI TRADING COMPANY VS. ACIT (SUPRA) WHEREIN THE TRIBUNAL HAS A LLOWED DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 15 PAYMENT OF COMMISSION BY TAKING NOTE OF THE FACT TH AT THE TURNOVER OF THE ASSESSEE COMPANY WAS SUBSTANTIALLY INCREASED AND THE COMMISSION WAS PAID BY CHEQUE AFTER DEDUCTING TDS. IN THE PRESENT CASE, UNDISPUTEDLY THE ASSESSEE MADE PAYMEN T OF COMMISSION ON SALES IN THE LINE OF EARLIER AND SUBS EQUENT ASSESSMENT YEARS AND THE ASSESSING OFFICER HAS NOT DISPUTED THE FACT THAT AS PER THE REQUIREMENT OF THE NATURE OF T HE ASSESSEES BUSINESS, COMMISSION PAYMENT IS A MUST TO ACHIEVE H IGHER SALES IN COMPETITIVE MARKET FOR REALISATION OF SALE PROCEEDS . IT IS NOT THE ALLEGATION OF THE ASSESSING OFFICER THAT THE PAYMEN T OF COMMISSION WAS WITHOUT ANY BUSINESS NEED AND PER CONTRA IT IS CLEAR THAT THE ASSESSEE SUBMITTED BEST POSSIBLE MATERIAL AND EVIDE NCE ON RECORD TO SUPPORT HIS CLAIM. HOWEVER, WE CANNOT IGNORE THE FA CT THAT FOUR PARTIES DENIED HAVING INVOLVED AS LIASONING AGENTS OF THE ASSESSEE AND THE ASSESSEE COULD NOT PRODUCE CONFIRMATIONS FR OM TWO ALLEGED COMMISSION AGENTS ON BEING SPECIFICALLY ASKED BY TH E ASSESSING OFFICER. IN THE TOTALITY OF FACTS AND CIRCUMSTANCE S OF THE CASE, THE COMMISSIONER OF INCOME TAX (APPEALS) WAS QUITE CORR ECT AND JUSTIFIED IN ALLOWING PART RELIEF TO THE ASSESSEE A ND IN CONFIRMING THE DISALLOWANCE TO THE EXTENT OF 20% OF COMMISSION EXP ENSES. DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 16 THEREFORE, IN OUR CONSIDERED OPINION, WE ARE UNABLE TO SEE ANY PERVERSITY OR ANY OTHER VALID REASON TO INTERFERE W ITH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) ON THIS COUNT AND, HENCE, WE UPHOLD THE SAME. GROUND NO. 1 OF THE REVENUE AND GR OUND NO. 1 OF THE CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. 14. GROUND NO. 2 OF THE REVENUES APPEAL IS THAT TH E COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT JUSTIFIED IN RESTRI CTING THE DISALLOWANCE TO RS. 11,52,168/- INSTEAD OF THE TOTA L ADDITION OF RS.36,44,271/- MADE BY THE ASSESSING OFFICER ON ACC OUNT OF DISALLOWANCE OF TRAVELLING EXPENSES WHEREAS GROUND NO. 2 OF THE CROSS OBJECTION OF THE ASSESSEE IS THAT THE COMMISS IONER OF INCOME TAX (APPEALS) HAS ERRED IN MAINTAINING THE ADDITION OF RS. 11,52,168/- OUT OF TRAVELLING EXPENSES. 15. BRIEFLY STATED, THE ASSESSEE CLAIMED TRAVELLING EXPENSES OF RS.46,08,669/- ON THE GROUND THAT THE TRAVELLING EX PENSES HAVE BEEN INCURRED BY HER EMPLOYEES IN CONNECTION WITH T HE ASSESSEES BUSINESS. ON BEING ASKED BY THE ASSESSING OFFICER T O PRODUCE THE RELEVANT BILLS AND VOUCHERS, THE ASSESSEE COULD PRO DUCE THE SUPPORTING BILLS AND VOUCHERS TO THE EXTENT OF RS.8 ,64,398/- WHICH DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 17 WERE IMPOUNDED BY THE ASSESSING OFFICER. THE ASSESS ING OFFICER AGAIN ISSUED SHOW CAUSE NOTICE ASKING THE ASSESSEE AS TO WHY THE REMAINING CLAIM SHOULD NOT BE DISALLOWED IN THE ABS ENCE OF SUPPORTING BILLS AND VOUCHERS. IN RESPONSE, THE ASS ESSEE SUBMITTED THAT THE REMAINING EXPENSES HAD BEEN INCURRED BY WA Y OF INTERNAL VOUCHERS SUBMITTED BY THE EMPLOYEES AND THE EMPLOYE ES WERE CARRYING OUT THE BUSINESS ON THE ASSESSEES VEHICLE S ALSO. THE ASSESSING OFFICER DID NOT ACCEPT THIS SUBMISSION OF THE ASSESSEE AND AFTER ALLOWING FURTHER ALLOWANCE OF RS.1,00,000 /- FOR THE EXPENSE WITHOUT SUPPORTING THIRD PARTY VOUCHERS, TH E ASSESSING OFFICER ALLOWED TOTAL TRAVELLING EXPENSES AT RS. 9, 64,398/- AND BALANCE EXPENSES OF RS. 36,44,271/- WERE ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 16. AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). IT WAS THE C ONTENTION OF THE ASSESSEE THAT THE ASSESSING OFFICER HAS NOT TAKEN A NY COGNIZANCE ON THE SELF-MADE VOUCHERS WHICH CONTAINED THE DETAI LS OF THE PAYMENTS AND TRAVELLING UNDERTAKEN. THE COMMISSIONE R OF INCOME TAX (APPEALS) ON CONSIDERATION OF THE SUBMISSIONS O F THE ASSESSEE, DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 18 RESTRICTED THE DISALLOWANCE TO RS.11,52,168/- AFTER GRANTING RELIEF OF RS.34,56,501/-. NOW THE REVENUE IS IN APPEAL AGAINS T THE RELIEF GRANTED BY THE COMMISSIONER OF INCOME TAX (APPEALS) . 17. THE LEARNED DR CONTENDED THAT THE ASSESSING OFF ICER WAS RIGHT IN MAKING THE DISALLOWANCE OF RS.46,08,669/- AS THE ASSESSEE WAS ABLE TO PRODUCE SUPPORTING BILLS AND VOUCHERS TO TH E EXTENT OF RS.8,64,398/- ONLY. THE LEARNED DR FURTHER SUBMITTE D THAT THE ASSESSING OFFICER WAS QUITE CORRECT IN ALLOWING TRA VELLING EXPENSES OF RS.9,64,398/- AND BALANCE EXPENSES WERE RIGHTLY ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. THE LEARNED DR F URTHER SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) RESTR ICTED THE DISALLOWANCE TO THE EXTENT OF RS.11,52,168/- AND GR ANTED PART RELIEF TO THE ASSESSEE WITHOUT ANY BASIS. THEREFORE, THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) MAY KINDLY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 18. REPLYING TO THE ABOVE, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE PLACED BILLS AND VOUCHE RS BEFORE THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAS NOT TAKEN ANY COGNIZANCE OF THE SELF MADE VOUCHERS, WHICH WERE CO NTAINING DETAILS DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 19 OF PAYMENT AND TRAVELLING UNDERTAKEN BY THE ASSESSE E AND STAFF MEMBERS AND COMPLETE VOUCHERS WERE PREPARED AND THE BOOKS OF THE ASSESSEE CONTAINED ALL THE NECESSARY DETAILS OF THE JOURNEYS UNDERTAKEN AND PAYMENT MADE TO RESPECTIVE PERSONS. THE LEARNED COUNSEL FOR THE ASSESSEE STRONGLY CONTENDED THAT TH E ASSESSING OFFICER IN THE REMAND REPORT HAS ACCEPTED THIS FACT . THEREFORE, THE COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT CORREC T AND JUSTIFIED IN MAKING THE DISALLOWANCE OF 25% OF TOTAL TRAVELLI NG EXPENSES WITHOUT ANY BASIS. 19. ON CONSIDERATION OF THE ABOVE RIVAL SUBMISSIONS , WE OBSERVE THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS G RANTED PART RELIEF TO THE ASSESSEE WITH THE FOLLOWING OBSERVATI ONS :- 3.3.3 I HAVE CONSIDERED THE FINDING OF THE A.O. AND THE WRITTEN SUBMISSION OF THE APPELLANT CAREFULLY. THE APPELLANT HAS FILED THE COMPARATIVE CHART SHOWING G.P./NP AND REL EVANT EXPENSES AS UNDER :- DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 20 S.NO. PARTICULARS F.Y. F.Y. F.Y. F.Y. 1 TURNOVER 2005-06 2006-07 2007-08 2008-09 2 G.P. 64.57 (18.67%) 129.52 (19.44%) 203.17 (18.23%) 251.67 (19.26%) 3. NP. 4.44 (1.28% 17.51 (2.63%) 53.51 (4.80) 55.92 (4.28%) 4. TRAVELLING EXPENSES 11.52 (3.33%) 23.45 (3.52%) 46.7 (4.13%) 58.40 (4.47%) 5. COMMISSION AGENTS 10.06 (2.91%) 33.76 (5.07%) 34.82 (3.12%) 43.20 (3.31%) THE TRAVELLING EXPENSES ARE INCREASED FROM 4.13# TO 4.47% OF TOTAL TURNOVER COMPARED TO LAST YEAR. THE REASON FO R INCREASE WAS GIVEN BY THE APPELLANT WAS INCREASE IN TRANSPOR TATION COST. TURNOVER OF THE APPELLANT WAS ALSO INCREASED DURING THE YEAR. THE APPELLANT HAS NOT MAINTAINED SUPPORTING VOUCHER S FORN ALL THESE EXPENSES. THE TRAVELLING EXPENSES CLAIMED BY THE APPELLANT WITH SUPPORTING BILLS AND VOUCHERS WERE T O THE EXTENT OFRS.9,72,365/- AND REMAINING TRAVELLING EXPENSES W ERE INCURRED THROUGH INTERNAL VOUCHERS. THE APPELLANT H AS FILED SOME OF SUCH VOUCHERS AND AFFIDAVIT OF SHRI KAMALKA NT PATWA IN SUPPORT OF HER CONTENTION. THE APPELLANT HAS MAI NTAINED DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 21 INTERNAL VOUCHERS FOR TRAVELLING EXPENSES BUT THEY WERE NOT SUPPORTED WITH 3 RD PARTY VOUCHER. THE APPELLANT MUST HAVE INCURRED THE EXPENSES FOR TRAVELLING BUT IN ABSENCE OF PROPER BILLS AND VOUCHERS THEY COULD NOT BE ALLOWED FULLY. FURTHER, PAYMENTS WERE ALSO MADE IN CASH AND GENUINENESS OF THESE EXPENSES WAS NOT CROSS VERIFIABLE. CONSIDERING THE ABOVE FACTS, DISALLOWANCE MADE BY THE A.O. OUT OF TRAVELLING EXP ENSES AT RS.58,40,348/- UP TO 25% IS HEREBY CONFIRMED I.E. RS.14,60,087/- AND APPELLANT WILL GET RELIEF OF RS. , 33,66,941/- IN VIEW OF THE ABOVE, IT IS APPARENT FROM THE FACTS OF THREE CONSECUTIVE YEARS I.E. F.YS. 2005-06 TO 2007-08 THA T TRAVELLING EXPENSES WERE INCREASED FROM 3.5% TO 4.15% ON TOTAL TURNOVER IN COMPARISON TO IMMEDIATELY PRECEDING F.Y. 2006-07 AN D THE REASON OR INCREASE WAS OBVIOUSLY DUE TO INCREASE IN THE TR ANSPORTATION COST WHICH CANNOT BE DISBELIEVED. HOWEVER, THE LEARNED COUNSEL FOR THE ASSESSEE COULD NOT CONTROVERT THIS FINDING OF THE A UTHORITIES BELOW THAT THE ASSESSEE IS NOT MAINTAINING SUPPORTING VOU CHERS FOR ALL THE CLAIM EXPENSES ON TRAVELLING AND ONLY SUPPORTING BI LLS AND VOUCHERS TO THE EXTENT OF RS.11,66,350/- WERE PLACED ON RECO RD AND DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 22 RS.2,84,310/- WERE CLAIMED WAS WITHOUT ANY SUPPORTI NG BILLS AND THE REMAINING TRAVELLING EXPENSES WERE INCURRED ONL Y THROUGH INTERNAL VOUCHERS. HOWEVER, THE COMMISSIONER OF I NCOME TAX (APPEALS) RIGHTLY NOTED THAT THE ASSESSEE HAS FILED SOME VOUCHERS AND AFFIDAVITS OF CERTAIN EMPLOYEES ON WHOM MAJOR P ART OF TRAVELLING EXPENSES WAS INCURRED AND THESE VOUCHERS AND AFFIDA VITS HAVE NOT BEEN CONTROVERTED BY THE AUTHORITIES BELOW. IN A P ECULIAR SITUATION WHEN THE ASSESSEE HAS CLAIMED HIGHER TRAVELLING EXP ENSES MAINLY ON THE BASIS OF INTERNAL VOUCHERS FOR TRAVELLING EX PENSES WITHOUT ANY SUPPORTING THIRD PARTY BILLLS OR ANY OTHER DOCU MENT THEN THE COMMISSIONER OF INCOME TAX (APPEALS) WAS QUITE CORR ECT AND JUSTIFIED IN MAKING THE DISALLOWANCE OF 25% OF TOTA L TRAVELLING EXPENSES CLAIMED BY THE ASSESSEE. IN VIEW OF THE A BOVE, WE ARE UNABLE TO SEE ANY AMBIGUITY, PERVERSITY OR OTHER VA LID REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INC OME TAX (APPEALS) WHO GRANTED PART RELIEF TO THE ASSESSEE A ND THE REMAINING PART WAS CONFIRMED. ACCORDINGLY, GROUND NO. 2 OF TH E REVENUES APPEAL AND CROSS OBJECTION OF THE ASSESSEE IS DISMI SSED. DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 23 CO NO. 77/IND/2013 : A.Y. 2008-09 20. FOR THE REASONS MENTIONED ABOVE, GROUND NO. 1 O F THE CROSS OBJECTION OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2 008-09 IS DISMISSED. 21. FOR THE REASONS MENTIONED ABOVE, GROUND NO. 1 O F THE CROSS OBJECTION OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2 008-09 IS DISMISSED. ITA NO. 410/IND/2013 : A.Y. 2009-10 22. FOR THE REASONS MENTIONED ABOVE, GROUND NO. 1 O F THE APPEAL OF THE REVENUE IS DISMISSED. 23. FOR THE REASONS MENTIONED ABOVE, GROUND NO. 2 O F THE APPEAL OF THE REVENUE IS DISMISSED. 24. GROUND NO. 3 FOR THE ASSESSMENT YEAR 2008-09 AN D GROUND NOS. 3 FOR THE ASSESSMENT YEAR 2009-10 RELATE TO TH E DELETION OF ADDITION OF RS. 5,45,822/- AND RS. 75,000/- ON ACC OUNT OF INTEREST ON UNSECURED LOAN U/S 68 OF THE ACT. DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 24 25. BRIEFLY STATED, FACTS PERTAINING TO THESE GROUN DS ARE THAT THE THE ASSESSEE CLAIMED INTEREST OF RS. 45,622/- & RS. 75,000/- ON UNSECURED LOAN OF RS. 5 LACS CLAIMED TO HAVE TAKEN FROM SMT. GEETA ROY. THE ASSESSING OFFICER OBSERVED THAT DURING THE ASSESSMENT YEAR 2008-09 THE ASSESSEE HAS SHOWN LOAN ATRS. 5 LA CS FROM M/S GEETA RAO AND HAS ALSO PAID INTEREST OF RS. 45,822/ - THEREON DURING F.Y. 2007-08 AND THUS THE ASSESSING OFFICER MADE DISALLOWANCE AT RS.5,00,000/- ON ACCOUNT OF UNSECUR ED LOAN FROM SMT. GEETA RAO AND RS. 45,822/- OF ADJUSTMENT PAID THEREON BY HOLDING THAT ON BEING ASKED TO PRODUCE THE CREDITOR BY SHOW CAUSE DATED 15.11.2010, THE ASSESSEE DID NOT FURNISH ANY REPLY TO THE SAID NOTICE AND SOUGHT ADJUSTMENT, THUS HE FAILED TO PRO DUCE THE CREDITOR SHOWING HER EXISTENCE, CREDITWORTHINESS AN D GENUINENESS OF THE LOAN TRANSACTION. THE ASSESSING OFFICER IN T HE ASSESSMENT YEAR 2009-10 ALSO OBSERVED THAT IN THE ASSESSMENT Y EAR 2008-09 ALSO THE ASSESSING OFFICER HAD TREATED THIS LOAN AS UNEXPLAINED CASH CREDIT IN THE BOOKS OF THE ASSESSEE AND WAS TREATED AS INCOME OF THE ASSESSEE. THE ASSESSING OFFICER, THEREFORE, DISALLO WED THE ENTIRE CLAIM OF THE ASSESSEE AND ADDED BACK THE SAME TO TH E TOTAL INCOME OF THE ASSESSEE. DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 25 26. AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE LEARNED F IRST APPELLATE AUTHORITY AFTER CONSIDERING THE ISSUE DELETED BOTH THE ADDITIONS. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL FO R BOTH THE YEARS. 27. THE LEARNED DR DREW OUR ATTENTION TOWARDS PARA 3.4.1 OF THE FIRST APPELLATE ORDER AND SUBMITTED THAT THE COMMIS SIONER OF INCOME TAX (APPEALS) GRANTED RELIEF TO THE ASSESSEE IGNORING THE FACT THAT THE ASSESSEE DID NOT PRODUCE THE LENDER AND HE R CREDIT WORTHINESS AND EXISTENCE WAS NOT ESTABLISHED BY THE ASSESSEE. THE LEARNED DR STRENUOUSLY POINTED OUT THAT THE COMMISS IONER OF INCOME TAX (APPEALS) GRANTED RELIEF TO THE ASSESSEE BY CONSIDERING THE IRRELEVANT FACTS. THEREFORE, THE FIRST APPELLAT E ORDER MAY KINDLY BE SET ASIDE BY RESTORING THAT OF THE ASSESSING OFF ICER FOR BOTH THE YEARS. 28. REPLYING TO THE ABOVE, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SMT. GEETA RAO IS FILING HER INCOME TAX RETURN REGULARLY AND THE AMOUNTS HAVE BEEN CREDITED BY WAY OF CHEQUE/TRANSFER ENTRY TO HER BANK ACCOUNT AND CONFI RMATION LETTER WAS ALSO GIVEN BY HER TO THE ASSESSEE. THE LEARNED COUNSEL FOR THE DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 26 ASSESSEE FURTHER SUBMITTED THAT THE ASSESSEE HAS FI LED HER AFFIDAVIT IN SUPPORT OF THE CONFIRMATION OF THE TRANSACTION A ND THIS FACT CANNOT BE CHALLENGED THAT THE AMOUNT GIVEN TO THE A SSESSEE WAS CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE FROM S MT. GEETA RAO BY WAY OF CHEQUE/TRANSFER, THEREFORE, THE EXISTENCE AND CREDITWORTHINESS OF THE CREDITOR/LENDER CANNOT BE C HALLENGED IN ANY MANNER AND, THEREFORE, THE COMMISSIONER OF INCOME T AX (APPEALS) WAS RIGHT IN GRANTING RELIEF TO THE ASSESSEE BY FOL LOWING THE RATIO OF THE DECISION OF THE HON'BLE M.P. HIGH COURT IN THE CASE OF CIT VS. METACHEM INDUSTRIES (SUPRA) AND THE ORDER OF THE TR IBUNAL IN THE CASE OF SANJAY KHATRI (SUPRA). 29. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION THA T ON BEING ASKED BY THE BENCH, THE LEARNED DR COULD NOT CONTROVERT T HIS FINDING THAT THE LENDER, SMT. GEETA RAO, IS HAVING PAN AND REGUL ARLY FILING RETURN WITH THE DEPARTMENT. IT HAS ALSO NOT BEEN C ONTROVERTED BY THE LEARNED DR THAT THE AMOUNTS GIVEN TO THE ASSESS EE AS LOAN WERE CREDITED TO THE BANK ACCOUNT OF SMT. GEETA RAO BY W AY OF CHEQUE/TRANSFER AND THUS EXISTENCE, CREDITWORTHINES S AND GENUINENESS OF THE TRANSACTION CANNOT BE CHALLENGED WITHOUT ANY DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 27 SUPPORTING ADVERSE MATERIAL. THEREFORE, IN OUR VIEW , THE COMMISSIONER OF INCOME TAX (APPEALS) WAS RIGHT IN G RANTING RELIEF TO THE ASSESSEE AND WE ARE UNABLE TO SEE ANY VALID REA SON TO INTERFERE WITH THE SAME AND, HENCE, WE UPHOLD THE SAME. 30. GROUND NO. 3 OF THE REVENUES APPEAL FOR THE A. Y.2009-10 RELATES TO DELETION OF ADDITION OF RS. 75,000/- ON ACCOUNT OF INTEREST ON UNSECURED LOAN U/S 68 OF THE ACT. 31. BRIEFLY STATED, THE ASSESSEE CLAIMED INTEREST O F RS. 75,000/- ON UNSECURED LOAN OF RS. 5 LACS CLAIMED TO HAVE TAKEN FROM SMT. GEETA ROY. THE ASSESSING OFFICER OBSERVED THAT IN THE ASS ESSMENT YEAR 2008-09 ALSO THE ASSESSING OFFICER HAD TREATED THIS LOAN AS UNEXPLAINED CASH CREDIT IN THE BOOKS OF THE ASSESSE E AND WAS TREATED AS INCOME OF THE ASSESSEE. THE ASSESSING OF FICER, THEREFORE, DISALLOWED THE ENTIRE CLAIM OF THE ASSESSEE AND ADD ED BACK THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED , THE ASSESSEE WENT IN APPEAL BEFORE THE COMMISSIONER OF INCOME TA X (APPEALS). THE LEARNED FIRST APPELLATE AUTHORITY AFTER CONSIDE RING THE ISSUE DELETED THE ADDITION. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 28 32. THE LEARNED DR SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT JUSTIFIED IN DELETING THE ADD ITION OF RS.75,000/- ON ACCOUNT OF INTEREST ON UNSECURED LOA N U/S 68 OF THE ACT WITHOUT EXAMINING THE CREDITWORTHINESS AND GENU INENESS OF THE SAID TRANSACTION. THE LEARNED DR SUBMITTED THAT TH E ASSESSING OFFICER HAS RIGHTLY TREATED THE INTEREST AS UNEXPLA INED CASH CREDIT IN THE BOOKS OF THE ASSESSEE. HE FURTHER SUBMITTED THA T THE ORDER OF THE FIRST APPELLATE AUTHORITY MAY KINDLY BE SET ASI DE AND THAT OF THE ASSESSING OFFICER RESTORED. 33. REPLYING TO THE ABOVE, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT FOR THE ASSESSMENT YEAR 2008-09 THE LOAN TAKEN FROM MRS. GEETA ROY HAS BEEN ACCEPTED BY THE COMMIS SIONER OF INCOME TAX (APPEALS) AFTER CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE AND HE ALSO GRANTED RELIE F TO THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-09 ON JUSTIFIED BASIS AND THE SAME CANNOT BE DISTURBED WITHOUT ANY BASIS FOR ASSESSMEN T YEAR 2009-10 FOR DISALLOWING INTEREST PAID ON THE SAME LOAN. 34. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES. BY THE EARLIER PART OF THIS ORDER WE HAVE DISMISSED GROUND NO. 3 OF DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 29 THE REVENUE FOR THE ASSESSMENT YEAR 2008-09 PERTAIN ING TO UNSECURED LOAN TAKEN BY THE ASSESSEE FROM SMT. GEET A ROY AND PAYMENT OF INTEREST HAS BEEN ACCEPTED BY THE COMMIS SIONER OF INCOME TAX (APPEALS) AND WE HAVE ALREADY CONFIRMED THE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS). THEREFOR E, INTEREST PAYMENT IN THE ASSESSMENT YEAR 2009-10 CANNOT BE DI SPUTED AND, THEREFORE, IN OUR OPINION, THE COMMISSIONER OF INCO ME TAX (APPEALS) WAS RIGHT IN GRANTING RELIEF TO THE ASSESSEE FOR TH E ASSESSMENT YEAR 2009-10 AND IN VIEW OF OUR FINDINGS RECORDED FOR TH E ASSESSMENT YEAR 2008-09, WE UPHOLD THE SAME. ACCORDINGLY, GROU ND NO. 3 OF THE REVENUE IS DISMISSED. 35. IN THE RESULT, THE APPEALS OF THE REVENUE AS WE LL AS THE CROSS OBJECTIONS OF THE ASSESSEE STAND DISMISSED. THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON 25 TH MAY, 2017. SD/- SD/- &+ # # (O.P.MEENA) (C.M. GARG) ACCOUNTANT MEMBER J UDICIAL MEMBER MAY 25 TH , 2017 DN/ DCIT VS. SMT. NAMITA ITA NOS.297 & 410/IND/2013 30