Ashokkumar T. Soni, Surendranagar V. The Income Tax Officer, Ward-2, Surendranagar

ITA 103/RJT/2014

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1558 (ITAT-RAJKOT)
• Duration Of Justice: 4 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 03-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: DM RINDANI
• Section: 143(3)

Judgement Text

ASHOK KUMAR T.SONI VS. ITO, WARD - 2, SURENDRANAGAR / ITA NO. 103 /RJT/2014/ A . Y. 2009 - 10 PAGE 1 OF 12 , , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT . . [ , . . , BEFORE SHRI C. M.GARG , JUDICIAL MEMBER AND SHRI O.P.MEENA , ACCOUNTANT MEMBER . . ./ I.T . A . NO. 103 / RJT / 201 4 [ [ / ASSESSMENT YEAR : 20 0 9 - 10 ASHOKKUMAR T SONI, PROP.RADHIKA JEWELLERS, VITHAL PRESS ROAD, SURENDRANAGAR. [PAN: ADRPS 4642 L] VS. THE INCOME TAX OFFICER, WARD - 2, SURENDRANAGAR. APPELLANT / RESPONDENT [ /ASSESSEE BY SHRI D.M.RINDANI A.R. /REVENUE BY SHRI PRAVEEN VERMA D.R. / DATE OF HEARING: 19 .11. 2018 /P RONOUNCEMENT ON : 19 . 1 1 .2018 /O R D E R PER O. P. MEENA, ACCOUTANT MEMBER: 1. TH IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF LEARNED COMMISSIONER OF INCOM E TAX (APPEALS) - XVI , AHMEDABAD (IN SHORT THE CIT (A)) DATED 29.10.2013 PERTAINING TO ASSESSMENT YEAR 2009 - 10 WHICH IN TURN HAS ARISEN FROM ORDER PASSED BY THE INCOME TAX OFFICER , WARD - 2, SURENDRANAGAR (IN ASHOK KUMAR T.SONI VS. ITO, WARD - 2, SURENDRANAGAR / ITA NO. 103 /RJT/2014/ A . Y. 2009 - 10 PAGE 2 OF 12 SHORT THE AO) DATED 13.12.2011 UNDER SECTION 143(3) OF INCOME TAX ACT,1961 (IN SHORT THE ACT) . 2. GROUNDS RAISED BY THE REVENUE READ AS UNDER : 1. THE HONBLE CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF THE LD. ASSESSING OFFICER WHO HAS ADOPTED THE VALUE OF CLOSING STOCK HIGHER THAN THE ACTUAL COST PRICE OF THE STOCK FOR MAKING ADDITION OF RS.15,66,738/ - . HOWEVER, THE HONBLE CIT(A) HAS GIVEN SLIGHT RELIEF DIRECTING THE LD. ASSESSING OFFICER TO EXCLUDE THE OPENING STOCK WHICH HAS BEEN WRONGLY INCLUDED IN CLOSING STOCK FOR VALUATION OF STOCK BY THE LD. ASSESSING OFFICER. 2. THE HONBLE CIT(A) HAS ALSO ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF THE LD. ASSESSING OFFICER WHO HAS APPLIED THE RATE OF CURRENT PURCHASE PRICE OF THE ITEMS SOLD AS AGAINST ACTUAL PURCHASE PRICE OF ITEMS REMAINED AS A CLOSING ST OCK. 3. THE HONBLE CIT(A) HAS ALSO ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF THE LD. ASSESSING OFFICER WHO HAS NOT PROPERLY VERIFIED AND UNDERSTOOD THE METHOD OF VALUATION OF CLOSING STOCK WHERE THE CLOSING STOCK HAS BEEN VALUED AT COST PRICE . THE REGULAR METHOD OF VALUING CLOSING STOCK AT COST PRICE CONSISTENTLY SHOULD BE MAINTAINED. THE JEWELLERY IS IN THE SHAPE OF ORNAMENTS AND NOT AS 24 CARRATE (ORNAMENTS ARE MADE OUT OF 18 TO 20 CARRATE) AND SO THE VALUE SHOULD BE ADOPTED ACCORDINGLY. 4. THE HONBLE CIT(A) HAS ALSO ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE FACTS OF THE CASE AND CONFIRMED THE ADDITION OF RS.1,80,000/ - MADE BY THE LD. ASSESSING OFFICER BASELESS U/S.40A(2)(A) OF THE I.T.ACT. 3. GROUND NO.1 TO 3 OF THE APPEAL RELATES TO CONFIRMING ACTION OF THE ASSESSING OFFICER (AO) WHO HAS ADOPTED THE VALUE OF CLOSING STOCK HIGHER THAN THE ACTUAL COST PRICE OF THE STOCK FOR MAKING ADDITION OF RS.15,66,738/ - . HOWEVER, THE CIT(A) HAS GIVEN SLIGHT RELIEF DIRECTING THE AO TO EXCLUDE TH E OPENING STOCK WHICH HAS BEEN WRONGLY INCLUDED IN THE CLOSING STOCK VALUATION BY ASHOK KUMAR T.SONI VS. ITO, WARD - 2, SURENDRANAGAR / ITA NO. 103 /RJT/2014/ A . Y. 2009 - 10 PAGE 3 OF 12 THE AO. THUS, THE LD.CIT(A) HAS ERRED IN APPLYING THE RATES OF CURRENT PURCHASE PRICE OF ITEMS SOLD AS AGAINST ACTUAL PURCHASE PRICE OF ITEMS REMAINED AS A CLOSING STOCK WHE REAS THE ASSESSEE IS REGULARLY VALUING THE CLOSING ST OCK AT COST PRICE CONSISTENTLY. 4. THE ABOVE GROUND NO. 1 TO 3 ARE RELATED TO SINGLE ISSUE, HENCE BEING CONSIDERED TOGETHER. 5. BRIEF FACTS ARE THAT THE ASSESSEE IS A PROPRIETOR OF RADHIKA JEWELLERS AND DOING THE BUSINESS OF TRADING AND JEWELLERY THE BOOKS OF ACCOUNTS ARE REGULARLY MAINTAINED AND HAS BEEN AUDITED U/S.44AB OF THE ACT. THE ASSESSEE HAS VALUED THE CLOSING STOCK AT COST. HOWEVER, THE AO HAS UNDER VALUATION OF CLOSING STOCK AND MADE THE ADDITION AMOUNTING TO RS.15,66,739/ - AS DIFFERENCE IN VALUATION OF CLOSING STOCK . 6. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD.CIT(A). THE LD.CIT(A) OBSERVED THAT THE ASSESSEE IS DEALING IN THE FANCY ITEMS AND HENCE FIFO METHOD CANNOT B E APPLIED. THE APPELLANT HAS ARGUED THAT ITS 99% SALES ARE OUT OF CURRENT PURCHASES AND THAT MAJORITY OF ITS CLOSING STOCK PERTAINS TO EARLIER PURCHASE . A CCORDINGLY , IT WAS ARGUED THAT THE ADDITION DESERVES TO BE DELETED. T HE CIT(A) OBSERVED THAT THE AO HAS ASHOK KUMAR T.SONI VS. ITO, WARD - 2, SURENDRANAGAR / ITA NO. 103 /RJT/2014/ A . Y. 2009 - 10 PAGE 4 OF 12 VALUED THE STOCK BY TAKING 10539.840 GMS OF GOLD AT THE COST OF RS.1,11,77,611/ - SO AS TO ARRIVE THE AVERAGE OF 1060.51 GMS PER GRAM . IT HAS BEEN SUBMITTED THAT THE FIGURE OF 10539.840 GMS OF GOLD INCLUDES THE VALUE OF OPENING STOCK OFRS.12,58,366/ - , HENCE, THE VALUATION BY THE AO IS FAULTY. AFTER CONSIDERING THE ARGUMENTS, THE LD.CIT(A) OBSERVED THAT THE ARGUMENT OF THE ASSESSEE THAT IT IS DEALING IN FANCY ITEMS AND HENCE STOCK IS TO BE VALUED DIFFERENTLY ARE UNTENABLE OR UNACCEPTABLE AND THE STOCK IS TO VALUED ONLY AS PER ANY ONE METHOD OF ACCOUNTING WHICH THE ASSESSEE FOLLOWS CONSISTENTLY. THE ORDER OF THE AO SHOWS THAT APPELLANT IS NOT DOING THE SAME . HOWEVER, PERUSAL OF THE DETAILS OF VALUATION OF STOCK SHOWS THAT OPENING STOCK VALUE D AT RS.12 ,58,376/ - IS INCLUDED IN THE FIGURE OF RS.1,11,77,611/ - WHICH HAS BEEN ADOPTED BY THE AO FOR MAKING THIS ADDITIONS. THE SAME IS NOT PERMISSIBLE AS THE CLOSING STOCK CANNOT CONTAIN THE FIGURES OF OPENING STOCK. THE AO WAS THEREFORE DIRECTED TO RE - CALCULAT E THE VALUE OF ADDITION ON ACCOUNT OF CLOSING STOCK MADE BY HIM BY REDUCING THE FIGURES OF OPENING STOCK OF RS.12,58,376/ - WHICH HAS POSSIBLE BEEN INADVERTENTLY INCLUDED IN THE CALCULAT ION WHILE MAKING THE ADDITION. HOWEVER, THE OTHER FINDINGS OF THE AO WERE UPHELD. ASHOK KUMAR T.SONI VS. ITO, WARD - 2, SURENDRANAGAR / ITA NO. 103 /RJT/2014/ A . Y. 2009 - 10 PAGE 5 OF 12 7. BEING AGGRIEVED THE ASSESSEE HAS FILED THIS APPEAL BEFORE THIS TRIBUNAL. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CIT(A) HAS RIGHTLY GIVEN PART RELIEF TO THE ASSESSEE THAT OPENING STOCK OF RS.12,58,376/ - CANNOT BE PART OF CLOSING S TOCK OF RS.1,11,77,611/ - . THEREFORE, SAME IS REQUIRED TO BE EXCLUDED. HOWEVER, THE CIT(A) HAS CONSIDERED THE AVERAGE VALUE BY ADOPTING FIFO METHOD, ACCORDING TO WHICH AVERAGE RATE COMES TO 1269.08 PER GRAM AS AGAINST THE VALUE ADOPTED BY THE AO AT AVERAG E RATE AT RS.1060.51 PER GRAM AND AS AGAINST THE VALUE CONSIDERED BY THE ASSESSEE @461.99 BY APPLYING THE LIFO METHOD . THUS, THE VALUE ADAPTED BY THE AO BY CONSIDERING AVERAGE RATE OF 1060.51 WAS LESSER THAN VALUE CONSIDERED BY THE CIT(A) . HENCE, THE CIT (A) HAS ENHANCED THE VALUATION OF CLOSING STOCK WHICH HAS BEEN DONE WITHOUT GIVING ANY SHOW - CAUSE NOTICE. I T WAS CONTENDED THAT THE ASSESSEE MAINTAINS REGULAR BOOKS OF ACCOUNTS AS PER PROVISIONS OF 44AB OF THE ACT AND THE AUDITOR HAS NOT POINTED OUT ANY D EFECT IN THE BOOKS OF ACCOUNTS AND METHOD OF VALUATION OF CLOSING STOCK WHICH HAS BEEN CONSISTENTLY BEING FOLLOWED BY THE ASSESSEE FROM YEAR TO YEAR. THE LD.COUNSEL PLACING RELIANCE IN THE CASE OF DCIT VS. HARJIVANDAS J.JAVANI [1998] 60 TTJ 155 [AHD] SUBM ITTED THAT WHERE THE ASSESSEE HAD ASHOK KUMAR T.SONI VS. ITO, WARD - 2, SURENDRANAGAR / ITA NO. 103 /RJT/2014/ A . Y. 2009 - 10 PAGE 6 OF 12 BEEN FOLLOWING A REGULAR SYSTEM OF ACCOUNTING SINCE LAST SO MANY YEARS AND THIS METHOD WAS BASED ON ACCEPTED PRINCIPLES OF ACCOUNTING I.E. AT COST AND THERE WAS NO JUSTIFICATION FOR REJECTING THE METHOD ON VALUATION OF STO CK. SIMILARLY, THE LD.COUNSEL FURTHER PLACED RELIANCE IN THE CASE OF ACIT VS. SAM A R KUMAR [2016] 47 CCS 402 (KOL. TRIBUNAL) WHEREIN IT WAS HELD THAT METHOD OF ACCOUNTING REGULARLY EMPLOYED IN VALUATION OF STOCK BY ADOPTING AVERAGE COST PRICE (LIFO METHOD) WHICH WAS ONE OF THE RECOGNIZED METHOD FOR STOCK AND WHICH HAS BEEN CONSISTENTLY FOLLOWED BY THE ASSESSEE FOR SEVERAL YEARS HAS BEEN DISCARDED WITHOUT GIVING ANY REASON BY THE AO AND VALUATION OF GOLD WAS DONE AT MARKET PRICE THEREBY INCREASING PROFIT OF ASSESSEE NOTIONALLY WHICH WAS WITHOUT ANY BASIS OR REASONING. THEREFORE, SAME WAS NOT HELD TO BE JUSTIFIED. SIMILARLY, THE LD.COUNSEL HAS ALSO PLACED RELIANCE IN THE CASE OF CIT VS. SETTLEMENT COMMISSION (IT & WT) [2015] 272 CTR 559 (KERALA). 8. PER CONTRA , THE LD.SENIOR DEPARTMENTAL REPRESENTATIVE(SR.DR) HAS HEAVILY SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES AND SUBMITTED THAT VALUATION OF CLOSING STOCK TO BE ON COST BASIS AND NOT OF OPENING VALUE SHOWN BY THE ASSESSEE. HOWEVER, IN REJOINDER TO THIS AR GUMENT, THE LD.COUNSEL ASHOK KUMAR T.SONI VS. ITO, WARD - 2, SURENDRANAGAR / ITA NO. 103 /RJT/2014/ A . Y. 2009 - 10 PAGE 7 OF 12 SUBMITTED THAT THE ASSESSEE HAS VALUED THE CLOSING STOCK ON COST BASIS ONLY BY APPLYING LIFO METHOD, HENCE THE ARGUMENT OF LD.SR.DR IS NOT TENABLE. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD, ON GOING THR OUGH THE DETAILS AND CHART OF VALUATION OF CLOSING STOCK FILED BY THE LD.COUNSEL , IT IS SEEN THAT THE ASSESSEE HAS FOLLOWED THE LIFO METHOD OF VALUATION AND ADOPTED THE VALUE @ 461.99 PER GRAM AS PER OPENING STOCK FOR WORKING OUT THE VALUATION OF CLOSING S TOCK AND ARRIVED AT THE CLOSING STOCK. HOWEVER, THE CIT(A) HAS CONSIDERED THE AVERAGE VALUE BY APPLYING THE FIFO RATE ACCORDING TO WHICH AVERAGE RATE COMES TO 1269.08 PER GRAM WHICH IN OUR VIEW IS NOT CORRECT METHOD WHEN THE ASSESSEE IS REGULARLY FOLLOWIN G THE METHOD OF ACCOUNTING ON COST BASIS BY APPLYING THE LIFO METHOD OF ACCOUNTING CONSISTENTLY. FURTHERMORE, THE CLOSING STOCK MOSTLY ITEMS OF OPENING STOCK, WHICH HAS BEEN VALUED ON COST AS PER LIFO METHOD. THE LD.COUNSEL PLACED RELIANCE IN THE CASE OF DCIT VS. HARJIVANDAS J.JAVANI (SUPRA) OF CO - ORDINATE BENCH, AHMEDABAD WHEREIN IT WAS HELD THAT WHERE THE ASSESSEE HAD BEEN FOLLOWING A REGULAR SYSTEM OF ACCOUNTING SINCE LAST SO MANY YEARS AND THIS METHOD WAS BASED ACCEPTED PRINCIPLES OF ASHOK KUMAR T.SONI VS. ITO, WARD - 2, SURENDRANAGAR / ITA NO. 103 /RJT/2014/ A . Y. 2009 - 10 PAGE 8 OF 12 ACCOUNTANCY I.E . AT COST THERE WAS NO JUSTIFICATION FOR REJECTION OF VALUATION OF METHOD OF CLOSING STOCK, THEREFORE, THE AO WAS NOT JUSTIFIED IN CONSIDERING THE AVERAGE RATE BASED ON CURRENT YEARS PURCHASES AS PER FIFO METHOD . FURTHER, THE VALUE ADOPTED BY CIT(A) HAS IN FACT RESULTED IN ENHANCEMENT OF VALUE OF CLOSING STOCK WITHOUT GIVING ANY NOTICE AS AVERAGE RATE OF VALUATION COMES TO 1269.08 (FIFO RATE) AS AGAINST AVERAGE RATE AT 1060.51 PER GRAM ADOPTED BY THE AO . SIMILARLY, WE FIND THAT THE AO HAS CONSIDERED THE AVE RAGE RATE FOR VALUATION OF CLOSING STOCK WITHOUT POINTING OUT ANY DEFECT IN THE BOOKS OF ACCOUNTS WHEREAS BOOKS OF ACCOUNTS ARE AUDITED STATEMENTS AND MECHANICALLY REFERRED THE REJECTION OF THE SAME AND PROCEEDED TO DETERMINE THE FACTS AND THE REGULAR METH OD OF VALUATION OF CLOSING STOCK BEING FOLLOWED BY THE ASSESSEE. WE ARE OF THE CONSIDERED OPINION THAT THE AO AND CIT(A) HAVE NOT JUSTIFIED IN ADOPTING AVERAGE VALUE RATE OF PURCHASES FOR WORKING OUT CLOSING STOCK BY APPLYING FIFO METHOD WHEREAS THE ASSES SEE HAS BEEN C ONSISTENTLY FOLLOWING LIFO METHOD FOR VALUATION OF CLOSING STOCK. FURTHER, THE BOOKS OF ACCOUNTS OF THE ASSESSEE ARE AUDITED U/S.44AB AND NO ADVERSE COMMENTS HAVE BEEN MADE BY THE AUDITOR. ASHOK KUMAR T.SONI VS. ITO, WARD - 2, SURENDRANAGAR / ITA NO. 103 /RJT/2014/ A . Y. 2009 - 10 PAGE 9 OF 12 10. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES , THE ADDIT ION MADE ON ACCOUNT OF VALUATION IN CLOSING STOCK BY THE AO AS WELL AS CIT(A) IS THEREFORE DELETED, ACCORDINGLY, GROUND NO.1 TO 3 OF APPEAL ARE ALLOWED. 11. GROUND NO.4 STATES THAT THE CIT(A) ERRED IN LAW AND ON FACTS AND NOT APPRECIATING THE FACTS OF THE CAS E AND CONFIRMING THE ADDITION OF RS.1,80,000/ - MADE BY THE AO U/S.40A(2)( A ) OF THE ACT. 12. BRIEF FACTS OF THIS GROUND ARE THAT THE AO NOTED THAT THERE WAS AN ABNORMAL INCREASE IN SALARY PAYMENT FROM RS.60,000/ - IN PRECEDING YEAR TO RS.4,56,000/ - IN CURRENT YEAR AS AGAINST THE INCREASE IN TURNOVER BY ABOUT 105% AND INCREASE IN SALARY BY 369%. IT WAS NOTICED THAT THE ASSESSEE HAD PAID SALARY OF RS.1 LAKH EACH TO HIS THREE SONS AGGREGATING TO RS.3 LAKHS AND WHICH WERE DEBITED ON 3 1.03.2009 WHEREAS THE BALANCE SALARY OF RS.1,56,000/ - WAS PAID TO OTHER STAFF MEMBERS ON MONTHLY BASIS. THERE WAS NO RESPONSE FROM THE ASSESSEE TO TWO SHOW CAUSE NOTICES ISSUED BY THE AO FOR DISALLOWANCE OF SALARY U/S.40A(2)( A ) OF THE ACT, HENCE, THE AO HAS MADE A DDITION OF RS.1,80,000/ - ASHOK KUMAR T.SONI VS. ITO, WARD - 2, SURENDRANAGAR / ITA NO. 103 /RJT/2014/ A . Y. 2009 - 10 PAGE 10 OF 12 TREATING THE SAME AS EXCESSIVE AS AGAINST TOTAL CLAIM OF RS.3,00,000/ - . 13. BEING AGGRIEVED, THE ASSESSEE FILED THIS APPEAL BEFORE THE LD.CIT(A), WHEREIN IT WAS CONTENDED THAT NO ADDITION CAN BE MADE TO SALARY BY COMPARING WITH THE TU RNOVER AND THAT MERELY BECAUSE THE PAYMENT HAS BEEN MADE TO SONS OF THE APPELLANT. THEREFORE, PROVISIONS OF SECTION 40A(2)(B) ARE NOT ATTRACTED. HOWEVER, THE CIT(A) WAS OF THE VIEW THAT THE ARGUMENT OF THE ASSESSEE THAT THERE CAN BE NO CONNECTION BETWEEN SALARY AND TURNOVER ARE UNTENABLE. BESIDES, FACTS OF THE CASE INDICATES THAT THE PAYMENT OF SALARY HAS BEEN MADE TOWARDS THE END OF THE FINANCIAL YEAR AND THAT T O O PERSONS WHO ARE COVERED UNDER THE PROVISIONS OF SECTION 40A(2)(B) OF THE ACT . T HE APPELLA NT HAS FAILED TO RESPOND TO THE QUERIES OF THE AO AS WELL AS DURING THE APPELLATE PROCEEDINGS TO JUSTIFY AS TO HOW THE PAYMENT OF SALARY TO HIS SONS WAS AS PER THE MARKET RATES. CONSIDERING THESE FACTS, THE ADDITION MADE BY T HE AO WAS THEREFORE CONFIRMED. 14. BEING AGGRIEVED, THE ASSESSEE FILED THIS APPEAL BEFORE THIS TRIBUNAL. THE LD.COUNSEL SUBMITTED THAT THESE THREE PERSONS HAVE RENDERED SERVICES FOR PURCHASING AND SALE OF GOODS AND FOR ASHOK KUMAR T.SONI VS. ITO, WARD - 2, SURENDRANAGAR / ITA NO. 103 /RJT/2014/ A . Y. 2009 - 10 PAGE 11 OF 12 RECOVERY OF OUTSTANDING DUES. THEREFORE, THE DISALLOWANCE MADE BY TH E AO NEEDS TO BE DELETED. 15. ON THE OTHER HAND, THE LD.SENIOR DEPARTMENTAL REPRESENTATIVE (SR.DR) SUBMITTED THAT NO DETAILS OF PAYMENTS ON ACCOUNT OF SALARY MADE TO THREE SONS IS FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS DURING APPELLATE P ROCEEDINGS. THEREFORE, THE NATURE OF SERVICES RENDERED BY THESE PERSONS WERE NOT EXPLAINED, MOREOVER, THE SALARY WAS CREDITED IN THE MONTH OF MARCH DEBITED ON 31 .03.2009 AND REMAINED AS CREDITED ON 31.03.2009 WHEREAS THE SALARY OF THE OTHER EMPLOYEES HAS BEEN PAID ON MONTHLY BASIS. 16. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD . W E FIND THAT THE SALARY EXPENSES OF RS.1,56,000/ - TO THE EMPLOYEES OTHER THAN THE SPECIFIED PERSONS WERE DEBITED AND PAID BY THE ASSESSEE, ON MO NTHLY BASIS WHEREAS SALARY AMOUNTING TO RS.3 LAKHS WAS DEBITED ONLY ON 31 .03.2009. IT IS ALSO NOTICED THAT RS.1 LAKH WAS CREDITED ON 29.03.2009 IN THE ACCOUNT OF SHRI BRIJESH ASHOKBHAI SONI , SHRI KALPESHBHAI BHARATBHAI SONI A ND PRITESH ASHOKBHAI SONI THER E NO PAYMENTS OF WITHDRAWALS MADE DURING THE YEAR AND ENTIRE AMOUNT OF SALARY ASHOK KUMAR T.SONI VS. ITO, WARD - 2, SURENDRANAGAR / ITA NO. 103 /RJT/2014/ A . Y. 2009 - 10 PAGE 12 OF 12 REMAINED AS CREDITED ON 31.03.2009 IN RESPECT OF P ERSONS WHO ARE SPECIFIED U/S.40A(2)(B) OF THE ACT. FURTHER, WE NOTICED THAT THE TURNOVER OF THE ASSESSEE HAS INCREASED BY 105.7 3% WHEREAS THERE IS THEREBY INCREASE IN TH E SALARY EXPENSES BY RS.369.52%, WHICH IS ALSO NOT JUSTIFIABLE TO INCREASE IN SALARY TO EMPLOYEES, PARTICULARLY RELATIVES OF THE ASSESSEE. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT THE DISALLOWANCE OF RS.1 ,80 ,000/ - OUT OF SALARY OF RS.3 LAKHS MADE BY THE AO IS QUITE JUSTIFIABLE, PARTICULARLY WHEN NO DETAILS OF WORK AND SERVICES RENDERED AND PERFORMED BY THE SONS OF THE ASSESSEE HAVE BEEN BROUGHT ON RECORD NOR THE SALARY HAD BEE N PAID DURING THE YEAR ON REGULAR MONTHLY BASIS. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A), ACCORDINGLY THIS GROUND OF APPEAL OF THE ASSESSEE IS THEREFORE DISMISSED. 17. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . 18. THE ORDER PRONOUNCED IN THE OPEN COURT ON 19 .11.2018 . SD/ - SD/ - ( . . /C.M. GARG) ( . . / O.P.MEENA) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / RAJKOT, DATED : 19 TH NOVEMBER , 2018/ S.GANGADHARA RAO, SR.PS COPY OF ORDER SENT TO - ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, RAJKOT