MANGU MAL TEKWANI, Kota V. ITO, BUNDI

ITA 1031/JPR/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5288 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 30-12-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ROSHANTA MEENA JCIT DHK
• Assessee Lawyers: B V MAHESHWARI
• Keywords: Depreciation
• Section: 143(3); 194C

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA-@ ITA NO. 1031/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 . SHRI MANGU MAL TEKWANI, PROP. M/S. GIRDHAR TRADING CO., NEW GRAIN MANDI, BUNDI. CUKE VS. INCOME TAX OFFICER, BUNDI. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AALPT 4979 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI B.V. MAHESHWARI (C.A) JKTLO DH VKSJ LS@ REVENUE BY : MS ROSHANTA MEENA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 06.05.2016. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 30/05/2016. VKNS'K@ ORDER PER SHRI LALIET KUMAR, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT (APPEALS), KOTA DATED 29.10.2013 FOR THE A.Y. 2010-11. THE GR OUNDS RAISED BY THE ASSESSEE ARE AS UNDER :- 1. THAT THE LD. AO GROSSLY ERRED IN DISALLOWING TRANSP ORT EXPENSES BY APPLYING SEC. 40(A)(IA) OF I.T. ACT, AND THE LD. CI T (A) ALLOWED PART RELIEF & ERRED IN SUSTAINING THE ADDITION OF RS. 4, 30,610/-. 2. THAT THE LD. AO AS WELL AS LD.CIT (A) GROSSLY ERRED IN MAKING/SUSTAINING THE ADDITION ON ACCOUNT OF HOUSEH OLD EXPENSES OF RS. 29,000/-. 3. THAT THE LD. AO AS WELL AS LD.CIT (A) GROSSLY ERRED IN MAKING/SUSTAINING THE ADDITION ON ACCOUNT OF TELEPH ONE, MOBILE EXPENSES RS. 5,666/-. 2 ITA NO. 1031/JP/2013 MANGU MAL TEKWANI VS. ITO 4. THAT THE LD. AO AS WELL AS LD.CIT (A) GROSSLY ERRED IN MAKING/SUSTAINING THE ADDITION ON ACCOUNT OF SHOP E XPENSES RS. 5,124/-. 5. THAT THE LD. AO AS WELL AS LD.CIT (A) GROSSLY ERRED IN MAKING/SUSTAINING THE ADDITION ON VEHICLE EXPENSES & DEPRECIATION THEREON RS. 34,716/-. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM TRADING OF CATTLE FEED AND FOOD GRAIN ETC. TH E ASSESSEE FILED HIS RETURN DECLARING INCOME OF RS. 6,35,610/- AND AGRICULTURAL INCOME OF RS. 40,000/- ON 21.09.2010 FOR THE YEAR UNDER CONSIDERATION. SUBSEQ UENTLY THE RETURN WAS REVISED ON 25.09.2010 DECLARING INCOME OF RS. 7,89,270/-. THE CASE OF THE ASSESSEE WAS SCRUTINIZED UNDER SECTION 143(3) OF THE IT ACT AND ASSESSMENT WAS COMPLETED ON 28.12.2012 AT AN INCOME OF RS 32,61,740/-. 2.1. THE AO, DURING THE COURSE OF ASSESSMENT PROCEE DINGS, ON VERIFICATION OF BOOKS OF ACCOUNTS AND DOCUMENTS PRODUCED BY THE LD. A/R OF THE ASSESSEE, NOTICED THAT NO TDS WAS DEDUCTED BY THE ASSESSEE ON FOLLOWI NG TRANSACTIONS/FREIGHT PAYMENTS :- I) NEW M.P. RAJASTHAN FREIGHT CARRIER RS. 87870/- II) EKTA CONTAINER GOODS CARRIER RS. 84160/- III) DWARKA TRANSPORT RS.217925/- IV) SHRI JAIN TRANSPORT CO., BHULIA RS.162729/- V) SHARMA FREIGHT CARRIER RS.298995/- VI) GRC GHOMAN ROAD CARRIER RS.346550/- VII) EKTA CARGO CARRIERS RS.198850/- RS.1397070/- 3 ITA NO. 1031/JP/2013 MANGU MAL TEKWANI VS. ITO THE ABOVE EXPENSES/PAYMENT IS REQUIRED TO BE DISALL OWED AS PER THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. THE ASSESSEE WAS ASK ED TO FURNISH EXPLANATION/JUSTIFICATION VIDE LETTER DATED 17.12.2 012. IN COMPLIANCE, THE LD. A/R OF THE ASSESSEE VIDE HIS WRITTEN SUBMISSION DATED 26.1 2.2012 HAS STATED THAT DISALLOWING OF TRANSPORTATION U/S 40(A)(IA):- AS P ER THE PROVISION OF 194C(6), NO DEDUCTION SHALL BE MADE FROM ANY SUM CR EDITED OR PAID LIKELY TO BE CREDITED OR PAID DURING PREVIOUS TO TH E ACCOUNT OF A CONTRACTOR DURING THE COURSE OF BUSINESS OF PLYING, HIRING OR LEASING GOODS CARRIAGE, ON FURNISHING OF HIS PERMANENT ACCO UNT NO., TO THE PERSON PAYING OR CREDITING SUCH SUM. S.NO. NAME AMOUNT PAN 1. NEW M.P. RAJASTHAN FREIGHT CARRIER 87870 AAGFN 6019 G 2. EKTA CARGO CARRIERS 198850 A IVPB 0274 C 3. DWARKA TRANSPORT 217925 AABPB 3202 D 4. SHRI JAIN TRANSPORT CO. 162720 ACYPJ 8451 G 5. SHARMA FREIGHT CARRIER 198995 DKZPS 8290 E 6. GRC GHOMAN ROAD CARRIER 346550 7. EKTA CONTAINER GOODS CARRIER 84160 THE ASSESSEE FIRM HAS RECEIVED PAN OF THE TRANSPORT ER SO TDS IS NOT DEDUCTED, HENCE DISALLOWANCE U/S 40(A)(IA) IS WRONG AND UNJUSTIFIED. THE AO CONSIDERED THE SUBMISSIONS OF THE ASSESSEE B UT HE FOUND NO FORCE IN THEM. THE REPLY OF THE ASSESSEE IS ROUTINE NATURE AND WIT HOUT ANY EVIDENCE. THE ASSESSEE HAS NOT SUBMITTED ANY DOCUMENTARY EVIDENCE THAT HE WAS HAVING PAN OF THE PERSONS MENTIONED AT SL. NO. 1-5 ABOVE AT THE TIME OF PAYMENT/CREDITING THE AMOUNT. THE ASSESSEE HAS ALSO NOT MENTIONED PAN A GAINST THE PERSONS MENTIONED AT SL. NO. 6 & 7 ABOVE. PANS OF THESE PERSONS WERE NOT MENTIONED IN THE LEDGER AS WELL AS BILTY ETC. WHICH CLEARLY INDICATE THAT THE ASSESSEE HAS COLLECTED PAN FROM THE ABOVE PERSONS AFTER RECEIVING QUERY FROM THE AO. T HEREFORE, THE SUBMISSIONS OF THE 4 ITA NO. 1031/JP/2013 MANGU MAL TEKWANI VS. ITO ASSESSEE IS AN AFTERTHOUGHT AND NOT ACCEPTABLE. TH E AO CONSIDERING THESE ASPECTS, THE EXPENSES MADE ON THIS ACCOUNT WAS DISALLOWED U/ S 40(A)(IA) TO THE EXTENT OF RS. 13,97,070/- AND ADDED TO THE TOTAL INCOME OF THE AS SESSEE, SINCE NO TDS WAS DEPOSITED BY THE ASSESSEE ON THESE PAYMENTS. 3. ON APPEAL BEFORE LD. CIT (A), THE LD. CIT (A) PA RTLY ALLOWED THE CLAIM OF THE ASSESSEE BY OBSERVING AS UNDER :- I HAVE GONE THROUGH ASSESSEES SUBMISSION AND AOS FINDING. THE ASSESSEES CONTENTION THAT EACH GR IS SEPARATE AGREEMENT DOES NOT HOLD GOOD IN VIEW OF SPECIFIC PROVISION I.E. PR OVISO TO SECTION 194C(5) WHICH PROVIDES THAT TDS IS DEDUCTIBLE, IF T HE AGGREGATE AMOUNT OF SUM CREDITED OR PAID OR LIKELY TO BE CRED ITED OR PAID EXCEEDS RS. 50,000/-. IN THE CASE OF ASSESSEE, ALL THE AGGR EGATE AMOUNTS EXCEEDED RS. 50,000/-. THE ASSESSEES PLEA THAT THERE WAS NO AGREEMENT BET WEEN ASSESSEE AND TRANSPORTER IS ALSO DEVOID OF ANY MERIT. NO PER SON WILL CARRY OUT ANY WORK (IN THIS CASE TRANSPORTATION OF GOODS) WIT HOUT ANY UNDERSTANDING WHICH CAN BE ORAL OR WRITTEN. THEREFO RE, IT IS HELD THAT THE ASSESSEE HAD CONTRACTUAL OBLIGATION TO PAY TRAN SPORTATION CHARGES WHICH WERE CLEARLY COVERED UNDER SECTION 194C. THE ASSESSEE TOOK ANOTHER PLEA THAT ASSESSEE HAD PE RMANENT ACCOUNT NUMBER OF THE TRANSPORTERS AND, THEREFORE, NO TDS W AS DEDUCTED AS PER PROVISIONS OF SECTION 194C(6). IT WAS SEEN THAT THE A.O. BRUSHED ASIDE THIS ARGUMENT ON THE PLEA THAT THE ASSESSEE H AS NOT SUBMITTED ANY DOCUMENTARY EVIDENCE THAT HE WAS HAVING PAN OF THESE PERSONS AT THE TIME OF PAYMENT/CREDIT OF THE AMOUNT. IN MY OPINION, IT IS NOT NECESSARY THAT ANY PERSON HAS TO PROVE BY DOCUMENTARY EVIDENCE THAT HE WAS HAVING PAN OF THE PERSONS AT THE TIME OF PAYMENT. IT IS SUFFICIENT, IF THE SAME IS F URNISHED AT THE TIME OF HEARING. HOWEVER, IT WAS SEEN THAT IN TWO CASES NAMELY, (I) GRC GHOMAN ROAD CARRIERS (RS. 3,46,550/-) AND (II) EKAT CONTAINER G OODS CARRIER (RS. 84,160/-) THE PANS WAS NOT FURNISHED BEFORE AO. THE REFORE, IT IS HELD THAT TDS WAS DEDUCTIBLE FROM THE AMOUNTS PAID TO TH ESE PERSONS AND ASSESSEE HAS COMMITTED VIOLATION OF SECTION 40(A)(I A). THEREFORE, 5 ITA NO. 1031/JP/2013 MANGU MAL TEKWANI VS. ITO ADDITION OF RS. 4,30,710/- IS CONFIRMED. THE AO IS DIRECTED TO DELETE BALANCE ADDITION OF RS. 9,66,360/-. THIS GROUND OF APPEAL IS, THEREFORE, PARTLY ALLOW ED. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 4.1. THE LD. A/R FOR THE ASSESSEE SUBMITTED THAT IN CASE OF TRANSPORTATION OF GOODS, EVERY GR IS A SEPARATE AGREEMENT AND AFTER D ELIVERY OF A PARTICULAR CONSIGNMENT AT THE DESTINATION, THE AGREEMENT/CONTR ACT ENDS AND IN CASE THE BILL IS BELOW RS. 20,000/-, NO TDS IS REQUIRED TO BE DEDUCT ED. IN THIS REGARD THE LD. A/R PLACED RELIANCE IN THE MATTER OF CIT VS. UNITED RIC E LTD., 217 CTR 332 (P&H). THE ASSESSEE HAS MADE THE PAYMENT FOR TRANSPORTATION TO DIFFERENT LORRY DRIVERS AND THE PAYMENT WAS BELOW THE SPECIFIED LIMIT. IN THE CASE OF ASSESSEE, BOOKING & FIXING OF FREIGHT WORK IS DONE EITHER BY THE SELLER OR ITS AG ENT AND THE ASSESSEE IS JUST MAKING THE PAYMENT ON ARRIVAL OF GOODS AT HIS PLACE AND MA DE IT PART OF HIS PURCHASES AS SUCH THE ASSESSEE HAS NOT ENTERED INTO ANY CONTRACT WITH THE LORRY OWNER HENCE, HE IS NOT LIABLE TO DEDUCT TAX ON THE PAYMENT MADE BY IT. THERE IS NO CONTRACT BETWEEN THE ASSESSEE AND THE TRANSPORTERS AND SECTION 194C IS APPLICABLE ON WORKS CONTRACT. THE ASSESSEE IS ENGAGED IN TRADING OF GOODS, THE CO ST OF GOODS AND TRANSPORT IS PART OF PURCHASES. IN THIS REGARD, THE LD. A/R RELIED O N THE ITAT AHMEDABAD BENCH DECISION IN CASE OF ITO VS. BHADREH YARH TRADERS IN ITA NO. 2456/AHD/2010 WHEREIN IT IS HELD AS UNDER :- WE FIND THAT THERE IS NO CONTRACT BETWEEN THE ASSE SSEE AND THE TRANSPORTER AND THE SECTION 194C IS APPLICABLE TO W ORK CONTRACT. THE LEARNED CIT (A) HAS FOUND THAT IN THE INSTANT CASE THE CLEARING AND FORWARDING CONTRACTOR APPOINTS FOR TRANSPORTATION O F GOODS AND HENCE THE ONLY RESPONSIBILITY OF THE ASSESSEE WAS TO MAKE PAYMENT ON 6 ITA NO. 1031/JP/2013 MANGU MAL TEKWANI VS. ITO RECEIPTS OF GOODS. ADMITTEDLY, THE ASSESSEE IS ENGA GED IN PURCHASE OF YARN AND TRADING THEREON, AND RECEIVE THE GOODS FRO M TRANSPORTERS THROUGH CLEARING AND FORWARDING AGENTS. THE AO HAS MADE THE IMPUGNED ADDITION ON THE ASSUMPTION THAT THE ASSESS EE WAS HAVING AGREEMENT WITH THE TRANSPORTER FOR TRANSPORTATION O F ITS GOODS, WAS NOT BASED ON ANY EVIDENCE ON RECORD. THEREFORE, IN THE ABSENCE OF ANY DOCUMENTARY PROOF TO ESTABLISH THAT THERE IS AN AGR EEMENT BETWEEN THE ASSESSEE AND THE TRANSPORTER FOR CARRIAGE OF GO ODS, WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF THE CIT (A) ON THIS ISSUE, WHICH IS CONFIRMED. THEREFORE, THE LD. A/R SUBMITTED THAT WHEN SECTION 194C IS NOT APPLICABLE THEN THERE IS NOTHING TO APPLY SECTION 40(A)(IA). THE LD. A/R FURTHER SUBMITTED THAT THE MOST OF THE TRANSPORTERS WERE HAVING PERMANENT ACCOUNT NUMB ER MUCH EARLIER TO THE AGREEMENT ENTERED WITH THE ASSESSEE AND THE ASSESSE E HAS FURNISHED THE PANS OF THE TRANSPORTERS TO THE ASSESSEE. THEREFORE, THE LD . A/R SUBMITTED THAT WHEN PAN IS AVAILABLE WITH THE ASSESSEE, THERE IS NO REQUIREMEN T TO DEDUCT TDS AND THUS SECTION 40(A)(IA) IS NOT APPLICABLE. THE LD. A/R, THEREFOR E, REQUESTED TO DELETE THE ADDITION. 4.2. ON THE OTHER HAND, THE LD. D/R FOR THE ASSESSE E SUPPORTED THE ORDER OF THE AO. 4.3. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROU GH THE FACTS AND CIRCUMSTANCES OF THE CASE. IT IS SEEN THAT THE ASS ESSEE HAS MADE PAYMENTS ON ACCOUNT OF TRANSPORTATION EXPENSES TO THE TUNE OF R S. RS.13,97,070/- TO THE SEVEN TRANSPORTERS. ACCORDING TO THE AO, NO TDS HAS BEEN DEDUCTED ON THESE PAYMENTS THOUGH THESE WERE CONTRACTUAL PAYMENT IN NATURE UND ER SECTION 194C. THE AO, THEREFORE, OBSERVING THAT THE ASSESSEE HAS COMMITTE D DEFAULT IN NOT DEDUCTING THE TDS, THE PAYMENTS MADE ATTRACT PROVISIONS OF SECTIO N 40(A)(IA) OF THE ACT. BEFORE THE AO, ASSESSEE EXPLAINED AS PER THE PROVISION OF 194C(6), NO DEDUCTION SHALL BE 7 ITA NO. 1031/JP/2013 MANGU MAL TEKWANI VS. ITO MADE FROM ANY SUM CREDITED OR PAID LIKELY TO BE CRE DITED OR PAID DURING PREVIOUS TO THE ACCOUNT OF A CONTRACTOR DURING THE COURSE OF BU SINESS OF PLYING, HIRING OR LEASING GOODS CARRIAGE, ON FURNISHING OF HIS PERMANENT ACCO UNT NO., TO THE PERSON PAYING OR CREDITING SUCH SUM. THE ASSESSEE FIRM HAS RECEIVED PAN OF THE TRANSPORTER SO TDS IS NOT DEDUCTED, HENCE DISALLOWANCE U/S 40(A)(IA) IS W RONG AND UNJUSTIFIED. THE AO HOLDING THAT THE EXPLANATION OF THE ASSESSEE IS NOT TENABLE, HE MADE THE DISALLOWANCE. ON APPEAL BEFORE LD. CIT (A), THE LD . CIT (A) ALLOWED PART RELIEF BY OBSERVING THAT IT IS NOT NECESSARY THAT ANY PERSON HAS TO PROVE B Y DOCUMENTARY EVIDENCE THAT HE WAS HAVING PAN OF THE PERSONS AT T HE TIME OF PAYMENT. IT IS SUFFICIENT, IF THE SAME IS FURNISHED AT THE TIME OF HEARING . HE, HOWEVER, OBSERVING THAT OUT OF SEVEN PARTIES, PANS OF TWO PARTIES, NAM ELY, (I) GRC GHOMAN ROAD CARRIERS (RS. 3,46,550/-) AND (II) EKAT CONTAINER G OODS CARRIER (RS. 84,160/-) WERE NOT FURNISHED BEFORE AO, THEREFORE, HE HELD THAT TD S WAS DEDUCTIBLE FROM THE AMOUNTS PAID TO THESE PERSONS AND ASSESSEE HAS COMM ITTED VIOLATION OF SECTION 40(A)(IA). THEREFORE, HE RESTRICTED THE DISALLOWANC E TO RS. 4,30,710/- AND DELETED BALANCE ADDITION OF RS. 9,66,360/-. WE FIND THAT T HIS ISSUE IS COVERED BY THE DECISION OF COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. BHADREH YARH TRADERS IN ITA NO. 2456/AHD/2010 WHEREIN THE TRIBUNAL HAS DECI DED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE OBSERVATIONS OF THE COORDINATE BENCH OF THE TRIBUNAL ARE REPRODUCED HEREIN ABOVE. IN THE LIGHT OF ABOVE DISCUSSION AND ALSO RESPECTFULLY FOLLOWING THE DECISION OF COORDINATE BENCH, WE ALLOW GROUND NO. 1 OF THE ASSESSEE. 5. GROUND NO. 2 RELATES TO ADDITION OF RS. 29,000/- ON ACCOUNT OF HOUSEHOLD EXPENSES. THE AO, AT THE TIME OF ASSESSMENT PROCEE DINGS, NOTED THAT THE ASSESSEE 8 ITA NO. 1031/JP/2013 MANGU MAL TEKWANI VS. ITO HAS SHOWN HOUSEHOLD EXPENSES TO THE TUNE OF RS. 85, 000/-, IN ADDITION, HIS WIFE HAS ALSO WITHDRAWN RS. 6,000/- FOR HOUSEHOLD EXPENSES, THUS TOTALLING RS. 91,000/-. THE ASSESSEES FAMILY CONSISTS OF FOUR MEMBERS VIZ. TWO ADULT AND TWO MINOR SCHOOL GOING CHILDREN. THE ASSESSEE HAS NOT MAINTAINED AN Y ACCOUNT REGARDING HOUSEHOLD EXPENSES. THE AO CONSIDERING THE COST INFLATION OF KITCHEN EXPENSES, COST OF EDUCATION OF TWO SCHOOL GOING CHILDREN INCLUDING EX PENSES ON BOOKS, COPIES, CLOTHING ETC. AND SOCIAL OBLIGATIONS, ESTIMATED THE HOUSEHOL D EXPENSES PER FAMILY MEMBER AT RS. 2,500/- PER MONTH, WHICH RESULTANTLY COMES TO R S. 1,20,000/- P.A. FOR A FAMILY OF FOUR MEMBERS. THE AO, THEREFORE, AFTER REDUCING TH E HOUSEHOLD EXPENSES DECLARED BY THE ASSESSEE OF RS. 91,000/-, MADE THE ADDITION OF RS. 29,000/- (RS. 1,20,000 91,000/-). 6. BEING AGGRIEVED, THE ASSESSEE PREFERRED APPEAL B EFORE LD. CIT (A), WHO CONFIRMED THE ACTION OF THE AO BY OBSERVING AS UNDE R :- I HAVE GONE THROUGH AOS FINDING AND ASSESSEES SUBMISSION. ESTIMATION OF HOUSEHOLD EXPENSES AT RS. 1,20,000/- FOR A FAMILY OF FOUR MEMBERS INCLUDING TWO SCHOOL GOING CHILDREN WAS MOR E THAN REASONABLE. THEREFORE, ADDITION OF RS. 29,000/- IS CONFIRMED. 7. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 7.1. THE LD. A/R FOR THE ASSESSEE SUBMITTED THAT HO USEHOLD EXPENSES OF SINDHI FAMILIES ARE MUCH LESS IN COMPARISON TO FAMILIES OF OTHER COMMUNITIES. HE ESTIMATED THE HOUSEHOLD EXPENSES OF THE ASSESSEE AT RS. 78,00 0/-. THE LD. A/R FURTHER SUBMITTED THAT THE AO HAS PRESUMED THE HOUSEHOLD EX PENSES ON THE BASIS OF 9 ITA NO. 1031/JP/2013 MANGU MAL TEKWANI VS. ITO SURMISES AND CONJECTURES, WHICH IS NOT FAIR. THEREF ORE, HE REQUESTED TO DELETE THE ADDITION. 7.2. ON THE OTHER HAND, THE LD. D/R SUPPORTED THE O RDER OF LD. CIT (A). 7.3. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL ON RECORD. LOOKING TO THE COST INFLATION RAISED NOW A DAYS FOR KITCHEN/DOMESTIC ITEMS, SCHOOL FEES FOR TWO CHILDREN, BOOK, COPIES AND OTHER INCID ENTAL CHARGES, CLOTHING, SOCIAL OBLIGATIONS/FESTIVALS ETC., WE ARE OF THE VIEW THAT THE LD. CIT (A) WAS FAIR ENOUGH TO CONFIRM THE ESTIMATION OF HOUSEHOLD EXPENSES MADE B Y THE AO. WE, THEREFORE, CONFIRM THE ORDER OF LD. CIT (A). THE GROUND OF TH E ASSESSEE FAILS. 8. GROUND NO. 3 RELATES TO DISALLOWANCES ON ACCOUNT OF TELEPHONE/MOBILE EXPENSES. THE AO WHILE MAKING ASSESSMENT NOTED THA T THE ASSESSEE HAS DEBITED A SUM OF RS. 28,331/- TO THE PROFIT & LOSS ACCOUNT FO R THE TELEPHONE/MOBILE EXPENSES INCURRED. ON BEING ASKED TO PRODUCE THE DETAILS OF TELEPHONE/MOBILE CHARGES ON THE BASIS OF ACTUAL USE OF TELEPHONE, NO DETAILS WITH T ELEPHONE NUMBERS HAS BEEN PRODUCED FOR VERIFICATION. THEREFORE, IN ABSENCE OF THESE DETAILS, CONSIDERING THAT PERSONAL USE OF TELEPHONE/MOBILE CANNOT BE DENIED, HE DISALLOWED 20% OF THE EXPENSES WHICH COMES TO RS. 5666/- AND ADDED THE SA ME TO THE TOTAL INCOME OF THE ASSESSEE. 9. ON APPEAL, THE LD. CIT (A) CONFIRMED THE ACTION OF THE AO HOLDING THAT PERSONAL USE OF TELEPHONE/ MOBILE CANNOT BE RULED O UT. CONSIDERING THE FACTS OF THE CASE, HE WAS OF THE VIEW THAT DISALLOWANCE OF 20% O F THE TELEPHONE/MOBILE EXPENSES IS REASONABLE. 10 ITA NO. 1031/JP/2013 MANGU MAL TEKWANI VS. ITO 10. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 10.1. THE LD. A/R FOR THE ASSESSEE SUBMITTED THAT T HE TELEPHONES/MOBILES ARE USED FOR BUSINESS NOW A DAYS AND MOSTLY THE BUSINESS IS DEPENDED ON COMMUNICATION. ON A TURNOVER OF RS. 946.50 LACS, THE TELEPHONE/MOBILE EXPENSES INCURRED IS HARDLY 0.03% WHICH IS REASONABLE. HE, THEREFORE, REQUESTED TO DELETE THE ADDITION. 10.2. ON THE OTHER HAND, THE LD. D/R SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 10.3. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED T HE MATERIAL ON RECORD. THE ASSESSEE HAS NOT MAINTAINED ANY DETAILS FOR USAGE O F TELEPHONE/MOBILE. THEREFORE, PERSONAL USE OF TELEPHONE CANNOT BE RULED OUT. IT W ILL BE REASONABLE TO MAKE DISALLOWANCE @ 10% OF THE EXPENSES. WE THEREFORE RE STRICT THE DISALLOWANCE TO RS. 2833/-. 11. GROUND NO. 4 RELATES TO DISALLOWANCE ON ACCOUNT OF SHOP EXPENSES. DURING ASSESSMENT PROCEEDINGS, THE AO NOTED THAT THE ASSES SEE HAS DEBITED A SUM OF RS. 25,618/- TO THE PROFIT & LOSS ACCOUNT UNDER THE HEA D SHOP EXPENSES. THE AO HELD THAT VOUCHERS FOR THE EXPENSES INCURRED TOWARDS SHO P EXPENSES ARE NOT PROPERLY MAINTAINED, THE SAME ARE HAND WRITTEN AND, THEREFOR E, IN ABSENCE OF PROPER VOUCHERS, THE SAME ARE NOT VERIFIABLE. THUS THE AO MADE THE DISALLOWANCE OF RS. 5124/- @ 20%. 12. ON APPEAL, THE LD. CIT (A) CONFIRMED THE DISALL OWANCE HOLDING THAT CONSIDERING THE FACTS OF THE CASE AND NON-VERIFIABL E NATURE OF SHOP EXPENSES, SOME 11 ITA NO. 1031/JP/2013 MANGU MAL TEKWANI VS. ITO DISALLOWANCE CANNOT BE RULED OUT. THEREFORE, HE CON SIDERED IT REASONABLE TO CONFIRM THE DISALLOWANCE MADE BY AO @ 20%. 13. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 13.1. THE LD. A/R FOR THE ASSESSEE SUBMITTED THAT T HIS IS A VERY MEGRE EXPENDITURE, THE AO DISALLOWED THE EXPENSES FOR THE SAKE OF MAKI NG DISALLOWANCE OTHER-WISE FOR A TRADER WHOSE TURNOVER IS RS. 946.50 LACS, HAS ONLY INCURRED RS. 2135/- PER MONTH AS SHOP EXPENSES. THE LD. A/R REQUESTED TO DELETE THE DISALLOWANCE. 13.2. THE LD. D/R SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 13.3. WE HAVE GONE THROUGH THE RIVAL SUBMISSIONS AN D PERUSED THE MATERIAL ON RECORD. LOOKING TO THE FACTS AND NATURE OF BUSINES S OF THE ASSESSEE, WE DO NOT FIND IT REASONABLE TO MAKE DISALLOWANCE OF THIS PETTY AM OUNT OF RS. 5124/- ON ACCOUNT OF SHOP EXPENSES. WE, THEREFORE DELETE THE ADDITION. 14. GROUND NO. 5 RELATES TO DISALLOWANCE OUT OF VEH ICLE EXPENSES/DEPRECIATION ON VEHICLES. THE AO NOTED THAT THE ASSESSEE DEBITED A SUM OF RS. 1,73,581/- (VEHICLE EXPENSES RS 1,32,590/-, DEPRECIATION ON VEHICLE RS. 11,028/- AND DEPRECIATION ON CAR RS. 29,963/-) TO THE PROFIT & LOSS ACCOUNT FO R THE EXPENSES INCURRED ON VEHICLE /DEPRECIATION ETC. THE AO HELD THAT PERSONAL USE O F THE VEHICLES CANNOT BE RULED OUT BY THE ASSESSEE, THEREFORE, HE DISALLOWED 20% OF TH E EXPENSES/DEPRECIATION WHICH COMES TO RS. 34,716/- AND ADDED THE SAME TO THE TOT AL INCOME OF THE ASSESSEE. 15. ON APPEAL, THE LD. CIT (A) CONFIRMED THE ACTION OF THE AO BY OBSERVING THAT PERSONAL USE OF VEHICLES/CAR CANNOT BE RULED OUT. HOWEVER, THE SAME HAS TO BE 12 ITA NO. 1031/JP/2013 MANGU MAL TEKWANI VS. ITO REASONABLE. CONSIDERING THE FACTS OF THE CASE, IN M Y OPINION, A DISALLOWANCE OF 20% OF THE VEHICLE EXPENSES IS CONSIDERED REASONABLE. THEREFORE, THE DISALLOWANCE OF RS. 34,716/- (20%) IS UPHELD. 16. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 16.1. THE LD. A/R FOR THE ASSESSEE SUBMITTED THAT T HE CAR IS USED FOR COLLECTION OF CREDIT ALLOWED TO THE CUSTOMERS AND THE EXPENSES AR E HARDLY RS. 11,000/- PER MONTH WHICH IS REASONABLE. LIKE-WISE, DEPRECIATION ON CAR IS ALSO FOR THE PURPOSE OF BUSINESS. THERE IS ONE MOTOR CYCLE WHICH IS USED LO CALLY FOR BUSINESS PURPOSES. AS SUCH, EXPENSES ARE REASONABLE AND PRAYED THAT THE S AME MAY KINDLY BE ALLOWED. 16.2. THE LD. D/R SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 16.3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIAL ON RECORD. SINCE THE ASSESSEE HAS NOT MAINTAINED LOG BOOK/DETA ILS IN MAINTENANCE OF THESE VEHICLES, THEREFORE, PERSONAL USE OF THE VEHICLES/C AR CANNOT BE RULED OUT. THEREFORE, WE ARE OF THE VIEW THAT IT WILL BE REASONABLE TO RE STRICT THE DISALLOWANCE @ 10% WHICH COMES TO RS. 17,358/-. ASSESSEE WILL GET RELI EF OF BALANCE AMOUNT. 17. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/05/20 16. SD/- SD/- VH-VKJ-EHUK YFYR DQEKJ (T.R. MEENA) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30/05/2016 DAS/ 13 ITA NO. 1031/JP/2013 MANGU MAL TEKWANI VS. ITO VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI MANGU MAL TEKWANI, BUNDI. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO BUNDI. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 1031/JP/2013) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR