ACIT, Circle - 1, Paschim Medinipur V. Sri Kartick Chandra Dhar, Paschim Medinipur

ITA 1095/KOL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2550 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2010
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 14-04-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 24-06-2009
• Court: TRIBUNAL
• Department Lawyers: D R SINDHAL; PIYUSH KOLHE DRS
• Assessee Lawyers: S M SURANA
• Keywords: Depreciation; Income from undisclosed sources
• Section: 44AD; 40A(3)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH - A , KOLKATA ( ) BEFORE . . , SHRI B.R.MITTAL, JUDICIAL MEMBER. /AND . . , , SHRI C.D. RAO, ACCOUNTANT ME MBER . / I.T.A.NO. 1095/KOL/2009 / ASSESSMENT YEAR 2005 - 06 ACIT, CIRCLE 1, MIDNAPORE. - - - VERSUS - . SRI KARTICK CHANDRA DHAR, AUROBINDA NAGAR, P.O. MIDNAPORE, DIST. PASCHIM, MEDINIPUR. ACPPD 7849 H ( / A PPELLANT ) ( / RESPONDENT ) / I.T.A.NO.1165/KOL/2009 / ASSESSMENT YEAR 2005 - 06 SRI KARTICK CHANDRA DHAR, AUROBINDA NAGAR, P.O. MIDNAPORE, DIST. PASCHIM, MEDINIPUR. ACPPD 7849 H - - - VERSUS - . ACIT, CIRCLE 1, MIDNAPORE. ( / A PPELLANT ) ( / RESPONDENT ) / FOR THE DEPARTMENT : S/SHRI D.R.SINDHAL & PIYUSH KOLHE, DRS / FOR THE ASSESSEE : S.M.SURANA, AR / ORDER . . , SHRI B.R.MITTAL, JUDICIAL MEMBER. THE DEPARTMENT AND THE ASSESSEE HAVE FILED THESE CROSS APPEALS FOR THE ASSESSMENT YEAR 2005 - 06 AGAINST ORDER DT.25.3.2009 OF THE COMMISSIONER OF INCOME - TAX (APPEALS) ON THE FOLLOWING GROUNDS. GROUNDS OF APPEAL TAKEN BY THE DEPARTMENT : 1 .0. THE LD.CIT ( A) - XXXVII, KOLKATA[CIT(A)], HAS ERRED ON FACTS AND IN LAW IN DIRECTING THE ASSESSING OFFICER[AO] TO REJECT BOOKS OF ACCOUNTS AND ESTIMATE NET - PROFITS @5% OF THE GROSS - CONTRACT RECEIPTS; WHICH, HAS EFFECT OF DELETING ADDITIONS TO THE RETURNED TOTAL / I.T.A.NO.1095/KOL/2009 AND / I.T. A.NO.1165/KOL/2009 (CROSS APPEALS) 2 INCOME M ADE ON VARIOUS ISSUES AGGREGATING TO RS - 13875732. IN SO DECIDING THE CIT(A) HAS RELIED ON SUCH ACTION, PURPORTEDLY BY THE AC IN THE ASSESSEES CASE FOR THE AY:06 - 07. IN THE PROCESS THE CIT(A) HAS IGNORED THAT THE FACTS AND CIRCUMSTANCES OF THE CASE FOR THE AY:05 - 06 [ON HAND] ARE NEITHER IDENTICAL NOR SIMILAR TO THAT OF THE AY:06/07 RELIED ON. 1.1. ASSUMING BUT NOT ACCEPTING THAT ANY ESTIMATE OF NET - PROFITS ON GROSS - RECEIPTS EXCLUSIVE OF WORK - IN - PROGRESS COMPONENT WOULD BE INCORRECT AND INCOMPLETE. AND, IN THE CASE ON HAND THE ASSESSEE HAS NOT DISCLOSED VALUE OF THE WORK - IN - PROGRESS. 1.2. WITHOUT PREJUDICE, IT IS SUBMITTED THAT THE CIT(A) HAS IGNORED THAT, THE PROCEEDINGS FOR EACH AY IS INDEPENDENT UNDER THE ACT, UNLESS FACTS AND CIRCUMSTANCES OBTAINING, IN THE SUCCEEDING AY ARE IDENTICAL TO THE PRECEDING AY WHEREIN, A PARTICULAR KIND OF CONSIDERED TREATMENT IS GIVEN TO AN ISSUE AND ACCEPTED BY THE DEPARTMENT; WHEREAS, IT NOT SO IN THE CASE ON HAND. 2.0. THE CIT(A) HAS ERRED ON FACTS AND LAW IN DELETING THE VALUE OF WORK - IN - PROGRESS OF RS - 3872523 ASSES5ED BY THE AO ON THE BASIS OF REASONING WHILE, THE ASSESSEE HAD OMITTED TO INCLUDE THE VALUE OF WORK - IN - PROGRESS IN THE FINAL ACCOUNTS, PREPARED AND DISCLOSED FOR THE AY:05 - 06. THE SAME IS INCIDENTAL TO THE BUS INESS CARRIED ON BY THE ASSESSEE; AND, ACCORDINGLY, WAS REQUIRED TO BE DECLARED AS A PART OF CORRECT, TRUE AND COMPLETE DISCLOSURE OF FINAL ACCOUNTS. 3.0 THE CIT(A) HAS ERRED ON FACTS AND LAW IN DELETING THE DISALLOWANCE OF RS - 1434938, ESTIMATED @ 20% OUT OF TOTAL AMOUNT OF RS - 71 74693 OUTSTANDING LIABILITIES REFLECTED IN THE BALANCE - SHEET IN VIEW OF THE ASSESSEES INABILITY TO EXPLAIN THE SAME. AS A MATTER OF CORRECT DECISION THE ENTIRE AMOUNT IS LIABLE TO BE ASSESSED IN THE HANDS OF THE ASSESSEE. 4.0. T HE CIT(A) HAS ERRED ON FACTS AND LAW IN DELETING THE DISALLOWANCE OF EXPENSES OF RS - 3155812 MADE BY THE AO ON THE GROUNDS OF SAME BEING OF UNVERIFIABLE NATURE AS TO THEIR BUSINESS RELEVANCE. 5.0 THE CIT(A) HAS ERRED ON FACTS AND LAW IN DELETING THE DISALL OWANCE OF RS - 1369964 U/S - 40A(3) OF THE ACT MADE BY THE AO AFTER VERIFICATION AND ASCERTAINING THAT THE ASSESSEE HAD HAD CONTRAVENED THE PROVISIONS OF THE SEC - 40A(3) OF THE ACT. / I.T.A.NO.1095/KOL/2009 AND / I.T. A.NO.1165/KOL/2009 (CROSS APPEALS) 3 6.0. THE CIT(A) HAS ERRED ON FACTS AND LAW IN DELETING THE DISALLOWANCE OF LIC - INTEREST OF RS - 27283 MADE BY THE AO AFTER DUE VERIFICATIONS. 7.0. THE CIT(A) HAS ERRED ON FACTS AND LAW IN DELETING THE DISALLOWANCE OF MOTOR - CAR EXPENSES OF RS - 15212 ESTIMATED @ 10% OUT OF TOTAL AMOUNT OF RS - 152116 [RS - 67650 -- EXPENSES ON FUEL & LUBRICANT S + RS - 84466 AS DEPRECIATION] AS THE QUANTUM RELATABLE TO PERSONAL USAGE OF MOTOR - CAR AFTER ADDUCING REASONS THERE FOR. 8.0. THE CIT(A) HAS ERRED ON FACTS AND LAW IN DELETING THE ASSESSMENT OF RS - 4000000 [BEING THE TOTAL OF UNEXPLAINED ADVANCES GIVEN BY T HE TO SRI ASHIS DHAR & SMT. MITA DHAR FOR, THE ASSESSEE HAD NOT DISCLOSED THE SAME TO THE DEPARTMENT. 9.0. THE CIT(A) HAD ERRED ON FACTS IN RESTRICTING THE ADDITION RS.318685 TO RS - 50000, MADE ON ESTIMATED BASIS ON ACCOUNT OF LOW PERSONAL DRAWINGS, BY IGN ORING THE FACTS BROUGHT OUT BY THE AC IN EFFECTING THE SAME. WITHOUT PREJUDICE, IT IS URGED THAT, THE CIT(A} HAS ERRED IN CONSIDERING THIS ISSUE FOR ADJUDICATION AFTER DIRECTING THE AC TO REJECT THE BOOKS OF ACCOUNTS. 10.0. ON THE GROUNDS OF APPEAL URGED AS ABOVE, AND THOSE THAT WOULD BE URGED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ADVERSE ORDER OF THE CIT(A) BE REVERSED AND THAT OF THE AC BE RESTORED IN THE INTERESTS OF THE REVENUE. GROUNDS OF APPEAL TAKEN BY THE ASSESSEE : 1. FOR THAT THE ORDER OF THE LD. CIT(A) IS ARBITRARY, ILLEGAL, PERVERSE AND BAD IN LAW. 2. FOR THAT THE LD. CIT(A) ERRED IN DIRECTING THE A.O. TO TAKE THE NET PROFIT AT 5% WHEN HE SHOULD HAVE CONSIDERED THE INCREASE IN THE TURNOVER DURING THE YEAR IN THE CONTRACT BUSINESS. 3. FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.50,000 FOR DRAWINGS WHEN THE DRAWINGS DECLARED WERE SUFFICIENT TO MEET THE REQUIREMENTS OF THE ASSESSEE. EVEN OTHERWISE THE ADDITION MADE TOWARDS ESTIMATE OF PROFIT WAS SUFFICIENT TO MEET THE ADDITIONAL REQUIREMENTS ESTIMATED BY THE A.O. 4. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ORDER OF THE CIT(A) BE MODIFIED AND THE ASSESSEE BE GIVEN THE RELIEF PRAYED FOR. / I.T.A.NO.1095/KOL/2009 AND / I.T. A.NO.1165/KOL/2009 (CROSS APPEALS) 4 5. FOR THAT THE ASSESSEE CRAVES LEAVE TO ADD, ALTER OR AMEND ANY GR OUND BEFORE OR AT THE TIME OF HEARING. 2. THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ARE INTER CONNECTED WITH GROUND NO.1 AND GROUND NO.9 OF THE APPEAL TAKEN BY THE DEPARTMENT. 3. THE RELEVANT FACTS ARE THAT THE ASSESSEE IS A CONTRACTOR ENGAGED IN CO NSTRUCTION OF BUILDINGS. THE ASSESSEE FILED THE RETURN SHOWING THE NET INCOME OF RS.9,53,880. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS STATED THAT NOTICE U/S.142(1 ALONGWITH THE SPECIFIC REQUISITION WERE ISSUED AND SERVED ON T HE ASSESSEE. HOWEVER, THE ASSESSEE PRODUCED BOOKS OF ACCOUNT IN PART AND FILED WRITTEN SUBMISSION. THAT NO CASH BOOK WAS PRODUCED AND IN ABSENCE OF WHICH THE PAYMENTS COULD NOT BE VERIFIED. FURTHER THERE WAS NO PARTY LEDGER ACCOUNT TO SUBSTANTIATE TRANSACT IONS AS CLAIMED BY THE ASSESSEE. IT IS RELEVANT TO STATE THAT THE ASSESSING OFFICER MADE DISALLOWANCE WITH THE OBSERVATIONS AND THE SAME ARE SUMMARIZED BY THE LE ARNED CIT(A) IN HIS ORDER AT PAG ES 2 AND 3,WHICH READ AS UNDER : 1) THE AO NOTICED THAT THE AP PELLANT HAS NOT DISCLOSED WORK IN PROGRESS IN THE P&L ACCOUNT. THE APPELLANT SUBMITTED THAT THE BILLING IS DONE TAKING INTO ACCOUNT THE ENTIRE EXPENSES INCURRED FOR THE YEAR. IT WAS SUBMITTED THAT THE SYSTEM IS CONSISTENTLY FOLLOWED FOR EARLIER YEAR. THE A O ANALYSED THE EXPENSES CLAIMED BY THE APPELLANT TOWARDS LABOUR CHARGES, LOADING AND UNLOADING AND OTHER ITEMS. THE AO QUANTIFIED THE WORK IN PRO GRESS AT RS. 38,72,523/ - . THE A O MADE AN ADDITION OF RS. 38,72,523/ - FOR WORK IN PROGRESS. 2) THE AO NOTICED OU TSTANDING LIABILITIES FOR MATERIALS CARRYING CHARGES AND LABOUR CHARGES TO THE EXTENT OF RS. 7 1,74,6931 - . THE AO HELD THAT THE APPELLANT HAS NOT PRODUCED THE PARTY LEDGER FOR VERIFYING THE OUTSTA NDING LIABILITIES. HENCE, THE A O DISALLOWED 20% OF THE LIABI LITIES AMOUNTING TO RS. 14,34,938/ - . 3) THE AO EXAMINED THE EXPENSES CLAIMED BY THE APPELLANT FOR PURCHASES, CARRYING CH ARGES, WAGES, SALARY ETC. THE A O HELD THAT THE APPELLANT DID NOT PRODUCE SATISFACTORY EVIDENCES FOR THE EXPENSES. SINCE NO PROPER VOUCHE R IS / I.T.A.NO.1095/KOL/2009 AND / I.T. A.NO.1165/KOL/2009 (CROSS APPEALS) 5 MAINTAINED, THE AO DISALLOWED 10% OF THE EXPENSES AMOUNTING TO RS. 31,55,812/ - . 4) THE AO EXAMINED THE EXPENSES INCURRED BY THE APPELLANT. THE AO HELD THAT THE APPELLANT INCURRED SEVERAL EXPENSES IN CASH I N EXCESS OF RS. 20,000/ - . THE A O HELD THAT THE APPELLANT HAS CONTRAVENED THE P ROVISIONS OF SEC. 40A(3). THE A O MADE DISALLOWANCE OF 20% U/S. 40A(3) AMOUNTING TO RS. 13,69,964/ - . 5) THE AU EXAMINED THE INTEREST EXPENDITURE CLAIMED BY THE APPELLANT. THE APPELLANT CLAIMED TO HAVE TAKEN LOAN FROM LIC AND INVESTED IN BUSINESS. IN ABSENCE OF DETAILS THE AU DISALLOWED THE INTEREST PAID TO LIC OF RS. 27,283/ - . 6) THE AO NOTICED THAT THE APPELLANT TRANSFERRED AN AMOUNT OF RS.20 LAKHS EACH TO SRI ASHIS DHAR AND SMT. MITA DHAR FROM THE APPELLANTS BANK ACCOUNT HE LD WITH ALLAHABAD BANK. THE AO HELD THAT THE ADVANCES MADE TO THESE PERSONS ARE NOT DISCLOSED IN THE BALANCE SHEET. THE AO HELD THAT THE LOAN OF RS. 40 LAKHS ADVANCED TO THESE PERSONS IS NOT DISCLOSED IN THE BALANCE SHEET. THE AO MADE AN ADDITION OF RS. 40 LAKHS AS INCOME FROM UNDISCLOSED SOURCES. 4. THE LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AND IN VIEW OF THE ABOVE OBSERVATIONS MADE BY THE ASSESSING OFFICER HAS DIRECTED THE ASSESSING OFFICER TO REJECT THE BOOKS OF ACCOUNT OF THE ASSESSEE. FURTHER THE LEARNED CIT(A) CONSIDERING THE GROSS PROFIT RATE OF 5% APPLIED FOR THE ASSESSMENT YEAR 2006 - 07 OF THE GROSS RECEIPT, DIRECTED THE ASSESSING OFFICER TO ESTIMATE THE INCOME AT 5% OF THE GROSS RECEIPTS FOR THE ASSESSMENT YEAR UNDER CONS IDER ATION AND NO SEPARATE ADDITIONS MADE BY THE ASSESSING OFFICER ARE NECESSARY. THE RELEVANT PART OF THE ORDER OF THE LEARNED CIT(A) AT PAGE 4 OF HIS ORDER, READS AS UNDER : 4. .. IN VIEW THESE OBSERVATIONS AND THE NON - MAINTENANCE OF BOOKS OF ACCOUNT IN THE PROPER MANNER, THE APPELLANTS INCOME CANNOT BE DETERMINED ON THE BASIS OF BOOKS OF ACCOUNT PRESENTED. FURTHER, SINCE THE ADVANCES MADE ARE NOT CONSIDERED IN THE BALANCE SHEET AND THE PARTY LEDGER IS NOT PRODUCED TO VERIFY THE OUTSTANDING BALANCES AND THE EXPENSES, THE ACCOUNTS ARE NOT RELIABLE FOR ARRIVING AT THE CORRECT INCOME OF THE APPELLANT. IN VIEW OF THE VARIOUS OBSERVATIONS MADE BY THE AO REGARDING THE DEFECTS IN THE BOOKS OF ACCOUNT OF THE APPELLANT, THIS IS A FIT CASE FOR REJECTING THE BOO KS OF ACCOUNT U/S. 145(3) OF THE IT ACT. THE AO IS DIRECTED TO REJECT THE BOOKS OF / I.T.A.NO.1095/KOL/2009 AND / I.T. A.NO.1165/KOL/2009 (CROSS APPEALS) 6 ACCOUNT OF THE APPELLANT. IT IS SEEN THAT THE AU IN THE ASSESSMENT YEAR 2006 - 07 HAS REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE APPELLANTS PROFIT AT 5% OF THE GROSS REC EIPTS. CONSIDERING THIS, THE AU IS DIRECTED TO REJECT THE BOOKS OF ACCOUNT OF THE APPELLANT AND ESTIMATE THE INCOME OF THE APPELLANT AT 5% OF THE GROSS RECEIPTS. DETERMINING INCOME ON THIS BASIS WOULD MEET THE ENDS OF JUSTICE. SINCE INCOME OF THE APPELLANT IS ESTIMATED AT 5% OF THE GROSS RECEIPTS, THESE SEPARATE ADDITIONS MADE BY THE AO ARE NOT NECESSARY. IT IS FURTHER RELEVANT TO STATE THAT THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAS SHOWN DRAWINGS FROM CAPITAL FOR AN AMOUNT OF RS.6,91,701. THE ASSESSEE HAS MADE ADJUSTMENT FOR RS.1,14,120 AS NSC INTEREST, INCOME TAX ADJUSTMENT FOR RS. 2,02,581 AND LIP FOR RS.2,54,114,LEAVING BALANCE OF RS.1,20,886. THE ASSESSING OFFICER HAS STATED THAT FROM THE BANK STATEMENT IT IS SEEN THAT THE ASSESSEE HAD P AID LIP OF RS.1 0,718 U/S.80CC AND MADE FURTHER PAYMENTS ALSO WHICH COULD BE SEEN FROM THE BANK STATEMENT, THE DETAILS OF WHICH HAS BEEN GIVEN AT PAGE 5 OF THE ASSESSMENT ORDER AS UNDER : IN VIEW OF THE ABOVE, THE ASSESSING OFFICER HAS STATED THAT THE T OTAL PAYMENTS TO LIP COMES TO RS.1,39,571. THE ASSESSING OFFICER HAS STATED THAT THE ASSESSEES FAMILY CONSIST OF FOUR MEMBERS WITH HIS WIFE AND TWO SCHOOL GOING DAUGHTERS AND ALL OF THEM ARE DEPENDENT UPON THE ASSESSEE. THE ASSESSEE HAS STATED AVERAGE EXP ENSES FOR FAMILY MAINTENANCE OF RS.10,000 PER MONTH. SINCE THE ASSESSEE HAS NOT SUBMITTED ANY OTHER DETAILS OF EXPENSES FOR THE DAUGHTERS EDUCATION OR IN RESPECT OF OTHER PAYMENTS FOR FAMILY EXPENSES, THE ASSESSING OFFICER CONSIDERING THE STATUS OF THE AS SESSEE ESTIMATED THE FAMILY EXPENSES AT RS.25,000 PER MONTHS. THEREFORE, THE ASSESSING OFFICER FOUND A DEFICIT OF DRAWINGS AT RS.4,39,371 I.E., RS.3 LAKHS OUT OF FAMILY EXPENSES AND RS.1,39,571 TOWARDS PAYMENT OF LIP. THE / I.T.A.NO.1095/KOL/2009 AND / I.T. A.NO.1165/KOL/2009 (CROSS APPEALS) 7 ASSESSING OFFICER AFTER ADJUSTING RS.1,20,886 CONSIDERING THE BALANCE AMOUNT OF RS.3,18,685 AS THE INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCE FOR METING FAMILY EXPENSES AND PAYMENTS OF LIP. HOWEVER, IN THE FIRST APPEAL, THE LEARNED HAS RESTRICTED THE ADDITION TO RS.50,000 TOWARDS DRAWI NGS AND HAS GIVEN RELIEF TO THE ASSESSEE OF RS.2,68,685 ( RS.3,18,685 RS.50,000). 5. IN VIEW OF THE ABOVE, THE DEPARTMENT AS WELL AS THE ASSESSEE HAVE FILED APPEALS BEFORE THE TRIBUNAL. 6. BEFORE WE TAKE UP THE GROUNDS OF APPEAL FOR OUR CONSIDERATION, IT IS RELEVANT TO STATE THAT NEITHER THE DEPARTMENT NOR THE ASSESSEE HAVE DISPUTED THE FINDINGS OF THE LEARNED CIT(A) DIRECTING THE ASSESSING OFFICER TO REJECT THE BOOKS OF ACCOUNT OF THE ASSESSEE. HOWEVER, THE DEPARTMENT JUSTIFIED THE REJECTION OF BOOKS OF ACCOUNT OF THE ASSESSEE BUT H AS CONTENDED IN THE GROUNDS OF APPEAL AS WELL AS AT THE TIME OF MAKING SUBMISSIONS BEFORE US THAT THE SPECIFIC ADDITIONS MADE BY THE ASSESSING OFFICER SHOULD BE CONFIRMED. 7. DURING THE COURSE OF HEARING, THE LEARNED DR SUBMITT ED THAT THE LEARNED CIT(A) HAS NOT REFUTED THE FINDING OF THE LEARNED ASSESSING OFFICER THAT THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE ARE NOT PROPER AND REQUISITE DETAILS WERE NOT FILED BY THE ASSESSEE TO ENABLE HIM TO VERIFY THE EXPENSES CLAIMED. T HE LEARNED DR SUBMITTED THAT IN VIEW OF THE DEFECTS POINTED OUT BY THE ASSESSING OFFICER, THE ASSESSING OFFICER WAS JUSTIFIED TO MAKE THE SPECIFIC ADDITIONS AND THE LEARNED CIT(A) SHOULD HAVE CONFIRMED THE SAME. THE LEARNED DR IN HIS SUBMISSION POINTED OUT THE DEFECTS WHICH WERE POINTED OUT BY THE ASSESSING OFFICER AND HAVE ALSO BEEN SUMMARIZED BY THE LEARNED CIT(A) IN HIS ORDER AS MENTIONED HEREIN ABOVE IN PARAGRAPH 3 OF THIS ORDER, AND SUBMITTED THAT THE LEARNED CIT(A) HAS COMMITTED A GLARING MISTAKE IN N OT MAKING THE SPECIFIC ADDITIONS BUT TO DIRECT THE ASSESSING OFFICER TO ESTIMATE THE ASSESSEES PROFIT @5% ON THE BASIS OF GP ESTIMATED IN THE ASSESSMENT YEAR 2006 - 07.IT IS RELEVANT TO STATE THAT THE LEARNED DR HAS ALSO FILED A WRITTEN SUBMISSION AND THE S AME HAS BEEN CONSIDERED BY US. 8. DURING THE COURSE OF HEARING, THE LEARNED DR ALSO MENTIONED FROM THE SAID WRITTEN SUBMISSION THAT THE REJECTION OF BOOKS OF ACCOUNT BY THE DEPARTMENT IS MANDATORY IN VIEW OF THE OBSERVATIONS MADE BY THE ASSESSING OFFICER A ND HAS / I.T.A.NO.1095/KOL/2009 AND / I.T. A.NO.1165/KOL/2009 (CROSS APPEALS) 8 STATED A NUMBER OF CASES MENTIONED IN THE WRITTEN SUBMISSION. IN THIS RESPECT WE MAY STATE THAT THE CASES CITED BY THE LEARNED DR IN THE SAID WRITTEN SUBMISSION DO NOT REQUIRE CONSIDERATION SPECIFICALLY WHEN THE REJECTION OF BOOKS OF ACCOUNT BY THE LEARNED CIT(A) IS NOT IN DISPUTE EITHER BY THE DEPARTMENT OR BY THE ASSESSEE. THEREFORE, WE DO NOT CONSIDER NECESSARY TO DISCUSS THOSE CASES. THE SAID FINDING OF THE LEARNED CIT(A) IS CONFIRMED HOLDING THAT THE BOOKS OF ACCOUNT OF ASSESSEE HAVE RIGHTLY BEE N REJECTED FOR THE ASSESSMENT YEAR UNDER CONSIDERATION IN VIEW OF THE DEFECTS AND OBSERVATIONS MADE BY THE ASSESSING OFFICER AT THE TIME OF MAKING THE ASSESSMENT. 9. THE LEARNED DR IN HIS SUBMISSIONS VEHEMENTLY ARGUED THAT THE SPECIFIC ADDITIONS MADE BY TH E ASSESSING OFFICER SHOULD BE CONFIRMED. 10. ON THE CONTRARY, THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT WHEN THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE REJECTED AND THE GROSS PROFIT RATE IS ESTIMATED, NO OTHER ADDITIONS BY MAKING SPECIFIC DISALLOWANCE OF THE EXPENSES/CREDITORS LIABILITY COULD BE MADE AS THE BOOKS OF ACCOUNT ARE NOT TO BE CONSIDERED IN MAKING THE SPECIFIC DISALLOWANCE. THE LEARNED AR OF THE ASSESSEE, IN SUPPORT OF HIS SUBMISSIONS, PLACED RELIANCE S ON THE DECISION OF HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF INDWELL CONSTRUCTIONS V. CIT ( 232 ITR 776 ), THE DECISION OF THE SPECIAL BENCH OF ITAT IN THE CASE OF ITO V.KENARAMSAHA & OTHERS [(2008) 301 ITR 171 (AT).THE LEARNED AR OF THE ASSESSEE FURTHER SUBMITTED THAT THE NET PRO FIT RATE OF 5% AS DIRECTED TO BE APPLIED IS EXCESSIVE. HE FURTHER SUBMITTED THAT EVEN IF THE 5% GROSS PROFIT RATE IS APPLIED, THE DEPRECIATION AND INTEREST SHOULD BE ALLOWED AS DEDUCTION OUT OF THE GROSS PROFIT SO COMPUTED. THE LEARNED AR OF THE ASSESSEE H AS ALSO FILED WRITTEN SUBMISSIONS. THE LEARNED AR OF THE ASSESSEE TO SUBSTANTIATE HIS SUBMISSION THAT THE DEPRECIATION AND INTEREST SHOULD BE ALLOWED OUT OF THE GP RATE AS APPLIED , PLACED RELIANCE ON THE DECISION OF THE ITAT, JODHPUR BENCH IN THE CASE OF ACIT VS. PADAM CHANDBHANSALI [ (2004) 85 TTJ (JD) 21 ] . 11 . WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LEARNED REPRESENTATIVES OF THE PARTIES AND THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO CAREFULLY GONE THROUGH THE WRITTEN SUBMISSIONS FILED BY THE LEARNED DR AS WELL AS THE LEARNED AR OF THE ASSESSEE AND THE CASES CITED THEREIN. / I.T.A.NO.1095/KOL/2009 AND / I.T. A.NO.1165/KOL/2009 (CROSS APPEALS) 9 12 . AS MENTIONED HEREIN ABOVE THAT THE ASSESSING OFFICER MADE CERTAIN OBSERVATIONS POINTING OUT THE DEFECTS IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND MADE SPECIFIC ADDITIONS BY MAKING DISALLOWANCE. SINCE THE REJECTION OF BOOKS OF ACCOUNT OF THE ASSESSEE HAVE NOT BEEN DISPUTED EITHER BY THE DEPARTMENT OR BY THE ASSESSEE, WE CONFIRM THE ORDER OF THE LEARNED CIT(A) IN REJECTING THE BOOK RESULT AND TO APPLY THE NET PROFI T RATE OF GROSS RECEIPTS. 13 . THEN FIRSTLY THE QUESTION COMES AS TO WHETHER ANY SPECIFIC ADDITION ARE REQUIRED TO BE MADE AS CONTENDED BY THE LEARNED DR OVER AND ABOVE THE GROSS PROFIT RATE AS ESTIMATED. WE ARE OF THE CONSIDERED VIEW THAT WHEN THE GP RATE IS APPLIED BY REJECTING THE BOOKS RESULT, NO FURTHER ADDITION BY MAKING DISALLOWANCE OUT OF THE EXPENSES CLAIMED BY THE ASSESSEE ARE REQUIRED TO BE MADE BECAUSE THE BOOKS OF ACCOUNT COULD NOT BE RELIED FOR THE PURPOSE OF COMPLETING THE ASSESSMENT OF THE AS SESSEE. THE SIMILAR ISSUE WAS CONSIDERED BY HONBLE ALLAHABAD HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. BANWARILAL BANSHIDHAR [ (1998) 229 ITR 229 (ALL) ], WHEREIN IT WAS HELD THAT WHEN THE INCOME OF THE ASSESSEE WAS COMPUTED BY APPLYING THE G ROSS PROFIT RATE, NO FURTHER ADDITION U/S.40A(3) OF THE ACT WAS WARRANTED. IT WAS HELD THAT WHEN THE GP RATE WAS APPLIED, THAT WOULD TAKE CARE OF EVERYTHING AND THERE IS NO NEED FOR THE ASSESSING OFFICER TO MAKE SCRUTINY OF THE ACCOUNT OF PURCHASES INCURRE D BY THE ASSESSEE. FURTHER, HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF INDWELL CONSTRUCTIONS VS. COMMISSIONER OF INCOME TAX [ (1998) 232 ITR 776 (AP) ] ALSO HELD THAT WHERE THE BOOKS OF ACCOUNT HAVE BEEN REJECTED, THE REVENUE COULD NOT RELY ON THE SAM E BOOKS FOR DISALLOWANCE AND ADDITION OF SPECIFIC ITEM OF EXPENDITURE. 1 4 . CONSIDERING THE ABOVE DECISIONS AND THE FACTS OF THE CASE BEFORE US WE HOLD THAT NO FURTHER ADDITION BY MAKING DISALLOWANCE ARE WARRANTED WHEN THE GROSS PROFIT RATE OF GROSS RECEIPT S ARE APPLIED AFTER REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE IN THE ASSESSMENT YEAR UNDER CONSIDERATION. 15 . NOW THE QUESTION COMES AS TO WHETHER THE GP RATE AT 5% APPLIED IS REASONABLE AND IF SO WHETHER ANY FURTHER DEDUCTION ON ACCOUNT OF DEPRECIATI ON AND INTEREST IS TO BE MADE OUT OF THE GP SO ESTIMATED. / I.T.A.NO.1095/KOL/2009 AND / I.T. A.NO.1165/KOL/2009 (CROSS APPEALS) 10 16 . WE OBSERVE THAT IN THE SUCCEEDING ASSESSMENT YEAR I.E., ASSESSMENT YEAR 2006 - 07 THE GP RATE OF 5% WAS APPLIED AFTER REJECTING THE BOOKS RESULT. THE LEARNED AR OF THE ASSESSEE HAS NOT DISPUTED TH E ABOVE FACT. FURTHER HONBLE APEX COURT HAS ALSO HELD IN THE CASE OF DHAKESWARI COTTON MILLS LIMITED V. COMMISSIONER OF INCOME TAX, WEST BENGAL ( 26 ITR 775) THAT WHEN THE BOKS OF ACCOUNT ARE REJECTED, IT DOES NOT GIVE UNFETTERED POWER TO ESTIMATE THE INC OME. THERE MUST BE SOMETHING TO SUPPORT THE ESTIMATE. HONBLE CALCUTTA HIGH COURT HAS ALSO HELD IN THE CASE OF COMMISSIONER OF INCOME TAX V. RANICHERRA TEA CO. LIMITED ( 207 ITR 979) THAT ALTHOUGH THE ASSESSING OFFICER IS NOT BOUND BY STRICT JUDICIAL PRIN CIPLE IN MAKING BEST JUDGEMENT ASSESSMENT, HE DOES NOT POSSESS ABSOLUTE AUTHORITY TO ASSESS ANY FIGURE AS HE LIKES. IN THE CASE BEFORE US, THE LEARNED AR OF THE ASSESSEE HAS NOT DISPUTED THE FACT THAT IN THE SUBSEQUENT ASSESSMENT YEAR I.E., ASSESSMENT YEAR 2006 - 07 WHEN THE BOOKS OF ACCOUNTS WERE REJECTED, GROSS PROFIT @5% OF THE GROSS RECEIPTS WAS APPLIED AND IT IS OBSERVED THAT THE SAME HAS NOT BEEN DISPUTED BY THE ASSESSEE. CONSIDERING THE ABOVE FACT, WE ARE OF THE CONSIDERED VIEW THAT THE LEARNED CIT(A) IS JUSTIFIED TO DIRECT THE ASSESSING OFFICER TO APPLY GROSS PROFIT RATE OF 5% OF THE GROSS CONTRACT RECEIPTS WHILE COMPUTING THE PROFIT OF THE ASSESSEE. 17 . NOW THE QUESTION COMES AS TO WHETHER OUT OF THE GROSS PROFIT SO ESTIMATED @5% , FURTHER DEDUCTION O N ACCOUNT OF DEPRECIATION AND INTEREST ARE TO BE ALLOWED. DURING THE COURSE OF HEARING, THE LEARNED AR OF THE ASSESSEE PLACED RELIANCE ON THE DECISION OF THE ITAT, JODHPUR BENCH IN THE CASE OF ACIT VS. PADAM CHAND BHANSALI [ (2004) 85 TTJ (JD) 21 ] THAT WHI LE APPLYING NET PROFIT RATE OF 5%, IT IS SUBJECT TO DEDUCTION OF DEPRECIATION AND INTEREST. WE ARE OF THE CONSIDERED VIEW THAT WHEN THE NET PROFIT RATE IS APPLIED, IT IS APPLIED BY CONSIDERING THE FACTS OF THE CASE OF THE PARTICULAR ASSESSEE. IN CASE THE I NCOME IS ESTIMATED OUT OF WHICH ANY DEDUCTION IS TO BE GIVEN ON ACCOUNT OF DEPRECIATION AND INTEREST ETC., IT DEPENDS UPON THE FACTS OF THE CASE. WE ARE OF THE CONSIDERED VIEW THAT IN THE CASE BEFORE US, WHEN NET PROFIT %5% OF THE GROSS RECEIPTS IS CONSIDE RED, NO FURTHER DEDUCTION ON ACCOUNT OF DEPRECIATION AND INTEREST IS TO BE GIVEN AND THIS 5% GROSS PROFIT IS THE RATE OF NET PROFIT OF THE GROSS RECEIPTS OF THE ASSESSEE. IN THIS RESPECT, WE ARE / I.T.A.NO.1095/KOL/2009 AND / I.T. A.NO.1165/KOL/2009 (CROSS APPEALS) 11 SUPPORTED BY SECTION 44AD OF THE INCOME - TAX ACT,19 61 ACCORDIN G TO WHICH WHEN THE GP RATE OF 8% OF THE GROSS RECEIPTS IS APPLIED IT IS STATED THAT IT WILL TAKE CARE OF ALL THE DEDUCTION ALLOWABLE U/SS.30 TO 37 OF THE ACT AND NO FURTHER DEDUCTION ON ACCOUNT OF DEPRECIATION IS TO BE ALLOWED. FURTHER, AS MENTIONED HEREI N ABOVE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT 5% NET PROFIT OF THE GROSS RECEIPTS OF THE ASSESSEE IS JUSTIFIED AND REASONABLE AND THEREFORE, WE HOLD THAT NO FURTHER DEDUCTION ON ACCOUNT OF DEPRECIATION AND INTEREST AS CONTENDED BY THE LEARNED AR OF THE ASSESSEE IS WARRANTED. 18 . IN VIEW OF THE ABOVE, WE REJECT GROUND NO. 1 TO 7 OF THE APPEAL TAKEN BY THE DEPARTMENT AND ALSO GROUND NO.2 OF THE APPEAL TAKEN BY THE ASSESSEE. 19 . NOW WE TAKE UP GROUND N O .8 TAKEN BY THE DEPARTMENT AS TO WHETHER THE ADDITION OF RS.40,00,000 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED ADVANCE GIVEN TO SHRI ASHISH DHAR AND SMT. MITA DHAR IS JUSTIFIED OR NOT. 20 . THE ASSESSING OFFICER HAS STATED THAT FROM THE BANK STATEMENT OF ALL AHABAD BANK ACCOUNT NO.19 OF MIDNAPORE BRANCH HE FOUND THAT THERE WAS CASH DEPOSIT OF RS.30 LAKHS ON 2.4.2005. THE ASSESSING OFFICER HAS STATED THAT THE ASSESSEE HAD CASH IN HAND ON 31.3.2005 FOR RS.83,361 ONLY. THE ASSESSING OFFICER HAS STATED THAT THERE WAS APPARENTLY NO SOURCE OF SUCH CASH WITHIN TWO DAYS OF LAST YEARS CLOSING. THE ASSESSING OFFICER HAS STATED THAT ON QUERY, THE ASSESSEE EXPLAINED THAT THE SAID CASH WAS RECEIVED FROM ASHISH DHAR AND SMT. MITA DHAR, WHICH WERE ADVANCED DURING THE FY 200 4 - 05. THE ASSESSING OFFICER HAS STATED THAT FROM THE BANK STATEMENT IT IS SEEN THAT THE ASSESSEE HAD GIVEN TO BOTH OF THEM ON 31.3.2005 RS.20 LAKHS EACH (RS.15 LAKHS + RS.5 LAKHS) BUT THE SAME WAS NOT SHOWN IN THE BALANCE SHEET AS LOAN ADVANCED. FURTHER THE ASSESSEE STATED BEFORE THE A.O. THAT HE HAD GIVEN THE AMOUNT OF RS.20 LAKHS EACH TO SRI ASHISH DHAR AND SMT. MITA DHAR AND THIS WAS NOT REALITY OF FACT. IT IS PAPER WORK. THAT ALLHABAD BANK HAS DONE THESE TRANSACTIONS FOR BANKS INTEREST. THE ASSESS ING OFFICER DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND HAS STATED THAT FROM THE BANK STATEMENT IT IS SEEN THAT THE ASSESSEE PAID THEM BY CHEQUE NO.463001, 450400, 45893 AND 45892.THE ASSESSING OFFICER HAS STATED THAT THE QUESTION OF SUO - MOTU TRANSFE R BY THE BANK / I.T.A.NO.1095/KOL/2009 AND / I.T. A.NO.1165/KOL/2009 (CROSS APPEALS) 12 DOES NOT ARISE. THE ASSESSING OFFICER HAS STATED THAT AFTER MAKING SUCH PAYMENTS, THERE WAS OVER DRAFT BALANCE FOR RS.20,15,543 AND IT WAS SHOWN IN THE BALANCE SHEET. THE ASSESSING OFFICER HAS STATED THAT THE ASSESSEE COULD NOT EXPLAIN THE OTHER ASSET IN THE BALANCE SHEET TO THE EXTENT OF RS.40 LAKHS AND ACCORDING ADDED THE SAID AMOUNT TO THE TOTAL INCOME OF THE ASSESSEE AS INCOME FROM UNDISCLOSED SOURCE. IN APPEAL, THE LEARNED CIT(A) HAS DELETED THE SAME IN VIEW OF THE FACT THAT HE HAS DIRECTED T HE ASSESSING OFFICER TO APPLY 5% GROSS PROFIT OF GROSS RECEIPTS. HENCE, THE DEPARTMENT IS IN APPEAL BEFORE THE TRIBUNAL. 21 . THE LEARNED DR SUBMITTED THAT THE FACTS STATED BY THE ASSESSEE THAT THE SAID AMOUNT OF RS.40 LAKHS WAS MERELY TRANSFER BY THE BANK IS A CONCOCTED STORY. HE SUBMITTED THAT EVEN IF THE GP IS ESTIMATED, THE ADDITION ON ACCOUNT OF CASH CREDIT COULD BE MADE SEPARATELY AND IN SUPPORT OF HIS SUBMISSIONS, THE LEARNED DR PLACED RELIANCE ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF COMM ISSIONER OF INCOME TAX, UTTAR PRADESH V. DEVI PRASAD VISHWANATH PRASAD ( 72 ITR 194), THE DECISION OF HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX, A. P. V.MADURI RAJAIAHGARI KISTAIAH (120 ITR 294), THE DECISION OF HONBLE APEX COURT IN THE CASE OF KALE KHAN MOHAMMAD HANIF V.COMMISSIONER OF INCOME - TAX ( 50 ITR 1 ), THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF D. C. AUDDY AND BROTHERS V. COMMISSIONER OF INCOME TAX, WEST BENGAL (28 ITR 713) AND THE DECISI ON OF HONBLE KERALA HIGH COURT IN THE CASE OF S. KUMARASWAMI REDDIAR V.COMMISSIONER OF INCOME TAX (40 ITR 590). HE SUBMITTED THAT EVEN IF THERE IS AN ESTIMATION OF BUSINESS PROFIT, FURTHER ADDITION ON BANK DEPOSITS OR CASH CREDITS COULD BE MADE AS INCOM E OF THE ASSESSEE FROM UNDISCLOSED SOURCES. THE LEARNED DR SUBMITTED THAT THE ORDER OF THE ASSESSING OFFICER TO MAKE THE SAID ADDITION OF RS.40 LAKHS SHOULD BE CONFIRMED. 22 . THE LEARNED AR OF THE ASSESSEE, ON THE OTHER HAND, REFERRED TO PAGES 21 TO 23 OF THE PAPER BOOK WHICH IS A COPY OF THE BANK STATEMENT AND SUBMITTED THAT THE BANK DEBITED T HE ACCOUNT OF THE ASSESSEE ON 31 .3.2005 BY RS.40 LAKHS I.E., RS.20 LAKHS EACH TO SHRI ASHISH DHAR AND SMT. MITA DHAR BY WAY OF TRANSFER AND SUBSEQUENTLY CREDITED TO T HE ACCOUNT OF THE ASSESSEE. HE SUBMITTED THAT THERE WAS NO CASH CREDIT AND THE SAID TRANSACTION WAS FROM THE DISCLOSED BANK ACCOUNT OF THE / I.T.A.NO.1095/KOL/2009 AND / I.T. A.NO.1165/KOL/2009 (CROSS APPEALS) 13 ASSESSEE . THE LEARNED AR OF THE ASSESSEE FURTHER SUBMITTED THAT THE SAID TRANSACTIONS WERE DONE BY THE BANK SUO - MOTU . HE FURTHER SUBMITTED THAT WHEN THE BOOKS OF ACCOUNT OF THE ASSESSEE HAVE BEEN REJECTED, THE BALANCE SHEET OF THE ASSESSEE COULD NOT BE RELIED UPON. THE LEARNED AR OF THE ASSESSEE FURTHER SUBMITTED THAT THE DECISIONS CITED BY THE LEARNED DR ARE NOT APPLICA BLE TO THE CASE OF THE ASSESSEE AS THERE WAS NO CASH CREDIT BY WAY OF LOAN TO SHRI ASHISH DHAR AND SMT. MITA DHAR. 23. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE LEARNED REPRESENTATIVES AND THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO PERUSED THE SAID BANK STATEMENT PLACED AT PAGES 21 TO 23 OF THE LPB. WE DO OBSERVE THAT THERE WAS TRANSFER OF RS.20 LAKHS EACH FROM THE ACCOUNT OF THE ASSESSEE WITH ALLAHABAD BANK. AS FAR AS THE ISSUE AS TO WHETHER ANY SEPARATE ADDITION COULD BE MADE IN RELATION TO L OAN AMOUNT GIVEN BY ASSESSEE AND WHEN THE INCOME OF THE ASSESSEE IS ESTIMATED, WE ARE OF THE CONSIDERED VIEW THAT THE CONTENTION OF THE EARNED DR HAS MERIT THAT SEPARATE ADDITION COULD BE MADE IN RESPECT OF UNEXPLAINED LOANS. HONBLE APEX COURT AS WELL AS HONBLE HIGH COURTS IN THE CASES CITED (SUPRA) HAVE HELD EVEN IF THE BOOKS OF ACCOUNT OF ASSESSEE ARE NOT BELIEVED AND THE SAME ARE REJECTED AND THE INCOME OF THE ASSESSEE IS ESTIMATED ON GROSS TURNOVER, FURTHER ADDITION OF CASH CREDITS AS INCOME FROM UNDI SCLOSED SOURCES COULD BE MADE AS INCOME FROM UNDISCLOSED SOURCES. 2 4 . IN THE CASE BEFORE US, WE OBSERVE ON PERUSAL OF THE COPIES OF BANK STATEMENTS PLACED AT PAGES 15 TO 18 OF THE PB THAT ALLAHABAD BANK DEBITED THE SAID AMOUNT AGGREGATING TO RS.40 LAKHS TO SHRI ASHISH DHAR AND SMT. MITA DHAR OF RS.20 LAKHS EACH AND THEREAFTER THE SAID AMOUNT WAS CREDITED TO THE ASSESSEES ACCOUNT BY DEBITING THE ACCOUNTS OF SHRI ASHISH DHAR AND SMT. MITA DHAR ON 2.4.2005. THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT ALL TH E AFORESAID BANK ACCOUNTS ARE DISCLOSED BANK ACCOUNTS OF THE ASSESSEE AS WELL AS OF SHRI ASHISH DHAR AND SMT. MITA DHAR AND THERE WERE NO UNDISCLOSED TRANSACTIONS IN RESPECT OF THE SAID AMOUNT AGGREGATING TO RS.40 LAKHS. WE ALSO OBSERVE THAT THE SAID AMOUN T AGGREGATING TO RS. 40 LAKHS IS NOT A CREDIT IN THE BOOKS OF ACCOUNT OF THE ASSESSEE BUT THE AMOUNT WAS DEBITED IN THE ASSESSEES DISCLOSED BANK ACCOUNT AND THEREFORE, / I.T.A.NO.1095/KOL/2009 AND / I.T. A.NO.1165/KOL/2009 (CROSS APPEALS) 14 THE ASSESSING OFFICER WAS NOT JUSTIFIED TO MAKE THE ADDITION U/S.68 OF THE ACT OF THE S AID AMOUNT AGGREGATING TO RS.40 LAKHS. WE HOLD THAT THE LEARNED CIT(A) HAS RIGHTLY DELETED THE SAME. HENCE, GROUNDNO.8 OF THE APPEAL TAKEN BY THE DEPARTMENT IS REJECTED BY CONFIRMING THE ORDER OF THE LEARNED CIT(A). 2 5 . IN RESPECT OF GROUND NO.9 OF THE APP EAL TAKEN BY THE DEPARTMENT AND ALSO GROUND NO.3 OF THE APPEAL TAKEN BY THE ASSESSEE ON ACCOUNT OF ADDITIONS/DELETION MADE FOR DRAWINGS, WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. 2 6 . WE A RE OF THE CONSIDERED VIEW THAT CONSIDERING THE STATUS OF THE ASSESSEE AND CONSIDERING THE FACT THAT THE ASSESSEES FAMILY CONSISTS OF HIS WIFE AND TWO SCHOOL GOING DAUGHTERS AND ALSO CONSIDERING THAT AFTER MAKING ADJUSTMENT THE DRAWINGS SHOWN BY THE ASSESS EE FROM HIS CAPITAL ACCOUNT LEFT FOR KEEPING THE FAMILY EXPENSES OF RS.1,20,886, IT WILL BE REASONABLE AND JUSTIFIABLE TO RESTRICT THE ADDITION TO RS.1,00,000 TOWARDS DRAWINGS AS AGAINST RS.3,18,685 MADE BY THE ASSESSING OFFICER AND RESTRICTED TO RS.50,00 0 BY THE LEARNED CIT(A). WE, THEREFORE, MODIFY THE ORDERS OF THE AUTHORITIES BELOW ACCORDINGLY. THEREFORE, GROUND NO.9 TAKEN BY THE DEPARTMENT IS ALLOWED IN PART AND WHEREAS GROUND NO.3 OF THE APPEAL TAKEN BY THE ASSESSEE IS DISMISSED. 27 . IN THE RESULT, TH E APPEAL OF THE DEPARTMENT IS ALLOWED IN PART AND WHEREAS THE APPEAL OF THE ASSESSEE IS DISMISSED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 25.06.2010 SD/ - SD/ - ( . . ) (C.D. RAO), ACCOUNTANT MEMBER ( . . ), ( B.R.MITTAL ), JUDICIAL MEMBER ( ) DATE : 25.06.20 10 ( /) H.K.PADHEE / SNR.PRIVATE SECRETARY. / I.T.A.NO.1095/KOL/2009 AND / I.T. A.NO.1165/KOL/2009 (CROSS APPEALS) 15 - COPY OF THE ORDER FORWARDED TO : 1. /ASSESSEE : SRI KARTICK CHANDRA DHAR, AUROBINDA NAGAR, P.O. MIDNAPORE, DIST. PASCHIM, MEDINIPUR. 2 / DEPARTMENT: : ACIT, CIRCLE 1, MIDNAPORE. 3. / THE CIT, 4. ( )/ THE CIT(A), 5. / DR, KOLKATA BENCH 6. GUARD FILE . / TRUE COPY , / BY ORDER , / / DEPUTY REGISTRAR .