Pawan Goods Merchants Co. Ltd., Chandigarh V. JCIT, Mohali

ITA 1105/CHANDI/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60864 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 22-05-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 14-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE, VICE PRESIDENT AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 1105/CHD/2011 ASSESSMENT YEAR: 2007-08 M/S PAWAN GOODS MERCHANTS CO. LTD., VS THE JCIT, RANGE-6, CHANDIGARH MOHALI PAN NO. AAACP9077H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AJAY JAIN RESPONDENT BY : SHRI AKHILESH GUPTA DATE OF HEARING : 22.05.2012 DATE OF PRONOUNCEMENT : 24.05.2012 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A), CHANDIGARH DATED 3.10.2011 RELATING TO ASS ESSMENT YEAR 2007-08. 2. GROUND NO. 1 OF THE APPEAL IS GENERAL IN NATURE AND HENCE NO COMMENTS ARE REQUIRED. 3. GROUND NO.2 OF THE APPEAL READS AS UNDER:- 2. THAT THE CIT(A) CHANDIGARH HAS WRONGLY CONFIRMED THE ADDITIONS ON ACCOUNT OF VALUATION OF KOTKAPURA LAN D BY ENHANCING ITS VALUATION BY RS. 23.32,578/- 2 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT D URING THE YEAR UNDER CONSIDERATION, THE ASSESSEE CARRIED THE BUSINESS AC TIVITIES OF DEVELOPMENT OF PUDA (APPROVED COLONIES AT KOTKAPURA AND MANSA) AND SALE OF COMMERCIAL AND RESIDENTIAL PLOTS THEREFORM. FURTHER, THE ASSE SSEE ALSO CARRIED OUT BUSINESS OF LIQUOR VENDS DURING THE YEAR UNDER CONS IDERATION. WHILE EXAMINING THE ACCOUNTS OF THE ASSESSEE, THE ASSESSI NG OFFICER NOTICED THAT THE ASSESSEE COMPANY HAS CLAIMED DEVELOPMENT EXPENSES O F RS. 36,94,325/- FOR SITE DEVELOPMENT OF KOTKAPURA LAND ALTHOUGH NO SALE / PURCHASE WAS CARRIED OUT. THE VALUE OF THE CLOSING STOCK OF THE KATKAPU RA LAND WAS SHOWN AT RS. 2,07,23,147/-. THE ASSESSING OFFICER ALSO NOTICED THAT THE OPENING VALUE OF THE KOTKAPURA LAND IS RS. 1,93,61,400/- AND THE ASS ESSEE HAD INCURRED DEVELOPMENT EXPENSES OF RS. 36,94,325/- (RS. 23,32, 578/- BEING PAYMENT MADE TO PUNJAB URBAN DEVELOPMENT AUTHORITY (PUDA) A ND RS. 13,61,747/- AS EXPENDITURE OF SITE DEVELOPMENT AT KOTKAPURA) ON TH IS LAND. THE ASSESSING OFFICER OPINED THAT THE VALUE OF CLOSING STOCK OF K OTKAPURA LAND SHOULD HAVE BEEN THE OPENING VALUE OF LAND BROUGHT FORWARD PLUS OTHER DEVELOPMENT EXPENSES ON THIS SITE INCURRED DURING THE YEAR I.E. RS. 2,30,55,725/- (RS. 1,93,61,400/- + RS. 36,94,325/-). THE ASSESSING OF FICER ASKED THE ASSESSEE AS TO WHY THE VALUATION OF KOTKAPURA LAND SHOULD NO T INCLUDE DEVELOPMENT EXPENSES MADE ON THIS SITE. IN RESPONSE TO THE ABO VE QUERY, THE ASSESSEE SUBMITTED THAT THE VALUATION OF CLOSING STOCK OF TH E LAND WAS MADE AS PER ACCOUNTING STANDARD AND NO FURTHER REPY IN SUPPORT OF THE CLAIM WAS GIVEN. ACCORDING TO ASSESSING OFFICER, THE REPLY SUBMITTED BY THE ASSESSEE WAS NOT CONVINCING AND THEREFORE, AN ADDITION OF RS. 23,32, 578/- WAS MADE TO THE INCOME OF THE ASSESSEE AS THE ASSESSEE DID NOT INCL UDE DEVELOPMENT EXPENSES IN THE VALUATION OF CLOSING STOCK OF LAND AT KOTKAP URA SITE. 3 5. ON APPEAL, THE CIT(A) HELD AS UNDER:- 3.3 I HAVE CONSIDERED THE SUBMISSION OF THE LD. CO UNSEL FOR THE APPELLANT. THE APPELLANT HAS SUBMITTED THAT IN ASSESSMENT YEAR 2006-07, THE ASSESSING OFFICER HAD ENHANCED THE VALUE OF CLOSING STOCK AS ON 31.3.2006 BY RS. 1,46,577/- AND THIS SHOULD BE TAKEN AS THE VALU E OF OPENING STOCK AS ON 1.4.2006. THIS CONTENTION OF T HE APPELLANT IS ACCEPTABLE IN VIEW OF THE DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PUNJAB WAREHOUSING CORPORATION LTD IN ITA NO. 670 O F 2008 DATED 28.1.2010. HENCE, THE ASSESSING OFFICER IS DIRECTED TO ADOPT THE OPENING STOCK IN THIS YEAR AS THE CLOSING STOCK AS ON 31.3.2006 DETERMINED FOR ASSESS MENT YEAR 2006-07. GROUND OF APPEAL NO.2 IS PARTLY ALLO WED. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIALS AVAILABLE ON RECORD. SHRI AJAY JAIN LD. C OUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT LD. CIT(A) HAS NOT CORRECTLY APPRECIATED THE FACTS OF THE PRESENT CASE AND THEREFORE, HE HAS RENDERED A DECISION WHICH IS NOT TENABLE IN LAW. ACCORDING TO SHRI AJAY JAIN, LD. C OUNSEL FOR THE ASSESSEE, A DETAILED WRITTEN SUBMISSIONS WERE FILED BEFORE THE CIT(A) WHICH WERE NOT TAKEN INTO CONSIDERATION WHILE DECIDING THE ISSUE. HE FURTHER POINTED OUT THAT THE ASSESSING OFFICER WHILE CALCULATING THE VALUE O F CLOSING STOCK ADDED THE AMOUNT OF EXTERNAL DEVELOPMENT CHARGES (EDC) AND CO NVERSION CHARGES TO THE COST OF LAND AT KOTKAPURA. THE ASSESSING OFFIC ER FAILED TO APPRECIATE THAT IT IS STATUTORY LEVY AND THE VALUE OF THE CLOSING S TOCK IN THE FORM OF SALABLE AREA IS NOT EFFECTED BY THE PAYMENT OF STATUTORY FE ES PAID TO GOVT. AUTHORITY. SH AJAY JAIN, LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSEE IS CONSISTENTLY FOLLOWING THE UNIFORM POLICY TO CHA RGE THE STATUTORY FEES IN 4 PROFIT AND LOSS ACCOUNT AND ONLY DIRECT DEVELOPMENT EXPENSES HAS BEEN ADDED WHILE CALCULATING THE COST OF CLOSING STOCK. ACCOR DING TO SHRI AJAY JAIN, LD. COUNSEL FOR THE ASSESSEE, IT IS WELL ACCEPTED PRACT ICE THAT THE STATUTORY FEE IS NOT PART OF DEVELOPMENT EXPENSES. FURTHER, IT IS S UBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE IS FOLLOWING UN IFORM POLICY OF VALUING ITS CLOSING STOCK AT LOWER OF COST OR MARKET VALUE AND, THEREFORE, FOR THE ARGUMENT SAKE, IF IT IS PRESUMED THAT IT IS THE PAR T OF COST EVEN THEN THE MARKET VALUE IS NOT INCREASED BY PAYMENT OF STATUTO RY LEVY TO GOVT. AUTHORITY, IT IS AN OBLIGATION ON THE ASSESSEE COMP ANY TO PAY THE STATUTORY LEVY AND THE MARKET VALUE OF CLOSING STOCK DOES NOT DEPEND UPON THE PAYMENT OF STATUTORY LEVY. IN VIEW OF THE ABOVE ARGUMENTS OF SHRI AJAY JAIN, LD. COUNSEL FOR THE ASSESSEE, WE THINK IT APPROPRIATE T O SET ASIDE THE ORDER OF CIT(A) ON THIS ISSUE AND REMAND THE SAME TO THE FIL E OF ASSESSING OFFICER WITH A DIRECTION TO CONSIDER THE ABOVE SUBMISSIONS OF SHRI AJAY JAIN, LD. COUNSEL FOR THE ASSESSEE AND DECIDE THE ISSUE AFRES H IN ACCORDANCE WITH LAW AFTER AFFORDING DUE AND REASONABLE OPPORTUNITY OF B EING HEARD TO THE ASSESSEE. GROUND NO.2 OF THE APPEAL IS ALLOWED FOR STATISTICA L PURPOSES. 7. GROUND NO.3 & 4 OF THE APPEAL READ AS UNDER:- 3. THAT THE CIT(A) CHANDIGARH HAS WRONGLY CONFIRMED TH E ADDITIONS ON ACCOUNT OF VALUATION OF MANSA LAND BY ENHANCING ITS VALUATION BY RS. 7,22,647/-. 4. THAT THE CIT(A) HAS NOT GIVEN ANY DIRECTION TO ADOP T THE SAME VALUE OF OPENING STOCK AS ON 01.04.2007 AS THE CLOSING STOCK AS ON 31.3.2007 DETERMINED FOR ASSESS MENT YEAR 2007-08. 5 8. THE ASSESSING OFFICER HAS DISCUSSED THIS ISSUE I N PARA 4 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER OBSERVED T HAT VALUE OF OPENING STOCK OF ARVIND NAGAR, MANSA WAS SHOWN AT RS. 2,33, 75,850/- WHILE THE AREA OF LAND IS 36,321.87 SQ. YARDS RESULTING IN VALUE O F OPENING STOCK OF LAND PER SQ.YARD AT RS. 643.57. THE CLOSING STOCK OF AREA O F SALEABLE LAND OF ARIVIND NAGAR, MANSA IS 29745.10 SQ YARS THE ASSESSING OF FICER DETERMINED THE CLOSING STOCK AT RS. 1,91,43,054/- BY MULTIPLYING T HE AREA WITH THE RATE OF 643.57 PER SQ. YARDS. THE ASSESSING OFFICER NOTICE D THAT THE CLOSING STOCK HAD BEEN SHOWN AT RS. 1,84,20,407/-. THUS THERE WA S A DIFFERENCE OF RS. 7,22,647/- IN VALUATION OF CLOSING STOCK OF ARVIND NAGAR, MANSA. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO SHOW CAU SE AS TO WHY THE VALUATION OF LAND OF ARVIND NAGAR, MANSA SHOULD NOT BE TAKEN ON THE BASIS OF VALUE OF OPENING STOCK. THE ONLY REPLY GIVEN BY TH E ASSESSEE WAS THAT THE CLOSING STOCK OF THE LAND WAS MADE AS PER ACCOUNTIN G STANDARD. IN THE ABSENCE OF SATISFACTORY EXPLANATION FROM THE ASSESS EE, THE ASSESSING OFFICER ADDED A SUM OF RS. 7,22,647/- TO THE TOTAL INCOME O F THE ASSESSEE. 8. ON APPEAL, THE CIT(A) GAVE A PARTIAL RELIEF TO THE ASSESSEE, OBSERVING AS UNDER:- 4.3 I HAVE CONSIDERED THE SUBMISSION OF THE LD. CO UNSEL FOR THE APPELLANT. THE ASSESSING OFFICER HAS REVA LUED THE STOCK IN ASSESSMENT YEAR 2006-07 AND THE APPELLANT HAS SUBMITTED THAT THE VALUE OF CLOSING STOCK DETERMINE D BY THE ASSESSING OFFICER AS ON 31.3.2006 SHOULD BE ADO PTED AS OPENING STOCK AS ON 1.4.2006. THE CONTENTION OF THE APPELLANT IS ACCEPTABLE IN VIEW OF THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PUNJAB S TATE WAREHOUSING CORPORATION LTD. (SUPRA). HENCE, THE 6 ASSESSING OFFICER IS DIRECTED TO ADOPT THE OPENING STOCK IN THIS YEAR AS THE CLOSING STOCK AS ON 31.3.20906 DET ERMINED FOR ASSESSMENT YEAR 2006-07. GROUND OF APPEAL NO.3 IS PARTLY ALLOWED . 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS OBSERVED THAT THE ASSESSEE HAD SUBMITTED A DETAILED SUBMISSIONS BEFORE THE CIT(A). IT SEEMS THAT THE CIT(A) HAS NOT TAKEN INTO CONSIDERATION THE DETAILED SUBMISSIONS M ADE BY THE ASSESSEE BEFORE HIM. THE CIT(A) HAS ALSO NOT GIVEN ANY REAS ON AS TO WHY HE HAS IGNORED THE SUBMISSIONS OF THE ASSESSEE. SHRI AJAY JAIN, LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT IN THE INSTANT CASE, THE ASSESSING OFFICER HAS CALCULATED THE VALUE OF CLOSING STOCK AS ON 31.3.20 07 BY TAKING THE AVERAGE VALUE OF STOCK AS ON 1.4.2006. SHRI AJAY JAIN, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE METHOD ADOPTED BY THE ASSESSING OFFICER IS NOT A RECOGNIZED METHOD. ACCORDING TO HIM, THE VALUE OF OPENING AND CLOSING STOCK DEPENDS ON THE VARIOUS FACTORS AND IT IS NOT TRUE THAT THE VALUATION IS DONE ON THE SAME RATE FOR OPENING AND CLOSING STOCK . SHRI AJAY JAIN, LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT THERE WAS A GREAT RECESSION IN FINANCIAL YEAR 2006-07 AND DUE TO RECESSION THE ASS ESSEE COMPANY MANAGE TO SELL THE MEAGER STOCK. THERE WAS OPENING STOCK OF 107.5 RESIDENTIAL PLOT AND 14 SCO SITES AND THE ASSESSEE COMPANY SOLD ONLY THR EE SCO SITES AND 18 RESIDENTIAL PLOTS DURING THE YEAR UNDER CONSIDERATI ON AND MARKET VALUE DECLINED CONSIDERABLY AND THE ASSESSEE IS FOLLOWING UNIFORM POLICY OF VALUING ITS STOCK AT LOWER OF COST OR MARKET VALUE AND THEREFORE, IT WAS SUBMITTED THAT VALUE TAKEN BY THE ASSESSEE BE ACCEP TED. SHRI AJAY JAIN, LD. COUNSEL FOR THE ASSESSEE ALSO BROUGHT TO OUR NOTICE THAT THE ASSESSING OFFICER 7 HAS TAKEN THE SAME VALUE FOR RESIDENTIAL PLOT AND S CO SITE. HE FURTHER SUBMITTED THAT IN THE OPENING STOCK 14 SCO SITES WE RE AVAILABLE TO THE ASSESSEE COMPANY AND IN THE CLOSING STOCK THERE WER E ONLY 11 SCO SITES AND THEREFORE, THE AVERAGE COST DECLINED. HE, THEREFOR E, SUBMITTED THAT THE ASSESSING OFFICER COULD NOT APPRECIATE THE FACT THA T THE VALUE OF SCO SITE IS ALWAYS MORE THAN THE VALUE OF RESIDENTIAL PLOT AND CALCULATED THE VALUE BY TAKING AVERAGE OF BOTH RESIDENTIAL AND SCO SITE. I T SEEMS THAT BOTH THE AUTHORITIES BELOW HAVE NOT CONSIDERED THE ABOVE SUB MISSIONS OF THE ASSESSEE. WE, THEREFORE, THINK IT APPROPRIATE TO SET ASIDE TH E ORDER OF CIT(A) ON THIS ISSUE AND REMAND THE SAME TO THE FILE OF THE ASSESS ING OFFICER WITH A DIRECTION TO TAKE INTO CONSIDERATION THE ABOVE SUBM ISSIONS OF THE ASSESSEE AND DECIDE THE ISSUE AFRESH ON MERITS IN ACCORDANCE WITH LAW AFTER AFFORDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE. GROUND NOS. 3 AND 4 OF THE APPEAL ARE ALLOWED FOR STATISTICAL P URPOSES. 10. GROUND NO.5 OF THE APPEAL READS AS UNDER:- 5. THE CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE @ 20% SALARY TO DIRECTOR OF THE COMPANY, BY INVOKING THE PROVISIONS OF SECTION 40A(3) OF THE INCOME TAX ACT. 11. THE ASSESSEE COMPANY PAID SALARY TO ITS DIRECTO R SHRI PAWAN KUMAR SINGLA AMOUNTING TO RS. 3.60 LACS DURING THE YEAR U NDER CONSIDERATION. THE ASSESSING OFFICER ACCEPTED THE SALARY AND DISALLOWE D 20% I.E. RS. 72,000/- PAID TO SHRI PAWAN KUMAR SINGLA UNDER THE PROVISION S OF SECTION 40A(3) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'). 8 12. ON APPEAL, THE CIT(A) CONFIRMED THE DISALLOWANC E AND HENCE THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE AL SO PERUSED THE MATERIALS AVAILABLE ON RECORD. SHRI AJAY JAIN, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PROVISIONS OF SECTION 40A(3) ARE NOT ATTRACTED IN THIS CASE AS IT IS PROTECTED BY CLAUSE (D) TO RULE 6DD OF INC OME TAX RULES, 1962 AND THEREFORE, NO DISALLOWANCE IS CALLED FOR. WE MAY O BSERVE THAT RELEVANT ENTRIES IN RESPECT OF SALARY EXPENSES IN THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE NOT AVAILABLE ON RECORD. IN THE ABSENCE OF SUCH DETAILS, WE COULD NOT APPRECIATE THE CONTENTION OF SHRI AJAY JAIN, LD. CO UNSEL FOR THE ASSESSEE. HOWEVER, IN THE INTEREST OF JUSTICE, WE THINK IT PR OPER TO RESTORE THIS ISSUE TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO C ONSIDER THE ABOVE CONTENTION MADE ON BEHALF OF THE ASSESSEE AND DECID E THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER AFFORDING DUE AND REASONA BLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. GROUND NO.5 OF THE APPEAL I S ALLOWED FOR STATISTICAL PURPOSES. 14. GROUND NO.6 OF THE APPEAL READS AS UNDER:- 6. THAT THE LD. CIT(A) HAS ALSO ERRED IN CONFIRMING TH E DISALLOWANCE OF THE TELEPHONE EXPENSES OF RS. 94,69 4/- WITHOUT APPRECIATING THE FACTS THAT TELEPHONE BILLS IN THE NAME OF THE COMPANY AND THE SAME WERE INCURRED FOR BUSINESS PURPOSE OF THE ASSESSEE. . 15. THE ASSESSING OFFICER HAS DISCUSSED THIS ISSUE IN PARA 6 OF THE ASSESSMENT ORDER. DURING THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE CLAIMED TELEPHONE EXPENSES AT RS. 3,14,757 /-. THE ASSESSING 9 OFFICER NOTICED THAT A NUMBER OF TELEPHONE USERS WE RE NEITHER DIRECTORS NOR EMPLOYEES OF THE ASSESSEE COMPANY. WHEN CONFRONTED , THE ASSESSEE HAS REPLIED THAT THE TELEPHONE EXPENSES HAVE BEEN INCUR RED FOR BUSINESS PURPOSES. THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATIO N OF THE ASSESSEE OBSERVING THAT THE ASSESSEE HIMSELF HAS PROVIDED TH E LIST OF TELEPHONE USERS FROM ITS OWN RECORD. HE THEREFORE, DISALLOWED RS. 94,964/-. 16. ON APPEAL, THE CIT(A) CONFIRMED THE DISALLOWANC E OF RS. 94,964/-. 17. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE AL SO PERUSED THE MATERIALS AVAILABLE ON RECORD. SHRI AJAY JAIN, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE COMPANY HAS TAKEN CORPO RATE CONNECTION IN ITS OWN NAME AND HAS GIVEN TELEPHONE CONNECTIONS TO VAR IOUS EMPLOYEES AND DIRECTORS FOR BUSINESS PURPOSES ONLY. THE COMPANY H AS ALSO PAID FBT ON TELEPHONE EXPENSES INCURRED DURING THE YEAR. SHRI A JAY JAIN, LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT COMPANY HAS TAKEN CORPORATE CONNECTION AND HAS GIVEN NAMES OF THE EMPLOYEES WORKING AND AT THE TIME OF TAKING CONNECTION AND BY THE PASSAGE OF TIME THERE WAS CHA NGE IN EMPLOYEE AND AT THE TIME OF LEAVING OF EMPLOYEE THE PHONE IS TAKEN FROM THE EMPLOYEE AND IS HANDED OVER TO THE NEW EMPLOYEE FOR THE PURPOSE OF BUSINESS OF THE COMPANY. HE FURTHER SUBMITTED THAT THE SERVICE PROVIDER HAS ISSUED THE BILL IN THE NAME OF THE COMPANY AND ALL PAYMENTS HAVE BEEN MADE BY T HE COMPANY FOR BUSINESS PURPOSES ONLY AND IT IS ONLY TECHNICAL BRE ACH THAT AT THE TIME OF LEAVING OF EMPLOYEE AND JOINING OF NEW EMPLOYEE THE CHANGE IN NAME OF USER WAS NOT GOT REGISTERED IN THE RECORDS OF TELECOM SE RVICE PROVIDER. HE, THEREFORE, SUBMITTED THAT THE ASSESSING OFFICER HAS WRONGLY DISALLOWED THE 10 EXPENSES WITHOUT APPRECIATING THE FACTS OF THE PRES ENT CASE. SHRI AJAY JAIN, LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT NO ADDITION CAN BE MADE FOR PERSONAL USE IN CASE FBT HAS BEEN PAID. RELIANCE W AS PLACED ON THE DECISION OF ITAT CHANDIGARH BENCH IN THE CASE OF ADELTA OPTE CH YAMUNANAGAR VS ITO, WARD-4, YAMUNANAGAR IN ITA NO. 1264/CHD/2009 O RDER DATED 9.9.2010. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF T HE PRESENT CASE, WE SET ASIDE THE ORDER OF CIT(A) ON THIS ISSUE AND REMAND THE SAME TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE IS SUE AFRESH ON MERITS IN ACCORDANCE WITH LAW AFTER AFFORDING DUE AND REASONA BLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . GROUND NO.6 OF THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 18. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICA L PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF MAY, 2012 SD/- SD/- (MEHAR SINGH) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 24 TH MAY, 2012 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR