DCIT, CIR-7(1), KOLKATA, Kolkata V. M/s Capillary Technologies Pvt. Ltd., Kolkata

ITA 1112/KOL/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5719 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 23-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN CHOUDHUR Y
• Assessee Lawyers: SUBASH AGARWAL LD
• Keywords: Business expenditure
• Section: 133(6)

Judgement Text

1 ITA NO. 1112/KOL/2016 M/S. CAPILLARY TECHNOLOGIES PVT. LTD IN THE INCOME TAX APPELLATE TRIBUNAL B , BENCH KOLKATA BEFORE S HRI A.T. VARKEY , JM & D R .A.L.S AINI , AM ITA NO. 1112/K OL/201 6 (A.Y: 20 11 - 12 ) D.C.I.T, CIR - 7 (1), KOLKATA VS. M/S. CAPILLARY TECHNOLOGIES PVT. LTD. PAN: AADCC 4496J ( / APPELLANT) .. ( / RESPONDENT) APPELLANT /REVENUE BY : SHRI ROBIN CHOUDHURY , ADDL. CIT RESPONDENT/ASSESSEE BY : SHRI SUBASH AGARWAL, ADVOCATE, LD.AR / DATE OF HEARING : 17 /12/2018 / DATE OF PRONOUNCEMENT : 30.01.2019 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONEDAPPEAL FILED BY THE R EVENUE , PERTAINING TO ASSESSMENT YEAR 20 11 - 12, IS DIRECTED AGAINST THE ORDER S PASSED BY THE COMMISSIONER OF INCOME - TAX (APPEALS) - 16 , KOLKATA , IN APPEAL NO . 624/ CIT(A) - 16/KOL/2014 - 15/C - 7(1)/KOL , DATED 31 - 03 - 2016 , WHICH IN TURN ARISE S OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER U/S. 143(3)OF THE INCOME - TAX ACT, 1961 (IN SHORT, THE ACT), DATED 28 - 03 - 2014 . 2. GROUNDS OF APPEAL RAISED BY THE R EVENUE ARE AS FOLLOWS : - 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS IN FACTS IN ALLOWING SALARY OF RS. 37 , 04 , 232 / - WHICH WAS INFLATED IN THE ACCOUNTS TO EVADE TAX. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS IN FACTS IN DELETING THE ADDITION OF UNDISCLOSED INCOME OF RS. 23 , 16 , 911 / - AS APPARENT FROM THE 26AS STATEMENT. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW A S WELL AS IN FACTS IN DELETING THE EXPENDITURE TOWARDS 'TRAVELLING EXPENSES' AND 'REPAIR & MAINTENANCE INSPITE OF THE FACT THAT THE ASSESSEE COULD NOT PRODUCE ANY DOCUMENTARY EVIDENCES OF THE ABOVE EXPENSES. 2 ITA NO. 1112/KOL/2016 M/S. CAPILLARY TECHNOLOGIES PVT. LTD 4. 'THAT THE APPELLANT CRAVES LEAVE TO ADD, DE LETE, ALTER, MODIFY OR TAKE NEW GROUNDS OF APPEAR. NOW, WE SHALL DEAL ABOVE GROUNDS RAISED BY REVENUE ONE BY ONE. 3. IN GROUND NO.1 THE MAIN GRIEVANCE OF THE REVENUE IS THAT THE LD. CIT(A) HAS ALLOW ED SALARY OF RS. 37,04,232/ - WHICH WAS INFLATED BY THE A SSESSEE IN THE BOOKS OF ACCOUNTS TO EVADE TAX. 4. BRIEF FACTS QUA THE ISSUE ARE THAT DURING THE SCRUTINY ASSESSMENT THE ASSESSING OFFICER (AO) NOTED THAT ASSESSEE HAS DEBITED SALARY EXPENSES TO THE TUNE OF RS. 1, 63,71,077/ - TO THE PROFIT AND LOSS ACCOUNT . ON BEING ASKED, THE ASSESSE E SUBMITTED MONTH - WISE SALARY STATEMENT BEFORE THE AO AND ALSO SUBMITTED THAT THE HDFC BANK PAY S SALARY TO EMPLOYEES AS PER SAID SALARY STATEMENT .ON RECEIPT OF THE SALARY STATEMENT THE N OTICE U/S 133(6) WAS ISSUED BY THE AO TO THE BANK MANAGER, HDFC BANK, BTM LAYOUT BRANCH, BANGALORE. IN RESPONSE TO NOTICE U/S 133(6), T HE SAID BANK FURNISHED BANK STATEMENT OF THE ASSESSE COMPANY FOR THE FINANCIAL YEAR 2010 - 1L TO THE AO . ON PERUSAL OF THE SAID STATEMENT AND ALSO THE MONTH - WISE STATEM ENT OF THE ASSESSE, IT WAS FOUND THAT THE SALARY WAS PAID AS BELOW: - SL. NO. MONTH AMOUNT (RS) 1. APRIL 10 8, 0 7,254 2. MAY10 8,61,555 3. JUNE10 9,27,959 4. JULY, 10 9,11,355 5. AUGUST 10,89,074 6. SEPTEMBER 10,96,917 7. OCTOBER 11,32,605 8. NOVEMBER 8,23,681 9. DECEMBER 15,52,176 10. JANUARY11(16,00,605+279145)= 18,79,750 11. FEBRUARY11 15,92,576 12. MARCH, 11 21,39,222 TOTAL : 1,48,14,124 AFTER GOING THROUGH THE P ROFIT & L OSSACCOUNT , IT WA S NOTED BY AO THAT THE ASSESSE EHAS DEBITED DIRECTORS REMUNERATIONS OF RS . 26,71,920/ - BUT IN THE TOTAL SALARY INCLUDES 3 ITA NO. 1112/KOL/2016 M/S. CAPILLARY TECHNOLOGIES PVT. LTD DIRECTORS REMUNERATION OF AJAY MADANI, ANISH REDDY BODDU AND KRISHNA KUMAR MEHRA FOR THE FOLLOWING MONTH S : 1. APRIL 10 RS.73,240 X 3 = RS.2,19,720 2. MAY10 RS.73,240X3 = RS. 2,19,720 3. JUN E10 RS.64,307X3 = RS. 1,92,921 4. JULY, 10 RS.61,611X3 = RS.1,84,833 5. AUGUST 10 (RS.79,300+RS.76,982+RS.74,819) = RS. 2,31,101 6. SEPTEMBER 10 (RS. 67,671+65,353+RS.63,190)= RS.1,96,214 7. OCTOBER 10 (RS.67,671+15,353+RS.63,190)= RS.1,46,214 8. NOVEMBER 10 NIL 9. DECEMBER 10 (RS.67,671+RS.65,353 +RS.63,190)= RS.1,96,214 10. JANUARY11( RS.67,671 + RS.65,354 + RS.63,191) = RS.1,96,216 11. FEBRUARY11 (RS.45,282 + RS.56,635 + RS.51,059= RS.1,52,976 12. MARCH, 11 (RS.73,240 +RS.64,670+RS.73,240)= RS.2,11,150 TOTAL : RS.21,47,279 THE DIRECTORS ARE NOT ENTITLED TO GET SALARY WHILE THEY ARE GETTING REMUNERATION. THEREFORE, THE ACTUAL SALARY PAYMENT ON THE BASIS OF BANK STATEMENT AND DETAILS IN RECORD WAS TO THE TUNE OF (RS.1,48,14,124 - RS.21,47,279) = RS.1,26,66,845 / - BUT THE ASSESSE E DEBITED SALARY TO THE PROFIT AND LOSS ACCOUNT TO THE TUNE OF RS.1,63,71,077/ - WHICH THE AO HAS CONSIDERED AS INFLATED SALARY . HENCE, THE AMOUNT OF BOGUS SALARY (RS.163,71 ,077 RS.1,26,66,845)= RS. 37,04,232/ - WAS DISALLOWED BY AO. 5 . AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO HAS DELETED THE IMPUGNED ADDITION MADE BY THE AO. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 9 . WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD, WE NOTE THAT ON PERUSAL OF THE P ROFIT AND L OSS ACCOUNT AND DETAILS MENTIONED UNDER SCHEDULE 12 OF FINANCIAL STATEMENTS , IT WA S OBSERVED BY THE A SSESSING OFFICER THAT THE ASSESSEE DEBITED SALARY TO THE TUNE OF R S .1 ,63,71 ,077/ - TO THE PROFIT AND LOSS ACCOUNT . T HE ASSESSEE SUBMITTED MONTH - WISE SALARY STATEMENT BEFORE AO. ON PERUSAL OF THE SAID STATEMENT AND ALSO THE MONTH - WISE STATEMENT OF THE ASS ESSEE, IT WASNOTED BY AO THAT THE SALARY WAS PAID TOTALING TO RS. 1,4 8, 14,124/ - . THE ACTUAL SALARY PAYMENT ON THE BASIS OF BANK STATEMENT AND DETAILS IN RECORD WAS TO THE 4 ITA NO. 1112/KOL/2016 M/S. CAPILLARY TECHNOLOGIES PVT. LTD TUNE OF (RS.1 ,4 8 ,14,124 - RS.21,47,279)= RS.1,26,66, 8 45/ - . BUT THE ASSESSEE DEBITED S ALARY TO THE PROFIT AND LOSS ACCOUNT TO THE TUNE OF RS.1,63,71,077/ - WHICH IS INFLATED AS PER THE AO TO THE TUNE OF RS.37,04,232/ - (RS.1,63,71,077 - RS.1,26,66,845) . THE LD COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE SAID DIFFERENCE BETWEEN THE SAL ARY DEBITED IN PROFIT AND LOSS ACCOUNT AND SALARY PAID BY BANK HADARISEN DUE TO THE FOLLOWING REASONS: (A) DEDUCTIONS OF (1) PROVIDENT FUND (2) PROFESSIONAL TAX (3) ESI AND (4) TDS HAVE BEEN MADE FROM SALA RY DEBITED IN BOOKS; (B) A PART OF THE SALARY HAS BEEN OUTSTANDING AS SALARY PAYABLE AT YEAR END, WHICH WAS OBVIOUSLY NOT PAID AND HENCE NOT REFLECTED IN THE BANK PAYMENTS; (C) THERE WERE CERTAIN PAYMENTS MADE FOR SALARY THROUGH CHEQUES WHICH WERE NOT REFLECTED IN THE REPLY TO NOTICE UNDER SEC TION 133(6 ) OF THE ACT, AS SUBMITTED BY THE BANK. THE BANK GAVE DETAILS OF ONLY DIRECT DEBITS MADE BY IT TO THE EMPLOYEE'S ACCOUNT FOR WHOSE PAYMENT INSTRUCTIONS WERE ISSUED BY THE ASSESSEE COMPANY TO THE BANK EVERY MONTH. 10. ON THE OTHER HAND, LD DR FOR THE REVENUE SUBMITTED BEFORE US THAT LD AO HAS COMPARED THE SALARY STATEMENT WITH THE BANK STATEMENT AND WORKED OUT THE DIFFERENCES IN A SYSTEMATIC WAY THEREFORE, ADDITION MADE BY AO SHOULD BE SUSTAINED. WE NOTE THAT T HE RECONCILIATION BETWEEN SAL ARY DEBITED IN THE ASSESSEE'S BOOKS AND THE SALARY AS SHOWN TO BE PAID BY BANK WAS SUBMITTED BY THE ASSESSEE BEFORE THE AO AND THE AO FAILED TO BRING ANY COGENT EVIDENCE ON RECORD TO SHOW THAT RECONCILIATION MADE BY ASSESSEE IS WRONG . MOREOVER, THE ASSESSE E HAD FILED THE DETAILS OF SALARY EXPENSES INCURRED PER MONTH PER EMPLOYEE AS WELL AS DIRECTOR'S REMUNERATION PAID IN THE F.Y. 2010 - 11 TO THE AO, AND ALSO FILED THE DETAILS OF PAYMENTS OF SALARY MADE THROUGH ASSESSEE'S BANKERS . WE NOTE THAT THE FIGURE OF SALARY WHICH IS TREATED AS BOGUS BY THE LD. AO IS NOT FALSE AT ALL . THESE SALARY FIGURES NOTED ABOVE IS SUBJECT TO VARIOUS DEDUCTIONS MADE FROM SALARY AS WELL OTHER ADJUSTMENTS AS EXPLAINED BY THE LD COUNSEL IN PARA NO. 9 OF THIS ORDER. THESE DEDUCTIONS AN D ADJUSTMENTS WERE NOT CONSIDERED BY THE AO THEREFORE, ADDITION MADE BY THE AO IS WITHOUT ANY BASE. THAT BEING SO, WE 5 ITA NO. 1112/KOL/2016 M/S. CAPILLARY TECHNOLOGIES PVT. LTD DECLINE TO INTERFERE WITH THE ORDER OF ID. C.I T.(A) DELETING THE AFORESAID ADDITION. HIS ORDER ON THIS ADDITION IS, THEREFORE, UPHELD AND THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. 12 . GROUND NO. 2 RELATES TO DELETION OF ADDITION OF UNDISCLOSED INCOME OF RS. 23,16,911/ - AS APPARENT FROM THE 26AS STATEMENT. 1 3 . THE BRIEF FACTS OF THE ISSUE ARE THAT ON PERUSAL OF 26AS STATEMENT , TH E AO OBSERVED THAT THE ASSESSE E DID NOT DISCLOSE FULLY AND TRULY OF ALL THE RECEIPTS AND INCOME DETAILS OF WHICH ARE GIVEN BELOW: NAME OF THE ASSESSEE AMT. AS AMT. DISCLOSED UNDISCLOSED PER 26AS(RS) BY THE ASSESSE(RS.) AMOUNT (RS.) ADITYA BIRLA NUVO LTD 3,24,102 2,92,956 31,145 ADITYA BIRLA NUVO LTD 60,79,016 42,42,138 18,36,878 (FORMERLY INDIAN RAYON) ALOK H & A 27,51,759 27,10,732 41,026 CELEBRITY FASHION LTD 26,06,113 24,81,750 1,24,363 INDUS LEAGUE CLOTHING LTD 10,28,024 7,44,525 2,83,499 TOTAL= 23,16,911 THE AO NOTED THAT ASSESSE E COULD NOT PRODUCE ANY DOCUMENTARY EVIDENCE AS TO WHY THE RECEIPT S OF RS. 23,16,911/ - WAS NOT DISCLOSED IN HIS TOTAL INCOME. THERE FORE, HE MADE ADDITION OF RS.23,16,911/ - TO THE TOTAL INCOME OF THE ASSESSE E. 14 . AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) , WHO HAS DELETED THE ADDITION . AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US . 6 ITA NO. 1112/KOL/2016 M/S. CAPILLARY TECHNOLOGIES PVT. LTD 15. WE HAVE GIVEN OUR CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD, WE NOTE THAT T HE LD. AO HAS TAKEN UP INDIVIDUAL CASES FOR MATCHING THE 26AS WITH THE AMOUNT OF INCOME BOOKED BY THE ASSESSEE AND MADE NO A TTEMPT TO RECONCILE THE TOTAL INCOME AS BOOKED BY THE ASSESSEE AND TOTAL INCOME ON WHICH TDS WAS DEDUCTED. THE LD COUNSEL FOR THE ASSESSEE EXPLAINED THE BENCH, THE E ACH CASE OF DISCREPANCY . IN CASE OF ADITYA BIRLA NUVO LTD., THE ASSESSEE HAD RAISED BILLS AND BOOKED INCOME IN THE NAME OF ITS RETAIL PARTNERS AND OTHER BRANDS WORKING IN THE NAME OF ADITYA BIRLA NUVO LTD. SUCH AS PETER ENGLAND, PLANET FASHION ETC. HOWEVER, TDS WAS DEDUCTED BY THE PARENT COMPANY NAMELY, ADITYA BIRLA NUVO LTD., HENCE THE DIFFERENCE. IF THE TOTAL INCOME BOOKED IN THE NAME OF THE BRAND PARTNERS IN THE BOOKS OF THE ASSESSEE IS CONSIDERED, IT WOULD RECONCILE WITH THE AMOUNT OF INCOME SHOWN IN 26AS BY ADITYA BIRLA NUVO LTD, HENCE THE DIFFERENCE IS RECONCILIATORY IN NA TURE. IN CASE OF ALOK H&A LTD , T HE ASSESSEE HAS RAISED THE FIRST INVOICE ON THE CUSTOMER ON 26.02.2010. I.E. F.Y. 2009 - 10, WHEREAS CUSTOMER HAS CONSIDERED THE SAME IN F.Y. 2010 - 11 AND DEDUCTED T D S THEREON. IN CASE OF CELEBRITY FASHION, L TD ,T HE 26AS SUBMITT ED AT THE TIME OF SCRUTINY ASSESSMENT, THOUGH SHOWED A HIGHER INCOME ON WHICH T D S WAS DEDUCTED BY THE ASSESSEE'S CLIENT, LATER IT WAS RECTIFIED AND AS PER THE CURRENT 26AS DATED 16.03.2016., THE INCOME IS NOW RS. 17,19,478/ - , WHICH IS LOWER THAN THE INCOME BOOKED BY THE ASSESSEE IN HIS BOOKS. IN THE CASE OF INDUS LEAGUE CLOTHING LTD , THE COUNSEL SUBMITTED THAT THE ASSESSEE HAD RAISED BILLS AND BOOKED INCOME IN THE NAME OF ITS RETAIL PARTNERS AND OTHER BRANDS WORKING IN THE NAME OF INDUS LEAGUE CLOTHING LT D. SUCH AS JEALOUS 21, JOHN MILLER, URBAN YOGA ETC. HOWEVER, TDS WAS DEDUCTED BY THE PARENT COMPANY, INDUS LEAGUE CLOTHING LTD, HENCE THE DIFFERENCE. HOWEVER, I F THE TOTAL INCOME BOOKED IN THE NAME OF THE BRAND PARTNERS IN THE BOOKS OF THE ASSESSEE IS CONS IDERED, IT WOULD RECONCILE WITH THE AMOUNT OF INCOME SHOWN IN 26AS BY INDUS LEAGUE CLOTHING LTD., HENCE THE DIFFERENCE IS RECONCILIATORY IN NATURE. 16. HOWEVER, THE LD COUNSEL FAIRLY AGREED THAT SO FAR TOTAL RECONCILIATION OF 26AS IS CONCERNED, TAKING INT O ACCOUNT ALL THE PARTIES MENTIONED ABOVE, THERE WOULD BE STILL A DIFFERENCE TO THE TUNE OF RS. 1,77,864/ - , AND THE SAME MAY BE ADDED TO THE TOTAL 7 ITA NO. 1112/KOL/2016 M/S. CAPILLARY TECHNOLOGIES PVT. LTD INCOME OF THE ASSESSEE.THEREFORE, OUT OF THE TOTAL DISALLOWANCE OF RS.23,16,911 / - MADE BY AO WE CONFIRM THE A DDITION OF RS.1,77,864/ - , AND THE BALANCE AMOUNT IS DELETED. THEREFORE, WE ALLOW THIS GROUND RAISED BY THE REVENUE PARTLY. 17. GROUND NO. 3 RAISED BY THE REVENUE RELATES TO DELETION OF THE EXPENDITURE TOWARDS 'TRAVELLING EXPENSES' AND 'REPAIR & MAINTENANC E. 18 . BRIEF FACTS QUA THE ISSUE ARE THAT ON PERUSAL OF THE P ROFIT AND L OSS ACCOUNT, AND DETAILS UNDER SCHEDULE - 13 OF THE FINANCIAL STATEMENTS , IT WASNOTICED BY THE AO THAT THE ASSESSE DEBITED TRAVELLING EXPENSES TO THE PROFIT AND LOSS ACCOUNT TO THE TUNE OF RS.39,02,561/ - AND REPAIR S & MAINTENANCE OF RS.3,61,228/ - . ON BEING ASKED, THE ASSESSEE SUBMITTED SOME BILLS AND VOUCHERS . HOWEVER, THE AO OBSERVED THAT THE P URPOSE OF THE TOUR AND TRAVEL WAS NOT CLEARED AND I N ABSENCE OF VERIFIABLE BILLS VOUCHERS G ENUINENESS OF THESE TRANSACTIONS CANNOT BE ASCERTAINED . THEREFORE, THE AO DISALLOW RS. 7,80,512/ - I.E. 20% OF TRAVELLING EXPENSES AND REPAIR & MAINTENANCE OF RS. 72,245/ - I.E. 20% OF THIS EXPENSES AND ADD BACK TO THE TOTAL INCOME OF THE ASSESSEE. 19 . AGGRI EVE BY THE STAND TAKEN BY THE AO, THE ASSESSE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) , WHO HAD DELETED THE ADDITION. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 20. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD, WE NOTE THAT ASSESSING OFFICER MADE THE AD - HOC DISALLOWANCE SOLELY ON THE GROUND THAT THE P URPOSE OF THE TOUR AND TRAVEL WAS NOT CLEAR AND I N ABSENCE OF VERIFIABLE BILLS VOUCHERS GENUINENESS OF THESE TRANSACTIONS CANNOT BE ASCERTAINED AND IDENTITIES OF THE PAYEES HAVE BEEN PROVED BY THE ASSESSEE . WE NOTE THAT I N THE CASE OF TRAVELLING EXPENSES, THE ASSESSEE SUBMITTED DETAILED BREAK - UP OF TRAVELLING EXPENSES INCURRED BY IT . THE ASSESSEE ALSO SUBMITTED THE PRINTOUT OF BILLS FR OM VARIOUS SITES SUCH AS MAKE MY TRIPS ETC. AS WELL AS THE PURPOSE AND PLACE OF TRAVELLING WERE SUBMITTED AND IN CASE OF REIMBURSEMENTS OF EXPENSES, PROPER 8 ITA NO. 1112/KOL/2016 M/S. CAPILLARY TECHNOLOGIES PVT. LTD SUPPORTING WERE SUBMITTED BY ASSESSEE . THUS, THE CONTENTIONOF THE LD. A O THAT THESE PAYMENTS WERE MADE AGAINST SELF - MADE DEBIT VOUC HERS IS TOTALLY FALSE AND IS WITHOUT BRINGING AND COGENT EVIDENCE ON RECORD. WE NOTE THAT ALL DE TAILS AND SUPPORTING WERE SUBMITTED BY THE ASSESSEE. 21. WE NOTE THAT I N THE CASE OF REPAIRS AND MAINTENANCE EXPENSES, THE LD. A O NEVER ASKE D FOR ANY DETAILS OR BILLS. HAD THE LD. A O ASKED FOR SUCH DETAILS, THE ASSESSEE WOULD HAVE PRODUCED THE SAME , AS ALL DETAILS WERE AVAILABLE WITH IT. T HUS, THE LD. A O WITHOUT GIVING PROPER OPPORTUNITY OF BEING, DISALLOWED THE EXPENSE BASED ON HIS OWN WHIMS AND PERSONAL SURMISES. WE NOTE THAT THE LD. AO HAS NO WHERE MENTIONED SPECIFIC INSTANCES WHERE IN HIS OPINION, SUCH EXPENSES HAVE BEEN FOUND TO BE FALSE. HE HAS MADE AN AD - HOC DISALLOWANCE TREATING 20% OF SUCH EXPENSES AS FALSE. THE DISAL LOWANCE OF GENUINE BUSINESS EXPENDITURE ON ESTIMATE BASIS WITHOUT ANY CONCLUSIVE EVIDENCE TO PROVE IT OTHERWISE, IS TOTALLY IRRATIONAL, ILLOGICAL AND IS BASED ON PRESUMPTION, WHIMS AND S URMI SES. FOR THAT WE RELY ON THE JUDGMENT OF THE COORDINATE BENCH MUM BAI IN THE CASE OF DY. COMMISSIONER OF IT MUMBAI VS. METROPOLIS HEALTH SERVICES (I) PVT.LTD.(ITA NO.4973/MUM/2009) , WHEREIN IT WAS HELD THAT THE DISALLOWANCE OF EXPENSES WHICH ARE GENUINE, BASED ON PERSONAL WHIMS AND SURMISES IS BAD AND MAY BE DELETED. TH AT BEING SO, WE DECLINE TO INTERFERE WITH THE ORDER OF ID. C.I T.(A) DELETING THE AFORESAID ADDITION. HIS ORDER ON THIS ADDITION IS, THEREFORE, UPHELD AND THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. 22. IN THE RESULT, THE APPEAL FILED BY THE REVENU E IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 / 01 /201 9 . SD/ - ( A.T VARKEY ) SD/ - (A. L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER /KOLKATA; DATED: 30/ 01 /201 9 **PP , SR.PS 9 ITA NO. 1112/KOL/2016 M/S. CAPILLARY TECHNOLOGIES PVT. LTD / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT /REVENUE: DCIT, CIR - 11(1), KOLKATA P - 7 CHOWRINGHEE SQUARE, KOLKATA - 700 069. 2. / THE RESPONDENT /ASSESSEE . - M/S. CAPILLARY TECHNOLOGIES PVT. LTD 1 THAKURDAS CHAKRABORTY LANE, GIRISH PARK, KOLKATA - 700 006. 3. ( ) / THE CIT(A) 4. / CIT 5. , , / DR, ITAT, KOLKATA 6. / GUARD FILE. //TRUE COPY/ BY ORDER ASSISTANT REGISTRAR I.T.A.T, KOLKATA BENCHES,KOLKATA .