ACIT, Kota V. SHIV KUMAR SUSHIL KUMAR TEAENTERPRISES P LTD, Kota

ITA 112/JPR/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99525 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 30-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P C PARWAL CA DHK
• Keywords: Rule of consistency; Corroborative evidences
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, 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. 112/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2009-10 . THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, KOTA. CUKE VS. M/S. SHIV KUMAR SUSHIL KUMAR TEA ENTERPRISES PVT. LTD., A-521, TALWANDI, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAFCS 5246 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI O.P. BHATEJA,(ADDL. CIT) /KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 24.09.2015. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 27/11/2015. VKNS'K@ ORDER PER SHRI LALIET KUMAR, J.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT (APPEALS), KOTA AJMER DATED 26.11.2012 FOR THE A.Y. 2009-10. 2. GROUND NO. 1 IN REVENUES APPEAL IS AGAINST DELE TING THE DISALLOWANCE OF INTEREST OF RS. 6,85,368/- ON ACCOUNT OF INVESTMENT MADE FOR NON BUSINESS PURPOSES. 2.1. IN THIS REGARD, THE AO IN PARA 3.1 HAS HELD TH AT THE INVESTMENT MADE BY THE ASSESSEE OF RS. 57,11,400/- FOR PURCHASE OF LAND VI DE REGISTERED DEED DATED 25.11.2008 WAS NOT FOR BUSINESS PURPOSES AND, THERE FORE, HAS HELD THAT INTEREST OF RS. 2 ITA NO. 112/JP/2013 A.Y. 2009-10. M/S. SHIV KUMAR SUSHIL KUMAR TEA ENTERPRISES. 6,85,368/- WAS DISALLOWED AND ADDED TO THE ASSESSEE S INCOME. THE LD. CIT (A) HAS HELD THAT THE DISALLOWANCE OF INTEREST WAS NOT JUST IFIED AND HAS DIRECTED THE DELETION OF ADDITION OF RS. 6,85,368/-. 3. NOW THE REVENUE IS BEFORE US. AT THE OUTSET, LD . D/R SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND REQUESTED THAT DISALLOWANCE M ADE BY THE AO BE SUSTAINED. 3.1. ON THE OTHER LD. A/R FOR THE ASSESSEE RELIED O N THE ORDER OF THE LD. CIT (A) AND CONTENDED THAT THE LD. CIT (A) AFTER CONSIDERING TH E DETAILS FURNISHED BY THE ASSESSEE DIRECTED THE AO TO DELETE THE ADDITION. HE, THEREFO RE, REQUESTED THAT THE ORDER OF LD. CIT (A) MAY BE CONFIRMED. 3.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. THE AGRICULTURAL LAND WAS PURCHASED BY THE ASSESSEE ON 30.04.2008 BY REGISTERED SALE DEED FOR A SUM OF RS. 57,11,400/-. THE ASSESSEE ALSO RAISED A BANK LOAN OF RS. 2,52,00,000/- AND UTILIZED THE SAME FOR THE PURPOSE OF INVESTMENT IN WIND TURBINE GENERATOR AND ALSO RAISED UNSECURED LOAN OF RS. 1,47,55,000/- DURING THE YEAR, AFTER THE PURCHASE OF LAND, AS IS CLEAR FROM DETAIL S SUBMITTED AT PAGES 7 & 8 OF THE PAPER BOOK. IT IS NOT DISPUTED THAT AT THE TIME OF PURCHASE OF THE LAND ON 30.04.2008, THE ASSESSEE WAS HAVING THE BANK BALANCE OF RS. 2,6 8,21,932/- AND FROM WHERE THE AMOUNT WAS WITHDRAWN BY THE ASSESSEE. IN OUR VIEW, THE ASSESSEE HAS UTILIZED ITS OWN FUND FOR THE PURPOSE OF MAKING THE INVESTMENT IN PU RCHASE OF LAND, AND IS NOT FROM THE BORROWED FUND. THE JUDGMENTS RELIED UPON BY THE AO, IN OUR VIEW, ARE NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE. IN VIEW O F THE ABOVE, WE DISMISS THE 3 ITA NO. 112/JP/2013 A.Y. 2009-10. M/S. SHIV KUMAR SUSHIL KUMAR TEA ENTERPRISES. REVENUES GROUND NO. 1 AND UPHOLD THE ORDER OF LD. CIT (A) WHO HAS RIGHTLY DELETED THE DISALLOWANCE OF RS. 6,85,368/- MADE BY THE AO. 4. GROUND NO. 2 RELATES TO DELETION OF DISALLOWANCE OF RS. 6,05,385/- ON ACCOUNT OF UNDER VALUATION OF CLOSING STOCK. 4.1. THE A.O. WHILE SCRUTINIZING THE DETAILS FILED BY THE ASSESSEE OBSERVED THAT OUT OF TOTAL PURCHASES REFLECTED AT RS. 25,33,66,919/- IN THE TEA ACCOUNT, THE ASSESSEE HAS PURCHASED TEA WORTH RS. 22,63,71,942/- FROM ITS SIS TER CONCERN M/S. PAWAN TRADING COMPANY, WHICH COMPRISES OF ALMOST 90% OF TOTAL PUR CHASES MADE DURING THE YEAR. AS PER DETAILS OF CLOSING STOCK DECLARED AT 121076.89 KG VALUING RS. 1,35,47,421/- AS ON 31.03.2009, IT WAS OBSERVED THE AO THAT STOCK PURCH ASED DURING THE PERIOD 16.03.2009 TO 30.03.2009 FROM M/S. PAWAN TRADING COMPANY, KOTA HAS BEEN GROSSLY UNDERVALUED, AS COMPARED TO TEA PURCHASED FROM M/S. ADITYA TEA C OMPANY, JAIPUR AND M/S. R.C. BAJAJ TEA COMPANY, JAIPUR. WHILE TEA PURCHASED FROM M/S PAWAN TRADING COMPANY, KOTA DURING THE SAID PERIOD RANGES BETWEEN RS. 105. 57 AND RS. 125.90 , TEA WAS PURCHASED FROM M/S. ADITYA TEA COMPANY, JAIPUR ON 2 8.03.2009 @ RS. 133.20. HENCE, THE AO HELD THAT NEITHER THE STOCK REGISTER NOR THE VALUATION OF CLOSING STOCK AS ON 31.03.2009 IS CONSIDERED TO BE RELIABLE. ACCORDING TO AO, AVERAGE RATE OF VALUATION OF CLOSING STOCK OF TEA SHOWN AT 121076.89 KG COMES TO RS. 111.89 PER KG. THE WHOLE OF CLOSING STOCK SHOWN IN THE BALANCE SHEET IS ON ACCO UNT OF PURCHASES MADE BETWEEN THE PERIOD 16.03.2009 TO 31.03.2009. THE A.O. CONSIDERI NG THE AFORESAID FACTS, VALUATION OF CLOSING STOCKS IS REASONABLY AND JUSTIFIABLY INCREA SED BY RS. 5 PER KG ON AN AVERAGE. 4 ITA NO. 112/JP/2013 A.Y. 2009-10. M/S. SHIV KUMAR SUSHIL KUMAR TEA ENTERPRISES. THIS MEANS THAT VALUATION OF CLOSING STOCKS SHOWN A T RS. 1,35,32,081/- WOULD INCREASE BY RS. 6,05,385/-. HENCE, AN ADDITION OF RS. 6,05,3 85/- IS MADE ON ACCOUNT OF UNDER VALUATION OF CLOSING STOCK AND ADDED TO THE ASSESSE ES TOTAL INCOME, WHICH ALSO MEETS WITH THE DECLINE IN GTP AND NP RATES IN THIS FINANC IAL YEAR, AS DISCUSSED ABOVE. 4.2. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATT ER BEFORE LD. CIT (A) WHO DELETED THE DISALLOWANCE BY OBSERVING AS UNDER :- I HAVE GONE THROUGH ASSESSING OFFICERS FINDINGS AND ASSESSEES SUBMISSIONS. THE ASSESSEE HAS MAINTAINED COMPLETE D ETAILS OF STOCK. THE PURCHASES FROM SISTER CONCERN IS ALSO AT LOWER RATE . SO NO DISALLOWANCE WAS JUSTIFIED. THE ASSESSING OFFICER IS, THEREFORE , DIRECTED TO DELETE ADDITION OF RS. 6,05,385/-. THIS GROUND OF APPEAL I S, THEREFORE, ALLOWED. 5. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LD. D/R ARGUED THAT THE AO WAS JUSTIFIED IN MAKING THE ADDITION AS THE ASSESSEE HA S UNDER VALUED THE RATE OF TEA FOR THE PURCHASES MADE FROM THE SISTER CONCERN OF THE ASSES SEE IN COMPARISON TO OTHER PARTIES. THEREFORE, HE SUPPORTED THE ORDER OF AO AND REQUEST ED THAT THE ADDITION MADE BY THE AO BE SUSTAINED. 5.1. PER CONTRA, THE LD. A/R FOR THE ASSESSEE SUPPO RTED THE ORDER OF LD. CIT (A) AND ARGUED THAT THE ASSESSEE HAS MAINTAINED COMPLETE DE TAILS OF STOCK AND PURCHASES FROM SISTER CONCERN AND THE LD. CIT (A) CONSIDERING THAT RECORDS FURNISHED BEFORE HIM, HE DELETED THE DISALLOWANCE. THE LD. A/R PRAYED THAT T HE ORDER OF LD. CIT (A) MAY BE CONFIRMED. 5 ITA NO. 112/JP/2013 A.Y. 2009-10. M/S. SHIV KUMAR SUSHIL KUMAR TEA ENTERPRISES. 5.2. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE WAS MAINTAINING DAY TO DAY BO OKS OF ACCOUNT INCLUDING STOCK REGISTER SUPPORTED BY THE PURCHASE AND SALE BILLS. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS CALLED UPON TO FURNISH QUANTITATIV E DETAILS OF EACH STOCK SHOWING OPENING STOCK, PURCHASES, SALES AND CLOSING STOCK. AS PER THE ASSESSEE, THE SAME WERE PRODUCED. HOWEVER, THE AO HAS FAILED TO POINT OUT A NY DISCREPANCY IN ANY OF THE RECORDS. THE AO OBSERVED THAT NO DETAILS IN RESPECT OF SALE OF VARIETY/QUANTITY-WISE TEA HAS BEEN GIVEN, IN OUR VIEW IS REQUIRED TO BE DISCL OSED BY THE ASSESSEE. THE COST/PURCHASE OF TEA IS DEPENDENT UPON THE VARIETY AND BLENDING OF THE TEA. UNLESS THE RECORD OF VARIETY/BLENDING/QUALITY OF THE TEA IS MA INTAINED BY THE ASSESSEE, IT IS DIFFICULT TO COMPREHEND THAT THE TRUE AND CORRECT VALUATION M AINTAINED BY THE ASSESSEE. AS PER THE RECORD, NO SUCH RECORDS HAVE BEEN MAINTAINED BY THE ASSESSEE. THEREFORE, IN OUR VIEW, THE AO WAS RIGHT IN INCREASING THE VALUATION OF THE CLOSING STOCK BY RS. 5/- PER KG ON AN AVERAGE AND MAKING THE ADDITION ON THAT BASIS . WE FIND THAT THE ORDER PASSED BY THE LD. CIT (A) WAS BEREFT OF ANY REASONING. THE RE ASONING OF THE ASSESSEE IS THAT THE VALUATION OF THE CLOSING STOCK SHALL BE THE VALUE O F THE OPENING STOCK FOR THE NEXT YEAR. AS WE HAVE HELD THAT UNDER VALUATION OF CLOSING STO CK IS JUSTIFIED, IT AUTOMATICALLY BECOMES THE OPENING STOCK OF THE SUBSEQUENT YEAR. THE AO IS DIRECTED TO CONSIDER THE ENHANCED CLOSING STOCK OF A.Y. 2009-10 OPENING STO CK OF A.Y. 2010-11. IN FACT, THE VARIETY, QUALITY AND BLENDING ARE THE PRIMARY FACT WHICH REQUIRED TO BE CONSIDERED FOR VALUING THE STOCKS OF THE ASSESSEE. THEREFORE, WE D O NOT AGREE WITH THE CONTENTION OF 6 ITA NO. 112/JP/2013 A.Y. 2009-10. M/S. SHIV KUMAR SUSHIL KUMAR TEA ENTERPRISES. THE ASSESSEE IN THIS REGARD AND, THEREFORE, REJECT THE CONTENTION OF THE ASSESSEE. THUS WE UPHOLD THE ORDER PASSED BY THE AO AND HELD THAT THE ADDITION OF RS. 6,05,385/- WAS JUSTIFIED. 6. GROUND NO. 3 OF THE REVENUE RELATES TO DELETING THE DISALLOWANCE OF RS. 9,54,650/- ON ACCOUNT OF BROKERAGE EXPENSES. 6.1. THE A.O. CONSIDERING THE TOTALITY OF THE FACTS AND IN VIEW OF THE HONBLE KARNATAKA HIGH COURT DECISION IN THE CASE OF CIT VS . MCDOWELL AND COMPANY LIMITED, 291 ITR 107, BROKERAGE PAID OF RS. 9,54,650/- IS CO NSIDERED TO BE UNREASONABLE, UNJUSTIFIED AND IN-GENUINE. AS THERE IS NO EVIDENCE TO PROVE THAT COMMISSION AGENT RENDERED SERVICE TO THE ASSESSEE, NO DEDUCTION OF C OMMISSION/BROKERAGE IS ALLOWABLE. HENCE, 100% OF THE COMMISSION DEBITED AT RS. 9,54,6 50/- IS DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 6.2. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATT ER BEFORE LD. CIT (A) WHO HAD ALLOWED COMMISSION EXPENSES BY OBSERVING AS UNDER : - I HAVE GONE THROUGH ASSESSING OFFICERS FINDINGS AND ASSESSEES SUBMISSIONS AND ALSO STATEMENTS OF TWO BROKERS, NAM ELY SHRI LEELADHAR MALAV AND SH. RAJENDRA KUMAR GUPTA. BOTH OF THESE BROKERS EXPLAINED THE MODES OPERANDI IN DETAILS, WHICH TO MY MIND APPEARS TO BE PRACTICAL AND AS PER THE BUSINESS PRACTICE AND NOTHING UNUSUAL WAS NOTICED IN THEIR S TATEMENT. IN PAST ALSO COMMISSION WAS PAID TO THESE BROKERS A ND WAS ALLOWED BY ASSESSING OFFICER. CONSIDERING THE FACTS OF THE CASE, NO DISALLOWAN CE WAS JUSTIFIED. 7 ITA NO. 112/JP/2013 A.Y. 2009-10. M/S. SHIV KUMAR SUSHIL KUMAR TEA ENTERPRISES. THE ASSESSING OFFICER IS DIRECTED TO DELETE ADDITIO N OF RS. 9,54,650/-. THIS GROUND OF APPEAL IS, THEREFORE, ALLOWED. 6.3. NOW THE REVENUE IS BEFORE US. THE LD. D/R SUP PORTED THE ORDER OF THE AO AND REQUESTED TO SUSTAIN THE ADDITION. 6.4. THE LD. A/R FOR THE ASSESSEE RELIED ON THE ORD ER OF THE LD. CIT (A) AND CONTENDED THAT THE LD. CIT (A) AFTER CONSIDERING THE EXPLANAT ION GIVEN BY THE BROKERS, HELD THAT THE COMMISSION PAID TO THE BROKERS IS JUSTIFIED AND DEL ETED THE ADDITION. THE LD. A/R REQUESTED TO UPHOLD THE ORDER OF LD. CIT (A). 6.5. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. IT IS AN ADMITTED CASE THAT THE BROKERAGE AGENTS, NAME LY, SHRI LEELADHAR MALAV AND SHRI RAJENDRA KUMAR GUPTA AND ANOTHER WERE WORKING FOR T HE ASSESSEE FOR THE LAST MANY YEARS. THEIR STATEMENTS HAVE BEEN RECORDED AND THE Y HAVE EXPLAINED THE MODUS OPERANDI OF THEIR WORKING AS COMMISSION AGENTS. TH E TDS ON THE COMMISSION PAID TO THESE BROKERS WERE ALSO DEDUCTED. THE COMMISSION AG ENTS HAVE BEEN PAID IN EARLIER YEARS ALSO AND THE BROKERAGE/COMMISSION PAID TO THE COMMISSION AGENTS HAVE BEEN ACCEPTED IN THE ASSESSMENT ORDERS MADE UNDER SECTIO N 143(3) FOR THE A.Y. 2006-07 TO 08-09. IN OUR VIEW, THE REVENUE AS WELL AS THE ASS ESSEE ARE OBLIGED TO FOLLOW THE PRINCIPLES OF CONSISTENCY. ONCE THE REVENUE HAS ACC EPTED THE PAYMENT ON BROKERAGE IN THE PREVIOUS YEAR AND NO OBJECTION WHATSOEVER HAVE BEEN TAKEN, IN OUR VIEW, THE PAYMENT OF BROKERAGE FOR PROMOTING THE SALE OF THE ASSESSEE, SHOULD BE ALLOWED. WE ACCORDINGLY ALLOW THE BROKERAGE EXPENSES. THE GROUN D OF THE REVENUE IS DISMISSED. 8 ITA NO. 112/JP/2013 A.Y. 2009-10. M/S. SHIV KUMAR SUSHIL KUMAR TEA ENTERPRISES. 7. GROUND NO. 4 OF THE ASSESSEE RELATES TO DELETING THE ADDITION OF RS. 14,50,060/- ON ACCOUNT OF DISALLOWANCE OF DISCOUNT TO THE DISTR IBUTORS. 7.1. THE AO IN HIS ORDER MENTIONED THAT AS REGARDS THE RATE OF DISCOUNT, THE ASSESSEE HAS FILED PARTY-WISE DETAILS TO WHOM DISCOUNT HAS B EEN GIVEN, BUT THE RATE VARIES FROM RS. 0.50 PER KG TO RS. 1.45 PER KG. THUS, THERE IS VARIATION OF DISCOUNT RATES TO THE DIFFERENT PARTIES. THE ASSESSEE HAS FURTHER FILED A COPY OF RESOLUTION DATED 25.03.2009, SPECIFYING THEREIN ALLOWANCE OF DIFFERENCE DISCOUNT RATES ON THE BASIS OF GROWTH IN SALES. IT IS WORTH MENTIONING THAT PASSING OF RESOLUTION O N 25.03.2009 FOR PROVISION OF DIFFERENT RATES OF DISCOUNTS IS ONLY A DEVICE ON THE PART OF THE ASSESSEE COMPANY FOR CLAIMING THE EXPENSES WITH THE SOLE PURPOSE OF REDUCING ITS INCO ME AND CONSEQUENTIAL TAX INCIDENCE. IN CASE THE COMPANY WAS SINCERE IN PROVIDING DISCOU NT, THE METHOD OF ALLOWANCE OF DISCOUNT SHOULD HAVE BEEN DECIDED IN THE BEGINNING OF THE YEAR FOR BOOSTERING ITS SALES AND NOT AT THE FAG END OF THE YEAR. THIS IS ONLY A DEVICE TO AVOID TAXES ON THE ACTUAL INCOME. HENCE, ALLOWANCE OF DISCOUNT AT THE HIGHER RATES IS NEITHER GENUINE NOR REASONABLE. AMOUNT OF DISCOUNT HAS BEEN CREDITED TO THE ACCOUNTS OF THE CONCERNED PARTIES ON 31.03.2009, WHICH CANNOT BE ACCEPTED FOR THE BASIC REASON THAT SUCH TYPES OF CONCESSIONS/DISCOUNTS ARE DECIDED IN THE BEGINNI NG OF THE YEAR AND NOT NEAR THE CLOSE OF THE FINANCIAL YEAR. HENCE, THE DISCOUNT AL LOWED IN EXCESS OF RE.050 PER KG IS CONSIDERED EXCESSIVE, UNREASONABLE AND UNJUSTIFIED. THE ASSESSEES GROSS PROFIT RATE AND NET PROFIT RATE HAVE DIPPED TO 16.26% AND 8.07% RESPECTIVELY IN THE YEAR UNDER CONSIDERATION. HENCE, PAYMENT OF DISCOUNT OVER AND ABOVE THE RATE OF 0.5 PER KG IS 9 ITA NO. 112/JP/2013 A.Y. 2009-10. M/S. SHIV KUMAR SUSHIL KUMAR TEA ENTERPRISES. HIGHLY EXCESSIVE AND COMMERCIALLY INEXPEDIENT. HENC E, EXCESS DISCOUNT CLAIMED AT RS. 14,15,060/- (25,83,060 11,68,000) IS DISALLOWED A ND ADDED TO THE ASSESSEES INCOME, BEING AN EXPENDITURE NOT GENUINE AND COMMERCIALLY E XPEDIENT. 7.2. ON APPEAL BEFORE LD. CIT (A), HE DELETED THE A DDITION BY OBSERVING AS UNDER :- I HAVE GONE THROUGH ASSESSING OFFICERS FINDINGS AND ASSESSEES SUBMISSIONS. THE ASSESSEE EXPLAINED THAT RATE OF DI SCOUNT IS DECIDED AFTER CONSIDERING THE GROWTH IN SALE MADE B Y VARIOUS DISTRIBUTORS. IN PAST ALSO THE ASSESSEE WAS FOLLOWI NG THE SAME METHOD AND ASSESSING OFFICER ALLOWED THE EXPENDITUR E. IN MY VIEW NO DISALLOWANCE CAN BE MADE SOLELY ON THE GROUND TH AT THE DISCOUNT WAS DECIDED AT THE END OF YEAR WITHOUT BRI NGING ANYTHING TO DOUBT THE GENUINENESS OF TRANSACTION. THEREFORE THE ASSESSING OFFICER IS DIRECTED TO DELE TE ADDITION OF RS. 14,15,000/-. THIS GROUND OF APPEAL IS, THEREFORE, ALLOWED. 8. NOW THE REVENUE IS BEFORE US. 8.1. THE LD. D/R FOR THE REVENUE HAS OPPOSED THE AR GUMENT OF THE ASSESSEE AND HAS SUPPORTED THE ORDER PASSED BY THE AO. IT WAS ALSO S UBMITTED BY THE LD. D/R THAT THE PRINCIPLE OF RES JUDICATA IS NOT APPLICABLE IN INCO ME TAX. EVERY ASSESSMENT YEAR IS A FRESH ASSESSMENT AND THE AO IS NOT BOUND TO FOLLOW THE PR EVIOUS YEAR. 8.2. PER CONTRA, THE LD. A/R FOR THE ASSESSEE SUBMI TTED THAT IT IS THE CASE OF THE ASSESSEE THAT THE DETAILS OF DISCOUNT GIVEN TO THE DISTRIBUTORS DEPENDING UPON GROWTH IN SALES MADE BY THEM. AS PER THE RESOLUTION OF THE AS SESSEE IF THE GROWTH OF SALE IS ABOUT 10 ITA NO. 112/JP/2013 A.Y. 2009-10. M/S. SHIV KUMAR SUSHIL KUMAR TEA ENTERPRISES. 20%, THE DISCOUNT @ RS. 1.45 PER KG IS GIVEN, WHERE THE GROWTH IS BETWEEN 10-20%, THE DISCOUNT IS @ RS. 1.20 PER KG, WHERE THE GROWTH IS BETWEEN 5-10%, THE DISCOUNT IS @ RS. 0.95 PER KG AND WHERE THE GROWTH IS LESS THAN 5%, THE DISCOUNT IS @RS. 0.50% PER KG. IN THE ASSESSMENT YEAR 2008-09, THE DISCOU NT OF RS. 27,47,260/- WAS ALLOWED IN THE ASSESSMENT ORDER FRAMED UNDER SECTION 143(3) . IT IS ALSO CONTENDED THAT THE REVENUE SHOULD FOLLOW THE PRINCIPLE OF CONSISTENCY AND SHOULD ALLOW THE DISCOUNT IN THIS ASSESSMENT YEAR. 8.3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. IN OUR VIEW THE BASIS OF OFFERING THE DISCO UNT TO THE DISTRIBUTORS IS TO PROMOTE THE SALES DURING THE FINANCIAL YEAR AND IN OUR VIEW , HAS RIGHTLY CONTENDED BY THE ASSESSEE THE BASIS OF GIVING THE BROKERAGE TO 3 PER SONS AS MENTIONED HEREIN ABOVE IN GROUND NO. 3 IS ALSO FOR THE PURPOSE OF PROCURING T HE ORDERS FROM THE RETAILERS FOR SUPPLY OF GOODS. THUS, IN FACT, UNDER BOTH THE HEADS THE BROKERAGES AS WELL AS THE DISCOUNTS ARE BEING PAID FOR THE PURPOSE OF PROCURING THE ORD ERS/BOOSTERING THE SALES. IN OUR VIEW, EITHER THE BROKERAGE SHOULD BE ALLOWED OR THE DISCOUNT TO THE DISTRIBUTORS SHOULD BE ALLOWED. THE ASSESSEE CANNOT BE PERMITTED TO HAV E THE BENEFIT OF BROKERAGE AS WELL AS OF THE DISCOUNT OFFERED TO THE DISTRIBUTORS. BOT H THE FACTORS OPERATE IN THE SAME FIELD, AND ARE OVER-LAPPING IN NATURE. THEREFORE, WE ALLOW THE GROUND OF THE REVENUE AND SET ASIDE THE ORDER PASSED BY LD. CIT (A). 9. GROUND NOS. 5 RELATES TO DELETION OF ADDITION OF RS. 2,00,000/- ON ACCOUNT OF DISALLOWANCE OF CONSULTANCY CHARGES TO SHRI KAMAL K UMAR HISARIYA. 11 ITA NO. 112/JP/2013 A.Y. 2009-10. M/S. SHIV KUMAR SUSHIL KUMAR TEA ENTERPRISES. 9.1. THE AO WHILE MAKING THE ASSESSMENT NOTICED THA T CONSULTANCY CHARGES OF RS. 3,00,000/- HAS BEEN PAID TO SHRI KAMAL KUMAR HISARI YA FOR SUPERVISION OF THE SITES OF WIND POWER PROJECT. IT IS STATED THAT THE FEE HAS B EEN PAID FOR PROVIDING HIS SERVICES RELATING TO LIAISONING WITH SUZLON ENERGY LTD. AND O THER CONTRACTORS FOR OPERATION AND MAINTENANCE, LIAISONING WITH GOVERNMENT AUTHORITIES FOR OPERATION OF THE PLANT, BILL FOR ELECTRICITY, ARRANGING INSPECTION OF THE MACHINE FR OM GOVERNMENT AUTHORITIES FROM TO TIME AS PER THEIR REQUIREMENT, OBTAINING BANK FINAN CE IN RELATION TO THE PLANTS ETC. THE AFTER EXAMINING THE ISSUE, HAS HELD THAT SHRI KAMAL KUMAR HISARIYA IS A COMMERCE GRADUATE AND APPARENTLY DOES NOT HAVE ANY EXPOSURE TO WIND MILL POWER PROJECTS. NO SUPPORTING EVIDENCE HAS BEEN FURNISHED PROVING THAT SHRI KAMAL KUMAR HISARIYA HAS DISCHARGED HIS DUTIES. THE AO CONSIDERING THAT IN E ARLIER YEAR ALSO SIMILAR AMOUNT HAS BEEN CLAIMED, HE RESTRICTED THE CLAIM OF THE ASSESS EE TO RS. 2,00,000/-. 9.2. AGGRIEVED, THE ASSESSEE APPEALED BEFORE LD. CI T (A) WHO DELETED THE ADDITION OF RS. 2,00,000/- BY OBSERVING AS UNDER :- I HAVE GONE THROUGH ASSESSING OFFICERS FINDINGS AND ASSESSEES SUBMISSIONS. IT WAS SEEN THAT SH. KAMAL HISARIYA WAS WORKING WIT H THE COMPANY SINCE LONG AND HAS EXPERIENCE OF SUPERVISING EARLIE R WIND POWER PLANTS AND HAS LONG EXPERIENCE OF BUSINESS. PAYMENT OF RS. 3,00,000/- TO HIM DOES NOT APPEAR TO BE EXCESSIVE. THEREFORE THE ASSESSING OFFICER IS DIRECTED TO DELE TE ADDITION OF RS. 2,00,000/-. THIS GROUND OF APPEAL IS, THEREFORE, ALLOWED. 12 ITA NO. 112/JP/2013 A.Y. 2009-10. M/S. SHIV KUMAR SUSHIL KUMAR TEA ENTERPRISES. 10. NOW THE REVENUE IS BEFORE US. THE LD. D/R SUPP ORTED THE ORDER OF THE AO AND REQUESTED THAT THE ADDITION MADE BY THE AO BE RESTO RED. 10.1. ON THE OTHER HAND, THE LD. A/R FOR THE ASSESS EE CONTENDED THAT THE LD. CIT (A) HAS RIGHTLY DELETED THE ADDITION TAKING INTO CONSID ERATION THAT SHRI KAMAL KUMAR HISARIYA WAS HAVING A CONSIDERABLE EXPERIENCE IN THE LINE OF WIND POWER PLANT AND THE PAYMENT OF RS 3,00,000/- IS NOT EXCESSIVE. THE LD. A/R THER EFORE, REQUESTED TO CONFIRM THE ORDER OF THE LD. CIT (A). 10.2. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL ON RECORD. THE INCOME EARNED FROM THE WIND POWER PROJECTS IS EXEMP TED. THEREFORE, IN OUR VIEW, THE EXPENSES IN THE FORM OF CONSULTANCY CHARGES OF RS. 3,00,000/- CANNOT BE ALLOWED ON THE PRINCIPLE THAT ONCE THE INCOME IS NOT TO BE TAXED, THE EXPENSES FOR EARNING THE EXEMPTED INCOME ARE ALSO TO BE DISALLOWED. THEREFOR E, WHILE UPHOLDING THE ORDER OF THE AO, RESTRICT THE ADDITION TO RS. 1,00,000/-. 11. GROUND NO. 6 RELATES TO RESTRICTING THE ADDITIO N TO RS. 88,776/- ON ACCOUNT OF DISALLOWANCE OF DELIVERY EXPENSES. 11.1. THE A.O. HAS DISALLOWED THE DELIVERY EXPENSES TO THE TUNE OF RS. 1,47,961/- OUT OF TOTAL EXPENSES INCURRED OF RS. 2,95,922/- ON THE GROUND THAT EXPENSES ARE NOT SUPPORTED BY PROPER BILLS/VOUCHERS AND PAYMENTS WER E MADE IN CASH. 11.2. ON APPEAL, THE LD. CIT (A) CONSIDERING THE NO N-VERIFIABLE NATURE OF EXPENSES, RESTRICTED THE DISALLOWANCE @ 20% AND DIRECTED THE AO TO ALLOW DISALLOWANCE OF RS.88,776/-. 13 ITA NO. 112/JP/2013 A.Y. 2009-10. M/S. SHIV KUMAR SUSHIL KUMAR TEA ENTERPRISES. 12. NOW THE REVENUE IS BEFORE US. 12.1. WE HAVE HEARD THE RIVAL SUBMISSIONS. CONSIDER ING THE NATURE OF EXPENSES, WE DO NOT FIND IT NECESSARY TO INTERFERE WITH THE ORDER O F LD. CIT (A), THE SAME IS UPHELD. THE DISALLOWANCE IS CONFIRMED. 13. IN THE RESULT, REVENUES APPEAL IS PARTLY ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/11/201 5. 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:- 27/11/2015 DAS/ VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE ACIT, CIRCLE-1, KOTA. 2. IZR;FKHZ @ THE RESPONDENT- M/S. SHIV KUMAR SUSHIL KUMAR TEA ENTE RPRISES PVT. LTD., KOTA. 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.112/JP/2013) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR