M/s Chittosho Motors, Patiala V. ACIT, Patiala

ITA 1129/CHANDI/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80901 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 10-09-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 05-11-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR
• Keywords: Proportionate interest
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 1129/CHD/2012 ASSESSMENT YEAR: 2008-09 THE CHITTOSHO MOTORS, VS. THE ACIT, SIRHIND ROAD CIRCLE, PATIALA PATIALA PAN NO. AACFC8334M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. TEJ MOHAN SINGH RESPONDENT BY : SHRI J.S. NAGAR DATE OF HEARING : 10/09/2014 DATE OF PRONOUNCEMENT : 17/09/2014 ORDER PER T.R.SOOD, A.M. THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINS T THE ORDER PASSED BY THE LD. CIT(A), PATIALA ON 03/09/2012 . 2. IN THIS APPEAL REVENUE HAS RAISED FOLLOWING GROU NDS: 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE ADDITIO N OF RS. 9,21,687/- MADE ON ACCOUNT OF ALLEGED DIFFERENCE IN VALUATION OF CLOSING STOCK OF SPARE PARTS AND LUBRICATIONS WH ICH IS ARBITRARY AND UNJUSTIFIED. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS FURTHER ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDI NG THE DISALLOWANCE OF RS. 13,47,498/- ON ACCOUNT OF PROPO RTIONATE 2 INTEREST ON INTEREST FREE ADVANCES TO WHICH IS ARBI TRARY AND UNJUSTIFIED. 3. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN NOT APPRECIATING THE BUSINESS EXIGENCIES AND COM MERCIAL EXPEDIENCY IN RESPECT OF THE AFORE MENTIONED ADVANC ES IN THE CORRECT PERSPECTIVE AND AS SUCH THE ORDER PASSED IS ARBITRARY AND UNJUSTIFIED. 4. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS FURTHER ERRED IN UPHOLDING AN ADDITION-HOC ADDITION OF RS. 2,00,000/- OUT OF GENERAL EXPENSES CLAIMED AT RS. 3 ,32,486/- WHICH IS ARBITRARY AND UNJUSTIFIED. 5. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS FURTHER ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDI NG THE AD- HOC ADDITION OF RS. 1,00,000/- OUT OF PRINTING AND STATIONARY ACCOUNT WHICH IS ARBITRARY & UNJUSTIFIED. 6. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS FURTHER ERRED IN UPHOLDING THE CHARGING OF INTEREST UNDER SECTION 234-A & 234-B OF THE ACT WHICH IS NOT CHARG EABLE IN THE FACTS OF THE CASE.. 3. GROUND NO.1. AFTER HEARING BOTH THE PARTIES WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICE D THAT ASSESSEE HAS SHOWN CLOSING STOCK OF SPARE PARTS AND LUBRICANTS IN HEAD OFFICE AT RS. 97,37,146/- CONSISTING OF 2864 ITEMS. INVENTORY LIST WAS FURNI SHED IN RESPECT OF SPARE PARTS BUT IN RESPECT OF LUBRICANTS AND ACCESSORIES NO DET AILS WERE FURNISHED AND THE STOCK OF THESE ITEMS WAS CONSISTED OF RS. 6,78,765 /-. IT WAS FURTHER NOTICED THAT ASSESSEE WAS NOT MAINTAINING STOCK RESISTER FROM DA Y TO DAY AND, THEREFORE, THE CONSUMPTION OR ISSUE OF SPARE PARTS WITH REFERENCE TO BILLS AGAINST THE CUSTOMERS COULD NOT BE VERIFIED. IT WAS FURTHER NOTED THAT PR ICE OF CERTAIN SPARE PARTS WAS SHOWN AT TOO LOW RATES RANGING BETWEEN RS. 0.80 TO RS. 4.00 VIZ SCREW TAPPING RS.0.80, PIN SPLIT RS. 1.61, STRTR RUBBER A KIC K RS. 4.00, BALL STEEL 3 RS. 0.60 ADDITION SO ON. NO BILLS WERE SUBMITTED F OR THESE SMALL ITEMS FOR VERIFICATION. DESPITE REPEATED REQUESTS BILLS WERE NOT SUBMITTED FOR VERIFICATION OF THE COST PRICE. HOWEVER, IT WAS CONTENDED ON BE HALF OF THE ASSESSEE THAT IN THIS YEAR THE OVERHEAD EXPENSES HAVE ALREADY BEEN A DDED TO ARRIVE AT THE COST PRICE WHILE PREPARING INVENTORY AT COST PRICE. IT W AS POINTED OUT THAT CIT(A) HAS CONSIDERED THE PLEA OF THE ASSESSEE AND DIRECTED TO RESTRICT 1/5 TH OF THE TOTAL ADDITION. THE ASSESSING OFFICER DID NOT ACCEPT THE SE SUBMISSIONS AND WAS OF THE OPINION THAT 5% OF THE VALUE OF THIS COST SHOULD BE ADDED TO THE CLOSING STOCK AND ACCORDINGLY ADDED A SUM OF RS. 9,21,687/- TO TH E INCOME OF THE ASSESSEE. 4. ON APPEAL, IT WAS MAINLY CONTENDED THAT IDENTICA L ISSUE WAS CONSIDERED BY THE TRIBUNAL FOR ASSESSMENT YEARS 2006-07 AND 2007- 08 AND ADDITIONS WERE DELETED BY THE TRIBUNAL. THE LD. CIT(A) DID NOT AG REE AND OBSERVED THAT THE PRESENT CASE WAS DISTINGUISHABLE BECAUSE THE ASSES SEE HAS NOT FURNISHED THE BILLS. THE LD. CIT(A) ULTIMATELY DECIDED THE ISSUE VIDE PARA 4.3 OF HIS ORDER, WHICH IS AS UNDER:- 4.3 I HAVE CONSIDERED THE SUBMISSION MADE AND GONE THROUGH THE ASSESSMENT ORDER. THERE IS A VERY IMPOR TANT DIFFERENCE FROM THE FACTS IN THE PRECEDING YEAR. IN THE PREVIOUS YEAR, HONBLE ITAT DELETED THE ADDITION ON THE BASIS THAT THE APPELLANT HAS MAINTAINED COMPUTERIZED DETA ILS IN RESPECT OF VALUATION OF CLOSING STOCK OF SPARE PART S AND BECAUSE THE APPELLANT HAS INCLUDED THE ALLIED CHARG ES I.E. FRIGHT AND INSURANCE AND SALES TAX IN THE COST PRIC E TO WORK OUT THE VALUE AT THE CLOSE OF THE YEAR. HOWEVER, IN THIS YEAR THE APPELLANT FAILED TO PRODUCE THE PURCHASE BILLS FOR VERIFICATION OF RATES I.E. THE COST PRICE OF THE IT EMS. THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDIN GS FAILED TO PRODUCE THE SAME STATING THOSE BEING OLD ITEMS A ND QUITE A LARGE NUMBER. FURTHER THE DETAILS OF ITEMS ARE NOT MENTIONED IN THE SERVICE VOUCHERS. ON BEING CONFRONTED, THE APPELLANT STATED THAT THE LD. CIT(A) HAS RESTRICTED THE DISAL LOWANCE TO 4 1/5 TH OF TOTAL ADDITION MADE IN THE PRECEDING YEAR WHICH MAY BE CONSIDERED. HOWEVER AS THE INVENTORY OF ITEMS WE RE NOT SUBJECT TO VERIFICATION, THE A.O. MADE AN ADDITION @ 5% AT RS. 9,21,687/-. THEREFORE THE FACTS OF THE CASE IS NOT SIMILAR TO PREVIOUS YEAR. DURING THE APPELLATE PROCEEDINGS ALSO THE APPELLANT STATED THAT SPARE PART BILLS OF OLD SMALL ITEMS WERE NOT TRACEABLE INSTANTLY. IN VIEW OF THIS, THE FACTS ARE DIFFERENT FROM THE PREVIOUS YEAR AND UNDER THE FACTS & CIRCUM STANCES OF THE CASE I AM OF THE OPINION THAT A.O. HAS RIGHT LY MADE THE ADDITION 5. BEFORE US LD. COUNSEL FOR THE ASSESSEE REITERATE D THE SUBMISSIONS MADE BEFORE THE LD. CIT(A). HE FURTHER REFERRED TO THE O RDER OF THE TRIBUNAL COPY OF WHICH IS AVAILABLE AT PAGES 169 TO 180 AND POINTED OUT THAT SIMILAR ADDITION WAS DELETED. 6. ON THE OTHER HAND, LD. DR SUBMITTED THAT CIT(A) HAS ALREADY DISTINGUISHED THE DECISION OF THE TRIBUNAL BECAUSE ASSESSEE HAS NOT FURNISHED THE BILLS. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT THIS ISSUE WAS ADJUDICATED BY THE TRIBUNAL VIDE PARAS 15 & 16, WH ICH ARE AS UNDER;- 15. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE RECORDS. THE ISSUE OF VALUATION OF CLOSING STOCK I S ON ACCOUNT OF STOCK OF MOTOR CYCLES AND STOCK OF SPARE PARTS. THE ASSESSEE HAS MAINTAINED ITEM WISE, QUANTITATIVE DET AILS OF THE VARIOUS MODELS OF MOTOR CYCLES AVAILABLE IN THE STO CK AT THE END OF THE YEAR. THE VALUATION OF THE STOCK OF MOTO R CYCLES HAS BEEN DONE BY THE ASSESSEE BY ADOPTING THE COST AND THE ALLIED CHARGES AS PART OF THE COST AND WORKED OUT THE TOTA L VALUE OF THE PARTICULAR MODEL OF MOTOR CYCLE. FROM THE PE RUSAL OF DETAILS FURNISHED AT PAGE 30 OF THE PAPER BOOK, WE FIND THAT THE COST OF THE MOTOR CYCLES IS VARIABLE VIZ-A-VIZ THE MODEL OF THE MOTOR CYCLE. THE VALUATION WORKED OUT BY THE ASSESSEE IS 5 FURTHER BACKED BY THE BILLS MAINTAINED BY THE ASSES SEE. THE ASSESSING OFFICER, HOWEVER, WORKED OUT THE AVERAGE COST AFTER CONSIDERING PURCHASE OF A PARTICULAR MODEL OF MOTOR CYCLE AND ADOPTED THE SAME FOR WORKING OUT THE VALUATION OF T HE TOTAL STOCK AT THE CLOSE OF THE YEAR. WE ARE IN CONFORMI TY WITH THE ORDER OF CIT(A) THAT THERE IS NO MERIT IN THE ADDIT ION OF RS. 5,04,235/- AS NO DEFECT IN THE WORKING OF CLOSING S TOCK OF THE MOTOR CYCLE HAD BEEN POINTED OUT BY THE ASSESSING O FFICER IN HIS COUNTER COMMENTS. WE UPHOLD THE CIT(A) IN THI S REGARD AND DISMISS THE GROUND NO. 4 & 5 RAISED BY THE REVE NUE. 16. THE SECOND ASPECT IS IN CONNECTION WITH VALUATI ON OF STOCK OF SPARE PARTS. THE ASSESSEE HAS MAINTAINED ITEM WISE QUANTITATIVE DETAILS OF CLOSING STOCK OF THE SPARE PARTS COPY OF WHICH IS FILED ON RECORD. THE ASSESSEE HAS INCLUD ED THE ALLIED CHARGES I.E. FREIGHT AND INSURANCE AND SALES TAX IN THE COST PRICE TO WORK OUT THE VALUE AT THE CLOSE OF THE YEA R. IN THE TOTALITY OF FACTS AND CIRCUMSTANCES AND AS THE ASSE SSEE HAD SHOWN HIGHER GP RATE DURING THE YEAR UNDER CONSIDER ATION, AND IN VIEW OF THE FINDING OF THE CIT(A) THAT THE A SSESSEE HAS MAINTAINED COMPUTERIZED DETAILS IN RESPECT OF VALUA TION OF CLOSING STOCK OF SPARES PARTS, WE FIND NO MERIT IN THE ORDER OF CIT(A) IN RESTRICTING THE ADDITION TO 20% OF ADDITI ON MADE BY THE ASSESSING OFFICER. THE BASIS FOR MAKING THE AD DITION BY THE ASSESSING OFFICER WAS THE NON-INCLUSION OF ALLI ED EXPENSES IN THE COST OF SPARE PARTS AND ITS RELIANCE ON A BI LL OF A PURCHASE OF AN ITEM WHICH IS NOT AVAILABLE AT THE C LOSE OF THE YEAR. ACCORDINGLY, WE SET ASIDE THE ORDER OF CIT(A ) ON THIS ACCOUNT AND ACCEPT THE VALUATION OF CLOSING STOCK O F SPARE PARTS SHOWN BY THE ASSESSEE IN ENTIRETY. THE GROUN D NO.2 RAISED BY THE ASSESSEE IS THUS ALLOWED. READING OF THE ABOVE WOULD CLEARLY SHOW THAT RELIEF WAS GRANTED ON THE BASIS OF GP RATIO, WHICH WERE COMPARABLE. IN THE PRESENT YE AR, THE GP RATE REMAINS COMPARABLE, HOWEVER, AT THE SAME TIME IT CANNOT BE IGNORED THAT ASSESSEE HAS NOT FURNISHED THE BILLS OF CERTAIN ITEMS FOR VERIFICATI ON OF THE COST, THEREFORE, IN OUR OPINION, ADDITION OF RS. 50,000/- WOULD BE JUSTIFI ED AS OTHERWISE THE GP RATE IS COMPARABLE TO THE EARLIER YEARS. ACCORDINGLY WE SET ASIDE THE ORDER OF CIT(A) 6 AND DIRECT THE ASSESSING OFFICER TO MAKE ADDITION O F RS. 50,000/- ON ACCOUNT OF STOCK. 8. GROUND NO 2 & 3: AFTER HEARING BOTH THE PARTIE S WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICE D THAT ASSESSEE HAS ADVANCED A SUM OF RS. 1,65,36,544/- TO M/S CHITTOSH O FINANCE, ITS EMPLOYEES AND PARTNERS. IT WAS FURTHER NOTICED THAT ASSESSEE HAS MADE BORROWING AND PAID HUGE AMOUNT OF INTEREST. THEREFORE, A SHOW CAUSE NO TICE WAS ISSUED TO THE ASSESSEE THAT WHY PROPORTIONATE INTEREST SHOULD NOT BE DISALLOWED. IN RESPONSE, IT WAS MAINLY SUBMITTED THAT M/S CHITTOSHO FINANCE PVT LTD WAS PROMOTED BY PARTNERS OF THE FIRM S/SHRI MANDEEP SINGH DHALIWAL AND SUKHDEV SINGH DHALIWAL. THIS COMPANY HAS TO EXTEND LOAN TO CUST OMERS OF THE ASSESSEE COMPANY FOR PURCHASE OF TWO WHEELERS AND FOUR WHEEL ERS ON ZERO FINANCE INTEREST BUT BECAUSE OF THE RBI GUIDELINES, M/S CHI TTOSHO FINANCE COULD NOT START OPERATIONS, THEREFORE, LOAN WAS CLEARLY FOR B USINESS PURPOSES. SIMILARLY, ADVANCES GIVEN TO THE EMPLOYEES WHICH WERE IN THE I NTEREST OF BUSINESS. THE ASSESSING OFFICER DID NOT FIND FORCE IN THESE SUBMI SSIONS AND OBSERVED THAT ASSESSEE CLEARLY GIVEN ADVANCES TO SISTER CONCERN W ITHOUT CHARGING THE INTEREST. HE REFERRED TO THE OBSERVATIONS OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF ABHISHEK INDUSTRIES PVT LTD. 286 ITR 1. IN THE LIGHT OF THESE OBSERVATIONS, THE ASSESSING OFFICER DISALLOWED THE PROPORTIONATE INTEREST AMOUNTING TO RS. 13,47,498/-. 9. ON APPEAL, SIMILAR SUBMISSIONS WERE MADE BEFORE LD. CIT(A). THE LD. CIT(A) IN THE LIGHT OF THE OBSERVATIONS OF THE HON 'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF M/S ABHISHEK INDUSTRIES LTD (S UPRA) CONFIRMED THE ADDITION. . 10. BEFORE US, LD. COUNSEL FOR THE ASSESSEE REITERA TED THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER AND CIT(A) AND VEHEMEN TLY ARGUED THAT ADVANCES WERE GIVEN FOR THE PURPOSE OF BUSINESS. 7 11. ON THE OTHER HAND LD. DR STRONGLY SUPPORTED THE ORDER OF ASSESSING OFFICER AND CIT(A). 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY AND DO NOT AGREE WITH THE SUBMISSION OF LD. COUNSEL FOR THE ASSESSEE BECA USE NO BUSINESS PURPOSE OR EXPEDIENCY HAS BEEN BROUGHT BEFORE US. ADMITTEDLY, THE ASSESSEE WAS HAVING INTEREST BEARING FUNDS GIVEN TO THE SISTER CONCERN AND PARTNERS WITHOUT CHARGING INTEREST, THEREFORE, PROPORTIONAL DISALLOWANCE HAS TO BE MADE IN THE LIGHT OF THE RATIO LAID DOWN BY THE HON'BLE PUNJAB & HARYANA HI GH COURT IN THE CASE OF ABHISHEK INDUSTRIES (SUPRA). IN THAT CASE IT WAS HELD AS UNDER:- (I) THAT THE SHARE CAPITAL IS MEANT TO BE USED FO R PRODUCTIVE USE IN THE BUSINESS. IF THE SHARE CAPITAL, ACCORDING TO THE ASSESSEE, WAS SURPLUS AND IT COULD PART WITH THE SAME TO ITS SIST ER CONCERN FOR NON-BUSINESS PURPOSE WITHOUT ANY INTEREST, THERE WA S NO NEED TO RAISE THE LOANS TO THAT EXTENT AND THE AMOUNT OF SU CH SHARE CAPITAL SHOULD HAVE BEEN UTILISED FOR THE PROJECT ITSELF. I N CASE THE ASSESSEE HAD NOT ADVANCED LOANS TO ITS SISTER CONCERN ON INT EREST-FREE BASIS, EVEN IF THE ALLEGED SURPLUS AMOUNT COULD NOT BE REP AID TO THE FINANCIAL INSTITUTION BEFORE THE SCHEDULED DATE AS FAR AS THE TERM LOAN WAS CONCERNED, THE INTEREST BEING PAID BY THE ASSESSEE ON THE WORKING CAPITAL COULD HAVE CERTAINLY BEEN SAVED TO THAT EXTENT. THE BORROWING OF THE FUNDS BY THE COMPANY TO THAT EXTEN T WAS NOT FOR THE PURPOSE OF BUSINESS AND THERE WAS NOTHING ON RE CORD TO SUGGEST THAT AMOUNTS WERE ADVANCED TO THE SISTER CONCERNS T O ADVANCE SOME BUSINESS OBJECT. ACCORDINGLY, THE ASSESSEE WAS NOT ENTITLED TO CLAIM DEDUCTION OF THE INTEREST ON THE BORROWINGS TO THE EXTENT THOSE WERE DIVERTED TO SISTER CONCERNS OR OTHER PERSONS WITHOU T INTEREST. THEREFORE, FOLLOWING THE ABOVE DECISION WE CONFIRM THE ADDITION AND UPHOLD THE ORDER OF LD. CIT(A). 13. GROUND NO.4: AFTER HEARING BOTH THE PARTIES WE FIND THAT DURING ASSESSMENT PROCEEDINGS ASSESSING OFFICER NOTICED TH AT ASSESSEE HAS CLAIMED GENERAL EXPENSES AMOUNTING TO RS. 3,32,486/-. THE ASSESSEE WAS ASKED TO 8 PRODUCE THE DETAILS ALONG WITH DOCUMENTARY EVIDENCE BUT NO SUCH BILLS / VOUCHERS OR EVIDENCE WAS PRODUCED, THEREFORE, ASSES SING OFFICER DISALLOWED A SUM OF RS. 2 LAKHS OUT OF THESE EXPENSES. 14. ON APPEAL, IT WAS MAINLY SUBMITTED THAT NET PRO FIT OF THE ASSESSEE HAS INCREASED, THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE IN THIS HEAD. IT WAS ALSO POINTED OUT THAT TRIBUNAL HAS PARTLY ALLOWED THE RE LIEF IN ASSESSMENT YEAR 2007- 08 IN ITA NO. 525/CHD/2011. HOWEVER, THE LD. CIT (A) DID NOT FIND FORCE IN THESE SUBMISSIONS BECAUSE THE ASSESSEE HAS FAILED T O PROVIDE ANY EVIDENCE BEFORE THE ASSESSING OFFICER. 15. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITT ED THAT OUT OF THE ADDITION OF RS. 1 LAKHS FOR GENERAL EXPENSES ETC., THE SAME WAS REDUCED BY THE TRIBUNAL IN ASSESSMENT YEAR 2007-08 IN ITA NO. 525/CHD/2011. 16. ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORD ER OF ASSESSING OFFICER. 17. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT FOR ASSESSMENT YEAR 2007-08, THE ADDITION WAS RESTRICTED BY TRIBUNAL TO 80,000/- OUT OF THE ABOVE ADDITION OF RS. 1 LAKH. THE ASSESSEE HAS NOT ABLE TO FURNISH THE DETAILS AND EVIDENCE OF GENERAL EXPENSES BUT AT THE SAME TIME I T HAS TO BE REMEMBERED THAT IN RESPECT OF GENERAL EXPENSES LIKE TEA OF THE STAF F ETC., NO EVIDENCE IS POSSIBLE. THEREFORE, IN THE TOTALITY OF FACTS, WE ARE OF THE VIEW THAT IF ADDITION OF RS. 1 LAKH IS MADE, THE SAME WOULD MEET THE ENDS OF JUSTI CE. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD. CIT(A) AND DIRECT THE ASSESS ING OFFICER TO MAKE ADDITION OF RS. 1 LAKH OUT OF GENERAL EXPENSES. 18. GROUND NO.5 : AFTER HEARING BOTH THE PARTIES WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICE D THAT ASSESSEE HAS CLAIMED THE EXPENDITURE ON PRINTING AND STATIONERY. IT WAS FURTHER NOTICED THAT NO STOCK 9 HAS BEEN SHOWN. IN RESPECT OF THE QUERY, IT WAS MAI NLY STATED THAT EXPENSES HAVE BEEN INCURRED FOR THE PURPOSE OF BUSINESS. THE ASSESSING OFFICER OBSERVED THAT REPLY OF THE ASSESSEE IS OF GENERAL NATURE AND HE DISALLOWED A SUM OF RS. 1 LAKH OUT OF STATIONARY EXPENSES. ON APPEAL, THE ADD ITION WAS CONFIRMED BY LD. CIT(A). 19. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITT ED THAT SIMILAR ISSUE WAS RAISED BEFORE THE TRIBUNAL IN ASSESSMENT YEAR 2007- 08 IN ITA NO. 525/CHD/2011 WHERE PART OF THE ADDITION WAS DELETED. 20. ON THE OTHER HAND, THE LD. DR STRONGLY SUPPORTE D THE ORDER OF CIT(A). 21. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT IN ITA NO. 525/CHD/2011 IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2007-08, THE ADDITION WAS RESTRICTED TO RS. 50,000/-. FOLLOWING THAT ORDE R, WE SET ASIDE THE ORDER OF LD. CIT(A) AND DIRECT THE ASSESSING OFFICER TO MAKE ADDITION OF RS. 50,000/- OUT OF THE PRINTING AND STATIONARY EXPENSES. 22. GROUND NO.6: THE ISSUE REGARDING LEVY OF INTER EST U/S 234A AND 234B IS OF CONSEQUENTIAL IN NATURE AND, THEREFORE, THE ASSE SSING OFFICER IS DIRECTED TO CHARGE THE INTEREST IN ACCORDANCE TO THE PROVISIONS OF LAW. 23. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED ON 17.09.2014 SD/- SD/- (SUSHMA CHOWLA) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMER DATED : 17 TH SEPTEMBER, 2014 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 10