M/S. SWASTIK OIL INDUSTRIES, TONK V. DCIT, CIRCLE-7, , JAIPUR

ITA 1179/JPR/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2666 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 09-10-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: DEVANG GARGIEYA ITP
• Keywords: Rejection of books of accounts; Fair market value; Commercial expediency; TDS
• Section: 143(3); 201; 72; 13; 145(3); 145

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC HES B, JAIPUR JH LAANHI XKSLKBZ] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA- @ ITA NOS. 1179 & 1180/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2013-14 & 2014-15 M/S SWASTIK OIL INDUSTRIES, F-5 TO 8, INDUSTRIAL AREA, NEWAI, TONK CUKE VS. DCIT, CIRCLE-07, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAJFS8180J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SH. MAHENDRA GARGIEYA (ADV.) & SH. DEVA NG GARGIEYA (ITP) JKTLO DH VKSJ LS @ REVENUE BY : SMT. RUNI PAL (ADDL.CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 18/06/2021 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 22/06/2021 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THESE ARE TWO APPEALS FILED BY THE ASSESSEE AGAINST THE ORDERS OF LD. CIT(A)-03, JAIPUR DATED 13.09.2019 FOR A.YS 2013-14 & 2014-15 RESPECTIVELY. SINCE COMMON ISSUES ARE INVOLVED, BOT H THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS C ONSOLIDATED ORDER. 2. FIRSTLY, WE TAKE UP ASSESSEES APPEAL FOR A.Y 2 013-14 IN ITA NO. 1180/JP/2019 WHEREIN THE ASSESSEE HAS TAKEN FOLLOWI NG GROUNDS OF APPEAL: 1. THE IMPUGNED ORDER U/S 143(3) DATED 31.03.2016 IS BAD IN LAW AND ON FACTS OF THE CASE, FOR WANT OF JURISDICTION AND FOR VARIOUS OTHER REASONS ITA NOS.1179 & 1180/JP/2019 M/S SWASTIK OIL INDUSTRIES, TONK VS. DCIT, CIRCLE-0 7, JAIPUR 2 AND HENCE THE SAME MAY KINDLY BE QUASHED AND IN ANY CASE, THE IMPUGNED ADDITION/S BE DELETED. 2.1 RS. 1,50,000/-: THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE APPLICATION OF SECTION 1 45(3). THE PROVISION SO INVOKED AND CONFIRMED BY THE CIT(A) BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, THE SAME MAY KINDLY BE QUASHED. CONS EQUENTLY, THE TRADING ADDITION PARTLY CONFIRMED BY THE LD. CIT(A) OF RS. 1,50,000/- MAY KINDLY BE DELETED IN FULL. 2.2. ALTERNATIVELY AND WITHOUT PREJUDICE THE ABOVE THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN PARTLY CONFIRMING THE TRADING ADDITION UPTO RS. 1,50,000/- OUT OF RS. 9,44,277/- MADE BY THE AO. THE ADDITION SO MADE AND PARTLY CON FIRMED BY THE CIT(A) BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, THE SAME MAY KINDLY BE DELETED IN FULL. 3. RS. 1,02,656/-: THE LD. CIT ALSO ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN FULLY CONFIRMING THE DISALLOWANCES M ADE BY THE AO OUT OF THE FOLLOWING EXPENSES CLAIMED BY THE ASSESSEE: S. NO. HEAD OF EXPENSES EXPENSES CLAIMED BY THE ASSESSEE DISALLOWED BY THE LD. AO DISALLOWANCE (RS.) 3.1 TELEPHONE EXPENSES RS. 1,34,874/ - 10% OF TOTAL EXPENSES CLAIMED I.E. RS. 10,26,581/- 13,487/ - 3.2 TRAVELLING EXPENSES RS. 1,15,898/ - 11,589/ - 3.3 BUILDING REPAIR & MAINTENANCE EXPENSES RS. 5,77,516/ - 57,751/ - 3.4 OFFICE EXPENSES RS. 1,98,293/ - 19,829/ - TOTAL RS. 10,26,581/ - 102,656/ - THE DISALLOWANCE SO MADE BEING CONTRARY TO THE PROV ISIONS OF LAW AND FACTS OF THE CASE. HENCE, THE SAME KINDLY BE DELETE D IN FULL. ITA NOS.1179 & 1180/JP/2019 M/S SWASTIK OIL INDUSTRIES, TONK VS. DCIT, CIRCLE-0 7, JAIPUR 3 3. DURING THE COURSE OF HEARING, THE LD. AR SUBMIT TED THAT THE ASSESSEE DOESNT WANT TO PRESS GROUND NO. 1 OF ITS APPEAL. H ENCE, THE SAME IS DISMISSED AS NOT PRESSED. 4. IN GROUND NO. 2, THE ASSESSEE HAS CHALLENGED TH E REJECTION OF BOOKS OF ACCOUNTS AND TRADING ADDITION SUSTAINED BY THE LD. CIT(A) ON ACCOUNT OF LOW YIELD RATIO IN COMPARISON TO THE PRE CEDING YEAR. 5. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE IS A PARTNERSHIP FIRM ENGAGED IN THE MANUFACTURING AND TRADING OF ED IBLE OIL, OIL CAKES FROM MUSTARD, TARAMEERA AND GROUNDNUTS. THE ASSESSEE FIL ED ITS RETURN OF INCOME ON 25/12/2013 DECLARING TOTAL INCOME OF RS. 57,06,490/-. THEREAFTER, THE ASSESSMENT WAS COMPLETED AT RS. 92, 10,090/- BY MAKING ADDITIONS OF RS. 9,44,277/- BY THE A.O. ON ACCOUNT OF LOW YIELD OF OIL FROM SEEDS I.E. FROM GROUNDNUTS, MUSTARD AND TARAMEERA S EEDS. THE ASSESSEE CHALLENGED THE ACTION OF THE A.O. BEFORE THE LD. CI T(A), WHO HAS RESTRICTED THE TRADING ADDITION MADE BY THE A.O. OF RS. 9,44,2 77/- ON ACCOUNT OF LOW YIELD RATIO TO RS. 1,50,000/-. AGAINST THE SAID FIN DINGS, THE ASSESSEE IS IN APPEAL BEFORE US. 6. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT THE ABSENCE OF STOCK REGISTER OR LOW YIELD CANNOT BE A GROUND F OR INVOKING OF SECTION 145(3) OF THE ACT. IT WAS SUBMITTED THAT THE APPELL ANT HAS MAINTAINED ALL THE BOOKS OF ACCOUNT CONSISTING OF CASH BOOK, LEDGE R, QUANTITATIVE DETAILS OF OPENING STOCK AND CLOSING STOCK AND STOCK/PRODUC TION REGISTER. FURTHER, THE BOOKS OF ACCOUNTS WERE DULY PRODUCED BEFORE THE ASSESSING OFFICER AND THEREFORE, THERE IS NO VALID BASIS TO APPLY SEC TION 145(3) IN THE INSTANT CASE. IT WAS FURTHER SUBMITTED THAT EVEN INVOKING S ECTION 145 DOES NOT CONFER BLIND POWERS UPON THE ASSESSING OFFICER AND HE IS NOT AT LIBERTY TO ASSESS THE INCOME AT WHATEVER FIGURE HE WANTS. HE I S BOUND TO MAKE AN ITA NOS.1179 & 1180/JP/2019 M/S SWASTIK OIL INDUSTRIES, TONK VS. DCIT, CIRCLE-0 7, JAIPUR 4 HONEST ESTIMATION OF INCOME, KEEPING IN VIEW THE MA TERIAL AVAILABLE ON RECORD, PAST HISTORY OF THE CASE, LOCAL KNOWLEDGE A ND REPUTE OF THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT REGARDING L OW YIELD, THE ASSESSEE HAS MADE DETAIL SUBMISSIONS BEFORE THE ASSESSING OF FICER. HOWEVER, THE SAME HAS NOT BEEN CORRECTLY APPRECIATED BY THE ASSE SSING OFFICER. IT WAS SUBMITTED THAT THE RESULTS DECLARED BY THE ASSESSEE THIS YEAR ARE MUCH BETTER IN AS MUCH AS THE GP DECLARED THIS YEAR AT 4 .83% ON SALES OF RS. 53,20,85,035/- AS AGAINST GP RATE OF 3.54% ON S ALES OF RS. 62,51,07,501/- IN THE IMMEDIATELY PRECEDING YEAR. 7. IT WAS SUBMITTED THAT SIMILAR ISSUE HAVE ARISEN IN THE CASE OF THE ASSESSEE FOR A.Y 2012-13 WHEREIN THE TRIBUNAL VIDE ITS ORDER DATED 21.10.2019 IN ITA NO. 1305/JP/2018 HAS DELETED THE TRADING ADDITIONS SO MADE BY THE ASSESSING OFFICER FOR THE REASON THAT T HE VARIATION IN THE YIELD RATIO IS VERY MEAGER AND IN SOME OF THE CASES, IT I S LESS THAN 1 %. IT WAS SUBMITTED THAT THIS YEAR ALSO, FALL IN YIELD IS NEG LIGIBLE BEING BELOW 1 % AND GP DECLARED THIS YEAR AT 4.83% IS MUCH BETTER T HAN THE GP OF 3.54% IN EARLIER YEAR. IT WAS ACCORDINGLY SUBMITTED THAT THERE IS NO BASIS TO SUSTAIN THE DISALLOWANCE SO MADE BY THE ASSESSING O FFICER AND WHICH HAS BEEN PARTLY CONFIRMED BY THE LD. CIT(A). 8. PER CONTRA, THE LD. DR SUBMITTED THAT THE BOOKS OF ACCOUNTS HAVE BEEN RIGHTLY REJECTED BY THE ASSESSING OFFICER ON A CCOUNT OF NO SEPARATE STOCK REGISTER, LOW YIELD AND VARIOUS OTHER REASONS AS SO STATED IN THE ASSESSMENT ORDER. REGARDING THE CONTENTION OF THE ASSESSEE THAT THERE WAS ONLY SLIGHT DECLINE IN YIELD PERCENTAGE AS COMP ARED TO AVERAGE YIELD, IT WAS SUBMITTED THAT THE LD. CIT(A) HAS ALREADY RESTR ICTED THE ADDITIONS TO RS. 1,50,000/- AS AGAINST ADDITION OF RS. 7,94,277/ - MADE BY THE ASSESSING OFFICER. IT WAS ACCORDINGLY SUBMITTED THAT THE ADDI TION SO SUSTAINED BY THE LD. CIT(A) MAY BE CONFIRMED. ITA NOS.1179 & 1180/JP/2019 M/S SWASTIK OIL INDUSTRIES, TONK VS. DCIT, CIRCLE-0 7, JAIPUR 5 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE CO-ORDINATE BENCH IN ASSESSEES OWN CASE FOR A.Y 2012-13 HAS DEALT WITH SIMILAR ISSUE ON ACCOUNT OF ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT O F LOW YIELD RATIO AND THE RELEVANT FINDINGS READS AS UNDER:- 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS RELEVANT MATERIAL ON RECORD. THE A.O. HAS NOTED THAT FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS DECLARED LOW YIELD RATIO IN RESPECT OF GROUNDNUT, MUSTARD AND TARAMEERA SEEDS IN COMPARISO N TO THE PRECEDING YEARS. THE DETAILS OF THE PERSPECTIVE YIELD RATIO W ERE GIVEN BY THE A.O. AS UNDER: PRODUCT YIELD RATIO IN A.Y. 2011 - 12 YIELD RATIO IN A.Y. 2012 - 13 GROUND NUT 28.19% 27.9% MUSTARD 35.92% 34.37% TARAMIRA 29.23% 27.35% YIELD CHART GROUND NUT SEEDS ( IN KG) MUSTARD SEED (IN KG.) TARAMIRA SEED (IN KG. OIL 1170204.600 27.90% 134646.040 34.37% 1185437.500 27.35% CAKE 1991570.000 47.48% 255040.000 65.11% 3131509.00 72.42% SHORTAGE 1032476.400 24.62% 2015.960 00.52% 10304.900 00.23% TOTAL 4194251.000 10 0% 391702.000 100% 4324251.400 100% THE A.O., ACCORDINGLY, PROCEEDED TO MAKE THE ADDITI ON BY ADOPTING YIELD RATIO OF THE PRECEDING YEAR I.E. A.Y. 2011-12 AND M ADE THE ADDITION IN RESPECT OF ALL THREE OIL PRODUCTS I.E. GROUNDNUTS, MUSTARD AND TARAMEERA SEEDS TOTAL AMOUNTING TO RS. 18,74,102/-. ON APPEAL , THE LD. CIT(A) HAS ACCEPTED THE CONTENTION OF THE ASSESSEE ON THE POIN T THAT WHEN THE A.O. HAS NOT REJECTED BOOKS OF ACCOUNT THEN SUCH ADDITIO N IS NOT JUSTIFIED. HOWEVER, THE LD. CIT(A) HAS SUSTAINED THE ADDITION TO THE EXTENT OF RS.3.00 LACS AS AGAINST RS. 18,74,102/-. THE RELEVA NT FINDING OF THE LD. CIT(A) IN PARA 7.2 AS UNDER: ITA NOS.1179 & 1180/JP/2019 M/S SWASTIK OIL INDUSTRIES, TONK VS. DCIT, CIRCLE-0 7, JAIPUR 6 7.2. I HAVE CONSIDERED THE ASSESSMENT ORDER, APPE LLANT'S SUBMISSIONS AND DOCUMENTS ON RECORD. THE ASSESSEE HAD MAINTAINE D THE COMPLETE BOOKS OF ACCOUNTS ALONG WITH VARIOUS LEDGERS AND JO URNALS. THE PURCHASE, SALES AND EXPENSES WERE FULLY VOUCHED & VERIFIABLE AND THESE FACTS WERE ALSO ACCEPTED BY THE AO. THE AO HAD INVOKED THE PRO VISIONS OF SECTION 145(3) AND ISSUED A SHOW CAUSE NOTICE AFTER NOTICIN G DISCREPANCIES SUCH AS NON MAINTENANCE OF STOCK REGISTER, PRODUCTION RE GISTERS, INWARD REGISTERS OUTWARD REGISTERS ETC. BUT ALSO CONSIDERE D THE WRITTEN SUBMISSION OF THE APPELLANT AND HAD NOT REJECTED TH E BOOKS OF ACCOUNT AT ALL U/S 145(3). IN A SIMILAR ISSUE, THE HON'BLE HIG H COURT, RAJASTHAN IN THE CASE OF MALANI RAMJIVAN JAGANNATH VS. ACIT 20T CTR (RAJ) 19 HELD AS UNDER:- 'IN DOING SO, IT HAD IGNORED ALL ADMITTED FACTS IN THE FACE OF WHICH THERE ABOUT THE SALES AND PURCHASES, NON MAINTENANCE OF S TOCK REGISTER LOST ITS SIGNIFICANCE SO FAR AS ARRIVING AT GP RATE IS CONCE RNED.' FURTHER THE HON'BLE ITAT, JAIPUR IN THE CASE OF AM BIKA TEXTILE INDUSTRIES VS. DCIT HELD THAT HUGE TRADING ADDITION CAN'T BE MADE WITHOUT POINTING ANY DEFECT IN THE BOOKS OF ACCOUNTS. APART FROM THIS TH E HON'BLE ITAT, JAIPUR IN THE CASE OF DCIT VS. MEWAR TEXTILE MILLS LTD. HELD THAT THE AO HAD NOWHERE INVOKED THE PROVISIONS OF SECTION 145(1) AND IF THE PROVISIONS WAS NOT INVOKED THEN THE ESTIMATE OF PROFIT WOULD NOT POSSIBLE IN T HE EYES OF LAW. FURTHER, THE AO MADE TRADING ADDITION CONSIDERING THE YIELD RATIO OF SIMILAR BUSINESS CARRYING OUT SAME JOB AT SAME STATION IN T HE SAME CONDITIONS. HERE I AM OF VIEW THAT IF THE SAME BUSINESSES WITH SAME RAW MATERIAL EVEN THE PARTY FROM WHOM RAW MATERIAL WAS PURCHASED WAS, MORE OR LESS SAME; CARRYING OUT FUNCTION AT THE SAME STATION SHOULD YI ELD MORE OR LESS THE SAME RESULT AND; THIS FACT POINTED OUT BY THE AO CA NNOT BE NEGLECTED. THEREFORE, RESPECTFULLY FOLLOWING RATIO LAID DOWN C ASE LAWS AND FACTS AS DISCUSSED ABOVE I HEREBY RESTRICTED THE ADDITION OF RS. 3,00,000/-, THE ITA NOS.1179 & 1180/JP/2019 M/S SWASTIK OIL INDUSTRIES, TONK VS. DCIT, CIRCLE-0 7, JAIPUR 7 APPELLANT GETS RELIEF OF RS. 15,74,102/-. ACCORDING LY, THE GROUND IS TREATED AS PARTLY ALLOWED. THUS, THE LD. CIT(A) HAS ACCEPTED THE CONTENTION OF THE ASSESSEE THAT A TRADING ADDITION CANNOT BE MADE WITHOUT POINTING OU T DEFECTS IN THE BOOKS OF ACCOUNT. THOUGH, IN THE CASE IN HAND, THE ADDITI ON MADE BY THE A.O. IS NOT IN THE NATURE OF TRADING ADDITION BUT IT IS THE ADDITION ON ACCOUNT OF LOW PRODUCTION OF OIL FROM THE OIL SEEDS IN COMPARI SON TO THE EARLIER YEARS. WE FIND VARIATION IN THE YIELD RATIO IS VERY MEAGER AND IN SOME OF THE CASES IT IS LESS THAN 1%. ONCE THE DIFFERENCE I S VERY NEGLIGIBLE WHICH CAN BE DUE TO VARIOUS FACTORS AND REASONS INC LUDING THE QUALITY OF SEED, OIL CONTENTS IN THE SEEDS DUE TO C LIMATE CONDITION FOR A PARTICULAR SEASON WHICH AFFECTS THE QUALITY O F CROP ITSELF. IGNORING ALL THESE FACTORS AS EXPLAINED BY THE ASSE SSEE IN THE REPLY TO THE SHOW CAUSE NOTICE OF THE A.O., THE ADD ITION MADE BY THE A.O. AND SUSTAINED BY THE LD. CIT(A) IS NOT JUS TIFIED. THE LD. CIT(A) HAS ALSO NOT GIVEN ANY BASIS FOR SUSTAINING THE ADDITION OF RS. 3.00 LACS AND THEREFORE, SUCH AN AD HOC ADDITION WITHOUT SPECIFYING THE BASIS IS NOT PERMISSIBLE, ACCORDINGLY, THE ADDITION SUSTAINE D BY THE LD. CIT(A) IS DELETED. 10. IN THE YEAR UNDER CONSIDERATION, THE LD CIT(A) HAS TAKEN NOTE OF SLIGHT DOWNFALL IN GROUND NUT OIL YIELD RATIO BY 0. 31% AND MUSTARD OIL YIELD RATIO BY 0.23% AS COMPARED TO AVERAGE OF PAST THREE YEARS AND THE REASONS FOR SUCH VARIANCE AS APPARENT FROM HIS FIND INGS WHICH READ AS UNDER: I HAVE PERUSED THE RECORD I FIND THAT THERE IS SLI GHTLY DOWNFALL IN THE YIELD SHOWN BY THE APPELLANT IN THIS YEAR AS COMPARE TO T HE AVERAGE OF 3 YEARS WHICH IS AS UNDER:- ITA NOS.1179 & 1180/JP/2019 M/S SWASTIK OIL INDUSTRIES, TONK VS. DCIT, CIRCLE-0 7, JAIPUR 8 ITEM AVERAGE OF 3 YEAR YIELD THIS YEAR YIELD GROUND NUT OIL 27.89% 27.58% MUSTARD OIL 35.03% 34.80% THE DIFFERENCE IS GROUND NUT OIL IS 0.31% AND DIFFE RENCE IN MUSTARD SEEDS OIL IS 0.23%. THE A/R ARGUED THAT THE YIELD DIFFERE NCE IS DUE TO THE QUALITY OF THE SEEDS AND THE OIL CONTENT THEREIN LARGELY DE PEND UPON RAINS. THIS YEAR, THERE WERE LESSER RAIN AS COMPARED TO THE PRE CEDING YEAR AND HENCE THERE IS A MINOR FALL. THERE ARE VARIOUS OTHER FACT ORS WHICH AFFECT THE RATE OF YIELD HOWEVER, TO KEEP THE SAME RATE OF YIELD EV ERY YEAR IS BEYOND HUMAN CONTROL. THERE IS SUBSTANCE IN THE SUBMISSION OF THE A/R THA T YIELD % DEPENDS ON THE QUALITY OF GROUND NUT, MUSTARD SEEDS AND IT CAN NOT SAME IN EVERY YEAR. THE GROSS PROFIT OF THE APPELLANT IS BETTER I N THIS YEAR AS COMPARE TO THE LAST YEAR. THE APPELLANT THIS YEAR DECLARED GP RATE OF 4.83% ON SALES OF RS.53,20,035/-. THE GROSS PROFIT RATE OF THIS YE AR IS BETTER AS COMPARE TO THE LAST YEAR GP RATE OF 3.54% ON SALES OF RS.62 ,51,07,501/-. THEREFORE CONSIDERING THE FACTS OF THE CASE AND NATURE OF BUS INESS AND CONSIDERING THE SLIGHT DECLINE IN YIELD PERCENTAGE AS COMPARE T O AVERAGE YIELD. I FIND THAT IT WOULD BE REASONABLE TO RESTRICT THE ADDITIO N OF RS.1,50,000/- AND BALANCE ADDITION OF RS.7,94,277/- IS DELETED. THIS GROUND IS PARTLY ALLOWED. INSPITE OF ABOVE, THE LD CIT(A) HAS SUSTAINED THE A DDITION OF RS 1,50,000/- WITHOUT GIVING ANY BASIS FOR SUSTAINI NG AND THEREFORE, SUCH AN ADHOC ADDITION WITHOUT SPECIFYING THE BASIS IS N OT PERMISSIBLE, ACCORDINGLY, THE ADDITION SUSTAINED BY THE LD. CIT( A) IS DELETED. ITA NOS.1179 & 1180/JP/2019 M/S SWASTIK OIL INDUSTRIES, TONK VS. DCIT, CIRCLE-0 7, JAIPUR 9 11. REGARDING GROUND NO.3, THE LD. AR SUBMITTED THA T A BARE READING OF THE ORDER OF THE AO SHALL REVEAL THAT IN ALMOST ALL THE CASES THE DISALLOWANCES HAVE BEEN MADE ON AD HOC BASIS, SIMPL Y ON MERE SUSPICION, SURMISES AND CONJECTURES. NO SPECIFIC INSTANCE OF A NY NATURE WHATSOEVER HAS BEEN GIVEN BY THE AO IN THE IMPUGNED ORDER TO S UPPORT HIS CONTENTION WITH THE DOCUMENTARY EVIDENCE THAT THE EXPENDITURES WERE INCURRED FOR NON-BUSINESS PURPOSES, ELEMENT OF PERSONAL USER WAS THERE. AN ALLEGATION REMAINS A MERE ALLEGATION UNLESS PROVED. SUSPICION CANNOT TAKE THE PLACE OF REALITY ARE THE SETTLED PRINCIPLES (DHAKESHWARI COTTON MILLS 26 ITR 775 (SC)). 12. IT WAS SUBMITTED THAT A BUSINESSMAN IS THE BEST JUDGE TO TAKE CARE OF ITS OWN INTEREST & TO TAKE DECISIONS AND THE AO IS NOT SUPPOSED TO INTERVENE THEREIN NOR HE CAN REPLACE THE ASSESSEE. HERE, WHATEVER DECISIONS WERE TAKEN BY THE ASSESSEE, HAS TO BE UND ERSTOOD AS TAKEN OUT OF COMMERCIAL EXPEDIENCY. KINDLY REFER T.T. (P) LTD . V/S CIT (1980) 121 ITR 551 (KAR), CIT V/S UDHOJI SHRIKRISHNADAS (1983) 139 ITR 827 (MP) JK WOOLEN MANUFACTURERS 72 ITR 612 (SC). 13. IT WAS FURTHER SUBMITTED THAT LOOKING TO A HUGE TURNOVER OF MORE THAN RS.53.20 CRORES (APPROX), CLAIM OF EXPENDITURE IS OTHERWISE VERY MEAGER. THUS SUCH A MEAGER CLAIM TO ACHIEVE SUCH A HUGE TURNOVER IS NOT AT ALL UNJUSTIFIED. ALL THESE EXPENSES WERE INCURRE D EXCLUSIVELY FOR BUSINESSES PURPOSE AND ARE UNDER THE PROVISIONS OF THE ACT. THEREFORE, THE ENTIRE DISALLOWANCE, SO MADE MAY KINDLY BE DELE TED IN FULL. 14. PER CONTRA, THE LD. DR SUBMITTED THAT THE LD AR THOUGH HAS RAISED VARIOUS CONTENTIONS BUT HE HAS FAILED TO MENTION TH AT SIMILAR DISALLOWANCES HAVE BEEN MADE IN THE PRECEDING ASSESSMENT YEAR 201 2-13 AS WELL AND ITA NOS.1179 & 1180/JP/2019 M/S SWASTIK OIL INDUSTRIES, TONK VS. DCIT, CIRCLE-0 7, JAIPUR 10 OUR REFERENCE WAS DRAWN TO THE FINDINGS OF THE CO-O RDINATE BENCH WHICH ARE CONTAINED AT PARA 10 OF ITS ORDER WHICH READS A S UNDER:- 10. WE HAVE HEARD THE LD AR AS WELL AS THE LD DR A ND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE A.O. HAS DISALLOWE D 10% OF THE TELEPHONE EXPENSES ON THE GROUND THAT THE ASSESSEE DID NOT MAINTAIN ANY CALL REGISTER AND IN ABSENCE THEREOF, PERSONAL ELEM ENT CANNOT BE RULED OUT. ONCE THE TELEPHONE EXPENSES ARE VERIFIABLE FROM THE TELEPHONE BILLS ITSELF THEN THIS CANNOT BE A CASE OF UNVERIFIABLE EXPENSES . FURTHER THE PERSONAL ELEMENT IS ONLY SUSPECTED BY THE A.O. AND NOT FOUND . EVEN OTHERWISE, WHEN THE TELEPHONES ARE USED IN THE BUSINESS PREMIS ES OF THE ASSESSEE AND THE EXPENSES ARE VERIFIABLE FROM THE TELEPHONE BILLS ITSELF THEN THE SAME CANNOT BE DISALLOWED ON MERE SUSPICION. SIMILARLY, THE TRAVELLING EXPENSES WERE ALSO DISALL OWED AS 10% ON THE GROUND OF PERSONAL ELEMENT. THE A.O. HAS NOT DO UBTED THE EXPENDITURE INCURRED BY THE ASSESSEE AND IF THE EXP ENSES ARE NOT FOUND TO BE EXCESSIVE HAVING REGARD TO THE NATURE OF BUSINES S AND VOLUME OF BUSINESS OF THE ASSESSEE THEN SUCH AN AD HOC DISALL OWANCE ON PERSONAL ELEMENT IS NOT JUSTIFIED. IN CASE OF BUILDING REPAIR AND MAINTENANCE EXPENSES , THE A.O. HAS MADE 10% DISALLOWANCE ON ACCOUNT OF NON-VERIFIABILI TY OF THE EXPENSES AS THE SAME WERE PAID IN CASH AND SUPPORTED WITH SELF- MADE VOUCHERS. SINCE THIS EXPENDITURE WAS INCURRED IN CASH AND THE ASSES SEE HAS PRODUCED ONLY SELF-MADE VOUCHERS THEN IN ABSENCE OF SUPPORTING DO CUMENTARY EVIDENCE, 10% DISALLOWANCE OF EXPENDITURE IS JUSTIFIED. REGARDING OTHER OFFICE EXPENSES, THE ASSESSEE HAS S HOWN OFFICE EXPENSES OF RS. 2,85,200/- AND MOST OF THESE WERE P AID IN CASH AND SUPPORTED BY THE SELF-MADE VOUCHERS. HOWEVER, IT IS TO BE NOTED THAT IF ITA NOS.1179 & 1180/JP/2019 M/S SWASTIK OIL INDUSTRIES, TONK VS. DCIT, CIRCLE-0 7, JAIPUR 11 THE EXPENDITURE IS NOT FOUND TO BE EXCESSIVE AND IT IS INEVITABLE FOR THE BUSINESS OF THE ASSESSEE THEN THE PETTY EXPENSES IN CURRED BY THE ASSESSEE ON DAY TO DAY BASIS IS BOUND TO BE INCURRED IN CASH AND WITHOUT ANY VOUCHERS FROM THE OTHER SIDE DUE TO SUCH A SMALL AN D PETTY EXPENSES. ACCORDINGLY, ONCE THE SAID EXPENDITURE IS NOT FOUND TO BE EXCESSIVE HAVING REGARD TO THE NATURE OF BUSINESS AND VOLUME OF THE BUSINESS OF THE ASSESSEE THEN AN AD HOC DISALLOWANCE IS NOT JUSTIFI ED. ACCORDINGLY, IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, EXCEPT 10% OF BUILDING REPAIR AND MAINTENANCE EXPENSES, ALL OTHER DISALLOWANCES MADE BY THE A.O. AND SUSTAINED BY THE LD. CIT(A) ARE DELETED. 15. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURUSE D THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT UNDER IDENTICAL SET OF FACTS AND CIRCUMSTANCES OF THE CASE, THE DISALLOWANCES WERE M ADE IN THE EARLIER YEAR AND THE SAME HAVE BEEN PARTLY CONFIRMED BY THE COOR DINATE BENCH. THEREFORE, FOLLOWING THE DECISION OF THE COORDINATE BENCH, EXCEPT 10% OF BUILDING REPAIR AND MAINTENANCE EXPENSES, ALL OTHER DISALLOWANCES MADE BY THE A.O. AND SUSTAINED BY THE LD. CIT(A) ARE HER EBY DELETED AND THE GROUND IS THUS PARTLY ALLOWED. 16. THE LD. AR FURTHER SUBMITTED THAT THE ASSESSEE WISHES TO TAKE THE FOLLOWING ADDITIONAL GROUND OF APPEAL:- 3. RS. 3,60,000/-: THE LD. CIT FURTHER ERRED IN LA W AS WELL AS ON THE FACTS OF THE CASE IN PARTLY CONFIRMING THE DISALLOW ANCE UPTO RS. 3,60,000/- BEING @ 15%, OUT OF THE COMMISSION OF RS. 24,00,000 /- PAID AND CLAIMED BY THE ASSESSEE. THE DISALLOWANCE SO MADE AND PARTL Y BEING CONFIRMED CONTRARY TO THE PROVISIONS OF LAW AND FACTS OF THE CASE AND CONTRARY TO THE SUBMISSIONS & EVIDENCES AVAILABLE ON RECORD HENCE, THE SAME KINDLY BE DELETED IN FULL. ITA NOS.1179 & 1180/JP/2019 M/S SWASTIK OIL INDUSTRIES, TONK VS. DCIT, CIRCLE-0 7, JAIPUR 12 17. IT WAS SUBMITTED THAT DUE TO INADVERTENT MISTAK E, THIS GROUND WAS NOT RAISED BEFORE THE TRIBUNAL AT THE TIME OF FILLI NG MEMORANDUM APPEAL I.E. FORM-36. THIS GROUND DOES NOT REQUIRE ANY FRES H INVESTIGATION OF FACTS IN AS MUCH AS THE SAME ARE AVAILABLE ON RECORD. PER CONTRA, THE LD. DR OBJECTED TO THE RAISING OF THE ADDITIONAL GROUND OF APPEAL. AFTER HEARING BOTH THE PARTIES AND CONSIDERING THE FACT THAT THE ASSESSEE HAS TAKEN THIS GROUND BEFORE THE LD. CIT(A) AND THEREFORE, EMERGIN G FROM THE IMPUGNED ORDER AND ALL THE RELEVANT FACTS BEING AVAILABLE ON RECORD, THE ADDITIONAL GROUND BEING RAISED IS HEREBY ADMITTED FOR NECESSAR Y ADJUDICATION. 18. IN THIS REGARD, THE LD. AR SUBMITTED THAT THE FACTS AS NOTED BY THE AO ARE THAT IN THE PROFIT & LOSS ACCOUNT, THE ASSES SEE HAS CLAIMED RS. 28,76,659/- ON ACCOUNT OF COMMISSION PAYMENT TO VARIOUS PERSONS AGAINST TOTAL TURNOVER OF RS. 53,20,85,035/- WHICH IS 0.54% OF THE TURNOVER. DURING THE COURSE OF ASSESSMENT PROCEEDI NG, THE RELEVANT DETAILS HAVE BEEN OBTAINED AND FROM THE DETAILS SO SUBMITTED, IT IS OBSERVED THAT OUT OF THE TOTAL COMMISSION PAYMENT O F RS. 28,76,659/-, RS. 24 LACS HAVE BEEN PAID TO RELATED PERSONS COVERED U /S 40A(2)(B). WHEN ASKED VIDE LETTER DATED 23.12.2015, 02.03.2016 AND DATED 23.03.2016, THE ASSESSEE FILED DETAILED EXPLANATIONS HOWEVER, REJEC TING THE SAME, THE AO DISALLOWED ENTIRE CLAIM OF RS. 24 LACS U/S 40A(2)(B ) OF THE ACT. 19. IN FIRST APPEAL, THE LD. CIT(A) VIDE ORDER DATE D 13.09.2019 RESTRICTED THE ADDITION UPTO RS.3,60,000/- HOLDING AS UNDER: 6.3 I HAVE CAREFULLY CONSIDERED THE OBSERVATION MADE BY THE AO IN THE ASSESSMENT ORDER, SUBMISSION AND ADDITIONAL EVIDENC ES FILED BY THE A/R OF THE APPELLANT, REMAND REPORT OF THE AO AND REJOINDE R FILED BY THE A/R OF ITA NOS.1179 & 1180/JP/2019 M/S SWASTIK OIL INDUSTRIES, TONK VS. DCIT, CIRCLE-0 7, JAIPUR 13 THE APPELLANT. I FIND THAT THIS ISSUE WAS ALREADY D ECIDED BY CIT(A)-1, JODHPUR IN THE APPELLANT OWN CASE FOR A.Y. 2012-13 AS UNDER:- 'I HAVE CONSIDERED THE ASSESSMENT ORDER, APPELLANT' S SUBMISSIONS AND DOCUMENTS ON RECORD THE AO STATED THAT COMMISSION P AYMENT TO A HUF BEING A SEPARATE ENTITY COULD NOT ENJOY ANY PHY SICAL ENTITY TO PERFORM ANY ACT. THEREFORE, ONLY RESOURCE BASED INC OME MAY BE EARNED BY A HUF SUCH AS INTEREST, INCOME HOUSE PROP ERTY INCOME ETC BUT AN HUF ITSELF HAVE NOT ANY SKILL OR EXPENSES IN ITS OWN THEREFORE COULD NOT RENDER ANY SERVICE FOR PROMOTING BUSINESS . ON PERUSAL OF APPELLANT'S SUBMISSION, 1 FIND THAT THE APPELLANT H AD CLAIMED COMMISSION OF RS. 27,15,336/- WHICH WAS 0.43% OF TO TAL TURNOVER AS AGAINST RS. 4,22,420/- CLAIMED IN THE PRECEDING YEA R, OUT OF TOTAL COMMISSION RS 21.00,000/- WAS PAID TO RELATED PERSO NS COVERED U/S 40A(2)(B) OF THE ACT. SINCE THE COMMISSION WAS PAID TO INCREASE ITS SALES WHICH WAS REFLECTED IN ITS HIGHER TURNOVER. D URING THE YEAR UNDER CONSIDERATION THE TURNOVER OF THE APPELLANT WAS RS. 62.51 LACS WITH GP RATE OF 3.54% AS COMPARED TO RS. 42.42 LACS WITH GP RATE OF 3.23% IN PROCEEDING AY. IT IS ALSO A FACT THAT MEMBERS OF AN HUF CAN VERY WELL DISCHARGE THE FUNCTIONS FOR THEIR HUF. HERE I AM OF VIEW THAT THE COMMISSION IS AN EXPENDITURE INCURRED SOLELY AND EX CLUSIVELY FOR THE PURPOSE OF THE BUSINESS AND FULLY ALLOWABLE. FURTHE R THERE HAD BEEN NO LOSS OF REVENUE AS ALL THE PAYEES HAD ALREADY DECLA RED THE SAID AMOUNT IN THEIR HANDS AND PAID TAX ACCORDINGLY. THE OBJECT ED THAT FOR ENTERING INTO AN AGREEMENT OR CONTRACT AT LEAST TWO PERSON I S REQUIRED. THIS MEANS FOR A VALID CONTRACT/ AGREEMENT, MINIMUM TWO SEPARATE PARTIES ARE ESSENTIAL. IN THE INSTANT CASE, WHEN THE MEMBER S AND KARTA OF HUF ARE THE VERY SAME PERSONS, THEY ARE ENTERING INTO A GREEMENT AND NEGOTIATING RATES OF COMMISSION AND TERMS OF AGREEM ENT ONLY AND THIS CANNOT BE IGNORED. ACCORDINGLY, THE ADDITION MADE B Y THE AO IS HEREBY ITA NOS.1179 & 1180/JP/2019 M/S SWASTIK OIL INDUSTRIES, TONK VS. DCIT, CIRCLE-0 7, JAIPUR 14 RESTRICTED TO THE TUNE OF 15% I.E. RS. 3,15,000/- A PPELLANT GETS RELIEF OF RS.17,85,000/-. THE GROUND IS TREATED AS PARTLY ALL OWED' THE FACTS OF THIS CASE ARE TOTALLY SIMILAR AS DECID ED BY THE CIT(A)-1 JODHPUR. IN THIS CASE THE COMMISSION ARE PAID TO TH E SAME PERSONS AND THE SERVICE ALSO RENDERED BY THE RECIPIENT. THE TOT AL COMMISSION IN THIS YEAR IS RS.28,76,659/- WHICH IS 0.54% OF TOTAL TURN OVER. IN THE LAST YEAR THE COMMISSION PAYMENT IS RS.27,15,336/- WHICH 0.43 %. THE NET PROFIT IN THIS YEAR IS 1.07% AS COMPUTE TO LAST YEAR 0.87% WH ICH IS BETTER IN THIS YEAR. IT IS ALSO A FACT THAT MEMBERS OF AN HUF CAN VERY WELL DISCHARGE THE FUNCTIONS FOR THEIR HUF. HERE I AM THE VIEW THAT TH E COMMISSION IS AN EXPENDITURE INCURRED SOLELY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS AND FULLY ALLOWABLE. FURTHER THERE HAD BEEN NO LOSS OF REVENUE AS ALL THE PAYEES HAD ALREADY DECLARED THE SAID AMOUNT IN THEI R HANDS AND PAID TAX ACCORDINGLY. THE OBJECTED THAT FOR ENTERING INTO AN AGREEMENT OR CONTRACT ALTEAST TWO PERSON IS REQUIRED. THIS MEANS FOR A VA LID CONTRACT/ AGREEMENT, MINIMUM TWO SEPARATE PARTIES ARE ESSENTIAL. IN THE INSTANT CASE, WHEN THE MEMBERS AND KARTA OF HUF ARE THE VERY SAME PERSONS, THEY ARE ENTERING INTO AGREEMENT AND NEGOTIATING RATES OF COMMISSION AND TERMS OF AGREEMENT ONLY AND THIS CANNOT BE IGNORED. ACCORDIN GLY I RESTRICT THE ADDITION 15% OF THE COMMISSION PAID TO PERSON COVER ED U/S 40A(2)(B) WHICH COMES OF RS.3,60,000/-. HENCE I CONFIRM THE A DDITION OF RS.3,60,000/- AND BALANCE AMOUNT OF RS.20,40,000/- IS DELETED. THIS GROUND IS PARTLY ALLOWED. 20. IN THE ABOVE FACTUAL BACKGROUND, IT WAS SUBMITT ED THAT THE ASSESSEE THIS YEAR HAS PAID COMMISSION AND BROKERAGE OF RS.2 8,76,659/- AS AGAINST RS.27,15,336/- CLAIMED IN THE PRECEDING YEAR. DETAI LED WRITTEN SUBMISSIONS WERE FILED BEFORE THE AO AS WELL AS BEFORE THE LD. CIT(A) ALONG WITH ITA NOS.1179 & 1180/JP/2019 M/S SWASTIK OIL INDUSTRIES, TONK VS. DCIT, CIRCLE-0 7, JAIPUR 15 DETAILED PAPER BOOK, WHICH HAS BEEN REPRODUCED IN V ERBATIM FROM PG-20 TO 28 OF HIS ORDER. THE ASSESSEE FULLY JUSTIFIED AN D PROVED THE NECESSITY OF SUCH EXPENDITURE AS ALSO ESTABLISHED THE GENUINENES S AND THE FACT OF MAKING PAYMENT AND THAT SUCH EXPENSES WERE INCURRED PURELY OUT OF COMMERCIAL EXPEDIENCY. IT WAS SUBMITTED THAT THE AD VANTAGES OF MAKING TRANSACTIONS THROUGH THE AGENTS WERE ALSO EXPLAINED AND ESTABLISHED. THE FACT OF RENDERING SERVICES WAS DULY AND FULLY ESTAB LISHED WITH THE HELP OF VARIOUS EVIDENCES. IT WAS SUBMITTED THAT THE PAYMEN TS WERE MADE THROUGH CHEQUE AND TDS WERE DEDUCTED THEREON. MOREO VER, THE PAYEES DULY DECLARED THE RECEIPT OF COMMISSION IN THEIR HA NDS AND PAID THE TAXES THEREON. MOREOVER, THERE WAS NO LOSS TO THE REVENUE AND THIS RATHER RESULTED IN A CASE OF DOUBLE TAXATION IN AS MUCH AS ALL THE PAYEES HAVE ALREADY DECLARED THE INCOME AND PAID TAXES. EVEN OT HERWISE HAD THE ASSESSEE DID NOT PAY COMMISSION, IT COULD HAVE MADE PAYMENT OF REMUNERATION TO THE PAYEES, WITHIN THE PERMISSIBLE LIMIT U/S 40(B), WHICH WAS MORE THAN RS.35,00,000/- AS AGAINST WHICH, THE ASSESSEE HAD CLAIMED ONLY RS. 24,00,000/-. 21. IT WAS SUBMITTED THAT THE LD. CIT(A) EVEN THOUG H ADMITTED ALL THE CONTENTIONS RAISED BY THE ASSESSEE AND EVEN ADMITTE D THAT THAT THE SUBJECTED COMMISSION PAYMENTS WERE INCURRED SOLELY AND EXCLUSIVELY FOR THE BUSINESS PURPOSES AND ALSO ADMITTED THAT THERE WAS NO LOSS TO THE REVENUE, YET HOWEVER, HE RESTRICTED THE DISALLOWANC E @ 15% OF THE CLAIMED AMOUNT RESULTING INTO DISALLOWANCES OF RS.3 ,60,000/-. PERTINENTLY HOWEVER, HE DID NOT AT ALL PROVIDE ANY BASIS OF MAK ING DISALLOWANCE OF 15%. HE DID NOT BRING THE FAIR MARKET VALUE ON RECO RD. IN CASE HE FOUND THE CLAIM TO BE EXCESSIVE (ALTHOUGH NOT ALLEGED SO) SO AS TO INVOKED S.40A(2), UNLESS THIS WAS DONE, NO DISALLOWANCE W.R .T. S.40A(2) COULD ITA NOS.1179 & 1180/JP/2019 M/S SWASTIK OIL INDUSTRIES, TONK VS. DCIT, CIRCLE-0 7, JAIPUR 16 HAVE BEEN MADE AS HELD IN THE CASE OF UPPER INDIA P UBLISHING HOUSE (P) LTD. VS. CIT (1979) 117 ITR 0569 (SC) HELD AS UNDER : REFERENCEQUESTION OF FACT/ACADEMIC QUESTIONTHE QU ESTION WHETHER A PARTICULAR EXPENDITURE ON RENT IS EXCESSIVE AND UNR EASONABLE OR NOT IS ESSENTIALLY A QUESTION OF FACTTHE OTHER QUESTION A S REGARDS APPLICABILITY OF S. 40A(2)(A) BECOMES ACADEMIC AS THE SAME CANNOT HAVE ANY APPLICATION UNLESS IT IS FIRST HELD THAT THE EXPEND ITURE ON RENT WAS EXCESSIVE OR UNREASONABLE. IN FACT, A READING OF THE ORDER OF THE LD. CIT(A) C LEARLY SHOWS THAT THE DISALLOWANCE HAS BEEN PARTLY SUSTAINED ONLY DUE TO SUSPICION BUT ABSOLUTELY WITHOUT ANY BASIS. 22. PER CONTRA, THE LD. DR RELIED ON THE FINDING OF THE LOWER AUTHORITIES AND SUBMITTED THAT SIMILAR DISALLOWANCES HAVE BEEN MADE IN THE PRECEDING ASSESSMENT YEAR 2012-13 AS WELL AND THE LD CIT(A) H AS RESTRICTED THE DISALLOWANCE TO 15% AND AGAINST WHICH THE ASSESSEE HAS NOT FILED ANY APPEAL BEFORE THE TRIBUNAL. IT WAS SUBMITTED THAT THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE COM MISSION HAS BEEN PAID TO THE SAME PARTIES AND THEREFORE, WHERE THE ASSESS EE HAS ACCEPTED THE FINDINGS OF THE LD CIT(A) FOR A.Y 2012-13 AND FOLLO WING THE SAME, THE LD CIT(A) FOR THE IMPUGNED ASSESSMENT YEAR HAS RESTRIC TED THE DISALLOWANCE TO 15%, THE GROUND SO RAISED BY THE ASSESSEE MAY BE DISMISSED. 23. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURUSE D THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT UNDER IDENTICAL SET OF FACTS AND CIRCUMSTANCES OF THE CASE, THE DISALLOWANCES WERE M ADE IN THE EARLIER A.Y 2012-13 AND THE SAME HAVE BEEN PARTLY CONFIRMED BY THE LD CIT(A) AND THE ASSESSEE HAS NOT FILED ANY APPEAL AGAINST THE S AID DECISION BEFORE THE TRIBUNAL AND THE MATTER HAS THUS ATTAINED FINALITY. THEREFORE, FOLLOWING ITA NOS.1179 & 1180/JP/2019 M/S SWASTIK OIL INDUSTRIES, TONK VS. DCIT, CIRCLE-0 7, JAIPUR 17 THE EARLIER DECISION OF HIS PREDECESSOR CIT(A), WHE RE THE LD CIT(A) FOR THE IMPUGNED ASSESSMENT YEAR HAS RESTRICTED THE DISALLO WANCE TO 15%, WE DONT SEE ANY INFIRMITY IN THE SAID DECISION AND FI NDINGS OF THE LD CIT(A) AND ARE NOT INCLINED TO INTERFERE IN THE SAID FINDI NGS AND THE GROUND OF APPEAL SO TAKEN BY THE ASSESSEE IS THUS DISMISSED. 24. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. 25. IN APPEAL FOR A.Y 2014-15, IN ITA NO. 1180/JP/2019, THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1. THE IMPUGNED ORDER U/S 143(3) DATED 19.12.2016 IS BAD IN LAW AND ON FACTS OF THE CASE, FOR WANT OF JURISDICTION AND FOR VARIOUS OTHER REASONS AND HENCE THE SAME MAY KINDLY BE QUASHED AND IN ANY CASE, THE IMPUGNED ADDITION/S BE DELETED. 2.1 RS. 6,50,796/-: THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE APPLICATION OF SECTION 1 45(3). THE PROVISION SO INVOKED AND CONFIRMED BY THE CIT(A) BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, THE SAME MAY KINDLY BE QUASHED. CONS EQUENTLY, THE TRADING ADDITION PARTLY CONFIRMED BY THE LD. CIT(A) OF RS. 6,50,796/- MAY KINDLY BE DELETED IN FULL. 2.2. ALTERNATIVELY AND WITHOUT PREJUDICE THE ABOVE THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN PARTLY CONFIRMING THE TRADING ADDITION UPTO RS. 6,50,796/- OUT OF RS. 59,90,090/- MADE BY THE AO. THE ADDITION SO MADE AND PARTLY CON FIRMED BY THE CIT(A) BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, THE SAME MAY KINDLY BE DELETED IN FULL. 3. RS. 1,00,000/-: THE LD. CIT ALSO ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN FULLY CONFIRMING THE DISALLOWANCES A LUMP SUM AMOUNT OF RS. 1,00,000/- MADE BY THE AO ON ACCOUNT OF TELEPHO NE EXPENSES, ITA NOS.1179 & 1180/JP/2019 M/S SWASTIK OIL INDUSTRIES, TONK VS. DCIT, CIRCLE-0 7, JAIPUR 18 TRAVELLING EXPENSES, BUILDING REPAIR & MAINTENANCE EXPENSES AND OFFICE EXPENSES. THE DISALLOWANCE SO MADE BEING CONTRARY T O THE PROVISIONS OF LAW AND FACTS OF THE CASE. HENCE, THE SAME KINDLY B E DELETED IN FULL. 26. BOTH THE PARTIES FAIRLY SUBMITTED THAT THE FACT S AND CIRCUMSTANCES OF THE CASE ARE IDENTICAL AS IN A.Y 2013-14. THEREFOR E, OUR FINDINGS AND DIRECTIONS AS CONTAINED IN ITA NO. 1179/JP/2019 FOR A.Y 2013-14 SHALL APPLY MUTATIS MUTANDIS TO THIS MATTER AND THE APPEAL IS PARTLY ALLOWED. 27. IN THE RESULT, BOTH THE APPEALS OF THE ASSES SEE ARE DISPOSED OFF IN LIGHT OF AFORESAID DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 22/06/2021. SD/- SD/- LANHI XKSLKBZ FOE FLAG ;KNO ( SANDEEP GOSAIN ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 22/06/2021 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S SWASTIK OIL INDUSTRIES, TONK 2. IZR;FKHZ@ THE RESPONDENT- DCIT, CIRCLE-07, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NOS. 1179 & 1180/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR