M/s. Damani & Co., Kolkata V. ITO, Ward - 45(2), Kolkata, Kolkata

ITA 120/KOL/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99971 (ITAT-KOLKATA)
• Duration Of Justice: 5 year(s) 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 14-08-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 19-01-2010
• Court: TRIBUNAL
• Department Lawyers: MD GHAYAS UDDIN
• Assessee Lawyers: S K TULSIYAN
• Keywords: Business expenditure; Search and seizure; Block assessment
• Section: 133(6); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI WASEEM AHMED , AM] I.T.A NO. 120/KOL/2010 ASSESSMENT YEAR: 2004-05 M/S. DAMANI & CO. VS. INCOME-TAX OFFICER, WD-4 5(2), KOLKATA (PAN: AACFD5802D) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 03.11.2015 DATE OF PRONOUNCEMENT: 10.11.2015 FOR THE APPELLANT: SHRI S. K. TULSIYAN, ADVOCATE FOR THE RESPONDENT: MD. GHAYAS UDDIN, JCIT, SR. D R ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XXX, KOLKATA IN APPEAL NO.215/CIT(A)-XXX/WARD-45(2)/2008-09 DATED 23.11.20 09. ASSESSMENT WAS FRAMED BY ITO, WARD-45(2), KOLKATA U/S. 147/143(3)(II) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR AY 2004-05 VIDE ITS O RDER DATED 24.12.2008. 2. THE FIRST ISSUE IN THIS APPEAL OF ASSESSEE IS AG AINST THE ORDER OF CIT(A) CONFIRMING THE ACTION OF AO IN MAKING ADDITION ON ACCOUNT OF U NDISCLOSED RECEIPTS OF RS.78,59,892/-. FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NO.1 : THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ADDITION ON ACCOUNT OF UNDISCLOSED RECEIPTS OF RS.78,59,892/- IS UNFAIR, B ASED ON NO EVIDENCE AND BASED ON INCONGRUOUS FACTUAL PREMISES. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM AND EARNING INCOME FROM COORDINATION COMMISSION RECEIVED FROM SHAW WAL LACE DISTILLERIES LTD. (IN SHORT SWDL). THE AO DURING THE COURSE OF ASSESSMENT PROCE EDINGS NOTED THAT DURING THE RELEVANT AY THE ASSESSEE HAS FILED TWO AUDIT REPORT S, ONE ALONG WITH FORWARDING LETTER DATED 01.11.2004 WHICH IS AUDITED BY K. M. GULGULIA OF M/S. K. M. GULGULIA & CO. DATED 30.10.2004 AND ANOTHER AUDIT REPORT BY SHRI ANURAG MATHUR OF M/S. ANURAG MATHUR & CO. DATED 27.10.2004 FILED ALONG WITH THE RETURN OF INCOME, WHICH WAS FILED ON 20.03.2006. ACCORDING TO AO, BOTH THE AUDIT REPORTS WERE SIGNED BY THE PARTNERS. ON QUERY FROM THE AO, THE ASSESSEE REQUESTED THAT THE AUDIT REPORT OF ASSESSEE AUDITED BY SHRI ANURAG MATHUR OF M/S. ANURAG MATHUR & CO. DATED 27. 10.2004 IS THE ACTUAL AUDIT REPORT FILED ALONG WITH THE RETURN OF INCOME BUT, ACCORDIN G TO AO, THE ASSESSEE HAS MAINTAINED 2 ITA NO.120/K/2010 M/S. DAMANI & CO. AY 2004-05 TWO SEPARATE SETS OF ACCOUNTS AND HENCE, TWO SEPARA TE AUDIT REPORTS WERE PREPARED. ACCORDING TO AO, HE HAS RECORDED STATEMENTS OF BOTH THE AUDITORS AND BOTH OF THEM HAVE STATED THAT THEY HAVE AUDITED THE ACCOUNTS OF THE A SSESSEE ON THE BASIS OF BOOKS OF ACCOUNT AND DOCUMENTS PROVIDED AND SUPPLIED BY THE ASSESSEE TO THEM. BOTH OF THEM HAVE DENIED HAVING KNOWLEDGE OF ANY OTHER AUDIT REPORTS FOR THE SAME AY 2004-05 OF THE ASSESSEE. WHEN THE STATEMENT OF BOTH THE AUDITORS WERE FORWAR DED TO THE ASSESSEE, HIS AR ONLY STATED THAT THE ACCOUNTS AUDITED AS PER AUDIT REPOR T DATED 27.10.2004 BY SHRI ANURAG MATHUR OF M/S. ANURAG MATHUR & CO. IS THE CORRECT A UDIT REPORT BUT COULD NOT EXPLAIN THE OTHER AUDIT REPORT. THE AO NOTED THAT TOTAL RECEIPT S DECLARED BY THE ASSESSEE IN ITS AUDITED P&L ACCOUNT FOR THE AY 2004-05 AS AUDITED BY SHRI A NURAG MATHUR OF M/S. ANURAG MATHUR & CO. AT RS.2,14,70,195/- AND ON THE OTHER H AND, IN THE P&L ACCOUNT AUDITED BY SHRI K. M. GULGULIA OF M/S. K. M. GULGULIA & CO. DA TED 30.10.2004, THE ASSESSEE HAS SHOWN TOTAL RECEIPTS AT RS.2,93,30,087/-. ACCORDIN G TO AO, THE ASSESSEE FAILED TO FURNISH ANY EXPLANATION IN RESPECT TO THIS EXCESS RECEIPT O F RS.78,59,892/- AS REVEALED FROM THE AUDIT REPORT OF SHRI K. M. GULGULIA OF M/S. K. M. G ULGULIA & CO. DATED 30.10.2004. ACCORDINGLY, HE ADDED THIS RECEIPT OF RS.78,59,892/ - AS THE ASSESSEE FAILED TO FURNISH ANY EXPLANATION FOR NON-DISCLOSURE OF THESE RECEIPTS. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO ALSO CONFIRMED THE ACTION OF AO BY OBSERVING AS UNDER: THE APPELLANT FILED RETURN OF INCOME ON 20-3-06 A LONG WITH THE AUDIT REPORT DT. 27.10.04. THIS AUDIT REPORT IS PREPARED BY MR. ANURAG MATHUR OF M/S. ANURAG MATHUR & CO. THE COMMISSION RECEIPT FROM M/S. SHAW WALLACE DISTILLER IES LTD. CREDITED IN THE PROFIT AND LOSS ACCOUNT ENCLOSED TO THIS AUDIT REPORT WAS 2,14,70,1 95/-. THE A.O NOTICED THAT THE APPELLANT FURNISHED ANOTHER AUDIT REPORT DT. 30-10-04 WHICH I S PREPARED BY MR. K.M.GULGULIA OF M/S. K.M.GULGULLA & CO. THE A.O NOTICED THAT THE AMOUNT RECEIVED AS PER THIS AUDIT REPORT WAS RS.2,93,30,097/-. THE A.O INFORMED THE APPELLANT RE GARDING TWO AUDIT REPORTS FILED BY THE APPELLANT AND THE VARIATION IN THE AMOUNT RECEIVED. THE APPELLANT SUBMITTED THAT THE REPORT DT. 27-10-04 PREPARED BY MR. ANURAG MATHUR IS CORRE CT AND BE CONSIDERED. THE APPELLANT HAS NOT FURNISHED EXPLANATION REGARDING VARIATION I N THE COMMISSION RECEIPT DISPOSED IN THE AUDIT REPORTS FURNISHED. THE AMOUNT RECEIVED DI SCLOSED IN THE RETURN IS LOWER BY RS. 78,59,892/- COMPARED TO THE AUDIT REPORT DATED 30.1 0.2004 FURNISHED BY THE APPELLANT. THE APPELLANT FAILED TO RECONCILE THE VARIATION IN THE COMMISSION RECEIPT DISPOSED. THE APPELLANT FAILED TO OFFER SATISFACTORY EXPLANATION IN THE VARIATION DURING ASSESSMENT PROCEEDING AND ALSO DURING APPEAL PROCEEDINGS. THE APPELLANT HAS NOT OBTAINED ANY CONFIRMATION FROM M/S. SHAW WALLACE DISTILLERIES LT D. REGARDING THE COMMISSION PAYMENT MADE TO THE APPELLANT. THE APPELLANT PLACED RELIANC E ON THE TDS CERTIFICATES SUBMITTED. IT IS SEEN THAT THE APPELLANT RECEIVED COMMISSION FOR THE SERVICE RENDERED TO M/S. SHAW WALLACE DISTILLERIES LTD. IN THE ABSENCE OF CONFIR MATION FROM THE COMPANY REGARDING THE PAYMENT MADE TO THE APPELLANT AND SINCE THE APPELLA NT FAILED TO RECONCILE THE VARIATION OF COMMISSION RECEIPT FOUND IN THE AUDIT REPORT THE AO IS CORRECT AS PER LAW IN ASSESSING THE DIFFERENCE OF RS.78,59,892/- AS UNDISCLOSED COMMISS ION RECEIPT. THE AOS ACTION IS CORRECT AS PER LAW AND IS UPHELD. AGGRIEVED, ASSESSEE CAME IN SECOND APPEAL BEFORE TR IBUNAL. 3 ITA NO.120/K/2010 M/S. DAMANI & CO. AY 2004-05 4. BEFORE US LD. COUNSEL FOR THE ASSESSEE SHRI S. K . TULSIYAN, FIRST OF ALL, STATED THAT M/S. K. M. GULGULIA & CO. WAS THE PREVIOUS AUDITOR OF THE ASSESSEE FIRM WHO USED TO AUDIT THE ACCOUNTS OF THE ASSESSEE FIRM BUT DURING THE RELEVANT FY 2003-04 RELEVANT TO THIS AY 2004-05, THE PARTNERS OF THE ASSESSEE FIRM HAVE SHIFTED THE AUDIT TO M/S. A. K. MATHUR & CO. IN THIS REGARD, HE ARGUED THAT THE ACCOUNTS AUDITED BY M/S. K. M. GULGULIA & CO. WAS NOT AT ALL AUTHORIZED BY THE PARTNERS AND WAS O NLY FILED BY THE STAFF MEMBERS WITHOUT THE KNOWLEDGE OF THE PARTNERS OF THE ASSESSEE FIRM. ACCORDING TO LD. COUNSEL, THE AO COMPARED THE TWO AUDIT REPORTS & ACCOUNTS AND BASED ON THE SAME, DIFFERENCE OF THE TOTAL RECEIPT I.E. THE TOTAL RECEIPT OF RS.2,14,70,195/- DISCLOSED BY THE ACCOUNTS AUDITED BY M/S. ANURAG MATHUR & CO. AND RECEIPTS DISCLOSED AT RS.2 ,93,30,087/- SHOWN IN THE ACCOUNTS AUDITED BY M/S. K. M. GULGULIA & CO. AND ADDED THE DIFFERENTIAL AMOUNT WITHOUT GOING INTO THE FACTS OF THE CASE. LD. COUNSEL FOR THE A SSESSEE STATED THAT THE ENTIRE RECEIPTS DURING THE RELEVANT ASSESSMENT YEAR REPRESENTED COO RDINATION COMMISSION FROM SWDL AND THE SAID PAYMENT WAS RECEIVED BY ASSESSEE FOR U NDERTAKING THE RESPONSIBILITY TO LOOK AFTER THE POLICY MATTERS FOR LIQUOR PURCHASE, CORDI AL RELATIONSHIP BETWEEN SWDL AND THE BUYER I.E. DIFFERENT MILITARY DEPOTS ORDERING LIQUO R, BILL PAYMENTS, CLAIM SETTLEMENT, INTRODUCTION OF NEW PRODUCT AND PRICING, CSD DEPOT OPERATION, URC OPERATION ETC. THE ASSESSEE SUBMITTED COPY OF ACCOUNT OF SWDL IN THE B OOKS OF ASSESSEE AND ALSO THE COPY OF ACCOUNT OF ASSESSEE IN THE BOOKS OF SWDL AND STA TED THAT THERE IS NO DIFFERENCE AND ACCORDING TO HIM, THE TOTAL RECEIPT IN ALL THESE AC COUNTS ARE DISCLOSED AT RS.2,14,70,195/- AS AGAINST THE TOTAL RECEIPT DISCLOSED BY AUDITOR M /S. K. M. GULGULIA & CO. AT RS.2,93,30,087/-. LD. COUNSEL FOR THE ASSESSEE ALS O STATED THAT IN VIEW OF THE AGREEMENT WITH SWDL AND COPIES OF BILLS RAISED ON SWDL AND AL SO COPIES OF TDS CERTIFICATE ISSUED BY SWDL, WHICH IS EVIDENCING THE TOTAL RECEIPT OF R S.2,14,70,195/- IS THE CORRECT RECEIPT DISCLOSED BY THE ASSESSEE IN ITS AUDITED ACCOUNTS A S AUDITED BY M/S. A. MATHUR & CO. ACCORDING TO LD. COUNSEL, SWDL IS A HIGHLY REPUTED COMPANY AND A VERY BIG CONCERN FROM WHERE THE AO SHOULD HAVE VERIFIED THE TOTAL RE CEIPTS OF THE ASSESSEE, BUT AO NOT CHOSE TO CARRY OUT THAT EXERCISE. ACCORDING TO LD. COUNSEL, THE ASSESSEE HAS DISCHARGED ITS ONUS BY PRODUCING ALL THE ABOVE MENTIONED EVIDE NCES BEFORE THE AO AS WELL AS BEFORE CIT(A). WHEN THESE EVIDENCES WERE AVAILABLE BEFORE AO HE COULD NOT FIND ANY MISTAKE IN THE BOOKS OF ACCOUNT DESPITE THE FACT THAT COMPL ETE BOOKS OF ACCOUNT AS AUDITED BY M/S. A. MATHUR & CO. WAS PRODUCED BEFORE THE AO DURING T HE COURSE OF ASSESSMENT 4 ITA NO.120/K/2010 M/S. DAMANI & CO. AY 2004-05 PROCEEDINGS. IN VIEW OF THESE ARGUMENTS, LD. COUNS EL FOR THE ASSESSEE REQUESTED THE BENCH TO DELETE THE ADDITION. 5. ON THE OTHER HAND, THE LD. SR. DR MD. GHAYASUDDI N, JCIT RELIED ON THE ORDERS OF THE LOWER AUTHORITIES AND STATED THAT WHEN TWO AUDI T REPORTS ARE AVAILABLE, AO HAS TAKEN THE HIGHEST FIGURE MENTIONED BY ASSESSEE AS RECEIPT S. HE STATED THAT THE ASSESSEE IS UNABLE TO EXPLAIN THE DIFFERENCE BETWEEN THE TWO AUDIT REP ORTS AND ACCORDING TO HIM, EVEN SHRI K. M. GULGULIA OF M/S. K. M. GULGULIA & CO. ADMITTED T O HAVE AUDITED THE ACCOUNTS OF THE ASSESSEE WHEN HIS STATEMENT WAS RECORDED. ACCORDIN GLY, HE URGED THE BENCH TO CONFIRM THE ORDERS OF THE LOWER AUTHORITIES. 6. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE HAVE ALSO PERUSED THE CASE RECORDS AND PAP ER BOOK FILED BY ASSESSEE. WE FIND THAT THE FACTS NARRATED ABOVE ARE UNDISPUTED. WE FI ND THAT THE AO COMPARED TWO AUDIT REPORTS AND BASED ON AUDIT REPORTS ONLY HE ADDED TH E DIFFERENCE IN TOTAL RECEIPTS AT RS.78,59,892/- WHILE COMPLETING ASSESSMENT U/S. 143 (3) OF THE ACT. THE ASSESSEE FROM THE VERY BEGINNING BEFORE THE AO AS WELL AS BEFORE CIT( A) DENIED THE FACTUM OF AUDIT REPORT PREPARED BY SHRI K. K. GULGULIA & CO. DATED 30.10.2 004 WHEREIN TOTAL RECEIPT WAS DISCLOSED IN THE P&L ACCOUNT AT RS.2,93,30,087/-. M /S. K. M. GULGULIA & CO. WAS THE PREVIOUS AUDITOR OF THE ASSESSEE FIRM WHO USED TO A UDIT THE ACCOUNTS OF THE ASSESSEE FIRM BUT DURING THE RELEVANT FY 2003-04 RELEVANT TO THIS AY 2004-05, THE PARTNERS OF THE ASSESSEE FIRM HAVE SHIFTED THE AUDIT TO M/S. A. K. MATHUR & CO. THE AO COMPARED THE TWO AUDIT REPORTS & ACCOUNTS AND BASED ON THE SAME, DIFFERENCE OF THE TOTAL RECEIPT I.E. THE TOTAL RECEIPT OF RS.2,14,70,195/- DISCLOSED BY THE ACCOUNTS AUDITED BY M/S. ANURAG MATHUR & CO. AND RECEIPTS DISCLOSED AT RS.2,93,30,087/- SH OWN IN THE ACCOUNTS AUDITED BY M/S. K. M. GULGULIA & CO. AND ADDED THE DIFFERENTIAL AMOUNT WITHOUT GOING INTO THE FACTS OF THE CASE. WE FIND FROM RECORDS THAT THE ENTIRE RECEIPTS DURING THE RELEVANT ASSESSMENT YEAR REPRESENTED COORDINATION COMMISSION FROM SWDL AND T HE SAID PAYMENT WAS RECEIVED BY ASSESSEE FOR UNDERTAKING THE RESPONSIBILITY TO LOOK AFTER THE POLICY MATTERS FOR LIQUOR PURCHASE, CORDIAL RELATIONSHIP BETWEEN SWDL AND THE BUYER I.E. DIFFERENT MILITARY DEPOTS ORDERING LIQUOR, BILL PAYMENTS, CLAIM SETTLEMENT, I NTRODUCTION OF NEW PRODUCT AND PRICING, CSD DEPOT OPERATION, URC OPERATION ETC. THE ASSESS EE SUBMITTED COPY OF ACCOUNT OF SWDL IN THE BOOKS OF ASSESSEE AND ALSO THE COPY OF ACCOUNT OF ASSESSEE IN THE BOOKS OF SWDL AND THERE IS NO DIFFERENCE AND THE TOTAL RECEI PT IN ALL THESE ACCOUNTS ARE DISCLOSED AT 5 ITA NO.120/K/2010 M/S. DAMANI & CO. AY 2004-05 RS.2,14,70,195/- AS AGAINST THE TOTAL RECEIPT DISCL OSED BY AUDITOR M/S. K. M. GULGULIA & CO. AT RS.2,93,30,087/-. FROM THE AGREEMENT WITH S WDL AND COPIES OF BILLS RAISED ON SWDL AND ALSO COPIES OF TDS CERTIFICATE ISSUED BY S WDL, WHICH IS EVIDENCING THE TOTAL RECEIPT OF RS.2,14,70,195/-, THE CORRECT RECEIPT SE EMS TO BE AS DISCLOSED BY THE ASSESSEE IN ITS AUDITED ACCOUNTS AS AUDITED BY M/S. A. MATHUR & CO. WE ARE OF THE VIEW THAT THE AO HAS NEVER TRIED TO VERIFY THE FACTUM CORRECT RECEIP TS EVEN THOUGH SWDL IS A REPUTED AND A BIG CONCERN FROM WHERE THE AO SHOULD HAVE VERIFIED THE TOTAL RECEIPTS OF THE ASSESSEE. IT IS A FACT THAT THE ASSESSEE HAS DISCHARGED ITS ONUS BY PRODUCING ALL THE ABOVE MENTIONED EVIDENCES BEFORE THE AO AS WELL AS BEFORE CIT(A) AN D WHEN THESE EVIDENCES WERE AVAILABLE BEFORE AO, AND HE COULD NOT FIND ANY MIST AKE IN THE BOOKS OF ACCOUNT, HE CANNOT MAKE ANY ADDITION ON THIS ACCOUNT. 7. WE FIND THAT THIS ISSUE HAS BEEN DEALT WITH BY H ONBLE SUPREME COURT IN THE CASE OF INDORE MALWA UNITED MILLS LTD. VS. STATE OF MADH YA PRADESH & ANR. (1966) 60 ITR 41 (MP), WHEREIN THE HONBLE HIGH COURT HAS HELD AS UN DER: HELD, THAT, AS THE APPELLANT PRODUCED BEFORE THE A SSESSING AUTHORITIES ALL ITS REGISTERS, IT WAS THEIR DUTY TO DEFINITELY COME TO ONE CONCLUSION OR THE OTHER IN REGARD TO THE RELIABILITY OF EVERY ONE OF THE RELEVANT ACCOUNTS FILED BY THE APPELLANT, AND IN THE ABSENCE OF ANY SUCH FINDING IT WAS NOT OPEN TO THEM TO PICK AND CHOOSE SOME OF THE REGISTERS, WHICH WERE MORE FAVOURABLE TO THE REVENUE. SIMILARLY, HONBLE GAUHATI HIGH COURT IN THE CASE O F CIT VS. ARMAN SHEIKH (2007) 293 ITR 266 (GAU), WHEREIN IT HAS BEEN HELD AS UNDER: HELD, DISMISSING THE APPEAL, THAT THE TWO AMOUNTS WERE RECEIVED BY THE ASSESSEE FROM A GOVERNMENT AGENCY BY CHEQUES AND THEY WERE DEPOSITE D IN THE BANK ACCOUNT OF THE ASSESSEE AND DULY REFLECTED IN THE REGULAR BOOKS OF ACCOUNT. THE ASSESSING OFFICER RELIED UPON A PART OF THE ENTRIES IN THE BOOKS OF ACCOUNT AND REJECTED THE OTHER PART. SINCE THE ENTRIES MADE IN THE BOOKS OF ACCOUNT BEFORE THE DAT E OF SEARCH AND SEIZURE HAD BEEN ACCEPTED, THE AMOUNT IN QUESTION OUGHT NOT TO HAVE BEEN TREATED AS UNDISCLOSED. THE SEARCH TOOK PLACE ON JULY 20, 2000, AND AUGUST 9, 2000, ON WHICH DATES THE RETURN FOR THE ASSESSMENT YEARS 2000-01 AND 2001-02 HAD NOT FALLEN DUE. THE RETURNS FOR THE ASSESSMENT YEARS BASED ON REGULAR BOOKS OF ACCOUNT WERE FILED AFTER SEARCH DISCLOSING THE BANK DEPOSITS. THERE WAS NO MATERIAL TO SHOW THAT THE AS SESSEE INTENDED TO HIDE ANY PART OF HIS INCOME FOR THE ASSESSMENTS UNDER APPEAL. THUS, THE BANK ACCOUNTS OUGHT NOT TO HAVE BEEN TREATED AS UNDISCLOSED BANK ACCOUNTS AND COULD NOT BE THE SUBJECT MATTER OF BLOCK ASSESSMENT PROCEEDINGS. SIMILARLY, COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF BANSAL STRIPS (P) LTD. VS. ACIT (2006) 99 ITD 177 HAS HELD AS UNDER: WHILE RELYING ON THE AFORESAID STATEMENT OF SHRI V. P. JAIN THE ASSESSING OFFICER, IN THE ABSENCE OF ANY SPECIFIC MATERIAL, IS NOT JUSTIFIED IN ADOPTING A PICK AND CHOOSE POLICY. HE CANNOT SELECTIVELY RELY UPON THE PARTS OF THE STATE MENT AGAINST THE ASSESSEES AND AT THE SAME TIME IGNORE OTHER PARTS WHICH GO IN FAVOUR OF THE ASSESSEES BEFORE US. 6 ITA NO.120/K/2010 M/S. DAMANI & CO. AY 2004-05 8. IN VIEW OF THE ABOVE FACTS AND PROPOSITION OF LA W CITED ABOVE, WE ARE OF THE VIEW THAT IN THE PRESENT CASE THE AO HAS NOT DOUBTED THE BOOKS OF ACCOUNTS AS HE HAS NOT REJECTED THE SAME. SECONDLY, HE HAS COMPARED TWO A UDIT REPORTS AND TAKEN THE HIGHER FIGURES FROM BOTH THE ACCOUNTS ACCOMPANYING THE AUD IT REPORTS. THE AO, FIRST OF ALL, HAS NOT GIVEN ANY FINDING WHICH IS THE CORRECT STATE OF ACCOUNTS AS AUDITED BY TWO CHARTERED ACCOUNTANTS DESPITE THE FACT THAT HE HAS EXAMINED B OTH THE CHARTERED ACCOUNTANTS. IT IS ALSO A FACT THAT THE ASSESSEE HAS PRODUCED COMPLETE ADDRESS OF THE PARTY SWDL AND TDS CERTIFICATES ISSUED BY THAT PARTY CLEARLY REVEALS T HAT THE TOTAL RECEIPTS ARE AT RS.2,14,70,195/- AS AGAINST THE TOTAL RECEIPT ADOPT ED BY AO RS.2,93,30,087/-. THE ASSESSEE HAS PRODUCED COMPLETE BILLS ISSUED BY SWDL AND PAYMENTS ARE RECEIVED BY CHEQUE THROUGH BANK ACCOUNTS. THE ASSESSEE FILED B EFORE THE AUTHORITIES CONCERNED ALL THE BOOKS OF ACCOUNT REFLECTING THE RECEIPTS FROM SWDL AND IN THAT CASE IT WAS THE DUTY OF THE AUTHORITIES TO DEFINITELY COME TO ONE CONCLUSION OR THE OTHER IN REGARD TO THE RELIABILITY OF EVERYONE OF THE RELEVANT ACCOUNT FILED BY THE ASSES SEE. IN THE ABSENCE OF ANY SUCH FINDING, IT WAS NOT OPEN TO THEM TO PICK AND CHOSE ONE RECEI PT OR THE OTHER, WHICH ARE MORE FAVOURABLE TO THE REVENUE. THEY COULD ACCEPT THE A SSESSEES EXPLANATION OR REJECT THEM OR THEY COULD CHECK THE ENTRIES THEREIN WITH REFERENCE TO THE BOOKS OF ACCOUNT. BUT THEY HAVE NOT DONE NONE OF THESE THINGS. ACCORDINGLY, WE ARE OF THE VIEW THAT THE ASSESSEES AUDIT REPORT AS FILED ALONG WITH THE RETURN OF INCOME AS AUDITED BY M/S. ANURAG MATHUR & CO. IS THE CORRECT ACCOUNTS FOR THE REASON THAT THE RECEIP TS DISCLOSED THEREIN ARE MATCHING WITH THE TDS CERTIFICATES ISSUED BY SWDL AND ALSO WITH T HE BILLS RAISED. ACCORDINGLY, WE DELETE THE ADDITION AND ALLOW THIS ISSUE OF ASSESSE ES APPEAL. 9. THE SECOND ISSUE IN THIS APPEAL OF ASSESSEE IS A GAINST THE ORDER OF CIT(A) CONFIRMING THE ACTION OF AO IN DISALLOWING COMMISSI ON OF RS.1,93,89,240/-. FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NO.2: 2. THAT ON THE FACT AND IN THE CIRCUMSTANCES OF T HE CASE THE ADDITION ON ACCOUNT OF DISALLOWANCE OF COMMISSION OF RS.1,93,89,240/- IS U NFAIR BASED ON NO EVIDENCE AND BASED ON INCONGRUOUS FACTUAL PREMISES. 10. BRIEFLY STATED FACTS ARE THAT THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED FROM THE P&L ACCOUNT AS AUDITED BY SHRI ANU RAG MATHUR OF M/S. ANURAG MATHUR & CO. DATED 27.10.2004 THAT IT HAS DEBITED A SUM OF RS.1,93,89,240/- UNDER SUB- COORDINATION COMMISSION. THE AO REQUIRED THE ASSES SEE TO GIVE DETAILS OF THE PARTIES AND ASSESSEE SUBMITTED THE DETAILS OF COMMISSION PAID T O THE FOLLOWING PARTIES: 7 ITA NO.120/K/2010 M/S. DAMANI & CO. AY 2004-05 SL. NO. NAME OF THE PERSON AMOUNT 1 DAVE COMMERCIAL CO. 40,55,150 2 SYMCOM SALES SERVICES (P) LTD. 33,90,060 3 MAFEX (P) LTD. 51,38,080 4 KRIPASANT COMMERCIAL PVT. LTD. 47,27,400 5 FUN & FOOD (P) LTD. 20,78,550 TOTAL: 1,93,89,240 ACCORDINGLY, THE AO FURTHER REQUESTED THE ASSESSEE TO GIVE THE DETAILS OF SERVICES RENDERED BY THESE PARTIES FOR PROCURING THE ASSESSEES BUSIN ESS. THE AO ISSUED NOTICE U/S. 133(6) OF THE ACT TO THESE PARTIES BUT THERE WAS NO EXPLAN ATION COMING FORTH OR THE NOTICE RETURNED BY THE POSTAL DEPARTMENT WITH THE REMARK NOT KNOWN OR NOT FOUND. ACCORDING TO AO, THE ASSESSEE HAS NOT DEDUCTED ANY TDS ON THE ABOVE COMMISSION AND HENCE, HE ADDED THE COMMISSION TO THE TOTAL INCOME OF THE ASS ESSEE AT RS.1,93,89,240/-. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO ALSO C ONFIRMED THE ACTION OF AO BY OBSERVING AS UNDER: I) THE A.O ISSUED NOTICE U/S. 133(6) WHICH COULD NOT BE SERVED ON THESE PARTIES AT THE ADDRESS GIVEN BY THE APPELLANT. THE APPELLANT WAS I NFORMED AND THE A.O REQUESTED FOR PRODUCTION OF THESE PARTIES. THE APPELLANT FAILED T O PRODUCE THE PARTIES. II) FROM THE DETAILS FURNISHED BY THE APPELLANT THE A.O. OBTAINED THE PROFIT AND LOSS ACCOUNT OF FOUR OF THE PARTIES. COPIES OF THESE PROFIT AND LOSS ACCOUNT IS ENCLOSED TO THE ASSESSMENT ORDER AS ANNEXURE 1,2,3 AND 4. IT IS SEEN THAT THE COMMISSION PAYMENT DISCLOSED BY THE PARTIES ARE NEGLIGIBLE COMPARED TO THE CLAIM OF EXP ENSES BY THE APPELLANT. THE A.O CALLED FOR AN EXPLANATION FOR THIS DISCREPANCY. THE APPELL ANT FAILED TO OFFER ANY EXPLANATION REGARDING THE DISCREPANCY NOTICED BY THE A.O. IT IS CONTENDED DURING THE APPEAL PROCEEDINGS THAT THEY ARE APPOINTED ON COST PLUS RE MUNERATION BASIS AND BILLS ARE RAISED PERIODICALLY. HOWEVER NO EVIDENCE IS FURNISHED IN S UPPORT OF THIS CONTENTION. FURTHER NO SUCH EXPLANATION GIVEN BEFORE THE A.O. III) THE APPELLANT HAS NOT MADE DEDUCTION OF TAX FR OM THE COMMISSION PAYMENT CLAIMED TO HAVE BEEN MADE. IV) THE APPELLANT HAS NOT FURNISHED ANY CONFIRMATIO N FROM THE PARTIES REGARDING THE SUB-COORDINATOR COMMISSION RECEIVED. NO DETAILS REG ARDING THE BILLS RAISED, SERVICES CLAIMED TO BE RENDERED BY THEM ETC. ARE FURNISHED. IN THE ABSENCE OF SUCH BASIC INFORMATION THE APPELLANT FAILED TO ESTABLISH THAT THE SUB-COOR DINATOR COMMISSION IS A GENUINE BUSINESS EXPENDITURE INCURRED FOR SERVICES RENDERED BY THESE PARTIES. IN THE ABSENCE OF EVIDENCE REGARDING SERVICES RENDERED BY THE PARTIES AND THE GENUINENESS OF THE PAYMENT MADE TO THESE PARTIES, THE A.O IS CORRECT AS PER LAW IN DIS ALLOWING THE CLAIM OF SUB-COORDINATOR COMMISSION. THE A.O'S ACTION IS CORRECT AS PER LAW AND IS UPHELD. AGGRIEVED, ASSESSEE IS IN SECOND APPEAL BEFORE TRIB UNAL. 11. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H FACTS AND CIRCUMSTANCES OF THE CASE. THE LD. COUNSEL FOR THE ASSESSEE BEFORE US S TATED THAT THE ASSESSEE WAS RECEIVING COMMISSION INCOME OF RS.2,14,70,195/- FROM SWDL FOR UNDERTAKING RESPONSIBILITY TO LOOK AFTER ALL THE POLICY MATTERS FOR REQUIRING PUR CHASE, CORDIAL RELATIONSHIP BETWEEN 8 ITA NO.120/K/2010 M/S. DAMANI & CO. AY 2004-05 SWDL AND THE BUYERS, LIQUOR ORDERING, URC OPERATIO N ETC. AND IN LIEU OF THIS, THE SWDL PAID COMMISSION TO THE ASSESSEE. ACCORDING TO LD. C OUNSEL, THE AFORESAID JOB WAS EXECUTED BY THE ASSESSEE BY ASSIGNING THE WORK TO T HIRD PARTIES AS THESE PARTIES WERE ENGAGED IN THE SAME JOB. APART FROM COST PLUS REMU NERATION, THE PARTIES RAISED THE BILLS FOR EXPENSES INCURRED BY THEM ALONG WITH THEIR SERV ICE CHARGES ON MONTHLY BASIS. THE ASSESSEE PAID THESE COMMISSION CHARGES AND SUBMITTE D STATEMENT OF ACCOUNT OF THE AFORESAID PARTIES MENTIONING THEIR PAN WITH XEROX C OPIES OF BILLS AND ACCOUNT PAYEE CHEQUES ALONG WITH LEDGER ACCOUNT OF COMMISSION PAY MENT. LD. COUNSEL FOR THE ASSESSEE STATED THAT THE ASSESSEE PRODUCED COMPLETE DETAILS INCLUDING CHEQUE PAYMENTS, BILLS AND RECIPIENTS INCOME TAX RETURNS ALONG WITH PAN TO TH E AO BUT HE FAILED TO CARRY OUT ANY ENQUIRY IN THIS RESPECT. LD. COUNSEL FOR THE ASSES SEE ALSO STATED THAT IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR 2003-04, THE ASSESSEE WAS ENGAGED IN THE SAME BUSINESS AND ALSO TAKEN SERVICES FROM THE SAID PARTIES AND PAID COMMISSION TO THEM AND NO DISALLOWANCE WAS MADE BY THE AO BUT AGAIN CASE WAS REOPENED BY ISSUING NOTICE U/S. 148 READ WITH SECTION 147 OF THE ACT ON THE BASIS OF IN FORMATION THAT ONE OF THE PARTIES UMANG CREDIT CAPITAL LTD., THE TRANSACTION HAD NOT BEEN R EFLECTED IN ITS TRADING & P&L ACCOUNT AND THE TRANSACTION HAD BEEN DENIED BY THESE PARTIE S. ACCORDINGLY, THE COMMISSION PAID TO THESE PARTIES WERE DISALLOWED BUT CIT(A) VIDE HI S APPELLATE ORDER DATED 20.11.2012 CONSIDERED ALL THE ASPECTS AND ACKNOWLEDGED THE SER VICES RENDERED BY THESE PARTIES AND ALLOWED THE PAYMENT OF COMMISSION EXCEPT IN THE CAS E OF M/S. DAVE COMMERCIAL CO. AT RS.6,99,975/-. IN VIEW OF THIS, LD. COUNSEL FOR TH E ASSESSEE ARGUED THAT THERE IS NO CHANGE IN THE FACTS IN THE PRESENT CASE FOR THE RELEVANT A SSESSMENT YEAR IN COMPARISON TO EARLIER AY 2003-04, AS FAR AS THIS ISSUE IS CONCERNED AND H ENCE, THE REVENUE SHOULD NOT HAVE TAKEN DIFFERENT CONCLUSION THAN ALLOWING THE PAYMEN TS. ON THE OTHER HAND, LD. SR. DR STATED THAT THERE IS NO EVIDENCE IN THE PRESENT CAS E THAT THESE PARTIES HAVE RENDERED SERVICES FOR RECEIPT OF COMMISSION AND ONCE THERE I S NO EVIDENCE THAT THESE PARTIES HAVE RENDERED SERVICES FOR ACCEPTING COORDINATION COMMIS SION, THE EXPENSES CANNOT BE ALLOWED. 12. WE FIND THAT ASSESSEE WAS RECEIVED COMMISSION O F RS.2,14,70,195/- FROM SWDL FOR UNDERTAKING RESPONSIBILITY TO LOOK AFTER ALL TH E POLICY MATTERS FOR REQUIRING PURCHASE, CORDIAL RELATIONSHIP BETWEEN SWDL AND THE BUYERS, L IQUOR ORDERING, URC OPERATION ETC. AND IN LIEU OF THIS, THE SWDL PAID COMMISSION TO TH E ASSESSEE. WE FIND FROM RECORD THAT 9 ITA NO.120/K/2010 M/S. DAMANI & CO. AY 2004-05 THE AFORESAID JOB WAS EXECUTED BY THE ASSESSEE BY A SSIGNING THE WORK TO THIRD PARTIES AS MENTIONED ABOVE AND THESE PARTIES WERE ENGAGED IN T HE SAME JOB. APART FROM COST PLUS REMUNERATION, THE PARTIES RAISED THE BILLS FOR EXPE NSES INCURRED BY THEM ALONG WITH THEIR SERVICE CHARGES ON MONTHLY BASIS. THE ASSESSEE PAID COMMISSION CHARGES AND SUBMITTED STATEMENT OF ACCOUNT OF THE AFORESAID PARTIES MENTI ONING THEIR PAN WITH XEROX COPIES OF BILLS AND ACCOUNT PAYEE CHEQUES ALONG WITH LEDGER A CCOUNT OF COMMISSION PAYMENT. WE FIND FROM THE CASE RECORDS THAT THE ASSESSEE PRODUC ED COMPLETE DETAILS INCLUDING PAYMENTS BY CHEQUES, BILLS AND RECIPIENTS INCOME TAX RETURN S ALONG WITH PAN TO THE AO BUT HE FAILED TO CARRY OUT ANY ENQUIRY IN THIS RESPECT. WE FIND THAT IN THE IMMEDIATE PRECEDING YEAR I.E., ASSESSMENT YEAR 2003-04, THE ASSESSEE WA S ENGAGED IN THE SAME BUSINESS AND ALSO TAKEN SERVICES FROM THE SAID PARTIES AND PAID COMMISSION TO THEM AND NO DISALLOWANCE WAS MADE BY THE AO ORIGINALLY, BUT AGA IN CASE WAS REOPENED BY ISSUING NOTICE U/S. 148 READ WITH SECTION 147 OF THE ACT ON THE BASIS OF INFORMATION THAT ONE OF THE PARTIES UMANG CREDIT CAPITAL LTD., THE TRANSACTION HAD NOT BEEN REFLECTED IN ITS TRADING & P&L ACCOUNT AND TRANSACTION HAD BEEN DENIED BY THIS PARTY. ACCORDINGLY, COMMISSION PAID TO THESE PARTIES WERE DISALLOWED BUT CIT(A) VI DE HIS APPELLATE ORDER DATED 20.11.2012 CONSIDERED ALL THE ASPECTS AND ACKNOWLED GED THE SERVICES RENDERED BY THESE PARTIES AND ALLOWED THE PAYMENT OF COMMISSION EXCEP T IN THE CASE OF M/S. DAVE COMMERCIAL CO. AT RS.6,99,975/-. IN VIEW OF THESE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THAT, SINCE THERE IS NO CHA NGE IN THE FACTS IN THE PRESENT CASE FOR THE RELEVANT ASSESSMENT YEAR IN COMPARISON TO EARLIER A Y 2003-04, AS FAR AS THIS ISSUE IS CONCERNED AND HENCE, THE REVENUE SHOULD NOT HAVE TA KEN DIFFERENT CONCLUSION THAN ALLOWING THE PAYMENTS EXCEPT IN THE CASE OF M/S. DA VE COMMERCIAL CO. WE DIRECT THE AO TO RESTRICT THE DISALLOWANCE TO THE EXTENT OF THIS PARTY I.E., M/S. DAVE COMMERCIAL CO. ONLY. WE DIRECT THE AO ACCORDINGLY. THIS ISSUE OF A SSESSEES APPEAL IS PARTLY ALLOWED. 13. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AG AINST THE ORDER OF CIT(A) CONFIRMING THE ACTION OF AO IN DISALLOWING BUSINESS PROMOTION EXPENSES OF RS.4,88,704/-. FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NO.3 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE DISALLOWANCE OF BUSINESS PROMOTION EXPENSES OF RS.4,88,704/- IS UNFAIR BASED ON NO EVIDENCE AND BASED ON INCONGRUOUS FACTUAL PREMISES. 14. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE INC URRED EXPENSES ON PURCHASE OF VARIOUS PRESENTATION ITEMS AS WELL AS EXPENSES TOWARDS PAYM ENT OF HOTEL BILLS OF GUESTS. THE 10 ITA NO.120/K/2010 M/S. DAMANI & CO. AY 2004-05 ASSESSEE CLAIMED THE BUSINESS PROMOTION EXPENSES OF RS.8,39,894/-. THE AO DISALLOWED THE ENTIRE BUSINESS PROMOTION EXPENSES BY STATING T HAT THE AFORESAID EXPENDITURE IS NOT IN THE LINE OF ASSESSEES BUSINESS. THE CIT(A) PARTLY ALLOWED I.E. 50% OF THE BUSINESS PROMOTION EXPENSES BY OBSERVING AS UNDER: THE APPELLANT CLAIMED BUSINESS PROMOTION EXPENSES OF RS.8,39,894/-. THE LEDGER COPY OF THE EXPENDITURE IS FURNISHED. FROM THE LEDGER COPY IT IS SEEN THAT THE FOLLOWING EXPENSES ARE INCURRED: I) PAYMENT TO STANCHART BANK RS. 2,88,704/- II) PAYMENT TO ROHIT ENTERPRISE FOR PURCHASE OF BALL PE N RS. 3,04,000/- III) CASH EXPENDITURE IS INCURRED TOWARDS HOTEL BILLS, G UEST ENTERTAINMENT RS.2,41,190/- THE APPELLANT HAS NOT FURNISHED ANY DETAILS REGARDI NG THE PAYMENT MADE TO STANCHART BANK. THE PURPOSE FOR MAKING THE PAYMENT IS NOT PROPERLY EXPLAINED. IT IS NOT KNOWN WHETHER THIS EXPENDITURE IS INCURRED FOR THE PURPOSE OF BUSINESS OF THE APPELLANT. IN THE ABSENCE OF PROPER EVIDENCE THE AO IS CORRECT IN MAKING DISALLOWANCE O F THE AMOUNT OF RS.2,88,704/-. THE APPELLANT CLAIMED PAYMENT OF RS.3,0-4,000/- TO ROHIT ENTERPRISES FOR THE PURCHASE OF BALL PENS. IN THE ABSENCE OF PROPER BILLS AND VOUCHERS, A DISALLOWANCE OF RS.1 LAKH OUT OF THE CLAIM WOULD MEET THE ENDS OF JUSTICE. THE APPELLANT GETS A RELIEF OF RS.2,04,000/- (3,04,000- 1,00,000). THE APPELLANT CLAIMED CASH EXPENDITURE TOWARDS HOTE L BILLS, GUEST ENTERTAINMENT. THE TOTAL EXPENDITURE CLAIMED BY THE APPELLANT IS RS.2,47,190 /-. HOWEVER EVIDENCE IN SUPPORT OF THIS EXPENDITURE IS NOT FURNISHED BEFORE THE AO OR DURIN G THE APPEAL PROCEEDINGS. CONSIDERING THE BUSINESS REQUIREMENT OF THE APPELLANT A DISALLOWANC E OF RS.1,00,000/- WOULD MEET THE ENDS OF JUSTICE. THE APPELLANT GETS RELIEF OF RS.1,48,190/ - (2,47,190 1,00,000/-). TO SUM UP, DISALLOWANCE OF RS.4,88,704/- (2,88,704 + 1,00,000 + 1,00,000) IS SUSTAINED. THE APPELLANT GETS RELIEF OF RS.3,51,190/- (8,39,894 4,88,704). AGGRIEVED ASSESSEE IS IN SECOND APPEAL BEFORE TRIBU NAL. 15. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT EXACTLY SIMILAR EXPENSES ON ACC OUNT OF BUSINESS PROMOTION WAS ALLOWED IN IMMEDIATELY PRECEDING ASSESSMENT YEAR 20 03-04 BY THE AO HIMSELF. THE AO IN THE IMMEDIATELY PRECEDING YEAR HAS CLEARLY HELD THAT THESE ARE BUSINESS EXPENSES RELATABLE TO THE BUSINESS OF THE ASSESSEE FOR THE R EASON THAT THE ASSESSEE BEING THE SALE COORDINATOR FOR SUPPLIES TO CANTEEN STORES DEPARTME NT (OF MILITARY WING) FROM SWDL AND SUCH EXPENDITURE IS ALLOWABLE AS BUSINESS EXPEN DITURE. WE FIND THAT SIMILAR EXPENSES WERE ALLOWED BY COORDINATE BENCH IN THE CASE OF JCI T VS. ITC LTD. 299 ITR 341 (AT)(KOL), WHEREIN IT IS OBSERVED AS UNDER: THAT WHILE DISALLOWING 10 PER CENT, OF EXPENDITUR E, THE ASSESSING OFFICER HAD NOT BROUGHT ANY MATERIAL EVIDENCE ON RECORD TO JUSTIFY THE DISALLOWANCE THAT SUCH EXPENDITURE HAD RESULTED IN BENEFIT TO A THIRD PARTY OR HAD NOT BEEN MADE BY THE ASSESSEE FOR ITS GENUINE BUSINESS NEEDS. THE ASSESSEE HAD SUBMITTED THE DETAILS OF EXPENDITURE RELATING TO SPONSORSHIP FOR ORGANIZING VARIOUS EVENTS FOR THE P ROMOTION OF DIFFERENT BRANDS OF CIGARETTES MANUFACTURED BY IT. THE ASSESSEE HAD SH OWN THE EXPENDITURE OF RS.172.60 11 ITA NO.120/K/2010 M/S. DAMANI & CO. AY 2004-05 CRORES ON ACCOUNT OF ADVERTISEMENT EXPENSES WHICH I NCLUDED RS.133 LAKH AS SALES PROMOTION EXPENSES. THE ASSESSEE COMPANY HAD MADE AN EXPENDITURE ON THE SPONSORSHIP OF VARIOUS EVENTS LIKE GOLF, POLO, FOOTBALL, CRICKE T, RACING, BADMINTON, ETC. FOR THE PURPOSE OF ADVERTISEMENT OF ITS PRODUCT. THE DEPARTMENT HA D NOT DISPUTED THE IDENTICAL EXPENDITURE IN ANY OF THE PREVIOUS YEAR AND THE AUD ITORS HAD ALSO POINTED OUT THAT SUCH EXPENSES WERE NOT RELATED OR INCIDENTAL TO THE BUSI NESS NEEDS OF THE ASSESSEE. THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING 10 PER CENT OF SUCH EXPENDITURE WITHOUT MATERIAL EVIDENCE ON RECORD WAS NOT JUSTIFIED. FROM THE ABOVE, WE ARE OF THE VIEW THAT THESE EXPEN SES ARE ALLOWABLE EXPENDITURE, FIRST ON THE PRINCIPLES OF CONSISTENCY AND EVEN OTHERWISE TH E CIT(A) HAS ADMITTED THE EXPENSES TO BE BUSINESS IN NATURE BUT DISALLOWED 50% ON THE BAS IS OF ESTIMATE. THAT CANNOT BE THE BASIS FOR DISALLOWANCE. ACCORDINGLY, WE DELETE THE DISALLOWANCE AND THIS ISSUE OF ASSESSEES APPEAL IS ALLOWED. 16. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. 17. ORDER IS PRONOUNCED IN THE OPEN COURT ON 10.11. 2015 SD/- SD/- (WASEEM AHMED) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 10TH NOVEMBER, 2015 JD. SR. P.S COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT M/S. DAMANI & CO., C/O P. K. MATHUR, AD VOCATE, 1, MEREDITH STREET, KOLKATA-700 072. 2 RESPONDENT ITO, WARD-45(2), KOLKATA. 3 . THE CIT(A), KOLKATA 4. 5. CIT KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .