SMT. RAMA GARG, Sehore V. THE ACIT 3(1), Bhopal

ITA 1345/IND/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5181 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-01-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 15-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Assessee Lawyers: R K MANGAL
• Keywords: Principle of natural justice; Non-deduction of tax; Corroborative evidences
• Section: 143(3)

Judgement Text

[ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.1345/IND/2016 ASSESSMENT YEAR: 2012-13 SMT. RAMA GARG PROPRIETOR M/S. GAYATRI TRADERS, GANDHI CHOWK, CHOTA BAZAR NASRULLAGANJ, SEHORE-466331 / VS. ACIT-3(1) BHOPAL ( APPELLANT ) ( REVENUE ) P.A. NO. ABCPG1140J ITA NO.1321/IND/2016 ASSESSMENT YEAR: 2012-13 ACIT-3(1) BHOPAL / VS. SMT. RAMA GARG PROPRIETOR M/S. GAYATRI TRADERS, GANDHI CHOWK, CHOTA BAZAR NASRULLAGANJ, SEHORE-466331 (APPELLANT) (REVENUE ) [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 2 APPELLANT BY SHRI R.K. MANGAL, A.R. RESPONDENT BY SMT. ASHIMA GUPTA, D.R. DATE OF HEARING: 09.01.2019 DATE OF PRONOUNCEMENT: 05.02.2019 / O R D E R PER KUL BHARAT, J.M: THESE CROSS APPEALS BY THE ASSESSEE AND REVENUE ARE PERTAINING TO THE ASSESSMENT YEAR 2012-13 ARE DIRECTED AGAINST ORDER OF CIT(A)-2, BHOPAL DATED 30.9.2016. THE SE CROSS APPEALS WERE TAKEN UP TOGETHER FOR HEARING AND ARE BEING DISPOSED OF BY WAY OF A CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. FIRST WE TAKE UP REVE NUES APPEAL I.E. ITA NO.1321/IND/2016 FOR THE A.Y. 2012-13 . THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) WAS JUSTIFIED IN DELETING ADDITION ON ACCOUNT OF PURCHA SE OF RS.5,38,02,206/-. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) WAS JUSTIFIED IN DELETING ADDITION ON ACCOUNT OF CAR EX PENSES OF RS.95,603/-. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) WAS JUSTIFIED IN DELETING ADDITION ON ACCOUNT OF DISCOU NT EXPENSES OF RS.8,59,589/- . [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 3 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) WAS JUSTIFIED IN DELETING ADDITION ON ACCOUNT OF MANDI TAX OF RS.7,40,803/-. 5. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) WAS JUSTIFIED IN DELETING ADDITION ON ACCOUNT OF NIRASH RIT TAX OF RS.74,083/-. 6. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) WAS JUSTIFIED IN DELETING ADDITION ON ACCOUNT OF EXPENS ES AND SHORTAGE CLAIM EXPENSE OF RS.40,81,305/-. 7. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) WAS JUSTIFIED IN DELETING ADDITION ON ACCOUNT OF WAGES EXPENSES OF RS.2,70,680/-. 8. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) WAS JUSTIFIED IN DELETING ADDITION ON ACCOUNT OF DIESEL EXPENSES OF RS.84,420/-. 9. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) WAS JUSTIFIED IN DELETING ADDITION ON ACCOUNT OF CONTRA CT RECEIPT OF RS.7,20,692/-. 2. THE FACTS GIVING RISE TO THE PRESENT APPEAL ARE THAT CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSM ENT AND THE ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT) WAS FRAMED VIDE ORDER DATED 17.3.2015. THE ASSESSEE IS A PROPRIETOR OF M/S. GAYATRI TRADERS AND IS ENGAGED IN THE BUSINESS OF DEALI NG IN GRAINS, OIL SEEDS AND PULSES AS TRADER AND GENERAL COMMISSION AGENT. DURING THE YEAR UNDER CONSIDERATION , THE ASSESSEE HAD GROSS TURNOVER OF RS.24,11,40,533/- AND GROSS PROFIT DECLARED IS RS.1,47,49,433/- AND ON THI S NET [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 4 PROFIT DECLARED AT RS.11,01,072/-. THE A.O. CALLED FO R THE EVIDENCES RELATING TO SALE AND PURCHASES. THE A.O. NO TED THAT THE ASSESSEE HAD DEBITED PURCHASES OF RS.22,41,75,856/-. HOWEVER, THE ASSESSEE DID NOT PR ODUCE ANY BILLS IN SUPPORT OF PURCHASE. THEREFORE, HE PROC EEDED TO MAKE 25% OF THE PURCHASES AS NOT SUPPORTED WITH TH E EVIDENCE AND THEREFORE, HE MADE ADDITION OF RS.5,60,43,964/- IN THIS REGARD. FURTHER, THE A.O. MADE VARIOUS ADDITIONS ON ACCOUNT OF DISALLOWANCE OF ELECTRIC ITY AND POWER EXPENSES OF RS.7,99,254/-. SALES EXPENSES OF RS.4,09,893/-. MINOR EXPENSES OF RS.1,06,205/-, DI SCOUNT EXPENSES OF RS.10,74,486/- AND ON ACCOUNT OF MANDI TA X RS.7,40,803/-. THE A.O. ALSO MADE ADDITION ON ACCOUNT OF SHORTAGE CLAIM OF RS.45,34,783/-. FURTHER, DISALLOWANC E OF 50% OF WAGES EXPENSES OF AMOUNTING TO RS.3,00,755/-. THE A.O. ALSO MADE ADDITION OF RS.93,800/- ON ACCOUNT O F DISALLOWANCE OF DIESEL EXPENSES. THE A.O. ALSO MADE [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 5 ADDITION OF RS.7,20,692/- FOR NOT DEDUCTING TAX. TH US, THE A.O. COMPUTED INCOME AT RS.6,59,38,450/- AGAINST THE RETURNED INCOME OF RS.10,39,710/-. 3. AGGRIEVED BY THIS ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS PARTLY ALLOWED THE APPEAL, THEREBY, THE LD. CIT(A) RESTRICTED THE DISALLOWANCE @ 1% IN RESPECT OF THE PURCHASES. THE LD. CIT(A) SUSTAINED THE ADDITIONS MADE IN RESPECT OF ELECTRICITY EXPENSES, OTHER SALES EXPENSE S AND ALSO RESTRICTED CAR EXPENSES TO 50%. FURTHER DISALLOW ANCE MADE IN RESPECT OF DISCOUNT WAS REDUCED TO RS.2,14,89 7/-. FURTHER, DELETED ADDITION OF RS.7,40,803/- BEING TH E MANDI TAX PAID. THE LD. CIT(A) RESTRICTED THE DISALLOWANCE MADE ON ACCOUNT OF SHORTAGE TO THE EXTENT OF 10%. FURTHER ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF WAGES WAS ALSO RESTRICTED TO 10% AND HE DELETED ADDITION MADE ON ACCOUNT OF NON-DEDUCTION OF TAX. [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 6 4. AGAINST THIS ORDER, BOTH THE REVENUE AND ASSESSEE ARE IN APPEAL BEFORE THIS TRIBUNAL. 5. GROUND NO.1 OF THE REVENUES APPEAL IS AGAINST DELETING THE ADDITIONS MADE ON ACCOUNT OF PURCHASES O F RS.5,38,02,206/-. 6. LD. D.R. SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITIONS. HE RELIED UPON THE ASSESSMENT ORDER. 7. LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD. CIT(A). HOWEVER, HE SUBMITTED THAT THE L D. CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.22,41,758/- ON THE BASIS OF ADHOC DISALLOWANCE. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE A.O. HAD MADE ADDITION PURELY ON THE BASIS OF SUSPICION. THE ASSESSEE HAD [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 7 FURNISHED RELEVANT EVIDENCES, WHICH WERE DULY CONSID ERED BY THE LD. CIT(A). THEREFORE, THERE IS NO INFIRMIT Y INTO THE ORDER OF THE LD. CIT(A) SO FAR DELETING THE ADDITIONS MADE ON ACCOUNT OF PURCHASES. GROUND OF THE REVENUES APPE AL IS REJECTED. 9. GROUND NO.2 IS AGAINST DELETING THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF CAR EXPENSES OF RS.95,603 /-. 10. LD. D.R. SUPPORTED THE ASSESSMENT ORDER AND RELIED UPON THE FINDINGS GIVEN BY THE A.O. 11. ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE A.O. HAD MADE ADDITION ON ADHOC BASIS . 12. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD. CIT(A ) HAD DELETED THE ADDITION AS THE SAME WAS MADE PURELY ON ADHOC BASIS. THEREFORE, WE DO NOT SEE ANY INFIRMITY INTO [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 8 THE ORDER OF THE LD. CIT(A) AND THE SAME IS HEREBY AFF IRMED. GROUND OF THE REVENUES APPEAL IS REJECTED. 13. GROUND NO.3 IS AGAINST DELETING THE ADDITION MADE ON ACCOUNT OF DISCOUNT EXPENSES OF RS.8,59,589/-. 14. LD. D.R. SUPPORTED THE ASSESSMENT ORDER AND RELIED UPON THE FINDINGS GIVEN BY THE A.O. 15. ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AUTHORITIES BELOW WERE NOT JUSTIFI ED IN MAKING THE ADDITION. 16. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE LD. CIT(A) DECIDED TH E ISSUE IN PARA 11.2 OF HIS ORDER BY HOLDING AS UNDER: 11.2 DISCOUNT OF RS.10,74,486/- HAS BEEN CLAIMED DURING THE YEAR AS AGAINST RS.6,73,327/- CLAIMED IN THE SUCCEE DING ASSESSMENT YEAR 2013-14. BOTH THE PURCHASES AND THE SALES ARE HIGH ER IN A.Y. 2013-14 (AS MENTIONED IN PARA 7.2 ABOVE) AND YET LESS DISCOUNT HAS BEEN PAID. NO [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 9 BILLS/EVIDENCE HAS BEEN PRODUCED DURING ASSESSMENT PROCEEDINGS OR THE REMAND PROCEEDINGS. DURING APPEAL PROCEEDINGS NO D ETAILS HAVE BEEN FILED OF DISCOUNT GIVEN. IN THE ABSENCE OF ANY DET AILS, THE DISALLOWANCE OF EXPENDITURE IS SUSTAINED TO THE EXTENT OF 20% OF TH E SAME. AN ADDITION OF RS.2,14,897/- IS UPHELD. ADDITION OF RS.8,59,589/- IS DELETED. THE GROUND OF APPEAL IS PARTLY ALLOWED. 17. WE FIND THAT THE A.O. HAD DISALLOWED THESE EXPENSE S ON THE BASIS THAT NO EVIDENCES HAVE BEEN FURNISHED. IT WAS INCUMBENT UPON THE ASSESSEE TO FURNISH SUPPORTING EVIDENCES OF ANY EXPENDITURE RELATED TO THE BUSINESS AS INCURRED BY HER. NO SUCH EVIDENCE WAS FURNISHED, EV EN THE LD. CIT(A) CONCURRED TO THIS FACT. THEREFORE, THE FINDING OF THE LD. CIT(A) CANNOT BE SUSTAINED, HENCE, WE REVERSE THE FINDING OF THE LD. CIT(A) AND RESTORE THAT OF THE ASSE SSING OFFICER ON THIS ISSUE. THIS GROUND OF THE REVENU ES APPEAL IS ALLOWED. [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 10 18. GROUND NOS.4 & 5 ARE AGAINST DELETION OF ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF MANDI TAX AND NIRASHRIT TAX. 19. LD. D.R. SUPPORTED THE ASSESSMENT ORDER AND SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DE LETING THE ADDITIONS. 20. PER CONTRA, LD. A.R. RELIED ON THE ORDER OF LD. CIT(A). HE SUBMITTED THAT SUCH PAYMENTS ARE ALLOWABLE EXPENDITURE. 21. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT BOTH THE ISSU ES HAVE BEEN DECIDED IN PARAS 12.1 TO 13 OF THE ORDER OF THE LD. CIT(A) AND THE SAME IS HEREBY REPRODUCED AS UNDER: [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 11 THE NIRASHRIT TAX IS PAID 10% OF THE MANDI TAX. FO R THE REASONS AS DISCUSSED IN PARA 12 ABOVE, THE DISALLOWANCE OF RS.74,083/- MADE BY THE A.O. IS DELETED. THE GROUND OF APPEAL IS ALLOWED. [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 12 22. THE LD. CIT(A) HAS GIVEN A FINDING ON FACT ON TH E BASIS OF THE VERIFICATION MADE ON THE EVIDENCES PRODUC ED BY THE ASSESSEE. REVENUE COULD NOT REBUT THIS FINDING BY PLACING ANY CONTRARY MATERIAL AS TO HOW THIS AMOUNT IS NOT ALLOWABLE. HENCE, BOTH THE GROUNDS OF THE REVENUES APPEAL ARE DISMISSED. 23. GROUND NO.6 IS AGAINST DELETING THE ADDITION ON ACCOUNT OF SHORTAGE COMMISSION. 24. LD. D.R. RELIED UPON THE ORDER OF THE A.O. AND SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DE LETING THE ADDITION. 25. PER CONTRA, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE A.O. WAS NOT JUSTIFIED IN MAKING TH E DISALLOWANCE AS THE ASSESSEE DEALS IN GRAIN COMMODITIES AND THERE IS ALWAYS LIKELIHOOD OF SHORTAGE, WHICH IS A [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 13 NORMAL HAPPENING IN THIS LINE OF BUSINESS. THIS REL ATES TO BUSINESS OF THE ASSESSEE. 26. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. LD. CIT(A) HAS DECIDED THI S ISSUE IN PARA NOS.14 WHICH IS REPRODUCED AS UNDER: [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 14 27. UNDISPUTEDLY, THE REVENUE HAS BEEN ALLOWING SUCH CLAIM IN PAST. NO NEW FACT OR BASIS IS BROUGHT TO OUR NOTICE. MOREOVER, LOOKING TO THE NATURE OF BUSINESS , WE DO NOT SEE ANY INFIRMITY INTO THE ORDER OF THE LD. CIT( A) AND THE SAME IS HEREBY AFFIRMED. GROUND RAISED BY THE REV ENUE IS DISMISSED. 28. GROUND NO.7 IS AGAINST DELETING THE ADDITION ON ACCOUNT OF WAGES EXPENSES OF RS.2,70,680/-. 29. LD. D.R. RELIED UPON THE ORDER OF THE A.O. AND SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DE LETING THE ADDITION. 30. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE A.O. WAS NOT JUSTIFIED IN MAKING THE ADDITION BY DISALL OWING THE 25% EXPENDITURE, ON ADHOC BASIS. THE ASSESSEE HAD FURNISHED REQUISITE DETAILS OF WAGE PAYMENTS. [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 15 31. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND FORCE IN THE CONT ENTIONS THAT THE ASSESSING OFFICER HAD MADE DISALLOWANCE PURELY ON ADHOC ESTIMATION BASIS WITHOUT CONSIDERING THE FACTS OF THE CASE, THEREFORE, WE DO NOT SEE ANY INFIRMITY IN DELET ING THE ADDITION BY THE LD. CIT(A). GROUND RAISED BY THE REV ENUE IS REJECTED. 32. GROUND NO.8 IS AGAINST DELETING THE ADDITION ON ACCOUNT OF DISALLOWANCE OF DIESEL EXPENSES OF RS.84,4 20/-. 33. LD. D.R. RELIED UPON THE ORDER OF THE A.O. AND SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DE LETING THE ADDITION AS THE ASSESSEE HAD NOT PRODUCED ANY EVIDENCES IN SUPPORT OF THESE EXPENSES. 34. LD. COUNSEL FOR THE ASSESSEE OPPOSED THE SUBMISSIONS OF THE LD. D.R. AND SUBMITTED THAT THE [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 16 EXPENDITURE IS RELATED TO BUSINESS AND THE DETAILS WER E DULY FURNISHED BEFORE THE AUTHORITIES BELOW. 35. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. LD. CIT(A) HAS ALLOWED THE EXPENDITURE TO THE EXTENT OF RS.84,420/- AND MADE ADHO C DISALLOWANCE OF 25% BY FOLLOWING THE ASSESSMENT MADE IN THE ASSESSMENT YEAR 2013-14. THE REVENUE HAS NOT BROUGHT ANY MATERIAL SUGGESTING THAT THIS EXPENDITURE W AS NOT INCURRED FOR THE PURPOSE OF BUSINESS, THEREFORE , WE DO NOT SEE ANY INFIRMITY INTO THE ORDER OF THE LD. CIT( A) AND THE SAME IS HEREBY AFFIRMED. GROUND RAISED BY THE REV ENUE IS REJECTED. 36. GROUND NO.9 IS AGAINST DELETING THE ADDITION OF CONTRACT RECEIPTS OF RS.7,20,692/-. [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 17 37. LD. D.R. RELIED UPON THE ORDER OF THE A.O. AND SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DE LETING THE ADDITION AND SUBMITTED THAT THE A.O. HAD RIGHTLY MAD E ADDITION BY OBSERVING THAT THE ASSESSEE HAD NOT REFLECT ED THE RECEIPTS IN THE PROFIT & LOSS ACCOUNT. 38. LD. COUNSEL FOR THE ASSESSEE OPPOSED THE SUBMISSIONS OF THE LD. D.R. AND SUBMITTED THAT THE ASSESSEE HAS DULY DISCLOSED THESE RECEIPTS AND HENCE, SUPPORTED THE ORDER OF THE LD. CIT(A). 39. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE LD. CIT(A) HAS GIVEN F INDING ON FACT IN PARA NOS.17.3 OF HIS ORDER IN THIS REGARD, WHICH IS REPRODUCED AS UNDER: 17.3 I HAVE CONSIDERED THE FACTS OF THE CASE AND T HE WRITTEN SUBMISSION OF THE APPELLANT. UPON PERUSAL OF 26AS STATEMENT OF TAX DEDUCTED BY GUJRAT AMBUJA EXPORT LTD. AND THE COPY OF LEDGER A/C OF GUJRAT AMBUJA IN THE BOOKS OF THE APPELLANT, THE CLAIM OF THE APPELLANT THAT THE SUMS ON WHICH TAX HAS BEEN DEDUC TED U/S 194H/194C PERTAIN TO FREIGHT, HAMMALI AND ADHAT REC OVERED IN SALE [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 18 BILLS AND ALREADY ACCOUNT FOR IN THE BOOKS OF THE A PPELLANT IS FOUND TO BE CORRECT. A REFERENCE TO THE LEDGER ACCOUNT OF G UJRAT AMBUJA EXPORTS LTD. REVEALS THAT THE AMOUNT OF SALES IS IN CLUSIVE OF THE HAMMALI, ADHAT AND FREIGHT CHARGES. THE ADDITION M ADE BY THE A.O. IS, ACCORDINGLY, DELETED. THE GROUND OF APPEAL IS ALLOWED. 40. THIS FINDING IS NOT CONTROVERTED BY THE REVENU E BY PLACING ANY OTHER MATERIAL, THEREFORE, WE DO NOT SEE ANY INFIRMITY INTO THE ORDER OF THE LD. CIT(A) AND THE S AME IS HEREBY AFFIRMED. GROUND RAISED BY THE REVENUE IS REJ ECTED. 41. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S PARTLY ALLOWED. 42. NOW WE TAKE UP THE ASSESSEES APPEAL IN ITA NO.1345/IND/2016. THE ASSESSEE IS IN APPEAL BEFORE T HIS TRIBUNAL IN RESPECT OF THE ADDITIONS SUSTAINED BY THE LD. CIT(A). THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LEARNED CIT(A) ERRED IN NOT HOLDING THAT T HE ASSESSMENT ORDER WAS BAD IN LAW. IT WAS PERVERSE; (2) IT WAS BASED ON IRRELEVANT MATERIAL; (3) IT WAS UNREASONABLE; (4) I T WAS BASED ON NO EVIDENCE; (5) IT WAS BASED ON MATERIAL NOT ON RECOR D; (6) IT SUFFERS FROM THE VICE OF NON APPLICATION OF MIND TO THE VIT AL AND IMPORTANT [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 19 MATTERS; (7) THE DECISION OR THE ORDER IS SUCH THAT NO REASONABLE MAN CAN CONCLUDE UPON THE APPRAISAL OF THE FACT ON RECO RD. 2. THAT THE LEARNED CIT(A) ERRED IN NOT HOLDING THAT T HE ASSESSMENT ORDER PASSED BY THE A.O. WAS WITHOUT FOLLOWING RULE OF NATURAL JUSTICE AND FAIR PLAY AND WAS THEREFORE A NULLITY A ND THE SAME MAY BE DECLARED NULL AND VOID. 3. THAT THE LEARNED CIT(A) ERRED IN MAINTAINING THE AD DITION OF RS.22,41,758/- ON ACCOUNT OF PURCHASE. 4. THAT THE LEARNED CIT(A) ERRED IN MAINTAINING ADDITI ON OF RS.7,99,254/- ON ACCOUNT OF PAYMENT OF ELECTRICITY CHARGES BEING 100% DISALLOWANCE OF EXPENSES. 5. THAT THE LEARNED CIT(A) ERRED IN MAINTAINING ADDITI ON OF RS.4,09,893/- EXPENSES ON ADHAT SALES (RS.3,44,388/ -) AND DALALI (RS.65,505/-) EXPENSES BEING THE 100% OF EXPENSES. 6. THAT THE LEARNED CIT(A) ERRED IN MAINTAINING ADDITI ON OF RS.2,14,897/- ON ACCOUNT OF DISCOUNT ALLOWED. 7. THAT THE LEARNED CIT(A) ERRED IN MAINTAINING ADDITI ON OF RS.4,53,478/- ON ACCOUNT OF CLAIM AGAINST SALES AND SHORTAGE CLAIMS. 8. THAT THE LEARNED CIT(A) ERRED IN MAINTAINING ADDITI ON OF RS.30,075/- ON ACCOUNT OF WAGES EXPENSES. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT HE DOES NOT WISH TO PRESS GROUND NOS. 1&2. GROUND NOS.1 & 2 ARE ACCORDINGLY DISMISSED AS NOT PRESSED. 43. GROUND NO.3 OF THE ASSESSEES APPEAL IS IN RESPEC T OF SUSTAINING ADDITION OF RS.22,41,785/- MADE ON ACCO UNT OF PURCHASES. LD. COUNSEL FOR THE ASSESSEE VEHEMENT LY [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 20 ARGUED THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED I N MAKING THE ADDITIONS IN RESPECT OF THE PURCHASES. HE SUBMITTED THAT ALL THE PURCHASES ARE MADE THROUGH MANDI. HE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SYNOPSIS. 44. LD. D.R. OPPOSED THE SUBMISSIONS AND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. HE SUBMITTED T HAT THE ASSESSING OFFICER HAD MADE ADDITION ON ACCOUNT OF THE ASSESSEES FAILURE TO SUPPORT PURCHASES. 45. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE AUTHORITIES BELOW HAVE ACCEPTED THE PURCHASES. HOWEVER, THE DISALLOWANCE HAS BEEN MADE PURELY ON ADHOC AND ESTIMATION BASIS. NONE OF THE AUTHORITY HAS BROUGHT ANY MATERIAL ON RECORD SUGGESTING THAT THE CLAIM OF THE ASSESSEE WAS WRONG IN RESPECT OF [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 21 PURCHASES MADE FROM MANDI. THE ASSESSEE HAS ALSO PAID TAXES. PAYMENT OF MANDI TAX AND NIRASHRIT TAX IS QUARTE RLY REPORTED TO THE COMMERCIAL TAX AUTHORITIES. THERE IS NO ADVERSE MATERIAL BROUGHT ON RECORD. UNDER THESE FACTS, THE ADHOC DISALLOWANCE MADE BY THE AUTHORITY BELOW CANNOT BE SUSTAINED. THIS GROUND OF THE ASSESSEES APPEAL IS ALLO WED. 46. GROUND NO.4 IS AGAINST DISALLOWANCE OF ELECTRICITY EXPENSES. LD. COUNSEL FOR THE ASSESSEE REITERATED TH E SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSIONS. GROUND NO.4: MAINTAINING ADDITION OF ELECTRICITY CH ARGES RS.7,99,254/- THE APPELLANT IS STORING ITS STOCKS AT GARG WAREHO USE BELONGING TO HER HUSBAND SHRI VINOD KUMAR AGRAWAL. THE MANUFACTURIN G ACTIVITIES OF ATTA IS ALSO UNDERTAKEN IN THE SAME PREMISES. THE PAYMENT OF EL ECTRICITY BILLS ARE TOWARDS RUNNING OF MANUFACTURING UNIT AND ELECTRICITY USED AT NIGHT FOR LOADING AND UNLOADING OF TRUCKS. THE DISALLOWANCE OF 100% EXPE NSES AND UPHOLDING THE SAME BY LEARNED CIT(A) IS AGAINST THE NATURAL JUSTI CE WHEN THE ENTIRE EXPENSES HAVE BEEN INCURRED FOR THE PURPOSES OF BUSINESS AND NO ELEMENT OF PERSONAL EXPENSES ARE INVOLVED. ONLY THE BILLS ARE IN THE N AME OF GARG WAREHOUSE SHOULD NOT BE A REASON FOR DISALLOWANCE OF EXPENSE WHEN THE SAME IS USED FOR THE APPELLANT BUSINESS. THE APPELLANT PRAYS FOR DE LETING OF THE ENTIRE ADDITION UPHELD BY THE LEARNED CIT(A). POWER USED RESPONDENT RELIES ON THE LEARNED CIT(A) ORDER FOR DELETION OF DIESEL EXPENSES. THE RESPONDENT HAS SUBMITTED COMP LETE DETAIL BEFORE LEARNED CIT(A). THE EXPENSES IS WITH RESPECT TO RUNNING OF GENERATOR SET FOR RUNNING OF ATTA UNIT AS THE POWER REMAINS IN SHORTAGE AND ERRA TIC AND FAILURE OF SUPPLY. [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 22 47. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE LD. CIT(A) SUSTAINED T HESE ADDITIONS BY OBSERVING AS UNDER: 8.3 IN THE REMAND REPORT SUBMITTED BY THE A.O., IT WAS STATED THAT NO ELECTRICITY BILLS IN THE NAME OF RAM A GARG WERE PRODUCED BY THE ASSESSEE. THE ASSESSEE PRODUCED ON LY ONE BILL, THAT TOO IN THE NAME OF M/S. GARG WAREHOUSING. IN THE REJOINDER, IT HAS BEEN STATED BY THE ASSESSEE THAT M/S. GARG WARE HOUSING IS OWNED BY MR. VINOD AGARWAL, HUSBAND OF THE APPELLAN T. THE WAREHOUSING LICENSE HAS BEEN SURRENDERED AND THE SA ID PREMISES WERE USED BY THE APPELLANT FOR HER BUSINESS ACTIVIT IES DURING THE YEAR WITHOUT PAYING ANY CONSIDERATION. HENCE THE E LECTRICITY EXPENSES HAVE BEEN DEBITED TO THE BOOKS OF THE APPE LLANT. 8.4 I HAVE CONSIDERED THE FACTS OF THE CASE AND T HE SUBMISSIONS OF THE APPELLANT. IT IS AN ADMITTED FA CT THAT THE ELECTRICITY CONNECTION/BILLS ARE IN THE NAME OF MS. GARG WAREHOUSING. APART FROM MAKING THIS CONTENTION, TH E APPELLANT HAS BROUGHT NO MATERIAL/EVIDENCE ON RECORD TO SHOW THAT THE SAID PREMISES WERE INDEED USED FOR THE BUSINESS OF THE A PPELLANT. IN THE ABSENCE OF ANY EVIDENCE, THE CONTENTION OF THE APPE LLANT REMAINS UNSUBSTANTIATED. ADDITION ON IDENTICAL ISSUE HAS A LSO BEEN MADE U/S 143(3) IN THE SUCCEEDING ASSESSMENT. IN VIEW O F THE ABOVE, THE ADDITION MADE BY THE A.O. IS UPHELD. THE GROUND OF APPEAL IS DISMISSED. 48. BEFORE THIS TRIBUNAL, THE ASSESSEE HAS NOT BROUGH T ANY MATERIAL SUGGESTING THAT THERE WAS ANY UNDERSTANDING WITH THE PROPRIETOR OF M/S. GARG WAREHOUSING IN RESP ECT OF ELECTRICITY BILL TO BE PAID BY THE ASSESSEE. IN THE ABSENCE OF [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 23 SUCH MATERIAL, WE DO NOT SEE ANY INFIRMITY INTO THE O RDER OF THE AUTHORITIES BELOW AND THE SAME IS HEREBY DISMISSED . 49. GROUND NO.5 IS AGAINST MAINTAINING ADDITION OF ADHAT SALES AND THE DALALI EXPENSES TOTALLING TO RS.4,09,893/-. LD. COUNSEL FOR THE ASSESSEE REITERAT ED THE SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSIONS. TH E SUBMISSIONS OF THE ASSESSEE ARE THAT THE GOODS WERE SO LD THROUGH ADHATIA AND BROKERS. SHE HAD INCURRED RS.3,44,388/- TOWARDS OTHER EXPENSES AND RS.65,505/- TOWARDS DALALI EXPENSES. THE EXPENSES ARE TOWARDS SALES MADE THROUGH THE ADHATIA. IT IS CONTENDED THAT 100% DISALLOWANCE OF EXPENSES IS NOT JUSTIFIED. LD. D.R. SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE COULD NOT PROVE THE EXPEN SES WERE MADE FOR BUSINESS PURPOSES. 50. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 24 OF THE AUTHORITIES BELOW. THE A.O. HAS DISALLOWED THE EXPENSES ON THE BASIS OF NON PRODUCTION OF THE DETAIL S WITH SUPPORTING VOUCHERS, SAME WAS AFFIRMED BY THE LD. CIT( A). THE ASSESSEE COULD NOT POINT OUT THAT IT HAD PRODUCED THE VOUCHERS AND DETAILS IN SUPPORT OF THESE EXPENSES. I T IS INCUMBENT UPON THE ASSESSEE TO PROVE THAT EXPENDITURE WAS INCURRED FOR THE BUSINESS PURPOSES. THUS, THIS GROUND OF THE ASSESSEES APPEAL IS REJECTED. 51. GROUND NO.6 IS REGARDING MAINTAINING ADDITION OF RS.2,14,897/- ON ACCOUNT OF DISCOUNT CLAIM. LD. COU NSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE I N THE WRITTEN SUBMISSIONS. IT IS CONTENDED THAT ISSUANCE O F DISCOUNT IS LINKED WITH THE SALES OF THE APPELLANT. THE ENTIRE SALES HAS BEEN CONSIDERED AND THE DISCOUNT ISSU ED IS ALSO ON THE SALES. THE DISALLOWANCE OF 20% EXPENSES IS CONTRARY TO THE LAW. [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 25 52. LD. D.R. OPPOSED THE SUBMISSIONS AND SUPPORTED THE ORDER OF THE A.O. 53. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PARTIES. THE GROUND NO.6 IS AGAINST MAINTAINING ADDITIO N OF RS.2,14,897/- ON ACCOUNT OF DISCOUNT ALLOWED. WE FIND THAT THE REVENUE HAS ALSO RAISED GROUND AGAINST DELETING THE ADDITION ON ACCOUNT OF DISCOUNT ALLOWED. IN CROSS APPEAL, THE REVENUE HAS ALSO RAISED GROUND AGAINST DELETI ON OF ADDITION IN ITA NO.1321/IND/2016 AS GROUND NO.3. THE FACTS AND CIRCUMSTANCES ARE IDENTICAL. THE PARTIES HAVE ADOPTED THE SAME ARGUMENT. WE HAVE ALREADY DECIDED THIS ISSUE ABOVE IN FAVOUR OF THE REVENUE BY OBSERVING AS U NDER: 12. GROUND NO.3 IS AGAINST DELETING THE ADDITION M ADE ON ACCOUNT OF DISCOUNT EXPENSES OF RS.8,59,589/-. 13. LD. D.R. SUPPORTED THE ASSESSMENT ORDER AND REL IED UPON THE FINDINGS GIVEN BY THE A.O. 14. ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE S UBMITTED THAT THE AUTHORITIES BELOW WAS NOT JUSTIFIED IN MAKING THE A DDITION. 15. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. THE LD. CIT(A) DECIDED THE ISSUE BY HOLDING AS UNDER: [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 26 11.2 DISCOUNT OF RS.10,74,486/- HAS BEEN CLAIMED DURING THE YEAR AS AGAINST RS.6,73,327/- CLAIMED IN THE SU CCEEDING ASSESSMENT YEAR 2013-14. BOTH THE PURCHASES AND THE SALES ARE HIGHER IN A.Y. 2013- 14 (AS MENTIONED IN PARA 7.2 ABOVE) AND YET LESS DI SCOUNT HAS BEEN PAID. NO BILLS/EVIDENCE HAS BEEN PRODUCED DURING ASSESSME NT PROCEEDINGS OR THE REMAND PROCEEDINGS. DURING APPEAL PROCEEDINGS NO DETAILS HAVE BEEN FILED OF DISCOUNT GIVEN. IN THE ABSENCE OF ANY DET AILS, THE DISALLOWANCE OF EXPENDITURE IS SUSTAINED TO THE EXTENT OF 20% OF TH E SAME. AN ADDITION OF RS.2,14,897/- IS UPHELD. ADDITION OF RS.8,59,589/- IS DELETED. THE GROUND OF APPEAL IS PARTLY ALLOWED. 16. WE FIND THAT THE A.O. HAD DISALLOWED THESE EXPE NSES ON THE BASIS OF NO EVIDENCES HAS BEEN FURNISHED. IT IS INCUMBENT UPON THE ASSESSEE TO FURNISH SUPPORTING EVIDENCES OR ANY EXPENDITURE RELATED TO BE INCURRED BY HER. NO SUCH EVIDENCE HAS BEEN PLACED. THEREFORE, THE FINDING O F THE LD. CIT(A) CANNOT BE SUSTAINED, HENCE, WE REVERSE THIS FINDING OF THE LD . CIT(A) AND RESTORE THE FINDING OF THE ASSESSING OFFICER. THIS GROUND OF THE REV ENUES APPEAL IS ALLOWED. 54. THEREFORE, THIS GROUND OF THE ASSESSEES APPEAL I S DISMISSED. 55. GROUND NO.7 IS ON ACCOUNT OF MAINTAINING ADDITION OF RS.4,53,478/- ON ACCOUNT OF CLAIM AGAINST SAL ES AND SHORTAGE CLAIM. 56. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AUTHORITIES BELOW WERE NOT JUSTIFIED IN MAKING THE ADD ITION AND SUSTAINED THE SAME. 57. ON THE CONTRARY, LD. D.R. OPPOSED THE SUBMISSIONS AND SUPPORTED THE ORDER OF THE A.O. [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 27 58. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE ADDITIONS HAVE BEEN MADE PURELY ON ADHOC BASIS WITHOUT CONSIDERING TH E MATERIAL PLACED ON RECORD. SINCE THIS EXPENDITURE IS RELATED TO THE BUSINESS OF THE ASSESSEE, THEREFORE, THE CLAIM IS ALLOWED. THE A.O. IS DIRECTED TO DELETE THIS ADDITIO N. 59. GROUND NO.8 IS AGAINST MAINTAINING THE ADDITION OF RS.30,075/- ON ACCOUNT OF WAGES EXPENSES. 60. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITIONS HAVE BEEN MADE PURELY ON ESTIMATION BASIS WITHOUT CONSIDERING THE FACTS AND THE EVIDENCES PLACES ON RECORD. WE FIND THAT BOTH THE AUTHORITIES HAVE MADE ADDITION ON ADHOC BASIS. THE A.O. HAS NOT GIVEN ANY [ITA NO.1345/IND/2016 & NO.1321/IND/2016] [SMT. RAMA GARG, SEHORE] 28 REASON AS TO WHY 25% OF THE WAGES IS DISALLOWABLE. THEREFORE, WE DIRECT THE A.O. TO DELETE THIS ADDITIO N. 61. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE AND REVENUE ARE PARTLY ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 05 . 02.2019. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 05/02/2019 VG/SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE