SMT. NISHA JAIN, KOTA V. DCIT, CENTRAL CIRCLE, KOTA

ITA 1368/JPR/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 4725 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2016-2017
• Appeal Filed On: 16-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RUNI PAL ACIT
• Keywords: Depreciation; Corroborative evidences; Retraction; Revised return
• Section: 133A

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,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. NO. 1368/JP/2019 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2016-17 SMT. NISHA JAIN 149, BALLABHBARI, GUMANPURA, KOTA. CUKE VS. THE ACIT/DCIT, CENTRAL CIRCLE-1, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABLPJ 8118 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL JKTLO DH VKSJ LS @ REVENUE BY : SMT. RUNI PAL (ACIT) A LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 09/12/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 03/02/2021 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER OF LD. CIT(A)-II, UDAIPUR DATED 30.09.2019 PERTAINING TO A SSESSMENT YEAR 2016-17 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWIN G GROUNDS OF APPEAL:- 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS. 24,69,065/- BY TREATING THE EXP ENSES CLAIMED TO THAT EXTENT AS INFLATED BASED ON PAGE 97 OF ANNE XURE A-8 AND STATEMENT OF HUSBAND OF ASSESSEE WHICH STOOD RETRAC TED BY IGNORING THE AUDITED FINANCIAL STATEMENT. ITA NO. 1368/JP/2019 SMT. NISHA JAIN VS. ACIT/DCIT 2 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS. 8,27,656/- BEING DIFFERENCE BETWEEN THE ORIGINAL RETURN OF INCOME AND REVISED RETURN OF INCOME BY NO T ACCEPTING THE CONTENTION OF ASSESSEE THAT THE ORIGINAL RETURN INCLUDES THE ADVERTISEMENT RECEIPT OF RS. 49,23,773/- BILLED IN THE NAME OF BHAGAT SINGH PUBLIC SR. SEC. SCHOOL BUT SINCE THE O RDER WAS NOT IMPLEMENTED, THE SAME WAS REDUCED FROM RECEIPT WITH CORRESPONDING REDUCTION OF THE COST OF RS. 40,96,11 7/- IN THE REVISED RETURN RESULTING INTO REDUCTION IN INCOME B Y RS. 8,27,656/- (49,23,773-40,96,117) ON THE GROUND THAT REVERSAL OF SALES BY THE ASSESSEE REMAINS UNSUBSTANTIATED. 2. DURING THE COURSE OF HEARING, THE LD AR SUBMITTE D THAT THE ASSESSEE IS PROPRIETOR OF QUICK ADVERTISING CO. ENG AGED IN THE BUSINESS OF ADVERTISING AGENCY SINCE NOVEMBER, 1989. RETURN WAS FILED ON 16.10.2016 DECLARING INCOME OF RS.81,73,080/- WHICH WAS REVISED ON 16.10.2017 AT INCOME OF RS.73,45,420/-. A SURVEY WA S CONDUCTED ON 02.02.2017 AT BUSINESS PREMISES OF NARESH JAIN, HUS BAND OF ASSESSEE. DURING SURVEY CERTAIN PAPERS WERE FOUND MARKED AS A NNEXURE A-8. AT PG 97 OF THAT ANNEXURE [COPY ATTACHED WITH THE ORDE R OF LD. CIT(A)] A STATEMENT OF VARIOUS EXPENDITURE AS PER AUDIT REPOR T AND AS PER INCOME & EXPENDITURE A/C IS NOTED. ON COMPARISON OF THE AM OUNT UNDER THESE HEADS, IT IS FOUND THAT EXPENDITURE AS PER THE AUDI TED ACCOUNTS IS HIGHER BY RS.27,91,592/-. STATEMENT OF NARESH JAIN ON THIS DIFFERENCE IS RECORDED WHERE IN REPLY TO Q.NO.23 HE STATED THAT T HE PAPER RELATES TO QUICK ADVERTISING CO. AND FROM THE LOOK OF THE PAPE R IT IS SEEN THAT IN FY 2016-17 GENUINE EXPENSES INCURRED IS RECORDED BU T IN THE P&L A/C AS PER THE AUDIT REPORT THE EXPENDITURE IS INFLATED . ACCORDINGLY, HE SURRENDERED THE SAME. SH. NARESH JAIN THEREAFTER BY FILING AN AFFIDAVIT DT. 14.02.2017, I.E. JUST 12 DAYS AFTER THE DATE OF SURVEY RETRACTED FROM ITA NO. 1368/JP/2019 SMT. NISHA JAIN VS. ACIT/DCIT 3 SUCH STATEMENT AFTER GIVING DETAILED REASONS FOR TH E SAME AS PER PARA 4-9 OF THE AFFIDAVIT. IN COURSE OF ASSESSMENT PROCE EDINGS, ASSESSEE FILED DETAILED EXPLANATION IN RESPECT OF EACH OF THE EXPE NDITURE NOTED ON THE SAID PAPER. THE AO, HOWEVER, BY RELYING ON THE STAT EMENT OF SH. NARESH JAIN OBSERVED THAT ASSESSEE HAS INFLATED THE EXPENS ES WHICH ARE SUPPORTED ONLY WITH SELF MADE CASH VOUCHERS AND THU S MADE ADDITION OF RS.27,91,592/-. THE LD. CIT(A) HELD THAT UNDER VARI OUS HEADS OF EXPENSES WHERE THERE IS VARIATION, THEY ARE SUPPORT ED ONLY BY INTERNAL VOUCHERS AND NOT VERIFIABLE INDEPENDENTLY. THE AFFI DAVIT OF NARESH JAIN WITHOUT SUPPORTING EVIDENCE IS ONLY A SELF-SERVING DOCUMENT. HOWEVER, WITH REFERENCE TO THE VARIATION UNDER THE HEADING BANK INTEREST, HE ACCEPTED THAT EXPENSES NOTED AT RS.79,56,743/- UNDE R THE HEAD AUDIT REPORT AS AGAINST RS.76,34,216/- NOTED UNDER THE HE AD INCOME & EXPENDITURE ACCOUNT IS CORRECT AND THUS, DELETED TH E ADDITION TO THE EXTENT OF RS.3,22,527/-. ACCORDINGLY, ADDITION OF R S.24,69,065/- IS CONFIRMED. 3. IN ABOVE FACTUAL BACKGROUND, THE LD. AR SUBMITT ED THAT THE ONLY BASIS OF ADDITION IS THE DIFFERENCE BETWEEN THE AMO UNT NOTED UNDER VARIOUS HEADS OF EXPENSES UNDER THE HEADING AS PER AUDIT REPORT AND AS PER INCOME & EXPENDITURE. THE AMOUNT NOTED UNDER TH E HEAD INCOME & EXPENDITURE IS PREPARED SOME TIME DURING THE SUBSEQ UENT YEAR AND IS NOT THE EXPENDITURE FOR THE ENTIRE YEAR. THIS IS EV IDENT FROM THE FACT THAT UNDER THE HEAD BANK INTEREST THE ACTUAL EXPEND ITURE IS RS.79,56,743/- WHEREAS THE AMOUNT RECORDED UNDER TH E HEAD INCOME & EXPENDITURE IS RS.76,34,216/-, LEAVING A DIFFERENCE OF RS.3,22,527/- WHICH IS ACCEPTED BY THE LD. CIT(A). SIMILARLY THE AMOUNT RECORDED ITA NO. 1368/JP/2019 SMT. NISHA JAIN VS. ACIT/DCIT 4 UNDER THE HEAD DEPRECIATION AS PER AUDIT REPORT IS RS.9,22,183/- WHEREAS IT IS RS.8,20,972/- AS PER INCOME & EXPENDI TURE LEAVING A DIFFERENCE OF RS.1,01,211/-. THE CLAIM OF DEPRECIAT ION AS PER AUDITED ACCOUNTS HAS BEEN ACCEPTED BY AO AT RS.9,22,183/-. HENCE, THE ADDITION TO THIS EXTENT IS APPARENTLY INCORRECT. SI MILARLY THE DIFFERENCE IN THE INTEREST EXPENDITURE IS RS.34,012/- WHICH IS IN CORRECT IN AS MUCH AS THE INTEREST IS PAID EITHER TO THE BANK OR TO M/S R .C. JAIN INVEST & FIN PVT. LTD. AND THEREFORE, IT CANNOT BE A CASE OF INF LATION OF EXPENSES. ALL THESE INSTANCES PROVE THAT THE AMOUNT RECORDED UNDE R THE HEAD INCOME & EXPENDITURE IN THE SAID PAPER DO NOT REFLECT THE CORRECT EXPENDITURE. 4. IT WAS SUBMITTED THAT THE ASSESSEE AT PB 27-28 HAS FILED A STATEMENT GIVING THE REASONS AS TO WHY THERE IS A V ARIATION IN THE AMOUNT NOTED ON THE SAID PAPER UNDER THE VARIOUS HE ADS AS PER AUDIT REPORT AND AS PER INCOME & EXPENDITURE ACCOUNT. THE MAIN REASON FOR SUCH DIFFERENCE IS THAT EXPENDITURE INCURRED AT IND ORE SITE IS NOT INCORPORATED IN THE SAID PAPER WHILE MENTIONING THE AMOUNT OF EXPENDITURE AS PER INCOME & EXPENDITURE A/C. THE CO MPLETE DETAILS OF THESE EXPENDITURE ARE AT PB 29-62. ONLY BECAUSE THE EXPENDITURE IS INCURRED IN CASH OR IS SUPPORTED ONLY BY INTERNAL V OUCHER CANNOT BE A BASIS FOR ALLEGING THE DIFFERENCE AS INFLATION OF E XPENSES IGNORING THAT EVEN THE EXPENDITURE WHICH HAS BEEN ACCEPTED BY THE LOWER AUTHORITIES ARE ALSO PAID IN CASH AND SUPPORTED BY INTERNAL VOU CHERS. 5. IT WAS FURTHER SUBMITTED THAT THE LOWER AUTHORIT IES HAVE MADE/ CONFIRMED THE DISALLOWANCES BY RELYING ON THE STATE MENT OF SH. NARESH JAIN WITHOUT CONSIDERING THE FACT THAT THE SAID STA TEMENT STOOD RETRACTED ITA NO. 1368/JP/2019 SMT. NISHA JAIN VS. ACIT/DCIT 5 IMMEDIATELY AFTER SURVEY AND THE REASONS FOR THE DI FFERENCE HAS BEEN EXPLAINED IN COURSE OF ASSESSMENT PROCEEDINGS IN WH ICH THE LOWER AUTHORITIES HAVE NOT POINTED OUT ANY SPECIFIC DISCR EPANCY AFTER MAKING GENERAL OBSERVATIONS. 6. PER CONTRA, THE LD. DR RELIED UPON THE ORDER OF LD. CIT(A) WHICH READS AS UNDER:- 4.3.1 THE CONTENTION THAT THE IMPOUNDED DOCUMENT, PG 97, ANN A-8, MAY HAVE BEEN PREPARED SOMETIME DURING THE YEAR AND NOT AT THE YEAR END IS CONTRARY TO FACTS. THE I MPOUNDED DOCUMENT CONTAINS A COLUMN OF AMOUNT OF EXPENSES TI LTED 'AS PER AUDIT REPORT' AND THESE FIGURES TALLY WITH THE EXPENSES FOR THE WHOLE F.Y 2015-16, APPEARING IN TH E AUDITED BALANCE SHEET FOR THE F.Y 2015-16. THEREFOR E IT IS CLEAR THAT PG 97, ANN A-8 HAS BEEN PREPARED CONSIDE RING POSITION FOR THE ENTIRE YEAR. IT IS ALSO RELEVANT T O NOTE THAT, ON SAMPLE BASIS, IT IS SEEN THAT THE HEADS OF EXPEN SES, UNDER WHICH INFLATED EXPENSES ARE NOTED. SUCH AS 'SECURIT Y SERVICE EXPENSES' OF RS.6,05,280/- AND 'TRAVELLING EXPENSES ' OF RS.8,23,987/-, HAVE BEEN INCURRED ENTIRELY IN CASH, ARE ONLY SUPPORTED BY INTERNAL VOUCHERS, AND NOT VERIFIABLE INDEPENDENTLY. 4.23.2 THE ASSESSEE HAS RELIED ON THE ORDER OF THE HON. SUPREME COURT IN THE CASE OF PULLANGODE RUBBER CO. LTD. VS. STATE OF KERALA [1973] 91 ITR 18. ON PERUSAL OF THE CITED DECISION, IT IS SEEN THAT THE SUPREME COURT HAS HEL D THAT AN ADMISSION IS AN EXTREMELY IMPORTANT PIECE OF EVIDE NCE BUT IT CANNOT BE SAID THAT IT IS CONCLUSIVE AND IT IS OPEN TO THE PERSON WHO MADE THE ADMISSION TO SHOW THAT IT IS IN CORRECT. ANY STATEMENT RECORDED UNDER SECTION 133A WOULD HAV E EVIDENTIARY VALUE ONLY IF SUPPORTED WITH MATERIALS AND FORM THE BASIS FOR ASSESSMENT. THE CITED DECISION IN FAC T SUPPORTS THE A.O'S , AND NOT THE ASSESSEE'S CASE, BECAUSE TH E ITA NO. 1368/JP/2019 SMT. NISHA JAIN VS. ACIT/DCIT 6 ADMISSION OF SH. NARESH JAIN, THAT INFLATED EXPENSE S WERE CLAIMED IN THE AUDITED ACCOUNTS, IS IN FACT SUPPORT ED BY MATERIAL IN THE FORM OF THE IMPOUNDED PAPER, PG 97, ANN. A- 8. 4.3.3 AS REGARDS AFFIDAVIT OF SH. NARESH JAIN DT.14 .02.2017, AN AFFIDAVIT, WITHOUT SUPPORTING EVIDENCE, IS ONLY A SELF SERVING DOCUMENT; A PERSON MAKING A STATEROATH MUST SHOW WITH EVIDENCE THAT HIS STATEMENT WAS WRONG. TH IS PROPOSITION IS SUPPORTED BY THE FOLLOWING CASE LAW AUTHORITY- 4.3.4 THE HON. BOMBAY HIGH COURT, IN THE CASE DR. DINESH JAIN, 45 TAXMANN.COM 442 (BOMBAY), ORDER DT. 24.03.2014, AFTER REFERRING TO THE DECISION OF THE HON. SC IN CASE OF KHADER KHAN SONS, HAS HELD THAT WHERE LOOSE PAPER FDUND IN SURVEY SHOWED RECEIPTS IN HANDS OF ASSESSE E, AND ASSESSEE ADMITTED SAME AS HIS UNDISCLOSED INCOME BU T IN ASSESSMENT REVERTED BACK FROM SAID ADMISSION, SINCE HE COULD NOT FURNISH EVIDENCE TO JUSTIFY HIS STAND, SA ID RECEIPTS BE TREATED AS UNDISCLOSED INCOME OF ASSESSEE. THUS IN THE CASE BEFORE HON. MUMBAI HC, EVEN THOUGH THE ASSESSE E HAD FILED A RETRACTION OF ADMISSION MADE DURING SURVEY, ADDITION ON THE BASIS OF THE ADMISSION MADE IN SURVEY WAS UP HELD BECAUSE THE ASSESSEE COULD NOT JUSTIFY THE RETRACTI ON WITH EVIDENCE. 4.3.5 ALSO, THE HON. DELHI HIGH COURT, IN THE CASE OF RAJ HANS TOWERS (P.) LTD. VS CIF, TAXMANN.COM 67 (DELHI), ORDER DT. 27.01.2015, AFTER REFERRING TO CIT V. DHI NGRA METAL WORKS 328 ITR 384, HELD THAT WHERE ASSESSEE HAD NOT OFFERED ANY SATISFACTORY EXPLANATION REGARDING SURR ENDERED AMOUNT BEING NOT BONA FIDE AND IT WAS ALSO NOT BORN E OUT IN ANY CONTENTIONS RAISED BEFORE LOWER AUTHORITIES, AD DITIONS SO MADE AFTER ADJUSTING EXPENDITURE WERE JUSTIFIED. 4.3.6 ONLY WITH REGARD TO 'BANK INTEREST', I FIND T HAT THE ADMISSION MADE DURING THE COURSE OF SURVEY, BY SH. NARESH JAIN (ASSESSEE'S HUSBAND AND MANAGER OF HER PROPRIE TORSHIP CONCERN, QUICK ADVERTISING CO.) AND AGREED BY THE A SSESSEE, ITA NO. 1368/JP/2019 SMT. NISHA JAIN VS. ACIT/DCIT 7 NAMELY THAT INFLATED CLAIM OF RS.79,56,743/- WAS MA DE IN THE AUDITED ACCOUNTS, WHEREAS ACTUAL EXPENSE UNDER THIS HEAD WAS RS.76,34,216/-, I.E EXCESS CLAIM OF RS.3,2 2,527/-, IS CONTROVERTED WITH EVIDENCE. THEREFORE, OUT OF AD DITION OF RS. 27,91,592/-, MADE BY THE A.0 ON ACCOUNT OF INFL ATED CLAIM OF EXPENSES, ADDITION OF RS. 3,22,527/- IS HE REBY DELETED AND ADDITION OF RS. 24,69,065/- IS SUSTAINE D. THE GROUND OF APPEAL IS THUS PARTLY ALLOWED. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT HAS BEEN CONTENDED THAT T HE ASSESSEE HAS FILED A STATEMENT BEFORE THE LOWER AUTHORITIES GIVING THE REASONS AS TO WHY THERE IS A VARIATION IN THE AMOUNT NOTED ON THE SAI D PAPER MARKED AS ANNEXURE A-8 UNDER THE VARIOUS HEADS AS PER AUDIT R EPORT AND AS PER INCOME & EXPENDITURE ACCOUNT AND THE MAIN REASON FO R SUCH DIFFERENCE IS THAT EXPENDITURE INCURRED AT INDORE SITE IS NOT INCORPORATED IN THE SAID PAPER WHILE MENTIONING THE AMOUNT OF EXPENDITURE AS PER INCOME & EXPENDITURE ACCOUNT. WE BELIEVE THAT THIS CONTENT ION GOES TO THE ROOT OF THE MATTER AND WE HEREBY DIRECT THE ASSESSING OF FICER TO VERIFY THE SAME AND THEREAFTER, DECIDE THE MATTER A FRESH AS P ER LAW. IN VIEW OF THE SAME, REST ALL CONTENTIONS ARE KEPT OPEN. IN T HE RESULT, THE GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 8. IN GROUND NO. 2, THE ASSESSEE HAS CHALLENGED THE ACTION OF THE LD CIT(A) IN CONFIRMING OF THE ADDITION OF RS.8,27,656 /-, BEING DIFFERENCE BETWEEN THE ORIGINAL RETURN OF INCOME AND REVISED R ETURN OF INCOME BY NOT ACCEPTING THE CONTENTION OF ASSESSEE THAT THE O RIGINAL RETURN INCLUDES THE ADVERTISEMENT RECEIPT OF RS.49,23,773/ - BILLED IN THE NAME OF BHAGAT SINGH PUBLIC SR. SEC. SCHOOL BUT SINCE TH E ORDER WAS NOT ITA NO. 1368/JP/2019 SMT. NISHA JAIN VS. ACIT/DCIT 8 IMPLEMENTED, THE SAME WAS REDUCED FROM RECEIPT WITH CORRESPONDING REDUCTION OF THE COST OF RS.40,96,117/- IN THE REVI SED RETURN RESULTING INTO REDUCTION IN INCOME BY RS.8,27,656/- (49,23,77 3-40,96,117) ON THE GROUND THAT REVERSAL OF SALES BY THE ASSESSEE REMAI NS UNSUBSTANTIATED. 9. IN THIS REGARD, THE LD. AR SUBMITTED THAT THE AO OBSERVED THAT ASSESSEE HAS FILED THE RETURN DECLARING TOTAL INCOM E OF RS.81,73,080/- BUT THE SAME WAS REVISED ON 16.10.2017 AT RS.73,45, 420/-. THE EXPLANATION GIVEN FOR THE REVISION IS NOT CONVINCIN G BECAUSE THE RETURN WAS FILED AFTER FINALIZING THE AUDIT REPORT. IF THE ORDER WAS CANCELLED, IT SHOULD HAVE BEEN CONSIDERED AT THE TIME OF AUDIT RE PORT OR IT COULD HAVE BEEN CLAIMED IN THE NEXT YEAR. DETAILS OF CANCELLED ORDER ARE NOT SUBMITTED. HE THEREFORE, MADE THE ADDITION OF RS.8, 27,660/-. 10. IT WAS SUBMITTED THAT THE LD. CIT(A) CONFIRMED THE ADDITION STATING THAT ASSESSEE HAS NOT FURNISHED ANY CATEGOR ICAL STATEMENT FROM BHAGAT SINGH PUBLIC SENIOR SECONDARY SCHOOL THAT TH EY HAVE NOT CLAIMED EXPENDITURE OF RS.49,23,773/- IN FY 2016-17 . THEREFORE, THE REVERSAL OF SALE OF RS.49,23,773/- AND CORRESPONDIN G REVERSAL COST OF RS.40,96,117/- REMAINS UNSUBSTANTIATED. ACCORDINGLY , THE ADDITION WAS CONFIRMED. 11. IT WAS FURTHER SUBMITTED THAT ASSESSEE HAS REC EIVED AN ORDER FOR ADVERTISEMENT FROM BHAGAT SINGH PUBLIC SENIOR SECON DARY SCHOOL AND ACCORDINGLY IT RAISED THE BILL INCLUDING SERVICE TA X OF RS.49,23,773/-. THE ASSESSEE THEREFORE ALSO PROVIDED FOR THE CORRESPOND ING COST OF MATERIAL AT RS.40,96,117/-. HOWEVER, THE ORDER WAS NOT IMPLE MENTED AND ITA NO. 1368/JP/2019 SMT. NISHA JAIN VS. ACIT/DCIT 9 THEREFORE, THE REVISED RETURN WAS FILED WHERE BOTH THE SALES AND COST OF GOODS WERE REVERSED RESULTING INTO REDUCTION OF NET PROFIT BY RS.8,27,656/- [RS.76,63,463/- - RS.68,35,807/-]. TH E FACT THAT BHAGAT SINGH PUBLIC SENIOR SECONDARY SCHOOL HAS NOT CLAIME D SUCH EXPENDITURE IS EVIDENT FROM THE COPY OF ADVERTISING EXPENSES PL ACED AT PB 8. FURTHER IN THE LEDGER ACCOUNT OF THE ASSESSEE IN THE BOOKS OF BHAGAT SINGH PUBLIC SENIOR SECONDARY SCHOOL SUCH AMOUNT IS NOT C REDITED. THUS, WHEN ASSESSEE HAS NOT EXECUTED THE ORDER OF BHAGAT SINGH PUBLIC SENIOR SECONDARY SCHOOL, ONLY BECAUSE IN THE AUDITE D ACCOUNTS THE ASSESSEE HAS PASSED ENTRY TO THIS EFFECT CANNOT BE A REASON TO MAKE THE ADDITION PARTICULARLY WHEN IT IS A SETTLED LAW THAT MAKING OF ACCOUNTING ENTRIES IN THE BOOKS OF ACCOUNTS IS NOT RELEVANT FO R DETERMINATION OF INCOME UNDER THE INCOME TAX ACT AS HELD BY SUPREME COURT IN CASE OFKEDARNATH JUTE MANUFACTURING CO. LTD. 82 ITR 363 AND SATLUJ COTTON MILLS VS CIT 116 ITR 1. 12. PER CONTRA, THE LD. DR RELIED UPON THE ORDER OF LD. CIT(A) WHICH READS AS UNDER:- 7.3.1 THE CONTENTION IN APPEAL IS THAT THE ASSESSE E HAD BILLED BHAGAT PUBLIC SCHOOL RS.48,18,961/- FOR ADVERTISEMENT CHARGES AND CONSIDERED THESE BILLS IN TURNOVER. SUBSEQUENTLY, THE ORDER WAS NOT IMPLEMENT ED SO THE EFFECT OF REDUCTION OF SUCH SALES, RELEVANT COS T AND RESULTANT NET PROFIT HAD BEEN CONSIDERED IN THE REV ISED RETURN AS UNDER:- GROSS TURNOVER REDUCTION IN REVISED NEWS PAPER ADVERTISEMENT 48,18,961/- SERVICE TAX 1,04,812/- TOTAL 49,23,773/- COST OF MATERIAL 40,96,117/- ITA NO. 1368/JP/2019 SMT. NISHA JAIN VS. ACIT/DCIT 10 RESULTANT DIFFERENCE IN RECEIPTS AND COST OF MATERIAL 8,27.656/- 7.3.2 DESPITE SPECIFIC QUERY IN APPEAL, THE ASSESSE E HASNOT BEEN ABLE TO FURNISH A CATEGORICAL STATEMENT FROM BHAGAT SINGH PUB. SR. SEC. SCHOOL THAT THEY HAVE NOT CLAIMED EXPENDIT URE OF RS. 49,23,773/- IN FY 2015-16. CONSIDERING THAT BHAGAT SINGH PUB. SR. SEC. SCHOOL IS A FAMILY CONCERN OF THE ASSESSEE, IN THE ABSENCE OF SUCH A STATEMENT FROM THE SCHOOLD, DESPITE SPECIFIC QUERY IN APPEAL, THE REVERSAL OF SALES OF RS.40,96,117/- BY THE ASSESSEE REMAINS UNSUBSTANTIATED. FURTHER, NO BASIS IS GIVEN FOR THE REVERSAL OF COST OF RS. 36,90,12,603/- AGAINST SUCH SALES. A S SUCH THE FIGURE OF REVERSAL OF PROFITS OF RS.8,27,656/- REMAINS UNSUBSTANTIATED. ACCORDINGLY, IT IS HELD THAT THE A .0 HAS RIGHTLY REJECTED THE CLAIM OF REDUCTION OF PROFITS OF RS.8,27,656/-. GROUND 5 OF APPEAL IS THUS DISMISSED . 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT HAS BEEN CONTENDED BY THE L D AR THAT THE REASON FOR REVISION OF THE RETURN OF INCOME WAS THAT THE O RDER OF BHAGAT SINGH PUBLIC SCHOOL WAS NOT EXECUTED AND AS A RESULT, BOT H REVENUES AND CORRESPONDING COSTS WERE REVERSED AND REVISED RETUR N OF INCOME WAS FILED RESULTING IN REDUCTION OF NET PROFITS BY RS 8 27,656/-. PER CONTRA, THE POSITION OF THE REVENUE IS THAT THE ASSESSEE HA S NOT FURNISHED ANY CATEGORICAL STATEMENT FROM BHAGAT SINGH PUBLIC SENI OR SECONDARY SCHOOL THAT THEY HAVE NOT CLAIMED EXPENDITURE OF RS .49,23,773/- IN FY 2016-17. AGAINST THE SAID CONTENTION OF THE REVENUE , THE ASSESSEE HAS SUBMITTED LEDGER ACCOUNT OF ADVERTISING EXPENSES AS WELL AS ASSESSEES ACCOUNTS IN THE BOOKS OF BHAGAT SINGH PUBLIC SENIOR SECONDARY SCHOOL WHERE NO SUCH AMOUNT HAS BEEN CLAIMED OR CREDITED. WE FIND THAT ITA NO. 1368/JP/2019 SMT. NISHA JAIN VS. ACIT/DCIT 11 SINCE THESE LEDGER ACCOUNTS HAVE BEEN FILED FOR THE FIRST TIME BEFORE US, THE SAME NEEDS TO BE VERIFIED BY THE AO AND THE MAT TER IS THUS SET- ASIDE TO THE FILE OF THE AO TO VERIFY THE SAME AND DECIDE AS PER LAW. IN THE RESULT, THE GROUND OF APPEAL IS ALLOWED FOR STA TISTICAL PURPOSES. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 03/02/2021. 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:- 03/02/2021. *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. NISHA JAIN, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- ACIT/DCIT, CENTRAL CIRCLE, KOTA. 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 NO. 1368/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR