VIJAY KUMAR SAXENA, Kota V. ACIT, Kota

ITA 137/JPR/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5574 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 04-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Rejection of books of accounts; Business income; Depreciation
• Section: 143(3); 144; 2

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K ;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA-@ ITA NOS. 137 & 138/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2007-08 & 09-10 . VIJAY KUMAR SAXENA, C/O CA. B.L. BHOJWANI, B-4, VALLABH NAGAR, KOTA. CUKE VS. THE ACIT, CIRCLE-2, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AFRPS 6766 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY S BY : SHRI B.L. BHOJWANI (C.A) JKTLO DH VKSJ LS@ REVENUE BY : SMT. NEENA JEPH (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16.12.2015. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 01/01/2016. VKNS'K@ ORDER PER SHRI LALIET KUMAR, J.M. THESE TWO APPEALS FILED BY THE ASSESSEE ARE ARISIN G FROM THE ORDER DATED 30.11.2012 PASSED BY THE LEARNED CIT (A), KOTA FOR THE A.Y. 2007-08 & 2009-10. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- ITA NO. 137/JP/2013 (A.Y. 2007-08) : 1. THAT THE LEANED CIT (APPEALS) HAS ERRED IN CONFI RMING THE REJECTION OF BOOKS OF ACCOUNT BY THE LEARNED ASSESSING OFFICER A ND THEREBY APPLYING THE PROVISIONS OF SECTION 145(3). 2 ITA NO. 137 & 138/JP/2013 SHRI VIJAY KUMAR SAXENA VS. ACIT, KOTA. 2. THAT THE LEARNED CIT (APPEALS) HAS ERRED IN CONF IRMING THE ADDITION OF RS. 12,04,352/- MADE BY THE LEARNED ASSESSING OFFICER, BY APPLYING A NET PROFIT RATE OF 9% SUBJECT TO DEPRECIATION. 3. THAT THE LEARNED CIT (APPEALS) HAS ERRED IN CONF IRMING THE SEPARATE ADDITION OF RS. 3,53,932/- MADE BY THE LEARNED ASSE SSING OFFICER ON ACCOUNT OF INTEREST INCOME. 4. THAT THE LEARNED CIT (APPEALS) HAS ERRED IN CONF IRMING THE ADDITION OF RS. 15,228/- MADE BY THE LEARNED ASSESSING OFFICER ON A CCOUNT OF TAXI PLYING, ON AN ESTIMATE BASIS. ITA NO. 138/JP/2013 (A.Y. 2009-10) : 1. THAT THE LEANED CIT (APPEALS) HAS ERRED IN CONFI RMING THE REJECTION OF BOOKS OF ACCOUNT BY THE LEARNED ASSESSING OFFICER A ND THEREBY APPLYING THE PROVISIONS OF SECTION 145(3). 2. THAT THE LEARNED CIT (APPEALS) HAS ERRED IN CONF IRMING THE ADDITION OF RS. 16,47,466/- MADE BY THE LEARNED ASSESSING OFFICER, BY APPLYING A NET PROFIT RATE OF 9% SUBJECT TO DEPRECIATION. 3. THAT THE LEARNED CIT (APPEALS) HAS ERRED IN CONF IRMING THE SEPARATE ADDITION OF RS. 12,24,814/- MADE BY THE LEARNED ASS ESSING OFFICER ON ACCOUNT OF INTEREST INCOME. 4. THAT THE LEARNED CIT (APPEALS) HAS ERRED IN CONF IRMING THE SEPARATE ADDITION OF RS. 26,232/- MADE BY THE LEARNED ASSESS ING OFFICER ON ACCOUNT OF NON BUSINESS USE OF CARS. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CIVIL CONTRACTOR, DERIVES INCOME FROM CONSTRUCTION WORK AWARDED BY PWD AND OTHER GOV ERNMENT DEPARTMENTS, AND ALSO INCOME FROM INTEREST. THE ASSESSEE FILED HIS RETURN S OF INCOME FOR THE ASSESSMENT YEARS 2007-08 AND 2009-10 ON 31.10.2007 AND 30.09.2009 RE SPECTIVELY. THE CASE WAS SCRUTINIZED UNDER SECTION 143(3) OF THE I.T. ACT. 3 ITA NO. 137 & 138/JP/2013 SHRI VIJAY KUMAR SAXENA VS. ACIT, KOTA. 2.1. IN RESPECT OF GROUND NO. 1 & 2, THE RELEVANT P ARA OF THE ASSESSMENT ORDER IS AS UNDER :- 9. THE MATTER WAS DISCUSSED WITH THE ASSESSEE AND THE LD. A/R FOR THE ASSESSEE, WHO AGREED FOR THE REJECTION OF BOOKS OF ACCOUNTS AND APPLICATION OF 9% N.P RATE ON CONTRACTUAL RECEIPTS (SUBJECT TO DEPRECIATION AND INTEREST) AND NON-IMPOSITION OF PENALTY. IN THI S REGARD, FOLLOWING WAS MADE CLEAR TO THE ASSESSEE AND HIS A/R : ON 9% N.P. RATE, DEPRECIATION WOULD BE ALLOWED BUT ANY INTEREST WOULD NOT BE ALLOWED. PENALTY PROCEEDINGS ARE THE SEPARATE PROCEEDINGS AN D PROPER & JUDICIOUS DECISION IN THIS REGARD SHALL BE TAKEN SE PARATELY AT THE APPROPRIATE TIME. FINALLY, THE ASSESSEE & HIS A/R AGREED THAT ASSESSM ENT MAY BE COMPLETED @ 9% N.P. ON GROSS RECEIPTS (SUBJECT TO D EPRECIATION) AFTER THE REJECTION OF BOOK VERSION (IN FORM OF SO CALLED AUD ITED P/L A/C & BALANCE SHEET). (COPY OF LAST PAGE OF ORDER SHEET IS ENCLOSED HER EWITH AS ANNEXURE-D) IF WE APPLY N.P. RATE OF 9% ON GROSS CONTRACT RECEI PTS OF RS. 6,53,09,889/-, THE INCOME FROM CONTRACT WORK COMES TO RS. 58,77,890/- WHICH AFTER ALLOWANCE OF DEPRECIATION (RS. 3,08,195 ), IS REDUCED TO RS. 55,69,695/-. THUS, AN ADDITION OF RS. 12,04,532/- ( 55,69,695-43,65,163) IS MADE ON THIS ACCOUNT. 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE LD. CIT (A), WHO VIDE HIS ORDER CONFIRMED THE ADDITION BY OBSERVING AS UNDER :- I HAVE GONE THROUGH THE AOS FINDINGS AND ASSES SEES SUBMISSION. 4 ITA NO. 137 & 138/JP/2013 SHRI VIJAY KUMAR SAXENA VS. ACIT, KOTA. EVEN BEFORE ME NEITHER BOOKS OF ACCOUNT NOR SUPPORTI NG DOCUMENTS WERE PRODUCED DESPITE GIVING AMPLE OPPORTUNITIES. IN VIEW OF ABOVE, THE REJECTION OF BOOKS OF ACCOUNT S U/S 145(3) IS CONFIRMED. ESTIMATION OF INCOME THE ASSESSEE HAS SHOWN NIL CLOSING STOCK. THE ASS ESSEE HAS A TURNOVER OF RS. 6,53,09,889/- AND ALL THE CONTRACTS WERE NOT COMPLETED DURING THE YEAR. EVEN IF WE ESTIMATE CLOSING STOCK ON CONSERVAT IVE BASIS I.E. @ 2% OF TURNOVER, IT COMES TO RS. 13,06,000/-, WHICH IS MOR E THAN THE ADDITION MADE BY ASSESSING OFFICER. CONSIDERING THE ABOVE ADDITION OF RS. 12,04,532/- IS CONFIRMED. THESE GROUNDS OF APPEAL ARE, THEREFORE, DISMISSED . 4. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 4.1. THE LD. A/R FOR THE ASSESSEE HAS SUBMITTED THA T THE AUTHORITIES BELOW HAVE DECIDED THE ISSUE OF N.P. RATE OF 9% DESPITE THE FA CT THAT THERE IS INCREASE IN THE PROFIT AND THE TURNOVER OF THE ASSESSEE. IT WAS ALSO CONTE NDED THAT THE BOOKS OF ACCOUNT HAVE BEEN WRONGLY REJECTED BY THE AUTHORITIES BELOW, AND HE HAS SUBMITTED THAT THE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNT AS WERE AVAI LABLE WITH HIM AS THE ASSESSEE HAS SUFFERED FROM INJURIES. TWO AFFIDAVITS WERE ALSO F ILED TO SUPPORT THE CASE OF THE ASSESSEE. 4.2. THE LD. D/R FOR THE REVENUE HAS CONFRONTED THE ARGUMENT OF THE LD. A/R AND HAS SUBMITTED THAT DESPITE VARIOUS OPPORTUNITIES, THE B OOKS OF ACCOUNTS HAVE NOT BEEN PRODUCED. HE HAS DRAWN OUR ATTENTION TO THE FOLLOWI NG PARA AT PAGE 9 IN THE ORDER OF LD. CIT (A) :- 5 ITA NO. 137 & 138/JP/2013 SHRI VIJAY KUMAR SAXENA VS. ACIT, KOTA. THE COMPLIANCE OF NOTICE U/S142(1) HAS BEEN REALL Y POOR. WHAT IS MORE, THE ASSESSEE HAS NOT BEEN ABLE TO PRODUCE ANY BILLS /VOUCHERS WHICH MEANS THAT HIS CLAIM REGARDING EXPENSES CAN NOT BE VERIFIED. CASH BOOK HAS NOT BEEN PRODUCED AND STOCK REGISTER HAS ALSO N OT BEEN PRODUCED. THUS, THE STOCK, CASH, EXP. ETC. CANNOT BE VERIFIED . THE CLAIM OF CREDITORS CAN ALSO, AT BET, BE PARTLY CORRECT. THOUGH, ONE TH ING HAS BEEN PRAISEWORTHY ON ASSESSEES PART THAT HE DID NOT TRY TO FURNISH FAKE BOOKS IN SPITE OF GETTING SUFFICIENT TIME. THIS SHOWN GOO D INTENTION OF ASSESSEE. THUS, ON THE BASIS OF ACTS ON RECORD, THERE RE VALI D REASONS TO BE DISSATISFIED REGARDING THE CORRECTNESS AND COMPLETE NESS OF ASSESSEES SO- CALLED AUDITED BOOKS VERSION OF THE ASSESSEE IS TO BE REJECTED U/S 145(3) AND THIS CASE IS TO BE TREATED AS NO ACCOUNT CASE . SINCE THERE ARE VALID REASONS TO BE DISSATISFIED RE GARDING COMPLETENESS AND CORRECTNESS OF ACCOUNTS, THE BOOKS OF ACCOUNTS OF THE ASSESSEE (BOOKS VERSION IN FORM OF AUDITED ACCOUNT) ARE HEREBY REJECTED U/S 145(3) AND THE ASSESSMENT IS BEING COMPLETED IN THE MANNER PROVIDED U/S 144 OF I.T. ACT, 1961. THE MATTER WAS DISCUSSED WITH THE ASSESSEE AND HIS A/R WHO AGREED FOR THE REJECTION OF BOOKS OF ACCOUNTS AND A PPLICATION OF 9% N.P. RATE ON CONTRACTUAL RECEIPTS (SUBJECT TO DEPRECIATI ON & INTT.) AND NON- IMPOSITION OF PENALTY. 4.3. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. IN OUR VIEW, AMPLE OPPORTUNITIES HAVE BEEN GIVEN TO TH E ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNTS, THE ASSESSEE BEING CONTRACTOR, IS STATUTO RILY BOUND TO MAINTAIN BILLS, VOUCHERS, CASH BOOK, STOCK REGISTER ETC. AND IN THE ABSENCE O F MAINTENANCE OF THE SAID RECORDS, THE AO IS LEFT WITH NO OPTION BUT TO INVOKE SECTION 145(3) OF THE IT ACT AND ESTIMATE THE 6 ITA NO. 137 & 138/JP/2013 SHRI VIJAY KUMAR SAXENA VS. ACIT, KOTA. INCOME OF THE ASSESSEE. EVEN OTHERWISE THE ASSESSE E HAD ADMITTED BEFORE THE AUTHORITIES BELOW FOR REJECTION OF BOOKS OF ACCOUNT AND APPLICATION OF 9% NP RATE ON CONTRACTUAL RECEIPTS SUBJECT TO DEPRECIATION AND IN TEREST. IN OUR VIEW, ONCE THE COMPLETE BOOKS OF ACCOUNT HAVE NOT BEEN PRODUCED, T HE AO WAS RIGHT IN REJECTING THE BOOKS OF ACCOUNT AND HAS RIGHTY DONE SO. EVEN OTHE RWISE, THE ASSESSEE HAS NO LEGS TO STAND THAT THE BOOKS OF ACCOUNT AND THE NP RTE OF 9 % HAS BEEN WRONGLY DECIDED BY THE AO. THE ADMISSION OF THE ASSESSEE IS THE BEST EVID ENCE AGAINST THE ASSESSEE. ONCE THE ASSESSEE HIMSELF HAS ADMITTED THE IMPOSITION OF 9% NP RATE SUBJECT TO DEPRECIATION AND INTEREST, THE AO WAS LEFT WITH NO OTHER OPTION BUT EITHER TO ACCEPT THE OFFER OR TO DETERMINE THE N.P. ON THE BASIS OF COMPARABLE MATER IAL ON RECORD OR ON THE BASIS OF PAST HISTORY. THE AO HAS EXERCISED THE FIRST OPTIO N, IN OUR VIEW WAS RIGHTLY DONE SO. THEREFORE, THE GROUND NOS. 1 & 2 ARE DECIDED AGAINS T THE ASSESSEE AND IN FAVOUR OF THE REVENUE. IN OUR VIEW, THE JUDGMENTS REFERRED BY TH E ASSESSEE I.E. ADDL. CIT VS. JAY ENGINEERING WORKS LTD. (1978) 113 ITR 389 (DEL), DCI T VS. SETALVAD BROTHERS (2004) 90 TTJ (AHD.) 193, CIT VS. AMERICAN CONSULTING CORPORA TION (1980) 123 ITR 513 (ORI.), SETH NATHURAM MUNALAL VS. CIT (1954) 25 ITR 216 (NA G.), CIT VS. GUPTA, K.N. CONSTRUCTION CO. (2015) 371 ITR 325 (RAJ.), CIT VS. M/S. VAIBHAV GEMS LTD. (2014 52 TAX WORLD 159 (RAJ.), CIT VS. SUBODH GUPTA (DEL) IT A 80/2014, HARBAN LAL SETHI VS. ACIT (2003) 30 TW 82 ETC. ARE NOT APPLICABLE IN THE PRESENT CASE ON THE FACTS AND CIRCUMSTANCES. IN THE PRESENT CASE, THE ADMISSION OF THE ASSESSEE WHICH HAS PROMPTED THE AO TO DETERMINE THE NP RATE AND THE AO HAS ACCE PTED THE NP RATE. IN NONE OF THE JUDGMENTS REFERRED BY LD. A/R FOR THE ASSESSEE, THE COURT HAVE CONCERNED WITH THE 7 ITA NO. 137 & 138/JP/2013 SHRI VIJAY KUMAR SAXENA VS. ACIT, KOTA. ADMISSION OF THE ASSESSEE, IN OUR VIEW THE JUDGMENT REFERRED BY THE ASSESSEE ARE NOT APPLICABLE. 5. GROUND NO. 3 IN BOTH THE ASSESSMENT YEARS RELATE S TO SEPARATE ADDITION OF RS. 3,53,932/- AND RS. 12,24,814/- ON ACCOUNT OF INTERE ST INCOME FROM FDRS. 5.1. THE AO MADE THE ADDITION TAKING INTO CONSIDERA TION THAT THE ASSESSEE IS NOT IN THE BUSINESS OF MONEY LENDING. THE AO WAS OF THE V IEW THAT ASSESSEE IS A CIVIL CONTRACTOR AND, BY ANY STANDARDS, INTEREST ON BANK FDR IS TO BE ASSESSED AS INCOME FROM OTHER SOURCES ONLY. 5.2. THE LD. CIT (A) CONFIRMED THE ADDITION ON THE GROUND THAT INTEREST INCOME CAN BE TREATED AS BUSINESS INCOME ONLY IF ASSESSEE WAS ENG AGED IN THE BUSINESS OF MONEY LENDING, OR WHEN INTEREST IS CHARGED ON BUSINESS TR ANSACTION I.E. INTEREST ON DELAYED PAYMENT BY BUYERS. 6. NOW THE ASSESSEE IS BEFORE US. 6.1. THE LD. A/R FOR THE ASSESSEE SUBMITTED THAT TH E FDRS WERE REQUIRED FOR THE PURPOSE OF GIVING SECURITY TO AWARDERS, AGAINST MAR GIN MONEY FOR BANK GUARANTEES TO BE FURNISHED TO AWARDERS, EARNEST MONEY ETC. IT IS NOT THAT THE ASSESSEE HAS UTILIZED SURPLUS MONEY WHICH WAS DEPOSITED TO EARN INTEREST BUT ON THE CONTRARY, THE ACTIVITY OF DEPOSITING MONEY WAS INCIDENTAL TO THE BUSINESS OF THE ASSESSEE AND THERE WAS INEXTRICABLE NEXUS WITH SECURING CONTRACTS. THEREF ORE, HE REQUESTED THAT THE INCOME EARNED BY WAY OF INTEREST ON FDRS MAY BE TREATED AS BUSINESS INCOME. TO SUPPORT HIS CONTENTION, THE LD. A/R PLACED RELIANCE ON THE JUDG MENTS IN THE CASE OF CIT VS. JAYPEE DSC VENTURES LTD. (2011) 335 ITR 1432 (DELHI HC), S HYAM BIHARI VS. CIT (2012) 345 8 ITA NO. 137 & 138/JP/2013 SHRI VIJAY KUMAR SAXENA VS. ACIT, KOTA. ITR 283 (PAT.HC) AND CIT VS. CHINNA NACHIMUTHU CONS TRUCTIONS (2008) 297 ITR 70 (KARN.HC). 6.2. ON THE OTHER HAND, LD. D/R FOR THE REVENUE SUP PORTED THE ORDERS OF AUTHORITIES BELOW AND REQUESTED THAT ADDITIONS BE CONFIRMED. 6.3. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL ON RECORD. WE ARE IN AGREEMENT WITH THE LD. A/R FOR THE ASSESSEE THAT TH E FDRS WERE REQUIRED TO FURNISH PERFORMANCE GUARANTEE TO GET A CONTRACT AWARDED IN ASSESSEES FAVOUR AND TO PROCURE SAID GUARANTEE, IT HAD KEPT AMOUNT IN FIXED DEPOSIT . THEREFORE, THE INCOME EARNED ON THIS ACCOUNT CANNOT BE TREATED AS INCOME FROM OTHER SOURCES. THE CONTENTION OF THE ASSESSEE ARE SUPPORTED BY VARIOUS JUDGMENTS RELIED ON BY LD. A/R. WE FIND THAT THE DECISIONS CITED BY LD. CIT (A) ARE NOT APPLICABLE T O THE FACTS OF THE ASSESSEES CASE. WE, THEREFORE, TAKING INTO CONSIDERATION VARIOUS JUDGME NTS MENTIONED ABOVE, DELETED THE ADDITIONS MADE BY THE AO. 7. GROUND NO. 4 IN A.Y. 2007-08 RELATES TO ADDITION OF RS. 15,228/- ON ACCOUNT OF TAXI PLYING, ON ESTIMATE BASIS. 7.1. THE AO MADE THE ADDITION BY OBSERVING THAT LASTLY, THE ASSESSEE HAS ALSO DECLARED THE GROSS RECEIPTS OF RS. 95,174/- FROM CA R HIRING. IN VIEW OF NO DOCUMENTS REGARDING THIS BUSINESS, THE INCOME FROM TAXI PLYIN G IS TREATED @ 25% ON FAIR ESTIMATE BASIS. OUT OF THIS, 9% HAS ALREADY BEEN ASSESSED AS A PART OF GROSS CONTRACTUAL RECEIPTS. THEREFORE, REST 16% IS BEING ADDED TO ASSESSEES IN COME UNDER THIS HEAD. ACCORDINGLY, FURTHER ADDITION OF RS 15,228/- (16% TO RS. 95,174/ -) IS HEREBY MADE TO ASSESSEES INCOME. 9 ITA NO. 137 & 138/JP/2013 SHRI VIJAY KUMAR SAXENA VS. ACIT, KOTA. 7.2. THE LD. CIT (A) HAS CONFIRMED THE ADDITION BY OBSERVING THAT AS ASSESSEE HAS PRODUCED NO SUPPORTING DOCUMENT, THE ACTION OF ASSE SSING OFFICER WAS CONSIDERED FAIR AND REASONABLE. 8. NOW THE ASSESSEE IS BEFORE US. 8.1. THE LD. A/R FOR THE ASSESSEE HAS ARGUED THAT A O HAS ARBITRARILY ESTIMATED THE INCOME FROM CAR HIRING @ 25%, WITHOUT GIVING ANY RE ASON IN SUPPORT OF THE ESTIMATE. HE SUBMITTED THAT WHEN THE BOOKS OF ACCOUNT ARE REJ ECTED, REVENUE CANNOT RELY ON THE SAME SET OF BOOKS AND DISALLOW SPECIFIC ITEMS OF EX PENDITURE. THE ESTIMATE OF INCOME FROM CAR HIRING MADE BY THE AO IS BASED ON SURMISES AND CONJECTURES AND IS NOT JUSTIFIED ON ANY LEGALLY SUSTAINABLE FOUNDATION. TH EREFORE, HE PRAYED THAT THE ADDITION MAY KINDLY BE DELETED. 8.2. THE LD. D/R SUPPORTED THE ORDERS OF THE AUTHOR ITIES BELOW. HE REQUESTED THAT THE ADDITION BE CONFIRMED. 8.3. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL ON RECORD. WE FIND THAT THE AO HAS NOT GIVEN ANY BASIS FOR MAKING THIS ADDITION. THEREFORE, WE DO NOT FIND ANY JUSTIFICATION IN THE ORDER OF THE AO FOR MAKING THIS ADDITION. THE ADDITION IS THUS DELETED. 9. GROUND NO. 4 IN ASSESSMENT YEAR 2009-10 IS IN RE SPECT OF DISALLOWANCE OF RS. 26,232/- ON ACCOUNT OF NON BUSINESS USE OF CARS. 10 ITA NO. 137 & 138/JP/2013 SHRI VIJAY KUMAR SAXENA VS. ACIT, KOTA. 9.1. THE AO MADE THE DISALLOWANCE ON THE GROUND THA T THE ASSESSEE WAS ASKED TO FILE DOCUMENTARY EVIDENCE IN SUPPORT OF HIS CLAIM, BUT, IN SPITE, COULD NOT FURNISH ANY EVIDENCE TO RULE OUT NON-BUSINESS USE OF THESE CAR S BY THE ASSESSEE OR HIS FAMILY MEMBERS. THEREFORE, ON ESTIMATE BASIS, HE AO DISAL LOWED RS. 26,232/- I.E. 1/5 TH OF THE EXPENSES OF RS. 1,31,159/- CLAIMED BY THE ASSESSEE. 9.2. THE LD. CIT (A) CONFIRMED THE DISALLOWANCE BY OBSERVING AS UNDER :- PERSONAL USE OF VEHICLES/CAR CANNOT BE RULED OUT. HOWEVER, THE SAME HAS TO BE REASONABLE. CONSIDERING THE FACTS OF THE CASE, IN MY OPINION A DISALLOWANCE OF 20% OF THE VEHICLE EXPENS ES IS CONSIDERED REASONABLE. THEREFORE, THE DISALLOWANCE OF RS. 26,232/- (20%) IS UPHELD. 10. NOW THE ASSESSEE IS BEFORE US. 10.1. THE LD. A/R FOR THE ASSESSEE ARGUED THAT WHEN THE BOOKS OF ACCOUNTS ARE REJECTED, REVENUE CANNOT RELY ON THE SAME SET OF BO OKS AND DISALLOW SPECIFIC ITEMS OF EXPENDITURE. THEREFORE, HE REQUESTED THAT THE DISAL LOWANCE MAY KINDLY BE DELETED. IN SUPPORT OF HIS CONTENTION, LD. A/R PLACED RELIANCE ON THE DECISION IN THE CASE OF JASWANT SINGH & CO. VS. ACIT (2003) 1 SOT 545 (AMRITSAR) AN D ACIT VS. LAKSHMI INDUSTRIES (2011) 135 TTJ (CHEN-TRIB) 112. 10.2. THE LD. D/R FOR THE REVENUE SUPPORTED THE ORD ERS OF THE AUTHORITIES BELOW AND REQUESTED THAT THE DISALLOWANCE BE CONFIRMED. 11 ITA NO. 137 & 138/JP/2013 SHRI VIJAY KUMAR SAXENA VS. ACIT, KOTA. 10.3. WE HAVE HEARD RIVAL CONTENTION AND PERUSED TH E MATERIAL ON RECORD. THE ASSESSEE HAS NOT PRODUCED ANY LOG BOOK IN RESPECT O F RUNNING OF VEHICLES, THEREFORE, PERSONAL USE OF VEHICLES CANNOT BE RUED OUT. BUT TH E DISALLOWANCE MADE BY THE AO IS ON HIGHER SIDE, THEREFORE, WE RESTRICT THE DISALLOWANC E TO RS. 13,116/- (10%). THE GROUND IS PARTLY ALLOWED. 11. IN THE RESULT, APPEALS OF ASSESSEE ARE PARTLY A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/01/2016. SD/- SD/- VH-VKJ-EHUK YFYR DQEKJ (T.R. MEENA) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 01/01/2016. DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI VIJAY KUMAR SAXENA, KOTA. 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, CIRCLE-2, KOTA. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 137 & 138/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR 12 ITA NO. 137 & 138/JP/2013 SHRI VIJAY KUMAR SAXENA VS. ACIT, KOTA.