M/s. Dhuleva Minerals Pvt. Ltd., JAIPUR V. DCIT, UDAIPUR

ITA 148/JODH/2011

• Counselvise Citation: 14823314 RSA 2011
• Duration Of Justice: 2 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 19-11-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 21-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 40A(3); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER ITA NO.148/JODH/2011 ASSESSMENT YEAR: 2005-06 M/S DHULEVA MINERALS PVT. LTD., VS. DY. COMMISSIONE R OF INCOME TAX, C/O. SHRI SHRAWAN KUMAR GUPTA, CENTRAL CIRCLE-2, U DAIPUR. ADVOCATE & TAX CONSULTANT, 416, SURYA CHAMBER RADIO MARKET, NEHRU BAZAR, JAIPUR. (PAN: AABCD 4180 E). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SHRAWAN GUPTA RESPONDENT BY : SHRI N.A. JOSHI, D.R. DATE OF HEARING : 19.11.2013 DATE OF PRONOUNCEMENT : 29 .11.2013 ORDER PER HARI OM MARATHA, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 200 5-06 IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), JAIPUR DATED 08.03.2011. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE COMPANY IS ENGAGED IN THE MANUFACTURING AND TRADING OF MARBLE SLABS/TI LES. FOR THE A.Y. 2005-06 IT FILED ITS RETURN OF INCOME ON 28.10.2005 DECLARING TOTAL LOSS AT RS.6,80,939/-. 2 ITA NO.148/JODH/2011 A.Y. 2005-06 HOWEVER, THE ASSESSMENT WAS COMPLETED AT A TOTAL IN COME OF RS.NIL, BUT FOLLOWING ADDITIONS HAVE BEEN MADE IN THE COMPUTATION OF TOTA L INCOME :- TOTAL INCOME ASSESSED AS PER RETURN OF INCOME (-) R S.680939 ADDITION: (1) ON ACCOUNT OF UNDISCLOSED DEBTORS AS DISCUSSED IN PARA 4 ABOVE RS.623625 (2) ON ACCOUNT OF UNDISCLOSED INCOME AS DISCUSSED I N PARA 5 ABOVE RS.392058 (3) ON ACCOUNT OF DISALLOWANCE U/S.40A(3) AS DISCUS SED IN PARA 6 ABOVE RS.131522 GROSS INCOME RS.466262 LESS: UNABSORBED DEPRECIATION LOSS OF A.Y. 2003-04 TO THE EXTENT AVAILABLE INCOME RS.466262 TOTAL INCOME RS. NIL MAT CALCULATION 1. BOOK PROFIT AS PER PROFIT & LOSS A/C (-) RS.6 228/- 2. ADD : ADDITION AS PER THIS ASSESSMENT ORDER RS.11472 05/- AS DISCUSSED ABOVE 3. NET BOOK PROFIT (S. NO.1+2) RS.1140977/- 4. MAT 7.5% ON NET BOOK PROFIT AT S.NO.3 RS.85573 /- 5. ADD : SURCHARGE @ 2.5% OF S. NO.4 RS.2139/- 6. TOTAL (S.NO.4+5) RS.87712/- 3 ITA NO.148/JODH/2011 A.Y. 2005-06 7. ADD: EDUCATION CESS @ 2% OF RS.87712/- RS.1754 /- AT S.NO.6 8. NET TAX PAYABLE (BEFORE INTEREST) (S.NO.6+7) RS .89466/- 3. AGGRIEVED, THE ASSESSEE WENT IN APPEAL AND THE L D. CIT(A) HAS GIVEN A PART RELIEF. THE ASSESSEE IS FURTHER AGGRIEVED AND FILE D THIS APPEAL BY RAISING THE FOLLOWING GROUNDS:- 1. THAT THE IMPUGNED ASSESSMENT ORDER U/S 143(3) DATED 30.11.2007 IS BAD IN LAW AND ON FACTS OF THE CASE FOR WANT OF JUR ISDICTION AND FOR VARIOUS OTHER REASONS AND HENCE THE SAME MAY KINDLY BE QUASHED. 2. RS.3,48,259/- (A) THE ID. CIT(A) HAS GROSSLY ER RED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN PARTLY CONFIRMING THE A DDITION OF RS.3,48,259/- OUT OF RS.6,23,625/- MADE BY THE AO ON THE BASIS OF ARBITRARY WORKING ON ACCOUNT OF ALLEGED UNDISCLOSED DEBTORS. THE ADDITIO N SO MADE AND PARTLY CONFIRMED BY THE CIT(A) IS BASED ON SUPPOSITION, PR ESUMPTION AND ASSUMPTIONS ONLY HENCE ILLEGAL, NOT IN CONFORMITY W ITH THE LAW AND CONTRARY TO FACTS OF THE CASE. THE SAME NEEDS TO BE DELETED IN FULL. B) THAT THE ID. AO & CIT(A) BOTH HAVE ERRED IN ARRI VING AT WRONG CONCLUSIONS THAT THE UNRECORDED RECEIVABLES ON THE DATE OF SURVEY WORKED BY HIM FROM THE ENTRIES IN A20 AND A27 WE RE AT RS.J0,10,907/- AND UNRECORDED OUTSTANDING CREDITOR S WERE AT RS.3,64,060/- SO THE NET DIFFERENCE OF RS.656838- W AS THERE AS AN AMOUNT RECEIVABLES ON THE DATE OF SURVEY. SUCH ALLE GED DIFFERENCE OF RS.656838/- IS TREATED AS UNDISCLOSED INCOME OF THE APPLICANT BY THE AO ON THE BASIS OF ASSUMPTION AND PRESUMPTION ONLY AND THEREBY ERRED IN MAKING SEPARATE ADDITION OF RS.656838/- IN THE DECL ARED INCOME OF THE APPLICANT WITHOUT APPRECIATING THE FACTS THAT THE A PPLICANT HIMSELF HAS OFFERED RS.7,00,000/- ON THIS ACCOUNT IN THE RETURN OF INCOME AND HAS EXPLAINED THE CALCULATION FOR OFFER TIME TO TIME. T HE CALCULATION OF DIFFERENCE IS ALSO NOT CORRECT AND SEPARATE CONSIDE RATION IS UNCALLED FOR. HENCE ALSO THE ADDITION SO MADE AND CONFIRMED IS IL LEGAL AND DESERVE TO 4 ITA NO.148/JODH/2011 A.Y. 2005-06 BE DELETED IN FULL. C) THE ID. AO AND CIT(A) BATH HAS ERRED AT LAW IN N OT ALLOWING CREDIT/SETOFF OF UNDISCLOSED INCOME OFFERED AND RET URNED BY THE APPLICANT IN ITS RETURN OF INCOME. D) THAT THE ID. AO AND CIT(A) BOTH HAS FAILED TO A PPRECIATE THE NOTING ON PAGE NO. 20,30,31, AND 44 OF ANNEXURE A27 AND TH EREBY ERRED IN ARRIVING AT WRONG CONCLUSION THAT RECEIVABLE AMOUNTING TO RS.623625/- ARE UNEXPLAINED AND NOT CONSIDERED BY T HE APPLICANT AS THE SAME WERE NOTED MORE THAN ONCE IN DIFFERENT ANNEXUR E. HENCE THE AO IS NOT CORRECT IN TAKING SUPPORT OF ABOVE UNEXPLAINED DEBTORS TOR ADDITION OF RS.656838/- ON ACCOUNT OF UNDISCLOSED DEBTORS. E) THE SEPARATE ADDITION OF RS.623838/- MADE BY THE AO AND CONFIRMED BY THE CIT(A) TO THE EXTENT OF RS.3,48,259/- IGNORI NG THE OFFERED INCOME BY THE APPLICANT ON THIS ACCOUNT TANTAMOUNT DOUBLE TAXATION HENCE REQUESTED TO BE DELETED ON THIS GROUND ALSO. 3. RS.3,92,058/- THE ID. C1T(A) ERRED IN LAW AS WEL L AS ON THE FACTS OF THE CASE IN CONFIRMING THE ADDITION OF RS.3,92,058/ - ON ACCOUNT OF UNDISCLOSED INCOME ON THE BASIS OF NOTING ON VARIOU S PAGES OF ANNEXURE A27, B19, B22, B23 AND A73 6,23625/- AND ARRIVED AT WRONG CONCLUSIONS THAT THE DIFFERENCE OF 392058/- IN THE TOTAL RECEIPTS AND TOTAL PAYMENT NOTED ON THE ABOVE ANNEXURE IS THE UNDISCLO SED INCOME OF THE APPLICANT, WITHOUT APPRECIATING THE FACTS THAT THE APPLICANT HAS CONSIDERED UNDISCLOSED RECEIPTS, UNDISCLOSED PAYMEN T THEIR NATURE AND AVAILABLE UNDISCLOSED ASSETS ON THE DATE OF SURVEY AND OFFERED UNDISCLOSED INCOME ON THE BASIS OF NET WORTH WHICH INCLUDED UNDISCLOSED INVESTMENT IN CASH/STOCK/DEBTORS. HENCE THE ADDITION SO MADE AND CONFIRMED BY THE CIT(A) IS ILLEGAL AND TOT ALLY CONTRARY TO THE PROVISIONS OF LAW AND FACT ON RECORD AND TANTAMOUNT DOUBLE TAXATION HENCE REQUESTED TO BE DELETED IN FULL. 4. RS. 65,196/-: THAT THE ID. C1T(A) HAS GROSSLY ER RED AT LAW AS WELL AS ON THE FACTS OF THE CASE IN PARTLY MAKING DISALLOWA NCE OF RS.65,196/- OUT OF RS.1,31,522/- MADE BY THE AO ON ACCOUNT OF DISAL LOWANCE OF CASH EXPENDITURE IN EXCESS 2000/- APPLYING PROVISIONS O F S. 40A(3) WITHOUT APPRECIATING THE FACTS THAT ALL THE EXPENDITURE MEN TIONED IN ANNEXURE B19 AND B23 CONSIDERED BY HIM WERE TREA TED BY HIM AS 5 ITA NO.148/JODH/2011 A.Y. 2005-06 UNRECORDED EXPENDITURE SO THE PROVISION OF S. 40A(3 ) ARE NOT AT ALL APPLICABLE IN THIS CASE. THE ADDITION SO MADE BY TH E AO AND PARTLY CONFIRMED BY THE CIT(A) IS ILLEGAL AND BEING TOTALL Y CONTRARY TO THE PROVISION OF LAW AND RECORDS HENCE DESERVE TO BE DE LETED IN FULL. 5. THE APPELLANT PRAYS YOUR HONOURS INDULGENCE TO ADD, AMEND OR ALTER ALL OR ANY OF THE GROUNDS OF THE APPEAL ON OR BEFOR E THE DATE OF HEARING. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAR EFULLY PERUSED THE ENTIRE RECORDS. 5. GROUND NO.1 WAS NOT PRESSED BY THE LD. AUTHORIZE D REPRESENTATIVE SHRI SHRAWAN GUPTA, ADVOCATE AT THE TIME OF HEARING AND, THEREFORE, THE SAME STANDS DISMISSED AS NOT PRESSED. 6. GROUND NO.2 & 3 RAISED ONLY ONE ISSUE AND THEREF ORE, WE PROCEED TO DECIDE BOTH THESE GROUNDS CONJOINTLY. 7. THE FACTS APROPOS THESE GROUNDS ARE THAT A SEARC H AND SURVEY ACTION WAS CARRIED OUT AT THE RESIDENTIAL AND BUSINESS PREMISE S OF SHRI GENDAMAL KOTHARI ON 02.12.2004. DURING THIS PROCEEDINGS, BOOKS OF ACCO UNT AND OTHER INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED. THE BOOKS OF ACCO UNTS OF THE ASSESSEE ARE AUDITED AND AUDIT REPORT WAS AVAILABLE. DURING THE SEARCH OPERATION CONDUCTED AT THE RESIDENCE OF SHRI KOTHARI AND DURING SURVEY VAR IOUS EVIDENCES REGARDING RECEIVABLE IN RESPECT OF JOB WORK DONE WERE FOUND. THE ASSESSEE EXPLAINED THIS 6 ITA NO.148/JODH/2011 A.Y. 2005-06 ANOMALY BY STATING THAT THE AMOUNT SHOWN AS RECEIVA BLE ARE PROGRESSIVE AND ARE REPEATEDLY SHOWN ON VARIOUS PAGES AND THAT BALANCE OF A SINGLE DEBTOR HAS BEEN TAKEN MANY TIMES. THE A.O. FURTHER NOTED THAT ON P AGES OF ANNEXURE-A27 CREDITORS TOTALING TO RS.3,54,060/- WHICH ARE NOT R EFLECTED IN THE BOOKS OF ACCOUNTS AND DUE RECEIVABLES ARE SHOWN AT RS.10,10,907/-. T HUS, THE DIFFERENCE OF DUE RECEIVABLE OVER CREDITORS COMES TO RS.6,56,838/-. AGAINST THESE PAYMENTS, SHRI GENDAMAL KOTHARI, DIRECTOR OF THE COMPANY HAS OFFER ED RS.7,00,000/- FOR TAXATION, THEREFORE, NO ADDITION HAS BEEN MADE. HO WEVER, THE A.O. HAS ADDED RS.6,23,625/- ON THE REASONING THAT THE AMOUNT RECE IVABLE FROM SHRI MUKESH MARBLE OF RS.2,75,366/- AND RS.2,79,190/- AS PER PA GE NO.27, 30 & 31 OF ANNEXURE-A27 AND FURTHER AMOUNT OF RS.69,090/- FROM RMT MARBLE AS PER PAGE NO. 44 OF A-27 HAVE REMAINED UNEXPLAINED. AGGRIEVE D, THE ASSESSEE WENT BEFORE THE LD CIT(A) AND MADE THE FOLLOWING SUBMISSIONS:- AT THE VERY OUTSET IT IS SUBMITTED THAT THE AO PRO CEEDED ON MISCONCEPTION OF FACTS BECAUSE IN THE CASE OF MUKES H MARBLE TRADERS, THE OBSERVATIONS OF THE A.O. ARE CONTRARY TO THE FA CTS OF THE CASE. ON PERUSAL OF PAGE NO. 27 (PB43) AND 30 OF ANNEXURE A 27 (PB 40) IT IS VERY CLEAR THAT THEY ARE IDENTICAL AND DUPLICATE CO PY ONLY AND PAGE NO. 31 (PB 39 ) CONTAINS THE DETAILS OF PAGE 27 AND 30 AND THERE WAS MINOR ADDITION IN SAWING CHARGES. AS PER PAGE 30 THE CHAR GES 7 RECEIPTS NOTED AT RS. 2,75,366/- AND AT PAGE 31 IT WAS 2,79,190/-. BOTH THE ABOVE ARE INTER RELATED AND THE CORRECT RECEIPT WAS 2,79,190/ -. HENCE THERE WAS DOUBLE CONSIDERATION OF RS. 2,75,366/-. AND ALL THI S THINGS HAD BEEN EXPLAINED TO THE AO AS ADMITTED BY HIM AT PAGE NO. 2 PARA LAST OF ASSESSMENT ORDER WHEREIN HE HIMSELF STATE THAT THE ' A.R. OF THE ASSESSEE IN THIS REGARD FURNISHED WRITTEN SUBMISSIONS DATED 01.11.2007 AND 7 ITA NO.148/JODH/2011 A.Y. 2005-06 27.11.2007 WITH A LIST EXPLAINING EACH AND EVERY EN TRY IN THE SHOW CAUSE AND EXPLAINED THE VARIOUS ENTRIES/TRANSACTIONS WITH THE BOOKS OF ACCOUNT. FURTHER OUT OF 2,79,190/- ABOUT 50% WERE ALREADY RECORDED IN THE REGULAR BOOKS AND THE BALANCE HAVE BEEN CONSIDE RED IN THE OFFER 7.00.000/- SO THE ADDITION MADE BY THE; A.O. DESERV E TO BE DELETED. ALTERNATIVELY, AT THE WORST RS.1,40,000/- (50% OF R S.2,79,190/-) ONLY HAS TO BE ADDED ON THIS ACCOUNT. COPY OF RELEVANT LEDGE R ACCOUNT (PB52-56) AND RELEVANT PAGES OF ANNEXURE A 27 (PB39-44) ARE A TTACHED HERE WITH. SIMILARLY IN THE CASE OF RISHABH MARBLE TRADERS (RM T) THE TOTAL RECEIPT DUE WAS L,03,834/- (TAKEN AS 69,069 BY THE A.O.) WH ICH WAS INCLUDED IN THE LIST OF RECEIVABLES OF RS. 10,10,907/- HENCE NO SEPARATE CONSIDERATION REQUIRED FOR. THE SAME IS COVERED IN OFFER OF NET D EBTORS OF 7,00,000/-. FURTHER THE AO NO WHERE DENIED THE CONTENTION OF TH E ASSESSEE THAT AMOUNT SHOWN RECEIVABLE BY THE ASSESSEE ARE PROGRES SIVE AND ALSO REPEATED ON VARIOUS PAGES AND THERE ARE MULTIPLICIT Y OF NOTTINGS OF SAME TRANSACTION AND THE SOME OF THE PAGE OF VARIOUS ANN EXURE REPRESENTS MERELY A LIST OF PROGRESSIVE TRANSACTIONS FOUND ON DIFFERENT PAGES OF THE SAME PARTIES. ALSO THE ACCOU NTS ARE CONTINUED AT ANOTHER PAGE OF THIS ANNEXURE BECAUSE OF SHORTAGE O F SPACE. FURTHER THE BALANCE OF SINGLE DEBTORS HAS BEEN TAKEN MORE THAN ONCE AND IGNORING THE FACTS OF THE BALANCE AS ON THE DATE SURVEY AND LAST BALANCE AND LAST BALANCE ON THE BASIS OF THE RECORDS HAD ONLY TO BE CONSIDERED FOR COMPUTING THE POSITION OF DUE RECEIVABLE. CONSIDERI NG ALL THESE FACTS THE APPELLANT HAD ALREADY OFFERED RS.1 LACS FOR TAX ATION. HENCE THE AO WAS ABSOLUTELY INCORRECT IN MAKING THE SEPARATE ADD ITION OF RS.6,23,625/-WHICH HAS ALREADY BEEN CONSIDERED AND TAKEN IN TO ACCOUNT AND THE AO NEVER ASKED/CONFRONTED TO THE ASSESSEE B EFORE MAKING THIS ADDITION. HENCE NOW MAKING ADDITION OF THE SAME INC OME SHALL BE TANTAMOUNT TO DOUBLE ADDITION OF SAME INCOME. HENCE DESERVE TO BE DELETED IN FULL. 8. AFTER CONSIDERING RIVAL SUBMISSIONS, THE LD. CIT (A) HAS DELETED THE ADDITION OF RS.2,75,366/- BUT HAS CONFIRMED THE BALANCE AMOU NT OF RS.3,48,359/-. THIS AMOUNT IS THE SUBJECT MATTER OF GROUND NO.2. 8 ITA NO.148/JODH/2011 A.Y. 2005-06 9. LIKEWISE, THE A.O. HAS FURTHER NOTED THAT THE TO TAL RECEIPT COMES TO RS.36,30,211/- AND PAYMENT FOR VARIOUS EXPENSES COM ES TO RS.25,38,153/- AND THERE BEING A NET DIFFERENCE OF RS.10,92,058/- AND AFTER GIVING SET-OFF OF RS.7,00,000/- SURRENDERED ON ACCOUNT OF UNDISCLOSED DEBTOR THE NET AMOUNT REMAINED RS.3,92,058/- WHICH HAS BEEN SEPARATELY AD DED AND CONFIRMED BY THE LD. CIT(A) AND THIS IS THE SUBJECT MATTER OF GROUND NO. 3 OF THIS APPEAL. BOTH THE PARTIES HAVE REITERATED THEIR ORIGINAL ARGUMENTS ON THESE ISSUES. 10. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE HAV E FOUND THAT THE A.O. HAS PROCEEDED ON THE WRONG FOOTING DESPITE THE FACT THA T HE HAS ACCEPTED THE ENTRIES IN THE BOOKS AND FOUND THEM VERIFIABLE AS IS MENTIONED AT PAGE NO.2, LAST PARA OF THE ORDER WHEREIN HE HAS STATE THAT THE A.R. OF THE AS SESSEE IN THIS REGARD FURNISHED WRITTEN SUBMISSIONS DATED 01.11.2007 AND 27.11.2007 WITH A LIST EXPLAINING EACH AND EVERY ENTRY IN THE SHOW CAUSE NOTICE AND EXPLAI NED THE AS VARIOUS ENTRIES/TRANSACTIONS WITH THE BOOKS OF ACCOUNTS ETC . THE AMOUNTS SHOWN AS RECEIVABLE ARE PROGRESSIVE AND THIS FACT COULD NOT BE CONTROVERTED OR DISPROVED FROM THE RECORD. THE MULTIPLICITY OF THE RECORDING ALSO NOTICED. THE A.O. HAS DEPICTED CONSOLIDATED POSITION OF ALL ANNEXURE REGA RDING RECEIPTS AND PAYMENT EITHER RECORDED IN THE BOOKS OF ACCOUNT OR NOT RECO RDED, AS UNDER :- 9 ITA NO.148/JODH/2011 A.Y. 2005-06 CONSOLIDATED APPOSITION RECEIPTS PAYMENTS ANNEXURE A-27 7,69,828/- 8,29,172/- DIFFERENCE 10, 92,058/- B-19 14,33,873/- 10,50,387/- OUT OF ABOVE 50% IN B-22 13,57,575/- 6,38,704/- THE BOOK S AND RS. B-23 53,231/- 19,890/- 700000/- OFFE RED FOR A-73 1,504/- -- TAXATION -------------- -------------- 36,30,211/- 25,38,153/- ------------- --------------- 11. WE HAVE NOTICED THAT THE CORRECT POSITION WHICH EMERGES IS AS UNDER :- IT MEANS THE POSITION IS AS THE CORRECT FACTS ARE AS UNDER. TOTAL RECEIPTS AS PER SEIZED MATERIAL 36,30,211/- LESS : 50% RECORDED IN REGULAR BOOKS 18,30,211/- --------------- UNRECORDED RECEIPT 18,00,000/- PAYMENTS AS PER SEIZED MATERIAL 25,38,153/- LESS: 50% RECORDED IN REGULAR BOOKS 12,38,153/- UNRECORDED PAYMENT 13,00,000/- --------------- BALANCE UNRECORDED INCOME 5,00,000/- ------------- 12. THUS, THE BALANCE UNRECORDED INCOME COMES TO ON LY RS.5,00,000/- AND AGAINST THIS THE ASSESSEE HAS ALREADY OFFERED RS.7, 00,000/- FOR TAXATION. THUS, THIS ADDITION TANTAMOUNT TO DOUBLE ADDITION BECAUSE THE A.O. TAXED INCOME AS WELL AS ITS UTILIZATION. WE ARE IN AGREEMENT WITH THE LD. AUTHORIZED REPRESENTATIVES 10 ITA NO.148/JODH/2011 A.Y. 2005-06 SUBMISSION AS TO WHY THEN THE ASSESSEE MADE SURREND ER OF RS.7,00,000/-. IT IS STATED THAT NOTING CONTAINED TRANSACTION RELATING T O PAYMENTS RECEIVED AGAINST SALES, JOB WORK RECEIVED, JOB WORK DETAILS, JOB WORK OF PO LISHING, LIST OF DEBTORS, LIST OF CREDITORS AND SOME PAPERS CONTAINING DETAILS OF ACT UAL BILLS OF SUCH TRANSACTION ETC. ADMITTEDLY, THE ASSESSEE COMPANY HAS ADOPTED 50% BI LLING SYSTEM FOR PAYMENT AS WELL AS FOR RECEIPT. BY CONSIDERING IT, IF THE G.P . RATE IS APPLIED ON DIFFERENCE AMOUNT OF RS.10,92,058/- (RECEIPT OF RS.36,30,211 - RS.25,38,153 (PAYMENTS)) THEN IN THAT CASE UNDISCLOSED INCOME WORKS OUT TO RS.4,0 0,000/- ONLY. OUT OF THIS, 50% IS RECORDED IN THE BOOKS OF ACCOUNT. THE CLAIM OF THE ASSESSEE IS THAT TO BE ON SAFER SIDE THE ASSESSEE HAS OFFERED UNDISCLOSED INCOME OF RS.7,00,000/- WHICH IS ALREADY MORE THAN UNDISCLOSED INCOME WORKED OUT. WE FIND F ORCE IN THIS SUBMISSION AND ARE OF THE CONSIDERED OPINION THAT NO FURTHER ADDIT ION CAN BE MADE. THE ENTIRE ADDITION DESERVES TO BE DELETED. WE DO ACCORDINGLY AND ALLOW GROUND NOS.2 & 3 OF THIS APPEAL. 13. THE FACTS APROPOS GROUND NO.4 OF THIS APPEAL AR E THAT THE A.O. NOTICED ON VERIFICATION OF ANNEXURE B-19 AND B-23 THAT THE ASS ESSEE HAS MADE CASH EXPENDITURE IN EXCESS OF RS.20,000/- TO VARIOUS PAR TIES DETAILED AT PAGE NO.3 OF HIS ORDER. THE PAYMENT BEING IN CONTRAVENTION OF PROVI SIONS OF SECTION 40A(3) OF THE ACT, THE A.O. HAS DISALLOWED 20% OF THE SAME AND MA DE ADDITION OF RS.1,31,522/-. 11 ITA NO.148/JODH/2011 A.Y. 2005-06 THE LD CIT(A) HAS ALSO CONFIRMED THE DISALLOWANCE T O THE EXTENT OF RS.65,196/- OUT OF TOTAL DISALLOWANCE OF RS.1,31,522/- MADE BY THE A.O. 14. BEFORE US BOTH THE PARTIES HAVE REITERATED THEI R EARLIER ARGUMENTS. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FOUND THAT TH ERE IS NO FALLACY IN THE REASONING GIVEN BY THE LD. CIT(A) TO SUSTAIN THE ADDITION OF RS.65,196/-. WE CONFIRM THIS ADDITION AND DISMISS GROUND NO.4 OF THIS APPEAL. 15. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 29.11.2013) SD/- SD/- (N.K. SAINI) (HARI OM MARATHA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 29 TH NOVEMBER, 2013 PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, JODHPUR BENCH, JODHPUR 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE T RIBUNAL, JODHPUR