Inder Chand Agarwal(HUF), Hooghly V. ITO, Ward 45(3), Kolkata, Kolkata

ITA 1481/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9485 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 14-07-2016
• Court: TRIBUNAL
• Department Lawyers: SALLONG YADEN A DDL CIT LD
• Assessee Lawyers: SOMNATH GHOSH LD
• Keywords: Corroborative evidences
• Section: 143(3); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL,D BENCH KOLKATA BEFORE : SHRI M.BALAGANESH, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO. 1481/KOL/2016 A.Y 2009-10 INDER CHAND AGARWAL (HUF) VS. I.T.O WARD 45(3), KOLKATA PAN: AAAHI 1765C [APPELLANT] [RESPONDENT] APPELLANT BY : SHRI SOMNATH GHOSH, ADVOC ATE, LD.AR RESPONDENT BY : SHRI SALLONG YADEN, A DDL.CIT, LD.DR DATE OF HEARING : 18-11-2016 DATE OF PRONOUNCEMENT : 31-01-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 02/06/2016 PASSED BY THE COMMISSIONER OF INCO ME TAX(APPEALS), 21, KOLKATA FOR THE ASSESSMENT YEAR 2009-10. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (APP EALS)-21, KOLKATA FAILED TO APPRECIATE THAT NONE OF THE CONDITIONS PRECEDENT EXISTED AND/O R WERE FULFILLED BY THE LD. INCOME TAX OFFICER. WARD 45(3). KOLKATA FOR HIS SPECIOUS ACTIO N OF ASSUMING JURISDICTION U/S. 40(A)(IA) READ WITH S. 194C OF THE INCOME TAX ACT. 1961 IN THE INS TANT CASE AND THE PURPORTED ADDITION OF RS. 11.70.000/- UPHELD BY HIM CITING ALLEGED INFRINGEME NT THEREOF IS THEREFORE AB INITIO VOID. ULTRA VIRES AND EX-FACIE NULL IN LAW. 2. FOR THAT ON A TRUE AND PROPER INTERPRETATION OF THE SCOPE OF THE PROVISIONS OF S. 40(A)(IA) OF THE INCOME TAX ACT. 1961. THE LD. COMMISSIONER OF I NCOME TAX (APPEALS)-21. KOLKATA WAS ABSOLUTELY IN ERROR IN UPHOLDING THE IMPUGNED ADDIT ION OF RS. 11.70.000/- MADE BY THE LD. INCOME TAX OFFICER. WARD 45(3). KOLKATA AND THE PUR PORTED CONCLUSION REACHED ON THAT BEHALF IS COMPLETELY UNFOUNDED, UNJUSTIFIED AND UNTENABLE IN LAW. 3. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (APP EALS)-21, KOLKATA ACTED UNLAWFULLY IN UPHOLDING THE IMPUGNED ADDITION OF RS. 11.70.000/-R ESORTED TO BY THE LD. INCOME TAX OFFICER. WARD 45(3). KOLKATA INVOKING THE PROVISIONS OF S. 4 0(A)(IA) OF THE ACT BASING ON EXTRANEOUS PARAMETERS NOT GERMANE TO THE ISSUE IN DISPUTE AND HIS SPECIOUS FINDINGS IN THAT RESPECT ARE ALTOGETHER ARBITRARY. UNWARRANTED AND PERVERSE. 4. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (APP EALS)-21,KOLKATA ERRED IN UPHOLDING THE DISALLOWANCE IN AN AMOUNT OF RS. 45.250/- MADE BY T HE LD. INCOME TAX OFFICER. WARD 45(3), KOLKATA UNDER THE HEAD 'TELEPHONE EXPENSES;' ON THE SPURIOUS ALLEGATION F FAILING TO PRODUCE EVIDENCE IN SUPPORT OF SUCH CLAIM AND THE SPECIOUS ACTION ON THAT BEHALF BY MISREADING THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE IS TOTALLY IL LEGAL, ILLEGITIMATE AND INFIRM IN LAW. ITA NO. 1481/KOL/2016 IND ER CHAND AGARWAL (HUF) 2 3. THE ASSESSEE IS A HINDU UNDIVIDED FAMILY AND ENG AGED IN THE BUSINESS OF TRADING IN ATTA AND CONDUCTS ITS BUSINESS UNDER THE TRADE NAME AND STYLE OF 'M/S. MA DURGA ENTERPRISE'. THE ASSESSEE FILED R ETURN OF INCOME ON 22- 09-2009 DISCLOSING A TOTAL INCOME OF RS.1,68,713/- AND NOTICES U/SEC 143(3) OF THE ACT WERE ISSUED, IN RESPONSE THE ASSESSEE FI LED DETAILS IN SUPPORT OF RETURN. IN PURSUANCE OF ITS ACTIVITIES, PAYMENTS AG GREGATING TO THE SUM OF RS. 11,77,600/- WERE MADE TO ASHOK KUMAR JAIN (HUF) AMOUNTING TO RS. 8,47,100/- AND BHAMALAL JAIN (HUF) TO THE TUNE OF R S. 3,30,500/-ON ACCOUNT OF LORRY HIRE CHARGES. 4. IN COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, T HE ASSESSING OFFICER FOUND THAT THE PAYMENTS ON ACCOUNT OF LORRY HIRE CH ARGES TO ASHOK KUMAR LAIN (HUF) AMOUNTING TO RS, 8,47,100/- AND BHAMALAL JAIN (HUF) TO THE TUNE OF RS. 3,30,500/- WERE MADE WITHOUT ANY DEDUCTION O F TAX AT SOURCE AS REQUIRED U/S. 194C OF THE ACT AND IT WAS EXPLAINED THAT THE PAYEES ISSUED FORM 15-I TO THE ASSESSEE FOR NON DEDUCTION OF TAX AT SOURCE AND NO TAX COULD BE DEDUCTED ON THE ENTIRE SUM OF RS.11,77,600 /- PAID ON THAT ACCOUNT. THE AO WAS NOT ACCEPTABLE TO SUCH EXPLANATION AND A DDED THE SAID SUM TO THE TOTAL INCOME OF THE ASSESSEE. 5. THE CIT-A WAS OF THE VIEW THAT THE ASSESSING OFF ICER EXAMINED THE FACTS IN DETAIL AND RIGHTLY DISALLOWED THE CLAIM OF THE ASSESSEE BY INVOKING THE PROVISION OF SECTION 40(A)(IA) OF THE ACT AND H ELD THE ADDITION ON ACCOUNT OF LORRY HIRE CHARGES PAID TO ASHOK KUMAR JAIN (HUF ) AND BHAMALAL JAIN (HUF) IS SUSTAINED AND THE ADDITION OF RS. 11,70,00 0/- WAS CONFIRMED. 6. LD.AR REITERATED THE SUBMISSIONS AS MADE BEFORE THE AO AND CIT-A AND RELIED ON THE DECISION OF HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT VS. SRI MARIKAMBA TRANSPORT CO REPORTED IN (2015) 57 TAXMANN.COM 273 (KARNATAKA) AND ARGUED ONCE THE CONDITIONS AS R EQUIRED U/SECTION 194C(3) WERE PRODUCED AND NO ADDITION U/SECTION 40( A)(IA) OF THE ACT IS MAINTAINABLE. THE LD.DR RELIED ON THE ORDERS OF AO AND CIT-A. ITA NO. 1481/KOL/2016 IND ER CHAND AGARWAL (HUF) 3 7. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL EVIDENCE ON RECORD. IT IS AN ADMITTED FACT THAT SINCE BOTH THE PAYEES S UBMITTED DECLARATIONS IN FORM 15-I BEFORE THE ASSESSING OFFICER ALONG WITH T HE DETAILS OF SUCH LORRY OWNERS INCORPORATING THEIR NAMES, ADDRESSES AND AMO UNTS PAID TO AND RECEIVED BY BOTH THE PARTIES WERE AVAILABLE BEFORE THE ASSESSING OFFICER IN COURSE OF THE ASSESSMENT PROCEEDINGS FOR THE ASSESS MENT YEAR UNDER DISPUTE AND BASING ON WHICH, HE WAS OF THE OPINION THAT THE DECLARATION FILED IN FORM 15-I IS NOT A GENUINE DOCUMENT AS IT WAS NOT FILED WITH THE APPROPRIATE AUTHORITY AND DOES NOT CONTAIN THE DATE AND PRODUCE D THE SAME DURING THE COURSE OF HEARING. THE LD.AR ARGUED THAT THE REQUIR EMENT OF THE SECOND PROVISO TO SECTION 194C(3)(I) OF THE ACT IS THAT NO DEDUCTION SHALL BE MADE U/S. 194C(1) OR S.194C(2) OF THE ACT FROM ANY SUM C REDITED OR PAID OR LIKELY TO BE CREDITED OR PAID TO THE ACCOUNT OF, OR TO, TH E CONTRACTOR OR SUB- CONTRACTOR, IN A CASE WERE SUCH PAYEE HAD TWO GOODS CARRIAGES DURING THE PREVIOUS YEAR AND FURNISHED A DECLARATION IN FORM 1 5-1. IN THIS REGARD, WE MAY READ THE RELEVANT PROVISO TO SUB-SECTION 3 OF S ECTION 194C AS IT STOOD THEN IN FINANCE ACT 2008 RELEVANT TO THE YEAR UNDER CONSIDERATION. SECTION - 194C, INCOME-TAX ACT, 1961-2008 PAYMENTS TO CONTRACTORS AND SUB-CONTRACTORS 194C. [(1) ANY PERSON RESPONSIBLE FOR PAYING ANY SUM TO A NY RESIDENT (HEREINAFTER IN THIS SECTION REFERRED TO AS THE CONTRACTOR) FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK) IN PURSUANCE OF A CONTRACT BETWEEN THE CO NTRACTOR AND (3) NO DEDUCTION SHALL BE MADE UNDER SUB-SECTION (1 ) OR SUB-SECTION (2) FROM (I) THE AMOUNT OF ANY SUM CREDITED OR PAID OR LIKE LY TO BE CREDITED OR PAID TO THE ACCOUNT OF, OR TO, THE CONTRACTOR OR SUB-CONTRACTOR, IF SUCH SUM DOES NOT EXCEED TWENTY THOUSAND RUPEES: PROVIDED THAT WHERE THE AGGREGATE OF THE AMOUNTS OF SUCH SU MS CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE FINANCIAL YEAR EXCEEDS FIFTY THOUSAND RUPEES, THE PERSON RESPONSIBLE FOR PAYING SUCH SUMS REFERRED TO IN SUB-SECTION (1) OR, AS THE CASE MAY BE, SUB-SECTION (2) SHALL BE LIABLE TO DEDUCT INCOME-TAX [UNDER THIS SECTION:] [ PROVIDED FURTHER THAT NO DEDUCTION SHALL BE MADE UNDER SUB- SECTION (2), FROM THE AMOUNT OF ANY SUM CREDITED OR PAID OR LIKELY TO BE CREDITED OR PA ID DURING THE PREVIOUS YEAR TO THE ACCOUNT OF THE SUB-CONTRACTOR DURING THE COURSE OF BUSINESS OF PLY ING, HIRING OR LEASING GOODS CARRIAGES, ON PRODUCTION OF A DECLARATION TO THE PERSON CONCERNED PAYING OR CREDITING SUCH SUM, IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND WIT HIN SUCH TIME AS MAY BE PRESCRIBED, IF SUCH SUB- CONTRACTOR IS AN INDIVIDUAL WHO HAS NOT OWNED MORE THAN TWO GOODS CARRIAGES AT ANY TIME DURING THE PREVIOUS YEAR: PROVIDED ALSO THAT THE PERSON RESPONSIBLE FOR PAYING ANY SUM AS AFORESAID TO THE SUB-CONTRACTOR REFERRED TO IN THE SECOND PROVISO SHALL FURNISH TO THE PRESCRIBED INCOME-TAX AUTHORITY OR THE PERSON AUTHORISED BY IT SUCH PARTICULARS AS MAY BE PRESCRI BED IN SUCH FORM AND WITHIN SUCH TIME AS MAY BE PRESCRIBED; OR] ITA NO. 1481/KOL/2016 IND ER CHAND AGARWAL (HUF) 4 8. A PLAIN READING OF THE 2 ND PROVISO TO SUB-SECTION 3 OF SECTION 194C EXPLAINS THAT DEDUCTION IS ALLOWED IF THE SUB CONTR ACTOR IS AN INDIVIDUAL WHO HAS NOT OWNED MORE THAN TWO GOODS CARRIAGES AND FIL ES A DECLARATION TO THE PERSON CONCERNED PAYING OR CREDITING SUCH SUM IN TH E PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER. IN THE PRESENT C ASE, IT IS OBSERVED FROM THE ORDER OF AO THAT THERE IS NO DISPUTE THAT THE P AYEES HAVING MORE THAN TWO GOODS CARRIAGES AND THAT THE ASSESSEE SUBMITTED DECLARATION FORM UNDER 15-I DURING THE COURSE OF ASSESSMENT PROCEEDINGS AN D TREATED THE SAME AS NOT GENUINE AND PROCEEDED TO DISALLOW THE IMPUGNED AMOUNT. THE LD.AR CONTENDED THAT IT IS A SETTLED POSITION THAT ONCE A N ASSESSEE OBTAINS FORM NO. 15-I FROM THE SUB-CONTRACTORS, HE IS NOT LIABLE TO DEDUCT TAX FROM THE PAYMENTS MADE TO SUB-CONTRACTORS AND NO DISALLOWANC E CAN BE MADE UNDER S. 40(A)(IA) OF THE ACT, IN SUPPORT OF HIS CONTENT ION, RELIED ON THE DECISION OF HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT VS. SRI MARIKAMBA TRANSPORT CO REPORTED IN (2015) 57 TAXMANN.COM 273 (KARNATAKA) AND WE MAY REFER TO THE RELEVANT PORTION OF WHICH IS REPRO DUCED HERE IN BELOW: 4. THE COMBINED READING OF THESE TWO PROVISIONS MAK E IT CLEAR THAT IF THERE IS ANY BREACH OF REQUIREMENTS OF SECTION 194C(3), THE QUESTION OF AP PLICABILITY OF SECTION 40(A)(IA) ARISES. THE EXCLUSION PROVIDED IN SUB-SECTION OF SECTION 194C F ROM THE LIABILITY TO DEDUCT TAX AT SOURCE UNDER SUB-SECTION (2) WOULD BE COMPLETE, THE MOMENT THE R EQUIREMENTS CONTAINED THEREIN ARE SATISFIED. ONCE, THE DECLARATION FORMS ARE FILED BY THE SUBCON TRACTOR, THE LIABILITY OF THE ASSESSEE TO DEDUCT TA X ON THE PAYMENTS MADE TO THE SUB-CONTRACTOR WOULD NO T ARISE. AS WE HAVE EXAMINED, THE SUB- CONTRACTORS HAVE FILED FORM NO. 15-I BEFORE THE ASS ESSEE. SUCH BEING THE CASE, THE ASSESSEE IS NOT REQUIRED TO DEDUCT TAX UNDER SECTION 194C(3) OF THE ACT AND TO FILE FORM NO.15J. IT IS ONLY A TECHNICA L DEFECT AS POINTED OUT BY THE TRIBUNAL IN NOT FILING FORM NO.15J BY THE ASSESSEE. THIS MATTER WAS EXTENSIVELY CONSIDERED BY THE ITAT, AHMEDABAD BENCH IN VALIBHAI KHANDBAI MANKAD'S CASE (SUPRA) AND THE SAID JUDGMENT HAS BEEN UPHELD BY IN HIGH CO URT OF GUJARAT IN CL'T V. VALIBHAI KHANBHAI MANKAD [2013] 216 TAXMAN 18/28 TAXMMM.COM 119 WHERE IN IT IS HELD THAT ONCE THE CONDITIONS OF SECTION 194C(3) WERE SATISFIED, THE LIABILITY OF TH E PAYEE TO DEDUCT TAX AT SOURCE WOULD CEASE AND ACCORDINGLY, APPLICATION OF SECTION 40(A)(IA) WOULD ALSO NOT ARISE. THE TRIBUNAL, PLACING RELIANCE ON THE JUDGMENT OF THE ITA T, AHMEDABAD BENCH, HAS DIS MISSED THE APPEAL FILED BY THE REVENUE. WE AGREE WITH THES PROPOSITIONS AND HOLD THAT FILING O F FORM NO.15I/J IS ONLY DIRECTORY AND NOT MANDATORY. 9. IN THE LIGHT OF LAW LAID DOWN BY THE HONBLE HIG H COURT OF KARNATAKA SUPRA, WE HOLD THAT NO DISALLOWANCE U/SECTION 40(A) (IA) OF THE ACT IS MAINTAINABLE SINCE BOTH THE PAYEES ASHOK KUMAR JAIN (HUF) AND BHAMALAL JAIN (HUF) SUBMITTED FORM NO. 15-1 FOR NON-DEDUCTIO N OF TAX AT SOURCE FROM THE PAYMENT IN RESPECT OF LORRY HIRE CHARGES AND TH E LIABILITY ON THE ASSESSEE TO DEDUCT TAX AT SOURCE FROM SUCH PAYMENTS DOES NOT ARISE. ITA NO. 1481/KOL/2016 IND ER CHAND AGARWAL (HUF) 5 10. FURTHER, IN THE PRESENT CASE, THE DECLARATIONS OBTAINED FROM PAYEES IN FORM 15-I WERE FILED BY THE PAYER BEFORE THE REVENU E DURING THE ASSESSMENT PROCEEDINGS. THE SAME DOES NOT AUTOMATICALLY ATTRAC T THE DISALLOWANCE U/S. 40(A)(IA) OF THE ACT, AS THERE IS NO EVIDENCE BROUG HT ON RECORD BY THE REVENUE THAT THESE DECLARATIONS WERE NOT OBTAINED B Y THE PAYERS AT THE TIME OF PAYMENT AND PLACED RELIANCE ON THE DECISION OF C O-ORDINATE BENCH, ITAT, MUMBAI VIPIN P. MEHTA REPORTED IN (2011) 11 TAXMANN .COM 342(MUM.), WHEREIN THE FACTS OF THE CASE THEREIN ARE THAT THE ASSESSEE CLAIMED NON DEDUCTION OF TAX AT THE TIME OF PAYING THE INTEREST BY STATING THAT HE OBTAINED APPROPRIATE DECLARATIONS IN THE PRESCRIBED FORM FROM THE PAYEES AND THE CO-ORDINATE BENCH HELD IN THE LIGHT OF SUC H DECLARATIONS THE ASSESSEE HAD NO OPTION, BUT TO MAKE THE PAYMENT OF INTEREST WITHOUT ANY TAX DEDUCTION. BUT, HOWEVER, THE AO THEREIN DOUBTIN G THE VERSION OF THE ASSESSEE THAT HE OBTAINED DECLARATIONS FROM THE PAY EES DISALLOWED THE INTEREST BY INVOKING THE SECTION 40(A)(IA) OF THE A CT. THE CO-ORDINATE BENCH FURTHER OBSERVED AND HELD TO FILE DECLARATIONS GIVE N TO HIM BY THE PAYEES OF THE INTEREST WITHIN THE TIME LIMIT SPECIFIED IS, A FAILURE ON THE PART OF THE ASSESSEE TO SUBMIT THE DECLARATIONS TO THE REVENUE WITHIN THE TIME LIMIT, IT CANNOT BE SAID THAT THE ASSESSEE DID NOT HAVE DECLA RATIONS WITH HIM AT THE TIME WHEN HE PAID THE INTEREST TO THE PAYEES. THERE FORE, WE FIND THAT THE AO IN THE PRESENT CASE AS DISCUSSED ABOVE DOUBTED THE DECLARATIONS UNDER FORM 15 I FILED BY THE ASSESSEE DURING THE ASSESSMENT PR OCEEDING AFFECTED DISALLOWANCE THEREON. THUS THE FACTS IN THE CASE OF VIPIN P. MEHTA SUPRA AND THE LAW LAID DOWN THEREON ARE APPLICABLE TO THE PRE SENT FACTS AND CIRCUMSTANCES OF THE CASE. ACCORDINGLY, GROUNDS NO S 1 TO 3 INVOLVING THE ISSUE ARE ALLOWED. 11. GROUND NO-4 REGARDING THE DISALLOWANCE OF RS. 4 5,250/- IN RESPECT OF THE TELEPHONE CHARGES. THE ASSESSING OFFICER DISALL OWED THE SAME AS NO EVIDENCE PRODUCED IN RESPECT OF TELEPHONE CHARGES. THE CIT-A FOUND THE ORDER OF AO IS JUSTIFIED AND SUSTAINED THE DISALLOW ANCE AS MADE BY THE A.O. ITA NO. 1481/KOL/2016 IND ER CHAND AGARWAL (HUF) 6 12. BEFORE US, THE LD.AR THAT THE ASSESSEE MAINTAIN ED TELEPHONE FOR FACILITATING COMMUNICATION FOR ITS BUSINESS PURPOSE AND INCURRED EXPENSES RS. 90,250/- OUT OF WHICH THE TELEPHONE CHARGES TO THE EXTENT OF RS. 45,250/- BEING REIMBURSEMENT TO THE EMPLOYEES AS TH EY COMMUNICATE WITH THE ASSESSEE THROUGH THEIR PERSONAL TELEPHONES GIVI NG THE INPUTS IN THE BUSINESS AND THEREBY SAID EXPENSES WERE REIMBURSED BY THE ASSESSEE. THE LD.AR RELIED ON A DECISION IN THE CASE OF I.T.O. -V S- MGB TRANSPORT REPORTED IN (2013) 143 ITD 564 (KOL) AND ARGUED THA T NO AD HOC DISALLOWANCE IS SUSTAINED ON THE EXPENSES CLAIMED O N PETTY IN NATURE FOR WHICH SUPPORTING EVIDENCE WERE NOT READILY AVAILABL E ACCOUNT OF 'REPAIR & MAINTENANCE', 'RENT', 'ROAD TAX & PERMIT', 'INSURAN CE', 'LABOUR CHARGES' AND 'TELEPHONE'. FURTHER, THE LD.AR SUBMITS THAT NO DIS ALLOWANCE ON CONVEYANCE EXPENSES IS MAINTAINABLE IF THEY WERE UNVOUCHED AND RELIED ON THE DECISION OF [BETA NAPTHOL P. LID -VS- D.C.I.T. (1994) 50 TTJ (IND) 375] IT WAS HELD THAT SUCH ACTION WAS NOT PROPER. THE LD.AR ARG UED THAT THE ASSESSING OFFICER OUGHT TO HAVE CONSIDERED THE OBJECTIVITY OF EXPENSES TO ITS FAIRNESS, REASONABLENESS AND WHETHER IT IS COMMENSURATE WITH THE BUSINESS OF THE ASSESSEE OR NOT, BOTH AS REGARDS VOLUME AS WELL THE NATURE OF BUSINESS AND RELIED ON THE DECISION OF RAJ ENTERPRISES - VS - I .T.O (1995) 51 TTJ (JP) 408 AND SUBMITTED THAT NO AD HOC DISALLOWANCE WITHO UT ANY COGENT REASONS ARE UNSUSTAINABLE. THE LD.DR SUPPORTED THE ORDER OF AO AND CIT-A. 13. IN THE PRESENT CASE, AS THERE IS NO DISPUTE THA T THE ASSESSEE COULD PRODUCE VOUCHERS SUPPORTING THE AMOUNT OF EXPENDITU RE FOR THE AMOUNT OF RS. 45,000/- ONLY AND ADMITTED, ACCORDING TO AO, TH AT NO BILL INVOLVING RS.45,250/ COULD BE PRODUCED. THE ASSESSEE CLAIMED THE ENTIRE EXPENSE CLAIMED UNDER THE HEAD 'TELEPHONE' WHICH WAS INCURR ED FOR WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS AND SOME P ART OF SAID EXPENDITURE WERE REIMBURSED TO ITS EMPLOYEES FOR WHICH THE ASSE SSEE ADMITTED THAT NO BILLS COULD BE FURNISHED. BUT, HOWEVER, THE LD.AR O F THE ASSESSEE ARGUED THAT THE DISALLOWANCE IN RESPECT OF TELEPHONE BILLS BEIN G NOT PRODUCED MAY BE REASONABLE AT 10%. IN VIEW OF THE SAME, WE RESTRICT THE SAME AT 10% OF ITA NO. 1481/KOL/2016 IND ER CHAND AGARWAL (HUF) 7 RS.45,250 I.E. RS.4,525/- AND ACCORDINGLY, THE ORDE R OF THE CIT-A IS MODIFIED WITH THE DIRECTION TO THE AO TO RESTRICT THE SAME. THUS, GROUND RAISED BY THE ASSESSEE IN THIS REGARD IS PARTLY ALLOWED. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON 31-01-2017 SD/- SD/- M. BALAGANESH S.S.VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 31 -01-2017 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT/ASSESSEE: M/S. INDER CHAND AGARWAL (HUF) C/O S.N.GHOSH & ASSOCIATES. ADVOCATES, SEVEN BROTHERS LODGE, P.O BURHOSHIBTALA, P.S CHINSURAH, DIST HOOGHLY, PIN 712105 2 RESPONDENT/DEPARTMENT : INCOME TAX OFFICER W 45(3) , INCOME TAX OFFICE 3 GOVT PLACE (W), GROUND FLOOR, R OOM NO.19, KOLKATA-700 001. 3. CIT, 4. CIT(A), 5. DR, KOLKATA BENCHES, KOLKATA **PP/SPS [ TRUE COPY] BY ORDER, ASSTT REGISTRAR