Binod Kumar Goenka, Kolkata V. ACIT, CIR-45, KOLKATA, Kolkata

ITA 1651/KOL/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4120 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 17-08-2016
• Court: TRIBUNAL
• Assessee Lawyers: A K TIBREWAL FCA LD
• Keywords: Business expenditure; Bad and doubtful debts; Corroborative evidences
• Section: 143(3); 133(6); 37; 12; 28; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOL KATA [BEFORE SHRI M. BALAGANESH, AM & SHRI S.S.VISWANET HRA RAVI, JM] I.T.A NO.1651/KOL/2016 ASSESSMENT YEAR: 2010-11 BINOD KUMAR GOENKA VS. ASSISTANT COMMISSIONER O F INCOME-TAX, (PAN: ACZPG7855L) CIRCLE-45, KOLKATA. ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 25.11.2016 DATE OF PRONOUNCEMENT: 02.12.2016 FOR THE APPELLANT: SHRI A. K. TIBREWAL, FCA, LD. AR FOR THE RESPONDENT: SHRI SALLONG YADEN, ADDL. CI T ORDER PER SHRI M. BALAGANESH, AM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-13, KOLKATA VIDE APPEAL NO. 736/CIT(A)-13/KOL/CIR-45/2014-15 DATED 31.05.20 16. ASSESSMENT WAS FRAMED BY ACIT, CIRCLE-45, KOLKATA U/S. 143(3) OF THE INCOME- TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2010-11 VIDE HIS ORD ER DATED 19.03.2013. 2. THE FIRST ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) IS JUSTIFIED IN UPHOLDING THE ADDITION MADE IN THE SUM OF RS.13, 48,178/- ON ACCOUNT OF ALLEGED DIFFERENCE IN OPENING BALANCE OF TRANSACTIONS ENTER ED WITH IDEAL TEXTILES IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESSEE I S AN INDIVIDUAL FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING AND ENGAGED IN THE BUSINESS OF MANUFACTURING AND DEALING OF ALL KINDS OF YARN AND FABRICS. THE LD AO CATEGORICALLY STATE D THAT THE ASSESSEE HAD PRODUCED VARIOUS DETAILS, BOOKS OF ACCOUNT, BANK STATEMENT, BILLS, V OUCHERS, EXPLANATIONS, RECONCILIATION STATEMENT AND OTHER SUPPORTING EVIDENCE PERTAINING TO THE ASSESSMENT PROCEEDINGS. THE LD AO ISSUED NOTICE U/S. 133(6) OF THE ACT TO VARIOUS PARTIES LIKE SUNDRY DEBTORS, SUNDRY CREDITORS OF THE ASSESSEE AND THE REPLIES FROM MOST OF THE PARTIES HAVE BEEN RECEIVED DIRECTLY BY THE LD AO. ONE SUCH PARTY, VIZ., M/S. IDEAL TEX TILES HAD ALSO SUBMITTED THE LEDGER ACCOUNT DIRECTLY TO THE LD AO WHEREIN THE LD AO FOU ND THAT THE OPENING BALANCE IN THE SAID PARTY ACCOUNT WAS STATED TO BE RS. NIL AS AGAINST R S.13,48,178/- SHOWN BY THE ASSESSEE IN HIS BOOKS OF ACCOUNT. THE ASSESSEE WAS ASKED TO RECONC ILE THE SAID DIFFERENCE DURING THE COURSE 2 ITA NO.1651/KOL/2016 BINOD KUMAR GOENKA AY 2010-11 2 OF ASSESSMENT PROCEEDINGS. THE ASSESSEE REPLIED TH AT A PARTICULAR PURCHASE BILL AMOUNTING TO RS.13,48,178/- WAS ACCOUNTED BY THE ASSESSEE ON 12. 01.2009 WHICH FALLS IN THE IMMEDIATE PRECEDING PREVIOUS YEAR RELEVANT TO AY 2009-10 WHIC H HAS NOT BEEN CONSIDERED BY THE CONCERNED PARTY M/S. IDEAL TEXTILES, WHICH HAD ADMI TTEDLY LED TO THE DIFFERENCE OF THE SAID SUM IN THE OPENING BALANCE. IT WAS PLEADED THAT TH E BALANCE SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT IS CORRECT. THE LD AO, HOWEVER, D ID NOT PAY ANY HEED TO THE CONTENTION OF THE ASSESSEE AND PROCEEDED TO MAKE ADDITION OF RS.1 3,48,178/- ON THE GROUND THAT THE ASSESSEE WAS NOT ABLE TO RECONCILE THE DIFFERENCE I N THE OPENING BALANCE AND COMPLETED THE ASSESSMENT ACCORDINGLY. THIS ACTION OF THE LD AO W AS UPHELD BY THE LD. CIT(A) IN FIRST APPEAL. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFOR E US ON THE FOLLOWING GROUND NO.1: 1. THAT THE LD. CIT(A)-13, KOLKATA ERRED IN ARBIT RARILY CONFIRMING THE ADDITION OF RS.13,48,178/- MADE BY THE ASSESSING OFFICER ON ACC OUNT OF ALLEGED DIFFERENCE IN THE OPENING BALANCE OF THE TRANSACTIONS ENTERED WITH M/S. IDEAL TEXTILES. 4. THE LD. AR ARGUED THAT FIRST OF ALL THERE CANNO T BE ANY ADDITION THAT COULD BE MADE BY THE LD AO ON THE ALLEGED DIFFERENCE IN OPENING B ALANCE IN THE SUM OF RS.13,48,178/- DURING THE YEAR UNDER APPEAL. THE SECOND LINE OF A RGUMENT WAS THE ENTIRE BOOKS OF ACCOUNT TOGETHER WITH THE BILLS AND VOUCHERS WERE PRODUCED WITH PROPER EXPLANATION THEREOF BEFORE THE LD AO WHICH WERE NOT REJECTED BY THE LD AO. HE ALSO ARGUED THAT THE DIFFERENCE AROSE DUE TO ONE PURCHASE BILL WHICH HAS BEEN ACCOUNTED F OR BY THE ASSESSEE IN AY 2009-10 ITSELF AS IT WAS PURCHASED ON 12.01.2009, WHICH PROBABLY M IGHT NOT HAVE BEEN ACCOUNTED FOR BY THE SAID PARTY M/S. IDEAL TEXTILES IN THEIR BOOKS O F ACCOUNT. IT WAS ALSO ARGUED THAT THIS WAS SPECIFICALLY BROUGHT TO THE NOTICE OF THE LD AO DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS. IN SUPPORT OF THIS ARGUMENT, HE ALSO DREW THE ATTENTION TO PAGE NO. 1 OF THE ASSESSEES PAPER BOOK CONTAINING THE INVOICE GIVEN BY M/S. IDEAL TEXTILE DATED 12.01.2009 TO THE ASSESSEE FOR SUPPLY OF 100% NATURAL SILK FAB RICS TO THE EXTENT OF 5185.30 METERS VALUED AT RS.13,48,178/-. HE ALSO DREW THE ATTENTIO N OF THE BENCH TO THE LEDGER ACCOUNT OF THE SAID PARTY M/S. IDEAL TEXTILES WITH WHOM THE AS SESSEE HAS BOTH PURCHASE AS WELL AS SALE TRANSACTION WHEREIN THIS BILL AMOUNT OF RS.13,48,17 8/- HAD BEEN DULY ACCOUNTED FOR BY THE ASSESSEE AS PURCHASE ON 12.01.2009 ITSELF. HIS THI RD LINE OF ARGUMENT WAS AS TO HOW THE LD AO ASSUMED THAT THE BALANCE REFLECTED BY THE SAID P ARTY M/S. IDEAL TEXTILES IS FOUND TO BE 3 ITA NO.1651/KOL/2016 BINOD KUMAR GOENKA AY 2010-11 3 CORRECT AND HOW THE SAME AS DISCLOSED BY THE ASSESS EE WAS INCORRECT. THE ASSESSEE HAD GIVEN PROPER EXPLANATIONS BEFORE THE LD AO WITH REG ARD TO THE SAID DIFFERENCE IN OPENING BALANCE AND IN SUCH A SCENARIO, THE LD AO OUGHT TO HAVE PRODUCED THE SAID PARTY M/S. IDEAL TEXTILES AS HIS WITNESS FOR CROSS EXAMINATION BY TH E ASSESSEE WHICH COULD HAVE BROUGHT THE TRUTH WITH REGARD TO OMISSION OF AN ENTRY BY THE SA ID PARTY ON RECORD. HE FURTHER PLACED RELIANCE ON THE DECISION OF AHMEDABAD TRIBUNAL IN T HE CASE OF ACIT VS. PRABHAT OIL MILLS LTD. (1995) 52 TTJ 533 (AHD.) IN SUPPORT OF HIS CON TENTIONS. IN RESPONSE TO THIS, THE LD. DR VEHEMENTLY RELIED ON THE ORDERS OF THE LOWER AUTHOR ITIES. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE INCLUDING THE PAPER BOOK FILED BY THE ASSESSEE . THE FACTS STATED HEREINABOVE REMAIN UNDISPUTED AND HENCE THE SAME ARE NOT REITERATED FO R THE SAKE OF BREVITY. IT IS NOT IN DISPUTE BEFORE US THAT THE ASSESSEE HAD PRODUCED ALL THE DE TAILS WITH SUPPORTING EVIDENCE IN THE FORM OF BILLS AND VOUCHERS BEFORE THE LD AO. IT IS NOT IN DISPUTE BEFORE US THAT LEDGER ACCOUNT FROM IDEAL TEXTILES WAS OBTAINED BY THE LD AO U/S. 133(6) OF THE ACT WHEREIN THE LD AO FOUND THAT THERE WAS A DIFFERENCE IN OPENING BALANC E OF RS.13,48,178/- AS COMPARED TO THAT OF THE ASSESSEE. WE FIND THAT IN ANY CASE, THERE C ANNOT BE ANY ADDITION THAT COULD BE MADE IN THE YEAR UNDER APPEAL TOWARDS THE DIFFERENCE IN OPE NING BALANCE. HENCE, THE ADDITION DESERVES TO BE DELETED ON THAT ACCOUNT ITSELF. WE ALSO FIND THAT THE DECISION RELIED ON BY THE LD. AR IN THE CASE OF PRABHAT OIL MILLS LTD., SUPRA IS VERY WELL FOUNDED WHEREIN IT WAS HELD THAT MERE ENTRIES IN THE ACCOUNTS OF A THIRD PARTY WAS NOT SUFFICIENT TO PROVE THAT THE ASSESSEE HAD INDULGED IN SUCH TRANSACTION AS THERE WAS NO GU ARANTEE THAT THE ENTRIES WERE GENUINE. THEY ALSO PLACED RELIANCE ON THE DECISION OF THE HO NBLE BOMBAY HIGH COURT IN THE CASE OF ADDL. CIT VS. LATA MANGESKAR REPORTED IN (1974) 97 ITR 693 (BOM) IN SUPPORT OF THEIR SUBMISSION. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT IN ANY CASE THERE CANNOT BE ANY ADDITION MADE TOWARDS THE DIFFERENCE OF RS.1 3,48,178/- AND HENCE, WE HAVE NO HESITATION TO DELETE THE SAME. ACCORDINGLY, WE DIR ECT THE LD AO TO DELETE THE ADDITION. THIS GROUND OF APPEAL OF ASSESSEE IS ALLOWED. 4 ITA NO.1651/KOL/2016 BINOD KUMAR GOENKA AY 2010-11 4 6. THE SECOND ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) IS JUSTIFIED IN UPHOLDING THE DISALLOWANCE OF RS.2,99, 975/- WRITTEN OFF AS IRRECOVERABLE BY THE ASSESSEE IN RESPECT OF UNREALIZED TRADE ADVANCE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. BRIEF FACTS OF THE ISSUE IS THAT THE ASSESSEE HA D MADE PAYMENT TO M/S. XINYUAN COCOON SILK GROUP CO. LTD. TOWARDS IMPORT OF SILK Y ARN AND SILK FABRICS AND AS PER THE PRACTICE, THE ASSESSEE WAS MAKING ADVANCE PAYMENT T O THE SAID PARTY AGAINST WHICH SUPPLIES WERE MADE BY THE PARTY TO THE ASSESSEE. THERE WAS A BALANCE OUTSTANDING OF RS.2,99,975/- AS ON 31.03.2007 FROM THE SAID PARTY AND EVEN AFTER THAT THE ASSESSEE WAS HAVING REGULAR TRADING TRANSACTIONS BY MAKING ADVANCE PAYMENTS IN THE COURSE OF BUSINESS AND OBTAINING THE SUPPLIES AGAINST SUCH ADVANCES UP TO 30.06.2009 . THE ASSESSEE ON 30.06.2009 THOUGHT IT FIT THAT SINCE NO SUPPLY OF GOODS WAS FORTHCOMING F OR THE ADVANCE PAID IN THE FY 2006-07 AND WHICH WAS REMAINING OUTSTANDING IN THE SUM OF R S.2,99,975/- AND IN VIEW OF THE LONG STANDING RELATIONSHIP HE HAD WITH THE CONCERNED SUP PLIER AND ALSO KEEPING IN MIND THE FUTURE BUSINESS INTEREST AND CONTINUED RELATIONSHIP WITH T HE SAID PARTY, THOUGHT IT FIT TO WRITE OFF THE SAID SUM OF RS.2,99,975/- AS IRRECOVERABLE ADVA NCE AND TREATED THE SAME AS LOSS INCIDENTAL TO THE BUSINESS DURING THE COURSE OF ITS TRADE. IN OTHER WORDS, THE ASSESSEE WROTE OFF A SUM OF RS.2,99,975/- AS IRRECOVERABLE AND CRE DITED THE CONCERNED PARTYS ACCOUNT IN HIS BOOKS OF ACCOUNT ON 30.06.2009 AND CLAIMED THE SAME AS DEDUCTION TOWARDS BAD DEBTS. THE LD AO OBSERVED THAT NO INCOME IN TERMS OF SECTION 3 6(2) OF THE ACT WAS OFFERED BY THE ASSESSEE IN RESPECT OF THE SUBJECT MENTIONED TRANSA CTION AND ACCORDINGLY, ASSESSEE IS NOT ENTITLED FOR DEDUCTION U/S. 36(1)(VII) OF THE ACT. THIS ACTION OF THE LD AO WAS UPHELD BY THE LD. CIT(A) IN FIRST APPEAL. AGGRIEVED, THE ASSESSE E IS IN APPEAL BEFORE US ON THE FOLLOWING GROUND NOS. 2 AND 3: 2. THAT THE LD. CIT(A)-13, KOLKATA ERRED IN ARBITR ARILY CONFIRMING THE DISALLOWANCE OF RS.2,99,975/- CLAIMED BY THE APPELLANT ASSESSEE AS BAD DEBTS IN RESPECT OF UNREALIZED ADVANCES RELATING TO BUSINESS TRANSACTIONS. 3. THAT THE LD. CIT(A)-13, KOLKATA ERRED IN ARBITRA RILY CONFIRMING THE DISALLOWANCE OF RS.2,99,975/- WITHOUT APPRECIATING THT THE SAME SHO ULD HAD BEEN ALLOWED AS LOSS INCIDENTAL TO BUSINESS UNDER SECTION 28 READ WITH SECTION 37 OF T HE INCOME TAX ACT, 1961. 5 ITA NO.1651/KOL/2016 BINOD KUMAR GOENKA AY 2010-11 5 8. THE LD. AR ARGUED THAT THE SAID LOSS OF RS.2,99, 975/- HAD AROSE AS A LOSS INCIDENTAL TO THE BUSINESS DUE TO IRRECOVERABLE ADVANCE PAID TO A PARTY DURING THE COURSE OF BUSINESS OF THE ASSESSEE. THE VERY FACT THAT THE ASSESSEE CHOS E TO CREDIT THE PARTYS ACCOUNT PROVES THAT DESPITE THE BEST EFFORTS OF THE ASSESSEE TO RECOVER THE SAID SUM EITHER IN CASH OR IN KIND THE ASSESSEE HAD TREATED THE SAME AS IRRECOVERABLE IN H IS BOOKS OF ACCOUNT AND BY WRITING OFF THE SAME IT BECOMES LOSS INCIDENTAL TO THE BUSINESS OF THE ASSESSEE AND ACCORDINGLY, ELIGIBLE FOR DEDUCTION U/S. 28 OF THE ACT. IN SUPPORT OF HIS CON TENTION, HE PLACED RELIANCE ON A DECISION OF COORDINATE BENCH OF THIS TRIBUNAL IN ITO VS. SHREE GOURI SHANKAR JUTE MILLS LTD. IN ITA NO. 1185/KOL/2012 DATED 08.10.2015. ON THE OTHER H AND, THE LD. DR VEHEMENTLY RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 9. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE INCLUDING THE PAPER BOOK CONTAINING THE COMPLE TE LEDGER ACCOUNT OF M/S. XINYUAN COCOON SILK GROUP CO. LTD. IN THE BOOKS OF THE ASSE SSEE FOR THE PERIOD 01.04.2006 TO 31.03.2010. WE FIND THAT THE ADVANCES WERE MADE BY THE ASSESSEE DURING THE COURSE OF HIS REGULAR BUSINESS AND ADMITTEDLY THE SAID PAYMENTS W ERE MADE IN THE NATURE OF TRADE ADVANCES. WE FIND FROM THE LEDGER ACCOUNT THAT THE SAID SUM OF RS.2,99,975/- WAS OUTSTANDING FROM 31.03.2007 ONWARDS AND THE ASSESSE E HAVE HAD CONTINUOUS BUSINESS TRANSACTION WITH THE SAID PARTY UP TO 30.06.2009 UP TO WHICH POINT OF TIME THIS ADVANCE OF RS.2,99,975/- COULD NOT BE RECOVERED EITHER IN CAS H OR IN KIND BY THE ASSESSEE FROM THE SAID PARTY. THE ASSESSEE DEEMED IT FIT TO WRITE OFF THE SAME AS IRRECOVERABLE IN HIS BOOKS OF ACCOUNT BY CREDITING THE CONCERNED PARTYS ACCOUNT ON 30.06.2009 AND CLAIMED THE SAME AS LOSS INCIDENTAL TO BUSINESS. ADMITTEDLY, THE ASSES SEE IN THE INSTANT CASE IS NOT ELIGIBLE FOR DEDUCTION U/S. 36(1)(VII) OF THE ACT AS NO INCOME R ESPECT OF THE SAID TRANSACTION HAS BEEN OFFERED BY THE ASSESSEE U/S. 36(2) OF THE ACT. HOW EVER, WE FIND THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S. 28 OF THE ACT AS THE SAID LOSS I N RESPECT OF UNREALIZED ADVANCE IS ONLY INCIDENTAL LOSS ARISING OUT OF THE BUSINESS IN VIEW OF NON MATERIALIZATION OF THE SUPPLIES OUT OF SUCH ADVANCE PAID BY THE ASSESSEE. WE FIND THAT THE RELIANCE PLACED BY THE LD. AR ON THE COORDINATE BENCH DECISION IN THE CASE OF SHREE GOUR I SHANKAR JUTE MILLS LTD., SUPRA IS VERY WELL FOUNDED WHICH IN TURN PLACED RELIANCE ON THE D ECISION OF HONBLE SUPREME COURT IN CIT VS. MYSORE SUGAR CO. LTD. REPORTED IN (1962) 46 ITR 649 (SC) AND THE DECISION OF 6 ITA NO.1651/KOL/2016 BINOD KUMAR GOENKA AY 2010-11 6 HONBLE BOMBAY HIGH COURT IN THE CASE OF HARSHAD J. CHOKSI VS. CIT REPORTED IN (2012) 25 TAXMANN.COM 567 (BOM). 10. RESPECTFULLY FOLLOWING THE AFORESAID DECISIONS AND IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE HOLD THAT THE WRITE OFF OF UNREALIZED ADVANCE OF RS.2,99,975/- WHICH WERE GIVEN IN THE NORMAL COURSE OF TRADE BY THE ASSESSEE IS AL LOWABLE AS DEDUCTION AS TRADING LOSS U/S. 28 OF THE ACT. ACCORDINGLY, THE GROUND NO. 2 RAISED B Y THE ASSESSEE IS DISMISSED AND GROUND NO. 3 RAISED BY THE ASSESSEE IS ALLOWED. 11. THE LAST ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) IS JUSTIFIED IN UPHOLDING THE DISALLOWANCE OF POOJA EXPENSES IN THE SUM OF RS.12,776/- IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 12. BRIEF FACTS OF THIS ISSUE ARE THAT THE LD AO FO UND THAT THE ASSESSEE DEBITED A SUM OF RS.12,776/- UNDER THE HEAD POOJA EXPENSES WHICH WER E INCURRED FOR CONDUCTING WEEKLY POOJA IN OFFICE AND ON VARIOUS AUSPICIOUS OCCASIONS . THE LD AO DISALLOWED THE SAME IN THE ASSESSMENT WHICH WAS ALSO UPHELD BY THE LD. CIT(A) IN FIRST APPEAL. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GR OUND: 4. THAT THE LD. CIT(A)-13, KOLKATA ERRED IN ARBIT RARILY CONFIRMING THE DISALLOWANCE OF THE PUJA EXPENSES OF RS.12,776/- IN COMPLETE DISREGARD OF THE FACTS OF THE CASE AND IN CONTRAVENTION OF THE CIRCULAR NO. 13/A/20/68-IT(A-I I) DATED 3.10.1968 ISSUED BY CBDT IN THIS REGARD. 13. THE LD. AR PLACED RELIANCE ON THE CBDT CIRCULAR NO. 17(F.NO.27(2)-IT/43) DATED 06.05.1943 AND ACCORDINGLY PRAYED THAT THE SAID SUM IS ALLOWABLE AS A DEDUCTION. IN RESPONSE TO THIS, THE LD. DR VEHEMENTLY RELIED ON T HE ORDERS OF THE LOWER AUTHORITIES. 14. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND NO REASONING WHATSOEVER HAS BEEN GIV EN BY THE LD AO FOR DISALLOWING THE SUM OF RS.12,776/- AS POOJA EXPENSES IN THE ASSESSM ENT. WE ALSO FIND THAT THE SAID SUM IS SQUARELY ALLOWABLE AS DEDUCTION IN THE LIGHT OF THE CIRCULAR RELIED ON BY THE LD. AR, SUPRA, WHICH READS AS UNDER: 7 ITA NO.1651/KOL/2016 BINOD KUMAR GOENKA AY 2010-11 7 IT HAS BEEN REPRESENTED TO THE BOARD THAT CUSTOMA RY PAYMENTS IN RESPECT OF DEEPAWALI (OR DEWALI) AND MAHURAT (I.E., THE AUSPICIOUS DAY OF ST ARTING NEW ACCOUNTS) WHICH LONG USAGE AND CUSTOM HAVE MADE IT OBLIGATORY FOR A BUSINESS TO IN CUR, SHOULD BE ALLOWED AS A DEDUCTION IN COMPUTING THE INCOME UNDER SECTIONS 10 AND 12 OF TH E 1922 ACT. THE BOARD UNDERSTAND THAT SUCH EXPENSES ARE GENERALLY OF THE NATURE OF ADVERT ISEMENT WITH A VIEW TO THE SECURING OF NEW BUSINESS AND THAT THOUGH VARYING ACCORDING TO THE N ATURE AND EXTENT OF THE BUSINESS, THE MAXIMUM EXPENDITURE IS ABOUT RS. 200 ON DEEPAWALI O R MUHURAT. THE BOARD CONSIDER THAT SINCE THESE EXPENSES ARE NOT OF A PERSONAL, SOCIAL OR RELIGIOUS NATURE BUT ARE EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF THE BUSINESS, T HEY SHOULD BE ALLOWED AS BUSINESS EXPENDITURE PROVIDED THAT THE EXPENDITURE IN QUESTI ON DOES NOT EXCEED THE MAXIMUM AMOUNT SPECIFIED ABOVE. 15. RESPECTFULLY FOLLOWING THE SAME, WE ALLOW GROUN D NO. 4 OF ASSESSEES APPEAL. 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 02.12.2016 SD/- SD/- (S.S.VISWANETHRA RAVI) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 2 ND DECEMBER, 2016 JD. SR. P.S COPY OF THE ORDER FORWARDED TO: 1. APPELLANT SHRI BINOD KUMAR GOENKA, C/O V. N. SARA F & CO., P-1, NEW HOWRAH BRIDGE, APPROACH ROAD, 2 ND FLOOR, ROOM NO. 1A/3, KOLKATA-700 001. 2. RESPONDENT ACIT, CIRCLE-45, KOLKATA. 3. CIT(A), KOLKATA 4. CIT, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .