ACIT, Circle - 3, Asansol V. M/s. Allied Construction Co.(Firm), Purulia

ITA 1658/KOL/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48260 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2011
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 23-06-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 23-09-2009
• Court: TRIBUNAL
• Department Lawyers: S K ROY
• Assessee Lawyers: MANISH TIWARI
• Keywords: TDS
• Section: 40A(3); 40(a)(ia); 133(6); 194C

Judgement Text

1 , C , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- C , KO LKATA [ . . . . . . . . , ,, , . . . . . .. . !' !' !' !' , # ] BEFORE SHRI B.R.MITTAL, JUDICIAL MEMBER & SRI S.V.MEHROTRA, ACCOUNTANT MEMBER $ $ $ $ / ITA NO. 1658 (KOL) OF 2009 %&' () / ASSESSMENT YEAR 2005-06 ASSTT.COMMISSIONER OF INCOME-TAX, CIRCLE-3, ASANSOL. M/S. ALLIED CONSTRUCTION CO., ASANSOL. (PAN-AAJFA6175P) (,- / APPELLANT ) - & - - VERSUS - (01,-/ RESPONDENT ) ,- 2 3 / FOR THE APPELLANT: / SRI S.K. ROY 01,- 2 3 / FOR THE RESPONDENT: / SRI MANISH TIWARI 4 / ORDER ( . . . . . . . . ), (B.R.MITTAL), JUDICIAL MEMBER : THE DEPARTMENT HAS FILED THIS APPEAL AGAINST THE ORDER OF LD. C.I.T.(A), ASANSOL, DATED 10/07/2009 FOR ASSESSMENT YEAR 2005-06 ON THE FOLLOWING GROUNDS :- 1. WHETHER LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITIONS RS.21,296/- U/S. 40A(3) & RS.4,55,844/- ON ACCOUNT OF MATERIAL CONSUMED MAD E BY THE ASSESSING OFFICER ON THE BASIS OF FACTS AND CIRCUMSTANCES OF THE CASE AN D MATERIALS AVAILABLE ON RECORD. 2. WHETHER LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.13,34,752/- U/S. 40(A)(IA) MADE BY THE ASSESSING OFFICER ON THE BASI S OF FACTS AND CIRCUMSTANCES OF THE CASE AND MATERIALS AVAILABLE ON RECORD. 3. WHETHER LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.66,153/- ON ACCOUNT OF REPAIRS, RS.48,633/- ON ACCOUNT OF INTEREST OF I .T. REFUND AND RS.32,804/- ON ACCOUNT OF BUSINESS PROMOTION MADE BY THE ASSESSING OFFICER ON THE BASIS OF FACTS AND CIRCUMSTANCES OF THE CASE AND MATERIALS AVAILAB LE ON RECORD. 2. FIRST DISPUTE BY THE REVENUE IN GROUND NO.1 ABO VE IS AGAINST DELETION OF ADDITION OF RS.21,296/- BY LD. C.I.T.(A), WHICH WAS MADE BY A.O. U/S. 40A(3) OF THE ACT. ON VERIFICATION OF PAYMENTS MADE BY THE ASSESSEE UNDER THE HEAD TRANSPORT CHARGES, THE A.O. OBSERVED THAT CASH PAYMENTS EXCEEDING RS.20,00 0/- IN THE AGGREGATE SUM OF RS.1,06,480/- WERE MADE BY THE ASSESSEE IN VIOLATIO N OF SEC. 40A(3) OF THE ACT. HE, 2 THEREFORE, DISALLOWED 20% OF SUCH AGGREGATE PAYMENT OF RS.1,06,480/- U/S. 40A(3) OF THE ACT, WHICH CAME TO RS.21,296/-. ON APPEAL, LD. C.I.T.(A) CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND ALSO PLACING RELIAN CE ON SEVERAL DECISIONS CITED BY THE ASSESSEE HELD THAT THE SAID CASH PAYMENTS WERE MADE FOR BUSINESS EXPEDIENCY AND AS SUCH ADMISSIBLE AS PER CLAUSE (J) OF RULE 6DD OF I. T. RULES. HE, THEREFORE, DELETED THE ADDITION OF RS.21,296/- MADE BY THE A.O. U/S. 40A(3 ) OF THE ACT. 2.1. WE HAVE HEARD THE PARTIES AND PERUSED MATERIA LS AVAILABLE ON RECORD. THE ASSESSEE ADMITTEDLY HAD MADE PAYMENTS EXCEEDING RS. 20,000/-, DETAILS OF WHICH ARE GIVEN AT PAGE-2 OF LD. C.I.T.(A)S ORDER. HOWEVER, AT THE TIME OF HEARING LD. A/R SUBMITTED THAT PAYMENTS WERE MADE TO THE TRANSPORTE R IN REMOTE AREAS AS THE ASSESSEE IS ENGAGED IN THE BUSINESS OF EXECUTION OF CONTRACT WO RK. THEREFORE, THE SAID PAYMENTS WERE FOR BUSINESS EXIGENCY AND FELL UNDER CLAUSE (J ) OF RULE 6DD OF THE RULES. THE ABOVE SUBMISSION OF LD.A/R, IN OUR CONSIDERED OPINI ON, CANNOT TAKE OUT THE APPLICABILITY OF PROVISIONS OF SEC. 40A(3) OF THE ACT FOR MAKING DISALLOWANCE @ 20% OF THE CASH PAYMENTS. RULE 6DD OF THE RULES PROVIDES EXCEPTIONS TO GIVE EXEMPTION OF APPLICABILITY OF SEC. 40A(3) OF THE ACT. CLAUSE (J ) OF THE SAID RULE PROVIDES THAT NO DISALLOWANCE U/S. 40A(3) OF THE ACT SHALL BE MADE W HERE THE PAYMENT WAS REQUIRED TO BE MADE ON A DAY ON WHICH THE BANKS WERE CLOSED EIT HER ON ACCOUNT OF HOLIDAY OR STRIKE. ADMITTEDLY, IN THE ASSESSEES CASE, TWO PAYMENTS WE RE MADE ON 05/4/2004 AND ONE PAYMENT ON 29/5/2004 AND IT IS NOT DISPUTED THAT TH ESE DATES DO NOT FALL EITHER ON SUNDAY OR ANY OTHER CLOSED HOLIDAY OF THE BANKS. BESIDES A BOVE, ASSESSEES CASE DOES NOT FALL IN ANY OF THE CLAUSES OF RULE 6DD OF THE RULES. IN VIE W OF ABOVE, WE REVERSE THE ORDER OF LD. C.I.T.(A) AND CONFIRM THE ADDITION OF RS.21,296 /- MADE BY THE A.O. U/S. 40A(3) OF THE ACT. THIS PART OF GROUND NO.1 OF THE REVENUES APPEAL IS ALLOWED. 2.2. THE OTHER LIMB OF GROUND NO.1 OF THE REVENUE S APPEAL IS AGAINST DELETION OF ADDITION OF RS.4,55,844/- ON ACCOUNT OF MATERIAL CO NSUMED. THE A.O. OBSERVED THAT A SUM OF RS.2,27,92,200/- WAS DEBITED TO THE P/L ACCO UNT OF THE ASSESSEE UNDER THE HEAD MATERIAL CONSUMED. THE A.O. ISSUED NOTICES U/S. 133(6) OF THE ACT TO DIFFERENT SUPPLIERS AT THEIR ADDRESSES PROVIDED BY THE ASSESS EE AND SOME OF THEM DID NOT COMPLY WITH THE SAID NOTICE. THE A.O., THEREFORE, PRESUMED PROBABILITY OF INFLATED EXPENDITURE 3 DUE TO NON-VERIFICATION OF THE SAME AND THUS DISALL OWED ON ESTIMATE BASIS 2% OF THE MATERIAL CONSUMED OF RS.2,727,92,200/-, WHICH CAME TO RS.4,55,844/-, AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 2.3. DURING THE COURSE OF APPELLATE PROCEEDINGS, LD . C.I.T.(A) CALLED FOR REMAND REPORT FROM A.O. AND SEVERAL REMINDERS WERE ALSO ISSUED TO THAT EFFECT. THE A.O. WAS ALSO DIRECTED TO CONDUCT ENQUIRY U/S. 250(4) OF THE ACT AND TO FURNISH REMAND REPORT. ACCORDING TO LD. C.I.T.(A), THE A.O. FAILED TO FURN ISH REMAND REPORT WHICH LEAD HIM TO DECIDE THE ISSUE ON THE BASIS OF MATERIALS AVAILABL E ON RECORD AND AS WERE FURNISHED BY THE ASSESSEE BEFORE HIM. LD. C.I.T.(A) HAS DISCUSS ED THE MATTER IN DETAIL AT PAGES 2 TO 5 OF HIS ORDER AND FOR THE REASONS DISCUSSED THEREIN DIRECTED THE A.O. TO DELETE THE ADDITION. THE RELEVANT PORTION OF FINDING OF LD. C .I.T.(A), TO QUOTE, IS AS UNDER :- FROM THE ABOVE REFERRED DISCUSSION, IT IS CLEAR THA T THE A.O. HAS ISSUED SUMMONS & NOTICE U/S. 133(6) IN RESPECT OF ONLY TWO PARTIES R ELATED TO PURCHASE MATERIAL AND BOTH THE PARTIES HAVE COMPLIED WITH BEFORE A.O. IN RESPO NSE TO NOTICES U/S. 133(6). HENCE, A.O. WAS NOT CORRECT IN STATING THAT ALL THE PARTIE S WERE NOT RESPONDED U/S. 133(6) AND 133(1). EVEN HE DID NOT CARE TO LOOK INTO THE CASE RECORD PROPERLY. IF HE HAD GONE THROUGH THE CASE RECORD PROPERLY HE WOULD HAVE LEAR NT THAT THE 100% PARTIES I.E. ALL THE TWO HAVE COMPLIED WITH BEFORE THE A.O. IN THE LIGHT OF THE ABOVE REFERRED FACTS, HE NCE, THE A.O. WAS NOT CORRECT IN HIS OBSERVATION THAT SOME OF THEM NOT COMPLIED WITH THE SAID NOTICE U/S. 133(6). THEN THE A.O. HAS STATED THAT THE APPELLANT HAD FAILED TO PR OVIDE ANY DETAILS OR MECHANISM FOR VERIFICATION OF MATERIAL CONSUMED. HOWEVER, WHAT K IND OF DETAILS HE WAS REQUIRING, HE HAS NOT EVEN DISCUSSED IN HIS ASSESSMENT ORDER WHIC H WAS THE STATUTORY DUTY OF THE A.O. UNDER THE CIRCUMSTANCES, THE A.O. WAS NOT CORRECT A ND JUSTIFIED TO CONSTRUE THAT THE ASSESSEE FAILED TO PRODUCE ANY CONVINCING EVIDENCES OF HIS MECHANISM THAT ENSURES THE ACCURACY OF RELIABILITY OF EXPENDITURE DEBITED UNDE R THE HEAD MATERIAL CONSUMED AND IN DISALLOWING 2% OF THE MATERIAL CONSUMED WHICH WO RKS OUT AT RS.4,55,844/-. 2.4. WE HAVE HEARD THE PARTIES AND PERUSED THE MAT ERIALS PLACED ON RECORD. WE OBSERVE THAT THE PURCHASES WERE SUPPORTED BY BILLS & VOUCHERS AND PAYMENTS WERE MADE BY ACCOUNT PAYEE CHEQUES. LEDGER ACCOUNTS OF DIFFE RENT PARTIES IN THE BOOKS OF ASSESSEE WERE ALSO PRODUCED BEFORE THE AUTHORITIES BELOW AND THIS FACT IS DULY MENTIONED AT PAGE- 3 OF LD. C.I.T.(A)S ORDER. COPY OF SUCH LEDGER ACC OUNT OF MATERIAL CONSUMED FOR THE PERIOD 01/4/2004 TO 31/3/2005 IS ALSO FILED AT PAGE S 22 & 23 OF THE ASSESSEES PAPER BOOK. WE FURTHER OBSERVE THAT LD. C.I.T.(A) ALSO A SKED FOR REMAND REPORT WHICH THE A.O. FAILED TO SUBMIT. WE FURTHER OBSERVE THAT A.O . MADE THE ADDITION ONLY ON THE 4 GROUND THAT SOME OF THE PARTIES DID NOT REPLY TO TH E NOTICE ISSUED BY HIM. AT THE TIME OF HEARING BEFORE US, LD. DEPARTMENTAL REPRESENTATIVE DID NOT DISPUTE THE CONTENTION OF LD. A/R THAT A.O. EXAMINED ALL THE BILLS & VOUCHERS IN RESPECT OF THE MATERIAL PURCHASED AND CONSUMED AND NO DISCREPANCY WAS POINTED OUT BY HIM. THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE , WE ARE OF THE CONSIDERED OPINION THAT LD. C.I.T.(A) HAS RIGHTLY DELETED THE ADDITION OF R S.4,55,844/- AND WE FIND NO JUSTIFICATION TO INTERFERE WITH THE SAME. IN VIEW OF ABOVE, THIS PART OF GROUND NO.1 OF THE REVENUES APPEAL IS DISMISSED. 3. VIDE GROUND NO.2 ABOVE, THE DEPARTMENT AGITATES DELETION OF ADDITION OF RS.13,34,752/- MADE BY APPLYING PROVISIONS OF SEC. 40(A)(IA) OF THE ACT. ON EXAMINATION OF BOOKS OF ACCOUNT OF THE ASSESSEE, TH E A.O. OBSERVED THAT THE ASSESSEE MADE PAYMENTS AGGREGATING TO RS.14,25,752/- WITHOUT DEDUCTING TDS U/S. 194C OF THE ACT ON SUCH PAYMENTS, DETAILS OF WHICH ARE AS UNDER :- TRANSPORTATION CHARGES DATE PARTICULARS AMOUNT 09.03.2005 RELIABLE PARIVAHAN 91,000 /- TOTAL 91,000 /- TRACTOR HIRE CHARGES DATE PARTICULARS AMOUNT 22.04.2004 HANUMAN PRASAD JAT 2,00,000/- 23.03.2005 BINAY KUMAR 80,000/- 28.03.2005 PRALADNATH 1,69,864 /- TOTAL 4,49,864 /- DOZZER EXPENSES DATE PARTICULARS AMOUNT 01.03.2005 MD. RUSTAM 1,71,574 /- TOTAL 1,71,574 /- EXCAVATOR HIRE CHARGES DATE PARTICULARS AMOUNT 31.03.2005 VIKAS CONSTRUCTION CO. 6,53,314 /- TOTAL 6,53,314 /- 5 DUMPER HIRE CHAGES DATE PARTICULARS AMOUNT 15.04.2004 MUKESH BHALOTIA 60,000 /- TOTAL 60,000 /- GRAND TOTAL 14,25,752 /- 3.1. ON APPEAL, LD. C.I.T.(A) FOLLOWING THE ORDER OF LD. C.I.T. PASSED U/S. 264 OF THE ACT IN THE CASE OF THE ASSESSEE FOR THE SUBSEQUENT ASSESSMENT YEAR 2006-07 AND CONSIDERING THE SIMILAR NATURE OF EXPENDITURE IN TH E ASSESSMENT YEAR UNDER CONSIDERATION DELETED THE ADDITION TO THE EXTENT OF RS.13,34,752/ - TOWARDS HIRE CHARGES PAID ON ACCOUNT OF TRACTOR, DOZER, ESCAVATOR AND DUMPER AND SUSTAIN ED ADDITION OF RS.91,000/- [RS.14,25,752 RS.13,34,752] ON ACCOUNT OF TRANSPO RT CHARGES. WHILE DOING SO, LD. C.I.T.(A) HELD THAT AS PER PROVISIONS OF SEC. 194- I OF THE ACT AT THE RELEVANT TIME, I.E. FOR ASSESSMENT YEAR UNDER CONSIDERATION, HIRE CHARGES O N THE ABOVE MACHINERY & EQUIPMENTS DO NOT ATTRACT THE PROVISIONS OF SEC. 19 4-I OF THE ACT, AS THE PERIOD IS PRIOR TO THE DATE ON WHICH THE AMENDED PROVISION COMES INTO EFFECT FROM 13/7/2006. HE, THEREFORE, HELD THAT AS NO TDS WAS DEDUCTIBLE IN TH E RELEVANT ASSESSMENT YEAR IN RESPECT OF HIRE CHARGES PAID BY THE ASSESSEE ON TRACTOR, DO ZER, ESCAVATOR AND DUMPER, THE A.O. WAS NOT JUSTIFIED IN MAKING THE DISALLOWANCE OF RS. 13,34,752/- U/S. 194C READ WITH SEC. 40(A)(IA) OF THE ACT ON THAT ACCOUNT. HE, THEREFORE , DELETED THE ADDITION OF RS.13,34,752/-. 3.2. WE HAVE HEARD THE PARTIES AND PERUSED THE MAT ERIAL PLACED ON RECORD. THE INSTANT APPEAL BEFORE US IS FOR FINANCIAL YEAR 2004-05 RELE VANT TO ASSESSMENT YEAR 2005-06. AMENDMENT WAS MADE IN SEC. 194-I OF THE ACT BY THE TAXATION LAWS (AMENDMENT) ACT, 2006 W.E.F. 13/7/2006 FOR INCLUDING THE RENT O N PLANT, MACHINERY & EQUIPMENT. THEREFORE, IT IS EVIDENT THAT PROVISIONS OF SEC. 19 4-I OF THE ACT WERE APPLICABLE AND TDS WAS DEDUCTIBLE ON THE RENT W.E.F. ASSESSMENT YEAR 2 007-08 IN VIEW OF THE SAID AMENDMENT. HOWEVER, SO FAR AS ASSESSMENT YEAR UNDE R CONSIDERATION IS CONCERNED, NO TDS WAS DEDUCTIBLE IN RESPECT OF HIRE CHARGES PAID BY THE ASSESSEE ON ACCOUNT OF MACHINERIES & EQUIPMENTS, I.E. TRACTOR, DOZER, ESCA VATOR AND DUMPER. IN VIEW OF ABOVE, 6 WE FIND NO INFIRMITY IN THE ORDER OF LD.C.I.T.(A) I N DELETING THE ADDITION OF RS.13,34,752, WHICH IS UPHELD. 4. VIDE GROUND NO.3 ABOVE, THE DEPARTMENT HAS DISP UTED THE DELETION OF ADDITIONS ON FOLLOWING ACCOUNTS :- I) RS.66,153/- ON ACCOUNT OF REPAIRS; II) RS.48,633/- ON ACCOUNT OF INTEREST ON I.T. RE FUND; AND III) RS.32,804/- ON ACCOUNT OF BUSINESS PROMOTIO N. 4.1. THE A.O. OBSERVED THAT ASSESSEE HAS DEBITED R S.4,05,766/- UNDER THE HEAD REPAIRS & MAINTENANCE WHICH, ACCORDING TO HIM, WE RE NOT FULLY VERIFIABLE AND SUPPORTED BY BILLS & VOUCHERS. HE, THEREFORE, ON ES TIMATE BASIS DISALLOWED 20% OF SUCH EXPENDITURE, WHICH CAME TO RS.81,153/- AND ADDED TH E SAME TO THE ASSESSEES TOTAL INCOME. 4.2. ON APPEAL, LD. C.I.T.(A) CONSIDERING THE ASSE SSEES NATURE OF BUSINESS UPHELD THE ADDITION TO THE EXTENT OF RS.15,000/- AND THUS GAVE RELIEF OF RS.66,153/- [RS.81,153 RS.15,000] TO THE ASSESSEE. WHILE HOLDING SO, LD. C .I.T.(A) OBSERVED AS UNDER :- CONSIDERING THE NATURE OF THE BUSINESS OF THE APPEL LANT I.E. CONTRACT BUSINESS, IT HAS TO INCUR EXPENDITURE ON ACCOUNT OF REPAIRS & MAINTENAN CE OF MACHINERIES, EQUIPMENTS, TOOLS ETC. WORKING AT DIFFERENT SITES AND THE LOCAL MECHANICS ARE HIRED FOR THE PURPOSE FOR WHICH PUCCA BILLS ARE GENERALLY NOT ISSUED BY T HE MECHANICS. THEREFORE, THIS PLEA OF THE APPELLANT APPEARS TO BE CORRECT THAT IN COMPULS ION THE APPELLANT HAS TO MAKE THE PAYMENTS THROUGH THE DEBIT VOUCHERS AND BEFORE THE A.O. THE APPELLANT HAS ALSO FURNISHED THE DETAILS OF PERSONS, SITE AND ACKNOWLE DGEMENT BY THE PAYEE. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IT WOULD MEET THE EN DS OF JUSTICE IF THE DISALLOWANCE IS RESTRICTED TO RS.15,000/-. THE GROUND IS PARTLY AL LOWED. 4.3. WE HAVE HEARD THE PARTIES AND PERUSED THE MAT ERIAL PLACED ON RECORD. IT IS NOT DISPUTED THAT THE ASSESSEE IS ENGAGED IN THE CONTRA CT BUSINESS AND IT HAS TO INCUR EXPENDITURE ON REPAIRS AND MAINTENANCE OF MACHINERY , EQUIPMENTS, TOOLS ETC. USED FOR ITS BUSINESS. THE A.O. ALSO DID NOT DISPUTE INCURRING O F SUCH EXPENDITURE. HE HAS DISALLOWED A PART OF THE EXPENDITURE ON ESTIMATE BA SIS, I.E. @ 20%, SIMPLY ON THE GROUND THAT THE EXPENDITURE IS NOT FULLY VERIFIABLE AND SU PPORTED BY BILLS/VOUCHERS. HOWEVER, WE OBSERVE THAT A.O. HAS NOT IDENTIFIED OR POINTED OUT WHICH ITEM OF EXPENDITURE ACCORDING TO HIM REMAINED UNVERIFIABLE. ASSESSEES BOOKS OF ACCOUNTS ARE DULY AUDITED. FURTHER, AS STATED BY LD. C.I.T.(A), THE ASSESSEE A LSO FURNISHED THE DETAILS OF PERSONS, 7 SITES AND ACKNOWLEDGMENT BY THE PAYEES. IN VIEW OF ABOVE, WE ARE OF THE CONSIDERED VIEW THAT LD. C.I.T.(A) HAS JUSTIFIABLY ALLOWED THE EXPENDITURE INCURRED ON REPAIRS & MAINTENANCE TO THE EXTENT OF RS.66,153/- OUT OF THE TOTAL DISALLOWANCE OF RS.81,153/- AND WE DECLINE TO INTERFERE WITH THE SAME. THE ORD ER OF LD. C.I.T.(A) ON THIS ISSUE IS, THEREFORE, UPHELD. 4.4. THE NEXT DISPUTE OF THE DEPARTMENT IS AGAINST DELETION OF ADDITION OF RS.48,633/- ON ACCOUNT OF INTEREST ON I.T. REFUND. THE A.O. ADD ED THE SAID SUM UNDER THE HEAD OTHER SOURCES AS, ACCORDING TO HIM, THE ASSESSEE FAILED TO ACCOUNT FOR I.T. REFUND OF RS.48,633/- RECEIVED FOR ASSESSMENT YEAR 2003-04. O N APPEAL, LD. C.I.T.(A) ENDORSING THE SUBMISSION OF THE ASSESSEE DELETED THE ADDITION BY STATING THAT THE ADDITION WAS WHOLLY UNJUSTIFIED AS INTEREST ON I.T. REFUND WAS ALREADY ACCOUNTED FOR DURING SUBSEQUENT ASSESSMENT YEAR 2006-07. 4.5. WE OBSERVE THAT THE ASSESSEE OFFERED THE SAID INTEREST ON I.T. REFUND IN ASSESSMENT YEAR 2006-07 AND NOT IN THE ASSESSMENT Y EAR UNDER CONSIDERATION, ALTHOUGH THE ASSESSEE RECEIVED THE INTEREST IN THIS YEAR. HE NCE, THIS AMOUNT IS TO BE ADDED IN THE ASSESSMENT YEAR UNDER CONSIDERATION. THE LD. A/R SU BMITTED THAT THE SAID AMOUNT WAS OFFERED FOR TAXATION IN THE NEXT ASSESSMENT YEAR AN D HAS BEEN ASSESSED IN THE SAID ASSESSMENT YEAR. CONSIDERING THE FACT THAT WE HAVE ALREADY HELD THAT THIS AMOUNT IS TO BE ADDED IN THE ASSESSMENT YEAR UNDER CONSIDERATION , I.E. A.Y. 2005-06, THE ASSESSMENT YEAR IN WHICH THE ASSESSEE RECEIVED THE INTEREST ON INCOME-TAX REFUND, THE ASSESSEE WILL BE AT LIBERTY TO MOVE THE A.O. FOR NECESSARY RECTIF ICATION OF THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2006-07 SO THAT THE SAME AMOUNT IS NOT TAXED TWICE AND THE A.O. WILL TAKE THE NECESSARY ACTION IN ACCORDANCE WITH LAW. T HE ISSUE IS DISPOSED OF ACCORDINGLY. 4.6. THE ONLY OTHER ISSUE REMAINS FOR CONSIDERATIO N IS DELETION OF ADDITION OF RS.32,804/- ON ACCOUNT OF BUSINESS PROMOTION. THE A .O. OBSERVED THAT THE ASSESSEE DEBITED RS.2,14,020/- ON ACCOUNT OF PAYMENT OF HOTE L BILLS DURING THE COURSE OF TRAVELING BY THE PARTNERS THROUGH CREDIT CARDS. CONSIDERING THE POSSIBILITY OF PERSONAL USER, THE A.O. DISALLOWED ON ESTIMATE BASIS 20% OF THE TOTAL EXPENDITURE OF RS.2,14,020/-, WHICH CAME TO RS.42,804/-, AND ADDED THE SAME TO THE ASSE SSEES TOTAL INCOME. ON APPEAL, LD. C.I.T.(A) OBSERVED THAT DISALLOWANCE MADE WAS WITHO UT ANY CONCRETE MATERIAL. HE, 8 THEREFORE, CONSIDERING THE TURNOVER, NATURE OF BUSI NESS, QUANTUM OF EXPENDITURE ETC., RESTRICTED THE DISALLOWANCE TO RS.10,000/- AS AGAIN ST RS.42,804/- MADE BY THE A.O. 4.7. WE HAVE HEARD THE PARTIES AND PERUSED THE MAT ERIAL PLACED ON RECORD. WE OBSERVE THAT A.O. HAS DISALLOWED 20% OF THE EXPENDITURE INC URRED ON PAYMENT OF HOTEL BILLS BY THE PARTNERS THROUGH CREDIT CARDS ON ESTIMATE BASIS , PRESUMING PERSONAL USER BY THE PARTNERS. HOWEVER, HE HAS NOT BROUGHT ON RECORD A NY EVIDENCE OR INSTANCE WHICH PARTICULAR ITEM OF PAYMENT WAS, IN HIS OPINION, MEA NT FOR PARTNERS PERSONAL EXPENDITURE. THAT BEING SO, WE ARE UNABLE TO AGREE WITH HIS ESTIMATED DISALLOWANCE OF EXPENDITURE. THE LD. C.I.T.(A) HAS RESTRICTED THE A DDITION TO RS.10,000/- AFTER CONSIDERING THE NATURE OF BUSINESS, TURNOVER AND QU ANTUM OF EXPENDITURE AND WE FIND NO INFIRMITY IN SUCH RESTRICTION OF DISALLOWANCE MADE BY LD. C.I.T.(A). WE, THEREFORE, UPHOLD THE ORDER OF LD. C.I.T.(A) ON THIS ISSUE DEL ETING THE DISALLOWANCE OF RS.32,804/-. 5. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS PARTLY ALLOWED. ! 4 #5 6 5& 7 !8 THIS ORDER IS PRONOUNCED IN OPEN COURT ON 14.07.2011 SD/- SD/- ( . . . . . .. . !' !' !' !' ) # ( . . . . . . . . ) (S.V.MEHROTRA) , ACCOUNTANT MEMBER (B.R.MITTAL) , JUDICIAL MEMBER ( (( (9# 9# 9# 9#) )) ) DATE: 14-07-2011 4 2 0%%: ; :(<- COPY OF THE ORDER FORWARDED TO : 1. ,- / THE APPELLANT : ACIT, CIRCLE-3, ASANSOL. 2 01,- / THE RESPONDENT : M/S.ALLIED CONSTRUCTION CO., P-16, BENTINCK STREET, A. C.MANSION, 3 RD FLOOR, KOLKATA-700 001. 3. %4& () : THE CIT(A), ASANSOL 4. %4&/ THE CIT, ASANSOL. 5 . %7 0%& / DR, ITAT, KOLKATA BENCHES, KOLKATA 6 . GUARD FILE . 1: 0%/ TRUE COPY, 4&5/ BY ORDER, (DKP) @ A / DY/ASSTT. REGISTRAR .