Deba Prasad Pattnaik, Rourkela V. ITO, Rourkela

ITA 180/CTK/2012

• Counselvise Citation: 18022114 RSA 2012
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 08-08-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 12-03-2012
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: D K SETH
• Keywords: Business expenditure; Wrong claim
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , HONBLE SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER / I.T.A.NO. 180/CTK/2012 ( / ASSESSMENT YEAR 2008 - 09) DEBA PRASAD PAT T NAIK, AM - 102, BASANTI COLONY, ROURKELA 769012 PAN: AMAPP 0060 B - - - VERSUS - INCOME - TAX OFFICER, WARD 2, ROURKELA. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI D.K.SETH, AR / FOR THE RESPONDENT: / SHRI . S.C.MOHANTY, DR / DATE OF HEARING: 08.08.2012 / DATE OF PRONOUNCEMENT: 14.08.2012 / ORDER . . , , SHRI K.K.GUPTA, ACCOUNTANT MEMBER . THIS APPEAL BY THE ASSESSEE RAISES THE FOLLOWING GROUNDS. 1. FOR THAT IN THE FACTS OF THE CASE, THE LEARNED CIT(A) IS NOT CORRECT IN AC CEPTING THE CONTENTION OF THE AO REGARDING ADDITION OF 1 ,75,720 AS CAPITAL INTRODUCED. THE APPELLANT IS FILING HIS RETURN OF INCOME WITH THE SAME AO FOR THE LAST 10 YEARS AND SHOWING DETAILS OF HIS CAPITAL ACCOUNT THEREIN AND WHICH HAS BEEN DULY ACCEPTED BY THE AO FOR PREVIOUS YEARS. TO CONCLUDE ON PERCENTAGE THE AVAILABLE SURPLUS FOR THE CURRENT YEAR IS WRONG IN LAW. 2. FOR THAT IN TERMS OF THE CONTRACT FOR SUPPLY OF DAL TO DIFFERENT PLACES NUMBERING1600 LOCATIONS, THE APPELLANT HAS INCURRED TRANSPORTIN G EXPENSES, WHICH HAS NOT BEEN CONSIDERED BY CIT(A). 3. FOR THAT THE ENTIRE TRAVELING EXPENSES OF 93,620 HAS BEEN DISALLOWED WITHOUT VERIFYING FROM THE TRAVEL AGENT TO WHOM THE PAYMENT WAS MADE. I.T. A.NO. 180/CTK/2012 2 4. FOR THAT THE RECONCILIATION OF 78,662.00 WITH ORISSA ORDERS SUPPLIERS (P) LTD. WAS SUBMITTED WITH THE CIT(A) BUT WAS NOT CONSIDERED. 2. THE LEARNED COU NSEL FOR THE ASSESSEE INITIATING HIS ARGUMENTS SUBMITTED THE BRIEF FACTS AS HAVE BEEN BROUGHT FORTH BEFORE THE AUTHORITIES BELOW ARE THAT THE ASSESSEE IS A TRADER IN FOOD GRAINS, AND FOR THE CURRENT YEAR HE WAS AWARDED WITH A CONTRACT FOR DISTRIBUTION OF DAL TO VARIOUS EAR MARKED POINTS FIXED BY THE COL LECTOR , SUNDARGA RH. THE AWARD WAS BESTOWED TO O CC F LTD. OF MALGODOWN CUTTACK, AND OFF LOADED TO THE ASSESSEE. THE GOODS WERE STOCKED AT ROURKELA, AND DISTRIBUTED TO DIFFERENT UNITS THROUGH CARRIERS. THE C ARRIAGE PART OF THE GOODS WAS OFF LOADED BY THE ASSESSEE, TO DIFFERENT CARRIERS. IN THE ASSESSMENT MADE U/S.143(3), THE ASSESSING OFFICER MADE THE FOLLOWING ADDITIONS : - I) ALLEGED NEW CAPITAL INTRODUCED IN THE YEAR; II) DISALLOWANCE OF THE WHOLE OF THE TR ANSPORTING CHARGES INCURRED AND CLAIMED AS DEDUCTION FROM INCOME ON DELIVERY OF GOODS AT THE REQUIRED POINTS, AMOUNTING TO 6,96,150. III) DISALLOWANCE OF THE WHOLE OF THE TRAVELLING EXPENSES INCURRED IN FACILITATING PURCHASES, DISTRIBUTION, OBTAINING THE REQUIRED CERTIFICATES OF ACKNOWLEDGEMENT OF THE RECEIPT OF GOODS FROM THE CONCERNED B.D.OS, AND FURNISHING THEM TO FACILIT ATE THE RECEIPT OF THE SALE PRICE, AND RELATED OTHER MATTER, AMOUNTING TO 93,620 , ON A SALES TURNOVER OF 1,18,96,942 MADE TO THE GOVT. WINGS. IV) DISALLOWANCE OF CLAIM OF SUNDRY DEBTOR (PARTLY ). 3. AGGRIEVED THE ASSESSEE APPEALED BEFORE THE FIRST APPEL LATE AUTHORITY AND SUBMITTED THAT IN THE FACTS OF THE CASE, THE ASSESSING OFFICER IS WRONG IN FACT AND IN LAW IN STATING THAT THE ASSESSEE HAS INTRODUCED A CAPITAL TO THE TUNE OF 5,05,000 DURING THE ASSESSMENT YEAR UNDER CONSIDERATION. IT WAS SUBMITTED TH AT THE ASSESSING OFFICER IS WRONG IN FACT IN OBSERVING THAT THE I.T. A.NO. 180/CTK/2012 3 ASSESSEE HAD NEVER ANNEXED BALANCE SHEET VOLUNTARILY TO ANY OF THE RETURNS OF INCOME FURNISHED UP TO ASSESSMENT YEAR 20 0 7 - 08 . THE FACT REMAINS THAT A SUM OF 4,97,656 IS THE BROUGHT FORWARD CA PITAL WAS DULY ASSESSED TILL THE FINANCIAL YEAR 2006 - 07. IN THE PRESENT FINANCIAL YEAR 2007 - 08, 2,844 HAS ONLY BEEN ADDED MA KING THE ACCRUED CAPITAL TO 5,00,500 AND SUCH SUM HAS BEEN SHOWN AS THE CAPITAL INTRODUCED. SUMS INTRODUCED IN OTHER YEARS, IF ANY , CANNOT BE SUBJECTED TO TAX IN THE PRESENT YEAR. THE FINDING THAT 1,75,720 OUT OF 5,00,500 WAS LIABLE FOR ADDITION TO INCOME ON ACCOUNT OF CAPITAL INTRODUCED IN THE YEAR IS HYPOTHETICAL, ARBITRARY, CAPRICIOUS AND ILLEGAL . IN TERMS OF THE CONTRACT FOR SU PPLY OF DAL TO DIFFERENT PLACES, THE ASSESSEE WAS REQUIRED TO MAINTAIN THE STOCK AT ROURKELA, AND DISTRIBUTE THEM TO DIFFERENT CENTRES NUMBERING ABOUT 1600, LOCATED MOSTLY IN REMOTE AREAS OF BIRMITRAPUR, KUMARMUNDA, BISRA, KOIDA AND NUAGAON. THE ASSESSIN G OFFICER DID NOT EXAMINED THE LOCATION OF THE CENTRES , ITS ACCESSIBILITY, THE DISTANCE FROM ROURKELA, THE QUANTITY REQUIRED IN THAT CENTRE ETC., BEFORE DISALLOWING THE WHOLE OF THE AMOUNT CLAIMED AS TRANSPORTATION CHARGES. THE FACT REMAINS THAT THE ASS ESSEE HAS ENGAGED THE WORK OF TRANSPORTING DAL FROM ROURKELA TO DIFFERENT CENTRES TO DIFFERENT PERSONS AND THE BOOKS OF ACCOUNT DEPENDS UPON THEIR SUBMISSION OF EXPENSE VOUCHERS , AND THE ASSESSEES COMMON SENSE. IN ANY CASE IT CANNOT BE THE FACT THAT NO SUM WAS SPENT BY THE ASSESSEE ON TRANSPORTING, TO CAUSE DISALLOWANCE OF WHOLE OF THE SUM CLAIMED. THE FACT STATED IN THE ASSESSMENT ORDER THAT THE EXPENSES ON TRANSPORTING CHARGES ARE BASED ON SELF - MADE VOUCHERS IS WRONG. SELF - MADE VOUCHERS ARE MADE FOR PAYMENT OF ADVANCES ONLY, BUT THEY ARE LATER ADJUSTED WITH THE FINAL BILL SUBMITTED BY THE TRANSPORTER. IN THE PREMISES THEREFORE THE ADDITION ON THE WHOLE OF THE SUMS I.T. A.NO. 180/CTK/2012 4 CLAIMED AS TRANSPORTING CHARGES IS ARBITRARY, ILLEGAL AND CAPRICIOUS. FURTHER IT WAS S UBMITTED THAT THE ASSESSING OFFICER IS WRONG IN HOLDING THAT THE LOADING AND UNLOADING CHARGES INCURRED IS INCLUSIVE OF TRANSPORTING CHARGES . THE EXPENSES INCURRED TOWARDS TRAVELLING EXPENSES ARE BASED ON BILLS SUBMITTED BY THE TRAVEL AGENT. TRAVEL BY THE ASSESSEE IS ESSENTIAL TO ENABLE HIM TO OBTAIN THE REQUIRED CERTIFICATES FROM THE AUTHORITIES OF THE CENTRES WHERE DAL ARE SUPPLIED. ON THE BASIS OF SUCH CERTIFICATE BILLS ARE RAISED ON THE MAIN SUPPLIER, AND IN TURN, ON THE COLLECTOR SUNDARGARH. THE VEHICLE NO S . STATED IN THE BILLS RAISED BY THE TRAVEL AGENT ON THE ASSESSEE ARE IRRELEVANT TO THE ASSESSEE AND HE HAS NOT CHECKED AS THE AO , BEFORE MAKING THE PAYMENT. UNLESS THE TRAVEL AGENT DENIES THE RECEIPT, THE ASSESSING OFFICER IS NOT JUSTIFIED IN D ISALLOWING THE WHOLE OF THE AM OUNT SO CLAIMED AMOUNTING TO 93,620. THOUGH THE SUM CLAIMED UNDER THIS HEAD IS 93,620, THE ASSESSING OFFICER HAS WRONGLY STATED SUCH FIGURE AS 5,99,150 AT PAGE 12 OF THE IMPUGNED ORDER. THE ADDITION OF 78,662 WAS ALSO FAUL TY INTERPRETATION OF FACTS. 4. THE LEARNED CIT(A) ON THE ISSUE REGARDING CAPITAL ENTRIES AMOUNTING TO 1,75,720 HELD THAT THE ASSESSEE APPELLANTS SUBMISSION IS NOT CONVINCING AND CONFIRMED THE SAME. WITH RESPECT TO THE DISALLOWANCE OF CLAIMING EXPENDITURE OF TRANSPORTATION AMOUNTING TO 6,96,150 HE SUSTAINED THE DISALLOWANCE ON THE BASIS OF HOLDING A VIEW THAT THE ASSESSING OFFICER HAD GOT VALID AND COGENT REASONS AS GIVEN IN THE ASSESSMENT ORDER. SIMILARLY, THE DISALLOWANCE OF TRAVELLING EXPENSES AMOUNT IN G TO 93,620 WAS CONFIRMED INSOFAR AS THE TRAVELLING EXPENSES ARE INCURRED BY THE ASSESSEE CLAIMED ON VEHICLES WHICH ARE NOT EVEN OPERATING IN THOSE DAYS. WITH RESPECT TO THE DIFFERENCE OF CONFIRMATION OF CREDIT BALANCE THE LEARNED CIT(A) CONFIRMED I.T. A.NO. 180/CTK/2012 5 THE ADD ITION OF 78,662 AS OUT OF THE DEBTORS DISMISSING THE ASSESSEE APPELLANTS CONTENTION. 5. THE LEARNED COUNSEL FOR THE ASSESSEE HAS RELIED ON THE SUBMISSIONS AS WERE MADE BEFORE THE LEARNED CIT(A) INSOFAR AS THE BALANCE SHEET AS ON 31.3.2008 INCORPORATED TH E CAPITAL OF THE ASSESSEE BEING THE BALANCING FIGURE AS ON 1.4.2007 BEING INCOMES OF EARLIER YEARS HELD AS ASSETS IN THE IMPUGNED ASSESSMENT YEAR,. THERE WAS NO REASON FOR THE ASSESSING OFFICER TO VERIFY THE EARNINGS OF EARLIER YEARS WHICH STOOD DECLARED B Y THE ASSESSEE IN THE FORM OF ASSET WHEN THE TOTAL OF THE ASSET FOR THE IMPUGNED ASSESSMENT YEAR STOOD EXPLAINED WERE CURRENT ASSETS OF MORE THAN 69,32,997. IT WAS NOBODYS CASE THAT THE AMOUNT REMAINED UNTAXED UPTO THE IMPUGNED ASSESSMENT YEAR WHEN THE ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEAR WAS BEING PASSED FROM THE BROUGHT FORWARD CAPITAL. THE ASSESSING OFFICER INSTEAD O F PROCEEDING AHEAD CHOSE TO REVERSE HIS FINDINGS ON HAVING ACCEPTED THE RETURNS OF THE EARLIER YEARS OF THE ASSESSEE WHO WAS DOUBTING HIS OWN ACCEPTANCE OF INCOME WHETHER COULD BE THE CAPITAL OF THE ASSESSEE. THE LEARNED CIT(A) THEREFORE FAILED TO POINT OU T THE COGENT REASONS OF THE ASSESSING OFFICER INSPITE OF THE FACTS GLARING AS PER THE FINANCIAL STATEMENTS DULY AUDITED AND SUBMITTED TO THE AUTHORITIES BELOW. WITH RESPECT TO THE GROUND RELATING TO DISALLOWANCE OF 6,92,150 BEING THE TRANSPORTATION CHARGES, THE LEARNED COUNSEL HAS RELIED ON THE FACT THAT THE ASSESSEE WAS TO SUPPLY DAL ON THE BASIS OF GOVERNMENT ORDER FOR THEIR MID DAY MEAL PROJECTS IN ANGANWADI CENTRES THE ASSESSEE BEING A WHOLESALE DEALER WAS TO I NCUR COST WITHIN 50 KMS RADIOUS WHEN THE ASSESSEE INCURRED CARRIAGE INWARDS AMOUNTING TO 2,69,610.THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE FINDINGS BY THE ASSESSING OFFICER WHICH HAVE BEEN CONFIRMED BY THE I.T. A.NO. 180/CTK/2012 6 LEARNED CIT(A) CANNOT OUT RIGHTL Y REJECT THE CLAIM INSOFAR AS THE MOVEMENT OF GOODS HAS NOT BEEN DISPUTED AND IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT THE GOVERNMENT WAS TO BEAR THESE COSTS FOR REIMBURSEMENT TO THE ASSESSEE. THE TRAVELLING EXPENSES OF 93,620 HAVE ALSO BEEN DISAL LOWED ON THE PREMISE THAT THE VEHICLES USED FOR TRANS FER WERE NOT EXISTS WHEN THE TRA VELLING TOOK PLACE. BOTH THESE DISALLOWANCES ARE ON THE BASIS OF HAND - MADE VOUCHERS PRODUCED AT THE TIME OF HEARING BEFORE THE AO WERE VERIFIED FOR FINDING FROM THE ROAD T RANSPORT AUTHORITY WAS AN UNILATERAL ACT OF FINDING CANNOT BE HELD AGAINST THE ASSESSEE FOR DISALLOWING THE WHOLE OF THE CLAIM. NO BENEFIT WOULD ACCRUE TO THE ASSESSEE FOR MAKING A FALSE CLAIM WHEN AS PER THE AUDITED BALANCE SHEET EXPENDITURES HAVE BEEN AL LOWED ON THE BASIS OF VERIFICATION THAT THESE EXPENSES ARE PART AND PARCEL OF THE BUSINESS OF THE ASSESSEE BEING A WHOLESALE DEALER OF DAL IN THE DISTRICT OF SUNDARGARH. HE PRAYED THAT A SUITABLE DIRECTION FOR DELETION OF THE ADDITION MAY KINDLY BE MADE. W ITH RESPECT TO THE DISALLOWANCE OF 78,662 AS UNPROVED DEBTORS, THE LEARNED COUNSEL FOR THE ASSESSEE ARGUED THAT A CREDITOR HAS BEEN TERMED AS A DEBTOR WHEN THE FINDING OF THE ASSESSING OFFICER INDICATES THAT THE DIFFERENCE IN THE LEDGER OF THE PURPORTED CREDITOR WAS BECAUSE THE CREDITOR HA D NOT CONSIDERED CERTAIN ITEMS THAT HAD BEEN RAISED IN THE IR BILLS BY AS FOLLOWS. ITEM BILL NO.169 BILL NO174 TOTAL () BROKEREAGE COIMMISSION 5,590 2,000 7,590 DRAFT COMMISSION 6,493 2,279 8,772 FREIGHT 46,800 15,000 61,800 SALES TAX OTHERS 500 -- 5 00 59,383 19,279 78,662 IN OTHER WORDS THE DISALLOWANCE OF DEBTORS U/S.69 CANNOT BE EQUATED WITH ASSESSEE DECLARING AMOUNT MORE THAN OWED TO THE PARTY THEN WHAT THE PARTY I.T. A.NO. 180/CTK/2012 7 HAD ACTUALLY SHOWN AS PER THEIR OWN BOOKS OF ACCOUNT. NOBODY CAN MAKE PROFIT OUT OF GOVERNMENT DUES CANNOT BE TAXED EITHER AS BOGUS DEBTORS OR CREDITORS WHEN THE INTENTION OF THE AUTHORITIES BELOW WAS TO TAX THE SAME U/S.41(1). HE PRAYED THAT THIS ADDITION AS SUSTAINED BY THE LEARNED CIT(A) HAS NO LEGS TO STAND ON. THE NATURE OF CREDIT DETAILED ABOVE HAS BEEN CONSIDERED AS INCOME BY THE ASSESSING OFFICER WAS TO BE CLAIMED AS EXPENDITURE B Y THE PARTY WAS NOT THE INCOME TO BE TAXED AS DEBTOR IN THE HANDS OF THE ASSESSEE. 6. THE LEARNED DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW FOR HIS PART OF SUBMISSIONS. HE POINTED OUT THAT THE CAPITAL INTRODUCTION HAS TO BE EXPLAINED IN A SCRUTINY ASSESSMENT. THEREFORE, IT WAS NOT THE CASE OF THE ASSESSEE TO TAKE THE EARLIER YEARS INCOME FOR E XHIBITING THE CURRENT YEAR ASSET. HE OUGHT TO EXPLAIN T HE DIFFERENCE OF 1,75,720 WHICH ALONE COULD NOT BE HELD AS A BROUGHT FORWARD BALANCE AS AN OPENING CAPITAL. SIMILARLY ON FINDING OF THE FACT BY THE ASSESSING OFFICER AS CONFIRMED BY THE LEARNED CIT(A) , T RANSPORTATION HAS BEEN MADE ON SCOOTERS AND MOTOR CY CLES WHICH IS NOBODYS APPREHENSION ON THE VERY FACT THAT THEY HAVE BEEN CLAIMED FOR CARRYING OUT THE GOVERNMENT ORDERS IS NOT TO REIMBURSE THIS EXPENDITURE ON WHICH DIRECTION THE ASSESSEE HAD TO SUPPLY GOODS TO SCHOOLS AND ANGANWEADIS. THE TRAVELLING EXPE NSES HAVE ALSO BEEN INCURRED WITHOUT JUSTIFYING THE NATURE OF BUSINESS PURPOSES FOR WHICH THE TRAVELLING WAS INCURRED. WITH RESPECT TO THE DISALLOWANCE OF THE DEBTOR AMOUNTING TO 78,662 HE RELIED ON THE ORDERS OF THE AUTHORITIES BELOW FOR HIS PART OF SUBM ISSIONS. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND THE MATERIAL AVAILABLE ON RECORD. ON I.T. A.NO. 180/CTK/2012 8 CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THE SUBMISSIONS OF THE LEARNED COUNSEL FOR T HE ASSESSEE ON THE ISSUE OF CAPITAL INTRODUCTION IN THE YEAR JUSTIFIED TO THE EXTENT THAT IT WAS THE OPENING CAPITAL AND NOT CAPITAL INTRODUCED IN THE IMPUGNED ASSESSMENT YEAR TO BE TAXED AS INCOME OF THE IMPUGNED ASSESSMENT YEAR. HAVING ACCEPTED THE CAPIT AL AT THE END OF THE YEAR IT WAS NOBODYS CASE THAT THE ASSESSEE COULD NOT CONTINUE WITH THE CAPITAL AS ON THE FIRST DAY OF THE FINANCIAL YEAR TO THE EXTENT OF RENDERING INCOME AS PER THE AUDITED FINANCIAL STATEMENTS FILED ALONG WITH THE RETURNS. IN OTHER WORDS, THE ASSESSING OFFICER HAS TRIED TO REASSESS THE PURPORTED INCOME FOR THE EARLIER YEARS WHICH REMAINED ACCEPTED INSOFAR AS THE ASSESSEE HAS BEEN FILING I.T. RETURN S FOR THE EARLIER YEARS. THE ASSESSING OFFICER OUGHT TO HAVE FOUND THE CORRESPONDING AS SETS IN CASE HE IDENTIFIE D THE AMOUNT OF CAPITAL INTRODUC ED IN THIS YEAR AMOUNTING TO 1,75,720 WHICH OBVIOUSLY WAS NOT TO BE ACCUMULATION OF FUNDS ON ESTIMATION THEREFORE RESULTED IN THE ASSESSING OFFICER COMPUT ING 1,75,720 AS INTRODUCTION OF CAPITAL IN THE IMPUGNED ASSESSMENT YEAR WHEN THE OPENING BALANCE WAS ALREADY AT 5 05, 500 BEING THE ASSET OVER LIABILITIES AS ON 1.4.2007. THE LEARNED CIT(A) THEREFORE COULD NOT SUBSTANTIATE THE COGENT REASONS OF THE ASSESSING OFFICER FOR SUSTAINING THE ADDITION. THE SAME IS DIRECTED TO BE DELETED. 7.1. HOWEVER ON THE ISSUE OF CLAIMING OF EXPENDITURE AS TRANSPORTATION AND TRAVELLING OF 6,96,950 AND 93,620 RESPECTIVELY WE ARE OF THE CONSIDERED VIEW THAT THE FACT FINDING BY THE ASSESSING OFFICER HAS LE AD THE LEARNED C OUNSEL FOR THE ASSESSEE TO SUBMIT THAT THE CLAIM OF EXPENDITURE ON THE BASIS OF VOUCHERS MAY BE DONE AWAY WITH INSOFAR AS THE LEGITIMATE CLAIM OF EXPENDITURE IN CASH ROUTED THROUGH THE BOOKS OF ACCOUNT CANNOT BE HELD AS I.T. A.NO. 180/CTK/2012 9 BOGUS ONLY BECAUSE THE CLAIM OF VEHI CLES WITH REGISTRATION NUMBERS WAS ON A FINDING THAT THEY EITHER WERE NOT AVAILABLE OR THEY BEING SCOOTERS AND MOTOR CYCLES , WE ARE OF THE VIEW THAT AT LEAST 50% OF EXPENSES CLAIMED MAY BE ALLOWABLE INSOFAR AS THE ASSESSEE HAS PAID SALARY TO ITS EMPLOYEES WHO HAVE CLAIMED EXPENSES QUOTING REGISTRATION NUMBERS WITHOUT JUSTIFYING THE FINDING OF THE ASSESSING OFFICER OR THE LEARNED CIT(A). SIMILARLY THE ASSESSEE HAD INCURRED CARRIAGE INWARD AMOUNTING TO 2,69,610 WOULD CLEARLY INDICATE THAT THE ASSESSEE WAS TO BEAR THE COST OF DELIVERING ITS GOODS TO SCHOOL AND ANGANWADI CENTRES WHICH MAY BE IMPRACTICAL FOR SUPPLYING IN BULK . THEY HAVE BEEN TRANSPORTED THROUGHOUT THE YEAR TO THE AREA WHICH ARE ACCESSIBLE ONLY BY MOTOR CYCLE AND SCOOTER CANNOT BE HELD AGAINST THE ASSESSEE AS IF THE TRANSPORTATION OF GO O DS WAS IN TRUCKS. THE LEARNED COUNSEL FOR THE ASSESSEES SUBMISSIONS THEREFORE IS REASONABLE TO THE EXTENT THAT INSTEAD OF ABIDING TO THE VOUCHERS WHICH INDICATE THE REGISTRATION NUMBER OF THE VEHICLES WHICH IN W ISDOM OF THE RECIPIENTS WHETHER ARE BOGUS OR UNCALLED FOR BECOMES A LOSS TO THE ASSESSEE INSOFAR AS HE HAS ACTUALLY BORNE THE COST IS PURELY A BUSINESS EXPENDITURE NECESSARILY INCURRED . WE FEEL THE DISALLOWANCE TO BE RESTRICTED TO 50% THEREOF WHICH WILL ME ET THE ENDS OF JUSTICE FOR BOTH DISA LLOWANCES I.E., 6,96,950 AND 93 ,620 RESPECTIVELY . 7.2. ON THE LAST ISSUE BEING DISALLOWANCE OF 78,662 AS UNPROVED DEBTORS , WE ARE UNABLE TO SATISFY OURSELVES TO THE FINDING OF THE AUTHORITIES BELOW FOR THE SIMPLE REA SON THAT THE ADDIT IO N HAS NEITHER BEEN MADE UNDER THE PROVISIONS OF SECTION 68 NOR U/S.69 INSOFAR AS THE AMOUNT OWED TO THE PARTY WAS ON THE BASIS OF BILLS RAISED BY THEM WHICH STATUTORY DEDUCTION WAS CLAIMED BY THEM AS A LIABILITY IN THEIR OWN W AY. IT WAS NOT THE CASE OF THE ASSESSING OFFICER TO ESTABLISH AN ASSET OVERRIDING EXPLAINING A LIABILITY I.T. A.NO. 180/CTK/2012 10 U/S.41(1). THEREFORE, THE LEARNED CIT(A) WRONGLY CONFIRMED THE SAME REQUIRING COGENT REASONS FROM THE ASSESSEE WHEN THE VERY FACT FINDING OF THE ASSESSING OFFICE R WAS ON ERRONEOUS PREMISE BECAUSE THE AMOUNT STOOD RECONCILED BY THE ASSESSEE WHICH ONUS HAS BEEN DISCHARGED. THE SAME CANNOT BE ADDED IN THE HANDS OF THE ASSESSEE, WHICH IS DIRECTED TO BE DELETED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PA RTLY ALLOWED. SD/ - SD/ - ( . . . ) , (K.S.S.PRASAD RAO), JUDICIAL MEMBER ( . . ) , , (K.K.GUPTA), ACCOUNTANT MEMBER. ( ) DATE: 14.08.2012 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : DEBA PRASAD PAT T NAIK, AM - 102, BASANTI COLONY, ROURKELA 769012 2 / THE RESPONDENT: INCOM E - TAX OFFICER, WARD 2, ROURKELA. 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY ORDER, ( ), (H.K.PADHEE ), SENIOR.PRIVATE SECRETARY. I.T. A.NO. 180/CTK/2012 11 APPENDIX XVII SEAL TO BE AFFIXED ON THE ORDER SHEET BY THE SR. P.S./P.S. AFTER DICTATION IS GIVEN 1. DATE OF DICTATION 10. .08.2012 . 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13 .08.2012 OTHER MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS P LACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.... 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S . 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 14.08.2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER ................ 9. DATE OF DESPATCH OF THE ORDER ..