RAJASTHAN PATRIKA LTD, Jaipur V. ACIT, Jaipur

ITA 187/JPR/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99487 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 11-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAILASH MANGAL JCIT DHK
• Assessee Lawyers: JAVED KHAN
• Keywords: Depreciation; Opportunity of being heard; Principle of natural justice; Additional depreciation; Avoidance of tax
• Section: 143(3); 80IB; 131; 37

Judgement Text

VKXJK VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA-@ ITA NO. 187/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2007-08 . M/S. RAJASTHAN PATRIKIA PVT. LTD., KESAR GARH, J.L.N. MARG, JAIPUR. CUKE VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-5, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAACR 7856 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 223/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2007-08 . THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-5, JAIPUR. CUKE VS. M/S. RAJASTHAN PATRIKIA PVT. LTD., KESAR GARH, J.L.N. MARG, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAACR 7856 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT /KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL (C.A.) & SHRI JAVED KHAN (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SHRI KAILASH MANGAL, (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 19.10.2015. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 20/11/2015. VKNS'K@ ORDER PER BENCH : 2 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. THESE ARE TWO CROSS APPEALS FILED BY THE ASSESSEE AN D REVENUE AGAINST THE ORDER OF LD. CIT (APPEALS)-II, JAIPUR DATED 24.01.2 014 FOR THE A.Y. 2007-08. THE EFFECTIVE GROUNDS RAISED IN THE APPEAL ARE AS UNDER :- ASSESSEES GROUNDS : (ITA NO. 187/JP/2014) 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT (A) HAS GROSSLY ERRED IN CONFIRMING THE DISALLOWANCES OF RS . 5,00,000/- MADE OUT OF GENERAL/OTHER EXPENSES CLAIMED BY THE ASSESSEE A RBITRARILY WITHOUT APPRECIATING THE NATURE OF EXPENSES INCURRED VIS-- VIS EXPEDIENCY, THUS THE DISALLOWANCES SO CONFIRMED DESERVES TO BE DELET ED. 1.1. THAT THE LD. CIT (A) HAS FURTHER ERRED IN IGNO RING THE FACT THAT THE EXPENSE UNDER REFERENCE WERE INCURRED BY THE ASSESSEE SOLEL Y AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND ONE CANNOT WALK INTO TH E SHOES OF BUSINESSMAN TO JUDGE THE NECESSITY OF THE EXPENDITU RE INCURRED, THUS THE EXPENDITURE DESERVES TO BE ALLOWED AS CLAIMED. 1.2. THAT THE LD. CIT (A) HAS FURTHER ERRED IN IGNO RING THE EVIDENCES FILED IN SUPPORT OF THE EXPENSES CLAIMED AND ALSO FAILED TO APPRECIATE THE FACT THAT THE BOOKS OF ACCOUNTS WERE NOT DOUBTED BY THE LD. A O AND THE TRADING RESULTS HAVE BEEN ACCEPTED, THUS THE DISALLOWANCE M ADE BY MAKING GENERAL AND VAGUE OBSERVATIONS DESERVES TO BE DELET ED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT (A) HAS GROSSLY ERRED IN CONFIRMING THE DISALLOWANCE OF MAR KETING AND SURVEY EXPENSES LEGITIMATELY CLAIMED AT RS. 67,73,510/- BY THE ASSESSEE COMPANY WITHOUT APPRECIATING THE NATURE OF EXPENSES AND THE BUSINESS MODULE OF THE ASSESSEE COMPANY, THUS THE EXPENSES A S CLAIMED DESERVE TO BE ALLOWED. 2.1. THAT THE LD. CIT (A) HAS FURTHER ERRED IN DISB ELIEVING THE SUBMISSIONS MADE AND EVIDENCES ADDUCED IN THE SHAPE OF CONFIRMA TIONS, INVOICES, TRACKING SHEETS, ETC., THUS THE ACTION OF THE LD. C IT (A) BEING UNFAIR DESERVES TO BE HOLD BAD IN LAW AND THE ADDITIONS UP HOLD DESERVES TO BE DELETED. 2.2. THAT THE LD. CIT (A) HAS FURTHER ERRED IN IGNO RING THE FACT THAT THE RECIPIENT HAS DULY CONFIRMED THE TRANSACTIONS AND A LSO DECLARED THE RECEIPTS IN THEIR INCOME TAX RETURNS WHICH WERE NOT DOUBTED THUS THE DISALLOWANCES MADE IN THE HANDS OF THE ASSESSEE DES ERVES TO BE DELETED. 3 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. REVENUES GROUNDS : (ITA NO. 223/JP/2014) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (APPEALS) HAS ERRED IN :- (I) ALLOWING ADDITIONAL DEPRECIATION OF RS. 54,34,0 45/- WITHOUT APPRECIATING THE FACT THAT PRINTING OF PAPER CANNOT BE CONSIDERED AS PRODUCING A NEW ARTICLE OR THING. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PRINT ING & PUBLISHING OF NEWSPAPER AND PERIODICALS. IT HAS FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 ON 31.10.2007 SHOWING NIL INCOME. THE ASSESSEES CASE WAS SCRUTINIZED UNDER SECTION 143(3) OF THE IT ACT. 3. THE FIRST GROUND OF THE ASSESSEE IS AGAINST CONF IRMING THE DISALLOWANCE OF RS. 5,00,000/- MADE OUT OF GENERAL/OTHER EXPENSES CLAIM ED BY THE ASSESSEE. THE AO OBSERVED THAT THE ASSESSEE HAD CLAIMED A SUM OF RS. 2,79,88,897/- ON ACCOUNT OF OTHER EXPENSES /GENERAL EXPENSES WHICH INCLUDES WASHING C HARGES, TRANSPORTATION EXPENSES, PAYMENT TO VARIOUS EMPLOYEES AGAINST THEIR CLAIMS O F TRANSPORT CIRCULATION, RECOVERY WORK, REMUNERATION OF TEMPORARY EMPLOYEES ETC. NO COMPLETE BILLS AND VOUCHERS WERE MAINTAINED BY THE ASSESSEE. FOR CERTAIN EXPENSES, T HE ASSESSEE WAS HAVING ONLY SELF MADE VOUCHERS AND PAYMENTS WERE MADE IN CASH. THE AO FURTHER HELD THAT IN THE ABSENCE OF COMPLETE BILLS AND VOUCHERS, GENUINENESS OF THESE EXPENSES CANNOT BE VERIFIED. THE AO GAVE REASONABLE OPPORTUNITY OF BEI NG HEARD ON THIS ISSUE AND ALSO PROPOSED LUMP SUM DISALLOWANCE OUT OF THESE EXPENSE S TO THE ASSESSEE. THE ASSESSEE 4 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. IN RESPONSE TO SHOW CAUSE, SUBMITTED REPLY DATED 29 .12.2009 WHICH HAS BEEN REPRODUCED BY THE AO AT PAGE 9 OF THE ASSESSMENT OR DER. AFTER CONSIDERING THE ASSESSEES REPLY, IT HAS BEEN HELD THAT NO VERIFICA TION WAS POSSIBLE TO JUDGE WHETHER ALL EXPENSES HAVE BEEN INCURRED FOR THE PURPOSE OF BUSI NESS ONLY IN VIEW OF PROVISIONS OF SECTION 37 OF THE IT ACT. IN THE ABSENCE OF COMPLE TE DETAILS AND EVIDENCE, THE NON BUSINESS USE/PERSONAL USE OUT OF THE EXPENSES CLAIM ED CANNOT BE RULED OUT. THEREFORE, A LUMP SUM ADDITION OF RS. 5,00,000/- WAS MADE BY T HE AO. 4. BEING AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE CARRIED THE MATTER BEFORE LD. CIT (A) WHO CONFIRMED THE ORDER OF THE AO BY OBSERV ING AS UNDER :- 7.3. I HAVE CONSIDERED THE FACTS OF THE CASE; ASS ESSMENT ORDER AND APPELLANTS WRITTEN SUBMISSION. IDENTICAL ISSUE CAM E UP IN ASSESSMENT YEAR 2008-09 IN THE APPELLANTS OWN CASE AND WHILE DECID ING APPEAL BY ORDER DATED 28.3.2012, MY LEARNED PREDECESSOR CONFIRMED T HE ADDITION ON IDENTICAL FACTS. RELEVANT EXTRACT OF THE APPEAL ORD ER IS QUOTED BELOW I HAVE DULY CONSIDERED THE SUBMISSIONS OF THE APP ELLANT. THE AO NOTICED THAT THE APPELLANT HAD CLAIMED HUGE EXPENSE S OF RS. 3,02,68,784/- (WRONGLY TAKEN AT RS. 3,82,68,784/-) WHICH WERE GENERAL IN NATURE. THE ENTIRE EXPENDITURE WAS INCUR RED IN CASH FOR WHICH NO BILLS OR SUPPORTINGS WERE AVAILABLE WITH T HE APPELLANT. THERE IS NO CHANGE IN THIS FACTUAL POSITION EVEN DU RING THE PRESENT APPELLATE PROCEEDINGS. THE COUNSEL OF APPELLANT HAS MERELY SUBMITTED AN EXPLANATION OF GENERAL NATURE AND THES E EXPENSES ARE NOT SUPPORTED BY INDEPENDENT CORROBORATIVE EVIDENCE S. THE AO HAS BEEN VERY FAIR AND REASONABLE IN MAKING DISALLOWANC E OF RS. 5,00,000/- OUT OF TOTAL EXPENDITURE OF RS. 3,02,68, 784/- WHICH WAS NOT AMENABLE TO VERIFICATION. IT WAS HELD BY HONBL E RAJASTHAN HIGH COURT IN THE CASE OF JAIPUR ELECTRO PRIVATE LIMITED VS. CIT (223 ITR 535) THAT DOCTRINE THAT BUSINESSMAN IS THE BEST JUD GE OF THE BUSINESS EXPEDIENCY WILL NOT IMPACT THE RIGHT OR DU TY OF THE AO TO EXAMINE WHETHER PAYMENTS WERE FOR THE PURPOSE OF TH E BUSINESS OR 5 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. NOT. IN THE PRESENT CASE, I DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE AO. THE ADDITION OF RS. 5,00,00 0/- MADE BY THE AO IS CONFIRMED. THIS GROUND OF APPEAL DISMISSED. IT IS NOT IN DISPUTE THAT FACTS OF THIS YEAR ARE SA ME AS ASSESSMENT YEAR 2008-09. THEREFORE RESPECTFULLY FOLLOWING THE AFORE SAID APPEAL ORDER ON THE IDENTICAL FACTS, ADDITION MADE BY THE ASSESSING OFFICER IS CONFIRMED. 5. NOW THE ASSESSEE IS BEFORE US. THE LD. A/R SUBM ITTED THAT ENTIRE EXPENSES WAS INCURRED IN THE NORMAL COURSE OF BUSINESS AND THEIR UTILITY TO THE BUSINESS CANNOT BE DENIED MERELY BECAUSE NATURE OF EXPENSES INCURRED I S THAT PERSONAL ELEMENT COULD BE INVOLVED MORE PARTICULARLY WHEN THE ASSESSEE IS A P RIVATE LIMITED COMPANY HAVING SEPARATE LEGAL ENTITY AND CAN NOT BE AT PAR WITH TH E PROPRIETORSHIP OR PARTNERSHIP FIRM WHERE THE PROPRIETOR/PARTNER HAS THE FULL CONTROL O VER THE DAY TO DAY BUSINESS OPERATION INCLUDING THE EXPENSES INCURRED. IN THE CASE OF AS SESSEE COMPANY, IT HAS MORE THAN 18 BRANCHES SPREAD THROUGHOUT INDIA AND ALL BEING RUN BY PROFESSIONALS OF THE ASSESSEE COMPANY. THE AO ALSO HAVE NOT GIVEN ANY JUSTIFICATI ON FOR LUMP SUM DISALLOWANCE MADE BY HIM. THE ITAT JAIPUR BENCH IN ASSESSEES OWN CAS E FOR A.YS 2005-06, 06-07 AND 08- 09 HAD DELETED THE DISALLOWANCE MADE OUT OF MISCELL ANEOUS EXPENSES BY OBSERVING THAT FACTS ABOUT ASSESSEES REGULAR MAINTENANCE OF ACCOU NTS WHICH WERE NOT REJECTED BY THE AO, DIVERSE BUSINESS ACTIVITIES, CONTENTIONS, APPLI CABLE CASE LAWS AND PAST LITIGATION HISTORY IS NARRATED IN DETAILS ABOVE AND NEEDS NO R EPETITION. THEREFORE, HE REQUESTED TO DELETE THE ADDITION MADE BY THE AO. 6. AT THE OUTSET, THE LD. D/R VEHEMENTLY SUPPORTED THE ORDER OF THE A.O. 6 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. 7. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE AO MADE THE ADDITION WHICH WAS CONFIRMED BY LD. CIT (A) ON THE BASIS THAT NO BILLS/VOUCHERS FOR PAYMENTS MADE IN CASH ON ACCOUNT OF EXPENSES INCURRED BY THE ASSESSEE WERE FURNISHED. THE ASSESSEES BUSINESS AC TIVITIES ARE NOT ONLY IN JAIPUR BUT ALL OVER INDIA AND THE OFFICES OF THE COMPANY ARE MANAG ED BY THE PROFESSIONALS. THE ASSESSEE IS A COMPANY. IT HAS SEPARATE LEGAL ENTITY AS PER THE COMPANY LAW FROM THE DIRECTOR OF THE COMPANY. PERSONAL ELEMENT IN CASE O F A COMPANY AS DECIDED BY THE VARIOUS ITAT BENCHES AND BY THE HONBLE HIGH COURTS , IS NOT POSSIBLE. THE LD. AO HAS NOT POINTED OUT ANY SPECIFIC BILL WHICH IS PERSONAL IN NATURE. THE DISALLOWANCE MADE BY THE AO IS GENERAL. BY CONSIDERING THE PAST HISTORY , THE COORDINATE BENCH HAS DELETED THE SIMILAR ADDITIONS IN A.YS 2005-06, 06-07 AND 08 -09 IN PRECEDING YEARS. IN VARIOUS DECISIONS OF ITAT JAIPUR BENCH, PARTICULARLY IN ITA NO. 519, 520 AND 521/JP/2012 HELD AS UNDER :- 3.6. IN OUR CONSIDERED VIEW THESE JUDGMENTS ARE F ULLY APPLICABLE TO ASSESSEES GROUNDS RELATING TO DISALLOWANCE IN A LL THESE YEARS. RESPECTFULLY FOLLOWING THEM THE DEPARTMENT CANNOT B E JUSTIFIED IN ADOPTING A FLIP FLOP ATTITUDE AND REPEATEDLY GO ON DISALLOWING THE SAME TYPE OF EXPENDITURE YEAR AFTER YEAR. VII. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF SAYAJI IRON AND ENGG. CO. (SUPRA) IS APPLICABLE TO DISALLOW ANCE RETAINED ALLEGING PERSONAL USER BY THE COMPANY. RES PECTFULLY FOLLOWING IT WE HOLD THAT IN THE CASE OF ASSESSEE B EING A LIMITED COMPANY WHICH IS AN INANIMATE PERSON, THERE CAN BE 7 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. NO PERSONAL EXPENDITURE. CONSEQUENTLY THE DISALLOWA NCES ATTRIBUTED TO BE PERSONAL USER CANNOT BE JUSTIFIED AND ARE DELETED. VIII. FOR A.Y. 2006-07 QUA THE SAME DISALLOWANCES ASSESSEE HAS PAID MORE FRINGE BENEFIT TAX (FBT). A S OVER FBT AND IT PROVISIONS IF ANY EXPENDITURE IS TAXABLE UNDER FBT IT CANNOT BE DISALLOWED AGAIN IN INCOME TAX PRO VISIONS. 3.7. CONSIDERING THE ENTIRETY OF ABOVE OBSERVATIONS , WE HAVE NO HESITATION IN DELETING THE DISALLOWANCES/ADDITIONS RETAINED BY LD. CIT (A) OUT OF VARIOUS EXPENSES MENTIONED IN RESPEC TIVE GROUNDS FOR A.Y. 2005-06, 2006-07 & 2008-09 WHICH ARE DELET ED. GROUNDS RAISED BY ASSESSEE IN THIS BEHALF IN ALL THESE YEAR S ARE ALLOWED. RESPECTFULLY FOLLOWING THE COORDINATE BENCH DECISIO N ON IDENTICAL FACTS, WE HAVE NO HESITATION TO DELETE THE ADDITION CONFIRMED BY LD. CIT (A). ACCORDINGLY THIS GROUND OF APPEAL IS ALLOWED. 8. ASSESSEES SECOND GROUND IS AGAINST CONFIRMING T HE DISALLOWANCE OF MARKETING AND SURVEY EXPENSES AT RS. 67,73,510/-. THE AO OBS ERVED THAT ASSESSEE HAS DEBITED A SUM OF RS. 3,70,19,437/- IN THE PROFIT & LOSS ACCOU NT IN RESPECT OF HEAD OFFICE AND BRANCH OFFICES TOWARDS MARKETING AND SURVEY EXPENSE S. THE DETAILS ARE AS UNDER :- 1. M/S. PERFECT N MARKETING RS. 29,02,400/ - 2. M/S. ANEU MARKETING RS. 18,04,380/ - 3. M/S. A ONE MARKETING RS. 2,97,420/ - 4. M/S. HARSHIT MARKETING RS. 2,19,410/ - 5. M/S. SHARMA MARKETING RS. 3,21,855/ - 6. M/S. LAKSHYA MARKETING RS. 1,68,635/ - 8 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. 7. M/S. ANOOP MARKETING RS. 2,55,810/ - 8. M/S. THE INDIA INSTITUTE OF PUBLIC OPINION P. LTD. RS. 6,00,000/ - 9. MS ASHA SHARMA RS. 2,03,600/ - TOTAL RS. 67,73,510/ - THE AO ASKED THE ASSESSEE TO PRODUCE THE PARTIES PE RSONALLY FOR VERIFICATION ALONG WITH THEIR BOOKS OF ACCOUNT, PURCHASE AND SALE BILLS AND COPIES OF RETURN OF INCOME FOR ASSESSMENT YEAR 2007-08. THOSE PERSONS WERE REQUIR ED TO BE PRODUCED ON 23.12.2009 IN THE OFFICE OF THE A.O. THE ASSESSEE PRODUCED TH E PROPRIETORS OF ONLY TWO CONCERNS, NAMELY, M/S. PERFECT N MARKETING AND M/S. ANEU MA RKETING, BUT NO OTHER PARTIES WERE PRODUCED ON THAT DATE AND TILL THE DATE OF ORDER AL SO NO ONE HAS BEEN PRODUCED. HE FURTHER HAD GIVEN THE FACTS DISCOVERED DURING THE C OURSE OF INVESTIGATION IN THE CASE OF SHRI PUSHPENDRA SINGH AND SHRI HANUMAN SINGH I.E. B OTH PERSONS ARE REAL BROTHERS IN WHOSE NAMES M/S. ANEW MARKETING AND M/S. PERFECT N MARKETING CONCERNS STATED TO BE WORKED FOR ASSESSEE COMPANY. M/S. A ONE MARKETIN G (NEW) STATED TO BE A PROPRIETARY CONCERN OF WIFE OF SHRI PUSHPENDRA SING H NAMELY SMT. SHAKUNTALA SINGH. THUS THE MARKETING SURVEY EXPENSES WERE CLAIMED TO HAVE BEEN DEBITED IN THE NAMES THREE MEMBERS OF A SINGLE FAMILY WHO WERE RESIDING IN THE SAME HOUSE AT 411-412, KISHAN BAGH, NAYA KHEDA, AMBA BARI, JAIPUR. THEY W ERE RESIDING IN A ADJACENT TWO PLOTS HAVING AREA OF 50 SQ. YARDS EACH STATED TO BE PURCHASED BY SHRI PUSHPENDRA SINGH FEW YEARS BACK THROUGH FINANCE FROM BANK. THE EDUC ATIONAL QUALIFICATION OF SMT. SHAKUNTALA SINGH IS 10 TH FAILED. SHRI PUSHPENDRA SINGH IS B.SC. 1 ST YEAR IN 1996 AND SHRI HANUMAN SINGH IS B.A. FINAL YEAR IN 1999-2000 AS ST ATED BY THEM IN THEIR STATEMENTS. SHRI PUSHPENDRA SINGH HAS A TWO WHEELER HERO PUCH S INCE 1997, SHRI HANUMAN SINGH 9 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. HAS A SPLENDOR MOTORCYCLE SINCE 2006 AND BOTH OF TH EM DO NOT HAVE ANY OTHER VEHICLE INCLUDING ANY FOUR WHEELER. PRESENTLY SHRI PUSHPEND RA SINGH IS RUNNING A SMALL RESTAURANT PREPARING AND SELLING SAMOSA & KACHORI S INCE 2007 ON A RENTAL SITE. AS PER THE AO, THESE PERSONS WERE OF SMALL MEANS AND DID N OT CATER ANY RESOURCES AND FOR SUCH A SMALL PERSONS ENTRY FOR BUSINESS IN A HIGHLY BIG GROUP OF ASSESSEE IS JUST IMPOSSIBLE. 8.1. BOTH THE PERSONS ATTENDED THE OFFICE WITH ONLY A COPY OF ACKNOWLEDGEMENT OF RETURN AND COMPUTATION OF INCOME BUT NO FINAL ACCOU NTS WERE PRODUCED/FURNISHED. 8.2. ON BEING ASKED, THOUGH THEY ADMITTED THAT THEY THEMSELVES APPOINTED THE STAFF BUT WERE STILL UNABLE TO TELL THE COMPLETE NAMES OF THEIR STAFF. MOREOVER, THEY WERE UNABLE TO TELL THE ADDRESS OR TELEPHONE NUMBERS OF EVEN A SINGLE EMPLOYEE APPOINTED BY THEM. 8.3. SMT. SHAKUNTALA SINGH W/O SHRI PUSHPENDRA SING H NEITHER APPEARED NOR ANY COPY OF HER RETURN OF INCOME OF A.Y. 2007-08 WAS FU RNISHED. 8.4. THE PROPRIETORS OF ABOVE CONCERNS DID NOT PROD UCE EVEN A SINGLE BILL OR ANY OTHER DOCUMENT SUBMITTED TO THE ASSESSEE COMPANY FOR RECE IVING PAYMENT. THEY ALSO DID NOT PRODUCE ANY FORMS ON WHICH SURVEY REPORT WAS MADE. 8.5. IN THE STATEMENT VIDE ANSWER TO QUESTION NO. 2 8, SHRI PUSHPENDRA SINGH STATED THAT TO THE EMPLOYEES/SURVEYORS EMPLOYED FOR THIS W ORK THEY HAVE PAID THE REMUNERATION OF RS. 120/- AND RS. 60/- PER DAY TO E ACH OF SUPERVISORS AND SURVEYORS RESPECTIVELY BUT THIS STATEMENT IS CONTRADICTING TO THE RATES CLAIMED TO BE CHARGED BY THEM FROM THE ASSESSEE AS NOTED IN THE BILLS WHEREB Y RS. 80/- TO 120/- PER DAY HAS 10 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. BEEN CHARGED FOR EACH EMPLOYEE. IF IT IS TRUE THEN THERE WOULD HAVE BEEN THE LOSSES IN THE HANDS OF SHRI PUSHPENDRA SINGH. 8.6. SO VERACITY OF THE STATEMENTS OR FACTS ENUMERA TED BY HIM IN THEIR STATEMENTS CREATES SUSPICION. WHY HE WOULD SUPPLY THE SURVEYOR TO ASSESSEE BELOW ITS COST. 8.7. THE ASSESSEE HAS CLAIMED THAT ALL THE ENTIRE P AYMENTS MADE TO THEM WERE BY ACCOUNT PAYEE CHEQUE. SHRI HANUMAN SINGH & SHRI PUS HPENDRA SINGH WERE HAVING THE CURRENT BANK ACCOUNT BEARING NO. 2172 & 2409 RESPEC TIVELY. IT IS NOTICED AFTER GOING THROUGH THE BANK STATEMENT OF THE RELEVANT YEAR THA T AFTER DEPOSITING THE CHEQUES THE AMOUNTS WERE WITHDRAWN BY WAY OF CASH ON THE SAME D AY ON WHICH CHEQUES OF AFORESAID PAYMENTS DEPOSITED IN THE AFORESAID BANK ACCOUNT. 8.8. THE A.O HAS FURTHER HELD THAT MERE STATING BY THESE TWO PERSONS NAMELY SHRI HANUMAN SINGH & SHRI PUSHPENDRA SINGH, THAT THEY HA VE WORKED FOR THE ASSESSEE COMPANY FOR MARKETING SURVEY AND DIDNT PROVE THAT THEY HAVE ACTUALLY WORKED FOR THE ASSESSEE WHICH IS EVIDENT FROM THEIR STATEMENTS ALS O, IT CANT BE SAID THAT ACTUALLY MARKETING SURVEY HAVE BEEN CARRIED OUT BY THEM. SEL F SERVING CONTENTIONS OF THESE PERSONS CANNOT BE ACCEPTABLE IN THE EYES OF LAW. 8.9. THE AO GAVE SHOW CAUSE ON THE NATURE OF EXPEND ITURE CLAIMED UNDER THE HEAD MARKETING & SURVEY EXPENSES, ON THE BASIS OF STATEM ENT RECORDED AND MATERIAL COLLECTED BY THE AO AND ALSO CONSIDERED THE ASSESSM ENT ORDERS FOR A.YS 2005-06 AND 06-07 TO DISALLOW THE EXPENSES CLAIMED IN THE NAME OF M/S. HARSHIT MARKETING, M/S. SHARMA MARKETING, M/S. LAKSHYA MARKETING, M/S. ANOO P MARKETING, M/S. THE INDIAN INSTITUTE OF PUBLIC OPINION P. LTD. AND MS ASHA SHA RMA. THE ASSESSEE REPLIED BY LETTER 11 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. DATED 29.12.2009 WHICH HAS BEEN REPRODUCED BY THE A O AT PAGES 12, 13 & 14 OF THE ASSESSMENT ORDER. AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE, THE AO HELD THAT ASSESSEE HAS FAILED TO PRODUCE EVEN A SINGLE NEW PA RTY FROM WHOM IT CLAIMED TO HAVE CARRIED OUT THE SURVEY WORK AND TO WHOM THE PAYMENT S ON ACCOUNT OF SURVEY WORK ARE CLAIMED TO HAVE BEEN MADE. THE ASSESSEE HAD SQUARE LY FAILED TO PUT FORTH EVEN ANY OTHER RELIABLE DOCUMENT/EVIDENCE IN RESPECT OF THE OTHER PARTIES WHICH COULD BEAR EVEN A LITTLE SUBSTANCE OF AUTHENTICITY. THEREFORE, HE DISALLOWED THE TOTAL EXPENDITURE CLAIMED BY THE ASSESSEE UNDER THE HEAD MARKETING AN D SURVEY AT RS. 67,73,510/-. 8.10. HE FURTHER RELIED ON THE CASE OF CIT VS. CALC UTTA AGENCY LTD., 19 ITR 191 (SC), LIBERTY CINEMA VS. CIT, 152 ITR 153 WHEREIN IT HAS BEEN HELD THAT IN ORDER TO CLAIM AN EXPENDITURE FALLS UNDER SECTION 37(1), THE BURDEN O F PROVING THE NECESSARY FACTS IN THAT CONNECTION IS ON THE ASSESSEE. 9. BEING AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE CARRIED THE MATTER BEFORE LD. CIT (A) WHO HAD CONFIRMED THE ADDITION BY OBSERVING AS UNDER :- 9.3 I HAVE CONSIDERED THE FACTS OF THE CASE; ASSE SSMENT ORDER AND APPELLANT'S WRITTEN SUBMISSION. IDENTICAL ISSUE CAME UP IN ASSE SSMENT YEAR 2008-09 IN THE APPELLANT'S OWN CASE AND WHILE DECIDING APPEAL BY O RDER DATED 28-3-2012, MY LEARNED PREDECESSOR CONFIRMED THE ADDITION ON IDENT ICAL FACTS. RELEVANT EXTRACT OF THE APPEAL ORDER IS QUOTED BELOW:- I HAVE DULY CONSIDERED THE SUBMISSIONS OF THE APP ELLANT. IN THE YEAR UNDER REFERENCE, MARKETING AND SURVEY EXPENSES OF R S. 43,36,835/- WERE CLAIMED TO HAVE BEEN PAID TO M/S PERFECT REQUIREMENT & CONS ULTANCY SERVICES, M/S A ONE MARKETING, M/S HARSHIT MARKETING, M/S SHARMA MARKET ING, M/S LAKSHYA MARKETING AND M/S ANOOP MARKETING. DURING THE COURS E OF ASSESSMENT PROCEEDINGS, THE AO ASKED THE ASSESSEE TO PRODUCE T HE PROPRIETORS / PARTNER OF THE ALLEGED CONCERNS IN WHOSE NAMES THE AFORESAID EXPEN SES WERE DEBITED WITH THEIR BOOKS OF ACCOUNTS, BILLS / VOUCHERS AND THE COPY OF THEIR RETURNS OF INCOME FOR A.Y. 2008-09. HOWEVER IN RESPONSE, THE ASSESSEE COULD PR ODUCE THE PROPRIETOR OF M/S 12 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. PERFECT REQUIREMENT & CONSULTANCY SERVICES I.E. SH. HANUMAN SINGH AND PROPRIETOR OF M/S SHARMA MARKETING I.E. SH. MUKESH SHARMA. HOWEVER THE ASSESSEE FAILED TO PRODUCE THE PROPRIETORS OF OTHER CONCERNS. THUS THE ASSESSEE FAILED IN DISCHARGING THE INITIAL ONUS CAST THAT LA Y UPON IT TO PROVE THE GENUINENESS OF THE EXPENSES SO CLAIMED. WHEN THE DEPARTMENT ENQ UIRED INTO THE MATTER BY DEPUTING THE INSPECTOR AT THE GIVEN ADDRESSES OF TH E ABOVEMENTIONED TWO CONCERNS, IT WAS GATHERED THAT THE ALLEGED CONCERNS WERE OPERATING FROM 411-412, KISHAN BAGH, NAYA KHEDA, AMBA BADI, LAIPUR. THESE A LLEGED CONCERNS, WERE OPERATED BY THE FAMILY MEMBERS OF SH HANUMAN SINGH. FURTHER SMT. SHAKUNTALA SINGH, THE PROPRIETOR OF M/S A ONE MARKETING WAS TH E WIFE OF BROTHER OF SH. HANUMAN SINGH. BESIDES ABOVE, SMT. MEENA KUMARI, PR OPRIETOR OF M/S ANOOP MARKETING WAS THE WIFE OF SH HANUMAN SINGH. SMT KAM LESH KUMARI, PROPRIETOR OF M/S HARSHIT MARKETING WAS THE SISTER OF SH HANUM AN SINGH. SMT MEENA KUMARI & SMT KAMLESH KUMARI WERE HOUSEWIVES HAVING NO EXPERTISE IN THE LINE OF BUSINESS FOR WHICH MARKETING & SURVEY FEES WERE PAID TO THEM. SH MUKESH SHARMA, PROPRIETOR OF M/S SHARMA MARKETING WAS A PE RSON OF SMALL MEANS, GETTING A MONTHLY SALARY OF RS 21,000/- PER MONTH F ROM ICICI MUTUAL FUND. IN THE EARLIER YEARS ALSO, THE CLAIM OF MARKETING & SURVEY FESS COULD NOT BE SUBSTANTIATED BY THE ASSESSEE COMPANY. THE DEPARTMENT ALSO TOOK P HOTOGRAPHS OF THE OFFICE PREMISES OF THE ALLEGED CONCERNS AND THESE WERE MAD E PART OF THE ASSESSMENT ORDER TO SHOW THAT NO BUSINESS ACTIVITIES WERE CARR IED OUT BY M/S PERFECT N MARKETING, M/S A ONE MARKETING AND M/S ANEU MARKETI NG IN AY 2006-07. THE OFFICE OF M/S A ONE MARKETING WAS STATED TO BE 5, H OTEL RAJDOOT, M I ROAD. WHEN THE INSPECTOR WENT TO SERVE SUMMONS TO THE SAID PAR TY, IT WAS NOT FOUND TO BE IN EXISTENCE THERE. THE INSPECTOR REPORTED THAT M/S FI RST F1IGHT COURIER WAS OPERATING FROM SAID OFFICE. THE RESULTS OF THESE IN QUIRIES WERE MADE AVAILABLE TO THE ASSESSEE COMPANY FOR ITS COMMENTS. THE DAILY SU RVEY REPORTS FILED BEFORE THE AO WERE HURRIEDLY PREPARED IN THE OFFICE THE ASSESS EE COMPANY JUST TO GIVE SHADE OF GENUINENESS TO THE ALLEGED TRANSACTIONS. HOWEVER THESE DOCUMENTS DID NOT PROVE THAT M/S PERFECT REQUIREMENT & CONSULTANCY SE RVICES, M/S A ONE MARKETING, M/S HARSHIT MARKETING, M/S SHARMA MARKET ING, M/S LAKSHYA MARKETING AND M/S ANOOP MARKETING HAD RENDERED ANY KIND OF SERVICES TO THE APPELLANT AS THESE FORMS HAD BEEN FILLED BY SOME LA YMEN OR THE TEMPORARY EMPLOYEES OF THE APPELLANT TO WHOM MARKETING & SURV EY FEES OF RS. 4,39,94,858/- WERE PAID AND THESE WERE NOT DOUBTED BY THE AO. ON THE CONTRARY, THE DEPARTMENT WAS IN THE POSSESSION OF INFORMATION THAT THE ALLEGED CONCERNS DID NOT HAVE THE NECESSARY WHEREWITHAL TO RENDER ANY KI ND OF SERVICES TO THE APPELLANT. ON PERUSAL OF THE BANK STATEMENT OF THE ALLEGED CONCERNS, IT WAS NOTICED THAT THE MARKETING AND SURVEY FEES WERE CRE DITED BY WAY OF TRANSFER ENTRIES AND IT WAS BAFFLING TO NOTE THAT ON THE SAM E DAY I.E. DATES OF DEPOSITS, THE AMOUNTS WERE WITHDRAWN IN CASH LEAVING A BALANCE OF SMALL AMOUNT IN THE ACCOUNTS WHICH WAS IN THE NATURE OF COMMISSION / SE RVICE CHARGES BEING PAID TO THE ALLEGED CONCERNS FOR TAKING ACCOMMODATION ENTRI ES. FURTHER IT COULD NOT BE COINCIDENCE THAT THE ASSESSEE COMPANY AND THE ALLEG ED CONCERNS HAD THEIR BANK ACCOUNTS IN THE SAME BANK AND BRANCH. IT SHOWED THA T THE APPELLANT DID YIELD 13 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. SOME CONTROL OVER THE BANK ACCOUNTS OF THE ALLEGED CONCERNS. THE COUNSEL OF THE APPELLANT HAS ARGUED THAT THE ALLEGED CONCERNS NAME LY M/S PERFECT REQUIREMENT & CONSULTANCY SERVICES, M/S A ONE MARKETING, M/S HA RSHIT MARKETING, M/S SHARMA MARKETING, M/S LAKSHYA MARKETING AND M/S ANO OP MARKETING HAD CONDUCTED THE SURVEY BY THEIR SELF-HIRED STAFF WHO HAD VISITED DOOR TO DOOR IN A PARTICULAR AREA ON A PARTICULAR DAY AND COLLECTED T HE INFORMATION LIKE NUMBER OF HOUSES WHERE THE NEWSPAPER PUBLISHED BY THE ASSESSE E COMPANY WAS READ, NUMBER OF HOUSES WHERE THE NEWSPAPER PUBLISHED BY T HE COMPETITORS WAS READ, NUMBER OF HOUSES WHERE THE NEWSPAPERS PUBLISHED BY THE ASSESSEE COMPANY AND THE COMPETITORS BOTH WERE READ AND NUMBER OF HOUSES WHERE NO NEWSPAPER WAS READ. IT WAS ALLEGED THAT THE INFORMATION SO COLLEC TED WAS PASSED ON THE APPELLANT COMPANY WHOSE REPRESENTATIVE ALONG WITH THE PERSON CONDUCTING THE SURVEY VISITED THE HOUSES IN WHICH ITS NEWSPAPER WAS NOT R EAD AND TRIED TO CONVINCE THEM TO READ ITS NEWSPAPER BY GIVING FREE SAMPLES FOR A PERIOD RANGING BETWEEN 2 TO 10 DAYS. AS PER THE ALLEGED PROCEDURE ADOPTED BETWEEN THE ALLEGED CONCERNS AND THE ASSESSEE COMPANY, THERE SHOULD HAVE BEEN THE PRIMAR Y RECORDS OF DOOR TO DOOR SURVEY CONDUCTED INDICATING THE DATE OF VISIT OF SU RVEYOR, NAME AND ADDRESS OF THE HOUSE, TIME OF VISIT AND OBSERVATION OF SURVEY AND SIGNATURE OF THE SURVEYOR AND THE REPRESENTATIVES OF THE ASSESSEE COMPANY ON SUCH DAILY WORKING SHEETS. IN FACT THESE DAILY WORKING SHEETS SHOULD HAVE BEEN PRODUCE D EITHER BY THE ALLEGED CONCERNS OR THEIR REPRESENTATIVES. HOWEVER THESE DO CUMENTS HAVE NOT BEEN SUBMITTED BY THE ASSESSEE COMPANY DURING APPELLATE PROCEEDINGS SO AS TO VERIFY THE GENUINENESS OF THE ALLEGED SURVEY WORK CARRIED OUT BY THESE CONCERNS. HOWEVER IT IS SURPRISING TO NOTE THAT NOT A SINGLE DAILY WORKING SHEET HAD BEEN FURNISHED BY THE ASSESSEE TO THE DEPARTMENT OBVIOUS LY FOR THE REASONS BEST KNOWN TO IT. THE ALLEGED MONTHLY MARKET SURVEY REPORTS SUBMITTED DURING THE COURSE OF APPELLATE PROCEEDINGS WERE PREPARED BY THE TEMPORAR Y EMPLOYEES OF THE APPELLANT WHO WERE PAID MARKETING AND SURVEY FEES O F RS. 4,39,94,858/- . THESE REPORTS WERE SIGNED BY THE SUPERVISORS EMPLOYED BY THE APPELLANT COMPANY. THE APPELLANT HAD TRIED TO CONFUSE THE DEPARTMENT BY FI LING MONTHLY REPORTS PREPARED BY ITS SUPERVISORS. NO PRIMARY DOOR TO DOOR REPORTS PREPARED BY SURVEYORS OF THE ALLEGED CONCERNS HAD BEEN SUBMITTED WHICH COULD HAV E BEEN SUBJECTED TO INVESTIGATION / INQUIRY FOR DETERMINATION OF THE GE NUINENESS OF THE CLAIM. SMT. HEMANTI SINGH, PROPRIETOR OF M/S LAKSHYA MARKETING HAD SHOWN NON-TAXABLE INCOME OF RS. 88,280/- IN HER RETURN OF INCOME. SHE DID NOT APPEAR PERSONALLY BEFORE THE AO IN RESPONSE TO SUMMONS U/S 131 OF THE I.T. ACT. SHE HAD SHOWN OPENING CAPITAL OF RS. 21,000/- AND DID NOT HAVE AN Y EXPERTISE IN THIS LINE OF BUSINESS. SMT MEENA KUMARI, PROPRIETOR OF M/S ANOOP MARKETING HAD SHOWN NON-TAXABLE INCOME OF RS. 85,130/- IN HER RETURN OF INCOME. SHE DID NOT APPEAR PERSONALLY BEFORE THE AO IN RESPONSE TO SUMMONS U/S 131 OF THE I. T. ACT. SHE HAD SHOWN OPENING CAPITAL OF RS 21,000/- AND DID NOT HA VE ANY EXPERTISE IN THIS LINE OF BUSINESS. EVEN IN THE PHOTOGRAPH AFFIXED ON HER PAN CARD, SHE APPEARED TO BE AN ILLITERATE WOMAN. SMT KAMLESH KUMARI, PROPRIETOR OF M/S HARSHIT MARKETING HAD SHOWN NON-TAXABLE INCOME OF RS 87,120/- IN HER RETU RN OF INCOME. SHE DID NOT APPEAR PERSONALLY BEFORE THE AO IN RESPONSE TO SUMM ONS U/S 131 OF THE I.T. ACT. 14 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. SHE HAD SHOWN OPENING CAPITAL OF RS 25,000/- AND DI D NOT HAVE ANY EXPERTISE IN THIS LINE OF BUSINESS. SHE WAS JUST A HOUSEWIFE. SM T SHAKUNTALA SINGH, PROPRIETOR OF M/S A ONE MARKETING HAD SHOWN NON-TAXABLE INCOME OF RS 90,565/- IN HER RETURN OF INCOME. SHE DID NOT APPEAR PERSONALLY BEF ORE THE AO IN RESPONSE TO SUMMONS U/S 131 OF THE I.T. ACT. SHE HAD SHOWN OPEN ING CAPITAL OF RS 21,210/- AND DID NOT HAVE ANY EXPERTISE IN THIS LINE OF BUSI NESS. SHE WAS JUST A HOUSE WIFE. IT WAS STRANGE TO NOTICE THAT IN ALL THESE CASES, T HE RETURNS WERE BELATEDLY FILED ON 30 TH MARCH, 2009 JUST TO GIVE SHADE OF GENUINENESS TO T HE ALLEGED TRANSACTIONS. IN THE YEAR UNDER REFERENCE, THE APPELLANT HAD CLA IMED MARKETING AND SURVEY FEES OF RS 4,83,31,693/- OUT OF WHICH TH E AO HAD ALLOWED PAYMENTS OF RS 4,39,94,858/- TO ITS TEMPORARY EMPLOYEES' FOR SU RVEY AND MARKETING WORK. THE INFERENCES DRAWN BY THE AO IN AY 2006-07 WITH REGAR D TO THE ALLEGED CONCERNS, THEIR CAPACITY TO HANDLE THE WORK, FINANCIAL STATUS , MANAGERIAL SKILLS, EDUCATIONAL QUALIFICATION AND THEIR LACK OF KNOWLEDGE ABOUT THE DOOR TO DOOR SURVEY IF ANY CARRIED OUT BY THEM FOR THE ASSESSEE COMPANY ETC. W ERE VERY PERTINENT. THESE INFERENCES ALSO THROW THE LIGHT OVER THE ABSENCE OF ANY BUSINESS RELATIONS OF THESE CONCERNS WITH THE ASSESSEE GROUP. EVEN SMT. SHAKUNT ALA SINGH (10TH FAILED) PROP. OF M/S A ONE MARKETING WIFE OF SH. PUSHPENDRA SINGH WAS NOT PRESENTED FOR EXAMINATION OBVIOUSLY FOR THE REASON THAT HER STATE MENTS MIGHT HAVE DISCLOSED THE COLLUSION IN A MORE CANDID MANNER. THE SAME WAS ALS O TRUE FOR SMT HEMANTI KUMARA, SMT MEENA KUMARI AND SMT KAMLESH KUMARI. TH E RESULTS OF INQUIRIES MADE BY THE AO IN AY 2006-07 ARE ENUMERATED AS UNDE R: I) THE PROPRIETORS OF THE ALLEGED CONCERNS WERE FAM ILY MEMBERS. SH HANUMANT SINGH & SH PUSHPENDRA SINGH WERE BROTHERS WHILE SMT . SHAKUNTLA SINGH, PROPRIETOR OF M/S A ONE MARKETING WAS THE WIFE OF S H. PUSHPENDRA SINGH. THE ALLEGED PROPRIETORS DID NOT HAVE NECESSARY EDUCATIO NAL QUALIFICATIONS TO RENDER ANY KIND OF CONSULTANCY SERVICES TO THE APPELLANT C OMPANY. SMT SHAKUNTALA SINGH HAD NOT PASSED EVEN THE MATRICULATE EXAMINATION WHE REAS SH PUSHPENDRA SINGH & SH HANUMAN SINGH WERE COLLEGE DROPOUTS. SH PUSHPE NDRA SINGH WAS RUNNING A SMALL RESTAURANT IN A RENTAL PLOT. II) THE PROPRIETORS OF THE ALLEGED CONCERNS WERE ME N OF MEAGRE MEANS. THEY WERE RESIDING IN PLOTS OF 50 SQ YDS AND THAT TOO WAS FIN ANCED BY THE BANK. THEY POSSESSED ONLY THREE WHEELERS AND DID NOT HAVE ANY FOUR WHEELERS. IT DID NOT TRANSPIRE THAT THEY COULD HAVE ENGAGED EMPLOYEES / STAFF TO RENDER ANY KIND OF CONSULTANCY SERVICES TO THE APPELLANT COMPANY RUNNI NG INTO SEVERAL LAKHS OF RUPEES. THEY WERE PERSONS OF SMALL MEANS AND DID NO T HAVE ANY WHEREWITHAL TO ENGAGE EMPLOYEES TO RENDER ANY KIND OF SERVICES. III) THE PROPRIETORS HAD KEPT ONLY COMPUTERIZED PRO FIT & LOSS ACCOUNT AND BALANCE SHEET AND DID NOT HAVE ANY BILLS / VOUCHERS FOR THE ALLEGED EXPENSES. THEY DID NOT HAVE ANY MUSTER ROLL OR SALARY REGISTER. EVEN THE V OUCHERS FOR PAYMENT OF SALARIES WERE NOT PRODUCED BEFORE THE AO. INSPITE OF REPEATE D OPPORTUNITIES, THEY COULD NOT DISCLOSE THE WHEREABOUTS OF THEIR EMPLOYEES. TH EY COULD NOT STATE THE NAMES 15 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. OF THEIR EMPLOYEES. IN ADDITION TO THE ABOVE, THEY DID NOT HAVE ANY SUPPORTING / EVIDENCES FOR THE CONVEYANCE EXPENSES AND TRAVELLIN G EXPENSES. IT WAS BAFFLING TO NOTE THAT THEY DID NOT HAVE AN IOTA OF EVIDENCE FOR ANY EXPENDITURE INCURRED BY THEM IN RELATION TO THE SERVICES RENDERED FOR MARKE TING & SURVEY FEES. V) THEY COULD NOT STATE THE NAMES OF SUNDRY DEBTORS AND PERSONS TO WHAM LOANS & ADVANCES WERE GIVEN. EXCEPT FOR COMPUTERIZED BALANC E SHEET AND PROFIT & LOSS ACCOUNT, NO BOOKS OF ACCOUNT WERE MAINTAINED BY THE M. VI) IT WAS DIFFICULT TO UNDERSTAND AS TO WHY THEY H AD USED THE BOGUS ADDRESSES IN THE BILLS RAISED IN THE FAVOUR OF THE APPELLANT. EVEN T HEIR RESIDENTIAL ADDRESS WAS HIDDEN FROM THE DEPARTMENT INITIALLY. THEY COULD NO T PRODUCE ANY EVIDENCE TO THE EFFECT BEFORE THE AO THAT THE PREMISES USED IN THE BILLS WERE EVER TAKEN ON LEASE OR RENT BY THEM. NOT EVEN A SINGLE RENT RECEIPT WAS EV ER PRODUCED. V) THE APPELLANT HAD PAID THEM SURVEY FEES AT THE R ATE OF RS. 70 TO RS 100 PER EMPLOYEE WHEREAS SH HANUMANT SINGH HAD ADMITTED BEF ORE THE AO THAT THEY WERE PAYING REMUNERATION TO THEIR EMPLOYEES AT THE RATE OF RS. 120 PER EMPLOYEE. NO CONTRACTOR COULD HAVE PAID MORE THAN WHAT HE RECEIV ED FROM HIS PRINCIPALS. THEREFORE THERE WERE CONTRADICTIONS IN THE STATEMEN T OF THE APPELLANT AND THAT OF SH. HANUMANT SINGH. VI) THE BANK STATEMENTS OF THE ALLEGED CONCERNS SHO WED THAT THERE WERE CASH WITHDRAWALS IMMEDIATELY AFTER THE DEPOSITS OF CHEQU ES ON THE SAME DAY. THE AO OBTAINED PAY-IN-SLIPS FROM THE BANK BUT THESE WERE UNSIGNED. THEREFORE IT COULD NOT BE ASCERTAINED AS TO WHO HAD DEPOSITED THE CHEQ UES IN THE BANK ACCOUNT OF THE ALLEGED CONCERNS. CONSIDERING THE INQUIRIES MADE BY THE AO, THE CLAI M OF THE APPELLANT WAS NOT FOUND TO BE GENUINE. IN THE CASE OF EMSAN TOOLS MFG CORPORATION VS ITO (207 CTR 577) , THE ASSESSEE CLAIMED DEDUCTION OF RS. 12,19,587 A S COMMISSION FOR RENDERING SERVICES LIKE LIAISONING FOR PROCUREM ENT OF ORDERS, GETTING MATERIAL PASSED AND RELEASE OF PAYMENTS ETC., PAID TO M/S VA SHISHT INDUSTRIAL PRODUCTS (P.) LTD. THE ASSESSING OFFICER REJECTED THIS CLAIM ON T HE GROUND THAT THE ASSESSEE FAILED TO ESTABLISH THAT THE COMMISSION WAS WHOLLY AND EX1USIVELY FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. THIS, VIEW WAS REVERSE D BY THE COMMISSIONER (APPEALS) WITH THE OBSERVATION THAT THE ASSESSEE HA D PAID SIMILAR COMMISSION IN THE PREVIOUS YEARS AND THAT SHRI AMARJEET DHAL HAD CONFIRMED THAT THE PAYMENT HAD BEEN GIVEN FOR THE SERVICES RENDERED BY SHRI P. D. SHARMA. M/S VASHISHT INDUSTRIAL PRODUCTS (P.) LTD. HAD USED THEIR OWN RE SOURCES TO GET THE WORK DONE FOR THE ASSESSEE-COMPANY. ON FURTHER APPEAL BY THE REVENUE, THE TRIBUNAL SET ASIDE THE VIEW TAKEN BY THE CIT AND RESTORED THE VI EW TAKEN BY THE ASSESSING OFFICER. THE TRIBUNAL GAVE FOLLOWING REASONS IN SUP PORT OF THIS VIEW:- I) FIRST, ACCORDING TO SHRI BRIJESH KUMAR AND SHRI AMARJEET D HAL, SHRI P.D. SHARMA RENDERED VARIOUS SERVICES LIKE PROCURING ORDERS, CO LLECTION OF PAYMENTS, 16 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. PROCURING DRAWING AND COLLECTING PAYMENTS FROM VARI OUS PARTIES. HE WAS ALSO RESPONSIBLE FOR COLLECTING 'C' FORMS AND ST DECLARA TION WHEREAS, SHRI P.D. SHARMA STATED THAT HE ONLY PROVIDED KNOWLEDGE TO TH E ASSESSEE-COMPANY FOR UPGRADATION OF THEIR PRODUCTS AND TO IMPROVE THEIR PRODUCTIVITY AND HAD TAKEN THE MANAGEMENT OF THE ASSESSEE COMPANY ALONG WITH ITS P RODUCTS TO VARIOUS TRACTOR MANUFACTURING COMPANIES. HE FURTHER CLAIMED THAT HI S SERVICES WERE OF COMPREHENSIVE NATURE AND NOT IN GENERAL SENSE OF LI AISON AND SO HE WAS NOT REQUIRED TO SHUTTLE FROM VARIOUS MANUFACTURERS. IN HIS STATEMENT HE NOWHERE STATED THAT HE COLLECTED DRAWINGS FOR PROCURING ORD ERS, COLLECTED 'C' FORMS, ST DECLARATIONS COLLECTED PAYMENTS FROM VARIOUS COMPAN IES ETC., AS STATED BY SHRI AMARJEET DHAL. II) SECOND, SHRI P.D. SHARMA COULD N OT TELL THE RATE OF THE COMMISSION OR THE BASIS OF PAYMENT OF COMMISSION SP ECIALLY WHEN SHRI P.D. SHARMA WAS CLAIMED TO HAVE PERSONALLY RENDERED VARI OUS SERVICES TO THE ASSESSEE ON BEHALF OF HIS COMPANY M/S VASHISHT INDUSTRIAL PR ODUCTS (P) LTD. OF WHICH HE WAS THE DIRECTOR AND THE ASSESSEE-COMPANY SPECIFICA LLY ALLEGED TO HAVE PAID COMMISSION @ 2 PER CENT OF THE SALES. III) THIRDLY, THE ASSESSEE HAD NOT FILED ANY DOCUMENTARY EVIDENCE TO PROVE THE NATURE OF SERVICE S REQUIRED TO BE RENDERED BY M/S VASHISHT INDUSTRIAL PRODUCTS (P) LTD. NOR REGAR DING THE RATE OF COMMISSION REQUIRED TO BE PAID FOR THE SERVICES BY THE ASSESSE E COMPANY TO M/S VASHISHT INDUSTRIAL PRODUCTS (P) LTD. IV) FOURTHLY, THE ASSESSEE HAD SHOWN TAXABLE INCOME OF MORE THAN RS. 46 LAKHS AND M/S VASHISHT I NDUSTRIAL PRODUCTS (P) LTD. SHOWED ITS TOTAL INCOME AT RS. 59,441 WHEREAS THE INCOME FROM COMMISSION HAS BEEN SHOWN AT RS. 23,20,982 WHICH MEANT THAT TH E INCOME SHOWN BY M/S VASHISHT INDUSTRIAL PRODUCTS (P) LTD. WAS QUITE NO MINAL AND THEREFORE, IT COULD NOT BE RULED OUT THAT IN ORDER TO REDUCE ITS TAX LI ABILITY, WITHOUT CORRESPONDING TAX LIABILITY IN THE HANDS OF THE RECIPIENT THE ASS ESSEE SHOWED THE PAYMENT OF COMMISSION TO EVADE CORRECT TAX LIABILITY. IT WAS HELD BY HON'BLE PUNJAB & HARYANA HIGH COURT THAT THE TRIBUNAL INTER ALIA HEL D THAT OTHER INCOME OF M/S VASHISHT INDUSTRIAL PRODUCTS (P) LTD. TO WHOM COMMI SSION OF RS. 23,20,982 WAS PAID WAS ONLY RS. 59,441 WHICH CREATED DOUBT ABOUT PAYMENT OF COMMISSION. FURTHER ABSENCE OF A WRITTEN DOCUMENT CONTAINING TE RMS OF THE AGREEMENT WITH A PERSON TO WHOM COMMISSION WAS BEING PAID IN LAKHS, DISCREPANCIES IN THE STATEMENTS OF THE ASSESSEE AND SH. P.D. SHARMA, BRI JESH KUMAR, IGNORANCE OF THE RECIPIENT OF COMMISSION ABOUT THE RATE OF COMMISSIO N DID NOT INSPIRE CONFIDENCE. SEEKING CROSS-EXAMINATION OF THE WITNESSES WHILE FI LING WRITTEN ARGUMENTS BEFORE THE TRIBUNAL WOULD NOT IMPROVE THE CASE OF THE ASSE SSEE WHEN THE ENTIRE MATERIAL WAS DISCLOSED IN THE ORDER OF ASSESSMENT AND FIRST APPEAL. IT WAS HELD THAT THE VIEW TAKEN BY THE TRIBUNAL WAS CERTAINLY A POSSIBLE VIEW. SIMILARLY THE HON'BLE JAIPUR ITAT IN THE CASE OF ACIT VS MEHRU ELECTRICAL & ENGG PVT LTD (128 ITD 247) UPHELD THE DISALLOWANCE OF COMMISSION WHEN THE ASS ESSEE COULD NOT PRODUCE ANY EVIDENCE FOR RENDERING OF SERVICES BY THE COMMI SSION AGENT. IN THE CITED CASE, THE AO NOTICED THAT NO PROOF OF SUBSTANTIAL EFFORTS MODE FOR EARNING OF COMMISSION HAD BEEN FURNISHED. THE EXPENSES DEBITED BY THE RECIPIENTS DID NOT INDICATE THAT THEY HAD MADE EXPENSES RELATING TO PH ONE CALL, MEETING EXPENSES, FREQUENT TRAVELLING, DISCUSSION, COMPETITORS REPORT ETC. AND THIS SHOWED THAT 17 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. PAYMENT OF COMMISSION WAS NOT A GENUINE PAYMENT. FU RTHER THE RECIPIENT OF THIS INCOME, THAT WAS, SADEM INDIA LTD., HAD NOT DONE AN Y ACTIVITY NOR IT HAD ANY EXPERIENCE IN THIS LINE OF BUSINESS BY WHICH IT COU LD BE TREATED AS ENTITLED TO THIS COMMISSION INCOME. SADEM INDIA LIMITED ALSO FAILED TO PROVE THAT IT HAD DONE ANY SUCH ACTIVITY WHICH COULD MAKE IT ENTITLED TO EARN THIS COMMISSION INCOME. IT HAD DONE NO EFFORT WORTH THE NAME, HAD NO TECHNICAL EXP ERTISE FAILED TO PROVIDE ANY DOCUMENTARY, EVIDENCE OR COMMUNICATION WHICH COULD PROVE THAT IT HAD DONE ANYTHING TO EARN THIS COMMISSION INCOME. THE TRIBUN AL ACCORDINGLY HELD THAT THERE WAS NO MATERIAL TO INDICATE THAT SERVICES WER E RENDERED BY M/S SADEM INDIA LTD. NO EXPENSES FOR PROVIDING SERVICES WERE THERE. THE AMOUNT COULD NOT BE ALLOWED TO THE ASSESSEE ON THE GROUND THAT IT WAS P AID BY CHEQUE. ACCORDINGLY THE APPEAL OF THE REVENUE WAS ALLOWED. THIS DECISION IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE. THE AO ALSO NOTICED THESE DISCREPANCIES. SH HANUMA N SINGH, PROPRIETOR M/S PERFECT REQUIREMENT & CONSULTANCY SERVICES, SMT SHAKUNTALA SINGH, PROPRIETOR OF M/S A ONE MARKETING, SMT MEENA KUMARI PROPRIETOR OF M/S ANOOP MARKETING AND SMT KAMLESH KUMARI PROPRIETOR OF M/S HARSHIT MARKETING WERE MEMBERS OF A SAME FAMILY RESIDING IN A SAME HOUSE A T 411-412, KISHAN BAGH, NAYA KHEDA, AMBABARI, JAIPUR. THEY WERE RESIDING IN ADJACENT TWO PLOTS HAVING AREA OF 50 SQ. YARDS EACH STATED TO BE PURCHASED BY SHRI PUSHPENDRA SINGH FEW YEARS BACK THROUGH FINANCE FROM BANK. THE EDUCATION AL QUALIFICATION OF SHRI PUSHPENDRA SINGH WAS STATED TO BE B.SC. 1 ST YEAR. SHRI HANUMAN SINGH WAS B.A. FINAL YEAR STUDENT IN 1999-2000 AS STATED BY HIM. F ROM ALL THE FACTS AND INFORMATION GATHERED DURING THE COURSE OF STATEMENT S, IT WAS SEEN THAT THEY WERE THE PERSONS OF SMALL MEANS AND DID NOT HAVE ANY RES OURCES TO CARRY OUT ANY DOOR TO DOOR SURVEY FOR THE APPELLANT COMPANY. SH. HANUM AN SINGH AND SH. MUKESH SHARMA ATTENDED THE OFFICE OF THE AO WITH ONLY A CO PY OF ACKNOWLEDGEMENT OF RETURN AND COMPUTATION OF INCOME BUT NO FINAL ACCOU NTS WERE PRODUCED / FURNISHED. ON BEING ASKED, THEY STATED THAT THEY HA D APPOINTED THE STAFF BUT WERE NOT ABLE TO TELL THE COMPLETE NAMES OR ADDRESSES OF THEIR STAFF. MOREOVER, THEY WERE UNABLE TO TELL THE TELEPHONE NUMBERS OF EVEN A SINGLE EMPLOYEE APPOINTED BY THEM. THE PROPRIETORS OF ABOVE CONCERNS DID NOT PRO DUCE EVEN A SINGLE BILL OR ANY OTHER DOCUMENT SUBMITTED TO THE ASSESSEE COMPANY FO R RECEIVING PAYMENT. INSPITE OF REPEATED OPPORTUNITIES, THEY COULD NOT SUBMIT AN Y EVIDENCE FOR HAVING WORKED FOR THE APPELLANT COMPANY. THEY DID NOT HAVE AN IOT A OF EVIDENCE TO SHOW THAT THEY HAD ACTUALLY RENDERED ANY SERVICES TO THE APPE LLANT. THE HONOURABLE DELHI HIGH COURT IN THE CASE OF SCHNEIDER ELECTRIC INDIA LTD. (304 ITR 360) HAS UPHELD THE DISALLOWANCE OF COMMISSION EVEN THOUGH T HE ASSESSEE HAD SUBMITTED DEBIT NOTES AND PAYMENT TO COMMISSION AGENT HAD BEE N MADE BY ACCOUNT PAYEE CHEQUES. IT WAS OBSERVED AS UNDER: THERE IS ABSOLUTELY NO MATERIAL ON RECORD TO SUGG EST THAT M/S RAM AGENCIES HAD PROCURED ANY SALE ORDERS FOR THE A SSESSEE. THE PRODUCTION OF A FEW BILLS OR PAYMENTS HAVING BEEN M ADE BY ACCOUNT PAYEE 18 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. CHEQUES CANNOT BY ITSELF SHOW THAT M/S RAM AGENCIES HAD PROCURED SALE ORDERS FOR THE ASSESSEE. APART FROM AN INTERNAL NOT E, THERE IS NO EVIDENCE OF ANY CORRESPONDENCE OR ANY PERSONAL MEETINGS, ETC ., BETWEEN THE ASSESSEE AND M/S RAM AGENCIES TO SUGGEST THAT THERE WAS ANY RELATIONSHIP ON THE BASIS OF WHICH M/S RAM AGENCIES PROCURED SOM E ORDERS FOR THE ASSESSEE FOR WHICH IT WAS ENTITLED TO RECEIVE COMMI SSION. MOREOVER, WE FIND THAT THE UNDERSTANDING BETWEEN THE PARTIES WAS AN ORAL UNDERSTANDING AND IT APPEARS TO BE DOUBTFUL THAT SUCH AN ORAL UND ERSTANDING CAN BE ARRIVED AT WITHOUT ANY LONGSTANDING RELATIONSHIP HA VING BEEN ESTABLISHED BETWEEN THE ASSESSEE AND M/S RAM AGENCIES. IT SEEMS A BIT OUT OF PLACE THAT THE PARTIES ENTERED INTO AN ORAL BUSINESS RELA TIONSHIP INVOLVING SUCH HUGE AMOUNTS OF MONEY OVER A PERIOD OF TIME' IT WAS HELD BY THE HONOURABLE SUPREME COURT IN THE CASE OF LACHMINARAYAN MADAN LAL VS CIT (86 ITR 439) THAT EVEN IF THERE IS A AGREEMENT AND COMMISSION HAS BEEN PAID, IT WILL NOT BIND THE AO TO HOLD THAT PAYMENT WAS MADE FOR THE PURPOSE OF BUSINESS. THE A GREEMENT WAS A MAKE BELIEVE AND IT WAS MERELY A DEVICE TO MINIMIZE THE TAX LIABILITY OF THE ASSESSEE. IN THE PRESENT CASE, THERE IS NO EVIDENCE THAT M/S PER FECT N MARKETING AND M/S ANEU MARKETING HAD NECESSARY WHEREWITHAL TO RENDER ANY K IND OF SERVICES RELATING TO DOOR TO DOOR SURVEY. THESE CONCERNS HAD GIVEN WRONG ADDRESS IN THEIR BILLS AND IT WAS DIFFICULT TO BELIEVE THAT IT COULD HAVE EMPLOYE D A LARGE NUMBER OF PERSONS TO RENDER ANY SERVICES. IT WAS HELD IN THE CASE OF CIT VS PREMIER BREWERIES LTD (279 ITR 51) THAT THE BURDEN OF PROVING THE DEDUCTI BILITY OF AN EXPENDITURE WAS ON THE ASSESSEE. THE MERE FACT THAT THE PAYMENT HAD BEEN MADE UNDER CONTRACT OR AN AGREEMENT WAS NOT CONCLUSIVE THAT THE EXPENDITUR E HAD BEEN LAID OUT WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS. SIMILARLY IN THE CASE OF ONAM AGARBATHIS CO VS. DCIT (310 ITR 56) , THE HONOURABLE KARNATAKA HIGH COURT HELD THAT THOUGH A TAXPAYER MIGHT RESORT TO A DEVIC E TO DIVERT THE INCOME BEFORE IT ACCRUED OR AROSE TO HIM, THE EFFECTIVENESS OF THE D EVICE DEPENDED UPON ITS GENUINENESS. THE SUBSTANCE OF THE TRANSACTION HAD T O BE ASSESSED BY APPLYING THE TAXING STATUTE SO AS TO ASCERTAIN WHETHER IT WAS A SHAM OR MAKE BELIEVE TRANSACTION OR ONE WHICH WAS GENUINE AND, THEREFORE , WAS ELIGIBLE FOR DEDUCTION UNDER THE INCOME TAX ACT. HENCE, COURTS HAD TO LOOK INTO THE FORM OF THE TRANSACTION TO FIND OUT ITS SUBSTANCE SO9 AS TO ENS URE THAT THERE WAS NO AVOIDANCE OF TAX BY A METHOD IMPERMISSIBLE IN LAW. IN THE CIT ED CASE, THERE WAS NO EVIDENCE REGARDING ANY SERVICES RENDERED BY THE FIRM EXCEPT TO THE ASSESSEE. IT WAS HELD THAT CREATION OF THE FIRM WAS A DEVICE FOR SIPHONIN G OFF PROFITS OF ASSESSEE IN FORM OF COMMISSION AND MARKETING AND SALES PROMOTION EXP ENSES. IN THE CASE OF CIT VS MCDOWELL CO LTD. (291 ITR 107) , COMMISSION PAID TO AGENTS WAS DISALLOWED AS THERE WAS NO EVIDENCE TO PROVE THAT THE COMMISSI ON AGENTS HAD RENDERED ANY SERVICES TO THE ASSESSEE. ACCORDINGLY IT WAS HELD T HAT THE ASSESSEE WAS NOT ENTITLED TO DEDUCTION OF COMMISSION. 19 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. NO COGNIZANCE CAN BE ACCORDED TO THE FACT THAT THE RECIPIENTS HAD FILED THEIR RETURNS OF INCOME WHEREIN THE SURVEY FEES PAI D BY THE APPELLANT HAD BEEN OFFERED TO TAX. IT WAS HELD BY HONOURABLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF MITTAL BELTING AND MACHINERY STORES VS CIT (253 ITR 341) THAT IF ON THE EXAMINATION OF THE EVIDENCE, IT WAS FOUND THAT THER E WAS NO GENUINE TRANSACTION BETWEEN THE PARTIES, A PURE PAPER TRANSACTION COULD NOT HAVE ENTITLED THE ASSESSEE TO CLAIM BENEFIT UNDER THE LAW. DESPITE THE DOCUMEN TATION SUPPORTING THE CLAIM OF THE ASSESSEE SUPERFICIALLY, THE EVIDENCE COULD NOT BE ACCEPTED IN VIEW OF THE SURROUNDING CIRCUMSTANCES AND HUMAN PROBABILITIES. THERE WERE CERTAIN FEATURES IN THE PRESENT CASE WHICH BELIED THE DOCUMENTARY EV IDENCE. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS AND THE FACTS OF THE PRESENT CA SE, I AM OF THE OPINION THAT THE ASSESSEE HAS MISERABLY FAILED TO SUBSTANTIATE ITS C LAIM OF MARKETING AND SURVEY FEES. I THEREFORE UPHOLD THE ADDITION OF RS. 43,36, 835/- MADE BY THE AO. THIS GROUND OF APPEAL IS DISMISSED. IN THE IDENTICAL FACTS, THE ISSUE WAS EXAMINED IN G REAT DETAIL BY MY LEARNED PREDECESSOR. CONSIDERING ENTIRETY OF FACTS, APPELLA NTS SUBMISSIONS AND ASSESSING OFFICERS INVESTIGATION ON THE ISSUE, CIT(A) REACHE D THE CONCLUSION THAT APPELLANT FAILED TO SUBSTANTIATE ITS CLAIM OF MARKETING AND S URVEY FEES IN RESPECT OF CERTAIN PARTIES. SINCE FACTS OF THIS YEAR ARE ALSO SAME, TH E AFORESAID OBSERVATIONS AND DECISION OF MY LEARNED PREDECESSOR SQUARELY APPLIES TO THIS YEAR ALSO. RESPECTFULLY FOLLOWING THE AFORESAID DECISION, THE ADDITION MADE BY THE ASSESSING OFFICER BY DISALLOWING MARKETING AND SURVEY FEES TO THE EXTENT OF RS. 6773510 IS TREATED AS NON-GENUINE AND ACCORDINGLY CONFIRMED. THE LD. CIT (A) CONFIRMED THE ADDITION CONSIDERING THE ASSESSEES REPLY ON IDENTICAL ISSUE CAME UP IN THE ASSESSMENT YEAR 2008-09 IN THE ASSESSEES OWN CASE AND APPEAL DECIDED BY HIS PREDECESSOR LD. CIT (A) WHICH HAS BE EN REPRODUCED BY LD. CIT (A) AT PAGES 22, 23, 24,25,26, 27, 28, 29 OF THE APPELLATE ORDER AND HELD THAT ON THE IDENTICAL FACTS, THE ISSUE WAS EXAMINED AT GREAT DETAIL BY HI S LEARNED PREDECESSOR CONSIDERING ENTIRETY OF FACTS, THE APPELLANTS SUBMISSION AND A SSESSING OFFICERS INVESTIGATION ON THE ISSUE, THE LD. CIT (A) REACHED THE CONCLUSION THAT APPELLANT FAILED TO SUBSTANTIATE ITS CLAIM OF MARKETING AND SURVEY FEES IN RESPECT OF CE RTAIN PARTIES. SINCE FACTS OF THIS YEAR 20 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. ARE ALSO SAME, THE AFORESAID OBSERVATIONS AND DECIS ION OF HIS LEARNED PREDECESSOR ARE SQUARELY APPLIED TO THIS YEAR ALSO. ACCORDINGLY HE CONFIRMED THE ADDITION. 10. NOW THE ASSESSEE IS BEFORE US. 11. THE LD. A/R FOR THE ASSESSEE SUBMITTED THAT HON BLE BENCH WHILE DECIDING THE APPEAL OF THE ASSESSEE FOR A.Y. 2005-06, 06-07 AND 08-09 HAD DELETED THE DISALLOWANCES MADE OUT OF MISCELLANEOUS EXPENSES. THE LD. A/R DRAWN OUR ATTENTION ON OPERATIVE PORTION OF THE DECISION. THE ASSESSEE COM PANY HAS TOUGH COMPETITION WITH ANOTHER NEWSPAPER KNOWN AS DAINIK BHASKAR IN RAJAST HAN STATE. THE ASSESSEE COMPANY ADOPTED A SYSTEM OF CONDUCTING DOOR TO DOOR SURVEY SO AS TO COLLECT THE INFORMATION REGARDING READERS OF THE NEWSPAPER PUBLISHED BY IT AND THE READERSHIP OF THE NEXT COMPETITIVE NEWSPAPER IN A PARTICULAR AREA. THE COM PANY ALSO WANTED TO SUSTAIN AND INCREASE THE PRESENT READERSHIP BASE AND TO CONVERT THE READERS OF OTHER COMPETITIVE NEWSPAPER TO THE NEWSPAPER PUBLISHED BY THE ASSESSE E COMPANY. FURTHER, ASSESSEE COMPANY WANTED TO KNOW THE PROFILE OF THE READERS W HICH MAY ULTIMATELY TURN INTO THE INCREASE IN THE ADVERTISEMENT REVENUE. THE PURPOSE OF THE SURVEY WAS TO IDENTIFY THE AREA WHERE VIGOROUS MARKETING AND PROMOTION ARE REQ UIRED TO INCREASE THE SALES AND READERSHIP OF THE NEWSPAPER AND SUCH EXERCISE HAS U LTIMATELY REFLECTED IN THE RANDOM SURVEY CONDUCTED BY THE INDEPENDENT CREDIT/CIRCULAT ION RATING AGENCIES LIKE IRS/NRS, WHOSE RESULTS ARE WIDELY ACCEPTED IN THE PRINT MEDI A BUSINESS AND OTHER GOVERNMENT AGENCIES ALLOTTING VARIOUS LICENSES. THE ASSESSEE C OMPANY HAD APPOINTED 9 INDEPENDENT PARTIES TO CONDUCT THE SURVEY IN AND AROUND THE MUN ICIPAL LIMITS OF JAIPUR DISTRICT. THE SAID FIRMS HAD CONDUCTED THE SURVEY BY THEIR SELF H IRED STAFF, WHO HAD VISITED DOOR TO 21 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. DOOR IN A PARTICULAR AREA ON A PARTICULAR DAY AND C OLLECTED THE INFORMATION, LIKE NUMBER OF HOUSE WHERE ASSESSEES NEWSPAPER IS READ, OTHER COMPETITIVE NEWSPAPER IS READ, WHERE BOTH THE NEWSPAPERS ARE READ AND NO NEWSPAPER IS READ. WITH THE HELP OF THIS MARKETING TECHNIQUE, THE RECEIPTS OF THE ASSESSEE C OMPANY HAD INCREASED SUBSTANTIALLY. THUS THE AO HAD ACCEPTED THE TRADING RESULTS HIMSEL F. COPIES OF THESE REPORTS WERE SUBMITTED DURING THE ASSESSMENT PROCEEDINGS BEFORE THE AO WHO HAD FAILED TO POINT OUT A SINGLE INSTANCE OF ANY MIS-STATEMENT IN SUCH REPORT AND MERELY BY ALLEGING THAT THE ASSESSEE HAD FAILED TO PUT FORTH ANY SUBSTANTIV E EVIDENCE WHICH COULD AUTHENTICATE THE CLAIM OF THE ASSESSEE EVEN THOUGH THE ENTIRE BO OKS OF ACCOUNTS ALONG WITH THE RELEVANT BILLS/VOUCHERS AND OTHER REPORTS INCLUDING THE SURVEY REPORTS WERE MADE AVAILABLE FOR EXAMINATION AND WITHOUT EVEN VERIFYIN G THE COMPLETE SET OF THE SURVEY REPORTS AVAILABLE WITH THE ASSESSEE COMPANY INCLUDI NG THE SURVEY REPORT SUBMITTED BY THE INDEPENDENT PARTIES, THE ALLEGATION LEVIED, DES ERVES TO BE IGNORED AND EXCLUDED AS THE SAME IS BASED ON MERE CONJECTURES, SURMISES AND SUSPICION WITHOUT REFERRING TO THE CREDIBLE EVIDENCES AND MATERIAL AVAILABLE ON RECORD . THE TOTAL EXPENSES CLAIMED BY THE ASSESSEE COMPANY WAS RS. 3,70,19,437/-, OUT OF WHIC H THE LD. AO HAD DISALLOWED RS. 67,73,510/-. NECESSARY BILLS/VOUCHERS WERE PRODUCED BEFORE THE AO AND THESE PARTIES HAD RENDERED THE SERVICES IN MARKETING AND PAYMENTS WERE PASSED BY THE DIRECTOR OF THE COMPANY AFTER VERIFICATION. IN THE STATEMENTS OF SHRI PUSHPENDRA SINGH, PROP. OF M/S. ANEU MARKETING AND SHRI HANUMAN SINGH, PROP. O F M/S. PERFECT N MARKETING RECORDED BY THE AO, THEY HAVE ADMITTED HAVING RENDE RED THE SERVICES TO THE ASSESSEE. THE ASSESSEE FILED THE AFFIDAVITS AND COPIES OF RET URNS IN RESPECT OF THE PROPRIETORS OF 22 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. M/S. LAKSHYA MARKETING, ANOOP MARKETING, HARSHIT MA RKETING, SHARMA MARKETING AND A- ONE MARKETING DULY CONFIRMING THE FACT THAT THEY HA VE CONDUCTED DOOR TO DOOR SERVICES ON BEHALF OF THE ASSESSEE AND ALSO FILED EVIDENCES WHICH REMAINED UNCONTROVERTED. HE FURTHER HAS DRAWN OUR ATTENTION TO SECTION 37 AND A LSO RELIED ON THE DECISION IN THE CASE OF UMA CHARAN SHAW & BROS. CO. VS. CIT, 37 ITR 271 (SC). FURTHER, HE ARGUED THAT SUSPICION HOWSOEVER STRONG CANNOT TAKE THE PLACE OF PROOF, FOR WHICH HE RELIED UPON THE FOLLOWING DECISIONS :- 37 ITR 151 OMAR SALAY MOHAMMAD SAIT VS. CIT 26 ITR 736 DHIRAJLAL GIRDHARILAL VS. CIT 26 ITR 775 DHAKESHWARI COTTON MILLS LTD. VS. CIT 37 ITR 288 LAL CHAND BHAGAT AMBICA RAM VS. CIT 91 ITR 8 CIT VS. CALCUTTA DISCOUNT COMPANY LTD. THE LD. A/R ARGUED THAT THE AO CANNOT WALK INTO THE SHOES OF THE BUSINESSMAN TO VERIFY THE NECESSITY OR THE BUSINESS EXPEDIENCY. HE FURTH ER RELIED ON THE CASE OF EMPIRE JUTE CO. LTD. VS. CIT, 124 ITR 1 (SC) AND S.A. BUILDERS VS. CIT, 158 TAXMAN 74 (SC) AND ARGUED THAT IT WAS A BUSINESS NEED TO INCUR THE EXP ENDITURE ON MARKETING. THEREFORE, HE REQUESTED TO DELETE THE ADDITION CONFIRMED BY LD . CIT (A). 12. AT THE OUTSET, THE LD. CIT DR VEHEMENTLY SUPPOR TED THE ORDER OF THE LD. CIT (A) AND REITERATED THE ARGUMENTS GIVEN BY THE LOWER AUT HORITIES THAT THESE PARTIES DID NOT HAVE ANY CAPACITY/EXPERTISE TO RENDER THE REQUIRED SERVICES FOR WHICH PAYMENT HAD BEEN MADE BY THE ASSESSEE. THEREFORE, HE REQUESTED TO UPHOLD THE ORDER OF LD. CIT (A). 13. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 519, 520 AND 23 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. 521/JP/2012 FOR A.Y 2005-06, 06-07 AND 08-09 HAD CO NSIDERED IDENTICAL ISSUE AND SET ASIDE THE ISSUE TO THE FILE OF AO BY OBSERVING IN P ARA 4.15 OF THE ORDER AS UNDER :- 4.15. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SE THE MATERIAL AVAILABLE ON RECORD. AS THE FACTS EMERGE THE RECORD AND EVIDENCE IN THIS BEHALF HAS SURFACED IN PIECE MEAL AND FROM TIME TO TIME AS THE ASSESSEE ATTEMPTED TO FILL IN THE GAPS ABOUT INFERENCES DRAW N BY THE AUTHORITIES FROM TIME TO TIME. CONSEQUENTLY A COHESIVE VERIFICA TION OF MATERIAL APPEARS TO BE NOT MADE. ASSESSEE HAS PRODUCED THE I NCOME TAX RECORD OF THE SURVEY AGENCIES WHICH IN SUPPORT OF ITS VERSION ; THERE EXIST NO REASONING AS TO WHY THEY ARE BEING IGNORED BY LD. A O & CIT (A). THERE EXIST CONFLICTING CLAIMS ABOUT THE EXISTENCE OF SUC H SURVEY AGENCIES COUPLED WITH NON SUPPLY OF INSPECTORS REPORT AND NO N-ALLOWING THE CUSTOMARY RIGHT OF CROSS EXAMINING THE DENYING WITN ESSES. THUS ASSESSEE HAS MADE OUT A CASE FOR VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. IN THE ENTIRETY OF FACTS AND CIRCUMSTANCES WE ARE INCLINED TO SET ASIDE THE ISSUES RELATING TO MARKETING AND SURVEY EXPENSES BACK TO T HE FILE OF AO TO DECIDE AFRESH AFTER CONSIDERING THE ENTIRE EVIDENCE AND GI VING THE ASSESSEE AN ADEQUATE OPPORTUNITY OF BEING HEARD. THE FACTS AND CIRCUMSTANCES IN THIS CASE ARE IDENTI CAL. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF COORDINATE BENCH OF THE TRIBUNAL, W E SET ASIDE THIS ISSUE TO THE FILE OF AO TO RECONSIDER THIS ISSUE AS PER THE DIRECTION GI VEN BY THE COORDINATE BENCH IN PRECEDING YEARS. ACCORDINGLY THIS GROUND IS SET AS IDE. 14. IN REVENUES APPEAL THE FIRST GROUND IS IN RESP ECT OF ALLOWING ADDITIONAL DEPRECIATION CLAIMED AT RS. 54,34,045/- ON PLANT AN D MACHINERY. 14.1. THE AO OBSERVED THAT ASSESSEE HAD CLAIMED ADD ITIONAL DEPRECIATION AT RS. 54,34,045/- UNDER SECTION 32(1)(IIA) OF THE IT ACT OVER AND ABOVE THE NORMAL 24 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. DEPRECIATION CLAIMED BY THE ASSESSEE. THE AO GAVE R EASONABLE OPPORTUNITY OF BEING HEARD ON THIS ISSUE WHICH WAS RESPONDED BY THE ASSE SSEE. AFTER EXAMINING THE ASSESSEES SUBMISSION, THE AO HELD THAT AS PER SECT ION 32(1)(IIA), THE BENEFIT OF ADDITIONAL DEPRECIATION IS ALLOWABLE TO THE ASSESSE E WHO ARE ENGAGED IN THE BUSINESS OF MANUFACTURE OR PRODUCTION OF ANY ARTICLE OR THING. THE ASSESSEE DID NOT MANUFACTURE OR PRODUCE ANY ARTICLE OR THING. IT SIMPLY PRINTS THE NEWSPAPER WHICH CANNOT BE TERMED AS MANUFACTURE OR PRODUCTION. THE RAW MATERIAL IN THE FORM OF NEWSPRINT REMAINS ONLY IN THE FORM OF NEWSPRINT. NEITHER ANY MANUFACTURING OF NEWSPRINT WORK IS DONE NOR ANY OTHER RAW MATERIAL ARE MIXED IN THE NEWSPRINTS. THU S NO NEW ARTICLE OR THING COMES UP WHICH CAN BE TERMED AS MANUFACTURING OF ARTICLE. H E FURTHER RELIED ON THE ORDER OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. PIO FO OD PACKERS (1980) 46 ITR 63 (SC), UNION OF INDIA VS. DELHI CLOTH AND GENERAL MILLS (1 977) ELT(J) 199 (SC), SOUTH BIHAR SUGAR MILLS VS. UNION OF INDIA (1978) ELT(J)(3) (SC) , EMPIRE INDUSTRIES LTD. VS. UNION OF INDIA (1986) 162 ITR 846 (SC) ON MANUFACTURING. TH E ASSESSEE ITSELF HAD NOT TREATED THE PRINTING AND PUBLICATION ACTIVITY AS MANUFACTUR E IN THE PAST AND NO ADDITIONAL DEPRECIATION HAS BEEN CLAIMED BY THE ASSESSEE IN TH E PAST. THEREFORE, HE DISALLOWED THE ADDITIONAL DEPRECIATION CLAIMED BY THE ASSESSEE OF RS. 54,34,045/-. 15. BEING AGGRIEVED BY THE ORDER OF THE AO, ASSESSE E CARRIED THE MATTER BEFORE LD. CIT (A) WHO HAD DELETED THE ADDITION BY OBSERVING A S UNDER :- 11.3. I HAVE CONSIDERED THE FACTS OF THE CASE; ASSESSMENT ORDER AND APPELLANTS WRITTEN SUBMISSION. AGAINST THIS DISALL OWANCE, APPELLANT SUBMITTED THAT IDENTICAL ISSUE CAME UP IN ASSESSMEN T YEAR 2008-09 AND CIT (A) WHILE DECIDING APPEAL BY APPEAL ORDER DATED 28.3.2012 ALLOWED 25 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. ADDITIONAL DEPRECIATION. RELEVANT EXTRACT OF THE OR DER OF CIT (A) IS QUOTED BELOW I HAVE DULY CONSIDERED THE SUBMISSIONS OF THE APP ELLANT. DURING THE YEAR UNDER REFERENCE, THE APPELLANT HAD CLAIMED ADDITIONAL DEPRECIATION OF RS. 35,31,480/- ON THE NEW PLANT & MACHINERY INSTALLED IN ITS BRANCHES. THE AO WAS OF THE OPINIO N THAT THE APPELLANT WAS NOT ENGAGED IN ANY MANUFACTURING ACTI VITIES OR PRODUCTION OF ANY ARTICLE OR THING. THE AO HELD THA T PRINTING ON PAPER DID NOT TANTAMOUNT TO ANY MANUFACTURING ACTIV ITY AS NO NEW COMMODITY HAD COME INTO EXISTENCE. THE AO WAS AGGRI EVED WITH THE FACT THAT NO SUCH ADDITIONAL DEPRECIATION WAS C LAIMED IN THE EARLIER YEARS THOUGH IT WAS ADMISSIBLE. THEREFORE, THE AO DISALLOWED THE CLAIM OF ADDITIONAL DEPRECIATION OF RS. 35,31,480/-. ON CAREFUL CONSIDERATION OF FACTS, I AM INCLINED TO ACCEPT THE ARGUMENTS OF THE APPELLANT. DURING THE YEAR UNDER R EFERENCE, NEW PRINTING MACHINES WERE INSTALLED AT JAIPUR, JODHPUR AND UDAIPUR. THE APPELLANT WAS PRINTING THE ROLL OF PAPER WITH T HE HELP OF MACHINERY AND THEREFORE IT WAS PRODUCING A NEW ARTI CLE AND THING. IT WAS ENGAGED IN THE PRODUCTION OF NEWSPAPERS AND PERIODICALS. ALL THE CONDITIONS AS STIPULATED IN SECTION 32(1)(IIA) WERE SATISFIED BY THE APPELLANT AND EVEN THE ASSESSEE ENGAGED IN THE PRODUCTION OF AN ARTICLE OR THING WAS ALSO ENTITLED TO THE ADDITI ON DEPRECIATION. SINCE NO NEW PRINTING MACHINES WERE PURCHASED IN TH E EARLIER YEARS THEREFORE NO SUCH CLAIM OF ADDITIONAL DEPRECIATION WAS MADE. SINCE THE WORD PRODUCTION WAS NOT DEFINED IN THE INCOME TAX ACT THEREFORE IT WAS IMPERATIVE TO CONSTRUE ITS GENERAL MEANING. THE WORD PRODUCTION REFERS TO APPLYING HUMAN ENDEAVOU R ON SOME EXISTING RAW MATERIAL. THEREFORE EVERY MANUFACTURE COULD BE CHARACTERIZED AS PRODUCTION, BUT EVERY PRODUCTION D ID NOT AMOUNT TO MANUFACTURE. THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF ITO VS. ARIHANT TILES & MARBLE PVT. LTD. (295 ITR 1 48) HAS HELD THAT SAWING OF MARBLE BLOCKS INTO SLABS AND TILES AMOUNT ED TO PRODUCTION AND THEREFORE THE ASSESSEE WAS ENTITLED TO DEDUCTION U/S 80IB OF THE IT ACT. THIS DECISION IS FULLY APPL ICABLE TO THE FACTS OF THE PRESENT CASE. I THEREFORE DIRECT THE AO TO A LLOW THE CLAIM OF ADDITIONAL DEPRECIATION OF RS. 35,31,480/- TO THE A PPELLANT. THIS GROUND OF APPEAL IS ALLOWED. IT IS NOT IN DISPUTE THAT FACTS OF THIS YEAR ARE SA ME AS ASSESSMENT YEAR 2008-09. THEREFORE RESPECTFULLY FOLLOWING THE AFORE SAID APPEAL ORDER ON 26 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. THE IDENTICAL FACTS, ADDITIONAL DEPRECIATION CLAIME D BY THE APPELLANT IS ALLOWED. 16. NOW THE REVENUE IS BEFORE US. 17. THE LD. D/R VEHEMENTLY SUPPORTED THE ORDER OF A O AND ARGUED THAT THESE DISALLOWANCES WERE MADE BY THE AO CONSISTENTLY ON T HE GROUND THAT ASSESSEE WAS NOT IN ANY MANUFACTURING ACTIVITY. THEREFORE, ADDITIONA L DEPRECIATION CLAIMED BY THE ASSESSEE IS NOT ALLOWABLE. THUS HE REQUESTED TO CON FIRM THE ORDER OF THE A.O. 18. AT THE OUTSET, THE LD. A/R OF THE ASSESSEE SUBM ITTED THAT HONBLE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2005-06, 06-07 AND 08- 09 HAD CONSIDERED THE IDENTICAL ISSUE AND UPHELD THE ORDER OF LD. CIT (A). HE FURT HER ARGUED THAT MANUFACTURE HAD NOT BEEN DEFINED IN SECTION 32(1)(IIA) OF THE IT ACT BU T SAME CAN BE REFERRED IN SECTION 2(29BA) OF THE IT ACT. THE ASSESSEE IS COVERED BY THE DEFINITION PROVIDED IN SECTION 2(29BA) OF THE ACT. HE FURTHER RELIED ON THE DECISI ON IN THE CASE OF CIT VS. DELHI PRESS PATRA PRAKASHAN LTD. (2013) 355 ITR 14 (DELHI), DCI T VS. M/S. MATHRUBHUMI PRINTING AND PUBLISHING CO. LTD. AND AS PER THE AMENDED PROV ISION BY FINANCE ACT 2005 WITH EFFECT FROM 1.4.2006 THE ADDITIONAL DEPRECIATION IS ALLOWABLE ONLY ON NEW PLANT AND MACHINERY. THEREFORE, HE REQUESTED TO CONFIRM THE O RDER OF THE LD. CIT (A). 19. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE COORDINATE BENCH OF THE TRIBUNAL IN ITA NO. 519 , 520 & 421/JP/2012 HAS DECIDED THIS ISSUE IN PARA 5.9 OF THE ORDER. THE OPERATIVE PORTION IS REPRODUCED AS UNDER :- 27 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. 5.9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE MATERIAL AVAILABLE ON THE RECORD REGARDING THE ISSUE OF ADDI TIONAL DEPRECIATION. IN OUR CONSIDERED VIEW NEWS PAPERS AND PERIODICALS ARE DISTINCT COMMODITY THAN THE PAPER, PRINTING INK AND OTHER INGREDIENTS USED THEREIN. SINCE A NEW COMMERCIAL PRODUCT COMES INTO EXISTENCE, THE PR OCESS INVOLVED FOR SUCH TRANSFORMATION AMOUNTS TO PRODUCTION AND MANUF ACTURE. OUR VIEW IS FORTIFIED BY HONBLE DELHI HIGH COURT AND ITAT BENC HES OF COCHIN AND AHMEDABAD. RESPECTFULLY FOLLOWING THEM WE UPHOLD TH E ORDERS OF LD. CIT (A) ON THIS ISSUE OF ADDITIONAL DEPRECIATION. APROP OS AY 2006-07, SINCE RELYING ON SAYAJI IRON AND ENGG. CASE (SUPRA), WE HA VE ALREADY HELD THAT THERE CAN BE NO ATTRIBUTION OF PERSONAL USER IN CAS E OF A LIMITED COMPANY, THE ORDER OF LD. CIT (A) DELETING THE DISALLOWANCE OF DEPRECIATION IN THIS BEHALF IS UPHELD. REVENUE APPEALS ARE THUS DISMISSE D. THE FACTS AND CIRCUMSTANCES ARE IDENTICAL IN THE PR ESENT CASE. THEREFORE, RESPECTFULLY FOLLOWING THE COORDINATE BENCH DECISION, WE ALSO UP HOLD THE ORDER OF LD. CIT (A). THUS THE REVENUES APPEAL IS DISMISSED. 20. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED WHILE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20/11/2015. SD/- SD/- YFYR DQEKJ VH-VKJ-EHUK (LALIET KUMAR) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 20 /11/2015 28 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. DAS/ VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S. RAJASTHAN PATRIKA PVT. LTD., JAI PUR. 2. IZR;FKHZ @ THE RESPONDENT- THE ACIT, CIRCLE-5, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO.187 & 223/JP/2014) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR 29 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT. 30 ITA NOS. 187 & 223/JP/2014 A.Y. 2007-08 M/S. RAJASTHAN PATRIKA PVT. LTD. VS. ACIT.