DCIT, Central Circle-1, Nashik V. M/s. Deegesh Constructions Pvt. Ltd., Nashik

ITA 1955/PUN/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2496 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 05-10-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 05-10-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ KUMAR JAIN
• Assessee Lawyers: S N DOSHI
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E , , !'!! # , $ % BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NOS. 1955 & 1956/PN/2012 $& ' !(' / ASSESSMENT YEARS : 2003-04 & 2005-06 ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, NASHIK ....... / APPELLANT )& / V/S. M/S. DEEGESH CONSTRUCTION PVT. LTD., DURGESH RESIDENCY, GANGAPUR ROAD, NASHIK PAN : AABCD5873E / RESPONDENT ASSESSEE BY : SHRI S.N. DOSHI REVENUE BY : SHRI DHEERAJ KUMAR JAIN / DATE OF HEARING : 22-12-2015 / DATE OF PRONOUNCEMENT : 18-03-2016 * / ORDER PER VIKAS AWASTHY, JM : THESE TWO APPEALS HAVE BEEN FILED BY THE REVENUE ASSAILING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I, NASHIK DAT ED 23-07-2012 FOR THE ASSESSMENT YEAR 2003-04 AND ORDER DATED 24-07-2012 FOR THE ASSESSMENT YEAR 2005-06. 2. IN ASSESSMENT YEAR 2003-04, THE REVENUE HAS ASSAILE D THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) PRIMARILY ON FOUR GROUNDS: 2 ITA NOS. 1955 & 1956/PN/2012, A.YS. 2003-04 & 2005-06 I. DELETING OF DISALLOWANCE OF EXPENDITURE ` 63,058/-. II. DELETING OF DISALLOWANCE OF DEPRECIATION ` 14,590/-. III. DELETING OF UNSECURED LOANS ` 1,00,000/-. IV. DELETING THE ADDITION OF ` 31,75,000/- ON ACCOUNT OF ADVANCES RECEIVED AGAINST BOOKING OF FLATS. APART FROM THE ABOVE, THE DEPARTMENT HAS RAISED OBJECT ION AGAINST THE ACTION OF COMMISSIONER OF INCOME TAX (APPEALS) ADMITTING THE APPEAL FILED BY THE ASSESSEE IN VIOLATION OF PROVISIONS O F SECTION 249(4)(A) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) AND VIOLATION OF PROVISIONS OF RULE 46A OF THE INCOME TAX RULES. 3. THE FIRST ISSUE RAISED BY THE DEPARTMENT IN GROUND NO S. 1 AND 2 OF THE APPEAL RELATES TO DELETING OF DISALLOWANCE OF EXPENS ES. THE ASSESSEE HAS CLAIMED EXPENDITURE OF ` 7,38,843/- IN RESPECT OF ADVERTISEMENT, PAYMENT OF COMMISSION, SECURITY CHARGES AND TRANSPORTATION EXPENSES. THE ASSESSING OFFICER MADE AD H OC DISALLOWANCE OF ` 1,00,000/- ON THE GROUND THAT THE ABOVE SAID EXPENSES ARE IN THE NATURE REQUIRING TDS ON THE PAYMEN TS TO BE MADE. THE ASSESSEE HAS NOT DEDUCTED TAX AT SOURCE ON THE SAID PAYMENTS. FURTHER, EXPENDITURE RELATING TO CONVEYANCE AND TELEPHON E ARE NOT FULLY VERIFIABLE. IN FIRST APPEAL THE ASSESSEE PLACED ON RECORD T HE DETAILS OF LEDGER EXTRACTS AND BILLS/VOUCHERS TO SUBSTANTIATE ITS CLA IM. THE CONTENTION OF THE ASSESSEE IS THAT THE MOST OF THE PAYM ENTS ARE MADE THROUGH ACCOUNT PAYEE CHEQUES AND ARE THUS VERIFIABLE. THE ASSESSEE IS MAINTAINING PROPER BOOKS OF ACCOUNT WHICH ARE SUBJECT TO AUDIT. THE ASSESSING OFFICER HAS NOT REJECTED THE BOOKS OF ACCOUNT BEFORE MAKING SUCH AD HOC DISALLOWANCE. THE COMMISSIONER OF INCOME TAX (APPEALS) AFTER EXAMINING THE DOCUMENTS ON RECORD AND SEEKING THE REMAND 3 ITA NOS. 1955 & 1956/PN/2012, A.YS. 2003-04 & 2005-06 REPORT OF THE ASSESSING OFFICER RESTRICTED THE DISALLOWANCE TO 5% OF THE EXPENSES I.E. ` 36,942/-. 4. IT IS AN UNDISPUTED FACT THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE SUBJECT TO AUDIT AND MAJORITY OF THE PAYMENTS ARE MADE THROUGH CHEQUES. THE OBSERVATION OF THE ASSESSING OFFICER THAT MO ST OF THE PAYMENTS ARE SUBJECT TO TDS BUT NO TDS HAS BEEN DED UCTED BY THE ASSESSEE ON SUCH PAYMENTS HAS ABSOLUTELY NO RELEVANC E FOR MAKING DISALLOWANCE. THE PROVISIONS RELATING TO DISALLOWANCE ON SUCH PAYMENTS WAS INSERTED IN THE ACT W.E.F. ASSESSMENT YEAR 2 005-06. THE ASSESSING OFFICER HAS ESTIMATED DISALLOWANCE OF ` 1,00,000/- WHICH IS 13.53% OF TOTAL EXPENDITURE. IN FIRST APPEAL THE COMMISSIONE R OF INCOME TAX (APPEALS) HAS RESTRICTED THE DISALLOWANCE TO 5% I.E. ` 36,942/- OF THE EXPENDITURE CLAIMED. THE LD. DR HAS NOT BE EN ABLE TO CONTROVERT THE FINDINGS OF COMMISSIONER OF INCOME TAX (APP EALS). THUS, IN VIEW OF THE FACTS OF THE CASE AND DOCUMENTS ON R ECORD WE DO NOT FIND ANY INFIRMITY IN THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN RESTRICTING THE DISALLOWANCE TO ` 36,942/-. ACCORDINGLY, GROUND NOS. 1 AND 2 RAISED IN THE APPEAL OF THE DEPARTME NT IS DISMISSED. 5. IN GROUND NO. 3 THE DEPARTMENT HAS ASSAILED THE FINDING S OF COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING DISALLOWANCE OF DEPRECIATION ` 14,590/-. THE CONTENTION OF THE DEPARTMENT IS THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAS NO T FURNISHED THE EVIDENCE IN RESPECT OF OWNERSHIP OF THE ASSETS AND PROOF THAT THE ASSETS WERE PUT TO USE DURING THE YEAR. THE LD. AR OF THE ASS ESSEE SUBMITTED THAT MAJORITY OF THE ASSETS WERE PURCHASED AGAINST THE PAYMENTS MADE THROUGH CHEQUES. THE DETAILS OF THE DEPRECIATION CLAIMED ON THE ASSETS 4 ITA NOS. 1955 & 1956/PN/2012, A.YS. 2003-04 & 2005-06 WERE FURNISHED BEFORE THE ASSESSING OFFICER BUT THE ASSESS ING OFFICER FAILED TO EXAMINE THE SAME. THE ASSETS ON WHICH DEPRECIA TION HAS BEEN DISALLOWED ARE PART OF BLOCK OF ASSETS. IN THE REMAND REP ORT THE ASSESSING OFFICER HAS NOT POINTED ANY DEFECT IN THE CLAIM O F THE ASSESSEE. THE LD. AR SUBMITTED THAT IF THE ASSET IS INCLUDE D IN THE BLOCK OF ASSETS DEPRECIATION HAS TO BE ALLOWED IRRESPECT O F THE FACT WHETHER ASSET IS PUT TO USE OR NOT. IN SUPPORT OF HIS SUBMISSIONS, THE LD. AR PLACED RELIANCE ON THE DECISION OF HON'BLE GUJARAT HIG H COURT IN THE CASE OF CIT VS. SONAL GUM INDUSTRIES REPORTED AS 32 2 ITR 542 (GUJ) AND THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. OSWAL AGRO MILLS LTD. REPORTED AS 50 DTR 305 (DEL). IN FIRST APPEAL THE COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE DISALLOWANC E ON ACCOUNT OF DEPRECIATION ON THE GROUND THAT THE ASSESSIN G OFFICER HAS NOT POINTED ANY FAULT IN THE CALCULATION OF DEPRECIATION. THE COMMISSIONER OF INCOME TAX (APPEALS) FURTHER OBSERVED THA T THE DEPRECIATION U/S. 32 IS ALLOWABLE ON ENTIRE BLOCK OF ASSETS I RRESPECTIVE OF THE FACT THAT A PARTICULAR ASSET OR ASSETS WAS USED OR NOT DURING THE YEAR. 6. BEFORE US THE LD. DR HAS NOT BEEN ABLE TO REBUT THE FIN DINGS OF COMMISSIONER OF INCOME TAX (APPEALS) OR SHOW THAT THE AS SETS ON WHICH THE DEPRECIATION WAS DISALLOWED WAS NOT INCLUDED IN TH E BLOCK OF ASSETS. ONCE, THE ASSET HAS BEEN INCLUDED IN BLOCK OF ASS ETS DEPRECIATION HAS TO BE ALLOWED IRRESPECTIVE OF THE FACT WH ETHER IT IS PUT TO USE DURING THE YEAR OR NOT . THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SONAL GUM INDUSTRIES (SUPRA) HAS HELD THA T ONCE THE ASSET IS INCLUDED IN BLOCK OF ASSETS, IT IS NOT POSSIBLE TO SE GREGATE ITEMS FALLING WITHIN THE BLOCK FOR THE PURPOSE OF GRANTING DEPRECIAT ION OR RESTRICTING THE CLAIM THEREOF. ONCE, IT WAS FOUND THAT THE ASSETS WERE 5 ITA NOS. 1955 & 1956/PN/2012, A.YS. 2003-04 & 2005-06 USED FOR BUSINESS, IT IS NOT NECESSARY THAT ALL THE ITEMS FA LLING WITHIN BLOCK HAVE TO BE SIMULTANEOUSLY USED FOR BEING ENTITLED TO DEPRECIATION. SIMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. OSWAL AGRO MILLS LTD. (SUPRA). THE HON'BLE COURT HELD THAT THE DEPRECIATION IS ALLOWED ON BLOCK OF ASSETS, AND TH E REVENUE CANNOT SEGREGATE A PARTICULAR ASSET THERE FROM ON THE GROUND THAT IT WAS NOT PUT TO USE. THUS, IN VIEW OF THE FACTS OF THE CASE AND THE LAW LAID DOWN BY THE HON'BLE HIGH COURTS WE DO NOT FIND ANY MERIT IN GROUND NO . 3 OF THE APPEAL OF THE DEPARTMENT. ACCORDINGLY, THE SAME IS DISMISSED. 7. GROUND NOS. 4 TO 6 RELATES TO UNSECURED LOANS AMOUNT ING TO ` 1,00,000/-. THE LD. DR SUBMITTED THAT THE ASSESSEE HAS S HOWN UNSECURED LOANS FROM TWO PERSONS. THE ASSESSEE HAS NO T PLACED ON RECORD ANY CONFIRMATION AND ALSO THE IDENTIFICATION IN RESPEC T OF LOAN AMOUNTING TO ` 1,00,000/-. 8. ON THE OTHER HAND, THE LD. AR SUBMITTED THAT THE UN SECURED LOANS AMOUNTING TO ` 1,00,000/- WAS RECEIVED BY THE ASSESSEE FROM SHRI U.R. PATWARDHAN WHO IS ALSO A CHARTERED ACCOUNTANT OF TH E ASSESSEE. THE SAID AMOUNT WAS RECEIVED THROUGH CHEQUE. THE ACCO UNTS OF THE ASSESSEE WERE AUDITED AND CERTIFIED BY MR. PATWARDHAN. T HEREFORE, NO FURTHER CONFIRMATION WAS REQUIRED. IN THE REMAND REPORT THE ASSESSING OFFICER HAS NOT RAISED ANY OBJECTION TO THE EXPLANATION GI VEN BY THE ASSESSEE. 9. THE COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE ADDITION OF ` 1,00,000/- ON ACCOUNT OF UNPROVED, UNSECURED LOANS ON TH E GROUND 6 ITA NOS. 1955 & 1956/PN/2012, A.YS. 2003-04 & 2005-06 THAT MR. PATWARDHAN IS THE CHARTERED ACCOUNTANT AND HAS GIVEN LOA N TO THE ASSESSEE. HE HAS AUDITED THE ACCOUNTS OF THE ASSE SSEE COMPANY AND THE FINAL STATEMENT OF ACCOUNTS ARE ALSO AUTHENTICATE D BY HIM, THEREFORE, THIS AMOUNTS TO DEEMED CONFIRMATION. WE DO NOT FIND ANY PERVERSITY IN THE VIEW TAKEN BY THE COMMISSIONER OF INCOM E TAX (APPEALS) IN DELETING THE ADDITION. THE GROUND NOS. 4 TO 6 IN THE APPEAL BY DEPARTMENT ARE DEVOID OF ANY MERIT AND ARE ACCORDINGLY DISMISSED . 10. THE GROUND NOS. 7 TO 9 IN GROUNDS OF APPEAL BY THE D EPARTMENT RELATE TO DELETING THE DISALLOWANCE OF ` 31,75,000/- RECEIVED AS ADVANCE AGAINST BOOKING OF FLATS. THE ASSESSING OFFICER MADE ADDITION OF SAID AMOUNT ON THE GROUND THAT THE PERSONS WHO HAVE GIVEN ADVANCES ARE NOT IDENTIFIABLE AND NO CONFIRMATION LETTERS HAVE BEEN RECEIV ED FROM SUCH PERSONS. IN FIRST APPEAL THE COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE ADDITION ON THE GROUND THAT THE ADV ANCES RECEIVED AGAINST BOOKING OF FLATS CANNOT BE TREATED AT PAR WITH LOA N RECEIPT. THEREFORE, REQUIREMENT OF PROVING IDENTITY, CREDITWORTHINESS AND GENUINENESS IS NOT NECESSARY. FURTHER, THE CLAIM OF THE A SSESSEE IS THAT THE SAID ADVANCES HAVE BEEN REFUNDED AS THE PROJ ECT FOR WHICH BOOKINGS WERE RECEIVED COULD NOT MATERIALIZE. 11. THE LD. AR SUBMITTED THAT OUT OF ` 31,75,000/- THE ASSESSEE HAS RECEIVED ` 23,00,000/- THROUGH CHEQUE FROM SHRI SANJAY GOPALA KHOD E ( ` 10,00,000/-) AND SHRI SANJAY SONU KHODE ( ` 13,00,000/-). A SUM OF ` 1,00,000/- WAS RECEIVED IN CASH FROM MRS. SHUBHA DAS AND ` 7,75,000/- WAS RECEIVED IN CASH FROM SHRI ASHOK UPSUNDE. THE AFORESAID AMOUNTS HAVE BEEN REFUNDED AS THE GENUINENESS OF THE TRANSACTIONS AND THE CREDITWORTHINESS OF THE INVESTORS FO R NOT REQUIRED TO BE PROVED AS IN THE CASE OF CASH CREDITORS. 7 ITA NOS. 1955 & 1956/PN/2012, A.YS. 2003-04 & 2005-06 ON THE OTHER HAND THE LD. DR VEHEMENTLY SUPPORTED THE ORDERS OF ASSESSING OFFICER AND PRAYED FOR SETTING ASIDE THE FINDINGS O F COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE. 12. A PERUSAL OF THE IMPUGNED ORDER SHOWS THAT THE COMM ISSIONER OF INCOME TAX (APPEALS) HAS DELETED THE ADDITION MERELY ON THE BASIS OF WRITTEN STATEMENT FILED BY THE ASSESSEE. NO VERIFICATION HA S BEEN CARRIED OUT TO ASCERTAIN THE NATURE OF ADVANCES RECEIVE D EITHER BY THE ASSESSING OFFICER OR COMMISSIONER OF INCOME TAX (APPEALS). W E AGREE WITH THE CONTENTIONS OF THE LD. AR THAT WHERE THE ADVANC E IS RECEIVED IN RESPECT OF BOOKING OF FLATS, THE RIGOR OF PROVING THE CREDIT WORTHINESS, GENUINENESS AND IDENTITY MAY NOT APPLY AS IN THE CASE O F CASH CREDITS BUT THE FACT THAT THE AMOUNTS HAVE BEEN RECEIVED FOR B OOKING OF FLATS, HAVE NOT BEEN EXAMINED BY THE AUTHORITIES BELOW. THE COMMISSIONER O F INCOME TAX (APPEALS) HAS MERELY RELIED ON THE STATEMENT MADE BY THE ASSESSEE. THEREFORE, IN OUR CONSIDERED VIEW THIS ISSUE N EEDS A REVISIT TO THE FILE OF ASSESSING OFFICER. THE ASSESSING OFFICER SHALL ASCERT AIN THE PURPOSE OF ADVANCE RECEIVED BY THE ASSESSEE AND THERE AFTER DECIDE THIS ISSUE, IN ACCORDANCE WITH LAW. ACCORDINGLY, GROUND NOS. 7 T O 9 RAISED IN THE APPEAL OF THE DEPARTMENT ARE ALLOWED FOR STATISTICAL PURPOSE. 13. IN GROUND NO. 10 THE DEPARTMENT HAS ALLEGED THAT TH ERE IS VIOLATION OF PROVISIONS OF SECTION 249(4)(A) OF THE ACT. THIS IS THE SECOND ROUND OF LITIGATION BEFORE THE TRIBUNAL. EARLIER THE COMMISSIO NER OF INCOME TAX (APPEALS) HAD DISMISSED THE APPEAL OF THE ASSES SEE FOR NON- PAYMENT OF ADMITTED TAX LIABILITY. THE ASSESSEE CARRIED TH E MATTER IN APPEAL TO THE TRIBUNAL IN ITA NO. 487/PN/2011. A STATEME NT WAS MADE BEFORE THE TRIBUNAL THAT THE TAX LIABILITY WAS PAID BEFO RE FILING THE RETURN OF INCOME. THE TRIBUNAL VIDE ORDER DATED 29-07-20 11 REMITTED 8 ITA NOS. 1955 & 1956/PN/2012, A.YS. 2003-04 & 2005-06 THE FILE BACK TO COMMISSIONER OF INCOME TAX (APPEALS) TO VER IFY WHETHER TAX LIABILITY HAS BEEN PAID BY THE ASSESSEE AND THEREAFTER DECIDE THE APPEAL. THE COMMISSIONER OF INCOME TAX (APPEALS) AFTER VERIFIC ATION FOUND THE STATEMENT OF ASSESSEE TO BE CORRECT AND ADM ITTED THE APPEAL FOR ADJUDICATION. THE LD. DR HAS NOT BEEN ABLE TO CONTROV ERT THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE . ACCORDINGLY, THIS GROUND OF APPEAL OF THE DEPARTMENT IS DISMISSED. 14. IN GROUND NO. 11 THE DEPARTMENT HAS ASSAILED THE AC TION OF COMMISSIONER OF INCOME TAX (APPEALS) IN ADMITTING NEW EVIDEN CE IN VIOLATION OF PROVISIONS OF RULE 46A OF THE INCOME TAX RULES. WE FIND THAT THE ASSESSEE HAD FILED CERTAIN DOCUMENTS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) DURING THE FIRST APPEAL. THE COMMIS SIONER OF INCOME TAX (APPEALS) SOUGHT REMAND REPORT FROM THE AS SESSING OFFICER ON THE DOCUMENTS FILED BY THE ASSESSEE. THUS, THE OPPO RTUNITY WAS GIVEN TO THE ASSESSING OFFICER TO CONFRONT THE ASSESSEE WITH REGARD TO ADDITIONAL DOCUMENTS FILED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). IN VIEW OF THE FACT THAT THE ASSESSING OFFICER GO T OPPORTUNITY TO EXAMINE THE DOCUMENTS FILED BY THE ASSESSEE BEFORE FIRS T APPEAL PROCEEDINGS, THE OBJECTION OF THE REVENUE THAT PROVISION S OF RULE 46A ARE VIOLATED IS NOT SUSTAINABLE. ACCORDINGLY, GROUND NO. 11 IS DISMISSED. 15. THE GROUND NOS. 12 AND 13 IN THE APPEAL OF THE DEPAR TMENT ARE GENERAL IN NATURE, HENCE, REQUIRE NO ADJUDICATION. 16. IN THE RESULT, THE APPEAL OF THE REVENUE IS PARTLY ALLO WED FOR STATISTICAL PURPOSE. 9 ITA NOS. 1955 & 1956/PN/2012, A.YS. 2003-04 & 2005-06 ITA NO. 1956 (A.Y. 2005-06) 17. THE GROUND NOS. 1 AND 2 IN THE APPEAL BY THE DEPART MENT RELATE TO DELETION OF DISALLOWANCE OF UNVERIFIED EXPENSES AMOUNTING T O ` 49,981/-. IDENTICAL ISSUE WAS RAISED BY THE DEPARTMENT IN ITS APPEAL FOR THE ASSESSMENT YEAR 2003-04. WE HAVE DISMISSED TH IS GROUND OF APPEAL OF THE DEPARTMENT. ACCORDINGLY, WE DISMISS THE GR OUND NOS. 1 AND 2 IN THE APPEAL OF THE DEPARTMENT FOR THE ASSESSMEN T YEAR 2005-06 FOR SIMILAR REASONS GIVEN IN PARA 4 ABOVE. 18. IN GROUND NOS. 3 TO 5 OF THE APPEAL THE DEPARTMENT HAS ASSAILED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING THE ADDITION OF ` 3,05,93,519/- ON ACCOUNT OF UNSECURED LOANS. THE ASSESSING OFFICER MADE ADDITION OF THE SAID AMOUNT ON THE G ROUND THAT THE ASSESSEE WAS NOT ABLE TO SUBSTANTIATE THE SAID AMO UNT BY PRODUCING DETAILS OF LENDERS. IN FIRST APPEAL THE ASSESSEE FILED CONFIRMATION LETTERS FROM THE LENDERS. THE COMMISSIONER OF IN COME TAX (APPEALS) SOUGHT REMAND REPORT ON THE RECONCILIATION OF THE AMOUNTS. THE ASSESSING OFFICER IN THE REMAND REPORT ACCEPTED THE RECONCILIATION OF AMOUNTS TO THE EXTENT OF ` 3,06,27,019/-. HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIED WITH EXPLANATION GIVEN FOR THE REMAIN ING DIFFERENCE OF ` 23,45,598/-. 19. THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER REFERR ED TO THE BALANCE SHEET AND OBSERVED THAT UNSECURED LOANS HAVE INCREASED BY ` 3,05,93,515/-. THE DETAILS OF INCREASED UNSECURED LOANS ARE AS UNDER : A) DIGEESH HOTELS PVT. ` 3,06,27,019/- B) INTERIOR MONOLOGUE ` 33,500/- ` 3,05,93,515/- 10 ITA NOS. 1955 & 1956/PN/2012, A.YS. 2003-04 & 2005-06 THE AMOUNTS HAVE BEEN RECEIVED BY CHEQUES AND ARE RE FLECTED IN THE BALANCE SHEET. THE COMMISSIONER OF INCOME TAX (APPEA LS) HAS ACCEPTED THE RECONCILIATION MADE BY ASSESSEE. THE DIFFERE NCE OF ` 23,45,598/- REPRESENTS PAYMENTS MADE BY ASSESSEE ON B EHALF OF DIGEESH HOTELS PVT. LTD. FOR LEGAL EXPENSES. HOWEVER, THIS J OURNAL ENTRY WAS NOT RECORDED. AFTER HEARING BOTH THE SIDES AND EXAMINING THE DOCUMENTS ON RECORD WE ARE OF THE VIEW THAT THIS ISSUE NEEDS A REVIS IT TO THE FILE OF ASSESSING OFFICER FOR THE LIMITED PURPOSE OF RECONCILIATION OF ` 23,45,598/-. THE ASSESSEE SHALL FURNISH THE DETAILS OF THE SAID EXPENDITURE. THE ASSESSING OFFICER AFTER EXAMINING THE SAM E SHALL DECIDE THE ALLOWABILITY OF SAME IN ACCORDANCE WITH LAW. ACC ORDINGLY, GROUND NOS. 3 TO 5 OF THE APPEAL ARE PARTLY ALLOWED FOR S TATISTICAL PURPOSE. 20. IN GROUND NOS. 6 AND 7 THE DEPARTMENT HAS ASSAILED THE ACTION OF COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING THE ADDITION ON ACCOUNT OF BALANCES OF ` 775 AND ` 1125/- IN BANK CD ACCOUNT. THIS GROUND OF APPEAL WAS NOT PRESSED ON ACCOUNT OF SMALLNES S OF THE AMOUNTS. 21. GROUND NOS. 8 AND 9 RAISED IN THE APPEAL OF THE DEPAR TMENT RELATES TO VIOLATION OF SECTION 249(4)(A) OF THE ACT AND RULE 4 6 OF THE INCOME TAX RULES, RESPECTIVELY. WE HAVE DEALT WITH THESE GROUNDS IN DETAIL IN APPEAL OF THE DEPARTMENT FOR ASSESSMENT YEAR 2 003-04. ACCORDINGLY, THESE GROUNDS OF APPEAL OF THE DEPARTMENT A RE DISMISSED FOR SIMILAR REASONS. 11 ITA NOS. 1955 & 1956/PN/2012, A.YS. 2003-04 & 2005-06 22. IN GROUND NOS. 10 AND 11 RAISED BY THE DEPARTMENT ARE GENERAL IN NATURE, THEREFORE, REQUIRES NO ADJUDICATION. 23. IN THE RESULT, THE APPEALS OF THE REVENUE FOR THE AS SESSMENT YEARS 2003-04 AND 2005-06 ARE PARTLY ALLOWED FOR STATISTICAL PURP OSE. ORDER PRONOUNCED ON FRIDAY, THE 18 TH DAY OF MARCH, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 18 TH MARCH, 2016 RK *+,$-.'/'(- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-I, NASHIK 4. ' / THE CIT-(CENTRAL), NAGPUR 5. !*+ %%,- , ,- , . /01 , / DR, ITAT, A BENCH, PUNE. 6. + 2 34 / GUARD FILE. // ! % // TRUE COPY// #5 / BY ORDER, %6 ,1 / PRIVATE SECRETARY, ,- , / ITAT, PUNE