Unifrax India Ltd.,(Formerly Orient Cerlane Ltd.,), Ahmedabad V. The Addl.CIT., Range-8, Ahmedabad

ITA 203/AHD/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57255 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 27-02-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 22-01-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Keywords: Bogus purchase; Opportunity of being heard; Additional evidence; Bad and doubtful debts; Corroborative evidences; Provision of bad debts
• Section: 143(3); 14A

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, A BENCH . .. . . .. . , !'# !'# !'# !'#, , , , $ $ $ $ %& %& %& %& , , , , &' ( &' ( &' ( &' ( & # & # & # & # BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND TEJ RAM MEENA, ACCOUNTANT MEMBER) ITA NO.203/AHD/2009 [ASSTT.YEAR : 2005-2006] UNIFRAX INDIA LTD. (FORMERLY ORIENT CERLANE LTD.) 30, OMKAR HOUSE C.G. ROAD, AHMEDABAD. PAN : AAACO 2313 B /VS. ACIT, RANGE-8 AHMEDABAD. ITA NO.353/AHD/2009 [ASSTT.YEAR : 2005-2006] ACIT, RANGE-8 AHMEDABAD. /VS. UNIFRAX INDIA LTD. (FORMERLY ORIENT CERLANE LTD.) 30, OMKAR HOUSE C.G. ROAD, AHMEDABAD. ( (( (*+ *+ *+ *+ / APPELLANT) ( (( (,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) .% / 0 &/ ASSESSEE BY : SHRI FALEE H. BILIMORIA WITH MS.SONALEE GODBOLE ( / 0 &/ REVENUE BY : SHRI RAHUL KUMAR, CIT-DR 2 / %3'/ DATE OF HEARING : 27 TH FEBRUARY, 2012 456 / %3'/ DATE OF PRONOUNCEMENT : 07-03-2012 &7 / O R D E R ITA NO.203 AND 353/AHD/2009 -2- PER T.R. MEENA, ACCOUNTANT MEMBER: THESE ARE TWO APPEALS ONE BY THE ASSESSEE AND ANOTHER BY TH E REVENUE FOR THE ASSESSMENT YEAR 2005-2006 AGAINST COMMON ORDER OF T HE COMMISSIONER OF INCOME TAX (APPEALS)-XIV, AHMEDABAD DATED 21.11.2008 ARISING OUT OF THE ORDER OF THE ASSESSIN G OFFICER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961. SINCE THE ASSESSEE BEING SAME AND COMMON ORDER OF THE CIT(A) IS AGITAT ED UPON, FOR THE SAKE OF CONVENIENCE, WE DISPOSE OF BOTH THE APPEALS BY THIS CONSOLIDATED ORDER. 2. FIRST WE SHALL TAKE UP THE ASSESSEES APPEAL IN ITA NO.203/AHD/2009 FOR THE ASSESSMENT YEAR 2005-2006. 3. THE FIRST GROUND OF THE ASSESSEES APPEAL READS AS UNDER: 1. THE LD.CIT(A) ERRED IN CONFIRMING THE ACTION OF THE AO IN DISALLOWING THE BAD DEBTS WRITTEN OFF AMOUNTING TO RS.10,29,055/-. HAVING REGARD TO THE FACTS AND CIR CUMSTANCES OF THE CASE AND THE PROVISIONS OF LAW, THE APPELLAN T SUBMITS THAT THE DISALLOWANCE IS UNWARRANTED AND REQUIRES TO BE DELETED. 4. AS EVIDENT FROM THE ORDERS OF THE REVENUE AUTHOR ITIES, THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURIN G AND TRADING OF CERAMIC FIBER AND ITS ALLIED PRODUCTS, VACUM FORMED BOARD, ACCESSORIES ETC. AND BUSINESS OF PROVIDING ENGINEERING SERVICES . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. IN THE RETURN OF INCOME FILED, THE ASSESSEE CLAIMED BAD DEBTS OF RS.10.29 LAKHS AND TH E ASSESSEE WAS ASKED TO EXPLAIN THEREOF. ACCORDING TO THE AO, THE ASSESSEE DID NOT FURNISH ANY EVIDENCE TO THAT EFFECT. ACCORDINGLY, T HE AO FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF DHALL ENTERPRISES & ENGINEERS . LTD. VS. CIT, 207 CTR 729 (GUJ) HELD THAT ITA NO.203 AND 353/AHD/2009 -3- THE CONDITIONS STIPULATED IN SECTION 36(1)(VII) OF THE ACT HAS NOT BEEN SATISFIED BY THE ASSESSEE AND THEREFORE, THE AO DIS ALLOWED THE CLAIM AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THE CIT(A) FOLLOWING THE DECISION OF THE JURISDICTIONAL HIGH COURT IN TH E CASE OF DHALL ENTPRISES (SUPRA) CONFIRMED THE ACTION OF THE AO BY HOLDING THAT THE DEBT HAS NOT BECOME BAD AND IRRECOVERABLE. STILL A GGRIEVED THE ASSESSEE IS BEFORE US. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAS FURNISHED ALL THE DETAILS VIZ. STATEMENT OF BAD DEBTS WRITTEN OFF DURING THE YEAR GIVING THE NAME OF THE PARTY, INVOI CE NUMBER AND THE DATE WHEN THE ACCOUNTED AS SALES AND ALSO THE AMOUN T WRITTEN OFF AND THE REASONS FOR WRITE OFF. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO DREW OF OUR ATTENTION TO PAGE NO.53 TO 55 OF THE PA PER BOOKS, WHEREIN THE DETAILED BREAK UP OF THE BAD DEBTS WRITTEN DURI NG THE YEAR WITH NAME OF THE PARTY, AMOUNT, INVOICE NUMBER AND THE R EASONS FOR WRITE OFF. HE SUBMITTED THAT DESPITE VARIOUS REMINDERS ( COPIES OF WHICH ARE PART OF THE RECORD), THE PARTIES HAVE NOT COME FORW ARD TO SETTLE ISSUE, WHICH ITSELF SHOWED THAT THE ASSESSEE HAS TAKEN DIL IGENT EFFORTS TO RECOVER OF ITS PAYMENT. HE FURTHER SUBMITTED THAT LOOKING TO THE SMALLNESS OF THE AMOUNT TO BE RECOVERED FROM THE PA RTIES, WHICH ARE SPREAD ACROSS THE COUNTRY, LEGAL PROCEEDINGS AGAINS T THEM WOULD BE A COSTLY AFFAIR FOR THE ASSESSEE-COMPANY AND THE BUSI NESS PRUDENCE WOULD NOT SUGGEST THAT ALSO. THE LEARNED COUNSEL F OR THE ASSESSEE ALSO RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF T.R.F. LTD. VS. CIT, 323 ITR 397 (SC). THE LEARNED DR, ON THE OTHER HAND, RELIED ON THE ORDERS OF THE AO AND THE CIT(A) AND SUBMITTED THAT THE DEBT HAS NOT BECOME BAD DURING THE PREVI OUS YEAR AND NO ITA NO.203 AND 353/AHD/2009 -4- EVIDENCE HAS BEEN PRODUCED BY THE ASSESSEE AND THAT CONDITIONS STIPULATED IN SECTION 36(1)(VII) HAVE ALSO NOT BEEN FULFILLED BY THE ASSESSEE AND THEREFORE THE REVENUE AUTHORITIES ARE RIGHTLY DISALLOWED CLAIM OF THE ASSESSEE. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE O RDERS OF THE AO AND THE CIT(A) AND ALSO THE MATERIAL AVAILABLE O N RECORD. THE ASSESSEE HAS WRITTEN OFF BAD DEBTS AS IRRECOVERABLE IN ITS BOOKS OF ACCOUNTS. THE FACTUM OF THE TRANSACTIONS AND THE FI GURES OF THE AMOUNTS SHOWN BY THE ASSESSEE IN RESPECT OF BAD DEB TS HAVE NOT BEEN DISPUTED BY THE REVENUE AUTHORITIES. THE ASSESSEE HAS SUBMITTED THE DETAILS OF BAD DEBTS CONTAINING NAMES OF THE PARTIE S, AMOUNTS AND INVOICES NUMBER WITH DATE AND ALSO THE REASONS FOR THE WRITE OFF OF THE IMPUGNED AMOUNTS. COPIES OF THE LETTERS ISSUED BY THE ASSESSEE ON THE PARTIES HAVE DEMONSTRATED THE SERIOUSNESS AND D ILIGENT EFFORT PUT IN BY THE ASSESSEE TO RECOVER THE AMOUNTS FROM THE RES PECTIVE PARTIES. THE COMPLETE DETAILS OF EACH AND EVERY BAD DEBT WER E FURNISHED TO THE AO AND THE SIZE AMOUNTS VARIOUS FROM RS.530/- TO RS .4,11,000/- AND IN CERTAIN CASES, THE AMOUNTS WERE SO SMALL THAT AN Y LEGAL PROCEEDINGS WOULD BE COSTLY ON THE ASSESSEE, AS THE PARTIES SPR EAD ACROSS THE COUNTRY. THE ASSESSEE HAS SUBMITTED THAT NO SUCH D ISALLOWANCES WERE MADE IN THE PAST ASSESSMENTS OR IN THE SUBSEQUENT A SSESSMENT YEARS. THE REVENUE AUTHORITIES ARE MORE ATTRACTED BY THE F ACT THAT THE ASSESSEE HAS NOT COMPLIED WITH STIPULATIONS PROVIDE D IN SECTION 36(1)(VII) OF THE ACT. WE ALSO FIND THAT THE CLAIM OF THE ASSESSEE ALSO GETS SUPPORT FROM THE RECENT DECISION OF THE HONBL E APEX COURT IN THE CASE OF T.R.F. LTD. VS. CIT, 323 ITR 397 (SC) W HEREIN THEIR LORDSHIP HELD AS UNDER: ITA NO.203 AND 353/AHD/2009 -5- AFTER THE AMENDMENT OF SECTION 36(1)(VII) OF THE I NCOME TAX ACT, 1961 WITH EFFECT FROM APRIL 1, 1989, IN OR DER TO OBTAIN A DEDUCTION IN RELATION TO BAD DEBTS, IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DE BT, IN FACT, HAS BECOME IRRECOVERABLE; IT IS ENOUGH IF THE BAD D EBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE. IN THIS VIEW OF THE MATTER AND RESPECTFULLY FOLLOWI NG THE DECISION OF THE HONBLE APEX COURT CITED SUPRA, WE HOLD THAT TH E REVENUE AUTHORITIES ARE NOT JUSTIFIED IN DISALLOWING BAD DE BTS WRITTEN OFF AMOUNTING TO RS.10,29,055/- AND WE DELETE THE ADDIT ION AND ACCORDINGLY THE GROUND NO.1 OF THE ASSESSEE IS ALLO WED. 7. THE GROUND NO.2 OF THE ASSESSEES APPEAL READS A S UNDER: 2. THE LD.CIT(A) ERRED IN CONFIRMING THE ACTION OF THE AO IN DISALLOWING SALES COMMISSION PAID TO VARIOUS SALES AGENTS DURING THE YEAR AGGREGATING TO RS.44,84,775/-. HAV ING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APP ELLANT SUBMITS THAT THE DISALLOWNACE IS UNJUSTIFIED AND UNWARRANTE D AND REQUIRES TO BE DELETED. 8. IN THE RETURN OF INCOME THE ASSESSEE CLAIMED PAY MENT OF COMMISSION OF RS.44.84 LAKHS FOR THE SERVICES RENDE RED BY VARIOUS PARTIES FOR THE SALE OF THE ASSESSEE-COMPANY. THE ASSESSEE WAS ASKED TO EXPLAIN SUCH PAYMENTS WITH SUPPORTING EVIDENCES. THE AO HAS NOT SATISFIED WITH EXPLANATION AND DETAILS FILED BY THE ASSESSEE AND DISALLOWED THE SALES COMMISSION. THE CIT(A) HAS CO NFIRMED THE SAME. THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 9. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSES SEE DREW OUR ATTENTION TO LETTER OF THE COUNSEL DATED 2-12-2011 FILED IN THE MATTER, WHEREIN THE LEARNED COUNSEL, ON BEHALF OF THE ASSES SEE, HAS REQUESTED ITA NO.203 AND 353/AHD/2009 -6- FOR ADMISSION OF ADDITIONAL EVIDENCES AS THE SAME C OULD NOT BE PRODUCED BEFORE THE REVENUE AUTHORITIES. THE LEARN ED COUNSEL SUBMITTED THAT THESE EVIDENCES ARE VERY MUCH NECESS ARY AND RELEVANT FOR ESTABLISHMENT OF THE CLAIM OF THE ASSESSEE AND REQUIRE TO BE ADMITTED IN THE INTEREST OF SUBSTANTIAL JUSTICE. 10. AFTER HEARING BOTH THE SIDES, WE FIND MERIT IN THE CONTENTIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. WE FIND THAT FOR SOME REASONS THE ASSESSEE COULD NOT PRODUCE THE SAID EVIDENCES, VIZ. CONFIRMATIONS FROM THE SALES AGENTS, AGENT-WISE PARTY-WISE STATEM ENT OF COMMISSION PAID ETC. BEFORE THE REVENUE AUTHORITIES FOR ADJUDI CATION OF ITS CLAIM AND SEEMS TO BE CRUCIAL TO DECIDE THE ISSUE. THERE FORE, IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ISSUE BACK TO THE FILE OF THE AO WITH DIRECTION TO THE ASSESSEE TO PRODUCE ALL THE EVIDEN CES BEFORE THE AO. THE AO WILL CONSIDER THE ISSUE ON THE BASIS OF THE SAID ADDITIONAL EVIDENCES AND DECIDE THE ISSUE IN ACCORDANCE WITH L AW. NEEDLESS TO SAY, THE AO WILL GIVE ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND THE ASSESSEE WILL CO-OPERATE WITH THE REVENUE AUTHORITIES IN THE MATTER. 11. THE GROUND NO.3 OF THE ASSESSEES APPEAL READS AS UNDER: 2. THE LD.CIT(A) ERRED IN CONFIRMING THE ACTION OF THE AO IN ALLOCATING NOTIONAL EXPENDITURE AGGREGATING TO RS.9 5,512/- TOWARDS THE EARNING OF DIVIDEND INCOME IN AN ARBITR ARY AND ADHOC MANNER AND DISALLOWING THE SAME UNDER SECTION 14A OF THE ACT. HAVING REGARD TO THE FACTS AND CIRCUMSTAN CES OF THE CASE, THE APPELLANT SUBMITS THAT THE NOTIONAL AND A RBITRARY DISALLOWNACE BE DELETED. ITA NO.203 AND 353/AHD/2009 -7- 12. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE HAS NOT PRESSED THIS GROUND FOR ADJUDICATION, HENCE DIS MISSED. 13. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ITA NO.353/AHD/2009 (REVENUES APPEAL) 14. THE FIRST GROUND OF THE REVENUES APPEAL READS AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO DELETE THE DISALLOWANCE OF RS.8,18,202/- MADE BY THE AO ON ACCOUNT OF PROVISION FOR BAD DEBTS. 15. THE ASSESSEE CLAIMED PROVISION OF BAD DEBTS OF RS.8,18,202/-. WHEN THE AO ASKED FOR EXPLANATION AND TO JUSTIFY FO R THE IMPUGNED PROVISION, THE ASSESSEE EXPLAINED THAT THE SAME REM AINED UN-RECOVERED FOR THE LAST ONE YEAR, HENCE THE PROVISION. THE AO HAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND HENCE THE CLAIM OF THE ASSESSEE WAS DISALLOWED. THE CIT(A) HOWEVER ACCEPT ED THE CLAIM OF THE ASSESSEE BY HOLDING THAT THE IMPUGNED AMOUNT HA S ALREADY BEEN DISALLOWED BY THE ASSESSEE IN EARLIER YEARS AND THE REFORE ON WRITE BACK OF THE SAID AMOUNT, THE SAME CANNOT BE TREATED AS I NCOME, AND HENCE DISALLOWED MADE BY THE AO WAS DELETED. 16. BEFORE US, THE LEARNED DR RELIED ON THE ORDER O F THE AO WHILE THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PROVISION FOR DOUBTFUL DEBTS WRITTEN BACK OF RS.8,18,202/- WAS DI SALLOWED BY THE ASSESSEE IN THE EARLIER ASSESSMENT YEARS. THE LEARN ED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ITAT, AHMEDABAD BENCH I N ASSESSEES ITA NO.203 AND 353/AHD/2009 -8- OWN CASE FOR A.Y.2001-2002 IN ITA NO.3535/AHD/2004 DATED 11-02- 2005 AND FOR A.Y.2003-2004 IN ITA NO.1736/AHD/2006 DATED 24-7- 2009 SIMILAR ISSUE HAS BEEN DECIDED IN FAVOUR OF TH E ASSESSEE. HE FURTHER SUBMITTED THAT THE RELEVANT DETAILS EVIDENC ING THE FACT THAT THE PROVISION FOR DOUBTFUL DEBTS WAS DISALLOWED BY THE ASSESSEE AND OFFERED TO TAX IN THE EARLIER ASSESSMENT YEARS WERE FURNISHED BEFORE THE REVENUE AUTHORITIES AND THE CIT(A) HAS RIGHTLY ALLO WED THE CLAIM OF THE ASSESSEE. 17. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. THE CIT(A) HAS RECORDED A F INDING THAT FROM THE STATEMENTS OF INCOME AND OTHER DETAILS FILED, T HE ASSESSEE SUO MOTO DISALLOWED THE PROVISION FOR DOUBTFUL DEBTS AND THE REFORE WRITTEN BACK OF THE SAID AMOUNT, COULD NOT BE TREATED AS INCOME. THE LEARNED COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE ORDERS OF THE ITAT, AHMEDABAD FOR THE ASSESSMENT YEAR 2001-2002 AND 200 3-2004 CITED SUPRA TO SUPPORT ITS CASE THAT SIMILAR ISSUE WAS DE CIDED IN FAVOUR OF THE ASSESSEE AND THE DEPARTMENTS APPEAL AGAINST THE DE CISION OF THE TRIBUNAL BEFORE THE HONBLE HIGH COURT OF COURT (PB NO.31) WAS DISMISSED. THESE FACTS HAVE NOT BEEN DISPUTED BY T HE REVENUE. THEREFORE, WHEN THE IMPUGNED PROVISION FOR DOUBTFUL DEBTS WAS DISALLOWED BY THE ASSESSEE ITSELF AND OFFERED TO TA X IN THE EARLIER ASSESSMENT YEARS, THE SAME CANNOT BE TAXED AS THE S AME WAS WRITTEN BACK. IN VIEW OF THESE FACTS, WE DO NOT FIND ANY I NFIRMITY IN THE ACTION OF THE AO IN DISALLOWING THE IMPUGNED CLAIM OF THE ASSESSEE. ACCORDINGLY, WE UPHOLD THE ORDER OF THE CIT(A) ON T HIS ISSUE AND DISMISS THE GROUND NO.1 OF THE REVENUE. ITA NO.203 AND 353/AHD/2009 -9- 18. THE GROUND NO.2 OF THE REVENUES APPEAL READS A S UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO DELETE THE DISALLOWANCE OF RS.6,77,248/- MADE BY THE AO ON ACCOUNT OF INFLATION OF PURCHASE IN RESPECT OF MATE RIAL PURCHASED FROM INDIAN RARE EARTH LTD. 19. THE ASSESSEE HAS SHOWN PURCHASE OF RS.49,97,408 /- FROM M/S.INDIAN RARE EARTHS LTD. DURING THE RELEVANT YEA R. THE AO ON VERIFICATION WITH THE SAID PARTY FOUND THAT THE ASS ESSEE HAS SHOWN AN INFLATED PURCHASE OF RS.6,77,248/- , TO WHICH THE A SSESSEE HAS EXPLAINED THAT THE SAID INDIAN RARE EARTH LTD. HAS NOT SHOWN THREE BILLS TOTALING TO RS.6,77,248/- HENCE THE DIFFERENC E. NOT SATISFIED WITH THE REPLY OF THE ASSESSEE, THE AO HELD THE SAME TO BE NON-GENUINE /BOGUS PURCHASE AND DISALLOWED RS.6,77,248/- AND AD DED TO THE INCOME OF THE ASSESSEE. THE CIT(A) ON VERIFICATIO N OF THE DETAILS FOUND THAT THE ASSESSEE HAD PURCHASED THE MATERIAL FROM TWO OTHER UNITS OF INDIAN RARE EARTHS LTD. AND THE PURCHASES WERE GENUINE AND ACCORDING THE LEARNED CIT(A) DELETED THE DISALLOWAN CE. BEFORE US, BOTH THE PARTIES RELIED ON THE RESPECTIVE ORDERS OF THE REVENUE AUTHORITIES TO SUPPORT THEIR CASE. 20. AFTER HEARING BOTH THE SIDES AND PERUSAL OF THE ORDERS OF THE REVENUE AUTHORITIES AND MATERIAL PLACED ON RECORD, WE FIND THAT THE ASSESSEE HAS FILED ALL THE NECESSARY DETAILS IN RES PECT OF INFLATED FIGURE OF RS.6,77,248/-. THESE DETAILS WERE CONSIDERED BY THE CIT(A) AS HE OBSERVED IN THE IMPUGNED ORDER THAT THE ASSESSEE HA S FURNISHED ALL NECESSARY DETAILS REGARDING THE PURCHASE OF MATERIA LS FROM THREE UNITS OF IRE. THE AO HAS MADE ENQUIRY ONLY WITH ONE UNIT OF THE IRE INSTEAD OF THREE UNITS AND PRESUMED THAT THE ASSESS EE HAS INFLATED THE PURCHASE. THIS DIFFERENCE OF FIGURE IN PURCHASE WAS DUE TO PURCHASE ITA NO.203 AND 353/AHD/2009 -10- FROM TWO OTHER UNITS OF THE IRE, WHICH THE AO IGNOR ED, THOUGH, THE CIT(A) FORWARDED CONFIRMATION LETTERS FROM THESE TW O OTHER UNITS TO THE AO BY MERELY STATING THAT THE SAME COULD NOT BE ADMITTED AS ADDITIONAL EVIDENCE. IN THIS VIEW OF THE MATTER, W E ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF THE CIT(A) ON THIS ISSU E, WHICH IS CONFIRMED AND THE GROUND NO.2 OF THE REVENUE IS REJ ECTED. 21. THE GROUND NO.3 OF THE REVENUES APPEAL READS A S UNDER: 3. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO DELETE THE DISALLOWANCE OF RS.11,09,471/- MADE B Y THE AO OUT OF TRAVELLING EXPENSES. 22. THE ASSESSEE HAS CLAIMED TRAVELLING AND CONVEYA NCE EXPENSES TO THE EXTENT OF RS.65,94,145/-. OUT OF THAT AMOUN T, ACCORDING TO THE AO, THE ASSESSEE HAS NOT PROPERLY EXPLAINED EXPENSE S OF RS.11,09,471/- WITH SUPPORTING EVIDENCES, THEREFORE , THE AO DISALLOWED TRAVELING EXPENSES TO THE EXTENT OF RS.1 1,09,471/- AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THE CI T(A) CONVINCED WITH THE CONTENTION OF THE ASSESSEE THAT THE EXPENS ES OF RS.11,09,471/- WAS INCURRED BY THE ASSESSEE TOWARDS FUEL AND VEHIC LE REPAIR EXPENSES, AND INCLUDED IN THE ABOVE CLAIM OF RS.65,94,145/-. THE LD. CIT(A) HELD THAT THE EXPENSES INCURRED BY THE ASSESSEE IS WHOLLY AND EXCLUSIVELY FOR THE BUSINESS PURPOSE, AND THUS ALLO WED THE CLAIM OF THE ASSESSEE. BEFORE US, BOTH THE PARTIES RELIED ON RE SPECTIVE ORDERS OF THE REVENUE AUTHORITIES. 23. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE ORD ERS OF THE AO AND THE CIT(A). THE LEARNED CIT(A) HAS OBSERVED IN HIS ORDER THAT THE ASSESSEE HAS FURNISHED THE DETAILS WITH SUPPORT ING EVIDENCES IN ITA NO.203 AND 353/AHD/2009 -11- RESPECT OF TRAVELLING EXPENSES WHICH WAS ALSO INCLU DED THE EXPENDITURE ON FUEL AND REPAIR & MAINTENANCE OF VEH ICLES. THESE OBSERVATIONS OF THE LEARNED CIT(A) HAVE NOT BEEN CO NTROVERTED BY THE LEARNED DR. THEREFORE, SINCE THE LEARNED CIT(A)S FINDING IS BASED ON THE DETAILS FURNISHED BEFORE HIM, AND HE FOUND T HE SAME TO BE CORRECT AND PROPER, WE DO NOT FIND ANY JUSTIFICATIO N IN REVERSING THE ORDER OF THE CIT(A) ON THIS ISSUE. ACCORDINGLY, WE CONFIRM THE ORDER OF THE LD.CIT(A) ON THIS ISSUE AND DISMISS THE GROU ND NO.3 OF THE REVENUE. 24. THE GROUND NO.4 AND 5 OF THE REVENUES APPEAL A RE GENERAL IN NATURE AND HENCE DISMISSED. 25. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSE AND THE REVENUES APPEAL IS DIS MISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( . .. . . .. . /G.C. GUPTA) !'# !'# !'# !'# /VICE-PRESIDENT ( %& %& %& %& / TEJ RAM MEENA) &' ( &' ( &' ( &' ( /ACCOUNTANT MEMBER C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD 1. DATE OF DICTATION : 28-02-2012 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER. : 02-03-2012