Sri Sunil Kumar Nathany, Hyderabad V. Income Tax Officer, Ward-4(2), Hyderabad

ITA 2128/Hyd/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2490 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 14-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Assessee Lawyers: A V RAGHURAM
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition; Fair market value
• Section: 50C; 142(1); 147; 148; 37; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 2128/HYD/2017 ASSESSMENT YEAR: 2013-14 SRI SUSHIL KUMAR NATHANY, HYDERABAD. PAN AAGPN 9757 K VS. INCOME-TAX OFFICER, WARD 4(2), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI A.V. RAGHURAM REVENUE BY : SMT. SUMAN MALIK DATE OF HEARING 22-02-2018 DATE OF PRONOUNCEMENT 28-02-2018 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST T HE ORDER DATED 18/09/2017 OF CIT(A) 1, HYDERABAD, FOR THE AY 2013-14. 2. BRIEFLY THE FACTS OF THE CASE ARE, ASSESSEE, PRO PRIETOR OF M/S S.K. INDIA INDUSTRIES, FILED HIS RETURN OF INCOME F OR THE AY 2013-14 ON 20/09/2013 ADMITTING TOTAL INCOME OF RS. 30,01,490/ -. ASSESSMENT WAS COMPLETED U/S 143(1) ON 05/01/2014 BY CPC, BANG ALORE. AS PER THE SROS INFORMATION, AO NOTICED THAT THAT ASSESSE E HAD SOLD PROPERTY FOR WHICH SRO VALUE WAS NOT REFLECTED CORR ECTLY IN THE RETURN FILED. AS THERE WAS ESCAPEMENT OF TAX, THE CASE WAS REOPENED AND NOTICE U/S 148 WAS ISSUED ON 21/01/2015 AND SERVED ON THE ASSESSEE ON 28/01/2015. NOTICE U/S 143(2) ALSO WAS ISSUED. 2 ITA NO. 2128 /HYD/2017 SHRI SUSHIL KUMAR NATHANY, HYD. 2.1 AO ISSUED SEVERAL NOTICES U/S 142(1) TO THE ASS ESSEE AND ON 09/03/2016, ASSESSEE FILED A LETTER OBJECTING TO AD OPTION OF 50C VALUATION, WHICH IS REPRODUCED BELOW: YOUR PROPOSITION TO ASSESS CAPITAL GAIN ON THE SALE OF PROPERTY AT RS. 1,76,86,200/- AGAINST CAPITAL GAIN OF NS. 90 ,00,000/- RETURNED BY THE ASSESSEE IS NOT JUSTIFIED FOR THE R EASON THAT, FOR REGISTRATION PURPOSE, IT IS BUYER OF THE PROPERTY W HO HAS TO PAY STAMP DUTY WHICH HAS NO BEARING TO MY SALE CONSIDER ATION. ON MY PART, I HAVE RECEIVED MORE AMOUNTS TOWARDS THE S ALE OF THE PROPERTY SOLD. ADDED TO THAT, THE CONDITION OF THE PROPERTY WAS NOT PROPER FOR BARGAINING AT A HIGHER PRICE. LOOKIN G TO THE LOCATION, CONDITION AND OTHER- FACTORS CONCERNING T HE PROPERTY THE SALE CONSIDERATION RECEIVED BY ME WAS QUITE IN ORDER AND SATISFACTION. THERE WERE OTHER PROPERTIES IN THE SA ME LOCALITY WHICH WERE SOLD AT LOWER PRICE. ACCORDINGLY, THERE IS NO REASON OR JUSTIFICATION TO ASSESS CAPITAL GAINS MORE THAN WHAT I HAVE RECEIVED AND SHOWN IN MY RETURN OF INCOME. IF THOUG HT FIT, THE BUYER OF THE PROPERTY MAY ALSO BE CONTACTED TO ASCE RTAIN WHETHER MORE CONSIDERATION WAS PAID BY HIM. 2.2 FURTHER, THE AO ASKED THE ASSESSEE TO SUBSTANTI ATE THE VALUE ADOPTED BY HIM INSTEAD OF 50C VALUE AND PRODUCE BOO KS OF ACCOUNT WITH RELATED BILLS AND VOUCHERS. THE ASSESSEE COULD NOT SUBSTANTIATE ANY FURTHER ON THIS ASPECT AND AS WELL AS COULD NOT SUBSTANTIATE THE EXPENSES DEBITED TO P&L A/C WITH PROPER VOUCHERS AN D BILLS. AO COMPLETED THE ASSESSMENT U/S 144 RWS 147 BY ADOPTIN G 50C VALUATION REPLACING SALE CONSIDERATION ADOPTED BY THE ASSESSE E, DISALLOWED AN ADHOC AMOUNT OF RS. 1 LAKH FOR THE EXPENDITURE CLAI MED AND FURTHER FOR THE VALUE OF COST OF ACQUISITION, AO HAD ADOPTE D SRO VALUE AS ON 1981 AS PER THE FAIR MARKET VALUE. 3. AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERR ED AN APPEAL BEFORE THE CIT(A). ASSESSEE RAISED SEVERAL GROUNDS BEFORE THE CIT(A) OBJECTING FOR INITIATING PROCEEDINGS U/S 147 , ADOPTING 50C VALUATION, NOT REFERRING TO THE VALUATION OFFICER, PARTICULARLY, WHEN ASSESSEE OBJECTS FOR ADOPTION OF 50C VALUATION, ADO PTING COST OF ACQUISITION AT SRO VALUE AS ON 1981 AND DISALLOWANC E OF RS. 1 LAKH FROM THE EXPENDITURE DEBITED TO P&L A/C. LD. CIT(A ) DISMISSED THE APPEAL OF THE ASSESSEE. 3 ITA NO. 2128 /HYD/2017 SHRI SUSHIL KUMAR NATHANY, HYD. 4. AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERR ED AN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-L, HYDERABAD, ERRED IN DISMISSING THE APPEAL OF THE APPELLANT. 2. THE COMMISSIONER (APPEALS) ERRED IN UPHOLDING TH E ACTION OF THE ASSESSING OFFICER IN INVOKING JURISDICTION UNDE R SECTION 148 OF THE ACT WHEN THE TIME WAS AVAILABLE FOR MAKING R EGULAR ASSESSMENT AS PER THE PROCEDURE PRESCRIBED UNDER TH E ACT. 3. THE COMMISSIONER (APPEALS) ERRED IN UPHOLDING TH E ACTION OF THE ASSESSING OFFICER IN REOPENING THE ASSESSMENT U NDER SECTION 148 OF THE ACT FOR THE PURPOSE OF APPLYING THE PROVISIONS OF SECTION 5OC OF THE INCOME TAX ACT. 4. THE COMMISSIONER (APPEALS) FURTHER ERRED IN HOLD ING THAT OBJECTION TO REOPENING WAS NOT TAKEN IN THE COURSE OF ASSESSMENT FAILING TO APPRECIATE THAT MATTERS OF JU RISDICTION CAN BE QUESTIONED AT ANY STAGE OF THE MATTER. 5. THE COMMISSIONER (APPEALS) FAILED TO APPRECIATE THAT THE NON-ADOPTION OF GUIDELINE VALUE OF STAMP DUTY AUTHO RITIES WILL NOT RESULT IN ESCAPEMENT OF INCOME ENABLING THE ASS ESSING OFFICER TO REOPEN ASSESSMENT IN AS MUCH AS THERE CA NNOT BE AN ASSUMPTION THAT THERE IS ESCAPEMENT OF INCOME WHENE VER SRO VALUE IS NOT ADOPTED, AND THEREFORE THE REOPENING O F ASSESSMENT IS BAD IN LAW. 6. THE COMMISSIONER (APPEALS) ERRED IN SUSTAINING T HE ACTION OF THE ASSESSING OFFICER IN APPLYING THE SALE VALUE AS PER GUIDELINE VALUES OF STAMP DUTY AUTHORITY, IN AS MUC H AS THE SAME WAS DISPUTED BY THE APPELLANT AND THEREFORE ST RAIGHT AWAY COULD NOT HAVE BEEN ADOPTED. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE ADOPTION OF 5OC VALUE AS SALE CONSIDERATION IS ILLE GAL AND SHOULD HAVE BEEN QUASHED AS THE ASSESSING OFFICER V IOLATED PROVISIONS OF SECTION 50C(2) OF THE ACT. 8. WITHOUT PREJUDICE TO ABOVE GROUND, THE COMMISSIO NER (APPEALS) OUGHT TO HAVE DIRECTED THE AO TO REFER TH E ASSET IN QUESTION TO VALUATION CELL FOR ARRIVING AT THE MARK ET VALUE OF THE ASSET. 4 ITA NO. 2128 /HYD/2017 SHRI SUSHIL KUMAR NATHANY, HYD. 9. THE COMMISSIONER (APPEALS) ERRED IN UPHOLDING AD HOC DISALLOWANCE OF RS.1 LAKHS BY THE AO, WHICH HAD NO BASIS. 10. THE COMMISSIONER (APPEALS) ERRED IN UPHOLDING T HE DETERMINATION OF INDEXED COST OF ACQUISITION AT RS. 3,59,741 BY THE AO AS AGAINST THE INDEXED COST CLAIMED BY THE A PPELLANT AT RS.19,37,652. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED, IT I S PRAYED THAT THE HON'BLE TRIBUNAL MAY BE PLEASED TO ALLOW THE AP PEAL. 5. AS REGARDS GROUND NOS. 6 TO 8, LD. AR SUBMITTED THAT ASSESSEE HAS OBJECTED FOR ADOPTING 50C VALUATION BY THE AO B Y BRINGING TO ITS NOTICE THAT CONDITION OF THE PROPERTY WAS NOT PROPE R FOR BARGAINING AT A HIGHER PRICE AND LOCATION OF THE PROPERTY CONDITI ONS WERE QUITE IN ORDER AND SATISFACTORY. FURTHER, HE SUBMITTED THAT ASSESSEE HAS SUBMITTED LETTER BEFORE THE AO THAT THERE WERE OTHE R PROPERTIES IN THE SAME LOCALITY, WHICH WERE SOLD AT A LOWER PRICE. AC CORDING TO HIM, ASSESSEE HAS OBJECTED BEFORE THE AO FOR ADOPTING SR O VALUE, THEREFORE, AO SHOULD NOT HAVE ADOPTED SRO VALUE AND HE SHOULD HAVE REFERRED THE MATTER TO THE DEPARTMENTAL VALUAT ION OFFICER (DVO) FOR PROPER VALUATION, AS THIS IS AGAINST 50C(2) OF THE ACT. HE SUBMITTED THAT AO CANNOT APPLY 50C VALUATION WITHOU T REFERRING TO VALUATION OFFICER AS PER SECTION 50C(2) AND FOR THI S PROPOSITION, HE RELIED ON THE DECISION IN THE CASE OF R. SUHASINI B HEEMUNIPATNAM VS. DCIT, [2013] 38 CCH 16 (VIZAG TRIB.) AND FURTHER RE LIED ON THE FOLLOWING CASES: 1. MRS. MANJULA SINGHAL VS. ITO, [2011] 46 SOT 149 2. K.K. NAG LTD., VS. ADDL. CIT, [2012] 52 SOT 381 (PUNE TRIB.) 5.1. WITH REGARD TO GROUND NO. 10, HE OBJECTED THAT AO HAS ADOPTED SRO VALUE AS ON 1981 FOR THE PURPOSE OF COST OF ACQ UISITION INSTEAD OF ADOPTING FAIR MARKET VALUE (FMV). HE SUBMITTED T HAT SRO VALUE IS ONLY A GUIDELINE VALUE AND NOT FMV. 5 ITA NO. 2128 /HYD/2017 SHRI SUSHIL KUMAR NATHANY, HYD. 5.2 WITH REGARD TO GROUND NO. 9, HE SUBMITTED THAT AO HAS DISALLOWED AN AMOUNT OF RS. 1 LAKH ON ADHOC BASIS. HE SUBMITTED THAT IT IS TOO HIGH CONSIDERING THE EXPENSES CLAIMED BY THE ASSESSEE, WHICH ARE RELATING TO THE BUSINESS RUN BY THE ASSES SEE. HE PRAYED FOR REDUCTION OF THE ABOVE DISALLOWANCE. 6. LD. DR RELIED ON THE ORDERS OF REVENUE AUTHORITI ES AND FURTHER SUBMITTED THAT ASSESSMENT WAS COMPLETED U/S 144 OF THE ACT AS THE ASSESSEE HAS NOT PRODUCED ANY DETAILS NOR COOPERATE D WITH THE AO AND THE LD. CIT(A) HAS GIVEN CLEAR FINDING ON ALL T HE ISSUES RAISED BY THE ASSESSEE. WITH REGARD TO GROUND NO. 2, THE LD. DR RELIED ON THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CA SE OF SRI KRISHNA MAHAL VS. ACIT, [2001] 250 ITR 333. 7. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD AS WELL AS CASES CITED BY BOTH THE PARTIES. IT IS NOTICED THAT, EVEN THOUGH, ASSESSMENT WAS COMPLETED U/S 144 OF TH E ACT, ASSESSEE HAS SUBMITTED A LETTER DATED 09/03/2016 BEFORE THE AO OBJECTING THE ADOPTION OF SRO VALUE INSPITE OF SALE CONSIDERATION RECEIVED BY THE ASSESSEE, AS IT IS CLEAR FROM THE PROVISIONS OF SEC TION 50C(2). FOR THE SAKE OF CLARITY THE PROVISIONS OF SECTION 50C(2) AR E REPRODUCED BELOW: (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SEC TION (1), WHERE (A ) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY UNDER SUB -SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER; (B ) THE VALUE SO ADOPTED OR ASSESSED BY THE STAMP VA LUATION AUTHORITY UNDER SUB-SECTION (1) HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY OTHER AUTHORITY, COURT OR THE HIGH COURT, THE ASSESSING OFFICER MAY REFER THE VALUAT ION OF THE CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS MADE, THE P ROVISIONS OF SUB-SECTIONS (2), (3), (4), (5) AND (6) OF SECTION 16A, CLAUSE (I) OF SUB-SECTION (1) AND SUB-SECTIONS (6) AND (7) OF SECTION 23A, SUB-SECTION (5) OF SEC TION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEALTH-TAX ACT, 1957 (27 OF 1 957), SHALL, WITH NECESSARY MODIFICATIONS, APPLY IN RE LATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESS ING OFFICER UNDER SUB-SECTION (1) OF SECTION 16A OF THAT ACT. 6 ITA NO. 2128 /HYD/2017 SHRI SUSHIL KUMAR NATHANY, HYD. EXPLANATION. FOR THE PURPOSES OF THIS SECTION, 'VALUATION OFFIC ER' SHALL HAVE THE SAME MEANING AS IN CLAUSE (R) OF SECTION 2 OF THE WEALTH-TAX ACT, 1957 (27 OF 1957). 7.1 FROM THE ABOVE, IT IS CLEAR THAT ASSESSEE HAS M ADE OBJECTIONS FOR ADOPTING VALUE OF STAMP VALUATION AUTHORITY, WH ICH EXCEEDS FMV OF THE PROPERTY ON THE DATE OF TRANSFER, AO MAY REF ER THE VALUATION OF THE CAPITAL ASSETS TO A VALUATION OFFICER. IN THE G IVEN CASE, AO HAS ADOPTED THE STAMP VALUATION WITHOUT REFERRING TO TH E VALUATION OFFICER, EVEN THOUGH, AO OBJECTED FOR ADOPTING SRO VALUE. IN THIS CONNECTION, WE REFER TO THE DECISION OF THE COORDINATE BENCH OF ITAT, VISHAKHAPATNAM IN THE CASE OF R. SUHASINI BHEEMUNIP ATNAM (SUPRA), WHEREIN THE COORDINATE BENCH HAS HELD AS UNDER: 7. WE HAVE CONSIDERED THE RIVAL ARGUMENTS AND EXAM INED THE RECORD AS PLACED BEFORE US. THERE IS NO DISPUTE WITH REFERENC E TO RAISING THE OBJECTION BEFORE THE ASSESSING OFFICER ITSELF BY THE ASSESSEE . THE ASSESSING OFFICER IS DUTY BOUND TO REFER THE VALUATION TO THE VALUATION OFFICER. ONCE THE ASSESSEE HAS DISPUTED THE VALUE ADOPTED BY THE STAMP VALUATI ON AUTHORITY, EVEN THOUGH THE SAME WAS NOT DISPUTED BEFORE THE STAMP V ALUATION AUTHORITY, THE COORDINATE BENCHES WERE CONSISTENTLY HOLDING THAT W ITH REFERENCE TO DVO UNDER SUB-SECTION 2 OF SECTION 50C IS MANDATORY. 8. IN THE CASE OF MEGHRAJ BAID VS. ITO, THE JODHPUR BENCH HAS HELD AS UNDER: IN CASE THE AO DOES NOT AGREE WITH THE EXPLANATION OF THE ASSESSEE WITH REGARD TO LOWER CONSIDERATION DISCLOSED BY HIM THEN HE SHOULD REFER THE MATTER TO DVO FOR GETTING ITS MARKET RATE ESTABLISH ED AS ON DATE OF THE SALE TO ARRIVE AT THE CORRECT SALE CONSIDERATION. IF THI S PROVISION IS READ IN THE SENSE THAT IF THE AO IS NOT SATISFIED WITH THE EXPL ANATION OF THE ASSESSEE THEN HE MAY OR MAY NOT SEND THE MATTER FOR VALU ATION TO THE DVO THEN IN THAT CASE THIS PROVISION WOULD BE RENDERED REDUNDAN T. THE WORD MAY USED IN THIS SUB-SECTION SIGNIFIES THAT IN CASE AO IS NO T SATISFIED WITH THE EXPLANATION OF THE ASSESSEE, HE SHOULD REFER THE MATTER TO THE DVO FOR THE MENTIONED PURPOSE. THE MATTER SHOULD BE RESTORED BA CK TO THE FILE OF THE AO WITH A DIRECTION THAT HE SHALL REFER THIS MATTER OF VALUATION IN THE LIGHT OF SUB-S.(2) OF S. 50C TO THE DVO FOR DETERMINING THE CONSIDERATION OF THIS PLOT SOLD BY THE ASSESSEE UNDER S.50C. 9. SIMILAR VIEW WAS EXPRESSED BY OTHER COORDINATE B ENCHES RELIED ON BY THE ASSESSEE IN THE COURSE OF ARGUMENTS. CONSIDERING TH E PROVISIONS OF SUB- SECTION 2 OF SECTION 50 WHEREIN IT IS VERY CLEARLY MENTIONED THAT IF THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICER THAT T HE VALUE ADOPTED AS ASSESSED BY STAMP VALUATION AUTHORITY EXCEEDS THE F AIR MARKET VALUE, THE ASSESSING OFFICER MAY REFER THE VALUATION OF THE CA PITAL ASSET TO A VALUATION OFFICER AND SUB-SECTION 3 PROVIDES THAT SUBJECT TO THE PROVISIONS CONTAINED IN SUB-SECTION 2, ONLY THE VALUE ADOPTED OR ASSESSED B Y STAMP VALUATION 7 ITA NO. 2128 /HYD/2017 SHRI SUSHIL KUMAR NATHANY, HYD. AUTHORITY SHALL BE TAKEN AS FULL VALUE OF CONSIDERA TION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER. THEREFORE, IT IS MANDATOR Y ON THE PART OF THE ASSESSING OFFICER TO REFER THE VALUATION TO THE DVO WHETHER ASSESSEE OBJECTS THE SAME BEFORE THE STAMP VALUATION AUTHORITY OR NO T. THEREFORE, WE ARE OF THE OPINION THAT BOTH THE ASSESSING OFFICER AND THE LD. CIT(A) ERRED IN NOT CONSIDERING THE ASSESSEES REQUEST. RESPECTFULLY FO LLOWING THE DECISIONS OF THE COORDINATE BENCHES, WE ARE OF THE OPINION THAT THE ASSESSING OFFICER HAS TO REFER THE ISSUE TO THE DVO AND THEN ONLY HE CAN ADOPT THE VALUATION UNDER THE PROVISIONS OF SECTION 50C. FOR THIS PURPO SE, WE SET ASIDE THE ORDER OF THE AO AND CIT ON THIS ISSUE AND RESTORE THE COM PUTATION OF CAPITAL GAIN TO THE FILE OF THE AO WITH A DIRECTION TO REFER THE ISSUE TO THE VALUATION OFFICER TO CONSIDER THE OBJECTIONS RAISED BY THE ASSESSEE A ND ADOPT THE FAIR MARKET VALUE ACCORDINGLY. 10. THE APPEAL CONSIDERED ALLOWED FOR STATISTICAL PURPOSES. WE ARE IN AGREEMENT WITH THE FINDINGS OF THE COORDI NATE BENCHES AND ACCORDINGLY, WE REMIT THIS ISSUE BACK TO THE FILE O F THE AO WITH A DIRECTION TO REFER THIS MATTER TO THE DVO AND REDO THE INCOME FROM CAPITAL GAINS DE-NOVO. 7.2 COMING TO THE ADOPTION OF SRO VALUE FOR COST OF ACQUISITION AS ON 1981 INSTEAD OF FMV AS ON THAT DATE, WE NOTICE T HAT SRO VALUE IS A GUIDELINE VALUE, WHICH IS TO BE APPLIED FOR CALCU LATION OF STAMP DUTY ONLY AND THE SAME IS BORNE BY THE PURCHASER. AS FAR AS SELLER IS CONCERNED, WHAT IS RELEVANT IS THE FAIR MARKET VALU E THAT COULD HAVE BEEN RECEIVED BY HIM. IN FEW CASES, THEY RAISE OBJE CTION BEFORE THE STAMP VALUATION AUTHORITY FOR ADOPTING HIGHER VALUA TION OR GO TO COURTS. THEREFORE, IT IS PROPER AND WISE TO ADOPT T HE ACTUAL FMV EXISTED AS ON 1981. THEREFORE, WE ARE INCLINED TO R EMIT THIS ISSUE ALSO TO THE FILE OF AO TO DETERMINE THE FMV AS ON 1981. THEREFORE, GROUND RAISED BY THE ASSESSEE ON THIS ISSUE IS ALLOWED. 7.3 WITH REGARD TO ADHOC DISALLOWANCE OF EXPENDITUR E OF RS. 1 LAKH, WE NOTICE THAT AO HAS DISALLOWED RS. 1 LAKH AGAINST THE CLAIM OF EXPENDITURE TO THE EXTENT OF RS. 6,47,621/-, WHICH MAY BE REDUCED TO 10% OF THE EXPENDITURE CLAIMED SINCE ALL THE EXPEND ITURES ARE RELATING TO RUNNING OF THE ASSESSEES BUSINESS. ACCORDINGLY, THIS GROUND IS PARTLY ALLOWED. 8 ITA NO. 2128 /HYD/2017 SHRI SUSHIL KUMAR NATHANY, HYD. 7.4 SINCE ASSESSEE HAS NOT PRESSED GROUND NOS. 2,3, 4 & 5, THE SAME ARE DISMISSED AS NOT PRESSED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 28 TH FEBRUARY, 2018. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAH MAN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 28 TH FEBRUARY, 2018 KV COPY TO:- 1) SHRI SUSHIL KUMAR NATHANY, C/O. S/SHRI AV RAGHURAM, P. VINOD & M. NEELIMA DEVI, ADVOCATES, 610 BABUKHAN EST ATE, BASHEERBAGH, HYDERABAD 500 001. 2) ITO, WARD 4(2), I.T. TOWERS, AC GUARDS, MASAB TANK, HYD 4. 3) CIT(A) 1, HYDERABAD. 4) PR. CIT 1 , HYDERABAD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6) GUARD FILE