M/s Transpek Industry Ltd, Baroda V. The ACIT.,Circle-4, Baroda

ITA 2161/AHD/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80268 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2014
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 04-08-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 24-06-2010
• Court: TRIBUNAL
• Department Lawyers: ROOP CHAND
• Keywords: Depreciation; Earning of tax free income; Additional evidence; Capital expenditure
• Section: 14A

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD , , , , 0 00 0 0 00 0 ' ' ' ' , , , , #$ #$ #$ #$ # % # % # % # % BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ITA NO. 2161/AHD/2010 (ASSESSMENT YEAR 2006-07) TRANSPEK INDUSTRY LIMITED. BARODA. PAN: AAACT8639B VS ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-4, BARODA. &'/ APPELLANT )*&' / RESPONDENT REVENUE BY : SHRI ROOPCHAND, SR. DR ASSESSEE(S) BY : SHRI SANJAY R. SHAH, AR + , $/ // / DATE OF HEARING : 04/08/2014 -./ , $ / DATE OF PRONOUNCEMENT: 08/08/2014 #0 #0 #0 #0/ // / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-III, BARODA DA TED 22.02.2010. 2. GROUND NO. 1 OF THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) SUSTAINING THE DISALLOWANCE OF DEPRECIATION CLAIMED OF RS 26,80,915/- ON THE WRITT EN DOWN VALUE BROUGHT FORWARD IN RESPECT OF TECHNICAL KNOW-HOW ACQUIRED I N THE EARLIER YEARS. ITA NO. 2161/A/2010 TRANSPEK INDUSTRY LTD., BARODA. AY 2006-07 - 2 - 3. AT THE TIME OF HEARING, THE AUTHORIZED REPRESEN TATIVE OF THE ASSESSEE SUBMITTED THAT THE SAME ISSUE HAS ARISEN I N THE ASSESSMENT YEAR 2004-05 ALSO AND THAT THE FACTS IN THE PRESENT YEAR OF APPEAL ARE ALSO THE SAME. HE SUBMITTED THAT IN THE ASSESSMENT YEAR 200 4-05, THE TRIBUNAL HAD RESTORED THE MATTER BACK TO THE FILE OF THE ASSESSI NG OFFICER FOR ADJUDICATION OF THE ISSUE AFRESH AND PRAYED THAT FOLLOWING THE O RDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2004-05, THIS ISSUE IN THE PRESENT YEAR OF APPEAL SHOULD ALSO BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION IN THE LIGHT OF THE DIRECTIONS GIVEN B Y THE TRIBUNAL IN ASSESSMENT YEAR 2004-05. 4. THE DEPARTMENTAL REPRESENTATIVE HAD NO OBJECTIO N TO THE ABOVE SUBMISSION OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE. 5. WE FIND THAT THE TRIBUNAL IN THE ASSESSMENT YEA R 2004-05 VIDE CONSOLIDATED ORDER PASSED IN ITA NOS. 135 & 716/AHD /2009 AT PARA 14 ON PAGE NO. 13 OF THE ORDER HAS HELD AS UNDER: 14. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL PLACED ON RECORD. AT THE OUTSET, IT IS NECESSARY TO DECID E WHETHER THE ADDITIONAL EVIDENCES ARE TO BE ADMITTED OR NOT. CO NSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE , WE ARE OF THE CONSIDERED VIEW THAT THE EVIDENCES WHICH ARE NOW PL ACED ON RECORD SHOULD HAVE BEEN FILED BEFORE THE AO. THE EVIDENCE S HAVE A DIRECT BEARING ON THE ISSUE IN HAND. HAD THOSE EVIDENCES WERE FILED BEFORE THE AO, THE RESULT COULD BE DIFFERENT. ALTHOUGH AT THIS STAGE OF APPEAL, IN THE ABSENCE OF ANY INVESTIGATION, IT IS IMPOSSIB LE TO COMMENT IN EITHER WAY. WE, THEREFORE, HOLD THAT THE ADDITIONA L EVIDENCES ARE REQUIRED TO BE ADMITTED FOR CORRECT DISPOSAL OF THE ISSUE. NOW WE HAVE TO DECIDE THAT WHETHER THE ASSESSEE HAS IN FACT PRO CURED TECHNICAL KNOW-HOW FROM THESE PARTIES. THE EVIDENCES WHICH ARE NOW SUPPORTING THE SAID CLAIM REQUIRES THOROUGH INVESTI GATION ON THE PART OF THE YEAR. WE HAVE ALSO TO DECIDE WHETHER ASSESS EE WAS IN FACT REQUIRING SUCH TECHNICAL KNOW-HOW, AND IF IT WAS SO, THEN HOW AND WHY THOSE EVIDENCES WERE NOT PLACED BEFORE THE LOWE R AUTHORITIES. FOR THE PURPOSE OF ALLOWING TECHNICAL KNOW-HOW, IT IS NECESSARY ON THE PART OF THE ASSESSEE TO ESTABLISH THE DETAILS OF TH E PROCUREMENT AND THE BUSINESS NECESSITY AS ALSO THE NATURE OF THE T ECHNICAL KNOW-HOW PROCURED. WHILE DECIDING SUCH TYPE OF ISSUE, ONE H AS TO KEEP IN MIND THE DISTINCTION BETWEEN THE PURCHASE/TRANSFER OF TE CHNICAL KNOW-HOW ITA NO. 2161/A/2010 TRANSPEK INDUSTRY LTD., BARODA. AY 2006-07 - 3 - WITH THE MERE AVAILING OF SERVICE OF A TECHNICAL PE RSON WHO HAS THE KNOWLEDGE OF SAID TECHNICAL KNOW-HOW. IF A TECHNIC IAN IS ON PAY-ROLL, THEN HE CANNOT BE SAID TO BE TRANSFERRING THE TECHN ICAL KNOW-HOW UNLESS AND UNTIL HE IS ENGAGED TO TRANSFER THE TE CHNICAL KNOW-HOW. RENDERING OF SERVICE BY A TECHNICAL PERSON CANNOT B E EQUATED WITH TRANSFERRING OF KNOWLEDGE. SINCE THE EVIDENCES NOW PLACED IN THE COMPILATION, WERE NOT BEFORE THE AO, THEREFORE WE C ONSIDER IT PROPER TO RESTORE THIS ISSUE BACK TO THE STAGE OF THE AO TO I NVESTIGATE PROPERLY THE GENUINENESS OF THE PROCUREMENT OF TECHNICAL KN OW-HOW AS ALSO THE USE OF TECHNICAL KNOW-HOW IN THE MANUFACTURIN G PROCESS AND WHETHER AN INTANGIBLE ASSET WAS CREATED BY MAKING T HE IMPUGNED PAYMENT. WE THEREFORE DIRECT THE ASSESSEE TO FULLY CO-OPERATE WITH THE AO AND FURNISH THE REQUISITE DETAILS. AS FAR A S THE DIRECTIONS OF THE LD. CIT(A) ARE CONCERNED, THE EXISTENCE OR CREATION OF AN INTANGIBLE ASSET. WITH THESE DIRECTIONS, THIS GROUND OF THE A SSESSEE MAY BE TREATED AS ALLOWED BUT FOR STATISTICAL PURPOSES ONL Y. WE, THEREFORE, SET ASIDE THE ORDERS OF LOWER AUTHOR ITIES AND REMAND THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO ADJUDICATE THE ISSUE AFRESH IN THE LIGHT OF THE VERY SAME DIRECTIONS AS GIVEN B Y TRIBUNAL IN ASSESSMENT YEAR 2004-05 AS QUOTED ABOVE. THUS, THIS GROUND OF APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 6. GROUND NO. 2 OF THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DISALLOWING BA D DEBT WRITTEN OFF FOR RS 25,29,250/- ON THE GROUND THAT THE WRITE-OFF WAS NOT BONAFIDE IN VIEW OF THE ASSESSEES GENUINE BUSINESS RELATIONSHIP WITH T HE DEBTOR CONCERNED DURING THE YEAR. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE CLAIMED DEDUCTION FOR RS 25,29,250/- AS BA D DEBT BY WRITING OFF DEBT OF RS 25,29,250/- RELATING TO M/S. RAJDA CHEMI CALS. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS GENUINE BUSI NESS RELATIONS WITH THE SAID M/S. RAJDA CHEMICALS AND PAID COMMISSION DURIN G THE YEAR TO THE SAID PARTY IN RESPECT OF SALES MADE THROUGH THAT PARTY. ACCORDING TO THE ASSESSING OFFICER, HE COULD NOT UNDERSTAND WHY THE ASSESSEE COULD NOT ITA NO. 2161/A/2010 TRANSPEK INDUSTRY LTD., BARODA. AY 2006-07 - 4 - RECOVER THE AMOUNT IN QUESTION FROM THE SAID PARTY WHEN IT WAS PAYING COMMISSION TO THE SAID PARTY DURING THE YEAR UNDER CONSIDERATION ALSO. THE ASSESSING OFFICER, RELYING UPON THE DECISION OF HON BLE GUJARAT HIGH COURT IN THE CASE OF DHALL ENTERPRISES AND ENGINEERS (P) LTD . VS. CIT REPORTED IN 295 ITR 481 (GUJ.), HELD THAT AS THE ASSESSEE COULD NOT PROVE THAT THE DEBT DUE FROM SAID M/S. RAJDA CHEMICALS BECAME BAD DURING TH E YEAR UNDER CONSIDERATION, HE DISALLOWED THE SAME. 8. BEFORE US, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE EXPLAINED THAT THE DEBT IN QUESTION RELATES TO SALE TO SAID M/S. RAJDA CHEMICALS MADE IN EARLIER YEARS AND THE SAID M/S. R AJDA CHEMICALS IN TURN SUPPLIED THE SAID GOODS TO M/S. EAST INDIA CO. LTD. AS THE QUALITY OF GOODS WAS NOT UP TO THE MARK, THE SAID M/S. EAST INDIA CO . LTD. DID NOT MAKE ANY PAYMENT TO SAID M/S. RAJDA CHEMICALS AND IN TURN TH E SAID PARTY DID NOT MAKE ANY PAYMENT TO THE ASSESSEE. IN THE ABOVE CIR CUMSTANCES, THE AMOUNT IN QUESTION WAS CLAIMED AS BAD DEBT. IN SUP PORT OF THE ABOVE CONTENTION, THE AUTHORIZED REPRESENTATIVE OF THE AS SESSEE POINTED OUT TO A LETTER DATED 27.01.2006 WRITTEN BY SAID M/S. RAJDA CHEMICALS WHICH IS PLACED AT PAGE NO. 109 OF THE PAPER BOOK WHEREIN TH E SAID PARTY HAS CONFIRMED THAT BECAUSE OF THE DEFECT IN THE QUALITY OF GOODS, THE SAID PARTY COULD NOT RECEIVE PAYMENT IN RESPECT OF SAID GOODS AND THEREFORE, COULD NOT MAKE PAYMENT TO THE ASSESSEE. 9. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE A LSO PLACED RELIANCE ON THE DECISION OF THE HONBLE SUPREME COU RT IN THE CASE OF TRF LIMITED VS. CIT 328 ITR 396 (SC) IN SUPPORT OF ITS CLAIM FOR DEDUCTION AND CONTENDED THAT THE ASSESSEE WAS NOT REQUIRED TO PRO VE THAT DEBT HAS BECOME BAD IN THE RELEVANT YEAR. THE AUTHORIZED RE PRESENTATIVE OF THE ASSESSEE ALTERNATIVELY CLAIMED THAT IF THE AMOUNT I S NOT ALLOWED AS BAD DEBT, THEN IT OUGHT TO BE ALLOWED AS BUSINESS LOSS. ITA NO. 2161/A/2010 TRANSPEK INDUSTRY LTD., BARODA. AY 2006-07 - 5 - 10. WE FIND THAT THE HONBLE SUPREME COURT IN THE CASE OF TRF LIMITED (SUPRA) HAS HELD THAT UNDER THE PRESENT LAW IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DEBT HAS, IN FAC T, BECOME BAD. IT IS ENOUGH IF THE BAD DEBT IS WRITTEN OFF AS IRRECOVERA BLE IN THE ACCOUNTS OF THE ASSESSEE. THEREFORE, THE LOWER AUTHORITIES WERE NO T JUSTIFIED IN DISALLOWING THE CLAIM ON THE GROUND THAT THE ASSESSEE COULD NOT PROVE THAT DEBT HAS BECOME BAD DURING THE RELEVANT YEAR. 11. WE FIND THAT THE ASSESSEE HAS FILED BEFORE US A LETTER DATED 27.01.2006 WRITTEN BY M/S. RAJDA CHEMICALS WHICH HA S NOT BEEN MENTIONED IN THE ORDER OF EITHER OF THE LOWER AUTHORITIES. I N THE ABOVE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, IT SHALL BE FAIR AND IN THE INTEREST OF JUSTICE TO RESTORE THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION AFRESH AFTER VERIFICATION OF THE SAID LETTER AND KE EPING IN VIEW THE OBSERVATIONS MADE HEREINABOVE AS PER LAW AFTER ALLO WING REASONABLE PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. HENCE, THI S GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 12. GROUND NO. 3 OF THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMING THE DISALLOWANCE OF RS 2,56,210/- ACCOUNTED FOR AS PRIOR PAID EXPENSES IN RESPECT OF WHICH LIABILITY CRYSTALLIZED DURING THE YEAR. 13. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SING OFFICER OBSERVED THAT THE ASSESSEE HAS DEBITED PRIOR PAID E XPENSES AMOUNTING TO RS 2,56,210/-. THE ASSESSEE WAS REQUIRED TO STATE AS TO WHY THE SAME SHOULD BE ALLOWED TO IT WHEN IT WAS FOLLOWING MERCANTILE S YSTEM OF ACCOUNTING. THE ASSESSEE SUBMITTED VIDE LETTER DATED 24.12.2008 THA T SINCE THE LIABILITY CRYSTALLIZED DURING THE CURRENT YEAR, THEREFORE THE SAME WAS CLAIMED AS DEDUCTION DURING THE CURRENT YEAR. THE ASSESSING O FFICER OBSERVED THAT THE EXPLANATION OF THE ASSESSEE IS NOT TENABLE AS IT HA D NOT FURNISHED EVIDENCES ITA NO. 2161/A/2010 TRANSPEK INDUSTRY LTD., BARODA. AY 2006-07 - 6 - TO SHOW THAT HOW THE EXPENSES HAVE CRYSTALLIZED DUR ING THE YEAR UNDER CONSIDERATION. THE ASSESSEE WAS FOLLOWING MERCANTI LE SYSTEM OF ACCOUNTING AND HENCE THE ASSESSEE IS NOT ALLOWED TO DEBIT PRIO R PAID EXPENSES UNLESS AND UNTIL THE SAME WAS CRYSTALLIZED IN THE YEAR UND ER CONSIDERATION. THE ASSESSEE HAS NOT BEEN ABLE TO PROVE WITH EVIDENCES THAT THE EXPENSES HAVE BEEN CRYSTALLIZED DURING THE YEAR AND THEREFORE HE DISALLOWED THE CLAIM OF THE ASSESSEE. 14. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APP EALS) CONFIRMED THE ACTION OF THE ASSESSING OFFICER ON TH E GROUND THAT NO EVIDENCES HAVE BEEN FURNISHED TO SUPPORT THE CLAIM THAT THE EXPENSES HAVE CRYSTALLIZED DURING THE YEAR AND HENCE WERE ALLOWAB LE DURING THE YEAR UNDER CONSIDERATION. 15. BEFORE US, AN APPLICATION FOR ADMISSION OF ADD ITIONAL EVIDENCES FILED AT PAGE NOS. 115 TO 162 OF PAPER BOOK FOR PRI OR PAID EXPENSES WITH DESCRIPTION/REMARKS HAS BEEN FILED. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS REQUESTED FOR ADMISSION OF THE SAME. 16. THE DEPARTMENTAL REPRESENTATIVE HAS VEHEMENTLY OBJECTED TO ADMISSION OF THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAD AMPLE OPPORTUNITY TO FILE THE SE EVIDENCES BEFORE THE ASSESSING OFFICER AND THE COMMISSIONER OF INCOME TA X (APPEALS) AND IT DID NOT DO SO, AND THEREFORE, ADDITIONAL EVIDENCES NOW FILED BEFORE THE TRIBUNAL SHOULD NOT BE ADMITTED. 17. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND TH E MATERIALS AVAILABLE ON RECORD, WE ARE OF THE CONSIDERED VIEW THAT IN ORDER TO RENDER SUBSTANTIAL JUSTICE IN THE MATTER, IT WOULD BE FAIR AND IN THE INTEREST OF JUSTICE TO RESTORE THE MATTER BACK TO THE FILE OF THE ASSES SING OFFICER TO READJUDICATE THE ISSUE OF ALLOWABILITY OF PRIOR PAID EXPENSES OF RS 2,56,210/- AFRESH AFTER ITA NO. 2161/A/2010 TRANSPEK INDUSTRY LTD., BARODA. AY 2006-07 - 7 - CONSIDERING THE ADDITIONAL EVIDENCES FILED BY THE A SSESSEE BEFORE US. THE ASSESSING OFFICER SHALL ALLOW REASONABLE AND SUFFIC IENT OPPORTUNITY OF HEARING TO THE ASSESSEE BEFORE ADJUDICATING THE ISSUE AFRES H. THE ASSESSEE IS ALSO DIRECTED TO FILE THE ADDITIONAL EVIDENCES IN SUPPOR T OF CLAIM OF THE PRIOR PAID EXPENSES WHEN CALLED UPON TO DO SO BY THE ASSESSING OFFICER. THUS, THIS GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSE . 18. GROUND NO. 4 OF THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMING THE DISALLOWANCE OF APPRECIATION AT THE RATE OF 100% AMOUNTING TO RS 22 ,39,574/- IN RESPECT OF ASSETS INDIVIDUALLY COSTING LESS THAN RS 5,000/- WI THOUT APPRECIATING THE NATURE OF ASSETS/ EXPENSES. 19. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE CLAIMED RS 22,39,574/- AS REVENUE DEDUCTIO N ON THE GROUND THAT THE COST OF EACH OF THE ASSETS PURCHASED WAS LESS T HAN RS 5,000/-. THE ASSESSING OFFICER DISALLOWED THE SAME BEING CAPITAL EXPENDITURE. 20. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APP EALS) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. HOW EVER, THE COMMISSIONER OF INCOME TAX (APPEALS) DIRECTED THE ASSESSING OFFI CER TO ALLOW DEPRECIATION THEREON AS PER APPLICABLE RATE. 21. BEFORE US, THE AUTHORIZED REPRESENTATIVE OF TH E ASSESSEE CONTENDED THAT THE ITEMS FALL UNDER THE CATEGORY OF VENTURIES AND DEPRECIATION APPLICABLE THEREON IS 100%. 22. WHEN THE BENCH ASKED THE ASSESSEE WHAT IS THE GRIEVANCE OF THE ASSESSEE AND WHAT WAS THE MISTAKE IN THE ORDER OF T HE COMMISSIONER OF INCOME TAX (APPEALS), THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE COULD ITA NO. 2161/A/2010 TRANSPEK INDUSTRY LTD., BARODA. AY 2006-07 - 8 - NOT GIVE ANY REPLY THERETO. IN THE CIRCUMSTANCES, WE DO NOT FIND ANY ERROR IN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S) WHEREIN THE COMMISSIONER OF INCOME TAX (APPEALS) HAS CLEARLY DI RECTED THE ASSESSING OFFICER TO ALLOW DEPRECIATION AS PER APPLICABLE RAT E. WE, THEREFORE, CONFIRM THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S) ON THIS ISSUE AND DISMISS THE GROUND OF APPEAL OF THE ASSESSEE. 23. GROUND NO. 5 OF THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) SUSTAINING AD HOC DISALLOWANCE OF RS 1,54,559/- BEING 5% OF THE AMOUNT OF EXEMPT INCOME OF RS 30,91,180/- BY INVOKING THE PROVISIONS OF SECTION 14A OF THE ACT. 24. AT THE TIME OF HEARING, THE AUTHORIZED REPRESE NTATIVE OF THE ASSESSEE SUBMITTED THAT HE IS NOT PRESSING THIS GRO UND OF APPEAL. HENCE, THE SAME IS DISMISSED AS NOT PRESSED. 25. GROUND NO. 6 OF THE APPEAL IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMING THE ACTION OF ASSESSING OFFICER DISALLOWING A SUM OF RS 1,51,000/- BY INVOK ING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT IN RESPECT OF LEGAL AN D PROFESSIONAL FEES ON WHICH TAX WAS NOT DEDUCTED AT SOURCE DESPITE THE FACT THA T THE ASSESSEE HAD SUO MOTU DISALLOWED THE SAME IN THE RETURN OF INCOME FI LED FOR THE YEAR. 26. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER DISALLOWED RS 1,51,000/- BEING LE GAL AND PROFESSIONAL FEES ON THE GROUND THAT THE ASSESSEE FAILED TO DEDUCT TD S THEREON. ITA NO. 2161/A/2010 TRANSPEK INDUSTRY LTD., BARODA. AY 2006-07 - 9 - 27. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APP EALS) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 28. THE GRIEVANCE AS CONTENDED BEFORE US BY THE AU THORIZED REPRESENTATIVE OF THE ASSESSEE WAS THAT THE ASSESSE E ITSELF DEDUCTED THE AFORESAID RS 1,51,000/- IN ITS COMPUTATION OF TOTAL INCOME AND THEREFORE FURTHER DISALLOWANCE OF RS 1,51,000/- BY THE ASSESS ING OFFICER AMOUNTS TO DOUBLE DISALLOWANCE OF THE SAME AMOUNT. IN SUPPORT OF THE CLAIM, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE FILED BEF ORE US ITS COMPUTATION OF INCOME AT PAGE NO. 1 OF THE PAPER BOOK. FROM THE S AID COMPUTATION, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE POINTED O UT THAT RS 11,19,500/- WAS ADDED BACK BY THE ASSESSEE WITH THE NARRATION DISALLOWANCE U/S. 40A. 29. WHEN ASKED BY THE BENCH TO FURNISH THE BREAK-U P OF RS 11,19,500/-, THE AUTHORIZED REPRESENTATIVE OF THE A SSESSEE COULD NOT DO SO ON THE GROUND THAT THE SAME WAS NOT READILY AVAILAB LE WITH HIM. 30. THE DEPARTMENTAL REPRESENTATIVE ALSO COULD NOT BRING ANY MATERIAL BEFORE US TO CONTROVERT THE CONTENTION OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE. 31. IN THE ABOVE CIRCUMSTANCES, IN OUR CONSIDERED VIEW, IT SHALL BE FAIR AND IN THE INTEREST OF JUSTICE TO RESTORE THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR PROPER VERIFICATION OF THE AM OUNT OF RS 11,19,500/- ADDED BACK BY THE ASSESSEE IN THE COMPUTATION OF IN COME AND THEREAFTER TO READJUDICATE THE ISSUE AS PER LAW. NEEDLESS TO MEN TION THAT THE ASSESSING OFFICER SHALL ALLOW REASONABLE AND PROPER OPPORTUNI TY OF HEARING TO THE ASSESSEE BEFORE ADJUDICATING THE ISSUE AFRESH. THU S, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ITA NO. 2161/A/2010 TRANSPEK INDUSTRY LTD., BARODA. AY 2006-07 - 10 - 32. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 8 TH OF AUGUST, 2014 AT AHMEDABAD. SD/- SD/- (MUKUL KR. SHRAWAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 08/08/2014 GHANSHYAM MAURYA, SR. P.S. TRUE COPY #0 , )1 2#1/ #0 , )1 2#1/ #0 , )1 2#1/ #0 , )1 2#1// COPY OF THE ORDER FORWARDED TO : 1. &' / THE APPELLANT 2. )*&' / THE RESPONDENT. 3. 3 / CONCERNED CIT 4. 3() / THE CIT(A)-III, AHMEDABAD 5. 167 ) , , / DR, ITAT, AHMEDABAD 6. 78 9+ / GUARD FILE. #0 #0 #0 #0 / BY ORDER, : :: :/ // / ; ; ; ; ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD