The DCIT, Circle-9, Surat V. M/s. Vasudev Electrical Corporation, Surat

ITA 2306/AHD/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67811 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-09-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 09-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Assessee Lawyers: M K PATEL
• Keywords: Unexplained cash credit; Source of fund; Additional evidence
• Section: 68; 144

Judgement Text

ITA NO 2306/A/2010 . A.Y. 2007- 08 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD (BEFORE SHRI D.K. TYAGI, J.M. & SHRI ANIL CHATURVE DI, A.M.) I.T. A. NO. 2306/AHD/2010 (ASSESSMENT YEAR:2007-08) THE D.C.I.T, CIRCLE-9, SURAT (APPELLANT) VS. M/S. VASUDEV ELECTRICAL CORPORATION 8, M.D. TOWER, NEAR MINI BAZAR, VARACHHA ROAD, SURAT (RESPONDENT) PAN: AACFV9238 P APPELLANT BY : SHRI O.P. BATHEJA, SR. D. R. RESPONDENT BY : SHRI M.K. PATEL, A.R. ( )/ ORDER DATE OF HEARING :17-09-2013 DATE OF PRONOUNCEMENT :04-10-2013 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF CIT(A)-V, SURAT DATED 07.04.2010 FOR A.Y. 2007-08. 2. THE FACTS AS CULLED OUT FROM THE ORDER OF LOWER AUT HORITIES ARE AS UNDER: 3. ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSIN ESS OF TRADING OF ELECTRIC GOODS AND ELECTRIC LABOUR CONTRACT. ASSES SEE FILED ITS RETURN OF ITA NO 2306/A/2010 . A.Y. 2007- 08 2 INCOME FOR A.Y. 07-08 ON 24.09.2007 DECLARING TOTAL INCOME OF RS. 8,04,325/-. THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS FRAMED UNDER SECTION 144 OF THE ACT AND THE TOTAL I NCOME WAS DETERMINED AT RS. 2,13,29,200/-. AGGRIEVED BY THE ORDER OF AS SESSING OFFICER, ASSESSEE CARRIED THE MATTER BEFORE CIT(A), CIT(A) V IDE ORDER DATED 07.04.2010 GRANTED SUBSTANTIAL RELIEF TO THE ASSESS EE. AGGRIEVED BY THE AFORESAID ORDER OF CIT(A), THE REVENUE IS NOW IN AP PEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS. 62,97,788/- M ADE BY THE A.O. ON ACCOUNT OF THE SUNDRY CREDITORS AFTER ADMITTING ADDITIONAL EVI DENCE IN CONTRAVENTION OF RULE 46A OF THE I.T. RULES, 1962 IGNORING THE FACT THAT THE ASSESSEE FAILED TO SUBSTANTIATE THE CREDITORS BEFORE THE AO. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS. 26,03,728/- M ADE ON ACCOUNT OF THE UNEXPLAINED CAPITAL INTRODUCTION MADE IN CASH AFTER ADMITTING ADDITIONAL EVIDENCE IN CONTRAVENTION OF RULE 46A OF THE I.T. RULES, 196 2, IGNORING THE FACT THAT THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OR GENUINENES S OF THE SAME. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.1,12,80,134/- ON ACCOUNT OF NON FILING OF DETAILS OF TDS, AFTER ADMITTING ADDITIONAL EVIDENCE WITHOUT AFFORDING OPPORTUNITY TO THE AO TO EXAMINE THE SAME IN CONTRAVENTION TO R ULE 46A OF THE I.T. RULES, 1962. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) HAS ERRED IN REDUCING THE DISALLOWANCE BY RS. 2,05,936/ - OUT OF TOTAL ADDITION OF RS. 3,43,228/- MADE ON ACCOUNT OF NON PRODUCTION OF CAS H VOUCHERS WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE FAILED TO P RODUCE A SINGLE VOUCHER. GROUND NO. 1 IS WITH RESPECT TO ADDITION OF RS. 62,97,788/- ON ACCOUNT OF SUNDRY CREDITORS. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A.O. O N PERUSING THE BALANCE SHEET NOTICED THAT ASSESSEE HAD SHOWN SUNDR Y CREDITORS OF RS. 62,97,788/-. SINCE THE DETAILS SUBMITTED BY THE ASS ESSEE WAS INCOMPLETE THE ADDRESSES, PAN NUMBERS OR CREDITWORTHINESS OF T HE PARTIES WAS NOT ITA NO 2306/A/2010 . A.Y. 2007- 08 3 PROVED, ASSESSING OFFICER TREATED THE SAME AS UNEXP LAINED CASH CREDIT UNDER SECTION 68 AND ADDED TO THE INCOME. AGGRIEVE D BY THE ORDER OF ASSESSING OFFICER, ASSESSEE CARRIED THE MATTER BEFO RE CIT(A), CIT(A) DELETED THE ADDITION BY HOLDING AS UNDER:- 5. I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER AS WELL AS THE SUBMISSION OF THE APPELLANT. I HAVE ALSO GONE THROUGH THE COPIES OF S UBMISSION MADE BY THE APPELLANT DURING ASSESSMENT PROCEEDINGS WHICH WERE ALSO FILED BEFORE ME. IT CAN BE CLEARLY MADE OUT FROM THE COPIES OF SUBMISSION MADE BY THE APPELLANT DURING THE ASSESSMENT PROCEEDINGS THAT CONFIRMATIONS WERE SUBMITTED TO TH E FILE OF THE AO. THE AO HAD FAILED TO EXPLAIN WHY SUCH CONFIRMATIONS PRODUCED A T THE TIME OF ASSESSMENT PROCEEDINGS WERE NOT CONSIDERED WHILE PASSING ASSES SMENT ORDER. IF DOUBTED THE AO COULD HAVE CALLED FOR CONFIRMATION DIRECTLY FROM TR ADE CREDITORS. IT IS SEEN FROM THE SCHEDULE 8 OF THE BALANCE SHEET THAT THERE ARE SUND RY CREDITORS TO THE TUNE OF RS.62,97,788/-. OUT OF THESE CREDITORS, THE ASSESS EE VIDE HIS LETTER DATED 24.12.2009 FILED BEFORE THE ASSESSING OFFICER HAS FURNISHED LE DGER COPIES ALONG WITH CONFIRMATIONS FROM 35 CREDITORS. IT IS ALSO NOTIC ED THAT THESE CREDITORS INCLUDE OPENING BALANCE OF VARIOUS PARTIES IN ADDITION TO T HE CREDIT BALANCE IN RESPECT OF PURCHASES MADE DURING THE YEAR UNDER REFERENCE. T HE ASSESSING OFFICER HAS NOT DISPUTED THE PURCHASES FROM THESE PARTIES. THEREF ORE, TREATING PART OF THE PURCHASES SHOWN AS CREDITORS DURING THE YEAR AS UNEXPLAINED U NDER SECTION 68 IS NOT JUSTIFIED AND LEGALLY NOT SUSTAINABLE. UNDER SECTION 68 WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF THE ASSESSEE AND ASSESSEE OFFERS NO EXPLAN ATION ABOUT THE NATURE OF SOURCES THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT S ATISFACTORY, THE SUM OF CREDITED MAY BE CHARGED AS INCOME OF THE ASSESSEE FOR THE PREVIO US YEAR. IN THE INSTANT CASE, THE ASSESSEE HAS FURNISHED DETAILS AS CALLED FOR BY THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS TAKEN A CONTRARY VIEW THAT THE DETAILS WERE NOT SUBMITTED IN SPITE OF SEVERAL REMINDERS. THIS VIEW OF THE ASSESSING OFFIC ER IS INCONSISTENT WITH FACTS AVAILABLE ON RECORDS. THE ASSESSING OFFICER HAS NOT DEALT WITH THE LETTERS OF THE ASSESSEE DATED 16.12.2009, 21.12.2009 AND 24.12.200 9 FILED BEFORE HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE TRADE CREDITO RS WERE FROM PURCHASES MADE BY THE APPELLANT. FULL SET OF PURCHASE BILLS WAS PRODU CED BY THE APPELLANT DURING ASSESSMENT PROCEEDINGS. HENCE THE CONTENTION OF THE AO THAT DETAILED ADDRESS OF TRADE CREDITORS WAS NOT SUBMITTED IS ERRONEOUS. THE RE IS FORCE IN THE SUBMISSION OF THE APPELLANT THAT WHEN THE BOOK RESULT OF THE APPELLAN T IS ACCEPTED AND NO FLAW FOUND BY THE AO IN THE PURCHASES OF THE APPELLANT, THERE CAN NOT BE ANY ADDITION REGARD TO THE TRADE CREDITORS. HENCE I DELETE THE ADDITION OF RS. 62,97,988/- MADE BY THE AO. 6. AGGRIEVED BY THE ORDER OF A.O, REVENUE IS NOW IN AP PEAL BEFORE US. ITA NO 2306/A/2010 . A.Y. 2007- 08 4 7. BEFORE US, THE LD. D.R. SUPPORTED THE ORDER OF A.O, AND FURTHER SUBMITTED THAT CIT(A) HAS ADMITTED ADDITIONAL EVIDENCE IN CON TRAVENTION OF RULE 46A OF THE I.T. RULES. HE THUS SUPPORTED THE ORDER OF A.O. THE LD. A.R. ON THE OTHER HAND SUBMITTED THAT NO ADDITIONAL EVID ENCE WAS FILED BEFORE CIT(A) . HE FURTHER SUBMITTED THAT THE ASSESSEE HA D FILED CONFORMATIONS BEFORE THE ASSESSING OFFICER AND IN SOME OF THE CAS ES THE BALANCES INCLUDED OPENING BALANCE IN RESPECT OF PURCHASES MA DE DURING EARLIER YEARS. HE THUS SUPPORTED THE ORDER OF CIT(A). 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) WHILE DELETING THE ADDITION HAS GIVEN A FINDING THAT THE ASSESSEE HAD FILED CONFIRMATIONS BEFORE ASSESSI NG OFFICER AND HAD ALSO FURNISHED COPIES OF LEDGER ACCOUNTS. HE HAS F URTHER NOTED THAT THE ASSESSING OFFICER HAS NOT DISPUTED THE PURCHASES MA DE BY THE ASSESSEE FROM THE AFORESAID PARTIES. HE HAS FURTHER GIVING A FINDING THAT THE TRADE CREDITORS WERE FROM PURCHASES AND FULL SET OFF OF P URCHASE BILLS WERE PRODUCED BEFORE ASSESSING OFFICER. THE LD. D.R. COU LD NOT CONTROVERT THE FINDINGS OF CIT(A) BY BRINGING ANY CONTRARY MATERIA L ON RECORD. IN VIES OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERF ERE WITH THE ORDER OF CIT(A). THUS THIS GROUND IS DISMISSED . GROUND NO. 2 IS WITH RESPECT TO ADDITION OF RS. 26,03,728/- ON ACCOUNT OF CAPITAL INTRODUCTION BY THE PARTNERS. 9. ASSESSING OFFICER NOTICED THAT IN CASE OF SHRI JASW ANTBHAI PATEL AND SHRI KALPESH PATEL, THE PARTNERS OF THE FIRM, THERE WAS CAPITAL INTRODUCTION OF RS. 13,09,364/- AND 12,94,364/- RESPECTIVELY. HE FU RTHER NOTICED THAT THE ITA NO 2306/A/2010 . A.Y. 2007- 08 5 ADDITION TO CAPITAL ACCOUNT WAS IN CASH. HE ACCORDI NGLY ADDED THE AGGREGATE AMOUNT OF RS. 26,03,728/- AS INCOME OF TH E FIRM. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, ASSESSEE CARRIED THE MATTER BEFORE CIT(A), CIT(A) DELETED THE ADDITION BY HOLDING AS U NDER:- 9 I HAVE CAREFULLY CONSIDERED BOTH THE POSITIONS. FROM THE OBSERVATIONS OF THE AO IN THE ASSESSMENT ORDER AS ALSO THE SUBMISSION OF THE AR BOTH IN ASSESSMENT PROCEEDINGS AND IN APPELLATE PROCEEDINGS, I FIND THAT MORE THAN SUFFICIENT EVIDENCE HAD BEEN FURNISHED TO EXPLAIN THE SOURCE OF THE FUNDS INTROD UCED BY THE PARTNERS INTO THE ASSESSEE FIRM DURING THE YEAR UNDER CONSIDERATION. THEIR PAN, AS ALSO THE COPIES OF THEIR CAPITAL ACCOUNTS FROM THEIR INDIVIDUAL BOOKS OF ACCOUNT WERE FURNISHED ALONG WITH COPIES OF THEIR BALANCE-SHEETS AND P&L ACCOUNT S AND ACKNOWLEDGMENT OF THE RETURNS OF INCOME FILED BY THEM DURING THE YEAR UND ER CONSIDERATION, HAD ALL BEEN FILED. THEREFORE, THE AO WAS NOT JUSTIFIED IN SIMPL Y DISMISSING SUCH EVIDENCE AND TREATING THE FUNDS INTRODUCED BY THE PARTNERS AS UN EXPLAINED CASH CREDITS IN THE HANDS OF THE ASSESSEE FIRM. 9.1 MOST IMPORTANTLY, IT HAS TO BE ACCEPTED AND UN DERSTOOD THAT NO ADDITION COULD BE MADE IN THE HANDS OF THE FIRM, OF THE SUMS INTRODUC ED BY THE PARTNERS, AS UNEXPLAINED CASH CREDITS. IF AT ALL ANY ADDITION WAS TO BE MADE , IT COULD ONLY BE MADE IN THE HANDS OF THE INDIVIDUAL PARTNERS, WHERE THEY COULD BE CAL LED UPON TO EXPLAIN THE SOURCE OF SUCH FUNDS, AND ACTION COULD BE TAKEN ACCORDINGLY, UNDER THE ACT. IT HAS BEEN HELD BY VARIOUS COURTS AND TRIBUNALS THAT WHEN CASH IS INTR ODUCED INTO A PARTNERSHIP FIRM, AND IF THE PARTNERS ARE UNABLE TO EXPLAIN THE SOURC E OF SUCH FUNDS IN ASSESSMENT PROCEEDINGS OF THE FIRM, NO ADDITION CAN BE MADE OF SUCH SUMS AS UNEXPLAINED CASH CREDITS UNDER THE PROVISIONS OF SECTION 68 OF THE I T ACT IN THE HANDS OF THE FIRM. THE ADDITION OF THE SUM OF RS. 26,03,728/- WILL THEREFO RE, STAND DELETED. 10. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE IS NO W IN APPEAL BEFORE US. 11. BEFORE US, THE LEARNED D.R. RELIED ON THE ORDER OF ASSESSING OFFICER AND FURTHER SUBMITTED THAT CIT(A) HAD ADMITTED ADDITION AL EVIDENCE IN CONTRAVENTION OF RULE 46A OF THE I.T. RULES. HE TH US SUPPORTED THE ORDER OF ASSESSING OFFICER. THE LD. A.R. ON THE OTHER SUB MITTED THE DETAILS OF INTRODUCTION OF CAPITAL WAS SUBMITTED BEFORE ASSESS ING OFFICER AND HAD ALSO FILED COPIES OF THE RETURNS OF INCOME AND FINA NCIAL STATEMENTS. HE THEREFORE SUBMITTED THAT SINCE THE ASSESSEE HAS FUL LY EXPLAINED THE ITA NO 2306/A/2010 . A.Y. 2007- 08 6 INTRODUCTION OF FUNDS BY THE PARTNERS, NO ADDITION COULD BE MADE IN THE HANDS OF THE FIRM. HE THUS SUPPORTED THE ORDER OF C IT(A). 12. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) WHILE DELETING THE ADDITION HAS GIVEN A FINDING THAT THE ASSESSEE HAD FURNISHED MORE THAN SUFFICIENT EVI DENCE TO EXPLAIN THE SOURCE OF FUNDS INTRODUCED BY THE PARTNERS AND HAD ALSO FURNISHED THE COPY OF PAN NUMBERS, CAPITAL ACCOUNT, BALANCE SHEET AND RETURNS OF INCOME. HE FURTHER NOTED THAT WHEN CASH IS INTRODU CED INTO PARTNERS FIRM AND IF THE PARTNERS ARE UNABLE TO EXPLAIN THE SOURC E OF FUNDS, IN THE ASSESSMENT PROCEEDINGS OF THE FIRM, NO ADDITION CAN BE MADE IN THE HANDS OF FIRM BUT THE ADDITION CAN BE MADE IN THE HANDS O F INDIVIDUAL PARTNER. 13. BEFORE US, THE LEARNED D.R. COULD NOT CONTROVERT TH E FINDINGS OF CIT(A) NOR COULD IT BRING ANY CONTRARY MATERIAL ON RECORD. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WIT H THE ORDER OF CIT(A). THUS THIS GROUND OF REVENUE IS DISMISSED . GROUND NO. 3 IS WITH RESPECT TO ADDITION OF RS. 1,12,80,134/- ON ACCOUNT OF NON FILING OF DETAILS OF TDS. 14. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESS EE WAS ASKED TO SUBMIT THE COPIES OF TDS RETURNS FOR LABOUR CHARGES OF RS. 1,12,80,134/- PAID BY IT. ACCORDING TO THE ASSESSING OFFICER, SIN CE THE ASSESSEE DID NOT FILE THE TDS RETURNS THE ENTIRE PAYMENT OF LABOUR C HARGES AMOUNTING TO RS. 1,12,80,134/- WAS DISALLOWED UNDER SECTION 40(A )(IA). AGGRIEVED BY ITA NO 2306/A/2010 . A.Y. 2007- 08 7 THE ORDER OF ASSESSING OFFICER, ASSESSEE CARRIED TH E MATTER BEFORE CIT(A), CIT(A) DELETED THE ADDITION BY HOLDING AS U NDER:- 12. I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER AS WELL AS THE SUBMISSION OF THE APPELLANT. I HAVE ALSO GONE THROUGH THE COPIES OF SUBMISSION MADE BY THE APPELLANT DURING ASSESSMENT PROCEEDINGS AND COPIES OF TDS CHALLANS AND FORMS SUBMITTED TO MY OFFICE DURING APPELLATE PROCEEDINGS . IT CAN BE CLEARLY MADE OUT FROM THE COPIES OF SUBMISSION MADE BY THE APPELLANT DURING ASSESSMENT PROCEEDINGS THAT COPIES OF TDS CHALLAN AND OTHER DE TAILS RELATED TO TDS WERE SUBMITTED TO THE FILE OF THE AO. I FAIL TO UNDERSTA ND WHY THE AO DID NOT TAKE THE SAME ON RECORD. THERE IS NO REASON TO DISBELIEVE TH E TDS CHALLAN AS PRODUCED BEFORE THE A.O. DURING ASSESSMENT PROCEEDINGS. THE AO MERELY OBSERVED, THAT COPIES OF TDS RETURN WERE NOT FILED BUT REMAINED SI LENT ABOUT THE FACT THAT TDS WAS DULY DEDUCTED AND RETURN OF TDS FILED BY THE AP PELLANT. RELEVANT PORTION OF SEC 40(A)(IA): IA) ANY INTEREST, COMMISSION OR BROKERAGE, FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SERVICES PAYABLE TO A RESIDENT, OR AM OUNTS PAYABLE TO A CONTRACTOR OR SUB-CONTRACTOR, BEING RESIDENT, FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK), ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII-B AND SUCH TAX HAS NOT BEEN DEDUCTED O R, AFTER DEDUCTION HAS NOT BEEN PAID DURING THE PREVIOUS YEAR, OR IN THE SUBSE QUENT YEAR BEFORE THE EXPIRY OF THE TIME PRESCRIBED UNDER SUB-SECTION (1) OF SECTIO N THUS AS PER THE ERSTWHILE SECTION DEDUCTION OF TDS AND TIMELY DEPOSIT OF THE SAME WITHIN THE PRESCRIBED TIME IS ESSENTIAL FOR THE PUR POSE OF SEC 40(A)(IA). THE A.R. FILED COPIES OF CHALLANS OF T.D.S. PAID AS WELL AS QUARTERLY STATEMENT OF DEDUCTION OF TAX UNDER SECTION 200(3) OF THE I.T. ACT IN THE PRESCRIBED FORM. IT IS SEEN FROM THESE DETAILS, TAX DEDUCTED AT SOURCE HAVE BEEN PAI D WITHIN THE PRESCRIBED TIME WHICH INCLUDES THE CLOSING BALANCE OF TDS PAYABLE OF RS.72,470/- WHICH WAS PAID ON 30 TH APRIL, 2007. IN NUT SHELL THE TAX DEDUCTED IN RESP ECT OF LABOUR PAYMENTS HAVE BEEN PAID WITHIN THE PRESCRIBED TIME UNDER THE ACT. THEREFORE, THERE IS NO CASE OF ANY DISALLOWANCE UNDER SECTION 40(A)(IA). THIS IS ALSO SUPPORTED FROM THE TAX AUDIT REPORT UNDER SECTION 4 4AB OF THE ACT WHEREIN AGAINST THE AMOUNTS INADMISSIBLE UNDER SECTION 40(A ), THE AUDITORS HAVE CERTIFIED NIL AMOUNT. THERE IS NO QUALIFICATION BY THE TAX AUDITORS IN RESPECT OF TDS DEDUCTED AND PAID UNDER SECTION 40(A) OF THE ACT. IN VIEW OF THIS FINDING OF THE FACT, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN DISALLOWING LABOUR PAYMENTS OF RS. 1,12,80,034/- ON THE GROUND THAT TDS RETURNS WERE N OT FILED. THE DISALLOWANCE, IS THEREFORE DELETED. 15. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE IS NO W IN APPEAL BEFORE US. BEFORE US, THE LD. D.R. SUPPORTED THE ORDER OF ASSESSING OFFICER AND FURTHER SUBMITTED THAT ASSESSEE, CIT(A) ADMITTED AD DITIONAL EVIDENCE IN CONTRAVENTION OF RULE 46A. HE THUS SUPPORTED THE O RDER OF CIT(A). THE ITA NO 2306/A/2010 . A.Y. 2007- 08 8 LD. A.R. ON THE OTHER HAND SUBMITTED THAT THE ENTIR E DETAILS OF TDS PAYMENT WERE SUBMITTED BEFORE A.O. HE FURTHER SUBMI TTED THAT THE ASSESSEE HAS DEPOSITED THE TDS WHEREVER APPLICABLE. HE THUS SUPPORTED THE ORDER OF CIT(A). 16. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) WHILE DELETING THE ADDITION HAS NOTED THAT THE ASSESSEE HAS FILED THE DETAILS BEFORE A.O. HE HAS F URTHER GIVEN A FINDING THAT THE TDS WAS DEPOSITED WITH THE PRESCRIBED TIME AND THUS THERE WAS NO CASE OF DISALLOWANCE UNDER 40(A)(IA). BEFORE US, THE LEARNED D.R. COULD NOT CONTROVERT THE FINDINGS OF CIT(A) NOR COU LD BRING ANY CONTRARY MATERIAL ON RECORD. IN VIEW OF THE AFORESAID FACTS , WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. . GROUND NO. 4 IS WITH RESPECT TO REDUCING THE DISALL OWANCE OF RS. 2,05,936/-. 17. A.O. NOTICED THAT ASSESSEE HAS INCURRED VARIOUS EXP ENSES IN CASH. ACCORDING TO THE ASSESSING OFFICER, SINCE THE ASSES SEE COULD NOT PRODUCE THE VOUCHERS, HE MADE AN AD-HOC DISALLOWANCE OF 25% OF RS. 3,43,228/- AND ADDED TO THE INCOME. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, ASSESSEE CARRIED THE MATTER BEFORE CIT(A), CIT(A) G RANTED PARTIAL RELIEF TO THE ASSESSEE BY HOLDING AS UNDER:- 15. I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER AS WELL AS THE SUBMISSION OF THE APPELLANT. I HAVE ALSO GONE THROUGH THE COPIES OF SUBMISSION MADE BY THE APPELLANT DURING ASSESSMENT PROCEEDINGS. IT CAN BE INFERRED THAT THE APPELLANT WAS UNABLE TO PRODUCE FULL SET OF VOUCHERS FOR THE EXPE NDITURE DURING ASSESSMENT ITA NO 2306/A/2010 . A.Y. 2007- 08 9 PROCEEDINGS. THEREFORE THE AO WAS RIGHT IN DISALLOW ING A PART SUCH EXPENDITURE. BUT 25 % DISALLOWANCE FOR SUCH EXPENDITURE IS ACCORDING TO ME ON THE HIGHER SIDE. HENCE I RESTRICT THE DISALLOWANCE TO 10 % OF SUCH EXPENDI TURE. THUS THE APPELLANT GET A RELIEF OF RS.2,81,706 . 18. BEFORE US, THE LD. D.R. SUPPORTED THE ORDER OF ASSE SSING OFFICER. ON THE OTHER HAND THE LD. A.R. SUPPORTED THE ORDER OF CIT( A). 19. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CONSIDERING THE FACTS OF THE MATTER, C IT(A) HAD RESTRICTED THE DISALLOWANCE FROM 25% TO 10% OF THE EXPENDITURE. W E ARE OF THE VIEW THAT CONSIDERING THE FACTUAL ASPECT NO INTERFERENCE IS CALLED FOR THE ORDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED . 20. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON 04 -10 - 2013. SD/- SD/- (D.K. TYAGI) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITA T,AHMEDABAD