ACIT, Nashik V. M/S KARAN AGENCIES, Nashik

ITA 238/PUN/2008

• Counselvise Citation: 23824514 RSA 2008
• Duration Of Justice: 3 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-05-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 07-02-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P R MORE
• Keywords: Bad and doubtful debts
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI I C SUDHIR, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO 238/PN/08 (ASSTT. YEAR : 2004-05) ASSTT. COMMISSIONER OF INCOME-TAX, .. APPELLANT CIR. 1, NASHIK VS. M/S KARAN AGENCIES, .. RESPONDENT NEAR GOVERNMENT BLIND SCHOOL, NASHIK POONA ROAD, NASHIK PAN AADIK 2995B APPELLANT BY : SHRI P. R. MORE RESPONDENT BY : SHRI SUNIL GANOO ORDER PER G.S.PANNU, AM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE OR DER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, NASHIK DATED 30 .11.2007 WHICH, IN TURN, HAS ARISEN FROM THE ORDER DATED 27.12.2006 PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 196 1 (IN SHORT THE ACT) FOR THE ASSESSMENT YEAR 2004-05. 2. THE ONLY CONTROVERSY INVOLVED IN THIS APPEAL REVOLV ES AROUND DISALLOWANCE OF RS 41,30,100/- PAID BY THE ASSESSEE AS COMMISSION TO M/ S DEEJAY DISTILLERIES. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE FIRM IS ENGAGE D IN MANUFACTURE OF COUNTRY LIQUOR AND MARKETING OF LIQUOR AND SPIRIT. DUR ING THE YEAR UNDER CONSIDERATION, ASSESSEE CLAIMED SALES COMMISSION TO THE FOLLO WING THREE PARTIES: (I) M/S DEEJAY DISTILLERIES FOR MARKETING OF PRODUCTS O F KOLHAPUR SUGAR MILLS LTD. (DISTILLERY DIVISION) (KSML); (II) MASTER BLENDERS P. LTD FOR MARKETING OF COUNTRY LIQUOR PRODUCTS OF KSML; 2 (III) KARAN DISTILLERIES P LTD FOR MARKETING BRIHAN MAHARASHTRA SUGAR SYNDICATE LTD. (BMSSL). THE ASSESSING OFFICER CALLED FOR DETAILS OF THE COMMISSION CLAIMED IN RESPECT OF THE ABOVE THREE PARTIES AND RECORDED STATEMENTS FROM TH E SAID PARTIES. AFTER EXAMINING THE VARIOUS DETAILS AND OTHER FACTS, THE ASSESSIN G OFFICER ALLOWED THE COMMISSION PAYMENTS IN RESPECT OF THE PARTIES MENTIONED A T (II) AND (III) ABOVE. HOWEVER, THE ASSESSING OFFICER DISALLOWED THE COMMISSION P AYMENT MADE TO M/S DEEJAY DISTILLERIES FOR THE FOLLOWING REASONS: I) THE COMPANIES OF BMSSL AND KSML ARE HAVING BUSINESS R ELATIONS WITH THE ASSESSEE; II) THE SAID COMPANIES ARE ALREADY KNOWN TO THE ASSESSEE AND THERE IS NO JUSTIFICATION FOR THE PAYMENT OF COMMISSION ON SA LES MADE TO BMSSL AND KSML; III) THERE WERE NO SERVICES RENDERED BY M/S DEEJAY DIST ILLERIES. 3. BEING AGGRIEVED, ASSESSEE TOOK UP THE MATTER IN APPEA L BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS). BEFORE THE COMMI SSIONER OF INCOME-TAX (APPEALS), ASSESSEE FURNISHED A COPY OF THE APPOINTMENT LETTER ISSUED TO M/S DEEJAY DISTILLERIES FOR MARKETING THE PRODUCTS OF KSML. AS PER THE SAID APPOINTMENT LETTER, M/S DEEJAY DISTILLERIES WERE RESPON SIBLE FOR MARKETING THE PRODUCTS OF KSML W.E.F. 01.04.2003 AND ALSO RESPONSIBLE FOR THE RECOVERY OF THE AMOUNTS AND WAS TO BOOK ORDERS AND BEAR ALL THE EXPENS ES IN RELATION TO THE MARKETING OF THE PRODUCTS FOR WHICH M/S DEEJAY DISTILLERI ES WAS ENTITLED TO A COMMISSION OF RS 0.90 PAISE PER LITRE AS SALES COMMISSION FOR THE MARKETING. BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS), IT WA S CONTENDED THAT THE ASSESSEE WAS BASICALLY A MANUFACTURER AND DEALING IN JOB-WO RK OF PRODUCTION AND THAT IT DID NOT HAVE ANY MARKETING OR SALES PERSONNEL OF ITS OWN AS ASSESSEE WAS ONLY MANUFACTURING LIQUOR. THEREFORE, IT WAS ARGUED T HAT THERE WAS A NEED FOR APPOINTMENT OF SELLING AGENTS AND THEIR SERVICES FOR MA RKETING. IT WAS FURTHER SUBMITTED THAT M/S DEEJAY DISTILLERIES WAS HAVING LONG R ELATIONSHIP IN THIS TRADE AND WAS ALSO HAVING GOOD RELATIONSHIP WITH THE CUSTOMERS. IT WAS STRONGLY 3 CONTENDED THAT THE COMMISSION WAS GENUINELY PAID TO M/S DEEJAY DISTILLERIES AND THE ASSESSING OFFICER HAD VERIFIED THIS BY RECORDING THE STATEMENT AND, THUS THE IDENTITY OF THE RECIPIENT AND GENUINENESS OF THE PAYME NT WAS PROVED BEYOND DOUBT. THE COMMISSION WAS PAID AS BUSINESS EXIGENCY AND THE BUSINESS EXPEDIENCY IS TO BE JUDGED FROM THE POINT OF VIEW OF THE BUSINESSMAN AND NOT FROM THE POINT OF VIEW OF ASSESSING OFFICER. SINCE THE ASSE SSEE WAS NOT EXPERIENCED IN MARKETING, IT WAS ARGUED THAT IT WAS DIF FICULT TO PENETRATE INTO THE NEW MARKET AND HENCE, M/S DEEJAY DISTILLERIES WAS APPOINT ED. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE CAREFUL LY, THE COMMISSIONER OF INCOME-TAX (APPEALS) DELETED THE ADDIT ION MADE BY THE ASSESSING OFFICER BY HOLDING AS UNDER: I HAVE GONE THROUGH THE DETAILED SUBMISSIONS OF THE APPELLANT AND ALSO THE REASONS GIVEN BY THE AO. THE AO DISALLOWED THE PAYM ENT OF COMMISSION TO M/S DEEJAY DISTILLERIES ON THE PRESUMPTION THAT APPELLANT WAS HAVING A BUSINESS RELATIONSHIP WITH BMSSL AND KSML AND THERE WAS NO NECESSITY FOR PAYME NT OF COMMISSION. THE AO EXAMINED M/S DEEJAY DISTILLERIES AND RECORDED THE S TATEMENT AND WAS SATISFIED WITH THE GENUINENESS OF THE PAYMENTS MADE BUT ONLY RAISED TH E DOUBTS ABOUT THE SERVICES RENDERED BY THEM. NO MATERIAL WAS GATHERED TO PROVE THE FACT THAT M/S DEEJAY DISTILLERIES DID NOT RENDER ANY SERVICES. UNDER SIMILAR CIRCUMST ANCES, THE AO ALLOWED THE PAYMENT OF COMMISSION TO THE OTHER TWO PARTIES. IT IS NOT CLEA R WHY THE AO DISALLOWED THE PAYMENTS MADE TO M/S DEEJAY DISTILLERIES BASED ON PRESUMPTIO N. IF THE AO HAD ANY DOUBT, HE SHOULD HAVE GOT IT CLARIFIED OR MADE FURTHER ENQUIR IES WITH M/S DEEJAY DISTILLERIES WHEN HE ENQUIRED INTO THE ISSUE AND RECORDED THE STATEMENT. AS PER THE MATERIAL AVAILABLE ON RECORD, THERE IS NO EVIDENCE TO PROVE THAT NO SERVI CES WERE RENDERED BY M/S DEEJAY DISTILLERIES. ON THE OTHER HAND, THE AUTHORIZED REP RESENTATIVE OF THE APPELLANT WAS ABLE TO JUSTIFY THE NECESSITY FOR PAYMENT OF THE COMMISSION . IN VIEW OF THIS, THE AO IS NOT JUSTIFIED IN DISALL OWING THE COMMISSION PAYMENTS TO M/S DEEJAY DISTILLERIES. HENCE, THE ADDITION MADE B Y THE AO IS DELETED. NOT BEING SATISFIED WITH THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), THE REVENUE IS IN APPEAL BEFORE US. 5. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATIV E APPEARING FOR THE REVENUE HAS VEHEMENTLY ARGUED THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN DELETING THE ADDITION IN THE FACTS AND CIRCUMST ANCES OF THE CASE. IT WAS POINTED OUT THAT THE COMMISSIONER OF INCOME-TAX (APPE ALS) DISTILLERIES ERRED IN NOT APPRECIATING THE FACT THAT THE COMMISSION HAS BEEN P AID ON SALES EFFECTED TO SUCH PARTIES WITH WHOM ASSESSEE HAS STRONG AND CLOSE BUSINESS RELATIONSHIP TO THE EXTENT THAT ASSESSEE WAS MANAGING THE LIQUOR DIVISIO N OF SUCH PARTIES ON JOB WORK BASIS. THEREFORE, THE PAYMENT OF COMMISSION TO A TH IRD PARTY WAS NOT 4 JUSTIFIED AND THAT THERE WAS NO EVIDENCE OF SERVICES REND ERED BY THE AGENT RATIFYING THE PAYMENT OF COMMISSION. IN THIS CONNECTION, RELIANCE HAS BEEN PLACED ON THE FOLLOWING DECISIONS: (I) GOODLAS NEROLAC PAINTS LTD. V. CIT 137 ITR 58 (BOM ); (II) DCIT V. MCDOWELL & CO. LTD. 291 ITR 107 (KER) 6. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE R ESPONDENT-ASSESSEE HAS STRONGLY DEFENDED THE ORDER OF THE COMMISSIONER OF IN COME-TAX (APPEALS) BY POINTING OUT THAT ONLY PART OF THE PAYMENT MADE TO M/S DEEJAY DISTILLERIES HAS BEEN DISALLOWED AND THERE WAS NO EVIDENCE TO SUGGEST TH AT FOR SUCH PAYMENT THERE WAS ANY ADVERSE EVIDENCE. IT WAS POINTED OUT THAT THE ASSESSEE WAS EARNING JOB CHARGES BY CARRYING OUT PRODUCTION IN RESPECT OF THE DISTILLERY AND COUNTRY LIQUOR DIVISIONS OF KOLHAPUR SUGAR MILLS LTD. , (KSML) AND BRIHAN MAHARASHTRA SUGAR SYNDICATE LTD. (BMSSL). IT WAS POINT ED OUT THAT DURING THE YEAR UNDER CONSIDERATION ASSESSEE ALSO STARTED MANUFACTURIN G DE-NATURED SPIRIT AND THE IMPUGNED DISALLOWANCE RELATED TO THE COMMISSION PAID FOR THE SALE OF SPIRITS. THE ASSESSEE DID NOT EMPLOY ANY MARKETING OR SAL ES PERSONNEL AND IN THIS REGARD IT WAS DEPENDENT ON THE AGENTS FOR EFFECTI NG SALES FOR WHICH COMMISSION PAYMENTS WERE MADE. IT WAS POINTED OUT THAT THE COMMISSION PAYMENT TO M/S DEEJAY DISTILLERIES ON SALES MADE TO THE TWO COMPANIES WAS ALSO JUSTIFIED BECAUSE THE TWO CONCERNS WERE MULTI-DIVISIONAL CO MPANIES AND THE SERVICES OF SALES AND MARKETING PERSONNEL TO EFFECT SALES W ERE REQUIRED. IT WAS SUBMITTED THAT THERE WAS NO JUSTIFICATION TO SAY THAT T HE SERVICES HAVE NOT BEEN RENDERED BY THE AGENT BECAUSE THE PARTNER OF M/S DEE JAY DISTILLERIES WAS EXAMINED BY THE ASSESSING OFFICER AND THE SAID PARTNER CONFIRMED THE RECEIPT OF COMMISSION FOR SERVICES RENDERED TO ASSESSEE AND EVEN IN THE STATEMENT THE ASSESSING OFFICER DID NOT PUT ANY QUESTION AS TO NON-REND ERING OF SERVICES BY THE SAID CONCERN. IN THE COURSE OF HIS SUBMISSIONS, THE COUNSEL FOR THE ASSESSEE HAS RELIED UPON THE FOLLOWING DECISIONS: 5 (I) DRESSER VALVE INDIA (P) LTD V. ACIT 30 SOT 495 (M UM); (II) LAXMI ENGINEERING INDUSTRIES V ITO 298 ITR 203 ( RAJ.); AND, (III) ACIT V. SHRI N.R. PRASAD IN ITA NO 3339/MUM/0 9 DAD 20.08.2010. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. TH E SUM AND SUBSTANCE OF THE DISPUTE RELATES TO THE EXPENDITURE CLAIM ED BY THE ASSESSEE ON ACCOUNT OF COMMISSION PAID TO M/S DEEJAY DISTILLERIES FOR E FFECTING SALES OF SPIRIT. IN THIS CONNECTION, IT MAY BE NOTICED THAT THE ASSESSEE HA S EARNED JOB WORK CHARGES FOR CARRYING OUT PRODUCTION FOR THE DISTILLERY A ND COUNTRY LIQUOR DIVISION OF KSML AND ALSO FOR THE LIQUOR PRODUCTION OF BMSSL. IN ORDER TO EFFECT SALES, ASSESSEE PAID COMMISSION OF RS 2,34,69,740/-, PRIMARILY TO THREE PARTIES, NAMELY, M/S DEEJAY DISTILLERIES, M/S KARAN DISTILLERIES P . LTD. AND M/S MASTER BLENDERS P. LTD. THE ASSESSING OFFICER HAD REQUIRED THE ASSESSEE TO JUSTIFY THE CLAIM OF COMMISSION PAID TO SUCH PARTIES. AFTER EXAMININ G THE REPLIES, THE ASSESSING OFFICER HAD MADE A PART DISALLOWANCE OF RS 41,3 0,100/- OUT OF TOTAL COMMISSION PAID OF RS 1,19,72,060/- TO M/S DEEJAY DISTIL LERIES. THIS DISALLOWANCE IS PRIMARILY IN RELATION TO THE COMMISSION PAID ON SALES HAVING BEEN EFFECTED TO BMSSL AND KSML. 8. THE FIRST OBJECTION RAISED IS TO THE EFFECT THAT THE RE IS NO JUSTIFICATION FOR PAYMENT OF COMMISSION ON SALES TO BMSSL AND KSML. BECAUSE THE ASSESSEE ALREADY HAS A BUSINESS RELATIONSHIP WITH THE TWO COMPAN IES. NO DOUBT, ASSESSEE WAS MANAGING THE LIQUOR DIVISION OF THE TWO COMPANIES O N JOB CHARGE BASIS. IN THE CONTEXT OF SUCH OBJECTION, IT WOULD BE PERTINENT TO KEEP IN MIND THE MANNER IN WHICH THE JOB WORK BUSINESS IS BEING CARRIED OUT BY THE ASSE SSEE. BEFORE THE LOWER AUTHORITIES, ASSESSEE HAD EXPLAINED THAT IT WAS NOT EMPLOYING ANY SALES OR MARKETING PERSONNEL TO EFFECT THE SALES OF THE PRODUCTS MA NUFACTURED BY IT UNDER JOB WORK. FOR THE PURPOSES OF EFFECTING SALES, THEREFORE, ASSESSEE HAD EMPLOYED THE SERVICES OF OTHER PARTIES TO WHICH IT WAS PAYING COMM ISSION ON THE BASIS OF SALES EFFECTED BY THEM ON BEHALF OF THE ASSESSEE. A TOTAL COMMISSION EXPENDITURE OF RS 2,34,69,740/- HAS BEEN CLAIMED OUT O F WHICH ONLY AN AMOUNT OF RS 41,30,100/- HAS BEEN DISALLOWED. QUITE CLEARLY THE DEPENDENCE OF THE 6 ASSESSEE ON THE OTHER PARTIES TO CARRY OUT SALES AND MARKET ING ACTIVITY FOR THE PRODUCTS MANUFACTURED BY IT, STANDS ESTABLISHED. NOW, IN SO FAR AS THE PAYMENT OF COMMISSION TO M/S DEEJAY DISTILLERIES IS CONCERNED, THE SAME IS CLAIMED TO HAVE BEEN PAID FOR SALES OF SPIRIT EFFECTED BY THE SAID CONCERN. HEREIN ALSO, ONLY THE COMMISSION PAID ON SALES OF SPIRIT TO M/S BMSSL AND K SML HAS BEEN DISALLOWED. PER SE, IT STANDS TO REASON THAT THE ASSESSING OFFICER DOES NOT DOUBT M/S DEEJAY DISTILLERIES HAVE RENDERED SERVICES TO THE ASSESS EE. HIS ONLY OBJECTION IS THAT IN SO FAR AS THE SALES TO BMSSL AND KSM L IS CONCERNED, IT DOES NOT REQUIRE ANY PAYMENT OF COMMISSION, BECAUSE THE ASSESSE E HAS A BUSINESS RELATIONSHIP WITH THEM. IN THIS REGARD, WE HAVE PERUSE D THE SOLE SELLING AGENCY AGREEMENT DATED 1.4.2003 EXECUTED BY THE ASSESSEE WITH M /S DEEJAY DISTILLERIES, COPIES OF WHICH HAS BEEN PLACED IN THE PAPER BOOK AT PAGES 35 TO 38. IN TERMS OF THE SAID ARRANGEMENT, THE SAID CONCERN HAS B EEN APPOINTED TO CARRY OUT SALES ON BEHALF OF THE ASSESSEE. THE SAID CONCERNS OBLI GATIONS INCLUDE BOOKING OF ORDERS, TAKING RESPONSIBILITY FOR RECOVERY OF SALE PROCEEDS AND ALSO TO INCUR ENTIRE EXPENSES FOR MARKETING OF PRODUCTS. THE AGR EEMENT ALSO ENVISAGES THAT IN CASE OF NON-RECOVERIES OR BAD DEBTS, THE SAME W OULD BE ON ACCOUNT OF THE SAID COMMISSION AGENT. IN OUR VIEW, EVEN WHERE THE ASSESSE E IS SAID TO HAVE A BUSINESS RELATIONSHIP IN THE CASES OF BMSSL AND KSML EV EN THEN, THE SALES/MARKETING ESTABLISHMENT IS NECESSARY TO EFFECT SALES. I N THE ABSENCE OF ANY SALES MARKETING PERSONNEL EMPLOYED BY THE ASSESSEE, THE SAID ACTIVITIES HAVE BEEN CARRIED OUT THROUGH THE COMMISSION AGENT M/S DEEJAY DISTILLERIES WITH REGARD TO THE QUESTIONED SALES. IN THE ABSENCE OF ANY DISPUTE TO THE FACT THAT THE ASSESSEE DID NOT MAINTAIN ANY ESTABLISHMENT FOR SALES AND M ARKETING AND THE FACT THAT RENDERING OF SUCH SERVICES IN RELATION TO THE O THER SALES EFFECTED HAS BEEN ACCEPTED BY THE ASSESSING OFFICER, THERE CAN BE LITT LE SUPPORT TO THE REVENUES ASSERTION THAT THE SALES TO BMSSL AND KSML HA VE BEEN EFFECTED WITHOUT THE AID OF ANY MARKETING/SALES ACTIVITY. THEREF ORE, HAVING REGARD TO THE PECULIAR FACTS OF THE PRESENT CASE, THE ASSERTION OF THE ASSESSING OFFICER THAT 7 THERE IS NO JUSTIFICATION FOR PAYMENT OF COMMISSION TO M/ S DEEJAY DISTILLERIES ON SALES EFFECTED TO BMSSL AND KSML CANNOT BE JUSTIFIED. I N SO FAR AS THE SECOND OBJECTION OF THE ASSESSING OFFICER IS CONCERNED, NAMELY, T HAT THERE IS NO EVIDENCE OF RENDERING OF SERVICES BY M/S DEEJAY DISTILLER IES, ON THIS ASPECT ALSO, WE FIND THAT THE ASSESSING OFFICER HAS ASSERTED SO WITHOUT ANY BASIS AND ON MERE SURMISES. IN FACT, THE PARTNER OF M/S DEEJAY DISTILL ERIES WHO IS ALSO A PARTNER IN ASSESSEE FIRM WAS EXAMINED ON OATH DURING ASSESSMENT PROC EEDINGS, A COPY OF WHICH HAS BEEN PLACED IN THE PAPER BOOK AT PAGES 65 T O 66. IN THIS STATEMENT, VARIOUS QUESTIONS HAVE BEEN PUT TO SHRI PRADEEP DHUNICH AND KALANI, PARTNER OF M/S DEEJAY DISTILLERIES REGARDING THE COMMISSION PAYMENT S. QUITE STRANGELY, IF THE ASSESSING OFFICER HAD ENTERTAINED ANY DOUBT WITH RE GARD TO THE NATURE AND ACTUAL RENDERING OF SERVICES BY THE SAID CONCERN, THE RE LEVANT ENQUIRY FROM THE SAID PERSON IS QUITE CONSPICUOUS BY ITS ABSENCE. NO QUESTION H AS BEEN SOUGHT TO BE PUT TO THE SAID PERSON AS TO AUTHENTICATE THE SERVICE S RENDERED WITH REGARD TO THE SALES IN QUESTION. UNDER ALL THESE CIRCUMSTANCES, CONSI DERING THE MATERIAL ON RECORD AND ALSO THE FACTUM OF THE ASSESSEE HAVING ESTABLISHE D THE NECESSITY OF CARRYING OUT SALES/MARKETING ACTIVITY THROUGH OTHER CONCE RNS, THE ASSESSING OFFICER WAS NOT JUSTIFIED TO SELECTIVELY DISALLOW A PORT ION OF THE EXPENDITURE AND THAT TOO, WITHOUT ANY CLINCHING EVIDENCE TO SHOW THAT NO SERVICES WERE RENDERED WITH REGARD TO THE IMPUGNED PAYMENT. AT THIS POINT, WE ARE QUITE CONSCIOUS OF THE FACT THAT PRIMARILY THE ONUS IS ON THE ASSESSEE TO PROVE THE JUSTIFICATION OF AN EXPENDITURE SO HOWEVER, IN THE PRESENT CASE, SINCE A PART OF THE EXPENDITURE HAS BEEN ALLOWED BY RELYING ON CERTAIN MATERIAL, WHICH HA S BEEN ACCEPTED BY THE ASSESSING OFFICER AS SUFFICIENT EVIDENCE FOR RENDERING OF SE RVICES BY THE AGENTS, THEN SIMILAR MATERIAL, IN RELATION TO BALANCE OF EXP ENDITURE QUALIFIES THE ASSESSEE OF HAVING DISCHARGED ITS ONUS OF JUSTIFYING THE EXPENDIT URE, ESPECIALLY IN THE CONTEXT THAT THE VERIFICATION EXERCISE CARRIED OUT BY TH E ASSESSING OFFICER HAS NOT YIELDED ANY ADVERSE EVIDENCE. UNDER THESE CIRCUMSTANCES, WE HOLD THAT QUA THE 8 IMPUGNED PAYMENT THE ASSESSING OFFICER WAS NOT JUSTIFIED I N REJECTING THE CLAIM OF THE ASSESSEE AND THE SAME HAS BEEN REJECTED ON MERE SU RMISES. 9. IN VIEW OF THE ABOVE DISCUSSION, WE HEREBY AFFIRM TH E CONCLUSION DRAWN BY THE COMMISSIONER OF INCOME-TAX (APPEALS) TO DELETE THE IMPUGNED DISALLOWANCE. ACCORDINGLY, THE APPEAL OF THE REVENUE IS DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMI SSED. DECISION PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF JULY, 2011. SD/- SD/- (I.C. SUDHIR) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER PUNE: DATED: 22 ND JULY, 2011 B COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEE 2. THE ACIT CIR. 1, NASHIK 3. THE CIT(A)-II, NASHIK 4. THE CIT-I NASHIK 5. THE D.R, A BENCH, PUNE 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE