Rajdhani Systems & Estates Pvt. Ltd., Bhubaneswar V. ACIT, Circle-2(2), Bhubaneswar

ITA 248/CTK/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4358 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-02-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 04-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Keywords: Onus to prove
• Section: 40A(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PAV AN KUMAR GADALE, JM ./ ITA NO. 2 48 / CTK /20 1 6 ( / ASSESSMENT YEAR : 20 12 - 2013 ) RAJDHANI SYSTEMS &EST ATES (P) LTD., PLOT NO. A - 103 , SAHID NAGAR, BHUBANESWAR VS. ACIT, CIRCLE - 2(2), BHUBANESWAR - 751007 ./ PAN NO. : AA BCR 8271 L ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : NONE /REVE NUE BY : SHRI D.K.PRADHAN , CITDR / DATE OF HEARING : 14 / 0 2 /201 8 / DATE OF PRONOUNCEMENT 15 / 0 2 /201 8 / O R D E R PER SHRI N.S.SAINI , A M : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CI T(A) - 1 , BHUBANESWAR DATED 28.03.2016 FOR THE ASSESSMENT YEAR 20 12 - 2013 . 2 . IN G ROUND NO. 1 OF THE APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING DISALLOWANCE OF LAND PURCHASE AND LAND DEVELOPMENT EXPENSES AMOUNTING TO RS.44,57 ,508/ - U/S.40A(3) OF THE ACT AS THE SAID PAYMENTS WERE OUT OF BUSINESS NECESSITY AND THE PAYEE ARE LAND OWNERS NOT KNOWN TO THE ASSESSEE. 3 . BRIEF FACTS OF THE CASE ARE THAT THE AO FOUND THAT THE ASSESSEE HAD DEBITED AN AMOUNT OF RS.44,57,508/ - IN RESPECT OF LAND PURCHASE AND LAND DEVELOPMENT EXPENSES. THE ASSESSEE WAS REQUIRED TO PRODUCE FULL DETAILS OF SUCH EXPENSES. FROM THE DETAILS FURNISHED, THE AO NOTICED THAT THE RAJDHANI SYSTEMS & ESTATES (P) LTD. 2 ASSESSEE HAD PAID IN EXCESS OF THE DEED VALUE OF LAND AND CLAIMED THE SAME AS LAND DEVE LOPMENT EXPENSES. THE DETAILS OF SUCH EXPENSES CLAIMED AS FURNISHED BY THE ASSESSEE WERE AS UNDER : - LAND PURCHASE NAME OF THE SELLER DATE AMOUNT (RS.) TUNAMANI SAHOO 31.5.2011 16,38,000/ - JANVASWAR DAS 14.7.2011 8,67,000/ - GIRIDHARI JENA 8.7.2011 1,02 ,900/ - JAJ KISHORE PRADHAN 31.1.2012 15,00,000/ - TOTAL 41,07,900/ - LAND DEVELOPMENT NAME OF THE SELLER DATE AMOUNT (RS.) BHAGYA NAGAR PROJECT 22.4.2011 50,000/ - - DO - 19.9.2011 40,000/ - PUSPANJALI PROJECT 5.9.2011 30,000/ - - DO - 4.2.2011 30,000/ - BRUNDABAN FIRM HOUSE 12.7.2011 50,000/ - - DO - 19.8.2011 50,000/ - EXPENSES IN KALYAN VIHAR HOUSING 5.7.2011 70,478/ - REPAIR & MAINTENANCE 13.4.2011 29,040/ - TOTAL 3,49,518/ - 4 . THE AO OBSERVED THAT ANY AMOUNT PAID IN EXCESS OF REGISTRATION VALUE COULD NOT BE ALLOWED AS A LEGITIMATE EXPENDITURE AS IT CONTRAVENED THE LAW RELATING TO LAND REGISTRATION. SINCE ALL THE ABOVE AMOUNTS WERE PAID IN CASH IN VIOLATION OF PROVISIONS OF SECTION 40A(3) OF THE ACT, HE DISALLOWED THESE PAYMENTS MADE UNDER THE NOMENCL ATURE OF LAND PURCHASE AND LAND DEVELOPMENT EXPENSES. 5 . ON APPEAL, THE CIT(A) CONFIRMED THE DISALLOWANCE OF LAND DEVELOPMENT EXPENSES OF RS.44,57,508/ - BY OBSERVING AS UNDER : - 2.2 I HAVE GIVEN CAREFUL CONSIDERATION TO THE FACTS OF THE CASE. THE FACT REM AINS THAT THE AMOUNTS WERE PAID IN CASH. SECTION 40A(3) LAYS DOWN THAT ANY AMOUNT OF EXPENDITURE IN RESPECT OF WHICH A PAYMENT OR AGGREGATE OF PAYMENTS MADE TO A PERSON IN A DAY, RAJDHANI SYSTEMS & ESTATES (P) LTD. 3 OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE DRAWN ON A - BANK OR ACCOUNT PAYEE B ANK DRAFT, EXCEEDS RS.20,000/ - , NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF SUCH EXPENDITURE. THE FIRST PROVISO TO SUB - SECTION (3A) OF SECTION 40A, HOWEVER, REFERS TO CERTAIN CASES AND CIRCUMSTANCES STIPULATED IN RULE 6DD IN WHICH EVEN IF PAYMENTS ARE MADE OTHERWISE THAN THE MODES SPECIFIED IN SECTION 40A(3), NO DISALLOWANCE COULD BE MADE UNDER THAT SECTION. THE ARGUMENT OF THE ASSESSEE IS THAT THE PAYMENTS FOR LAND PURCHASE WERE MADE IN CASH BECAUSE THE VILLAGERS FROM WHOM THE LAND WAS PURCHASED WERE UNKNO WN TO THE ASSESSEE AND THEY DEMANDED CASH PAYMENTS. IT IS ALSO ARGUED THAT THE PAYMENTS WERE MADE TO THE RESIDENTS OF VILLAGES NOT SERVED BY BANKING FACILITIES. IT IS ALSO CONTENDED THAT PAYMENTS OF RS.3,49,518/ - WERE MADE TO VILLAGERS NEARBY THE PROJECT S ITES IN CASH SINCE THE PERSONS BY WHOM WORKS WERE CARRIED OUT FOR LAND DEVELOPMENT DEMANDED PAYMENT IN CASH BEING ILLITERATE. IT IS CLEAR FROM THE SUBMISSION OF THE ASSESSEE THAT NONE OF THE EXTENUATING CIRCUMSTANCES AS SPECIFIED IN RULE 6DD EXISTED TO ATT RACT THE FIRST PROVISO TO SECTION 40A(3A). MOREOVER, NO EVIDENCE HAS BEEN BROUGHT ON RECORD TO SHOW THAT THE PLACES WHERE THE PAYEES STAY WERE NOT HAVING ANY BANKING FACILITY AT THE RELEVANT POINT OF TIME. RATHER, PLACES LIKE BATAGAON, SAREIKONA AND KANTIL O ARE FOUND TO HAVE BRANCHES OF SEVERAL NATIONALIZED BANKS. IN THE CIRCUMSTANCES, THEREFORE, THE DISALLOWANCE OF RS.44,57,508/ - U/S.40A(3) AS HAS BEEN MADE IN THE ASSESSMENT IS HELD TO HAVE BEEN RIGHTLY MADE AND IS CONFIRMED. 6 . THE AR OF THE ASSESSEE HA S FILED ADJOURNMENT PETITION. SINCE THE REASON FOR SEEKING ADJOURNMENT WAS NOT FOUND PLAUSIBLE ONE, THE ADJOURNMENT PETITION FILED BY THE ASSESSEE IS REJECTED AND THE APPEAL WAS HEARD EX - PARTE QUA THE ASSESSEE. 7 . THE DR SUBMITTED THAT THE ISSUE WAS COVE RED BY THE DECISION OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF ASSESSEE ITSELF FOR THE ASSESSMENT RAJDHANI SYSTEMS & ESTATES (P) LTD. 4 YEAR 2007 - 08 & 2008 - 09 IN ITA NOS.253&254/CTK/2012, ORDER DATED 21.09.2017, WHERE THE TRIBUNAL RESTORED THE MATTER BACK TO THE FILE OF AO. HE SUBMITTED THAT FOLLOWING THE SAME, MATTER SHOULD BE RESTORED BACK TO THE FILE OF AO. 8 . WE FIND THAT THE TRIBUNAL IN THE ORDER PASSED IN THE ASSESSMENT YEAR 2007 - 08 & 2008 - 09 IN ASSESSEES OWN CASE, QUOTED ABOVE, HAS HELD AS UNDER : - 12. WE FIND THAT WHILE DECIDING TH E SIMILAR ISSUE IN ONE OF THE GROUP CASES IN CASE OF HI - TECH ESTATES & PROMOTERS PVT. LTD., IN IT(SS)A NO.03 TO 09/CTK/2017 FOR THE ASSESSMENT YEARS 2000 - 01 TO 2006 - 07, WHEREIN THE TRIBUNAL VIDE ITS ORDER DATED 31.08.2017 REMITTED THE MATTER BACK TO THE FI LE OF AO WITH THE FOLLOWING OBSERVATIONS : - 51. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS MADE EXCESS CASH PAYM ENT TO THE SELLERS OF LAND AS PREMIUM AMOUNT WHICH HAS BEEN DEBITED UNDER THE HEAD LAND DEVELOPMENT CHARGES. ACCORDING TO THE ASSESSING OFFICER, EXCESS CASH PAYMENTS MADE TO LAND SELLERS IN THE SHAPE OF PREMIUM AMOUNT CANNOT BE HELD TO BE IN THE NATURE OF DEVELOPMENT EXPENSES AND, THEREFORE, DISALLOWED DEDUCTION FOR THE SAME U/S.37 OF THE ACT. 52. BEFORE THE CIT(A), THE ASSESSEE CONTENDED THAT THE EXTRA PAYMENT MADE TO THE SELLERS OF THE LAND IN EXCESS OF THE BENCH MARK PRICE FIXED BY STATE GOVERNMENT FO R COLLECTING STAMP DUTY WAS AKIN TO PREMIUMS PAID TO SELLERS OF LAND FOR PURCHASING THEIR LAND AT THE PREVAILING MARKET PRICE IN SUCH BUSINESS. IT WAS SUBMITTED THAT THE ASSESSEE ENTERS INTO WRITTEN OR VERBAL AGREEMENT WITH THE OWNERS OF THE LAND FOR PAYM ENT OF A FIXED SUM AS CONSIDERATION ON PREVAILING MARKET PRICE OF THE LAND OF THE PARTICULAR AREA. AFTER THE OWNER OF THE LAND IS PAID IN FULL THE AGREED AMOUNT, THE LAND IS REGISTERED IN THE NAME OF THE RAJDHANI SYSTEMS & ESTATES (P) LTD. 5 ASSESSEE. AT THE TIME OF REGISTRATION OF LAND, THE AMOUNT OF CONSIDERATION MENTIONED IN THE CONVEYANCE DEED IS DEBITED TO LAND PURCHASE ACCOUNT AND THE BALANCE AMOUNT IS DEBITED TO LAND DEVELOPMENT ACCOUNT. IT WAS SUBMITTED THAT THE PRICE AT WHICH THE ASSESSEE ACQUIRES LAND IS A BUSINESS DECISION ON COMM ERCIAL EXPEDIENCY TO RUN THE BUSINESS. IF THE ASSESSEE STICKS TO THE BENCH MARK PRICE FIXED BY THE STATE GOVT, FOR COLLECTION OF STAMP DUTY, THE ASSESSEE CANNOT PURCHASE ANY LAND AS THE BENCH MARK PRICE IS ALWAYS LOWER THAN THE MARKET PRICE AND THAT WILL A FFECT THE RUNNING OF THE BUSINESS OF THE ASSESSEE. THE MENTION OF THE CONSIDERATION IN CONVEYANCE DEED IS FOR THE PURPOSE OF COLLECTING STAMP DUTY AND NOT THE ACTUAL CONSIDERATION OF THE TRANSACTION. REGARDING ALLEGATION THAT THE PRICE PAID OVER AND ABO VE THE REGISTRATION PRICE IS A VIOLATION OF REGISTRATION ACT, THE ASSESSEE HAS TO PAY FINE OR PENALTY FOR SUCH VIOLATION IF THE STATE GOVERNMENT INITIATES ACTION AGAINST THE ASSESSEE AND FINE OR PENALTY IS NOT DEDUCTIBLE U/S.37 OF THE ACT. HENCE, IT WAS SUBMITTED THAT THE AMOUNT PAID OVER AND ABOVE THE REGISTRATION PRICE SHOULD BE ALLOWED AS DEDUCTION U/S.37 OF THE ACT. IN SUPPORT OF HIS CONTENTION, THE ASSESSEE PLACED RELIANCE ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SHREE PAN CHAGANGASAHAKARISAKHARKARKHANA LTD., 250 ITR 772 (BOM). 53. LD D.R. ON THE OTHER HAND RELIED ON THE ORDER OF LOWER AUTHORITIES. 54. WE FIND THAT THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER ON THE GROUND OF ALLEGED VIOLATION OF SECTION 40A(3 ) OF THE ACT. HOWEVER, THE RELEVANT DETAILS AS TO THE DATE OF PAYMENT ON WHICH PAYMENT IN VIOLATION OF SECTION 40A(3) WAS ALLEGEDLY MADE BY THE ASSESSEE HAS NOT BEEN BROUGHT ON RECORD. IN THE CIRCUMSTANCES, IN OUR CONSIDERED VIEW, IT SHALL BE IN THE INTE REST OF JUSTICE TO RESTORE THIS ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION AFRESH AFTER TAKING INTO CONSIDERATION THE APPLICABILITY OR OTHERWISE OF SECTION 40A(3) OF THE ACT. THUS, THIS GROUND OF APPEAL IS ALSO ALLOWED FOR STATISTICA L PURPOSES. AS THE FACTS IN THE PRESENT APPEAL ARE IDENTICAL, RESPECTFULLY FOLLOWING THE PRECEDENT, WE SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND RESTORE THIS ISSUE BACK TO THE FILE OF AO WITH SAME DIRECTION AS RAJDHANI SYSTEMS & ESTATES (P) LTD. 6 GIVEN IN THE CASE OF HI - TECH ESTATES & PRO MOTERS PVT. LTD. (SUPRA). THUS, GROUNDS NO. 1 IN ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2007 - 08 AND GROUND NO. 2 IN THE ASSESSMENT YEAR 2008 - 09 ARE ALLOWED FOR STATISTICAL PURPOSES . 9 . AS THE FACTS IN THE PRESENT APPEAL ARE IDENTICAL, RESPECTFULLY FOLLOW ING THE PRECEDENT, WE SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND RESTORE THIS ISSUE BACK TO THE FILE OF AO WITH SAME DIRECTION AS GIVEN IN THE ORDER QUOTED ABOVE. THUS, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 10 . IN GR OUND NO.2 OF THE APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF 15% OF SCHEME PROMOTION EXPENSES AMOUNTING TO RS.2,35,630/ - WITHOUT APPRECIATING THE NECESSITY OF INCURRING SUCH EXPENSES WHICH IS BASED ON PR ESUMPTIONS AND SURMISES AND THE SAME IS LIABLE TO BE ALLOWED. 11 . BRIEF FACTS OF THE CASE ARE THAT THE AO NOTICED THAT THE ASSESSEE HAS INCURRED EXPENSES OF RS. 15,70,869/ - ON ACCOUNT OF SCHEME PROMOTION. HE REQUIRED THE ASSESSEE TO FILE THE DETAILS OF EXPE NSES TOWARDS SCHEME PROMOTION TO VERIFY THE GENUINENESS OF THE CLAIM. THE ASSESSEE DID NOT PRODUCE ANY BILLS/VOUCHERS IN SUPPORT OF THE EXPENSES CLAIMED. SINCE NO DETAILS WERE FURNISHED BY THE ASSESSEE IN RESPECT OF THE EXPENSES, THE AO DISALLOWED A SUM O F RS.2,35,630/ - ONLY BEING 15% OF THE TOTAL CLAIM OF RS.15,70,869/ - AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 1 2 . ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF AO BY OBSERVING AS UNDER : - RAJDHANI SYSTEMS & ESTATES (P) LTD. 7 3 . 2 I HAVE CONSIDERED THE MATTER CAREFULLY. THE AO DISALLOW ED 15% ONLY OUT OF SALES PROMOTION EXPENSES CLAIMED AT RS.15,70,869/ - THOUGH NO DETAILS WERE FURNISHED IN RESPECT OF THE ENTIRE EXPENSES. HE HAD CLEARLY AND CATEGORICALLY MENTIONED IN THE ASSESSMENT ORDER THAT 'NO DETAILS WERE FILED REGARDING THE SAID EXPE NSES'. IN A CASE WHERE NO DETAILS ARE FILED, THE AO HAS ONLY ONE OF THE TWO OPTIONS. EITHER HE WOULD DISALLOW THE ENTIRE CLAIM OR DISALLOW ONLY A PART OF IT CONSIDERING THE NATURE OF EXPENSES AND THE NECESSITY FOR INCURRING THE SAME FOR BUSINESS PURPOSES. IN THIS CASE, THE AO HAD DISALLOWED ONLY 15% OF THE CLAIM THOUGH HE COULD HAVE DISALLOWED THE ENTIRE CLAIM. THE ACTION OF THE AO, IN THE CIRCUMSTANCES OF THE CASE, APPEARS TO BE QUITE REASONABLE AND SHOULD NOT BE INTERFERED WITH. THE ARGUMENT OF THE ASSESS EE IS THAT THE AO HAD NOT SPECIFIED WHAT EXACT DETAILS HE REQUIRED FOR VERIFICATION AND THAT ALL THE BOOKS OF ACCOUNT WERE PRODUCED AND THE AO HAD NOT INDICATED ANY DEFECTS THEREIN. THIS ARGUMENT IS NOT AT ALL ACCEPTABLE. THE ONUS TO PROVE THE GENUINENESS OF AN EXPENDITURE FULLY LIES ON THE ASSESSEE AND IN THIS CASE, THE ASSESSEE HAS MISERABLY FAILED TO DISCHARGE THAT ONUS. I, THEREFORE, CONFIRM THE DISALLOWANCE OF RS.2,35,630/ - . 13 . THE DR SUBMITTED THAT THE ISSUE WAS COVERED BY THE DECISION OF THIS BEN CH OF THE TRIBUNAL IN THE CASE OF ASSESSEE ITSELF FOR THE ASSESSMENT YEAR 2007 - 08 & 2008 - 09 IN ITA NOS.253&254/CTK/2012, ORDER DATED 21.09.2017, WHERE THE TRIBUNAL RESTORED THE MATTER BACK TO THE FILE OF AO. HE SUBMITTED THAT FOLLOWING THE SAME, MATTER SHO ULD BE RESTORED BACK TO THE FILE OF AO. 14 . WE FIND THAT THE TRIBUNAL IN THE ORDER PASSED IN THE ASSESSMENT YEAR 2007 - 08 & 2008 - 09 IN ASSESSEES OWN CASE (SUPRA), IN PARA 17 HAS HELD AS UNDER : - 17. WE FIND THAT ON SIMILAR ISSUE IN APPEAL OF ONE OF THE G ROUP CASES IN CASE OF HI - TECH ESTATES & PROMOTERS PVT. LTD., RAJDHANI SYSTEMS & ESTATES (P) LTD. 8 IN IT(SS)A NO.03 TO 09/CTK/2017 FOR THE ASSESSMENT YEARS 2000 - 01 TO 2006 - 07, THE TRIBUNAL VIDE ITS ORDER DATED 31.08.2017, HAS RESTORED THE MATTER BACK TO THE FILE OF AO WITH THE FOLLOWING OBSERV ATIONS : - 40. WE FIND THAT IT IS NOT IN DISPUTE THAT THE ASSESSEE HAD PRODUCED BEFORE THE ASSESSING OFFICERS BILLS AND VOUCHERS RELATING TO SCHEME PROMOTION EXPENSES. THE ASSESSING OFFICER HAS MADE SWEEPING REMARKS THAT ENTIRE EXPENDITURE IS NOT SUBJECT T O VERIFICATION WITHOUT POINTING OUT WHICH PART OF THE EXPENSES OUT OF SCHEME PROMOTION EXPENSES IS NOT VERIFIABLE AND MADE ESTIMATED DISALLOWANCE @ 10% OUT OF TOTAL EXPENSES CLAIMED AT RS.1,85,51,649/ - AND MADE ADDITION OF RS.18,55,165/ - TO THE INCOME OF T HE ASSESSEE. SUCH AN ACTION OF THE ASSESSING OFFICER IS NOT TENABLE IN LAW. THE ASSESSING OFFICER IS DUTY BOUND TO POINT OUT WHICH EXPENSES ARE NOT SUPPORTED BY BILLS OR VOUCHERS ARE NOT VERIFIABLE. HE IS TO BE SPECIFIC AND CANNOT MAKE AN ESTIMATED DISA LLOWANCE WHERE THE ASSESSEE HAS PRODUCED BILLS AND VOUCHERS RELATING TO THE EXPENSES BEFORE HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS. AS WE HAVE RESTORED BACK THE ISSUE OF ADVANCE FROM CUSTOMERS AND THE ISSUE OF UNRECONCILED ADVANCE FROM CUSTOMERS TO THE FILE OF THE ASSESSING OFFICER FOR RE - ADJUDICATION OF THE SAME AFRESH, WE RESTORE THIS ISSUE ALSO BACK TO THE FILE OF THE ASSESSING OFFICER TO RE - ADJUDICATE THE ISSUE AFRESH IN THE LIGHT OF OBSERVATION MADE HEREINABOVE AFTER ALLOWING REASONABLE OPPO RTUNITY OF HEARING TO THE ASSESSEE. HENCE, THIS GROUND OF APPEAL IS ALSO ALLOWED FOR STATISTICAL PURPOSES. WE FIND THAT IN THE PRESENT APPEALS ALSO THE FACTS ARE IDENTICAL, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL IN CASE OF HI - TE CH ESTATES & PROMOTERS PVT. LTD., IN IT(SS)A NO.03 TO 09/CTK/2017 (SUPRA), WE RESTORE THE ISSUE BACK TO THE FILE OF AO WITH THE SAME DIRECTIONS GIVEN IN THE AFORESAID RAJDHANI SYSTEMS & ESTATES (P) LTD. 9 APPEALS, QUOTED ABOVE. THIS GROUND OF APPEAL OF REVENUE FOR BOTH THE ASSESSMENT YEARS I.E . AY.2007 - 08 & 2008 - 09 IS ALLOWED FOR STATISTICAL PURPOSES. 15 . WE FIND THAT IN THE PRESENT APPEAL ALSO THE FACTS ARE IDENTICAL TO THE FACTS IN THE APPEALS FOR ASSESSMENT YEAR 2007 - 08 & 2008 - 09, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE TRIB UNAL IN ITA NO. 253&254/CTK/2012, ORDER DATED 21.09.2017, WE RESTORE THE ISSUE BACK TO THE FILE OF AO WITH THE SAME DIRECTIONS GIVEN IN THE AFORESAID ORDER , QUOTED ABOVE. TH US, THIS GROUND OF APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 16 . IN GROUND NO.3, THE GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS. RS.4,23,574/ - BEING 25% O F ACCOUNT OF MISCELLANEOUS EXPENSES , WHICH IS BASED ON PRESUMPTIONS AND SURMISES AND THE SAME IS LIABLE TO BE ALLOWED. 17 . BR IEF FACTS OF THE CASE ARE THAT T HE AO FOUND THAT THE ASSESSEE HAD DEBITED AN AMOUNT OF RS.16,94,296/ - TOWARDS MISCELLANEOUS EXPENSES IN THE P&L ACCOUNT. ON VERIFICATION OF LEDGER, HE FOUND THAT THE ABOVE EXPENSES HAD BEEN INCURRED FOR CLUB MEMBERSHIP, PUJA AND CHARITIES. SUCH EXPENSES APPEARED NOT TO HAVE BEEN INCURRED FOR THE PURPOSE OF BUSINESS. THE ASSESSEE DID NOT OFFER ANY SATISFACTORY EXPLANATION TO SHOW THAT THE SAID MISCELLANEOUS EXPENSES HAD ANY BUSINESS NEXUS. THEREFORE, HE DISALLOWED ON ESTIMATE AN AMOUNT OF RS.4,23,574/ - BEING 25% OF THE CLAIM OF RS.16,94,296/ - . 18 . ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF AO OBSERVING AS UNDER : - RAJDHANI SYSTEMS & ESTATES (P) LTD. 10 4.2 I HAVE CONSIDERED THE MATTER CAREFULLY. IT APPEARS THAT UNDER MISCELLANEOUS EXPENSES, THE ASSESSEE HAS BOOK ED SEVERAL EXPENSES WHICH DO NOT APPEAR TO HAVE ANY BUSINESS EXPEDIENCY. THE ASSESSEE HAS ALSO FAILED TO PROVE THAT THEY WERE INCURRED FOR THE PURPOSE OF BUSINESS ONLY. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE ASSESSEE'S CASE, THE DISALLOWANCE OF RS.4, 23,574/ - OUT OF THE TOTAL EXPENSES OF RS.16,94,296/ - MAY BE CONSIDERED AS QUITE REASONABLE. THOUGH IN THE WRITTEN SUBMISSION, THE ASSESSEE PLEADS THAT THE MISCELLANEOUS EXPENSES REPRESENT VARIOUS REVENUE EXPENSES, NO DETAILS, NATURE OF EXPENDITURE - WISE WIT H NAME AND ADDRESS OF THE PAYEES AND THE MODE OF PAYMENT OF THE SAME HAVE BEEN FURNISHED BEFORE ME TO TAKE A VIEW DIFFERENT FROM THAT OF THE AO. HERE ALSO THE ASSESSEE HAS TO DISCHARGE ITS ONUS OF PROVING THE GENUINENESS OF THE EXPENSES AND IT GOES WITHOUT SAYING THAT IT HAS FAILED TO DO SO WITH REGARD TO THE CLAIM OF MISCELLANEOUS EXPENSES. MOREOVER, THE AO HAS DISALLOWED ONLY 25% OF THE EXPENSES THOUGH HE COULD HAVE DISALLOWED THE ENTIRE EXPENSES WHICH ARE BOOKED UNDER AN OMNIBUS HEAD. THE DISALLOWANCE OF RS.4,23,574/ - IS CONFIRMED. 19. THE DR SUBMITTED THAT THE ISSUE WAS COVERED BY THE DECISION OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF ASSESSEE ITSELF FOR THE ASSESSMENT YEAR 2007 - 08 & 2008 - 09 IN ITA NOS.253&254/CTK/2012, ORDER DATED 21.09.2017, WHERE THE TRIBUNAL RESTORED THE MATTER BACK TO THE FILE OF AO. HE SUBMITTED THAT FOLLOWING THE SAME, MATTER SHOULD BE RESTORED BACK TO THE FILE OF AO. 20 . WE FIND THAT THE TRIBUNAL IN THE ORDER PASSED IN THE ASSESSMENT YEAR 2007 - 08 & 2008 - 09 IN ASSESSEES OWN CASE (SUPRA), IN PARA 17 HAS HELD AS UNDER : - 17. WE FIND THAT ON SIMILAR ISSUE IN APPEAL OF ONE OF THE GROUP CASES IN CASE OF HI - TECH ESTATES & PROMOTERS PVT. LTD., RAJDHANI SYSTEMS & ESTATES (P) LTD. 11 IN IT(SS)A NO.03 TO 09/CTK/2017 FOR THE ASSESSMENT YEARS 2000 - 01 TO 2006 - 07, THE TRIBUNAL VIDE ITS ORDER DATED 31.08.2017, HAS RESTORED THE MATTER BACK TO THE FILE OF AO WITH THE FOLLOWING OBSERVATIONS : - 40. WE FIND THAT IT IS NOT IN DISPUTE THAT THE ASSESSEE HAD PRODUCED BEFORE THE ASSESSING OFFICERS BILLS AND VOUCHERS RELATING TO SCHEME PRO MOTION EXPENSES. THE ASSESSING OFFICER HAS MADE SWEEPING REMARKS THAT ENTIRE EXPENDITURE IS NOT SUBJECT TO VERIFICATION WITHOUT POINTING OUT WHICH PART OF THE EXPENSES OUT OF SCHEME PROMOTION EXPENSES IS NOT VERIFIABLE AND MADE ESTIMATED DISALLOWANCE @ 10 % OUT OF TOTAL EXPENSES CLAIMED AT RS.1,85,51,649/ - AND MADE ADDITION OF RS.18,55,165/ - TO THE INCOME OF THE ASSESSEE. SUCH AN ACTION OF THE ASSESSING OFFICER IS NOT TENABLE IN LAW. THE ASSESSING OFFICER IS DUTY BOUND TO POINT OUT WHICH EXPENSES ARE NOT SUPPORTED BY BILLS OR VOUCHERS ARE NOT VERIFIABLE. HE IS TO BE SPECIFIC AND CANNOT MAKE AN ESTIMATED DISALLOWANCE WHERE THE ASSESSE HAS PRODUCED BILLS AND VOUCHERS RELATING TO THE EXPENSES BEFORE HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS. AS WE HAV E RESTORED BACK THE ISSUE OF ADVANCE FROM CUSTOMERS AND THE ISSUE OF UNRECONCILED ADVANCE FROM CUSTOMERS TO THE FILE OF THE ASSESSING OFFICER FOR RE - ADJUDICATION OF THE SAME AFRESH, WE RESTORE THIS ISSUE ALSO BACK TO THE FILE OF THE ASSESSING OFFICER TO R E - ADJUDICATE THE ISSUE AFRESH IN THE LIGHT OF OBSERVATION MADE HEREINABOVE AFTER ALLOWING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. HENCE, THIS GROUND OF APPEAL IS ALSO ALLOWED FOR STATISTICAL PURPOSES. WE FIND THAT IN THE PRESENT APPEALS ALSO TH E FACTS ARE IDENTICAL, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL IN CASE OF HI - TECH ESTATES & PROMOTERS PVT. LTD., IN IT(SS)A NO.03 TO 09/CTK/2017 (SUPRA), WE RESTORE THE ISSUE BACK TO THE FILE OF AO WITH THE SAME DIRECTIONS GIVEN IN THE AFORESAID APPEALS, QUOTED ABOVE. THIS GROUND OF APPEAL OF REVENUE FOR RAJDHANI SYSTEMS & ESTATES (P) LTD. 12 BOTH THE ASSESSMENT YEARS I.E. AY.2007 - 08 & 2008 - 09 IS ALLOWED FOR STATISTICAL PURPOSES. 21. WE FIND THAT IN THE PRESENT APPEAL ALSO THE FACTS ARE IDENTICAL TO THE FACTS IN THE AP PEALS FOR ASSESSMENT YEAR 2007 - 08 & 2008 - 09, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL IN ITA NO.253&254/CTK/2012, ORDER DATED 21.09.2017, WE RESTORE THE ISSUE BACK TO THE FILE OF AO WITH THE SAME DIRECTIONS GIVEN IN THE AFORESAID ORDE R, QUOTED ABOVE. THUS, THIS GROUND OF APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 22 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON THURSDAY THE 15 TH DAY OF FEBRUARY, 2018 AT CUTTACK. SD/ - ( PAVAN KUMAR GADALE ) SD/ - (N. S. SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK ; DATED 15 / 02 /201 8 . . / PKM , SENIOR PRIVATE SECRETARY / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - RAJDHANI SYSTEMS &ESTATES (P) LTD., PLOT NO.A - 103, SAHID NAGAR, BHUBANESWAR 2. / THE RESPONDENT - ACIT, CIRCLE - 2(2), BHUBANESWAR - 751007 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, IT AT, CUTTACK 6. / GUARD FILE. //TRUE COPY//