PRATAP SONS, JAIPUR V. ASSISTANT COMMISSIONER OF INCOME TAX, JAIPUR

ITA 250/JPR/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6127 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 22-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AJAY MALIK CIT A
• Assessee Lawyers: VIJAY KANT JAIN
• Keywords: Depreciation; Revenue expenditure; Capital expenditure

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 250/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2013-14 PRATAP SONS SB-39, RAMBAGH CIRCLE, TONK ROAD, JAIPUR. CUKE VS. THE ACIT, CRICLE-5, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AACFP 1895 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI VIJAY KANT JAIN (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI AJAY MALIK (ADDL.CIT) A LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 14/05/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 16/05/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A)-2, JAIPUR DATED 26.12.2017 FOR ASSESSMENT YE AR 2013-14 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND S OF APPEAL: 1. THAT THE LEARNED CIT(APPEALS) ERRED IN CONFIRMI NG DISALLOWANCE OF INTEREST TO THE EXTENT OF RS. 16,81,057/- TREATING IT AS CAPITAL EXPENDITURE. THE DISALLOWANCE SUSTAINED IS UNJUST A ND ADDITION OF RS. 16,81,057/- DESERVES TO BE DELETED. 2. WITHOUT PREJUDICE TO GROUND NO. 1, DEPRECIATION ON ACCOUNT TREATED AS CAPITAL EXPENDITURE (BUILDING) (10% OF RS. 16,81 ,057) BE ALLOWED TO THE ASSESSEE. ITA NO. 250/JP/2018 PRATAP SONS VS. ACIT 2 3. THAT THE LEARNED CIT(APPEALS) ERRED IN CONFIRMIN G DISALLOWANCE OF TELEPHONE, TRAVELLING, CONVEYANCE EXPENSES AND DEPR ECIATION ON CAR TO THE EXTENT OF RS. 4,28,126/-. 4. THAT THE LEARNED CIT(APPEALS) ERRED IN CONFIRMIN G DISALLOWANCE OF ENTERTAINMENT AND STAFF REFRESHMENT EXPENSES TO THE EXTENT OF RS. 69,766/-. 2. REGARDING GROUND NOS. 1 AND 2, BRIEFLY THE FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS TAKEN CERTAIN LOAN F OR BUILDING CONSTRUCTION WHICH HAS BEEN CAPITALIZED IN A.Y. 201 2-13, HOWEVER, FOR THE YEAR UNDER CONSIDERATION, THE INTEREST EXPENSES ON THE SAID LOAN HAS NOT BEEN CAPITALIZED. THE ASSESSEE WAS ISSUED A SHO W-CAUSE NOTICE TO JUSTIFY WHY INTEREST EXPENSE SHOULD NOT BE CAPITALI ZED BEFORE THE BUILDING HAS BEEN PUT TO USE BY THE ASSESSEE INSTEA D OF CLAIMING THE INTEREST EXPENSE AS REVENUE EXPENDITURE. AFTER CONS IDERING THE ASSESSEES SUBMISSION, THE ASSESSING OFFICER HAS RE TURNED A FINDING THAT BY ASSESSEES OWN ADMISSION, THE LOAN WAS TAKEN FOR BUSINESS PURPOSE OF BUILDING CONSTRUCTION AND INTEREST EXPENSE HAS B EEN CAPITALIZED FOR A.Y. 2012-13, THE SAME SHOULD ALSO BE CAPITALIZED T ILL THE BUILDING IS PUT TO USE. AS PER THE ASSESSING OFFICER, THE NEW SHOW ROOM WAS BUILT AND PUT TO USE IN SEPTEMBER 2012 ACCORDINGLY, THE INTER EST PAID FOR THE PERIOD APRIL,2012 TO AUGUST, 2012 AMOUNTING TO RS. 16,81,057/- WAS DISALLOWED AS REVENUE EXPENDITURE AND THE SAME WAS CAPITALIZED IN THE BUILDING ACCOUNT OF THE ASSESSEE. HOWEVER, NO DEPR ECIATION ON THE SAID AMOUNT BEING CAPITALIZED WAS ALLOWED BY THE ASSESSI NG OFFICER. ITA NO. 250/JP/2018 PRATAP SONS VS. ACIT 3 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) AND IT WAS CONTENDED THAT THE LOAN O F RS. 2.8 CRORES WAS TAKEN FROM THE HDFC BANK IN AUGUST, 2010 AGAINST MO RTGAGE OF PROPERTY AT BHAGWAN DAS ROAD, JAIPUR AND IT WAS FU RTHER CONTENDED THAT THIS LOAN HAD BEEN USED FOR BUSINESS PURPOSE B UT WAS NOT USED FOR BUILDING CONSTRUCTION AND INTEREST THEREON WAS THER EFORE CLAIMED AS ELIGIBLE REVENUE EXPENDITURE. AS PER THE LD. CIT(A) , SINCE THE ASSESSEE ITSELF HAS CAPITALIZED THE LOAN IN THE PREVIOUS YEA R AND THE PERIOD OF CONSTRUCTION OF THE BUILDING AND THE PERIOD OF LOAN ARE FOR THE SAME MONTHS, IT CANNOT BE ASCERTAINED WHETHER THE LOAN W AS UTILIZED FOR BUSINESS CONSTRUCTION OR NOT. IN VIEW OF THE SAME A ND BY THE ASSESSEES OWN TREATMENT OF CAPITALIZING THE SAME IN THE EARLI ER YEAR, THE STAND OF THE ASSESSING OFFICER WAS CONFIRMED. 4. DURING THE COURSE OF HEARING, THE LD. AR REITERA TED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. IT W AS SUBMITTED BY THE LD AR THAT THE LOAN OF RS. 2.8 CRORES FROM HDFC BAN K WAS TAKEN IN AUGUST, 2010 AGAINST MORTGAGE OF PROPERTY AND THE C ONSTRUCTION OF BUILDING AT RAMBAGH CIRCLE, JAIPUR STATED IN DECEMB ER, 2010. IT WAS SUBMITTED THAT THE SOURCE OF INVESTMENT IN BUILDING IS INTERNAL ACCRUALS FROM BUSINESS OPERATIONS AND NO LOAN HAS BEEN TAKEN FOR THE PURPOSE OF CONSTRUCTION OF THE BUILDING. IT WAS SUBMITTED THAT THE LOAN AGAINST THE MORTGAGE OF PROPERTY TAKEN FROM HDFC BANK HAS NOTHI NG TO DO WITH THE CONSTRUCTION OF THE BUILDING AT RAMBAGH CIRCLE, JAI PUR NOR WAS THIS PROPERTY MORTGAGED TO THE BANK. IT WAS SUBMITTED TH AT THE SOURCE OF INVESTMENT FOR BUILDING IS INTERNAL ACCRUALS AND FR OM COMPOSITE FUND OF BUSINESS INCLUDING SUNDRY CREDITORS AND PARTNERS CA PITAL. IT WAS ITA NO. 250/JP/2018 PRATAP SONS VS. ACIT 4 SUBMITTED THAT SINCE NO LOAN HAS BEEN TAKEN FOR THE PURPOSE OF CONSTRUCTION OF THE BUILDING, NO INTEREST COST HAS BEEN CAPITALIZED DURING THE YEAR UP TO THE PERIOD THE BUILDING WAS FIRST PU T TO USE. IT WAS SUBMITTED THAT THE AO HAS MADE THE DISALLOWANCE WIT HOUT CORRELATING THE HDFC BANK MORTGAGE LOAN WITH THE INVESTMENT IN THE BUILDING ACCOUNT. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAD ERRONEOUSLY CAPITALIZED INTEREST ON THIS LOAN IN THE PREVIOUS A SSESSMENT YEAR 2012- 13 WHICH WAS DULY BROUGHT TO THE NOTICE OF THE ASSE SSING OFFICER. IT WAS SUBMITTED THAT MERELY BECAUSE THE INTEREST ON THIS LOAN WAS CAPITALIZED IN THE PREVIOUS ASSESSMENT YEAR, INTEREST CANNOT BE DISALLOWED WITHOUT ESTABLISHING CORRELATION BETWEEN THE TWO AS EACH AS SESSMENT YEAR IS INDEPENDENT AND BONAFIDE ERROR IN AN EARLIER YEAR C ANNOT BE THE BASIS OF DISALLOWANCE IN SUBSEQUENT YEAR. WITHOUT PREJUDICE, IT WAS FURTHER SUBMITTED THAT SINCE THE BUILDING WAS READY FOR USE AND STARTED BEING USED BY JUNE, 2012 ITSELF, THOUGH FULL-FLEDGED BUSI NESS OPERATIONS STARTED IN SEPTEMBER, 2012 INTEREST CAN ONLY BE DIS ALLOWED/ CAPITALIZED UPTO JUNE, 2012 ONLY AND NOT UPTO SEPTEMBER, 2012 W HEN THE SHOWROOM STARTED FUNCTIONING. FURTHER, WITHOUT PRE JUDICE, IT WAS SUBMITTED THAT IF THE INTEREST IS DISALLOWED AS BEI NG CAPITAL EXPENDITURE PERTAINING TO THE BUILDING, DEPRECIATION @ 10% ON R S. 16,81,057/- DESERVED TO BE ALLOWED ON THE AMOUNT OF INTEREST DI SALLOWED BEING OF CAPITAL IN NATURE AND COST OF THE BUILDING AND THE WRITTEN DOWN VALUE OF BUILDING HAS TO BE ACCORDINGLY ADJUDICATED. 5. THE LD. DR IS HEARD WHO HAS RELIED ON THE FINDIN G OF THE ASSESSING OFFICER AND DRAWN OUR ATTENTION TO THE FACT THAT DU RING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE ITSELF HAS ADM ITTED THAT THE LOAN ITA NO. 250/JP/2018 PRATAP SONS VS. ACIT 5 HAS BEEN TAKEN FOR THE PURPOSE OF BUILDING CONSTRUC TION AND GIVEN THAT THE SAME WAS CAPITALIZED FOR A.Y. 2012-13, THE SAME HAS BEEN RIGHTLY DISALLOWED AS REVENUE EXPENDITURE. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE AO HAS RETURNED A FINDING THAT THE PURPOSE FOR WHICH THE MORTGAGE LOAN HAS BEEN TAKEN BY THE ASSES SEE FROM HDFC BANK IS FOR THE PURPOSE OF BUILDING CONSTRUCTION AN D THE SAID FINDING IS BASED ON THE ASSESSEES OWN SUBMISSION DURING THE C OURSE OF ASSESSMENT PROCEEDING. FURTHER, IT WAS NOTED THAT I N THE PREVIOUS ASSESSMENT YEAR 2012-13 THE ASSESSEE ITSELF HAS CAP ITALIZED THE INTEREST EXPENSES IN ITS BOOKS OF ACCOUNTS AND HAS NOT CLAIM ED THE SAME AS REVENUE EXPENDITURE WHILE FILING ITS RETURN OF INCO ME. REGARDING CONTENTION OF THE LD AR THAT THE LOAN HAS NOT BEEN TAKEN FOR BUILDING CONSTRUCTION AND FURTHER THE AO HAS MADE THE DISALL OWANCE WITHOUT CORRELATING THE HDFC BANK MORTGAGE LOAN WITH THE IN VESTMENT IN THE BUILDING ACCOUNT, IN OUR VIEW, IT IS FOR THE ASSESS EE TO DEMONSTRATE THROUGH VERIFIABLE EVIDENCE THAT THE PURPOSE OF LOA N AND ITS UTILIZATION IS NOT FOR THE PURPOSES OF THE BUILDING CONSTRUCTION W HICH IT HAS FAILED TO DO SO AND NOTHING HAS BEEN BROUGHT ON RECORD TO CON TROVERT THE FINDINGS OF THE AO. FURTHER, GIVEN THAT BY ASSESSEE S OWN TREATMENT OF CAPITALIZING THE INTEREST EXPENDITURE IN THE PREVIO US ASSESSMENT YEAR 2012-13, WHERE THE ASSESSEE NOW CLAIMS THAT THE EXP ENDITURE IS NOT CAPITAL BUT REVENUE, THERE IS GREATER ONUS ON THE A SSESSEE WHICH IT HAS AGAIN FAILED TO DISCHARGE IN THE PRESENT CASE. IN THIS FACTUAL BACKGROUND, WE DO NOT SEE ANY INFIRMITY IN ACTION O F THE ASSESSING OFFICER IN DISALLOWING THE INTEREST EXPENSES TILL T HE NEW BUILDING WAS PUT ITA NO. 250/JP/2018 PRATAP SONS VS. ACIT 6 TO USE IN SEPTEMBER, 2012. AT THE SAME TIME GIVEN T HAT THE ASSESSING OFFICER HAS CAPITALIZED THE SAID INTEREST PAID FOR THE PERIOD APRIL 2012 TO AUGUST, 2012 IN THE BUILDING ACCOUNT, THE ASSESSE B ECOME ELIGIBLE TO CLAIM DEPRECIATION @ 10% ON THE SAID INTEREST BEING CAPITALIZED. WE THEREFORE, ALLOW THE ALTERNATIVE CLAIM OF THE ASSES SEE REGARDING DEPRECIATION ON THE SAID INTEREST BEING CAPITALIZED BY THE ASSESSING OFFICER. IN THE RESULT, GROUND NO. 1 OF THE ASSESSE ES APPEAL IS DISMISSED AND GROUND NO. 2 IS ALLOWED. 7. REGARDING GROUND NO. 3, THE ASSESSING OFFICER HA S DISALLOWED 10% OF THE EXPENDITURE IN THE NATURE OF TELEPHONE, TRAVELLING, CONVEYANCE AND DEPRECIATION ON CARS TOTALING TO RS. 4,28,126/-. THE ASSESSING OFFICER OBSERVED THAT THE SAID EXPENSES A RE RELATED TO SUCH FACILITIES WHICH ARE CERTAINLY PROVED TO BE USED F OR OTHER THAN BUSINESS PURPOSE AND REFERRING TO THE DECISION OF HONBLE MA DRAS HIGH COURT IN CASE OF SUNDRAM INDUSTRIES LTD 239 ITR 405 HAS OBSE RVED THAT DISALLOWANCE OUT OF SUCH EXPENSES ON ACCOUNT OF PER SONAL NATURE IS JUSTIFIED. IT WAS FURTHER OBSERVED BY THE AO THAT T HE SOME OF THE THESE EXPENSES IN RESPECT OF CONVEYANCE AND TRAVELLING WE RE MADE IN CASH ON THE BASIS OF SELF MADE VOUCHERS SO THE COMPLETE VER IFICATION OF THESE EXPENSES WAS NOT POSSIBLE. ACCORDINGLY, 1/10 TH EXPENSES WERE DISALLOWED AND ADDED BACK TO THE INCOME OF THE ASSE SSEE WHICH HAS BEEN CONFIRMED BY THE LD. CIT(A) HOLDING THE SAME T O BE REASONABLE. 8. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT THE TELEPHONE EXPENSES ARE FULLY VOUCHED. SAME ARE MAIN LY OF TELEPHONE INSTALLED AT THE SHOP AND MOBILES GIVEN TO EMPLOYEE S. PERSONAL USE BY ITA NO. 250/JP/2018 PRATAP SONS VS. ACIT 7 PARTNERS IS MINIMAL AND DISALLOWANCE OF 10% IS EXCE SSIVE AND DESERVES TO BE SUBSTANTIALLY REDUCED. THE ASSESSEE IS IN BUS INESS OF LADIES WEAR. MOST OF THE PURCHASES FOR RETAIL BUSINESS ARE FROM OUTSIDE JAIPUR AND ALMOST ALL WHOLESALE SALE IS OUT OF JAIP UR. THE PARTNERS AND EMPLOYEES HAVE TO TRAVEL EXTENSIVELY. MORE THAN 80% OF THE EXPENDITURE IS ON AIR AND TRAVEL TICKETS AND HOTEL STAY WHICH ARE FULLY VOUCHED. COPY OF LEDGER ACCOUNT IS AT PAGE 23-33 OF PAPER BOOK. EXPENSES ON TAXIES AND FOOD AND MISCELLANEOUS EXPEN DITURE WHICH IS REIMBURSED ON STATEMENT OF EXPENDITURE SUBMITTED IS LESS THAN 20% OF THE TRAVELLING EXPENDITURE. ASSUMING PERSONA L EXPENSES IN TRAVELLING EXPENDITURE IS ERRONEOUS. THE QUANTUM OF SUCH EXPENDITURE IS MOST REASONABLE LOOKING TO THE NATUR E OF BUSINESS AND TURNOVER OF THE ASSESSEE. THE SAME DESERVES ACC EPTANCE. ALTERNATIVELY, DISALLOWANCE OF 10% (I.E. RS. 1,90,7 77/-) IS HIGHLY EXCESSIVE AND DESERVES TO BE SUBSTANTIALLY REDUCED. DISALLOWANCE OF RS. 78,515/- ON DEPRECIATION OF CARS IS UNJUST. THE VEHICLES ARE OWNED BY THE FIRM AND THERE CAN BE NO PERSONAL ELEMENT OR UNVOUCHED EXPENDITURE IN DEPRECIATION OF VEHICLES. DEPRECIATI ON IS A STATUTORY DEDUCTION BASED ON WEAR AND TEAR OF ASSETS OWNED. T HE DISALLOWANCE OF 10% OF DEPRECIATION IS THEREFORE UNJUST AND DESERVE S TO BE DELETED. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE EXPENDITURE H AS BEEN DISALLOWED ON THE BASIS THAT THE PERSONAL USE OF THE TELEPHONE FACILITY CANNOT BE RULED OUT AND DURING THE COURSE OF HEARING, THE LD AR HAS STATED THAT THE PERSONAL USAGE BY THE PARTNERS IS MINIMAL THOUG H THE QUANTUM OF DISALLOWANCE IS ON A HIGHER SIDE. GIVEN THAT NO BA SIS OR ALLOCATION HAS ITA NO. 250/JP/2018 PRATAP SONS VS. ACIT 8 BEEN BROUGHT ON RECORD, WE FIND THAT THE AO IS REAS ONABLE TO DISALLOW 10% OF TELEPHONE EXPENSE AND THE SAME IS UPHELD. R EGARDING TRAVEL EXPENDITURE, THE LD AR HAS SUBMITTED THAT EXPENDITU RE IS FULLY VOUCHED AND NO SPECIFIC INSTANCE HAS BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER DETERMINING THE PERSONAL TRAVEL EXPENDITURE BEING CLAIMED AS PART OF OFFICIAL TRAVEL EXPENDITURE. WE AGREE WITH THE CONTENTIONS OF THE LD AR AND DISALLOWANCE MADE REGARDING TRAVEL EXPEND ITURE IS DELETED. REGARDING DISALLOWANCE OF CONVEYANCE EXPENDITURE, N O SPECIFIC ARGUMENTS HAVE BEEN TAKEN AND THE DISALLOWANCE IS H EREBY CONFIRMED. REGARDING DEPRECIATION ON CARS, IT HAS BEEN CONTEND ED THAT THE VEHICLES ARE OWNED BY THE FIRM AND THERE CAN BE NO PERSONAL ELEMENT OR UNVOUCHED EXPENDITURE IN DEPRECIATION OF VEHICLES A ND DEPRECIATION IS A STATUTORY DEDUCTION BASED ON WEAR AND TEAR OF ASSET S OWNED. ONCE IT IS NOT DISPUTED BY THE REVENUE THAT THE VEHICLES ARE O WNED BY THE FIRM, THE DEPRECIATION BEING A STATUTORY ALLOWANCE DESERV ES TO BE ALLOWED. AT THE SAME TIME, WHERE IT IS ESTABLISHED THAT THE VEH ICLE HAS BEEN USED FOR PERSONAL PURPOSES, IN SUCH A SCENARIO, THE REVE NUE IS WELL WITHIN ITS RIGHT TO TAX THE VEHICLE RUNNING EXPENDITURE AS PER QUISITE IN HANDS OF THE EMPLOYEES/DIRECTORS. IN THE RESULT, THE GROUND OF APPEAL IS PARTLY ALLOWED. 10. REGARDING GROUND NO. 4, BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER HAS DISALLOWED 10% OF ENTERTAINME NT AND STAFF REFRESHMENT EXPENSES AMOUNTING TO RS. 69,765 HOLDIN G THAT THESE EXPENSES WERE NOT FULLY SUPPORTED BY THE PROPER BIL LS DUE TO WHICH THESE EXPENSES COULD NOT BE VERIFIED COMPLETELY. TH E DISALLOWANCE HAS BEEN CONFIRMED BY THE LD. CIT(A) HOLDING THE SAME T O BE REASONABLE. ITA NO. 250/JP/2018 PRATAP SONS VS. ACIT 9 11. DURING THE COURSE OF HEARING, THE LD. AR SUBMIT TED THAT THE A.O. HAS ERRED IN DISALLOWING 10% OF EXPENDITURE ON ENTE RTAINMENT AND STAFF REFRESHMENT (TOTAL EXPENDITURE RS. 6,97,658/- ). THE ASSESSEE IS IN BUSINESS OF SAREES AND LADIES WEAR. NATURE OF BUSINESS IS SUCH THAT TEA, COFFEE, COLD DRINKS, MINERAL WATER, CHOCO LATES ETC HAVE TO SERVED TO CUSTOMERS AND TEA ETC TO STAFF. THE AMOUN T OF EXPENDITURE ON ENTERTAINMENT AND STAFF REFRESHMENT IS LESS THAN 0.20% OF TURNOVER WHICH IS MOST REASONABLE AND DESE RVES ACCEPTANCE. 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE AO HAS DISALLOWED 10% OF T HE EXPENDITURE HOLDING THAT THE SAME ARE NOT FULLY SUPPORTED BY VO UCHERS AND EVIDENCES. THE NATURE OF THE EXPENDITURE IS EXPLAI NED AS REFRESHMENTS IN FORMS OF TEA/COFFEE OFFERED TO CUSTOMERS AND EMP LOYEES. GIVEN THE NATURE OF THE ASSESSEES BUSINESS AND ITS REPORTED TURNOVER, WE FIND THE NATURE AND QUANTUM OF EXPENDITURE TO BE REASONABLE AND THE ADDITION SO MADE BY THE AO IS HEREBY DELETED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/05/2018. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR ITA NO. 250/JP/2018 PRATAP SONS VS. ACIT 10 FNUKAD@ DATED:- 16/05/2018. *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- PRATAP SONS, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CIRCLE-5, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 250/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR