H. H. Bottling Plant, Sriganganagar V. ITO, Ward-2, Sriganganagar

ITA 319/JODH/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 8279 (ITAT-JODHPUR)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-03-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 21-08-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PREM PRAKASH MEENA
• Keywords: Depreciation; Principle of natural justice; Validity of assessment; Condonation of delay; TDS
• Section: 32; 142(1); 250; 143(2); 48; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR. BEFORE: DR. S. SEETHALAKSHMI, JJUDICIAL MEMBER & SHRI RATHOD KAMLESH JAYANTBHAI, ACCOUNTANT MEMBER I.T.A. No. 319/Jodh/2023 Assessment Year: 2015-16 H. H. Bottling Plant 330-330A, Agro Food Park Udhyog Vihar, Sri Ganganagar [PAN: AAEFH 4163 R] (Appellant) Vs. Income Tax Officer, Ward-2, Sri Ganganagar (Respondent) Appellant by Sh. Rajendra Jain, Adv. & Smt. Raksha Birla, CA Respondent by Sh. Prem Prakash Meena, Sr. DR Date of Hearing 11.03.2024 Date of Pronouncement 13.03.2024 ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal filed by assessee is arising out of the order of theNational Faceless Appeal Centre, Delhi dated 14/06/2023 [here in after ‘NFAC’ ] for assessment year 2015-16 which in turn arise from the order dated 31.12.2017 passed under section 143(3)of the Income Tax Act, by ITO, Ward-2, Sri Ganganagar. I.T.A. No. 319/Jodh/2023 Assessment Year: 2015-16 2 2. At the outset of hearing, the Bench observed that there is delay of 9 days in filing of the appeal by the assessee for which the ld. AR of the assessee filed an affidavit for condonation of delay with following prayers:- “Sub:- Application for condonation of delay in filing of appeal. Hon'ble Sir, The appellant had filed an appeal against order u/s 250 on 22.08.2023 before Hon'ble Tribunal. The appeal filed by assessee was delay of 9 days on following reasonable grounds. 1. That local chartered account of appellant had send the documents and order to Adv, Rajendra Jain, Jodhpur for preparation and filing of appeal before Tribunal. 2.That due to father of Adv, Rajendra Jain was expired and he was at native village Barmer and due to such unavoidable reason, there was delay in filling of appeal. 3. The Hon'ble Delhi High Court's decision in case of HL Malhotra & Company Pvt. Ltd. Vs DCIT, Circle12, New Delhi (ITA No. 211/2020 & CM Appeals 32045-32047/2020 dated 22 nd December, 2020) wherein delay of 498 days in filing was condoned by the Hon'ble Delhi High Courtand it was held that in absence of anything male fide or deliberate delay as a dilatory tactic, the Court should normally condone the delay as the intent is always to promote substantial justice following the Hon'ble Supreme Court decisions in the case of Collector, Land Acquisition, Anantnag &Anr. Vs Mst. Katiji and others (1987) 2 SCC 107 and N. Balakrishnan Vs M. Krishnamurthy 1998 (7) SCC 123. 4. Therefore in the light of above reason and looking to interest of substantial justice as held by the Hon'ble supreme Court in case of Collector, Land Acquisition v/s MST Katiji, (1987) 2 SCC 107 that "when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred". In light of above and the decision of Hon'ble Supreme Court, where substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserved to be preferred. Therefore I requested kindly condone the delay and decided the appeal on merit and oblige.” I.T.A. No. 319/Jodh/2023 Assessment Year: 2015-16 3 2.1 During the course of hearing, the ld. DR fairly not objected to assessee’s application for condonation of delay and prayed that Court may decide the issue as deem fit in the interest of justice. 2.2 We have heard both the parties and perused the materials available on record. The Bench Noted that the assessee for condonation of delay of 09 days has merit and we concur with the submission of the assessee. Thus the delay of 09 days in filing the appeal by the assessee is condoned in view of the decision of Hon’ble Supreme Court in the case of Collector, land Acquisition vs. Mst. Katiji and Others, 167 ITR 471 (SC) as the assessee is prevented by sufficient cause. 3. In this appeal, the assessee has raised following grounds: - “1. That on the facts and in the circumstances of the case the order passed by Ld CIT(A), NFAC is bad in law and bad in facts 2. That on the facts and in the circumstances of the case the Id CIT (A) erred in upholding validity and legality of assessment order passed by the Id AO. 3. That on the facts and in the circumstances of the case the Ld CIT(A), NFAC grossly erred in confirming the addition of Rs. 36,58,466 in respect of disallowance of expenditure of wages payment made by the Ld AO. 4. That on the facts and in the circumstances of the case the Ld CIT(A), NFAC grossly erred in sustaining the addition of Rs. 65,581/- made by the Ld AO in respect of disallowance of depreciation. 5. hat on the facts and in the circumstances of the case the Ld CTT(A), I.T.A. No. 319/Jodh/2023 Assessment Year: 2015-16 4 NFAC grossly erred in sustaining the addition of Rs. 6,71,049/- in respect of disallowance of salary expenses claimed by the assessee. 6. hat on the facts and in the circumstances of the case the Ld CIT(A), NFAC grossly erred in upholding the findings recorded by the Ld AO without taken to consider the material facts. 7. That on the facts and in the circumstances of the case the ld. CIT(A), NFAC grossly erred in without considering the submission &evidences furnished by the assessee in right perspective and judicious manner and decided the appeal in casual & hypothetical manner which is not only contrary to provision of law but also against the principle of natural justice. 8. That the petitioner may kindly be permitted to raise any additional or alternative grounds at or before the time of hearing. 9. The petitioner prays for justice & relief.” 4. Succinctly, the fact as culled out from the records is that the assessee is running a bottling plant of country liquor. The work of the assessee is a labour oriented work and so the assessee has to pay heavy labour charges. The assesseemust maintain sufficient number of staff members as the assessee has to supply the goods in the whole of the Rajasthan. The ld. A.O. has disallowed some part of the wages and salary and also made disallowances for depreciation. 5. Aggrieved from the order of ld. AO, the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below: “Decision: I.T.A. No. 319/Jodh/2023 Assessment Year: 2015-16 5 I have gone through the above submissions of the Appellant and have considered the facts and evidence on record. In this case it is observed that the appellant had filed return of income on 31.10.2015and declared total income of Rs. 2,72,500/-. The case was selected under CASS, Notice u/s 143(2) of the Income Tax Act, 1961 dated 5/8 / 2016 was issued. In response to the said notice the authorised representative Shri Deepak Jain presented written replyto the AO on 23/8 / 2017 Notice u/s 142(1) of the Income Tax Act, 1961 was issued on 26/9 / 2017 by the AO, fixing the hearing on 9/10 / 2017 but there was no response from the appellant. On 1/12 / 2017 the AO issued a notice u/s 271(1)B of the Income Tax Act, 1961and fixed hearing date on 11/12 /2017 In response to the said notice, the authorized representative furnished the audit report, Return of income etc.. 1. In respect of ground no. 01, the appellant had not submitted payment bill vouchers/receipt, payment register etc. in respect of wages payment. Hence, due to non-production of bill vouchers, the ground of appeal of appellant is not accepted. 2. In respect ofground no. 02, the appellant had not submitted bill/vouchers related to expenses even after many reminders. Hence. the ground of appellants not considered. 3. Inrespectofground no. 03, the appellant used the car for personal use. Hence, 20% disallowed in respect of depreciation claimed on the car is found to be correct The Carbon Chamber was not used in the previous year according to verification by the Income tax Inspector. Hence, depreciation on the said chamber was not allowed. This Ground of appeal fails. 4. In respect of ground no. 04, the appellant submitted the register of salary payment but the payment of salary did not match as per verification by the AO. Hence, the said difference of amount was not allowed as salary expenses. This Groun of appeal is not accepted. 5.In respect of ground no. 05, the AO iterated that the appellant hadtaken loan from bank,at the same time loan was granted the partnerwithout interest, yet the appellant claimed interest on loan. However on considering the submissions of the appellant and the facts on hand, it emerges that the appellant firm had two partners i.e., S/Sh. AnandKansal and Hemant Gupla. As per the capital accounts of both the partners as furnished in the audit report, it is seen that at the end of the year both the partners were having credit balance in their respective capital accounts. The closing balance of Sh. AnandKansal was Rs.2,12,15,661/- and Shri Hemant Gupta was Rs. 42,35,609/- thus the total capital of the partners stood at Rs. 2,56,51,270/-. In the year under consideration S/Sh. Anand I.T.A. No. 319/Jodh/2023 Assessment Year: 2015-16 6 Kansal and Hemant Gupta had withdrawn Rs.20,00,000/- and Rs.1,28,50,000/- totaling to Rs.1,48,50,000/-. These withdrawals have been shown under the head loan and advances in the Balance sheet. The purported reason for not showing these withdrawals in the capital account and disclosing the same as loans and advances was that the appellant firm had to maintain minimum limit in their capital account and for the said reason, the minimum balance of capital was to be maintained. Had these withdrawals been accounted for in the capital account, the total capital of the firm would have been reduced resulting in deficient bank limit, thus the partners have shown these as withdrawals of capital under the head Loan & Advances, thereby not debiting the capital account.Even after adjusting the withdrawn capital, the net capital of both the partners was Rs. 1,08.01.270/- Thus, the observation of the AO in the assessment order is not correct and hence, this ground of appeal succeeds. Since the Appellant has not adduced any additional ground(s) and since no ground of appeal has been altered/modified/changed, this ground of appeal is dismissed as “not pressed” 6. In the result, the appeal is partly allowed. In the result, the appeal is decided as above. 6. As the assessee did not get relief on the disallowance of the expenditure the assessee preferred the present appeal on the various grounds as reiterated here in above. Apropos to the ground so raised the ld. AR of the assessee relied upon the submission made before the ld. CIT(A) and the same is not repeated for the sake of convenience. The ld. AR of the assessee relied upon the following evidences: S. No. Particulars Page No. 01 Copy of written submission before CIT(A) 1-12 02 Copy of confirmation in respect of genuineness of payment of wages. 13-17 03 Copy of detail of expenses 18-19 04 Copy of reply to AO dated 30/12/2017 20-21 I.T.A. No. 319/Jodh/2023 Assessment Year: 2015-16 7 05 Copy of reply to AO dated 20/12/2017 along with ledger of wages. 22-25 06 Copy of reply to AO dated 20/12/2017 along with statements 26-29 7. The ld. AR of the assessee vehemently argued that the lower authority has not appreciated the fact and made the disallowance of expenses arbitrarily. In support of the claimshe submitted that in each division how many number of days they worked and what is the payment per day paid to workers. The assessee claimed @6.25 per box of 42 bottles @ rate of Rs. 180 per day per head which is fair and reasonable claim and to this effect certificate of the supervisors were submitted. The nature of business of the assessee is labour oriented. The books of account of the assessee duly audited. The ld. AR of the assessee submitted that one carton of country liquor contains 48 bottles of 180 ML each. In the year under assessment the assessee has produced the 828266/- Cartoons or say 3,97,56,768/- bottles. On this work the assessee has claimed the total labour charges at Rs. 91,20,000/-. On the basis of these figures the labour cost comes to Rs. 11/- per cartoon and Rs.0.23 per bottle. As per the report of the Inspector the rate of sale per cartoon was Rs.348/- to 350/- which means that the per bottle rate was Rs.7.23.Therefore, the expenses of Rs. 0.23 on the goods which is saleable for Rs.7.23 is not on excessive side. The disallowance made on I.T.A. No. 319/Jodh/2023 Assessment Year: 2015-16 8 some suspicion and surmises and only for the want of the vouchers and the details is bad in law.There are two stages of the work of the assessee. First starts from loading the empty bottles on the machines. filling the bottles with the mixture, watch for impurity in the bottles caping of bottles, sealing of caps. This work is done by the contractor labour as this is the technical work the handle the machines. For this the assessee is paying Rs.6.50 per box or say Rs. 0. 1354 for 48 bottles.Second part of the work is to unload the bottles from the machine, put the glue, label, fix the label on the bottle, packing the bottles in the cartoon, putting the tapes on the boxes and putting the lables of the quality and batch Noumber on the cartoon and stacking the same in the godowns which remains under the custody of Excise department. For this work the assessee employ the daily wages labour which is not permanent because these are the simple procedure and do not require any technical knowledge. For this the appellant has appointed the supervisors, who handle the daily wages labour and pay them either in the evening, weekly or fortnightly after taking the cash from the assessee firm. In this process the estimated expenses of the assessee on the daily wages labour comes to about Rs.4.40 per cartoon or say Rs.0.09 per bottle.Out of the total labour claimed at Rs.91,20,000/- the assessee has made the payment of Rs. 54,61,534/- through the I.T.A. No. 319/Jodh/2023 Assessment Year: 2015-16 9 contractor and the rest Rs.36,58,466/- has been paid in cash. On the payment to contractors the appellant has also deducted the tax at source. In support of the contractor rates and the daily wages labour paid by supervisors, the assessee is attaching herewith the certificates issued by two contractors and two supervisors certifying the approximate rates of labour per cartoon.As regards the report of inspector which was never confronted to the assessee and so the appellant could not give his comments on the same. The use of any adverse material against the assessee without confronting the same to the assessee is bad in law and the observations and conclusion drawn by the AO may please be ignored and the appeal may please be decided on the merit of the case. 7.1 As regards the disallowance of Rs. 32,103/- made on account of Carbon Chamber the assessee submitted that the purpose of installing the carbon chamber is to smoothen the liquor whether it is country liquor or the Indian made Foreign Liquor. This improves the quality of the liquor. In the year under consideration, there was heavy demand of the liquor and the assessee was producing the liquor in full capacity and the Carbon Chamber takes some time in processing the liquor and due to demand the assessee had not time to complete this process and so in the year under consideration the Carbon Chamber was not used by the I.T.A. No. 319/Jodh/2023 Assessment Year: 2015-16 10 assessee. Merely the asset is not used the claim of depreciation cannot be denied. As regards the disallowance of claim of deprecation of @ 20 % on the car the same is not correct on the reason that the assessee submitted thatone of the partner was residing in Abohar (Punjab), a neary city of Sri Ganganagar, which is about 42 KM. from Sri Ganganagar and only one partner was in Sri Ganganagar. The work of the assessee is under the strict supervision of Excise Department and so the partner have to remain in the factory itself. There is neither the public dealing of the assessee nor there is any purchase from the local market but the partners of the assessee have to go to Jaipur, capital city of Rajasthan, for Excise work and also to Delhi from where the raw material i.e. Bottles, Capts, Spirit etc., of the assessee comes and so after that the assessee has no time for personal use of the vehicle. In view of the above it is stated that 20% disallowance on account of personal use of vehicle is on higher side and may please be reduced suitably. 7.2 As regards the disallowance of 20 % out of the total salary of Rs. 33,55,245/- wherein the ld. AO noted that there was difference in the name of the person given in the salary register and in the list of salary submitted by the appellant. Only on this ground learned AO has I.T.A. No. 319/Jodh/2023 Assessment Year: 2015-16 11 disallowed the 20% of the salary. Your good self will please appreciate that if there was any difference in the name of the employee in the salary register and in the list then he should have given even a single instance of the same. There was no difference in the name of the employees and the list of the salary paid. If there was difference in the names then the ld. AO should have made the specific addition by quoting the instance of the difference but the ld. AO has chosen the easy way to disallow flat 20% of the salary. The disallowance is based on wrong facts, by stating lie in the order and on suspicion and surmises. As far as the matter of acceptance of assessee and the AR on the order sheet is concerned it is stated that the salary register was produced in the evening of 30.12.2017 and after examining the records of the salary register and the list of the salary paid the time was about 9.30 in the night. 8. The ld DR is heard who has relied on the findings of the lower authorities and vehemently submitted that the assessee vouchers submitted shows that the signature appended is of the one person and therefore, the reliability of the same is not free from doubt. As regards the deprecation for personal use cannot be denied and when the assets being carbon chamber not used the rejection of the claim of deprecation is correct. I.T.A. No. 319/Jodh/2023 Assessment Year: 2015-16 12 9. We have heard the rival contentions and perused the material placed on record. The bench noted that in this case the assessee has challenged this appeal on three addition.First we are taking the ground no. 3 raised by the assessee challenging the addition of Rs. 36,58,466/- being the amount disallowed out of the labour wages claimed by the assessee. The brief facts relating to this ground is that the assessee has claimed a sum of Rs. 91,20,000/- as wages / labour. Out of this amount a sum of Rs. 54,61,534/- is paid through the contract labour and the paid to the contractor after deducting the applicable TDS on the said payment. Balance amount of Rs. 36,58,466/- is paid to the regular labour employed the firm and the payment of which is paid in cash. During the assessment proceeding assessee was directed to file the supporting documents in support of the claim of labour expenditure claimed. The ld. AO noted that the assessee has prepared these evidences in the overnight and looks like signed by the same person in the labour sheets. The address of the labourer is not written. The ld. AO thus disallowed the claim of labour employed by the firm for an amount of Rs. 36,58,466/-. Thus, the contention of the ld. AO while rejecting the whole labour expenditure paid by the assessee is that the vouchers seems to have been prepared over night, signature is looks like of the same person and the address of the payee is not mentioned. Against the I.T.A. No. 319/Jodh/2023 Assessment Year: 2015-16 13 disallowance the ld. AR of the assessee submitted the certificate of the supervisor stating that the nature of the work done and basis of payment of labour wages. In support of the claim the assessee submitted that the ld. AO and CIT(A) has not appreciated the fact and made the disallowance of expenses arbitrarily. Assessee submitted that nature of work done in each division, how many number of days labour worked and what is the payment per day paid to workers is submitted. This claim is further substantiated that the assessee claimed @6.25 per box of 42 bottles @ rate of Rs. 180 per day per head which is fair and reasonable claim and to this effect certificate of the supervisors were submitted. The nature of business of the assessee is labour oriented. The books of account of the assessee duly audited. The ld. AR of the assessee submitted that one carton of country liquor contains 48 bottles of 180 ML each. In the year under assessment the assessee has produced the 828266/- Cartoons or say 3,97,56,768/- bottles. On this work the assessee has claimed the total labour charges at Rs. 91,20,000/-. On the basis of these figures the labour cost comes to Rs. 11/- per cartoon and Rs.0.23 per bottle. As per the report of the Inspector the rate of sale per cartoon was Rs.348/- to 350/- which means that the per bottle rate was Rs.7.23.The bench noted that the expenses of Rs. 0.23 on the goods which is saleable for Rs.7.23 cannot be termed as excessive or I.T.A. No. 319/Jodh/2023 Assessment Year: 2015-16 14 unreasonable for want of proof. The unit is under excise supervision the entry and exit is also under control then in that case the labour expenses merely based on the similar nature of voucher cannot be denied. It is also noted by the bench that the ld. AO has allowed the whole amount labour paid through contractor and the whole amount of the assessee direct labour is not allowed merely on the ground that the voucers are seems to have been prepared and the signature seems to have been done by one person. Thus, the disallowance made on these suspicion and surmises only and nature of work and certificate of the supervisor is not disputed. Even the nature of work which is done at two stages of the work first starts from loading the empty bottles on the machines. filling the bottles with the mixture, watch for impurity in the bottles caping of bottles, sealing of caps. This work is done by the contractor labour as this is the technical work the handle the machines. For this the assessee is paying Rs.6.50 per box or say Rs. 0. 1354 for 48 bottles.Second part of the work is to unload the bottles from the machine, put the glue, label, fix the label on the bottle, packing the bottles in the cartoon, putting the tapes on the boxes and putting the lables of the quality and batch Number on the cartoon and stacking the same in the godowns which remains under the custody of Excise department. For this work the assessee employ the daily wages labour which is not permanent I.T.A. No. 319/Jodh/2023 Assessment Year: 2015-16 15 because these are the simple procedure and do not require any technical knowledge. For this the appellant has appointed the supervisors, who handle the daily wages labour and pay them either in the evening, weekly or fortnightly after taking the cash from the assessee firm. In this process the estimated expenses of the assessee on the daily wages labour comes to about Rs.4.40 per cartoon or say Rs.0.09 per bottle.Out of the total labour claimed at Rs.91,20,000/- the assessee has made the payment of Rs. 54,61,534/- through the contractor and the rest Rs.36,58,466/- has been paid in cash. On the payment to contractors the appellant has also deducted the tax at source. In support of the contractor rates and the daily wages labour paid by supervisors, the assesseesubmitted certificates issued by two contractors and two supervisors certifying the approximate rates of labour per cartoon. As regards the report of inspector which was never confronted to the assessee and therefore, the assessee could not submit their comments on the same. The use of any adverse material against the assessee without confronting the same to the assessee is bad in law and the observations and conclusion drawn by the AO cannot be used against the assessee. To drive home to the contention the ld. AR of the assessee relying on the judgement of the jurisdictional high court in the case of CIT – Jaipur II Vs. M/s. Consulting Engineering I.T.A. No. 319/Jodh/2023 Assessment Year: 2015-16 16 Group Ltd.[ DB appeal no. 301/2019 ] submitted that when the assessee has shown higher results the adhoc disallowance cannot be made. Considering the overall discussion we do not find any merit to sustain the addition and therefore, the same is directed to be deleted for an amount of Rs. 36,58,466/- and in terms of these observations the ground no. 3 raised by the assessee is allowed. 9.1 Ground no. 4 relates to the disallowance of Rs. 32,103/- made on account of Carbon Chamber, 20 % depreciation on the car used by the firm 33,478/- totalling to Rs. 65,581/-. As regards the depreciation on the Carbon Chamber the assessee submitted that the purpose of installing the carbon chamber is to smoothen the liquor whether it is country liquor or the Indian made Foreign Liquor. This improves the quality of the liquor. In the year under consideration, there was heavy demand of the liquor and the assessee was producing the liquor in full capacity and the Carbon Chamber takes some time in processing the liquor and due to demand in the market the assessee had not time to complete this process and so in the year under consideration the Carbon Chamber was not used by the assessee. Merely the asset is not used the claim of depreciation cannot be denied and there section 32 of the Act does not put such restriction on the assessee therefore, the asset which is I.T.A. No. 319/Jodh/2023 Assessment Year: 2015-16 17 installed and ready to use the claim of depreciation cannot be denied. As regards the disallowance of claim of deprecation of @ 20 % on the car the assessee submitted that one of the partner was residing in Abohar (Punjab), a neary city of Sri Ganganagar, which is about 42 KM. from Sri Ganganagar and only one partner was in Sri Ganganagar. The work of the assessee is under the strict supervision of Excise Department and so the partner have to remain in the factory itself. There is neither the public dealing of the assessee nor there is any purchase from the local market but the partners of the assessee have to go to Jaipur, capital city of Rajasthan, for Excise work and also to Delhi from where the raw material i.e. Bottles, Capts, Spirit etc., of the assessee comes and so after that the assessee has no time for personal use of the vehicle. In view of the above it is stated that 20% disallowance on account of personal use of vehicle is on higher side and may please be reduced suitably. Considering the peculiarity of the facts of the case we note that 20 % disallowance seems to be on higher side but at the same time use of car for personal purpose cannot be denied and the assessee has not submitted any affidavit of the partner denying the allegation we hold that 10 % would end the justice and therefore, out total disallowance of Rs. 65,581/- we sustain the addition of R.s 16,739/- being the 10 % of the I.T.A. No. 319/Jodh/2023 Assessment Year: 2015-16 18 deprecation instead of 20 % calculated by the ld. AO. In terms of these observations the ground no. 4 raised by the assessee is partly allowed. 9.2 Ground no. 5 relates to the disallowance of 20 % out of the total salary of Rs. 33,55,245/- wherein the ld. AO noted that there was difference in the name of the person given in the salary register and in the list of salary submitted by the appellant therefore, learned AO has disallowed the 20% of the salary. The assessee submitted that there is not a single statement that employee is not engaged in the business of the assessee but only on the reasons that the names are different. That if the reason there is no show cause notice to the assessee mentioning the alleged difference in the name of the employee in the salary register. Even the ld. AO has not mentioned any one instance in the order passed. Therefore, there is no such difference when the ld. AO accept that the list of employee were submitted and in the absence of finding about the alleged difference in the name of the employees, the claim of salary based on the list of employee be accepted. The bench noted that there is force in the arguments advanced by the assessee and obviously if there was difference in the names then the ld. AO should have made the specific addition by quoting the instance of the difference but the ld. AO has chosen the easy way to disallow flat 20% of the salary.This short I.T.A. No. 319/Jodh/2023 Assessment Year: 2015-16 19 cuts are not permitted when the claim of the assessee is duly supported by the list of employee and therefore, we see no reason to sustain the addition and we direct the ld. AO to delete the same. As regards the contention that the matter of acceptance of the assessee and the AR on the order sheet is concerned it is stated by the ld. of the assessee at bar that the salary register was produced in the evening of 30.12.2017 and after examining the records of the salary register and the list of the salary paid the time was about 9.30 in the night and therefore, they left office of the ld. AO by making the signature on a sheet which is not filled with the observation of the ld. AO. In terms of these observationwe hold that when the list of employee and their payment details were submitted merely the name of mismatches does not tantamount the addition of lump sum it disallowance but it should be specific sum to have been disallowed.To drive home to the contention the ld. AR of the assessee relying on the judgement of the jurisdictional high court in the case of CIT – Jaipur II Vs. M/s. Consulting Engineering Group Ltd.[ DB appeal no. 301/2019 ] submitted that when the assessee has shown higher results the adhoc disallowance cannot be made. Based on this observation the ground no. 5 raised by the assessee is allowed. I.T.A. No. 319/Jodh/2023 Assessment Year: 2015-16 20 9.3 Ground no. 1, 2, 6, 7, 8 & 9 being either technical, consequential or general grounds becomes infructuous as we have decided the ground on merits of the case. 10. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 13.03.2024 Sd/- Sd/- (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) Judicial Member Accountant Member Ganesh Kumar, PS (On Tour) Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order I.T.A. No. 319/Jodh/2023 Assessment Year: 2015-16 21 Date Initial 1. Draft dictated on Sr.PS/PS 2. Draft placed before author Sr.PS/PS 3. Draft proposed & placed before the Second Member JM/AM 4. Draft discussed/approved by Second Member JM/AM 5. Approved Draft comes to the Sr. P.S./P.S. Sr.PS/PS 6. Kept for pronouncement on Sr.PS/PS 7. File sent to the Bench Clerk Sr.PS/PS 8. Date on which file goes to the Head Clerk 9. Date on which file goes to the AR 10. Date of dispatch of Order