The Ess Ess Kay Engg. Co. Pvt. Ltd, Kapurthala V. The Dy. Commissioner of Income Tax, Jalandhar

ITA 34/ASR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9567 (ITAT-AMRITSAR)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 04-01-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A N MISRA
• Assessee Lawyers: R D CHATRATH
• Keywords: Business expenditure; Agreed addition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR (CAMP AT JALANDHAR) BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NO. 34(ASR)/2016 ASSESSMENT YEAR: 2011-12 ESS ESS KAY ENG. CO. PVT. LTD. KAPURTHALA. PAN: AAACE5057G VS. DY. CIT, CIRCLE IV, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. R. D. CHATRATH, RESPONDENT BY: SH. A. N. MISRA (DR) DATE OF HEARING: 22.06.2016 DATE OF PRONO UNCEMENT: 15.09.2016 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORD ER OF LEARNED CIT(A), JALANDHAR DATED 26.10.2015 FOR ASST. YEAR: 2011-12. 2. THE BRIEF FACTS AS NOTED IN THE ASSESSMENT ORDER ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURIN G OF ELECTRICAL WIRING, ELECTRICAL ACCESSORIES, METAL CLAD SWITCHES , DISTRIBUTION FUSE BOXES, ETC. DURING ASSESSMENT PROCEEDINGS, THE ASSE SSING OFFICER OBSERVED THAT ASSESSEE HAD INCURRED A HUGE EXPENSE UNDER THE HEAD OF ADVERTISEMENT & PUBLICITY EXPENSES. IT WAS ALSO OB SERVED THAT EXPENSES HAD INCREASED BY 50% AS COMPARED TO LAST YEAR WHERE AS TURNOVER HAD INCREASED BY 25% ONLY AS COMPARED TO LAST YEAR. FUR THER THE ASSESSEE DID NOT PRODUCE ALL VOUCHERS TO SUPPORT THE CLAIM OF AD VERTISEMENT & PUBLICITY EXPENSES, THEREFORE, ASSESSING OFFICER DI SALLOWED AN AMOUNT EQUIVALENT TO 10% OF THE TOTAL EXPENSES AMOUNTING T O RS.2,46,650/-. ITA NO.34 (ASR)/2016 ASST. YEA R: 2011-12 2 3. THE ASSESSING OFFICER FURTHER OBSERVED THAT ASSE SSEE HAD INCURRED AN EXPENDITURE OF RS.42,18,090/- AS BUSINESS PROMO TION EXPENSES WHICH WAS ALSO HUGE AS COMPARED TO EXPENDITURE OF R S.5,61,820/- INCURRED BY ASSESSEE IN THE EARLIER YEAR, THEREFORE , ASSESSEE WAS SHOW CAUSED TO EXPLAIN. 4. IN REPLY THE ASSESSEE SUBMITTED THAT THERE WAS A LUCKY DRAW SCHEME FOR CUSTOMER/DISTRIBUTORS FOR WHICH AN APPRO XIMATE AMOUNT OF RS.25 LACS WAS INCURRED. THE ASSESSEE, HOWEVER, DID NOT FILE ANY SUPPORTING DOCUMENTS AS REGARDS THE LUCKY DRAW SCHE ME AND IN VIEW OF THE ABOVE, THE ASSESSING OFFICER DISALLOWED AN AMOU NT OF RS.8,43,600/- BEING 20% OF TOTAL EXPENSES UNDER THIS HEAD. 5. THE ASSESSING OFFICER FURTHER OBSERVED THAT ASSE SSEE HAD INCURRED AN EXPENDITURE OF RS.16,93,189/- UNDER THE SUB HEAD SPECIAL INCENTIVES ON SALES AS COMPARED TO SIMILAR RS.31,766/- INCURR ED IN PREVIOUS YEAR AND THEREFORE, ASSESSING OFFICER OBSERVED THAT THER E WAS MORE THAN 53 TIMES INCREASE OF EXPENSES AND THEREFORE, ASSESSEE WAS SHOW CAUSED TO EXPLAIN. 6. IN REPLY, THE ASSESSEE SUBMITTED THAT SPECIAL I NCENTIVES ON SALES WAS ALLOWED TO A PARTY IN SRINAGAR FOR ACHIEVING TH E SALES TARGET AS WAS AGREED AND ALSO FILED COPY OF ACCOUNT STATEMENT. TH E ASSESSING OFFICER OBSERVED THAT IN THE ACCOUNT STATEMENT FILED BY ASS ESSEE, EXPENSES OF RS.16,07,342/- WERE DEBITED, HOWEVER, NO EVIDENCE F OR CONFIRMATION OF TARGETS FIXED, SALES EFFECTED, BILL & VOUCHERS ETC. WERE FILED AND THEREFORE, ITA NO.34 (ASR)/2016 ASST. YEA R: 2011-12 3 THE ASSESSING OFFICER AFTER ALLOWING AN AMOUNT OF R S.85,847/- AS SALES INCENTIVES TO MR. SREE GANGESH TRADING CORPORATION, JAIPUR DISALLOWED BALANCE AMOUNT OF RS.16,07,342/-. THE ASSESSING OFF ICER FURTHER OBSERVED THAT THERE WAS HUGE EXPENDITURE UNDER THE HEAD OF MISCELLANEOUS EXPENSES AND THEREFORE, ON AGREED BAS IS AND DISALLOWANCE OF RS.50,000/- WAS MADE. SIMILARLY, AGREED DISALLOW ANCE OF RS.50,000/- WAS MADE OUT OF TRAVELING ALLOWANCE AND OTHER EXPEN SES. 7. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE LEARN ED CIT(A) AND SUBMITTED VARIOUS SUBMISSIONS. THE LEARNED CIT(A) P ARTLY ALLOWED RELIEF TO THE ASSESSEE BY HOLDING AS UNDER: ADVERTISEMENT & PUBLICITY EXPESNES 10.2 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSE SSING OFFICER AS MADE BY HIM IN THE ASSESSMENT ORDER AS WELL AS WRITTEN S UBMISSIONS FILED BY THE ASSESSEE VIDE LETTER DATED 15.10.2015 IN CONNECTION WITH THE ISSUE UNDER REFERENCE. ON CAREFUL CONSIDERATION OF THE RIVAL CO NTENTIONS, IT HAS BEEN NOTICED THAT A SIMILAR ADDITION OUT OF ADVERTISEME NT & PUBLICITY EXPENSES HAS BEEN MADE IN IMMEDIATELY PRECEDING ASSESSMENT Y EAR WHICH THE ASSESSEE HAS NOT EVEN CONTESTED IN APPEAL ALTHOUGH THE ASSESSEE PREFERRED APPEAL AGAINST ASSESSMENT ORDER FOR A. Y. 2010 - 11 . MOREOVER, THE ADDITION HAS BEEN MADE ON AGREED BASIS. ALTHOUG H THE LD. AR OF THE ASSESSEE DENIED TO HAVE GIVEN ANY CONSENT FOR AGREE D ADDITION BUT LOOKING TO THE PAST HISTORY OF THE CASE, I AM OF THE CONSID ERED OPINION THAT THE ASSESSEE MUST HAVE GIVEN HIS CONSENT. MOREOVER, THE ASSESSEE FAILED TO PRODUCE RELEVANT BILLS AND VOUCHERS EVEN DURING APP ELLATE PROCEEDING. 10.3 IN VIEW OF THE ABOVE STATED FACTS AND IN THE CIRCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT THE ASSESSING OFFICE R IS FULLY JUSTIFIED IN MAKING ADDITION OF RS.2,46,650/- ON ACCOUNT OF DISA LLOWANCE OF EXPENSES OUT OF EXPENSES CLAIMED BY THE ASSESSEE UNDER THE H EAD ADVERTISEMENT & PUBLICITY EXPENSES. THE ADDITION OF RS.2,46,650/- MADE BY THE ASSESSING OFFICER IS, THEREFORE, CONFIRMED. IN THE RESULT, GR OUND NO.6 OF APPEAL TAKEN BY THE ASSESSEE IS DISMISSED. BUSINESS PROMOTION 11.2;- I HAVE CONSIDERED THE OBSERVATIONS OF THE AS SESSING OFFICER AS MADE BY HIM IN THE ASSESSMENT ORDER AS WELL AS WRITTEN S UBMISSIONS FILED BY THE ASSESSEE VIDE LETTER DATED 15.10.2015 IN CONNECTION WITH THE ISSUE UNDER REFERENCE. ON CAREFUL CONSIDERATION OF THE RIVAL CO NTENTIONS, I AM OF THE OPINION THAT THERE ARE EXPENSES DEBITED UNDER THE H EAD BUSINESS ITA NO.34 (ASR)/2016 ASST. YEA R: 2011-12 4 PROMOTION WHICH ARE NOT ALLOWABLE AS PER PROVISIONS OF SECT ION 40A (3) OF THE ACT. THE ASSESSEE HAS ALSO ADMITTEDLY CLAIMED S OME EXPENSES UNDER THIS HEAD WHICH ACTUALLY DO NOT RELATE TO THE YEAR UNDER CONSIDERATION. COMPLETE VOUCHERS IN RESPECT OF EXPENSES CLAIMED UN DER THE HEAD BUSINESS PROMOTION EXPENSES HAVE ALSO BEEN PRODUC ED BEFORE THE ASSESSING OFFICER. IN SUCH CIRCUMSTANCES, I AM ALSO OF THE OPINION THAT SOME DISALLOWANCE OUT OF EXPENSES CLAIMED BY THE ASSESSE E UNDER THE HEAD BUSINESS PROMOTION EXPENSES IS CERTAINLY CALLED FO R. HOWEVER, I AM ALSO OF THE OPINION THAT THE DISALLOWANCE MADE BY THE ASSES SING OFFICER APPEARS TO BE VERY MUCH ON THE HIGHER SIDE. IN MY FURTHER OPIN ION AND IN THE ABSENCE OF RELEVANT DETAILS, IT WILL BE FAIR AND REASONABLE IF THE DISALLOWANCE OUT OF EXPENSES CLAIMED UNDER THE HEAD BUSINESS PROMOTIO N EXPENSES IS RESTRICTED TO RS.5,00,000/-. 11.3 IN VIEW OF THE ABOVE STATED FACTS AND IN THE C IRCUMSTANCES OF THE CASE, THE DISALLOWANCE OUT OF EXPENSES CLAIMED UNDE R THE HEAD BUSINESS PROMOTION EXPENSES IS RESTRICTED TO RS.5,00,000/- AND THE BALANCE ADDITION OF RS.3,43,600/- IS DIRECTED TO BE DELETED . IN THE RESULT, GROUND NO.7 OF APPEAL TAKEN BY THE ASSESSEE IS PARTLY ALLO WED. SPECIAL INCENTIVES ON SALE EXPNES 12.2. I HAVE CONSIDERED THE OBSERVATIONS OF THE ASS ESSING OFFICER AS MADE BY HIM IN THE ASSESSMENT ORDER AS WELL AS WRITTEN S UBMISSIONS FILED BY THE ASSESSEE VIDE LETTER DATED 15.10.2015 IN CONNECTION WITH THE ISSUE UNDER REFERENCE. ON CAREFUL CONSIDERATION OF THE RIVAL CO NTENTIONS, I AM OF THE OPINION THAT THE ASSESSEE COULD NOT JUSTIFY THE SPE CIAL DISCOUNT ALLOWED TO THE SRINAGAR BASED PARTY WITH DOCUMENTARY EVIDENCE. THE FACT THAT SRINAGAR BASED PARTY HAS SHOWN IT AS INCOME WILL NO T JUSTIFY THE CLAIM OF EXPENSES. IN MY OPINION, THE ASSESSEE HAS ABSOLUTEL Y FAILED TO ESTABLISH THAT THE EXPENSES TO THE EXTENT OF ADDITION MADE AR E GENUINE BUSINESS EXPENSES. MOREOVER, RELEVANT DOCUMENTARY EVIDENCE W ITH REGARD TO CLAIM OF EXPENSES HAS NOT BEEN DURING APPELLATE PROCEEDIN GS. SIMPLY FILING COPY OF LEDGER ACCOUNT WILL NOT JUSTIFY THE CLAIM OF EXP ENSES. 12.3 IN VIEW OF THE ABOVE STATED FACTS AND IN THE C IRCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT THE A/O IS FULLY JUS TIFIED IN MAKING ADDITION OF RS16,07,342/- ON ACCOUNT OF DISALLOWANCE OF EXPE NSES OUT OF EXPENSES CLAIMED BY THE ASSESSEE UNDER THE HEAD SPECIAL INC ENTIVES ON SALES EXPENSES. THE ADDITION OF RS16,07,342/- MADE BY TH E A/O IS, THEREFORE, CONFIRMED. IN THE RESULT, GROUND NO.8 OF APPEAL TAK EN BY THE ASSESSEE IS DISMISSED. MISCELLANEOUS EXPENSES 9.2. I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSESSING OFFICER AS MADE BY HIM IN THE ASSESSMENT ORDER AS WELL AS WRITTEN S UBMISSIONS FILED BY THE ASSESSEE VIDE LETTER DATED 15.10.2015 IN CONNECTION WITH THE ISSUE UNDER REFERENCE. ON CAREFUL CONSIDERATION OF THE RIVAL CO NTENTIONS, IT HAS BEEN NOTICED THAT A SIMILAR ADDITION OUT OF MISCELLANEOUS EXPENSES HAS BEEN MADE IN IMMEDIATELY PRECEDING ASSESSMENT YEAR WHICH THE ASSESSEE HAS NOT EVEN CONTESTED IN APPEAL ALTHOUGH THE ASSES SEE PREFERRED APPEAL AGAINST ASSESSMENT ORDER FOR A. Y. 2010-11. MOREOVE R, THE ADDITION HAS ITA NO.34 (ASR)/2016 ASST. YEA R: 2011-12 5 BEEN MADE ON AGREED BASIS. ALTHOUGH THE LD. AR OF T HE ASSESSEE DENIED TO HAVE GIVEN ANY CONSENT FOR AGREED ADDITION BUT LOOK ING TO THE PAST HISTORY OF THE CASE, I AM OF THE CONSIDERED OPINION THAT TH E ASSESSEE MUST HAVE GIVEN HIS CONSENT FOR THE ADDITION. 9.3. IN VIEW OF THE ABOVE STATED FACTS AND IN T HE CIRCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT THE ASSESSING OFFICE R IS FULLY JUSTIFIED IN MAKING ADDITION OF RS50,000/- ON ACCOUNT OF DISALLO WANCE OF EXPENSES OUT OF EXPENSES CLAIMED BY THE ASSESSEE UNDER THE HEAD MISCELLANEOUS EXPENSES. THE ADDITION OF RS.50,000/- MADE BY THE ASSESSING OFFICER IS, THEREFORE, CONFIRMED. IN THE RESULT, GROUND NO.5 OF APPEAL TAKEN BY THE ASSESSEE IS DISMISSED. TA EXPENSES (OTHERS) 8.2:- I HAVE CONSIDERED THE OBSERVATIONS OF THE ASS ESSING OFFICER AS MADE BY HIM IN THE ASSESSMENT ORDER AS WELL AS WRITTEN S UBMISSIONS FILED BY THE ASSESSEE VIDE LETTER DATED 15.10.2015 IN CONNECTION WITH THE ISSUE UNDER REFERENCE. ON CAREFUL CONSIDERATION OF THE RIVAL CO NTENTIONS, IT HAS BEEN NOTICED THAT A SIMILAR ADDITION OUT OF TA EXPENSES HAS ALSO BEEN MADE IN IMMEDIATELY PRECEDING ASSESSMENT YEAR AND THE SAME HAS NOT EVEN CONTESTED IN APPEAL ALTHOUGH AN APPEAL HAS BEEN PRE FERRED AGAINST ASSESSMENT ORDER FOR A.Y.2010-11. MOREOVER, THE ADD ITION HAS BEEN MADE ON AGREED BASIS. ALTHOUGH THE LD. AR OF THE ASSESSE E DENIED TO HAVE GIVEN ANY CONSENT FOR AGREED ADDITION BUT LOOKING TO THE PAST HISTORY OF THE CASE, I AM OF THE CONSIDERED OPINION THAT THE ASSESSEE MU ST HAVE GIVEN HIS CONSENT FOR THE ADDITION. 8.3 IN VIEW OF THE ABOVE STATED FACTS AND IN THE CI RCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT THE ASSESSING OFFICER IS F ULLY JUSTIFIED IN MAKING ADDITION OF RS 50,000/- ON ACCOUNT OF DISALLOWANCE OF EXPENSES OUT OF EXPENSES CLAIMED BY THE ASSESSEE UNDER THE HEAD TA EXPENSES. THE ADDITION OF RS 50,000/- MADE BY THE ASSESSING OFFIC ER IS, THEREFORE, CONFIRMED. IN THE RESULT, GROUND NO. 4 OF APPEAL TA KEN BY THE ASSESSEE IS DISMISSED. 8. AGGRIEVED WITH THE ORDER OF LEARNED CIT(A) THE A SSESSEE IS IN APPEAL BEFORE US. 9. AT THE OUTSET, THE LEARNED AR INVITED OUR ATTENT ION TO THE WRITTEN SUBMISSIONS AGAINST THE DISALLOWANCES SUSTAINED BY LEARNED CIT(A). IN RESPECT OF DISALLOWANCE OUT OF ADVERTISEMENT AND P UBLICITY EXPENSES THE LEARNED CIT(A) HAS PARTLY CONFIRMED THE ADDITION ON THE BASIS OF THAT ASSESSEE HAD GIVEN CONSENT FOR THE SAME. IT WAS ALS O SUBMITTED THAT LEARNED CIT(A) HAS ALSO HELD THAT SIMILAR ADDITION WAS MADE IN THE ITA NO.34 (ASR)/2016 ASST. YEA R: 2011-12 6 PRECEDING YEAR AND WHICH THE ASSESSEE HAD NOT CONTE STED. THE LEARNED AR SUBMITTED THAT ADDITION DUE TO ARBITRARY DISALLO WANCE CANNOT BE BASED ON THE PREVIOUS YEAR HISTORY AND FURTHER NO C ONSENT WAS GIVEN BY ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING S AND THEREFORE, IT WAS PRAYED THAT THE ADDITIONS SUSTAINED BY LEARNED CIT(A) BE DELETED. 10. AS REGARDS DISALLOWANCE OUT OF BUSINESS PROMOT ION EXPENSES, THE LEARNED AR SUBMITTED THAT COMPLETE DETAILS REGARDIN G LUCKY DRAW SCHEME WAS FURNISHED DURING ASSESSMENT PROCEEDINGS ALONG W ITH VOUCHERS, BILLS AND COMPLETE DETAILS REGARDING NAME AND ADDRESSES O F THE PARTIES WHO WERE BENEFICIARIES OF THE SCHEME WERE FILED. IT WA S FURTHER SUBMITTED THAT PARTIES HAS BEEN GIVEN CREDIT NOTES IN THEIR ACCOUN TS AND MOREOVER, CREDIT NOTES WERE DISTRIBUTED TO THE BENEFICIARIES. THE LEARNED AR IN THIS RESPECT INVITED OUR ATTENTION TO (PB-5) AND IN VIEW OF THE ABOVE, IT WAS SUBMITTED THAT DISALLOWANCE SUSTAINED BY LEARNED CI T(A) BE DELETED. 11. AS REGARDS THE CONFIRMATION OF DISALLOWANCE TO THE EXTENT OF RS.16,07,342/- ON ACCOUNT OF INCENTIVE SALES GIVE N TO M/S ALI MOHD. BABA & SONS SRINGAR. IT WAS SUBMITTED THAT CREDIT N OTE GIVEN TO PARTY IS PLACED AT (PB-26) WHICH IS SUFFICIENT PROOF OF EXPE NSES INCREASED BY ASSESSE AND THEREFORE, IT WAS PRAYED THAT THE ADDIT IONS SUSTAINED WERE WITHOUT CONSIDERING THE FACTS. THE INCENTIVE WAS GI VEN FOR THE SALES MADE IN ASST. YEARS 2008-09 & 2009-10 BUT ASSESSEE SETTL ED THE SAID CLAIM IN THE YEAR UNDER ASSESSMENT AND THEREFORE, IT WAS BOO KED IN THIS YEAR ONLY. ITA NO.34 (ASR)/2016 ASST. YEA R: 2011-12 7 12. AS REGARDS DISALLOWANCE OF RS.50,000/- OUT OF M ISC. EXPESNES & TRAVELING EXPENSES, THE LEARNED AR SUBMITTED THAT L EARNED CIT(A) HAS JUST FOLLOWED THE FINDINGS OF AO AND AGAIN MENTIONE D THAT ASSESEE HAD NOT CONCURED FOR ADDITION. IN VIEW OF THE ABOVE, IT WAS SUBMITTED THAT THE SAME MAY BE DELETED. 13. THE LEARNED DR, ON THE OTHER HAND, HEAVILY PLAC ED HIS RELIANCE ON THE ORDER OF LEARNED CIT(A). 14. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT AS REGARDS THE FIRST ADDITION SUSTAINED BY LEARNED CIT(A) OUT OF ADVERTISEMENT A ND PUBLICITY EXPENSES, THE LEARNED CIT(A) HAS MADE A FINDING TH AT ASSESSEE HAD FAILED TO PRODUCE RELEVANT BILLS AND VOUCHERS EVEN DURING APPELLATE PROCEEDINGS AND FURTHER HE HAS HELD THAT IN THE IMM EDIATE PRECEDING ASSESSMENT YEAR SIMILAR ADDITION WAS MADE AND ASSES SEE HAD NOT EVEN CONTESTED IN APPEAL. WE ALSO FIND THAT ASSESSING O FFICER HAS NOTED IN HIS ASSESSMENT ORDER THAT FEW OF THE EXPENSES RELATED T O YEAR 2008 AND ALSO HAS NOTED THAT VOUCHERS FOR CERTAIN EXPENSES WERE P RODUCED FOR VERIFICATION. EVEN BEFORE LEARNED CIT(A) THE SAME W ERE NOT PRODUCED AND EVEN BEFORE US NO MENTION REGARDING AVAILABILITY OF VOUCHERS WAS MADE. WE FIND THAT ASSESSING OFFICER HAD MADE A MODEST DI SALLOWANCE EQUIVALENT TO 10% OF TOTAL EXPENSES INCURRED UNDER THIS HEAD AND LEARNED CIT(A) HAS CONFIRMED THE SAME HOLDING THAT NO VOUCH ERS WERE PRODUCED, THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDE R OF LEARNED CIT(A). IN ITA NO.34 (ASR)/2016 ASST. YEA R: 2011-12 8 VIEW OF THE ABOVE, WE CONFIRM THE ORDER OF LEARNED CIT(A) TO THIS EXTENT AND THEREFORE, GROUND NO.1 OF APPEAL IS DISMISSED. 15. AS REGARDS GROUND NO.2 REGARDING SUSTENANCE OF DISALLOWANCE OF 5 LACS OUT OF DISALLOWANCE OF RS.8,43,600/- WE FIND T HAT THE MAJOR EXPENDITURE UNDER THIS HEAD WAS ON ACCOUNT OF A LUC KY DRAW SCHEME FOR WHICH AN EXPENDITURE OF RS.25 LACS WAS INCURRED AN D WHICH WAS DEBITED ON 31.3.2011 I.E. ON THE LAST DATE OF FINANCIAL YEA R. WE FURTHER FIND THAT A FEW OF THE EXPENSES INCURRED UNDER THIS HEAD RELA TED TO THE YEARS 2008- 09. WE FIND THAT NO SUPPORTING VOUCHERS WITH REGARD TO LUCKY DRAW SCHEME OF RS.25 LACS WAS FILED. IN VIEW OF THE ABOV E FACTS AND CIRCUMSTANCES, WE HOLD THAT LEARNED CIT(A) HAS RIGH TLY CONFIRMED A DISALLOWANCE OF RS.5 LACS OUT OF TOTAL DISALLOWANCE OF RS.8,43,600/- AND THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDE R OF LEARNED CIT(A) TO THIS EXTENT AND IN VIEW OF THE ABOVE, GROUND NO.2 I S ALSO DISMISSED. 16. AS REGARDS GROUND NO.3 RELATING TO ADDITION ON ACCOUNT OF INCENTIVE ON SALES GIVEN TO M/S ALI MOHAMMAD BABA, SRINAGAR AMOUNTING TO RS.16,07,342/-, WE FIND THAT ASSESSEE AT PAGE 26 HAS FILED A COPY OF CREDIT NOTE ISSUED IN FAVOUR OF THE ABOVE SAID PARTY. THE CREDIT NOTE REFLECTS THE SPECIAL INCENTIVES @ 4% AND SP ECIAL EXTRA INCENTIVE @ 1.5% ON THE SALES MADE BY THE ABOVE PARTIES IN FINA NCIAL YEARS:2008-09 & 2009-10. THE LEARNED CIT(A) HAS HELD THAT DOCUMEN TARY EVIDENCE WITH REGARD TO EXPENSES HAS NOT BEEN PRODUCED DURING APP ELLATE PROCEEDINGS, HOWEVER, WE FIND THAT THE CREDIT NOTE WAS ISSUED TO THE RELEVANT PARTY, ITA NO.34 (ASR)/2016 ASST. YEA R: 2011-12 9 THEREFORE WE DEEM IT APPROPRIATE TO REMIT THIS ISSU E BACK TO THE OFFICE OF ASSESSING OFFICER WHO WILL EXAMINE THE CLAIM OF ASS ESSEE AND WILL DETERMINE THE AMOUNT OF DISALLOWANCE IF ANY. IN VIE W OF THE ABOVE, GROUND NO.3 IS ALLOWED FOR STATISTICAL PURPOSES. 17. AS REGARDS GROUND NOS. 4 & 5, WE FIND THAT ASSE SSING OFFICER HAD MADE A MODEST DISALLOWANCE OF RS.50,000/- EACH OUT OF MISCELLANEOUS EXPENSES OF RS.32,46,788/- AND OUT OF TRAVELING EXP ENSES TO THE TUNE OF RS.72,59,104/-. THE ABOVE DISALLOWANCE WERE MADE FO R NOT HAVING PROPER DETAILS AND FOR WHICH BEFORE US ALSO AND BEF ORE LEARNED CIT(A) ALSO NOTHING WAS FILED. IN VIEW OF THE ABOVE, GROUND NOS . 4&5 ARE ALSO DISMISSED. 18. IN NUTSHELL, THE APPEAL FILED BY THE ASSESSEE I S PARTLY DISMISSED AND PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15 .09.2016. SD/- SD/- (A.D. JAIN) ( T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED: 15.09.2016. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER