Sh.Daljit Singh Prop., Patiala V. ITO, Patiala

ITA 360/CHANDI/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60911 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 03-07-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 06-04-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Assessee Lawyers: AMRINDER SINGH
• Keywords: Business income; Source of fund; Corroborative evidences
• Section: 142(1); 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE, VICE PRESIDENT AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 360/CHD/2010 ASSESSMENT YEAR: 2006-07 SHRI DALJIT SINGH, VS THE ITO, WARD-1, PROP M/S BHASIN PHARMACEUTICALS, PATIALA PATIALA PAN NO. ATGPS4863A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AMRINDER SINGH RESPONDENT BY : SHRI N.K. SAINI DATE OF HEARING : 04.07.2012 DATE OF PRONOUNCEMENT : 05.07.2012 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A), PATIALA DATED 9.2.2010 RELATING TO ASSESSME NT YEAR 2006-07. 2. GROUND NO.1 OF THE APPEAL IS GENERAL IN NATURE A ND HENCE NO COMMENCES ARE BEING GIVEN. 3. GROUND NO.2 OF THE APPEAL READS AS UNDER:- 2 (A) THAT IN THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE ID. COMMISSIONER OF INCOME TAX (APPEALS) GRAVELLY 2 ERRED IN SUSTAINING THE ADDITION OF RS. 4,70,000/- OUT OF TOTAL ADDITION OF RS. 9,40,000/- MADE BY THE ID. ASSESSING OFFICER ON ACCOUNT OF ALLEGED BOGUS PURCH ASE. THE ADDITION IS WITHOUT ANY BASIS AND HAS BEEN MADE ON THE BASIS OF SURMISES, SUPPOSITION AND CONJECTURES, WHICH DESERVES TO BE DELETED. B) THAT WITHOUT PREJUDICE THE ADDITION SUSTAINED I S HIGHLY EXCESSIVE. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS A WHOLE SALE TRADER IN MEDICINES AND HAS FILED HIS RETURN O F INCOME AT RS. 88,583/- ON 31.10.2006. THE CASE WAS SELECTED FOR SCRUTINY AN D NOTICE U/S 143(2) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') WAS ISSUE D TO THE ASSESSEE. THE ASSESSEE DID NOT RESPOND TO THE ABOVE NOTICE. FURT HER, NOTICE U/S 143(2) / 142(1) OF THE ACT DATED 31.5.2008 ALONG WITH QUESTI ONNAIRE WERE ISSUED AND SERVED UPON THE ASSESSEE. DESPITE THE SERVICE OF A BOVE NOTICES, THE ASSESSEE DID NOT ATTEND THE HEARINGS BEFORE THE ASSESSING OF FICER. AGAIN LETTERS DATED 1.9.2008 AND 17.9.2008 WERE ALSO ISSUED TO THE ASSE SSEE. THE ASSESSEE DID NOT APPEAR BEFORE THE ASSESSING OFFICER. IN THE AB OVE CIRCUMSTANCES, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143( 3) READ WITH SECTION 144 OF THE ACT ON 11.12.2008. THE ASSESSING OFFICER MA DE THE ADDITION OF RS. 9,40,000/- OBSERVING AS UNDER:- 3) AS THE ADDITIONAL SALES HAS BEEN ESTIMATED AT R S. 10,00,000/-, CORRESPONDING PURCHASE FIGURE WILL ALSO HAVE TO BE ENHANCED TO AFFECT THE ADDITIONAL SALES OF RS. 10.00.000/-. AGAIN, IT IS T O MENTION HERE THAT THE BOOKS OF ACCOUNTS HAVE NOT BEEN PRODUCED AND AFTER REDUCING THE GROSS PROFIT OF RS. 60,000/- ESTIMATED ABOVE ADDITIONAL PURCHASES WOULD COME TO RS. 9,40,000/- WHICH HAVE BEEN MADE OUTSIDE THE BOO KS OF ACCOUNT. THEREFORE, AN ADDITION OF THE LIKE AMOUNT I.E. RS. 9.40.000/- IS BEING MADE. 3 4. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). IN THE COURSE OF APPELLATE PROCEEDINGS, THE CIT(A) CALLED FOR A REMAND REPORT FROM THE ASSE SSING OFFICER. THE ASSESSING OFFICER VIDE REMAND REPORT DATED 28.11.20 09 STATED THAT THE ASSESSEE DID NOT PRODUCE BOOKS OF ACCOUNT DURING TH E ASSESSMENT PROCEEDINGS AS WELL AS BEFORE HIM ON THE PLEA THAT THE BOOKS OF ACCOUNT HAVE BEEN LOST AND HAS FILED COPY OF DDR DATED 4.12.2008. THE ASS ESSING OFFICER FURTHER STATED THAT THE ASSESSEE WAS ASKED TO PRODUCE ANY O THER DOCUMENT TO SUBSTANTIATE HIS CLAIM REGARDING GROSS PROFIT AND G ENUINENESS OF PURCHASES. THE ASSESSING OFFICER HAS STATED IN HIS REPORT THAT THE ASSESSEE FILED CERTIFIED COPIES FROM SALES TAX DEPARTMENT OF QUARTERLY SALE TAX RETURNS IN SUPPORT OF HIS CLAIM OF PURCHASES AND SALES MADE DURING THE YE AR. THE ASSESSING OFFICER HAS FURTHER STATED THAT AS PER CERTIFIED CO PIES OF QUARTERLY SALE TAX RETURNS, PURCHASES / SALES SHOWN BY THE ASSESSEE TA LLY WITH THE FIGURE IN THE BALANCE SHEET AS ON 31.3.2006. FURTHER, THE ASSESS ING OFFICER MENTIONED IN THE REPORT THAT THE ASSESSEE DID NOT PRODUCE THE BO OKS OF ACCOUNT AND THE LIST OF SUNDRY CREDITORS OR BASIS OF VALUATION OF STOCK ETC. AND, THEREFORE, THE ASSESSING OFFICER OPINED THAT IT IS EVERY LIKELIHOO D THAT THE ASSESSEE MIGHT HAVE INTRODUCED SOME BOGUS CREDITORS WHICH REMAINED UNVERIFIABLE IN THE ABSENCE OF DETAILS OF SUCH CREDITORS. 5. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITION OF RS. 4,70,000/- OBSERVING AS UNDER:- 4 4.6 I HAVE GONE THROUGH THE FACTS OF THE CASE, ASS ESSMENT ORDER, REMAND REPORT AS WELL AS SUBMISSIONS OF THE ID. COUNSEL OF THE ASSESSEE. I HAVE ALSO HEARD THE ARGUMENTS OF APPELL ANT'S COUNSEL AS WELL AS THE A.O. WHO ATTENDED THE APPEAL PROCEE DINGS. THE ARGUMENTS OF THE COUNSEL OF THE ASSESSEE HAVE FORCE . BUT AT THE SAME TIME, THERE IS NOTHING TO DENY THE FACT THAT ASSESS EE HAS NOT PRODUCED BOOKS OF ACCOUNT BEFORE ME OR BEFORE THE A.O. AND O F UNACCOUNTED SALES AND PURCHASES CAN NOT BE RULED OUT FULLY. HEN CE, AFTER- CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE I CONFIRM THE ADDITION OF RS. 4,70,000/-ON ACCOUNT OF BOGUS PURCH ASES AND RS.30000-/- ON ACCOUNT OF GROSS PROFIT OUT OF ADDIT ION OF RS. 10,00,000/- AND CONSEQUENTLY ASSESSEE GETS PART REL IEF OF RS. 5,00,000/-. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIALS AVAILABLE ON RECORD. WE HAVE ALSO PERUSE D THE REMAND REPORT DATED 28.11.2009 SUBMITTED BY THE ASSESSING OFFICER BEFOR E THE CIT(A). IN THE REMAND REPORT, THE ASSESSING OFFICER HAS CLEARLY ME NTIONED THAT THE ASSESSEE HAS PRODUCED THE CERTIFIED COPIES FROM THE SALES T AX DEPARTMENT OF QUARTERLY SALE TAX RETURNS IN SUPPORT OF HIS CLAIM OF PURCHAS ES / SALES MADE DURING THE YEAR. THE ASSESSING OFFICER FURTHER OBSERVED THAT IN THE QUARTERLY SALES TAX RETURNS, THE ASSESSEE HAS SHOWN SALES OF RS. 50,05, 936/- I.E. SALE FIGURE SHOWN IN THE TRADING PROFIT AND LOSS ACCOUNT FILED BY THE ASSESSEE AS ON 31.3.2006. HOWEVER, THE FACT REMAINS THAT ASSESSEE DID NOT PRO DUCE BOOKS OF ACCOUNT BEFORE THE CIT(A) OF BEFORE THE ASSESSING OFFICER A ND POSSIBILITY OF UNACCOUNTED SALES AND PURCHASES CANNOT BE RULED OUT FULLY. IN THE REMAND REPORT, THE ASSESSING OFFICER HAS ALSO MENTIONED TH AT IN THE AUDIT REPORT THE AUDITOR HAS MENTIONED THAT THE ASSESSEE HAS NOT MAI NTAINED ANY STOCK REGISTER OR QUANTITATIVE STOCK TALLY AND HAS ALSO NOT PRODUC ED BOOKS OF ACCOUNT, IN THE 5 ABSENCE OF WHICH, THE TRADING RESULTS SHOWN BY THE ASSESSEE CANNOT BE ACCEPTED AND GP AND TURN OVER OF THE ASSESSEE NEEDS TO BE ENHANCED ACCORDINGLY. THE ASSESSING OFFICER HAS ALSO MENTIO NED IN THE REMAND REPORT THAT AS PER THE BALANCE SHEET OF THE ASSESSEE, THE FIGURE OF CLOSING STOCK WAS AT RS. 5599630.70 AND SUNDRY CREDITORS WERE SHOWN A T RS. 4024369.77. THE ASSESSING OFFICER HAS CATEGORICALLY STATED THAT THE LIST OF SUNDRY CREDITORS WAS NOT FURNISHED ALONG WITH THE BALANCE SHEET. DU RING THE REMAND PROCEEDINGS, THE ASSESSING OFFICER ASKED THE ASSESS EE TO SUPPLY A LIST OF SUNDRY CREDITORS SO AS TO VERIFY THE GENUINENESS OF CREDITORS SHOWN IN THE BALANCE SHEET. HOWEVER, THE ASSESSEE HAD SHOWN HIS INABILITY TO FILE THE SAME. IT IS OBSERVED THAT THE ASSESSING OFFICER HAS ESTIM ATED THE ADDITIONAL PURCHASES AT RS. 9,40,000/- WITHOUT BRINGING ANY MA TERIAL ON RECORD. AT THE SAME TIME, THERE IS NO SATISFACTORY EXPLANATION ON BEHALF OF THE ASSESSEE REGARDING THE DISCREPANCIES POINTED OUT BY THE ASSE SSING OFFICER IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE ARE OF THE VIEW, THAT THE ADDI TION OF RS. 85,000/- WILL MEET THE ENDS OF JUSTICE. WE MAY OBSERVE HERE THAT THE ADDITION SUSTAINED BY THE CIT(A) IS DEFINITELY ON HIGHER SIDE. THUS, THE ASSESSEE GETS A FURTHER RELIEF OF RS. 3,85,000/- ON THIS COUNT. GROUND N O.2 OF THE APPEALS IS ALLOWED PARTLY. 7. GROUND NO.3 OF THE APPEAL READS AS UNDER:- 3 (A) THAT IN THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE ID. COMMISSIONER OF INCOME TAX (APPEALS) GRAVELLY ERRED IN SUSTAINING THE ADDITION OF RS. 30,000/- OUT OF TOTA L ADDITION OF RS. 60,000/- MADE BY THE ID. ASSESSING OFFICER ON A CCOUNT OF GROSS PROFIT. THE ADDITION IS WITHOUT ANY BASIS AND HAS BEEN MADE ON THE BASIS OF SURMISES, SUPPOSITION AND CONJ ECTURES, WHICH DESERVES TO BE DELETED. 6 B) THAT WITHOUT PREJUDICE THE ADDITION SUSTAINED I S HIGHLY EXCESSIVE. 8. THE ASSESSING OFFICER MADE THE ADDITION OF RS. 6 0,000/- ON ACCOUNT OF ADDITIONAL GROSS PROFIT. THE ASSESSEE DECLARED TOTA L SALES OF MEDICINES AT RS. 50,05,936/- ON WHICH GP OF RS. 3,25,400/- WAS SHOWN . ACCORDING TO ASSESSING OFFICER, THE GP RATE SHOWN IS SLIGHTLY ON THE HIGHER SIDE WHEN COMPARED TO THE GP RATE OF PRECEDING YEAR. SINCE T HE BOOKS OF ACCOUNT WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER, HE, THER EFORE, ESTIMATED THE SALES AT RS. 60,05,936/- ON WHICH GROSS PROFIT WAS WORKED OUT AT RS. 60,000/-. THE ASSESSING OFFICER ADDED A SUM OF RS. 60,000/- T O THE TOTAL INCOME OF THE ASSESSEE. 9. ON APPEAL, THE CIT(A) SUSTAINED THE ADDITION OF RS. 30,000/- OUT OF TOTAL ADDITION OF RS. 60,000/- MADE BY THE ASSESSIN G OFFICER ON ACCOUNT OF GROSS PROFIT. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS. IN PARA 2 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER OBSERVED THAT THE GP R ATE SHOWN AT RS. 3,25,400/- ON THE TOTAL SALES OF RS. 50,05,936/- IS SLIGHTLY ON HIGHER SIDE WHEN COMPARED TO GP RATE OF THE PRECEDING YEAR. HO WEVER, THE FACT REMAINS THAT THE ASSESSEE DID NOT PRODUCE THE BOOKS OF ACCO UNT. THUS, THE SALES AFFECTED / SHOWN ARE NOT SUBJECT TO VERIFICATION. AT THE SAME TIME, WE MAY ALSO OBSERVE THAT THE ADDITION SUSTAINED BY THE CIT (A) APPEARS TO BE ON HIGHER SIDE. CONSIDERING THE ENTIRE FACTS AND CIRC UMSTANCES OF THE PRESENT CASE, WE REDUCE THE ADDITION TO RS. 15,000/- PARTIC ULARLY WHEN THE SALES 7 AFFECTED / SHOWN ARE NOT SUBJECT TO VERIFICATION. THUS, THE ASSESSEE GETS A FURTHER RELIEF OF RS. 15,000/- ON THIS ACCOUNT. GR OUND NO.3 OF THE APPEAL IS ALLOWED PARTLY. 11. GROUND NO.4 OF THE APPEAL READS AS UNDER:- 4 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E ID. COMMISSIONER OF INCOME TAX (APPEALS) GRAVELLY ERRED IN UPHOLDING THE ADDITION OF RS. 1,15,000/- MADE BY THE ID. ASSESSING OFFICER BY TREATING THE UNSECURED LOAN AS NON-GENUINE, ALTHOUGH THE ASSESSE E HAD PROVED THE IDENTITY, MODE OF TRANSACTION AND CREDIT WORTHINESS OF THE PERSON FROM WHOM HE HAD TAKEN LOAN. 12. THE ASSESSING OFFICER HAS DISCUSSED THIS ISSUE IN PARA 4 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER OBSERVED TH AT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS INTRODUCED TWO UNSE CURED LOANS OF RS. 2,33,000/- FROM SHRI HARBANS SINGH AND SMT. SURJI T KAUR. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO PROVE THE GENUINEN ESS OF THESE LOANS. HOWEVER, NONE OF THEM WAS PRODUCED BEFORE THE ASSES SING OFFICER. EVEN THE ASSESSEE HAS FAILED TO FURNISH ANY CONFIRMATION FROM THESE CREDITORS. THE ASSESSING OFFICER, THEREFORE, MADE AN ADDITION OF R S. 2,33,000/- AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 13. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, TH E ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). IN THE COURSE OF APPELLATE PROCEEDINGS, THE CIT(A) CALLED FOR REMAND REPORT FROM THE ASSES SING OFFICER. THE ASSESSING OFFICER VIDE HIS REMAND REPORT DATED 28.1 1.2009, STATED THAT THE ASSESSEE HAS RECEIVED UNSECURED LOANS OF RS. 1,15,0 00/- FROM SHRI HARBANS SINGH DURING THE PREVIOUS YEAR RELEVANT TO ASSESSME NT YEAR 2006-07. THE 8 ASSESSING OFFICER FURTHER STATED THAT THE BALANCE A MOUNT OF RS. 1,18,000/- PERTAIN TO EARLIER YEARS AND NO ADDITION IS REQUIRE D TO MADE IN THIS YEAR. 14. THE CIT(A) ALLOWED A RELIEF OF RS. 1,18,000/- A ND CONFIRMED THE ADDITION OF RS. 1,15,000/- BEING ALLEGED UNSECURED LOAN RECEIVED BY ASSESSEE FROM SHRI HARBANS SINGH. 15. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE DISPU TED ADDITION HAS BEEN MADE U/S 68 OF THE ACT. IT IS A WELL SETTLED PRINC IPLE OF LAW THAT U/S 68 OF THE ACT, IF ANY AMOUNT IS FOUND CREDITED IN THE BOOKS O F ACCOUNT OF THE ASSESSEE, THE BURDEN LIES UPON THE ASSESSEE TO PROVE ITS NATU RE AND SOURCE. WHILE PROVING THE SAME, THE ASSESSEE HAS TO PROVE THE IDE NTITY OF THE PERSON, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE PERSON, WHO HAS GIVEN MONEY. IN THE INSTANT CASE, THERE IS NO DISPU TE REGARDING THE IDENTITY OF THE PERSON, WHO HAS GIVEN THE MONEY. ADMITTEDLY, SH RI HARBANS SINGH IS THE FATHER OF THE ASSESSEE, WHO IS REGULARLY ASSESSED T O TAX. IT IS ALSO CLEAR FROM THE REMAND REPORT THAT LOANS OF RS. 1 LAC RECEIVED BY THE ASSESSEE FROM SHRI HARBANS SINGH AND RS. 18,000/- FROM HIS MOTHER SMT. SURJIT KAUR HAVE BEEN ACCEPTED BY THE ASSESSING OFFICER STATING THAT THES E LOANS PERTAIN TO EARLIER YEAR. THUS, IT IS CLEAR THAT IN EARLIER YEAR, THE D EPARTMENT HAS NOT DOUBTED THE CREDITWORTHINESS OF SHRI HARBANS SINGH IN ADVANCIN G THE LOAN OF RS. 1 LAC. SIMILARLY, THE DEPARTMENT HAS NOT DOUBTED THE GENUI NENESS OF THE TRANSACTION IN EARLIER YEARS. IN THE YEAR UNDER CONSIDERATION, THE ASSESSEE FURNISHED A DECLARATION OF SHRI HARBANS SINGH, WHEREIN HE HAS CONFIRMED HAVING GIVEN UNSECURED LOANS OF RS. 1,15,000/- TO THE ASSESSEE F ROM HIS OWN SOURCES OF INCOME. A COPY OF THE SAVING BANK ACCOUNT NO. 3015 314 OF SHRI HARBANS 9 SINGH WITH OBC WAS ALSO FILED BEFORE THE LOWER AUTH ORITIES. AS PER THE SAID COPY, SHRI HARBANS SINGH HAD WITHDRAWN RS. 50,000/- AND RS. 65,000/- ON 7.11.2005 AND 2.1.2006 RESPECTIVELY. THE CONTENTION OF THE ASSESSEE BEFORE THE LOWER AUTHORITIES WAS THAT THESE FUNDS WERE USE D BY SHRI HARBANS SINGH FOR PURCHASING DEMAND DRAFTS DIRECTLY FROM THE BANK IN FAVOUR OF THE SUPPLIER OF THE ASSESSEE TO MEET FINANCIAL EMERGENCY OF THE ASSESSEE. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, THERE IS NO MERIT IN THE CONTENTION OF THE LD. DR THAT AMOUNT OF RS. 50,000/ - AND RS. 65,000/- WITHDRAWN BY SHRI HARBANS SINGH DO NOT FIGURE IN TH E BANK ACCOUNT OF THE ASSESSEE AND, HENCE, THE ASSESSEE HAS FAILED TO PRO VE THE GENUINENESS OF THE TRANSACTION. IN VIEW OF THE ABOVE, THE ADDITION OF RS. 1,15,000/ - MADE BY THE ASSESSING OFFICER AND CONFIRMED THE CIT(A) DESERVES TO BE DELETED. ACCORDINGLY, WE DELETE THE ADDITION OF RS. 1,15,000 /- AND ALLOW GROUND NO.4 OF THE APPEAL. 16. GROUND NO.5 OF THE APPEAL READS AS UNDER:- 5 ( A) THAT THE ID. COMMISSIONER OF INCOME TAX (APPEAL S) GRAVELLY ERRED IN UPHOLDING THE DISALLOWANCE OF RS. 75,000/- MADE BY THE ID. ASSESSING OFFICER OUT OF EXPENSES INCURRED BY THE ASSESSEE FOR THE PURPOSE O F BUSINESS, B) THAT WITHOUT PREJUDICE THE ADDITION SUSTAINED I S HIGHLY EXCESSIVE. 17. THE ASSESSING OFFICER HAS DISCUSSED THIS ISSUE IN PARA 5 OF THE ASSESSMENT ORDER. ACCORDING TO ASSESSING OFFICER, IN THE PROFIT AND LOSS ACCOUNT, THE ASSESSEE HAS BOOKED A NUMBER OF EXPEN SES LIKE DISCOUNT OF RS. 10 56,433/-, PETROL EXPENSES OF RS. 16,906/-, SALARIES AMOUNTING TO RS. 52,000/- AND TELEPHONE EXPENSES OF RS. 15,435/- AGGREGATING TO RS. 1,40,774/-. THE ASSESSING OFFICER DISALLOWED A SUM OF RS. 75,000/- FOR WANT OF BILLS AND VOUCHERS. 18. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITION OF RS. 75,000/- AND, HENCE, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L. 19. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE AL SO PERUSED THE MATERIALS AVAILABLE ON RECORD. SHRI AMRINDER SINGH , LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. ON THE OTHER HAND, SHRI N.K. SAINI, LD. DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 20. IN THE INSTANT CASE, THE IMPUGNED ADDITION HAS BEEN MADE FOR WANT OF VOUCHERS. THE ASSESSEE COULD NOT PRODUCE THE VOUCH ERS AS THESE WERE LOST. HOWEVER, SHRI AMRINDER SINGH, LD. COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE EXPENSES IN QUESTION HAVE BEEN INCURRED EXCLUSI VELY FOR THE PURPOSE OF BUSINESS AND, HENCE, NO DISALLOWANCE IS REQUIRED TO BE MADE. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS MADE AD HO C DISALLOWANCE WHICH IS WITHOUT ANY BASIS. IN OUR OPINION, IT IS TRUE THAT NO BUSINESS CAN BE CARRIED OUT WITHOUT INCURRING ANY EXPENSES. ADMITTEDLY, THE EXPENSES IN QUESTION RELATE TO PETROL, SALARIES, TELEPHONE ETC. THESE E XPENSES ARE NECESSARY FOR SMOOTH RUNNING OF A BUSINESS. HOWEVER, AS PER LAW, THE ASSESSEE WAS REQUIRED TO PRODUCE SUPPORTING EVIDENCE TO CLAIM TH ESE EXPENSES. IN THE ABSENCE OF SUCH EVIDENCE, DISALLOWANCE OF CERTAIN A MOUNT IS REQUIRED TO BE 11 MADE. HOWEVER, WE FIND THAT AD HOC DISALLOWANCE OF RS. 75,000/- MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) IS DE FINITELY ON HIGHER SIDE. TO MEET THE ENDS OF JUSTICE, WE REDUCE THE DISALLOW ANCE TO RS. 50,000/-THUS, THE ASSESSEE GET A RELIEF OF RS. 25,000/-. THIS GR OUND OF APPEAL IS ALLOWED PARTLY. 21. IN THE RESULT, THE APPEAL IS ALLOWED PARTLY AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF JULY, 2012 SD/- SD/- (T. R. SOOD) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 5 TH JULY, 2012 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR