M/s. AGH Batwawala, Kolhapur V. Income-tax Officer,

ITA 368/PUN/2014

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7647 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 18-04-2018
• Assessment Year: 2010-2011
• Appeal Filed On: 27-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: MAYURESH JOSHI
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E . , , ! , ' # BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AW ASTHY, JM . / ITA NO. 368/PUN/2014 '% & '& / ASSESSMENT YEAR : 2010-11 M/S. AGH BATWAWALA, 2033 C WARD, OPPOSITE KOLHAPUR MUNICIPAL CORPORATION, KOLKAPUR-416 001 PAN : AACFA4659H ....... / APPELLANT (% / V/S. THE INCOME TAX OFFICER, WARD 1(1), KOLHAPUR. / RESPONDENT ASSESSEE BY : SHRI SUNIL GANOO & SHRI MAYURESH JOSHI REVENUE BY : SHRI AJAY MODI / DATE OF HEARING : 18.04.2018 / DATE OF PRONOUNCEMENT : 25.04.2018 ) / ORDER PER VIKAS AWASTHY, JM THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORDER O F COMMISSIONER OF INCOME TAX (APPEALS), KOLHAPUR DATED 18.12.2013 FOR THE ASS ESSMENT YEAR 2010-11. 2 ITA NO.368/PUN/2014 A.Y.2010-11 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE IS A WHOLESALE TRADER OF VANASPATI OIL, RAVA, MAIDA, AATA, SUGA R ETC. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE IMPUGNED ASSESS MENT YEAR ON 06.10.2010 DECLARING TOTAL INCOME OF RS.12,86,290/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. ACCORDINGLY, STATUTORY NOTICE U /S.143(2) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE AC T) WAS ISSUED TO THE ASSESSEE ON 27.09.2011 WHICH WAS DULY SERVED ON THE AS SESSEE. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSIN G OFFICER MADE FOLLOWING ADDITIONS/DISALLOWANCES: 3. AGGRIEVED BY THE ASSESSMENT ORDER DATED 19.03.2013, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISS IONER OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDER CONFIRMED THE AD DITIONS MADE BY THE ASSESSING OFFICER. NOW, THE ASSESSEE IS IN SECOND APPEA L BEFORE THE TRIBUNAL ASSAILING THE FINDINGS OF COMMISSIONER OF INCOME TAX (A PPEALS) CONFIRMING THE ADDITIONS. THE GROUNDS RAISED BY ASSESSEE IN APPEAL ARE AS UNDER: SR. NO. ADDITIONS/DISALLOWANCES MADE BY ASSESSING OFFICERS RS. 1. ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT. RS.41,25,640/- 2. DISALLOWANCE U/S.40(A)(IA) OF THE ACT. RS.4,89,436/ - 3. DISALLOWANCE OF SALARY PAID TO I) ASAMA DHANKWALA II) SHAKISHTA H. DHANKWALA III)SAFINA G. DHANKWALA RS.99,840/- 4. AD - HOC DISALLOWANCE OF VARIOUS EXPENDITURES VIZ. SUBSCRIPTION & CONTRIBUTION, TRAVELLING ALLOWANCES, VEHICLES MAINTENANCE AND REPAIRS. RS.15,000/- 3 ITA NO.368/PUN/2014 A.Y.2010-11 1. THE LEARNED C.I.T.[A] HAS GROSSLY ERRED IN CONF IRMING THE ADDITION OF RS.41,25,640.00 MADE BY THE LEARNED ASSESSING OFFIC ER U/S.68 OF THE IT. ACT, 1961. WHILE DOING SO THE LEARNED CIT[A] HAS FA ILED TO APPRECIATE THAT THE IMPUGNED AMOUNTS WERE DISCOUNTS RECEIVED WHICH WERE OFFERED FOR TAXATION IN THE SUBSEQUENT YEARS ON RECEIPT OF THE INTIMATION FROM THE SUPPLIER/UPON RECONCILIATION OF ACCOUNTS ACCORDING TO THE METHOD OF ACCOUNTING REGULARLY FOLLOWED BY THE APPELLANT ASSE SSEE. THE SAID ADDITION BEING DEVOID OF MERITS THE SAME MAY PLEASE BE DELETED. 2. THE DISALLOWANCE OF RS.4,89,436.00 CONFIRMED BY THE LEARNED C.I.T.[A] U/S.40[A][IA] OF THE IT. ACT 1961, BEING PATENTLY I LLEGAL AND BAD IN LAW THE SAME MAY PLEASE BE DELETED. 3. THE DISALLOWANCE OF RS.99,84.00 CONFIRMED BY THE LEARNED C.I.T.[A] U/S. 40A[2][B] OF THE IT. ACT 1961, BEING DEVOID OF MERITS THE SAME MAY PLEASE BE DELETED. 4. THE AD-HOC DISALLOWANCE OF VARIOUS EXPENSES AMOU NTING TO RS.15,000.00 CONFIRMED BY THE LEARNED C.I.T.[A] BEI NG ARBITRARY, PERVERSE AND DEVOID OF MERITS THE SAME MAY PLEASE BE DELETED . 5. THE APPELLANT CRAVES THE PERMISSION TO ADD, AMEN D, MODIFY, ALTER, REVISE, SUBSTITUTE, DELETE ANY OR ALL GROUNDS OF AP PEAL, IF DEEMED NECESSARY AT THE TIME OF HEARING OF THE APPEAL. ADDITIONAL GROUND : WITHOUT PREJUDICE TO GROUND OF APPEAL NO.1 AND BY WAY OF AN ALTERNATE PRAYER THE APPELLANT ASSESSEE WOULD LIKE TO SUBMIT THAT THE ADDITION OF RS.41,25,640.00 MADE BY THE LEARNED ASSESSING OFFIC ER U/S. 68 OF THE I.T.ACT 1961 ON ACCOUNT OF DISCOUNT ALLEGEDLY RECEI VED BY THE APPELLANT ASSESSEE DURING THE RELEVANT PREVIOUS YEAR FROM ITS VARIOUS SUPPLIERS IS CONFIRMED BY THE HON. BENCH THEN A DIRECTION MAY PL EASE BE ISSUED TO THE LEARNED ASSESSING OFFICER THAT THE AMOUNTS OF SAID DISCOUNTS OFFERED FOR TAXATION BY THE APPELLANT FOR SUBSEQUENT YEARS BE R EDUCED FROM THE TAXABLE INCOMES OF THE RESPECTIVE YEARS. 4. SHRI SUNIL GANOO APPEARING ON BEHALF OF ASSESSEE SUBMITT ED THAT THE ASSESSING OFFICER HAS ERRED IN MAKING ADDITION OF RS.41,25,640 /- ON ACCOUNT OF UNEXPLAINED CASH CREDIT. DURING ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND DIFFERENCE IN BALANCES AS PER PARTYS ACCOUNTS AND AS PER ASSESSEES BOOKS OF ACCOUNT. THE ASSESSEE EXPLAINED TH AT THE DIFFERENCE IS ON ACCOUNT OF DISCOUNT GIVEN BY THE PARTIES TO THE ASSESSE E. THE ASSESSING OFFICER HELD THAT SINCE THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING, THE ENTIRE AMOUNT OF DISCOUNT RECEIVED/RECEIVABLE SHOULD HAVE BEEN ACCOUNTED FOR AND OFFERED FOR TAXATION IN ASSESSMENT YEAR 2010-11. HOWE VER, THE ASSESSEE 4 ITA NO.368/PUN/2014 A.Y.2010-11 HAS OFFERED THE AMOUNT TO TAX AS AND WHEN THE DISCOUNT S OFFERED BY SUPPLIERS ARE CONFIRMED. 4.1 THE LD. AR POINTED THAT THE ASSESSEE HAS ALREADY OFFER ED THE AMOUNT OF DISCOUNT UNDER CONSIDERATION TO TAX IN THE SUBSEQUENT A SSESSMENT YEARS. THE ASSESSEE DECLARE DISCOUNT IN HIS RETURN OF INCOME AS AND WHEN THEY ARE ALLOWED TO THE ASSESSEE BY SUPPLIERS. SINCE, THE ASSESSEE HAS OFFERED THE DISCOUNTS TO TAX IN SUBSEQUENT YEARS, THE ADDITION MADE IN THE ASSESSMENT YEAR UNDER APPEAL HAS RESULTED IN DOUBLE TAXATION OF THE SAME AMOUNT. THE LD. AR CONTENDED THAT IN THE ASSESSMENT YEAR UNDER CONSID ERATION AND SUBSEQUENT ASSESSMENT YEARS, THE INCOME OF THE ASSESSE E IS TAXABLE AT MAXIMUM TAX RATE, THEREFORE, THERE IS NO LOSS OF THE REVEN UE. THE ASSESSEE HAS NO INTENTION OF POSTPONEMENT OF TAX OR TO AVOID PAYMENT OF TAXES. 4.2 THE LD. AR MADE ALTERNATE PRAYER WITHOUT PREJUDICE TO HIS EARLIER SUBMISSIONS, BY WAY OF ADDITIONAL GROUND THAT IF THE ADDITIO N OF RS.41,25,640/- IS TO BE CONFIRMED THEN THE DISCOUNT OFFERED FOR TAXATION IN SUBSEQUENT ASSESSMENT YEARS MAY BE REDUCED FROM TAXA BLE INCOME IN THE RESPECTIVE ASSESSMENT YEARS. 5. IN RESPECT OF GROUND NO. 2 OF APPEAL, THE LD. AR SUBM ITTED THAT AUTHORITIES BELOW HAVE ERRED IN MAKING DISALLOWANCE OF RS.4,89 ,436/-. THE ASSESSEE HAS PAID INTEREST ON DEPOSITS TO FOUR PERSONS AGGREGATING TO RS.4,89,436/- NO TAX AT SOURCE WAS DEDUCTED ON THE INTE REST PAYMENT AS FORM-15G WAS RECEIVED FROM THE SAID PERSONS. THE ASSESS ING OFFICER MADE ADDITION OF THE AFORESAID AMOUNT MERELY ON THE GROUND TH AT THERE WAS DELAY IN FURNISHING COPY OF FORM-15G TO THE OFFICE OF COMMISSIONER OF INCOME TAX-I, KOLHAPUR. THE LD. AR POINTED THAT CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SMT. ANANDIDEVI GAIROLA VS. COMMISSIONER OF INCOME TA X (APPEALS) IN 5 ITA NO.368/PUN/2014 A.Y.2010-11 ITA NO.1247/PN/2012 FOR ASSESSMENT YEAR 2006-07 DECIDE D ON 30.09.2013 IN SIMILAR CIRCUMSTANCES, DELETED THE ADDITION WHERE FORM-15G/ 15H WERE FURNISHED BELATEDLY. 6. IN RESPECT OF GROUND NO. 3, DISALLOWANCE OF RS.99,840/- U/S.40A(2)(B) OF THE ACT, THE LD. AR SUBMITTED THAT THE ASSESSEE HAD PA ID ANNUAL SALARY OF RS.83,200/- EACH TO I) ASAMA DHANKWALA II) SHAKISHTA H. DHA NKWALA AND III) SAFINA G. DHANKWALA. UNDISPUTEDLY, THESE THREE LADIES ARE C OVERED UNDER SECTION 40A(2)(B) OF THE ACT. ALL THESE THREE LADIES ARE GRADU ATE AND ARE HELPING THE ASSESSEE IN CONDUCTING BUSINESS. THE LD. AR CO NTENDED THAT ASSESSEE CARRIES ITS BUSINESS FROM VARIOUS LOCATIONS. THE A SSESSEE HAS A SHOP NEAR KOLHAPUR MUNICIPAL CORPORATION AND THREE GODOWNS AT MARKET YARD, KOLHAPUR. THE ASSESSEE HAS SHORTAGE OF STAFF. THE ASSESSE E IS RECEIVING GOODS FROM VARIOUS PLACES AND ARE DELIVERED TO VARIOUS DIFFERENT P LACES. THE ABOVE SAID PERSONS ARE ASSISTING THE ASSESSEE IN MANAGING BUSINESS AFFAIRS. 6.1 THE LD. AR SUBMITTED THAT KEEPING IN VIEW THE FACT THA T ABOVE SAID PERSONS ARE GRADUATE AND ARE RECEIVING MONTHLY SALARY OF RS.6,900/-, THE SALARY PAID TO THE SAID PERSONS IS UNDER REASONABLE. THE ASSESSING OFFICER DISALLOWED 40% OF THE SALARY PAID TO THE ABOVE SAID PERSON S WITHOUT ANY BASIS. THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE DISALLO WANCE IN A MECHANICAL MANNER. 7. IN RESPECT OF GROUND NO. 4, DISALLOWANCE OF VARIOUS EXPE NSES, THE LD. AR SUBMITTED THAT THE ASSESSEE HAD CLAIMED EXPENDITURE OF R S.1,05,552/- IN P & L ACCOUNT ON ACCOUNT OF SUBSCRIPTION & CONTRIBUTION, TRA VELLING EXPENSES AND VEHICLE MAINTENANCE ETC. THE ASSESSING OFFICER WITHOUT GIVING ANY REASON, MADE AD-HOC DISALLOWANCE OF RS.15,000/- FROM AFORESAID EXPENDITURE. 6 ITA NO.368/PUN/2014 A.Y.2010-11 8. ON THE OTHER HAND, SHRI AJAY MODI REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS). THE LD. DR SUBMITTED THAT THE IMPUGNED ORDER IS WELL-REASONED AND BALANCED. THE ASSESSEE HAS FAILED TO SUBSTANTIATE HIS SUBMISSIONS BEFORE AUTHORITIES BELOW WITH COGENT EVIDENCE. 9. WE HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIV ES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. 9.1 IN GROUND NO. 1 OF APPEAL THE ASSESSEE HAS ASSAILED ADDITION OF RS.41,25,640/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT. THE LD. AR OF THE ASSESSEE CONTENDED THAT THIS AMOUNT REPRE SENTS DISCOUNT. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS REJECTED THE CO NTENTIONS OF ASSESSEE BY OBSERVING AS UNDER: 4.BEFORE THE UNDERSIGNED, THE EXPLANATION OF THE AS SESSEE REMAINS THE SAME. IT WAS SUBMITTED THAT SINCE THE PURCHASES MAD E BY THE ASSESSEE FROM VARIOUS PARTIES HAVE BEEN PROVED, THE CREDIT E NTRIES PERTAINING TO CORRESPONDING PURCHASES SHOULD BE ACCEPTED. HAVING CONSIDERED ASSESSEE'S EXPLANATION, I FIND THAT THE APPELLANT'S CONTENTION THAT DISCOUNT IS ACCOUNTED FOR AS AND WHEN RECEIVED IS NOT BACKED BY EVIDENCE. IT CANNOT BE ACCEPTED THAT THE APPELLANT DOES NOT MAIN TAIN ACCOUNTS OF CUSTOMERS AND IN CASE IT MAINTAINS, THE SAME CANNOT BE RECONCILED CUSTOMER-WISE. PLAIN CONFIRMATION FILED BEFORE THE ASSESSING OFFICER WITHOUT ACCOUNT EXTRACTS CANNOT BE ACCEPTED ON FACE VALUE. BEFORE ME, THE AUTHORIZED REPRESENTATIVE OF THE APPELLANT HAS FILE D A CHART SHOWING THEREIN THAT DISCOUNTS HAVE BEEN CREDITED IN FINANC IAL YEARS 2010-11, 2011-12 AND 2012-13. THERE IS NO RECONCILIATION OF HOW MUCH WAS THE DISCOUNT RECEIVED, HOW MUCH WAS CREDITED AND THERE IS NO EVIDENCE REGARDING CREDITING OF THE AMOUNTS IN THESE YEARS. THEREFORE, EXPLANATION OF APPELLANT CANNOT BE ACCEPTED. THE GROUND IS REJE CTED AND ADDITION IS SUSTAINED. BEFORE US, THE LD. AR OF THE ASSESSEE COULD NOT CONTROVE RT THE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS). THE ONLY SUBMISSIO N BY LD.AR IS THAT THE DIFFERENCE IS ON ACCOUNT OF DISCOUNTS RECEIVED FROM SUPPLIERS. MERELY 7 ITA NO.368/PUN/2014 A.Y.2010-11 ON BALD ASSERTIONS THE ADDITION CANNOT BE DELETED. ACCORD INGLY, GROUND NO. 1 RAISED IN APPEAL BY ASSESSEE IS DISMISSED . 9.2 THE LD. AR OF THE ASSESSEE HAS RAISED ALTERNATE PLEA BY WAY OF ADDITIONAL GROUND TO REDUCE THE AMOUNT OF DISCOUNT OFFERED BY ASS ESSEE IN SUBSEQUENT ASSESSMENT YEARS FROM TAXABLE INCOME. THE LD. AR SUBMITTED THAT ASSESSEE HAS OFFERED DISCOUNTS IN THE SUBSEQUENT ASSESSMENT YEAR S, AS AND WHEN THEY WERE CONFIRMED BY THE SUPPLIERS. THE ADDITION OF THE DISCOUN T IN THE ASSESSMENT YEAR UNDER APPEAL WOULD RESULT IN DOUBLE TAX ATION OF THE SAME AMOUNT. WE FIND MERIT IN THE SUBMISSIONS MADE BY LD. AR OF THE ASSESSEE. HOWEVER, THIS GROUND REQUIRES VERIFICATION OF FACTS. ACCORDING LY, WE DEEM IT APPROPRIATE TO REMIT THE ADDITIONAL GROUND RAISED BY ASSE SSEE IN APPEAL TO THE FILE OF ASSESSING OFFICER FOR VERIFICATION OF THE FACTS. IF THE AS SESSEE HAS OFFERED DISCOUNTS IN THE SUBSEQUENT ASSESSMENT YEARS, THE SAME MAY BE R EDUCED FROM TAXABLE INCOME OF THE RESPECTIVE ASSESSMENT YEARS, IN AC CORDANCE WITH LAW. ACCORDINGLY, ADDITIONAL GROUND RAISED BY ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . 10. IN GROUND NO. 2 OF APPEAL, THE ASSESSEE HAS ASSAILED D ISALLOWANCE OF RS.4,89,436/- U/S. 40(A)(IA) OF THE ACT. IT HAS BEEN SUBMITTED BY THE LD. AR OF THE ASSESSEE THAT THIS DISALLOWANCE HAS BEEN MADE AS AS SESSEE HAS FURNISHED FORM-15G BELATEDLY. WE FIND THAT PUNE BENCH OF TRIBUNAL IN THE CASE OF SMT. ANANDIDEVI GAIROLA VS. COMMISSIONER OF INCOME TAX (APPEALS) (SU PRA.) HAS ALLOWED THE CLAIM OF ASSESSEE WHERE FORM-15G WERE FURNISHED BEYO ND THE TIME SPECIFIED UNDER THE ACT. THE RELEVANT EXTRACT OF THE ORDE R OF TRIBUNAL IS REPRODUCED HEREIN BELOW: 9. IN THE CASE OF VIPIN P. MEHTA VS. ITO (SUPRA) TH E ASSESSEE HAD PAID INTEREST TO 34 PARTIES AGGREGATING RS.7,87,291/ - B UT DID NOT DEDUCT TAX AT 8 ITA NO.368/PUN/2014 A.Y.2010-11 SOURCE U/S.194A. IT WAS CLAIMED BY THE ASSESSEE THA T ALL THE PAYEES TO WHOM THE INTEREST WAS PAID HAVE FURNISHED DECLARATI ONS IN FORM NO. 15G/15H TO THE ASSESSEE. THE ASSESSEE STATED BEFORE THE ASSESSING OFFICER THAT THE SAID FORMS WERE FILED BELATEDLY BY MISTAKES. THE TRIBUNAL ALSO OBSERVED THAT EVEN IF THE ASSESSEE HAVE BELATE DLY FILED THE DECLARATIONS WITH THE OFFICE OF CCIT /CIT BEYOND TH E TIME LIMIT SPECIFIED IN SEC.197A(2) THAT AMOUNT TO OMISSION OR DEFAULT FOR WHICH THE PENALTIES PRESCRIBED AND NO DISALLOWANCE U/S. 40(A)(IA) CAN B E MADE. 10. IN THE CASE OF KARWAT STEEL TRADERS VS. ITO (SU PRA) THE ASSESSEE HAS PAID THE INTEREST BUT DID NOT DEDUCT THE TAX AT SOU RCE IN RESPECT OF 17 PARTIES. IT WAS CLAIMED THAT FORM NO. 15G/15H WERE R AISED. THE ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SEC .40 (A)(IA) OF THE ACT MADE THE DISALLOWANCE TO THE EXTENT OF RS.5,30,429 /-.THE TRIBUNAL FOLLOWED A DECISION IN THE CASE OF VIPIN P. MEHTA V S. ITO (SUPRA) AND HELD THAT EVEN IF THE ASSESSEE HAS DELAYED THE FILING OF THE COPIES OF THE FORM NO.15H/15G BEYOND THE TIME LIMIT SPECIFIED IN SEC.19 7A(2) THAT WAS A DISTINCT OMISSION OR DEFAULT FOR WHICH PENALTY IS P RESCRIBED. 11. IN BOTH THE ABOVE CASES, IT IS SEEN THAT EITHER THE FORMS WERE FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR BELA TEDLY IN THE PRESENT CASE. THE ASSESSING OFFICER HAS NOWHERE DOUBTED THA T THE ASSESSEE HAD NOT RECEIVED THE FORMS IN QUESTION I.E. THE 15G/15H BEYOND END OF FINANCIAL YEAR BUT DISALLOWANCE IS MERELY BASED ON THE REASON OF VIOLATION OF RULE FOR NOT SENDING THE COPIES OF THE SAID FORM S TO THE OFFICE OF THE CCIT OR CIT. IN OUR OPINION, THE PRINCIPLES LAID DO WN IN THE CASE OF VIPIN P. MEHTA VS. ITO (SUPRA.) ARE SQUARELY APPLICABLE TO T HE ASSESSEES CASE. WE, ACCORDINGLY, FOLLOWING THE DECISION IN THE CASE OF VIPIN P. MEHTA VS. ITO (SUPRA.), ALLOW THE CLAIM OF THE ASSESSEE AND D ELETE THE ADDITION, ACCORDINGLY, GROUND NO. 2 IS ALLOWED. THUS, IN VIEW OF THE FACTS OF THE CASE AND DECISION OF CO- ORDINATE BENCH OF THE TRIBUNAL, WE FIND MERIT IN THE GROUND RAISED BY ASSES SEE. ACCORDINGLY, DISALLOWANCE OF RS.4,89,436/- IS DIRECTED TO BE DELETED. THUS, GROUND NO. 2 RAISED IN APPEAL BY ASSESSEE IS ALLOWED . 11. IN GROUND NO. 3, THE ASSESSEE HAS ASSAILED DISALLOWANC E OF RS.99,840/- U/S. 40A(2)(B) OF THE ACT, THE ASSESSEE HAS PAID SALARY TO I) ASAMA DHANK WALA II) SHAKISHTA H. DHANKWALA AND III) SAFINA G. DHANKWALA AT THE RATE OF RS.83,200/- PER ANNUM EACH. THE LD. AR SUBMITTED THAT ALL T HE ABOVE SAID PERSONS ARE GRADUATE AND ARE ASSISTING ASSESSEE IN MAN AGING BUSINESS. THE ASSESSEE IS CONDUCTING ITS BUSINESS FROM VARIOUS PLACES. T HE ASSESSEE HAS A SHOP NEAR KOLHAPUR MUNICIPAL CORPORATION AND THREE GO-DO WNS AT MARKET YARD. THE ABOVE SAID PERSONS ARE HELPING THE ASSESSEE IN MANAGING AFFAIRS OF 9 ITA NO.368/PUN/2014 A.Y.2010-11 BUSINESS EFFICIENTLY. IN SO FAR AS REASONABILITY OF EXPENDITU RE IS CONCERNED, THE LD. AR OF THE ASSESSEE STATED AT BAR THAT ALL THE THREE LADIES ARE GRADUATE. TAKING INTO CONSIDERATION ENTIRETY OF FACTS, WE ARE OF CONSID ERED VIEW THAT SALARY OF RS.83,200/-PER ANNUM FOR EACH OF THE LADIES, APPEA RS TO BE REASONABLE. THE ASSESSING OFFICER BEFORE MAKING DISALLOWANCE OF 40% HAS NOT MADE ANY ENQUIRIES TO FIND OUT THE SALARY PAID FOR CONDUC TING SIMILAR WORK. THE ASSESSING OFFICER MADE AD-HOC DISALLOWANCE AND THE COM MISSIONER OF INCOME TAX (APPEALS) UPHELD THE SAME IN A MECHANICAL MANN ER. THEREFORE, IN OUR VIEW THE DISALLOWANCE OF RS.99,840/- U/S.40A(2)(B) IS NOT WA RRANTED AND THUS, THE SAME IS DIRECTED TO BE DELETED. ACCORDINGLY, GROUND NO. 3 RAISED IN APPEAL BY ASSESSEE IS ALLOWED. 12. IN GROUND NO. 4 OF APPEAL, THE ASSESSEE HAS ASSAILED A D-HOC DISALLOWANCE OF RS.15,000/-. THE ASSESSEE HAS CLAIMED TOTAL EXPENDITURE OF RS.1,05,552/- ON ACCOUNT OF VEHICLE MAINTENANCE, REPAIRS ET C. THE ASSESSING OFFICER MADE AD-HOC DISALLOWANCE OF RS.15,000/- AS THE EXPEN SES WERE SUPPORTED BY SELF MADE VOUCHERS AND ON THE PREMISE THA T THERE IS AN ELEMENT OF PERSONAL EXPENDITURE. THE DISALLOWANCE OF LUMP SUM AMOUN T OF RS.15,000/- IN THE FACTS OF THE CASE APPEARS TO BE REAS ONABLE AND JUSTIFIED. WE ARE, THEREFORE, NOT INCLINED TO INTERFERE WITH THE FINDINGS OF ASSESSING OFFICER/ COMMISSIONER OF INCOME TAX (APPEALS). ACCORDINGLY, GROUND NO. 4 RAISED IN APPEAL BY ASSESSEE IS DISMISSED . 13. THE GROUND NO. 5 RAISED IN APPEAL IS GENERAL IN NATURE AND HENCE, REQUIRES NO ADJUDICATION. 10 ITA NO.368/PUN/2014 A.Y.2010-11 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWE D IN THE TERMS AFORESAID. ORDER PRONOUNCED ON WEDNESDAY, THE 25 TH DAY OF APRIL, 2018. SD/- SD/- ( . / D. KARUNAKARA RAO ) ( ! /VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; !' / DATED : 25 TH APRIL, 2018 SB ) * +',- . ', / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEALS), KOLHAPUR. 4. THE CIT-I/II, KOLHAPUR /CIT (CENTRAL), KOLHAPUR. 5. %&' () , * () , +,- , / DR, ITAT, A BENCH, PUNE. 6. './ 01 / GUARD FILE. //TRUE COPY // *2 / BY ORDER, 3 (- / PRIVATE SECRETARY * () , / ITAT, PUNE.