M/s Uttar Pradesh Financial Corporation, Kanpur V. Dy. Commissioner of Income Tax, Kanpur

ITA 377/LKW/2014

• Counselvise Citation: 37723714 RSA 2014
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 02-09-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 12-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P K DEY
• Keywords: Principle of natural justice; Bad and doubtful debts; Revenue expenditure

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NOS.377 & 378/LKW/2014 A.YRS.:2006 - 07 & 2007 - 08 DY.C.I.T., RANGE - VI, KANPUR. VS. UTTAR PRADESH FINANCIAL CORPORATION 14/88, CIVIL LINES, KANPUR. PAN:AAAJU0012A (RESPONDENT) (APPELLANT) SHRI VIKASH GARG, ADVOCATE APPELLANT BY SHRI P. K. DEY, D. R. RESPONDENT BY 02/09/2014 DATE OF HEARING 12 /11/2014 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. BOTH THESE APPEALS ARE FILED BY THE ASSESSEE, WHICH ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF LEARNED CIT(A) - I, KANPUR DATED 24/02/2014 FOR THE ASSESSMENT YEAR 2006 - 07 AND DATED 28/02/2014 FOR ASSESSMENT YEAR 2007 - 08. BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST WE TAKE UP THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2006 - 07 I.E. I.T.A. NO.377/LKW/2014. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT THE AUTHORITIES BELOW HAVE ERRED IN LAW AND ON FACTS IN DISALLOWING THE CLAIM OF BAD DEBTS OF RS.2,29,89,602/ - . 2. THAT THE AUTHORITIES BELOW HAVE ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE CLAIM OF DEDUCTION OF BAD DEBTS OF RS.2,29,89,602/ - IS ALLOWABLE U/S 36(1)(VII) OF THE ACT. 2 3. THAT THE CIT(APPEALS), IN AFFIRMING THE DISALLOWANCE OF RS.2,29,89,602/ - HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE ASSESSEE HAS NOT CLAIMED AN Y DEDUCTION U/S 36(1)(VIIA) OF THE INCOME TAX ACT 1961 EITHER IN THE PREVIOUS YEAR UNDER APPEAL OR IN ANY PRECEDING PREVIOUS YEAR THEREBY WRONGLY INVOKING PROVISO TO SECTION 36(1)(VII) OF THE INCOME TAX ACT 1961. 4. THAT THE CIT (APPEALS), IN AFFIRMING TH E DISALLOWANCE OF RS.2,29,89,602/ - HAS ERRED IN LAW AND ON FACTS IN JUSTIFYING HIS ACTION ON THE GROUND THAT THE ASSESSEE HAD A CREDIT BALANCE OF RS.11,45,28,355/ - IN THE 'PROVISION FOR BAD & DOUBTFUL DEBTS' ACCOUNT AND SAME WAS AVAILABLE AS ON 31/03/2006. 5. THAT THE CIT (APPEALS), IN AFFIRMING THE DISALLOWANCE OF RS.2,29,89,602/ - HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT PROVISIONS FOR NON PERFORMING ASSETS/ BAD DEBTS IN BOOK OF ASSESSEE ARE MADE AS PER 'INCOME RECOGNITION & ASSET CLASSIFICA TION' NORMS OF RBI BUT NOT CONSIDERED FOR COMPUTING THE INCOME OF THE ASSESSEE UNDER THE INCOME TAX ACT 1961. 6. THE CIT (APPEALS), IN AFFIRMING THE DISALLOWANCE OF RS.2,29,89,602/ - HAS ERRED IN LAW AND ON FACTS IN JUSTIFYING THE DISALLOWANCE ON THE GROUN DS THAT ASSESSEE HAS CLAIMED DOUBLE DEDUCTION IN RESPECT OF CLAIM OF BAD DEBT. 7. THAT THE CIT (APPEAL), IN AFFIRMING THE DISALLOWANCE OF RS.2,29,89,602/ - HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE ASSESSEE FOLLOWS CASH SYSTEM OF ACCOUNTIN G IN COMPUTING ITS INCOME UNDER THE INCOME TAX ACT 1961. 8. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. 3. IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THE ONLY DISPUTE IN ASSESSMENT YE AR 2006 - 07 IS REGARDING ALLOWABILITY OF ASSESSEES CLAIM OF DEDUCTION OF RS.2,29,89,602/ - ON ACCOUNT OF BAD DEBTS WRITTEN OFF BY THE ASSESSEE. HE SUBMITTED THAT THIS CLAIM OF THE ASSESSEE IS AS PER LAW AND THE 3 SAME SHOULD BE ALLOWED BECAUSE THIS MUCH BAD DEBT WAS ACTUALLY WRITTEN OFF BY THE ASSESSEE IN THE BOOKS OF ACCOUNT. HE SUBMITTED THAT THE PROFIT & LOSS ACCOUNT FOR THIS YEAR IS ON PAGE NO. 5 WHERE IT CAN BE SEEN THAT THE ASSESSEE HAS DEBITED THIS AMOUNT TO THE PROFIT & LOSS ACCOUNT UNDER THE HEAD BA D DEBTS WRITTEN OFF. 4. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE PROFIT & LOSS ACCOUNT OF THE ASSESSEE IS ON PAGE NO. 5 AND THERE IS DEBIT OF RS.2,29,89,602/ - ON ACCOUNT OF BAD DEBTS WRITTEN OF AND THERE IS NO OTHER DEBIT ON ACCOUNT OF PROVISION FOR BAD DEBT. THE COMPUTATION OF INCOME (ORIGINAL) IS AVAILABLE ON PAGE NO. 30 OF THE PAPER BOOK AND THERE ALSO, THERE IS NO DEDUCTION CLAIMED BY THE ASSESSEE ON AC COUNT OF ANY PROVISION FOR BAD DEBTS. AS PER THE REVISED COMPUTATION ALSO, THERE IS NO SUCH CLAIM REGARDING PROVISION FOR BAD DEBTS U/S 36(1)(VIIA) OF THE ACT. IN THE ASSESSMENT ORDER ALSO, THIS IS NOT THE CASE OF THE ASSESSING OFFICER THAT THE ASSESSEE HAS CLAIMED ANY DEDUCTION U/S 36(1)(VIIA) OF THE ACT IN RESPECT OF PROVISION FOR BAD DEBT AND THEREFORE, THE DEDUCTION IS NOT ALLOWABLE IN RESPECT OF BAD DEBTS WRITTEN OFF BECAUSE THE SAME IS NOT ALLOWABLE AS PER THE FIRST PROVISO TO CLAUSE (VII) OF SECTIO N 36(1) OF THE ACT. THE STAND OF THE ASSESSING OFFICER IS THAT THE ASSESSEE HAS NOT BEEN ABLE TO GIVE THE DETAILS OF THE PERSONS OR THE AMOUNTS AGAINST WHICH THE CLAIM HAS BEEN MADE. SINCE THIS IS NOT THE CASE OF THE ASSESSING OFFICER THAT THE BAD DEBTS WERE NOT ACTUALLY WRITTEN OFF BY THE ASSESSEE, THE ISSUE IN DISPUTE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF T. R. F. LTD. VS COMMISSIONER OF INCOME - TAX [2010] 323 ITR 397 (SC). 6. THE STAND OF THE CIT(A) IS DIFFERENT. HE IS DECIDING THE ISSUE AS PER SECTION 36(1)(VIIA) OF THE ACT I.E. REGARDING THE PROVISION FOR BAD DEBT AND DISALLOWED THE CLAIM OF THE ASSESSEE ON THE BASIS THAT IN THE DETAILS FURNISHED 4 BY THE ASSESSEE, IT IS NOT C LEAR IF THESE WERE RURAL OR URBAN BAD LOANS AND FURTHER AS RESERVE HAD BEEN CREATED, THE WRITE OFF HAS TO BE LIMITED TO THE AMOUNT OF RESERVE CREATED. HE IS ALLEGING THAT THE ASSESSEE IS TAKING DOUBLE DEDUCTION U/S 36(1)(VII) AND 36(1)(VIIA) OF THE ACT. WE HAVE ALREADY SEEN THAT THE ASSESSEE IS CLAIMING ONLY ONE DEDUCTION U/S 36(1)(VII) THAT TOO IN RESPECT OF ACTUAL WRITE OFF OF BAD DEBT AND NOT FOR ANY PROVISION FOR BAD DEBT. CONSIDERING ALL THESE FACTS, WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE I S COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF T. R. F. LTD. VS COMMISSIONER OF INCOME - TAX (SUPRA) . BUT EVEN THEN IT HAS TO BE SEEN THAT THE ASSESSEE IS SATISFYING THE REQUIREMENT OF SECTION 36(2) OF INCOME TAX A CT. FOR THIS PURPOSE, WE RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER. IF THE ASSESSEE CAN ESTABLISH THAT PROVISIONS OF SECTION 36(2) ARE BEING SATISFIED, THE DEDUCTION SHOULD BE ALLOWED OTHERWISE, THE ASSESSING OFFICER SHOULD PASS NECESSARY O RDER AS PER LAW. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. 8. NOW WE TAKE UP THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2007 - 08 I.E. I.T.A. NO.378/LKW/2014. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS: 1. THAT THE AUTHORITIES BELOW HAVE ERRED IN LAW AND ON FACTS IN DISALLOWING THE CLAIM OF BAD DEBTS OF RS.1,62,40,448/ - . 2. THAT THE AUTHORITIES BELOW HAVE ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE CLAIM OF DEDUCTION OF BAD DE BTS OF RS.1,62,40,448/ - IS ALLOWABLE U/S 36(1)(VII) OF THE ACT. 3. THAT THE CIT(APPEALS), IN AFFIRMING THE DISALLOWANCE OF RS.1,62,40,448/ - HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE ASSESSEE HAS NOT CLAIMED ANY DEDUCTION U/S 36(1)(VIIA) O F THE INCOME TAX ACT 1961 EITHER IN THE PREVIOUS YEAR UNDER APPEAL OR IN ANY 5 PRECEDING PREVIOUS YEAR THEREBY WRONGLY INVOKING PROVISO TO SECTION 36(1)(VII) OF THE INCOME TAX ACT 1961. 4. THAT THE CIT (APPEALS), IN AFFIRMING THE DISALLOWANCE OF RS.1,62,40, 448/ - HAS ERRED IN LAW AND ON FACTS IN JUSTIFYING HIS ACTION ON THE GROUND THAT THE ASSESSEE HAD A CREDIT BALANCE OF RS.11,45,28,355/ - IN THE 'PROVISION FOR BAD & DOUBTFUL DEBTS' ACCOUNT AND SAME WAS AVAILABLE AS ON 31/03/2006. 5. THAT THE CIT (APPEALS) , IN AFFIRMING THE DISALLOWANCE OF RS.1,62,40,448/ - , HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT PROVISIONS FOR NON PERFORMING ASSETS/ BAD DEBTS IN BOOK OF ASSESSEE ARE MADE AS PER 'INCOME RECOGNITION & ASSET CLASSIFICATION' NORMS OF RBI BUT NOT CONSIDERED FOR COMPUTING THE INCOME OF THE ASSESSEE UNDER THE INCOME TAX ACT 1961. 6. THE CIT (APPEALS), IN AFFIRMING THE DISALLOWANCE OF RS.1,62,40,448/ - , HAS ERRED IN LAW AND ON FACTS IN JUSTIFYING THE DISALLOWANCE ON THE GROUNDS THAT ASSESSEE HAS CLAI MED DOUBLE DEDUCTION IN RESPECT OF CLAIM OF BAD DEBT. 7. THAT THE CIT (APPEAL), IN AFFIRMING THE DISALLOWANCE OF RS.1,62,40,448/ - , HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE ASSESSEE FOLLOWS CASH SYSTEM OF ACCOUNTING IN COMPUTING ITS INCOM E UNDER THE INCOME TAX ACT 1961. 8. THAT THE AUTHORITIES BELOW HAVE ERRED IN LAW AND ON FACTS IN DISALLOWING RS.1,30,000/ - ON ACCOUNT OF MEMBERSHIP FEES. 9. THAT THE AUTHORITIES BELOW HAVE ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT EXPENSES INCUR RED BY THE ASSESSEE ON ACCOUNT OF MEMBERSHIP FEES IS ALLOWABLE U/S37(1) OF THE INCOME TAX ACT, 1961. 10. THAT THE AUTHORITIES BELOW HAVE ERRED IN LAW AND ON FACTS IN DISALLOWING RS.4,97,872/ - OUT OF MEDICAL ALLOWANCE. 11. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. 6 9. IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT GROUND NOS. 1 TO 7 ARE IN RESPECT OF ASSESSEES CLAIM FOR BAD DEBT WRITTEN OFF OF RS.1,62,40,448/0. BOTH THE SIDES AGREED T HAT THE FACTS ARE IDENTICAL IN THIS YEAR AND HENCE, THE ISSUE CAN BE DECIDED ON SIMILAR LINE. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FROM THE ASSESSMENT ORDER, WE FIND THAT IT IS NOTED BY THE ASSESSING OFFICER THAT IT WAS CATEGORICALLY SUBMITTED B Y THE ASSESSEE BEFORE HIM THAT THE ASSESSEE HAS NEITHER MADE ANY PROVISION NOR CLAIMED ANY DEDUCTION U/S 36(1)(VIIA) OF THE ACT IN RESPECT OF PROVISION MADE FOR BAD AND DOUBTFUL DEBTS. IT WAS ALSO SUBMITTED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER THA T THE ASSESSEE HAS BEEN CLAIMING BAD DEBTS ONLY ON THEIR ACTUAL WRITE OFF UNDER THE PROVISIONS OF SECTION 36(1)(VII) OF THE ACT AND THEREFORE, THE ENTIRE AMOUNT OF BAD DEBTS WRITTEN OFF IS ALLOWABLE. THEREAFTER, THE ASSESSING OFFICER SAYS THAT THE PROVISI ON OF SECTION 36(1)(VII) IS NOT APPLICABLE IN THE CASE OF THE ASSESSEE AND IN THIS CASE, PROVISION OF SECTION 36(1)(VIIA) ARE APPLICABLE. THEREAFTER THE ASSESSING OFFICER SAYS THAT THE ASSESSEE HAS MADE PROVISION FOR BAD AND DOUBTFUL DEBTS OF RS.11,45,28, 355/ - AND THE SAME WAS AS ON 31/03/2006. THE BALANCE SHEET OF THE ASSESSEE IS AVAILABLE ON PAGE NO. 5 OF THE PAPER BOOK. AS PER THE SAME, THE ASSESSEE WAS HAVING RESERVE FUND AND OTHER RESERVE OF RS.19,74,93,525/ - . THE DETAILS OF THE RESERVES ARE AVAILA BLE ON PAGE NO. 8 OF THE PAPER BOOK, WHICH INCLUDES SPECIAL RESERVE SECTION 36(1)(VIII) OF THE ACT OF RS.11,45,28,355/ - AS ON 31/03/2006 AS WELL AS ON 31/03/2007. THE PROVISIONS OF SECTION 36(1)(VIII) ARE ENTIRELY DIFFERENT AND THE SAME ARE IN RESPECT OF ALLOWING DEDUCTION IN RESPECT OF ELIGIBLE BUSINESS WHICH INCLUDES THE BUSINESS OF PROVIDING LONG TERM FINANCE. NO DOUBT, THE ASSESSEE IS COVERED BY THE PROVISION OF THIS SECTION BUT IT ALSO SHOWS THAT NO SUCH DEDUCTION WAS CLAIMED BY THE ASSESSEE U/S 36(1 )(VIII) IN THE PRESENT YEAR AND SUCH CLAIM WHETHER MADE OR NOT IS NOT RELEVANT FOR DECIDING THE CLAIM OF THE ASSESSEE IN RESPECT OF WRITE OFF OF BAD DEBT U/S 36(1)(VII) OF THE ACT. 7 THE CIT(A) HAS DECIDED THE ISSUE IN THIS YEAR ON THE SAME BASIS I.E. FOR A SSESSMENT YEAR 2006 - 07 AND THEREFORE, IN THE PRESENT YEAR ALSO, BY RESPECTFULLY FOLLOWING THE JUDGMENT OF HON'BLE APEX COURT, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE SUBJECT TO THE ASSESSEE SATISFYING THE REQUIREMENT OF SECTION 36(2). THE MATTER I S RESTORED TO ASSESSING OFFICER IN THIS YEAR ALSO WITH SAME DIRECTIONS. GROUND NO. 1 TO 7 ARE ALLOWED FOR STATISTICAL PURPOSES. 11. REGARDING GROUND NOS. 8 & 9, LEARNED A.R. OF THE ASSESSEE REITERATED THE SAME CONTENTIONS WHICH WERE RAISED BEFORE THE CI T(A) WHEREAS LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDER OF LEARNED CIT(A). 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE CLAIM OF THE ASSESSEE WAS REJECTED BY THE ASSESSING OFFICER BY OBSERVING THAT THE ASSESSEE HAS CLAIMED THIS AMOUNT IN TWO HE ADS; UNDER THE HEAD MISCELLANEOUS EXPENSES AND OTHER EXPENSES. THE ASSESSEE COULD NOT JUSTIFY THE EXPENSES AND THEREFORE, MEMBERSHIP FEES OF RS.3.50 LAC DEBITED TO THESE HEADS WAS DISALLOWED. THE CIT(A) CONFIRMED THE DISALLOWANCE ON THE BASIS THAT IN THE ABSENCE OF ANY EVIDENCE IT HAS NOT BEEN ESTABLISHED BY THE ASSESSEE THAT A BENEFIT WAS OBTAINED IN THE FIELD OF REVENUE AND SUCH AN EXPENDITURE WAS ATTRIBUTABLE AS REVENUE EXPENDITURE. HE HAS GIVEN A FINDING THAT THE EXPENDITURE PAID BY WAY OF SUBSCRI PTION TO THE CLUB CANNOT BE SAID TO BE INCURRED FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE AS NO EVIDENCE OF ANY REAL ADVANTAGE ACCRUED TO THE BUSINESS OF THE ASSESSEE COMPANY WAS BROUGHT ON RECORD. HE HAS NOTED VARIOUS JUDGMENTS OF VARIOUS HIGH COURTS S UCH AS HON'BLE BOMBAY HIGH COURT IN THE CASE OF OTIS ELEVATORS CO. (INDIA) LTD. 195 ITR 682 AND NOTED THAT AS PER THIS JUDGMENT, THE REIMBURSEMENT OF EXPENDITURE SPENT IN THE CLUB AND NOT THE FEE PAID FOR OBTAINING THE MEMBERSHIP FEES. HE HAS ALSO REFERRE D TO A JUDGMENT OF HON'BLE KERALA HIGH COURT RENDERED IN THE CASE OF FRAMATONE CONNECTOR OEN LTD. VS. DCIT 294 ITR 559 WHEREIN IT WAS HELD THAT SIMILAR PAYMENT PAID TO COCHIN YATCH CLUB TOWARDS INSTITUTIONAL MEMBERSHIP FEE, THE 8 EXPENDITURE EFFECTED BY THE ASSESSEE WAS CAPITAL IN NATURE. THIS IS ALSO OBSERVED BY LEARNED CIT(A) THAT HON'BLE KERALA HIGH COURT HAS FOLLOWED THE PRINCIPLE LAID DOWN BY HON'BLE APEX COURT IN THE CASE OF PUNJAB STATE INDUSTRIAL DEVELOPMENT CORPORATION LTD. VS. CIT 225 ITR 792 BUT WE ALSO FIND THAT AS PER VARIOUS OTHER JUDGMENTS OF VARIOUS HIGH COURTS SUCH AS HON'BLE GUJARAT HIGH COURT IN THE CASE OF GUJARAT STATE EXPORT CORPORATION LTD. VS COMMISSIONER OF INCOME - TAX [1994] 209 ITR 649 (GUJ) AND HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. SAMTEL COLOR LTD. [2009] 180 TAXMAN 82, IT WAS HELD THAT THE EXPENDITURE BEING ADMISSION FEE PAID TOWARDS CORPORATE MEMBERSHIP WAS AN EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND NOT TOWARDS CAPITAL ACCOUNT. HENCE, I T IS SEEN THAT DIVERGENT VIEWS ARE THERE ON THIS ISSUE AND THEREFORE, AS PER THE JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF COMMISSIONER OF INCOME - TAX VS VEGETABLE PRODUCTS LTD. [1973] 88 ITR 192 (SC), THE VIEW FAVOURABLE TO THE ASSESSEE SHOULD BE FOLL OWED. HENCE, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. ACCORDINGLY, GROUND NO. 8 & 9 ARE ALLOWED. 13. REGARDING GROUND NO. 10 & 11, HE DRAWN OUR ATTENTION TO PAGE NOS. 64 AND 65 OF THE PAPER BOOK WHERE THE DETAILS ARE AVAILABLE. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDER OF LEARNED CIT(A). 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT AS PER THE DETAILS AVAILABLE, THERE IS DATE MENTIONED AND AMOUNT MENTIONED AND THE AMOUNTS HAVE BEEN DEBITED TO ACCOUNT HEAD MEDICAL EXPENSES OF MANAGING DIRECTOR BUT IN ADDITION TO THIS LEDGER ACCOUNT COPY, THERE IS NO OTHER EVIDENCE BROUGHT ON RECORD AS TO WHETHER THESE EXPENSES WERE INCURRED FOR MEDICAL EXPENDITURE OF THE MANAGING DIRECTOR AND WHETHER THE SAME IS AS PER HIS TERMS OF APPOINTMENT . THE DECISION OF LEARNED CIT(A) ON THIS ISSUE IS ON THE BASIS THAT DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE WAS ASKED TO PRODUCE INFORMATION REGARDING NATURE OF ILLNESS, AMOUNT INCURRED ON VARIOUS TESTS, 9 INVESTIGATIONS SURGERY, TRAVELLING ETC. REGA RDING THE ABOVE ILLNESS BUT NO SUCH DETAILS WERE PRODUCED BEFORE HIM AND IT WAS MERELY STATED THAT IT IS FOR THE TREATMENT OF MANAGING DIRECTOR HENCE ALLOWABLE. HE HAS GIVEN A FINDING THAT IN ABSENCE OF EVIDENCE HE HAS NO REASON TO TAKE DIFFERENT VIEW THA N TAKEN BY THE ASSESSING OFFICER. BEFORE US ALSO, NO EVIDENCE HAS BEEN FURNISHED AND THEREFORE, WE ALSO DECLINE TO TAKE A DIFFERENT VIEW THAN THE VIEW TAKEN BY THE AUTHORITIES BELOW. ACCORDINGLY, GROUND NO. 10 & 11 ARE REJECTED. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED. 16. IN THE COMBINED RESULT, THE APPEAL FOR ASSESSMENT YEAR 2006 - 07 IS ALLOWED FOR STATISTICAL PURPOSES AND APPEAL FOR ASSESSMENT YEAR 2007 - 08 IS PARTLY ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 12 /11/2014 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1 . THE APPELLANT 2 . THE RESPONDENT. 3 . CONCERNED CIT 4 . THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR