The ACIT, Vapi Circle, Vapi V. Parmar Builders & Devlopers, Vapi

ITA 3802/AHD/2007

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76879 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 02-06-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 05-10-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS
• Assessee Lawyers: JP SHAHAR
• Keywords: Fair market value; Corroborative evidences

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD .., ! '# '# '# '# $ %&, ! BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER #./ I.T.A. NO.3802/AHD/2007 ( ( ')( ( ')( ( ')( ( ')( / / / / ASSESSMENT YEAR : 2003-04) THE ASSISTANT COMMISSIONER OF INCOME-TAX VAPI CIRCLE, VAPI / VS. PARMAR BUILDERS & DEVELOPERS GURUDEV COMPLEX 5, DELKAR MARG SILVASSA !* #./+, #./ PAN/GIR NO. : AADFP 1938 K ( *- / // / APPELLANT ) .. ( ./*- / RESPONDENT ) AND CO NO.372/AHD/2007 A.Y. 2003-04 (IN ITA NO.3802/AHD/2007 AY 2003-04) PARMAR BUILDERS & DEVELOPERS VS. THE ACIT SILVASSA .. VAPI CIRCLE, VAPI (CROSS OBJECTOR) (RES PONDENT) REVENUE BY : SHRI K.C. MATHEWS, SR.DR ASSESSEE BY : SHRI J.P. SHAH, AR $'0 1 & / / / / DATE OF HEARING 04/06/2014 23) 1 & / DATE OF PRONOUNCEMENT 11/07/2014 4 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-II, AHMEDABA D (CIT(A) IN SHORT) DATED 27/07/2007 PERTAINING TO ASSESSMENT Y EAR (AY) 2003-04 AND THE ASSESSEE IS IN CROSS-OBJECTION THEREOF. ITA NO.3802/AHD/2007 (BY REVENU E) AND CO NO.372/AHD/2007 (BY ASSESSEE) ACIT VS. PARMAR BUILDERS & DEVELOPERS ASST.YEAR 2003-04 - 2 - 2. FIRST, WE TAKE UP THE REVENUES APPEAL IN ITA NO .3802/AHD/2007 FOR AY 2003-04. THE REVENUE HAS RAISED THE FOLLOW ING GROUNDS OF APPEAL:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF FALANDI PROJECT OF RS.5,39,083/- OUT OF TOTAL ADDITION OF R S.6,90,273/-. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION MADE OF R S.6,65,176/- U/S.40A(2)(B) OF THE ACT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.6,0 0,000/- MADE AS W.I.P.OF CASETROL. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1,2 4,800/- MADE OUT OF VARIOUS EXPENSES. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION U/S.40A(2 )(B) OF RS.4,26,843/- AND RS.3,91,712/-. 6. IT IS THEREFORE, PRAYED THAT THE DECISION OF THE L EARNED CIT(A) MAY BE SET ASIDE AND THE ORDER OF THE AO MAY BE RESTOR ED. THE APPELLANT CRAVES TO ADD, ALTER OR AMEND ANY GRO UNDS OF APPEAL. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE F ILED ITS RETURN OF INCOME DECLARING INCOME OF RS.6,35,770/-. THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.1 43(3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 27/03/2006, THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE DISALLOWANCES OF EXPENSES RELATED TO FALANDI P ROJECT OF RS.6,90,273/-, EXPENSES U/S.40A(2)(B) OF RS.6,65,17 6/-, EXPENSES TREATED ITA NO.3802/AHD/2007 (BY REVENU E) AND CO NO.372/AHD/2007 (BY ASSESSEE) ACIT VS. PARMAR BUILDERS & DEVELOPERS ASST.YEAR 2003-04 - 3 - AS WORK-IN-PROGRESS OF RS.6,00,000/-, EXPENSES RELA TED TO CASTROL OF RS.8,18,555/-, EXPENSES CLAIMED AS REIMBURSEMENT TO M/S.PARMAR CONSTRUCTION, SILVASSA OF RS.4,21,645/- AND EXPENSE S RELATED TO SELF PAID EXPENSES OF RS.3,24,236/-. THUS, THE AO MADE ADDITI ON OF RS.35,21,236/- AND ASSESSED THE INCOME AT RS.41,57,608/- AGAINST T HE RETURN OF INCOME OF RS.6,35,770/-. AGAINST THIS, ASSESSEE FILED AN AP PEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS AN D EXAMINING THE DETAILS PLACED BEFORE HIM, PARTLY ALLOWED THE APPEA L. 4. FIRST GROUND OF REVENUES APPEAL IS AGAINST THE DELETION OF ADDITION ON ACCOUNT OF FALANDI PROJECT OF RS.5,39,083/- OUT OF TOTAL ADDITION OF RS.6,90,273/-. THE LD.SR.DR ADOPTED THE FACTS A S STATED IN THE STATEMENT OF FACTS AND SUBMITTED THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. ON THE CONTRARY, LD.COUNSE L FOR THE ASSESSEE SHRI J.P.SHAH SUBMITTED THAT THE ORDER OF THE LD.CIT(A) IS JUSTIFIED. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS GIVEN A FINDING ON F ACT THAT THE EXPENSES OF RS.5,50,000/- REPRESENT REIMBURSEMENT OF EXPENSE S TO PARMAR BUILDERS AND DEVELOPERS OF VAPI. SO FAR AS THE AMOUNT OF RS .3,07,070/- INCLUDED THEREIN IS CONCERNED, THE BILLS ARE ACTUALLY PRODUC ED AND HENCE THERE IS NO JUSTIFICATION FOR THE ADDITION. THE LD.CIT(A) HAS ALSO GIVEN A FINDING ON FACT IN PARA-3.2 OF HIS ORDER, WHICH READS AS UNDER :- 3.2. I HAVE CONSIDERED THE ASSESSMENT ORDER AND TH E ABOVE SUBMISSIONS. ON CONSIDERATION OF THE SAME I FIND T HAT THE EXPENSES ITA NO.3802/AHD/2007 (BY REVENU E) AND CO NO.372/AHD/2007 (BY ASSESSEE) ACIT VS. PARMAR BUILDERS & DEVELOPERS ASST.YEAR 2003-04 - 4 - OF RS.5,50,000/- REPRESENT REIMBURSEMENT OF EXPENSE S TO PARMAR BUILDERS AND DEVELOPERS OF VAPI. SO FAR AS THE AMO UNT OF RS.3,07,070/- INCLUDED THEREIN IS CONCERNED, THE BI LLS ARE ACTUALLY PRODUCED AND HENCE THERE IS NO JUSTIFICATION FOR TH E ADDITION. IN RESPECT OF THE SUGGESTION THAT THERE IS EXCESS BILL OF RS.22,930/-, I FIND THAT THE AGGREGATE AMOUNT OF RS.5,50,000/-DOES NOT INCLUDE RS.3,30,000/- BUT ITINCLDUESRS.3,07,070/-. HENCE THIS OBSERVATION OF THE A.O. IN REMAND REPORT ARE NOT CORRECT. CON SIDERING THE ABOVE ASPECTS THE ADDITION IS DELETED TO THE EXTENT OF RS.3,30,000/- MADE BY THE ASSESSING OFFICER. IN RESPECT OF DISALLOWANCE OF METAL EXPENSES, AS RI GHTLY POINTED OUT BY THE A.O.THE BILLS ARE AVAILABLE ONLY FOR RS.45,2 19/- AND HENCE THE ASSESSING OFFICER HAD RIGHTLY MADE THE ADDITION FOR THE DIFFERENTIAL AMOUNT OF RS.1,54,781/-. IN RESPECT OF THE MISCELLANEOUS ITEMS, THE APPELLANT HAS PRODUCED COP IES OF VOUCHERS AND HENCE THE ADDITION OF RS.46,530/-IS DI RECTED TO BE DELETED. IN SO FAR AS THE ADDITION OF RS.1,40,264/- MADE OUT OF THE EXPENSES INCURRED BY THE APPELLANT HIMSELF IS CONCERNED, IT IS SUPPORTED BY VARIOUS VOUCHERS AND HENCE THE A.O. WAS NOT JUSTIFI ED IN MAKING THE DISALLOWANCE FOR THE SAME. THE ADDITION OF RS. 1,40,264/- IS DELETED. 5.1. THIS FINDING ON FACT IS NOT CONTROVERTED BY TH E REVENUE BY PLACING ANY OTHER CONTRARY MATERIAL ON RECORD, THEREFORE, W E DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A), SAME IS HE REBY UPHELD. THUS, THIS GROUND OF REVENUE IS REJECTED. 6. GROUND NO.2 IS AGAINST THE DELETION OF ADDITION OF RS.6,65,176/- U/S.40A(2)(B) OF THE ACT. THE LD.SR.DR SUBMITTED THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. HE SUP PORTED THE ORDER OF THE AO. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE S UPPORTED THE ORDER OF ITA NO.3802/AHD/2007 (BY REVENU E) AND CO NO.372/AHD/2007 (BY ASSESSEE) ACIT VS. PARMAR BUILDERS & DEVELOPERS ASST.YEAR 2003-04 - 5 - THE LD.CIT(A) AND SUBMITTED THAT LD.AO WAS NOT JUST IFIED IN MAKING THE ADDITION. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE LD.CIT(A) HAS DECIDED THIS ISSUE IN PARAS-4.1 & 4.2 OF HIS ORDER, WHICH ARE IN THE FOLLOWING TERMS:- 4.1. THE APPELLANT IN THIS CONNECTION SUBMITTED THAT THE APPELLANT AS WELL AS THE PARMAR CONSTRUCTION, VAPI, BOTH ARE ENGAGED IN THE BUSINESS OF CONSTRUCTION AND THE PAY MENT IS MADE ON SUB-CONTRACT GIVEN TO THEM. IT IS SUBMITTED THA T PARMAR CONSTRUCTION, VAPI HAD THUS NOT SUPPLIED ONLY MATER IAL BUT HAD UNDERTAKEN THE EXECUTION WORK APPLYING THEIR LABOUR ON DIFFERENT TYPES OF WORK LIKE FLOORING, WATER PROOFING, PLUMBI NG, DRAINAGE, MASONRY, EXCAVATION, ETC. THE BREAK-UP OF RS.28.84 LAKH IS GIVEN ON PAGE 8 OF THE SUBMISSIONS OF THE APPELLANT. IT IS SUBMITTED THAT FOR SUCH SERVICES THEY HAVE TO BE PAID. IT IS ALSO SUBMITTED THAT SECTION 40A(2)(B) CAN BE INVOKED IN RESPECT OF PAYM ENT OF EXPENDITURE TO RELATED PARTIES IF IN THE OPINION OF THE A.O. IT IS EXCESSIVE OR UNREASONABLE COMPARED TO THE FAIR MARK ET VALUE OF THE GOODS AND SERVICES, LEGITIMATE BUSINESS NEEDS AND B ENEFIT DERIVED BY THE APPELLANT. IT IS FOR THE A.O. TO ESTABLISH THAT PAYMENT IS EXCESSIVE LOOKING TO THE ABOVE ANGLE BEFORE HE CONC LUDES THAT THE PAYMENT IS EXCESSIVE. MERELY BECAUSE THE PAYMENT I S MADE TO RELATED CONCERN, SECTION 40A(2)(B) CANNOT BE APPLIE D. HE HAS TO CONSIDER THE ABOVE CRITERIAS BEFORE INVOKING SECTIO N 40A(2) OF I.T.ACT, 1961. THE A.O. HAS IN THE REMAND REPORT S TATED THAT AS THE SISTER CONCERN EARNED PROFIT FROM THE PAYMENT MADE BY THE APPELLANT, SUCH EXCESS PAYMENT IS TO BE DISALLOWED. 4.2. I HAVE CONSIDERED THE ASSESSMENT ORDER AND THE ABOVE SUBMISSIONS. THE ASSESSING OFFICER HAS MADE ADDITI ON FOR THE EXCESS PAYMENT ON THE GROUND THAT THE ASSESSEE HAS MADE PAYMENT OF RS.35 LAKH TO THE PARMAR CONSTRUCTION, VAPI WHER EAS THE EXPENSES INCURRED BY THEM FOR THE APPELLANTS WORK ARE OF RS.28,84,423/-. I APPRECIATE THE ARGUMENT THAT IT IS FOR THE ITA NO.3802/AHD/2007 (BY REVENU E) AND CO NO.372/AHD/2007 (BY ASSESSEE) ACIT VS. PARMAR BUILDERS & DEVELOPERS ASST.YEAR 2003-04 - 6 - ASSESSING OFFICER TO ESTABLISH THAT THE FAIR MARKET VALUE OF THE GOODS AND SERVICES WAS LESS THAN WHAT IS PAID BY TH E APPELLANT. IN THE APPELLANTS CASE IT IS NOT ESTABLISHED BY THE A .O. HE HAS MADE THE ADDITION ONLY FOR THE DIFFERENTIAL AMOUNT WHICH REPRESENT THE PAYMENT MADE BY THE APPELLANT AND THE CORRESPONDING COST AS PER THE BOOKS OF THE PAYEE. THE PAYEE HAS ACCOUNTED FO R THE RECEIPTS AND EXPENSES IN THEIR BOOKS. THUS MERELY BECAUSE T HE PAYMENT IS MORE THAN THEIR COST IT CANNOT BE CONCLUDED THAT TH E PAYMENT IS EXCESSIVE THAN THE FAIR MARKET VALUE. THE ADDITION MADE AT RS.6,65,176 BY INVOKING SECTION 40A(2) OF I.T.ACT, 1961 IS, THEREFORE, DIRECTED TO BE DELETED. 7.1. AS PER THE PROVISIONS OF SECTION 40A(2) OF THE I.T.ACT, THE AO IS REQUIRED TO DEMONSTRATE AS TO HOW THE PAYMENT MADE TO SISTER-CONCERN IS EXCESSIVE AND WHAT IS THE FAIR MARKET VALUE OF THE GOODS, SERVICES OR FACILITIES FOR WHICH THE PAYMENT HAS BEEN MADE BY T HE ASSESSEE. UNDISPUTEDLY, THE AO HAS NOT DEMONSTRATED THIS FACT , THEREFORE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A), S AME IS HEREBY UPHELD. THUS, THIS GROUND OF REVENUES APPEAL IS REJECTED. 8. GROUND NO.3 IS AGAINST THE DELETION OF ADDITION OF RS.6 LACS MADE AS WORK-IN-PROGRESS IN RESPECT OF CASTROL PROJECT. THE LD.SR.DR SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT TH E LD.CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. ON THE CONTRAR Y, LD.COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD.CIT(A) AND S UBMITTED THAT THE ORDER OF THE LD.CIT(A) IS JUSTIFIED AND IS BASED O N FACTS. THE LD.CIT(A) HAS GIVEN A FINDING ON FACT IN PARA-5.2 OF HIS ORDE R WHICH READS AS UNDER:- 5.2. I HAVE CONSIDERED THE ASSESSMENT ORDER AND TH E ABOVE SUBMISSIONS. THE A.O. HAS MADE THE ADDITION BY REF ERRING THE EXPENSES INCURRED BY PARMAR CONSTRUCTION, VAPI AND STATING T HAT IT INCLUDES BILLS RELATING TO SUBSEQUENT PERIOD. IT DOES NOT ESTABLI SH THAT THE BILLS ARE ITA NO.3802/AHD/2007 (BY REVENU E) AND CO NO.372/AHD/2007 (BY ASSESSEE) ACIT VS. PARMAR BUILDERS & DEVELOPERS ASST.YEAR 2003-04 - 7 - INCURRED BY THE APPELLANT. IT MAY BE FOR ANY OTHER WORK AND NOT RELATED TO APPELLANTS SITE. IT IS FURTHER SEEN THE BILLS ARE ACCOUNTED AS EXPENSES IN THE BOOKS OF PARMAR CONSTRUCTION, VAPI AND AS SU CH THESE EXPENSES ARE NOT CLAIMED IN THE BOOKS OF APPELLANT. HENCE I N MY VIEW ON FACTS OF THE APPELLANTS CASE, THE ADDITION IS UNJUSTIFIED A ND THE SAME IS DELETED. 8.1. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED T HE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE REVENUE HAS NOT PLACED ANY MATERIAL ON RECORD T O REBUT THE FINDING OF LD.CIT(A), THEREFORE, WE DO NOT FIND ANY INFIRMI TY IN THE ORDER OF THE LD.CIT(A), SAME IS HEREBY UPHELD. THUS, THIS GROUN D OF REVENUES APPEAL IS REJECTED. 9. GROUND NO.4 IS AGAINST THE DELETION OF ADDITION OF RS.1,24,800/- MADE OUT OF VARIOUS EXPENSES. THE LD.SR.DR SUPPORT ED THE ORDER OF THE AO. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE S UPPORTED THE ORDER OF THE LD.CIT(A) AND SUBMITTED THAT SO FAR AS THIS DEL ETION OF ADDITION IS CONCERNED, THE LD.CIT(A) HAS GIVEN A FINDING ON FAC T AND THIS FINDING IS NOT REBUTTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD. 9.1. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED T HE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS GIVEN A FINDING ON F ACT THAT HE HAD GONE THROUGH THE COPIES OF BILLS FURNISHED IN THE PAPER- BOOK BY THE ASSESSEE AND THE BILLS WHICH ARE CLAIMED TO HAVE BEEN ATTACH ED TO THE SUBMISSIONS ARE NOT TALLIED EXCEPT THE AMOUNT OF RS.1,24,800/- PAID TO ELECTRICITY DEPARTMENT AND THE PRINTING EXPENSES OF RS.32,800/- . ACCORDINGLY, LD.CIT(A) DELETED THE ADDITION. THIS FINDING ON FA CT OF THE LD.CIT(A) IS NOT CONTROVERTED BY THE REVENUE BY PLACING ANY MATE RIAL ON RECORD. THUS, THIS GROUND OF REVENUES APPEAL IS REJECTED. ITA NO.3802/AHD/2007 (BY REVENU E) AND CO NO.372/AHD/2007 (BY ASSESSEE) ACIT VS. PARMAR BUILDERS & DEVELOPERS ASST.YEAR 2003-04 - 8 - 10. GROUND NO.5 IS AGAINST THE DELETION OF ADDITION MADE U/S.40A(2)(B) OF THE ACT. OF RS.4,26,843/- AND RS.3 ,91,712/-. THE LD.SR.DR SUPPORTED THE ORDER OF THE AO, WHEREAS THE LD.COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD.CIT(A). 10.1. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS DECIDED THIS ISSUE I N PARA-6.2 OF HIS ORDER BY OBSERVING AS UNDER:- 6.2. I HAVE CONSIDERED THE ASSESSMENT ORDER AND THE ABOVE SUBMISSIONS. IN SO FAR AS THE ADDITION OF RS.3,91, 712/- IS CONCERNED IN THE CASE OF PARMAR BUILDERS AND DEVELOPERS OF VAPI, I HAVE ALREADY HELD THAT IT RELATES TO THEIR PROJECT. HENCE DISAL LOWANCE OF SUCH EXPENSES IS NOT JUSTIFIED. SO FAR AS THE ADDITION OF RS.4,26,843/- IS CONCERNED, THE ASSESSEE HAS CLAIMED THAT IT HAS INC URRED EXPENSES OF RS.45.99 LAKH. IN THE REMAND REPORT IT IS STATED B Y THE A.O. THAT BILLS FOR RS.3,22,970/- ARE NOT AVAILABLE WHICH INCLUDES SALARY OF MISCELLANEOUS EXPENSES. HENCE HE HAS REPORTED THAT THE SAME ARE NOT PROPERLY SUPPORTED BY THE VOUCHERS. IN MY VIEW THE ISSUE INVOLVED IS THAT THE EXPENDITURE PAID BY THE APPELLANT IS NOT E XCESSIVE, IF WE CONSIDER THE EXPENSES OF RS.45.99 LAKH REFERRED TO BY THE APPELLANT. HENCE QUESTION OF APPLYING SECTION 40A(2)(B) DOES N OT ARISE. IN SO FAR AS THE REMAND REPORT IS CONCERNED, THE ALLEGATION T HAT BILLS ARE NOT AVAILABLE IS CONTRADICTORY TO THE NEXT OBSERVATION THAT IT REPRESENT SALARY PAYMENT. FURTHER, BILLS ARE STATED TO BE SE LF MADE BUT THE SAID BILLS ARE FOR MISCELLANEOUS EXPENSES AND HENCE THE OBSERVATION OF THE A.O. IN REMAND REPORT ARE NOT ACCEPTED. BOTH THE A DDITIONS ARE DELETED. 10.2. MOREOVER, THE AO HAS NOT DEMONSTRATED HOW TH ESE EXPENSES ARE EXCESSIVE AND WHAT IS THE FAIR MARKET VALUE OF SUC H EXPENSES. THE REVENUE COULD NOT POINT OUT ANYTHING ON THE FINDING OF THE LD.CIT(A) BY ITA NO.3802/AHD/2007 (BY REVENU E) AND CO NO.372/AHD/2007 (BY ASSESSEE) ACIT VS. PARMAR BUILDERS & DEVELOPERS ASST.YEAR 2003-04 - 9 - PLACING CONTRARY MATERIAL ON RECORD. THUS, THIS GR OUND OF REVENUES APPEAL IS REJECTED. 11. GROUND NO.6 IS GENERAL IN NATURE REQUIRE NO IND EPENDENT ADJUDICATION. 12. IN THE RESULT, REVENUES APPEAL IS DISMISSED. 13. NOW,WE TAKE UP THE ASSESSEES CROSS-OBJECTION N O.372/AHD/2007 FOR AY 2003-04 (IN ITA NO.3802/AHD/2007 FOR AY 2003 -04). THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN ITS CR OSS-OBJECTION:- I. DISALLOWANCE OUT OF FALANDI PROJECT : ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN SUSTA INING DISALLOWANCE OF RS.1,54,781/- IN RESPECT OF METAL E XPENDITURE. II. DISALLOWANCE OF RS.4,21,645/- IN RESPECT OF PAYMENT TO PARMAR CONSTRUCTION, SILVASSA: ON THE FACTS AND CIRCUMSTANCES OF THE DISALLOWANCE U/S.40A(2)(B) HAS BEEN WRONGLY SUSTAINED. III. DISALLOWANCE OUT OF EXPENSES : ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN SUSTA INING DISALLOWANCE OF RS.1,66,636/- OUT OF RS.3,24,236/-. IV. MISCELLANEOUS : (1) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN CONSIDERING GROUND REGARDING INTEREST U/S.234B OF T HE ACT. (2) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR VARY AN Y OF THE GROUNDS OF CROSS OBJECTION. 13.1. GROUND NO.I IS AGAINST IN SUSTAINING DISALLOW ANCE OF RS.1,54,781/- IN RESPECT OF METAL EXPENDITURE. THE LD.COUNSEL F OR THE ASSESSEE SUBMITTED THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN S USTAINING THE ADDITION. ITA NO.3802/AHD/2007 (BY REVENU E) AND CO NO.372/AHD/2007 (BY ASSESSEE) ACIT VS. PARMAR BUILDERS & DEVELOPERS ASST.YEAR 2003-04 - 10 - ON THE CONTRARY, SR.DR SUPPORTED THE ORDER OF THE L D.CIT(A) ON THIS ISSUE. 14. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS GIVEN A FINDING ON F ACT THAT THE BILLS ARE AVAILABLE ONLY FOR RS.45,219/- AND DIFFERENTIAL AMO UNT OF RS.1,54,781/- WAS SUSTAINED. THE ASSESSEE HAS NOT PRODUCED ANY C ONTRARY MATERIAL, THEREFORE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A), SAME IS HEREBY UPHELD. THUS, THIS GROUND OF ASSESSEES CROSS-OBJECTION IS REJECTED. 15. GROUND NO.II IS AGAINST THE DISALLOWANCE OF RS. 4,21,645/- MADE U/S.40A(2)(B) OF THE ACT IN RESPECT OF PAYMENT TO PARMAR CONSTRUCTION, SILVASSA. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTE D THAT THE ORDER OF THE LD.CIT(A) IS NOT JUSTIFIED IN DISALLOWING THE CLAIM AND SUSTAINING THE ADDITION. 16. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS GIVEN A FINDING ON F ACT IN PARA-7.2 OF HIS ORDER BY OBSERVING AS UNDER:- 7.2. I HAVE CONSIDERED THE ASSESSMENT ORDER AND TH E ABOVE SUBMISSIONS. I FIND THAT THOUGH THE ASSESSEE HAS C LAIMED TO HAVE SUBMITTED ALONG WITH DETAILS, COPIES OF BILLS, THE FIGURES OF THE BILLS ATTACHED DO NOT TALLY WITH THE CHART OF BILLS GIVEN BY THEM. I THEREFORE, DO NOT APPRECIATE THE SUBMISSIONS OF THE APPELLANT IN ITA NO.3802/AHD/2007 (BY REVENU E) AND CO NO.372/AHD/2007 (BY ASSESSEE) ACIT VS. PARMAR BUILDERS & DEVELOPERS ASST.YEAR 2003-04 - 11 - THIS BEHALF AND HOLD THAT THE ASSESSING OFFICER HAD JUSTIFIABLY MADE THE ADDITION FOR UNVERIFIABLE EXPENSES. THE ADDITI ON OF RS.4,21,645/- IS SUSTAINED. 16.1. THIS FINDING OF THE LD.CIT(A) IS NOT CONTROVE RTED BY THE LD.COUNSEL FOR THE ASSESSEE BY PLACING ANY CONTRARY MATERIAL O N RECORD. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD .CIT(A), SAME IS UPHELD. THUS, THIS GROUND OF ASSESSEES CROSS-OBJE CTION IS REJECTED. 17. GROUND NO.III IS AGAINST IN SUSTAINING THE DISA LLOWANCE OF RS.1,66,636/- OUT OF RS.3,24,236/-. THE LD.COUNS EL FOR THE ASSESSEE SUBMITTED THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN S USTAINING THE ADDITION AND SUBMITTED THAT THE ASSESSEE HAS PRODUCED ALL TH E RELEVANT MATERIAL. ON THE CONTRARY, LD.SR.DR HAS SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 18. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS GIVEN A FINDING ON F ACT IN PARA8.2 OF HIS ORDER BY OBSERVING AS UNDER:- 8.2. I HAVE CONSIDERED THE ASSESSMENT ORDER AND TH E ABOVE SUBMISSIONS. I HAVE ALSO GONE THROUGH THE COPIES O F BILLS FURNISHED IN THE PAPER-BOOK. IT IS SEEN THAT THE BILLS WHICH AR E CLAIMED TO HAVE BEEN ATTACHED TO THE SUBMISSIONS ARE NOT TALLIED EXCEPT THE AMOUNT OF RS.1,24,800/- PAID TO ELECTRICITY DEPARTMENT AND TH E PRINTING EXPENSES OF RS.32,800. FOR THE BALANCE AMOUNT THE ASSESSEE HAS NOT BEEN ABLE TO GIVE SUPPORTING EVIDENCE/RECEIPTS/PROPER VOUCHERS. IT IS CLAIMED TO BE THE MASONRY WORK. BUT IS IT NOT SIGNED NOR ACKNOWL EDGED THE PAYMENTS MADE. NO DETAILS OF THE PAYEE ARE MENTIONED ON SUC H SHEETS. IT IS ALSO SEEN THAT PAGE 42 AND 43 ARE THE ASSESSEES LEDGER RECORD AND NOT SUPPORTING BILLS. THEREFORE, ON CONSIDERATION OF T HE FACTS, I DELETE THE ADDITION OF RS.1,24,800/- ON ACCOUNT OF ELECTRICITY EXPENSES AND OF ITA NO.3802/AHD/2007 (BY REVENU E) AND CO NO.372/AHD/2007 (BY ASSESSEE) ACIT VS. PARMAR BUILDERS & DEVELOPERS ASST.YEAR 2003-04 - 12 - RS.32,800/- IN ACCOUNT OF PAINTING EXPENSES AND BAL ANCE ADDITION MADE BY THE A.O. IS UPHELD. THE APPELLANT GETS PART REL IEF ON THIS ACCOUNT. 18.1. THIS FINDING OF THE LD.CIT(A) HAS NOT BEEN CO NTROVERTED BY THE LD.COUNSEL FOR THE ASSESSEE BY PLACING ANY MATERIAL ON RECORD. THEREFORE, THIS GROUND OF ASSESSEES CROSS-OBJECTION IS REJECT ED. 19. GROUND NO.IV IS AGAINST LEVY OF INTEREST U/S.23 4B OF THE ACT WHICH IS CONSEQUENTIAL IN NATURE AND THE SAME IS REJECTED AS SUCH. 20. IN THE COMBINED RESULT, REVENUES APPEAL AS WEL L AS CROSS- OBJECTION FILED BY THE ASSESSEE BOTH ARE DISMISSED. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD/- ( .. ) ($ %&) ! ! ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 11/07/2014 7.., '.../ T.C. NAIR, SR. PS 4 1 .&8 98)& 4 1 .&8 98)& 4 1 .&8 98)& 4 1 .&8 98)&/ COPY OF THE ORDER FORWARDED TO : 1. *- / THE APPELLANT 2. ./*- / THE RESPONDENT. 3. ## & $: / CONCERNED CIT 4. $:() / THE CIT(A)-II, AHMEDABAD 5. 8'%; .& , , / DR, ITAT, AHMEDABAD 6. ;( <0 / GUARD FILE. 4$ 4$ 4$ 4$ / BY ORDER, /8& .& //TRUE COPY// = == =/ // / #+ #+ #+ #+ ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD