The Income-tax Officer, Jalandhar V. Shri Charanjit Singh Kanwar, Kartarpur

ITA 382/ASR/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57403 (ITAT-AMRITSAR)
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 23-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIK CHAND
• Assessee Lawyers: Y K SUD

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NOS. 382 & 385(ASR)/2011 ASSESSMENT YEAR:2007-08 & 2008-09 PAN:AESPK0243F INCOME TAX OFFICER, VS. SH. CHARANJIT SINGH KANWAR , WARD IV(2), JALANDHAR. THE FORT, KARTARPUR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. AMRIK CHAND, DR RESPONDENT BY:SH. Y.K. SUD, CA DATE OF HEARING :14/03/2012 DATE OF PRONOUNCEMENT:20/03/2012 ORDER PERBENCH; THESE TWO APPEALS OF THE REVENUE ARISE FROM TWO DI FFERENT ORDERS OF THE CIT(A), JALANDHAR, EACH DATED 24/03/2011 AND 31 /03/2011 FOR THE ASSESSMENT YEARS 2007-08 & 2008-09 RESPECTIVELY. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL IN ITA NO.382(ASR)/2011 FOR THE .Y. 2007-08: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.27, 60,300/- MADE 2 BY THE ASSESSING OFFICER BY DISALLOWING EXPENDITURE INCURRED FOR PERFORMANCE OF THE AKHAND PATH. 2. WHILE DOING SO, LD. CIT(A) HAS FAILED TO APPRECI ATE THAT THE EXPENDITURE ON AKHAND PATH WAS DISALLOWED BY THE AS SESSING OFFICER AFTER EXAMINING THE ACCOUNTING METHOD OF TH E ASSESSEE AND ALSO POINTED OUT NUMEROUS DEFECTS. 3. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) B E SET ASIDE AND THAT OF THE A.O. RESTORED. 4. THE APPELLANT REQUESTS FOR LEAVE TO ADD OR AMEND OR ALTER THE GROUNDS OF APPEALS BEFORE THE APPEAL IS HEARD AND D ISPOSED OF. 3. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL IN ITA NO.385(ASR)/2011 FOR THE .Y. 2009-09: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.61, 21,800/- MADE BY THE ASSESSING OFFICER BY DISALLOWING EXPENDITURE INCURRED FOR PERFORMANCE OF THE AKHAND PATH. 2. WHILE DOING SO, LD. CIT(A) HAS FAILED TO APPRECI ATE THAT THE EXPENDITURE ON AKHAND PATH WAS DISALLOWED BY THE AS SESSING OFFICER AFTER EXAMINING THE ACCOUNTING METHOD OF TH E ASSESSEE AND ALSO POINTED OUT NUMEROUS DEFECTS. 3 IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) B E SET ASIDE AND THAT OF THE A.O. RESTORED. 4. THE APPELLANT REQUESTS FOR LEAVE TO ADD OR AMEND OR ALTER THE GROUNDS OF APPEALS BEFORE THE APPEAL IS HEARD AND D ISPOSED OF. 4. BOTH THE APPEALS ARE BEING TAKEN BY THIS CONSOLI DATED ORDER SINCE THE ISSUE INVOLVED IN BOTH THE APPEALS IS ON IDENTICAL FACTS. 3 5. FIRST OF ALL, WE TAKE UP APPEAL OF THE REVENUE I N ITA NO.382(ASR)/2011 FOR THE ASSESSMENT YEAR 2007-08. T HE BRIEF FACTS AS PER AOS ORDER ARE AS UNDER: 5. THE BOOKS OF ACCOUNTS WERE EXAMINED, IN PARTICU LAR THE RECEIPTS REFLECTED FROM MAIRI I.E. DERA BABA VADBHAG SINGH. THE EXAMINATION LED TO ISSUANCE OF SHOW CAUSE NOTICE DATED 18.12.20 09 DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN YOU R CASE, IT WAS POINTED OUT TO YOU THAT RECEIPT SHOWN BY YOU IN THE CREDIT SIDE OF THE PROFIT AND LOSS A/C AMOUNTING TO RS.30,67,000/- AS AKHAND PATH RECEIPT (MAIRI). TO THIS REFER TO THE ASSESSMENT PROCEEDINGS FOR THE A.Y.2007-08 IN YOUR CASE. IN THE LIGHT OF THE ACCOU NTING OF THE RECEIPT AND THE EXPLANATION FURNI9SHED VIDE YOUR LETTER DAT ED 24.11.2009 AS PER YOUR VERSION THE BOOKING FOR THE AKHAND PATH BEING DONE ON REGULAR BASIS AS DULY ACCOUNTED IN THE BUSINESS OF ACCOUNT, BUT IT IS SEEN THAT YOU ARE TREATING THE SAID BOOKING AS ADVA NCE SUBJECT TO THE PERFORMANCE OF THE AKHAND PATH. ON COMPLETION OF THE AKHAND PATH THE SAID AMOUNTS ARE CREDITED AS INCOME. IT W AS FURTHER MENTIONED THAT EXPENSES ARE SEPARATELY DEBITED AND IT IS BOOKED ONLY WHEN THE AKHAND PATH HAS BEEN PERFORMED. THE SAID VERSION OF YOURS HAVE BEEN ANALYSED IN THE LIGHT OF THE DOCUMENTARY EVIDENCE MAINTAINED AT YOUR END IN THE FORM OF RECEIPTS. THE PERUSAL OF THE RELEVANT RECEIPT REVEALS THAT MA JORITY GETS CONSTITUTED IN THE NATURE OF GENERAL RECEIPT WHILE A FEW ARE SUBJECT TO THE PERFORMANCE OF THE AKHAND PATH. IT IS SEEN FRO M THE RELEVANT ACCOUNT FURNISHED BY YOU FOR ACCOUNTING RECEIPTS TH AT EVEN THE RECEIPT WHICH HAVE BEEN ISSUED SUBJECT TO THE PERFORMANCE O F THE AKHAND PATH. THE AKHAND PATH WAS PERFORMED WITHIN A PERIO D OF 3 MONTHS FROM THE DATE OF RECEIPT AS HAVE BEEN INCORPORATED ON THE RELEVANT RECEIPTS. IN THE LIGHT OF SAID FACTUAL DETAILS ON T HE RECEIPTS YOUR CLAIM FOR BOOKING THE EXPENDITURE ON THE BASIS THAT THE AKHAND PATH HAVE BEEN PERFORMED IN THE RELEVANT YEAR IS NOT ADMISSIB LE PARSE BECAUSE THE RECEIPTS REVEAL PERFORMANCE OF THE RITUAL IN TH E EARLIER YEARS THAN THE YEAR UNDER CONSIDERATION. AS PER YOUR VERSION T HE EXPENDITURE IS BOOKED ON THE PERFORMANCE OF THE AKHAND PATH AND THE RELEVANT MATERIAL CLEARLY PROJECT THAT THE RELIGIOUS PATH HAVE ALREADY BEEN PERFORMED IN THE YEARS 2003/2004 AND ACCORDINGLY TH E SAME SHOULD NOT HAVE BEEN BOOKED AS EXPENDITURE OF THE RELEVANT YEAR. IN THE LIGHT 4 OF THE SAID FACT, PURPOSE TO DISALLOW THE CLAIM OF EXPENDITURE MADE BY YOU AT A SUM OF RS.27,60,300/- MADE BY YOU IN THE R ETURN OF INCOME./ YOUR EXPLANATION IF ANY SHOULD REACH IN THE OFFICE OF THE UNDERSIGNED ON 22.12.2009 AT 11.00 A.M. THE PERUSAL OF THE RECEIPTS REVEALS THAT THE MAJOR CHUNK OF THE SAME GETS CONSTITUTED BY RECEIPTS OF GENERAL NATURE WHICH ON THE FACE OF IT ARE IN THE NATURE OF DONATION AS THE DEVOTEES HAVE NOT PLACED ANY CONDITION FOR PERFORMANCE OF AKHAND PATH WHILE DO NATING THE PREPRINTED AMOUNT OF RS.1000/- FOR EACH RECEIPT. IT GETS REINFORCED FROM THE FACT THAT WHEREVER SPECIFIC PERFORMANCE WA S REQUIRED TO BE UNDERTAKEN THE RELEVANT RECEIPT INCORPORATE THE SAI D FACT. FOR INSTANCE CERTAIN REPLY GIVE THE REMARKS JANAMDIN KI KHUSI W HICH ARDAS BINTI AND MAJORITY OF RECEIPTS DO NOT INDICATE THE FACT O F STARTING DATE OF AKHAND PATH AND BHOG ALONG WITH DATE OF THE AKHA ND PATH. IN THE LIGHT OF THE SAID DESCRIPTION ON THE RECEIPTS I PUR POSE TO ADOPT A FIGURE OF RECEIPT A SUM OF RS.49,41,695/- INSTEAD OF THE R ECEIPTS ACCOUNTED IN THE PROFIT AND LOSS ACCOUNT ON A SUM OF RS.30,67,00 0/-. THE SAID PREPOSITION OF THE ADDITION OF RS.18,74,695/- SUBJE CT TO EXPLANATION TO BE TENDERED BY YOU ON THE STIPULATED DATE AS ABOVE WHICH IN TURN WITHOUT SAYING HAVE TO BE SUPPORTED BY DOCUMENTARY EVIDENCE. THE ASSESSEE IN RESPONSE TO THE SAID SHOW CAUSE NOT ICE SUBMITTED HIS REPLY DATED 22.12.2009 AS UNDER: THIS HAS THE REFERENCE TO YOUR LETTER DATED 18.12. 2009 IN THE ABOVE CASE. AS REGARDS YOUR OBSERVATIONS IN THE SAI D LETTER IT IS INFORMED THAT ONCE AGAIN CLARIFIED THAT IT IS ONLY AFTER THE PERFORMANCE OF THE AKHAND PATH THAT THE RECEIPT IS ENTERED AND THE EXPENSES TO THE SAID AKHAND PATH ENTERED IN BOOK OF ACCOUNTS AND W HILE ANALYZING THE SAME IN LIGHT OF THE EVIDENCE YOU HAVE PROPOSED TO DISALLOW THE CLAIM OF EXPENDITURE MADE BY THE ASSESSEE AT RS.27 ,60,300/-. THIS ACTION OF YOURS IS TOTALLY MISPLACED SINCE IT IS ON LY AFTER THE PERFORMANCE OF PATH THE RECEIPT AND EXPENSES ARE EN TERED. TO JUSTIFY THE CLAIM OF SAID EXPENSES THE ASSESSEE IS ENCLOSIN G HEREWITH THE DETAILS OF PAYMENT MADE TO PATHIES FOR THE PERFORMA NCE OF THE PATHS WHICH IS IN PROPORTION TO THE RECEIPTS. THE ASSESSE E WOULD LIKE TO DRAW YOUR KIND ATTENTION TO THE DETAILS OF AKHAND PATHS PERFORMED IN THE YEAR AND SUBSEQUENT ASSESSMENT YEARS WHEREIN THE PE RFORMANCE OF THE PATHS HAS BEEN SHOWN AS RECEIPTS ON ACCOUNT OF PATH S PERFORMED AND THE BALANCE AS ADVANCE HAS BEEN SHOWN AS LIABILITY IN THE BALANCE SHEET AND A PERUSAL OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNTS 5 FILED BY THE ASSESSEE CLEARLY JUSTIFY THE SAID CLAI M OF THE ASSESSEE. FURTHER TO THE ABOVE A SEPARATE DETAILS OF THE ADVA NCE AGAINST AKHAND PATH ADD ADVANCE RECEIPTS LESS PERFORMANCE OF PATHS DURING THE YEAR ARE ALSO ATTACHED AS A SUPPORT TO THE CLAIM. SINCE ALL THE EXPENSES ENTERED ARE AGAINST RECEIPTS FOR PERFORMANCE OF PAT H WHICH ARE PAID TO THE PATHIES AND ARE DULY SUPPORTED BY DETAILS OF PAYMENTS MADE TO PATHIES AGAINST SUCH PERFORMANCE THE SAME CANNOT BE DOUBTED EVEN IF IN A FEW CASES THE PATH HAVE BEEN PERFORMED ON OUT OF TURN BASIS. THE PATHIES DO NOT PERFORM SUCH PATH BUT THE PAYMENTS A RE MADE TO THEM ONLY WHEN THE SERIAL OF THE SAID PATHS ARRIVE. THIS PRINCIPAL HAD BEEN FOLLOWED BY THE ASSESSEE OVER A PERIOD OF TIME AND THIS FURTHER STRENGTHENS THE CLAIM OF THE ASSESSEE ABOUT THE BOO KING OF PATHS AND OF SHOWING THE INCOME/BOOKING THE EXPENSE ONLY AFTE R PERFORMANCE OF PATHS. THUS, GIVEN THE ABOVE DETAILED FACTS NO SUCH DISALLOWANCES ARE CALLED FOR. FURTHER, TO THE ABOVE, THE ASSESSEE DUR ING THE YEAR HAD ONLY CLAIMED THE EXPENSES AGAINST THE PATHS ACTUALL Y PERFORMED AND IN CASE YOU HAVE ANY MATERIAL THAT SUGGEST EXCESS CLA IM OF EXPENSE THE SAME MAY KINDLY BE CONFRONTED TO THE ASSESSEE FOR A DETAILED REPLY. NOW COMING TO YOUR OBSERVATION THAT RECEIPTS ISSUED ARE OF GENERAL NATURE DOES NOT HOLD GOOD SINCE ON EVERY RE CEIPT IT IS MENTIONED THAT IT IS RECEIPT RECEIPT SHRI AKHAND P ATHI SAHIB JI, THUS THIS CONTENTION OF YOURS DOES NOT STAND AND IT IS REQUESTED TO KINDLY CONFRONT US WITH SUCH RECEIPTS WHICH GENERAL IN NATURE AS ALLEGED BY YOU. SINCE ON ALL THE RECEIPTS RECEIPT SHRI AKHAND PATH SAHIB JI IS CLEARLY MENTIONED THERE IS NO GENERAL RECEIPT OTHER THAN RECEIPT OF AKHAND PATH. MOREOVER YOUR CLAIM THAT IT IS A DONATION ALSO DOES NOT HOLD TRUE ON THIS SCORE SINCE THE RECEIPT DULY MAKES MEN TION OF AKHAND PATH AT THE HEAD AND BOTTOM OF EACH RECEIPTS. AS R EGARDS REMARKS ON THE RECEIPTS THE DEVOTEES AT TIMES GO RECORDED T HE PURPOSES FOR WHICH THE AKHAND PATH IS TO BE PERFORMED AND AT THE TIME OF BHOG OF SUCH PATH SPECIAL ARDAS WITH REGARDS TO THE SAME IS DONE. AS REGARDS THE OTHER RECEIPTS ON WHICH NO SUCH DESCRIP TION IS GIVEN THE SAME ARE ALSO ON ACCOUNT OF AKHAND PATH BOOKED BY T HE DEVOTEES. THE MENTIONING OF THE DATES ON SOME OF THE RECEIPTS SIN CE THE PATHIES DO PERFORM SAME PATH ON OUT OF TURN BASIS BUT THE PATH I8ES ARE PAID ONLY ON SUCH DATES AS THE SERIAL NUMBER ARRIVED AND DURI NG THE YEAR ONLY PAYMENTS MADE TO PATHIES PERTAINING TO AKHAND PATH PERFORMED DURING THE YEAR HAVE BEEN CLAIMED AS EXPENSE AND I NCOME ALSO CONSIDERED AGAINST SUCH PATH. 6 AS REGARDS YOUR ADOPTION OF FIGURE OF RS.49,41,694/ - AS RECEIPTS INSTEAD OF RS.30,67,000/- THE SAME IS UNCA LLED FOR SINCE AS PER THE DETAILS ATTACHED TO THE REPLY THE SAID RECE IPTS ARE THE TOTAL RECEIPTS DURING THE YEAR WHICH IS PART OF THE ADVAN CES SHOWN IN THE BALANCE SHEET AT ADVANCE RECEIPTS FROM AKHAND PATH SAHIB JI (MAIRI) HP. WHILE THE PATHS PERFORMED HAVE DULY BEE N CONSIDERED IN THE PATHS PERFORMED ACCOUNT WHICH IS AS PER THE LAR I OF THE PATHS BOOKED AND TAKEN INTO THE INCOME. IN ADDITION TO THE ABOVE ALL THE CASH RECEIPTS OF A KHAND PATHS AT MAIRI ARE ACCOUNTED FOR IN MY REGULAR BOOKS OF A CCOUNT AND THE FOLLOWING DAY THE SAID MONEY IS DEPOSITED IN SAVING BANK ACCOUNT NO. 3590 WITH UCO BANK NEHRIAN (HP) AND ACCOUNT STATEME NTS HAVE DULY BEEN PLACED ON RECORD. 6. BEFORE EVALUATION OF THE ASSESSEES ABOVE MENTIO NED REPLY, I WENT THROUGH THE BOOKS OF ACCOUNT AND ALSO THROUGH THE RECEIPTS WHICH HAVE BEEN MAINTAINED BY THE ASSESSEE FOR PERF ORMANCE OF RELIGIOUS ACTIVITY AT MAIRI (HP). AFTER CAREFULLY C ONSIDERING THE DESCRIPTION ON THE RECEIPTS THE SAME WERE IMPOUNDED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IN THE LIGHT OF T HE IMPOUNDED MATERIAL VIS--VIS THE REPLY OF THE ASSESSEE REPROD UCED ABOVE, IT IS ESSENTIAL TO DETERMINE THE METHOD OF ACCOUNTING FOL LOWED BY THE ASSESSEE IN ACCOUNTING RECEIPTS AS WELL AS BOOKING OF EXPENDITURE AGAINST THE RECEIPTS. THIS IS A CASE OF THE ASSESSE E THAT RECEIPT IS ENTERED AND ACCOUNTED ONLY AFTER THE PERFORMANCE OF THE AKHAND PATH, WHICH MEANS IF THE AKHAND PATH IS NOT PERF ORMED IT IS REFLECTED AS ADVANCE. ON THE OTHER HAND, T IS ALSO THE CASE OF THE ASSESSEE THAT THE EXPENSES ARE ALSO BOOKED ONLY AFT ER THE PERFORMANCE OF THE AKHAND PATH IT WAS ALSO THE PLEA THAT THE EXPENSES ARE BOOKED VIS--VIS THE SERIAL NUMBER OF THE RECEIPTS WHICH A CCORDING TO THE ASSESSEE WERE RECEIVED AS BOOKING AS IN THE YEAR 20 03-04 AND ONLY WHEN THE AKHAND PATH WAS PERFORMED IN THE RELEVAN T YEAR THE EXPENDITURE WAS BOOKED. IT WAS ALSO THE PLEA THAT T HERE ARE NO GENERAL RECEIPTS AS ALL RECEIPTS ARE FOR THE PERFORMANCE OF AKHAND PATH ONLY. 6.2. I HAVE CAREFULLY EVALUATED THE SAID SUBMISSION S OF THE ASSESSEE IN THE LIGHT OF DOCUMENTARY EVIDENCE MAINTAINED IN THIS CASE., PART OF WHICH HAVE ALSO BEEN IMPOUNDED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE DEBIT ON ACCOUNT OF EXPENDITURE AP PEARED AT A SUM OF ` . 27,60,300/- AND THE EXPENDITURE IF FOR THE RECEIP TS ISSUED AS BOOKED AS FAR AS IN THE YEAR 2003-04. VARIOUS RECEI PTS CLEARLY REFLECT 7 THAT THE AKHAND PATH WAS PERFORMED IN THE YEAR OF RECEIPT ONLY I.E. 2003 AND SAME WAS THE POSITION IN THE RECEIPTS ISSU ED IN THE YEAR 2004. IN THE LIGHT OF SAID FACT ASSESSEE WAS DULY CONFRONTED AS TO HOW ITS METHOD OF ACCOUNTING VIA-A-VIS BOOKING OF EXPEN DITURE IS ACCEPTABLE WHEN THE FACTS INCORPORATED ON THE RELEV ANT RECEIPTS ARE DIFFERENT. THE GENERAL PLEA TAKEN WAS THAT THE EXP ENSES HAVE BEEN BOOKED VIA-A-VIS THE SERIAL NUMBER OF THE RECEIPT B UT IT IS NOT ACCEPTABLE BECAUSE ASSESSEE CLEARLY MENTIONED THAT THE RECEIPTS AS WELL AS EXPENSES ARE BOOKED AFTER THE PERFORMANCE O F THE AKHAND PATH. THERE IS NOT ONE INSTANCE BUT THREE ARE VARI OUS INSTANCES IN THE IMPOUNDED MATERIAL WHICH REVEALS THAT THE PATH HAVI NG BEEN PERFORMED, THE EXPENDITURE SHOULD HAVE BEEN BOOKED IN THE EARLIER YEAR THAN IN THE RELEVANT YEAR. THE SAID IS ALSO T HE POSITION IN THE CURRENT YEAR I.E. THE YEAR UNDER CONSIDERATION AND NEITHER ASSESSEE HAS ACCOUNTED THE RECEIPTS NOR IT HAS CLAIMED THE E XPENDITURE WHEN THE AKHAND PATH HAVE ALREADY BEEN PERFORMED. THE SAME TOTAL OF DISCUSSION CLINCHINGLY POINTS OUT THAT THE METHOD O F ACCOUNTING FOLLOWED BY THE ASSESSEE CAN NOT BE ACCEPTED VIS-A- VIA ITS OWN DOCUMENTARY EVIDENCE WHICH HAVE BEEN MAINTAINED BY THE ASSESSEE. THIS LEADS TO THE CONCLUSION THAT THE EXPENDITURE B OOKED CAN NOT BE ALLOWED AS THE EXPENDITURE OF THE RELEVANT YEAR. THE SAID CONCLUSION FURTHER GETS SUBSTANTIATED THE FOLLOWING FACTS AS DISCUSSED THEREIN UNDER :- 6.3 IT HAS BEEN THE PLEA OF THE ASSESSEE THAT ALL THE RECEIPTS WERE FOR AKHAND PATH ONLY AND ITS PERFORMANCE TAKES PLACE AFTER 2 TO 3 YEARS FROM THE INITIAL BOOKING BY THE DEVOTEES AND CERTAI N PATHS PERFORMED IN BETWEEN WERE ATTRIBUTED TO THE PATHIES WHO HAVE PER FORMED THEM OUT OF TURN BASIS. GOING BY THE SAID CLAIM ASSESSEE WAS A SKED AS TO HOW A PARTICULAR DEVOTE WHO HAS BOOKED THE PATH IN THE EA RLIER YEAR WILL BE AVAILABLE AT THE SITE FOR THE PERFORMANCE OF THE A KHAND PATH AFTER THE PERIOD 2 TO 3 YEARS FROM THE DATE OF BOOKING. THE ASSESSEE IN SUPPORT OF HIS CONTENTION FAILED TO FILE ANY DOCUMENTARY EVIDE NCE BUT INSISTED ON HIS STAND THAT THE AKHAND PATH IS PERFORMED AFTER THE PERIOD OF 2 TO 3 YEARS, BEING THE WAITING PERIOD. THE SAID PLEA IS A LSO NOT ACCEPTED BECAUSE VARIOUS RECEIPTS ARE NOT RELATABLE TO THE P ERFORMANCE OF THE AKHAND PATH AS THEY BEAR THE INSCRIPTIONS. ROH DI SHANTY VASTE 8 PARIVAR DI CHARDHI KALA VASTE JANAMDIN DI KHUSHI VICH JASPAL SINGH DI TANDRUSTI DE VASTE HARVINDER SINGH DE JAN DE KHUSHI VASTE RAJINDER KAUR DE JAN DE KHUSHI VASTE SARABJIT KAUR DE SHADI DE KHUSHI VICH THESE FACTS WERE CONFRONTED BUT AGAIN THE CLAIM O N BEHALF OF ASSESSEE WAS THAT HAS BEEN MENTIONED EARLIER. T HE VERY NATURE OF THE DESCRIPTION ON THE RECEIPTS BEING SELF EXPLANATORY GOES TO BELY THE CLAIM OF THE ASSESSEE THAT THE RECEIPTS WERE ONLY ISSUED FOR THE PERFORMANCE OF AKHAND PATH. MOREOVER THE DESCRIPTION ON THE REC EIPTS CLEARLY SUGGESTS THAT RELEVANT RELIGIOUS PATHS WERE PERFORM ED AT THE SAME TIME WHICH MEANS THE EXPENDITURE RELATABLE TO THE SAID P ERFORMANCE SHOULD NOT HAVE BEEN BOOKED IN THE RELEVANT YEAR. FURTHER , VARIOUS RECEIPTS ARE NOT CARRYING ANY PARTICULARS REMARKS I.E. FOR W HAT PURPOSE THE SAME WERE ISSUED. A LOOK AT THE IMPOUNDED MATERIAL REVEA LS THE AKHAND PATH WAS PERFORMED WITHIN A PERIOD OF 3 TO 4 MONTH S OF THE ISSUE OF RECEIPT. IN IS REGARD, THE CONTENTION OF ASSESSEE THAT THE SAME WERE PERFORMED BY PATHIES ON OUT OF TURN BASIS HAVE REMA INED TO BE SUBSTANTIATED WITH ANY DOCUMENTARY EVIDENCE. ASSES SEE FAILED TO PROVE ITS SAID CONTENTION DESPITE BEING GIVEN OPPORTUNITY IN THIS REGARD. AT THE SAME TIME IT WAS NOT CONTRADICTED THAT RECEIPT HAVE BEEN ISSUED FOR GENERAL PURPOSE I.E. IN NATURE OF CHARITY TO THE IN STITUTE AND RECEIPTS WERE ISSUED FOR SPECIFIC/SPECIAL REQUESTS OF THE DE VOTEES WHILE GETTING THE RECEIPT AT THE DERA. THE RELEVANT DOCUMENTARY EVIDENCE THUS GOES TO CONTRADICT THE GENERAL CLAIM OF ASSESSEE THAT RECEI PTS WERE ISSUED ONLY FOR PERFORMANCE OF AKHAND PATH. IT IS NOT SO AS THE DOCUMENTARY EVIDENCE IN POSSESSION OF DEPARTMENT REVEALS. THE RECEIPTS WHICH ARE SHOWN AS REVENUE RECEIPTS STANDS ACCEPTED AS IT IS CLAIM OF ASSESSEE THAT EXPENDITURE RELATABLE TO SAID RECEIPTS WAS INCURRED DURING THE YEAR. THE ASSESSEE IS ACCOUNTING RECEIPTS AS INCOME VIS- -VIS THE ONLY DETAILS OF EXPENSES BOOKED. REGARDING THE ELIGIBILITY OF EX PENDITURE IT STANDS CONCLUSIVELY PROVED THAT THE EXPENDITURE WAS NOT TH E EXPENDITURE OF THE RELEVANT YEAR, BEING EXPENDITURE OF EARLIER YEAR. ACCORDINGLY, I DO NOT FIND ANY MERITS IN THE EXPENDITURE CLAIMED BY THE A SSESSEE AND PROCEED TO DISALLOW THE SAID CLAIM OF EXPENDITURE AMOUNTING TO `. 27,60,300/- AS DEBITED IN THE PROFIT AND LOSS ACCOUNT. WHAT IS ALL OWABLE IS THE EXPENDITURE INCURRED IN THE RELEVANT YEAR AND SINCE NO RECEIPTS OF THE RELEVANT YEAR WERE OFFERED FOR TAXATION, THEREFORE, THE EXPENDITURE IS 9 ALSO NOT ALLOWABLE. MOREOVER THE SAID EXPENDITURE WHICH IS CLAIMED IN THE YEAR WAS THE EXPENDITURE OF THE EARLIER YEAR. PENALTY PROCEEDINGS U/S 271(1) (C) OF THE I.T. ACT, 1961 HAVE BEEN INIT IATED SEPARATELY FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 6. THE LD. CIT(A) AFTER HAVING REPORT FROM THE A.O. AND CONSIDERING THE EXPLANATION OF THE ASSESSEE AND SYSTEM OF ACCOUNTIN G BEING CONSISTENTLY FOLLOWED, ALLOWED THE CLAIM OF THE ASSESSEE. 7. THE LD. DR, RELIED UPON THE ORDER OF THE ASSESSI NG OFFICER. 8. THE LD. COUNSEL FOR THE ASSESSEE, SH. Y.K. SUD, ON THE OTHER HAND, MAINLY RELYING UPON THE ORDER OF THE LD. CIT(A), AR GUED THAT THE ASSESSEE HAS ACCOUNTED FOR THE EXPENDITURE AND THE INCOME AS AND WHEN THEY ARE INCURRED/WHEN THEY ARE EARNED AS PER MERCANTILE SYS TEM OF ACCOUNTING. THE AO HAS NOT POINTED OUT ANY SPECIFIC DEFECT AND HAS NOT PROVED ANY EXPENDITURE AS FALSE EXPENDITURE. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE ARGUMENTS MADE BY THE LD. COUNSEL FOR THE ASSES SEE, SH. Y.K. SUD, APPEARS TO BE CONVINCING THAT THE AO HAS NOT POINTE D OUT ANY SPECIFIC DEFECT IN THE ASSESSMENT ORDER. THE AO HAS MADE THE ALLEGA TIONS LIKE MAJORITY RECEIPTS ARE GENERAL RECEIPTS WHEREAS FEW RECEIPTS ARE ONLY AKHAND PATH RECEIPTS, WHICH ARE PERFORMED WITHIN THREE MONTHS. HE FURTHER ALLEGED THAT 10 THE EXPENSES ARE NOT ALLOWABLE SINCE THE RECEIPTS R EVEAL PERFORMANCE OF RITUAL IN THE EARLIER YEARS THAN IN THE IMPUGNED YEAR. FUR THER, ALLEGATIONS WERE MADE THAT SPECIFIC PERFORMANCE IS MENTIONED ON RECE IPT LIKE JANAMDIN KI KHUSHI, ARDAS BINTI ETC. MAINLY THE ALLEGATION O F THE AO WAS THAT THE EXPENDITURE BOOKED BY THE ASSESSEE WAS NOT EXPENDIT URE FOR THE IMPUGNED YEAR AND NO INCOME IS CREDITED IN THE IMPUGNED YEAR AGAINST THE EXPENDITURE CLAIMED. 9.1. IT APPEARS THAT THE AO HAS NOT CONSIDERED THE REPLY OF THE ASSESSEE DATED 22.12.2009 IN THE RIGHT SPIRIT WHICH IN FACT IS SELF EXPLANATORY. THE EXPLANATION OF THE ASSESSEE IS THAT AFTER THE PERFO RMANCE OF THE AKHAND PATH, THE INCOME AND EXPENDITURE ARE ACCOUNTED FOR IN THE BOOKS OF ACCOUNT AS AND WHEN THEY ARE EARNED/INCURRED. THIS SYSTEM O F ACCOUNTING HAS BEEN FOLLOWED CONSISTENTLY, IS NOT UNDER DISPUTE. THE AS SESSEE HAD SUBMITTED THE DETAILS OF PAYMENTS MADE TO PATHIES FOR PERFORMANCE OF PATHS WHICH IS IN PROPORTION TO THE RECEIPTS. THE DETAILS OF THE AKHA ND PATH PERFORMED DURING THE YEAR AND IN THE SUBSEQUENT YEARS WERE ALSO PROD UCED. THE OTHER DETAILS AS MENTIONED IN THE REPLY WERE ALSO SUBMITTED. MOREOVE R, THE CIT(A) HAD ASKED FOR THE REPORT FROM THE AO WHICH WAS GIVEN BY THE AO AND THE REPORT OF THE AO IS MAINLY IN ACCORDANCE WITH THE EXPLANA TION OF THE ASSESSEE. THE SAME IS AVAILABLE AT PARA 5.1 OF CIT(A)S ORDER. WE HAVE PERUSED THE 11 FINDINGS OF THE LD. CIT(A) THAT THERE ARE CERTAIN I NCOME FOR WITH WHICH NO EXPENSE HAS BEEN ACCOUNTED FOR BUT IF SUCH INCOME I S DELETED THEN THERE WILL BE A LOSS TO THE REVENUE. THEREFORE, RELYING UPON T HE DECISION OF THE HONBLE SUPREME COURT, IN THE CASE OF CIT VS. REALEST & SER VICES LTD. 307 ITR 202 (SC), METHOD OF ACCOUNTING FOLLOWED CONSISTENTLY SH OULD NOT BE DISTURBED MERELY BECAUSE IT WAS INCORRECT UNLESS IT COULD BE SHOWN THAT CHANGE IN THE METHOD OF ACCOUNTING WOULD RESULT IN GAIN FOR THE R EVENUE. MOREOVER, IT IS NOT THE CASE OF THE AO THAT THE ASSESSEE HAS NOT AC COUNTED FOR ANY INCOME OR HAS NOT INCURRED ANY EXPENDITURE OR HAS INCURRED AN Y FALSE EXPENDITURE. IN THE CIRCUMSTANCES AND FACTS OF THE CASE AND OUR FIN DINGS HEREINABOVE AND IN THE ABSENCE OF ANY SPECIFIC DEFECT BY AO, WE FIND N O INFIRMITY IN THE ORDER OF THE LD. CIT(A), WHO HAS RIGHTLY ALLOWED THE CLAI M OF THE ASSESSEE. THUS, ALL THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMIS SED. 10. NOW, WE TAKE UP APPEAL OF THE REVENUE IN ITA NO .385(ASR)/2011 FOR THE A.Y. 2008-09. THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN REVENUES APPEAL IN ITA NO.382(ASR)/2011 FOR THE A. Y. 2007-08. IN THE PRESENT CASE, THE AO DISALLOWED THE EXPENDITURE OF RS.61,21,800/-. THE LD. CIT(A) DELETED THE SAME BEING THE ISSUE ON IDENTICA L FACTS AS COMPARED TO THE FACTS IN REVENUES APPEAL FOR THE ASSESSMENT YE AR 2007-08. 12 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. SINCE THE FACTS IN THE PRESENT APPEAL OF THE REVENU E ARE IDENTICAL TO THE FACTS IN REVENUES APPEAL IN ITA NO.382(ASR)/2011 FOR THE ASSESSMENT YEAR 2007- 08 AND REVENUES APPEAL IN THE SAID ITA NO.382(ASR) /2011 HAS BEEN DISMISSED HEREINABOVE. FOLLOWING THE SAME, WE DISMI SS ALL THE GROUNDS IN THE PRESENT APPEAL OF THE REVENUE. 12. IN THE RESULT, THE APPEALS OF THE REVENUE I.E. IN ITA NO.382(ASR)/2011 & ITA NO.385(ASR)/2011 ARE DISMISS ED ORDER PRONOUNCED IN THE OPEN COURT ON 20TH M ARCH, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 20TH MARCH , 2012 /SKR/ COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE:SH. CHARANJIT SINGH KANWAR, THE FORT, KARTARPUR. 2. THE ITO IV(2), JALANDHAR. 3. THE CIT(A), JLR 4. THE CIT, JLR 5. THE SR DR ITAT, ASR. TRUE COPY BY ORDER