AJAY KUMAR SAINI, Jaipur V. ITO, JHUNJHUNU

ITA 411/JPR/2013

• Counselvise Citation: 41123114 RSA 2013
• Duration Of Justice: 2 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 16-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAILASH MANGAL JCIT DR DHK
• Keywords: Depreciation; Principle of natural justice; Commercial expediency
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 411/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 SHRI AJAY KUMAR SAINI C/O BABA PRAKASH PURI CHAT BHANDAR OLD BUS STAND, JHUNJHUNU CUKE VS. THE ITO WARD- 1 JHUNJHUNU LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: BDTPS 5559 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : WRITTEN SUBMISSION JKTLO DH VKSJ LS@ REVENUE BY :SHRI KAILASH MANGAL, JCIT -DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 23/10/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 30 /11/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE LD. CIT(A)-III, JAIPUR DATED 05-02-2013 FOR THE ASSESSM ENT YEAR 2008-09 WHEREIN THE EFFECTIVE GROUNDS RAISED BY THE ASSESS EE IS AS UNDER:- UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE AO HAS ERRED IN MAKING ADDITIONS OF RS. 7,64,256/- BY DISALLOWING FOLLOWING EXPENSES ON ADHOC BASIS. FURTHER THE LD. CIT(A) ERRED BY SUSTAINING THESE ADDITIONS. THE DISALLOWANCE MADE I S UNJUSTIFIED, ILLEGAL OR EXCESSIVE. ITA NO. 411/JP/2013 SHRI AJAY KUMAR SAINI VS. ITO, 1, JHUNJHUNU . 2 S.N. EXPENSES TOTAL EXPENSES DISALLOWANCE 1. SALARY 2,40,000 1,80,000 2. CONFERENCE EXPENSES 25,365 5,073 3. MOBILE EXPENSES 42,500 8,500 4. HOTEL EXPENSES 3,25,645 1,70,415 5. SELLING & DISTRIBUTION EXPENSES 7,91,625 2,15,268 6. TRAVELLING EXPENSES 4,25,450 1,50,000 7. ENTERTAINMENT & FESTIVAL EXPENSES 88,295 25,000 8. MISC. EXPENSES 35,785 10,000 TOTAL 7,64,256.00 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED THE RETURN ON 25-08-2008 DECLARING INCOME OF RS. 4,13,515/-. DURI NG THE RELEVANT PERIOD, THE ASSESSEE WORKED AS AGENT OF M/S. PREEYA HOME STUDY (P) LTD. ON COMMISSION BASIS. GROSS COMMISSION RECEIPTS HAD BEEN SHOWN AT RS. 23,88,150/- AND THE SAME ARE SUPPORTED BY TDS CERTI FICATES. AFTER DEBITING VARIOUS EXPENSES LIKE HOTEL, MISC. EXPENSE S, SELLING AND DISTRIBUTION, TRAVELING, CONVEYANCE, ENTERTAINMENT, FESTIVAL CELEBRATION, MOBILE BILLS AND SALARY, NET PROFIT HAS BEEN SHOWN AT RS. 4,13,485/-. NOTICE U/S 143(2) OF THE ACT WAS ISSUED TO THE ASSE SSEE AND ASSESSEE'S STATEMENT WAS RECORDED. ACCORDING TO THE AO, EXCEPT COMPUTERIZED CASH BOOK AND LEDGER, NO OTHER RECORD WAS PRODUCED FOR V ERIFICATION. THEREFORE, THE EXPENDITURE CLAIMED BY THE ASSESSEE UNDER THE HEADS SALARY, CONVEYANCE, MOBILE BILLS, HOTEL EXPENSE, SE LLING AND DISTRIBUTION ITA NO. 411/JP/2013 SHRI AJAY KUMAR SAINI VS. ITO, 1, JHUNJHUNU . 3 EXPENSES, TRAVELING AND MISC. EXPENSES WERE NOT VER IFIABLE. THEREFORE, TOTAL ADDITION OF RS. 7,64,256/- WAS DISALLOWED BY THE AO. 2.2 AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL RAISING VARIOUS CONTENTIONS AND FURNISHING WRITTEN SUBMISSIONS. LD. CIT(A) IN SUM AND SUBSTANCE RELIED ON THE STATEMENT OF ASSESSE RECORD ED BY AO AND ADDITIONS WERE CONFIRMED BY FOLLOWING MAIN OBSERVAT IONS: (I) COMPUTER GENERATED CASH BOOK, LEDGER AND BANK STATEMENT PRODUCED WHICH WERE EXAMINED. NO BILLS AN D VOUCHERS OF EXPENSE WERE PRODUCED. HENCE, NONE OF THE EXPANSE C LAIMED BY THE ASSESSEE ARE VERIFIABLE. (II) FROM THE STATEMENT OF THE APPELLANT, IT APPEAR S THAT HE HAS NEVER MAINTAINED THE BILLS/VOUCHERS AND THERE I S ABSOLUTELY NO BASIS FOR CLAIMING THE EXPENSES IN HIS BOOKS OF ACC OUNTS 2.3 AGGRIEVED ASSESSEE IS 2 ND APPEAL BEFORE ITAT. BY WRITTEN SUBMISSION ASSESSE MAINLY CONTENDS THAT: (I) IN THE MLM SYSTEM OF MARKETING, PERSON TO PERSO N CONTACT, PERSON TO PERSON CONVINCING NOT ONLY ABOUT THE PRODUCT BUT ALSO ABOUT THE CONCEPT OF MARKETING, FU TURE OPPORTUNITIES AND CREDITABILITY OF THE COMPANY IN T HE LONG RUN ARE REQUIRED. THE PERSON TO PERSON CONVINCING R EQUIRES LOT OF ENERGY, MOBILIZATION OF THE PEOPLE AND RESOU RCES. (II) THE PROCESS OF CONVENIENCE REQUIRE TRAVELLING, LECTURES, BUSINESS KITS, LOGISTIC SUPPORTS, MOTIVAT IONAL LECTURES, EXAMPLES OF ACHIEVERS AND TIME TO TIME BU SINESS PROMOTIONAL INCENTIVES (COMMISSION) TO THE PERSONS WHO HAS ALREADY JOINED UNDER HIM TO THE COMPANY, BUT NOT GE NERATING FURTHER BUSINESS, TO ENCOURAGE THEM BECAUSE IT IS F URTHER WELL ESTABLISHED FACTS THAT MOST OF PERSONS JOINED ONLY FEW ITA NO. 411/JP/2013 SHRI AJAY KUMAR SAINI VS. ITO, 1, JHUNJHUNU . 4 PERFORMS CONSISTENTLY. MOBILIZATION OF HUGE PEOPLE INVOLVES FREQUENT TRAVELLING AND CONVEYANCE EXPENSES ALSO. (III) THE STATEMENT WAS GIVEN WITHOUT LOOKING TO TH E BOOKS OF ACCOUNTS, FURTHER IF LD AO WOULD HAVE ASKED A DI RECT QUESTION THAT, WHY IN FY UNDER CONSIDERATION RS. 2, 40,000/- HAS BEEN SHOWN AS SALARY EXPENSES, IF THERE WAS ONL Y ONE EMPLOYEE WITH YOU, THE ASSESSEE WOULD HAVE CLARIFIE D THE ISSUE IN THE STATEMENT ITSELF. FURTHER, AS THE ASSE SSEE IS WORKING FOR MLM COMPANY, AS BRIEFED ABOVE, WHICH REQUIRES INTENSIVE TRAVELLING FOR CONVINCING MORE A ND MORE PEOPLE TO JOIN THE CHAIN. THUS, IT IS PRACTICALLY I MPOSSIBLE TO CARRY ON SUCH A BUSINESS INDIVIDUALLY, AND WITHOUT PROPER STAFF IT IS IMPRACTICABLE TO ATTAIN SUCH A TURNOVER , THEREFORE THE CLAIM OF THE ASSESSEE SHOULD BE ALLOWED AND DISALLOWANCES MADE NEED TO BE DELETED IN FULL. (IV) LD. AO MADE VARIOUS OTHER DISALLOWANCES LIKE, DISALLOWANCE OF CONVEYANCE EXPENSES OF RS. 5,073/-, SELLING AND DISTRIBUTION EXPENSES OF RS. 2,15,268/-, ENTERT AINMENT EXPENSES OF RS. 25,000/-AND MISC. EXPENSES OF RS. 1 0,000/-, HOLDING THAT NO COMPLETE VOUCHERS IN SUPPORT OF THE SE EXPENSES COULD BE PRODUCED. HOWEVER, IN THE STATEME NT OF ASSESSEE IT WAS TIME AND AGAIN POINTED OUT BY HIM I N REPLY TO QUESTION NO. 5, 6, 7, 8, 9 & 10, THAT EITHER HE DID NOT KEPT EXPENSES VOUCHERS CAREFULLY WITH HIM OR HE EVEN SOM ETIMES DID NOT TOOK BILLS OF THE EXPENSES INCURRED. NOWHER E ASSESSEE HAD DENIED THAT HE HAS NOT INCURRED EXPENSES, BUT T HE FACT WAS THAT THE SUPPORTING DOCUMENTS WERE NOT IN HIS POSSESSION AT THE TIME OF ASSESSMENT, WHICH DOES NO T MEAN THAT EXPENSES WERE NOT INCURRED BY HIM. RELIANCE IS PLACED IN THE CASE OF DHAKESHWARI COTTON MILLS LTD. V. CIT [ 1954] 26 ITR 775 (SC) THE COURT OBSERVED THAT . . . . THE INCOME-TAX OFFICER IS NOT ENTITLED TO MAKE A PURE GUESS AND MA KE AN ASSESSMENT WITHOUT REFERENCE TO ANY EVIDENCE OR ANY MATERIAL AT ALL. . . . . (V) IN REGARD TO DISALLOWANCE OF HOTEL EXPENSES OF RS. 170415/-, WE SUBMIT THAT, FOR DISALLOWING HOTEL EXP ENSES INCURRED BY THE ASSESSEE, THE EXPENDITURE IN OTHER TWO CASE ITA NO. 411/JP/2013 SHRI AJAY KUMAR SAINI VS. ITO, 1, JHUNJHUNU . 5 I.E. SHRI AJEET SINGH NAHAR & SHRI PANKAJ KUMAR DHA KAR, WAS COMPARED WITH THAT OF ASSESSEE. HOWEVER, LD. A. O. DURING THE ASSESSMENT PROCEEDINGS NEITHER HINTED TH AT HE IS COMPARING EXPENDITURE OF THESE CASES NOR PROVIDED T HE DATA OF THESE CASES TO THE APPELLANT FOR HIS COMMENTS. T HE RELIANCE IS PLACED IN THE CASE OF (1) GARGI DIN JWALA PRASAD V. CIT [1974] 96 ITR 97 (ALL.). (2) JOSEPH THOMAS V/S. CIT, 68 ITR 796 (KER), (3) ITO VS. SHARDA TIMBER STORE, ITA NO. 5662/DEL/2 010 DATED 31.01.2012, IN THIS CASE HONBLE ITAT DELHI (VI) IN REGARD TO TRAVELLING EXPENSES, OUT OF THE T OTAL EXPENSES CLAIMED UNDER THIS HEAD I.E. RS. 4,25,450/ -, RS. 29,700/- & RS. 35,640/- WAS INCURRED ON DEPRECIATIO N ON CAR AND VEHICLE RESPECTIVELY AND RS. 20,537/- WAS INCUR RED ON INTEREST ON CAR LOAN. THE DEPRECIATION IS A STATUTO RY ALLOWANCE UNDER THE INCOME TAX ACT, NO PART OF THE SAME COULD BE DISALLOWED. IT IS AN UNDISPUTED FACT THAT CAR & VEH ICLE HAS BEEN PURCHASED ON LOAN AND IT HAS BEEN PURCHASED FO R THE PURPOSE OF BUSINESS. THEREFORE, THE PURCHASING OF V EHICLE IS ASSOCIATED WITH THE COMMERCIAL EXPEDIENCY, THEREFOR E NO DISALLOWANCE CAN BE MADE ON THIS, THEREFORE, ELIMIN ATING THESE FROM THE TOTAL EXPENDITURE CLAIMED THE PERCEN TAGE OF DISALLOWANCE COMES TO 44.17%, WHICH IS IRRATIONAL A ND EXCESSIVE. FURTHER, THE INCURRENCE OF TRAVELING EXP ENDITURE UNDER CONSIDERATION HAS NOT BEEN DENIED, FURTHER, I N ABSENCE OF ANY SPECIFIC FINDING REGARDING THE PERSONAL NATU RE OF EXPENSES DEBITED INTO PROFIT & LOSS ACCOUNT, MOREOV ER, ASSESSEE HIMSELF IN HIS REPLY TO QUESTION NO. 13, H AS ADMITTED THAT MOTORCYCLE HAS BEEN USED FOR PERSONAL PURPOSE WHICH IS ALMOST NEGLIGIBLE, THEREFORE, CONSIDERING THE PERSO NAL ELEMENT TO THE EXTENT OF 44.17% IS UNJUSTIFIED AND EXCESSIVE THEREFORE, AD-HOC DISALLOWANCE MADE NEED TO BE DELE TED. (VII) DISALLOWANCE OF MOBILE EXPENSES RS. 8,500/- @ 20%. THE TOTAL EXPENDITURE INCURRED ON MOBILE EXPENSES I S RS. ITA NO. 411/JP/2013 SHRI AJAY KUMAR SAINI VS. ITO, 1, JHUNJHUNU . 6 42,500/- WHICH IS QUITE REASONABLE, LOOKING TO THE NATURE AND QUANTUM AS ELABORATED EARLIER. (VIII) FURTHER, IN THE INSTANT CASE, NET PROFIT DEC LARED BY THE APPELLANT FOR THE YEAR UNDER CONSIDERATION IS 17.31 % IN COMPARISON TO 19.79% IN PRECEDING YEAR & IT IS A WE LL SETTLED LEGAL POSITION THAT UNDER THE CIRCUMSTANCES MENTION ED HEREINBEFORE, AT MOST, NET PROFIT RATE CAN BE ESTIM ATED DEPENDING ON THE PAST RESULT OF THE ASSESSEE HIMSEL F AS IT IS THE BEST GUIDING FACTOR. IN THIS REGARD FOLLOWING R ELIANCE ARE PLACED. (1) CIT V. RISHABH CONSTRUCTION PRIVATE LIMITED. HONBLE ITAT, JAIPUR BENCH, JAIPUR [2010] ITA NO. 581/JP/2009 DATED 17.06.2010 (2) CHOUDHARY & BROS. VS. INCOME TAX OFFICER, ITA NO. 583/JP/2009 DATED 30.9.2010 (3) JURISDICTIONAL HIGH COURT IN, CIT V. INANI MARBLES PRIVATE LIMITED [2009] 316 ITR 125 (RAJ.) (4) ITO V. KUNDANMAL SURANA(2004) 3 SOT 632(JODH). (5) ITO VS. SHARDA TIMBER STORE, ITA NO. 5662/DEL/2010 DATED 31.01.2012 THEREFORE, ANY ADDITION OR DISALLOWANCE, IF ANY REQUIRED, MUST BE RESTRICTED TO PERCENTAGE OF NP RA TE DECLARED BY ASSESSEE IN THE PRECEDING YEAR ONLY. IT IS FURTHER SUBMITTED THAT EVEN IN CASES OF ESTIM ATE, THE SAME MUST BE REASONABLE AND JUDICIOUS; IT SHOULD NOT BE CAPRICIO US ARBITRARY AND ILLOGICAL. ITA NO. 411/JP/2013 SHRI AJAY KUMAR SAINI VS. ITO, 1, JHUNJHUNU . 7 2.4 LD DR RELIED ON THE ORDERS OF LOWER AUTHORITIES . 2.5 I HAVE HEARD LD. DR, PERUSED THE RECORD AND DET AILED SUBMISSIONS FILED BY THE ASSESSE. IN MY CONSIDERED VIEW THE ENT IRE DISALLOWANCE HAS BEEN MADE RELYING ON THE STATEMENT OF THE ASSESSE W HICH IS CLAIMED TO BE MADE WITHOUT VERIFYING THE RECORD BY THE ASSESSE WH O IS A TECHNOCRAT AND NOT AN EXPERT ACCOUNTANT. ASSESSEE IS ASSESSED TO T AX SINCE PAST MANY YEARS AND SIMILAR EXPENSES HAVE BEEN ALLOWED, THIS PLEA HAS BEEN DENIED BY AUTHORITIES BELOW TAKING VIEW THAT ASSESSMENTS U /S 143(1) ARE NOT RELIABLE; THIS VIEW IS NOT CORRECT AS COURTS HAVE H ELD THAT IF NOTICE U/S 143(2) IS NOT ISSUED, SUCH ASSESSMENTS U/S 143(1) B ECOME FINAL AS REGULAR ASSESSMENTS. BESIDES, ASSESSEES HAS BEEN COMPARE D WITH OTHER CASES OF S/SHRI AJEET NAHAR AND PANKAJ DHAKAR WHICH WERE NOT CONFRONTED TO ASSESSEE. IT IS SETTLED LAW THAT ESTIMATE OF INCOME SHOULD BE REASONABLE AND JUSTICIABLE; IT SHOULD NOT BE HARSH AND ARBITRA RY AND BASED ON WRONG ASSUMPTION AND NOT ADHERING TO PRINCIPLE OF NATURAL JUSTICE. DESPITE THESE INCONSISTENCIES ON THE RECORD, AN ESTIMATE IS REQUI RED TO BE MADE IN THIS CASE. ENDS OF JUSTICE WILL BE MET IF THE ESTIMATE O F INCOME IS REDUCED BY 50% OF THE ADDITION SUSTAINED. AO SHALL WORK OUT TH E ADDITION ACCORDINGLY. ITA NO. 411/JP/2013 SHRI AJAY KUMAR SAINI VS. ITO, 1, JHUNJHUNU . 8 3.0 IN THE RESULT ASSESSEES APPEAL IS PARTLY ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 /11/2 015 SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30/11/ 2015 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI AJAY KUMAR SAINI, JHUNJHUNU 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD-1, JHUNJHUNU 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 411/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR ITA NO. 411/JP/2013 SHRI AJAY KUMAR SAINI VS. ITO, 1, JHUNJHUNU . 9 ITA NO. 411/JP/2013 SHRI AJAY KUMAR SAINI VS. ITO, 1, JHUNJHUNU . 10 1. APPELLANT IS AN INDIVIDUAL DERIVING INCOME MAINLY F ROM THE COMMISSION RECEIVED FROM M/S. PREEYA HOME STUDY PRI VATE LIMITED, A COMPANY ENGAGED IN MULTI LEVEL MARKETING BUSINESS. APPELLANT FILED HIS INCOME TAX RETURN ON 25.08.2008 DECLARING TOTAL INCOME OF RS. 4,13,515/-. 2. THE CASE WAS SELECTED FOR SCRUTINY U/S 143(2) OF TH E INCOME TAX ACT, CONSEQUENTLY ORDER U/S 143(3) WAS PASSED BY TH E LD. A.O. ON 29.12.2010, WHEREIN, TOTAL INCOME HAS BEEN DETERMIN ED AT RS. 11,77,770/- . 3. AGGRIEVED WITH THE ORDER OF THE LD. A.O., APPELLANT FILED APPEAL BEFORE CIT(A)-III, JAIPUR. HOWEVER, LD CIT(A) DISMI SSED THE APPEAL OF THE ASSESSEE VIDE HIS ORDER DATED 05-02-2013. ITA NO. 411/JP/2013 SHRI AJAY KUMAR SAINI VS. ITO, 1, JHUNJHUNU . 11 4. AGGRIEVED WITH THE ORDER OF LD. AO AND CIT(A), APPE LLANT FILED APPEAL BEFORE YOUR HONOUR. GROUND OF APPEAL NO. 1 IMPUGNED ASSESSMENT ORDER PASSED U/S 143(3) IS BAD IN LAW AND ON FACTS BEING AGAINST THE PRINCIPAL OF NATURAL JUSTICE AND FOR MANY MORE OTHER REASONS. FURTHER CIT(A) ERRED BY NOT CONSIDERING TH E SUBMISSION OF ASSESSEE. SUBMISSIONS NOT PRESSED. GROUND OF APPEAL NO. 2 UNDER THE FACTS AND CIRCUMSTANCES, LD. A.O. HAS ERR ED BY MAKING ADDITION OF RS. 7,64,256/- BY DISALLOWING FOLLOWING EXPENSES ON AD-HOC BASIS, FURTHER CIT(A) ERRED BY SUSTAINING THESE ADDITIONS. THE DISALLOWANCE MADE IS UNJUSTIFIED, ILLEGAL AND EXCESSIVE:- SR. EXPENSES TOTAL EXPENSES AMOUNT (IN INR) AMOUNT DISALLOWED (IN INR) 1. SALARY 2,40,000.00 180,000.00 2. CONFERENCE EXPENSES 25,365.00 5,073.00 3. MOBILE EXPENSES 42,500.00 8,500.00 4. HOTEL EXPENSES 3,25,645.00 1,70,415.00 5. SELLING & DISTRIBUTION EXPENSES 7,91,625.00 2,15,268.00 6. TRAVELLING EXPENSES 4,25,450.00 1,50,000.00 7. ENTERTAINMENT & FESTIVAL EXPENSES 88,295.00 25,000.00 8. MISC. EXPENSES 35,785.00 10,000.00 TOTAL 7,64,256.00 FINDINGS OF THE A.O. ITA NO. 411/JP/2013 SHRI AJAY KUMAR SAINI VS. ITO, 1, JHUNJHUNU . 12 1. COPY OF COMPUTER GENERATED CASH BOOK, LEDGER AND BA NK STATEMENT PRODUCED WHICH WERE EXAMINED. NO VOUCHERS OF EXPENS E WERE PRODUCED. (PARA 1 OF ASSESSMENT ORDER). 2. THE NP RATE OF 17.31% SHOWN BY ASSESSEE IS LOW IN T HIS LINE OF BUSINESS (PARA 2 OF ASSESSMENT ORDER). FINDINGS OF THE CIT(A) 1. COMPUTER GENERATED CASH BOOK, LEDGER AND BANK STATE MENT PRODUCED WHICH WERE EXAMINED. NO BILLS AND VOUCHERS OF EXPENSE WERE PRODUCED. HENCE, NONE OF THE EXPANSE CLAIMED B Y THE ASSESSEE ARE VERIFIABLE. 2. FROM THE STATEMENT OF THE APPELLANT, IT APPEARS THA T HE HAS NEVER MAINTAINED THE BILLS/VOUCHERS AND THERE IS ABSOLUTE LY NO BASIS FOR CLAIMING THE EXPENSES IN HIS BOOKS OF ACCOUNTS. SUBMISSIONS 1. APPELLANT UNDER CONSIDERATION WAS WORKING FOR PREEY A HOME STUDY PRIVATE LIMITED (THE COMPANY). A COMPANY ENGA GED IN THE BUSINESS OF MULTI LEVEL MARKETING, WHEREIN, IMPARTI NG COMPUTER EDUCATION BASED ON CONCEPT OF EARNING WHILE LEARNI NG. THE COMPANY WAS OFFERING LUCRATIVE COMMISSION TO THE PE RSONS, WHO BRING PEOPLE TO THE COMPANY FOR BECOMING MEMBER. THE DETA IL NOTE ON THE NATURE OF BUSINESS OF THE COMPANY HAS BEEN GIVEN ON PAGES 1 AND 2 OF THE ASSESSMENT ORDER.