Rimjhim Ispat Limited, Kanpur V. Asstt. Commissioner of Income Tax -VI, Kanpur

ITA 443/LKW/2013

• Counselvise Citation: 44323714 RSA 2013
• Duration Of Justice: 2 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 22-06-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 13-06-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: Y P SRIVASTA VA
• Keywords: Depreciation; Corroborative evidences; Tax effect; Unabsorbed depreciation

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 NO.443/LKW/2013 ASSESSMENT YEAR:2001 - 02 A.C.I.T. - VI, KANPUR. VS M/S RIMJHIM ISPAT LIMITED, 123/355, FAZAL GANJ, KANPUR. PAN:AAACR6582K (RESPONDENT) (APPELLANT) ITA NO.444/LKW/2013 ASSESSMENT YEAR:2003 - 04 INCOME TAX OFFICER - 6(2), KANPUR. VS M/S RIMJHIM ISPAT LIMITED, 123/355, FAZAL GANJ, KANPUR. PAN:AAACR6582K (RESPONDENT) (APPELLANT) ITA NO.515 & 516/LKW/2013 ASSESSMENT YEARS:2001 - 02 & 2003 - 04 M/S RIMJHIM ISPAT LIMITED, 123/355, FAZAL GANJ, KANPUR. PAN:AAACR6582K VS INCOME TAX OFFICER - 6(2), KANPUR. (RESPONDENT) (APPELLANT) C.O. NOS.29 & 30/LKW/2013 (IN I.T.A. NOS.515 & 516/LKW/2013) ASSESSMENT YEARS: 2001 - 02 & 2003 - 04 INCOME TAX OFFICER - 6(2), KANPUR. VS M/S RIMJHIM ISPAT LIMITED, 123/355, FAZAL GANJ, KANPUR. PAN:AAACR6582K (RESPONDENT) (APPELLANT) 2 SHRI K. R. RASTOGI, F.C.A. ASSESSEE BY SHRI Y. P. SRIVASTAVA, D. R. REVENUE BY 23/06/2015 DATE OF HEARING 30 /07/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. IN THIS BUNCH, THERE ARE FOUR CROSS APPEALS OF THE ASSESSEE AND REVENUE FOR ASSESSMENT YEARS 2001 - 02 AN D 2003 - 04 AND THERE ARE TWO CROSS OBJECTIONS OF THE ASSESSEE FOR THE SAME TWO ASSESSMENT YEARS. ALL THESE APPEALS AND CROSS OBJECTIONS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. AT THE VERY OUTSET, IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THE TAX EFFECT IN THE REVENUES APPEAL I.E. I.T.A. NO.515/LKW/2013 FOR ASSESSMENT YEAR 2001 - 02 IS LESS THAN RS.4 LAC S AND THEREFORE, THIS APPEAL OF THE REVENUE IS NOT MAINTAINABLE BECAUSE OF LOW TAX EFF ECT AS PER INSTRUCTIONS OF THE BOARD. HE ALSO SUBMITTED THAT BOTH THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE NOT PRESSED. 3. LEARNED D.R. OF THE REVENUE COULD NOT CONTROVERT THIS SUBMISSION OF LEARNED A.R. OF THE ASSESSEE THAT THE TAX EFFECT IN THE A PPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2001 - 02 IS BELOW RS.4 LAC S . HENCE, THE APPEAL OF THE REVENUE FOR THIS YEAR IS NOT MAINTAINABLE IN VIEW OF BOARDS INSTRUCTION. WE DISMISS THE SAME ACCORDINGLY. 4. IN THE RESULT, THE APPEAL OF THE REVENUE FOR ASSE SSMENT YEAR 2001 - 02 AND BOTH THE CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. 5. IT WAS ADMITTEDLY AGREED BY BOTH THE SIDES THAT THE ISSUES RAISED BY THE ASSESSEE IN ITS BOTH THE APPEALS FOR ASSESSMENT YEAR 2001 - 02 AND 2003 - 04 ARE IDENTICAL AND THE FA CTS ARE ALSO IDENTICAL. REGARDING THE 3 APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2003 - 04 ALSO, IT WAS AGREED BY BOTH THE SIDES THAT THESE ISSUES RAISED BY THE REVENUE ARE INTER CONNECTED WITH THE APPEAL OF THE ASSESSEE FOR THE SAME YEAR. 6. GROUND NO. 1 O F THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2001 - 02 AND GROUND NO. 1 OF THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 2003 - 04 AS WELL AS THE CONNECTED GROUND NO. 1 OF THE REVENUES APPEAL FOR ASSESSMENT YEAR 2003 - 04 ARE AS UNDER: GROUND NO. 1 OF ASSESSE E FOR ASSESSMENT YEAR 2001 - 02 THAT LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE TO THE EXTENT OF RS.50,000/ - MADE ON ACCOUNT OF COMMISSION. GROUND NO. 1 OF ASSESSEE FOR ASSESSMENT YEAR 200 3 - 0 4 THAT LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE TO THE EXTENT OF RS.1,00,000/ - MADE ON ACCOUNT OF COMMISSION. GROUND NO. 1 OF REVENUE FOR ASSESSMENT YEAR 200 3 - 0 4 THE LD. C1T(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALLOWANCE MADE BY THE AO OF RS.2,00,000/ - OUT OF COMMISSION EXPENSES TO RS.1,00,000/ - WITHOUT APPRECIATING THE FACTS THAT MOST OF THE DISALLOWANCES WERE MADE ON ACCOUNT OF CASH PAYMENT FOR WHICH NO RECORDS WERE MAINTAINED BY THE ASSESSEE COMPANY. 7. IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT DISALLOWANCE MADE BY THE ASSESSING OFFICER IN BOTH THE YEARS ARE AD HOC DISALLOWANCE S WITHOUT ANY BASIS AND THEREFORE, THE SAME SHOULD BE DELETED IN FULL IN BOTH THE YEARS. HE ALSO SUBMITTED THAT THE COMPARATIVE GROSS PROFIT CHART FOR ASSESSMENT YEAR 2000 - 01 AND 2001 - 02 IS AVAILABLE ON PAGE NO. 15 OF THE PAPER BOOK AND AS PER THE SAME, IT CAN BE SEEN THAT THE LOSS IN ASSESSMENT YEAR 2001 - 02 HAS GONE DOWN TO RS.20.40% AS AGAINST 24.37% IN ASSESSMENT YEAR 2001 - 02. 4 8. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER IN BOTH THE YEARS. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IT IS NOTED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2001 - 02 THAT THE ASSESSEE HAS CLAIMED AN EXPENDITURE OF RS.14.40 LACS UNDER THE HEAD COMMISSION AS AGAINST SUCH EXPENSES OF RS.6.08 LAC IN THE IMMEDIATELY PRECE DING YEAR. THE ASSESSING OFFICER ASKED THE ASSESSEE TO JUSTIFY ITS CLAIM. THE ASSESSING OFFICERS OBJECTION IS THAT THE ASSESSEE COULD NOT PRODUCE COMPLETE SUPPORTING EVIDENCE IN RESPECT OF THESE EXPENDITURES BUT EVEN AFTER MAKING THIS OBSERVATION, HE HA S MADE AD HOC DISALLOWANCE OF RS.1,00,000/ - FOR WHICH NO BASIS IS INDICATED BY HIM. THE CIT(A) HAS ALSO CONFIRMED THE DISALLOWANCE OF RS.50,000/ - OUT OF RS.1,00,000/ - AND THIS IS ALSO ON AD HOC BASIS. IN OUR CONSIDERED OPINION, SUCH AD HOC DISALLOWANCE W ITHOUT ANY BASIS IS NOT JUSTIFIED AND HENCE, WE HOLD THAT NO DISALLOWANCE IS CALLED FOR OUT OF THESE EXPENSES CLAIMED BY THE ASSESSEE UNDER THE HEAD COMMISSION EXPENSES BECAUSE NO BASIS HAS BEEN INDICATED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER FO R MAKING THIS DISALLOWANCE AND THE SAME WAS MADE BY MAKING A GENERAL OBSERVATION THAT COMPLETE SUPPORTING EVIDENCE WAS NOT BROUGHT ON RECORD WITHOUT INDICATING EVEN ONE PARTICULAR EVIDENCE, WHICH WAS ASKED FOR BY THE ASSESSING OFFICER AND COULD NOT BE PROD UCED BY THE ASSESSEE. SIMILARLY, IN ASSESSMENT YEAR 2003 - 04 ALSO, THE ASSESSING OFFICER HAS MADE SIMILAR OBSERVATIONS THAT THE ASSESSEE FAILED TO PRODUCE COMPLETE SUPPORTING EVIDENCE WITHOUT POINTING OUT EVEN ONE PARTICULAR EVIDENCE , WHICH WAS REQUIRED BY THE ASSESSING OFFICER AND COULD NOT BE PRODUCED BY THE ASSESSEE. CONSIDERING ALL THESE FACTS, WE DELETE THE COMPLETE DISALLOWANCE UNDER THE HEAD COMMISSION PAYMENT IN BOTH THE YEARS. 5 ACCORDINGLY, GROUND NO. 1 OF THE ASSESSEES APPEAL IS ALLOWED IN BOTH YEARS AND GROUND NO. 1 OF REVENUES APPEAL IS REJECTED. 10. GROUND NO. 2 OF THE ASSESSEE IN BOTH THE ASSESSMENT YEARS ARE AS UNDER: GROUND NO. 2 FOR ASSESSMENT YEAR 2001 - 02 IS AS UNDER: THAT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE TO THE EXTENT OF RS.47,345.85 MADE ON ACCOUNT OF TELEPHONE EXPENSES. GROUND NO. 2 FOR ASSESSMENT YEAR 2003 - 04 IS AS UNDER: THAT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE TO THE EXTENT OF RS.67,338.53 MADE ON ACCOUNT OF TELEPHONE EX PENSES. CONNECTED GROUND IN REVENUES APPEAL BEING GROUND NO. 2 IS AS UNDER: THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALLOWANCE MADE BY THE AO OF RS.1,80,000/ - OUT OF TELEPHONE EXPENSES TO 7.5% OF THE TOTAL EXPENSES WITHOUT GIVING ANY REASONS FOR RESTRICTING THE DISALLOWANCES AND NOT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 11. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER IN BOTH THE YEARS WHEREAS IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF HON'BLE GUJARAT HIGH COURT RENDERED IN THE CASE OF SAYAJI IRON AND ENGG. CO. VS. CIT [2002] 253 ITR 749 (GUJ). 12. WE HAVE CONSIDERED THE RI VAL SUBMISSIONS. WE FIND THAT AS PER TH E JUDGMENT OF HON'BLE GUJARAT HIGH COURT RENDERED IN THE CASE OF SAYAJI IRON AND ENGG. CO. (SUPRA), EVEN IF THERE IS PERSONAL USE OF TELEPHONE AND VEHICLES ETC. BY THE DIRECTORS / EMPLOYEES OF THE COMPANY, THE SAME CAN 6 BE INCLUDED IN THE PERQUISITES VALUE O F THE CONCERNED DIRECTOR/ EMPLOYEE BUT THE DISALLOWANCE CANNOT BE MADE IN THE HANDS OF THE ASSESSEE COMPANY. RESPECTFULLY, FOLLOWING THIS JUDGMENT OF HON'BLE GUJARAT HIGH COURT, WE HOLD THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER THE HEAD TE LEPHONE EXPENSES ON THE ALLEGATION THAT THERE MAY BE PERSONAL USE BY THE DIRECTORS/EMPLOYEES OF THE ASSESSEE COMPANY IS NOT JUSTIFIED. ACCORDINGLY, WE DELETE THE ENTIRE DISALLOWANCE MADE BY THE ASSESSING OFFICER IN BOTH THE YEARS UNDER THE HEAD TELEPHONE EXPENSES. GROUND NO. 2 OF THE ASSESSEE IN BOTH THE YEARS IS ALLOWED AND GROUND NO. 2 OF THE REVENUE IS REJECTED. 13. GROUND NO. 3 IN ASSESSEES APPEAL FOR ASSESSMENT YEAR 2001 - 2002 IS AS UNDER: THAT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALL OWANCE TO THE EXTENT OF RS.4,97,064.75 MADE ON ACCOUNT OF FREIGHT & CARTAGE (OUTWARD). 14. GROUND NO. 3 IN ASSESSEES APPEAL FOR ASSESSMENT YEAR 2003 - 2004 IS AS UNDER: THAT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE TO THE EXTENT OF RS .7,73,610.15 MADE ON ACCOUNT OF FREIGHT & CARTAGE (OUTWARD). 15. THE CONNECTED GROUND OF THE REVENUE BEING GROUND NO. NO. 3 IS AS UNDER: 3. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALLOWANCE MADE BY THE AO OF RS.15,47,220/ - OUT OF FREIGHT AND CARTAGE EXPENSES TO 15% OF THE TOTAL EXPENSES WITHOUT GIVING ANY REASONS FOR RESTRICTING THE DISALLOWANCES AND NOT APPRECIATING THE FACTS THAT MOST OF THE DISALLOWANCES WERE MADE ON ACCOUNT OF CASH PAYMENT FOR WHICH NO RECORDS WERE MAINT AINED BY THE ASSESSEE COMPANY. 7 16. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER IN BOTH THE YEARS WHEREAS IT IS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT NO SPECIFIC DEFECT HAS BEEN POINTED OUT BY THE ASSESSING OFFICER IN THE ASSESSME NT ORDER OR BY LEARNED CIT(A) IN HIS ORDER AND THEREFORE, THE ENTIRE DISALLOWANCE SHOULD BE DELETED. 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IN THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2001 - 02 IN PARA3, IT IS NOTED BY THE ASSESSING OF FICER THAT THE ASSESSEE HAS CLAIMED AN EXPENDITURE OF RS.33.14 LAC S UNDER THE HEAD FREIGHT & CARTAGE OUTWARD AS AGAINST RS.2.92 LAC S IN THE IMMEDIATELY PRECEDING YEAR. THE ASSESSING OFFICER ASKED THE ASSESSEE TO JUSTIFY THE SAME. IT IS NOTED BY THE ASSES SING OFFICER THAT THE ASSESSEE COULD NOT JUSTIFY THE STEEP INCREASE IN THE EXPENSES AND THEREFORE, HE MADE DISALLOWANCE OF 30% OF THE EXPENSES AND IN THIS MANNER, MADE DISALLOWANCE OF RS.9,94,120/ - IN ASSESSMENT YEAR 2001 - 2002. WHEN THE ASSESSEE CARRIED T HE MATTER IN APPEAL BEFORE CIT(A), HE HELD THAT INSTEAD OF 30%, DISALLOWANCE OF 15% WILL MEET THE ENDS OF JUSTICE. 17.1 SIMILARLY IN ASSESSMENT YEAR 2003 - 04, IT IS NOTED BY THE ASSESSING OFFICER THAT THE ASSESSEES CLAIM OF EXPENDITURE IS OF RS.108.19 LAC S UNDER THE HEAD FREIGHT & CARTAGE OUTWARD AS AGAINST RS.33.14 LAC S IN ASSESSMENT YEAR 2001 - 02 AND RS.101.97 LAC S IN ASSESSMENT YEAR 2002 - 03. SINCE THE ASSESSEE COULD NOT EXPLAIN THE ABNORMAL INCREASE IN THE EXPENDITURE, THE ASSESSING OFFICER MADE DISA LLOWANCE OF 30% OF THE EXPENSES CLAIM ED IN THE PRESENT YEAR. IN THIS YEAR ALSO, THE CIT(A) HELD THAT 15% DISALLOWANCE IS PROPER. WE FIND THAT THE ASSESSEE HAS CLAIM ED AN EXPENDITURE OF ONLY RS.2.92 LAC S IN ASSESSMENT YEAR 2000 - 2001 WHICH HAS GONE UP TO R S.33.14 LAC S IN ASSESSMENT YEAR 2001 - 02 AND RS.101.97 LAC S IN ASSESSMENT YEAR 2002 - 2003 AND RS.108.19 LAC S IN ASSESSMENT YEAR 2003 - 04. THE TURNOVER 8 OF THE ASSESSEE IN ASSESSMENT YEAR 2000 - 2001 WAS RS.3828.50 LAC S , WHICH HAS INCREASED TO RS.5701.36 LAC S IN ASSESSMENT YEAR 2001 - 2002 AND RS.9292.52 LAC S IN ASSESSMENT YEAR 2002 - 03 AND RS.16978.54 LAC S IN ASSESSMENT YEAR 2003 - 04. HENCE, IT IS SEEN THAT THE INCREASE IN TURNOVER IN ASSESSMENT YEAR 2001 - 02 AS COMPARED TO ASSESSMENT YEAR 2000 - 2001 WAS AROUND 50% B UT THE EXPENDITURE UNDER THE HEAD FREIGHT AND CARTAGE OUTWARD HAS INCREASED TO RS.33.14 LAC IN ASSESSMENT YEAR 200 1 - 200 2 AS AGAINST RS.2.92 LAC IN ASSESSMENT YEAR 2000 - 2001 . HENCE, IT IS SEEN THAT THE INCREASE IN EXPENSES FOR ASSESSMENT YEAR 2001 - 2002 IS ALMOST 11 TIMES OF THE EXPENSES IN ASSESSMENT YEAR 2000 - 2001 WHEREAS THE INCREASE IN TURNOVER IS AROUND 50 %. THIS FACT IS ALSO IMPORTANT AS NOTED BY THE ASSESSING OFFICER ON PAGE NO. 3 OF THE ASSESSMENT ORDER THAT ALMOST ENTIRE EXPENDITURE CLAIMED UNDER T HIS HEAD WAS INCURRED IN CASH. SINCE THE INCREASE IN EXPENDITURE IS VERY MUCH ABNORMAL AND SUCH INCREASED EXPENSES ARE INCURRED IN CASH AND THE ASSESSEE COULD NOT EXPLAIN THIS ABNORMAL INCREASE IN THE EXPENSES, THE DISALLOWANCE MADE BY THE ASSESSING OFFIC ER TO THE EXTENT OF 30% OF THE EXPENSES IS NOT EXCESSIVE IN THE FACTS OF THE PRESENT CASE IN ASSESSMENT YEAR 2001 - 2002. SIMILARLY, IN ASSESSMENT YEAR 2003 - 04 ALSO, THE INCREASE IN EXPENSES, AS COMPARED TO ASSESSMENT YEAR 2001 - 2002 IS 326% WHEREAS THE TURN OVER OF ASSESSMENT YEAR 2003 - 04 IS RS.16978.55 LAC AS AGAINST TURNOVER OF RS.5701.37 LAC IN ASSESSMENT YEAR 2001 - 2002. HENCE, THE INCREASE IN TURNOVER IS LESS THAN 300% . E VEN IF WE COMPARE THE EXPENSES CLAIMED BY THE ASSESSEE AND TURNOVER OF ASSESSMENT YE AR 2003 - 2004 AND ASSESSME NT YEAR 2001 - 2002 , THE INCREASE IN EXPENDITURE IN ASSESSMENT YEAR 2003 - 04 OVER AND ABOVE THE EXPENDITURE OF ASSESSMENT YEAR 2001 - 2002 IS EXCESS ABOUT 30% BUT SINCE THE EXPENSES OF ASSESSMENT YEAR 2001 - 02 ITSELF ARE EXCESSIVE AND WE FEEL THAT T HE DISALLOWANCE OF 30% OUT OF EXPENSES IN ASSESSMENT YEAR 2001 - 2002 IS NOT EXCESSIVE , THE DISALLOWANCE OF 30% IN ASSESSMENT YEAR 9 2003 - 2004 IS ALSO REASONABLE BECAUSE IN ASSESSMENT YEAR 2003 - 2004 ALSO, IT IS NOTED BY THE ASSESSING OFFICER THAT F REIGHT & CARTAGE OUTWARD PAYMENT OF RS.51.57 LAC HAVE BEEN MADE IN CASH, WHICH WAS NOT VERIFIABLE AS PER THE ASSESSING OFFICER IN PARA 7 OF THE ASSESSMENT ORDER FOR THAT YEAR. HENCE, IN BOTH THE YEARS, WE FIND THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER OF 30% OF EXPENSES UNDER THE HEAD FREIGHT AND CARTAGE OUTWARD IS REASONABLE AND JUSTIFIED BUT SINCE THE APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2001 - 2002 HAS BEEN DISM ISSED BECAUSE OF LOW TAX EFFECT, W E HOLD THAT THE GROUND NO. 2 OF ASSESSEES APPEAL IN BOTH THE YEARS IS REJECTED WHEREAS GROUND NO. 3 OF REVENUES APPEAL FOR ASSESSMENT YEAR 2003 - 04 IS ALLOWED. 18. GROUND NO. 4 IN ASSESSEES APPEAL FOR ASSESSMENT YEAR 2001 - 2002 IS AS UNDER: THAT THE L EARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE TO THE EXTENT OF RS. 1 , 89 , 042 . 30 MADE ON ACCOUNT OF VEHICLE RUNNING & MAINTENANCE 19. GROUND NO. 4 IN ASSESSEES APPEAL FOR ASSESSMENT YEAR 2003 - 2004 IS AS UNDER: THAT THE LEARNED CIT(A) HAS ERRED I N CONFIRMING THE DISALLOWANCE TO THE EXTENT OF RS. 1 , 05 , 130 . 00 MADE ON ACCOUNT OF VEHICLE RUNNING & MAINTENANCE 20. GROUND NO. 4 IN REVENUES APPEAL FOR ASSESSMENT YEAR 2003 - 2004 IS AS UNDER: THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALLOWANCE MADE BY THE AO OF RS.2,62,825/ - OUT OF VEHICLE RUNNING, MAINTENANCE EXPENSES TO 10% OF THE TOTAL EXPENSES WITHOUT GIVING ANY REASONS FOR RESTRICTING THE DISALLOWANCES AND NOT APPRECIATING THE FACTS THAT NO LOG BOOK WAS MAINTAINED BY THE AS SESSEE COMPANY. 10 21. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER IN BOTH THE YEARS WHEREAS LEARNED A.R. OF THE ASSESSEE SUBMITTED THAT UNDER THIS HEAD ALSO, NO DISALLOWANCE IS JUSTIFIED IN VIEW OF THE JUDGMENT OF HON'BLE GUJARAT HIGH COURT RENDERED IN THE CASE OF SAYAJI IRON AND ENGG. CO. (SUPRA). 22. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND FORCE IN THE SUBMISSIONS OF LEARNED A.R. OF THE ASSESSEE BECAUSE AS PER THIS JUDGMENT OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF SAYAJI IR ON AND ENGG. CO. (SUPRA), EVEN IF THERE IS PERSONAL USE OF VEHICLES ETC. BY THE DIRECTORS / EMPLOYEES OF THE COMPANY, THE SAME CAN BE INCLUDED IN THE PERQUISITES VALUE OF THE CONCERNED DIRECTOR/ EMPLOYEE BUT THE DISALLOWANCE CANNOT BE MADE IN THE HANDS OF THE ASSESSEE COMPANY. THEREFORE, BY RESPECTFULLY FOLLOWING THIS JUDGMENT OF HON'BLE GUJARAT HIGH COURT, BOTH THESE GROUNDS OF THE ASSESSEE ARE ALLOWED AND GROUND NO. 4 OF THE REVENUE IS REJECTED. 23. GROUND NO. 5 IN ASSESSEES APPEAL FOR ASSESSMENT YEAR 2001 - 2002 IS AS UNDER: THAT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE TO THE EXTENT OF RS. 1 , 31,60,083.00 MADE ON ACCOUNT OF CONSUMABLE STORES. 24. GROUND NO. 5 IN ASSESSEES APPEAL FOR ASSESSMENT YEAR 2003 - 2004 IS AS UNDER: THAT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE TO THE EXTENT OF RS. 1 , 14,31,332.00 MADE ON ACCOUNT OF CONSUMABLE STORES. 25. GROUND NO. 4 IN REVENUES APPEAL FOR ASSESSMENT YEAR 2003 - 2004 IS AS UNDER: 11 THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALLOWANCE MADE BY THE AO OF RS.2,28,62,664/ - OUT OF CONSUMABLE STORES EXPENSES TO 5% OF THE TOTAL EXPENSES WITHOUT GIVING ANY REASONS FOR RESTRICTING THE DISALLOWANCES AND NOT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 26. LEARNED A.R. OF THE ASSESSEE SUBMITTED THAT THE ENTIRE STORES CONSUMED IS EXCISE PAID ITEMS AS WELL AS THE ENTIRE PRODUCTION OF THE ASSESSEE COMPANY IS SUBJECT ED TO EXCISE DUTY AND THEREFORE, THE AD HOC D ISALLOWANCE MADE BY THE ASSESSING OFFICER IS NOT JUSTIFIED. 27. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER S IN BOTH THE YEARS. 28. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE ASSESSING OFFICER HAS MADE FOLLOWING OBSERVATIO NS IN THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2001 - 02 BEFORE MAKING DISALLOWANCE OF RS.1,31,60,083/ - IN THAT YEAR: FROM THE PROFIT & LOSS ACCOUNT IT WAS FOUND THAT ASSESSEE HAS CLAIMED AN EXPENDITURE AMOUNTING TO RS.13,16,00,830/ - UNDER THE HEAD CONSUM ABLES STORES' AS AGAINST RS.5,79,67,751/ - CLAIMED IN THE IMMEDIATE PRECEDING PERIOD. ASSESSEE WAS REQUIRED TO FURNISH THE DETAILS IN RESPECT OF THE SAME AS ALSO ITS NATURE. VIDE WRITTEN SUBMISSION DATED 20.01.2003, IT WAS EXPLAINED THAT THE CLAIM PERTAINS TO GEN. CONSUMABLE ITEMS . IT WAS STATED THAT THE COMPLETE SUPPORTING VOUCHERS CAN NOT READILY BE PRODUCED AS THE SAME ARE LYING IN FACTORY AND OFFICE. THE CLAIM WAS EXAMINED IN THE LIGHT OF FACTS AVAILABLE ON RECORD AS ALSO IN THE BACK GROUND OF WRITTEN S UBMISSIONS MADE BY THE ASSESSEE AS AFORESAID. IT WAS OBSERVED DURING THE COURSE OF SCRUTINY OF CLAIM THAT SUPPORTING EVIDENCES WERE NOT AVAILABLE IN RESPECT OF MANY CLAIMS MADE UNDER THIS HEAD. THE EXPENSES CLAIMED UNDER THIS HEAD WERE ALSO FOUND TO HAVE I NCURRED IN CASH. THESE FACTS CLEARLY SUGGEST THAT THE EXPENSES CLAIMED UNDER THIS HEAD WERE NOT OPEN TO VERIFICATION COMPLETELY AND THE CLAIM COULD NOT SUBSTANTIATED WITH SUPPORTING VOUCHERS COMPLETELY. ACCORDINGLY, KEEPING IN 12 VIEW THE TOTALITY OF THE FACT S AND CIRCUMSTANCES OF THE CASE INCLUDING THE FACT THAT ASSESSEE 10% OF THE EXPENSES CLAIMED UNDER THIS HEAD WILL BE DISALLOWED WHICH WILL TAKE CARE OF THE PORTION OF THE EXPENDITURE REMAINING UNSUBSTANTIATED . THE DISALLOWANCE WORKS OUT TO RS.1,31,60,083/ - . 29. SIMILARLY, IN ASSESSMENT YEAR 2003 - 04, THE ASSESSING OFFICER MADE DISALLOWANCE OF RS.2,28,62,664/ - BY MAKING FOLLOWING OBSERVATIONS IN PARA 10 OF THE ASSESSMENT ORDER, WHICH IS REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: - 10. FROM THE PROFIT & LOSS A/C, IT WAS FOUND THAT THE ASSESSEE HAS CLAIMED AN EXPENDITURE AMOUNTING TO RS.22,86,26,638/ - UNDER THE HEAD CONSUMABLE STORES AS AGAINST RS.13,16,00,830/ - AND RS.14,85,54,841/ - IN THE A.Y. 2001 02 & 2002 - 03 RESPECTIVELY. THE ASSESSEE WAS RE QUIRED TO FURNISH THE DETAILS IN RESPECT OF THE SAME AS ALSO ITS NATURE. VIDE WRITTEN SUBMISSION DATED ............... THE ASSESSEE SUBMITTED THAT ITS PRODUCTION HAS INCREASED TO 50710.266 MT FROM 26587.050 MT AND 291 44.420 MT DECLARED IN A.Y. 2001 02 & 2002 - 03 RESPECTIVELY. THE EXPENDITURE ON CONSUMABLES IN THE A.Y. 2001 - 02 & 2002 - 03 SHOWN WAS RS.13.16,00,830/ - & RS.14,85,54,841/ - RESPECTIVELY AS AGAINST THESE THE EXPENSES UND ER THE HEAD CONSUMABLE STORES SHOWN THIS YEAR IS RS.22,86,26,638/ - . IN THIS REGARD, THE ASSESSEE HAS FURNISHED A CHART SHOWING THAT PER TON EXPENDITURE SHOWN IN A.Y. 2001 - 02 & 2002 - 03 WAS RS.1,949.81 & RS.5,097/ - RESPECTIVELY AS AGAIN ST WHICH THE EXPENSES ON CONSUMABLE STORES IS RS.4,508,49/ - PER TON. THUS, THE ASSESSEE PLEADED THAT THE EXPENDITURE WHEN SEEN WITH REFERENCE TO THE PER TON PRODUCTION THIS YEAR AS COMPARED TO PRECEDING YEARS HAS GONE DOWN REASONABLY. THE ASSESSEE COMPANY HAS FURTHER STATED THAT ALMOST ALL THE EXPENSES ARE VOUCHED AND ALMOST ALL THE PAYMENTS HAVE BEEN MADE BY CHEQUES. THE ABOVE CONTENTIONS/SUBMISSIONS OF THE ASSESSEE HAVE BEEN EXAMINED WITH REFERENCE TO BOOKS OF ACCOUNT PRODUCED DURING THE COURSE OF HEARING. DURING THE COURSE OF SCRUTINY OF THIS CLAIM, THE ASSESSEE FAILED TO PRODUCE SUPPORTING EVIDENCE I.E. BILLS AND VOUCHERS IN RESPECT OF VARIOUS PURCHASES MADE UNDER THIS HEAD. THE ASSESS EE HAS ALSO ADMITTED TO HAVE NO STOCK REGISTER FOR 13 CONSUMABLES FROM WHICH THE DAY TO DAY CONSUMPTION OF CONSUMABLES AND ITS BALANCE COULD BE VERIFIED. THIS FACT CLEARLY SUGGEST THAT THE EXPENSES CLAIMED UNDER THIS HEAD WERE NOT OPEN TO VERIFICATION COMPLETELY. ACCORDINGLY, KEEPING IN VIEW THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, 10% OF THE EXPENSES CLAIMED UNDER THIS HEAD IS DISALLOWED WHICH WILL TAKE CARE OF THE PORTION OF THE EXPENDITURE REMAINING UNSUBSTANTIATED. THE DISALLOWANCE WORKS OUT TO RS.2,28,62,664/ - IS ADDED TO THE INCOME OF THE ASSESSEE. 30. WHEN THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) IN ASSESSMENT YEAR 2001 - 02, HE CONFIRMED THE ENTIRE DISALLOWANCE OF RS.1,31,60,083/ - BY MAKING FOLLOWING OBSERVATIONS IN PARA 6.2 AND 6.2.1 OF HIS ORDER, WHICH ARE REPRODUCED BELOW FOR THE SA KE OF READY REFERENCE: - 6.2 DECISION I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE. THE FACT REMAINS THAT THE BILLS & VOUCHERS HAVE NEITHER BEEN PRODUCED BEFORE THE ASSESSING OFFICER NOR BEFORE THE UNDERSIGNED. SECONDLY, NO STOCK REGISTER FOR SUCH CONSUMABLES HAS BEEN MAINTAINED. FURTHER, THE ASSESSEE HAS FAILED TO OFFER ANY PLAUSIBLE EXPLANATION IN RESPECT OF DISPROPO RTIONATE RISE IN THE EXPENDITURE INCURRED ON CONSUMABLES AS COMPARED TO THE INCREASE IN SALES/PRODUCTION. MERELY BECAUSE MOST OF THE PAYMENTS ARE MADE BY CHEQUE (AS CLAIMED BY THE APPELLANT), THE SAME DOES NOT BY ITSELF PROVE THE CASE OF THE ASSESSEE. FURT HER, IN THE NEXT YEAR I.E. 2002 - 03, THE TOTAL TURNOVER HAS INCREASED TO RS. 92.93 CRORES AS AGAINST CURRENT YEAR'S TURNOVER (INCLUDING TRADING) OF RS. 57.00 CRORES; WHEREAS THE CONSUMABLES HAVE INCREASED TO ONLY RS. 14.86 CRORES (IN A.Y. 2002 - 03) FROM RS. 13.16 CRORES IN THE CURRENT YEAR. THIS ALSO SHOWS THAT EVERYTHING IS NOT HUNKY - DORY WITH THE AMOUNT OF EXPENDITURE SHOWN TO HAVE BEEN INCURRED ON CONSUMABLES IN THE CURRENT YEAR. 6.2.1 TO CLAIM AN EXPENDITURE AS A DEDUCTION UNDER THE L.T.ACT. THE ONUS IS ON THE ASSESSEE TO PROVE THE INCURRING OF THE SAME WITH VERIFIABLE MATERIAL. IN THIS CASE, THE ASSESSEE HAS MISERABLY FAILED TO LEAD ANY VERIFIABLE EVIDENCE IN THE FORM OF BILLS & VOUCHERS IN THIS REGARD. NO DOUBT THERE WOULD BE 14 EXPENDITURE ON ACCOUNT OF C ONSUMABLE IN IRON & STEEL MAKING. HOWEVER, IT IS THE QUANTUM OF SUCH EXPENDITURE WHICH IS IN QUESTION. IRON AND STEEL MAKING IS A CHEMICAL PROCESS WHERE DIFFERENT COMPONENTS COMBINE IN FIXED/ALMOST FIXED PROPORTION TO PRODUCE THE FINAL PRODUCT(S). IN THIS CASE, DURING THE CURRENT YEAR, THERE HAS BEEN A MINOR INCREASE IN PRODUCTION OF IRON & STEEL PRODUCTS FROM ABOUT 23,500 MT TO 26,587 MT, WHEREAS THE CONSUMABLES HAVE INCREASED BY 100% WHICH IS NOT ONLY INEXPLICABLE BUT AGAINST ALL THE' PRINCIPLE OF CHEMICA L SCIENCE. THE ASSESSEE HAS NOT HELPED THE MATTER BY KEEPING MUM ON SUCH DISPROPORTIONATE INCREASE IN CONSUMPTION OF CONSUMABLES. THE PLEA THAT OUT OF TOTAL PURCHASES OF CONSUMABLES AT RS. 1316 LACS, CONSUMABLES WORTH RS. 1052 LACS WERE EXCISE - BEARING, DOE S NOT HELP THE CASE OF THE ASSESSEE. THE L.T.ACT AND EXCISE ACT OPERATE IN TWO SEPARATE FIELDS. IN MY VIEW, THE A.O HAS BEEN QUITE GENEROUS IN MAKING THE SAID DISALLOWANCE @ 10%. LOOKING AT THE FACTS AND CIRCUMSTANCES OF THE CASE, THE SAID DISALLOWANCE IS CONFIRMED IN TOTO. 31. IN ASSESSMENT YEAR 2003 - 04, WHEN THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) , HE HELD THAT THE DISALLOWANCE OF 5% WILL MEET THE ENDS OF JUSTICE BECAUSE THERE IS NO DISPROPORTIONATE JUMP IN THE CONSUMPTION OF CONSUMABLES IN ASSESSMENT YEAR 2003 - 04. HENCE, WE MAKE OUT A CHART OF TURNOVER IN ASSESSMENT YEAR 2000 - 2001 TO ASSESSMENT YEAR 2003 - 04 AS WELL AS CONSUMPTION OF STO RES IN THESE YEARS, WHICH IS AS UNDER: ASSESSMENT YEAR TURNOVER CONSUMPTION OF CONSUMABLE STOCK -------------------- --------------------- ---------------------- 2000 - 01 3828.50 LAC 579.68 LAC 2001 - 02 5701.37 LAC 1316.01 LAC 2002 - 03 9292.53 LAC 1485.55 LAC 2003 - 04 16978.55 LAC 2286.27 LAC HENCE, WHEN WE COMPARE THE TURNOVER OF ASSESSMENT YEAR 2000 - 01 TO ASSESSMENT YEAR 2001 - 02, WE FIND THAT THE INCREASE IN TURNOVER IS AROUND 5 0 % BUT WHEN WE COMPARE THE INCREASE IN EXPENSES UNDER THE HEAD 15 CONSUMPTION OF CONSUMABLE STO RES , THE INCREASE IS AROUND 127%, WH ICH IS QUITE ABNORMAL AND THE SAME COULD NOT BE EXPLAINED BY THE ASSESSEE AND THIS IS ALSO WORTH NOTING THAT THE EXPENSES UNDER THIS HEAD WERE INCURRED IN CASH AS NOTED BY THE ASSESSING OFFICER ON PAGE NO. 4 OF THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2001 - 02, THE RELEVANT PORTION OF WHICH HAS BEEN REPRODUCED ABOVE. WHEN WE COMPARE THE TURNOVER OF ASSESSMENT YEAR 2003 - 04 WITH THAT OF ASSESSMENT YEAR 2001 - 02, WE FIND THAT THE INCREASE IN TURNOVER IS ABOUT 200% AND THE INCREASE IN CONSUMPTION OF CONSUMABLES STOCK IN ASSESSMENT YEAR 2003 - 04 AS COMPARED TO ASSESSMENT YEAR 2001 - 02 IS ABOUT 75%. EVEN IF WE REDUCE THE EXPENSES OF ASSESSMENT YEAR 2001 - 02 BY 30% BEING DISALLOWANCE MADE BY THE ASSESSING OFFICER IN THAT YEAR, THE CONSUMPTION OF THAT YEAR GOES DOWN TO 921.21 LAC AND IF WE COMPARE THE CONSUMPTION OF THE PRESENT YEAR I.E. 2286.27 LAC WITH SUCH REDUCED CONSUMPTION OF ASSESSMENT YEAR 2001 - 02 I.E. 921.21 LAC THEN THE INCREASE IN THE PRESENT YEAR IS AROUND 150% AS COMPARED TO INCREASE IN TURNOVER IN THE PRES ENT YEAR AS COMPARED TO ASSESSMENT YEAR 2001 - 02 OF 197%. HENCE, IT IS SEEN THAT THE INCREASE IN EXPENSES IN THE ASSESSMENT YEAR 2003 - 04 IS NOT ABNORMAL EVEN IF THE SAME IS COMPARED WITH THE EXPENSES FOR ASSESSMENT YEAR 2001 - 02 AFTER CONSIDERING 30% DISALL OWANCE IN THAT YEAR. THEREFORE, IN OUR CONSIDERED OPINION, THE DISALLOWANCE IN ASSESSMENT YEAR 2001 - 02 MADE BY THE ASSESSING OFFICER AND CONFIRMED BY LEARNED CIT(A) TO THE EXTENT OF 30% IN THAT YEAR IS PROPER AND REASONABLE BUT NO DISALLOWANCE IN ASSESSME NT YEAR 2003 - 04 IS CALLED FOR IN THE FACTS OF THE PRESENT CASE IN VIEW OF THE FACT THAT THE INCREASE IN EXPENSES UNDER THIS HEAD IN ASSESSMENT YEAR 2003 - 04 AS COMPARED TO THE REDUCED EXPENSES OF ASSESSMENT YEAR 2001 - 02 IS ABOUT 150% WHEN THE TURNOVER INCRE ASE IN ASSESSMENT YEAR 2003 - 04 AS COMPARED TO ASSESSMENT YEAR 20001 - 02 IS ABOUT 200%. WE HOLD ACCORDINGLY AND THEREFORE, GROUND NO. 5 OF ASSESSEES APPEAL FOR 16 ASSESSMENT YEAR 2001 - 02 IS REJECTED AND GROUND NO. 5 OF THE ASSESSEES APPEAL IN ASSESSMENT YEAR 2003 - 04 IS ALLOWED AND GROUND NO. 5 OF THE REVENUE APPEAL IN ASSESSMENT YEAR 2003 - 04 IS REJECTED. 32. GROUND NO. 6 IN ASSESSEES APPEAL FOR ASSESSMENT YEAR 2001 - 2002 IS AS UNDER: THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.1,10,33 2/ - MADE ON ACCOUNT OF PREVIOUS PERIOD ITEMS. 33. LEARNED A.R. OF THE ASSESSEE SUBMITTED THAT THIS GROUND IS NOT PRESSED. ACCORDINGLY, THIS GROUND OF THE ASSESSEE IS REJECTED AS NOT PRESSED. 34. GROUND NO. 7 IN ASSESSEES APPEAL FOR ASSESSMENT YEAR 2001 - 2002 IS AS UNDER: THE LEARNED ASSESSING OFFICER HAS ERRED IN NOT DECIDING THE ALLOWANCE OF UNABSORBED DEPRECIATION AMOUNTING TO RS.31,86,056/ - . 35. IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT SINCE THERE IS ASSESSED LOSS AS PER THE ASSE SSMENT ORDER EVEN AFTER MAKING VARIOUS DISALLOWANCE BY THE ASSESSING OFFICER, DIRECTION MAY BE GIVEN TO THE ASSESSING OFFICER TO ALLOW CARRY FORWARD OF UNABSORBED DEPRECIATION. 36. LEARNED D. R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW . 37. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WHEN WE GO THROUGH THE ORDER OF LEARNED CIT(A) FOR ASSESSMENT YEAR 2001 - 02, WE FIND THAT THE ISSUE REGARDING UNABSORBED DEPRECIATION OF RS.3186.56 LAC IS NOT ARISING OUT OF ORDER OF CIT(A) IN THAT YEAR BEC AUSE THE GROUND RAISED BY THE ASSESSEE BEFORE CIT(A) WAS REGARDING DISALLOWANCE OUT OF COMMISSION, OUT 17 OF TELEPHONE EXPENSES, OUT OF FREIGHT CARTAGE OUTWARD, OUT OF VEHICLE RUNNING EXPENSES, OUT OF CONSUMABLE STO RES AND OUT OF PREVIOUS YEARS EXPENSES AND T HIS ISSUE HAS BEEN RAISED BY THE ASSESSEE BEFORE US BY WAY OF NORMAL GROUNDS AND NOT BY WAY OF ADDITIONAL GROUND AND THEREFORE, THIS GROUND OF THE ASSESSEE DOES NOT CALL FOR ANY ADJUDICATION BECAUSE THIS ISSUE IS NOT ARISING OUT OF THE ORDER OF LEARNED CIT (A). ACCORDINGLY, THIS GROUND OF THE ASSESSEE IS REJECTED. 38. THERE IS NO OTHER GROUND LEFT IN THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2001 - 02. THE ONLY REMAINING GROUND IS GROUND NO. 6 IN ASSESSEES APPEAL FOR ASSESSMENT YEAR 2003 - 04, WHICH READS AS UNDER: THAT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.11,000/ - MADE ON ACCOUNT OF DEPRECIATION ON MACHINERY. 39. LEARNED A.R. OF THE ASSESSEE REITERATED THE SAME CONTENTIONS WHICH WERE RAISED BEFORE LEARNED CIT(A) WHERE AS LEARNED D. R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 40. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IT IS NOTED BY LEARNED CIT(A) IN PARA 7 OF HIS ORDER FOR ASSESSMENT YEAR 2003 - 04 THAT THE ASSESSING OFFICER HAS DIS ALLOWED THE CLAIM OF DEPRECIATION OF RS.11,000/ - ON THE BASIS THAT THE ASSESSEE COULD NOT PRODUCE THE BILL FOR RS.44 LAC BEING THE COST OF NEW ADDITION TO PLANT & MACHINERY. THE SAID BILL WAS NOT PRODUCED BEFORE LEARNED CIT(A) ALSO AND THE SAME IS ALSO NO T PRODUCED BEFORE US AND THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LEARNED CIT(A) ON THIS ISSUE. THIS GROUND IS REJECTED. 41. IN THE RESULT, BOTH THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2001 - 02 AND 2003 - 04 ARE PARTLY ALLOWE D AND THE APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2003 - 04 IS PARTLY ALLOWED. 18 42. IN THE COMBINED RESULT, BOTH THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2001 - 02 AND 2003 - 04 ARE PARTLY ALLOWED, THE APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2001 - 02 IS DISMISSED AND THE APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2003 - 04 IS PARTLY ALLOW ED AND BOTH THE CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. (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: 30 /07/2015 *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