Suryakant Narshibhai Patel, Nadiad V. The Income tax Officer,Ward-4, Nadiad

ITA 4535/AHD/2007

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9603 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 06-10-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 26-12-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJIB JAIN
• Assessee Lawyers: M K PATEL
• Keywords: Opportunity of being heard; Capital expenditure
• Section: 37(1); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D, AHMEDABAD BEFORE SHRI BHAVNESH SAINI (JM) AND SHRI D.C. AGARW AL (AM) I.T.A. NO.4535/AHD/2007 (ASSESSMENT YEAR 2004-05) SHRI SURYAKANT NARSHIBHAI PATEL VS ITO, WD.4 SHETH POLE, NADIAD NADIDAD PAN : ADOPP3118P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MK PATEL RESPONDENT BY : SHRI RAJIB JAIN O R D E R BHAVNESH SAINI : THIS APPEAL BY ASSESSEE IS DIRECTE D AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX(APPEALS)-IV, BARODA DATE D 11-09-2007 FOR ASSESSMENT YEAR 2004-05 ON THE FOLLOWING EFFECTIVE GROUNDS: 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDI TION OF RS.10,00,000/- PAID TO ONE SHRI GOPALBHAI K SHAH, W HO WAS APPOINTED TO GET THE LAND, WHICH WAS ENCUMBRANCE BY THE UNAUTHORIZED PERSON / TRESPASSERS. SHRI GOPALBHAI K. SHAH CARRIED OUT THE WORK AND PAYMENT WAS MADE TO HIM FOR THE SE RVICES RENDERED. AS SUCH ADDITION OF RS.10,00,000/- MAY KI NDLY BE DELETED. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDIT ION OF RS.73,000/- PAID BY WAY OF INTEREST ON THE CREDIT B ALANCE OF SHRI GOPALBHAI K SHAH. CREDIT OF RS.10 LAKHS FOR SERVIC ES WAS MADE AT THE END OF THE YEAR AND AS SUCH THERE WAS NO QUESTI ON OF BEING INTEREST ON RS.10 LAKHS. IT IS THEREFORE SUBMITTED THAT THE ADDITION OF RS.73,000/- BE DELETED. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES, PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSIDERED TH E MATERIAL AVAILABLE ON RECORD. BRIEFLY, THE FACTS OF THE CASE ARE THAT ASSESSEE HA S DERIVED SHARE OF PROFIT FROM PARTNERSHIP FIRM, PENSION INCOME, LTCG AND INCOME F ROM OTHER SOURCES. IT WAS NOTICED FROM THE PERUSAL OF THE PROFIT & LOSS ACCOU NT FURNISHED WITH THE RETURN OF I.T.A. NO.4535/AHD/2007 2 INCOME THAT THE ASSESSEE HAS DEBITED RS.10 LAKHS BE ING AN AMOUNT TRANSFERRED TO SHRI GOPALBHAI K SHAH FOR KABAJA (POSSESSION) AN D FURTHER HAS CLAIMED INTEREST OF RS.73,000 TO SHRI GOPALBHAI K SHAH. THE ASSESSEE HAS ALSO CLAIMED SECURITY SALARY AND EXPENSES FOR AN AMOUNT OF RS.5 LAKHS. ASSESSEE WAS DIRECTED BY THE ASSESSING OFFICER TO FURNISH THE DE TAILED ADDRESS OF SHRI GOPALBHAI K SHAH TO WHOM THE PAYMENT OF RS.10 LAKHS WAS MADE WITH EXPLANATION FOR INTEREST PAYMENT. ASSESSEE WAS ALSO DIRECTED TO EX PLAIN THE NATURE OF THE EXPENSES CLAIMED IN RESPECT OF SECURITY SALARY AND EXPENSES FOR LAND. THE ASSESSEE, THOUGH FURNISHED DETAILS FOR SECURITY SAL ARY AND EXPENSES, HAS FAILED TO FILE DETAILS OF INTEREST DEBITED IN THE ACCOUNT OF SHRI GOPALBHAI K SHAH AND PAYMENT OF KABJA AMOUNTING TO RS.10 LAKHS. ASSESSE E WAS ALSO DIRECTED TO PRODUCE SHRI GOPALBHAI K SHAH BEFORE THE ASSESSING OFFICER, BUT THE REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT HE WA S OUT OF INDIA AND AS SUCH ASSESSEE WAS NOT PRODUCED BEFORE THE ASSESSING OFFI CER. THE POWER OF ATTORNEY HOLDER, THE SON OF THE ASSESSEE WAS ALSO REQUESTED TO FURNISH COMPLETE ADDRESS OF SHRI GOPALBHAI K SHAH. HE HAS SUBMITTED HIS ADD RESS BUT COULD NOT FURNISH THE DETAILS OF THE PAYMENT MADE TO SHRI GOPALBHAI K SHAH. SUMMONS U/S 131 WERE ACCORDINGLY ISSUED TO SHRI GOPALBHAI K SHAH AN D THE SAME WAS SENT THROUGH THE WARD INSPECTOR OF THE ASSESSING OFFICER . THE SUMMONS WAS RECEIVED BY SHRI AMIT G SHAH, WHO IS STATED TO BE THE SON OF SHRI GOPALBHAI SHAH. HOWEVER, SHRI GOPALBHAI K SHAH DID NOT APPEAR BEFOR E THE ASSESSING OFFICER. ASSESSEES REPRESENTATIVE WAS ACCORDINGLY DIRECTED TO PRODUCE SHRI GOPALBHAI K SHAH BEFORE THE ASSESSING OFFICER AND FINAL OPPORTU NITY WAS GIVEN WITH DIRECTION THAT IN CASE OF NON PRODUCTION ADVERSE INFERENCE WI LL BE DRAWN IN THE MATTER. IT WAS EXPLAINED THAT RS.10 LAKHS WAS PAID TO SHRI GOP ALBHAI K SHAH FOR VACATING THE TRESPASSERS FROM THE LAND, WHO IS NOT AVAILABLE AND AS SUCH COULD NOT BE PRODUCED BEFORE THE ASSESSING OFFICER. IT WAS ALSO REQUESTED TO GIVE SUMMONS TO THE SAID PERSON AND IN CASE THE ASSESSEE IS AB LE TO CONTACT WITHIN THIS MONTH, THE ASSESSEE WILL PRODUCE THE SAID PERSON. IT WAS ALSO EXPLAINED THAT AMOUNT WAS PAID TO SHRI GOPALBHAI K SHAH THROUGH AC COUNT PAYEE CHEQUES FOR GETTING THE POSSESSION OF THE LAND. IT WAS ALSO EX PLAINED THAT PLOT OF THE LAND WAS I.T.A. NO.4535/AHD/2007 3 SOLD 2003 ONWARDS. OTHERWISE, THE ASSESSEE WOULD N OT HAVE BEEN ABLE TO HAVE THE CLEAR POSSESSION OF THE LAND AND COULD NOT HAVE GIVEN TITLE TO THE RESPECTIVE PURCHASERS. IT WAS ALSO EXPLAINED THAT THE ASSESSE E HAS CAPITALIZED THE ABOVE EXPENSES AND INCREASED THE VALUE OF THE LAND BY RS. 15 LAKHS. THE ASSESSING OFFICER, HOWEVER, DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE BECAUSE NO BASIC EVIDENCE, I.E. PAYMENT FOR VOUCHER, DETAILS OF WORK CARRIED OUT AND THE NATURE OF THE ENCROACHMENT HAVE BEEN EXPLAINED. THE ASSESSIN G OFFICER, THEREFORE, TREATED IT TO BE BOGUS EXPENDITURE AND DISALLOWED R S.10 LAKHS. NO DETAILS WERE FURNISHED WITH REGARD TO THE INTEREST PAYMENT. THE SAME WAS ALSO DISALLOWED. 3. THE ADDITION WAS CHALLENGED BEFORE THE LD. CIT(A ) AND THE ASSESSEES REPRESENTATIVE WAS ASKED TO ADDUCE ANY EVIDENCE TO SHOW THAT THE LAND WAS ENCROACHED AND WHAT EFFORTS HAVE BEEN MADE SINCE 20 00 FOR GETTING THE LAND FREE OF TRESPASSERS. ASSESSEE WAS ALSO ASKED TO FI LE DETAILS OF THE POLICE REPORT AND OTHER EVIDENCE TO SHOW WHETHER THE LAND WAS ENC UMBERED. ASSESSEES REPRESENTATIVE, HOWEVER, REPLIED IN NEGATIVE. ASSE SSEE WAS ALSO DIRECTED TO PRODUCE ANY EVIDENCE THAT SHRI GOPALBHAI K SHAH WAS COMPETENT TO GET THE LAND FREE FROM ENCUMBRANCE. HOWEVER, NO EVIDENCE WAS FI LED WHETHER HE ACTUALLY GOT THE LAND FREE FROM ENCUMBRANCE, WHETHER POLICE WAS USED, OR WHETHER LOCAL GUNDAS WERE USED. THE ASSESSEE HAD NO KNOWLEDGE AS TO HOW THE LAND WAS VACATED. THE LD.CIT(A) IN THE ABSENCE OF ANY EVIDE NCE ON RECORD AS NOTED ABOVE FOUND THAT ASSESSEE FAILED TO ESTABLISH THAT PAYMENT MADE TO SHRI GOPALBHAI K SHAH WAS FOR THE PURPOSE OF BUSINESS. ADDITION WAS ACCORDINGLY CONFIRMED. 4. AS REGARDS INTEREST IT WAS SUBMITTED THAT INTERE ST WAS PAID TO SHRI GOPALBHAI K SHAH AS PER AGREEMENT. LD.CIT(A), HOWE VER, HELD THAT SINCE HE HAS CONFIRMED DISALLOWANCE OF RS.10 LAKHS, INTEREST WAS ALSO CONFIRMED TO BE DISALLOWED. I.T.A. NO.4535/AHD/2007 4 5. LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND SUBMITTED THAT ASSESSEE IS HA VING INCOME FROM PURCHASE AND PLOTTING OF LAND AS WELL AS TRADING IN THE LAND S. HE HAS SUBMITTED THAT SON OF SHRI GOPALBHAI K SHAH RECEIVED THE SUMMONS OF THE A SSESSING OFFICER WOULD SHOW THAT HE IS A GENUINE PERSON RESIDING AT THE AD DRESS FURNISHED BY THE ASSESSEE. HE HAS SUBMITTED THAT SHRI GOPALBHAI K S HAH WAS ENGAGED TO GET THE LAND FREE FROM ENCROACHERS; OTHERWISE THE ASSESSEE WOULD NOT HAVE BEEN ABLE TO SELL THE LAND IN PLOTS. HE HAS REFERRED TO SALE DE EDS IN THE PAPER BOOK TO SHOW THAT SHRI GOPALBHAI K SHAH IS ASSOCIATED WITH THE A SSESSEE AND PAYMENTS HAVE BEEN MADE TO HIM BECAUSE OF HIS CONNECTION WITH THE BUSINESS ACTIVITIES OF THE ASSESSEE. LEARNED COUNSEL FOR THE ASSESSEE REFERRE D TO PAPER BOOK FILED WHICH IS THE PROFIT & LOSS ACCOUNT OF THE ASSESSEE AND VA LUATION OF THE CLOSING STOCK AND ALSO REFERRED TO PAPER BOOK PAGE 6 TO SHOW THAT THE RE WAS CREDIT BALANCE IN THE NAME OF SHRI GOPALBHAI K SHAH AND RS.10 LAKHS WAS C REDITED IN HIS ACCOUNT ON THE CLOSING DAY OF THE ACCOUNTING YEAR, I.E. ON 31- 03-2004. THEREFORE, INTEREST WAS PAID FOR THE CREDIT BALANCE AND NOT ON ACCOUNT OF DELAYED PAYMENT OF RS10 LAKHS. HE HAS SUBMITTED THAT SINCE PAYMENTS HAVE B EEN MADE TO SHRI GOPALBHAI K SHAH THROUGH CHEQUE, GENUINENESS OF THE PAYMENT I S PROVED BY THE ASSESSEE. HE HAS SUBMITTED THAT LD.CIT(A) WITHOUT ANY REASONS DISMISSED THE APPEAL OF THE ASSESSEE. 6. ON THE OTHER HAND, LD.DR RELIED UPON THE ORDER O F AUTHORITIES BELOW AND SUBMITTED THAT THE NATURE OF PAYMENT TO SHRI GOPALB HAI K SHAH IS NOT PROVED THROUGH ANY EVIDENCE AND NO EVIDENCE IS FILED TO SU PPORT THE CONTENTION. THEREFORE ADDITION IS RIGHTLY MADE IN THIS CASE. A S REGARDS INTEREST PAYMENT, THE LD.DR SUBMITTED THAT THE MATTER REQUIRES RE-CONSIDE RATION BY THE ASSESSING OFFICER BECAUSE RS10 LAKHS IS CREDITED ON THE LAST DAY OF T HE ACCOUNTING YEAR AND IT MAY HAVE SOME CONNECTION WITH THE OPENING CREDIT BALANC E IN THE CASE OF THE ASSESSEE IN THE ACCOUNT OF SHRI GOPALBHAI K SHAH. I.T.A. NO.4535/AHD/2007 5 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL AVAILABLE ON RECORD. SECTION 37(1) WITH EXPLANATION OF THE I.T. ACT READS AS UNDER:- 37. (1) ANY EXPENDITURE (NOT BEING EXPENDITURE IN THE N ATURE OF DESCRIBED IN SECTIONS 30 TO 36 AND NOT BEING IN THE NATURE OF CAPITAL EXPENDITURE OR PERSONAL EXPENSES OF THE ASSESSEE), LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF THE BUSINESS OR PROFESSION SHALL BE ALLOWED IN COMPUTING THE INC OME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PR OFESSION. EXPLANATION.- FOR THE REMOVAL OF DOUBTS, IT IS HERE BY DECLARED THAT ANY EXPENDITURE INCURRED BY AN ASSESSEE FOR ANY PUR POSE IS AN OFFENCE OR WHICH IS PROHIBITED BY LAW SHALL NOT BE DEEMED TO HAVE BEEN INCURRED FOR THE PURPOSE OF BUSINESS OR PROFES SION AND NO DEDUCTION OR ALLOWANCE SHALL BE MADE IN RESPECT OF SUCH EXPENDITURE. THE ABOVE PROVISION WOULD PROVE THAT THE DEDUCTION OF THE EXPENDITURE WOULD BE ALLOWED IF ASSESSEE PROVED THAT THE SAME WAS LAID O UT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. IN THE EX PLANATION IT IS PROVIDED THAT ANY EXPENDITURE INCURRED BY THE ASSESSEE FOR ANY PURPOS E WHICH IS AN OFFENCE OR WHICH IS PROHIBITED BY LAW SHALL NOT BE DEEMED TO H AVE BEEN INCURRED FOR THE PURPOSE OF BUSINESS OR PROFESSION AND NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF SUCH EXPENDITURE. THE ASSESSEE CLAIMED THAT HE IS DEALING IN THE PROPERTIES AND FOR GETTING THE LAND VACATED FROM THE TRESPASSE RS HE HAS ENGAGED SHRI GOPALBHAI K SHAH FOR GETTING THE POSSESSION FROM TH E TRESPASSERS. THIS MODE ITSELF IS NOT PERMISSIBLE UNDER THE LAW. IF ANY PE RSON IS FOUND ENCROACHED UPON THE PROPERTY OF OTHERS, SUCH PERSON COULD BE EVICTE D FROM THE PROPERTY WITH DUE PROCESS OF LAW. THE ASSESSEE HAS, HOWEVER, EXPLAIN ED THAT HE HAS USED UNLAWFUL MEANS TO GET THE PROPERTY VACATED THROUGH SHRI GOPALBHAI K SHAH. WHEN THE ASSESSEE CANNOT GET THE TRESPASSERS EVICTED FOR CIBLY FROM HIS PROPERTY, SHRI GOPALBHAI K SHAH CANNOT BE ALLOWED TO DO SO. THERE FORE, THE ACT AND ACTION OF THE ASSESSEE DOES SQUARELY AMOUNT TO AN OFFENCE AND IS PROHIBITED BY LAW. SUCH EXPENDITURE CAN NEVER BE ALLOWED AS DEDUCTION FOR B USINESS PURPOSES. MOREOVER, IN THIS CASE, ASSESSEE HAS NOT FURNISHED ANY EVIDENCE BEFORE THE I.T.A. NO.4535/AHD/2007 6 AUTHORITIES BELOW EXPLAINING AS TO WHAT SERVICES HA VE BEEN RENDERED BY SHRI GOPALBHAI K SHAH. NO DETAILS OF THE PERSON VACATIN G THE PROPERTY HAVE BEEN FILED AND EVEN NO DETAILS HAVE BEEN FILED TO SHOW I F ANY POLICE REPORT IS LODGED IN THAT CONNECTION SHOWING OCCUPATION OF THE LAND BY T HE TRESPASSERS. NO DETAILS OF THE LAND AND POSSESSION ARE AVAILABLE AND EVEN ASSE SSEE WAS HAVING NO KNOWLEDGE AS TO HOW THE LAND WAS VACATED. MERELY B ECAUSE, SHRI GOPALBHAI K SHAH IS ASSOCIATED WITH THE ASSESSEE WOULD NOT PROV E THAT RS.10 LAKHS WAS PAID TO HIM FOR BUSINESS PURPOSES BY THE ASSESSEE. ASSE SSEE HAS NOT FURNISHED ANY EVIDENCE OR MATERIAL EITHER BEFORE ASSESSING OFFICE R OR BEFORE LD.CIT(A) TO PROVE THAT EXPENSES WAS INCURRED IN ACCORDANCE WITH LAW A ND WAS LAID OUT WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. SINCE THE ASSESSEE CLAIMED DEDUCTION OF THE EXPENDITURE, THE BURDEN IS UPON THE ASSESSEE TO PROVE THAT SUCH EXPENSES WERE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOS E OF BUSINESS. HOWEVER, ASSESSEE HAS FAILED TO ADDUCE ANY EVIDENCE IN THIS REGARD. MERELY BECAUSE SON OF SHRI GOPALBHAI K SHAH RECEIVED SUMMONS OF THE AS SESSING OFFICER WOULD NOT PROVE GENUINENESS OF THE TRANSACTION IN THE MATTER. SINCE THE ASSESSING OFFICER HAD A DOUBT IN THE EXPLANATION OF THE ASSESSE, HE H AS SUMMONED SHRI GOPALBHAI K SHAH TO APPEAR BEFORE HIM FOR VERIFICATION OF THE PAYMENT, BUT HE DID NOT APPEAR DESPITE SERVICE OF SUMMONS. THEREFORE ASSES SEE WAS DIRECTED TO PRODUCE SHRI GOPALBHAI K SHAH FOR VERIFICATION BEFO RE ASSESSING OFFICER. ULTIMATELY ASSESSEE HAS SHOWN HIS INABILITY TO PROD UCE SUCH PERSON BEFORE ASSESSING OFFICER FOR EXAMINATION. THE ABOVE FACTS WOULD STRENGTHEN THE FINDINGS OF THE AUTHORITIES BELOW THAT BOGUS PAYMENTS HAVE B EEN SHOWN FOR THE PURPOSE OF GETTING THE DEDUCTION. CONSIDERING THE FACTS AN D CIRCUMSTANCES NOTED ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE ORDERS OF THE A UTHORITIES BELOW IN MAKING AND CONFIRMING THE ADDITION. 8. LEARNED COUNSEL FOR THE ASSESSEE HAS LASTLY SUBM ITTED THAT IN CASE THE PAYMENT OF RS10 LAKHS IS IGNORED, THE PROFIT & LOSS ACCOUNT IS TO BE RECASTED AGAIN AND THE PROFIT WOULD BE AROUND RS2,36,106. T HE WORKING OF THE SAME IS FILED ON RECORD. HOWEVER, WE MAY NOTE HERE THAT TH E ASSESSEE HAS FILED RETURN OF I.T.A. NO.4535/AHD/2007 7 INCOME DISCLOSING INCOME AT RS.2,76,440 AND IN CASE WORKING OF THE ASSESSEE IS ACCEPTED AS NOTED ABOVE, IT WOULD BE THE INCOME BEL OW THE RETURNED INCOME. SUCH A PROPOSITION CAN NEVER BE ACCEPTED IN LAW. T HE ABOVE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE THUS CANNOT BE ACC EPTED. SINCE THE ASSESSEE CLAIMED DEDUCTION OF THE EXPENDITURE IN THE PROFIT & LOSS ACCOUNT AND HAS FAILED TO PROVE THE SAME AS PER LAW, IN PRINCIPLE, THE ADDITI ON IS RIGHTLY MADE BY THE AUTHORITIES BELOW. IF THE ASSESSEE FEELS AGGRIEVED AGAINST THE COMPUTATION BY SHOWING THE ABOVE RECASTING OF THE PROFIT & LOSS AC COUNT, HE MAY TAKE STEPS, IF ANY, BEFORE ASSESSING OFFICER IN ACCORDANCE WITH LA W, IF SO ADVISED. IN THE RESULT, GROUND NO.1 OF THE APPEAL OF THE ASSESSEE IS ACCORD INGLY DISMISSED. 9. AS REGARDS THE INTEREST PAYMENT, THE ASSESSEE DI D NOT FILE ANY DETAILS BEFORE THE ASSESSING OFFICER AND THE LD.CIT(A) CONF IRMED THE ADDITION BECAUSE OF THE PAYMENT OF RS.10 LAKHS WAS FOUND TO BE BOGUS. HOWEVER, ASSESSEES COUNSEL IS ABLE TO DEMONSTRATE THAT THE PAYMENT OF RS.73,000 AS INTEREST TO SHRI GOPALBHAI K SHAH HAS NO CONNECTION WITH THE PAYMENT OF RS.10 LAKHS TO HIM. ON 01-04-2003 THERE WAS A CREDIT BALANCE IN THE ACC OUNT OF SHRI GOPALBHAI K SHAH IN A SUM OF RS.7,50,000. TWO PAYMENTS WERE MA DE TO HIM ON 06-05-2003 (PAPER BOOK PAGE 6) IN A SUM OF RS.2,50,000 EACH. RS.10 LAKHS WERE CREDITED TO HIS ACCOUNT ON 31-03-2004. THEREFORE, ON THE LAST DATE OF CREDITING THE AMOUNT THERE WAS NO QUESTION OF ANY DELAYED PAYMENT FOR WH ICH INTEREST WOULD HAVE BEEN PAID. BUT CERTAINLY SOME INTEREST WOULD HAVE BEEN PAID ON THE CREDIT BALANCE OF SHRI GOPALBHAI K SHAH, BUT RS.73,000 IS CLEARLY UNREASONABLE AND UNJUSTIFIED BECAUSE AFTER MAKING PAYMENT IN MAY, 20 03 OF RS.5 LAKHS, THE BALANCE WOULD HAVE BEEN LEFT OUT OF RS.7,50,000 BEI NG OPENING BALANCE AT RS.2,50,000 ON WHICH INTEREST PAYMENT OF RS.73,000 MAY NOT BE JUSTIFIED. THEREFORE, IN OUR OPINION, THE MATTER REQUIRES RECO NSIDERATION AT THE LEVEL OF THE ASSESSING OFFICER. WE ACCORDINGLY SET ASIDE THE FI NDINGS OF AUTHORITIES BELOW WITH REGARD TO INTEREST PAYMENT AND RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH DIRECTION TO REDECIDE THIS ISSUE AFTER GIVING REASONABLY SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE AS SESSEE, SHALL ADDUCE I.T.A. NO.4535/AHD/2007 8 SUFFICIENT EVIDENCE AND MATERIAL BEFORE THE ASSESSI NG OFFICER TO PROVE THAT ABOVE EXPENDITURE IS REASONABLE AND WAS PAID WHOLLY AND E XCLUSIVELY FOR THE PURPOSE OF BUSINESS. IN THE ABSENCE OF ANY EVIDENCE AND DETAI LS, ASSESSING OFFICER MAY PASS THE ORDER IN ACCORDANCE WITH LAW. IN THE RESU LT, GROUND NO.2 OF THE APPEAL OF THE ASSESSEE IS ALLOWED, FOR STATISTICAL PURPOSE . 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED, AS NOTED ABOVE. ORDER PRONOUNCED ON THIS 15 TH DAY OF OCTOBER, 2010. SD/- SD/- (D.C. AGARWAL) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD, DT 15 TH OCTOBER, 2010 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-IV, BARODA 4. THE CIT-II, BARODA 5. THE DR, D BENCH (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, AHMEDABAD BENCH