DCIT, New Delhi V. M/s. Goyal MG Goyal Gases (P) Ltd., New Delhi

ITA 4913/DEL/2010

• Counselvise Citation: 491320114 RSA 2010
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 05-01-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 10-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SALIL MISHRADR
• Keywords: Earning of tax free income; Proportionate interest; Retrospective amendment
• Section: 14A; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI C BENC H BEFORE SHRI R.P. TOLANI, JM & SHRI A.N. PAHUJA, AM ITA NO.4913/DEL/2010 ASSESSMENT YEAR:2006-07 D.C.I.T.CENTRAL CIRCLE-15, ROOM NO. 354,3 RD FLOOR, JHANDEWALAN EXTENSION, NEW DELHI-110055 V/S . M/S GOYAL MG GASES PVT. LTD., A-38, IST FLOOR, MOHAN CO-OPERATIVE INDL. ESTATE, MAIN MATHURA ROAD, NEW DELHI-110044 [ PAN AABCG 6972 B]) (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI R.S. SINGHVI, AR REVENUE BY SHRI SALIL MISHRA,DR DATE OF HEARING 05-01-2012 DATE OF PRONOUNCEMENT 13-01-2012 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 10.11.2010 BY THE REVENUE AGA INST AN ORDER DATED 23.09.2010 OF THE LEARNED CIT(A)-II, NEW DEL HI FOR THE AY2007-08 , RAISES THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) HAS ERRED IN GIVING A RELIEF OF ` `5,76,320/- ON ACCOUNT OF DISALLOWANCE U/S 14A. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF ` `23,60,745/- MADE ON ACCOUNT OF UNVERIFIABLE EXPENSES IN RESPECT OF R EPAIRS & MAINTENANCE OF PLANT, MACHINERY & BUILDING. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF ` ` 10,18,336/- MADE ON ACCOUNT OF UNVERIFIABLE EXPENSES IN RESPECT OF T RAVELING AND MISCELLANEOUS EXPENSES. 4. (A) THE ORDER OF THE CIT(A) IS ERRONEOUS AND NO T TENABLE IN LAW AND ON FACTS. ITA NO.4913/DEL./2010 2 B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF TH E HEARING OF THE APPEAL. 2. ADVERTING FIRST TO GROUND NO.1 IN THE APPEAL, FA CTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING INCOME OF ` ` 7,30,01,046/- FILED ON 30.11.2006 BY THE ASSESSEE, ENGAGED IN BUSINESS OF MANUFACTURING AND TRADING IN INDUSTRIAL GASES BESIDES PRODUCTION OF ELECTRICITY FROM WIND M ILL, WAS SELECTED FOR SCRUTINY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE INCO ME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ISSUED ON 14.09.2007. DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (A.O. IN SHORT) NOTICED THAT THE ASSESSEE MADE INVESTMENT OF ` `7,21,10,744/- IN MUTUAL FUNDS, YIELDING DIVIDEND I NCOME EXEMPT U/S 10 OF THE ACT. SINCE THE ASSESSEE PAID INTEREST AND OTHER CHARGES TO BANKS FOR RAISING FUNDS, TO A QUERY BY THE AO, SEEK ING TO DISALLOW PROPORTIONATE EXPENDITURE ON ACCOUNT OF FINANCIAL CHARGES FOR UT ILIZATION OF BORROWED FUNDS IN THE AFORESAID MUTUAL FUNDS, THE ASSESSEE SUBMITTED COST OF FUNDS USED IN MAKING INVESTMENT FOR EARNING EXEMPT INCOME, AS UNDER:- [IN ` ] TOTAL ASSETS OF THE COMPANY 4,31,31,03,744 CLOSING BALANCE OF INVESTMENT IN MUTUAL FUND 7,21,10,744 PERCENTAGE OF TOTAL ASSETS VS. MUTUAL FUND INVESTMENT 1.67% FINANCE & OTHER CHARGES PAID 6,40,76,660 PROPORTIONATE INTEREST EXPENSES 10,70,080 2.1 IN THE LIGHT OF AFORESAID WORKING SUBMITTED BY THE ASSESSEE, THE AO DISALLOWED AN AMOUNT OF ` ` 10,70,080/- U/S 14A OF THE ACT. 3. ON APPEAL, THE LD. CIT(A) REDUCED THE AFORESAID DISALLOWANCE IN THE FOLLOWING TERMS:- 5. I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES O F THE CASE. IT IS OBSERVED THAT THE ASSESSING OFFICER HAS MADE THE DISALLOWANCE OF ` ` 10,70,680/- U/S 14A HOLDING IT IS EXPENDITURE ON FI NANCIAL ITA NO.4913/DEL./2010 3 CHARGES DIRECTLY RELATED TO THE EARNING OF EXEMPT I NCOME FROM DIVIDENDS. FOR THIS WORKING THE ASSESSING OFFICER HAS RELIED ON THE STATISTICS PROVIDED BY THE ASSESSEES ACCOUNTANT SH RI PAWAN SACHDEVA REGARDING TOTAL ASSETS OF THE COMPANY, TOT AL CLOSING BALANCE OF INVESTMENTS IN MUTUAL FUNDS AND THE RATI O BETWEEN THE TWO AT 1.67% AND HAS APPLIED IT TO FINANCE AND OTHE R CHARGES PAID OF ` `6,40,76,660/- TO ARRIVE AT THE DISALLOWANCE OF ` ` 10,70,680/-. FOR THIS THE ASSESSING OFFICER HAS RELIED ON THE HO NBLE SUPREME COURT RULING IN THE CASE OF CIT VS. UNITED GENERAL TRUST LTD. 200 ITR 488. HOWEVER, IT IS OBSERVED THAT THE HONBLE APEX COURT IN THIS JUDGMENT DATED 19.2.1993 HAS ALLOWED THE APPEA L RAISED BY THE REVENUE REGARDING A QUESTION DECLINED BY THE HONBL E BOMBAY HIGH COURT, REGARDING HONBLE SUPREME COURT JUDGMENT IN DISTRIBUTORS (BARODA) P. LTD. VS. UNION OF INDIA (1985) 155 ITR 120 WHICH WAS REGARDING CONSTITUTIONAL VALIDITY OF SECTION 80AA B ROUGHT WITH RETROSPECTIVE EFFECT. APPARENTLY THE CITATION DOES NOT MATCH THE FACTS OF THE PRESENT CASE UNLESS THE ASSESSING OFFI CER HAS ATTEMPTED TO DRAW SUPPORT FROM THE HONBLE APEX COU RTS APPROVAL OF PRINCIPLE OF RETROSPECTIVE EFFECT OF THE PROVISI ONS FOR APPLICATION OF SECTION 14A. THIS IN ANY EVENT IS NOT THE SUBJECT MATTER OF APPEAL OR DISPUTE HERE PRESENTLY. THERE APPEARS TO BE FOL LOWING INFIRMITIES IN THE STAND TAKEN BY THE ASSESSING OFFICER. A) APPELLANT CLAIMS TO HAVE TOTAL CAPITAL RESERVES AND SURPLUS OF ` `242.84 CRORES AND THAT THE ENTIRE INVESTMENT OF ` `7.66 CRORES IS SOURCED FROM APPELLANTS OWN FUNDS. THE ASSESSI NG OFFICER HAS NOT EXAMINED THIS CLAIM, NOR HELD ANY CONTRARY VIEW. IN FACT HE HAS HELD NO VIEWS AT ALL ABOUT THIS ISSUE. B) NO NEXUS BETWEEN THE APPELLANTS INTEREST AND IT S BORROWED FUNDS HAVE BEEN ATTEMPTED TO BE ESTABLISHED. HONB LE DELHI HIGH COURT IN CIT VS. TIN BOX CO. LTD. 260 ITR 637) AND HONBLE PUNJAB & HARYANA HIGH COURT IN CIT VS. HERO CYCLES LTD. 31 DTR 301 ARE IN FAVOUR OF THE APPELLANT UNLE SS CONTRARY FINDINGS WERE GIVEN BY THE ASSESSING OFFICER. C) ALTHOUGH IN THIS YEAR UNDER APPEAL THERE WAS INC REASE IN CLAIM OF FINANCE AND OTHER CHARGES TO BE EXTENT OF ` `6.40 CRORES, BECAUSE OF FRESH BORROWINGS, THERE WAS NO CASE OF A NY FRESH INVESTMENTS, DURING THE YEAR, INSTEAD THE INVESTMEN T HAS COME DOWN FROM ` ` 12 CRORES IN PAST YEAR TO ` `7.66 CRORES IS THE PRESENT YEAR. THIS FIGURE HAS BEEN ADMITTED BY THE ASSESSING OFFICER WHILE CALCULATING THE DISALLOWANCE U/S 14A. AGAIN NO CONTRARY FINDINGS HERE BEEN GIVEN BY THE ASSESSING OFFICER ON THIS ISSUE. 5.1 CONSIDERING THE ABOVE FACTS AND INFIRMITIES IN THE ASSESSING OFFICERS STAND AND ON THE BASIS OF THE JUDICIAL RU LINGS IN FAVOUR OF ITA NO.4913/DEL./2010 4 THE APPELLANT, THE DISALLOWANCE OF ` ` 10,70,080/- CANNOT BE UPHELD TOTALLY. HOWEVER, APPELLANT HAS TAKEN AN ALTERNATI VE PLEA THAT THE DISALLOWANCE, IF ANY, SHOULD ONLY BE WITH REFERENCE TO FINANCE CHARGES TO THE EXTENT OF ` `2,95,66,516/- (BEING THE TOTAL PAYMENT OF INTEREST AND FINANCE CHARGES IN THE PRECEDING YEAR) AND AS PER THE RATIO DETERMINED BY THE ASSESSING OFFICER OF 1.67% - THE DISALLOWANCE CAN BE WORKED OUT TO ` `4,93,760/- ONLY. UNDER THE FACT AND CIRCUMSTANCES OF THE MATTER, THIS PLEA APP EARS TO BE FAIRLY ALLOWABLE. THEREFORE, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS RESTRICTED TO ` `4,93,760/- AND RELIEF TO APPELLANT IS ` `5,76,320/- (10,70,080 4,93,760). 4. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A) . THE LD. DR WHILE INVIT ING OUR ATTENTION TO THE FINDINGS OF THE AO CONTENDED THAT THE ASSESSEE HIMSELF FURN ISHED WORKING OF DISALLOWANCE IN TERMS OF PROVISIONS OF SECTION 14A OF THE ACT IN REPLY TO A QUERY BY THE AO. THEREFORE, THE LD. CIT(A) WAS NOT JUSTIF IED IN REDUCING THE DISALLOWANCE. TO A QUERY BY THE BENCH, THE LD. DR SUBMITTED THAT NO NEW INVESTMENT APPEARS TO HAVE BEEN MADE IN THE MUTUAL FUNDS IN THE YEAR UNDER CONSIDERATION. ON THE OTHER HAND, THE LD. AR ON BEH ALF OF THE ASSESSEE CONTENDED THAT IT WAS ONLY AT THE BEHEST OF THE AO THAT THE ASSESSEE SUBMITTED A WORKING OF THE DISALLOWANCE AND THE ASSESSEE NEVER AGREED FOR DISALLOWANCE U/S 14A OF THE ACT IN TERMS OF THE SAID WORKING. THE A SSESSEE DID NOT UTILIZE ANY BORROWED FUNDS FOR INVESTMENT IN MUTUAL FUNDS, BECA USE OF RESERVES AND SURPLUS TO THE EXTENT OF ` `2,42,84,70,549/-. IN THE ABSENCE OF ANY NEXUS BET WEEN INVESTMENT IN MUTUAL FUNDS AND BORROWED FUNDS, THER E WAS NO CASE FOR DISALLOWANCE, THE LD. AR ARGUED. THE LD. AR ADDED THAT IN THE PRECEDING ASSESSMENT YEAR TOTAL PAYMENT OF INTEREST AND FINAN CIAL CHARGES WAS TO THE TUNE OF ` `2,95,66,516/- WHICH INCREASED IN THE YEAR UNDER CO NSIDERATION TO ` ` 6,40,76,660/-. EVEN THOUGH THERE WAS INCREASE IN F INANCE AND OTHER CHARGES BECAUSE OF FRESH BORROWINGS, NO FRESH INVESTMENT WA S MADE IN MUTUAL FUNDS IN THE YEAR UNDER CONSIDERATION; RATHER TOTAL INVESTME NT REDUCED TO ` 7,66,56,044/- AS AGAINST ` ` 12,00,45,300/- IN THE PRECEDING YEAR, THE LD. AR AD DED. ITA NO.4913/DEL./2010 5 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. INDISPUTABLY, FINANCE AND OTHER CHARGES INCR EASED IN THE YEAR UNDER CONSIDERATION TO ` ` 6,40,76,660/-. DUE TO FRESH BORROWINGS AS AGAINST ` `2,95,66,516/- IN THE PRECEDING YEAR. HOWEVER, THE RE IS NOTHING TO SUGGEST THAT ANY FRESH INVESTMENT WAS MADE IN MUTUAL FUNDS OR SH ARES, YIELDING EXEMPT INCOME; RATHER INVESTMENT IN MUTUAL FUNDS CAME DOWN TO ` 7,66,56,044/- AS AGAINST ` ` 12,00,45,300/- IN THE PRECEDING YEAR. THE LD. AR INFORMED THAT IN THE PRECEDING YEAR, DISALLOWANCE WAS MADE IN RELATION T O INTEREST AND FINANCE CHARGES OF ` `2,95,66,516/-. SINCE NO FRESH INVESTMENT HAS BEE N MADE IN THE YEAR UNDER CONSIDERATION, THE LD. CIT(A), FOLLOWING THE BASIS ADOPTED IN THE PRECEDING YEAR, RESTRICTED THE DISALLOWANCE TO ` ` 4,93,760/-. THE REVENUE HAVE NOT PLACED BEFORE US ANY EVIDENCE, CONTROVERTING TH ESE FINDINGS OF FACTS RECORDED BY THE LD. CIT(A) NOR BROUGHT TO OUR NOTICE ANY MAT ERIAL SUGGESTING THAT BORROWED FUNDS WERE INDEED UTILIZED IN MAKING INVESTMENT IN THE YEAR UNDER CONSIDERATION, YIELDING TAX FREE INCOME. IN THIS SITUATION, WE DO NOT FIND ANY INFIRMITY IN THE APPROACH OF THE LEARNED CIT(A) AND, THEREFORE, GR OUND NO.1 IN THE APPEAL IS DISMISSED.. 6. GROUND NO.2 IN THE APPEAL RELATES TO DISALLOWAN CE OUT OF REPAIR, AND MAINTENANCE EXPENSES ON PLANT, MACHINERY AND BUILDI NG WHILE GROUND NO.3 IN THE APPEAL PERTAINS TO DISALLOWANCE OF 5% OF MISCELLANE OUS AND TRAVEL EXPENSES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO ASKED THE ASSESSEE TO PRODUCE VOUCHERS RELATING TO REPAIR AND MAINTENANCE OF BUILDING AND PLANT AND MACHINERY .DESPITE REPEATED OPPORTUNITIES, THE ASSE SSEE DID NOT PRODUCE A MAJORITY OF THE VOUCHERS ON THE GROUND THAT THESE W ERE TO BE CALLED FROM VARIOUS UNITS LOCATED IN DIFFERENT PLACES. ACCORDINGLY, TH E AO CONCLUDED THAT THESE EXPENSES WERE NOT VERIFIABLE AND LOOKING TO THE PAS T HISTORY OF THE CASE, DISALLOWED 50% OF THE EXPENDITURE ON REPAIRS TO BUI LDING AND 10% OF THE EXPENDITURE ON REPAIRS TO PLANT AND MACHINERY, RESU LTING IN DISALLOWANCE OF ` ` 23,60,746/-. ITA NO.4913/DEL./2010 6 6.1 LIKEWISE THE ASSESSEE DID NOT PRODUCE COMPLE TE VOUCHERS FOR MISCELLANEOUS EXPENSES OF ` 58,63,980/- AND TRAVELLING EXPENSES OF ` 1,45,02,754/-. ACCORDINGLY, THE AO CONCLUDED THAT ADMISSIBILITY OF THESE EXPENSES WAS NOT ASCERTAINABLE AND LOOKING TO THE P AST HISTORY OF THE CASE, DISALLOWED 5% OF THE EXPENSES, RESULTING IN DISALLO WANCE OF ` 10,18,336/-. 7. ON APPEAL, THE LEARNED CIT(A) DELETED THE DISAL LOWANCE OF REPAIR EXPENSES IN THE FOLLOWING TERMS:- 7. ON THIS GROUND THE APPELLANT HAS SUBMITTED THA T- AD HOC DISALLOWANCE OF ` `23,60,746/- OUT OF CLAIM OF REPAIR EXPENSES IN RESPECT OF BUILDING AND PLANT AND MACHI NERY. THERE IS NO DISPUTE THAT DETAILS OF THESE EXPENSES WERE FILED BEFORE ASSESSING OFFICER AND MAJOR VOUCHERS WERE PR ODUCED FOR VERIFICATION. HOWEVER, THE ASSESSING OFFICER O N THE BASIS OF OBSERVATION THAT IN THE PRECEDING YEAR, 10% OF T HE EXPENSES WERE DISALLOWED, MADE SIMILAR DISALLOWANCE DURING THE YEAR UNDER REFERENCE. HOWEVER, THE DISALLOWANC E IN THE PRECEDING YEAR HAS BEEN DELETED BY CIT(A) AND ORDER OF THE CIT(A) HAS BEEN ACCEPTED BY THE ASSESSING OFFICER H IMSELF AS NO SECOND APPEAL WAS FILED BEFORE ITAT AGAINST O RDER OF THE CIT(A) ON THIS ISSUE. 7.1 FURTHER, THE AR HAS RELIED ON VARIOUS RULINGS INCLUDING SIMBHAOLI SUGAR MILL LTD. VS. ACIT (2007) 17 SOT 90 (DELHI), SEASONS CATERING SERVICES PVT. LTD. VS. DCIT 43 DTR 397 (DEL.) AND MIDLAND INTERNATIONAL LTD. VS. DCIT, 109 ITD 198 (DELHI) TO PLEAD THAT THESE RULINGS ARE ALSO AGAINS T DISALLOWANCE WITHOUT POINTING OUT SPECIFIC ITEMS, O R MAKING AD HOC DISALLOWANCES. 8. I HAVE CONSIDERED THE ASSESSMENT ORDER, THE APPELLANTS SUBMISSIONS INCLUDING THE ABOVE RULINGS , THE ORDER DATED 15.3.07 OF CIT(A)-XV, DELHI IN THE APPE LLANTS CASE ON A SIMILAR DISALLOWANCE IN A.Y. 2004-05 AND THE HONBLE ITAT, DELHIS ORDER DATED 17.3.2008 IN THE SAME CASE. WHILE THE CIT(A) HAS ALLOWED THE APPEAL ON F ACTS THE HONBLE ITAT ORDER IS ON THE SINGLE ISSUE OF BAD DE BTS WHICH WOULD INDICATE THAT THIS ISSUE WAS NOT AGITATED BY THE DEPARTMENT WHILE FILING THE APPEAL IN THIS CASE, TH E VIEW HELD BY THE CIT(A)-XV, DELHI ARE THAT I AGREE WITH THE APPELLANT ITA NO.4913/DEL./2010 7 THAT WITHOUT SPECIFYING THE PRECISE EXPENSE WITHIN REPAIRS TO BE OF SUCH NATURE TO BE CLASSIFIED AS CAPITAL EXPEN DITURE, THERE IS NO BASIS FOR DISALLOWING 10% OF THE EXPENS ES. NOW IN THE PRESENT CASE THE ASSESSING OFFICER HAS B ASED HIS DISALLOWANCE ON THE HISTORY OF THE CASE FROM YEAR T O YEAR HOLDING THAT THERE IS NO DIFFERENCE IN FACTS THIS Y EAR AND THEREFORE DISALLOWANCE IS JUSTIFIED. THIS BASIS TO MY MIND IS NOT SUBSTANTIVE AND WORTHY OF BEING UPHELD AS IT HA S NOT FOUND FAVOUR EVEN IN THE PAST AND IS CONTRARY TO TH E RATIO OF RULINGS PLEADED IN THIS RESPECT. I DO NOT SEE ANY REASON TO DISAGREE WITH THE CIT(A)-XV, DELHI ON THIS ISSUE. THE GROUND IS, THEREFORE, ALLOWED. 7.1 FOR SIMILAR REASONS, THE LD. CIT(A) DELETED T HE DISALLOWANCE OUT OF MISCELLANEOUS EXPENSES AND TRAVELLING EXPENSES, WIT HOUT EVEN SPECIFYING AS TO WHETHER OR NOT THE ASSESSEE PRODUCED ALL THE BILLS OR VOUCHERS, WHICH WERE NOT PRODUCED BEFORE THE AO . 8. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A).THE LD. DR SUBMITTED THA T THE ASSESSEE DID NOT PRODUCE ALL THE BILLS AND VOUCHERS IN RESPECT OF EXPENDITUR E INCURRED ON REPAIR TO BUILDINGS AND PLANT AND MACHINERY OR EVEN IN RESPECT OF MISCE LLANEOUS AND TRAVELLING EXPENSES, BEFORE THE AO. THERE IS NOTHING TO SUGGE ST THAT ALL THE BILLS AND VOUCHERS FOR THESE EXPENSES WERE PLACED BEFORE THE LD. CIT(A) . IN THESE CIRCUMSTANCES, WHEN GENUINENESS OF THE EXPENDITURE COULD NOT BE VERIFIED FOR WANT OF RELEVANT BILLS AND VOUCHERS, THE LD, CIT( A) WAS NOT JUSTIFIED IN DELETING THE ENTIRE DISALLOWANCE. ON THE OTHER HAND, THE LD . AR ON BEHALF OF THE ASSESSEE CONTENDED THAT DISALLOWANCE WAS MADE ON TH E BASIS OF PAST HISTORY OF THE CASE. SINCE IN THE PRECEDING YEAR, SIMILAR DIS ALLOWANCE HAD BEEN DELETED AND THE REVENUE DID NOT PREFER APPEAL, THE LD. CIT( A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE. IN HIS REJOINDER, THE LD. DR POINTED OUT THAT NEITHER THE AO NOR THE LEARNED CIT(A) VERIFIED THE GENUINENESS OF THE EXPE NDITURE FOR WANT OF RELEVANT BILLS AND VOUCHERS AND, THEREFORE, MATTER REQUIRES RECONSIDERATION BY THE AO IN THE LIGHT OF RELEVANT BILLS AND VOUCHERS. ITA NO.4913/DEL./2010 8 9. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE FACTS OF THE CASE. INDISPUTABLY, THE ASSESSEE DID NOT PRODUCE A LL THE BILLS AND VOUCHERS IN RELATION TO EXPENDITURE ON REPAIRS TO BUILDING AND PLANT AND MACHINERY OR EVEN IN RESPECT OF MISCELLANEOUS AND TRAVEL EXPENSES ON THE GROUND THAT THESE WERE TO BE CALLED FROM VARIOUS UNITS LOCATED IN DIFFERENT P LACES. IN THESE CIRCUMSTANCES, THE AO MADE AD HOC DISALLOWANCE OUT OF THESE EXPENS ES, LOOKING TO THE PAST HISTORY OF THE CASE. THERE IS NOTHING TO SUGGEST T HAT THE ASSESSEE PRODUCED ALL THE BILLS & VOUCHERS BEFORE THE LD. CIT(A) NOR SEE MS TO HAVE VERIFIED THE GENUINENESS OF EXPENDITURE OR EVEN RECORDED ANY SU CH FINDINGS . IN THESE CIRCUMSTANCES, ESPECIALLY WHEN COMPLETE BILLS AND V OUCHERS IN RELATION TO THE AFORESAID EXPENSES WERE NOT PRODUCED BEFORE THE AO OR THE LD. CIT(A), WE ARE OF THE OPINION THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE DISALLOWANCE, WITHOUT VERIFYING THE RELEVANT BILLS AND VOUCHERS A ND MERELY ON THE BASIS OF FINDINGS IN THE PRECEDING YEAR . IN VIEW THEREOF, AND IN THE INTEREST OF JUSTICE , WE CONSIDER IT FAIR AND APPROPRIATE TO VACATE THE FIND INGS OF THE LD. CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE AO WITH THE DIRECTI ONS TO ALLOW ANOTHER OPPORTUNITY TO THE ASSESSEE TO PRODUCE ALL THE BILLS AND VOUCHE RS IN RELATION TO THE AFORESAID EXPENSES ON ACCOUNT OF REPAIRS TO BUILDING AND PLAN T & MACHINERY AS ALSO OF MISCELLANEOUS AND TRAVEL EXPENSES AND THEREAFTER, PASS APPROPRIATE ORDERS IN ACCORDANCE WITH LAW . THE ASSESSEE IS ALSO DIRECTE D TO PLACE ALL THE BILLS AND VOUCHERS AS ALSO THE RELEVANT EVIDENCE IN RELATION TO THE AFORESAID EXPENSES BEFORE THE AO IN ORDER TO ENABLE HIM TO DISPOSE OF THE MATTER EXPEDITIOUSLY. WITH THESE OBSERVATIONS, GROUND NOS.2 & 3 IN THE APPEAL ARE DISPOSED OF. 10.. GROUND NO.4(A)[WRONGLY NUMBERED 3] BEING GEN ERAL IN NATURE NOR ANY SUBMISSIONS HAVING BEEN MADE BEFORE US ON THIS GROUND, DOES NOT REQUIRE ANY SEPARATE ADJUDICATION WHILE NO ADDITIONAL GROUN D HAVING BEEN RAISED BEFORE US IN TERMS OF RESIDUARY GROUND NO.4(B) IN THE APP EAL, ACCORDINGLY THESE GROUNDS ARE DISMISSED. 11. NO OTHER SUBMISSION OR ARGUMENT WAS MADE BEF ORE US. ITA NO.4913/DEL./2010 9 12. IN RESULT, APPEAL IS PARTLY ALLOWED FOR STATIS TICAL PURPOSES. SD/- SD/- (R.P. TOLANI) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NS COPY OF THE ORDER FORWARDED TO :- 1. D.C.I.T., CENTRAL CIRCLE-15, NEW DELHI. 2. M/S GOYAL MG GOYAL GASES PVT. LTD., A-38, 1 ST FLOOR, MOHAN CO-OPERATIVE INDUSTRIAL ESTATE, MAIN MATHURA ROAD, NEW DELHI-44. 3. CIT(A)-II, NEW DELHI. 4. CIT CONCERNED. 5. DR, ITAT,C BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI ORDER PRONOUNCED IN OPEN COURT