ACIT, Uttar Pradesh V. Sh. Banarasi Dass, Saharanpur

ITA 4986/DEL/2012

• Counselvise Citation: 498620114 RSA 2012
• Duration Of Justice: 3 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 30-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 21-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUJIT KUMAR SENIOR
• Assessee Lawyers: AKARSH GARG
• Keywords: Gross profit estimation; Depreciation
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH G GG G : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA, VICE , VICE , VICE , VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI OM PRAKASH KANT OM PRAKASH KANT OM PRAKASH KANT OM PRAKASH KANT, , , , ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 4986/DEL/2012 4986/DEL/2012 4986/DEL/2012 4986/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2009 2009 2009 2009 - -- - 10 1010 10 ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE, SAHARAN CIRCLE, SAHARAN CIRCLE, SAHARAN CIRCLE, SAHARANPUR. PUR. PUR. PUR. VS. VS. VS. VS. SHRI BANARASI DASS, SHRI BANARASI DASS, SHRI BANARASI DASS, SHRI BANARASI DASS, L/H LATE SMT. SAROJ RANI, L/H LATE SMT. SAROJ RANI, L/H LATE SMT. SAROJ RANI, L/H LATE SMT. SAROJ RANI, PROP. M/S SHIV SHAKTI SAREES, PROP. M/S SHIV SHAKTI SAREES, PROP. M/S SHIV SHAKTI SAREES, PROP. M/S SHIV SHAKTI SAREES, KAKKAR GANJ, KAKKAR GANJ, KAKKAR GANJ, KAKKAR GANJ, SAHARANPUR. SAHARANPUR. SAHARANPUR. SAHARANPUR. PAN : AANPR0059D. PAN : AANPR0059D. PAN : AANPR0059D. PAN : AANPR0059D. (APPELLANT) (RESPONDENT) ITA NO ITA NO ITA NO ITA NO .5204/DEL/2012 .5204/DEL/2012 .5204/DEL/2012 .5204/DEL/2012 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2009 2009 2009 2009 - -- - 10 1010 10 LATE SMT. SAROJ RANI, LATE SMT. SAROJ RANI, LATE SMT. SAROJ RANI, LATE SMT. SAROJ RANI, THROUGH LEGA THROUGH LEGA THROUGH LEGA THROUGH LEGAL HEIR BANARSI L HEIR BANARSI L HEIR BANARSI L HEIR BANARSI DAS, DAS, DAS, DAS, SAHARANPUR. SAHARANPUR. SAHARANPUR. SAHARANPUR. PAN : AANPR0059D. PAN : AANPR0059D. PAN : AANPR0059D. PAN : AANPR0059D. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE, SAHARANPUR. CIRCLE, SAHARANPUR. CIRCLE, SAHARANPUR. CIRCLE, SAHARANPUR. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SUJIT KUMAR, SENIOR DR. ASSESSEE BY : SHRI AKARSH GARG, CA. DATE OF HEARING : 30.09.2015 30.09.2015 30.09.2015 30.09.2015 DATE OF PRONOUNCEMENT : 12.10.2015 12.10.2015 12.10.2015 12.10.2015 ORDER ORDER ORDER ORDER PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA, VP , VP , VP , VP : :: : THESE APPEALS BY THE ASSESSEE AND THE REVENUE FOR THE ASSESSMENT YEAR 2009-10 ARE DIRECTED AGAINST THE ORDER O F LEARNED CIT(A), MUZAFFARNAGAR DATED 27 TH JUNE, 2012. THESE ARE BEING DISPOSED OF WITH THIS CONSOLIDATED ORDER. ITA-4986 & 5204/D/2012 2 ITA NO.5204/DEL/2012 ITA NO.5204/DEL/2012 ITA NO.5204/DEL/2012 ITA NO.5204/DEL/2012 ASSESSEES APPEAL IN THE CASE OF LATE SMT. SAROJ ASSESSEES APPEAL IN THE CASE OF LATE SMT. SAROJ ASSESSEES APPEAL IN THE CASE OF LATE SMT. SAROJ ASSESSEES APPEAL IN THE CASE OF LATE SMT. SAROJ RANI : RANI : RANI : RANI :- -- - 2. GROUND NO.1 OF THE ASSESSEES APPEAL IS AS UNDER:- 1. BECAUSE THE LEARNED CIT(APPEALS) HAS GROSSLY ERRED IN LAW AND ON FACTS IN APPLYING GP RATE OF 10% AS AG AINST 9.67% DECLARED BY THE APPELLANT AND THEREBY CONFIRM ING PART ADDITION OF RS.1,03,270/- IN THE INCOME OF THE APPELLANT. 1.1 BECAUSE THE ASSESSING OFFICER DID NOT FIND ANY DISCREPANCY IN THE BOOKS OF ACCOUNTS AND THEREFORE TH E LD.CIT(APPEALS) WAS WHOLLY UNJUSTIFIED IN APPLYING TH E GP RATE OF 10% (AS AGAINST 12% BY ASSESSING OFFICER) INSTEAD OF 9.67% DECLARED BY THE APPELLANT. 1.2 BECAUSE THE APPLICATION OF GP RATE OF 10% BY THE LEARNED CIT(APPEALS) AS AGAINST 12% BY THE ASSESSING OFFICER IS ALSO WHOLLY ARBITRARY BEING NOT BASED ON AN Y MATERIAL AND THEREFORE PARTIAL ADDITION SUSTAINED OF RS.1,03,270/- IS CONTRARY TO FACTS AND LAW. 3. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE GP ADDITION WAS PARTLY SUSTAINED BY THE LEARNED CIT(A) BY APPLYING A GP RATE OF 10% AS AGAINST 9.67% DECLARED BY THE ASSESSEE AND THEREBY CONFIRMING THE PART ADDITION OF `1,03,270/- IN THE INCOME OF THE ASSESSEE. HE SUBMITTED THAT THE ASSESSING OFFICER HAS APPLI ED A GP RATE OF 12% IN THIS CASE WHICH WAS FOUND TO BE VERY EX CESSIVE. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS MADE A SURRENDER OF `4.5 LAKHS SEPARATELY AND THE CRED IT THEREOF HAS BEEN ALLOWED BY THE CIT(A) WHILE DETERMINING THE GP ADDITION IN THIS CASE. HE SUBMITTED THAT DURING THE YEAR, THE ASSESSEE HA S DECLARED HIGHER SALES OF `3.12 CRORES AND THE GP RATE OF 8.23% AS AGAINST THE SALES OF `2.05 CRORES AND GP RATE OF 8.30% IN THE IMME DIATELY PRECEDING YEAR. HE SUBMITTED THAT THERE WAS NO VALID REASON FOR SUSTAINING ANY GP ADDITION IN THIS CASE. ITA-4986 & 5204/D/2012 3 4. LEARNED DR HAS OPPOSED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. HE SUBMITTED THAT IT WAS A SURVEY CASE A ND THE ACCOUNTS WERE NOT FOUND PROPER AND ASSESSING OFFICER HAS GIVEN VARIOUS REASONS FOR MAKING THE GP ADDITION BY APPLYING A GP RATE OF 12% ON THE DECLARED SALES OF THE ASSESSEE. HE REFERRED TO THE RELEVANT PORTION OF THE ASSESSMENT ORDER IN SUPPORT OF THE CASE OF THE REVENUE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PER USED THE ORDER OF THE ASSESSING OFFICER AND LEARNED CIT(A). WE FIND THAT LEARNED CIT(A) HAS PASSED A WELL-REASONED ORDER IN THIS CASE. HE HAS CONSIDERED THE HISTORY OF THE ASSESSEE FOR THE RELEVANT YEAR AND PAST TWO ASSESSMENT YEARS AND HAS APPLIED A GP RATE OF 10% AS A GAINST THE GP RATE OF 12% APPLIED BY THE ASSESSING OFFICER. THE ASSESSEE WAS ABLE TO DECLARE HIGHER SALES AT `3.12 CRORES DURING TH E RELEVANT PERIOD AS AGAINST `2.05 CRORES IN THE IMMEDIATELY PRECEDING Y EAR WITH ALMOST SAME RATE OF GP AS COMPARED TO THE LAST YEAR. LEARNED CIT(A) HAS RIGHTLY ALLOWED CREDIT OF `4.50 LAKHS AMOUNT SURREND ERED BY THE ASSESSEE DURING THE COURSE OF SURVEY AND HAS SUSTAINED THE B ALANCE ADDITION OF `1,03,270/-. THERE BEING NO MISTAKE IN THE ORDER OF LEARNED CIT(A) ON THIS ISSUE, THE SAME IS CONFIRMED AND GROUND N OS.1, 1.1 & 1.2 OF THE ASSESSEE ARE DISMISSED. 6. GROUND NO.2 OF THE ASSESSEES APPEAL IS AS UNDER:- BECAUSE THE LD.CIT(APPEALS) HAS ERRED IN LAW AND ON F ACTS IN CONFIRMING THE ADDITION OF RS.15,000/- ON ACCOUNT OF RENT PAID WITHOUT APPRECIATING THE MATERIAL ON RECORD. 7. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE R ENT OF THE BUSINESS PREMISES WAS ENHANCED FROM `30,000/- TO `60,000/ - DURING ITA-4986 & 5204/D/2012 4 THE YEAR ALTHOUGH THE MARKET RENT WAS STILL MORE. LE ARNED DR HAS RELIED ON THE ORDER OF THE ASSESSING OFFICER. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PER USED THE ORDER OF THE ASSESSING OFFICER AND LEARNED CIT(A). WE FIND THAT THE ASSESSEE HAS PAID THE RENT OF `60,000/- FOR THE BUSINESS PR EMISES FOR THE WHOLE YEAR AS AGAINST THE RENT AMOUNT OF `30,000 /- PAID FOR THE SAME PREMISES IN THE IMMEDIATELY PRECEDING YEAR. IN R EPLY TO A SPECIFIC QUERY FROM THE BENCH, LEARNED COUNSEL FOR TH E ASSESSEE SUBMITTED THAT THE RENT WAS REVISED AFTER MORE THAN FI VE YEARS DURING THE RELEVANT PERIOD. THE REVENUE COULD NOT CONTROV ERT THE SUBMISSIONS OF THE ASSESSEE THAT THE FAIR MARKET RENT OF TH E BUSINESS PREMISES WAS STILL MORE THAN THE AMOUNT PAID BY THE ASSESSE E. IN THESE FACTS OF THE CASE, WE ARE OF THE VIEW THAT THERE WAS NO JUSTIFICATION FOR SUSTAINING THE ADDITION OF `15,000/ - ON ACCOUNT OF RENT PAID AND THE ADDITION MADE IS DELETED AND GROUND NO. 2 OF THE ASSESSEES APPEAL IS ALLOWED. 9. GROUND NO.3 OF THE ASSESSEES APPEAL IS AS UNDER:- BECAUSE THE CUSTOMER WELFARE EXPENSES OF RS.42,536/- WERE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND THEREFORE THE LD.CIT(APPEALS) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING DISALLOWANCE OF RS.6,400/- . 10. WE HAVE HEARD THE PARTIES. WE FIND THAT THE LEA RNED CIT(A) HAS CONFIRMED THE DISALLOWANCE OF `6,400/- OUT OF TOTAL CUSTOMER WELFARE EXPENSES OF `42,536/-. WE FIND THAT THE EXPENSES UNDER THIS HEAD HAS INCREASED TWO-FOLD IN COMPARISON TO THE IMMEDIATELY P RECEDING ASSESSMENT YEAR. THE DISALLOWANCE SUSTAINED BY THE CIT(A ) COULD NOT BE SAID TO BE EXCESSIVE AND ACCORDINGLY IS CONFIRMED AN D GROUND NO.3 OF THE ASSESSEES APPEAL IS DISMISSED. ITA-4986 & 5204/D/2012 5 11. GROUND NO.4 OF THE ASSESSEES APPEAL IS AS UNDER:- BECAUSE THE DISALLOWANCE OF `5% OF CAR EXPENSES AND CA R DEPRECIATION, ON THE GROUND OF PERSONAL US, AMOUNTING TO RS.21,000/- IS HIGHLY EXCESSIVE AND KEEPING IN VIEW OF THE OVERALL FACTS OF THE CASE THE LD.CIT(APPEALS) SHOULD HA VE RESTRICTED THE SAME TO MAXIMUM 10%. 12. WE HAVE HEARD THE PARTIES. WE FIND THAT THE DISA LLOWANCE OF CAR EXPENSES AND CAR DEPRECIATION AT 15% OF THE TOTAL EXP ENSES AND DEPRECIATION CLAIMED BY THE ASSESSEE COULD NOT BE SAID T O BE EXCESSIVE AND THEREFORE, THERE BEING NO MERIT IN THE GROUND O F APPEAL NO.4 OF THE ASSESSEE, THE SAME IS DISMISSED. 13. GROUND NO.5 READS AS UNDER:- BECAUSE THE TRAVELING EXPENSES OF RS.1,62,519/- WERE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BU SINESS AND THEREFORE THE LD.CIT(APPEALS) HAS ERRED IN LAW AN D ON FACTS IN CONFIRMING DISALLOWANCE TO THE EXTENT OF RS.10,000/-. 14. WE HAVE HEARD THE PARTIES. WE FIND THAT THE LEA RNED CIT(A) HAS CONFIRMED THE DISALLOWANCE OF `10,000/- ONLY OUT OF TOTAL TRAVELLING EXPENSES OF `1,62,519/-. THE ASSESSING OFFICER HAS RECORD ED THAT THESE EXPENSES WERE NOT FULLY VOUCHED AND THE ASSESSEE CON CEDED BEFORE THE ASSESSING OFFICER THAT NO VOUCHERS WERE MAINT AINED AND THAT ASSESSEE ALSO FAILED TO FURNISH DETAILS OF PERSONS, P URPOSE AND PLACE OF TRAVEL. IN THESE FACTS, WE HOLD THAT THE DI SALLOWANCE WAS RIGHTLY SUSTAINED AND THEREFORE, THE ORDER OF LEARNE D CIT(A) ON THIS ISSUE IS CONFIRMED. GROUND NO.5 IS ACCORDINGLY DISMISSED . 15. GROUND NO.6 READS AS UNDER:- ITA-4986 & 5204/D/2012 6 BECAUSE THE GENERATOR AND REPAIR EXPENSES TOTALING RS.99,915/- WERE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND THEREFORE THE LD.CIT(APPEALS) HA S ERRED IN LAW AND ON FACTS IN CONFIRMING DISALLOWANCE TO THE EXTENT OF RS.10,000/-. 16. WE HAVE HEARD THE PARTIES. WE FIND THAT THE DISA LLOWANCE OF `10,000/- WAS SUSTAINED BY THE LEARNED CIT(A) OUT OF G ENERATOR AND REPAIR EXPENSES TOTALING TO `99,915/-. WE FIND THAT LEARNED CIT(A) HAS GIVEN REASONS FOR SUSTAINING THE SMALL DISALLOWANCE OF `10,000/- OUT OF THIS HEAD OF EXPENSES. THERE BEING NO JUSTIFICATION FO R INTERFERING IN THE ORDER OF LEARNED CIT(A) ON THIS COUNT, THE SAME I S CONFIRMED AND GROUND NO.6 OF THE ASSESSEES APPEAL IS DISMISSED. 17. GROUND NO.7 OF THE ASSESSEES APPEAL IS AS UNDER:- BECAUSE SALES PROMOTION EXPENSES OF RS.48,300/-, SHOP EXPENSES 65,428/-, PACKING EXPENSES 49143/-, OFFICE EXPENSES RS.47015/-, TOTALING RS.2,09,886/- WERE INCURR ED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND THEREFORE THE LD.CIT(APPEALS) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING DISALLOWANCE TO THE EXTENT OF RS.31,482 /- OUT OF SUCH EXPENSES. 18. WE HAVE HEARD THE PARTIES. WE FIND THAT DISALLOW ANCE OF `31,482/- WAS SUSTAINED BY LEARNED CIT(A) OUT OF SALES P ROMOTION EXPENSES OF `48,300/-, SHOP EXPENSES OF `65,428/-, PACKI NG EXPENSES OF `49,143/- AND OFFICE EXPENSES OF `47,015/- TOTALIN G TO `2,09,886/-. WE FIND THAT LEARNED CIT(A) HAS PASSED A WELL-REASONED ORDER ON THIS ISSUE AND HIS ORDER DOES NOT DESERVE ANY INTERFERENCE. ACCORDINGLY, THE ORDER OF LEARNED CIT(A) ON THIS ISSUE IS CONFIRMED AND GROUND NO.7 OF THE ASSESSEES APPEAL IS DISMISSED. 19. GROUND NO.8 & 8.1 OF THE ASSESSEES APPEAL READ AS UN DER:- ITA-4986 & 5204/D/2012 7 8. BECAUSE THE INTEREST PAID @ 15% TO THE FAMILY MEMBERS WAS VERY REASONABLE AND THEREFORE THE LEARNED CIT(APPEALS) WAS NOT JUSTIFIED IN CONFIRMING THE ALLOW ABLE INTEREST RATE @ 12% AND THEREBY CONFIRMING THE ADDIT ION OF RS.114315/-. 8.1 BECAUSE KEEPING IN VIEW OF THE FACTS OF THE CASE T HE LEARNED CIT(APPEALS) SHOULD HAVE HELD THAT THE INTERE ST RATE OF 15% PAID TO FAMILY MEMBERS IS REASONABLE KEEP ING IN VIEW OF THE MATERIAL PLACED ON RECORDS. 20. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE A SSESSEE HAS PAID INTEREST AT THE RATE OF 15% TO ITS FAMILY MEM BERS WHICH WAS VERY REASONABLE AND THEREFORE, LEARNED CIT(A) WAS NOT RIGHT IN CONFIRMING THE ALLOWABLE INTEREST RATE OF 12% AND IN CONFIRMING THE ADDITION OF `1,14,315/-. LEARNED DR SUBMITTED THAT THERE WAS NO JUSTIFICATION FOR PAYING HIGHER RATE OF INTEREST AT 1 5% TO THE FAMILY MEMBERS OF THE ASSESSEE. 21. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PE RUSED THE ORDER OF THE ASSESSING OFFICER AND LEARNED CIT(A). WE FIND THAT THE RATE OF INTEREST AT 15% PAID TO THE FAMILY MEMBERS OF THE ASSESSEE COULD NOT BE CALLED EXCESSIVE AND SEEMS TO BE REASONABLE. TH E CASE PERTAINS TO THE ASSESSMENT YEAR 2009-10 AND CONSIDERING T HE PREVAILING MARKET RATE OF LENDING, WE ARE OF THE VI EW THAT THE INTEREST PAID AT THE RATE OF 15% WAS JUSTIFIED. THEREFORE, TH E ADDITION OF `1,14,315/- SUSTAINED BY THE CIT(A) IS DELETED AND GRO UND NO.8 & 8.1 OF THE ASSESSEES APPEAL ARE ALLOWED. ITA NO.4986/DEL/2012 ITA NO.4986/DEL/2012 ITA NO.4986/DEL/2012 ITA NO.4986/DEL/2012 REVENUE REVENUE REVENUE REVENUES APPEAL IN THE CASE OF SHRI BANARASI S APPEAL IN THE CASE OF SHRI BANARASI S APPEAL IN THE CASE OF SHRI BANARASI S APPEAL IN THE CASE OF SHRI BANARASI DASS : DASS : DASS : DASS :- -- - 22. GROUND NO.1 OF THE REVENUES APPEAL IS AS UNDER:- ITA-4986 & 5204/D/2012 8 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.6,25,399/- OUT OF RS.7,28,669/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF LOW GROSS PROFIT BY APPLYING TH E GP RATE OF 10 AS AGAINST 12% APPLIED BY THE ASSESSING OFFICER BY IGNORING THE FACT THAT IN THE CASE OF SMT . AMRIT RANI PROP. M/S NIRANJAN DASS & SONS, GP WAS SHOWN @ 16.46% DURING THE RELEVANT ACCOUNTING PERIOD AND IN THE CASE OF BHAGAT RAM GODHA RAM, PUNJABI MARKET, SAHARANPUR, GP WAS SHOWN @ 12.30%. 23. LEARNED DR HAS RELIED ON THE ORDER OF THE ASSESSING OFFICER. LEARNED COUNSEL FOR THE ASSESSEE HAS RELIED ON THE ORDER OF LEARNED CIT(A). 24. WE HAVE HEARD THE PARTIES. WE FIND THAT LEARNED CIT(A) HAS PASSED A WELL-REASONED ORDER ON THIS ISSUE WHILE DIRECTIN G THE APPLICATION OF GP RATE OF 10% AS AGAINST 12% APPLIED BY THE ASSESSING OFFICER. THE FACTS OF THIS CASE ARE SIMILAR TO THE FAC TS OF THE CASE IN THE CASE OF SAROJ RANI FOR THE SAME ASSESSMENT YEAR 2009-10 A ND, IN THE FOREGOING PARAGRAPHS OF THIS ORDER, WE HAVE RECORDED REASONS FOR SUSTAINING THE ACTION OF THE LEARNED CIT(A) IN APPLYI NG THE GP RATE OF 10% IN THE CASE OF SMT. SAROJ RANI AND, ACCORDINGLY, WE HOLD THAT THERE IS NO MERIT IN GROUND NO.1 OF THE REVENUES APPEAL, W HICH IS DISMISSED. 25. GROUND NO.2 READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW IN DELETING THE DISALLOWANCE OF RS.1,51,116/- OUT OF RS.2,59,998/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF VARIOUS EXPENSES BY IGNORING TH E FACT THAT THESE EXPENSES WERE EITHER EXCESSIVE OR FULLY UN- VOUCHED AND UNVERIFIABLE. 26. LEARNED DR HAS RELIED ON THE ORDER OF THE ASSESSING OFFICER AND LEARNED COUNSEL FOR THE ASSESSEE HAS RELIED ON THE ORDER OF THE CIT(A). ITA-4986 & 5204/D/2012 9 27. WE HAVE HEARD THE PARTIES. WE FIND THAT LEARNED CIT(A) HAS PASSED A WELL-REASONED ORDER ON THIS ISSUE AND THE DISALLO WANCE WAS PARTLY DELETED BY THE CIT(A) AS WAS NOT FOUND EXCESSIVE IN THE FACTS OF THE CASE AND WAS MAINLY VERIFIABLE. IN THESE FACTS OF THE CASE, WE HOLD THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF L EARNED CIT(A). ACCORDINGLY, THE ORDER OF LEARNED CIT(A) ON THIS ISSU E IS CONFIRMED AND GROUND NO.2 OF THE REVENUES APPEAL IS DISMISSED. 28. GROUND NO.3 OF THE REVENUES APPEAL IS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.10,72,891/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED TRADE CREDITORS BY IGNORING THE FACT THAT THE LETTERS ISSUED BY THE ASSESSING OFFICER WERE RECEIVED BACK UN-SERVED, WHICH MAKES IT CLEAR THAT THE TRADE CREDIT ORS WERE NOT GENUINE. WHEREAS THE REPLIES/CONFIRMATION L ETTERS HAD BEEN RECEIVED AFTER 30-12-2011 I.E. DATE OF ASSESSMENT ORDER, THE ASSESSEE MANAGED THE CONFIRMATION LETTER AND DISPATCHED THE SAME TO THE ASSESSING OFFICER. 29. LEARNED DR SUBMITTED THAT DUE ENQUIRY IN THIS CASE WAS NOT MADE AND, THEREFORE, THE ISSUE OF ADDITION MADE ON AC COUNT OF UNEXPLAINED TRADE CREDITORS SHOULD BE RESTORED FOR RE- EXAMINATION AT THE LEVEL OF THE ASSESSING OFFICER. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CORRECT AMOUNT OF TRADE CREDITORS WAS `6,24,082/- AND NOT `10,72,891/- AS MENTIONED BY THE REVENUE IN ITS GROUND OF APPEAL. HE SUBMITTED THAT ALL THE AMOUNTS WERE REC EIVED BY CHEQUE AND LEARNED CIT(A) HAS CALLED FOR THE REMAND REPORT WHICH WAS DULY SUBMITTED BY THE ASSESSING OFFICER. A COPY OF THE REMAN D REPORT HAS BEEN FILED IN THE COMPILATION BEFORE THE TRIBUNAL. ITA-4986 & 5204/D/2012 10 30. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PE RUSED THE ORDER OF THE ASSESSING OFFICER AND LEARNED CIT(A). W E FIND THAT THE CORRECT AMOUNT OF TRADE CREDITORS WAS `6,24,082/- AN D NOT `10,72,891/- AS MENTIONED BY THE ASSESSING OFFICER. WE FIND THAT REC TIFICATION APPLICATION WAS MOVED BY THE ASSESSEE AND THE ASSESSING OFFI CER ON 06.02.2012 HAS PASSED AN ORDER U/S 154 AND HAS REDUCED THE ADDITION TO `6,24,082/-. THIS AMOUNT PERTAINS TO THREE PARTIE S. WE FIND THAT THE ASSESSEE HAS FILED COPY OF ACCOUNTS OF THE THREE TRADE PA RTIES FROM WHOM PURCHASES WERE MADE DURING THE YEAR AT THE TIME OF ASSESSMENT PROCEEDINGS. THE PAYMENTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUES. THE ASSESSEE HAS EXPLAINED THAT BILLS AND GOODS RECEIVED NOTES WERE AVAILABLE ON RECORD TO PROVE THE GENUINEN ESS OF THE CREDITORS. THE CREDITOR PARTIES HAVE SENT THEIR CONFI RMATION LETTERS TO THE ASSESSING OFFICER AND THE LEARNED CIT(A) HAS RECORDE D THAT THE ASSESSING OFFICER IN THE REMAND REPORT DATED 18.09.201 2 HAS ALSO CONFIRMED THIS FACT AND NO DEFECTS IN THE CONFIRMATIO N OF ACCOUNTS OF THE AFORESAID CREDITORS HAVE BEEN POINTED OUT BY THE ASSESSING OFFICER. LEARNED CIT(A) HAS CONCLUDED THAT ONCE THE AFORESAID CREDITORS HAVE CONFIRMED THE CLOSING BALANCE WHICH WAS NOT DISPUTED BY THE ASSESSING OFFICER, THERE IS NO BASIS LEFT FOR MAKING THE ADDITIO N. IN THESE FACTS OF THE CASE, SINCE THE BALANCES WERE ON ACCOUNT OF PURCHA SES MADE IN THE NORMAL COURSE OF BUSINESS BY THE ASSESSEE AND PAYMENTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUES AND THE ASSESSEE WAS ABLE T O PRODUCE THE BILLS AND GOODS RECEIVED NOTES BEFORE THE ASSESSING OF FICER AND THE CREDITORS HAVE SENT THEIR CONFIRMATION LETTERS TO THE ASSESSING OFFICER AND THAT NO DEFECTS IN THE CONFIRMATION OF COPIES OF ACCOUNTS RECEIVED FROM THE AFORESAID CREDITORS HAVE BEEN POINTED OUT BY THE ASSESSING OFFICER AND THAT THE CREDITORS HAVE CONFIRMED THE CL OSING BALANCE WHICH COULD NOT BE DISPUTED BY THE ASSESSING OFFICER, WE HOLD THAT THE CIT(A) WAS JUSTIFIED IN HOLDING THAT THERE WAS NO BASIS LEFT F OR MAKING THE ITA-4986 & 5204/D/2012 11 ADDITION. ACCORDINGLY, THE ORDER OF LEARNED CIT(A) ON THIS ISSUE IS CONFIRMED AND GROUND NO.3 OF THE REVENUE IS DISMISSED. 31. GROUND NO.4 OF THE REVENUES APPEAL READS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.70,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF LOW HOUSE HOLD EXPENSES BY IGNORING THE FACT THAT THE PERSONAL WITHDRAWALS SHOWN BY THE ASSESSEE WERE CONSIDERED TO BE LOW. 32. WE HAVE HEARD THE PARTIES. WE FIND THAT THE LEA RNED CIT(A) HAS PASSED A WELL-REASONED ORDER ON THIS ISSUE. THE CIT(A) H AS RECORDED THAT THE TOTAL FAMILY EXPENSES DEBITED BY THE ASSESSEE W ERE `2,70,000/- WHICH WAS HELD AS ADEQUATE TO MEET THE R EQUIREMENTS OF THE ASSESSEES FAMILY CONSISTING OF SELF, WIFE AND SON AND, THEREFORE, WE HOLD THAT LEARNED CIT(A) WAS JUSTIFIED IN DELETING TH E ADDITION OF `70,000/- MADE ON ACCOUNT OF LOW HOUSEHOLD EXPENSES AN D GROUND NO.4 OF THE REVENUE IS ACCORDINGLY DISMISSED. 33. IN THE RESULT, THE APPEAL OF THE ASSESSEE SMT. SARO J RANI IN ITA NO.5204/DEL/2012 IS PARTLY ALLOWED AND THE APPEAL OF THE REVENUE IN ITA NO.4986/DEL/2012 IN THE CASE OF SHRI BANARASI DASS IS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 12 TH OCTOBER, 2015. SD/- SD/- ( (( ( OM PRAKASH KANT OM PRAKASH KANT OM PRAKASH KANT OM PRAKASH KANT ) )) ) (G. (G. (G. (G. C. GUPTA C. GUPTA C. GUPTA C. GUPTA ) )) ) ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. ITA-4986 & 5204/D/2012 12 COPY FORWARDED TO: - 1. APPELLANT : ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE, SA CIRCLE, SA CIRCLE, SA CIRCLE, SAHARANPUR. HARANPUR. HARANPUR. HARANPUR. 2. RESPONDENT : SHRI BANARASI DASS, L/H LATE SMT. SAR OJ RANI, SHRI BANARASI DASS, L/H LATE SMT. SAROJ RANI, SHRI BANARASI DASS, L/H LATE SMT. SAROJ RANI, SHRI BANARASI DASS, L/H LATE SMT. SAROJ RANI, PROP. M/S SHIV SHAKTI SAREES, KAKKAR GANJ, PROP. M/S SHIV SHAKTI SAREES, KAKKAR GANJ, PROP. M/S SHIV SHAKTI SAREES, KAKKAR GANJ, PROP. M/S SHIV SHAKTI SAREES, KAKKAR GANJ, SAHARANPUR. SAHARANPUR. SAHARANPUR. SAHARANPUR. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR