Income Tax Officer-3(2), Kanpur V. Shri Kamal Raheja, Kanpur

ITA 557/LKW/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4639 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 02-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 68; 144; 11

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.557/LKW/2014 ASSESSMENT YEAR:2009-10 SHRI KAMAL RAHEJA, FLAT NO. 502, LEELA PALACE, 7/87, TILAK NAGAR, KANPUR. PAN:ABJPR2102G VS INCOME TAX OFFICER-3(2), KANPUR (RESPONDENT) (APPELLANT) SHRI AMIT NIGAM, D. R. APPELLANT BY SHRI RAKESH GARG, ADVOCATE RESPONDENT BY 03/03/2016 DATE OF HEARING 17 /03/2016 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE OR DER PASSED BY LEARNED CIT(A)-II, KANPUR DATED 27/03/2014 FOR THE ASSESSMENT YEAR 2009- 10. 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLO WING GROUNDS: 1. LD. COMMISSIONER OF INCOME TAX (A)-II, KANPUR H AS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.76,58,226/- MADE BY THE ASSESSING OFFICER WITHOU T APPRECIATING THE FACTS BROUGHT OF RECORD BY THE ASS ESSING OFFICER WHO RIGHTLY ADDED THE UNSECURED LOANS RAISE D BY THE ASSESSEE U/S 68 OF THE INCOME TAX ACT, 1961 AS THE ASSESSEE COULD NOT PROVED THE GENUINENESS OF THE TRANSACTIONS AND CREDIT WORTHINESS OF THE CONCERNED PERSONS. 2. LD. COMMISSIONER OF INCOME TAX (A)-II, KANPUR HA S ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.32,82,000/- MADE BY THE ASSESSING OFFICER WITHOU T 2 APPRECIATING THE FACTS BROUGHT OF RECORD BY THE ASS ESSING OFFICER WHO RIGHTLY ADDED THIS AMOUNT APPEARING IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AGAINST SUNDRY CREDITORS SINCE THE ASSESSEE COULD NOT SUBSTANTIATE THESE CREDITS. 3. LD. COMMISSIONER OF INCOME TAX (A)-II, KANPUR HA S ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.4,25,000/- MADE BY THE ASSESSING OFFICER WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE ASS ESSING OFFICER WHO RIGHTLY DISALLOWED THE EXPENSES AS THE ASSESSEE WAS NOT ABLE TO SUBSTANTIATE HIS CLAIM IN RESPECT OF THESE EXPENSES. 4. THAT THE ORDER OF THE LD. CIT(A)-II, KANPUR DATE D 27.03.2014 BEING ERRONEOUS IN LAW AND ON FACTS, BE QUASHED AND THE ORDER DATED 30.12.2011 PASSED U/S 1 44 OF THE INCOME TAX ACT,1961 BY THE ASSESSING OFFICER BE RESTORED. 3. LEARNED D. R. OF THE REVENUE SUPPORTED THE ORDER OF ASSESSING OFFICER WHEREAS LEARNED A. R. OF THE ASSESSEE SUPPO RTED THE ORDER OF LEARNED CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. REGAR DING GROUND NO. 1, WE FIND THAT THIS ISSUE WAS DECIDED BY CIT(A) AS PE R THE FOLLOWING FINDINGS ON PAGE NO. 47 OF HIS ORDER, WHICH IS REPRODUCED BE LOW FOR THE SAKE OF READY REFERENCE: FROM THE ABOVE FACTS IT IS EVIDENT THAT THERE IS N O CASH CREDIT RECEIVED DURING THE PREVIOUS YEAR RELEVANT T O ASSESSMENT YEAR 2009-2010. ALL THE LOANS WERE RECEIVED PRIOR T O 01.04.2008. THE MOST OF THE LOANS WERE APPEARING SI NCE IN AUDITED BALANCE SHEETS AS ON 31/03/2002 TO 31/03/20 05 AND HAVE BEEN CONSIDERED IN THE REGULAR ASSESSMENT PROC EEDINGS MADE FOR THE A.Y. 2002-2003 TO A.Y. 2005-2006. THE LOAN TRANSACTIONS AFTER 31.03.2005 ARE THROUGH BANKING C HANNEL AND APPELLANT HAS SUCCESSFULLY SUPPORTED THE SAME FROM HIS BANK STATEMENTS. IN ALL THE CASES RELEVANT DETAILS WITH CONFIRMATIONS HAVE BEEN FILED. THE INDEPENDENT ENQUIRY HAS ALSO B EEN CARRIED OUT BY THE A.O. IN REMAND REPORT THE A.O. HAS EXPRE SSED DOUBT 3 ABOUT THE GENUINENESS / CREDITWORTHINESS OF THE CRE DITOR BUT THIS IS NOT TENABLE IN VIEW OF THE FACTS THAT NO LO AN HAS BEEN RECEIVED DURING PREVIOUS YEAR RELEVANT TO AY 2009-1 0 AND ALSO IN CONSIDERATION OF THE LOANS IN REGULAR ASSESSMENT PROCEEDINGS IN AY 2002-03/2003-04/2004-05/2005-06. THE EXPLANAT ION OF THE APPELLANT IN THE MATTER OF DIFFERENT SIGNATURE OF SRI MOHAN LAL AT THE AFFIDAVIT AND RECEIPT OF NOTICE IS FOUND SATISFACTORY. THE APPELLANT HAS ALSO FURNISHED THE PAN (AERPK5498 M) OF MEENA KESARWANI WHICH IS CONFIRMED FROM SITE OF NSD L. THE EXPLANATION OF THE APPELLANT WITH REGARD TO ABOVE 1 8 CASH CREDIT ACCOUNTS IS FOUND SATISFACTORY. BESIDES THIS, I ALS O AGREE WITH THE CONTENTION OF THE APPELLANT THAT ON THE BASIS O F GENUINENESS /CREDITWORTHINESS ETC. RELATING TO LOANS RECEIVED P RIOR TO PREVIOUS YEAR RELEVANT TO A.Y. 2009-2010 NO ADDITIO N CAN BE MADE IN A.Y. 2009-10, AS HELD BY HON'BLE DELHI HIGH COURT IN CIT VS. USHA STUD AGRICULTURAL FARMS LIMITED - 2008 -301 ITR 384 AND BY HON'BLE RAJASTHAN HIGH COURT IN CIT VS. PRAMESHWAR BOHRA - (2007) - 301 ITR 404. THE ADDITI ON OF RS. 76,58,226/-. IS HEREBY DELETED. 4.1 FROM THE ABOVE PARA FROM THE ORDER OF CIT(A), IT IS SEEN THAT A CATEGORICAL FINDING HAS BEEN GIVEN BY CIT(A) THAT T HERE IS NO CASH CREDIT RECEIVED DURING THE PRESENT YEAR AND ALL THE LOANS WERE RECEIVED PRIOR TO 01/04/2008. THIS FINDING OF CIT(A) COULD NOT BE CO NTROVERTED BY LEARNED D. R. OF THE REVENUE. HENCE, WE FIND NO REASON TO INT ERFERE IN THE ORDER OF CIT(A) BECAUSE NO ADDITION CAN BE MADE U/S 68 OF TH E ACT IN RESPECT OF ANY LOAN WHICH WAS RECEIVED PRIOR TO THE START OF THE P REVIOUS YEAR RELEVANT TO PRESENT ASSESSMENT YEAR. ACCORDINGLY, THIS GROUND IS REJECTED. 5. REGARDING GROUND NO. 2, WE FIND THAT THIS ISSUE WAS DECIDED BY LEARNED CIT(A) ON PAGE NO. 50 OF HIS ORDER, WHICH I S REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: I HAVE CONSIDERED THE FACTS OF THE CASE. THE APPEL LANT HAS FILED CONFIRMATIONS REGARDING THESE LIABILITIES AND ABOVE EXPLANATIONS. THE A.O. HAS EXAMINED THESE LIABILITI ES AND DISCUSSED IN HIS REMAND REPORT, DATED 09-01-2014. I N THE CASE OF SRI AJAY KUMAR GUPTA AND SRI DINESH KUMAR GUPTA STATEMENT HAVE ALSO BEEN RECORDED. IN THE CASE OF SRI AJAY KU MAR GUPTA 4 THE APPELLANT HAS ADVANCED RS.12,51,000/- IN THE MO NTH OF SEPTEMBER, OCTOBER AND NOVEMBER, 2006 FOR PURCHASE OF LAND FROM HIS PERSONAL AMOUNT. SRI AJAY KUMAR GUPTA RETU RNED THIS AMOUNT IN MAY, 2008. THE PROCEEDS WERE CREDITED IN THE PROPRIETORSHIP CONCERN - M/S. KAMAL KUMAR DINESH KU MAR AND THUS SUNDRY CREDITORS APPEARED IN THE BOOKS OF THE APPELLANT. SIMILAR IS THE CASE OF SRI DINESH KUMAR GUPTA WHO W AS ADVANCED RS.17,51,000/- BY THE APPELLANT FROM HIS P ERSONAL ACCOUNT, FOR PURCHASE OF HOUSE PROPERTY. SRI DINESH KUMAR GUPTA RETURNED THIS MONEY IN MAY, 2008 AND THE PROC EEDS WERE DEPOSITED IN THE BUSINESS CONCERN (M/S. KAMAL KUMAR DINESH KUMAR) OF THE APPELLANT BY CREDIT OF PROCEEDS ACCOU NT OF DINESH KUMAR GUPTA SHOWN CREDIT BALANCE OF RS.17,51,000/-. ALL THE TRANSACTIONS OF THE APPELLANT WITH THESE PARTIES AR E THROUGH BANKING CHANNEL AND EVIDENT FROM HIS BANK STATEMENT S. IN FACT THIS IS THE REPAYMENT BY THESE PARTIES TO SHRI KAMA L RAHEJA WHICH IS CREDITED TO HIS PROPRIETARY BUSINESS CONCE RN. THE TRANSACTIONS WITH SHRI AJAY KUMAR GUPTA AND SHRI DI NESH KUMAR GUPTA ARE NEITHER IN THE NATURE OF EXTINGUISHMENT O F TRADE LIABILITIES NOR RECEIPTS IN THE COURSE OF BUSINESS. THE TRANSACTIONS WITH THESE PARTIES ARE NOT RELATED WIT H THE BUSINESS OF THE APPELLANT. THE LIABILITY OF SMT. PRIYA RAHEJ A IS DULY CONFIRMED BY HER. IN THE FACTS OF THE CASE THERE IS NOTHING TO ATTRACT PROVISION U/S 41(1) OF THE INCOME TAX ACT. IN VIEW OF THESE FACTS THE ADDITIONS MADE OF RS.32,82,000/- IS HEREBY DELETED. 5.1 FROM THE ABOVE PARA FROM THE ORDER OF CIT(A), I T CAN BE SEEN THAT A CATEGORICAL FINDING HAS BEEN GIVEN BY CIT(A) THAT T HERE IS NOTHING TO ATTRACT THE PROVISIONS OF SECTION 41(1) OF THE ACT. HE HAS ALSO GIVEN A FINDING THAT REGARDING THE AMOUNT OF RS.12.51 LAC IN RESPECT OF CREDIT IN THE CASE OF SHRI AJAY KUMAR GUPTA, THE AMOUNT WAS ADVANCED BY THE AS SESSEE IN THE MONTH OF SEPTEMBER TO NOVEMBER 2006 FOR PURCHASE OF LAND FROM HIS PERSONAL ACCOUNT BUT SHRI AJAY KUMAR GUPTA RETURNED THIS MON EY IN MAY, 2008 AND THE PROCEEDS WERE DEPOSITED IN THE PROPRIETORSHIP B USINESS CONCERN OF THE ASSESSEE M/S KAMAL KUMAR DINESH KUMAR AND THE SAME WAS APPEARING IN THE AS SUNDRY CREDITORS IN THE BOOKS OF THAT CONCER N. UNDER THESE FACTS, IT CANNOT BE SAID THAT THERE IS ANY LIABILITY WHICH HA S CEASED TO EXIST. SAME IS THE FACT IN THE CASE OF THE LIABILITY OF RS.17.51 L AC APPEARING IN THE NAME OF 5 SHRI DINESH KUMAR GUPTA AS NOTED BY CIT(A) IN THE A BOVE PARA OF HIS ORDER. UNDER THESE FACTS, WE FIND NO REASON TO INTERFERE I N THE ORDER OF LEARNED CIT(A) AND ACCORDINGLY REJECT GROUND NO. 2 OF THE R EVENUE. 6. REGARDING GROUND NO. 3, WE FIND THAT THIS ISSUE WAS DECIDED BY CIT(A) AS PER HIS CATEGORICAL FINDING REGARDING EAC H AND EVERY ITEM OF EXPENSES ON PAGES 58 TO 63 OF HIS ORDER, WHICH ARE REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: ALL ABOVE EXPENSES ARE WHOLLY NECESSARILY AND EXCLUSIVELY RELATED TO MY BUSINESS OF POLYESTER AND METALIZED FILM AND INCOME ARISING OUT OF TRANSACTIONS IN SHAR E AND SECURITIES. I HAVE ALSO ENCLOSED THE CERTIFIED COPY OF THE LEDGER ACCOUNT OF THE EXPENSES DEBITED IN THE BUSINESS CON CERN M/S. KAMAL KUMAR DINESH KUMAR AS PER PARA NO. 5 BELOW. I HAVE ALSO ENCLOSED AND SUBMITTED TO THE A.O. IN REMAND P ROCEEDINGS THE COPY OF ACCOUNT STATEMENT OF SHARE BROKERS EVID ENCING THE EXPENSES SUCH AS BROKERAGE EXPENSES, D.P. CHARGES, SECURITY TRANSACTION TAX INCURRED WITH REFERENCE TO SHARE TR ANSACTIONS. THE EXPENSES ARE DULY DETAILED IN THE COPY OF ACCOU NTS AND ARE EVIDENCED FROM BILLS, VOUCHERS AND RECORDS. I HAVE CONSIDERED THE FACTS OF THE CASE. THE APPELL ANT HAS CLAIMED TOTAL EXPENSES AMOUNTING TO RS.9,96,429 /- UNDER VARIOUS HEADS. THE AO HAS DISALLOWED A SUM OF RS.4, 98,215/- BEING 50% OF RS.9,96,429/- BEING EXCESSIVE AND UNVE RIFIABLE IN NATURE AND TO COVER UP THE POSSIBLE LEAKAGE. REGARDING AUDIT FEE THE-IN REMAND REPORT THE A.O. H AS STATED THAT AUDIT FEE OF RS.5,000/- IS FOR SHARE TR ANSACTIONS, SHARE IS NOT THE BUSINESS OF M/S. KAMAL KUMAR DINES H KUMAR; FURTHER NO EVIDENCE OF PAYMENT OF AUDIT FEE HAS BEE N PRODUCED. THIS HAS BEEN EXPLAINED BY THE APPELLANT THAT THIS IS ASSESSMENT OF KAMAL RAHEJA INDIVIDUAL, WHO HAS TWO BUSINESS DIVISIONS I)M/S KAMAL KUMAR DINESH KUMAR AND SHARE TRANSACTIONS. AUDIT FEE OF RS.6,000/- IS WITH REGAR D TO M/S. KAMAL KUMAR DINESH KUMAR AND FURTHER AUDIT FEE OF R S. 5,000/- IS FOR SHARE BUSINESS. THE AUDIT FEE HAS BE EN ACCOUNTED FOR IN ACCOUNTS MAINTAINED DIVISION WISE. THIS IS PAYABLE AS ON 31.3.2009 AND HAS BEEN PAID SUBSEQUEN TLY TO 6 AUDITOR - AMIT DRIVEDI & ASSOCIATES. COPY OF ACCOUN T FOR F.V. 2009-2010 EVIDENCING THE PAYMENT HAS BEEN SUBMITTED . THE PAYMENT OF AUDIT FEE IS BY CHEQUE NO.172083 DATED 1 9.08.2010 FOR RS. 6,000/- AND RS. 5,000/- VIDE CHEQUE NO.1808 35 DATED 21-08-2010. THE APPELLANT HAS SATISFACTORILY EXPLAI NED THE EXPENSE OF AUDIT FEE. THE DISALLOWANCE MADE IN THIS REGARD IS HEREBY DELETED. REGARDING ADVERTISEMENT IT IS SUBMITTED BY THE APPE LLANT THAT THE PUBLIC NOTICES WERE GOT PUBLISHED IN THE L OCAL NEWS PAPER - JAGRAN PRAKASHAN. ALL PAYMENTS WERE MADE BY ACCOUNT PAYEE CHEQUES DIRECTLY TO THE JAGRAN PRAKASHAN FOR THE PURPOSE. IT IS FURTHER SUBMITTED THAT APPELLANT HAV E DULY SHOWN LAWN INCOME OF RS.8,50,000/- DULY CREDITED IN PROFI T & LOSS ACCOUNT. TO PROTECT HIS INTEREST IN PROPERTY, HE HA S TO ISSUE PUBLIC NOTICES AND. THE EXPENSES HAVE BEEN PAID THR OUGH CHEQUE TO M/S. JAGRAN PRAKASHAN LIMITED. THE EXPENS E IS FULLY RELATABLE TO OUR LAWN INCOME AND IS DEDUCTIBLE EXPE NSE AS CLAIMED. I FIND THAT THE APPELLANT HAS OFFERED LAWN INCOME OF RS.8,50,000/- SHOWN IN THE AUDITED PROFIT & LOSS AC COUNT. THE PAYMENTS ARE THROUGH CHEQUES TOWARDS PUBLIC NOTICES PUBLISHED IN LOCAL NEWS PAPER - JAGRAN. THE EXPENSES INCURRED HAVE BEEN CLAIMED TO PROTECT HIS INTEREST IN PROPERTY WHICH I S GENERATING INCOME. THIS EXPENSE IS DIRECTLY RELATED WITH THE I NCOME AND IS ALLOWABLE EXPENSE IN COMPUTATION OF INCOME. THE DIS ALLOWANCE MADE IN THIS REGARD IS HEREBY DELETED. REGARDING BANK CHARGES IT IS SUBMITTED BY THE APPEL LANT THAT BANK CHARGES HAVE BEEN ACCOUNTED FOR AS DEBITE D BY INDIAN OVERSEAS BANK, BANK OF INDIA CC ACCOUNT, DEV ELOPMENT COOPERATIVE BANK, UNION BANK OF INDIA, PUNJAB NATIO NAL BANK. ALL SUCH EXPENSES ARE DULY EVIDENCED FROM BANK STAT EMENTS. IN REMAND REPORT THERE IS NO ADVERSE VIEW THEREFORE TH E DISALLOWANCE MADE IN THIS REGARD IS HEREBY DELETED. REGARDING DEPRECIATION IT IS SUBMITTED BY THE APPEL LANT THAT DEPRECIATION HAS BEEN COMPUTED AS ALLOWABLE UN DER THE PROVISIONS OF INCOME TAX ACT. THIS IS AS PER ANNEXU RE -D REFERRED IN FORM - 3CD BY THE AUDITOR. IN REMAND RE PORT NO ERROR IN COMPUTATION HAS BEEN POINTED OUT. FROM THE DETAILS OF DEPRECIATION IT IS SEEN THAT '-HERE IS CLAIM OF DEP RECIATION OF RS.45,402/- FOR CAR. THE PERSONAL USE OF CAR CANNOT BE RULED OUT. IT WOULD BE JUSTIFIED TO RESTRICT THE DISALLOWANCE OF DEPRECIATION FOR PERSONAL USE TO THE EXTENT OF 1/5 TH BEING RS.9,080/-. THE REMAINING DISALLOWANCE IS DELETED. 7 REGARDING INSURANCE IT IS SUBMITTED BY THE APPELLAN T THAT THIS EXPENSE IS PAID TO ICICI LUMBARD GIC LIMITED T OWARDS CAR INSURANCE. IN REMAND REPORT THE A.O. HAS OBSERVED T HAT THE NECESSARY EVIDENCE/COPY OF INSURANCE POLICY WAS NOT PRODUCED FOR VERIFICATION. IN THIS REGARD APPELLANT HAS EXPL AINED THAT THE PAYMENT IS THROUGH BANKING CHANNEL FOR INSURANCE OF CAR HOWEVER POLICY OF INSURANCE NOT TRACEABLE. I HAVE C ONSIDERED THE FACTS IN THIS REGARD. THE PAYMENT IS EVIDENT FR OM ENTRY IN BANK STATEMENT. THE EXPENSE IS THEREFORE ALLOWABLE. HOWEVER AS HELD IN THE CASE OF DEPRECIATION ON CAR, IT WOUL D BE JUSTIFIED TO RESTRICT THE DISALLOWANCE OF DEPRECIATION FOR PE RSONAL USE TO THE EXTENT OF 1/5 TH BEING RS.3,282/-. THE REMAINING DISALLOWANCE IS DELETED. REGARDING LEGAL EXPENSES IT IS SUBMITTED BY THE APP ELLANT THAT THERE ARE VARIOUS LEGAL PROCEEDINGS RELATING TO TRADE TAX, INCOME TAX, CIVIL MATTERS ETC. AND WHICH WARRANTED PAYMENT OF FEE TO THE COUNSELS / ADVOCATES. /ALL SUCH FEE HAS BEEN PAID BY CHEQUES EXCEPT RS. 250/- RELATED WITH APPEAL FEE FO R F.Y. 2004- 2005. IN REMAND REPORT THE LD. A.O. HAS OBSERVED TH AT 'IT IS NOTICED THAT THESE EXPENSES RELATE TO THE AMOUNTS P AID FOR INCOME TAX AND SALES TAX CASES AND PAYMENTS MADE TO THREE OTHER PERSONS (ON FOUR OCCASIONS - TOTAL RS. 35,500 /-) IN RESPECT OF PROPERTY NO.7/87, TILAK NAGAR, KANPUR. IN THIS R EGARD THE APPELLANT HAS SUBMITTED THAT THERE IS LAWN INCOME O F RS. 8,50,000/- SHOWN BY ME IS RELATING TO LAWN AT PROPE RTY NO. 7/87 TILAK NAGAR, KANPUR. TO PROTECT MY INTEREST IN PROP ERTY I HAD TO AVAIL SERVICES OF ADVOCATES. THE EXPENSE RELATED TO MY INCOME, AND IS FULLY ALLOWABLE AS CLAIMED. IN ALLOWING ADVE RTISEMENT EXPENSES I HAVE HELD THAT THIS EXPENSE IS DIRECTLY RELATED WITH THE INCOME AND IS ALLOWABLE EXPENSE IN COMPUTATION OF INCOME. FOR THE SAME REASON THE DISALLOWANCE MADE IN THIS R EGARD IS HEREBY DELETED. REGARDING LOADING EXPENSES IT IS SUBMITTED THAT THE EXPENSES ARE RELATED WITH LOADING OF GOODS. THIS IS IN THE NATURE OF PALLEDARS CHARGES PAID TO WORKERS. IN REM AND REPORT THE A.O. HAS OBSERVED THAT THERE ARE NO PROPER BILL S / VOUCHERS WHICH COULD SUBSTANTIATE THE CLAIM OF THE ASSESSEE BEYOND DOUBT. IT IS FURTHER NOTICED THAT THE EXPENSES HAVE BEEN BOOKED MECHANICALLY @ RS. 0.25 PER KG OF LOAD WHICH IS NOT A PRACTICE FOLLOWED IN SUCH TYPE OF EXPENSES (I.E. PALLEDARI). IN THIS REGARD THE APPELLANT HAS SUBMITTED THAT THESE EXPENSES ARE PAID TO THE PALLEDARS IN CASH. THE PALLEDARIES ARE PAID AS SETT LED AT THE RATE 8 OF RE.0.25 PER KG. THE EXPENSE IS FULLY RELATABLE T O THE LOADING OF GOODS. THIS IS NEITHER MECHANICAL NOR OUT OF PRA CTICE. THE LD. A.O, DID NOT INDICATE THE MATERIAL FOR HIS OBSERVAT ION. IN THE MATTER OF SUSPICION IT IS HELD BY HON'BLE RAJASTHAN HIGH COURT BENCH, JAIPUR IN THE CASE OF CIT AJMER VS. JAI KUMA R BAKLIWAL THAT 'SUSPICION HOWSOEVER STRONG IT MAY BE IS NOT S UFFICIENT ITSELF. THIS SQUARELY APPLIES TO THIS FINDING OF TH E LD. A.O..I HAVE CONSIDERED THE FACTS IN THIS REGARD. THE PAYMENT OF PALLEDARIES IN CASH IS USUAL MARKET PRACTICE AND THERE IS NO RE STRICTION IN THIS REGARD. IN THE MARKET THE RATES OF PALLEDARIES ARE SETTLED PER BAG, WEIGHT, CONTAINER ETC. THIS EXPENSE IS IN THE NATURE OF WAGES, FOR THE BUSINESS AND IF PAID AT A PARTICULAR RATE WITH GOODS, THE SAME CANNOT BE ADVERSELY VIEWED MERELY F OR THE REASON THAT THESE ARE PAID IN CASH. THERE IS NO SPE CIFIC MATERIAL BROUGHT ON RECORD AGAINST ALLOWABILITY OF LOADING E XPENSES. THEREFORE THE DISALLOWANCE MADE IN THIS REGARD IS H EREBY DELETED. REGARDING MISCELLANEOUS EXPENSES IT IS SUBMITTED TH AT THIS IS INTEREST PAYMENT AGAINST LATE PAYMENT OF VA T. THE INTEREST PAYMENT IS NOT PANEL CHARACTER AND HENCE A LLOWABLE BUSINESS EXPENSE. THE DISALLOWANCE MADE IN THIS REG ARD IS DELETED. REGARDING POSTAGE AND TELEGRAM EXPENSES RS.101/- IT IS SUBMITTED THAT THESE ARE IN THE NATURE OF COURIER C HARGES. THIS IS FULLY ALLOWABLE BUSINESS EXPENSE. IN REMAND REPO RT IT IS MENTIONED THAT EXPENSES HAVE BEEN INCURRED IN CASH. THE PAYMENT MADE IN CASH FOR COURIER EXPENSES DOES NOT COME IN THE WAY OF ALLOWABILITY. THIS DISALLOWANCE MADE IS HEREBY DELETED. REGARDING PRINTING AND STATIONERY RS.2,787/-, IT IS SUBMITTED THAT THE EXPENSE IS IN THE NATURE OF PURC HASE OF PAPER, REFILLING OF INK AND CHARGES DEBITED BY COOP ERATIVE BANK TOWARDS STATIONARY AND THIS IS FULLY ALLOWABLE AS B USINESS EXPENSE. IN REMAND REPORT IT IS OBSERVED THAT SUM O F THE EXPENSES HAVE BEEN INCURRED IN CASH. THE PAYMENT MA DE IN CASH FOR STATIONERY EXPENSES DOES NOT COME IN THE W AY OF ALLOWABILITY. THIS DISALLOWANCE MADE IS HEREBY DELE TED. REGARDING REPAIRS AND MAINTENANCE RS.13,694/- IT IS SUBMITTED THAI THE EXPENSES ARE IN THE NATURE OF PU RCHASE OF WIRELESS ROUTER TO UP KEEP INTERNET CONNECTIVITY, C HANGE OF OIL RELATING TO CAR AND PURCHASE OF BATTERY TO UP KEEP OUR ASSETS. 9 IN REMAND REPORT THE A.O. HAS OBSERVED THAT IT IS N OT VERIFIABLE THAT THESE EXPENSES WERE FULLY AND EXCLUSIVELY FOR BUSINESS PURPOSES ONLY. FROM DETAILS OF EXPENSES IT IS SEER, THAT RS.11,594/- (RS. 2,994/-, 7500/- AND 1100/-) ARE AP PEARS TO BE RELATED WITH CAR. THE DISALLOWANCE IS RESTRICTED TO RS.5,000/-. REGARDING SALARY RS.1,71,000/-, IT IS SUBMITTED THA T THE EXPENSES ARE IN THE NATURE OF REGULAR EMPLOYMENT OF STAFF FOR BUSINESS PURPOSES. IN REMAND REPORT IT IS OBSERVED BY THE A.O. THAT IT IS NOT VERIFIABLE FROM THE DETAILS SUBMITTE D BY THE ASSESSEE THAT THESE EXPENSES WERE FULLY AND EXCLUSI VELY FOR BUSINESS PURPOSES. THE APPELLANT HAS SUBMITTED TO H AVE FURNISHED THE DETAILS OF PERSON ALONG WITH SERVICES RENDERED TO WHOM SALARY HAVE BEEN PAID. IT WAS FURTHER SUBMITTE D THAT APPELLANT HAS GODOWN AT PANKI, HEAD OFFICE AT TILAK NAGAR. THE EXPENSES ARE LESS THEN RS. 50,000/- PER MONTH. I HA VE CONSIDERED THE FACTS OF THE CASE. THE PAYMENT TO SR I AMIT ARORA AND SRI ANURAG MISHRA HAVE BEEN PAID IN CASH ON REG ULAR BASIS. SRI AMIT ARORA HAVE BEEN CLAIMED TO MAINTAIN ACCOUN T AND SRI ANURAG MISHRA IS LOOKING AFTER OTHER BUSINESS AFFAI RS. THE PAYMENT TO SACHIDANAND DRIVEDI AND KISHAN KUMAR BAS ODIA HAVE BEEN PAID BY CHEQUE. WHO WERE EMPLOYED FOR PAR T OF THE YEAR. THE BUSINESS PLACES HAVE AT TILAK NAGAR AND P ANKI. THE BUSINESS REQUIRE COMPLYING WITH SALES TAX, INCOME T AX, VISITING TO BANK, MAINTAINING RECORD AND CONTROLLING THE STO CK ETC. IN CONSIDERATION OF FACTS AND CONSIDERING MONTHLY EXPE NSE LESS THEN RS.50,000/- PER MONTH, THE CONTENTION OF THE A PPELLANT THAT SALARY EXPENSE IS EXCLUSIVELY FOR THE BUSINESS PURPOSES, IS ACCEPTED. THE DISALLOWANCE MADE IN THIS REGARD IS H EREBY DELETED. REGARDING SALES PROMOTION RS.1,488/- IT IS SUBMITTE D THAT THE EXPENSES ARE IN THE NATURE OF ENTERTAINING CUST OMER. IN REMAND REPORT IT IS OBSERVED BY A.O. THAT THESE EXP ENSES HAVE BEEN INCURRED IN CASH. I HAVE SEEN THE DETAILS OF E XPENSE AND THIS EXPENSE IS INCURRED ON 31.05.2008 FOR ENTERTAI NING CUSTOMER AND BILL NO. 1516 OF ANTARANG RESTAURANT H AS BEEN PAID IN CASH. IN VIEW OF THIS FACT THAT BILL NO. AN D NAME OF RESTAURANT ETC. HAS BEEN GIVEN, THE EXPENSE IS VERI FIABLE. THE PAYMENT IN CASH IN SUCH EXPENSES IS NORMAL FEATURE. THE DISALLOWANCE IS MADE IN THIS REGARD IS HEREBY DELET ED. REGARDING TELEPHONE EXPENSES RS.33,088/- IT IS SUBMITTED BY THE APPELLANT THAT THERE IS LAND LINE PHONE AND MOBILE PHONE FOR THE BUSINESS PURPOSES. THE PROVISI ON OF RS. 10 2,988/- FOR THE MONTH OF MARCH, 2009 HAS BEEN MADE ON THE BASIS OF BILLS RELATING TO MARCH, 2009 RECEIVED AFT ER MARCH AND APPELLANT HAVE OTHER PHONE NO. 2543643 AND 94530361 32 THE EXPENSE OF WHICH NOT DEBITED FOR BUSINESS EXPENSE. HOWEVER, THE DISALLOWANCE IS RESTRICTED TO RS.5,000/-. REGARDING TRAVELLING EXPENSES R.41,01/- IT IS SUBMI TTED THAT IN BUSINESS THERE IS NEED OF TRAVELLING TO MEE T OUR SUPPLIER. IN REMAND REPORT THE A.O. HAS OBSERVED THAT IT IS N OT ESTABLISHED BEYOND DOUBT THAT THESE VISITS WERE IN FACT UNDERTAKEN FULLY AND EXCLUSIVELY FOR BUSINESS PURPO SES KEEPING IN MIND THAT ASSESSEE HAS NOT FURNISHED ANYTHING FR OM THIRD PARTIES REGARDING THESE BUSINESS TRIPS. IN THIS REG ARD THE APPELLANT HAS SUBMITTED THAT THESE WERE PURELY BUSI NESS TRIPS AND NO FAMILY MEMBERS WERE ACCOMPANIED. IT IS OPEN FOR THE A.O. TO MAKE THIRD PARTY ENQUIRY BUT IN TRAVELLING EXPENSES NO THIRD PARTY EVIDENCES ARE SUBMITTED. I HAVE SEEN WI TH DETAILS OF TRAVELLING EXPENSES. THERE IS FORCE IN THE SUBMISSI ON OF THE APPELLANT THAT IN CASE OF TRAVELLING EXPENSES THIRD PARTY EVIDENCES AND NOT REQUIRED AND IN ANY CASE IT WAS O PEN TO THE A.O. TO MAKE ENQUIRY IF SO REQUIRED BY HIM BUT THIS HAS NOT BEEN DONE. IN VIEW OF THESE FACTS THE DISALLOWANCE MADE IS HEREBY DELETED. REGARDING VEHICLE RUNNING AND MAINTENANCE RS.2,15,957.99 IT IS SUBMITTED THAT THE OFFICE SITU ATE AT SHAKKAR PATTI, GODOWN SITUATE AT PANKI INDUSTRIAL AREA. THE RE IS REGULAR REQUIREMENT IN THE BUSINESS TO VISIT OFFICE, GODOWN , BANKS AND TO OUR CUSTOMERS, SERVICE PROVIDERS, INCOME TAX, VA T TAX, COUNSELS, TO THE COURT AND CIVIL COUNSELS ETC. ETC. . THE PURCHASE OF FUEL (PETROL) FOR CAR IS DEBITED UNDER THIS HEAD. EXCEPT RS. 1007- ALL EXPENSES HAVE BEEN PAID THROUG H CHEQUES TO M/S. SRI RAM MOTORS (PETROL PUMP) AGAINST PURCHA SE OF FUEL. IN REMAND REPORT A.O. HAS OBSERVED S THE USER OF ABOVE REFERRED FUEL AND LUBRICANTS FOR THE PERSONAL USER CAN NOT BE RULES OUT IN ABSENCE OF ANY CONCRETE EVIDENCE IN SU PPORT OF ITS USER FOR BUSINESS PURPOSES ONLY. I HAVE SEEN THE DE TAILS OF EXPENSES AND CONSIDERED THE FACTS. THE PERSONAL USE OF VEHICLES CANNOT BE RULES OUT AND IT IS ESTIMATED AT RS.50,00 0/-. THE DISALLOWANCE IS RESTRICTED TO RS.50,000/-. REGARDING BROKERAGE EXPENSES RS.1,44,735.29, DP CHARGES RS.1754.29 AND SECURITY TRANSACTION TAX RS. 33,890/- IT IS SUBMITTED BY THE APPELLANT THAT THESE EXPENSES A RE RELATED WITH SHARE TRANSACTIONS. BROKERAGE HAVE BEEN PAID T O -IL&FS 11 INVEST MART SECURITIES LIMITED AND KOTAK SECURITIES LIMITED. DP CHARGES IS CHARGED ON DEMAT ACCOUNT AND SECURITY TR ANSACTION TAX IS EVIDENCED FROM THE ACCOUNT STATEMENT / CONTR ACT NOTE OF THE BROKER AND STT CERTIFICATE. THERE IS NO ADVERSE REMARKS IN THE REMAND REPORT. I HAVE SEEN THE DETAILS THE EXPE NSES ARE FULLY ALLOWABLE BUSINESS EXPENSE RELATING TO SHARE TRANSACTIONS. THE DISALLOWANCES MADE IN THIS REGARD ARE HEREBY DE LETED. 6.1 AS ABOVE PARAS FROM THE ORDER OF CIT(A), IT IS SEEN THAT CIT(A) HAS EXAMINED EACH AND EVERY ITEM OF EXPENSE IN DETAIL A ND THE DISALLOWANCE WAS DELETED BY HIM ON THE BASIS OF HIS CATEGORICAL FINDING THAT ALL THE EXPENSES ARE FULLY, NECESSARILY AND EXCLUSIVELY REL ATED TO ASSESSEES BUSINESS AND THE SAME ARE ALLOWABLE EXPENSES EXCEPT SMALL PO RTION WHICH IS ALREADY DISALLOWED BY HIM AND THESE FINDINGS OF CIT(A) COUL D NOT BE CONTROVERTED BY LEARNED D. R. OF THE REVENUE. HENCE, WE FIND NO REA SON TO INTERFERE IN THE ORDER OF CIT(A). 7. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GAROD IA ) JUDICIAL MEMBER ACCOUNTANT ME MBER DATED:17/03/2016 *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