RAJESH KHIMJI BHANUSHALI, MUMBAI V. ITO 22(2)(4), MUMBAI

ITA 5623/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56080 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 29-11-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 12-07-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C G K NAIR
• Assessee Lawyers: DHIRENDRA M SHAH
• Keywords: Bad and doubtful debts
• Section: 133(6)

Judgement Text

1 ITA NO.5623/MUM/2010 SHRI RAJESH KHIMJI BHANUSHALI IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI D BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI R.K. PANDA, A.M. AND SHRI VIJAY PAL RA O, J.M. ITA NO. 5623/MUM/2009 (ASST YEAR 2006-07) SHRI RAJESH KHIMJI BHANUSHALI, 1/22 JAI MAHAVIR, R.B. MEHTA MARG, GHATKOPAR )E), MUMBAI 400 0077. VS I.T.O. , WARD 22(2), AAYAKAR BHAWAN MUMBAI. (APPELLANT) (RESPONDENT) PAN NO. AADPB1516F APPELLANT BY S HRI DHIRENDRA M. SHAH RESPONDENT BY SHRI C.G.K. NAIR DATE OF HEARING 29.11.2011 DATE OF PRONOUNCEMENT 14.12.2011 ORDER PER R K PANDA, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 01.04.2010 OF THE COMMISSIONER OF INCOME TAX (A)- 33, MUMBAI RELATING TO ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE IN HIS GROUNDS OF APPEAL HAS CHALLE NGED THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE ADDITION OF RS. 19,68, 519/- MADE BY THE A.O. U/S 41(1) OF THE ACT. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE IS THE PROPRIETOR OF M/S TRISHUL PLASTIC INDUSTRIES WHICH IS MANUFACTURING A ND RESELLING HDPE BAGS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE A.O . NOTED FROM THE ACCOUNTS THAT THE ASSESSEE HAS SHOWN SUNDRY CREDITO RS OF RS. 43,17,268.58 FOR THE FINANCIAL YEAR 2005-06. HE THEREFORE ASKED THE ASSESSEE TO JUSTIFY 2 ITA NO.5623/MUM/2010 SHRI RAJESH KHIMJI BHANUSHALI WITH EVIDENCE ABOUT THE SUNDER CREDITORS. IN ABSEN CE OF ANY JUSTIFICATION, THE A.O. ISSUED NOTICE U/S 133(6) OF THE ACT TO VAR IOUS PARTIES. HOWEVER, SOME OF THEM WERE RETURNED UN-SERVED AND SOME OF TH EM FILED SUBMISSIONS WHICH SHOW DIFFERENCE IN THE OUTSTANDING AMOUNT. TH E A.O. THEREFORE ASKED THE ASSESSEE TO PRODUCE THE CONFIRMATION OF THE CRE DITORS. THE ASSESSEE EXPRESSED HIS INABILITY BY STATING THAT DUE TO FINA NCIAL CRISIS THE AMOUNT SHOWN AS OUTSTANDING COULD NOT BE PAID. ACCORDING TO THE A.O., NON- PAYMENT OF DUES IS A DIFFERENT THING BUT GETTING A CONFIRMATION THAT LIABILITY STILL EXIST WAS THE RESPONSIBILITY OF THE ASSESSEE WHICH HE FAILED TO DO. THEREFORE HE PROCEEDED TO DECIDE THE ISSUE ON MERIT AND ON THE BASIS OF THE DETAILS AVAILABLE ON RECORD. FROM THE DETAILS FURN ISHED BY THE ASSESSEE, HE NOTED THAT LIST OF AMOUNT PAYABLE TO DIFFERENT PART IES ARE AS FOLLOWS:- SL NO. SUNDRY CREDITORS AMOUNT 1 LOTUS POLYTWIST PVT. LTD. 27702 2 MANGAL POLYSACKS PVT. LTD. 86893 3 MAYURA MARKETING AGENCIES 798291 4 PRATHIBA PACKAGING & POLYMERS 61621 5 RAJIV PLASTIC INDUSTRIES 71804 6 SPECTRA BLEND INDUSTRIES 52016 7 TATIA INDUSTRIES 159937 8 LAKSHMANS PLASTICS PVT. LTD. 308340 9 M.R.S. POLYBAGS 110660 10 PADMAVATI POLYSACKS PVT. LTD. 137059 11 M/S PRAKASH PLASTIC 226000/- TOTAL 2040323/- 3.1 HE OBSERVED THAT THE ASSESSEE FAILED TO PRODUCE THE CONFIRMATION OF M/S LAKHSMAN PLASTIC PVT. LTD. WHICH IS OUTSTANDING SINCE 1.4.2004. SINCE THE ASSESSEE HAS CLOSED DOWN HIS OPERATION AND THER E IS NO CONFIRMATION FROM THE PARTY, HE CONSTRUED THAT AMOUNTS SHOWN AS OUTSTANDING HAS CEASED TO EXIST. THE A.O. NOTED THAT IN THE CASE O F PADMAVATI POLYPLASTIC PVT. LTD. AN AMOUNT OF RS. 137059/- HAS BEEN CLAIME D AS LABOUR CHARGES WHEREAS NO AMOUNT HAS BEEN PAID. SIMILARLY, IN CAS E OF M.R.S. POLYBAGS AN 3 ITA NO.5623/MUM/2010 SHRI RAJESH KHIMJI BHANUSHALI AMOUNT OF RS. 113369/- HAS BEEN CLAIMED ON ACCOUNT OF LABOUR CHARGES BUT NO AMOUNT HAS BEEN PAID DURING THE YEAR. THE A.O. F URTHER OBSERVED THAT IN RESPONSE TO NOTICE U/S 133(6), M/S PRAKASH PLASTIC INDUSTRIES HAD SUBMITTED THAT ONLY AN AMOUNT OF RS. 83237/- IS OUT STANDING AS ON 31.3.2006 WHEREAS THE ASSESSEE HAS SHOWN LIABILITY TO THE TUNE OF RS. 309237/-. THEREFORE, THE A.O. OBSERVED THAT THE DI FFERENCE AMOUNT OF RS. 226000/- HAD CEASED TO EXIST. IN OTHER CASES SINCE NEITHER ANY CONFIRMATION NOR ANY EVIDENCE WAS FILED IN ORDER TO PROVE THAT T HE AMOUNT IS STILL PAYABLE WHEN THE ASSESSEE HAS DISCONTINUED HIS BUSINESS, TH E A.O. WAS OF THE OPINION THAT THE OUTSTANDING SHOWN BY THE ABOVE PAR TIES HAD CEASED TO EXIST. HE ACCORDINGLY MADE AN ADDITION OF RS. 20,4 0,323/-. 3.2 BEFORE THE LD. CIT(A) IT WAS SUBMITTED THAT THE A.O. FAILED TO APPRECIATE THAT THERE IS OUTSTANDING RECEIVABLE AMOUNTING TO R S. 70,16,657/. IT WAS ARGUED THAT IF BECAUSE OF THE CLOSURE OF BUSINESS, THE SUNDRY CREDITORS HAVE CEASED TO EXIST, THEN, BY APPLYING THE SAME LOGIC T HE A.O. SHOULD HAVE CONSIDERED THE DEBTS AS BAD DEBTS AND ALLOWED THE S AME AS DEDUCTION. IT WAS SUBMITTED THAT MAYURA MARKETING AGENCIES AGAINS T WHOM AN AMOUNT OF RS. 798291/- IS SHOWN TO BE PAYABLE HAS FILED A CAS E AGAINST THE ASSESSEE AND THE CASE IS PENDING. THEREFORE, THE AMOUNT PAYA BLE TO M/S MAYURA MARKETING AGENCIES COULD NOT BE SAID TO BE CEASED T O EXIST. IN THE CASE OF PRAKASH PLASTIC INDUSTRIES THE PURCHASES DURING THE ABOVE YEAR TALLIES WITH THAT OF THEIR BOOKS OF ACCOUNTS. THERE IS A DIFFER ENCE IN THE OPENING BALANCE. THUS THE A.O. AT BEST COULD HAVE ADDED THE DIFFEREN CE IN OPENING BALANCE. THE LD. CIT(A) CALLED FOR A REMAND REPORT FROM THE A.O. ON THE BASIS OF THE CONFIRMATION FILED FROM 6 PARTIES IN CONNECTION WI TH THE ADDITIONS MADE BY THE A.O. ON ACCOUNT OF SUNDRY CREDITORS. THE A.O. I N HIS REMAND REPORT SUBMITTED THAT THE GENUINENESS OF THE CREDITORS CAN BE ACCEPTED IN THE CASE OF RAJIV PLASTIC INDUSTRIES. AS REGARDS THE CASE O F MANGAL POLYSACKS PVT. LTD., THE A.O. STATED THAT THE ASSESSEE HAD MADE PU RCHASES OF RS. 2,18,016/- DURING THE IMPUGNED ASSESSMENT YEAR AND THE SALES EFFECTED BY 4 ITA NO.5623/MUM/2010 SHRI RAJESH KHIMJI BHANUSHALI M/S MANGAL POLYSACKS PVT. LTD. ALSO CONFIRMS THE SA ME AS PER LEDGER ACCOUNT RECEIVED FROM MANGAL POLYSACKS PVT. LTD. H OWEVER, IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AN AMOUNT OF RS. 89702/- HA S BEEN SHOWN AS PAYABLE AS ON 31.3.2006 WHEREAS IN THE LEDGER SUBMI TTED BY THE PARTY THERE WAS NO AMOUNT RECEIVABLE FROM THE ASSESSEE. 3.2 BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE AND ON THE BASIS OF THE REMAND REPORT OBTAINED FROM THE A.O. THE LD. CI T(A) DELETED AN AMOUNT OF RS. 71804/- AND SUSTAINED THE BALANCE AMOUNT OF RS. 19,68,519/-. WHILE DOING SO HE OBSERVED THAT DURING THE COURSE O F REMAND PROCEEDINGS, OUT OF THE SIX CONFIRMATIONS FILED BY THE ASSESSEE, ONLY TWO PARTIES HAVE FILED THEIR REPLIES ALONG WITH THE DETAILS BEFORE THE A.O . IN THE CASE OF RAJIV PLASTIC INDUSTRIES, AN AMOUNT OF RS. 71804/- HAS BE EN PROVED TO BE GENUINE. IN RESPECT OF THE OTHER CREDITORS, HE NOTED THAT TH E ASSESSEE HAS FAILED TO PROVE THE SAID CREDITORS AS GENUINE DURING THE COUR SE OF ASSESSMENT PROCEEDINGS AS ALSO DURING THE COURSE OF REMAND PRO CEEDINGS. ACCORDING TO THE LD. CIT(A) THE ONUS IS ON THE ASSESSEE TO PROVE AND ESTABLISH THAT THE CREDITORS ARE GENUINE AND EXISTING ONES. HE NOTED T HAT THE ASSESSEE IN THE INSTANT CASE HAS CLAIMED DEDUCTION IN PREVIOUS YEAR S. THE ASSESSEE IS SHOWING THE CONCERNS AS SUNDRY CREDITORS IN THE BAL ANCE SHEET AND HAS CLAIMED PAYMENT DUE TO THEM. HOWEVER, INQUIRIES RE VEAL THAT EXCEPT IN ONE CASE, THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE CREDITORS BY NOT PRODUCING THE CONFIRMATION OR NOT PRODUCING THE CRE DITORS FOR THE VERIFICATION OF THE A.O. NOTHING HAS BEEN PRODUCED BY THE ASSES SEE TO PROVE THAT THE CREDITS STILL EXIST EXCEPT FILING COPY OF LEDGER AC COUNTS. NO EVIDENCE HAS BEEN FILED BY THE ASSESSEE TO SHOW THAT THE SUPPLIER HAS TAKEN TO RECOURSE TO RECOVER THE AMOUNTS. THEREFORE HE UPHELD THE ACTION OF THE A.O. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY OBJECT ED TO THE ACTION OF THE LD. CIT(A). REFERRING TO THE DECISION OF THE HONB LE BOMBAY HIGH COURT IN 5 ITA NO.5623/MUM/2010 SHRI RAJESH KHIMJI BHANUSHALI THE CASE OF CIT VS. GOODLAS NEROLAC PAINTS LTD. RE PORTED IN 188 ITR 1 HE SUBMITTED THAT NON-FURNISHING OF INFORMATION CANNOT BE THE BASIS FOR DISALLOWANCE. HE SUBMITTED THAT DESPITE THE SUBMISS ION BEFORE THE LD. CIT(A) THAT MAYURA MARKETING AGENCIES HAS FILED A CASE AGA INST THE ASSESSEE AND THE CASE IS PENDING, THE LD. CIT(A) DID NOT CONSIDE R THE SAME. HE SUBMITTED THAT IN CASE OF CERTAIN PARTIES THE CREDITS ARE OUT STANDING IN THE PRECEDING YEAR AND THOSE ARE OPENING BALANCES OF THE CURRENT YEAR. THEREFORE, IN SUCH CASES IT CANNOT BE A CEASED LIABILITY DURING THE YE AR. HE SUBMITTED THAT THE A.O. HAS NOT BOTHERED TO RECONCILE THE OPENING BALA NCE. AS REGARDS THE REPLY GIVEN BY ONE OF THE PARTIES NAMELY MANGAL POLYSACKS PVT. LTD., HE SUBMITTED THAT THERE MAY BE MANY REASONS HOW THAT PARTY HAS S HOWN TO HAVE RECEIVED CASH PAYMENTS. HE SUBMITTED THAT NONE OF THE PARTIE S OTHER THAN MANGAL POLYSACKS PVT. LTD. HAS STATED THAT NO AMOUNT IS O UTSTANDING OR RECEIVABLE FROM THE ASSESSEE. THEREFORE, MERELY BECAUSE THOSE PARTIES DID NOT RESPOND TO THE NOTICE ISSUED BY THE A.O. U/S 133(6), THE PR OVISIONS OF SECTION 41(1) IPSO FACTO CANNOT BE ATTRACTED. HE ACCORDINGLY SUBM ITTED THAT THE ADDITIONS SUSTAINED BY THE LD. CIT(A) SHOULD BE DELETED. 5. THE LD. D.R., ON THE OTHER HAND, WHILE SUPPORTIN G THE ORDER OF THE LD. CIT(A) SUBMITTED THAT THE A.O. PASSED THE ORDER 5 D AYS BEFORE THE TIME BARRING PERIOD FOR ASSESSMENT. HOWEVER, THE ASSESS EE ALSO FAILED TO FILE FULL DETAILS BEFORE THE LD. CIT(A). IN ABSENCE TO PROVE THE GENUINENESS OF THE SUNDRY CREDITORS, THE LD. CIT(A) WAS JUSTIFIED IN S USTAINING THE ADDITION TO THE TUNE OF RS. 19,68,519/-. 6. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PURSUED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE DECISION RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE. THE RE IS NO DISPUTE TO THE FACT THAT OUT OF THE TOTAL SUNDRY CREDITORS OF RS. 43172 68/- AS ON 31.3.2006, THE A.O. PROCEEDED TO MAKE ADDITION U/S 41(1) OF THE AC T TO THE TUNE OF RS. 6 ITA NO.5623/MUM/2010 SHRI RAJESH KHIMJI BHANUSHALI 2040323/- IN THE CASE OF 11 PARTIES. THE BASIS OF ADDITION MADE BY THE A.O. IS THAT THE ASSESSEE FAILED TO SUBSTANTIATE WITH EV IDENCE THAT THE LIABILITY STILL EXISTS ESPECIALLY WHEN THE ASSESSEE HAS CLOSED DOWN ITS BUSINESS. WE FIND THE LD. CIT(A) ON THE BASIS OF THE VARIOUS SUBMISSI ONS MADE BEFORE HIM AND ON THE BASIS OF REMAND REPORT OBTAINED FROM A.O. DE LETED AN AMOUNT OF RS. 71804/- ON THE GROUND THAT THE PARTY HAD FILED CONF IRMATION TO THIS EXTENT. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASS ESSEE THAT IF THE CLOSURE OF BUSINESS IS ONE OF THE CRITERIA FOR MAKING THE ADDI TION ON ACCOUNT OF CEASED LIABILITY, THEN, APPLYING THE SAME LOGIC, THE SUNDR Y DEBITS OUTSTANDING TO THE TUNE OF RS. 70,16,657/- SHOULD HAVE ALSO BEEN TREAT ED AS BAD DEBT AND CORRESPONDING ALLOWANCES SHOULD HAVE BEEN GIVEN. WE FIND SUFFICIENT FORCE IN THE ABOVE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE. IN OUR OPINION, IF THE CLOSURE OF BUSINESS IS CONSIDERED AS A BASIS FOR TREATING SUNDRY CREDITORS AS CESSATION OF LIABILITY, THEN, BY APPLY ING THE SAME LOGIC DEBTORS ALSO SHOULD BE CONSIDERED AS BAD DEBT. SINCE THE A BOVE LOGIC HAS NOT BEEN APPLIED FULLY, CLOSURE OF BUSINESS CANNOT BE CONSID ERED AS THE CRITERIA FOR TREATING THE SUNDRY CREDITORS AS CESSATION OF LIABI LITY. WE FURTHER FIND THE SUBMISSION OF THE ASSESSEE BEFORE THE LD. CIT(A) TH AT M/S MAYURA MARKETING SERVICES HAS FILED A CASE AGAINST THE ASSESSEE THER EFORE THE AMOUNT CANNOT BE TREATED AS CEASED TO EXIST HAS BEEN IGNORED BY T HE LD. CIT(A). 6.1 IT HAS BEEN HELD BY THE HONBLE SUPREME COURT I N THE CASE OF CIT V. SUGAULI SUGAR MILLS REPORTED IN 236 ITR 518 THAT NO ADDITION U/S 41(1) CAN BE MADE EVEN WHEN THE AMOUNT STANDING TO THE CREDIT OF THE CREDITORS IS WRITTEN BACK BY UNILATERAL ACT OF THE ASSESSEE. IN THE INSTANT CASE, WE FIND THE ASSESEE HAS NOT WRITTEN BACK ANY AMOUNT IN ITS BOOKS OF ACCOUNT AND THE LIABILITIES IN QUESTION DO EXIST IN THE BOOKS O F ACCOUNT OF THE ASSESSEE ON THE DATE OF THE BALANCE SHEET I.E 31.3.2006. WE AL SO FIND SUFFICIENT FORCE IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSE T HAT NONE OF THE PARTIES EXCEPT MANGAL POLYSACKS PVT. LTD. HAS STATED THAT N O AMOUNT IS RECEIVABLE FROM THE ASSESSEE. WE ALSO FIND FORCE IN THE SUBMI SSION OF THE LD. COUNSEL 7 ITA NO.5623/MUM/2010 SHRI RAJESH KHIMJI BHANUSHALI FOR THE ASSESSEE THAT DUE TO VARIETY OF REASONS M/S MANGAL POLYSACKS PVT. LTD. WHO HAS SOLD GOODS TO THE TUNE OF RS. 2,18,016 /- TO THE ASSESSEE AND WHICH IS CONFIRMED FROM THE LEDGER ACCOUNT SUBMITTE D BY THE PARTY MIGHT HAVE STATED THAT THERE IS NO AMOUNT RECEIVABLE FROM THE ASSESSEE. HOWEVER, THE BOOKS OF THE ASSESSEE SHOWS RS. 89702/- PAYABLE AS ON 31.3.2006. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT NO ADDITION U/S 41(1) OF THE ACT IS CA LLED FOR IN THE INSTANT CASE. WE ACCORDINGLY SET ASIDE THE ORDER OF THE LD. CIT(A ) AND DIRECT THE A.O. TO DELETE THE ADDITION. THE GROUND RAISED BY THE ASSE SSEE IS ACCORDINGLY ALLOWED. 7. THE SECOND GROUND RELATES TO THE ORDER OF THE LD . CIT(A) IN SUSTAINING THE DISALLOWANCE OF RS. 158528/- OUT OF THE TRANSPO RT AND LOADING AND UNLOADING EXPENSES OF RS. 317057/- MADE BY THE A.O. 7.1 AFTER HEARING BOTH THE SIDES WE FIND THE ASSESS EE HAS CLAIMED TRANSPORTATION CHARGES AMOUNTING TO RS. 947028/-. FROM THE VARIOUS DETAILS FURNISHED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. NOTED THAT AN AMOUNT OF RS. 3 ,17,057/- HAS BEEN DESCRIBED AS CASH PAID TO LOCAL TRANSPORTER AND LOA DING AND UNLOADING EXPENSES. IN ABSENCE OF FULL DETAILS FURNISHED BY THE ASSESSEE SUCH AS NAME OF THE PARTY, PURPOSES OF PAYMENT, THE A.O. WAS OF THE OPINION THAT THE EXPENSES ARE NOT INCURRED WHOLLY AND EXCLUSIVELY FO R THE PURPOSES OF THE BUSINESS. ACCORDING TO HIM, SINCE THE AMOUNT HAS BE EN PAID IN CASH, MANIPULATION IN INFLATING THE EXPENSES CANNOT BE DE NIED ESPECIALLY WHEN THE ASSESSEE HAS CLOSED HIS BUSINESS IN AND AROUND OCTO BER, 2005 BUT EXPENSES HAS BEEN CLAIMED TILL THE MONTH OF JANUARY. HE ACC ORDINGLY DISALLOWED AN AMOUNT OF RS. 317057/-. 8 ITA NO.5623/MUM/2010 SHRI RAJESH KHIMJI BHANUSHALI 7.2 IN APPEAL, THE LD. CIT(A) RESTRICTED SUCH DISAL LOWANCE TO RS. 1,58,528/-. WHILE DOING SO, THE LD. CIT (A) OBSERV ED THAT ALTHOUGH THE CASH EXPENSES STAND UN-VERIFIED, HOWEVER, KEEPING IN VIE W THE NATURE OF ASSESSEES BUSINESS, SOME CASH EXPENSES COULD HAVE BEEN INCURRED BY THE ASSESSEE DURING THE COURSE OF HIS BUSINESS ACTIVITI ES. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT SUCH ADDITION IS ON THE HIGHER SIDE. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE, THE DISALLOWANCE IS RESTRICTED TO 25% OF THE CASH EXPENSES AS AGAINST 50% MADE BY THE LD. CIT(A), WHICH IN OUR OPINION, WILL MEET THE ENDS OF JUSTICE. WE HOLD AND DIRECT ACCORDINGLY. THE GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY PA RTLY ALLOWED. 8. THE THIRD GROUND BY THE ASSESSEE RELATES TO THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE AMOUNT OF RS, 43530/- MADE BY THE A.O. OUT OF WAGES PAID DURING THE YEAR. 8.1 AFTER HEARING BOTH THE SIDES WE FIND OUT OF THE TOTAL WAGES AMOUNTING TO RS. 217653/- CLAIMED BY THE ASSESSEE DURING THE IMPUGNED ASSESSMENT YEAR, THE A.O. DISALLOWED 1/5 TH OF THE EXPENSES I.E. RS. 43530/- AND ADDED TO THE TOTAL INCOME ON THE GROUND THAT ASSESSEE COU LD NOT SUBSTANTIATE WITH EVIDENCE TO HIS SATISFACTION REGARDING COMMERCIAL E XPEDIENCY OF EXPENSES INCURRED. IN ABSENCE OF ANY FURTHER EVIDENCE PRODU CED BEFORE THE LD. CIT(A), HE UPHELD THE ADDITION MADE BY THE A.O. BEFORE US A LSO , THE LD. COUNSEL FOR THE ASSESSEE COULD NOT SUBSTANTIATE THE EXPENSES EX CEPT STATING THAT THE SAME IS ON HIGHER SIDE. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND IN ABSENCE OF ANY DETAILS REGARDING THE EXPENSES IN CURRED BY THE ASSESSEE ON ACCOUNT OF WAGES, DISALLOWANCE OF 1/5 TH OF THE EXPENSES UNDER THE FACTS AND CIRCUMSTANCES, IN OUR OPINION, IS REASONABLE.. THE ORDER OF THE LD. CIT(A) IS ACCORDINGLY UPHELD. THE GROUND RAISED BY THE ASSESS EE IS ACCORDINGLY DISMISSED. 9 ITA NO.5623/MUM/2010 SHRI RAJESH KHIMJI BHANUSHALI 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14.12.2011. SD/- ( VIJAY PAL RAO ) JUDICIAL MEMBER SD/- ( R K PANDA ) ACCOUNTANT MEMBER PLACE: MUMBAI : DATED: 14.12.2011 RK COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT, 22, MUMBAI 4 CIT(A) - 33, MUMBAI 5 DR BENCH D 6 MASTER FILE /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI