ACIT, Alwar V. M/S KHAITAN CHEMICALS PVT. LTD., Alwar

ITA 6/JPR/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82842 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 1991-1992
• Appeal Filed On: 03-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Depreciation; Revenue expenditure
• Section: 43B; 154

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL: JAIPUR BENCH JAIPUR BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI B. C. MEENA, ACCOUNTANT MEMBER. ITA.NO. 6/JP/2012 (ASSESSMENT YEAR:1991-92) ASSISTANT COMMISSIONER OF INCOME TAX , CIRCLE-2, ALWAR APPELLA NT VS. M/S KHAITAN CHEMICALS PVT. LTD. B-522, INDUSTRIAL AREA, BHIWADI, DISTT.-ALWAR RESPONDENT & ITA.NO.926/JP/2011 (ASSESSMENT YEAR:1992-93) ASSISTANT COMMISSIONER OF INCOME TAX , CIRCLE-2, ALWAR APPELLA NT VS. M/S KHAITAN CHEMICALS PVT. LTD. B-522, INDUSTRIAL AREA, BHIWADI, DISTT.-ALWAR-301001(RAJ.) RESPONDENT PAN: AACCK4698P I.T.A. NOS. 6/JP/2012 & 926/JP/2011 A.Y. 1991-92 & 92-93 (ACIT VS. M/S. KHAITAN CHEMICALS P.LTD.) PAGE 2 / BY REVENUE :SHRI RAJESH OJHA, D.R. / BY ASSESSEE : SHRI P. C. PARWAL, A.R. /DATE OF HEARING :24.11.2014 /DATE OF PRONOUNCEMENT : 28 .11.2014 ORDER PER BENCH THESE TWO APPEALS HAVE BEEN FILED BY REVENUE AGAINS T RESPECTIVE ORDERS OF COMMISSIONER OF INCOME TAX (AP PEALS), ALWAR, DATED 05.10.2011 FOR A.Y. 1991-92 AND 30.08. 2011 FOR A.Y. 1992-93. SO, THEY ARE BEING DISPOSED OF BY WA Y OF COMMON ORDER FOR SAKE OF CONVENIENCE. 2. IN ITA NO. 6/JP/2012 FOR A.Y. 1991-92, REVENUE H AS FILED APPEAL ON THE FOLLOWING GROUNDS: 1. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE DISALLOWANCE MADE ON A/C OF DEPRECIATION ON GOVT. SUBSIDE OF RS.3,74,962/-. 2. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.7,75,000/- ON A/C OF UNEXPLAINED CASH CREDITORS. 3. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN RESTRICT ING I.T.A. NOS. 6/JP/2012 & 926/JP/2011 A.Y. 1991-92 & 92-93 (ACIT VS. M/S. KHAITAN CHEMICALS P.LTD.) PAGE 3 THE ADDITION TO RS.2,55,532/- OUT OF TOTAL ADDITION OF RS.3,75,864/- MADE U/S 43B. 4. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN RESTRICT ING THE TRADING ADDITION TO RS. 2,00,000/- OUT OF TOTAL ADDITION OF RS.5,00,000/-. 5. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN RESTRICT ING THE DISALLOWANCE TO RS.8,301/- OUT OF TOTAL DISALLOWANCE OF RS.1,00,000/-. 6. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.4,45,267/- MADE ON A/C OF DEFERRED REVENUE EXPENDITURE. 7. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN RESTRICT ING THE DISALLOWANCE OF RS.10,000/- OUT OF TOTAL DISALLOWANCE OF RS.51,800/- ON ACCOUNT OF ADVERTISEMENT EXPENSES. 8. THAT THE LD.CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN RESTRICTING THE DISALLOWANCE OF RS.10,000/- OUT OF TOTAL DISALLOWAN CE OF RS.49,294/- ON ACCOUNT OF SALES PROMOTION EXPENSES. 9. THAT THE LD.CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN RESTRICTING THE DISALLOWANCE TO RS.7,493/- OUT OF TOTAL DISALLOWANC E OF RS.25,000/- ON ACCOUNT OF TELEPHONE EXPENSES. 3. FIRST ISSUE IN ITA NO. 6/JP/2012 FOR A.Y. 1991-9 2 IS WITH REGARDS TO DISALLOWANCE MADE ON ACCOUNT OF DEPRECIA TION ON GOVERNMENT SUBSIDY OF RS.3,74,962/-. 3.1 MATTER WAS CARRIED BEFORE FIRST APPELLATE AUTHO RITY, WHEREIN STAND OF ASSESSEE HAS BEEN THAT ASSESSEE CO MPANY HAS NOT RECEIVED ANY AMOUNT OF SUBSIDY DURING THE YEAR AND WDV I.T.A. NOS. 6/JP/2012 & 926/JP/2011 A.Y. 1991-92 & 92-93 (ACIT VS. M/S. KHAITAN CHEMICALS P.LTD.) PAGE 4 IS BEING CARRIED FORWARD FROM THE EARLIER YEARS AND BY PLACING RELIANCE ON THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN CASE OF AMBUICA ELECTROLYTIC 191 ITR 494 AND THE DE CISION OF HONBLE APEX COURT IN CASE OF PJ CHEMICALS 210 ITR 830 CONTENDED THAT FOR NOT DEDUCTING AMOUNT OF SUBSIDY FOR THE PURPOSE OF DETERMINING ACTUAL COST. AFTER CONSIDER ING THE SAME CIT(A) OBSERVED THAT ASSESSEE COMPANY HAS NOT RECEI VED THE AMOUNT OF SUBSIDY DURING THE YEAR, WHICH ASSESSING OFFICER HAS DEDUCTED FOR THE PURPOSE OF COMPUTING ACTUAL CO ST FOR DEPRECIATION AND BY FOLLOWING DECISION OF HONBLE A PEX COURT IN CASE OF PJ CHEMICALS (SUPRA) DIRECTED THE ASSESSING OFFICER NOT TO DEDUCT AMOUNT OF SUBSIDY OF RS.15,00,000/- OUT O F WDV OF THE PLANT AND MACHINERY FOR THE PURPOSE OF COMPUTIN G DEPRECIATION. ACCORDINGLY, APPEAL OF ASSESSEE WAS ALLOWED AND IT WAS GRANTED NECESSARY RELIEF. THIS REASONED FIN DING OF CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE, WHEREBY HE HAS DELETED THE DISALLOWANCE MADE BY ASSESSING OFFICER ON ACCOU NT OF DEPRECIATION OF GOVERNMENT SUBSIDY OF RS.3,74,962/- . SAME IS UPHELD. 4. NEXT ISSUE IN REVENUES APPEAL IS WITH REGARDS T O ADDITION OF RS.7,75,000/- ON ACCOUNT OF UNEXPLAINED CASH CRE DITORS. ASSESSING OFFICER MADE ABOVE SAID ADDITION AS ACCOR DING TO HIM CASH CREDITORS REMAINED UNEXPLAINED. 4.1 MATTER WAS CARRIED BEFORE FIRST APPELLATE AUTHO RITY AND HAVING CONSIDERED THE SAME CIT(A) GRANTED RELIEF TO THE I.T.A. NOS. 6/JP/2012 & 926/JP/2011 A.Y. 1991-92 & 92-93 (ACIT VS. M/S. KHAITAN CHEMICALS P.LTD.) PAGE 5 ASSESSEE. SAME HAS BEEN OPPOSED ON BEHALF OF LD. DEPARTMENTAL REPRESENTATIVE WHO SUBMITTED THAT CIT( A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.7,75,0 00/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT. ACCORDINGLY, O RDER OF CIT(A) BE SET ASIDE AND THAT OF ASSESSING OFFICER B E RESTORED. ON OTHER HAND, LD. AUTHORIZED REPRESENTATIVE SUPPOR TED THE ORDER OF CIT(A) ON THE ISSUE. 4.2 AFTER GOING THROUGH RIVAL SUBMISSION AND MATE RIAL ON RECORD, WE FIND THAT STAND OF ASSESSEE HAS BEEN THA T IT RECEIVED CASH CREDIT FROM ITS CREDITORS AND GAVE COPY OF ACC OUNTS FOR FOLLOWING CASH CREDITORS WHO ARE DIRECTORS OF COMPA NY BUT HAVE BEEN DISALLOWED BY ASSESSING OFFICER. ACCORDI NG TO ASSESSEE, THE AMOUNTS HAVE BEEN ACCEPTED BY ASSESSE E COMPANY THROUGH ACCOUNT PAYEE CHEQUES AND CONFIRMAT ION IN THE FORM OF SIGNING OF BALANCE SHEET WERE BEING PRO DUCED. THEREFORE, AMOUNT OF CASH CREDITS WERE REQUEST TO D ELETE MR. I. P. KHAITAN, DIRECTOR RS. 20,000/- AND SMT. KIRAN KH AITAN, DIRECTOR RS. 7,55,000/-. CIT(A) HAVING CONSIDERED THE SAME OBSERVED THAT IN REMAND REPORT ASSESSING OFFICER HA S STATED THAT IDENTITY, CREDITWORTHINESS AND GENUINENESS OF CASH CREDITORS WERE ESTABLISHED. CONSIDERING THESE SUBM ISSIONS, CASH CREDIT OF RS.20,000/- OF SHRI I. P. KHAITAN AN D RS.7,55,000/- OF SMT. KIRAN KHAITAN WERE DELETED BY CIT(A). THIS REASONED FACTUAL FINDING OF CIT(A) IN LIGHT OF REMAND REPORT, WHEREBY HE HAS GRANTED RELIEF TO ASSESSEE, NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. I.T.A. NOS. 6/JP/2012 & 926/JP/2011 A.Y. 1991-92 & 92-93 (ACIT VS. M/S. KHAITAN CHEMICALS P.LTD.) PAGE 6 5. NEXT ISSUE IN REVENUES APPEAL IS WITH REGARDS T O RESTRICTING THE ADDITION OF RS. 2,55,532/- OUT OF T OTAL ADDITION OF RS.3,75,864/- MADE U/S. 43B. ASSESSING OFFICER MADE ADDITION OF RS. 3,75,864/- UNDER PROVISION OF 43B. 5.1 MATTER WAS CARRIED BEFORE FIRST APPELLATE AUTHO RITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED AND HAVING CONSIDERED THE SAME CIT(A) GRANTED RELIEF TO THE ASSESSEE. CI T(A) OBSERVED FROM ASSESSMENT ORDER AND BALANCE SHEET THAT A SUM OF RS. 1,20,332/- WAS IN THE NATURE OF MISCELLANEOUS EXPEN SES, WHICH BY NO STRETCH OF IMAGINATION COULD BE CONSIDERED AS PAYMENT FALLING IN NATURE OF EXPENSES COVERED BY PROVISIONS OF SECTION 43B OF INCOME TAX ACT,1961. THEREFORE, SAME WAS DEL ETED AND REST OF EXPENSES WERE CONFIRMED. THEREFORE, OUT OF ADDITION OF RS.3,75,864/-, A SUM OF RS.1,20,332/- WAS RIGHTLY D ELETED BY CIT(A). THIS REASONED FINDING OF CIT(A) NEEDS NO I NTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 6. NEXT ISSUE IN REVENUES APPEAL IS WITH REGARDS T O RESTRICTING THE TRADING ADDITION OF RS.2,00,000/- O UT OF TOTAL ADDITION OF RS.5,00,000/-. ASSESSING OFFICER MADE TRADING ADDITION OF RS.5 LACS, WHICH WAS AGITATED BEFORE CI T(A), WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF OF ASSESS EE AND HAVING CONSIDERED THE SAME CIT(A) HAS RESTRICTED TH E TRADING ADDITION OF RS. 2 LACS OUT OF TOTAL ADDITION OF RS. 5 LACS. I.T.A. NOS. 6/JP/2012 & 926/JP/2011 A.Y. 1991-92 & 92-93 (ACIT VS. M/S. KHAITAN CHEMICALS P.LTD.) PAGE 7 6.1 SAME HAS BEEN OPPOSED BEFORE US, INTER ALIA, LD . DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT CIT(A) W AS NOT JUSTIFIED IN RESTRICTING THE TRADING ADDITION OF RS . 2 LACS OUT OF ADDITION OF RS.5 LACS. ON OTHER HAND, LD. AUTHORIZE D REPRESENTATIVE SUPPORTED THE ORDER OF CIT(A) ON THE ISSUE. 6.2 AFTER GOING THROUGH RIVAL SUBMISSION AND MATE RIAL ON RECORD, WE FIND THAT TRADING ADDITION WAS MADE IN A BSENCE OF BOOKS OF ACCOUNTS BUT QUANTUM OF TRADING ADDITION O F RS.5 LACS WAS FOUND. IN FACTS AND CIRCUMSTANCES, ADDITION OF RS. 5 LACS WERE FOUND ON HIGHER SIDE AND IN VIEW OF FACT THAT ASSESSEE COMPANY WAS IN LOSES AND THERE COULD NOT BE ANY PUR POSE OF TAX EVASION BY NOT SHOWING CORRECT INCOME, CIT(A) R ESTRICTED THIS TRADING ADDITION TO RS. 2 LACS AND REMAINING T RADING ADDITION OF RS. 3 LACS WAS DELETED. UNDER THE FACT S AND CIRCUMSTANCES, THIS REASONED FACTUAL FINDING OF CIT (A) NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 7. NEXT ISSUE IN REVENUES APPEAL IS WITH REGARDS T O RESTRICTING THE DISALLOWANCE OF RS.8,301/- OUT OF T OTAL DISALLOWANCE OF RS.1,00,000/-. ASSESSING OFFICER D ISALLOWED RS. 1 LAC OUT OF TOTAL TRAVELLING AND CONVEYANCE EX PENSES OF RS.2,15,191/- ON ACCOUNT OF POSSIBILITY OF PERSONAL USE OF EXPENSES AND ALSO IN ABSENCE OF DETAILS THEREOF. S TAND OF ASSESSEE HAS BEEN THAT ONLY A SUM OF RS.83,010/- HA VE BEEN INCURRED BY DIRECTORS FOR THEIR TRAVELLING, THEREFO RE, DISALLOWANCE SHOULD BE RESTRICTED TO 10% OF RS.83,0 10/-. I.T.A. NOS. 6/JP/2012 & 926/JP/2011 A.Y. 1991-92 & 92-93 (ACIT VS. M/S. KHAITAN CHEMICALS P.LTD.) PAGE 8 FINDING SUBSTANCE AND CONSIDERING THE PREVALENT PRA CTICE, DISALLOWANCE FOR PERSONAL USE OF TRAVELLING EXPENSE S WAS RIGHTLY RESTRICTED TO RS. 8,301/- AND BALANCE DISALLOWANCE OF RS.91,699/- WAS DELETED. THIS REASONED FACTUAL FIN DING OF CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPH OLD THE SAME. 8. NEXT ISSUE IN REVENUES APPEAL IS WITH REGARDS T O ADDITION OF RS.4,45,267/- MADE ON ACCOUNT OF DEFERRED REVENU E EXPENDITURE. ASSESSING OFFICER HAS DISALLOWED DEFE RRED REVENUE EXPENSES OF RS.4,45,267/- AS CLAIMED BY ASSESSEE CO MPANY IN ITS BOOKS OF ACCOUNT ON THE GROUND THAT DEFERRED RE VENUE EXPENSES ARE CAPITAL EXPENSES IN NATURE. THEREFORE , SAME WERE DISALLOWED. 8.1 MATTER WAS CARRIED BEFORE FIRST APPELLATE AUTHO RITY, WHEREIN ASSESSEE CONTENDED THAT HE HAS CLAIMED DEFE RRED REVENUE EXPENSES ON THE BASIS OF ITS ACCOUNTING POL ICY AND PRINCIPLE. AS NOMENCLATURE OF THE ACCOUNT SUGGESTS , THESE ARE REVENUE EXPENSES IN CONTRAST TO CAPITAL EXPENSES. SAID REVENUE EXPENSES WERE BEING CONSISTENTLY AND REGULA RLY BEING CLAIMED BY ASSESSEE FROM EARLIER YEAR AND ARE BEING ALLOWED BY ASSESSING OFFICER. SO, ADDITION IN QUESTION BE DEL ETED. APART FROM THIS, ASSESSEE RAISED VARIOUS LEGAL AND FACTUA L CONTENTIONS TO OPPOSE THIS DISALLOWANCE. HAVING CONSIDERED THE SAME CIT(A) OBSERVED THAT ASSESSEE COMPANY IS REGULARLY CLAIMING DEFERRED REVENUE EXPENSES OF RS.4,45,267/- FROM YEA R TO YEAR. I.T.A. NOS. 6/JP/2012 & 926/JP/2011 A.Y. 1991-92 & 92-93 (ACIT VS. M/S. KHAITAN CHEMICALS P.LTD.) PAGE 9 NO SUCH DISALLOWANCE WAS EVER MADE IN EARLIER YEARS . THIS PRACTICE OF ASSESSEE COMPANY TO CLAIM SUCH DEDUCTIO N AS PER ITS ACCOUNTING POLICY, SHOULD NOT BE DISTURBED BY A SSESSING OFFICER. ACCORDINGLY, CIT(A) DELETED THE DISALLOWAN CE IN QUESTION. THIS REASONED FACTUAL FINDING OF CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 9. NEXT ISSUE IN REVENUES APPEAL IS WITH REGARDS T O RESTRICTING THE DISALLOWANCE OF RS.10,000/- OUT OF TOTAL DISALLOWANCE OF RS.51,800/-. ASSESSING OFFICER MAD E DISALLOWANCE OF RS. 51,800/- ON ACCOUNT OF ADVERTIS EMENT EXPENSES. THE STAND OF ASSESSEE HAS BEEN THAT BOOK S OF ACCOUNT OF ASSESSEE COMPANY ARE VOUCHED AND AUDITED . NO DISCREPANCIES WERE FOUND AT THE TIME OF VOUCHING IN THIS REGARD. EXPENSES WERE NOT IN PERSONAL NATURE. ASS ESSING OFFICER HAS DISALLOWED THE AMOUNT SIMPLY ON THE PAS T HISTORY OF THE CASE, WHEREAS EACH AND EVERY YEAR IS INDEPENDEN T IN ITS EXISTENCE. CONSIDERING THE SUBMISSIONS OF ASSESSEE , CIT(A) RESTRICTED THE DISALLOWANCE OF RS.10,000/- IN PLACE OF RS.81,500/-. THIS REASONED FACTUAL FINDING OF CIT( A) NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 10. NEXT ISSUE IN REVENUES APPEAL IS WITH REGARDS TO RESTRICTING THE DISALLOWANCE OF RS. 10,000/- OUT OF TOTAL DISALLOWANCE OF RS.49,294/- ON ACCOUNT OF SALES PR OMOTION EXPENSES. STAND OF ASSESSEE HAS BEEN THAT ASSESSIN G OFFICER WAS NOT JUSTIFIED IN DISALLOWING RS.49,294/- OUT OF SALES I.T.A. NOS. 6/JP/2012 & 926/JP/2011 A.Y. 1991-92 & 92-93 (ACIT VS. M/S. KHAITAN CHEMICALS P.LTD.) PAGE 10 PROMOTION EXPENSES. PROFIT AND LOSS ACCOUNT FOR LA ST PREVIOUS YEAR 1989-90, WHEREIN RS.80,968/- WERE DEBITED UNDE R SAME HEAD AND WERE ALLOWED. ACCORDINGLY, ADDITION IN QU ESTION WAS OPPOSED. CIT(A) HAVING CONSIDERED THE SAME, RESTRI CTED THIS DISALLOWANCE TO RS.10,000/- IN PLACE OF RS.49,294/- . THIS REASONED FACTUAL FINDING OF CIT(A) NEEDS NO INTERFE RENCE FROM OUR SIDE. WE UPHOLD THE SAME. 11. NEXT ISSUE IN REVENUES APPEAL IS WITH REGARDS TO RESTRICTING THE DISALLOWANCE OF RS. 7,493/- OUT OF TOTAL DISALLOWANCE OF RS. 25,000/- ON ACCOUNT OF TELEPHON E EXPENSES. CIT(A) HAS RESTRICTED THE DISALLOWANCE O F RS.7,493/- OUT OF TOTAL DISALLOWANCE OF RS.25,000/- ON ACCOUNT OF TELEPHONE EXPENSES ON THE BASIS OF PERSONAL USE. T AKING ALL FACTS AND CIRCUMSTANCES IN TO CONSIDERATION, THIS R ESTRICTION OF DISALLOWANCE OF RS.7,493/- OUT OF TOTAL DISALLOWANC E OF RS.25,000/-, NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 12. AS A RESULT, APPEAL OF REVENUE FOR A.Y. 1991-92 IS DISMISSED. 13. IN ITA NO. 926/JP/2012 FOR A.Y. 1992-93, REVENU E HAS FILED APPEAL ON THE FOLLOWING GROUNDS: 1. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE DISALLOWANCE OF RS.4,97,261/- MADE ON A/C OF INTEREST U/S 43B AS MADE BY THE AO. I.T.A. NOS. 6/JP/2012 & 926/JP/2011 A.Y. 1991-92 & 92-93 (ACIT VS. M/S. KHAITAN CHEMICALS P.LTD.) PAGE 11 2. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE DISALLOWANCE OF RS.4,12,063/- MADE ON A/C OF CASH CREDITORS AS MADE BY THE AO. 3. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN RESTRICT ING THE ADDITION TO RS.25,000/- OUT OF RS. 50,000/- ON ACCOUNT OF PERSONNEL EXPENSES AS MADE BY THE AO. 4. THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN RESTRICT ING THE ADDITION TO RS. 15,000/- OUT OF RS.30,000/- ON ACCOUNT OF ADMINISTRATIVE EXPENSES AS MADE BY THE AO. 14. FIRST ISSUE IN REVENUES APPEAL FOR A.Y. 1992-9 3 IS WITH REGARDS TO DELETING THE DISALLOWANCE OF RS. 4,97,26 1/- MADE ON ACCOUNT OF INTEREST U/S. 43B. 14.1 MATTER WAS CARRIED BEFORE FIRST APPELLATE AUTH ORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED AND HAVING CONSIDERED THE SAME CIT(A) GRANTED RELIEF TO THE ASSESSEE. CI T(A) STATED THAT THIS GROUND OF APPEAL IS COVERED ISSUE BY VIRT UE OF THE ORDER OF HIS PREDECESSOR VIDE ORDER NUMBER 38/1993- 94 DATED 19.04.2004 PASSED AGAINST THE ORDER U/S 154 OF THE INCOME TAX ACT, 1961, WHEREBY THE DISALLOWANCE OF INTEREST OF RS.4,97,261/- WAS DELETED. BY FOLLOWING THE SAID O RDER HE DELETED ADDITION MADE ON THIS ACCOUNT. UNDER FACT AND CIRCUMSTANCE, ADDITION OF RS.4,97,261/- WAS RIGHTLY DELETED BY CIT(A). THIS REASONED FINDING OF CIT(A) NEEDS NO I NTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. I.T.A. NOS. 6/JP/2012 & 926/JP/2011 A.Y. 1991-92 & 92-93 (ACIT VS. M/S. KHAITAN CHEMICALS P.LTD.) PAGE 12 15. NEXT ISSUE IN REVENUES APPEAL IS WITH REGARDS TO DISALLOWANCE OF RS.4,12,063/- MADE ON ACCOUNT OF CA SH CREDITORS. ASSESSING OFFICER MADE ABOVE SAID ADDIT ION AS ACCORDING TO HIM CASH CREDITORS REMAINED UNEXPLAINE D. 15.1 MATTER WAS CARRIED BEFORE FIRST APPELLATE AUTH ORITY AND HAVING CONSIDERED THE SAME CIT(A) GRANTED RELIEF TO THE ASSESSEE. SAME HAS BEEN OPPOSED ON BEHALF OF LD. DEPARTMENTAL REPRESENTATIVE WHO SUBMITTED THAT CIT( A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.4,12,0 63/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT. ACCORDINGLY, O RDER OF CIT(A) BE SET ASIDE AND THAT OF ASSESSING OFFICER B E RESTORED. ON OTHER HAND, LD. AUTHORIZED REPRESENTATIVE SUPPOR TED THE ORDER OF CIT(A) ON THE ISSUE. 15.2 AFTER GOING THROUGH RIVAL SUBMISSION AND MAT ERIAL ON RECORD, WE FIND THAT STAND OF ASSESSEE HAS BEEN THA T IT RECEIVED CASH CREDIT FROM ITS CREDITORS AND GAVE COPY OF ACC OUNTS FOR FOLLOWING CASH CREDITORS WHO ARE DIRECTORS OF COMPA NY BUT HAVE BEEN DISALLOWED BY ASSESSING OFFICER. ACCORDI NG TO ASSESSEE, THE AMOUNTS HAVE BEEN ACCEPTED BY ASSESSE E COMPANY THROUGH ACCOUNT PAYEE CHEQUES AND CONFIRMAT ION IN THE FORM OF SIGNING OF BALANCE SHEET ARE BEING PROD UCED. THEREFORE, AMOUNT OF CASH CREDITS WERE REQUESTED TO DELETE MR. I. P. KHAITAN, DIRECTOR RS.55,063/- AND SMT. KIRAN KHAITAN, DIRECTOR RS. 1,42,000/- AND TRIVENI SERVICES LIMIT ED RS. 1,16,000/-. CIT(A) HAVING CONSIDERED THE SAME OBSE RVED THAT I.T.A. NOS. 6/JP/2012 & 926/JP/2011 A.Y. 1991-92 & 92-93 (ACIT VS. M/S. KHAITAN CHEMICALS P.LTD.) PAGE 13 IN REMAND REPORT ASSESSING OFFICER HAS STATED THAT IDENTITY, CREDITWORTHINESS AND GENUINENESS OF CASH CREDITORS WERE ESTABLISHED. CONSIDERING THESE SUBMISSIONS, ADDITI ON ON ACCOUNT OF CASH CREDITS OF THESE CASH CREDITORS WER E DELETED. THIS REASONED FACTUAL FINDING OF CIT(A) IN LIGHT OF REMAND REPORT, WHEREBY HE HAS GRANTED RELIEF TO ASSESSEE A S DISCUSSED ABOVE, NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPH OLD THE SAME. 16. NEXT ISSUE IN REVENUES APPEAL IS WITH REGARDS TO RESTRICTING THE ADDITION TO RS.25,000/- OUT OF RS. 50,000/- ON ACCOUNT OF PERSONAL EXPENSES. UNDER FACTS AND CIRC UMSTANCE, THIS REASONED FACTUAL FINDING, NEEDS NO INTERFERENC E FROM OUR SIDE. WE UPHOLD THE SAME. 17. NEXT ISSUE IN REVENUES APPEAL IS WITH REGARDS TO RESTRICTING THE ADDITION OF RS. 15,000/- OUT OF RS. 30,000/- ON ACCOUNT OF ADMINISTRATIVE EXPENSES. AGAIN THIS REAS ONED FACTUAL FINDING OF CIT(A), NEEDS NO INTERFERENCE FR OM OUR SIDE. WE UPHOLD THE SAME. 18. AS A RESULT, APPEAL OF REVENUE FOR A.Y. 1992-93 IS DISMISSED. 19. IN RESULT, BOTH APPEALS FILED BY REVENUE FOR BO TH YEARS ARE DISMISSED AS INDICATED ABOVE. I.T.A. NOS. 6/JP/2012 & 926/JP/2011 A.Y. 1991-92 & 92-93 (ACIT VS. M/S. KHAITAN CHEMICALS P.LTD.) PAGE 14 PRONOUNCED IN THE OPEN COURT ON THIS THE 28 TH DAY OF NOVEMBER, 2014. SD/- SD/- (B. C. MEENA) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R TRUE COPY S.K.SINHA COPY FORWARDED TO: 1. THE APPELLANT- ACIT, CIRCLE-2, ALWAR. 2. THE RESPONDENT- M/S KHAITAN CHEMICALS LTD. 3. THE CIT 4. CIT(APPEALS) 5. THE DR 6. GUARD FILE (ITA NOS. 6/JP/2012 & 926/JP/2011) BY ORDER A.R., JAIPUR.