THE ACIT, Visakhapatnam V. Ablish Synergetic Constructions and Export Pvt., Ltd.,., Visakhapatnam

ITA 636/VIZ/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8906 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 10-06-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 12-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Depreciation; Income from undisclosed sources; Peak credit; Additional evidence; Non-deduction of tax; Corroborative evidences
• Section: 143(3); 142(1); 133A; 194C; 148

Judgement Text

ITA NOS.626 TO 629 & 636 TO 639 /VIZAG/2014 ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LT D., VISAKHAPATNAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NOS.626 TO 629/VIZAG/2014 ( / ASSESSMENT YEARS: 2008-09 TO 2011-12) ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. VISAKHAPATNAM ACIT, CIRCLE - 5(1), VISAKHAPATNAM [PAN NO. AAFCA9 530M ] ( % / APPELLANT) ( &'% / RESPONDENT) ./I.T.A.NOS.636 TO 639/VIZAG/2014 ( / ASSESSMENT YEARS: 2008-09 TO 2011-12) ACIT, CIRCLE - 5(1), VISAKHAPATNAM ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. VISAKHAPATNAM ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI C. SUBRAHMANYAM, AR / RESPONDENT BY : SHRI M.N.MURTHY NAIK , DR / DATE OF HEARING : 20.04.2017 / DATE OF PRONOUNCEMENT : 28.04.2017 ITA NOS.626 TO 629 & 636 TO 639 /VIZAG/2014 ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LT D., VISAKHAPATNAM 2 / O R D E R PER BENCH: THESE CROSS APPEALS FILED BY THE ASSESSEE, AS WELL AS THE REVENUE ARE DIRECTED AGAINST COMMON ORDER PASSED BY THE CIT(A), VISAKHAPATNAM DATED 26.9.2014 AND IT PERTAINS TO TH E ASSESSMENT YEARS 2008-09 TO 2011-12. SINCE, THE FACTS ARE IDENTICAL AND ISSUES ARE COMMON, THEY ARE CLUBBED, HEARD TOGETHER AND DISPOS ED-OFF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A COMPANY, WHICH IS ENGAGED IN THE BUSINESS OF CONSTRUCTION OF FLATS. A SURVEY U/S 133A OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLE D AS THE ACT) WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 24.10. 2011 AND IT WAS REVEALED THAT THE ASSESSEE HAS NOT FILED ITS RETURN OF INCOME FROM ASSESSMENT YEAR 2008-09 ONWARDS. THE A.O. ISSUED N OTICE U/S 148 FOR THE ASSESSMENT YEAR 2008-09 TO 2011-12, REQUIRING T HE ASSESSEE TO FILE RETURN OF INCOME. IN RESPONSE TO NOTICE, THE ASSES SEE HAS FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09 TO 2011-1 2 ON 19.3.2012. THE CASES HAVE BEEN SELECTED FOR SCRUTINY AND ACCOR DINGLY NOTICE U/S 143(2) & 142(1) OF THE ACT WERE ISSUED. IN RESPONS E TO NOTICES, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED FROM TIME TO TIME ITA NOS.626 TO 629 & 636 TO 639 /VIZAG/2014 ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LT D., VISAKHAPATNAM 3 AND FURNISHED THE DETAILS CALLED FOR. THE ASSESSME NT HAS BEEN COMPLETED U/S 143(3) R.W.S. 147 OF THE ACT, ON 25.3 .2013 BY MAKING CERTAIN DISALLOWANCES TOWARDS EXPENDITURE AND OTHER ADDITIONS. 3. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). THE ASSESSEE HAS CHALLEN GED ALL THE ADDITIONS MADE BY THE A.O. THE ASSESSEE HAS FILED ELABORATE WRITTEN SUBMISSIONS AND ARGUED THAT THE A.O. WAS ERRED IN DISALLOWING C ERTAIN EXPENDITURE ON THE GROUND THAT THE ASSESSEE HAS FAILED TO PRODUCE BILLS AND VOUCHERS, DESPITE THE FACT THAT THE ASSESSEE HAS FURNISHED BO OKS OF ACCOUNTS AND OTHER BILLS AND VOUCHERS ALONG WITH LEDGER EXTRACT TO PROVE THE GENUINENESS OF EXPENDITURE. THE CIT(A) AFTER CONSI DERING THE RELEVANT EXPLANATIONS OF THE ASSESSEE PARTLY ALLOWED APPEAL FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-09 TO 2011-12 AND ALLO WED RELIEF TOWARDS DISALLOWANCE OF CERTAIN EXPENDITURE AND SET ASIDE T HE ISSUE TO THE FILE OF THE A.O. FOR VERIFICATION OF EXPENDITURE. HOWEVER, CONFIRMED ADDITIONS TOWARDS DISALLOWANCE OF DONATIONS, DISALLOWANCE OF SALES TAX, DISALLOWANCE OF PAYMENT TO AUDITORS U/S 40(A)(IA) O F THE ACT, DISALLOWANCE OF OFFICE RENT, DISALLOWANCE OF SERVIC E TAX AND HOUSE TAX, DISALLOWANCE OF SUB CONTRACT PAYMENT, DISALLOWANCE OF UNEXPLAINED CASH CREDITS, DISALLOWANCE OF BONUS, DISALLOWANCE OF PUR CHASES, DISALLOWANCE OF INTEREST CLAIMED ON VEHICLE LOAN AND DEPRECIATIO N ON VEHICLE, ITA NOS.626 TO 629 & 636 TO 639 /VIZAG/2014 ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LT D., VISAKHAPATNAM 4 DISALLOWANCE OF ADVERTISEMENT AND ARCHITECT FEE, DI SALLOWANCE OF SITE EXPENSES AND ADDITIONS TOWARDS NEGATIVE CASH BALANC E IN CASH BOOK. AGGRIEVED BY THE CIT(A) ORDER, THE ASSESSEE AS WELL AS THE REVENUE ARE IN APPEAL BEFORE US. 4. THE ASSESSEE HAS RAISED COMMON GROUNDS OF APPEAL FOR ALL THE FOUR ASSESSMENT YEARS. FROM THESE GROUNDS OF APPEA LS, THE ASSESSEE HAS AGITATED THE FOLLOWING ISSUES. I) DISALLOWANCE OF VARIOUS EXPENDITURES FOR WANT OF BILLS AND VOUCHERS. II) DISALLOWANCE OF PAYMENT TO AUDITORS U/S 40(A)(I A) OF THE ACT FOR FAILURE TO DEDUCT TAX AT SOURCE. III) DISALLOWANCE OF DEPRECIATION AND INTEREST ON RITZ CAR LOAN. IV) DISALLOWANCE OF SITE EXPENSES V) ADDITIONS TOWARDS NEGATIVE CASH BALANCE. 5. THE REVENUE HAS RAISED COMMON GROUNDS OF APPEAL FOR ALL THE 4 YEARS. FROM THESE GROUNDS, THE REVENUE HAS CHALLEN GED DELETIONS MADE BY THE CIT(A) TOWARDS CERTAIN EXPENDITURES ON THE B ASIS OF EVIDENCES/VOUCHERS PRODUCED BY THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDINGS, WITHOUT CALLING FOR ANY REMA ND REPORT FROM THE A.O. FOR ADMISSION OF ADDITIONAL EVIDENCES SUBMITTE D BY THE ASSESSEE. 6. THE FIRST ISSUE THAT CAME UP FOR OUR CONSIDERATI ON IS ADDITIONS TOWARDS LABOUR CHARGES, CONVEYANCE AND TRAVELLING E XPENSES, SALES COMMISSION AND BUSINESS PROMOTION EXPENDITURE. THE A.O. HAS MADE ADDITIONS TOWARDS VARIOUS EXPENDITURES ON THE GROUN D THAT THE ASSESSEE ITA NOS.626 TO 629 & 636 TO 639 /VIZAG/2014 ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LT D., VISAKHAPATNAM 5 HAS FAILED TO FURNISH SUPPORTING BILLS AND VOUCHERS IN RESPECT OF LABOUR CHARGES, CONVEYANCE AND TRAVELLING EXPENSES, SALES COMMISSION AND BUSINESS PROMOTION EXPENSES. THE A.O. FURTHER OBSE RVED THAT THE ASSESSEE HAS FAILED TO DEDUCT TDS IN RESPECT OF SAL ES COMMISSION, EVEN THOUGH THE COMMISSION PAYMENT EXCEEDS THE PRESCRIBE D LIMIT PROVIDED U/S 194H OF THE ACT, FOR DEDUCTION OF TAX AT SOURCE . THE A.O. FURTHER OBSERVED THAT THE ASSESSEE HAS PRODUCED ONLY LEDGER EXTRACT COPIES OF VARIOUS EXPENDITURE, HOWEVER, FAILED TO SUBSTANTIAT E THE EXPENDITURE WITH BILLS AND VOUCHERS. THE ASSESSEE ALSO FAILED TO PRODUCE WAGE REGISTER/MUSTER ROLL FOR LABOUR CHARGES TO PROVE TH E GENUINENESS OF EXPENDITURE. THEREFORE, OPINED THAT THE ASSESSEE F AILED TO PROVE THE EXPENDITURE WITH NECESSARY EVIDENCES AND HENCE, MAD E DISALLOWANCE OF 1/5 TH OF LABOUR CHARGE PAYMENTS FOR THE ASSESSMENT YEAR 2008-09 TO 2011-12. IN SO FAR AS CONVEYANCE AND TRAVELLING CH ARGES, SALES COMMISSION AND BUSINESS PROMOTION EXPENDITURE, THE A.O. OBSERVED THAT THE ASSESSEE FAILED TO PRODUCE COMPLETE DETAILS OF EXPENDITURE WITH NECESSARY SUPPORTING EVIDENCES. THEREFORE, MADE AD HOC DISALLOWANCE OF EXPENDITURE UNDER THE HEAD CONVEYANCE AND TRAVE LLING CHARGES, SALES COMMISSION AND BUSINESS PROMOTION EXPENSES. 7. IT IS THE CONTENTION OF THE ASSESSEE THAT IT HAS PRODUCED BILLS AND VOUCHERS IN SUPPORT OF ALL EXPENSES BEFORE THE A.O. THE ASSESSEE ITA NOS.626 TO 629 & 636 TO 639 /VIZAG/2014 ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LT D., VISAKHAPATNAM 6 FURTHER CONTENDED THAT THE A.O. HAS DISALLOWED THE EXPENDITURE FOR WANT OF PROPER SUPPORTING DOCUMENTS INCLUDING WAGE REGIS TER/MUSTER ROLL FOR LABOUR CHARGES, BUT THE FACT REMAINS THAT THE ASSES SEE HAS PAID LABOUR CHARGES TO THE MAESTRIES APPOINTED FOR THIS PURPOSE , IN TURN THEY HAVE DISTRIBUTED TO THE LABOURERS ON DAILY BASIS, THEREF ORE, THE ASSESSEE HAS NOT MAINTAINED ANY WAGE REGISTER/MUST ROLL. IN SO FAR AS DISALLOWANCE OF VEHICLE MAINTENANCE EXPENSES AND BUSINESS PROMOTION , THESE EXPENDITURES ARE INCURRED ON DAY TO DAY BUSINESS FO R MAINTENANCE OF VEHICLES OWNED BY THE COMPANY FOR WHICH THE ASSESSE E HAS FURNISHED BILLS AND VOUCHERS TO PROVE THE GENUINENESS OF EXPE NDITURE. SIMILARLY, THE ASSESSEE HAS PAID COMMISSION FOR WHICH IT HAS P RODUCED NECESSARY SUPPORTING BILLS. THE A.O. IGNORING ALL EVIDENCES FILED BY THE ASSESSEE, DISALLOWED EXPENDITURE ON SUSPICIOUS AND SURMISES B ASIS. 8. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE A.O. DISALLOWED CERTAIN EXPENDITURE ON THE GROUND T HAT THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF EXPENDITURE BY F ILING NECESSARY SUPPORTING BILLS AND VOUCHERS. THE A.O. HAS GIVEN HIS OWN REASONS FOR DISALLOWANCE OF EXPENDITURE. ACCORDING TO THE A.O. , THE ASSESSEE DID NOT FURNISH ANY EVIDENCES TO JUSTIFY THE EXPENDITUR E. THOUGH, THE ASSESSEE CLAIMS TO HAVE FURNISHED EVIDENCES IN SUPP ORT OF EXPENDITURE, ITA NOS.626 TO 629 & 636 TO 639 /VIZAG/2014 ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LT D., VISAKHAPATNAM 7 FAILED TO PROVE WITH NECESSARY EVIDENCES. WE FIND M ERITS IN THE FINDINGS OF THE A.O. FOR THE REASON THAT THE ASSESSEE HAS FI LED LEDGER EXTRACT OF EXPENDITURE WITHOUT THERE BEING ANY SUPPORTING BILL S AND VOUCHERS. MERE PRODUCTION OF LEDGER EXTRACT WITHOUT SUPPORTIN G BILLS AND VOUCHERS WOULD NOT ABSOLVE THE ASSESSEE FROM PROVING THE GEN UINENESS OF EXPENDITURE. WE FURTHER OBSERVED THAT EVEN BEFORE THE CIT(A), THE ASSESSEE FURNISHED ONLY LEDGER EXTRACT OF EXPENDITU RE WITHOUT THERE BEING ANY EVIDENCES TO JUSTIFY THE EXPENDITURE. IN THE ABSENCE OF NECESSARY BILLS AND VOUCHERS, THE CIT(A) HAS GIVEN PARTIAL RELIEF TO THE EXPENDITURE, WHEREVER THE ASSESSEE HAS FURNISHED BI LLS AND VOUCHERS. IN SO FAR AS REMAINING EXPENDITURE, THE CIT(A) HAS SET ASIDE THE ISSUE TO THE FILE OF THE A.O. AND DIRECTED THE A.O. TO EXAMI NE THE CLAIM OF THE ASSESSEE WITH REFERENCE TO BILLS AND VOUCHERS, IN C ASE EXPENDITURE IS NOT SUPPORTED BY PROPER BILLS AND VOUCHERS, DIRECTED TH E A.O. TO DISALLOW THE SAME. THE FACTS REMAIN SAME. THE ASSESSEE FAILS T O BRING ON RECORDS ANY EVIDENCES TO PROVE THE FINDINGS OF FACT RECORDE D BY THE CIT(A) IS INCORRECT. WE FURTHER OBSERVED THAT EXCEPT STATING THAT THE RECORDS FOR THE IMPUGNED ASSESSMENT YEARS HAS BEEN DESTROYED DU RING HUDH HUDH CYCLONE, THE ASSESSEE HAS FAILED TO FURNISH ANY COG ENT REASONS FOR NOT FURNISHING RELEVANT BILLS AND VOUCHERS BEFORE THE L OWER AUTHORITIES. THEREFORE, WE ARE OF THE VIEW THAT THE CIT(A) HAS R IGHTLY SET ASIDE THE ITA NOS.626 TO 629 & 636 TO 639 /VIZAG/2014 ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LT D., VISAKHAPATNAM 8 ISSUE TO THE FILE OF THE A.O. FOR VERIFICATION OF E XPENDITURE. HENCE, WE UPHOLD THE FINDINGS OF THE CIT(A) WITH REGARD TO TH E DISALLOWANCE OF LABOUR CHARGES, CONVEYANCE AND TRAVELLING EXPENSES, SALES COMMISSION AND BUSINESS PROMOTION EXPENSES. 9. THE ASSESSEE HAS MADE AN ALTERNATIVE PLEA TO THE EFFECT THAT IN RESPECT OF LABOUR CHARGES, THE CIT(A) HAS CONFIRMED ADDITIONS OF RS.4,25,000/- WHICH WAS DISALLOWED BY THE A.O. U/S 40(A)(IA) OF THE ACT, FOR FAILURE TO DEDUCT TDS U/S 194C OF THE ACT. THE ASSESSEE FURTHER STATED THAT THE EXPENDITURE INCURRED TOWARDS PAYMEN T OF SUB CONTRACTORS HAS BEEN PAID WITHIN THE END OF THE FINANCIAL YEAR, THEREFORE, IN VIEW OF THE SPECIAL BENCH DECISION OF ITAT, VISAKHAPATNAM I N THE CASE OF MERYLIN SHIPPING & TRANSPORTERS, VS. ACIT, NO DISAL LOWANCE CAN BE MADE, IF EXPENDITURE IS PAID ON OR BEFORE 31 ST MARCH OF THE FINANCIAL YEAR. THE ASSESSEE HAS MADE A SIMILAR ARGUMENT IN CASE OF SALES COMMISSION. THE ASSESSEE FURTHER CONTENDED THAT OU T OF TOTAL DISALLOWANCE OF SALES COMMISSION, A SUM OF RS.8.6 L AKHS WAS DISALLOWED U/S 40(A)(IA) OF THE ACT FOR FAILURE TO DEDUCT TDS. SINCE, THE COMMISSION HAS BEEN PAID ON OR BEFORE 31 ST MARCH OF THE RELEVANT ASSESSMENT YEAR, IN VIEW OF THE SPECIAL BENCH DECISION OF ITAT, VISA KHAPATNAM IN THE CASE OF MERYLIN SHIPPING AND TRANSPORTERS, NO DISALLOWAN CE CAN BE DONE IF THE EXPENDITURE HAS BEEN PAID WITHIN THE END OF THE FIN ANCIAL YEAR. THOUGH, ITA NOS.626 TO 629 & 636 TO 639 /VIZAG/2014 ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LT D., VISAKHAPATNAM 9 THE ASSESSEE HAS MADE A CLAIM WITH REGARD TO THE PA ID AND PAYABLE FAILED TO FURNISH NECESSARY EVIDENCES TO JUSTIFY IT S CASE. THEREFORE, WE ARE OF THE VIEW THE ISSUE NEEDS TO BE EXAMINED WITH REFERENCE TO PAID AND PAYABLE. IF, THE IMPUGNED EXPENDITURE HAS BEEN PAID ON OR BEFORE 31 ST MARCH OF RELEVANT PREVIOUS YEAR, THEN THE A.O. IS DIRECTED TO DELETE ADDITIONS MADE TOWARDS DISALLOWANCE OF LABOUR CHARG ES AND SALES COMMISSION U/S 40(A)(IA) OF THE ACT FOR FAILURE TO DEDUCT TDS. 10. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATI ON IS DISALLOWANCE OF PAYMENT TO AUDITORS U/S 40(A)(IA) OF THE ACT FOR FAILURE TO DEDUCT TDS. DURING THE COURSE OF HEARING, THE LD. A.R. FOR THE ASSESSEE SUBMITTED THAT HE DID NOT PRESS THE GROUND CHALLENGING THE AD DITION TOWARDS PAYMENT TO AUDITORS FOR THE ASSESSMENT YEAR 2008-09 TO 2011-12. THEREFORE, THE GROUND RAISED BY THE ASSESSEE, CHALL ENGING THE DISALLOWANCE OF PAYMENT TO AUDITORS HAS BEEN DISMIS SED AS NOT PRESSED FOR ALL THE ASSESSMENT YEARS. 11. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATI ON FOR ASSESSMENT YEAR 2011-12 IS ADDITION TOWARDS SITE EXPENSES AND ADVERTISEMENT AND ARCHITECT FEES. THE LD. A.R. FOR THE ASSESSEE, DUR ING THE COURSE OF HEARING, SUBMITTED THAT HE DID NOT PRESS THE GROUND CHALLENGING THE ADDITIONS TOWARDS SITE EXPENSES, ADVERTISEMENT AND ARCHITECT FEES. ITA NOS.626 TO 629 & 636 TO 639 /VIZAG/2014 ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LT D., VISAKHAPATNAM 10 THEREFORE, THE GROUND RAISED BY THE ASSESSEE, CHALL ENGING THESE TWO ADDITIONS HAS BEEN DISMISSED AS NOT PRESSED. 12. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATI ON IS DISALLOWANCE OF DEPRECIATION OF RITZ CAR AND INTEREST ON RITZ CA R LOAN. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. NOTICED THAT THE ASSESSEE CLAIMED INTEREST PAID ON VEHICLE LOAN AND DEPRECIAT ION ON RITZ CAR, HOWEVER, THE SAID VEHICLE HAS BEEN OWNED BY ONE OF THE DIRECTOR OF THE COMPANY BUT NOT THE ASSESSEE. THE ASSESSEE CONTEND ED THAT THOUGH THE VEHICLE IS IN THE NAME OF THE DIRECTOR OF THE C OMPANY, IT HAS BEEN USED IN THE BUSINESS OF THE ASSESSEE, THEREFORE, TH E ASSESSEE IS ELIGIBLE FOR DEPRECIATION AND INTEREST ON VEHICLE LOAN. IN SUPPORT OF HIS ARGUMENTS FILED NECESSARY EVIDENCES IN THE FORM OF BOARD RESOLUTION PASSED BY THE COMPANY, EVIDENCING AUTHORIZING THE D IRECTORS TO BUY THE VEHICLE IN THEIR PERSONAL NAME. 13. HAVING HEARD BOTH THE SIDES AND CONSIDERED MATE RIALS ON RECORD, WE FIND THAT THE ASSESSEE HAS CLAIMED DEPRECIATION ON VEHICLES, WHICH WAS OWNED BY ONE OF THE DIRECTOR OF THE COMPANY BUT NOT THE ASSESSEE. THOUGH THE ACT DOES NOT PRESCRIBE OWNERSHIP OF ASSE T IN THE NAME OF THE ASSESSEE FOR CLAIMING DEPRECIATION, ASSESSEE FA ILED TO PROVE THE USE OF SUCH VEHICLE IN THE BUSINESS OF THE ASSESSEE. T HEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEE FAILED TO PROVE THE USE OF VEHICLE IN THE ITA NOS.626 TO 629 & 636 TO 639 /VIZAG/2014 ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LT D., VISAKHAPATNAM 11 BUSINESS OF THE ASSESSEE, WHICH IS MANDATORY FOR CL AIMING DEPRECIATION ON ANY ASSETS. SIMILARLY, IN RESPECT OF INTEREST O N VEHICLE LOAN, FOR THE SIMILAR REASONS, THE A.O. HAS DISALLOWED INTEREST P AID ON VEHICLE LOAN. SINCE, WE HAVE ALREADY HOLD THAT THE ASSESSEE HAS F AILED TO PROVE THE USE OF VEHICLE IN THE BUSINESS OF THE ASSESSEE, WE ARE OF THE VIEW THAT FOR THE SIMILAR REASONS, THE ASSESSEE IS NOT ELIGIB LE FOR DEDUCTIONS TOWARDS INTEREST PAID ON VEHICLE LOAN. THEREFORE, WE UPHOLD THE ADDITION MADE BY THE A.O. TOWARDS DISALLOWANCE OF DEPRECIATI ON ON RITZ CAR AND INTEREST ON RITZ CAR LOAN. 14. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATI ON IS ADDITION TOWARDS NEGATIVE CASH BALANCE IN THE CASH BOOK FOR THE ASSESSMENT YEAR 2011-12. THE A.O. NOTED THAT DURING THE SURVEY OPE RATION, A NEGATIVE CASH BALANCE OF RS.33,55,093/- WAS FOUND FOR WHICH THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCES. THEREFORE, THE A.O. TO OK THE VIEW THAT THE ASSESSEE HAS MADE EXPENDITURE WITHOUT HAVING SUFFIC IENT SOURCE IN THE BOOKS AND WHICH SHOWS THAT THE EXPENSES WERE INCURR ED OUT OF HIS UNACCOUNTED INCOME AND HENCE, MADE IMPUGNED ADDITIO NS OF RS.33,55,093/-. IT IS THE CONTENTION OF THE ASSESS EE THAT AT THE TIME OF SURVEY, THE CASH BOOK WAS NOT UPDATED. THE ASSESSE E FURTHER CONTENDED THAT CERTAIN RECEIPTS FROM THE CUSTOMERS WAS NOT TAKEN INTO ACCOUNT, THEREFORE, THE CASH BOOKS SHOWS A NEGATIVE CASH BALANCE, ITA NOS.626 TO 629 & 636 TO 639 /VIZAG/2014 ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LT D., VISAKHAPATNAM 12 HOWEVER, THE SAME HAS BEEN RECTIFIED BY INCORPORATI NG RECEIPTS FROM CUSTOMERS. THE ASSESSEE ALSO MADE AN ALTERNATIVE P LEA THAT IF AT ALL, ADDITION IS WARRANTED, THE A.O. OUGHT TO HAVE MADE ADDITIONS TOWARDS PEAK CREDIT INSTEAD HE HAS MADE ADDITION TOWARDS SU M OF NEGATIVE CASH BALANCE ON VARIOUS DATES, WHICH IS NOT CORRECT. 15. HAVING HEARD BOTH THE SIDES AND CONSIDERED MATE RIAL ON RECORD, WE FIND THAT THE A.O. HAS MADE ADDITIONS OF RS.33,5 3,093/- TOWARDS NEGATIVE CASH BALANCE IN CASH BOOK FOR WHICH THE AS SESSEE HAS FAILED TO OFFER ANY EXPLANATIONS. THOUGH THE ASSESSEE CLAIMS THAT CERTAIN RECEIPT FROM CUSTOMERS WERE NOT INCORPORATED IN THE CASH BO OK, WHICH RESULTS NEGATIVE CASH BALANCE ON VARIOUS DATES, FAILED TO R ECONCILE THE NEGATIVE CASH BALANCES WITH VARIOUS RECEIPTS INCORPORATED IN THE CASH BOOK. THEREFORE, WE ARE OF THE VIEW THAT THE A.O. WAS RIG HT IN MAKING ADDITIONS TOWARDS NEGATIVE CASH BALANCE IN CASH BOO K. HOWEVER WHILE MAKING ADDITIONS TOWARDS NEGATIVE CASH BALANCE, IT IS OBVIOUS THAT ONCE ADDITION IS MADE TOWARDS PEAK CREDIT, WHICH TAKE CA RES OTHER NEGATIVE CASH BALANCES APPEARS ON REMAINING DATES. IN THIS CASE, THE ASSESSEE HAS FILED A CHART SHOWING NEGATIVE CASH BALANCES ON VARIOUS DATES. ON PERUSAL OF THE CHART FILED BY THE ASSESSEE, WE FIND THAT THE HIGHEST NEGATIVE CASH BALANCE APPEARED ON 13 TH AUGUST, 2010. ONCE THE PEAK NEGATIVE CASH BALANCE AS ON 13.8.2010 IS TREATED AS UNEXPLAINED INCOME ITA NOS.626 TO 629 & 636 TO 639 /VIZAG/2014 ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LT D., VISAKHAPATNAM 13 OF THE ASSESSEE, THEN IT WILL TAKE CARE SUBSEQUENT NEGATIVE CASH BALANCES. THEREFORE, WE ARE OF THE VIEW THAT THE A .O. WAS ERRED IN MAKING ADDITIONS TOWARDS ALL THE NEGATIVE CASH BALA NCES APPEARED ON VARIOUS DATES. ACCORDINGLY, WE DIRECT THE A.O. TO ARRIVE AT PEAK NEGATIVE CASH BALANCE FOR THE PURPOSE OF ADDITION TOWARDS NE GATIVE CASH BALANCE IN CASH BOOK. THEREFORE, WE SET ASIDE THE ISSUE TO THE FILE OF THE A.O. AND DIRECT THE A.O. TO VERIFY THE DETAILS FILED BY THE ASSESSEE TO ARRIVE AT PEAK NEGATIVE CASH BALANCE FOR THE PURPOSE OF ADDIT ION. 16. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE E IN ITA NOS.626 TO 629/VIZAG/2014 FOR THE ASSESSMENT YEARS 2008-09 TO 2011-12 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES AND APPEALS FILED BY THE REVENUE IN ITA NOS.636 TO 639/VIZAG/2014 FOR THE ASSESSMENT YEARS 2008-09 TO 2011- 12 ARE DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT O N 28 TH APR17. SD/- SD/- ( . ) ( . ) (V. DURGA RAO) (G. MANJUNATHA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 28.04.2017 VG/SPS ITA NOS.626 TO 629 & 636 TO 639 /VIZAG/2014 ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LT D., VISAKHAPATNAM 14 )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT ABHILASH SYNERGETIC CONSTRUCTION S & EXPORTS PVT. LTD., C/O SRI C. SUBRAHMANYAM, CHARTERED ACCOUNTANT, VISA KHAPATNAM 2. / THE APPELLANT THE ACIT CIRCLE-1(1), VISAKHAPAT NAM 3. / THE RESPONDENT THE ACIT, CIRCLE-5(1), VISAHAPA TNAM 3. + / THE CIT-1, VISAKHAPATNAM 4. + ( ) / THE CIT (A), VISAKHAPATNAM 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY //