SHRI NARESH KUMAR LUHADIA, JAIPUR V. DEPUTY COMMISSIONER OF INCOME TAX , JAIPUR

ITA 64/JPR/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6261 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 18-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKWY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 64/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2012-13 SH. NARESH KUMAR LUHADIA, PROP. KISSAN PASHU AAHAR UDYOG, F-17-18, RIICO INDUSTRIAL AREA, DADU, JAIPUR. CUKE VS. THE DCIT, CIRCLE-7, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABJPL 9768 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI VIKASH JAIN (CA) JKTLO DH VKSJ LS @ REVENUE BY : SMT. J.C. KULHARI (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 18/06/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 25/06/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A)-3, JAIPUR DATED 13.11.2017 FOR ASSESSMENT YE AR 2012-13 WHEREIN THE FOLLOWING GROUNDS OF APPEAL HAVE BEEN T AKEN: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND LAW, THE COMMISSIONER OF INCOME TAX(APPEALS)-3, ERRED IN CONFIRMING 10% DISALLOWANCE FROM TRAVELLING EXPENSES AND CONVE YANCE EXPENSES (I.E. 10% OF 751121/- AND 10% OF 104856/-) AND THERE ITA NO. 64 /JP/2018 SHRI NARESH KUMAR LUHADIA VS. DCIT 2 BY CONFIRMING ADDITION OF RS. 85598/- TO THE TOTAL INCOME OF THE ASSESSEE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND LAW, THE COMMISSIONER OF INCOME TAX(APPEALS)-3, ERRED IN CON FIRMING 10% DISALLOWANCE FROM MACHINERY REPAIR EXPENSES (I. E. 10% OF RS. 12,92,284/- AND THEREBY CONFIRMING ADDITION OF RS. 1,29,228/- TO THE TOTAL INCOME OF THE ASSESSEE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND LAW THE COMMISSIONER OF INCOME TAX(APPEALS)-3, ERRED IN ASSESSING THE TOTAL INCOME AT RS. 75,67,036/- AS AGAINST RETU RNED TOTAL INCOME OF RS. 73,52,210/- DECLARED BY THE ASSESSEE. 2. REGARDING GROUND NO. 1, BRIEFLY STATED, THE FACT S OF CASE ARE THAT THE ASSESSEE HAS DEBITED RS. 7,51,121/- AND RS. 1,0 4,856/- TO THE PROFIT AND LOSS ON ACCOUNT OF TRAVELLING EXPENSES AND CONV EYANCE EXPENSES. AS PER THE ASSESSING OFFICER, ON EXAMINATION, IT WA S FOUND THAT THESE EXPENSES WERE SUPPORTED BY INTERNAL MADE VOUCHERS. ON BEING ASKED, THE ASSESSEE SUBMITTED THAT HE HAS FORMULATED A POL ICY FOR TRAVELLING EXPENSES DONE BY THE EMPLOYEES, WHEREBY SALES PERSO NAL ARE REIMBURSED FIXED AMOUNT TOWARDS THEIR FOOD, STAY CH ARGES ETC. AT VARIOUS PLACES. THE ASSESSEE'S REPLY WAS HOWEVER, F OUND VERY GENERIC IN NATURE AND WAS NOT ACCEPTED BY THE AO. HE, THEREAF TER, DISALLOWED 20% OF TRAVELLING EXPENSES (I.E. 20% OF 7,51,121) A ND 20% OF CONVEYANCE EXPENSES (20% OUT OF 1,04,856/) AND ADDE D THE SAME IN DETERMINING TOTAL INCOME IN HANDS OF THE ASSESSEE. ITA NO. 64 /JP/2018 SHRI NARESH KUMAR LUHADIA VS. DCIT 3 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS REDUCED THE DISALLAWANCE TO 10% AND HIS FINDINGS ARE AS UNDER: 4.3 I HAVE CAREFULLY CONSIDERED THE MATERIAL BEFO RE ME. I FIND THAT THE ASSESSING OFFICER MADE THE DISALLOWANCES MAKING OBS ERVATION THAT TRAVELLING AND CONVEYANCE EXPENSES WERE SUPPORTED B Y INTERNAL MADE VOUCHERS. THE A/R OF THE APPELLANT SUBMITTED THAT T HE ASSESSING OFFICER DID NOT POINT OUT ANY SPECIFIC DEFECTS. FURTHER, TH E AR COMPARES THE N P RATE WITH LAST YEAR. THE NP RATE IN THIS YEAR IS 3. 83% AS COMPARE TO THE LAST YEAR NP RATE 3.68% WHICH IS HIGHER. HE ALSO RE LIED UPON THE LD. CIT(A) ORDER FOR A. Y. 2009-10. I PERUSED THE RECOR D I FIND THAT THE A/R OF THE APPELLANT DO NOT MADE ANY SUBMISSION THAT TH E TRAVELLING EXPENSES AND CONVEYANCE EXPENSES ARE SUPPORTED SELF MADE VOU CHER. THEREFORE IT IS ESTABLISHED THAT THESE EXPENSES AR E NOT FULLY VOUCHED. THE ASSESSING OFFICER DISALLOWED 20% OF TR AVELLING EXPENSES AND CONVEYANCE EXPENSES WHICH IS EXCESSIVE AND UNRE ASONABLE. THEREFORE, CONSIDERING THE FACTS OF THE CASE, NATUR E OF THESE EXPENSES I RESTRICT THE DISALLOWANCE @10%. THUS THE DISALLOWAN CE COMES OF RS. 85,598/-. ACCORDINGLY, I CONFIRM THE ADDITION OF RS . 85,598/- AND BALANCE AMOUNT OF RS. 85,598/- IS DELETED. THIS GRO UND IS PARTLY ALLOWED. 4. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT DUE TO THE SALES PERSON TRAVELLING FROM ONE VILLAGE TO ANOTHER VILLAGE AND TO CONVINCE THE FARMERS AS WELL AS DEALERS ABOUT THE CATTLE FEE D PRODUCED BY THE FIRM, THEY REMAIN IN THE FIELD TRAVELLING FOR 15-30 DAYS ALTOGETHER. THE ASSESSEE HAS INCURRED A SUM OF RS. 7,51,121/- ON TH E TRAVELLING AND RS. ITA NO. 64 /JP/2018 SHRI NARESH KUMAR LUHADIA VS. DCIT 4 1,04,856/- ON THE CONVEYANCE OF THESE SALES PERSONN EL DURING THE YEAR 2011-12. DUE TO THEIR EFFORTS, THE FIRM HAS MANAGED TO INCREASE THE TURNOVER WHICH HAS INCREASED FROM RS. 20,35,06,246. 40 IN F. Y. 2010-11 TO RS. 29,23,13,649.23 IN THE F.Y. 2011-12. THIS SH OWS THAT AROUND 44% SALES HAVE INCREASED DUE TO THE EFFORTS OF SALES PE RSONNEL. FURTHER, CONVEYANCE EXPENSES ARE PAID TO THE EMPLOYEES FOR T HEIR LOCAL CONVEYANCE CHARGES FOR EXECUTING THE WORK OF OUR OR GANIZATION, WHICH IS CREDITED TO THEM AT THE END OF THE MONTH ALONG WITH SALARY SCHEDULE. 5. IT WAS FURTHER SUBMITTED THAT AS THE SALES PERSO N HAS TO TRAVEL FROM SMALL VILLAGE TO TOWNS WHERE THEY ARE NOT ABLE TO GET BILLS, IN ALL CASES, FOR THEIR EXPENDITURE, HENCE THE ASSESSEE HA S FORMULATED A POLICY WHEREBY THE SALES PERSONNEL ARE BEING REIMBURSED BY FIXED AMOUNT TOWARDS THEIR BOARDING AND LODGING CHARGES AS WELL AS TRAVELLING CHARGES AND THE PAYMENT ARE BEING MADE ACCORDING TO THE POL ICY FRAMED BY THE FIRM. BECAUSE IT IS NOT POSSIBLE FOR THE FIRM TO KE EP TRACK OF SMALL PAYMENTS LIKE AUTO CHARGES, FOOD CHARGES, BREAKFAST CHARGES, STAY CHARGES, COMMUTING CHARGES OF THE SALES PERSONNEL. THE ASSESSEE IS IN CATTLE FEED INDUSTRY FROM THE LAST SO MANY YEARS AN D ON THE BASIS OF EXPERIENCE GAINED IN THE CATTLE FEED INDUSTRY, THE ASSESSEE HAS FORMULATED PAYMENT PLAN, WHICH IS COMPETITIVE WITH BEST INDUSTRY PRACTICES, WHEREBY THE EMPLOYEE ARE PAID FIXED AMOU NT TOWARDS THEIR BOARDING AND LODGING EXPENSES AND TRAVELLING EXPENS ES. THE ASSESSEE IS MAINTAINING FULL DETAILS OF THE EMPLOYEE'S VISITS A ND PAYMENT MADE TO THEM TOWARDS THESE EXPENSES, AS THE AMOUNT OF SUCH EXPENSES HAS BEEN FIXED BY THE FIRM, MOST OF VOUCHERS IN THIS CA TEGORY ARE AUTHENTICATED BY THE PROPRIETOR TO JUSTIFY THE PAYM ENT MADE ON THIS ITA NO. 64 /JP/2018 SHRI NARESH KUMAR LUHADIA VS. DCIT 5 ACCOUNT. HENCE, ANY DISALLOWANCE OUT OF TRAVELLING EXPENSES AND CONVEYANCE EXPENSES, WILL BE INJUSTICE. FURTHER, CO NVEYANCE EXPENSES ARE PAID TO EMPLOYEES ALONG WITH SALARY. 6. IT WAS SUBMITTED THAT FROM THE ABOVE, IT IS CLEA R THAT FULL PICTURE OF HOW TRAVELLING EXPENSES AND CONVEYANCE EXPENSES ARE BEING INCURRED BY THE ASSESSEE FIRM WAS BROUGHT TO THE NOTICE OF T HE LD. A.O. IN WRITING, BUT THE LD. AO INSTEAD OF APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE, JUST MADE SIMPLE OBSERVA TION THAT THE ASSESSEE'S REPLY IS VERY GENERAL IN NATURE AND IS N OT ACCEPTABLE. THE LD. AO HAS HIMSELF MADE THE ADDITION FOR THE SAKE OF MA KING ADDITION AND HAS FAILED TO POINT OUT ANY SPECIFIC DEFECT, SHORTC OMING OR ANYTHING NEGATIVE WITH REGARD TO EXPENSES INCURRED BY THE AS SESSEE ON ACCOUNT OF TRAVELLING AND CONVEYANCE EXPENSES, WHICH ARE IN CURRED BY THE EMPLOYEES OF THE FIRM FOR THE WORK OF FIRM EXCLUSIV ELY, AND THERE IS NOTHING ON RECORD, WHICH INDICATE THAT THESE EXPENS ES ARE NOT INCURRED FOR BUSINESS OR SUCH EXPENSES WERE NOT INCURRED AT ALL. SUCH NATURE OF AD HOC ADDITION WAS ALSO MADE OF IN THE CASE OF ASS ESSEE FOR A Y 2009- 10 AT RS. 71,632/-, WHICH WAS DELETED BY THE LD. CI T(A). 7. IN SUPPORT, RELIANCE WAS PLACED ON FOLLOWING DEC ISIONS:- M/S VIJAY INFRASTRUCTURE LIMITED VS. ACIT (ITAT LUC KNOW) IN ITA NO. 254 OF 2015 AND CROSS APPEAL NOS. 12 & 13 OF 20 15 VIDE ORDER DATED 30.10.2015. BALBIR SINGH VS ACIT (ITAT JAIPUR) IN ITA NO. 121 O F 2013 VIDE ORDER DATED 21.10.2015. TRIPAT KAUR VS. ACIT CIRCLE 22(1) NEW DELHI IN ITA NO. 3244/DEL/2012 VIDE ORDER DATED 07.09.2012. ITA NO. 64 /JP/2018 SHRI NARESH KUMAR LUHADIA VS. DCIT 6 8. THE LD DR IS HEARD WHO HAS VEHEMENTLY ARGUED THE MATTER AND SUBMITTED THAT THE LD CIT(A) IS MORE THAN REASONABL E IN RESTRICTING THE DISALLOWANCE TO 10% OF TOTAL TRAVEL AND CONVEYANCE EXPENSES AND NO FURTHER RELIEF MAY BE PROVIDED TO THE ASSESSEE. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS A CASE WHERE THE AO HAS DISALLOWED 20% OF TRAVELLING AND CONVEYANCE EXPENSES INCURRED BY THE ASSESSEE AND WHICH HAS BEEN SUSTAINED TO THE EXTENT OF 10% BY THE LD C IT(A). THERE IS NO FINDING RECORDED REGARDING ANY SPECIFIC DEFECT IN C LAIM OF THE EXPENSES OR THE EXPENSES HAVE NOT BEEN INCURRED FOR THE PURPOSE S OF THE BUSINESS. IT IS A CLEAR CASE OF ADHOC DISALLOWANCE OF EXPENSES W HICH CANNOT BE SUSTAINED IN THE EYES OF LAW. IN THE RESULT, ADDIT ION SO SUSTAINED BY THE LD CIT(A) IS HEREBY DELETED. 10. REGARDING GROUND NO. 2, BRIEFLY STATED, THE FAC TS OF CASE ARE THAT DURING THE YEAR UNDER CONSIDERATION, IT WAS OBSERVE D BY THE AO THAT THE ASSESSEE HAS INCURRED RS. 12,92,284/- TOWARDS M ACHINERY REPAIR EXPENSES WHERE AS IN THE LAST PRECEDING YEAR, THERE WAS NO SUCH EXPENDITURE IN THIS HEAD OF EXPENSES. FURTHER, DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT MANY PA YMENTS WERE MADE IN CASH ON THE BASIS OF UN-PROPER BILLS AND SU PPORTING, AND MAJORITY OF PAYMENTS WERE MADE IN CASH, FOR WHICH T HE ASSESSEE COULD NOT EXPLAIN THE JUSTIFICATION AND REASONS. HE NCE, A DISALLOWANCE OF 10% OF ABOVE EXPENDITURE OF RS. 12,92,284/- IS M ADE WHICH ITA NO. 64 /JP/2018 SHRI NARESH KUMAR LUHADIA VS. DCIT 7 COMES TO RS. 1,29,228/-, WHICH WAS ADDED TO TOTAL I NCOME OF THE ASSESSEE. 11. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R IN APPEAL BEFORE THE LD. CIT(A) AND HIS FINDINGS ARE REPRODUCED AS U NDER: I HAVE CAREFULLY CONSIDERED THE MATERIAL BEFORE ME . I FIND THAT THE ASSESSING OFFICER MADE THE DISALLOWANCE OF RS. 1,29 ,228/- IN ABSENCE OF PROPER VOUCHERS. THE LD. A/R SUBMITTED G ENERAL SUBMISSIONS. HE DID NOT COMMENT ON THE ISSUE THAT E XPENSES ARE NOT FULLY VOUCHED. I PERUSED THE RECORD AND FIND TH AT IN THE LAST YEAR THERE IS NO MACHINERY EXPENSES AND THE FINDING OF THE ASSESSING OFFICER THAT THE EXPENSES ARE NOT FULLY V OUCHED. THE LD. A/R OF THE APPELLANT FAILED TO FILE ANY EVIDENCES T HAT MACHINERY EXPENSES ARE FULLY VOUCHED. THEREFORE, I AM OF THE VIEW THAT ASSESSING OFFICER RIGHTLY DISALLOWED RS. 1,25,228/- OUT OF MACHINERY EXPENSES. THIS GROUND IS NOT ALLOWED. 12. DURING THE COURSE OF HEARING, THE LD. AR SUBMIT TED THAT THE ASSESSEE HEREWITH PROVIDING THE SUMMARY OF MACHINER Y REPAIR EXPENSES WHICH CONTAINS FULL DETAILS OF BILL NO., AMOUNT OF BILL AND NAME OF THE PARTY. ALL THESE DETAIL WERE AVAILABLE IN THE BOOKS OF ACCOUNTS MADE AVAILABLE TO THE AO AND IN LEDGER ACCOUNT, WHERE NA ME IS APPEARING MEANS THAT THESE VENDORS ARE REGULAR VENDORS OF THE COMPANY AND PAYMENT TO THEM ARE MADE MOSTLY BY CHEQUES AS THEY ARE REGULAR SUPPLIER TO THE ASSESSEE. TOTAL OF MACHINERY EXPENSES RS. 12,92,228/- PAYMENT BY WAY OF CHEQUE/JOURNAL ITA NO. 64 /JP/2018 SHRI NARESH KUMAR LUHADIA VS. DCIT 8 ENTRIES TO REGULAR VENDORS RS. 10,97,774/- (% OF TOTAL MACHINERY EXPENSES = 10,97,774/12,92,228= 84.94%) PAYMENT BY WAY OF CASH FOR MACHINERY EXPENSES RS. 1,94,510/- (% OF TOTAL MACHINERY EXPENSES INCURRED IN CASH COM ES TO 15.06%, VALUE WISE BILLS ARE AVAILABLE IN 99% OF CA SES WHERE THE CASH PAYMENTS WERE MADE) 13. IT WAS SUBMITTED THAT EVEN IN THE CASE OF PAYM ENTS MADE IN CASH FOR MACHINERY REPAIR EXPENSE, IT IS BRING TO Y OUR KIND NOTICE THAT EVEN PAYMENT MADE FOR THESE EXPENSES ARE DONE MOSTLY AGAINST THE BILL RAISED BY THE VENDORS FROM WHICH D EALINGS HAS BEEN MADE IN CASH. COPY OF MACHINERY REPAIRS EXPENSES CO NCERNING CASH PAYMENT IS ATTACHED HEREWITH AT PAPER BOOK SR. NO. 14 TO25 WHICH CLEARLY SHOWS IN MOST OF THE CASES, BILL NO, AMOUNT OF THE BILL AND THE NAME OF THE PARTY WITH WHOM SUCH PAYMENT HAS BE EN MADE. IT MEANS THAT EVEN WHERE THE CASH PAYMENT HAS BEEN MAD E BY THE ASSESSEE, SUCH EXPENSES ARE FULLY VOUCHED. AND AS S UCH WHOLE OF THE EXPENSES ARE AGAINST BILLS. SO THE CONCLUSION R EACHED BY LD. AO IS FAR FROM THE TRUTH. FURTHER, DURING THE COURSE O F ASSESSMENT PROCEEDINGS, NO QUERY RELATING TO JUSTIFICATION OF MACHINERY EXPENSES WAS ENQUIRED FROM THE ASSESSEE. IT WAS LAS T MINUTE THOUGHT OF THE LD. AO, WHICH MADE ADDITION ONLY FOR THE SAKE OF MAKING ADDITION. WE ARE ATTACHING HEREWITH ATTACHIN G THE COPY OF NOTE SHEET AT SR. NO. 54 TO 55, OBTAINED DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN WHICH CERTAIN QUERIES WER E MADE AND ITA NO. 64 /JP/2018 SHRI NARESH KUMAR LUHADIA VS. DCIT 9 THE COPY OF REPLY AGAINST SUCH QUERIES ARE ATTACHED AT SR. NO. 45 TO 53 OF THE PAPER BOOK. FURTHER, THERE WERE ALSO MACH INERY REPAIR EXPENSES IN PREVIOUS ALSO, AS THE ASSESSEE IS ENGAG ED IN THE BUSINESS OF MANUFACTURING OF CATTLE FEED, SO IT IS NOT POSSIBLE THAT THERE WERE NO MACHINERY EXPENSES IN EARLIER YEARS. IN EARLIER YEARS, MACHINERY REPAIR EXPENSES WERE TRANSFERRED TO REPAI RS AND MAINTENANCE EXPENSES, BUT AFTER IT WAS BROUGHT TO T HE NOTICE OF ASSESSEE BY THE AUDITORS OF THE CONCERN, FROM THE Y EAR UNDER CONSIDERATION, IT WAS SHOWN UNDER THE HEAD OF MACHI NERY REPAIR EXPENSES TO PRESENT TRUE AND CORRECT VIEW. 14. IT WAS FURTHER SUBMITTED THAT IT IS SETTLED LAW THAT IT IS NOT OPEN TO THE ASSESSING OFFICER TO MAKE ADDITION ON ESTIMA TION BASIS WITHOUT VERIFYING THAT SAID EXPENSES ARE GENUINE OR NOT, AS THE INCOME TAX LAW DOES NOT PERMIT SUCH ADHOC ADDITIONS . MERE FACT THAT PAYMENTS WERE MADE IN CASH ON SELF MADE V OUCHERS, NOT A CONCLUSIVE EVIDENCE TO DISALLOW THE EXPENSES. IN THE GIVEN CASE, THE ASSESSING OFFICER HAD NOT BROUGHT O N RECORD ANY ADVERSE EVIDENCE THAT EXPENSES ARE NOT GENUINE, AND IGNORED THE MATERIAL AVAILABLE ON RECORD. HE SIMPLY DISALLOWED THE EXPENSES ON ESTIMATE BASIS EVEN WITHOUT ENQUIRI NG FROM THE ASSESSEE, WHICH IS NOT ALLOWED. HE HAS TO BRING SPECIFIC DEFECTS AND AT THE BEST IT CAN BE A STARTING POINT FOR ENQUIRY BUT IF THE VOUCHERS WERE DEFECTIVE, THE ASSESSING O FFICER SHOULD HAVE POINTED OUT THE DEFECTS WHILE FRAMING THE ASSE SSMENT AND SHOULD HAVE ASKED THE ASSESSEE FOR A REASONABLE EXP LANATION, WHICH IS MISSING IN CURRENT CASE, HENCE NO ADDITION CAN BE MADE LEGALLY . ITA NO. 64 /JP/2018 SHRI NARESH KUMAR LUHADIA VS. DCIT 10 15. IN SUPPORT, RELIANCE WAS PLACED ON FOLLOWING DE CISIONS: MAHESHWARI FLOUR MILLS VS. JCIT IN ITA NO. 39/LKW/2 016 VIDE ORDER DATED 11.01.2018. M/S VIJAY INFRASTRUCTURE LIMITED VS. ACIT (ITAT LUC KNOW) IN ITA NO. 254 OF 2015 AND CROSS APPEAL NOS. 12 &13 OF 2015 ORDER DATED 30.10.2015. TRIPAT KAUR VS. ACIT CIRCLE 22(1) NEW DELHI IN ITA NO. 3244/DEL/2012 ORDER DATED 07.09.2012. 16. THE LD DR IS HEARD WHO HAS RELIED ON THE FINDIN GS OF THE LOWER AUTHORITIES. 17. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS A CASE WHERE THE AO HAS DISALLOWED 10% OF MACHINERY EXPENSES INCURRED BY THE ASSESSEE. THERE IS NO FINDING RECORDED REGARDING ANY SPECIFIC DEFECT IN CLAIM OF THE EXPENSES OR THE EXPENSES HAVE NOT BEEN INCURRED FOR THE PURPOSES OF THE BUSINESS. IT IS A CLEAR CASE OF ADHOC DISALLOWANCE OF EXPENSES WHICH CANNOT BE SUSTAINED IN THE EYES OF LAW. IN THE RESULT, ADDITION SO MAD E BY THE AO IS HEREBY DELETED. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25/06/2018. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER ITA NO. 64 /JP/2018 SHRI NARESH KUMAR LUHADIA VS. DCIT 11 TK;IQJ@ JAIPUR FNUKAD@ DATED:- 25/06/2018. * SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SH. NARESH KUMAR LUHADIA, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- DCIT, CIRCLE-7, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 64/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR