SHRI RAMESH KUMAR GUPTA, JAIPUR V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-4, JAIPUR

ITA 644/JPR/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3176 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 11-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI
• Assessee Lawyers: S L PODDAR; ISHA KANOONGO
• Keywords: Rejection of books of accounts; Business income; Depreciation; Notional interest

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. 644/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 SHRI RAMESH KUMAR GUPTA E-410A, ROAD NO. 14, VKI AREA, JAIPUR CUKE VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-4, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ACIPG4500D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI S. L. PODDAR & SHRI ISHA KANOONGO (ADV) JKTLO DH VKSJ LS @ REVENUE BY : SHRI J. C. KULHARI (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 13/08/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 21/08/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-2, JAIPUR DATED 12.03.2018 FOR ASSESSMENT YEAR 2011-12 WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. IN THE FACTS AND IN THE CIRCUMSTANCES OF THE LE ARNED CIT(A) HAS ERRED IN CONFIRMING THE INVOCATION OF PROVISION OF SECTION 145(3) OF THE INCOME TAX ACT 1961 BY REJECTING THE BOOKS OF ACCOU NTS OF THE ASSESSEE. 2. IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 9,79,510/- BY ITA NO. 644/JP/2018 SHRI RAMESH KUMAR GUPTA, JAIPUR VS DCIT, JAIPUR 2 ESTIMATING THE BUSINESS PROFIT AT RS. 1,36,300/- AP PLYING NP RATE @ 0.90% ON TOTAL TURNOVER AGAINST DECLARE NET LOSS OF RS. 8,43,210/-. 3. IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 2,30,946/- TOWARDS NOTIONAL INTEREST ON ALLEGED DEBIT BALANCES. 2. IN GROUND NOS. 1 AND 2, THE ASSESSEE HAS CHALLEN GED THE REJECTION OF BOOKS OF ACCOUNTS U/S 145(3) OF THE ACT AND ESTIMAT ING NP RATE @ 0.90% AS AGAINST LOSS OF 5.57%. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO ISSUED A SHOW CAUSE TO THE ASSESSEE WHEREIN THE ASSESSEE WAS ASKED TO EXPLAIN THE REASONS FOR S HARP DECLINE IN THE NET PROFIT IN SPITE OF THE FACT THAT SALES HAVE DECREAS ED. THE ASSESSEE WAS ALSO ASKED TO EXPLAIN AS TO WHY PRODUCTION SHOULD NOT BE ESTIMATED ON THE BASIS OF WAGES SINCE WAGES ARE THE MOST RELIABLE FACTOR TO D ETERMINE THE PRODUCTION. THE ASSESSEE WAS ALSO ASKED TO JUSTIFY EXPENSES ON ACCOUNT OF WAGES AND OTHER EXPENSES CLAIMED IN THE P & L ACCOUNT AND ITS COMPARISON WITH PREVIOUS YEAR AND TO PRODUCE THE BOOKS OF ACCOUNTS, BILLS AN D VOUCHERS. THE REPLY FILED BY THE ASSESSEE WAS CONSIDERED BUT NOT FOUND ACCEPT ABLE TO THE AO AND HE INVOKED THE PROVISIONS OF SECTION 145(3) AND ON THE DECLARED TURNOVER, HE ESTIMATED NP RATE @ 0.90% FOLLOWING THE PRECEDING Y EAR AND NET PROFIT WAS DETERMINED AT RS. 1,36,300/- AS AGAINST DECLARED NE T LOSS OF RS. 8,43,210/-. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) AND SUBMITTED ITS EXPLANATION. THE ASSES SEE SUBMITTED THE COMPARATIVE CHART OF THE EXPENSES OVER THE PRECEDIN G YEAR AND IT WAS SUBMITTED THAT THERE IS NO INCREASE IN THE EXPENDIT URE AS COMPARED TO PRECEDING YEAR EXCEPT SALES COMMISSION AND FREIGHT AND CARTAGE. REGARDING SALES COMMISSION, IT WAS SUBMITTED THAT THE ASSESSE E HAS PAID COMMISSION OF RS. 591,870/- FOR SERVICES RENDERED IN CONNECTION W ITH PROCURING ORDERS FROM ITA NO. 644/JP/2018 SHRI RAMESH KUMAR GUPTA, JAIPUR VS DCIT, JAIPUR 3 GOVT. DEPARTMENTS AND PAYMENTS HAVE BEEN MADE BY WA Y OF ACCOUNT PAYEE CHEQUES AFTER DEDUCTING TDS AND THE COPY OF LEDGER ACCOUNT OF COMMISSION AND PERSONAL ACCOUNT OF THE PARTIES TO WHOM THE COM MISSION WAS PAID WAS SUBMITTED. REGARDING FREIGHT AND CARTAGE OF RS. 5,4 7,461/-, IT WAS SUBMITTED THAT THE SAME HAS BEEN PAID ON BEHALF OF THE CERTAI N CUSTOMERS AS PER THE AGREED TERMS AND CONDITIONS, AND THE SAME HAS BEEN RECOVERED AND SHOWN AS PART OF SALES PRICE INCLUDING IN THE TOTAL SALES DE CLARED IN THE RETURN OF INCOME. IT WAS FURTHER SUBMITTED THAT DUE TO FALL IN THE TU RNOVER DURING YEAR, THE GP RATE IN PERCENTAGE TERMS HAS INCREASED. HOWEVER, IN ABSOLUTE TERMS, THE GP HAS DECLINED BY RS. 811,168/- AND WHICH HAS NOT BEE N DISPUTED BY THE ASSESSING OFFICER. IT WAS FURTHER SUBMITTED THAT IF THE FALL IN THE GROSS PROFIT IN ABSOLUTE TERMS IS TAKEN INTO CONSIDERATION, THERE I S INCREASE OF FIXED/ SEMI FIXED EXPENSES AMOUNTING TO RS. 253,775/- DURING TH E YEAR WHICH HAS RESULTED IN OVERALL LOSS OF RS. 10,64,943/- AS AGAINST PRECE DING YEAR. THE SUBMISSION OF THE ASSESSEE WERE CONSIDERED AND WERE NOT FOUND ACC EPTABLE BY THE LD. CIT(A) AND FINDINGS ARE CONTAINED AT PARA 2.3 WHICH IS REPRODUCED AS UNDER:- 2.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSE SSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. A PERUSAL OF THE CHART AS REPRODUCED BELOW, FOR 3 YEARS OF THE APPELLANT SHOWS THAT TURN OVER IN THE CURRENT YEAR IS SIMILAR TO TURNOVER IN THE ASSESSMENT YEAR 2009-10 AND IN THAT YEAR, THE G.P. & N.P. WAS 10.32% AND 2.30% RESPECTI VELY, IN THE IMMEDIATELY PRECEEDING YEAR THE TURNOVER IS ALMOST DOUBLE AT RS 2.4 CRORE AND G.P. AT 9.55% AND N.P. AT 0.90%. A.Y. SALES GROSS PROFIT GP RATE NET PROFIT NP RATE 2009 - 10 1,66,50,879/ - 17,18,544/ - 10.32% 3,82,914/ - 2.30% 2010 - 11 2,47,25,087/ - 23,62,154/ - 9.55% 2,21,732/ - .90% 2011 - 12 1,51,44,506/ - 15,50,986/ - 10.24% ( - )843210/ - ( - )5.57% THUS, THE AUTHORIZED REPRESENTATIVE'S EXPLANATION F OR REDUCED N.P. BEING DUE TO ONLY REDUCED TURNOVER CANNOT BE ACCEPT ED AS IN 2009-10 ON ITA NO. 644/JP/2018 SHRI RAMESH KUMAR GUPTA, JAIPUR VS DCIT, JAIPUR 4 SIMILAR TURNOVER THE N.P. WAS 2.30%. FURTHER, THE E XPENDITURE HAS INCREASED EVEN WHEN THE TURNOVER HAS DECREASED. THE AUTHORIZED REPRESENTATIVE'S SUBMISSIONS THAT EXPENDITURE REMAI NS FIXED IS NOT IN ORDER WHEN THE TURNOVER REDUCES TO HALF, THE EXPEND ITURE IS BOUND TO DECREASE AND THE SAME IS EVIDENT AS IN A.Y. 2009-10 THE N.P. RATE IS 2.32%. THE INCREASE IN SALES COMMISSION AND FREIGHT AND CA RTAGE HAS NOT BEEN EXPLAINED SATISFACTORILY WHILE IN THE CASE OF SALES COMMISSION A GENERAL REPLY HAS BEEN GIVEN THAT COMM ISSION BEARING SALES HAVE INCREASED, FREIGHT AND CARTAGE I S CLAIMED TO BE REIMBURSED IN WHICH CASE IT SHOULD NOT AFFECT TH E PROFIT. IN VIEW OF THE DISCUSSION AS ABOVE, THE REJECTION OF B OOKS AND ESTIMATION OF NP AT PREVIOUS YEAR PERCENTAGE IS UPHELD. 5. DURING THE COURSE OF HEARING, THE LD. AR REITERA TED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES AND IT WAS SUBMIT TED THAT THE ASSESSEE HAS MAINTAINED ITS COMPLETE BOOKS OF ACCOUNT WHICH HAVE BEEN DULY AUDITED AND AUDIT REPORT U/S 44AB HAVE BEEN FURNISHED ALONG WIT H RETURN OF INCOME AND THE AUDITORS HAVE NOT GIVEN ANY ADVERSE REPORT REGA RDING THE MAINTENANCE OF BOOKS OF ACCOUNTS. IT WAS FURTHER SUBMITTED THAT T HE ASSESSING OFFICER HAS NOT POINTED OUT ANY SPECIFIC VOUCHERS OR ANY SPECIF IC EXPENDITURE IN RESPECT OF WHICH ASSESSEE HAS NOT SUBMITTED APPROPRIATE EXPLAN ATION AND IT WAS SUBMITTED THAT EACH AND EVERY EXPENDITURE OF THE AS SESSEE IS FULLY VOUCHED AND VERIFIABLE, SALE OF THE ASSESEE ARE TO GOVERNME NT AGENCY. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAS MAINTAINED ITS STOC K REGISTER AND PERSONAL RECORD PRESCRIBED BY EXCISE AUTHORITY AND IT WAS SU BMITTED THE STOCK REGISTER AMPLY DISCLOSE POSITION OF DAY TO DAY OPENING STOCK , PURCHASE, MATERIAL CONSUMED AND CLOSING STOCK BOTH IN TERMS OF QUANTIT Y AND VALUE. IT WAS FURTHER SUBMITTED THAT THE EXCISE RECORDS KEPT IN F ORM NO. RG-1 AND FORM IV ALSO DISPLAY DAY TO DAY POSITION OF PRODUCTION OF F INISHED GOODS. REGARDING SALARIES AND WAGES, THE ASSESSEE HAS SUBMITTED THAT IT HAS MAINTAINED ITA NO. 644/JP/2018 SHRI RAMESH KUMAR GUPTA, JAIPUR VS DCIT, JAIPUR 5 COMPLETE RECORDS REGARDING PAYMENT OF COMMISSION. I T WAS SUBMITTED THAT THE SAME HAS BEEN PAID TO FOUR PARTIES MAINLY IN RESPEC T OF ORDER OF SALE OBTAINED FROM GUJARAT ELECTRIC & WATER SUPPLY AND SEWAGE BOA RD AND IT WAS ACCORDINGLY SUBMITTED THAT THE ASSESSING OFFICER WA S NOT CORRECT IN REJECTING THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE AN D INVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT. IT WAS FURTHER SUBMI TTED THAT THE NP DURING THE YEAR HAS DECLINED ON ACCOUNT OF FREIGHT AND CARTAGE , COMMISSION EXPENDITURE, DEPRECIATION AND INTEREST ON SALES TAX DEMAND. REGA RDING FREIGHT AND CARTAGE OF RS. 547,461/-, IT WAS SUBMITTED THAT THE SAME IS INCURRED IN RESPECT OF SUPPLIES MADE TO GWSSB AND THE SAME HAS BEEN REIMBU RSED TO THE EXTENT OF RS. 5,40,661/- WHICH HAS BEEN ACCOUNTED IN THE TRAD ING ACCOUNT OF THE ASSESSEE. REGARDING COMMISSION EXPENDITURE OF RS. 5 78,355/-, IT WAS SUBMITTED THAT FULL DETAIL OF PARTIES TO WHOM COMMI SSION HAS BEEN PAID, THEIR CONFIRMATIONS, DETAILS OF WORK DONE BY THEM AND TDS MADE ON PAYMENT OF COMMISSION THROUGH CHEQUE IS AVAILABLE IN THE ASSES SEES PAPER BOOK. IT WAS ACCORDINGLY SUBMITTED THAT THE COMMISSION EXPANSION SHOULD HAVE BEEN TREATED AS GENUINE AND NO ADVERSE VIEW SHOULD HAVE BEEN TAKEN BY THE ASSESSING OFFICER. 6. THE LD. DR IS HEARD WHO HAS RELIED ON THE FINDI NGS OF THE LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE HAS MAINTAINED COMPLETE BOOKS OF ACCOUNTS WHICH HAVE BEEN DULY AUDITED. FURTHER, THE EXCISE RECORDS ARE MAINTAINED WHICH REFLECT CLEARLY THE POSITION REGAR DING THE STOCK AND THE PRODUCTION WHICH HAVE BEEN CARRIED OUT BY THE ASSES SEE DURING THE YEAR UNDER CONSIDERATION. FURTHER, THE ASSESSING OFFICER HAS NOT CHALLENGED AND HAS NOT SPECIFICALLY DISPUTED THE STOCK IN TERMS OF OPENING STOCK, PURCHASE , CLOSING STOCK AND SALES WHICH HAVE BEEN ACCOUNTED F OR DURING THE YEAR. THERE IS NO FINDING REGARDING ANY OUT OF BOOKS SALES MADE BY THE ASSESSEE. ITA NO. 644/JP/2018 SHRI RAMESH KUMAR GUPTA, JAIPUR VS DCIT, JAIPUR 6 REGARDING EXPENSES, IT IS NOTED THAT IN COMPARISON TO THE PRECEDING YEAR, THERE IS AN INCREASE IN ABSOLUTE TERMS OF EXPENDITU RE IN THE NATURE OF INTEREST PAID TO BANKS, SALARIES, SALES COMMISSION, FREIGHT AND CARTAGE, SALES TAX INTEREST. THERE CANNOT BE ANY DISPUTE AS REGARDS TH E LIABILITY TOWARDS THE BANK AND THE SALES TAX AUTHORITY IS CONCERNED. REGARDING INCREASE IN SALARY, THE ASSESSEE HAS SUBMITTED THAT THE SALARY RECORDS ARE PROPERLY MAINTAINED AND TDS HAS BEEN DONE ON THE SALARY. REGARDING COMMISSI ON, IT HAS BEEN SUBMITTED THAT THE COMMISSION HAS BEEN PAID TO OBTA IN ORDERS FROM CERTAIN STATE GOVERNMENT AUTHORITIES AND THE NECESSARY DETA ILS IN TERMS OF NATURE OF WORK, THE PAYMENT WHICH HAS BEEN MADE DURING YEAR T HROUGH THE ACCOUNT PAYEE CHEQUE, THE TDS ON SUCH PAYMENT AND THE CONFI RMATION ON THE PARTIES HAVE BEEN DULY SUBMITTED BEFORE THE LOWER AUTHORITI ES WHICH HAS NOT BEEN DISPUTED. REGARDING FREIGHT AND CARTAGE, IT HAS BEE N SUBMITTED THAT THE SAME HAS BEEN INCURRED ON THE SPECIFIC DIRECTIONS OF CER TAIN PARTIES AND THE SAME HAS BEEN REIMBURSED AND SHOWN AS A PART OF ITS SALE S. FURTHER, MERELY A FALL IN THE NP RATE DURING THE YEAR CANNOT BE A BASIS FO R REJECTION OF BOOKS OF ACCOUNTS AND ESTIMATING THE NP HANDS OF THE ASSESSE E ESPECIALLY WHERE THE ASSESSEE HAS PROVIDED THE SUITABLE EXPLANATION REGA RDING EXTRA-ORDINARY ITEMS WHICH HAS RESULTED IN FALL IN THE NET PROFIT. IN T HE RESULT, THE GROUND NOS. 1 AND 2 OF THE ASSESSEES APPEAL ARE ALLOWED AND THE ADDITION MADE IS HEREBY DELETED. 8. REGARDING GROUND NO. 3, THE RELEVANT FACTS AND FINDINGS OF THE LD. CIT(A) ARE CONTAINED AT PARA 3.3 WHICH IS REPRODUCE D AS UNDER:- 3.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASS ESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE AO NOTED THAT THERE WAS A DEBIT BALANCE OF RS. 19,24,550/- IN THE BALANCE SHEET OF M/S GUPTA ENTERPRISES AND NO INTEREST HAD BEEN CHARGED ON THIS AMOUNT, TH E APPELLANT HAD CONTENDED THAT THE AMOUNT WAS TRANSFERRED TO M/S RA DHA RANI WIRE PRODUCTS IN WHICH THE APPELLANT IS A PARTNER. THE A O DISALLOWED INTEREST AT ITA NO. 644/JP/2018 SHRI RAMESH KUMAR GUPTA, JAIPUR VS DCIT, JAIPUR 7 12% ON THE DEBIT BALANCE OF RS.1924550 AT RS.230946 . IN THE PRESENT PROCEEDINGS IT WAS SUBMITTED THAT THE AMOUNT WITHDR AWN FROM M/S GUPTA ENTERPRISES ON DIFFERENT DATES EXCEPT WITHDRAWALS O F NOMINAL AMOUNT FOR PERSONAL PURPOSES HAVE BEEN INTRODUCED IN M/S RADHA RANI WIRE PRODUCTS RESULTING IN THE OPENING DEBIT BALANCE OF RS.192455 0, IT WAS CLAIMED THAT IN CONSIDERATION OF BUSINESS EXPEDIENCY THE AMOUNT WITHDRAWN FROM M/S GUPTA ENTERPRISES HAVE BEEN USED FOR CAPITAL INTROD UCTION IN M/S RADHA RANI WIRE PRODUCTS AND INTEREST IS RECEIVED ON THE CAPITAL AS WELL AS PARTNERS REMUNERATION FROM M/S RADHA RANI WIRE PROD UCTS. SINCE THE APPELLANT HAS UTILIZED THE FUNDS OF THE FIRM FOR BO TH PERSONAL PURPOSES AS WELL AS FOR INVESTMENT, THE INTEREST ACCRUING ON TH E SAME IS RIGHTLY DISALLOWED BY THE AO. THE GROUND OF APPEAL IS DISMI SSED. 9. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT THE ASSESSING OFFICER HAS MADE AN ADDITION OF RS. 2,30,946/- ON A CCOUNT OF NOTIONAL INTEREST ON DEBIT BALANCE IN M/S GUPTA ENTERPRISES. THE ASSESSEE IS PROPRIETOR OF M/S GUPTA ENTERPRISES. THIS IS A RUNN ING ACCOUNT OF THE ASSESSEE. THE CLOSING BALANCE WAS OF RS. 429,861/- ONLY AS ON 31.03.2011. DURING THE YEAR UNDER CONSIDERATION, TH E ASSESSEE DEBITED AMOUNT IN THE CAPITAL ACCOUNT FOR WITHDRAWAL REQUIR ED FOR INVESTMENT IN PARTNERSHIP FIRM M/S RADHA RANI WIRE PRODUCTS. A CO PY OF LEDGER ACCOUNT WITH M/S RADHA RANI WIRE PRODUCTS IS AVAILA BLE ON ADDITIONAL PAPER BOOK PAGE NUMBER 99 TO 101. THIS FACTS HAS BE EN ADMITTED BY THE LEARNED CIT(A) AS MENTIONED IN THE APPELLATE ORDER. IT IS FURTHER SUBMITTED THAT ASSESSEE HAS DISCLOSED RECEIPT OF IN TEREST OF RS. 8,99,507/- FROM PARTNERSHIP FIRM M/S RADHA RANI WIRE PRODUCTS. SINCE INTEREST HAS BEEN RECEIVED ON FUNDS INVESTED THERE, THERE WAS NO CASE LEFT FOR MAKING ADDITION ON ACCOUNT OF DEBIT B ALANCE IN THE PROPRIETARY CONCERN. THE LEARNED ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING ADDITION ON ACCOUNT OF CHARGING NOTIONAL INT EREST AND THE ITA NO. 644/JP/2018 SHRI RAMESH KUMAR GUPTA, JAIPUR VS DCIT, JAIPUR 8 LEARNED CIT(A) HAS ALSO ERRED IN DISALLOWING INTERE ST TO THE SAME EXTENT OF RS. 2,30,946/-. IT IS SUBMITTED THAT RECEIPT OF INTEREST IS OF RS. 8,99,507/- FROM PARTNERSHIP FIRM M/S RADHARANI WIRE PRODUCTS AND RS. 89392/- ON FDRS AS ACCOUNTED FOR IN THE P&L A/C. TH E TOTAL RECEIPT OF INTEREST WAS RS. 988,899/ WHEREAS PAYMENT OF INTERE ST TO BANK IS RS. 242,242/- AND TO PRIVATE PARTIES OF RS. 5,16,959/- TOTALING TO RS. 7,59,201/-. THUS THE RECEIPTS EXCEED THE PAYMENT. T HERE IS NO CASE FOR ANY DISALLOWANCE OF INTEREST. BOTH THE LEARNED ASSESSING OFFICER AS WELL AS THE LEARNED CIT(A) ERRED IN MAKING ADDITION ON ACCOUNT OF INTEREST JUST BECAUSE OF NON-APPRECIATION OF THE FA CTS IN TOTALITY. THE ADDITION DESERVES TO BE DELETED. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE HAS SUBMITTED THAT THE AMO UNT WITHDRAWN FROM HIS PROPRIETORSHIP M/S GUPTA ENTERPRISES HAS BEEN INVES TED IN THE PARTNERSHIP FIRM M/S RADHA RANI WIRE PRODUCTS AND ON SUCH INVES TMENT, HE HAS EARNED INTEREST AMOUNTING TO RS 899,507 WHICH HAS BEEN DUL Y OFFERED AND DISCLOSED IN THE RETURN OF INCOME. IN VIEW OF THE SAME, THER E IS NO BASIS FOR MAKING NOTIONAL INTEREST ADDITION IN THE HANDS OF THE ASSE SSEE. THE GROUND OF APPEAL IS THUS ALLOWED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 21/08/2018. SD/- SD/- FOT; IKWY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 21/08/2018 *GANESH KR VKNS'K DH IZFRFYFI VXZSF'KR @ COPY OF THE ORDER FORWARDED TO: ITA NO. 644/JP/2018 SHRI RAMESH KUMAR GUPTA, JAIPUR VS DCIT, JAIPUR 9 1. VIHYKFKHZ@ THE APPELLANT - SHRI RAMESH KUMAR GUPTA, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT - DCIT, CIRCLE-4, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 644/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR.