The Dy,CIT.,(OSD)-I, Circle-4, Ahmedabad V. K.B.Mehta Construction Pvt.Ltd., Ahmedabad

ITA 672/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0706 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 28-07-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 08-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIMAL I MEHTA
• Assessee Lawyers: URVASHI SHODHAR
• Keywords: Depreciation; Additional evidence
• Section: 143(3); 142(1); 145; 144; 15

Judgement Text

, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA.NO.672/AHD/2013 / ASSTT. YEAR: 2008-09 THE DCIT (OSD) - 1 AHMEDABAD. VS K.B. MEHTA CONSTRUCTION P. LTD. 509, MILESTONE OPP: T.V. TOWER THALTEJ ROAD, AHMEDABAD. PAN : AABCK 6922 H. ! / (APPELLANT) '# ! / (RESPONDENT) REVENUE BY : SHRI VIMAL I. MEHTA, SR.DR ASSESSEE BY : SMT.URVASHI SHODHAR, AR / DATE OF HEARING : 28/07/2016 / DATE OF PRONOUNCEMENT: 05/09/2016 $%/ O R D E R PER AMARJI SINGH, ACCOUNTANT MEMBER: THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINS T THE ORDER OF THE LD.CIT-XXI DATED 10.12.2012 PASSED FOR THE ASST T.YEAR 2008-09. 2. THE REVENUE HAS RAISED MAINLY THREE GROUNDS OF A PPEAL IN ITS APPEAL. IN THE FIRST GROUND OF APPEAL, THE REVENUE IS AGGRIEVED BY THE ACTION OF THE LD.CIT(A) IN NOT REJECTING THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND DELETING THE ADDITION OF RS.45,53,246/ - MADE BY THE AO BY ADOPTING GROSS PROFIT RATE AT 13%. ITA NO.672/AHD/2013 2 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE IS ENGAGED IN CONSTRUCTION BUSINESS. IT HAS FILED ITS RETURN OF INCOME ELECTRONICALLY ON 30.9.2008 DECLARING TOTAL INCOME AT RS.141,34,080/- . THEREAFTER, THE ASSESSEE REVISED ITS RETURN AND INCREASED ITS RETUR NED INCOME TO RS.150,70,140/- WHICH WAS SUBSEQUENTLY RE-REVISED O N 21.10.2010 TO RS.151,87,340/-. THE RETURN WAS PROCESSED UNDER SE CTION 143(1) OF THE ACT, AND THEREAFTER, THE CASE OF THE ASSESSEE WAS S ELECTED FOR SCRUTINY ASSESSMENT, AND ISSUED NOTICE UNDER SECTION 143(2) OF THE ACT ON 29.9.2009 WHICH WAS DULY SERVED UPON THE ASSESSEE O N 30.9.2009. BESIDES THAT, THE ASSESSEE WAS ALSO SERVED UPON QUE STIONNAIRE ON 25.01.2010. SINCE THE ASSESSEE HAS NOT COMPLIED WI TH VARIOUS NOTICES ISSUED UNDER SECTION 142(1) AND UNDER SECTION 271(1 )(B) OF THE ACT FOR FURNISHING OF VARIOUS INFORMATION/DETAILS, THE ASSE SSMENT ORDER WAS FRAMED BY THE AO UNDER SECTION 144 OF THE INCOME TA X ACT. DURING THE ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASS ESSEE HAS SHOWN TOTAL INCOME FROM ITS OPERATION AT RS.11,84,15,055/ - EXCLUDING OTHER INCOME OF RS.9,98,683/- AS COMPARED TO PRECEDING YE ARS OPERATIONAL INCOME OF RS.3,98,12,748/- AND OTHER INCOME OF RS.1 ,93,822/-. THE AO NOTICED THAT THERE IS FALL IN GP TO 11% FROM 13% IN COMPARISON TO PREVIOUS YEAR (AY 2007-08). THE ASSESSEE DID NOT F URNISH EXPLANATION FOR FALL IN GP, THEREFORE, THE AO ISSUED A NOTICE D ATED 6.12.2010, SHOW- CAUSING THE ASSESSEE AS TO WHY BOOKS OF ACCOUNTS OF THE ASSESSEE SHOULD NOT BE REJECTED UNDER SECTION 145(2) AND GP SHOULD NOT BE ADOPTED AT 13% OF THE TOTAL TURNOVER INSTEAD OF 11% SHOWN BY T HE ASSESSEE. IN RESPONSE THERETO, THE ASSESSEE VIDE LETTER DATED 27 .12.2010 REPLIED THAT ITA NO.672/AHD/2013 3 FALL IN GP WAS DUE TO INCREASE IN THE COST OF DIREC T MATERIAL AND LABOUR VIS--VIS PREVIOUS FINANCIAL YEAR 2006-07. THE AO WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE IN THE ABSENCE OF REQUISITE BOOKS OF ACCOUNTS AND SUPPORTING DOCUMENTS/DETAILS. THE AO, ACCORDINGLY, MADE AN ADDITION OF RS.45,53,246/- BEING THE DIFFERENCE BETWEEN ASSESSEES CLAIM AND GP WAS ESTIMATED AT THE RATE OF 13% ON TH E TURNOVER. 4. THE ACTION OF THE AO WAS CHALLENGED BY THE ASSES SEE BEFORE THE LD.CIT(A), WHO BY IMPUGNED ORDER HAS HELD THAT THE ACTION OF THE AO IN REJECTING THE BOOKS OF ACCOUNTS OF THE ASSESSEE UND ER SECTION 145 WAS NOT TENABLE, AND ESTIMATED ADDITION HELD TO BE WITHOUT ANY BASIS. THE CIT(A), THUS, DELETED THE ADDITION OF RS.45,53,246 /-. 5. BEFORE US, THE LD.DR RELIED UPON THE ORDER OF TH E AO AND CONTENDED THAT LD.CIT(A) HAS WRONGLY DELETED THE AD DITION OF RS.45,53,246/- MADE BY THE AO AND ALSO LD.CIT(A) NO T CORRECT IN DECIDING THAT THE BOOKS OF ACCOUNTS WERE WRONGLY RE JECTED BY THE AO. 6. THE LD.COUNSEL FOR THE ASSESSEE RELIED ON THE OR DER OF THE LD.CIT(A) AND CONTENDED THAT THE ACTION OF THE AO FOR INVOKIN G SECTION 145 OF THE INCOME TAX ACT IS NOT CORRECT AS NO SPECIFIC DEFECT IN THE AUDITED ACCOUNT NOR IN THE EVIDENCES DURING THE COURSE OF A SSESSMENT PROCEEDINGS WERE POINTED OUT BY THE AO. IT WAS EXP LAINED TO THE AO THAT THERE WAS FALL IN GP RATIO DUE TO INCREASE IN THE COST OF DIRECT MATERIAL AND LABOUR COST IN COMPARISON WITH THE PRE CEDING YEAR. HE ALSO STATED THAT SALES DURING THE YEAR WAS ALSO INCREASE D FROM RS.11.94,15,055/- IN A.Y.2007-08 TO RS.25,39,72,616 /- IN THE ASSTT.YEAR ITA NO.672/AHD/2013 4 2008-09 THE INCREASE IN THE SALE IS MORE THAN DOUBL E IN COMPARISON TO THE PRECEDING YEAR. THE LD.COUNSEL ALSO REFERRED THE L ETTER DATED 27.6.2011 ADDRESSED TO THE AO BY THE LD.CIT(A) REGARDING VERI FICATION OF THE SUBMISSION OF THE ASSESSEE THAT ALL THE DETAILS WER E FURNISHED DURING THE ASSESSMENT PROCEEDINGS. THE AO SUBMITTED VIDE LETT ER DATED 1.2.2012 TO THE LD.CIT(A) THAT THE ASSESSMENT ORDER WAS ACTUALL Y MADE U/S.143(3) OF THE ACT AS CLEARLY MENTIONED IN THE CONCLUSIVE PARA GRAPH OF THE ASSESSMENT ORDER, AND NOT UNDER SECTION 144 WHICH I S MENTIONED IN THE ASSESSMENT ORDER. THE AO ALSO SUBMITTED TO THE LD. CIT(A) VIDE ABOVE REFERRED LETTER THAT NO FRESH COMMENT IS TO BE OFFE RED, AS THE ASSESSEE HAS NOT FURNISHED ANY ADDITIONAL EVIDENCES. THE LD.COU NSEL ALSO MENTIONED ABOUT THE ASSESSEES LETTER DATED 27.12.2010 EXPLAI NING THAT GP HAS REDUCED DUE TO INCREASE IN THE COST OF DIRECT MATER IAL AND LABOUR COMPARED TO THE F.Y.2006-07 AND 2005-06 AND FURTHE R CLARIFIED THAT THE NET PROFIT RATIO HAS INCREASED TO 6% IN THE F.Y.200 7-08 COMPARED TO 5% IN THE F.Y.2006-07. 7. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE RELEVANT PART OF THE ORDER OF THE LD.CIT(A) READS A S UNDER: 6.5 I HAVE CONSIDERED THE ORDER PASSED BY THE AO, THE EVIDENCES PLACED ON RECORD AND ALSO THE REMAND REPORT SUBMITT ED BY THE AO. I FIND THAT THE ACTION OF THE AO INVOKING SECTION 1 45 OF THE INCOME-TAX ACT DOES NOT HAVE ANY SOUND-FOOTING AS N O SPECIFIC DEFECT IN THE AUDITED ACCOUNT NOR IN THE EVIDENCES, WHICH WERE ADMITTEDLY FURNISHED DURING THE COURSE OF ASSESSMEN T PROCEEDINGS, WERE POINTED OUT BY THE AO. IT MAY BE HIGHLIGHTED T HAT THE IN THE REMAND REPORT, THE AO HAS AGREED THAT NONE OF THE E VIDENCES FILED ITA NO.672/AHD/2013 5 DURING THE COURSE OF APPELLATE PROCEEDINGS ARE ADDI TIONAL EVIDENCES. ACCORDINGLY, SUCH EVIDENCES WERE BEFORE THE AO BEFORE FINALIZATION OF THE ORDER U/S. 143(3) OF THE ACT BY HIM. IN THE ORDER FRAMED BY THE AO, NOT EVEN A SINGLE DEFECT HAS BEEN POINTED OUT BY THE AO FOR THE DETAILS FILED BY THE APPELLANT IN SU PPORT OF FIGURES IN THE RETURNED INCOME FILED BY IT. ACCORDINGLY, I AM OF THE VIEW THAT THE ACTION OF THE AO FOR INVOKING PROVISIONS OF SEC TION 145 IS NOT TENABLE. GROUND NOS. 1 & 2 ARE THUS ALLOWED. 7. AS REGARDS THE GROUND NO. 3 ABOUT THE MERIT OF A DDITION OF RS.45,53,246/- MADE BY A.O. BY ADOPTING G.P. AT 13% , THE ID A.R. SUBMITTED THAT IN THE APPELLANT'S LETTER DATED 27.1 2.2010, THE G.P AND N.P. PERCENTAGE WERE GIVEN ALONG WITH FIGURES O F WORKING OF G.P. AND N.P. THE ID A.R BROUGHT TO MY NOTICE THAT FROM THE SAID WORKING, IT WAS EVIDENT THAT IN TERMS OF PERCENTAGE , THE COST OF MATERIAL AND LABOUR WHICH WAS 80.63% OF THE SALES I N ASST. YEAR 2007-08, IT HAD INCREASED TO 89.64 % IN ASST. YEAR 2008-09 I.E. YEAR UNDER APPEAL. THE COST OF MATERIAL AND LABOUR WAS RS.9,54,76,368 AGAINST SALES OF RS. 11,84,15,055 IN ASST. YEAR 2007-08 WHICH ROSE TO RS.22,81,76,534 AGAINST SALES OF RS.25,39,72,616/- THIS WAS THE MAIN REASON FOR FALL IN G.P. WHICH WAS EXPLAINED ALONG WITH ABOVE FIGURES . THE ID A.R . FURTHER VEHEMENTLY ARGUED THAT WHEN THE SELF SAME A.O. ACCE PTED BOOK RESULTS AS PER ACCOUNTS MAINTAINED ON CONSISTENT BA SIS FROM YEAR TO YEAR IN ASST. YEAR 2007-08 IN WHICH ALSO, THERE WAS A FALL IN G.P. DUE TO INCREASE IN SALES AND INCREASE IN DIREC T COST, HOW THE RESULT FOR THE YEAR UNDER APPEAL COULD BE REJECTED WHEN SALES HAD ALMOST MORE THAN DOUBLED AND COST HAD INCREASED BY ABOUT 9%. HE RELIED ON THE CASE LAWS ATTACHED AT PAGE 18 TO 2 4 OF AHMEDABAD TRIBUNAL IN WHICH IT IS HELD THAT WHEN BO OKS OF ACCOUNT ARE AUDITED UNDER S. 44AB NO ADDITION FOR L OW G.P. CAN BE MADE WHEN NO SPECIFIC ITEM OF DEFECT IN THE ACCOUNT S IS FOUND AND THAT MAINTAINING A STATIC G.P IS NOT FEASIBLE. THE ID A.R. ALSO RELIED ON THE DECISION OF AHMEDABAD TRIBUNAL IN THE CASE OF KIRAN CONSTRUCTION ITA NO. 1203/AHD/ 2005 A COPY OF WHICH WAS FURNISHED DURING HEARING OF APPEAL IN WHICH EVEN IN A CASE WHERE THE ASSESSEE HAD NOT CHALLENGED THE REJECTION OF BO OK RESULTS U/S 145 AND SEVERAL DEFECTS WERE NOTICED, A NET PROFIT OF 5% WAS ESTIMATED IN SIMILAR BUSINESS WHEREAS THE NET PROFI T FOR THE YEAR ITA NO.672/AHD/2013 6 UNDER APPEAL WAS 6% WHICH WAS MORE THAN NET PROFIT OF 5% IN THE APPELLANT'S OWN CASE IN IMMEDIATE PRECEDING YEAR. T HE ID A.R. SUBMITTED THAT G.P IS A BALANCING FIGURE WHEN ALL I TEMS OF TRADING ACCOUNT ARE FULLY VOUCHSAFED AND VERIFIED AND CERTI FIED BY THE AUDITORS. HE THEREFORE SUBMITTED THAT THERE IS ABSO LUTELY NO JUSTIFICATION FOR MAKING ANY ADDITION ON ACCOUNT OF G.P. BOTH ON FACTS AND IN VIEW OF ABOVE LEGAL POSITION SETTLED B Y BINDING JURISDICTIONAL TRIBUNAL DECISIONS. 7.2 I HAVE CONSIDERED THE ORDER OF THE AO, THE EVID ENCES PLACED BEFORE ME BY THE APPELLANT AND THE REMAND REPORT IN THE MATTER. CONSIDERING THE DETAILS DISCUSSION ABOVE AND ALSO T HE DISCUSSION MADE IN RESPECT OF GROUND NOS. 1 & 2 WHICH ARE ALLO WED ABOVE, I AM OF THE VIEW THAT THE AO IS NOT JUSTIFIED IN ADOP TING THE GROSS FIGURE OF 13% AS HAS BEEN DONE BY HIM IN PARA 3.5 O F HIS ORDER. CONSEQUENTLY, THE ADDITION OF RS.45,53,246/- MADE B Y THE ASSESSING OFFICER HAS NO BASIS. THE SAME IS THUS DI RECTED TO BE DELETED. GROUND NO. 3 IS THEREFORE ALLOWED. WE FIND THAT THE LD.CIT(A) HAS EXAMINED THE ISSUE INVOLVED IN ITS CORRECT PERSPECTIVE, AND HAVE ASSIGNED COGENT REASO NS FOR NOT APPROVING THE ORDER PASSED BY THE AO. WE ALSO NOTICED THAT S ALES DURING THE YEAR WAS INCREASED FROM RS.11,94,15,055/- IN THE ASSTT.Y EAR 2007-08 TO RS.25,39,72,616/- IN THE ASSTT.YEAR 2008-09. THERE IS A TREMENDOUS INCREASE IN THE SALE WHICH IS MORE THAN DOUBLE COMP ARED TO THE PRECEDING YEAR. THE GP HAS REDUCED DUE TO INCREASE IN THE COST OF DIRECT MATERIAL AND LABOUR COMPARED TO THE F.Y. 2006-07 AN D F.Y.2005-06 AND IT IS ALSO SEEN THAT THE NET PROFIT RATIO HAS INCRE ASED TO 6% IN THE F.Y.2007-08 COMPARED TO 5% IN THE F.Y.2006-07. IN VIEW OF THE ABOVE STATED FACTS AND CIRCUMSTANCES, WE UPHOLD THE ORDER OF THE LD.CIT(A) AND THE APPEAL OF THE REVENUE IS REJECTED ON THIS GROUN D. ITA NO.672/AHD/2013 7 8. IN THE SECOND GROUND, THE GRIEVANCE OF THE REVEN UE IS THAT THE LD.CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF DEPRECIATION OF RS.2,70,978/- IN RESPECT OF MOTOR CAR. 9. BRIEF FACTS OF THE CASE ARE THAT THE AO DURING T HE ASSESSMENT PROCEEDING FOUND THAT THE ASSESSEE HAS CLAIMED TOTA L DEPRECIATION OF RS.3,77,503/- WHICH INCLUDED ASSETS WHICH WERE NEWL Y PURCHASED. THE CASE OF THE ASSESSEE IS THAT THE ASSESSEE-COMPANY W AS HAVING CONTROL OVER THE ASSETS AND THAT ASSETS WERE USED FOR THE B USINESS PURPOSE. HOWEVER, THE AO HAS NOT ACCEPTED THIS CONTENTION OF THE ASSESSEE AND HELD THAT IN ORDER TO CLAIM DEPRECIATION, ASSET MUS T BE OWNED BY THE ASSESSEE AND MUST BE USED FOR BUSINESS PURPOSES DUR ING THE RELEVANT PREVIOUS YEAR. SINCE ASSESSEE HAS NOT FURNISHED EV IDENCE OF OWNERSHIP OF THE ASSETS, CLAIM OF DEDUCTION ON ACCOUNT OF DEP RECIATION WAS DENIED BY THE AO. IN THE FIRST APPEAL BEFORE THE LD.CIT(A ), THE ASSESSEE CHALLENGED THIS ADDITION. THE LD.CIT(A) RELYING UP ON THE DECISION OF ITAT, AHMEDABAD IN THE CASE OF ITO VS. TYPHOON FINA NCIAL SERVICES P.LTD. ITA NO.1703/AHD/2009 ORDER DATED 21.1.2011 A ND ALSO STUDIO 3 ARCHITECH P.LTD., ITA NO.1841/AHD/2009 ORDER DATED 21.01.2011 ALLOWED THE CLAIM OF THE ASSESSEE. 10. BEFORE US, THE LD.DR CONTENDED THAT THE LD.CIT( A) IS NOT CORRECT IN ALLOWING THE CLAIM OF DEPRECIATION OF THE ASSESSEE, AS THE ASSESSEE HAS FAILED TO SUBSTANTIATE ITS CLAIM FOR ADDITION TO FI XED ASSETS (VEHICLES) AND DEPRECIATION WITH TENABLE EVIDENCES. SHE RELIED ON THE ORDERS OF THE AO. THE LD.COUNSEL RELIED ON THE ORDER OF THE LD.CIT(A) . THE LD.CIT(A) RELIED ON THE DECISION OF AHMEDABAD TRIBUNAL IN THE CASE OF ITO VS. ITA NO.672/AHD/2013 8 TYPHOON FINANCIAL SERVICES P.LTD. ITA NO.1703/AHD/2 009 ORDER DATED 21.1.2011 AND ALSO STUDIO 3 ARCHITECH P.LTD., ITA N O.1841/AHD/2009 ORDER DATED 21.01.2011. THE BENEFIT OF DEPRECIATIO N CANNOT BE DENIED WHEN THE ASSETS LIKE MOTOR CAR IS PURCHASED FOR VAL UABLE CONSIDERATION AND IS DEBITED AS ASSETS IN THE BOOKS OF THE ASSESS EE, EVEN IF THE SAME STAND IN RTO RECORDS OR BILLED IN THE NAME OF DIREC TORS. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, PERUSED THE MATER IAL AS PER THE RECORDS AND UPHOLD THE DECISION OF THE LD.CIT(A) ON THIS GR OUND. 11. IN THE THIRD GROUND OF APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN DELETING THE DISALLOWANC E OF EXPENSES OF RS.9,89,044/- OUT OF EXPENSES CLAIMED ON RENT, RATE S AND TAXES AS WELL LEGAL EXPENSES TOTALING TO RS.37,58,920/-. 12. ON PERUSAL OF THE RETURN OF INCOME, THE AO NOTI CED THAT ASSESSEE HAS CLAIMED RENT, RATE AND TAXES OF RS.30,23,627/- AND LEGAL & PROFESSIONAL EXPENSES OF RS.7,35,293/-. ASSESSEE W AS ASKED TO FURNISH EVIDENCES IN SUPPORT OF GENUINENESS AND CORRECTNESS OF THE EXPENSES. HOWEVER, THE ASSESSEE COULD SUBMIT EVIDENCE FOR SAL ES TAX PAYMENT OF RS.25,09,605/-, SERVICE TAX OF RS.6,227/-, RENT OF RS.2,53,044/- AND PROFESSION TAX OF RS.1,000/-. ACCORDING TO THE AO, THE ASSESSEE COULD NOT DISCHARGE ITS PRIMARY ONUS TO SUBSTANTIATE ITS CLAIM, THEREFORE, THE AO IN THE ABSENCE OF ANY INFORMATION/DETAIL DISALLO WED TOTAL EXPENSES OF RS.9,89,044/-. HOWEVER, IN THE FIRST APPEAL THE LD .CI(A) HAS DELETED THE ADDITION MADE BY THE AO. THE RELEVANT OBSERVATIONS OF THE LD.CIT(A) ON THIS ISSUE READS AS UNDER: ITA NO.672/AHD/2013 9 9.2 BEFORE ME, THE ID A.R. SUBMITTED THAT THE APPEL LANT HAD FURNISHED ALL DETAILS OF ABOVE EXPENDITURE ALONG WI TH ITS LETTER DATED 13.12.2010 AT SR NO. 15 & 16 , LIKE LEDGER AC COUNT SHOWING THE AMOUNT AND THE NAME OF PAYEE, COPY OF RENT AGRE EMENT TOO WAS FURNISHED WITH ITS LETTER DATED 16.12.2010 AND FURT HER THE DETAILS WERE FURNISHED WITH LETTER DATED 27.12.2010 COPIES OF WHICH WERE ATTACHED WITH WRITTEN SUBMISSIONS. HE DREW ATTENTIO N TO SR NO 15 & 16 OF APPELLANT'S LETTER DATED 13.12.2010 IN WHIC H DETAILS OF OFFICE RENT OF R RS.4,96,768 IS GIVEN AND LEGAL AND PROFESSIONAL FEES EXPENSES OF RS.7,35,293 ARE GIVEN. THE SAME WE RE AGAIN REPEATED IN APPELLANT'S LETTER DATED 27.12.2010 WHI CH GAVE COMPLETE BREAK UP OF RS.30,23,627 BEING EXPENSES UN DER THE HEAD RENT, RATES AND TAXES. IT WAS SUBMITTED THAT DESPIT E ABOVE DETAILS AND ABUNDANT EVIDENCES FURNISHED, THE ID A.O FOR TH E REASONS BEST KNOWN TO HIM, DID NOT LOOK IN TO THOSE DETAILS AND IN GREAT HASTE WITHIN FEW DAYS OF FURNISHING DETAILS, MADE DISALLO WANCE BY PUTTING BLAME ON APPELLANT. HE FURTHER SUBMITTED TH AT THE ABOVE PAYMENTS ARE MADE BY BANKING CHANNEL AND ARE INCURR ED EVERY YEAR WHICH ARE VOUCHSAFED AND CERTIFIED BY AUDITORS IN THEIR REPORT WITHOUT ANY QUALIFICATION. HE SUBMITTED THAT IT IS ONE THING TO SAY THAT DETAILS AND EVIDENCE WERE NOT FURNISHED AND AN OTHER THING TO OBSERVE THAT EVIDENCES WERE NOT FURNISHED WITHOUT A NY QUERY OR EXAMINATION OF DETAILS AND EVIDENCES. 9.3 I HAVE CONSIDERED THE ABOVE SUBMISSIONS OF THE ID A.R. AND THE OBSERVATIONS OF THE A.O. AND I FIND THAT DETAILS SU BMISSIONS FOR CLAIM OF RENT, RATES AND TAXES HAVE BEEN MADE BY TH E APPELLANT THE GIST OF THE MAIN DETAILS IS REPRODUCED IN THE PRECE DING PARA. IN VIEW OF THE DETAILS FURNISHED WHICH HAVE ALSO NOT B EEN DISPUTED BY THE AO IN THE REMAND PROCEEDINGS, I FIND NO BASIS T O SUSTAIN THE DISALLOWANCE OF RS.9,89,044/-. GROUND NO. 5 RAISED BY THE APPELLANT IS THUS ALLOWED. 13. THE LD.DR RELIED ON THE ORDER OF THE AO AND CON TENDED THAT THE LD.CIT(A) IS NOT CORRECT IN DELETING THE DISALLOWAN CE OF RS.9,89,044/- MADE BY THE AO OUT OF EXPENSES AS RENT, RATES OR TA XES, LEGAL & PROFESSIONAL EXPENSES. ON THE OTHER HAND, THE LD.C OUNSEL RELIED ON THE ITA NO.672/AHD/2013 10 ORDER OF THE LD.CIT(A) AND CONTENDED THAT DURING TH E COURSE OF ASSESSMENT PROCEEDINGS VIDE LETTER DATED 27.12.2010 , THE DETAILS OF THESE EXPENSES WERE FURNISHED BEFORE THE AO ALONG WITH BR EAK-UP OF THESE EXPENSES. THE LD.CIT(A) HELD THAT DETAILED SUBMISS ION FOR CLAIM OF RENT, RATES AND LEGAL & PROFESSION CHARGES WERE MADE BEFO RE THE AO AND THE SAME ALSO NOT DISPUTED BY THE AO IN THE REMAND PROC EEDINGS. AFTER CONSIDERING THE SUBMISSION OF BOTH THE PARTIES AND PERUSAL OF THE RECORDS, WE UPHOLD THE ORDER THE DECISION OF THE LD.CIT(A) O N THIS GROUND. 14. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON 5 TH SEPTEMBER, 2016 AT AHMEDABAD. SD/- SD/- ( SHAILENDRA YADAV) JUDICIAL MEMBER ( AMARJIT SINGH ) ACCOUNTANT MEMBER