JOHN GALT INTERNATONAL, MUMBAI V. ACIT 19(1), MUMBAI

ITA 6781/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3011 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: J
• Assessment Year: 2010-2011
• Appeal Filed On: 07-11-2014
• Court: TRIBUNAL
• Department Lawyers: ASJHAR ZAIN V P
• Assessee Lawyers: R S KHANDELWAL
• Keywords: Rejection of books of accounts; Capital asset; Corroborative evidences
• Section: 43B; 143(3)

Judgement Text

, , J , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J, MUMBAI , , , BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.6781/MUM/2014 ASSESSMENT YEAR: 2010-11 JOHN GALT INTERNATIONAL, A-1, MAYA BLDG. PLOT NO.533 17 TH FLOOR, KHAR (W) MUMBAI-400052 / VS. A CIT, 19 ( 1 ) PIRAMAL CHAMBERS, PAREL MUMBAI-400012 (ASSESSEE ) (REVENUE) P.A. NO. AACFJ7761M ITA NO.7244/MUM/2014 ASSESSMENT YEAR: 2010-11 ACIT, 22(1) PIRAMAL CHAMBERS, PAREL MUMBAI-400012 / VS. JOHN GALT INTERNATIONAL, A-1, MAYA BLDG. PLOT NO.533 17 TH FLOOR, KHAR (W) MUMBAI-400052 (REVENUE) (RESPONDENT) P.A. NO. AACFJ7761M APPELLANT BY SHRI R.S. KHANDELWAL ( A R) RESPONDENT BY SHRI ASJHAR ZAIN V.P. ( D R) / DATE OF HEARING: 30/05/2016 / DATE OF ORDER: 29/06/2016 / O R D E R JOHN GALT INTERNATIONAL 2 PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THESE CROSS APPEALS HAVE BEEN FILED AGAINST THE ORD ER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) MUMBAI, {( IN SHORT CIT(A)}, DATED 22.09.2014 PASSED AGAINST ASSESSME NT ORDER U/S 143(3) OF THE ACT, FOR THE ASSESSMENT YEAR 2010 -11 2. DURING THE COURSE OF HEARING, ARGUMENTS WERE MADE B Y SHRI R.S. KHANDELWAL, AUTHORISED REPRESENTATIVE (AR ) ON BEHALF OF THE ASSESSEE AND BY SHRI ASJHAR ZAIN V.P. , DEPARTMENTAL REPRESENTATIVE (DR) ON BEHALF OF THE R EVENUE. FIRST WE SHALL TAKE UP REVENUES APPEAL IN ITA NO.7244/MUM/2014 FOR A.Y. 2010-11 THE REVENUE HAS FILED APPEAL ON FOLLOWING GROUNDS: '1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) ERRED IN HOLDING THAT THE ASSESS ING OFFICER WRONGLY REJECTED THE BOOKS OF ACCOUNT AND F URTHER IN DELETING THE ADDITION OF RS.1,05,75,670/- FOR AY 2010- 11 TOWARDS PURCHASES WITHOUT APPRECIATING THAT THE ASSESSEE WAS UNABLE TO PRODUCE EVIDENCE IN SUPPORT OF THE PURCHASES. 2.THE APPELLANT PRAYS THAT THE ORDER OF THE C!T(A) ON THE ABOVE GROUND BE SET-ASIDE AND THAT OF THE AO BE RES TORED. 3.THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY.' 3. THE SOLITARY ISSUE RAISED IN THIS APPEAL BY THE RE VENUE IS WITH REGARD DELETING THE ADDITION OF RS.1,05,75,670 /- ON ACCOUNT OF DIFFERENCE IN PURCHASES MADE BY THE AO W HICH WAS DELETED BY THE LD. CIT(A). JOHN GALT INTERNATIONAL 3 3.1. THE BRIEF BACKGROUND OF THIS CASE IS THAT DURING T HE YEAR UNDER CONSIDERATION, THE ASSESSEE WAS ENGAGED IN TH E BUSINESS OF FABRICATION AND MANUFACTURING OF ENGINE ERING PRODUCTS. DURING THE COURSE OF ASSESSMENT PROCEEDIN GS, THE AO NOTED DISCREPANCY IN THE PURCHASE ACCOUNT, SALE ACCOUNT AND ITS DEBTORS ACCOUNT. ON THE BASIS OF THE SAME, THE AO REJECTED THE BOOKS OF ACCOUNTS AND ESTIMATED THE IN COME BY ESTIMATING THE G.P. RATIO OF 15% AND ACCORDINGLY, A DDITION WAS MADE IN THE ASSESSMENT ORDER. 3.2. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFO RE THE LD. CIT(A) AND MADE EXHAUSTIVE SUBMISSIONS TO IMPRE SS UPON THE POINT THAT, IN FACT, THERE WERE NO DISCREPANCIE S. IT WAS SUBMITTED THAT THE AO COULD NOT APPRECIATE THE FACT S PROPERLY AND THAT IS HOW HE NOTED DISCREPANCIES. THE ASSESSE E ALSO FILED RECONCILIATION IN PURCHASE ACCOUNT, SALES ACCOUNT A ND DEBTOR ACCOUNTS. AFTER ANALYZING THE FACTS, IT WAS NOTED B Y THE LD. CIT(A) THAT IN FACT THERE WAS NO DIFFERENCE AND THE REFORE THE AO HAD WRONGLY REJECTED THE BOOKS OF ACCOUNTS AND ACCO RDINGLY ADDITION MADE BY THE AO WAS DIRECTED TO BE DELETED. 3.3. DURING THE COURSE OF HEARING BEFORE US, IT WAS SUB MITTED BY THE LD. DR SINCE ASSESSEE COULD NOT EXPLAIN THE FACTS PROPERLY TO THE AO, THE ACCOUNTS WERE RIGHTLY REJEC TED. BUT, IN RESPONSE TO OUR QUERY, THE LD. DR SUBMITTED THAT LD . CIT(A) HAS GIVEN FACTUAL FINDINGS TO RECONCILE THE ALLEGED DIFFERENCE IN ALL THE THREE AREAS WHEREIN LD. DR WAS NOT ABLE TO POINT OUT ANYTHING WRONG. JOHN GALT INTERNATIONAL 4 3.4. PER CONTRA, LD. COUNSEL OF THE ASSESSEE DREW OUR A TTENTION ON VARIOUS PAGES OF THE PAPER BOOK AS WELL AS DETAI LED FINDINGS RECORDED BY THE LD. CIT(A) AND ARGUED THAT LD. CIT( A) HAS CONSIDERED ALL THE FACTS AND FIGURES IN DETAIL AND THEREAFTER ARRIVED AT A CORRECT CONCLUSION THAT IN FACT THERE WAS NO DIFFERENCE. HE RELIED UPON THE DETAILED FINDINGS OF LD. CIT(A). IT WAS FURTHER SUBMITTED BY HIM THAT PERUSAL OF THE G. P. CHART OF PAST 5 YEARS AS REPRODUCED BY THE AO IN THE ASSESSM ENT ORDER SHOWS THAT THE GP OF THE CURRENT YEAR WAS 9.92% WHI CH WAS HIGHER THAN THE G.P. OF THE EARLIER YEARS I.E. 8.52 %. THUS, IN ANY CASE, ACTION OF THE AO IN ESTIMATING THE GP @ 1 5% IS HIGHLY UNJUSTIFIED, UNFAIR AND WITHOUT ANY BASIS. U NDER THESE CIRCUMSTANCES, HE REQUESTED FOR UPHOLDING THE ORDER OF LD. CIT(A). 3.5. WE HAVE GONE THROUGH THE ORDER OF THE AO AS WELL A S LD. CIT(A) VERY CAREFULLY. WE FIND THAT LD. CIT(A) HAS CAREFULLY EXAMINED ALL THE THREE ISSUES OF ALLEGED DIFFERENCE AS WERE RAISED BY THE AO IN ASSESSMENT ORDER. IT IS NOTED B Y US THAT LD. CIT(A) ADDRESSED ALL THESE ISSUES ONE BY ONE. W ITH REGARD TO THE PURCHASES, IT IS NOTED BY US THAT THE ASSESS EE HAD FURNISHED RECONCILIATION OF PURCHASES AS UNDER: GROSS PURCHASE (AS PER PURCHASE RS.17,69,14,566 REGISTER INCLUDING CAPITAL ASSETS, BUT EXCLUDING DISCOUNT OF RS.19,73,811) LESS: VAT RS.74,66,643 16,94,47,923 LESS: FIXED ASSETS PURCHASE JOHN GALT INTERNATIONAL 5 (INCLUDED IN THE PURCHASE REGISTER TO AVAIL THE VAT CREDIT, BUT DOES RS.58,30,598 NOT INCLUDE VAT OF RS.6,53,461 ON THIS PURCHASE). PURCHASE AS PER P & L A/C RS.16,36,17,325 3.6. THUS, FROM THE ABOVE IT IS NOTED THAT THE ASSESSEE DULY RECONCILED THE PURCHASE OF ACCOUNTS. IN ADDITION TO THE ABOVE THE ASSESSEE FURNISHED FURTHER DETAILS AND EVIDENCE S TO CLEAR ALL THE DOUBTS WHICH WERE DULY CONSIDERED BY LD. CI T(A) AND DETAILED FINDINGS HAVE BEEN RECORDED, ACCEPTING THE CLAIM OF THE ASSESSEE THAT PURCHASE ARE DULY RECONCILED. DET AILED FINDINGS OF LD. CIT(A) ON THE ISSUE OF ALLEGED DIFF ERENCE IN PURCHASE ARE REPRODUCED AS UNDER: 3.3.2 I HAVE DULY CONSIDERED THE SUBMISSION OF THE APPELLANT AND FIND THAT ADDITION OF RS.1,03,06,867/ - ON ACCOUNT OF GROSS PROFIT HAS BEEN MADE BY THE A.O . ON THE BASIS OF FOLLOWING, OBSERVATIONS MADE BY HIM : 1. DISCREPANCY IN THE PURCHASES MADE IN THE F.Y. 2009- 10. 2. TOTAL PURCHASE APPEARING IN THE P&L ACCOUNT, IS RS. 16,36,17,324.97, WHEREAS IN THE PURCHASE REGISTER, THE TOTAL PURCHASE WAS SHOWN AT RS.16,5591,135, I.E. DIFFERENCE OF RS.19,73,810/-. THE A.O. HAS RECORDED THAT THE APPELLANT VIDE LETTE R DTD. 20.12.12 FURNISHED PARTY-WISE DETAILS OF PURCHASES MADE IN F.Y. 2009-10 AT RS.17,69,14,566/-. HE HAS ALSO MENTIONED THAT THIS AMOUNT IS EXCLUDING THE PURCHASES, BELOW RS.50,000/MADE BY THE APPELLANT. 3.3.3 THE APPELLANT IN ITS SUBMISSION HAS STATED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT HAS SHOWN THAT PURCHASES OF RS.17,69,14,566/- IS INCLUSIVE OF TAXES AND DUTIES AND AFTER JOHN GALT INTERNATIONAL 6 DEDUCTING THE TAXES AND DUTIES, REVISED LIST WAS ALSO FILED BEFORE THE A.O. WHICH WILL SHOW THE TOTAL PURCHASES OF MATERIAL AT R . S.16,36,17,325/-, THAT IS THE AMOUNT DEBITED IN THE P&L ACCOUNT. IN THE RE - CONCILIATION STATEMENT ALSO, THE APPELLANT HAS SHOWN GROSS PURCHASES AS PER PURCHASE REGISTER AT RS.17,69,14,566/- AND ALSO EXPLAINED THAT THE ABOVE PURCHASES ARE INCLUSIVE OF VAT AMOUNT OF RS.74,66,643/- AND WHEN THE SAME IS EXCLUDED, THE PURCHASES WITHOUT VAT COMES TO RS.16,94,47,923/-. IT IS FURTHER STATED THAT IN THE PURCHASE REGISTER, PURCHASE OF FIXED ASSETS, IS ALSO INCLUDED TO CLAIM SET OFF OF VAT PAID IN RESPECT OF PURCHASES. THE TO TAL AMOUNT RELATING TO FIXED ASSETS IS RS.58,30,598/- AND IF THE SAME IS REDUCED FROM THE ABOVE AMOUNT OF RS.16,94,47,923/-, THE RESULTANT FIGURE TALLIES WITH THE PURCHASE AMOUNT OF RS.16,36,17,325/ . DEBITED IN THE P&L ACCOUNT AND ALSO MENTIONED IN THE ORDER. IN THE SAID RESPECT, I FIND THAT THE .A.O. WHILE RECORDING IN THE ORDER TH AT THE APPELLANT VIDE REPLY DTD. 20. 12.12. HAS SHOWN PURCHASE MADE FROM 117 PARTIES AT RS. 17,69,14,566/- EXCLUDING THE PURCHASE BELOW RS.50,000/-, DOES NOT APPEAR TO BE CORRECT INTERPRETATION OF THE STATEMENT OF PURCHASE FURNISHED, AS THE ABOVE AMOUNT OF RS. 17,69,14,566/ - IS THE GROSS PURCHASE WITH THE VAT AMOUNT ON PURCHASE PLUS AMOUNT OF PURCHASE OF FIXED ASSETS EXCLUSIVE OF VAT AMOUNT. SIMILARLY, I FIND THAT THE A.O. HAS MENTIONED THAT THE APPELLANT VIDE LETTER DTD. 22.12.12 PRODUCED COPY OF PURCHASE REGISTER WHEREIN TOTAL OF PURCHASES WAS SHOWN AT RS.16,55,91,135/-. THIS AMOUNT OF PURCHASES IS THE GROSS PURCHASE, I.E. EXCLUDING THE VAT AMOUNT, BUT INCLUDING THE DISCOUNT AMOUNT OF RS:19,73,811. THE A.O. HAS ALSO MENTIONED THAT THE APPELLANT PRODUCED PARTY-WISE DETAILS OF 117 PARTIES. THESE DETAILS SHOW THE AMOUNT OF NET PURCHASE, VAT ON PURCHASE AND PURCHASE OF 'FIXED ASSETS' AND VAT ON FIXED ASSETS. THE TOTAL OF NET PURCHASE COMES TO RS.16,36,17,325/-, AND THE SAME AS IN RECONCILIATION STATEMENT. THE TOTAL OF VAT ON JOHN GALT INTERNATIONAL 7 PURCHASES IS RS.74,66,643/-, AND THE TOTAL OF FIXED ASSETS PURCHASED DURING THE YEAR IS RS.58,30,598/- . THE VAT AMOUNT ON FIXED ASSETS IS RS.6,53,461/-, WHICH THE APPELLANT HAS DIRECTLY POSTED TO VAT ACCOUNT. THE TOTAL GROSS PURCHASE INCLUSIVE OF FIXE D ASSETS AND VAT, THEREFORE, COMES TO RS. 1 . 7,75,68,027/- AND THE TOTAL OF PURCHASES EXCLUDING PURCHASES OF 'FIXED ASSETS, BUT INCLUDING VAT, COMES TO RS.17,10,83,968/-. THEREFORE, THE RECONCILIATION FURNISHED BY THE APPELLANT DEALS WITH THE TOTAL OF PURCHASES INCLUSIVE OF VAT (EXCLUDING THE AMOUNT OF FIXED ASSETS), WHICH AS PER THE PARTY-WISE DETAILS COMES TO RS.17,10,83,968/-(17,69,14,566-58,30,598). THUS, THERE BEING NO DISCREPANCY IN THE PURCHASE ACCOUNT, THE SAME CANNOT BE A REASON FOR REJECTION OF BOOKS OF ACCOUNTS OF THE APPELLANT. 3.7. SIMILARLY WITH REGARD TO THE DISCREPANCIES NOTICED IN SALES ACCOUNT ALSO IT WAS FOUND BY THE LD. CIT(A) THAT SA ME ARE DULY TALLIED AND IN FACT THERE WAS NO DIFFERENCE; RELEVA NT FINDINGS OF LD. CIT(A) ARE REPRODUCED AS UNDER: 3.3.4 THE SECOND DISCREPANCY NOTICED BY THE A.O. I S IN THE SALE MADE IN THE F.Y. 2009-10. THE AO. HAS OBSERVED THAT IN THE P&L ACCOUNT, THE APPELLANT HAS SHOWN TOTAL SALE CONSIDERATION AT RS.16,52,25,906/- AND THE GROSS SALES INCLUDING DUTY AND TAXES OF RS. 130,32,970/-, IS RS. 17,79,49,287/- AND THERE IS DISCOUNT RECEIVED OF RS.3,09,589 AND NET BALE IS OF RS.16,52,25,906/-. THE AO HAS ALSO RECORDED 'THAT FOR THE PURPOSE OF VALUATION OF PURCHASE AND SALE, SECTION 145A(II) OF THE ACT IS APPLICABLE AND THE APPELLANT HAS SHOWN THE SALE CONSIDERATION EXCLUDING DUTY AND TAXES. ON ACCOUNT OF THE SAID DISCREPANCY/OBSERVATION MADE BY HIM, THE A.O. REJECTED THE BOOKS OF ACCOUNTS OF THE APPELLANT. 3.3.5. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE APPELLANT HAS SUBMITTED THAT THERE IS NO DISCREPANC Y IN JOHN GALT INTERNATIONAL 8 THE BOOKS OF ACCOUNT. THE APPELLANT HAS ALSO FURNIS HED THE RECONCILIATION OF SALES, WHEREIN GROSS SALES AS PER SALES REGISTER IS RS.17,79,49,287/-, I.E. SAME AS MENTIONED BY THE A.O. IN THE ORDER WHICH IS INCLUSI VE OF VAT AND CST OF RS.1,23,21,720/- AND SERVICE TAX OF RS.7,30,250/-. THE TOTAL OF THE ABOVE AMOUNTS COMES TO RS. 1,30,32,970/-, WHICH IS THE SAME AS MENTIONED B Y THE A.O. THE NET SALES IS RS.16,49,16,370/- AND AFT ER DISCOUNT RECEIVED OF RS.3,09,589 IS ADDED, THE TOTA L SALES IS RS.16,52,25,906/-, WHICH IS AS PER THE P&L ACCOUNT. 3.3.6. I, THEREFORE, FIND THAT THE APPELLANT IS FOL LOWING EXCLUSIVE METHOD OF ACCOUNTING FOR DUTY AND TAXES AND THE SAME CANNOT BE REASON FOR REJECTION OF HOOK S OF ACCOUNT. 3.8. IT IS FURTHER NOTED BY US THAT WITH REGARD TO DEBT ORS ALSO LD. CIT(A) HAS FOUND THAT THE ACCOUNT ARE DULY MATC HED AND IN FACT THERE IS NO DISCREPANCY; RELEVANT FINDINGS OF HIS ORDER ARE REPRODUCED AS UNDER: A.O., DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT THE CLOSING BALANCE AS APPEARING IN TH E IN THE DEBTORS LIST FILED BY THE APPELLANT ON 3.7.12 I S RS.2,59,61,169/-. HOWEVER, VIDE SUBSEQUENT COPY OF LEDGER ACCOUNT FILED ON 21.12.12, IT HAS BEEN SHOWN AT RS.3,83,54,169/-. THE AO HAS ALSO OBSERVED THAT THE OPENING BALANCE IS RS.4,01,63,498/-, WHEREAS IN THE ORIGINAL LEDGER ACCOUNT, IT WAS RS.5,25,56,498/ -. THE APPELLANT HAS SUBMITTED THAT AN AMOUNT OF RS.1,23,93,000/- WAS RECEIVED AS ADVANCE FROM M/S BHARAT DYNAMIC IN THE EARLIER YEAR, WHICH WAS SHOW N AS ADVANCE AND NOT REFLECTED IN THE LIST OF DEBTORS AND, IF THE SAID AMOUNT IS ADDED TO THE BALANCE AMOUNT OF RS.2,59,61,169/-, CLOSING BALANCE COMES T O RS.3,83,54,169/-, WHICH IS SAME AS MENTIONED DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON 21.12.12, IT AL SO EXPLAINS THE DIFFERENCE IN THE OPENING BALANCE AMOU NT OF RS.4,01,63,498/- AS THE REVISED LEDGER ACCOUNT AND RS.5,25,56,498/- APPEARING IN THE ORIGINAL ACCOUNT. I, THEREFORE, DO NOT FIND THAT THIS CAN BE ONE OF THE REASONS JOHN GALT INTERNATIONAL 9 FOR REJECTION OF THE BOOKS OF ACCOUNT OF THE APPELL ANT. IN ANY CASE, THE A.O. HAS NOT ESTABLISHED AS-TO HOW BECAUSE OF THE SAID DIFFERENCE TRUE AND CORRECT INC OME OF THE APPELLANT CANNOT BE DETERMINED. 3.9. THUS, AFTER TAKING INTO ACCOUNT ALL THE FACTS AND EVIDENCES IT WAS HELD BY THE LD. CIT(A) THAT THERE WAS NO DIF FERENCE. ACCORDINGLY, IT WAS HELD THAT BOOKS OF ACCOUNTS WER E WRONGLY REJECTED BY THE AO. IT WAS FURTHER HELD BY THE LD. CIT(A) THAT IF THERE WERE SOME UNPAID AMOUNTS WHICH WERE DISALLOWA BLE U/S 43B THEN THE SAME CAN BE MADE BY THE AO AND FOR THI S PURPOSE THE ISSUE HAS BEEN SENT BACK TO THE FILE OF THE AO. UNDER THESE CIRCUMSTANCES, WE FIND THAT LD. CIT(A) HAS BEEN QUITE FAIR AND JUSTIFIED WHILE ADDRESSING ALL THE I SSUES THAT WERE RAISED BY THE AO AND THE ASSESSEE. IT IS FURTH ER NOTED BY US DURING THE COURSE OF HEARING BEFORE US THAT LD. DR COULD NOR POINT OUT ANYTHING INCORRECT OR WRONG IN THE DE TAILED FINDINGS RECORDED BY THE LD. CIT(A) AND THEREFORE, WE DO NOT FIND ANY JUSTIFICATION TO MAKE ANY INTERFERENCE IN THE ORDER OF THE LD. CIT(A) AND THE SAME IS THEREFORE UPHELD. 4. IN THE RESULT, APPEAL FILED THE REVENUE IS DISMISS ED. NOW WE SHALL TAKE UP ASSESSEES APPEAL IN ITA NO.6781/MUM/2014 FOR A.Y. 2010-11: THE APPEAL HAS BEEN FILED BY THE ASSESSEE ON FOLLOW ING GROUNDS: 1.IN FACTS AND CIRCUMSTANCES OF THE CASE AND IN-LA W THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ERR ED JOHN GALT INTERNATIONAL 10 IN UPHOLDING THE ADDITIONS MADE BY THE LD. ASST COMMISSIONER OF INCOME TAX ON ACCOUNT OF EXPENSES. 2.THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) UPHELD THE ADDITIONS MADE BY THE ASST COMMISSIONER OF INCOME TAX WITHOUT CONSIDERING THE FACTS OF THE CAS E AND IGNORING THE VARIOUS DOCUMENTS PRODUCED AND VARIOUS EXPLANATIONS OFFERED TO HIM DURING THE COURSE OF HE ARING. 3.THE APPELLANT HEREBY PRAYS THAT THE ADDITIONS MAD E BY THE INCOME TAX OFFICER MAY KINDLY BE DELETED. 4. APPELLANT CRAVES TO ADD, ALTER, AMEND OR MODIFY ANY OF THE ABOVE SAID GROUNDS OF APPEAL TILL THE FINAL DISPOSAL OF APPEAL. 5. THE SOLITARY ISSUE RAISED BY THE ASSESSEE IS WITH REGARD TO DISALLOWANCE MADE BY THE AO ON ACCOUNT OF 1/3 RD OF VARIOUS EXPENSES. THE AO NOTED IN THE ASSESSMENT ORDER THAT ASSESSEE CLAIMED EXPENSES OF RS.35,59,716/- ON ACCOUNT OF SI TE EXPENSES, TELEPHONE EXPENSES, MEMBERSHIP & SUBSCRIP TION, STAFF WELFARE, TRAVELLING & CONVEYANCE, AND ENTERTA INMENT EXPENSE ETC. AND ASSESSEE DID NOT FURNISH EVIDENCES TO PROVE GENUINENESS OF THESE EXPENSES AND ACCORDINGLY HE MA DE AN ADHOC DISALLOWANCE @ OF 1/3 RD OF THE ABOVE EXPENSES AGGREGATING TO RS.11,86,572/-. 5.1. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFO RE THE LD. CIT(A) WHEREIN IT WAS SUBMITTED THAT ALL THE IN FORMATION AND DETAILS REQUIRED BY THE AO WERE DULY FILED DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS, BUT THE ABOVE DIS ALLOWANCE WAS MADE WITHOUT ANY SPECIFIC ADVERSAE OBSERVATIONS . ON THE OTHER HAND, LD. DR SUBMITTED THAT SINCE COMPLETE IN FORMATION WAS NOT PROVIDED, THEREFORE AN APPROPRIATE VIEW CAN BE TAKEN ON THIS ISSUE BY MAKING SOME DISALLOWANCE. JOHN GALT INTERNATIONAL 11 5.2. WE HAVE GONE THROUGH THE FACTS OF THIS CASE. IT IS NOTED THAT BOOKS OF ACCOUNTS WERE PRODUCED BY THE ASSESSE E BEFORE THE AO. BUT HE WAS NOT SATISFIED WITH REGARD TO THE SUPPORTING EVIDENCES FILED BY THE ASSESSEE AND ACCORDINGLY HE MADE DISALLOWANCE @ 1/3 RD OF THE TOTAL EXPENSES ON ESTIMATE BASIS. DURING THE COURSE OF HEARING BEFORE US IT WAS BROUG HT TO OUR NOTICE THAT IN A.Y. 2008-09, DISALLOWANCE HAS BEEN MADE @ OF 10% OF THESE EXPENSES WHICH ARE IDENTICAL IN NATUR E. THUS, TAKING INTO ACCOUNT ALL FACTS AND CIRCUMSTANCES OF THE CASE, WE DIRECT THE AO TO REDUCE THE DISALLOWANCE @ 10% OF RS.35,59,716/- WHICH COMES TO RS.3,55,972/-, THE RE MAINING DISALLOWANCE IS DIRECTED TO BE DELETED. THUS, THIS GROUND IS PARTLY ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED AND APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JUNE, 2016. SD/- (AMIT SHUKLA ) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER ' ! / ACCOUNTANT MEMBER MUMBAI; # DATED : 29 /06/2016 CTX? P.S/. .. JOHN GALT INTERNATIONAL 12 #$%&'(')% / COPY OF THE ORDER FORWARDED TO : 1. % &' / THE APPELLANT 2. ()&' / THE RESPONDENT. 3. * * ( % ) / THE CIT, MUMBAI. 4. * * / CIT(A)- , MUMBAI 5. -. / (01 , * % 012 , / DR, ITAT, MUMBAI 6. / 34 5 / GUARD FILE. / BY ORDER, ) -% ( //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI