Jamipol Ltd, Jamshedpur V. ACIT, Jamshedpur

ITA 68/RAN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8853 (ITAT-RANCHI)
• Duration Of Justice: 2 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 01-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: RAJIV RANJAN MITTAL LD
• Keywords: Gift; Business expenditure; Corroborative evidences
• Section: 143(3); 142(1); 234B; 115JB; 37

Judgement Text

1 ITA NOS.68 & 69/RAN/2016 IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE: SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIA L MEMBER I.T.A NO. 68/RAN/16 A.Y 2011-12 I.T.A NO. 69/RAN/16 A.Y 2012-13 M/S. JAMIPOL LTD PAN:AAACJ7475R APPELLANT VS. ACIT, CIR-2, JAMSHEDPUR RESPON DENT FOR THE APPELLANT : SHRI RAJIV RANJAN MITTAL, ADV OCATE, LD.A R FOR THE RESPONDENT : S/SHRI SANJAY PRASAD, CIT(A) , LD.SR.DR SANJAY MALIK, JCIT, LD.DR DATE OF HEARING : 26-02-2018 DATE OF PRONOUNCEMENT : 01-03-2018 ORDER PER BENCH: ABOVE TWO APPEALS BY THE ASSESSEE ARE AGAINST THE S EPARATE ORDERS DT. 18-12-2015 OF CIT(A), JAMSHEDPUR FOR TH E ASSESSMENT YEAR 2011-12 & 2012-13 RESPECTIVELY. SINCE THE ISSU ES RAISED IN BOTH THE APPEALS ARE COMMON EXCEPT VARIANCE OF FIGURES I N AMOUNT, AND ON SAME SET OF FACTS, THEREFORE, BOTH APPEALS WERE HEA RD TOGETHER AND DISPOSED OF THE SAME BY THIS COMMON ORDER FOR THE S AKE OF CONVENIENCE WITH THE CONSENT OF BOTH THE PARTIES. 2. FIRST, WE SHALL TAKE UP THE APPEAL IN ITA NO. 68 /RAN/2016 FOR THE A.Y 2011-12- BY THE ASSESSEE. ITA NO. 68/RAN/2016 FOR THE A.Y 2011-12 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A COMPANY AND ENGAGED IN THE BUSINESS OF MANUFACTURING AND SA LE OF DE- SULPHERISING COMPOUND AND CONSULTING FOR SETTING UP OF DS-STATION. THE ASSESSEE FILED ITS E-RETURN ON 30-09-201 DECLAR ING TOTAL INCOME OF 2 ITA NOS.68 & 69/RAN/2016 RS. 27,08,66,560/-. CONSIDERING THE ASSESSEES SUBM ISSIONS ALONG WITH DETAILS AND EVIDENCES, THE AO, DETERMINED THE TOTAL INCOME AT RS.27,18,48,780/- BY HIS ORDER DT. 06-03-2014 PASSE D U/S. 143(3) OF THE ACT BY MAKING THE FOLLOWING ADDITIONS:- I) RS. 4,01,828/- UNDER THE HEAD ADVERTISEMENT EXP ENSES II) RS.2,43,617/- UNDER THE HEAD ENTERTAINMENT & HOSPITALITY EXPENSES III) RS.27,18,48,776/- UNDER THE HEAD TOTAL EXPEN DITURE IV) RS.27,91,12,179/- U/S. 115JB OF THE ACT. 4. GROUND NO. 1 IS RELATING TO CONFIRMATION OF ADD ITION OF RS.4,01,828/- MADE ON ACCOUNT OF ADVERTISING EXPENS ES. 5. THE AO ON PERUSAL OF P & L ACCOUNT FOUND THAT T HE ASSESSEE DEBITED AN AMOUNT OF RS. 4,01,828/- UNDER THE HEAD ADVERTISEMENT EXPENSES. THE AO WAS OF THE VIEW THAT THIS EXPENDI TURE IS HIGH AND FOUND NOTINCURRED WHOLLY AND EXCLUSIVELY FOR THE PU RPOSE OF ASSESSEES BUSINESS AND DISALLOWED THE ENTIRE AMOUN T OF RS.4,01,828/- AND ADDED THE SAME TO THE TOTAL INCOM E OF ASSESSEE. 6. BEFORE THE CIT-A, IT WAS CONTENDED THAT THE TOTA L TURNOVER FOR THE A.Y UNDER CONSIDERATION OF RS.135.66 CRORES AND THE EXPENDITURE CLAIMED UNDER THE HEAD ADVERTISEMENT EXPENSES OF RS.4,01,828/- IS MEAGER AND, THE DISALLOWANCE @ 100% I.E RS.4,01, 828/- IS UNJUSTIFIED AND ARBITRARY. AFTER CONSIDERING THE AB OVE SUBMISSIONS OF THE ASSESSEE THE CIT-A CONFIRMED THE SAID ADDITION MADE BY THE AO. 7. BEFORE US THE LD. AR SUBMITS THAT SINCE INCEPTIO N OF THE ASSESSEE COMPANY THERE WAS NO DISALLOWANCE MADE IN THE EARLIER YEARS THE AO HAS WRONGLY MADE THIS ADDITION ON ADHO C BASIS AND ON THE GROUND THAT THE PRODUCT IS CUSTOMER SPECIFIC AN D EXPENDITURE DID NOT INCUR IN THE COURSE OF BUSINESS. THE LD.AR REFE RRED TO WRITTEN SUBMISSIONS FILED BEFORE US AND ARGUED THAT THE TUR NOVER OF THE ASSESSEE HAS INCREASED CONSTANTLY FROM 68.44 CRORE S IN THE A.Y 2007-08 TO RS.135.66 CRORES IN THE A.Y UNDER CONSID ERATION. HE FURTHER ARGUED THAT THERE IS A CONSIDERABLE INCREA SE IN THE MARKET 3 ITA NOS.68 & 69/RAN/2016 SHARE FROM THE EXISTING CUSTOMER AS WELL AS FROM TH E NEW CUSTOMERS AND THE SAID EXPENDITURE IS INCURRED ONLY FOR THE COMMERCIAL PURPOSE. HE ALSO SUBMITS THAT THE ASSESSEE HAS NOT INCURRED ANY EXPENDITURE COVERED U/S. 37(2) OF THE ACT AND CONSI DERING THE TURNOVER OF RS.135.66 CRORES ADVERTISEMENT EXPENSES CLAIMED IS MEAGER. THERE IS NO SPECIFIC ITEM BROUGHT ON RECOR D BY THE AO AND MADE ADDITION ON ADHOC BASIS IS NOT SUSTAINABLE IN THE EYE OF LAW. HE SUBMITTED THAT ENTIRE ADVERTISEMENT EXPENSES OF RS. 4,01,828/- IS LIABLE TO BE ALLOWED BEING BUSINESS EXPENDITURE. 8. ON THE OTHER HAND, THE LD.DR RELIED ON THE ORDER S OF AO & CIT- A. 9. HEARD RIVAL SUBMISSIONS AND PERUSED THE RECORD. WE FIND FROM THE ASSESSMENT ORDER THAT IN RESPONSE TO NOTICES IS SUED U/S. 143(2) AND 142(1) OF THE ACT BY THE AO, THE ASSESSEE PRODU CED THE BOOKS OF ACCOUNT, BANK STATEMENT, CASH BOOK, LEDGER ACCOUNT OF EXPENSES AND DETAILS OF OTHER ITEMS I.E INTEREST INCOME, BILLS A ND VOUCHERS ETC. AS REQUIRED BY THE AO. BEFORE US THE LD.AR OF THE ASSE SSEE FILED A COMPARATIVE CHART BY WAY OF A WRITTEN SUBMISSION, W HICH IS REPRODUCED HEREIN BELOW:- GROUND NO. 1- DISALLOWANCE OF ENTIRE ADVERTISEMENT EXPENSES OF RS.4,01,828/- ASST. YR. TURNOVER NET PROFIT ADVERTISEMENT EXP DISALLOWANCE REMARKS 2008-09 94,57,76,454 16,91,23,914 3,33,386 0 NO DIS ALLOWANCE 2009-10 1,09,55,91,905 15,00,26,314 7,62,304 0 NO D ISALLOWANCE 2010-11 1,35,05,13,693 19,01,57,253 4,59,896 0 NO D ISALLOWANCE 2011-12 1,35,66,57,068 19,12,07,659 4,01,828 4,01,8 28 100% ADHOC DISALLOWANCE 10. WE FIND THAT THE LD. DR DID NOT CONTROVERT THE ABOVE SUBMISSIONS OF THE LD.AR THAT NO SUCH DISALLOWANCES HAVE BEEN MADE IN THE EARLIER YEARS. ON PERUSAL OF ABOVE STATEMENT , WE FIND THAT NO DISALLOWANCE WAS MADE IN THE A.YS 2008-09, 09-10 & 10-11. WE FURTHER FIND THAT NO SUBMISSIONS WERE MADE BY THE L D.DR BEFORE US THAT THE APPEAL, IF ANY, CHALLENGING THE SAME IS PE NDING BEFORE THE TRIBUNAL OR THE HONBLE HIGH COURT. WE FIND THAT TH E CIT-A WAS NOT 4 ITA NOS.68 & 69/RAN/2016 CORRECT IN CONFIRMING THE SAME. IN VIEW OF ABOVE, N O DISALLOWANCE CAN BE MADE ON ADHOC BASIS. IT IS A SETTLED PRINCIPLE OF LAW THAT NO SUCH DISALLOWANCE CAN BE MADE ON ADHOC BASIS, WHICH IS N OT AT ALL MAINTAINABLE IN THE YE OF LAW. THEREFORE, THE GROUN D NO.1 RELATING TO ADDITION OF RS. 4,01,828/- CONFIRMED BY THE CIT-A I S DELETED. 11. GROUND NO.2 IS RELATING TO CONFIRMATION OF ADDI TION OF RS. 2,43,617/- ON ACCOUNT OF ENTERTAINMENT & HOSPITALIT Y EXPENSES. 12. ON PERUSAL OF P & L ACCOUNT THE AO FOUND THAT T HE ASSESSEE DEBITED AN AMOUNT OF RS.4,87,234/- UNDER THE HEAD ENTERTAINMENT & HOSPITALITY EXPENSES. THE AO HELD THAT THESE EXPE NDITURE WERE INCURRED IN RESPECT OF MDS OFFICE ON LUNCH, DINNER , SNACKS AT DIFFERENT RESTAURANTS AND CLUBS INVOLVING PERSONAL ELEMENTS A ND DISALLOWED RS.2,43,617/- AND ADDED THE SAME TO THE TOTAL INCOM E OF ASSESSEE. 13. THE LD. CIT-A AFTER CONSIDERING THE SUBMISSION S OF ASSESSEE AND BY RELYING ON THE ORDERS OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. KALKATTAA AGENCY LTD REPORTED IN (1 951) 19 ITR 191 (SC) AND THE HON BLE KARNATAKA HIGH COURT IN THE C ASE OF J.K PANTHAKI & CO. VS. ITO REPORTED IN (2012) 22 TAXMA NN. COM 49 (KAR) CONFIRMED THE ADDITION MADE BY THE AO. 14. BEFORE US THE LD.AR SUBMITS THAT THE ORDERS OF LOWER AUTHORITIES WERE BAD IN LAW AND CONTRARY TO THE FACTS ON RECORD . IN SUPPORT OF HIS CONTENTION, HE REFERRED TO WRITTEN SUBMISSIONS FILE D BEFORE US AND ARGUED THAT THERE IS NO SUCH DISALLOWANCE IN THE PA ST YEAR SINCE INCEPTION OF THE COMPANY. THE EXPENSES HAVE BEEN IN CURRED FOR SERVING TEA, COFFEE, LUNCH, DINNER OR SNACKS AT DIF FERENT RESTAURANT AND CLUBS FOR THE STAFF AS WELL AS CUSTOMERS AND OT HER PERSONS INCLUDING MDS OFFICE FOR THE PURPOSE OF BUSINESS. THE ASSESSEE COMPANY HAS INCURRED RS.4,87,234/- FOR THE ENTIRE Y EAR UNDER CONSIDERATION ON TOTAL TURNOVER OF RS.135.66, WHICH IS MEAGER AND 5 ITA NOS.68 & 69/RAN/2016 REASONABLE AND ALLOWABLE U/S. 37 OF THE ACT. THE AO MADE THE ADDITION ON ADHOC BASIS, WHICH IS NOT SUSTAINABLE I N THE EYE OF LAW. HE ALSO SUBMITTED BEFORE US THAT NO SUCH DISALLOWANCE WAS MADE IN THE EARLIER A.YS 2008-09, 09-10 & 10-11. 15. ON THE OTHER HAND, THE LD.DR RELIED ON THE ORDE RS OF THE AO AND CIT-A. 16. HEARD RIVAL SUBMISSIONS AND PERUSED THE RECORD. WE FIND FROM THE ASSESSMENT ORDER THAT IN RESPONSE TO NOTICES IS SUED U/S. 143(2) AND 142(1) OF THE ACT BY THE AO, THE ASSESSEE PRODU CED THE BOOKS OF ACCOUNT, BANK STATEMENT, CASH BOOK, LEDGER ACCOUNT OF EXPENSES AND DETAILS OF OTHER ITEMS I.E INTEREST INCOME, BILLS A ND VOUCHERS ETC. AS REQUIRED BY THE AO. BEFORE US THE LD.AR OF THE ASSE SSEE FILED A COMPARATIVE CHART BY WAY OF A WRITTEN SUBMISSION, W HICH IS REPRODUCED HEREIN BELOW:- GROUND NO. 2- DISALLOWANCE OF 50% OF ENTERTAINMENT EXPENSES & HOSPITALITY EXPENSES, ADDITION OF RS.2,43,617/- ASST. YR. TURNOVER NET PROFIT ENTERTAINMENT EXP DISALLOWANCE REMARKS 2008-09 94,57,76,454 16,91,23,914 4,27,873 0 NO DIS ALLOWANCE 2009-10 1,09,55,91,905 15,00,26,314 3,60,151 0 NO D ISALLOWANCE 2010-11 1,35,05,13,693 19,01,57,253 3,75,809 0 NO D ISALLOWANCE 2011-12 1,35,66,57,068 19,12,07,659 4,87,234 2,43,6 17 50% ADHOC DISALLOWANCE 17. WE FIND THAT THE LD. DR DID NOT CONTROVERT THE ABOVE SUBMISSIONS OF THE LD.AR THAT NO SUCH DISALLOWANCES HAVE BEEN MADE IN THE EARLIER YEARS. ON PERUSAL OF ABOVE STATEMENT , WE FIND THAT NO DISALLOWANCE WAS MADE IN THE A.YS 2008-09, 09-10 & 10-11. WE FURTHER FIND THAT NO SUBMISSIONS WERE MADE BY THE L D.DR BEFORE US THAT THE APPEAL, IF ANY, CHALLENGING THE SAME IS PE NDING BEFORE THE TRIBUNAL OR THE HONBLE HIGH COURT. THE AO CANNOT MAKE ADDITION ON ADHOC BASIS AND IT IS A SETTLED PRINCIPLE OF LAW TH AT NO SUCH DISALLOWANCE CAN BE MADE ON ADHOC BASIS, WHICH IS N OT AT ALL MAINTAINABLE IN THE EYE OF LAW. THEREFORE, GROUND N O.2 RELATING TO 6 ITA NOS.68 & 69/RAN/2016 ADDITION OF RS. 2,43,617/- MADE ON ACCOUNT OF ENTER TAINMENT EXPENSES AND HOSPITALITY EXPENSES CONFIRMED BY THE CIT-A IS DELETED. 18. GROUND NO. 3 IS RELATING TO CONFIRMATION OF ADD ITION OF RS. ,36,768/- ON ACCOUNT OF FESTIVAL CELEBRATION, GIFT AND PRESENTS AND GENERAL EXPENSES. 19. ON PERUSAL OF P & L ACCOUNT THE AO FOUND THAT T HE ASSESSEE DEBITED AN AMOUNT OF RS.13,47,0743/- UNDER THE FOLL OWING HEADS WHICH SEEMS TO BE EXCESSIVE AND PERSONAL IN NATURE: - NATURE OF EXPENSES AMOUNT (RS.) FESTIVAL CELEBRATION 20,000/- GIFT & PRESENTS 3,41,474/- GENERAL EXPENSES 9,85,599/- TOTAL 13,47,073/- 20. IN SUPPORT OF CLAIM OF ABOVE EXPENDITURE OF RS. 13,47,073/- THE ASSESSEE PRODUCED LEDGERS AND VOUCHERS FOR PROVING THE SAID EXPENDITURE. THE AO FOUND THAT INTERNAL VOUCHERS AR E NOT CORRELATED WITH REFERENCE TO THIRD PARTY EVIDENCE. IN VIEW OF ASSESSEE S SUBMISSIONS AND TURNOVER OF ASSESSEE FOR THE A.Y UN DER REFERENCE, THE AO PROPOSED TO DISALLOW 25% OF THE TOTAL EXPEND ITURE OF RS.13,47,073/- I.E RS. 3,36,768/- AND ADDED THE SAM E TO THE TOTAL INCOME OF ASSESSEE. 21. BEFORE THE CIT-A THE ASSESSEE PRODUCED THE VOUC HERS AND SUPPORTING EVIDENCE, WHICH WERE AVAILABLE BEFORE TH E AO. IN SUPPORT OF ITS CLAIM AND CONTENTION, THE LD.AR OF THE ASSES SEE RELIED ON VARIOUS JUDGMENTS AGAINST THE ADHOC DISALLOWANCE OF EXPENSES. TRIPAT KAUR, NEW DELHI VS. ACIT ITA NO. 3244/DEL/2012 CIT VS. THE LAKSHMI VILAS BANK LTD, ITA NO. 896 OF 2013 DT. 16-04-2014, TM1 827. CIT-A S ORDER IN APPEAL NO. 465/JSR/2011-12 DT 19- 11-12 FOR THE A.Y 2009-10, WHEREIN IT WAS HELD BY THE CIT-A THAT DISALLOWANCES MADE BY THE AO ARE NOT REASONABLE IN GIVEN FACTS OF THE CASE AND THE SAME IS DELETED. 7 ITA NOS.68 & 69/RAN/2016 22. FURTHER, IT WAS SUBMITTED THAT IN ABSENCE OF AN Y SPECIFIC ITEM FOR DISALLOWANCE IS UNJUSTIFIED IN THE FACTS AND C IRCUMSTANCES OF THE CASE. 23. ON OTHER HAND, THE LD. DR RELIED ON THE ORDERS OF THE AO AND THE LD. CIT-A. 24. HEARD RIVAL SUBMISSIONS AND PERUSED THE RECORD . WE FIND FROM THE ASSESSMENT ORDER THAT THE ASSESSEE PRODUCED THE VOUCHERS AND SUPPORTING EVIDENCE BEFORE THE AO. ALL THE EXPENSES AS CLAIMED ARE FULLY VERIFIABLE AND SUPPORTED BY THIRD PARTY VOUCH ERS. THE CASE LAWS AS RELIED ON BY THE ASSESSEE BEFORE US ARE RELEVAN T TO THE FACTS OF THE PRESENT CASE. THE HONBLE HIGH COURTS AND TRIBUNALS HELD THAT THE AO CANNOT MAKE ADDITION ON ESTIMATION. NO SUBMISSIONS WERE MADE BY THE LD.DR BEFORE US THAT THE APPEAL, IF ANY, CHALLE NGING THE SAME IS PENDING BEFORE THE TRIBUNAL OR THE HONBLE HIGH COU RT. IN VIEW OF ABOVE, NO SUCH DISALLOWANCE CAN BE MADE ON ADHOC BA SIS AND IT IS A SETTLED PRINCIPLE OF LAW THAT NO DISALLOWANCE CAN BE MADE ON ADHOC BASIS, WHICH IS NOT AT ALL MAINTAINABLE IN THE EYE OF LAW. THEREFORE, GROUND NO.3 RELATING TO ADDITION OF RS. 3,36,768/- ON ACCOUNT OF FESTIVAL CELEBRATION, GIFT, PRESENTS AND GENERAL EX PENSES CONFIRMED BY THE CIT-A IS DELETED. 25. GROUND NO. 4 IS RELATING TO CONFIRMATION OF CHA RGING OF INTEREST ON DIVIDEND DISTRIBUTION TAX (DDT) OF RS.3,08,29,99 2/- BY THE CIT-A. 26. IT IS OBSERVED FROM RECORD THAT NO DISCUSSION W HATSOEVER WAS MADE BY THE AO IN THE ASSESSMENT ORDER IN THIS REG ARD. INSPITE OF WHICH, THE ASSESSEE RAISED A ISSUE BEFORE THE CIT-A CHALLENGING THE SAID ADDITION. THE CIT-A DID NOT ADJUDICATE THE ISS UE AS THERE WAS NO SUCH ISSUE DECIDED BY THE AO. IN VIEW OF THE SAME, WE REMAND THE MATTER TO THE FILE OF THE AO TO DECIDE AND ADJUDIC ATE THE SAME AFRESH IN THE LIGHT OF SUBMISSIONS OF ASSESSEE AS AVAILABL E BEFORE THE AO. 8 ITA NOS.68 & 69/RAN/2016 THE AO SHALL PASS A FRESH ORDER AS PER LAW, AFTER G IVING THE ASSESSEE ADEQUATE OPPORTUNITY OF HEARING. THE ASSESSEE IS AT LIBERTY TO FILE REQUISITE EVIDENCES IN SUPPORT OF THE CONTENTION AN D CLAIM. THEREFORE, GROUND NO. 4 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 27. THE APPEAL OF ASSESSEE IN ITA NO. 68/RAN/2016 F OR THE A.Y 2011-12 IS ALLOWED IN PART. 28. NOW, WE SHALL TAKE UP THE APPEAL IN ITA NO. 69/ RAN/2016 FOR THE A.Y 2012-13. 29. GROUND NO. 1 IS RELATING TO CONFIRMATION OF DI SALLOWANCE OF RS.49,42,950/- BY THE CIT-A ON ACCOUNT OF FOLLOWING EXPENDITURE INCURRED BY THE ASSESSEE:- SL.NO. NATURE OF EXPENSES AMOUNT (RS.) 1. OTHER EXPENSES 2,37,70,000 2. TRAVELLING EXPENSES 47,34,000 3. ADVERTISEMENT, PROMOTION & SELLING 8,49,000 TOTAL 3,29,53,000 30. THE AO OBSERVED THAT THE INTERNAL VOUCHERS AND SUPPORTING EVIDENCES CANNOT BE CO-RELATED WITH THIRD PARTY CO RROBORATIVE EVIDENCE. THE AO DISALLOWED 15% OF RS.3,29,53,000/ -. THE CIT-A CONFIRMED THE ADDITION MADE BY THE AO. 31. BEFORE US THE LD.AR REFERRED TO WRITTEN SUBMISS ION AND ARGUED THAT THE CONFIRMATION OF ADDITION BY THE CIT-A IS U NJUSTIFIED, ARBITRARY AND LIABLE TO BE DELETED AND FURTHER SUBMITTED THA T THE VARIOUS HONBLE HIGH COURTS AND TRIBUNALS HELD AGAINST ADHO C DISALLOWANCES AND PLACED HIS RELIANCE ON THE FOLLOWING CASE LAWS :- SAYAJIT IRON & ENGG CO. VS. CIT (2002) 253 ITR 749( GUJ) CORE HEALTH CARE LIMITED VS. DCIT(200) 70 TTJ (AH M) TRIPAT KAUR, NEW DELHI VS. ACIT, ITA NO. 3244/DEL/2 012 CIT VS. THE LAKSHMI VILAS BANK LTD, ITA NO. 896 OF 2013 9 ITA NOS.68 & 69/RAN/2016 32. IN VIEW OF ABOVE, HE PRAYED TO ALLOW THE GROUND RAISED BY THE ASSESSEE IN THE APPEAL. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDERS OF THE AO AND CIT-A. 33. HEARD RIVAL SUBMISSIONS AND PERUSED THE RECORD. WE FIND FROM RECORD THAT THE ACCOUNTS ARE AUDITED BY AN INDEPEND ENT AUDITOR AND NOTHING ADVERSE WAS FOUND IN THE COURSE OF AUDIT AS BROUGHT ON RECORD. WE FURTHER FIND THAT THE ASSESSEE PRODUCED THE VOUCHERS AND SUPPORTING EVIDENCE BEFORE THE AO AND CIT-A BOTH HE LD THAT INTERNAL VOUCHER CANNOT BE RELATED WITH THIRD PARTY WITH COR ROBORATIVE EVIDENCE. WE FIND NO SPECIFIC INSTANCE HAS BEEN BRO UGHT ON RECORD WHERE THE EVIDENTIARY VALUE OF THE SAID INTERNAL VO UCHERS ARE DOUBTFUL AND NOTHING ADVERSE BROUGHT ON RECORD. ALL THE EXPE NSES AS CLAIMED ARE FULLY VOUCHED AND VERIFIABLE AND SUPPORTED BY T HIRD PARTY VOUCHERS. NO DISALLOWANCE CAN BE MADE ON ADHOC BAS IS AND IT IS A SETTLED PRINCIPLE OF LAW THAT NO SUCH DISALLOWANCE CAN BE MADE ON ADHOC BASIS, WHICH IS NOT AT ALL MAINTAINABLE IN TH E EYE OF LAW. THEREFORE, GROUND NO.1 RELATING TO ADDITION OF RS. 49,42,950/- ON ACCOUNT OF OTHER EXPENSES, TRAVELING EXPENSES, ADVE RTISEMENT, PROMOTION & SELLING OF EXPENSES MADE BY THE AO AND CONFIRMED BY THE CIT-A IS DELETED. 34. GROUND NO. 2 RELATING TO CONFIRMATION OF CHARGI NG OF INTEREST U/S. 234B INSTEAD OF SECTION 234C OF THE ACT. 35. AFTER HEARING THE RIVAL SUBMISSIONS AND PERUSIN G THE RECORD, WE FIND THAT THE INTEREST U/S. 234B/C OF THE ACT IS TO BE CHARGED ON DECLARED RETURNED INCOME AND NOT ON ASSESSED INCOME AS PER DECISION OF THE OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SHRI AJAY PRAKASH VERMA IN TA NO. 38 OF 2010 REPORTED IN 2013 (1)TMI 140, WHICH IN TURN, FOLLOWED THE LAW LAID DOWN BY THE FU LL BENCH IN THE CASE OF SMT. TEJ KUMARI REPORTED IN 114 TAXMAN 404 (PAT) (FB), WHERE IT WAS HELD THAT INTEREST CANNOT BE LEVIED ON ASSESSED INCOME 10 ITA NOS.68 & 69/RAN/2016 AND IT CAN BE LEVIED ONLY ON THE INCOME DECLARED I N THE RETURN OF INCOME. THE APPELLANT REVENUE CHALLENGED THE SAME B EFORE THE HONBLE SUPREME COURT BY WAY OF A SLP, WHICH WAS DI SMISSED BY HOLDING THAT THERE IS NO MERITS IN THE APPEAL VIDE ITS ORDER DT. 01-08- 2000. THE LD. DR COULD NOT CONTROVERT THE SAME. 36. WE FURTHER FIND THE CO-ORDINATE BENCH, ITAT, RA NCHI IN THE CASE OF RSB INDUSTRIES LTD(FORMERLY KNOWN AS M/S. LAL TE CHNOLOGIES LTD) VS. ACIT, ITA NOS. 199 & 200/RAN/2014 AND 212 & 213 /RAN/2014 FOR THE A.YS 2009-10 & 2010-11 AND IN THE CASE OF SHREE NIWAS JOSHI VS. ACIT, ITA NOS. 279 & 280/RAN/2016 FOR THE A.YS. 200 1-02 & 2005- 06, COPY OF THE SAME ARE ON RECORD, ON SIMILAR SET OF FACTS AND CIRCUMSTANCES HAS DISPOSED OF THE SAID ISSUE IN FAV OUR OF ASSESSEE BY DISMISSING THE GROUNDS OF APPEAL OF THE REVENUE BY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT O F JHARKHAND IN THE CASE OF SUPRA. WE FURTHER FIND THAT THE ISSUE IN HAND, FACTS AND CIRCUMSTANCES OF THOSE CASES OF ITAT RANCHI ARE IDE NTICAL AND SIMILAR. 37. IN VIEW OF ABOVE, AND RESPECTFULLY FOLLOWING TH E DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF AJ AY PRAKASH VARMA SUPRA , WE ARE OF THE VIEW THE ORDER OF CIT-A IS NOT JUST IFIED IN CONFIRMING THE ORDER OF AO IN CHARGING THE INTEREST . THE AO IS DIRECTED TO MODIFY HIS ORDER. THEREFORE, THE GROUN D NO. 2 RELATING TO CHARGING OF INTEREST U/S. 234B OF THE ACT RAISED BY THE ASSESSEE IS LIABLE TO BE MODIFIED. THIS GROUND IS ALLOWED FOR S TATISTICAL PURPOSE. 38. THE APPEAL IN ITA NO. 69/RAN/2016 FOR THE A.Y 2 012-13 IS ALLOWED IN PART. 11 ITA NOS.68 & 69/RAN/2016 39. IN THE RESULT, BOTH THE APPEALS OF ASSESSEE BEI NG ITA NOS. 68 & 69/RAN/2016 FOR THE A.Y 2011-12 & 2012-13 ARE ALLOW ED IN PART. ORDER PRONOUNCED ON 01-03-2018 SD/- SD/- J. SUDHAKAR REDDY S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 01-03-2018 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT M/S. JAMIPOL LTD. NAMDIH ROAD, BURNAMIN ES JAMSHEDPUR. 2 RESPONDENT THE ACIT, CIRCLE-2, BAGMATI ROAD, JAMSH EDPUR-831001. 3 . THE CIT(A), RANCHI 4. 5. CIT , RANCHI DR, ITAT RANCHI BENCHES, RANCHI. / TRUE COPY, BY ORDER, SR.PS ITAT, RANCHI