Sunita Gupta, New Delhi V. ITO, Ward- 34(2), New Delhi

ITA 701/DEL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5201 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Appeal Filed On: 31-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Bogus Share capital; Opportunity of being heard; Principle of natural justice; Additional evidence; Question of law; Onus to prove; TDS; Set aside
• Section: 68; 37; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SH. R.K PANDA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.701/DEL/2018 ASSESSMENT YEAR: 2013-14 SUNITA GUPTA AN-25B, SHALIMAR BAGH, NEW DELHI-110088 PAN NO. ADMPG5450H VS INCOME TAX OFFICER WARD 34 (2) NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY SH. SHAANTANU JAIN, ADVOCATE SH. DEEPANSHU JAIN, ADVOCATE RESPONDENT BY SH. SUNIL KUMAR YADAV, SR. DR SH. S. S. RANA, LTI (DR) DATE OF HEARING: 07/05/2019 DATE OF PRONOUNCEMENT: 29/05/2019 ORDER PER R.K. PANDA, AM: 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AG AINST THE ORDER DATED 13.10.2017 OF THE CIT(A)-12, NEW DELHI RELATING TO A. Y. 2013-14. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF TRADING O F CHEMICALS AND PESTICIDES. SHE FILED HER RETURN OF INCOME ON 3 0.09.2013 PAGE | 2 DECLARING AN INCOME OF RS.10,93,740/-. THE ASSESSI NG OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVE D FROM THE BALANCESHEET THAT THERE ARE CREDITORS OF RS.2,01,85 ,243/- AND UNSECURED LOAN OF RS.67 LAKH. HE, THEREFORE, ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF UNSECURED LOAN OF RS.67 LA CS AND SUNDRY CREDITORS OF RS.2,01,85,243/-. THE ASSESSEE FILED A LETTER DATED 19.02.2016 ALONGWITH ACCOUNT OF UNSECURED LOAN AND SUNDRY CREDITORS. HOWEVER, SHE DID NOT FURNISH THE LEDGER ACCOUNT OF SUNDRY CREDITORS AND UNSECURED LOAN BUT FURNISHED O UTSTANDING BALANCES OF SUNDRY CREDITORS ON HER LETTER HEAD. ON BEING ASKED BY THE ASSESSING OFFICER TO FURNISH THE LEDGER ACCO UNT OF SUNDRY CREDITORS AND UNSECURED LOAN THE ASSESSEE REPLIED T HAT A FIRE BROKE OUT IN THE OFFICE OF THE ASSESSEE AND COMPUTE R AND RELEVANT DOCUMENTS AND OFFICE RECORD CONSISTING OF CASH BOOK , LEDGER, VOUCHERS ETC WERE DESTROYED ON 25.06.2013. HOWEVER, INFORMATION FOR AUDIT WAS PROVIDED EARLIER TO THE CA FOR TAX AU DIT. IT WAS ACCORDINGLY SUBMITTED THAT IT IS DIFFICULT TO PROVI DE REMAINING INFORMATION REGARDING EXPENSES CLAIMED IN THE P & L ACCOUNT. 3. THE ASSESSING OFFICER ISSUED NOTICE U/S. 133 (6) TO THE CREDITORS AS PER ADDRESS GIVEN BY THE ASSESSEE. HO WEVER, ALL SUCH NOTICES WERE RETURNED BACK UNSERVED BY THE POSTAL A UTHORITY WITH THE REMARKS NO SUCH ADDRESS. THE ASSESSING OFFIC ER, THEREFORE, INFERRED THAT ALL THE CREDITORS SHOWN BY THE ASSESS EE ARE NOT GENUINE. SINCE THE CONFIRMATIONS FROM THE CREDITOR S FILED BY THE ASSESSEE ARE ON THE ASSESSEES OWN LETTER HEAD WITH OUT PAN NUMBER AND TIN NUMBER OF THE CREDITORS, THEREFORE, THE ASSESSING PAGE | 3 OFFICER DISREGARDED CONFIRMATIONS FROM THE SAID PAR TIES WHICH WERE FILED ON THE LETTER HEAD OF THE ASSESSEE AND M ADE ADDITION OF RS.1,50,26,811/-. THE ASSESSING OFFICER FURTHER MA DE ADDITION OF RS.6,80,218/- BEING 25% OF THE EXPENSES CLAIMED IN THE P & L ACCOUNT EXCEPT BANK INTEREST AND BANK CHARGES IN AB SENCE OF ANY DETAILS FURNISHED BY THE ASSESSEE TO SUBSTANTIATE T HE SAME. HOWEVER, NO ADDITION HAS BEEN MADE ON ACCOUNT OF UN SECURED LOANS. 4. BEFORE THE CIT(A) THE ASSESSEE SOUGHT TO FILE TH E FOLLOWING EVIDENCES :- 1. AUDITED BS FOR THE AY 2014-15 2. DETAILS OF PAYMENT MADE TO CREDITORS IN FY 2013 -14 3. BANK STATEMENTS FOR THE PERIOD 01/04/2012 TO 31.03.2014 4. SALES TAX RETURN FOR THE PERIOD 01/04/2012 TO 31.03.2014 5. SALES TAX ASSESSMENT ORDER FOR THE YEAR 2012-13 & 2013-14 5. HOWEVER, THE LD. CIT(A) HELD THAT THESE EVIDENCE S CANNOT BE ADMITTED AS ADDITIONAL EVIDENCE UNDER RULE 46 A OF THE IT RULES. HE, THEREFORE, REJECTED THE SAME. 6. SO FAR AS THE ADDITION ON MERIT IS CONCERNED, IT WAS SUBMITTED BY THE ASSESSEE THAT THE CREDITORS HAVE B EEN PAID IN THE SUBSEQUENT ASSESSMENT YEAR THROUGH BANKING CHAN NELS AND THEREFORE, ADDITION CANNOT BE MADE U/S 41 (1) OF TH E IT ACT. IT WAS SUBMITTED THAT CREDITORS ARE TRADE CREDITORS ON ACCOUNT OF PAGE | 4 PURCHASE OF FERTILIZERS AND PESTICIDES USED FOR AGR ICULTURAL PURPOSES AND ARE NOT IN THE NATURE OF CASH CREDITS AS ENVISAGED U/S. 68 OF THE IT ACT AND THEREFORE, THE SAME CANNO T BE ADDED TO THE INCOME OF THE ASSESSEE U/S. 68 OF THE IT ACT. IT WAS FURTHER SUBMITTED THAT ALL THE CREDITORS BELONG TO BAHADURG ARH UNIT WHICH HAS DULY BEEN REGISTERED WITH SALES TAX AUTHO RITY AND ALL SALES TAX RETURNS FOR SUBJECT PERIOD AND SUBSEQUENT YEAR HAS BEEN DULY FILED. IT WAS SUBMITTED THAT THE CONCERNE D ASSESSING AUTHORITY HAS MADE SALES TAX ASSESSMENT FOR THE SAI D PERIOD BY OBSERVING AS UNDER :- I HAVE EXAMINED THE RETURNS AND FOUND COMPLETE IN ALL MATERIAL PARTICULAR. I AM SATISFIED THAT THE R ETURNS ARE COMPLETE IN MATERIAL AS PER REQUIREMENT OF SECTION 15(1). THE INPUT TAX HAS BEEN COMPUTED CORRECTLY AND THE T AX HAS BEEN DEPOSITED IN FULL. (THE PURCHASES PRIMA FACIE, SEEMS TO BE GENUINE). ALL RETURNS ARE FILLED IN TIME. 7. THE ASSESSEE FURTHER SUBMITTED THAT IT IS NOT CL EAR FROM THE ORDER OF THE ASSESSING OFFICER AS TO UNDER WHICH PR OVISIONS OF THE ACT I.E. U/S. 41 (1) OR U/S. 68, THE ADDITION HAS B EEN MADE. RELYING ON VARIOUS DECISIONS IT WAS SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING OFFICER IS UNCALLED FOR AND L IABLE TO BE DELETED ON ACCOUNT OF THE FOLLOWING REASONS :- (I) THERE WAS NO EVIDENCE TO SHOW CESSATION OF LIABILIT Y. PAGE | 5 (II) ASSESSEE STILL SHOWS THE LIABILITY IN ITS BOOKS OF ACCOUNTS WHICH ITSELF IS PRIMA FACIE EVIDENCE THAT THE LIABILITY EXISTS. (III) THE TRANSACTION OF PURCHASE, IF REGARDED AS BOGUS T HEN THERE IS NO LIABILITY IN LAW AND HENCE THE QUESTION OF APPLYING SECTION 41 (1) WILL NOT ARISE FOR CONSIDER ATION. (IV) THE SUMS IN QUESTION HAS BEEN REPAID IN THE SUBSEQUENT ASSESSMENT YEARS THEREBY RENDERING THE THEORY OF CESSATION OF LIABILITY NOT SUSTAINABLE. 8. HOWEVER, THE LD. CIT(A) WAS NOT SATISFIED WITH T HE ARGUMENTS ADVANCED BY THE ASSESSEE AND UPHELD THE A DDITION OF RS.1,56,26,811/- MADE BY THE ASSESSING OFFICER BY O BSERVING AS UNDER :- 6.3.1 THE ASSESSING OFFICER NOTED THAT ASSESSEE HAS SHOW N CREDITORS AMOUNTING TO RS.2,01,85,243/- IN THE BALANCE SHEET AS ON 31.03.2013. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE SUNDRY CREDITORS WITH THE DOCUMENTS, BILLS & VOUCHERS. THE COUNSEL OF THE ASS ESSEE ONLY FURNISHED THE BALANCES IN THE ACCOUNTS AND FAILED TO FURNISH THE COPY OF LEDGER ACCOUNTS PERTAINING TO SUNDRY CREDITORS. IT WAS EXPLAINED TH AT FIRE BROKE IN THE GODOWN / OFFICE IN THE PREMISES ON 04.03.2016 RESULTING IN D ESTRUCTION OF COMPUTER AND OFFICE RECORDS CONSISTING OF CASH BOOK, LEDGER, VOU CHERS ETC. IT WAS ALSO SUBMITTED THAT THE INFORMATION HAD ALREADY BEEN SUB MITTED TO THE CHARTERED ACCOUNTANT FOR THE TAX AUDIT. 'THE ASSESSEE EXPRESS ED INABILITY TO PROVIDE REMAINING INFORMATION WITH RESPECT TO EXPENSES CLAI MED TO PROFIT & LOSS ACCOUNT. THE ASSESSING OFFICER ISSUED NOTICES U/S 1 33(6) TO THE CREDITORS ON THE ADDRESSES GIVEN BY THE ASSESSEE. ALL THE NOTICE S WERE RECEIVED BACK WITH THE POSTAL REMARKS NO SUCH ADDRESS. THE ASSESSEE HAD FILED CONFIRMATION OF THE CREDITORS ON HER OWN LETTER HEAD WHEREIN PAN OF THE PARTIES OR TIN NUMBERS WAS NOT MENTIONED. THE ASSESSING OFFICER TH EN ASKED THE ASSESSEE TO PAGE | 6 PRODUCE THE CREDITORS FOR VERIFICATION. IT WAS REPL IED THAT ADDRESSES AVAILABLE WITH THE ASSESSEE HAVE BEEN PROVIDED AND THE CONFIR MATIONS HAVE BEEN PLACED ON RECORD. THE ASSESSING OFFICER DID NOT FIND THIS EXPLANATION SATISFACTORY AND ADDED THE DIFFERENCE OF THE CREDITORS SHOWN IN BALA NCE SHEET FOR FY 201 1-12 & 2012- 3, THUS THE ADDITION OF RS. 1,50,26,811/- H AS BEEN MADE. 6.3.2 THE WRITTEN SUBMISSION OF THE APPELLANT HAS BEEN QU OTED IN THE FOREGOING PARAS. THE ARGUMENTS OF THE APPELLANT ARE BEING CON SIDERED AND EXAMINED IN THE LIGHT OF THE PROVISIONS OF THE ACT. IT IS SUBMITTED THAT THE CREDITORS HAVE BEEN RE- PAID IN THE SUBSEQUENT FINANCIAL YEAR THROUGH BANKI NG CHANNELS. BUT THE ASSESSEE HAS NOT FURNISHED THE LEDGER ACCOUNT OF TH E PARTIES TO EXAMINE THE GENUINENESS OF THE BALANCES AND TRANSACTIONS. FURTH ER, THE APPELLANT HAS FAILED TO SHOW THE ENTRIES OF THE PAYMENTS RELATING TO THE BALANCES. THE OTHER ARGUMENT OF THE ASSESSEE IS THAT THE SUNDRY CREDITORS CANNOT BE TREATED UNDER THE PROVISIONS OF SECTION 41(1) OF THE FT. ACT BECAUSE THE SAID CREDITORS ARE NOT OUTSTANDING AS ON 31.03.2014. IF THE ARGUMENT OF TH E ASSESSEE IS ADMITTED TO BE TRUE, IT WOULD IMPLY THAT SHE HAS BEEN IN TOUCH WIT H THE CREDITORS REGULARLY AND IN THAT CASE SHE COULD EITHER PROVIDE COMPLETE POSTAL ADDRESS OF THOSE CREDITORS OR THEY COULD BE REQUESTED TO APPEAR BEFORE THE ASSESS ING OFFICER FOR THE VERIFICATION OF THE CLAIM. THE ASSESSING OFFICER HA S NOT ADDED THE SUNDRY CREDITORS U/S 41(1) OF THE L.T. ACT. THE ASSESSING OFFICER HAS ONLY REMARKED THAT CREDITWORTHINESS OF THE CREDITORS DOES NOT APPEAR T O BE GENUINE. ON CAREFUL CONSIDERATION OF THE FACTS OF THE CASE, IT MAY BE S EEN THAT THE CREDITORS APPEAR TO BE RELATED TO THE TRADING ACTIVITY. BUT IT IS NOT T HE CASE THAT THE ASSESSEE HAS OBTAINED WHETHER IN CASH OR M ANY OTHER MANNER ANY AMOUNT IN RESPECT OF THE EXPENDITURE BY WAY OF REMISSION OR CESSATION OF LIA BILITY. WHEN THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF THE CREDITOR S RELATED TO TRADE, THE LOGICAL INTERENCE WOULD BE CLAIM OF BOGUS LIABILITY AS A RESULT OF I NFLATED PURCHASES / NO PURCHASES DURING THE FINANCIAL YEAR UNDER CONSIDERA TION. THE ASSESSEE HAS NOT ESTABLISHED BY ANY EVIDENCE THAT THE CREDITORS IN R ESPECT OF WHICH DEBIT ENTRIES WERE MADE IN THE PROFIT & L.OSS ACCOUNT, BELONG TO EARLIER FINANCIAL YEARS. THE ASSESSING OFFICER HAS NOT MADE THE ADDITION U/S 68 CALLING FOR DISTINCTION PAGE | 7 BETWEEN A TRADE LIABILITY OR CAPITAL LIA BILITY. THE DECISIONS CITED BY THE LD. AR, AS MAY BE SEEN, ARE DISTINGUISHABLE ON FACTS, HENCE, C ANNOT BE RELIED ON TO DELIVER THE JUDGMENT IN THIS CASE. ACCORDINGLY, THE ADDITIO N IS T CONFIRMED AND THE GROUND IS DISMISSED. 9. SO FAR AS THE DISALLOWANCE OF EXPENSES AMOUNTING TO RS.6,80,218/- IS CONCERNED, THE LD. CIT(A) RESTRICT ED THE SAME TO RS.2,72,087/- AND DELETED AN AMOUNT OF RS.4,08,131/ - BY OBSERVING AS UNDER :- 7.3.1 THE ASSESSING OFFICER HAS DISALLOWED 25% OF TOTAL CLAIM OF THE EXPENSES, EXCLUDING BANK INTEREST AND CHARGES AMOUNTING TO RS . 16,49,472/-. THE APPELLANT HAS EXPLAINED THAT FIRE BROKE IN THE GODOWN / OFFIC E OF THE ASSESSEE LEADING TO BURNING OF COMPUTER, RELEVANT DOCUMENTS AND OFFICE RECORD CONSISTING OF CASH BOOK AND LEDGER VOUCHERS. THERE IS A SLIGHT INCREAS E IN THE GP RATIO AND NP RATIO AS COMPARED TO THE PRECEDING ASSESSMENT YEAR. THE A CCOUNTS OF THE APPELLANT WERE DULY AUDITED BY A CHARTERED ACCOUNTANT. 7.3.2 I HAVE CONSIDERED THE SUBMISSION OF THE APPE LLANT. IT IS A FACT THAT THE ONUS TO PROVE THE GENUINENESS OF THE EXPENSES U/S 3 7 OF THE I.T. ACT. 1961 IS ON THE ASSESSEE. THE ASSESSEE COULD NOT PRODUCE RELEVANT D ETAILS, BILLS & VOUCHERS RELATING TO EXPENSES ON THE GROUND OF FIRE IN THE O FFICE PREMISES LEADING TO THE DESTRUCTION OF THE RECORDS. IT IS ALSO PLEADED BY T HE ASSESSEE THAT THE GROSS PROFIT AND NET PROFIT DURING THE YEAR UNDER CONSIDERATION WAS SLIGHTLY BETTER THAN PREVIOUS FINANCIAL YEAR. ON THE OTHER HAND, THE EXP ENSES HAVE REMAINED UNVERIFIED AND THE ASSESSEE HAS NOT EVEN PRODUCED S ECONDARY EVIDENCES TO SUBSTANTIATE THE CLAIM. IF THE EXPENSES HAVE BEEN PAID TO THE PARTIES OUTSIDE THE SETUP OF APPELLANTS BUSINESS EITHER BY CASH OR THR OUGH BANK, THE EVIDENCES COULD BE OBTAINED IN THIS REGARD. IN THE CASE OF PAYMENTS THROUGH BANK OR IN THOSE EASES WHERE TDS HAS BEEN MADE, THE ASSESSEE COULD EXPLAIN THE GENUINENESS OF PAGE | 8 DEDUCTION IN THE PROFIT & FOSS ACCOUNT. HOWEVER, LO OKING TO THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, 1 RESTRICT THE DISALLOWANC E ONLY TO THE EXTENT OF 10% OF THE TOTAL CLAIM. THE ASSESSING OFFICER HAS CONSIDER ED EXPENSES FOR DISALLOWANCE TO THE EXTENT OF RS.27,20,872/-. THUS DISALLOWANCE TO THE EXTENT OF RS.2,72,087/- IS CONFIRMED. THE ADDITION OF RS.4,08,131/- IS DELETED . 10. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE AS SESSEE IS IN APPEAL BY RAISING FOLLOWING GROUNDS OF APPEAL :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORD ER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) (HEREI NAFTER REFERRED TO AS CIT (A)) IS BAD IN THE EYE OF LAW AND ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LE ARNED CIT (A) HAS ERRED BOTH IN FACTS AND IN LAW IN PASSING THE ORDER WITHO UT GIVING ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD WHICH IS CLEAR VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LE ARNED CIT (A) HAS ERRED IN BOTH THE FACTS AND IN LAW BY NOT ADMITTING THE A DDITIONAL EVIDENCE PRODUCED BY THE APPELLANT. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED CIT (A) HAS ERRED BOTH ON FACTS AND IN LAW BY CONFIRMING THE ADDITION ON ACCOUNT OF UNEXPLAINED CREDITORS OF RS.1,50,26,811/-. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LE ARNED CIT (A) HAS ERRED BOTH ON FACTS AND IN LAW BY CONFIRMING THE DISALLOW ANCE OF EXPENSES OF RS 2,72,087/- WHICH IS CLAIMED AND ALLOWABLE AS PER TH E PROVISIONS OF THE ACT. PAGE | 9 11. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY CHALL ENGED THE ORDER OF THE CIT(A) IN SUSTAINING THE ADDITION OF R S.1,50,26,811/- ON ACCOUNT OF UNEXPLAINED CREDITORS AND SUSTAINING THE DISALLOWANCE OF EXPENSES OF RS.2,72,087/-. 12. SO FAR AS THE ADDITION OF RS.1,50,26,811/- ON A CCOUNT OF UNEXPLAINED SUNDRY CREDITORS IS CONCERNED THE LD. C OUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE QUERRY RAISED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSES SMENT PROCEEDINGS, COPY OF WHICH IS PLACED AT PAGE 36 AND 37 OF THE PAPER BOOK AND SUBMITTED THAT THE ASSESSING OFFICER ISSUED NOTICE U/S. 133 (6) TO THE FOLLOWING FOUR PARTIES : - 1. M/S. CROP CARE CHEMICALS 554/2 F, VANAGRAM ROAD, AMBATTUR, CHENNAI -600058 2. M/S. KRISHNA AGRI SCIENCE 40/1, MAMBALA PATTU RO AD, VILLUPURAM, TAMIL NADU, -605602 3. M/S. GODWARI PESTICIDES PLOT NO.242, SILIKA PALA M SRIKA KULAM, A. P. 532403 4. M/S. PADMAWATI CROP. SCIENCE JAVER CENTRE NO.70, VTH FLOOR, RAJA ANNA MALAI BUILDING CHENNAI-600015 13. HE SUBMITTED THAT OUT OF THE NOTICE U/S. 133 (6 ) TO THE ABOVE 4 CREDITORS ONLY THE LETTER ADDRESSED TO M/S. KRISH NA AGRI SCIENCE WAS RETURNED BACK WITH THE REMARK NO SUCH ADDRESS . HOWEVER, NO OTHER LETTERS WERE RETURNED BACK AND NO INFORMAT ION FROM PAGE | 10 THESE PARTIES WAS RECEIVED. HE SUBMITTED THAT THE A SSESSING OFFICER WHILE MAKING THE ADDITION ON ACCOUNT OF OUT STANDING SUNDRY CREDITORS HAS NOT MADE ANY ADDITION ON ACCOU NT OF KRISHNA AGRI SCIENCE AND HAS MADE ADDITION ON ACCOU NT OF REMAINING THREE PARTIES. 14. REFERRING TO PAGE 83 OF THE PAPER BOOK THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE PURCHASE AND SALES MADE BY THE ASSESSEE DURING THE YEAR AND SUBM ITTED THAT THE SAME HAS BEEN ACCEPTED AND NO DOUBT HAS BEEN RA ISED BY THE ASSESSING OFFICER ON ACCOUNT OF PURCHASES AND SALES OF THE ASSESSEE. REFERRING TO THE PAGE 74 OF THE PAPER BOO K HE DREW THE ATTENTION OF THE BENCH TO THE VAT ORDER AND DREW TH E ATTENTION OF THE BENCH TO THE OBSERVATION BY THE VAT AUTHORITY A CCEPTING THE RETURNS. 15. HE SUBMITTED THAT THE PAYMENTS HAVE BEEN MADE I N THE SUBSEQUENT YEARS TO THE CREDITORS THROUGH BANKING C HANNELS. HE SUBMITTED THAT IT IS NOT UNDERSTOOD AS TO UNDER WHI CH PROVISION OF THE ACT, THE ASSESSING OFFICER HAS MADE THE ADDITIO N I.E. EITHER U/S. 41 (1) OR SECTION 68 OF THE IT ACT. HE SUBMIT TED THAT ADDITION CANNOT BE MADE U/S. 41 (1), SINCE THERE WAS NO EVID ENCE TO SHOW THAT THERE IS CESSATION OF LIABILITY AS THE ASSESSE E IS STILL SHOWING THE LIABILITY IN THE BOOKS OF ACCOUNTS. THE LD. AR SUBMITTED THAT THE TRANSACTION OF PURCHASE, IF REGARDED AS BOGUS, THEN THERE IS NO LIABILITY IN LAW AND, THEREFORE, THE QUESTION OF APPLYING PROVISIONS OF SECTION 41 (1) WILL NOT ARISE. FURTH ER SINCE THE OUTSTANDING AMOUNT HAS BEEN PAID IN THE SUBSEQUENT ASSESSMENT PAGE | 11 YEAR, THEREFORE, THEORY OF CESSATION OF LIABILITY I S NOT SUSTAINABLE. HE SUBMITTED THAT THE ASSESSING OFFICER IN THE INST ANT CASE HAS MADE THE ADDITION BY JUST TAKING THE DIFFERENCE OF OPENING CREDITORS AND CLOSING CREDITORS AND NOT PARTY WISE. 16. REFERRING TO THE DECISION OF HONBLE HIGH DELHI COURT IN THE CASE OF CIT VS. VICTOR ELECTRODES LTD, THE LD. COUN SEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO PARA 9 OF THE ORDER AND SUBMITTED THAT THERE IS NO LEGAL OBLIGATION ON THE PART OF THE ASSESSEE TO PRODUCE THE DIRECTOR AND FAILURE TO PRO DUCE THEM CANNOT BE A GROUND FOR MAKING THE ADDITION WHEN VAR IOUS OTHER DETAILS WERE PRODUCED AND THE ASSESSING OFFICER DID NOT MAKE ANY ATTEMPT TO SUMMON THE DIRECTORS. THE ORDER OF THE T RIBUNAL DELETING THE ADDITION WAS ACCORDINGLY UPHELD. 17. REFERRING TO THE DECISION OF HONBLE BOMBAY HIG H COURT IN THE CASE OF CIT VS. NIKUNJ EXIM ENTERPRISES PVT LTD . 372 ITR 619, HE SUBMITTED THAT WHERE SALES ARE SUPPORTED BY PURC HASES AND PAYMENTS MADE THROUGH BANKS MERELY BECAUSE SUPPLIER S HAD NOT APPEARED BEFORE THE ASSESSING OFFICER, THE PURCHASE S COULD NOT BE REJECTED AS BOGUS. 18. REFERRING TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. VARDHMAN OVERSEAS LIMITED REPORTED IN 343 ITR 408, HE SUBMITTED THAT REMISSION OR CESSATION OF TR ADING LIABILITY IS GOVERNED BY SECTION 41 (1) AND NOT BY SECTION 28 (IV). RELYING ON VARIOUS OTHER DECISIONS HE SUBMITTED THAT THE AD DITION MADE PAGE | 12 BY THE ASSESSING OFFICER AND SUSTAINED BY THE CIT(A ) IS NOT JUSTIFIED. 19. SO FAR AS DISALLOWANCE OF EXPENSES WHICH HAS BE EN PARTLY SUSTAINED BY THE CIT(A) IS CONCERNED HE SUBMITTED T HAT THE SAME IS ON THE HIGHER SIDE. 20. THE LD. DR ON THE OTHER HAND STRONGLY SUPPORTED THE ORDER OF THE CIT(A) AND RELIED ON THE FOLLOWING DECISIONS :- 1. PCIT VS. NRA IRON AND STEEL PVT. LTD. REPORTED I N 2019 TIOL-SC-IT 2. PREM CASTING (P.) LTD. VS. CIT (A) REPORTED IN 8 8 TAXMAN.COM 189 (ALLAHABAD) 3. M/S. TRIMURTI CONCAST PVT. LTD. VS. CIT, MUZAFFA RNAGAR (UP) 2018 TIOL 274 SC -IT 4. KONARK STRUCTURAL ENGINEERS (P) LTD. VS. DCIT 96 TAXMAN.COM 255 (SC). 21. HE SUBMITTED THAT THE ADDITION MADE BY THE ASSE SSING OFFICER AND UPHELD BY THE CIT(A) ON ACCOUNT OF SUND RY CREDITORS IS JUSTIFIED. SO FAR AS THE DISALLOWANCE OF EXPENSES IS CONCERNED HE SUBMITTED THAT THE ASSESSING OFFICER HAS DISALLOWED 25% OF THE EXPENSES WHICH HAS BEEN REDUCED TO 10% BY THE CIT(A ) AND, THEREFORE, THE SAME BEING REASONABLE SHOULD BE UPHE LD. PAGE | 13 22. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES AND PERUSED THE ORDERS OF THE AUTHORITIES BEL OW. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE ASSESSEE IN THE INSTANT CASE IS ENGAGED IN THE BUSI NESS OF TRADING OF CHEMICALS AND PESTICIDES. THE ACCOUNTS OF THE A SSESSEE ARE AUDITED AND NO ADVERSE REMARKS HAVE BEEN POINTED OU T BY THE AUDITORS. WE FIND THE ASSESSING OFFICER IN THE ORD ER PASSED U/S. 143 (3) MADE ADDITION OF RS.1,50,26,811/- BEING THE DIFFERENCE BETWEEN THE SUNDRY CREDITORS AS ON 31.03.2013 AND 3 1.03.2012 IN RESPECT OF 4 CREDITORS AS UNEXPLAINED THE DETAIL S OF WHICH ARE AS UNDER :- SUNDRY CREDITORS YEAR ENDED 31.03.2012 (AY 2012-13) (IN RS. PAGE 123 OF THE PB (A) YEAR ENDED 31.03.2012 (AY 2013-14) (IN RS. PAGE 16 OF THE PB (A) NEW PURCHASES FROM THE CREDITORS DURING THE YEAR (B-A) FECCUNI SINGAPORE 5,10,000 - - CROP CARE - 55,65,500 55,65,500 GUDAWARI PESTICIDES 13,75,000 62,85,750 49,10,750 PADMAWATI CROP SCIENCE 14,50,000 66,95,800 52,45,800 KRISHNA AGRI SCIENCE 18,23,432 16,38,193 - PAGE | 14 TOTAL 51,58,432 2,01,85,243 1,57,22,050 23. SIMILARLY, THE ASSESSING OFFICER MADE ADDITION OF RS.6,80,218/- BEING 25% OF THE EXPENSES EXCEPT BANK INTEREST AND BANK CHARGES FOR WANT OF DETAILS. WE FIND THE LD. CIT(A) CONFIRMED THE ADDITION OF RS.1,50,26,811/- ON ACCOU NT OF UNEXPLAINED CREDITORS AND RESTRICTED THE DISALLOWAN CE OF EXPENSES TO RS.2,72,087/- BEING 10% OF SUCH EXPENSES, THE RE ASONS FOR WHICH HAS ALREADY BEEN REPRODUCED IN THE PRECEDING PARAGRAPHS. 24. SO FAR AS THE ADDITION ON ACCOUNT OF SUNDRY CRE DITORS IS CONCERNED WE FIND THE ASSESSING OFFICER MADE THE AD DITION ON THE GROUND THAT THE CREDIT WORTHINESS OF THE CREDITORS DOES NOT APPEAR TO BE GENUINE SINCE THE NOTICES ISSUED U/S 133 (6) WERE RETURNED UNSERVED AND THE ASSESSEE FAILED TO PRODUCE THE PAR TIES FOR HIS EXAMINATION. WE FIND THE LD. CIT(A) UPHELD THE ACTI ON OF THE ASSESSING OFFICER THE REASONS OF WHICH HAS ALREADY BEEN REPRODUCED IN THE PRECEDING PARAGRAPHS. IT IS THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSING OFFICER HAS NOT MADE ANY ADDITION ON ACCOUNT OF KRISHNA AGRI SC IENCE. FURTHER THE ADDITION HAS BEEN MADE SIMPLY ON THE BA SIS OF DIFFERENCE OF OPENING AND CLOSING BALANCE OF CREDIT ORS WHICH IS NOT JUSTIFIED ESPECIALLY WHEN THE PAYMENTS HAVE BEEN MA DE TO THE ABOVE PARTIES IN THE SUBSEQUENT YEARS THROUGH BANKI NG CHANNELS AND THE PURCHASES AND SALES HAVE BEEN ACCEPTED BY T HE ASSESSING OFFICER AS WELL AS VAT AUTHORITY. PAGE | 15 25. WE FIND SOME FORCE IN THE ABOVE ARGUMENTS ADVAN CED BY LD. COUNSEL FOR THE ASSESSEE. THE ASSESSING OFFICER IN THE INSTANT CASE HAS NOT DOUBTED THE PURCHASES MADE FROM THE SA ID PARTIES, SINCE HE HAS NOT DISTURBED THE PURCHASES. HE HAS A LSO NOT DOUBTED THE SALES OF THE ASSESSEE. THE PURCHASES M ADE BY THE ASSESSEE FROM SOME OF THE SAID PARTIES IN THE SUBSE QUENT YEARS HAVE ALSO NOT BEEN DOUBTED A STATEMENT MADE BY THE LD. COUNSEL FOR THE ASSESSEE AT THE BAR. FURTHER, OUT OF THE F OUR NOTICES ISSUED TO THE ABOVE SAID FOUR CREDITORS AND ONLY ON E LETTER ADDRESSED TO M/S. KRISHNA AGRI SCIENCE WAS RETURNED BACK WITH THE REMARKS NO SUCH ADDRESS AND NO OTHER LETTERS WERE RECEIVED BACK AND NO INFORMATION FROM THESE PARTIES WAS RECE IVED BY THE ASSESSING OFFICER. 26. WE FIND THE ASSESSING OFFICER IN THE SHOW CAUS E LETTER DATED 11.03.2016 ADDRESSED TO THE ASSESSEE HAS MENTIONED AS UNDER :- ACCORDINGLY, NOTICES U/S. 133 (6) WERE ISSUED TO T HE ABOVE SAID CREDITORS AND ONLY ONE LETTER ADDRESSED TO M /S. KRISHNA AGRI SCIENCE IS RETURNED BACK WITH THE REMARK S THAT NO SUCH ADDRESS AND NO OTHER LETTERS ARE RECEIVED AND NO INFORMATION FROM THESE PARTIES IS RECEIVED TO THIS O FFICE. 27. THUS, THE OBSERVATION OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER THAT ALL THE LETTERS WERE RETURNED BACK IS INCORRECT. SINCE IN THE INSTANT CASE THE PURCHASES ARE NOT DOUBTED AND THE ASSESSEE HAS MADE PAYMENTS TO THE C REDITORS IN THE SUBSEQUENT YEARS THROUGH BANKING CHANNELS AND T HE PAGE | 16 PURCHASES MADE FROM SOME OF THE ABOVE PARTIES IN TH E SUBSEQUENT YEARS WERE NOT DOUBTED AND THE NOTICES U /S. 133 (6) ISSUED TO THE 3 PARTIES WERE NEVER RETURNED BACK ME ANING THEREBY THESE WERE SERVED ON THE PARTIES, THEREFORE, ADDITI ON IN OUR OPINION ON ACCOUNT OF DIFFERENCE IN THE OPENING AND CLOSING BALANCE OF SUNDRY CREDITORS IN ABSENCE OF NON PRODU CTION OF THE CREDITORS IS NOT JUSTIFIED. IT IS ALSO NOT UNDERST OOD AS TO UNDER WHICH PROVISION THE ADDITION HAS BEEN MADE I.E. EIT HER U/S. 41 (1) AND SECTION 68. 28. WE FIND THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. VICTOR ELECTRODES LTD. (SUPRA) HAS OBSERVED AS UNDE R :- 9. THERE WAS NO LEGAL OBLIGATION ON THE ASSESSEE T O PRODUCE SOME DIRECTOR OR OTHER REPRESENTATIVE OF THE APPLICANT-COMPANIES BEF ORE THE ASSESSING OFFICER. THEREFORE/ FAILURE OF THE ASSESSEE TO PRODUCE THEM COULD NOT, BY ITSELF, HAVE JUSTIFIED THE ADDITIONS MADE BY THE ASSESSING OFFIC ER, WHEN THE ASSESSEE HAD FURNISHED DOCUMENTS, ON THE BASIS OF WHICH, THE ASS ESSING OFFICER, IF HE SO WANTED, COULD HAVE SUMMONED THEM FOR VERIFICATION. NO ATTEM PT WAS MADE BY THE ASSESSING OFFICER TO SUMMON THE DIRECTORS OF THE AP PLICANT-COMPANIES. THE ADDRESSES OF THESE COMPANIES MUST BE AVAILABLE ON T HE SHARE APPLICATIONS, MEMORANDUM AND ARTICLES OF ASSOCIATION AND THEIR IN COME-TAX RETURNS. IF THE ASSESSING OFFICER HAD ANY DOUBT ABOUT IDENTITY OF T HE SHARE APPLICANTS, HE COULD HAVE SUMMONED THE DIRECTORS OF THE APPLICANT-COMPAN IES. NO SUCH ATTEMPT WAS, HOWEVER, MADE BY HIM. THEREFORE, THE COMMISSIONER O F INCOME-TAX (APPEALS) AND THE INCOME-TAX APPELLATE TRIBUNAL, IN OUR VIEW, WER E JUSTIFIED IN HOLDING THAT THE IDENTITY OF THE SHARE APPLICANTS AND THE GENUINENES S OF THE TRANSACTIONS HAD BEEN ESTABLISHED BY THE ASSESSEE. FOR THE REASONS GIVEN IN THE PRECEDING PARAGRAPHS, NO SUBSTANTIAL QUESTION OF LAW ARISES FOR OUR CONSI DERATION. PAGE | 17 29. WE FIND THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF CIT VS. NIKUN EXIMP ENTERPRISES (P) LTD. (SUPRA) MARK O BSERVED AS UNDER :- 7. WE HAVE CONSIDERED THE SUBMISSION ON BEHALF OF THE REVENUE. HOWEVER, FROM THE ORDER OF THE TRIBUNAL DATED 30-04-2010, WE FIND THAT THE TRIBUNAL HAS DELETED THE ADDITIONS ON ACCOUNT OF BOGUS PURCH ASES NOT ONLY ON THE BASIS OF STOCK STATEMENT I.E. RECONCILIATION STATEM ENT, BUT ALSO IN VIEW OF THE OTHER FACTS. THE TRIBUNAL RECORDS THAT THE BOOK S OF ACCOUNTS OF THE RESPONDENT-ASSESSEE HAVE NOT BEEN REJECTED. SIMILAR LY, THE SALES HAVE NOT BEEN DOUBTED AND IT IS AN ADMITTED POSITION THAT SU BSTANTIAL AMOUNT OF SALES HAVE BEEN MADE TO THE GOVERNMENT DEPARTMENT I .E. DEFENCE RESEARCH AND DEVELOPMENT LABORATORY, HYDERABAD. FUR THER, THERE WERE CONFIRMATION LETTERS FILED BY THE SUPPLIERS, COPIES OF INVOICES FOR PURCHASES AS WELL AS COPIES OF BANK STATEMENT ALL OF WHICH WO ULD INDICATE THAT THE PURCHASES WERE INFACT MADE. IN OUR VIEW, MERELY BEC AUSE THE SUPPLIERS HAVE NOT APPEARED BEFORE THE ASSESSING OFFICER OR T HE CIT(A), ONE CANNOT CONCLUDE THAT THE PURCHASES WERE NOT MADE BY THE RE SPONDENT-ASSESSEE. THE ASSESSING OFFICER AS WELL AS CIT(A) HAVE DISALL OWED THE DEDUCTION OF RS.1.33 CRORES ON ACCOUNT OF PURCHASES MERELY ON TH E BASIS OF SUSPICION BECAUSE THE SELLERS AND THE CANVASSING AGENTS HAVE NOT BEEN PRODUCED BEFORE THEM. WE FIND THAT THE ORDER OF THE TRIBUNAL IS WELL A REASONED ORDER TAKING INTO ACCOUNT ALL THE FACTS BEFORE CONC LUDING THAT THE PURCHASES OF RS.1.33 CRORES WAS NOT BOGUS. NO FAULT CAN BE FOUND WITH THE ORDER DATED 30-04-2010 OF THE TRIBUNAL. 30. WE FIND THE HONBLE DELHI HIGH COURT IN THE CAS E OF SHRI VARDHMAN OVERSEAS LIMITED (SUPRA) HAS DECIDED AN ID ENTICAL ISSUE. THE ASSESSEE IN THAT CASE WAS A COMPANY ENG AGED IN THE MANUFACTURE OF RICE FROM PADDY. IT WAS ALSO SELLING RICE AFTER PURCHASING THE SAME FROM THE LOCAL MARKET. WHILE VE RIFYING THE SALES AND THE SUNDRY DEBTORS SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT AS ON 31-3-2002, THE ASSESSING OFFICER D ECIDED TO VERIFY THE SUNDRY CREDITORS SHOWN IN THE BOOKS OF A CCOUNT AS ON PAGE | 18 THE SAID DATE. THIS WAS BECAUSE HE TOOK THE VIEW TH AT IF THE CONSIGNMENT SALES WERE NOT GENUINE, THE PURCHASES S HOWN TO HAVE BEEN MADE BY THE ASSESSEE ON CREDIT BASIS COUL D ALSO NOT BE TREATED AS GENUINE. HE, THEREFORE, CALLED UPON THE ASSESSEE TO SUBMIT CONFIRMATION LETTER FROM THE SUNDRY CREDITOR S. THE ASSESSEE DID NOT SUBMIT THE CONFIRMATION LETTERS, B UT WROTE TO THE ASSESSING OFFICER THAT IT WAS NOT AWARE OF THE PRES ENT WHEREABOUTS OF THE CREDITORS AFTER A LAPSE OF FOUR YEARS AND WHATEVER ADDRESSES WERE AVAILABLE WITH THE ASSESSEE HAD BEEN 'GIVEN BY THE SUPPLIERS AT THE TIME WHEN IT PURCHA SED PADDY FROM THEM. THE ASSESSING OFFICER REJECTED THE ASSESSEE'S EXPLANATION AND ADDED THE AMOUNT IN QUESTION TO THE ASSESSEE'S TAXABLE INCOME UNDER SECTION 68. ON APPEAL, THE COMMISSIONE R (APPEALS) HELD THAT THE ASSESSEE'S CONDUCT CLEARLY SHOWED THA T THE LIABILITIES SHOWN IN THE SUNDRY CREDITORS' ACCOUNT IN ITS BOOKS DID NOT EXIST. IN THIS VIEW OF THE MATTER, HE HELD THAT THE LIABIL ITIES/CREDITS HAD CEASED TO EXIST AND, THEREFORE, THE ADDITION MADE B Y THE ASSESSING OFFICER WAS JUSTIFIED BUT HE CONFIRMED THE SAME UND ER SECTION 41(1). ON FURTHER APPEAL, THE TRIBUNAL HELD THAT TH E APPLICABILITY OF SECTION! 68 WAS RULED OUT SINCE NO FRESH AMOUNTS WERE CREDITED IN THE ACCOUNTS OF THE CREDITORS DURING THE RELEVAN T ACCOUNTING YEAR. THE TRIBUNAL FURTHER FOUND THAT THE AMOUNTS P AYABLE TO THE SUNDRY CREDITS WERE NOT CREDITED TO ITS PROFIT AND LOSS ACCOUNT FOR THE YEAR AND WERE STILL SHOWN AS OUTSTANDING AS ON 31-3-2002. THE TRIBUNAL THEREFORE HELD THAT THE PROVISIONS OF SECTION 41(1) WERE NOT ATTRACTED TO THE CASE. ACCORDINGLY, THE IM PUGNED PAGE | 19 ADDITION MADE BY THE AUTHORITIES BELOW WAS DELETED. ON APPEAL BY THE REVENUE, THE HONBLE HIGH COURT HELD AS UNDER ( SHORT NOTES) :- THAT A UNILATERAL ACTION CANNOT BRING ABOUT A CESS ATION OR REMISSION OF THE LIABILITY BECAUSE A REMISSION CAN BE GRANTED ONLY BY THE CREDITOR AND CESSATION OF THE L IABILITY CAN ONLY OCCUR EITHER BY REASON OF OPERATION OF LAW OR THE DEBTOR UNEQUIVOCALLY DECLARING HIS INTENTION NOT TO HONOUR HIS LIABILITY WHEN PAYMENT IS DEMANDED BY THE CREDI TOR, OR BY A CONTRACT BETWEEN THE PARTIES, OR BY DISCHARGE OF THE DEBT. THAT THE ASSESSEE HAD NOT UNILATERALLY WRITTEN BAC K THE ACCOUNTS OF THE SUNDRY CREDITORS IN ITS PROFIT AND LOSS ACCOUNT. THE LIABILITY WAS SHOWN IN THE BALACE-SHE ET AS ON MARCH 31, 2002. THE ASSESSEE BEING A LIMITED COMPANY, THIS AMOUNTED TO ACKNOWLEDGING THE DEBT IN FAVOUR OF THE CREDITORS FOR PURPOSES OF SECTION 18 OF THE LIMITATION ACT, 1963. THE ASSESSEES LIABILITY TO T HE CREDITORS, THUS, SUBSISTED AND DID NOT CEASE NOR WA S IT REMITTED BY THE CREDITORS. THE LIABILITY WAS ENFORC EABLE IN A COURT OF LAW. THE AMOUNT WAS NOT ASSESSABLE UNDER SECTION 41 (1). 31. SO FAR AS THE VARIOUS DECISIONS RELIED BY THE L D. DR ARE CONCERNED THEY ALL RELATE TO BOGUS SHARE CAPITAL OR BOGUS SHARE APPLICATION MONEY AND THEREFORE, ALL THESE DECISION S ARE PAGE | 20 DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 32. SINCE IN THE INSTANT CASE IT IS NOT UNDERSTOOD AS TO WHETHER THE ADDITION HAS BEEN MADE U/S. 41(1) OR 68 OF THE IT ACT , 1961 AND SINCE THE ASSESSING OFFICER HAS ACCEPTED PURCHA SES AS GENUINE AND THE AMOUNT OUTSTANDING IN THE NAME OF S UNDRY CREDITORS HAVE BEEN PAID THROUGH BANKING CHANNELS I N SUBSEQUENT YEARS AND PURCHASES MADE FROM THE SAID P ARTIES IN SUBSEQUENT YEARS HAS BEEN ACCEPTED BY THE REVENUE W ITHOUT ANY DOUBT AND SINCE THE NOTICES ISSUED TO THE THREE PAR TIES WERE NEVER RETURNED BACK AS PER THE LETTER ADDRESSED BY THE AS SESSING OFFICER TO THE ASSESSEE, THEREFORE, MERELY BECAUSE THE SAID CREDITORS WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER FOR HIS E XAMINATION, IN OUR OPINION, CANNOT BE A GROUND FOR MAKING THE DISA LLOWANCE. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) ON THIS ISSUE AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION . 33. SO FAR AS THE DISALLOWANCE OF RS.2,72,087/- OUT OF RS.6,80,218/- MADE BY THE ASSESSING OFFICER IS CONC ERNED, WE FIND THE ASSESSING OFFICER MADE DISALLOWANCE OF 25% OF THE VARIOUS EXPENSES CLAIMED IN THE P & L ACCOUNT (EXCE PT BANK INTEREST AND BANK CHARGES) ON THE GROUND THAT ASSES SEE DID NOT FURNISH THE BILLS AND VOUCHERS. WE FIND THE LD. CI T(A) RESTRICTED THE SAME TO 10% OF THE EXPENSES AND THEREBY SUSTAIN ED AN AMOUNT OF RS.2,72,087/-. WHILE DISALLOWANCE OF EXP ENSE ON AD- HOC BASIS IS JUSTIFIED ON ACCOUNT OF NON SUBMISSION S OF BILLS AND VOUCHERS, HOWEVER, CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE PAGE | 21 DISALLOWANCE OF 10% OF THE EXPENSES SUSTAINED BY TH E CIT(A) APPEARS TO BE ON THE HIGHER SIDE. WE, THEREFORE, RE STRICT SUCH DISALLOWANCE TO 7.5% OF EXPENSES. THIS GROUND RAISE D BY THE ASSESSEE IS PARTLY ALLOWED. 34. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.05.2019. SD/- SD/- (SUCHITRA KAMBLE) (R.K PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER *NEHA* DATE:- 29 .05.2019 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTR AR ITAT NEW DELHI DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 29.05.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER