ITO, BUNDI V. JYOTI GENERAL INDUSTRIES, BUNDI

ITA 707/JPR/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5282 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 22-08-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P R MEENA
• Assessee Lawyers: B V MAHESHWARI C A DHK
• Keywords: Business expenditure; Opportunity of being heard; Corroborative evidences
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA -@ ITA NO. 707/JP/2013 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2010-11 INCOME-TAX OFFICER, BUNDI. CUKE VS. M/S JYOTI GENERAL INDUSTRIES, CHITTOR ROAD, BUNDI. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAAFJ 9569 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI P.R. MEENA (JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI B.V. MAHESHWARI (C.A.) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 06/05/2016 MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 30/05/2016. VKNS'K@ ORDER PER T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 25/06/2013 OF THE LEARNED C.I.T.(A), KOTA FOR A.Y. 2 010-11. THE EFFECTIVE GROUNDS OF APPEAL ARE AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT(A), KOTA HAS ERRED IN:- (I) NOT UPHOLDING REJECTION OF BOOKS OF ACCOUNT U/S 145(3) OF THE INCOME TAX ACT, 1961, WHEN THE A.O. HAS CLEARL Y POINTED OUT DEFECTS IN THE BOOKS OF ACCOUNTS; 2 ITA NO. 707/JP/2013 ITO VS JYOTI GENERAL INDUSTRIES (II) DELETING THE ADDITION OF RS. 33,95,619/- ON AC COUNT OF LOW YIELD, WHEN THE A.O. HAS GIVEN VALID REASONS AND QUOTED COMPARABLE CASE; (III) DELETING ADDITION OF RS. 1,91,768/- ON ACCOUN T OF DIFFERENCE IN VALUATION OF CLOSING STOCK OF DHAN PA DDY, BY IGNORING THE PURCHASE RATE OF RS.1,664/- PER QTL. F OR THE PADDY PURCHASED IN MARCH, 2010. (IV) DELETING THE ADDITION OF RS. 10,40,609/- ON AC COUNT OF DISALLOWANCE OF CONSUMPTION OF BARDANA, IGNORING THE DETAILED REASONS GIVEN IN THE ASSESSMENT ORDER. (V) DELETING THE DISALLOWANCE OF INTEREST OF RS. 29 ,250/- ON ACCOUNT OF NON CHARGING OF INTEREST FROM SH. KALYAN MEENA; (VI) DELETING THE DISALLOWANCE OF RS. 11,98,272/- OU T OF VARIOUS EXPENSES, WHEN THE A.O. HAS SPECIFICALLY HEL D THAT THE VOUCHERS FOR THESE EXPENSES WERE NOT PROPER AND WERE HAND WRITTEN; 2. THE ASSESSEE FILED ITS RETURN ON 07/7/2010 DECLAR ING TOTAL INCOME OF RS. 6,73,100/-. THE CASE WAS SCRUTINIZED U/S 143(3) O F THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) VIDE ORDER DATED 28/12/2012 . GROUND NO. 1 AND 2 OF THE APPEAL ARE AGAINST UPHOLDING THE REJECTION OF B OOKS OF ACCOUNT U/S 145(3) AND DELETING THE ADDITION OF RS. 33,95,619/- ON ACCOUNT OF LOW YIELD. THE ASSESSEE IS ENGAGED IN MANUFACTURING RICE. DURIN G THE ASSESSMENT PROCEEDINGS, THE ASSESSEE PRODUCED BOOKS OF ACCOUNT CONSISTING OF CASH BOOK, LEDGER, QUANTITATIVE DETAILS, RELEVANT PURCHA SE AND SALE BILLS AND VOUCHERS FOR EXPENSES, WHICH WAS EXAMINED ON TEST CHE CK BASIS. DURING THE 3 ITA NO. 707/JP/2013 ITO VS JYOTI GENERAL INDUSTRIES YEAR UNDER CONSIDERATION, THE ASSESSEE FIRM DERIVED INCOME FROM MANUFACTURING OF RICE AND TRADING OF RICE, RICE BRA N, FOOD GRAIN, EDIBLE OIL, SUGAR, DESHI GHEE ETC. AND THE ASSESSEE HAD SHOWN NE T PROFIT RATE IN A.Y. 2009-10 @ 1.31% ON TURNOVER OF RS. 13.81 CRORES, WHI CH WAS 1.27% DURING THE YEAR UNDER CONSIDERATION ON TOTAL TURNOVER OF R S. 20.33 CRORES. THE LD ASSESSING OFFICER FURTHER OBSERVED THAT YIELD RATE (RICE) WAS PREPARED ON THE BASIS OF AUDIT REPORT, SHOWS THAT DURING THE YEAR TH E ASSESSEE HAD SHOWN G.P. RATE @ 64.87% AS AGAINST 64.88% IN IMMEDIATE PR ECEDING YEAR. HE ALSO COMPARED YIELD RATE WITH M/S JHANWAR RICE & DAL MILLS, WHO HAS SHOWN YIELD RATE @ 65.91%. THE LD ASSESSING OFFICER GAVE RE ASONABLE OPPORTUNITY OF BEING HEARD AND PROPOSED TO REJECT THE BOOKS OF ACCOUNT AS THE ASSESSEE HAD FAILED TO PRODUCE QUALITY WISE DETAILS OF PADDY AND RICE PRODUCTION REGISTER FOR VERIFICATION AND VOUCHER OF EXPENSES, WHICH WAS HANDMADE AND NOT FOUND PROPER. THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFICER THAT YIELD PERCENTAGE WAS 64.87% DURING THE YEAR UNDER CO NSIDERATION. YIELD OF PADDY IS DEPEND ON THE QUALITY OF THE PADDY, PLANT. DURING THE YEAR, THE ASSESSEE FIRM HAD CHANGED THE PLANT, THEREFORE, YIE LD WAS LOW. THE LD ASSESSING OFFICER AGAIN GAVE SHOW CAUSE NOTICE TO TH E ASSESSEE AND ASKED TO FILE MONTH WISE DETAILS OF PADDY MILLING, RICE PR ODUCTION, POWER CONSUMPTION, DULY SUPPORTED BY RELEVANT REGISTERS/B OOKS, QUALITY WISE 4 ITA NO. 707/JP/2013 ITO VS JYOTI GENERAL INDUSTRIES DETAILS OF PADDY WITH SUPPORTING EVIDENCE/REGISTERS, DETAILS OF BHUSI AND WASTAGE WITH SUPPORTING DOCUMENT EVIDENCE AND ANY OTH ER EXPLANATION/JUSTIFICATION WITH DOCUMENTARY EVIDENCES . THE ASSESSEE REPLIED VIDE LETTER DATED 26/12/2012, WHICH HAS BEEN REPRODU CED BY THE ASSESSING OFFICER ON PAGE 3 AND 4 OF THE ASSESSMENT ORDER. AF TER CONSIDERING THE ASSESSEES REPLY, THE LD ASSESSING OFFICER HELD AS UNDER:- I HAVE CAREFULLY CONSIDERED THE REPLY OF THE ASSESS EE AND IT IS FOUND THAT WRITTEN SUBMISSIONS OF THE A/R IS NOT ACC EPTABLE BECAUSE (I) THE SUBMISSION GIVEN BY THE ASSESSEE IS OF ROUTINE/GENERAL NATURE AS THE SAME IS NOT SUPPORTED BY ANY SUPPORTING DOCUMENTARY EVIDENCE. (II) THE DETAILS OF RICE BRAN AND BHUSI WASTAGE AND C HHILKA HAVE NOT GIVEN BY THE ASSESSEE WHILE THE SAME WAS REQUIRED FROM HIM. (III) THE ASSESSEE HAS NOT MAINTAINED QUALITY WISE RE GISTER OF PRODUCTION AS WELL AS SALES OF DIFFERENCE VERITIES O F RICE. (IV) THE ASSESSEE HAS NOT FURNISHED ANY CONCRETE EVI DENCE OR JUSTIFICATION TO PROVE/JUSTIFY THAT THE YIELD PERCE NTAGE SHOWN DURING THE YEAR UNDER CONSIDERATION WAS REASONABLE AND JUSTIFIED IN THE LIGHT OF FACTS MENT IONED IN THE PRECEDING PARAS. 5 ITA NO. 707/JP/2013 ITO VS JYOTI GENERAL INDUSTRIES (V) TO SUBSTANTIATE ITS CLAIM OF YIELD RATE, THE ASS ESSEE FIRM STATED THAT THERE ARE NUMBER OF BASMATI PADDY MILLI NG BUT THE ASSESSEE FAILED TO PRODUCE QUALITY WISE STOC K REGISTER TO VERIFY THE SAME. THEREFORE, LOW YIELD RAT E IS NOT JUSTIFIED IN ABSENCE OF QUALITY WISE STOCK REGIS TER. (VI) MERELY MENTION THE WRITTEN SUBMISSION THAT YIEL D AT 64.87% IN THE ASSESSEES BUSINESS LINE IS REASONABL E DOES NOT JUSTIFY THE ASSESSEES CLAIM. THE LD ASSESSING OFFICER POINTED OUT THE VARIOUS DEF ECTS IN THE MANUFACTURING PROCESS AND APPLIED THE PROVISIONS OF SECTION 145(3) OF THE ACT. AFTER CONSIDERING THE COMPARABLE CASE OF M/S J HANWAR RICE AND DAL MILLS, THE LD ASSESSING OFFICER APPLIED YIELD RATE @ 65.91% AND MADE ADDITION OF RS. 33,95,619/- IN CASE OF ASSESSEE. 3. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WHO HAD ALL OWED THE APPEAL BY OBSERVING THAT THE LD ASSESSING OFFICER REJECTED T HE BOOKS OF ACCOUNT WITHOUT BRINGING ANY SPECIFIC DEFECT ON RECORD. ACCO RDINGLY, HE HELD THAT REJECTION OF BOOKS OF ACCOUNT U/S 145(3) OF THE ACT IS NOT JUSTIFIABLE AND DELETED THE ADDITION RS. 33,95,619/-. 4. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LD DR HAS VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND AR GUED THAT THE LD 6 ITA NO. 707/JP/2013 ITO VS JYOTI GENERAL INDUSTRIES ASSESSING OFFICER HAS POINTED OUT VARIOUS DEFECTS I N THE BOOKS OF ACCOUNT AND ALSO CONSIDERED THE COMPARABLE CASE OF M/S JHAN WAR RICE AND DAL MILLS WHEREIN THE YIELD RATE WAS 65.91%. THE ASSESSEES SUBM ISSION IS ALSO NOT SUPPORTED WITH ANY EVIDENCE BEFORE THE LD CIT(A). THE LD CIT(A) HAD PASSED A CRYPTIC ORDER WITHOUT ASSIGNING A SINGLE REASONS BEFORE DELETING THE ADDITION. 5. AT THE OUTSET, THE LD AR OF THE ASSESSEE HAS REI TERATED THE ARGUMENTS MADE BEFORE THE LD CIT(A). HE FURTHER ARGUED THAT TH E IDENTICAL ADDITIONS WERE MADE IN A.Y. 2006-07, WHICH HAS BEEN DELETED BY THE LD CIT(A). THE GP RATE DURING THE YEAR UNDER CONSIDERATION IS MORE THAN COMPARED TO IMMEDIATE PRECEDING YEAR, WHICH WAS 1.31% IN A.Y. 200 9-10 AND 1.27% IN A.Y. 2010-11. IT IS FURTHER SUBMITTED THAT DURING T HE YEAR, INTEREST AND DEPRECATION HAS INCREASED FROM 46.00 LACS IN A.Y. 2 009-10 TO RS. 65.00 LACS, THEREFORE, N.P. RATE IN REALITY WAS MORE. HE FURTHER ARGUED THAT QUERY LETTER RAISED BY THE ASSESSING OFFICER WERE REPLIED BY THE ASSESSEE AND MENTIONED THAT IN CASE OF SHRI BHAGWATI RICE MILLS, YIELD RATE IS 64.08%, WHICH HAS BEEN ACCEPTED BY THE ACIT, CIRCLE-1, KOTA IN SCRUTIN Y ASSESSMENT. THE BOOKS OF ACCOUNT ARE AUDITED, THERE ARE NO PURCHASE /SALE OUTSIDE THE BOOKS. THE LD ASSESSING OFFICER CANNOT REJECT THE BOOKS OF ACCOUNT WITHOUT SPECIFYING THE DEFECTS IN IT. THE LD CIT(A) HAS RIGHT LY DELETED THE ADDITION. 7 ITA NO. 707/JP/2013 ITO VS JYOTI GENERAL INDUSTRIES 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE ASSESSEE HAD NOT FURNISHED THE DETAILS OF RICE BRAN, BHUSSI WASTAGE AND CHHILKA. THE ASSESSEE HAS ALSO NOT MAINTAINED QUALITY WISE REGISTER OF PRODUCTION AS WE LL AS SALE. THERE WAS NO JUSTIFICATION OF YIELD DISCLOSED BY THE ASSESSEE. I N PRECEDING YEAR, THE YIELD WAS 64.88%. THE COMPARABLE CASE APPLIED BY THE LD ASS ESSING OFFICER I.E. M/S JHANWAR RICE AND DAL MILLS WAS HAVING YIELD 65.91 % WHO WAS ALSO IN THE SAME LINE OF MANUFACTURING ACTIVITIES. THE ASSES SEE SUBMITTED BEFORE THE LD ASSESSING OFFICER THAT YIELD WAS DEPENDENT ON QUALITY OF PADDY AND PLANT, WHICH WAS CHANGED DURING THE YEAR BUT ON RECOR D, IT WAS NOT SUBSTANTIATED THAT ITS PLANT WAS GET CHANGED DURING THE YEAR UNDER CONSIDERATION. BEFORE THE LD CIT(A), HE TOOK THE SUP PORT OF ORDER OF THE LD CIT(A) FOR A.Y. 2006-07, WHICH HAS BEEN REPRODUCED B Y THE LD CIT(A) ON PAGE 4,5, AND 6 OF HIS ORDER. THE LD CIT(A) HAS NOT G IVEN ANY BASIS OF ALLOWING THE APPEAL ON 145(3) EXCEPT SAYING THAT THE ASSESSING OFFICER HAD NOT BROUGHT ANY SPECIFIC DEFECT ON RECORD BUT IN AS SESSMENT ORDER, HE HAS GIVEN VARIOUS DISCREPANCIES IN THE MANUFACTURING PR OCESS AND MAINTAINING OF BOOKS OF ACCOUNT. THE LD CIT(A) NEITHER BROUGHT ON R ECORD THE FACTS OF COMPARABLE CASE GIVEN BY THE ASSESSEE I.E. SHRI BHA GWATI RICE MILLS OR TAKEN BY THE ASSESSING OFFICER I.E. M/S JHANWAR RICE AND D AL MILLS. EVEN HE HAS 8 ITA NO. 707/JP/2013 ITO VS JYOTI GENERAL INDUSTRIES NOT CONSIDERED THE PLANT CHANGED DURING THE YEAR. TH E LD CIT(A) ORDER IS VERY CRYPTIC AND NOT BASED ON ANY FACTS AND FIGURE NARRATED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. THEREFORE, IN THE INTEREST OF JUSTICE, WE SET ASIDE THIS ISSUE TO THE LD CIT(A). ACCORDINGLY, THIS GROUND IS SET ASIDE TO THE LD CIT(A). 7. GROUND NO. (III) OF THE APPEAL IS AGAINST DELETI NG THE ADDITION OF RS. 1,91,768/- MADE ON ACCOUNT OF DIFFERENT IN VALUATIO N OF CLOSING STOCK. THE LD ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD SH OWN CLOSING STOCK OF PADDY ON 13697.590 QUINTALS IN THE TRADING AND MANU FACTURING ACCOUNT VALUED RS. 2,26,01,030/- @ RS. 1650/- PER QUINTAL. O N VERIFICATION OF THE PURCHASE BILL HE FOUND THAT THE ASSESSEE HAD PURCHA SED PADDY @ RS. 1664/- PER QUINTAL IN THE MONTH OF MARCH, ACCORDINGLY HE V ALUED THE CLOSING STOCK AND GAVE REASONABLE OPPORTUNITY OF BEING HEARD ON T HIS ISSUE. AFTER CONSIDERING THE ASSESSEES REPLY, HE APPLIED THIS R ATE AND DIFFERENCE OF RS. 1,91,768/- WAS ADDED IN THE INCOME OF THE ASSESSEE. 7.1 THE LD CIT(A) HAD DELETED THIS ADDITION BY OBSERV ING THAT THE ASSESSEE ALSO PURCHASED PADDY IN FEBRUARY AND HAS T AKEN AVERAGE VALUE FOR VALUATION OF CLOSING STOCK, THEREFORE, HE ALLOWED TH E APPEAL. 9 ITA NO. 707/JP/2013 ITO VS JYOTI GENERAL INDUSTRIES 7.2 THE LD DR HAS VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 7.3 AT THE OUTSET, THE LD AR HAS REITERATED THE ARG UMENTS MADE BEFORE THE LD CIT(A) AND SUBMITTED THAT SOME OF THE PADDY WA S PURCHASED IN THE MONTH OF FEBRUARY AND STOCK PERTAINED IN THE MONTH OF MARCH, THEREFORE, CLOSING STOCK RIGHTLY VALUED BY THE ASSESSEE. IT IS FURTHER ARGUED THAT IF CLOSING STOCK INCREASED IN THE YEAR UNDER CONSIDERA TION IS AUTOMATIC BECOME THE OPENING STOCK OF THE SUBSEQUENT YEAR. THEREFORE, THERE IS NO REVENUE GAIN TO THE DEPARTMENT. HE FURTHER REFERRED HON'BLE SUPREME COURT DECISION IN THE CASE OF EXCEL INDUSTRIES AND ARGUED THAT FOR SMALL REVENUE GAIN, SUCH TYPE OF ADDITION WOULD NOT BE MADE AS IN BOTH THE YEARS, TAX RATES ARE SAME. ACCORDINGLY, HE PRAYED TO CONFIRM THE ORDER O F THE LD CIT(A). 7.4 WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE ASSESSEE H AS VALUED THE CLOSING STOCK ON THE BASIS OF PURCHASE MADE IN FEBRUARY AND MARCH, 2010. AS PER ASSESSEES VALUATION, NO DISCREPANCY IS FOUND IN TH E CLOSING STOCK EVEN ASSESSEES STOCK IS VALUED ON THE BASIS OF PURCHASE PRICE OF MARCH I.E. RS. 1664/- PER QUINTAL WILL INCREASE BY 1,91,768 BUT IT AUTOMATICALLY BECOME THE OPENING STOCK OF THE SUBSEQUENT YEAR. THEREFORE, TH E ADDITION MADE BY THE 10 ITA NO. 707/JP/2013 ITO VS JYOTI GENERAL INDUSTRIES ASSESSING OFFICER IS NOT JUSTIFIED. ACCORDINGLY, WE CONFIRM THE ORDER OF THE LD CIT(A) ON THIS GROUND. 8. GROUND NO. 4 OF THE APPEAL IS AGAINST DELETING T HE ADDITION OF RS. 10,40,609/- MADE BY THE ASSESSING OFFICER UNDER THE HEAD CONSUMPTION OF BARDANA. THE LD ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD SHOWN OPENING STOCK OF BARDANA AT RS. 17,500/-, PURCHASED DURING THE YEAR RS. 34,93,698/- AND CLOSING STOCK 2,00,000/-. THUS, TOT AL BARDANA EXPENSES DEBITED AT RS. 34,68,698/-. THE LD ASSESSING OFFICER VERIFIED THE PURCHASE OF BARDANA AND GAVE SHOW CAUSE NOTICE FOR DISALLOWANCE O F EXPENSES @ 30% OUT OF TOTAL EXPENSES CLAIMED. AFTER CONSIDERING TH E ASSESSEES REPLY, HE FOUND ASSESSEES REPLY IN ROUTINE NATURE AND WITHOUT ANY EVIDENCE. THE ASSESSEE FIRM HAD NOT SUBMITTED ANY DOCUMENTARY EVI DENCE TO PROVE THE CONSUMPTION OF BARDANA. THUS, GENUINENESS OF THE CON SUMPTION OF BARDANA CANNOT VERIFY. ACCORDINGLY HE DISALLOWED 30% EXPENSE S OUT OF TOTAL BARDANA EXPENSES AND MADE ADDITION OF RS. 10,40,609/-. 9. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WHO HAD DELE TED THE ADDITION BY OBSERVING THAT THE LD ASSESSING OFFICER HAD NOT BRO UGHT ANY MATERIAL ON 11 ITA NO. 707/JP/2013 ITO VS JYOTI GENERAL INDUSTRIES RECORD TO JUSTIFY THE ADDITION, THEREFORE, HE DELET ED THE ADDITION OF RS. 10,40,609/-. 10. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LD DR HAS VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND AR GUED THAT BEFORE THE LD CIT(A), NO DETAILS WERE GIVEN FOR BARDANA USE WITH EV IDENCE. IN PAPER BOOK ALSO NO DETAILS WERE SUBMITTED BY THE ASSESSEE THAT THE ASSESSEE HAD CLAIMED THESE EXPENSES ON THE BASIS OF PURCHASED BI LLS. THEREFORE, HE PRAYED TO REVERSE THE ORDER OF THE LD CIT(A). 11. AT THE OUTSET, THE LD AR OF THE ASSESSEE HAS RE ITERATED THE ARGUMENTS MADE BEFORE THE LD CIT(A) AND ARGUED THAT HE HAS GIV EN DETAILS OF CALCULATE OF USE OF BARDANA BEFORE THE LD CIT(A) AND AFTER AN ALYZING EVERY ASPECT OF THE SAME, HE HAD COME TO THE CONCLUSION THAT THE AS SESSING OFFICER HAS NOT BROUGHT ANY MATERIAL ON RECORD TO JUSTIFY THE ADDIT ION. 12. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT IS A FACT THAT EVEN BEFORE THE ASSESSING OFFICER OR BEFORE THE LD CIT(A), THE ASSE SSEE HAS NOT PRODUCED THE PURCHASE BILLS AND DETAILS OF USE OF BARDANA. IT I S UNDISPUTED FACT THAT WITHOUT BARDANA, NO PADDY CAN BE PRODUCED AND SOLD B UT ONUS IS ON THE ASSESSEE TO PROVE THAT HE HAD PURCHASED BARDANA, US ED FOR BUSINESS 12 ITA NO. 707/JP/2013 ITO VS JYOTI GENERAL INDUSTRIES PURPOSES AND MADE A GENUINE PURCHASE FOR CLAIM OF E XPENSES. IN REPLY FILED BEFORE THE LD CIT(A), HE HAS CLAIMED THAT THE ASSESS EE HAD FURNISHED DETAILS OF ALL THE BARDANA BUT WHICH HAS NOT BEEN PROVED FRO M THE PAPER BOOK THAT REQUIRED PARTICULARS HAD BEEN SUBMITTED BEFORE THE ASSESSING OFFICER. THE LD CIT(A) HAS ALSO NOT GIVEN ANY CATEGORICAL FINDING I N HIS ORDER, THEREFORE, WE IN THE INTEREST OF JUSTICE, SET ASIDE ISSUE TO THE LD CIT(A) FOR DE NOVO. 13. GROUND NO. 5 OF THE REVENUES APPEAL IS AGAINST DELETING THE DISALLOWANCE OF INTEREST OF RS. 29,250/-. THE LD ASS ESSING OFFICER OBSERVED THAT THE ASSESSEE HAD GIVEN RS. 1,95,000/- TO SHRI KALYAN MEENA AND NO INTEREST HAD BEEN CHARGED. IT WAS SUBMITTED BEFORE T HE ASSESSING OFFICER THAT THE ASSESSEE HAD MORE INTEREST FREE FUND THEN INTEREST BEARING FUND OUT OF WHICH HE HAD GIVEN TO SHRI KALYAN MEENA FOR FOUR BIGHA AGRICULTURAL LAND ATTACHED WITH MILL, WHICH WAS USED ON RENT FREE BASIS FOR TRADING OF PADDY SINCE 1996-97. 14. THE ADDITION MADE BY THE ASSESSING OFFICER HAS B EEN DELETED BY THE LD CIT(A) ON THE GROUND THAT FACTS BEING SIMILAR FO R A.Y. 2006-07 WHERE SIMILAR ADDITIONS WERE MADE WHICH HAS BEEN DELETED BY THE ASSESSEE ON THE GROUND THAT NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE ASSESSING 13 ITA NO. 707/JP/2013 ITO VS JYOTI GENERAL INDUSTRIES OFFICER THAT INTEREST BEARING LOANS WERE DIVERTED BY THE APPELLANT TO THESE PERSONS. MOREOVER, THE AMOUNT ADVANCED AS COMMERCIA L EXPEDIENCY. 15. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LD DR HAS VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER. AT TH E OUTSET, THE LD AR OF THE ASSESSEE HAS REITERATED THE ARGUMENTS MADE BEFORE T HE LD CIT(A) AND SUBMITTED THAT SIMILAR ADDITIONS WERE MADE IN PAST A LSO, WHICH HAS BEEN DELETED BY FOLLOWING THE SAME ORDER, THE LD CIT(A) AL LOWED THE APPEAL ON THIS GROUND. ACCORDINGLY, THE SAME IS DESERVED TO B E UPHELD. 16. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE BURDEN ON REVENUE TO ESTABLISH THAT INTEREST BEARING FUNDS HAS BEEN DIVERTED FOR I NTEREST FREE ADVANCES. FURTHER THE LONEES LAND HAD BEEN USING BY THE ASSE SSEE FOR TRADING OF PADDY WHICH IS ADJACENT TO THE FACTORY OF THE ASSESS EE, THEREFORE, THERE IS A BUSINESS EXPEDIENCY TO ADVANCING THIS LOAN. ACCORDI NGLY, WE UPHELD THE ORDER OF THE LD CIT(A). 17. GROUND NO. 6 OF THE REVENUES APPEAL IS AGAINST DELETING THE DISALLOWANCE OF RS. 11,98,272/- OUT OF VARIOUS EXPEN SES. THE LD ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS DEBITED MANU FACTURING EXPENSES, BUSINESS EXPENSES, DALALI EXPENSES AND REBATE DISCO UNT IN TOTAL AT RS. 14 ITA NO. 707/JP/2013 ITO VS JYOTI GENERAL INDUSTRIES 1,19,92,717/-. THE LD ASSESSING OFFICER HELD THAT WH ATEVER EVIDENCE PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDING S ARE NOT PROPER, THUS THE GENUINENESS OF EXPENSES CANNOT BE VERIFIED. ACC ORDINGLY, HE DISALLOWED 10% OUT OF THIS, WHICH HAS BEEN DELETED BY THE LD C IT(A) BY OBSERVING THAT THE ASSESSING OFFICER HAD NOT BROUGHT ANYTHING ON R ECORD TO JUSTIFY THE DISALLOWANCE. 18. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LD DR HAS VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER. AT TH E OUTSET, THE LD AR OF THE ASSESSEE HAS REITERATED THE ARGUMENTS MADE BEFORE T HE LD CIT(A) AND FURTHER SUBMITTED THAT THE LD ASSESSING OFFICER HAD NOT POINTED OUT SPECIFIC MISTAKE IN THE EXPENSES CLAIMED BY THE ASSESSEE. HE HAD MADE CONTRADICTORY FINDINGS IN ASSESSMENT ORDER I.E. THE VOUCHERS OF EXPENSES ARE NOT FOUND PROPER AND IN ANOTHER LINE IN ASSESSEE HE HAS HELD THAT ALL THESE EXPENSES CANNOT BE CHECKED, THEREFORE, 10% IS DISAL LOWED. THE ASSESSEES BOOKS OF ACCOUNT ARE AUDITED, ALL THE RELEVANT DOCU MENTS HAD BEEN PRODUCED AS REQUIRED BY THE LD ASSESSING OFFICER DU RING THE ASSESSMENT PROCEEDINGS, THEREFORE, HE PRAYED TO CONFIRM THE OR DER OF THE LD CIT(A). 19. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE LD ASSESSI NG OFFICER HAD NO 15 ITA NO. 707/JP/2013 ITO VS JYOTI GENERAL INDUSTRIES SPECIFIED THE DEFECTS IN THE EXPENSES CLAIMED BY TH E ASSESSEE. HE MADE GENERAL OBSERVATION WITHOUT ANY BASIS AS THE BOOKS O F ACCOUNT ARE AUDITED, WHICH WAS PRODUCED BEFORE THE ASSESSING OFFICER DURIN G THE ASSESSMENT PROCEEDINGS. EVEN HE HAS NOT COMPARED THE EXPENSES WITH REFERENCE TO TURNOVER WITH IMMEDIATE PRECEDING YEARS EXPENSES, TH EREFORE, WE UPHOLD THE ORDER OF THE LD CIT(A). 20. IN THE RESULT, THE REVENUES APPEAL IS PARTLY A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/05/2016. SD/- SD/- YFYR DQEKJ VH-VKJ-EHUK (LALIET KUMAR) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30 TH MAY,2016 RANJAN* VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE ITO, BUNDI. 2. IZR;FKHZ @ THE RESPONDENT- M/S JYOTI GENERAL INDUSTRIES, BUNDI. 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.707/JP/2013) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR