Shri Mahesh M.Reddy, Anand V. The Income tax Officer, Ward-2, Anand

ITA 720/AHD/2005

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0331 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 12-08-2009
• Assessment Year: 2001-2002
• Appeal Filed On: 07-03-2005
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Assessee Lawyers: N C AMIN
• Keywords: Unexplained cash credit; Income from undisclosed sources; Assessment record; Bonafide mistake
• Section: 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HONBLE SH RI N.S. SAINI, A.M.) I.T.A. NO. 720/AHD./2005 ASSESSMENT YEAR : 2001-2002 SHRI MAHESH M. REDDY, -VS.- INCOME TAX OFFICER, WARD-2, AHMEDABAD KARMAMSAD, DIST. ANAND (P.A. NO. ACDPR 4739 A) (APPELLANT) (R ESPONDENT) APPELLANT BY : SHRI N.C. AMIN RESPONDENT BY : SHRI C.K. MISHRA O R D E R PER T.K. SHARMA, JUDICIAL MEMBER :- THIS APPEAL IS FILED BY THE ASSESSEE AGAINST TH E ORDER DT.02-12-2004 OF THE LEARNED COMMISSIONER OF INCOM E TAX(APPEALS)-V, BARODA DATED 02.12.2004 FOR THE ASSESSMENT YEAR 2001-2002. 2. GROUND NOS.1 AND 2 ARE AGAINST CONFIRMATION OF D ISALLOWANCE OF INTEREST AMOUNTING TO RS.72,500/- OUT OF TOTAL CLAIM OF RS.1,69,050/-. T HE LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT NO BORROWED FUNDS HAVE BEEN DIVERTED FOR THE N ON-BUSINESS PURPOSES AND NON-INTEREST BEARING FUND TO THE TUNE OF RS.38,64,229/- WAS AVAI LABLE WITH THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT ADVANCE TO VIMLA M. REDDY OF RS.4,35 ,000/- AND RS.50,000/- TO MANGAL MURTI FINANCE WERE GIVEN OUT OF INTEREST FREE FUNDS TO TH E EXTENT OF 38,64,229 AVAILABLE AND NO INTEREST BEARING FUNDS WERE DIVERTED FOR NON BUSINESS PURPOS E, THEREFORE, DISALLOWANCE OF INTEREST OF RS.72,750/- IS NOT CALLED FOR. THE COUNSEL OF THE ASSESSEE FURTHER SUBMITTED THAT HE HAS NO OBJECTION, IF THE ISSUE IS RESTORED TO THE FILE OF AO WHO MAY VERIFY THE AVAILABILITY OF THE FUND ON THE DATE WHEN ADVANCES TO BOTH THE PARTIES WERE GIV EN AND RE-ADJUDICATE THE ISSUE AFRESH. 3. ON THE OTHER HAND, LEARNED DR SUPPORTED THE ORDE RS OF THE AUTHORITIES BELOW. HE SUBMITTED THAT ONUS IS ON THE ASSESSEE TO PROVE NEX US I.E. INTEREST FREE FUNDS TO THE PARTIES WERE GIVEN OUT INTEREST FUNDS AVAILABLE. FOR THIS PURPOS E COMPLETE FUND FLOW CHART IS REQUIRED TO BE FURNISHED. SINCE THIS IS NOT GIVEN VIEW TAKEN BY LT . CIT(A) BE UPHELD. 2 4. WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT APPEARS THAT PLEA REGARDING AVAILABILITY OF NON-INTEREST BEARING FUND S WAS NOT RAISED BY THE ASSESSEE BEFORE BOTH THE AUTHORITIES BELOW. IN VIEW OF THIS, ADDITION TO THE EXTENT OF RS.72,500/- SUSTAINED BY THE LEARNED CIT(A) IS RESTORED TO THE FILE OF THE AO WI TH THE DIRECTION THAT IN CASE ASSESSEE IS ABLE TO PROVE THE AVAILABILITY OF THE INTEREST FREE FUNDS O N THE DATE ON WHICH THE ADVANCES WERE GIVEN TO BOTH THE PARTIES, TO THE SATISFACTION OF THE AO. HE MAY DELETE THE ADDITION. THE A.O. AFTER VERIFYING THE DETAILS RE-ADJUDICATE THIS ISSUE AFRE SH IN ACCORDANCE WITH THE LAW. 5. THE GROUND NOS.3 AND 4 ARE AGAINST THE CONFIRMAT ION OF ADDITION OF RS.1,30,000/- HOLDING IT AS UNEXPLAINED CASH CREDIT. AT THE TIME OF HEARING BEFORE US, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS NOT CREDIT ED OR DEBITED THE SAID AMOUNT, BUT BALANCE IS CARRIED FORWARDED FROM THE THE EARLIER YEARS AND THEREFORE, THE ADDITION OF RS.1,30,000/- MADE BY THE AO AND CONFIRMED BY THE LEARNED CIT(A) ON TH E ASSUMPTIONS AND PRESUMPTIONS, DESERVES TO BE DELETED. 6. ON THE OTHER HAND, LEARNED DR APPEARED FOR THE R EVENUE CONTENDED THAT IN THE BOOKS OF ACCOUNTS OF ONE OF THE PROPRIETARY CONCERNS OF THE ASSESSEE VIZ. M/S.SHIVSHAKTI ENGINEERING THE ASSESSEE HAS SHOWN CREDIT BALANCE OF RS.1,30,000/- IN THE NAME OF GANESH AGRO AGENCY, LATUR, MAHARASHTRA, PROPRIETARY CONCERN OF SHRI MAHENDRA R . REDDY (FATHER OF THE ASSESSEE). THE AO SCRUTINIZED THE BALANCE SHEET OF GANESH ENGINEERING AND FOUND THAT NO DEBIT BALANCE WAS APPEARED IN THE NAME OF SHIVSHAKATI ENGINEERING. A FTER CONSIDERING THE EXPLANATION OF THE ASSESSEE, THE AO FOUND THAT THE SAME UNTENABLE AND MADE THE IMPUGNED ADDITION. THE ASSESSEE BEFORE THE CIT(A) MADE NO SPECIFIC SUBMISSIONS WITH REGARD TO THIS ADDITION, THEREFORE, THE ORDER OF THE CIT(A) BE UPHELD. 7. RIVAL SUBMISSIONS HAVE BEEN CONSIDERED. IT IS P ERTINENT TO NOTE THAT THE ASSESSEE AS WELL AS MAHENDRABHAI R. REDDY, PROPRIETOR OF GANESH ENGI NEERING IS ASSESSED BY THE SAME AO. THE PAN OF THE SAID MAHENDRABHAI R. REDDY IS ACDPR 4737 Q. THE AO MADE NO ATTEMPT TO MAKE CROSS-EXAMINATION FROM THE ASSESSMENT ORDER OF MAHE NDRABHAI R. REDDY, PROPRIETOR OF GANESH ENGINEERING. IN THE ASSESSMENT ORDER, THE AO PRESU MED THAT THE ASSESSEE HAS REPAID RS.1,30,000/- OUT OF UNACCOUNTED INCOME AND THE SAI D CASH TRANSACTIONS HAS NOT BEEN RECORDED IN THE BOOKS OF ACCOUNTS. BEFORE US, LD. COUNSEL OF A SSESSEE SUBMITTED THAT ASSESSEE HAS NOT PAID ANY AMOUNT IN CASH OR CHEQUE NOR IN ANY OTHER MODE WHICH MAY BE VERIFIED FROM OTHER PARTY, I.E. 3 FATHER OF ASSESSEE. IN VIEW OF THIS, WE DIRECT THE ASSESSEE TO PRODUCE COPIES OF THE ACCOUNTS OF BOTH THE CONCERNS BEFORE THE AO AND THE AO MAY SCRU TINIZE THE SAME AND MAKE CROSS- VERIFICATION FROM THE ASSESSMENT RECORD OF MR.REDDY AND RE-ADJUDICATE THE IMPUGNED ADDITION IN ACCORDANCE WITH THE LAW AFTER GIVING REASONABLE OPP ORTUNITY TO THE ASSESSEE. THESE TWO GROUNDS ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSE. 8. GROUNDS NO.5 AND 6 ARE AGAINST THE CONFIRMATION OF ADDITION OF RS.6,14,451/- HOLDING IT AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE INCOME TAX ACT, 1961. 9. THE BRIEF FACTS WITH REGARD TO THE ADDITION OF R S.6,14,451/- ARE THAT THE ASSESSEE HAS SHOWN CREDIT BALANCE AMOUNTING TO RS.8,92,575/- IN THE NAME OF M/S. GANESH INDUSTRIES, IN THE ACCOUNTS OF M/S. GANESH AGRO AGENCY. BOTH ARE PROPR IETARY CONCERNS OF THE ASSESSEE. HOWEVER, IN SCHEDULE 8 OF THE BALANCE-SHEET, THE ASSESSEE HA S SHOWN DEBIT BALANCE AMOUNTING TO ONLY RS.2,77,124/- IN THE NAME OF M/S. GANESH AGRO AGENC Y IN THE ACCOUNTS OF M/S. GANESH INDUSTRIES. SINCE THERE WAS A DIFFERENCE OF RS.6,15 ,451/-, THE A.O. ASKED THE ASSESSEE TO SHOW- CAUSE, WHY SAME SHOULD NOT BE ADDED. BEFORE THE A.O . THE ASSESSEE FAILED TO RECONCILE THE FIGURE AND COULD NOT FURNISH ANY SPECIFIC EXPLANATION. THE A.O. ACCORDINGLY MADE AN ADDITION OF RS.6,15,451/-. 10. ON APPEAL, BEFORE THE LEARNED COMMISSIONER OF I NCOME TAX(APPEALS) IT WAS CONTENDED THAT AFTER 31-3-1999, THE OPERATION OF M/S. GANESH INDUSTRIES WAS SUSPENDED AND THE TRANSACTIONS WERE AMALGAMATED IN THE ACCOUNTS OF M/S. GANESH AGR O AGENCY. WHILE AMALGAMATING, THE SAID TRANSACTIONS WERE RECORDED IN THE BOOKS OF M/S. GAN ESH AGRO AGENCY, BUT DUE TO NEGLIGENCE OF THE ACCOUNTANT OF M/S. GANESH INDUSTRIES, NECESSARY ENTRIES WERE NOT RECORDED IN ITS BOOKS OF ACCOUNTS. 11. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AFTER CONSIDERING THE AFORESAID SUBMISSION, IN THE IMPUGNED ORDER, UPHELD THE ACTIO N OF A.O. FOR THE DETAILED REASONS GIVEN IN PARA 3.18 AT PAGE 7 OF THE IMPUGNED ORDER, WHICH RE ADS AS UNDER :- I HAVE CONSIDERED THE ARGUMENT TAKEN BY THE APPELL ANT AND HAS ALSO GONE THROUGH THE ASSESSMENT ORDER AS WELL AS REPORT OF T HE ASSESSING OFFICER. IT MAY BE MENTIONED THAT BOOKS OF ACCOUNT OF THE APPEL LANT ARE AUDITED AND REPORT TO THAT EFFECT IN FORM NO. 3CB & 3CD DATED 2 2.10.01 HAS BEEN 4 FURNISHED ALONGWITH RETURN OF INCOME. NO SUCH DISCR EPANCY HAS BEEN FURNISHED ALONGWITH RETURN OF INCOME. NO SUCH DISCR EPANCY HAS BEEN REPORTED BY THE AUDITOR IN ITS TAX AUDIT REPORT. MO REOVER, IT IS ALSO NOT CLEAR AS TO WHEN THE MISTAKE OCCURRED IN THE PRECED ING YEAR, WHY COULD NOT IT BE RECTIFIED IN THE PRECEDING YEAR ITSELF, A T THE TIME OF FINALIZATION OF ACCOUNTS OF THAT YEAR AND EVEN IN THE CURRENT YEAR, I.E. F.Y. 2000-01 AT THE TIME OF FINALIZATION OF ACCOUNTS. ON BEING ASKED TH AT IF AT ALL, THIS DIFFERENCE IS CONCERNED JUST A MISTAKE, THEN IT WIL L HAVE AT OTHER PLACES ALSO, BEING DOUBLE ENTRY ACCOUNTING SYSTEM, THE APP ELLANT TRIED TO GIVE SOME EXPLANATION, WHICH AGAIN INVOLVES ALTERATION/ VARIATION AT THREE DIFFERENT PLACES. IT IS BEYOND COMPREHENSION THAT I F SUCH WAS THE VARIATION AT SO MANY PLACES, THEN, HOW THE BOOKS OF ACCOUNTS AND P&L A/C. AND BALANCE-SHEET DRAWN ON THE BASIS OF THOSE BOOKS HAV E BEEN FOUND CORRECT AT THE TIME OF TAX AUDIT CONDUCTED BY THE AUDITOR. CONSIDERING THESE FACTS, THE CLAIM OF THE APPELLANT THAT THERE WAS MISTAKE, AS AFORESAID, IS REJECTED AND I SEE NO REASON TO INTERFERE IN THE AFORESAID A DDITION MADE BY THE ASSESSING OFFICER. 12. AT THE TIME OF HEARING ON BEHALF OF ASSESSEE SH RI N.C. AMIN POINTED OUT THAT THERE IS NO CASH CREDIT OF RS.6,15,451/- DURING THE YEAR UNDER CONSIDERATION AS ALLEGED BY THE A.O. THIS WAS EXPLAINED TO A.O., WHEREIN BOTH THE ACCOUNTS WERE T ALLIED. BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS), VIDE LETTER DATED 03.09.2002 C LARIFICATION WAS FURNISHED BUT THE SAME WAS NOT CONSIDERED BY THE LEARNED COMMISSIONER OF INCOM E TAX(APPEALS). THE LD. COUNSEL OF THE ASSESSEE ALSO RELIED ON VARIOUS CASE LAWS FOR THE P ROPOSITION THAT OPENING BALANCE CANNOT BE ADDED IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSME NT YEAR UNDER APPEAL. HE ACCORDINGLY SUBMITTED THAT THIS ADDITION MADE BY THE A.O. BE DE LETED. 13. ON THE OTHER HAND, SHRI C.K. MISHTRA, LD. DEPAR TMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF AUTHORITIES BELOW. HE POINTED OUT THAT THE ASSESSEE IS A PROPRIETOR OF BOTH THE CONCERNS, NAMELY M/S. GANESH AGRO AGENCY AND M/S. GANESH INDU STRIES. THE BOOKS OF ACCOUNTS OF THE ASSESSEE ARE AUDITED AND REPORT TO THAT EFFECT IN F ORM NO.3CB AND 3CD DATED 20-10-2001 WERE FURNISHED ALONG WITH RETURN OF INCOME. NO SUCH DIS CREPANCY/ MISTAKE HAS BEEN REPORTED BY THE 5 AUDITOR IN TAX AUDIT REPORT. THE LEARNED CIT(A) AL SO OBSERVED THAT IT IS NOT CLEAR AS TO WHEN THE MISTAKE WAS OCCURRED IN THE PRECEDING YEAR, WHY IT COULD NOT BE RECTIFIED IN THE PRECEDING YEAR ITSELF AT THE TIME OF FINALIZING THE ACCOUNTS. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS ALSO OBSERVED THAT IN CASE THE DIFFERENCE IS CO NSIDERED JUST AS MISTAKE FOUND, IT WILL HAVE EFFECTED AT OTHER PLACES ALSO AS THE ASSESSEE IS MA INTAINING BOOKS OF ACCOUNTS IN DOUBLE ENTRY SYSTEM. THE LD. D.R. ALSO POINTED OUT HOW THE TAX AUDITOR FOUND THE BOOKS OF ACCOUNTS OF THE ASSESSEE AS CORRECT WHILE CONDUCTING TAX AUDIT. AFT ER CONSIDERING ALL THESE ASPECTS, IN THE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) RIGHTLY CONFIRMED THE ADDITION. THEREFORE, THE ORDER OF LEARNED COMMISSIO NER OF INCOME TAX(APPEALS) BE UPHELD. 14. AFTER HEARING BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IN CASE IT WAS A BONAFIDE MISTAKE, THE ASSES SEE COULD HAVE OBTAINED A CERTIFICATE FROM THE CONCERNED CHARTERED ACCOUNTANT, WHO CONDUCTED TAX A UDIT UNDER SECTION 44AB OF THE INCOME TAX ACT, 1961 IN ORDER TO PIN POINT THE BONAFIDE MI STAKE AND WHY IT COULD NOT BE LOCATED BY THE AUDITOR. IN VIEW OF THIS, WE RESTORE THIS ISSUE TO THE FILE OF AO WITH A DIRECTION THAT THE ASSESSEE SHOULD FURNISH A CERTIFICATE FROM THE CONCERNED CHA RTERED ACCOUNTANT, WHO CONDUCTED THE TAX AUDIT EXPLAINING THAT IT WAS A BONAFIDE MISTAKE WHE N IT OCCURRED, WHY IT WAS NOT HAVING ANY EFFECT AT OTHER PLACES ALSO, BECAUSE THE ASSESSEE W AS FOLLOWING DOUBLE ENTRY ACCOUNTING SYSTEM. AFTER MAKING DETAILED INQUIRY/SCRUTINY OF THE ACCOU NTS OF THIS YEAR AS WELL AS EARLIER YEARS, CONSIDERING THE CERTIFICATE OF THE AUDITOR, WHICH T HE ASSESSEE SHALL FURNISH, A.O. WILL ADJUDICATE THE ADDITION OF RS.6,14,451/- AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING ADEQUATE OPPORTUNITY OF HEARING TO BOTH THE SIDES. 15. BEFORE PARTING WITH, WE MAY ADD THAT THE ASSESS EE IS PROPRIETOR OF BOTH THE CONCERNS, IN CASE, THE ADDITION CAN NOT BE MADE FOR TECHNICAL RE ASONS IN THE ASSESSMENT YEAR UNDER APPEAL, IN THAT EVENT, ADDITION CAN BE MADE IN EARLIER YEARS B ECAUSE THE ASSESSEE IS PROPRIETOR OF BOTH THE CONCERNS, WHICH WERE AMALGAMATED AS STATED BEFORE B OTH THE DEPARTMENTAL AUTHORITIES BELOW. THE VARIOUS CASE LAW RELIED BY THE ASSESSEE ARE NOT APPLICABLE BECAUSE IN THESE CASES TRANSACTIONS WERE WITH 3 RD PARTY. IN THIS CASE, THE ASSESSEE IS THE PROPRIETO R OF BOTH THE CONCERNS. ONUS IS ENTIRELY ON THE ASSESSEE TO RECONCILE THE DIFFERENC E. 16. THE LAST GROUND OF APPEAL IS REGARDING DISALLOW ANCE OF CAR RENT OF RS.36,000/-. BRIEF FACTS RELATING TO THIS ADDITION IS THAT IN THE PROFIT & L OSS A/C., THE ASSESSEE HAS DEBITED RS.96,000/- ON 6 ACCOUNT OF VEHICLE RENT AND THE ACCOUNT OF M.R. RED DY (HUF) WAS CREDITED BY THE SAME AMOUNT. IT WAS CLAIMED THAT THE AMOUNT OF RS.48,000/- WAS P AID BY CHEQUE ON 02.01.2001 AND REMAINING AMOUNT OF RS.48,000/- HAS BEEN PAID IN THE FINANCIA L YEAR 2001-02. THE A.O. ASKED THE ASSESSEE TO PRODUCE THE BILL BUT THE ASSESSEE FAILED TO ESTA BLISH BEFORE THE A.O. THAT ACTUAL RENT PAYABLE IS RS.96,000/-. ON VERIFICATION FROM THE ASSESSMENT RE CORD OF SHRI M.R. REDDY (HUF), THE A.O. FOUND THAT THE SAID HUF HAS SHOWN VEHICLE RENT OF R S.60,000/- ONLY. THEREFORE, IT IS CLEAR THAT THE ASSESSEE HAS INFLATED THE VEHICLE RENT BY RS.36,000 /-. HE ACCORDINGLY DISALLOWED RS.36,000/-. 17. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME T AX(APPEALS) CONFIRMED THE ADDITIOIN ON THE GROUND THAT THE ASSESSEE HAS NOT AGITATED TH IS ISSUE BEFORE HIM. AT THE TIME OF HEARING, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT SHRI MAH ENDRA R. REDDY (HUF) IS OWNER OF THE MARUTI CAR. THE SAID HUF IS ASSESSED WITH SAME A.O. AND FI LING HIS RETURN OF INCOME ON CASH BASIS. AS THE ASSESSEE IS MAINTAINING HIS ACCOUNTS ON MERCANT ILE BASIS, THEREFORE, THE ASSESSEE HAS DEBITED MARUTI CAR RENT EXPENDITURE OF RS.96,000/- FOR THE ACCOUNTING YEAR 2000-01 RELEVANT TO ASSESSMENT YEAR 2001-02 IN SUPPORT OF THIS CONFIRMA TION OF THE OWNER OF MARUTI CAR, WHICH WAS ALSO PLACED BEFORE US. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) WRONGLY STATED THAT NO SUBMISSIONS WERE MADE BY THE ASSESSEE IN RESPECT OF THIS GROUND OF APPEAL. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT EVEN IF NO SUBMISSIONS WERE MADE, IT WAS THE DUTY OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) TO DECIDE THE G ROUND OF APPEAL ON MERIT IN ACCORDANCE WITH LAW. 18. ON THE OTHER HAND, SHRI C.K. MISHRA, LD. DEPART MENTAL REPRESENTATIVE CONTENDED THAT SINCE THIS GROUND VIRTUALLY NOT PRESSED BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS), THEREFORE, THIS GROUND OF APPEAL BE R EJECTED. ALTERNATIVELY, THE LD. D.R. POINTED OUT THAT RENT IN RESPECT OF MARUTI CAR IS PAID TO HUF, WHICH IS HIT OF PROVISIONS CONTAINED IN SECTION 40A(2) OF THE INCOME TAX ACT, 1961. AT THE RELEVANT TIME, THE COST OF THE CAR IS ONLY AROUND RS.2 LAKHS. FROM THE PROFIT & LOSS A/C, OF THE VARIOUS P ROPRIETARY CONCERNS, IT APPEARS THAT RENT AND MAINTENANCE EXPENSES OF CAR ARE MADE BY THE ASSESSE E, THEREFORE, RENT OF RS.60,000/- (@ RS.5,000/- PER MONTH) ALLOWED BY THE A.O. IS FAIR A ND REASONABLE. THEREFORE, THE ACTION TAKE BY BOTH THE DEPARTMENTAL AUTHORITIES BELOW BE UPHELD. 7 19. WE HAVE GIVEN OUR CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS MADE BEFORE US AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT BEFORE THE A.O. THE ASSESSEE DOES NOT WANT TO FURNISH THE COMPLETE DETA ILS, I.E. AGREEMENT WITH THE HUF, ETC. SO THAT A.O. CAN FIND OUT THAT WHO IS BEARING THE REPAIR AN D MAINTENANCE EXPENSES AS WELL AS PETROL EXPENSES FOR RUNNING THE VEHICLE. THIS FACT IS ALSO VERIFIABLE FROM THE ASSESSMENT RECORDS OF SHRI MAHENDRA R. REDDY (HUF), WHO IS ASSESSED WITH THE S AME A.O. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE RESTORE THI S ISSUE TO THE FILE OF A.O. WITH THE DIRECTION THAT A.O. MAY FIND OUT THE DETAILED TERMS AND CONDI TIONS UNDER WHICH THE CAR WAS TAKEN ON HIRE. WHETHER THE RENT PAID IS EXCESSIVE OR UNREASONABLE WITHIN THE MEANING OF SECTION 40A(2) OF THE INCOME TAX ACT, 1961. THE A.O. MAY MAKE CROSS VERIF ICATION IN ORDER TO FIND OUT WHO IS INCURRING MAINTENANCE, PETROL, DRIVER EXPENSES OF T HE VEHICLE AND RE-ADJUDICATE ON THE ISSUE AFRESH AFTER PROVIDING REASONABLE OPPORTUNITY OF HE ARING TO THE ASSESSEE. 20. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE COURT ON 09.10.2009 SD/- SD/- (N.S. SAINI) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 09 / 10 / 2009 COPY OF THE ORDER IS FORWARDED TO : 1) SHRI MAHESH M. REDDY, KARAMSAD, DIST. ANAND, (2) ITO, WARD-2, AHMEDABAD 3) CIT(A)- ,AHMEDABAD (4) CIT- ,AHMEDA BAD.(5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER LAHA/SR.P.S. DEPUTY REGISTRAR, ITAT, AHMEDA BAD