The Republic Pvt. Ltd., Ranchi V. ACIT, Ranchi

ITA 75/RAN/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0029 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 11-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ABHAY KUMAR
• Assessee Lawyers: V K JALAN
• Keywords: Business expenditure; Opportunity of being heard
• Section: 145; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI BENCH, RANCHI BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER AND SHRI M.BALAGANESH, ACCOUNTANT MEMBER ITA NO. 75 / RAN / 2015 ASSESSMENT YEAR :2007-08 THE REPUBLIC PVT. LTD., C/P VINAY KR. JALAN, 48, CART SARAI ROAD, UPPER BAZAR, RANCHI-834001 [ PAN NO.AACCT 0051 D ] V/S . ACIT, CIRCLE-III, RANCHI ANNEXXEE BUILDING, MAIN ROAD, RANCHI /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI V.K. JALAN, FCA /BY RESPONDENT SHRI ABHAY KUMAR, DR /DATE OF HEARING 06-09-2016 /DATE OF PRONOUNCEMENT 09-09-2016 / O R D E R PER N.V.VASUDEVAN, JUDICIAL MEMBER:- THIS IS AN APPEAL BY THE REVENUE/ASSESSEE AGAINST THE ORDER DATED OF COMMISSIONER OF INCOME TAX (APPEALS) RANCHI (JHARKH AND) RELATING TO ASSESSMENT YEAR (AY) 2007-08. 2. GROUND NO.A & B RAISED BY ASSESSEE OR GENERAL IN NATURE CALLING FOR NO ADJUDICATION. 3. GROUND C WAS NOT PRESSED BY ASSESSEE AND SAME IS DISMISSED AS NOT PRESSED. ITA NO.75/RAN/2015 A.Y. 2007-08 THE REPUBLIC PVT. LTD. VS. ACIT, CIR-III, R AN. PAGE 2 4. GROUND D RAISED BY ASSESSEE READS AS FOLLOWS:- D. FOR THAT UNDER THE FACTS AND CIRCUMSTANCES OF T HE CASE THE LEARNED CIT(APPEAL) WAS NOT RIGHT IN UPHOLDING THE ADDITION OF RS.5,31,425.82 UNDER THE HEAD INCOME FROM BUS PLYING. 5. THE ASSESSEE BEING A COMPANY IT CARRIES ON BUSIN ESS ACTING AS DEALER OF MAHENDRA TRACTORS & HUNDAI MOTORS. THE ASSESSEE APART FROM ACTING AS A DEALER IN TRACTORS AND SPARE PARTS ALSO DERIVED INC OME FROM HIRE CHARGES FOR PLYING BUS. ASSESSEE SHOWED A SUM OF 5,75,705/- AS INCOME FROM BUS PLYING FOR ASSESSMENT YEAR 2007-08. HOWEVER, ASSESSING OFF ICER FOUND THAT FROM AY 2006-07 INCOME FROM BUS PLYING WERE SHOWN BY ASSESS EE AT 11,07,131/-. THE ASSESSEE EXPLAINED BEFORE THE AO THAT DECLINE I N INCOME FROM BUS PLYING WAS DUE TO DECREASE IN THE NUMBER OF COMMUTERS AND THE OPERATING COST REMAINING SAME. THE AO, HOWEVER, WAS OF THE VIEW TH AT REASONS GIVEN CANNOT BE ACCEPTED. HE, THEREFORE, ESTIMATED THE INCOME FR OM TRUCK PLYING AT THE SAME FIGURE OF 11,07,131/- DECLARED BY ASSESSEE FO R AY 2006-07. THIS RESULTED IN AN ADDITION OF 5,31,425/- TO THE TOTAL INCOME OF ASSESSEE (11,07,131 5,75,705/-). 6. ON APPEAL BY THE ASSESSEE THE LD. CIT(A) CONFIR MED THE ORDER OF AO, HENCE, ASSESSEE HAS PREFERRED GROUND D BEFORE THE TRIBUNAL. 7. WE HAVE HEARD RIVAL SUBMISSIONS. IT IS SEEN FROM THE RECORD THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE HAVE BEEN PRODUCED AND EXAMINED BY THE AO. AT PAGE-7 OF THE AOS ORDER, THESE FACTS HAVE BEEN RECORDED BY THE AO AND HE HAS NOT FOUND ANY DEFECTS IN THE BOOKS OF AC COUNT MAINTAINED BY ASSESSEE. IN TERMS OF SEC. 145 OF THE INCOME TAX AC T, 1961 (THE ACT FOR SHORT) INCOME CHARGEABLE UNDER HEAD PROFIT & GAINS OF BUSINESS HAS TO BE COMPUTED IN ACCORDANCE WITH THE BOOKS OF ACCOUNTS M AINTAINED BY THE ASSESSEE AND AS PER THE SYSTEM OF ACCOUNTING REGULA RLY EMPLOYED WITH THE ASSESSEE U/S 145(3) OF THE ACT, THE AO CAN MAKE THE ASSESSMENT U/S 144 OF THE ACT TO THE BEST OF HIS JUDGMENT AND RESORT TO E STIMATION OF INCOME ONLY IF ITA NO.75/RAN/2015 A.Y. 2007-08 THE REPUBLIC PVT. LTD. VS. ACIT, CIR-III, R AN. PAGE 3 HE IS NOT SATISFIED ABOUT THE CORRECTNESS OR COMPLE TENESS OF THE ACCOUNTS OF THE ASSESSEE. THE LAW IS WELL SETTLED THAT A BUSINE SSMAN IS NOT EXPECTED TO EARN SAME LEVEL OF PROFIT EACH YEAR. THEREFORE, THE AO IF HE WANTS TO MAKE AN ESTIMATE OF THE INCOME OF THE ASSESSEE, HE HAS TO S ATISFY HIMSELF ABOUT THE CONDITIONS MENTIONED IN SEC. 145(3) OF THE ACT. IN THE PRESENT CASE, NO SUCH SATISFACTION HAS BEEN ARRIVED AT BY THE AO. WE ARE THEREFORE, OF THE VIEW THAT THE ESTIMATION OF INCOME BY THE AO IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE WAS NOT PROPER. THE ADDITION MADE BY T HE AO AND CONFIRMED BY LD. CIT(A) IS DIRECTED TO BE DELETED. 8. GROUND E WAS NOT PRESSED BY THE ASSESSEE AND SAM E IS DISMISSED AS NOT PRESSED. 9. GROUND F RAISED BY ASSESSEE READS AS FOLLOWS:- F. FOR THAT UNDER THE FACTS AND CIRCUMSTANCES OF T HE CASE THE LEARNED CIT(APPEAL) WAS NOT RIGHT IN CONFIRMING THE ADDITIO N OF RS.18,43,825/- UNDER THE HEAD LIASIONING CHARGES WHEN THESE AMOUNT S WERE PAID TO THE PERSONS BY ACCOUNT PAYEE CHEQUE ON WHICH TDS WERE A LSO DEDUCTED AND FOR THE SUBSEQUENT AND EARLIER YEARS, THESE EXP ENSES WERE ALLOWED AS BUSINESS EXPENSES WHICH WAS DEMONSTRATED BEFORE THE LEARNED CIT(A) IN COURSE OF HEARING. 10. IT IS NOT IN DISPUTE BEFORE US THAT IDENTICAL DISALLOWANCE OF LIASIONING EXPENSES MADE BY THE REVENUE AUTHORITIES UNDER IDEN TICAL FACTS AND CIRCUMSTANCES IN ASSESSEES ASSESSMENT FOR AY 2005- 06 WAS CONSIDERED BY THIS TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2005-06 AND THIS TRIBUNAL RESTRICTED THE DISALLOWANCE OF LIASIONING CHARGES T O 25%. THE FOLLOWING WERE THE RELEVANT OBSERVATION OF THE TRIBUNAL IN ITA NO.138/RAN/2009 FOR AY 2005- 06 DATED 26.11.2010:- 5. GROUND NO. 4 OF THE ASSESSEES APPEAL IS IN RES PECT OF RESTRICTING THE EXPENSES TOWARDS COMMISSION ON SALE FROM 50% TO 10% ON TOTAL RECEIPT OF RS.33,87,924/- REVENUE IS ALSO IN APPEAL ON THIS ISSUE VIDE GROUND NO. 3 OF ITS APPEAL. THE ASSESSING OFFICER IN THE A SSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE HAS SHOWN A SUM OF RS.33,87,924/- AS EXPENSES UNDER THE HEAD LIASIONIN G EXPENSES. THE ITA NO.75/RAN/2015 A.Y. 2007-08 THE REPUBLIC PVT. LTD. VS. ACIT, CIR-III, R AN. PAGE 4 ASSESSEE WAS ASKED TO FILE DETAILS AND PRODUCE BILL S, VOUCHERS, ETC., FOR VERIFICATION. THE ASSESSEE FILED LEDGER COPY OF THE EXPENSES BUT NO BILLS, VOUCHERS COULD BE PRODUCED FOR VERIFICATION. THE EX PENSES CLAIMED ARE THEREFORE, NOT FULLY VOUCHED AND VERIFIABLE, HENCE THE ASSESSING OFFICER. DISALLOWED 50% OF THE EXPENSES AND ADDED RSS.16,93, 962/- TO THE TOTAL INCOME OF THE ASSESSEE. IN APPEAL, THE LD. CIT(A) R ESTRICTED THE DISALLOWANCE TO 10% ONLY. HENCE, THE ASSESSEE AS WE LL AS THE REVENUE ARE IN APPEAL BEFORE US. AT THE TIME OF HEARING BEF ORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LEDGER COPY OF THE EXPENSES WERE SUBMITTED TO THE ASSESSING OFFICER WH O WAS SATISFIED AS THE AMOUNTS WERE PAID BY WAY OF ACCOUNT PAYEE CHEQU E TO ALL THE PERSONS. NO BILLS, VOUCHERS WERE ASKED FOR BY HIM. HE ALSO SUBMITTED THAT THERE WAS NO REASON FOR DISALLOWING THIS AMOUN T AS THERE WAS NO CLARIFICATION IN THE AUDIT REPORT. THE AMOUNT HAS B EEN PAID VIDE ACCOUNT PAYEE CHEQUES. THEREFORE, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND RESTRICTED TO 10% BY THE LD. CIT(A) IS DEVOID OF ANY MERIT AND THE ADDITION SO SUSTAINED BY THE LD. CIT(A) MAY BE DELETED IN FULL. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDER O F THE AO AND SUBMITTED THAT THOUGH THE LD. CIT(A) HAS HELD THAT THE EXPENSES WERE ON HIGHER SIDE BUT EVEN THEN HE RESTRICTED THIS ADD ITION TO 10% ONLY WHICH IS ARBITRARY AND UNFAIR. THE LD. CIT(A) HAS G IVEN RELIEF TO THE ASSESSEE WITHOUT ANY REASONS DESPITE THE FACT THAT THE ASSESSEE FAILED TO PRODUCE DETAILS OF THE EXPENSES CLAIMED. HE, THE REFORE, PRAYED BEFORE THE BENCH TO RESTORE THE ORDER OF THE ASSESS ING OFFICER IN THIS REGARD. AFTER HEARING THE RIVAL SUBMISSIONS AND PER USING THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE LD. CIT(A) WH ILE RESTRICTING THE DISALLOWANCE TO 10% HAS OBSERVED AS UNDER:- I HAVE CONSIDERED THE OBSERVATION OF THE AO AND SU BMISSION OF THE AR OF THE APP. THE APPELLATE DEALS IN SALE OF T RACTOR AND PALIO CAR. FOR TRACTOR HE IS RECEIVING RS.2500/- AS COMMI SSION AND FOR PALIO CAR RS.3000/- ONLY. APPELLATE HAS DECLARED SA LE OF CAR DURING THE YEAR FOR RS.21 CRORE. AS PER THE DETAILS OBSERV ED BY THE AO, IN HIS ORDER, IT IS SEEN THAT THE APPELLATE HAS SOL D 379 CARS DURING THE YEAR AND COMMISSION ON THAT RS.11,39,000/- APPR OXIMATELY, EVEN IF THE COMMISSION RECEIVED ON SALE OF TRACTOR IS ADDED TO IT, THE LIAISIONING CHARGE CLAIMED BY THE APPELLATE IS CERTAINLY VERY HIGH. IF AT ALL THE SERVICING OF VEHICLES IS ALSO C ONSIDERED THEN ALSO THE EXPENSES ON LIAISIONING CHARGE CLAIMED IS VERY HIGH. HOWEVER, AO HAS WITHOUT ANY REASONING DISALLOWED 50% ON IT. IN MY VIEW THE DISALLOWANCE IS RESTRICTED TO 10% ONLY WHICH IS VERY REASONABLE AND JUSTIFIED. IN VIEW OF THE ABOVE, WE FIND FORCE IN THE CONTENTI ON OF THE LD. DR THAT LD. CIT(A) WAS NOT JUSTIFIED IN RESTRICTING THIS DI SALLOWANCE TO 10% AFTER HOLDING THAT THE EXPENSES WERE ON VERY HIGHER SIDE. HOWEVER, KEEPING ITA NO.75/RAN/2015 A.Y. 2007-08 THE REPUBLIC PVT. LTD. VS. ACIT, CIR-III, R AN. PAGE 5 THE FACT IN VIEW THAT PAYMENTS HAVE BEEN MADE BY CH EQUE, WE FEEL THE ENDS OF JUSTICE WILL BE MET IF THIS DISALLOWANCE IS RESTRICTED TO 25% OF THE TOTAL EXPENSES INCURRED BY THE ASSESSEE ON LIAISIONING CHARGES . THIS GOUNOD OF APPEAL OF THE ASSESSEE IS, THEREFORE , DISMISSED AND THAT OF THE REVENUE IS PARTLY ALLOWED. 11. RESPECTFULLY FOLLOWING THE DECISION OF THE TRI BUNAL WE HOLD THAT THE ADDITION MADE BY THE REVENUE AUTHORITY BE RESTRICTE D TO 25% OF THE LIAISIONING CHARGES. 12. GROUND G RAISED BY THE ASSESSEE READS AS FOLLOW S:- G. FOR THAT UNDER THE FACTS AND CIRCUMSTANCES OF T HE CASE THE LEARNED CIT(APPEAL) WAS NOT RIGHT IN NOT FULLY ALLOWING THE TRAVELLING AND CONVEYANCE EXPENSES AND RESTRICTED THE SAME TO RS.3 ,61,735/- WHEN NOTHING ADVERSE WAS FOUND WHICH LED TO THE ESTIMATE D ADDITION. 13. IT IS NOT IN DISPUTE BEFORE US THAT IDENTICAL DISALLOWANCE OF TRAVELING AND CONVEYANCE EXPENSE UNDER IDENTICAL FACTS AND CIRCUM STANCES WAS MADE IN AY 2005-06 IN THE ASSESSMENT OF THE ASSESSEE AND THIS TRIBUNAL IN ITA NO.138/RAN/2009 AND ITA NO.233/RAN/2009 DELETED THE ADDITION MADE BY THE REVENUE AUTHORITY OBSERVING AS FOLLOWS:- 13. GROUND NO.4 IS IN RESPECT OF DELETING THE ADDI TION OF RS.2,24,647/- ON ACCOUNT OF TRAVELING AND CONVEYANCE EXPENSES. A T THE TIME OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICE OBSERV ED THAT THE ASSESSEE HAD SHOWN A SUM OF RS.11,23,237/- AS EXPEN SES UNDER THE HEAD TRAVELING AND CONVEYANCE EXPENSES. THE ASSESSE E WAS ASKED TO PRODUCE BILLS AND VOUCHERS FOR VERIFICATION. THE AS SESSEE FILED LEDGER COPY OF THE EXPENSES, BUT NO BILLS AND VOUCHERS COU LD BE PRODUCED FOR VERIFICATION. HE ALSO OBSERVED THAT THE EXPENSES AL SO INCLUDE PERSONAL NATURE OF EXPENSES OF DIRECTORS WHILE ON TOUR. HENC E, HE DISALLOWED 1/5 TH OF THE EXPENSES CLAIMED AND ADDED RS.2,24,647/- TO THE INCOME OF THE ASSESSEE. IN APPEAL, THE LD. CIT(A) DELETED THE SAI D ADDITION. BEFORE US, THE LD. DR RELIED ON THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT SINCE THE ASSESSEE DID NOT PRODUCE T HE RELEVANT BILLS AND VOUCHERS IN RESPECT OF THE EXPENSES CLAIMED AND ALS O THE EXPENSES INCLUDED PERSONAL NATURE OF EXPENSES OF DIRECTORS W HILE ON TOUR, THE ASSESSING OFFICER HAS RIGHTLY DISALLOWED ONE-FIFTH OF THE EXPENSES CLAIMED. HE ALSO CONTENDED THAT THE LD. CIT(A) WAS NOT RIGHT IN DELETING THE SAID ADDITION AS THE ASSESSEE WAS UNABLE TO PRO DUCE THE RELEVANT BILLS AND VOUCHERS AND ALSO THE PERSONAL NATURE OF THE EXPENSES WAS ITA NO.75/RAN/2015 A.Y. 2007-08 THE REPUBLIC PVT. LTD. VS. ACIT, CIR-III, R AN. PAGE 6 INVOLVED. HE LASTLY PRAYED BEFORE THE BENCH TO CONF IRM THE ACTION OF THE ASSESSING OFFICER IN THIS REGARD. ON THE OTHER HAND , THE LD. COUNSEL FOR THE ASSESSEE HEAVILY RELIED ON THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT THE ASSESSING OFFICER HAS MADE THE ADDITION ON LY ON ROUTINE MANNER. HE ALSO CONTENDED THAT THE ENTIRE EXPENSES RELATES TOP THE TOUR TAKEN BY THE STAFF AND NOT BY DIRECTORS. HE, THEREF ORE, URGED BEFORE THE BENCH TO CONFIRM THE ACTION OF THE LD. CIT(A). AFTE R HEARING THE RIVAL SUBMISSIONS AND PERUSING THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE ASSESSEE CLAIMED RS.11,23,237/- AS EXPENSES UND ER THE HEAD TRAVELING AND CONVEYANCE EXPENSES AND ASSESSING OFF ICER DISALLOWED ONE-FIFTH OF THE EXPENSES CLAIMED ON ESTIMATE BASIS ON ACCOUNT OF PERSONAL EXPENSES OF DIRECTORS AND ALSO FOR WANT OF BILLS AND VOUCHERS. WE ALSO FIND THAT THE LD. CIT(A) DELETED THE ADDITI ON BY OBSERVING THAT EARLIER ALSO DISALLOWANCE HAD BEEN MADE ON TRAVELIN G AND CONVEYANCE WHICH WAS DELETED BY THE TRIBUNAL IN THE ASSESSEES CASE. HENCE, THE LD. CIT(A) DELETED THE ADDITION AS MADE BY THE ASSE SSING OFFICER. SINCE THE LD. CIT(A) DELETED THE ADDITION BY FOLLOWING TH E DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR EARLIER YEAR, W E DO NOT FIND ANY INFIRMITY IN HIS ORDER AND THE SAME IS HEREBY UPHEL D. THIS GROUND OF THE REVENUE, THEREFORE, FAILS. 14. FACTS AND CIRCUMSTANCES BEING IDENTICAL IN THE PRESENT ASSESSMENT YEAR, RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL REFERRED ABOVE WE DIRECT THE AO TO DELETE THE DISALLOWANCE OF TRAVELLING EXPENSE S. 15. GROUND H RAISED BY ASSESSEE READS AS FOLLOWS:- H FOR THAT UNDER THE FACTS AND CIRCUMSTANCES OF TH E CASE THE LEARNED CIT(APPEAL) WAS NOT RIGHT IN CONFIRMING THE ADDITI ON OF RS.5,02,051.68 AS MISC. EXPENSES WHEN SUCH EXPENSES HAD ALREADY BE EN ALLOWED EVEN BY THE LEARNED AO AND MANY A TIMES BY THIS HON BLE TRIBUNAL AS WELL AS HE HIMSELF. 16. IT IS NOT IN DISPUTE BEFORE US THAT IDENTICAL EXPENSES UNDER THE HEAD MISC. EXPENSES WERE DISALLOWED IN ASSESSEES CASE IN AY 2 005-06 AND THIS TRIBUNAL IN ITA NO.138/RAN/2009 FOR AY 2005-06 DATED 26.11.2010 WAS PLACED TO DELETE THE DISALLOWANCE MADE BY REVENUE A UTHORITIES. FOLLOWING WERE THE RELEVANT OBSERVATION OF THE TRIBUNAL IN PA RA-15 WHICH IS REPRODUCED BELOW:- 15. GROUND NO.6 IS RESPECT OF DELETING THE ADDITIO N OF RS.14,890/- ON ACCOUNT OF MISCELLANEOUS EXPENSES. ON THE SELF SAM E REASON AS STATED ITA NO.75/RAN/2015 A.Y. 2007-08 THE REPUBLIC PVT. LTD. VS. ACIT, CIR-III, R AN. PAGE 7 IN RESPECT OF PREVIOUS GROUND OF APPEAL, THE ASSESS ING OFFICER DISALLOWED 1% OF THE EXPENSES CLAIMED BY THE ASSESS EE OF RS.1,48,902/- AND ADDED RS.14,890/- TO THE TOTAL I NCOME OF THE ASSESSEE. IN APPEAL THE LD. CIT(A) DELETED THE SAID ADDITION BY OBSERVING AS UNDER:- I HAVE CONSIDERED THE OBSERVATION OF THE AO AND SU BMISSION OF THE AR OF THE APPELLANT. THE APPELLANT DEBITED RS.1 ,48,902/- AS MISCELLANEOUS EXPENSES AND ON NON-PRODUCTION OF DET AILS LIKE BILLS AND VOUCHERS FOR VERIFICATION, THE AO DISALLO WED 10% OUT OF IT AS UNVERIFIABLE AND UNVOUCHED EXPENSES. IN MY VIEW, AO HAS NOT VERIFIED THE NATURE OF EXPENSES AT ALL. APPELLATE I S A COMPANY AND HAS BIG TURNOVER. IT CANNOT BE RULED OUT THAT FOR R UNNING SUCH A BIG COMPANY MEAGER EXPENSES OF RS.1,48,902/- IS NOT GEN UINE. SIMPLY ON ROUTINE MANNER HE HAS DISALLOWED 10% OF T HE EXPENSES CLAIMED WHICH IS NOT SUSTAINABLE. HENCE, A DDITION MADE ON THIS ACCOUNT IS DELETED. AT THE TIME OF HEARING BEFORE US, THE LD.AR AND THE LD. DR BOTH HAVE REITERATED THEIR SAME SUBMISSIONS AS SUBMITTED IN P REVIOUS GROUND OF APPEAL. AFTER CONSIDERING THE SUBMISSIONS OF BOTH T HE SIDES, WE FIND THAT THE ORDER PASSED BY THE LD. CIT(A) IN THIS REGARD I S VERY MUCH JUSTIFIABLE AND WE FIND NO NEED TO INTERFERE WITH HIS ORDER AND THE SAME IS HEREBY UPHELD. THIS GROUND OF APPEAL OF THE REVENUE IS, TH EREFORE, DISMISSED. 17. FACTS AND CIRCUMSTANCES AND THE BASIS OF DISAL LOWANCE BEING IDENTICAL IN THE PRESENT ASSESSMENT YEAR, RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL WE DIRECT AO TO DELETE THE DISALLOWANCE CO NFIRMED BY LD. CIT(A) BE DELETED. 18. GROUND I RAISED BY ASSESSEE READS AS FOLLOWS:- I. FOR THAT UNDER THE FACTS AND CIRCUMSTANCES OF T HE CASE THE LEARNED CIT(APPEAL) WAS NOT RIGHT IN DISALLOWING THE EXPENS ES OF RS.63,112.12 UNDER THE HEAD OFFICE EXPENSES WHEN THE BOOKS OF AC COUNT OF THE ASSESSEE WAS DULY AUDITED AND ACCEPTED IN COURSE OF HEARING. 19. THE AO DISALLOWED 10% OF THE EXPENSE CLAIMED U NDER THE HEAD OFFICE EXPENSE AND BRANCH OFFICE EXPENSES ON THE GROUND T HAT THE EXPENSES WERE NOT SUPPORTED BY THE BILLS OR VOUCHERS AND THEREFOR E VERIFICATION OF THE EXPENSE WAS NOT POSSIBLE. ON APPEAL BY THE ASSESSEE THE LD. CIT(A) CONFIRMED THE ORDER OF AO. ITA NO.75/RAN/2015 A.Y. 2007-08 THE REPUBLIC PVT. LTD. VS. ACIT, CIR-III, R AN. PAGE 8 20. BEFORE US LD. COUNSEL FOR ASSESSEE SUBMITTED TH AT NO SHOW CAUSE WAS ISSUED BY THE AO BEFORE MAKING THE IMPUGNED DISALLO WANCE. IT WAS FURTHER SUBMITTED THAT THE BOOKS OF ACCOUNT WERE DULY AUDIT ED AND VOUCHERS WERE MAINTAINED BY THE ASSESSEE. IT WAS ALSO POINTED OUT THAT SIMILAR ADDITION MADE IN THE CASE OF ASSESSEE UNDER DIFFERENT HEADS OF EX PENSES WAS DISALLOWED BY THE TRIBUNAL IN AY 2005-06. LD. DR RELIED ON THE OR DER OF LD. CIT(A). 21. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. THE IMPUGNED DISALLOWANCE APPEARS TO HAVE BEEN MADE BY THE AO IN A ROUTINE MANNER. IN THE LIGHT OF THE FACT THAT VOUCHERS WERE MAINTAINED AND THE BOOKS OF ACCOUNT WERE AUDITED, THE AO COULD NOT HAVE MADE THE IMPUGN ED DISALLOWANCE. MOREOVER, ASSESSEE WAS NOT AFFORDED OPPORTUNITY OF BEING HEARD BEFORE MAKING THE IMPUGNED DISALLOWANCE. IN THE GIVEN FAC TS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE IMPUGNED DISALLOWANCE CANN OT BE SUSTAINED AND THE SAME IS DIRECTED TO BE DELETED. 22. GROUND J RAISED BY ASSESSEE READS AS FOLLOWS:- J. FOR THAT UNDER THE FACTS AND CIRCUMSTANCES OF T HE CASE THE LEARNED CIT(APPEAL) WAS NOT RIGHT IN CONFIRMING THE ADDITIO N OF RS.20,581/- AGAINST THE ADDITIONS PREFERRED BY THE LEARNED AO F OR RS.41,16.8 ON ACCOUNT OF COMMISSION ON SALES. 23. IT IS NOT IN DISPUTE BEFORE US IDENTICAL ADDIT ION MADE IN AY 20005-06 AND THIS TRIBUNAL IN ITA NO.138/RAN/2009 AND ITA NO.233/RAN/2009 DATED 26.11.2010 RESTRICTED THE DISALLOWANCE TO 5% OF THE EXPENSE CLAIMED UNDER THE HEAD COMMISSION ON SALES. THE FOLLOWING RELEV ANT OBSERVATION OF THE TRIBUNAL IN PARA-17 IS REPRODUCED:- 17. GROUND NO. 8 IS IN RESPECT OF RESTRICTING THE ADDITION OF RS.1,08,424/- UNDER THE HEAD COMMISSION ON SALE. FO R THE SELF SAME REASON THE ASSESSING OFFICER DISALLOWED 10% OF THE EXPENSES AS CLAIMED BY THE ASSESSEE IN RESPECT OF COMMISSION ON SALE OF RS.10,84,247/-. THE LD. CIT(A) RESTRICTED THE SAID ADDITION TO 5% BY OBSERVING THAT THE ESTIMATED ADDITION AS MADE BY TH E ASSESSING OFFICER WAS ON HIGHER SIDE. AT THE TIME OF HEARING BEFORE U S, THIS FINDING OF THE LD. CIT(A) REMAINED UNCONTROVERTED BY PRODUCING ANY COGENT ITA NO.75/RAN/2015 A.Y. 2007-08 THE REPUBLIC PVT. LTD. VS. ACIT, CIR-III, R AN. PAGE 9 MATERIAL/EVIDENCE ON BEHALF OF THE REVENUE AUTHORIT IES, HENCE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) I N RESTRICTING THE ADDITION TO 5% OF THE EXPENSES CLAIMED BY THE ASSESSEE. THIS GROUND OF APPEAL OF THE REVENUE IS, THEREFORE, DISMISSED. 24. FACTS AND CIRCUMSTANCES AND THE BASIS OF DISAL LOWANCE BEING IDENTICAL IN THE PRESENT ASSESSMENT YEAR, RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL WE DIRECT AO TO DELETE THE DISALLOWANCE CO NFIRMED BY LD. CIT(A) BE DELETED. 25. GROUND K RAISED BY ASSESSEE READS AS FOLLOWS:- K. FOR THAT UNDER THE FACTS AND CIRCUMSTANCES OF T HE CASE THE LEARNED CIT(APPEAL) WAS NOT RIGHT IN UPHOLDING THE ADDITION OF RS.42,390.98 ON ACCOUNT OF REPAIR AND MAINTENANCE WHICH WAS TOTALL Y FOR THE PURPOSE OF BUSINESS AND THESE ADDITIONS WERE NEVER UPHELD EARL IER. 26. IT IS NOT IN DISPUTE BEFORE US THAT IDENTICAL DISALLOWANCE OF EXPENSE UNDER SAME HEAD WAS CONSIDERED BY THIS TRIBUNAL IN AY 200 5-06 IN ITA NO.138/RAN/2009 AND ITA NO.233/RAN/2009 DATED 26.11.2010 THIS TRIBUNAL DELETED THE DISALLOWANCE MADE BY REVENUE AUTHORITY OBSERVING IN PARA-18 AS FOLLOWS:- 18. GROUND NO.9 IS IN RESPECT OF DELETING THE ADDI TION OF RS.13,485/- UNDER THE HEAD REPAIR AND MAINTENANCE EXPENSES. ON THE SELF SAME REASON THE ASSESSING OFFICER DISALLOWED 10% OF THE EXPENSES CLAIMED BY THE ASSESSEE I.E. RS.13,485/- AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. IN APPEAL, THE LD. CIT(A) D ELETED THE SAID ADDITION BY OBSERVING THAT CONSIDERING THE NATURE A ND BUSINESS TURNOVER OF THE ASSESSEE THE EXPENSES SHOWN AT RS.1,34,851/- IS NOT EXCESSIVE. BEFORE US, THE LD. DR DID NOT CONTROVERT THIS FINDI NG OF THE LD. CIT(A) BY PRODUCING ANY COGENT MATERIAL/EVIDENCE. HENCE, WE D O NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A) AND THE SAME IS HEREBY UPHELD. THIS GROUND OF APPEAL OF THE REVENUE IS, TH EREFORE, DISMISSED. 27. FACTS AND CIRCUMSTANCES AND THE BASIS OF DISA LLOWANCE BEING IDENTICAL IN THE PRESENT ASSESSMENT YEAR, RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL WE DIRECT AO TO DELETE THE DISALLOWANCE CO NFIRMED BY LD. CIT(A) BE DELETED. ITA NO.75/RAN/2015 A.Y. 2007-08 THE REPUBLIC PVT. LTD. VS. ACIT, CIR-III, R AN. PAGE 10 28. GROUND L RAISED BY ASSESSEE READS AS FOLLOWS:- L. FOR THAT UNDER THE FACTS AND CIRCUMSTANCES OF T HE CASE THE LEARNED CIT(APPEAL) WAS NOT RIGHT IN CONFIRMING THE ADDITIO NS OF RS.80,000/- OUT OF THE ADDITIONS MADE BY THE LEARNED AO FOR RS.92,0 06.98 UNDER THE HEAD DIESEL, PETROL AND MOBILE EXPENSES WHEN THE DI RECTOR FOR THEIR PERSONAL USE DECLARED AMPLE AMOUNT OF DRAWINGS. 29. IT IS NOT IN DISPUTE BEFORE US THAT IDENTICAL DISALLOWANCE OF EXPENSE WAS CONSIDERED BY THIS TRIBUNAL IN AY 2005-06 IN ITA NO.138/RAN/2009 AND ITA NO.233/RAN/2009 26.11.2010 AND THIS TRIBUNAL RESTRICTED THE DISALL OWANCE TO 5% OF THE EXPENSES CLAIMED. THE FOLLOWING WERE THE RELEVANT OBSERVATION IN PARA 6 AND PARA 19 ARE REPRODUCED BELOW:- 6. GROUND NO. 5 OF THE ASSESSEES APPEAL IS IN RES PECT OF RESTRICTING THE EXPENSES TOWARDS DIESEL, PETROL AND MOBILE TO RS.10 ,000/- OUT OF THE ADDITION MADE BY THE ASSESSING OFFICER AT RS.1,41,8 11/- BEING 10% OF THE EXPENSES CLAIMED AT RS.14,18,112/-. REVENUE IS ALSO IN APPEAL ON THIS ISSUE VIDE GROUND NO.10 OF ITS APPEAL. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO FURNISH THE RELEVANT BILLS AND VOUCHERS FOR VERIFICATION. IN RESPONSE THE ASSESSEE FILED LEDGER COPY OF THE EXPENSES BUT NO BILLS, VOUCHERS COULD BE PRODUC ED FOR VERIFICATION. THEREFORE, THE ASSESSING OFFICER DISALLOWED 10% OF THE EXPENSES CLAIMED AT RS.14,18,112/- AND ADDED RS.1,41,811/- T O THE TOTAL INCOME OF THE ASSESSEE. IN APPEAL, THE LD. CIT(A) RESTRICT ED THE EXPENSES TO RS.10,000/- ONLY HOLDING THAT PERSONAL USE CANNOT B E DENIED. HENCE THE ASSESSEE AS WELL AS THE REVENUE ARE IN APPEAL BEFOR E US. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASS ESSING OFFICE MADE THE ADDITION ON A ROUTINE MANNER STATING THAT NO BI LLS AND VOUCHERS WERE PRODUCED FOR VERIFICATION. IN FACTS AND CIRCUMSTANC ES, THE ASSESSING OFFICER NEVER ASKED FOR ANYTHING ON THIS ACCOUNT AN D WHEN THERE IS AUDIT REPORT THAT THE VOUCHERS ARE MAINTAINED. THE ADDITI ON CANNOT BE MADE WHERE THE ACCOUNTS ARE DULY AUDITED AND WHERE ISSUE S ARE ALREADY RESOLVED IN THE EARLIER YEARS. HE ALSO SUBMITTED TH AT THE LD. CIT(A) HAS RESTRICTED THE DISALLOWANCE TO RS.10,000/- AS PERSO NAL USE OF THE SAME CANNOT BE DENIED HAS ALSO NO MERIT. HE, THEREFORE, SUBMITTED THAT THE ADDITION SO SUSTAINED BY THE LD. CIT(A) HAS TO BE D ELETED IN FULL. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDER OF THE A SSESSING OFFICER AND URGED BEFORE THE BENCH TO CONFIRM THE SAME. AFTER H EARING THE RIVAL SUBMISSIONS AND PERUSING THE MATERIALS AVAILABLE ON RECORD, WE FIND THAT THE ASSESSEE HAS CLAIMED AN AMOUNT OF RS.14,18 ,112/- ON ACCOUNT OF DIESEL, PETROL AND MOBILE EXPENSES AND THE ASSE SSING OFFICER DISALLOWED 10% OF THE EXPENSES AND ADDED RS.1,41,81 1/- TO THE TOTAL INCOME OF THE ASSESSEE SINCE THE ASSESSEE DID NOT P RODUCE THE BILLS AND VOUCHERS FOR VERIFICATION BEFORE HIM. BEFORE TH E LD. CIT(A) ALSO NO ITA NO.75/RAN/2015 A.Y. 2007-08 THE REPUBLIC PVT. LTD. VS. ACIT, CIR-III, R AN. PAGE 11 BILLS AND VOUCHERS WERE PRODUCED AND HE ALSO HELD T HAT PERSONAL USE OF THE VEHICLES CANNOT BE RULED OUT, EVEN THEN HE REST RICTED THIS ADDITION TO RS.10,00/-, WHICH ACCORDING TO US IN NOT PROPER. SI NCE THE ASSESSEE CLAIMED THAT THE BOOKS OF ACCOUNT WERE AUDITED AND AT THE TIME OF AUDIT BILLS AND VOUCHERS WERE PRODUCED BEFORE THE AUDITOR , WE RESTRICT THIS DISALLOWANCE TO 5% OF THE TOTAL EXPENSES. THIS GROU ND OF APPEAL OF THE ASSESSEE IS DISMISSED AND THAT OF THE REVENUE IS AL LOWED IN PART. 19. GROUND NO.10 IS IN RESPECT OF DELETING THE ADDI TION OF RS.1,41,811/- ON ACCOUNT OF DIESEL, PETROL AN MOBILE EXPENSES. T HIS GROUND HAS ALREADY BEEN DEALT WITH BY US TOGETHER ALONG WITH A SSESSEES GROUND OF APPEAL WHILE DISPOSING OF GROUND NO.5 OF THE ASSESS EES APPEAL, WHEREIN THIS GROUND OF APPEAL OF THE REVENUE HAS BE EN ALLOWED IN PART. 30. FACTS AND CIRCUMSTANCES AND THE BASIS OF DISAL LOWANCE BEING IDENTICAL IN THE PRESENT ASSESSMENT YEAR, RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL WE DIRECT AO TO RESTRICT THE DISALLOWANCE TO 5% OF THE EXPENSE CLAIMED BY ASSESSEE. 31. GROUND NO. M RAISED BY ASSESSEE READS AS FOLLOW S:- M. FOR THAT UNDER THE FACTS AND CIRCUMSTANCES OF T HE CASE THE LEARNED CIT(APPEAL) WAS NOT RIGHT IN CONFIRMING THE ADDITIO NS OF RS.1,13,029.27 UNDER THE HEAD WORKSHOP EXPENSES WHEN SUCH EXPENSES ARE TOTALLY OF BUSINESS IN NATURE AND THESE ISSUES HAVE ALREADY BE EN RESOLVED IN THE EARLIER YEAR ALSO. 32. IT IS NOT IN DISPUTE BEFORE US THAT IDENTICAL EXPENDITURE DISALLOWED BY REVENUE AUTHORITY WAS DELETED BY THE TRIBUNAL IN AY 2005-06 IN ITA NO.138/RAN/2009 AND ITA NO.233/RAN/2009 ORDER DATED 26.11.2010. THE FOLLOWING WERE THE OBSERVATION OF THE ITAT IN PARA- 21 WHICH IS REPRODUCED BELOW:- 21. GROUND NO. 12 IS IN RESPECT OF DELETING THE AD DITION OF RS.49,858/- UNDER THE HEAD WORK SHOP EXPENSES. ON THE SELF SAME REASON THE ASSESSING OFFICER DISALLOWED 10% OF THE EXPENSES CL AIMED BY THE ASSESSEE I.E. RS.49,858/- AND ADDED THE SAME TO TH E TOTAL INCOME OF THE ASSESSEE. IN APPEAL, THE LD. CIT(A) DELETED THE SAID ADDITION BY OBSERVING THAT THE APPELLANT CLAIMED A SUM OF RS.4, 98,578/- UNDER THE HEAD WORK SHOP EXPENSES AND THE AO DISALLOWED 10% O F IT AS NO BILLS VOUCHERS WERE PRODUCED. THE APPELLANT HAS SHOWN ITS MAIN BUSINESS AS SALE OF CARS AND TOTAL SALE DURING THIS YEAR WAS AT RS.21,11,89,141/-. ITA NO.75/RAN/2015 A.Y. 2007-08 THE REPUBLIC PVT. LTD. VS. ACIT, CIR-III, R AN. PAGE 12 SEEING THE TURNOVER OF THE APPELLANT AND NATURE OF JOB, THE EXPENSES CLAIMED UNDER THIS HEAD IS REASONABLE. THE AO IS NO T JUSTIFIED IN DISALLOWING 10% OF THE EXPENSES UNDER THIS HEAD. HE NCE, THE ADDITION MADE ON THIS ACCOUNT IS DELETED. THIS FINDING OF TH E LD. CIT(A) REMAINED UNCONTROVERTED BEFORE US BY PRODUCING ANY MATERIAL/ EVIDENCE ON BEHALF OF THE REVENUE AUTHORITIES. HENCE, WE DO NOT FIND A NY INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A) AND THE SAME IS HERE BY UPHELD. THIS GROUND OF APPEAL OF THE REVENUE IS, THEREFORE, DISM ISSED. 33. FACTS AND CIRCUMSTANCES AND THE BASIS OF DISAL LOWANCE BEING IDENTICAL IN THE PRESENT ASSESSMENT YEAR, RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL WE DIRECT AO TO DELETE THE DISALLOWANCE CO NFIRMED BY LD. CIT(A) BE DELETED. 34. GROUND N RAISED BY ASSESSEE READS AS FOLLOWS:- N. FOR THAT UNDER THE FACTS AND CIRCUMSTANCES OF T HE CASE THE LEARNED CIT(APPEAL) WAS NOT RIGHT IN CONFIRMING THE ADDITIO N OF RS.15,329.65 ON ACCOUNT OF FACTORY DELIVERY EXPENSES WHICH ARE TOT ALLY OF BUSINESS IN NATURE AND THE SAME HAS BEEN RESOLVED IN THE YEAR A LSO. 35. IT IS NOT IN DISPUTE BEFORE US THAT IDENTICAL EXPENDITURE WAS DISALLOWED IN AY 2005-06 AND THIS TRIBUNAL HAD AN OCCASION TO CON SIDER THE CORRECTNESS OF THE DISALLOWANCE MADE BY THE REVENUE AUTHORITY. THE TRIBUNAL AFTER ELABORATE CONSIDERATION TO RESTRICT THE DISALLOWANCE TO 10% O F THE EXPENDITURE CLAIMED UNDER THE RELEVANT HEAD. THE FOLLOWING RELEVANT OBS ERVATION BY THE TRIBUNAL IN PARA-7 OF ITS ORDER IN ITA NO.138/RAN/2009 AND 233/ RAN/2009 FOR AY 2005-06 ORDER DATED 26.11.2010 WHICH IS REPRODUCED BELOW:- 7 GROUND NO. 6 RELATES TO CONFIRMING THE 10% OF TH E EXPENSES AS ADDED BY THE ASSESSING OFFICER TOWARDS TRACTOR DELI VERY EXPENSES ON ESTIMATE BASIS. IN THE ASSESSMENT PROCEEDING, THE A SSESSING OFFICER OBSERVED THAT THE ASSESSEE CLAIMED RS.1,64,128/- AS TRACTOR DELIVERY EXPENSES IN ITS P & L ACCOUNT. THE ASSESSEE WAS ASK ED TO PRODUCE BILLS AND VOUCHERS FOR VERIFICATION. THE ASSESSEE F ILED LEDGER COPY ONLY, HENCE THE EXPENSES CLAIMED UNDER THIS HEAD COULD NO T BE VERIFIED BY THE ASSESSING OFFICER. THEREFORE, HE DISALLOWED 10% OF THE EXPENSES AND ADDED RS.16,413/- TO THE TOTAL INCOME OF THE AS SESSEE ON ESTIMATE BASIS. IN APPEAL, THE LD. CIT(A) CONFIRMED THIS ACT ION OF THE ASSESSING OFFICER. BEFORE US, THE LD. COUNSEL FOR THE ASSESSE E SUBMITTED THAT ADDITION MADE BY THE ASSESSING OFFICER IN A ROUTINE MANNER STATING THAT ITA NO.75/RAN/2015 A.Y. 2007-08 THE REPUBLIC PVT. LTD. VS. ACIT, CIR-III, R AN. PAGE 13 NO BILLS AND VOUCHERS WERE PRODUCED FOR VERIFICATIO N. IN FACT, THE ASSESSING OFFICER DID NOT GIVE A SHOW CAUSE NOTICE TO THE ASSESSEE ON THIS ACCOUNT AND THERE WAS AUDIT REPORT THAT THE VO UCHERS ARE MAINTAINED. THE ADDITION CANNOT BE MADE WHERE THE A CCOUNTS ARE DULY AUDITED AND WHERE ISSUES ARE ALREADY RESOLVED IN TH E EARLIER YEARS. HE ALSO, CONTENDED THAT THE ACTION OF THE LD. CIT(A) I N CONFIRMING THE ORDER OF THE ASSESSING OFFICE IN THIS REGARD IS VERY MUCH UNJUSTIFIED AND IRRATIONAL. HE, THEREFORE, PRAYED THAT THE ADDITION SO SUSTAINED BY THE LD. CIT(A) MAY BE DELETED IN FULL. ON THE OTHER HAND, T HE LD. DR RELIED ON THE ORDER OF THE ASSESSING OFFICER. AFTER HEARING T HE RIVAL SUBMISSIONS AND PERUSING THE MATERIAL AVAILABLE ON RECORD, WE F IND THAT THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICE BY OBSERVING THAT THE ASSESSEE DID NOT FURNISH THE DETAILS AS CALLED FOR BY THE ASSESSING OFFICER TO VERIFY THE CLAIM OF THE ASSESSEE AS WELL AS BEFORE THE APPELLATE AUTHORITIES. HENCE, WE DO NOT FIND ANY IN FIRMITY IN THE ORDER OF THE LD. CIT(A) AND THE SAME IS HEREBY UPHELD. THIS GROUND OF APPEAL OF THE ASSESSEE IS ALSO DISMISSED. 36. FACTS AND CIRCUMSTANCES AND THE BASIS OF DISAL LOWANCE BEING IDENTICAL IN THE PRESENT ASSESSMENT YEAR, RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL WE DIRECT AO TO RESTRICT THE DISALLOWANCE OF EXPENSES TO 10% OF THE EXPENSE CLAIMED UNDER THE HEAD. 37. GROUND NO.O RAISED BY ASSESSEE READS AS FOLL OWS:- O FOR THAT UNDER THE FACTS AND CIRCUMSTANCES OF TH E CASE THE LEARNED CIT(APPEAL) WAS NOT RIGHT IN CONFIRMING THE ADDITIO N AGAINST SUBVENTION CHARGES AMOUNTING TO RS.2,44,832.30 WHICH WAS 10% O F THE EXPENSES WHICH WAS TOTALLY THAT OF BUSINESS IN NATURE. 38. IT IS NOT IN DISPUTE BEFORE US THAT IDENTICAL EXPENSE DISALLOWED BY THE REVENUE AUTHORITY WAS CONSIDERED BY THIS TRIBUNAL I N AY 2005-06 AND THIS TRIBUNAL RESTRICTED THE DISALLOWANCE MADE BY THE RE VENUE AUTHORITY TO 10% OF THE EXPENSE CLAIMED IN ITA NO.138/RAN/09 & 233/RAN/09 ORDER DATED 26.11.2009. THE FOLLOWING WERE THE RELEVANT OBSERVA TIONS IN PARA-8 WHICH IS REPRODUCED BELOW:- 8. GROUND NO. 7 RELATES TO CONFIRMING THE 10% OF T HE EXPENSES AS ADDED BY THE ASSESSING OFFICER TOWARDS SUBVENTION C HARGES ON ESTIMATE BASIS. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS CLAIMED A SUM OF RS.18,87,575/- AS SUBVENTION CHARG ES. THE ASSESSEE ITA NO.75/RAN/2015 A.Y. 2007-08 THE REPUBLIC PVT. LTD. VS. ACIT, CIR-III, R AN. PAGE 14 WAS ASKED TO FURNISH THE CORRESPONDING BILLS AND VO UCHERS ETC., FOR VERIFICATION. THE ASSESSEE DID NOT FURNISH THE SAME BEFORE THE ASSESSING OFFICER EXCEPT LEDGER OF EXPENSES. HENCE, HE DISALLOWED 10% OF THE EXPENSES AND ADDED RS.1,88,758/- TO THE TOTAL INCOME OF THE ASSESSEE. IN APPEAL, THE LD. CIT(A) DESCRIBED THE D ISALLOWANCE MADE BY THE ASSESSING OFFICER @ 10% AS REASONABLE AND JU STIFIABLE AND CONFIRMED THE ADDITION. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SAME SUBMISSIONS AS SUBMITTED FOR TH E EARLIER GROUND AND URGED BEFORE THE BENCH TO DELETE THE ADDITION. ON T HE OTHER HAND, THE LD. DR RELIED ON THE ORDER OF THE AO. AFTER HEARING THE RIVAL SUBMISSIONS AND PERUSING THE MATERIAL AVAILABLE ON RECORD, WE F IND THAT WHILE CONFIRMING THE ACTION OF THE ASSESSING OFFICER THE LD. CIT(A) HAS HELD AS UNDER:- I HAVE CONSIDERED THE OBSERVATION OF THE AO AND SU BMISSION OF THE AR OF THE APPELLANT. THE APPELLANT HAS CLAIMED A SUM OF RS.18,87,575/- AS SUBVENTION CHARGES, BUT NO DETAIL S HAS BEEN FURNISHED BEFORE THE AO. BEFORE ME ALSO THE APPELLA NT HAS NOT SUBSTANTIATED HIS CLAIM UNDER THE HEAD SUBVENTION C HARGES. HENCE, I AM OF THE VIEW THAT DISALLOWANCES MADE BY THE AO @ 10% IS REASONABLE AND JUSTIFIABLE. THEREFORE, THE A DDITION MADE ON THIS ACCOUNT IS CONFIRMED. 39. FACTS AND CIRCUMSTANCES AND THE BASIS OF DISAL LOWANCE BEING IDENTICAL IN THE PRESENT ASSESSMENT YEAR, RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL WE DIRECT AO TO RESTRICT THE DISALLOWANCE TO 10% OF THE EXPENSE CLAIMED. 40. OTHER GROUNDS OF APPEAL RAISED BY ASSESSEE ARE GENERAL IN NATURE AND DO NOT CALL FOR ANY SPECIFIC ADJUDICATION. 41. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT 09 /09/2016 SD/- SD/- ( ) ('# ) (M.BALAGANESH) (N.V.VASUDEVAN) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) RANCHI, *DKP $- 09 / 09 /201 6 RANCHI ITA NO.75/RAN/2015 A.Y. 2007-08 THE REPUBLIC PVT. LTD. VS. ACIT, CIR-III, R AN. PAGE 15 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-THE REPUBLIC PVT. LTD. C/O SRI VINAY KR. JALAN, 48, CART SARAI ROAD, UPPER BAZAR, RA NCHI-834 001 2. /RESPONDENT-ACIT, CIRCLE-III, ANNEXXEE BUILDING, MA IN ROAD, RANCHI 3. / 2 / CONCERNED CIT RANCHI 4. 2- / CIT (A) RANCHI 5. 5 ##/, /, / DR, ITAT, RANCHI 6. ; / GUARD FILE. BY ORDER/ , SR.PS, I TAT, RANCHI