The ITO, Ward-6(2), V. Shri Vedprakash Govindlal Nathani,

ITA 825/AHD/2004

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8958 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 17-09-2009
• Assessment Year: 1998-1999
• Appeal Filed On: 12-03-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C PANDIT
• Keywords: Tax effect
• Section: 133(6); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BENCH C AHMEDABAD BENCH C AHMEDABAD BENCH C AHMEDABAD AHMEDABAD AHMEDABAD AHMEDABAD BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI H.L. KARWA H.L. KARWA H.L. KARWA H.L. KARWA, , , , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER AND AND AND AND SHRI SHRI SHRI SHRI N NN N. .. .S. SAINI S. SAINI S. SAINI S. SAINI, , , , ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE OF HEARING: 17.09.09 DRAFTED ON: 17.09.09 ITA NO.825/AHD/2004 ASSESSMENT YEAR : 1996-1997 I.T.O. WARD NO.6(2), AHMEDABAD. VS. SHRI VEDPRAKASH GOVINDLAL NATHANI PROP. KUNA ENGINEERS & MARKETING, A/1/22, GOYAL INTERCITY, DRIVE IN ROAD, AHMEDABAD. PAN/GIR NO. : 31-135-PZ-7361 (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI M.C.PANDIT SR. D.R. RESPONDENT BY: SHRI SAKAR SHARMA O R D E R O R D E R O R D E R O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD.CIT(APPEALS)-IX, AHMEDABAD, DATED 12.12.2003. ITA NO .825/AHD/2009 M/S.VEDPRAKASH GOVINDLAL NATHANI ASST.YEAR -1996-97 - 2 - 2. GROUND NOS.1, 2 AND 3 OF THE APPEAL ARE DIRECTED AGAINST DELETION OF THE DISALLOWANCE OF COMMISSION OF RS.84,80,017/- PAID TO SARVOTTAM INDUSTRIES LTD. OUT OF COMMISSION RECEIPT OF RS.92,90,872/-. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEES MAIN SOURCE OF INCOME IS RECEIPTS FROM THE COMMISSION AND INCOME FROM OTHER SOURCES LIKE SALE & PURCHASE OF SHARES AND ALSO HOUSE PROPERTY INCOME. THE ASSESSEE RECEIVED COMMISSIONER FROM AKASH INDIA, NEW DELHI AS PER AGREEMENT DATED 12.04.1994 AND FURTHER AGREEMENT DATED 11.05.1995. THE TOTAL AMOUNT OF MATERIAL COMES TO RS.44,63,16,684/- AND COMMISSION @ 2% ON RS.40,98,62,943/- WORKS OUT TO RS.81,97,259/-. ON THE BALANCE AMOUNT OF RS.3,64,53,741/- THE COMMISSION IS CHARGED @ 3% WHICH WORKS OUT TO RS.92,80,872/-. THE ASSESSEE CLAIMED THAT IN TURN HE HAS PAID COMMISSION TO SARVOTTAM INDUSTRIES AHMEDABAD OF RS.84,80,017/- AS PER AGREEMENT DATED 10.04.1995 AND THE RATE OF COMMISSION IS 1.9% ON THE AMOUNT OF BUSINESS DONE BY KURNA ENGINEERS & MARKETING FOR AKASH INDIA LTD. NEW DELHI. THUS, ON THE AMOUNT OF RS.44,63,16,684/- @ 1.9% THE COMMISSION WORKS OUT TO RS.84,80,017/-. THE LEARNED ASSESSING OFFICER CALLED INFORMATION FROM SARVOTTAM INDUSTRIES UNDER SECTION 133(6) OF THE ACT AND IN REPLY DATED 12.02.1998 THE SARVOTTAM INDUSTRIES HAS SUBMITTED THE SAME. THE LEARNED ASSESSING OFFICER ALSO CALLED FOR DETAILS FROM AHMEDABAD MERCANTILE CO-OPERATIVE BANK LTD. GANDHINAGAR BRANCH IN RESPECT OF SARVOTTAM INDUSTRIES. AFTER COLLECTING ALL THE RELEVANT DETAILS FROM TH E ASSESSEE AND OTHER CONNECTED PARTIES AN OPPORTUNITY WAS GIVEN TO THE ASSESSEE FOR EXAMINATION UNDER SECTION 131 OF THE ACT ON 25.03.1999. AFTER VERIFICATION, THE LEARNED ASSESSING OFFICER STATED THAT TRANSACTIO N ITA NO .825/AHD/2009 M/S.VEDPRAKASH GOVINDLAL NATHANI ASST.YEAR -1996-97 - 3 - OF COMMISSION ARE FOUND TO BE CORRECT. HE WAS OF THE VIEW THAT FOR THE PURPOSE OF LIAISON FOR WHICH COMMISSION IS PAID IS NOT MENTIONED. THEREFORE, STATEMENT OF SHRI SHUSHIL JAIL FROM SARVOTTAM INDUSTRIES LT D WAS RECORDED ON 9.03.1998 WHEREIN SHRI JAIN STATED THAT THE COMMISSION IS PAID FOR LIAISONING DONE WITH THE DEPARTMENT OF TELE COMMUNICATIONS. SHRI JAIN ALSO STATED THAT THE COMPANY IS NOT IN A POSITION TO PRODUCE THE PROOF OF LIAISON WORK BEING A SENSITIVE ISSUE AND ENTIRE LIAISON WORK WAS DONE BY SHRI SHUBHASH KOTHARI. THE LEARNED ASSESSING OFFICER FURTHER OBSERVED THAT SHRI KOTHARI HAS ALSO NOT SUBMITTED ANY EVIDENCE AND HE HAS LEFT THE OFFICE AND ALSO NOT TRACEABLE. HE HAS ALSO STATED THAT THE ASSESSEE HAS ALSO NOT PROVED THE NATURE OF LIAISON WORK. THE LEARNED ASSESSING OFFICER ALSO FOUND THAT THE ASSESSEE HAS TO PAY RS.14,82,017/- TO SARVOTTAM INDUSTRIES WHICH IS IN DISPUTE AS STATED BY SARVOTTAM INDUSTRIES LTD. AND ASSESSEE HAS ALSO CONFIRMED THAT PAYMENT IS DUE. THEREFORE, THE LEARNED ASSESSING OFFICER WAS OF THE OPINION THAT IT IS NOT POSSIBLE TO KNOW WHAT ARE THE LIAISONING SERVICES RENDERED BY THE ASSESSEE AND BY M/S. SARVOTTAM INDUSTRIES. IN THE CIRCUMSTANCES, THE LEARNED ASSESSING OFFICER HELD THAT IT IS AN ARRANGEMENT TO REDUCE THE TAX EFFECT IN THE CASE OF THE ASSESSEE. ACCORDINGLY, IT WAS HELD BY THE LEARNED ASSESSING OFFICER THAT OUT OF THE TOTAL COMMISSION OF RS.92,90,872/- RECEIVED BY THE ASSESSEE HOW ASSESSEE CAN PAY COMMISSION OF RS.84,80,017/- IS ONLY FOR REDUCING THE TAX EFFECT. 4. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) DELETED THE ADDITION BY OBSERVING TO QUOTE AS UNDER:- ITA NO .825/AHD/2009 M/S.VEDPRAKASH GOVINDLAL NATHANI ASST.YEAR -1996-97 - 4 - I HAS GONE THROUGH THE ARGUMENTS VEHEMENTLY MADE BY S HRI N.D. SHAH AND SHRI VED PRAKASH NAITHANI FOR ALLOWING THE FURTHER COMMISSION TO M/S. SARVOTTAM INDUSTRIES BASED ON THE FACTS AND LEGAL POSITION. AFTER GOING THROUGH THE TRANSACTIONS WHICH ARE RECONFIRMED BY THE APPELLATE AUTHORITIES IN THE PAST INDICATE THAT THE APPELLANT HAS RE CEIVED THE COMMISSION FROM M/S. SARVOTTAM INDUSTRIES REPRESENTED BY S HRI KOTHARI DUE TO WHICH M/S. AKASH INDIA LTD. OBTAINED CONTRACT IN THE MONTH OF FEB. 1995 FROM THE DEPARTMENT OF TELECOMMUNICATION, GOVERN MENT INDIA. IMMEDIATELY, AFTER THAT THEY COULD NOT OBTAIN THE CO NTRACT WHICH HAVE GONE TO OTHER TWO PARTIES IN THE MONTH OF APRIL & MA Y, 1995 GIVING ENOUGH INDICATION THAT FOR OBTAINING THE CONTRACT, AN EFFEC TIVE LIAISONING IS REQUIRED WHICH WAS REALLY CARRIED OUT BY THE ASSES SEE WITH THE HELP OF M/S. SARVOTTAM INDUSTRIES LTD. THEREFORE, OUT OF THE COMMISSI ON RECEIVED FROM M/S. AKASH INDIA LTD. OF RS.92,20,872/- AND I N TURN PAID THE COMMISSION TO M/S. SARVOTTAM INDUSTRIES LTD. OF RS.84,80,017/ - WAS CONVINCED WITH THE ARGUMENTS MADE BY THE LEARNED AR AN D ALSO BASED ON THE JUDICIAL DECISIONS AS DISCUSSED ABOVE. THEREFOR E, I HAVE NO HESITATION IN DIRECTING THE LEARNED ASSESSING OFFICER TO ALLOW THE COMMISSION PAID TO M/S. SARVOTTAM INDUSTRIES LTD. OF RS.84,80 ,017/- AFTER ACCEPTING THE COMMISSION RECEIVED BY THE ASSESSEE OF RS.92,90,872/-. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED AND SUPPORTED THE ORDER OF THE LEARNED ASSESSING OFFICER. 6. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AND SUPPORTED THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). ITA NO .825/AHD/2009 M/S.VEDPRAKASH GOVINDLAL NATHANI ASST.YEAR -1996-97 - 5 - 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE THE ASSESSEE CLAIMED TO HAVE RECEIVED COMMISSION OF RS. 92,90,872/- FROM M/S. AKSH INDIA LTD. IN PURSUANCE TO THE AGREEMENT DATED 12-04-1994 AND 11-05-1995. FURTHER, THE ASSESSEE ALSO CLAIMED TO HAVE COMMISSION OF RS. 84,80,017/- TO M/S. SARVOTTAM INDUSTRIES IN TERMS OF AGREEMENT DATED 10-04-1995. THE LEARNED ASSESSING OFFICER EXAMINED SHRI. SUSHIL JAIN FROM SARVOTTAM INDUSTRIES LTD. UNDER SECT ION 131 AND ALSO VERIFIED THE INFORMATION FROM GANDHINAGAR BRANCH OF AHMEDABAD MERCANTILE COOPERATIVE BANK LTD. AND FOUND THAT THE PAYMENT OF COMMISSION OF RS. 84,80,017/- BY THE ASSESSEE TO M/S. SARVOTTAM INDUSTRIES LTD. WAS GENUINE. HE, HOWEVER, OBSERVED THAT THE NATURE OF SERVICES RENDERED BY M/S. SARVOTTAM INDUSTRIES LTD. TO THE ASSESSEE WAS NOT SUPPORTED BY EVIDENCE AND THEREFORE HE DISALLOWED. THE CLAIM OF DEDUCTION OF RS. 84,80,017/- BY TREATING THE SAME AS ARRANGEMENT FOR REDUCING THE TAX LIABILITY. ON APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) THE ASSESSEE SUBMITTED AS UNDER: ITA NO .825/AHD/2009 M/S.VEDPRAKASH GOVINDLAL NATHANI ASST.YEAR -1996-97 - 6 - ITA NO .825/AHD/2009 M/S.VEDPRAKASH GOVINDLAL NATHANI ASST.YEAR -1996-97 - 7 - ITA NO .825/AHD/2009 M/S.VEDPRAKASH GOVINDLAL NATHANI ASST.YEAR -1996-97 - 8 - ITA NO .825/AHD/2009 M/S.VEDPRAKASH GOVINDLAL NATHANI ASST.YEAR -1996-97 - 9 - ITA NO .825/AHD/2009 M/S.VEDPRAKASH GOVINDLAL NATHANI ASST.YEAR -1996-97 - 10 - ITA NO .825/AHD/2009 M/S.VEDPRAKASH GOVINDLAL NATHANI ASST.YEAR -1996-97 - 11 - ITA NO .825/AHD/2009 M/S.VEDPRAKASH GOVINDLAL NATHANI ASST.YEAR -1996-97 - 12 - ITA NO .825/AHD/2009 M/S.VEDPRAKASH GOVINDLAL NATHANI ASST.YEAR -1996-97 - 13 - 8. LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AFTER CONSIDERING THE MATERIALS AVAILABLE BEFORE HIM HELD AS UNDER: I HAS GONE THROUGH THE ARGUMENTS VEHEMENTLY MADE BY SHR I N.D. SHAH AND SHRI VED PRAKASH NAITHANI FOR ALLOWING TH E FURTHER COMMISSION TO M/S. SARVOTTAM INDUSTRIES BASED ON THE FACTS A ND LEGAL POSITION. AFTER GOING THROUGH THE TRANSACTIONS WHICH ARE RECONFIRMED BY THE APPELLATE AUTHORITIES IN THE PAST INDICATE THAT THE AP PELLANT HAS RECEIVED THE COMMISSION FROM M/S. SARVOTTAM INDUSTRIES REP RESENTED BY SHRI KOTHARI DUE TO WHICH M/S. AKASH INDIA LTD. OBTAINED C ONTRACT IN THE MONTH OF FEB. 1995 FROM THE DEPARTMENT OF TELECOMMUNICATI ON, ITA NO .825/AHD/2009 M/S.VEDPRAKASH GOVINDLAL NATHANI ASST.YEAR -1996-97 - 14 - GOVERNMENT INDIA. IMMEDIATELY, AFTER THAT THEY COULD NOT OBTAIN THE CONTRACT WHICH HAVE GONE TO OTHER TWO PARTIES IN THE MONT H OF APRIL & MAY, 1995 GIVING ENOUGH INDICATION THAT FOR OBTAINING THE CONTRACT, AN EFFECTIVE LIAISONING IS REQUIRED WHICH WAS REALLY CAR RIED OUT BY THE ASSESSEE WITH THE HELP OF M/S. SARVOTTAM INDUSTRIES LTD. TH EREFORE, OUT OF THE COMMISSION RECEIVED FROM M/S. AKASH INDIA LTD. OF RS.92 ,20,872/- AND IN TURN PAID THE COMMISSION TO M/S. SARVOTTAM INDUSTRI ES LTD. OF RS.84,80,017/- WAS CONVINCED WITH THE ARGUMENTS MADE BY T HE LEARNED AR AND ALSO BASED ON THE JUDICIAL DECISIONS AS DISCU SSED ABOVE. THEREFORE, I HAVE NO HESITATION IN DIRECTING THE LEARNED A SSESSING OFFICER TO ALLOW THE COMMISSION PAID TO M/S. SARVOTTAM INDU STRIES LTD. OF RS.84,80,017/- AFTER ACCEPTING THE COMMISSION RECEIVED BY THE ASSESSEE OF RS.92,90,872/-. 9. WE FIND THAT, IN THE INSTANT CASE, THE GENUINENESS OF THE PAYMENT OF RS. 84,80,017/- BY THE ASSESSEE TO M/S. SARVOTTAM INDUSTRIES LTD. IS NOT IN DOUBT. THE ASSESSEE RECEIVED COMMISSION OF RS. 92,90,872/- FROM M/S. AKASH INDIA LTD. FOR PROCESSING ORDERS OF OPTICAL FIBER CABLES FROM DEPARTMENT OF TELE COMMUNICATIONS AND EXPLAINED THAT M/S. SARVOTTAM INDUSTRIES LTD. ASSISTED THE ASSESSEE IN PROCURING THE SAID ORDER AND FOR THAT ASSISTANCE COMMISSION OF RS. 84,80,017/- WAS PAID TO THE SAID CONCERN. IT WAS ALSO EXPLAINED THAT M/S. SARVOTTAM INDUSTRIES LTD. WAS EXPERIENCED IN OPTICAL FIBER CABLES AND THEREFORE IT WAS DUE TO HIS EXPERTISE KNOWLEDGE AND GUIDANCE THE ORDER COULD BE PROCURED. FURTHER THE ASSESSEE FILED A COPY OF THE AGREEMENT WHICH WAS ENTERED INTO WITH M/S. SARVOTTAM INDUSTRIES LTD. ON 10/04/1995 BEFORE THE LEARNED ASSESSING OFFICER AND THE LEARNED ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL TO SHOW THAT THE SAID AGREEMENT WAS NOT BONA-FIDE. ITA NO .825/AHD/2009 M/S.VEDPRAKASH GOVINDLAL NATHANI ASST.YEAR -1996-97 - 15 - WE FIND THAT IT IS NOT THE CASE OF THE REVENUE THAT M/S. SARVOTTAM INDUSTRIES LTD. WAS IN ANY OTHER WAY RELATED TO THE ASSESSEE COMPANY AND THE PAYMENT WAS MADE TO THE SAID M/S. SARVOTTAM INDUSTRIES LTD. FOR ANY OTHER CONSIDERATION. IN THE ABOVE CIRCUMSTANCES, WE DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS), WHICH IS CONFIRMED AND THE GROUND OF THE APPEAL OF THE REVENUE IS DISMISSED. 10. GROUND NO.4 AND 5 OF THE APPEAL RELATES TO RESTRICTING THE DISALLOWANCE OF RS.3 LAC OUT OF TOTAL EXPENSES DEBITED IN THE LOSS AND PROFIT ACCOUNT TO RS.20,790/- 11. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE OFFICER OBSERVED FROM THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE THAT THE ASSESSEE HAS CLAIMED FOLLOWING EXPENSES. I) SALARY & BONUS 1,94,410/- II) CAR HIRE CHARGES PAID TO HIS WIFE 36,000/- III) VEHICLE & CONVEYANCE 77,862/- IV) TRAVELLING EXPENSES 1,30,052/- (RECEIVED FROM AKASH INDIA LTD. RS.90,052/- TO BE ADDED) 2,20,104/- 5,28,376/- 12. THE LEARNED ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS SUBMITTED DETAILS OF THESE EXPENSES BUT FROM THE DETAILS IT CANNOT BE PROVED THAT THEY ARE FOR THE LIAISON WORK. ACCORDINGLY EXPENSES OF RS.5,28,376/- CLAIMED BY THE ASSESSEE IS EXCESSIVE AND SUM OF RS.3 LAC ITA NO .825/AHD/2009 M/S.VEDPRAKASH GOVINDLAL NATHANI ASST.YEAR -1996-97 - 16 - IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE OUT OF THE EXPENSES CLAIMED. 13. IN APPEAL THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) RESTRICTED THE SAME TO RS.20,790/- BY OBSERVING AS UNDER:- IN CASE OF THE EXPENSES DISALLOWED ON LUMP-SUM BASIS, IT CAN BE SEEN THAT CARE HIRE CHARGES PAID TO HIS WIFE APPARENTLY APPE ARS TO BE NOT FOR BUSINESS PURPOSE. OUT OF VEHICLE AND CONVEYANCE EXPENS ES OF RS.77,862/- AND TRAVELLING EXPENSES OF RS.1,30,052/-, THERE CAN BE A SCOPE OF PERSONAL USE ELEMENT, BUT THERE IS NO SCOPE O UT OF RS.90,052/- PAID BY M/S. AKSH INDIA LTD. TO THE APPELLANT FOR TRAVELL ING PURPOSE. HOWEVER, AFTER CONSIDERING THE VEHICLE AND CONVEYANCE & TRAVELLING THROUGH IT CANNOT BE EXACTLY ESTIMATED WHAT IS THE PERSONA L USER ELEMENT, BUT ONE HAS TO BE RELY UPON THE ESTIMATION IN THIS CASE BECAUSE APPARENTLY THE VOUCHERS ARE MEANT FOR BUSINESS PURPOSE. THEREFORE, AVAILING THE SCOPE OF ESTIMATION IT IS ESTIMATE D THAT 10% BE DISALLOWED OUT OF RS.77,862/- RS.1,30,052/-, I.E. RS.20,7 90/-. FURTHER, SALARY AND BONUS ARE BEING PAID REGULARLY, THEREFORE, THERE IS NO SCOPE FOR ANY ADDITION IN THIS RESPECT. UNDER THE CIRCUMSTANCES, THE DISALLOWANCE ARE RESTRICTED TO RS.20,790/- AS AGAINST RS.3,00,0 00/-MADE BY THE A.O. INTEREST UNDER SECTION 234 B SHALL BE CHARGED AS PER THE PROVISIONS OF LAW. 14. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE LEARNED ASSESSING OFFICER. ITA NO .825/AHD/2009 M/S.VEDPRAKASH GOVINDLAL NATHANI ASST.YEAR -1996-97 - 17 - 15. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUPPORTED THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). 16. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE THE LEARNED ASSESSING OFFICER OBSERVED THAT THE EXPENSES CLAIMED UNDER THE HEADS SALARY & BONUS RS. 1,94,410/-, CAR HIRE CHARGES PAID TO HIS WIFE RS. 36,000/-, VEHICLE & CONVEYANCE RS. 77,862/-, TRAVELLING EXPENSES 1,30,052/- INCLUDING REIMBURSEMENT OF EXPENSES 90,052/- ON ACCOUNT OF TRAVELLING EXPENSES FROM M/S. AAKASH INDIA LTD. THE TRAVELLI NG EXPENSES CLAIMED BY THE ASSESSEE COMES TO RS. 5,28,326/-. ACCORDING TO THE LEARNED ASSESSING OFFICER FROM THE DETAILS OF THE EXPENSES FILED, IT CANNOT BE CONCLUDED THAT THE ENTIRE EXPENSES WAS FOR EARNING COMMISSION AND THEREFORE HE ESTIMATED RS. 3,00,000/- AS BEING INCURRED NOT FOR THE PURPOSE OF EARNING COMMISSION AND DISALLOWED THE SAME. ON APPEAL, LEARNED COMMISSIONER OF INCOME TAX(APPEALS) OBSERVED THAT SALARY AND BONUS WERE PAID REGULARLY AND THEREFORE THE SAME CANNOT HAVE ANY NON BUSINESS CONSIDERATION. IN RESPECT OF TRAVELLING EXPENSES OF RS. 90,052/- IT WAS REIMBURSEMENT BY M/S. AAKASH INDIA LTD. NON BUSINESS PURPOSE IS ITSELF RULED OUT. OF THE REMAINING AMOUNT OF RS.77,862/- FOR VEHICLE EXPENSES AND RS. 1,30,052/- FOR TRAVELLING EXPENSES, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AGREED THAT PERSONAL ELEMENT OF EXPENSES CANNOT BE RULED OUT. HE HOWEVER OPINED THAT THE EXPENSES BEING DEBITED IN THE BOOKS OF ACCOUNT ARE PRIMA-FACIE EVIDENCE OF EXPENDITURE INCURRED FOR BUSINESS PURPOSES. HE, HOWEVER, CONSIDERING THAT ELEMENT OF PERSONAL EXPENSES CANNOT BE RULED ITA NO .825/AHD/2009 M/S.VEDPRAKASH GOVINDLAL NATHANI ASST.YEAR -1996-97 - 18 - OUT ESTIMATED THE PERSONAL EXPENSE OF TRAVELLING AND VEHICLE EXPENSES @ 10% WHICH WORKED OUT TO RS. 20,790/- AND THEREFORE RESTRICTED THE DISALLOWANCE TO RS. 20,790/- IN PLACE OF RS. 3,00,000/-. WE FIND THAT THE GENUINENESS OF THE EXPENDITURE IS NOT IN DISPUTE. NO ERROR IN THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) COULD BE POINTED OUT BY THE LEARNED DEPARTMENTAL REPRESENTATIVE. THE LEARNED DEPARTMENTAL REPRESENTATIVE ALSO COULD NOT BRING ANY MATERIAL BEFORE US TO SHOW THAT THE ACTUAL PERSONAL EXPENSES OF MORE THAN RS. 20,790/- AS ESTIMATED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) WAS DEBITED IN THE BOOKS OF ACCOUNT. IN ABSENCE OF ANY SUCH MATERIAL, WE DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) WHICH IS CONFIRMED AND THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 17. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 18/09/2009. SD/- SD/- ( ( ( ( H.L. KARWA H.L. KARWA H.L. KARWA H.L. KARWA ) )) ) ( N.S. SAINI ) ( N.S. SAINI ) ( N.S. SAINI ) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUN TANT MEMBER JUDICIAL MEMBER ACCOUN TANT MEMBER JUDICIAL MEMBER ACCOUN TANT MEMBER JUDICIAL MEMBER ACCOUN TANT MEMBER AHMEDABAD; DATED 18/09/2009 ITA NO .825/AHD/2009 M/S.VEDPRAKASH GOVINDLAL NATHANI ASST.YEAR -1996-97 - 19 - COPY OF THE ORDER FORWARDED TO COPY OF THE ORDER FORWARDED TO COPY OF THE ORDER FORWARDED TO COPY OF THE ORDER FORWARDED TO : :: : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-IX, AHMEDABAD. 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD