The DCITPatan Circle, Patan V. M/s. Gayatri Construction Co., Mehsana

ITA 829/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80572 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 29-12-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 16-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AND ITA NO AHD DCIT VS M
• Keywords: Rejection of books of accounts; Income from undisclosed sources; Additional evidence

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD .., , BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER 1. ./ I.T.A. NO.829/AHD/2011 A.Y. 2004-05 2. ./ I.T.A. NO.878/AHD/2011 A.Y. 2004-05 1. THE DCIT PATAN CIRCLE PATAN 2. GAYATRI CONSTRUCTION CO., VISNAGAR / VS. 1.M/S.GAYATRI CONSTRUCTION CO., 5/A, SARDAR GANJ MARKET YARD, VISNAGAR 2. THE DCIT PATAN CIRCLE, PATAN ./ ./ PAN/GIR NO. AABFG 5422 D ( # / APPELLANTS ) .. ( $% # / RESPONDENTS ) REVENUE B Y : SHRI NIMESH YADAV, SR.DR ASSESSEE B Y : SHRI M.K. PATEL, A.R. &'() / DATE OF HEARING 29/12/2014 *+,-() / DATE OF PRONOUNCEMENT 31/12/2014 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THESE CROSS-APPEALS BY THE REVENUE AND THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)- GANDHINAGAR, (CIT(A) IN SHORT) DATED 31/12/2010 PERTAINING TO ASSESSMENT YEAR (AY) 2004-05. THESE APPEALS WERE TAKEN UP TOGETHER ITA NO.829/AHD/201 (BY REVENUE) AND ITA NO.878/AHD/2011 (BY ASSESSEE ) DCIT VS. M/S.GAYATRI CONSTRUCTION CO. ASST.YEAR 2004-05 - 2 - AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDE R FOR THE SAKE OF CONVENIENCE. 2. FIRST, WE TAKE UP THE REVENUES APPEAL IN IT A NO.829/AHD/2011 FOR AY 2004-05. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- (1) THE LEARNED CIT (APPEALS) HAS ERRED IN LAW AND ON F ACTS IN DELETING THE ADDITION OF 14,54,520/- MADE ON ACCOUNT OF ADDING THE CONTRACT RECEIPTS AS INCOME FROM UNDISCLOSED SOURCES. (2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.C IT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. (3) IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEARNE D CIT(APPEALS) MAY BE SET ASIDE AND THAT OF THE A.O. BE RESTORED T O THE ABOVE EXTENT. 2.1. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 19/12/2006, THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE ADDITIONS/DISALLOWANCES. THE AO MADE ADDITION AMOU NTING TO RS.14,54,520/- ON ACCOUNT OF DIFFERENCE IN TDS CERT IFICATES. THE AO MADE DISALLOWANCE OF THE LABOUR CHARGES OF RS.3,53, 770/- AS CLAIMED ON ACCOUNT OF REPAIRING OF VEHICLES AND ALSO MADE DISA LLOWANCE OF R.4,55,031/- CLAIMED AS EXPENDITURE ON REPAIR OF VE HICLES. FURTHER, THE AO MADE DISALLOWANCE OF RS.12,31,000/- BEING 10% OF THE EXPENDITURE CLAIMED ON CARTING CHARGES. AGAINST THIS, THE ASSE SSEE FILED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUB MISSIONS PARTLY ITA NO.829/AHD/201 (BY REVENUE) AND ITA NO.878/AHD/2011 (BY ASSESSEE ) DCIT VS. M/S.GAYATRI CONSTRUCTION CO. ASST.YEAR 2004-05 - 3 - ALLOWED THE APPEAL. WHILE ALLOWING THE APPEAL, THE LD.CIT(A) DELETED THE ADDITION OF RS.14,54,520/- ON ACCOUNT OF DIFFERENCE IN TDS CERTIFICATES. HOWEVER, THE LD.CIT(A) CONFIRMED THE REST OF THE AD DITIONS. NOW, BOTH THE REVENUE AND THE ASSESSEE ARE IN CROSS-APP EALS BEFORE US. 3. THE ONLY EFFECTIVE GROUND IN REVENUES APPEAL IS AGAINST THE DELETION OF ADDITION OF RS.14,54,520/-. THE LD.COU NSEL FOR THE ASSESSEE POINTED OUT THAT THE AO WAS NOT JUSTIFIED IN MAKING THE ADDITION. HE SUBMITTED THAT ALL THE DISCREPANCIES HAVE BEEN VERI FIED BY THE LD.CIT(A) AND THE LD.CIT(A) HAS RIGHTLY DELETED THE ADDITION. 3.1. ON THE CONTRARY, LD.SR.DR SUPPORTED THE ORDER OF THE AO. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS GIVEN FINDINGS ON FA CTS IN PARA-6.4 OF HIS ORDER, BY OBSERVING AS UNDER:- 6.4. I HAVE CONSIDERED THE EXPLANATIONS GIVEN UND ER FIVE DIFFERENT ACCOUNTS BY THE ASSESSEE AND THE COMMENTS OF THE AO . THE EXPLANATION OF THE ASSESSEE, THE FACTS AND MY OBSERVATIONS ON T HEM ARE AS UNDER: I) RS.1,52,571/- THE ASSESSEE HA STATED THAT IT IS ACTUALLY TESTI NG CHARGES PAID BY THE ASSESSEE TO THE DEPARTMENT ITSE LF FROM WHOM THE CONTRACTS WERE TAKEN. THE RECEIPTS SHOWN IN THE P& L ACCOUNT ARE NET AMOUNT. EVEN IF THE GROSS AMOUNT WAS TAKEN, THE TE STING CHARGES WOULD HAVE TO BE DEDUCTED AS EXPENSES. IT DOES NOT AFFECT THE INCOME OF THE ASSESSEE DISCLOSED. THE COPIES OF THE BILLS WE RE PRODUCED BEFORE THE AO, ALSO. ITA NO.829/AHD/201 (BY REVENUE) AND ITA NO.878/AHD/2011 (BY ASSESSEE ) DCIT VS. M/S.GAYATRI CONSTRUCTION CO. ASST.YEAR 2004-05 - 4 - THE AO HAS NOT COMMENTED ON IT AND THE CONTENTION O F THE ASSESSEE IS CORRECT. WHEN THE DEPARTMENT FROM THE GROSS PAYMEN TS MADE TO THE ASSESSEE HAS DEDUCTED THE TESTING CHARGES RECOVERAB LE FROM IT, AND THE ASSESSEE CREDITS THE NET AMOUNT IN THE P&L ACCOUNT, IT DOES NOT AFFECT THE NET INCOME DISCLOSED IN ANY WAY. THE DIFFERENC E OF RS.1,52,571/- IS TREATED AS EXPLAINED. II) RS.36,447/- IS ACTUALLY EXCESS AMOUNT SHOWN BY THE ASSESSEE I N THE BOOKS OF ACCOUNT AND P&L ACCOUNT. THIS DOES NOT RE QUIRE ANY EXPLANATION. THE AO HAS NOT COMMENTED AND THE EXPLANATION IS SEL F-EXPLANATORY. III) RS.2,39,576/- THE ASSESSEE CLAIMED THAT THE AUTHORITY ISSUING T DS CERTIFICATE NO.1944 HAS WRONGLY MENTIONED THE AMOUN T AS RS.16,50,000/- AND THE AUTHORITY IN ITS LETTER DATE D 9/12/2009 HAS ISSUED A CLARIFICATION THAT THE CURRENT AMOUNT PAID WAS RS .14,10,424/-. THUS, THE DIFFERENCE IS RECONCILED. THE AO HAS STATED THAT THE TDS CERTIFICATE ISSUING AUTHORITY HAS CLARIFIED THE MISTAKE. HOWEVER, ITS OBJECTION SEEM S TO BE THAT THE TDS CREDIT HAS BEEN GIVEN ON THE WRONG TDS CERTIFICATE ISSUED ORIGINALLY. CONSIDERING THE ABOVE, THE DIFFERENCE HAS BEEN RECO NCILED. HOWEVER, THE AO IS DIRECTED TO WITHDRAW ANY EXTRA TDS CREDIT GIVEN TO THE ASSESSEE AFTER GIVING AN OPPORTUNITY TO THE ASSESSE E OF BEING HEARD. IV) RS.8,73,055/- THE ASSESSEE CLAIMED THAT THE AUTHORITY ISSUING T DS CERTIFICATE HAS WRONGLY MENTIONED THE AMOUNT AS RS. 20,25,366/- AND THE AUTHORITY IN ITS LETTER DATED 9/12/2009 HAS ISSUED A CLARIFICATION THAT THE CURRENT AMOUNT PAID WAS RS.11,52,311/-. THUS, THE DIFFERENCE IS RECONCILED. THE AO IN HIS REMAND REPORT HAS ACCEPTED THAT THE D IFFERENCE IS EXPLAINED. V) RS.5,79,900/- AND RS.34,470/- THE ASSESSEE CLAIMED THAT THE WORK WAS ACTUALLY DONE IN APRIL, 2004. THE CONTRACT INC OME WAS SHOWN AND ITA NO.829/AHD/201 (BY REVENUE) AND ITA NO.878/AHD/2011 (BY ASSESSEE ) DCIT VS. M/S.GAYATRI CONSTRUCTION CO. ASST.YEAR 2004-05 - 5 - TDS DEDUCTED WAS CLAIMED BY THE ASSESSEE RIGHTLY IN FY 2004-05 I.E. FOR THE RETURN OF AY 2005-06. THE TDS WAS DEDUCTED BY THE AUTHORITY WRONGLY IN FY 2003-04 AND A CLARIFICATION LETTER HA S BEEN ISSUED BY THE AUTHORITY DATED 9/12/2009. IT ALSO CONTENDED THAT THE AO HIMSELF HAS GIVEN CREDIT FOR THE TDS IN THE NEXT YEAR. THE AO HAS ACCEPTED THE EXPLANATION REGARDING RS.5, 79,900/- AND NO COMMENTS HAVE BEEN MADE REGARDING THE EXPLANATION O N RS.34,470/-. ONCE THE AUTHORITIES ISSUE CERTIFICATES, HAVE CLARI FIED AS PER THE ASSESSEES CLAIM THAT THE WORK WAS ACTUALLY DONE AN D PAYMENT MADE IN NEXT YEAR ONLY, NO ADDITION IS CALLED FOR IN THE AS SESSMENT YEAR IN APPEAL. THE ASSESSEE ITSELF HAS DECLARED THE INCOM E IN ASSESSMENT YEAR 2005-06. IN NUTSHELL, THE ADDITION MADE ON ACCOUNT OF DIFFER ENCE HAS BEEN EXPLAINED AND IS DELETED, SUBJECT TO THE DIRECTIONS ON WITHDRAWAL OF EXCESS TDS CREDIT, IF ANY; MADE IN PARA.6.4. (III), ABOVE. 4.1. THE ABOVE FINDINGS OF LD.CIT(A) HAS NOT BEEN C ONTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD, THEREFORE WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF T HE LD.CIT(A), SAME ARE HEREBY UPHELD. THUS, THE GROUND RAISED BY THE REVE NUE IS REJECTED. 5. AS A RESULT, REVENUES APPEAL IN ITA NO.829/AHD/ 2011 FOR AY 2004-05 IS DISMISSED. 6. NOW , WE TAKE UP THE ASSESSEES APPEAL IN ITA NO.878/AH D/2011 FOR AY 2004-05. THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS OF APPEAL:- (1) THAT ON FACTS AND IN LAW, THE LEARNED COMMISSI ONER OF INCOME-TAX (APPELAS0 HAS GRIEVOUSLY ERRED IN CONFIRMING THE AD DITION OF RS.3,53,770/- ON ACCOUNT OF LABOUR CHARGES FOR REPA IRING OF VEHICLES. ITA NO.829/AHD/201 (BY REVENUE) AND ITA NO.878/AHD/2011 (BY ASSESSEE ) DCIT VS. M/S.GAYATRI CONSTRUCTION CO. ASST.YEAR 2004-05 - 6 - (2) THAT ON FACTS AND IN LAW THE LEARNED COMMISSIO NER OF INCOME-TAX (APPEALS) HAS GRIEVOUSLY ERRED IN CONFIRMING THE AD DITION OF RS.3,53,031/- ON ACCOUNT OF LABOUR CHARGES FOR REPA IRING OF VEHICLES, WITHOUT GIVING ADEQUATE OPPORTUNITY OF CROSS-EXAMIN ATION, ETC. TO THE APPELLANT. (3) THAT ON FACTS AND IN LAW, THE LEARNED CIT(A) H AS GRIEVOUSLY ERRED IN REJECTING THE ADDITIONAL EVIDENCE SOUGHT T O BE FILED U/R 46A OF THE I.T. RULES. (4) THAT ON FACTS AND IN LAW, THE LEARNED COMMISSIO NER OF INCOME TAX (APPEALS) HAS GRIEVOUSLY ERRED IN CONFIRMING THE AD DITION OF RS.12,31,000/- MADE ON ESTIMATED BASIS @ 10% OF TOT AL EXPENSES FOR CARTING, WITHOUT ANY COGENT EVIDENCE ON RECORD. (5) THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND ANY GROUND OF APPEAL. 6.1. FIRST GROUND IS AGAINST IN CONFIRMING THE ADDI TION RS.3,53,770/- ON ACCOUNT OF LABOUR CHARGES FOR REPAIRING OF VEHICLES BY THE LD.CIT(A). THE LD.COUNSEL FOR THE ASSESSEE SHRI M.K. PATEL VEHEMEN TLY ARGUED THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN MAKING THE DISALLOWANCE. HE SUBMITTED THAT THE EXPENDITURE HAS BEEN INCURRED FO R THE REPAIRS OF THE VEHICLES. THE ASSESSEE HAS ALSO PRODUCED THE PERSO N TO WHOM THE PAYMENT WAS MADE AND FROM WHOM THE REPAIRS WAS CARR IED OUT. HE SUBMITTED THAT THE VOUCHERS HAD BEEN PLACED ON REC ORD. HE SUBMITTED THAT UNDER THESE FACTS, THE LD.CIT(A) OUGHT NOT TO HAVE CONFIRMED THE ADDITIONS. 6.2. ON THE CONTRARY, LD.SR.DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THERE IS A CATEGORICAL FIN DING BY THE AUTHORITIES BELOW THAT THE ASSESSEE COULD NOT SUBSTANTIATE ITS CLAIM AND THE PERSON ITA NO.829/AHD/201 (BY REVENUE) AND ITA NO.878/AHD/2011 (BY ASSESSEE ) DCIT VS. M/S.GAYATRI CONSTRUCTION CO. ASST.YEAR 2004-05 - 7 - WHO WAS PRODUCED WAS BOGUS AND EVEN THE PERSON WAS NOT KNOWING SUCH KIND OF REPAIRING-WORK HAS BEEN CARRIED OUT BY THE ASSESSEE. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE AUTHORITIES BELOW HAVE GIVEN A FIN DING ON FACT WHICH IS NOT CONTROVERTED BY THE ASSESSEE BY PLACING ANY CON TRARY MATERIAL ON RECORD. MOREOVER, THE ASSESSEE HAS NOT PLACED ANY EVIDENCE ON RECORD PROVING THE NATURE OF REPAIRS ON VEHICLES CARRIED O UT BY THE ASSESSEE AND EVEN NO DESCRIPTION OF THE VEHICLES IS GIVEN. HENC E, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) , SAME IS UPHELD. THUS, THIS GROUND OF ASSESSEES APPEAL IS REJECTED. 8. SECOND GROUND IS AGAINST IN CONFIRMING THE ADDIT ION OF RS.3,53,031/- ON ACCOUNT OF LABOUR CHARGES FOR REPA IRING OF VEHICLES BY THE LD.CIT(A). THE LD.COUNSEL FOR THE ASSESSEE SUB MITTED THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN MAKING THE DISALLOWANCE. HE SUBMITTED THAT THE VOUCHERS WERE PRODUCED, THE BOOK S OF ACCOUNTS WERE AUDITED AND THE EXPENSES WERE VERIFIED BY THE PARTN ERS. HE ALSO SUBMITTED THAT THE RATE OF LABOUR CHARGES WERE GO D OWN AND THE EXPENSES WERE ALSO REDUCED. 8.1. ON THE CONTRARY, LD.SR.DR SUPPORTED THE ORDER OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE COULD NOT FUR NISH ANY EVIDENCE IN ITA NO.829/AHD/201 (BY REVENUE) AND ITA NO.878/AHD/2011 (BY ASSESSEE ) DCIT VS. M/S.GAYATRI CONSTRUCTION CO. ASST.YEAR 2004-05 - 8 - SUPPORT OF ITS CLAIM. HE SUBMITTED THAT THE EARLIE R YEAR ALSO, I.E. IN AY 2003-04, SIMILAR DISALLOWANCES WERE MADE. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. WE FIND THAT BOTH THE AUTHORITIES BELOW HAVE GIVEN A FINDIN G ON FACT THAT THE EVIDENCES AS PRODUCED BY THE ASSESSEE WERE NOT INSP IRING CONFIDENCE AND WERE FOUND TO BE INGENUINE. THIS FINDING OF THE AUTHORITIES BELOW IS NOT CONTROVERTED BY THE ASSESSEE BY PLACING ANY MATERIA L ON RECORD. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE W ITH THE FINDING OF THE AUTHORITIES BELOW, SAME IS HEREBY UPHELD. THUS, TH IS GROUND OF ASSESSEES APPEAL IS ALSO REJECTED. 10. GROUND NOS.3 & 4 ARE INTER-CONNECTED WHICH RELA TE TO THE REJECTION OF FILING OF ADDITIONAL EVIDENCE AND CONFIRMATION O F THE DISALLOWANCE OF CARTING CHARGES ON ESTIMATED BASIS. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD.CIT(A) IN ARBITRARY MANNER DI D NOT ALLOW THE ASSESSEE TO PLACE ON RECORD THE ADDITIONAL EVIDENCE S. HE SUBMITTED THAT THE AO HAD MADE DISALLOWANCE OF CARTING CHARGES ON THE BASIS THAT THE ASSESSEE COULD NOT FURNISH THE DETAILED ADDRESSES, PANS, CONFIRMATIONS, BILLS/VOUCHERS, ETC. HE SUBMITTED THAT THE LD.CIT( A) HAS NOT TAKEN INTO ACCOUNT THE REMAND REPORT, WHEREIN THE AO HAS VERIF IED THE EXPENDITURE. HE DREW OUR ATTENTION TOWARDS THE PAGE NOS.103 & 10 4. HE SUBMITTED THAT OUT OF CARTING CHARGES OF RS.1,23,35,232/-, R S.34,44,203/- & ITA NO.829/AHD/201 (BY REVENUE) AND ITA NO.878/AHD/2011 (BY ASSESSEE ) DCIT VS. M/S.GAYATRI CONSTRUCTION CO. ASST.YEAR 2004-05 - 9 - RS.48,036/- WERE WRONGLY DEBITED. HOWEVER, THE CAR TING CHARGES WERE ONLY RS.84,03,989/- WHICH HAS BEEN DULY VERIFIED BY THE AO. 10.1. ON THE CONTRARY, LD.SR.DR SUPPORTED THE ORDER S OF THE AUTHORITIES BELOW. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE AO HAD MADE DISALLOWANCE BY OBSERV ING AS UNDER:- 7. DURING THE YEAR UNDER CONSIDERATION, THE ASSES SEE CLAIMED GROSS CARTING CHARGES OF RS.1,23,15,787/- SOME OF THEM WE RE PAID ON ACCOUNT BY BILLS AND THE REMAINING AMOUNT WERE PAID IN CASH . THE DETAILS OF SUCH EXPENDITURE ARE FURNISHED IN ANNEXURE-A WHICH IS MADE PART OF THIS ORDER. VIDE ORDER SHEET ENTRY DATED 15/9/2006 , THE ASSESSEE WAS ASKED TO FURNISH DETAILED ADDRESSES, PERMANENT ACCO UNT NUMBERS, CONFIRMATIONS ETC. IN RESPECT OF BILLS EXCEEDING RS .2 LAKHS. THE ASSESSEE WAS ALSO ASKED TO FILE DETAILED ADDRESSES OF REMAIN ING PARTIES WITH A REQUEST TO PRODUCE BILLS, VOUCHERS, ETC. ON THE NEX T HEARING, I.E. 5/10/2005. THE ASSESSEE, HOWEVER, FAILED TO ATTEND THE HEARING FIXED ON 5/10/2006. NEXT HEARING WAS FIXED ON 7/11/2006 ON WHICH DATE PARTNER SHRI RAMJIBHAI ATTENDED BUT NO BOOKS OF ACCOUNTS AN D OTHER DOCUMENTS WERE PRODUCED. THEREFORE, HEARING ON 7/11/2006 COU LD NOT ACTUALLY TOOK PLACE AND ACCORDINGLY ONE MORE ADJOURNMENT WAS GRANTED TO THE ASSESSEE FOR 14/11/2006 WITH A SPECIFIC WARNING THA T MORE THAN SUFFICIENT TIME HAS BEEN ALLOWED AND NO FURTHER ADJ OURNMENT WILL BE GRANTED. IT WAS ALSO SPECIFICALLY ASKED TO PRODUCE ALL THE BOOKS OF ACCOUNTS, REGISTERS, BILLS, VOUCHERS, BANK STATEMEN TS ETC. ON 14/11/2006. THE PARTNER PRESENT WAS ASKED TO FILE ANY MATERIAL ON WHICH HE WANTS TO RELY IN SUPPORT OF HIS RETURN. IT IS, HOWEVER, OBS ERVED BY THE UNDERSIGNED THAT THE ASSESSEE HAS NOT CARED TO ATTE ND THE HEARING ON 14/11/2006. SINCE THE ASSESSEE FAILED TO FURNISH D ETAILED ADDRESSES, CONFIRMATIONS ETC. THE GENUINENESS THEREOF COULD NO T BE VERIFIED. FURTHER THE ASSESSEE ALSO FAILED TO PRODUCE VOUCHER S IN RESPECT OF ITA NO.829/AHD/201 (BY REVENUE) AND ITA NO.878/AHD/2011 (BY ASSESSEE ) DCIT VS. M/S.GAYATRI CONSTRUCTION CO. ASST.YEAR 2004-05 - 10 - PAYMENTS MADE IN AMOUNTS BELOW RS.20,000/- IN SUPPO RT OF CARTING EXPENSES PAID. THERE IS, THEREFORE, EVERY POSSIBIL ITY THAT A PORTION OF EXPENSES MIGHT BE NOT GENUINE SINCE THE ASSESSEE HA S NOT FILED DETAILED ADDRESSES, CONFIRMATIONS, VOUCHERS, BILLS, ETC. IN RESPECT OF THE SAME AND THE CARTING CHARGES REMAINED UNVERIFIED. THEREFORE , OUT OF CARTING EXPENSES, A SUM OF RS.12,31,000/- ARE DISALLOWED ON ESTIMATE BASIS WHICH ARE NEARLY 10% OF THE TOTAL EXPENDITURE ON CA RTING. 11.1. DURING THE COURSE OF APPELLATE PROCEEDINGS, T HE LD.CIT(A) HAS SOUGHT FOR THE REMAND REPORT. IN THE REMAND REPORT , THE AO HAS OBSERVED AS UNDER:- 4) CARTING CHARGES OF RS.12,31,000/- BREAK-UP OF THE CARTING CHARGES SUBMITTED BY THE AS SESSEE, IT IS FOUND THAT TOTAL DEBIT SIDE OF THE CARTING EXPENSES IS RS .1,23,35,232/-. IT IS FOUND THAT OUT OF THAT MATERIAL WRONGLY DEBITED TO CARTING IS (RS.34,44,203 + RS.48,036/-). THE AMOUNT AS PER PR OFIT AND LOSS ACCOUNT, THE CARTING IS RS.84,03,989/- BUT NOT RS.1 ,23,35,232/-. THE BREAK UP GIVEN AS PER PAGE 8 OF PAPER BOOK IS FOUND CORRECT AS PER AUDIT REPORT. OUT OF CARTING CHARGE RS.84,03,989/- ASSES SEE HAS PAID BY CHEQUE OF RS.25,83,518/- AND REMAINING AMOUNT OF RS .58,65,471/- HAS BEEN PAID BY CASH BY VOUCHERS. VOUCHERS HAVE BEEN VERIFIED AS PER BOOKS. THE SAME MAY BE CONSIDERED. 11.2. HOWEVER, THE LD.CIT(A) HAS NOT CONSIDERED THE REMAND REPORT STATING THAT QUA THE CARTING EXPENSES OF RS.1,23,3 5,232/-, THE AMOUNT TOWARDS CARTING CHARGES WAS ONLY RS.84,03,989/- OUT OF WHICH, A SUM OF RS.25,38,518/- WAS PAID BY THE ASSESSEE THROUGH C HEQUE AND REMAINING AMOUNT OF RS.58,65,471/- WAS PAID BY CASH THROUGH V OUCHERS WHICH WERE VERIFIED BY THE AO AS PER BOOKS OF ACCOUNTS. HENCE , WE ARE OF THE CONSIDERED VIEW THAT THE LD.CIT(A) WAS NOT JUSTIFIE D IN SUSTAINING THE ADDITION WHEN THE AO HIMSELF HAS POINTED OUT THAT T HERE WAS WRONG ENTRY ITA NO.829/AHD/201 (BY REVENUE) AND ITA NO.878/AHD/2011 (BY ASSESSEE ) DCIT VS. M/S.GAYATRI CONSTRUCTION CO. ASST.YEAR 2004-05 - 11 - OF SOME OF THE AMOUNT PAID BY CHEQUE AND AMOUNT PAI D BY CASH THROUGH VOUCHERS WERE VERIFIED AS PER THE BOOKS OF ACCOUNTS . MOREOVER, THE LD.CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT TH E AO HAS NOT REJECTED THE BOOKS OF ACCOUNTS BY INVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT. THEREFORE, WE HEREBY DIRECT THE AO TO DELETE THE ADDITION MADE ON ACCOUNT OF CARTING EXPENSES. THUS, THIS GROUND OF ASSESSEES APPEAL IS ALLOWED. 12. IN THE RESULT, REVENUES APPEAL IS DISMISSED, W HEREAS ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON WEDNESDAY, THE 31 ST DAY OF DECEMBER, 2014 AT AHMEDABAD. SD/- SD/- ( .. ) ( ) ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 31/ 12/2014 1)..,&.../ T.C. NAIR, SR. PS !'#$%$&' / COPY OF THE ORDER FORWARDED TO : 1. # / THE APPELLANT 2. $% # / THE RESPONDENT. 3. 234 5 / CONCERNED CIT 4. 5 ( ) / THE CIT(A)-GANDHINAGAR 5. 6&7$34 , )34- , 2 / DR, ITAT, AHMEDABAD 6. 79:;' / GUARD FILE. / BY ORDER, %6$ //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD