RESONANCE EDUVENTURES PVT. LTD., Kota V. ACIT, Kota

ITA 838/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2077 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 26-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BHATEJA
• Assessee Lawyers: F REHMAN
• Keywords: Gift; Business expenditure; Opportunity of being heard; Tax effect
• Section: 143(3); 244A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR DIVISION BENCHES, JAIPUR BEFORE: SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI VIKRAM SINGH YADAV,ACCOUNTANT MEMBER ITA NO. 838/JP/2016 ASSESSMENT YEAR : 2012-13 ASSESSEE BY : SHRI MAHENDRA GARGIEYA & SHRI F.REHMAN REVENUE BY : SHRI O.P. BHATEJA, ADDL.CIT DATE OF HEARING : 23.03.2017 DATE OF PRONOUNCEMENT: 29. 05.2017 ORDER PER: DIVA SINGH. J.M. THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSAILING THE CORRECTNESS OF THE ORDER DATED 26.07.2016 OF CIT(A) , KOTA PERTAINING TO 2012-13 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS : 1. THE IMPUGNED ORDER U/S 143(3) DATED 27.03.2015 IS B AD IN LAW AND ON FACTS OF THE CASE, FOR WANT OF JURISDICTION AND VARIOUS OTHER RE ASONS AND HENCE, THE SAME KINDLY BE QUASHED. 2. RS.11,54,105/-: THE ID. CIT(A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN PARTLY CONFIRMING THE DISALLOWANCES UP TO RS.11, 54,105/- ON ACCOUNT OF FOLLOWING EXPENSES. S.NO. HEAD OF EXPENSES DISALLOWED BY THEAO SUSTAINED BY THE CIT(A) 2.1 TRAVELING & CONVEYANCE EXP. RS.3,00,000/- RS. 1, 50,000/- 2.2 STAFF WELFARE EXP. RS. 3, 00,000/- RS. 1, 50,000/- 2.3 OFFICE EXP. RS.7,14,576/- RS. 5, 00, 000/- 2.4 VEHICLE RUNNING & MAINTENANCE EXP. RS. 2,45,931/- 2.5 BUSINESS DEVELOPMENT EXP. RS.5,00,000/- 2.4 FUNCTION EXP. RS.7, 08,210/- RS.3,54,105/- TOTAL RS.11,54,105/- THE DISALLOWANCES SO MADE AND PARTLY CONFIRMED BY T HE ID. CIT(A) BEING TOTALLY CONTRARY TO THE PROVISIONS OF LAW AND FACTS OF THE CASE, KIN DLY BE DELETED IN FULL. 3. THE ID. AO FURTHER ERRED IN LAW AS WELL AS ON TH E FACTS, OF THE CASE IN CHARGING INTEREST U/S 234A, 234B, 234C & 234D OF THE ACT AND AS ALSO IN WITHDRAWING INTEREST U/S 244A OF THE ACT. THE APPELLANT TOTALLY DENIES ITS L IABILITY OF CHARGING AND WITHDRAWAL OF ANY SUCH INTEREST. THE INTEREST SO CHARGED/WITHDRAW N, BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, KINDLY BE DELETED IN FULL. M/S RESONANCE EDUVENTURES PVT. LTD., J-2, MAIN ROAD, JAWAHAR NAGAR , KOTA. JAIPUR. VS. THE ACIT, CIRCLE-1, KOTA. PAN/GIR NO. AADCR5581M APPELLANT RESPONDENT 2 2. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSE SSEE'S RETURN IN THE YEAR UNDER CONSIDERATION WAS PICKED UP FOR SCRUTINY WHEREIN THE AO QUA THE ISSUES RAISED IN THE APPEAL FILED, MADE THE FOLLOW ING OBSERVATIONS WHILE MAKING THE RESPECTIVE DISALLOWANCES HOLDING AS UNDER : 2.1 DISALLOWANCE OUT OF TRAVELING & CONVEYANCE EXPENSES : ON PERUSAL OF PROFIT AND LOSS ACCOUNT OF THE ASSES SEE IT HAS BEEN SEEN THAT THE ASSESSEE COMPANY HAS CLAIMED A SUM OF RS. 1,20,87,7 68/- ON ACCOUNT TRAVELLING EXPENSES. ON PERUSAL OF THE DETAILS FILED BY THE CO MPANY ASSESSEE, IT IS OBSERVED THAT SAID EXPENSES HAVE BEEN INCURRED IN CASH ON SELF MA DE VOUCHERS. IN THE ABSENCE OF PROPER BILLS/VOUCHERS, THE EXPENDITURE C LAIMED IS NOT SUBJECT TO VERIFICATION. HENCE, IN VIEW OF THE ABOVE TO COVER ANY POSSIBLE LEAKAGE OF REVENUE, A LUMP SUM AMOUNT OF RS. 3,00,000/- IS DISALLOWED A ND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. (DISALLOWANCE OF RS. 3,00,000/-) 2.2 DISALLOWANCE OUT OF STAFF WELFARE EXPENSES THE ASSESSEE COMPANY DEBITED ITS PROFIT AND LOSS AC COUNT BY RS. 77,50,758/- ON ACCOUNT OF STAFF WELFARE EXPENSES. ON PERUSAL OF TH E DETAILS FILED BY THE COMPANY ASSESSEE, IT IS NOTICE THAT SAID EXPENSES HAVE BEEN INCURRED IN CASH ON SELF MADE VOUCHERS. IN THE ABSENCE OF PROPER BILLS/VOUCH ERS, THE EXPENDITURE CLAIMED IS NOT SUBJECT TO VERIFICATION. HENCE, IN V IEW OF THE ABOVE TO COVER ANY POSSIBLE LEAKAGE OF REVENUE, A LUMP SUM AMOUNT OF R S. 3,00,000/- IS DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE . (DISALLOWANCE OF RS. 3,00,000/ -) 2.3 DISALLOWANCE OUT OF OFFICE EXPENSES THE ASSESSEE COMPANY DEBITED ITS PROFIT AND LOSS AC COUNT BY RS. 71,45,763/-- ON ACCOUNT OF OFFICE EXPENSES. ON PERUSAL OF THE DETAI LS FILED BY THE COMPANY ASSESSEE, IT IS NOTICE THAT SAID EXPENSES HAVE BEEN INCURRED IN CASH ON SELF MADE VOUCHERS. IN THE ABSENCE OF PROPER BILLS/VOUCHERS, THE EXPEND ITURE CLAIMED IS NOT SUBJECT TO VERIFICATION AS THESE EXPENSES CANNOT BE HELD TO HA VE BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE BUSINESS EXPEDIENCY. HENCE; IN VIEW OF THE ABOVE TO COVER ANY POSSIBLE LEAKAGE OF REVENUE, HENCE, 10% OF TOTAL AM OUNT I.E. RS. 7,14,576/- IS DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASS ESSEE. (DISALLOWANCE OF RS. 7.14.576/- ) 2.4 DISALLOWANCE OUT OF VEHICLE RUNNING AND MAINTEN ANCE EXPENSES THE ASSESSEE COMPANY DEBITED ITS PROFIT AND LOSS AC COUNT BY RS. 24,59,313/- UNDER THE HEAD 'VEHICLE RUNNING AND MAINTENANCE EXP ENSES'. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED T O PRODUCE LOG BOOK FOR MAINTAINING FOR RUNNING VEHICLES BUT IT HAS BEEN SU BMITTED BY THE ASSESSEE COMPANY THAT NO LOG BOOK/REGISTER ARE BEING MAINTAI NED OF RUNNING VEHICLE AND MAINTENANCE. IT WAS ALSO OBSERVED THAT SOME OF THE MAINTENANCE EXPENSES INCURRED IN CASH ARE INTERNAL SUPPORTED D VOUCHERS ONLY. IN THE ABSENCE OF AVAILABILITY OF LOG BOOK THE VEHICLE RUNNING AND MA INTENANCE USED BY THE ASSESSEE COMPANY AND THEIR MEMBERS CANNOT BE DENIED FOR PERSONAL AND NON BUSINESS PURPOSES CANNOT BE RULED OUT ALSO. HENCE, A SUM @10% OF RS. 24,59,313/- I.E. RS. 2,45,931/-IS DISALLOWED AND ADDED TO THE I NCOME OF THE ASSESSEE. (DISALLOWAN CE OF RS. RS. 2.45.931/-) 2.5 DISALLOWANCE OUT OF BUSINESS DEVELOPMENT EXPENS ES THE ASSESSEE DEBITED A SUM OF RS.. 1,32,68,347/- IN ITS PROFIT AND LOSS ACCOUNT UNDER THE HEAD 'BUSINESS DEVELOPMENT EXPENSES'. THE DETAILS FURNISHED REVEALS THAT MOSTLY OF THESE EXPENSES ARE INCURRED IN CASH AND ARE SUPPORTED WITH THE SELF MADE VOUCHERS ONLY. IN THE ABSENCE OF THE PROPER BILLS, THESE EXPENSES CANNOT BE SAID TO HAVE BEEN INCURRED WHOLL Y AND EXCLUSIVELY FOR THE PURPOSES OF THE BUSINESS. HENCE, IN VIEW OF THE ABO VE TO COVER ANY POSSIBLE LEAKAGE OF REVENUE, A LUMP SUM AMOUNT OF RS. 5,00,0 00/- IS DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE (DISALLOWANCE OF RS. 5,00,000) 3 2.6 DISALLOWANCE OUT OF FUNCTION EXPENSE THE ASSESSEE DEBITED A SUM OF RS. 70,82,101/- IN IT S PROFIT AND LOSS ACCOUNT UNDER THE HEAD 'FUNCTION EXPENSES'. THE DETAILS FUR NISHED REVEALS THAT MOSTLY OF THESE EXPENSES ARE INCURRED IN CASH AND ARE SUPPORTED WIT H THE SELF MADE VOUCHERS ONLY. IN THE ABSENCE OF THE PROPER BILLS; THESE EXPENSES CAN NOT BE SAID TO HAVE BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF THE BUSI NESS. HENCE, A SUM @10% OF 70,82,101/- I.E. RS. 7,08,210/- IS DISALLOWED AND A DDED TO THE INCOME OF THE ASSESSEE. (DISALLOWANCE OF RS. 7,08,210/-) 3. THE ASSESSEE CARRIED THE ISSUE IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. QUA EACH OF THE DISALLOWANCE MADE, THE A SSESSEE HAS REPEATEDLY ARGUED THAT THE AO HAS NOT QUOTED ANY INSTANCE WHERE EXPENSE IS DO UBTED FOR ANY OTHER REASON EXCEPT CASH PAYMENT ON SELF MA DE VOUCHERS. IT HAS BEEN ALSO SUBMITTED THAT THE EXPENSES WERE FOR THE BUSINESS NEEDS OF THE ASSESSEE AND IN REGULAR COURSE OF BUSINESS. CONSIDE RING THE SUBMISSIONS, THE CIT(A) TAKING NOTE OF THE FACT THAT THE ISSUE HAD BEEN CONS IDERED BY HIM IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR I.E. 2 011-12 IN APPEAL NO. 56/14-15 DATED 16.06.2015 WHEREIN PART DISALLOWANCE WAS SUSTAINED GRANTED PART RELIEF. THE SAID ORDER IS ASSAILED BY T HE ASSESSEE. IT IS SEEN THAT THE DISALLOWANCE UNDER THE HEAD TRAVELING AND CONVEYANCE EXPENSES AND STAFF WELFARE EXPENSES, EXPENSES WAS SUSTAINED IN PART HOLDING AS UNDER : I HAVE GONE THROUGH ASSESSEE'S SUBMISSION AND AO'S FINDINGS. MY PREDECESSOR HAD DEALT WITH THE ABOVE TWO ISSUES AS WELL WHILE DECIDING THE ASSESSEE'S APPEAL FOR ASSESSMENT YEAR 2011-12 VIDE APPEAL NO,56/ 14-15 (DATE OF ORDER; 16/06/2015), WHEREBY ON THESE ISSUES DECIDED TOGETHER HE HAD HELD AS UNDER- CONSIDERING THE NON VERIFIABLE NATURE OF EXPENSES, SOME DISALLOWANCE WAS JUSTIFIED, IN MY OPINION, A DISALLOWANCE OF RS. 1, 50, OOO/- UNDER E ACH HEAD WOULD MEET THE END OF JUSTICE. DISALLOWANCE OF RS. 3,00,000/-(RS. 1,50,000 + RS. 1 ,50,000) IS CONFIRMED. THE AO IS DIRECTED TO DELETE BALANCE ADDITION OF RS. 3,00,000 /- (RS. 1,50,000 + RS. 1,50,000). THIS GROUND OF APPEAL IS PARTLY ALLOWED. RESPECTFULLY FOLLOWING THE SAME LINE OF DECISION SI NCE THE FACTS ARE SIMILAR IN THIS YEAR AS WELL, I CONFIRM THE DISALLOWANCE MADE BY TH E A.O TO THE EXTENT OF RS. 1,50, 000/- UNDER EACH OF THE ABOVE TWO HEADS OF EX PENSES NAMELY, TRAVELING AND STAFF WELFARE (TOTAL DISALLOWANCE CONFIRMED IS RS. 3,00,000/-). THE BALANCE DISALLOWANCE OF RS. 1, 50,000/- UNDER E ACH HEAD (TOTAL RS. 3, 00,000/-) IS DIRECTED TO BE DELETED. THIS PART OF GROUND OF APPEAL NO 4 [(I) & (II)] IS PARTLY ALLOWED. 3.1 SIMILARLY, THE DISALLOWANCE MADE OF THE EXPENSES CLAIMED UNDER THE HEAD OFFICE EXPENSES HOLDING AS UNDER : I HAVE GONE THROUGH ASSESSEE'S SUBMISSION AND AO'S FINDINGS. MY PREDECESSOR HAD DEALT WITH THE ABOVE THREE ISSU ES AT GROUND 4 (III), (IV) &(V) AS WELL WHILE DECIDING THE ASSESSEE'S APPEAL FOR ASSE SSMENT YEAR 2011-12 VIDE APPEAL NO.56/14-15 (DATE OF ORDER: 16/06/2015), WHEREBY ON THIS ISSUE HE HAD HELD AS UNDER :- I HAVE GONE THROUGH ASSESSEE'S SUBMISSION AND AO'S FINDINGS. CONSIDERING THE NON VERIFIABLE NATURE, SOME DISALLO WANCE WAS JUSTIFIED. CONSIDERING THE FACTS OF THE CASE, A DISALLOWANCE OF RS. 4,00,000/- IS CONSIDERED REASONABLE AND 4 CONFIRMED. THE AO IS DIRECTED TO DELETE BALANCE ADD ITION OF RS. 6,04,906/-. THIS GROUND OF APPEAL IS PARTLY ALLOWED. RESPECTFULLY FOLLOWING THE SAME LINE OF DECISION SI NCE THE FACTS ARE SIMILAR IN THIS YEAR AS WELL AND ESPECIALLY SINCE THE SUPPORTING DO CUMENTS WERE NOT SATISFACTORY AS BROUGHT OUT BY THE A.O. SOME DISALLOWANCE IS CONSID ERED REASONABLE UNDER EACH OF THE ABOVE HEADS CLUBBED TOGETHER. CONSIDERING THE F ACTS OF THE CASE, A DISALLOWANCE OF RS. 5,00,000/- IS CONSIDERED REASONABLE AND CONFIRM ED IN TOTAL UNDER THE ABOVE THREE HEADS OF EXPENSE. THE A.O IS DIRECTED TO DELETE BAL ANCE ADDITION OF RS.9,60,507/- THIS PART OF GROUND OF APPEAL NO. 4[(III),(IV)&(IV) ] IS PARTLY ALLOWED. 3.2. THE REMAINING AMOUNT OF DISALLOWANCE ON ACCOUNT OF FUNCTION EXPENSES WERE SUSTAINED IN PART ON ACCOUNT OF THE FOL LOWING REASONING : DISALLOWANCE OUT OF FUNCTION EXPENSE THE ASSESSES DEBITED A SUM OF RS. 70,82,101/- IN IT S PROFIT AND LOSS ACCOUNT UNDER THE HEAD FUNCTION EXPENSES. THE DETAILS FURNISHED REVEALS THAT MOSTLY OF THESE EXPENSES ARE INCURRED IN CASH AND ARE SUPPORTED WITH THE SELF MA DE VOUCHERS ONLY. IN THE ABSENCE OF THE PROPER BILLS; THESE EXPENSES CANNOT BE SAID TO HAVE BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF THE BUSINESS. HENCE , A SUM @10% OF 7082101/-IE. RS. 708210/- IS DISALLOWED ARID ADDED TO THE INCOME OF THE ASSESSEE. I HAVE GONE THROUGH ASSESSEE'S SUBMISSION AND AO'S FINDINGS. CONSIDERING THE FACTS OF THE CASE, SINCE THERE IS A POSSIBILITY OF NON BUSINESS USE IN THESE EXPENSES, ESPECIALLY SINCE THE SUPPORTING DOC UMENTS WERE NOT SATISFACTORY AS BROUGHT OUT BY THE A.O. SOME DISALLOWANCE IS CONSID ERED REASONABLE. ACCORDINGLY, ON AN OVERALL ESTIMATION, THE DISALLOWANCE MAY BE R ESTRICTED TO 5% OF SUCH EXPENSES, WHICH WOULD AMOUNT TO RS.3,54,105/-. THE AO IS DIRE CTED TO DELETE BALANCE DISALLOWANCE AND SUBSEQUENT ADDITION OF RS. 3, 54,1 05/-. THIS PART OF GROUND OF APPEAL NO. 4 (VI). IS PARTLY ALLOWED. 4. AGGRIEVED BY THIS, THE ASSESSEE IS IN APPEAL BEFO RE THE ITAT. THE LD. AR ADDRESSING THE PART DISALLOWANCE SUSTAINED BY THE CIT(A) SUBMITTED THAT ALL THE EXPENSES INCURRED WERE PURELY FOR THE BUSINESS NEEDS OF THE ASSESSEE AND OVER THE YEARS, THEY NORMALLY HAVE BEEN INCURRED , THUS THERE WAS NO RATIONAL BASIS FOR SUSTAINING THE ADDITION IN PART. RELIANCE WAS PLACED UPON THE SUBMISSIONS BEFORE THE CIT(A). INVITING FURTHER ATTENTION TO THE WRITTEN SUBMISSIONS DATED 23.03.2017, IT WAS SUBMITTED THAT THE ASSESSEE IS A RENOWNED COACHING INSTITUTE OF THE COUNTRY. AT THE RELEVANT TIME, IT WAS SUBMITTED, IT WAS HAVING AROUND 18 BRANCHES- COACHI NG INSTITUTIONS THROUGHOUT THE COUNTRY. THE TRAVELING AND CONVEYANCE EXPENSES WERE INCURRED BY THE LOCAL STAFF MEMBERS ON DAY TO DAY BU SINESS EXPENDITURES. UNDER THE STAFF WELFARE EXPENSES , IT WAS SUBMITTED, THAT THE AMOUNTS INCLUDE THE TEA & COFFEE REFRESHMENTS PROVIDED TO T HE STAFF, BIRTHDAY GIFT AND OTHER EXPENDITURE ON THE WELFARE OF THE STAFF AND THE EXPENSES INCURRED ON THE PROMOTION OF THEIR WORKING EFFICIENCIES, UNDER THE HEAD OFFICE EXPENSES THE DAY TO DAY INCIDENTAL BUSINESS EXPENSES HAVE BE EN CLAIMED. DONATION HAS BEEN CONSIDERED TO BE DISALLOWABLE AND HAS BEEN SEPARATELY DISALLOWED. VEHICLE RUNNING AND MAINTENANCE EXPENSES WERE AGAIN INCURRED AT ALL THESE 18 CENTERS EXCLUSIVELY FOR THE COMPANY'S BUSI NESS PURPOSES BUT DID 5 NOT INCLUDE ANY PERSONAL EXPENDITURE OF DIRECTORS AND RELAT IVES AND THIS HAS BEEN CLUBBED BY THE CIT(A) ALONGWITH OFFICE EXPENS ES AND BUSINESS DEVELOPMENT. THE BUSINESS DEVELOPMENT EXPENSES, IT WAS SUBMITTED ARE PROMOTIONAL ACTIVITIES AS THE EXPENSES FOR SEMINARS AND CON FERENCES ARE HELD THROUGH OUT THE COUNTRY. THE PAMPHLETS ETC. ARE DI STRIBUTED. THE FUNCTION EXPENSES PERTAIN TO CELEBRATION EVERY YEAR OF ITS STHAPNA DI WAS I.E. ON 11 TH APRIL, THE AWARDS ON THE DECLARATION OF THE RESULTS OF THE DIFFERENT EXAMINATIONS LIKE OF FITJEE, NIT ETC. ARE GIVEN TO THE SUCC ESSFUL CANDIDATES AND THEY ARE HONORED ON WHICH OCCASION, ALL THE STUDE NTS, THEIR PARENTS AND OTHER CELEBRITIES FROM TOWN/ OUTSIDE THE TOWN A RE INVITED. 4.1 IT WAS SUBMITTED THAT IT IS NOT THE CASE OF THE DEPARTMENT THAT THESE EXPENSES HAVE NOT BEEN INCURRED FOR BUSINESS PURPOS ES NOR HAVE THEY BEEN FOUND TO BE NOT GENUINE. IT WAS SUBMITTED THAT THE ASSESSEE CAME INTO EXISTENCE IN A.Y. 2008-09 AND NO DISALLOWANCE WAS M ADE IN THE PAST AND ONLY IN THE YEAR A.Y. 2011-12 FOR THE FIRST TIME AN IDENTICAL DISALLOWANCE WAS MADE. THE ORDER OF THE CIT(A) GIVING PART RELIEF WA S CHALLENGED BY THE ASSESSEE BY FILING A CROSS OBJECTION BEFORE THE ITA T. HOWEVER, SINCE THE DEPARTMENTAL APPEAL WAS DISMISSED AS NOT MAINTAINAB LE ON THE GROUNDS OF LOW TAX EFFECT, THE CO WAS HELD TO BE NOT MAINTAINA BLE. THUS, IN THE CIRCUMSTANCES, IT WAS HIS SUBMISSION THAT NO DISALL OWANCE AT ALL WAS CALLED FOR AND HENCE, THE ADDITION SUSTAINED MAY KINDLY BE DELETED. 5. THE LD. SR.DR RELIED UPON THE IMPUGNED ORDER. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE HAS CANVASSED THAT SIMILAR EXPENSES HAVE BEEN INCURRED OVER THE YEARS SINCE 200 8-09 ASSESSMENT YEAR AND DISALLOWANCE FOR THE FIRST TIME WAS MADE ONLY IN 2011-12 ASSESSMENT YEAR. THE ORDER OF THE CIT(A) IN 2011-12 ASSESSMEN T YEAR RELIED UPON BY THE CIT(A) IN THE PRESENT PROCEEDINGS, IT HAS BEEN SUBMITTED, WAS CHALLENGED BY THE ASSESSEE BY WAY OF FILING A CROSS OBJECTION BEFORE THE ITAT. HOWEVER, SINCE THE DEPARTMENTAL APPEAL WAS DI SMISSED ON THE GROUNDS OF LOW TAX EFFECT, THE SAID CROSS OBJECTION ALSO STOOD DISMISSED. ACCORDINGLY, IT IS NOTED THAT THE ISSUE BEFORE THE ITAT HAS COME UP FOR CONSIDERATION THE FIRST TIME. IT HAS ALSO BEEN CANVAS SED THAT THE ASSESSEE AT THE RELEVANT POINT OF TIME WAS HAVING 18 BRANCHE S OF COACHING INSTITUTES THROUGH OUT THE COUNTRY. THE TRAVELING AND FUNCTION EXPENSES WHICH HAVE BEEN SUSTAINED IN PART ARE STATED TO BE INCURRED FOR THE TRAVEL OF LOCAL STAFF 6 MEMBERS FOR DAY-TODAY BUSINESS ACTIVITIES AND THE EXP ENSES PERTAINING TO STAFF WELFARE EXPENSES ARE THE TEA, COFFEE, REFRESHME NT PROVIDED TO THE STAFF AND BIRTHDAY AND OTHER SUCH RELATED EXPENDITURES, O FFICE EXPENSES STATED TO BE FOR DAY-TODAY INCIDENTAL BUSINESS EXPENSES. VEHI CLE RUNNING AND MAINTENANCE EXPENSES SEPARATELY DISALLOWED BY THE AO WERE STATED TO BE FOR EXPENSES INCURRED AT ALL THE 18 CENTRES EXCLUSIV ELY FOR THE COMPANYS BUSINESS PURPOSE AND DID NOT INDICATE ANY PERSONAL E XPENDITURE EITHER OF DIRECTORS OR RELATIVES AND HAS BEEN CLUBBED BY THE CIT(A) ALONGWITH OFFICE EXPENSES AND BUSINESS DEVELOPMENT EXPENSES WHICH CONSTITUTED THE EXPENSES PERTAINING TO THE PROMOTIONAL ACTIVITIES OF THE ASSESSEE. THE FUNCTION EXPENSES WERE STATED TO BE EXPENSES PERTAIN ING TO THE STHAPNA DIWAS I.E. 11 TH APRIL, WHEREIN FUNCTION AFTER THE DECLARATION OF TH E RESULTS OF DIFFERENT EXAMINATIONS LIKE FITJEE, AND NIT ETC. WHE RE THE SUCCESSFUL CANDIDATES WERE HONOURED AND ALL STUDENTS ALONGWITH THEIR PARENTS AND OTHER CELEBRITIES FROM THE TOWN OR OUTSIDE THE TOWN WE RE INVITED. 6.1 CONSIDERING THE AFORESAID SUBMISSIONS MADE, WE F IND THAT NONE OF THE FACTS ARE COMING OUT FROM THE ORDERS OF THE AUTH ORITIES. THE AO HAS MADE GENERAL OBSERVATIONS WHILE MAKING DISALLOWANCE W HAT IS THE BASIS FOR CONCLUDING THAT THE EXPENDITURE CLAIMED IS NOT SUBJE CT TO VERIFICATION QUA THE TRAVELING AND FUNCTION EXPENSES, STAFF WELFARE E XPENSES, OFFICE EXPENSES IS NOT COMING OUT FROM THE ORDER EXCEPT QUA VEHICLE RUNNING AND MAINTENANCE EXPENSES WHERE NO LOG BOOK IS FOUND TO HAVE BEEN MAINTAINED. SIMILARLY QUA THE FUNCTION EXPENSES, B USINESS AND OFFICE EXPENSES, THE MERE FACT THAT THE VOUCHERS ARE SELF M ADE WITH THE OBSERVATION THAT PROPER BILLS AND VOUCHERS QUA THE EXPENDITURE IS NOT MAINTAINED, CANNOT BE SAID TO BE A SUFFICIENT REASO NING AS WHAT WAS IMPROPER IN THE VOUCHERS, HAS NOT BEEN SPELT OUT. IT IS NOTED THAT BEFORE THE CIT(A), ASSESSEE HAS ALSO MERELY RELIED UPON THE ORDER OF THE CIT(A) IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR AND NECESSARY FACTS HAVE NOT BEEN PROPERLY CANVASSED NAMELY THE FACT THAT THE ASSESSE E CLAIMS THAT IN THE YEAR UNDER CONSIDERATION, IT HAD 18 CENTRES ALL OVER THE COUNTRY. SIMILARLY THE JUSTIFICATION ON THE ABOVE FACT THAT TRAVELING AND CONVEYANCE EXPENSES, STAFF WELFARE EXPENSES AND FUNCTION ETC. FOR HONOURING TH E SUCCESSFUL CANDIDATES AND CELEBRATING THE STHAPNA DIWAS ETC. A RE ALL ARGUMENTS UNSUPPORTED BY SPECIFIC EVIDENCES AND THUS NOT COMING OUT FROM THE ORDERS. SINCE THE ISSUE IS OF A RECURRING NATURE AND BOTH T HE TAX PAYER AS WELL AS THE TAX AUTHORITIES HAVE TREATED CLAIM OF EXPENSES IN A PERFUNCTORY 7 MANNER, IT IS DEEMED APPROPRIATE TO SET ASIDE THE S AME BACK TO THE FILE OF THE LD. CIT(A) WITH DIRECTION TO DECIDE THE SAME BY WAY OF A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABL E OPPORTUNITY OF BEING HEARD. 7. BEFORE PARTING, IT MAY BE APPROPRIATE TO NOTE T HAT RELIANCE HAS BEEN PLACED UPON CIT VS MAHARAJA SHREEUMED MILLS LTD. 192 ITR 565 (RAJ). HOWEVER, WE NOTE THAT THE SAID DECISION HAS NO APPL ICABILITY TO THE FACTS OF THE PRESENT CASE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29 MAY,2017. SD- SD/- (VIKRAM SINGH YADAV) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL M EMBER POONAM(CHD) COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,JAIPUR