ITO, BIKANER V. M/s. Adhunik Khanan Parivahan, BIKANER

ITA 87/JODH/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82949 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 06-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 25-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: U C JAIN SHRI GAUTAM BAID
• Keywords: Business income; Wrong claim
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 87 /JODH/2013 (A.Y. 200 9 - 1 0 ) ITO, WARD - 1(1) , BIKANER. VS. ADHUNIK KHANAN VA PARIVAHAN THEKA SAHKARI SAMITI LTD. , RANI BAZAR, BIKANER. (APPELLANT) PAN NO. AADFA 0801 G (RESPONDENT) ASSESSEE BY : SHRI U.C. JAIN , SHRI GAUTAM BAID & SHRI RAJENDRA JAIN. DEPARTMENT BY : SHRI N.A. JOSHI - D.R. DATE OF HEARING : 06 / 0 8 /201 4 . DATE OF PRONOUNCEMENT : 15 /0 9 /201 4 . O R D E R PER N.K. SAINI, A.M TH IS IS AN APPEAL BY THE D EPARTMENT AGAINST THE ORDER DATED 28 / 12 /201 2 OF L D . CIT(A) (C) , JAIPUR . THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN: - 2 1. DELETING ADDITION OF RS. 86,98,958/ - MADE ON ACCOUNT OF DIFFERENCE IN GROSS RECEIPTS AS PER TDS CERTIFICAT E S VIS - - VIS AS PER BOOKS OF ACCOUNT. 2. DELETING ADDITION OF RS. 1,50,000/ - MADE ON ACCOUNT OF DISALLOWANCE OF MISCELLANEOUS EXPENSES. THE APPELLANT RESERVES ITS RIGHT TO ADD, AMEND OR ALTER THE GROUNDS OF APPEAL ON OR BEFORE THE DATE THE APPEAL IS FINALL Y HEARD FOR DISPOSAL. 2 VIDE GROUND NO. 1 , THE GRIEVANCE OF THE DEPARTMENT RELATES TO THE DELETION OF ADDITION OF RS. 86,98,958/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DIFFERENCE IN GROSS RECEIPTS AS PER TDS CERTIFICATE VIS - - VIS AS PER BOOKS OF ACCOUNTS. 3. FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT THE ASSESSEE IS A COOPERATIVE SOCIETY IN WHICH 56 MEMBERS ARE INVOLVED AND IT IS ENGAGED IN TRANSPORTATION , MINING , EXCAVATION BUSINESS. THE ASSESSEE HAD TAKEN CONTRACTS FROM BIG COMPANIES LIKE RAJASTHAN ST A TE MINES MINERALS LTD. ( RSMM LTD. , IN SHORT ) . THE PAYMENTS ARE RELEASED BY THESE COMPANIES AFTER DEDUCTING TAX AT SOURCE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER NOTICED THAT THE GROSS RECEIPTS AS PER TDS CERTIFICATE ISSUED BY THE RSMM LTD. WAS AT RS. 7,88,38,504/ - WHILE IN THE BOOKS OF ACCOUNTS THE AMOUNT ENTERED WAS RS. 7,01,39,564/ - AND THERE WAS A DIFFERENCE OF RS. 8698,958/ - . ACCORDING TO THE ASSESSING 3 OFFICER , THE ASSESSEE FAILED TO GIVE SATISFACTORY EXPLANATION IN THIS RESPECT. HE, THEREFORE, MADE THE ADDITION OF RS. 86,98,958/ - . 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND THE SUBMISSIONS MADE AS INCORPORATED IN PARA 6.3 OF THE IMPUG NED ORDER WERE AS UNDER: - THE ASSESSMENT WAS COMPLETED U/S 143(3) OF I.T. ACT BY ACIT, CENTRAL, BIKANER BY MAKING AN ADDITION OF RS. 8848958/ - . THE ASSESSEE BEING AGGRIEVED PREFERRED AN APPEAL BEFORE YOUR HONOR. THE FIRST AND FOREMOST GROUND OF APPEAL IS DIRECTED AGAINST AN ADDITION OF RS. 8698958/ - ON ACCOUNT OF DIFFERENCE IN THE GROSS RECEIPTS AS PER TDS CERTIFICATES VIS - A - VIS AS PER THE BOOKS OF ACCOUNTS. THE ID. AO MISTAKENLY CONSIDERED GROSS RECEIPTS AS PER TDS CERTIFICATES AT RS. 78838504/ - AS AGAIN ST RS. 70139564/ - AS PER BOOKS OF ACCOUNTS. IN THE ORDER U/S. 143 (3) OF I. T. ACT, IT WAS MENTIONED THAT THERE HAS BEEN DIFFERENCE OF RS. 86,98,958/ - IN THE TURNOVER BETWEEN THE TURNOVER AS PER TDS CERTIFICATES AND AS PER BOOKS OF ACCOUNTS AND THE SAME WA S CONFIRMED BY THE RSMM LTD., BIKANER AND JAISALMER IN RESPONSE TO NOTICES/LETTERS ISSUED U/S. 133 (6) OF I. T. ACT. THE RELEVANT EXTRACT OF ORDER IS BEING REPRODUCED: - THERE IS A DIFFERENCE OF RS. 86,98,958/ - WHICH WAS CONFIRMED AS PER THE INFORMATION R ECEIVED FROM M/S. RSMM LTD., BIKANER AND JAISALMER IN RESPONSE OF THE NOTICES/ LETTERS ISSUED U/S. 133(6) OF THE I. T. ACT, 1961 BY THIS OFFICE. THERE HAS BEEN SOME ERROR IN THE CALCULATION OF TURNOVER WHICH WAS PURPORTEDLY CONFIRMED BY RSMM LTD., BIKANE R AND JAISALMER. THE AGGREGATE OF TURNOVER AS PER THEIR RESPONSES TO NOTICES U/S. 133 (6) OF THE I. T. ACT IS RS. 6,75,46,608/ - ONLY AS AG AINST RS. 7,88,38,504/ - CONSIDERED IN THE ORDER. THE DETAIL OF WHICH IS AS UNDER: - 4 1. RSMM LTD., JAISALMER (STATEMENT SHOWING THE DETAILS OF PAYMENT MADE TO M/S. AKPTSSL W.EF APRIL 2008 TO MARCH 2009 AS PER DLOI NO. RSMM/CO/CONT/263/DATED 19 TH MARCH, 2005 AS FURNISHED IN RESPONSE TO NOTICE U/S. 133 (6) IS BEING ENCLOSED) 5,24,22,495.86 2. RSMM LTD., BIKANER (FURNISHED BLOCKWISE DETAILS OF PAYMENTS BLOCK A 16,30,572/ - BLOCK B 32,77,053/ - BLOCK C 64,05,288/ - AS MENTIONED IN THE PARA 2 OF THE RSMM BIKANER LETTER 38,11,199/ - (THE STATEMENT ENCLOSED) 1,51,24,112.00 6.75.46.608 .00 THUS, THERE APPEARS APPARENT MISTAKE IN THE COMPUTATION OF TURNOVER AS TAKEN IN THE ORDER AND AS REVEALED BY THE RSMM LTD., JAISALMER AND BIKANER VIDE THEIR RESPONSES TO NOTICES U/S. 133 (6) OF I. T. ACT. THE RECEIPT AS PER THE MATERIAL AVAILABLE ON R ECORD IS EVENTUALLY RS. 6,75,46,608/ - AS AGAINST RS. 7,88,38,504/ - CONSIDERED IN THE ORDER. IT WAS SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDING AND REITERATED NOW THAT THE ASSESSEE OBSERVED MERCANTILE SYSTEM AND THE GOVT./ SEMI GOVT, DEPARTMENT I.E. RSMM LTD. FOLLOWS CASH SYSTEM OF ACCOUNTING. IT ACCOUNTS FOR THE LAST BILLS PERTAINING TO A.Y. 2009 - 10 IN THE SUBSEQUENT A.Y. 2010 - 11 SINCE THE PAYMENT FOR SAME IS MADE BY IT IN THAT YEAR ONLY. WHEREAS THE RSMM LTD. CONSIDERED THE PAYMENTS PERTAINING TO A.Y. 2008 - 09 AS RECEIPTS OF A.Y. 2009 - 10 BUT THE ASSESSEE IN LINE WITH THE MERCANTILE SYSTEM OF ACCOUNTING FOLLOWED, CONSIDERED THE SAME AS INCOME IN A.Y. 2008 - 09. THIS FACT CAN BE GAUGED EVEN FROM THE MATERIAL ALREADY AVAILABLE ON RECORD. IN VIEW OF TH E FOREGOING SOME ADJUSTMENT NEEDS TO BE MADE FOR RECONCILIATION OF RECEIPTS AS PER RSMM LTD. AND AS PER FINANCIAL STATEMENTS. RECEIPT AS PER THE RESPONSES U/S. 133 (6) OF I. T. ACT 6,75,46,608/ - LESS: BILLS RAISED BY THE ASSESSEE IN A. Y. 2008 - 09 AND ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS AND AMOUNT 5 IS A PART OF GROSS RECEIPT BUT PAYMENT WAS NOT RECEIVED FROM RSMM LTD. HENCE TDS NOT DEDUCTED BY THE M IN A. Y. 2008 - 09. THE PAYMENT WAS MADE BY RSMM LTD. IN A. Y. 2009 - 10 AND TDS DEDUCTED IN THAT YEAR 35 ,97,025/ - 6,39,49,583/ - ADD: - BILLS RAISED BY THE ASSESSEE IN A. Y. 2009 - 10 BUT THE PAYMENT RECEIVED IN NEXT YEAR I.E. 2010 - 11. THE AMOUNT HAS BEEN ACCOUNTED AND INCLUDED IN GROSS RECEIPT OF A.Y. 2009 - 10 62 , 04 , 409/ - RECEIPT AFTER FACTORING IN AND GIVING DUE ALLOWANCE TO DIFFERENT METHODS OF ACCOUNTING 7,01,53,992/ - RECEIPTS AS REFLECTED IN FINANCIAL STATEMENT 7,01,39,564/ - DIFFERENCE 14,446/ - THE DIFFERENCE BETWEEN TURNOVER IS FINALLY THAT OF RS. 14,446/ - WHICH IS INSIGNIFICANT AND THE SAME NEEDS AND DESERVES TO BE IGNORED. WITH THIS IT IS VERY HUMBLY REQUESTED TO YOUR HONOUR TO RECTIFY THE ARITHMETIC MISTAKE APPARENT FROM MATERIAL AVAILABLE ON RECORD AND OBLIGE. HERE IT IS NEEDLESS TO ONCE AGAIN SUBMIT THAT SERVICE TAX, SALES TAX, EXCISE DUTY AND OTHER INDIRECT TAXES ARE NOT PART OF THE INCOME WHICH IS REFLECTED IN FINANCIAL STATEMENT. THIS PRACTICE IS CUSTOMARY AND FOLLOWED ACROSS THE BOARD. THE ADHERENCE TO THIS PRACTICE IS CONSISTENT AND THE MATERIAL AVAILABLE ON RECORD AS W ELL AS THE PAST HISTORY IS TESTIMONY TO IT. FROM PERUSAL OF AUDITED FINANCIAL STATEMENTS IT IS CLEAR THAT SERVICE TAX HAS NOT BEEN INCLUDED BY THE ASSESSEE IN TURNOVER. NOWHERE IN THE FINANCIAL STATEMENTS DIRECT/ ADMINISTRATIVE EXPENSES YOUR HONOUR WILL FI ND THE SERVICE TAX EXPENSES AS BEING DEBITED. THUS, THE RECEIPT AS MANIFESTED IN THE FINANCIAL STATEMENT IS EXCLUSIVE OF SERVICE TAX, WHICH IS ALSO IN LINE WITH THE TRADE PRACTICE FOLLOWED BY THE TRADE AND INDUSTRY IN RELATION TO INDIRECT TAXES INCLUDING S ERVICE TAX. IN CONTINUATION TO THE EARLIER SUBMISSION IT IS STATED THAT THE DIFFERENCE BETWEEN RECEIPTS AS PER TDS CERTIFICATES ISSUED BY THE DEPARTMENT AND GROSS RECEIPTS SHOWN IN STATEMENT OF ACCOUNTS BY THE ASSESSEE ARE FULLY RECONCILABLE. THE REPLY FUR NISHED BY THE RSMM LTD., JAISALMER & BIKANER IN RESPONSE TO NOTICE U/S. 133(6) OF THE I. T. ACT, FURTHER APPROVE AND 6 VINDICATE THE MATERIAL ALREADY AVAILABLE ON RECORD. THE POINTWISE RECONCILIATION ON THE BASIS OF RESPONSE OF THE RSMM LTD., JAISALMER & BIK ANER IS CONTAINED IN THE PRECEDING REPLY. IT WAS HELD IN THE CASE OF LTO VS. HAM ROAD CARRIERS (P) LTD. (2011) 140 TTJ (AHD.) 642 SS. 4 & 5 THAT AN INCOME OF A TAXPAYER IS NOT REQUIRED TO BE COMPUTED MERELY WITH REFERENCE TO THE TDS CERTIFICATE BUT ASSESSMENT OF AN INCOME IS ALTOGETHER AN INDEPENDENT EXERCISE. WITH WHICH WAS CERTIFIED ON THE TDS CERTIFICATE COULD OR COULD NOT HAVE BEEN SUBJECTED TO TAX IN THE HANDS OF THE ASSESSEE RECIPIENT. THE DEDUCTOR HAD CHOSEN A SAFE PROCEDURE OF DEDUCTION OF TA X ON THE ENTIRE AMOUNT OF FREIGHT. OTHERWISE THE FREIGHT WAS TO BE PAID TO THE TRUCK OWNERS AND NOT TO THE ASSESSEE COMPANY, WHO IS ONLY A CONDUIT IN ARRANGING THE HIRING OF THE TRUCK. THE FREIGHT WAS TO BE PASSED ON TO THE TRUCK OWNERS, THEREFORE, THE FRE IGHT WAS NOT SUBJECT TO TAX IN THE HANDS OF THE ASSESSEE. NEVERTHELESS, ACCOUNTS OF THE ASSESSEE HAVE ALSO DEMONSTRATED THE SAME. WITH THE RESULT, THE AMOUNT ON WHICH TDS WAS DEDUCTED HAD NOT MATCHED WITH THE FIGURES OF THE INCOME DISCLOSED BY THE ASSESSEE IN RESPECT OF THOSE TRANSACTIONS. ADDITION ON ACCOUNT OF DIFFERENCE IN TRUCK HIRE CHARGES RECEIPTS SHOWN IN P&L A/C AND THAT SHOWN IN THE TDS CERTIFICATE WAS NOT SUSTAINABLE AMOUNT ON WHICH TDS IS DEDUCTED IS SUBJECT TO CHARGE AS PER THE PROVISIONS OF THE ACT. THE CASE OF THE ASSESSEE IS COVERED BY THE RATIO OF DECISION. THE DIFFERENCE IN TURNOVER AS PER TDS CERTIFICATE IN FORM 16A AND AS PER THE FINANCIAL STATEMENT IS UBIQUITOUS IN THE INSTANT CASE OF THE ASSESSEE. SINCE TAX IS DEDUCTED (TDS) ON THE AMOUNT OF PAYMENT INCLUSIVE OF SERVICE TAX WHEREAS THE FINANCIAL STATEMEN T CONTAIN FIGURE EXCLUSIVE OF SERVICE TAX. THE SERVICE TAX IS BY AND LARGE COLLECTION ACCOUNT. THE SERVICE TAX IS ALTHOUGH PAYABLE BY THE ASSESSEE BUT THE BURDEN OF WHICH IS PASSED ON TO THE SERVICE RECIPIENT. THE ASSESSEE DURING THE YEAR COLLECTED THE SER VICE TAX AND REMITTED TO THE CENTRAL GOVERNMENT. THEREFORE THE PROFITABILITY/ TURNOVER IN THE BOOKS OF ACCOUNTS REMAINED INSULATED AND UNAFFECTED. THE ASSESSMENT FOR THE IMMEDIATELY PRECEDING YEAR WAS COMPLETED U/S 143(3) OF I.T. ACT AND THE TURNOVER AS DE CLARED IN THE FINANCIAL STATEMENT WAS ACCEPTED IN 7 TOTO, ALTHOUGH THE NATURE OF BUSINESS AND UNDERLINED PECULIARITY IN ACCOUNTING OF THE DEPARTMENT VIS - A - VIS THE ASSESSEE WERE SAME. THUS THE PHENOMENON OF DIFFERENCE IN RECEIPT STAND FULLY DELIBERATED AND AD JUDICATED. THEREFORE IT IS REQUESTED TO APPRECIATE THE DIFFERENCE IN RECEIPT WHICH IS QUITE LEGAL AND ACCEPT THE RECEIPT AS SHOWN IN THE FINANCIAL STATEMENT AND DELETE THE ADDITION OF RS. 86,98,958/ - AND OBLIGE. 5. T HE ASSESSEE FURTHER SUBMITTED TO THE LD. CI T(A) THAT THERE WAS SOME ERROR IN CALCULATION OF THE TURNOVER BY M/S. RSMM LTD. AND SUBSEQUENTLY THEY INFORMED VIDE LETTER DATED 15/03/2012 THAT THERE WERE CLERICAL ERRORS AND CORRECT FIGURES AS COMMUNICATED ON 15/03/2012 SHOULD BE READ AS AG A INST THE FIGURES COMMUNICATED EARLIER. T HE LD. CIT(A) FORWARDED THE WRITTEN SUBMISSIONS OF THE ASSESSEE TO THE ASSESSING OFFICER WITH A DIRECTION TO EXAMINE THE CONTENTION OF THE ASSESSEE AND SUBMIT THE FACTUAL REPORT . THE ASSESSING OFFICER SUBMIT TED THAT THE AMOUNT OF RS. 55,96,199/ - WAS INCORRECT AND CORRECT AMOUNT FROM M/S. RSMM LTD. , JAIS E LMAR CAME TO RS. 50,04,040/ - . HE ALSO INFORMED THAT RSMM LTD. , BIKANER PAID AN AMOUNT OF RS. 1,61,68,306/ - AND THE SAME PAYMENT WAS CONFIRMED VIDE LETTER DATED 07/12/2012. THE ASSESSING OFFICER REPORTED THAT THE TOTAL PAYMENT MADE BY M/S. RSMM LTD. , JAISELMAR & BINAKER ARRIVED AT RS. 7,35,94,842/ - . AS REGARDS TO THE CONTENTION OF THE ASSESSEE THAT M/S. RSMM LTD. WAS MAINTAINING THE 8 B OOKS OF ACCOUNTS ON MERCANTILE BASIS, THE ASSESSING OFFICER REPORTED THAT THE AUDIT REPORT OF M/S. RSMM LTD. REVEALED THAT THE COMPANY WAS MAINTAINING THE BOOKS OF ACCOUNTS ON MERCANTILE BASIS, THEREFORE, THE ISSUE THAT WHEN BILL WAS ISSUED AND WHEN PAYMENT WAS MADE WAS NOT RELEVANT. AS REGARDS TO THE RECONCILIATION OF FIGURES THE ASSESSING OFFICER HAD REPORTED THAT THE ASSESSEE HAD NOT MADE ANY CORRESPONDENCE IN THIS REGARD WITH M/S. RSMM LTD. AND SUCH ERROR WAS NOT NOTICED FROM THE COMMUNICATION RECEIVED FROM M/S. RSMM LTD. THEREFORE, HE DID NOT CONSIDER IT NECESSARY TO MAKE RECONCILIATION OF SUCH FIGURES. THE REPORT OF THE ASSESSING OFFICER WAS MADE AVAILABLE TO THE ASSESSEE, WHO SUBMITTED REJOINDER TO SUCH REPORT AND STATED THAT M/S. RSMM LTD. HAD DEDUCTED TDS OUT OF THE BILLS OF THE ASSESSEE ON PAYMENT BASIS I.E. AS AND WHEN THE PAYMENT WAS MADE TDS WAS DEDUCTED . IT WAS ALSO STATED THAT TDS ON SERVICE TAX COMPONENT OF THE BILLS WAS ALSO DEDUCTED WHEREAS THE SAME HAD BEEN ACCOUNTED FOR BY THE ASSESSEE SEPARATELY AS THE SAID AMOUNT WAS ULTIMATELY REMITTED TO THE GOVT. ACCOUNT AND THE TURNOVER ON ACCOUNT OF SERVICE TAX COULD NOT BE THE RECEIPT FOR CONSIDERATION OF TURNOVER OF THE AS SESSEE. THE ASSESSEE FURNISHED RECONCILIATION STATEMENT WHICH READS AS UNDER: - 9 S. NO. PARTICULARS AMOUNT AMOUNT 1 TURNOVER AS DECLARED BY THE ASSESSEE 70139546 2 ADD: SERVICE TAX INCLUDED BY THE PRINCIPALS IN TDS WHEREAS NOT CONSIDERED BY ASSESSEE (JAISALMER) 5004040 (AS INFORMED BY THE PRINCIPAL IN REMAND PROC.) 3 ADD: AMOUNT FOR WHICH BILLS WERE RAISED BY ASSESSEE DURING FY 07 - 08 BUT CONSIDERED BY 3597025 PRINCIPAL DURING THIS CONCERNED YEAR BILL FOR APRIL, 08 (APPEARING IN STATEMENT FILED BY PRINCIPAL) 4 ADD: SERVICE TAX CONSIDERED BY THE PRINCIPAL IN TDS WHEREAS ASSESSEE HAS NOT INCLUDED IN (BIKANER) RS. 16168306 1044194 5 ADD: EXCESS CREDIT ALLOWED BY PRINCIPAL IN BILL NO. 1, 2 & 3 41476 (VERIFIABLE FROM OUR LEDGER) 9686735 79826281 6 LESS: BILLS RAISED BY US DURING FY 08 - 09 BUT CONSIDERED BY PRINCIPAL IN NEXT FY (MARCH 09) 5788353 7 LESS: DEDUCTIONS MADE BY PRINCIPAL OUT OF BILLS RAISED BY THE ASSESSEE BILL NO. 13, 14, 15, 22 & 23 177984 (VERIFIABLE FROM OUT LEDGER) 8 LESS: RATE DIFF. BILLS NOT CONSIDERED BY PRINCIPAL BILL NO. 16 TO 21 265102 6231439 AMOUNT AS PER TDS CERTIFICATES 73594842 1 DETAILS AS PROVIDED BY PRINCIPALS TO THE DEPTT 5004040 2 TDS DETAILS IN REPLY TO REMAND REPORT (JAISALMER UNIT) 52422496 3 DEDUCTED BY BIKANER UNIT 16168306 73594842 THE ASSESSEE ALSO FILED SPECIFIC EXPLANATION/NOTE BEFORE THE LD. CIT(A) IN RESPECT OF EACH ITEM OF RECONCILIATION AND SUCH EXPLANATION / NOTE WAS AS UNDER: - 1. AT SERIAL NO. 1 THE AMOUNT OF TURNOVER AS DECLARED BY THE APPELLANT IN THE RETURN IS APPEARING WHICH IS RS. 70139546/ - . 10 2. AT SERIAL NO. 2 AMOUNT OF SERVICE TAX OF RS. 5004040/ - IS MENTIONED. THIS AMOUNT IS AS PER WORKING SUB MITTED BY THE ID. AO IN HIS REMAND REPORT AT PAGE 2 AND THE WORKING SUBMITTED BY RSMM, JAISALMER ALSO WHEREIN CORRECTED AMOUNT OF SERVICE TAX IS MENTIONED AT RS. 5004040/ - . 3. AT SERIAL NO. 3 AN AMOUNT OF RS. 3597025/ - IS MENTIONED WHICH IS THE AMOUNT OF BIL L DATED 31.3.2008 (COPIES ENCLOSED FOR RS. 3210710/ - & 386315/ - ). THESE BILL AMOUNT WERE INCORPORATED IN THE TURNOVER OF THE ASSESSEE FOR THE YEAR ENDED 31.3.2008 (COPY OF LEDGER ACCOUNT FOR THE YEAR 2007 - 08 HAS ALREADY BEEN SUBMITTED EVIDENCING INCLUSION OF ABOVE BILLS IN THE FY 2007 - 08). SINCE RSMM CLEARED THIS BILL IN THE FY 2008 - 09 SAME HAS BEEN INCLUDED BY THEM IN THE TDS CERTIFICATE FOR THE FY. 2008 - 09. 4. AT SERIAL NO. 4 AN AMOUNT OF RS. 1044194/ - IS MENTIONED WHICH IS THE AMOUNT OF SERVICE TAX ON WHIC H TDS WAS DEDUCTED BY RSMM, BIKANER. SEPARATE WORKING OF THE SAME IS ANNEXED HERETO FOR THIS AMOUNT. THE PRINCIPAL HAS NOT CONSIDERED AMOUNT OF SERVICE TAX CHARGE BY THE APPELLANT IN ITS BILLS DATED 28.7.08 AS IS APPARENT FROM THE DETAILS OF BILLS AS APPEA RING IN ACCOUNT STATEMENT PROVIDED BY THE PRINCIPAL (APPEARING AT PAGE 10 TO 12 IN THE COMPILATION) AND THE TDS CERTIFICATES. 5. AT SERIAL NO. 5 AN AMOUNT OF RS. 41476/ - IS MENTIONED WHICH IS THE AMOUNT OF EXCESS CREDIT ALLOWED BY RSMM AGAINST BILL NOS 1, 2 & 3. COPIES OF THESE BILLS ARE ENCLOSED HEREWITH FOR YOUR KIND VERIFICATION. AS PER THESE BILLS DATED 13.5.2008 HIRING CHARGES ARE RS. 159019/ - , RS. 794206/ - AND RS. 1412622 WHEREAS RSMM HAS PASSED THESE BILLS AT RS. 161807/ - , RS. 808129/ - AND RS. 1437387 / - (AS PER PAGE 10, 11 & 12 OF COMPILATION). TOTAL AMOUNT OF BILLS RAISED BY THE ASSESSEE IS RS. 2365847/ - WHEREAS RSMM HAS ALLOWED CREDIT OF RS. 2407323/ - LEAVING AN EXCESS CREDIT OF RS. 41476/ - . 6. AT SERIAL NO. 6 AN AMOUNT OF RS. 5788353/ - IS MENTIONED W HICH IS THE AMOUNT OF BILLS RAISED BY THE ASSESSEE DURING THE FY 2008 - 09 AND INCLUDED IN THE TURNOVER OF THE ASSESSEE FOR THIS CONCERNED YEAR. THE SAME IS VERIFIABLE FROM THE COPY OF LEDGER ACCOUNT SUBMITTED TODAY. COPY OF THE BILLS DATED 3.4.09 ISSUED FOR THE PERIOD OF MARCH 2009 ARE ENCLOSED HEREWITH TO EVIDENCE THE SAME. THESE BILLS WERE SETTLED BY RSMM IN THE FY 2009 - 10 AND TDS WAS DEDUCTED THEREIN. 7. AT SERIAL NO. 7 AN AMOUNT OF RS. 177984/ - IS MENTIONED WHICH PERTAINS TO DEDUCTIONS MADE BY RSMM OUT OF BILL NOS. 13, 14, 15, 22 & 23. COPIES OF THE SAID BILLS ARE ENCLOSED HEREWITH FOR YOUR KIND VERIFICATION. 8. AT SERIAL NO. 8 AN AMOUNT OF RS. 265102/ - IS MENTIONED WHICH 11 PERTAINS TO BILLS RAISED BY THE APPELLANT FOR PRICE VARIATIONS BUT NO CREDIT FOR THE SAME HAS BEEN ALLOWED BY RSMM. COPIES OF THE SAID BILLS ARE ENCLOSED HEREWITH FOR YOUR KIND VERIFICATION. 6 . THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, SUSTAINED THE ADDITION OF RS. 41,476/ - BY OBSERVING IN PARA 6.8 OF THE IMPUGNED ORDER WHICH READ AS UNDER: - 6.8 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AS ALSO THE FINDINGS OF THE A . O . I HAVE ALSO CONSIDERED THE REMAND REPORT OF THE AO AS ALSO THE SUBMISSION MADE BY THE APPELLANT IN RESPECT OF SUCH REMAND REPORT INCLUDING THE RECONCILIATION CHART FURNISHED BY THE APPELLANT. IT MAY BE NOTED THAT IN ORIGINAL ORDER O F ASSESSMENT THE TOTAL TURNOVER AS PER TDS CERTIFICATE ISSUED BY M/S RS MM LTD. (BIKANER AND JAISELMAR UNIT} WAS DETERMINED AT RS. 78838504/ - BY THE AO AND THE TURNOVER SHOWN IN BOOKS OF ACCOUNTS WAS FOUND TO BE A T RS. 70139564/ - . THE AO ACCORDINGLY DETERMINED DIFFERENCE IN TURNOVER SHOWN BY THE ASSESSEE AMOUNTING TO RS. 8698958/ - AND THE SAME WAS ADDED TO THE TOTAL INCOME OF THE APPELLANT. IT MAY BE MENTIONED THAT THE DIFFERENCE OF THESE TWO FIGURES IS CORRECTLY AR RIVES A T RS. 8698 940/ - W HEREAS THE AO APPEARED TO HAVE WR ONGLY MENTIONED SUCH AMOUNT AT R S. 8698958/ - . IT MAY ALSO BE STATED THAT THE AO HAS COLLECTED INFORMATION FROM M/S RSMM LTD. BIKANER AND JAISELMER U/S 133(6) OF IT ACT AND SUCH INFORMATION WAS RECEIV ED ON 15.12.2011 AND 16.12.2011. HOWEVER SUBSEQUENTLY THE M/S RSMM LTD. VIDE LETTER DATED 15.3.2012 ADDRESSED TO ACIT, CIRCLE - 1, BIKANER ADMITTED & SOME MISTAKE IN REPORTING OF TURNOVER/ TDS. DURING THE APPELLATE PROCEEDINGS, THE APPELLANT ALSO CLAIMED THE SAME FACTS AS TO HOW THE TURNOVER WAS WRONGLY REPORTED AND THAT SUCH WRONG REPORTING BY THE PRINCIPALS I.E. M/S RSMM LTD. HAS ALSO BEEN BROUGHT TO THE NOTICE OF THE AO. ALL THESE FACTS AND CONTENTIONS RAISED BY THE AO APPELLANT WERE BROUGHT TO THE NOTICE OF THE AO AND ACCORDINGLY THE AO WAS REQUIRED TO EXAMINE SUCH CONTENTIONS AND SUBMIT A FACTUAL REPORT ACCORDINGLY. THE AO CONSIDERED SUCH ISSUE AND AFTER 12 NECESSARY EXAMINATION SUBMITTED A REPORT DATED 10.10.2012 AND AS PER HIS REPORT THE TOTAL TURNOVER REP ORTED BY M/S RSMM LTD. JAISELMER AND BIKANER IS AS UNDER: GROSS AMOUNT TDS M/S RSMM LTD. JAISALMER RS. 52422496/ - RS. 148487/ - RS. 5596199/ - RS. 27639/ - M/S RSMM LTD. BIKANER RS. 16168366/ - TOTAL RS. 73594842/ - THE TOTAL TURNOVER WAS ACCORDINGLY ARRIVED AT RS. 73594842/ - . AS REGARDS THE OTHER CONTENTION RAISED BY THE APPELLANT THE AO HAS NOT ADDRESSED SUCH ISSUE AND SIMPLY STATED THAT THE APPELLANT IS MAINTAINING ITS ACCOUNTS ON MERCANTILE BASIS AND THAT THE APPELLANT HAS NOT MADE ANY CORRESPONDEN CE ON SUCH ISSUES. IT MAY BE NOTED THAT AFTER SUCH CORRECTION IN RECEIPTS/ TURNOVER AS INTIMATED BY M/S RSMM LTD. AND ALSO CONFIRMED BY THE AO THE TOTAL RECEIPTS SHOWN BY M/S RSMM LTD. IS ARRIVED AT RS. 73594842/ - AS AGAINST RS. 70139564/ - SHOWN BY THE APP ELLANT. AFTER THE NECESSARY EXAMINATION OF FACTS REGARDING THE VARIATION IN THESE TWO FIGURES, THE JUSTIFICATION GIVEN BY THE APPELLANT AS ALSO WHETHER SUCH JUSTIFICATION IS BELIEVABLE OR CORRECT IS NARRATED AS UNDER: S. NO. PARTICULARS AMOUNT AMOUNT REMARKS 1 TURNOVER AS DECLARED BY THE ASSESSEE 70139546 2 ''ADD: SERVICE TAX INCLUDED BY THE PRINCIPALS IN IT IS NOTED THAT WHILE RAISING THE BILLS THE APPELLANT HAS CHARGED SERVICE TAX TO BE RECOVERED FROM THE PRINCIPALS, SUCH AMOUNT OF SERVICE TAX WAS AT RS. 5004040/ - AND M/S RSMM LTD., JAISALMER EVEN DEDUCTED TDS ON SUCH AMOUNT OF SERVICE TAX. THEREFORE THE AMOUNT OF SERVICE TAX WAS TREATED AS TURNOVER BY M/S RSMM LTD. JAISALMER WHEREAS THE APPELLANT HAS NOT TREATED THE AMOUNT BEING PART OF THE TU RNOVER. SUCH AMOUNT OF SERVICE TAX CANNOT BE TREATED AS TURNOVER OR BUSINESS RECEIPT IN THE CASE OF THE APPELLANT. THESE FACTS ARE VERIFIABLE FORM THE REPORT OF THE RSMM LTD. AS ALSO OF THE AO. THEREFORE THE TURNOVER REPORTED BY M/S RSMM LTD. JAISALMER ON ACCOUNT OF SUCH AMOUNT OF SERVICE TAX NEEDS TO BE REDUCED SO AS TO MATCH WITH THE APPELLANTS TURNOVER. TDS WHEREAS NOT CONSIDERED BY ASSESSEE (JAISALMER) 5004040 13 (AS INFORMED BY THE PRINCIPAL IN REMAND PROC.) 3 ADD: AMOUNT FOR WHICH BILLS WERE RAISED BY ON VERIFICATION IT IS NOTED THAT THE TWO BILLS FOR RS. 3210709/ - AND 386315/ - WERE RAISED ON 31.3.08. THE APPELLANT TREATED SUCH AMOUNT AS RECEIPT/ TURNOVER AND INCLUDED THE SAME IN THE TOTAL RECEIPT WHICH IS VERIFIABLE FROM LEDGER ACCOUNT OF THE APPELLANT FOR A.Y. 08 - 09. THIS FACT IS ALSO VERIFIABLE FROM THE BALANCE SHEET OF THE APPELLANT FROM THE RELEVANT PERIOD BUT M/S RSMM LTD. MADE PAYMENT OF SUCH BILL IN NEXT A.Y. I.E. 09 - 10, A.Y. UNDER CONSIDERATION AS DEDUCTED TDS AMOU NT ALSO IN A.Y. 09 - 10 ON THE BASIS OF DEDUCTION OF TDS M/S RSMM LTD. AS WELL AS THE AO TREATED SUCH AMOUNT AS RECEIPT/ TURNOVER OF A.Y. 09 - 10. HOWEVER PERUSAL OF NECESSARY DOCUMENTS AND DISCUSSED ABOVE INDICATE THAT THE AMOUNT WAS ALREADY OFFERED IN A.Y. 0 8 - 09 BY THE APPELLANT AND SAME AMOUNT CANNOT BE TAXED TWICE. THEREFORE THE APPELLANT HAS RIGHTLY NOT INCLUDED SUCH AMOUNT IN RESPECT OF A.Y. 09 - 10. FOR MAKING RECONCILIATION BETWEEN THE TURNOVER SHOWN BY M/S RSMM LTD. VIS - A - VIS THE APPELLANT IN RESPECT OF A.Y. 09 - 10, THE AMOUNT HAS TO BE REDUCED FROM THE TURNOVER OF M/S RSMM LTD. ASSESSEE DURING FY 07 - 08 BUT CONSIDERED BY 3597025 PRINCIPAL DURING THIS CONCERNED YEAR BILL FOR APRIL, 08 (APPEARING IN STATEMENT FILED BY PRINCIPAL) 4 ADD: SERVICE TAX CONSIDERED BY THE PRINCIPAL THE FACTS AND CIRCUMSTANCES OF THIS ISSUE IS ALSO SIMILAR AS DISCUSSED IN SERIAL NO. 2. IT IS NOTE THAT THE APPELLANT HAS RAISED CERTAIN BILLS IN RESPECT OF M/S RSMM LTD. BIKANER | THE DETAIL OF WHICH IS NARRATED AT PAGE 13 & IN TDS WHEREAS ASSESSEE HAS NOT INCLUDED IN (BIKANER) 14 RS. 16168306 1044194 14 IN TABULAR FORM: (** PAGE NO. 13 - 14 ) IT IS NOTED THAT IN RESPECT OF BILL DATED 28.7.08 M/S RSMM LTD. RIGHTLY DID NOT DEDUCT TDS ON SERVICE TAX. HOWEVER IN RESPECT OF BILLS MENTIONED AT SR. NO. 1, 2 & 4 TDS WAS DEDUCTED ON SERVICE TAX OF RS. 1044194/ - AND ACCORDINGLY EVEN THE COMPONENT OF SERVICE TAX TREATED AS TURNOVER. HOWEVER AS DISCUSSED IN RESPECT OF SR. NO. 2 THE SERVICE TAX AMOUNT CANNOT BE CONSIDERED AS TURNOVER/ BUSINESS RECEIPT FOR THE APPELLANT AND THEREFORE THE APPELLANT HAS RIGHTLY NOT INCLUDED SUCH AMOUNT IN ITS TURNOVER. 5 ADD: EXCESS CREDIT ALLOWED BY PRINCIPAL IT IS STATED THAT THE APPELLANT RAISED 3 BILLS OF RS. 159019/ - , RS. 794206/ - & RS. 1412622/ - FOR TOTAL AMOUNT OF RS. 2365847/ - WHEREAS THE M/S RSMM LTD. ALLOWED CREDIT OF RS. 2407323/ - . IT IS STATED THAT EXCESS CREDIT OF RS. 41476/ - WAS ALLOWED BY M/S RSMM LTD. AND THAT SUCH EXCESS PAYMENT WAS NOT ACCOUNTED FOR AS RECEIPT BY THE APPELLANT. AS REGARDS SUCH DIFFERENCE OF RS. 41476/ - IT MAY BE NOTED THAT THE APPELLANT HAS RECEIVED SUCH AMOUNT THAT MAY BE DUE TO SOME ESCALATION IN RATES ETC. AND AS THE AMOUNT WAS ACTUALLY RECEIVED DURING THE YEAR UNDER CONSIDERATION AND THERE I S NOTHING ON RECORD FROM THE SIDE OF M/S RSMM LTD. THAT SUCH PAYMENT WAS WRONGLY MADE THEREFORE SUCH AMOUNT SHOULD DEFINITELY FORM PART OF THE TURNOVER/ RECEIPT. ACCORDINGLY THE RECEIPT/ TURNOVER OF THE APPELLANT WILL INCREASE BY RS. 41476/ - . AS REGARDS IT EMS OF SR. NO. 6, 7 & 8 FOR RS. 5788353, RS. 177984 & RS. 265102/ - WHICH IS NOTED THAT SUCH AMOUNT HAVE BEEN SHOWN AS RECEIPTS/ TURNOVER BY THE APPELLANT DURING A.Y. UNDER CONSIDERATION AND SPECIFIC REASONS AS TO WHY SUCH AMOUNT ARE TREATED AS BUSINESS REC EIPTS/ TURNOVER HAS BEEN FURNISHED BY THE APPELLANT DURING THE APPELLANT PROCEEDINGS. HOWEVER M/S RSMM LTD. HAVE NOT ACCOUNTED FOR TREATED SUCH AMOUNT AS TURNOVER/ RECEIPTS PERTAINING TO A.Y. 09 - 10. HOWEVER KEEPING IN VIEW THE FACT THAT SUCH AMOUNT ARE SHO WN AS TURNOVER BY ASSESSEE HIMSELF IN RESPECT OF A.Y. UNDER CONSIDERATION AND SUCH AMOUNT ARE PART OF THE TURNOVER ALREADY SHOWN BY THE APPELLANT IN THE BOOKS OF ACCOUNTS, THEREFORE NO ADVERSE INFERENCE CAN BE DRAWN IN AS MUCH AS THE TURNOVER ALREADY SHOWN BY THE APPELLANT NEED NOT BE REDUCED. IN BILL NO. 1, 2 & 3 41476 (VERIFIABLE FROM OUR LEDGER) 9686735 79826281 6 LESS: BILLS RAISED BY US DURING FY 08 - 09 BUT CONSIDERED BY PRINCIPAL IN NEXT FY (MARCH 09) 5788353 7 LESS: DEDUCTIONS MADE BY PRINCIPAL OUT OF BILLS RAISED BY THE ASSESSEE BILL NO. 13, 14, 15, 22 & 23 177984 (VERIFIABLE FROM OUT LEDGER) 8 LESS: RATE DIFF. BILLS NOT CONSIDERED BY PRINCIPAL BILL NO. 16 TO 21 265102 6231439 AMOUNT AS PER TDS CERTIFICATES 73594842 15 * * THE DETAILS FOR COLUMN NO.4 IS AS UNDER: - CHARGES SERVICE TAX TOTAL TDS DED. ON 1 BILL DATED 28.05.08 PAGE 10 OF COMPILATION 161807 19999 181806 2704868 PAGE 11 OF COMPILATION 808129 99885 908014 PAGE 12 OF COMPILATION 1434387 177661 1615048 TOTAL 2407323 297545 2704868 2 BILL DATED 18.06.08 PAGE 10 OF COMPILATION 545457 67418 612875 3105260 PAGE 11 OF COMPILATION 695519 85966 781485 PAGE 12 OF COMPILATION 1522695 188205 1710900 TOTAL 276371 341589 3105260 3 BILL DATED 28.07.08 PAGE 10 OF COMPILATION 152196 18812 171008 152196 PAGE 11 OF COMPILATION 591663 73130 664793 591663 PAGE 12 OF COMPILATION 2120868 2621139 2383007 2120868 TOTAL 2864727 354081 3218808 4 BILL DATED 08.09.08 PAGE 10 OF COMPILATION 771112 95309 866421 866421 PAGE 11 OF COMPILATION 1181742 146063 1327805 1327805 PAGE 12 OF COMPILATION 1324338 163688 1488026 1488026 TOTAL 3277192 405060 3682252 KEEPING IN VIEW THE ABOVE FACTS THE TURNOVER AS DECLARED BY THE ASSESSEE IS TO BE INCREASED BY RS. 41476/ - . THEREFORE ADDITION TO THE EXTENT OF RS. 41476/ - IS CONFIRMED. THE APPELLANT ACCORDINGLY GETS RELIEF OF RS. 8657482/ - . NOW THE DEPARTMENT IS IN APPEAL. 7 . LEARNED D.R. STRONGLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND FURTHER SUBMITTED THAT THE ASSESSEE DID NOT FILE ANY RECONCILIATION BEFORE THE ASSESSING OFFICER AND WRONGLY CLAIMED THAT M/S. RSMM LTD. WAS MAINTAINING THE BOOKS OF ACCOUNTS ON CASH BASIS WHERE AS THE AUDIT REPORT OF THE SAID COMPANY REVEALED THAT BOOKS OF ACCOUNTS WERE MAINTAINED ON MERCANTILE BASIS. THEREFORE, THE DIFFERENCE IN THE RECEIPT AS PER TDS CERTIFICATE AND AS RECORDED IN THE BOOKS OF ACCOUNTS OF THE 16 ASSESSEE WAS RIGHTLY TREATED BY THE ASSESSING OFFICER AS CONCEALED INCOME OF THE ASSESSEE AND ADDED TO ITS INCOME. IT WAS FURTHER STATED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN ALLOWING THE RELIEF TO THE ASSESSEE. 8 . IN HIS RIVAL SUBMISSIONS, LEARNED COUNSEL FO R THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE ASSESSING OFFICER WITHOUT CONSIDERING THE RECONCILIATION STATEMENT FURNISHED BY THE ASSESSEE, MADE THE ADDITION IN AN ARBITRARY MANNER AND THE LD. CIT(A) AFTER CONSIDERING THE FACTS IN RIGHT PERSPECTIVE , WAS FULLY JUSTIFIED IN DELETING THE ARBITRARY ADDITION MADE BY THE ASSESSING OFFICER. 9 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON R ECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THERE WAS A DIFFERENCE IN THE AMOUNT OF PAYMENTS AS MENTIONED IN TDS CERTIFICATE OF RSMM LTD. AND THE RECEIPTS SHOWN IN THE BOOKS OF ACCOUNTS MAINTAINED B Y THE ASSESSEE. HOWEVER, THE ASSESSEE EXPLAINED THE DIFFERENCE THROUGH RECONCILIATION STATEMENT WHICH WAS FORWARDED BY THE LD. CIT(A) TO THE ASSESSING OFFICER FOR HIS COMMENTS. THE ASSESSING OFFICER IN HIS REMAND REPORT ACCEPTED FEW MISTAKES , BUT DID NOT AGREED FULLY WITH THE EXP LANATION OF THE ASSESSEE. HE ACCEPTED THAT THE AMOUNT OF RS. 55,96,199/ - WAS WRONGLY CONSIDERED 17 IN RESPECT OF RS. 50,04, 040/ - RECEIVED FROM M/S. RSMM LTD. SIMILARLY, HE ALSO ACCEPTED THAT THERE WAS A MISTAKE IN THE AMOUNT RECEIVED FROM M/S. RSMM LTD. , BIKANER . ACCORDING TO THE ASSESSING OFFICER , THE PAYMENT MADE BY THE M/S. RSMM LTD. , JAISELMAR & BIKANER WAS AT RS. 7,35,94,842/ - INSTEAD OF RS. 7,88,38,504/ - MENTIONED IN THE TDS CERTIFICATE . THE ASSESSEE, HOWEVER, EXPLAINED THE REMAINING DIFFERENCE WHI CH HAS BEEN REPRODUCED BY THE LD. CIT(A) IN PARA 6 .7 OF THE IMPUGNED ORDER AND WE HAVE ALREADY EXTRACTED THE SAME IN FORMER PART OF THIS ORDER . FROM THE EXPLANATION OF THE ASSESSEE WHICH WAS THOROUGHLY EXAMINED ALONG WITH THE RECONCILIATION STATEMENT BY THE LD. CIT(A), THE ONLY DIFFERENCE REMAINED OF RS. 41,476/ - WHICH WAS THE EXCESS CREDIT ALLOWED BY M/S. RSMM LTD. AGAINST THE BIL L NOS. 1 , 2 & 3 . IN THE SAID BILLS , THE TOTAL AMOUNT RAISED BY THE ASSESSEE WAS RS. 23,65,847/ - WHEREAS M/S. RSMM LTD. HAD ALLOWED CREDIT OF RS. 24,07,323/ - , T HUS, THE DIFFERENCE WAS OF RS. 41,476/ - . THE SAID AMOUNT HAS BEEN SUSTAINED AS AN ADDITION BY THE LD. CIT(A) ON THE BASIS OF THE E XPL ANATION/RECONCILIATION STATEMEN T FURNISHED BY THE ASSESSEE WHICH WAS ALSO FORWARDED TO THE ASSESSING OFFICER FOR HIS COMMENTS. IN THE PRESENT CASE, NOTHING IS BROUGHT ON RECORD TO SUBSTANTIATE THAT THE EXPLANATION ALONG WITH RECONCILIATION STATEMENT FURNISHED BY THE ASSESSEE WAS INCORRECT . WE, THEREFORE, DO 18 NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A) ON THIS ISSUE. 10 . THE NEXT ISSUE VIDE GROUND NO. 2 RELATES TO THE DELETION OF ADDITION OF RS. 1,50,000 / - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OUT OF MISCELLANEOUS EXPENSES. 11 . FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS , NOTICED THAT THE ASSESSEE HAD DEBITED OPERATING EXPENSES AMOUNTING TO RS. 56,10,000/ - AND AN AMOUNT OF RS. 67,01,636/ - UNDER THE HEAD CRUSHING & LABOU R CHARGES . ACCOR DING TO THE ASSESSING OFFICER, THOSE EXPENSES WERE PAID AND CLAIMED ON THE BASIS OF SELF MADE VOUCHERS. THEREFORE, AUTHENT ICITY OF THOSE EXPENSES COULD NOT BE FULLY RELIED UPON. THE ASSESSING OFFICER M A DE AN ADHOC DISALLOWANCE OF RS. 1,50,000/ - . 12. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE ADDITION HAD BEEN MADE ON THE BASIS OF ASSUMPTIONS AND PRESUMPTIONS BASIS. IT WAS STATED THAT THE ASSESSEE MAINTAINED REGULAR BOOKS OF ACCOUNTS TOGETHER WITH SUPPORTING DOCUMENTARY EVIDENCES AND ALL THE RECEIPTS / PAYMENTS WERE FULLY VOUCHED. IT WAS EXPLAINED THAT THE AREA OF OPERATION AND WORK INVOLVED 19 WAS ALSO LARGELY DEALING IN UNEDUCATED, ILLITERATE PERSONS BELONGING TO RURAL AREAS . THEREFORE, THE EXPENSES WERE TO BE INCURRED AND CLAIMED ON THE BASIS OF SELF PREPARED VOUCHERS IN RELATION TO LABOUR ORIENTED EXPENDITURE . IT WAS CONTENDED THAT THE GROSS PROFIT RATE OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION WAS AT 7.12% WHEREAS THE SAME W ERE AT 3.25% AND 3.47% IN THE A.YS. 2008 - 09 & 2007 - 08 RESPECTIVELY. IT WAS STATED THAT AS THE TRADING RESULTS WERE BETTER AS COMPARED TO THE PRECEDING YEARS, NO ADDITION WAS WARRANTED. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: - I) CIT VS. BOTTOMLINA INDUSTRIES (26 TW 205) II) MUKTARAM AND PARTY VS. DCIT (30 TW 164) III) CIT VS. DALMIA CEMENT (121 TAXMAN 706) 13 THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, OBSERVED THAT THAT THE ADDITION MADE BY THE ASSESSING OFFICER WAS OF GENERAL AND ROUTINE NATURE AND NO SPECIFIC INSTANCE OF WRONG CLAIM OF ANY EXPENDITURE OR BOGUS CLAIM WAS CITED . HE FU RTHER OBSERVED THAT THE ASSESSING OFFICER HAD NOT MADE ANY COMPARISON OF SUCH EXPENSES CLAIMED DURING THIS YEAR VIS - - VIS CLAIMED IN EARLIER YEARS. THEREFORE, THE ADDITION WAS SIMPLY MADE ON ASSUMPTION AND PRESUMPTION BASIS. HE, ACCORDINGLY , DELETED THE IMPUGNED ADDITION. NOW THE DEPARTMENT IS IN APPEAL. 20 14 WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE GROSS PROFIT RATE DECLARED BY THE ASSESSEE WAS PROGRESSIVE IN COMPARISON TO THE PRECEDING YEARS AND THE ASSESSING OFFICER HAD NOT POINTED OUT ANY SPECIFIC INSTANCE WHERE THE EXPENSES WERE NOT INCURRED FOR THE BUSINESS PURPOSES OR CLAIM OF THE ASSESSEE WAS BOGUS AND NON - GENUINE. THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER ON THE BASIS OF ASSUMPTION AND PRESUMPTION WAS RIGHTLY DELETED BY THE LD. CIT(A) . WE DO NOT SEE ANY INFIRMITY IN THE IMPUGNED ORDER ON THIS ISSUE. A CCORDINGLY , DO NOT SEE ANY MER I T IN THIS GROUND OF THE DEPARTMENT AL AP PEAL. 15 IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISSED . ( ORDER PRONOUNCED IN THE COURT ON 15 TH SEPTEMBER , 201 4) . S D/ - SD/ - ( HARI OM MARATHA ) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 15 TH SEPTEMBER , 201 4 . VR/ - 21 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD. CIT 4. THE CIT(A) 5. THE D.R SR. PRIVATE SECRETARY , ITAT, JODHPUR .