Narayan Powertech Pvt. Ltd., Baroda V. The Dy.CIT.,Circle-4(1), Baroda

ITA 90/AHD/2009

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6876 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 24-11-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 09-01-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: M J SHAH
• Keywords: Fair market value; Bad and doubtful debts
• Section: 80HHC; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, D BENCH, AHMEDABAD BEFORE SHRI D. K. TYAGI, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO.90, 91/AHD/2009 (ASSESSMENT YEARS 2004-05 & 2005-06) M/S. NARAYAN POWERTECH P. LTD., 102, YOGI DARSHAN APT., 13/A, NOOTAN BHARAT SOC., ALKAPURI, BARODA VS. DCIT, CIRCLE 4(1), BARODA PAN/GIR NO. : AAACN6792R (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI M J SHAH, AR RESPONDENT BY: SHRI B L YADAV, DR DATE OF HEARING: 24.11.2011 DATE OF PRONOUNCEMENT: 09.12.2011 O R D E R PER SHRI A. K. GARODIA, AM:- THESE ARE ASSESSEES APPEALS DIRECTED AGAINST THE COMMON ORDER OF LD. CIT(A) - III, BARODA DATED 16.10.2008 FOR THE A SSESSMENT YEAR 2004- 05 AND 2005-06. 2. FIRST, WE DECIDE THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2004-05 IN ITA.NO. 90/AHD/2009. 3. GROUND NO.1 OF THE ASSESSEE IS AS UNDER: 1.0 ADDITION DUE TO DISALLOWANCE OF BAD DEBTS OF RS.75.000/-: (PARA 4 TO 4.1 OF THE ASSTT .ORDER) (PARA 2 TO 2.3 OF THE APPELLATE ORDER) 1.1 ON THE FACTS AND CIRCUMSTANCES OF YOUR APPELL ANT'S CASE AND IN LAW THE ID. CIT (APPEALS) HAS ERRED IN CONFIRMIN G THE ADDITION OF RS.75,000/- AS BAD DEBTS, ON THE GROUND THAT YOU R APPELLANT HAS NOT SUBMITTED ANY EVIDENCE TO PROVE THAT THE DEBT H AD BECOME BAD. I.T.A.NO.90 ,91 /AHD/2009 2 1.2 YOUR APPELLANT SAYS AND SUBMITS THAT THE ID. CI T(A) OUGHT TO HAVE HELD THAT W.E.F. 1-4-1989 AS PER THE AMENDED S .36(L)(VII) OF THE ACT, NO EVIDENCE IS REQUIRED IN PROOF OF A DEBT BECOMING BAD, ONLY REQUIREMENT IS THAT SUCH DEBT SHOULD BE WRITTE N OFF IN THE ACCOUNTS AS IRRECOVERABLE AND PRAYS THAT THE HON'BL E TRIBUNAL BE PLEASED TO HOLD SO NOW AND DELETE THE IMPUGNED ADDI TION. 4. IT WAS SUBMITTED BY THE LD. A.R. THAT NOW, THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGEMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF TRF LTD. AS REPORTED IN 323 ITR 397. LD. D.R. SUPPORTED THE ORDER OF AUSTERITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW AND THE JUDGMENT OF HONBLE APEX COURT CITED BY THE LD. A.R . OF THE ASSESSEE. WE FIND THAT AS PER THE ASSESSMENT ORDER, THERE IS NO DISPUTE REGARDING THIS ASPECT THAT THE BAD DEBTS IN QUESTION WERE ACT UALLY WRITTEN OFF BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT. WE ALSO FIND THA T THERE IS NO DISPUTE REGARDING THE COMPLIANCE OF THE PROVISIONS OF SECTI ON 36(2) OF THE ACT AND THE ONLY OBJECTION OF THE A.O. WAS THAT THE ASSESSE E HAS NOT ESTABLISHED THAT THE DEBTS HAD BECOME BAD. NOW, THIS ASPECT IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF HONBLE A PEX COURT RENDERED IN THE CASE OF TRF LTD. (SUPRA) AND HENCE, THE ADDI TION MADE BY THE A.O. CANNOT BE SUSTAINED. WE, THEREFORE, DELETE THE SAM E. GROUND NO. 1 OF THE ASSESSEE STANDS ALLOWED. 6. GROUND NO.2 OF THE ASSESSEE IS AS UNDER: 2.0 ADDITION DUE TO DISALLOWANCE OF CAR RENT U/S 40A(2)(B) OF THE ACT (PARA 5 TO 5.1 OF THE ASSTT .O RDER) (PARA 3 TO 3.3 F THE APPELLATE ORDER) 2.1 ON THE FACTS AND CIRCUMSTANCES OF YOUR APPELLAN T'S CASE AND IN LAW, OUT OF THE CAR RENT PAID, THE ID. CIT (APPEALS ) HAS ERRED IN CONFIRMING THE ADDITION OF RS.71,000/- U/S 40A(2)(B ) OF THE ACT, ON THE GROUND THAT IT IS EXCESSIVE OR UNREASONABLE. I.T.A.NO.90 ,91 /AHD/2009 3 2.2 YOUR APPELLANT SAYS AND SUBMITS THAT CONSIDERIN G THE FAIR MARKET VALUE OF THE FACILITY IN QUESTION AND THE LE GITIMATE NEEDS OF ITS BUSINESS AND THE BENEFITS DERIVED BY OR ACCRUIN G TO IT, THE PAYMENTS MADE BY YOUR APPELLANT TOWARDS CAR RENT IS NEITHER EXCESSIVE NOR UNREASONABLE BY ANY STANDARD AND PRAY S THAT THE HON'BLE TRIBUNAL BE PLEASED TO HOLD SO NOW AND DELE TE THE IMPUGNED ADDITION. 7. IT WAS SUBMITTED BY THE LD. A.R. THAT THIS ISSUE WAS DECIDED BY THE LD. CIT(A) BY FOLLOWING THE JUDGMENT OF HONBLE BOM BAY HIGH COURT RENDERED IN THE CASE OF CIT VS SATRUNJAY DIAMONDS A S REPORTED IN 261 ITR 258 AS PER WHICH, IT WAS HELD THAT THE ONUS IS ON THE ASSESSEE U/S 40A(2)(B) TO PROVE THAT THE PAYMENT MADE IS REASONA BLE. IT WAS SUBMITTED THAT TILL THE STAGE OF LD. CIT(A), THE AS SESSEE WAS UNDER THIS IMPRESSION THAT THE ONUS IS ON THE REVENUE TO PROVE THAT THE EXPENSES INCURRED BY THE ASSESSEE ARE EXCESSIVE. IT WAS THE SUBMISSION THAT THE MATTER MAY BE RESTORED BACK TO THE FILE OF THE A.O. FOR A FRESH DECISION AFTER ALLOWING THE ASSESSEE REASONABLE OPPORTUNITY TO ESTABLISH HIS CASE REGARDING REASONABLENESS OF THE PAYMENT MADE BY THE ASSESSEE. 8. LD. D.R. SUPPORTED THE ORDERS OF AUTHORITIES BEL OW. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. WE FIND THAT IT IS NOTED BY THE A.O. IN PARA 5.1 O THE ASSE SSMENT ORDER THAT THE ASSESSEE WAS ASKED TO PROVE REASONABLENESS OF PAYME NT MADE ON ACCOUNT OF VEHICLE RENT BUT THE ASSESSEE FAILED TO OFFER AN Y SATISFACTORY EXPLANATION OR ANY COMPARISON OF OTHER PERSON IN THIS REGARD. LD. CIT(A) HAS STATED IN HIS ORDER THAT INCOME TAX DISARMAMENT HIRES BEST OF CARS FOR LESS THAN RS.25,000/- PER MONTH WHICH ALSO INCLUDES MAINTENAN CE AND DRIVERS SALARY AND, THEREFORE, THE PAYMENT MADE BY THE ASSE SSEE FOR VEHICLE HIRING IS EXCESSIVE. IN OUR CONSIDERED OPINION, ONE MORE OPPORTUNITY MAY BE ALLOWED TO THE ASSESSEE IN THE INTEREST OF JUSTICE TO PROVE ITS CASE THAT THE PAYMENT MADE BY IT TO THE RELATED PERSON FOR HIRING THE CAR IS NOT I.T.A.NO.90 ,91 /AHD/2009 4 EXCESSIVE. WE, THEREFORE, SET ASIDE THE ORDER OF L D. CIT(A) ON THIS ISSUE AND RESTORE THE MATTER BACK TO THE FILE OF THE A.O. FOR A FRESH DECISION AFTER ALLOWING REASONABLE OPPORTUNITY OF BEING HEAR D TO THE ASSESSEE. GROUND NO.2 IS ALLOWED FOR STATISTICAL PURPOSES. 10. GROUND NO.3 IS AS UNDER: 3.0 EXCLUSION OF BANK INTEREST AND DUTY DRAW BACK FOR DEDUCTION U/S 80-IB (PARA 6 TO 6.3 OF THE ASSTT .ORDER) (PARA 4 TO 4.3 OF THE APPELLATE ORDER) 3.01 ON THE FACTS AND CIRCUMSTANCES OF YOUR APPEL LANT'S CASE AND IN LAW THE ID. CIT (APPEALS) HAS ERRED IN CONFIRMIN G THAT INTEREST ON MARGIN MONEY DEPOSIT WITH BANK AND DUTY DRAW BAC K ARE REQUIRED TO BE EXCLUDED FROM THE PROFITS FOR COMPUT ING DEDUCTION U/S 80-IB OF THE ACT. 3.02 YOUR APPELLANT SAYS AND SUBMITS THAT THE ID . CIT(A) OUGHT TO HAVE HELD THAT INTEREST ON MARGIN MONEY DEPOSIT WIT H BANK AND DUTY DRAW BACK ARE INCOME DERIVED FROM AN INDUSTRIA L UNDERTAKING AND ELIGIBLE FOR DEDUCTION U/S 80-IB OF THE ACT AND PRAYS THAT THE HON'BLE TRIBUNAL BE PLEASED TO HOLD SO NOW AND DIRE CT THE LD. A.O. TO ALLOW DEDUCTION U/S 80-IB ON THE IMPUGNED INTERE ST AND DUTY DRAW BACK. 11. IT WAS SUBMITTED BY THE LD. A.R. THAT TWO ISSUE S ARE INVOLVED. ONE ISSUE IS ALLOWABILITY OF DEDUCTION U/S 80-IB IN RES PECT OF INCOME ON ACCOUNT OF DUTY DRAWBACK AND THE 2 ND ISSUE INVOLVED IS ALLOWABILITY OF DEDUCTION U/S 80-IB IN RESPECT OF INTEREST INCOME. IT WAS FAIRLY CONCEDED BY HIM THAT THE 1 ST ISSUE IS COVERED AGAINST THE ASSESSEE BY THE RECEN T JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF LIBERTY INDIA LTD. AS REPORTED IN 317 ITR 218. REGARDING THE 2 ND ISSUE, IT WAS SUBMITTED THAT THIS IS ALSO COVERED AGAINST HE ASSE SSEE BY THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF CIT VS STERLING FOODS LTD. AS REPORTED IN 237 ITR 579. IN VIEW OF THESE SUBMISSI ONS OF LD. A.R. OF THE ASSESSEE, THIS GROUND OF THE ASSESSEE IS REJECTED. 12. GROUND NO.4 OF THE ASSESSEES APPEAL READS AS U NDER: I.T.A.NO.90 ,91 /AHD/2009 5 4.0 DEDUCTION OF AMOUNT ALLOWABLE U/S 80-IB FOR COMPUTING DEDUCTION U/S 80HHC OF THE ACT (PARA 6.3 OF THE ASSTT .ORDER) (PARA 5 TO 5.3 OF THE APPELLAT E ORDER) 4.1 ON THE FACTS AND CIRCUMSTANCES OF YOUR APPELL ANT'S CASE AND IN LAW THE ID. CIT (APPEALS) HAS ERRED IN HOLDING T HAT THE AMOUNT ALLOWABLE AS DEDUCTION U/S 80-IB IS REQUIRED TO BE REDUCED FOR COMPUTING DEDUCTION U/S 80HHC OF THE ACT AND ACCORD INGLY ERRED IN DIRECTING THE ID. A.O. TO REDUCE 80-IB DEDUCTION WHILE COMPUTING DEDUCTION U/S 80HHC OF THE ACT. 4.2 YOUR APPELLANT SAYS AND SUBMITS THAT THE DEDU CTION T ALLOWABLE U/S 80-IB CANNOT BE REDUCED FROM PROFITS FOR THE PURPOSE OF COMPUTING DEDUCTION U/S 80HHC OF THE ACT, SINCE BOTH THE PROVISIONS ARE INDEPENDENT OF EACH OTHER AND THEREF ORE, THE SAME ARE AVAILABLE SIMULTANEOUSLY AND WITHOUT ONE INFLUE NCING THE OTHER AND PRAYS THAT THE HON'BLE TRIBUNAL BE PLEASED TO H OLD SO NOW AND DIRECT THE LD. A.O. TO ALLOW DEDUCTION U/S 80HHC AN D 80-IB ACCORDINGLY. 13. IT WAS SUBMITTED BY THE LD. A.R. OF THE ASSESSE E THAT NOW THERE IS A RECENT JUDGMENT OF HONBLE BOMBAY HIGH COURT ON THI S ISSUE WHICH IS RENDERED IN THE CASE OF ASSOCIATED CAPSULES PVT. LT D. VS DCIT AS REPORTED IN 332 ITR 42 AND IN THAT CASE, HONBLE BO MBAY HIGH COURT HAS DULY CONSIDERED ALL THE AVAILABLE TRIBUNAL DECISION S BEING THE DECISION RENDERED IN THE CASE OF ACIT VS HINDUSTAN MINT AND AGRO PRODUCTS P. LTD. AS REPORTED IN 315 (A.T.) 0401 (ITAT DEL.) AND THE OTHER TRIBUNAL DECISION RENDERED IN THE CASE OF ACIT VS RAGINI GAR MENTS AS REPORTED IN 294 ITR (A.T.) 15. IT WAS ALSO SUBMITTED THAT OTHE R AVAILABLE JUDGEMENTS OF VARIOUS HONBLE HIGH COURTS AND HONBLE SUPREME COURT WERE ALSO CONSIDERED BY THE HONBLE BOMBAY HIGH COURT AND HEN CE, THE MATTER MAY BE RESTORED BACK TO THE FILE OF THE A.O. FOR A FRESH DECISION IN THE LIGHT OF THIS LATEST DECISION OF HONBLE BOMBAY HIG H COURT. 14. LD. D.R. OF THE REVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUS ED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW AND THE I.T.A.NO.90 ,91 /AHD/2009 6 JUDGEMENT OF HONBLE BOMBAY HIGH COURT CITED BY THE LD. A.R. WE FIND THAT THIS IS A LATEST JUDGMENT WHICH WAS RENDERED O N 10.01.2011 AFTER CONSIDERING ALL THE AVAILABLE DECISIONS OF THE TRIB UNAL, VARIOUS HONBLE HIGH COURTS AND HONBLE APEX COURT. HENCE, WE FEEL THAT THIS MATTER SHOULD GO BACK TO THE FILE OF THE A.O. FOR A FRESH DECISION IN THE LIGHT OF THIS DECISION OF HONBLE BOMBAY HIGH COURT AND HENC E, WE SET ASIDE THE ORDER OF LD. CIT(A) ON THIS ISSUE AND RESTORE THE M ATTER BACK TO THE FILE OF THE A.O. FOR A FRESH DECISION IN THE LIGHT OF THIS JUDGEMENT OF HONBLE BOMBAY HIGH COURT RENDERED IN THE CASE OF ASSOCIATE D CAPSULES PVT. LTD. (SUPRA) AFTER PROVIDING ADEQUATE OPPORTUNITY O F BEING HEARD TO THE ASSESSEE. GROUND NO.4 IS ALLOWED FOR STATISTICAL P URPOSES. 16. NOW, WE TAKE UP THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06 IN ITA.NO. 91/AHD/2009. THE GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL ARE AS UNDER: 1.0 ADDITION DUE TO DISALLOWANCE OF CAR RENT U/S 40A(2WRT OF THE ACT (PARA 2 TO 2.1 OF THE ASSTT .OR DER) (PARA 3 TO 3.3 OF THE APPELLATE ORDER) 1.1 ON THE FACTS AND CIRCUMSTANCES OF YOUR APPEL LANT'S CASE AND IN LAW, OUT OF THE CAR RENT PAID, THE ID. CIT (APPE ALS) HAS ERRED IN CONFIRMING THE ADDITION OF RS.96,,000/- U/S 40A(2)( B) OF THE ACT, ON THE GROUND THAT IT IS EXCESSIVE OR UNREASONABLE. 1.2 YOUR APPELLANT SAYS AND SUBMITS THAT CONSIDER ING THE FAIR MARKET VALUE OF THE FACILITY IN QUESTION AND THE LE GITIMATE NEEDS OF ITS BUSINESS AND THE BENEFITS DERIVED BY OR ACCRUIN G TO IT, THE PAYMENTS MADE BY YOUR APPELLANT TOWARDS CAR RENT IS NEITHER EXCESSIVE NOR UNREASONABLE BY ANY STANDARD AND PRAY S THAT THE HON'LBLE TRIBUNAL BE PLEASED TO HOLD SO NOW AND DEL ETE THE IMPUGNED ADDITION. 2.0 EXCLUSION OF DUTY DRAW BACK FOR DEDUCTION U/S 80-IB (PARA 4.1 OF THE ASSTT .ORDER) (PARA 4.3 F THE APPELLATE ORDER) 2.1 ON THE FACTS AND CIRCUMSTANCES OF YOUR APPELLAN T'S CASE AND IN LAW THE ID. CIT (APPEALS) HAS ERRED IN CONFIRMING T HAT AMOUNT OF I.T.A.NO.90 ,91 /AHD/2009 7 DUTY DRAW BACK IS REQUIRED TO BE EXCLUDED FROM THE PROFITS FOR COMPUTING DEDUCTION U/S 80-IB OF THE ACT. 2.2 YOUR APPELLANT SAYS AND SUBMITS THAT THE ID. CIT(A) OUGHT TO HAVE HELD THAT AMOUNT OF DUTY DRAW BACK IS INCOME D ERIVED FROM AN INDUSTRIAL UNDERTAKING AND ELIGIBLE FOR DEDUCTIO N U/S 80-IB OF THE ACT AND PRAYS THAT THE HON'BLE TRIBUNAL BE PLEA SED TO HOLD SO NOW AND DIRECT THE LD. A.O. TO ALLOW DEDUCTION U/S 80-IB ON THE IMPUGNED AMOUNT OF DUTY DRAW BACK. 3.0 ADDITION DUE TO DISALLOWANCE OUT OF OFFICE EXPENSES (PARA 4.2 OF THE ASSTT .ORDER) (PARA 9.3 F THE APPELLATE ORDER) 3.1 ON THE FACTS AND CIRCUMSTANCES OF YOUR APP ELLANT'S CASE AND IN LAW, THE ID. CIT (APPEALS) HAS ERRED IN CONFIRMI NG THE ADDITION OF RS.62,410/- OUT OF OFFICE EXPENSES ON THE GROUND THAT THERE IS HUGE INCREASE IN THE EXPENSES COMPARED TO THE LAST YEAR AND MOST OF THE EXPENSES WERE INCURRED IN CASH. 3.2 YOUR APPELLANT SAYS AND SUBMITS THAT FOR T HE IMPUGNED EXPENDITURE, FULL DETAILS WHEREOF ARE ON RECORD, WA S INCURRED BY IT IN ITS CAPACITY AS A BUSINESS HOUSE WHOLLY AND EXCL USIVELY FOR THE PURPOSES OF ITS BUSINESS AND THAT IT DOES NOT FALL WITHIN THE MISCHIEF OF SECTION 37 OF THE ACT, AND PRAYS THAT THE HON'BL E TRIBUNAL BE PLEASED TO HOLD SO NOW AND DELETE THE IMPUGNED ADDI TION. 17. IT WAS SUBMITTED BY BOTH THE SIDES THAT GROUND NO.1 OF THIS YEAR IS IDENTICAL TO GROUND NO.2 IN ASSESSMENT YEAR 2004-05 AND GROUND NO.2 OF THIS YEAR IS IDENTICAL TO GROUND NO.3 IN ASSESSMENT YEAR 2004-05 AND BOTH THESE GROUNDS MAY BE DECIDED ON SIMILAR LINES AS PE R THE DECISION IN ASSESSMENT YEAR 2004-05. 18. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND WE FIN D THAT THE GROUND NO.1 OF THIS YEAR IS IDENTICAL TO GROUND N O .2 IN ASSESSMENT YEAR 2004-05 AND SIMILARLY, GROUND NO.2 OF THIS YEAR IS SIMILAR TO GROUND NO.3 IN ASSESSMENT YEAR 2004-05. IN ASSESSMENT YEAR 200 4-05, THE ISSUE REGARDING DISALLOWANCE U/S 40A(2)(B) OUT OF CAR REN T HAD BEEN RESTORED BACK BY US TO THE FILE OF THE A.O. FOR A FRESH DECI SION. ACCORDINGLY, IN THIS YEAR ALSO, GROUND NO.1 IS ALLOWED FOR STATISTI CAL PURPOSE AND THIS I.T.A.NO.90 ,91 /AHD/2009 8 ISSUE IS RESTORED BACK TO THE FILE OF THE A.O. FOR A FRESH DECISION WITH SIMILAR DIRECTION. SIMILARLY, GROUND NO.2 OF THIS YEAR IS IDENTICAL TO GROUND NO.3 OF THE ASSESSMENT YEAR 2004-05. IN THA T YEAR, THIS ISSUE WAS DECIDED AGAINST THE ASSESSEE BY FOLLOWING THE JUDGM ENT OF HONBLE APEX COURT RENDERED IN THE CASE OF LIBERTY INDIA LTD. (S UPRA). ACCORDINGLY, IN THIS YEAR ALSO, THIS ISSUE IS DECIDED AGAINST THE A SSESSEE. GROUND NO.2 OF THE ASSESSEE IS REJECTED. 19. REGARDING GROUND NO.3, IT WAS SUBMITTED BY THE LD. A.R. THAT AD- HOC DISALLOWANCE WAS MADE BY THE A.O. TO THE EXTENT OF 10% OF THE TOTAL OFFICE EXPENSES SIMPLY ON THIS BASIS THAT THERE IS HUGE INCREASE OF EXPENSES AS COMPARED TO THE LAST YEAR AND MOST OF E XPENSES WERE INCURRED IN CASH. IT WAS SUBMITTED THAT LD. CIT(A) HAS REST RICTED THE DISALLOWANCE TO THE EXTENT OF 50% OF THE DISALLOWANCE MADE BY TH E A.O. BUT SINCE ALL THE EXPENSES ARE SUPPORTED BY VOUCHERS, NO DISALLOW ANCE IS CALLED FOR. LD. D.R. OF THE REVENUE SUPPORTED THE ORDERS OR AUT HORITIES BELOW. 20. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED T HE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. WE FIND THAT IT IS NOTED BY THE A.O. IN PARA 4.2 OF THE ASS ESSMENT ORDER THAT THE ASSESSEE HAS DEBITED OFFICE EXPENSES AMOUNTING TO R S.12.48 LACS IN THIS YEAR AS AGAINST RS.8.50 LACS IN THE IMMEDIATELY PRE CEDING YEAR. IT IS ALSO NOTED BY THE A.O. THAT 99% OF THE EXPENDITURE WAS I NCURRED IN CASH AND PROPER BILLS AND VOUCHERS WERE NOT MAINTAINED BY TH E ASSESSEE. BEFORE US, THE ASSESSEE HAS NOT PRODUCED ANY COMPARATIVE C HART OF THE EXPENSES INCURRED IN THE PRESENT YEAR AND IN THE PRECEDING Y EAR. CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE FEE L THAT SOME DISALLOWANCE IS CALLED FOR BUT WE FEEL THAT THE DIS ALLOWANCE CONFIRMED BY THE LD. CIT(A) IS EXCESSIVE IN OUR CONSIDERED OPINI ON AND HENCE, WE RESTRICT THE DISALLOWANCE TO 50% OF THE DISALLOWANC E CONFIRMED BY THE LD. CIT(A). THIS GROUND OF THE ASSESSEE IS PARTLY ALLO WED. I.T.A.NO.90 ,91 /AHD/2009 9 21. IN THE RESULT, THIS APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED IN THE TERMS INDICATED ABOVE. 22. IN THE COMBINED RESULT, BOTH THE APPEALS OF THE ASS ESSEE ARE PARTLY ALLOWED. 23. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD/- SD/- (D. K. TYAGI) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP/*DKP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE /TRUE COPY/ AR,ITAT,AHMEDABAD 1. DATE OF DICTATION. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S. 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. ..