Sh. Sarbjit Singh Kandhari, Patiala V. JCIT, Patiala

ITA 905/CHANDI/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63867 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 01-09-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Assessee Lawyers: K P BAJAJ
• Keywords: Principle of natural justice; Notional interest
• Section: 40A(3); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.905/CHD/2009 (ASSESSMENT YEAR:2006-07) SH. SARBJIT SINGH KANDHARI, VS. THE J.C.I.T., 3-BHUPINDRA ROAD, RANGE PATIALA, PATIALA. PATIALA. PAN: AARPG3936G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.P.BAJAJ RESPONDENT BY : SMT.JAISHREE SHARMA, DR DATE OF HEARING : 23.07.2012 DATE OF PRONOUNCEMENT : 09.08.2012 O R D E R PER SUSHMA CHOWLA, J.M. : THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS), PATIALA DATED 29.06.2009 RELATING TO ASSESSMENT YEAR 2006-07 AGAINST THE ORD ER PASSED U/S 143(3) OF INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE REA D AS UNDER: 1. THAT THE ID. C.I.T(A) HAS ERRED IN UPHOLDING TH E DISALLOWANCE OF RS.2,79,000/- ON ACCOUNT OF AMOUNT EMBEZZLED BY THE EMPLOYEE WHICH WAS DULY WRITTEN OFF IN THE BOOKS OF ACCOUNT. 2. THAT THE ID. COMMISSIONER OF INCOME-TAX HAS ERRED I N UPHOLDING THE DISALLOWANCE ON ACCOUNT OF PAYMENT OF COMMISSIO N ON THE BASIS OF STATEMENT OF JASMEET SINGH WITHOUT RIGHT O F CROSS EXAMINATION. 3. THAT THE ID. CIT(A) HAS ERRED IN UPHOLDING THE DISA LLOWANCE ON ACCOUNT OF NOTIONAL INTEREST TO THE EXTENT OF RS.1, 25,590/- BY WRONGLY REJECTING THE EXPLANATION FILED BY THE ASSE SSEE. 4. THAT THE ID. CIT(A) IS NOT JUSTIFIED IN UPHOLDING THE DISALLOWANCE ON ACCOUNT OF ALLEGED CASH PAYMENTS EX CEEDING RS. 20,000/- IN VIOLATION OF THE PROVISIONS OF SECT ION 40A(3). 2 5. THAT THE ID. CIT(A) HAS ERRED IN LAW AND ON FACTS I N UPHOLDING THAT TAX WAS DEDUCTIBLE ON LEASE RENT PAID BY THE A SSESSEE ALTHOUGH SECTION 194-1 CAME ON THE STATUTE BOOK W.E.F 01.06.2007 AND CONSEQUENTLY ALSO UPHOLDING THE DISA LLOWANCE, RENT PAID AT RS. 80,39,000/- 3. THE ASSESSEE HAS RAISED FOLLOWING ADDITIONAL GR OUND OF APPEAL: THAT NO PART OF THE HIRE CHARGES OF TRUCKS BEING PAYABLE AS ON 31.03.2006, THE DISALLOWANCE FOR NON DEDUCTION OF TAX COULD NOT BE MADE IN VIEW OF THE SPECIAL BENCH DECISION OF HON'BLE VISHAKHAPATNAM TR IBUNAL, REPORTED IN (2012) 136 ITD 23 (SB) 4. IN RESPECT OF ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSESSEE, THE CONTENTION WAS THAT THE HON'BLE SPECI AL BENCH OF VISHAKHAPATNAM REPORTED IN ACIT VS. MERILYN SHIPPIN G & TRANSPORTS[136 ITD 23(SB)(VISHAKHAPATNAM)] HAD REND ERED THE DECISION MUCH AFTER THE FILING OF APPEAL AND THE GROUND BEIN G LEGAL MAY BE PERMITTED TO BE RAISED. IN VIEW OF THE DECISION, O F THE SPECIAL BENCH OF VISHAKHAPATNAM, WE ADMIT ADDITIONAL GROUND OF APPEA L RAISED BY THE ASSESSEE AND PROCEED TO DISPOSE OFF THE PRESENT APP EAL. 5. THE GROUND NO.1 RAISED BY THE ASSESSEE IS IN REL ATION TO THE DISALLOWANCE MADE OF RS.2,79,000/-. 6. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT T HE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRANSPORTATION AND HAD E MPLOYED SHRI MANMOHAN SINGH FOR COLLECTION OF TRANSPORTATION CHA RGES FROM VARIOUS CUSTOMERS. THE AMOUNT TOTALING RS.5,41,000 /- WAS IDENTIFIED CUSTOMER WISE AND WAS FILED ALONGWITH DE TAILS OF CHEQUES PENDING REALIZATION VIDE LETTER DATED 30.10.2008 BE FORE THE ASSESSING OFFICER. THE SAID DETAILS ARE REPRODUCED UNDER PARA 4.4 AT PAGE 3 OF THE APPELLATE ORDER. THE CASE OF THE ASSESSEE WAS THAT THE AMOUNT WAS COLLECTED BY THE SAID EMPLOYEE FROM THE CUSTOMERS BUT WAS MISAPPROPRIATED BY HIM AND DESPITE BEST OF EFFORTS, SUM OF 3 RS.2,79,000/- COULD NOT BE RECOVERED AND THE SAME W AS WRITTEN OFF IN THE BOOKS OF ACCOUNT AND CLAIMED AS AN EXPENDITU RE. THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSE E IN VIEW OF NON FILING OF FIR AND ALSO NON FURNISHING OF DOCUMENTAR Y EVIDENCE TO PROVE THAT THE AMOUNT WAS MISAPPROPRIATED BY THE EM PLOYEE AND ALSO NON FURNISHING OF THE DETAILS OF CUSTOMERS FRO M WHOM THE AMOUNT WAS RECOVERED. 7. THE CIT (APPEALS) UPHELD THE ORDER OF THE ASSESS ING OFFICER VIDE PARA 4.7. 8. THE LEARNED A.R. FOR THE ASSESSEE POINTED OUT TH AT THE REQUISITE DETAILS WERE FURNISHED BEFORE THE ASSESSI NG OFFICER UNDER WHICH IT WAS SHOWN UNDER THE HEAD CHEQUES PENDING R EALIZATION FOR THE PAST SEVERAL YEARS I.E. STARTING FROM ASSESSMEN T YEAR 1999-2000 AND ONLY A SUM OF RS.2,56,243/- WAS RECOVERED IN FI NANCIAL YEAR 2003-04 AND THE BALANCE DUE I.E. RS.2,79,000/- WAS WRITTEN OFF DURING THE YEAR UNDER CONSIDERATION. OUR ATTENTION WAS DRAWN TO THE COMMUNICATION PLACED AT PAGES 60 AND 61 OF THE PAPER BOOK UNDER WHICH THE SAID REPLY WAS FILED BEFORE THE ASS ESSING OFFICER ALONGWITH ANNEXURES AT PAGES 64 AND 65 OF THE PAPER BOOK. 9. THE LEARNED D.R. FOR THE REVENUE PLACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW AND POINTED OUT THAT TH E ASSESSEE HAD FAILED TO PRODUCE ANY DOCUMENTS OR CORRESPONDENCE T O PROVE ITS CASE. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE ADMITTEDLY WAS REFLECTING SUM OF RS.5, 41,000/- AS THE AMOUNT RECEIVABLE PARTY-WISE ON ACCOUNT OF CHEQUES PENDING REALIZATION. THE CASE OF THE ASSESSEE IS THAT IT H AD EMPLOYED ONE SHRI MANMOHAN SINGH WHO HAD COLLECTED THE SAID PAYM ENTS FROM THE PARTIES AND THE DD NUMBERS AND DATE OF ISSUE OF DDS FROM THE RESPECTIVE PARTIES TOTALING RS.5,41,000/- WAS SHOWN IN ITS BOOKS OF 4 ACCOUNT ENDING 31.3.2000 AND WAS ALSO CARRIED FORWA RD FROM YEAR TO YEAR. THE SAID CHEQUES WERE COLLECTED BY THE EMPLO YEE AND WERE MISAPPROPRIATED AND ON EFFORTS BEING MADE A SUM OF RS.2,56,243/- DUE FROM M/S GOLDEN ERA TRANSPORT WAS RECOVERED. T HE BALANCE SUM OF RS.2,79,000/- WAS THE AMOUNT WRITTEN OFF BY THE ASSESSEE IN THE FINANCIAL YEAR 2005-06 I.E. THE YEAR UNDER APPE AL. THE EXPLANATION IN THIS REGARD ALONGWITH ENTRIES MADE I N THE BOOKS OF ACCOUNT WERE FURNISHED BEFORE THE ASSESSING OFFICER AS IS EVIDENT FROM THE REPLY FILED BEFORE THE ASSESSING OFFICER P LACED AT PAGES 60 AND 61 OF THE PAPER BOOK AND ACCOMPANYING DOCUME NTS PLACED AT PAGES 64 AND 65 OF THE PAPER BOOK. THE SAID AMOUNT HAS BEEN MISAPPROPRIATED BY THE EMPLOYEE. WE FIND NO MERIT IN THE OBSERVATION OF THE ASSESSING OFFICER THAT THE ASSES SEE HAD NOT GIVEN IDENTITY OF THE CUSTOMERS FROM WHOM COLLECTIO N WAS MADE BY THE EMPLOYEE. IT IS NOT A CASE OF BAD DEBT BEING W RITTEN OFF BY THE ASSESSEE UNDER WHICH THE SAID AMOUNT IS TO BE WRITT EN OFF IN THE COPY OF ACCOUNT OF THE RESPECTIVE PARTIES. IN THE FACTS OF THE PRESENT CASE, THE EMPLOYEE OF THE ASSESSEE HAD COLL ECTED PAYMENT FROM RESPECTIVE PARTIES BUT HAD NOT DEPOSITED THE S AID AMOUNT IN THE BANK ACCOUNT OF THE ASSESSEE, BUT HAD MISAPPROP RIATED THE SAME WHICH IS ESTABLISHED BY THE ASSESSEE BY WAY OF THE DETAILS PROVIDED I.E. DD NUMBER, DATE OF ISSUE AND AMOUNT RECEIVED F ROM THE RESPECTIVE PARTIES BY WAY OF PAYMENTS IS ENLISTED U NDER PARA 4.4 OF THE APPELLATE ORDER AND IS PLACED AT PAGE 64 OF THE PAPER BOOK. IN THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE ASSESSEE IS ENTITLED TO THE SAID CLAIM OF DEDUCTION OF RS.2,79,000 AND THUS GROUND NO.1 RAISED BY THE A SSESSEE IS ALLOWED. 11. THE ISSUE IN GROUND NO.2 RAISED BY THE ASSESSEE IS AGAINST THE DISALLOWANCE OF RS.6 LACS ON ACCOUNT OF COMMISSION EXPENSES. 5 12. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATIO N HAD PLIED 28 TRUCKS OF M/S KANDHARI BEVERAGES PVT. LTD. AND 7 TR UCKS OF HIS OWN. THE ASSESSEE CLAIMS TO HAVE EMPLOYED COMMISSI ON AGENT FOR MANAGEMENT OF SUPPLIES AND FOR TRANSPORT OF GOODS T O VARIOUS STATIONS/DESTINATIONS. DURING THE COURSE OF ASSESS MENT PROCEEDINGS, STATEMENT OF ONE SHRI JASMEET SINGH WA S RECORDED WHO WAS AN EMPLOYEE OF M/S RAVINDRA ENTERPRISES, TO WHO M THE SAID COMMISSION WAS PAID. IN THE SAID STATEMENT SHRI JA SMEET SINGH WAS UNABLE TO TELL EXACT AMOUNT OF COMMISSION RECEIVED, DETAILS OF CRATES HANDLED AND VARIOUS BILLS AND VOUCHERS. THU S THE ASSESSING OFFICER DISALLOWED THE SAID CLAIM OF THE ASSESSEE. THE PLEA OF THE ASSESSEE BEFORE THE CIT (APPEALS) WAS THAT THE STAT EMENT OF SHRI JASMEET SINGH WAS RECORDED BEHIND THE BACK OF THE A SSESSEE AND IN THE ABSENCE OF ANY CROSS EXAMINATION BEING ALLOWED OR NON CONFRONTING OF THE SAID STATEMENT, NO RELIANCE COUL D BE PLACED ON THE SAID STATEMENT FOR MAKING THE SAID DISALLOWANCE . IT WAS FURTHER POINTED OUT BY THE ASSESSEE THAT THE RECEIPTS OF CO MMISSION HAD BEEN ADMITTED BY SHRI JASMEET SINGH AND PAYMENT WAS ALSO MADE BY ACCOUNT PAYEE CHEQUES, ON WHICH TDS WAS DEPOSITED. BEFORE THE CIT (APPEALS), THE ASSESSING OFFICER FILED REMAND R EPORT UNDER WHICH IT WAS SUBMITTED BY HIM THAT THE PROPRIETOR O F M/S RAVINDRA ENTERPRISES WAS NOT JOHAN PAUL SINGH BUT JASMEET SI NGH, WHO IN HIS STATEMENT HAD DEPOSED RECEIPT OF COMMISSION OF RS.1 2 LACS AS AGAINST THE CLAIM OF RS.6 LACS MADE BY THE ASSESSEE . FURTHER THERE WAS NO WRITTEN AGREEMENT BETWEEN THE PARTIES AND EV EN BILLS/VOUCHERS COULD NOT BE PRODUCED. IN RESPECT O F THE OPPORTUNITY TO CROSS EXAMINE, THE REQUEST WAS MADE BY THE ASSES SING OFFICER FOR REMANDING THE MATTER TO HIM. THE CIT (APPEALS) WAS OF THE VIEW THAT THE EXPENDITURE BEING CLAIMED BY THE ASSE SSEE, IT WAS HIS DUTY TO SUBSTANTIATE THE SAME BY EVIDENCE AND MERELY BECAUSE THE 6 VERIFYING THE STATEMENT WAS NOT TO CROSS EXAMINATIO N, THE FACT COULD NOT BE ESTABLISHED . 13. WE FIND NO MERIT IN THE STAND OF THE AO/CIT (AP PEALS) IN THIS REGARD. IN CASE ANY RELIANCE IS PLACED ON THE STAT EMENT RECORDED OF ANY PERSON DURING THE COURSE OF ASSESSMENT PROCEEDI NGS AND THE SAID STATEMENT IS TO BE USED AGAINST THE ASSESSEE, THE PRINCIPLES OF NATURAL JUSTICE REQUIRE THE CONFRONTATION OF THE SA ID STATEMENT TO THE ASSESSEE BEFORE MAKING ANY ADVERSE REMARKS. FU RTHER THE RIGHT TO CROSS EXAMINE THE SAID PERSON WHOSE STATEMENT IS RECORDED CANNOT BE DENIED TO THE ASSESSEE ESPECIALLY IN CASE S WHERE THE ASSESSEE HAD ASKED FOR THE SAID CROSS EXAMINATION. IN THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE CIT (APPEALS) IN THE PRESENT CASE HAS FAILED TO DISCHARGE HIS DUTY IN ALLOWING CROSS EXAMINATION TO THE ASSESSEE ESPECIALLY WHERE THE SAME HAS BEEN DEMANDED BY THE ASSESSEE AND WHER E THE ASSESSING OFFICER IN THE REMAND REPORT HAD ALSO ASK ED FOR THE MATTER BEING REMANDED BACK TO HIM FOR CROSS EXAMINA TION. IN VIEW THEREOF, WE REMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO CONFRONT THE ASSESSEE WITH THE STATEMENT RECORDE D AND ALSO TO ALLOW CROSS EXAMINATION OF THE PERSON TO THE ASSESS EE. THE ASSESSING OFFICER SHALL DECIDE THE ISSUE AFTER VERI FYING THE CLAIM OF ASSESSEE IN ACCORDANCE WITH LAW AND AFTER ALLOWING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THUS, GROU ND NO.2 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . 14. THE ISSUE IN GROUND NO.3 IS AGAINST THE DISALLO WANCE OF INTEREST OF RS.1,25,590/-. THE ASSESSING OFFICER H AD MADE THE PROPORTIONATE DISALLOWANCE OF INTEREST ON ACCOUNT O F INTEREST FREE ADVANCES MADE BY THE ASSESSEE AS AGAINST THE INTERE ST PAID ON LOANS AND ADVANCES. THE SAID DISALLOWANCE WAS MADE IN VI EW OF THE RATIO LAID DOWN BY THE HON'BLE PUNJAB & HARYANA HIGH COUR T IN CIT VS. 7 ABHISHEK INDUSTRIES [286 ITR 1 (P&H)]. THE ISSUE B EING DIRECTLY COVERED BY THE SAID RATIO LAID DOWN BY THE HON'BLE PUNJAB & HARYANA HIGH COURT IN ABHISHEK INDUSTRIES (SUPRA), WE UPHOLD THE ADDITION IN THIS REGARD AND DISMISS GROUND NO.3 RAI SED BY THE ASSESSEE. 15. THE ISSUE IN GROUND NO.4 IS IN RELATION TO THE APPLICATION OF PROVISIONS OF SECTION 40A(3) OF THE ACT. THE ASSES SEE HAD MADE CASH PAYMENTS TO ONE SHRI PAKHAR SINGH TOTALING RS. 4,50,000/- DURING THE YEAR UNDER CONSIDERATION. THE EXPLANATI ON OF THE ASSESSEE WAS THAT THE SAID AMOUNTS WERE HANDED OVER TO HIM FOR REPAIR OF THE VEHICLES RUN BY THE ASSESSEE BUT THE PAYMENT OF EACH EXPENDITURE WAS CLAIMED TO BE LESS THAN RS.20,000/- . REFERENCE WAS MADE TO THE AUDIT REPORT IN WHICH THE AUDITOR H AD REPORTED FIGURE OF PAYMENT BY IT UNDER THE PROVISIONS OF SEC TION 40A(3) OF THE ACT AT NIL. THE ASSESSING OFFICER MADE DISALLO WANCE OF RS.90,000/- IN VIEW OF THE PROVISIONS OF SECTION 40 A(3) OF THE ACT. IN THE REMAND PROCEEDINGS BEFORE THE CIT (APPEALS) THE ASSESSING OFFICER STATED THAT THE ASSESSEE HAD FAILED TO PROD UCE ANY EVIDENCE THAT THE PAYMENTS IN CASH DID NOT EXCCED RS.20,000/ -. IT WAS FURTHER MENTIONED BY THE ASSESSING OFFICER THAT THO UGH THE AUDITORS HAD GIVEN A CERTIFICATE OF NO CASH PAYMENT ABOVE RS.20,000/- BUT AT THE SAME TIME HE HAD RECORDED TH AT THE FACT COULD NOT BE VERIFIED. 16. THE CIT (APPEALS) UPHELD THE ADDITION MADE BY T HE ASSESSING OFFICER IN THE ABSENCE OF THE ASSESSEE HAVING PRODU CED ANY EVIDENCE REGARDING EMPLOYMENT OF SHRI PAKHAR SINGH WITH THE ASSESSEE AND EXPENSES VOUCHERS AND OTHER EVIDENCE L EADING TO THE CONCLUSION THAT THE SAID PERSON WAS EMPLOYED WITH T HE ASSESSEE. 17. THE ASSESSEE IS IN APPEAL AGAINST THE SAID ADDI TION. DURING THE COURSE OF HEARING, THE LEARNED A.R. FOR THE ASS ESSEE WAS ASKED 8 TO PRODUCE SALARY DETAILS OF THE ASSESSEE UNDER WHI CH SHRI PAKHAR SINGH WAS SHOWN AS THE EMPLOYEE AND TOTAL EMOLUMENT S PAID TO HIM. THE ASSESSEE HAD FAILED TO PRODUCE ANY EVIDEN CE WHATSOEVER IN THIS REGARD AND CONSEQUENTLY WE FIND NO MERIT IN THE CLAIM OF THE ASSESSEE AND UPHOLD THE ADDITION OF RS.90,000/- ON ACCOUNT OF DISALLOWANCE U/S 40A(3) OF THE ACT. GROUND NO.4 RA ISED BY THE ASSESSEE IS THUS DISMISSED. 18. THE ISSUE IN GROUND NO.5 RAISED BY THE ASSESSEE IS AGAINST THE DISALLOWANCE OF LEASE RENTAL PAID OF RS.80,39,000/- FOR NON DEDUCTION OF TAX AT SOURCE AND CONSEQUENT INVOKING OF PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 19. THE LEARNED A.R. FOR THE ASSESSEE HAS RAISED AD DITIONAL GROUND OF APPEAL IN THIS REGARD WHICH IS ALTERNATE TO THE ISSUE RAISED VIDE GROUND NO.5 THAT NO DISALLOWANCE IS WARRANTED AS TH E HIRE CHARGES WERE PAID DURING THE YEAR AND THE RATIO OF THE SPEC IAL BENCH OF VISHAKHAPATNAM REPORTED IN ACIT VS. MERILYN SHIPPIN G & TRANSPORTS (SUPRA) IS DIRECTLY APPLICABLE. 20. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE RAISED BY THE ASSESSEE IS THAT THE TAX WAS DE DUCTIBLE ON LEASE RENTAL PAID BY THE ASSESSEE FOR THE HIRING OF VEHICLES U NDER THE PROVISIONS OF SECTION 194I OF THE ACT WHICH CAME ON THE STATUTE W .E.F. 1.6.2007 AND THE ORDER UNDER APPEAL BEING ASSESSMENT YEAR 2006-0 7, THE SAID PROVISIONS WERE NOT APPLICABLE TO THE INSTANT ASSES SMENT YEAR. THE STAND OF THE REVENUE WAS THAT THE PROVISIONS OF SECTION 1 94C OF THE ACT WERE APPLICABLE AND AS THE ASSESSEE HAD FAILED TO DEDUCT TAX AT SOURCE, THE SAID PAYMENTS WERE NOT ALLOWED AS DEDUCTION IN VIEW OF T HE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. WITHOUT GOING INTO T HE MERITS OF THE APPLICATION OF SECTION 194C/194I OF THE ACT WE PROC EED TO DISPOSE OF THE ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSESSEE, WHICH IS ALTERNATE PLEA TO GROUND NO.5 RAISED BY THE ASSESSEE. THE IS SUE IN THE CASE IS 9 COVERED BY THE RATIO LAID DOWN BY THE SPECIAL BENCH OF VISHAKHAPATNAM REPORTED IN ACIT VS. MERILYN SHIPPING & TRANSPORTS (SUPRA) AND FOLLOWING THE SAME WE DIRECT THE ASSESSING OFFICER TO VERIFY THE FACTUM OF PAYMENT OF HIRE CHARGES BY THE ASSESSEE DURING T HE YEAR UNDER CONSIDERATION. IN CASE THE AMOUNTS HAVE BEEN PAID BY THE ASSESSEE AND NOTHING IS PAYABLE AS ON 31.3.2006, NO DISALLOWANCE IS WARRANTED OUT OF LEASE RENTAL OF RS.80,39,000/-. THE ASSESSING OFFI CER SHALL DECIDE THE ISSUE IN LINE WITH THE RATIO LAID DOWN BY THE SPECI AL BENCH OF VISHAKHAPATNAM REPORTED IN ACIT VS. MERILYN SHIPPIN G & TRANSPORTS (SUPRA) AND AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ALTERNATE GROUND OF APPEAL IS THUS A LLOWED FOR STATISTICAL PURPOSES AND GROUND NO.5 RAISED BY THE ASSESSEE IS DISMISSED. 21. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 9 TH DAY OF AUGUST, 2012. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 9 TH AUGUST, 2012 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 10