DCIT, Parwanoo V. Shri Shiv Shankar Shukla, Baddi

ITA 921/CHANDI/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77141 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 03-06-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 10-09-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Gift
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 921/CHD/2012 ASSESSMENT YEAR: 2009-10 DCIT VS. SHRI. SHIV SHANKAR SHUKLA, CIRCLE PROP. M/S NATIONAL CORPORATE SERV ICES PARWANOO 440 PHASE 2 BADDI PAN NO. AYBPS9576Q & C.O. NO. 37/CHD/2012 ITA NO. 921/CHD/2012 ASSESSMENT YEAR: 2009-10 SHRI. SHIV SHANKAR SHUKLA, VS. DCIT PROP. M/S NATIONAL CORPORATE SERVICES CIRCLE 440 PHASE 2 PARWANOO BADDI PAN NO. AYBPS9576Q (APPELLANT) (RESPONDENT) APPELLANT BY : SH. AKHILESH GUPTA RESPONDENT BY : SH. TEJ MOHAN SINGH DATE OF HEARING : 03/06/2014 DATE OF PRONOUNCEMENT : 27/06/2014 ORDER PER T.R. SOOD, A.M. THE APPEAL BY THE REVENUE AND CROSS OBJECTIONS BY T HE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 4.6.2012 OF CIT(A ), SHIMLA. 2. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOW ING GROUNDS:- 1. IN THE FACTS & CIRCUMSTANCES OF THE CASE, THE LE ARNED CIT(APPEALS) HAS ERRED IN LAW IN HOLDING THAT THE R ECEIPTS FROM VVF LTD. ARE TAXABLE IN F.Y. 2009-10 INSPITE O F THE BILL BEING RAISED IN F.Y. 2008-09 AND THE ASSESSEE FOLLO WING THE MERCANTILE SYSTEM OF ACCOUNTING. 2 2. IN THE FACTS & CIRCUMSTANCES OF THE CASE, THE LE ARNED CIT(APPEALS) HAS ERRED IN LAW WHILE ALLOWING THE EX PENSE ON ACCOUNT OF PAYMENT OF BONUS PERTAINING TO F.Y. 2007 -08 IN THE F.Y. 2008-09 INSPITE OF THE ESTIMATION OF PROFI TS IN THE F.Y. 2007-08 DUE TO NON MAINTENANCE OF BOOKS OF ACC OUNTS. 3. IN THE FACTS & CIRCUMSTANCES OF THE CASE, THE LE ARNED CIT (APPEALS) HAS FURTHER ERRED IN LAW IN DISREGARD ING THE SETTLED VIEW THAT ALL DEDUCTIONS ARE DEEMED TO HAVE BEEN TAKEN DURING ESTIMATION OF INCOME AND ALLOWING THE EXPENSE ON ACCOUNT OF PAYMENT OF BONUS PERTAINING TO F.Y. 2 007-08 IN THE F.Y. 2008-09. 4. IN THE FACTS & CIRCUMSTANCES OF THE CASE, THE LE ARNED CIT(APPEALS) HAS ERRED IN LAW WHILE DELETING THE AD DITION MADE ON ACCOUNT OF SALE OF COUPONS BY ASSESSEE AS A CANTEEN CONTRACTOR IN A.Y. 2009-10, WHEREAS, THE HONBLE IT AT CHANDIGARH HAS ALREADY CONFIRMED THE ESTIMATION OF CANTEEN PROFIT AT RS. 1,00,000/- FOR A.Y. 2008-09. 5. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(APPEA LS) BE SET ASIDE AND THAT OF THE A.O. BE RESTORED. 3. GROUND NO.1. : AFTER HEARING BOTH THE PARTIES W E FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICE D THAT ASSESSEE WAS SUPPLYING MANPOWER TO VARIOUS COMPANIES. THE INFORM ATION WAS SOUGHT FROM THE COMPANIES TO WHOM MANPOWER WAS SUPPLIED U/ S 133(6). FROM THE SAID INFORMATION IT WAS NOTICED THAT ASSESSEE H AS NOT ACCOUNTED FOR TWO BILLS ISSUED ON 31.3.2009 BEARING NOS. 503 & 50 4 FOR RS. 3,13,200/- AND RS. 5,28,649/- ISSUED IN THE NAME OF VVF LTD. IN RESPONSE TO THE QUERY, IT WAS MAINLY SUBMITTED THAT RECEIPTS SHOWN BY THE ASSESSEE IS OF RS. 48,02,203/- WHICH MATCHES WITH THE TDS CERTIFIC ATE WHICH HAS ALREADY BEEN SUBMITTED. VARIOUS DETAILS WERE FILED AND IT WAS SUBMITTED THAT BILLS ISSUED IN THE MARCH WERE NOT FINAL BECAUSE THEY WER E SUBJECT TO THE 3 APPROVAL. IN ANY CASE, NO EXPENDITURE HAS BEEN CLAI MED AGAINST SUCH BILLS. FURTHER, THESE BILLS HAVE BEEN DULY REFLECTED IN TH E RECEIPTS OF THE NEXT ASSESSMENT YEAR. THE ASSESSING OFFICER DID NOT FIND FORCE IN THESE SUBMISSIONS BECAUSE ACCORDING TO HIM ONCE ASSESSEE WAS MANAGING BOOKS ON THE BASIS OF MERCANTILE SYSTEM OF ACCOUNTING, TH EN ASSESSEE WAS DUTY BOUND TO OFFER THESE RECEIPTS TO TAXATION. IN THIS BACKGROUND, THE SUM OF RS. 8,41,849/- WAS ADDED TO THE INCOME OF THE ASSES SEE. 4. ON APPEAL, IT WAS MAINLY SUBMITTED THAT BILLS IS SUED WERE PERFORMA BILLS AND WERE SUBJECT TO APPROVAL OF THE CLIENTS. NO EXPENSES HAVE BEEN CLAIMED AGAINST SUCH BILLS. EVEN VVF HAVE NOT ACKN OWLEDGED THIS LIABILITY. THE LD. CIT(A) FOUND FORCE IN THE SAME AND DELETED THE ADDITION. 5. BEFORE US, LD. DR STRONGLY SUPPORTED THE ORDER O F ASSESSING OFFICER. HE FURTHER EMPHASIZED THAT ASSESSEE WAS A DMITTEDLY MANAGING THE ACCOUNTS ON THE BASIS OF MERCANTILE SYSTEM OF A CCOUNTING, THEREFORE, ASSESSEE WAS DUTY BOUND TO DECLARE THE RECEIPTS FOR EACH BILLS WHICH HAVE ALREADY BEEN ISSUED. 6. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSESS EE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. HE A LSO STRONGLY SUPPORTED THE IMPUGNED ADDITION AND SUBMITTED THAT BILLS ISSU ED IN MARCH ARE SUBJECT TO THE APPROVAL OF M/S VVF LTD. IN ANY CASE THESE BILLS HAVE BEEN DECLARED IN THE RECEIPTS OF THE NEXT FINANCIAL YEAR AND NO EXPENDITURE AGAINST SUCH RECEIPTS HAS ALREADY BEEN PROVIDED. TH OUGH HE ADMITTED THAT ASSESSEE WAS MAINTAINING ACCOUNTS ON MERCANTILE SYS TEM OF ACCOUNTING BUT SINCE RECEIPTS HAVE ALREADY BEEN DECLARED IN TH E NEXT YEAR, IF THEY ARE TAXED IN THIS YEAR THIS WOULD MEAN TO DOUBLE TAXATI ON. 4 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY. WE FIND WHATEVER BILLS ARE RAISED UNDER MERCANTILE SYSTEM O F ACCOUNTING SHOULD HAVE BEEN DECLARED BY THE ASSESSEE DURING THE YEAR. HOWEVER, IN THE EXCEPTIONAL CIRCUMSTANCES, SOME EXCEPTIONS HAVE TO BE MADE. IN THE CASE BEFORE US, FIRST OF ALL THE RECEIPTS ARE MATCHED WI TH THE TDS CERTIFICATES. SECONDLY THE BILLS ISSUED IN MARCH WERE SUBJECT TO APPROVAL OF THE CLIENTS I.E.. M/S VVF LTD. MOREOVER, NO EXPENDITURE HAS BE EN CLAIMED AGAINST THESE RECEIPTS AND THESE RECEIPTS HAVE BEEN ALREADY DECLARED IN THE NEXT FINANCIAL YEAR AND THEREFORE, NET IMPACT ON INCOME SIDE WOULD BE MINIMUM, THEREFORE, WE CONFIRM THE ORDER OF LD. CIT (A). HOWEVER, WE MAY CLARIFY THAT THIS IS AN EXCEPTIONAL CASE AND CA NNOT BE TAKEN AS A PRECEDENT. 8. GROUND NOS. 2 & 3: AFTER HEARING BOTH THE PARITI ES WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS CLAIMED DEDUCTION ON ACCOUNT OF BONUS PAID. THE BONUS WAS PAID IN RESPECT OF WORKERS OF JOHNSON DIVERSEY AND PIDILITE D INDUSTRIES. ON AN INQUIRY IT WAS EXPLAINED THAT BONUS IS PAYABLE FOR FINANCIAL YEAR 2007-08 BUT FALLS DUE FOR PAYMENT IN THE YEAR 2008-09 BECAU SE BONUS WILL DEPEND ON THE PROFITS OF A PARTICULAR UNIT. 9. THE ASSESSING OFFICER NOTICED THAT INTERESTINGLY THE ASSESSEE HAS PAID BONUS TO THE EMPLOYEES OF TWO COMPANIES WHEREA S THE ASSESSEE WAS SUPPLYING LABOUR TO TWO MORE COMPANIES. HE ALSO OBS ERVED THAT IT IS NOT IMPOSSIBLE TO FIND OUT THE AMOUNT OF BONUS AT THE E ND OF THE YEAR. HE ALSO NOTED THAT BOOKS OF ACCOUNT WERE REJECTED DURING AS SESSMENT YEAR 2008-09 AND ULTIMATELY THE ASSESSEE HAD OFFERED 8% PROFITS ON THE RECEIPTS AND THEREFORE, SUCH EXPENSES FOR EARLIER YEARS SHOULD N OT BE ALLOWED IN THIS YEAR. IN THIS BACKGROUND, THE ASSESSING OFFICER REJ ECTED THE CLAIM OF BONUS AMOUNTING TO RS. 7,44,296/-. 5 10. ON APPEAL, THE SUBMISSIONS MADE BEFORE THE ASSE SSING OFFICER WERE REITERATED. IT WAS FURTHER SUBMITTED THAT EVEN AS PER PROVISO TO SECTION 43B, BONUS IS ALLOWABLE ONLY ON PAYMENT OF THE SAME . THE LD. CIT(A) FOUND FORCE IN THE SUBMISSIONS OF THE ASSESSEE AND DELETED THE ADDITION. 11. BEFORE US LD. DR RELIED ON THE ORDER OF ASSESSI NG OFFICER. 12. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSES SEE SUPPORTED THE IMPUGNED ORDER. 13. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT THIS ISSUE HAS BEEN ADJUDICATED BY CIT(A) IN PARA 6 OF THE IMPUGN ED ORDER WHICH HAS BEEN REPRODUCED AS UNDER:- 6. THE RIVAL SUBMISSIONS HAVE BEEN CAREFULLY CONSI DERED WITH REFERENCE TO THE FACTS OF THE CASE, THE RELEVA NT PROVISIONS OF LAW INCLUDING THOSE OF THE PAYMENT OF BONUS ACT, 1965 AND THE RELATED BOOKS OF ACCOUNTS AND DOCUMENTS. IT IS NOTED THAT THE APPELLANT HAS PAID BONUS TO THE LABOUR EMPLOYED FOR THE TWO COMPANIES, NAMELY, PIDILITE INDUSTRIES AND JOHN SON DIVERSEY AS PER THE AGREEMENT WITH THEM. THE BONUS WAS PAID BY THE APPELLANT AS MANDATED BY THE AGREEMENT WITH THESE TWO COMPANIES AND THE SAID PAYMENT WAS RECOVERED FROM T HE SAID TWO PRINCIPAL EMPLOYERS. THE APPELLANT HAD SHOWN TH E PAYMENTS AS WELL AS THE RECEIPTS AGAINST THE BONUS IN THE BOOKS OF ACCOUNTS OF THE YEAR UNDER CONSIDERATION A ND THUS THERE WAS NO VIOLATION OF THE PRINCIPLE OF MATCHING CONCEPT. THE BONUS WAS PAID IN THE MONTH OF OCTOBER, 2008 AN D WAS THUS WITHIN THE TIME LIMIT FOR PAYMENT OF BONUS LAI D DOWN BY SECTION 19 OF THE PAYMENT OF BONUS ACT, 1965. EVEN THOUGH THE BONUS PERTAINED TO THE F.Y. 2007-08, THE PAYMEN T OF THE SAME IN THE F.Y. 2008-09 QUALIFIES FOR DEDUCTION IN THE A.Y. 2009-10 AS PER THE CLEAR PROVISIONS OF SECTION 43(C ) READ WITH SECTION 36(1)(II) OF THE I.T. ACT, ACCORDING TO WHI CH THE BONUS PAID IS DEDUCTIBLE IN THE YEAR IN WHICH IT IS ACTUA LLY PAID. THE 6 LD. A.O. HAS OBSERVED THAT THE EMPLOYEES WHO WORKED FOR ONE OR TWO MONTHS IN APRIL / MAY, 2007, WERE PAID BONUS IN THE MONTH OF OCTOBER, 2008 WHICH WAS AN IMPROBABLE SITU ATION. THEREFORE THE LD. A.O. HAS DOUBTED THE AUTHENTICITY OF THE PHOTOCOPIES OF THE COMPUTERIZED BONUS SHEETS. HOWEV ER, THE LD. A.O. HAS NOT GIVEN ANY DETAILS NOTED BY HIM FRO M THE SCRUTINY OF THE APPELLANTS RECORDS IN RESPECT OF T HE EMPLOYEES WHO ALLEGEDLY WORKED FOR A SHORT PERIOD A ND WERE PAID BONUS AFTER A LONG INTERVAL. NOR HAD THE LD. A .O., AT ANY STAGE OF THE ASSESSMENT PROCEEDINGS, RAISED ANY DOU BT IN THIS REGARD AND ASKED THE ASSESSEE TO INDEPENDENTLY CORR OBORATE HIS CLAIM REGARDING THE PAYMENT OF BONUS TO SUCH EM PLOYEES. THE LD. A.O. HAS ALSO NOT ELABORATED AS TO HOW THE COMPUTERIZED RECORDS OF BONUS DID NOT MEET THE STAT UTORY REQUIREMENT. HE APPEARS TO HAVE PROCEEDED PURELY ON ASSUMPTIONS WHILE DEALING WITH THE CLAIM OF THE APP ELLANT IN RESPECT OF THE BONUS PAYMENT. THEREFORE THE DISALLO WANCE OF DEDUCTION AMOUNTING TO RS. 7,44,296/- ON ACCOUNT OF BONUS PAYMENT IS NOT FOUND TENABLE. THE SAID ADDITION IS THEREFORE DIRECTED TO BE DELETED. 14. THE ABOVE CLEARLY SHOWS THAT LD. CIT(A) HAS COR RECTLY DELETED THE ADDITION BECAUSE CLAIM OF BONUS IS ALLOWABLE AS PER THE PROVISO TO SECTION 43B ONLY WHEN ACTUAL PAYMENT IS MADE. THEREFORE, WE FIND NOTHING WRONG WITH THE ORDER OF LD. CIT(A) AND WE CONFIRM THE SAM E. 15. GROUND NO.4: AFTER HEARING BOTH THE PARTIES WE FIND THAT DURING ASSESSMENT PROCEEDINGS IT WAS NOTICED THAT THE ASSE SSEE WAS ALSO ACTING AS A CANTEEN CONTRACTOR FOR HINDUSTAN LEVER LIMITED (H LL) IN NALAGARH. AS FOR THE AGREEMENT, THE ASSESSEE WAS REQUIRED TO PRO VIDE MEALS TO EMPLOYEES IN FIRST, GENERAL AND SECOND SHIFT. THE A SSESSEE WAS REQUIRED TO COOK THE FOOD AT THEIR OFFICE SITE AND CARRY THE FO OD TO THE CANTEEN. ALL THE EXPENDITURE WAS TO BE REIMBURSED TO HLL EXCEPT FOR LABOUR EXPENSES FOR WHICH A CONSOLIDATED SUM OF RS. 36,000/- PER MONTH WAS TO BE PAID. FURTHER ASSESSEE WAS ALSO ENTITLED TO RECEIVE RS. 1 0/- PER COUPON FROM THE 7 EMPLOYEE TOWARDS EACH MEAL. THE ASSESSING OFFICER N OTICED THE DETAIL OF RECEIPTS AS SHOWN BY THE ASSESSEE, WHICH IS AS UNDE R:- DR, CR. APRIL 124507 168753 MAY 107755 72056 JUNE 27000 JULY 87361 TOTAL 259262 328170 68908 CR. FROM THE ABOVE, IT WAS NOTED THAT COUPONS DECLARED RECEIVED WERE AT THE LOWER SIDE. THE ASSESSEE DID NOT FILE EVEN THE AGR EEMENT WITH M/S HLL BECAUSE ALL THESE DEFICIENCIES THE RECEIPTS FROM T HE COUPONS SALE WERE ESTIMATED FOR 100 EMPLOYEES FOR THREE SHIFTS FOR TW O MONTHS AS UNDER;- 100 X 3 X 60 X 10 = 1,80,000 IT WAS, HOWEVER, OBSERVED THAT EXPENDITURE AGAINST THE CANTEEN COULD NOT BE ALLOWED BECAUSE THE SAME WAS BEING REIMBURSED BY M/S HLL. IN THIS BACKGROUND IT WAS OBSERVED THAT PROFITS FROM CANTE EN COULD NOT BE LESS THAN RS. 1,60,000/- IN VIEW OF THE COUPON SALE OF R S. 1,80,000/- AND FURTHER REIMBURSEMENT OF RS. 36,000/- PER MONTH. SI NCE THE ASSESSEE HAS DECLARED A PROFIT OF RS. 68,918/-, A NET ADDITION O F RS. 91,082/- WAS MADE ON ACCOUNT OF CANTEEN PROFITS. 16. ON APPEAL, IT WAS MAINLY SUBMITTED THAT ASSESS ING OFFICER HAS MISUNDERSTOOD THE TERMS OF AGREEMENT WITH M/S HLL. IT WAS EXPLAINED THAT OTHER VARIABLE COST HAD TO BE BORNE BY THE ASS ESSEE WHICH INCLUDED COSTS OF RAW MATERIAL. THE SALE OF COUPONS WOULD CO VER SOME PART OF THE COST. IT WAS FURTHER SUBMITTED THAT RECEIPTS FROM THE COUPONS HAD BEEN ARBITRARILY ESTIMATED WHICH HAD NOT CONSIDERED THE ABSENTEEISM IN THE HLL FACTORY. IN THE PREVIOUS YEAR THE ASSESSEE HAS SHO WN NIL PROFIT AGAINST 8 WHICH THE PROFIT OF RS. 6 LAKHS WAS ESTIMATED BY TH E ASSESSING OFFICER WHICH WAS REDUCED TO RS. 1,00,000/- BY THE TRIBUNA L. THE LD. CIT(A) FOUND FORCE IN THESE SUBMISSIONS AND DELETED THE AD DITION. 17. BEFORE US, LD. DR STRONGLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND ALSO SUBMITTED THAT IN THE LAST YEAR TH E TRIBUNAL HAS ESTIMATED THE PROFIT AT RS. 1 LAKH. 18. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSE SSEE SUPPORTED THE IMPUGNED ORDER. 19. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT THIS ISSUE HAS BEEN ADJUDICATED BY THE LD. CIT(A) VIDE PARA 10. W E PARTLY AGREE WITH THE OBSERVATIONS OF THE LD. CIT(A) AND SUBMISSIONS OF LD. COUNSEL FOR THE ASSESSEE. HOWEVER, WE FAIL TO UNDERSTAND WHY SALE O F COUPONS HAVE BEEN RECORDED ONLY FOR TWO MONTHS. THEREFORE, FOLLOWING THE SAID ORDER IN ITA NO. 654/CHD/2011, WE ESTIMATE THE PROFITS FROM THE CANTEEN AT RS. 1 LAKH. SINCE THE ASSESSEE HAD ALREADY SHOWN A PROFIT OF RS . 68,918/- FROM THE CANTEEN WE DIRECT THE ASSESSING OFFICER TO MAKE ADD ITION OF RS. 31,082/-. 20. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. CROSS OBJECTION N0.37/CHD/2012 21. IN THE CROSS OBJECTIONS, FOLLOWING GROUNDS HAVE BEEN RAISED:- 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN LAW AS WELL AS ON FACTS IN SUSTAINING THE ADDITION OF RS. 50,000/- OUT OF TOTAL ADDITION OF RS. 98,737 /- ON ACCOUNT OF FESTIVAL EXPENDITURE WHICH IS ARBITRARY & UNJUSTIFIED. 2. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS ERRONEOUS, ARBITRARY, OPPOSED TO LAW A ND FACTS OF THE CASE AND IS, THUS, UNTENABLE 9 22. AFTER HEARING BOTH THE PARTIES, WE FIND THAT D URING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT ASSE SSEE HAS SHOWN FESTIVAL EXPENDITURE AMOUNTING TO RS. 1,64,012/-. OUT OF THIS, A SUM OF RS. 98,737/- WAS SHOWN TO HAVE BEEN SPENT BETWEEN 1 4.10.2008 TO 21.10.2008 IN CASH FOR PURCHASE OF TIFFINS. SINCE T HERE WERE NO PROPER VOUCHERS AVAILABLE, THEREFORE, THIS EXPENDITURE WA S NOT PROVED BY THE ASSESSEE AND THUS THE SAME WAS DISALLOWED. 23. ON APPEAL, IT WAS MAINLY SUBMITTED THAT ASSESSE E HAS PURCHASED TIFFINS FROM 14.10.2008 TO 21.10.2008 FROM THE LOCA L MARKET. THE ASSESSEE WAS EMPLOYING MORE THAN 600 WORKERS AND WAS DISTRIB UTING SWEETS ON ACCOUNT OF DIWALI ALONG WITH TIFFINS. IT WAS FURTHE R SUBMITTED THAT IN THE LOCAL MARKET OF BADDI ONLY THE SMALL SHOPS WERE THE RE, THEREFORE, PROPER BILLS WERE NOT AVAILABLE. 24. THE LD. CIT(A) FOUND SOME FORCE IN THESE SUBMIS SIONS AND RESTRICTED THE DISALLOWANCE TO RS. 50,000/-. 25. BEFORE US, LD. COUNSEL FOR THE ASSESSEE REITERA TED THE SUBMISSIONS MADE BEFORE THE CIT(A). 26. ON THE OTHER HAND, LD. DR STRONGLY SUPPORTED TH E E ORDER OF CIT(A). 27. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIN D THAT THIS ISSUE HAS BEEN ADJUDICATED VIDE PARA 8, WHICH IS AS UNDER;- 8. THE RIVAL SUBMISSIONS HAVE BEEN CAREFULLY CONSI DERED W.R.T THE FACTS OF THE CASE. IT IS NOTED THAT THE A PPELLANT HAD NOT ONLY PURCHASED TIFFIN BOXES AMOUNTING TO RS. 98 ,737/- BUT HAD ALSO PURCHASED SWEETS AMOUNTING TO RS. 30,455/- AND 10 OTHER GIFT ITEMS AMOUNTING TO RS. 34,820/-. THE PUR CHASE OF A PART OF THE SWEETS AND OF ALL THE OTHER GIFT ITEMS IS NOT SUPPORTED BY REGULAR EXTERNAL BILLS. STILL THE LD. A.O. TO BE FAIR TO THE ASSESSEE, HAS ALLOWED THE EXPENDITURE I N TOTALITY ON ACCOUNT OF SWEETS AND OTHER GIFT ITEMS. HOWEVER, CONSIDERING THE PRACTICAL REALITY THAT IT IS CUSTOM ARY TO DISTRIBUTE GIFTS TO THE WORKERS ON THE OCCASION OF DIWALI, IT IS CONSIDERED REASONABLE TO ALLOW THE EXPENDITURE ON T IFFIN BOXES TO THE EXTENT OF RS. 48,737/- ALONGWITH THE O THER EXPENDITURE ALREADY ALLOWED BY THE LD. A.O. ON ACCO UNT OF SWEETS AND OTHER GIFT ITEMS. THUS THE DISALLOWANCES MADE BY THE LD. A.O. ON ACCOUNT OF TIFFIN BOXES IS RESTRICT ED TO RS. 50,000/- 28. IN OUR OPINION, THE LD. CIT(A) HAS CORRECTLY AD JUDICATED THE ISSUE. IT IS A NORMAL PRACTICE TO DISTRIBUTE SWEETS ON DIW ALI BUT AT THE SAME TIME THE ASSESSEE IS ALSO REQUIRED TO PROVE THE EXPENSES , THEREFORE, NOMINAL DISALLOWANCE MADE BY LD. CIT(A) IS JUSTIFIED. THUS , THE CROSS OBJECTION ARE REJECTED. 29. IN THE RESULT APPEAL IS PARTLY ALLOWED AND CROS S OBJECTION IS REJECTED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27.06.20 14 SD/- SD/- (SUSHMA CHOWLA) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 27 TH JUNE 2014 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR