Pankaj Khimjibhai Katharani, Raigad V. Deputy Commissioner of Income-tax, Circle-Panvel, Panvel

ITA 979/PUN/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4632 (ITAT-PUNE)
• Duration Of Justice: 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 30-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Keywords: Depreciation; Business expenditure; TDS
• Section: 143(3); 40(a)(ia)

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM . / ITA NOS.979 & 980/PUN/2018 / ASSESSMENT YEARS : 2012-13 & 2014-15 PANKAJ KHIMJIBHAI KATHARANI, M/S. TIRUPATI DISTRIBUTORS, 97/B, NITYANAND ROAD, PANVEL, DIST RAIGAD. PAN : ABCDPK7049M. . / APPELLANT V/S THE DY. COMMISSIONER OF INCOME TAX, CIRCLE, PANVEL. . / RESPONDENT ASSESSEE BY : NONE. REVENUE BY : SHRI M.K. VERMA. / ORDER PER ANIL CHATURVEDI, AM : 1. THESE TWO APPEALS FILED BY THE ASSESSEE ARE EMANATING OUT OF SEPARATE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS) 2, PUNE DATED 06.02.2018 FOR A.Y. 2012-13 AND COMMISSIONER OF INCOM E TAX (APPEALS) - 2, THANE DATED 23.03.2018 FOR A.Y. 2014-15. 2. FIRST, WE TAKE UP ASSESSEES APPEAL IN ITA NO.979/PUN /2018 FOR A.Y. 2012-13. 2.1. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER :- / DATE OF HEARING : 23.01.2019 / DATE OF PRONOUNCEMENT: 22.03.2019 2 ASSESSEE IS AN INDIVIDUAL AND STATED TO BE ENGAGED IN THE BUSINESS OF DEALING IN MEDICINES UNDER THE NAME AND STYLE OF TIRU PATI DISTRIBUTORS. ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y.2 012-13 ON 26.09.2012 DECLARING TOTAL INCOME OF RS.42,34,000/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAM ED U/S 143(3) OF THE ACT VIDE ORDER DATED 05.03.2015 AND THE TOTAL IN COME WAS DETERMINED AT RS.45,16,700/-. AGGRIEVED BY THE ORDER OF A O, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE GRANTED PARTIAL RELIEF TO THE A SSESSEE VIDE ORDER DT.06.02.2018 (IN APPEAL NO.PN/CIT(A)-2/DCIT CIR/PVL/ 206/2017-18). AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSES SEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING EFFECTIVE GROUND : I. DISALLOWANCE OF COMMISSION PAID TO SALESMEN R S. 2,36,752/-. 1.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX - (APPEALS) [(CIT - (A)] ERRED IN CONFIRMING THE DISALLOWANCE OF INTEREST PAID RS. 4, 92,016/ - BY THE LEARNED ASSESSING OFFICER ON THE GROUND THAT NO TAX AT SOURCE (TDS) HAS BEEN DEDUCTED AND PAID ON OR BEFORE THE DUE DAT E OF FILING THE RETURN OF INCOME. 1.2 IT IS SUBMITTED THAT THE APP HAS MADE ALL THE PAYMENTS THROUGH ACCOUNT PAYEE CHEQUES OR RTGS AND HAS DEDUCTED TAX AT SOURCE, AS APPLICABLE AND PAID THE SAME ON OR BEFORE THE DATE OF FILING OF RETURN OF INCOME IN VIEW OF THE ABOVE, THE APP PRAYS THAT THE ADDITIONS MADE MAY KINDLY BE DELETED AS THE SAME IS UNWARRANTED AN D UNJUSTIFIED. 3. THE CASE FILE REVEALS THAT A DEFECT MEMO WAS ISSUED TO ASSESSEE WHEREBY THE ASSESSEE WAS ASKED TO REMOVE THE DEFECTS IN THE APPEAL AS POINTED IN THE DEFECT MEMO. IT IS SEEN THAT THE DEFECTS W ERE NOT REMOVED TILL THE DATE OF HEARING OF APPEAL. IT WAS FURTHER SEEN TH AT THE NOTICE OF HEARING WAS SENT TO THE ASSESSEE AT THE ADDRESS MENT IONED IN FORM NO- 36 BUT THE SAME WAS RETURNED UNDELIVERED WITH THE RE MARK LEFT. 3 BEFORE US, ASSESSEE HAS NOT FURNISHED ANY CHANGE OF ADDRESS, IF ANY. WE THEREFORE PROCEED TO DISPOSE OF THE APPEAL EX-PARTE QUA THE ASSESSEE BASED ON THE MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD.D.R. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOTICE D THAT ASSESSEE HAD CLAIMED EXPENSES ON ACCOUNT OF REFRESHMENT , SALESMAN COMMISSION, TRAVELLING AT RS.18,84,632/-. THE ASSESSEE WAS A SKED TO SUBSTANTIATE THE EXPENSES WITH DOCUMENTARY EVIDENCE. AS SESSEE PRODUCED VARIOUS BILLS AND VOUCHERS TO SUPPORT THE EXP ENSES. AO ON PERUSING THE SAME FOUND THAT SOME VOUCHERS WERE MADE THROUGH CASH AND ACCOUNTED THROUGH SELF-MADE VOUCHERS. HE ALSO NOT ED THAT IN SOME OF THE VOUCHERS THERE WERE NO SIGNATURES OF THE RECIPIEN TS. HE THEREFORE CONCLUDED THAT THE EXACT EXPENSES INCURRED CANNOT BE ASCERTAINED. HE THEREAFTER ON ADHOC BASIS DISALLOWED THE AMOUNT OF RS.2,82 ,695/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATT ER BEFORE LD.CIT(A), WHO CONCLUDED THAT EXPENSES UNDER THE HEAD OF REFRESHMENT AND TRAVELLING WERE REASONABLE CONSIDERING THE TURNOVER OF THE ASSESSEE, WHICH WAS AROUND RS.20 CRORES. HOWEVER WITH RESPECT TO THE COMMISSION PAYMENTS, LD.CIT(A) NOTED THAT NO TDS WAS DEDU CTED ON THE COMMISSION PAYMENTS AND NONE OF THE RECIPIENTS WERE HAVING ANY INCOME ABOVE THE TAXABLE LIMIT. ACCORDING TO HIM, THE COMMIS SION PAYMENTS WERE EITHER BEEN INFLATED OR CLAIMED FOR TAX AVO IDANCE. HE THEREFORE UPHELD THE DISALLOWANCE OF 15% ON SUCH COMMISSIO N PAYMENT OF RS.2,36,752/-. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESS EE IS NOW IN APPEAL BEFORE US. 5. BEFORE US, LD.D.R. SUPPORTED THE ORDER OF AO AND LD.CIT(A). 4 6. WE HAVE HEARD THE LD.D.R. AND PERUSED THE MATERIAL AV AILABLE ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESPEC T TO DISALLOWANCE OF COMMISSION. WE FIND THAT LD.CIT(A) WHILE UPHOLDING THE ORDER OF AO HAS NOTED THAT PERUSAL OF TAX AUDIT REPORT REITERATED T HAT NO TDS WAS DEDUCTED ON THE COMMISSION PAYMENTS AND NONE OF THE O THER RECIPIENTS WERE HAVING INCOME ABOVE THE TAXABLE LIMITS. BEFORE US, N O MATERIAL HAS BEEN PLACED BY THE ASSESSEE TO CONTROVERT THE FINDINGS OF LD.CIT(A). IN SUCH A SITUATION, WE FIND NO REASON TO INTERFERE WITH THE O RDER OF LD.CIT(A) AND THUS, THE GROUND OF THE IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IN ITA NO.97 9/PUN/2018 FOR A.Y. 2012-13 IS DISMISSED. 8. NOW, WE TAKE UP ASSESSEES APPEAL IN ITA NO.980/PUN/2 018 FOR A.Y. 2014-15. 8.1. ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y. 2014-15 ON 26.09.2014 DECLARING TOTAL INCOME OF RS.36,06,860/-. THE CAS E WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAM ED U/S 143(3) OF THE ACT VIDE ORDER DATED 14.12.2016 AND THE TOTAL IN COME WAS DETERMINED AT RS.47,62,506/-. AGGRIEVED BY THE ORDER OF A O, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.23.0 3.2018 GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAIS ED THE FOLLOWING GROUNDS : I. DISALLOWANCE OF VARIOUS EXPENSES RS.4,21,334/ : 1.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LEARNED COMMISSIONER OF INCOME TAX - (APPEALS) [(CIT -(A)] ERRED IN CONFIRMING DISALLOWANCE OF VARIOUS EXPENSES AGGREGA TING TO RS. 4,21,334/ -. MADE BY THE LEARNED ASSESSING OFFICER ON THE GROUND THAT THEY WERE NOT WHOLLY AND EXCLUSIVELY RELATED T O THE BUSINESS OF THE APPELLANT. 5 1.2 IT IS SUBMITTED BY THE APPELLANT THAT THE EXPE NSES HAVE BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE BUSINESS OF THE APPELLANT. 1.3 THE LOWER AUTHORITIES ERRED IN RESORTING TO A D-HOC DISALLOWANCES. IN VIEW OF THE ABOVE, THE APPELLANT PRAYS THAT THE DIS ALLOWANCE MADE AY KINDLY BE DELETED AS THE SAME IS UNWARRANTE D AND UNJUSTIFIED. II. DISALLOWANCE OF INTEREST PAID RS.4,92,016/-: 2.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LEARNED COMMISSIONER OF INCOME TAX - (APPEALS) [(CIT - (A)] ERRED IN CONFIRMING THE DISALLOWANCE OF INTEREST PAID RS. 4, 92,016/ - BY THE LEARNED ASSESSING OFFICER ON THE GROUND THAT NO TAX AT SOURCE (TDS) HAS BEEN DEDUCTED AND PAID ON OR BEFORE THE DUE DAT E OF FILING THE RETURN OF INCOME. 2.2 IT IS SUBMITTED THAT THE APPELLANT HAS NOT DED UCTED TAX TDS) AS FORM NO 15H/15G FROM THE PAYEE WERE RECEIVED AND THE SAME WAS BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER. IT MAY ALSO BE NOTED THAT THE RESPECTIVE PAYEES HAVE PROPERLY INCL UDED THE INTEREST INCOME IN THEIR RETURN OF INCOME. III. DISALLOWANCE OF DEPRECIATION RS.1,01,852/-: 3.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX - (APPEALS) [(CIT - (A)] ERRED IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION RS. 1,0 1,852/ - BY THE LEARNED ASSESSING OFFICER ON THE GROUND THAT THE AS SET WAS USED FOR PERSONAL PURPOSE BY THE APPELLANT AND THEREFORE THE ENTIRE DEPRECIATION CANNOT BE CONSIDERED AS WHOLLY AND EXC LUSIVELY FOR BUSINESS OF THE APPELLANT. THE APPELLANT PRAYS THAT THE DISALLOWANCE OF DEPREC IATION MAY KINDLY BE DELETED AS THE SAME IS UNWARRANTED AND UN JUSTIFIED. 9. FIRST GROUND IS WITH RESPECT TO DISALLOWANCE OF VARIOUS E XPENSES AMOUNTING TO RS.4,21,334/-. 9.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO O N PERUSING THE PROFIT AND LOSS ACCOUNT NOTICED THAT ASSESSEE HAS CLAIME D VARIOUS EXPENSES AGGREGATING TO RS.28,08,892/- (THE DETAILS OF WHICH WERE GIVEN AT PARA 3 AND PAGE 2 OF THE ASSESSMENT ORDER). AO NOT ICED THAT SINCE THE EXPENSES HAVE BEEN INCURRED IN CASH AND PAYMENTS WERE MADE THOUGH SELF-MADE VOUCHERS AND WERE NOT SUPPORTED BY THIRD PARTY BILLS, THE EXCESS CLAIM CANNOT BE RULED OUT. HE THEREFORE OUT OF THE AGGREGATE EXPENSES OF RS.28,08,892/- DISALLOWED 20% OF SUCH EXPENSES AND MADE 6 DISALLOWANCE OF RS.5,61,778/-. AGGRIEVED BY THE ORDER OF AO , ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO GRANTED PARTIAL RE LIEF TO THE ASSESSEE BY OBSERVING AS UNDER : 6.1 THE PERUSAL OF LEDGER ACCOUNTS, IN RESPECT OF ABOVE VARIOUS EXPENSES, FILED DURING THE COURSE OF APPELLATE PROC EEDINGS, REVEALS THAT MAJORITY OF THE EXPENSES HAD BEEN INCURRED IN CASH, WHICH ARE NOT OPEN FOR VERIFICATION. THE APPELLANT, HOWEVER, SQUARELY FAIL ED TO PRODUCE THESE VOUCHERS FOR VERIFICATION, THEREFORE, THE GENUINENESS OF SAME COULD NOT BE ASCERTAINED. CONSIDERING THE NATURE OF EXPENSES, CO UPLED WITH SELF MADE VOUCHERS MAINTAINED AGAINST THESE EXPENDITURES, THE POSSIBILITY OF EXCESS / UNVERIFIABLE / UNRELATED-NON BUSINESS EXPENSES CA NNOT BE RULED OUT. ON THE OTHER HAND, THE AO HAS ALSO NOT BROUGHT ANY MAT ERIAL ON RECORD OR GIVEN ANY JUSTIFICATION TO PROVE THAT THESE EXPENSE S WERE NOT INCURRED FOR BUSINESS BEFORE MAKING AD-HOC DISALLOWANCE @ 20%. C ONSIDERING THE FACTS IN ENTIRETY, THE DISALLOWANCE @ 15% WILL BE REASONA BLE TO MEET END OF JUSTICE. ACCORDINGLY THE DISALLOWANCE TO THE EXTENT OF RS. 4,21,334/-, AGAINST VARIOUS EXPENSES AS ABOVE, IS SUSTAINED AND BALANCE AMOUNT OF RS. 1,40,444/- IS DELETED. THIS GROUND OF APPEAL IS PARTLY ALLOWED. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APP EAL BEFORE US. 10. BEFORE US, ASSESSEE IN THE GROUNDS HAS MENTIONED THA T THE EXPENSES HAVE BEEN WHOLLY AND EXCLUSIVELY FOR THE PURPO SE OF BUSINESS AND THE LOWER AUTHORITIES ERRED IN RESORTING TO ADHOC DI SALLOWANCE. BEFORE US, LD.D.R. SUPPORTED THE ORDER OF LOWER AUTHORITIES. 11. WE HAVE HEARD THE LD.D.R. AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT LD.CIT(A) AFTER CONSIDERING THE FACTS HAS NOTED THAT ASSESSEE HAS FAILED TO SUBMIT ALL THE VOUCHERS FOR VERIFICATIO N AND THEREFORE GENUINENESS OF THE SAME COULD NOT BE ASCERTAIN ED. HE ALSO HELD THAT AO HAS NOT BROUGHT ANY MATERIAL ON RECORD TO PROVE THAT THE EXPENSES WERE NOT INCURRED FOR THE PURPOSE OF BUSINESS. HE ACCORDINGLY UPHELD THE DISALLOWANCE TO THE EXTENT OF 15%. WE FIND THA T IN THE CASE OF ASSESSEE FOR A.Y. 2012-13, THE ADHOC DISALLOWANCE MADE BY AO AT 15% OF REFRESHMENT, SALESMAN AND TRAVELLING EXPENSES WER E DISALLOWED 7 BY LD.CIT(A). IN THE PRESENT CASE, WE FIND THAT REFRESHMEN T AND REPAIRS AND MAINTENANCE EXPENSES ARE TO THE EXTENT OF RS.2,82,30 5/-. BEFORE US, REVENUE HAS NOT POINTED OUT ANY DISTINGUISHING FEATURE S IN THE FACTS OF THE CASE FOR THE YEAR UNDER CONSIDERATION AND THAT O F ASSESSEE FOR A.Y. 2012-13. IN SUCH A SITUATION, WE ARE OF THE VIEW THAT WHEN THE EXP ENSES ON THE SAME HEAD WERE DISALLOWED BY LD.CIT(A) IN A.Y. 2012- 13 AND WHERE THERE WAS NO CHANGE IN MATERIAL FACTS FOR A.Y. 2012 -13 AND A.Y. 2014-15, NO DISALLOWANCE ON THAT ACCOUNT CAN BE MADE F OR THE YEAR UNDER CONSIDERATION. AS FAR AS THE DISALLOWANCE OF VARIOUS OTHER BALANCE EXPENSES OF RS.25,26,387/- IS CONCERNED, WE ARE OF THE VIEW THAT THE DISALLOWANCE TO THE EXTENT OF 10% WOULD MEET THE ENDS OF JUSTICE. WE THEREFORE DIRECT ACCORDINGLY. THUS, THE GROUND OF THE ASSESSEE IS PARTLY ALLOWED. 12. GROUND NO.2 IS WITH RESPECT TO DISALLOWANCE OF INTEREST EXPENSES OF RS.4,92,016/-. 12.1. AO NOTICED THAT DURING THE YEAR ASSESSEE HAS PAID INTEREST AGGREGATING TO RS.4,92,016/- TO VARIOUS PARTIES, THE DETAI LS OF WHICH WERE GIVEN AT PARA 4 OF THE ASSESSMENT ORDER. HE NOTIC ED THAT NO TDS WAS DEDUCTED BEFORE MAKING THE PAYMENT. HE ACCORDINGLY , BY INVOKING THE PROVISIONS OF SEC.40(A)(IA) OF THE ACT, DISALLOWED THE ENTIRE INTEREST EXPENSES AT RS.4,92,016/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A). BEFORE LD.CIT(A) IN HIS WRITTEN SUBMISSIONS ASSESSEE INTER-ALIA SUBMITTED THAT HE HAS O BTAINED FORM 15H/15G FROM THE PARTIES TO WHOM THE INTEREST WAS PAID . IT WAS FURTHER SUBMITTED THAT THE PARTIES HAD REFLECTED THE INTE REST INCOME IN THEIR RESPECTIVE RETURNS AND THEREFORE, NO DISALLOWANCE IS CALLED FOR IN 8 THE PRESENT CASE. LD.CIT(A) HOWEVER DID NOT ACCEPT THE CONTENTIONS OF ASSESSEE AND UPHELD THE ORDER OF AO BY OBSERVING AS UNDER : 9. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE, THE FINDINGS OF THE AO, THE SUBMISSIONS OF THE LD. AR OF THE APPELL ANT AND MATERIAL PLACED ON RECORD. FROM THE FACTS OF THE CASE IT IS NOTICE D THAT THE AO HAD DISALLOWED INTEREST EXPENSES OF RS.4,92,016/ U/S.40 (A)(IA) OF THE ACT, FOR NON DEDUCTION OF TAX AT SOURCE. DURING THE APPELLA NT PROCEEDINGS, THE LD. AR CLAIMED THAT THE APPELLANT HAD OBTAINED 15G/15H FORMS FROM THE RESPECTIVE CREDITORS AND THAT LENDING PARTIES HAD F ILED THEIR RESPECTIVE RETURNS OF INCOME AND OFFERED INTEREST INCOME FOR T AX. IT IS PERTINENT TO MENTION HERE THAT THE LD. AR HAS NOT FILED DETAILS/ PROOF OF FORM NO.15G/15H FILED WITH THE CONCERNED COMPETENT AUTHO RITIES, THEREFORE, THE SAME IS NOT TENABLE. AS REGARDS THE CLAIM OF FILIN G OF RETURN OF INCOME BY THE ABOVE PARTIES IS CONCERNED IT IS NOTICED THAT T HE APPELLANT HAD FAILED TO FURNISH THE CERTIFICATES FROM THE ACCOUNTANT REGARD ING INCLUSION OF ABOVE INCOME IN THE RETURN OF INCOME FILED AND PAYMENT OF TAX AGAINST THE SAID INCOME, THEREFORE, THE SAME IS NOT TENABLE, ACCORDI NGLY REJECTED. IN VIEW OF THESE FACTS, THE DISALLOWANCE OF RS.4,92,016/-, 40( A)(IA) OF THE ACT, FOR NON DEDUCTION OF TAX, IS HEREBY SUSTAINED AND THIS GROU ND OF APPEAL IS DISMISSED. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN AP PEAL BEFORE US. 13. BEFORE US, LD.D.R. SUPPORTED THE ORDER OF AO. 14. WE HAVE HEARD THE LD.D.R. AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESPECT TO DISALLO WANCE U/S 40(A)(IA) OF THE ACT. WE FIND THAT BEFORE LD.CIT(A), ASSESSEE SUB MITTED THAT THE PARTIES HAD REFLECTED THE INTEREST INCOME IN THE IR RESPECTIVE RETURNS. WE FIND THAT HONBLE DELHI HIGH COURT IN THE C ASE OF CIT VS. ANSAL LAND MARK TOWNSHIP PVT. LTD., REPORTED IN (2015) 377 ITR 635, HAS HELD THAT INSERTION OF SECOND PROVISO TO SEC.40(A)(IA) OF THE ACT IS DECLARATORY AND CURATIVE IN NATURE AND HAS RETROSPECTIV E EFFECT FROM 01.04.2005. IT HAS FURTHER HELD THAT AS LONG AS PAYEE OR RESIDENT HAS FILED ITS RETURN OF INCOME DISCLOSING THE PAYMENT RECEIVED BY AND IN WHICH THE INCOME EARNED BY IT IS EMBEDDED AND HAS ALSO PAID TAXES ON 9 SUCH INCOME, THEN NO DISALLOWANCE CAN BE MADE U/S 40(A)(IA) OF THE ACT. BEFORE US, REVENUE HAS NOT POINTED OUT ANY CONTRARY BIN DING DECISION IN ITS SUPPORT. IN VIEW OF SUBMISSION OF ASSESSEE BEFORE LD .CIT(A) THAT THE PAYEES HAVE REFLECTED THE AMOUNT RECEIVED BY THEM FROM THE ASSESSEE AS THEIR INCOME AND IN THE LIGHT OF THE AFORESAID DECISION OF HON BLE DELHI HIGH COURT, WE RESTORE THE ISSUE BACK TO THE FILE OF AO TO DECIDE THE ISSUE AFRESH AFTER GIVING DUE OPPORTUNITY OF HEARING TO TH E ASSESSEE AND THUS, THE GROUND OF THE ASSESSEE IS ALLOWED FOR STA TISTICAL PURPOSES. 15. THIRD GROUND IS WITH RESPECT TO DISALLOWANCE OF DEPRECIA TION OF RS.1,01,852/-. 15.1. AO NOTICED THAT ASSESSEE HAS DEBITED RS.2,03,740/- ON ACCOUNT OF DEPRECIATION ON MOTOR CAR. AO WAS OF THE VIEW THAT SINC E ASSESSEE WAS HAVING ONLY ONE VEHICLE, HE DISALLOWED 50% OF SUCH DEPRECIAT ION I.E., OF RS.1,01,852/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CA RRIED THE MATTER BEFORE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE GRANTED PARTIAL RELIEF TO THE ASSESSEE BY OBSERVING AS UND ER : 12. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE, THE FINDINGS OF THE AO, THE SUBMISSIONS OF THE LD. AR OF THE APPELLANT AND MATERIAL PLACED ON RECORD. FROM THE FACTS OF THE CASE IT IS NOTICED TH AT THE AO HAD DISALLOWED RS. 1,01,852/-, I.E. 50% OF DEPRECIATION CLAIMED ON MOTOR VEHICLE, WITH THE PLEA THAT PERSONAL ELEMENT CANNOT BE RULED OUT. DUR ING THE APPELLATE PROCEEDINGS, THE LD. AR CLAIMED THAT SINCE THE APPE LLANT IS DISTRIBUTOR OF MEDICINES FOR RAIGAD DISTRICT, HE HAS TO TRAVEL CON TINUOUSLY FOR HIS BUSINESS THAT IS TO MEDICINE COMPANIES AS WELL AS TO THE CUS TOMERS FOR SETTLEMENT OF THEIR DUES/COMPLAINTS. IT IS CLAIMED THAT THE VEHIC LE IS WHOLLY AND EXCLUSIVELY USED FOR BUSINESS. %. CONSIDERING THE FACTS IN ENTIRETY, IN MY CONSIDERED VIEW, THE DISALLOWANCE OF 25% WILL BE REASONABLE TO MEET END OF JUSTICE. ACCORDINGLY THE DISALLOWANCE T O THE EXTENT OF RS 50,926/-, FOR PERSONAL USE OF INNOVA CAR, IS SUSTAI NED AND BALANCE AMOUNT OF RS. 50,926/- IS DELETED. THIS GROUND OF A PPEAL IS PARTLY ALLOWED. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW BEFORE US. 10 16. BEFORE US, LD.D.R. SUPPORTED THE ORDER OF AO AND LD.CIT(A). 17. WE HAVE HEARD THE LD.D.R. AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT LD.CIT(A) WHILE GRANTING PARTIAL RELIEF TO THE ASSE SSEE, HAS NOTED THAT FOR THE PURPOSE OF BUSINESS ASSESSEE HAS TO TRAVEL TO VARIOUS PLACES. HE CONSIDERING THE TOTALITY OF THE FACTS HELD THAT 25% OF DEPRECIATION TO BE REASONABLE AND ACCORDINGLY DISALLOWED D EPRECIATION TO THE EXTENT OF RS.50,926/-. BEFORE US, NO MATERIAL HAS BE EN PLACED BY THE ASSESSEE TO CONTROVERT THE FINDINGS OF LD.CIT(A). WE THEREFORE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD.CIT(A). THUS, THE GROUND OF THE ASSESSEE IS DISMISSED. 18. IN THE RESULT, APPEAL OF ASSESSEE IN ITA NO.980/PUN /2018 FOR A.Y. 2014-15 IS PARTLY ALLOWED. 19. TO SUM UP, APPEAL OF ASSESSEE IN ITA NO.979/PUN/20 18 IS DISMISSED AND THE APPEAL OF ASSESSEE IN ITA NO.980/ PUN/2018 IS PARTLY ALLOWED. ORDER PRONOUNCED ON 22 ND DAY OF MARCH, 2019. SD/- SD/- ( VIKAS AWASTHY ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER ' / ACCOUNTANT MEMBER PUNE; DATED : 22 ND MARCH, 2019. YAMINI 11 #$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4 5. 6. CIT(A) 2, PUNE & CIT(A)-2, THANE. PR.CIT-2, THANE. '#$ %%&',) &', *+ / DR, ITAT, SMC PUNE; $-.// GUARD FILE. / BY ORDER // TRUE COPY // 012%3&4 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.