The ACIT, Central Circle, Baroda V. M/s. Steelco Gujarat Ltd., Baroda

ITSSA 108/AHD/2010

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 7995 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2003-2004
• Appeal Filed On: 04-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAMES KURAIR
• Keywords: Depreciation

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE S/SHRI D.K.TYAGI, JM AND A. K. GARODIA, AM. ASSTT. CIT, CENTRAL CIRCLE-2, BARODA. VS. M/S STEELCO GUJARAT LTD., 4 TH FLOOR MARBAL ARC, RACE COURSE CIRCLE, BARODA. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI JAMES KURAIR, DR RESPONDENT BY:- SHRI MUKUND BAKSHI, AR DATE OF HEARING :30/11/2011 DATE OF PRONOUNCEMENT :30/11/11. O R D E R PER D. K. TYAGI, JUDICIAL MEMBER . THESE ARE TWO APPEALS FILED BY THE REVENUE AGAINST TWO SEPARATE ORDERS OF LD. CIT(A) DATED 03.11.2009 FOR ASST. YEA RS 2003-04 & 2007- 08. SINCE THE APPEALS PERTAIN TO THE SAME ASSESSEE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON O RDER FOR THE SAKE OF CONVENIENCE. 2. THE GROUND RAISED IN ASST. YEAR 2003-04 IS AS UN DER :- IT(SS)A NOS.108 & 109/AHD/2010 ASST. YEARS :2003-04 & 2007-08 IT(SS)A NOS.108 & 109/AHD/2010 ASST. YEARS 2003-04 & 2007-08 2 (I) THE LD. CIT(A) HAS ERRED IN LAW AND FACTS AND CIRCU MSTANCES OF THE CASE IN DELETING THE FOLLOWING ADDITIONS: A. REIMBURSEMENT OF DOWN PAYMENT FOR THE CAR OF RS.4,08,466/- B. REIMBURSEMENT OF INSTALMENTS OF RS.2,50,000/- C. DISALLOWANCE OF DEPRECIATION ON CAR OF RS.1,02,697/ - 3. THIS GROUND RAISED BY THE REVENUE RELATES TO DEL ETION OF ADDITION ON ACCOUNT OF RE-IMBURSEMENT OF DOWN PAYMENT OF RS. 4,08,466/- MADE BY THE DIRECTOR (FINANCE) OF THE ASSESSEE COMPANY, DISALLOWANCE OF RE- IMBURSEMENT OF INSTALLMENT OF RS.2,50,000/- U/S 36( 1)(III) AND DISALLOWANCE OF DEPRECIATION OF RS.1,02,697/- AS TH E CAR WAS NOT IN THE NAME OF THE COMPANY. THE AO DURING THE COURSE OF AS SESSMENT PROCEEDINGS FOUND THAT MR.N. M. MOHONOT HAS PURCHAS ED A CAR IN HIS NAME AGAINST DOWN PAYMENT OF RS.4,08,466/-. THIS AM OUNT WAS REIMBURSED BY THE ASSESSEE COMPANY WITHOUT PASSING ANY RESOLUTION. THE AO, THEREFORE, WAS OF THE VIEW THAT ASSESSEE COMPAN Y HAD DIVERTED ITS FUNDS FOR NON-BUSINESS PURPOSES AND ADDED THIS SUM OF RS.4,08,466/- TO THE INCOME OF ASSESSEE. THE AO FURTHER FOUND THAT A SSESSEE HAS ALSO PAID FIVE INSTALMENTS OF RS.50,000/- EACH ON BEHALF OF M R. MOHONOT. THE SAME WAS ALSO DISALLOWED U/S 36(1)(III) OF THE ACT. THE DISALLOWANCE ON THIS ACCOUNT WAS OF RS.2,50,000/-. THE DEPRECIATION OF R S.1,02,697/- CLAIMED BY THE ASSESSEE ON THIS CAR WAS ALSO DISALLOWED AS THE CAR WAS NOT IN THE NAME OF THE ASSESSEE COMPANY. IT(SS)A NOS.108 & 109/AHD/2010 ASST. YEARS 2003-04 & 2007-08 3 4. THE ASSESSEE WENT IN APPEAL BEFORE THE FIRST APP ELLATE AUTHORITY WHEREIN IT WAS SUBMITTED BY THE LD. COUNSEL OF THE ASSESSEE THAT FOR THE DIRECTOR (FINANCE) WAS ENTITLED TO A COMPANY MAINTA INED CAR AS PER TERMS OF HIS EMPLOYMENT. THE COMPANY HAS IN TERMS OF AGRE EMENT ASKED THE DIRECTOR (FINANCE) FOR PURCHASE OF CAR BY TAKING LO AN FROM THE BANK IN HIS INDIVIDUAL NAME AS THE COMPANY WAS A SICK COMPANY A ND WAS NOT ELIGIBLE FOR GETTING LOAN FROM THE BANK. AS PER AGREEMENT EN TERED INTO BETWEEN THE DIRECTOR (FINANCE) AND THE ASSESSEE COMPANY DATED 3 .4.2003 THE COMPANY HAS ASKED THE DIRECTOR (FINANCE) FOR PURCHASE OF VE HICLE, TO BE PROVIDED BY THE COMPANY BY GETTING LOAN UPTO RS.6.00 LAKHS. THE MARGIN MONEY OF 10% RTO TAX, OCTROI AND INSURANCE PREMIUM INCLUDING FIRST EMI WERE TO BE PAID BY THE COMPANY DIRECTLY TO THE DEALER. ON P AYMENT OF ALL EMIS, THE VEHICLE WAS TO BE TRANSFERRED IN THE NAME OF TH E COMPANY. AS PER THE TERMS OF THE AGREEMENT, THE EMPLOYEE WILL NOT HAVE ANY RIGHT OVER THE VEHICLE AND THE EMI PAID WILL NOT BE PART OF HIS MO NTHLY EMOLUMENTS. THE FEW OF THE TERMS OF THE AGREEMENT SPECIFY THAT THE COMPANY WAS BOUND TO PROVIDE A VEHICLE TO THE DIRECTOR (FINANCE ) ON ITS OWN COST. THE EMPLOYEE HAD NO RIGHT ON THE VEHICLE. THE VEHICLE W AS TO BE TRANSFERRED IN THE NAME OF THE COMPANY AFTER PAYMENT OF ALL MONTHL Y EMIS. THE RTO- TAX, OCTROI AND INSURANCE PREMIUM WAS TO BE PAID BY THE COMPANY. THUS FOR ALL PRACTICAL PURPOSES, THE VEHICLE BELONG TO T HE COMPANY EXCEPT THE NAME. IT WAS FURTHER SUBMITTED BY THE LD. COUNSEL T HAT THE PAYMENT OF IT(SS)A NOS.108 & 109/AHD/2010 ASST. YEARS 2003-04 & 2007-08 4 MARGIN MONEY OF RS.4,08,466/- AND INSTALMENTS (EMIS ) OF RS.2,50,000/- WERE NEVER CLAIMED AS EXPENSES BY THE COMPANY AND T HEREFORE, THE AO WAS NOT JUSTIFIED IN MAKING ADDITION OF THE AFORESA ID SUMS IN THE INCOME OF THE COMPANY. AS REGARDS THE DISALLOWANCE OF DEPR ECIATION OF RS.1,02,697/-, IT WAS SUBMITTED THAT FOR ALL PRACTI CAL PURPOSES, THE OWNERSHIP OF THE VEHICLE VESTED WITH THE COMPANY. T HE EMPLOYEE HAD NO RIGHT OVER THE VEHICLE. THE RTO-TAX, OCTROI AND INS URANCE PREMIUM OF THE VEHICLE WERE PAID BY THE COMPANY AND ACCEPTED BY TH E AO. NO DISALLOWANCE WAS MADE FOR SUCH PAYMENTS. THE COMPAN Y WAS THE REAL OWNER AND WAS THUS ENTITLED TO THE DEPRECIATION. RE LIANCE WAS PLACED BY THE LD. COUNSEL ON VARIOUS CASE LAWS, DETAILS OF WH ICH IS GIVEN AT PAGE -8 OF THE WRITTEN SUBMISSION. 5. THE LD. CIT(A) AFTER CONSIDERING THE CONTENTIONS OF AO AND THE SUBMISSIONS OF THE ASSESSEE DELETED THE ADDITIONS B Y OBSERVING AS UNDER :- 5.2 I HAVE CAREFULLY CONSIDERED THE ABOVE SUBMISSI ON OF THE LD. COUNSEL AS WELL AS FACTS OF THE CASE. I HAVE ALSO GONE THRO UGH THE DECISIONS RELIED UPON BY THE LD. COUNSEL. I DISAGREE WITH THE CONTEN TION OF THE AO. THE DIRECTOR (FINANCE) WAS TO BE GIVEN A COMPANY MAINTA INED CAR AS PER TERMS OF HIS EMPLOYMENT WHICH WAS NOT DISPUTED BY T HE AO. SHE HAS NOWHERE DISPUTED THE AGREEMENT ENTERED INTO BETWEEN THE COMPANY AND THE DIRECTOR (FINANCE). SHE HAS NOT DISPUTED THAT T HE DIRECTOR (FINANCE) HAS NOT PURCHASED THE CAR AND RTO-TAX, INSURANCE PR EMIUM AND OCTROI WERE NOT PAID BY THE COMPANY. THEN, HOW SHE CAN SAY THAT SHRI MOHONOT HAS MISAPPROPRIATED THE FUNDS OF THE COMPANY. EVEN IF, HE HAS MISAPPROPRIATED THE FUNDS OF THE COMPANY, HOW IT BE COMES THE INCOME OF THE COMPANY. FOR MISAPPROPRIATION OF FUNDS, THE AO HAS NO RIGHT TO COMMENT. SHE CAN EXAMINE THE ALLOWABILITY OF MISAPP ROPRIATION UNLESS IT(SS)A NOS.108 & 109/AHD/2010 ASST. YEARS 2003-04 & 2007-08 5 THE ASSESSEE CLAIMS THE EXPENSES OF SUCH MISAPPROPR IATION. PERHAPS, THE AO COULD NOT UNDERSTAND THE PROVISIONS OF SECTION 4 OF THE ACT OTHERWISE SUCH ADDITION COULD NOT HAVE BEEN MADE. WHEN THE AS SESSEE COMPANY HAS NOT CLAIMED ANY DEDUCTION IN THE PROFIT AND LOSS AC COUNT, HOW THE ADDITION CAN BE MADE FOR THE RE-IMBURSEMENT OF THE DOWN PAYMENT MADE BY THE DIRECTOR (FINANCE). CONSIDERING THE FACTS OF THE CASE, I AM OF THE OPINION THAT THE AO WAS NOT JUSTIFIED IN MAKING THE ADDITION OF THE AMOUNTS WHICH WERE NOT ROUTED THROUGH THE PROFIT AN D LOSS ACCOUNT OF THE COMPANY. THE AO CAN DISALLOW ANY EXPENDITURE CHARGE D TO PROFIT AND LOSS ACCOUNT IF, THE SAME IS NOT INCURRED WHOLLY AN D EXCLUSIVELY FOR THE BUSINESS PURPOSE. AS REGARDS THE DIVERSION OF FUNDS FOR NON-BUSINESS PURPOSE, IT IS TO BE SEEN WHETHER PROVIDING A VEHIC LE TO THE EMPLOYEE AS PER TERMS OF THE EMPLOYMENT CAN BE TERMED AS A NON BUSINESS PURPOSE. IN MY VIEW CERTAINLY NOT. SINCE, THE COMPANY WAS A SIC K COMPANY, IT COULD NOT GET LOAN FROM THE BANK AND FOR THIS REASON THE VEHICLE ENTITLED TO THE DIRECTOR (FINANCE) WAS PURCHASED THROUGH HIS HELP. THE COMPANY WAS HAVING THE RIGHT OVER THE VEHICLE AND WAS TO BE MAI NTAINED FOR THE DIRECTOR (FINANCE). THE RE-IMBURSEMENT OF THE MARGI N MONEY AND EMIS CANNOT BE SAID TO BE FOR NON-BUSINESS PURPOSES AND THEREFORE, THE AO WAS NOT JUSTIFIED IN DISALLOWING THE SAME. EVEN OTHERWI SE, IF THE INTEREST BEARING FUNDS ARE DIVERTED FOR NON-BUSINESS PURPOSE S, THE INTEREST PORTION CAN BE DISALLOWED AND NOT THE DIVERTED FUNDS. SEC.3 6(1)(III) IS REGARDING ALLOWANCE OF INTEREST ON BORROWED FUND AND NOT FOR ALLOWANCE OF BORROWED FUNDS. THE DISALLOWANCES SO MADE FOR RS.4, 08,466/- AND RS.2,50,000/- ARE ACCORDINGLY DELETED. THE DEPRECIA TION IS ALLOWABLE IN VIEW OF THE DECISION OF THE SUPREME COURT IN MYSORE MINERALS LTD. VS. CIT REPORTED IN 239 ITR 775 (SC) AND THE DECISION O F THE AHMEDABAD TRIBUNAL IN THE CASE OF LALIT CHANDRA M. PATEL VS. ITO 45 TTJ (AHD) 31. FOR ALL PRACTICAL PURPOSES, THE CAR BELONGED TO THE COMPANY. THE DISALLOWANCE OF DEPRECIATION IS THUS DELETED. ACCOR DINGLY, THE FOURTH, FIFTH AND SIXTH GROUNDS OF APPEAL ARE ALLOWED. 6. BEFORE US, THE LD. DR RELYING ON THE ORDER OF AO SUBMITTED THAT THE CAR WAS NOT IN THE NAME OF THE COMPANY. THEREFORE, IN THE INTEREST OF JUSTICE THE AO HAD ADDED THE ENTIRE DOWN PAYMENT TO THE TOTAL INCOME, THE RE-IMBURSEMENT OF INSTALLMENT WAS DISALLOWED U/ S 36(1)(III) AND THE DEPRECIATION WAS ALSO DISALLOWED. THE LD. CIT(A) WA S NOT JUSTIFIED IN IT(SS)A NOS.108 & 109/AHD/2010 ASST. YEARS 2003-04 & 2007-08 6 DELETING THE ADDITIONS. HIS ORDER MAY KINDLY BE SET ASIDE AND THAT OF THE AO BE RESTORED. 7. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSESS EE SUPPORTED THE ORDER OF LD. CIT(A) AND SUBMITTED THAT SINCE FOR AL L PRACTICAL PURPOSES THE CAR BELONGED TO THE ASSESSEE COMPANY AND THE DIRECT OR (FINANCE) HAD NO RIGHT OVER THE CAR, THE DISALLOWANCES WERE WRONGLY MADE BY THE AND THE LD. CIT(A) HAS RIGHTLY DELETED THE SAME. THERE IS N O INFIRMITY IN HIS ORDER. THEREFORE, THE SAME MAY KINDLY BE UPHELD. 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND GOIN G THROUGH THE MATERIAL ON RECORD, WE FIND THAT UNDISPUTED FACTS A RE THAT THERE WAS AN AGREEMENT BETWEEN THE DIRECTOR(FINANCE) THAT AS PER TERMS OF HIS EMPLOYMENT HE WAS ENTITLED TO A COMPANY MAINTAINED CAR. THE COMPANY IN TERMS OF THE AGREEMENT ASKED THE DIRECTOR (FINAN CE) FOR PURCHASE OF CAR BY TAKING LOAN FROM THE BANK IN HIS INDIVIDUAL NAME , AS THE COMPANY WAS A SICK COMPANY AND WAS NOT ELIGIBLE FOR GETTING LOA N FROM THE BANK. THE MARGIN MONEY OF 10%, RTO-TAX, OCTROI AND INSURANCE PREMIUM INCLUDING FIRST EMI WERE TO BE PAID BY THE COMPANY DIRECTLY TO THE DEALER. ON PAYMENT OF ALL EMIS, THE VEHICLE WAS TO BE TRANS FERRED IN THE NAME OF THE COMPANY. AS PER THE AGREEMENT THE DIRECTOR (FIN ANCE) WOULD NOT HAVE ANY RIGHT OVER THE VEHICLE AND THE EMI PAID WOULD N OT BE PAID OF HIS MONTHLY EMOLUMENTS. THE FEW OF THE TERMS OF THE AGR EEMENT SPECIFY THAT IT(SS)A NOS.108 & 109/AHD/2010 ASST. YEARS 2003-04 & 2007-08 7 THE COMPANY WAS BOUND TO PROVIDE A VEHICLE TO THE D IRECTOR(FINANCE) ON ITS OWN COST. FOR ALL PRACTICAL PURPOSES THE VEHICL E BELONGED TO THE COMPANY EXCEPT THE NAME. THE PAYMENT OF MARGIN MONE Y OF RS.4,08,466/- AND INSTALLMENTS (EMIS) OF RS.2,50,00 0/- WERE NEVER CLAIMED AS EXPENSES BY THE COMPANY AND THEREFORE, T HE AO WAS NOT JUSTIFIED IN MAKING ADDITIONS OF THE AFORESAID SUMS . THUS THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITIONS. THE LD. CIT(A) WHILE DELETING THE DEPRECIATION HAS RELIED ON THE DECISION OF HONBLE SUPREME COURT IN MYSORE MINERALS LTD. VS. CIT REPORTED IN 239 ITR 77 5 (SC)AND THE DECISION OF THE TRIBUNAL, AHMEDABAD IN THE CASE OF LALIT CHANDRA M. PATEL VS. ITO 45 TTJ (AHD) 31. WE ARE OF THE CONSID ERED VIEW THAT THE LD. CIT(A) HAS RIGHTLY DELETED THE IMPUGNED ADDITIONS. OUR VIEW IS SUPPORTED BY THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VARANASI AUTO SALES (P) LTD. (2010) 326 ITR 182 (AL L). THERE IS NO INFIRMITY IN HIS ORDER. THEREFORE, WE ARE INCLINED TO UPHOLD THE SAME. REVENUES APPEAL IS DISMISSED. 9. THE REVENUE FOR THE ASST. YEAR 2007-08 HAS RAISE D FOLLOWING GROUND IN ITS APPEAL :- 1. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS AND CIRCU MSTANCES OF THE CASE IN DELETING THE FOLLOWING ADDITIONS : A. DISALLOWANCE OF DEPRECIATION ON CAR RS.75,420/- B. ADDITION OF RS.10,00,000/- BASED NOTING ON SEIZED P APER. IT(SS)A NOS.108 & 109/AHD/2010 ASST. YEARS 2003-04 & 2007-08 8 10. DURING THE ASSESSMENT YEAR 2003-04, DEPRECIATIO N ON MOTOR CAR WAS DISALLOWED CONSIDERING THAT THE SAME WAS USED F OR PERSONAL PURPOSE OF THE DY. MANAGING DIRECTOR OF THE COMPANY, AND NO T OWNED BY THE COMPANY AND THEREFORE THE DEPRECIATION CLAIMED BY T HE COMPANY ON THE MOTOR CAR WAS DISALLOWED WHICH WAS WORKED OUT AS UN DER : WDV AS ON 1.4.2006 RS.5.02,802/- LESS: DEPRECIATION FOR THE YEAR @ 15% RS. 75,420/ - WDV AS ON 31.03.2007 RS.4,27,382/- THUS FOR THE YEAR UNDER CONSIDERATION THE AO DISALL OWED RS.75,420/- ON ACCOUNT OF DEPRECIATION CLAIMED ON MOTOR CAR. 11. IN APPEAL THE LD. CIT(A) ALLOWED THE CLAIM OF A SSESSEE BY OBSERVING AS UNDER :- 3.0 THE SECOND GROUND OF APPEAL IS REGARDING DISAL LOWANCE OF DEPRECIATION OF RS.75,420/- ON MOTOR CAR. I HAVE HE LD IN THE APPEAL FOR THE ASST. YEAR 2003-04 THAT THE DEPRECIATION IS ALL OWABLE IN VIEW OF THE DECISION OF THE SUPREME COURT IN MYSORE MINERALS LT D. VS. CIT REPORTED IN 239 ITR 775 (SC) AND THE DECISION OF THE AHMEDAB AD TRIBUNAL IN THE CASE OF LALIT CHANDRA M. PATEL VS. ITO 45 TTJ (AHD) 31. FOR ALL PRACTICAL PURPOSES, THE CAR BELONGED TO THE COMPANY. THE DISA LLOWANCE OF DEPRECIATION WAS THUS DELETED. FOR THE SAME REASONI NG, THE DISALLOWANCE OF DEPRECIATION IS DELETED. ACCORDINGLY, THE SECOND GROUND OF APPEAL IS ALLOWED. 12. SINCE THE LD.CIT(A)S ORDER FOR ASST. YEAR 2003 -04 HAS BEEN UPHELD BY US IN ITA NO.108/AHD/2010 IN WHICH LD. CI T(A) HAS HELD THAT THE CAR BELONGED TO THE ASSESSEE COMPANY, THE DISAL LOWANCE OF DEPRECIATION IN RESPECT OF THE SAME CAR DURING THE YEAR UNDER APPEAL HAS IT(SS)A NOS.108 & 109/AHD/2010 ASST. YEARS 2003-04 & 2007-08 9 RIGHTLY BEEN DELETED BY THE LD. CIT(A) AND NO INTER FERENCE ON OUR PART IS REQUIRED AND, THEREFORE, THE ORDER PASSED BY THE LD . CIT(A) IS UPHELD. THIS GROUND OF REVENUE IS DISMISSED. 13. AS REGARDS DELETION OF ADDITION OF RS.10,00,000 /-BASED NOTING ON SEIZED PAPER THE FACTS ARE THAT DURING THE ASSESSME NT PROCEEDINGS IT WAS NOTED BY THE AO THAT DURING THE COURSE OF SURVEY PR OCEEDINGS AT MUMBAI OFFICE A PAPER CONTAINING NOTING DATED 20.10.2006 O F CASH AMOUNT OF RS.10 LACS WAS FOUND. THE ASSESSEE WAS ASKED TO EXP LAIN THE SAME. IN REPLY TO THE SAME, ASSESSEE HAS STATED THAT THIS NO TING CONTAINS AN AMOUNT OF RS.10 LACS TRANSFERRED FROM PALEJ TO MUMBAI OFFI CE FOR MEETING SOME EXPENSES. THE EXPLANATION OF THE ASSESSEE WAS NOT F OUND TENABLE AND THIS AMOUNT WAS ADDED TO THE TOTAL INCOME OF ASSESSEE. 14. IN APPEAL, THE LD. CIT(A) DELETED THE ADDITION OF RS.10,00,000/- BY OBSERVING AS UNDER :- 4.0 THE THIRD GROUND OF APPEAL IS REGARDING THE AD DITION OF RS.10,00,000/- MADE ON THE BASIS OF NOTING DATED 20 .10.2006 ON A PAPER RECOVERED DURING THE COURSE OF SURVEY AT MUMBAI OFF ICE. IT WAS EXPLAINED BEFORE THE AO THAT THE AMOUNT OF 10 LAKH WAS TRANSF ERRED FROM PALEJ TO MUMBAI FOR MEETING SOME EXPENSES. THE LD. COUNSEL H AS SUBMITTED THAT ON RECEIPT OF THE AMOUNT FROM PALEJ OFFICE (HEAD OF FICE), THE RECIPIENT AT MUMBAI OFFICE HAS NOTED THE RECEIPT OF RS.10 LAKHS. THE AMOUNT OF TRANSFER FROM PALEJ OFFICE IS DULY RECORDED IN THE BOOKS OF ACCOUNTS. IT WAS FURTHER SUBMITTED THAT THIS EXPLANATION WAS REJ ECTED BY THE AO IT(SS)A NOS.108 & 109/AHD/2010 ASST. YEARS 2003-04 & 2007-08 10 WITHOUT ASSIGNING ANY REASON. CONSIDERING THE FACTS OF THE CASE, I AM OF THE VIEW THAT WHEN THE AMOUNT SENT FROM HEAD OFFICE PALEJ TO MUMBAI OFFICE IS FOUND RECORDED IN THE BOOKS OF ACCOUNT, N O ADDITION CAN BE MADE UNLESS IT IS ESTABLISHED THAT THE ACCOUNTING ENTRY IS BOGUS AND MADE AFTER THE SEARCH. ADDITION CANNOT BE MADE IF THE EXPLANAT ION IS NOT TENABLE IN VIEW OF THE AO. THE AO HAS NOT GIVEN ANY REASON FOR REJECTING THE BOOK VERSION. IN VIEW THEREOF, THE ADDITION CANNOT BE SU STAINED. THE ADDITION SO MADE IS HEREBY DELETED. THE THIRD GROUND OF APPEAL IS THUS ALLOWED. 15. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND GOI NG THROUGH THE MATERIAL ON RECORD WE FIND THAT ADDITION OF RS.10,0 0,000/- WAS MADE ON THE BASIS OF NOTING DATED 20.10.2006 ON A PAPER REC OVERED DURING THE COURSE OF SURVEY AT MUMBAI OFFICE. THE EXPLANATION OF THE ASSESSEE THAT THIS AMOUNT WAS TRANSFERRED FROM HEAD OFFICE TO BOM BAY FOR MEETING SOME EXPENSES AND WAS DULY RECORDED IN THE BOOKS OF ACCOUNTS, WAS NOT ACCEPTED BY THE AO WITHOUT MAKING ANY ENQUIRY AND W ITHOUT BRINGING ANY MATERIAL ON RECORD TO SUGGEST THAT THE ACCOUNTI NG ENTRY FOUND IN THE BOOKS OF ACCOUNT WAS BOGUS OR MADE AFTER THE SEARCH . IN VIEW OF THIS UNDISPUTED FACTS OF THIS CASE, LD. CIT(A) HAS RIGHT LY DELETED THE ADDITION AND, THEREFORE, WE ARE NOT INCLINED TO INTERFERE WI TH THE ORDER PASSED BY HIM AND THE SAME IS HEREBY UPHELD. THIS GROUND OF R EVENUE IS ALSO DISMISSED. IT(SS)A NOS.108 & 109/AHD/2010 ASST. YEARS 2003-04 & 2007-08 11 16. IN THE RESULT, BOTH THE APPEALS FILED BY THE RE VENUE ARE DISMISSED. ORDER WAS PRONOUNCED IN OPEN COURT ON 30.11.11. SD/- SD/- (A. K. GARODIA) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICI AL MEMBER AHMEDABAD, MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD 1.DATE OF DICTATION 30/11/2010. 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER.OTHER MEMBER 30 /11/2011 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 DICTATING 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 ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..