M/s Amar Ujala Publications Ltd, Agra v. ACIT, 4(1), Agra

CO 52/AGR/2007 | misc
Pronouncement Date: 28-07-2011 | Result: Allowed

Appeal Details

RSA Number 5220323 RSA 2007
Assessee PAN AADCA0275H
Bench Agra
Appeal Number CO 52/AGR/2007
Duration Of Justice 3 year(s) 7 month(s) 16 day(s)
Appellant M/s Amar Ujala Publications Ltd, Agra
Respondent ACIT, 4(1), Agra
Appeal Type Cross Objection
Pronouncement Date 28-07-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 28-07-2011
Date Of Final Hearing 11-07-2011
Next Hearing Date 11-07-2011
Assessment Year misc
Appeal Filed On 12-12-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH AGRA BEFORE SHRI P.K. BANSAL ACCOUNTANT MEMBER AND SHRI H.S. SIDHU JUDICIAL MEMBER ITA NO. 331/AGRA/2007 ASSTT. YEAR : 2003-04 M/S. AMAR UJALA PUBLICATIONS LTD. VS. A.C.I.T. 4(1) AGRA. GURU KA TAL AGRA. (PAN : AADCA 0275 H). ITA NO. 360/AGRA/2007 ASSTT. YEAR : 2003-04 A.C.I.T. 4(1) AGRA. VS. M/S. AMAR UJALA PUBLI CATIONS LTD. GURU KA TAL AGRA. C.O. NO. 52/AGRA/2007 ITA NO. 360/AGRA/2007 ASSTT. YEAR : 2003-04 M/S. AMAR UJALA PUBLICATIONS LTD. VS. A.C.I.T. 4(1) AGRA. GURU KA TAL AGRA. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI VED JAIN C.A. FOR RESPONDENT : SHRI WASEEM ARSHAD SR. DR ORDER PER P.K. BANSAL A.M. : BOTH THE CROSS APPEALS AND THE CROSS OBJECTION HA VE BEEN FILED AGAINST THE ORDER OF THE CIT(A) DATED 28.03.2007. BOTH THE APPEALS AND THE C ROSS OBJECTION HAD BEEN DISPOSED OF BY THIS TRIBUNAL VIDE ORDER DATED 17.04.2009. SUBSEQUENTLY MISCELLANEOUS APPLICATION WAS FILED BY THE ASSESSEE ON 18.08.2009 POINTING OUT THE MISTAKES CR EPT IN THE CONSOLIDATED ORDER OF THE TRIBUNAL DATED 17.04.2009 IN ITA NO. 331/AGR./2007 360/AGR. /2007 AND C.O. NO. 52/AGR./2007. THE MISCELLANEOUS APPLICATION WAS PARTLY ALLOWED BY THI S TRIBUNAL VIDE ORDER DATED 17.09.2010 AND 2 THE TRIBUNAL ORDER DATED 17.04.2009 WAS RECALLED FO R LIMITED PURPOSE FOR DISPOSING OF THE GROUND NO. 2 TO 5 OF ASSESSEES APPEAL (ITA NO. 331/AGRA/2 007) GROUND NO. 1(I) OF REVENUES APPEAL (ITA NO. 360/AGRA/2007) AND GROUND NO.1 OF THE ASSE SSEES CROSS OBJECTION. THE ONLY ISSUE INVOLVED IN GROUND NO. 2 TO 4 OF ITA NO. 331/AGRA/2 007 GROUND NO. 1(I) OF ITA NO. 360/AGRA/2007 AND GROUND NO. 1 OF CROSS OBJECTION N O. 52/AGRA/2007 IS RELATING TO DISALLOWANCE OF SALES RETURN BY THE ASSESSING OFFIC ER. THEREFORE ALL THESE GROUNDS IN APPEAL FILED BY THE ASSESSEE APPEAL FILED BY THE REVENUE AND TH E CROSS OBJECTION OF ASSESSEE ARE DISPOSED OF TOGETHER FOR THE SAKE OF CONVENIENCE. 2. THE BRIEF FACTS OF THE CASE RELATING TO THE DISA LLOWANCE OF SALES RETURN ARE THAT THE ASSESSING OFFICER NOTED DURING THE COURSE OF ASSESS MENT PROCEEDINGS THAT THE ASSESSEE HAS CLAIMED SALES RETURN AT RS.8373641/-. WHILE VERIFYI NG THE BRANCH WISE ANALYSIS OF THE SALES RETURN IT WAS FOUND THAT THOUGH THE SALES RETURN I N JHANSI MORADABAD AND AGRA WAS ONLY 5% OR LESS BUT IT WAS AT 7.7% IN VARANASI AND ALLAHABAD. THE ASSESSING OFFICER WAS OF THE OPINION THAT ALL THE SALES RETURN TRANSACTIONS WERE RECORDED MON TH-WISE IN A SINGLE DAY. WHEN THERE WAS SALES RETURN WHY THE ASSESSEE HAS PRINTED MORE COPIES OF THE NEWSPAPER THROUGHOUT THE YEAR ? THE ASSESSEE HAS ALSO REDUCED THE SALE PRICE IN ALLAHAB AD AND VARANASI TO RS.1.28. THEREFORE THE SALE RETURN SHOULD NOT BE SO HIGH. THE ASSESSING OFFICER ESTIMATED THE SALES RETURN @ 4% OF THE GROSS SALES WITHOUT GIVING THE BASIS OF HIS ESTIMATE AND DISALLOWED 3.7% OF THE SALES RELATING TO VARANASI AND ALLAHABAD AMOUNTING TO RS.2293452/-. T HE SALES RETURN EVEN MORE THAN 4% WAS ACCEPTED IN THE CASE OF OTHER BRANCHES. 3 3. WHEN THE MATTER WENT BEFORE THE CIT(A) THE CIT( A) ALLOWED THE SALES RETURN UPTO 7% AND RESTRICTED THE DISALLOWANCE AT THE RATE OF 0.7% AMOUNTING TO RS.433896/- BY OBSERVING AS UNDER : 3.4. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE SUBMISSION OF AR IN MY OPINION APPELLANT DESERVES TO SUCCEED PARTLY . THE APPELLANT HAS EXPLAINED THAT PRINTING OF EXTRA COPY ARE NORMAL FEATURE IN T HIS INDUSTRY AND SALES RETURN HAVE ALWAYS BEEN ACCEPTED IN THE PAST. REGARDING AC COUNTING OF SALES RETURN IT WAS EXPLAINED THAT AT THE TIME OF DISPATCH OF NEWSP APER WHICH IS PACKED IN THE BUNDLE ENTRIES WAS MADE IN THE TAXI DISPATCH REGIST ER AND DELIVERY SHEET WITH INDIVIDUAL CHALLAN. IN THE BOOKS OF ACCOUNT ALL THE AGENT IS DEBITED ON THE BASIS OF MONTHLY BILLS RAISED AND SALES ARE CREDITED. THE RE TURN OF THE UNSOLD NEWSPAPER IS MADE BY THE AGENT ON DAILY BASIS AND IT IS RECORDED IN THE MANUAL SALES RETURN REGISTER MAINTAINED AT THE GATE. THEREAFTER THE SAM E IS RECORDED IN THE INTIMATION REGISTER WHICH IS MAINTAINED ON DAILY BASIS SHOWIN G DATE NAME OF THE PARTY STATION MONTH AND UNSOLD COPY. THE AGENT ALSO KEEP S A RECORD OF THE SAME AND AT THE END OF THE MONTH HE FURNISHES A STATEMENT WHICH IS CROSS VERIFIED FROM THE RECORDS AND CREDIT NOTE IS ISSUED. THE CREDIT NOTE SO ISSUED IS RECORDED IN THE CREDIT NOTE REGISTER AND ACCORDINGLY THE APPELLANT HAS CLAIMED THAT ALL THE SALES RETURN ARE VERIFIABLE FROM THE RECORD MAINTAINED. H OWEVER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR APPELLATE PROCEEDINGS AP PELLANT HAS NOT FURNISHED ANY PRIMARY REGISTER LIKE MANUALLY MAINTAINED SALES RET URN REGISTER AT THE GATE OF PUBLICATION WHERE SALES RETURN FROM EACH AGENT IS R ECORDED OR INTIMATION REGISTER. DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHEN A SKED TO FURNISH THE FULL DETAILS IN RESPECT OF SALES RETURN APPELLANT HAS RE LIED ONLY ON THE CREDIT NOTE REGISTER SHOWING MONTHLY CREDIT ON ACCOUNT OF SALES RETURN. SIMILARLY ARGUMENT OF THE APPELLANT THAT SALES RETURN DEPEND UPON THE YEA R OF INCEPTION OF BRANCH IS ALSO NOT ACCEPTABLE. FROM THE FACTS OF THE CASE IT IS S EEN THAT IN ALLAHABAD THE APPELLANT IS PRINTING HIS PAPER FROM 97-98 HOWEVER HE HAS SHOWN SALES RETURN OF 7.2% AS AGAINST THIS SALES RETURN OF 7.23% IN VARA NASI ALSO WHERE PAPER IS BEING PRINTED ONLY FOR THE PRECEDING YEAR. THOUGH APPELL ANT HAS TRIED TO EXPLAIN THIS DISCREPANCY ON THE GROUND THAT SALE PRICE OF THE PA PER HAS DRASTICALLY REDUCED IN VARANASI HOWEVER THE FACTS OF THE CASE CLEARLY SH OWS THAT APPELLANT HAS FAILED IN FILING THE COMPLETE DETAILS OF SALES RETURN. CONSID ERING THE NATURE OF TRANSACTION WHERE SALES RETURN IS SUPPOSED TO BE COUNTED IN CAS E OF EACH AND EVERY AGENT ON DAILY BASIS PROBABILITY OF LEAKAGE CANNOT BE RULED OUT HOWEVER DISALLOWANCE OF 3.7% OF THE SALES RETURN BY THE AO IS UNREASONABLE AND IN MY OPINION SALES RETURN UPTO 7% SHOULD BE ACCEPTED IN CASE OF A IN CASE OF ALLAHABAD AND VARANASI BRANCH I THEREFORE RESTRICT THE DISALLOWANCE ONL Y TO THE EXTENT OF 0.7% WHICH WORKS OUT TO RS.2 07 252/- (2 96 07 478 X 0.7%) IN RESPECT OF VARANASI UNIT OF RS.2 26 644/- (3 23 77 733 X 0.7%) IN RESPECT OF AL LAHABAD UNIT. THE TOTAL 4 DISALLOWANCE ON THIS ACCOUNT IS THEREFORE RESTRIC TED TO THE EXTENT OF RS.4 33 896/-. 4. THE REVENUE HAS COME IN APPEAL AGAINST THE DELET ION OF THE DISALLOWANCE WHILE THE ASSESSEE HAS COME AGAINST THE SUSTENANCE OF THIS DI SALLOWANCE. 5. BEFORE US THE LEARNED AR VEHEMENTLY CONTENDED T HAT THE ASSESSING OFFICER HAS DULY ACCEPTED IN THE ASSESSMENT ORDER THAT THE ASSESSEE PRODUCED THE REQUIRED DETAILS AND THE BOOKS OF ACCOUNT. THE DETAILS OF THE SALES RETURN ALONGWITH EVIDENCE FOR SALES AND DISPATCH WERE FILED. THE ASSESING OFFICER REJECTED THE EXPLANATION OF THE AS SESSEE ON THE BASIS THAT THE DETAILS OF SALES RETURN APPEAR TO BE PREPARED ON A SINGLE DAY. THE R EPORT OF CIRCULATION WAS NOT ACCEPTED BY THE AUDIT BUREAU OF CIRCULATION. AO ALSO OBSERVED IF TH ERE WERE SALES RETURN WHY THE ASSESSEE WAS PUBLISHING EXCESS PAPER THROUGHOUT THE YEAR? THE RA TES OF THE PAPER WERE REDUCED. THEREFORE THERE WAS NO REASON FOR SALES RETURN. THE ASSESSING OFFICER ULTIMATELY OBSERVED THAT AT THE MOST 4% OF THE TOTAL AMOUNT OF SALES IS TO BE ALLOWED AN D THEREFORE HE DISALLOWED 3.7% OF THE SALES AT VARANASI AND ALLAHABAD OUT OF THE SALES RETURN SHOW N BY THE ASSESSEE. THE BASIS OF ESTIMATION OF 4% WAS NOT POINTED OUT. THE ASSESSEE HAS SUBMITTED ALL THE DETAILS AND EVIDENCE. FOR THIS OUR ATTENTION WAS DRAWN TO PAGE 651 PARA 1 OF THE PAPER BOOK WHICH CONTAINED A LETTER DATED 3 RD MARCH 2006 ADDRESSED TO THE ASSESSING OFFICER. WHE NEVER THERE IS SALES RETURN THE AGENT ISSUES THE SALES RETURN ADVICE. THE SALES RETURNS ARE DULY REFLECTED IN THE MONTH-WISE TRADE TAX RETURN FILED WITH THE TRADE TAX DEPARTMENT. THE ASSESSEE H AS DULY MAINTAINED SUPPLY REGISTER TAXI CHALLANS IN WHICH BUNDLES/COPIES ARE MENTIONED DIS PATCH REGISTER ETC. THE ASSESSING OFFICER HAS OBSERVED AT PAGE 2 THAT THE DETAILS HAVE BEEN PRODU CED BY THE ASSESSEE WHO TOOK THE VIEW THAT THE DETAILS RECORDING SALES RETURN APPEAR TO HAVE B EEN PREPARED ON A SINGLE DAY. IF THE ASSESSING 5 OFFICER DOUBTED THE GENUINENESS OF THE ADVICE HE C OULD HAVE DIRECTLY CONFIRM THE SAME FROM THE AGENTS. DRAWING OUR ATTENTION TO PARA 15 OF PAGE 65 4 ON THE PAPER BOOK IT WAS SUBMITTED THAT ALL THE BOOKS OF ACCOUNT DETAILS AND VOUCHERS WERE DUL Y FILED. THE ASSESSEE HAS ALSO EXPLAINED UNDER PARA 16 OF PAGE 654 REGARDING THE CERTIFICATI ON OF CIRCULATION BY AUDIT BUREAU OF CIRCULATION. THE ASSESSEE HAS SUBMITTED BRANCH-WISE DETAILS OF THE SALE RETURNS ALONG WITH COPY OF ACCOUNT. ATTENTION WAS ALSO DRAWN TO PAGE 655 TO 658 OF THE PAPER BOOK. EVEN THE QUANTITATIVE DETAILS AND STOCK REGISTER WERE SUBMITTED FOR VERIF ICATION. THUS IT WAS CONTENDED THAT THE ASSESSEE HAS DULY FILED ALL THE DETAILS. IN MINUTE ATTENTION WAS DRAWN TO PAGE 18 TO 32 ALL THE SALES RETURN ADVICE WERE PREPARED BY THE AGENTS ON THEIR LETTER HEADS. THEREFORE NO QUESTION OF PREPARATION OF ADVICE ON A SINGLE DAY ARISES. THE C IT(A) WAS ALSO NOT CORRECT FACTUALLY THAT THE ASSESSEE HAS NOT SUBMITTED COMPLETE DETAILS. IT WAS POINTED OUT THAT PRINTING OF THE EXTRA COPIES IS NORMAL FEATURE IN NEWSPAPER INDUSTRY. THE SALES RET URN HAD DULY BEEN ACCEPTED BY THE DEPARTMENT IN THE PAST AND THERE HAD BEEN NO DISPUT E ON THIS ISSUE. THE SALES RETURN ADVICE ARE PREPARED BY THE AGENT ON THE BASIS OF THE RETURNS M ADE TO THE ASSESSEE AND THE ASSESSEE THEREAFTER ISSUES CREDIT NOTES TO THEM WHICH ARE RECORDED IN THE DAILY CREDIT NOTE REGISTER AND THE ENTRIES ARE POSTED IN THE ACCOUNTS OF THE AGENTS ON THE BASIS OF THIS CREDIT REGISTER ON MONTHLY BASIS. ALLAHABAD BRANCH WAS STARTED IN THE YEAR 199 7-98 AND THE SALES RETURN IN THE INITIAL YEAR WERE 13.79% AND HAS COME DOWN GRADUALLY TO 7.29% IN THE CURRENT YEAR. VARANASI BRANCH WAS STARTED LAST YEAR ONLY. THE RETURN IN THE LAST YEAR AS ACCEPTED AT 10.85% HAS COME DOWN SUBSEQUENTLY. A COMPARATIVE CHART AS SUBMITTED BEFO RE THE CIT(A) IS REPRODUCED AS UNDER : AGRA KANPUR ALLAHABAD JHANSI VARANASI MORADABAD AY 1998-99 GROSS SALES 49925447 13920066 6053788 3599193 2220 4240 LESS RETURNS 660033 1897553 835090 291871 621136 6 NET SALES 49265414 12022513 5218697 3307322 215831 04 %GE TO GROSS SALES 1.32% 13.60% 13.79% 8.11% 2.80% AY 1999-00 GROSS SALES 56777387 18117826 17310903 6874889 263 21086 LESS RETURNS 901674 2483508 2380748 481778 643109 NET SALES 55875623 15634317 14930154 6393111 25677 977 %GE TO GROSS SALES 1.59% 13.70 13.75% 7.01% 2.44% AY 2000-01 GROSS SALES 69293423 BRANCH 26909319 7720238 3241 4871 LESS RETURNS 606025 UNDER 3082436 406425 651414 NET SALES 68687398 AMAR UJALA 23826882 7313813 31763457 %GE TO GROSS SALES 0.87% PRAKASHAN 11.45% 5.26% 2.01% LTD. AY 2001-02 GROSS SALES 75150407 37846476 8154981 36250154 LESS RETURNS 1022870 3025413 353204 625506 NET SALES 74127537 34821063 7801777 35624467 %GE TO GROSS SALES 1.36% 7.99% 4.33% 1.73% AY 2002-03 GROSS SALES 81808809 34412374 10007892 34001742 40501762 LESS RETURNS 1231166 2720967 433111 3689903 102479 3 NET SALES 80577643 31691676 9574781 30311878 39476 969 %GE TO GROSS SALES 1.50% 7.91% 4.33% 10.85% 2.53% AY 2003-04 GROSS SALES 86026933 34889589 10472644 31916338 37622676 LESS RETURNS 1951107 2512856 525372 2308859 107544 4 NET SALES 84075816 32376733 9947272 29607479 36547 231 %GE TO GROSS SALES 2.27% 7.20% 5.02% 7.23% 2.86% 6. REFERRING TO THE CHART IT WAS POINTED OUT THAT THE CHART CLEARLY SHOWS THAT THE SALES RETURN AS COMPARED TO THE PERCENTAGE OF GROSS SALES WERE M ORE IN THE BRANCHES IN THE INITIAL YEARS AS COMPARED TO THE EXISTING BRANCH. THEY HAVE COME DOW N ONCE THE CIRCULATION IS SETTLED AND THE SALES HAVE INCREASED. IN 1998-99 THE SALES RETURN WAS 13% IN VARANASI AND IN THE ASSESSMENT YEAR 2001-02 IN ALLAHABAD SALES RETURN WAS 10%. THE REDUCTION IN THE PRICE WILL INCREASE 7 PERCENTAGE OF SALES RETURN IF COMPARED IN MONETARY VALUE. THE ASSESSING OFFICER HAS NOT FOUND ANY DEFECT IN THE BOOKS OF ACCOUNT MAINTAINED BY TH E ASSESSEE. THE TRADE TAX AUTHORITIES HAVE DULY ACCEPTED THE SALES RETURN. THE ASSESSING OFFIC ER PRESUMED AS IF THE SALES RETURN IS EXPENDITURE BEING CLAIMED BY THE ASSESSEE. SALES RE TURN IS NOT AN EXPENDITURE. SALES RETURN REPRESENTS PART OF THE REVENUE WHICH IN FACT HAS NOT ACCRUED TO THE ASSESSEE. THE CREDITS NOTES WERE DULY ISSUED TO EACH OF THE CUSTOMERS OF ALLAHA BAD AS WELL AS VARANASI. ONUS IS ON THE DEPARTMENT TO PROVE THAT THE INCOME HAS ACCRUED TO THE ASSESSEE. THE ASSESSEE HAS GIVEN ALL THE DETAILS AND THE EVIDENCE TO PROVE THE SALES RETURN. THE TAX AUDITOR HAS ALSO QUALIFIED THE AUDIT REPORT AND HAS DULY GIVEN THE LIST OF BOOKS INCLUDI NG STOCK REGISTER CONSUMPTION REGISTER AND WASTAGE REGISTER. THUS IT WAS CONTENDED REGARDING THE CERTIFICATION OF AUDIT BUREAU CIRCULATION IT WAS POINTED OUT THAT THIS INFORMATION RELATE TO JANUARY 2002 TO JUNE 2002. 7. THE LEARNED DR ON THE OTHER HAND RELIED ON THE ORDER OF THE ASSESSING OFFICER. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS ALONGWITH THE ORDERS OF THE TAX AUTHORITIES BELOW. WE NOTED THAT IN THIS CASE THE ASSESSING OFFICER HAD DISALLOWED THE SALES RETURN (IGNORING THAT IT IS NOT AN EXPENDITURE CLAI MED) RELATING TO ALLAHABAD AND VARANASI UNITS BY HOLDING THAT AT THE MOST 4% OF THE TOTAL AMOUNT IS TO BE ALLOWED IGNORING THE FACT THAT THE ASSESSEE HAS SHOWN SALES RETURN EVEN IN JHANSI UNIT @ 5.2% WHICH WAS DULY ACCEPTED BY THE ASSESSING OFFICER UNDER THE SAME SET OF FACTS. WE N OTED THAT THE COMPARATIVE POSITION OF THE SALES RETURN AS SHOWN BY THE ASSESSEE FROM THE ASSE SSMENT YEAR 1998-99 WAS AS UNDER : AGRA KANPUR ALLAHABAD JHANSI VARANASI MORADABAD AY 1998-99 GROSS SALES 49925447 13920066 6053788 3599193 2220 4240 LESS RETURNS 660033 1897553 835090 291871 621136 8 NET SALES 49265414 12022513 5218697 3307322 215831 04 %GE TO GROSS SALES 1.32% 13.60% 13.79% 8.11% 2.80% AY 1999-00 GROSS SALES 56777387 18117826 17310903 6874889 263 21086 LESS RETURNS 901674 2483508 2380748 481778 643109 NET SALES 55875623 15634317 14930154 6393111 25677 977 %GE TO GROSS SALES 1.59% 13.70 13.75% 7.01% 2.44% AY 2000-01 GROSS SALES 69293423 BRANCH 26909319 7720238 3241 4871 LESS RETURNS 606025 UNDER 3082436 406425 651414 NET SALES 68687398 AMAR UJALA 23826882 7313813 31763457 %GE TO GROSS SALES 0.87% PRAKASHAN 11.45% 5.26% 2.01% LTD. AY 2001-02 GROSS SALES 75150407 37846476 8154981 36250154 LESS RETURNS 1022870 3025413 353204 625506 NET SALES 74127537 34821063 7801777 35624467 %GE TO GROSS SALES 1.36% 7.99% 4.33% 1.73% AY 2002-03 GROSS SALES 81808809 34412374 10007892 34001742 40501762 LESS RETURNS 1231166 2720967 433111 3689903 102479 3 NET SALES 80577643 31691676 9574781 30311878 39476 969 %GE TO GROSS SALES 1.50% 7.91% 4.33% 10.85% 2.53% AY 2003-04 GROSS SALES 86026933 34889589 10472644 31916338 37622676 LESS RETURNS 1951107 2512856 525372 2308859 107544 4 NET SALES 84075816 32376733 9947272 29607479 36547 231 %GE TO GROSS SALES 2.27% 7.20% 5.02% 7.23% 2.86% FROM THIS CHART ITSELF IT IS APPARENT THAT IN RESPE CT OF ALLAHABAD UNIT THE PERCENTAGE OF SALES RETURN IN THE INITIAL YEARS I.E. A.Y. 1998-99 19 99-2000 WERE AS HIGH AS 13.97% 13.75% AND WHICH GRADUALLY REDUCED TO 11.45% IN ASSESSMENT YEA R 2000-01 7.99% IN THE ASSESSMENT YEAR 2001-02 AND 7.91% IN THE ASSESSMENT YEAR 2002-03. S IMILARLY IN THE CASE OF THE JHANSI UNIT ALSO IT WAS 8.11% IN A.Y. 1998-99 AND IN RESPECT OF VARA NASI UNIT IT WAS 10.85% IN THE INITIAL YEAR 9 I.E. IN ASSESSMENT YEAR 2002-03. THESE PERCENTAGES OF THE SALES RETURN HAS DULY BEEN ACCEPTED BY THE DEPARTMENT. APPARENTLY THE PERCENTAGE OF THE S ALES RETURN DURING THE YEAR AS PER THE CHART WERE ONLY 7.2% AND 7.23% FOR THE ALLAHABAD AND VARA NASI UNITS. IF COMPARED WITH EARLIER YEAR THESE PERCENTAGES ARE THE BEST COMPARATIVE INSTANCE IN THE CASE OF THE ASSESSEE. 9. COMING TO THE FACTS OF THE CASE WE NOTED THAT T HE ASSESSEE HAS DULY SUBMITTED THE DETAILS OF UNSOLD DAINIK UJALA WHICH WERE SENT BY THE AGEN TS ALONGWITH THE CREDIT NOTES FOR THE SAME. WE NOTED IN RESPECT OF ONE OF THE AGENTS AT ALLAHAB AD OM AGENCIES HAS RAISED THE CREDIT NOTE GIVING DETAILS OF UN-SOLD COPIES DATE-WISE AT THE E ND OF THE MONTH ALONGWITH STATEMENT OF ACCOUNT THE ADDRESS AS WELL AS PHONE NUMBER OF M/S . OM AGENCIES ARE DULY MENTIONED IN THE STATEMENT CREDIT NOTE AS WELL AS IN THE DETAILS. T HE COPIES OF THESE DOCUMENTS ARE AVAILABLE AT PAGES 22 TO 25 OF THE PAPER BOOK. SIMILARLY THE AS SESSEE HAS GIVEN THE DETAILS OF THE OTHER AGENTS. IN OUR OPINION THERE IS NOTHING UNUSUAL IF THE AGE NTS SENT THE MONTHLY STATEMENT TO THE PRINCIPAL INSTEAD OF SENDING THE DAILY STATEMENT. THE ASSESSE E HAS DULY ACCEPTED THE CREDIT NOTE. THE CREDIT NOTE AND THE STATEMENT WHICH ARE AVAILABLE ON THE F ILE CANNOT BE REGARDING TO HAVE BEEN PREPARED BY THE ASSESSEE. IF THE ASSESSING OFFICER DOUBTED T HE DOCUMENTS/EVIDENCES FILED BY THE ASSESSEE IN OUR OPINION THE ONUS IS ON THE ASSESSING OFFICE R TO PROVE THAT THESE DOCUMENTS/EVIDENCES ARE NOT GENUINE. WE ALSO NOTED THAT THE ASSESSEE HAS SU BMITTED BEFORE THE ASSESSING OFFICER ABOUT THE MAINTENANCE OF THE SALES RETURN RECORD IN THE S HAPE OF THE SALES RETURN ADVICE ISSUED BY THE AGENTS CREDIT NOTES AND CREDIT NOTE SUMMARY. EVEN THESE SALES RETURN WERE ALSO DULY SHOWN IN THE TRADE TAX RETURN FILED IN THE TRADE TAX DEPARTMENT. THE ACCOUNTS OF THE ASSESSEE WERE DULY AUDITED. THE BRANCH-WISE DETAILS OF THE SALES RETUR N ALONG WITH COPY OF ACCOUNT WERE FILED. EVEN THE QUANTITATIVE DETAILS WERE DULY FILED. THE ASSES SEE HAS SUBMITTED THE STOCK REGISTER MAINTAINED 10 BY HIM. THE ASSESSING OFFICER WITHOUT BRINGING ANY EVIDENCE TO THE CONTRARY SIMPLY REJECTED THE SALES TAX RETURN SHOWN BY THE ASSESSEE TREATING THE M TO BE ABNORMAL. THE ASSESSEE HAS DULY EXPLAINED THE SYSTEM OF ACCOUNTING IN RESPECT OF NE WSPAPER. AT THE TIME OF DISPATCH OF NEWSPAPER PACKED IN BUNDLES ENTRIES ARE MADE IN TA XI DISPATCH REGISTER AND IN DELIVERY CHALLANS. IN THE BOOKS OF ACCOUNT ALL THE AGENTS ARE DEBITED ON THE BASIS OF MONTHLY BILLS RAISED AND SALES ARE CREDITED. THE RETURN OF THE UNSOLD NEWSPAPER IS NOTED ON DAILY BASIS AND RECORDED IN THE MANUAL SALES RETURN REGISTER MAINTAINED AT THE GATE . THEREAFTER SAME IS RECORDED IN THE INTIMATION REGISTER MAINTAINED ON DAILY BASIS SHOWING DATE NA ME OF THE PARTY STATION MONTH AND UNSOLD COPY. THE AGENT ALSO FURNISHES MONTHLY STATEMENT WH ICH IS CROSS VERIFIED FROM THE RECORDS AND CREDIT NOTES ISSUED. ACCORDINGLY THE CREDIT NOTE I S RECEIVED AND NO DISCREPANCY IN THE SYSTEM FOLLOWED BY THE ASSESSEE WAS POINTED OUT BY THE AUD ITOR. EVEN THE ASSESSING OFFICER HAS ALSO NOT BROUGHT ON RECORD ANY DEFICIENCY IN THIS REGARD. IN FACT WE NOTED THAT DURING THE YEAR THE SALES RETURN IN ALLAHABAD AND VARANASI BRANCHES WERE 7.2% NOT 7.7% AS MENTIONED IN THE ASSESSMENT ORDER OR BY THE CIT(A). THE ASSESSING OFFICER WITHO UT GIVING ANY BASIS ALLOWED 4% SALES RETURN WHILE THE ASSESSING OFFICER ALLOWED 4% OF THE SALES RETURN WHILE THE ASSESSING OFFICER ALLOWED 7% OF THE SALES RETURN FOR BOTH THE UNITS. NO BASIS FOR ALLOWING 4% OR 7% SALES RETURN WAS GIVEN BY ANY OF THE AUTHORITIES BELOW. NEITHER ANY COMPAR ATIVE INSTANCE WAS BROUGHT ON RECORD. ON THIS BASIS ITSELF IN OUR OPINION THE DISALLOWANCE(ADDI TION) CANNOT BE SUSTAINED. 10. WE ALSO FIND FORCE ON THE LEGAL SUBMISSIONS OF THE LD. AR THAT THE ASSESSEE IN THIS CASE HAS NOT CLAIMED SALES RETURN TO BE AN EXPENDITURE. THEREFORE NO QUESTION OF ANY DISALLOWANCE ARISES. IT IS A QUESTION OF ACCRUAL OF INCOME. THE CLAIM OF THE ASSESSEE RELATE TO THE FACT THAT ACTUALLY HE HAS NOT MADE SALES TO THE EXTENT OF SAL ES RETURN AND THEREFORE THERE HAD BEEN NO 11 ACCRUAL OF INCOME. THE ASSESSEE IN THIS CASE IN OU R OPINION CLAIMS THAT HE HAS NOT MADE THE SALES FOR A PARTICULAR QUANTITY OF THE NEWSPAPERS AS THE NEWSPAPERS SO SENT RETURNED BACK. IF THE NEWSPAPERS ARE NOT SOLD ON THE DAY FOR WHICH IT IS PUBLISHED IT WOULD BECOME OUT DATED OBSULATE AND REMAINS UNSOLD. THE ASSESSING OFFICER IN THIS C ASE ALLEGED THAT THE ASSESSEE HAS SOLD MUCH MORE WHAT HAS BEEN SHOWN BY THE ASSESSEE AS SALES. THIS IS THE SETTLED LAW THAT APPARENT IS REAL. ONUS IS ON THE PERSON WHO ALLEGES APPARENT IS NOT R EAL IN VIEW OF THE DECISION OF SUPREME COURT IN THE CASE OF RAWATMUL DAULAT RAM 87 ITR 349. THE REFORE WE ARE OF THE VIEW THAT HEAVY ONUS LIES ON THE REVENUE TO PROVE THAT THE SALES RETURN SHOWN BY THE ASSESSEE ARE NOT THE SALES RETURN AND THE ASSESSEE HAS SOLD THE NEWSPAPERS MUCH MORE THAN WHAT HAS BEEN SHOWN AS SOLD SO THAT IT CAN BE SAID THAT THE INCOME TO THAT EXTENT HAS ACCR UED TO THE ASSESSEE DURING THE YEAR. ONCE THE ONUS GETS SHIFTED ON THE DEPARTMENT NOW THE QUESTI ON ARISES WHAT MATERIAL OR EVIDENCE THE ASSESSING OFFICER HAS BROUGHT ON RECORD SO AS TO DI SCHARGE THE ONUS OF REVENUE. WE FIND THAT EXCEPT ALLEGATIONS FOR WHICH THE ASSESSEE HAS DULY SUBMITTED THE EVIDENCE THERE IS NO IOTA OF EVIDENCE ON RECORD WHICH MAY POINT OUT THAT THE INC OME HAS ACCRUED TO THE ASSESSEE DURING THE YEAR AS THE ASSESSEE HAS MADE THE SALE MUCH MORE TH AN WHAT HAS BEEN SHOWN IN THE BOOKS OF ACCOUNT. THERE IS DIFFERENCE BETWEEN THE DISALLOWAN CE OF AN EXPENDITURE AND THE ACCRUAL OF THE INCOME. EVEN PRUDENCY CONCEPT OF THE ACCOUNTING LAY S DOWN THAT THE INCOME CANNOT BE PROVIDED UNTIL AND UNLESS IT IS REALIZED OR ACCRUED TO THE A SSESSEE. WHAT IN FACT THE ASSESSING OFFICER HAS TRIED TO HOLD IS THAT THE INCOME HAS ACCRUED TO THE ASSESSEE DURING THE YEAR BY DISALLOWING THE SALE RETURN. THIS IN OUR OPINION IS NOT CORRECT. DISAL LOWANCE OF EXPENDITURE CAN BE MADE IF THE ASSESSEE CLAIMS THE EXPENDITURE AND HE IS NOT ABLE TO FULFILL THE CONDITIONS AS LAID DOWN U/S. 37 OR OTHER RELEVANT PROVISIONS UNDER WHICH THE DEDUCTIO N HAS BEEN CLAIMED. THE ASSESSEE HAS DULY ACCOUNTED THE SALES RETURN ON THE BASIS OF EVIDENCE PRODUCED AND BROUGHT ON RECORD. THEREFORE 12 WE SET ASIDE THE ORDER OF THE CIT(A) AND DELETE THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IN TOTO IN RESPECT OF THE SALES RETURN AT VARANASI AND ALLAHABAD BENCHES. THUS THE GROUND NO. 2 TO 4 OF ASSESSEES APPEAL AND GROUND NO. 1 OF THE C ROSS OBJECTION ARE ALLOWED WHILE GROUND NO. 1(I) OF REVENUES APPEAL IS DISMISSED. 11. GROUND NO. 5 IN ASSESSEES APPEAL RELATES TO TH E DISALLOWANCE OF RS.500000/- OUT OF THE BAD DEBST CLAIMED BY THE ASSESSEE. AFTER HEARING TH E RIVAL SUBMISSIONS WE NOTED THAT THIS ISSUE IN OUR OPINION IS NO MORE RES INTEGRA IN VIEW OF T HE DECISION OF HONBLE SUPREME COURT IN THE CASE OF TRF LTD. VS. CIT 323 ITR 397 IN WHICH IT WAS HELD THAT IT IS NOT NECESSARY TO THE ASSESSEE TO ESTABLISH THAT THE DEBT IN FACT HAS B ECOME IRRECOVERABLE. IT IS ENOUGH IF THE DEBT HAS BEEN WRITTEN OFF BY THE ASSESSEE IN THE ACCOUNTS. I N THE PRESENT CASE WE NOTED THAT THE ASSESSEE HAS DULY WRITTEN OFF THE DEBT IN THE BOOKS OF ACCOU NT AND THEREFORE THE CIT(A) WAS NOT CORRECT IN SUSTAINING THE DISALLOWANCE. WE ACCORDINGLY DEL ETE THE DISALLOWANCE OF RS.5 00 000/-. 12. IN THE RESULT THE GROUND NO. 1.1 OF APPEAL FIL ED BY THE REVENUE IS DISMISSED. THE GROUND NOS.2 TO 5 OF ASSESSEES APPEAL AND GROUND NO.1 OF THE CROSS OBJECTION OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.07.11. SD/- SD/- (H.S. SIDHU) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:28 TH JULY 2011 *AKS/- 13 COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT CONCERNED 5. DR ITAT AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY