Chand Fruit Company Pvt. Ltd.,, Miraj v. Dy. CIT, Circle - 2, Sangli

ITA 1393/PUN/2013 | 2009-2010
Pronouncement Date: 30-09-2016 | Result: Partly Allowed

Appeal Details

RSA Number 139324514 RSA 2013
Assessee PAN AACCC3968Q
Bench Pune
Appeal Number ITA 1393/PUN/2013
Duration Of Justice 3 year(s) 2 month(s) 29 day(s)
Appellant Chand Fruit Company Pvt. Ltd.,, Miraj
Respondent Dy. CIT, Circle - 2, Sangli
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2016
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 30-09-2016
Date Of Final Hearing 19-09-2016
Next Hearing Date 19-09-2016
Assessment Year 2009-2010
Appeal Filed On 01-07-2013
Judgment Text
] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE ! # $ BEFORE MS. SUSHMA CHOWLA JM AND SHRI ANIL CHATURV EDI AM ITA NO.1393/PN/2013 ASSESSMENT YEAR : 2009-10 CHAND FRUIT COMPANY PVT. LTD. GAT NO.154 2A 2B BAGWAN AGRI FARM TILAK ROAD MIRAJ 416 410. PAN : AACCC3968Q . APPELLANT VS. THE JT. COMMISSIONER OF INCOME TAX RANGE 2 SANGLI. . RESPONDENT / APPELLANT BY : SHRI S. V. DESHPANDE / RESPONDENT BY : SHRI ANIL CHAWARE / DATE OF HEARING : 19.09.2016 / DATE OF PRONOUNCEMENT: 30.09.2016 % / ORDER PER ANIL CHATURVEDI AM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) KOLHAPUR DATED 08.05.2013 FOR THE ASSESSMENT YEAR 2009-10. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER :- 2.1 ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN T HE BUSINESS OF EXPORT OF FRESH FRUITS AND VEGETABLES. ASSESSEE ELECTRONICAL LY FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2009-10 ON 30.10.2009. THEREAFTER ASSESSEE FILED A REVISED 2 ITA NO.1393/PN/2013 RETURN ON 30.10.2009 DECLARING TOTAL INCOME OF RS.2 04 13 130/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 (IN SHORT THE A CT) VIDE ORDER DATED 14.11.2011 AND THE TOTAL INCOME WAS DETERMINED AT RS.2 42 20 9 10/-. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER ASSESSEE CARRIED THE MATT ER BEFORE LD. CIT(A) WHO VIDE ORDER DATED 08.05.2013 IN APPEAL NO.SLI/251/11-12 D ISMISSED THE APPEAL OF ASSESSEE. AGGRIEVED FURTHER BY THE ORDER OF LD. CI T(A) ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED FOLLOWING GROUNDS :- THE FOLLOWING GROUNDS OF APPEAL ARE WITHOUT PREJU DICE TO EACH OTHER: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) (I) KOLHAPUR ERRED IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION OF RS.1 6 21 886/- ON THE COST OF FOUNDATION OF A WIND TURBINE AND ON THE COST OF INS TALLATION AND COMMISSIONING OF THE WIND TURBINE WITHOUT PROPERLY APPRECIATING THE EXPLANATION FILED. 2. WHILE CONFIRMING THE DISALLOWANCE OF DEPRECIATIO N AMOUNTING TO RS.16 21 886/- THE LEARNED CIT(A) CONVENIENTLY IGN ORED THE COPIES OF THE APPELLATE ORDER PASSED BY THE CIT (A) IN SIMILAR TY PE OF CASE AND ALSO PURPOSEFULLY IGNORED THE DECISIONS OF THE ITAT PUN E AND OF THE BOMBAY HIGH COURT WHEN COPIES OF THOSE DECISIONS WERE FILED BEFORE HI M ON 19 TH OF MARCH 2013 AND WHEN THE SAID DECISIONS WERE DIRECT LY ON THE ISSUE INVOLVED. 3. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDIT ION OF RS.15 01 088/- ON ACCOUNT OF SHORTAGE IN FRUITS & VEGETABLES ACCOUNT WITHOUT PROPERLY APPRECIATING THE SUBMISSIONS FILED AND WITHOUT EVER MAKING AN ATTEMP T TO UNDERSTAND THE VERY ISSUE. 4. THE LEARNED CIT(A) ERRED IN CONFIRMING THE AD HO C ADDITION OF RS.5 00 000/- WITHOUT PROPERLY APPRECIATING THE SUBMISSIONS FILED AND BY CONVENIENTLY IGNORING THE STATUTORY POSITION THAT THE CASH PAYMENT TO AGRICUL TURISTS FOR PURCHASE OF AGRICULTURAL COMMODITIES IS COVERED BY THE RULE 6DD(E) OF THE I. T. RULES 1962. 5. THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISAL LOWANCE OF RS.75 000/- ON THE GROUND THAT THE SELF-MADE VOUCHERS WERE NOT VER IFIABLE WHEN IN FACT SUCH SELF-MADE VOUCHERS WERE QUITE NEGLIGIBLE AND WHEN S UCH SELF-MADE VOUCHERS WERE ONLY IN RESPECT OF PAYMENTS MADE TO INDIVIDUAL S FROM UN-ORGANIZED SECTOR WHICH WERE FULLY VERIFIABLE. 6. THE LEARNED CIT(A) FURTHER ERRED IN CONFIRMING T HE DISALLOWANCE OF RS.1 09 804/- ON ACCOUNT OF ALLEGED PERSONAL USE WI THOUT PROPERLY APPRECIATING THE EXPLANATION FILED. 7. THE REASONS ASSIGNED FOR CONFIRMING THE DISALLOW ANCE OF DEPRECIATION OF RS.16 21 886/- AND DISALLOWANCE OF RS.15 01 088/- O N ACCOUNT OF SHORTAGE IN FRUITS & VEGETABLE TRADING ACCOUNT AND OF THE AD HO C ADDITION OF RS.5 00 000/- ON ACCOUNT OF CASH PURCHASES FROM AGRICULTURISTS AN D OF RS.75 000/- FROM OUT OF LOADING & UNLOADING CHARGES AND OF RS.1 09 804/ - FROM OUT OF VEHICLE REPAIRS & 3 ITA NO.1393/PN/2013 MAINTENANCE TELEPHONE AND TRAVELING EXPENSES ON AC COUNT OF ALLEGED PERSONAL USE ARE WRONG INSUFFICIENT AND CONTRARY TO THE PROVISI ONS OF LAW AND FACTS. 8. THE APPELLANT CRAVES LEAVE TO ADD ALTER AMEND MODIFY AND/ OR DELETE ANY OF THE GROUNDS OF APPEAL. 3. FIRST AND SECOND GROUNDS ARE WITH RESPECT OF DIS ALLOWANCE OF DEPRECIATION ON THE COST OF WIND TURBINE AND BEING INTER-CONNECTED THEREFORE THE SAME ARE CONSIDERED TOGETHER. 3.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS SESSING OFFICER NOTICED THAT ASSESSEE HAS CLAIMED DEPRECIATION ON WINDMILL PROJECT AT 80%. ASSESSING OFFICER (AO) WAS OF THE VIEW THAT THE ASSESSEE WAS ELIGIBLE FOR DEPRECIATION ON THE PORTION OF CIVIL WORK OF WINDMILL AT 10% AND ON THE PORTION OF ERECTION AND COMMISSIONING OF WINDMILL ASSESSEE WAS ELIGIBLE FO R DEPRECIATION AT 15% AND NOT AT 80% AS CLAIMED BY ASSESSEE. THE ASSESSING OFFIC ER THEREAFTER WORKED OUT THE EXCESS DEPRECIATION AT RS.16 21 886/- AND DISALLOWE D THE SAME. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER ASSESSEE CARRIED THE MA TTER BEFORE LD. CIT(A) WHO UPHELD THE ORDER OF ASSESSING OFFICER BY HOLDING AS UNDER :- 4. THE ISSUE OF DISALLOWANCE OF DEPRECIATION HAD C OME UP IN APPEAL BEFORE ME IN THE APPELLANTS OWN CASE FOR ASSESSMENT YEAR 200 8-09. I HEREBY CONFIRM THE DISALLOWANCE MADE DURING THE YEAR UNDER CONSIDERATI ON BASED ON THE REASONS RECORDED IN MY APPELLATE ORDER BEARING NO.SLI/280/1 0-11 DATED 08/05/2013. 4. AGGRIEVED BY THE ORDER OF LD. CIT(A) ASSESSEE I S NOW IN APPEAL BEFORE US. 4.1 BEFORE US AT THE OUTSET LD. AR SUBMITTED THAT THE ISSUE OF DEPRECIATION IS COVERED IN ASSESSEES FAVOUR BY THE DECISION OF CO- ORDINATE BENCH OF TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008-09. H E POINTED TO THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL DATED 31.03.20 16 IN ITA NO.1293/PN/2013. HE THEREFORE SUBMITTED THAT SINCE THE FACTS OF THE CAS E IN THE YEAR UNDER APPEAL ARE 4 ITA NO.1393/PN/2013 IDENTICAL TO THAT OF EARLIER YEAR AS HAS ALSO BEEN NOTED BY THE LD. CIT(A) THE ISSUE IN THE YEAR NEEDS TO BE DECIDED IN FAVOUR OF THE AS SESSEE BY FOLLOWING THE ORDER OF CO-ORDINATE BENCH OF TRIBUNAL. THE LD. DR DID NOT CONTROVERT THE SUBMISSIONS OF LD. AR BUT HOWEVER SUPPORTED THE ORDERS OF THE LOWER AU THORITIES. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESPECT TO DEPRECIATION ON THE AMOUNT OF PORTION OF INSTALLATION EXPENSES OF THE WINDMILL. WE FIND THAT IN ASSESSEES OWN CASE THE ISSUE AROSE IN ASSESSMENT YEAR 2008-09 AND WHEN THE MATTER WAS CARRIED BEFORE THE CO-ORDINATE BENCH OF TRIBUNAL THE CO-OR DINATE BENCH OF TRIBUNAL BY RELYING ON THE ORDER OF TRIBUNAL IN THE CASE OF SHR EEM ELECTRIC LIMITED VS. JCIT IN ITA NO.2107/PN/2013 ORDER DATED 30.11.2015 DECIDE D THE ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER :- 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. WE FIND THAT THE CONTROVERSY IN THE PRESENT CASE IS SQUARELY COVERED BY THE RECENT DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SHREEM EL ECTRIC LIMITED VS. JCIT IN ITA NO.2107/PN/2013 ORDER DATED 30.11.2015 WHEREIN THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE RELEVANT EXTR ACT OF THE ORDER OF THE TRIBUNAL ON THE ISSUE IS REPRODUCED HEREINBELOW :- 8. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMISSIONS MADE ON BEHALF OF THE REVENUE. THE ONL Y ISSUE FOR ADJUDICATION BEFORE US IS ALLOWABILITY OF SIMILAR DEPRECIATION R ATE AS APPLICABLE TO WINDMILLS ALSO TO THE FOUNDATION & CIVIL WORK AN D ERECTION & COMMISSIONING WORK EXECUTED FOR THESE WINDMILLS. IT IS THE CASE OF THE ASSESSEE BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE CIT(A) THAT ENTIRE EXPENDITURE TOGETHER WITH COST OF WINDMILL IS ENTITLED TO SAME RATE OF DEPRECIATION AT 80% AS THE OTHER EXPENDITURE INCURRED TOWARDS FOUNDATI ON & CIVIL WORK AND ERECTION & COMMISSIONING WORK ETC. ARE INTEGRAL PART OF WINDMILLS AND ARE DIRECTLY ATTRIBUTABLE TO INSTALLATION AND OPERATION AL FUNCTIONING OF WIND TURBINE. SINCE THE CIVIL WORK AND ERECTION & COMMISSIONING E XPENSES INCURRED ARE IN RELATION TO INSTALLATION OF WINDMILL DEPRECIATION ON THE SAME SHOULD BE PROVIDED AT THE RATE APPLICABLE TO WINDMILL. WE FI ND THAT THE AFORESAID ASSERTIONS MADE ON BEHALF OF THE ASSESSEE BEFORE TH E REVENUE REMAINS UNCONTROVERTED. ACCORDINGLY WE ARE OF THE FIRM VI EW THAT THE EXPENSES INCURRED ON ERECTION & COMMISSIONING CIVIL WORK E TC. BEING NECESSARY ADJUNCT TO THE WINDMILL AND IS NOT MEANT FOR ANY OT HER PURPOSES OTHER THAN FOR OPERATIONAL FUNCTIONING OF WIND TURBINE AND THE REFORE CANNOT BE TREATED DIFFERENTLY. THEREFORE IMPUGNED CAPITAL EXPENDITU RE TOWARDS CIVIL WORK & COMMISSIONING ETC. ALSO WILL QUALIFY FOR THE SAME R ATE OF DEPRECIATION AS APPLICABLE TO WIND TURBINE ITSELF. THE ISSUE IS NO LONGER RES-INTEGRA AND IS 5 ITA NO.1393/PN/2013 COVERED BY THE DECISION OF CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF POONAWALA FINVEST & AGRO (P.) LTD. VS. ACIT (2008) 118 TTJ 68 (PUNE) WHEREIN IT HAS BEEN CLEARLY HELD THAT THE CAPITAL E XPENDITURE INCIDENTAL TO THE WINDMILL HAS TO BE TESTED ON THE TOUCHSTONE OF THE FUNCTIONAL TEST AND THE ASSESSEE WILL BE ENTITLED TO HIGHER RATE OF DEPRECI ATION ON SUCH INCIDENTAL EXPENDITURE IF IT HAS NO OTHER USE EXCEPT FOR POWE R GENERATION DONE BY THE WINDMILL. OUR VIEW IS ALSO SUPPORTED BY ANOTHER DE CISION OF THE CO-ORDINATE BENCH OF PUNE TRIBUNAL IN THE CASE OF M/S D.J. MALP ANI VS. ACIT IN ITA NOS.1148 TO 1154/PN/2013 ORDER DATED 30.10.2015. ACCORDINGLY WE HOLD THAT THE REVENUE IS MISDIRECTED ITSELF IN LAW IN MA KING THE IMPUGNED DISALLOWANCE OF DEPRECIATION. 9. THE ISSUE BEING SQUARELY COVERED IN FAVOUR OF TH E ASSESSEE THE DEPRECIATION AS CLAIMED BY THE ASSESSEE DESERVES TO BE ALLOWED. IN THE RESULT GROUND NOS.1 & 2 ARE ALLOWED. 6. BEFORE US REVENUE HAS NEITHER PLACED ANY MATERI AL ON RECORD TO DEMONSTRATE THAT FOUNDATION AND CIVIL WORK ERECTIO N AND COMMISSIONING WORK DOES NOT FORM INTEGRAL PART OF WINDMILL NOR HAS PLACED A NY MATERIAL TO DEMONSTRATE THAT THE AFORESAID ORDER OF THE CO-ORDINATE BENCH OF TRI BUNAL IN THE ASSESSEES OWN CASE HAS BEEN SET-ASIDE BY HONBLE HIGH COURT. WE FURTHER FIND THAT BEFORE THE HONBLE BOMBAY HIGH COURT IN AN UNREPORTED DECISION IN THE CASE OF CIT VS. CTR MFG. IND. LTD. (ITA NO.2125 OF 2013 ORDER DATED 01. 03.2016) SIMILAR ISSUE AROSE. THE HONBLE HIGH COURT AFTER RELYING ON THE DECISIO NS IN THE CASE OF CIT VS. K. K. ENTERPRISES (108 DTR 109) (RAJ) AND CIT VS. EASTMON IMPEX (P&H) HAS DECIDED THE ISSUE IN FAVOUR OF ASSESSEE. THE QUESTION BEFO RE THE HONBLE HIGH COURT AND THE DECISION IS AS UNDER :- MR. SURESH KUMAR URGES ONLY THE FOLLOWING TWO QUES TIONS OF LAW FOR OUR CONSIDERATION:- (1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE TRIBUNAL WAS JUSTIFIED IN ALLOWING DEPRECI ATION @80% ON THE EXPENSES INCURRED ON POWER EVACUATION INFRASTRUCTUR E ERECTION AND COMMISSIONING LINE WORK AND ELECTRICAL FITTINGS WI THOUT APPRECIATING THAT THESE WORKS DID NOT FORM PART OF THE WINDMILL AND A RE ELIGIBLE FOR DEPRECIATION @15% BEING ITEMS OF PLANT AND MACHINER Y? (2) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE TRIBUNAL DID NOT ERR IN ALLOWING DEPRECIAT ION ON THE COST OF CIVIL FOUNDATION WORK @80% BY IGNORING THE FACT THAT CIVI L WORK OF FOUNDATION IS A BUILDING STRUCTURE AND NOT PART OF THE WINDMILL; HE NCE THE ELIGIBLE RATE OF DEPRECIATION IS 10% ONLY? THE BRIEF FACTS GIVING RISE TO THE PRESENT CONTROVE RSY ARE THAT:- 6 ITA NO.1393/PN/2013 3 FOR THE SUBJECT ASSESSMENT YEAR THE RESPONDENT-A SSESSEE HAD FILED ITS RETURN OF INCOME DECLARING AN INCOME OF RS.3.83 CRO RES AFTER TAKING INTO ACCOUNT DEPRECIATION CLAIMED ON WINDMILL. THE RESPONDENT-AS SESSEE HAD CAPITALIZED THE COST OF ITS WINDMILLS @RS.6.55 CRORES AND CLAIMED D EPRECIATION THEREON @80% I.E. RS. 5.12 CRORES. THE ASSESSING OFFICER HELD THAT 80 % OF THE DEPRECIATION IS AVAILABLE ON THE BASIC COMPONENTS OF THE WINDMILL I .E. WIND TURBINE GENERATOR TUBULAR TOWER AND TRANSFORMER. THE OTHER EXPENSES W HICH WERE CAPITALIZED AS A PART OF THE WINDMILL CONSISTED OF THE FOLLOWING:- (A) POWER EVACUATION INFRASTRUCTURE (B) ERECTION AND COMMISSIONING CHARGES. (C) LINE WORK (D) ELECTRICAL ITEMS (E) MEDA CHARGES (F) APPLICATION CHARGES (G) PROFESSIONAL CHARGES AND (H) BANK CHARGES (I) CIVIL WORKS WERE HELD NOT ENTITLED TO DEPRECIATION @80% AS THEY ARE NOT A PART OF THE WINDMILL. THUS ALLOWING DEPRECIATION @10% WITH REGARD TO THE COST OF CIVIL WORK FOUNDATION FOR THE WINDMILL LISTED AT (I) ABOVE AND DEPRECIATI ON OF 15% ON ALL THE OTHER ITEMS LISTED AT (A) TO (H). THUS THE ASSESSING OFFICER D ISALLOWED THE CLAIM OF RS.92.58/- LAKHS AND RESTRICTED THE DEPRECIATION TO ONLY RS.4. 20 CRORES AS AGAINST RS.5.12 CRORES CLAIMED BY THE RESPONDENT-ASSESSEE. 4 .. 5 .. 6 .. 7 REGARDING QUESTION (1) (A) WE FIND BOTH THE CIT(A) AS WELL AS THE TRIBUNAL HAVE RECORDED A FINDING OF FACT THAT THE ITEMS LISTED AT (A) TO (D) IN PARAGRA PH(3) ABOVE FORM AN INTEGRAL PART OF THE WINDMILL. THUS ENTITLED TO 80% DEPRECIATION BE ING A PART OF A WINDMILL. ADMITTEDLY THIS VERY QUESTION AROSE BEFORE THE PUN JAB AND HARYANA HIGH COURT IN COMMISSIONER OF INCOME TAX V/S M/S EASTMAN IMPEX BE ING INCOME TAX APPEAL NO.350 OF 2013 DECIDED ON 18 TH DECEMBER 2014 WHEREIN AN IDENTICAL QUESTION AROSE AND FOLLOWING THE DECISIONS OF RAJASTHAN HIGH COURT IN COMMISSIONER OF INCOME TAX V/S K. K. ENTERPRISES (108 DTR 109) ALLO WED THE CLAIM OF DEPRECIATION MADE BY THE ASSESSEE THEREIN SIMILAR TO ONE MADE HE RE. (B) MOREOVER THE PUNJAB AND HARYANA HIGH COURT IN EASTMAN IMPEX(SUPRA) ALSO REFERS TO THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN TRUMAC ENGINEERING CO PVT LTD MUMBAI V/S INCOME TAX OFFICE R (INCOME TAX APPEAL NO. 555/MUM/2003 RENDERED ON 27TH JUNE 2008) WHEREIN A N IDENTICAL ISSUE HAS ARISEN AND THE ASSESSEE'S CLAIM THEREIN FOR DEPRECIATION @ 100% (AS IN A. Y.1996-97) WAS ALLOWED. MR. SURESH KUMAR FOR THE REVENUE VERY FAIR LY STATES THAT NO APPEAL HAS BEEN FILED BY THE REVENUE FROM THE DECISION OF THE TRIBUNAL IN TRUMAC ENGINEERING CO PVT LTD(SUPRA) AS THE SAME HAS BEEN ACCEPTED. (C) WE FIND THAT THERE ARE CONCURRENT FINDING OF FA CT WITH REGARD TO THE NATURE OF FUNCTION RENDERED BY THE ITEMS LISTED AT ITEMS (A) TO (D) IN PARAGRAPH(3) ABOVE IN THE WINDMILL IN THE ORDERS OF THE CIT(A) AND THE IMPUGN ED ORDER OF THE TRIBUNAL WHICH ARE NOT SHOWN TO BE PERVERSE. THIS COUPLED WITH THE DECISION OF THE PUNJAB AND HARYANA HIGH COURT I.E. EASTMAN IMPEX(SUPRA) AND TH E DECISION OF THE TRIBUNAL IN TRUMAC ENGINEERING CO.PVT LTD(SUPRA) WHICH HAS BEEN ACCEPTED BY THE REVENUE 7 ITA NO.1393/PN/2013 AND NO DISTINGUISHING FEATURES ARE SHOWN TO US. QUE STION NO.(1) AS FRAMED DOES NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF LAW. THUS NOT ADMITTED. 8 REGARDING QUESTION (2) (A) IT IS AGREED POSITION BETWEEN THE PARTIES THAT THE ISSUE RAISED HEREIN STANDS CONCLUDED AGAINST THE REVENUE BY THE DECISION OF TH IS COURT IN COOPER FOUNDARY PVT LTD(SUPRA) I.E. THE COST OF CIVIL FOUNDATION IS TO BE ALLOWED DEPRECIATION @80%. (B) IN THE ABOVE VIEW QUESTION NO.2 AS FORMULATED DOES NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF LAW. THUS NOT ENTERTAINED. 7. IN VIEW OF THE AFORESAID FACTS AND RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE BOMBAY HIGH COURT AND THE DECISION OF THE C O-ORDINATE BENCH OF TRIBUNAL WE DIRECT THE ASSESSING OFFICER TO GRANT DEPRECIATI ON @ 80% AND THUS DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. THUS THE GROUNDS NO.1 AND 2 OF ASSESSEES APPEAL ARE ALLOWED. 8. THE THIRD GROUND WITH RESPECT TO ADDITION OF RS. 15 01 088/- ON ACCOUNT OF SHORTAGE. 8.1 ON PERUSING THE TAX AUDIT REPORT THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD SHOWN SHORTAGE OF 1 01 678 KGS. IN RES PECT OF VARIOUS FRUITS THE DETAILS OF WHICH ARE LISTED AT PAGE 3 OF THE ASSESS MENT ORDER. THE ASSESSEE WAS ASKED AS TO SHOW AS TO WHY THE SHORTAGE CLAIMED NOT BE DISALLOWED TO WHICH ASSESSEE INTER-ALIA SUBMITTED THAT ASSESSEE DEALS IN FRUITS WHICH ARE H IGHLY PERISHABLE IN NATURE. IT WAS SUBMITTED THAT ASSESS EE ALSO EXPORTS VEGETABLES. DUE TO THE QUARANTINE LAWS THERE IS STRICT CHECK ON AL L THE SHIPMENTS ON THE GOODS AND BECAUSE OF WHICH ASSESSEE HAS TO REMOVE THE GOODS W HICH ARE NOT UPTO THE STANDARDS BEFORE THE SHIPMENT AND THESE GOODS ARE D ESTROYED. IT WAS FURTHER SUBMITTED THAT THE PRICE OF GOODS ARE DEPENDENT ON THE QUALITY AND THE FRESHNESS OF PRODUCE AND THAT THE DAMAGES TO THE FRUITS OCCUR INTER-ALIA DUE TO EVAPORATION OF WATER CONTENT IMPROPER PRE-HARVEST AND POST-HARVES T HANDLING AND DAMAGE DURING 8 ITA NO.1393/PN/2013 THE TRANSPORTATION OF THE GOODS. DUE TO THE AFORES AID FACTORS THE DAMAGE TAKES PLACE AND THE SAME HAS BEEN CLAIMED BY ASSESSEE. T HE SUBMISSION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE ASSESSING OFFICER AS HE WAS OF THE VIEW THAT ASSESSEE HAD NOT FURNISHED ANY DOCUMENTARY EVI DENCE TO SUPPORT ITS CLAIM OF LOSS. HE THEREFORE CONSIDERED 50% OF THE SHORTAGE CLAIMED BY THE ASSESSEE AS BEING NOT ALLOWABLE AND ACCORDINGLY AFTER CONSIDERI NG THE AVERAGE PURCHASE PRICE DETERMINED THE VALUE OF DISALLOWANCE AT 50% OF SHOR TAGE AND WORKED OUT THE DISALLOWANCE OF RS.15 01 088/-. AGGRIEVED BY THE O RDER OF ASSESSING OFFICER ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO UPHELD THE ORDER OF ASSESSING OFFICER BY HOLDING AS UNDER :- 5. IT WAS NOTICED BY THE ASSESSING OFFICER THAT AS PER THE TAX AUDIT REPORT APPELLANT HAS SHOWN SHORTAGE OF 1 01 678 KGS IN THE QUANTITATIVE STOCK. THIS SHORTAGE WAS IN RESPECT OF GRAPES LEMON MANGOES POMEGRANATE AND VEGETABLES. THE APPELLANT WAS ASKED TO EXPLAIN THE SHORTAGE CLA IMED BY THE APPELLANT. IT WAS REPLIED THAT THE SHORTAGE WAS DUE TO PERISHABLE NAT URE OF GOODS. THE APPELLANT EXPORTS FRUITS AND VEGETABLES WHICH ARE HIGHLY PERI SHABLE. DUE TO QUARANTINE LAWS THERE IS STRICT CHECK ON ALL THE SHIPMENTS. M ANY TIMES THE APPELLANT IS COMPELLED TO REMOVE SOME OF THE GOODS BEFORE THE SHIPMENT IN ORDER TO OBSERVE THE QUARANTINE LAWS. SUCH GOODS HAVE TO BE COMPULSORILY DESTROYED; PARTICULARLY GRAPES ARE HIG HLY SUSCEPTIBLE TO DAMAGE. THAT IS WHY THE SHORTAGES HAD TO BE CLAIMED . THE ASSESSING OFFICER DID NOT ACCEPT THE APPELLANT'S REPLY DUE TO THE REASON THAT NO SUPPORTING DOCUMENTS HAVE BEEN FURNISHED BY THE APP ELLANT. HOWEVER THE ASSESSING OFFICER HAS ACCEPTED THAT THE GENERAL REPLY IS TRUE AND SHORTAGES WILL BE THERE BUT DUE TO NON-FURNISHING O F DOCUMENTARY EVIDENCES 50% OF THE CLAIM HAS BEEN DISALLOWED. THE ASSESSING OFFICER HAS RELIED ON THE DECISION OF HONOURABLE MADRAS HIG H COURT IN THE CASE OF VIJAYKUMAR MILLS LTD. V/S CIT 194 ITR 197. 6. BEFORE THE UNDERSIGNED SIMILAR CONTENTIONS WERE MADE BY THE APPELLANT. IT WAS STATED THAT VARIOUS FACTORS CAUSE MORE SHORTAGE IN FRUITS HAVING WATER CONTENTS. THESE ARE DAMAGED DUE TO EVAPORATION OF WATER CONTENTS PRE-HARVEST HANDLING DUE TO UNEDUCA TED LABOUR POST- HARVEST DAMAGE DUE TO HANDLING WHILE IN TRANSPORT DAMAGE DUE TO PRE- COOLING STAGE ETC. ALL THESE CONTENTIONS ARE IN GEN ERAL CORRECT. BUT TO QUANTIFY THE AMOUNT OF LOSS DOCUMENTARY EVIDENCE I S NECESSARY. THE ASSESSING OFFICER HAS DULY ALLOWED 50% OF THE SHORT AGE CLAIMED BY THE APPELLANT. THEREFORE THE DISALLOWANCE OF BALANCE 5 0% IS CONFIRMED AND THE GROUND TAKEN BY THE APPELLANT IS REJECTED. 9. AGGRIEVED BY THE ORDER OF LD. CIT(A) THE ASSESS EE IS NOW IN APPEAL BEFORE US. 9 ITA NO.1393/PN/2013 9.1 BEFORE US LD. AR REITERATED THE SUBMISSIONS MA DE BEFORE ASSESSING OFFICER AND LD. CIT(A) AND FURTHER IN THE PAPER BOOK SUBMIT TED THE PHOTOGRAPHS OF THE ENTIRE PROCESS FROM HARVESTING TO THE FINAL UPLOADI NG OF THE CONTAINER FOR EXPORTS COPY OF THE CHART REVEALING WATER CONTENT OF FRUITS AND VEGETABLES. HE POINTED TO THE VARIOUS PROCESSES AND SUBMITTED THAT ASSESSEE R ECORDS THE PURCHASE OF THE GRAPES WHICH ARE PURCHASED AT THE FARM BUT SUBSEQUE NTLY ON GRADING THE FRUITS MANY TIMES THE FRUITS WHICH ARE NOT UPTO THE MARK O R DAMAGED HAVE TO BE CONSIDERED AS WASTES AND HAVE TO BE DESTROYED. HE FURTHER SUBMITTED THAT ASSESSEE HAS BEEN FOLLOWING SIMILAR METHOD OF ACCOU NTING OF SHORTAGE IN EARLIER YEARS AND SUBSEQUENT YEARS AND THE METHOD OF ACCOUN TING HAS BEEN ACCEPTED BY THE REVENUE EVEN IN THE SCRUTINY ASSESSMENT PROCEED INGS. HE PLACED ON RECORD THE COPY OF ASSESSMENT ORDERS FRAMED FOR ASSESSMENT YEARS 2006-07 TO 2008-09. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY MATERIAL TO DEMONSTRATE THAT ASSESSEE HAS SOLD THE DAMAGED GOODS WITHOUT RECORDING IT IN THE BOOKS OF ACCOUNTS AND THAT THE DISALLOWANCE HAS BEEN MADE BY ASSESSING OFFICER ON AD-HOC BASIS WITHOUT RECORDING A FINDING AS TO WHICH OF THE CONTENTIONS MADE BY THE ASSESSEE ARE INCORRECT. HE FURTHER SUBMITTED THAT ASSESSEE HAS ALSO MAINTAINED QUANTITATIVE RECORDS O F THE GOODS AND THERE IS NO QUALIFICATION BY THE TAX AUDITOR. HE THEREFORE SUB MITTED THAT THE ENTIRE ADDITION NEEDS TO BE DELETED. THE LD. DR ON THE OTHER HAND SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND LD. CIT(A). 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESPECT TO SHORTAGE. IT IS UNDISPUTED FACT THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF EXP ORTING OF FRUITS AND VEGETABLES. IT IS ALSO A FACT THAT ASSESSEE PROCURES THE FRUITS AND VEGETABLES FROM THE FARM AND AFTER COLLECTING THE FRUITS FROM FARMS AND AFTER UN DERTAKING VARIOUS PROCESSES THE 10 ITA NO.1393/PN/2013 SAME WERE TRANSPORTED TO THE PACKING HOUSE WHEREIN THE GRADING TRIMMING AND VARIOUS OTHER PROCESSES ARE UNDERTAKEN BY THE ASSES SEE BEFORE THE SAME ARE PACKED FOR EXPORT. IT IS ALSO A FACT THAT THE ENTI RE PURCHASES OF THE FRUITS AND VEGETABLES ARE NOT EXPORTED BUT ONLY THE GOOD QUALI TY OF FRUITS WHICH ARE ACCEPTABLE TO THE CUSTOMERS ARE EXPORTED. IT IS ALSO A FACT T HAT DURING THE PROCESS OF COLLECTION OF FRUITS AND THE FINAL EXPORT DAMAGES TAKES PLACE AND THE FACT THAT SIMILAR SHORTAGE AND DAMAGES HAVE BEEN ACCEPTED BY THE DEPARTMENT IN EARLIER YEARS I.E. ASSESSMENT YEARS 2006-07 TO 2008-09 IN THE ASSESSME NT FRAMED UNDER SECTION 143(3) OF THE ACT IS NOT IN DISPUTE. BEFORE US RE VENUE HAS NOT PLACED ANY MATERIAL ON RECORD TO DEMONSTRATE THAT THE SHORTAGE SHOWN BY THE ASSESSEE HAS BEEN SOLD WITHOUT RECORDING IT IN THE BOOKS OF ACCOUNTS. IT IS ALSO A FACT THAT BOOKS OF THE ASSESSEE ARE AUDITED AND NO ADVERSE COMMENTS ON ACC OUNT OF SHORTAGE HAS BEEN MADE BY THE STATUTORY AUDITORS IN THEIR REPORT OR I N THE TAX AUDIT REPORT. IN VIEW OF THE AFORESAID FACTS WE ARE OF THE VIEW THAT ASSESS ING OFFICER WAS NOT JUSTIFIED IN MAKING AN AD-HOC DISALLOWANCE OF SHORTAGE. WE THUS DIRECT THE DELETION OF DISALLOWANCE MADE BY ASSESSING OFFICER. THUS THE GROUND NO.3 OF ASSESSEES APPEAL IS ALLOWED. 11. GROUND NO.4 IS WITH RESPECT TO AD-HOC ADDITION OF RS.5 00 000/-. 11.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS A SSESSING OFFICER NOTICED THAT ASSESSEE HAD MADE PAYMENT IN CASH TO CROP GROW ERS. TO VERIFY THE PURCHASES THE ASSESSEE WAS ASKED TO PRODUCE THREE MAJOR PARTIES FOR VERIFICATION. THE ASSESSEE PRODUCED (I) SHRI RAMESH PANDURANG BAN GALE (II) SHRI SHARAD VASUDEO HAVELI AND (III) SHRI VISHNU NAMDEO NALAWAD E. THE ASSESSING OFFICER RECORDED THEIR STATEMENTS. HE NOTED THAT THOUGH TH ESE PERSONS WERE STATED TO BE SUPPLYING THE CROPS TO THE ASSESSEE SINCE LAST 18 T O 20 YEARS AND EVEN THOUGH THEY 11 ITA NO.1393/PN/2013 WERE MAINTAINING BANK ACCOUNTS THE ASSESSEE HAD MA DE PAYMENTS TO THEM IN CASH. THE ASSESSING OFFICER THEREAFTER CONCLUDED T HAT SINCE THE ASSESSEE WAS MAKING CASH PAYMENTS INSPITE OF FACT THAT THESE PER SONS WERE MAINTAINING BANK ACCOUNTS THE PURCHASES SHOWN BY THE ASSESSEE WERE NOT VERIFIABLE AS THE SELLERS WERE NOT MAINTAINING ANY RECORD IN RESPECT OF SALE OF CROPS TO THE ASSESSEE. HE ACCORDINGLY MADE AD-HOC ADDITION OF RS.5 00 000/-. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER ASSESSEE CARRIED THE MATTER BEFO RE THE LD. CIT(A) WHO UPHELD THE ORDER OF ASSESSING OFFICER BY HOLDING AS UNDER :- 7. THE ASSESSING OFFICER HAS NOTICED THAT PAYMENTS IN CASH HAVE BEEN MADE TO CROP GROWERS OF GRAPES MANGOES ETC. T O VERIFY THE PURCHASES IN CASH THREE OF THE CROP GROWERS WERE A SKED TO BE PRODUCED. THREE PERSONS VIZ. RAMESH PANDURANG BANGA LE SHRI SHARAD VASUDEO HAVELI AND SHRI VISHNU NAMDEO NALAWA DE WERE PRODUCED AND THEIR STATEMENTS WERE RECORDED. IT WAS NOTICED THAT ALTHOUGH THESE PERSONS WERE MAINTAINING BANK ACCOUN TS PAYMENTS HAVE BEEN MADE TO THEM IN CASH. ALL THE PERSONS WER E SUPPLYING FRUITS TO THE APPELLANT AND THEY KNEW THE APPELLANT FOR THE LAST 18-20 YEARS. THEY SOLD THEIR ENTIRE CROP OF GRAPES TO THE APPELLANT. THEY HAVE GROWN 10 TO 12 TONS PER ACRE GRAPES IN A YEAR AND ENTIRE CROP WAS SOLD TO THE APPELLANT AND LASTLY ALL OF THEM CO NTENDED THAT THEY ARE NOT MAINTAINING ANY RECORDS FOR THE SALE MADE T O THE APPELLANT. SINCE INSPITE OF THE ABOVE FACTS THE APPELLANT IS M AKING CASH PAYMENTS AND THERE IS NO RECORD OF SALE MADE BY THE SE SELLERS TO THE APPELLANT COMPANY THE ASSESSING OFFICER CAME TO TH E CONCLUSION THAT THESE PURCHASE TRANSACTIONS WERE NOT FULLY VERIFIAB LE. SIMILAR MODE OF OPERANDI WAS NOTICED IN RESPECT OF PURCHASE OF OTHE R CROPS ALSO. IN VIEW OF THESE DISCREPANCIES AND TO COVER UP THE VAR IOUS OMISSIONS AND COMMISSIONS AN AMOUNT OF RS.5 LAKHS HAS BEEN A DDED ON AD HOC BASIS. 8. CONTENTIONS WERE MADE BEFORE THE UNDERSIGNED THA T THE PURCHASES MADE WERE GENUINE AND IT IS INCOMPREHENSI BLE TO UNDERSTAND THE ASSESSING OFFICER'S OBSERVATION WHY THE PURCHASE PRICE WAS NOT VERIFIABLE. THOSE THREE FARMERS CORRE CTLY STATED THAT THE PRICE RANGES FROM RS.25/- TO RS.50/- PER KILOGRAM. THE PRICE IS DEPENDENT ON QUALITY OF GRAPES AND MARKET CONDITION . DURING THE INITIAL PERIOD AND THE LAST PERIOD OF THE SEASON T HE RATES ARE ALWAYS HIGHER WHEREAS DURING THE MIDDLE OF THE SEASON THEY ARE LOWER DUE TO SITUATION IN THE MARKET. 9. THE ABOVE GENERAL CONTENTION IS CORRECT BUT THER E HAS TO BE DOCUMENTARY EVIDENCE IN RESPECT OF BILLS AND VOUCHE RS. MOREOVER THE DISALLOWANCE IS MERELY RS.5 00 000/- AND THAT TOO H AS BEEN MADE AFTER HAVING FOUND THAT CASH PAYMENT WAS MADE INSPI TE OF THE VARIOUS FACTORS MENTIONED IN THE ASSESSMENT ORDER AS PER WH ICH PAYMENT BY CHEQUE OR DEMAND DRAFT WOULD NOT HAVE CAUSED ANY HA RDSHIP. THEREFORE THE ADDITION IS CONFIRMED AND THE GROUND IS REJECTED. 12 ITA NO.1393/PN/2013 12. AGGRIEVED BY THE ORDER OF LD. CIT(A) ASSESSEE IS NOW IN APPEAL BEFORE US. BEFORE US LD. AR REITERATED THE SUBMISSIONS MADE B EFORE ASSESSING OFFICER AND CIT(A). HE FURTHER SUBMITTED THAT THE PURCHASE OF GOODS HAVE NOT BEEN DOUBTED BY THE ASSESSING OFFICER. HE SUBMITTED THAT TO VERIFY THE PURCHASE THE ASSESSING OFFICER HAD RECORDED THE STATEMENT OF 3 SUPPLIERS A ND IN THEIR STATEMENTS THEY HAVE ACCEPTED THE FACT OF SALE OF GOODS TO THE ASSESSEE AND RECEIPT OF SALE PROCEEDS IN CASH. HE SUBMITTED THAT ONLY BASIS FOR DISALLOWANC E BY ASSESSING OFFICER WAS NON- MAINTENANCE OF RECORDS BY THE SELLERS. HE SUBMITTE D THAT WHEN THE SELLERS OF GOODS HAVE ACCEPTED THE SALE OF GOODS TO THE ASSESSEE AND RECEIPT OF THE SALE PROCEEDS THE MERE FACT OF NON-MAINTENANCE OF RECORDS AT THE SELLERS END CANNOT BE A GROUND FOR DISALLOWING THE EXPENSES IN THE HANDS OF THE AS SESSEE. HE FURTHER SUBMITTED THAT THE PAYMENTS OF CASH BY THE ASSESSEE IS PERMIT TED IN VIEW OF RULE 6DD(E) OF THE INCOME TAX RULES 1962 (IN SHORT THE RULES) A S THE PURCHASES ARE OF AGRICULTURAL GOODS. HE FURTHER SUBMITTED THAT EVEN THOUGH LD. CIT(A) HAS NOTED THAT THE ASSESSING OFFICERS OBSERVATION OF PURCHASE PRI CE BEING NON-VERIFIABLE WAS INCOMPREHENSIVE BUT STILL LD. CIT(A) HAS UPHELD THE DISALLOWANCE. HE THEREFORE SUBMITTED THAT IN THE PRESENT SITUATION NO AD-HOC D ISALLOWANCE AT THE END OF THE ASSESSING OFFICER WAS CALLED FOR. THE LD. DR ON T HE OTHER HAND SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS PURCHAS ED FRUITS FOR WHICH THE PAYMENT WAS MADE IN CASH. WE FIND THAT THE SELLERS OF GOOD S HAVE CONFIRMED ABOUT THE SUPPLY OF GOODS TO THE ASSESSEE AND THE PAYMENTS FO R SALE BEING RECEIVED BY THEM IN CASH. THE ASSESSING OFFICER HAS NOT BROUGHT OUT ANY INSTANCE OF PURCHASE TRANSACTIONS WHICH WERE NOT VERIFIABLE AND HAD MERE LY PROCEEDED TO DISALLOW THE EXPENSES ON AD-HOC BASIS. FURTHER WE ARE OF THE V IEW THAT THE PAYMENT IN CASH FOR 13 ITA NO.1393/PN/2013 PURCHASE OF AGRICULTURAL COMMODITIES IS COVERED BY RULE 6DD(E) OF THE RULES AND IN SUCH A SITUATION MERELY BECAUSE THE CASH PAYMENTS H AVE BEEN MADE NO DISALLOWANCE COULD BE MADE. WE ARE OF THE VIEW THA T IN THE AFORESAID FACTS AND WITHOUT BRINGING ANY MATERIAL ON RECORD OF THE PURC HASES BEING NOT VERIFIABLE THE ASSESSING OFFICER COULD NOT HAVE RESORTED TO MAKE A N AD-HOC DISALLOWANCE. WE THEREFORE SET-ASIDE DISALLOWANCE MADE BY ASSESSING OFFICER. THUS THE GROUND NO.4 OF ASSESSEES APPEAL IS ALLOWED. 14. GROUND NO.5 IS WITH RESPECT TO AD-HOC DISALLOWA NCE OF RS.75 000/-. 14.1 THE ASSESSING OFFICER ON PERUSING THE PROFIT & LOSS ACCOUNT NOTICED THAT ASSESSEE HAD DEBITED RS.18 95 356/- AS LOADING AND UNLOADING CHARGES. HE FURTHER NOTICED THAT THE VOUCHERS FOR EXPENSES THAT WERE PRESENTED BY THE ASSESSEE BEFORE ASSESSING OFFICER WERE SELF-MADE VOUCHERS AN D DID NOT HAVE FULL PARTICULARS. HE THEREFORE PROCEEDED TO DISALLOW A LUMP SUM AMOUN T OF RS.75 000/-. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO UPHELD THE ORDER OF ASSESSING OFFICER BY HOLDIN G AS UNDER :- 10. APPELLANT COMPANY HAS DEBITED RS.18 95 356/- A S LOADING AND UNLOADING CHARGES. IT WAS SEEN BY THE ASSESSING OFF ICER THAT THE VOUCHERS PRODUCED BY THE APPELLANT COMPANY WERE NOT FULLY VERIFIABLE AS THESE WERE SELF-MADE VOUCHERS. THERE WERE NO FUL L PARTICULARS IN RESPECT OF THESE CHARGES. IN VIEW OF THIS AN AMOUN T OF RS.75 000/- HAS BEEN DISALLOWED. APPELLANT HAS CONTESTED THE DISALL OWANCE. HOWEVER THE SAME IS REJECTED DUE TO THE REASON THAT APPELLA NT HAS SUPPORTED THESE EXPENSES BY SELF-MADE VOUCHERS. 15. AGGRIEVED BY THE ORDER OF CIT(A) ASSESSEE IS N OW IN APPEAL BEFORE US. BEFORE US THE LD. AR REITERATED THE SUBMISSIONS MA DE BEFORE ASSESSING OFFICER AND LD. CIT(A). THE LD. DR ON THE OTHER HAND SUP PORTED THE ORDERS OF LOWER AUTHORITIES. 14 ITA NO.1393/PN/2013 16. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT OUT OF THE TOTAL EXPENSES RS.18.95 LAK HS ON ACCOUNT OF LOADING AND UNLOADING EXPENSES THE ASSESSING OFFICER HAD DISAL LOWED ONLY RS.75 000/-. BEFORE US ASSESSEE HAS NOT PLACED ANY MATERIAL TO CONTROVERT THE FINDINGS OF ASSESSING OFFICER. CONSIDERING THE TOTALITY OF FAC TS AND IN THE ABSENCE OF ANY MATERIAL PLACED BY THE ASSESSEE TO CONTROVERT THE F INDINGS OF ASSESSING OFFICER WE ARE OF THE VIEW THAT THE ASSESSING OFFICER WAS JUST IFIED IN DISALLOWING RS.75 000/- AND THEREFORE WE ARE OF THE VIEW THAT NO INTERFEREN CE TO THE ORDER OF ASSESSING OFFICER IS CALLED FOR. THUS THE GROUND NO.5 OF ASSESSEES APPEAL IS DISMI SSED. 17. GROUND NO.6 IS WITH RESPECT TO DISALLOWANCE ON ACCOUNT OF EXPENDITURE BEING OF PERSONAL IN NATURE. 17.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON PERUSING THE PROFIT & LOSS ACCOUNT ASSESSING OFFICER NOTICED THAT ASSESSEE HA D DEBITED AGGREGATED AMOUNT OF RS.10 98 046/- UNDER THE HEAD ADMINISTRATIVE EXP ENSES WHICH COMPRISED OF EXPENSES ON ACCOUNT OF VEHICLE REPAIRS AND MAINTENA NCE TELEPHONE EXPENSES AND TRAVELLING EXPENSES. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ELEMENT OF PERSONAL EXPENDITURE OF THE DIRECTORS AND THE FAMIL Y MEMBERS COULD NOT BE RULED OUT AND FURTHER THAT THE VOUCHERS FOR EXPENSES WERE SELF-MADE AND WERE NOT FULLY VERIFIABLE. HE THEREFORE CONSIDERED 10% OF THE AFO RESAID EXPENSES TO BE A PERSONAL IN NATURE AND ACCORDINGLY DISALLOWED RS.1 09 804/-. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER ASSESSEE CARRIED THE MATTER BEFO RE THE LD. CIT(A) WHO UPHELD THE ORDER OF ASSESSING OFFICER BY HOLDING AS UNDER :- 11. APPELLANT HAS CLAIMED RS.10 98 046/- ON ACCOUN T OF VEHICLE REPAIRS AND MAINTENANCE TELEPHONE EXPENSES AND TRA VELLING EXPENSES OUT OF WHICH 10% OF THE SAME HAS BEEN DISALLOWED FO R PERSONAL USE. THE DISALLOWANCE IS HEREBY CONFIRMED FOR THE REASON RECORDED IN THE 15 ITA NO.1393/PN/2013 APPELLATE ORDER IN THE APPELLANT'S OWN CASE FOR ASS ESSMENT YEAR 2008- 09 BEARING NO. SLI/280/ 10-11 DATED 08/05/2013. 18. AGGRIEVED BY THE ORDER OF CIT(A) THE ASSESSEE IS NOW IN APPEAL BEFORE US. AT THE OUTSET LD. AR SUBMITTED THAT IDENTICAL ISSU E AROSE IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2008-09. THE ASSESSEE HAD CARRIED THE MATTER BEFORE THE CO- ORDINATE BENCH OF TRIBUNAL AND THE HONBLE TRIBUNAL VIDE ORDER DATED 31.03.2016 HAD DELETED THE ADDITION MADE BY ASSESSING OFFICER. HE POINTED TO THE RELEVANT FINDINGS OF HONBLE ITAT. HE THEREFORE SUBMITTED T HAT SINCE THE FACTS OF THE CASE IN THE YEAR UNDER APPEAL ARE IDENTICAL TO THAT OF EARL IER YEARS THE ADDITION BE DELETED. THE LD. DR ON THE OTHER HAND DID NOT CONTROVERT T HE SUBMISSIONS OF LD. AR BUT HOWEVER SUPPORTED THE ORDER OF LOWER AUTHORITIES. 19. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO AD -HOC DISALLOWANCE OF EXPENSES BY HOLDING THEM TO BE A PERSONAL IN NATURE. WE FIN D THAT IDENTICAL ISSUE AROSE IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2008-09 AND THE ISSUE WAS DECIDED BY THE CO-ORDINATE BENCH OF TRIBUNAL IN ASSESSEES FAV OUR BY HOLDING AS UNDER :- 10. GROUND NO.3 OF THE APPEAL OF ASSESSEE RELATES TO DISALLOWANCE OF RS.1 03 815/- ON ACCOUNT OF ELEMENT OF PERSONAL USE R TOWARDS VEHICLE REPAIRS AND MAINTENANCE TELEPHONE EXPENSES AND TRAVELLING EXPE NSES ETC. ON ESTIMATED BASIS. 11. IT IS THE CASE OF THE ASSESSEE THAT IN THE CASE OF A COMPANY ELEMENT OF PERSONAL USER OUT OF EXPENSES CANNOT BE INFERRED. WE FIND MERIT IN THE PLEA OF THE ASSESSEE. THE COMPANY BEING JURISTIC PERSON IT IS DIFFICULT TO ACCEPT THE BASIS FOR DISALLOWANCE OF THE REVENUE. A COMPANY IS INCAPABL E OF HAVING ANY PERSONAL USER OF THE FACILITIES. THE DIRECTORS ARE SEPARATE FROM THE COMPANY. EVEN ASSUMING THAT FACILITIES WERE OCCASIONALLY USED FOR PERSONAL PURP OSES IT IS A BUSINESS EXPENDITURE IN SO FAR AS COMPANY IS CONCERNED. SUCH USAGE OF F ACILITIES AT ANY RATE CAN BE POSSIBLY TAXED IN THE HANDS OF THE USER AS PERQUISI TE ALONE. THEREFORE NO ESTIMATED DISALLOWANCE ON ACCOUNT OF PERSONAL USER IS CALLED FOR. IN THE RESULT GROUND NO.3 IS ALSO ALLOWED. 20. BEFORE US REVENUE HAS NOT PLACED ANY MATERIAL ON RECORD TO POINT OUT ANY DISTINGUISHING FEATURE IN THE FACTS OF THE CASE IN THE YEAR UNDER APPEAL AND THAT OF 16 ITA NO.1393/PN/2013 ASSESSMENT YEAR 2008-09. IN VIEW OF THE AFORESAID FACTS AND FOLLOWING THE REASONING GIVEN BY THE CO-ORDINATE BENCH WHILE DECI DING THE ISSUE IN ASSESSMENT YEAR 2008-09 WE DIRECT THE DELETION OF THE ADDITIO N MADE BY ASSESSING OFFICER. THUS THE GROUND NO.6 OF ASSESSEES APPEAL IS ALLOW ED. 21. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED ON THIS 30 TH DAY OF SEPTEMBER 2016. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER # / ACCOUNTANT MEMBER PUNE ; DATED : 30 TH SEPTEMBER 2016. % & ' () *) / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A) KOLHAPUR; 4) THE CIT-II KOLHAPUR; 5) THE DR A BENCH I.T.A.T. PUNE; 6) GUARD FILE. % / BY ORDER ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* / ITAT PUNE