M/s. S.C. Thakur & Bros., Raigad v. Additional Comm. of Income-tax, Panvel

ITA 165/PUN/2009 | 2005-2006
Pronouncement Date: 17-07-2013 | Result: Partly Allowed

Appeal Details

RSA Number 16524514 RSA 2009
Assessee PAN AADCS8865K
Bench Pune
Appeal Number ITA 165/PUN/2009
Duration Of Justice 4 year(s) 5 month(s) 14 day(s)
Appellant M/s. S.C. Thakur & Bros., Raigad
Respondent Additional Comm. of Income-tax, Panvel
Appeal Type Income Tax Appeal
Pronouncement Date 17-07-2013
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 17-07-2013
Date Of Final Hearing 23-10-2012
Next Hearing Date 23-10-2012
Assessment Year 2005-2006
Appeal Filed On 03-02-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES B PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI G.S. PANNU ACCOUNTANT MEMBER ITA NO.165/PN/2009 (ASSESSMENT YEAR: 2005-06) M/S. S. C. THAKUR & BROS. AT POST GAVHAN TAL PANVEL DIST.- RAIGAD PAN : AADCS8865K . APPELLANT VS. ADDL. COMMISSIONER OF INCOME TAX RANGE PANVEL PANVEL . RESPONDENT APPELLANT BY : MR. M. K. KULKARNI RESPONDENT BY : MR. RAJIB JAIN DATE OF HEARING : 09-07-2013 DATE OF PRONOUNCEMENT : 17-07-2013 ORDER PER G. S. PANNU AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I THANE DATED 17.10.2008 WHICH IN TURN HAS ARISEN FROM AN ORDER DATED 27.12.2007 PAS SED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2005-06. 2. IN THIS APPEAL ASSESSEE HAS RAISED THREE GROUND S WHICH WE SHALL DEAL IN SERIATIM. BY WAY OF FIRST GROUND ASSESSEE HAS C HALLENGED THE DISALLOWANCE OF AN AMOUNT OF RS.6 97 012/- MADE BY THE ASSESSING OFFICER BY INVOKING SECTION 14A OF THE ACT. 3. IN BRIEF THE FACTS ARE THAT ASSESSEE-FIRM IS A PARTNER IN A JOINT VENTURE FIRM M/S THAKUR MHATRE UNITY JOINT VENTURE (IN SH ORT TMUJV). THE ASSESSING OFFICER NOTED THAT ASSESSEE HAD INVESTED IN TMUJV A SUM OF RS.1 84 28 793/- AS CAPITAL CONTRIBUTION. BESIDES T HE AFORESAID IT WAS NOTICED ITA NO.165/PN/2009 M/S. S. C. THAKUR & BROS. A.Y. 2005-06 THAT ASSESSEE HAD ALSO MADE AN INVESTMENT OF RS.2 1 6 29 374/- IN TMUJV. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE-FIR M HAD NOT CHARGED ANY INTEREST ON THE CAPITAL CONTRIBUTION AND THE INVEST MENT MADE IN TMUJV. THE ASSESSING OFFICER ALSO NOTICED THAT ASSESSEE RECEIV ED A SHARE IN THE TOTAL PROFIT FROM TMUJV OF RS.75 91 821/- WHICH WAS EXEMP T IN TERMS OF SECTION 10(2A) OF THE ACT. THE ASSESSING OFFICER ALSO NOTIC ED THAT ASSESSEE HAD INCURRED INTEREST ON LOANS RAISED AMOUNTING TO RS.4 3 52 604/-. AS PER THE ASSESSING OFFICER THE ASSESSEE WAS NOT CHARGING AN Y INTEREST FROM TMUJV WHEREAS THE INCOME FROM THE SAID TMUJV-FIRM WAS EXE MPT AND THEREFORE THE INTEREST EXPENDITURE IN RELATION TO SUCH EXEMPT INC OME WAS DISALLOWABLE IN TERMS OF SECTION 14A OF THE ACT. AS PER THE ASSESSI NG OFFICER THE AVERAGE COST OF FUNDS TO THE ASSESSEE WAS 1.74% AND THEREFO RE THE PROPORTIONATE INTEREST RELATABLE TO THE TOTAL INVESTMENT MADE BY THE ASSESSEE IN TMUJV-FIRM OF RS.4 00 58 167/- (I.E. RS.1 84 28 793/- PLUS RS. 2 16 29 374/-) WORKED OUT TO RS.6 97 012/- WHICH WAS DISALLOWED UNDER SECTION 1 4A OF THE ACT. THE CIT(A) HAS ALSO UPHELD THE DISALLOWANCE AGAINST WHICH ASS ESSEE IS IN FURTHER APPEAL BEFORE US. 4. BEFORE US THE PLEA OF THE ASSESSEE IS THAT THE DISALLOWANCE HAS BEEN MADE WITHOUT SATISFYING THE LEGAL PARA-METERS OF SE CTION 14A OF THE ACT WHICH REQUIRED THE ASSESSING OFFICER TO PROVE THAT CERTAI N EXPENDITURE HAS INDEED BEEN INCURRED IN RELATION TO THE EARNING OF TAX-FRE E INCOME. THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE DIS ALLOWANCE HAS BEEN MADE BY ASSUMING THAT CERTAIN INTEREST EXPENDITURE HAS B EEN INCURRED FOR THE PURPOSE OF EARNING THE TAX-FREE INCOME FROM TMUJV-F IRM. IN THIS CONNECTION RELIANCE HAS ALSO BEEN PLACED ON THE THIRD MEMBER D ECISION OF THE TRIBUNAL IN THE CASE OF WIMCO SEEDLINGS LTD. VS. DCIT (2007) 1 09 TTJ (DEL) (TM) 462 A COPY OF WHICH HAS BEEN PLACED ON RECORD. ITA NO.165/PN/2009 M/S. S. C. THAKUR & BROS. A.Y. 2005-06 5. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPR ESENTATIVE APPEARING FOR THE REVENUE HAS DEFENDED THE DISALLOWANCE MADE BY INVOKING SECTION 14A OF THE ACT BY POINTING OUT THAT THE ASSESSING O FFICER HAS SATISFACTORILY DISCHARGED HIS ONUS OF ESTABLISHING THE FACT THAT T HE PROVISIONS OF SECTION 14A OF THE ACT ARE SQUARELY APPLICABLE IN THE PRESENT C ASE. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS POINTED OUT THAT AS SESSEE HAD EARNED EXEMPT INCOME OF RS.75 91 821/- FROM THE TMUJV-FIRM AND AT THE SAME TIME IT HAD INCURRED EXPENDITURE BY WAY OF BANK INTEREST AMOUNTING TO RS.43 52 604/- AND THE INVESTMENTS IN THE FIRM WERE MADE OUT OF THE LOANS RAISED FROM THE BANK. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE MANDATE OF SECTION 14A OF THE ACT IS TO DISALLOW AN EXPENDITUR E INCURRED BY AN ASSESSEE IN RELATION TO INCOME WHICH DOES NOT FORM PART OF T HE TOTAL INCOME UNDER THE ACT. IN OTHER WORDS IN TERMS OF SECTION 14A OF THE ACT NO DEDUCTION CAN BE ALLOWED IN RESPECT OF EXPENDITURE INCURRED BY THE A SSESSEE IN RELATION TO AN INCOME WHICH IS EXEMPT FROM TAX. IN THE PRESENT CAS E AS PER THE ASSESSING OFFICER ASSESSEE HAS EARNED HIS SHARE IN THE PROFI T OF THE TMUJV-FIRM OF RS.75 91 821/- WHICH IS EXEMPT UNDER SECTION 10(2A ) OF THE ACT. JUSTIFIABLY THE REVENUE IS COMPETENT TO EXAMINE THE SCOPE OF SE CTION 14A OF THE ACT AS TO WHETHER ASSESSEE HAS INCURRED ANY EXPENDITURE IN RELATION TO THE AFORESAID INCOME EARNED BY THE ASSESSEE WHICH IS EXEMPT UNDE R SECTION 10(2A) OF THE ACT. AS PER THE ASSESSING OFFICER ASSESSEE HAS PAI D INTEREST ON LOANS RAISED FROM THE BANK AMOUNTING TO RS.43 52 604/- AND THERE FORE THE PROPORTIONATE INTEREST RELATABLE TO THE AFORESAID EXEMPT INCOME I S LIABLE TO BE DISALLOWED UNDER SECTION 14A OF THE ACT. 7. IN OUR VIEW BEFORE MAKING THE AFORESAID DISALLO WANCE IT IS IMPERATIVE FOR THE ASSESSING OFFICER TO ESTABLISH THAT AN EXPE NDITURE HAS BEEN INCURRED IN RELATION TO THE EARNING OF TAX-FREE INCOME. THE HON BLE JURISDICTIONAL BOMBAY ITA NO.165/PN/2009 M/S. S. C. THAKUR & BROS. A.Y. 2005-06 HIGH COURT IN THE CASE OF GODREJ & BOYCE MANUFACTUR ING CO. LTD. VS. DCIT 328 ITR 81 (BOM.) HAS OBSERVED THAT ONCE A PROXIMAT E CAUSE FOR THE DISALLOWANCE IS ESTABLISHED WHICH IS THE RELATION SHIP OF THE EXPENDITURE WITH INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME A DISALLOWANCE UNDER SECTION 14A OF THE ACT HAS TO BE EFFECTED. IN THIS BACKGROUND ONE HAS TO EXAMINE AS TO WHETHER A PROXIMATE CAUSE FOR THE DIS ALLOWANCE IS ESTABLISHED IN THE PRESENT CASE OR NOT I.E. WHETHER THERE EXIST S A RELATIONSHIP BETWEEN THE IMPUGNED INTEREST EXPENDITURE AND THE INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME I.E. THE SHARE IN PROFIT EARNED BY THE ASSESSEE FROM THE TMUJV- FIRM. IN PARA 2.1 OF THE ASSESSMENT ORDER THE ASSE SSING OFFICER HAS NOTICED THAT THE INVESTMENTS IN THE TMUJV-FIRM HAS BEEN MAD E THROUGH CASH CREDIT ACCOUNT OF THE ASSESSEE WHICH IS INTEREST BEARING. FURTHER IN PARA 2.3 THE ASSESSING OFFICER HAS OBSERVED THAT THE INTEREST EX PENDITURE DEBITED IN PROFIT & LOSS ACCOUNT OF RS. 43 52 604/-INCLUDES INTEREST ON FUNDS WHICH HAVE BEEN WITHDRAWN FOR INVESTMENT IN INTEREST-FREE CAPITAL W ITH THE FIRM. FACTUALLY SPEAKING THERE IS NO NEGATION BY THE ASSESSEE TO T HE AFORESAID ASSERTIONS OF THE ASSESSING OFFICER. THEREFORE IN OUR VIEW THER E IS A PROXIMATE CAUSE FOR THE DISALLOWANCE UNDER SECTION 14A OF THE ACT IN TH E PRESENT CASE. SO HOWEVER THE AMOUNT OF DISALLOWANCE MADE BY THE ASS ESSING OFFICER REQUIRES A FURTHER EXAMINATION. IN THE ASSESSMENT ORDER ASS ESSING OFFICER HAS NOTICED THAT ASSESSEE HAS INVESTED IN THE CAPITAL OF THE TM UVJ-FIRM OF RS.1 84 28 793/- AND ALSO MADE AN INVESTMENT OF RS. 2 16 29 374/- IN TMUJV- FIRM. THE TOTAL AMOUNT INVESTED IN THE TMUVJ-FIRM H AS BEEN TAKEN AT RS.4 00 58 167/- AND INTEREST RELATABLE TO THE SAID AMOUNT HAS BEEN DISALLOWED UNDER SECTION 14A OF THE ACT. THE DISALL OWANCE UNDER SECTION 14A OF THE ACT HAS TO BE LIMITED TO THE EXPENDITURE INC URRED IN RELATION TO THE EXEMPT INCOME WHICH IN THE PRESENT CASE IS RS.75 9 1 821/- REPRESENTING SHARE IN PROFIT OF THE TMUJV-FIRM. IT IS NOT CLEAR FROM THE ASSESSMENT ORDER AS TO WHICH INVESTMENT HAS YIELDED THE IMPUGNED EXEMPT SHARE PROFIT FROM THE TMUJV-FIRM OF RS.75 91 821/- WHETHER IT CORRESPON DS TO THE CAPITAL ITA NO.165/PN/2009 M/S. S. C. THAKUR & BROS. A.Y. 2005-06 CONTRIBUTION OF RS.1 84 28 793/- OR THE SAME IS IN RELATION TO THE TOTAL INVESTMENT OF RS.4 00 58 167/- NOTED BY THE ASSESSI NG OFFICER. THE AFORESAID MATTER BEING A FACTUAL ASPECT NEEDS DETERMINATION A T THE LEVEL OF THE ASSESSING OFFICER. THEREFORE WHILE UPHOLDING IN TH E PRINCIPLE THE DISALLOWANCE UNDER SECTION 14A OF THE ACT WE REMAND THE ISSUE B ACK TO THE FILE OF THE ASSESSING OFFICER TO RESTRICT THE SAME ONLY TO THE EXPENDITURE INCURRED IN RELATION TO EARNING OF THE EXEMPT INCOME. THE AFORE SAID EXERCISE SHALL BE CARRIED OUT BY THE ASSESSING OFFICER AFTER ALLOWING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. THE ASSESSING OFFICER S HALL CONSIDER THE PLEA OF THE ASSESSEE AND THEREAFTER RE-WORK THE DISALLOWAN CE UNDER SECTION 14A OF THE ACT ACCORDINGLY AS PER LAW. THUS ON THIS ASPEC T ASSESSEE SUCCEEDS FOR STATISTICAL PURPOSES. 8. BY WAY OF GROUND OF APPEAL NO. 2 THE ASSESSEE I S AGGRIEVED BY THE DISALLOWANCE OF RS.44 80 303/- MADE BY THE ASSESSIN G OFFICER BY INVOKING SECTION 40(A)(IA) OF THE ACT. 9. BRIEF FACTS ARE THAT ASSESSEE WAS FOUND TO HAVE DEBITED AN EXPENDITURE OF RS.5 96 04 249/- ON ACCOUNT OF EARTH MOVING CHAR GES IN ITS PROFIT & LOSS ACCOUNT. THE SAID EXPENDITURE WAS INCURRED BY WAY O F PAYMENTS TO TRANSPORTERS FOR BRINGING EARTH FILL TO THE SITE OF THE ASSESSEE. THE ASSESSING OFFICER SHOW-CAUSED THE ASSESSEE AS TO WHY DISALLOW ANCE BE NOT MADE UNDER SECTION 40(A)(IA) OF THE ACT ON THE GROUND THAT THE REQUISITE TAX WAS NOT DEDUCTED AT SOURCE ON SUCH PAYMENTS. IN RESPONSE A SSESSEE FURNISHED DETAILS WHICH HAVE BEEN REPRODUCED IN PARA 3 OF TH E ASSESSMENT ORDER. AS PER THE ASSESSEE OUT OF THE TOTAL PAYMENTS OF RS.5 96 04 249/- A SUM OF RS.4 16 83 032/- WAS PAID TO DIFFERENT PARTIES BELO W RS.50 000/- EACH DURING THE ENTIRE YEAR AND THUS NO TAX WAS DEDUCTIBLE. THE AFORESAID POSITION HAS SINCE BEEN ACCEPTED BY THE ASSESSING OFFICER. FOR T HE BALANCE OF RS.1 79 21 212/- THE ASSESSEE EXPLAINED THAT A SUM OF RS.1 57 70 442/- WAS ITA NO.165/PN/2009 M/S. S. C. THAKUR & BROS. A.Y. 2005-06 PAID TO PERSONS WHO WERE HAVING ONE OR TWO TRUCKS A ND THEREFORE TAX WAS NOT DEDUCTIBLE. FOR THE BALANCE OF RS.21 50 770/- ASSE SSEE EXPLAINED THAT IT WAS PAID TO FOUR PARTIES WHO INSISTED ON CASH PAYMENTS AS THEIR INCOME WAS BELOW TAXABLE LIMITS AND THUS NO TAX WAS DEDUCTED AT SOU RCE. 10. FOR AFORESAID TWO CATEGORIES ASSESSEE WAS ASKE D TO SUBMIT FURTHER EVIDENCE IN SUPPORT OF HIS PLEA. THE ASSESSEE WAS A LSO ASKED AS TO WHETHER THE NECESSARY DECLARATIONS IN FORM NO. 15-I WERE OB TAINED FROM THE PARTIES. THE ASSESSEE DID NOT FURNISH ANY SUCH EVIDENCE. THE ASSESSEE HOWEVER POINTED OUT THAT THE PAYMENTS TO THE TRANSPORTERS W ERE INCLUSIVE OF THE COST OF MATERIAL WHICH IS THE EARTH FILL AND THAT TAX WAS D EDUCTIBLE ONLY ON THE ELEMENT OF TRANSPORTATION CHARGES AND NOT ON THE COST OF MA TERIAL. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE HOWEVER OFFERE D THAT AN AMOUNT EQUIVALENT TO 10% OF RS.1 57 70 442/- BE DISALLOWED ON THIS COUNT ON ESTIMATE BASIS. 11. THE ASSESSING OFFICER DID NOT ACCEPT THE OFFER OF THE ASSESSEE. ACCORDING TO THE ASSESSING OFFICER THE PAYMENTS OF RS.1 79 21 212/- (I.E. RS.1 57 70 442/- AND RS.21 50 770/-) WERE SUB JECT TO DEDUCTION OF TAX AT SOURCE BUT ONLY ON THE ELEMENT OF TRANSPORTATION CH ARGES. THE ASSESSING OFFICER HAS NOTED IN THE ASSESSMENT ORDER THAT SOME OF THE ASSESSEES IN A SIMILAR SITUATION AGREED TO TREAT 25% OF THE TOTAL PAYMENT AS TRANSPORTATION CHARGES AND THE BALANCE AS THE COST OF MATERIAL. TH EREFORE THE ASSESSING OFFICER DID NOT ACCEPT THE OFFER OF THE ASSESSEE IN DISALLOWING 10% ON ACCOUNT OF COST OF TRANSPORTATION. ACCORDINGLY 25% OF RS.1 79 21 212/- I.E. RS.44 80 303/- WAS DISALLOWED BY THE ASSESSING OFFI CER ON THIS COUNT. THE CIT(A) HAS ALSO UPHELD THE DISALLOWANCE AGAINST WHI CH ASSESSEE IS IN FURTHER APPEAL BEFORE US. ITA NO.165/PN/2009 M/S. S. C. THAKUR & BROS. A.Y. 2005-06 12. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE DISALLOWANCE HAS BEEN MADE BY THE ASSESSING OFFICER IN AN ADHOC MANNER AND ALSO WITHOUT APPRISING THE ASSESSEE AS TO UNDER WHAT CIRCUMSTANCES AND WHICH OF THE OTHER ASSESSEES HAVE AGREED FOR DISALL OWANCE OF 25% AS AGAINST 10% OFFERED BY THE ASSESSEE. THE LEARNED COUNSEL PO INTED OUT THAT IN ORDER TO OBTAIN PEACE AND COOPERATION WITH THE DEPARTMENT A SSESSEE HAD OFFERED 10% OF THE EXPENDITURE AS DISALLOWABLE WHICH FAIR AND PROPER. 13. ON THE OTHER HAND THE LEARNED DEPARTMENT REPRE SENTATIVE HAS DEFENDED THE ORDER OF THE ASSESSING OFFICER BY REFE RRING TO THE REASONING CONTAINED THEREIN WHICH WE SHALL ALREADY NOTED IN PARA 11 ABOVE AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 14. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. IN PRINCIPLE THERE IS NO DISPUTE THAT THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT ARE APPLICABLE ON PAYMENTS OF RS.1 79 21 212/- MADE BY THE ASSESSEE T OWARDS EARTH MOVING CHARGES WHICH ALSO CONTAINED AN ELEMENT OF TRANSPOR TATION CHARGES. THE ELEMENT OF TRANSPORTATION CHARGES REQUIRED DEDUCTIO N ON TAX AT SOURCE AND IN THE ABSENCE OF ANY SUCH DEDUCTION THE PROVISIONS O F SECTION 40(A)(IA) OF THE ACT HAS BEEN INVOKED. THE ONLY DISPUTE IS WITH REGA RD TO THE ELEMENT OF PAYMENT WHICH IS ATTRIBUTABLE TO THE TRANSPORTATION CHARGES WHICH ARE SUBJECT TO THE REQUIREMENTS OF TAX DEDUCTION AT SOURCE. THE ASSESSEE HAD OFFERED BEFORE THE ASSESSING OFFICER 10% OF THE TOTAL EXPEN DITURE AS ATTRIBUTABLE TO THE TRANSPORTATION CHARGES WHEREAS THE ASSESSING OFFIC ER HAS APPLIED A RATE OF 25%. THE ASSESSING OFFICER HAS ALSO REFERRED TO SOM E OTHER ASSESSEES WHO AGREED TO 25% DISALLOWANCE. HOWEVER APART FROM A B ALD ASSERTION THERE IS NO OTHER DETAIL OR INFORMATION MENTIONED IN THE ASSESS MENT ORDER AS TO THE SIMILARITIES WITH OTHER CASES SO AS TO JUSTIFY THE ADOPTION OF 25%. IT IS ALSO EVIDENT THAT THE ENTIRE EXERCISE INVOLVES AN ELEMEN T OF ESTIMATION AND GUESS WORK. THEREFORE CONSIDERING THE ENTIRETY OF CIRCUM STANCES AND THE ACTION OF ITA NO.165/PN/2009 M/S. S. C. THAKUR & BROS. A.Y. 2005-06 THE ASSESSEE FOR HAVING COME FORWARD DURING THE ASS ESSMENT PROCEEDINGS TO OFFER CERTAIN AMOUNT OF DISALLOWANCE WE DEEM IT FI T AND PROPER TO ACCEPT THE ESTIMATE MADE BY THE ASSESSEE AT 10% OF THE TOTAL E XPENDITURE. WE THEREFORE DIRECT THE ASSESSING OFFICER TO RESTRICT THE DISALL OWANCE TO 10% OF THE EARTH MOVING CHARGES OF RS.1 79 21 212/- (I.E. RS.1 57 70 442/- AND RS.21 50 770/-) I.E. RS.17 92 121/- INSTEAD OF RS.44 80 303/- DISAL LOWED BY HIM. THUS ON THIS GROUND ASSESSEE SUCCEEDS. 15. IN THE LAST GROUND ASSESSEE HAS CHALLENGED THE DISALLOWANCE OF RS.2 83 503/- MADE BY THE ASSESSING OFFICER UNDER S ECTION 40A(3) OF THE ACT. AS PER THE DISCUSSION CONTAINED IN PARA 4 OF THE AS SESSMENT ORDER IT IS SEEN THAT ASSESSEE WAS FOUND TO HAVE MADE PAYMENT OF RS. 14 17 515/- TO FOUR PERSONS ON ACCOUNT OF LABOUR CHARGES IN CASH THERE BY RESULTING IN VIOLATION OF SECTION 40A(3) OF THE ACT. ACCORDINGLY THE ASSESSI NG OFFICER DISALLOWED OF 20% OF SUCH EXPENDITURE WHICH CAME TO RS.2 83 503/- . THE CIT(A) HAS ALSO UPHELD THE DISALLOWANCE. BEFORE US THE ONLY PLEA R AISED BY THE ASSESSEE IS THAT IN THE PRESENT CASE INCOME OF THE ASSESSEE HAS BEEN ESTIMATED BECAUSE OF AN ESTIMATE DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT WHICH HAS BEEN DEALT IN EARLIER PARAGRAPH AND THEREFORE ONCE THE INCOME HAS BEEN ESTIMATED WHICH INCREASES THE NET PROFIT OF THE ASSESSEE NO SPECIFIC DISALLOWANCE UNDER SECTION 40A(3) OF THE ACT CAN BE MADE. 16. IN OUR VIEW THE AFORESAID PROPOSITION OF THE A SSESSEE IS UNTENABLE IN THE PRESENT CASE. IN THIS CASE THE INCOME OF THE A SSESSEE FROM BUSINESS HAS NOT BEEN ESTIMATED SO AS TO JUSTIFY THE PROPOSITION BEING ADVANCED. THE DISALLOWANCE UNDER SECTION 40A(3) OF THE ACT IS A S PECIFIC DISALLOWANCE AND IN THE PRESENT CASE IT IS JUSTIFIED ON FACTS AND THE ASSESSEE HAS NOT ADVANCED ANY REASON AND THEREFORE WE UPHOLD THE SAME. ACCOR DINGLY THE ASSESSEE FAILS ON THIS GROUND. ITA NO.165/PN/2009 M/S. S. C. THAKUR & BROS. A.Y. 2005-06 17. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JULY 2013. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G . S. PANNU) JUDICIAL MEMBER ACCOUNT ANT MEMBER PUNE DATED : 17 TH JULY 2013 SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-I THANE; 4) THE CIT-I THANE; 5) THE DR B BENCH I.T.A.T. PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T. PUNE