M/s. Pradip Exports,, Ahmedabad v. The ACIT., Circle-10,, Ahmedabad

ITA 207/AHD/2007 | 2003-2004
Pronouncement Date: 22-01-2010 | Result: Partly Allowed

Appeal Details

RSA Number 20720514 RSA 2007
Assessee PAN NDISE1070B
Bench Ahmedabad
Appeal Number ITA 207/AHD/2007
Duration Of Justice 3 year(s) 10 day(s)
Appellant M/s. Pradip Exports,, Ahmedabad
Respondent The ACIT., Circle-10,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 22-01-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 08-06-2007
Date Of Final Hearing 13-01-2010
Next Hearing Date 13-01-2010
Assessment Year 2003-2004
Appeal Filed On 11-01-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'A' (BEFORE S/SHRI T K SHARMA AND N S SAINI) ITA NO.207/AHD/2007 (ASSESSMENT YEAR:- 2003-04) PRADIP EXPORTS A/601 NARNARAYAN COMPLEX NAVRANGPURA AHMEDABAD V/S THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE-10 AHMEDABAD [APPELLANT] [RESPONDENT] APPELLANT BY :- SHRI SAKAR SHARMA CA RESPONDENT BY:- SHRI GOVIND SINGHAL SR. DR O R D E R PER N S SAINI (ACCOUNTANT MEMBER) : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMI SSIONER OF INCOME-TAX (APPEALS) DATED 16-11-2006 FOR ASSESSMEN T YEAR 2003- 04. THE GROUNDS OF APPEAL FILED BY THE ASSESSEE WI TH THE APPEAL MEMO WERE ARGUMENTATIVE. HENCE ON THE DATE OF HEARI NG THE ASSESSEE FILED CONCISE GROUNDS OF APPEAL WHICH ARE BEING DIS POSED OF AS UNDER: 2 GROUND NO.1 READS AS UNDER: 1 THE LD. CIT(A) ERRED ON FACTS AND IN LAW IN NOT GRANTING DEDUCTION U/S 80HHC ON INCOMES AND EARNED IN RESPECT OF DEPB LICENCES AND INTEREST EARNED ON BANK FDRS . 3 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS A VAILABLE ON RECORD. IN THE INSTANT CASE DEDUCTION U/S 80HHC WAS DENIED TO THE ASSESSEE ON THE INCOME EARNED FROM DEPB AND BENEFIT OF NETTI NG OF INTEREST RECEIVED FROM THE INTEREST PAID WAS NOT ALLOWED. TH E LEARNED 2 COMMISSIONER OF INCOME-TAX (APPEALS) CONFIRMED THE ABOVE ACTION OF THE LEARNED ASSESSING OFFICER. IN RESPECT OF DEP B THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OBSERVED AS UN DER:- 3 I HAVE CAREFULLY CONSIDERED THE OBSERVATIONS OF THE AO IN THE ASSESSMENT ORDER AND ARGUMENTS OF THE COUNSEL FOR T HE APPELLANT. THE APPELLANT IS HAVING EXPORT TURNOVER OF MORE THAN RS .10 CRORES WHICH FACT HAS BEEN ADMITTED BY THE APPELLANT. AS REGARDS THE PROFIT ON SALE OF DEPB LICENCE THE APPELLANT IS DUTY BOUND TO SATISFY THE FOLLOWING TWO CONDITIONS AS PER THE AMENDED PROVISIONS OF LAW FOR CLAIMING D EDUCTION U/S 80HHC ON ACCOUNT OF INCOME ON DEPB LICENCE THAT THE ASSESSEE HAS SUFFICIENT AND NECESSARY EVIDENCE TO PROVE THAT: (A) HE HAD A OPTION TO CHOOSE EITHER THE DUTY DRAWBACK OR THE DUTY ENTITLEMENT PASS BOOK SCHEME BEING THE DUTY REMISS ION SCHEMA AND (B) THE RATE OF DRAWBACK CREDIT ATTRIBUTABLE TO THE CUS TOMS DUTY WAS HIGHER THAN THE RATE OF CREDIT ALLOWABLE UNDER THE DUTY EN TITLEMENT PASSBOOK SCHEME BEING THE DUTY REMISSION SCHEME. AS PER THE COUNSELS OWN ADMISSION HE HAS NOT BEEN ABLE TO FULFILL THE REQUIRED CONDITIONS. THE ONLY ARGUMENT OF THE COUNS EL IS THAT THESE CONDITIONS ARE TOTALLY ARBITRARY AND AGAINST THE PR INCIPLES OF EQUITY. THESE ARGUMENTS DO NOT HELP THE APPELLANT SINCE THE PARLI AMENT HAS ENACTED THE LAW AND HAS BROUGHT IN THE AMENDED PROVISIONS MAKIN G DISTINCTION BETWEEN THE EXPORTERS HAVING TURNOVER OF LESS THAN RS.10 CRORES AND MORE THAN RS.10 CRORES. THE AO IS THE ONLY EXECUTING AUT HORITY AND HAS TO EXECUTE THE LAW AS FRAMED BY THE PARLIAMENT. SINCE THE APPELLANT HAS FAILED TO FULFILL THE CONDITIONS IMPOSED IN THE TAX ATION LAWS AMENDMENT ACT 2005 HE IS NOT ENTITLED TO DEDUCTION U/S 80HH C ON THE PROFIT EARNED ON DEPB LICENCE. 4 BEFORE US THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT IN VIEW OF THE DECISION OF THE SPECIAL BENCH IN THE CASE OF TOPMAN EXPORTS VS. ITO 125 TTJ (MUM) (SB) 289 THE ISSUE SHOULD BE RESTORED TO THE FILE OF THE LEARNED ASSESSING OFFICER FOR FRESH ADJUDICATION OF THE ISSUE. WE FIND THAT I N THE INSTANT CASE IT IS NOT IN DISPUTE THAT ASSESSEES EXPORT TURNOVER I S MORE THAN RS.10 CRORES. THE SPECIAL BENCH OF THE TRIBUNAL IN THE CA SE OF TOPMAN EXPORTS (SUPRA) HAS ALSO HELD THAT WHERE EXPORT TUR NOVER OF THE ASSESSEE EXCEEDS RS.10 CRORES THE ASSESSEE WILL BE ELIGIBLE FOR 3 DEDUCTION U/S 80HHC IN RESPECT OF DEPB ONLY ON SATI SFYING THE ADDITIONAL CONDITIONS EXPLAINED IN SECTION 80HHC SU B-SECTION (3). THE SAID SECTION READS AS UNDER: (3) FOR THE PURPOSES OF SUB-SECTION (1) (A) WHERE THE EXPORT OUT OF INDIA IS OF GOODS OR MERCHANDISE A [MANUFACTURED OR PROCE SSED BY THE ASSESSEE] THE PROFITS DERIVED FROM SUCH EXPORT SHALL BE THE A MOUNT WHICH BEARS TO THE PROFITS OF THE BUSINESS THE SAME PROPORTION AS THE EXPORT TURNOVER IN RESPECT OF SUCH GOODS BEARS TO THE TOTAL TURNOVER O F THE BUSINESS CARRIED ON BY THE ASSESSEE ; (B) WHERE THE EXPORT OUT OF INDIA IS OF TRADING GOO DS THE PROFITS DERIVED FROM SUCH EXPORT SHALL BE THE EXPORT TURNOVER IN RE SPECT OF SUCH TRADING GOODS AS REDUCED BY THE DIRECT COSTS AND INDIRECT C OSTS ATTRIBUTABLE TO SUCH EXPORT ; (C) WHERE THE EXPORT OUT OF INDIA IS OF GOODS OR ME RCHANDISE 1070B [MANUFACTURED OR PROCESSED BY THE ASSESSEE] AND OF TRADING GOODS THE PROFITS DERIVED FROM SUCH EXPORT SHALL (I) IN RESPECT OF THE GOODS OR MERCHANDISE 1070B [MANUF ACTURED OR PROCESSED BY THE ASSESSEE] BE THE AMOUNT WHICH BEA RS TO THE ADJUSTED PROFITS OF THE BUSINESS THE SAME PROPORTI ON AS THE ADJUSTED EXPORT TURNOVER IN RESPECT OF SUCH GOODS BEARS TO T HE ADJUSTED TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY THE ASSESSEE ; AND (II) IN RESPECT OF TRADING GOODS BE THE EXPORT TUR NOVER IN RESPECT OF SUCH TRADING GOODS AS REDUCED BY THE DIRECT AND IND IRECT COSTS ATTRIBUTABLE TO EXPORT OF SUCH TRADING GOODS : PROV IDED THAT THE PROFITS COMPUTED UNDER CLAUSE (A) OR CLAUSE (B) OR CLAUSE (C) OF THIS SUB-SECTION SHALL BE FURTHER INCREASED BY THE AMOUN T WHICH BEARS TO NINETY PER CENT OF ANY SUM REFERRED TO IN CLAUSE (I IIA) (NOT BEING 4 PROFITS ON SALE OF A LICENCE ACQUIRED FROM ANY OTHE R PERSON) AND CLAUSES (IIIB) AND (IIIC) OF SECTION 28 THE SAME PROPORTION AS THE EXPORT TURNOVER BEARS TO THE TOTAL TURNOVER OF BUSI NESS CARRIED ON BY THE ASSESSEE : PROVIDED FURTHER THAT IN THE CASE OF AN ASSESSEE HA VING EXPORT TURNOVER NOT EXCEEDING RUPEES TEN CRORES DURING THE PREVIOUS YEAR THE PROFITS COMPUTED UNDER CLAUSE (A) OR CLAUSE (B) OR CLAUSE (C) OF THIS SUB-SECTION OR AFTER GIVING EFFECT TO THE FIRS T PROVISO AS THE CASE MAY BE SHALL BE FURTHER INCREASED BY THE AMOUNT WH ICH BEARS TO NINETY PER CENT OF ANY SUM REFERRED TO IN CLAUSE (I IID) OR CLAUSE (IIIE) AS THE CASE MAY BE OF SECTION 28 THE SAME PROPORTION AS THE EXPORT TURNOVER BEARS TO THE TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY THE ASSESSEE : PROVIDED ALSO THAT IN THE CASE OF AN ASSESSEE HAVIN G EXPORT TURNOVER EXCEEDING RUPEES TEN CRORES DURING THE PREVIOUS YEA R THE PROFITS COMPUTED UNDER CLAUSE (A) OR CLAUSE (B) OR CLAUSE ( C) OF THIS SUB- SECTION OR AFTER GIVING EFFECT TO THE FIRST PROVISO AS THE CASE MAY BE SHALL BE FURTHER INCREASED BY THE AMOUNT WHICH BEAR S TO NINETY PER CENT OF ANY SUM REFERRED TO IN CLAUSE (IIID) OF SEC TION 28 THE SAME PROPORTION AS THE EXPORT TURNOVER BEARS TO THE TOTA L TURNOVER OF THE BUSINESS CARRIED ON BY THE ASSESSEE IF THE ASSESSE E HAS NECESSARY AND SUFFICIENT EVIDENCE TO PROVE THAT (A) HE HAD AN OPTION TO CHOOSE EITHER THE DUTY DRAW BACK OR THE DUTY ENTITLEMENT PASS BOOK SCHEME BEING DUTY REMISSION SCHEME; AND (B) THE RATE OF DRAWBACK CREDIT ATTRIBUTABLE TO THE CUSTOMS DUTY WAS HIGHER THAN THE RATE OF CREDIT ALLOWABLE UNDER THE DUTY ENTITLEMENT PASS BOOK SCHEME BEING DUTY REMISSION SCHEME : 5 PROVIDED ALSO THAT IN THE CASE OF AN ASSESSEE HAVIN G EXPORT TURNOVER EXCEEDING RUPEES TEN CRORES DURING THE PREVIOUS YEA R THE PROFITS COMPUTED UNDER CLAUSE (A) OR CLAUSE (B) OR CLAUSE ( C) OF THIS SUB- SECTION OR AFTER GIVING EFFECT TO THE FIRST PROVISO AS THE CASE MAY BE SHALL BE FURTHER INCREASED BY THE AMOUNT WHICH BEAR S TO NINETY PER CENT. OF ANY SUM REFERRED TO IN CLAUSE (IIIE) OF SE CTION 28 THE SAME PROPORTION AS THE EXPORT TURNOVER BEARS TO THE TOTA L TURNOVER OF THE BUSINESS CARRIED ON BY THE ASSESSEE IF THE ASSESSE E HAS NECESSARY AND SUFFICIENT EVIDENCE TO PROVE THAT (A) HE HAD AN OPTION TO CHOOSE EITHER THE DUTY DRAW BACK OR THE DUTY FREE REPLENISHMENT CERTIFICATE BEING DUTY REMISSIO N SCHEME; AND (B) THE RATE OF DRAWBACK CREDIT ATTRIBUTABLE TO THE CUSTOMS DUTY WAS HIGHER THAN THE RATE OF CREDIT ALLOWABLE UNDER THE DUTY FREE REPLENISHMENT CERTIFICATE BEING DUTY REMISSION SCH EME. EXPLANATION : FOR THE PURPOSES OF THIS CLAUSE 'RAT E OF CREDIT ALLOWABLE' MEANS THE RATE OF CREDIT ALLOWABLE UNDER THE DUTY FREE REPLENISHMENT CERTIFICATE BEING DUTY REMISSION SCH EME CALCULATED IN THE MANNER AS MAY BE NOTIFIED BY THE CENTRAL GOV ERNMENT: ] 5 IN THE INSTANT CASE THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) OBSERVED THAT THE ASSESSEE HAS BROUGH T NO MATERIAL ON RECORD TO SHOW THAT THE ABOVE ADDITIONAL CONDITIONS REQUIRED BY THE LAW WERE SATISFIED IN HIS CASE. NO MATERIAL WAS BRO UGHT ON RECORD BEFORE US BY THE ASSESSEE TO SHOW THAT THE ABOVE AD DITIONAL CONDITIONS WERE SATISFIED IN HIS CASE. IN THESE CIR CUMSTANCES WE DO NOT FIND ANY GOOD REASONS TO INTERFERE WITH THIS PA RT OF THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS). 6 6 IN RESPECT OF NETTING OFF OF INTEREST WE FIND T HAT THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) REJECT ED THE PLEA OF THE ASSESSEE BY OBSERVING AS UNDER:- AS REGARDS THE INTEREST INCOME ON FDS. IS CONCERNE D I DO NOT FIND FORCE IN THE ARGUMENTS OF THE COUNSEL THAT INTEREST ON FI XED DEPOSITS HAS TO BE CONSIDERED FOR DEDUCTION U/S 80HHC. THE CASE LAWS R ELIED UPON BY THE APPELLANT DO NOT HELP HIM. IN PRIYANKA GEMS CASE 9 4 TTJ 557 (AHD) WHICH THE COUNSEL RELIED UPON IT WAS HELD THAT INTEREST IS TO BE CONSIDERED FOR DEDUCTION UNDER SECTION 80HHC IN CASE THE INTEREST WAS EARNED ON THE DEPOSIT AS COLLATERAL UNDER COMPULSION. NO SUCH COM PULSION HAS BEEN PROVED BY THE APPELLANT. IN THE CASE OF LALSON ENTE RPRISES VS. DCIT 89 ITD 256 (DEL) (SB) IT WAS HELD THAT ONLY THE NET I NCOME IS TO BE REDUCED FROM THE PROFIT FOR CALCULATING THE DEDUCTION U/S 8 0HHC IF THE INTEREST HAS NEXUS WITH THE INTEREST PAID. THE APPELLANT HAS NOT PROVED SUCH NEXUS. THE CONTENTIONS OF THE APPELLANT ARE REJECTED. THE AO I S RIGHT IN REDUCING THE INTEREST INCOME FOR COMPUTING THE DEDUCTION U/S 80H HC. 7 WE FIND THAT NO MATERIAL WAS BROUGHT BEFORE US T O SHOW THAT THERE WAS ANY NEXUS BETWEEN THE INTEREST RECEI VED AND INTEREST PAID BY IT. IN THE ABOVE CIRCUMSTANCES WE DO NOT F IND ANY ERROR IN THIS PART OF THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ALSO. WE THEREFORE CONFIRM THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) AND DISMISS TH E GROUND OF APPEAL OF THE ASSESSEE. 8 GROUND NO.2 IN THE ASSESSEES APPEAL READS AS UN DER: THE LD. CIT(A) \ERRED ON FACTS AND IN LAW IN CONFI RMING ADDITION OF RS.13 60 720/- ON ACCOUNT OF UNACCOUNTED SALES NOTI CED IN THE COURSE OF SURVEY CARRIED OUT U/S 133A OF THE ACT. 9 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS A VAILABLE ON RECORD. IN THE INSTANT CASE A SURVEY U/S 133A OF THE ACT WA S CONDUCTED ON 11-02-2003 WHEREIN STOCK OF RS.4 83 19 030/- WAS FO UND ON PHYSICAL VERIFICATION. THE SURVEY OFFICIAL PREPARED A TRADIN G ACCOUNT UP TO THE DATE OF THE SURVEY AS PER THE BOOKS OF ACCOUNT OF T HE ASSESSEE BY 7 ADOPTING THE GROSS PROFIT RATE OF 15.69% WHICH WAS THE GROSS PROFIT RATE DISCLOSED BY THE ASSESSEE IN THE IMMEDIATELY P RECEDING YEAR. AS PER SUCH PREPARED TRADING ACCOUNT THE CLOSING STOC K OF THE ASSESSEE CAME TO RS.5 68 91 553/-. ON THE BASIS OF THIS IT W AS INFERRED BY THE SURVEY TEAM THAT THE ASSESSEE HAS MADE SALE OF GOOD S OF RS.86 72 533/- OUTSIDE THE BOOKS OF ACCOUNT. ASSESS EE ALSO ACCEPTED THE ABOVE INFERENCE OF THE SURVEY TEAM AND AGREED T O INCOME OF RS.13 50 720/- BEING GROSS PROFIT AT THE RATE OF 15 .69% ON THE UNRECORDED SALES. HOWEVER THE LEARNED ASSESSING OF FICER OBSERVED THAT IN THE RETURN OF INCOME FILED BY THE ASSESSEE THE ASSESSEE HAS NOT DISCLOSED THE ABOVE INCOME OF RS.13 50 720/-. T HE ASSESSEE EXPLAINED BEFORE THE LEARNED ASSESSING OFFICER THAT THE UNRECORDED SALES ADMITTED DURING THE COURSE OF SURVEY WAS IN F ACT MADE IN THE EXHIBITION WHICH WAS CARRIED OUT IN THE MONTHS OF O CTOBER TO DECEMBER 2002 AND THE SAID SALE AMOUNTING TO RS.91 06 160/- WAS RECORDED IN THE BOOKS OF ACCOUNT AFTER THE SURVEY. HOWEVER THE LEARNED ASSESSING OFFICER DID NOT ACCEPT THE ABOVE CONTENTION OF THE ASSESSEE ON THE GROUND THAT THE SAME WAS AN AFTER-T HOUGHT AND HE THEREFORE ADDED RS.13 50 720/- TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF GROSS PROFIT EARNED ON UNRECORDED SALES. THE ABOVE ACTION OF THE LEARNED ASSESSING OFFICER WAS CONFIRMED BY T HE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS). 10 WE FIND THAT IT IS NOT IN DISPUTE THAT THE ASSE SSEE HAS RECORDED EXTRA SALES OF RS.91 06 160/- IN ITS BOOKS OF ACCOUNT AFTER THE DATE OF SURVEY FOR THE PERIOD PRIOR TO THE DATE OF SURVEY. THUS THE ASSESSEE HAS DISCLOSED EXTRA GROSS PROFIT OF RS .4 33 627/- [RS.91 06 160 RS.86 72 533/-]. IN OTHER WORDS ACC ORDING TO THE ASSESSEE THE GROSS PROFIT EARNED ON THE UNRECORDED SALES MADE WAS RS.4 33 627/-. THE CONTENTION OF THE ASSESSEE WAS T HAT MAKING OF ADDITION OF RS.13 50 720/- AGAIN IN RESPECT OF PROF IT ON UNRECORDED 8 SALES BY THE LEARNED ASSESSING OFFICER TANTAMOUNT T O DOUBLE ADDITION OF THE SAME INCOME. 11 WE FIND THAT IT IS NOT IN DISPUTE THAT THE SALE S IN RESPECT OF GOODS OF RS.86 72 533/- WAS NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNT PRIOR TO THE DATE OF SURVEY AND SALES IN RE SPECT OF THE SAME WAS RECORDED BY THE ASSESSEE ONLY AFTER THE DATE OF SURVEY IN THE BOOKS OF ACCOUNT. IN THE ABOVE CIRCUMSTANCES THE S ALES SO RECORDED CANNOT BE ACCEPTED AS CORRECT AND COMPLETE. WE FIND THAT THE ASSESSEE HAS DISCLOSED GROSS PROFIT OF RS.4 33 627/ - ONLY WHEREAS THE ASSESSEE HAS ADMITTED GROSS PROFIT OF RS.13 50 720/- IN RESPECT OF SUCH SALES IN THE COURSE OF SURVEY. FURTHER NO M ATERIAL WAS BROUGHT ON RECORD BY THE ASSESSEE TO SHOW THAT THE SALE OF RS.91 06 160/- RECORDED BY HIM AT A LATER DATE WAS COMPLETE AND CORRECT SALE OF GOODS OF RS.86 72 533/-. IN THE ABO VE FACTS AND CIRCUMSTANCES IN OUR CONSIDERED OPINION IT SHALL BE FAIR AND REASONABLE TO ESTIMATE THE PROFIT ON SUCH UNRECORDE D SALE AT RS.13 50 720/- WHICH WAS ADMITTED BY THE ASSESSEE A ND WHICH COMPARES WITH THE PROFIT ON REGULARLY RECORDED SALE S. 12 WE AGREE WITH THE SUBMISSION OF THE ASSESSEE TH AT PROFIT TO THE EXTENT OF RS. RS.4 33 627/- WAS ALREADY DECL ARED BY THE ASSESSEE IN ITS RETURN OF INCOME BY ADMITTING UNREC ORDED SALES TILL THE DATE OF SURVEY OF RS.91 06 160/-. THUS THE FUR THER ADDITION ON ACCOUNT OF PROFIT ON UNRECORDED SALES UP TO THE DAT E OF SURVEY SHOULD BE MADE OF RS.9 17 093/- [RS.13 50 720 RS.4 33 62 7/-].THUS THIS GROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 13 GROUND NO.3 IN THE APPEAL READS AS UNDER: THE LD. CIT(A) ERRED ON FACTS AND IN LAW IN CONFIR MING DISALLOWANCE OF RS.55 920/- OUT OF VEHICLE EXPENSES AND RS.75 402/- OUT OF TELEPHONE EXPENSES. 9 14 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS A VAILABLE ON RECORD. THE LEARNED ASSESSING OFFICER DISALLOWED 1/8 TH OF THE VEHICLE EXPENSES AMOUNTING TO RS.55 920/- ON ACCOUNT OF PER SONAL USE. SIMILARLY THE LEARNED ASSESSING OFFICER DISALLOWED 1/10 TH OUT OF TELEPHONE EXPENSES AMOUNTING TO RS.75 402/- BEING P ERSONAL IN NATURE. IN APPEAL THE LEARNED COMMISSIONER OF INCO ME-TAX (APPEALS) CONFIRMED THE ACTION OF THE LEARNED ASSES SING OFFICER OBSERVING THAT THE PERSONAL USE OF VEHICLES AND TEL EPHONES BY THE PARTNERS AND THEIR FAMILY MEMBERS CANNOT BE RULED O UT AND THE LEARNED ASSESSING OFFICER HAS MADE A VERY REASONABL E DISALLOWANCE OUT OF THESE EXPENSES FOR PERSONAL USE BY THE PARTN ERS AND THEIR FAMILY MEMBERS. BEFORE US NO MATERIAL WAS BROUGHT B Y THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE TO SHOW T HAT THE DISALLOWANCE MADE BY THE LEARNED ASSESSING OFFICER WAS ON A HIGHER SIDE OR THAT THE EXPENSES IN QUESTION WERE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF THE BUSINESS OF THE ASSESSEE. HENCE WE FIND NO INFIRMITY IN THE ORDER OF THE LEARNED CO MMISSIONER OF INCOME-TAX (APPEALS) WHICH IS CONFIRMED AND THE GRO UND OF APPEAL OF THE ASSESSEE IS DISMISSED. 15 IN THE RESULT THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT TOD AY ON 22-01-2010 SD/- SD/- (T K SHARMA) JUDICIAL MEMBER (N S SAINI) ACCOUNTANT MEMBER DATE : 22-01-2010 COPY OF THE ORDER FORWARDED TO : 10 1. PRADIP EXPORTS A/601 NARNARAYAN COMPLEX NAVRA NGPURA AHMEDABAD 2. THE ACIT CIRCLE-10 AHMEDABAD 3. CIT CONCERNED 4. CIT(A)-XVI AHMEDABAD 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT AHMEDABA