The ITO, Ward-9(1),, Surat v. Shri Bhikhabhai Rajabhai Dhameliya, Surat

ITA 2586/AHD/2009 | 2006-2007
Pronouncement Date: 08-01-2010 | Result: Dismissed

Appeal Details

RSA Number 258620514 RSA 2009
Assessee PAN AAPPD7018L
Bench Ahmedabad
Appeal Number ITA 2586/AHD/2009
Duration Of Justice 3 month(s) 24 day(s)
Appellant The ITO, Ward-9(1),, Surat
Respondent Shri Bhikhabhai Rajabhai Dhameliya, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 08-01-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 08-01-2010
Assessment Year 2006-2007
Appeal Filed On 14-09-2009
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' (BEFORE S/SHRI N S SAINI AND MAHAVIR SINGH) ITA NO.2586/AHD/2009 (ASSESSMENT YEAR: 2006-07) THE INCOME-TAX OFFICER WARD-9(1) ROOM NO.422 AAYAKAR BHAVAN MAJURAGATE SURAT V/S SHRI BHIKHABHAI RAJABHAI DHAMELIYA PROP. OF AVNI DIAMOND 36 BARODA PRISTAGE VARACHHA ROAD SURAT PAN: AAPPD 7018 L (APPELLANT) (RESPONDENT) APPELLANT BY :- SHRI M C PANDIT SENIOR DR RESPONDENT BY:- NONE O R D E R PER MAHAVIR SINGH (JUDICIAL MEMBER) : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER DATED 17/06/ 2009 PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) -V SURAT [THE CIT(A) FOR SHORT] IN APPEAL NO.CAS-V/307/200 8-09 FOR ASSESSMENT YEAR (AY) 2006-07. 2 NONE APPEARED ON BEHALF OF THE ASSESSEE. WE THEREFORE DECIDED TO DISPOSE OF THE APPEAL AFTER H EARING THE LEARNED DEPARTMENTAL REPRESENTATIVE. 3 THE FIRST ISSUE RELATES TO DELETION OF THE DISAL LOWANCE OF RS.10 22 043/- IN RESPECT OF LABOUR EXPENSES. TH E BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMEN T PROCEEDINGS THE ASSESSING OFFICER (AO) OBSERVED THAT THE ASSESS EE BEING 2 ENGAGED IN THE ACTIVITY OF POLISHING OF DIAMONDS ON JOB-WORK BASIS HAD INCURRED AN EXPENDITURE OF RS 1 02 20 43 0/- TOWARDS OWN LABOUR AND AN AMOUNT OF RS.63 28 952/- TOWARDS OUTSIDE LABOUR I.E. TWO JOB WORKERS VIZ. SHRI MUKESHBHAI AN D SHRI SURESHBHAI. AS REGARDS OWN LABOUR THE AO OBSERVED THAT THE WAGES REGISTER FOR THE MONTH OF FEBRUARY 2006 AND MARCH 2006 WERE SIGNED BY THE LABOURERS BUT DID NOT CONTAIN TH E DATES THEREOF. THE AO FURTHER OBSERVED THAT THE ASSESSEE DID NOT HAVE ANY PRELIMINARY RECORD FOR WORKING OUT THE WAGES PA ID TO THE LABOURERS. IT WAS ALSO OBSERVED BY THE AO THAT THE PER PIECE LABOUR PAID BY THE ASSESSEE WAS RS.19 04 AS COMPARE D TO RS.18.85 AND RS.17.55 PAID BY HIS JOB WORKERS VIZ. SHRI MUKESHBHAI AND SHRI SURESHBHAI RESPECTIVELY. AS RE GARDS JOB- WORK CHARGES PAID TO CONTRACTORS THE AO OBSERVED TH AT THE BILLS WERE PREPARED BY THE ASSESSEE HIMSELF AND ON MONTHL Y BASIS HOWEVER THE AO HAS NOT MADE ANY DISALLOWANCE OUT O F THE LABOUR CHARGES PAID BY THE ASSESSEE TO THE JOB WORK ERS. THUS ON THE BASIS OF COMPARISON OF THE PER PIECE WAGE RATE PAID BY THE ASSESSEE AND HIS JOB WORKERS THE AO FRAMED AN OPIN ION THAT THE WAGES PAID BY THE ASSESSEE TO HIS OWN LABOUR WERE E XCESSIVE AND ACCORDINGLY THE AO MADE AN AD-HOC DISALLOWANCE OF RS.10 22 043/- BEING 10% WAGES OF RS.1 02 20 430/-. 4 THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) A ND SUBMITTED THAT THE BOOK RESULTS FOR THE CURRENT YEA R HAVE IMPROVED SIGNIFICANTLY AS COMPARED TO THE EARLIER Y EAR AS IS EVIDENT FROM THE FOLLOWING ANALYSIS: 3 PARTICULARS AY 2006-07 AY 2005-06 -------------------------- -------------- -------- ------ TOTAL LABOUR RECEIPTS 1 95 85 122 1 81 38 871 GROSS PROFIT (RS.) 7 49 010 5 28 465 GROSS PROFIT (%) 3.82% 2.91% NET PROFIT (RS.) 3 55 533 2 86 745 N P (%) 1.82% 1.58% SECONDLY IT WAS SUBMITTED THAT THE TOTAL LABOUR EX PENSES AS A PERCENTAGE OF JOB WORK INCOME HAS DECREASED TO 87.8 7% IN THE CURRENT YEAR AS AGAINST 92.14% IN THE EARLIER YEAR AS IS EVIDENT FROM THE FOLLOWING ANALYSIS HOWEVER THE AO HAS COM PARED ONLY THE SALARY AND WAGES PAID TO OWN LABOUR WITHOUT TAK ING INTO CONSIDERATION THE AMOUNT PAID TO OUTSIDE PARTIES FO R JOB WORK: PARTICULARS AY 2006-07 AY 2005-06 -------------------------- -------------- -------- ------ TOTAL LABOUR RECEIPTS 1 95 85 122 1 81 38 871 (JOB-WORK INCOME) LABOUR CHARGES PAID TO 63 28 952 1 29 50 256 OUTSIDE PARTIES (JOB WORKERS) SALARY & WAGES 1 08 80 430 37 62 937 (OWN LABOUR) -------------- --------------- TOTAL LABOUR 1 72 09 382 1 67 13 193 LABOUR AS A % OF 87.87% 92.14% JOB WORK INCOME THIRDLY IT WAS SUBMITTED THAT THOUGH THE PER PIECE WAGES PAID BY THE ASSESSEE ARE HIGHER THAN THAT PAID BY HIS CONTR ACTORS THE SAME IF CONSIDERED IN PERCENTAGE TERMS ARE AT PAR O R EVEN LOWER 4 THAN THAT PAID BY THE CONTRACTORS AS IS EVIDENT FR OM THE FOLLOWING ANALYSIS: PARTICULARS ASSESSEE MUKESHBHAI SURESHBHAI TOTAL LABOUR RECEIPTS (JOB WORK INCOME) 1 32 56 171 40 42 963 22 85 988 WAGES & SALARIES 1 02 20 430 32 86 487 17 33 241 LABOUR AS A % OF JOB- WORK INCOME 77.09% 81.29% 75.82% IT WAS ALSO SUBMITTED BEFORE THE CIT(A) THAT THE AS SESSEES FACTORY IS LOCATED AT A REMOTE PLACE AT VILLAGE ARE TH TAL: MANDVI DIST. SURAT AND NOT IN THE CITY OF SURAT AN D HENCE THE LABOUR IS NOT READILY AVAILABLE AT THAT PLACE WHICH ALSO INCREASES THE COST TO SOME EXTENT AND HENCE IS NOT DIRECTLY COMPARABLE WITH THE OTHER 2 CASES WHO ARE HAVING FACTORY IN SU RAT. ACCORDINGLY IN VIEW OF THE FACTS THAT THE BOOK RES ULTS HAVING IMPROVED IN THE CURRENT YEAR AS COMPARED TO THE EAR LIER YEAR THE PERCENTAGE OF LABOUR EXPENSES HAVING DECREASED IN T HE CURRENT YEAR AS COMPARED TO THE EARLIER YEAR THE PERCENTAG E OF WAGES PAID BY THE ASSESSEE BEING AT PAR WITH THAT PAID BY HIS CONTRACTORS AND ON CONSIDERING THE REMOTE LOCATION OF THE FACTORY WHERE LABOUR IS SCARCE AND HENCE COSTLY THE ASSESS EE PLEADED THAT THE AD-HOC DISALLOWANCE AS MADE BY THE AO ON T HE ALLEGATION THAT THE WAGES PAID ARE EXCESSIVE IS ERRONEOUS AND HENCE THE SAME NEEDS TO BE DELETED. BEFORE THE CIT(A) THE ASSESSEE ALSO RELIED ON THE DIRECT DECISION OF THE AHMEDABAD BENCH OF ITAT IN THE CASE OF DHIRU BHAI 5 BECHARBHAI DHAMELIA IN ITA NO.3188/AHD/2007 WHEREI N THE ITAT HAS DELETED THE DISALLOWANCE MADE OUT OF LABOU R EXPENSES BY FOLLOWING ITS OWN DECISION IN THE CASES OF (I) P RAVINBHAI R SHAH (HUF) ITA NO.2336/AHD/2004 (II) BHARATKUMAR R AMNIKLAL MEHTA ITA NO.1296/AHD/2004 AND (III) ANISH B SHAH ( HUF) ITA NO.2223/AHD/2004. 5 AFTER CONSIDERING THE ABOVE SUBMISSIONS MADE BY THE ASSESSEE THE CIT(A) DELETED THE AD-HOC DISALLOWANC E BY OBSERVING AS UNDER:- I HAVE CONSIDERED THE FACTS OF THE CASE THE VIEW TAKEN BY THE ITO AND THE SUBMISSIONS OF THE APPELLANT. IT IS OBSERVE D THAT THE ITO HAS NOT REJECTED THE BOOKS OF ACCOUNTS BUT HAS MADE THE IMPUGNED DISALLOWANCE MAINLY ON THE BASIS OF THE ALLEGATION THAT THE WAGE RATE PER PIECE PAID BY THE APPELLANT WAS HIGHER THAN THA T PAID BY HIS CONTRACTORS AND THAT THE WAGES REGISTER WAS SIGNED BUT DID NOT CONTAIN THE DATES THEREOF AND FURTHER THE APPELLANT DID NO T HAVE ANY PRELIMINARY EVIDENCE FOR WORKING OUT THE WAGES PAID . AS REGARDS THE ALLEGATION THAT THE WAGE RATE PER PI ECE IS HIGH AS COMPARED TO THE WAGES PAID BY THE JOB WORKER I AM OF THE OPINION THAT SINCE THE APPELLANTS FACTORY IS LOCATED AT A REMOTE PLACE AT VILLAGE ARETH TAL. MANDVI DIST. SURAT AND NOT IN THE CITY OF SURAT WHERE THE FACTORY OF THE OTHER TWO JOB WORKERS IS L OCATED THE WAGE RATE IS NOT DIRECTLY COMPARABLE. FURTHER IT IS SEE N THAT IF THE SALARY AND WAGES ARE VIEWED AS A PERCENTAGE OF LABOUR INCO ME THE APPELLANTS EXPENSE IS 77.09% AS AGAINST AN EXPENDI TURE OF 81.29% INCURRED BY ONE OF THE JOB WORKER VIZ. SHRI MUKESHB HAI. FURTHER IF COMPARISON OF LABOUR EXPENSES HAS TO BE MADE THEN T HE SAME TO BE MADE FOR TOTAL LABOUR EXPENSES I.E. OWN LABOUR AND JOB WORK EXPENSES AND THAT TOO AS A PERCENTAGE OF INCOME AND ON DOING SO IT IS OBSERVED THAT THE TOTAL LABOUR EXPENSE AS A PERCENTAGE OF TU RNOVER IN THE CASE OF THE APPELLANT HAS REDUCED TO 87.87% IN THE CURRE NT YEAR AS AGAINST 92.14% IN THE EARLIER YEAR AND HENCE THE TOTAL LAB OUR EXPENSES CANNOT BE SAID TO HAVE BEEN INFLATED. MOREOVER ANO THER IMPORTANT ASPECT IS THAT THE APPELLANT HAS ACHIEVED HIGHER GP RATIO OF 3.82% IN THE CURRENT YEAR AS AGAINST 2.91% IN THE EARLIER YE AR AND SIMILARLY THE NP HAS ALSO INCREASED TO 1.82% IN THE CURRENT Y EAR AS COMPARED TO 1.58% IN THE EARLIER YEAR WHICH CLEARLY SHOWS T HAT THE BOOK RESULTS 6 HAVE IN FACT IMPROVED IN THE CURRENT YEAR AS COMPAR ED TO THE EARLIER YEAR AND THEREFORE I HOLD THAT IN VIEW OF THESE FA CTS OF THE CASE NO AD-HOC DISALLOWANCE IS WARRANTED FOR OUT OF SALARY AND WAGES ON THE GROUND THAT IT IS EXCESSIVE. FURTHER IN THE CASE OF DHIRUBHAI BECHARBHAI DHEMEL IA IN ITA NO.3188/AHD/2007 THE JURISDICTIONAL AHMEDABAD BENC H OF ITAT HAD DELETED THE DISALLOWANCE OF LABOUR EXPENSES AS MADE BY THE AO BY FOLLOWING ITS OWN DECISION IN THE CASE OF BHARATKUM AR RAMNIKLAL MEHTA ITA NO.1296/AHD/2003 AND OTHERS WHEREIN IT H AS HELD AS UNDER : . FOR THE PURPOSE OF CLARIFYING THE DOUBT WHETHER THE ASSESSEE HAS ARBITRARILY CLAIMED LABOUR EXPENSES THE BEST METHO D IS TO BE CONSIDERED IS HIS GP RATE. THE EXPENSES ON LABOUR PAYMENT IS DIRECTLY RELATED TO TRADING ACCOUNT AND IF THE ASSESSEE HAS CLAIMED ANY BOGUS LABOUR EXPENS ES THE GP RATE IS BOUND TO BE ABNORMAL BUT IN THE CASE UNDER CONSIDE RATION WE FIND THAT THE ASSESSEE HAS SHOWN 3.62% GP IN COMPARISON TO 3.50% WHICH HAS BEEN ACCEPTED BY THE DEPARTMENT IN THE EARLIER YEAR. AFT ER CONSIDERING THE OVERALL POSITION OF THE COMPARATIVE GROSS PROFITS WE ARE OF THE VIEW THAT NO ADDITION IS WARRANTED. . CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE TRIBUNALS ORDERS IN FAVOUR OF THE ASSESSEE WE DELETE THE DIS ALLOWANCE OF RS.10 81 172/ CONFIRMED BY THE CIT(A) . IN THE PRESENT CASE AS ALREADY DISCUSSED HEREIN BE FORE THE GP AS ALSO THE NP OF THE APPELLANT HAVE INCREASED TO 3.82% AND 1.82% RESPECTIVELY IN THE CURRENT YEAR AS COMPARED TO 2. 91% AND 1.58% RESPECTIVELY IN THE EARLIER YEAR. FURTHER THE LABO UR CHARGES AS A PERCENTAGE OF TURNOVER HAVE ALSO DECREASED TO 87.87 % IN THE CURRENT YEAR AS COMPARED TO 92.14% IN THE EARLIER AND MOREO VER THE WAGES IN PERCENTAGE TERMS ARE AT PAR WITH THAT PAID BY TH E JOB WORKERS. THEREFORE IN VIEW OF THESE FACTS AND BY MOST RESPE CTFULLY FOLLOWING THE DECISIONS OF THE JURISDICTIONAL ITAT IN THE CASES O F (I) PRAVINBHAI R SHAH (HUF) ITA NO.2336/AHD/2004 (II) BHARATKUMAR R AMNIKLAL MEHTA ITA NO.1296/AHD/2004 (III) ANISH B SHAH (HUF ) ITA NO.2223/AHD/2004 AND (IV) DHIRUBHAI BECHARBHAI DHEM ELIA IN ITA NO.3188/AHD/2007 I HEREBY DELETE THE AD-HOC DISALL OWANCE OF RS.10 22 043/- AS MADE BY THE ITO OUT OF LABOUR EXP ENSES. THUS THIS GROUND OF APPEAL OF THE APPELLANT STANDS ALLOWED. 7 6 WE HAVE HEARD THE LEARNED DR AND PERUSED THE MATERIAL ON RECORD. WE HAVE ALSO GONE THROUGH THE O RDERS OF THE AUTHORITIES BELOW. THE ASSESSEE IS AN INDIVIDUAL EN GAGED IN THE BUSINESS OF DIAMOND CUTTING AND POLISHING ON JOB WO RK BASIS IN THE NAME OF HIS PROPRIETARY CONCERN VIZ. AVANI DIAM OND. THE BOOKS OF ACCOUNTS OF THE ASSESSEE ARE AUDITED U/S 4 4AB AND THE AUDIT REPORT WAS DULY SUBMITTED WITH THE RETURN OF INCOME FILED FOR THE YEAR UNDER CONSIDERATION. WE NOTED THAT THE AMOUNT OF GROSS PROFIT AS ALSO THE GP RATE HAS INCREASED SUBS TANTIALLY IN THE YEAR UNDER CONSIDERATION TO 3.82% FROM 2.91% IN THE EARLIER YEAR. EVEN THE AMOUNT OF NET PROFIT AS ALSO THE NP RATIO HAS INCREASED IN THE YEAR UNDER CONSIDERATION TO 1.82% FROM 1.58% IN THE EARLIER YEAR. WE FIND THAT THE CIT(A) HAS DE ALT WITH THE ISSUE IN GREAT DETAIL AND AFTER CONSIDERING THE VAR IOUS FACTORS AND CIRCUMSTANCES OF THE CASE AS ALSO THE DECISION OF T HE ITAT IN THE CASE OF DHIRUBHAI BECHARBHAI DHAMELIA (SUPRA) HAS DELETED THE ADDITION. NO COGENT MATERIAL OR EVIDENCE WAS BROUGH T ON RECORD BY THE REVENUE ON THE BASIS OF WHICH A DIFFERENT VI EW THAN WHAT IS TAKEN BY THE CIT(A) CAN BE TAKEN. WE THEREFORE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER OF THE CIT (A) AND WE ACCORDINGLY UPHOLD THE SAME IN THIS REGARD. THUS T HIS GROUND RAISED BY THE REVENUE STANDS DISMISSED. 7 THE SECOND GROUND RELATES TO DELETION OF THE ADD ITION OF RS.8 13 369/- MADE BY THE AO ON ACCOUNT OF DIESE L EXPENSES. THE BRIEF FACTS OF THE CASE ARE THAT ACCORDING TO T HE AO THE ASSESSEE HAD INCURRED HUGE EXPENSES ON POWER AND FU EL AND OUT OF THE TOTAL EXPENSES OF RS.16 26 729/- THE EXPENS ES ON AMOUNT OF DIESEL IS RS.11 54 643/-. THE AO OBSERVED THAT N ONE OF THE BILLS OF DIESEL PURCHASE BEAR THE NAME OF THE ASSES SEE AND THE 8 SAID BILLS ARE OBTAINED FROM DIFFERENT PUMPS AT DIF FERENT VILLAGES. THE AO CONCLUDED THAT THE POWER AND FUEL COST OF TH E ASSESSEE WERE HIGH AND EXCESSIVE. THE AO ACCORDINGLY MADE AD -HOC DISALLOWANCE OF RS.8 13 369/- BEING 50% OF TOTAL PO WER AND FUEL EXPENSES AMOUNTING RS.16 26 729/-. BEING AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). TH E CIT(A) HAS DEALT WITH THE ISSUE AND DELETED THE AD-HOC DISALLO WANCE BY OBSERVING AS UNDER:- DURING THE COURSE OF APPELLATE PROCEEDINGS THE AP PELLANT SUBMITTED THAT HIS FACTORY IS LOCATED AT A REMOTE PLACE AT VI LLAGE ARETH TAL. MANDVI DIST. SURAT AND NOT IN THE CITY OF SURAT AN D HENCE THE POWER SUPPLY BEING NOT CONSISTENTLY AVAILABLE AT THE REMO TE PLACE THE APPELLANT HAD TO RUN ITS FACTORY ON GENERATOR BY CO NSUMING DIESEL WHICH INCREASES THE COST OF POWER AND FUEL AS COMP ARED TO THE OTHER 2 CASES WHO ARE HAVING THEIR FACTORY IN SURAT AND HAV E THE FACILITY OF CONSISTENT ELECTRIC POWER SUPPLY WHICH COSTS LOW A S COMPARED TO DIESEL. FURTHER AS REGARDS THE LEARNED ITOS OBSER VATION THAT THE DIESEL BILLS ARE OBTAINED FROM DIFFERENT PUMPS OF D IFFERENT VILLAGES AND THAT THEY DO NOT BEAR ANY NAME IT WAS SUBMITTED TH AT AS MATTER OF ACCEPTED TRADE PRACTICE THE PERSON FILLING THE PET ROL / DIESEL AT ANY PUMP WHO ISSUES THE BILLS ONLY FILLS UP THE DATE NO. OF LITRES AND THE AMOUNT BUT NEVER THE NAME OF THE BUYER AND HENCE ON THIS GROUND THE BILLS CANNOT BE SAID TO BE NON-GENUINE. FURTHER IT WAS EXPLAINED THAT SINCE THE APPELLANTS FACTORY IS AT VILLAGE AR ETH TAL MANDVI THE PURCHASE BILLS ARE OF PUMPS OF NEARBY VILLAGES AND NOT OF THE CITY OF SURAT AND HENCE THE SAID BILLS ARE MORE JUSTIFIABL E THEN PURCHASE BILLS OF SURAT. LASTLY IT WAS SUBMITTED THAT THE COST OF POWER AND FUEL IN PERCENTAGE TERMS HAD IN FACT DECREASED IN THE CURRE NT YEAR AS COMPARED TO THE EARLIER YEAR AS IS EVIDENT FROM TH E FOLLOWING ANALYSIS. PARTICULARS AY 2006-07 AY 2005-06 1 95 85 122 63 28 952 1 81 38 871 1 29 50 256 TOTAL LABOUR RECEIPTS LESS: GIVEN DIRECTLY TO OUTSIDE PARTIES OWN WORK DONE 1 32 56 170 51 88 615 9 ELECTRICITY EXPENSES DIESEL EXPENSES TOTAL POWER & FUEL EXPENSES POWER & FUEL EXP. AS A % OF OWN WORK 4 72 086 11 54 643 ------------ 16 26 730 12.27% 6 32 001 2 65 212 ----------- 8 97 213 17.29% I HAVE CONSIDERED THE FACTS OF THE CASE THE VIEW T AKEN BY THE ITO AND THE SUBMISSIONS OF THE APPELLANT. FIRST OF ALL IT I S SEEN THAT THE POWER AND FUEL EXPENSES AS INCURRED BY THE APPELLANT IN T HE CURRENT YEAR HAS REDUCED CONSIDERABLY TO 12.27% FROM 17.29% IN THE E ARLIER YEAR. FURTHER IT IS SEEN THAT THE ITO HAS NOT BEEN ABLE TO PROVE THAT THE POWER AND FUEL EXPENSES IS BOGUS BEING NOT SUPPORTE D BY ANY AUTHENTIC OR GENUINE BILL BUT HE HAS ONLY POINTED O UT THAT THE SAID BILL DOES NOT BEAR THE NAME OF THE APPELLANT IN THIS RE GARD I AGREE WITH THE APPELLANT THAT THE PETROL / DIESEL BILLS GENERA LLY DO NOT CONTAIN THE NAME OF THE BUYER AND IF THE ITO HAD ANY DOUBT AS R EGARDS THE GENUINENESS OF THE SAID EXPENSES HE SHOULD HAVE MA DE SOME INQUIRIES FOR THE SAME. FURTHER AS REGARDS COMPARISON OF POWER AND FUEL CO ST OF THE APPELLANT WITH THE JOB WORKERS I AM OF THE OPINION THAT ONLY LIKES CAN BE COMPARED WITH LIKES AND IN THE PRESENT CASE THE APPELLANT IS HAVING HIS FACTORY IN A REMOTE VILLAGE AT ARETH WHE RE THE POWER SUPPLY IS NOT CONSTANT WHEREAS THE JOB WORKERS ARE HAVING THEIR FACTORY IN SURAT CITY AND ARE CONSUMING CONSISTENT AND CHEAP ELECTRIC POWER. THUS CONSIDERING THESE FACTS THE POWER AND FUEL COST OF THE APPELLANT IS BOUND TO BE HIGHER AS COMPARED TO THAT OF THE CONTRACTORS AND THEREFORE THE POWER AND FUEL COST OF THE APPEL LANT COULD NOT BE COMPARED WITH THAT OF THE CONTRACTORS. FURTHER AS PER THE DECISION OF THE JURISDICTIONAL ITAT IN THE CASE OF BHARATKUMAR RAMNIKLAL MEHTA (SUPRA) THE GP RATE OF THE ASSESSEE HAS TO BE COMPARED IN ORDER TO JUDGE WHETHER AN AS SESSEE HAS CLAIMED ANY ARBITRARY EXPENSE OR NOT SINCE IN SUC H CIRCUMSTANCES THE GP WOULD BE LOW. IN THE PRESENT CASE NOT ONLY THE GP AND NP OF THE APPELLANT HAVE INCREASED TO 3.82% AND 1.82% RES PECTIVELY IN THE EARLIER YEAR BUT MOST IMPORTANTLY EVEN THE POWER AND FUEL COST IN PERCENTAGE TERMS HAS DECREASED TO 12.27% IN THE CUR RENT YEAR AS COMPARED TO 17.29% IN THE EARLIER YEAR. THUS ON CO NSIDERING THESE FACTS AND MOST RESPECTFULLY FOLLOWING THE DECISION OF THE JURISDICTIONAL 10 ITAT IN THE CASE OF BHARATKUMAR RAMNIKLAL MEHTA (SU PRA) I HEREBY DELETE THE AD-HOC DISALLOWANCE OF 50% AMOUNTING TO RS.8 13 269/- AS MADE BY THE ITO OUT OF DIESEL EXPENSES. THUS THIS GROUND OF APPEAL STANDS ALLOWED. 8 WE HAVE HEARD THE LEARNED DR AND PERUSED THE MATERIAL ON RECORD. WE HAVE ALSO GONE THROUGH THE O RDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE CIT(A) HAS RIGH TLY OBSERVED THAT THE ITO HAS NOT BEEN ABLE TO PROVE THAT THE PO WER AND FUEL EXPENSES IS BOGUS BEING NOT SUPPORTED BY ANY AUTHEN TIC OR GENUINE BILL BUT HE HAS ONLY POINTED OUT THAT THE S AID BILL DOES NOT BEAR THE NAME OF THE ASSESSEE. THE CIT(A) HAS A LSO CORRECTLY OBSERVED THAT THE PETROL / DIESEL BILLS GENERALLY D O NOT CONTAIN THE NAME OF THE BUYER AND IF THE ITO HAD ANY DOUBT AS R EGARDS THE GENUINENESS OF THE SAID EXPENSES HE SHOULD HAVE MA DE SOME INQUIRIES FOR THE SAME. WE FIND THAT THE CIT(A) HAS DEALT WITH THE ISSUE IN GREAT DETAIL AND AFTER FOLLOWING THE V ARIOUS FACTORS AND CIRCUMSTANCES OF THE CASE AS ALSO THE DECISION OF THE ITAT IN THE CASE OF BHARATKUMAR RAMNIKLAL MEHTA (SUPRA) HA S DELETED THE ADDITION. NO COGENT MATERIAL OR EVIDENCE WAS BR OUGHT ON RECORD BY THE REVENUE ON THE BASIS OF WHICH A DIFFE RENT VIEW THAN WHAT IS TAKEN BY THE CIT(A) CAN BE TAKEN. WE THEREFORE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER O F THE CIT(A) AND WE ACCORDINGLY UPHOLD THE SAME IN THIS REGARD. THUS THIS GROUND RAISED BY THE REVENUE STANDS DISMISSED. 11 9 IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08-01-2010 SD/- SD/- (N S SAINI) ACCOUNTANT MEMBER (MAHAVIR SINGH) JUDICIAL MEMBER DATE : 08-01-2010 COPY OF THE ORDER FORWARDED TO : 1. SHRI BHIKHABHAI RAJABHAI DHAMELIYA PROP. OF AVN I DIAMOND 36 BARODA PRISTAGE VARACHHA ROAD SURAT 2. THE INCOME-TAX OFFICER WARD-9(1) ROOM NO.422 AAYAKAR BHAVAN MAJURAGATE SURAT 3. THE CIT CONCERNED 4. THE CIT(A)-V SURAT 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER DY.R/AR ITAT AHMEDABAD