Shri Natwarlal Shrichand Sanghvi, Ahmedabad v. The Income tax Officer,Ward-11(3),, Ahmedabad

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE SHRI N.S.SAINI ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH JUDICIAL MEMBER ITA NO.2860/AHD/2010 ASSESSMENT YEAR:2007-08 DATE OF HEARING:3.2.11 DRAFTED:4.2.11 NATWARLAL SHIRCHAND SANGHVI 321 ANAND CLOTH MARKET NR. SARANGPUR BRIDGE AHMEDABAD-38001 PAN NO.ACIPS5717L V/S . INCOME TAX OFFICER WARD-11(3) AHMEDABAD (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI A.C. SHAH AR RESPONDENT BY:- SHRI D.C.CHAUDHRY DR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-XVI AHMEDABAD IN APPEAL NO. C IT(A)-XVI/ W 11(3) / 288/09- 10 DATED 12-08-2010. ASSESSMENT WAS FRAMED BY ITO-W ARD 11(3) AHMEDABAD U/S143(3) OF THE INCOME TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 31-12-2009 FOR ASSESSMENT YEAR 2006-07. 2. THE FIRST ISSUE IN THIS APPEAL OF ASSESSEE IS AG AINST THE ORDER OF CIT(A) IN CONFIRMING THE ADDITION MADE BY ASSESSING OFFICER O N ACCOUNT OF UNDER VALUATION OF STOCK. FOR THIS ASSESSEE HAS RAISED THE FOLLOWING GROUND NO.1 :- 1. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING ADDI TION OF RS.28 23 250 ON ACCOUNT OF UNDER VALUATION OF STOCK IN AS MUCH AS THE ASSESSEE FOLLOWS THE ITA NO.2860/AHD/2010 A.Y 2007- 08 NATWARLAL S SANGHVI V. ITO WD-11(3) ABD PAGE 2 METHOD OF VALUATION OF STOCK ON AVERAGE RATE BASIS CONSISTENTLY AND THAT THERE IS NO UNDERVALUATION OF STOCK. 1.1 THE APPELLANT SAYS AND SUBMITS THAT THE LEARNED AO HAS WORKED OUT THE AVERAGE RATE ON THE BASIS OF THE PURCHASES MADE IN LAST THREE TO FOUR DAYS AND THAT HE HAS IGNORED THE BASIS OF AVERAGE RATE W ORKED OUT ON THE BASIS OF THE PURCHASES MADE THROUGHOUT THE YEAR. 3. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE T HAT ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING OF MS IRON & STEEL. THE ASSESSE E HAS FIELD HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 ON 23-07-2008 DECLA RING TOTAL INCOME AT RS.8 76 140/- AND DURING THE COURSE OF ASSESSMENT P ROCEEDINGS ASSESSEE HAS FURNISHED REQUISITES DETAILS FROM TIME TO TIME ALON G WITH THE BOOKS OF ACCOUNT. THE ASSESSING OFFICER NOTED THAT BOOKS OF ACCOUNT PRODU CED WERE TEST CHECKED DETAILS CALLED FOR WERE VERIFIED AND KEPT ON RECORD. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS REQUIRED THE ASSESSEE TO FILE THE DETAI LS OF CLOSING STOCK AND FROM VERIFICATION OF THE CLOSING STOCK HE NOTICED THAT ASSESSEE HAD SHOWN CLOSING STOCK OF 1.15 LAKH KG VALUE @ 24 PER KG AMOUNTING TO RS.27.6 0 LAKHS. THE ASSESSEE WAS REQUIRED TO FURNISH THE DETAILS OF CLOSING STOCK IN CLUDING METHOD OF VALUATION AND BASIS OF VALUATION. ACCORDING TO ASSESSING OFFICER THE ASSESSEE COULD NOT FILE ANY EXPLANATION OR ANY SUPPORTING DOCUMENTARY EVIDENCE TO SUPPORT THE VALUATION OF CLOSING STOCK. ACCORDING TO ASSESSING OFFICER THE A SSESSEE COULD NOT REACH A CORRECT VALUATION AND ASCERTAINED THE SAME. THE AO NOTICED THAT ASSESSEE ON THE LAST TWO DAYS OF THE YEAR END AS ON 30-3-2007 AND 31-03-2007 HAD MADE PURCHASES RANGING 48.30 LAKH TO 49.00 PER KG AND GAVE FOLLOWING DETAI LS:- SR. NO NAME OF THE TRADER BILL NO. DATE RATE PER KG.(RS) AMOUNT (RS) 1 DHANLAXMI TRADERS 189 30.03.2007 48.50 6 71 861 2 DHANLAXMI STEEL CORPORATION 260 30.03.2007 48.40 8 31 551 3 HINDUSTAN TRADERS 132 31.03.2007 49.00 4 93 548 4 SAYAJI STEEL 242 31.03.2007 48.50 7 24 571 5 ROSHAN STEEL CORPORATION 263 31.03.2007 48.30 7 63 526 ITA NO.2860/AHD/2010 A.Y 2007- 08 NATWARLAL S SANGHVI V. ITO WD-11(3) ABD PAGE 3 ACCORDINGLY ASSESSING OFFICER TAKING AVERAGE RATE OF 48.55 PER KG VALUED CLOSING STOCK AT RS.55 83 250/- BUT HE IS NOT TOUCHED OR DO UBTED THE QUANTITY OF STOCK AT 1.15 LAKH KG. ACCORDINGLY HE MADE ADDITION OF UNDER VAL UATION OF CLOSING STOCK AT RS.28 23 250/- BEING THE DIFFERENCE AGGRIEVED ASSE SSEE PREFERRED APPEAL BEFORE CIT(A). THE CIT(A) CONFIRMED THE ACTION OF ASSESSIN G OFFICER BY GIVING FOLLOWING FINDINGS IN PARA-2.3 OF HIS APPELLATE ORDER:- 2.3 I HAVE CONSIDERED THE SUBMISSION MADE BY THE A PPELLANT AND OBSERVATION OF THE AO. IT IS TRUE THAT THE AO HAS VALUED THE CL OSING STOCK ON THE BASIS OF INVOICES OF LAST TWO DAYS OF MARCH 2007. THE AO HAS TAKEN THE AVERAGE OF THESE FIVE INVOICES. THE APPELLANT HAS STATED THAT THESE INVOICES PERTAIN TO ONLY SHEETS AND THE AO HAS NOT TAKEN INTO ACCOUNT THAT THERE ARE SEVERAL OTHER ITEMS LIKE PLATES ANGLES CHANNELS ETC. THE APPELLANT HAS HOWEVER NOT GIVEN DETAILED LIST OF INVENTORY MATCHING THE SAME WITH THE INVOICES THROUGH WHICH THEY WERE PURCHASED. AS CAN BE SEEN FROM THE ABOVE THE APPELLANT ALSO HAS VALUED THE ENTIRE INVENTORY ON THE BASIS O F AVERAGE OF TOTAL PURCHASES DURING THE YEAR. THE APPELLANT HAS ALSO NOT TRIED T O VALUE THE DIFFERENT ITEMS LIKE SHEETS PLATES ANGLES BEINGS ET. SEPARATELY BY TAKING THEIR AVERAGE SEPARATELY. THE APPELLANT ITSELF IS FOLLOWING AN AV ERAGE METHOD OF COSTING AND THE APPELLANT HAS NOT GIVEN SEPARATE LIST OF INVENT ORY. IT IS SEEN THAT THE TOTAL CLOSING STOCK IN TERMS OF QUANTITY IN IS ONLY 1 15 000 KGS WHEREAS THE TOTAL QUANTITY INCLUDING OPENING STOCK AND PURCHASES IS 3 4 61 563 KGS. THIS SHOWS THAT THE INVENTORY IS ONLY OF LAST 12 DAYS I.E. LES S THAN EVEN HALF THE MONTH. THEREFORE IT WOULD NOT BE APPROPRIATE TO VALUE THE CLOSING STOCK ON THE AVERAGE OF THE ENTIRE YEAR ESPECIALLY WHEN THE ASSE SSEE IS NO GIVING INVENTORY OF EACH ITEM SEPARATELY AND HE IS NOT IDENTIFYING A S TO WHICH ITEMS IN THE CLOSING STOCK PERTAIN TO WHICH INVOICE. THE ASSESSE E SHOULD PROVIDE CLOSING STOCK LIST OF EACH AND EVERY ITEM SEPARATELY PHYSIC ALLY TAKEN AT THE END OF THE YEAR. IN THE ABSENCE OF THE SAME THE ADDITION MADE BY THE AO IS CONFIRMED. THIS GROUND OF APPEAL IS DISMISSED. AGGRIEVED NOW ASSESSEE CAME IN SECOND APPEAL BEFOR E US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCE OF THE CASE. BEFORE US LD. COUNSEL FOR THE ASSESSEE SHRI A.C. SHAH FILED PAPER BOOK CONSISTING OF PAGES 1-23 WHICH CO NTAINS GROSS PROFIT STATEMENT FOR THE YEAR ALONG WITH AUDITED ACCOUNTS. LD. COUNSEL F OR THE ASSESSEE HAS DRAWN OUR ATTENTION TO THE ORDER OF CIT(A) AT PAGE-3 WHERE THE ASSESSEE HAS GIVEN WORKING OF VALUATION ON AVERAGE RATE BASIS AND THE SAME IS REP RODUCED AS UNDER:- KG. AMT. RS. ITA NO.2860/AHD/2010 A.Y 2007- 08 NATWARLAL S SANGHVI V. ITO WD-11(3) ABD PAGE 4 OPENING STOCK 1845000 44 19 73 750 PURCHASE 1616563 5 34 53 081 3461563 9 54 26 831 LESS: SALES 3343590 SHORTAGE 2973 115000 3461563 AVERAGE RATE = RS.95426831 / 3461563 = RS.27.56/- PER KG. CLOSING STOCK = 115000 X 27.56 = RS.31 69 400 THE LD. COUNSEL FOR THE ASSESSEE HAS NOT DISPUTED T HE AVERAGE RATE TAKEN BY THE ASSESSING OFFICER IN RESPECT OF VALUATION OF CLOSIN G STOCK BUT CONTESTED THAT AVERAGE OF LAST TWO DAYS PURCHASES OF YEAR ENDING CANNOT B E TAKEN AS THE AVERAGE FOR VALUATION OF CLOSING STOCK RATHER THE AVERAGE OF FU LL YEAR SHOULD BE CONSIDERED FOR TAKING AVERAGE RATE BASIS FOR VALUATION OF CLOSING STOCK. LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND SUPPORTED THE ORDE R OF ASSESSING OFFICER AND STATED THAT AVERAGE OF LAST TWO DAYS HAS BEEN TAKEN BY ASSESSING OFFICER IS CORRECT METHOD FOR VALUING CLOSING STOCK. WE FIND THAT THAT THE ASSESSING OFFICER HAS ADOPTED THE AVERAGE RATE ON THE BASIS OF ONLY FIVE INVOICES AS GIVEN IN THE TABLE PREPARED BY HIM ON PAGE-2 OF HIS ASSESSMENT ORDER. THE ASSESSEE FOLLOWS THE METHOD OF VALUATION OF STOCK ON AVERAGE RATE FOR THE WHOLE Y EAR CONSISTENTLY FROM SEVERAL YEARS I.E. VALUATION OF CLOSING STOCK ON AVERAGE BASIS. T HE ASSESSEE DEALS IN VARIETY OF ITEMS HAVING DIFFERENT SIZES GAUGE OF ITEMS LIKE S HEETS PLATES ANGLES BEAM CHANNELS TMT AND OTHERS. THE ASSESSEE PURCHASED TH E CHANNELS ANGLES AND TMT FROM STEEL AUTHORITY OF INDIA IN FEB07 TOTALING TO 39.098 METRIC TON AT AN AVERAGE RATE OF RS.20.43 PER KG. THE ASSESSEE SATED THAT HE ALSO PURCHASED ANGLES AND CHANNELS FROM OTHER PARTIES @ RS.24.25 TO RS.27.24. THE ASSESSEE FURTHER STATED THAT THE AO HAS FOLLOWED THE PRINCIPLE OF FIFO IN R ESPECT OF ONLY ONE ITEM I.E. SHEETS AND THERE ARE SEVERAL OTHER ITEMS IN RESPECT OF WHI CH THE AO HAS NOT TAKEN THE VALUE. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE VIEW THAT THE VALUATION OF THE CLOSING STOCK SHOULD HAVE BEEN DON E BY TAKING THE AVERAGE OF THE ITA NO.2860/AHD/2010 A.Y 2007- 08 NATWARLAL S SANGHVI V. ITO WD-11(3) ABD PAGE 5 ENTIRE YEAR AND THE ASSESSEE HAS RIGHTLY COMPUTED T HE DIFFERENTIAL IN THE STOCK AT RS.3 46 350/- I.E. (RS.36 69 400 RS.28 23 250). A CCORDINGLY WE DIRECT THE ASSESSING OFFICER TO MAKE ADDITION OF RS.3 46 350/- TO THE ASSESSEES TOTAL INCOME ON THIS ACCOUNT. ACCORDINGLY THIS ISSUE OF ASSESSE ES APPEAL IS PARTLY ALLOWED. 5. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE ADDITION MADE BY ASSESSING OFFICER O N ACCOUNT OF RS.17 10 033/- BY MAKING DISALLOWANCE ON AD HOC BASIS OF NON VERIFIAB LE EXPENSES AT 30%. FOR THIS ASSESSEE HAS RAISED THE FOLLOWING GROUND NO.2 :- 2. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING ADDI TION OF RS.17 10 033 OUT OF TOTAL ADDITION OF RS.18.25 149 BEING 30% OF TOTAL E XPENSES OF RS.60 83 831 ON AD-HOC BASIS ON THE GROUND THAT THE SAME IS NOT VER IFIABLE IN AS MUCH AS THE ENTIRE EXPENSES ARE VERIFIABLE AND THAT THE AD-HOC DISALLOWANCE SHOULD NOT BE MADE. 2.1 THE APPELLANT FURTHER SAYS AND SUBMITS THAT THE APPELLANT PRODUCED BOOKS OF ACCOUNTS BILL VOUCHERS DETAILS REGARDING THE SALARY & COMMISSION ETC. AT THE TIME OF HEARING. HOWEVER THE LEARNED AO FAILED TO TAKE INTO ACCOUNT THE SAME. 6. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE T HAT ASSESSING OFFICER DURING THE COURSE OF VERIFICATION OF PROFIT AND LOSS ACCOU NT NOTICED THAT THE ASSESSEE HAS CLAIMED EXPENSES UNDER VARIOUS HEADS AMOUNTING TO R S.60 83 831/-. THE ASSESSEE WAS REQUESTED TO FURNISH THE DETAILS I.E. BILLS AND VOUCHERS REGARDING THESE EXPENSES BUT AS THE ASSESSEE COULD NOT FURNISH ANY BILL AND VOUCHER RELEVANT TO LABOUR EXPENSES AND TRUCK & LORRY EXPENSES ASSESSI NG OFFICER AFTER COMPARING THE TOTAL TURNOVER WITH THE IMMEDIATE PROCEEDING YEAR V IS--VIS EXPENSES AND MADE DISALLOWANCE OF RS.18 25 149/- BY COMPARING SAME AS UNDER:- F.Y. 2006-07 F.Y. 2005-06 (RS) (RS) TOTAL TURNOVER 10 06 69 376 16 72 27 632 GROSS PROFIT 13 87 231 5 56 762 EXPENSES: LABOUR EXPENSES 10 46 014 7 33 773 ITA NO.2860/AHD/2010 A.Y 2007- 08 NATWARLAL S SANGHVI V. ITO WD-11(3) ABD PAGE 6 TRUCK & LORRY EXPENSES 33 17 047 0 COMMISSION EXPENSES 11 62 265 4 48 519 SALARY AND BONUS EXPENSES 5 58 505 1 78 834 TOTAL EXPENSES 60 83 831 13 61 126 ACCORDING TO ASSESSING OFFICER ASSESSEE IS FAILED TO ESTABLISH THAT HE HAS INCURRED THE ABOVE EXPENSES ABSOLUTELY AND ACCORDINGLY AO MA DE DISALLOWANCE TO THE EXTENT OF 30% BY GIVING FOLLOWING FINDING IN PAGE-4 OF HIS ASSESSMENT ORDER:- IN VIEW OF THE ABOVE ADDITION ON ACCOUNT OF THE A BOVE EXCESS EXPENSES CLAIMED BY THE ASSESSEE TO THE EXTENT OF 30% OF TH E TOTAL EXPENSES OF RS.60 83 831/- WHICH AMOUNTS TO RS.18 25 149/- IS HEREBY MADE AND THE SAME IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS U/S.271(1) OF THE I.T. ACT IS INITIATED SEPARATELY FOR FURNISHING INACCURATE PARTICULARS AND THEREBY CONCEALMENT OF INCOME. 7. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE CIT( A). THE CIT(A) CONFIRMED THE DISALLOWANCE BY GIVING FOLLOWING FINDINGS IN PARA-3.3.1 AND 3.3.2 OF HIS APPELLATE ORDER:- 3.3.1 I HAVE CONSIDERED THE SUBMISSION MADE BY THE APPELLANT AND OBSERVATION OF THE YEAR. ONLY WITH RESPECT TO TRUCK AND LORRY EXPENSES THE APPELLANT HAS SATED THAT THESE WERE CLASSIFIED UNDE R A DIFFERENT HEAD IN THE LAST YEAR AND THESE EXPENSES AMOUNTED TO RS.23 66 947/-. IN RESPECT OF THE OTHER EXPENSES NAMELY LABOUR EXPENSES COMMISSION E XPENSES AND SALARY AND BONUS EXPENSES THE APPELLANT HAS FAILED TO EXPL AIN AS TO WHY THERE IS SUCH A DISPROPORTIONATE INCREASE ESPECIALLY WHEN TH E TURNOVER IS ONLY 60% OF THE LAST YEAR. IN THE LAST YEAR THE TURNOVER WAS RS .16.72 CRORES WHEREAS THE TURNOVER IN THE CURRENT YEAR IS ONLY RS.10.06 CRORE S AND STILL THE LABOUR EXPENDITURE IS 40% MORE THAN LAST YEAR. IN THE LAST YEAR THE LABOUR EXPENSES WAS RS.7.33 LAKH WHEREAS IN THE CURRENT YEAR THIS E XPENDITURE IS RS.10.46 LAKH. SIMILARLY THE COMMISSION EXPENDITURE WAS RS. 4.48 LAKH IN THE LAST YEAR WHEREAS IN THE CURRENT YEAR IT IS RS.11.62 LAKH AND STILL THE APPELLANT HAS NOT GIVEN ANY EXPLANATION AS TO WHY THE EXPENDITURE HAS INCREASED DISPROPORTIONATELY. WITH RESPECT TO SALARY AND BONU S EXPENSES ALSO THE APPELLANT HAS FAILED TO EXPLAIN WHY THE EXPENDITURE HAS INCREASED 3.5 TIMES AS COMPARED TO LAST YEAR WHEREAS THE TURNOVER HAS DEC REASE TO 60% OF THE LAST YEAR. 3.3.2 IN VIEW OF THIS REASON I AGREE WITH THE AO T HAT THE DISALLOWANCE OF 30% OF THE EXPENSES IS CORRECT. HOWEVER IT IS SEEN THA T IN RESPECT OF COMMISSION AND LABOUR EXPENSES SOME DISALLOWANCE HAS BEEN MADE WHICH IS PART OF GROUND NO.3. SINCE THE LABOUR EXPENSES OF RS.56 663 /- AND COMMISSION ITA NO.2860/AHD/2010 A.Y 2007- 08 NATWARLAL S SANGHVI V. ITO WD-11(3) ABD PAGE 7 EXPENDITURE OF RS.58 602/- HAVE ALREADY BEEN DISALL OWED UNDER SECTION 40[A][I] AND THE SAME HAS BEEN CONFIRMED DOUBLE D ISALLOWANCE OF THIS CANNOT BE MADE. HENCE THE ASSESSEE GETS A RELIEF OF RS.1 15 116/- OUT OF DISALLOWANCE OF RS.18 25 149/-. THIS GROUND OF APPE AL IS THEREFORE PARTLY ALLOWED. AGGRIEVED ASSESSEE CAME IN SECOND APPEAL BEFORE US . 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. THE LD. COUNSEL FOR THE ASSESSEE DRAWN OUR ATTENTION TO THE ASSESSEES PAPER BOOK I.E. STATEMENT OF AUDITED ACCOUNT ENDING ON 31-03-2007 AT PAGE-19 WHERE COMPARATIVE EXPENSES ARE GIVEN UN DER THE HEADS OCTROI FREIGHT AND TRUCK/LORRY EXPENSES. LD. COUNSEL FOR ASSESSEE NARRATED THAT IN EARLIER YEARS ASSESSEE HAS DECLARED COMPOSITE EXPENDITURE UNDER T HE HEAD OCTROI AND FREIGHT AS UNDER:- PARTICULARS CURRENT PREVIOUS YEAR YEAR EXPENDITURE LABAOUR EXP. 1046014 733773 TRUCK & LORRY EXP. 3317047 0 HE STATED THAT ASSESSEE BY PUTTING THE COMMON EXPEN DITURE UNDER THE HEAD OCTROI FREIGHT THAT OF TRUCK AND LORRY ALSO ACCOUNTED THE TOTAL EXPENDITURE AT RS.23 66 974/- AND HE REFERRED TO THE CURRENT YEARS EXPENSES AT R S.77 855 AND R.33 17 047/-. ACCORDING TO LD. COUNSEL FOR THE ASSESSEE ASSESSIN G OFFICER HAS NOT CONSIDERED THE LAST YEARS EXPENSES UNDER A DIFFERENT HEAD OCTROI AND FREIGHT AND IF GIVEN THE CREDIT FOR THE SAME ASSESSEES OVER AND ABOVE EXPENSES WI LL BE AT RS.23 LAKH ONLY. WE FIND THAT IF WE CLUB THE EXPENDITURE INCURRED DURIN G THE IMMEDIATE PRECEDING YEAR AT RS.13.61 + RS.23.66 LAKH INCURRED BY ASSESSEE THEN BOTH WILL COME LITTLE OVER RS.37 LAKH AND IN CASE WE GIVE REBATE QUA THE EXPENDITUR E INCURRED IN THIS RELEVANT ASSESSMENT YEAR AT RS.60.83 LAKH THE DIFFERENCE WI LL BE ALMOST RS.23 LAKH. IN CASE WE ESTIMATE THE DISALLOWANCE THAT WE ESTIMATE AT A REASONABLE RATE AT 10% QUA THIS DIFFERENCE OF RS.23 LAKH AND ACCORDINGLY WE ESTIMAT E THE SAME. THE ASSESSING OFFICER IS DIRECTED TO RE-COMPUTE THE INCOME BY TAK ING DISALLOWANCE OF 10% OF RS.23 LAKH AND THIS ISSUE OF ASSESSEES APPEAL IS PARTLY ALLOWED AS INDICATED ABOVE. ITA NO.2860/AHD/2010 A.Y 2007- 08 NATWARLAL S SANGHVI V. ITO WD-11(3) ABD PAGE 8 8. THE NEXT GROUNDS NO.3 4 AND 5 OF THIS ASSESSEE S APPEAL IS AS REGARDS TO ADDITION OF COMMISSION EXPENSES LABOUR EXPENSES U/ S.40(A)(I) TELEPHONE EXPENSES AND VEHICLE EXPENSES. 9. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE STATE D THAT HE HAS INSTRUCTIONS FROM THE ASSESSEE NOT TO PRESS THESE ISSUES. ACCORD INGLY WE DISMISS THESE ISSUES AS NOT PRESSED. 10. IN THE RESULT ASSESSEES APPEAL IS PARTLY ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN OPEN COURT ON 09/02/2011 SD/- SD/- (N.S.SAINI) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD DATED : 09/02/2011 *DKP COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)-XVI AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD