DCIT, Lucknow v. Hind Charitable Trust, Lucknow

ITA 31/LKW/2011 | 2006-2007
Pronouncement Date: 24-03-2011 | Result: Dismissed

Appeal Details

RSA Number 3123714 RSA 2011
Assessee PAN AAATH5498M
Bench Lucknow
Appeal Number ITA 31/LKW/2011
Duration Of Justice 2 month(s) 2 day(s)
Appellant DCIT, Lucknow
Respondent Hind Charitable Trust, Lucknow
Appeal Type Income Tax Appeal
Pronouncement Date 24-03-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 24-03-2011
Date Of Final Hearing 23-03-2011
Next Hearing Date 23-03-2011
Assessment Year 2006-2007
Appeal Filed On 21-01-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B - BENCH LUCKNOW. BEFORE SHRI H.L.KARWA HON'BLE VICE PRESIDENT AND SHRI N.K.SAINI ACCOUNTANT MEMBER I.T.A.NOS. 31 & 32(LKW.)/2011 A.YS. : 2006-07 & 2007-08 THE DY.CIT RANGE I VS. HIND CHARITABLE TRUST LUCKNOW. B-BLOCK CHURCH ROAD INDIRA NAGAR LUCKNOW. . PAN AAATH5498M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIVEK MISHRA CIT(D.R.) RESPONDENT BY : SHRI A.P.SINHA ADVOCATE O R D E R PER H.L.KARWA VICE PRESIDENT THESE TWO APPEALS BY THE REVENUE INVOLVING COMM ON ISSUES ARE DIRECTED AGAINST THE DIFFERENT ORDERS OF THE LD.CI T(A)-I LUCKNOW DATED 25.10.2010 RELATING TO THE ASSESSMENT YEARS 2006-07 AND 2007-08. FIRSTLY WE WILL TAKE UP I.T.A.NO.31(LKW)/2011 RELATING TO T HE ASSESSMENT YEAR 2006-07. 2. GROUND NO.1 OF THE APPEAL READS AS UNDER : 1. WHETHER THE LD. CIT(A) WAS CORRECT IN DELETING THE ADDITION OF RS.12 79 352/- MADE BY THE A.O. OUT OF CAPITAL EXPE NDITURE IGNORING THE FACT THAT THE A.O. HAD GIVEN CATEGORIC AL FINDING THAT THE ASSESSEE WAS NOT ABLE TO PRODUCE SUPPORTING EVI DENCE IN RESPECT OF CAPITAL UTILIZATION SUBSTANTIATING THROU GH RESPECTIVE BILLS AND VOUCHERS. 2 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CHARITABLE TRUST AND REGISTERED UNDER SECTION 12A OF THE INCO ME-TAX ACT 1961 (IN SHORT THE ACT). THE ASSESSEE FILED ITS RETURN OF INCOME ON 27.10.2006 DECLARING NIL INCOME. HOWEVER THE AO COMPLETED THE ASSESSMEN T ON AN INCOME OF RS.52 30 859 ON 31.12.2008. DURING THE COURSE OF A SSESSMENT PROCEEDINGS THE AO OBSERVED THAT AS PER THE COMPUTATION OF INCO ME FILED ALONGWITH RETURN OF INCOME THE ASSESSEE HAS CLAIMED TO HAVE UTILIZED THE INCOME OF RS.5 82.129 ON REVENUE EXPENDITURE AND RS.1 27 9 3 518 ON CAPITAL EXPENDITURE. ACCORDING TO THE AO IN RESPECT OF CAP ITAL EXPENDITURE OF RS.1 27 93 518 THE ASSESSEE HAS FURNISHED COPIES O F BILLS TO THE EXTENT OF RS.21 25 220 ONLY. THEREFORE THE BALANCE OF CAPITA L EXPENDITURE WAS NOT PROVED FOR WANT OF BILLS VOUCHERS ETC. ACCORDING TO THE AO MOST OF THE BILLS PRODUCED WERE HAND-MADE AND NO ITEM-WISE CO NSUMPTION OF BUILDING MATERIAL WAS SHOWN. IN THE CASE OF LABOUR AND WA GES THE PAYMENTS WERE FOUND MADE THROUGH MUSTER ROLL AS WELL AS CONTRACTO RS NAMED PAPU CONTRACTOR ASHOK CHAUHAN THEKEDAR KALLU CONTR ACTOR AND A & M TRADERS ETC. IN NONE OF THE CASES THE BILLS WHET HER RUNNING OR FINAL WERE PRODUCED FOR EXAMINATION AND IT WAS ALSO NOT EXPLAI NED WHETHER TDS HAS BEEN MADE OR NOT. AS ONLY FEW BILLS OF BUILDING MAT ERIALS WERE PRODUCED FOR EXAMINATION AND THE LABOUR PAYMENTS COULD NOT BE VE RIFIED FOR WANT OF COMPLETE DETAILS THE AO DISALLOWED 10% OF THE TOT AL EXPENDITURE AMOUNTING TO RS.12 79 352. THE SAID AMOUNT WAS ADDE D TO THE TOTAL INCOME OF THE ASSESSEE. 4. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD.CIT(A). 3 5. BEFORE THE LD.CIT(A) THE ASSESSEE TOOK THE FOL LOWING LINE OF ARGUMENTS: (I) THAT THE FINDINGS GIVEN BY THE AO WERE BASED ON PRESUMPTIONS AND SURMISES AND HE FAILED TO APPRECIATE THAT THE A SSESSEES REPLY SUBMITTED VIDE ITS LETTER DATED 26.12.2008. (II) THAT THE COMPLETE MUSTER ROLL ALONGWITH COMPLETE BU ILDING MATERIAL VOUCHERS WERE PRODUCED AND THUS THE ASSES SEE HAD FULLY DISCHARGED ITS BURDEN. (III) THAT NO SPECIFIC DEFECTS IN THE BOOKS OF ACCOUNT AN D VOUCHERS WERE POINTED OUT AND THEREFORE THE AO WAS NOT JUST IFIED IN HOLDING ONLY FEW BILLS OF BUILDING MATERIAL WERE PRODUCED. 6. IN PARA 4.1 OF THE ORDER THE LD.CIT(A) HAS REPR ODUCED THE REPLY OF THE ASSESSEE DATED 26.12.2008 WHICH READS AS UNDER : ' THAT THE ENTIRE ORIGINAL VOUCHERS OF PURCHASE OF BUILDING CONSTRUCTION MATERIAL ARE BEING PRODUCED FOR YOUR K IND PERUSAL. THAT APART FROM THIS THE ASSESSEE MADE HUGE AMOUNT OF PA YMENT TO LABOUR IN SUPPORT OF IT MUSTER ROLL IS ALSO BEING PRODUCED FO R YOUR KIND PERUSAL. THAT THE COPY OF LEDGER ACCOUNT OF PAYMENT OF SALAR Y ALONG WITH THE LIST OF THE EMPLOYEES ARE BEING ENCLOSED. THAT THE ENTIRE BOOKS OF ACCOUNTS AND VOUCHERS ARE BEING PRODUCED T O SUBSTANTIATE THE REVENUE EXPENDITURE. THAT APART FROM ABOVE SUBMISSIONS THE HUGE TRUST BU ILDING IS STANDING SINCE 31-03-2006 WHICH HAS BEEN CONSTRUCT ED AFTER SEEKING THE DUE APPROVAL OF THE LOCAL AUTHORITIES. THAT THE BUILDING WHICH IS THERE SINCE 31-03-2006 CANNOT BE CONSTRUCTED BY MAK ING INVESTMENT OF RS.21 25 220 ONLY. THAT THE CONSTRUCTION IS STIL L GOING ON. 4 IT I S VE R Y P E RTINENT TO MENTI O N H E R E T HA T O N EA RLI E R H E ARIN G AL SO ALL T H E VO U C H E R S WE R E PR O DU CED T H E CO P Y OF O NL Y FEW VOUC H E R S WE R E T AK E N RANDOML Y W H I C H ARE ON R ECO RD . ' . 6.1 THE LD.CIT(A) OBSERVED THAT THE AO HAS NOT CONS IDERED THE REPLY OF THE ASSESSEE DATED 26.12.2008 STATING AS UNDER: 4.2 WHILE THESE CONTENTIONS WERE RAISED ON 26.12.2 009 BEFORE THE AO WHO WAS AS YET TO COMPLETE THE ASSESSMENT THE AO COULD HAV E REFUTED THE APPELLANT'S CLAIM OF PRODUCING THE ENTI RE EVIDENCE. INSTEAD THE AO MENTIONS THAT COPIES OF BILLS ONLY T O THE EXTENT OF RS.21 25 220/- WERE FURNISHED. THE AO HAS NOT DISTI NGUISHED BETWEEN THE EVIDENCE PRODUCED AND THE EVIDENCE OBTA INED TO BE KEPT ON RECORD I.E. 'FURNISHED'. IN THE LAST LINES OF THE APPELLANT'S LETTER DATED 26.12.2009 AS EXTRACTED BY THE AO IN HIS ORDER IT IS ASSERTED BY THE APPELLANT THAT 'ON EARLIER HEARING ALSO ALL THE VOUCHERS WERE PRODUCED THE COPY OF ONLY FEW VOUCHE RS WERE TAKEN RANDOMLY WHICH ARE ON RECORD.'. THUS THE AO WITHOU T SPECIFYING THE EXTENT AND DETAILS OF EVIDENCE PRODUCED DREW THE CO NCLUSIONS ON THE BASIS OF SUCH EVIDENCE AS WAS OBTAINED AND PLACED O N RECORD AND THEREBY DESCRIBED AS FURNISHED. 6.2 THE LD.CIT(A) ALSO CALLED FOR REMAND REPORT FR OM THE AO AND AFTER CONSIDERING THE FACTS OF THE CASE AND MATERIALS TH E LD.CIT(A) DELETED THE ADDITION OBSERVING AS UNDER: 4.4 HAVING REGARD TO THE FACTS AND CIRCUMSTANCES IT CAN BE REASONABLY CONCLUDED THAT THE DISALLOWANCE OF RS.12 79 352 OUT OF CAPITAL EXPENDITURE IS NOT BACKED BY ANY CONCRETE AND ESTABLISHED FACTS AND THE FAILURE TO PRODUCE THE REQUISITE EVID ENCE AS ATTRIBUTED TO THE APPELLANT REMAINS UNSUBSTANTIATED. THE APPELLA NTS ASSERTION THAT IT PRODUCED ALL THE EVIDENCE AND COPIES OF PART OF THE EVIDENCE WERE FURNISHED HAS NOT BE REFUTED OR CONTRADICTED BY THE AO WHO HAS EXTENSIVELY QUOTED (IN HIS ORDER) FROM THE APPELLAN T'S REPLY DATED 26.12.2009. HAVING TREATED THE CAPITAL EXPENDITURE TO THE EXTENT OF RS.1 06 68 298/- AS UNPROVED THE AO HAS DISALLOWED ONLY 10% OF THE OVERALL CLAIM LEADING TO THE INFERENCE THAT THE AO TREATED 90% OF THE CLAIM AS PROVED AND THEREFORE ADMISSIBLE. THUS WH ILE THE 5 DISALLOWANCE SUFFERS FROM AN INHERENT CONTRADICTION THE DISALLOWANCE @ 10% SUGGESTS THAT IT WAS PURELY ADHOC IN NATURE. THE DISALLOWANCE AMOUNTING TO RS.12 79 352/- MADE OUT OF CAPITAL EXP ENDITURE IS THEREFORE DIRECTED TO BE DELETED. 7. BEFORE US SHRI VIVEK MISHRA LD.CIT(DR) SUBMITT ED THAT THE LD. CIT(A) HAS DELETED THE ADDITION OF RS.12 79 352 MAD E OUT OF CAPITAL EXPENDITURE ON THE GROUND THAT THE DISALLOWANCE IS NOT BACKED BY ANY CONCRETE AND ESTABLISHED FACTS AND THE FAILURE TO PRODUCE THE REQUISITE EVIDENCE AS ATTRIBUTED TO THE ASSESSEE REMAINED U NSUBSTANTIATED. ACCORDING TO THE LD.D.R. THE LD.CIT(A) OVERLOOKED THE FACT T HAT THE AO HAD GIVEN CATEGORICAL FINDING THAT THE ASSESSEE WAS NOT ABLE TO PRODUCE SUBSTANTIATING BILLS AND VOUCHERS. 8. ON THE OTHER HAND SHRI A.P.SINHA ADVOCATE LD. COUNSEL FOR THE ASSESSEE STRONGLY SUPPORTED THE ORDER OF THE LD.CIT (A). 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIALS AVAILABLE ON RECORD. IT SEEMS THAT THE AO HAS NOT T AKEN INTO CONSIDERATION THE REPLY OF THE ASSESSEE DATED 26.12.2008 WHICH WAS FI LED A FEW DAYS BEFORE THE COMPLETION OF THE ASSESSMENT. ADMITTEDLY THE ASSES SMENT WAS FRAMED ON 31.12.2008. THE LD.CIT(A) HAS CATEGORICALLY MENTION ED THAT THE AO HAS NOT REFUTED THE ASSESSEES CLAIM OF PRODUCING THE ENTI RE EVIDENCE. AS PER REPLY DATED 26.12.2008 IT IS CLEAR THAT HE ASSESSEE HAS PRODUCED ENTIRE ORIGINAL VOUCHERS OF PURCHASE OF BUILDING CONSTRUCTION MATER IAL. THE ASSESSEE HAS MADE HUGE AMOUNT OF PAYMENT TO LABOUR AND IN SUPP ORT OF THE SAME MUSTER ROLL WAS ALSO PRODUCED BEFORE THE AO. BESIDES THIS THE ASSESSEE ALSO PRODUCED COPY OF LEDGER ACCOUNT OF PAYMENT OF SALAR Y ALONGWITH LIST OF THE 6 EMPLOYEES. THE ASSESSEE ALSO PRODUCED THE ENTIRE B OOKS OF ACCOUNT AND VOUCHERS TO SUBSTANTIATE ITS CLAIM. IT IS ALSO APP ARENT FROM THE RECORD THAT THE ASSESSEE-TRUST HAS CONSTRUCTED A BUILDING WHICH IS IN EXISTENCE SINCE 31.3.2006 AND THE SAME CANNOT BE CONSTRUCTED BY MAK ING AN INVESTMENT OF RS.21 25 220. IT IS CLAIMED THAT THE CONSTRUCTION I S STILL GOING ON. IT IS ALSO SEEN FROM THE RECORDS THAT IN THE REMAND REPORT THE AO HAS HELD THAT THE ENTIRE CLAIM OF RS.1 27 93 518 WAS UNVERIFIABLE WH EREAS THE AO WHO COMPLETED THE ASSESSMENT HELD THE CLAIM AS UNPRO VED TO THE EXTENT OF RS.1 06 68 298. THE LD.CIT(A) HAS CATEGORICALLY STA TED THAT THE REPORT WAS INCOMPLETE AND CONTRADICTORY AS COMPARED WITH THE A SSESSMENT ORDER. THE LD.CIT(A) HAS DIRECTED THE AO TO EXAMINE THE CLAIM OF THE ASSESSEE VERIFY THE ENTIRE EXPENSES OF RS.1 27 93 518 AND SUBMIT TH E FACTUAL REPORT AS TO WHETHER THE EXPENSES ARE VOUCHED AND VERIFIABLE. AC CORDING TO THE LD.CIT(A) THE REPORT DID NOT CONTAIN ANY CONCRETE AND COMPREHENSIVE FINDING ON THE ISSUE REMANDED TO THE AO. THUS IT IS CLEAR THAT THE REMAND REPORT OF THE AO WAS NOT RELIABLE. ON THE OTHER HAN D IT IS APPARENT FROM THE RECORD THAT THE FINDINGS GIVEN BY THE AO ARE BASED ON PRESUMPTION AND SURMISES. THE DISALLOWANCE MADE BY THE AO AT THE R ATE OF 10% OF THE OVERALL CLAIM SUGGESTS THAT IT WAS PURELY AD HOC I N NATURE. THE AO HIMSELF HAS TREATED 90% OF THE CLAIM AS PROVED AND THEREFO RE ADMISSIBLE. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF T HE PRESENT CASE WE ARE OF THE VIEW THAT THE LD.CIT(A) WAS FULLY JUSTIFIED IN DELETING THE DISALLOWANCE OF 10% MADE BY THE AO. IN THAT VIEW OF THE MATTER WE UPHOLD THE ORDER OF THE LD.CIT(A) AND DISMISS THE GROUND RAISED BY THE REVENUE. 10. GROUND NO.2 OF THE APPEAL READS AS UNDER : 7 WHETHER THE LD. CIT(A) WAS CORRECT IN DELETING THE ADDITION OF RS. 39 51 507/- MADE BY THE A.O. HOLDING 30% OF THE DON ATIONS AS NON- GENUINE AND TREATING IT UNEXPLAINED SPECIALLY IN V IEW OF THE FACTS THAT THE ASSESSEE WAS UNABLE TO PROVE THE GENUINENESS OF THE DONATIONS BEFORE THE A.O. 11. DURING THE ASSESSMENT YEAR UNDER CONSIDERATION THE ASSESSEE HAS CLAIMED TO HAVE RECEIVED RS.1 31 71 269 TOWARDS DON ATIONS AND CONTRIBUTIONS. ON PERUSAL OF THE LIST PRODUCED BY T HE ASSESSEE IT WAS OBSERVED BY THE AO THAT THE DONATION WAS LIMITED TO VERY SMALL AMOUNT AT RS.151 RS.501 AND RS.350 ETC. THE PERSONS WHOSE CO NFIRMATIONS WERE PRODUCED DID NOT HAVE ANY PAN NEITHER DO THEY RE MEMBER THE DATES ON WHICH THEY HAD GIVEN THE DONATIONS. THE CONFIRMATIO NS ALSO DID NOT OUTLINE THE CHARITABLE PURPOSE WHICH WOULD BE FULFILLED FRO M THESE DONATIONS. THEREFORE 30% OF THE TOTAL DONATIONS AMOUNTING TO RS.39 51 507 WAS TREATED AS UNEXPLAINED INVESTMENT BY THE AO AND HAS BEEN ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 12. BEFORE THE LD.CIT(A) THE ASSESSEE TOOK THE FOL LOWING LINE OF ARGUMENTS: (I) THAT THE AO HAD RANDOMLY CHOSEN DONORS TO APPEA R BEFORE HIM FOR CONFIRMATION OF THE AMOUNTS SHOWN AS DONATIONS IN THEIR NAMES. (II) THAT ALL SUCH DONORS APPEARED BEFORE THE AO AND CON FIRMED THE DONATIONS. 8 (III) THAT THE DISALLOWANCE OF 30% OF THE TOTAL DONATION WAS MADE ONLY ON PRESUMPTION AND SURMISES. 13. THE LD.CIT(A) CALLED FOR A REMAND REPORT. THE LD.CIT(A) DIRECTED THE AO TO MAKE NECESSARY ENQUIRIES IN REGARD TO THE GEN UINENESS OF DONATIONS. THE AO WAS ALSO REQUIRED TO SUBMIT A FACTUAL REPORT BRINGING OUT CLEARLY AS TO WHETHER THE DONATIONS WERE VERIFIABLE AND GENUIN E. HOWEVER IN THE REMAND REPORT THE AO OBSERVED THAT THE GENUINENESS OF THE DONATIONS APPEARED TO BE SUSPICIOUS. 14. AFTER CONSIDERING THE FACTUAL AND LEGAL POSITIO N THE LD.CIT(A) DELETED THE ADDITION OBSERVING AS UNDER : 5.2 AS THE DONATION RECEIPTS WOULD APPEAR AS CRED ITS IN THE BOOKS OF ACCOUNTS THE ADDITION COULD BE POSSIBLY MADE IN TERMS OF SECTION 68. ON PERUSAL OF AO'S RECORDS ALSO IT IS SEEN THAT IN THE SHOW CAUSE NOTICE DATED 24.12.2008 (ISSUED BY THE AO) THE ADDI TION OF DONATIONS AND CONTRIBUTION WAS PROPOSED AS UNEXPLAINED CREDIT S IN TERMS OF THE PROVISIONS OF SECTION 68. AS PER THE PROVISIONS OF SECTION 68 IT IS THE CREDIT AS SUCH WHICH CAN BE CHARGED TO TAX AS INCO ME AND NOT AN ESTIMATED PERCENTAGE OF CREDITS. THE AOS CONTENTI ON THAT TREATING 30% OF THE DONATIONS AS NON-GENUINE ON FAIR STANDA RDS IS NOT BASED ON ANY SOUND REASONING. IT IS NOT CLEAR FROM THE A SSESSMENT ORDER AS TO HOW THE RECEIPTS SHOWN AS DONATIONS AND TO THE E XTENT TREATED AS NON-GENUINE REPRESENTED UNEXPLAINED INVESTMENTS TO BE TAXED UNDER THE PROVISIONS OF SECTION 69. THE DONATION RECEIPTS TO THE EXTENT HELD NON GENUINE ARE NOT LINKED AS A SOURCE TO ANY INVES TMENT WHICH COULD AS A CONSEQUENCE BE HELD AS UNEXPLAINED. THERE IS THEREFORE AN OBVIOUS DIFFERENCE BETWEEN THE ADDITION PROPOSED IN THE SHOW CAUSE AND THE ADDITION ULTIMATELY MADE UNDER ALTOGETHER D IFFERENT PROVISIONS. 15. BEFORE US SHRI VIVEK MISHRA LD.CIT(DR) SUBMIT TED THAT THE 9 LD.CIT(A) HAS DELETED THE ADDITION ON THE GROUND T HAT THE AO HAD NOT GIVEN ANY CATEGORICAL FINDING THAT THE DONATIONS WERE NON -GENUINE AND TO WHAT EXTENT. SHRI VIVEK MISHRA LD.CIT(DR) FURTHER SUBMI TTED THAT HERE ALSO THE LD.CIT(A) OVERLOOKED THE FACT THAT THE AO HAS GIV EN A FINDING THAT THE PERSONS WHOSE CONFIRMATION WAS PRODUCED DO NOT HAV E PAN NEITHER DO THEY REMEMBER THE DATES ON WHICH THEY HAD GIVEN THE DONATIONS. THE CONFIRMATIONS ALSO DO NOT OUTLINE THE CHARITABLE PURPOSE WHICH WOULD BE FULFILLED FROM THEIR DONATIONS. 16. SHRI A.P.SINHA ADVOCATE LD. COUNSEL FOR THE A SSESSEE ON THE OTHER HAND SUPPORTED THE ORDER OF THE LD.CIT(A). 17. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE AL SO PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FULLY AGREE WIT H THIS OBSERVATION OF THE LD.CIT(A) THAT AS THE DONATION RECEIPTS WOULD APPEA R AS CREDITS IN THE BOOKS OF ACCOUNT THE ADDITION COULD BE POSSIBLY MADE IN TERMS OF SECTION 68 OF THE ACT. AS PER PROVISIONS OF SECTION 68 OF THE ACT IT IS THE CREDIT AS SUCH WHICH CAN BE CHARGED TO TAX AS INCOME AND NOT AN ES TIMATED PERCENTAGE OF CREDITS. THUS LEGALLY SPEAKING THE ADDITION MADE BY THE AO IS NOT TENABLE. THE AO HAS TREATED 30% OF THE DONATION AS NON-GENU INE FOR WHICH HE HAS NOT GIVEN ANY BASIS OR ANY SOUND REASONING. IN THE ASSESSMENT ORDER THE AO HAS ADDED BACK THE AMOUNT OF RS.39 51 507 TREATING THE SAME AS UNEXPLAINED INVESTMENTS BY INVOKING THE PROVISIONS OF SECTION 69 OF THE ACT. IN OUR VIEW THE LD.CIT(A) HAS CORRECTLY OBSERVED THAT AS TO HOW THE RECEIPTS SHOWN AS DONATIONS AND TO THE EXTENT TREATED AS NON -GENUINE REPRESENTED UNEXPLAINED INVESTMENTS TO BE TAXED UNDER THE PROV ISIONS OF SECTION 69. WE ALSO ADD HERE THAT THE ADDITION MADE BY THE AO HAS CORRECTLY BEEN DELETED BY 10 THE LD.CIT(A). THE LD.CIT(A) HAS ALSO STATED THAT T HERE WAS DIFFERENCE BETWEEN THE ADDITION PROPOSED IN THE SHOW CAUSE NOT ICE AND THE ADDITION ULTIMATELY MADE UNDER ALTOGETHER DIFFERENT PROVISI ONS. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE THE IMPUGNED ADDITION IS NOT TENABLE AND THE LD.CIT(A) HAS CORRECTLY DELETED THE SAME. THIS GROUND OF APPEAL IS ALSO WITHOUT ANY MERIT AND DESERVES TO BE DISMISSED. WE ORDER ACCORDINGLY. I.T.A.NO.32(LKW)/2011 18. GROUND NO.1 OF THE APPEAL READS AS UNDER : 1. WHETHER THE LD. CIT(A) WAS CORRECT IN DELETING THE ADDITION OF RS.38 05 034/- MADE BY THE A.O. OUT OF CAPITAL EXPE NDITURE IGNORING THE FACT THAT THE A.O. HAD GIVEN CATEGORIC AL FINDING THAT THE ASSESSEE WAS NOT ABLE TO GIVE DETAILS OF ITEM -WISE CONSUMPTION OF BUILDING MATERIAL AND ALSO COULD NO T FURNISH COMPLETE DETAILS OF LABOUR PAYMENTS. 19. THIS GROUND OF APPEAL IS SIMILAR TO GROUND NO.1 OF I.T.A.NO.31(LKW)/2011 EXCEPT THE AMOUNT OF ADDITION . IN THIS YEAR THE AO DISALLOWED 5% OF THE ASSESSEES CLAIM FOR CAPITAL E XPENDITURE AT RS.7 61 00 672. THIS DISALLOWANCE WAS MADE ON THE G ROUND THAT THE CAPITAL EXPENDITURE REMAINED UNSUBSTANTIATED FOR WANT OF BI LLS/VOUCHERS AND OTHER SUPPORTING EVIDENCE. ON APPEAL THE LD.CIT(A) DELE TED THE ADDITION STATING THAT THE DISALLOWANCE AND ITS ESTIMATE (I.E. 5%) A RE THUS NOT BASED ON COGENT AND CONCRETE REASONS AND DISPROVED CLAIMS. THE DIS ALLOWANCE BEING PURELY AD HOC IN NATURE IS THEREFORE DIRECTED TO BE DELE TED. THE FINDINGS GIVEN BY US ABOVE IN THE CONTEXT OF GROUND NO.1 OF REVENUE S APPEAL IN I.T.A.NO.31(LKW)/2011 (SUPRA) SHALL APPLY WITH EQU AL FORCE TO THIS GROUND OF APPEAL ALSO SINCE THE FACTS AND CIRCUMSTANCES OF THE CASES ARE ALMOST 11 SIMILAR. CONSEQUENTLY WE DISMISS GROUND NO.1 OF TH E APPEAL. 20. GROUND NO.2 OF THE APPEAL READS AS UNDER: 2. WHETHER THE LD. CIT(A) WAS CORRECT IN DELETING THE ADDITION OF RS.16 70 775/- MADE BY THE A.O. HOLDING 15% OF THE DONATIONS AS NON-GENUINE AND TREATING IT UNEXPLAINED SPECIAL LY IN VIEW OF THE FACTS THAT THE ASSESSEE WAS UNABLE TO PROVE THE GENUINENESS OF THE DONATIONS BEFORE THE A.O. 21. THIS GROUND OF APPEAL IS SIMILAR TO GROUND NO.2 OF REVENUES APPEAL IN I.T.A.NO.31(LKW)/2011. THE ONLY DIFFERENCE IS IN THE AMOUNT OF ADDITION AND THE PERCENTAGE OF DISALLOWANCE. IN THIS YEAR T HE AO DISALLOWED 15% OF THE DONATIONS AS NON-GENUINE AND TREATED IT UNEXPL AINED. ON APPEAL THE LD.CIT(A) DELETED THE ADDITION BY GIVING SIMILAR FI NDINGS AS GIVEN IN THE CONTEXT OF GROUND NO.2 OF THE REVENUES APPEAL FOR THE ASSESSMENT YEAR 2006-07. THE FACTS AND CIRCUMSTANCES ARE SIMILAR EX CEPT THE AMOUNT OF ADDITION AND THE PERCENTAGE OF DISALLOWANCE. THEREF ORE THE FINDINGS GIVEN BY US IN RESPECT OF GROUND NO.2 RAISED BY THE REVEN UE IN I.T.A.NO.31(LKW)/2011 (SUPRA) SHALL APPLY WITH EQU AL FORCE TO THIS GROUND OF APPEAL ALSO. CONSEQUENTLY THIS GROUND OF APPEAL IS ALSO DISMISSED. 22. IN THE RESULT BOTH THE APPEALS ARE DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 24.3.11. SD. SD. (N.K.SAINI) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT MARCH 24TH 2011. COPY TO THE : 1. APPELLANT 2. RESPONDENT 3. CIT(A) (4) CIT 5.DR. A.R. ITAT LUCKNOW. SRIVASTAVA. 12