M/s Bright Enterprises Pvt. Ltd,, Jalandhar v. The Dy. Commissioner of Income-tax, Jalandhar

ITA 354/ASR/2014 | 2010-2011
Pronouncement Date: 20-10-2016 | Result: Allowed

Appeal Details

RSA Number 35420914 RSA 2014
Assessee PAN AAACB6469K
Bench Amritsar
Appeal Number ITA 354/ASR/2014
Duration Of Justice 2 year(s) 4 month(s) 18 day(s)
Appellant M/s Bright Enterprises Pvt. Ltd,, Jalandhar
Respondent The Dy. Commissioner of Income-tax, Jalandhar
Appeal Type Income Tax Appeal
Pronouncement Date 20-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 20-10-2016
Date Of Final Hearing 22-09-2016
Next Hearing Date 22-09-2016
Assessment Year 2010-2011
Appeal Filed On 02-06-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. T. S. KAPOOR ACCOUNTANT MEMBER AND SH. N.K. CHOUDHRY JUDICIAL MEMBER ITA NO.354(ASR)/2014 ASSESSMENT YEAR:2010-11 PAN : AAACB6469K M/S. BRIGHT ENTERPRISES PVT LTD. VS. THE ASSTT. COM MR. OF INCOME- TAX JALANDHAR. CIRCLE-III JALANDHAR. (APPELLANT) (RESPONDENT) ITA NO.518(ASR)/2014 ASSESSMENT YEAR:2010-11 PAN : AAACB6469K THE ASSTT. COMMR. OF INCOME-TAX VS. M/S. BRIGHT EN TERPRISES PVT LTD. CIRCLE-III JALANDHAR. JALANDHAR. (APPELLANT) (RESPONDENT) ASSESSEE BY: SH. SUDHIR SEHGAL RESPONDENT BY: SH. RAHUL DHAWAN DR DATE OF HEARING: 22/09/2016 DATE OF PRONOUNCEMENT: 28/10/2016 ORDER PER T.S. KAPOOR AM: THESE ARE THE CROSS APPEALS ONE BY THE ASSESSEE AND THE OTHER BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A)-1 LUDHIANA DATED 08.05.2014. THE GROUNDS OF APPEAL TAKEN BY THE ASSE SSEE AS WELL AS THE REVENUE ARE REPRODUCED BELOW: ASSESSEES GROUNDS OF APPEAL : 1. A). THAT THE WORTHY COMMISSIONER OF INCOME TAX (APP EALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF INTEREST AM OUNTING TO RS. ITA NOS. 354 & 518/ASR/2014 A.Y. 2010-11 2 6 84 639/- PAID BY THE ASSESSEE ON CAR LOAN AND WHI CH HAS BEEN CLAIMED AS EXPENDITURE IN THE PROFIT AND LOSS ACCOUN T. B) THAT THE DISALLOWANCE OF INTEREST HAS BEEN MADE AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE AND OUR SUBMISS IONS MADE BEFORE THE WORTHY CIT (A) HAVE NOT BEEN CONSIDERED PROPERLY. C) THAT NOTWITHSTANDING THE ABOVE SAID GROUND OF A PPEAL THE WORTHY CIT (A) HAS ERRED IN REJECTING THE CONTENTIO N OF THE ASSESSEE THAT THERE WAS BUSINESS PURPOSE IN ADVANCI NG THE FUNDS TO THE SISTER CONCERN AND AS SUCH NO DISALLOWANCE OF INTEREST WAS CALLED FOR. 2. THAT THE CIT (A) HAS ERRED IN UPHOLDING THE ADDI TION MADE BY THE ASSESSING OFFICER BY MAKING AD-HOC DISALLOWANCE OF EXPENDITURE @ 10% TO THE TUNE OF RS. 92 92 170/- UNDER THE HEAD MAGAZINES & JOURNALS AS PER PARA 14 PAGE 31 OF THE ORDER. 3. THAT THE WORTHY CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSSING OFFICER IN CAPITALIZING THE SUM OF RS. 1 03 75 854 /- AS CAPITAL EXPENDITURE OUT OF EXPENDITURE CLAIMED UNDER THE HEAD REPAIR AND MAINTENANCE. 4. THAT THE DISALLOWANCE IS OTHERWISE NOT PROPER SI NCE THE HONBLE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH AMRI TSAR HAS ALLOWED THE EXPENDITURE ON SIMILAR FACTS IN ASSTT. YEAR 2006-07 AND THE CIT (A) HAS WRONGLY MENTIONED IN THE ORDER THAT THE ITAT HAS CONFIRMED THE DISALLOWANCE OF EXPENDITURE IN ASS TT. YEAR 2006-07. 5. THAT THE ADDITION IN THE AFORESAID PARAS HAS BEEN M ADE BY NOT CONSIDERING THE DETAILED SUBMISSIONS ALONGWITH VARI OUS CASE LAWS FILED BEFORE THE CIT (A) AND ALSO BEFORE THE ASSESS ING OFFICER PROPERLY. 6. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOS ED OFF. REVENUES GROUNDS OF APPEAL : 1. THAT THE LD. CIT(A) ERRED BOTH IN LAW AND ON FA CTS IN DELETING THE ADDITION OF RS. 14 94 648/- MADE BY THE AO ON A CCOUNT OF GRATUITY PAYABLE. ITA NOS. 354 & 518/ASR/2014 A.Y. 2010-11 3 2. THAT THE LD. CIT(A) ERRED BOTH IN LAW AND ON FAC TS IN NOT APPRECIATING THE FACT THAT THE GRATUITY FUND OF THE ASSESSEE IS UNAPPROVED AND PROVISION MADE TO LAW IS NOT ALLOWAB LE U/S 40A(7) OF THE INCOME TAX ACT 1961. 3. THAT THE APPELLANT CRAVES LEAVE TO FILE FURTHER GROUNDS OF APPEAL IF REQUIRED AT THE TIME OF HEARING. 4. IT IS PRAYED THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) BE SET ASIDE AND THAT OF THE ASSESSIN G OFFICER BE RESTORED. 2. AT THE OUTSET THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT HE WILL NOT BE PRESSING GROUND NOS. 3 & 4 THEREFORE THE SAME ARE DISMISSED AS NOT PRESSED. 3. AS REGARDS GROUND NO.1 COMPRISING OF SUB GROUNDS (A) (B) & (C) THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) HAS WRONGLY CONFIRMED THE DISALLOWANCE OF INTEREST AMOUNTING TO RS.6 84 639/- WHICH IN FACT WAS A BANK INTEREST PAID BY THE AS SESSEE ON CAR LOAN AND IN THIS RESPECT OUR ATTENTION WAS INVITED TO PARA 3 OF THE ASSESSMENT ORDER WHEREIN THE AO HAD NOTED THIS AMOUNT AS BANK INTEREST ON CAR LOAN. 4. THE LD. AR SUBMITTED THAT THE AO HAD DISALLOWED THIS AMOUNT HOLDING THAT THE ASSESSEE HAD INVESTED A SUM OF RS .12 53 78 389/- AS INVESTMENT IN SISTER CONCERN NAMELY M/S. A.K.M. ENTERPRISES PVT. LTD. IT WAS SUBMITTED THAT THE AO HAD RELIED UPON THE J UDGMENT OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. ABHISHEK INDUSTRIES LTD. 286 ITR 1. THE LD. AR FURTHER SUBM ITTED THAT THE LD. ITA NOS. 354 & 518/ASR/2014 A.Y. 2010-11 4 CIT(A) HAS ALSO CONFIRMED THE ADDITION BY FOLLOWING THE JUDGMENT OF ABHISHEK INDUSTRIES LTD. (SUPRA). THE LD. AR FURTHE R SUBMITTED THAT THE ISSUE IN DISPUTE IS NOW SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF THE HONBLE PUNJAB & HARYANA HIGH C OURT IN THE CASE OF ASSESSEE ITSELF AS REPORTED IN 381 ITR 107 AND WHI CH HAS BEEN FOLLOWED BY THE ITAT IN MANY CASES IN THE GROUP CASES INCL UDING IN MBD PRINTOGRAPHICS PVT. LTD. AND HOLY FAITH INTERNATION AL PVT. LTD. WHEREIN IT HAS BEEN HELD THAT IF THE ASSESSEE HAD MADE INTERES T FREE ADVANCES FROM INTEREST FREE ADVANCES THEN NO DISALLOWANCE OF IN TEREST CAN BE MADE. THE LD. AR SUBMITTED THAT THE ISSUE IS ALSO COVERED BY THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF HERO CYCLES LT D. WHEREIN HONBLE THE SUPREME COURT HAS HELD THAT IF THERE WERE INTE REST FREE FUNDS AVAILABLE WITH THE ASSESSEE WHICH WERE MORE THAN TH E AMOUNT INVESTED NO DISALLOWANCE CAN BE MADE UNDER SECTION 36(1)(III ) OF THE ACT. THE LD. AR IN THIS RESPECT FILE A COPY OF BALANCE SHEET OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION AND INVITED OUR ATTENTION TO TH E SHAREHOLDERS CAPITAL AND RESERVES AND SURPLUS WHICH AMOUNTED TO RS.116.50 CRORES. THE LD. AR SUBMITTED THAT THE AMOUNT OF INVESTMENT AS NOTED IN THE ASSESSMENT ORDER AND AS IN THE BALANCE SHEET IS ONL Y RS.12.53 CRORES WHICH ARE MUCH LESS THAN THE INTEREST FREE FUNDS AV AILABLE WITH THE ASSESSEE. IN VIEW OF THE ABOVE IT WAS SUBMITTED TH AT NO DISALLOWANCE SHOULD HAVE BEEN MADE UNDER SECTION 36(1)(III) OF T HE ACT. ITA NOS. 354 & 518/ASR/2014 A.Y. 2010-11 5 5. AS REGARDS GROUND NO.2 REGARDING AD-HOC DISALLO WANCE OF EXPENDITURE @ 10% UNDER THE HEAD MAGAZINES AND JOU RNALS THE LD. AR SUBMITTED THAT THIS ISSUE IS ALSO COVERED IN FAVOU R OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 2012-13 DATED 27.06.2016 PASSED IN ITA NO.126/ASR/2015 IN ASSESS EES OWN CASE. THE LD. AR SUBMITTED THAT THE TRIBUNAL HAS DELETED THI S ADDITION AND IN THIS RESPECT INVITED OUR ATTENTION TO PARA 7 & 8 OF THE SAID ORDER OF TRIBUNAL PLACED AT APB 33-34. 6. THE LD. DR ON THE OTHER HAND RELIED UPON THE O RDERS OF THE AUTHORITIES BELOW. 7. ARGUING THE REVENUES APPEAL THE LD. DR AGAIN R ELIED UPON THE ORDER OF THE ASSESSING OFFICER WHEREAS THE LD. COU NSEL SUBMITTED THAT IN THE PRESENT YEAR THE GRATUITY AMOUNT WAS NOT AT AL L DEBITED IN THE PROFIT & LOSS ACCOUNT AND INVITED OUR ATTENTION TO PARA 9 OF THE LD. CIT(A)S ORDER WHERE THE LD. CIT(A) WHILE DELETING THE ADDI TION HAS MADE CATEGORICAL FINDINGS IN THIS RESPECT. 8. WE HAVE HEARD THE RIVAL PARTIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. FIRST WE TAKE UP APPEAL FILED BY THE ASSESSEE. AS REGARDS THE FIRST ISSUE WITH REGARD TO DISALLOWANCE OF INTEREST AMOUNTING TO RS.6 84 639/- WE FIND THAT THE ASSESSEE HAS PAI D THIS AMOUNT OF INTEREST ON THE CAR LOAN OBTAINED BY IT WHICH FACT HAS BEEN NOTED BY THE AO HIMSELF. WE FURTHER FIND THAT THE ASSESSEE HAD INTEREST FREE FUNDS AVAILABLE IN THE FORM OF SHAREHOLDERS CAPITAL RESE RVE AND SURPLUS TO THE ITA NOS. 354 & 518/ASR/2014 A.Y. 2010-11 6 EXTENT OF RS.116.50 CRORES WHEREAS INVESTMENT HAS BEEN TO THE EXTENT OF RS.12.53 CRORES WHICH IS MUCH LESS THAN THE INTERE ST FREE FUNDS AVAILABLE WITH THE ASSESSEE. THE AUTHORITIES BELOW HAS RELIED UPON THE CASE LAW OF M/S. ABHISHEK INDUSTRIES LTD WHILE MAK ING AND UPHOLDING THE ADDITION WHEREAS THE HONBLE SUPREME COURT IN THE CASE OF HERO CYCLES PVT. LTD. VS. CIT REPORTED IN 379 ITR 347 HAS HELD THAT WHERE THE ASSESSEE HAD SURPLUS INTEREST FREE FUNDS MORE THAN THE INTEREST FREE INVESTMENTS/ADVANCES NO DISALLOWANCE CAN BE MADE U /S 36(1)(III) OF THE ACT. THE FINDINGS OF THE HONBLE SUPREME COURT ARE REPRODUCED BELOW: COMPANY HAD RESERVE/SURPLUS TO THE TUNE OF ALMOST 15 CRORES AD THEREFORE ASSESSEE COMPANY COULD IN ANY CASE UTI LIZE THOSE FUNDS FOR GIVING ADVANCE TO ITS DIRECTORS ORDER OF THE HIGH COURT SET ASIDE AND ORDER OF THE ITAT WAS RESTORED APPEAL AL LOWED. ASSESSEE HAD A CREDIT BALANCE IN THE BANK ACCOUNT WHEN THE SAID ADVANCE OF RS.34 LAKHS WAS GIVEN. COMPANY HAD RESERVE/SURPLUS TO THE TUNE OF RS.15 CRORES AND TH EREFORE THE ASSESSEE COMPANY COULD IN ANY CASE UTILIZE THOSE F UNDS FOR GIVING ADVANCE TO ITS DIRECTORS. FURTHER WE FIND THAT IN THE GROUP COMPANIES OF TH E ASSESSEE I.E. IN MBD PRINTOGRAPHICS PVT. LTD. AND IN HOLY FAITH I NTERNATIONAL PVT. LTD. THE TRIBUNAL HAS ALREADY DELETED SIMILAR DISALLOWAN CE. THE RELEVANT ORDERS OF THE TRIBUNAL ARE PLACED AT PAGES 1 TO 27 OF THE PAPER BOOK. 9. UNDOUBTEDLY THE INTEREST FREE FUNDS AS MENTIONE D ABOVE WHICH ARE MORE THAN THE INTEREST FREE INVESTMENTS THEREF ORE RESPECTFULLY FOLLOWING THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF HERO CYCLES PVT. LTD. (SUPRA) NO DISALLOWANCE WAS WARRA NTED UNDER SECTION ITA NOS. 354 & 518/ASR/2014 A.Y. 2010-11 7 36(1)(III) OF THE ACT. IN VIEW OF THE ABOVE DISCUSS ION GROUND NO.1 OF THE APPEAL IS ALLOWED. 10. NOW COMING TO GROUND NO.2 WE FIND THAT IN TH E ASSESSMENT YEAR 2012-13 IN THE CASE OF THE ASSESSEE ITSELF THE AO HAD MADE SIMILAR DISALLOWANCE OF 10% OF EXPENSES ON PURCHASE OF MAG AZINES AND JOURNALS. THE FINDINGS OF THE AO IN PARA 3.2 OF THE ORDER ARE REPRODUCED BELOW: 3.2 I HAVE GONE THROUGH FACTS OF THE CASE AND REPL Y OF THE ASSESSEE. IT IS NOTICED THAT A SIMILAR ISSUE HAS BE EN RAISED DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE ASSESSE ES CASE FOR THE A.Y. 2010-11 AND IT WAS FOUND THAT IN THE ABSENCE O F JUSTIFICATION FOR THE HUGE NUMBERS OF THE MAGAZINES PURCHASED RATE C HARGED PURCHASES MADE FROM RELATED PARTY NO CORRELATION W ITH THE SALE OF RADDI/WASTE ETC. THE EXPENSES WERE TREATED AS UNJU STIFIED EXCESSIVE AND UNREASONABLE AND THEREFORE 10% OF THE EXPENSES WERE DISALLOWED. IT IS NOTICED THAT SIMILAR IS THE POSITION IN THE CURRENT YEAR ALSO. THE ASSESSEE COULD NOT JUSTIFY H OW THE RATE OF RS. 210 PER COPY HAS BEEN DETERMINED AND HOW THE MONTHL Y CONSUMPTION OF MORE THAN 20000 COPIES (OF ALL TYPES OF MAGAZINES) COULD BE JUSTIFIED. THEREFORE KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE 10% OF THE EXPENSES ON P URCHASE OF MAGAZINES AT RS. 60 84 080/- ARE HELD AS EXCESSIVE AND UNREASONABLE U/S 40A(2)(A) OF THE ACT DISALLOWED A ND ADDED TO THE TOTAL INCOME TO THE ASSESSEE. PENALTY PROCEEDINGS U /S 271(L)(C) OF THE ACT HAVE BEEN INITIATED SEPARATELY FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 11. WE FIND THAT THE TRIBUNAL HAS DELETED THIS ADDI TION VIDE ORDER DATED 27.06.2016 PASSED IN ITA NO.126(ASR)/2015 IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2012-13 AND THE RELEVA NT FINDINGS OF THE TRIBUNAL FOR THE SAKE OF CONVENIENCE ARE REPRODUCED AS UNDER: 7. THE LD. CIT(A) OBSERVED THAT THE PURCHASE OF MA GAZINES AND JOURNALS HAS BEEN MADE BY THE ASSESSEE FROM ITS SIS TER CONCERN BUT ITA NOS. 354 & 518/ASR/2014 A.Y. 2010-11 8 NO DESCRIPTION THEREOF HAD BEEN BROUGHT ON RECORD NOR ANY COMPARATIVE CASE HAS BEEN CITED. THE LD. CIT(A) CON CLUDED THAT AS SUCH THE DISALLOWANCES WERE REASONABLE. THE STAND OF THE ASSESSEE ON THE OTHER HAND IS THAT SINCE IT WAS NEW IN ITS BUSINESS OF HOTELEERING IT ADOPTED AN AGGRESSIVE M ARKETING STRATEGY THEREBY INCURRING EXPENSES INTER-ALIA BUYING MAGAZINES AND JOURNALS IN ORDER TO SERVE CUSTOMERS AS A GEN UINE LEGITIMATE BUSINESS INCOME. THIS HAS NOT BEEN DISPUTED BY THE AUTHORITIES BELOW. AT THE SAME TIME THE FACTUM OF PAYMENTS HAV ING BEEN MADE BY THE ASSESSEE TO ITS SISTER CONCERN A PART OF WH OSE INCOME IS TAXED AT A LOWER RATE UNDER SECTION 80IB ALSO REMA INS UNCHALLENGED. FURTHER IT IS ALSO TRUE THAT THE AO DID NOT BRING ANYTHING ON RECORD TO SUPPORT HIS CONCLUSION THAT THE EXPENDITURE WAS EXCESSIVE. MOREOVER SIMILAR EXPENDITURE IN THE EARLIER YEAR HAS NOT BEEN SUBJECTED TO DISALLOWANCE. THE BOOKS MAINT AINED BY THE ASSESSEE ARE AUDITED. NO DEFECTS WERE FOUND CONTAIN ED THEREIN. THE DISALLOWANCE THUS AMOUNTS TO AN AD-HOC DISALLOWAN CE WHICH IS IMPERMISSIBLE IN LAW AS HELD IN THE FOLLOWING DECI SIONS: I) SEASONS CATERING SERVICES (P) LTD. VS. DCIT 1 34 TTJ 554 (DEL. TRIB.) II) VIJAY INFRASTRUCTURE LTD VS. ACIT ITA NO.254 /LKW/2015 ITAT LUCKNOW BENCH. III) ACIT VS. M/S. MANGARO INDUSTRIES (REGD) ITA NO.983/CHD/2013 ITAT CHANDIGARH BENCH. IV) CIT VS. MODI XEROX LTD. 344 ITR 411 (ALL.) V) ARADHANA BEVERAGES & FOODS CO. (P) LTD. VS. DCI T 51 SOT 426 (DEL. TRIB.) VI) ACIT VS. ASHOK J PATEL 59 SOT 53 (AHD. TRIB.) 8. IN VIEW OF THE ABOVE FINDING IT TO BE UNSUSTAIN ABLE THE DISALLOWANCE MADE IS DELETED. GROUND NOS. 1 & 2 ARE ACCEPTED. 12. THUS RESPECTFULLY FOLLOWING THE ORDER OF THE T RIBUNAL WE DELETE THE AD-HOC ADDITION MADE BY THE AO OF RS.92 92 170/-. IN VIEW OF THE ABOVE GROUND NO.2 OF THE ASSESSEE IS ALLOWED. 13. GROUND NOS.3 & 4 HAS ALREADY BEEN DISMISSED AS NOT PRESSED. ITA NOS. 354 & 518/ASR/2014 A.Y. 2010-11 9 14. GROUND NOS. 5 & 6 ARE GENERAL IN NATURE AND THE REFORE DO NOT REQUIRE ANY ADJUDICATION. 15. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. 16. NOW COMING TO THE APPEAL FILED BY THE REVENUE WE FIND THAT THE LD. CIT(A) HAS NOTED IN HIS ORDER THAT THE AO HAS N OT DEBITED ANY EXPENDITURE ON ACCOUNT OF GRATUITY IN THE PROFIT & LOSS ACCOUNT. FOR THE SAKE OF CONVENIENCE THE FINDINGS OF THE LD. CIT(A) AS CONTAINED IN PARA 9 ARE REPRODUCED BELOW: 9. I HAVE CONSIDERED THE FACTS OF THE CASE THE BASIS OF DISALLOWANCE MADE BY THE ASSESSING OFFICER AND THE ARGUMENTS OF THE AR ON THE ISSUE DURING ASSESSMENT AS WELL AS APPELLATE PROCEEDINGS. IT IS VERY DEAR THAT THE IMPUGNED BALANCE OF GRATUITY PAYABLE AMOUNT TO RS.14 94 648/ - HAD BEEN CREATED IN THE ASSESSMENT YEAR 2008-09 AND THE SAME HAD BEEN ADDED BACK IN THE COMPUTATION FOR THE SAID ASS ESSMENT YEAR. IT FURTHER SEEMS THAT THE CURRENT BALANCE IS ONLY A BROUGHT FORWARD BALANCE AND NO SUCH PROVISION HAD BEEN CREA TED DURING THE YEAR UNDER CONSIDERATION WHICH MEANT THA T NO SUCH DEBIT HAD BEEN AFFECTED IN THE PROFIT & LOSS ACCOUN T FOR THE YEAR UNDER CONSIDERATION. THIS BEING SO THERE IS N O PROVISION OF ADDING BACK SUCH AN AMOUNT TO NEUTRALIZE ITS EFF ECT. THE ACTION OF THE ASSESSING OFFICER IS CONTRARY TO THE ACCOUNTING PRINCIPLE INVOLVED AS THERE IS NO DEBIT OF SUCH AMOUNT. IN THE CIRCUMSTANCES THE ADDITION MAD E BY THE ASSESSING OFFICER IS THEREFORE DIRECTED TO BE DEL ETED. 17. WE FIND THAT THE LD. CIT(A) HAS MADE CATEGORICA L FINDINGS THAT THE GRATUITY PAYABLE RELATED TO THE ASSESSMENT YEAR 200 8-09 AND THE SAME WAS ADDED IN THE COMPUTATION FOR THE SAID ASSESSME NT YEAR. THE LD. CIT(A) HAS FURTHER GIVEN FINDING OF FACT THAT THE C URRENT BALANCE IS ONLY A BROUGHT FORWARD BALANCE AND NO SUCH PROVISION HAD B EEN CREATED DURING THE YEAR UNDER CONSIDERATION WHICH MEANT THAT NO SU CH DEBIT HAD BEEN ITA NOS. 354 & 518/ASR/2014 A.Y. 2010-11 10 AFFECTED IN THE PROFIT & LOSS ACCOUNT. THE LD. DR W AS NOT ABLE TO CONTROVERT ANY OF THE FINDINGS OF THE LD. CIT(A). I N VIEW OF THE ABOVE DISCUSSION WE DO NOT FIND ANY INFIRMITY IN THE ORD ER OF THE LD. CIT(A) AND THEREFORE THE APPEAL OF THE REVENUE IS DISMISSED. 18. IN NUTSHELL THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED AND THAT OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/10/20 16. SD/- SD/- (N.K. CHOUDHRY) (T.S. KAPOOR ) JUDICIAL MEMBER ACCOUNTANT MEMBER /SKR/ DATED: 28/10/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. BRIGHT ENTERPRISES JALANDHAR. 2. THE DCIT CC-II JALANDHAR. 3. THE CIT(A) JALANDHAR 4. THE CIT JALANDHAR. 5. THE SR DR ITAT AMRITSAR. TRUE COPY BY ORDER INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR.