ITO, Yamunanagar v. Sh. Parmod Kumar, Jagadhari

ITA 361/CHANDI/2011 | 2007-2008
Pronouncement Date: 19-03-2011 | Result: Dismissed

Appeal Details

RSA Number 36121514 RSA 2011
Assessee PAN ADSPK5260D
Bench Chandigarh
Appeal Number ITA 361/CHANDI/2011
Appellant ITO, Yamunanagar
Respondent Sh. Parmod Kumar, Jagadhari
Appeal Type Income Tax Appeal
Pronouncement Date 19-03-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 19-03-2011
Date Of Final Hearing 21-02-2012
Next Hearing Date 21-02-2012
Assessment Year 2007-2008
Appeal Filed On 07-04-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI H.L.KARWA HON'BLE VICE PRESIDENT AND SHRI MEHAR SINGH ACCOUNTANT MEMBER ITA NO. 264/CHD/2011 ASSESSMENT YEAR: 2007-08 SHRI PRAMOD KUMAR VS THE JCIT PROP. M/S SHRI LAJJA RICE & YAMUNANAGAR OIL MILLS JAGADHRI PAN NO. ADSPK5260D & ITA NO. 361/CHD/2011 ASSESSMENT YEAR: 2007-08 THE ITO WARD-1 VS SHRI PRAMOD KUMAR YAMUNANAGAR PROP. M/S SHRI LAJJA RICE & OIL MILLS JAGADHRI PAN NO. ADSPK5260D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K.MUKHI RESPONDENT BY : SMT. JAISHREE SHARMA DATE OF HEARING : 21.02.2012 DATE OF PRONOUNCEMENT : 19.03.2012 ORDER PER MEHAR SINGH AM THESE APPEALS FILED BY THE ASSESSEE AND REVENUE ARE DIRECTED AGAINST THE ORDER OF CIT(A) PANCHKULA DATED 31.1.2011 RELA TING TO ASSESSMENT YEAR 2007-08 PASSED U/S 143(3) OF THE INCOME-TAX ACT 196 1 (IN SHORT 'THE ACT'). 2 2. FIRSTLY WE SHALL DEAL WITH APPEAL OF THE ASSESS EE IN ITA NO. 264/CHD/2011. 3. THE GROUND NO.1 IS GENERAL IN NATURE AND HENCE N EEDS NO ADJUDICATION THEREFORE THE SAME IS DISMISSED. 4. GROUND NO.2 RAISED BY THE ASSESSEE IS AS UNDER:- 2. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN UPHOLDING T HE ORDER OF ASSESSING OFFICER REJECTING DULY AUDITED B OOKS OF ACCOUNT ON THE BASIS OF CONJECTURES AND SURMISES IGNORING GROUND REALITIES AND BY ERRONEOUSLY INVOKI NG THE PROVISIONS OF SECTION 145(3) OF THE INCOME TAX ACT 1961. 5. THE ASSESSEE VIDE GROUND NO.2 OF THE APPEAL CONT ENDED THAT CIT(A) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFF ICER U/S 145(3) OF THE ACT. 6. WE HAVE CAREFULLY PERUSED THE FACTS OF THE CASE RELEVANT RECORDS AND HAVE HEARD RIVAL SUBMISSIONS IN THIS CASE. THE AS SESSEE CONTENDED THAT BOOKS OF ACCOUNT WERE AUDITED AND THE ASSESSING OFF ICER FAILED TO PIN POINT THE SPECIFIC DEFECTS IN THE BOOKS OF ACCOUNT HENCE THE BOOKS OF ACCOUNT CAN NOT BE REJECTED. SIMILARLY LD. DR CONTENDED THAT REJECTION OF BOOKS OF ACCOUNT IS JUSTIFIED IN VIEW OF THE DEFECTS POINTED OUT BY THE ASSESSING OFFICER IN PARA 3 OF THE ASSESSMENT ORDER DATED 18. 11.2009 FOR THE ASSESSMENT YEAR 2007-08. THE ASSESSING OFFICER PO INTED OUT THE FOLLOWING DEFECTS:- 3 A) THE ASSESSEE HAS UNDERREPORTED YIELD OF RICE @ 65.1 9% AS AGAINST 67% GIVEN TO FCI PARA 4 B) THE ASSESSEE HAS TRANSFERRED RICE SUPERFINE TO FCI AT 289.28 QTLS FROM OWN STOCK PARA 4 C) THE ASSESSEE HAS UNDERREPORTED PADDY MILLING PARA 6 D) THE ASSESSEE HAS UNDERREPORTED SALES OF HUSK ACCOR DING TO PREVALENT YIELD PERCENTAGE PARA 7\ E) THE ASSESSEE HAS UNDERVALUED THE CLOSING STOCK OF B ARDANA PARA 8 7. THE RELEVANT FINDINGS OF THE LD. CIT(A) ARE REPR ODUCED HERE-IN-UNDER FOR THE PURPOSE OF PROPER APPRECIATION OF THE FACTS AND THE FINDINGS OF THE CIT(A). I.II) I HAVE CAREFULLY CONSIDERED THE SUBMISSION M ADE BY THE APPELLANT AND FIND NO MERIT IN THE SAME. IT IS SEEN THAT THE APPELLANT HAS NOT BEEN ABLE TO EXPLAIN THE DIFFEREN CE IN YIELD OF RICE SHOWN WITH REGARD TO OWN PADDY AND GOVT. PA DDY IT APPEARS THAT THE APPELLANT IS NOT KEEPING SEPARATE RECORD OF THE GOVT. PADDY MILLED AND OWN PADDY MILLED. THE AP PELLANT HAS NOT BEEN ABLE TO JUSTIFY THE DISPROPORTIONATE I NCREASE IN THE MANUFACTURING EXPENSES. THE APPELLANT'S SUBMISS ION WITH REGARD TO TRANSFER OF RICE SUPERFINE FROM OWN ACCOU NT TO GOVT ACCOUNT IS NOT CONVINCING. IN VIEW OF THESE F ACTS AND OTHER DISCREPANCIES POINTED OUT BY THE AO IN RICE B RAN ACCOUNT RICE HUSK ACCOUNT AND BARDANA ACCOUNT WHIC H THE APPELLANT HAS NOT BEEN ABLE TO EXPLAIN SATISFACTORI LY. THE ASSESSING OFFICER IS JUSTIFIED TO REJECT THE BOOK R ESULT OF THE APPELLANT. THE ASSESSING OFFICERS ACTION IN THIS REGARD IS 4 UPHELD. THE CONTENTION OF THE APPELLANT IS THEREFO RE REJECTED. 8. HAVING REGARD TO THE ABOVE DISCUSSIONS WE DO NO T FIND ANY GROUND TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). CON SEQUENTLY THE FINDINGS OF THE LD. CIT(A) IS UPHELD AND GROUND RAISED BY THE A SSESSEE IS DISMISSED. 9. GROUND NO.3 RAISED BY THE ASSESSEE IS AS UNDER:- (A) THAT THE LD. CIT(A) IS NOT JUSTIFIED IN UPHOL DING THE ACTION OF THE ASSESSING OFFICER IN CONFIRMING ADDIT ION OF RS. 6 05 766/- ON ACCOUNT OF LOW YIELD OF RICE AND RESULTANTLY HOLDING IT TO BE UNACCOUNTED SALES WHIC H IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE AND IS BASED ON CONJECTURES AND SURMISES. (B) THAT WITHOUT PREJUDICE TO ABOVE THE APPELLANT DISPUTES QUANTUM OF ADDITION AS HIGHLY EXCESSIVE. 10. IN GROUND NO.3 THE ASSESSEE CONTENDED THAT CI T(A) IS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 6 05 766/- ON ACC OUNT OF LOW YIELD OF RICE AND RESULTANTLY HOLDING IT TO BE UNACCOUNTED SALES. 11. THE ASSESSING OFFICER MADE AN ADDITION OF RS. 6 05 766/- ON ACCOUNT OF UNACCOUNTED SALES. THE FINDINGS OF THE ASSESSING OFFICER ARE CONTAINED IN PARA 4.2 OF THE ASSESSMENT ORDER. WE HAVE CONSIDE RED THE RIVAL SUBMISSIONS FACTS OF THE CASE AND RELEVANT RECORDS . THE DETAILED FINDINGS OF THE LD. CIT(A) IS CONTAINED IN PARA (II.II) OF HER ORDER WHICH IS REPRODUCED HEREWITH:- 5 II.II) I HAVE CAREFULLY CONSIDERED THE SUBMISSION MADE BY THE APPELLANT AND THE FACTS OF THE CASE IT IS OBSE RVED THAT THE APPELLANT HAS WORKED OUT THE YIELD OF RICE AFTER TA KING INTO ACCOUNT BROKEN AND NAKKU RICE WHILE THE AO HAS NOT TAKEN THE SAME INTO ACCOUNT DUE TO WHICH THE DIFFERENCE I N YIELD AS CALCULATED BY THE ASSESSING OFFICER AND AS CALCULAT ED BY THE APPELLANT HAS ARISEN. THE CONTENTION OF THE APPELLA NT THAT NAKKU RICE OBTAINED IS TO BE INCLUDED IN YIELD IS N OT CORRECT. IT IS EVIDENT FROM THE VERY FACT THE APPELLANT HIMSELF WITH REGARD TO THE ADDITION ON ACCOUNT OF R ICE TRANSFERRED TO CMR ACCOUNT HAS STATED THAT THE SAME CAN BE TAKEN AS EXCHANGE OF RICE WITH BROKEN AND NAKKU RIC E. THEREFORE THE YIELD OF RICE AS GIVEN TO GOVT. AND AS ACCEPTED CONSIST OF RICE EXCLUDING NAKKU AND BROKEN RICE. TH EREFORE THE APPELLANT'S CONTENTION THAT THE YIELD SHOWN BY THE APPELLANT IS 66.59% IS NOT CORRECT. THE YIELD WORKE D OUT BY THE AO AT 65.19% IS CORRECT. NOW COMING TO THE REAS ON OF THE DIFFERENCE IN THE YIELD AS DELIVERED TO FCI AND AS REFLECTED IN THE BOOKS OF ACCOUNT THE APPELLANT HA S NO PLAUSIBLE REASON AS AS PER THE APPELLANT THERE IS NO DIFFERENCE. THE APPELLANT HAS ONLY JUSTIFIED DELIVE RY OF RICE TO GOVT. SHOWING 67% YIELD THOUGH THE ACTUAL YIELD IS 65.19% BY STATING THAT AFTER TAKING INTO ACCOUNT TH E DRIAGE ALLOWANCE OF 1% THE ACTUAL YIELD DELIVERED COMES T O 66.33%. THE APPELLANT HAS ALSO STATED THAT THE DE FICIENCY IS MET BY TRANSFERRING RICE FROM OWN PADDY MILLED. THE SE SUBMISSIONS IN NO WAY EXPLAIN THE LOW YIELD OF RICE . THEREFORE THE ACTION OF THE AO IN ADOPTING THE YIE LD OF RICE AT 67% OF THE PADDY MILLED IS UPHELD. THE CONSEQUE NT ADDITION OF FTS.6 05 766/- MADE ON THIS ACCOUNT IS UPHELD. 6 12. THE ASSESSEE-APPELLANT WORKED OUT THE YIELD OF RICE AFTER TAKING INTO ACCOUNT THE BROKEN AND NAKKU RICE WHEREAS THE ASSES SING OFFICER HAS NOT TAKEN THE SAME INTO ACCOUNT DUE TO THE DIFFERENCE I N THE YIELD AS COMPUTED BY THE ASSESSING OFFICER AND AS CALCULATED BY THE A PPELLANT AS OBSERVED BY THE CIT(A). THE CIT(A) OBSERVED THAT THE CONTENTIO N OF THE ASSESSEE THAT NAKKU RICE OBTAINED IS TO BE INCLUDED IN THE YIELD IS NOT CORRECT. THE YIELD WORKED OUT BY THE ASSESSING OFFICER AT 65.19 IS COR RECT WHEREAS THE CONTENTION OF THE APPELLANT THAT YIELD SHOWN BY HIM AT 66.59% IS NOT CORRECT. IN VIEW OF THE DETAILED DISCUSSION BY THE CIT(A) THE ACTION OF THE ASSESSING OFFICER IN ADOPTING THE YIELD OF THE RICE AT 67% OF THE PADDY MILLED WAS UPHELD AND CONSEQUENT ADDITION WAS MADE. HAVING REGARD TO THE FACT SITUATION OF THE CASE WE DO NOT FIND ANY MERI T IN THE GROUND OF THE APPEAL AND THE SAME IS DISMISSED. 13. GROUND NO.4 RAISED BY THE ASSESSEE IS AS UNDER: - 4. A) THAT THE LD. CIT(A) IS NOT JUSTIFIED IN UPHOLDI NG THE ORDER OF ASSESSING OFFICER BY GIVING ONLY PARTI AL RELIEF TAKING YIELD OF RICE BRAN @ 8.96% INSTEAD OF 9.14% DECLARED BY THE ASSESSEE-APPELLANT. B) THAT WITHOUT PREJUDICE TO ABOVE THE APPELLANT DISPUTES QUANTUM OF ADDITION CONFIRMED AS HIGHLY EXCESSIVE. 14. WE HAVE CAREFULLY PERUSED THE FACTS OF THE CASE RELEVANT RECORDS AND HAVE HEARD RIVAL SUBMISSIONS IN THIS CASE. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD SHOWN 7 TRF CMR AT 289.325 QUINTALS. ON BEING QUESTIONED IT WAS EXPLAINED THAT THE SAME IS ON ACCOUNT OF SHORTAGE ETC. DURING THE PROCESS OF CUSTOM MILLING. THE ASSESSEE SUBMITTED THAT IT HAS TO SU PPLY 67% RICE TO GOVT. AGAINST THE PADDY SUPPLIED BY THE GOVT. FOR CUSTOM MILLING. SINCE THE PRODUCTION OF RICE DOES NOT COME TO 67% AS STATED A BOVE HENCE THE ASSESSEE HAD TRANSFERRED CMR 286.25 QTLS TO SUPPLY THE STIPULATED YIELD OF RICE 67% TO GOVT. AGENCIES. THE ASSESSING OFFICER HOWEVER REJECTED THE APPELLANT'S SUBMISSION STATING THAT TH E SAME IS UNSUPPORTED BY FACTS. IT WAS OBSERVED THAT THE APPELLANT RECEIVED RS.3 37 254/- AS MILLING CHARGES FROM FCI AGAINST WHICH THE PROPORTIONATE MA NUFACTURING EXPENSES COMES TO RS.11 74 608/- WHICH AS PER THE AO IS UNBE LIEVABLE. FURTHER THE APPELLANT'S CONTENTION THAT IT TRANSFERRED 289.25 Q UINTALS OF RICE TO COMPENSATE THE SHORTFALL TO GOVT. SUPPLY IS ALLL TH E MORE NOT ACCEPTABLE. THEREFORE THE AO TREATED THE SAME AS UNACCOUNTED S ALES AND ADDED BACK AN AMOUNT RS.3 03 828/- APPLYING A RATE OF RS.1050.40 PER QUINTAL. 15. BEFORE THE CIT(A) THE ASSESSEE STATED THAT HE DELIVERED OWN RICE SO AS TO MEET THE 67% YIELD REQUIREMENT OF THE GOVERNM ENT. THE ASSESSEE IN RETURNED GOT THE BROKEN RICE PRODUCED OUT OF GOVERN MENT MILLING OF PADDY EQUIVALENT TO 224.35 QUINTALS DRIAGE ALLOWANCE OF RS. 87 500/- EQUIVALENT TO 159.84 QUNITALS OF PADDY. THEREFORE AS PER THE ASSESSEE THE TRANSFER IS GENUINE AND IT CAN BE TREATED AS EXCHANGE OF RICE F OR VALUE OF PADDY RECEIVED AS DRIAGE ALLOWANCE AND VALUE OF BROKEN RI CE PRODUCED OUT OF CMR PADDY. THE ASSESSING OFFICER IN THE REMAND REPO RT HAS REITERATED THE 8 OBSERVATIONS MADE IN THE ASSESSMENT ORDER. THE FIN DINGS OF THE LD. CIT(A) IN PARA (III.II) AT PAGE 9 OF THE ASSESSMENT ORDER ARE AS UNDER:- III.II) I HAVE CAREFULLY CONSIDERED THE SUBMISSION MADE BY THE APPELLANT AND THE FACTS OF THE CASE. THERE IS NO ME RIT IN APPELLANT'S SUBMISSION THAT THE AMOUNT TRANSFERRED OUT OF OWN RICE TO GOVT. RICE TO MEET THE YIELD REQUIREMENT OF THE GOVT. PADDY MILLED MAY BE TREATED AS EXCHANGE OF SUPERFIN E RICE WITH NAKKU AND DRIAGE ALLOWANCE IS NOT ACCEPTED. THE AP PELLANT WOULD HAVE RECEIVED NAKKU AND DRIAGE ALLOWANCE IN A NY CASE WITH REGARD TO THE PADDY MILLED BY HIM. HOWEVER IN VIEW OF THE FACT THAT THE YIELD OF RICE BOTH FOR GOVT. AND OWN PADDY HAS BEEN TAKEN AT 67% AND AN EQUIVALENT ADDITION ON THAT ACC OUNT HAS ALREADY BEEN MADE AND UPHELD IT IS FELT THAT NO SE PARATE ADDITION ON THIS ACCOUNT IS JUSTIFIED. ONCE THE YI ELD HAS BEEN TAKEN AS 67% THAN THE EVENTUALITY OF ANY SHORTFALL AND CONSEQUENT TRANSFER OF RICE FROM OWN PADDY MILLED T O GOVT. PADDY MILLED DOES NOT ARISE. THEREFORE THE ADDITIO N MADE ON THIS ACCOUNT IS DELETED. 16 . HAVING REGARD TO THE FACT SITUATION OF THE PRESENT CASE AND THE FINDINGS OF THE CIT(A) AND SUBMISSIONS OF THE ASSE SSEE-APPELLANT WE DO NOT FIND ANY MERIT IN THE CONTENTIONS OF THE ASSESS EE AND HENCE FINDINGS OF THE CIT(A) IS UPHELD. THUS THE GROUND OF APPEAL RA ISED BY THE ASSESSEE IS DISMISSED. 17. THE GROUND NO.5 OF THE APPEAL READS AS UNDER:- 5. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN UPHOLDING THE ORDER OF THE ASSESSING OFFICER IN CONFIRMING THE 9 ADDITION OF RS. 2 54 688/- AS AGAINST RS. 6 41 282/ - AS ADDED BY ASSESSING OFFICER ON ACCOUNT OF SALE OF HU SK BY ESTIMATING THE YIELD OF HUSK AT 15% THOUGH REDUCING THE SALE PRICE AT RS. 100/- AS AGAINST RS. 150/- APPLIED BY THE ASSESSING OFFICER WHICH IS BA SED ON SURMISES AND CONJECTURES. 18. IN GROUND NO.5 THE ASSESSEE CONTENDED THAT CI T(A) IS NOT JUSTIFIED IN UPHOLDING THE ORDER OF ASSESSING OFFICER IN CONF IRMING THE ADDITION OF RS. 2 54 688/- AS AGAINST RS. 6 41 282/- ADDED BY T HE ASSESSING OFFICER ON ACCOUNT OF SALE OF HUSK BY ESTIMATING THE YIELD AT 15% THOUGH REDUCING THE SALE PRICE AT RS. 100/- AS AGAINST RS. 150/- APPLIE D BY THE ASSESSING OFFICER. 19. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE AS SESSING OFFICER NOTED THAT THE ASSESSEE HAD SHOWN SHORTAGE OF 6058.25 QUI NTALS WHICH WORKED OUT TO 12.64% WHICH WAS CONSTRUED BY THE ASSESSING OFFI CER AS ON THE HIGHER SIDE. THE ASSESSING OFFICER ALSO OBSERVED THAT QUA NTITATIVE DETAILS OF THE HUSK SOLD WAS PROVIDED BY THE ASSESSEE. THE ASSESS ING OFFICER AFFORDED AN OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THIS DISCREP ANCY IN THE YIELD OF HUSK. THE ASSESSEE FAILED TO SUBMIT ANY CREDIBLE AND COGE NT EVIDENCE BEFORE THE ASSESSING OFFICER AND HENCE ON THE BASIS OF COMPARA TIVE CHART OF PERCENTAGE OF YIELD OF RICE AND ITS BYE PRODUCTS T HE ASSESSING OFFICER MADE THE ADDITION OF RS. 6 41 282/-. THE LD. CIT(A ) AFTER CONSIDERING THE SUBMISSIONS MADE BEFORE HIM BY THE ASSESSEE UPHELD THE FINDINGS OF THE LD. ASSESSING OFFICER WHICH ARE REPRODUCED HERE-IN-UNDE R:- 10 V.II) I HAVE CAREFULLY CONSIDERED THE SUBMISSION M ADE BY THE APPELLANT AND THE FACTS OF THE CASE. THERE IS NO DI SPUTE ON THE FACT THAT THE APPELLANT HAS NOT GIVEN QUANTITATIVE DETAILS OF THE HUSK GENERATED AND SOLD NOR HAS HE GIVEN THE RATE A T WHICH THE SAME HAS BEEN SOLD. THEREFORE THE AO HAD NO OPTIO N BUT TO ESTIMATE THE QUANTITY OF THE HUSK GENERATED AND THE RATE AT WHICH IT IS SOLD. THE AO HAD TAKEN THE VALUE OF HUS K GENERATED AT 15% KEEPING IN VIEW THE INDUSTRY NORM OF 20%. T HEREFORE THE BASIS ADOPTED BY THE AO IS QUITE REASONABLE AND JUSTIFIED. HOWEVER AS REGARDS THE RATE IT IS SEEN THAT THE A O HAS BASED THE SAME ON THE RATE OF M/S KHURANA TIMBER SUPPLY C OMPANY WHICH IS A DEALER IN RICE HUSK AND THE RATES CANNOT BE COMPARED. THE APPELLANT HAS RELIED UPON THE ORDER OF THE ITO WARD-3 AMBALA IN THE CASE OF M/S BALJIT AGRO FOODS STATING THAT THE RATE OF HUSK DEPENDS UPON VARIOUS FACTORS. IT IS SEEN THAT IN THE CITED ORDER THE ASSESSEE HIMSELF HAS SH OWN THE SALE RATE AT RS.58.03 PER QUINTAL OF HUSK WHICH WAS ADOP TED BY THE AO FOR VALUING THE CLOSING STOCK. HOWEVER IN THE C ASE OF THE ASSESSEE NO SUCH DETAILS HAVE BEEN FILED. THEREFORE IN THE ABSENCE OF ANY SPECIFIC DETAILS IT WILL BE JUST IF THE SAME IS ADOPTED AT RS.100/- PER QUINTAL AND THE VALUE OF RI CE HUSK SOLD IS COMPUTED ACCORDINGLY WHICFI WILL COMES TO RS.7 7 3 188/- AS AGAINST RS. 5 18 500/- SHOWN BY THE APPELLANT. THE REFORE THE ADDITION MADE ON ACCOUNT OF UNACCOUNTED SALE OF HUS K IS REDUCED TO RS. 2 54 688/- 11 20. HAVING CAREFULLY GONE THROUGH THE FACTS OF THE CASE RIVAL SUBMISSIONS AND FINDINGS OF THE LD. CIT(A) WE DO N OT FIND ANY INFIRMITY THEREIN AND THE SAME ARE UPHELD. THE GROUND NO.5 O F THE ASSESSEE IS DISMISSED. 21. GROUND NO.6 OF THE APPEAL READS AS UNDER:- 6. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN UPHOLDI NG THE ORDER OF ASSESSING OFFICER BY ALLOWING PARTIAL RELI EF AND THEREBY CONFIRMING THE ADDITION OF RS. 56 318/- OUT OF RS. 84 477/- ADDED BY THE ASSESSING OFFICER ON THE BASI S OF VALUE OF CLOSING STOCK OF BARDANA WHICH IS AGAINST THE AC TUAL FACTS AND FIGURES SUBMITTED BY THE ASSESSEE / APPELLANT. 22. THE ASSESSEE CONTENDED THAT CIT(A) WAS NOT JUST IFIED IN UPHOLDING THE ORDER OF THE ASSESSING OFFICER BY ALLOWING PART IAL RELIEF AND CONSEQUENTLY CONFIRMED THE ADDITION OF RS. 56 318/- OUT OF RS. 84 477/- ADDED BY THE ASSESSING OFFICER ON THE BASIS OF VALU E OF CLOSING STOCK OF BARDANA. THE FINDINGS OF THE LD. CIT(A) ARE AS UNDE R:- VI.II) I HAVE CAREFULLY CONSIDERED THE SUBMISSION MADE BY THE APPELLANT AND FIND NO MERIT IN THE SAME. IT IS UNBELIEVABLE THAT THE APPELLANT HAS SOLD ALL NEW BA RDANA AND ONLY OLD BARDANA HAS BEEN KEPT IN THE CLOSING STOCK . THEREFORE THE APPELLANT'S CONTENTION IN THIS REGAR D IS REJECTED. IT IS HELD THAT THE CLOSING STOCK OF BARD ANA CONSISTED OF BOTH NEW AND OLD BARDANA THE AVERAGE RATE ADOPTED BY THE AO IN THIS REGARD IS HOWEVER REDUCED TO 12 RS.1L/- PER BAG AS AGAINST RS.12/- PER BEG. THE ADD ITION MADE ON THIS ACCOUNT IS ACCORDINGLY REDUCED TO RS.5 6 318/-. 23. HAVING REGARD TO THE FACTUAL MATRIX OF THE CASE FINDINGS OF THE ASSESSING OFFICER AND THE CIT(A) VIS-A-VIS SUBMISS IONS MADE BY THE PARTIES WE DO NOT SEE ANY MERIT IN THE GROUND OF A PPEAL AND WE UPHELD THE ORDER OF CIT(A) IN THIS REGARD. THE GROUND OF APPE AL RAISED BY THE ASSESSEE IS DISMISSED. 24. GROUND NO.7 OF THE APPEAL READS AS UNDER:- 7. A) THAT THE LD. CIT(A) IS NOT JUSTIFIED IN UPHOLDING THE ORDER OF ASSESSING OFFICER BY ESTIMATING THE ADHOC DISALLOWANCE @ 10% AS AGAINST 20% AS ADOPTED BY THE ASSESSING OFFICER WHICH IS AGAINST THE ACTUAL FACTS AND FIGURES SUBMITTED BY APPELLANT / ASSESSEE AND IS AN ADHOC DISALLOWANCE WITHOUT SPECIFICALLY POINTING OUT ANY EXPENDITURE F OR ALLEGED PERSONAL USER. B) THAT WITHOUT PREJUDICE TO ABOVE THE APPELLANT DISPUTES THE QUANTUM OF DISALLOWANCE AS CONFIRMED BY THE APPELLATE AUTHORITY AS HIGHLY EXCESSIVE. THE FINDINGS OF THE LD. CIT(A) ARE AS UNDER:- VIII) DISALLOWANCE OF RS. 59 420/- THE AO WHILE FRAMING THE ASSESSMENT MADE AN ADHOC D ISALLOWANCE OF RS.59 420/-@ 20% OF THE EXPENSES DEBITED UNDER THE HEAD TELEPHONE EXPENSE RS.24 244/- PETROL EXPENSES RS.58 726/- CAR INSURANCE RS.4 261/- CAR DEPRECIATION RS.78 176/- VEHICLE R UNNING & MAINTENANCE RS.51 168/- CAR INSURANCE RS.11 585/-O N ACCOUNT OF PERSONAL USE OF THESE FACILITIES. THE APPELLANT HAS CHALLENGED THESE ADDITIONS STATING THAT ALL THE- EXPENSES HAVE BEEN INCURRED FOR THE 13 PURPOSES OF BUSINESS AND NO DISALLOWANCE IS CALLED FOR ON ACCOUNT OF PERSONAL USE. VII.I) AFTER CAREFUL CONSIDERATION OF THE FACTS OF THE CASE AND NOTING THAT NO LOG BOOK OF THE CAR AND TELEPHONE REGISTER HAS BEEN MAINTAINED THE CLAIM OF THE APPELLANT THAT ALL THE EXPENSES HAVE BEEN INCURRED FOR THE PURPOSES OF BUSINESS IS NOT VERIFI ABLE. THEREFORE THE DISALLOWANCE MADE BY THE AO IS UPHELD IN PRINCIPLE. HOWEVER THE QUANTUM THEREOF IS REDUCED TO 10% OF THE EXPENSES. THE ASSESSING OFFICER IS DIRECTED TO RECOMPUTE THE DISALLOWANCE A CCORDINGLY. 25. HAVING REGARD TO THE FACTUAL MATRIX OF THE CASE FINDINGS OF THE ASSESSING OFFICER AND THE CIT(A) VIS-A-VIS SUBMISS IONS MADE BY THE PARTIES WE DO NOT SEE ANY MERIT IN THE GROUND OF A PPEAL AND WE UPHELD THE ORDER OF CIT(A) IN THIS REGARD. THE GROUND OF APPE AL RAISED BY THE ASSESSEE IS DISMISSED 26. GROUND NO.8 OF THE APPEAL IS GENERAL IN NATURE NEEDS NO ADJUDICATION HENCE THE SAME IS DISMISSED. 27. IN THE RESULT APPEAL OF THE ASSESSEE IS DISMIS SED. ITA NO. 361/CHD/2011 28. NOW WE SHALL DEAL WITH REVENUES APPEAL IN ITA NO. 361/CHD/2011. 29. GROUND NOS. 5 & 6 RAISED BY THE REVENUE BEING GENERAL IN NATURE ARE DISMISSED. 14 30. THE ISSUE RAISED IN GROUND NO.1 RAISED BY THE R EVENUE HAS BEEN DEALT WITH IN ASSESSEES APPEAL WHILE ADJUDICATING GROUND NO.4 AT PARAS 13 TO 16 OF THIS ORDER WHEREBY THIS GROUND OF APPEAL IS DISMISSED. HAVING REGARD TO THE SAID FINDINGS WE DO NOT FIND ANY M ERIT AND SUBSTANCE IN THIS GROUND OF APPEAL AND THE SAME IS DISMISSED AND FIND INGS OF CIT(A) ARE UPHELD. 31. THE ISSUE RAISED BY THE DEPARTMENT IN GROUND NO.2 OF ITS APPE AL HAS BEEN DULY DEALT WITH IN DETAIL WHILE ADJUDICATING G ROUND NO.5 OF THE ASSESSEES APPEAL. CONSEQUENTLY FOLLOWING THE SAM E FINDINGS RECORDED THEREIN THE GROUND OF APPEAL RAISED BY THE REVENUE IS DISMISSED AND THE FINDINGS OF LD. CIT(A) ARE UPHELD. 32. THE ISSUE RAISED BY THE DEPARTMENT IN GROUND NO.3 OF ITS APPE AL HAS BEEN DULY DEALT WITH IN DETAIL WHILE ADJUDICATING G ROUND NO.6 OF THE ASSESSEES APPEAL HEREINABOVE. CONSEQUENTLY FOLLO WING THE SAME FINDINGS RECORDED THEREIN THE GROUND OF APPEAL RAISED BY TH E REVENUE IS DISMISSED AND THE FINDINGS OF LD. CIT(A) ARE UPHELD 33. THE ISSUE RAISED BY THE DEPARTMENT IN GROUND NO.4 OF ITS APPE AL HAS BEEN DULY DEALT WITH IN DETAIL WHILE ADJUDICATING G ROUND NO.7 OF THE ASSESSEES APPEAL HEREINABOVE. CONSEQUENTLY FOLLO WING THE SAME FINDINGS 15 RECORDED THEREIN THE GROUND OF APPEAL RAISED BY TH E REVENUE IS DISMISSED AND THE FINDINGS OF LD. CIT(A) ARE UPHELD. THUS THE APPEAL FILED BY THE REVENUE IS DISMISSED. 35. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE AND REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF MARCH 2012 SD/- SD/- (H.L.KARWA) (MEHAR SINGH) VICE PRESIDENT ACCOUNTANT MEMBER DATED : 19 TH MARCH 2012 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR