ITO-III, Faizabad v. M/s. Choudhary Rice Mill,

ITA 38/LKW/2010 | 2004-2005
Pronouncement Date: 15-07-2011 | Result: Dismissed

Appeal Details

RSA Number 3823714 RSA 2010
Assessee PAN AADFC4091Q
Bench Lucknow
Appeal Number ITA 38/LKW/2010
Duration Of Justice 1 year(s) 6 month(s)
Appellant ITO-III, Faizabad
Respondent M/s. Choudhary Rice Mill,
Appeal Type Income Tax Appeal
Pronouncement Date 15-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 15-07-2011
Assessment Year 2004-2005
Appeal Filed On 14-01-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A - BENCH LUCKNOW. BEFORE SHRI H.L.KARWA HON'BLE VICE PRESIDENT AND SHRI N.K.SAINI ACCOUNTANT MEMBER I.T.A.NO.38(LKW.)/2010 A.Y.: 2004-05 THE ITO-III VS. M/S.CHAUDHARY RICE MILL FAIZABAD. BASKHARI AMBEDKAR NAGAR. PAN AADFC4091Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V.V.SINGH SR.D.R. RESPONDENT BY : SHRI M.P.MISHRA ADVOCATE O R D E R PER N.K.SAINI ACCOUNTANT MEMBER THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORDER DATED 14.9.2009 OF THE LD.CIT(A)-I LUCKNOW. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL : 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT WAS JUSTIFIED IN DELETING ADDITION OF RS.2 83 213/- ON ACCOUNT OF UNDISCLOSED INCOME PERTAINING TO SUPPRESSED SALES EVIDENT FROM DIFFERENCE IN MARKET SALE PRICE PER UNIT OF RICE AND VALUE PER UNIT OF CLOSING STOCK. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT WAS JUSTIFIED IN DELETING ADDITION OF RS.1 98 906/- ON ACCOUNT OF UNPAID PURCHASE TAX AND TELEPHONE EXPENSES WITHOUT CONSIDERING THE FACTS OF THE CASE BECAUSE THE ASSESSEE NEITHER ENCLOSED THE COPIES OF RECEIPTS ALONG WITH RETURN NOR PRODUCED THE SAME HE LORE A.O. AT THE TIME OF ASSESSMENT PROCEEDINGS. 2 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT WAS JUSTIFIED IN DELETING ADDITIONS MADE ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS AND GIVING RELIEF OF RS.47000/- DESPITE THE A.O. HAVING ADDUCED ADEQUATE REASONS FOR SUCH AUDITIONS. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT WAS JUSTIFIED BY RESTRICTING THE DISALLOWANCES OF EXPENSES @10% CLAIMED BY THE ASSESSEE WITHOUT APPRECIATING THE FACTS THAT THE ASSESSEE DID NOT PRODUCE ANY BOOKS NOR ANY VOUCHERS TO SUPPORT THESE EXPENSES DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 2. THE FIRST ISSUE VIDE GROUND NO.1 RELATES TO THE DELETION OF ADDITION OF RS.21 83 213 MADE BY THE AO ON ACCOUNT OF UNDISCLOSED INCOME PERTAINING TO SUPPRESSED SALES. 3. THE FACTS RELATING TO THIS ISSUE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 1.11.2004 DECLARING AN INCOME OF RS.12 070 WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME-TAX ACT 1961 (IN SHORT THE ACT) ON 13.12.2004. LATER ON THE CASE WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTICED THAT THE ASSESSEE HAD SHOWN SALE OF 1666.06 QUINTALS OF RICE MARKET @ RS.706 PER QUINTAL BUT THE VALUE OF CLOSING STOCK OF 4400.35 QUINTALS HAD BEEN SHOWN @ RS.875.99 PER QUINTAL AND THAT THE ASSESSEE HAD SHOWN SALE RATE OF BUY RICE @ RS.947 PER QUINTAL. THE AO WAS OF THE VIEW THAT THE ASSESSEE HAD SUPPRESSED THE SELLING RATE OF RICE MARKET BY 169.99 PER QUINTAL (RS.875.99 RS.706). HE ACCORDINGLY WORKED OUT THE SUPPRESSED SALE AT RS.2 83 213 (1666 QUINTALS X RS.169.99). ACCORDINGLY THE ADDITION OF RS.2 83 213 WAS MADE. 3 4. THE ASSESSEE CARRIED THE MATTER TO THE LD.CIT(A) AND SUBMITTED THAT THE PURCHASES AND SALES WERE FULLY VOUCHED AND VERIFIABLE AND THAT THE QUANTITATIVE TALLY WAS AVAILABLE IN THE STOCK REGISTER. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAD SHOWN GROSS PROFIT RATE OF 10% WHEREAS IN OTHER COMPARABLE CASES OF THE AREA THE TRADING RESULTS OF LESSER RATE HAD BEEN ACCEPTED AND NO COMPARABLE CASE SHOWING HIGHER GROSS PROFIT RATE HAD BEEN QUOTED BY THE AO. IT WAS CONTENDED THAT THE PROVISIONS OF SECTION 145(3) OF THE I.T.ACT COULD NOT BE INVOKED UNLESS THE AO IS NOT ABOUT TO FIND OUT ANY POSITIVE EVIDENCE INDICATING THE SUPPRESSION OF INCOME. IT WAS FURTHER CONTENDED THAT THE AUDITORS HAD NOT GIVEN ANY ADVERSE REMARKS IN THIS REGARD AND THE BOOKS OF ACCOUNTS STOCKS REGISTER AND THE PURCHASES/SALES VOUCHERS WERE REGULARLY CHECKED BY THE REGIONAL MARKETING INSPECTOR AND HENCE THE QUESTION OF ANY MANIPULATION OR MALPRACTICE DOES NOT ARISE. IT WAS STATED THAT THE AVERAGE RATE OF TOTAL RICE SOLD WAS WORKED OUT AT RS.875.99 PER QUINTAL. IT WAS FURTHER SUBMITTED THAT THE ADDITION MADE BY THE AO WAS ILLEGAL SINCE HE HAD FAILED TO ISSUE A NOTICE AS PER PROVISIONS OF SECTION 144 READ WITH SECTION 145(3) OF THE I.T.ACT BEFORE REJECTING THE BOOKS OF ACCOUNTS. THE ASSESSEE FURNISHED A COPY OF NOTICE UNDER SECTION 143(2) DATED 10.8.2006 AND STATED THAT THE SALE PRICE OF RICE HAD NOT BEEN QUESTIONED IN THE SAID NOTICE. IT WAS STATED THAT THE AO HAD NOT PLACED ON RECORD ANY EVIDENCE MENTIONING THAT THE ASSESSEE HAD DERIVED MORE PROFIT. ACCORDINGLY IT WAS URGED THAT THE ADDITION MADE BY THE AO MAY BE DELETED. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: (I) SHRI RAM ARORA V. CIT (1971) 80 ITR 78 (ALLD.) (II) INTERNATIONAL FOREST COMPANY V. CIT PATIALA (1975) 101 ITR 721 (J &K). 4 5. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE AO HAD NOT MADE THE ADDITION ON THE GROUND THAT THE ASSESSEE DID NOT DISCLOSE THE EXTRA PROFIT EARNED BY IT ON SALE OF RICE. THE LD.CIT(A) POINTED OUT THAT THE ASSESSEE HAD DISCLOSED GROSS PROFIT AT THE RATE OF 10% AND THE PURCHASES/SALES WERE VOUCHED AND VERIFIABLE AS WELL AS THE QUANTITATIVE TALLY WAS AVAILABLE BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE LD. CIT(A) ALSO POINTED OUT THAT THE AO DID NOT CONSIDER THE CALCULATION CHART OF AVERAGE RATE OF THE TOTAL RICE SOLD AND ALSO HAD NOT QUOTED ANY COMPARABLE CASE OF SAME LINE OF BUSINESS IN WHICH GROSS PROFIT OF MORE THAN 10% HAD BEEN DISCLOSED. ACCORDING TO THE LD.CIT(A) THE MERE FACT THAT LESSER OUT-TURN OF SOLD RICE HAD BEEN SHOWN BY THE ASSESSEE COULD NOT BE TREATED AS A VALID GROUND FOR REJECTING ITS ACCOUNTS AND INDICATIVE OF ANY ATTEMPT ON THE PART OF THE ASSESSEE TO SUPPRESS THE SELLING RATE OF RICE MARKET AND THAT EVEN IF THE AO CONSIDERED THAT THE MATERIAL PLACED BY THE ASSESSEE BEFORE HIM WAS NOT RELIABLE HE OUGHT TO HAVE BROUGHT SOME EVIDENCE OR MATERIAL ON RECORD TO PROVE THAT THE ASSESSEE HAD MADE MORE PROFITS. ACCORDING TO THE LD.CIT(A) THERE MUST HAVE BEEN SOMETHING MORE THAN MERE SUSPICION TO SUPPORT THE ADDITION AND THAT THERE WAS NO SUBSTANCE IN THE ADDITION MADE BY THE AO. ACCORDINGLY THE SAME WAS DELETED. 6. NOW THE DEPARTMENT IS IN APPEAL. 7. THE LD.D.R. STRONGLY SUPPORTED THE ORDER OF THE AO. 5 8. IN HIS RIVAL SUBMISSIONS THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND STRONGLY SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD.CIT(A). 9. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES AND THE MATERIAL ON RECORD IT APPEARS THAT THE AO MADE THE ADDITION BY PRESUMING THAT THE MARKET RATE AT WHICH THE CLOSING STOCK WAS SHOWN BY THE ASSESSEE SHOULD HAVE BEEN THE AVERAGE RATE OF THE SALE. IN THE INSTANT CASE THE AVERAGE SALE RATE WAS AT RS.706 PER QUINTAL WHILE THE CLOSING STOCK WAS SHOWN AT AN AVERAGE RATE OF RS.875.99 PER QUINTAL. IN THE PRESENT CASE THE AO NOWHERE POINTED OUT THAT THE RICE SOLD BY THE ASSESSEE AND THE RICE IN STOCK WERE OF THE SAME QUALITY. THEREFORE THE COMPARISON MADE BY THE AO WAS NOT JUSTIFIED. MOREOVER THE AO DID NOT POINT OUT ANY SUPPRESSED SALE OR INFLATED PURCHASE EVEN NO DISCREPANCY WAS POINTED OUT IN THE SALE VOUCHERS OF THE ASSESSEE. THEREFORE THE ADDITION MADE BY THE AO APPEARS TO BE ON THE BASIS OF PRESUMPTION WHICH CANNOT REPLACE THE REAL POSITION. IN THE INSTANT CASE THE SALES AND PURCHASES WERE FULLY VOUCHED AND VERIFIABLE AND THE QUANTITATIVE TALLY WAS ALSO AVAILABLE. THE AO DID NOT POINT OUT ANY DISCREPANCY EITHER IN THE PURCHASE & SALES OR QUANTITATIVE TALLY. THEREFORE THE ADDITION MADE BY THE AO WAS NOT JUSTIFIED AND THE LD.CIT(A) RIGHTLY DELETED THE SAME. IN THAT VIEW OF THE MATTER WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND THEREFORE THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 10. THE NEXT ISSUE VIDE GROUND NO.2 RELATES TO THE DELETION OF ADDITION OF RS.1 98 906 MADE BY THE AO ON ACCOUNT OF UNPAID PURCHASE TAX AND TELEPHONE EXPENSES. 6 11. THE FACTS RELATING TO THIS ISSUE IN BRIEF ARE THAT THE AO DURING THE ASSESSMENT PROCEEDINGS ASKED THE ASSESSEE TO FURNISH PROOF REGARDING PAYMENT OF THE FOLLOWING ITEMS : 1. PURCHASE TAX RS.1 91 656 2.U.P.TRADE TAX PAYABLE RS. 43 991 3. MANDI TAX PAYABLE RS.2 39 456 4.TELEPHONE BILL PAYABLE RS. 7 341 11.1 ACCORDING TO THE AO THE ASSESSEE FILED PHOTO COPIES OF TRADE TAX AND MANDI TAX CHALLANS FOR PROOF OF PAYMENT BUT NO PHOTO COPIES OF PAYMENTS HAD BEEN FILED FOR TELEPHONE BILL OF RS.7 341 AND THAT THE PURCHASE TAX AMOUNTING TO RS.1 91 565 HAD NOT BEEN DEPOSITED BEFORE FILING THE RETURN. HE THEREFORE ADDED BACK A SUM OF RS.1 98 906 (RS.1 91 506 + RS.7 341) TO THE INCOME OF THE ASSESSEE. 12. THE ASSESSEE CARRIED THE MATTER TO THE LD.CIT(A) AND SUBMITTED THAT THE EXPENSES UNDER THESE TWO HEADS HAD BEEN INCURRED IN THE INTEREST OF BUSINESS AND HAD BEEN CLAIMED ON MERCANTILE BASIS. IT WAS FURTHER STATED THAT THE RECEIPTS REGARDING PAYMENTS MADE TOWARDS THE PURCHASE TAX AND THE TELEPHONE EXPENSES WERE SUBMITTED BEFORE THE AO THE COPIES OF THE SAME WERE ALSO PRODUCED BEFORE THE LD. CIT(A). THE LD.CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THERE WAS SUBSTANCE IN THE SUBMISSION OF THE ASSESSEE. HE THEREFORE DELETED THE ADDITION. 13. NOW THE DEPARTMENT IS IN APPEAL. 7 14. THE LD.D.R. REITERATED THE OBSERVATIONS MADE BY THE AO AND STRONGLY SUPPORTED THE ORDER PASSED BY THE AO. 15. IN HIS RIVAL SUBMISSIONS THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND FURTHER SUBMITTED THAT PURCHASE TAX WAS PAID VIDE RECEIPT DATED 28.4.2004 COPY OF WHICH IS PLACED AT PAGE 15 OF THE ASSESSEES COMPILATION. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE ALSO MADE THE PAYMENTS OF TELEPHONE BILLS TO THE OWNERS OF THE PCO COPIES OF WHICH WERE PRODUCED BEFORE THE LD.CIT(A). OUR ATTENTION WAS DRAWN TOWARDS PAGES 16 TO 18 OF THE ASSESSEES COMPILATION. 16. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IT IS NOTICED THAT THE ASSESSEE MADE THE PAYMENT OF THE PURCHASE TAX VIDE CHALLAN NO.6/2004 DATED 28.4.2004 COPY OF WHICH IS AVAILABLE AT PAGE 15 OF THE ASSESSEES COMPILATION. SIMILARLY THE ASSESSEE MADE THE PAYMENT TO THE PCO FOR TELEPHONE EXPENSES COPIES OF WHICH ARE PLACED AT PAGES 16 TO 18 OF THE ASSESSEES COMPILATION. THE ASSESSEE HAD MADE THE FOLLOWING PAYMENTS : RECEIPT NO. DATE AMOUNT 00029 OF AJAY STUDIO COMMUNICATION 1.9.2003 RS.2 650 00081 OF AJAY STUDIO COMMUNICATION 28.2.2004 RS.3 860 RECEIPT ISSUED BY ASHOK KUMAR VERMA OWNER OF PCO. 8.3.2004 RS. 834 RS.7 341 16.1 FROM THE ABOVE FACTS IT IS CLEAR THAT THE ASSESSEE HAD MADE THE PAYMENTS DURING THE YEAR UNDER CONSIDERATION FOR THE TELEPHONE EXPENSES CLAIMED AND THE PAYMENT OF PURCHASE TAX PAYABLE WAS MADE ON 28.4.2004 BEFORE FILING THE RETURN OF INCOME ON 1.11.2004 THEREFORE NO DISALLOWANCE 8 WAS CALLED FOR AND THE LD.CIT(A) RIGHTLY DELETED THE DISALLOWANCE MADE BY THE AO. 17. VIDE GROUND NO.3 THE GRIEVANCE OF THE DEPARTMENT RELATES TO THE DELETION OF RS.47 000 OUT OF THE ADDITION MADE BY THE AO ON ACCOUNT OF LOW HOUSEHOLD EXPENSES. 18. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THIS ISSUE HAS ALREADY BEEN ADJUDICATED WHILE DECIDING THE APPEAL OF THE ASSESSEE IN I.T.A.NO.648(LKW)/2009 FOR THE ASSESSMENT YEAR 2004-05 VIDE ORDER DATED 31.3.2010 OF THIS BENCH OF THE TRIBUNAL COPY OF THE SAID ORDER WAS FURNISHED. THE LD.D.R. COULD NOT CONTROVERT THE AFORESAID CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE. 19. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES IT IS NOTICED THAT THIS ISSUE HAS ALREADY BEEN ADJUDICATED IN ASSESSEES APPEAL IN I.T.A.NO.648(LKW.)/2009 AND THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARA 20 OF THE ORDER DATED 31.3.2010 WHICH READ AS UNDER : 20. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE IT APPEARS THAT THE ADDITION HAD BEEN MADE BY THE AO ONLY ON THE BASIS OF SURMISES AND CONJECTURES. THE AO DID NOT BRING ANYTHING ON RECORD TO SUBSTANTIATE THAT THE WITHDRAWAL BY THE PARTNERS FROM THE ASSESSEE FIRM AND FROM THEIR AGRICULTURAL INCOME WAS NOT SUFFICIENT TO MEET THEIR DAY TO DAY NEEDS. FURTHER MORE THE FIRM WAS NOT RESPONSIBLE FOR THE HOUSEHOLD EXPENSES OF THE ASSESSEE AND IF THE AO WAS NOT SATISFIED WITH THE WITHDRAWAL OF THE ASSESSEE THEN THE ADDITION COULD HAVE BEEN MADE IN INDIVIDUAL HANDS OF THE PARTNERS AND NOT IN THE HANDS OF THE ASSESSEE FIRM. IN THAT VIEW OF THE MATTERS WE DELETE THE ADDITION MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A). 9 19.1 SINCE THE ISSUE HAD ALREADY BEEN ADJUDICATED BY THIS BENCH OF THE TRIBUNAL WE THEREFORE DO NOT SEE ANY MERIT IN THIS GROUND OF APPEAL OF THE DEPARTMENT. 20. THE LAST ISSUE VIDE GROUND NO.4 RELATES TO THE DISALLOWANCE OF EXPENSES RESTRICTED BY THE LD. CIT(A) AT THE RATE OF 10%. 21. REGARDING THIS ISSUE THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT IT HAD ALREADY BEEN ADJUDICATED IN ASSESSES APPEAL IN I.T.A.NO.648(LKW)/209 VIDE ORDER DATED 31.3.2010 OF THIS BENCH OF THE TRIBUNAL AND THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARAS 21 TO 23 OF THE SAID ORDER. THE LD.D.R. COULD NOT CONTROVERT THE AFORESAID CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE. 22. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES IT IS NOTICED THAT THE ISSUE UNDER CONSIDERATION HAS ALREADY BEEN ADJUDICATED WHILE DECIDING THE ASSESSES APPEAL IN I.T.A.NO.648(LKW)/2009 FOR THE ASSESSMENT YEAR 2004-05 AND THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARAS 21 TO 23 OF THE ORDER DATED 31.3.2010 WHICH READ AS UNDER : 21. THE LAST ISSUE VIDE GROUND NO. 4 RELATES TO THE SUSTENANCE OF DISALLOWANCE MADE BY THE AO OUT OF THE VARIOUS EXPENSES. THE FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT THE AO DURING THE ASSESSMENT PROCEEDINGS ASKED THE ASSESSEE TO GIVE THE DETAILS OF ADMINISTRATIVE EXPENSES FINANCIAL EXPENSES SELLING EXPENSES GENERATOR EXPENSES AN REPAIRS AND MAINTENANCE EXPENSES. HE MADE AD HOC DISALLOWANCE OF RS.50 000/- RS.60 000 RS.20 000/- AND RS.60 000/- OUT OF ADMINISTRATIVE EXPENSE SELLING EXPENSE GENERATOR EXPENSE AND REPAIRS AND MAINTENANCE EXPENSE RESPECTIVELY. THE ASSESSES CARRIED THE MATTER TO THE LD. CIT(A) WHO DIRECTED THE AO TO 10 RESTRICT THE DISALLOWANCE TO 10% OF THE EXPENSES CLAIMED BY THE ASSESSEE. NOW THE ASSESSEE IS IN APPEAL. 22. THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO WITHOUT POINTING OUT A SPECIFIC ITEM OF THE EXPENSES WHICH WAS NOT VERIFIABLE MADE THE DISALLOWANCE AND THE LD. CIT(A) RESTRICTED THE DISALLOWANCE TO 10% OF THE EXPENSES WITHOUT ANY BASIS. IT WAS STATED THAT THE EXPENSES WERE INCURRED FOR THE BUSINESS PURPOSES. THEREFORE NO DISALLOWANCE WAS CALLED FOR. IN HIS RIVAL SUBMISSIONS THE LD. DR SUPPORTED THE ORDER OF THE CIT(A) AND SUBMITTED THAT THE ASSESSEE NEITHER PRODUCED THE BOOKS OF ACCOUNT NOR ANY VOUCHER FOR | THE EXPENSES THEREFORE THE AO WAS FULLY JUSTIFIED IN MAKING THE DISALLOWANCE. 23. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES AND THE ON RECORD IT APPEARS THAT THE ASSESSEE FAILED TO PRODUCE THE VOUCHERS BEFORE THE AO FOR VERIFICATION THEREFORE SOME DISALLOWANCE CALLED FOR. IN OUR OPINION THE DISALLOWANCE SUSTAINED BY THE LD.CIT(A) TO THE EXTENT OF 10% OF THE EXPENSES APPEARS TO BE FAIR AND REASONABLE. WE THEREFORE DO NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FINDINGS OF THE LD.CIT(A) ON THIS ISSUE. ACCORDINGLY THIS GROUND OF THE ASSESSEES APPEAL FAILS. 22.1 SINCE THE ISSUE HAS ALREADY BEEN ADJUDICATED WHILE DECIDING THE ASSESSEES APPEAL AND THE ORDER OF THE LD.CIT(A) ON THIS ISSUE HAS BEEN UPHELD WE THEREFORE DO NOT SEE ANY MERIT IN THIS GROUND OF THE DEPARTMENTAL APPEAL. ACCORDINGLY THE SAME IS DISMISSED. 23. IN THE RESULT THE APPEAL OF THE DEPARTMENT IS DISMISSED. (THE ORDER PRONOUNCED IN THE OPEN COURT ON 15.7.11). SD. SD. (H.L.KARWA) (N.K.SAINI) VICE PRESIDENT ACCOUNTANT MEMBER JULY 15TH 2011. 11 COPY TO THE : 1. APPELLANT 2. RESPONDENT 3. CIT(A) (4) CIT 5.DR. A.R. ITAT LUCKNOW. SRIVASTAVA.