M/s E.V.Radio Electricals, Ernakulam v. ITO, Ernakulam

ITA 40/COCH/2010 | 2005-2006
Pronouncement Date: 30-11-2011

Appeal Details

RSA Number 4021914 RSA 2010
Assessee PAN AAAFE5439R
Bench Cochin
Appeal Number ITA 40/COCH/2010
Duration Of Justice 1 year(s) 10 month(s) 11 day(s)
Appellant M/s E.V.Radio Electricals, Ernakulam
Respondent ITO, Ernakulam
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2011
Appeal Filed By Assessee
Bench Allotted DB
Tribunal Order Date 30-11-2011
Date Of Final Hearing 20-10-2011
Next Hearing Date 20-10-2011
Assessment Year 2005-2006
Appeal Filed On 19-01-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE S/SHRI N.R.S.GANESAN JM AND SANJAY AROR A AM I.T.A NOS. 39 & 40/COCH/2010 ASSESSMENT YEARS: 2004-05 & 2005-06 M/S. E.V.RADIO ELECTRICALS I.S. PRESS ROAD ERNAKULAM COCHIN-682 018 [PAN: AAAFE 5439R] VS. THE INCOME TAX OFFICER WARD-2(2) RANGE-2 ERNAKULAM. (ASSESSEE-APPELLANT) (REVENUE-RESPONDENT ) ASSESSEE BY SHRI T.JOHN GEORGE ADV. REVENUE BY MS. S.VIJAYAPRABHA JR. DR DATE OF HEARING 20/10/2011 DATE OF PRONOUNCEMENT 30/11/2011 O R D E R PER N.R.S.GANESAN JM BOTH THE APPEALS ARE DIRECTED AGAINST TWO INDEPEND ENT ORDERS OF CIT(A)-II KOCHI DATED 30.11.2009 AND PERTAIN TO ASSESSMENT YEAR 20 04-05 AND 2005-06. SINCE THE COMMON ISSUES ARE ARISING FOR CONSIDERATION IN BOTH THE APPEALS THE SAME WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. LET US FIRST TAKE UP THE APPEAL FOR THE ASSESSME NT YEAR 2004-05. THE ASSESSEE HAS ALSO RAISED AN ADDITIONAL GROUND CHALLENGING THE AD DITION MADE BY THE ASSESSING OFFICER ON MERIT AFTER RE-OPENING THE ASSESSMENT U/S. 143(3 ) R.W.S. 147 OF THE ACT. SHRI T. JOHN GEORGE THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER REOPENED THE ASSESSMENT U/S. 147 ON THE GROUND THAT THE TDS CLAIM WAS NOT IN CONSONANCE WITH THE AMOUNT MENTIONED IN THE TDS CERTIFICATE AND THE AMO UNT CREDITED TO THE P&L ACCOUNT. I.T.A. NOS. 39 & 40 /COCH/2010 2 HOWEVER AFTER RE-OPENING THE ASSESSMENT THE ASSES SING OFFICER HAS NOT MADE ANY ADDITION ON THE BASIS OF THE REASON ON WHICH THE CA SE WAS RE-OPENED. THE ASSESSING OFFICER HAS MADE SOME DISALLOWANCE ON AD-HOC BASIS ON THE GROUND THAT THE EXPENDITURE INCURRED IS RELATED TO THE PERSONAL EXPENSES OF THE ASSESSEE. WHEN NO ADDITION WAS MADE ON THE BASIS OF THE REASONS RECORDED THE LD. REPRE SENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS NO JURISDICTION TO MAKE A NY OTHER ADDITION ON THE GROUND THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT TH E LD. COUNSEL PLACED RELIANCE ON THE JUDGMENT OF THE DELHI HIGH COURT IN THE CASE OF RANBAXY LABORATORIES LTD. VS. CIT (2011) 336 ITR 136 AND THE JUDGMENT OF THE BOMBAY H IGH COURT IN THE CASE OF CIT VS. JET AIRWAYS (I) LTD. (2011) 331 ITR 236. THE LD. COUNSEL FOR THE ASSE SSEE ALSO PLACED RELIANCE ON THE JUDGMENT OF THE RAJASTHAN HIGH COUR T IN THE CASE OF CIT VS. DR. DEVENDRA GUPTA (2011) 336 ITR 59. THE LD. COUNSEL FOR THE ASSESS EE ALSO PLACED RELIANCE ON THE JUDGMENT OF THE KERALA HIGH COURT IN THE CASE OF CIT VS. BEST WOOD INDUSTRIES AND SAW MILLS (2011) 331 ITR 63 AND CIT VS. TBS PUBLISHERS & DISTRIBUTORS (2010) 325 ITR 257. 3. ON THE CONTRARY MS. S. VIJAYAPRABHA THE LD. DE PARTMENTAL REPRESENTATIVE SUBMITTED THAT THE GROUND RAISED BY THE ASSESSEE DO ES NOT ARISE OUT OF THE ORDER OF THE CIT(A). MOREOVER THE ASSESSEE HAS NO REASON AS T O WHY IT COULD NOT BE RAISED EARLIER EITHER BEFORE THE CIT(A) OR BEFORE THE ASSESSING OF FICER. IN THE ABSENCE OF ANY REASON FOR NOT RAISING THE ADDITIONAL GROUND EARLIER EITHER BE FORE THE CIT(A) OR BEFORE THIS TRIBUNAL THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ADDITIONAL GROUND CANNOT BE ADMITTED AT THIS STAGE. THE LD. DEPARTMENTAL REPRE SENTATIVE PLACED RELIANCE ON THE DECISION OF THE MUMBAI BENCH OF THIS TRIBUNAL IN TH E CASE OF BATLIBOI AND CO. LTD. VS. DCIT (1998) 67 ITD 397 AND THE DECISION OF THE INDORE BENCH OF THIS TRIBUN AL IN THE CASE OF S.KUMARS TYRE MFG. CO. LTD. VS. DCIT 61 ITD 326. REFERRING TO THE MERIT OF THE ADDITIONAL GROUND THE LD DEPARTMENTAL REPRESENTATI VE SUBMITTED THAT SECTION 147 CLEARLY SAYS THAT WHEN THE CASE IS RE-OPENED AFTER RECORDIN G A REASON THE ASSESSING OFFICER CAN ASSESS ANY INCOME WHICH ESCAPED ASSESSMENT EVEN THO UGH NO ADDITION WAS MADE ON THE BASIS OF THE REASON RECORDED IN THE REOPENED ASSESS MENT. I.T.A. NOS. 39 & 40 /COCH/2010 3 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY THE GROUND RAISED AS ADDITIONAL GROUND WAS NOT RAISED EITHER BEFORE THE CIT(A) OR BEFORE THIS TRIBUNAL EARLIER. THE ASSESS EE FOR THE FIRST TIME RAISED THIS GROUND. WE HAVE CAREFULLY GONE THROUGH THE DECISION OF THE INDORE BENCH OF THE TRIBUNAL IN THE CASE OF S.KUMARS TYRE MFG. CO. LTD. VS. DCIT (SUPRA). IN THE CASE BEFORE THE INDORE BENCH OF THE TRIBUNAL THE ASSESSING OFFICER CHARG ED INTEREST U/S. 234B OF THE ACT. THE ASSESSEE DID NOT AGITATE THE ISSUE OF LEVY OF INTE REST BEFORE THE CIT(A). HOWEVER THE ASSESSEE CHALLENGED SOME OF ITS ADDITIONS MADE BY THE ASSESSING OFFICER. THE ASSESSEE HAD NOT RAISED ANY GROUND CHALLENGING THE LEVY OF I NTEREST U/S. 234B IN THE ORIGINAL MEMORANDUM OF APPEAL BEFORE THE TRIBUNAL. HOWEVER BY WAY OF A SEPARATE PETITION THE ASSESSEE SOUGHT PERMISSION TO RAISE ADDITIONAL GROUND WITH REGARD TO THE LEVY OF INTEREST U/S. 234B OF THE ACT. THE INDORE BENCH OF THE TRIBUNAL FOUND THAT NO REASON HAS BEEN SHOWN BY THE ASSESSEE AS TO WHY THE GROUND OF LEVY OF INTEREST WAS NOT RAISED BEFORE THE CIT(A). IN THE ABSENCE OF A CONVINCING REPLY THE TRIBUNAL REJECTED THE CLAIM OF THE ASSESSEE FOR RAISING THE ADDITIONAL GROUND BEFORE THE TRIBUNAL. IN THE CASE BEFORE US IT IS NOT THE CASE OF LEVY OF INTEREST OR ANY A DDITION MADE BY THE ASSESSING OFFICER. THE ASSESSEE IS CHALLENGING THE RE-OPENING OF THE A SSESSMENT. IN OTHER WORDS THE ASSESSEE IS CHALLENGING THE DECISION OF THE ASSESSING OFFICE R TO MAKE ADDITION IN RESPECT OF OTHER INCOME WHEN NO ADDITION WAS MADE ON THE BASIS OF TH E REASONS RECORDED FOR THE RE- OPENING OF THE ASSESSMENT. THEREFORE THIS ISSUE RA ISED BY THE ASSESSEE GOES TO THE ROOT OF THE JURISDICTION OF THE ASSESSING OFFICER TO MAKE A DDITION. THE MATTER WOULD BE ENTIRELY ON A DIFFERENT FOOTING IF THERE IS AN ADDITIONAL GR OUND WITH REGARD TO THE MERIT OF THE ADDITION OR THE INTEREST LEVIED BY THE ASSESSING OF FICER. SINCE THE ISSUE RAISED BY THE ASSESSEE BY WAY OF AN ADDITIONAL GROUND GOES TO THE ROOT OF THE JURISDICTION OF THE ASSESSING OFFICER TO MAKE ADDITION WE ARE OF THE O PINION THAT THE DECISION OF THE INDORE BENCH OF THE TRIBUNAL IN THE CASE OF S.KUMARS TYRE MFG. CO. LTD. VS. DCIT (SUPRA) MAY NOT BE OF ASSISTANCE TO THE REVENUE. WE HAVE ALSO CAREFULLY GONE THROUGH THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF BATLIBOI AND CO. LTD. VS. DCIT (SUPRA). IN THE CASE BEFORE THE MUMBAI BENCH OF THE TRIBUNAL THE CONTENTION WAS THAT THE TRIBUNAL WAS BOUND TO ADMIT EVERY ADDITIONAL GROUND RAISED BEFORE IT. THE MUMBAI I.T.A. NOS. 39 & 40 /COCH/2010 4 BENCH OF THE TRIBUNAL AFTER REFERRING TO THE JUDGME NT OF THE APEX COURT IN THE CASE OF JUTE CORPORATION OF INDIA LTD.VS. CIT (1991) 187 IT R 688 AND THE BOMBAY HIGH COURT IN THE CASE OF GODAVARI SUGAR MILLS VS. CIT (1993) 199 ITR 351 FOUND THAT THE TRIBUNAL HAS AMPLE POWER TO ADMIT ADDITIONAL GROUNDS OF THE ASSE SSEE. HOWEVER THE TRIBUNAL HAS TO SATISFY THE REASONS FOR NOT RAISING THE ADDITIONAL GROUND IN THE MEMORANDUM OF APPEAL AT THE TIME OF FILING OF THE APPEAL. THE DISCRETION VE STED IN THE JUDICIAL AUTHORITY HAS TO BE EXERCISED JUDICIALLY. IN THE CASE BEFORE US THE I SSUE RAISED AS ADDITIONAL GROUND GOES TO THE VERY ROOT OF THE JURISDICTION TO MAKE THE ASSES SMENT OF INCOME WHICH ESCAPED ASSESSMENT WHEN NO ADDITION WAS MADE ON THE BASIS O F THE REASON RECORDED. SINCE THE MATTER GOES TO THE ROOT OF THE VERY JURISDICTION OF THE ASSESSING OFFICER IN OUR OPINION IT NEEDS TO BE ADJUDICATED. THEREFORE THIS DECISION O F THE MUMBAI BENCH OF THE TRIBUNAL MAY ALSO NOT BE OF ANY ASSISTANCE TO THE REVENUE. T HIS ISSUE CAN BE EXAMINED IN ANOTHER ANGLE ALSO. THE STATE CAN LEVY TAX PROVIDED IT IS AUTHORISED BY AN ACT OF LEGISLATURE. UNLESS THE LEVY IS AUTHORISED BY AN ACT OF PARLIAM ENT THE REVENUE CANNOT WITHHOLD THE INDIVIDUAL CITIZENS MONEY ON TECHNICAL GROUNDS. T HEREFORE ON TECHNICALITY THE ASSESSEE CANNOT BE THROWN OUT OF COURT. ACCORDINGLY THE ADD ITIONAL GROUND RAISED BY THE ASSESSEE IS ADMITTED. 5. NOW COMING TO THE MERIT OF THE ADDITIONAL GROUND WE HAVE CAREFULLY GONE THROUGH THE JUDGMENT OF THE DELHI HIGH COURT IN THE CASE OF RANBAXY LABORATORIES LTD. VS. CIT (SUPRA) BOMBAY HIGH COURT IN THE CASE OF CIT VS. JET AIRWAYS (I) LTD. (SUPRA) AND THE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. DR. DEVENDRA GUPTA (SUPRA). IN ALL THESE JUDGMENTS THE DELHI HIGH COURT BOMBAY HIGH COURT AND THE RAJASTHAN HIGH COURT CATEGORICALLY HELD THAT THOUGH THE ASSESSING OFFICER HAS JURISDICTION TO RE -ASSESS THE INCOME WHICH ESCAPED ASSESSMENT HOWEVER THE ASSES SING OFFICER HAS NO JURISDICTION TO RE-ASSESS THE INCOME IN CASE NO INCOME WAS ASSESSED ON THE BASIS OF THE REASONS RECORDED FOR THE RE-OPENING OF THE ASSESSMENT. IN OTHER WOR DS ALL THE THREE HIGH COURTS HELD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED TO MAKE ANY FURTHER ADDITION WHEN THE REASONS FOR INITIATION OF RE-ASSESSMENT PROCEEDING CEASES TO SU RVIVE. WE HAVE ALSO GONE CAREFULLY THROUGH THE JUDGEMENT OF THE KERALA HIGH COURT IN T HE CASE OF CIT VS. BEST WOOD I.T.A. NOS. 39 & 40 /COCH/2010 5 INDUSTRIES AND SAW MILLS (SUPRA). IN THE CASE BEFORE THE KERALA HIGH COURT IN THE CASE OF CIT VS. BEST WOOD INDUSTRIES AND SAW MILLS (SUPRA) THE ONLY ISSUE ARISING FOR CONSIDERATION WAS WHETHER THE ASSESSING OFFICER HAS JURISDICTION TO ASSESS THE INCOME WHICH CAME TO ITS NOTICE IN THE COURSE OF RE-ASSESS MENT PROCEEDINGS WHICH ESCAPED ASSESSMENT EARLIER. THE KERALA HIGH COURT AFTER CO NSIDERING THE PROVISIONS OF SECTIONS 148 TO 153 OF THE ACT FOUND THAT ONCE THE ASSESSMEN T IS RE-OPENED AFTER RECORDING THE REASONS THE ASSESSINTG OFFICER HAS TO COMPLETE THE INCOME ESCAPED ASSESSMENT BY FOLLOWING THE PROVISIONS OF THE ACT AS IF THE RETUR N FILED UNDER SECTION 148 IS ONE FILED U/S. 139 OF THE ACT. THE KERALA HIGH COURT HAD NO OCCAS ION TO CONSIDER WHETHER THE ASSESSING OFFICER CAN MAKE ANY ASSESSMENT WHEN NO A DDITION WAS MADE ON THE BASIS OF REASONS FOR RE-OPENING THE ASSESSMENT HOWEVER THE KERALA HIGH COURT IN THE CASE OF CIT VS. TBS PUBLISHERS & DISTRIBUTORS (SUPRA) CONSIDERED THIS IDENTICAL ISSUE AND FOUND THAT ONCE THE ASSESSING OFFICER HAS RE-OPENED THE A SSESSMENT UNDER SECTION 147 IN THE COURSE OF RE-ASSESSMENT PROCEEDINGS ALL INCOME ESC APED ASSESSMENTS COULD BE BROUGHT TO TAX AND THE ASSESSING OFFICER IS NOT BOUND TO CONFI NE TO THE GROUNDS ON WHICH RE-OPENING IS MADE. THE KERALA HIGH COURT FURTHER OBSERVED TH AT MERELY BECAUSE NO ADDITION WAS MADE ON THE REASONS RECORDED FOR RE-OPENING OF THE ASSESSMENT THAT ITSELF WOULD NOT LEAD TO INVALIDATE THE PROCEEDINGS. IN FACT THE KERALA H IGH COURT HAS OBSERVED AS FOLLOWS AT PAGE 260 AND 261 OF THE ITR. SENIOR COUNSEL RELIED ON THE DECISION IN ASSRT. C IT VS. RAJESH JHAVERI STOCK BROKERS P. LTD. REPORTED IN (2007) 291 ITR 500 WHE RE THE SUPREME COURT STATED THAT WHAT IS REQUIRED FORE REOPENING ASSESSMENT U/ S. 147 IS ONLY THE SUBJECTIVE SATISFACTION OF THE ASSESSING OFFICER THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THIS DOES NOT NECESSARILY FOLLOW THAT THE REASON FOR REOPENING SHOULD BY ITSELF LEAD TO ASSESSMENT OF ANY INCOME. IN OT HER WORDS IN THE COURSE OF REASSESSMENT AL ESCAPED INCOME COULD BE BROUGHT TO TAX AND THE ASSESSING OFFICER IS NOT BOUND TO CONFINE TO THE GROUNDS ON WHICH RE OPENING IS MADE. IN THIS CASE THE ASSESSEE CLAIMED CREDIT BASED ON TDS CERTIFICA TE ON RENT BUT WITHOUT DISCLOSING INCOME UNDER THE HEAD INCOME FROM HOUS E PROPERTY. FURTHER THE I.T.A. NOS. 39 & 40 /COCH/2010 6 ASSESSING OFFICER DOUBTED THE GENUINENESS OF THE C LAIM UNDER SUNDRY CREDITORS BECAUSE HE WAS OF THE OPINION THAT NON-EXISTENT LI ABILITIES DUE TO OMISSION TO RECORD REBATES COMMISSIONS DISCOUNTS AND ALSO TH E PAYMENTS ARE INCLUDED UNDER THE CLAIM OF SUNDRY CREDITORS. IN FACT IT IS SEE N IN THE REASSESSMENT THAT THERE WAS SUBSTANTIAL ADDITION OF ABOVE RS. 7 LAKHSUNDER THI S HEAD IN THE REASSESSMENT. GOING BY THE JUDGMENT OF THE SUPREME COURT WE DO NOT THINK THE DECISION OF THE COMMISSIONER OF INCOME-TAX(APPEALS) CONFIRMED BY T HE TRIBUNAL IS TENABLE OR SUSTAINABLE. EVEN THOUGH COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ASSESSING OFFICER COULD HAVE ISSUED NOTICE U/S. 143(2) AND M ADE A REGULAR ASSESSMENT U/S. 143(3) WE DO NOT THINK SUCH A RECOURSE OPEN TO TH E ASSESSING OFFICER STANDS IN HIS WAY OF REOPENING THE ASSESSMENT U/S. 147 IF HE HA S REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. WE FIND THAT THE REASONS R ECORDED BY THE OFFICER ARE SUFFICIENT TO JUSTIFY HIS BELIEF THAT INCOME HAS E SCAPED ASSESSMENT NO MATTER WHETHER ANY ADDITION COULD BE SUSTAINED IN THE ASS ESSMENT WITH SPECIFIC REFERENCE TO THE GROUNDS OF REOPENING. WE THEREFORE ALLO W THE APPEAL BY REVERSING THE ORDER OF THE FIRST APPELLATE AUTHORITY AND REMAND THE MATTER TO THE FIRST APPELLATE AUTHORITY FOR CONSIDERING THE APPEAL ON THE MERITS . 6. IN VIEW OF THE KERALA HIGH COURT JUDGMENT IN THE CASE OF CIT VS. TBS PUBLISHERS & DISTRIBUTORS (SUPRA) IN OUR OPINION THE JUDGMENTS OF THE DELHI HIGH COURT BOMBAY HIGH COURT AND THE RAJASTHAN HIGH COURT MAY NOT BE OF ANY ASSISTANCE TO THE ASSESSEE. THIS BENCH OF THE TRIBUNAL IS SITUATED WITHIN THE T ERRITORIAL JURISDICTION OF THE KERALA HIGH COURT THEREFORE THIS TRIBUNAL IS BOUND BY THE JUDG MENT OF THE KERALA HIGH COURT RATHER THAN THE OTHER HIGH COURTS. WHEN THE KERALA HIGH CO URT FOUND THAT IT IS NOT NECESSARY FOR THE ASSESSING OFFICER TO MAKE ANY ADDITION WITH SPE CIFIC REFERENCE TO THE GROUNDS OF RE- OPENING OF ASSESSMENT IN OUR OPINION THE JUDGMENT OF THE KERALA HIGH COURT IN THE CASE OF CIT VS. TBS PUBLISHERS & DISTRIBUTORS (SUPRA) IS BINDING ON THIS TRIBUNAL. RESPECTFULLY FOLLOWING THE JUDGMENT OF THE KERALA H IGH COURT IN THE CASE OF CIT VS. TBS PUBLISHERS & DISTRIBUTORS (SUPRA) WE HOLD THAT THE ASSESSING OFFICER CAN ASS ESS THE I.T.A. NOS. 39 & 40 /COCH/2010 7 INCOME WHICH ESCAPED ASSESSMENT EVEN THOUGH NO ADDI TION WAS MADE ON THE BASIS OF THE REASONS RECORDED FOR REOPENING THE ASSESSMENT. 7. NOW COMING TO THE MERIT OF THE ADDITION THE FI RST ISSUE ARISING FOR CONSIDERATION IS WITH REGARD TO THE DISALLOWANCE OF 10% OF MISC. EXP ENSES. ON VERIFICATION OF THE EXPENDITURE UNDER VARIOUS HEADS THE ASSESSING OFFI CER FOUND THAT THE EXPENDITURE IS NOT SUPPORTED BY ANY BILLS OR VOUCHERS. IN THE ABSENCE OF ANY BILLS AND VOUCHERS THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSES SEE AT AN ESTIMATED RATE OF 10%. THE CIT(A) CONFIRMED THE DISALLOWANCE MADE BY THE ASSES SING OFFICER. THE ONLY CONTENTION OF THE LD. COUNSEL IS THAT SINCE ALL THE EXPENSES W ERE MADE FOR THE PURPOSE OF BUSINESS THERE IS NO QUESTION OF ANY DISALLOWANCE. 8. ON THE CONTRARY MS. S. VIJAYABPRABHA THE LD DE PARTMENTAL REPRESENTATIVE SUBMITTED THAT IN THE ABSENCE OF ANY MATERIAL TO SU PPORT THE CLAIM OF THE ASSESSEE THE EXPENDITURE DISALLOWED BY THE ASSESSING OFFICER WAS RIGHTLY CONFIRMED BY THE CIT(A). THEREFORE NO INTERFERENCE IS CALLED FOR. THE LD. D EPARTMENTAL REPRESENTATIVE RELIED ON THE JUDGMENT OF THE KERALA HIGH COURT IN THE CASE OF HEMAMBICA CHITIES AND LOANS PVT. LTD. VS. DCIT (2004) 266 ITR 427.. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS A ND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY THE ASSESSEE HAS NOT SUBSTANTIATED THE CLAIM OF THE EXPENDITURE BY PRODUCING THE NECESSARY BILLS AND VOUCHERS BEFORE THE LOWER A UTHORITIES. THEREFORE THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE ON AN ESTIMATE BASIS. IN THE ABSENCE OF ANY MATERIAL TO SUPPORT THE CLAIM OF THE ASSESSEE WE FIND THAT THE ASSESSING OFFICER HAS RIGHTLY DISALLOWED THE CLAIM OF THE ASSESSEE ON AN ESTIMATE BASIS. HOWEVER WE FIND DISALLOWANCE AT 10% IS HIGHLY EXCESSIVE. THEREFORE DISALLOWANCE AT 5% ON THE MISCELLANEOUS EXPENSES WOULD MEET THE ENDS OF JUSTI CE. ACCORDINGLY THE ORDER OF THE AUTHORITIES BELOW ARE MODIFIED AND THE ASSESSING OF FICER IS DIRECTED TO DISALLOW 5% OF THE TOTAL MISCELLANEOUS EXPENSES INSTEAD OF 10%. I.T.A. NOS. 39 & 40 /COCH/2010 8 10. FOR THE ASSESSMENT YEAR 2005-06 THE FIRST ISS UE ARISING FOR CONSIDSERATION IS DISALLOWANCE OF MISCELLANEOUS EXPENSES ON AN ESTIMA TE BASIS. THE SAME ISSUE WAS CONSIDERED IN THE EARLIER PART OF THIS ORDER FOR TH E ASSESSMENT YEAR 2004-05. FOR THE SAME REASONS AS GIVEN IN THE EARLIER PART OF THE ORDER THE ASSESSING OFFICER IS DIRECTED TO DISALLOW 5% OF THE MISCELLANEOUS EXPENSES INSTEAD O F 10%. ACCORDINGLY THE ORDRS OF THE AUTHORITIES BELOW ARE MODIFIED. . 11. THE ASSESSEE HAS RAISED ONE MORE GROUND OF APP EAL WITH REGARD TO THE DISALLOWANCE OF INTEREST PAID ON LOAN FOR NON DEDUC TION OF TAX. SHRI T.JOHN GEORGE THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AS SESSEE OBTAINED FORM 15H/G FROM THE RESPECTIVE PERSONS. THE SAME COULD NOT BE FILED BE FORE THE COMMISSIONER. HOWEVER THE ASSESSEE FILED AN AFFIDAVIT BEFORE THE COMMISSIONE R THAT FORM 15H/G COULD NOT BE FILED SINCE THE SAME WAS LOST. ACCORDING TO THE LD. AUTH ORIZED REPRESENTATIVE ON THE BASIS OF THE AFFIDAVIT FILED BY THE ASSESSEE THE ASSESSING OFFICER OUGHT NOT TO HAVE DISALLOWED ANY PART OF THE INTEREST. 12. ON THE CONTRARY MS. S.VIJAYAPRABHA THE LD. DE PARTMENTAL REPRESENTATIVE SUBMITTED THAT SECTION 197A(2) OF THE INCOME TAX AC T SPECIFICALLY REQUIRES THE ASSESSEE TO FILE FORM 15H/G BEFORE THE COMMISSIONER IN CASE NO TAX WAS DEDUCTED AT THE TIME OF MAKING PAYMENT. THE ASSESSEE CANNOT SUBSTITUTE THE REQUIREMENT OF FORM 15H/G BY FILING AN AFFIDAVIT. THE ASSESSEE HAS TO OBTAIN T WO SETS OF FORM 15H/G AT THE TIME OF MAKING PAYMENT.. ONE SET OF 15H/G HAS TO BE RETAIN ED BY THE ASSESSEE AND ANOTHER SET HAS TO BE FILED BEFORE THE COMMISSIONER. THEREFORE EVEN THOUGH ONE SET OF FORM 15G/H WAS LOST AS CLAIMED BY THE ASSESSEE THE OTHER SET WOULD BE AVAILABLE WITH THE ASSESSEE. THE VERY FACT THAT THE ASSESSEE HAS NOT FILED ANY FORM 15H/G BEFORE THE COMMISSIONER CLEARLY SHOWS THAT THE ASSESSEE HAS NOT OBTAINED F ORM 15H/G FROM THE RESPECTIVE PERSONS. 13 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE HAS NECESSARILY TO DEDUCT TAX U/S. 197A WHEN THE INTEREST WAS PAID I.T.A. NOS. 39 & 40 /COCH/2010 9 ON LOAN. IN THIS CASE TAX WAS NOT ADMITTEDLY DEDU CTED. WHEN THE ASSESSEE HAS NOT DEDUCTED TAX IT HAS TO COLLECT FORM 15G/H FROM THE RESPECTIVE PERSONS AND FILE BEFORE THE COMMISSIONER WITHIN TIME. UNFORTUNATELY THE ASSES SEE HAS NOT FILED FORM 15H/G. THE ASSESSEE HAS FILED ONLY AN AFFIDAVIT. FORM 15H/G HAS TO BE OBTAINED FROM THE RESPECTIVE PERSONS DECLARING THAT THEY ARE NOT LIABLE TO PAY T AX. FILING AN AFFIDAVIT BY THE ASSESSEE WOULD NOT SUBSTITUTE THE FILING OF FORM 15H/G. 14. WE HAVE CAREFULLY GONE THROUGH THE DECISION OF THE CUTTACK BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. SRI KRISHNA TRADING CO (2001) 252 ITR 105 RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE. IN THIS CASE THE ASSESS ING OFFICER HAS LEVIED INTEREST UNDER SECTION 201 OF THE ACT FOR NON DEDUCTION OF TAX AN D NON FILING OF FORM 15G/H. THE CUTTACK BENCH OF THE TRIBUNAL HELD THAT UNDER SECTI ON 197A THE INCOME TAX OFFICER HAS NO JURISDICTION TO LEVY INTEREST U/S. 201 OF THE AC T. IN THE CASE BEFORE US IT IS NOT THE CASE OF LEVY OF INTEREST U/S. 201 OF THE ACT. THE ASSES SING OFFICER DISALLOWED THE INTEREST PAYMENT MADE BY THE ASSESSEE. THEREFORE THE DECIS ION OF THE CUTTACK BENCH OF THE TRIBUNAL RELIED UPON BY THE LD. COUNSEL FOR THE ASS ESSEE MAY NOT BE OF ASSISTANCE TO THE ASSESSEE. THEREFORE WE HAVE NO HESITATION IN CONF IRMING THE ORDER OF THE AUTHORITIES BELOW. 15. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. SD/- SD/- (SANJAY ARORA) (N.R.S.GANESAN) (ACCOUNTANT MEMBER) JUDICIAL MEMBER PLACE: ERNAKULAM DATED: 30TH NOVEMBER 2011 GJ COPY TO: 1. M/S. E.V.RADIO ELECTRICALS I.S. PRESS ROAD ERN AKULAM COCHIN-682 018. 2. THE INCOME TAX OFFICER WARD-2(2) RANGE-2 ERNA KULAM. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-II KOC HI. 4. THE COMMISSIONER OF INCOME-TAX KOCHI. I.T.A. NOS. 39 & 40 /COCH/2010 10 5. D.R. I.T.A.T. COCHIN BENCH COCHIN. 6. GUARD FILE .