Rimjhim Ispat Limited, Kanpur v. Asstt. Commissioner of Income Tax -VI, Kanpur

ITA 445/LKW/2013 | 2004-2005
Pronouncement Date: 31-07-2015 | Result: Partly Allowed

Appeal Details

RSA Number 44523714 RSA 2013
Assessee PAN AAACR6582K
Bench Lucknow
Appeal Number ITA 445/LKW/2013
Duration Of Justice 2 year(s) 1 month(s) 17 day(s)
Appellant Rimjhim Ispat Limited, Kanpur
Respondent Asstt. Commissioner of Income Tax -VI, Kanpur
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2015
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 31-07-2015
Date Of Final Hearing 22-06-2015
Next Hearing Date 22-06-2015
Assessment Year 2004-2005
Appeal Filed On 13-06-2013
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI A.K. GARODIA ACCOUNTANT MEMBER ITA NO.445/LKW/2013 ASSESSMENT YEAR:2004 - 05 INCOME TAX OFFICER - 6(2) KANPUR. VS M/S RIMJHIM ISPAT LIMITED 123/355 FAZAL GANJ KANPUR. PAN:AAACR6582K (RESPONDENT) (APPELLANT) ITA NO.517/LKW/2013 ASSESSMENT YEAR:2004 - 05 M/S RIMJHIM ISPAT LIMITED 123/355 FAZAL GANJ KANPUR. PAN:AAACR6582K VS INCOME TAX OFFICER - 6(2) KANPUR. (RESPONDENT) (APPELLANT) C.O. NO.31/LKW/2013 (IN ITA NO.517/LKW/2013) ASSESSMENT YEAR:2004 - 05 INCOME TAX OFFICER - 6(2) KANPUR. VS M/S RIMJHIM ISPAT LIMITED 123/355 FAZAL GANJ KANPUR. PAN:AAACR6582K (RESPONDENT) (APPELLANT) SHRI K. R. RASTOGI F.C.A. ASSESSEE BY SHRI Y. P. SRIVASTAVA D. R. REVENUE BY 24/06/2015 DATE OF HEARING 31 /07/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA A.M. THESE CROSS APPEALS FILED BY THE ASSESSEE AND REVENUE WHICH ARE DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) - 1 KANPUR DATED 28/03/2013 2 FOR THE ASSESSMENT YEAR 2004 - 05 AND THE CROSS OBJECTION IS FILED BY THE ASSESSEE FOR THE SAME ASSESSMENT YEAR. 2. GROUND NO. 1 IN ASSESSEES APPEAL IS AS UNDER: THAT LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.2 07 000/ - MADE ON ACCOUNT OF GRATUITY. 3. LEARNED A.R. OF THE ASSESSEE SUBMITTED THAT THIS GROUND IS NOT PRESSED. ACCORDINGLY THIS GROUND IS REJECTED AS NOT PRESSED. 4. GROUND NO. 2 OF THE ASSESSEE AND GROUND NO. 2 OF THE REVENUE ARE INTER CONNECTED WHICH READ AS UNDER: GROUND NO. 2 OF THE ASSESSEES APPEAL: THAT LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE TO THE EXT ENT OF RS. 61 950.15 MADE ON ACCOUNT OF TELEPHONE EXPENSES . GROUND NO. 2 OF THE REVENUES APPEAL: THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALLOWANCE MADE BY THE AO OF RS.1 65 220/ - OUT OF TELEPHONE EXPENSES TO 7.5% OF THE TOTAL EXPENSES WITHOUT GIVING ANY REASONS FOR RESTRICTING THE DISALLOWANCES AND NOT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 5. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF HON'BLE GUJARAT HIGH COURT RENDERED IN THE CASE OF SAYAJI IRON AND ENGG. CO. VS. CIT [2002] 253 ITR 749 (GUJ) . 6. WE HAVE CONSIDERED THE RIVA L SUBMISSIONS. WE FIND FORCE IN THE SUBMISSIONS OF LEARNED A.R. OF THE ASSESSEE THAT NO DISALLOWANCE IS CALLED 3 FOR IN THE CASE OF THE ASSESSEE OUT OF TELEPHONE EXPENSES ON THE BASIS THAT IT WAS PARTLY USED FOR PERSONAL PURPOSES BY THE DIRECTORS/ EMPLOYEES OF THE ASSESSEE COMPANY THE SAME CAN BE INCLUDED IN THE PERQUISITES VALUE OF THE CONCERNED DIRECTOR/ EMPLOYEE BUT THE DISALLOWANCE CANNOT BE MADE IN THE HANDS OF THE ASSESSEE COMPANY. HENCE BY RESPECTFULLY FOLLOWING THIS JUDGMENT OF HON'BLE GUJARAT HIG H COURT WE HOLD THAT NO DISALLOWANCE IS JUSTIFIED OUT OF TELEPHONE EXPENSES ON THE BASIS THAT IT WAS USED FOR PERSONAL PURPOSES BY THE DIRECTORS/EMPLOYEES OF THE ASSESSEE COMPANY. ACCORDINGLY GROUND NO. 2 OF THE ASSESSEE STANDS ALLOWED AND GROUND NO. 2 OF THE REVENUE STANDS DISMISSED. 7. GROUND NO. 3 OF ASSESSEES APPEAL AND GROUND NO. 3 OF REVENUES APPEAL ARE INTER CONNECTED WHICH READ AS UNDER: GROUND NO. 3 OF THE ASSESSEES APPEAL: THAT LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE TO THE EXTENT OF RS. 2 94 108.15 MADE ON ACCOUNT OF FREIGHT & CARTAGE (OUTWARD) . GROUND NO. 2 OF THE REVENUES APPEAL: THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALLOWANCE MADE BY THE AO OF RS.17 64 649/ - OUT OF FREIGHT AND CART AGE EXPENSES TO 5% OF THE TOTAL EXPENSES WITHOUT GIVING ANY REASONS FOR RESTRICTING THE DISALLOWANCES AND NOT APPRECIATING THE FACTS THAT MOST OF THE DISALLOWANCES WERE MADE ON ACCOUNT OF CASH PAYMENT FOR WHICH NO RECORDS WERE MAINTAINED BY THE ASSESSEE CO MPANY. 8. BOTH THE SIDES AGREED THAT THIS ISSUE IS IDENTICAL TO THE ISSUE RAISED IN ASSESSMENT YEAR 2001 - 02 AND 2003 - 04 OF THE CROSS APPEALS OF THE ASSESSEE AND REVENUE WHICH WAS HEARD ON 23/06/2015 AND THE SAME CAN BE DECIDED ON SIMILAR LINE. 4 9. WE HA VE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IN THE PRESENT YEAR THE ASSESSEE HAS CLAIM AN AMOUNT OF RS.188.02 LAC UNDER THE HEAD FREIGHT & CARTAGE (OUTWARD) AS COMPARED TO RS.108.19 LAC IN THE PRECEDING YEAR. IN THE PRESENT YEAR THE TURNOVER IS R S.17 869.78 LAC AS AGAINST THE TURNOVER OF RS.16 978.55 LAC IN ASSESSMENT YEAR 2003 - 04. HENCE THE INCREASE IN TURNOVER IN THE PRESENT YEAR IS AROUND 5% BUT THE INCREASE IN EXPENSES UNDER THIS HEAD IS ABOUT 74% WHICH IS QUITE ABNORMAL. IT IS ALSO NOTED BY THE ASSESSING OFFICER THAT AT LEAST RS.58.82 LAC HAS BEEN INCURRED IN CASH. THE ASSESSING OFFICER HAS MADE DISALLOWANCE OF 30% OF SUCH EXPENSES WHICH WERE INCURRED IN CASH. THE CIT(A) HAS HELD THAT THE GENUINENESS OF EXPENDITURE INCURRED IN CASH AND ON SELF - MADE VOUCHERS CANNOT BE DOUBTED IN ALL CASES AND HELD THAT DISALLOWANCE OF 5% AS AGAINST 30% MADE BY THE ASSESSING OFFICER IS REASONABLE. IN OUR CONSIDERED OPINION THE ORDER OF CIT(A) IS NOT SUSTAINABLE BECAUSE THIS IS NOT THE BASIS OF THE ASSESSI NG OFFICER THAT THE EXPENSES WERE INCURRED IN CASH. THE MAIN BASIS IS THAT THE EXPENSES ARE ABNORMALLY HIGH. WHEN SUCH ABNORMAL INCREASE IN THE EXPENSES IS CONSIDERED IN THE LIGHT OF THE FACTS THAT MAJORITY PORTION OF INCREASE IN EXPENDITURE IS INCURRED IN CASH THE DISALLOWANCE OF 30% IS NOT EXCESSIVE AND UNREASONABLE. WE THEREFORE REVERSE THE ORDER OF CIT(A) AND RESTORE THAT OF THE ASSESSING OFFICER. ACCORDINGLY GROUND NO. 3 OF THE ASSESSEE IS REJECTED AND GROUND NO. 3 OF THE REVENUE IS ALLOWED. 10. GROUND NO. 4 OF THE ASSESSEES APPEAL IS AS UNDER: THAT LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE TO THE EXTENT OF RS. 1 93 633.60 MADE ON ACCOUNT OF VEHICLE RUNNING & MAINTENANCE. 11. GROUND NO. 4 OF THE REVENUES APPEAL IS AS UNDER: THE LD. CIT(AJ HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE 5 DISALLOWANCE MADE BY THE AO OF RS.4 89 084/ - OUT OF VEHICLE RUNNING MAINTENANCE AND DEPRECIATION EXPENSES TO 10% OF THE TOTAL EXPENSES WITHOUT GIVING ANY REASONS FOR RESTRICTING THE DISALLOWANCES AND NOT APPRECIATING THE FACTS THAT NO LOG BOOK WAS MAINTAINED BY THE ASSESSEE COMPANY. 12. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THE PRESENT ISSUE IS COVERE D IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF HON'BLE GUJARAT HIGH COURT RENDERED IN THE CASE OF SAYAJI IRON AND ENGG. CO. VS. CIT [2002] 253 ITR 749 (GUJ). 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND FORCE IN THE SUBMISSIONS OF LEARNED A.R. O F THE ASSESSEE THAT NO DISALLOWANCE IS CALLED FOR IN THE CASE OF THE ASSESSEE OUT OF VEHICLE RUNNING AND MAINTENANCE ON THE BASIS THAT IT WAS PARTLY USED FOR PERSONAL PURPOSES BY THE DIRECTORS/ EMPLOYEES OF THE ASSESSEE COMPANY THE SAME CAN BE INCLUDED IN THE PERQUISITES VALUE OF THE CONCERNED DIRECTOR/ EMPLOYEE BUT THE DISALLOWANCE CANNOT BE MADE IN THE HANDS OF THE ASSESSEE COMPANY. HENCE BY RESPECTFULLY FOLLOWING THIS JUDGMENT OF HON'BLE GUJARAT HIGH COURT WE HOLD THAT NO DISALLOWANCE IS JUSTIFIED OU T OF VEHICLE RUNNING AND MAINTENANCE ON THE BASIS THAT IT WAS USED FOR PERSONAL PURPOSES BY THE DIRECTORS/EMPLOYEES OF THE ASSESSEE COMPANY. ACCORDINGLY GROUND NO. 4 OF THE ASSESSEE STANDS ALLOWED AND GROUND NO. 4 OF THE REVENUE STANDS DISMISSED. 14. G ROUND NO. 5 OF THE ASSESSEE AND CONNECTED GROUND NO. 6 OF THE REVENUE ARE AS UNDER: GROUND NO. 5 OF THE ASSESSEES APPEAL: THAT LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE TO THE EXTENT OF RS. 1 10 34 2456.00 MADE ON ACCOUNT OF CONSUMABLE STORES. 6 GROUND NO. 6 OF THE REVENUES APPEAL: THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALLOWANCE MADE BY THE AO OF RS.2 20 68 492/ - OUT OF CONSUMABLE STORES EXPENSES TO 5% OF THE TOTAL EXPENSES WITHOUT GIVING ANY REASONS FOR RESTRICTING THE DISALLOWANCES AND NOT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 15. IT WAS AGREED THAT THIS ISSUE IS ALSO SIMILAR TO THE ISSUE RAISED IN THE CROSS APPEAL OF THE ASSESSEE AND REVENUE IN ASSESSMENT YEAR 2001 - 02 AND 2003 - 04 AND THE SAME CAN BE DECIDED ON SIMILAR LINE. 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IN THE PRESENT YEAR THE ASSESSEE HAS CLAIMED AN AMOUNT OF RS.2206.85 LAC UNDER THE HEAD CONSUMABLE STORE AS COMPARED TO RS.2286.27 LAC IN ASSESSMENT YEAR 2003 - 04. THE ASSESSING OFFICER MADE DISALLOWANCE OF 10% ON THE BASIS THAT THE EXPENSES WERE NOT OPEN TO COMPLETE VERIFICATION. THE CIT(A) HAS HELD THAT THE DISALLOWANCE OF 5% WILL MEET THE ENDS OF JUSTICE. W HILE DECIDING THE APPEAL OF THE ASSESSEE AND REVENUE FOR ASSESSMENT YEAR 2003 - 04 WE HAVE HELD THAT NO DISALLOWANCE IS JUSTIFIED BECAUSE INCREASE IN TURNOVER IN ASSESSMENT YEAR 2003 - 04 AS COMPARED TO ASSESSMENT YEAR 2001 - 02 WAS MORE THAN INCREASE IN CLAIM OF EXPENSES UNDER THIS HEAD IN ASSESSMENT YEAR 2003 - 04 AS COMPARED TO ASSESSMENT YEAR 2001 - 02 AND THEREFORE IT WAS HELD THAT NO DISALLOWANCE IS JUSTIFIED. IN THE PRESENT YEAR WE HAVE SEEN THAT ALTHOUGH THERE IS INCREASE IN TURNOVER OF 5% THE EXPENSES UN DER THIS HEAD HAVE GONE DOWN TO RS.2206.85 LAC AS COMPARED TO RS.2286 LAC IN ASSESSMENT YEAR 2001 - 02. UNDER THESE FACTS IN OUR CONSIDERED OPINION NO DISALLOWANCE IS JUSTIFIED. WE HOLD ACCORDINGLY. GROUND NO. 5 OF THE ASSESSEE IS ALLOWED AND GROUND NO. 6 OF THE REVENUE IS REJECTED. 7 17. GROUND NO. 6 OF THE ASSESSEES APPEAL IS AS UNDER: THAT LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 65 651/ - MADE ON ACCOUNT OF TRAVELLING & CONVEYANCE (DIRECTOR) . 18. LEARNED A.R. OF THE ASSESSEE R EITERATED THE SAME CONTENTIONS WHICH WERE RAISED BEFORE CIT(A). LEARNED D. R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 19. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IT IS NOTED BY THE ASSESSING OFFICER IN THE ASSESSMEN T ORDER THAT THE ASSESSEE HAS DEBITED RS.2 60 605/ - UNDER THE HEAD TRAVELLING & CONVEYANCE (DIRECTOR) AND WHEN THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THIS EXPENDITURE THE ASSESSEE COULD NOT PRODUCE ANY DOCUMENTARY EVIDENCE AND THE ASSESSEE SHOWN ITS INABILITY TO PRODUCE ANY DOCUMENTARY EVIDENCE. UNDER THESE FACTS THE ASSESSING OFFICER MADE DISALLOWANCE OF 25%. THE CIT(A) ALSO HELD THAT THE ASSESSEE COULD NOT PRODUCE ANY DOCUMENTARY EVIDENCE. BEFORE US ALSO NO DOCUMENTARY EVIDENCE WAS PR ODUCED THEREFORE WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF CIT(A). THIS GROUND OF ASSESSEE IS REJECTED. 20. GROUND NO. 7 OF THE ASSESSEE AND CONNECTED GROUND NO. 7 OF THE REVENUE ARE AS UNDER: GROUND NO. 7 OF THE ASSESSEE: THAT LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE TO THE EXTENT OF RS. 19 433.50/ - MADE ON ACCOUNT OF GENERAL EXPENSES. GROUND NO. 7 OF REVENUE: THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALLOWANCE MADE BY THE AO OF RS.38 887/ - OUT OF 8 ADMINISTRATIVE EXPENSES TO 5% OF THE TOTAL EXPENSES WITHOUT GIVING ANY REASONS FOR RESTRICTING THE DISALLOWANCES AND NOT APPRECIATING THE FAC TS BROUGHT ON RECORD BY THE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 21. LEARNED A.R. OF THE ASSESSEE REITERATED THE SAME CONTENTIONS WHICH WERE RAISED BEFORE CIT(A). LEARNED D. R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 22. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IT IS NOTED BY THE ASSESSING OFFICER IN PARA 8 OF THE ASSESSMENT ORDER THAT THE ASSESSEE HAS CLAIMED AN AMOUNT OF RS.3 88 869/ - UNDER THE HEAD SELLING DISTRIBUTION AND ADMINISTRATIVE EXPENSES. HE HAS FURTHER NOTED THAT DURING THE EXAMINATION OF BILLS PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS FOUND THAT THE EXPENSES WERE INCURRED IN CASH AND CANNOT BE HELD THAT THESE ARE FULLY VERIFIABLE AND HE MADE DISALLOWANCE OF 10% . WHEN T HE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE CIT(A) IT WAS HELD BY HIM THAT GENERAL EXPENSES INCURRED DURING THE YEAR DO NOT SHOW ANY INCREASE AS COMPARED TO EARLIER YEAR THEREFORE NO DISALLOWANCE IS REQUIRED TO BE MADE UNDER THIS HEAD. IN VIEW OF TH IS FINDING OF LEARNED CIT(A) IN PARA 5.3 OF HIS ORDER WE ARE OF THE CONSIDERED OPINION THAT GROUND NO. 7 RAISED BY THE ASSESSEE IS NOT ARISING OUT OF THE ORDER OF CIT(A) BECAUSE IT IS HELD BY CIT(A) IN NO DISALLOWANCE IS CALLED FOR UNDER THE HEAD GENERAL EXPENSES. MOREOVER WE FEEL THAT THE EXPENSES DEBUTED UNDER THE HEAD GENERAL EXPENSES ARE SMALL DAY TO DAY EXPENSES INCURRED FOR NEWSPAPER JOURNALS MAGAZINES REFRESHMENT FOR CUSTOMERS TYPEWRITER REPAIRING EXPENSES AS NOTED BY THE ASSESSING OFFICER IN PARA 8 OF THE ASSESSMENT ORDER AND INCURRING OF SUCH EXPENSES IN CASH IS QUITE NORMAL AND THEREFORE MERELY FOR THIS REASON THAT THE EXPENSES ARE INCURRED IN CASH NO DISALLOWANCE IS JUSTIFIED. ACCORDINGLY GROUND NO. 7 OF THE ASSESSEE IS ALLOWED AND GROUND NO. 7 OF THE REVENUE IS REJECTED. 9 23. GROUND NO. 8 OF THE ASSESSEE AND CONNECTED GROUND NO. 1 OF THE REVENUE ARE AS UNDER: GROUND NO. 8 OF THE ASSESSEE: THAT LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE TO THE EXTENT OF RS. 85 166.50/ - MADE ON ACCOUNT OF REPAIRS & MAINTENANCE (BUILDING). GROUND NO. 1 OF REVENUE: THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALLOWANCE MADE BY THE AO OF RS.1 70 333/ - OUT OF REPAIR AND MAINTENANCE EXPENSES TO 5% OF THE TOTAL EXPENSES WITHOUT APPRECIATING THE FACTS THAT MOST OF THE DISALLOWANCES WERE MADE ON ACCOUNT OF CASH PAYMENT FOR WHICH NO RECORDS WERE MAINTAINED BY THE ASSESSEE COMPANY. 24. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNE D A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A) WITH REGARD TO THE RELIEF ALLOWED BY HIM. HE ALSO SUBMITTED THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS ON AD HOC BASIS THEREFORE ENTIRE DISALLOWANCE SHOULD BE DELETED. 25. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS NOTED THAT THE ASSESSEE HAS CLAIMED AN AMOUNT OF RS.17 03 329/ - AS AGAINST RS.5 10 095/ - IN THE PRECEDING YEAR UNDER THE HEAD REPAIRS AND MAINTENANCE OF BUI LDING. THE ASSESSING OFFICER HELD THAT THE EXPENSES ARE NOT FULLY VERIFIABLE AND MADE DISALLOWANCE OF 10%. WHEN THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE CIT(A). IT WAS HELD BY HIM THAT THE EXPENSES INCURRED IN THE PRESENT YEAR IS QUITE HIGH AT RS.17.03 LAC AS AGAINST RS.5.10 LAC IN THE PRECEDING YEAR AND HE UPHELD THE DISALLOWANCE OF 5% AS AGAINST 10% MADE BY THE ASSESSING OFFICER. IN OUR CONSIDERED OPINION EXPENSES 10 INCURRED IS NOT DEPENDENT ON TURNOVER AND THE SAME CAN BE VERY HIGH IN ONE YE AR AND VERY LOW IN SOME OTHER YEAR AND THEREFORE ONLY FOR THIS REASON THAT THE EXPENSES INCURRED ON ACCOUNT OF REPAIRS & MAINTENANCE OF BUILDING IS VERY HIGH NO DISALLOWANCE CAN BE MADE. SINCE NO OTHER REASON IS GIVEN FOR MAKING THE DISALLOWANCE WE HOL D THAT NO PART OF THIS DISALLOWANCE CAN BE CONFIRMED. GROUND NO. 8 OF THE ASSESSEE IS ALLOWED AND GROUND NO. 1 OF THE REVENUE IS REJECTED. 26. GROUND NO. 5 OF THE REVENUE IS AS UNDER: THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISA LLOWANCE MADE BY THE AO OF RS.52 036/ - OUT OF GENERATOR EXPENSES TO 5% OF THE TOTAL EXPENSES WITHOUT GIVING ANY REASONS FOR RESTRICTING THE DISALLOWANCES AND NOT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDIN GS. 27. LEARNED D. R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A. R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). 28. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IT IS NOTED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAS CLAIMED AN AMOUNT OF RS.5 20 355/ - AS AGAINST RS.4 91 690/ - IN THE PRECEDING YEAR UNDER THE HEAD GENERATOR RUNNING & MAINTENANCE. THE ASSESSING OFFICERS OBJECTION IS THAT THE ELECTRICITY SUPPLY MUST BE PROVIDED TO THE RESIDENCE OF DIRECTORS AND STAFF QUARTERS. THEREFORE HE HELD THAT 10% DISALLOWANCE IS CALLED FOR. THE CIT(A) HAS HELD THAT SINCE THERE IS NO ABNORMA L INCREASE IN THE EXPENSES NO DISALLOWANCE IS JUSTIFIED UNDER THIS HEAD. CONSIDERING THE FACTS OF THE PRESENT CASE THAT THERE IS NO ABNORMAL INCREASE IN THE EXPENSES IN THE PRESENT YEAR AND CONSIDERING THE RATIO LAID DOWN BY HON'BLE GUJARAT HIGH COURT IN THE CASE OF SAYAJI IRON (SUPRA) THAT 11 FOR PERSONAL USE OF THE ASSETS/FACILITIES OF THE ASSESSEE COMPANY THE SAME CAN BE INCLUDED IN THE PERQUISITES VALUE OF THE CONCERNED DIRECTOR/ EMPLOYEE BUT THE DISALLOWANCE CANNOT BE MADE IN THE HANDS OF THE ASSESSEE COMPANY. THEREFORE WE DECLINE TO INTERFERE IN THE ORDER OF CIT(A) ON THIS ISSUE. ACCORDINGLY GROUND NO. 5 OF THE REVENUE IS REJECTED. 29. IN THE RESULT THE APPEAL OF THE ASSESSEE AS WELL AS APPEAL OF THE REVENUE ARE PARTLY ALLOWED. 30. REGARDING TH E CROSS OBJECTION FILED BY THE ASSESSEE LEARNED A.R. OF THE ASSESSEE SUBMITTED THAT THE CROSS OBJECTION IS NOT PRESSED AND ACCORDINGLY THE SAME IS DISMISSED AS NOT PRESSED. 31. IN THE COMBINED RESULT THE APPEAL OF THE ASSESSEE AND THE REVENUE ARE PARTL Y ALLOWED AND CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 31 /07/2015 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R. I.T.A.T. LUCKNOW ASSTT. REGISTRAR