M/s Lakhani Foot Care, v. THE Adll CIT 5,

ITA 498/IND/2008 | 2004-2005
Pronouncement Date: 24-03-2010 | Result: Partly Allowed

Appeal Details

RSA Number 49822714 RSA 2008
Bench Indore
Appeal Number ITA 498/IND/2008
Duration Of Justice 1 year(s) 3 month(s) 16 day(s)
Appellant M/s Lakhani Foot Care,
Respondent THE Adll CIT 5,
Appeal Type Income Tax Appeal
Pronouncement Date 24-03-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 24-03-2010
Assessment Year 2004-2005
Appeal Filed On 08-12-2008
Judgment Text
1 THE INCOME TAX APPELATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER ITA NOS.162/IND/07 497 & 498/IND/08 A.YS 2003-04 TO 2005-06 M/S LAKHANI FOOTCARE LIMITED INDORE PAN AAACL-2904-P APPELLANT VS ASSTT. COMMR. OF INCOMETAX 5(1) INDORE RESPONDENT ASSESSEE BY SHRI S.K. MADAAN CA DEPARTMENT BY SHRI RAJPAL SINGH SR. DR O R D E R PER BENCH THESE APPEALS BELONG TO THE SAME ASSESSEE AND INVO LVE COMMON ISSUES HENCE THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF THROUGH THIS CONSOLIDATED ORDER F OR THE SAKE OF CONVENIENCE. 2 ITA NO. 162/IND/07 2. IN THIS APPEAL THE ASSESSEE IS AGGRIEVED BY THE DECISION OF THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) IN CONFIRMING THE ADDITION OF RS. 36.45 LACS OUT OF IN TEREST CLAIMED BY THE ASSESSEE AS AN EXPENDITURE BY INVOKI NG THE PROVISIONS OF SECTION 14A OF THE INCOMETAX ACT 196 1. 3. DURING THE COURSE OF HEARING IT WAS BROUGHT TO THE NOTICE OF THE ASSESSEE ON THE ISSUES PERTAINING TO APPLICA TION OF SECTION 14A OF THE ACT WHERE THE DECISION OF THE SP ECIAL BENCH IN THE CASE OF DAGA CAPITAL MANAGEMENT PRIVAT E LIMITED HAD TO BE TAKEN INTO CONSIDERATION THEN A S PER THE ADMINISTRATIVE INSTRUCTIONS SUCH APPEALS WERE NOT TO BE HEARD. THE LEARNED COUNSEL FOR THE ASSESSEE CLARIFIED THAT IN THE PRESENT CASE IN SUM AND SUBSTANCE A NOTIONAL DISA LLOWANCE HAS BEEN MADE OUT OF INTEREST BEARING FUNDS FOR THE REASON THAT THE ASSESSEE HAD INVESTED A HUGE SUM IN THE CA PITAL OF A PARTNERSHIP FIRM WHEREFROM THE INCOME EARNED BY WA Y OF SHARE IN PROFIT WAS EXEMPT FROM TAX. IT WAS ALSO H ELD THAT THE BORROWED FUNDS HAD BEEN UTILISED BY THE ASSESSEE TO MAKE SUCH INVESTMENT AND THE ASSESSEE HAD FAILED TO PROV E THE 3 NEXUS BETWEEN THE INTEREST FREE FUNDS AND INVESTMEN T SO MADE. IT WAS ALSO SUBMITTED THAT THE LEARNED COMMI SSIONER OF INCOMETAX (APPEALS) FOLLOWED THE ORDER OF THE HONB LE PUNJAB & HARYANA HIGH COURT IN THE CASE OF ABHISHEK INDUST RIES LIMITED; 286 ITR 1 WHEREAS THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF R.D. JOSHI & COMPANY; 251 ITR 332 WAS IN FAVOUR OF THE ASSESSEE. IT WAS ALSO CONTENDED THAT THE PROVISIONS OF SECTION 14A OF THE ACT WERE CASUALLY REFERRED TO. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO DREW OUR ATTENTION TO PAGE 33 OF THE PAPER BOO K CONTAINING DETAILS OF BALANCE OUTSTANDING IN THE BO OKS OF THE SAID FIRM AND HOW IT WAS ACCUMULATED. HE CONTENDED THAT A SUM OF RS. 10 LACS HAD BEEN INVESTED IN THE ASSESSM ENT YEAR 1989-90 AND THAT TOO FROM RESERVES AND SURPLUS AND THEREAFTER DUE TO INTEREST AND PROFIT EARNED BY TH E ASSESSEE FIRM THE SAID INVESTMENT BECAME RS.270 LACS IN THE ASSESSMENT YEAR 2003-04. HE FURTHER CONTENDED THAT IN SUCH OUTSTANDING SUM THE INTEREST AND PROFIT COMPONENT WAS TO THE TUNE OF RS. 231 LACS. HE ALSO SUBMITTED THAT THERE WERE WITHDRAWALS IN SOME YEARS HOWEVER THE SAME WERE R E- 4 PLUGGED IN THE SAID PARTNERSHIP FIRM BUT THE FACT R EMAINED THAT THE ASSESSEE NEVER UTILISED ANY BORROWED FUNDS. TH E LEARNED COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT THE BA LANCE SHEET AS WELL AS ALL THESE DETAILS HAD BEEN PLACED BEFORE THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS). HOWEV ER HE HELD THAT THE ONUS WAS NOT ON THE REVENUE TO PROVE THE NEXUS AND ALSO HELD THAT THE ASSESSEE FAILED TO SUBSTANTI ATE ITS CLAIMS BY ADDUCING NECESSARY EVIDENCE/SUPPORTING DO CUMENTS AND DID NOT SPELL OUT AS TO WHICH DETAILS WERE FURT HER REQUIRED. 4. THE LEARNED SENIOR DR REPRESENTING THE DEPARTMEN T HOWEVER PREFERRED TO PLACE STRONG RELIANCE ON THE ORDER OF THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS). 5. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES MATERIAL ON RECORD AND THE ORDERS OF THE AUT HORITIES BELOW. IT IS NOTED THAT IN THE PRESENT APPEAL NO IS SUE OF RETROSPECTIVE APPLICATION OF RULE 8D IS INVOLVED. FURTHER THE INTEREST INCOME EARNED BY THE ASSESSEE ON THE CAPIT AL WITH THE PARTNERSHIP FIRM IS ALSO TAXABLE. WE FURTHER FIND T HAT THE ASSESSEE HAS SUBMITTED NECESSARY DETAILS BEFORE THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) AS IT APPEARS F ROM A 5 GLANCE ON THE MATERIAL PRODUCED BEFORE US. HOWEVER SINCE THE ISSUE INVOLVED REQUIRES INVESTIGATION/VERIFICAT ION OF FACTS AS TO WHETHER THE BORROWED FUNDS HAD BEEN USED IN MAKI NG SUCH INVESTMENTS OR NOT OR THE ASSESSEE WAS HAVING SUFFI CIENT INTERNAL ACCRUALS/CASH FLOW TO MAKE SUCH INVESTMENT IN RESPECTIVE YEARS. WE ARE OF THE VIEW THAT THE DECI SION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF R. D. JOSHI & COMPANY (SUPRA) SHOULD HAVE ALSO BEEN TAKEN INTO CONSIDERATION BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WHILE DECIDING THE ISSUE. IN THIS BACKGR OUND WE CONSIDER THAT THE MATTER SHOULD GO BACK TO THE FILE OF THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) TO DECI DE THE SAME AFRESH AS PER LAW AFTER GIVING ADEQUATE OPPORT UNITY OF BEING HEARD TO THE ASSESSEE AND ALSO AFTER TAKING I NTO CONSIDERATION THE SAID DECISION OF THE HONBLE JURI SDICTIONAL HIGH COURT. WE ALSO DIRECT THE ASSESSEE TO SUBMIT NECESSARY DETAILS TO ENABLE THE LEARNED COMMISSIONER OF INCOM ETAX (APPEALS) TO FIND OUT THE FACT OF INTEREST FREE FUN DS BEING UTILISED FOR MAKING SUCH INVESTMENTS. ACCORDINGLY THIS GROUND OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURP OSES. 6 6. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 497/IND/07 7. WE FIND THAT THE ISSUE INVOLVED IN THIS APPEAL I S IDENTICAL TO THE ISSUE INVOLVED IN THE ABOVE APPEAL. WE THE REFORE FOR THE REASONS DISCUSSED ABOVE SET ASIDE THE ORDERS O F THE AUTHORITIES BELOW AND RESTORE THIS APPEAL TO THE FI LE OF THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) WITH TH E DIRECTION TO DECIDE THE SAME AFRESH AFTER TAKING IN TO CONSIDERATION THE DIRECTIONS GIVEN BY US IN THE ABO VE APPEAL. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ITA NO. 498/IND/07 9. GROUND NO. 1 RAISED BY THE ASSESSEE IN THIS APPE AL IS SIMILAR TO THE ISSUE RAISED IN THE ABOVE APPEALS. WE THEREFORE FOR THE REASONS DISCUSSED ABOVE SET ASI DE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THIS AP PEAL TO THE FILE OF THE LEARNED COMMISSIONER OF INCOMETAX (APPE ALS) WITH THE DIRECTION TO DECIDE THE SAME AFRESH AFTER TAKIN G INTO CONSIDERATION THE DIRECTIONS GIVEN BY US IN THE ABO VE APPEAL. 7 10. IN THE RESULT THIS GROUND OF APPEAL OF THE ASS ESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 11. ON GROUND NO. 2A THE ASSESSEE IS AGGRIEVED BY THE DECISION OF THE LEARNED COMMISSIONER OF INCOMETAX ( APPEALS) IN CONFIRMING THE ADDITION OF RS. 6 67 397/- MADE B Y THE ASSESSING OFFICER IN RESPECT OF PERQUISITES. 12. THE FACTS IN BRIEF ARE THAT THE ASSESSING O FFICER FOUND THAT THE ASSESSEE HAD CLAIMED CLUB EXPENSES TO THE TUNE OF RS.59 679/- RELATING TO VARIOUS CLUBS WHERE THE MAN AGING DIRECTOR WAS A MEMBER. THE ASSESSING OFFICER DISAL LOWED THE SAME. SIMILARLY THE ASSESSEE COMPANY HAD DEBITED A SUM OF RS. 7 09 315/- ON ACCOUNT OF CAR FACILITY TO MANAGI NG DIRECTOR FOR BUSINESS AND PERSONAL USE. THE ASSESSING OFFIC ER DISALLOWED 25% OF SUCH EXPENSES TREATING THE SAME A S INCURRED FOR PERSONAL USE OF THE MANAGING DIRECTOR. SIMILARLY THE ASSESSING OFFICER ALSO DISALLOWED 20% OF TELEPH ONE EXPENSES FOR PERSONAL USE AND WORKED OUT THE SAME A T RS.86 147/-. 13. THE ASSESSEE BEING AGGRIEVED PREFERRED AN APP EAL BEFORE THE LEARNED COMMISSIONER OF INCOMETAX (APPEA LS) WHO 8 CONFIRMED THE ACTION OF THE ASSESSING OFFICER IGNOR ING THE CONTENTIONS OF THE ASSESSEE THAT RESTRICTION IN THE BOARD RESOLUTION DATED 8.1.2002 IN RESPECT OF PERQUISITES EQUAL TO ONE YEAR SALARY HAD BEEN MODIFIED SUBSEQUENTLY HEN CE THE ASSESSING OFFICER SHOULD NOT HAVE MADE ANY DISALLOW ANCE. IT WAS FURTHER CONTENDED THAT THE MANAGING DIRECTOR HA D INCLUDED THE VALUE OF PERQUISITES ON SUCH ASSETS AN D OFFERED THE SAME FOR TAXATION IN HIS PERSONAL RETURN. THE ASSESSEE ALSO SUBMITTED COPY OF RESOLUTION DATED 3.12.2003 A ND REQUESTED THE LEARNED COMMISSIONER OF INCOMETAX (AP PEALS) TO ADMIT THE SAME AS ADDITIONAL EVIDENCE UNDER RULE 46A WHICH WAS NOT ACCEDED TO BY THE LEARNED COMMISSIONE R OF INCOMETAX (APPEALS). AGGRIEVED BY THIS THE ASSESS EE IS IN APPEAL BEFORE US. 14. THE LEARNED COUNSEL FOR THE ASSESSEE NARRATED T HE FACTS AND SUBMITTED THAT THE ISSUE OF ALLOWANCE OF CLUB E XPENSES WAS COVERED IN FAVOUR OF THE ASSESSEE BY THE RECENT DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF HERO HONDA MOTORS AS REPORTED IN 103 ITD 157 (SB). HE FURTHER CONTENDED THAT AS REGARDS THE DISALLOWANCE OUT OF CAR AND TEL EPHONE 9 EXPENSES FOR PERSONAL USE IT WAS A CASE OF A COMPA NY AND THEREFORE NO SUCH DISALLOWANCE COULD BE MADE. HE PLACED RELIANCE ON THE DECISION OF THE HONBLE GUJARAT HIG H COURT IN THE CASE OF DINESH MILLS LIMITED V. CIT; 268 ITR 502. THE LEARNED SENIOR DR HOWEVER PLACED STRONG RELIANCE ON THE ORDER OF THE LEARNED COMMISSIONER OF INCOMETAX (APP EALS). 15. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES MATERIAL ON RECORD AND THE ORDERS OF THE AUT HORITIES BELOW. IT IS NOTED THAT THE IMPUGNED DISALLOWANCES MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) ARE LIABLE TO B E DELETED IN VIEW OF THE JUDICIAL DECISIONS CITED BY THE LEAR NED COUNSEL FOR THE ASSESSEE AS IN THE CASE OF A COMPANY NO DI SALLOWANCE CAN BE MADE ON ACCOUNT OF PERSONAL USE AND CLUB EXP ENSES ARE TO BE TREATED AS INCURRED BY THE COMPANY FOR PR OMOTING ITS BUSINESS INTERESTS. THUS GROUND NO. 2A STANDS ALL OWED. 16. IN GROUND NO. 2B THE ASSESSEE IS AGGRIEVED BY THE DECISION OF THE LEARNED COMMISSIONER OF INCOMETAX ( APPEALS) IN CONFIRMING THE DISALLOWANCE OF RS.28 13 552/- MA DE BY THE ASSESSING OFFICER IN RESPECT OF ASSETS INSTALLED AT MDS 10 RESIDENCE. 17. THE FACTS IN BRIEF ARE THAT THE ASSESSEE CLA IMED DEPRECIATION OF RS. 17 97 409/- ON THE ASSETS INSTA LLED AT THE RESIDENCE OF THE MD. SUCH ASSETS COMPRISED OF AIR- CONDITIONER ELECTRICAL INSTALLATION PLANT AND MAC HINERY GENERATOR ESCALATORS TELEPHONE ETC. THE ASSESSI NG OFFICER REQUIRED THE ASSESSEE TO EXPLAIN AS TO HOW THESE AS SETS COULD BE CONSIDERED AS UTILISED FOR THE BUSINESS OF THE A SSESSEE. THE ASSESSEE SUBMITTED BOARD CIRCULAR NO. 29D(XIX-1 4) F. NO. 45/239-65-IT DATED 31.8.1965 WHEREIN IT HAD BEE N OPINED BY THE BOARD THAT SUCH ASSETS EMPLOYED AT THE RESID ENCE OF THE EMPLOYEES SHOULD BE CONSIDERED TO HAVE BEEN USE D FOR THE PURPOSE OF BUSINESS. THE ASSESSING OFFICER HOW EVER HELD THAT THE SAID CIRCULAR WAS NOT APPLICABLE AS IN THA T CIRCULAR THE ASSETS LIKE FAN AC REFRIGERATOR WERE ONLY MENTIO NED. ACCORDINGLY HE DISALLOWED THE DEPRECIATION OF RS.1 7 97 409/-. THE ASSESSING OFFICER FURTHER ADDED A SUM OF RS.10 16 145/- WHICH WAS THE VALUE OF PERQUISITES SHOWN BY THE MD IN HIS RETURN @ 10% OF THE VALUE OF SUCH ASSETS. 11 18. AGGRIEVED BY THIS THE ASSESSEE PREFERRED AN AP PEAL BEFORE THE LEARNED COMMISSIONER OF INCOMETAX (APPEA LS) WHO UPHELD THE ACTION OF THE ASSESSING OFFICER FOR THE REASON THAT NOTHING HAD BEEN BROUGHT ON RECORD TO ESTABLISH THA T ALL THESE ASSETS WERE UTILISED BY THE MANAGING DIRECTOR FOR T HE PURPOSE OF BUSINESS ONLY. AGGRIEVED BY THIS THE ASSESSEE IS IN APPEAL BEFORE US. 19. THE LEARNED COUNSEL FOR THE ASSESSEE NARRATED THE FACTS AND REITERATED THE SUBMISSIONS MADE BEFORE THE LEAR NED COMMISSIONER OF INCOMETAX (APPEALS). THE LEARNED D R ON THE OTHER HAND PLACED STRONG RELIANCE ON THE ORDER OF THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS). 20. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES MATERIAL ON RECORD AND THE ORDERS OF THE AUT HORITIES BELOW. IT IS NOTED THAT ON THESE ASSETS THE MD OF THE ASSESSEE HAS OFFERED A SUM OF RS.10 16 145/- AS PER QUISITE IN HIS INDIVIDUAL CAPACITY. THIS AMOUNT HAS NOT BEEN CLAIMED BY THE ASSESSEE AS DEDUCTION AT ALL HENCE THE SAME C ANNOT BE ADDED IN THE HANDS OF THE COMPANY. THUS THIS ADDI TION IS DELETED. AS REGARDS THE ISSUE OF ALLOWABILITY OF DE PRECIATION ON 12 ASSETS INSTALLED AT THE RESIDENCE OF THE MD WE FIN D THAT THE ASSESSEE HAS OFFERED THE PERQUISITE IN HIS HANDS AS PER RULES IN RESPECT OF SUCH ASSETS AND THEREFORE SUCH ASSE TS HAVE TO BE TREATED AS HAVE BEEN UTILISED FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. ACCORDINGLY THIS PART OF THE GROUND IS ALSO ACCEPTED. THUS GROUND NO. 2B IS ALSO ALLOWED. 21. GROUND NO. 3 READS AS UNDER :- ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEA RNED CIT(A) WAS NOT JUSTIFIED TO CONFIRM THE DISALLOWANC E OF RS.774603/- OUT OF INTEREST IN RESPECT OF ADVANCES MADE TO THE PARTIES IN THE ORDINARY COURSE OF BUSINESS. FURTHER IT IS SUBMITTED THAT THE LD. CIT(APPEALS) OUGHT TO HAVE ACCEPTED APPLICATION OF THE APPELLANT UNDER SE CTION 46A OF THE INCOME TAX ACT IN CONNECTION WITH THE ADDITIONAL EVIDENCE NECESSARY FOR THE DISPOSAL OF T HE APPEAL. AS REGARDS THE ISSUE OF NON-ACCEPTANCE OF ADDITIONA L EVIDENCE UNDER RULE 46A THE LEARNED COUNSEL FOR THE ASSESSE E CHOSE NOT TO PRESS THIS PART OF THE GROUND HENCE THE SA ME IS DISMISSED. 22. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THESE ADVANCES HAD BEEN GIVEN IN THE COURSE OF BUSI NESS AND THE ONLY REASON GIVEN BY THE LEARNED COMMISSIONER O F INCOMETAX (APPEALS) THAT SUCH ADVANCES WERE OF CAPI TAL 13 NATURE HENCE INTEREST SHOULD HAVE ALSO BEEN CAPIT ALISED. HOWEVER THE FACT WAS THAT THESE ADVANCES HAD BEEN GIVEN OUT OF INTEREST FREE FUNDS COMPRISING OF FREE RESER VES INTERNAL ACCRUALS AND CASH FLOWS. HENCE NO DISALLOWANCE WAS WARRANTED OUT OF INTEREST PAID ON BORROWED FUNDS. T HE LEARNED COUNSEL FOR THE ASSESSEE IN THIS REGARD AGAIN PLACE D RELIANCE ON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF R.D. JOSHI & COMPANY (SUPRA) AND THE DECISI ON OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. REL IANCE UTILITIES & POWER LIMITED; 313 ITR 34 WHEREIN IT W AS HELD THAT IF THERE WERE FUNDS AVAILABLE BOTH INTEREST FREE A ND OVER-DRAFT AND/OR LOANS TAKEN THEN A PRESUMPTION WOULD ARISE THAT INVESTMENT WOULD BE OUT OF INTEREST FREE FUNDS GENE RATED OR AVAILABLE WITH THE COMPANY IF THE INTEREST FREE FU NDS WERE SUFFICIENT TO MEET THE INVESTMENT. AT THIS STAGE I T WAS POINTED OUT TO THE LEARNED COUNSEL FOR THE ASSESSEE THAT IN BOTH THESE DECISIONS AVAILABILITY OF INTEREST FREE FUNDS FOR MAKING THE IMPUGNED INVESTMENT WAS NOT IN DOUBT AND IN THE CAS E OF RELIANCE UTILITIES & POWER LIMITED (SUPRA) THE HON BLE COURT HELD THAT THIS PRESUMPTION HAD BEEN ESTABLISHED CON SIDERING 14 THE FINDING OF FACT BY BOTH THE LEARNED COMMISSIONE R OF INCOMETAX (APPEALS) AND THE TRIBUNAL HENCE HOW FA R HIS PLEA WAS JUSTIFIED. THE LEARNED COUNSEL FOR THE ASSESSE E HOWEVER REITERATED HIS STAND. THE LD. DR ON THE OTHER HAN D PLACED RELIANCE ON THE ORDER OF THE LEARNED COMMISSIONER O F INCOMETAX (APPEALS). 23. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES MATERIAL ON RECORD AND THE ORDERS OF THE AUT HORITIES BELOW. IN OUR VIEW THE PRIMARY ONUS TO CLAIM EXPEN DITURE IS ON THE ASSESSEE AND HE HAS TO SUBSTANTIATE ITS CLAIM I N THAT REGARD. HOWEVER IF THE REVENUE WANTS TO DISALLOW THE SAME THE BURDEN SHIFTS ON THE REVENUE BUT THE FACT REMAI NS THAT THE REVENUE CAN DO SO BY GETTING THE NECESSARY DETAILS/ RECORDS FROM THE ASSESSEE ONLY AS SUCH DETAILS ARE WITHIN T HE KNOWLEDGE OF THE ASSESSEE ONLY. HENCE IN ALL SITU ATIONS ULTIMATELY IT IS THE ASSESSEES COOPERATION WHICH I S MATERIAL AND IF THE ASSESSEE FAILS TO DO SO THEN AN ADVERSE INFERENCE IS THE ULTIMATE RESULT. HOWEVER IF THE ASSESSEE SUBM ITS ALL THE DETAILS ESTABLISHING/JUSTIFYING ITS CLAIM THEN THE REVENUE AUTHORITIES CANNOT REJECT THE CLAIM OF THE ASSESSEE ON FLIMSY 15 GROUND OR MERELY BY REJECTING SUCH DETAILS WITHOUT GIVING REASONS FOR THEIR DECISION. HAVING STATED SO WE F IND THAT THIS EXERCISE HAS TO BE DONE IN THE PRESENT CASE AND TH EREFORE WE RESTORE THIS ISSUE TO THE FILE OF THE LEARNED COMMI SSIONER OF INCOMETAX (APPEALS) FOR DECISION THEREON AFRESH AS PER LAW AFTER GIVING AN ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE TO SUBSTANTIATE ITS CLAIM. 24. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED. 25. TO SUM UP ITA NO. 162/IND/07 AND ITA NO. 497/I ND/08 ARE ALLOWED FOR STATISTICAL PURPOSES AND ITA NO. 49 8/IND/2008 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 24TH MARCH 2 010. (JOGINDER SINGH) (V.K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER MARCH 24 2010 COPY TO APPELLANT RESPONDENT CIT CIT (A) DR GU ARD FILE DN/2223