BANSAL CLASSES PVT. LTD., Kota v. ACIT, Circle-1, Kota, Kota

ITA 578/JPR/2019 | 2014-2015
Pronouncement Date: 25-11-2019 | Result: Allowed

Appeal Details

RSA Number 57823114 RSA 2019
Assessee PAN AACCB8403D
Bench Jaipur
Appeal Number ITA 578/JPR/2019
Duration Of Justice 7 month(s) 1 day(s)
Appellant BANSAL CLASSES PVT. LTD., Kota
Respondent ACIT, Circle-1, Kota, Kota
Appeal Type Income Tax Appeal
Pronouncement Date 25-11-2019
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 25-11-2019
Last Hearing Date 08-07-2019
First Hearing Date 08-07-2019
Assessment Year 2014-2015
Appeal Filed On 23-04-2019
Judgment Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENC HES A JAIPUR JH FOT; IKY JKO] U;KF;D LNL; OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO JM & SHRI VIKRA M SINGH YADAV AM VK;DJ VIHY LA- @ ITA NO. 578/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2014-15 M/S BANSAL CLASSES PVT. LTD. 794 MAHAVIR NAGAR-II KOTA CUKE VS. ACIT CIRCLE-01 KOTA LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AACCB8403D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI B. V. MAHESHWARI (CA) JKTLO DH VKSJ LS @ REVENUE BY : SMT. NEENA JEPH (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 14/11/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 25/11/2019 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A) KOTA DATED 07.02.2019 WHEREIN THE ASSESSEE HAS TAKE N THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LD. AO GROSSLY ERRED ON LAW & FACTS BY DISALLOWING OUT OF EXPENSES STATING TO BE UNVERIFIABLE EXPENSES THE LD . CIT(A) ALSO ERRED IN SUSTAINING OUT OF SAID ADDITION RS. 7 50 000/-. 2. THAT THE LD. AO GROSSLY ERRED ON LAW & FACTS IN MAKING ADDITION ON ACCOUNT OF CAUTION MONEY STATING TO BE PAID IN CAS H. THE LD. CIT(A) ALSO ERRED IN SUSTAINING THE ADDITION OF RS. 1 000 00/- OUT OF THAT. 3. THAT THE LD. AO GROSSLY ERRED ON LAW & FACTS IN MAKING ADDITION ON ACCOUNT OF PENDING CAUTION MONEY THE LD. CIT(A) AL SO ERRED IN SUSTAINING THE ADDITION OF RS. 1 00 000/-. ITA NO. 578/JP/2019 M/S BANSAL CLASSES PVT. LTD. KOTA VS. ACIT KOTA 2 2. REGARDING GROUND NO. 1 BRIEFLY STATED THE FACT S OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO OBSERVED THAT THE ASSESSEE HAS DEBITED EXPENSES IN THE NATURE STUDENT PROMOTION EXPENSES AND MISCELLANEOUS EXPENSES IN ITS PROFIT AND LOSS ACCOU NT. A SHOW CAUSE WAS ISSUED TO THE ASSESSEE TO JUSTIFY THE CLAIM OF THE SAID EX PENSES. IN RESPONSE THE ASSESSEE SUBMITTED ITS REPLY HOWEVER THE SAME WAS NOT FOUND ACCEPTABLE AND AS PER THE ASSESSING OFFICER THE EXPENSES ARE NOT FULLY VOUCHED OR SELF VOUCHED AND ARE PAID IN CASH AND NOT SUBJECT TO VER IFICATION. THEREFORE OUT OF THE TOTAL EXPENSES OF RS. 1 70 30 336/- 15% OF EXP ENDITURE WAS DISALLOWED WHICH COMES TO RS. 25 54 550/- AND ADDED TO ASSESSE ES TOTAL INCOME. 3. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTE R IN APPEAL BEFORE LD. CIT(A) AND THE LD. CIT(A) ALLOWED PARTLY RELIEF TO THE ASSESSEE AND DISALLOWANCE WAS RESTRICTED TO RS. 7.5 LACS AND THE RELEVANT FIN DINGS OF THE LD. CIT(A) READS AS UNDER:- THE STUDENT PROMOTION EXPENSES APPEAR TO BE IN THE NATURE OF ADVERTISING AND SALES PROMOTION IN LOOSE CONNOTATIO N. THE COACHING INSTITUTES BEING RUN COMMERCIALLY DO HAVE TO GO AFT ER ELIGIBLE STUDENT POPULATION TO MAXIMIZE THEIR FEASIBILITY. IT IS APP ARENT THAT IF THESE EXPENSES WERE NOT INCURRED OR AGGRESSIVE MARKETING NOT DONE THE REVENUES COULD HAVE FALLEN FURTHER. HOWEVER PROPER EVIDENCES IN RESPECT OF THE SAME WERE NECESSARY TO JUSTIFY THE CLAIM MAD E TO THE FULLEST EXTENT POSSIBLE. AS REGARDS TRAVELLING AND MISCELLANEOUS EXPENSES L OOKING TO THE FACTS INVOLVED THAT THERE WERE NOT SUFFICIENT INDEPENDENT EVIDENCES IN SUPPORT OF THE CLAIM OF THESE EXPENSES IT IS ALSO JUSTIFIA BLE ON THE PART OF THE AO TO MAKE A REASONABLE DISALLOWANCE OUT OF THESE EXPE NSES IS JUSTIFIED. ITA NO. 578/JP/2019 M/S BANSAL CLASSES PVT. LTD. KOTA VS. ACIT KOTA 3 THE DISALLOWANCE @ FLAT 15% OUT OF THE TOTAL CLAIM CANNOT BE MADE UNLESS THE A.O HIGHLIGHTS CERTAIN SPECIFIC DEFECTS IN INDIVIDUAL CLAIM OF EXPENSES AND/OR PROVES CERTAIN EXPENSES WERE BOGUS OR INFLATED. HOWEVER TO BE FAIR TO HIM AS WELL WHEN THERE WERE N O EVIDENCES IN SUPPORT IN SEVERAL OF THE CLAIMS ALL HE COULD DO I S MAKE AS ESTIMATION FOR THE NON BUSINESS ELEMENT POSSIBLE. IN FAIRNESS THEREFORE THE DISALLOWANCE IS BEING RE STRICTED TO RS. 7 50 000/- AS BEING REASONABLE DISALLOWANCE ON ACCO UNT OF THE DISCREPANCIES INVOLVED. THE BALANCE DISALLOWANCE OF RS. 18 04 550/- IS DIRE CTED TO BE DELETED. THIS GROUND OF APPEAL IS PARTLY ALLOWED. 4. DURING THE COURSE OF HEARING THE LD. AR SUBMITT ED THAT THE LEARNED A.O. HAS MADE DISALLOWANCE STATING TO BE THE UNVERIFIABL E EXPENSES. IT IS VERY SURPRISING THAT THE EXPENDITURE INCURRED BY THE ASS ESSEE FROM YEARS TOGETHER THAT IS CALLED STUDENT PROMOTION TRAVELLING AND MI SCELLANEOUS EXPENSES WHICH INCLUDE SO MANY OTHER EXPENDITURE HOW THE LEARNED A.O. CAN TERM THESE EXPENSES AS UNVERIFIABLE EXPENSES. IN SUPPORT TO JUSTIFY OUR CONTENTION WE HAVE SUBMITTED EXPENDITURE WISE DETAILS AND THE LEG AL POSITION INCLUDING DECISION OF UDAIPUR DISTILLERY (SC) OSWAL AGRO AD IDAS INDIA MARKETING PVT. LTD. AND REQUESTED TO THE LEARNED A.O. THAT THERE I S NOTHING TO DISALLOW UNLESS THERE IS ANY SPECIFIC MISTAKE IN THE EXPENSES BUT THE LEARNED A.O. HAS DISALLOWED THE SAME BY STATING SIMPLE WORDS THAT TH E EXPENSES ARE NOT FULLY VOUCHED OR SELF-VOUCHED AND ARE IN CASH. THIS IS TO TALLY VAGUE IT IS A GENERAL REMARK BASED ON SURMISES & CONJECTURES EVEN THE LEA RNED A.O. HAS NOT VERIFIED THE DETAILS OF EXPENSES SUBMITTED IN COURS E OF ASSESSMENT. ALL THESE ARE LEGITIMATE EXPENDITURE HAVE EITHER BEEN NOT DI SALLOWED IN EARLIER YEARS OR ITA NO. 578/JP/2019 M/S BANSAL CLASSES PVT. LTD. KOTA VS. ACIT KOTA 4 DISALLOWED BUT ALLOWED IN APPEALS BY THE HON'BLE C IT (APPEALS) OR THE HON'BLE ITAT. THE LD. A.O. DISALLOWED RS. 2554530/- @ 15% ON LUMP SUM BASIS WITHOUT POINTING OUT SINGLE DEFECT THE LD. C IT(A) CONSIDERED OUR SUBMISSION BUT HE REPEATED THE A.O.'S TWO THREE L INES AND RESTRICTED THE DISALLOWANCE ON LUMP SUM BASIS AT RS. 750 000.00 WH EREAS THE ASSESSEE HAS FILED ALL THE DETAILS OF EXPENSES VOUCHERS ETC. A ND NO PARTICULAR DEFECT WAS NOTICED EVEN THOUGH THE LD. CIT(A) ALSO SUSTAINED PART DISALLOWANCE ON LUMP SUM BASIS WHICH IS TOTALLY ON SURMISES & CONJECTURE S. 5. IT WAS FURTHER SUBMITTED THAT IN RELATION TO STU DENT PROMOTION AND TRAVELLING EXPENSES THE SAME ISSUE CAME BEFORE THE TRIBUNAL IN THE ASSESSEE'S OWN CASE IN APPEAL NO. 296/JP/17 AND ITA NO. 345/JP /17 ORDER DTD. 31.10.2017 AND RELEVANT FINDINGS READ AS UNDER:- 82 WE HAVE HEARD THE RIVAL CONTENTIONS AND PURSU ED THE MATERIAL AVAILABLE ON RECORD. AN ADHOC DISALLOWANCE OF 15% O F STUDENT WELFARE EXPENSES HAS BEEN DISALLOWED BY THE A.O.. THE LD. C IT(A) HAS AGAIN FOLLOWED THE PRINCIPLE OF ADHOCISM AND CONFIRMED TH E DISALLOWANCE OF RS. 5 LACS OUT OF THE AMOUNT SO DISALLOWED BY THE A .O. BOTH THE A.O. AND LD. CIT(A) HAS NOT HIGHLIGHTED SPECIFIC EXPENDI TURE WHICH FAIL THE TEST OF BUSINESS EXPEDIENCY AS LAID DOWN BY THE COU RTS FROM TIME TO TIME. FURTHER NO SPECIFIC INSTANCES OF EXPENDITURE HAVEN BEEN HIGHLIGHTED WHICH COULD NOT BE VERIFIED FOR WANT OF PROPER SUPPORTING DOCUMENTATION. MERELY GENERALIZATION AND HOLDING TA T PAYMENTS HAVE BEEN MADE IN CASH DOESN'T NECESSARILY LEAD TO DISAL LOWANCE OF ELIGIBLE EXPENDITURE. THERE IS NO BASIS FOR ADHOCISM IN THE EYES OF LAW. IN THE RESULT DISALLOWANCE MADE BY THE A.O. IS HEREBY DEL ETED. THE ASSESSEE'S GROUND OF APPEAL IS ALLOWED AND REVENUE' S GROUND OF APPEAL IS DISMISSED. ITA NO. 578/JP/2019 M/S BANSAL CLASSES PVT. LTD. KOTA VS. ACIT KOTA 5 85. AS WE HAVE HELD IN THE CONTEXT OF STUDENT WELFA RE EXPENSES THERE IS NO BASIS FOR ADHOCISM IN THE EYES OF LAW. IN THE INSTANT CASE DISALLOWANCE OF 10% OF THE TRAVEL EXPENSES HAVE BEE N MADE BY THE A.O. WHICH HAS BEEN REDUCED TO 5% BY THE LD. CIT(A) . OUR FINDINGS AND DIRECTIONS AS CONTAINED IN CONTEXT OF STUDENT W ELFARE EXPENSES SHALL EQUALLY APPLY IN THE PRESENT CASE. IN THE RES ULT DISASLLOWANCE MADE BY THE A.O. IS HEREBY DELETED. THE ASSESSEE'S GROUND OF APPEAL IS ALLOWED AND REVENUE'S GROUND OF APPEAL IS DISMISSED . 6. IT WAS FURTHER SUBMITTED THAT REGARDING MISC. EX PENSES THE LD. A.O. DISALLOWED WITHOUT LOOKING TO THE NATURE OF EXPENSE S THE MISC. EXPENSES IS THE TOTAL OF 21 SMALL SMALL HEAD OF EXPENSES ALL THESE ARE DIRECT EXPENSE. THE LD. A.O. HAS ALLEGED SELF-MADE VOUCHERS BUT THIS IS WR ONG AS THE PAYMENTS ARE MADE MOSTLY ON OUTSIDE BILLS. THE BASIS OF DISALLOW ANCE IS SAME AS STATED ABOVE IN THE CASE OF ABOVE TWO HEADS (STUDENT PROMO TION & TRAVELLING). THAT THERE IS NO BASIS EXCEPT THE ADHOCISM HENCE AS DECI DED BY TRIBUNAL IN THE ASSESEE'S OWN CASE FOR EARLIER YEARS THE ADDITION MAY KINDLY BE DELETED. 7. THE LD. DR IS HEARD WHO HAS RELIED ON THE ORDER OF LOWER AUTHORITIES. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE SIMILAR ISSUE RELATING TO ADHOC DISALLOWANCE OF EXPENSES HAS BEEN DEALT WITH BY THE CO-ORDINATE BEN CH IN THE EARLIER YEARS. THEREFORE FOLLOWING THE RULE OF CONSISTENCY AND IN ABSENCE OF ANY SPECIFIC DEFECTS HIGHLIGHTED BY THE AO THE AD-HOC DISALLOWA NCE MADE BY THE ASSESSING OFFICER IS DIRECTED TO BE DELETED. IN THE RESULT THE GROUND OF ASSESSEES APPEAL IS ALLOWED. 9. REGARDING GROUND NO. 2 BRIEFLY STATED THE FACT S OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AS SESSING OFFICER OBSERVED ITA NO. 578/JP/2019 M/S BANSAL CLASSES PVT. LTD. KOTA VS. ACIT KOTA 6 THAT THE ASSESSEE HAS PAID THE CAUTION MONEY IN CAS H AMOUNTING TO RS. 15 84 000/- WHICH IS NOT VERIFIABLE AS THE SAME IS SUPPORT BY SELF MADE VOUCHERS AND OUT OF THE SAME TO COVER ANY LEAKAGE OF REVENUE A LUMP SUM ADDITION OF RS 2 00 000 WAS MADE WHICH ON APPEAL HA S BEEN RESTRICTED TO RS 1 LACS BY THE LD. CIT(A) AGAINST WHICH THE ASSESSEE I S NOW IN APPEAL BEFORE US. 10. DURING THE COURSE OF HEARING THE LD. AR SUBMIT TED THAT THE LEARNED A.O. HAS DISALLOWED AMOUNT OUT OF THE PAYMENT OF CAUTION MONEY BASED ON SURMISES AND CONJECTURES. HE HAS DISALLOWED ON RAND OM BASIS SAY 15% OF THE CAUTION MONEY REFUNDED IN CASH. IT WAS SUBMITTED TH AT WHEN ANY STUDENT IS ADMITTED FOR EDUCATION IN OUR INSTITUTE CERTAIN AM OUNT CALLED CAUTION MONEY HAS BEEN FIXED TO BE RECEIVED FROM HIM. THE SAID AM OUNT IS DEPOSITED BY HIM AND IT IS KEPT INTACT TILL HE IS IN OUR INSTITUTE A ND WHEN HE LEAVES THE INSTITUTE THE SAID CAUTION MONEY IS REFUNDED TO HIM. THEREFOR E IT IS NOT AN INCOME; IT IS A LIABILITY OF THE INSTITUTE AND HENCE THE BALANCE IS SHOWN UNDER THE HEAD CURRENT LIABILITIES. SAME IS THE POSITION EVERY YEA R AND WHATEVER THE MONEY IS REFUNDED TO THE STUDENTS IS DEALT WITH IN A PARTIC ULAR YEAR AND IT HAS BEEN HANDLED BY 4 DIFFERENT PERSONS. TO ENSURE THAT THE CAUTION MONEY IS PROPERLY REFUNDED TO THE STUDENTS AND ON THE BASIS OF THEIR REPORT THE TREATMENT IS GIVEN IN THE BOOKS OF ACCOUNTS. THIS FEATURE IS IN EVERY YEAR. THERE IS A STRONG CONTROL ON THE AMOUNT RECEIVED FROM THE STUDENTS AN D IT HAS BEEN CHECKED BY THE HIGHER MANAGEMENT AND IT IS ENSURED THAT THE AM OUNT RECEIVED AS CAUTION MONEY FROM THE STUDENTS IS PAID TO THEM PROPERLY. THE LEARNED A.O. HAS DISALLOWED STATING THAT THERE IS NO PROPER RECEIPT OR EVIDENCE. HE HAS ALSO STATED THAT IT IS PAID IN CASH AND ALL THE CASES CA NNOT BE VERIFIED. THE LD. A.O. HAVE NEITHER ISSUED ANY 133(6) NOR CALLED TO ANY ST UDENT BUT MADE HIS MIND THAT THE RECEIPT IS FAKE & IN PLACE OF REFUND THE M ONEY IS SIPHONED. IN THIS MATTER WE SUBMIT THAT WE HAVE GIVEN DETAILS OF REFU ND AND A COPY OF THE PAGE OF THE REGISTER AND THE SYSTEM WHAT WE ARE FOLLOWIN G IN CASE OF REFUND OF ITA NO. 578/JP/2019 M/S BANSAL CLASSES PVT. LTD. KOTA VS. ACIT KOTA 7 MONEY. NO PARTICULAR INCIDENCE HAS BEEN NOTICED BY THE LEARNED A.O. THAT THE SAME HAS NOT BEEN REFUNDED TO THE STUDENTS. HE HAS MADE UP HIS MIND THAT DUE TO NON-LEGIBILITY OF SIGNATURES OF THE RECIPIEN TS MONEY REFUNDED DURING THE YEAR CANNOT BE VERIFIED IN ENTIRETY WHEREAS WE HAV E SUBMITTED THAT WE HAVE STRONG PROCEDURE FOR REFUND OF CAUTION MONEY. WE GO T THE SIGNATURES OF THE STUDENTS OR THE PARENTS THOSE WHO TAKE BACK THE CAU TION MONEY AND ALL THOSE SHEETS WERE FILED ALONG WITH OUR REPLY BEFORE THE L EARNED A.O. WE ARE SORRY TO STATE THAT EVEN IN SUCH A SITUATION HOW HE HAS DOUB TED THAT WHETHER IT WAS REFUNDED OR NOT? THIS JUST IS A PROBABILITY WHICH H AS NO PLACE IN LAW. THERE IS NO CONCRETE FINDING THAT THE SAME WAS NOT REFUNDED. THEREFORE ANY ESTIMATE OF DISALLOWANCE MADE BY HIM OUT OF THE TOTAL REFUND IS TOTALLY WRONG BASELESS BASED ON HIS OWN THINKING HENCE IT SHOULD BE DELET ED. WE ALSO SUBMIT THAT THIS IS THE PROCEDURE FOLLOWED BY THE COMPANY SINCE ITS INCEPTION. THIS YEAR THE TOTAL REFUND IS RS. 1584000/- AND ITS COMPLETE LIST IS GIVEN TO THE LD. A.O. AND HE HAS NOT FOUND ANY MISTAKE THEN WHY HE MADE THE LUMP SUM ADDITION OF RS. 2 00 000/- THUS THE ADDITION IS ON SURMISES & C ONJUNCTURE WHICH MAY KINDLY DELETED. 11. IT WAS FURTHER SUBMITTED THAT ON THIS ISSUE TH E APPEALS OF THE ASSESSEE COMPANY FOR THE AY 2010-11 TO 2013-14 HAVE BEEN ALL OWED BY THE TRIBUNAL VIDE ORDER DATED 31.10.2017 AND THE RELEVANT FINDIN GS OF THE TRIBUNAL READS AS UNDER: 15. THE LIMITED CASE OF THE REVENUE IS THAT CAUTIO N MONEY AMOUNTING TO RS 1 11 25 500 HAS BEEN REFUNDED IN CASH DURING THE YEAR AND FOR WHICH NO PROPER RECEIPT/EVIDENCE HAS BEEN ADDUCED BY THE ASSESSEE AND HE ACCORDINGLY STATED THAT 15% OF CAUTION MONEY REFUND ED AMOUNTING TO RS 16 18 825 IS DISALLOWED AND ADDED TO THE ASSESSEES TOTAL INCOME. THE REVENUE IS THUS NOT DISPUTING THE FACT OF REPAYMENT OF THE CAUTION ITA NO. 578/JP/2019 M/S BANSAL CLASSES PVT. LTD. KOTA VS. ACIT KOTA 8 MONEY BY THE ASSESSEE COMPANY TO THE STUDENTS. EVEN BEFORE US THE LD DR HAS NOT DISPUTED OR BROUGHT TO OUR NOTICE ANY FA CTS WHICH PROVE THAT THE CAUTION MONEY HAS NOT BEEN REFUNDED TO THE STUD ENTS. WHERE THE REVENUE IS NOT DISPUTING THE FACT OF REPAYMENT OF C AUTION MONEY THE QUESTION OF WRITING OFF SUCH LIABILITY OR FORFEITUR E OF SUCH CAUTION MONEY DOESNT ARISE FOR CONSIDERATION. THEREFORE MERELY ON ACCOUNT OF THE FACT THAT SOME OF THE REPAYMENTS WHICH HAVE BEEN MADE BY THE ASSESSEE IN CASH ARE NOT VERIFIABLE THE SAME CANNOT FORM THE B ASIS FOR DISALLOWANCE. DURING THE COURSE OF HEARING THE ASSESSEE HAS SUBM ITTED THAT IT HAS ADEQUATE INTERNAL CONTROLS FOR REPAYMENT OF CAUTION MONEY TO THE STUDENTS AND BOOKS OF ACCOUNTS HAVE BEEN AUDITED AN D NO ADVERSE FINDING HAS BEEN GIVEN BY THE AUDITORS. FURTHER DE TAILS OF REPAYMENTS IN TERMS OF CAUTION MONEY LEDGER VOUCHERS AND OTHER D ETAILS WERE SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDIN GS WHICH IS ALSO NOT DISPUTED BY THE REVENUE. FURTHER THE QUESTION OF D ISALLOWANCE COMES WHERE THERE IS A CLAIM OF EXPENDITURE AT FIRST PLAC E WHICH IS NOT THE CASE BEFORE US. IN THE ENTIRETY OF FACTS AND CIRCUMSTANC ES OF CASE WE ARE OF THE CONSIDERED VIEW THAT THERE IS NO BASIS FOR ADHO C DISALLOWANCE OF 15% OF CAUTION MONEY WHICH HAS BEEN REFUNDED TO THE STUDENTS DURING THE YEAR. WE ACCORDINGLY SET ASIDE THE FINDINGS OF THE AO AND THE LD. CIT(A) AND THE DISALLOWANCE OF CAUTION MONEY SO REF UNDED IS DELETED IN ENTIRETY. IN THE RESULT GROUND OF ASSESSEES APPEA L IS ALLOWED AND GROUND OF REVENUES APPEAL IS DISMISSED. 12. THE LD. DR IS HEARD WHO HAS RELIED ON THE ORDER OF THE LOWER AUTHORITIES. 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE SIMILAR ISSUE HAS BEEN DEALT WITH BY THE CO-ORDINATE BENCH IN THE EARLIER YEARS. THEREFORE FOLLOWING TH E RULE OF CONSISTENCY ADHOC ITA NO. 578/JP/2019 M/S BANSAL CLASSES PVT. LTD. KOTA VS. ACIT KOTA 9 DISALLOWANCE MADE BY THE ASSESSING OFFICER IS DIREC TED TO BE DELETED. IN THE RESULT THE GROUND OF ASSESSEES APPEAL IS ALLOWED. 14. REGARDING GROUND NO. 3 THE ASSESSING OFFICER O BSERVED THAT CAUTION MONEY FOR FINANCIAL YEAR 2010-11 AND EARLIER YEARS AMOUNTING TO RS. 3 56 500/- IS NOT CLAIMED BY THE STUDENTS EVEN AFTER PERIOD OF 3 TO 4 YEARS AND THEREFORE THIS MONEY IS NOT BE PAID BY THE ASSESSEE AND ACCOR DINGLY THE SAID AMOUNT WAS BROUGHT TO TAX U/S 41(1) OF THE ACT. ON APPEAL THE LD. CIT(A) HAS RESTRICTED THE DISALLOWANCE TO RS. 1 LAC AGAINST WHICH THE ASSESSE E IS IN APPEAL BEFORE US. 15. DURING THE COURSE OF HEARING THE LD. AR SUBMI TTED THAT THE ADDITION MADE BY THE LEARNED A.O. IS WITHOUT ANY BASIS OF LA W AND FACTS. THE CAUTION MONEY IS REFUNDED IN EVERY CASE AND FOR THE OVERDUE CAUTION MONEY REPEATEDLY THE REMINDERS ARE GIVEN FOR COLLECTION T HEREOF AND THE AMOUNT MENTIONED BY THE LEARNED A.O. IS REFUNDABLE AND IT WAS REFUNDED IN YEARS TO COME HENCE THERE IS NO REASON TO TREAT THE SAID AM OUNT AS INCOME. IT WAS FURTHER SUBMITTED THAT DURING THE YEAR THE ASSESSE E ITSELF HAS WRITTEN OFF RS 24 95 000 OF CAUTION MONEY IN RESPECT OF CHEQUES NOT PRESENTED BY THE STUDENTS AND THE SAME HAS BEEN OFFERED TO TAX. IT W AS ACCORDINGLY SUBMITTED THAT THERE IS NO BASIS FOR ADDING BACK ADDITIONAL A MOUNT OF RS 3 56 000 BY THE ASSESSING OFFICER. 16. IT WAS FURTHER SUBMITTED THAT THE LEARNED A.O. MADE ADDITION BY INVOKING SEC. 41(1) OF THE I.T. ACT 1961. THE SEC. 41(1) IS APPLICABLE IF ANY EXPENDITURE OR LOSS CLAIMED IN EARLIER YEARS AND THE SAID TRADI NG LIABILITY IS OUTSTANDING IN THAT CASE IF THE SAID AMOUNT IS EITHER NOT PAYABLE ETC THEN THE SAID LIABILITY IS TREATED AS INCOME. IN THIS CASE THERE IS NO SUCH E XPENDITURE CLAIMED IN THE PAST THEREFORE THERE IS NO QUESTION OF INVOKING SE C. 41(1) OF THE ACT. ITA NO. 578/JP/2019 M/S BANSAL CLASSES PVT. LTD. KOTA VS. ACIT KOTA 10 17. THE LD. DR IS HEARD WHO HAS RELIED ON THE FINDI NG OF THE LOWER AUTHORITIES. 18. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD AR HAS SUBMITTED THAT IN RESPECT OF CHEQUES TOWARDS REFUND OF CAUTION MONEY WHICH HAVE NOT BEEN PRESENTED BY T HE STUDENTS THE ASSESSEE HAS ITSELF WRITTEN OFF THE AMOUNT OF RS 24 95 000 A ND OFFERED THE SAME TO TAX AND THEREFORE IT WAS CONTENDED THAT THERE IS NO BA SIS FOR MAKING FURTHER ADDITION OF RS 3 56 000 AND THAT TOO BY INVOKING P ROVISIONS OF SECTION 41(1) OF THE ACT. FROM PERUSAL OF DETAILS OF CAUTION MONEY REFUNDABLE APPEARING AT ASSESSEES PAPERBOOK PAGE 55 WE FIND THAT THE WRIT E OFF OF RS 24 95 000 IS IN RESPECT OF CAUTION MONEY CHEQUES FOR THE FINANCIAL YEAR 2012-13 WHICH WERE ISSUED BUT NOT PRESENTED FOR PAYMENT BY THE STUDENT S. AS FAR AS CAUTION MONEY REFUNDABLE FOR FINANCIAL YEAR 2010-11 AND EAR LIER YEARS AMOUNTING TO RS 3 56 000 IS CONCERNED APPARENTLY THE CHEQUES ISSUE D HAVE BEEN BARRED BY LIMITATION AND CANNOT BE PRESENTED FOR PAYMENT BY T HE STUDENTS. FOLLOWING THE TREATMENT AS DONE BY THE ASSESSEE FOR CHEQUES ISSUE D FOR FINANCIAL YEAR 2012- 13 THE SAME TREATMENT SHOULD HAVE BEEN DONE FOR TH E CHEQUES ISSUED IN THE EARLIER PERIOD AMOUNTING TO RS 3 56 000. NO REASON HAS BEEN SUBMITTED FOR THE DEVIATION IN THE ACCOUNTING TREATMENT SO DONE BY TH E ASSESSEE COMPANY FOR EARLIER YEARS VIS--VIS FINANCIAL YEAR 2012-13 AND INFACT THE SAME HAS ALSO NOT BEEN EXAMINED BY THE ASSESSING OFFICER. FURTHER NO DOUBT THE PROVISIONS OF SECTION 41(1) ARE NOT ATTRACTED IN THE INSTANT CASE HOWEVER THE PROVISIONS OF SECTION 28 MAY BE ATTRACTED WHERE THE CAUTION MONEY IS NO MORE REFUNDABLE AND THE CHARACTER OF SAID RECEIPTS WOULD CHANGE TO RECEIPTS ARISING IN COURSE OF BUSINESS AND THUS IN NATURE OF INCOME TAXABLE IN TH E HANDS OF THE ASSESSEE. GIVEN THAT THESE ASPECTS HAVE NOT BEEN EXAMINED BY THE ASSESSING OFFICER WE DEEM IT APPROPRIATE THAT THE MATTER NEEDS TO BE SET -ASIDE TO THE FILE OF THE ITA NO. 578/JP/2019 M/S BANSAL CLASSES PVT. LTD. KOTA VS. ACIT KOTA 11 ASSESSING OFFICER TO EXAMINE THE SAME AFRESH. IN TH E RESULT THE GROUND IS ALLOWED FOR STATISTICAL PURPOSES. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DISPOS ED OFF IN LIGHT OF ABOVE DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 25/11/2019. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 25/11/2019 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S BANSAL CLASSES PVT. LTD. KOTA 2. IZR;FKHZ@ THE RESPONDENT- ACIT CIRCLE-01 KOTA 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR ITAT JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO.578/JP/2019} VKNS'KKUQLKJ@ BY ORDER LGK;D IATHDKJ@ ASST. REGISTRAR