M/s Vaishno Maa Computers, Patiala v. JCIT, Patiala

ITA 723/CHANDI/2011 | 2008-2009
Pronouncement Date: 25-11-2011 | Result: Partly Allowed

Appeal Details

RSA Number 72321514 RSA 2011
Assessee PAN AADFM7959H
Bench Chandigarh
Appeal Number ITA 723/CHANDI/2011
Duration Of Justice 4 month(s) 17 day(s)
Appellant M/s Vaishno Maa Computers, Patiala
Respondent JCIT, Patiala
Appeal Type Income Tax Appeal
Pronouncement Date 25-11-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 25-11-2011
Date Of Final Hearing 16-11-2011
Next Hearing Date 16-11-2011
Assessment Year 2008-2009
Appeal Filed On 08-07-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHE B CHANDIGARH BEFORE MS SUSHMA CHOWLA JUDICIAL MEMBER AND SHRI MEHAR SINGH ACCOUNTANT MEMBER ITA NO.649 /CHD/2011 ASSESSMENT YEAR :2008-09 PAN:AADFM7959H ASSTT. COMMISSIONER OF INCOME-TAX VS. M/S. VAISHNO MAA COMPUTERS CIRCLE PATIALA. PATIALA (APPELLANT) (RESPONDENT) ITA NO.723/CHD/2011 ASSESSMENT YEAR:2008-09 M/S. VAISHNO MAA COMPUTERS VS. ASSTT. COMMR. OF INC OME-TAX PATIALA. CIRCLE PATIALA. (APPELLANT) (RESPONDENT) DEPARTMENT BY: SMT. JAISHREEE SHARMA DR ASSESSEE BY: SH. I.C. VERMA & SH. PRADEEP SINGL A DATE OF HEARING: 16.11.2011 DATE OF PRONOUNCEMENT:25.11.2011 ORDER PER MEHAR SINGH AM THESE ARE THE CROSS APPEALS ONE BY THE REVENUE AN OTHER BY THE ASSESSEE AND DIRECTED AGAINST THE ORDER OF THE LD . CIT(A) PATIALA DATED 13.05.2011 PASSED UNDER SECTION 250(6) OF THE INCO ME-TAX ACT 1961 (HEREINAFTER REFERRED TO IN SHORT THE ACT) FOR T HE ASSESSMENT YEAR 2008-09. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APP EAL: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1 22 320/- MADE BY THE AO ON A/C OF DISALLOWANCE OUT OF BUSINESS PROMOTION EXPEN SES WITHOUT APPRECIATING THE FACT THAT THE DISALLOWANCE HAD BEEN MADE AS THE EXPENSES-IN-QUESTION WERE NOT INCIDENTA L TO THE BUSINESS. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.50 000/- OUT OF TOTA L OF RS.1 00 000/- MADE BY THE AO ON A/C OF DISALLOWANC E OUT OF 2 FUNCTION EXPENSES WITHOUT APPRECIATING THE FACT T HAT THE DISALLOWANCE HAD BEEN MADE AS THE EXPENSES-IN-QUEST ION WERE NOT INCIDENTAL TO THE BUSINESS. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1 54 000/- OUT OF TO TAL OF RS.2 22 500/- MADE BY THE AO ON A/C OF DISALLOWANC E OUT OF TRAINING OF STAFF EXPENSES WITHOUT APPRECIATING TH E FACT THAT THE DISALLOWANCE HAD BEEN MADE AS THE EXPENSES-IN-QUEST ION WERE EXCESSIVE IN COMPARISON TO PREVAILING MARKET RATES. 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.4 24 088/- OUT OF TOTAL OF RS.4 34 088/- MADE BY THE AO ON A/C OF DISALLOWANCE OUT OF BUS-PASS/COMMISSION/DISCOUNT EXPENSES WITHOUT APPR ECIATING THE FACT THAT THE DISALLOWANCE HAD BEEN MADE AS THE EXPENSES IN QUESTION HAD NOT BEEN INCURRED WHOLLY AND EXCLUSIVE LY FOR BUSINESS PURPOSES. 5. IN THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.2 00 000/- MADE BY THE AO ON A/C OF DISALLOWANCE OUT OF CONVEYANCE AND MOBILE A LLOWANCE EXPENSES WITHOUT APPRECIATING THE FACT THAT THE DI SALLOWANCE HAD BEEN MADE AS THE ASSESSEE HAD FAILED TO EXPLAI N THE BASIS OF INCURRING THE EXPENSES-IN-QUESTION. 6. IN THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.2 50 000/- MADE BY THE AO ON A/C OF DISALLOWANCE OF LICENCE FEE EXPENSES WITHO UT APPRECIATING THE FACT THAT THE DISALLOWANCE HAD BE EN MADE AS THE EXPENSES-IN-QUESTION WERE CAPITAL IN NATURE. 7. IN THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.5 75 000/- MADE BY THE AO U/S 68 ON A/C CASH CREDITS IN THE CAPITAL ACCOUNTS OF T HE PARTNERS WITHOUT APPRECIATING THE FACT THAT THE ADDITION HAD BEEN MADE AS THE ASSESSEE HAD FAILED TO PROVE THE SOURCE OF THE CASH CREDITS- IN-QUESTION AND HAD THUS FAILED TO DISCHARGE ITS BURDEN OF PROVING THE IDENTITY AS WELL AS CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTIONS. 8. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THAT OF THE AO RESTORED. 9. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND FINALLY DISPO SED OF. 3. IN THE FIRST GROUND OF APPEAL THE REVENUE CONTE NDED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.1 22 320/- ON ACCOUNT OF DISALLOWANCE OUT OF BUSINESS PROMOTION E XPENSES. THE BRIEF FACTS OF THE CASE CLEARLY REVEALS THAT THE IMPUGNED ADDIT ION HAS BEEN MADE BY THE A.O. ON ACCOUNT OF NON-PRODUCTION OF RELEVANT VOUCH ERS WHICH WERE REQUIRED TO BE PRODUCED BEFORE THE A.O. FOR THE PU RPOSE OF PROVING THE ADMISSIBILITY OF SUCH CLAIM INCLUDING GENUINENESS OF THE EXPENDITURE. 3 NEEDLESS TO SAY THAT IT IS INCUMBENT UPON THE ASSES SEE TO DISCHARGE THE ONUS OF ADMISSIBILITY OF SUCH EXPENSES AND GENUINENESS THEREOF. IN THE PRESENT CASE THE ASSESSEE HAS FAILED TO DO THE SAME. THE I SSUE WAS REMANDED TO THE FILE OF THE ASSESSING OFFICER. IT WAS CONTENDED BY THE ASSESSEE THAT THE ASSESSEE HAD PAID FRINGE BENEFIT ON THE ENTIRE AMOU NT OF EXPENDITURE OF RS.122 320/- AND THE SAME WAS ACCEPTED BY THE A.O. UNDER SECTION 115WE OF THE ACT AS BUSINESS EXPENDITURE. HENCE NO DISA LLOWANCE IS CALLED FOR AS PERSONAL EXPENDITURE UNDER SECTION 37 OR 38(2) OF T HE ACT. 3.1. THE LD. COUNSEL FOR THE ASSESSEE RELIED ON TH E ORDER OF THE CIT(A) AND REITERATED THE SUBMISSIONS MADE BEFORE HIM. 3.2. THE LD. DR ON THE OTHER HAND RELIED ON THE ORDER OF THE ASSESSING OFFICER. 4. HAVING REGARD TO THE FACTS OF THE CASE AND THE S UBMISSIONS MADE BY THE ASSESSEE BEFORE THE LD. CIT(A) AND THE FINDINGS THERETO GIVEN BY THE LD. CIT(A) IN HIS DETAILED ORDER WE ARE OF THE CONSID ERED OPINION THAT THE LD. CIT(A) RIGHTLY DELETED THE ADDITION WHICH WAS MADE BY THE A.O. WITHOUT APPRECIATING THE FACTS IN RIGHT PERSPECTIVE. WE TH EREFORE DO NOT FIND ANY VALID GROUND TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). ACCORDINGLY WE UPHOLD THE FINDINGS OF THE CIT(A) ON THIS ISSUE AND DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 5. IN THE SECOND GROUND OF APPEAL THE REVENUE CONT ENDED THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.50 000 /- OUT OF THE TOTAL OF RS.1 00 000/- MADE BY THE AO ON ACCOUNT OF DISALLOW ANCE OUT OF FUNCTION EXPENSES. THE BRIEF FACTS OF THE CASE ARE THAT THE AO FOUND THAT THE ASSESSEE HAD SHOWN EXPENSES OF RS.1 17 319/- CHARGED TO PROF IT & LOSS ACCOUNT AS FUNCTION EXPENSES. THE A.O. CALLED FOR DETAILS AND VOUCHERS OF SUCH EXPENSES AND FOUND THAT THE AMOUNT OF RS.48 000/- W AS SHOWN TO HAVE BEEN 4 PAID TO A SINGER FOR WHICH NO BILLS WERE PRODUCED. THE ISSUE WAS REMANDED TO THE FILE OF THE A.O. THE ASSESSEE STATED THAT ITS CASE COVERED UNDER COMMERCIAL EXPEDIENCY. IN THE ABSENCE OF PROPER VOU CHERS THE A.O. MADE AN ADHOC DISALLOWANCE OF RS.1 00 000/-. AGGRIEVED TH E ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). THE CIT(A) RESTRICTED TH E DISALLOWANCE TO RS.50 000/- DUE TO NON-PRODUCTION OF VOUCHERS BUT B Y TREATING THE EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY FOR PU RPOSES OF BUSINESS. NOW AGGRIEVED BY THE ORDER OF CIT(A) THE REVENUE IS IN APPEAL BEFORE THIS BENCH. 5.1. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY REL IED UPON THE ORDER OF THE CIT(A). 5.2. THE LD. DR ON THE OTHER HAND SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 6. HEAVING HEARD BOTH THE PARTIES AND CAREFULLY GON E THROUGH THE MATERIAL PLACED ON RECORD INCLUDING THE ORDER OF T HE LOWER AUTHORITY WE ARE IN COMPLETE AGREEMENT WITH THE DETAILED FINDINGS GI VEN BY THE LD. CIT(A) ON THE ISSUE IN DISPUTE. THE RELEVANT AND OPERATIVE PART OF THE SAME IS REPRODUCED HEREUNDER FOR APPRECIATION OF THE FACTS OF THE CASE: 7.4. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND RIVAL SUBMISSIONS OF BOTH THE A.O. IN HIS REMAND REPORT AND WRITTEN SUBMISSIONS OF THE COUNSEL IT IS SEEN THAT THE APP ELLANT HAS INCURRED EXPENSES IN ORGANIZING SUCH AN EVENT FOR ENTERTAIN MENT GIVING PUBLICITY TO ATTRACT BUSINESS AND PROVIDING AN OPP ORTUNITY TO EXPAND THE BUSINESS. THE REASONABLENESS OR PRUDENCY OF S UCH EXPENDITURE HAS NOT BEEN DOUBTED BY THE A.O. NOR ANY FINDING GIVEN THAT THE EXPENDITURE IS NOT ALLOWABLE ON THE GROUNDS OF COM MERCIAL EXPEDIENCY WHOLLY AND EXCLUSIVELY FOR PURPOSES OF BUSINESS. THE EXPENDITURE INCURRED IS THEREFORE WHOLLY AND EX CLUSIVELY FOR PURPOSES OF BUSINESS. HOWEVER THE ADHOC DISALLOWA NCE MADE BY THE A.O. FOR THE APPELLANT NOT PRODUCING VOUCHERS CAN AT BEST BE RESTRICTED TO RS.50 000/- ONLY. 6.1. IN VIEW OF THE ABOVE DISCUSSIONS WE DO NOT FI ND ANY INFIRMITY IN THE ORDER OF THE CIT(A) AND THE SAME IS UPHELD. HENCE THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 5 7. IN THE THIRD GROUND OF APPEAL THE REVENUE CONTE NDED THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.1 54 0 00/- OUT OF TOTAL OF RS.2 22 500/- MADE BY THE A.O. ON ACCOUNT OF DISAL LOWANCE OUT OF TRAINING TO STAFF EXPENSES. THE BRIEF FACTS OF THE CASE ARE THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTICED THAT THE AS SESSEE HAD DEBITED AN AMOUNT OF RS.4 45 000/- IN PROFIT & LOSS ACCOUNT ON ACCOUNT OF TRAINING TO STAFF. THE ASSESSEE WAS ASKED TO FILE DETAILS OF SU CH EXPENDITURE. ON PERUSAL OF SUCH DETAILS THE AO FOUND THAT TWO PARTNERS NA MELY SH. NAVDEEP WALIA AND SMT. DEEPIKA WALIA RECEIVED PAYMENTS OF RS.1 60 000/- AND RS.1 95 000/- RESPECTIVELY FOR THE TRAINING WORK DO NE. THE A.O. OBSERVED THAT FOR FOUR DAYS TRAINING ON 14.03.2008 15.03200 8 16.03.2008 AND 17.03.2008 THE APPELLANT HAD CLAIMED EXPENDITURE OF RS.3 55 000/- WHICH WORKED OUT TO RS.88 750/- PER DAY. THE TRAINING FOR THE FOUR DAYS WAS GIVEN TO ONLY EIGHT CANDIDATES WHICH IS COVERED UNDER S ECTION 40A(2) OF THE ACT. THE PAYMENT CLAIMED TO HAVE BEEN MADE BY THE ASSES SEE ON ACCOUNT OF TRAINING TO STAFF EXCESSIVE WAS CONSIDERED EXCESSI VE BY THE A.O. THUS HE DISALLOWED 50% OF THE EXPENDITURE CLAIMED BY THE A SSESSEE UNDER THE HEAD TRAINING TO STAFF AT RS.2 22 500/- OUT OF TOTAL EXP ENDITURE OF RS.4 45 000/-. AGGRIEVED BY THE ORDER OF THE A.O. THE ASSESSEE FI LED AN APPEAL BEFORE THE LD. CIT(A). THE CIT(A) CALLED FOR THE REMAND REPOR T FROM THE A.O. IN RESPONSE TO THE REMAND REPORT THE ASSESSEE STATED THAT THE PAYMENTS MADE TO PROCURE THE BENEFIT OF A PERSON HAVING TECHNICAL K NOWLEDGE AND EXPERIENCE IS A PAYMENT WHOLLY WHOLLY AND EXCLUSIVELY LAID OU T FOR THE PURPOSES OF BUSINESS. BESIDES THE A.O HAS NOT DENIED THAT THE PARTNERS SH. NAVDEEP WALIA AND SMT. DEEPIKA WALIA WERE NOT TECHNICALLY QUALIFIED AND WERE NOT IN A POSITION TO RENDER SUCH SERVICES. THE LD. CIT( A) AFTER CONSIDERING THE 6 ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE DIRECT ED THE A.O. TO RESTRICT THE DISALLOWANCE TO 20% INSTEAD OF 50%. NOW THE REVENU E IS AGGRIEVED BY THE ORDER OF THE CIT(A) AND IS IN APPEAL BEFORE THIS BE NCH. 7.1. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY SUPP ORTED THE ORDER OF THE CIT(A) AND REITERATED THE SUBMISSIONS MADE BEFORE H IM. 7.2. THE LD. DR ON THE OTHER HAND RELIED ON THE ORDER OF THE ASSESSING OFFICER. 8. HAVING HEARD BOTH THE PARTIES AND CONSIDERING TH E RIVAL SUBMISSIONS WITH REFERENCE TO FACTS EVIDENCE AND MATERIAL PLAC ED ON RECORD WE ARE OF THE OPINION THAT THE LD. CIT(A) WAS JUSTIFIED IN RESTR ICTING THE DISALLOWANCE TO 20% IN VIEW THE FINDINGS GIVEN BY HIM IN PARA 7.4 OF HIS ORDER. THE DETAILED AND REASONABLE FINDINGS GIVEN BY THE CIT(A) ARE REP RODUCING HEREUNDER FOR APPRECIATION OF THE FACTS OF THE ISSUE IN DISPUTE: 8.4. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND RIVAL SUBMISSIONS OF BOTH THE A.O. IN HIS REMAND REPORT A ND WRITTEN SUBMISSIONS OF THE COUNSEL IT IS SEEN THAT THE PAYM ENTS MADE TO PROCURE THE BENEFIT OF A PERSONS TECHNICAL KNOWLED GE AND EXPERIENCE IS A PAYMENT WHOLLY AND EXCLUSIVELY LAID OUT FOR TH E PURPOSE OF BUSINESS. MOREOVER THE A.O. HAS NOT DENIED THAT T HE PARTNERS SH. NAVDEEP WALIA AND SMT. DEEPIKA WALIA WERE NOT TECHN ICALLY QUALIFIED AND THEY WERE NOT IN A POSITION TO RENDER SUCH SERVICES. THE A.OS ACTION TO DISALLOW THE MAJOR PORTION OF THE E XPENDITURE (I.E. 50%) ON THE GROUND THAT SAME WAS EXCESSIVE ON UNREA SONABLE WAS PARTIALLY CORRECT. THERE HAS TO BE SOME OBJECTIVE S TANDARD TO JUDGE SUCH EXPENDITURE. ALSO THERE IS NO FINDING OF THE A .O. TO SHOW THAT THE SALARY PAID FOR THE PURPOSES OF IMPARTING TRAINING WAS DISPROPORTIONATE TO THE SERVICE RENDERED. IN THESE CIRCUMSTANCES IT WOULD BEST TO RESTRICT THE DISALLOWANCE ON THIS SCORE AT 20% INST EAD OF 50% DONE BY THE A.O. THE COUNSEL FOR THE APPELLANT HAS RIGHTLY CONTENDED THAT NO DISALLOWANCE NEEDS TO BE MADE FROM THE PAYMENT OF R S.90 000/- PAID TO M/S. BHN COMPUTERS KHANNA FOR THE TRAINING WORK DONE. THIS AMOUNT NEEDS TO BE REDUCED BY THE A.O. BEFORE CALCU LATING THE 20% DISALLOWANCE. 8.1. IN VIEW OF THE ABOVE LEGAL AND FACTUAL DISCUSS IONS OF THE ISSUE IN QUESTION WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND THE SAME IS UPHELD. HENCE THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 7 9. IN THE FOURTH GROUND OF APPEAL THE REVENUE CONT ENDED THAT THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.4 24 088/- OUT OF THE TOTAL OF RS.4 34 088/- ON ACCOUNT OF DISALLOWANCE OUT OF BU S- PASS/COMMISSION/DISCOUNT EXPENSES. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE ASSESSMENT PROCEEDINGS THE A.O. NOTICED THAT THE ASSESSEE HAD DEBITED AN AMOUNT OF RS.17 36 355/- IN THE PROFIT AND LOSS ACCOUNT ON ACCOUNT OF COMMISSION DISCOUNT AND BUS-PASSES PAID TO THE STUDENTS. THE A.O. ISSUED SUMMONS U/S 131 OF THE ACT TO SIXTEEN P ERSONS/STUDENTS IN ORDER TO VERIFY THE GENUINENESS OF THE CLAIMS MADE. THE A .O. RECORDED STATEMENTS OF FOUR PERSONS AND ON THE BASIS OF EACH STATEMENT HELD THAT THE EXPENDITURE WAS EXCESSIVE AND THE ASSESSEE HAD UNDER STATED TH E INCOME. THE ASSESSING OFFICER DISALLOWED A SUM OF RS.4 34 088/- ON THIS ACCOUNT. AGGRIEVED BY THE ORDER OF THE A.O. THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). THE ISSUED WAS REMANDED TO THE A.O. THE ASSESSEE IN RE SPONSE TO REMAND REPORT STATED THAT SECTION 37 OF THE ACT GRANTS DEDUCTION IN RESPECT OF ANY EXPENDITURE INCURRED SOLELY FOR THE PURPOSE OF EA RNING SUCH PROFIT OR GAIN. THE LD. CIT(A) AFTER CONSIDERING THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE HELD THAT IN THE PRESENT CASE OVER 99% OF THE EXPENDITURE HAS BEEN PROVED BY THE ASSESSEE TO HAV E BEEN SPENT. ACCORDING TO HIM THE A.O. RECORDED THE STATEMENTS OF THE PER SONS WHO HAD SATISFIED THE TEST THAT THE EXPENDITURE HAD BEEN INCURRED EXC LUSIVELY FOR THE PURPOSES OF BUSINESS. IN VIEW OF THESE FACTS AND CIRCUMSTANC ES THE LD. CIT(A) SUSTAINED THE SMALL PORTION OF DISALLOWANCE I.E. A BOUT RS.10 000/- AND DELETED THE BALANCE ADDITION. NOW THE REVENUE IS A GGRIEVED BY THE ORDER OF THE CIT(A) AND IS IN APPEAL BEFORE US. 8 9.1. THE LD. COUNSEL FOR THE ASSESSEE PLACED RELIAN CE ON THE ORDER OF THE CIT(A) AND REITERATED THE SUBMISSIONS MADE BEFORE T HE LOWER AUTHORITIES. 9.2. THE LD. DR ON THE OTHER HAND RELIED ON THE ORDER OF THE ASSESSING OFFICER. 10. WE HAVE HEARD BOTH THE PARTIES AND GIVEN OUR TH OUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS WITH REFERENCE TO FACTS EVIDENCE AND MATERIAL PLACED ON RECORD AND ALSO GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE LD. CIT(A) IN PARA 9.4. OF HIS ORDER HAS GIV EN DETAILED AND WELL REASONED FINDINGS AND WE DO NOT FIND ANY VALID GRO UND TO INTERFERE WITH FINDINGS OF THE CIT(A) WHICH ARE BASED ON LEGAL FA CTUAL MATRIX OF THE CASE. HOWEVER FOR APPRECIATION OF THE FACTS OF THE CASE THE REPRODUCE THE FINDINGS OF THE CIT(A) HEREUNDER: 9.4. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND RIVAL SUBMISSIONS OF BOTH THE A.O. IN HIS REMAND REPORT A ND WRITTEN SUBMISSIONS OF THE COUNSEL IT IS SEEN THAT SECTION 37 OF THE ACT GRANTS DEDUCTION IN RESPECT OF ANY EXPENDITURE INCURRED SOLELY FOR THE PURPOSE OF EARNING SUCH PROFIT OR GAIN. THE FIRST A DVERB WHOLLY IN THE PHRASE LAID OUT OR EXPENDED WHOLLY AND EXCLUSI VELY REFERS TO THE QUANTUM OF THE EXPENDITURE I.E THE SUM OF MONEY SP ENT. IN THE PRESENT CASE OVER 99% OF THE EXPENDITURE HAS BEEN PROVED B Y THE APPELLANT TO HAVE BEEN SPENT. THE A.O. EXAMINED AND SCRUTINIZED THE EXPENDITURE BY CALLING THE BENEFICIARIES U/S 131 OF THE ACT AND RECORDING THEIR STATEMENTS. THEY HAD ALL SATISFIED THE TEST THAT TH E EXPENDITURE HAD BEEN INCURRED EXCLUSIVELY FOR THE PURPOSE OF BUSINE SS. THE REASONABLENESS OF THE EXPENDITURE HAS ALSO BEEN GON E INTO BY THE A.O. AND THE PURPOSE OF DETERMINING WHETHER THE AMOUNT W AS ACTUALLY SPENT HAS BEEN ESTABLISHED. IN SUCH CIRCUMSTANCES O NLY A SMALL PORTION OF THE EXPENDITURE I.E. TO SAY ABOUT RS.10 000/- CA N BE ALLOWED TO BE SUSTAINED AND THE BALANCE DELETED. 10.1. IN VIEW OF THE ABOVE LEGAL AND FACTUAL DISCUS SIONS OF THE CASE WE CONCUR WITH THE FINDINGS OF THE LD. CIT(A) AND UPH OLD HIS ACTION. HENCE THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 11. IN THE FIFTH GROUND OF APPEAL THE DEPARTMENT CONTENDED THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.2 00 00 0/- MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OUT OF CONVEYANCE AND MOBIL E ALLOWANCE EXPENSES. 9 BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE AO NOTICED THAT THE ASSESSEE HAD DEBITED IN THE PROFIT AND LOSS ACCOUNT AN AMOU NT OF RS.3 07 200/- ON ACCOUNT OF CONVEYANCE ALLOWANCE AND RS.2 68 800/- O N ACCOUNT OF MOBILE ALLOWANCE PAID TO THE EMPLOYEES. THE A.O. ASKED THE ASSESSEE PRODUCE DOCUMENTARY EVIDENCE IN SUPPORT OF SUCH PAYMENTS. T HE ASSESSEE FAILED TO PRODUCE ANY DOCUMENTARY EVIDENCE BEFORE THE A.O. BU T STATED THAT SUCH ALLOWANCE WAS GIVEN ONLY TO FOUR TO FIVE EMPLOYEES. THUS THE A.O. MADE AN ADHOC DISALLOWANCE OF RS.2 00 000/- UNDER THIS HEAD . AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO DEL ETED THE ADHOC DISALLOWANCE BY HOLDING THAT THE EXPENDITURE HAS BE EN INCURRED FOR COMMERCIAL EXPEDIENCY. 11.1. THE LD. COUNSEL FOR THE ASSESSEE PLACED RELI ANCE ON THE ORDER OF THE LD. CIT(A) AND REITERATED THE SUBMISSIONS MADE BEF ORE HIM. 11.2. THE LD. DR ON THE OTHER HAND RELIED ON TH E ORDER OF THE ASSESSING OFFICER. 12. WE HAVE HEARD BOTH THE PARTIES AND GIVEN OUR TH OUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS WITH REFERENCE TO FACTS EVIDENCE AND MATERIAL PLACED ON RECORD AND ALSO GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE ARE OF THE OPINION THAT THE LD. CIT(A) WHILE DE LETING THE ADDITION HAS GIVEN DETAILED AND WELL REASONED FINDING WHICH REQ UIRES NO INTERFERENCE. HOWEVER THE FINDINGS OF THE CIT(A) GIVEN IN PARA 10.4. OF HIS ORDER ARE REPRODUCED HEREUNDER FOR APPRECIATION OF THE FACTS OF THE CASE: 10.4. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF T HE CASE AND RIVAL SUBMISSIONS OF BOTH THE AO IN HIS REMAND REPORT AND WRITTEN SUBMISSIONS OF THE COUNSEL IT IS SEEN THAT NORMALLY EXPENDITURE INCURRED BY AN ASSESSEE BY WAY OF REMUNERATION BEN EFIT OR AMENITY TO HIS EMPLOYEES OR STAFF IS A LEGITIMATE BUSINESS EXPENDITURE INCURRED WITH THE OBJECT OF CARRYING ON HIS BUSINESS AND FOR EARNING PROFITS THEREFROM. IN CASE THE EMPLOYER AND EMPLOYEE HAVE B ETWEEN THEMSELVES FIXED CERTAIN REMUNERATION OR ALLOWANCES TO BE PAID TO THE EMPLOYEE/STAFF IT IS NOT FOR THE A.O. TO REDUCE SU CH REMUNERATION/ALLOWANCE OR TO REFIX THE SAME AT A L OWER FIGURE ON THE GROUND THAT EMPLOYEE SERVICES ARE NOT WORTH THAT MU CH OR MORE FAVOURABLE TERMS COULD BE PROCURED IN SIMILAR OTHER CASES. THE REASONABLE OF SUCH TERMS SHOWING REMUNERATION/ALLOW ANCES HAS TO BE CONSIDERED FROM THE POINT OF VIEW OF THE BUSINESSMA N CONCERNED AND NOT FROM THE POINT OF VIEW OF THE A.O. THERE IS THU S NO CASE THAT ANY PORTION OF SUCH PAYMENT HAS NOT BEEN ACTUALLY PAID OR HAS BEEN HELD TO HAVE BEEN PAID FOR REASONS OTHER THAN COMMERCIAL EX PEDIENCY. THE ADHOC DISALLOWANCE MADE IS THEREFORE DELETED. 10 12.1 CONSIDERING THE TOTALITY OF THE FACTS AS NARR ATED HEREINABOVE WE ARE OF THE CONSIDERED OPINION THAT THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION WHICH MADE BY THE A.O. WITHOUT APPRECIATI NG THE FACTS IN RIGHT PERSPECTIVE. WE THEREFORE DO NOT FIND ANY VALID G ROUND TO INTERFERE WITH THE FINDINGS OF THE CIT(A). ACCORDING WE UPHOLD THE SA ME AND DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 12. IN THE SIXTH GROUND OF APPEAL THE REVENUE CONT ENDED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.2 50 000/- MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF LICENSE FEE EX PENSES. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAD CLAIMED EXPEN DITURE OF RS.2 50 000/- IN THE PROFIT & LOSS ACCOUNT FOR MAKING PAYMENT TOWARD S LICENSE FEES TO M/S. PTU AND CAL-C. THE A.O. ASKED THE ASSESSEE TO EXPLA IN HOW SUCH LICENSE FEES HAD BEEN CLAIMED AS REVENUE EXPENDITURE. BEING NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE THE A.O. DISALLOWED TH E SAME BY HOLDING THAT THE SAME WAS CAPITAL IN NATURE. AGGRIEVED BY THE OR DER OF THE ASSESSING OFFICER THE ASSESSEE FILED AN APPEAL BEFORE THE LD . CIT(A). THE LD. CIT(A) REMANDED THE MATTER TO THE A.O. IN RESPONSE TO THE REMAND REPORT THE ASSESSEE SUBMITTED THAT IT HAD MERELY ACQUIRED THE USE OF A LICENSE TO OPERATE DISTANCE EDUCATIONAL PROGRAMME OF THE TWO EDUCATI ONAL INSTITUTIONS NAMELY PTU AND CAL-C AND THE PAYMENTS MADE FOR REN EWAL OF LICENSE EVERY YEAR OR THREE YEARS WAS FOR USAGE AND COULD N OT BE HELD TO BE CAPITAL EXPENDITURE. CONSIDERING THE SUBMISSIONS OF THE ASS ESSEE THE LD. CIT(A) DELETED THE ADDITION BY HOLDING THE SAME AS REVENUE IN NATURE. NOW THE REVENUE IS AGGRIEVED BY THE ORDER OF THE CIT(A) AND IS IN APPEAL BEFORE THIS BENCH. 12.1. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY RE LIED ON THE ORDER OF THE CIT(A). 11 12.2. THE LD. DR ON THE OTHER HAND SUPPORTED TH E ORDER OF THE ASSESSING OFFICER. 13. HAVING HEARD BOTH THE PARTIES AND PERUSING THE MATERIAL PLACED ON RECORD WE ARE OF THE CONSIDERED VIEW THAT THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION BY HOLDING THAT THE EXPENDITU RE INCURRED WAS REVENUE IN NATURE. THE DETAILED AND WELL REASONED FINDINGS GIVEN BY THE CIT(A) IN HIS ORDER IN PARA 11.4. ARE REPRODUCED HEREUNDER FO R APPRECIATION OF THE FACTS OF THE CASE: 11.4. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND RIVAL SUBMISSIONS OF BOTH THE A.O. IN HIS REMAND REPORT AND WRITTEN SUBMISSIONS OF THE COUNSEL IT IS SEEN THAT THE APPE LLANT HAD MERELY ACQUIRED THE USER OF A LICENSE TO OPERATE DISTANCE EDUCATIONAL PROGRAMME OF THE TWO EDUCATIONAL INSTITUTIONS NAME LY PTU AND CAL-C. THE PAYMENTS MADE FOR RENEWAL OF LICENSE EVE RY YEAR/ OR THREE YEARS WAS FOR USAGE AND COULD NOT BE HELD TO BE CAPITAL EXPENDITURE. THE EXPENDITURE ON REGISTRATION OF TRA DE MARK WHICH THOUGH PERTAINED TO SEVEN YEARS BUT NEEDED CONSTANT RENEWAL WAS HELD TO BE REVENUE EXPENDITURE [(REF: CIT V. FINLAY MILLS LTD. (1951) 20 ITR 475 (SC)] CIT V MB UMBRELLA INDUSTRIES (1984) 145 ITR 292 (MP). THE PAYMENT EVERY YEAR/OR THREE YEARS OF THE LICENSE FEE DID NOT CONSTITUTE ANY ENDURING BENEFIT BECAUSE THERE WAS NO CERTAINTY OF THE DURATION OF THE SUBSTANTIAL ADVANTAGE ACCRUING TO THE APPELLANT AND THE SAME COULD BE PUT TO AN END ON THE EXPIRY OF TH E TERM SPECIFIED. THE EXPENDITURE INCURRED BY THE APPELLANT ON THIS SCORE IS THEREFORE HELD TO BE REVENUE IN NATURE AND ADDITION MADE IS D ELETED. 13.1. IN VIEW OF THE ABOVE LEGAL AND FACTUAL DISCU SSIONS WE DO NOT FIND ANY INFIRMITY IN THE FINDINGS OF THE LD. CIT(A) AND THE SAME ARE UPHELD. ACCORDINGLY THIS GROUND OF APPEAL OF THE REVENUE I S DISMISSED. 14. IN THE SEVENTH GROUND OF APPEAL THE REVENUE CO NTENDED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.5 75 000/- MADE BY THE A.O. U/S 68 OF THE ACT ON ACCOUNT OF CASH CREDI TS IN THE CAPITAL ACCOUNTS OF THE PARTNERS. THE BRIEF FACTS OF THE CASE ARE TH AT THE DURING THE ASSESSMENT PROCEEDINGS THE A.O. NOTICED THAT THERE WERE CASH CREDITS OF RS.2 25 00/- AND RS.3 50 000/- APPEARING IN THE ACCOUNTS OF SH. NAVDEEP WALIA AND MRS. 12 DEEPIKA WALIA. THE AO ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF THESE CASH DEPOSITS ALONG WITH DOCUMENTARY EVIDENCE. THE ASSESSEE STATED THAT ALL THE PARTNERS WERE ASSESSED TO TAX AND THEY HAD INTR ODUCED CAPITAL FROM THEIR OWN SOURCES. THE A.O. OBSERVED THAT THE ASSESSEE HA D FAILED TO PROVE THE SOURCE OF THE CASH CREDITS AND ALSO FAILED TO DISCH ARGE ITS BURDEN OF PROVING THE IDENTITY AS WELL AS CREDITWORTHINESS OF THE CRE DITORS AND GENUINENESS OF THE TRANSACTIONS. THEREFORE HE ADDED THE SAME TO THE INCOME OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF THE A.O. THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). THE A.O. SUBMITTED HIS REMAND RE PORT BEFORE THE CIT(A). IN RESPONSE TO THE REMAND REPORT THE ASSESSEE STAT ED THAT THE CONTRIBUTIONS MADE BY THE PARTNERS WERE OUT OF THEIR INDIVIDUAL R ESOURCES AND THEY HAD CONFIRMED HAVING MADE SUCH CONTRIBUTIONS. THE ASSES SEE FURTHER STATED THAT IT IS THE DUTY OF THE PARTNERS TO EXPLAIN THE SOURC E OF THEIR CONTRIBUTIONS AND THE ASSESSEE FIRM CANNOT BE ASKED TO PROVE THE SOUR CE OF THE SOURCE. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE AS SESSEE DELETED THE ENTIRE ADDITION. NOW THE REVENUE IS AGGRIEVED BY THE ORDE R OF THE CIT(A) AND IS IN APPEAL BEFORE US. 14.1. THE LD. COUNSEL FOR THE ASSESSEE RELIED ON T HE ORDER OF THE CIT(A) WHEREAS THE LD. DR SUPPORTED THE ORDER OF THE A.O . 15. WE HAVE HEARD BOTH THE PARTIES AND GIVEN OUR TH OUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS WITH REFERENCE TO FACTS EVIDENCE AND MATERIAL PLACED ON RECORD AND ALSO GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE ARE OF THE CONSIDERED OPINION THAT THE LD. CIT(A ) WHILE DELETING THE ADDITION HAS GIVEN DETAILED AND WELL REASONED FINDI NGS WHICH REQUIRES NO INTERFERENCE. HOWEVER THE FINDINGS OF THE CIT(A) GIVEN IN PARA 13.4. OF HIS ORDER ARE REPRODUCED HEREUNDER FOR APPRECIATION OF THE FACTS OF THE CASE: 13 13.4. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF TH E CASE AND RIVAL SUBMISSIONS OF BOTH THE A.O. IN HIS REMAND REPORT A ND WRITTEN SUBMISSIONS OF THE COUNSEL IT IS SEEN THAT THE A.O. MUST HAVE M ATERIAL BEFORE HIM TO INDICATE THAT THOUGH THE SUMS FOUND CREDITED IN TH E BOOKS WERE ACTUALLY RECEIVED BY THE FIRM BUT IN REALITY THEY DID NOT REPRESENT THE MONEYS OF THE PARTNERS CONCERNED INSTEAD THEY REPRESENTED THE UND ISCLOSED PROFITS OF THE FIRM WHICH HAD EARLIER LEFT THE FIRM AND RETURNED T HROUGH THE INTERMEDIATION OF THE PARTNERS. IN SUCH AN EVENTUALITY THEN ONLY T HE SUM SO FOUND CREDITED IN THE BOOKS OF THE FIRM CAN BE BROUGHT TO TAX AS THE UNDISCLOSED INCOME OF THE APPELLANT FIRM. [REF: NARAYANDS KEDARNATH V. CIT (1 952) 22 ITR 18]. FURTHER IN CASE THE FIRM EXPLAINS THAT THE AMOUNTS RECEIVED WERE THE DEPOSITS BY THE PARTNERS CONCERNED AND FURTHER EST ABLISHES BY PRODUCING EVIDENCE THAT THE AMOUNTS CONCERNED WERE ACTUALLY B ROUGHT INTO THE FIRM BY SUCH PERSONS THEN THE APPELLANT FIRM MUST DEEMED TO HAVE ESTABLISHED ITS CASE. ONCE THE DEPARTMENT ACCEPTS THAT THE SUMS FOU ND CREDITED IN THE BOOKS OF THE FIRM WERE BROUGHT INTO THE FIRM BY WAY OF TH E PARTNERS THEN NO PART OF THAT AMOUNT CAN BE HELD TO BE REVENUE INCOME OF THE PARTNERSHIP FIRM. IN THE ASSESSMENT PROCEEDINGS OF THE PARTNERSHIP FIRM THE INCORRECTNESS OF THE EXPLANATION OFFERED AS REGARDS THE SOURCE FROM WHIC H PARTNER OBTAINED THE MONEY WOULD BE OF NO EFFECT. [REF: BALBHADRA CHAND MUNNA LAL V CIT (1958) 33 ITR 781]. IT IS FOR THE PARTNERS TO EXPL AIN THE SOURCE OF CREDIT. THE FACT OF ACTUAL ADVANCE MAY JUSTIFY THE ASSESSMENT I N THE PARTNERS HANDS EVEN WHERE THE EXPLANATION OF THE PARTNER AS TO THE SOUR CE IS UNEXPLAINED. THE RELEVANT PROVISION FOR MAKING SUCH AN ADDITION IS S ECTION 69 AND NOT SECTION 68 [REF: CIT V. SHIV SHAKTI TIMBERS (1998) 220 ITR 505 (MP) (1983) 142 ITR 133 (PAT)]. WHERE FUNDS CLEARLY EMANATE FROM TH E PARTNERS EITHER BY WAY OF CHEQUE OR OTHERWISE IT IS POSSIBLE TO PROVE THE ADVANCE OF THE AMOUNT BY THE PARTNER OF THE FIRM THE BURDEN OF PROOF AND ASSESSIBILITY IN SUCH CASES ARE MATTERS WHICH CAN ONLY BE CONSIDERED IN THE PA RTNERS HANDS [ REF: INDIA RICE MILLS V. CIT (1996) 218 ITR 239 (ALL)]. THE AD DITION MADE ON THIS ACCOUNT IS THEREFORE DELETED. 15.1. IN VIEW OF THE ABOVE LEGAL AND FACTUAL MATRIX OF THE CASE WE ARE OF THE FIRM VIEW THAT THE LD. CIT(A) DELETED THE ADDITIO N WHICH WAS MADE BY THE A.O. WITHOUT APPRECIATING THE FACTS IN RIGHT PERSP ECTIVE. WE THEREFORE DO NOT FIND ANY VALID GROUND TO INTERFERE WITH THE FIN DINGS OF THE CIT(A). ACCORDINGLY WE UPHOLD THE SAME AND DISMISS THIS GR OUND OF APPEAL OF THE REVENUE. 16. GROUND NOS. 8 & 9 ARE GENERAL IN NATURE AND NEE D NO SEPARATE ADJUDICATION. 17. NOW WE TAKE UP APPEAL OF THE ASSESSEE IN ITA N O. 723/CHD/2011 WHERE THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS ERRED IN SUSTAINING THE DISALLOWANCE MA DE BY THE 14 ASSESSING OFFICER US/ 40(A)(IA) OF THE I.T.ACT OF RS.14 80 980/- REIMBURSED TO M/S. ALL INDIA PTU DEP ASSOCIATES ON ACCOUNT OF ASSESSEES SHARE OF COMMON ADVERTISEMENT EXPENSE S INCURRED BY THE ASSOCIATION ALLEGEDLY FOR NOT DEDUCTING TAX AT SOURCE U/S 194C OF THE INCOME TAX ACT THEREFROM. II. WHILE DOING SO THE LD. CIT(A) HAS IGNORED THE FACT THAT M/S. ALL INDIA PTU DEP ASSOCIATES WAS NOT AN ADVERTISING AGENCY BUT AN ASSOCIATION OF ALL REGION AL CENTRES OF PTU THE REIMBURSEMENT OF RS.14 80 980/ - WAS MADE TO IT BY THE APPELLANT AS A MEMBER OF THAT ASSOCIATION AND RELATIONSHIP BETWEEN THE PAYEE AND THE APPELLANT BEING NOT AS CONTRACTOR AND CONTRACTEE WI THIN THE MEANINGS OF SECTION 194C OF THE I.T.ACT DEDUC TION U/S 194C WAS NOT REQUIRED TO BE MADE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS ERRED IN DELETING ONLY AN AMOUNT OF RS.2 6 000/- INSTEAD OF ENTIRE DISALLOWANCE OF RS.52 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DONATION TO SHREE MATA VAISHNO DEVI SHRINE BOARD KATRA. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN SUSTAINING A DISALLOWANCE OF RS .50 000/- OUT OF RS.1 00 000/- SPENT BY THE APPELLANT ON FUNC TION FOR PUBLICITY ALLEGEDLY FOR NOT PRODUCING VOUCHERS. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN SUSTAINING A DISALLOWANCE OF RS .71 000/- OUT OF EXPENSES INCURRED BY THE ASSESSEE ON THE TRA INING OF STAFF ON THE GROUND OF UNREASONABLENESS AND EXCESSIVENESS . 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN SUSTAINING A DISALLOWANCE OF RS .10 000/- OUT OF EXPENSES INCURRED ON PAYMENT OF COMMISSION DISCOUNT AND BUS PASSES TO STUDENTS. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN SUSTAINING AND EXCESSIVE DISALL OWANCE OF RS.1 24 480/- OUT OF CAR AND TELEPHONE EXPENSES FO R PERSONAL USE THEREOF. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS FAILED TO PASS AN APPROPRIATE ORDER ON G ROUND NO.11 OF THE APPEAL FILED BEFORE HIM CONTESTING THE CHARG ING OF INTEREST U/S 234B 234C AND 234D AND THAT WITHDRAWN U/S 244A OF THE I.T. ACT. 8. THE FIRST FIVE DISALLOWANCES SUSTAINED BY THE CI T(A) AND CONTESTED IN GROUND NO. 1 TO 5 BEING AGAINST THE LA W AND FACTS AVAILABLE ON RECORD DESERVE TO BE DELETED WHEREAS THE QUANTUM OF DISALLOWANCE FOR PERSONAL USE OF CAR AND TELEPHO NE AS MENTIONED IN GROUND NO. 6 ABOVE DESERVES TO BE REDU CED REASONABLY AND THE INTEREST CHARGED U/S 234B 234C & 234D AND THE WITHDRAWAL OF INTEREST U/S 244A DESERVE TO BE DELETED/REDUCED. 9. THE APPELLANT CRAVES LEAVE TO ADD AMEND OR DELE TE ANY GROUND(S) OF APPEAL BEFORE IT IS FINALLY HEARD FOR DISPOSAL. 15 18. IN GROUND NO.1 THE ASSESSEE CHALLENGED THE CON FIRMATION OF DISALLOWANCE BY THE CIT(A) US/ 40(A)(IA) OF THE I. T.ACT AMOUNTING TO RS.14 80 980/- STATING AS REIMBURSEMENT TO M/S. AL L INDIA PTU/DEP ASSOCIATES AS ASSESSEES SHARE OF COMMON ADVERTISEM ENT EXPENSES INCURRED BY THE ASSOCIATION FOR NON DEDUCTION OF TAX AT SOU RCE U/S 194C OF THE INCOME TAX ACT. 18.1. IN THE COURSE OF PRESENT APPELLATE PROCEEDIN GS THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED WRITTEN SUBMISSIONS W HICH ARE REPRODUCED HEREUNDER: THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLA NT IS A FIRM RUNNING AN INSTITUTION IN THE NAME AND STYLE OF M/S. VAISHNO MAA COMPUTERS FOR IMPARTING TO THE STUDENTS IN INFORMATION TECHNOLOGY WHICH INCLUDES COMPUTER C OURSES. IT IS LOOKING AFTER 21 LEARNING CENTRES FUNCTIONING UND ER ITS SUPERVISIONS. II) IT IS A MEMBER OF ALL INDIA PTU-DEP ASSOCIATES WHIC H IS AN ASSOCIATION OF REGIONAL CENTRES FUNCTIONING IN INDI A. THE REGISTERED OFFICE OF THE ASSOCIATION IS AT LUDHIAN A WITH BRANCH OFFICE AT NEW DELHI. THE LUDHIANA OFFICE OF THE ASS OCIATION COVERS THE STATES OF PUNJAB HARYANA ANDHIMACHAL PRADESH AND UNION TERRITORY OF CHANDIGARH. IT DEAL WITH THE COMMON MATTERS INCLUDING INTER-ALIA MAKING OF ARRA NGEMENT OF ADVERTISEMENT AND INCURRING EXPENDITURE THEREON . IN ORDER TO MINIMIZE THE EXPENSES COMMON ADVERTISEMENTS ARE A RRANGED BY THE ASSOCIATION THROUGH ADVERTISEMENT AGENCIES. SUCH ADVERTISEMENTS WERE COMMON FOR ALL REGIONAL/LEARNI NG CENTRES AND NOT FOR REGIONAL CENTRE PATIALA ALONE WHICH IS BEING RUN BY THE APPELLANT FIRM. THE EXPENSES INCURRED BY THE ASSOCIATION ON BEHALF OF REGIONAL CENTRES ARE SUBSE QUENTLY RECOVERED BY IT FROM THEM AS THEIR SHARE IN THE CO MMON EXPENDITURE. III) THE PAYMENT OF RS.14 80.980/- WAS MADE BY THE APPEL LANT TO THE ASSOCIATION AS A REIMBURSEMENT OF ITS SHARE OF COMMON ADVERTISEMENT EXPENSES INCURRED BY THAT ASSOCIATION . IT MAY BE MADE CLEAR THAT THE ASSOCIATION ITSELF WAS NOT AN A DVERTISEMENT AGENCY AND THE RELATIONSHIP BETWEEN THE PAYEE AND T HE PAYER WAS THAT OF AN ASSOCIATION AND ITS MEMBER AND NOT T HAT OF CONTRACTOR AND CONTRACTEE AS CONTEMPLATED U/S 194C OF THE ACT. THEREFORE THE APPELLANT WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE OUT OF SUCH REIMBURSEMENT OF ITS SHARE OF EX PENDITURE INCURRED BY THE ASSOCIATION. IV) ON THE OTHER HAND IN THE PRESENT CASE THE CONTRACT FOR MAKING THE ADVERTISEMENT WAS ENTERED INTO BETWEEN THE ADV ERTISEMENT 16 AGENCIES AND THE ASSOCIATION AND THE PAYMENT WAS M ADE BY THE ASSOCIATION TO THE ADVERTISEMENT AGENCIES OR PRINT MEDIA AS THE CASE MAY BE. THE TAX WAS ALSO DEDUCTED BY IT AT SOU RCE OF SUCH PAYMENTS AND DEPOSITED IN THE GOVERNMENT ACCOUNT. T HESE FACTS HAVE BEEN CERTIFIED BY THE ASSOCIATION IN ITS CONFI RMATION A COPY OF WHICH IS PLACED AT PAGE 1 OF THE PAPER BOOK. 2.2. HENCE THE APPELLANT MERELY REIMBURSED ITS SHARE OF EXPENDITURE INCURRED BY THE ASSOCIATION WHICH AS EXPLAINED EAR LIER DID NOT CONSTITUTED A PAYMENT WITHIN THE MEANINGS OF SECTIO N 194C AND NO TAX WAS REQUIRED TO BE DEDUCTED THEREFROM UNDER THAT SECTION. THE AUTHORITIES BELOW HAVE WRONGLY PRESUM ED THAT THE ASSOCIATION WAS AN ADVERTISEMENT AGENCY AND THE PAY MENT MADE TO IT BY THE APPELLANT WAS COVERED BY THAT SECTION. SINCE TAX WAS NOT DEDUCTED AT SOURCE THE EXPENDITURE WAS DISALLO WED U/S 40(A)(IA) OF THE ACT. 2.3. THE SUBMISSION OF THE APPELLANT ARE SUPPORTED BY FO LLOWING DECISIONS: I) 81 ITD 173 (LUCK) IN THE CASE OF U.P. STATE INDUST RIAL CORPORATION LTD. V. ITO II) 83 ITD 148 (PUNE)DATA DIGAMBER SEKHARI KAMGAR SANSTHA LTD. V. ACIT III) THE RELIANCE OF THE A..O. ON THE DECISION OF THE SU PREME COURT IN THE CASE OF ASSOCIATED CEMENT COMPANY REPORTED IN 201 ITR 437 (SC) IS TOTALLY MISPLACED BECAUSE THE FACTS OF THAT CASE ARE QUITE DISTINGUIS HABLE FROM THOSE OBTAINING IN THE CASE OF THE APPELLANT I N AS MUCH AS IN THAT CASE THERE WAS AN AGREEMENT BETWEEN THE APPELLANT AND THE CONTRACTOR WHEREAS IN THE PRESEN T CASE THERE WAS NO SUCH AGREEMENT OR CONTRACT AS ENVISAGE D IN SECTION 194C BETWEEN THE APPELLANT AND THE ASSOCIAT ION NOR WAS THERE ANY SUCH AGREEMENT BETWEEN THE APPELL ANT AND THE ADVERTISEMENT AGENCIES. 2.4. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AND THE LEGAL POSITION AS EXPLAINED THE PROVISIONS OF SECTI ON 194C WERE NOT AT ALL ATTRACTED IN THIS CASE NOR EVEN ANY DEDU CTION UNDER THAT SECTION WAS REQUIRED TO BE MADE AS IT WAS ONLY REIMBURSEMENT MADE TO THE ASSOCIATION BY THE APPEL LANT OF ITS SHARE OF EXPENDITURE INCURRED BY THAT ASSOCIATION. CONSEQUENTLY THE PROVISIONS OF SECTION 40(A)(IA) WERE ALSO NOT A TTRACTED AND THE DISALLOWANCE MADE/SUSTAINED BY THE A.O./CIT(A) UNDER THAT SECTION WAS ABSOLUTELY UNWARRANTED AND ILLEGAL. 2.5. THE ABOVE FACTS WERE BROUGHT TO THE NOTICE OF THE A UTHORITIES BELOW ALSO VIDE LETTER DATED 26.2.2010 TO A.O. WHIC H HAS BEEN REPRODUCED BY HIM IN PARA 1 AT PAGE 2-3 OF THE ASSE SSMENT ORDER AND IN THE FORM OF WRITTEN AS WELL AS VERBAL SUBMI SSION MADE BEFORE THE CIT(A) DURING APPEAL PROCEEDING BUT UNFO RTUNATELY BOTH THE AUTHORITIES BELOW DID NOT APPRECIATE THE C ORRECT FACTUAL AND LEGAL POSITION BUT INSTEAD OF THAT DECIDED THE ISSUE AGAINST THE APPELLANT ON IRRELEVANT CONSIDERATION AND MERE SURMISES. IT IS THEREFORE HUMBLY SUBMITTED THAT THE DECISION OF BOTH THE AUTHORITIES BELOW DESERVE TO BE REVERSED AND THE DI SALLOWANCE OF RS.14 80 980/- MADE BY THE A.O. AND SUSTAINED BY THE CIT(A) DELETED. 17 18.2. THE LD. DR ON THE OTHER HAND RELIED ON TH E ORDERS OF THE AUTHORITIES BELOW. 18.3 WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSION S FACTS OF THE CASE AND RELEVANT RECORD. THE ASSESSEE HAS FAILED TO FILE DO CUMENTARY EVIDENCE INDICATING EXISTENCE OF AGREEMENT BETWEEN THE PRINC IPAL I.E. THE PRESENT ASSESSEE WHO IS THE RECIPIENT OF THE SERVICES PROV IDED BY THE ADVERTISING AGENCY AND THE ALL INDIA PTU DEP ASSOCIATION. IT AP PEARS THERE IS NO CONTRACT ENTERED INTO BETWEEN ALL INDIA PTU DEP ASS OCIATION AND THE SERVICE PROVIDER VIZ ADVERTISING AGENCY. SIMILARLY THERE IS NO CONTRACT BETWEEN THE PRESENT ASSESSEE AND THE SERVICE PROVID ER ADVERTISEMENT AGENCY. NO EVIDENCE HAS BEEN FILED BY THE ASSESSEE INDICATING THE BASIS OF QUANTIFICATION AND REIMBURSEMENT OF SUCH ADVERTISE MENT EXPENSES. IT IS ALSO RELEVANT TO MENTION HERE THAT NO BILLS WERE PRODUCE D ISSUED BY THE SERVICE PROVIDER EITHER BY ALL INDIA PTU DEP ASSOCIATION OR BY THE RECIPIENT OF THE SERVICES RENDERED BY THE ADVERTISING AGENCY TO SUP PORT THEIR CLAIM OF QUANTIFICATION OF THE AMOUNT INCURRED ON ADVERTISE MENT. IT IS ALSO NOT CLEAR WHETHER REIMBURSEMENT WAS MADE VOUCHERS BASED OR ON THE BASIS OF APPORTIONMENT. NO BASIS FOR APPORTION WAS FILED BY THE ASSESSEE. IN THE PRESENT CASE IT APPEARS THAT THE PRESENT ASSESSEE WHO IS RECIPIENT OF THE SERVICES RENDERED BY THE ADVERTISING AGENCY ALL IN DIA PTU DEP ASSOCIATION AND THE SERVICE PROVIDER ARE PRINCIPAL ENTITIES. NE EDLESS TO SAY THAT ONUS IS ON THE ASSESSEE TO ESTABLISH THE NON-APPLICABILITY OF THE PROVISIONS OF SECTION 194C OF THE ACT TO ITS CASE. IN THE ABSENCE OF SUCH MATERIAL EVIDENCES IT IS NOT POSSIBLE TO DISPOSE OF THE CASE HAVING REGARD TO THE RIVAL CONTENTIONS AND THE ORDERS PASSED BY THE LOWER AUTHORITIES. IN VIEW OF THIS WE CONSIDER IT APPROPRIATE TO RESTORE THIS ISSUE TO THE FILE OF T HE CIT(A) WITH A VIEW TO 18 PROPER DISPOSAL OF THE CASE IN THE LIGHT OF THE AD EQUATE MATERIAL OR EVIDENCE TO BE FILED BY THE ASSESSEE. ACCORDINGLY THE ISSU E IS RESTORED TO THE FILE OF THE LD. CIT(A) WITH A DIRECTION TO ADJUDICATE THE ISSUE AFRESH ON THE BASIS MATERIAL MENTIONED EARLIER OR ANY OTHER MATERIAL RE QUIRED OR PRODUCED AS ALSO IN ACCORDANCE WITH THE RELEVANT PROVISIONS OF THE A CT. THE CIT(A) MUST PROVIDE PROPER AND REASONABLE OPPORTUNITY TO THE A SSESSEE BEFORE ADJUDICATING THE ISSUE AFRESH.. 19. IN THE SECOND GROUND OF APPEAL THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE LD. CIT(A) ERRED IN DELETING ON LY AN AMOUNT OF RS.26 000/- INSTEAD OF ENTIRE DISALLOWANCE OF RS.52 000/-. THE BRIEF FACTS OF THE CASE ARE THAT THE AO DEBITED RS.58640/- TO THE PROFIT & LOSS ACCOUNT ON ACCOUNT OF DONATIONS MADE TO SHREE MATA VAISHNO DEV I SHRINE BOARD KATRA. THE ASSESSEE WAS ASKED TO PRODUCE RECEIPTS I N SUPPORT OF SUCH PAYMENTS WHICH HE FAILED TO DO SO. THE A.O. CONCLU DED THAT AN AMOUNT OF RS.52 000/- SHOWN TO HAVE BEEN PAID TO SHREE MATA V AISHNO DEVI SHRINE BOARD WAS ACTUALLY IN THE NAME OF ONE OF THE PARTN ERS OF THE FIRM NAMELY SH. NAVDEEP WALIA AND NOT IN THE NAME OF THE FIRM. THE A.O. DISALLOWED THE CLAIM AND ADDED THE SAME TO THE INCOME OF THE ASSES SEE. AGGRIEVED BY THE ORDER OF THE A.O. THE ASSESSEE FILED AN APPEAL BEFO RE THE CIT(A) WHO REDUCED THE ADDITION TO RS.26 000/- BY HOLDING THAT THE AO HAD WRONGLY DISALLOWED AN AMOUNT OF RS.52000/- WHEN THE DEDUCTI ON CLAIMED WAS ONLY FOR RS.26 000/-. HE ALSO PLACED RELIANCE ON THE JUD GMENT OF HONBLE SUPREME COURT IN THE CASE OF AJMER HOUSING CORPORA TION CIT V. (2010) 326 ITR 642 (SC). 19.1. THE LD. DR RELIED ON THE ORDER OF THE CIT( A). 19.2. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHE R HAND PLEADED THAT THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80G HAD BEE N ACCEPTED BY THE 19 CIT(A) AS SUCH THE ENTIRE DISALLOWANCE SHOULD HAV E BEEN DELETED. HE THEREFORE REQUESTED THAT THE ENTIRE DISALLOWANCE OF RS.52 000/- MADE BY THE A.O. MAY BE DELETED. 20. WE HAVE HEARD THE PARTIES AND PERUSED THE MATE RIAL PLACED ON RECORD INCLUDING THE ORDERS OF THE AUTHORITIES BELOW. AFTE R GOING THROUGH THE FINDINGS OF THE LD. CIT(A) WE ARE OF THE VIEW THAT THE LD. CIT(A) HAS PASSED DETAILED AND WELL REASONED ORDER. HOWEVER T HE FINDINGS OF THE CIT(A) GIVEN IN PARA 5.4 OF HIS ORDER ARE REPRODUC ED HEREUNDER FOR APPRECIATION OF THE FACTS: 5.4. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND RIVAL SUBMISSIONS OF BOTH THE A.O. IN HIS REMAND REPORT A ND WRITTEN SUBMISSIONS OF THE COUNSEL IT IS SEEN THAT IT IS NO T FOR THE A.O. TO JUDGE WHETHER THE APPELLANT COULD HAVE AVOIDED OR REDUCE D A PARTICULAR EXPENDITURE ON THE GROUND THAT THE MOTIVE BEHIND TH E EXPENDITURE WAS TO UNDULY SATIATE ONES OWN RELIGIOUS OR PERSONAL BE LIEFS. AN ITEM OF EXPENDITURE TO BE MADE ELIGIBLE FOR DEDUCTION MUST BE LOOKED AT FROM THE POINT OF VIEW OF THE PERSON MAKING THE PAYMENT AND NOT OF THE RECIPIENT. TO ALLOW THE CLAIM FOR DEDUCTION IS A M ATTER OF PROOF. PAYMENT HAS TO BE PROVED BY THE APPELLANT (REF: RAM ANAND SAGAR V. DCIT (2002) 256 ITR 134 (BOM.). HOWEVER IT IS NO W HERE A.OS CASE THAT SUCH AN EXPENDITURE MADE VOLUNTARILY WAS PURELY FOR PERSONAL REASONS AND NOT FOR PURPOSES OF BUSINESS. THERE IS A REASONABLE NEXUS BETWEEN THE EXPENDITURE AND THE BU SINESS THEREFORE SUCH EXPENDITURE HAS TO BE REGARDED AS HAVING BEEN INCURRED FOR THE PURPOSES OF BUSINESS. THE A.O. HAS IN HIS REMAND RE PORT RIGHTLY ACCEPTED THE ELIGIBILITY OF DEDUCTION U/S 80G TO TH E EXTENT OF RS.26 000/- (BEING 50% OF RS.52 000/- SPENT). THERE FORE DEDUCTION TO THIS EXTENT IS ALLOWED. 20.1 IN VIEW OF THE ABOVE DISCUSSIONS AND FINDINGS GIVEN BY THE CIT(A) THE A.O. IS DIRECTED TO DELETE THE ADDITION OF RS.5 2 000/-. HENCE THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 21. IN THE THIRD GROUND OF APPEAL THE ASSESSEE CON TENDED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE DISALLOW ANCE OF RS.50 000/- OUT OF RS.1 00 000/- SPENT ON FUNCTION FOR PUBLICITY. 22. WE HAVE ALREADY ADJUDICATED THE SIMILAR ISSUE IN GROUND NO.2 WHILE DECIDING THE APPEAL OF THE REVENUE. HOWEVER HAVIN G REGARD TO THE FACTS OF 20 THE CASE THE DISALLOWANCE IS RESTRICTED TO RS.20 0 00/-. THUS THE GROUND RAISED BY THE ASSESSEE IS PARTLY ALLOWED. 23. IN GROUND NO.4 THE ASSESSEE CONTENDED THAT THE LD. CIT(A) ERRED IN SUSTAINING A DISALLOWANCE OF RS.71 000/- OUT OF EXP ENSES INCURRED BY THE ASSESSEE ON THE TRAINING OF STAFF ON THE GROUND OF UNREASONABLENESS AND EXCESSIVENESS. 23.1 SIMILAR ISSUE CAME UP FOR CONSIDERATION BEFOR E THIS BENCH WHILE DECIDING GROUND NO.3 OF THE APPEAL OF THE REVENUE IN ITA NO. 649/CHD/2011. SINCE WE HAVE UPHELD THE VIEW TAKEN BY THE LD. CIT(A) AND DISMISSED THE APPEAL OF THE REVENUE THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS ALSO DISMISSED. 24. IN GROUND NO.5 THE LD. CIT(A) ERRED IN SUSTA INING A DISALLOWANCE OF RS.10 000/- OUT OF EXPENSES INCURRED ON PAYMENT OF COMMISSION DISCOUNT AND BUS PASSES TO STUDENTS. 24.1. SIMILAR ISSUE CAME UP FOR CONSIDERATION BEFOR E THIS BENCH WHILE DECIDING GROUND NO.4 OF THE APPEAL OF THE REVENUE IN ITA NO. 649/CHD/2011. HAVING REGARD TO THE FACTS OF THE CA SE ADDITION SUSTAINED OF RS.10 000/- IS DELETED. THIS GROUND OF APPEAL IS AL LOWED. 25. IN GROUND NO.6 THE ASSESSEE CONTENDED THAT TH E LD. CIT(A) ERRED IN SUSTAINING AN EXCESSIVE DISALLOWANCE OF RS.1 24 480 /- OUT OF CAR AND TELEPHONE EXPENSES FOR PERSONAL USE THEREOF. THE BR IEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAD DEBITED A SUM OF RS.6 97 838/ - FOR CAR PETROL TELEPHONE EXPENSES. THE AO OBSERVED THAT PERSONAL U SE OF SUCH EXPENSES COULD NOT BE RULED OUT AND HE MADE ESTIMATED 1/5 TH DISALLOWANCE OUT OF THESE EXPENSES UNDER SECTION 38(2) OF THE ACT. AGGRIEVED BY THE ORDER OF THE A.O. ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). THE ISS UE WAS REMANDED TO THE A.O. IN RESPONSE TO THE REMAND REPORT THE ASSESSEE SUBMITTED THAT EXPENSES 21 AT LEAST TO THE EXTENT OF RS.15 090/- BEING 1/5 TH OF RS.75 458/- (CONSUMPTION OF DIESEL IN GENERATOR) NO DISALLOWANCE WAS CALLE D FOR; AS THE GENERATOR WAS EXCLUSIVELY USED FOR THE PURPOSE OF BUSINESS AND TH ERE WAS NO ELEMENT OF PERSONAL NATURE AT ALL. HOWEVER IN VIEW OF THE REM AND REPORT OF THE A.O. AND SUBMISSIONS OF THE ASSESSEE THE CIT(A) ALLOWE D A RELIEF OF RS.15 090/- (BEING 1/5 TH OF RS.75 458/-) FROM THE TOTAL DISALLOWANCE OF RS. 1 39 570/-. NOW AGGRIEVED WITH THE ORDER OF THE LD. CIT(A) TH E ASSESSEE IS IN APPEAL BEFORE US AGAINST SUSTENANCE OF ADDITION OF RS.1 24 480/-. 25.1. THE LD. DR RELIED ON THE ORDERS OF THE AU THORITIES BELOW. 25.2. IN THE COURSE OF PRESENT ASSESSMENT PROCEED INGS THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE PAID FRINGE BENEFIT TAX ON CAR AND TELEPHONE EXPENSES. HE FURTHER SUBMITTED THAT THE F RINGE BENEFIT TAX IS LEVIED ON SUCH BENEFITS ADMITTING THOSE AS BUSINESS EXPEND ITURE. THEREFORE THERE SHOULD BE NO ELEMENT OF PERSONAL EXPENDITURE WHICH COULD DISALLOWED U/S 38(2) OF THE ACT. HE FURTHER PLACED RELIANCE ON THE DECISION DATED 17.8.2010 OF THE ITAT CHANDIGARH A BENCH IN THE CASE OF A MAR ELECTRONICS PATIALA WHERE THE TRIBUNAL DELETED THE ADDITION BY HOLDING THAT THE ASSESSEE PAID FRINGE BENEFIT TAX ON SUCH EXPENSES W HICH IMPLIES THE BUSINESS NATURE THEREOF. IN VIEW OF THE ABOVE SUBMISSIONS HE SUBMITTED THAT THE DISALLOWANCE OF RS.15 000/- HAS ALREADY BE EN DELETED BY THE CIT(A) OUT OF THE TOTAL DISALLOWANCE OF RS.1 39 570/- AND EVEN THE REMAINING DISALLOWANCE OF RS.1 24 570/- SUSTAINED BY HIM DESE RVES TO BE DELETED. 25.2. WE HAVE CAREFULLY PERUSED THE IMPUGNED ASSES SMENT ORDER AS WELL AS THE IMPUGNED APPELLATE ORDER AND THE FINDIN GS RECORDED THEREIN AND THAT THE A.O. HAD MADE THE ADDITIONS PURELY ON THE BASIS OF PRESUMPTIONS AND ASSUMPTIONS. NO MATERIAL HAS BEEN BROUGHT ON RE CORD INDICATING THAT THE ASSESSEE HAD NOT PRODUCED OR MAINTAINED VERIFIABLE VOUCHERS IN RESPECT OF 22 SUCH EXPENSES. THEREFORE HAVING REGARD TO THE SEV ERAL DECISIONS OF THE HONBLE APEX COURT NO ADDITION MADE OR SUSTAINED O N THE BASIS OF MERE PRESUMPTIONS OR ASSUMPTIONS CAN SURVIVE. HENCE TH E DISALLOWANCE OF RS.1 24 480/- STAND DELETED. THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 26. GROUND NO.7 RELATES TO CHARGING OF INTEREST UND ER SECTION 234B 234C AND 234D OF THE ACT. THE LD. COUNSEL FOR THE ASSES SEE SUBMITTED THAT THIS GROUND IS CONSEQUENTIAL ONLY. THE A.O. IS DIRECTED TO ALLOW CONSEQUENTIAL RELIEF IF ANY AT THE TIME OF GIVING EFFECT TO THE ORDER. THIS GROUND OF APPEAL IS DISPOSED OF IN THESE TERMS. 27. GROUND NO.8 RELATES TO THE GROUNDS CONTESTED BY THE ASSESSEE FROM SL. NO.1 TO 7. SINCE WE HAVE DISPOSED OF ALL THE GROUN DS OF APPEAL RAISED BY THE ASSESSEE SUPRA NO SEPARATE ADJUDICATION IS REQUI RED FOR THIS GROUND. THEREFORE THE SAME IS DISMISSED. 28. GROUND NO.8 IS GENERAL IN NATURE AND REQUIRES N O ADJUDICATION. 29 IN THE RESULT THE APPEAL OF THE REVENUE IS DIS MISSED AND THAT OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH N OVEMBER 2011. SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 25 TH NOVEMBER 2011 /SKR/ COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE::M/S. VAISHNO MAA COMPUTERS PATIALA. 2. THE DEPARTMENT :ACIT CIRCLE PATIALA. 3. THE CIT(A) 4. THE CIT 5. THE DR INCOME-TAX DEPARTMENT CHANDIGARH. 23