DCIT, Circle 1, Nashik v. Shri Chandrashekhar Ashok Joshi, Nashik

ITA 974/PUN/2012 | 2009-2010
Pronouncement Date: 31-07-2015 | Result: Partly Allowed

Appeal Details

RSA Number 97424514 RSA 2012
Assessee PAN AAXPJ0797N
Bench Pune
Appeal Number ITA 974/PUN/2012
Duration Of Justice 3 year(s) 2 month(s) 15 day(s)
Appellant DCIT, Circle 1, Nashik
Respondent Shri Chandrashekhar Ashok Joshi, Nashik
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2015
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 31-07-2015
Date Of Final Hearing 22-04-2015
Next Hearing Date 22-04-2015
Assessment Year 2009-2010
Appeal Filed On 16-05-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH PUN E !'#$ BEFORE SHRI R.K. PANDA AM AND SHRI VIKAS AWASTHY JM / ITA NO. 974/PN/2012 #% & '& / ASSESSMENT YEAR : 2009-10 DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 1 NASHIK . / APPELLANT (% V/S. SHRI CHANDRASHEKHAR ASHOK JOSHI SEM INDUSTRIAL SYNDICATE MALEGAON STAND PANCHAVATI NASHIK PAN : AAXPJ0797N . / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK ADVOCATE REVENUE BY : SHRI B.C. MALAKAR JCIT ) DATE OF HEARING :29-07-2015 / DATE OF PRONOUNCEMENT :31-07-2015 *) ORDER PER VIKAS AWASTHY JM : THE APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS)-I NASHIK DATED 02-0 3-2012 FOR THE ASSESSMENT YEAR 2009-10. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE : THE ASSESSEE IS AN INDIVIDUAL AND IS ENGAGED IN TRADING OF INDUST RIAL GEARS AND 2 ITA NO. 974/PN/2012 A.Y. 2009-10 GEAR BOXES. THE ASSESSEE FILED HIS RETURN OF INCOME FOR T HE IMPUGNED ASSESSMENT YEAR ON 04-08-2009 DECLARING TOTAL INCOME OF RS.22 39 210/- AND AGRICULTURAL INCOME OF RS.1 98 350/-. THE CASE OF THE AS SESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) WAS ISSUED TO THE ASSESSEE ON 19-08-2010. IN SCRUTINY ASSESSMENT THE ASSESSING OFFICE R MADE ADDITIONS/DISALLOWANCES ON VARIOUS COUNTS AGGREGATING TO R S.26 72 750/- IN THE INCOME RETURNED BY THE ASSESSEE. AGGRIEVED BY THE ASSESSMENT ORDER DATED 22-12-2011 THE ASSESSEE FILED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEA LS). THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDER P ARTLY ACCEPTED THE APPEAL OF THE ASSESSEE. THE GIST OF THE ADDITIONS MAD E AND THE RELIEF GRANTED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IS AS UNDER: PARTICULARS ADDITION MADE BY ASSESSING OFFICER ADDITION DELETED BY COMMISSIONER OF INCOME TAX (APPEALS) DISALLOWANCE OF AUDIT FEES AND ADVERTISEMENT EXPENSES U/S. 40(A)(IA) RS.57 513/- RS.57 513/- DISALLOWANCE OF BUSINESS PROMOTION EXPENSES RS.6 22 352/- RS.5 91 236/- ADDITION ON ACCOUNT OF DIWALI GIFT RS.1 78 680/- RS.1 69 746/- ADDITION ON ACCOUNT OF DISALLOWANCE OF MEDICLAIM INSURANCE RS.2 629/- NIL ADDITION ON ACCOUNT OF SUNDRY EXPENSES RS.1 83 176/- RS.1 37 382/- ADDITION U/S. 68 ON ACCOUNT OF UNEXPLAINED CREDITS IN CAPITAL ACCOUNT RS.2 30 000/- RS.2 30 000/- LOAN FROM HUMAN DEVELOPMENT WELFARE SOCIETY ADDITION MADE U/S. 68 RS.10 00 000/- RS.10 00 000/- AMOUNT RECEIVED FROM SHRI SANTOSH MAHABAL AS GIFT/LOAN RS.3 98 400/- RS.3 98 400/- 3 ITA NO. 974/PN/2012 A.Y. 2009-10 THE REVENUE IN ITS APPEAL HAS IMPUGNED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING/RESTRICTING T HE ADDITIONS MADE BY THE ASSESSING OFFICER. 3. SHRI B.C. MALAKAR REPRESENTING THE DEPARTMENT SUBMITTE D THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DELETING T HE DISALLOWANCE MADE U/S. 40(A)(IA) IN RESPECT OF AUDIT FEES RS.30 0 00/- AND ADVERTISEMENT EXPENSES RS.27 513/- TOTAL AGGREGATING TO RS.57 513/-. THE ASSESSEE WHILE MAKING THE AFORESAID PAYMENTS DID NOT DEDU CT TAX AS REQUIRED UNDER CHAPTER XVII OF THE INCOME TAX ACT 1961. THE AS SESSEE HAS NOT FILED ANY EVIDENCE BEFORE THE ASSESSING OFFICER TO SHOW THAT THE ABOVE SAID PAYMENTS WERE NOT SUBJECT TO THE PROVISIONS OF TDS . THE ENTIRE ADVERTISEMENT EXPENSES WERE MADE TO SINGLE PARTY. THE ASSESSEE HAS NOT BROUGHT ANY EVIDENCE ON RECORD BEFORE THE ASSESSING OFFIC ER TO SHOW THAT THE PAYMENTS WERE MADE ON VARIOUS DATES. 3.1 IN RESPECT OF SALES PROMOTION EXPENSES THE LD. DR SU BMITTED THAT THE ASSESSEE HAD CLAIMED EXPENSES TO THE TUNE OF RS.8 13 929/ -. THE ASSESSING OFFICER DISALLOWED EXPENSES TO THE EXTENT OF RS.6 22 352/- AS THE ASSESSEE FAILED TO FURNISH EXPLANATION IN RESPECT OF GOLD ITEMS SILVER ITEMS CLOTHS A ND OTHER GIFT ARTICLES. THE ASSESSEE IS PRIMARILY DEALING WITH P UBLIC SECTOR UNDERTAKINGS AND GOVERNMENT INSTITUTIONS. FOR SUCH CUST OMERS THERE IS ABSOLUTELY NO REQUIREMENT TO INCUR SUCH EXPENSES. THE COMMISSIONER OF INCOME TAX (APPEALS) IN AN ARBITRARY MANNER RESTRICTED TH E SALES PROMOTION EXPENSES TO 5% OF DISALLOWANCE. 3.2 THE THIRD GROUND IN THE APPEAL OF THE REVENUE IS WITH REGARD TO RESTRICTING OF DISALLOWANCE ON ACCOUNT OF DIWALI GIFTS. THE ASSESSING OFFICER 4 ITA NO. 974/PN/2012 A.Y. 2009-10 IN SCRUTINY ASSESSMENT MADE ADDITION OF RS.1 78 680/- ON EX PENDITURE INCURRED ON DIWALI GIFTS. THE ASSESSEE HAD FAILED TO SUBSTA NTIATE THE EXPENSES INCURRED ON DIWALI GIFTS. THE COMMISSIONER OF INCO ME TAX (APPEALS) RESTRICTED THE DISALLOWANCE ON DIWALI GIFTS TO 5% OF DISALLOWANCE. THE COMMISSIONER OF INCOME TAX (APPEALS) RESTRICTED THE D ISALLOWANCE ON ESTIMATED BASIS WITHOUT ASSIGNING ANY VALID REASON. 3.3 THE FOURTH GROUND IN THE APPEAL OF THE REVENUE IS WITH REGARD TO SUNDRY EXPENSES. THE LD. DR CONTENDED THAT THE ASSESS ING OFFICER HAD MADE ADDITION OF RS.1 83 176/- ON ACCOUNT OF SUNDRY EXPENS ES AS THE ASSESSEE WAS NOT ABLE TO SUBSTANTIATE THE EXPENDITURE WITH COGENT EVIDENCE. THE EXPENSES CLAIMED WERE MERELY SUPPORTED WITH SELF MAD E VOUCHERS. THEREFORE THE EXPENSES INCURRED WERE NOT FULLY VERIFIABLE. THE COMMISSIONER OF INCOME TAX (APPEALS) RESTRICTED DISALLOWANCE OF SUNDRY EXPENSES TO THE EXTENT OF 5% OF THE EXPENSES ON THE A SSERTIONS OF THE ASSESSEE THAT THE BOOKS OF ACCOUNT ARE MAINTAINED AND THE SAME ARE DULLY AUDITED. NO DOCUMENTARY EVIDENCE WAS FURNISHED BY THE ASSESSEE APART FROM SELF MADE VOUCHERS. 3.4 THE FIFTH GROUND IN THE APPEAL OF REVENUE IS WITH REGARD TO ADDITION OF RS.2 30 000/- MADE U/S. 68 ON ACCOUNT OF UNEXPLAINED CASH CREDIT DELETED BY THE COMMISSIONER OF INCOME TAX (APPEALS). THE LD. DR SUB MITTED THAT THE ASSESSEE HAS CLAIMED RS.2 30 000/- AS GIFT FROM HIS BROT HER SHRI J.A. JOSHI PROPRIETOR SAI ENGINEER. ON VERIFICATION OF THE CAPITA L ACCOUNT OF SHRI J.A. JOSHI THE TRANSACTION WAS NOT FOUND. IN THE ABS ENCE OF ANY COGENT EVIDENCE THE ADDITION WAS MADE IN THE HANDS OF THE ASSESSEE. 3.5 THE SIXTH GROUND RAISED BY THE REVENUE IN APPEAL IS WITH REGARD TO UNEXPLAINED CASH CREDIT OF RS.10 LACS U/S. 68 ON THE AMOU NT LOAN ALLEGEDLY 5 ITA NO. 974/PN/2012 A.Y. 2009-10 RECEIVED FROM HUMAN DEVELOPMENT WELFARE SOCIETY. THE SAID SOCIETY IS NEITHER REGISTERED U/S. 12AA OF THE ACT NOR THE GENUINEN ESS OF THE SAID SOCIETY WAS ESTABLISHED BEFORE THE ASSESSING OFFICER BY THE ASSESSEE. NO EVIDENCE WAS PLACED ON RECORD TO SHOW THAT THE SOCIETY IS ASSESSED TO TAX. THE COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE ADDITIO N ON THE GROUND THAT THE PAYMENTS WERE MADE THROUGH BANKING C HANNEL. THE ASSESSEE HAS FAILED TO ESTABLISH GENUINENESS OF THE TRANSA CTION. BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) THE ASSESSEE HAS FILED ADDITIONAL EVIDENCE IN SUPPORT OF HIS CLAIM. THE COMMISSIONER OF INCOM E TAX (APPEALS) ACCEPTED THE SAME WITHOUT AFFORDING ANY OPPORTUN ITY TO THE ASSESSING OFFICER TO EXAMINE THE ADDITIONAL EVIDENCE. THE CO MMISSIONER OF INCOME TAX (APPEALS) NEITHER SOUGHT REMAND REPORT NOR COMMENTS OF THE ASSESSING OFFICER ON THE FRESH EVIDENCE FILED BY THE ASSESSEE. 3.6 IN SUPPORT OF SEVENTH GROUND RAISED IN APPEAL WITH RE GARD TO UNEXPLAINED GIFT/LOAN OF RS.3 98 400/- FROM SHRI SANTOSH MAHA BAL THE LD. DR SUBMITTED THAT NO EVIDENCE WAS FURNISHED BY THE ASSE SSEE TO PROVE THE IDENTITY OF THE PERSON WHO HAS ADVANCED LOAN OR TO PROV E THE GENUINENESS OF THE TRANSACTION. THE ASSESSEE ONLY FURNISHED ONE REC EIPT WHICH COULD NOT BE VERIFIED. IN PROCEEDINGS BEFORE THE FIRST APPELLATE AUTH ORITY THE CONFIRMATION WAS ALLEGEDLY RECEIVED FROM THE CREDITOR ON E- MAIL. WITHOUT AFFORDING ANY OPPORTUNITY TO THE ASSESSING OFFICER TO VERIFY THE GENUINENESS OF THE SAME THE COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE AD DITION. 4. CONTROVERTING THE SUBMISSIONS MADE BY THE LD. DR SHRI NIKHIL PATHAK ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE SUB MITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS RIGHTLY DELETED T HE ADDITIONS AFTER CONSIDERING THE FACTS ON RECORD AND APPRECIATING TH E SUBMISSIONS OF 6 ITA NO. 974/PN/2012 A.Y. 2009-10 THE ASSESSEE. THE COMMISSIONER OF INCOME TAX (APPEALS) HA S DELETED THE DISALLOWANCE MADE U/S. 40(A)(IA) ON AUDIT FEES AND ADVERTISEMEN T EXPENSES AS PAYMENTS WERE BELOW RS.20 000/-. THE ASSESSING OFFICER DISALLOWED THE PROVISION OF AUDIT FEE FOR NON-DEDUCTION OF TDS U/S. 194J IG NORING THE FACT THAT THE AUDITORS WERE YET TO BE APPOINTED. THE ASSE SSEE HAD CREATED PROVISION AND ACTUAL PAYMENT WAS NOT MADE. SO FAR AS AD VERTISEMENT EXPENSES ARE CONCERNED THE SAME WERE FOR SMALL ADVERTIS EMENT FOR EMPLOYMENT OF STAFF ETC. IN VARIOUS NEWSPAPERS. THE PAYME NTS FOR ADVERTISEMENT EXPENSES WERE IN SMALL AMOUNTS MUCH LESS T HAN THE LIMIT OF RS.20 000/-. THUS THERE WAS NO OBLIGATION ON THE PART O F THE ASSESSEE TO DEDUCT TDS EITHER U/S. 194J OR U/S. 194C ON THE AFORESAID PAYMENTS . 4.1 IN RESPECT OF DISALLOWANCE ON SALES PROMOTION EXPENSES DIWALI GIFTS AND SUNDRY EXPENSES THE LD. AR SUBMITTED THAT AD-HOC DISALLOWANCE HAS BEEN MADE BY THE COMMISSIONER OF INCOME TAX (APPEALS). T HE CONTENTION OF THE REVENUE THAT THE ASSESSEE IS ONLY DEALING WITH GOVE RNMENT AND PUBLIC SECTOR UNDERTAKINGS IS NOT CORRECT. THE ASSESSEE IS DE ALING WITH PRIVATE AS WELL AS PUBLIC SECTOR. THEREFORE THE ASSESSEE HAD TO INCU R SALES PROMOTION EXPENSES FOR PENETRATING THE MARKET. IN RESPECT OF DIW ALI GIFTS THE LD. AR SUBMITTED THAT SMALL GIFTS WERE GIVEN TO EMPLOYEES AND BU SINESS ASSOCIATES ON THE OCCASION OF DIWALI. THE ASSESSEE CANNOT ASK ITS E MPLOYEES OR THE BUSINESS ASSOCIATES TO ISSUE RECEIPTS FOR ACCEPTING THE G IFTS. AS REGARDS AD- HOC DISALLOWANCE ON SUNDRY EXPENSES IS CONCERNED THE AS SESSEE IS MAINTAINING BOOKS OF ACCOUNT WHICH HAVE BEEN DULY AUDITED . THE EXPENDITURE INCURRED BY THE ASSESSEE IS IN THE COURSE O F BUSINESS. THE LD. AR SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS ) HAS MADE REASONABLE DISALLOWANCE IN RESPECT OF AFORESAID THREE ADDITIONS. 7 ITA NO. 974/PN/2012 A.Y. 2009-10 4.2 WITH REGARD TO ADDITION OF RS.2 30 000/- MADE U/S. 68 ON ACCOUNT OF UNEXPLAINED CASH CREDIT THE LD. AR SUBMITTED THAT THE ASS ESSEE HAS RECEIVED THE AMOUNT FROM HIS BROTHER SHRI J.A. JOSHI PROP RIETOR SAI ENGINEERS THROUGH CHEQUE. THE CHEQUE WAS RECEIVED AND DEPOSITED BY THE ASSESSEE ON 31-03-2009 AND THE SAME WAS CLEARED IN AP RIL 2009. THE ASSESSEE RECORDED THE RECEIPT OF PAYMENT IN HIS ACCOUNT IN THE ASSESSMENT YEAR 2009-10 WHEREAS SHRI J.A. JOSHI HAS SHOWN THE AMOU NT IN HIS ACCOUNT ON REALIZATION OF CHEQUE I.E. IN NEXT ASSESSMENT YEAR 2010-11. THE LD. AR REFERRED TO THE BANK STATEMENT OF M/S. SAI ENGINER AT PAGE 35 OF THE PAPER BOOK. IN THE SAID BANK STATEMENT AN AMOUNT OF R S.2 30 000/- HAS BEEN DEBITED ON 28-04-2009 IN THE NAME OF SHRI CHANDRAS HEKHAR ASHOK JOSHI THE ASSESSEE. THE LD. AR ALSO REFERRED TO THE GIFT DEED AT PAGES 36 AND 37 OF THE PAPER BOOK TO SHOW THAT AN AMOUNT OF RS .2 30 000/- HAS BEEN GIFTED BY SHRI J.A. JOSHI TO HIS BROTHER SHRI CHANDRAS HEKHAR ASHOK JOSHI THE PRESENT ASSESSEE. 4.3 IN RESPECT OF ADDITION OF RS.10 LACS U/S. 68 THE LD. A R SUBMITTED THAT THE PAYMENT HAS BEEN RECEIVED THROUGH PROPER BANKING CHANNEL AND THE SAME PAYMENT HAS BEEN DULY REFLECTED IN THE AUDITED BOO KS OF ACCOUNT OF HUMAN DEVELOPMENT WELFARE SOCIETY. THEREFORE THE CONTENT ION OF THE LD. AR THAT THE TRANSACTION HAS NOT BEEN EXPLAINED IS UNFOUN DED. DURING THE COURSE OF PROCEEDINGS BEFORE THE COMMISSIONER OF INCOME T AX (APPEALS) THE ASSESSEE HAD FURNISHED DOCUMENTS TO SHOW THE GENUINENE SS OF THE SOCIETY. THE SOCIETY IS A PUBLIC CHARITABLE TRUST REGISTERED UNDER THE BOMBAY PUBLIC TRUST ACT. THE SOCIETY HAS TO MAINTAIN AND AUDIT BOOKS OF ACCOUNT AND HAS TO FILE THE SAME EVERY YEAR IN THE OFFICE OF CHARITY COMMISSIONER. 4.4 ON THE ISSUE OF UNEXPLAINED GIFT/LOAN OF RS.3 98 400/- FROM SHRI SANTOSH MAHABAL THE LD. AR SUBMITTED THAT THE AMOUNT ($ 8 000) WAS GIVEN 8 ITA NO. 974/PN/2012 A.Y. 2009-10 BY SHRI SANTOSH MAHABAL BROTHER-IN-LAW OF ASSESSEE IN US DOLLARS WHICH WAS CONVERTED THROUGH PROPER BANKING CHANNEL IN EQUIVALE NT INDIAN RUPEE. THE CONFIRMATION OF THE SAID AMOUNT COULD NOT BE OBTAINED FROM SHRI SANTOSH MAHABAL DURING THE ASSESSMENT PROCEEDINGS AS H E IS A NRI AND IS STAYING IN USA. HOWEVER DURING THE PROCEEDINGS BEFORE TH E COMMISSIONER OF INCOME TAX (APPEALS) SHRI SANTOSH MAHABAL FURNISHED CONFIR MATION THROUGH E-MAIL IN RESPECT OF THE AFORESAID AMOUNT. THE LD. AR PRAYED FOR DISMISSING THE APPEAL OF THE REVENUE AND CONFIRMING THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS). 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES. WE HAVE ALSO EXAMINED THE ORDERS OF THE AUTHORITIE S BELOW AND THE MATERIAL PLACED BEFORE US IN THE FORM OF PAPER BOOK. IN A PPEAL THE REVENUE HAS ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APP EALS) IN DELETING THE ADDITIONS/DISALLOWANCES MADE BY THE ASSESSING OFFICER. THE ISSUE WISE FINDINGS ON THE GROUNDS RAISED BY THE REVENUE ARE AS UNDE R: 5.1 THE FIRST GROUND RAISED BY THE REVENUE IS WITH REGAR D TO DISALLOWANCE OF RS.57 513/- U/S. 40(A)(IA) WHICH INCLUDES AUDIT FEE RS.30 000/- AND ADVERTISEMENT EXPENSES RS.27 513/-. THE ASSESSEE HAS C REATED PROVISION OF AUDIT FEE RS.30 000/-. IT HAS COME ON RECORD THAT UPT O 31-03-2009 THE AUDITORS WERE NOT APPOINTED. SINCE NO PAYMENT WAS MADE TO THE AUDITORS BY THAT TIME THERE IS NO QUESTION OF DEDUCTING TAX ON T HE SAID AMOUNT. IN RESPECT OF ADVERTISEMENT EXPENSES IT IS SEEN THAT THE P AYMENTS MADE WERE BELOW RS.20 000/-. ON SUCH PAYMENTS THE ASSESSEE WAS N OT REQUIRED TO DEDUCT TAX AT SOURCE U/S. 194C OF THE ACT. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER U/S. 40(A)(IA) OF ACT. 9 ITA NO. 974/PN/2012 A.Y. 2009-10 5.2 THE SECOND THIRD AND FOURTH GROUND RAISED BY THE RE VENUE IN APPEAL IS WITH REGARD TO DELETING OF DISALLOWANCE OF RS.5 91 236/- ON ACCOUNT OF SALE PROMOTION EXPENSES ADDITION OF RS.1 69 746/- ON ACCOUN T OF DIWALI GIFTS AND ADDITION OF RS.1 37 382/- ON ACCOUNT OF SUNDRY EXP ENSES. WE OBSERVE THAT THE COMMISSIONER OF INCOME TAX (APPEALS) IN H IS ORDER HAS GIVEN A CATEGORIC FINDINGS THAT THE EXPENDITURE WAS INCURR ED BY THE ASSESSEE WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. THE S ALE PROMOTION EXPENSES WERE ONLY 0.90% OF THE TOTAL TURNOVER. THERE FORE THE SAME CANNOT BE HELD TO BE EXCESSIVE. IT IS A WELL SETTLED LAW THAT THE ASSESSING OFFICER CANNOT STEP INTO THE SHOES OF ASSESSEE TO DETERMINE WHET HER THE EXPENDITURE IS NECESSARY FOR CONDUCTING BUSINESS OR NOT. AS FAR AS DIWALI GIFTS ARE CONCERNED THE GIFTS WERE GIVEN TO THE EMPLOYEES AND BUSINESS ASSOCIATES. IT IS NOT EXPECTED TH AT THE PERSON RECEIVING GIFTS WOULD EITHER ISSUE RECEIPT OR SIGN VOUCHER IN LIEU OF ACCEPTING THE GIFTS. HOWEVER THE COMMISSIONER OF INCOME TAX (APPEALS) HAS REST RICTED THE DISALLOWANCE ON ABOVE BOTH THE COUNTS TO 5% OF THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. IN SO FAR AS SUNDRY EXPENSES THE ASSESSING OFFICER HAD M ADE AD-HOC DISALLOWANCE OF 20% ON THE GROUND THAT SOME OF THE EXPEN SES ARE SUPPORTED BY SELF MADE VOUCHERS THEREFORE GENUINENESS OF THE SAME IS NOT VERIFIABLE. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS RESTRICTED TH E SAME TO 5% OF THE SUNDRY EXPENSES CLAIMED BY THE ASSESSEE. WE DO NO T FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE COMMISSIONER OF INCOME TA X (APPEALS) ESPECIALLY IN VIEW OF THE FACT THAT THE BOOKS OF ACCOUNT H AVE BEEN DULY AUDITED AND THE SAME HAVE BEEN ACCEPTED IN THE ASSESS MENT PROCEEDINGS. ACCORDINGLY THE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN 10 ITA NO. 974/PN/2012 A.Y. 2009-10 RESTRICTING THE ADDITIONS/DISALLOWANCES IN RESPECT OF THE AB OVE THREE EXPENSES ARE CONFIRMED. 5.3 THE NEXT ISSUE IN APPEAL IS WITH REGARD TO ADDITION OF RS.2 30 000/- MADE U/S. 68 ON ACCOUNT OF UNEXPLAINED CASH CREDIT. THE CONTENTION OF THE LD. AR IS THAT THE AMOUNT OF RS.2 30 000/- IS RECEIVED FROM H IS BROTHER SHRI J.A. JOSHI THROUGH CHEQUE AS GIFT ON 31-03-2009. THE CHE QUE WAS DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE ON THE S AME DATE. HOWEVER IT WAS DEBITED IN THE BANK ACCOUNT OF THE BROTHER OF TH E ASSESSEE ON 28-04-2009. SINCE THE ASSESSEE RECEIVED THE CHEQUE A ND DEPOSITED THE SAME DURING THE FINANCIAL YEAR 2008-09 THE ASSESSEE HAD SHOWN THE AMOUNT OF RS.2 30 000/- IN ITS BOOKS OF ACCOUNT FOR THE PER IOD RELEVANT TO ASSESSMENT YEAR 2009-10. ON THE OTHER HAND SINCE THE AMOUNT WAS DEBITED IN THE BANK ACCOUNT OF THE BROTHER OF THE ASSES SEE IN THE NEXT FINANCIAL YEAR SHRI J.A. JOSHI ACCOUNTED THE SAME IN THE ASS ESSMENT YEAR 2010-11. IT IS EVIDENT FROM THE RECORDS THAT THE ASSES SEE HAS RECEIVED THE AMOUNT OF RS.2 30 000/- FROM HIS BROTHER SHRI J.A. JOSHI PRO PRIETOR M/S. SAI ENGINEERS. THE AMOUNT COULD NOT BE RECONCILED AS BOT H THE ASSESSEE AND HIS BROTHER HAVE ACCOUNTED THE SAME IN DIFFERENT FINAN CIAL YEARS. WE DO NOT FIND ANY INFIRMITY IN THE FINDINGS OF THE COMMISSIONER OF IN COME TAX (APPEALS) IN DELETING THE ADDITION. WE CONFIRM THE SAME. 5.4 THE NEXT GROUND RAISED BY THE REVENUE IS WITH REGA RD TO UNEXPLAINED CASH CREDIT OF RS.10 LACS U/S. 68 ON THE LOAN RECEIVED FRO M HUMAN DEVELOPMENT WELFARE SOCIETY. THE ASSESSING OFFICER MADE TH E ADDITION ON THE GROUND THAT THE ASSESSEE WAS NOT ABLE TO ESTABLISH THE GENUINENESS OF THE SOCIETY AS IT IS NEITHER REGISTERED U/S. 12AA OF THE A CT NOR THE SOCIETY IS ASSESSED TO INCOME TAX. BEFORE THE COMMISSIONER OF INCO ME TAX (APPEALS) 11 ITA NO. 974/PN/2012 A.Y. 2009-10 THE ASSESSEE FILED AUDITED BALANCE SHEET OF THE SOCIETY FOR THE ASSESSMENT YEAR 2009-10 TO SHOW THAT THE AMOUNT OF RS.10 LACS WA S INDEED RECEIVED BY THE ASSESSEE FROM HUMAN DEVELOPMENT WELFARE SOCIETY. WE FIND THAT THE COMMISSIONER OF INCOME TAX (APPEALS) WITHOUT SEEKING ANY COMMENTS OF THE ASSESSING OFFICER ACCEPTED THE ADDITIONAL EVIDENCE FURNISHED BY THE A SSESSEE AND DELETED THE ADDITION. WE ARE OF THE CONSIDERED OPINION THAT A FAIR CHANCE SHOULD HAVE BEEN GIVEN TO THE ASSESSING OFFICER TO VERIFY THE GENUINENESS OF ADDITIONAL EVIDENCE BROUGHT BEFORE THE COM MISSIONER OF INCOME TAX (APPEALS) BY ASSESSEE. ACCORDINGLY WE REMIT THIS ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THE ADDITIONAL EVID ENCE FURNISHED BY ASSESSEE AND VERIFY THE GENUINENESS OF THE TRANSAC TION FROM THE AUDITED ACCOUNTS OF THE HUMAN DEVELOPMENT WELFARE SOCIETY. THIS G ROUND OF APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 5.5 THE LAST GROUND RAISED BY THE REVENUE IS WITH REGAR D TO ADDITION OF RS.3 98 400/- AS UNEXPLAINED GIFT/LOAN. THE ASSESSEE RECEIVE D A GIFT OF $8000 US FROM HIS BROTHER IN LAW SHRI SANTOSH MAHABAL FRO M USA. IT IS AN UNDISPUTED FACT THAT THE AMOUNT HAS BEEN RECEIVED THRO UGH PROPER BANKING CHANNEL. AFTER CONVERSION OF $ 8000 IN EQUIVALENT INDIAN RU PEE (@ RS.49.80 PER DOLLAR) THE AMOUNT WAS CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE. SINCE THE BROTHER IN LAW IS NRI AND RESIDENT OF USA THE ASSESSEE COULD NOT FILE CONFIRMATION BEFORE THE ASSESSING OFFICER. DURING THE FIRST APPELLATE PROCEEDINGS THE ASSESSEE FILE CONFIRMATION RECEIVED THROUG H E-MAIL ALONG WITH THE COPY OF PASSPORT OF SHRI SANTOSH MAHABAL. THE LD . DR HAS OBJECTED THAT THE PROVISIONS OF RULE 46A WERE NOT FOLLOWED BEFORE ACC EPTING ADDITIONAL EVIDENCE BY THE COMMISSIONER OF INCOME TAX (APPEALS). WE A RE OF THE VIEW THAT THE COMMISSIONER OF INCOME TAX (APPEALS) SHOULD HAVE SOUGHT REMAND REPORT OR COMMENTS OF THE ASSESSING OFFICER BEFORE ACCEP TING THE ADDITIONAL 12 ITA NO. 974/PN/2012 A.Y. 2009-10 EVIDENCE. IN THE INTEREST OF JUSTICE WE REMIT THIS ISSUE B ACK TO THE FILE OF ASSESSING OFFICER TO VERIFY THE GENUINENESS OF THE CONFIRMAT ION RECEIVED FROM SHRI SANTOSH MAHABAL. ACCORDINGLY THIS GROUND OF APPEAL O F THE REVENUE IS REMITTED BACK TO THE FILE OF ASSESSING OFFICER. 6. IN VIEW OF OUR ABOVE FINDINGS ON EACH ISSUE THE APPEAL O F THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON FRIDAY THE 31 ST DAY OF JULY 2015 AT PUNE. SD/- SD/- ( . . / R.K. 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