KUL BHARAT, J.M. This is an appeal filed by the revenue against the order dated 22/01/2016 passed by the ld CIT(A), Kota for the A.Y. 2011-12. The grounds taken by the revenue in appeal are as under:- On the facts and in the circumstances of the case, the ld. CIT(A) has erred in:- ITA 278/JP/2016_ ITO Vs Ramesh Chand Chaturvedi 2

1 Deleting trading addition of Rs. 14,20,740/- out of total addition of Rs. 19,20,740/-.

2. Deleting addition of Rs. 18,25,108/- made U/s 40(a)(ia) of the Act by disallowing payments made to M/s Craftsman Advertisement, Delhi and M/s Ram Niwas Advertisers;

3. Deleting addition of Rs. 19,55,798/- out of total addition of Rs. 25,68,326/- made by disallowing various expenses claimed as bus expenses, food and refreshment expenses, tour manager and staff salary expenses, postage & courier expenses, printing and stationary expenses and Misc. expenses.

2. The brief facts of the case are that the case of the assessee was picked up for scrutiny assessment U/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as the Act) and the assessment was framed vide order dated 26/3/2014. While framing the assessment, the Assessing Officer increased gross receipt at 5% on the basis that the assessee was failed to produce books of account. Further the Assessing Officer made addition by invoking the provisions of Section 40(a)(ia) of the Act of Rs. 27,27,357/- on the expenditure incurred on advertisement. Further, the Assessing Officer made addition of Rs. 8,58,906/- by disallowing the bus fair. He also disallowed food and refreshment of Rs. 8,99,635/-. The Assessing Officer also disallowed expenditure incurred on tour manager and staffs salary at Rs. ITA 278/JP/2016_ ITO Vs Ramesh Chand Chaturvedi 3 2,87,000/-. The Assessing Officer also disallowed various expenses just like postage and courier expenses, printing and stationary expenses, telephone expenses, vehicle maintenance expenses etc. and computed total income of Rs. 76,99,970/-.

3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld. CIT(A), who after considering the submissions and perusal of the material available on the record, partly allowed the appeal. While allowing the appeal partly, the ld. CIT(A) reduced the addition made on account of increase in trading receipts to the extent of Rs. 5.00 lacs and deleted the balance addition of Rs. 14,20,740/-., reduced addition in respect of advertisement expenditure to the extent of Rs. 5,58,962/- and deleted the balance addition of Rs. 21,82,015/-. The ld CIT(A) further reduced disallowance made on account of bus rental expenses to the extent of Rs. 1.50 lacs and balance amount of Rs. 7,08,906/- was deleted. The ld. CIT(A) further reduced disallowance made on account of food and refreshment expenses to the extent of Rs. 1.50 lacs and balance addition of Rs. 7,49,635/- was deleted. He also reduced the addition in respect of tour manager and salary of the staff to the extent of Rs. 1.00 lacs and balance addition of Rs. 1,87,000/- was deleted. Ld. CIT(A) also reduced ITA 278/JP/2016_ ITO Vs Ramesh Chand Chaturvedi 4 the addition in respect of postage and courier expenses to the extent of Rs. 47,528/- and balance addition of Rs. 47,527/- was deleted. He also reduced the addition in respect of printing and stationary to the extent of Rs. 65,000/-and balance addition of Rs. 1,00,017/- was deleted. He also reduced the addition in respect of miscellaneous expenses to the extent of Rs. 1.00 lacs and balance addition of Rs. 1,62,713/- was deleted. The ld. CIT(A) was dismissed the grounds regarding telephone expenses, car and mobile expenses and maintenance of vehicles expenses.

4. Now the revenue is in appeal before us. The ld. Sr. DR has submitted that at the time of hearing, no one appeared on behalf of the assessee despite the fact that the date of hearing was duly noted by the ld. counsel of the assessee. Notice for hearing was duly served, therefore, appeal was taken up for hearing in absence of assessee.

5. Ground No. 1 of appeal is against deletion of trading addition of Rs. 14,20,740/- out of total addition of Rs. 19,20,740/-. The ld. Sr. DR has vehemently supported the order of the Assessing Officer and submitted that the ld. CIT(A) was not justified in deleting the addition. ITA 278/JP/2016_ ITO Vs Ramesh Chand Chaturvedi 5 He further submitted that the A.O. has rightly estimated the trading receipts in absence of the books of account.

6. We have heard the departmental representative and perused the material available on the record. We find that the ld. CIT(A) has reduced the addition by observing as under:-

As regard Ground no. 2, while passing the assessment order the assessing officer has mentioned in the introductory portion at page 2 of the assessment order that son of the assessee Sh. Virendra Chaturvedi and tax adviser Sh. C.M. Gupta and accountant Sh. Rishikesh appeared and produced replies in writing along with ledgers/bills/vouchers related to business which were examined on sample basis. However while deciding on the profits of the business, the AO has mentioned that because the assessee has not produced the entire books of account and documents, it is not possible to verify the actual receipts of the assessee. On this basis he has enhanced the gross receipt of the assessee by five percent and made an addition of Rs. 19,20,740/-. The stand taken by the AO is contradictory in itself. He has doubted the veracity of the books of accounts of the assessee and then made the addition to the gross ITA 278/JP/2016_ ITO Vs Ramesh Chand Chaturvedi 6 receipts without rejecting the books of accounts and making a best judgment assessment as provided in the act (if the books were found to be properly maintained or there were discrepancies in the same). By making an addition to the receipts on an estimated basis, the AO has in fact accepted the book results partly. At the same time he has not given any basis for reaching the estimated figure of five percent while making addition to the gross receipt. The order of the AO is therefore cryptic and non speaking. If the AO wanted to make and addition on an estimated basis, he should have first rejected the book results by resorting to the provisions of section 145(3) and subsequently after citing proper basis like comparison with other cases in the same line of business, or results from the earlier years in the case of same assessee or following any other such reasonable logic reached the conclusion on the probable results there by framing a best judgment assessment u/s 144/143(3). By making an ad hoc and estimated addition to the gross receipts only on the basis of additional expenses claimed for ticketing etc. the AO has not fulfilled the principles of a judicious and reasoned order. Thus I am not inclined to agree with the basis on which the addition has been made and gross profit has been enhanced. ITA 278/JP/2016_ ITO Vs Ramesh Chand Chaturvedi 7 On perusal of the documents related to the additional ticketing expenses and explanation submitted by the appellant that these pertained to the staff members and other accompanying personnel on the tours to facilitate the smooth functioning for the travelers, I am inclined to accept the explanation, being logical and justifiable. However, it is also quite possible that since these expenses include within themselves substantial items of general nature, it is quite probable that some part of these expenses would not fall in the purview of allowable expenses as per the provisions of section 37 of the IT Act and the A.O could have examined these. On perusal of the Assessment order, it is seen that some of the expenses relatable to the accompanying personnel has already been disallowed by the AO under the head miscellaneous expenses. Thus the AO himself at another place in assessment order has accepted the fact that there were accompanying personnel on the tours with the tourists/yatris. Thus looking at the facts involved in the case it would be a reasonable proposition to limit the disallowance to the extent of Rs. 5, 00,000/- for such non business related expenses debited in the heads of travel for the accompanying personnel rather than making a general addition on an estimated basis. ITA 278/JP/2016_ ITO Vs Ramesh Chand Chaturvedi 8 The balance addition of Rs. 14,20,740/- is hereby directed to be deleted.

The basis for reducing the addition is that the finding of the A.O. is contradictory. We find that the A.O. had given a finding that due to non-production of the books of account for verification, the correct income of the assessee cannot be computed. We also find that the A.O. at one place has observed that the son of the assessee Shri Virendra Chaturvedi, tax adviser Shri C.M. Gupta and Accountant Shri Rishikesh appeared before the A.O. and furnished books of account/bills/vouchers, which can be examined on test check basis. Therefore, it can be inferred that books of account was placed before the A.O. Hence, finding of the A.O. is contradictory, therefore, we uphold the order of the ld. CIT(A) on this ground. Accordingly, this ground of revenue is dismissed.

7. Ground No. 2 is against deleting the addition of Rs. 18,25,108/- made by invoking the provisions of Section 40(a)(ia) of the Act. The ld Sr. DR has supported the order of the A.O. and submitted that the ld. CIT(A) was not justified in deleting the addition. He also submitted that the A.O. has categorically observed that the payment has been made in excess of Rs. 30,000/- and the assessee has not deducted tax. ITA 278/JP/2016_ ITO Vs Ramesh Chand Chaturvedi 9 However, on appeal, the ld. CIT(A) has observed that, in so far as M/s Kohinoor Publicity, M/s Hare Rama Advertisers, M/s Rajasthan Patrika, M/s Garima Advertising, M/s Bhagwati Publicity, M/s Yash Advertising and individual payments not exceeding the permissible limits for the purposes of TDS U/s 194C of the Act. The ld. CIT(A) further observed that as regards the payment to M/s Craftman Advertisement and M/s Ram NIwas Advertisers, the appellant has stated that both the parties have accounted for the receipts towards advertisement from the appellant in their books of account and have considered the same for computation of total income declared in ITR filed. The contention of the ld. Sr. DR is that these documents were not available before the A.O.

8. We have heard the ld. Sr. DR and have perused the material available on the record. We have given our thoughtful consideration to the contention of the ld. Sr. DR. no dispute with regard to the fact that the ld. CIT(A) has concurrent jurisdiction with the A.O. The ld. CIT(A) has given a finding of fact, which is not rebutted by the revenue by placing any material on record, therefore, we do not see any reason to interfere in the order of the ld. CIT(A). Accordingly, this ground of the revenue is dismissed. ITA 278/JP/2016_ ITO Vs Ramesh Chand Chaturvedi 10

9. Ground No. 3 of the appeal is against deleting the addition of Rs. 19,55,798/- out of total addition of Rs. 25,68,326/- made by disallowing various expenses i.e. bus expenses, food and refreshment expenses, tour manager and staff salary expenses, postage and courier expenses, printing and stationary expenses and misc. expenses. The ld Sr. DR has supported the order of the A.O. and submitted that the ld. CIT(A) was not justified in deleting or reducing the addition. The ld. CIT(A) has reduced the addition regarding bus fair, food and refreshment expenses, tour manager and staffs salary, printing and stationary and other misc. expenses made by the A.O. by observing that the appellant is into tourism business and bus hiring, ticketing, lodging, excursion, food etc. expenses are necessary and have to be made in large volumes. It may not be possible to keep perfect supportive documentary records of vouchers etc. to justify the entire expenses. He also reduced the disallowance made by the A.O. regarding postage and courier expenses, printing and stationary expenses and other misc. expenses by observing that certain amount of non business related expenses cannot be ruled out in postage and courier expenses.

10. We have heard the ld. Sr. DR hand have perused the material available on the record. The ld. CIT(A) has given a finding of fact, ITA 278/JP/2016_ ITO Vs Ramesh Chand Chaturvedi 11 which is not rebutted by the revenue by placing any material on record, therefore, we do not see any reason to interfere in the order of the ld. CIT(A). Accordingly, this ground of the revenue is dismissed.

11. In the result, the appeal of the revenue is dismissed. Order pronounced in the open court on 09/12/2016. Sd/- Sd/- Hkkxpan dqy Hkkjr (BHAGCHAND) (Kul Bharat) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 09 th December, 2016 *Ranjan vknsk dh izfrfyfi vxzsfkr@Copy of the order forwarded to:

1. vihykFkhZ@The Appellant- The ITO, Karauli.

2. izR;FkhZ@ The Respondent- Shri Ramesh Chand Chaturvedi, Karauli.

3. vk;dj vk;qDr@ CIT

4. vk;dj vk;qDrvihy@The CIT(A)

5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur

6. xkMZ QkbZy@ Guard File (ITA No. 278/JP/2016) vknskkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar