M/s. Rajsriya Automotive Industries (P) Ltd., CHENNAI V. DCIT, CHENNAI

CO 10/CHNY/2011

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7955 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 9 month(s) 20 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 31-10-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 10-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N DEVANATHAN
• Assessee Lawyers: GURU BASHYAM IRS
• Keywords: Retrospective amendment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI S.S.GODARA, JUDICIAL MEMBER ITA NOS. 2051 & 2052(MDS)/2010 ASSESSMENT YEARS : 2002-03 & 2006-07 AND C.O. NOS. 9 & 10/MDS/2011 (IN ITA NOS.2051 & 2052/MDS/2010) THE DEPUTY COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE-V(3), CHENNAI 34. VS. M/S. RAJSRIYA AUTOMOTIVE INDUSTRIES (P) LTD., PLOT NO.706, 29,137-B, POONAMALLEE AVADI ROAD, PARITHIPATTU, CHENNAI 71. PAN AABCR4226K (APPELLANT) (RESPONDENT/CROSS OBJECTOR) APPELLANT BY : SHRI GU RU BASHYAM, IRS, JCIT RESPONDENT BY : SHRI N. DEV ANATHAN, ADVOCATE DATE OF HEARING : 31 ST OCTOBER, 2012 DATE OF PRONOUNCEMENT : 31 ST OCTOBER, 2012 O R D E R PER DR.O.K.NARAYANAN, VICE PRESIDENT THESE TWO APPEALS ARE FILED BY THE REVENUE AND TH E CROSS OBJECTIONS ARE FILED BY THE ASSESSEE. THE RE LEVANT ASSESSMENT YEARS ARE 2002-03 AND 2006-07. THESE AP PEALS - - ITA 2051,2052/10 & CO 9 &10/11 2 AND CROSS OBJECTIONS ARE DIRECTED AGAINST THE ORDER S OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-V AT CHENNAI DA TED 9.9.2010 AND 13.9.2010. THESE APPEALS AND CROSS OB JECTIONS ARISE OUT OF THE ASSESSMENT COMPLETED UNDER SEC.143 (3) READ WITH SEC.147 AND 254 OF THE INCOME-TAX ACT, 1961, F OR THE ASSESSMENT YEAR 2002-03 AND ASSESSMENT ORDER PASSED UNDER SEC.143(3) FOR THE ASSESSMENT YEAR 2006-07. 2. WE HEARD SHRI GURU BASHYAM, THE LEARNED JOINT COMMISSIONER OF INCOME-TAX APPEARING FOR THE REVENU E AND SHRI N. DEVANATHAN, THE LEARNED COUNSEL APPEARING F OR THE ASSESSEE. 3. FIRST WE WILL CONSIDER THE APPEAL FILED BY THE R EVENUE FOR THE ASSESSMENT YEAR 2002-03 IN I.T.A.NO. 2051/MDS/2 010. 3.1. THE FIRST ISSUE RAISED IN THIS APPEAL IS THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED IN DE LETING THE ADDITION OF ` 21,11,402/-, MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PRICE REDUCTION, WHICH WAS NOT EXPLAINED . IT IS THE CASE OF THE REVENUE THAT EARLIER THIS ISSUE WAS REM ITTED TO THE ASSESSING OFFICER BY INCOME-TAX APPELLATE TRIBUNAL THROUGH THEIR ORDER DATED 7.12.2007 PASSED IN ITA NO.1784/MDS/200 6 TO - - ITA 2051,2052/10 & CO 9 &10/11 3 RECONSIDER THE ISSUE IN THE LIGHT OF THE JUDGMENT O F THE HONBLE MADRAS HIGH COURT IN THE CASE OF M/S. ANANDA METAL CORPORATION (273 ITR 262). THE MATTER BEING SO, IT IS THE CASE OF THE REVENUE THAT THE COMMISSIONER OF INCOME-TAX(APPEALS ) OUGHT TO HAVE APPRECIATED THAT THE ASSESSING OFFICER HAS COR RECTLY DISALLOWED THE CLAIM OF PRICE REDUCTION FOLLOWING T HE DECISION REFERRED TO BY THE TRIBUNAL, SINCE SUCH REDUCTION W AS NOT EFFECTED IN THE SALES TAX RETURN. IT IS ALSO THE CASE OF TH E REVENUE THAT ALL THE EVIDENCES CONSIDERED BY THE COMMISSIONER OF INC OME- TAX(APPEALS) WERE PRODUCED BEFORE HIM, FOR THE FIRS T TIME AND AS SUCH, THERE IS VIOLATION OF RULES 46A OF THE INCOME -TAX RULES, AS A RESULT OF WHICH THE CASE OF THE REVENUE IS PREJUD ICED. 3.2. WE CONSIDERED THE ISSUE IN THE LIGHT OF THE DE TAILED ORDERS PASSED BY THE ASSESSING AUTHORITY, THE COMMISSIONER OF INCOME- TAX(APPEALS) AND ALSO THE ORDER PASSED BY THE TRIBU NAL IN EARLIER OCCASION. IN THE ORIGINAL ASSESSMENT, IT WAS THE C ASE OF THE REVENUE THAT IN ITS SALES TAX RETURN, THE ASSESSEE HAD ADMITTED A TOTAL TURNOVER OF ` 29,39,31,594/- WHICH EXCLUDED THE SALES TAX AND CENTRAL SALES TAX COLLECTED BY THE ASSESSEE. H OWEVER, IN THE - - ITA 2051,2052/10 & CO 9 &10/11 4 PROFIT AND LOSS ACCOUNT FILED FOR THE PURPOSE OF IN COME-TAX, THE ASSESSEE HAD ADMITTED ONLY A TURNOVER OF ` 28,13,18,259/-, THAT TOO, EXCLUDING SALES TAX AND CENTRAL SALES TAX. TH ERE WAS A DIFFERENCE OF ` 1,26,13,335/-. WHEN THIS MATTER WAS TAKEN BEFORE THE COMMISSIONER OF INCOME-TAX(APPEALS) FOR THE FIR ST TIME, A REMAND REPORT WAS CALLED FOR BY THE FIRST APPELLATE AUTHORITY. IN THE REMAND REPORT IT WAS EXPLAINED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD FILED COPY OF SALES TAX ORDER, PAR TICULARS OF STOCK TRANSFERS AND DETAILS OF DAMAGES ACCOUNTED BY IT AND COPIES OF INVOICES AND ALSO NOTES RELATING TO STOCK TRANSFERS. IN SPITE OF THESE EVIDENCES, THE ASSESSING OFFICER TOO K A VIEW IN THE REMAND REPORT THAT THE ASSESSEE HAS NOT PRODUCED SU FFICIENT EVIDENCES TO ESTABLISH ITS CONTENTION OF REDUCTION IN THE PRICES. BUT, THE COMMISSIONER OF INCOME-TAX(APPEALS) MADE H IS OWN ANALYSIS OF THE DETAILS FURNISHED BY THE ASSESSEE A ND FOUND THAT THE ASSESSEE HAD IN FACT FURNISHED ALL THE RELEVANT DETAILS TO RECONCILE THE DIFFERENCE BETWEEN THE SALES TAX TURN OVER AND INCOME-TAX TURNOVER. 3.3. THE COMMISSIONER OF INCOME-TAX(APPEALS) FOUND THAT EVERY ADJUSTMENT IN THE SALE PRICES HAS BEEN SUPPOR TED BY DEBIT - - ITA 2051,2052/10 & CO 9 &10/11 5 NOTES ISSUED BY M/S. TVS LIMITED TO THE ASSESSEE AN D ANY ENHANCEMENT IN THE PRICES HAS BEEN SUPPORTED BY CRE DIT NOTES ISSUED BY M/S. TVS LTD. IN FAVOUR OF THE ASSESSEE. THE ASSESSEE WAS BOUND BY BUSINESS EXIGENCIES TO CONSID ER THE PRICE NEGOTIATIONS MADE BY M/S. TVS LTD., EVEN AFTE R ISSUING INVOICES BY THE ASSESSEE. THE COMMISSIONER OF INCO ME- TAX(APPEALS) ALSO FOUND THAT SUCH FINAL ADJUSTMENT OF PRICES WERE MADE BY M/S. TVS LTD. AFTER ISSUE OF INVOICES AND DELIVERY OF GOODS AND THEREFORE, THE ASSESSEE HAD NO OTHER WAY BUT TO MAKE ADJUSTMENTS IN ITS TURNOVER ON THE BASIS OF TH E DEBIT NOTES AND CREDIT NOTES. HE ACCORDINGLY DELETED THE EARLIER ADDITION OF ` 1,26,13,335/- MADE BY THE ASSESSING AUTHORITY IN TH IS REGARD. 3.4. THIS ISSUE WAS TAKEN IN SECOND APPEAL BEFORE THE TRIBUNAL BY THE REVENUE. THE TRIBUNAL SET ASIDE TH E ISSUE BACK TO THE ASSESSING OFFICER TO EXAMINE THE SALES TAX T URNOVER REPORTED BY THE ASSESSEE AND ASKED FOR RECONCILIATI ON OF DIFFERENCE, IF ANY, AND REDO THE ASSESSMENT ON THE BASIS OF THE TURNOVER ACCEPTED BY THE SALES TAX AUTHORITIES. AS A RESULT OF THIS, THE MATTER WAS REOPENED BY THE ASSESSING OFFI CER AND IN - - ITA 2051,2052/10 & CO 9 &10/11 6 THAT PROCESS THE ASSESSEE FURNISHED THE DETAILS OF RECONCILIATION. EVEN AFTER FURNISHING THE RECONCILIATION OF DIFFERE NCE, WHICH WAS RESULTED BECAUSE OF PRICE ADJUSTMENTS, AN AMOUNT OF ` 89,777/- WAS STILL NOTED BY THE ASSESSING OFFICER AS DIFFERE NCE. 3.5. IN FIRST APPEAL, IN SECOND ROUND, THE COMMISSI ONER OF INCOME-TAX(APPEALS) AGAIN EXAMINED THE ISSUE IN A D ETAILED MANNER. HE OBSERVED THAT THE RATIO OF THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF M/S. ANAND A METAL CORPORATION (273 ITR 262) IS THAT THE FIGURES AS PR OVIDED BY THE SALES TAX AUTHORITIES ARE TO BE ADOPTED FOR THE PUR POSE OF ASSESSMENT. IN THE PRESENT CASE, THE SALES AS ADOP TED BY THE SALES TAX AUTHORITIES ARE HIGHER THAN THE SALES AS PER THE BOOKS OF ACCOUNT. THEREFORE, THE COMMISSIONER OF INCOME- TAX(APPEALS) EXAMINED THE QUESTION, WHETHER THE SAL ES AS ADOPTED BY THE SALES TAX AUTHORITIES ARE TO BE ADOP TED OR THE SALES AS PER THE BOOKS ARE TO BE ADOPTED. THE ASSES SEE EXPLAINED BEFORE THE COMMISSIONER OF INCOME-TAX(APP EALS) THAT IN VIEW OF THE DECISION OF THE HONBLE SUPREME COUR T IN THE CASE OF ADVANI OERLIKON PRIVATE LIMITED (CIVIL APPEAL N O. 1897/1976), THE REDUCTION IN PRICE WOULD NOT GO TO REDUCE THE S ALES AND - - ITA 2051,2052/10 & CO 9 &10/11 7 HENCE THE BOOK FIGURES NEED TO BE ADOPTED. THE COM MISSIONER OF INCOME-TAX(APPEALS) ALSO RELIED ON THE DECISION OF THE THIRD MEMBER OF ITAT, AHMEDABAD BENCH RENDERED IN THE CAS E OF KIRAN CORPORATION REPORTED IN 98 ITD 119, WHEREIN I T WAS HELD THAT REDUCTION FOR DAMAGES WOULD NOT GO TO REDUCE T HE SALES AS PER SALES TAX BUT FOR THE PURPOSE OF INCOME-TAX BOO K FIGURES NEED TO BE ADOPTED. HE FOUND THAT THE DIFFERENCE H AS BEEN PROPERLY EXPLAINED BY THE ASSESSEE. ACCORDINGLY, H E DELETED THE ADDITION MADE BY THE ASSESSING OFFICER IN THE SECON D ROUND. 3.6. IT IS NOT POSSIBLE TO INSIST THAT THE TURNOVER REPORTED BY AN ASSESSEE FOR THE PURPOSE OF CENTRAL EXCISE, SALES T AX AND INCOME-TAX MUST BE ALWAYS EQUAL. THERE MAY BE DIFF ERENCES IN THE QUANTUM OF SALES REPORTED UNDER THE RES PECTIVE LAWS MAINLY FOR REASON OF STATUTORY INTERVENTIONS. THE ASSESSEE HAS TO REPORT ITS TURNOVER TO CENTRAL EXCISE AUTHORITIE S AS SOON AS THE GOODS ARE RELEASED OUT OF ITS WAREHOUSE. IT IS QUI TE POSSIBLE THAT THERE MAY BE A POSSIBILITY OF ADJUSTMENT THEREAFTER , ON THE ULTIMATE PRICE OF CONSIGNMENT BASED ON THE NEGOTIAT IONS BETWEEN THE ASSESSEE AND THE BUYER. SUCH NEGOTIATIONS MAY B E NECESSITATED BECAUSE OF VARIOUS FACTORS INCLUDING F ALL AND RISE IN - - ITA 2051,2052/10 & CO 9 &10/11 8 THE PRICE OF RAW MATERIALS OR REDUCTION IN THE DUTY RATE OR MISCLASSIFICATION OF GOODS FOR THE PURPOSE OF CENTR AL EXCISE ETC. THE ULTIMATE PAYMENT IS MADE BY THE BUYER ONLY AFTE R NEGOTIATIONS AND THE PRICES FINALLY DETERMINED. BUT THE CENTRAL EXCISE RULES DO NOT PERMIT AN ASSESSEE TO K EEP THE PRICE OF THE GOODS DESPATCHED IN A SUSPENDED ANIMATION FO R A LONG PERIOD. IF AT ALL AN ADJUSTMENT IS CALLED FOR, THE SAME SHOULD BE EFFECTED WITHIN THE TIME ALLOWED BY THE CENTRAL EXC ISE RULES. AFTER THE EXPIRY OF THAT PERIOD, IT IS NOT POSSIBLE FOR A N ASSESSEE TO CHANGE THE FIGURES OF TURNOVER REPORTED BEFORE THE CENTRAL EXCISE AUTHORITIES. LIKEWISE, IN THE CASE OF SALES TAX AL SO, THE TURNOVER IS REPORTED ON THE BASIS OF THE INVOICES ISSUED AT THE TIME OF MAKING SALES. AFTER THE SALES ARE MADE, THERE MAY BE OCCASIONS WHERE THE BUYERS WILL ASK FOR ADJUSTMENTS IN THE PR ICE ON ACCOUNT OF VARIOUS REASONS. IT MAY BE BECAUSE OF SALES RET URNS, OR MAY BE BECAUSE OF DAMAGES, OR MAY BE BECAUSE OF FINAL P RICE DETERMINATION AND SO MANY SUCH OTHER COMMERCIAL FAC TORS. HERE ALSO, IF AN ASSESSEE WANTS ANY SUCH ADJUSTMENT, WHI CH HAS TO BE MADE WITHIN A SHORT PERIOD, THE SAME IS PERMITTED B Y THE STATUTE. ONCE THAT PERIOD IS OVER, THE ASSESSEE CANNOT MAKE ANY CHANGE - - ITA 2051,2052/10 & CO 9 &10/11 9 IN THE TURNOVER REPORTED BEFORE THE SALES TAX AUTHO RITIES, EVEN IF THE ASSESSEE IS RECEIVING A LESSER AMOUNT AGAINST T HE SALES MADE BY IT. BUT, WHEN THE TURNOVER IS FURNISHED FO R THE PURPOSE OF INCOME-TAX, THE SAID TURNOVER WOULD BE ON THE BA SIS OF BOOKS OF ACCOUNT MAINTAINED BY IT. EVEN IF SUBSEQUENT A DJUSTMENTS COULD NOT HAVE BEEN MADE IN THE RETURNS FILED UNDER CENTRAL EXCISE AND SALES TAX ACT, THE ADJUSTMENTS HAVE NECE SSARILY TO BE REFLECTED IN THE BOOKS OF ACCOUNT BECAUSE IT IS ON THAT BASIS THE PAYMENTS ARE SETTLED BETWEEN THE PARTIES. 3.7. BECAUSE OF THE ABOVE REASONS, IT IS ALWAYS POS SIBLE THAT THE ASSESSABLE TURNOVER FOR THE PURPOSE OF DIFFEREN T ENACTMENTS IS DIFFERENT FROM THE TURNOVER REFLECTED IN THE BOO KS OF ACCOUNT MAINTAINED BY AN ASSESSEE. THIS HAS EXACTLY HAPPEN ED IN THIS CASE ALSO. THE ASSESSEE IS SUPPLYING ITS GOODS MAI NLY TO TVS LIMITED. M/S. TVS LTD. NEGOTIATES WITH THE ASSESSE E TO REDUCE THE ULTIMATE PRICE OF THE CONSIGNMENT CORRESPONDING TO THE FALL IN THE PRICE OF RAW MATERIALS. CONVERSELY M/S. TVS LT D. ALSO AGREES WITH THE ASSESSEE TO ENHANCE THE PRICE ON ACCOUNT O F ANY INCREASE IN THE PRICE OF RAW MATERIALS. THESE TYPE S OF ADJUSTMENTS ARE FINALIZED AT THE END OF THE RELEVAN T PREVIOUS - - ITA 2051,2052/10 & CO 9 &10/11 10 YEAR. THE ASSESSEE CANNOT RECORD THESE ADJUSTMENTS WITH RETROSPECTIVE EFFECT IN THE TURNOVER REPORTED FOR T HE SALES TAX AUTHORITIES. IT IS FOR THIS REASON THAT THERE IS A DIFFERENCE BETWEEN SALES TAX TURNOVER REPORTED BY THE ASSESSEE AND ITS SALES REFLECTED IN THE BOOKS OF ACCOUNT. BUT THE MOST IM PORTANT ASPECT IS THAT THIS DIFFERENCE HAS BEEN EXPLAINED BY THE A SSESSEE WITH THE HELP OF DOCUMENTARY EVIDENCES. 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE A GREE WITH THE FINDINGS OF THE COMMISSIONER OF INCOME-TAX(APPE ALS) THAT THERE IS NO BASIS FOR CONFIRMING THE ADDITION OF ` 21,11,402/-. THIS ADDITION MADE BY THE ASSESSING OFFICER ON ACCO UNT OF PRICE REDUCTION STANDS DELETED, AS HELD BY THE COMMISSION ER OF INCOME-TAX(APPEALS). THIS ISSUE IS DECIDED AGAINST THE REVENUE. 5. THE SECOND ISSUE RAISED BY THE REVENUE IS THAT T HE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED IN DE LETING THE ADDITION OF ` 12,87,118/- MADE ON ACCOUNT OF SALES REJECTION. FOR THE DETAILED REASONS GIVEN IN THE ABOVE PARAGRA PHS WHILE DEALING WITH THE ISSUE OF PRICE REDUCTION ADDITION, WHICH ARE APPLICABLE TO THE DAMAGES AS WELL, WE AGREE WITH TH E - - ITA 2051,2052/10 & CO 9 &10/11 11 COMMISSIONER OF INCOME-TAX(APPEALS) THAT THERE IS N O JUSTIFICATION IN MAKING AN ADDITION OF ` 12,87,118/-. WE, THEREFORE, UPHOLD THE ORDER OF THE COMMISSIONER OF INCOME- TAX(APPEALS) IN DELETING THE SAID ADDITION. THIS I SSUE IS ALSO DECIDED AGAINST THE REVENUE. 6. THE APPEAL FILED BY THE REVENUE FOR THE ASSESSME NT YEAR 2002-03 IS LIABLE TO BE DISMISSED. 7. NEXT WE WILL CONSIDER THE APPEAL FILED BY THE RE VENUE FOR THE ASSESSMENT YEAR 2006-07 IN ITA NO.2052/MDS/2010 . 7.1. THE FIRST GROUND RAISED IN THIS APPEAL IS THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED IN DE LETING THE ADDITION OF ` 1,73,84,271/- MADE ON PRICE REDUCTION ALLOWED TO CUSTOMERS. FOLLOWING OUR DECISION TAKEN FOR THE EA RLIER ASSESSMENT YEAR 2002-03, WHICH IS DISCUSSED IN THE PARAGRAPHS ABOVE, WE HOLD THAT THE COMMISSIONER OF INCOME-TAX( APPEALS) IS JUSTIFIED IN DELETING THE SAID ADDITION. THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) IS CONFIRMED. THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 8. THE NEXT ISSUE RAISED BY THE REVENUE IS THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED IN DE LETING THE - - ITA 2051,2052/10 & CO 9 &10/11 12 ADDITION OF ` 25,89,237/- ON ACCOUNT OF REVERSAL OF INCOME. THI S ISSUE IS AN OFFSHOOT OF THE MAIN ISSUE WHICH WE HAV E ALREADY CONSIDERED WITH REFERENCE TO THE PRICE REDUCTION AL LOWED TO ITS CUSTOMERS. THIS ISSUE OF REDUCING THE PRICE AT THE END OF THE PREVIOUS YEAR AND AFTER THE SALES WERE MADE, IS A R EGULAR FEATURE IN THE BUSINESS CARRIED ON BY THE ASSESSEE. THIS S ITUATION ARISES YEAR AFTER YEAR. FOR ONE ASSESSMENT YEAR IF SUCH A DJUSTMENTS ARE NOT REPORTED BY THE END OF THE PREVIOUS YEAR, T HE ASSESSEE HAD NO OCCASION TO MAKE ANY ADJUSTMENT TO REDUCE TH E TURNOVER FOR THAT PREVIOUS YEAR. FOR THE REASON THAT THE G ROSS TURNOVER HAS ALREADY BEEN ACCOUNTED IN THE BOOKS OF ACCOUNT ON THE BASIS OF THE INVOICES ISSUED BY THE ASSESSEE, THE ONLY WA Y AVAILABLE TO THE ASSESSEE IS TO ADJUST THE PRICE REDUCTION IN TH E ACCOUNTS OF IMMEDIATELY SUCCEEDING PREVIOUS YEAR. AS THIS IS A CONTINUOUS FEATURE, THERE IS NO QUESTION OF DISTORTING THE ACC OUNTS OF A PARTICULAR PREVIOUS YEAR. WHEREVER UPWARD REVISIO N IS DONE IN THE PRICE OF GOODS SOLD, THE ASSESSEE IS OFFERING S UCH ADDITIONAL TURNOVER AS ITS INCOME. IF SUCH ADDITIONAL INCOME IS DETERMINED IN THE RELEVANT PREVIOUS YEAR ITSELF, THE ASSESSEE IS OFFERING ITS INCOME IN THAT PREVIOUS YEAR ITSELF BUT WHERE IT IS QUANTIFIED IN THE - - ITA 2051,2052/10 & CO 9 &10/11 13 NEXT PREVIOUS YEAR, THE ASSESSEE IS OFFERING THAT I NCOME FOR THE NEXT PREVIOUS YEAR. AS THIS IS A CONSISTENT METHOD FOLLOWED BY THE ASSESSEE, THERE IS NO UNDERSTATEMENT OR OVERSTA TEMENT OF THESE ADJUSTMENTS WITH REFERENCE TO A PARTICULAR AS SESSMENT YEAR. THEREFORE, WE FIND THAT THE ASSESSEE HAS FO LLOWED THE ONLY WAY OPEN BEFORE IT AND THE COMMISSIONER OF INC OME- TAX(APPEALS) HAS JUSTIFIABLY DELETED THE SAID ADDIT ION. WE CONFIRM HIS ORDER ON THIS POINT. 9. THE APPEAL FILED BY THE REVENUE FOR THE ASSESSME NT YEAR 2006-07 IS ALSO LIABLE TO BE DISMISSED. 10. NEXT WE WILL CONSIDER THE CROSS OBJECTIONS FILE D BY THE ASSESSEE. THE COMMON ISSUE RAISED BY THE ASSESSEE IN THESE TWO CROSS OBJECTIONS IS THAT THE COMMISSIONER OF IN COME- TAX(APPEALS) HAS ERRED IN CONFIRMING THE ADDITION M ADE BY THE ASSESSING AUTHORITY TOWARDS INTEREST ON FUNDS DIVER TED TO ASSESSEE S SISTER CONCERN. IT IS THE CASE OF THE ASSESSEE THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS NOT PAS SED A SPEAKING ORDER ON THIS ISSUE AND HE HAS FAILED TO A PPRECIATE THAT THE FUNDS TO THE SISTER CONCERNS WERE MADE ON COMME RCIAL EXPEDIENCY AND SO ALSO IN ANY EVENT THE ASSESSEE HA D RESERVOIR - - ITA 2051,2052/10 & CO 9 &10/11 14 OF INTEREST FREE FUNDS AND IN SUCH CIRCUMSTANCES, T HERE WAS NO NEED TO MAKE ANY DISALLOWANCE OF INTEREST. WE FIND THAT THE ARGUMENTS OF THE ASSESSEE ARE MORE THEORETICAL, WHE REAS THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS CORRECTLY A PPRECIATED THE POSITION. HE HAS RIGHTLY CONFIRMED THE DISALL OWANCE MADE BY THE ASSESSING OFFICER. ACCORDINGLY, THE CROSS OBJE CTIONS FILED BY THE ASSESSEE ARE LIABLE TO BE REJECTED. 11. IN RESULT, THE APPEALS FILED BY THE REVENUE AS WELL AS THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSE D. ORDERS PRONOUNCED IN THE OPEN COURT AT THE TIME O F HEARING ON WEDNESDAY, THE 31 ST OF OCTOBER, 2012 AT CHENNAI. SD/- SD/- (S.S.GODARA) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED, 31 ST OCTOBER, 2012. MPO* COPY TO: APPELLANT/RESPONDENT/CIT/CIT(A)/DR/ GF.