M/s Arora Knit Fab. (P) Ltd., Ludhiana V. ACIT, Ludhiana

CO 58/CHANDI/2011

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 6386 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 month(s) 17 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 24-08-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 07-07-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PREM NATH ARORA
• Assessee Lawyers: S K MITTAL
• Keywords: Deemed dividend
• Section: 143(3); 56; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL: CHANDIGARH BENCH B BEFORE HONBLE MS SUSHMA CHOWLA, JM AND HONBLE SHRI MEHAR SINGH, AM I.T.A. NO. 514/CHANDI/2011 AY 2007-07 A.C.I.T. C-1, LUDHIANA V. M/S ARORA KNIT FAB (P) LTD HA-51, PHASE VI FOCAL POINT LUDHIANA PAN: AACCA 9779 K CROSS OBJECTION NO. 58/CH ANDI/2011 ARISING OUT OF I.T.A. NO. 514/CHANDI/2011 AY 2007-07 M/S ARORA KNIT FAB (P) LTD V A.C.I.T, C-1, LUDHIANA HA-51, PHASE VI FOCAL POINT LUDHIANA PAN: AACCA 9779 K (APPELLANT (RESPONDENT) APPELLANT BY : SHRI S.K. MITTAL RESPONDENT BY: SHRI PREM NATH ARORA DATE OF HEARING: 23.8.2011 DATE OF PRONOUNCEMENT: 24 .8.2011 ORDER PER MEHAR SINGH, AM THE PRESENT APPEAL OF THE REVENUE FOR THE ASSESSME NT YEAR 2007-08 AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE D IRECTED AGAINST THE ORDER OF LD. CIT(A)-I, LUDHIANA DATED 11.2.2011 PASSED U/ S 250(6) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO IN SH ORT AS THE ACT. THE REVENUE HAS RAISED SEVEN GROUNDS OF APPEAL BUT IN S UM AND SUBSTANCE THE ITA NO. 514 & CO 58/CHANDI/2011 ACIT V.ARORA KNIT FAB 2 SAME REVOLVE AROUND SINGLE CORE ISSUE OF DELETION B Y THE LD. CIT(A) U/S 2(22)(E) OF THE ACT. ITA NO. 514/CHANDI/2011 AY 2007-08 REVENUES AP PEAL 2. THE BRIEF AND UNDISPUTED FACTS, AS CULLED OUT FR OM THE RECORD REVEALED THAT THE ASSESSEE HAD FILED RETURN OF INCO ME, FOR THE ASSESSMENT YEAR 2007-08, ON 15.11.2007, SHOWING INCOME AT RS. 29,65,142/-. THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT AT AN IN COME OF RS. 29,65,142. THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT AT RS. 1,57,87,650/-. 3. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO INVOKED PROVISIONS OF SEC 2(22)(E) OF THE ACT AND MADE AN ADDITION OF RS. 1,12,44,952/-, ON THE FOUNDATION OF OBSERVATION THAT THE ASSESSEE HAD RESORTED TO COLOURABLE DEVICE WITH A VIEW TO EVADING TAX. THE AO PLACED RE LIANCE, ON THE DECISION OF MCDOWELL CO LTD (1985) 154 ITR 148, CIT V. SRI MEENAKSHI MILLS LTD. 63 ITR 609 AND CIT V. DURGA PRASAD MORE, 82 ITR 540, TO SUPPORT HIS FINDING PERTAINING TO THE DEVICE RESORT ED TO BY THE ASSESSEE, FOR THE PURPOSE OF TAX-EVASION. THE AO, HAS ALSO R ECORDED THE FACTUAL- FINDING PERTAINING, TO SHARE HOLDING PATTERN IN THE ASSESSMENT ORDER. IT WOULD BE PERTINENT TO REPRODUCE THE SAID FINDING WI TH A VIEW TO APPRECIATING THE SAME. THERE IS NO DOUBT ABOUT THE FACT THAT IN THE CASE OF THE ASSESSEE THE BASIC CONDITIONS AS SPECIFIED IN SEC 2(22)(E) ARE B EING FULFILLED AS THE SHARE HOLDING PROFILE OF M/S ARORA FABRICS PVT LTD (SISTER CONCERN) WHITE HAS GIVEN THE ADVANCE/LOAN IS AS FOL LOWS: MS. HARJIT KAUR 63.54% ITA NO. 514 & CO 58/CHANDI/2011 ACIT V.ARORA KNIT FAB 3 MR. MOHINDER SINGH ARORA 7.74% MR. RAVINDER PAL SINGH ARORA 7.88% MS. NEENA ARORA 9.32% THE SHAREHOLDING PROFILE OF THE ASSESSEE I.E. M/S A RORA KNIT FAB PVT LTD IS AS FOLLOWS: MR. RAVINDER SINGH ARORA 8.78% MR. MOHINDER SINGH ARORA 8.83% MS. HARJIT KAUR 9.26% MS. NEENA ARORA 58.84% 85.71% M/S ARORA FABRICS PVT LTD IS A COMPANY LARGELY OWNE D BY FOUR SHARE HOLDERS I.E. MR. RAVINDER SINGH ARORA, MR. MO HINDER SINGH ARORA, MS. HARJIT KAUR AND MS. NEENA ARORA, THE FAM ILY AS A WHOLE AND MS. NEENA ARORA HAS SUBSTANTIAL SHARE HOLDING I N THE COMPANY. THESE FOUR PERSONS HAVE A COMBINED SHARE HOLDING OF 85.71% AND MS. HARJIT KAUR HAS 58.84% SHAREHOLDING IN M/S AROR A KNIT FAB PVT LTD. WHICH IS SUBSTANTIAL AND DECISIVE IN DECISION MAKING OF THE COMPANY. THE LOAN FROM M/S ARORA FABRICS PVT LTD TO THE ASSESSEE IS, THEREFORE, A LOAN TO A CONCERN IN WHICH THE SHA RE HOLDERS HAVE SUBSTANTIAL INTEREST. IN THIS CASE THE COMBINED SUBSTANTIAL SHARE HOLDING OF 85.71% ACTUALLY SATISFIES THE CONDITION THAT M/S ARORA FABRICS PVT LTD. HAS DIVERTED ITS ACCUMULATED PROFI TS TO YOU SINCE THE ABOVE MENTIONED FOUR SHARE HOLDERS HAVE A SUBSTANTIAL SHARE HOLDING IN THE RECIPIENT ASSESSEE COMPANY. THEREFORE IT IS THE SAME SETUP OF SHARE HOLDERS WHO HAVE THE REQUIS ITE VOTING POWER AND SUBSTANTIAL SHARE HOLDING IN BOTH THE ENTITIES. ITA NO. 514 & CO 58/CHANDI/2011 ACIT V.ARORA KNIT FAB 4 4. THE LD. CIT(A), AFTER DUE APPRECIATION OF THE SU BMISSIONS FILED BY THE ASSESSEE AND THE CASE LAWS CITED THEREIN, DELET ED THE IMPUGNED ADDITIONS. THE FINDING OF THE LD. CIT(A) AS CONTAI NED IN PARA 4 ONWARD OF IMPUGNED APPELLATE ORDER ARE REPRODUCED HEREUNDER F OR THE SAKE OF PROPER APPRECIATION: 4 I HAVE CONSIDERED THE FACTS OF THE CASE AND SUBM ISSIONS OF THE ASSESSEE. ASSESSEE IS A PRIVATE LIMITED COMPANY EN GAGED IN THE BUSINESS OF MANUFACTURING AND PROCESSING OF KNITTED FABRICS. DURING THE YEAR ASSESSEE HAS RECEIVED VARIOUS AMOUNTS IN I TS CURRENT ACCOUNT AS LOAN AND ADVANCE FROM M/S ARORA FABRICS PVT LTD (AFPL) AS NOTED BY THE AO ON PAGE 6 OF THE ASSESSME NT ORDER. ON SEEING THE SHARE HOLDING PATTERN OF THE ASSESSEE CO MPANY AND M/S AFPL THE AO HAS OBSERVED THAT M/S AFPL IS OWNED BY FOUR SHARE HOLDERS NAMELY, MR. RAVINDER SINGH ARORA, MR. MOHIN DER SINGH ARORA, MS. HARJIT KAUR AND MS. NEENA ARORA, THE FAM ILY AS A WHOLE AND MS. NEENA ARORA HAD SUBSTANTIAL SHARE HOLDING I N THE COMPANY. THESE FOUR PERSONS HAD A COMBINED SHARE HOLDING OF 85.71% AND MS. HARJIT KAUR HAS 58.84% SHARE HOLDING IN ASSESSE E COMPANY WHICH IS SUBSTANTIAL AND DECISIVE IN DECISION MAKIN G OF THE COMPANY. M/S AFPL HAD RESERVE AND SURPLUS OF RS. 1 ,12,44,452/- AS ON 31.3.2006 AND RS. 1,12,02,870/- AS ON 31.3.20 07. IN VIEW OF THE ABOVE, THE AO WAS OF THE OPINION THAT LOAN FROM M/S AFPL TO THE ASSESSEE IS A LOAN TO A CONCERN IN WHICH THE SH ARE HOLDERS HAVE SUBSTANTIAL INTEREST AND THEREFORE AFTER GIVING AN OPPORTUNITY TO THE ASSESSEE TREATED THE SAME AS DIVIDEND U/S 2(22)(E) OF THE ACT. HOWEVER, ADDITION WAS RESTRICTED TO AN AMOUNT OF RS . 1,12,44,452/- BEING THE AMOUNT OF RESERVE AND SURPLUS OF M/S AFPL AS ON 31.3.2006 AS AGAINST LOANS AND ADVANCES OF RS. 4,43 ,00,000/-. ASSESSEE, HOWEVER, HAS OBJECTED TO THE ABOVE ADDITI ON IN EH WRITTEN SUBMISSIONS REPRODUCED ABOVE PRIMARILY ON THE FOLLO WING GROUNDS: (I) THAT ONLY THE SHARE HOLDERS CAN BE ASSESSED ON ACCOUNT OF DEEMED DIVIDEND AND NOT THE COMPANY U/S 2(22)(E) OF THE ACT. ITA NO. 514 & CO 58/CHANDI/2011 ACIT V.ARORA KNIT FAB 5 (II) THE BUSINESS TRANSACTIONS ARE NOT COVERED U/S 2(22)(E) OF THE ACT. (III) THERE CAN NOT BE ANY CLUBBING OF THE INDIVIDU AL, HUF, MINOR AND WIFE FOR THE PURPOSE OF SEC 2(22)(E) OF THE ACT . 4.1 AS FAR AS ASSESSEES CONTENTION REGARDING THAT ONLY SHARE HOLDERS CAN BE ASSESSED ON ACCOUNT OF DEEMED DIVIDE ND AND NOT THE COMPANY IS CONCERNED, SAME FIND SUPPORT FROM VARIOU S JUDGMENTS AS NOTED IN THE WRITTEN SUBMISSIONS REPRODUCED ABOVE A ND GIVEN BELOW: 1 CIT V. UNIVERSAL MEDICARE P. LTD (2010 190 TAXMAN 144 (BOM) 2 SB DECISION IN THE CASE OF M/S BHAUMIK COLOURS PV T LTD (2009) 313 ITR (AT) 146,(MUM) (SB) 3 DECISION OF HON'BLE RAJATHAN HIGH COURT IN THE CA SE OF CIT V. HOTEL HILL TOP (2009) 313 ITR 116 (RAJ) 4.2 THEREFORE ON THIS GROUND ADDITION OF RS. 1,12,4 4,452/- CANNOT BE MADE ON ACCOUNT OF DEEMED DIVIDEND U/S 2(22)(E) . AS FAR AS ASSESSEES CONTENTION THAT COMMISSION AND BUSINESS TRANSACTIONS ARE NOT COVERED U/S 2(22)(E) IS CONCERNED, SAME IS NOT APPLICABLE TO THE ASSESSEES CASE. AS NOTED IN THE ASSESSMENT ORDER, ASSESSEE HAS MAINTAINED THREE SEPARATE ACCOUNTS WITH M/S AFPL, I .E. JOB WORK ACCOUNT, SALES ACCOUNT AND ADVANCES/LOANS ACCOUNT. THE LOANS ACCOUNT AS NOTED ON PAGE 6 OF THE ASSESSMENT ORDER, IS IN RESPECT OF PURELY ADVANCES RECEIVED BY THE ASSESSEE COMPANY AN D THEREFORE CANNOT BE TERMED AS BUSINESS TRANSACTION. THIS CON TENTION OF THE ASSESSEE IS THEREFORE, REJECTED. 4.3 AS REGARDS ASSESSEES CONTENTION THAT THERE CAN NOT BE ANYH CLUBBING OF DIFFERENT SHARE HOLDERS SUCH AS INDIVID UAL, HUF, MINOR AND WIFE, SAME IN MY OPINION IS JUSTIFIED. IN THIS CASE, THE AO HAS REACHED THE CONCLUSION THAT PROVISIONS OF SECTION 2 (22)(E) ARE APPLICABLE ON THE GROUND THAT THE FAMILY AS A WHOLE AND MS. MEENA ARORA HAVE SUBSTANTIAL SHARE HOLDING IN THE ASSESSE E COMPANY AND MS. HARJIT KAUR HAS 58.84% (ACTUALLY IT IS 9.26%) I N THE ASSESSEE ITA NO. 514 & CO 58/CHANDI/2011 ACIT V.ARORA KNIT FAB 6 COMPANY. AS NOTED IN THE WRITTEN SUBMISSIONS, NONE OF THE SHARE HOLDER WHO IS THE BENEFICIAL OWNER OF SHARE HOLDING NOT LESS THAN 10% OF THE VOTING POWER IN THE ASSESSEE COMPANY HOL DSL SUBSTANTIAL INTEREST IN M/S AFPL. MS. NEENA ARORA IS HOLDING 5 8.84% IN THE ASSESSEE COMPANY BUT SHE IS HOLDING ONLY 9.32% SHAR ES IN M/S AFPL WHICH IS BELOW 10%. HER SHARE HOLDING IN AFPL AND IS ALSO HOLDING 9.26% SHARE HOLDING IN ASSESSEE COMPANY WHI CH IS BELOW 20% WHICH IS NECESSARY TO DECIDE THE HOLDING OF SUB STANTIAL INTEREST IN A COMPANY TO WHOM THE LOANS AND ADVANCES HAVE BE EN GIVEN. IT IS THUS, SEEN THAT CONDITIONS LAID DOWN IN SECTION 2(22)(E) WITH REGARD TO MINIMUM SHARE HOLDING BY THE SHARE HOLDER S IN ASSESSEE COMPANY VIS--VIS AFPL IS NOT FULFILLED. SHARE HOL DING OF VARIOUS DIFFERENT PERSONS CANNOT BE CLUBBED TO DECIDE THE I SSUE OF FULFILLMENT OF CONDITION LAID DOWN IN SECTION 2(22) (E) OF THE ACT. THIS VIEW IS SUPPORTED BY VARIOUS JUDGMENTS AS RELI ED UPON BY THE ASSESSEE IN HIS WRITTEN SUBMISSIONS. 4.4 IN VIEW OF THE ABOVE DISCUSSION, I AM OF THE OP INION THAT WHILE ASSESSEE CANNOT GET RELIEF ON THE GROUND THAT LOANS AND ADVANCES ARE BUSINESS TRANSACTIONS BUT THE AMOUNT OF LOANS AND ADVANCES CANNOT BE TAXED AS DEEMED DIVIDEND U/S 2(2 2)(E) OF THE ACT FOR THE REASON THAT ONLY THE SHARE HOLDERS CAN BE ASSESSED ON ACCOUNT OF DEEMED DIVIDEND AND NOT THE ASSESSEE CO MPANY AS THE ASSESSEE COMPANY IS NOT A SHARE HOLDER IN AFPL AND ALSO ON THE GROUND THAT NONE OF THE SHARE HOLDERS WHO IS HOLDIN G MORE THAN 10% SHARES IN M/S AFPL IS HAVING SUBSTANTIAL INTEREST I N THE ASSESSEE COMPANY TO WHOM THE LOANS AND ADVANCES HAVE BEEN GI VEN BY M/S AFPL. 4.5 IN VIEW OF THE ABOVE DISCUSSION, ADDITION OF RS . 1,12,44,452/- IS DELETED. 5. IN THE COURSE OF PRESENT PROCEEDINGS, THE LD. D R BROUGHT UNDER SHARP FOCUS, THE DUBIOUS NATURE OF THE TRANSACTIONS , RESORTED TO BY THE ASSESSEE, WITH THE SOLE OBJECT OF INDULGING IN TAX- EVASION. HE ALSO REFERRED TO, PAGE 6 OF THE IMPUGNED ASSESSMENT ORDE R AND DREW OUR ATTENTION, TO THE SHARE HOLDING PATTERN OF THE ASSE SSEE. HE SUPPORTED THE ITA NO. 514 & CO 58/CHANDI/2011 ACIT V.ARORA KNIT FAB 7 FINDINGS OF THE AO ON THE BASIS OF CASE-LAWS CITED IN THE ASSESSMENT ORDER, IN RESPECT OF COLOURABLE DEVICE RESORTED TO BY THE ASSESSEE. 6. LD. AR FOR THE ASSESSEE SUBMITTED PAPER BOOK AND CITED MANY DECISIONS THEREIN BUT PLACED RELIANCE ON THE FOLLOW ING CASES AND, FURTHER, VEHEMENTLY CONTENDED THAT THE CORE ISSUE IS SQUAREL Y COVERED BY THE FOLLOWING DECISIONS: 1 CIT V. UNIVERSAL MEDICARE P LTD (2010) 190 TAXMAN 144 (BOM) 2 SB DECISION IN THE CASE OF BHAUMIK COLOURS PVT LT D (2009) 313 ITR (AT) 146 MUMBAI (SB) 3 CIT V. HOTEL HILLTOP (2009) 313 ITR 116 (RAJ) 7 WE HAVE CAREFULLY PERUSED THE FACTS OF THE CASE, RIVAL SUBMISSIONS AND RELEVANT PAPER BOOK FILED BY THE ASSESSEE. A BA RE PERUSAL OF THE FACTS REVEALS THAT THE ISSUE IS COVERED BY THE ABOVE DECI SIONS RELIED UPON BY THE ASSESSEE. THE LD. CIT(A), IN PARA 4 OF THE IMPUGNE D APPELLATE ORDER, AS REPRODUCED ABOVE HAS ALSO CONSIDERED THE SAME DECIS IONS. 7.1 THE HEAD NOTE OF THE DECISION OF THE SB IN THE CASE OF ACIT V. BHAUMIK COLOURS PVT LTD (SUPRA) ARE REPRODUCED HERE UNDER: TO ATTRACT THE FIRST LIMB OF THE PROVISIONS OF SEC TION 2(22)(E), THE PAYMENT MUST BE TO A PERSON WHO IS A REGISTERED HOL DER OF SHARES. THE WORD SHAREHOLDER ALONE EXISTED IN THE DEFINIT ION OF DIVIDEND IN THE 1922 ACT AND HAS BEEN INTERPRETED UNDER THE 1922 ACT TO MEAN A REGISTERED SHAREHOLDER. THIS EXPRESSION SH AREHOLDER FOUND IN THE 1961 ACT HAS TO BE THEREFORE CONSTRUED AS AP PLYING ONLY TO REGISTERED SHAREHOLDERS. IT IS A PRINCIPLE OF INTE RPRETATION OF STATUTES THAT ONCE CERTAIN WORDS IN AN ACT HAVE REC EIVED A JUDICIAL CONSTRUCTION IN ONE OF THE SUPERIOR COURTS, AND THE LEGISLATURE HAS REPEATED THEM IN A SUBSEQUENT STATUTE, THE LEGISLAT URE MUST BE TAKEN ITA NO. 514 & CO 58/CHANDI/2011 ACIT V.ARORA KNIT FAB 8 TO HAVE USED THEM ACCORDING TO THE MEANING WHICH A COURT OF COMPETENT OF JURISDICTION HAS GIVEN THEM. 7.2 IN CIT V. HOTEL HILLTOP, 217 CTR (RAJ) 527, HON 'BLE RAJATHAN HIGH COURT HELD AS UNDER: THE IMPORTANT ASPECT, BEING THE REQUIREMENT OF SEC 2(22)(E) IS THAT THE PAYMENT MAY BE MADE TO ANY CONCERN IN WHICH SUC H SHAREHOLDER IS A MEMBER, OR THE PARTNER AND IN WHICH HE HAS SUB STANTIAL INTEREST OR ANY PAYMENT BY ANY SUCH COMPANY ON BEHALF OR FOR THE INDIVIDUAL BENEFIT OF ANY SUCH SHAREHOLDER THUS, THE SUBSTA NCE OF THE REQUIREMENT IS THAT THE PAYMENT SHOULD BE MADE ON B EHALF OF OR FOR THE INDIVIDUAL BENEFIT OF ANY SUCH SHAREHOLDER. , O BVIOUSLY THE PROVISION IS INTENDED TO ATTRACT THE LIABILITY OF T AX ON THE PERSON, ON WHOSE BEHALF OR FOR WHOLE INDIVIDUAL BENEFIT THE AM OUNT IS PAID BY THE COMPANY WHETHER TO THE SHAREHOLDER OR TO .CONC ERNED FIRM. IN WHICH EVENT, IT WOULD FALL WITHIN THE EXPRESSION D EEMED DIVIDEND. OBVIOUSLY INCOME FROM DIVIDEND IS TAXABLE AS INCOME FROM OTHER SOURCES UNDER SEC 56 AND IN THE VERY NATURE OF THIN GS, THE INCOME HAS TO BE OF THE PERSON EARNING THE INCOME. THE AS SESSEE IN THE PRESENT CASE IS NOT SHOWN TO BE ONE OF THE PERSONS BEING SHAREHOLDER. OF COURSE THE TWO INDIVIDUALS BEING R AND D ARE THE COMMON PERSONS, HOLDING MORE THAN REQUISITE AMO UNT OF SHAREHOLDING AND ARE HAVING REQUISITE INTEREST, IN THE FIRM, BUT THEN, THEREBY THE DEEMED DIVIDEND WOULD NOT BE DEEMED DIV IDEND IN THE HANDS OF THE FIRM, RATHER IT WOULD OBVIOUSLY BE DEE MED DIVIDEND IN THE HANDS OF THE INDIVIDUALS, ON WHOSE BEHALF OR ON WHOSE INDIVIDUAL BENEFIT, BEING SUCH SHAREHOLDER, THE AMO UNT IS PAID BY THE COMPANY TO THE CONCERN. THUS THE SIGNIFICANT R EQUIREMENT OF SEC 2(22)(E) IS NOT SHOWN TO EXIST. THE LIABILITY OF TAX, AS DEEMED DIVIDEND, COULD BE ATTRACT RED IN THE HANDS OF THE INDIVIDUALS, BEING THE SHAREHOLDERS AND NOT IN THE HANDS OF THE FIRM. 7.3 THE LD. CIT(A), HAS RECORDED A CLEAR FINDING, I N PARA 4.3 OF THE APPELLATE ORDER THAT THE CONDITIONS LAID DOWN IN SE C 2(22)(E) WITH REGARD TO MINIMUM SHARE HOLDING BY THE SHARE HOLDERS IN A SSESSEE COMPANY VIS- ITA NO. 514 & CO 58/CHANDI/2011 ACIT V.ARORA KNIT FAB 9 -VIS M/S AFPL ARE NOT FULFILLED. IT WAS, FURTHER, OBSERVED THAT SHARE HOLDERS OF VARIOUS DIFFERENT PERSONS CANNOT BE CLUB BED TO DECIDE THE ISSUE OF FULFILLMENT OF CONDITIONS LAID DOWN IN SEC 2(22) (E) OF THE ACT. HE WAS OF THE OPINION THAT THE DECISIONS RELIED UPON BY TH E ASSESSEE, SUPPORT HIS FINDINGS. 8. IN VIEW OF LEGAL AND FACTUAL DISCUSSIONS, INCLUD ING THE CASE LAWS CITED AND RELIED UPON BY THE ASSESSEE, WE ARE OF TH E CONSIDERED VIEW THAT THERE IS NO INFIRMITY, IN THE FINDINGS OF THE LD. C IT(A), AND HENCE, THE SAME ARE UPHELD. 9. APPEAL OF THE REVENUE IS DISMISSED. CROSS OBJECTION NO. 58/CHANDI/2011 AY 2007-08 10. IN VIEW OF THE FINDINGS RECORDED ABOVE, AS ALSO IN THE LIGHT OF SUBMISSION OF THE LD. AR THAT THE CROSS OBJECTION INTENDED TO SUPPORT THE APPELLATE ORDER. THE IMPUGNED CROSS OBJECTIONS IS DISMISSED AS INFRUCTUOUS. 11. IN THE RESULT, APPEAL OF THE REVENUE AND THE CR OSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON 24 .8.2011 SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNANT MEMBER CHANDIGARH, THE 24 .8.2011 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/T HE CIT(A)/THE DR ITA NO. 514 & CO 58/CHANDI/2011 ACIT V.ARORA KNIT FAB 10