ATOMSTROYEXPORT, MUMBAI V. ADDL CIT (IT) RG-1, MUMBAI

ITA 1000/MUM/2010

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0286 (ITAT-MUMBAI)
• Duration Of Justice: 8 year(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: L
• Assessment Year: 2004-2005
• Appeal Filed On: 08-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Business income; Double taxation relief; Period of limitation; Deemed to accrue or arise in india
• Section: 147; 148; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL L , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI C.N. PRASAD , JM ITA NO. 1000 / MUM/20 10 ( ASSESSMENT YEAR : 2004 - 05 ) M/S. ATOMSTROYEXPORT REPRESENTATIVE ASSESSEE: NUCLEAR POWER CORPORATION OF INDIA LTD., VIKR AM SARABHAI BHAVAN CENTRAL AVENUE ANUSHAKTI NAGAR MUMBAI 400 094 VS. ADDITIONAL DIRECTOR OF INCOME TAX (IT) - 1, MUMBAI PAN/GIR NO. AAFCA3658N APPELLANT ) .. RESPONDENT ) ITA NO. 1095/ MUM/20 10 ( ASSESSMENT YEAR : 2004 - 05 ) ADDITIONAL DIR ECTOR OF INCOME TAX (IT) - 1, MUMBAI VS. M/S. ATOMSTROYEXPORT REPRESENTATIVE ASSESSEE: NUCLEAR POWER CORPORATION OF INDIA LTD., VIKRAM SARABHAI BHAVAN CENTRAL AVENUE ANUSHAKTI NAGAR MUMBAI 400 094 PAN/GIR NO. AAFCA3658N APPELLANT ) . . RESPONDENT ) ASSESSEE BY SHRI NITESH JOSHI REVENUE BY SHRI SAMUEL DARSE DATE OF HEARING 18 / 12 /201 7 DATE OF PRONOUNCEME NT 16 / 02 /201 8 / O R D E R PER R.C.SHARMA (A.M) : ITA NO. 1000/MUM/2010 & 1095/MUM/2010 M/S.ATOMSTROYEXPORT 2 THESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE AND REVENUE AGAINST THE ORDER OF CIT(A) - 10, MUMBAI DATED 30/11/2009 FOR THE A.Y.2004 - 05 IN THE MATTER OF ORDER PASSED U/S.143(3) OF THE IT ACT. 2. FACTS IN BRIEF ARE THAT THE ASSESSEE M/S. ATOMSTROYEX PORT ('ASE'). IS A RUSSIAN ORGANISTATION . A CONTRACT DATED JULY 20. 1998 WAS SIGNED BETWEEN THE ASSESSEE AND NUCLEAR POWER CORPORATION OF INDIA LIMITED ('NPCIL') FOR THE PREPARATION OF A DETAILED PROJECT REPORT ('DPR') FOR SETTING UP A NUCLEAR POWER STATIONS ('NPS') IN INDIA AT VARIOUS LOCATIONS. NPCIL IS A LIMITED COMPANY, INCORPORATED ON SEPTEMBER 3. 1987 AND IS A WHOLLY OWNED GOVERNMENT OF INDIA ENTERPRISE. NPCIL ON INCORPORATION LOOK OVER VARIOUS NUCLEAR POWER PROJE CTS AND EXISTING POWER STATIONS SITUATED AT DIFFERENT PLACES ACROSS THE COUNTRY FROM THE DEPARTMENT OF ATOMIC E NERGY , GOVERNMENT OF INDIA. AMONGST THE OTHER PLACES. NPCIL IS IN THE PROCESS OF SETTING UP NUCLE AR POWER STATION AT KUDIINKULAM, TAMIL NADU. FO R THIS PURPOSE, THE REPUBLIC OF INDIA AND THE THEN UNION OF SOUET SOCIALIST REPUBLICS (USSR) HAD ENTERED INTO AN AGREEMENT DATED NOVEMBER 20 , 19 9 8 FOR CO - OPERATION IN THE CONSTRUCTION OF A NUCLEAR POWER STATION IN INDIA. A SUPPLEMENTARY AGREEMENT DATED JUN E 20, [998. WAS ENTERED INTO BETWEEN THE REPUBLIC OF INDIA AND THE RUSSIAN FEDERATION. IT WAS AGREED THAT THE RUSSIAN FEDERATION WOULD ASSIST INDIA IN SELLING UP A NUCLEAR POWER S TAT ION AL KUDANKULANI , TAMIL NADU. THE GOVERNMENT OF INDIA HAD IDENTIFIED NPC IL AS THE ENTITY IN INDIA AND THE RUSSIAN GOVERNMENT HAD IDENTIFIED THE ASSESSEE AS AN ENTITY IN RUSSIA, WHICH WOULD BE PARTIES TO THE AGREEMENTS REFERRED ABOVE FOR THE ITA NO. 1000/MUM/2010 & 1095/MUM/2010 M/S.ATOMSTROYEXPORT 3 CONSTRUCTION OF NUCLEAR POWER STATION IN INDIA. IN THE RETUR N OF INCOME F ILED W IIH TH E DEPARTMENT, THE ASSESSEE HAS CLAIMED APPLICABILITY OF PROVISIONS OF SECTION 44BBB OF THE ACT TO THE PAYMENT RECEIVED FROM NPCIL AND HAS OFFERED 10% OF THE TOTAL AMOUNT RECEIVED T O TAX. HOWEVER, AT THE TIME OF PAYMENT. NPCU, HAS DEDUCTED LAX AT SOURCE A T THE RATE OF 10% IN ACCORDANCE WITH THE ORDER PASSED UNDER SECTION 195(2) OF THE ACT BY THE ASSESSING OFFICER PURSUANT TO THE APPLICATION UNDER SECTION 195 MADE BY NPCIL FOR AUTHORIZATION TO MAKE REMITTANCE OF AMOUNT UNDER VARIOUS CONTRACT REFERRED ABOVE T O THE ASSESSEE AFTER NIL OR LOWER DEDUCTION OF TAX AT SOURCE. 3. LEARNED ASSESSING OFFICER HAS DENIED THE APPLICABILITY OF THE PROVISION OF SECTION 44BBB OF THE ACT IN RESPECT OF OFFSHORE SERVICE CONTRACTS AND HAS CHANGED THE WHOLE PAYMENT MADE BY NPCI L TO TAX AT THE RATE OF 10%. 4. BY THE IMPUGNED ORDER, CIT(A) ACCEPTED ASSESSEES CLAIM. HOWEVER, HE HAS UPHELD REOPENING OF ASSESSMENT. 5. BOTH ASSESSEE AND REVENUE ARE IN FURTHER APPEAL BEFORE US AGAINST THE ORDER OF CIT(A). 6. IN THE APPEAL FILED BY THE ASSESSEE, THE ASSESSEE IS AGGRIEVED FOR VALIDITY OF REOPENING U/S.147 OF THE IT ACT. HOWEVER, REVENUE IS IN APPEAL BEFORE US FOR DELETING THE ADDITION MADE BY AO HOLDING THAT P ROVISIONS U/S.44BBB ARE APPLICA BLE TO THE PAYMENT RECEIVED BY THE ASSESSEE FROM NUCLEAR POWER CORPORATION OF INDIA LTD., ITA NO. 1000/MUM/2010 & 1095/MUM/2010 M/S.ATOMSTROYEXPORT 4 7. AT THE OUTSET, LEARNED AR PLACED ON RECORD, THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE WHEREIN SIMILAR ADDITION MADE BY THE AO WHICH WAS DELETED BY THE CIT(A) HAD BEEN AFFIRMED BY THE TRIB UNAL VIDE ORDER DATED 04/09/2017 FOR A.Y.2005 - 06. 8. WE HAVE GONE THROUGH THE ORDER OF THE TRIBUNAL DATED 04/09/2017 WHEREIN APPLICABILITY OF PROVISIONS OF SECTION 44BBB TO THE PAYMENT RECEIVED BY ASSESSEE FROM NUCLEAR POWER CORPORATION OF INDIA LTD., A ND THE TRIBUNAL HAS HELD AS UNDER: - 4.BEFORE US, THE DEPARTMENTAL REPRESENTATIVE (DR) FAIRLY CONCEDED THAT THE ISSUE STANDS DECIDED AGAINST THE AO AND IN FAVOUR OF THE ASSESSEE. THE AUTHORISED REPRESENTATIVE (AR) BROUGHT TO OUR NOTICE THAT IN THE DRAFT AS SESSMENT ORDER FOR THE AY.2007 - 08 THE AO HAD DENIED THE ASSESSEES SIMILAR CLAIM, THAT THE DRP IN ITS DIRECTIONS HAD INSTRUCTED THE AO TO ACCEPT THE CLAIM OF THE ASSESSEE, THAT THE AO HIMSELF HAD ACCEPTED THE POSITION FOR THE AY.S 2008 - 09 AND 2010 - 11. HE F URTHER STATED THAT INCOME EARNED BY THE ASSESSEE FROM SERVICE CONTRACT HAD TO BE COMPUTED AS PER THE PROVISIONS OF SECTION 44 BBB .HE REFERRED TO THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE, FOR THE AY 2009 - 10 AND 2010 - 11 (ITA/6581/MUM/2012 AND ITA/64 01/MUM/2013 DT.22.3.2017).HE ALSO RELIED UPON THE CASE OF NPCIL (ITA/6394/MUM/ 2008 DT.12/2/2016 (APPEAL BY THE AO) AND ITA.S 733, 734, 735 AND 931/MUM/2011 ) WE ARE REPRODUCING PARA 7 AND 8 OF THE ORDER OF THE TRIBUNAL FOR THE AY 2009 - 10(SUPRA) AND IT REA DS AS UNDER : - 7.WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD AS WELL AS THE ORDER OF THE COMPANY - ORDINATE BENCH REFERRED TO ABOVE. THE ISSUE IN DISPUTE IN THESE GROUNDS IS IN RELATION TO TAXABILITY OF T HE AMOUNT RECEIVED TOWARDS SUPPLY OF MATERIALS AND EQUIPMENT UNDER THE OFF - SHORE SUPPLY CONTRACTS. UNDISPUTEDLY, THE OFF - SHORE SUPPLY CONTRACTS UNDER WHICH THE ASSESSEE HAS SUPPLIED MATERIALS AND EQUIPMENTS IN THE IMPUGNED ASSESSMENT YEAR IS/ARE CONTINUING FROM THE ASSESSMENT YEAR 2006 - 07 ONWARDS. IT IS RELEVANT TO NOTE, THE TAXABILITY OF THE AMOUNT RECEIVED UNDER THE OFF - SHORE CONTRACT IS A CONTENTIOUS ISSUE BETWEEN THE ASSESSEE AND THE DEPARTMENT RIGHT FROM THE ASSESSMENT YEAR 2006 - 07. IN FACT, IN THE IMP UGNED ASSESSMENT YEAR, THE ASSESSING OFFICER FOLLOWING THE ORDER OF THE RP FOR ASSESSMENT YEAR 2006 - 07 AND 2007 - 08, HAS BROUGHT TO TAX THE AMOUNT RECEIVED UNDER OFF - SHORE SUPPLY CONTRACTS BY APPLYING THE PROVISIONS OF SECTION 44 BBB. IT IS WORTH MENTIONING WHILE DECIDING IDENTICAL NATURE OF DISPUTE RAISED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2007 - 08, 2008 - 09 AND 2011 - 12, THE TRIBUNAL IN ITS ORDER, AS REFERRED TO ABOVE, AFTER ANALYZING THE NATURE OF CONTRACT, PROVISIONS OF THE ACT, AND RELEVANT DTAA AS WE LL AS THE PRINCIPLES OF LAW LAID DOWN IN JUDICIAL PRECEDENTS, IN A DETAILED ORDER ITA NO. 1000/MUM/2010 & 1095/MUM/2010 M/S.ATOMSTROYEXPORT 5 ULTIMATELY CONCLUDED, SINCE, SUPPLY OF MATERIALS AND EQUIPMENTS UNDER THE OFFSHORE SUPPLY CONTRACTS WERE CARRIED OUT AND CONCLUDED OUTSIDE INDIA, THE RECEIPTS FROM OFF - SHORE SUPPLY CONTRACTS CANNOT BE DEEMED TO ACCRUE OR ARISE IN INDIA. THE OPERATIVE PORTION FROM THE ORDER OF THE TRIBUNAL IS EXTRACTED HEREIN BELOW: 15.THEREFORE, AFTER ANALYZING THE VARIOUS CASE LAWS, STATUTORY PROVISIONS, DTAA PROVISIONS AND CONTRACTUAL TER MS AND RESPECTFULLY FOLLOWING JUDGMENT OF HON'BLE SUPREME COURT IN ISHIKAWAJIMA HARIMA HEAVY INDUSTRIES LIMITED V/S DCIT (288 ITR 408), WE ARE INCLINED TO HOLD THAT OFFSHORE SUPPLY CONTRACTS WERE CARRIED AND CONCLUDED OUTSIDE INDIA AND HENCE NO INCOME THEREFROM DEEMED TO ACCRUE OR ARISE IN INDIA AS PER SECTION 991) AND DTAA PROVISIONS ACCORDINGLY, NOT CHARGEABLE TO TAX. THE RECEIPTS THEREOF DO NOT FORM PART OF RECEIPTS FOR THE PURPOSE OF COMPUTATIONAL PROVISIONS OF SECTION 44 BBB. EXPLANATION - 4 COULD NO T OVERCOME THE LIMITATION IMPOSED BY EXPLANATION - 1(A) TO SECTION 9(1)(I) AND HENCE, THE IMPUGNED INCOME DO NOT FORM PART OF BUSINESS RECEIPTS FOR COMPUTATION OF INCOME U/S. 44 BBB OF THE ACT. WE HELD SO. 4.1.IN THE CASE OF NPCIL (SUPRA) THE TRIBUNAL HAS HELD THAT PROVISIONS OF SECTION 44BBB WOULD BE APPLICABLE FOR THE PROJECT EXECUTED BY THE ASSESSEE .RESPECTFULLY FOLLOWING THE ABOVE WE HOLD THAT THE ASSESSEE CANNOT BE TAXED AS PER THE PROVISIONS OF SECTION 9 OF THE ACT, THAT IT IS COVERED BY THE SECTION 44 BBB OF THE ACT. CONFIRMING THE ORDER OF THE FAA WE DECIDE THE EFFECTIVE GROUND OF APPEAL AGAINST THE AO. AS A RESULT APPEAL FILED BY THE AO STANDS DISMISSED 9. AS THE FACTS AND CIRCUMSTANCES DURING THE YEAR UNDER CONSIDERATION ARE PARAMETERIA, FOLLOW ING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING THE ADDITION SO MADE BY THE AO HOLDING THAT PROVISIONS OF SECTION 44BBB OF THE I . T ACT ARE NOT APPLICABLE TO ASSESSEE. 10. SO FAR AS REO PENING IS CONCERNED, IT WAS ARGUED BY LEARNED AR THAT REOPENING OF ASSESSMENT IS BAD IN LAW IN SO FAR AS ASSESSEE COMPANY HAS SUBMITTED ALL THE INFORMATION IN THE RETURN OF INCOME AND THE BASIS FOR THE SAME. IN THE RETURN ITSELF, THE ASSESSEE COMPANY HAS M ENTIONED THAT CIT(A) IN THE CASE OF NPCIL HELD THAT THE PAYMENT MADE TO THE ASSESSEE COMPANY UNDER THE ABOVE CONTRACTS ARE COVERED BY THE PROVISIONS OF ITA NO. 1000/MUM/2010 & 1095/MUM/2010 M/S.ATOMSTROYEXPORT 6 SECTION 44BBB. RELIANCE WAS PLACED BY LEARNED AR ON THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CAS E OF JET AIRWAYS 331 ITR 236. RELIANCE WAS ALSO PLACED ON THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF GERMAN REMEDIES LTD., REPORTED AT 285 ITR 26. 1 1 . LEARNED AR ALSO PLACED ON RECORD, THE ORDER OF TRIBUNAL FOR THE A.Y.2006 - 07 DATED 04/12/201 3 WHEREIN EXACTLY SIMILAR ISSUE OF REOPENING HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. THE PRECISE OBSERVATION OF THE TRIBUNAL WAS AS UNDER: - 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, CAREFULLY PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE REL EVANT MATERIAL EVIDENCES BROUGHT ON RECORD. IT IS AN UNDISPUTED FACT THAT THE REOPENING OF THE ASSESSMENT IS TOTALLY BASED UPON THE REASONS DISCUSSED IN THE ASSESSMENT ORDER FOR A.Y. 2005 - 06, WHEREIN IT HAS BEEN HELD THAT RECEIPTS IN PURSUANCE OF OFFSHORE SERVICES CONTRACT ARE IN THE NATURE OF ROYALTIES AND IN PURSUANCE TO THE CONTRACT FOR DEPUTATION OF SPECIALISTS AND OFFSHORE TRAINING CONTRACT ARE IN THE NATURE OF FEES FOR TECHNICAL SERVICES. NOTICE U/S. 148 IS DT. 9.3.2009 AND THE APPELLATE ORDER OF THE LD. CIT(A) FOR A.Y. 2005 - 06 IS DT. 13.1.2009 WHICH MEANS THAT THE VERY BASIS FOR REOPENING THE ASSESSMENT WAS STRUCK DOWN BY THE LD. CIT(A) ON 13.1.2009 WHICH ORDER WAS VERY MUCH AVAILABLE TO THE AO WHEN HE RECORDED HIS REASONS FOR REOPENING THE ASSESSMENT .THE ASSESSMENT ORDER OF AY 2005 - 06 STOOD MERGED WITH THE ORDER OF THE CIT[A]. THE PRINCIPLES OF JUDICIAL DISCIPLINE REQUIRE THAT THE ORDERS OF THE HIGHER APPELLATE AUTHORITIES SHOULD BE FOLLOWED UNRESERVEDLY BY THE SUBORDINATE AUTHORITIES. THE MERE FACT THAT THE ORDER OF THE APPELLATE AUTHORITIES IS NOT ACCEPTABLE TO THE DEPARTMENT IS IN ITSELF AN OBJECTIONABLE PHRASE AND IS A SUBJECT MATTER OF AN APPEAL CAN FURNISH NO GROUND FOR NOT FOLLOWING IT UNLESS ITS OPERATION HAS BEEN SUSPENDED BY A COMPETENT COU RT. FOR THESE OBSERVATIONS, WE DRAW SUPPORT FROM THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF KAMALAKSHI FINANCE CORPORATION (SUPRA). IT IS ALSO PERTINENT TO NOTE THAT THE AO HAS GIVEN APPEAL EFFECT TO THE ORDER OF THE LD. CIT(A) ON 5.3.2009 WH ICH WAS ALSO PRIOR TO THE DATE OF ISSUING NOTICE U/S. 148 OF THE ACT. AS THE ENTIRE REOPENING WAS BASED ON WHAT HAPPENED IN ASSESSMENT YEAR 2005 - 06 THAT VERY BASIS BEING STRUCK DOWN BY THE FIRST APPELLATE AUTHORITY, THERE WAS NO REASON BEFORE THE AO TO BEL IEVE THAT THE INCOME HAS ESCAPED ASSESSMENT. 12.1. ANOTHER IMPORTANT FACTOR TO BE CONSIDERED IS THAT THE ASSESSMENT ORDER FOR A.Y. 2005 - 06 IS DT. 31.12.2007 AND THE RETURN FOR THE IMPUGNED ASSESSMENT YEAR WAS FILED ITA NO. 1000/MUM/2010 & 1095/MUM/2010 M/S.ATOMSTROYEXPORT 7 ON 29.10.2007 WHICH MEANS THAT THE AO HAD SUFFICIENT TIME TO TAKE THE RETURN UNDER SCRUTINY ASSESSMENT BY ISSUING NOTICE U/S. 143(2) OF THE ACT. IT APPEARS THAT HAVING MISSED THE PERIOD OF LIMITATION FOR ISSUING NOTICE U/S. 143(2). THE AO DEEM IT FIT TO ISSUE NOTICE U/S. 148 OF THE ACT ON THE BAS IS OF THE FACTS OF A.Y. 2005 - 06. 12.2. AS WE HAVE BROUGHT OUT THE FACTS HEREINABOVE THAT ON THE DATE OF THE ISSUE OF NOTICE U/S. 148 OF THE ACT, THE AO WAS VERY MUCH IN POSSESSION OF THE FIRST APPELLATE ORDER AND THE VERY REASONS FOR REOPENING THE ASSESS MENT DID NOT SURVIVE BY VIRTUE OF THE FINDINGS OF THE FIRST APPELLATE AUTHORITIES WHICH WERE BINDING UPON THE AO. IN OUR CONSIDERED OPINION, THE AO HAS GROSSLY ERRED IN REOPENING THE ASSESSMENT AND THE DRP FELL INTO THE SAME ERROR BY CONFIRMING THE SAME. C ONSIDERING THE FACTS IN TOTALITY IN THE LIGHT OF THE JUDICIAL DECISIONS DISCUSSED HEREINABOVE, THE ASSESSMENT U/S. 147 PERSUANT TO THE NOTICE U/S. 148 OF THE ACT IS SET ASIDE. GROUND NO. 1 IS ACCORDINGLY ALLOWED . 1 2 . FROM THE RECORD, WE F O UND THAT DURING THE YEAR UNDER CONSIDERATION, REOPENING WAS ON THE BASIS OF ASSESSMENT FRAMED IN THE A.Y.2005 - 06 DATED 13/01/2009. SIMILARLY IN THE A.Y.2006 - 07 ALSO ON THE VERY SAME REASONING, ASSESSMENT WAS REOPENED AND IN THE REASON SO RECORDED FOR REOPENING, AO OBSERV ED THAT RECEIPTS IN PURSUANCE OF OFF - SHORE SERVICE CONTRACT ARE IN NATURE OF ROYALTY AND IN PURSUANCE OF THE CONTRACT FOR DEPUTATION OF SPECIALISTS AND OFF - SHORE TRAINING CONTRACTS ARE IN THE NATURE OF FEES FOR TECHNICAL SERVICES. SIMILAR REASONS HAVE BEEN RECORDED DURING THE YEAR UNDER CONSIDERATION. AS THE FACTS AND CIRCUMSTANCES DURING THE YEAR UNDER CONSIDERATION ARE PARAMETERIA, RESPECTFULLY FOLLOWING THE SAME, WE DO NOT FIND ANY MERIT FOR REOPENING OF ASSESSMENT U/S.147 OF THE IT ACT. ITA NO. 1000/MUM/2010 & 1095/MUM/2010 M/S.ATOMSTROYEXPORT 8 1 3 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED WHEREAS THE APPEAL OF THE REVENUE IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 16 / 02 /201 8 S D/ - ( C.N. PRASAD ) ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 16 / 02 /201 8 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FIL E. //TRUE COPY//