M/S Berar Finance Ltd., Nagpur V. Joint CIT Range 1, Nagpur

ITA 105/NAG/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9656 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 07-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Assessee Lawyers: SURESH DURUGKAR
• Keywords: Business expenditure; Retrospective amendment; Question of law; Bad and doubtful debts
• Section: 143(3); 142(1); 145; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI P.K. BANSAL, VICE PRESIDENT AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NO.105/NAG./2015 ( ASSESSMENT YEAR : 201112 ) BERAR FINANCE LTD. C/O AGRAWAL CHHALLANI & CO. 51, NEW COLONY, BEHIND CHHAONI POLICE STATION, NAGPUR 440 001 PAN AAACB5861B APPELLANT V/S JT. COMMISSIONER OF INCOME TAX RANGE1, NAGPUR .... RESPONDENT ASSESSEE BY : SHRI SURESH DURUGKAR REVENUE BY : SHRI A.R. NINAWE DATE OF HEARING 28.06.2017 DATE OF ORDER 30.0 6.2017 O R D E R PER AMARJIT SINGH, J.M. THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST T HE ORDER DATED 12 TH DECEMBER 2014, PASSED BY THE LEARNED COMMISSIONER (APPEALS)- I, NAGPUR, RELEVANT TO THE ASSESSMENT YEAR 201112. 2. GROUNDS RAISED BY THE ASSESSEE ARE REPRODUCED BELOW : 1. THE LEARNED ASSESSING OFFICER ERRED IN LAW AS WE LL AS ON FACTS IN REJECTING THE METHOD OF ACCOUNTING FOLLOWED BY T HE APPELLANT. 2 BERAR FINANCE LTD. 2. THE LEARNED ASSESSING OFFICER ERRED IN LAW AS WE LL AS ON FACTS IN TREATING A SUM OF ` 32,12,198 AS INCOME ACCRUED TO THE APPELLANT AND THUS MAKING AN ADDITION OF ` 32,12,198. 3. THE ADDITION MADE BY THE ASSESSING OFFICER AMOUN TING TO ` 32,12,198 IS UNJUSTIFIED, UNWARRANTED AND BADINLA W. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON 30 TH SEPTEMBER 2011, DECLARING TOTAL INCOME OF ` 5,94,59,063. THE RETURN OF INCOME WAS PROCESSED UND ER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ). THE CASE WAS SELECTED FOR SCRUTINY. NOTICES UNDER SECTION 14 3(2) AND 142(1) OF WERE ISSUED AND SERVED UPON THE ASSESSEE. THE ASSES SEE FIRM IS ENGAGED IN THE ACTIVITIES OF HIRE PURCHASE AND LEAS E FINANCING AND PROVIDING LOANS AND ADVANCES. THE GROSS TURNOVER / RECEIPTS ARE DISCLOSED AT ` 12.77 CRORE COMPARED TO ` 9.55 CRORE DISCLOSED IN THE PREVIOUS YEAR. THE ASSESSING OFFICER OBSERVED THAT AS PER NOTE NO.A7, OF THE SCHEDULE15 OF THE AUDITED ACCOUNTS, THE ASS ESSEE ADOPTED REVENUE RECOGNITION METHOD AS UNDER: 'I. REVENUE IS RECOGNIZED TO THE EXTENT THAT IT IS PROBABLE THAT THE ECONOMIC BENEFITS WILL FLOW TO THE COMPANY AND THE REVENUE CAN BE RELIABLY MEASURED. II. INTEREST ON LOANS IN RECOGNIZED UNDER THE INTER NAL RATE OF RETURN. III. INCOME RECOGNIZED AND REMAINING UNREALIZATION AFTER INSTALMENTS BECOME OVERDUE FOR SIX MONTHS OR MORE I N CASE OF SECURED LOANS ARE REVERSED AND ARE ACCOUNTED AS INC OME WHEN THESE ARE ACTUALLY REALIZED. 3 BERAR FINANCE LTD. IV. GAIN OR LOSS ARISING ON SECURITIZATION OF ASSET S IS RECOGNIZED IN THE YEAR OF SECURITIZATION. V. DIVIDEND IS RECOGNIZED AS INCOME WHEN RIGHT TO R ECEIVE PAYMENT IS ESTABLISHED BY THE BALANCE SHEET DATE. VI. THE PROFIT/LOSS ON THE SALE OF INVESTMENTS IS D EALT WITH AT THE TIME OF ACTUAL SALE/ REDEMPTION.' 4. THE ASSESSING OFFICER REJECTING THE METHOD OF ACCOU NTING FOLLOWED BY THE ASSESSEE ADDED A SUM OF ` 32,12,198 BEING INTEREST ON SUCH ADVANCES REVERSED BY THE ASSESSEE TO THE TOTAL INCOME. 5. ON APPEAL, THE LEARNED COMMISSIONER (APPEALS) CONFI RMED THE ORDER OF THE ASSESSING OFFICER BY OBSERVING AS FOLL OWS: 5.0 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE A.R. OF THE APPELLANT, THE ORDER OF THE AO AND THE JUDICIAL DECISIONS RELIED UPON BOTH SIDES. 5.1 ON CAREFUL EXAMINATION OF THE FACTS, IT IS SEEN THAT THE A.O. ADDED AN AMOUNT OF ` 32,22,198, BEING ACCRUED INTEREST, ON NPA ADVANCES. THE APPELLANT IS A NONBANKING FINANCE CO MPANY (NBFC), REGISTERED WITH THE RESERVE BANK OF INDIA ( RBI). THE APPELLANT HAD ADVANCED CERTAIN LOANS UPON WHICH IT DID NOT RECEIVE INTEREST FOR MORE THAN 6 MONTHS. THE AR CON TENDED THAT THE APPELLANT DID NOT SHOW THE INTEREST AS ITS INCO ME WHEN THE ACCRUED INTEREST HAS NOT BEEN PAID TO IT BY THE DEB TOR CONTINUOUSLY FOR 6 MONTHS, TREATING THE SAID ADVANC E AS NPA. THUS, AS PER THE RBI DIRECTIONS, THE APPELLANT REVE RSED THE INTEREST INCOME OF RS. 32,22,198/- BEING THE UNREAL ISED NPA INTEREST OVER DUE FOR THE PERIOD OF 6 MONTHS AND MO RE. THE AR OF THE APPELLANT FURTHER CONTENDED THAT THE METHOD BEI NG FOLLOWED BY THE APPELLANT HAS BEEN ACCEPTED BY THE DEPARTMEN T IN EARLIER YEARS. THE AR OF THE APPELLANT HAS ALSO REFERRED TO THE RELEVANT RBI DIRECTIONS IN THIS REGARD IN HIS SUBMISSIONS. T HE AR FURTHER CONTENDED THAT THE APPELLANT COMPANY FOLLOW THE ACC OUNTING STANDARD PRESCRIBED U/S 211 (C) OF THE COMPANIES AC T, 1956. THE AR STATED THAT THE APPELLANT COMPANY BEING IN LENDI NG BUSINESS, IT IS MANDATORY FOR IT TO ADOPT THE AS-9 ACCOUNTING ST ANDARD FOR ITS REVENUE RECOGNITION. THUS, THE AR ARGUED THAT SINCE THERE IS NO 4 BERAR FINANCE LTD. REASONABLE CERTAINTY ABOUT THE COLLECTABILITY OF IN TEREST ON ADVANCES RECOGNISED AS NPA, THE SAME HAS NOT BEEN R ECOGNISED BY THE APPELLANT. THE AR FURTHER CONTENDED THAT REC OGNISING UNREALISED INTEREST WILL TANTAMOUNT TO NOT ADHERING TO THE ACCOUNTING STANDARD PRESCRIBED U/S 211 (3C) OF COMP ANIES ACT. THUS, ACCORDING TO THE AR, NON-COMPLIANCE TO AS-9 G OES AGAINST THE BASIC INTENT OF SUB-SECTION 2 OF SECTION 145 OF THE INCOME-TAX ACT, 1961. THE AR HAS RELIED ON THE DECISION OF APE X COURT INT EH CASE OF SHOORJI VALLABHDAS & CO. 46 ITR 144. THE A. R. HAS ALSO RELIED ON THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF ELGI FINANCE LTD., 239 ITR 357 (MAD.). 5.2 THE DECISION OF THE HON'BLE SUPREME COURT IN TH E CASE OF SOUTHERN TECHNOLOGIES LTD.; 320 ITR 577 (SC) IS DIR ECTLY APPLICABLE TO THE ISSUE IN HAND, WHEREIN THE APEX COURT HAS HE LD IN FAVOUR OF THE REVENUE. THE RELEVANT EXTRACTS OF THE DECISION IS REPRODUCED BELOW, FOR BETTER APPRECIATION OF FACTS: 'NON-BANKING-FINANCIAL INSTITUTIONS ('NBFCS') FACE A SERIOUS SETBACK AFTER THE JUDGMENT OF THE SUPREME COURT THI S MONDAY (11 JANUARY 2010) IN SOUTHERN TECHNOLOGIES LTD, V. JCIT . THIS BLOG HAS DISCUSSED A LONG-STANDING CONTROVERSY IN INDIAN LAW ON THE TREATMENT OF 'STICKY' ADVANCES. IT IS USEFUL TO BRI EFLY RECAPITULATE THE CONTOURS OF THIS CONTROVERSY BEFORE CONSIDERING THE IMPACT OF THE SUPREME COURT'S JUDGMENT IN SOUTHERN TECHNOLOGI ES. FOUR CIRCUMSTANCES ARE RELEVANT IN THIS CONNECTION - THE JURISPRUDENCE OF THE SUPREME COURT ON THE 'REAL INCOME THEORY', A SE T OF CIRCULARS ISSUED BY THE CBDT ON THE TREATMENT OF 'STICKY' INT EREST, THE PROVISIONS OF THE INCOME TAX ACT, 1961, AND DIRECTI ONS ISSUED BY THE RBI IN 1998 ON THE TREATMENT OF NPAS. OF THE ENTIRE SUM OF MONEY THAT IS LENT TO VARIOUS BORROWERS BY BANKS AND NBFCS, A SIGNIFICANT PART OF THE INTEREST PAYABLE IS CONSIDERED 'STICKY', FOR IT REPRESENTS INTEREST ON PRINCIPAL THAT IS UNLIKELY TO BE RECOVERED, AND WHICH THE BORROWER HA S NOT SERVICED FOR SOME LENGTH OF TIME. UNDER CERTAIN CIRCUMSTANCE S, THESE STICKY ADVANCES ARE CONSIDERED 'NON-PERFORMING ASSETS' (NP A) AND IN OTHER CASES, ARE WRITTEN OFF ENTIRELY AS BAD DEBTS. THE LATTER CASE PRESENTS NO DIFFICULTY, SINCE A BAD DEBT IS A DEDUC TIBLE BUSINESS EXPENDITURE, PROVIDED IT IS WRITTEN OFF BONA FIDE. HOWEVER, ASSESSEES ARGUED THAT STICKY LOANS DO NOT CONSTITUT E 'INCOME' IN THE FIRST PLACE, AND RELIED FOR THIS PURPOSE ON THE 'REAL INCOME THEORY', WHICH POSITS THAT THE CLASSIFICATION OF A RECEIPT AS AN INCOME MUST BEAR SOME RELATIONSHIP TO COMMERCIAL RE ALITY. IN 1952, THE CBDT ISSUED A CIRCULAR CLARIFYING THAT IN TEREST ENTERED IN THE SUSPENSE ACCOUNT BY AN ASSESSEE IS NOT PART OF TOTAL INCOME, BECAUSE OF THE 'EXTREME UNLIKELIHOOD' IN RECOVERING THE PRINCIPAL. THIS CIRCULAR WAS WITHDRAWN IN 1978. IN 1986, THE S UPREME COURT, IN STATE BANK OF TRAVANCORE V. CIT, PARTLY RELIED O N THIS WITHDRAWAL 5 BERAR FINANCE LTD. TO HOLD THAT THE REAL INCOME THEORY DOES NOT SUPPOR T THE PROPOSITION THAT STICKY INTEREST IS NON-TAXABLE. HO WEVER, THE CBDT, IN 1984, HAD ISSUED ANOTHER CIRCULAR CLARIFYING THA T INTEREST ON LOANS THAT HAVE NOT BEEN REPAID FOR THREE SUCCESSIVE YEAR S IS NOT TAXABLE. AS THE COURT IN SBT HAD NOT NOTICED THIS CIRCULAR, THE CASE WAS OVERRULED IN 1999 AND AGAIN IN 2006. HOWEVER, WHAT IS SIGNIFICANT IS THAT THIS WAS NOT AN UNQUALIFIED APPROVAL OF THE REAL INCOME THEORY, BUT RATHER A DECISION THAT THE PARTICULAR C IRCULARS APPLIED TO BANKS TO THE EXTENT SPECIFIED IN THOSE CIRCULARS. A SERIES OF RETROSPECTIVE AMENDMENTS TO THE INCOME TAX ACT ADDED TO THE LACK OF CLARITY IN THIS AREA. S. 36(L)(VII) OF THE ACT ORIGINALLY PROVIDED THAT THE AMOUNT OF ANY BAD DEBT WRITTEN OF F IN THE ACCOUNTS OF THE ASSESSEE AS IRRECOVERABLE IS A DEDU CTIBLE EXPENSE. HOWEVER, AN EXPLANATION WAS ADDED TO THIS PROVISION IN 2001 WITH RETROSPECTIVE EFFECT, PROVIDING THAT THIS DOES NOT INCLUDE A 'PROVISION' FOR BAD DEBTS. IN 1997, AN AMENDMENT WI TH RETROSPECTIVE EFFECT FROM 1989 ADDED CLAUSE VII(A), WHICH PROVIDED THAT A SCHEDULED BANK COULD DEDUCT PROVISIONS FOR B AD AND DOUBTFUL DEBTS UPTO A SPECIFIED PERCENTAGE. S. 43D WAS ALSO AMENDED IN 1999 TO PROVIDE THAT INCOME IN RELATION TO CATEGORI ES OF BAD AND DOUBTFUL DEBTS PRESCRIBED BY THE RESERVE BANK OF IN DIA ARE CHARGEABLE TO TAX ONLY WHEN THE INCOME IS ACTUALLY RECEIVED BY THE SCHEDULED BANK OR CREDITED TO THE PROFIT & LOSS ACC OUNT IN ITS BOOKS. NOTABLY, NEITHER S. 36(L)(VIIA) NOR S. 43D A PPLIES TO NBFCS. TO COMPLETE THE ACCOUNT OF THE CIRCUMSTANCES THAT L ED TO SOUTHERN TECHNOLOGIES, IT IS RELEVANT TO REFER TO WHAT TURNE D OUT TO BE THE CRUX OF THE CONTROVERSY - THE EFFECT OF THE 1998 DI RECTIONS OF THE RBL IN THESE DIRECTIONS, THE RBI DEFINED AN NPA AS 'ANY ASSET IN RESPECT OF WHICH INTEREST HAS REMAINED DUE FOR MORE THAN SIX MONTHS', AND DIRECTED NBFCS TO RECOGNISE THESE ASSE TS AS INCOME ONLY WHEN INCOME IS ACTUALLY RECEIVED. BY VIRTUE OF S. 45Q OF THE RBI ACT, THESE DIRECTIONS OVERRIDE ALL LAWS TO THE CONTRARY. IN SOUTHERN TECHNOLOGIES, NBFCS RELIED ON ALL THESE CIRCUMSTANCES TO CHALLENGE THE TAXABILITY OF NPAS AND OTHER STICK Y ASSETS. IN PARTICULAR, ASSESSEES ARGUED THAT THE BENEFICIAL PR OVISIONS OF S. 36(L)(VIIA) AND S. 43D MUST BE CONSTRUED TO BE APPL ICABLE TO NBFCS AS WELL, AND THAT CONFINING THEIR APPLICATION TO BA NKS VIOLATES ART. 14 OF THE CONSTITUTION. IN SHORT, NBFCS CONTENDED T HAT THEY WERE ON EXACTLY THE SAME FOOTING AS BANKS FOR THE PURPOS ES OF THE TREATMENT OF NPAS, AND THAT THE DIFFERENTIA BETWEEN BANKS AND NBFCS IN THIS PROVISION LACKS ANY RATIONAL NEXUS. T HE ASSESSEES ALSO RELIED ON THE REAL INCOME THEORY TO SUGGEST TH AT STICKY INTEREST IS NON-TAXABLE. THE SUPREME COURT REJECTED ALL THES E CONTENTIONS AND HELD THAT SUCH INCOME IS TAXABLE. THE FOLLOWING IS A SUMMARY OF THE DECISION OF THE C OURT: 6 BERAR FINANCE LTD. A) THE RBI DIRECTIONS DO NOT HAVE ANY RELEVANCE TO THE TREATMENT OF TAXABLE INCOME, FOR THE RBI ACT AND THE IT ACT O PERATE IN DIFFERENT FIELDS. THE RBI ACT OVERRIDES THE COMPANI ES ACT, 1956, TO THE EXTENT OF PRESENTATION OF ACCOUNTS, BUT DOES NO T OVERRIDE THE INCOME TAX ACT. (B) THE DISTINCTION BETWEEN BANKS AND XBFCS IN SS. 36(LXVIIA) AND 43D IS NOT VIOLATIVE OF ART. 14 OF THE CONSTITUTION . (C) THE 'REAL INCOME' THEORY REQUIRES COURTS TO REC OGNISE THAT A MERE PROVISION FOR BAD AND DOUBTFUL DOUBTS IS NOT A 'REAL' EXPENSE THAT MAY BE DEDUCTED. (D) SECTION 37 DOES NOT APPLY TO CASES THAT FALL WI THIN S. 36 BUT ARE SPECIFICALLY EXCLUDED BY AN EXPLANATION. THIS DECISION APPEARS TO HAVE SETTLED THE LATEST CH APTER IN A LONG- STANDING AND COMPLEX CONTROVERSY ON THE TREATMENT O F STICKY INTEREST.' 5.3 THUS, HAVING CONSIDERED THE RATIO LAID DOWN BY THE APEX COURT ON THE ISSUE AND THE OTHER JUDICIAL DECISIONS RELIE D UPON BY THE AO AND THE CIRCULAR OF THE CBDT, I DECLINE TO INTERFER E WITH THE ORDER OF THE AO. I, THEREFORE, UPHOLD THE ACTION OF THE AO T O TAX THE NPA INTEREST ACCRUED TO THE APPELLANT COMPANY. THE ASSESSEE BEING AGGRIEVED BY THE AFORESAID ORDER OF THE LEARNED COMMISSIONER (APPEALS), FILED APPEAL BEFORE THE TRIBUNAL. 6. BEFORE US, THE LEARNED COUNSEL FOR ASSESSEE SUBMITTE D THAT THE ASSESSEE COMPANY FOR THE ASSESSMENT YEAR UNDER CONS IDERATION FILED ITS RETURN DECLARING INCOME AT ` 5,94,93,063, WHICH HAS BEEN ASSESSED ON A TOTAL INCOME OF ` 6,26,81,260 UNDER SECTION 143(3) OF THE ACT ON 24 TH OCTOBER 2013. HE SUBMITTED THAT THE ASSESSEE COMP ANY RECOGNISES THE REVENUE AFTER REVERSING THE INTEREST ON THE INSTALLMENTS BECOME OVER DUE FOR SIX MONTHS AND MORE AND SUCH IN TEREST IS ACCOUNTED FOR AS INCOME AS AND WHEN THEY ARE ACTUAL LY REALISED. THE 7 BERAR FINANCE LTD. LEARNED COUNSEL FOR ASSESSEE FURTHER SUBMITTED THAT THE ASSESSEE COMPANY IS FOLLOWING THE SAME METHOD OF ACCOUNTING YEARAFTERYEAR AND THE SAME IS ACCEPTED BY THE DEPARTMENT IN EARLI ER YEARS. HE SUBMITTED THAT THE ASSESSING OFFICER REJECTING THE METHOD OF ACCOUNTING ADDED A SUM OF ` 32,12,198, BEING INTEREST ON SUCH ADVANCES REVERSED BY THE ASSESSEE TO THE INCOME OF THE ASSESSEE COMPANY. THE LEARNED COUNSEL, HOWEVER, SUBMITTED TH AT THE ISSUE IS COVERED BY THE DECISION OF THE HONBLE JURISDICTION AL HIGH COURT IN CIT V/S KEC HOLDINGS LTD., 330 ITR 440 (BOM.). 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE AUTHORITIES BELOW. 8. HAVING HEARD THE RIVAL CONTENTIONS AND ON A PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW AND THE CASE LAW RELIED UP ON BY THE LEARNED COUNSEL FOR ASSESSEE, WE FIND THAT THE ISSUE FOR OU R ADJUDICATION IS COVERED BY THE DECISION OF THE HONBLE JURISDICTION AL HIGH COURT IN KEC HOLDINGS LTD. (SUPRA), WHEREIN THE HONBLE BOMBAY HI GH COURT OBSERVED AS FOLLOWS: 9] WE DO NOT FIND THAT THE TRIBUNAL HAS EITHER MIS DIRECTED ITSELF IN LAW OR ITS ORDER CAN BE TERMED AS PERVERSE WARRA NTING INTERFERENCE IN OUR APPELLATE JURISDICTION. WE FIND THAT THE VIEW TAKEN BY THE TRIBUNAL ACCORDS WITH THE RESERVE BANK OF INDIA GUIDELINES AND WHICH ARE NOT IN ANY WAY IN CONFLICT WITH THE INCOME TAX ACT, 1961, THE HON'BLE SUPREME COURT HAS HELD IN THE CASE OF UCO BANK THAT THE INTEREST INCOME WOULD HAV E BEEN BROUGHT TO THE PROFIT AND LOSS ACCOUNT PROVIDED IT WAS ACTUALLY 8 BERAR FINANCE LTD. REALIZED, THAT IN CASE OF NATIONALIZED BANK IT TREA TED SOMETHING WHICH IS DOUBTFUL, AND THEREFORE, KEPT IT IN A SUSP ENSE ACCOUNT, WAS HELD TO BE A PERMISSIBLE EXERCISE. IN RESPECT O F THE LOANS WHICH ARE ADVANCED, RECOVERY OF SOME OF THEM IF CON SIDERED DOUBTFUL, THEN, EVEN THE INTEREST ON THE LOANS ADVA NCED MAY NOT BE REALIZED. THAT IS HOW THE AMOUNT IS NOT BROUGHT TO THE PROFIT AND LOSS ACCOUNT BECAUSE THEY ARE NOT LIKELY TO BE REALIZED BY THE BANK OR A NBFC AS WELL. IT IS PERMISSIBLE THEREFORE TO DISCLOSE OR TO SHOW THEM AS INCOME IN ASSESSMENT YEAR IN WHICH EITHER THE INTEREST AMOUNT OR PART OF IT IS RECOVERED. THE TRI BUNAL IN THIS CASE, NAMELY, OF THE ASSESSEE BEFORE US, HAS PRECIS ELY FOLLOWED THIS COURSE. WE DO NOT FIND THAT THE COURSE PERMITT ED AND UPHELD BY THE TRIBUNAL IS IN ANY WAY IN CONFLICT WITH ANY LEGAL PROVISIONS OR THE SETTLED PRINCIPLES. RATHER AS HELD BY US, IT IS IN ACCORDANCE WITH THE SAME. ONCE THE VIEW TAKEN BY THE TRIBUNAL WAS POSSIBLE AND IN THE GIVEN FACTS AND CIRCUMSTANCES THE INCOME HAS NOT BEEN REALIZED BY THE ASSESSEE, THE ADDITION WAS RIGHTLY DELETED. WE, THEREFORE, DO NOT FIND THAT THE APPEAL RAISES ANY SUBSTANTIAL QUESTION OF LAW. IT IS ACCORDINGLY DISMISSED. NO COSTS. 9. RESPECTFULLY FOLLOWING THE AFORESAID OBSERVATION OF THE HONBLE JURISDICTIONAL HIGH COURT, WE SET ASIDE THE IMPUGNE D ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) AND ALLOW THE GR OUND RAISED BY THE ASSESSEE. 10. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.06.2017 SD/ - P.K. BANSAL VICE PRESIDENT SD/ - AMARJIT SINGH JUDICIAL MEMBER NAGPUR, DATED: 30.06.2017 9 BERAR FINANCE LTD. COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, NAGPUR CITY CONCERNED; (5) THE DR, ITAT, NAGPUR; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT.REGISTRAR) ITAT, NAGPUR