Addl.CIT, Special Range-4, , New Delhi V. Infres Methodex Pvt. Ltd., New Delhi

ITA 1126/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4616 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2021
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 15-02-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANIMA
• Assessee Lawyers: DR RAKESH GUPTA
• Keywords: Depreciation; Earning of tax free income; Rule 8D
• Section: 14A; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C: NEW DELHI (THROUGH VIDEO CONFERENCING) BEFORE, SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO.1126/DEL/2018 (ASSESSMENT YEAR 2014-15) ADD. CIT, SPECIAL RANGE-4, NEW DELHI. VS. M/S INFRES METHODEX PVT. LIMITED, BLOCK B-1, PLOT NO.D-7, MOHAN CO-OP INDUSTRIAL ESTATE, MATHURA ROAD, NEW DELHI-110 044. PAN AABCI 1964R (APPELLANT) (RESPONDENT) APPELLANT BY MS. ANIMA, SR. DR RESPONDENT BY DR. RAKESH GUPTA, ADV. DATE OF HEARING 13.07.2021 DATE OF PRONOUNCEMENT 30.09.2021 ORDER PER SUDHANSHU SRIVASTAVA, JM: THIS APPEAL IS PREFERRED BY THE DEPARTMENT AGAINST ORDER DATED 14.11. 20217 PASSED BY THE LEARNED COMMISSION ER OF INCOME TAX (APPEALS)-35, NEW DELHI {CIT(A)} AND PERTAINS TO ASSESSMENT YEAR 2014-15. 2 ITA NO.1126/DEL/2018 ACIT VS. INFRES METHODEX PVT. L TD., 2.0 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF PRODUCTION, S ALES AND MAINTENANCE OF OFFICE AUTOMATION EQUIPMENT. THE RET URN OF INCOME WAS FILED DECLARING AN INCOME OF RS.16,41,93,722/-. THE CASE WAS SELECTED FOR SCRUTINY AND DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, THE ASSESSING OFFICER (AO) OBSERVED TH AT THE ASSESSEE HAD DEBITED AN AMOUNT OF RS.4,69,39,754/- ON ACCOUN T OF POST SALES CUSTOMERS SUPPORT AND WARRANTIES IN THE PROFI T AND LOSS ACCOUNT. THE ASSESSING OFFICER OBSERVED THAT THESE EXPENSES WERE DEBITED ON PROVISIONAL AND ESTIMATED BASIS AND, THE REFORE, THE ASSESSEE WAS REQUIRED TO EXPLAIN THE BASIS FOR CREAT ING THESE PROVISIONS WITH THE HELP OF SUPPORTING DOCUMENTS. TH EREAFTER, CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE AS SESSING OFFICER CAME TO THE CONCLUSION THAT THE ESTIMATES MADE BY T HE ASSESSEE WERE NOT RELIABLE FOR THE REASON, THAT AS PER THE AS SESSING OFFICER, THE ASSESSEE HAD NO CONSISTENT BASIS FOR MAKING THE PROVISION FOR WARRANTY. THE ASSESSING OFFICER PROCEEDED TO DISALLO W THE ENTIRE AMOUNT OF RS.4,69,39,754/-. THE ASSESSING OFFICER A LSO MADE CERTAIN OTHER ADDITIONS PERTAINING TO (I) CLAIM OF DEPRECIATION 3 ITA NO.1126/DEL/2018 ACIT VS. INFRES METHODEX PVT. L TD., AMOUNTING TO RS.60,557/- (II) DISALLOWANCE U/S 14A O F THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) AMOUNT ING TO RS.2,73,665/- (III) DISALLOWANCE OF CLUB EXPENSES AM OUNTING TO RS.55,226/- AND COMPLETED THE ASSESSMENT AT AN INCO ME OF RS.21,15,22,960/-. 2.1 AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) CHALLENGING THE ADDITIONS/DISALLOWANCES A ND THE LD. CIT(A) WAS PLEASED TO DELETE THE ADDITION OF RS.4,6 9,39,754/- ON ACCOUNT OF PROVISION FOR WARRANTY. THE LD. CIT(A) A LSO RESTRICTED THE DISALLOWANCE MADE U/S 14A FROM RS.2,73,665/- TO RS.1 ,01,352/-. 2.2 NOW, AGGRIEVED, THE DEPARTMENT HAS APPROA CHED THE TRIBUNAL AND HAS CHALLENGED THE DELETION MADE BY TH E LD. CIT(A) BY RAISING THE FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LD CIT(A) ERRED IN LAW IN DELETING THE DISALLOWANCE OF RS. RS. 4,69,39,754/- MADE BY THE ASSESSING OFFICER ON ACCO UNT OF WARRANTY PROVISION MADE BY THE ASSESSEE IN THE PROF IT AND LOSS ACCOUNT, WHICH IS NOT PROVED TO BE COMPUTED ON ANY SCIENTIFIC BASIS ON PAST RECORDS. THE CIT(A) HAS NOT DEALT AT ALL THE 4 ITA NO.1126/DEL/2018 ACIT VS. INFRES METHODEX PVT. L TD., INCONSISTENCIES IN CREATION OF PROVISION FROM YEAR TO YEAR POINTED OUT IN DETAIL IN THE ASSESSMENT ORDER IN PARA 8 OF THE ORDER. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LD CIT(A) ERRED IN LAW IN RESTRICTING THE DISALLOWANCE FROM RS. 2,73,665/- TO RS. 1,01,352/- MADE BY THE ASSESSING OFFICER U/S 14A IN ACCORDANCE WITH THE RULE 8D OF INCOME TAX RU LES, 1962. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) ERRED IN LAW AS LD CIT(A) HAS NOT GIVEN ANY BASIS FOR DELETING THE DISALLOWANCE OF INTEREST EXPENSES AND CHANGING THE COMPUTATION OF DISALLOWANCE OF INTEREST U/S 14A R.W .R 8 D(2)(III) OF INCOME TAX RULES, 1962. 4. WHETHER FOR APPLICATION OF SECTION 14A(1 ) OF THE INCOME TAX ACT, 1961 THE PURPOSE FOR MAKING INVESTMENT AND EARNING TAX EXEMPT INCOME THEREON IS AN ESSENTIAL LEGAL REQ UIREMENT. 5. WHETHER THE TERM IN RELATION TO AS USE D IN SECTION 14A OF THE ACT CONTEMPLATES A DIRECT AND PROXIMATE NEXU S BETWEEN EXPENDITURE INCURRED AND EARNING OF EXEMPT INCOM E 6. WHETHER THE CIT(A) IS LEGALLY JUSTIFIED IN N OT UPHOLDING DISALLOWANCE U/S 14A OF THE INCOME TAX ACT, 1961 WI THOUT CONSIDERING LEGISLATIVE INTENT OF INTRODUCING SECTI ON 14A BY THE FINANCE ACT, 2001 AS CLARIFIED BY CBDT CIRCULAR NO. 5/2014 DATED 10.02.2014. 7. WHETHER THE CIT(A) IS LEGALLY JUSTIFIED IN NOT UPHOLDING DISALLOWANCE U/S 14A OF THE INCOME TAX ACT, 1961 WI THOUT CONSIDERING A LEGAL PRINCIPLE THAT ALLOWABILITY/DIS ALLOWABILITY OF EXPENDITURE UNDER THE ACT IS NOT CONDITIONAL UPON T HE EARNING OF 5 ITA NO.1126/DEL/2018 ACIT VS. INFRES METHODEX PVT. L TD., INCOME AS UPHELD BY HONBLE SUPREME COURT IN THE CA SE OF CIT VS. RAJENDRA PRASAD MOODY (1978) 115 ITR 519. 8. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, VAR Y, OMIT OR SUBSTITUTE ANY OF THE AFORESAID GROUNDS OF APPEAL A T ANY TIME BEFORE OR AT THE TIME OF HEARING OF APPEAL. 3.0 THE LD. SR. DEPARTMENTAL REPRESENTATIVE (D R) SUBMITTED THAT THE PROVISION OF WARRANTY HAD BEEN WRONGLY DELET ED BY THE LD. CIT(A) BECAUSE THE ASSESSEE HAD NO CONSISTENT BASIS FOR MAKING THE PROVISION FOR WARRANTY. WHILE REFERRING TO PARA-8 OF THE ASSESSMENT ORDER, THE LD. SR. DR SUBMITTED THAT THE PROVISION FOR WARRANTY AS PERCENTAGE OF SALES HAD INCREASED TO 12.84% IN THE ASSESSMENT YEAR UNDER CONSIDERATION AS COMPARED TO 6.60% IN TH E IMMEDIATELY PRECEDING ASSESSMENT YEAR. SHE ALSO REFERRED TO THE OBSERVATIONS OF THE ASSESSING OFFICER THAT DURING THE FINANCIAL YEA R 2012-13, THERE HAD BEEN A REVERSAL OF PROVISION FOR WARRANTY AMOUNT ING TO RS.3,60,03,317/- INDICATING THAT THE ESTIMATES MADE BY THE ASSESSEE WERE NOT RELIABLE. THE LD. SR. DR ARGUED T HAT THE ESTIMATES MADE BY THE ASSESSEE FOR MAKING THE IMPUGNED PROVIS ION WERE 6 ITA NO.1126/DEL/2018 ACIT VS. INFRES METHODEX PVT. L TD., NEITHER ON A SCIENTIFIC BASIS NOR RELIABLE AND, THE REFORE, THE ASSESSING OFFICER HAD RIGHTLY MADE THE DISALLOWANCE. 3.1 WITH REFERENCE TO THE DISALLOWANCE U/S 14 A OF THE ACT, SHE SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 4.0 PER CONTRA, THE LD. AUTHORIZED REPRE SENTATIVE (AR) PLACED RELIANCE ON THE FINDINGS OF THE LD. CIT(A) A ND WHILE VEHEMENTLY SUPPORTING THEM SUBMITTED THAT THE LD. C IT(A) HAD RIGHTLY DELETED THE ADDITIONS/DISALLOWANCES. 5.0 WE HAVE HEARD RIVAL SUBMISSIONS AND HAV E ALSO PERUSED THE RECORDS. AS FAR AS THE ISSUE OF DISALLOWANCE OF PROVISION FOR WARRANTY IS CONCERNED, IT IS SEEN THAT THE ASSESSING OFFICER HAS MADE THE ADDITION AFTER OBSERVING THAT THE ESTIMATE S MADE BY THE ASSESSEE FOR MAKING THE IMPUGNED PROVISIONS WERE NE ITHER ON A SCIENTIFIC BASIS NOR WERE RELIABLE. THE ASSESSING OF FICER, WHILE MAKING THE DISALLOWANCE, HAS PLACED RELIANCE ON THE JUDGMENT OF THE HONBLE APEX COURT IN ROTORK CONTROLS INDIA PVT . LTD. REPORTED 7 ITA NO.1126/DEL/2018 ACIT VS. INFRES METHODEX PVT. L TD., IN 314 ITR 62(SC) ON THE GROUND THAT THE ASSESSEE C OMPANY DID NOT FULFILL THE FOLLOWING CONDITIONS:- (I) AN OBLIGATION TO INCUR EXPENSES SHOULD HAVE BEEN AR ISEN; (II) THE ESTIMATE SHOULD BE ON SCIENTIFIC BASIS; AND (III) THE ESTIMATE SHOULD BE ON RELIABLE BASED ON EXPERIE NCE AND HISTORICAL TREND. 5.1 IT WAS THE ASSESSEES SUBMISSIONS BEFORE THE LOWER AUTHORITIES THAT THE PROVISION CREATED AS A PERCENT AGE OF SALES WERE DIFFERENT IN FINANCIAL YEARS 2011-12, 2012-13 AND 2013-14 FOR THE REASON THAT THE WARRANTY PERIOD RANGED BETWEEN ONE Y EAR TO THREE YEARS DEPENDING ON THE MODEL OF THE MACHINE AND, TH EREFORE, THE PROVISION MADE FOR THE MACHINE WHOSE WARRANTY EXTEND ED FOR 2 TO 3 YEARS IS TO BE CARRIED FORWARD AND IS TO BE ADDED TO THE PROVISION OF THE CURRENT YEAR AND, THEREFORE, BECAUSE OF THIS RE ASON, THE PROVISION TO SALES RATIO WAS NOT CONSISTENT AND THAT IT WAS NOT BECAUSE OF ANY CHANGE IN THE BASIS OF PRINCIPLES ON WHICH THE PROVISION IS MADE. IT WAS ALSO SUBMITTED BEFORE THE LOWER AUTHORITIES THAT THE ASSESSEE COMPANY PROVIDED FREE REPLACEMENT OF 8 ITA NO.1126/DEL/2018 ACIT VS. INFRES METHODEX PVT. L TD., PARTS AGAINST THE MANUFACTURING DEFECTS AND ALSO PR OVIDED PREVENTIVE MAINTENANCE CHECKS FOR THE EQUIPMENT S OLD DURING THE PERIOD RANGING FROM 1 TO 3 YEARS AND, ACCORDINGLY, PROVISION WAS MADE FOR THE COSTS LIKELY TO BE INCURRED DURING THE WARRANTY PERIOD ON A CONSISTENT BASIS THAT IS MATERIAL COST BEING E STIMATED AT 1 TO 3% OF SALE VALUE FOR EACH YEAR AND LABOUR COST AT 7 5% OF THE STANDARD LABOUR COST. IT WAS ALSO THE ASSESSEE SUBMI SSIONS BEFORE THE LOWER AUTHORITIES THAT THE PROVISION IS ESTIMAT ED ON PAST TRENDS AND EXPERIENCE AND IS WORKED OUT EVERY YEAR. IT WAS A LSO SUBMITTED BEFORE THE LOWER AUTHORITIES THAT IF THE PROVISION MADE IN EARLIER YEAR IS MORE OR LESS, DIFFERENCE IN THE AMOUNT IS A CCOUNTED THROUGH PROFIT & LOSS ACCOUNT AND THAT THIS PRACTICE IS BEI NG FOLLOWED CONSISTENTLY BY THE COMPANY SINCE THE PAST MANY YEA RS. THE ASSESSEE HAD ALSO SUBMITTED AN ILLUSTRATIVE CALCULA TION SHEET FOR THE PROVISION MADE ALONG WITH PURCHASE ORDERS BEFORE THE LOWER AUTHORITIES IN SUPPORT OF ITS WORKING AND CLAIM. 5.2 ALTHOUGH, THE ASSESSING OFFICER DID NOT FIND THE EXPLANATION AND SUBMISSIONS OF THE ASSESSEE SATISFA CTORY, THE LD. 9 ITA NO.1126/DEL/2018 ACIT VS. INFRES METHODEX PVT. L TD., CIT(A) ACCEPTED THE ASSESSEES SUBMISSIONS AND WORK ING AS BEING CORRECT AND ALLOWED THE CLAIM OF THE ASSESSEE. HOWE VER, A PERUSAL OF THE ORDER OF THE LD. CIT(A) SHOWS THAT HE HAS ACCEPT ED THE SUBMISSIONS OF THE ASSESSEE WITHOUT ACTUALLY EXAMINI NG THE WEIGHT OF THE SUBMISSIONS OF THE ASSESSEE. THE LD. CIT(A) HAS SIMPLY ACCEPTED THE SUBMISSIONS PROVIDED BY THE ASSESSEE A ND AFTER DULY REPRODUCING THE SUBMISSIONS IN THE IMPUGNED ORDER H AS NOTED THAT IN VIEW OF THE SUBMISSIONS MADE BY THE ASSESSEE AND THE CASE LAWS CITED AND IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE IMPUGNED DISALLOWANCE IS DELETED. HOWEVER, WHILE MAK ING THE DELETION, THE LD. CIT(A) HAS NOT GIVEN ANY REASONIN G AS TO WHY THE SUBMISSIONS OF THE ASSESSEE WERE FOUND TO BE SATISF ACTORY FOR THE PURPOSE OF MAKING PROVISION OF WARRANTIES. THE LD. C IT(A) HAS NOT ADJUDICATED THE ISSUE BEFORE HIM BY EXAMINING THE V ARIOUS DETAILS AND DOCUMENTS SUBMITTED BY THE ASSESSEE AND HAS SIM PLY ACCEPTED THE CONTENTIONS OF THE ASSESSEE WITHOUT RETURNING A FINDING ON FACT. IN SUCH A SITUATION, WE DEEM IT APPROPRIATE TO REST ORE THIS ISSUE TO THE FILE OF THE LD. CIT(A) FOR CONSIDERING THE ISSU E AFRESH AND, THEREAFTER, ADJUDICATE ON THE ISSUE BY PASSING A SP EAKING ORDER AFTER 10 ITA NO.1126/DEL/2018 ACIT VS. INFRES METHODEX PVT. L TD., GIVING PROPER OPPORTUNITY TO THE ASSESSEE. ACCORDI NGLY, THE DEPARTMENT SUCCEEDS ON GROUND NO.1 AND THE SAME STA NDS ALLOWED FOR STATISTICAL PURPOSE. 5.3 AS FAR AS THE ISSUE OF DELETION OF DEL ETION U/S 14A OF THE ACT IS CONCERNED, IT IS SEEN THAT DURING THE YEAR U NDER CONSIDERATION, THE ASSESSEE HAD EARNED DIVIDEND INC OME AMOUNTING TO RS.20,21,500/- FROM EQUITY SHARES AND MUTUAL FUN DS. THE ASSESSEE HAD CLAIMED EXEMPTION OF THIS INCOME U/S 1 0(34) & 10(35) OF THE ACT AND HAD SUO MOTO MADE DISALLOWANCE OF RS.12,000/- U/S 14A OF THE ACT ON ESTIMATE BASIS. THE ASSESSING OFF ICER HAD QUERIED THE ASSESSEE AND THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY DISALLOWANCE SHOULD NOT BE MADE U/S 14A IN ACCORDANC E WITH RULE 8D OF THE INCOME TAX RULES, 1962. IT WAS THE ASSESSE ES SUBMISSION BEFORE THE ASSESSING OFFICER THAT NO BORROWED FUNDS HAD BEEN UTILIZED FOR THE PURPOSES OF MAKING THE INVESTMENTS FOR EARNING OF TAX FREE INCOME BUT THE ASSESSING OFFICER WAS NOT SA TISFIED WITH THE ASSERTION OF THE ASSESSEE AND HE PROCEEDED TO COMP UTE THE TOTAL DISALLOWANCE U/S 14A READ WITH RULE 8D AT RS.2,85,665 /- AND AFTER 11 ITA NO.1126/DEL/2018 ACIT VS. INFRES METHODEX PVT. L TD., GIVING BENEFIT OF THE AMOUNT ALREADY SUO MOTO DISAL LOWED BY THE ASSESSEE I.E. RS.12,000/-, PROCEEDED TO MAKE A FURT HER DISALLOWANCE OF RS.2,73,665/-. THE LD. CIT(A), HOWEVER, ACCEPTED THE ASSESSEES SUBMISSION THAT THE AMOUNT DISALLOWABLE AS PER RULE 8D (2) (III) OF THE INCOME TAX RULES SHOULD BE AN AMOUNT EQUAL TO % OF THE AVERAGE OF THE VALUE OF INVESTMENTS AS APPEARING I N THE BALANCE SHEET OF THE ASSESSEE ON THE FIRST DAY AND LAST DAY OF THE PREVIOUS YEAR. ACCORDINGLY, THE LD. CIT(A) ACCEPTED THE ASSE SSEES CONTENTION THAT ONLY RS.1,01,352/- COULD BE DISALLOWED. 5.4 WE HAVE GONE THROUGH THE ORDER OF THE LD. CIT(A) AS WELL AS THE FINDINGS OF THE ASSESSING OFFICER. IT IS SEE N THAT THE ASSESSING OFFICER HAS SIMPLY APPLIED THE PROCEDURE PRESCRIBED IN RULE 8D OF THE INCOME TAX RULES TO COMPUTE THE AMOUNT DISALLOWA BLE U/S 14A OF THE ACT WITHOUT APPRECIATING THAT IN THE PRESENT CASE, NO PART OF INTEREST COULD HAVE BEEN SAID TO HAVE BEEN INCURRED IN RELATION TO EXEMPT INCOME. IN THE ASSESSMENT ORDER, THE ASSESSI NG OFFICER HAS NOT POINTED OUT EVEN A SINGLE EXPENDITURE HAVING BE EN INCURRED BY THE ASSESSEE DURING THE YEAR WHICH WAS HAVING PROXIMA TE NEXUS 12 ITA NO.1126/DEL/2018 ACIT VS. INFRES METHODEX PVT. L TD., WITH THE EXEMPT DIVIDEND INCOME EARNED DURING THE YE AR. IT IS VERY MUCH APPARENT THAT THE ASSESSING OFFICER, WHILE COMP UTING THE DISALLOWANCE U/S 14A, CONSIDERED THE ENTIRE INVESTME NTS WHEREAS THE DISALLOWANCE U/S 14A READ WITH RULE 8D IS IN REL ATION TO THE INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME AND THIS CAN ONLY BE DONE BY TAKING INTO CONSIDERATION THE INVES TMENT WHICH HAS GIVEN RISE TO THE INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME. THE LD. CIT(A) HAS RETURNED A CATEGORICAL FINDING OF FACT ON THE ISSUE AND HAS COMPUTED THE DISALLOWANCE AFTER E XCLUDING THOSE INVESTMENTS WHICH WERE NOT RELATED TO THE EARNING OF DIVIDEND INCOME. SUCH IS ALSO THE MANDATE OF THE HONBLE DEL HI HIGH COURT IN THE CASE OF ACB INDIA LTD. VS. ACIT REPORTED IN 374 ITR 108 (DE LHI) AND PLETHORA OF OTHER JUDGMENTS. WE ALSO NOTE THAT THE ASSESSEE IS NOT IN APPEAL BEFORE THIS TRIBUNAL AGAINST THE AMOU NT OF DISALLOWANCE U/S 14A AS CONFIRMED BY THE LD. CIT(A). ACCORDINGLY, WE FIND NO REASON TO INTERFERE WITH THE FINDING OF TH E LD. CIT(A) ON THE ISSUE AND WE DISMISS THE GROUNDS RAISED BY THE DEPARTMENT IN THIS REGARD. 13 ITA NO.1126/DEL/2018 ACIT VS. INFRES METHODEX PVT. L TD., 6.0 IN THE FINAL RESULT, THE APPEAL OF T HE DEPARTMENT STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 30 TH SEPTEMBER, 2021. SD/- SD/- (PRASHANT MAHARISHI) (SUDHANSHU SRIVASTAVA ) ACCOUNTANT MEMBER JUDICIAL MEMB ER DATED: 30/09/2021 PK/PS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI