ACIT, CHENNAI V. Cauvery Stone Impex Private Ltd., CHENNAI

ITA 1248/CHNY/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6297 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 05-05-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 06-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURU BHASHYAM
• Section: 143(3); 10B; 10

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B BENCH, CHENNAI . , ' $ % , & ' BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ITA NO. ASSESS -MENT YEAR APPELLANT RESPONDENT 1210 /MDS/2013 2009-10 M/S. CAUVERY STONE IMPEX PVT. LTD. 8, 2 ND STREET GANAPATHY COLONY, CHENNAI-600 086 PAN:AACCC3310J ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-I(3) CHENNAI-600 034. 1248 /MDS/2013 2009-10 ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-I(3) WANAPARTHY BLOCK, VI FLOOR, CHENNAI-600 034. M/S. CAUVERY STONE IMPEX PVT. LTD. 8, 2 ND STREET GANAPATHY COLONY, CHENNAI-600 086 PAN:AACCC3310J ASSESSEE BY : MR. PHILIP GEORGE, ADVOCATE REVENUE BY : MR. GURU BHASHYAM, JCIT / DATE OF HEARING : 5 TH MAY, 2014 /DATE OF PRONOUNCEMENT : 20 TH JUNE, 2014 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: BOTH THESE APPEALS ARE FILED BY THE ASSESSEE AND REVENUE RESPECTIVELY AGAINST THE ORDER OF THE COMMI SSIONER OF INCOME TAX (APPEALS)-IX, CHENNAI DATED 28.02.201 3 FOR THE ASSESSMENT YEAR 2009-10. 2 ITA NOS.1210 & 1248/MDS/2013 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS ENG AGED IN THE BUSINESS OF MANUFACTURE AND EXPORT OF GRANITE MONUMENTS. THE ASSESSEE FILED RETURN OF INCOME ON 30.9.2009 ADMITTING TAXABLE INCOME OF ` 27,25,255/- AFTER CLAIMING DEDUCTION UNDER SECTION 10B OF THE ACT AT ` 98,93,643/-. THE ASSESSMENT WAS COMPLETED UNDER SEC TION 143(3) OF THE ACT DETERMINING INCOME AT ` 76,16,000/-. WHILE COMPLETING ASSESSMENT THE ASSESSING OFFICER REDUCED ` 50,00,000/- FROM BUSINESS PROFITS OF THE ASSESSEE A ND COMPUTED DEDUCTION ALLOWABLE UNDER SECTION 10B OF T HE ACT ON THE BALANCE PROFITS ON THE GROUND THAT PROFITS T O THE EXTENT OF ` 50,00,000/- HAS BEEN SHIFTED FROM M/S. COROMANDEL AGENCIES WHICH IS A RELATED PARTY TO THE ASSESSEE A ND CLAIMED DEDUCTION UNDER SECTION 10B OF THE ACT ON S UCH PROFITS SHIFTED TO ASSESSEE. ASSESSING OFFICER ALSO DISALLOWED SALES COMMISSION OF ` 33,29,549/- UNDER SECTION 40(A)(I) OF THE ACT PAID TO OVERSEAS AGENTS ON THE GROUND THAT ASSESSEE HAS NOT DEDUCTED TDS ON SUCH OVERSEAS COMMISSION. ON APPEAL BY THE ASSESSEE , COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE DISALLOWANCE MADE UNDER SECTI ON 40(A)(I) ON THE COMMISSION PAID TO OVERSEAS AGENTS AND 3 ITA NOS.1210 & 1248/MDS/2013 SUSTAINED THE ACTION OF THE ASSESSING OFFICER IN RE DUCING PROFITS TO THE EXTENT OF ` 50,00,000/- WHILE COMPUTING DEDUCTION ALLOWABLE UNDER SECTION 10B OF THE ACT. AGAINST THIS ORDER, BOTH ASSESSEE AND REVENUE HAVE COME UP IN APPEAL BEFORE US. 3. COUNSEL FOR THE ASSESSEE SUBMITS THAT ASSESSEE IS ENGAGED IN MANUFACTURE OF GRANITE MONUMENTS BASED ON THE ORDERS OF BUYER. COUNSEL SUBMITS THAT ASSESSING OFF ICER WAS OF THE VIEW THAT ASSESSEE HAS PURCHASED GRANITE BLO CKS FROM ITS RELATED PARTIES FOR AN AMOUNT LESS THAN THE PRI CE FOR WHICH THE RELATED PARTIES SUPPLIED GRANITE BLOCKS TO THE THIRD PARTIES. COUNSEL SUBMITS THAT ASSESSING OFFICER HAS COMPARED THE SALES MADE BY M/S. COROMANDEL AGENCIES TO OTHERS AT ` 30,000/- PER CBM AND TO THAT OF ASSESSEE AT ` 25,000/- PER CBM AND MADE ADJUSTMENT OF ` 50,00,000/- BY INVOKING THE PROVISIONS OF SECTION 80IA (10) OF THE ACT. C OUNSEL FOR THE ASSESSEE REFERRING TO THE SUBMISSIONS MADE BEFORE T HE COMMISSIONER OF INCOME TAX (APPEALS) WHICH WERE EXTRACTED AT PAGE 7 & 8 OF THE IMPUGNED ORDER SUBMI TS THAT ASSESSEE FURNISHED DETAILS OF SALES EFFECTED BY M/S . IMPERIAL 4 ITA NOS.1210 & 1248/MDS/2013 GRANITES P.LTD. TO THE ASSESSEE AND TO THE OTHER P ARTIES NOT RELATED TO THEM. COUNSEL FOR THE ASSESSEE SUBMITS THAT IN THE CASE OF TRANSACTIONS BETWEEN M/S. IMPERIAL GRANITES P.LTD. AND THE ASSESSEE AND IN RESPECT OF THE PRODUCTS IM PERIAL WHITE AND PK4 BLACK, THE PRICE CHARGED TO THE ASS ESSEE PER CBM WAS ` 18,000/- AND ` 16,000/- RESPECTIVELY AGAINST THE PRICE CHARGED TO THE THIRD PARTIES AT ` 10,000/- FOR BOTH THE PRODUCTS. SIMILARLY COUNSEL SUBMITS THAT IN THE CAS E OF TRANSACTIONS BETWEEN M/S. GEM GRANITES AND THE ASSE SSEE IN RESPECT OF THE PRODUCT PP4 BLACK AND K2 BLACK, PRIC E CHARGED TO THE ASSESSEE WAS AT ` 16,000/- PER CMB FOR BOTH PRODUCTS AND AS COMPARED TO THE PRICE CHARGED TO OTHERS AT ` 10,000/- AND ` 20,000/- PER CBM RESPECTIVELY. COUNSEL FOR THE ASSESSEE SUBMITS THAT PRICE PAID BY THE ASSESSEE TO M/S. IMPERIAL GRANITES P. LTD. RELATED PARTY IS MORE T HAN THE PRICE CHARGED BY THEM TO THIRD PARTIES, SIMILARLY COUNSEL SUBMITS THAT PRICE PAID BY THE ASSESSEE TO M/S. GEM GRANITE S ANOTHER RELATED PARTY ON ONE VARIETY PRICE IS LES S AND ON ANOTHER VARIETY PRICE IS MORE WHEN COMPARED TO THE PRICE CHARGED TO THIRD PARTIES. THIS IS BECAUSE RATE IS FIXED DEPENDING UPON THE QUANTITY, QUALITY, PRODUCT AND D EMAND 5 ITA NOS.1210 & 1248/MDS/2013 AND THERE IS NO OTHER REASON FOR FIXING THE RATES L ESS THAN THE AMOUNTS CHARGED TO THIRD PARTIES. COUNSEL FOR THE A SSESSEE SUBMITS THAT MAINLY THE ADJUSTMENT OF ` 50,00,000/- WAS MADE BY THE ASSESSING OFFICER BY COMPARING THE SALE S MADE BY M/S. COROMANDEL AGENCIES TO THE ASSESSEE AND THI RD PARTIES IN RESPECT OF THE PRODUCT KASHMIRI WHITE W HERE M/S. COROMANDEL AGENCIES IS RELATED PARTY HAS CHARGED ` 25,000/- PER CBM TO THE ASSESSEE AS COMPARED TO OTHER THIRD PARTIES AT ` 30,000/- PER CBM. THEREFORE ASSESSING OFFICER WAS OF THE VIEW THAT THE PRODUCT KASHMIRI DIMENTIONAL GRA NITE BLOCKS WAS CHARGED LESS BY ` 5,000/- AS COMPARED TO THIRD PARTIES AND THEREFORE ADJUSTMENT OF ` 50,00,000/- IS NECESSARY. COUNSEL SUBMITS THAT IN GRANITE DIMENTIO NAL BLOCKS TRADE, PRICE MAY VARY DEPENDING UPON SIZE OF THE BLOCK AND UNIFORMITY IN COLOUR, DEFECTS ETC. AS GRA NITE IS A NATURAL PRODUCT AND IF THERE IS ANY MOLE, CRACK OR DIFFERENCE IN COLOUR THE SAME CANNOT BE EXPORTED. THE SAID BLOCK HAVE TO BE CUT INTO SIZES AND PORTION WHERE THERE IS NO MOL E, CRACK AND NO UNIFORMITY IN COLOUR COUNT BE EXPORTED AND I N SUCH CASE THERE WILL BE LOT OF WASTAGES. COUNSEL FOR THE ASSESSEE SUBMITS THAT MONUMENTS WERE MANUFACTURED AS PER ORD ERS 6 ITA NOS.1210 & 1248/MDS/2013 AND THE ASSESSEE WOULD CONSUME BLOCKS REJECTED AS THE ASSESSEE WOULD BE ABLE TO USE PORTION OF BLOCKS WHE RE THERE IS NO CRACK OR MOLE. COUNSEL SUBMITS THAT WHEN COMP ARING RATES THE ASSESSING OFFICER HAS FAILED TO NOTE THAT ASSESSEE HAD PURCHASED TOTAL QUANTITY OF 131.37 CBM AND WHER EAS OTHER PARTIES HAVE PURCHASED 8 TO 17 CBM AND SINCE THE ASSESSEE HAS PURCHASED HUGE QUANTITY THEY WERE ABLE TO NEGOTIATE AND GET BETTER PRICE SUBJECT TO BUYING BL OCKS REJECTED BY OVERSEAS PARTIES. COUNSEL SUBMITS THAT WITHOUT LOOKING TO ALL THESE FACTS HAD MADE ADJUSTMENTS AND REDUCED THE PROFIT OF THE BUSINESS OF THE ASSESSEE. 4. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTS THE ORDER OF THE ASSESSING OFFICER. 5. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES. THE ASSESSING OFFICER WAS OF THE VIEW THAT BECAUSE THE RELATED PARTY M/S. COROMANDEL AGENCIES HAD CHARGED LESS PRICE BY ` 5,000/- ON THE KASHMIRI WHITE DIMENTIONAL GRANITES BLOCK WHEN COMPARED TO THIRD PARTIES BUSIN ESS PROFITS TO THE EXTENT OF ` 50,00,000/- WAS SHIFTED TO THE 7 ITA NOS.1210 & 1248/MDS/2013 ASSESSEE FOR THE PURPOSE OF CLAIMING DEDUCTION UNDE R SECTION 10B OF THE ACT. ON A CAREFUL READING OF THE SUBMISS IONS OF THE ASSESSEE, WE DO NOT FIND THE REASON GIVEN BY THE AS SESSING OFFICER IS A VALID AND JUSTIFIABLE TO REDUCE THE PR OFITS TO THE EXTENT OF ` 50,00,000/- FOR NOT CONSIDERING THEM FOR THE PURPOSE OF ALLOWING DEDUCTION UNDER SECTION 10B OF THE ACT WITHOUT DEALING WITH THE SUBMISSIONS OF THE ASSESSE E. THE ASSESSING OFFICER FIRSTLY COMPARED SALES MADE BY M/ S. COROMANDEL AGENCIES TO THE ASSESSEE AND SALES TO T HIRD PARTIES WHERE SALES MADE TO THE ASSESSEE WERE FOR A TOTAL QUANTITY OF 131.37 CBM, WHEREAS SALES MADE TO THIRD PARTIES WAS AT 8 TO 17 CBM WHICH IS LESS THAN 13% OF THE SA LES MADE TO THE ASSESSEE. SECONDLY, ASSESSEE IS IN THE BUSIN ESS OF EXPORTING MONUMENTS BASED ON THE ORDERS OF BUYERS A ND IT VARY FROM BUYER TO BUYER. HOWEVER, IN THE CASE OF T HIRD PARTIES WE DO NOT KNOW AS TO THE BUSINESS OF SUCH T HIRD PARTIES AND WHETHER ENGAGED IN TRADING OF DIMENTION AL BLOCKS OR THEY ARE INTO MANUFACTURE OF MONUMENTS BASED ON THE ORDERS LIKE ASSESSEE. AS FAR AS RATE IS CONCERNED, IF YOU SEE VOLUME OF PURCHASES MADE BY THE ASSESSEE TO THAT OF OTHER PARTIES, THE QUANTITY PURCHASED BY THE ASSESSEE IS 131.37 8 ITA NOS.1210 & 1248/MDS/2013 CBM AND BY THE THIRD PARTIES IS 8 TO 17 CBM AND IN SUCH A SITUATION PRICE ADOPTED BY M/S. COROMANDEL AGENCIES @ ` 25,000/- PER CBM TO ASSESSEE AND ` 30,000/- PER CBM TO THIRD PARTIES COULD BE POSSIBLE. IN THE CIRCUMSTAN CES, WE FIND THAT ASSESSING OFFICER HAS NOT ADOPTED FAIR COMPARI SON AT ALL. WE THEREFORE HOLD THAT IT IS ONLY AN APPREHENSION O F THE ASSESSING OFFICER THAT ASSESSEE HAS SHIFTED PROFITS FOR THE PURPOSE OF CLAIMING DEDUCTION UNDER SECTION 10B OF THE ACT AND THE ANALYSIS MADE BY THE ASSESSING OFFICER IS N OT A CONCLUSIVE PROOF THAT THE ASSESSEE HAS SHIFTED PRO FITS FROM ITS RELATED CONCERN FOR THE PURPOSE OF CLAIMING DEDUCTI ON UNDER SECTION 10B OF THE ACT. THUS, WE REVERSE THE ORDER OF THE LOWER AUTHORITIES ON THIS ISSUE AND ALLOW THE APPEA L OF THE ASSESSEE. 6. IN REVENUES APPEAL THE ONLY GRIEVANCE IS THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELET ING THE DISALLOWANCE MADE UNDER SECTION 40(A)(I) OF THE ACT IN RESPECT OF THE COMMISSION PAID TO OVERSEAS AGENTS. 9 ITA NOS.1210 & 1248/MDS/2013 7. DEPARTMENTAL REPRESENTATIVE SUBMITS THAT ASSESSE E DURING THIS ASSESSMENT YEAR PAID COMMISSION OF ` 33,29,549/- TO NON-RESIDENT AGENTS WITHOUT DEDUCTIN G TDS UNDER SECTION 195 OF THE ACT. DEPARTMENTAL REPRESEN TATIVE SUBMITS THAT SINCE ASSESSEE HAS NOT DEDUCTED TDS U NDER SECTION 195(1) OF THE ACT ON THE COMMISSION PAID TO OVERSEAS AGENTS, THE ASSESSING OFFICER IS RIGHT IN DISALLOWI NG THE SAID COMMISSION UNDER SECTION 40(A)(I) OF THE ACT. HE SU PPORTED THE ORDER OF THE ASSESSING OFFICER. 8. COUNSEL FOR THE ASSESSEE SUBMITS THAT ASSESSEE PAID COMMISSION TO ITS FOREIGN AGENTS FOR THE SERVICES R ENDERED BY THEM IN GERMANY, AUSTRIA AND FRANCE. THE ASSESSEE H AS BEEN EXPORTING MONUMENTS FROM ITS INCEPTION AND PAY ING COMMISSION TO ITS OVERSEAS AGENTS ON THE ORDERS PRO CURED BY THEM. COUNSEL SUBMITS THAT SERVICES WERE RENDERED B Y NON- RESIDENT AGENTS OUTSIDE INDIA AND COMMISSION WAS PA ID OUTSIDE INDIA AND SUCH COMMISSION IS NOT CHARGEABLE TO TAX IN INDIA. COUNSEL SUBMITS THAT UNLESS SUCH COMMISSION IS CHARGEABLE TO TAX IN INDIA, THERE IS NO OBLIGATION ON THE PART OF THE ASSESSEE TO DEDUCT TAX AT SOURCE UNDER SECTI ON 195 OF 10 ITA NOS.1210 & 1248/MDS/2013 THE ACT. COUNSEL FOR THE ASSESSEE PLACES RELIANCE O N THE FOLLOWING DECISIONS OF THE CO-ORDINATE BENCH OF THI S TRIBUNAL AND SUBMITS THAT THE DECISIONS SQUARELY APPLIES TO THE ASSESSEES CASE AND THEREFORE PLEADS FOR SUSTAINING THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN DELE TING DISALLOWANCE:- I) PRAKASH IMPEX VS. ACIT IN ITA NO.8/MDS/2012 DATED 30.03.2012 II) ITO VS. FAIZAN SHOES PVT.LTD. IN ITA NO.2095/MDS/2012 DATED 23.04.2013 III) DCIT VS. MAINETTI INDIA P.LTD. IN ITA NO.106/MDS/2014 DATED 8.4.2014. 9. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES, COPIES OF AGREEMENTS PLACED BEFORE US AND THE DECIS IONS RELIED ON. ON GOING THROUGH THE ASSESSMENT ORDER, W E FIND THAT ASSESSING OFFICER DISALLOWED COMMISSION PAID T O FOREIGN AGENTS ON THE GROUND THAT ASSESSEE HAS NOT DEDUCTED TDS UNDER SECTION 195(1) OF THE ACT, THEREFORE, PROVISI ONS OF SECTION 40(A)(I) ARE ATTRACTED. ON A PERUSAL OF TH E AGREEMENTS WITH NON-RESIDENTS, WE DO NOT FIND ANY MANAGERIAL OF TECHNICAL SERVICES RENDERED BY THE NO N- 11 ITA NOS.1210 & 1248/MDS/2013 RESIDENTS TO THE ASSESSEE EXCEPT PROCURING SALES OU TSIDE INDIA FOR WHICH SALES COMMISSION OF 3% TO 5% ON THE INVOICE VALUE IS PAYABLE TO THE OVERSEAS AGENTS. THE COMMI SSIONER OF INCOME TAX (APPEALS) CONSIDERING THE SUBMISSIONS OF THE ASSESSEE THAT COMMISSION WAS PAID TO OVERSEAS AGENT S FOR THE SERVICES RENDERED BY THEM OUTSIDE INDIA AND THE PAYMENTS MADE TO NON-RESIDENT AGENTS ARE NOT CHARGE ABLE TO TAX IN INDIA AND SINCE THE PROVISIONS OF SECTION 19 5(1) ARE NOT ATTRACTED, HE DELETED THE DISALLOWANCE. THE CO-ORDI NATE BENCH OF THIS TRIBUNAL ON ALMOST IDENTICAL SITUATIO N CONSIDERED THE ISSUE IN THE CASE OF PRAKASH IMPEX V S. ACIT (SUPRA) HELD AS UNDER:- 6. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATE RIALS AVAILABLE ON RECORD. AT THE TIME OF HEARING, THE LD . COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS ENG AGED IN THE BUSINESS OF EXPORTS IN LEATHER GARMENTS. IN THE COURSE OF BUSINESS, THE ASSESSEE PAID COMMISSION TO NON- RESIDENT AGENTS, WHO HAVE RENDERED THEIR SERVICES O UTSIDE INDIA. IT IS SUBMITTED THAT THE INCOME DOES NOT ACC RUE IN INDIA AS THE SERVICES WERE RENDERED OUTSIDE INDIA B Y NON- RESIDENT AGENTS AND THEY HAVE NO ESTABLISHMENT WHATSOEVER IN INDIA. THEREFORE, THE PROVISIONS OF E ITHER SECTION 195 OR SECTION 9 (1)(VI) OF THE INCOME TAX ACT ARE APPLICABLE IN THE ASSESSEES CASE. HE SUBMITTED THA T SINCE THE INCOME DOES NOT ACCRUE IN INDIA, NO DEDUCTION O F TDS IS REQUIRED TO BE MADE UNDER SECTION 195 OF THE ACT AND THEREFORE, THERE IS NO JUSTIFICATION IN DISALLOWING THE SALES COMMISSION PAID TO NON-RESIDENT AGENTS AND HENCE, APPLYING THE PROVISIONS OF SECTION 40(A)(I) ARE NOT JUSTIFIED. HE FURTHER SUBMITTED THAT AN IDENTICAL ISSUE WAS DE CIDED IN 12 ITA NOS.1210 & 1248/MDS/2013 FAVOUR OF THE ASSESSEE BY THE HONBLE SUPREME COURT IN THE CASE OF G.E. INDIA TECHNOLOGY CENTRE (P) LTD. V . CIT [2010 327 ITR 456] AND ALSO BY THIS TRIBUNALS ORDE R IN THE CASE OF DCIT V. M/S. VENKAT SHOES PVT. LTD. I.T.A. NO. 996/MDS/2008 DATED 06.03.2009. 7. THE LD. DR RELIED ON THE ORDER OF THE CIT(A). 8. WE HAVE GONE THROUGH THE DECISION OF HONBLE SUP REME COURT IN THE CASE OF G.E. INDIA TECHNOLOGY CENTRE ( P) LTD. V. CIT (SUPRA) AND FIND THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THIS DECISION. THE HONBLE SUPRE ME COURT HAS HELD THAT THE MOST IMPORTANT EXPRESSION I N SECTION 195(1) CONSISTS OF THE WORDS CHARGEABLE UN DER THE PROVISIONS OF THE ACT AND HELD THAT PAYER IS B OUND TO DEDUCT TAX AT SOURCE ONLY IF THE SUM IS NOT CHARGEA BLE TO TAX UNDER THE PROVISIONS OF INCOME TAX ACT. 9. IN THIS CASE, SINCE THE COMMISSION WAS PAID TO A NON- RESIDENT AGENTS FOR THE SERVICES RENDERED OUTSIDE I NDIA, SUCH PAYMENTS ARE NOT CHARGEABLE TO TAX IN INDIA AN D THEREFORE, THE PROVISIONS OF SECTION 195 ARE NOT AP PLICABLE IN VIEW OF THE DECISION OF THE HONBLE SUPREME COUR T (SUPRA). THEREFORE, WE DIRECT THE ASSESSING OFFICER TO DELETE THE DISALLOWANCE OF COMMISSION OF ` 1,45,83,443/- PAID TO NON-RESIDENT AGENTS. ACCORDINGLY, WE SET AS IDE THE ORDERS OF LOWER AUTHORITIES AND ALLOW THE GROUNDS O F APPEAL OF THE ASSESSEE. 10. RESPECTFULLY FOLLOWING THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF G.E. INDIA TECHNOLOG Y CENTRE (P) LTD. V. CIT (SUPRA), WHICH IS SQUARELY APPLICA BLE TO THE FACTS OF THIS CASE, WE REJECT THE GROUNDS OF APPEA L RAISED BY THE REVENUE AND UPHOLD THE ORDER OF THE COMMISSIONE R OF INCOME TAX (APPEALS) IN DELETING THE DISALLOWANCE U NDER SECTION 40(A)(I) OF THE ACT. 13 ITA NOS.1210 & 1248/MDS/2013 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D AND THAT OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY THE 20 TH DAY OF JUNE, 2014 AT CHENNAI. SD/- SD/- ( A.MOHAN ALANKAMONY ) ( CHALLA NAGENDR A PRASAD ) . ( !' # ) ACCOUNTANT MEMBER / % JUDICIAL MEMBER/ !' % ! /CHENNAI, ( /DATED, 20 TH JUNE, 2014 SOMU #'+, ., /COPY TO: 1. ASSESSEE 2. ASSESSING OFFICER 3. / () /CIT(A) 4. / /CIT 5. , #''3 /DR 6. 6 /GF .