Ascendas (India) Private Limited, CHENNAI V. ACIT, CHENNAI

ITA 1255/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9524 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 25-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH IRS
• Keywords: Rule of consistency; Commercial expediency; Reason to believe
• Section: 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . ! , '!# BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A. NO.1255/MDS/2015 ' $ %$ / ASSESSMENT YEAR : 2005-2006. M/S. ASCENDAS (INDIA) PRIVATE LTD, IST FLOOR, INTERNATIONAL TECHPARK, PINNACLE BUILDING, TARAMANI ROAD, TARAMANI, CHENNAI 600 113. VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE I(1) CHENNAI 600 034. [PAN AAACJ 9055H] ( / APPELLANT) ( /RESPONDENT) &' ( ) / APPELLANT BY : SHRI. RAGHUNATHAN SAMPATH, ADV *+&' ( ) /RESPONDENT BY : SHRI. A.V.SREEKANTH, IRS, JCIT. ( , / DATE OF HEARING : 18-02-2016 -.% ( , / DATE OF PRONOUNCEMENT : 28-04-2016 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AG AINST ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-1, CHEN NAI IN ITA NO.160/07-08/A-1, DT 30.01.2015 FOR THE ASSESSMENT YEAR 2005-2006 ITA NO.1255/MDS/2015. :- 2 -: PASSED U/S.143(3) AND 250 OF THE INCOME TAX ACT, 1 961 (HEREIN AFTER REFERRED TO AS THE ACT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 2. THE CIT(A) FAILED TO ACCEPT THE FACT THAT ASSESSING OFFICERS ACTION OF EFFECTING AN ADDITION TO INCOME IS ARBITRARY AND LACKS JURISDICTION. 3. THE CIT(A) ERRED IN CONFIRMING THE ASSESSING OFFICERS ARTIFICIAL IMPUTATION OF MARK UP AT THE R ATE OF 8% ON THE TOTAL OPERATING COST OF THE APPELLANT. 4. THE CIT(A) FAILED TO APPRECIATE THE TRANSACTIONS BETWEEN THE APPELLANT AND THE DOMESTIC RELATED ENTITIES ARE BASED ON BUSINESS OBJECTIVES AND MOTIVATED SOLELY BY COMMERCIAL EXPEDIENCY, WHICH NEED NOT NECESSARY RESULT IN PROFITS. 3. THE BRIEF FACTS OF THE CASE THAT THE ASSESSEE IS I N THE BUSINESS OF DEVELOPMENT OF PROPERTIES AND RENDERING CONSULTANCY SERVICES AND FILED RETURN OF INCOME ON 29.10.2005 D ECLARING LOSS OF >3,08,96,605/- AND WAS PROCESSED U/S.143(1) OF THE ACT. SUBSEQUENTLY, AS PER SCRUTINY NORMS NOTICE U/S.143( 2) OF THE ACT WAS ISSUED AND LD. AUTHORISED REPRESENTATIVE OF ASSESSE E APPEARED FROM TIME TO TIME AND FILED INFORMATION. THE MAIN BUSI NESS OF THE ASSESSEE BEING RENDERING PROJECT MANAGEMENT SERVICES AND ASS ET MANAGEMENT SERVICES TO ITS GROUP COMPANIES AND ENGAGED IN PROM OTION OF PROPERTIES INCLUDING IT PARKS ALL OVER THE WORLD. T HE INCOME OF THE ITA NO.1255/MDS/2015. :- 3 -: ASSESSEE BEING SERVICE CHARGES AND OTHER INCOMES AN D SERVICE CHARGES PERTAIN TO SERVICES RENDERED DURING THE YEAR AS UND ER:- > (I) ASCENDAS IT PARK CHENNAI LIMITED 1,69,09,862/- (II) INFORMATION TECHNOLOGY PARK LIMITED 3,82,495/- (III) L & T INFO-CITY ASCENDAS LIMITED 44,32,139/- ----------------- 2,17,24,496/- ---------------- AS PER PROFIT AND LOSS ACCOUNT NET REVENUE OF THE A SSESSEE COMPANY IS >2,76,63,794/- AFTER CONSIDERING THE EXPENDITURE OF >5,62,17,729/-. THE ASSESSEE COMPANY RENDERED SERVICES TO THE GROUP COMPANIES BUT ON PERUSAL OF THE SERVICE CHARGES COLLECTED COMPARA TIVELY LOWER FROM THE GROUP COMPANIES. THE PERSONAL COSTS INCURRED I S MORE THAN THE TWICE THE REVENUE COLLECTED. THE LD. ASSESSING OFF ICER FURTHER VERIFIED THE SHAREHOLDER PATTERN OF THE GROUP COMPANIES AND NATURE OF SERVICES. THE ONLY QUESTION ARISES FOR REASONS AND BASIS OF CHARGING SERVICE CHARGES TO ITS SISTER CONCERN AND THE ASSES SEE COMPANY REPLIED THROUGH LETTER DATED 08.08.2007 AS UNDER:- DURING CONSTRUCTION STAGE:- PROJECT MANAGEMENT FEE AT THE RATE OF 2% OF ASSET COMPANYS CONSTRUCTION COST. AFTER CONSTRUCTION STAGE:- (I) PROJECT MANGEMENT FEE AT THE RATE OF 2% ON ASSET COMPANYS MONTHLY REVENUE. (II) LEASE MANAGEMENT FEES AT THE RATE OF 1% PER ITA NO.1255/MDS/2015. :- 4 -: MONTH ON ASSET COMPANYS MONTHLY REVENUE. (III) ASSET MANGEMENT FEES AT THE RATE OF 0.5% PER ANNUM OF ASSET COMPANYS PROJECT COST. THE LD. ASSESSING OFFICER THOUGH CONSIDERED THE SUB MISSIONS AND THE SHAREHOLDING PATTERN AND LIST OF EMPLOYEES IS OF TH E OPINION THE ASSESSEE HAS CHARGES LESS AMOUNT IN COMPARISON WIT H THE OTHER COMPANIES ENGAGED IN THE SIMILAR BUSINESS AND RELIE D ON THE INFORMATION OF M/S. ASHOK LEYLAND PROPERTIES FOR TH E ASSESSMENT YEAR 2005-06, WERE THE COMPANY HAS CHARGED 5% OF PROJECT COST DURING CONSTRUCTION PERIOD AS PROJECT MANAGEMENT FEES AS AGAINST 2% CHARGED BY ASSESSEE COMPANY TO ITS SISTER COMPANIES ON SIMILAR SERVICES. THE LD. ASSESSING OFFICER FOUND THAT ASS ESSEE INCURRED AN EXPENDITURE OF >5.62 CRORES EXCLUSIVELY ON ITS SIST ER CONCERNS AND IS OF THE OPINION THAT THE ASSESSEE CANNOT BE ALLOWED IN INCURRING LOSSES AT THE COST OF SISTER CONCERNS AND THERE IS NO REASONA BILITY OF THE RATE CHARGED BY THE ASSESSEE COMPANY TO ITS SISTER CONCE RN. THE LD. ASSESSING OFFICER FURTHER BASED ON THE SUBMISSIONS AND SISTER COMPANY WORKING SYSTEMS SUPPORTED WITH THE SIMILAR PROJECT CONSULTANCY OF OTHER GROUP HAS ESTIMATED TOTAL OPERATIVE COST PLUS A MARKUP AT 8% AND CONSIDERED THE TOTAL SERVICES INCOME AS >6,07, 15,147/- AND PASSED THE ORDER WITH OTHER DISALLOWANCE U/S.143(3) OF THE ACT, DATED ITA NO.1255/MDS/2015. :- 5 -: 30.08.2007. AGGRIEVED BY THE ORDER, THE ASSESSEE F ILED AN APPEAL BEFORE COMMISSIONER OF INCOME TAX (APPEALS). 4. IN THE APPELLATE PROCEEDINGS, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) CONSIDERED THE GROUNDS AND SU BMISSIONS MADE IN THE APPELLATE PROCEEDINGS AND VERIFIED OBSERVATI ONS OF THE ASSESSING OFFICER IN ASSESSMENT PROCEEDINGS AND THE PATTERN OF WORKING. THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT ORDER OF THE ASSESSING OFFICER IS NOT SUSTAINABLE AND SUPPORTED HIS ARGUMENTS WITH FOLLOWINGS DECISIONS :- (A) DCIT VS NAGARJUNA INVESTMENT TRUST LTD (1998) 65 ITD 17 (HYD) (B) MYSORE MINERALS LTD VS. ITO (ITAT BANGALORE) (C) R.M.P. PERIANNA PILLAI & CO VS. CIT (1961) 42 ITR 3 70 (MAD) (D) PANDIT BROS. VS. CIT (1954) 26 ITR 159 (PUN) (E) CIT VS. SALITHO ORES LTD. (2010) 344 ITR 161 (BOM) (F) EASTERN INVESTMENTS LTD VS. CIT (1951) 20 ITR 1 (SC ) (G) CIT VS. WALCHAND & CO ETC. (1967( 65 ITR 271(SC) (H) CIT VS. DHANRAJGIRJI RAJA NARASINGIRJI (1973) 91 IT R 544 (SC) (I) CIT VS. A. RAMAN & CO (1968) 67 ITR 11 (SC) (J) SRI RAMALINGA CHOODAMBIKAI MILLS LTD VS. CIT (1955) 28 ITR 952 (MAD) (K) DHAKESARI COTTON MILLS LTD. VS. CIT (1954) 26 ITR 7 75 (SC) (L) GARGI DIN JWALA PRASAD VS. CIT (1974) 96 ITR 97 (AL L) THE LD. COMMISSIONER OF INCOME TAX (APPEALS) CONSID ERED THE SUBMISSIONS AND CONFIRMED THE ORDER OF ASSESSING OF FICER AND OBSERVED AT PARA 4.2 OF HIS ORDER AS UNDER:- 4.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE ITA NO.1255/MDS/2015. :- 6 -: CASE AND THE SUBMISSIONS OF THE LD. AUTHORISED REPRESENTATIVE. I HAVE ALSO GONE THROUGH THE DECISIONS RELIED ON BY THE LD. AUTHORISED REPRESENTATIVE. AS SEEN FROM THE FACTS OF THE CASE THE ASSESSING OFFICER HAS FOUND THAT THE FEE CHARGE D FROM ITS GROUP COMPANIES FOR PROJECT MANAGEMENT SERVICES AND ASSET MANAGEMENT SERVICES, ON THE ONE HAND, IS BELOW MARKET RTE AND ON THE OTHER HAND THE EXPENDITURE INCURRED BY THE APPELLANT COMPANY FOR RENDERING SUCH SERVICES IS ON THE HIGHER SIDE. THEREFORE, THE AO FELT THAT THE APPELLANT SHOULD HA VE INCURRED LESS EXPENDITURE OR CHARGED MORE FEE FROM THE GROUP COMPANIES . SINCE THE EXPENDITURE INCURRED BY THE APPELLANT COMPANY IS ON THE HIGHER SIDE, THE AO HAS WORKED OUT MARK UP RATE @ 8% ON THE EXPENDITURE INCURRED BY THE APPELLANT COMPANY AND ARRIVED AT TO TAL SERVICES INCOME AT 6,07,15,147 . BY ARRIVING AT THE SERVICES INCOME AT 6,07 , 15,147 , THE AO HAS GIVEN CREDIT TO THE EXPENDITURE OF 5,62,17 , 729 DEBITED TO P & L ALE AND THE NET INCOME OF 44,97 , 418 WAS BROUGHT TO TAX AS PER THE COMPUTATION OF INCOME . THE DECISION OF THE AO APPEARS TO BE IN ORDER. SINCE THE SERVICE S RENDERED BY THE APPELLANT IS ONLY TO THE GROUP COMPANIES IN THE FORM OF MANAGEMENT AND MAINTENANCE SERVICES , THERE IS NO REASON WHY IT INCURS EXPENDITURE MORE THAN THE I NCOME RECEIVABLE FROM THE GROUP COMPANIES . ALTERNATIVELY, THE APPELLANT COMPANY SHOULD HAVE CHARGED MORE FEE TO TAKE CARE OF ITS EXPENDITURE . IT IS TRUE THAT THE I ACTIVITIES OF THE APPELLANT COMPANY ARE INDEPENDENT OF ITS GROUP COMPANIES AND PROFIT & LOSS CANNOT BE FORESEEN IN T HE BUSINESS ACTIVITIES, BUT IN THE CASE OF THE APPELLA NT KEEPING IN VIEW THE NATURE OF SERVICES RENDERED BY IT, IT SHOULD NOT INCUR LOSSES OF THE MAGNITUDE SHOWN BY I T . IT COULD HAVE MANAGED ITS INCOME AND EXPENDITURE SUCH A WAY THAT THERE WILL NOT BE ANY NET LOSSES BY THE END OF THE YEAR . THEREFORE, THE METHOD OF MARK UP ADOPTED ITA NO.1255/MDS/2015. :- 7 -: BY THE AO BASED ON THE EXPENDITURE INCURRED IS IN ORDER AND I AGREE WITH HIM . THE GROUND IS DISMISSED. AGGRIEVED BY THE ORDER OF COMMISSIONER OF INCOME TA X (APPEALS), THE ASSESSEE ASSAILED AN APPEAL BEFORE TRIBUNAL. 5. BEFORE US, THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE REITERATED THE GROUNDS AND SUBMISSIONS MADE IN THE ASSESSMENT PROCEEDINGS. THE GROUNDS RAISED ON THE MARKUP THAT THE ASSESSING OFFICER HAS ARBITRARY MARKED UP THE RATE 8% ON THE OPERATIVE COST OF THE ASSESSEE COMPANY FOR THE SISTER COMPANY WHICH I S NOT IN ORDER. THE ASSESSEE HAVING A LONG STANDING RELATIONSHIP WI TH THE SISTER COMPANIES ON FINANCIAL ASPECTS AND CHARGING OF SE RVICE FEES IS BASED ON ESTIMATION OF INCOME BEING FIRST YEAR. THE AS SESSING OFFICER ERRED IN MARK UP THE COST WITHOUT ANY RATIONALITY AND DEC ISIVE FACTORS AND SUPPORTED THE ARGUMENTS WITH THE DECISIONS OF TRIBU NALS AND PRAYED THE ACTION OF THE ASSESSING OFFICER IS BAD IN LAW A ND PLEADED TO ALLOW THE APPEAL OF THE ASSESSEE. 6. CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE FINDINGS OF THE ASSESSING OFFICER AND COMMISSIONER OF INCOME TAX (APPEALS) AND VEHEMENTLY OPPOSED THE GROUNDS OF THE APPEAL AND PRAYED FOR DISMISSAL OF APPEAL. ITA NO.1255/MDS/2015. :- 8 -: 7. WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERI AL ON RECORD AND JUDICIAL DECISIONS CITED. THE ONLY ISSUE THAT THE LD. AUTHORISED REPRESENTATIVE EMPHASIZED THE BASIS OF M ARK UP BY THE LD. ASSESSING OFFICER AT 8% ON TOTAL OVERALL COST. TH E ASSESSEE COMPANY ENGAGED IN DEVELOPMENT OF IT PARKS, MANAGERIAL AND TECHNICAL SERVICES TO THE INDUSTRIAL PARK AND SEZ AND INCOME OF THE ASSESSEE IS HAVING DIRECT NEXUS WITH THE OPERATIONS OF SEZ SIS TER CONCERNS. FOR SISTER CONCERNS, THERE IS A OPERATIONAL DIFFICULTY TO WORK 100% CAPACITY DUE TO VARIOUS CONTRIBUTING FACTORS LIKE LABOUR, W AGES AND ADMINISTRATIVE COST. WHEN THE INDUSTRIAL PARK OPER ATES AT OPTIMUM LEVEL DUE TO VOLUME OF BUSINESS IT INDIRECTLY INCR EASE THE SERVICE CHARGES PAYABLE TO THE ASSESSEE AND REALISTIC INHER ENT REASONS FOR THE METHOD OF ACCOUNTING INTEGRATED WITH SISTER COMPANI ES. THE BASIS OF THE ASSESSING OFFICER TO MARK UP 8% COST RELYING ON THE SIMILAR PROJECT CONSULTANCY OF OTHER ASSESSEE. THE LD. ASS ESSING OFFICER SELECTED THE PROFIT PERCENTAGE OF OTHER ENTITIES DI FFER ON MANGEMENT FUNCTIONALITIES AND BUSINESS PROPOSITIONS. THE L D. ASSESSING OFFICER HAS NOT CONDUCTED ANY INDEPENDENT INVESTIGATION TO SUPPORT THAT THERE IS UNDER VALUATION OF SERVICES BY THE ASSESS EE AND NO COMPARABLES OF ENTERPRISES WERE PROVIDED TO SHOW TH AT AMOUNT CHARGED TO THE GROUP COMPANY IS REASONABLY VERY LO W. THE ASSESSING OFFICER ARBITARILY RELIED ON THE FINDINGS OF THE AS SESSEE AND MARKED UP ITA NO.1255/MDS/2015. :- 9 -: THE COST BY 8% WITHOUT CONSIDERING THE SUBMISSIONS AND VALUABLE INFORMATION ON DISPUTED ISSUED OF THE ASSESSEE. TH E CHARGING OF FEES IS NOT DEFINITE MEASURING CRITERIA AS IT DIFFERS F ROM COMPANY POLICIES. THE ASSESSEE COMPANY CLARIFIED ON CHARGEABILITY OF FEES DURING CONSTRUCTION STAGE AND POST CONSTRUCTION WITH SUPPO RTING EVIDENCE AND ANALOGY OF SERVICE FEES AND THE REVENUE FOR THE FIRST TIME HAS RAISED SUCH OBJECTIONS AND SIMILAR ISSUE WAS DEALT IN THE GROUP COMPANIES OF THE ASSESSEE BY THE TRIBUNAL IN ITA N O.3/BANG/2014, DATED 04.12.2015 WERE THE TRIBUNAL OBSERVED AT PAG E 16 PARA 6 AS UNDER:- 6. THE NEXT QUESTION ARISES REGARDING THE ESTIMAT ION OF THE INCOME OF THE ASSESSEE. THE ASSESSING OFFICER PROCE EDED TO ESTIMATE THE INCOME OF THE ASSESSEE BY TAKING INTO CONSIDERATION THE PROFIT OF THE ENTITIES CHOSEN BY THE ASSESSING OFFICER. THEREFORE INSTEAD OF DETERMINING THE ALP OF THE SER VICES RENDERED BY THE ASSESSEE TO ITS AE, THE ASSESSING O FFICER PROCEEDED TO ESTIMATE THE INCOME OF THE ASSESSEE ON THE BASIS OF PROFITS OF SOME SELECTED PARTIES. IN THE CASE WHEN THE ASSESSING OFFICER HAS A REASON TO BELIEVE THAT THE ASSESSEE H AS NOT CHARGED THE PRICE FROM THE RELATED PARTIES AT ARMS LENGTH, THEN THE ASSESSING OFFICER COULD HAVE PROCEED TO DETERMINE T HE ALP BY SELECTING THE INDEPENDENT TRANSACTIONS BETWEEN THE UNREJECTED PARTIES. BUT INSTEAD OF DETERMINING ALP THE ASSESSI NG OFFICER HAS ESTIMATED THE INCOME WHICH IS NOT PERMISSIBLE W HEN THE ACCOUNTS OF THE ASSESSEE WERE NOT FOUND IN ANY DEFI CIENCY OR SUFFERING FROM ANY DEFECT. IT IS PERTINENT TO NOTE THAT THE PROFIT OF AN ENTITY IS EFFECTED BY VARIOUS FACTORS INCLUDING THE FIXED COST, THE CAPACITY AT WHICH THE PARTICULAR ENTITY FUNCTIO NS IN COMPARISON TO ITS TOTAL CAPACITY AND FURTHER THE ST AGE OF THE BUSINESS OF A PARTICULAR ENTITY WHETHER IT IS THE I NITIAL STAGE OR AFTER STABILIZATION OF THE BUSINESS ACTIVITY. IN TH E CASE ON HAND, THE ASSESSING OFFICER HAS ACCEPTED THE SERVICE CHAR GES CHARGED BY THE ASSESSEE TO ITS AES, IN THE SUBSEQUENT ASSES SMENT YEARS. IT IS REPRODUCED BY THE ASSESSING OFFICER IN THE IMPU GNED ASSESSMENT ORDER THAT THE ASSESSEE HAS EARNED THE P ROFITS IN THE ITA NO.1255/MDS/2015. :- 10 -: SUBSEQUENT ASSESSMENT YEARS. THE REVENUE HAS NOT DI SPUTED THE FACT THAT THE EARLIER ASSESSMENT YEAR AS WELL AS SU BSEQUENT ASSESSMENT YEAR, THE PRICE CHARGED BY THE ASSESSEE TO ITS PARTIES THE SERVICES RENDERED BY THE ASSESSEE ARE ACCEPTED BY THE ASSESSING OFFICER. IT IS ALSO NOT IN DISPUTE THAT T HE PRICE CHARGED BY THE ASSESSEE TO ITS RELATED PARTIES ARE UNDER TH E SAME SERVICE AGREEMENT IN THE EARLIER ASSESSMENT YEAR, THE ASSES SMENT YEAR UNDER CONSIDERATION AND SUBSEQUENT ASSESSMENT YEAR. FURTHER, EXCEPT THE ASSESSMENT YEAR UNDER CONSIDERATION THE ASSESSING OFFICER HAS NOT DOUBTED THE SERVICE CHARGES RECEIVE D BY THE ASSESSEE UNDER THE SAME AGREEMENT AND ONLY IN THE A SSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSING OFFICER CON CLUDED THAT 'THE PRICE CHARGED BY. THE ASSESSEE IS UNDERVALUED. THOUGH THE DOCTRINE OF RES JUDICATE IS NOT APPLICABLE IN THE M ATTER OF TAXATION HOWEVER, WHEN THE FACTS AND CIRCUMSTANCES ARE IDENT ICAL AND THERE IS NO CHANGE EVEN IN THE PRICE CHARGED DURING THE YEAR UNDER CONSIDERATION IN COMPARISON TO THE EARLIER AS SESSMENT YEAR AS WELL AS SUBSEQUENT ASSESSMENT YEAR THE ASSE SSING OFFICER IS NOT PERMISSIBLE TO TAKE A DIFFERENT A VIEW BY PI CKING AND CHOOSING A PARTICULAR ASSESSMENT YEAR. THEREFORE, THE RULE OF CONSISTENCY DEMAND, THAT THE ASSESSING OFFICER CANN OT TAKE A DIFFERENT VIEW IN A PARTICULAR ASSESSMENT YEAR WITH OUT POINT OUT ANY CHANGE IN THE FACTS AND CIRCUMSTANCES FOR THAT PARTICULAR ASSESSMENT YEAR. THUS WHEN THE ASSESSING OFFICER HA S ALREADY ACCEPTED THAT THIS PRICE CHARGED BY THE ASSESSEE TO THE RELATED PARTIES UNDER THE SAME AGREEMENT IN THE EARLIER ASS ESSMENT YEARS AS WELL AS IN THE SUBSEQUENT YEARS THEN PICKI NG UP ONLY ONE ASSESSMENT YEAR ON THE GROUND THAT THE ASSESSEE HAS INCURRED A HUGE LOSS IS NOT PERMISSIBLE TO REJECT THE BOOKS OF ACCOUNTS AND ESTIMATE THE INCOME BY THE ASSESSING OFFICER. THE R EVENUE HAS ALSO NOT DISPUTED THAT THE PRICE CHARGED BY THE ASS ESSEE IN THE EARLIER ASSESSMENT YEAR FOR THE YEAR UNDER CONSIDER ATION UNDER AND SUBSEQUENT ASSESSMENT YEAR THE SAME AGREEMENT, THEN THE ACTION OF THE ASSESSING OFFICER IS NOT WARRANTED TO REJECT THE BOOKS OF ACCOUNTS. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY MERIT OR SUBSTANCE IN THE APPEAL OF THE REVENUE, THE SAME DESERVES DISMISSAL. CONSIDERING THE ABOVE DECISION, WE SET ASIDE THE OR DER OF COMMISSIONER OF INCOME TAX (APPEALS) AND DIRECT THE ASSESSING ITA NO.1255/MDS/2015. :- 11 -: OFFICER TO DELETE THE MARK UP AND PASS THE ORDERS. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.1255/MDS/2015 IS ALLOWED. ORDER PRONOUNCED ON THURSDAY, THE 28TH DAY OF APR IL, 2016, AT CHENNAI. SD/- SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER ( . ! ) (G. PAVAN KUMAR) /JUDICIAL MEMBER / CHENNAI 2 / DATED:28.04.2016 KV 3 ( *',45 65%, / COPY TO: 1 . &' / APPELLANT 3. 7, () / CIT(A) 5. 589 *',' / DR 2. *+&' / RESPONDENT 4. 7, / CIT 6. 9:$ ; / GF