DCIT, New Delhi V. M/s Bry Air (Asia) P. Ltd., Delhi

ITA 1260/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77793 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-07-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 05-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SRINIVAS KUMAR; A MISHRA
• Assessee Lawyers: S K BAJAJ
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI A.T. VARKEY : JUDICIAL MEMBER ITA NO. 1260/DEL/2013 ASSTT. YR: 2009-10 DCIT, CIRCLE 3(1), VS. M/S BRY AIR (ASIA) P. LTD ., NEW DELHI. 20, RAJPUR ROAD, CIVIL LINES, DELHI-110054. PAN: AAACB 4050 A ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI A. MISHRA CIT (DR) & B. SRINIVAS KUMAR DR RESPONDENT BY : SHRI S.K. BAJAJ CA DATE OF HEARING : 02-07-2014 DATE OF ORDER : ____-07-2014. O R D E R PER S.V. MEHROTRA, A.M:- THIS APPEAL, BY THE DEPARTMENT, IS DIRECTED AGAINST ORDER DATED 27-12- 2012 PASSED BY THE LD. CIT(A)-VI, NEW DELHI IN APPE AL NO. 242/11-12 RELATING TO A.Y. 2009-10. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IN THE RELEVANT ASSESSMENT YEAR WAS ENGAGED IN MANUFACTURE OF ENVIRONMENTAL CO NTROL DEVICES, WHICH COMPRISED OF DEHUMIDIFIERS, HEAT RECOVERY SYSTEMS, PLASTIC DRYERS ETC. THE ITA 1260/DEL/13 DCIT VS. M/S BRY AIR (ASIA) (P) LTD. 2 ASSESSEE HAD FILED ITS RETURN OF INCOME DECLARING I NCOME OF RS. 19,87,14,340/-. THE ASSESSMENT WAS COMPLETED AFTER MAKING AN ADDITION OF RS. 76,77,037/- ON ACCOUNT OF EXCESSIVE COST OF PRO DUCTION, CLAIMED BY THE ASSESSEE, WHICH WAS DELETED BY LD. CIT(A) FOR THE D ETAILED REASONING GIVEN IN HIS ORDER. BEING AGGRIEVED WITH THE ORDER OF LD. CIT(A) NOW THE ASSESSEE IS IN APPEAL BEFORE US. 2.1. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE AS SESSING OFFICER NOTICED THAT ASSESSEE IN SCHEDULE 16 OF ITS P&L A/C HAD SHO WN THE VALUE OF RAW MATERIAL CONSUMED AT RS. 23,65,44,763/-. HOWEVER, I N THE TAX AUDIT REPORT, FOLLOWING DETAILS WERE REFLECTED: (A) GROSS PROFIT/ TURNOVER 378,466,557 / 694,081, 281 54.53 OPENING STOCK 79,370,383 ADD: PURCHASES 242,630,735 EXCISE DUTY PAID 39,368,317 MANUFACTURING EXPENSE 38,242,406 TOTAL: 399,611,841 LESS: SALES 694,081,281 CLOSING STOCK 83,997,117 TOTAL: 778,078,398 GROSS PROFIT: 378,078,398 2.2. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO FURNISH DETAILS OF MATERIAL CONSUMED ALONG WITH ITS RECONCILIATION WIT H THE TAX AUDIT REPORT. THE ASSESSEE FILED FOLLOWING RECONCILIATION: ITA 1260/DEL/13 DCIT VS. M/S BRY AIR (ASIA) (P) LTD. 3 RECONCILIATION OF SALES GROSS SALES AS PER SCHEDULE-13 699149504 LESS: SCRAP SALES (NON-OPERATING INCOME) 5 068223 694081281 LESS: SALES OF MANUFACTURED GOODS SHOWN IN 16(A) OF SCHEDULE-20 687764620 LESS: SALES OF TRADED GOODS SHOWN IN 16(B) OF SCHEDULE 20 6316661 694081281 DIFFERENCE NIL RECONCILIATION OF CLOSING STOCK OF FINISHED & TRADE D GOODS MANUFACTURED GOODS AS PER SCHEDULE-7 16939792 TRADED GOODS AS PER SCHEDULE-7 4216005 21155797 LESS: CLOSING STOCK OF MANUFACTURED GOODS SHOWN IN 16(1) OF SCHEDULE-20 16939792 LESS: CLOSING STOCK OF TRADED GOODS SHOWN IN 16(B) IN SCHEDULE-20 4216005 21155797 DIFFERENCE NIL RECONCILIATION OF CONSUMPTION OF MATERIALS RAW MATERIALS CONSUMED AS PER SCHEDULE 16 236544 763 GOODS PURCHASED FOR RESALE AS PER SCHEDULE 16 2298398 238843161 LESS: RAW MATERIALS CONSUMED AS PER 14 OF SCHEDULE 20 236544763 LESS: TRADED GOODS PURCHASED AS PER 169B OF SCHEDULE 20 2298398 238843161 DIFFERENCE NIL 2.3. THE ASSESSING OFFICER REFERRED TO SCHEDULE 20 OF THE BALANCE-SHEET BEING THE NOTES TO THE FINANCIAL STATEMENTS AND POI NTED OUT THAT AT SL. NO. 16 PARTICULARS IN RESPECT OF PRODUCTION, STOCK AND SAL ES WERE GIVEN, WHICH, INTER ALIA, INCLUDED RAW-MATERIAL REMOVED AS SUCH RS. 1,6 8,83,741/-. THE ASSESSEE ITA 1260/DEL/13 DCIT VS. M/S BRY AIR (ASIA) (P) LTD. 4 EXPLAINED THAT THE PHRASE RAW MATERIALS REMOVED AS SUCH HAD BEEN ADOPTED FROM THE CENTRAL EXCISE ACT AND IT HAD NO RELATION WITH CONSUMPTION OF RAW MATERIALS. THE ASSESSEE FURTHER EXPLAINED THAT IT W AS PROVIDING AFTER SALES SERVICES TO ITS CUSTOMERS AND, THEREFORE, ASSESSEE HAD SOLD COMPONENTS AND SPARES TO ITS CUSTOMERS AFTER MAKING PROPER TESTING WITH REGARD TO THEIR USEFULNESS AND THIS HAD BEEN SHOWN AS RAW MATERIALS REMOVED AS SUCH. THEREFORE, SALES VALUE OF COMPONENTS COULD NOT BE R EDUCED WHILE CALCULATING THE RAW MATERIALS CONSUMED FOR PRODUCTION OF FINISH ED GOODS. 2.4. IT WAS EXPLAINED THAT SALE OF RAW MATERIALS OF RS. 1,68,83,741/- , WHICH WERE SOLD AFTER TESTING AND PROCESSING EXCISE DUTY AS PER LAW, HAD BEEN CHARGED ON THESE COMPONENTS. THE COST OF MATER IAL SOLD WAS INCLUDED IN MATERIAL CONSUMED. THE ASSESSING OFFICER, HOWEVE R, DID NOT ACCEPT THE ASSESSEES CONTENTION FOR THE FOLLOWING REASONS: THE ASSESSEE IN ITS LETTER DT. 21-12-2011 HAS CLAI MED THAT THIS REFLECTS THE SALES VALUE OF COMPONENTS AND SPARES M ADE DURING THE YEAR. HOWEVER, THE SAME IS NOT FACTUALLY CORREC T SINCE THE STOCK AND PRODUCTION OF GOODS MANUFACTURED DURING T HE YEAR HAS BEEN SHOWN SEPARATELY. IT HAS SPECIFICALLY BEEN MENTIONED IN SCHEDULE 20 IN NO UNCERTAIN TERMS THAT THE SALE OF RS. 1,68,83,441 REPRESENTS THE SALE OF RAW MATERIALS REMOVED A SUCH WITHOUT ANY VALUE ADDITION. ASSESSEE HAS CLAIMED THAT THE ABOVE IS A RESULT OF MISCLASSIFICATION WHERE THE COMPONENTS AND SPARES S OLD WERE SHOWN AS RAW MATERIALS. THIS CONTENTION OF THE AS SESSEE IS NOT ACCEPTABLE SINCE IN CLAUSE-16 OF THE SCHEDULE-2 0, THE SALE OF SPARES ETC. HAVE BEEN SEPARATELY SHOWN UNDER T HE ITA 1260/DEL/13 DCIT VS. M/S BRY AIR (ASIA) (P) LTD. 5 MISCELLANEOUS CLASS OF GOODS OUT OF WHICH SALES W ORTH RS. 1,99,22,803 WAS EFFECTED DURING THE YEAR. THE ASSESSEE HAS TRIED TO RECONCILE THE VALUE OF R AW MATERIALS SOLD BY THE HELP OF INVOICES PERTAINING TO THE SALE OF PARTS OF DEHUMIDIFIER ETC. HOWEVER, THE RECONCILIATION AS S UBMITTED IS ALSO NOT ACCEPTABLE SINCE THE RECONCILIATION IGNORE S THE VALUE OF PACKING CHARGED EVEN THOUGH THE SAME HAS BEEN A P ART OF THE INVOICE RAISED. THE ASSESSEE HAS FAILED TO CORROBORATE ITS CLAIMS W ITH THE SUPPORT OF BILLS AND INVOICES A WELL AS BOOKS OF AC COUNTS. THUS, THE FACT THAT THE RAW MATERIALS SOLD ACTUALLY REPRE SENTS STORES AND SPARES MANUFACTURED DURING THE YEAR COULD NOT B E ESTABLISHED. NO STOCK REGISTER WAS PRODUCED TO PROVE THAT THE MA TERIAL SOLD FOR RS. 1,68,83,441 REPRESENTS STORES AND SPARES PR ODUCED OUT OF RAW MATERIALS CONSUMED. 2.5. THE ASSESSING OFFICER, ACCORDINGLY, HELD THAT SINCE THE SAME MATERIAL HAS BEEN CLAIMED TO HAVE BEEN USED FOR CONSUMPTION AS WELL AS FOR SALE, THEREFORE, COST OF PRODUCTION HAD BEEN INFLATED AND CONSEQUENTLY THE VALUE OF THE CLOSING STOCK OF THE ASSESSEE HAD BEEN SUPPRESS ED. ACCORDINGLY, HE MADE ADDITION OF RS. 76,77,037/- REPRESENTING THE VALUE BY WHICH THE COST OF PRODUCTION HAD BEEN INFLATED. 2.6. BEFORE LD. CIT(A) THE ASSESSEE EXPLAINED THE MODUS OPERANDI OF SALES AND POINTED OUT THAT APART FROM SALE OF FINISHED GO ODS, THE ASSESSEE COMPANY ALSO SOLD SPARE PARTS AND COMPONENTS WHILE PROVIDIN G AFTER SALES SERVICES TO ITS CUSTOMERS WHEREIN IT HAD CARRIED OUT REPAIRS O F MACHINES SUPPLIED. IN THE ITA 1260/DEL/13 DCIT VS. M/S BRY AIR (ASIA) (P) LTD. 6 PROCESS OF PROVIDING AFTER SALES SERVICES, IT REPLA CES WORN OUT AND DEFECTIVE COMPONENTS WITH THE SPARE PARTS AND COMPONENTS WHIC H IT WAS PURCHASING FROM VENDORS AFTER TESTING AND CONFIGURING ACCORDIN G TO THE REQUIREMENT OF THE SPECIFIC MACHINE. THESE COMPONENTS WERE CLASSIF IED AS UNDER: (A) RAW MATERIAL SOLD AS SUCH (B) COMPONENTS (C) TRADED GOODS. 2.7. IN REGARD TO RAW-MATERIAL SOLD AS SUCH, THE AS SESSEE CLARIFIED THAT IT IS REGISTERED WITH THE CENTRAL EXCISE SINCE ITS PRODUC TS ARE SUBJECT TO EXCISE DUTY. AS PER THE EXCISE LAWS, THE CENVAT CREDIT WAS AVAILABLE IF EXCISE DUTY HAD BEEN PAID ON INPUT. THE RAW MATERIAL OR COMPONE NT ON WHICH THE ASSESSEE HAD PAID EXCISE DUTY SOLD TO THE CUSTOMERS FOR MAINTENANCE OF THE EQUIPMENT WERE CLASSIFIED AS RAW MATERIALS REMOVED AS SUCH. FURTHER, THE ASSESSEE COMPANY HAD CHARGED EXCISE DUTY ON THE MAT ERIAL SO SOLD WHICH IS EVIDENT FROM THE INVOICES WHICH WERE FILED DURING T HE COURSE OF ASSESSMENT PROCEEDINGS. 2.8. LD. CIT(A) DELETED THE ADDITION FOR THE FOLLOW ING REASONING (I) THE CONFUSION WAS CAUSED BECAUSE OF VARIOUS TERMINO LOGY USED IN NOTE 16 OF SCHEDULE 20 OF THE AUDITED ACCOUNTS. THE CLASSIFICATION OF RAW-MATERIAL REMOVED AS SUCH AND SPARS IN THE SA ID SCHEDULE HAD LED TO THE IMPUGNED ADDITIONS. SUCH CLASSIFICATION CANNOT BE THE BASIS FOR MAKING ANY ADDITION. ITA 1260/DEL/13 DCIT VS. M/S BRY AIR (ASIA) (P) LTD. 7 (II) THE BASIC ISSUE IS THAT THE SALES OF ALL THE ITEMS HAD BEEN DULY RECORDED IN THE BOOKS OF A/C AND HAD BEEN REFLECTED IN THE SALES VALUE OF THE AUDITED ACCOUNTS. THE DETAIL OF INVOIC ES AND COPIES OF BILLS HAD BEEN FILED WHICH GAVE THE DESCRIPTION OF THE GOODS. (III) COST OF ALL THE MATERIAL I.E. RAW MATERIAL REMOVED AS SUCH, COMPONENTS AND TRADING GOODS HAD BEEN DULY AND PROP ERLY BOOKED UNDER THE APPROPRIATE HEAD I.E. COST OF RAW MATERIA L REMOVED AS SUCH, COST OF COMPONENTS WAS INCLUDED IN RAW MATERI AL AND MANUFACTURING COST AND TRADING GOODS HAD BEEN BOOKE D UNDER PURCHASES OF TRADING GOODS. (IV) THE ALLEGATION OF ASSESSING OFFICER THAT THE MATER IAL USED FOR CONSUMPTION COULD NOT BE SOLD WAS CONTRARY TO THE F ACTS OF THE CASE SINCE THE SPARES WERE EVEN REQUIRED FOR MAINTENANCE AND AFTER SALES SERVICES. (V) THE ALLEGATION THAT THE COST OF SUCH MATERIAL HAD B EEN CHARGED MORE THAN ONCE WAS WITHOUT ANY BASIS AND PURELY ON SUSPICION AND SURMISES, IGNORING THE FACT THAT THE ACCOUNTS OF TH E ASSESSEE COMPANY WERE AUDITED AND EXCISE DUTY WAS APPLICABLE ON ITS PRODUCTS. (VI) THE STATUTORY RECORDS WERE SUBJECT TO VERIFICATION BY THE EXCISE AUTHORITIES. (VII) THE PACKING MATERIAL OF RS. 74,743/- HAD NOT BEEN I NCLUDED SINCE NO EXCISE DUTY HAD BEEN CHARGED ON THE SAME AND WAS NOT UNDER THE CLASSIFICATION OF RAW MATERIAL REMOVED AS SUCH . (VIII) THE ASSESSING OFFICER DID NOT VERIFY THE STOCK RECO RDS. (IX) THE ASSESSEE COMPANY HAD DECLARED G.P. RATIO OF 54. 53% WHICH WAS DULY VERIFIED AND CERTIFIED BY THE TAX AUDITORS AND THE ITA 1260/DEL/13 DCIT VS. M/S BRY AIR (ASIA) (P) LTD. 8 ASSESSING OFFICER HAD NOT BROUGHT ON RECORD THAT TH ERE HAD BEEN ANY VIOLENT FLUCTUATION IN THE GROSS PROFIT AS COMPARED TO EARLIER YEARS, WHICH WERE ACCEPTED IN EARLIER YEARS. 2.9. AGGRIEVED, REVENUE IS BEFORE US. 3. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND HAVE PERUSED THE RECORD OF THE CASE. THE SHORT DISPUTE I S WHETHER ASSESSEE HAS CLAIMED INFLATED COST OF PRODUCTS BY FIRST CLAIMING IT AS A PART OF COST OF PRODUCTION OF MANUFACTURED GOODS AND ALSO AS RAW MA TERIAL REMOVED A SUCH, SHOWN UNDER THE HEAD SALES. IT IS NOT DISPUTED TH AT ASSESSEE IS PROVIDING AFTER SALES SERVICES ALSO AND THE SPARE PARTS AND C OMPONENTS ARE EITHER MANUFACTURED BY THE COMPANY OR ARE PURCHASED FROM V ENDORS. IF THE PRODUCTS ARE SOURCED FROM DIRECT MANUFACTURERS, EXC ISE DUTY WAS CHARGED BY THE VENDOR. IF THE SAME WAS BEING SOURCED FROM THE DEALERS, EXCEPT FIRST/ SECOND STAGE DEALERS, EXCISE DUTY WAS NOT CHARGED B Y THEM. IN THE PROCESS OF PROVIDING AFTER SALES SERVICES, ASSESSEE REPLACED W ORN OUT AND DEFECTIVE COMPONENTS WITH SPARE PARTS AND COMPONENTS WHICH W AS PURCHASED FROM VENDORS AND AFTER TESTING AND CONFIGURING ACCORDING TO THE OF THE SPECIFIC MACHINES. THE ASSESSEE HAD CLASSIFIED ITS COMPONENT S UNDER THREE HEADS VIZ. RAW MATERIAL SOLD AS SUCH, COMPONENTS; AND TRA DED GOODS. IN ORDER TO APPRECIATE THE CONTROVERSY, FIRST OF ALL WE REFER T O THE P&L A/C OF ASSESSEE, CONTAINED AT PAGE 14 OF THE PAPER BOOK. IN THE P&L A/C, GROSS SALES HAVE ITA 1260/DEL/13 DCIT VS. M/S BRY AIR (ASIA) (P) LTD. 9 BEEN SHOWN AT RS. 69,91,49,504/-, AS PER SCHEDULE 13 TO THE P&L A/C AND THE MATERIAL CONSUMPTION HAVE BEEN SHOWN AT RS. 23, 88,43,161 AS PER SCHEDULE 16 TO THE P&L A/C. THE NOTES TO THE FINANC IAL STATEMENTS ARE CONTAINED IN SCHEDULE 20. IN SCHEDULE 13 (PAGE 21 O F PB), THE GROSS SALES HAVE BEEN SHOWN AS UNDER: SCHEDULE-13 GROSS SALES OPERATING SALES - DOMESTIC SALES 449,437,784 - EXPORT SALES 244,643,497 - SCRAP SALES 5,069,223 699,149,504 3.1. IN SCHEDULE 16, THE CONSUMPTION OF MATERIAL HA VE BEEN SHOWN AS UNDER: SCHEDULE-16 MATERIALS RAW MATERIALS CONSUMED. 236,544,763 GOODS PURCHASED FOR RESALE 2,298,398 238,843,161 3.2. IN SCHEDULE 20 TO THE NOTES TO THE FINANCIAL S TATEMENTS AT PAGE 34, THE CONSUMPTION OF RAW-MATERIALS HAS BEEN SHOWN AS UNDE R: CONSUMPTION OF RAW MATERIALS (INCLUDING COMPONENTS, STORES AND SPARES PARTS) STEEL MATERIAL 985.90 MT 59,697,780 OTHER MATERIALS 176,846,983 TOTAL: 236,544,763 VALUE OF IMPORTED AND INDIGENOUS RAW MATERIALS, COM PONENTS, STORES AND SPARE PARTS CONSUMED IMPORTED 21,257,194 INDIGENOUS 215,287,569 TOTAL: 236,544,763 ITA 1260/DEL/13 DCIT VS. M/S BRY AIR (ASIA) (P) LTD. 10 3.3. IN SCHEDULE 20 AT SL. NO. 16, THE ASSESSEE HAS GIVEN DETAILS OF PRODUCTION, STOCKS AND SALES SEPARATELY OF MANUFACT URED GOODS AND TRADED GOODS. THE TOTAL SALES OF MANUFACTURED GOODS OF RS. 687,764,620/-, INCLUDES THE SALE OF RAW MATERIAL REMOVED AS SUCH OF RS. 1, 68,83,741/-.THE TOTAL SALE OF TRADED GOODS WAS RS. 63,16,661/-. 3.4. BOTH THESE FIGURES AGGREGATE TO RS. 694,081,28 1 AND AFTER INCLUDING THE FIGURE OF SCRAP SALES (AS PER SCHEDULE 13), AMO UNTING TO RS. 50,68,223/-, THE TOTAL SALES COMES TO RS. 699,149,504/-. 3.5. THUS, IT IS EVIDENT THAT THERE IS NO DIFFERENC E BETWEEN THE FIGURES OF CONSUMPTION OF RAW MATERIAL AS WELL AS SALES BETWEE N DIFFERENT SCHEDULES, AS REFERRED TO ABOVE. THEREFORE, LD. CIT(A) HAS VERY RIGHTLY OBSERVED THAT ASSESSING OFFICER WITHOUT BRINGING ANY MATERIAL ON RECORD, PURELY ON THE BASIS OF CONJECTURES AND SURMISES, GAVE A FINDING W HICH HAD NO BASIS. THE ASSESSEE HAD CLAIMED CENVAT CREDIT ON THE RAW MATE RIAL REMOVED AS SUCH AND NO CENVAT HAD BEEN CLAIMED ON THE SALE OF OTHER MAN UFACTURED GOODS AS PER THE CENVAT CREDIT RULES. AT PAGE 110 OF THE PB THE ASSESSEE HAS GIVEN EXTRACT OF CENVAT CREDIT RULES, IN WHICH IT IS POI NTED OUT THAT CENVAT CREDIT MAY BE UTILIZED FOR PAYMENT OF AN AMOUNT EQUAL TO C ENVAT CREDIT TAKEN ON INPUTS IF SUCH INPUTS ARE REMOVED AS SUCH OR AFTER BEING PARTIALLY PROCESSED. ITA 1260/DEL/13 DCIT VS. M/S BRY AIR (ASIA) (P) LTD. 11 3.6. LD. COUNSEL HAS REFERRED TO PAGE 89 OF THE PAP ER BOOK, WHEREIN THE DETAIL OF SALES OF RAW MATERIAL REMOVED AS SUCH DUR ING F.Y. 2008-09 IS CONTAINED WHICH IS AS PER THE EXCISE RECORDS. 3.7. LD. COUNSEL ALSO REFERRED TO VARIOUS INVOICES CONTAINED FROM PAGES 90 ONWARDS TO DEMONSTRATE THAT ALL THE INVOICES CONTAI NED INPUTS SOLD AS SUCH WITHOUT PROCESSING, WHICH ENTITLED THE ASSESSEE TO CLAIM CENVAT CREDITS. WE FIND THAT NO DISCREPANCY HAS BEEN POINTED OUT BY AS SESSING OFFICER IN THESE DOCUMENTS FILED BY THE ASSESSEE. THE FINDINGS OF LD . CIT(A) HAVE NOT BEEN CONTROVERTED. UNDER SUCH CIRCUMSTANCES, WE CONFIRM THE ORDER OF CIT(A). 3.8. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 18-07-2014. SD/- SD/- ( A.T. VARKEY ) ( S.V. MEHROTRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 18-07-2014. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR