ACIT, New Delhi V. M/s. Plaza Partners, New Delhi

ITA 1265/DEL/2012

• Counselvise Citation: 126520114 RSA 2012
• Duration Of Justice: 2 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 17-07-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 14-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S SINSHKI
• Assessee Lawyers: MANOJ KUMAR CHOPRA
• Keywords: Capital asset; Business income; Transactions in derivatives; Speculation loss
• Section: 143(3); 43(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI I.C. SUDHIR , JUDICIAL MEMBER AND SHRI T.S.KAPOOR , ACCOUNTANT MEMBER ITA NO. 1265 /DEL/20 12 ASSESSMENT YEAR : 2008 - 09 ACIT VS. PLAZA PARTNERS CIRCLE 31 (1), ROOM NO. 1 85A, 9 TH FLOOR, DLF CENTRE, C.R.BUILDING , I.P.ESTATE SANSAD MARG NEW DELHI NEW DELHI AAFFP2318P (APPELLANT) (RESPONDENT) ITA NO. 695/DEL/2013 ASSESSMENT YEAR : 2009 - 10 DCIT VS. PLAZA PARTNERS CIRCLE - 31(1), ROOM NO. 1405, 9 TH FLOOR 14 TH FLOOR, E - 2BLOCK, DLF CENTRE, SANSAD PRATYAKSHKAR BHAWAN, MARG DR. SHAYMA PRASAD MUKHERJEE CIVIC CENTRE, JAWAHAR LAL NEHRU MARG NEW DELHI NEW DELHI (APPELLANT) (RESPONDENT) A SSESSEE BY : SH. R.S. SINSHKI & SH. SATYAJEET GOEL, CA RESPONDENT BY : SH. MANOJ KUMAR CHOPRA , SR. DR O R D E R PER I.C. SUDHIR, J.M. ITA NO. 1265/DEL./2012 (A.Y. 2008 - 09) ITA NO. 1265 /D/20 12 & 695/D/2013 2 THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A) X X VI , NEW DELHI DATED 30/11/ 2012 AND PERTAINS TO ASSESSMENT YEAR 200 8 - 0 9 . 2. THE REVENUE HAS QUESTIONED FIRST APPELLATE ORD ER ON THE FOLLOWING ISSUES : - ( A ) : WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, CIT(A) WAS RIGHT IN DELETING THE ADDITION MADE BY THE AO REJECTING THE CLAIM OF DEDUCTION U/S 24(1) OF THE IT ACT TO THE TUNE OF RS. 4,25,24,212/ - IGNORING THE FACT THAT LEASING OF IMMOVABLE PROPERTIES IS BUSINESS ACTIVITY OF THE ASSESSEE? ( B ) : WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, CIT(A) WAS RIGHT IN DELETING THE ADDITION OF RS. 1,73,92,002/ - BY TREATING THE LASS INCURRED BY THE ASSESSEE ON FUTURE AN D OPTION AS SPECULATIVE IN THE ABSENCE OF THE EVIDENCE OF COMPLYING THE CONDITIONS AS SPECIFIED IN PROVISO (D) TO SECTION 43(5) OF THE IT ACT ? ISSUE NO. A 3. THE LD. AR POINTED OUT THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF DELHI BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. MESSERS ATIR PARTNERS, ITA NO. 2490 / D / 2012 (AY 2008 - 09) ORDER DATED 12.3.2014. IN THIS REGARD, HE REFERRED PARA NOS. 7 TO 7.4 OF THE ORDER. 4. THE RELEVANT FACTS ARE THAT ASSESEE FIRM IS ENG AGED IN THE BUSINESS OF SHARE TRADING. APART FROM BUSINESS INCOME, THE ASSESSEE HAD DISCLOSED INCOME FROM HOUSE PROPERTY , INCOME FROM CAPITAL GAIN AND INCOME FROM OTHER SOURCES IN THE RETURN OF INCOME. IT HAD DECLARED RENTAL INCOME OF RS. 14,17,47,374/ - U NDER THE HEAD HOUSE PROPERTY ON WHICH DEDUCTION OF RS. ITA NO. 1265 /D/20 12 & 695/D/2013 3 4,25,24,212/ - HAD BEEN CLAIMED AT 30% PROVIDED U/S 24(1) OF THE IT ACT. ON QUERY RAISED BY THE AO, THE ASSESSEE SUBMITTED THAT IT HAD RECEIVED RENTAL INCOME ON THE PLOT AND BUILDING ADMEASURING ABOUT 2 .11 ACRES SITUATED ON PHASE 1, DLF CITY, GURGAON. THE AO WAS NOT SATISFIED WITH THE SUBMISSION OF THE ASSESSEE DECLARING THE RENTAL INCOME AS INCOME FROM HOUSE PROPERTY. THE LD. CIT (A) HAS, HOWEVER, ALLOWED THE CLAIM OF THE ASSESSEE, AGAINST WHICH REVENUE IS IN APPEAL. 5 . IN SUPPORT OF THE GROUND THE LD. SR. DR HAS PLACED RELIANCE ON THE ASSESSMENT ORDER. HE POINTED OUT THAT FROM PARTNERSHIP DEED THE BUSINESS OF THE ASSESSEE ALSO CONSIST OF SALE AND LETTING OUT / RENTING OUT BUSINESS CENTRE. HENCE, THE RENTAL INCOME HAS RIGHTLY BEEN TREATED BY THE AO AS BUSINESS INCOME. HE SUBMITTED FURTHER THAT ON BUILDING WORTH RS. 35.9 CRORES EARNING OF RENT OF RS. 14.17 CRORE APPEARS TO BE DISPROPORTIONATE TO THE VALUE OF THE PROPERTY. HE ARGUED, FURTHER, THAT THE ASSESSEE HAS NOT CLAIMED DEDUCTION ON ACCOUNT OF MUNICIPAL TAXES, SALARY AND PERSONAL ADMINISTRATIVE CHARGES. HE ALSO PLACED RELIANCE OF DECISION OF THE HON BLE GUJARAT HIGH COURT IN THE CASE OF MESSERS NEHA BUILDERS VS. CIT, 226 ITR 661 HOLD ING THAT WHE RE ASSESSEE IS ENGAGED IN BUSINESS OF DEVELOPMENT, CONSTRUCTION, SALE AND LEASE OF MOVABLE PROPERTY, THE SAME IS BUSINESS AND NOT RENTAL INCOME. LD. SR. DR ALSO PLACED RELIANCE ON DECISION OF HON BLE ITA NO. 1265 /D/20 12 & 695/D/2013 4 SUPREME COURT IN THE CASE OF MC. DOWELL AND COMPANY LTD . VS. CTO 154 ITR 148(SC). 6 . LD. AR ON THE OTHER HAND TRIED TO JUSTIF Y THE FIRST APPELLATE ORDER WITH THE SUBMISSION THAT THE FACTS IN THE CASE OF M / S NEHA BUILDER VS. CIT (SUPRA) WERE DIFFERENT HENCE IT IS NOT RELEVANT IN THE PRESENT CASE. H E SUBM ITTED FURTHER THAT UNDER SIMILAR FACTS THE AO IN THE CASE OF PRESENT ASSESSEE IN THE ASSESSMENT YEAR 2007 - 08 IN THE ASSESSMENT FRAMED U/S 143(3) OF THE ACT H AS ACCEPTED THE CLAIMED RENTAL INCOME FROM HOUSE PROPERTY. SIMILARLY, IN THE ASSESSMENT YEAR 2008 - 0 9 THE SIMILAR CLAIM HAS BEEN ACCEPTED BY THE AO. 7 . HAVING GONE THROUGH THE ORDER OF THE AUTHORIT IES BELOW, MATERIAL AVAILABLE ON RECORD AND THE DECISION S RELIED UPON, WE FIND THAT THE FACTS IN THE CASE OF M / S NEHA BUILDERS (P) LTD. VS. CIT(SUPRA) ARE DISTINGUISHABLE FROM THE FACTS OF THE PRESENT CASE AS IN THAT CASE , T HE ASSESSEE THEREIN HAD SHOWN THE PROPERTY AS STOCK - IN - TRADE AND EXCEPT FOR THE GROUND FLOOR WHICH HAD BEEN LET OUT BY THE ASSESSSEE, ALL OTHER PORTIONS OF THE PROPERTY CONSTRUCTED HAD BEEN SOLD AND THE INCOME WAS, THEREFORE, ASSESSABLE AS BUSINESS INCOME IN THAT CASE SINCE, THE PROPERTY FROM THE BEGINNING WAS STOCK - IN - TRADE W HEREAS IN THE PRESENT CASE BEFORE US , THE PROPERTY HAS ALWAYS BEEN SHOWN AS CAPITAL FIXED ASSET AND NOT AS STOCK - IN - TRADE. ITA NO. 1265 /D/20 12 & 695/D/2013 5 CERTAIN MATERIAL FACTS SUBMITTED BY THE ASSESSEE HAS NOT BEEN REBUTTED BY THE REVENUE. THESE FACTS ARE THAT THE ASSESSEE IS OWNER OF THE COMMERCIAL PR E MISES I.E. DLF SQUARE AND NESTLE HOUSE LET OUT THROUGHOUT THE YEAR, THE ASSESSEE HAS ALWAYS TREATED AND SHOWN THIS PROPERTY AS A FIXED CAPITAL ASSET AND NOT STOCK - IN - TRADE UNITS BALANCE SHEET, ACCEPTED BY THE DEPARTMENT SINCE INCEPTION; THE TENANTS ARE DEDUCTING TAX AT SOURCE AT THE RATE AS SPECIFIED IN SECTION 194 - I OF THE ACT AND THERE IS NO CHANGE IN FACTS AND CIRCUMSTANCES OF THE CASE AS IN THE EARLIER YEARS TOO THE INCOME FROM LETTING OUT HAS BEEN RETURNED AND ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY . BEFORE THE LD. CITA, THE ASSESSEE HAS CITED SEVERAL DECISIONS IN SUPPO RT, OUT OF WHICH IN THE, DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF SCINDIA POTTERIES (P) LTD. VS. CIT(2002) 253 ITR 168 (DEL) , T HE ASSESSEE HAD DERIVED RENTAL INCOME BY LETTING OUT ITS GODOWNS. IT CLAIM ED THAT IT SHOULD BE TREATED AS BUSINE SS INCOME AND NOT ITS INCOME FROM HOUSE PROPERTY. THE ITO, HOWEVER, FOUND THAT THE ASSESSEE WAS RENTING BUSINESS OF MANUFACTURING POTTERY TILL 1972 73 , WHERE AFTER BUSINESS WAS STOPPED AND THE GODOWN WERE LET OUT TO ANOTHER CONCERN. AS THE GODOWN HAS SEIZED TO BE THE BUSINESS ASSETS ON ACCOUNT OF CLOSURE OF MANUFACTING BUSINESS, IT TREATED THE INCOME TO BE CHARGEABLE AS INCOME FROM THE HOUSE PROPERTY U/S 23 OF THE ACT. IT WAS NOTED THAT ASSET SEIZED TO BE COMMERCIAL ASSETS AND THEREFORE, INCOME WAS TO BE TREATED AS INCOME FROM HOUSE PROPERTY. LD. CIT ( A ) UPHELD THE VIEWS OF THE ASSESSING OFFICER. ITA NO. 1265 /D/20 12 & 695/D/2013 6 THE TRIBUNAL HOLD THAT THERE WAS CESSATION OF BUSINESS AND THE DEPARTMENT WAS RIGHT IN ITS CONCLUSION THAT INCOME WAS TAXABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY . THE HON BLE HIGH COURT APPROVED THE DECISION OF THE TRIBUNAL. 8 . UNDER ALMOST SIMILAR FACTS IN THE CASE OF ACIT VS. MESSERS ATRI PARTNERS (SUPRA) AN IDENTICAL ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE. WE, THUS, FIN D THAT THERE IS NO INFIRMITY IN THE FIRST APPELLATE ORDER ACCEPTING THE CLAIMED INCOME AS INCOME FROM THE HOUSE PROPERTY AND THE CLAIMED DEDUCTION U/S 24(1) OF THE ACT. THE SAME IS UPHELD. THE ISSUE NO. ( A ) IS THUS DECIDED IN FAVOUR OF THE ASSESSEE. 9 . ISSUE NO. ( B ) : A T THE OUTSET OF HEARING THE LD. AR POINTED OUT THAT ISSUE RAISED IS SQUARELY COVERED BY THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NASA FINELEASE (P) LTD. (2013) 358 ITR 305 (DEL). 10 . THE LD. SR. DR SUPPORTED THE ASSESSMENT ORDER ON THE ISSUE. 1 1 . THE FACTS IN BRIEF ARE THAT THE ASSESSEE HAD CLAIMED A LOSS ON FUTURE AND OPTION (DERIVATIVES) AMOUNTING TO RS. 1,73,92,002/ - WHICH WAS SET OF WITH THE PROFIT OF SHARES OF BRANCH AT RS. 1,88,32,896/ - . THE AO HE L D THAT THE LOSS ON FUTURE AND OPTION IS INTRADAY AND CANNOT BE SET OF AGAINST THE ITA NO. 1265 /D/20 12 & 695/D/2013 7 BUSINESS INCOME AS IT IS IN THE NATURE OF SPECULATIVE LOSS WHICH CANNOT BE SET OF AGAINST THE BUSINESS INCOME. HE OBSERVED FROM THE WORKING S H E E T OF THE FUTURE AND OPTION TRA NSACTION CARRIED OUT BY MESSERS PACE FINANCIAL SERVICES THAT THE PURCHASE AND SALE HAS BEEN MADE ON THE SAME DATE IN RESPECT OF SAME SHARES IN THE SAME CONTRACT NOTE WITHOUT ANY DELIVERY BEING TAKEN. THE AO ACCORDINGLY TREATED THE CLAIMED LOSS OF RS. 1,73, 92,002/ - AS SPECULATION LOSS AND ALLOWED TO BE THE CARRIED FORWARD TO SUBSEQUENT ASSESSMENT YEAR TO BE SET OF AGAINST SPECULATION PROFIT. THE LD. CIT ( A ) HAS, HOWEVER, ALLOWED THE CLAIM LOSS BY THE ASSESSEE. 1 2 . HAVING GONE THROUGH THE DECISION OF HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. NASA FINLEASE (P) LTD. (SUPRA) WE FIND THAT THE HON BLE HIGH COURT IN THAT CASE HAS BEEN PLEASED TO HOLD TRANSACTIONS IN DERIVATIVES ON RECOGNIZED STOCK EXCHANGE NOT AS DEEMED SPECULATIVE. THE SUBMISSION OF THE A SSESSEE IN THE PRESENT CASE BEFORE US REMAINED THAT THE TRANSACTION CARRIED IN FUTURE AND OPTIONS (DERIVA TIVES ) ARE OUTSIDE THE PURVIEW OF SPECULATION LOSS IN TERMS OF AMENDMENT MADE BY THE FINANCE ACT, 2005 WITH EFFECT FROM 1.4.2006 BY INSERTING CLAUSE (D) TO THE PROVISO TO SUB - SECTION (5) OF SECTION 43 OF THE ACT DEFINING THE MEANING OF S PECULATION TRANSACTION . IT WAS SUBMITTED THAT IN TERMS OF CLAUSE (AC) OF SECTION 2 OF THE SECURITIES CONTRACTS (REGULATION) ACT, 1956 (42 OF 1956) DERIVATIVE INCL UDES A SECURITY DERIVE FROM A DEBT INSTRUMENT, SHARE, LOAN, WHETHER ITA NO. 1265 /D/20 12 & 695/D/2013 8 SECURED OR UNSECURED, RISK INSTRUMENT OR CONTRACT FOR DIFFERENCES OR ANY OTHER FORM OF SECURITY, AND A CONTRACT WHICH DERIVES ITS VALUE FROM THE PRICES, OR ANY THAT IS OF PRICES, OF UNDERL YING SECURITIES. IT WAS SUBMITTED THAT THE DEALING IN DERIVATIVES WAS A REGULAR BUSINESS AND IT IS NOT THAT THE ASSESSEE HAS BEEN INCURRING LOSSES ALWAYS , AS IN THE IMMEDIATELY SUCCEEDING ASSESSMENT YEARS 2009 - 10, THE ASSESSEE HAS EARNED A PROFIT OF RS. 1, 49,85,721/ - ON TRADING IN FUTURE AND OPTIONS (DERIVATIVES). IN THE CITED DECISIONS IN THE CASE OF P .S.KAPOOR VS. ACIT (2009) 120 TTJ (JP) 422, 428, AND ACIT VS. HIREN JASWANTRAI SHAH (2011) 46 SOT 276 (AHD.) , B EFORE THE LD. CIT ( A ), ON WHICH LD. CIT (A) HAS RELIED UPON, H AS BEEN HELD THAT DERIV ATIVES TRANSACTION WOULD BE ELIGIBLE FOR BEING TREATED AS NON - SPECULATIVE TRANSACTION WITHIN THE MEANING OF CLAUSE (D) OF PROVISO TO SECTION 43(5) OF THE ACT. UNDER THESE BACKGROUND, WE ARE OF THE VIEW THAT THE LD. CI T ( A ) HAS RIGHTLY DELETED THE DISALLOWANCE OF THE CLAIMED LOSS OF RS. 1,73,92,002. THE ISSUE NO. B IS, THUS, DECIDED IN FAVOUR OF THE ASSESSEE. IN THE RESULT THE APPEAL IS DISMISSED. ITA NO. 695/DEL/2013 (A.Y. 2009 - 10) 1 3 . THE REVENUE HAS QUESTIONED FIR ST APPELLATE ORDER ON THE FOLLOWING GROUNDS : 1. THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 4,51,32,184/ - MADE BY THE AO BY TREATING RE NTAL INCOME AS BUSINESS INCOME. ITA NO. 1265 /D/20 12 & 695/D/2013 9 2. THE CIT(A) HAS ERRED IN DIRECTING THE AO TO ASSESS RENTAL INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY WITHOUT APPRECIATING THE FACT THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF BUILDING & LETTI NG OUT OF COMMERCIAL COMPLEXES. 3. THE CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS. 1,20,000/ - OUT OF TOTAL ADDITION OF RS. 7,76,200/ - CLAIMED U/S 57(III) OF THE IT ACT WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE COULD NOT PROVE THAT SUCH EXPENDITURE WAS EXPENDED WHOLLY & EXCLUSIVELY FOR THE P URPOSE OF EARNING SUCH INCOME. 4. THE ORDER OF THE CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 1 4 . GROUND NO S . 1 AND 2 : S IMILAR ARGUMENTS HAVE BEEN ADVANCED BY THE PARTIES AS THEY ARGUED ON ISSUE NO. A HEREINABOVE IN THE APPEAL FOR THE ASSESSMENT YEAR 2008 - 09. IN THE PRESENT YEAR THE ASSESSEE HAD DECLARED RENT AL INCOME OF RS. 15,4,40,614/ - UNDER THE HEAD HOUSE PROPERTY AND CLAIMED 30% DEDUCTION AMOUNTING TO RS. 4,51,32,144/ - AS PER THE PROVISIONS LAID DOWN IN SECTION 24(1) OF THE IT ACT. THE AO DID NOT AGREE AND DISALLOWED THE CLAIMED DEDUCTION . THE LD. CIT ( A) HAS, HOWEVER, ALLOWED THE CLAIMED DEDUCTION. UNDER SIMILAR FACTS AN IDENTICAL ISSUE HAS BEEN ADJUDICATED UPON AND DECIDED IN FAVOUR OF THE ASSESSEE HEREINABOVE IN THE APPEAL FOR THE ASSESSMENT YEAR 2008 - 09. FOLLOWING THE SAME, WE DO NOT FIND REASON TO I NTERFERE WITH THE FIRST APPELLATE ORDER IN THIS REGARD. THE SAME IS UPHELD. THE GROUND NOS. 1 AND 2 ARE ACCORDINGLY REJECTED. 1 5 . GROUND NO. 3 : THE LD. AR AT THE OUTSET OF HEARING POINTED OUT THE ISSUE RAISED IS COVERED BY THE ORDER DATED 12.3 .2014 OF THE TRIBUNAL IN THE ITA NO. 1265 /D/20 12 & 695/D/2013 10 CASE OF ACIT VS. MESSERS ATIRIA PARTNERS, IT A NO. 2490/DEL/2012 (AY2008 - 09) . IN THIS REGARD, HE REFERRED CONTAINS OF PARA NO. 14 OF THE ORDER. 1 6 . IN S UPPORT OF THE GROUND THE LD. SR. DR PLACED RELIANCE ON THE ASSESSMENT ORDE R. 1 7 . HAVING GONE THROUGH THE ORDERS OF THE AUTHORI TIES BELOW , WE FIND THAT THE AO DISALLOWED EXPENSES AMOUNTING TO RS. 7,06200/ - CLAIMED BY THE ASSESSEE AGAINST INCOME FROM OTHER SOURCES. THE ASSESSEE HAD DECLARED INCOME FROM OTHER SOURCES AMOUNTING T O RS. 80,46,782/ - . THE TOTAL EXPENSES OF RS. 12,07,029 WAS CLAIMED OUT OF WHICH THE ASSESSEE DISALLOWED A SUM OF RS. 4,30,829/ - . THE ASSESSEE CLAIMED DEDUCTION OF RS. 7,76,200/ - AGAINST INCOME FROM OTHER SOURCES. THE AO NOTED THAT IN ASSESSMENT YEAR 2008 - 09 THE TOTAL EXPENSES CLAIMED AGAINST INCOME FROM OTHER SOURCES WERE DISALLOWED. THE ASSESSEE PLEADED THE ADMISSIBILITY OF THE EXPENSES BE CONSIDERED AFRESH. THE AO HELD THAT SINCE THE ASSESSEE HAS NO GROUND TO CLAIM DEDUCTION OF EXPENSES AMOUNTING TO R S. 7,76,200/ - AGAINST THE INCOME FROM OTHER SOURCES AMOUNTING TO RS. 80,46,782/ - , THE SAME WAS DISALLOWED. CONSIDERING THE FACTS OF THE CASE AND SUBMISSIONS OF THE ASSESSEE THE LD. CIT ( A ) HELD THAT THE ASSESSEE HAS NOT BEEN ABLE TO JUSTIFY THE CLAIM OF THE ENTIRE EXPENSES. HE, HOWEVER, CONSIDERING THE NATURE OF EXPENDITURE BEING OFFICE MAINTENANCE, SALARY PAID, CONVEYANCE, ITA NO. 1265 /D/20 12 & 695/D/2013 11 LEGAL AND PROFESSIONAL EXPENSES FOUND IT UN JUSTIFIABLE TO ASSUME THAT NO EXPENSES WHATSOEVER HAS BEEN INCURRED FOR EARNING AN INCOME OF OVER RS. 80,00,000/ - FROM OTHER SOURCES. HE, THUS, KEEPING IN VIEW THE PROVISION OF SECTION 57 (III) OF THE ACT AND JUDICIAL DECISION S CITED BEFORE HIM ALLOWED A RELIEF OF RS. 1,20,000/ - I.E. AT THE RATE OF RS. 10,000/ - PER MONTH ON ACCOUNT OF EXPENSES OR MAINTENANCE OF ITS STATUS AS A FIRM. HE ACCORDINGLY, SUSTAIN ED THE ADDITION OF RS. 6,06,200/ - . WE FIND THAT THE FIRST APPELLATE ORDER IS REASONED ONE, HENCE, NO INTERFERENCE THEREWITH IS REQUIRED. THE SAME IS UPHELD. GROUND NO. 3 IS ACCORDINGLY REJECTED . IN THE RESULT APPEAL IS DISMISSED. 1 8 . IN SUMMARY, BOTH THE APPEALS ARE DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 15.10.2014 SD/ - SD/ - ( T.S.KAPOOR ) ACCOUNTANT MEMBER ( I.C. SUDHIR ) JUDICIAL MEMBER DATE D: 15.10.14 B .RUKHAIYAR COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. BY ORDER DEPUTY REGISTRAR