DCIT, New Delhi V. M/s. Altus Group (India) Pvt. Ltd., New Delhi

ITA 1276/DEL/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3228 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Appeal Filed On: 08-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K HAUTHANG
• Assessee Lawyers: MANISH GARG
• Keywords: Depreciation; Business expenditure; Bad and doubtful debts; Tax effect; Commercial expediency; Capital expenditure; Set aside
• Section: 143(3); 37(1); 43D; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E, NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NO.1226/DEL/2016 ASSESSMENT YEAR: 2012-13 M/S. ALTUS GROUP (INDIA) PVT. LTD., C/O- M.L. GARG & CO. CAS, K-60, 2 ND FLOOR, OPP. PVR PLAZA, CONNAUGHT PLACE, NEW DELHI VS. DCIT, CIRCLE-2(1), NEW DELHI PAN :AAECP1689F (APPELLANT) (RESPONDENT) AND ITA NO.1276/DEL/2016 ASSESSMENT YEAR: 2012-13 DCIT, CIRCLE-2(1), NEW DELHI VS. M/S. ALTUS GROUP (INDIA) PVT. LTD., S-327, GREATER KAILASH-II, NEW DELHI PAN :AAECP1689F (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI MANISH GARG, CA DEPARTMENT BY SHRI K. HAUTHANG, SR.DR DATE OF HEARING 24.09.2019 DATE OF PRONOUNCEMENT 14.11.2019 2 ITA NOS.1226 & 1276/DEL/2016 ORDER PER O.P. KANT, AM: THESE CROSS APPEALS BY THE ASSESSEE AND THE REVEN UE ARE DIRECTED AGAINST ORDER DATED 04/01/2016 PASSED BY T HE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-I, NEW DELHI [ IN SHORT THE LD. CIT(A)] FOR ASSESSMENT YEAR 2012-13. 2. THE GROUNDS RAISED IN THE APPEAL OF THE ASSESSEE A RE REPRODUCED AS UNDER: 1. ADDITION U/S 36 OF THE INCOME TAX ACT, OF RS. 5, 62,876/- FOR WRITING OFF IRRECOVERABLE EXPENSES 1.1 ON FACTS AND UNDER THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE ID. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ORDER OF THE LAO IN DISALLOWING THE 'ADVANCES AND DEPOSIT WRITTEN OFF' AMOUNTING TO RS. 5,62,876/-. 1.2 THE ID. CIT(A) HAS ERRED BOTH ON FACTS AND LAW BY WRONGLY HOLDING THAT THESE WRITE OFFS ARE NOT COVERED UNDER SECTION 37(1) AND CLASSIFYING THE SAME UNDER SECTION 36(2) READ WITH SECTION 36(L)(VII) OF INCOME TAX ACT, 1961. 1.3 ON FACTS AND UNDER THE CIRCUMSTANCES OF THE CA SE, THE ID. CIT(A) WAS UNJUSTIFIED IN NOT APPRECIATING AND IGNORING THE FA CT THAT THE MANAGEMENT OF THE APPELLANT COMPANY HAD DECIDED TO CLOSE DOWN THE BUSINESS ACTIVITIES AND THE FINANCIAL STATEMENT S WERE PREPARED ON THE BASIS THAT THE FUNDAMENTAL ACCOUNTING ASSUMP TION OF GOING CONCERN WAS NO LONGER APPROPRIATE. 1.4 ON FACTS AND UNDER THE CIRCUMSTANCES OF THE CA SE, THE ID. CIT(A) WAS UNJUSTIFIED IN CONFIRMING THE ADDITION / DISALLOWAN CE MADE AND HAS FAILED TO APPRECIATE THE SUBMISSIONS OF THE APPELLA NT AND HAS IGNORED VARIOUS DECISIONS IN JUDICIAL DISCIPLINE AF FIRMING THE ALLOWANCE OF EXPENDITURE ON THE PRINCIPLE OF COMMER CIAL EXPEDIENCY. 1.5 ON FACTS AND UNDER THE CIRCUMSTANCES OF THE CA SE, THE ID. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION U/S 36 OF THE INCO ME TAX ACT, 1961 WHEREAS THE APPELLANT HAS CLAIMED THE EXPENDITURE U /S 37 OF THE ACT AND NOT UNDER ANY OF THE PROVISIONS OF SECTION 36 O F THE INCOME TAX ACT, 1961. AGGRIEVED WITH THIS CONFIRMATION OF ADDITION BY TH E ID. CIT(A), THE APPELLANT PRAYS THAT THE ADDITION OF RS.5,62,876/- IN RESPECT OF WRITING OFF IRRECOVERABLE EXPENSES BE DELETED. 3 ITA NOS.1226 & 1276/DEL/2016 2. ADDITION OF RS.6,42,365/- BEING LEGAL AND PROFE SSIONAL CHARGES 2.1 ON FACTS AND UNDER THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ID. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOW ANCE OF LEGAL AND PROFESSIONAL CHARGES TO THE TUNE OF RS. 6,42,365/-. 2.2 ON FACTS AND UNDER THE CIRCUMSTANCES OF THE CAS E, THE ID. CIT(A) HAS FAILED TO APPRECIATE THE SUBMISSIONS MADE BY THE AP PELLANT AND WAS UNJUSTIFIED IN CONCLUDING THAT THE APPELLANT HAS FA ILED TO PROVIDE ANY EVIDENCE. 2.3 ON FACTS AND UNDER THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ID. CIT(A) WAS UNJUSTIFIED IN CONFIRMING THE DISALLOWAN CE MERELY BECAUSE OF CLERICAL ERROR IN THE BILLS AND HAS FAIL ED TO CONSIDER THE JUDICIAL PRECEDENT IN THIS REGARD. 2.4 ON FACTS AND UNDER THE CIRCUMSTANCES OF THE CAS E, THE ID. CIT(A) HAS GROSSLY ERRED ON FACTS AND HAS FAILED TO SUBSTANTIA TE THE ALLEGATION THAT CLAIM OF EXPENSES IN THE NAME OF CONSULTANCY C HARGES WAS UNTENABLE AND NOT GENUINE. AGGRIEVED WITH THIS CONFIRMATION OF ADDITION BY TH E ID. CIT(A), THE APPELLANT PRAYS THAT THE ADDITION OF RS. 6,42,365/- IN RESPECT OF LEGAL AND PROFESSIONAL CHARGES BE DELETED. 3. ADDITION OF RS. 7,44,245/- FOR SHORT TERM CAPITA L LOSS 3.1 ON FACTS AND UNDER THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE ID. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ORDER OF THE LAO IN DISALLOWING THE SHORT TERM CAPITAL LOSS CLAIMED BY THE APPELLANT. 3.2 ON FACTS AND UNDER THE CIRCUMSTANCES OF THE CA SE, THE ID. CIT(A) HAS ERRED IN DISREGARDING THE SUBMISSIONS MADE BY THE A PPELLANT AS WELL AS THE FACT THAT THE MANAGEMENT OF THE APPELLANT CO MPANY HAD DECIDED TO CLOSE DOWN THE BUSINESS ACTIVITIES AND T HE FINANCIAL STATEMENTS WERE PREPARED ON THE BASIS THAT THE FUND AMENTAL ACCOUNTING ASSUMPTION OF GOING CONCERN WAS NO LONGE R. 3.3 ON FACTS AND UNDER THE CIRCUMSTANCES OF THE CAS E, THE ID. CIT(A) WAS UNJUSTIFIED IN CONFIRMING THE DISALLOWANCE AND HAS FAILED TO CONSIDER THE FACT THAT THESE ASSETS WERE NON-RECOVERABLE FRO M THE SITES AS THE WORK WAS STOPPED AND THE CUSTOMERS HAVE ALSO FILED SUIT AGAINST THE ASSESSEE FOR BREACH OF CONTRACT. 4 ON FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE , THE ID. CIT(A) WAS UNJUSTIFIED IN CONFIRMING THE DISALLOWANCE AND HAS FAILED TO APPRECIATE THE FACT THAT THE ASSETS WERE NOT RECOVE RABLE AND THE ASSESSEE HAD NO OPTION BUT TO WRITE THEM OFF IN ACC ORDANCE WITH PRINCIPLE OF COMMERCIAL EXPEDIENCY AS THE ASSESSEE HAD DECIDED TO CLOSE DOWN THE BUSINESS OPERATIONS. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, V ARY AND/OR WITHDRAW ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL AT ANY STAGE OF THE APPELLATE PROCEEDINGS AND TO MAKE APPROPRIATE L EGAL SUBMISSIONS DURING ORAL ARGUMENTS. 4 ITA NOS.1226 & 1276/DEL/2016 AGGRIEVED WITH THE ORDER FRAMED BY ID. CIT(A), THE APPELLANT HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL HAVING TH E APPROPRIATE JURISDICTION TO ENTERTAIN AND DECIDE THIS APPEAL AN D PRAYS THAT THE ADDITIONS AND DIS-ALLOWANCES BE DELETED. 3. THE GROUNDS RAISED IN THE APPEAL OF THE REVENUE AR E REPRODUCED AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) HAS ERRED IN DELETING DISALLOWANCE OF RS.45,00,000/ - ON A/C OF LOSS ON REVALUATION OF FOREIGN EXCHANGE ON ACCOUNT OF AD VANCE RECEIVED. 2. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIG HT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 4. BRIEFLY STATED FACTS OF THE CASE ARE AT THAT THE A SSESSEE COMPANY WAS ENGAGED IN THE BUSINESS OF PROVIDING PR OJECT MANAGEMENT CONSULTANCY IN THE FIELD OF ARCHITECTURA L SERVICES. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE FILED RE TURN OF INCOME ON 30/09/2012 DECLARING TOTAL LOSS OF 55,56,593/-, WHICH WAS SUBSEQUENTLY ON 18/03/2014 REVISED TO 67,65,567/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND SCRUT INY ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME-TA X ACT, 1961 (IN SHORT THE ACT) AFTER MAKING CERTAIN ADDITIONS /DISALLOWANCES MADE AND LOSS WAS ASSESSED AT 35,560/-. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE LEARNED CIT(A), WH O PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED, BOTH THE ASS ESSEE AND THE REVENUE ARE IN APPEAL BEFORE THE TRIBUNAL RAISING T HE GROUNDS AS REPRODUCED ABOVE. 5. IN GROUND NO.1 OF THE APPEAL, THE ASSESSEE HAS CHA LLENGED ADDITION OF RS.5,62,876/- FOR ADVANCES AND DEPOSITS WRITTEN OFF. 5.1 DURING ASSESSMENT PROCEEDINGS, THE ASSESSING OFFIC ER OBSERVED CLAIM OF ADVANCES (RS.2,76,819) AND DEPOSI T 5 ITA NOS.1226 & 1276/DEL/2016 (RS.2,86,057/-) WRITTEN OFF, THE DETAILS OF WHICH W AS REPRODUCED BY THE ASSESSING OFFICER ARE EXTRACTED UNDER: PARTICULARS AMOUNT REASON DEPOSITS WRITTEN OFF RETENTION MONEY FORFEITED BY THE LESSOR. AMOUNT NOT RECOVERABLE ON VACATING OLD LEASE PREMISES. REGUS GURGAON METROPOLITAN BUSINESS CENTRE PRIVATE LTD. RS.2,86,057/- TOTAL (A) > RS.2,86,057/- ADVANCES WRITTEN OFF GRANT LESLIE RADONICH RS.2,73,276/- EX-EMPLYEE LEFT WITHOUT NOTICE AND COULD NOT BE TRACED. THUS AMOUNT NOT RECOVERABLE WRITTEN OFF. DHARMA DEV TEXI SERVICE RS.3,543/- PENDING ADVANCE GIVEN TO TAXI VENDOR NOT RECOVERABLE. HENCE WRITTEN OFF. TOTAL (B) > RS.2,76,819/- TOTAL (A + B) RS.5,62,876/- 5.2 IT WAS CLAIMED BY THE ASSESSEE THAT ALL THE ADVANC ES WERE PAID TO VENDOR/EMPLOYEE IN THE ORDINARY COURSE OF T HE BUSINESS OPERATION TO AVAIL SERVICES FROM THEM AND HENCE, TH EIR NON- RECOVERY IS DULY ALLOWABLE DEDUCTION OF BUSINESS EX PENSES UNDER SECTION 37 OF THE ACT AND NOT UNDER SECTION 36 OF T HE ACT. ACCORDING TO THE ASSESSING OFFICER, THERE IS A SPEC IFIC PROVISION OF SECTION 36 FOR ALLOWING ADVANCES WRITTEN OFF AND TH EREFORE, SAME CANNOT BE ALLOWED UNDER SECTION 37 OF THE ACT IN V IEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F SOUTHERN TECHNOLOGIES LTD. VS. JCIT (2010) 320 ITR 577 (SC), WHEREIN IT IS HELD THAT IF A PROVISION FOR DOUBTFUL DEBT IS EXPRE SSLY EXCLUDED 6 ITA NOS.1226 & 1276/DEL/2016 FROM SECTION 36(1)(VII) OF THE ACT, THEN SUCH PROVI SION CANNOT BE CLAIMED AS DEDUCTION UNDER SECTION 37, EVEN ON THE BASIS OF REAL INCOME THEORY. 5.3 REGARDING THE CLAIM OF DEPOSITS WRITTEN OFF OF 2,86,057/- THE SUBMISSION OF THE ASSESSEE HAS BEEN REPRODUCED BY THE LEARNED CIT(A), WHICH IS EXTRACTED AS UNDER : 1.3 THE FOLLOWING SUBMISSION OF THE PLAINTIFF BEF ORE THE LAO ON 20.11.2014 HAS BEEN ERRONEOUSLY IGNORED BY THE LAO IN FRAMING THE ASSESSMENT. FORFEITURE OF SECURITY DEPOSIT OF RS.10,40,179 AND RS.446,249 TOTALING TO RS. 14,86,428: A SECURITY DEPOSIT OF RS . 14,86,428 WAS PAID AS PER CLAUSE 12 OF THE LEASE AGREEMENT FOR OF FICE PREMISES LEASED BY THE COMPANY FF-06, 4 TH FLOOR, CORPORATE SEWA PARK, GURGAON. A COPY OF THE LEASE DEED AS ALREADY BEEN S UBMITTED. THE LEASE AGREEMENT HAD A LOCK IN PERIOD OF 3 YEARS AND IF PREMISES WERE VACATED BEFORE 3 YEARS, THE LESSOR WAS ENTITLE D FOR COMPENSATION EQUAL TO BALANCE PERIOD OF THE LEASE. SINCE, THE ASSESSEE COMPANY TERMINATED THE LEASE AGREEMENT, WI THIN A YEAR FROM THE DATE OF AGREEMENT; THE LESSOR WAS ENTITLED FOR COMPENSATION EQUAL TO 2 YEARS AND 10 MONTHS RENT. HOWEVER, DUE TO SEVERE FUND PROBLEMS, COMPANY MADE A REQUEST TO THE LESSOR AND FINALLY SETTLES THE TERMINATION BY ALLOWING HIM TO FORFEIT THE SECU RITY DEPOSIT TOWARDS RENT FOR REMAINING PERIOD. THIS IS A BUSINE SS DECISION TAKEN BY THE COMPANY TO SAVE FURTHER RENT. COPY OF THE TE RMINATION AGREEMENT HAS ALREADY BEEN SUBMITTED BEFORE YOUR GO OD OFFICE. THE ABOVE SECURITY DEPOSIT WAS PAID IN THE ORDINARY COURSE OF THE BUSINESS OF THE COMPANY. FURTHER, DEPOSIT PAID WAS NOT IN NATURE OF CAPITAL PAYMENTS. THEREFORE, FORFEITURE OF ABOVE RE FERRED SECURITY DEPOSIT IS AN ALLOWABLE EXPENSES U/S 37 OF THE INCO ME TAX ACT. THIS VIEW HAS BEEN DULY UPHELD UNDER VARIOUS JUDICIAL PR ONOUNCEMENTS. REFERENCE CAN BE MADE TO DECISION GIVEN BY THE HON' BLE IT AT (DELHI) IN CASE FAB INDIA OVERSEAS PVT. LTD. VS. ACIT, RAN GE - 11, NEW DELHI. (REFER TO PAGE NO 71-72 OF SUBMISSION NO 5 DATED 20/11/2014) 5.4 SIMILARLY, THE SUBMISSION OF THE ASSESSEE ON THE A DVANCE WRITTEN OFF OF 2,76,819/-, REPRODUCED BY THE LEARNED CIT(A), IS EXTRACTED AS UNDER: 7 ITA NOS.1226 & 1276/DEL/2016 1.4 WITH RESPECT TO THE ADVANCE WRITTEN OFF AMOUN TING TO RS. 2,76,819/-, THE LAO HAS FAILED TO APPRECIATE THE FACT THAT THESE AD VANCES WERE FOR THE EXPENSES IN THE ORDINARY COURSE OF BUSINESS AND ARE COVERED U/S 37(1) OF THE INCOME TAX ACT 1961. AS WELL AS THE AFORESAID EXPENSES ARE HELD AL LOWABLE U/S 37(1) OF THE IT A 1961 IN VARIOUS JUDGMENTS PROVIDED BY THE HIGH COUR T, ONE OF THE WHOM IS MAINLY [CIT VLNDEN BISLERS(1990) 181 ITR 69(MAD)]. 5.5 THE FURTHER LEGAL SUBMISSION MADE BY THE ASSESSEE IN SUPPORT OF THE CLAIM OF THE ABOVE ADVANCES AND DEPO SITS WRITTEN OFF, AS REPRODUCED BY THE LD. CIT(A), IS EXTRACTED AS UNDER: 1.8 THAT THE LAO IN MAKING THE ALL THE ADDITIONS/ DISALLOWANCES WHILE FRAMING THE IMPUGNED ASSESSMENT, HAS ALSO ERR ED IN LAW BY IGNORING THE PRINCIPAL ESTABLISHED THROUGH VARIOUS JUDICIAL PRONOUNCEMENTS THAT: THE LIST OF ALLOWANCES ENUMER ATED IN SECTION 30-37 OF ITA 1961 IS NOT EXHAUSTIVE; AN ITEM OF LOS S OR EXPENDITURE INCIDENTAL TO BUSINESS MAY BE DEDUCTED IN COMPUTING PROFITS AND GAINS PROPERLY SO CALLED AND COMPUTED ON ORDINARY COMMERCIAL PRINCIPLES. THIS IS DEFINITELY ESTABLISHED BY THE P RIVY COUNCIL CASE, CIT V CHITNAVIS,(59 IA 290,297,6ITC 453) WHERE A BA D DEBT WAS HELD TO BE AN ADMISSIBLE DEDUCTION, THOUGH THERE WA S NO SPECIAL ALLOWANCE FOR BAD DEBTS IN THE 1922 ACT AS IT THEN STOOD. LORD RUSSELL, DELIVERING THE JUDGMENT OF THE BOARD, SAID : ALTHOUGH THE ACT NOWHERE IN TERMS AUTHORIZES THE D EDUCTION OF BAD DEBTS OF A BUSINESS, SUCH A DEDUCTION IS NECESSARIL Y ALLOWABLE. WHAT ARE CHARGEABLE TO INCOME TAX IN RESPECT OF A BUSINE SS ARE THE PROFITS AND GAINS OF A YEAR; AND IN ASSESSING THE AMOUNT OF THE PROFITS AND GAINS OF A YEAR ACCOUNT MUST NECESSARILY BE TAKEN O F ALL LOSSES INCURRED, OTHERWISE YOU WOULD NOT ARRIVE AT THE TRU E PROFITS AND GAINS.' IN BADRIDAS DAGA V CIT(34, ITR 10,15) AND CALCUTTA CO LTD V CIT,(37 ITR 1,9)THE SUPREME COURT QUOTED THE OBSERV ATION OF LORD RUSSELL WITH APPROVAL AND HELD THAT AN ITEM OF LOSS OR EXPENDITURE NOT FALLING WITHIN ANY OF THE EXPRESS DEDUCTIONS MA Y BE ALLOWED IF IT IS DEDUCTIBLE ON ORDINARY PRINCIPLES OF COMMERCIAL ACCOUNTING. THE SCHEME OF THESE SECTIONS IS THAT PROFITS AND GA INS MUST BE COMPUTED SUBJECT TO CERTAIN EXPRESS ALLOWANCES AND TO CERTAIN EXPRESS OR IMPLIED PROHIBITIONS OF DEDUCTION, BUT A DEDUCTION WHICH IS NEITHER WITHIN THE TERMS OF THE PROHIBITION NOR SUCH THAT THE SPECIFIC ALLOWANCE MUST BE TAKEN AS THE EXCLUSIVE D EFINITION OF ITS AREA, MUST BE ALLOWED IF IT IS, ON THE FACTS OF THE CASE, A PROPER DEBIT ITEM TO BE CHARGED AGAINST INCOMINGS OF THE TRADE I N ASCERTAINING THE TRUE PROFITS. IN OTHER WORDS, IN DETERMINING WHETHE R A PARTICULAR ITEM 8 ITA NOS.1226 & 1276/DEL/2016 (NOT COVERED BY SS 30-37) MAY OR MAY NOT BE DEDUCTE D FROM PROFITS, IT IS NECESSARY FIRST TO ENQUIRE WHETHER THE DEDUCT ION IS EXPRESSLY OR BY NECESSARY IMPLICATION PROHIBITED BY THE ACT AND THEN, IF IT IS NOT SO PROHIBITED ,TO CONSIDER WHETHER IT IS OF SUCH A NATURE THAT IT SHOULD BE CHARGED AGAINST INCOMINGS IN A COMPUTATIO N OF THE PROFITS AND GAINS PROPERLY SO CALLED. THESE PRINCIPLES WER E REAFFIRMED BY THE SUPREME COURT IN BADRIDAS DAGA V CIT (34, ITR 1 0,15) AND CALCUTTA CO. LTD V CIT. ,(37 ITR 1,9) 1.9 NON -CAPITAL EXPENDITURE INCURRED FOR THE PUR POSES OF BUSINESS MAY FALL TO BE DEDUCTED UNDER THE OMNIBUS RESIDUARY S 37 OF ITA 1961. BUT BUSINESS LOSSES, THOUGH THEY FALL OUTSIDE THE PURVIEW OF SS 30-37 ARE ALLOWABLE ,AS STATED ABOVE, ON ORDINARY C OMMERCIAL PRINCIPLES OF COMPUTING PROFITS, PROVIDED (I) THE L OSSES ARE OF A NON- CAPITAL NATURE AND (II) THEY ARE NOT MERELY CONNECT ED WITH THE TRADE BUT ARE INCIDENTAL TO TRADE ITSELF.' THESE PRINCIPLES WERE AFFIRMED BY THE SUPREME COURT IN BADRIDAS DAGA V CIT (34, ITR 10,15), CIT V NATIONAL BANK LTD 55 ITR 707 AND RAMCHANDAR SHIVNARAYAN V CIT. 1.10 THAT THERE ARE NUMEROUS JUDGMENT IN THE ORDER OF JUDICIAL DISCIPLINE WHEREIN SUCH DEDUCTIONS HAVE BEEN ALLOWE D. DEDUCTION SHOULD BE ALLOWED UNDER THIS SECTION IN RESPECT OF A LOSS ARISING FROM FORFEITURE OF SECURITY DEPOSIT AS A RE SULT OF NON PERFORMANCE OF A TRADING CONTRACT. VARIOUS CASE LAW S ARE NARANDAS V CIT 35ITR 461; CIT V INDEN 91 ITR 427; CIT V SUGA R DEALERS 100 ITR 424; THACKERS V CIT134 ITR 21. FORFEITURE OF SE CURITY DEPOSIT-LT COVERS FORFEITURE OF DEPOSITS GIVEN AS SECURITY F OR THE BUSINESS PURPOSES. FORFEITURE OF SECURITY DEPOSITED UNDER A CONTRACT IS THACKERS H.P. & CO . VS CIT 134 ITR 21. LOSSES ARIS ING FROM PAYMENTS MADE IN ADVANCE TO EMPLOYEES OR AGENTS WOU LD FORM A PROPER DEDUCTION IF THE ADVANCE PAYMENT WAS MADE WI TH REASONABLE BUSINESS PRUDENCE. THE MONEY LENT BY THE MANAGED CO MPANY TO THE MANAGING AGENTS, WHICH HAD BECOME IRRECOVERABLE, IS DEDUCTIBLE AS A LOSS INCIDENTAL TO THE MANAGED COMPANYS BUSINESS . LOANS ADVANCED IN THE COURSE OF OR INCIDENTAL TO BUSINESS ARE ALLOWABLE, APART FROM S36(1)(VII),WHEN THEY BECOME IRRECOVERAB LE, BUT NOT IF THEY ARE ON CAPITAL ACCOUNTS VARIOUS CASE LAWS ARE LALVA NI V CIT 78 ITR 176;CIT V JWALAPRASAD 107ITR 540;CIT V JEYA 164 ITR 318;CIT V INDEN BISLERS 181 ITR 69. IN VIEW OF THE ABOVE SUBMISSIONS THE PLAINTIFF PRAY S FOR THE DELETION OF THE ABOVE ADDITION 9 ITA NOS.1226 & 1276/DEL/2016 5.6 AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE, THE L.D CIT(A), FOLLOWING THE DECISION OF THE HONBLE SUPRE ME COURT IN THE CASE OF SOUTHERN TECHNOLOGIES LTD. (SUPRA) UPHELD T HE FINDING OF THE ASSESSING OFFICER. 5.7 BEFORE US, THE LD. COUNSEL OF THE ASSESSEE FILED A PAPER-BOOK CONTAINING PAGES 1 TO 190. THE LEARNED COUNSEL OF T HE ASSESSEE REFERRED TO THE PAGES 80 TO 101 AND SUBMITTED THAT ADVANCES OF SALARY WERE MADE IN THE REGULAR COURSE OF THE BUSIN ESS AND THEREFORE LOST DUE TO NON-RECOVERY OF THE SAID ADVA NCES, IS IN THE NATURE OF BUSINESS EXPENDITURE AND ALLOWABLE TO THE ASSESSEE. REGARDING THE DEPOSIT WRITTEN OFF, HE SUBMITTED THA T DEPOSIT WAS GIVEN FOR LEASE OF THE BUILDING IN REGULAR COURSE O F THE BUSINESS AND SUBSEQUENT ADJUSTMENT BY THE OWNER OF THE BUILD ING FOR VACATING PREMATURELY, WAS A LOSS IN REGULAR COURSE OF BUSINESS. HE SUBMITTED THAT THOUGH THE LOSSES NOT BEING FALLI NG UNDER SECTION 36(1)(VII) WERE CLAIMED UNDER SECTION 37 OF THE ACT AND, THEREFORE, HAS BEEN DISALLOWED BY THE LOWER AUTHORI TIES BY WAY OF WRONG APPLICATION OF THE DECISION OF THE HONBLE SU PREME COURT. 5.8 THE LD. DR, ON THE OTHER HAND, RELIED ON THE ORDER OF THE LOWER AUTHORITIES. 5.9 WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE RE LEVANT MATERIAL ON RECORD. THE ISSUE IN DISPUTE IN THE INS TANT CASE IS WHETHER THE ADVANCES AND DEPOSIT WRITTEN OFF BY THE ASSESSEE CAN BE ALLOWED UNDER SECTION 37(1) OF THE ACT AS BUSINE SS LOSS. ACCORDING TO THE LD. ASSESSING OFFICER AND THE LEAR NED CIT(A), THERE IS A SPECIFIC PROVISION UNDER SECTION 36(1)(V II) OF THE ACT FOR ALLOWING THE BAD DEBT WRITTEN OFF AND THUS WRITTEN OFF OF THE ADVANCES AND DEPOSIT CANNOT BE ALLOWED TO THE ASSES SEE UNDER 10 ITA NOS.1226 & 1276/DEL/2016 SECTION 37(1) OF THE ACT IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SOUTHERN TECHNOLOGIES LTD. (SUPRA), WHEREIN THE HONBLE SUPREME COURT, HELD AS UNDER: SECTION 36(1)(VII) OF THE INCOME-TAX ACT, 1961, RE AD WITH THE NBFCS PRUDENTIAL NORMS (RESERVE BANK) DIRECTIONS, 1998 - BAD DEBTS - WHETHER 1998 DIRECTIONS DEAL ONLY WITH PRESENTATION OF NPA PROVISIONS IN BALANCE SHEET OF A NBFC AND THEY HAVE NOTHING TO DO WITH COMPUTATION OR TAXABILITY OF PROVISIONS FOR NP AS UNDER INCOME- TAX ACT - HELD, YES - WHETHER PROVISION FOR NPAS IN TERMS OF 1998 DIRECTIONS CONSTITUTES EXPENSE ON BASIS OF WHICH DE DUCTION CAN BE CLAIMED BY NBFCS UNDER SECTION 36(1)(VII) - HELD, N O - WHETHER EVEN APPLYING THEORY OF REAL INCOME, A DEBIT, WHICH IS E XPRESSLY DISALLOWED BY EXPLANATION TO SECTION 36(1)(VII), IF CLAIMED, HAS GOT TO BE ADDED BACK TO TOTAL INCOME OF ASSESSEE, BECAUSE ACT SEEKS TO TAX REAL INCOME WHICH IS INCOME COMPUTED ACCORDING TO ORDINARY COMMERCIAL PRINCIPLES BUT SUBJECT TO PROVISIONS OF ACT - HELD, YES SECTION 36(1)(VII), READ WITH SECTION 43D, OF THE I NCOME-TAX ACT, 1961 - BAD DEBTS - WHETHER SECTIONS 36(1)(VII) AND 43D A RE VIOLATIVE OF ARTICLES 14 AND 19 OF CONSTITUTION - HELD, NO SECTION 37(1) OF THE INCOME-TAX ACT, 1961 - BUSINES S EXPENDITURE - ALLOWABLE AS - WHETHER SECTION 37 APPLIES ONLY TO I TEMS WHICH DO NOT FALL IN SECTIONS 30 TO 36; IF A PROVISION FOR DOUBT FUL DEBT IS EXPRESSLY EXCLUDED FROM SECTION 36(1)(VII), THEN SUCH A PROVI SION CANNOT BE CLAIMED AS A DEDUCTION UNDER SECTION 37 EVEN ON BAS IS OF REAL INCOME THEORY - HELD, YES. 5.10 HOWEVER, WE FIND THAT THE CLAIM OF BAD DEBT WRITTE N OFF UNDER SECTION 36(1)(VII) OF THE ACT IS ALLOWABLE IF SUCH DEBT OR PART THEREOF HAS BEEN TAKEN INTO ACCOUNT IN COMPUTING TH E INCOME OF THE ASSESSEE OF THE PREVIOUS YEAR IN WHICH THE AMOU NT OF SUCH DEBT OR PART THEREOF IS WRITTEN OFF OR OF AN EARLIE R PREVIOUS YEAR. IN THE INSTANT CASE, THE CLAIM OF ADVANCES AND DEPOSIT HAVE NOT BEEN CONSIDERED FOR INCOME IN THE YEAR UNDER CONSIDERATI ON OR IN THE EARLIER YEAR(S), SUCH ADVANCES OR DEPOSIT WRITTEN O FF ARE NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 36(1)(VII) OF THE ACT. AN ASSESSEE IS ENTITLED FOR CLAIM UNDER SECTION 36(1)( VII) , WHERE BY 11 ITA NOS.1226 & 1276/DEL/2016 REASON OF THE INABILITY OR INSOLVENCY OF THE DEBTOR TO PAY, THE MONEY IS UNABLE TO BE RECOVERED. IN ALL OTHER CASES , THE CLAIM FOR ALLOWANCE SHOULD HAVE TO BE SUSTAINED UNDER SECTION 37(1) WHICH REQUIRES THAT THE EXPENDITURE (NOT BEING OF A CAPIT AL NATURE) SHOULD HAVE BEEN WHOLLY AND EXCLUSIVELY INCURRED FO R THE PURPOSE OF THE BUSINESS. 5.11 FOR CLAIMING DEDUCTION UNDER SECTION 37 OF THE A CT, THE ESSENTIAL INGREDIENTS OF THE SECTION ARE,: '(I) THAT IT SHOULD BE AN EXPENDITURE OF THE NATURE NOT DESCRIBED IN SECTIONS 30 TO 36 ; (II) IT SHOULD NOT BE IN THE NATURE OF CAPITAL EXPE NDITURE OR PERSONAL EXPENSES OF THE ASSESSEE ; (III) THAT IT SHOULD BE LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF THE BUSINESS, ETC.' 5.12 IN THE INSTANT CASE, WE FIND THAT ADVANCES FOR SA LARY AND DEPOSITS FOR LEASE PREMISES HAVE BEEN WRITTEN OFF. CLEARLY, THE ADVANCES WHICH HAD BEEN MADE BY THE ASSESSEE IN THE PRESENT CASE ARE CERTAINLY OF A TYPE WHICH ARE WITHIN THE C ONTEMPLATION OF THE WORDS 'LAID OUT OR EXPENDED WHOLLY AND EXCLUSIV ELY FOR THE PURPOSES OF THE BUSINESS AND ALLOWABLE UNDER SECTIO N 37(1) OF THE ACT. THE RATIO OF THE DECISION OF THE HONBLE SUPR EME COURT IN THE CASE OF SOUTHERN TECHNOLOGIES LTD. (SUPRA) CANNOT B E APPLIED IN THE FACTS OF THE INSTANT CASE. ACCORDINGLY, WE SET ASIDE THE FINDING OF THE LEARNED CIT(A) ON THE ISSUE IN DISPUTE AND A LLOW THE GROUND OF THE APPEAL OF THE ASSESSEE. 12 ITA NOS.1226 & 1276/DEL/2016 6. IN GROUND NO.2, THE ASSESSEE HAS CHALLENGED ADDIT ION OF 6,42,365/-BEING LEGAL AND PROFESSIONAL CHARGES. 6.1 THE ASSESSING OFFICER OBSERVED THAT OUT OF THE TOT AL LEGAL AND PROFESSIONAL EXPENSES OF RS.52,71,892/-, AMOUNT OF 6,42, 365/- WAS PAID TO ONE SH AMREEK SINGH. THE ASSESSING OFFI CER FOUND THAT COPIES OF THE BILLS OF SH. AMREEK SINGH HAD BE EN RAISED ALMOST A YEAR AFTER RENDERING PROFESSIONAL SERVICES AND HE ALSO HAPPENED TO BE AN EMPLOYEE OF THE ASSESSEE COMPANY. ACCORDING TO THE ASSESSING OFFICER, THERE CAN BE ERROR OF THE DATE IN THE SINGLE BILL BUT IT CANNOT BE IN ALL THE BILLS. HE R EJECTED THE CONTENTION OF THE ASSESSEE THAT THE TAX WAS DEDUCTE D AT SOURCE ON SUCH PAYMENT WHICH MAKES EXPENSES AS GENUINE. THE C IT (A) ALSO UPHELD THE DISALLOWANCE. 6.2 BEFORE US, THE LEARNED COUNSEL OF THE ASSESSEE REF ERRED PAGES 186 TO 190 OF THE PAPER BOOK, WHICH ARE COPIES OF A MENDED BILLS OF AMREEK SINGH ALONG WITH HIS LEDGER ACCOUNT AND S UBMITTED THAT CLAIM OF EXPENSES IS JUSTIFIED, IN VIEW OF THE FACT THAT EXPENSES WERE INCURRED WHOLLY AND EXCLUSIVELY FOR T HE PURPOSE OF THE BUSINESS. 6.3 THE LEARNED DR, ON THE OTHER HAND, RELIED OF THE O RDER OF THE LOWER AUTHORITIES. 6.4 WE HAVE HEARD RIVAL SUBMISSION OF THE PARTIES AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE L EARNED CIT(A) HAS SUSTAINED THE DISALLOWANCE OBSERVING AS UNDER: DECISION 13 ITA NOS.1226 & 1276/DEL/2016 I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT A ND THE OBSERVATION OF THE AO MADE IN THE ASSESSMENT ORDER. IT IS SEEN THAT THE APPELLANT HAS CLAIMED EXPENSES OF RS.6,42,365/- AS PAID TO CONSULTANT TO SHRI AMRIK SINGH, MR. SYED NADEEM ZAI DI AND MS. CHANDRIKA. THESE PERSONS WERE HIRED FOR VARIOUS PRO JECTS SITES. ON VERIFICATIONS OF THE BILLS IT WAS OBSERVED BY THE A O THAT SHRI AMRIK SINGH HAS BEEN PAID SALARY OF RS.7,02,420/- ON WHIC H TAX OF RS.1,05,330/- HAS BEEN DEDUCTED. OVER AND ABOVE HE HAS BEEN PAID CONSULTANT CHARGES FOR WHICH BILLS WERE RAISED ON 3 1.08.2012, 30.09.2012, 31.10.2012 AND 30.11.2012. IT WAS OBSER VED BY THE AO THAT THESE EXPENSES WERE NOT PERTAINING TO THE YEAR UNDER CONSIDERATIONS AND SAME HAVE BEEN PERTAINING TO THE SUBSEQUENT YEARS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS REVISED BILLS WERE SUBMITTED BEFORE AO ON THE GROUND THAT THERE W AS A MISTAKE IN PREPARING THE BILLS, HOWEVER, AO OBSERVED THAT THIS MISTAKE CAN HAPPEN IN ONE OR TWO BILLS BUT IT CANNOT BE REPEATE D IN ALL THE BILLS SUBMITTED BY SHRI AMRIK SINGH. FURTHER, THE APPELLA NT FAILED TO PROVIDE ANY EVIDENCE OF RENDERING OF SERVICES BY SH RI AMRIK SINGH IN THE YEAR UNDER CONSIDERATION, WHEN SHRI AMRIK SINGH WAS BEING PAID SALARY FROM THE APPELLANT COMPANY, HOW COME HE IS SEPARATELY BEING PAID FOR THE CONSULTANCY CHARGES?. THEREFORE, THE CLAIM OF EXPENSES IN THE NAME OF CONSULTANCY CHARGES IS NOT FOUND TENABLE AND SAME DOES NOT APPEARS TO BE GENUINE EXPENDITURE . HENCE DISALLOWANCE MADE BY THE AO OF CONSULTANCY CHARGES OF RS.6,42,365/- WAS JUSTIFIED AND THE SAME IS CONFIRM ED. 6.5 WE FIND THAT THE LEARNED CIT(A) SUSTAINED THE DISA LLOWANCE ON THE GROUND THAT THE ASSESSEE FAILED TO PROVIDE A NY EVIDENCE OF RENDERING SERVICES BY SH. AMREEK SINGH. THE ONUS WA S ON THE ASSESSEE TO ESTABLISH THAT SH. AMREEK SINGH, RENDER ED LEGAL AND PROFESSIONAL SERVICES IN ADDITION TO EMPLOYMENT WIT H THE ASSESSEE. AS ASSESSEE HAS FAILED TO PRODUCE ANY EVI DENCES BEFORE THE LD. CIT(A) AS WELL AS BEFORE US, WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LEARNED CIT(A) ON THE ISSUE IN DISPUTE AND ACCORDINGLY, WE UPHOLD THE SAME. THE GROUND OF THE APPEAL OF THE ASSESSEE IS DISMISSED. 7. IN GROUND NO. 3, THE ADDITION OF RS.7,44,245/- FOR SHORT- TERM CAPITAL LOSS HAS BEEN CHALLENGED BY THE ASSESS EE. 14 ITA NOS.1226 & 1276/DEL/2016 7.1 IT WAS CLAIMED BY THE ASSESSEE THAT AS PART OF THE BUSINESS OPERATION OF THE ASSESSEE, CERTAIN ASSETS WERE PROV IDED AT CONSTRUCTION SITES FOR ONGOING PROJECTS WHICH WERE FOR TENURE OF 3- 5 YEARS. IT WAS SUBMITTED BY THE ASSESSEE THAT DURI NG THE YEAR, WHEN THE MANAGEMENT OF THE COMPANY DECIDED TO CLOSE DOWN BUSINESS OPERATIONS SUDDENLY BY TERMINATING EMPLOYE ES AND PROJECT CONTRACTS, IT COULD NOT GET SUPPORT FROM EX -EMPLOYEES AND CLIENTS TO TRACE VARIOUS ASSETS PROVIDED AT THE CLI ENT SITES AND THUS LOSS WAS BOOKED ON THESE ASSETS, WHICH WAS CLA IMED AS SHORT-TERM CAPITAL LOSS UNDER THE PROVISIONS OF THE ACT. THE ASSESSEE PROVIDED A LIST OF ITEMS, WHICH HAVE BEEN REPRODUCED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. HOWE VER, THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE IN SUPPORT OF ITS CLAIM FOR NON-RECOVERY OF THE ASSETS FROM CLIENTS. THE AS SESSING OFFICER ALSO OBSERVED THAT ON ONE SIDE ASSESSEE CLAIMED DEP RECIATION ON THOSE VERY ASSETS AND ANOTHER SIDE IT WAS CLAIMING AS LOSS OF ASSETS. THE LD. CIT(A) ALSO UPHELD THE DISALLOWANCE . 7.2 BEFORE US, THE LEARNED COUNSEL OF THE ASSESSEE REF ERRED TO PAGES 167 TO 178, WHICH ARE COPIES OF LETTERS ISSUE D BY THE ATTORNEY OF ASSESSEE CONFIRMING STATUS OF THE CASES FILED BY THE CUSTOMER AGAINST ASSESSEE. ACCORDING TO THE ASSESSE E, THESE LAW SUITS FILED BY THE CUSTOMER ARE EVIDENCES THAT ASSE TS LYING AT THE CUSTOMER SITE WERE NOT RECOVERABLE AND THE ASSESSEE HAD NO OPTION BUT TO WRITE OFF AFTER TAKING INTO CONSIDERA TION COMMERCIAL EXPEDIENCY. 7.3 THE LD. DR, ON THE OTHER HAND, RELIED ON THE ORDER OF THE LOWER AUTHORITIES. 15 ITA NOS.1226 & 1276/DEL/2016 7.4 WE HAVE HEARD RIVAL SUBMISSION OF THE PARTIES AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE L EARNED CIT(A) CONFIRMED THE ADDITION OBSERVING AS UNDER: DECISION I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT A ND THE OBSERVATION OF THE AO MADE IN THE ASSESSMENT ORDER. IT IS SEEN THAT THE APPELLANT HAS CLAIMED SHORT TERM CAPITAL LOSS O F RS.7,44,245/- ON ACCOUNT OF LOSS OF ASSETS WHICH COULD NOT BE RECOVE RED FROM THE DIFFERENT SITES. THE AO HAS GIVEN A CHART OF THE AS SETS WHICH COULD NOT BE RECOVERED BY THE APPELLANT FROM THE CLIENTS SITE AND LOSS OCCURRED ON ACCOUNT OF SUCH LOSS OF ASSETS HAS BEEN CLAIMED AS SHORT TERM CAPITAL LOSS BY THE APPELLANT BY WRITING OFF S UCH ASSETS FROM THE BOOKS OF ACCOUNT. DURING THE COURSE OF ASSESSMENT P ROCEEDINGS THE APPELLANT DID NOT SUBMIT ANY EVIDENCE OF PROVIDING COMPUTERS, OFFICE EQUIPMENTS AND FURNITURE TO ANY PERSON. THE APPELLA NT HAS ALSO FAILED TO PROVE WHETHER IT HAS BILLED SUCH LOSS OCC URRED ON ACCOUNT OF NON RECOVERY OF THE ASSETS FROM THE CLIENTS SITE T O THE CLIENTS. IT IS ALSO OBSERVED BY THE AO THAT APPELLANT HAS CLAIMED DEPRECIATION ON SUCH ASSETS WHICH WERE NOT IN EXISTENCE IN THE F.Y. 2010-11. THEREFORE, THE SUBMISSION OF THE APPELLANT IS APPEA RS TO BE CONTRADICTORY. THE AO HAS DISCUSSED THIS ISSUE AT L ENGTH FROM PAGE 9 TO 13 OF HIS ORDER AND HAS GIVEN STATUS OF THE ASSE TS AND DISALLOWANCE OF SUCH CLAIM OF THE SHORT TERM CAPITA L LOSS. I FULLY AGREE WITH THE JUSTIFICATION GIVEN BY THE AO AND TH E DISALLOWANCE OF THE SHORT TERM CAPITAL LOSS IS UPHELD. 7.5 WE HAVE ALSO PERUSED DOCUMENTS FILED IN THE PAPER BOOK FROM PAGE 167 TO 178. THESE DOCUMENTS ARE IN RELATI ON TO LAWSUIT FILED BY THE VENDOR AGAINST ASSESSEE, HOWEVER, IN T HESE LETTERS OF ATTORNEY OF THE ASSESSEE THERE IS NO MENTION OF ANY FACT THAT ASSET OF THE ASSESSEE WERE LYING AT THOSE CUSTOMER SITES, WITH THE ASSESSEE HAS CLAIMED AS NOT RECOVERABLE. NO OTHER E VIDENCE FROM THE CLIENT/CUSTOMER OF THE ASSESSEE TO SUBSTANTIATE THAT ASSETS WERE LYING AT THEIR SITES, HAS BEEN FURNISHED BY TH E ASSESSEE EITHER BEFORE THE LOWER AUTHORITIES OR BEFORE US. I N THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY ERROR IN THE ORDER OF 16 ITA NOS.1226 & 1276/DEL/2016 THE LEARNED CIT(A) AND ACCORDINGLY, WE UPHOLD THE S AME. GROUND OF THE APPEAL OF THE ASSESSEE IS ACCORDINGLY DISMIS SED. 8. AS FAR AS APPEAL OF THE REVENUE IS CONCERNED, WE F IND THAT THE TAX EFFECT INVOLVED IN THE ISSUE AGITATED BEFOR E THE TRIBUNAL, IS LESS THAN RS.50 LAKH, AS PRESCRIBED BY THE CENTRAL BOARD OF DIRECT TAXES (CBDT) VIDE CIRCULAR NO. 17/2019, DATED 08/08 /2019, WHEREIN THE REVENUE HAS BEEN DIRECTED NOT TO PURSUE THOSE APPEALS. IN VIEW OF THE TAX INVOLVED IN THE PRESENT APPEAL OF THE REVENUE, BEING LESS THAN THE PRESCRIBED LIMIT OF RS .50 LAKH, THE APPEAL OF THE REVENUE IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED, WHEREAS THE APPEAL OF THE REVENUE IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 14 TH NOVEMBER, 2019. SD/- SD/- (BHAVNESH SAINI) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 14 TH NOVEMBER, 2019. RK/-(D.T.D.) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI