Vallabha Industrial Chemical Engineering, Baroda V. The Dy.CIT.,Circle-2(2), Baroda

ITA 1303/AHD/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0439 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-02-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 26-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y P VERMA
• Keywords: Depreciation
• Section: 143(3); 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE SHRI MUKUL KR. SHRAWAT, JM AND SHRI A. MOHA N ALANKAMONY, AM) ITA NO. 1303/AHD/2010 AND 1843/AHD/2012 A. Y.: 2006-07 AND 2005-06 VALLABHA INDUSTRIAL CHEMICAL ENGINEERING, B-132, PARISHNAGAR SOCIETY, NR. LIONS HALL, RACE COURSE CIRCLE, BARODA P. A. AACFV 3426 B VS THE D. C. I. T., CIRCLE 2(2), AAYAKAR BHAVAN, BARODA (APPELLANT) (RESPONDENT) APPELLANT BY SHRI BHAVIN MARFATIA, AR RESPONDENT BY SHRI Y. P. VERMA, SR. DR DATE OF HEARING: 11-02-2013 DATE OF PRONOUNCEMENT: 22-03-2013 O R D E R PER A. MOHAN ALANKAMONY: THESE TWO APPEALS ARE PREFERRED BY THE ASSESSEE AGGRIEVED BY THE DIFFEREN T ORDERS OF THE LEARNED CIT(A)-II, BARODA IN APPEAL NO. CAB/II-376/ 08-09 DATED 20-01-2010 FOR THE ASSESSMENT YEAR 2006-07 AND NO.C AB-II-132/10- 11 DATED 08-05-2012, FOR THE ASSESSMENT YEAR 2005-0 6 RESPECTIVELY PASSED U/S 250 READ WITH SECTION 143(3) OF THE IT A CT. BOTH THE APPEALS WERE HEARD TOGETHER AND THE SAME ARE DISPOS ED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.1303/AHD/2010 & 1843/AHD/2012 (AY: 2005-06 A ND 2006-07) VALLABHA INDUSTRIAL CHEMICAL ENGINEERING VS DCIT, C -2(2), BARODA 2 2. THE ASSESSEE HAS RAISED SIX GROUNDS OF APPEAL F OR ASSESSMENT YEAR 2006-07, WHEREIN GROUND NO.6 IS GEN ERAL IN NATURE AND DOES NOT SURVIVE FOR ADJUDICATION. GROUNDS NO.2 AND 3 ARE NOT PRESSED AND GROUND NO.5 BEING CHARGING OF INTEREST U/S 234 B, 234C AND 234D OF THE ACT IS CONSEQUENTIAL AND THESE GROU NDS ARE DISMISSED AS SUCH. THE SURVIVING GROUNDS NO.1 AND 4 ARE REPRODUCED HEREIN UNDER FOR REFERENCE: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALLOWANCE MA DE OUT OF EXPENDITURE ON RAW MATERIAL CONSUMPTION, STORES & S PARES AND CONSUMABLES ETC., TO RS.7,81,781/-. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALLOWANCE ON ACCOUNT OF VEHICLES, TELEPHONE AND TRAVELING EXPENSES TO RS.77 ,296/- BEING 1/10 TH OF THE TOTAL EXPENDITURE. 3. FOR THE ASSESSMENT YEAR 2005-06 THE ASSESSEE HA S RAISED SIX GROUNDS OF APPEAL, WHEREIN GROUNDS NO.1, 2 AND 3 ARE NOT PRESSED AND THE SAME ARE DISMISSED AS SUCH. GRO UNDS NO.5 AND 6 BEING RELATING TO CHARGING OF INTEREST U/S 23 4B AND 234C OF THE ACT ARE CONSEQUENTIAL AND REQUIRE NO SEPARATE A DJUDICATION. THE LONE SURVIVING GROUND NO.4 IS REPRODUCED HEREIN UNDER FOR REFERENCE: 4. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF AO IN MAKING DISALLOWANCE OF RS.8,88,636/- ON AC COUNT OF SALARY AND INTEREST PAID TO THE PARTNERS OF THE APPELLANT FIRM ON THE GROUND THAT THE APPELLANT HAS NOT COMPLIED WITH THE PROVIS ION OF SECTION 184(4) AND 185 OF THE INCOME TAX ACT, 1961. ITA NO.1303/AHD/2010 & 1843/AHD/2012 (AY: 2005-06 A ND 2006-07) VALLABHA INDUSTRIAL CHEMICAL ENGINEERING VS DCIT, C -2(2), BARODA 3 4. BRIEF FACT OF THE CASE ARE THAT THE ASSESSEE, A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF CHEMICAL CLEARING OF BOI LERS, PIPELINES, PLANTS, COOLER HEAT EXCHANGER ETC., ON CONTRACT BAS IS FILED ITS RETURN OF INCOME U/S 139 (1) OF THE ACT FOR THE ASSESSMENT YE AR 2006-07 AND 2005-06 ON 31-01-2006 AND 31-10-2005 ALONG WITH TAX AUDIT REPORT, BALANCE SHEET AND PROFIT & LOSS ACCOUNT DECLARING T OTAL INCOME AT RS.9,14,860/- AND RS.9,04860/- RESPECTIVELY. THEREA FTER THE CASE WAS SELECTED FOR SCRUTINY AND SUBSEQUENTLY, THE LEARNED AO PASSED THE ASSESSMENT ORDER U/S 143(3) OF THE ACT ON 04-12-200 8 AND 23-07- 2010 RESPECTIVELY FOR BOTH THE AFORESAID ASSESSMENT YEARS WHEREIN CERTAIN ADDITIONS WERE MADE AND FURTHER SUSTAINED B Y THE LEARNED CIT(A) RESULTING IN THESE APPEALS. ITA NO.1303/AHD/2010 (ASSESSEES APPEAL FOR AY 2006-07) 5. GROUND NO.1: RESTRICTING THE DISALLOWANCE MADE OUT OF EXPENDITURE ON RAW MATERIAL CONSUMPTION, STORES & S PARES AND CONSUMABLES ETC., TO RS.7,81,781/-:- THE LEARNED AO OBSERVED THAT THERE WAS A FALL IN GROSS PROFIT RATE FROM 42.62% T O 36.47%. IT WAS ALSO OBSERVED THAT THERE WAS AN INCREASE OF 11% IN CONSUMPTION OF RAW MATERIALS. THE ASSESSEE EXPLAINED THAT THE INCR EASE IN CONSUMABLES WAS DUE TO CONTRACT EXECUTED WITH BHEL WHICH WAS PRIMARILY A MATERIAL CONTRACT. DURING THE RELEVANT ASSESSMENT YEAR IN ORDER TO EXECUTE THE BHEL CONTRACT RAW MATERIALS WE RE PURCHASED FOR RS.39,22,022/- AS AGAINST THE PURCHASES MADE DURING THE PREVIOUS ITA NO.1303/AHD/2010 & 1843/AHD/2012 (AY: 2005-06 A ND 2006-07) VALLABHA INDUSTRIAL CHEMICAL ENGINEERING VS DCIT, C -2(2), BARODA 4 YEAR FOR RS.11,48,866/-. DUE TO THE ADDITIONAL CONT RACTS PROCURED BY THE ASSESSEE THE TURNOVER HAS ALSO SUBSTANTIALLY GO NE UP TO RS.1,65,92,567/- AS AGAINST THE TURNOVER OF RS.1,12 ,40,111/- DURING THE PREVIOUS ASSESSMENT YEAR. ON FURTHER VERIFICATI ON BY THE LEARNED AO, IT WAS OBSERVED THAT THE ASSESSEE HAD RAISED BI LLS TO BHEL ONLY TO THE EXTENT OF RS.16,58,700/- DURING THE RELEVANT PREVIOUS YEAR WHILE AS THE ASSESSEE HAD CLAIMED AN EXPENDITURE OF RS.39 ,22,022/- AS PURCHASES OF CONSUMABLES. THEREAFTER, THE LEARNED A O CAME TO THE FOLLOWING CONCLUSION AND MADE AN ADDITION OF RS.22, 23,134/-:- 5.5 AS REGARDS TO OTHER CONTRACT WITH OTHER PARTIE S ARE REMAIN THE SAME AND THE ASSESSEE HAS ALSO NOT BEEN TAKEN A NY GROUND OR REASONS FOR FALL IN GROSS PROFIT OR INCRE ASE IN EXPENDITURE FOR THE OTHER CONTRACTS. THE MAIN CONTE NTION OF THE ASSESSEE IS ON RECEIPT AND EXPENDITURE CONTRACT EXE CUTED WITH BELL SIC BHEL. IN VIEW OF THESE FACTS, THE ASSESSEE HAS NOT SUBMITTED ANY DETAILS OF ANY BILLS OR DETAILS OF PU RCHASES OF STORES AND SPARES AND THEREBY THE ASSESSEE HAS INFL ATED EXPENDITURE ON ACCOUNT OF PURCHASE OF SPARES AND ST ORES. AFTER TAKING INTO ACCOUNT OF THE TERMS OF AGREEMENT WITH BHEL AND BILL RAISED OF RS.15 LACS, REASONABLE EXPENDITURE I S CONSIDERED AT 50% OF THE TOTAL VALUE OF CONTRACT EXECUTED DURI NG THE PREVIOUS YEAR WORKS OUT TO RS.7,50,000/- AND FURTHE R TAKING INTO CONSIDERATION OF LAST YEARS EXPENDITURE OF RS.11,4 8,886/-. THE TOTAL EXPENDITURE ALLOWABLE FOR STORES AND SPARES W ORKS OUT TO RS.18,98,886/- (I.E. RS.11.48,886 + RS.7,50,000) AN D THE BALANCE EXPENDITURE WAS INFLATED AND ACCORDINGLY DI SALLOWED. ACCORDINGLY, THE DISALLOWANCE UNDER THIS HEAD WORKS OUT TO RS.20,23,134/- AND THE SAME IS ADDED BACK TO THE TO TAL INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS U/S. 271 (1) ( C) OF THE I. T. ACT HAS ALSO BEEN INITIATED SEPARAELY8 ON THIS POIN T. ITA NO.1303/AHD/2010 & 1843/AHD/2012 (AY: 2005-06 A ND 2006-07) VALLABHA INDUSTRIAL CHEMICAL ENGINEERING VS DCIT, C -2(2), BARODA 5 5.1 ON APPEAL BEFORE THE LEARNED CIT(A), IT WAS EST ABLISHED THAT THE ASSESSEE HAD FILED COPY OF BILLS OF ALL THE CO NSUMABLES BEFORE THE REVENUE AND NO DEFECT COULD BE POINTED OUT WITH RES PECT TO THE PURCHASE OF THE CONSUMABLES. HOWEVER, THE LEARNED C IT(A) OPINED THAT THE CONSUMPTION OF CONSUMABLES WAS NOT CORRECT LY ACCOUNTED AND, THEREFORE, BASED ON ESTIMATE WORKED OUT THE DI FFERENCE BEING CONSUMABLE EXCESS CHARGED TO PRODUCTION AT RS.7,81, 781/-. THIS DIFFERENCE OF RS.7,81,781/- WAS HELD AS INFLATION O F EXPENSES BY THE LEARNED CIT(A) AND SUSTAINED THE ADDITION TO THAT E XTENT. 6. THE LEARNED AR REITERATED HIS SUBMISSIONS MADE B EFORE THE REVENUE AND ARGUED THAT THE ADDITION OF RS.7,81,781 /- CANNOT BE SUSTAINED SINCE THE SAME IS BASED ON ESTIMATE BASED ON ASSUMPTIONS AND PRESUMPTIONS. THE LEARNED DR ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE REVENUE. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. FROM THE FACTS OF THE CASE IT IS EVIDENT THAT THE LEARNED CIT(A) SUSTAINED THE ADDITION OF RS.7,81,781/- ON T HE PRESUMPTION THAT EXCESS CONSUMABLES WERE CHARGED TO THE PROFIT & LOSS ACCOUNT. IN SUCH CIRCUMSTANCES, IT IS OBVIOUS THAT ARITHMETI CALLY THIS ADDITION HAS TO BE MADE BY INCREASING CLOSING WORK-IN-PROGRE SS / CLOSING STOCK OF CONSUMABLES WHICH WILL CORRESPONDINGLY LEAD TO T HE INCREASE OF PROFIT FOR THE CURRENT ASSESSMENT YEAR AND CONSEQUE NTLY REDUCED THE PROFIT OF THE SUBSEQUENT ASSESSMENT YEAR. HOWEVER, THIS FACTUAL ACCOUNTING ASPECT HAS NOT BEEN DEALT WITH BY THE LE ARNED CIT(A). ITA NO.1303/AHD/2010 & 1843/AHD/2012 (AY: 2005-06 A ND 2006-07) VALLABHA INDUSTRIAL CHEMICAL ENGINEERING VS DCIT, C -2(2), BARODA 6 FURTHER, WE FIND FORCE IN THE ARGUMENT OF THE LEARN ED AO THAT WHEN BILLS WERE RAISED FOR ONLY RS.16,58,700/- EXPENDITU RE FOR CONSUMABLES CANNOT BE CHARGED TO PROFIT & LOSS ACCOUNT TO THE E XTENT OF RS.39,22,022/- WHICH WILL RESULT IN LOSS AND THAT I S NOT THE SITUATION IN THIS CASE. SINCE THE ASSESSEE IS EXECUTING MATERIAL S CONTRACT FOR BHEL THE SALE OF CONSUMABLES TO BHEL WILL BE AT A V ALUE HIGHER THAN THE PURCHASE PRICE RESULTING IN PROFIT. FURTHER WHE N THE CONSUMABLES PURCHASED ARE NOT SOLD, OBVIOUSLY TO THAT EXTENT TH ERE WILL BE CLOSING WORK-IN-PROGRESS OR CLOSING CONSUMABLES STOCK. THOU GH THE LEARNED CIT(A) HAD RIGHTLY ATTEMPTED TO GIVE EFFECT TO THIS FINDING OF THE LEARNED AO BY SUSTAINING THE ADDITION OF RS.7,81,78 1/- KEEPING IN VIEW OF THE ASSESSEES CONTRACTS WITH PARTIES OTHER THAN BHEL, LOST SIGHT OF THE ACCOUNTING IMPLICATIONS OF CLOSING STO CK. BEFORE US, NO ARGUMENT WAS ADVANCED BY THE LEARNED AR ON THIS FAC TUAL ASPECT. HOWEVER IN THE INTEREST OF JUSTICE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE HEREBY SUSTAIN THE OR DER OF THE LEARNED CIT(A) CONFIRMING THE ADDITION OF RS.7,81,781/-, HO WEVER, WE DIRECT THE REVENUE TO TREAT THIS AMOUNT AS OPENING STOCK O F CONSUMABLES FOR THE SUBSEQUENT ASSESSMENT YEAR AND CLOSING STOCK OF CONSUMABLES FOR THE CURRENT ASSESSMENT YEAR. ACCORDINGLY, THIS GROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 8. GROUND NO.4: R ESTRICTING THE DISALLOWANCE ON ACCOUNT OF VEHICLES, TELEPHONE AND TRAVELING EXPENSES TO RS.77 ,296/- BEING 1/10 TH OF THE TOTAL EXPENDITURE:- DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE LEARNED AO NOTICED THAT THE ASSESSEE ITA NO.1303/AHD/2010 & 1843/AHD/2012 (AY: 2005-06 A ND 2006-07) VALLABHA INDUSTRIAL CHEMICAL ENGINEERING VS DCIT, C -2(2), BARODA 7 HAD DEBITED A TOTAL AMOUNT OF RS.7,72,955/- TO ITS PROFIT & LOSS ACCOUNT UNDER VARIOUS HEADS AS INDICATED BELOW: ITEMS/PARTICULARS OF EXPENDITURE AMOUNT IN (RS.) PETROL AND DIESEL EXPENSES 2,15,806 REPAIRS AND MAINTENANCE 1,26,172 TRAVELING & CONVEYANCE 1,93,6553 DEPRECIATION ON VEHICLE 71,191 POSTAGE AND TELEPHONE EXPENSES 1,66,233 TOTAL 7,72,955 THE LEARNED AO REQUIRED THE ASSESSEE TO PROVE THAT THE VEHICLE TELEPHONE AND TRAVELING EXPENSES WERE INCURRED EXCL USIVELY FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE. THE ASSESS EE COULD NOT SUBSTANTIATE ITS CLAIM BY PRODUCING ANY LOG BOOK OR ANY OTHER COGENT EVIDENCE THAT THE EXPENDITURE INCURRED IN THE AFORE SAID THREE HEADS WAS ACTUALLY INCURRED FOR THE PURPOSE OF BUSINESS. THE LEARNED AO THEREFORE, DISALLOWED 20% OF THE TOTAL EXPENDITURE OF RS.7,72,955/-, SINCE THERE WAS A POSSIBILITY FOR PERSONAL USE AND ADDED AN AMOUNT OF RS.1,54,591/- TO THE INCOME OF THE ASSESSEE. THE LEARNED CIT(A) HOWEVER, CONSIDERING THE ISSUE AND THE SUBMISSION O F THE ASSESSEE REDUCED THE DISALLOWANCE TO RS.77,296/- BEING 1/10 TH OF THE CLAIM OF THE ASSESSEE UNDER THESE HEADS. RELEVANT PORTION OF HIS FINDING IS REPRODUCED HEREIN UNDER FOR REFERENCE: ITA NO.1303/AHD/2010 & 1843/AHD/2012 (AY: 2005-06 A ND 2006-07) VALLABHA INDUSTRIAL CHEMICAL ENGINEERING VS DCIT, C -2(2), BARODA 8 8.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE AUTHO RIZED REPRESENTATIVE AND THE ORDER OF THE ASSESSING OFFIC ER. SINCE PERSONAL USE OF VEHICLE, TELEPHONE AND TRAVELING ON ACCOUNT OF E XPENSES CANNOT BE RULED OUT SPECIALLY WHEN THE LOG BOOKS ARE NOT MAIN TAINED, THE DISALLOWANCE IS JUSTIFIED. HOWEVER, IT WOULD BE FAI R TO LIMIT THE DISALLOWANCE TO 1/10 TH OF THE EXPENSES CLAIMED ON VEHICLE, TELEPHONE AND TRAVELING EXPENSES. THE ASSESSING OFFICER IS DIRECTED TO COMP UTE THE DISALLOWANCE ACCORDINGLY. 9. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PER USED THE MATERIALS ON RECORD. IT IS PERTINENT TO NOTE THAT T HE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF RENDERI NG ENGINEERING SERVICES AND CONTRACTS. THE BILLS FOR ALL THE EXPEN DITURE ARE OBTAINED AND BOOKED IN THE NAME OF THE FIRM AND ACCORDINGLY, THE PAYMENTS ARE ALSO MADE BY THE FIRM. THE REVENUE HAS NOT CATE GORICALLY POINTED OUT ANY INSTANCE TO ESTABLISH THAT EXPENSES WERE IN CURRED FOR PERSONAL PURPOSE OF THE PARTNERS OF THE FIRM. ADDIT ION MADE BY THE LEARNED AO WHICH WAS FURTHER PARTLY SUSTAINED BY TH E LEARNED CIT(A) IS PURELY ON SURMISES AND CONJECTURE AND DOES NOT H AVE ANY MERIT IN THE EYE OF LAW. THEREFORE, WE HEREBY DELETE THE ADD ITION SUSTAINED BY THE LEARNED CIT(A). ACCORDINGLY, THIS GROUND OF APP EAL OF THE ASSESSEE IS ALLOWED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE FOR A Y 2006-07 IS PARTLY ALLOWED. ITA NO.1303/AHD/2010 & 1843/AHD/2012 (AY: 2005-06 A ND 2006-07) VALLABHA INDUSTRIAL CHEMICAL ENGINEERING VS DCIT, C -2(2), BARODA 9 ITA NO.1843/AHD/2012 (ASSESSEES APPEAL FOR AY 2005-06) 12. GROUND NO.4: CONFIRMING THE ACTION OF AO IN MAKING DISALLOWANCE OF RS.8,88,636/- ON ACCOUNT OF SALARY AND INTEREST PAID TO THE PARTNERS OF THE APPELLANT FIRM:- THE LEARNED AO OBSERVED THAT DURING THE PREVIOUS YEAR THE ASSESSEE FIRM WAS RECONSTITUTED. THE ASSESSEE WAS ACCORDINGLY REQUIRE D TO FURNISH THE REVISED PARTNERSHIP DEED ALONG WITH THE RETURN OF I NCOME AS REQUIRED U/S 184 (4) AND 185 OF THE ACT. THE ASSESSEE DID NO T FILE THE TRUE COPY OF THE PARTNERSHIP DEED DULY CERTIFIED AND SIGNED B Y ALL THE PARTNERS ALONG WITH THE RETURN OF INCOME OF THE RELEVANT ASS ESSMENT YEAR DURING WHICH THERE WAS CHANGE IN THE CONSTITUTION O F THE ASSESSEE FIRM. THE SAME WAS FILED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. BASED ON THIS, THE LEARNED AO DISALLOW ED THE ASSESSEES CLAIM OF SALARY AND INTEREST PAYMENT TO ITS PARTNERS U/S 40(B) (II) OF THE ACT AMOUNTING TO RS.8,88,636/-. T HE LEARNED CIT(A) IN APPEAL REJECTED THE CLAIM OF THE ASSESSEE AND UPHEL D THE ORDER OF THE LEARNED AO BY OBSERVING AS UNDER:- 5.2 DECISION IN APPEAL, NOTHING HAS BEEN SUBMITTED TO SUPPORT TH E GROUND OF APPEAL RAISED. THE STATEMENT OF FACTS A ND GROUND OF APPEAL FILED ALSO DO NOT THROW ANY LIGHT ON THE CONTENTIONS OF THE ASSESSEE. PRIMA-FACIE THERE DOES NOT SEEM TO BE ANY ERROR IN THE ORDER OF THE ASSESSING OFFICER. HENCE THERE IS NO JUSTIFICATION TO INTERFERE WITH THE ORDER PASSED BY THE ASSESSING OFFICER. THE GROUND OF APPEAL IS REJECTED. ITA NO.1303/AHD/2010 & 1843/AHD/2012 (AY: 2005-06 A ND 2006-07) VALLABHA INDUSTRIAL CHEMICAL ENGINEERING VS DCIT, C -2(2), BARODA 10 13. THE LEARNED AR SUBMITTED COPY OF THE ORDER OF I TAT AHMEDABAD B BENCH DATED 26-07-2001 IN ITA NO.2318 /AHD/2000 IN THE CASE OF SARJAK ENGINEERING WORKS VS ITO AND ARG UED THAT THE ISSUE IS SQUARELY COVERED. THE LEARNED DR ON THE O THER HAND RELIED ON THE ORDERS OF THE REVENUE. 14. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY PERUSED THE MATERIALS ON RECORD. AS POINTED BY THE LEARNED AR T HE ISSUE IS COVERED BY THE ORDER OF THE TRIBUNAL REFERRED TO SU PRA. THE RELEVANT PORTION OF THE ORDER IS REPRODUCED HEREIN BELOW: 5. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AS WELL AS ORDER OF I. T. A. T., DELHI BENCHA IN THE CASE OF ISHAR DASS SAI NI & SONS VS. DY. CIT (SUPRA). IN THE PRESENT CASE, IT IS NOT DISPUTED THAT RETURN WAS FILED BY THE ASSESSEE WAS ACCOMPANIED BY AN UNCERTIFIED PHOTO COPY OF THE PARTNERSHIP DEED AND A CERTIFIED COPY WAS MADE AVAILABLE AT THE TIME OF RE-ASSESSMEN T PROCEEDINGS. WE, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF I. T. A. T. DELHI BENCH A IN THE CASE OF ISHAR DASS SAINI & SONS VS. DY. CIT REPORTED IN 60 TTJ PG. 125, DIRECT THE ASSESSING OFFICER TO ASSESS THE ASSESSEE AS A FIRM AND ALLOW INTEREST AND REMUNERATION AMOUNTING TO RS.1,71,736/ - AS PER PROVISIONS CONTAINED IN SECTION 40(B) OF THE I. T. ACT., 1961. 16. IN THIS CASE BEFORE US, THE ASSESSEE HAD FILED THE RELEVANT DOCUMENTS SUCH AS THE CERTIFIED PARTNERSHIP DEED ET C. AT THE TIME OF THE ASSESSMENT PROCEEDINGS BEFORE THE LEARNED AO AN D THE SAME IS NOT DISPUTED. FROM THE ORDER OF THE TRIBUNAL CITED SUPRA, IT IS OBVIOUS ITA NO.1303/AHD/2010 & 1843/AHD/2012 (AY: 2005-06 A ND 2006-07) VALLABHA INDUSTRIAL CHEMICAL ENGINEERING VS DCIT, C -2(2), BARODA 11 THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE . THEREFORE, WE HEREBY DIRECT THE LEARNED AO TO ALLOW THE EXPENDITU RE RS.8,88,636/- PAID BY THE ASSESSEE ON ACCOUNT OF SALARY AND INTER EST TO THE PARTNERS OF THE FIRM. ACCORDINGLY, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE FOR A Y 2005-06 IS ALLOWED AND THE APPEAL OF THE ASSESSEE FOR AY 2006- 07 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 -03-2013 SD/- SD/- (MUKUL KUMAR SHRAWAT) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANTA DEKA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD ITA NO.1303/AHD/2010 & 1843/AHD/2012 (AY: 2005-06 A ND 2006-07) VALLABHA INDUSTRIAL CHEMICAL ENGINEERING VS DCIT, C -2(2), BARODA 12 1. DATE OF DICTATION- DIRECT ON COMPUTER 15-03-13 2 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER/ OTHER MEMBER 15-03-13/20-03-13 3 DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./ P.S.: 4 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 5 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR . P.S./P.S.: 6 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 8 THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER 9 DATE OF DESPATCH OF THE ORDER: