M/s Fateh Realtors Pvt. Ltd., Chandigarh V. DCIT, C-6(1), Mohali

ITA 1507/CHANDI/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1502 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 05-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MODIT SRIVASTAVA SR DR
• Keywords: Income from undisclosed sources; Reason to believe; Reassessment proceedings
• Section: 143(3); 234B; 68; 148

Judgement Text

, .. , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BEN CHES, SMC CHANDIGARH .., ! BEFORE: SHRI. N.K.SAINI, VICE PRESIDENT ITA NO.1507/CHD/2018 ASSESSMENT YEAR : 2008-09 M/S FATEH REALTORS PRIVATE LIMITED. H.NO. 1055, SECTOR 27-B CHANDIGARH DY. CIT CIRCLE-6(1), MOHALI PAN NO:AABCF1636K APPELLANT RESPONDENT !' ASSESSEE BY : SHRI SUDHIR SEHGAL, ADVOCATE #!' REVENUE BY : SHRI MODIT SRIVASTAVA, SR. DR $ %! & DATE OF HEARING : 12/06/2019 '()*! & DATE OF PRONOUNCEMENT : 14/06/2019 '#/ ORDER PER N.K. SAINI, VICE PRESIDENT THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DT.12/09/2018 OF LD. CIT(A)-2, CHANDIGARH. 2. IN THE PRESENT APPEAL ASSESSEE HAS RAISED THE FO LLOWING GROUNDS: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE REASSESSMENT ORDER DATED 29.03.2016 PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 ('THE ACT') IS WITHOUT JURISDICTION AND BAD IN LAW. 1.1 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE PROCEEDINGS UNDER SECTION 147 OF THE ACT HAVING BEEN INITIATED WITHOUT THERE BEING 'REASON TO BELIEVE' THAT INCOME OF THE APPELLANT HAD ESCAPED ASSESSMENT , THE IMPUGNED ORDER IS ILLEGAL AND BAD IN LAW 1.2 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE REASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE ACT HAVING BEI NG INITIATED MERELY ON THE BASIS OF INFORMATION RECEIVED, WITHOUT INDEPENDENT APPLICATI ON OF MIND BY THE LEARNED ASSESSING OFFICER TO SUCH INFORMATION AND FORMING OPINION THE REOF, IS ILLEGAL AND BAD IN LAW. 1.3 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE INITIATION OF THE REASSESSMENT PROCEEDINGS, BEING BASED ON REAPPRAISA L OF EXISTING MATERIAL/ INFORMATION, WITHOUT THERE BEING ANY NEW TANGIBLE INFORMATION/MA TERIAL AVAILABLE WITH THE ASSESSING OFFICER, THE IMPUGNED ORDER IS ILLEGAL AND BAD IN L AW. 1.4 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE REASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE ACT HAVING BEI NG INITIATED FOR THE PURPOSE OF SCRUTINIZING/ INVESTIGATING THE DETAILS OF THE APPE LLANT, IS ILLEGAL AND BAD IN LAW. 2. THAT THE LEARNED ASSESSING OFFICER ERRED ON FACTS A ND IN LAW IN COMPLETING THE ASSESSMENT AT INCOME OF RS.27,42,700 AS AGAINST INC OME OF RS.32,700 RETURNED BY THE APPELLANT. 2 3. THAT THE LEARNED ASSESSING OFFICER ERRED ON FACT S AND IN LAW IN MAKING ADDITION OFRS.27,10,000 UNDER SECTION 68 OF THE ACT ON ACCOU NT OF ALLEGED BOGUS UNSECURED LOANRECEIVED FROM M/S. ICRMS PVT. LTD IN THE ASSESS MENT YEAR UNDER CONSIDERATION. 3.1 THAT THE LEARNED ASSESSING OFFICER ERRED ON FAC TS AND IN LAW IN TREATING THE AMOUNT OF UNSECURED BUSINESS LOAN AS UNACCOUNTED INCOME OF THE APPELLANT. 3.2 THAT THE LEARNED ASSESSING OFFICER ERRED ON FAC TS AND IN LAW IN ALLEGING THAT THE APPELLANT HAD FAILED TO DISCHARGE THE ONUS IN TERMS OF PROVISIONS OF SECTION 68 OF THE ACT IN SO FAR AS THE 'GENUINENESS' OF THE LOAN TRANSACTION REMAINED UN ESTABLISHED. 4. THAT THE LEARNED ASSESSING OFFICER ERRED ON FACT S AND IN LAW IN CHARGING INTEREST UNDERSECTION 234B OF THE ACT. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR VARY FROM THE AFORESAID GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 3. AT THE FIRST INSTANCE THE LD. COUNSEL FOR THE AS SESSEE ARGUED THE GROUND NO. 2 TO 3.2 WHICH RELATES TO THE CONFIRMATION OF ADDITION O F RS. 27,10,000/- MADE BY THE A.O. UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 (HEREI NAFTER REFERRED TO AS ACT). 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 30/09/2008 DECLARING TOTAL INCOME OF RS. 32,700/-. SUBSEQUENTLY ON THE BASIS OF INFORMATION RECEIVED FROM DDIT(INV-1), THE PROCEEDI NGS WERE REOPENED UNDER SECTION 147 OF THE ACT BY ISSUING THE NOTICE UNDER SECTION 148 OF THE ACT. IN RESPONSE TO THE SAID NOTICE THE ASSESSEE FURNISHED THE COPY OF THE ORIGI NAL RETURN FILED ON 30/09/2008 AND SUBMITTED THAT THE SAME MAY BE TREATED AS RETURN IN COMPLIANCE TO THE NOTICE UNDER SECTION 148 OF THE ACT. 5. THE A.O. DURING THE COURSE OF ASSESSMENT PROCEED INGS NOTICED THAT SCHEDULE -3 OF THE BALANCE SHEET REVEALED THAT THE ASSESSEE HAD TAKEN UNSECURED LOAN OF RS. 27.10 LACS FROM M/S ICRMS PVT. LTD. AND THAT NO INTEREST ON THIS LOAN WAS CHARGED BY THE CREDITOR NOR THE LOAN WAS RETURNED BACK. HE ASKED T HE ASSESSEE TO EXPLAIN AS TO WHY INTEREST FREE LOAN OF RS. 27.10 LACS MAY NOT BE ADD ED TO THIS INCOME UNDER SECTION 68 OF THE ACT. IN RESPONSE THE ASSESSEE SUBMITTED AS UNDE R: 'AS PER THE PROVISIONS OF SECTION 68 OF THE INCOME TAX ACT, 1961 ANY CREDIT IN THE BOOKS OF THE ASSESSEE CAN BE ADDED TO ITS INCOME ONLY IF THE ASSESSEE OFFERS NO EXPLANATION OR THE EXPLANATION OFFERED BY THE ASSESSEE, IN THE OPINION OF THE ASSESSING OFFICER, IS NOT SATISFACTORY. UNDOUBTEDLY ASSESSE HAS GIVEN THE EXP LANATION THAT THESE CREDITS ARE IN THE SHAPE OF UNSECURED LOANS FROM M/S INTERNATIONAL CUS TOMERS RELATED MANAGEMENT SERVICES PRIVATE LIMITED. FURTHER THE EXPLANATION G IVEN BY THE ASSESSEE CANNOT BE TREATED AS UNSATISFACTORY IN THE LIGHT OF FACTS GIVEN BELOW . ASSESEE HAS TAKEN LOAN OF RS. 27.10 LACS FROM M/S I NTERNATIONAL CUSTOMERS RELATED MANAGEMENT SERVICES PRIVATE LIMITED DURING THE PREV IOUS YEAR 2007-08 RELEVANT TO THE ASSESSMENT YEAR 2008-09. ASSESSEE HAS TAKEN THIS LO AN THROUGH ACCOUNT PAYEE CHEQUES/RTGS. IN PLETHORA OF JUDGMENTS PRONOUNCED B Y VARIOUS COURT IT HAS BEEN CLEARLY LAID DOWN THAT UNSECURED LOAN TAKEN BY THE ASSESSEE CAN BE ADDED TO ITS INCOME ONLY IF THE ASSESSEE IS NOT ABLE TO PROVE IDENTITY, CAPACIT Y OF LENDERS AS WELL AS GENUINENESS OF TRANSACTION. IN THE PRESENT CASE NONE OF THESE COND ITIONS ARE SATISFIED. IDENTITY OF THE BORROWER IS WELL ESTABLISHED AS THE LENDER IS A PRI VATE LIMITED COMPANY ASSESSED TO TAX IN YOUR CIRCLE ONLY. LENDER HAS ALSO FILED ITS INCOME TAX RETURN FOR THE RELEVANT PERIOD AND THERE WAS SUFFICIENT BALANCE IN THE BONK ACCOUNT OF THE L ENDER AS ON THE DATE OF TRANSACTION OF LOAN AS SUCH THE CAPACITY OF THE LENDER IS ALSO WEL L ESTABLISHED. SINCE ALL THESE TRANSACTIONS ARE THROUGH BANKING CHANNEL GENUINENESS OF THE TRAN SACTIONS IS ALSO BEYOND DOUBT. SINCE LENDER IS ASSESSED TO TAX, BALANCE SHEET OF THE LEN DER GIVING DETAIL OF THESE ADVANCES, BANK ACCOUNTS, PAN OF THE LENDER ARE ALREADY ON REC ORD WITH GOODSELF AS SUCH IT IS NOT APPROPRIATE TO TREAT THESE CREDITS AS CREDIT, FOR W HICH EXPLANATION GIVEN BY THE ASSESSEE IS 3 NOT SATISFACTORY. BALANCE SHEET OF THE LENDER COMPA NY CONFIRMING THE ADVANCE OF RS 27.10 LACS TO THE ASSESSEE, ITR OF THE LENDER COMPANY TO ESTABLISH ITS CREDIT WORTHINESS AND COPY OF BANK STATEMENT OF THE LENDER COMPANY TO PROVE TH E GENUINENESS OF THE TRANSACTION ARE ATTACHED TO THIS LETTER. IN THE LIGHT OF SUBMISSIONS GIVEN ABOVE WE REQUEST YOUR GOODSELF TO NOT TO ADD THIS AMOUNT TO THE RETURNED INCOME OF THE ASSESSEE AND OBLIGE. WE MAY LIKE TO BRING IT TO YOUR NOTICE THAT PRESENT OUTSTANDING AGAINST THIS UNSECURED LOAN IS RS 26.68 LACS. ' 5.1 IT WAS FURTHER SUBMITTED THAT THE ASSESSEE PROV IDED THE IDENTITY OF THE CREDITOR, CAPACITY OF THE LENDER AS WELL AS GENUINENESS OF TH E TRANSACTION THEREFORE THE ADDITION UNDER SECTION 68 OF THE ACT COULD NOT HAVE BEEN MAD E. HOWEVER THE A.O. HELD THAT THE IDENTITY OF THE CREDITOR AND ITS CAPACITY WAS N OT IN QUESTION. HE FURTHER OBSERVED THAT TWO OF THE DIRECTORS OF M/S ICRMS PVT. LTD. NA MELY MR. SAGAR SINGH DUA AND MR. JATINDER SINGH DUA WERE DIRECTORS OF THE ASSESSEE C OMPANY ALSO. HE THEREFORE BY RELYING UPON THE DECISION IN CASE OF CIT VS. DURGA PRASAD MORE [1971] 82 ITR 540, SUMATI DAYAL VS. CIT [1995] 214 ITR 801 (SC) AND RIDDHI PR OMOTERS(P.)LTD. VS. CIT-7 [2015] 58 TAXMAN.COM 367(DEL) HELD THAT THE GENUINENESS OF TH E TRANSACTION OF THE CASH CREDIT WAS NOT ESTABLISHED. ACCORDINGLY ADDITION OF RS. 27 .10 LACS WAS MADE IN THE HANDS OF THE ASSESSEE. 6. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED AS UNDER: ADMITTEDLY ASSESSEE HAS TAKEN A LOAN OF RS 27.10 L ACS FROM M/S INTERNATIONAL CUSTOMERS RELATED MANAGEMENT SERVICES PRIVATE LIMITED DURING THE PREVIOUS YEAR 2007-08 RELEVANT TO THE ASSESSMENT YEAR 2008-09. THIS LOAN WAS TAKEN THROUGH ACCOUNT PAYEE CHEQUES/RTGS. COPY OF ACCOUNT OF M/S INTERNATIONAL CUSTOMERS RELATED MANAGEMENT SERVICES PRIVATE LIMITED IN THE BOOKS OF THE ASSESS EE. LEARNED ASSESSING OFFICER HAS ADDED THIS LOAN TO THE INCOME OF THE ASSESSEE UNDER SECTI ON 68 OF THE INCOME TAX ACT, 1961 BY ORDERING THAT THE ASSESSEE FAILED TO ESTABLISH THE GENUINESS OF THE TRANSACTION. ADMITTEDLY AS PER THE PROVISIONS OF SECTION 68 OF T HE INCOME TAX ACT, 1961 ANY CREDIT IN THE BOOKS OF THE ASSESSEE CAN BE ADDED TO THE INCOME OF THE ASSESSEE IF THE ASSESSEE OFFERS NO EXPLANATION OR THE EXPLANATION OFFERED BY THE AS SESSEE, IN THE OPINION OF THE ASSESSING OFFICER, IS NOT SATISFACTORY. BUT IN THE PRESENT CA SE ASSESSEE HAS EXPLAINED BEFORE THE LEARNED ASSESSING OFFICER THAT THE LOAN WAS TAKEN F ROM M/S INTERNATIONAL CUSTOMERS RELATED MANAGEMENT SERVICES PRIVATE LIMITED. THE LO AN WAS TAKEN BY WAY OF ACCOUNT PAYEE CHEQUES/RTGS. ASSESSEE SUBMITTED BEFORE THE L EARNED ASSESSING OFFICER THE COPY OF BANK ACCOUNTS OF BOTH THE COMPANIES. IDENTITY OF TH E BORROWER WAS BEYOND DOUBT AS M/S INTERNATIONAL CUSTOMERS RELATED MANAGEMENT SERVICES PRIVATE LIMITED WAS ALSO ASSESSED IN THE SAME WARD. TRANSACTIONS WERE DULY RECORDED I N THE BOOKS OF BOTH THE COMPANIES. WITHOUT ESTABLISHING ANY CONTRARY MATERIAL ON RECOR D, LEARNED ASSESSING OFFICER JUMPED TO THE CONCLUSION THAT THE TRANSACTION IS NOT GENUINE. IT IS SETTLED LAW THAT ONCE THE ASSESSEE IS PROVIDES EXPLANATION REGARDING IDENTITY OF THE CRED ITOR, CREDIT WORTHINESS OF THE CREDITOR AND GENUINESS OF THE TRANSACTION, NO ADDITION UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 CAN BE MADE WITHOUT BRINGING ANY CONTRARY MATE RIAL ON RECORD AND WITHOUT REQUIRING ASSESSEE TO ADDUCE FURTHER EVIDENCE.' 7. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE CONFIRMED THE ADDITION MADE BY THE A.O. BY OBSERVING IN PARA 7.3 OF THE IMPUGNED ORDER AS UNDER: I HAVE CONSIDERED THE SUBMISSION OF THE COUNSEL AND PERUSED THE ASSESSMENT ORDER. IT IS A SETTLED LAW THAT IN ORDER TO SATISFACTORILY EXPLAIN ED THE CASH CREDIT, THE ASSESSEE HAS TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE PARTY FROM WHOM THE CASH CREDIT IS RECEIVED AND ALSO ESTABLISH THE GENUINENESS OF THE TRANSACTION. IN THE PRESENT CASE, THE FACTS OF THE CASE AND THE INVESTIGATIONS DONE BY TH E DEPARTMENT CLEARLY SHOW THAT THE TRANSACTION OF THE ALLEGED LOAN FROM M/S ICRMS PVT. LTD. OF RS 27.10 LAKHS WAS NOT GENUINE. IN SUCH A SITUATION THE AO HAS CORRECTLY ADDED THIS AMOUNT AS THE UNDISCLOSED INCOME OF THE ASSESSEE. GROUND OF APPEAL NO. 2 IS DISMISSED. 4 8. NOW THE ASSESSEE IS IN APPEAL. 9. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE A. O. HIMSELF ACCEPTED THAT THE IDENTITY, CREDIT WORTHINESS OF THE LENDER WAS NOT I N QUESTION. AS REGARDS TO THE GENUINENESS OF THE TRANSACTION, IT WAS SUBMITTED TH AT THE ASSESSEE RECEIVED THE AMOUNT THROUGH ACCOUNT PAYEE CHEQUE WHICH WAS REFLECTED IN THE BALANCE SHEET OF THE CREDITOR, THE REFERENCE WAS MADE TO PAGE NO. 31 OF THE ASSESSEES PAPER BOOK WHICH IS THE COPY OF THE SCHEDULE-6 ATTACHED TO THE BALANCE SHEET OF M/S ICRMS PVT. LTD. AS ON 31/03/2018 WHEREIN THE SUM OF RS. 27.10 LACS HAS BE EN SHOWN UNDER THE HEAD LOAN AND ADVANCES IN THE NAME OF THE ASSESSEE I.E; M/S F ATEH REALTORS PVT. LTD. IT WAS FURTHER SUBMITTED THAT THE AMOUNT WAS RECEIVED BY THE ASSES SEE AS AN ADVANCE/LOAN AND THE SUM OF RS. 42,000/- WAS RECEIVABLE ON ACCOUNT OF SU PPLY OF MITTI(SAND) ON 15/03/2018 WHICH WAS ADJUSTED AGAINST THE ADVANCE AS SUCH OUTS TANDING AMOUNT WAS RS. 26,68,000/-, A REFERENCE WAS MADE TO PAGE NO. 35 OF THE ASSESSEES PAPER BOOK WHICH IS THE DETAILS OF THE TRANSACTIONS WITH M/S ICRMS P VT. LTD. IN THE ASSESSEES BOOKS OF ACCOUNTS. IT WAS FURTHER SUBMITTED THAT THE CREDITO R HAD ISSUED A CERTIFICATE WITH EFFECT TO THE AMOUNT OUTSTANDING IN THE NAME OF THE ASSESS EE COPY OF WHICH IS PLACED AT PAGE NO. 36 OF THE ASSESSEES COMPILATION. IT WAS A CCORDINGLY SUBMITTED THAT THE TRANSACTIONS WAS A GENUINE TRANSACTIONS THEREFORE T HE ADDITION MADE BY THE A.O. AND SUSTAINED BY THE LD. CIT(A) WAS NOT JUSTIFIED. 10. IN HIS RIVAL SUBMISSIONS THE LD. SR. DR STRONGL Y SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT M/S IC RMS PVT. LTD. HAD EARNED HUGE PROFITS FROM LAND CONSIDERATION DEALING WITH VARIOU S COMPANIES OF DLF GROUP AND SIPHONED OFF THESE AMOUNT TO ITS SISTER CONCERNS IN THE FORM OF LOAN THEREFORE THE A.O. RIGHTLY MADE THE ADDITION AND THE LD. CIT WAS JUSTI FIED IN SUSTAINING THE SAME. 11. I HAVE CONSIDERED THE SUBMISSION OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESEN T CASE IT IS AN ADMITTED FACT THAT THE A.O. ACCEPTED THE IDENTITY AND CREDIT WORTHINESS OF THE LENDER I.E; M/S ICRMS PVT. LTD. HE ONLY DOUBTED THE GENUINENESS OF THE TRANSACTION AND MADE THE ADDITION UNDER SECTION 68 OF THE ACT. AS REGARDS TO THE GENUINENES S OF THE TRANSACTION IS CONCERNED IT IS NOT IN DISPUTE THAT THE ASSESSEE RECEIVED THE AMOUN T IN QUESTION THROUGH BANKING CHANNEL AND THIS AMOUNT WAS SHOWN BY THE LENDER UND ER THE HEAD LOAN AND ADVANCES IN ITS BALANCE SHEET, COPY OF WHICH IS PLA CED AT PAGE NO. 31 OF THE ASSESSEES COMPILATION. THE ASSESSEE ADJUSTED AN AM OUNT OF RS. 42,000/- AGAINST SUPPLY OF MITTI(SAND) TROLLIES AND OUTSTANDING AMOUNT WAS AT RS. 28,68,000/-. THE SUPPLY OF SAND BY THE ASSESSEE TO M/S ICRMS PVT. LTD. AND ADJUSTME NT OF RS. 42,000/- AGAINST THE LOAN HAS NOT BEEN DOUBTED SO IT CANNOT BE SAID THAT THE ADVANCE / LOAN WAS NOT RECEIVED BY THE ASSESSEE FOR BUSINESS EXIGENCY. THEREFORE TH E A.O. WAS NOT JUSTIFIED IN DOUBTING THE GENUINENESS OF THE TRANSACTION AND MAKING THE A DDITION UNDER SECTION 68 OF THE 5 ACT. WE THEREFORE BY CONSIDERING THE TOTALITY OF TH E FACT DELETE THE IMPUGNED ADDITION SUSTAINED BY THE LD. CIT(A). 12. AS REGARD THE GROUND NO. 4 RELATING TO CHARGING OF INTEREST UNDER SECTION 234B OF THE ACT. IT WAS A COMMON CONTENTION OF BOTH THE PAR TIES THAT IT IS CONSEQUENTIAL IN NATURE. THEREFORE, IT IS HELD THAT CHARGING OF INTE REST UNDER SECTION 234B OF THE ACT IS CONSEQUENTIAL IN NATURE. SINCE I HAVE DECIDED THE I SSUE ON MERITS, THEREFORE NO FINDING HAS BEEN GIVEN ON THE LEGAL ISSUE RAISED BY THE ASS ESSEE REGARDING INITIATION OF PROCEEDINGS UNDER SECTION 147 OF THE ACT ON THE BAS IS OF INFORMATION RECEIVED FROM THE INVESTIGATION WING. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. (ORDER PRONOUNCED IN THE OPEN COURT 14.06.2019) SD/- .., ( N.K. SAINI) ! / VICE PRESIDENT AG DATE:14/06/2019 (+! ,-.- COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. $ / CIT 4. $ / 01 THE CIT(A) 5. -2 45&456789 DR, ITAT, CHANDIGARH 6. 8:% GUARD FILE