Sh. Saran Pal Singh (HUF), Chandigarh V. Addl. CIT, Chandigarh

ITA 156/CHANDI/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5379 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 08-02-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S S KEMWAL
• Keywords: Business income; Commercial expediency
• Section: 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI D.K.SRIVASTAVA, ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 156/CHD/2011 ASSESSMENT YEAR: 2007-08 SHRI SARAN PAL SINGH, HUF V ADDL. CIT, RANGE III PROP. M/S AMARSONS, CHANDIGARH. CHDNGIARH. PAN NO. AAKHS-0693D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY: SHRI S.S.KEMWAL ORDER PER SUSHMA CHOWLA, JM THE APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A), CHANDIGARH DATED 01.10.2010 RELATING TO ASSESSMENT YEAR 2007-08 AGAINST THE ORDER PASSED UNDER SECTION 250 OF THE I.T. ACT, 1961. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE ADDITION OF RS. 33,534/-- MA DE ON ACCOUNT OF DISALLOWANCE OF INTEREST CLAIMED ON T HE GROUND THAT THE ADVANCE OF RS.20 LACS GIVEN FOR PURCHASE OF PLOT FOR GODOWN AT BADDI WAS NOT FOR BUSINESS PURPOSE WHICH IS ARBITRARY AND UNJUSTIFIED . 2. THAT THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLDING THE REJECTION OF BOOKS OF ACCOUNT WHICH ARE DULY AUDITE D WITHOUT PINPOINTING ANY DEFECT IN ITS MAINTENANCE WHICH IS ARBITRARY AND UNJUSTIFIED. 2 3. THAT THE LD. CIT(A HAS FURTHER ERRED IN UPHOLDING THE ADDITION OF RS.24,15,381/- MADE BY THE AO APPLYING GP RATE OF 11% AS AGAINST 7.5% DECLARED ON SALES OF RS.6,8900,000/- WHICH IS ARBITRARY AND UNJUSTIFIED. 3. THE ISSUE IN GROUND NO.1 IS AGAINST PART DISALLO WANCE OF INTEREST. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTED THE ASSESSEE T O HAVE BORROWED FUNDS FROM BANKS AND OTHERS AND PAID INTEREST ON IT . THE ASSESSEE HAD ALSO MADE CERTAIN INTEREST FREE ADVANCES ON WHICH NO INT EREST WAS CHARGED. THE AO REQUISITIONED THE ASSESSEE TO SPECIFICALLY E XPLAIN THE PURPOSE FOR WHICH SUCH INTEREST FREE ADVANCES WERE MADE. ONE S UCH ADVANCE WAS OF RS.20,00,000/- FOR THE PURCHASE OF PLOT FOR GODOWN AT BADDI. THE ASSESSEE HAD PAID RS.5,00,000/- ON 22.01.2007 AND R S.15,00,000/- ON 05.02.2007 AS ADVANCE FOR THE PURCHASE OF THE SAID PLOT FOR GODOWN AT BADDI. THE ASSESSEE IN HIS REPLY SUBMITTED THAT TH E DEAL IN RESPECT OF SAID PLOT OF LAND DID NOT MATURE. THE AO WAS OF THE VIE W THAT AS THE LAND WAS NOT REGISTERED IN THE NAME OF THE ASSESSEE, AS SUCH ADVANCE WAS NOT FOR THE PURPOSE OF BUSINESS. THE AO ACCORDINGLY, DISALLOWE D INTEREST @ 12% AMOUNTING TO RS.33,534/- UNDER THE PROVISIONS OF SE CTION 36(1)(III) OF THE I.T.ACT, RELYING ON THE RATIO LAID DOWN BY HON'BLE PUNJAB & HARYANA HIGH COURT IN M/S ABHISHEK INDUSTRIES LTD. (286 ITR 1 (P &H). THE CIT(A) UPHELD THE ORDER OF AO IN VIEW OF THE PROVISIONS OF SECTION 36(1)(III) OF THE ACT THAT UNTIL THE ASSET IS PUT TO USE, THE AMO UNT PAID IN RESPECT OF CAPITAL BORROWED FOR THE PURPOSE OF BUSINESS IS NOT TO BE ALLOWED. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A) A ND HENCE GROUND NO.1 RAISED BY THE ASSESSEE. 4. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT THE ASSESSEE HAD ADVANCED THE SAID AMOUNT FOR PURCHASE OF GODOWN AT BADDI, HIMACHAL 3 PRADESH AND THE LAND BEING IN HIMACHAL PRADESH, COU LD NOT BE TRANSFERRED IN THE NAME OF THE ASSESSEE AS NO PERMISSION WAS GR ANTED BY THE STATE GOVERNMENT. THE LD. AR FOR THE ASSESSEE CLAIMED TH AT THE SAID AMOUNT WAS ADVANCED FOR COMMERCIAL EXPEDIENCY AND NO PART OF THE INTEREST IS DISALLOWABLE IN RESPECT OF SUCH AMOUNT. THE LD. DR FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF CIT(A). 5. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD. UNDER THE PROVISIONS OF THE INCOME-TAX ACT, THE AMOUNT OF INT EREST IN RESPECT OF BORROWED FUNDS, IF UTILIZED FOR THE PURPOSE OF BUSI NESS ARE TO BE ALLOWED AS A DEDUCTION U/S 36(1)(III) OF THE ACT. THE COUR TS HAVE HELD THAT WHERE SUCH BORROWED FUNDS ARE UTILIZED FOR MAKING INTERES T FREE ADVANCES, THEN, INTEREST ATTRIBUTABLE TO SUCH INTEREST FREE ADVANCE S IS TO BE DISALLOWED. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN ABHISHEK INDUSTRIES LTD. (SUPRA) HAS LAID DOWN THE ABOVESAID RATIO. IN THE FACTS OF THE PRESENT CASE BEFORE US, THE ASSESSEE HAD ADVANCED RS.20,00,000/- FOR THE PURCHASE OF A PLOT FOR GODOWN AT BADDI (HP). THE SAID PLOT COULD NOT BE ACQUIRED BY THE ASSESSEE AS PERMISSION FOR ITS ACQUISITION WAS REFU SED BY THE STATE GOVERNMENT. THE AFORESAID INVESTMENT FOR ACQUIRING A PLOT FOR GODOWN IN BADDI CANNOT BE SAID TO BE AN ADVANCE BUT IS AN EXP ENDITURE RELATABLE TO THE CARRYING ON OF THE BUSINESS OF THE ASSESSEE. T HE SAID INVESTMENT SATISFIES THE PRINCIPLE OF COMMERCIAL EXPEDIENCY IN THE HANDS OF THE ASSESSEE. ONCE AN EXPENDITURE IS RELATED TO THE CAR RYING ON OF THE BUSINESS BY THE ASSESSEE, THE ALLIED EXPENSES IN THE PRESENT CASE BEING INTEREST ATTRIBUTABLE TO THE BORROWED FUNDS UTILIZED FOR THE PURPOSE OF THE SAID INVESTMENT CANNOT BE DISALLOWED UNDER THE PROVISION S OF SECTION 36(1)(III) OF THE ACT. THE PROVISO U/S 36(1)(III) OF THE ACT PROVIDES FOR CAPITALIZED BY INTEREST PAID IN RESPECT OF CAPITAL BORROWED FOR THE ACQUISITION OF AN ASSET FOR EXTENSION OF EXISTING BUSINESS OR PROFESS ION, FOR ANY PERIOD 4 BEGINNING FROM THE DATE ON WHICH CAPITAL WAS BORROW ED TILL THE DATE ON WHICH THE ASSET WAS FIRST PUT TO USE. THE SAID PRO VISIONS ARE NOT APPLICABLE TO THE FACTS BEFORE US AS THE ADVANCE WA S PAID BY THE ASSESSEE AGAINST PROPOSAL TO PURCHASE AN ASSET WHICH ULTIMAT ELY WAS NOT ACQUIRED BY THE ASSESSEE. ACCORDINGLY, WE DIRECT THE AO TO D ELETE THE ADDITION OF RS.33,534/-. GROUND NO.1 RAISED BY THE ASSESSEE IS ALLOWED. 5. THE ISSUE IN GROUND NO. 2 & 3 RAISED BY THE ASS ESSEE IS AGAINST REJECTION OF BOOKS OF ACCOUNT AND APPLICATION OF GP RATE OF 11% TO THE TOTAL SALES TO COMPUTE AN ADDITION OFRS.24,15,038/- . 6. THE ASSESSEE IS CARRYING ON THE BUSINESS OF WHOL ESALE AND RETAIL CLOTH MERCHANT. THE ASSESSEE HAD FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.985,220/-. THE AO NOTES IN PARA 1 AT PAGE 1 OF THE ASSESSMENT ORDER THAT THE ASSESSEE HAD FURNISHED TH E DETAIL/INFORMATION AS CALLED FOR, AND ALSO PRODUCE THE BOOKS OF ACCOUNT A LONGWITH BILLS/VOUCHERS WHICH WERE TEST CHECKED. THE ASSESSEE WAS NOT MAIN TAINING STOCK REGISTER. THE AO NOTED THAT THE SALES BILLS ISSUED BY THE ASSESSEE DO NOT SPECIFY THE ITEMS SOLD NOR DOES IT DEPICT THE QUALI TY OF THE PRODUCT SOLD. AS PER THE AO IT WAS NOT POSSIBLE TO CO-RELATE THE PURCHASES AND SALES DURING THE YEARS. THE ASSESSEE HAD SHOWN GROSS PRO FIT OF 7.5% ON TOTAL SALES OF RS.6.89 CR. THE ASSESSEE WAS REQUISITIONE D TO GIVE REASONS FOR THE LOW PROFIT SHOWN. IN REPLY IT WAS EXPLAINED BY THE ASSESSEE THAT AS HE WAS DOING WHOLESALE BUSINESS OF CLOTH AND PARTLY RE TAILER, THEREFORE THE MARGIN OF PROFIT WAS LESS. A COMPARISON WAS MADE T O ANOTHER CLOTH SELLER OF AMBALA I.E. M/S SHIVAM SAREES WHO DURING THE YEA R HAD SHOWN GROSS PROFIT OF 10.68% ON TURNOVER OF 6.35 CR AND THE ASS ESSEE ALSO HAD SHOWN PROFIT OF 10.19% DURING ASSESSMENT YEAR 2004-05, I. E. THE YEAR IN WHICH THE ASSESSEE HAD MADE SURRENDER IN CLOSING STOCK DU E TO SURVEY. THE AO, 5 IN VIEW OF THE NON-TALLYING OF THE PURCHASES AND SA LE BILLS, REJECTED THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE AND EST IMATED THE GROSS PROFIT FOR THE YEAR AT 11% IN VIEW OF THE NATURE OF THE BUSINESS AND THE GP SHOWN BY OTHER PARTIES IN THE SAME BUSINESS. AN ADD ITION OF RS.24,15,381/- WAS MADE BY THE AO. THE CIT(A) CONFI RMED THE ORDER OF THE AO REJECTING THE PLEA OF THE ASSESSEE THAT IT H AD SHOWN BETTER GP RATE THAN THE PRECEDING YEAR AND NO COMPARISON WAS TO BE MADE WITH PERSONS ENGAGED IN SIMILAR TRADE. THE ASSESSEE IS IN APPEA L AGAINST THE SAID ORDER OF CIT(A). 7. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT THE AO HAD MADE THE ADDITION OBSERVING THAT THE GP RATE OF 7.5% SHOWN D URING THE YEAR WAS LESS THAN THE GP RATE SHOWN THAN THE EARLIER YEAR. IT WAS POINTED OUT BY THE LD. AR THAT THE GP RATE FOR THE YEAR UNDER APPE AL WAS HIGHER THAN THE EARLIER YEAR AND ALSO THE GP RATE OF THE EARLIER YE AR WAS ACCEPTED VIDE ORDER PASSED U/S 143(3) OF THE ACT. THE LD. AR FA IRLY ADMITTED THAT NO STOCK REGISTER WAS BEING MAINTAINED BY THE ASSESSEE IN VIEW OF THE NATURE OF ITS TRADE. RELIANCE WAS PLACED ON THE RATIO LAI D DOWN IN CIT V OM OVERSEAS 315 ITR 185 (P&H). THE LD. AR FURTHER STR ESSED THAT THE RELIANCE OF CIT(A) ON VARIOUS CASE LAWS WAS ENTIREL Y DISTINGUISHABLE AND POINTED OUT THAT THE FACTS HAD TO BE SEEN IN THE RE ALM OF THE RESULTS SHOWN BY THE ASSESSEE AND NOT ON THE BASIS OF RESULTS OF OTHER CONCERNS. REFERENCE WAS MADE TO THE COMPARATIVE CHART OF SALE S DECLARED BY THE ASSESSEE, GROSS PROFIT AND GP RATE DECLARED FOR THE PAST YEARS. IT WAS POINTED OUT THAT ASSESSEE HAD SHOWN BETTER RESULTS THAN THE EARLIER YEARS AND IN ASSESSMENT YEAR 2004-05 THE GP RATE OF 10.19 % WAS SHOWN BECAUSE OF SURRENDER OF STOCK AFTER SURVEY. RELIANCE WAS P LACED ON VARIOUS PROPOSITIONS LAID DOWN IN RESPECT OF THE ACCEPTANCE OF GP RATE DECLARED. IN THE ALTERNATIVE THE LD. AR SUBMITTED THAT EVEN I F GP RATE IS TO BE VARIED, 6 THEN AN AVERAGE BE TAKEN OF ALL THE YEARS I.E. AT 7 .30% AND AS THE ASSESSEE DURING THE YEAR HAD DECLARED GP RATE OF 7.50%, NO A DDITION IS WARRANTED. THE LD. DR FOR THE REVENUE RELYING ON THE ORDER OF THE AUTHORITIES BELOW POINTED OUT THAT EACH YEAR IS AN INDEPENDENT YEAR. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD DE CLARED GP RATE OF 7.50% ON TOTAL SALES OF RS.6.89 CR AS AGAINST GP RA TE OF 6.80% DECLARED IN THE PRECEDING YEAR DURING ASSESSMENT YEAR 2006-07 O N TOTAL SALES OF RS.7.20 CR AND GP RATE OF 6.98% ON TOTAL TURN-OVER OF RS.4.38 CR DECLARED IN ASSESSMENT YEAR 2005-06. THE ASSESSEE HAD DECLAR ED GP RATE OF 10.19% ON SALES OF 4.16 CR IN ASSESSMENT YEAR 2004-05 ON A CCOUNT OF SURRENDER OF 2.20 LACS. IN THE CLOSING STOCK, PURSUANT TO THE SU RVEY CONDUCTED AT THE PREMISES OF THE ASSESSEE. THE ASSESSEE IS MAINTAIN ING REGULAR BOOKS OF ACCOUNT AND THE PURCHASES AND SALES ARE CLAIMED TO BE BACKED BY PROPER BILLS AND VOUCHERS. HOWEVER, NO STOCK REGISTER IS B EING MAINTAINED BY THE ASSESSEE IN VIEW OF THE NATURE OF BUSINESS CARRIED ON BY IT. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED T HAT THERE WAS FALL IN GP RATE DECLARED BY THE ASSESSEE DURING THE YEAR. IN THE LATTER PART OF THE ASSESSMENT ORDER, THE AO FURTHER COMPARES THE TRADI NG RESULTS SHOWN BY THE ASSESSEE WITH THE TRADING RESULTS SHOWN BY ANOT HER CONCERN IN THE YEAR AND WAS OF THE VIEW THAT THE GP RATE DECLARED BY TH E ASSESSEE WAS ON A LOWER SIDE. IN THE FIRST INSTANCE THE GP RATE DECL ARED BY THE ASSESSEE WHEN COMPARED TO THE EARLIER YEARS, WE FIND THE ASS ESSEE TO HAVE DECLARED A HIGHER GP RATE DURING THE YEAR. ONLY IN ASSESSME NT YEAR 2004-05, THE GP RATE WAS HIGHER BECAUSE OF SPECIAL CIRCUMSTANCES OF ADDITIONAL INCOME BEING DECLARED BY THE ASSESSEE. IN THE FACTS OF THE PRESENT CASE BEFORE US, THE AO HAS NOT POINTED OUT ANY DEFECTS IN THE BOOKS OF ACCOUNT EXCEPT TO POINT OUT THAT; (A) THE PURCHASES AND SALES COULD N OT BE TALLIED WITH THE 7 BOOKS MAINTAINED BY THE ASSESSEE AND; (B) THE GP R ATE DECLARED BY THE ASSESSEE DURING THE YEAR WAS LOWER. IN THE FACTS O F THE PRESENT CASE BEFORE US, THE AO HAS NOT POINTED OUT ANY DEFECTS IN THE B OOKS OF ACCOUNT EXCEPT TO POINT OUT THAT; (A) THE GP RATE DECLARED BY THE ASSESSEE DURING THE YEAR WAS LOWER AND; (B) THE PURCHASES AND SALES COULD NO T BE TALLIED WITH THE BOOKS MAINTAINED BY THE ASSESSEE. THE BOOKS OF ACCO UNT MAINTAINED BY THE ASSESSEE WERE REJECTED BY THE AO ON THE SURMISE THA T THE PURCHASES AND SALES ARE NOT VERIFIABLE AS NECESSARY DETAILS IN TH IS RESPECT WERE NOT AVAILABLE. THE EXPLANATION OF THE ASSESSEE IN THIS REGARD WAS THAT IN THE NATURE OF BUSINESS BEING CARRIED ON BY IT, IT WAS N OT FEASIBLE TO MAINTAIN THE RECORDS IN THE MANNER REQUISITIONED BY THE AO. HOWEVER, THE BOOKS OF ACCOUNT WERE MAINTAINED BY THE ASSESSEE AND THE AO DURING THE YEAR UNDER CONSIDERATION HAS FAILED TO POINT OUT ANY DEFECT IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE. SIMILAR BOOKS OF ACCOU NT MAINTAINED BY THE ASSESSEE IN THE EARLIER YEARS WERE ACCEPTED BY THE DEPARTMENT AS IS EVIDENT FROM THE COPY OF THE ASSESSMENT ORDER PLACED ON REC ORD FOR ASSESSMENT YEAR 2006-07 AT PAGES 10 TO 18 OF THE PAPER BOOK UN DER WHICH NO TRADING ADDITION WAS MADE BY THE AO, THOUGH IN THE SAID YEA R TOO NO STOCK REGISTER WAS BEING MAINTAINED. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN CIT V OM OVERSEAS (SUPRA) HAD LAID DOWN TH E RATIO THAT THE REJECTION OF BOOKS OF ACCOUNT WITHOUT SPECIFYING AN Y DEFECT IN THE SAME WAS INVALID. FURTHER THE BOOK RESULTS SHOWN BY TH E ASSESSEE WERE REJECTED ON COMPARISON OF THE GP RESULTS DECLARED B Y THE ASSESSEE IN THE PRECEDING THREE YEARS AND ALSO THE GP RESULTS DECLA RED BY ANOTHER CONCERN OF THE AREA CARRYING ON SIMILAR LINE OF BUSINESS. T HE ASSESSEE, DURING THE YEAR UNDER CONSIDERATION HAD DECLARED GP RATE OF 7. 5% AS AGAINST GP RATE OF 6.98% DECLARED IN THE PRECEDING YEAR. THE ASSES SMENT FOR ASSESSMENT YEAR 2006-07 WAS COMPLETED U/S 143(3) OF THE INCOME -TAX ACT AND AS 8 MENTIONED IN THE PARA HEREIN ABOVE, WITHOUT MAKING ANY TRADING ADDITIONS. THE RESULTS SHOWN DURING THE YEAR UNDER CONSIDERATI ON BEING BETTER THAN THE RESULTS SHOWN IN THE EARLIER YEAR, NO ADDITION IS WARRANTED IN THE YEAR UNDER APPEAL, MERELY ON THE BASIS THAT IN ASSESSMEN T YEAR 2004-05, THE GP RATE DECLARED WAS HIGHER. THE AO, WHILE COMPLETING THE ASSESSMENT HAD NOTED THAT THE GP RATE FOR THE YEAR UNDER APPEAL WA S LOWER THAN THE GP RATE DECLARED IN THE EARLIER YEAR, WHICH IS FACTUAL LY INCORRECT. FURTHER THE GP RATE FOR 2004-05 WAS HIGHER ON ACCOUNT OF ADDITI ONAL INCOME BEING SURRENDERED AFTER SURVEY OPERATION AND THE SAME CAN NOT BE THE BASIS FOR COMPUTING THE INCOME FOR THE YEAR UNDER APPEAL, WHE N NO INCRIMINATING EVIDENCE WAS FOUND AGAINST THE ASSESSEE. IT IS AN E STABLISHED RULE THAT SAME GP RATE CANNOT BE MAINTAINED FROM YEAR TO YEAR AND THE RESULTS OF A PARTICULAR YEAR DEPEND ON THE CIRCUMSTANCES OF THAT YEAR. FURTHER, WE FIND NO MERIT IN REJECTING THE RESULTS SHOWN BY A PARTIC ULAR ASSESSEE WHEN THE SAID RESULTS ARE COMPARED WITH ANOTHER CONCERN CARR YING ON SIMILAR LINE OF BUSINESS UNLESS IT IS ESTABLISHED THAT THE FACTS OF THE TWO CONCERNS WERE ABSOLUTELY IDENTICAL. 9. THE TRADING RESULTS SHOWN BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION BEING HIGHER THAN THE TRADING RESULTS SHOWN IN THE PRECEDING YEAR, WE FIND NO MERIT IN THE STAND OF THE AO AND T HE ORDER OF CIT(A) IN REJECTING THE BOOKS OF ACCOUNT AND ESTIMATING THE P ROFITS OF BUSINESS. NOW COMING TO THE SECOND ISSUE OF ESTIMATION OF GRO SS PROFIT. WE FIND NO MERIT IN THE ORDER OF THE AO IN ADOPTING GP RATE AT 11% AS AGAINST 7.5% SHOWN BY THE ASSESSEE AS THE AO HAS FAILED TO BRING ON RECORD ANY EVIDENCE TO POINT OUT ANY DEFECT IN THE BOOKS OF AC COUNT MAINTAINED BY THE ASSESSEE AND ALSO BECAUSE OF BETTER RESULTS SHOWN B Y THE ASSESSEE WHEN COMPARED TO THE EARLIER YEAR. THE GROUND NOS. 2 & 3 RAISED BY THE ASSESSEE ARE THUS, ALLOWED. 9 10. GROUND NO. 4 IS AGAINST CHARGING OF INTEREST U/ S 234B OF THE ACT, WHICH IS CONSEQUENTIAL AND HENCE DISMISSED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 ST JUNE, 2011. SD/- SD/- (D.K.SRIVASTAVA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 21 ST JUNE, 2011 POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH