The ITO, Ward-8(4), Surat V. M/s. Swastik Construction, Surat

ITA 1601/AHD/2011

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8923 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 21-02-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 10-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH MEENA
• Keywords: Unexplained cash credit; TDS
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 40(a)(ia); 133(6); 205

Judgement Text

, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA.NO.1601/AHD/2011 / ASSTT. YEAR: 2007-2008 INCOME TAX OFFICE R , WARD-8 (4), SURAT VS M/S.SWASTIK CON S TRUCTION, B-8, KAMAL APARTMENT, KATARGAM, SURAT PAN: AAJFS4099J ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI S.K. KABRA , A R REVENUE BY : SHRI OM PRAKASH MEENA, SR.DR / DATE OF HEARING : 21/02/2017 / DATE OF PRONOUNCEMENT: 20/03/2017 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAIN ST THE ORDER OF LD.CIT(A)-I, SURAT, DATED 15/02/2011 PASSED FOR TH E ASSTT. YEAR 2007- 2008. 2. THOUGHTHE REVENUE HAS TAKEN FIVE GROUNDS OF APPE AL, BUT ITS GRIEVANCEREVOLVES AROUND TWO ISSUES NAMELY: ITA NO.1601/AHD/2011 FOR ASSESSMENT YEAR 2007-08 2 A. LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.42,17,418/- WHICH WAS ADDED BY THE AO BY MAKING A DISALLOWANCE WITH THE AID OF SECTION 40(A)(IA) OF THE INCOME TAX, ACT, 1961. B. LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.72,88,879/- WHICH WAS ADDED BY THE AO WITH THE AID OF SECTION 6 8 OF THE INCOME TAX, ACT, 1961. ISSUE NO.1 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSE FIR M AT THE RELEVANT TIME WAS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION. IT HAS FILED ITS RETURN OF INCOME ON 31/10/2007, DECLARING TOTAL INCOME OF RS.23,940/-. CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMEN T AND NOTICE U/S.143(2) OF THE INCOME TAX ACT, DATED 16/09/2008, WAS ISSUED AND DULY SERVED UPON THE ASSESSEE. ON SCRUTINY OF THE A CCOUNTS, IT REVEALED TO THE ASSESSING OFFICER THAT ASSESSEE HAS SHOWN G.P. OF RS.15,17,818/- WHICH IN TERMS OF PERCENTAGE COMES TO 4.81% OF THE TOTAL TURNOVER OF RS.3,15,20,695/- . THE ASSESSING OFFICER HAS OBSERV ED THAT THERE IS A FALL IN G.P FROM THE PRECEDING YEAR. IN THE PRECEDING YE AR G.P IN TERMS OF PERCENTAGE SHOWN BYTHE ASSESSEE WAS 22.87%. 4. THE LD.AO HAS CONFRONTED THE ASSESSEE, TO SHOW THE REASON FOR DECLINE IN G.P. THE ASSESSE HAS SUBMITTED THAT IT H AS SUB-CONTRACTED TWO CONTRACTS HAVING VALUE OF RS.2,30,15,103/- THE ASSESSE HAS RECEIVED A COMMISSION OF 1.75 % ON THE VALUE OF SUB-CONTRACT . THUS, THERE WAS A ITA NO.1601/AHD/2011 FOR ASSESSMENT YEAR 2007-08 3 FALL IN THE G.P. THE LD.AO THEREAFTER VERIFY THE AC COUNTS OF THE ASSESSEE, HE ARRIVED AT THE CONCLUSION THAT ASSESSEE HAS PAID THE LABOUR CHARGES TO THE HEADMAN OF THE LABOURERS, IT IS TO BE CONSTRUED THAT A SUB- CONTRACTORSHIP BETWEEN THE ASSESSE AND THE ALLEGED HEADMAN FOR SUPPLY OF LABOUR WAS IN EXISTENCE. THE ASSESSEE SHOULD HAV EPAID THELABOUR CHARGES AFTER DEDUCTION OF TDS.ACCORDINGLY HE MADE A DISALLOWANCE OF RS.42,17,418/- WITH THE AID OF SECTION 40(A)(IA) OF THE INCOME TAX ACT, ON THE GROUND THAT ASSESSEE FAILED TO DEDUCT TDS ON THE LABOUR PAYMENT TO THE ALLEGED HEADMAN/CONTRACTORS OF LABOUR SUPPLI ER. 5. DISSATISFIED WITH THE ACTION OF AO, ASSESSEE CA RRIED THE MATTER IN APPEAL, IT WAS CONTENDED BY THE ASSESSEE THAT HE HA S NOT AVAIL THE SERVICES OF A LABOURCONTRACT, ALL THE LABOURERS WER E EMPLOYED BY THE ASSESSEEAT ITS OWN. THESE WERE CASUAL WORKERS, THE ASSESSEE MADE PAYMENT DIRECTLY TO THE LABOURER, THERE IS NO RELAT IONSHIP OF A CONTRACTOR AND CONTRACTEE BETWEEN THE PAYMENTS OF LABOUR CHARG ES TO THE LABOURERS. THE ASSESSING OFFICER HAS UNNECESSARY ASSUMED EXIST ENCE OF CERTAIN FACTS WITHOUT THEIR BEING ANY SUPPORTING MATERIALS. 6. THE LD. FIRST APPELLANT AUTHORITY HAS ACCEPTED C ONTENTIONSOF THE ASSESSEE AND DELETED THE ADDITION. 7. BEFORE US,LD.DR RELIED UPON THE ORDER OF THE ASS ESSING OFFICER. ON THE OTHER HAND THE LD.COUNSEL FOR THE ASSESSEE P OINTED OUT THAT DURING THE HEARING BEFORETHE LD.FIRST APPELLANT AUT HORITY, THE ITA NO.1601/AHD/2011 FOR ASSESSMENT YEAR 2007-08 4 ASSESSEESUBMITTED ALL THE DETAILS OF PAYMENT AND AL SO EMPHASIZED THAT SERVICES OF ANY SUB-CONTRACTOR WAS NOT AVAILED. THE LD.CIT(A) HAS CALLED FOR A REMAND REPORT FROM THE AO, DIRECTING H IM TO VERIFY SOME OF THE LABOURERS. THE LD. AO DID NOT BOTHER TO CARRY O UT THIS EXERCISE, HE HAS REITERATEDHIS STAND AS WAS TAKEN IN THE ASSESSM ENT ORDER. HE OBSERVED THAT ASSESSE FAILED TO PRODUCED CONTRACTOR/SUB-CONT RACTOR AND LABOURER. IN CONTRARY TO THESE OBSERVATIONS, THEASSESSEE FILED O BJECTION AND POINTED OUT THAT BHIMA BHAI BACHU BHAI BHABHOR AND KHIM CHA ND BHAI BACHU BHAI WERE PRODUCED BEFORE THE AO. THE LD.AO HAS OBS ERVED THAT, SINCE THERE WAS WORK PRESSURE OF TIME BARRING ASSESSMENTS THESE PERSONS BE PRODUCED IN THE MONTH OF JANUARY 2011. THEY AGAIN C AME TO THE OFFICE BUT LD. AO DID NOT RECORD THEIR STATEMENT. ULTIMATE LY THEY SENT THEIR AFFIDAVITS ON THE THIRD OCCASION.HE TOOK US THROUGH THESE OBJECTIONS REPRODUCED BY THE CIT(A) ON PAGE 10 OF THE IMPUGNED ORDER. 8. WE HAVE DULY CONSIDERED THE RIVAL CONTENTION AND GONE THROUGH THE RECORD CAREFULLY. SECTION 194(C) OF THE INCOME TAX ACT, CONTEMPLATES THAT ANY PERSON RESPONSIBLE FOR PAYING ANY SUM TO A NY RESIDENT FOR CARRYING OUT ANY WORK INCLUDING SUPPLY OF LABOUR F OR CARRYING OUT ANY WORK IN PURSUANCE OF CONTRACT BETWEEN THE CONTRACT AND A SPECIFIED PERSON SHALL, AT THE TIME CREDIT OF SUCH SUM TO THE ACCOUNT OF CONTRACT OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF CHEQUE OR BY DRAFT OR BY ANY OTHER MODE WHICHEVER IS EARLIER, DEDUCT A N AMOUNT EQUAL TO . ITA NO.1601/AHD/2011 FOR ASSESSMENT YEAR 2007-08 5 9. NOW, THE QUESTION IS WHETHER THERE WAS ANY RELAT IONSHIP OF CONTRACTOR AND CONTRACTEE BETWEEN THE ASSESSEE AND THE ALLEGED HEADMAN. THE ASSESSING OFFICER HAS ASSUMED THAT THESE LABOUR ERS WERE SUPPLIED BY ALABOUR CONTRACTORS WHEREAS STAND OF THE ASSESSEE W AS THAT IT ITSELF EMPLOYED ALL THE LABOURER.IT HAS HANDED OVER THE LA BOUR PAYMENTS TO ONE OR TWO PERSON ON THE SITE WHO WILL DISBURSE AMONG T HE LABOURER. THE ASSESSEE HAS NOT AVAILED SERVICES OF ANY LABOUR CON TRACTORS THEREFORE, IT WAS NOT REQUIRED TO DEDUCT TDS. WE COULD HAVE APPRE CIATED THE CASE OF REVENUE, IF ASSESSING OFFICER HAS INSPECTED THE SIT E OR RECORD STATEMENT OF LABOURERS FOR ESTABLISHING THE FACTS THAT THEY WORK ED AT THE SITE OF ASSESSEE THROUGH SOME CONTRACTORS BUT NO SUCH STEP WAS TAKEN BY THE ASSESSING OFFICER,INSPITE OF DIRECTION GIVEN BY THE CIT(A). UNDER THESE CIRCUMSTANCE,THE LD.CIT(A) HAS DELETED THE ADDITION AND WE DO NOT SEE ANY REASONS TO INTERFERE IN THE ORDER OF THE CIT(A) . ISSUE NO. 2 10. IN THIS GROUND, THE GRIEVANCE OF REVENUE IS THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.72,88,879/- WHICH WA S ADDED BY THE ASSESSING OFFICER WITH THE AID OF SECTION 68 OF THE INCOME TAX ACT, 1961. 11. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE YEAR,ASSESSEE HAS ASSIGNED ITS TWO CONTRACTS TO ONE M/S.HIMALIENTERPR ISES. IN OTHER WORDS IT HAS SUB CONTRACTED ITS TWO WORK CONTRACTS AWARDE D TO IT BY CANAL DIVISION OF R&B DEPARTMENT UNDER TENDER. THE SUB CO NTRACT WAS FOR THE ITA NO.1601/AHD/2011 FOR ASSESSMENT YEAR 2007-08 6 ENTIRE WORK TO BE COMPLETED IN ITS ENTIRETY AS PER THE TERMS OF THE TENDER AND THE ASSESSEEFIRM WAS TO RETAIN 1.75% OF THE BIL LED AMOUNT UNDER THE TENDER AS ITS PROFIT. M/S. HEMANI ENTERPRISES HAD B ILLED FOR RS.2,17,02,016/- A TOTAL PAYMENT OF RS.1,44,13,137/ - (INCLUDING TDS WAS MADE TO IT) THE BALANCE AMOUNT OF RS.72,88,879/ - WAS SHOWN HAS A PAYABLE TO IT BY THE ASSESSEE IN ITS ACCOUNTS AS ON 31/03/2007. THE LD. AO ADDED THIS AMOUNT AS AN UNEXPLAINED CASH CREDIT. 12. ON APPEAL, THE ASSESSEE HAS FILED WRITTEN SUBMI SSION AND IT WAS EXPLAINED HAS TO HOW THIS ADDITION COULD NOT BE MAD E. THE SUBMISSION MADE BY THE ASSESSE, HAS BEEN NOTED BY THE CIT(A) I N THE PARAGRAPH 6 . IT IS PERTINENT TO NOTE THE OBSERVATION OF LD.CIT(A ) MADE WHILE TAKING NOTE OF THE ASSESSEES SUBMISSIONS. IN THIS CONTEXT IT IS SUBMITTED AS UNDER: 6. EXISTENCE OF SHRI MD GOHIL PROP OF HIMALI ENTERPRISES: THE LD ASSESSING OFFICER HAD DOUBTED THE EXISTENCE OF T HE SUB CONTRACTOR AT THE ADDRESS PROVIDED. THE FOLLOWING NEED TO BE CONSIDER ED IN THIS MATTER: A. THE ADDRESS HOUSE NO 39/6, 336 LIG, GUJHSG BOARD IS A RESIDENTIAL HOUSE WHICH IS OWNED AND REGISTERED IN THE NAME OF SMT JYOTI MANOJ GOHIL WHO IS WIFE OF THE SAID SHRI M D GOHIL. (COPY OF THE DOCUMENT ENCLOSED). B. THE BANK ACCOUNT IS HAVING THE SAME ADDRESS. C. THE ADDRESS IN THE DEPARTMENT'S RECORD AS PER PA N IS ALSO THE SAME AS PROVIDED BY THE ASSESSEE. D. THE PRESENT MOBILE NO OF SHRI MANOJ BHAI GOHIL I S 9898614342. E. ALL THE POSTS ARE DELIVERED TO THE SAID SHRI MAN OJ BHAI GOHIL AT THE SAME ADDRESS. ITA NO.1601/AHD/2011 FOR ASSESSMENT YEAR 2007-08 7 F. THE SUB CONTRACTOR HAD MADE FDR(TDR) FROM HIS OW N BANK ACCOUNT IN FAVOUR OF THE EXEC ENGR CANAL DIVISION TOWARDS T HE CONTRACT PERFORMANCE, WHICH IS EVIDENT FROM THE BANK ACCOUNT ALREADY ENCLOSED. THE EXTRACT IS AGAIN ENCLOSED HEREWITH. G. M/S HIMALI HAD ALSO WORKED FOR OTHERS DURING THE YEAR. COPY OF A TDS CERTIFICATE ISSUED BY ONE M/S MADHURAM CONSTRUCTION CO. OF JUNAGARD IS ENCLOSED HEREWITH FOR YOUR PERUSAL. 7. ALL THE BILLS RAISED BY HIMALI ARE IN TH E MONTH OF MARCH 2007 WHEREAS PAYMENTS RECEIVED THROUGHOUT THE YEAR: THE LD ASSESSING OFFICER HAS NOT APPRAISED THE SUB CONT RACT PROPERLY. THE WORK UNDER THE TENDER WHICH WAS SUB CONTRACTED COMM ENCED IN THE MONTH OF JAN 2007 AND ACCORDINGLY FIRST PAYMENT WAS RECEI VED ONLY ON 07/03/07 AND ACCORDINGLY AS PER AGREEMENT THE PAYMENT WAS PA SSED ON 08/03/07 TO THE SUB CONTRACTOR AFTER DEDUCTING 1.75% PROFIT MARGIN. A CHART SHOWING THE PAYMENT RECEIVED AND ONWARD PAYMENTS MADE TO THE SU B CONTRACTOR DURING THE YEAR AS WELL AS IN THE NEXT YEAR. 8. CASH WITHDRAWN BY M D GOHIL FROM HIS BANK A/C: THE LD ASSESSING OFFICER HAS ALSO MADE A POINT THAT THE SUB CONTRACT OR HAD WITHDRAWN CASH FROM HIS ACCOUNT, BUT IS NO WHERE PROVED OR SMACKED THAT THE WITHDRAWN CASH HAS BEEN REVERTED BACK TO THE ASSESSEE. THEREFORE THE D OUBT OF THE LD ASSESSING OFFICER HAS NO FOOT. REFER ALSO THE CASE OF M K BRO S OF HON GUJ HC 52 CTR 228. 9. NOTICE U/S 133(6) OF THE ACT: THE NOTICE TO M/S HIMALI WAS SERVED ON THE PARTY ON 18/12/2009. 10. SUMMONS ISSUED U/S 131 ON 30/12/09: THE LD A O HAD ISSUED SUMMONS U/S 131 ON 30/12/09 AND ON THE SAME DAY THE ASSESSM ENT ORDER WAS PASSED. SUCH PROCEDURE ITSELF SPEAKS OF THE OPPORTUNITY PRO VIDED AND TIME GIVEN. HOWEVER THE NOTICE U/S 133(6) WAS FINALLY SERVED ON THE HIMALI ON 18/12/09. 11. WHEREABOUTS OF SHRI MD GOHIL: ONLY BECAUSE A PERSON DOES NOT TURNOUT BEFORE THE ASSESSING OFFICER IT CANNOT BE E STABLISHED THE PERSON IS NON- EXISTENT MORE SO WHEN ALL OTHER CIRCUMSTANTIAL EVID ENCES AS AVAILABLE TO THE ASSESSEE ARE PROVIDED. THE REMARKS OF THE LD ASSESS ING OFFICER THAT THE 'ASSESSEE HAD TRIED TO GIVE IT A COLOUR OF GENUINE TRANSACTION BY DEDUCTING TDS ON THE PAYMENTS MADE TO HIMALI ENT, BUT UNFORTUNATE LY OTHER EVIDENCE WHICH HAS BEEN COLLECTED DURING THE ASSESSMENT PROCEEDING S, POINTS TO THE FACT THAT THE TRANSACTION WITH THE HIMALI ENTERPRISES ARE NON GENUINE TRANSACTION TO REDUCE ITS TAXABLE LIABILITY' HAS NO LOCUS STANDI. THE OTHER EVIDENCES WHICH THE LD ASSESSING OFFICER HAD MENTIONED HAD BEEN NEVER CONFRONTED TO THE ASSESSEE EITHER BY WAY OF A SHOW ITA NO.1601/AHD/2011 FOR ASSESSMENT YEAR 2007-08 8 CAUSE NOTICE OR OTHERWISE. EVEN THE NATURE OF SUCH OTHER EVIDENCES IS NOT MENTIONED IN THE ASSESSMENT ORDER. 12. ADDITION U/S 68: THE LD ASSESSING OFFICER HAD MADE ADDITION OF RS 72,88 / 879/- WHICH IS THE OUTSTANDING AMOUNT PAYABLE TO M/ S HIMALI AS ON 31/03/07 DOES NOT QUALIFY THE TEST OF BEING A CASH CREDIT AS ENVISAGED BY SECTION 68. IN THIS CONNECTION THE DECISION OF HON ALLAHABAD HC IN THE CASE OF CIT VSPANCHAMDASS JAIN REPORTED IN 205 CTR 444 ALSO ENDORSES THE SAME VIEW. (COPY ENCLOSED). MOREOVER IN THE NEXT YEAR TH E PAYMENT FOR THE OLD OUTSTANDING AS WELL FOR THE REMAINING WORK HAS BEEN FULLY PAID BY A/C PAYEE CHEQUES. 13. ISSUE OF GP RATE: THE CP CHART OF THE ASSE SSEE FOR THE LAST FOUR YEARS )AND THE CURRENT YEAR IS ENCLOSED HEREWITH. I N THIS MATTER IT IS SUBMITTED AS UNDER: A. THE GP RATIO OF CURRENT YEAR ON AN OVERALL BASIS IS 4.82% BUT IF A BIFURCATION OF THE OWN A/C WORK AND SUB CONTRACTED WORK IS MADETHEN YOUR GOOD SELF WILL FIND THAT THE GP ON OW N A/C WORKS OUT OF 12.00%. THE OWN A/C GP IS COMPARABLE WITH THE LAST PREVIOUS YEARS EXCEPT FOR THE IMMEDIATE LAST PREVIOUS YEAR. B. THE GP RATE WITH THE SUB CONTRACTOR IS FURTHER E VIDENCED FROM THE PAYMENTS MADE TO HIM. WHATEVER PAYMENT HAS BEEN REC EIVED FROM CANAL DIVISION IS ONLY PAID TO THE SUB CONTRACTOR, A CHART GIVING THE DETAILS OF THE PAYMENT TO THE SUB CONTRACTOR IS ENCLOSED HEREWITH IN WHICH YOUR GOOD SELF CAN FIND THAT THE PAYMENT MADE IS DIRECTLYLINKED WITH THE PAYMENT RECEIVED. THE PAYMENT CAN BE TRACE D WITH THE RECEIPT WHICH IS AFTER DEDUCTING 1.75% PROFIT MARGIN AND TD S. UNDER THE CIRCUMSTANCES IT IS PRAYED THAT THE CREDI T BALANCE ADDED TO THE TOTAL INCOME U/S 68 MAY KINDLY BE DELETED 13. AFTER GOING THROUGH THE ABOVE SUBMISSION THE LD . CIT(A) HAS DELETED THE ADDITION. 14. WITH THE ASSISTANCE OF THELD. REPRESENTATIVE WE HAVE GONE THROUGH THE RECORD CAREFULLY. THE ASSESSING OFFICER DISBELI EVED EXISTENCE OF CONTRACTOR/SUB-CONTRACTOR RELATIONSHIP BETWEEN IT A ND M/S. HEMANI ENTERPRISES. HOWEVER, HE HAS NOT ASSIGNED ANY REASO NS WHY HE HAS ITA NO.1601/AHD/2011 FOR ASSESSMENT YEAR 2007-08 9 DISBELIEVED IT. THE ASSESSEE SUPPLIED COMPLETE ADDR ESSES, BANK DETAILS, PAN AND MOBILE NO. OF SHRI MANOJ BHAI GOHIL WHO IS THE PROPRIETOR OF M/S. HEMANI ENTERPRISES. THE LD. FIRST APPELLANT AU THORITY HAS OBSERVED, IF ASSESSING OFFICER HAS ANY DOUBT HE SHOULD HAVE D ISBELIEVED THE TOTAL CONTRACT PAYMENT MADE TO HIM, WHY THE OUTSTANDING O NLY. THE ASSESSEE WAS AWARDED CONTRACT BY CANAL DIVISION OF R&B DEPA RTMENT UNDER THE TENDER. IT HAS EXECUTED THE CONTRACT THROUGH M/S.HE MANI ENTERPRISES, IF THE LINE OF ACTION ADOPTED BY THE ASSESSING OFFICER IS BEING UPHELD, THAN THE PROFIT IN THIS CONTRACT WOULD BE VERY ABNORMAL BECAUSE IN A CONTRACT OF HAVING VALUE OF RS.2,17,02,016/- A SOME OF RS.7 2,88,879/- IS BEING TREATED AS A PROFIT THAN THE RATIO OF PROFIT WOULD QUITE HIGH IN A CIVIL CONSTRUCTION WORK. 15. THE LD.AO DID NOT PAY ANY ATTENTION TOWARDS THI S ASPECT, HE DID NOT MAKE ANY INQUIRIES AS TO HOW THE AWARD OF SUB-C ONTRACT TO M/S. HEMANI ENTERPRISES COULD BE CONSIDERED AS BOGUS. HE SIMPLY OBSERVED THAT THIS ARRANGEMENT IS NON GENUINE. THE LD.AO OUG HT TO HAVE CONSIDERED THAT A CONTRACT GIVEN BY A GOVT. AGENCY WAS COMPLETED AND PAYMENT WAS MADE BY CANAL DIVISION OF GOVT. DEPARTM ENT. IN SUCH SITUATION THE ACTIVITIES CANNOT BE HELD AS BOGUS. 16. IN OUR OPINION THE LD.FIRST APPELLANT AUTHORITY HAS APPRECIATED THE CONTROVERSY IN RIGHT PERSPECTIVE AND NO INTERFERENC E IS CALLED FOR. ITA NO.1601/AHD/2011 FOR ASSESSMENT YEAR 2007-08 10 17. IN VIEW OF THE ABOVE DISCUSSION, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 20 TH MARCH, 2017 AT AHMEDABAD. -SD- -SD- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER