I.T.O Wd - 7(3),kolkata., Kolkata V. M/s Shalini Properties & Developers Private Limited., Kolkata

ITA 171/KOL/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9260 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2017
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 29-11-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 22-01-2013
• Court: TRIBUNAL
• Department Lawyers: ARUP KUMAR SI NHA
• Assessee Lawyers: MANOJ KATARUKA
• Keywords: Capital asset; Business expenditure; Avoidance of tax; Commercial expediency; Revenue expenditure; Capital expenditure
• Section: 143(3); 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [BEFORE HONBLE SRI M.BALAGANESH, AM & SHRI PART HA SARATHI CHAUDHURY, JM] I.T.A NO. 171/KOL/201 3 ASSESSMENT YEAR : 2009-1 0 I.T.O., WARD-7(3) -VS.- M/S. SHALINI PRO PERTIES & DEVELOPERS KOLKATA PVT. LIMITED., KOLKATA [PAN : AAHCS 7896 N] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI ARUP KUMAR SI NHA, CIT FOR THE RESPONDENT : SHRI MANOJ KATARUKA, ADV OCATE DATE OF HEARING : 02.02.2017. DATE OF PRONOUNCEMENT : 28.02.2017. ORDER PER SHRI PARTHA SARATHI CHAUDHURY, JM THIS APPEAL PREFERRED BY THE REVENUE EMANATES FROM THE ORDER OF LD. CIT(A)- VIII, KOLKATA DATED 27.11.2012 ON THE FOLLOWING GRO UNDS OF APPEAL: 1. THAT ON THE FACT AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A)-VIII, KOLKATA HAS ERRED IN APPRECIATING THE FACT THAT PAY MENT MADE TO ICICI BANK AS PROCESSING FEES OF RS.13,19,24,685/- IS NOT INCUR RED FOR EARNING INCOME FROM M/S. RUIA SONS PRIVATE LIMITED AND AS SUCH IS NOT COMING UNDER THE AMBIT OF SECTION 37(1) OF THE I.T.ACT, 1961. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR ABRO GATE ANY GROUND OF APPEAL AT THE TIME OF HEARING. 2. THE BRIEF FACTS APPEARING IN THIS CASE AS I S FOUND OUT IN THE STATEMENT OF FACTS AND THE RELEVANT PORTION THEREIN THAT THE ASSESSEE FILE D ITS RETURN OF INCOME FOR A.Y.2009-10 ON 08.09.2009 DECLARING TOTAL LOSS OF (-) RS.38,420 /- AND THE RETURN WAS DULY PROCESSED. THEREAFTER THE CASE WAS TAKEN FOR SCRUTINY THROUGH CASS. ACCORDINGLY THE REQUISITE NOTICES WERE ISSUED TO THE ASSESSEE COMPANY. THE LD . AR ATTENDED THE HEARING FROM TIME TO TIME AND PRODUCED VARIOUS DETAILS AS ASKED FOR AND THE CASE WAS DISCUSSED. FINALLY THE CASE WAS PROCESSED U/S 143(3) OF THE AC T AND ORDER WAS PASSED BY THE AO ON 2 ITA NO..171/KOL/2013 M/S.SHALINI PROPERTIES & DEVELOPERS PVT. LTD. A.YR.2009-10 2 21.12.2011 DETERMINING THE TOTAL INCOME AT RS.13,17 ,77,340/- AFTER MAKING SOME ADDITIONS AND DISALLOWANCES. 3. THAT GROUND NO.2 IN THE GROUNDS OF APPEAL IS GEN ERAL IN NATURE AND NEEDS NO ADJUDICATION. 4. GROUND NO.1 ESSENTIALLY RELATES TO THE PROCESSI NG FEES OF RS.13,19,24,685/- AND THAT THE REVENUE HAD AGGRIEVED THAT THE LD. CIT(A) HAS E RRED IN APPRECIATING THE FACT THAT PAYMENT MADE TO ICICI BANK AS THE SAID PROCESSING F EES IS NOT INCURRED FOR EARNING INCOME FROM M/S. RUIA SONS PVT. LTD AND AS SUCH I S NOT COMING UNDER THE AMBIT OF SECTION 37(1) OF THE ACT. THE FACT GIVING RISE TO T HE SAID ADDITION IS THAT THE ASSESSEE IS A SUBSTANTIAL SHARE HOLDER OF M/S. DUNLOP INDIA LTD A ND STOOD AS A GUARANTOR FOR LOAN TAKEN FROM ICICI BANK BY WEALTHSEA PTEL LIMITED, SI NGAPORE BASED COMPANY AND AS A GUARANTOR THE ASSESSEE WAS REQUIRED TO TAKE A STAND BY A LETTER OF CREDIT CHARGES OF RS.13,19,24,685/- (INCLUDING SERVICE TAX AND CESS) 5. THE ASSESSING OFFICER IN COMING TO THE CONCLUS ION TO DISALLOW A SUM OF RS.131924685/- HAS LARGELY RELIED UPON THE DECISION OF THE ORDER PASSED BY THE ASSESSING OFFICER WARD 8(3), KOLKATA M THE CASE OF M/S RUIA SONS PVT. LTD.. THE APPEAL FILED AGAINST THE ORDER OF THE AO IN THE CAS E OF M/S RUIA SONS PVT. L.TD FOR THE RELEVANT AY 2009-10 HAS BEEN DISPOSED OF BY THE UND ERSIGNED VIDE APPEAL NO.213/CIT(A)-VLII/KOI/1L-12 DATED 26.11.2012 WHERE IN THIS ISSUE HAS BEEN DEALT WITH IN DETAIL AN DECIDED THE ISSUE IN FAVOUR OF M/S RU IA SONS PVT. LID BY OBSERVING IN PARAGRAPHS NOS. 5.1.8 TO 5.1.16 OF THAT ORDER AS UN DER:- 5.1.8. I HAVE CAREFULLY CONSIDERED THE FACTS OF TH E CASE AND THE MATERIAL PLACED ON RECORD. I HAVE ALSO CONSIDERED, THE REMAND REPORT O F THE ASSESSING OFFICER AS WELL AS THE REJOINDER SUBMITTED ON BEHALF OF THE APPELLANT COMPANY. I HAVE ALSO GONE THROUGH 3 ITA NO..171/KOL/2013 M/S.SHALINI PROPERTIES & DEVELOPERS PVT. LTD. A.YR.2009-10 3 THE REPORTED DECISIONS CITED FOR SUPPORT BOTH BY TH E ASSESSING OFFICER AND ON BEHALF OF THE APPELLANT COMPANY. NOW. TO RECAPITULATE, IN TH E PROFIT AND LOSS ACCOUNT, AN AMOUNT OF RS.11,74,12,500/- WAS DEBITED UNDER THE BANK C HARGES/GUARANTEE COMMISSION WHICH INCLUDED PAYMENT OF RR.11,74,12,500/- TO M/S. SHALINI PROPERTIES AND DEVELOPERS PVT. LTD. ON ACCOUNT OF STANDBY LETTER OF CREDIT CH ARGES. HOWEVER FROM THE NOTES CONTAINED IN THE TAX AUDIT REPORT, THE ASSESSING OF FICER OBSERVED THAT (I) THE COMPANY HAS NOT TAKEN ANY LOANS, SECURED OR UNSECURED, FROM COMPANIES, FIRMS OR OTHER PARTIES COVERED IN THE REGISTER MAINTAINED UNDER SECTION 30 1 OF THE ACT AND AS SUCH CLAUSES (III)(E) TO (III) (G) ARE NOT APPLICABLE TO IT; AND (II) THE COMPANY HAS NOT GIVEN GUARANTEE FOR LOANS TAKEN BY OTHERS FROM BANK OR FI NANCIAL INSTITUTIONS. FROM THE DETAILS SUBMITTED IT IS NOTED THAT TH E APPELLANT COMPANY HAD GIVEN GUARANTEE COMMISSION TO M/S. SHALINI PROPERTIES AND DEVELOPERS PVT. LTD. THUS, IT IS NOTED THAT THE REPORT OF THE AUDITOR DOES NOT COMME NSURATE WITH THE ACCOUNTS AND THE SAME WAS POINTED OUT TO THE ASSESSEE COMPANY. THE C ASE OF THE ASSESSING OFFICER FOR MAKING THE IMPUGNED ADDITION HAS BEEN THAT (I)THE TRANSACTIONS ENTERED INTO BY THE ASSESSEE CO MPANY WERE WITH GROUP COMPANIES HAVING THE SAME MANAGEMENT AND CONTROLLING AUTHORIT Y, DECISIONS WERE TAKEN ON BEHALF OF ALL THE COMPANIES BY ONLY A FEW; (II) THE DIRECTORS AND THE PRINCIPAL PERSONS OF THE ASSESSEE COMPANY WERE ONLY AWARE OF THE MAJOR DECISIONS TAKEN IN THE ENTIRE GROUP. (III) OPPORTUNITY WAS PROVIDED TO THE ASSESSEE TO C OME OUT CLEAN WITH A CLEAR PICTURE OF THE EXACT DISCLOSURE OF FACTS AND NOT FICTIONS. AS ALL THE INFORMATION WAS WITHIN THE CONTROL AND SPECIFIC KNOWLEDGE OF THE ASSESSEE, THE REFORE, IT WAS THE DUTY OF THE ASSESSEE TO PROVE AND ESTABLISH THE SAME, WHICH THEY DID NOT . THIS BRINGS OUT A CLEAR PICTURE THAT THE TOTAL GROUP COMPANIES ARE ENGAGED IN COLORABLE TRANSACTIONS AMONGST THEMSELVES. SIMILAR VIEW HAD BEEN TAKEN IN THE CASE OF LOGITRON ICS PVT. LTD. ITA 4716/DEL OF 2009 DATED 30.04.2010, ITAT, NEW DELHI AND IN THE CASE O F KAYCEE ELECTRICALS V DCIT (2003) 87 ITD 35 (DELHI). 4 ITA NO..171/KOL/2013 M/S.SHALINI PROPERTIES & DEVELOPERS PVT. LTD. A.YR.2009-10 4 (IV) THE CONTENTIONS EXPRESSED IN THE COPIES OF THE EXTRACTS OF THE BOARD RESOLUTION, AS CLAIMED BY THE APPELLANT, HAS ALREADY BEEN DULY CON SIDERED IN THE ASSESSMENT STAGE AND STRONGLY REFUTED IN THE ASSESSMENT ORDER ITSELF WIT H LOGIC AS WELL AS RELEVANT CASE LAWS. (V) IT IS ALSO PERTINENT TO MENTION HERE THAT IT IS INCUMBENT ON THE ASSESSING OFFICER TO EXPLORE THE TOTAL GAMUT OF THE AFFAIRS OF THE ASSES SEE COMPANY. THE TRANSACTIONS ENTERED INTO BY THE ASSESSEE COMPANY ARE OFTEN NOT INDICATI VE OF WHAT MEETS THE NAKED EYE. THE INTENTION AND ACTUAL PURPOSE OF THE ASSESSEE COMPAN Y, ALONG WITH ITS RAMIFICATIONS ON ITS PAST, PRESENT AND FUTURE INCOMES, AS WELL AS THE EF FECT IT IS GOING TO CASE ON OTHER AFFECTED PARTIES AND BENEFICIARIES HAVE TO BE CONSI DERED. THE ASSESSING OFFICER HAS TO LIFT THE CORPORATE VEIL AND BRING OUT THE ACTUAL PU RPOSE OF THE ACTIONS OF THE ASSESSEE COMPANY TO LIGHT. THIS HAS ALSO BEEN UPHELD IN THE CASE OF CIT VS INDIAN EXPRESS NEWSPAPERS MADURAI PVT. LTD. 238 ITR 70 (MAD). THUS, THE CASE OF THE ASSESSING OFFICER IS TH AT THE GROUP COMPANIES WERE MANAGED BY A FEW, WHO COULD MANAGE THE AFFAIRS TO REDUCE TH E TAX BURDEN THROUGH COLOURABLE DEVICES. 6. ON THE OTHER HAND, TO SUPPORT ITS CLAIM, IT W AS EXPLAINED THAT THE APPELLANT COMPANY IS THE FLAGSHIP COMPANY OF THE RUIA GROUP AND DURIN G THE FINANCIAL YEAR 2008-2009, RELEVANT TO ASST.YEAR 2009-2010, IT HAD ENTERED INT O AN AGREEMENT WITH DUNLOP INDIA LIMITED WITH THE HELP AND SUPPORT OF M/S. SHALINI P ROPERTIES & DEVELOPERS P. LTD. THIS AGREEMENT WITH DUNLOP INDIA LTD WAS FOR THE APPELLA NT COMPANY TO USE THE DUNLOP BRAND NAME LOGO FOR A PERIOD OF TEN YEARS COMMENCI NG FROM 01.04.2008 TO 31.03.2018. THE MANNER AND INFLUENCE OF M/S. SHALINI PROPERTIES & DEVELOPERS P. LTD IN OBTAINING SUCH BRAND NAME BY THE APPELLANT COMPANY AND THE PA YMENT OF SBLC CHARGES TO SHALINI PROPERTIES & DEVELOPERS P. LTD IS THE ENTIR E ISSUE FOR THIS ADDITION MADE BY THE ASSESSING OFFICER. THE FACT IS THAT PRIOR TO ASST. YEAR 2009-10 I.E. IN A/Y 2008-09, THE APPELLANT WAS NOT HAVING ANY BUSINESS ACTIVITY NOR DERIVING ANY INCOME AND THIS WAS ALSO THE CASE IN MANY MORE PREVIOUS YEARS. 5 ITA NO..171/KOL/2013 M/S.SHALINI PROPERTIES & DEVELOPERS PVT. LTD. A.YR.2009-10 5 7. IN SUM AND SUBSTANCE, IT IS SUBMITTED THAT THE APPELLANT WAS NOT HAVING SOURCE OF INCOME PRIOR TO A/Y 2009-2010. IT WAS LOOKING FOR A VENUES TO EARN INCOME AND STEPS WERE BEING TAKEN BY THE APPELLANT WHICH IS THE MATT ER OF RESOLUTION OF THE BOARD OF THE APPELLANT COMPANY AS ON 20 TH FEB 2008 PLACED AT PAGE 53 OF THE PAPER BOOK. M/S. SHALINI PROPERTIES & DEVELOPERS P. LTD ARE SUBSTANT IAL SHARE HOLDERS OF DUNLOP INDIA LIMITED AND THE APPELLANT CAME TO AN UNDERSTANDING WITH M/S SHALINI PROPERTIES & DEVELOPERS P LTD. THAT THE LATTER WOULD HELP AND MA KE ALL EFFORTS TO OBTAIN THE 'DUNLOP' BRAND NAME IN FAVOUR OF THE APPELLANT FROM DUNLOP INDIA LTD AND THE APPELLANT WOULD BE OBLIGED TO BEAR THE SBLC CHARGES TO BE PAID TO M/S SHALINI PROPERTIES & DEVELOPERS P LTD. WHO, IN TURN, SHALL PAY SUCH CHARGES TO ICIC I BANK. TO THIS EFFECT, BOARD OF THE APPELLANT COMPANY PASSED RESOLUTION DATED 12 TH MARCH 2008. BOARD RESOLUTION DATED 28TH MARCH 2008 WAS PASSED BY THE BOARD OF THE APPE LLANT WHICH INCORPORATED THE AGREEMENT ENTERED INTO BY THE APPELLANT WITH DUNLO P INDIA LTD FOR USE OR 'DUNLOP BRAND AND LOGO. THE BOARD'S RESOLUTION ALSO INCORP ORATED AND THANKED M/S SHALINI PROPERTIES & DEVELOPERS P TD FOR THEIR EFFORTS IN O BTAINING THE BRAND NAME FROM DUNLOP INDIA LTD. AND PAYMENT OF SBLC CHARGES AS SOON AS M/S.SHALINI PROPERTIES & DEVELOPERS P LTD. REQUIRES THE SUM. SUBSEQUENTLY, W HEN THE LOAN WAS SANCTIONED BY THE ICICI BANK WHERE M/S SHALINI PROPERTIES & DEVELOPER S P LTD., WAS GUARANTOR, ANOTHER BOARD RESOLUTION WAS PASSED DATED 28 TH OF JUNE 2008 FOR REIMBURSEMENT OF THE SBLC CHARGES TO M/S SHALINI PROPERTIES & DEVELOPERS P L TD. 8. THE A/R FURTHER ARGUED THAT DURING THE YEAR, ON USE 0 HE 'DUNLOP BRAND. NAME AND LOGO BY WAY OF ROYALTY AND SBLC CHARGES THE APPELLA NT HAD INCOME OF RS.123643645/-. NOT ONLY THIS; THE INCOME EARNING APPARATUS OF THE APPELLANT COMPANY BEING THE BRAND NAME AND LOGO 'DUNLOP' HAS RESULTED IN MUCH HIGHER INCOME IN THE SUBSEQUENT YEARS. ONLY IN RESPECT OF ROYALTY INCOME FROM THE USE OF DUNLOP BRAND NAME AND LOGO THE JUMP IN THE ROYALTY INCOME IS AS UNDER :- 6 ITA NO..171/KOL/2013 M/S.SHALINI PROPERTIES & DEVELOPERS PVT. LTD. A.YR.2009-10 6 FINANCIAL YEAR FALCON TYRES INDIA TYRE & RUBBER DUNLOP GOODYEAR TYRE TOTAL RS. 2008-09 33903897 1050305 0 34954202 2009-10 91472539 827016 0 92299555 2010-11 165818393 875089 0 166693482 2011-12 155880408 611723 6314287 162806418 TOTAL RS. 447075237 3364133 6314287 456753657 THE PROCESSING FEES PAID BY THE COMPANY ARE AS UNDE R : FINANCIAL YEAR AMOUNT RS. 2008-09 117412500 2009-10 87668527 2010-11 29062500 2011-12 27906250 TOTAL RS. 262049777 9. REFERRING TO THE ABOVE: FACTUAL POSITION, TH E AJR STATE THAT THE APPELLANT COMPANY WAS EXPLORING' VARIOUS AVENUES FOR AUGMENTING ITS I NCOME AND IT APPROACHED THE .ASSIGNMENT OF DUNLOP BRAND NAME AND AGREED TO PAY ASUM OF RS.200 LAKHS TO DUNLOP INDIA LIMITED DIRECTLY. SHALINI PROPERTIES AND DEVE LOPERS PRIVATE LIMITED, ACCORDING TO THE APPELLANT, INFORMED IT THAT IT WAS THE ULTIMATE SHAREHOLDER OF DUNLOP INDIA LIMITED AND ALSO IS A GUARANTOR FOR THE LOAN TAKEN BY WELAT H SEA PTE. LTD. SINGAPRE. SHALINI WAS HOLDING THE SHARES OF WEALTHSEA PTE. LTD., SINGAORE AND WEALTHSEA PTE LTD. , SINGAPORE WAS HOLDING THE SHARES IN DIL RIM AND WHEEL CORPORA TION LIMITED WHICH WAS HOLDING THE SHARES OF DUNLOP INDIA LIMITED. THUS SHALINI WA S CONTROLLING THE SHARES OF DUNLOP INDIA LIMITED. IN THIS CONNECTION, REFERENCE WAS MA DE TO THE PROCEEDINGS OF THE BOARD OF DIRECTORS AND THE VARIOUS RESOLUTIONS PASSED BY THE DIRECTORS DURING THE PERIOD 20 TH FEBRUARY 2008 TO 28 TH JUNE 2008 AS STATED ABOVE. THE APPELLANTS SUBMISS IONS ARE THAT THE CORPORATE VEIL IS A MERE FAADE AND THAT THE EX PENDITURE HAD BEEN INCURRED FOR COMMERCIAL EXPEDIENCY. 10. IT IS NOTED THAT THE ASSESSING OFFICER WH ILE DISALLOWING THE CLAIM OF THE APPELLANT OF RS.117412500/- AS SBLC CHARGES PAID TO M/S SHALINI PROPERTIES & DEVELOPERS P. LTD HAS HELD THE TRANSACTION TO BE A COLOURABLE DEVICE TO EAT INTO THE 7 ITA NO..171/KOL/2013 M/S.SHALINI PROPERTIES & DEVELOPERS PVT. LTD. A.YR.2009-10 7 PROFIT OF THE APPELLANT COMPANY. THE ASSESSING OFFI CER ALSO RELIED UPON THE DECISION IN RELATION TO COLOURFUL DEVICE TO HOLD THAT THE EXPEN SES OF RS.117412500/- COULD NOT BE SAID TO BE LAID OUT OR EXPENDED WHOLLY AND EXCLUSIV ELY FOR THE PURPOSES OF THE BUSINESS OF THE APPELLANT COMPANY AND THAT THE TRANSACTION W AS A COLOURFUL DEVICE. WHILE HOLDING, THE ASSESSING OFFICER HAS CONSIDERED THE A GREEMENT AND THE FACT OF THE CASE. THE ASSESSING OFFICER HAS ALSO GONE ON TO POINT OUT THE UTILIZATION OF SUCH LOAN TAKEN BY WEALTHSEA PTE LTD. 11. IN THE REMAND REPORT THE ASSESSING OFFICER HAS NOT MENTIONED ANYTHING NEW THAN WHAT HAS ALREADY BEEN STATED IN THE ASSESSMENT ORDE R AND IN FACT THE BOARDS RESOLUTION WHICH WAS CONSIDERED AS FRESH EVIDENCE HAS BEEN BRU SHED ASIDE BY THE ASSESSING OFFICER BY TREATING THE SAME TO BE PART OF THE ASSESSMENT R ECORD AND NOT FRESH EVIDENCE. M/S. SHALINI PROPERTIES & DEVELOPERS P. LTD HELD 100% SH ARES IN HILAND TRADERS PVT. LTD. WHICH, IN TURN, HELD SUBSTANTIAL SHARES IN DUNLOP I NDIA LTD. M/S. SHALINI PROPERTIES AND DEVELOPERS P.LTD ALSO HELD 45% IN THE EQUITY CAPIT AL OF WEALTHSEA PTE LTD. WHICH HELD THE ENTIRE SHARE HOLDING IN DIL RIM & WHEELS CORPN. LTD. WHICH, IN TURN HELD SUBSTANTIAL SHARES IN DUNLOP INDIA LTD. THEREFORE, SHALINI PROPERTIES & DEVELOPERS LTD. WAS HAVING SUBSTANTIAL INTEREST IN DUNLOP INDIA LTD . ACCORDINGLY, WEALTHSEA PTE LTD. HAD APPROACHED ICICI BANK, SINGAPORE WHICH WAS AGRE EABLE TO RELEASE FUNDS PROVIDED A STANDBY LETTER OF CREDIT WAS GIVEN BY SHALINI PRO PERTIES & DEVELOPERS P.LTD BEING THE SUBSTANTIAL SHARE HOLDER OF WEALTHSEA PTE LTD. M/S. SHALINI PROPERTIES & DEVELOPERS P. LTD WERE NOT HAVING ANY INCOME AND IN ORDER TO P ROVIDE SUCH FINANCE CHARGES IT APPROACHED THE APPELLANT COMPANY. THE RESOLUTIONS P ASSED BY THE BOARD THROW LIGHT TO THE AFFAIR OF THE APPELLANT COMPANY AND THE METHOD ADOPTED FOR SOURCE OF EARNING BY THE APPELLANT COMPANY. THE FACT THAT THE APPELLANT WAS LOOKING FOR A SOURCE OF INCOME AND IN PREVIOUS ASST. YEARS NOT HAVING ANY INCOME CANNO T BE DENIED. IT IS ALSO TRUE THAT M/S. SHALINI PROPERTIES & DEVELOPERS P. LTD. BEING SUBST ANTIAL SHAREHOLDERS OF DUNLOP INDIA LTD. HAD MUTUAL UNDERSTANDING PRIOR TO THE AGREEMEN T MADE BY THE APPELLANT COMPANY WITH DUNLOP INDIA LTD. IT WAS IN THE INFLUENCE AND EFFORT OF M/S. SHALINI PROPERTIES & 8 ITA NO..171/KOL/2013 M/S.SHALINI PROPERTIES & DEVELOPERS PVT. LTD. A.YR.2009-10 8 DEVELOPERS P. LTD THAT THE DUNLOP BRAND NAME WAS OBTAINED ON LEASE FOR A PERIOD OF TEN YEARS BY THE APPELLANT. IT IS ALSO A FACT THAT FROM THE USE OF THE DUNLOP BRAND NAME, THE APPELLANT COMPANY HAS EARNED SUBSTANTIAL INCOME ON ACCOUNT OF ROYALTY, SERVICE CHARGES IN THE IMPUGNED ASST. YEAR AND INCREASING I N SUBSEQUENT YEARS. IT IS ALSO ILLUSTRATED IN THE CHART GIVEN ABOVE THAT PURELY ON ROYALTY INCOME FORM USE OF THE DUNLOP BRAND NAME IN COMPARISON TO REIMBURSEMENT OF SBLC CHARGES IN THREE YEARS, THE INCOME HAS OUTSHOWN THE EXPENSES SUBSTANTIALLY PUTTING THE APPELLANT COMPANY IN A GUIDED SEAT AND SHOWING THE ACTUAL PICTURE OF THE U NDERSTANDING WITH M/S. SHALINI PROPERTIES & DEVELOPERS P. LTD. DUNLOP INDIA LTD. I S DOING BUSINESS OF MANUFACTURING OF TYRES AND TUBES AND HAS BEEN CONSTANTLY IN THE N EWS AND FOR STEPS TAKEN FOR REVIVAL OF THE SAME. PRIOR TO THE ACQUISITION OF DUNLOP INDIA LTD. BY THE RUIA GROUP THE SAME WAS A SICK UNIT AND SUBSEQUENTLY IT REVIVED AND CAME OU T FROM BEING A SICK UNIT. THE TRANSACTION OF PAYMENTS MADE BY THE APPELLANT COMPA NY OF THE SBLC CHARGES, PROCESSING FEES/FINANCE CHARGES BY WHATEVER NAME IT MAY BE CALLED ARE A LARGER PICTURE TO THE REVIVAL OF THE GROUP COMPANY AND MAINLY DUNL OP INDIA LTD. WHICH WAS TO BE STARTING PRODUCTION, UP AND IN RUNNING. THE ARRANGE MENT MADE BETWEEN THE GROUP COMPANIES, SHAREHOLDER COMPANY HAS RESULTED IN BUSI NESS IN THESE COMPANIES AND GIVING RISE TO CAPITAL GENERATION FOR BENEFIT OF DU NLOP INDIA LTD, AS A WHOLE. SO, IT IS INCORRECT TO SAY THAT DUNLOP INDIA LIMITED HAS NOT BEEN BENEFITED FROM THE FINANCES OBTAINED BY WEALTHSEA PTE. LTD IN TERMS OF WHICH TH E APPELLANT COMPANY HAS PAID PROCESSING FEE, SBLC CHARGES TO M/S. SHALINI PROPER TIES & DEVELOPERS P. LTD. WHO IN TURN HAS PAID THE SAME TO ICICI BANK LTD. 12. ONE OF THE ALLEGATIONS OF THE ASSESSING OFF ICER IS THAT IT IS A COLOURFUL DEVICE WHICH RESORT TO EAT AWAY THE PROFIT OF THE APPELLAN T COMPANY OR DIVERSION OF THE INCOME. ON THE FACTS OF THE CASE, IT SEEMS TO BE UNUSUAL T HAT AT ONE INSTANCE THE COMPANY WOULD BE EARNING INCOME FROM UTILIZATION OF RESOURCES FRO M ITS GROUP COMPANIES AND ON THE OTHER HAND RESORT TO A COLOURFUL DEVICE TO EAT AWAY INTO THE INCOME. IT IS UNUSUAL 9 ITA NO..171/KOL/2013 M/S.SHALINI PROPERTIES & DEVELOPERS PVT. LTD. A.YR.2009-10 9 BECAUSE IT IS NOT THE CASE OF THE APPELLANT COMPANY THAT THE INCOME IS BEING EARNED FROM THIRD PARTY OR IT IS A FIXED INCOME BEING EARNED FR OM PREVIOUS YEAR AND IN ORDER TO EAT INTO SUCH INCOME A METHOD OR A RESORT IS BEING ADOP TED WHICH IS COLOURFUL IN NATURE. HERE, IT IS FROM THE A.Y. 200P9-10 THAT THE SOURCE OF INCOME HAS BEEN GENERATED AND BOARDS RESOLUTION IS ABSOLUTELY CLEAR AS TO THE GA MUT OF AFFAIRS OF THE APPELLANT COMPANY AND THE INVOLVEMENT OF M./S SHALINI PROPERT IES & DEVELOPERS LTD. IS NOT IN DOUBT. EVEN BEFORE THE AGREEMENT WAS MADE BETWEEN D UNLOP INDIA LTD. AND THE APPELLANT COMPANY FOR USE OF THE DUNLOP BRAND N AME AND LOGO, M/S. SHALINI PROPERTIES & DEVELOPERS P. LTD. HAD MADE AN UNDERST ANDING WITH THE APPELLANT FOR PROVIDING OF SBLC CHARGES AND ONCE THIS FACT IS UND ISPUTED BY THE ASSESS8ING OFFICER, THEN THERE CAN BE NO QUESTION RAISED AS TO THE COLO URFUL DEVICE OR A METHOD ADOPTED TO EAT INTO THE PROFIT. A BOARDS RESOLUTION IS NO DOU BT AN IMPORTANT PIECE OF EVIDENCE AND EVEN THOUGH IT IS MADE BY THE BOARD OF DIRECTORS, I T HAS TO BE CONSIDERED AND TAKEN COGNIZANCE OF AND CANNOT BE BRUSHED ASIDE. THE SUPR EME COURT IN THE CASE OF UNION OF INDIA VS AZADI BACHO ANDOLEN 263 ITR 706 (SC) AFTER CONSIDERING THE DECISION OF THE SUPREME COURT IN THE CASE OF MCDOWELL 154 ITR 148 M ADE A DISTINCTION BETWEEN TAX AVOIDANCE AND TAX PLANNING IT WAS HELD :- HAVING ANXIOUSLY SCANNED MACDOWERLLS CASE, WE FI ND NO REFERENCE THEREIN TO HAVING DISSENTED FROM OR OVERRULED THE DECISION OF THE PRI VY COUNCIL IN THE BANK OF CHETTINAND CASE 8 ITR 522 (PC). IN ANY OF THE PRINCIPLES APPEA RS TO HAVE BEEN REITERATED WITH APPROVAL BY THE CONSTITUTION BENCH OF THIS COURT IN MATHURAMS CASE 8 SCC 667 PARA 12. WE ARE THEREFORE UNABLE TO ACCEPT THE CONTENTIO N OF THE RESPONDENT THAT THERE HAS BEEN A VERY DRASTIC CHANGE IN THE FINAL JURISPRUDEN CE IN INDIA, AS WOULD ENTAIL A DEPARTURE. IN OUR JUDGMENT FROM WESTMISTERS CASE T O BANK OF CHETTINANDS CASE TO MATHURAMS CASE DESPITE THE HICCUPS OF MACDOWELL;S C ASE, THE LAW HAS REMAINED THE SAME. WE ARE UNABLE TO AGREE WITH THE SUBMISSION TH AT AN ACT WHICH IS OTHERWISE VALID ON LAW CAN BE TREATED NON-EST MERELY ON THE BASE OF SOME UNDERLYING MOTIVE SUPPOSEDLY 10 ITA NO..171/KOL/2013 M/S.SHALINI PROPERTIES & DEVELOPERS PVT. LTD. A.YR.2009-10 10 RESULTING IN SOME ECONOMIC DETRIMENT OR PREJUDICE T O THE NATIONAL INTEREST AS PERCEIVED BY THE RESPONDENTS. IN THE CASE OF IRC VS FISHER EXECUTOR 1926 AC 395 I T WAS HELD MY LORDS THE HIGHEST AUTHORITIES HAVE ALWAYS RECO GNIZED THAT THE SUBJECT IS ENTITLES TO ARRANGE HIS AFFAIRS AS NOT TO ATTRACT TAX IMPOSED B Y THE CROWN, SO FAR AS HE CAN DO SO WITHIN THE LAW, AND THAT HE MAY LEGITIMATELY CLAIM THE ADVANTAGE OF ANY EXPRESSED TERMS OR OF ANY OMISSION THAT HE CAN FIND IN HIS FAVOUR IN TAXING ACT. IN SO DOING HE NEITHER COMES UNDER LIABILITY NOR INCURS BLAME. IN THE CASE OF SANKARLAL BALABHAI 69 ITR 186 (GUJ) IT WAS HELD TAX AVOIDANCE POSTULATES THAT T HE ASSESSEE IS IN RECEIPT OF AMOUNT WHICH IS REALLY AND IN TRUTH HIS INCOME ELIGIBLE TO TAX BUT ON WHICH HE AVOIDS PAYMENT OF TAX BY SOME ARTIFICE OR DEVICE. SUCH ARTIFICE OR DEVICE MAY APPARENTLY SHOWS THE INCOME AS ACCRUING TO ANOTHER PERSON AT THE SAME TI ME MAKING IT AVAILABLE FOR USE AND ENJOYMENT TO THE ASSESSEE AS IN THE CASE FALLING WI THIN SECTION 44D OR MASK THE TRUE CHARACTER OF THE INCOME BY DISGUISING IT AS A CAPIT AL RECEIPT AS IN A CASE FALLING WITHIN SECTION 44E OR ASSUME DIVERSE OTHER FORMS. BUT THER E MUST BE SOME ARTIFICE OR DEVICE ENABLING THE ASSESSEE TO AVOID PAYMENT OF TAX ON WH ICH IS REALLY AND IN TRUTH HIS INCOME. IF THE ASSESSEE PARTS WITH HIS INCOME PRODU CING ASSET, SO THAT THE RIGHT TO RECEIVE INCOME ARISING FROM THE ASSET WHICH THEREFO RE BELONGS TO THE ASSESSEE IS TRANSFERRED TO AND VESTED IN SOME OTHER PERSON, THE RE IS NO AVOIDANCE OF TAX LIABILITY, NO PART OF THE INCOME FROM THE ASSET GOES INTO THE HAN DS OF THE ASSESSEE IN SHAPE OF INCOME OR UNDER ANY GUISE. 13. RELIANCE HAS BEEN PLACED BY THE ASSESSING OFFICER IN THE CASE OF KAYCEE ELECTRICAL VS DCIT 87 ITD 35 (DELHI) IN WHICH CASE THE FACTS WERE THAT THE ENTIRE TRANSACTION WHICH COULD GENERATE INCOME WERE KEPT S ECRET AND NOT ENTERED INTO THE REGULAR BOOKS OF ACCOUNT IT WAS HELD TO BE UNDISCLO SED INCOME. THE PRINCIPLE LAID DOWN IN THE SAID DECISION WAS WHERE ANY ASSETS IS FOUND IN THE POSSESSION AND CONTROL OF THE ASSESSEE IT IS NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNTS MAINTAINED BY HIM THEN THE ONUS SHIFT UPON THE ASSESSEE TO PROVE THE SAME AND ON SUCH TRANSACTIONS IT WAS HELD TO 11 ITA NO..171/KOL/2013 M/S.SHALINI PROPERTIES & DEVELOPERS PVT. LTD. A.YR.2009-10 11 BE COLOURFUL DEVICE. FURTHER, IN THE CASE OF CIT VS INDIAN EXPRESS NEWSPAPERS (MADURAI) P.LTD. 238 ITR 70(MAD.) AS RELIED UPON BY THE ASSESSING OFFICER, IN THE SAID CASE, IT WAS DECIDED THAT WHERE THE BORROWERS BORRO WING MONEY WAS DIVERTED TO THE ASSOCIATE CONCERN THE INTEREST PAYMENT ON SUCH BORR OWERS WAS NOT DEDUCTIBLE U/S 36(1)(III) AND IT WAS HELD TO BE A COLOURFUL DEVICE . THE FACTS OF THE CASE ARE DISTINGUISHABLE AND NOT SIMILAR TO THE FACTS OF THE CASE OF THE APPELLANT. IN THE CASE OF ATHERTON VS BRITISH INSULATOR AND HELSBY CABLES LTD . 10 TAX CASES 155, IT WAS HELD A SUM OF MONEY EXPENDED, NOT OF NECESSITY AND WIT H A VIEW TO A DIRECT AND IMMEDIATE BENEFIT TO THE TRADE, BUT VOLUNTARILY AND ON THE GR OUNDS OF COMMERCIAL EXPEDIENCY AND IN ORDER INDIRECTLY TO FACILITATE THE CARRYING ON O F THE BUSINESS, MAY YET BE EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF THE TRAD E. 14. MOREOVER THE FACTS AND MATERIAL BROUGHT ON RECORD SHOW THAT THE GROUP OF THE APPELLANT COMPANY ARE ENGAGED IN THE MANUFACTURE OF TYRES AND IT HAD OBTAINED THE BENEFIT OF USE BRAND NAME OF DUNLOP INDIA LTD. A ND IT HAD INCREASED ITS REVENUE BY WAY SERVICE CHARGES RECEIVED FROM SUCH COMPANIES. I NFORMATION AND MATERIAL EVIDENCE BROUGHT ON RECORD ALSO SHOW THAT THE COMPANY, M/S. SHALINI PROPERTIES AND DEVELOPERS LTD., HAD BEEN CONTROLLING THE SHARES OF DUNLOP IND IA LTD. THE APPELLANT COMPANY HAD FURNISHED COPIES OF RESOLUTION TO SHOW THAT THE SAI D COMPANY, M/S SHALINI PROPERTIES & DEVELOPERS HAD BEEN INSTRUMENTAL IN ARRANGING THE T RANSACTION OF OBTAINING THE RIGHTS OVER THE BRAND NAME OF DUNLOP TO THE APPELLANT COMPANY. ON THE OTHER HAND, THE ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL ON R ECORD TO SHOW THAT THE TRANSACTION IS A SHAM OR THAT THE GROUP OF COMPANIES HAVE ADOPTED A COLOURFUL DEVICE TO DEFRAUD THE REVENUE. MERELY BECAUSE THE APPELLANT COMPANY HAD N O GUARANTOR OR THAT THE APPELLANT HAD NOT TAKEN ANY LOAN OR MERELY BECAUSE THE EXPEND ITURE HAD BEEN DEBITED IN THE PROFIT AND LOSS ACCOUNT UNDER A DIFFERENT NOMENCLATURE THE TRANSACTION COULD NOT BE CALLED INTO QUESTION AS A COLOURABLE DEVICE. IN BIRLA COTTON SPINNING & WVG. MILLS LTD. VS CIT (1971) 82 ITR 166 (SC) IT HAS BEEN HELD THAT IT MU ST BE REMEMBERED THAT THE EARNING OF PROFITS AND THE PAYMENTS OF TAXES ARE NOT ISOLAT ED AND INDEPENDENT ACTIVITIES OF A 12 ITA NO..171/KOL/2013 M/S.SHALINI PROPERTIES & DEVELOPERS PVT. LTD. A.YR.2009-10 12 BUSINESS. THESE ACTIVITIES ARE CONTINUOUS AND TAKE PLACE FROM YEAR TO YEAR DURING THE WHOLE PERIOD FOR WHICH THE BUSINESS CONTINUES. IF T HE ASSESSEE TAKES STEPS FOR REDUCING ITS LIABILITY TO TAX WHICH RESULTS IN MORE FUND BEI NG LEFT FOR THE PURPOSE OF CARRYING ON THE BUSINESS THERE IS ALWAYS A POSSIBILITY OF HIGHE R PROFITS. THE EXPENDITURE WHICH WAS INCURRED BY THE ASSESSEE WAS, THEREFORE, ALLOWABLE BIRLA COTTON SPG. & WVG. MILLS LTD. VS. CIT (1967) 64 ITR 568 (CAL) FOLLOWED. ON T HE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, WHAT IS TO BE EXAMINED IS WHETHER THE TRANSACTION IS A REVENUE EXPENDITURE AND IF SO, WHETHER THE SAID EXPENDITURE HAD BEEN LA ID OUT WHOLLY AND EXCLUSIVELY FOR COMMERCIAL EXPEDIENCY. AS THE INCOME-TAX ACT DOES N OT DEFINE THE TERMS CAPITAL EXPENDITURE AND REVENUE EXPENDITURE ONE HAS T O DEPEND UPON THEIR NATURAL MEANING AS WELL AS DECIDED CASES. GENERAL PRINCIPLE S TO DECIDE WHETHER AN EXPENDITURE IS CAPITAL OR REVENUE IN NATURE, THE FOLLOWING POIN TS OF DISTINCTION ARE RELEVANT : CAPITAL EXPENDITURE IS INCURRED IN ACQUIRING, EXTEN DING OR IMPROVING A FIXED ASSET, WHEREAS REVENUE EXPENDITURE IS INCURRED IN THE NORM AL COURSE OF BUSINESS AS A ROUTINE BUSINESS EXPENDITURE; (A0 CAPITAL EXPENDITURE PRODUCES BENEFITS FOR SEVER AL YEARS, WHEREAS REVENUE EXPENDITURE IS CONSUMED WITHIN A PREVIOUS YEAR; (B) CAPITAL EXPENDITURE MAKES IMPROVEMENT IN EARNIN G CAPACITY OF A BUSINESS, REVENUE EXPENDITURE, ON THE OTHER HAND, MAINTAINS THE PROFI T MAKING CAPACITY OF A BUSINESS. (C) USUALLY CAPITAL EXPENDITURE IS A NON-RECURRING OUTLAY, WHEREAS REVENUE EXPENDITURE IS NORMALLY A RECURRING OUTLAY. (D) IN ORDER TO DETERMINE WHETHER AN EXPENDITURE IS CAPITAL OR REVENUE IN NATURE, THE FACT THAT IT IS A LUMP SUM PAYMENT OR PERIODIC PAYMENT I S NOT IMPORTANT. (E) FOR DETERMINING WHETHER EXPENDITURE IS OF CAPIT AL OR REVENUE NATURE, IT IS IMMATERIAL WHETHER EXPENDITURE IS MADE OUT OF MONEY WITHDRAWN FROM CAPITAL OR OUT OF PROFITS SCHENECTADY BECK INDIA LTD. VS. CIT [2004] 91 ITD 2 3 M(MUM.) TM IT IS WELL SETTLED THAT CAPITAL EXPENDIT URE CANNOT BE ATTRIBUTED TO REVENUE AND VICE VERSA. SECONDLY, IT IS EQUALLY CLEAR THAT A PAYMENT IN LUMP SUM DOES NOT NECESSARILY 13 ITA NO..171/KOL/2013 M/S.SHALINI PROPERTIES & DEVELOPERS PVT. LTD. A.YR.2009-10 13 MAKE THE PAYMENT A CAPITAL ONE. IT MAY STILL POSSES S REVENUE CHARACTER IN THE SAME WAY AS A SERIES OF PAYMENTS. THIRDLY,, IF THERE IF A LU MP SUM PAYMENT BUT THERE IS NO POSSIBILITY OF A RECURRENCE, IT IS PROBABLY OF A CA PITAL NATURE THOUGH THIS IS BY NO MEANS A DECISIVE TEST. FURTHER, IT THE PAYMENT OF A LUMP S UM CLOSES THE LIABILITY TO MAKE A REPEATED AND PERIODIC PAYMENTS IN THE FUTURE, IT MA Y GENERALLY BE REGARDED AS A PAYMENT OF A REVENUE CHARACTER. LASTLY, IF THE OWNERSHIP OF THE MONEY WHETHER IN POINT OF FACT OR BY A RESULTING TRUST IS STILL WITH THE TAXPAYER, TH EN THERE IS ACQUISITION OF A CAPITAL ASSET AND NOT AN EXPENDITURE OF A REVENUE CHARACTER AS PE R RATIO LAID DOWN IN INDIAN MOLASSES CO.(P)LTD. V. CIT [1959] 37 ITR 66 (SC), HYLAM LTD. V. CIT [1973] 87 ITR 310 (AP). THOUGH THE DIVIDING LINE BETWEEN A CAPITAL AND REVE NUE EXPENDITURE IS REAL, YET SOMETIMES IT BECOMES DIFFICULT TO DRAW. THEREFORE, A DECISION IS TO BE TAKEN IN EACH CASE IN THE LIGHT OF THE FACTS AND SURROUNDING CIRCUMSTA NCES. HOWEVER, THE FOLLOWING JUDICIAL PRONOUNCEMENTS SHOULD BE KEPT IN VIEW WHILE DETERMI NING WHETHER A PARTICULAR EXPENDITURE IS A CAPITAL OR REVENUE IN NATURE. IN E MPIRE JUT CO LTD. V. CIT [1980] 124 ITR 1 (SC), IT HAS BEEN HELD THAT IF THE ADVANTAG E CONSISTS MERELY IN FACILITATING THE ASSESSEES TRADING OPERATIONS OR ENABLING THE MANAG EMENT AND CONDUCT OF THE ASSESSEES BUSINESS TO BE CARRIED ON MORE EFFICIENTLY OR PROFI TABLY WHILE LEAVING THE FIXED CAPITAL UNTOUCHED, THE EXPENDITURE WOULD BE ON REVENUE ACCO UNT, EVEN THOUGH THE ADVANTAGE MAY ENDURE FOR AN INDEFINITE FUTURE. THE TEST OF EN DURING BENEFIT IS, THEREFORE, NOT A CERTAIN OR CONCLUSIVE TEST AND IT CANNOT BE APPLIED BLINDLY AND MECHANICALLY WITHOUT REGARD TO THE PARTICULAR FACTS AND CIRCUMSTANCES OF A GIVEN CASE. IN THE INSTANT CASE, THE PAYMENT HAS NOT BEEN MADE FOR ACQUIRING A BRAND NAM E, BUT FOR FACILITATING FOR ACQUISITION OF THE BRAND NAME, WHICH IN TURN MADE S UBSTANTIAL IMPROVEMENT IN EARNING CAPACITY OF THE APPELLANTS BUSINESS. THE PAYMENT I S IN THE FORM OF A BROKERAGE OR COMMISSION OR SERVICE CHARGES. (NOT-WITHSTANDING IT S LIABILITY FOR TDS). THEREFORE ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE IN M Y VIEW THE EXPENDITURE INCURRED BY THE APPELLANT COMPANY FOR THE PAYMENT MADE TO M/S. SHALINI PROPERTIES & DEVELOPERS PVT. LTD IS A REVENUE EXPENDITURE. 14 ITA NO..171/KOL/2013 M/S.SHALINI PROPERTIES & DEVELOPERS PVT. LTD. A.YR.2009-10 14 15. NOW, THE ISSUE REMAINING FOR CONSIDERATION IS WHETHER THE EXPENDITURE IS ALLOWABLE AS BUSINESS EXPENDITURE UNDER SECTION 37( 1) OF THE ACT. IN CIT VS, NAVASRI COTTON & SILK MIL LS LTD. (135 ITR 546 (GUJ.) THE HONBLE GUJRAT HIGH COURT HAVE EVOLVED THE FOLLOWING TESTS (WHICH CAN BE DIVIDED INTO TWO CATEGORIES POSITIVE TESTS AND NEGATIVE TESTS) FOR DECIDING WHETHER A PARTICULAR EXPENDITURE CAN BE TERMED AS REVENUE OR CAPITAL EXP ENDITURE. ONE (AT LEAST ONE) OF THE POSITIVE TESTS MUST NOD ITS HEAD AND NONE (NOT EVEN ONE) OF THE NEGATIVE TESTS MUST DO SO IN ORDER TO AFFIRMATIVELY HOLD THAT THE EXPENDITURE IS DEDUCTIBLE UNDER SECTION 37(1). THE POSITIVE TESTS ARE : IF THE EXPEND ITURE IS INCURRED : (I) WITH A VIEW TO BRING PROFITS OR MONETARY ADVANTAGE EITHER TODAY OR TOMOR ROW; (II) TO RENDER THE ASSESSEE IMMUNE FROM IMPENDING OR REASONABLY APPREHENDED LIT IGATION; (III) IN ORDER TO SAVE LOSSES IN FORESEEABLE FUTURE; (IV) FOR EFFECTING EC ONOMY IN WORKING WHICH MAY PAY DIVIDENDS TODAY OR TOMORROW; (V) FOR INCREASING EFF ICIENCY IN WORKING; (VI) FOR REMOVING INEFFICIENCY IN THE WORKING; (VII) WHERE T HE EXPENDITURE INCURRED IS SUCH AS A WISE, PRUDENT, PRAGMATIC AND ETHICAL MAN OF THE WOR LD OF BUSINESS WOULD CONSCIENTIOUSLY INCUR WITH AN EYE ON PROMOTING HIS BUSINESS PROSPECTS, SUBJECT TO THE EXPENDITURE BEING GENUINE AND WITHIN REASONABLE LIM ITS; (VIII) WHERE IT IS INCURRED SOLELY BY WAY OF A CIVIL DUTY OWNED BY THE ASSESSEE TO THE SOCIETY HAVING REGARD TO THE NATURE OF HIS BUSINESS WHICH BRINGS HIM PROFITS BUT RESULTS IN SOME DETRIMENT TO THE PUBLIC AT LARGE EITHER BY WAY OF HEALTH HAZARD OR E COLOGICAL POLLUTION OR SERIOUS INCONVENIENCE TO THE CITIZENS WITH A VIEW TO MITIGA TE THE AFORESAID EVIL CONSEQUENCES AND CONSEQUENCES OF A LIKE NATURE, SUBJECT TO ITS B EING GENUINE AND WITHIN REASONABLE LIMITS. THE NEGATIVE TESTS ARE : IF THE EXPENDITURE INCURRED : (I) FOR A MERE ALTRUISTIC CONSIDERATION ; (II) (II) MAINLY IN ORDER TO SATISF Y HIS PHILANTHROPIC URGES; (III) MAINLY IN ORDER TO WIN APPLAUSE OR PUBLIC APPRECIATION; (IV) FOR ILLEGAL, IMMORAL OR CORRUPT PURPOSE OR BY ANY SUCH MEANS OR FOR ANY SUCH REASON S ; (V) MAINLY IN ORDER TO OBLIGE A 15 ITA NO..171/KOL/2013 M/S.SHALINI PROPERTIES & DEVELOPERS PVT. LTD. A.YR.2009-10 15 RELATIVE OR AN OFFICIAL; (VII) MAINLY TO SHOW OFF O R IMPRESS OTHERS WITH HIS AFFLUENCE OR FOR OSTENTATIOUS PURPOS3ES; (VII) APPARENTLY FOR A FACTOR LISTED AS A POSITIVE FACTOR, BUT IN REALITY FOR ONE OF THE OBNOXIOUS PURPOSES LISTED AS A NEGATIVE FACTOR; (IX) ON A NEBULOUS PLEA OR PRETEXT BY WAY OF AN ALIBI IN THE NAME OF W INNING PROFITS IN REMOTE FUTURE BUT REALLY FOR ONE OR THE OTHER FOR THE PURPOSE LISTED AS NEGATIVE TESTS; (X) IT IS A BOGUS FICTITIOUS OR SHAM TRANSACTION; (XI) IT IS UNREASON ABLE AND OUT OF PROPORTION; (XII) IT IS AN EXPENDITURE MERELY WITH A VIEW TO AVOID TAX LIABILI TY WITHOUT ANY GENUINE PURPOSE OR REASON IN GOOD FAITH; AND (XIII) THE ADVANTAGE TO B E SECURED BY INCURRING THE EXPENDITURE IS OF THE NATURE OF A REMOTE POSSIBLE ADVANTAGE ON IFS AND BUTS AND, IF AT ALL, TO BE SECURED AT AN UNCERTAIN FUTURE DATE WHICH MAY BE CO NSIDERED TOO REMOTE. AS POINTED OUT EARLIER, ONE OF T HE POSITIVE TESTS MUST BE ATTRACTED AND NONE OF THE NEGATIVE TESTS SHOULD BE SATISFIED IN ORDER TO CLAIM DEDUCTION UNDER SECTION 37(1) OF THE ACT. IN THIS CASE, ,THE EXPENDITURE HAS BEEN INCURRED WITH A VIEW TO BRING PROFITS OR MONETARY ADVANTAGE EITHER TODAY OR TOMORROW; THE EXPENDITURE INCURRED IS SUCH AS A WISE, PRUDENT, PRAGMATIC AND ETHICAL MAN OF THE WOR LD OF BUSINESS WOULD CONSCIENTIOUSLY INCUR WITH AN EYE ON PROMOTING HIS BUSINESS PROSPECTS, SUBJECT TO THE EXPENDITURE BEING GENUINE AND WITHIN REASONABLE LIM ITS. THEREFORE, MORE THAN ONE OF THE POSITIVE TESTS HAVE BEEN PROVED. THEREFORE, MOR E THAN ONE OF THE POSITIVE TESTS HAVE BEEN PROVED. COMING TO THE NEGATIVE TESTS, IT MAY B E MENTIONED AGAIN THAT THE ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL EVID ENCE ON RECORD THAT IT IS A BOGUS FICTITIOUS OR SHAM TRANSACTION; IT IS UNREASONABLE AND OUT OF PROPORTION; AND THAT IT IS AN EXPENDITURE MERELY WITH A VIEW TO AVOID TAX LIABILI TY WITHOUT ANY GENUINE PURPOSE OR REASON IN GOOD FAITH. THEREFORE, NONE OF THE CONDIT IONS OF THE NEGATIVE TESTS HAS BEEN SATISFIED IN THIS CASE. IN CIT VS CHANDANLAL KESHAVLAL & CO, [ 1960] 38 ITR 601 (SC), THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IS THAT IF A PAYM ENT OR EXPENDITURE IS INCURRED FOR THE PURPOSE OF THE TRADE OF THE ASSESSEE, IT IS DED UCTIBLE EVEN IF IT IS MAY BRING A BENEFIT TO A THIRD PARTY. FURTHER, IN APPLYING THE TEST OF COMMERCIAL EXPEDIENCY FOR DETERMINING 16 ITA NO..171/KOL/2013 M/S.SHALINI PROPERTIES & DEVELOPERS PVT. LTD. A.YR.2009-10 16 WHETHER AN EXPENDITURE IS WHOLLY AND EXCLUSIVELY LA ID OUT FOR THE PURPOSE OF THE BUSINESS, REASOONABLEN3ESS OF THE EXPENDITURE HAS T O BE ADJUDGED FROM THE POINT OF VIEW OF BUSINESSMAN AND NOT OF THE REVENUE AS HELD IN CIT VS. WALCHAND & CO.(P)LTD [1967] 65 ITR 381 (SC). IN SASSON J.DAVID & CO.(P)L TD. VS. CIT [1979] 118 ITR 261 (SC). IT HAS BEEN HELD THAT THE ASSESSEE CAN CLAIM DEDUCTION UNDER SECTION 37(1) EVEN THOUGH THERE IS NO COMPELLING NECESSITY TO INCUR SU CH EXPENDITURE. IN GOODYEAR INDIA LTD. VS. ITO[2000] 73 ITD 189/68TTJ(DELHI)TM 330, I T HAS BEEN HELD THAT EXPENDITURE INCURRED TO GET RIGHT TO USE LICENCE FOR LIMITED PE RIOD (WHERE THE ASSESSEE COMPANY, MANUFACTURING TYRES, ENTERED INTO AN AGREEMENT WITH A FOREIGN COMPANY FOR TECHNICAL KNOW-HOW FOR MANUFACTURE OF RADIAL TYRES AND THE AS SESSEE GOT THE RIGHT TO USE THE LICENCE FOR A FIXED PERIOD OF 8 YEARS) IS DEDUCTIBL E. 16. IN VIEW OF THE ABOVE DISCUSSION AND AFTER PE RUSING THE FACTS AND CIRCUMSTANCES OF THE CASE, ANALYZING THE REPORTED CASES CITED BOTH B Y THE ASSESSING OFFICER AND THE APPELLANT COMPANY, AFTER CONSIDERING THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. AZAD BACHAO ANDOL AN CITED SUPRA AND ALSO IN VIEW OF THE UNDER MENTIONED SURMISED POINTS OF REASONS, I A M OF THE OPINION THAT THE EXPENDITURE INCURRED BY THE APPELLANT COMPANY IN MA KING PAYMENT UNDER THE HEAD SBLC CHARGES OF RS.11,74,12,500/- TO SHALINI PROPER TIES AND DEVELOPERS PVT. LTD. IS CONSIDERATION OF COMMERCIAL EXPEDIENCY OF THE BUSIN ESS OF THE APPELLANT COMPANY AND IS ALLOWABLE AS DEDUCTION UNDER SECTION 37(1) OF TH E IT ACT :- (I) M/S. SHALINI PROPERTIES & DEVELOPERS P VT. LTD HAS ARRANGED FOR LEASE OF DUNLOP BRAN NAME, LOGO ETC IN FAVOUR OF THE APPELLANT COMP ANY FOR THE PERIOD OF 10 YEARS. AS STATED IN THE BOARD OF DIRECTOR MEETING PROCEEDING DATED 12.03.2008 M/S. SHALINI HAS AGREED TO ARRANGE THE BRAND NAME AND LOGO OF DUNLOP IN FAVOUR OF THE APPELLANT PROVIDED THE APPELLANT UNDERTAKES TO PAY SBLC CHARG ES. IN THE SAID BOARD MEETING THE DIRECTOR DECIDED THAT TAKING OF DUNLOP BRAND NAME O N LEAVE WOULD RESULT IN SUBSTANTIAL INCOME TO THE APPELLANT COMPANY HENCE PAYMENT OF SB LC CHARGES WOULD BE IN THE 17 ITA NO..171/KOL/2013 M/S.SHALINI PROPERTIES & DEVELOPERS PVT. LTD. A.YR.2009-10 17 INTEREST OF THE COMPANY. IN THE BOARD MEETING OF TH E APPELLANT COMPANY HELD ON 28.03.2008 THE BOARD OF DIRECTOR HAS RESOLVED THAT PAYMENT MADE TO M/S. SHALINI IS QUID PRO QUO FOR THE ASSIGNMENT OF THE DUNLOP BRAND NAME ETC. THE BOARD OF DIRECTOR IN THEIR BOARD MEETING ON 28.06.2008 HAS AGREED THAT SBLC CH ARGES ARE PAID TO M/S. SHALINI FOR THEIR EFFORTS IN ARRANGING THE ASSIGNMENT OF BRAND NAME AND LOGO OF DUNLOP FROM DUNLOP INDIA LTD IN FAVOUR OF THE APPELLANT. (II) THE LD. AR HAS SUBMITTED THAT THE APPELLANT COMPANY HAS PAID TO M/S. SHALINI PROPERTIES & DEVELOPERS PVT. LTD. AND DUNLOP INDIA LTD. RS.26,20,49,777/- UP TO F.Y.2011-12 AS SBLC AND FOR USE OF BRAND NAME. WHER EAS THE APPELLANT AHS EARNED RS.45,67,53,657/- UPTO SAID PERIOD BY SUB LEASING D UNLOP BRAND. THIS SHOWS THAT THE DECISION OF BOARD OF DIRECTORS OF APPELLANT COMPAN Y TO APPROACH M/S SHALINI PROPERTIES & DEVELOPERS PVT. LTD. FOR ASSIGNMENT OF DUNLOP BRA NCH NAME AND LOGO WAS A COMMERCIALLY PRUDENT DECISION. (III) THE HONBLE SUPREME COURT IN THE CASE OF SA BUILDERS LTD VS CIT (APPEALS) (2007) 288 ITR 1 HAS CONFIRMED THE FOLLOWING OBSERV ATION OF THE HONBLE DELHI HIGH COURT ON PAGE-9 OF THE REPORT :- WE AGREE WITH THE VIEW TAKEN BY THE DELHI HIGH CO URT IN CIT V DALMIA CEMENT (B) LTD (2002) 254 ITR 377 THAT ONCE IT IS ESTABLISHED THAT THERE WAS NEXUS BETWEEN THE EXPENDITURE AND THE PURPOSE OF THE BUSINESS (WHICH NEED NOT NECESSARILY BE THE BUSINESS OF THE ASSESSEE ITSELF) THE REVENUE CANNOT JUSTIFIA BLY CLAIM TO PUT IT SELF IN THE ARM CHAIR OF THE BUSINESSMAN OR IN THE POSITION OF THE BOARD OF DIRECTORS AND ASSUME THE ROLE TO DECIDE HOW MUCH IS REASONABLE EXPENDITURE HAVING RE GARD TO THE CIRCUMSTANCES OF THE CASE. NO BUSINESSMAN CAN BE COMPELLED TO MAXIMIZE H IS PROFIT. THE INCOME TAX AUTHORITIES MUST PUT THEMSELVES IN THE SHOES OF THE ASSESSEE AND SEE HOW A PRUDENT BUSINESSMAN WOULD ACT. THE AUTHORITIES MUST NOT LOO K AT THE MATTER FROM THEIR WON VIEW POINT BUT THAT OF A PRUDENT BUSINESSMAN WOULD ACT. (EMPHASIS SUPPLIED. ) (IV) THE HONBLE MADHYA PRADESH HIGH COURT IN THE C ASE OF ADDL. CIT VS KUBER SINGH BHAGWANDAS (1979) 119 ITR 379 (MP) HAS HELD THAT VO LUNTARY DONATION GIVEN IN CHIEF 18 ITA NO..171/KOL/2013 M/S.SHALINI PROPERTIES & DEVELOPERS PVT. LTD. A.YR.2009-10 18 MINISTER FUND FOR OBTAINING PERMIT FOR EXPORT OF GR AM IS AN ALLOWABLE EXPENSE. THIS DECISION OF HONBLE MADHYA PRADESH HIGH COURT HAS B EEN APPROVED BY HONBLE SUPREME COURT IN THE CASE OF SRI VENKATA SATYANARAY ANA RICE MILL CONTRACTORS CO. V CIT (1997) 223 ITR 101. IN THAT CASE THE HONBLE SU PREME COURT HAS HELD AS FOLLOWS :- BUSINESS EXPENDITURE CONTRIBUTION MADE TO DISTR ICT WELFARE FUND THE CORRECT TEST IS ALLOWABILITY OF SUCH EXPENDITURE IS COMMERCIAL E XPEDIENCY AND NOT WHETHER IT WAS COMPULSORY OR NOT CONTRIBUTION WAS NOT ILLEGAL OR OPPOSED TO PUBLIC POLICY BUT WAS FOR THE BENEFIT OF THE GENERAL PUBLIC REQUIRING P AYMENT TO BE MADE FOR A JUST CAUSE WHICH WOULD ENTITLE A BUSINESSMAN TO OBTAIN A LICEN SE OR PERMIT CANNOT BE REGARDED AS BEING AGAINST THE POLICY. ANY CONTRIBUTION MADE BY AN ASSESSEE TO A PUBLIC WELFARE FUND WHICH IS DIRECTLY CONNECTED RELATED WITH THE CARRYI NG ON OF THE ASSESSEES BUSINESS OR WHICH RESULTS IN THE BENEFIT TO THE ASSESSEES BUSI NESS HAS TO BE REGARDED AS AN ALLOWABLE DEDUCTION UNDER S.37(1)-ASSESSEE DOING BU SINESS OF EXPORT OF RICE AND CONTRIBUTING 50 PAISE PER QUINTAL TO DISTRICT WELFA RE MAINTAINED BY THE DISTRICT COLLECTOR, WITHOUT WHICH CONTRIBUTION HE WOULD NOT GET PERMIT DIRECTLY CONNECTED WITH ASSESSEES CARRYING ON OF BUSINESS SUCH CONTRIBUT ION IS NOT AGAINST PUBLIC POLICY, AND IS ALLOWABLE UNDER SECTION 37(1). (V) THE HONBLE SUPREME COURT IN THE CASE OF VODAFO NE INTERNATIONAL HOLDING B.V. V UOI (2012) 341 ITR 1 HAS CONSIDERED THE MCDOWELL CA SE AND ITS OTHER DECISIONS AND HELD BY MAJORITY AS FOLLOWS :- (I) IT IS THE TASK OF THE COURT TO ASCERTAIN THE LEGAL NATURE OF THE TRANSACTION AND WHILE DOING SO IT HAS TO LOOK AT THE ENTIRE TRANSACTION A S A WHOLE AND NOT ADOPT A DISSECTING APPROACH. (II) ALL TAX PLANNING IS NOT ILLEGITIMATE OR IMPERM ISSIBLE. (III)THERE IS NO CONFLICT BETWEEN MCDOWELL AND AZAD I BACHAO OR BETWEEN MCDOWELL AND MATHURAM AGRAWAL. (IV) IN VIEW OF ABOVE DISCUSSED LEGAL AND FACTUAL P OSITION I AM OF THE VIEW THAT THERE IS COMMERCIAL EXPEDIENCY IN PAYMENT OF SBLC CHARGES OF RS.11,74,12,500/- BY THE 19 ITA NO..171/KOL/2013 M/S.SHALINI PROPERTIES & DEVELOPERS PVT. LTD. A.YR.2009-10 19 APPELLANT M/S SHALINI PROPERTIES & DEVELOPERS PVT. LT. AND HENCE THIS PAYMENT IS AN ALLOWABLE EXPENSES. ACCORDINGLY, GROUND NOS. 1 TO 1 5 OF THE APPEAL OF THE APPELLANT ARE DECIDED IN FAVOUR OF THE APPELLANT AND THE ADDITION OF RS.11,74,12,500/- MADE BY THE AO BY WAY OF THE DISALLOWANCE OF SBLC IS HEREBY DEL ETED. THUS, THE GROUND NOS. 1 TO 15 OF THE APPEAL OF THE APPELLANT ARE ALLOWED. IN VIEW OF THE ABOVE OBSERVATION AND DECIS ION ON THE ISSUE IN THE CASE OF M/S. RUIA SONS & PVT. LTD., THE ADDITION MADE BY THE AO IN THE APPELLANTS CASE IS NOT SUSTAINABLE. EVEN THOUGH THE ASSESSING OFFICER HAS RELATED THE ASSESSMENT AND FINDINGS OF M/S. RUIA SONS P. LTD TO MAKE THE DISALLOWANCE I N THE CASE OF THE APPELLANT, IT IS NECESSARY TO UNDERSTAND THAT THE APPELLANT COMPANY AND M/S RUIA SONS P LTD ARE SEPARATE ENTITIES AS PER LAW AND IT IS TO BE ASSESS ED SEPARATELY BEING DIFFERENT ENTITIES. FOR AN ARGUMENT SAKE AND ON AN HYPOTHETICAL SITUATI ON, IF IT IS CONSIDERED THAT THE ISSUE OR THE ADDITION WHICH IS TO BE MADE IN THE CASE OF RUIA SONS PVT. LTD. IS THE SAME EVEN THEN THIS ISSUE IN THE CASE OF THE APPELLANT HAS TO BE VIEWED WITH AN OPEN MIND AND CONSIDERING THE ACCOUNT OF THE APPELLANT, KEEPING I N VIEW ALL THE FACTS AND CIRCUMSTANCES OF THE CASE IRRESPECTIVE OF THE TREAT MENT OF THE PAYMENT IN THE CASE OF RUIA SONS P LTD AND THE RESULT OF SUCH TREATMENT IN ITS CASE. SIMILARLY, EVEN THOUGH THE MANNER IN WHICH THE ISSUE HAS BEEN DECIDED AND TREA TED OR THE ADDITION MADE IN THE CASE OF RUIA SONS PVT. LTD HAS BEEN DELETED OR SUSTAINED , THEN ALSO THE ISSUE IN THE CASE OF THE APPELLANT HAS TO BE CONSIDERED SEPARATELY WITH AN OPEN MIND TAKING INTO VIEW ALL THE FACTS AND CIRCUMSTANCES OF THE CASE. THUS, KEEPING IN VIEW OF THE AGREEMENT AND THE RESOLUTION PASSED BY THE BOARD OF THE M./S. RUIA SO NS P. LTD AND THE UNDERSTANDING MADE BETWEEN THE APPELLANT AND M/S. RUIA SONS P LTD AND AS PER THE TERMS OF AGREEMENT ENTERED INTO IT IS SEEN THAT THE APPELLAN T WAS INSTRUMENTAL IN GETTING HOLD OF THE DUNLOP BRAND NAME IN FAVOUR OF M/S. RUIA SONS P LTD AND FOR THIS M./S RUIA SONS P LTD HAS MADE PAYMENT OF SBLC CHARGES OF RS.13192468 4/- ON WHICH TAX WAS DEDUCTED AT SOURCE. SIMULTANEOUSLY,, SIMILAR AMOUNT OF RS. 1 31924684/- WAS PAID BY THE 20 ITA NO..171/KOL/2013 M/S.SHALINI PROPERTIES & DEVELOPERS PVT. LTD. A.YR.2009-10 20 APPELLANT TO ICICI BANK AFTER DEDUCTION OF TAX AT S OURCE AS PER THE AGREEMENT ENTERED INTO. 17. THAT ON THE BASIS OF THE AFORESAID FIND INGS THE LD. CIT(A) OBSERVED THAT THE CASE OF THE ASSESSEE IS ENTIRELY DIFFERENT FROM THE CASE OF M/S. RUIA SONS P.LTD AND ON ONE HAND THE ASSESSEE RECEIVING INCOME OF RS.13,19 ,24,685/- AND ON THE OTHER HAND MAKING PAYMENT OF SIMILAR AMOUNT OF RS.13,19,24,685 /- IN THE INCOME AND EXPENDITURE OF THE ASSESSEE IN THE WRITTEN SUBMISSION AS WELL A S FROM THE PAPER BOOK IT IS SEEN THAT EXCEPT FOR THE RECEIPT REFLECTED OF RS.13,19,24,685 /- RECEIVED BY THE ASSESSEE FROM M/.S. RUIA SONS PVT.LTD. THE ASSESSEE IS NOT HAVING ANY OTHER INCOME AND IN THE EXPENDITURE ALSO THE ONLY MAJOR HEAD OF EXPENSES IS THE AMOUNT OF RS.13,19,24,685/-. ON ONE SIDE THE ASSESSEE RECEIVING SBLC CHARGES FROM M/S RUIA S ONS PVT. LTD AND ON THE OTHER HAND IT IS MAKING PAYMENT OF SUCH SBHC AND ACTUALLY IT IS THE SBLC CHARGES WHICH THE ASSESSEE IS RECEIVING THEREFORE THE ASSESSEE COMPAN Y IS ACTING AS A MEDIUM AND REIMBURSEMENT BEING MADE BY THE ASSESSEE TO THE BAN K. ON ONE HAND IT IS THE INCOME OF THE ASSESSEE AND ON THE OTHER IT IS THE EXPENDITURE (BOTH AS PER THE AGREEMENT/BOARD RESOLUTION) NULLIFIED ALL THE ACCOUNTS AND THEREFOR E THE LD. CIT(A) HELD UNDER THE PROVISIONS OF THE ACT DISALLOWANCE WAS NOT CALLED F OR. HENCE THE DISALLOWANCE OF RS.13,19,24,685/- MADE BY THE AO BE DELETED AND THE GROUNDS OF APPEAL OF THE ASSESSEE WERE ALLOWED BY THE LD. CIT(A). 18. WE HAVE PERUSED THE CASE RECORDS, FACTS A ND CIRCUMSTANCES. IN THIS CASE AND HEARD THE RIVAL CONTENTIONS AND WE ARRIVED AT OUR C ONSIDERED VIEW THAT THE LD. CIT(A) HAS EXAMINED EACH AND EVERY ASPECT IN THIS CASE WHI LE DETERMINING THE RIGHTS AND LIABILITIES OF THE CASE. THE INCOME AND EXPENDITURE ACCOUNT OF THE ASSESSEE WAS ALSO EXAMINED BY THE LD. CIT(A) IN HIS ORDER AND WE FIND NO INFIRMITY IN THE FINDINGS OF THE LD. CIT(A) AND ACCORDINGLY THE RELIEF GRANTED TO TH E ASSESSEE BY THE LD. CIT(A) IS HEREBY SUSTAINED. THEREFORE ALL THE GROUNDS OF APPEAL IN I TS RESULT ARE IN FAVOUR OF THE ASSESSEE. 21 ITA NO..171/KOL/2013 M/S.SHALINI PROPERTIES & DEVELOPERS PVT. LTD. A.YR.2009-10 21 19. IN THE RESULT THE APPEAL PREFERRED BY TH E REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 28 .02.2017. SD/- SD/- [M.BALAGANESH] [ PARTHA SARATHI.CH AUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28. 02.2017. [RG PS] COPY OF THE ORDER FORWARDED TO: 1. M/S. SHALINI PROPERTIES & DEVELOPERS PRIVATE LIM ITED, 228A, A.J.C.BOSE ROAD, 5 TH FLOOR, KOLKATA-700020. 2. I.T.O., WARD-7(3), KOLKATA. 3. CIT(A)-VIII, KOLKATA. 4. CIT-III, KOLKAT A. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSTT.REGISTRAR, ITAT, KOLKATA BENCHES