ITO, Ward - 2(3), Kolkata, Kolkata V. M/s. Height Insurance Services Ltd., Kolkata

ITA 2163/KOL/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8278 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 09-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RADHEY SHYAM
• Assessee Lawyers: A K TIBREWAL
• Keywords: Business expenditure; Retrospective amendment; Question of law; Commercial expediency; TDS
• Section: 143(3); 40(a)(ia); 201(1); 207; 64; 72; 13; 37; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENC H KOLKATA BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.2163/KOL/2017 ( / ASSESSMENT YEAR: 2009-10) ITO, WARD-2(3), KOLKATA VS. M/S HEIGHT INSURANCE SERVICES LTD. KAMALALAYA CENTRE, 156A, LENIN SARANI, ROOM-319, 3 RD FLOOR, KOLKATA-700013 ./ ./PAN/GIR NO.: AACCH 0943 G (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI RADHEY SHYAM, CIT RESPONDENT BY : SHRI A.K. TIBREWAL, FCA / DATE OF HEARING : 31/10/2019 /DATE OF PRONOUNCEMENT : 22/01/2020 / O R D E R PER BENCH: THE CAPTIONED APPEAL FILED BY THE REVENUE, PERT AINING TO ASSESSMENT YEAR 2009-10, IS DIRECTED AGAINST THE ORDER PASSED BY TH E COMMISSIONER OF INCOME TAX (APPEAL)-2, KOLKATA IN APPEAL NO. 2408/CIT(A)-2/15- 16, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASSESSING OFFI CER U/S 143(3) / 263 / 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DA TED 31/03/2015. 2. THE APPEAL FILED BY THE REVENUE IS BARRED BY LIM ITATION BY 7 DAYS, THE REVENUE FILED A PETITION REQUESTING THE BENCH TO CONDONE TH E DELAY. WE HAVE HEARD BOTH PARTIES ON THIS PRELIMINARY ISSUE AND HAVING REGARD TO REASONS GIVEN IN THE PETITION FOR CONDONATION OF DELAY, WE CONDON THE DELAY AND A DMIT THE APPEAL FOR HEARING ON MERITS. M/S HEIGHT INSURANCE SERVICES LTD. ITA NO.2163/KOL/2017 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 2 22 2 3. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS FOLLOWS: 1. IN THE FACTS AND IN THE CIRCUMSTANCES AND ON PO INTS OF LAW, THE LD. CIT (A) HAS ERRED IN NOT APPRECIATING THAT THE AO HIGHLIGHT ED THAT THE PROCUREMENT OF INSURANCE BUSINESS AND COLLECTION OF PREMIUM WAS WH OLLY MADE BY THE SPECIFIED PERSON OF THE ASSESSEE COMPANY ITSELF WIT HOUT ANY HELP FROM M/S GTFS AND IN VIOLATION OF THE AGREEMENT MADE WITH RL IC. 2. THE LD. CIT(A) HAS ERRED IN FACTS AND IN POINTS OF LAW BY IGNORING THAT THE AO HAS ALLOWED 50% OF EXPENSES FOR USING THE BUILDI NG PREMISES, FURNITURE & FIXTURES, DISTRIBUTION OF LITERATURE OF RLIC IN LOC AL LANGUAGES IN DIFFERENT LOCATIONS ALONG WITH PROPOSAL FORMS AND IDENTIFICAT ION OF THE PROSPECTS OF INSURANCE AND THAT THE TOTAL PAYMENTS MADE WAS NOT WHOLLY FOR BUSINESS PURPOSE. 3. THE LD CIT(A) HAS ERRED IN FACTS AND IN POINTS OF LAW AND NOT APPRECIATING THE FACTS AND CIRCUMSTANCES BY IGNORING MATERIAL EV IDENCES THAT NO VALID SERVICES WERE RENDERED BY M/S GTFS SO AS TO BE PAID RS. 30 CRORES INSTEAD OF RS. 2 CRORES AS PER TWO ARGUMENTS DATED 23.09.2008 AND 24.03.2009 AND THAT SUCH PAYMENT OF RS. 30 CRORES WAS NOT WHOLLY AND EX CLUSIVELY FOR THE PURPOSE OF BUSINESS IN CONTRARY TO THE EVIDENCES COLLECTED IN SURVEY OPERATION U/S 133 A OF THE ACT. 4. THE APPELLANT CRAVES LEAVE TO MAKE ANY ADDITION , ALTERATION, MODIFICATION ETC. OF THE GROUNDS EITHER BEFORE THE APPELLATE PRO CEEDINGS, OR IN THE COURSE OF APPELLATE PROCEEDINGS 3.WHEN THIS APPEAL WAS CALLED OUT FOR HEARING, THE LD. COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO THE ORDER DATED 08.06.2018 , PASSED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN I.T.A. NO. 2266/KOL/2016, FO R ASSESSMENT YEAR 2011-12, WHEREBY THE ISSUE OF WRITTEN AGREEMENT WITH GTFS H AVE BEEN DISCUSSED AND ADJUDICATED IN FAVOUR OF THE ASSESSEE. THIS TRIBUNA L ALSO DISCUSSED THE OTHER GROUND RAISED BY THE REVENUE. THE LD. COUNSEL FOR T HE ASSESSEE SUBMITTED THAT THE PRESENT ISSUE IS SQUARELY COVERED BY THE ABOVE SAID ORDER OF THE TRIBUNAL, A COPY OF WHICH IS ALSO PLACED BEFORE THE BENCH. 4. THE LD. DR RELIED UPON THE ORDERS OF THE AUTHORI TIES BELOW. 5. WE SEE NO REASON TO TAKE ANY OTHER VIEW OF THE MATTER THEN THE VIEW SO TAKEN BY THE DIVISION BENCH OF THIS TRIBUNAL IN ASSESSEES O WN CASE VIDE ORDER DATED 08.06.2018. IN THIS ORDER, THE TRIBUNAL HAS INTER A LIA OBSERVED AS UNDER: M/S HEIGHT INSURANCE SERVICES LTD. ITA NO.2163/KOL/2017 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 3 33 3 3. WE COME TO THE RELEVANT FACTS FIRST. THIS ASSESS EE IS A COMPANY ENGAGED IN CORPORATE INSURANCE BUSINESS. IT MAINLY DERIVED COMMISSION INCOME OF 212,51,34,690/- IN THE RELEVANT PREVIOUS YEAR FROM M/S RELIANCE LIFE INSURANCE COMPANY LIMITED. THE ASSESSING OFFIC ER TOOK UP SCRUTINY IN ITS CASE. HE CAME ACROSS ASSESSEES PAYMENT IN QUES TION MADE TO GTFS AS SERVICE CHARGES OTHER THAN OPERATING EXPENSE REI MBURSEMENT OF 128,33,65,679.83. HE SOUGHT TO KNOW THE RELEVANT BA SIS THEREOF. HE WAS OF THE VIEW THAT MERE MAKING OF IMPUGNED PAYMENT AS PE R RELEVANT AGREEMENT WAS NOT SUFFICIENT REASON TO ACCEPT THE SAME. HE CO NSIDERED AN ADDENDUM TO THE AGREEMENT DATED 09.04.2010 PRIMA FACIE INDIC ATING ABSENCE OF ANY REALISTIC BASIS IN THE IMPUGNED PAYMENTS. EARLIER A GREEMENT BETWEEN ASSESSEE AND GTFS DATED 16.04.2009 STIPULATED PAYME NT OF 60 AND 6 CRORES FOR PERFORMING OBLIGATION AS AN AGENT AS WEL L AS FOR MAKING NECESSARY SERVICES THROUGH INFRASTRUCTURAL BACK UP; RESPECTIVELY WHICH WAS LATER ON STOOD REDUCED TO 56 AND 4 (IN CRORES) THROUGH THE ABOVE ADDENDUM FOLLOWED ACTUAL PAYMENTS OF 66.18 CRORES. ALL THIS INDICATED EXCESS PAYMENT OF 6,18,00,000/-. THE ASSESSING OFFICER ISSUED HIS NOT ICE DATED 21.03.2014 PROPOSING TO DISALLOW THE SAME. 4. THE ASSESSEES REPLY FIRST OF ALL EXPLAINED THAT THERE WAS A WRITTEN AGREEMENT WITH GTFS INDICATING THE LATTER TO HAVE BEEN PROVIDING ALL OF ITS AGENCY AND INFRASTRUCTURAL BACK UP SERVICES. IT DREW A COMPARATIVE CHART; FINANCIAL YEAR-WISE VIS--VIS PREMIUM COLLEC TED AS WELL AS COMMISSION EARNED FROM FINANCIAL YEARS 2008-09 TO 2 010-11 INDICATING TO SUMS OF 326.52 (FRESH), 755.48 AND 1114.56 (CRORES OF FRESH AND RENEWAL MONEY) INVOLVING CORRESPONDING COMMISSION EARNINGS OF 101.54, 204.26 AND 21.25 (ALL FIGURES IN CRORES); RESPECTIVELY. TH E ASSESSEE ATTRIBUTED ITS ABOVE INCOME TO PAYEESS AGENCIES AS WELL AS INFRAS TRUCTURE SERVICES. FORMER OF THE SAID SERVICES WERE STATED TO HAVE BEE N AVAILED FROM ITS EMPLOYEES NETWORK OF LAKHS OF PEOPLE THROUGHOUT TH E COUNTRY IDENTIFYING THE PROSPECTIVE INSURANCE TARGETS WHEREAS THE LATER SERVICES INVOLVED ITS 263 BRANCHES SOFTWARE, HARDWARE AND NETWORKING ETC ., 5. THE ASSESSEE FURTHER CLARIFIED THAT IT HAD PAID INCENTIVE / OTHER EXPENSES TO THE PAYEE AMOUNTING TO 128,33,65,793/- AFTER DEDUCTING TDS. NEXT CAME THE ADDENDUM DEVELOPMENTS. THE ASSESSEE S CASE WAS THAT ITS ORIGINAL AGREEMENT DATED 16.04.2009 STIPULATED PAYM ENTS UNDER THE ABOVE TWO HEADS OF 60 AND 6 CRORES AS REVISED TO 56 AND 4 CRORES AND ALL THE APPLICABLE TAXES. THE RELEVANT SERVICE TAX AT THAT POINT OF TIME WAS 10.3%. THIS INCREASED THE FORMER FIGURE TO 61,76,800/- AND LATER ONE TO BE 4,41,20,000/- TO 576,80,000/- AND 41,20,000; RESPECTIVELY AGGREGATIN G TO 66.18 CRORES IN QUESTION. 6. ALL THE ASSESSEES ABOVE PLEADINGS STOOD REJECTE D IN ASSESSMENT ORDER DATED 31.03.2014. THE ASSESSING OFFICER OBSER VED FIRST OF ALL THAT PAYEE GTFS WAS NOT ITS EXCLUSIVE AGENT. IT PROVIDED THE SERVICES IN QUESTION TO ITS OTHER CUSTOMERS AS WELL. HE THEN WAS OF THE VIEW THAT THIS PAYEES HAD ALREADY RECEIVED OTHER OPERATING EXPENSES OF 128,33,65,793/-.THIS MEANT M/S HEIGHT INSURANCE SERVICES LTD. ITA NO.2163/KOL/2017 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 4 44 4 THAT THERE WAS NO JUSTIFICATION TO PAY THE IMPUGNED EXPENDITURE ANY MORE. THE ASSESSING OFFICER ALSO CONSIDERED ASSESSEES PR EMIUM COLLECTED OF 1114.54 CRORES FOR (BOTH FRESH AS WELL AS RENEWABLE ) TO REMARK THAT ONLY ITS WORKING STRENGTH DESERVED CREDIT FOR THE SAME. HE DOUBTED GENUINENESS OF IMPUGNED PAYMENT IN THIS BACKDROP OF FACTS. MORE PARTICULARLY IN VIEW OF ASSESSEES PAYMENT OF 26,47,20,000/- MADE TO THE PAYEE ON THE LAST DATE O F FINANCIAL YEAR COMING TO 31.03.2011 AS AN ARTIFICIA L LIABILITY TO REDUCE ITS TAXABLE INCOME WITHOUT AVAILING ANY SERVICES FROM T HE SAID RECIPIENT. THE ASSESSING OFFICER FURTHER CONSIDERED ITS EXTENSIVE RECRUITMENT DRIVE AS WELL INCREASE IN STAFF STRENGTH FROM 334 IN APRIL 2010 T O 704 IN MARCH, 2011. HE THEREFORE OBSERVED THAT ASSESSEES IMPUGNED CLAIM H AD PASSED OVER ALMOST 90% OF RECEIPT OVER AND ABOVE OPERATING EXPENSES TO GTFS (SISTER CONCERN) WITHOUT INVOLVING ANY BUSINESS EXPEDIENCY THEREIN. ALL THIS DETAILED REASONING RESULTED IN IMPUGNED DISALLOWANC ES BEING MADE IN ASSESSEES HANDS. 7. THE CIT(A) REVERSES ASSESSING OFFICERS ACTION M AKING THE DISALLOWANCE IN QUESTION WITH THE FOLLOWING DISCUSS ION:- A STUDY OF THE ABOVE REPRODUCED PROVISIONS OF THE A GREEMENT WITH RLIC CLEARLY SHOWS THAT THE APPELLANT HAS TO PERFORM SEVERAL COMPLEX A ND SPECIALIZED FUNCTIONS TO EARN THE COMMISSION FROM THE PRINCIPALS. THE NUMBER AND COMP LEXITY OF FUNCTIONS OF THE APPELLANT WOULD UNDOUBTEDLY INVOLVE SPECIALIZED KNOWLEDGE OF THE FUNCTIONING OF THE PARTICULAR BUSINESS AS WELL AS MARKET INFORMATION AND ACCESS. THE SERVICE LEVEL AGREEMENT CLEARLY INDICATES THAT IT IS EXPECTED FROM THE APPELLANT TH AT IT WOULD 'EMPLOY THE BEST EFFORTS AND PROVIDE ALL NECESSARY RESOURCES TO PERFORM THE DUTI ES AND OBLIGATIONS AS MENTIONED IN THE AGREEMENT. THE REFERENCE TO 'STANDARDS/DOCUMENTS PR OCEDURES/PROCESS' WHICH THEMSELVES ARE SUBJECT TO CHANGES/MODIFICATIONS ACC ORDING TO RLIC PRESENT AND FUTURE BUSINESS REQUIREMENTS FROM TIME TO TIME OR ANY OTHE R PREVAILING LEGAL ENACTMENTS AND RULES, REGULATIONS, CIRCULARS ETC BRINGS TO FORE TH E INTRICATE, EXHAUSTIVE AND HIGH LEVEL OF KNOWLEDGE BASE THAT IS ESSENTIAL FOR SUSTAINING THE AGREEMENT WITH RUC. IN ADDITION, THE PART OF THE AGREEMENT SPECIFYING THAT 'THE CIA (THE APPELLANT) SHALL DISCUSS AND REVIEW THE PROGRESS AND STATUS OF THE CURRENT/ AND ALL ASS IGNMENTS ON A REGULAR BASIS AS AGREED AND IN ADDITION AS AND WHEN REQUIRED WITH RLIC', UN DERLINES THE FACT THAT THERE COULD NOT HAVE BEEN ANY SLIPPAGE IN THE QUALITY AND QUANTITY OF SERVICES THAT WERE BEING PROVIDED BY THE APPELLANT TO RUC BECAUSE THERE WAS ALMOST A REAL-TIME MONITORING OF THE SERVICES BEING PROVIDED BY THE APPELLANT. THE TWO IMPORTANT ASPECTS THAT EMERGE FROM THIS AGREEMENT ARE: 1. THE APPELLANT HAD TO PROVIDE A VARIETY OF VERY SPECIALIZED SERVICES TO RLIC AND FOR WHICH IT HAD TO MAINTAIN DATA BANK OF SPECIALIZED K NOWLEDGE NOT ONLY ABOUT THE MARKET WITH SPECIAL POTENTIAL TO ACCESS SUCH MARKET, THAT IS HAVE AN ENORMOUS VIRTUAL ARMY OF SPECIALIZED INDIVIDUALS WHO WOULD DO ACTUAL MARKET ACCESS ON BEHALF OF THE APPELLANT. 2. THAT THE LEVEL OF THE QUALITY OF THESE SERVICES HAD TO BE MAINTAINED AT TOP EFFICIENCY AT ALL TIMES. THESE TWO ASPECTS INDICATE THAT THE APPE LLANT WOULD EITHER HAVE HAD TO DEVELOP ITS OWN RESOURCES, WHICH, THROUGH EVEN A CURSORY PE RUSAL OF THE SAID AGREEMENT, CLEARLY SHOWS, WOULD TAKE AN ENORMOUS AMOUNT OF TIME, MONEY AND RESOURCES TO DEVELOP - IF THE APPELLANT WANTED TO DEVELOP THESE PROFICIENCIES IN- HOUSE. THE APPELLANT, FROM A STUDY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, HAS APPARE NTLY TAKEN AN ALTERNATIVE ROUTE BY SURRENDERING A PART OF ITS PROFITS WHILE ENSURING A RAPID GROWTH OF THIS BUSINESS, THUS OFF- SETTING THE DEPRESSION IN PROFITS. THE APPELLANT HA S HIRED THE SERVICES OF A CONCERN THAT HAS SPECIALIZED IN THE SERVICES THAT WERE REQUIRED BY THE APPELLANT FOR THE IMPLEMENTATION OF THE AGREEMENT WITH RUC. THIS SERVICE PROVIDER WA S GOLDEN TRUST FINANCIAL SERVICES (GTFS). THE APPELLANT ENTERED INTO AN AGREEMENT WIT H GTFS AND SACRIFICED A LARGE PART M/S HEIGHT INSURANCE SERVICES LTD. ITA NO.2163/KOL/2017 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 5 55 5 OF ITS PROFITS, GAINING IN THE BARGAIN A SIMPLIFICA TION OF ITS OWN OPERATIONS, THEREBY A CUT DOWN ON ITS OPERATIONAL COSTS AND SAVING ON MONEY A S WELL AS TIME THAT WOULD HAVE BEEN SPENT ON THE DEVELOPMENT OF THESE PROFICIENCIES. TH E APPELLANT WAS ABLE TO ACHIEVE A VERY RAPID GROWTH IN CONSEQUENCE. THIS IS REFLECTED AS U NDER: BUSINESS PERFORMANCE AND COMMISSION EARNED BY THE A PPELLANT COMPANY FOR THE FINANCIAL YEARS 2008-09 2009-10 AND 2010-11 FINANCIAL YEAR PREMIUMS COLLECTED (RS. IN CRORE) COMMISSION EARNED (RS IN CRORE) 2008-09 326.52 (FRESH PREMIUM) 101.54 2009-10 755.48 (FIRST AND RENEWAL) 204.26 2010-11 1114.56 (FRESH AND RENEWAL) 212.25 TOTAL 2196.56 518.05 IN PROVIDING A JUSTIFICATION FOR APPOINTING GTFS AS ITS SERVICE PROVIDER FOR PROVIDING THE APPELLANT COMPANY WITH SUPPORT IN ITS ENTIRE OPERAT IONS, THE APPELLANT HAD STATED THAT THE APPELLANT, HISL, COULD ACHIEVE SUCH SPECTACULAR RES ULTS IN SUCH A SHORT PERIOD ONLY THROUGH THE EFFORTS OF THE NETWORK AND INFRASTRUCTU RE OF GTFS AND THE SPECIFIED PERSONS AND OTHER BACK OFFICE ORGANIZATION OF HISL. AN EXAMINATION OF THE MATERIAL ON RECORD BRINGS TO FORE THE FACT THAT GTFS WAS PROVIDING THE FOLLOWING SERVICES TO THE APPELLANT COMPANY: (I) GTFS HAS NETWORK OF SEVERAL LAC PEOPLE IN ITS D IFFERENT LOCATIONS THROUGHOUT INDIA. IT IS THESE PEOPLE WHO WERE IN THE FIELD OF IDENTIFICA TION OF THE PROSPECTS OF INSURANCE WHO WOULD LIKE TO SECURE INSURANCE ON THEIR LIVES. FOR PROCURING PROSPECTS OF THESE INSURANCE THESE NETWORK PEOPLE ARE ENTITLED TO INCENTIVES OTH ER EXPENSES FROM THE ASSESSEE COMPANY HISL. IT APPARENT FROM THIS THAT THE APPELLANT WOULD HAVE HAD TO GO TO CONSIDERABLE EXPENSE AS WELL AS INVESTMENT IN TIME IF IT WISHED TO DEVELOP AN ALL INDIA NETWORK OF SPECIALIZED PERSONS WHOSE NUMBER RAN IN LACS. EVEN THEN, IT WAS NOT GUARANTEED THAT SUCH AN EFFICIENT NETWORK COULD HAVE BEEN CREATED BY THE AP PELLANT COMPANY. IN THE MEANTIME, THE APPELLANT HAD ALREADY ENTERED INTO AN AGREEMENT WIT H ITS PRINCIPAL - RLIC AND WOULD BE HARD-PRESSED TO PROVIDE COMPETITIVE SERVICES TO THE PRINCIPAL. IT COULD THEREFORE HARDLY BE EXPECTED THAT IT WOULD RISK WASTING TIME AND MONEY IN THE DEVELOPMENT OF SUCH RESOURCES ON ITS OWN AND JEOPARDIZING ITS CONTRACT WITH THE P RINCIPALS. IT INSTEAD HIRED THE SERVICES OF GTFS THAT WAS ALREADY THERE WITH THE REQUIRED FR AMEWORK CONSTITUTING .INFRASTRUCTURE, MAN POWER, EXPERTISE AND MARKET REACH TO PROVIDE TH E SAID SERVICES FOR A FEE. GTFS, IT IS SUBMITTED BY THE APPELLANT, WAS LIABLE TO PAY THE INCENTIVES/OTHER EXPENSES TO THE NETWORK ON BEHALF OF HISL. AT THE TIME OF PAYME NTS MODEL AMOUNTS CREDITED TO THE INDIVIDUAL NETWORK MEMBERS, GTFS HAS DULY DEDUCTED AND DEPOSITED TAX. HISL IN TURN REIMBURSES GTFS THESE EXPENSES, I.E., INCENTIVES/OT HER EXPENSES PAID TO THE NETWORK BY THE GTFS ON BEHALF OF HISL. IN ADDITION TO THE ABOVE, IT WAS SUBMITTED BY THE A PPELLANT THAT GTFS WAS PROVIDING SERVICES THROUGH, (II) 268 BRANCHES AND OTHER INFRASTRUCTURE (INCLUDI NG INFORMATION TECHNOLOGY, I.E, SOFTWARE, HARDWARE, NETWORKING ETC.) THESE BRANCHES AND OTHER INFRASTRUCTURE WERE PROVIDED AT THE DISPOSAL OF THE APPELLANT COMPANY, HISL, BY GTFS. NOW, IT IS CLEAR THAT GTFS WAS PROVIDING CRUCIAL SU PPORT TO THE APPELLANT COMPANY FOR THE SERVICES THAT THE LATTER HAD TO PROVIDE TO RUC. FOR WHICH, IN TURN, THE APPELLANT COMPANY WAS PAID COMMISSION. AGAINST THIS CRUCIAL, SPECIALIZED AND EXTENSIVE SUPPORT GTFS WAS ENTITLED TO REMUNERATION/SERVICE CHARGES F ROM HISL ON TWO COUNTS FOR PROVIDING THE ABOVE MENTIONED TWO SERVICES: M/S HEIGHT INSURANCE SERVICES LTD. ITA NO.2163/KOL/2017 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 6 66 6 (I) ONE FOR PERFORMING ITS OBLIGATIONS AS PURE AGENT (II) (II) ANOTHER FOR MAKING AVAILABLE NECESSARY SERVICE THROUGH THE NECESSARY INFRASTRUCTURE TO HISL. NOW, THE MODUS OPERANDI OF THIS ENTIRE BUSINESS PRO CESS WAS AS FOLLOWS: PAYMENT FLOW FOR THE ENTIRE BUSINESS PROCESS THE WORK FLOW IN THIS CASE IS THAT THE PRINCIPAL, R UC, GETS ITS BUSINESS FROM HISL. IN ORDER TO ENSURE THE EFFICIENCY OF WORKS BY HISL, TH E LATTER EMPLOYS THE SERVICES OF GTFS. GTFS, IN TURN GETS THE-WORK DONE THROUGH THE INTERV ENTION OF I. ITS SKILLS, II. INFRASTRUCTURE AND III. THE PERSONS WHO ARE PART OF NETWORK. IT IS THE PERS ONS WHO CONSTITUTE THE NET- WORK WHO OBTAIN THE ACTUAL BUSINESS THROUGH CLIENTS WHO ARE INTEREST IN BUYING INSURANCE POLICIES. THE PAYMENT FLOW FOR THIS ENTIRE BUSINESS SCHEME IS THAT RLIC MAKES THE PAYMENTS OF COMMISSION TO THE APPELLANT COMPANY. THEREAFTER, TH E APPELLANT COMPANY (HEIGHT INSURANCE) MAKES THREE KINDS OF PAYMENTS TO GTFS. T HESE ARE, I. COMMISSION FOR SERVING AS A PURE AGENT II. PAYMENT FOR MAKING AVAILABLE ITS INFRASTRUCTURE III. REIMBURSEMENT OF COMMISSION/INCENTIVES/OTHER EXPENS ES DISBURSED TO MEMBERS OF NETWORK FOR OBTAINING BUSINESS. A REGARDS THE THIRD ITEMS, IT IS FOUND THAT DURING THE FINANCIAL 2010-11 GTFS PAID INCENTIVES / OTHER EXPENSES RS.128,33,65,793/- TO T HE NETWORK PEOPLE FOR PROCURING PROSPECTS OF INSURANCE WHO WOULD LIKE TO SECURE INS URANCE ON THEIR LIVES, HISL, IN TURN MADE REIMBURSEMENT OF THIS AMOUNT OF RS 128,33,65,7 93/- TO GTFS AFTER DEDUCTION OF TAX AT SOURCE. THE AO HAS NOT DOUBTED THESE PAYMENTS IN HIS ASSESSMENT ORDER. COMING TO THE FIRST TWO ITEMS, WE FIND THAT ON THE BASIS OF ACHIEVEMENT OF THE PHENOMENAL GROWTH IN ITS BUSINESS, HISL HAS ENTERED INTO AN AD DENDUM AGREEMENT ON 16.4.2009 WITH GTFS TO BE EFFECTIVE FROM 1.4.2009 FOR THE FINANCIA L YEAR 2009-10. A COPY OF THIS AGREEMENT WAS PRODUCED BY THE APPELLANT, BOTH, DURI NG ASSESSMENT AS WELL AS APPEAL PROCEEDINGS. IN THIS AGREEMENT ON 16.4.2009, THE RE MUNERATION/SERVICE CHARGES ,TO BE PAID TO GTFS BY HISL WERE FIXED AS FOLLOWS: (I) RS 60,00,00,000/- (RS SIXTY CRORE) AND APPLICAB LE ALL TAXES FOR PERFORMING THE FUNCTION AS PURE AGENT - WHICH IS ITEM NUMBER 1 ABOVE. (II) RS 6,00,00,000/- (RS SIX CRORE) AND APPLICABLE ALL TAXES FOR MAKING AVAILABLE NECESSARY SERVICES THROUGH INFRASTRUCTURE. THIS IS FOR ITEM NUMBER 2 ABOVE. THE APPELLANT INFORMED DURING APPEAL PROCEEDINGS AS WELL AS DURING ASSESSMENT PROCEEDINGS, THAT AFTER TAKING INTO ACCOUNT ALL THE CIRCUMSTANCES OF THE BUSINESS, THIS ADDENDUM AGREEMENT WITH GTFS WAS AGAIN REVISED ON 9 .4.2010, TO BE EFFECTIVE FROM 1.4.2010, FOR THE FINANCIAL YEAR 2010-11. IN THIS A GREEMENT, ON 1.4.2010 THE REMUNERATION /SERVICE CHARGES TO BE PAID TO GTFS BY HISL WAS REVISED AS FOLLOWS: (I) RS 56,00,00,000/- (RUPEES FIFTY SIX CRORE) AND APPLICABLE ALL TAXES FOR PERFORMING THE FUNCTION AS PURE AGENT. (III) RS 4,00,00,000/- (RS FOUR CRORE) AND APPLICAB LE ALL TAXES FOR MAKING AVAILABLE NECESSARY SERVICES THROUGH INFRASTRUCTURE. M/S HEIGHT INSURANCE SERVICES LTD. ITA NO.2163/KOL/2017 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 7 77 7 AT THE RELEVANT TIME THE APPLICABLE RATE OF SERVICE TAX ON SERVICE TAX CHARGES WAS 10.3%. ACCORDINGLY THE ASSESSEE COMPANY HAS PAID THE FOLLO WING AMOUNTS TO GTFS: (I) RS 61,76,80,000 (RUPEES SIXTY ONE CRORE SEVENTY SIX LACS EIGHTY THOUSAND., I.E. RS 56,00,00,000/- PLUS SERVICE TAX OF RS.5,76,80,000/- (BY APPLYING THE SERVICE TAX RATE OF 10.3% ON RS 56,00,00,000) FOR PERFORMING TH E FUNCTIONS AS PURE AGENT. (II) RS 4,41,20,000/- (RS FOUR CRORE FORTY ONE LACS TWEN TY THOUSAND) I.E. 4,00,00,000/- PLUS SERVICE TAX OF RS 41,20,000/- (B Y APPLYING SE RVICE TAX RATE OF 10.3% ON 4,00,00,000/-) FOR MAKING AVAILABLE NECESSARY SERVI CES THROUGH THE INFRASTRUCTURE. IN THIS WAY THE ASSESSEE COMPANY AID PAID TO GTFS I N TOTAL RS 66,18,00,000/- (RUPEES SIXTY SIX CRORE EIGHTEEN LACS) I.E. RS 61,7 6,80,00/- (SIXTY ONE CRORE SEVENTY SIX LACS EIGHTY THOUSAND) FOR PERFORMING TH E FUNCTIONS AS PURE AGENT PLUS 4,41,20,000/- FOR MAKING AVAILABLE NECESSARY SERVIC ES THROUGH INFRASTRUCTURE. GTFS, BEING AN INDEPENDENT ENTITY, HAS FILED ITS OW N RETURNS OF INCOME WHERE IT HAS SHOWN THESE RECEIPTS AND PAYMENTS. IT HAS ALSO PROVIDED A CONFIRMATION DATED 28.6.16 OF THE PAYMENTS RECEIVED BY IT FROM THE APP ELLANT COMPANY. IN THIS IT CONFIRMS THAT IT HAD RECEIVED THE ABOVE SAID PAYMEN TS FOR THE ITEMS SO MENTIONED AND OFFERED IT FOR TAXATION IN ITS OWN RETURNS. THE TEXT OF THE SAID LETTER IS REPRODUCED BELOW: ... .. REGARDING SERVICES CHARGES OF RS.66.18 CROR ES RECEIVED FROM YOU DURING THE F.Y 2010-2011 AND ITS TAXABILITY IN OUR HAND WE SUB MIT AS FOLLOWS: THE SAID SERVICE CHARGES OF RS.66.18 CRORES WAS DUL Y TAKEN AS INCOME IN OUR BOOKS AND OFFERED FOR TAXATION FOR THE RELEVANT ASS ESSMENT YEAR. THE SAID SERVICE CHARGES OF 66.18 CRORES IS DULY INCLUDED IN OUR INC OME FROM OPERATION OF RS.348.62 CRORES FOR THE FINANCIAL YEAR 2010-2011. PHOTOCOPY OF PROFIT & LOSS ACCOUNT OF GTFS FOR THE YEAR ENDED 31.03.2011, ITR AND ACKNOWLEDGMENT OF ASSESSMENT YEAR 2011-12 AND C OPY OF THE ASSESSMENT ORDER U/S. 143(3) OF THE IT ACT, 1961 FOR THE A.Y 2 011-2012 IS ENCLOSED HEREWITH IN SUPPORT OF OUR CONTENTION. THESE WERE PRODUCED DURING APPEAL PROCEEDINGS BY TH E APPELLANT, IN RESPONSE TO A QUERY AT THE APPELLATE STAGE IF SUCH AMOUNTS HAD BEEN OFFERED FOR TAXATION BY GTFS OR NOT. THIS ISSUE HAD NOT BEEN RAISED BY THE AO DURING ASSESSMENT PROCEEDINGS. IN ANY CASE THE SAID RETURNS WERE PART OF THE RECORD AND IF NEEDED COULD HAVE BEEN CONFIRMED FROM THE RECORDS OF THE D EPARTMENT ITSELF. IT WAS ALSO POINTED OUT BY THE APPELLANT THAT THE CASE OF GTFS WAS SCRUTINIZED U/S 143(3) FOR THE AY 2011-12, WHICH WAS THE INSTANT ASSESSMENT YE AR UNDER THIS APPEAL. HE HAS ALSO PROVIDED A COPY OF THE SCRUTINY ORDER OF GTFS FOR THE AY 2011-12 WHEREIN IT IS CLEARLY SHOWN THAT SOME ADDITIONS WERE MADE BY T HE AO, BUT THE RECEIPTS OR TRANSACTIONS WITH RESPECT TO ITS BUSINESS WITH HISL WERE ACCEPTED AS SUCH. THE APPELLANT HAS CONTENDED THAT THE DEPARTMENT THUS HA S ACCEPTED THE TRANSACTIONS OUTLINED ABOVE WHEN IT SCRUTINIZED THE ACCOUNTS OF GTFS, BUT SURPRISINGLY, HAD DOUBTED THE VERY SAME TRANSACTIONS IN THE HANDS OF THE PRESENT APPELLANT. HE HAS STATED THAT IT IS STRANGE THAT WHILE THE AMOUNTS, W HEN SHOWN AS RECEIPTS IN THE HANDS OF RECIPIENT FOR SERVICE RENDERED, ARE TAXED READILY BY THE DEPARTMENT AS HAVING BEEN RECEIVED FROM THE PAYER (THE APPELLANT) ; THE SAME AMOUNTS, WHEN CLAIMED BY THE SAME PAYER AS EXPENSES FOR THE SAME SERVICES ARE NOT ALLOWED. AFTER DUE CONSIDERATION OF THIS ASPECT, I WOULD TEN D TO AGREE WITH APPELLANT ON THIS COUNT. HOWEVER, THE OTHER ASPECTS ALSO NEED FU RTHER EXAMINATION. AFTER EXAMINING THE MATERIAL ON RECORD, I FIND THAT THE AO HAS NOWHERE DOUBTED ANY OF THE INDIVIDUAL CLAIMS OF EXPENSES. HE HAS NO T BEEN ABLE TO BRING ON RECORD, ANYTHING FROM THE BOOKS OR FROM THE MATERIAL ON REC ORD THAT THE SAID EXPENSES M/S HEIGHT INSURANCE SERVICES LTD. ITA NO.2163/KOL/2017 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 8 88 8 WERE BOGUS IN NATURE. THE EASIEST WAY TO CHECK THE BONA FIDES OF THESE EXPENSES WOULD HAVE BEEN TO EXAMINE IF THE PAYMENTS MADE TO GTFS WERE BONA FIDE BUSINESS EX-PENSES OR NOT. BUT THE AO HAS NOT DOUBT ED THESE EXPENSES IN TERMS OF THE ITEM 3 OF THE THREE TYPES OF PAYMENTS TO GTFS L ISTED ABOVE. THE AO HAS NOT DOUBTED THAT PAYMENTS WERE MADE TO THE TUNE OF RS 1 28 CRORE ODD ON ACCOUNT OF REIMBURSEMENTS OF PAYMENTS MADE BY GTFS ON ACCOUNT OF INCENTIVES/ OTHER EXPENSES ETC. IF THERE WAS ANY DOUBT AS TO THESE PA YMENTS OR THE PURPOSE OF THE SAID PAYMENTS OR THEIR QUANTUM BY GTFS TO NETWORK, THEN THIS COULD EASILY HAVE BEEN VERIFIED FROM THE BOOKS OF GTFS, WHICH WAS, DU RING THE SAME PERIOD, BEING SCRUTINIZED FOR THE SAME ASSESSMENT YEAR IN THE SAM E CITY OF KOLKATA. THE AO HOWEVER EVIDENTLY FOUND NO NEED TO QUESTION THESE P AYMENTS BY GTFS TO NETWORK OR REIMBURSEMENTS THEREOF BY THE APPELLANT COMPANY. IN THESE CIRCUMSTANCES, WE ARE LEFT WITH THE SCENARIO OF THE AO ACCEPTING A PA RT OF THE WORKING RELATIONSHIP BETWEEN THE APPELLANT COMPANY AND GTFS AND NOT ACCE PTING THE OTHER. THE FACTS THAT EMERGE FROM THIS CASE ARE THAT THE A PPELLANT COMPANY HAS A WORKING RELATIONSHIP WITH GTFS, THE TERMS OF WHICH ARE GOVERNED BY THE ABOVE SAID AGREEMENTS BETWEEN THE TWO COMPANIES. THE FACT ALSO REMAINS THAT HISL HAS BEEN ABLE TO ESTABLISH ITSELF IN THE FIELD OF LIFE INSURANCE THROUGH THE HARD WORK AND EFFORTS PUT IN BY THE LARGE NUMBER OF PERSONS F ORMING THE NETWORK AND THE FACILITIES PROVIDED BY GTFS'S VARIOUS BRANCH OFFICE S. THE SERVICE CHARGES AND REIMBURSEMENT OF VARIOUS EXPENSES THAT HAVE BEEN IN CURRED BY THE ASSESSEE COMPANY OF GTFS WERE PURELY FROM BUSINESS CONSIDERA TIONS AND THE SAME REPRESENTS EXPENDITURE INCURRED WHOLLY AND EXCLUSIV ELY FOR THE PURPOSE OF BUSINESS OF HISL. DEDUCTIONS THEREOF ARE ALLOWABLE IN ACCORDANCE WITH THE PROVISIONS OF THE INCOME TAX ACT 1961 WHILE DETERMI NING THE INCOME FROM BUSINESS OF HISL COMING THE TO THE NEXT PART, THE PAYMENTS MADE BY T HE APPELLANT TO GTFS. WE FIND THAT IN THE RELATIONSHIP OF THE APPELLANT WITH GTFS, WE HAVE ACCEPTED THAT THE APPELLANT DID REIMBURSE GTFS FOR THE EXPENSES THAT GTFS HAD INCURRED ON NETWORK ON ACCOUNT OF DISBURSEMENT OF INCENTIVES/ O THER EXPENSES. BUT GTFS, WHICH HAS ADMITTEDLY DISBURSED THESE AMOUNTS AMONGS T THE NETWORK PERSONS, WOULD THEN BE LEFT WITH NOTHING FOR ITSELF. GTFS IS A GIGANTIC CONCERN WITH 268 BRANCHES AND A HUGE AMOUNT OF INFRASTRUCTURE, INCLU DING HARDWARE AND SOFTWARE, MENTION OF WHICH HAS BEEN MADE IN THE AGREEMENT BET WEEN GTFS AND THE APPELLANT, AS MENTIONED SUPRA. IT HAS CLEARLY BEEN ACCEPTED AS UNDISPUTED THAT GTFS WAS INDEED PROVIDING COMPREHENSIVE BUSINESS SU PPORT TO THE APPELLANT WHICH WAS THE SOLE FACTOR RESPONSIBLE FOR THE EXPON ENTIAL GROWTH IN THE LATTER'S BUSINESS. IT IS ONLY LOGICAL, IN TERMS OF BUSINESS CONSIDERATIONS TO PRESUME THAT FOR THESE SERVICES, GTFS WOULD BEEN CHARGING SOMETHING. IT WOULD BE RECEIPTS FROM THESE CHARGES THAT WOULD ENABLE GTFS TO MAINTAIN IT S LARGE NUMBER OF BRANCHES, INFRASTRUCTURE, INFORMATION AND KNOWLEDGE BASE AS W ELL AS SUPPORT-MECHANISM FOR ITS NETWORK PERSONS. IF IT DISTRIBUTED ALL ITS RECE IPTS TO THE NETWORK THEN ALL THIS WOULD NOT BE POSSIBLE. IT IS EVIDENT FROM THE ABOVE DISCUSSIONS AS WELL AS THE MATERIAL ON RECORD, IN ADDITION, OF COURSE, FROM CO NSIDERATIONS OF BUSINESS EXPEDIENCY, THAT GTFS WAS RECEIVING THREE I. COMMISSION FOR SERVING AS A PURE AGENT II. PAYMENT FOR MAKING AVAILABLE ITS INFRASTRUCTURE III. REIMBURSEMENT OF COMMISSION/INCENTIVES/OTHER EXPENS ES DISBURSED TO MEMBERS OF NETWORK FOR OBTAINING BUSINESS. THIS WAS ON ACCOUNT OF THE THREE KINDS OF SERVICES THAT IT WAS ADMITTEDLY PROVIDING, THAT IS, BUSINESS INTERVENTION THROUGH T HE SUPPLY OF M/S HEIGHT INSURANCE SERVICES LTD. ITA NO.2163/KOL/2017 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 9 99 9 I. ITS SKILLS, II. ITS INFRASTRUCTURE AND III. PROVIDING OF THE PERSONS WHO ARE PART OF NETWO RK. IT IS THE PERSONS WHO CONSTITUTE THE NETWORK WHO OBTAIN THE ACTUAL BUSINE SS THROUGH CLIENTS WHO ARE INTERESTED IN BUYING INSURANCE POLICIES. THE PAYMENT IN RESPECT OF THE FIRST TWO ITEMS ARE O BVIOUSLY GOVERNED BY THE AGREEMENT AND THEIR ADDENDA. THE FIRST ADDENDUM INC REASED THE AMOUNT OF REMUNERATION ON ACCOUNT OF THE PHENOMENAL GROWTH PO STED BY THE APPELLANT COMPANY. THEREAFTER, THIS WAS MARGINALLY DECREASED TO THE FIGURE AT WHICH IT FINALLY STOOD. IT IS SETTLED LAW THAT ASSESSING AUT HORITIES' CANNOT DICTATE THE QUANTUM OF PAYMENTS THAT ARE TO BE MADE ON SUCH COU NTS. WHAT CAN BE VERIFIED IS THE SAID PAYMENT WERE FOR THE PURPOSE OF BUSINESS O R NOT. WHAT CAN FURTHER BEEN VERIFIED IS WHETHER THE PAYMENTS WERE ACTUALLY MADE OR NOT AND WHETHER THE SAID PAYMENTS HAVE BEEN BROUGHT TO TAX BY THE RECIPIENT OR 'HOT. WE FIND, UPON EXAMINATION OF THE FACTS OF THE CASE AND THE MATERI AL ON RECORD AS WELL AS FOLLOWING THE DISCUSSIONS ABOVE, THAT THE SAID PAYM ENTS HAVE BEEN VERIFIED, ON ALL THE ABOVE COUNTS. THE AO HAS NOT DENIED THAT GTFS W AS INDEED PROVIDING THE SUPPORT THAT HAS BEEN CLAIMED TO HAVE BEEN PROVIDED , TO THE APPELLANT.' IT HAS NOWHERE BEEN DOUBTED THAT THE NETWORK WAS MADE AVAI LABLE TO THE APPELLANT BY GTFS. IT HAS NOT BEEN ESTABLISHED BY THE AO THAT GT FS WAS NOT PROVIDING THE INFRASTRUCTURAL FACILITIES, INCLUDING KNOWLEDGE BAS E, HARDWARE AND SOFTWARE TO THE APPELLANT AS HAS BEEN CLAIMED BY THE APPELLANT. THE FACT OF THE PHENOMENAL GROWTH IN THE APPELLANT'S BUSINESS HAS NOT BEEN DOU BTED, NOR HAS IT BEEN SUGGESTED THAT THIS GROWTH COULD HAVE BEEN, OR WAS INDEED, OBTAINED THROUGH ANY OTHER MEANS THAN THROUGH THE SUPPORT OF GTFS. IN TH ESE CIRCUMSTANCES, IT IS DIFFICULT TO ENDORSE THE CONCLUSION OF THE AO THAT THE SAID PAYMENTS WERE BOGUS. IT IS ESTABLISHED LAW AT THE LEVEL OF THE APEX COUR T THAT WHAT IS APPARENT IS REAL AND THAT IF ANYTHING TO THE CONTRARY IS TO BE PRESUMED THEN THE ONUS FOR ESTABLISHING THIS LIES UPON THE PERSON MAKING THIS, ASSERTION. I N THIS CASE, THE, FACT IS THAT THE AO HAS NOT DOUBTED THE QUANTUM OF SUCH EXPENSES OR THE FACT THAT SUCH PAYMENTS WERE INDEED MADE. HE HAS NOT DOUBTED THE FACT THAT SERVICES WERE ALSO PROVIDED BY GTFS TO THE APPELLANT. WHAT HE HAS TRIED TO SUGG EST IS THAT THESE PAYMENTS WERE MADE AS A PART OF AN ARTIFICIAL CONSTRUCT TO D IVERT THE PROFITS OF ONE COMPANY INTO ANOTHER - PRESUMABLY THE PROFITS OF THE APPELL ANT INTO GTFS. THE OTHER PRESUMPTION BY THE AO IS THAT THE TWO ENTITIES, THE APPELLANT COMPANY AND GTFS WERE PART OF THE SAME GROUP AND THAT GTFS WAS EXCLU SIVELY AND SOLELY PROVIDING SERVICES TO THE APPELLANT. BOTH THESE ASSERTIONS HA VE BEEN MADE BY THE AO, AND THEREFORE THE ON ONUS FOR ESTABLISHING THEIR VERACI TY LAY WITH THE AO, SINCE THERE WAS NOTHING AS PER RECORD TO SUPPORT EITHER OF THES E ASSUMPTIONS. THE ASSUMPTION OF SUPPRESSION OF SUPPRESSION OF PROFITS BY POSTING OF EXPENSES IS SOMETHING THAT COULD HAVE BEEN BUTTRESSED BY EXAMINING THE AFFAIRS OF GTFS ALSO WHICH BEING SCRUTINIZED DURING THE SAME PERIOD AS DISCUSSED EAR LIER. THIS HAS NOT BEEN DONE. THE AO HAS MERELY MADE A CURSORY MENTION OF A POSSI BILITY THAT THE TWO ENTITIES, THAT IS, THE APPELLANT AND GTFS, BELONGED THE SAME GROUP AND THAT GTFS WAS WORKING EXCLUSIVELY FOR THE APPELLANT. THE AO HAS N OT BROUGHT ON RECORD ANY EVIDENCE TO SUPPORT THIS ASSUMPTION, MUCH LESS ESTA BLISH IT BEYOND DOUBT. IN THESE CIRCUMSTANCES, IT IS DIFFICULT TO AGREE WITH THE FI NDINGS OF THE AO ON THIS COUNT ALSO. EXAMINATION OF THE RELEVANT MATERIAL ON RECOR D BRINGS FORTH THE FOLLOWING ASPECTS IN RELATION TO THE AO'S SUSPICION THAT THE TWO CONCERNS, THE APPELLANT, AND GTFS WERE IN REALITY SISTER CONCERNS: M/S HEIGHT INSURANCE SERVICES LTD. ITA NO.2163/KOL/2017 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 1 11 10 00 0 THAT GTFS DID NOT APPEAR TO BE A GROUP COMPANY OF H SIL. THE CORPORATE OFFICE OF BOTH THE COMPANIES WAS AT DIFFERENT POSTAL ADDRE SSES. BOTH THE COMPANIES HAD DIFFERENT DIRECTORS, SHAREHOLDERS AND PARTNERS AND NONE OF THESE BEING COMMON FOR BOTH THE ENTITIES. DETAILS OF THE TWO ENTITIES IS AS BELOW: HEIGHT INSURANCE SERVICES LIMITED (HISL) IS A LIMIT ED COMPANY REGISTERED UNDER . COMPANIES ACT, 1956 HAVING REGISTERED OFFIC E AT 55, JATIN DAS ROAD, KOLKATA - 700029 AND GOLDEN TRUST FINANCIAL SERVICE S (GTFS), IS A PARTNERSHIP FIRM DULY CONSTITUTED UNDER THE INDIAN PARTNERSHIP ACT, 1932 HAVING ITS PRINCIPAL PLACE OF BUSINESS AT 16, R. N. MUKHERJEE ROAD, KOLK ATA - 700 001. NAMES OF THE DIRECTORS OF HEIGHT INSURANCE SERVICES LIMITED AS ON 31.03.2011 ARE AS FOLLOWS: . A) SUMAN KUMAR DATTA B) SUBRATA MAJUMDER C) ASIS KUMAR SAHA NAMES OF THE SHARE HOLDERS OF HEIGHT INSURANCE SERV ICES LIMITED AS ON 31.03.2011 ARE AS FOLLOWS: A) SUMAN KUMAR DATTA B) JAYANTA SAHA C) NEEPA MAJUMDER D) TAPAS CHAKRABORTY E) DILIP BARAN SA HA F) INDRANIL GHOSH IN CONTRAST, THE NAMES OF THE PARTNERS OF GOLDEN TR UST FINANCIAL SERVICES AS ON 31.03.2011 ARE AS FOLLOWS: A) BHABESH MAJUMDER .' B) ASHIM SENGUPTA IT IS EVIDENT FROM THE ABOVE PARTICULARS THAT THE A BOVE TWO CONCERNS HISL & GTFS ARE NOT OWNED OR CONTROLLED BY THE SAME ENTITY OR PERSON. NONE OF THE SHARE HOLDERS AND DIRECTORS OF HISL, IS WAS FOUND, HAD ANY STAKE AND/OR CONTROL OVER THE AFFAIRS OF GTFS AND PARTNER S OF GTFS DID NOT HAVE ANY STAKE AND/OR CONTROL OVER THE AFFAIRS OF HISL. BETW EEN HISL AND GTFS THERE SEEMED TO EXIST ONLY A BUSINESS RELATION. IN THE LI GHT OF THE ABOVE FINDINGS, THEY CAN IN NO WAY BE SAID TO BE GROUP CONCERNS. GOING FURTHER, AND WITHOUT PREJUDICE TO THE ABOVE D ISCUSSIONS AND FINDINGS, EVEN IF FOR THE MOMENT IT IS ASSUMED THAT THE APPELLANT COMPANY AND GTFS BELONGED TO THE SAME GROUP AND THAT THE LATTER WORKED SOLELY AN D EXCLUSIVELY FOR THE APPELLANT COMPANY - IT MUST BE REALIZED THAT THERE ARE TWO AS SUMPTIONS THAT THE AO HAS MADE HERE AND THAT THERE IS NOTHING ON RECORD TO SU GGEST THAT THESE ASSUMPTIONS ARE SUPPORTED BY ANY EVIDENCE - EVEN IN THIS CASE, THE FURTHER ASSUMPTION OF THE AO THAT THE IMPUGNED EXPENSES WERE POSTED MERELY TO CUT DOWN ON THE PROFITS OF ONE COMPANY AND POST EXPENSES SOMEWHERE ELSE, HAS I TSELF TO BE ESTABLISHED THROUGH COGENT REASONING AND ACCOMPANYING EVIDENCE. IT HAS TO BE SHOWN AT LEAST THROUGH CIRCUMSTANTIAL DEDUCTION AND REASONING, THA T GTFS INDEED DID NOT PROVIDE ANY SERVICES FOR WHICH THE IMPUGNED PAYMENT S WERE PURPORTEDLY MADE. NOT ONLY HAS NO ATTEMPT BEEN MADE AT THE ASSESSMENT STAGE TO ESTABLISH THIS, BUT, IN FACT, SUCH A THING IS NOT BORNE OUT BY FACTS. TH E CIRCUMSTANCES, AS DISCUSSED ABOVE, HAVE SHOWN THAT THERE WAS AN AMOUNT' OF BUSI NESS EXPEDIENCY IN THE APPELLANT'S DECISION OF EMPLOYING THE SERVICES OF A SPECIALIZED AGENCY LIKE THE M/S HEIGHT INSURANCE SERVICES LTD. ITA NO.2163/KOL/2017 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 1 11 11 11 1 GTFS. THE AO HAS NOWHERE DOUBTED THE SPECIALIZED KN OWLEDGE BASE, THE INFRASTRUCTURE - SOFTWARE AS WELL AS HARDWARE - OR THE VIRTUAL ARMY OF SPECIALIZED MANPOWER AT THE DISPOSAL OF GTFS. IN FACT HE HAS AD MITTED THAT PAYMENTS TO THE NETWORK PERSONS WERE GENUINE. EVEN THEN IF THERE WA S ANY DOUBT THAT MIGHT HAVE EXISTED, IT WAS EASY TO VERIFY THESE FACTS FROM THE SCRUTINY PROCEEDINGS THAT WERE UNDERWAY FOR GTFS IN THE SAME PERIOD. NO DOUBT HAS BEEN RAISED AS TO THE ACTUAL EXPERTISE AVAILABLE WITH GTFS. THE PAYMENTS TO NETW ORK HAVE BEEN ACCEPTED ALONG WITH THE PURPOSE FOR WHICH THEY WERE MADE; TH E GROWTH OF BUSINESS AND THE CAUSE FOR IT HAVE BEEN ACCEPTED; THE NEXUS BETWEEN THE EXPERTISE AND THE SUPPORT PROVIDED BY GTFS AND THE GROWTH OF BUSINESS OF THE APPELLANT, AS CONTENDED BY THE APPELLANT HAS NOT BEEN DOUBTED, THE ACTUAL PAYM ENTS AND THE GENUINENESS OF THESE PAYMENTS HAS NOT BEEN DOUBTED. IN ADDITION, T HE APPELLANT'S CONTENTIONS THAT SUCH PAYMENTS WERE MADE AFTER THE DUE APPLICATION O F SERVICE TAX RATES AND AFTER THE DUE. DEDUCTION OF TAX HAS BEEN ACCEPTED BY THE AO. NO DEFECT HAS BEEN FOUND EITHER IN THE BOOKS OF THE APPELLANT OR, IN FACT, T HE BOOKS OF GTFS IN THIS CONNECTION. DURING APPEAL PROCEEDINGS ALSO THE APPE LLANT HAS PRODUCED THE BOOKS FOR EXAMINATION AND HAVE BEEN TEST CHECKED. I N , THESE CIRCUMSTANCES, IT IS DIFFICULT TO UPHOLD THE FINDINGS OF THE AO THAT THE SAID EXPENSES WERE BOGUS IN NATURE. COMING TO THE ISSUE RAISED BY THE AO THAT THE APPEL LANT HIMSELF WAS HAVING A LARGE STAFF OF ITS OWN ALONG WITH ESTABLISHMENTS-OF ITS OWN. THEN THERE WAS NO QUESTION OF OUTSOURCING THESE ASPECTS OF THE BUSINE SS ACTIVITIES OF THE APPELLANT TO GTFS. THIS COULD HAVE BEEN A VALID POINT IF IT COUL D HAVE BEEN ESTABLISHED BY THE AO THAT THE ENTIRE BUSINESS EXERCISES CLAIMED BY TH E APPELLANT TO HAVE BEEN DONE BY GTFS COULD HAVE BEEN CARRIED OUT BY THE APPELLAN T'S OWN STAFF. CONVERSELY, IT COULD BEEN ARGUED THAT THE EXPENSES CLAIMED BY THE APPELLANT SANS THE EXPENSES CLAIMED TO HAVE BEEN MADE OR ACCOUNT OF GTFS WERE E XCESSIVE OR NOT FOR BUSINESS PURPOSE. BUT THE AO HAS NOWHERE QUESTIONED THE' GENUINENESS OR REASONABLENESS OF EXPENSES CLAIMED BY THE APPELLANT ON ACCOUNT OF ITS OPERATIONS WITHIN APPELLANT COMPANY. AS REGARDS THIS ASPECT, T HE APPELLANT HAS EXPLAINED THAT DURING THE PERIOD OF BUSINESS OPERATIONS FOR T HE INSTANT YEAR, THE INCREASE IN THE NUMBER OF STAFF FOR THE APPELLANT COMPANY WAS F ROM 334 IN APRIL 2010 TO 704 IN MARCH 2011. AO IN HIS ORDER HAS MERELY OBSERVED THAT THE PAYMEN T TO GTFS ON ACCOUNT OF THE OF INFRASTRUCTURAL FACILITIES- AND SERVICE CHARGES WAS NOT JUSTIFIED BECAUSE THESE TIES COULD HAVE BEEN PERFORMED BY THE APPELLANT COM PANY ITSELF, WHICH HAD A LARGE WORK-FORCE OF ITS OWN. THE AO HAS NOT DELVED FURTHER INTO THIS ASPECT OF THE OPERATIONS OF THE APPELLANT COMPANY. HE HAS NOT BEE N ABLE TO SAY HOW AND WHERE THIS STAFF COULD HAVE BEEN EMPLOYED HAD THE SAID SE RVICES - SOURCED TO GTFS, NOT BEEN SOURCED OUT AND HAD BEEN PERFORMED BY THE APPE LLANT COMPANY ITSELF. IT HAS BEEN DISCUSSED EARLIER THAT GTFS HAD THE- NECESSARY EXPERTISE TO HANDLE THE KIND OF WORK THAT HAD TO BE PERFORMED BY THE APPELLANT C OMPANY UNDER ITS OBLIGATIONS CAST BY' THE AGREEMENT WITH RLIC. FURTHER THE AGREE MENT WITH GTFS PROVIDES THAT THE LATTER WOULD ALLOW THE APPELLANT COMPANY T O USE ITS OFFICES AS WELL AS THE INFRASTRUCTURE AVAILABLE WITHIN THESE OFFICES. THE APPELLANT, DURING APPEAL PROCEEDINGS HAS EXPLAINED THE REASON FOR INCREASE I N THE NUMBER OF PERSONNEL AND THE DEPLOYMENT OF SUCH STAFF BY SAYING THAT THAT PR EMIUM COLLECTION DURING THE ASSESSMENT YEAR 2011-12 WAS 1,114.56 CRORES AS COMP ARED TO RS.755.48 CRORES IN THE ASSESSMENT YEAR 2010-2011. WITH THE INCREASE IN VOLUME OF BUSINESS AND IN ANTICIPATION OF FURTHER INCREASE IN VOLUME OF BUSIN ESS, STAFF STRENGTH OF HISL WAS M/S HEIGHT INSURANCE SERVICES LTD. ITA NO.2163/KOL/2017 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 1 11 12 22 2 INCREASED TO 704 IN MARCH 2011 FROM 336 IN THE BEGI NNING OF THE FINANCIAL YEAR. HE HAS EXPLAINED THAT THE -EMPLOYEES OF HISL WERE P OSTED IN THE BRANCH OFFICES OF GTFS LOCATED AT VARIOUS PLACES ALL OVER INDIA. THEI R PRIMARY DUTY WAS TO EXPLAIN THE POLICY DETAILS TO THOSE WHO WERE INTENDING TO G ET INSURED AND GUIDE THEM IN THEIR INSURANCE REQUIREMENTS. THE EMPLOYEES OF HISL COLLECTED THE PROPOSAL FORMS AND PREMIUM FROM THOSE INTENDING TO GET INSUR ED AND PERFORM NECESSARY PRELIMINARY UNDERWRITING AND THEREAFTER SENT THE PR OPOSAL FORMS TO THE PRINCIPAL INSURANCE COMPANY RELIANCE LIFE INSURANCE COMPANY L IMITED (RLIC). THEY ALSO COLLECTED RENEWAL PREMIUM FROM THE INSURED. SO THE INCREASE IN THE NUMBER-OF EMPLOYEES IS JUSTIFIABLE AS IT WAS TO MAXIMIZE THE BUSINESS OF THE ASSESSEE. THE APPELLANT HAS SUBMITTED DETAILS OF THE EMPLOYEES AL ONG WITH THE DESIGNATIONS, PLACE OF POSTING AND THEIR GROSS SALARY ON PAGE NOS 158 TO 170 OF THE PAPER BOOK SUBMITTED ALONG WITH THE WRITTEN SUBMISSIONS. IT IS SEEN FROM THE DETAILS SUBMITTED THAT THE EMPLOYEES OF THE APPELLANT COMPANY WERE PO STED ALL OVER INDIA. IN MOST OF THE BRANCHES THERE WERE NOT MORE THAN ONE OR TWO EMPLOYEES THAT, IT IS EVIDENT, WOULD BE NECESSARY TO CARRY OUT THE BUSINESS OF EXP ANDING THE INSURANCE RELATED ACTIVITIES OF THE APPELLANT. THE EMPLOYEES SEEM TO BE PLACED ALL OVER INDIA EVEN IN REMOTE PLACES. IN KOLKATA SPECIFICALLY, THE PLACEME NT IS MORE CONCENTRATED AND THERE ARE BRANCHES EVEN IN VARIOUS LOCALITIES. THE DESIGNATIONS OF THE EMPLOYEES VARY FROM SR MANAGER TO EXECUTIVE WITH REMUNERATION RANGING FROM ABOUT FIVE TO SIX THOUSAND PER MONTH, GOING UP TO ALMOST 25,000/- PER MONTH. THESE DETAILS WERE AVAILABLE BEFORE THE AO. THE WOK OF THE APPELLANT WAS TO BE UNDERTAKEN WITH THE STRICTEST AMOUNT OF EFFICIENCY SINCE THE PRINCIPAL COMPANY WAS INTO REA LTIME MONITORING OF THE WORK OF THE APPELLANT AND THE STAFF DEPLOYED BY THE APPE LLANT HAD TO AT ALL TIMES BE AVAILABLE TO PROVIDE THEIR COOPERATION TO THE PERSO NNEL OF THE PRINCIPAL COMPANY. THIS WAS CLEARLY BROUGHT OUT BY THE CLAUSE OF THE A GREEMENT BETWEEN PLIC AND THE APPELLANT COMPANY AS REPRODUCED BELOW: CIA SHALL CO-OPERATE WITH THE REPRESENTATIVES OF RL IC TO ATTEND CIAS OFFICES DURING NORMAL BUSINESS HOURS TO REVIEW ANY ASPECT O F THE BUSINESS OF CIA IN SO FAR AS IT RELATES TO ITS WORK AS CIA OF RLIC, INCLU DING BOOKS AND RECORDS RELATING TO RLI AND ANY POLICYHOLDERS/. COIA SHALL PROVIDE A LL REQUIRED INFORMATION TO THE STAFF OF RLIC AUDITING/MONITORING THE BUSINESS ACTI VITIES OF CIA. THESE STRINGENT CONDITIONS THEMSELVES SHOW THAT THE RE HAD TO BE SUFFICIENT AND WELL TRAINED STAFF AVAILABLE AT ALL THE BRANCHES FR OM WHICH THE APPELLANT WAS CONDUCTING ITS BUSINESS. ALL THIS HAS NOT BEEN DOUB TED BY THEE AO. THE PAYMENT TO GTFS WAS MADE FOR SERVICE CHARGES, FOR THE PROVISIO N OF INFRASTRUCTURE AS WELL AS REIMBURSEMENT OF PAYMENTS MADE TO NETWORK PERSONS. IN THIS REGARD, THE OBSERVATIONS OF THE APEX COURT IN THE CASE OF (SASS ION J. DAVID & CO. (P) LTD. VS. CIT (1979) 118 ITR 261 (S), ARE PERTINENT WHERE IT HAS BEEN HELD THAT THE ASSESSEE WAS TO DECIDE WHETHER ANY EXPENDITURE SHOU LD BE INCURRED IN THE COURSE OF HIS OR ITS BUSINESS. SUCH EXPENDITURE MAY BE INC URRED VOLUNTARILY AND WITHOUT ANY NECESSITY AND IF IT IS INCURRED FOR PROMOTING T HE BUSINESS AND TO EARN PROFITS, THE ASSESSEE CAN CLAIM DEDUCTION EVEN THOUGH THERE WAS NO COMPELLING NECESSITY TO INCUR SUCH EXPENDITURE. FURTHER, WITHIN THE JURISDICTIONAL HIGH COURT, IN T HE CASE OF BIRLA COTTON SPINNING & WEAVING MILLS LTD. VS. CIT (1967) 64 ITR 568 (CAL ), IT WAS HELD THAT THOUGH THE MAIN OBJECTS OF BUSINESS IS TO EARN PROFITS, BU SINESS PURPOSES ARE WIDER THAN PROFIT-MAKING PURPOSES. BUSINESS EXPEDIENCY DOES NO T REQUIRE THAT EXPENSES SHOULD BE INCURRED ONLY FOR EARNING IMMEDIATE PROFI TS. EXPENSES INCURRED THOUGH M/S HEIGHT INSURANCE SERVICES LTD. ITA NO.2163/KOL/2017 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 1 11 13 33 3 NOT DIRECTLY RELATED TO EARNING OF INCOME, MAY BE A LLOWABLE DEDUCTIONS IF THEY ARE RELATED TO THE CARRYING ON OF THE BUSINESS. AS EARLY AS IN THE CASE OF CIT VS. DHANRAJGIRI RAJA NARASINGIRI (1973) 91 ITR 544 (SC) IT WAS HELD THAT IT WAS FOR THE ASSESSEE T O DECIDE HOW BEST TO PROTECT HAS OWN INTEREST. IT IS NOT OPEN TO INCOME-TAX DEPARTME NT TO PRESCRIBE WHAT EXPENDITURE. FURTHER IT WAS HELD THAT THE EXPRESSION COMMERCIAL EXPEDIENCY;IS NOT A TERM OF ART. IT MEANS EVERYTHING THAT SERVES TO PROMOTE COM MERCE AND INCLUDES EVERY MEANS SUITABLE TO THAT END. COMMERCIAL MEN ARE BEST EXPERIENCED IN COMMERCIAL EXPEDIENCY (INDIAN STEEL & WIRE PRODUCTS LTD. VS. C IT (1968) 69 ITR 379 (CAL). IN APPLYING THE TEST OF COMMERCIAL EXPEDIENCY FOR D ETERMINING WHETHER THE EXPENDITURE WAS WHOLLY AND EXCLUSIVELY LAID OUT FOR THE PURPOSES OF THE BUSINESS, REASONABLENESS OF THE EXPENDITURE HAS TO BE ADJUDGE D FROM THE POINT OF VIEW OF THE BUSINESSMAN AND NOT OF THE REVENUE (JAMSHEDPUR MOTOR ACCESSORIES STORES VS. CIT (1974) 95 ITR 664 (PAT); J.K. WOOLLLEN MANU FACTURERS VS CIT (1969) 72 ITR 612 ((SC). IN ORDER FOR AN EXPENDITURE TO BE AD MISSIBLE AS A DEDUCTION UNDER SECTION 10(2) (XV), IT IS NOT NECESSARY THAT THE PR IMARY MOTIVE IN INCURRING IT HAS TO BE DIRECTLY TO EARN INCOME THEREBY (SREE MEENAKSHI MILLS LTD. VS. CIT (1967) 63 ITR 207 (SC). THE SUPREME COURT IN CIT VS. KALYAYANJI MAVJI & CO. (1980) 122 ITR 49 (SC), HAS OBSERVED (ON PAGE 53) THAT ON ACCEPTED COMMERCI AL PRACTICE AND TRADING PRINCIPLES N ITEM OF BUSINESS EXPENDITURE MUST BE D EDUCTED IN ORDER TO ARRIVE AT THE TRUE FIGURE OF PROFITS AND GAINS FOR THE TAX PU RPOSES. IT IS THUS WITHIN THE PROVINCE OF THE ASSESSING OFF ICER TO EXAMINE WHETHER AN ITEM OF EXPENDITURE WAS FOR GENUINE OR NOT, IT IS ALSO W ITHIN THE AMBIT OF THE AOS POWERS AND DUTIES TO EXAMINE WHETHER THE SAID ITEMS WERE FOR BUSINESS PURPOSE OF THE ASSESSEE OR NOT. IT IS AT THIS POINT THAT THE F UNCTION OF THE AO STOPS. IT IS NOT WITHIN THE PURVIEW OF THE AOS POWERS OR FUNCTIONS TO EXAMINE THE MEASURE OF BUSINESS EXPEDIENCY OR THE QUANTUM OF THE ASSESSEE S EXPENDITURE IN RELATION TO THAT ITEM. THIS CAN BE EXAMINED IN SPECIAL CIRCUMST ANCES, WHEN THERE IS A SPECIAL CONNECTION BETWEEN THE ASSESSEE AND THE PERSON IN R ESPECT OF WHOM THE SAID ITEM OF EXPENDITURE HAD BEEN MADE. SAY, IF THE TWO CONCE RNS WERE SISTER CONCERNS. BUT THIS HAS TO BE ESTABLISHED BY THE AO. WE FIND THAT THIS IS NOT THE CASE HERE AS HAS BEEN DISCUSSED EARLIER. AS REGARDS THE DOUBT RAISED ON THE BONA FIDES OF TH E EXPENDITURE INCURRED BY THE APPELLANT COMPANY, ESPECIALLY IN RESPECT OF THE SER VICE CHARGES PAID TO GTFS, THE AO HAS RAISED THE ISSUE OF THEE BILL BEING RAISED O N THE LAST DAY OF THE FINANCIAL YEAR. ON THE LAST DAY OF THE FINANCIAL YEAR, GTFS H AD RAISED A BILL AMOUNTING TO RS.264720000/- ON THE APPELLANT. THIS WAS DOUBTED B Y THE AO BY STATING THAT THIS WAS NOT A GENUINE EXPENSE AND THAT THIS WAS TANTAMO UNT TO SIPHONING OF MONEY TO A GROUP CONCERN GTFS. IN THIS REGARD THE APPELLANT HAS SUBMITTED THAT HIS L ACCOUNTS FOR THE BILLS AS AND WHEN THEY ARE RAISED BY GTFS. OUT OF RS.600000000/- , TO BE PAID TO GTFS, BILLS MOUNTING TO RS.264720000/- ONLY WERE RAISED ON THE LAST DAY OF THE FINANCIAL YEAR. THE APPELLANT HAS STATED THAT GTFS IS ALSO AN INCOME TAX ASSESSEE AND THE SAME AMOUNT HAS ALSO BEEN CREDITED IN THE BOOKS OF GTFS AND OFFERED FOR TAXATIONS. THE APPELLANT HAS ENCLOSED THE INCOME TA X RETURN AND FINANCIAL STATEMENTS OF GTFS FOR THE ASSESSMENT YEAR 2011-12 FOR READY REFERENCE. THESE M/S HEIGHT INSURANCE SERVICES LTD. ITA NO.2163/KOL/2017 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 1 11 14 44 4 WERE PLACED ON PAGE NOS. 243 TO 245 OF THE PAPER BO OK ATTACHED WITH HIS WRITTEN SUBMISSIONS. IT WAS AS EARLY AS IN 1973 THAT THE APEX COURT, IN DAULAT RAM RAWAT MULL (1973) 87 ITR 349, LAID DOWN THE LAW FOR THE ONUS WHEN ANY PARTY TO A DISPUTE DISAGREED WITH WHATEVER WAS SHOWN AS APPARENT. THE SUPREME CO URT HELD THAT THE ONUS OF PROVING WHAT WAS APPARENT WAS NOT REAL LAY WITH THE PARTY THAT CLAIMED IT TO BE SO. THERE SHOULD BE SOME DIRECT NEXUS BETWEEN THE C ONCLUSIONS OF FACT ARRIVED AT BY THE AUTHORITIES CONCERNED AND THE PRIMARY FACTS UPON WHICH THE CONCLUSION IS BASED USE OF EXTRANEOUS OR IRRELEVANT MATERIAL IN A RRIVING AT THE CONCLUSION WOULD VITIATE THE CONCLUSION OF FACT, BECAUSE IT IS DIFFI CULT TO PREDICATE TO WHAT EXTENT, THE EXTRANEOUS AND IRRELEVANT MATERIAL HAS INFLUENCED T HE AUTHORITY IN ARRIVING AT THE CONCLUSION OF FACT. THEREFORE, IF A DECISION EXCLUDES OR IGNORES ADMISS IBLE OR RELEVANT EVIDENCE, TAKES INTO ACCOUNT INADMISSIBLE EVIDENCE, IRRELEVANT CONS IDERATION OR EXTRANEOUS MATERIALS, A SUBSTANTIAL QUESTION OF LAW ARISE. SIM ILARLY, WHEN AN AUTHORITY HAS PROCEEDED ON AN ASSUMPTION, WHICH IS ERRONEOUS IN L AW, A QUESTION OF LAW CAN ARISE. A FACTUAL DECISION IS PERVERSE IF THE AUTHORITY HAS ACTED WITHOUT ANY EVIDENCE OR ON VIEW OF FACTS, WHICH CANNOT BE REASONABLY ENTERT AINED. A PERVERSE FINDING IS ONE, IF IT IS ARRIVED AT WITHOUT ANY MATERIAL OR IF IT IS ARRIVED AT OR INFERENCE IS MADE ON MATERIAL, WHICH WOULD NOT HAVE BEEN ACCEPTE D OR RELIED UPON BY A REASONABLE PERSON CONVERSANT WITH THE LAW. IF THE FINDING IS BASED UPON SURMISES, CONJECTURES OR SUSPICION AND IS NOT RATIONALLY POSS IBLE. A FACTUAL CONCLUSION IS REGARDED AS PERVERSE WHEN NO PERSON DULY INSTRUCTED OR ACTING JUDICIALLY COLD ACT UPON THE RECORD BEFORE HIM, HAVE REACHED THE CONCLU SION ARRIVED AT BY THE TRIBUNAL/AUTHORITY [SEE CIT VERSUS S.P.JJAIN, (1973 ) 87 ITR 370 (SC)]. WE ARE CONSCIOUS THAT T HAS BEEN OBSERVED THAT THE ORDER MUST E READ AS A WHOLE TO SEE WHETHER THE TEST OF PERVERSITY IS SATISFIED BUT IN THE PRESENT CASE WHEN WE APPLY THE TEST EXPOUNDED IN DHIRAJLAL GIRDHRILAL (S UPRA) AND DAULAT RAM RAWAT MULL (SUPRA) AND ALSO READ THE ORDER AS A WHOLE, WE REACH THE AFFIRMATIVE OPINION IN FAVOUR OF THE APPELLANT-REVENUE. IT IS THE AFORE SAID TEST, WHICH HAS BEEN APPLIED BY US IN OUR CONCLUSION RECORDED ABOVE. AS SIMILAR VIEW IS ECHOED BY THE HON'BLE DELHI HIGH COURT IIN ITS DECISION OF 1 ST JUNE, 2012, ITA NO. 562 OF 2008 IN THE CASE OF COMM ISSIONER OF INCOME TAX VERSUS SUNAERO LIMITED. SIMILARLY, IN CIT VERSUS S. P. JAIN (1973) 87 ITR 370 (S), THE APEX COURT HAS HELD THAT A FACTUAL CONCLUSION I S REGARDED AS PERVERSE WHEN NO PERSON DULY INSTRUCTED OR ACTING JUDICIALLY COULD A CT UPON THE RECORD BEFORE HIM, HAVE REACHED THE CONCLUSION ARRIVED AT BY THE TRIBU NAL/AUTHORITY. IN THE PRESENT CASE, IT CANNOT BE SAID THAT THE FIN DINGS OF THE AO WERE BASED UPON ANY COGENT MATERIAL. THIS ISSUE BECOMES ALL THE MOR E SERIOUS IN VIEW OF THE UNDISPUTED FACT THAT BOTH, THE APPELLANT AS WELL TH E RECIPIENT CONCERN, GTFS WERE BEING SCRUTINIZED DURING THE SAME PERIOD, FOR THE S AME ASSESSMENT YEAR AND WITHIN THE SAME CITY OF KOLKATA. THERE WAS NO DEART H OF MATERIAL AVAILABLE WITH THE AO. BUT FROM THIS MATERIAL, NO DEFECT HAS BEEN BROUGHT ON RECORD BY THEE AO TO CREATE THE EXPRESSION THAT THE APPELLANT OR INDE ED GTFS WAS INDULGING IN ANY CREATION BOGUS ENTRIES OR BOOKING FALSE EXPENSES. I T HAS NOT EVEN BEEN EXPLAINED AS TO HOW THE ALLEGED SIPHONING OF FUNDS WAS TAKING PLACE - WHAT WAS GTFS DOING OR WHAT WAS THE NEED FOR THIS SIPHONING GTFS HAS BE EN SUBJECTED TO SCRUTINY AND AN ORDER U/S 143(3) PASSED IN ITS CASE, WHEREIN SOM E ADDITIONS HAVE BEEN MADE BY THE AO; BUT EVEN AFTER DUE CONSIDERATION OF THE MAT ERIAL DURING THE SCRUTINY M/S HEIGHT INSURANCE SERVICES LTD. ITA NO.2163/KOL/2017 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 1 11 15 55 5 PROCEEDINGS OF GTFS, THE AO OF GTFS HAS NOT RAISED ANY DOUBTS WITH REGARD TO THE EXPENSES INCURRED BY GTFS IN RELATION TO ITS DE ALINGS WITH EITHER NETWORK OR THE PRESENT APPELLANT. HE HAS ALSO ACCEPTED AS GENU INE, THE PAYMENTS RECEIVED FROM THE PRESENT APPELLANT BY GTFS. IN THESE CIRCUM STANCES, THE STAND OF THE AO OF THE PRESENT APPELLANT BECOMES UNTENABLE IN LAW. THE OBJECTION AS TO THE RAISING OF A BILL ON THE LA ST DAY THE FINANCIAL YEAR, BY GTFS HAS BEEN CITED AS EVIDENCE OF THE BOGUS EXPENS ES BEING BOOKED BY THE APPELLANT. BUT, WHILE SUCH A CIRCUMSTANCE DEFINITEL Y MERITS AN INQUIRY, THE FACT THAT A BILL HAS BEEN RAISED ON THE LAST DAY OF THE FINANCIAL YEAR IS BY ITSELF NOT SUFFICIENT REASON TO WARRANT AN ADDITION - ESPECIAL LY OF SUCH MAGNITUDE. THE AO HAS NOT EVEN ATTEMPTED TO PROVE THAT THE SAID BILL WAS NOT GENUINE EITHER IN ITSELF OR ON ACCOUNT OF THE SERVICES PROVIDED BY GTFS - AG AINST WHICH THE SAID BILL WAS RAISED. THE AO HAS NOWHERE DENIED THAT GTFS DID PRO VIDE SERVICES TO THE APPELLANT. THIS MATTER HAS BEEN DISCUSSED AT LENGTH EARLIER IN THIS ORDER, WHERE IT HAS BEEN ESTABLISHED THAT THE SAID PAYMENTS WERE MA DE AGAINST SERVICES PROVIDED BY GTFS. IT SEEMS SOMEHOW NOT OUT OF PLACE THAT AN AGENCY THAT IS PROVIDING SERVICES ON A CONTINUAL BASIS, SHOULD RAISE BILLS, EVEN IF SUCH BILLS ARE RAISED ON THE LAST DAY OF THE FINANCIAL YEAR. THE APPELLANT HAS, DURING APPEAL PROCEEDINGS, PRODUCED THE NECESSARY BILLS AS WELL AS LEDGER COPI ES. HE HAS SUBMITTED THAT IT WAS NOT TRUE THAT THE ONLY ONE BILL FOR THE ENTIRE AMOUNT PAYABLE TO GTFS WAS RAISED. ON THE LAST DAY OF THE FINANCIAL YEAR. HE H AS SUBMITTED THAT BILLS WERE RAISED AT REGULAR INTERVALS AND PAYMENTS MADE. HE H AS THAT THEE DETAILS WERE ALSO SUBMITTED BEFORE THE AO ALONG WITH ALL BOOKS OF ACC OUNT BUT THE LATTER HAD NOT RAISED DETAILS OF SERVICE CHARGES FROM THE PERIOD 1-APR-2010 TO 31-MAR-2011 DATE NATURE OF BILL RAISED DATE OF BILL GROSS AMAOUNT BASIC VALUE SERVICE TAX TDS- DEDUCTED NET AMOUNT PAID DATE OF PAYMENT GTFS- HEIGHT/SC /10-11/01 SERVICE CHARGE S 01/07/20 10 132,360,000 ,00 120,000,000 ,00 12,360,000. 00 13,236,000. 00 119,124,000 .00 01-7- 10,02- 07- 10,03- 07-10 GTFS- HEIGHT/SC /10-11/02 SERVICE CHARGE S 10/08/20 10 88,240,000. 00 80,000,000. 00 8,240,000.0 0 8,824,000.0 0 79,416,000. 00 16/08/20 10 GEFTS- HEIGHT/SC /10-11/03 SERVICE CHARGE S 06/09/20 10 44,120,000. 00 40,000,000. 00 4,120,000.0 0 4,412,000.0 0 39,708,000. 00 06-09- 10, 07- 09-10 GTFS- HEIGHT/SC /10-11/04 SERVICE CHARGE S 11/10/01 0 44,120,000. 00 40,000,000. 00 4,120,000.0 0 4,412,000.0 0 39,708,000. 00 11-10- 10,12- 10-10, 27-10- 10, 02- 11-10 GTFT- HEIGHT/SC /10-1/05 SERVICE CHARGE S 10/01/20 11 44,120,000. 00 40,000,000. 00 4,120,000.0 0 4,412,000.0 0 39,708,000. 00 12-01- 11,17- 01- 11,20- 01- 11,21- 01-11, 03-02- 11,24- 02-11 GTFS- HEIGHT/SC /10-11/06 SERVICE CHARGE S 24/03/20 11 44,120,000. 00 40,000,000. 00 4,120,000.0 0 1,103,000.0 0 43,017,000. 00 24-03- 11, 25- 03-11, 11-04- 11, 04- 11, 04- 05-11, M/S HEIGHT INSURANCE SERVICES LTD. ITA NO.2163/KOL/2017 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 1 11 16 66 6 27-05-11 GTFS- HEIGHT/SC /10-11/07 SERVICE CHARGE S 31/03/20 11 264,720,000 .00 240,000,000 .00 24,720,000. 00 6,618,000.0 0 258,102,000 .00 27-05- 11, 01- 06-11, 02-06- 11, 06- 06-11, 11-07- 11, 25- 07-11, 26-7-11, 29-07- 11, 07- 0911,20- 09-11, 22-09- 11, 23- 09-11, 26-09- 11, 28- 09-11, 29-09- 11, 01- 10-11 TOTAL 661,800,000 .00 TOTAL 43,017,000. 00 618,783,000 .00 ANY SPECIFIC DOUBT OR POINTED OUT ANY SPECIFIC DEFE CT IN THESE BILLS. DETAILS OF THESE AND PAYMENTS THEREOF ARE ASUNDER: A PERUSAL THE MATERIAL ON RECORD 'CLEARLY BRINGS TO FORE THE FACT THAT ONE COMPLETE BILL OR THE ENTIRE SERVICE CHARGE WAS EVIDENTLY NOT RAISED Y THE APPELLANT ON THE LAST DAY OF THE FINANCIAL YEAR. A SIMILAR BILL WAS' ALSO RAISED FOR THE REIMBURSEMENT OF EXPENSES OF GTFS ON ACCOUNT OF EXP ENSES INCURRED BY THE LATTER TOWARDS INCENTIVES/OTHER EXPENSES OF THE NETWORK PE RSONNEL, ON THE LAST DAY OF THE FINANCIAL YEAR. THE AO HAS HOWEVER NOT DOUBTED THIS BILL OR HE PAYMENT MADE IN RESPECT OF THIS BILL. THERE SEEMS TO BE SOME INCONS ISTENCY IN THE TREATMENT THAT THE AO HAS GIVEN TO VARIOUS ITEMS OF THE EXPENSES INCUR RED BY THE APPELLANT COMPANY. THIS DIFFERENTIAL TREATMENT HAS BEEN MADE WITHOUT A SCRIBING ANY REASONS OR OFFERING ANY EXPLANATIONS. IN HIS SUBMISSION, THE APPELLANT HAS GIVEN DETAILED REASONS FOR EMPLOYING THE SERVICES OF GTFS AND THE REASON WHY THE LATTER WAS PAID SUCH A HEFTY FEE. THE AGREEMENT BETWEEN THE APPELLANT AND ITS PRINCIPAL P ROVIDES THE SCOPE OF WORK TO BE UNDERTAKEN BY THE APPELLANT AND THE AGREEMENT BE TWEEN THE APPELLANT - AND GTFS SPELLS OUT THE TERMS OF WORK AS WELL AS PAYMEN TS FOR THESE WORKS, THAT ARE TO BE UNDERTAKEN BY GTFS. THE BILLS AS WELL AS LEDG ER ACCOUNTS WERE PRODUCED BY THE APPELLANT BEFORE THE AO. THE BOOKS ETC. - AS PE R THE ASSESSMENT ORDER OF GTFS PRODUCED BY THE APPELLANT DURING .APPEAL PROCE EDINGS - OF GTFS WERE EXAMINED BY THE AO OF THAT ENTITY. NOTHING TO SHOW THAT THE BILLS SO RAISED WERE FOR ANYTHING BUT THE BONA FIDE PURPOSE OF THE BUSIN ESS OF THE APPELLANT AND OF GTFS HAS BEEN FOUND. IN THESE CIRCUMSTANCES, A FIN DING BASED UPON MERE CONJECTURES AND HYPOTHESES CANNOT BE UPHELD IN LAW. IT CANNOT BUT ALSO BE NOTED THAT THE AGREEMENT BETW EEN THE APPELLANT AND GTFS IS A DULY NOTARIZED AGREEMENT THAT IS ENFORCEABLE IN A CIVIL COURT OF LAW. THE AGREEMENT CONSTITUTES A BINDING CONTRACT BETWEEN TH E TWO PARTIES. THE BOMBAY HIGH COURT, IN THE FACTS OF CIT VS. C.K. THAKORE (1 982) 136 ITR 464 (BOM.) 472 HAS TAKEN THE VIEW THAT THE RIGHTS AND LIABILITIES UNDER A CONTRACT BETWEEN THE ASSESSEE AND A THIRD PARTY IF AND AS DETERMINED BY A COMPETENT CIVIL CURT CANNOT BE OVERLOOKED OR IGNORED WHILE DETERMINING THE LEG AL NATURE OF THE RECEIPT IN THE HANDS OF THE ASSESSEE. UNDER THESE CIRCUMSTANCES, S INCE THIS IS A LEGALLY ENFORCEABLE AGREEMENT CASTING UNEQUIVOCAL DUTIES AN D LIABILITIES UPON THE TWO PARTIES, THE EXPENSES IN THE HANDS OF THE APPELLANT CANNOT BE IGNORED OUT OF HAND. M/S HEIGHT INSURANCE SERVICES LTD. ITA NO.2163/KOL/2017 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 1 11 17 77 7 THESE CAN UNDOUBTEDLY BE CALLED INTO QUESTION, BUT THIS HAS TO BE DONE WITH MATERIAL FACTS AND COGENT REASONING. THIS HAS NOT B EEN DONE BY THE ASSESSING OFFICER IN THE INSTANT CASE. THE REJECTION OF A LEG ALLY ENFORCEABLE AGREEMENT, OUT OF HAND AND WITHOUT ASCRIBING ANY REASONS FOR DOING SO, CAN HARDLY BE UPHELD IN LAW. DURING APPEAL PROCEEDINGS, THE APPELLANT HAS ALSO A RGUED THAT THE AO HAS BEEN INCONSISTENT IN HIS TREATMENT OF THE SAME KINDS OF EXPENSES AND THE IDENTICAL BUSINESS ARRANGEMENT BETWEEN RLIC, THE APPELLANT CO MPANY AND GTFS, OVER THE YEARS. THE APPELLANT HAS SUBMITTED THAT ITS CASE HA D BEEN SCRUTINIZED U/S 143(3) OF THE ACT FOR THE AY 2010-11 BY THE AO. IN THIS YEAR, THE AO, UNDER THE SAME FACTS AND CIRCUMSTANCES AND BUSINESS ARRANGEMENTS, THAT H AD DULY BEEN EXPLAINED TO THE AO FOR THAT AY, THAT IS, 2010-11 HAD ACCEPTED T HE FACT THAT THE SERVICE CHARGES PAID BY ASSESSEE TO GTFS WERE BONA FIDE. HE IN FACT HAD GONE FURTHER AND HAD MADE CERTAIN DISALLOWANCES BASED ON THE FACT THAT T HE APPELLANT WAS PAYING LARGE AMOUNTS OF MONEYS AS SERVICE CHARGES TO GTFS. IT WA S THESE SAME SERVICE CHARES, THAT THE AO THEREAFTER DISALLOWED - UNDER IDENTICAL CONDITIONS - FOR THE AY 2011- 12. THE APPELLANT HAS PROVIDED A COPY OF THE SCRUTI NY ASSESSMENT ORDER FOR AY AY 2010-11. THIS ORDER HAS BEEN PASSED ON10.3.2015. IN ADDITION TO THE ABOVE, THE APPELLANT HAS PROVIDE D A COPY OF THE SCRUTINY ASSESSMENT ORDER, FOR THE AY 2012-13, PASSED U/S 14 3(3) OF THE ACT, DATED 10.3.2015. IN THIS ORDER ONCE AGAIN, THE SAID EXPEN SES HAVE BEEN ACCEPTED UNDER IDENTICAL CIRCUMSTANCES. THE APPELLANT FURTHER PROVIDED A COPY OF THE ASSESS MENT ORDER - ONCE AGAIN PASSED AFTER SCRUTINY U/S 143(3) - FOR THE AY 2013- 14. THE SAID ORDER HAS BEEN PASSED AFTER ACCEPTING THE SAID SERVICE CHARGES AND OTHER EXPENSES INCURRED BY THE APPELLANT UNDER THE SAME SET OF IDENTICAL CIRCU MSTANCES. THIS ORDER WAS PASSED ON 21.3.2016. THE APPELLANT HAS PROVIDED A COMPARATIVE CHART OF T HE VARIOUS EXPENSES INCURRED BY THE APPELLANT COMPANY IN RESPECT OF GTFS OVER SE VERAL YEARS AND THE TREATMENT PROVIDED TO THEM UNDER SCRUTINY ASSESSMEN T U/S 143(3) OF THE ACT. THIS IS AS UNDER: COMPARATIVE HART OF FOLLOWING EXPENSES EXPENSE TYPE ASSESSMENT YEAR 2010- 11 ASSESSMENT YEAR 2011- 12 ASSESSMENT YEAR 2012- 13 ASSESSMENT YEAR 2013- 14 REIMBURSE MENT EXPENSES PAID TO GTFS 1,151,33 2,152.00 1,283,36 5,793.00 653,034 568.00 3696,631 306.00 REIMBURSE MENT EXPENSES PAID TO GTFS ALLOWED AS PER 143(3) ORDER 1,151,33 2,152.00 5,793.00 653,034,56 8.00 396,631,30 6.00 SERVICE CHARGES PAID TO GTFS 727,980,00 0.00 661,800,00 0.00 198,54000 0.00 94,382,400 .00 SERVICE CHARGES 727,980,00 0.00 DISALLOW ED 198,540,00 0.00 94,382,400 .00 M/S HEIGHT INSURANCE SERVICES LTD. ITA NO.2163/KOL/2017 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 1 11 18 88 8 PAID TO GTFS ALLOWED AS PER 143(3) ORDER ANY OTHE P[PAYMENT MADE TO GTFS -00 -00 -00 -00 DATE OF ASSESSMENT ORDER U/S. 143(3) 23/03/13 31/03/14 10/3/15 21/03/16 PREMIUM COLLECTION FROM CUSTOMER 755.48 CRORES 1114.56 CRORES 929.29 CRORES 638.90 CRORES COMMISSIO N RECEIVED FROM RLIL 204.26 CRORES 212.51 CRORES 104.78 CRORES 67.30 CRORES APPELLANT HAS CONTENDED THAT SINCE THE DATE OF THE PRESENT IMPUGNED ORDER WAS 31.3.2014, WITH THE SUBSEQUENT ORDERS FOR TWO ASSES SMENT YEARS - ONE BEFORE THE IMPUGNED ASSESSMENT YEAR AND ONE AFTER THE IMPUGNED ASSESSMENT YEAR - BEING PASSED ON 10.3.2015 AND 21.3.2016 RESPECTIVELY, IT SEEMED STRANGE THAT UNDER IDENTICAL CIRCUMSTANCES, THE AO FIRST DID NOT ACCEP T THE STAND OF THE APPELLANT AND DISALLOWED SERVICE CHARGES, WHILE IN THE ORDER PASS ED ON THE NEXT DATE MENTIONED ABOVE, THE AO NOT ONLY ACCEPTED THE VERY SAME EXPEN SES ON ACCOUNT OF SERVICE CHARGES, BUT IN FACT MADE CERTAIN DISALLOWANCES BAS ED ON THIS PAYMENT OF SERVICE TAX. IN THE VERY NEXT ORDER, THE AO ONCE AGAIN ACCE PTED THE BONA FIDES AND GENUINENESS AND BUSINESS PURPOSE OF THE VERY SAME S ERVICE CHARGES. THE APPELLANT HAS SUBMITTED THAT ONCE THE AO HAD TAKEN ONE STAND IN ONE YEAR, IT WAS FORBIDDEN THAT HE CHANGE IT IN ANOTHER YEAR IN THE INTEREST OF CONSISTENCY. I HAVE EXAMINED THIS ASPECT OF THE ISSUE. WHAT THE APPELLANT IS APPEALING TO IS THE PRINCIPLE OF RES JUDICATA FROM JURISPRUDENCE. THIS SIMPLY MEANS THAT IF ON ANY FACT AND/OR LAW, ONE PARTICULAR VIEW IS TAKEN THEN SUBSE QUENTLY. IF ANY ISSUE ON A SIMILAR FACT AND/OR LAW IS TO BE DECIDED BETWEEN TH E SAME PARTIES, THE STAND SHOULD BE SAME AS MADE EARLIER. IT HAS BEEN HELD THAT IN DECIDING UPON LEGAL ISSUES , WHETHER BASED ON A SET OF FACTS .' OR ON AN ISSUE OF LAW, WHAT IS RELEVANT IS NOT T HE 'PERSONALITY OF OFFICERS ADJUDICATING ~ BUT THE INSTITUTION OF ADJUDICATION ITSELF. IF IT IS CONCEDED THAT SIMPLY BECAUSE OF THE CHANGE IN THE PERSONNEL WHO A DJUDICATED, IT IS OPEN TO THEM, ON SAME SET OF FACTS, TO A CONCLUSION TOTALLY CONTR ADICTORY TO THE CONCLUSION WHICH HAD BEEN REACHED BY EARLIER SUCH ADJUDICATING PERSO NNEL, IT WILL NOT ONLY SHAKE THE CONFIDENCE OF THE PUBLIC IN JUDICIAL PROCEDURE AS SUCH, BUT IT WILL TOTALLY DESTROY SUCH CONFIDENCE THAT WILL BE DESTRUCTIVE OF THE INSTITUTIONAL INTEGRITY ITSELF. HOWEVER, THE PRINCIPLE OF RES JUDICATA HAS TO BE AP PLIED WITH CAUTION IN THE CASE OF INCOME TAX. THE HON'BLE BOMBAY HIGH COURT, IN H. A. SHAH AND CO. VS. CIT (1956) 30 ITR 618 (BOM.) HAS HELD THAT 'THE PRINCIP LE OF ESTOPPEL OR RES JUDICATA DOES NOT STRICTLY APPLY TO THE INCOME TAX AUTHORITI ES'. THE SAME COURT HAS HOWEVER, QUALIFIED THIS BY SAYING THAT: 'AN EARLIER DECISION ON THE SAME QUESTION CANNOT BE REOPENED IF THAT DECISION IS NOT ARBITRARY OR PERVERSE, IF IT HAD BEEN ARRIVED A T AFTER DUE INQUIRY, IF NO FRESH FACTS ARE PLACED BEFORE THE TRIBUNAL GIVING THE LAT ER DECISION AND IF THE TRIBUNAL GIVING THE EARLIER DECISION HAS TAKEN INTO CONSIDER ATION ALL MATERIAL EVIDENCE.' IN CIT VS. L. G. RAMAMURTHY (1977)110 ITR 453 (MAD. ), THE COURT LAID DOWN THE PRINCIPLE THAT 'BUT WHAT IS RELEVANT IS NOT THE PER SONALITY OF OFFICERS PRESIDING M/S HEIGHT INSURANCE SERVICES LTD. ITA NO.2163/KOL/2017 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 1 11 19 99 9 OVER THE TRIBUNAL BUT THE TRIBUNAL AS AN INSTITUTIO N. IF IT IS CONCEDED THAT SIMPLY BECAUSE OF THE CHANGE IN THE PERSONNEL WHO MANNED T HE TRIBUNAL, IT IS OPEN TO THEM TO A CONCLUSION TOTALLY CONTRADICTORY TO THE C ONCLUSION WHICH HAD BEEN REACHED BY EARLIER OFFICERS MANNING THE TRIBUNAL ON SAME SET OF FACTS IT WILL NOT ONLY SHAKE THE CONFIDENCE OF THE PUBLIC IN JUDICIAL PROCEDURE AS SUCH, BUT IT WILL TOTALLY DESTROY SUCH CONFIDENCE THAT WILL BE DESTRU CTIVE OF THE INSTITUTIONAL INTEGRITY ITSELF'. IN AMALGAMATED COALFIELDS VS. JANAPADA SABHA AIR 19 64 SC 1013 HAVE EVINCED A HIGHLY, BALANCED APPROACH:- IN CONSIDERING THIS QUESTION, IT MAY BE NECESSARY TO DISTINGUISH BETWEEN DECISION ON QUESTIONS OF LAW WHICH DIRECTLY AND SUBSTANTIALL Y ARISE IN ANY DISPUTE ABOUT THE ABILITY FOR A PARTICULAR YEAR, AND QUESTIONS OF LAW WHICH ARISE INCIDENTALLY OR IN A COLLATERAL MANNER ... THE EFFECT OF LEGAL DECISIONS ESTABLISHING THE LAW WOULD BE A DIFFERENT MATTER. IF, FOR INSTANCE, THE VALIDITY OF A TAXING STATUTE IS IMPEACHED BY AN ASSESSEE WHO IS CALLED UPON TO PAY A TAX FOR A P ARTICULAR YEAR AND THE MATTER IS TAKEN TO THE HIGH COURT OR BROUGHT BEFORE THIS COUR T AND IT IS HELD THAT THE TAXING STATUTE IS VALID, IT MAY NOT BE EASY TO HOLD THAT T HE DECISION ON THIS BASIC AND MATERIAL ISSUE WOULD NOT OPERATE AS RES JUDICATA AG AINST THE ASSESSEE FOR A SUBSEQUENT YEAR'. IN RADHASOAMI SATSANG VS. CIT (1992) 193 ITR 321 (S C) THE APEX COURT WHILE EXAMINING THIS PRINCIPLE IN DETAIL, MADE THE FOLLOW ING OBSERVATIONS: WE ARE AWARE OF THE FACT THAT STRICTLY SPEAKING R ES JUDICATA DOES NOT APPLY TO INCOME TAX PROCEEDINGS. AGAIN, EACH ASSESSMENT YEAR BEING A UNIT, WHAT IS DECIDED IN ONE YEAR MAY NOT APPLY IN THE FOLLOWING YEAR BUT WHERE A FUNDAMENTAL ASPECT PERMEATING THROUGH THE DIFFERENT ASSESSMENT YEARS HAS BEEN FOUND AS A FACT ONE WAY OR THE OTHER AND PARTIES HAVE ALLOWED THAT POSITION TO BE SUSTAINED BY NOT CHALLENGING THE ORDER, IT WOULD NOT BE AT ALL APPRO PRIATE TO ALLOW THE POSITION TO BE CHANGED IN A SUBSEQUENT YEAR'. IN SOUTH INDIA TRUST ASSOCIATION VS. TELUGU CHURCH COUNCIL (1996) 2 SCC 520, THE APEX COURT HAS TAKEN THE VIEW THAT THE RULE OF RES JUDICATA IS RESTS UPON CONSIDERATIONS OF PUBLIC POLICY. IT IS IN THE INTER EST OF PUBLIC AT LARGE THAT FINALITY SHOULD BE ATTACHED TO THE JUDICIAL DECISIONS. IT WA S ALSO HELD TO BE IN THE PUBLIC INTEREST THAT INDIVIDUALS SHOULD NOT BE VEXED TWICE OVER WITH THE SAME KIND OF LITIGATION. IN THE CASE OF MUNICIPAL CORPORATION OF CITY OF THA NE VS. VIDYUT METALLICS LTD & ANR. (2007) 8 SCC 688, THE FACTS WERE THAT IN EARLI ER LITIGATION, THE COURT HAD CONSIDERED THE EVIDENCE OF QUALITY CONTROL MANAGER WHO WAS DESCRIBED AS AN ' EXPERT ' ON THE POINT AND ACCEPTING HIS EVIDENCE, THE COUR T HAD HELD THAT THE GOODS IMPORTED BY THE COMPANY WERE FERROUS IN NATUR E AND NOT NON FERROUS AND THE COMPANY WAS RIGHT IN PAYING OCTROI UNDER ITEM 7 1. IT WAS THUS CONCLUDED THAT THIS WAS A FUNDAMENTAL FACTOR' AND THE NATURE OF G OODS IMPORTED BY THE COMPANY WAS DIRECTLY AND SUBSTANTIALLY IN ISSUE, ON THE BASIS OF WHICH THE DECISION WAS TAKEN. THE APEX COURT AFTER EXAMINING THESE FACTS, OBSERVED THAT IN TAXATION MATTERS, THE STRICT RULE OF RES JUDICATA A S ENVISAGED BY SECTION 11, CPC 1908 HAD NO APPLICATION. AS A GENERAL RULE, EACH YE AR'S ASSESSMENT IS FINAL ONLY FOR THAT YEAR AND DOES NOT GOVERN LATER YEARS, BECA USE IT DETERMINES THE TAX FOR A PARTICULAR PERIOD. M/S HEIGHT INSURANCE SERVICES LTD. ITA NO.2163/KOL/2017 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 2 22 20 00 0 HOWEVER, QUALIFYING ITS OBSERVATIONS, THE HON'BLE S UPREME COURT AVERRED THAT IN THE FACTS OF THE INSTANT CASE IT WAS NOT POSSIBLE T O HOLD THAT THE EARLIER DECISION WOULD NOT CONTINUE TO OPERATE IN SUBSEQUENT YEARS U NLESS IT WAS SHOWN THAT THERE WERE CHANGED CIRCUMSTANCES OR THE GOODS IMPORTED BY THE COMPANY IN SUBSEQUENT YEARS WAS DIFFERENT THAN THE ONE WHICH WAS IMPORTED EARLIER AND IN RESPECT OF WHICH DECISION HAD BEEN ARRIVED AT BY THE COURT. TH EREFORE, IT WAS HEID THAT THE REVISIONAL COURT AS WELL AS THE HIGH COURT WERE RIG HT IN GIVING BENEFIT OF THE DECISION IN THE EARLIER LITIGATION TO THE RESPONDEN T COMPANY. THE HON'BLE SUPREME COURT UPHELD THE OBSERVATION OF SUPREME COURT IN CA SE OF RADHASWAMI SATSANG (SUPRA). IN THE INSTANT CASE, IT IS NOT. DISPUTED THAT THE F ACTS HAVE REMAINED IDENTICAL OVER THE THREE ASSESSMENT YEARS - 201Q-11 TO' 2012-13. I T IS FURTHER UNDISPUTED THAT THE THREE YEARS HAVE BEEN DULY SCRUTINIZED AND ORDERS P ASSED U/S 143(3) OF THE ACT. IT IS ALSO A MATTER OF FACT THAT THE INSTANT IMPUGNED ORDER U/S 143(3) WAS PASSED BEFORE SIMILAR ORDERS WERE PASSED FOR THE OTHER TWO ASSESSMENT YEARS. THEREFORE, IT CANNOT BE DENIED THAT THE IMPUGNED ORDER WAS PRE SENT BEFORE THE AO AT THE TIME OF PASSING THE REMAINING TWO ORDERS. DESPITE THIS T HE AOS IN THE OTHER TWO CASES HAVE, AFTER EXAMINING THE ISSUE - EVEN COMMENTING U PON IT - ACCEPTED THE FACTS TO BE TRUE. THIS FLUCTUATING STAND OF THE AO SEEMS TO INDICATE THAT HE WAS MAKING PURE SURMISES AND CONJECTURES AND WAS CHANGING HIS OPINION BASED ON THE SAME FACTS FROM YEAR TO YEAR. THERE IS NOTHING ON RECORD TO INDICATE THAT THE AO IN THE CASE OF THE IMPUGNED ORDER, WAS IN THE KNOWLEDGE OF ANY EXTRA INFORMATION OR THAT ANY EXTRA .EFFORTS ON TERMS OF INQUIRIES HAD B EEN MADE BY THE AO. THERE IS NO LAW 'POINT THAT HAD EITHER ARISEN OR BROUGHT TO THE NOTICE OF OR RELIED UPON BY THE AO. FROM A STUDY OF THE MATERIAL ON RECORD AND THE IMPUGNED ASSESSMENT ORDER, IT APPEARS THAT THE AO HAS FORMED AN OPINION BASED ON A SET OF FACTS THAT REMAINED UNCHANGED FOR THE OTHER TWO ASSESSMENT YEA RS. THERE DOES NOT APPEAR TO BE ANY MATERIAL ON RECORD TO SHOW THAT THIS OPIN ION EMANATED FROM ANY PERSUASIVE SET OF FACTS OR COGENT REASONING. SUCH A N OPINION THEREFORE LOSES MUCH OF THE FORCE OF LAW AND IF NOT BACKED BY ANY OTHER CIRCUMSTANCES SUPPORTING IT - AS IS THE CASE HERE - BECOMES DIFFICULT TO UPHOLD AS A N UNEQUIVOCAL FINDING OF FACT AND LAW. DURING APPEAL PROCEEDINGS, THE APPELLANT HAS PLACED RELIANCE ON THE FOLLOWING AUTHORITIES: SUPREME COURT OF INDIA ALUMINIUM CORPORATION OF INDIA ... VS COMMISSIONER OF INCOME-TAX, WEST ... ON 29 AUGUST, 1972 EQUIVALENT CITATIONS: 1973 AIR 520, 1973 SCR (1)109 7 AUTHOR: K HEGDE BENCH: HEGDE, K.S. PETITIONER: ALUMINIUM CORPORATION OF INDIA LTD. VS. RESPONDENT : . COMMISSIONER OF INCOME-TAX, WEST BENGAL DATE OF JUDGMENT29/08/1972 BENCH: HEGDE, K.S. BENCH: HEGDE, K.S. REDDY, P. JAGANMOHAN ;' KHANNA, HANS RAJ M/S HEIGHT INSURANCE SERVICES LTD. ITA NO.2163/KOL/2017 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 2 22 21 11 1 CITATION: 973 AIR 520 1973 SCR (1)1097 CATOR INFO : RE 1975 SC 5 (23) RF 1986 SC 98 (18) R 1986 SC1483 (4) ACT: INCOME TAX ACT 1922 S. 10(2) (XV) & 66-EXPENDITURE LAID OUT WHOLLY AND EXCLUSIVELY FOR BUSINESS-COMMISSION PAYABLE TO SELL ING AGENTS IN A CASE WHERE SALES ARE NOT ACTUALLY EFFECTED THROUGH SELLING AGE NTS-CONSTRUCTION OF AGREEMENT- EXPENDITURE ON SUCH COMMISSION WHETHER ALLOWABLE AS A DEDUCTION-QUESTION OF FACT DECIDED BY TRIBUNAL-HIGH COURT'S POWER TO INTE RFERE IN REFERENCE PROCEEDINGS UNDER S. 66. HEADNOTE: UNDER CLAUSE (6) OF THE AGREEMENT BETWEEN THE ASSES SEE COMPANY AND ITS SELLING AGENT, DISCOUNT WAS TO BE ALLOWED TO THE SELLING AG ENTS NOT ONLY ON SALES EFFECTED THROUGH THE SAID AGENTS OR SUB-AGENTS BUT ALSO ON S ALES EFFECTED DIRECTLY BY THE PRINCIPAL. UNDER CLAUSE (8) THE AGENTS WERE RESPONS IBLE FOR THE PAYMENT IF THE PRICE DUE FROM THE PURCHASERS IMMEDIATELY AFTER-THE GOODS LEFT THE PRINCIPAL'S WORKS OR GODOWN. SUCH PAYMENT BAD TO BE MADE ON PRE SENTATION OF NECESSARY PAPERS OR DOCUMENTS BY THE ASSESSEE, NOT LATER THAN ' A FORTNIGHT AFTER THE GOODS WERE ALUMINIUM CORPORATION OF INDIA ... VS COMMISSI ONER OF INCOME-TAX, WEST ... ON 29 AUGUST, 1972 INDIAN KANOON - HTTP://INDIANKANOON.ORG/DOC/350650/ 1 I HAVE EXAMINED THE ISSUES RAISED BY THE APPELLANT IN THE CONTEXT OF THE MATERIAL ON RECORD AND PERUSED THE LEGAL OPINION RELIED UPON BY THE APPELLANT. IN VIEW OF THE DISCUSSIONS ABOVE, I FIND THAT ON EACH AND EVER Y COUNT, THE ORDER OF THE AO DOES NOT STAND THE TESTS LAID DOWN BY LAW AND LEGAL OPINION AS OPINED BY LEGAL AUTHORITIES. IN THESE CIRCUMSTANCES, I FIND THAT I CANNOT UPHOLD THE FINDINGS OF THE AO AS REGARDS THE SUBJECT MATTER OF THIS GROUND. TH E GROUND IS ACCORDINGLY ALLOWED. 8. MR. USMAN ( CIT-DR) REITERATES REVENUES MAIN PL EA THAT CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING TH E IMPUGNED DISALLOWANCE OF 66.08 CRORES OF COMMISSION PAID TO M/S GTFS. THE AS SESSEE ON THE OTHER HAND STRONGLY SUPPORTS THE CIT(A)S FINDINGS UNDER CHALLENGE. THERE IS NO DISPUTE THAT THE LOWER AUTHORITYS DISCUSSION EXTRACTED IN PRECEDING PARAGRAPH HAS CONSIDERED THE ENTIRE ISSUE THREADBAR E IN VIEW OF THE RELEVANT CLAUSES IN THE AGREEMENT PAYER-PAYEE BUSIN ESS RELATIONS BETWEEN THE TWO PARTIES INSTEAD OF GROUP RELATIONSHIP, THE PAYER M/S RELIANCE LIFE INSURANCE COMPANYS BUSINESS PROCESS INVOLVING FOUR TIER SYSTEM OF SERVICE AS WELL AS CORRESPONDING PAYMENTS, PAYEE GTFSS AGE NCY AND INFRASTRUCTURE MADE AVAILABLE TO THE ASSESSEE ON YE AR-TO-YEAR BASIS AS WELL AS VARIOUS ADDENDUM DEVELOPMENTS (SUPRA). LEARNED C IT DR IS FAIR ENOUGH IN NOT DOULTING ASSESSEES AGREEMENT DATED 1 6.04.2009 STIPULATING PAYMENTS OF 60 AND 6 CRORES UNDER THE TWO HEADS (SUPRA) REDUCE D TO 56 AND 4 CRORES; RESPECTIVELY BY WAY OF ADDENDUM DATED 09.04.2010. MR USMAN FAILS TO REBUT THE FACT THAT ORIGINAL SUM OF 66 CRORES HEREINABOVE FIXED AT FIRST INSTANCE HAS NOWHERE BEEN DISPUTED A T ANY STAGE. BOTH PARTIES INCLUDING ASSESSEE AND ITS PAYEE REDUCED THE SAID S UM TO 60 CRORES ONLY M/S HEIGHT INSURANCE SERVICES LTD. ITA NO.2163/KOL/2017 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 2 22 22 22 2 AND FURTHER INCLUDED 10.3% SERVICE CHARGES COMPONENT. WE FAIL TO UNDERSTAND AS TO HOW THIS INCLUSION ATTRACTS GENUIN ENESS CLOUD ON ALREADY AGREED SUM OF 60 CRORES. THE ASSESSEE HAD EARLIER AGREED TO PAY 66 CRORES (NET) WHICH WAS REDUCED TO 60 CRORES CULMINATING IN ULTIMATE PAYMENT OF 66.18 CRORES BECAUSE OF SERVICE CHARGES ELEMENT EEI NG INCLUDED THEREIN. 9. MR. USMAN VEHEMENTLY CONTENDS THAT THE ASSESSEE HAD ALREADY PAID AN AMOUNT OF 128.33 CRORES AS OPERATING EXPENDITURE TO THE VERY PAYEE. HE TURNS THE IMPUGNED SUM OF 66.18 CRORES TO BE HIGHLY EXORBITANT. WE POSED A SPECIFIC QUERY AS TO WHETHER THE SAID OPERA TING EXPENDITURE INCLUDED ANY COMMISSION AGENCY SERVICES OR INFRASTR UCTURE USAGES OR NOT. THERE IS NO SUCH MATERIAL ON RECORD TO THIS EFFECT. IT EMERGES THEREFORE THAT THE ASSESSEE HAS BEEN FOLLOWING ITS CONSISTENT PRAC TICE WHEREIN AGENCY AND INFRASTRUCTURAL SERVICE ARE BEING AVAILED FROM THE PAYEE GTFS AS ACCEPTED BY THE ASSESSING OFFICER HIMSELF IN PRECEDING SUCCE EDING ASSESSMENT YEARS AS DISCUSSED IN ABOVE EXTRACTED CIT(A)S FINDINGS. THE TAXPAYERS BEFORE US AS HAS ALREADY FILED ALL THE RELEVANT PARTICULARS O F THE AGENCY AND INFRASTRUCTURE UTILIZED ON SECURED AS ALREADY DISCU SSED AT LENGTH IN THE CIT(A)S FINDINGS UNDER CHALLENGE. COUPLED WITH THI S IS THE CLINCHING LOWER APPELLATE AUTHORITYS CONCLUSION THAT THESE TWO ENT ITIES ARE NOT GROUP CONCERNS AT ALL. THE ASSESSEES DIRECTORS NAMES AL ONG WITH THEIR RESPECTIVE STAKE HOLDINGS AS WELL AS PAYEE FIRMS PARTNERS DE TAILS REPRODUCED HEREINABOVE DO NOT SHOW ANY GROUP(S) RELATIONSHIP B EFORE THESE. THE REVENUES VERY FAIR IN NOT INVOLVING SECTION 40A(2) (B) OF THE ACT EVEN TO PROVE THE CONTRARY. IT IS THEREFORE A CASE OF THE ASSESSEE HAVING AVAILED BOTH AGENCY AS WELL AS INFRASTRUCTURE NETWORK OF TH E PAYEES GTFS CARRYING OUT IN ITS CORPORATE INSURANCE AGENT BUSINESS. 10. WE MUST ALSO STATE HERE THAT THE ASSESSING OFFI CER HAD INVOKED ONLY SECTION 37 OF THE ACT IN DOUBTING GENUINENESS OF TH E IMPUGNED PAYMENTS. MR. USMAN AT THIS STAGE SUBMITS THAT CIT(A) OUGHT TO HAVE APPLIED SECTION 40(A)(IA) DISALLOWANCE AS WELL SINCE THE ASSESSEE H AD NOT DEDUCTED TDS AT THE PRESCRIBED RATE AS PER TABULATION CHART EXTRACT ED FORMING PART OF CIT(A)S DETAILED DISCUSSION. WE FAIL TO AGREE WITH THE REVENUES INSTANT TECHNICAL PLEA. THE FACT REMAINS THAT THE ASSESSEE HAS FILED ITS PAYEES COMPUTATION OF INCOME, INCOME TAX RETURN AS WELL AS THE CORRESPONDING ASSESSMENT ORDER SUFFICIENTLY INDICATING THAT THE I MPUGNED PAYMENT HAD BEEN DULY ASSESSED AS HIS CASE IN ITS HANDS. SECTIO N 40(A)(IA) 2 ND PROVISO INSERTED IN THE ACT BY WAY OF THE FINANCE ACT, 2012 WITH EFFECT FROM 01.04.2013 PRESCRIBE NON APPLICATION OF THE IMPUGNE D PROVISION IN CASE THE ASSESSEES CONCERNED IS NOT AN ASSESSEE IN DEFAULT AS PER SECTION 201(1) 1 ST PROVISO. HON'BLE JURISDICTIONAL HIGH COURTS DECISI ON IN DCIT VS. TIRIPATI CONSTRUCTION GA NO.2146 OF 2016 HAS CONCLUDED THAT THE SAID PROVISO IS A CURATIVE ONE HAVING RETROSPECTIVE EFFECT FROM 01.04 .2005. WE THEREFORE DECLINE THE REVENUES ARGUMENTS SEEKING TO INVOKE U /S 40(A)(IA) OF THE ACT. WE FURTHER HOLD THAT HON'BLE JURISDICTIONAL HIGH CO URTS LAND MARK DECISION IN CIT(A) VS. M/S S.K. TEKRIWAL (2014) 361 ITR 432 (CAL) HAS FURTHER M/S HEIGHT INSURANCE SERVICES LTD. ITA NO.2163/KOL/2017 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 2 22 23 33 3 CONCLUDED THAT THE SECTION 40(A)(IA) DOES NOT APPLY IN CASE OF SHORT DEDUCTION OF TDS THAN THE PRESCRIBED RATE. 11. LEARNED CIT DR NEXT REITERATES REVENUES TWO RE MAINING AVERMENTS THAT THE ASSESSEE HAS FOLLOWED EXCLUSIVE METHOD OF ITS INBOUND RECEIVABLES AS AGAINST INCLUSIVE METHOD FOR IMPUGNED EXPENDITUR E WHILST CLAIMING SERVICE TAX COMPONENT (SUPRA). LEARNED COUNSEL REPR ESENTING ASSESSEE CLARIFIES THAT THIS ASSESSEE IS NOT REGISTERED UNDE R THE SERVICE TAX REGIME. WHAT IT HAS DONE IT IS TO CLAIM THE IMPUGNED EXPEND ITURE AFTER MAKING THE ACTUAL PAYMENT WHICH IS DULY ALLOWABLE UNDER THE AC T. IT HAS FURTHER NOT CLAIMED ANY BENEFIT ARISING OUT OF ITS EXCLUSIVE ME THOD AS WELL. WE THEREFORE REJECT REVENUES INSTANT ARGUMENT. 12. LEARNED CIT-DRS LASTLY CONTENDS THAT THE ARGUM ENT THAT CIT(A) HAS ERRED IN BOTH LAW AS WELL AS ON FACTS IN ADOPTING J UDICIAL CONSISTENCY ON THE ISSUE OF THE IMPUGNED PAYMENTS OF 66.18 CRORES DESPITE THE FACTS INVOLVED IN THE RELEVANT PREVIOUS YEAR ARE ALTOGETHER DIFFER ENT THAN IN PRECEDING AND SUCCEEDING ASSESSMENT YEARS. THERE IS NO MATERIAL O N RECORD PIN-POINTING ANY SUCH DISTINCTION ON FACTS SUMMARIZED IN THE LOW ER AUTHORITIES FINDINGS EXTRACTED IN PRECEDING FOREGOING DISCUSSION. WE THE REFORE DO NOT FIND ANY SUBSTANCE IN REVENUES INSTANT LAST ARGUMENT AS WEL L. 13. THIS REVENUES APPEAL IS DISMISSED. 6. AS THE ISSUE IS SQUARELY COVERED IN FAVOUR OF TH E ASSESSEE BY THE DECISION OF CO- ORDINATE BENCH IN ASSESSEES OWN CASE (SUPRA) IN I. T.A. NO. 2266/KOL/2016 FOR A.Y 2011-12, AND THERE IS NO CHANGE IN FACTS AND LA W AND THE REVENUE IS UNABLE TO PRODUCE ANY MATERIAL TO CONTROVERT THE ABOVE SAID F INDINGS OF THE CO-ORDINATE BENCH. THEREFORE, RESPECTFULLY FOLLOWING THE DECISI ON OF CO-ORDINATE BENCH WE DISMISS GROUNDS OF APPEAL RAISED BY THE REVENUE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 22.01 .2020 SD/- ( S.S.GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; / DATE: 22 /01/2020 ( SB, SR.PS ) M/S HEIGHT INSURANCE SERVICES LTD. ITA NO.2163/KOL/2017 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 2 22 24 44 4 COPY OF THE ORDER FORWARDED TO: 1. ITO, WARD-2(3), KOLKATA 2. M/S HEIGHT INSURANCE SERVICES LTD. 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES