JCIT, Range-2, Jalgaon V. M/s. H.H. Patel & Company, Jalgaon

ITA 2167/PUN/2012

• Counselvise Citation: 216724514 RSA 2012
• Duration Of Justice: 2 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 10-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 02-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income
• Section: 6; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO . 2167 /PN/20 1 2 ASSESSMENT YEAR : 200 9 - 10 THE ASSTT. COMMISSIONER OF INCOME T AX, CIRCLE - 2, JALGAON VS. M/S. H.H. PATEL & COMPANY, PRABHAT GALLI, CHALISGAON, DISTT. - JALGAON (APPELLANT) (RESPONDENT) PAN NO. AABFH7284E ITA NO. 1605/PN/2013 ASSESSMENT YEAR : 2010 - 11 THE DY. COMMISSIONER OF INCOME TAX, CIRCLE - 2, JALGAON V S. M/S. H.H. PATEL & CO., PRABHAT GALLI, GHAT ROAD, CHALISGAON, DISTT. - JALGAON (APPELLANT) (RESPONDENT) PAN NO. AABFH7284E REVENUE BY: SHRI RAJESH DAMOR ASSESSEE BY: MS. DEEPA KHARE DATE OF HEARING : 10 - 1 2 - 2014 DATE OF PRONOUNCEMENT : 15 - 1 2 - 2014 ORDER PER R.S . PADVEKAR , JM : - TH ESE TWO APPEALS ARE FILED BY THE REVENUE CHALLENGING THE RESPECTIVE IMPUGNED ORDER S OF THE LD. CIT(A) - II, NASHIK, DATED 24 - 08 - 2012 AND 13 - 06 - 2013 FOR THE A.Y S . 200 9 - 10 AND 2010 - 11. 2. WE FIRST TAKE THE REVENUES APPEAL FOR THE A.Y. 2009 - 10 IN WHICH THE REVENUE HAS TAKEN THE FOLLOWING EFFECTIVE GROUNDS IN THE APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.29,21,991/ - MADE ON ACCOUNT OF DISALLOWANCE U/ S. 40A(2)(B) OF THE I.T. ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS NOT APPRECIATED THE FINDING OF THE A.O. THAT THE BORROWED FUNDS WERE 2 ITA NO S . 2176/PN/2012 AND 1605/PN/2013, M/S. H.H. PATEL & COMPANY, JALGAON INVESTED IN FDRS AND INVESTMENT IN FDRS NOT BEING PART OF BUSINESS ACTIVITY OR INCIDE NTAL TO BUSINESS OF THE ASSESSEE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT THE FUNDS BORROWED FROM RELATIVES WERE NOT UTILIZED IN BUSINESS ACTIVITY OF THE ASSESSEE THAT INVOLVES SALE/PURCHAS E OF CHEWING TOBACCO . 3. THE FACTS WHICH ARE REVEALED FROM THE RECORD AS UNDER. THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING IN CHEWING TOBACCO/JARDA. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTICED BY THE ASSE SSING OFFICER THAT THE ASSESSEE HAD TAKEN LOANS FROM RELATIVES AND THE OUTSTANDING AMOUNTS TOWARDS THE SAID LOANS AS ON 01 - 04 - 2008 WAS AT RS.4,98,93,760/ - AND AS ON 31 - 03 - 2009 RS.4,78,18,304/ - RESPECTIVELY . IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD PAID INTEREST OF RS.66,29,881/ - @ 16% TO THE DEPOSITORS. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD DEPOSITED AN AMOUNT OF RS.4.25 CRORES ON 03 - 04 - 2008 IN FDRS WITH STATE BANK OF INDIA, CHALISGAON ON INTEREST @ 9%. AS OBSERVED BY THE ASSESSING OFFICER THE FUNDS BORROWED AT 12% WERE INVESTED IN FDRS @ 9% AND DIFFERENCE WORKED OUT OF RS.12,64,521/ - ON THE AMOUNT OF RS.4.25 CRORES AND ADDED THE SAME TO THE TOTAL INCOME. THE ASSESSING OFFICER ALSO WORKED OUT EXCESS INTEREST PAID TO RE LATIVES AT RS. 7,25,143/ - AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. IN THE FURTHER OPINION OF THE ASSESSING OFFICER THE ASSESSEE PAID EXCESS INTEREST TO BANK @ 2.25% AMOUNTING TO RS.9,32,327/ - AND HE, THEREFORE, MADE FURTHER DISALLOWANCE OF T HE SAID AMOUNT U/S. 40A(2)(B) OF THE I.T. ACT. IN SUM AND SUBSTANCE THE ASSESSING OFFICER MADE THE TOTAL ADDITION OF RS.29,21,991/ - (RS.12,64,521/ - + RS.7,25,143/ - + RS.9,32,327/ - ). 4. IN THE OPINION OF THE ASSESSING OFFICER TAKING THE LOANS FROM THE REL ATIVES OF THE PARTNERS AND PAYING INTEREST @ 12% AT ONE HAND AND ON THE OTHER HAND TO KEEP THE MONEY WITH THE BANK AT LOW ER RATE INVESTING THE MONEY INTO THE FDR TO THE EXTENT OF RS.4.25 CRORES, ITSELF SHOW THAT 3 ITA NO S . 2176/PN/2012 AND 1605/PN/2013, M/S. H.H. PATEL & COMPANY, JALGAON THERE WAS NO NEED TO BORROWED FUNDS FOR THE BUSINESS PURPOSES. THE ASSESSEE CHALLENGED THE ADDITION MADE BY THE ASSESSING OFFICER BEFORE THE LD. CIT(A) AND LD. CIT(A) DELETED THE ADDITION. BEFORE THE LD. CIT(A) THE ASSESSEE MADE THE SUBMISSIONS RAISING THE FOLLOWING POINTS CHALLENGING THE ADDITION S MADE BY THE ASSESSING OFFICER : I. RAW MATERIAL REQUIRED FOR OUR PRODUCT IS AN AGRO BASED COMMODITY AND CONSEQUENTLY ITS PRODUCTION AS SUCH IS SUBJECT TO WEATHER CONDITIONS RESULTING UNCERTAINTIES AND CONSEQUENTLY MARKET FLUCTUATIONS. II. IN VIEW OF ABOVE, WE H AVE TO PURCHASE RAW MATERIAL WELL IN ADVANCE REQUIRING SUBSTANTIAL PAYMENT TO THE SUPPLIERS. III. IF WE WOULD HAVE BORROWED FROM THE BANK, WE WOULD HAVE PAID INTEREST AT 14.25% + 1 % (APPROX) MORTGAGE FEE + PROCESSING, DOCUMENTATION AND OTHER CHARGES. THE AGGR EGATE COST WOULD HAVE BEEN THE SAME. A XEROX COPY OF LETTER FROM IDBL BANK, CHALISGAON BRANCH DATED 20 - 10 - 2011 CERTIFYING THE PREVAILING INTEREST RATE FOR THE YEAR UNDER REVIEW IS ENCLOSED. IV. FURTHER, RAISING OF FUNDS FROM BANK INVOLVES A CUMBERSOME PROCEDU RE AND IS A TIME CONSUMING. V. AS AGAINST THE ABOVE, ARRANGING LOANS FROM FAMILY MEMBERS ARE EASY QUICKER AND THAT TOO WITHOUT SECURITY. AGAIN THEY ARE NOT LIKELY TO BE WITHDRAWN DURING THE PERIOD WE NEED FUNDS. VI. INTEREST TO PARTNERS IS TO BE PAID IN ACCORDA NCE WITH THE PROVISIONS OF THE PARTNERSHIP DEED. THERE IS NO BAR FOR PAYMENT AT MORE THAN 12% P.A. IF DEED PROVIDES FOR HIGHER RATE. ONLY THING IS THAT U/S. 40 (B), WHILE COMPUTING INCOME OF THE FIRM, THE INTEREST CALCULATED AT A RATE HIGHER THAN 12% P.A. WILL NOT BE ALLOWED. PARTNERS ALSO WOULD NOT BE LIABLE TO PAY ON EXCESS INTEREST IF ANY DUE TO SPECIFIC PROVISION OF SEC. 28 (V) OF THE ACT. VII. EXCEPT TWO PERSONS VIZ; SMT. SHIRALI PATEL & SMT. URVISHA PATEL OIL OTHER PARTIES ARE PAYING TAX AT THE SAME RATE AT WHICH THE FIRM IS PAYING. THUS THERE IS HARDLY ANY REVENUE LOSS. 4 ITA NO S . 2176/PN/2012 AND 1605/PN/2013, M/S. H.H. PATEL & COMPANY, JALGAON 5. THE LD. CIT(A) DELETED THE ADDITION BY GIVING THE FOLLOWING REASONS: 8. I HAVE CAREFULLY PURSUED THE ASSESSMENT ORDER, SUBMISSIONS MADE BY THE APPELLANT AS ALSO THE CONTENTIONS RAISED BY THE AR. THE AO HAS DISALLOWED PART OF THE INTEREST MAINLY ON THE GROUND THAT THE APPELLANT HAD INVESTED IN FD WHILE SIMULTANEOUSLY MAKING BORROWINGS. HOWEVER, NO DISALLOWANCE COULD BE JUSTIFIED ON SUCH A GROUND. THE FACT THAT BORROWING WAS MADE FOR THE PURPOSE OF BUSINESS IS NOT IN DISPUTE AND ONCE THE FACT OF BORROWING FOR THE PURPOSE OF BUSINESS IS ESTABLISHED, INTEREST HAS TO BE ALLOWED. NECESSITY OF BORROWING COULD NOT BE THE CRITERIA FOR ALLOWING OR DISALLOWING ANY EXPENDITURE. AGAIN, THE AO HAS TA KEN A VIEW THAT THE RELATIVES WOULD HAVE EARNED AT 9% ONLY HAD THEY INVESTED IN FD WITH BANK. IN MY OPINION WHAT THE LENDERS WOULD HAVE DONE HAD THEY NOT INVESTED WITH THE ASSESSEE FIRM IS TOTALLY IRRELEVANT FACTOR. 9. THE AO HAS ALSO MADE A COMPARISON OF RATE AT WHICH INTEREST IS PAID TO PARTNERS AND OTHERS. THIS IS ALSO NOT PROPER SINCE BOTH STANDS ON DIFFERENT FOOTING. AGAIN RATE OF INTEREST TO PARTNERS IS SUBJECT TO PROVISIONS OF SECTION 40(B) OF THE ACT. THE ASSESSEE HAS RELIED UPON SEVERAL DECISIONS, WHEREIN IT HAS BEEN HELD THAT ONCE THE CAPITAL WAS BORROWED FOR THE PURPOSE OF BUSINESS IT WAS IMMATERIAL HOW THE BORROWED MONEY WAS APPLIED. IN VEECUMSEES V. CIT (220, ITR, 185) THE HON'BLE SC HAS HELD THAT EVEN IF THE BORROWED MONEY IS APPLIED IN MAKING INVESTMENT WHICH YIELD DIVIDEND, THE ENTIRE INTEREST PAID ON BORROWING SHOULD BE ALLOWED AS DEDUCTION FOR COMPUTING BUSINESS INCOME. IN THIS CASE THE APPELLANT HAD INVESTED IN FD ITS SURPLUS FUNDS WHEN NOT REQUIRED AND INTEREST ON FD IS FULLY OFFERED TO TA X. AFTER ALL, IT WAS A BUSINESS DECISION. RECENTLY, ITAT JAIPUR BENCH IN RAM AVTAR GARG V. ITO (2010) 4, ITR (TRIB) 245 HAS HELD THAT CONSIDERING CUMBERSOME BANKING FORMALITIES INVOLVING NUMEROUS COMPLIANCE, INTEREST PAYMENT AT 24 % WAS NEITHER EXCESSIVE N OT UNREASONABLE AND NO DISALLOWANCE OF INTEREST IN EXCESS OF 12% WAS JUSTIFIED. TO THE SAME EFFECT IS THE DECISION OF THE MUMBAI ITAT IN BHARTI AIRTEL LTD.. V. ACIT (2010) 41 SOT 175. AGAIN IT HAS BEEN HELD IN THE FOLLOWING CASES THAT NO DISALLOWANCE CAN B E MADE ON THE GROUND THAT THE ASSESSEE HAD ENOUGH FUNDS AND SHOULD NOT HAVE BORROWED THE MONEY. CIT V. BOMBAY SAMACHAR LTD., 74, ITR, 723 BOM. CIT V. GAUTAM MOTORS, 334, ITR, 326; DELHI. SHIVANGA BUILDERS V. ACIT 316, ITR (AT) 433; AHD. 5 ITA NO S . 2176/PN/2012 AND 1605/PN/2013, M/S. H.H. PATEL & COMPANY, JALGAON 10. FURTHER, ALL T HE DEPOSITORS WHO ARE RELATIVES (EXCEPT IN TWO CASES WHERE INTEREST PAID COMES TO ? 4,01,854/ - ) ARE ASSESSED TO TAX AND ARE SUBJECT TO SAME RATE OF TAXATION VIZ; 30%. IN THE PAST (INCLUDING IN A. Y. 2008 - 09 WHERE ASSESSMENT WAS COMPLETED U/S. 143 (3) OF TH E ACT) NO DISALLOWANCE WAS MADE OUT OF THE INTEREST PAID. THE AO HAS MERELY ADOPTED RATE AT 12 % WITHOUT TAKING INTO ACCOUNT THE MARKET CONDITION AND CIRCUMSTANCES UNDER WHICH THE UNSECURED LOANS WERE TAKEN. AGAIN, UNSECURED LOANS FROM RELATIVES, AS RIGHTL Y POINTED OUT BY THE LEARNED AR ARE NOT LIKELY TO THE WITHDRAWN. FURTHER IF WITHDRAWN, SUCH FUNDS MIGHT NOT BE AVAILABLE WHEN REQUIRED. THE HON'BLE ITAT, NEW DELHI IN ACIT V. M/S. FRESCO MEC AUTOCAMP (P) LTD., (SUPRA) HAD CONSIDERED RATE OF 15% ON UNSECURE D LOANS FROM RELATIVES (WHEN THE BANK RATE WAS AROUND 12%) AS REASONABLE AND FAIR. IN THE CASE UNDER REFERENCE, THE BANK RATE WAS AROUND 14.25 % EXCLUDING EXPENDITURE OF 1 % ON PROCESSING OF LOAN ETC. 11. CONSIDERING THE TOTALITY OF FACTS AND SETTLED LEGAL POSITION, IN MY OPINION THERE IS NO JUSTIFICATION FOR DISALLOWANCE OF ANY PART OF INTEREST PAID. THE DISALLOWANCES RS.29,21,991/ - IN THE AGGREGATE ARE THEREFORE, CANCELLED. NOW, THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD THE PARTIES AND PER USED THE RECORD. IT IS SEEN THAT IN RESPECT OF THE DISALLOWANCE U/S. 36(1)( III) , THE RESERVATION OF THE ASSESSING OFFICER IS THAT THE ASSESSEE MADE THE FD WITH THE STATE BANK OF INDIA, CHALISGAON TO THE EXTENT OF RS.4.25 CRORES AND EARNED THE LOWER RATE O F INTEREST W HEN AT THE SAME TIME THE ASSESSEE HAD UNSECURED LOANS TO THE EXTENT OF RS. 4.75 CRORES ON THE DATE OF BALANCE SHEET ON WHICH THE ASSESSEE HAS PAID INTEREST @ 12% ON THE SAID LOANS. THE ASSESSEE FILED THE RECONCILIATION BEFORE THE ASSESSING OFFI CER WHICH IS REPRODUCED ON PAGE NO. 3 OF THE ASSESSMENT ORDER IN WHICH THE BREAKUP OF OUTSTANDING AS ON 31 - 03 - 2009 IS GIVEN. IT IS SEEN THAT DURING THE YEAR THE SALARY WAS ALSO CREDITED TO THE PARTNER OF THE HUF AND THE INTEREST WAS ALSO CREDITED. THERE WERE ANOTHER TRANSFER ENTRY IN RESPECT OF SAME ACCOUNT ALSO AS WELL AS WITHDRAWAL TO THE EXTENT OF RS.1,31,51,907/ - . AS EXPLAINED BY THE ASSESSEE, THE ASSESSEE HAS ONLY BORROWED RS.26 LACS. 6 ITA NO S . 2176/PN/2012 AND 1605/PN/2013, M/S. H.H. PATEL & COMPANY, JALGAON THE ASSESSEE ALSO EXPLAINED THAT THERE IS TEDIOUS PROCEDURE IF T HE MONEY IS BORROWED FROM THE BANK AND EVEN THEN RATE OF INTEREST IS 14.25% + ADDITIONAL MORTGAGE FEE OF 1%, DOCUMENTATION PROCESSING ETC. THE ASSESSEE ALSO EXPLAINED THAT AS PER THE PROVISIONS OF SEC. 40(B) WHILE COMPUTING INCOME OF THE FIRM, THE INTERES T @ 12% P.A. IS ALLOWABLE ON CREDIT BALANCES ON THE PARTNERS ACCOUNTS . IN THIS CASE THERE IS NO DISPUTE ABOUT THE FACT THAT THE BORROWING WAS MADE FOR THE PURPOSE OF BUSINESS . T HE LOGIC APPLIED BY THE ASSESSING OFFICER IF TESTED FROM THE B USINESS MANS P OINT OF VIEW THEN SAME CANNOT BE ACCEPTED. MERELY VARIATION IN THE RATE OF INTEREST CANNOT BE THE REASONS FOR MAKING THE DISALLOWANCE. IN OUR OPINION NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE LD. CIT(A) AS THE REASONS GIVEN BY LD. CIT(A) FOR DELE TING ADDITIONS ARE WELL SUPPORTED BY THE DECISIONS OF THE CO - ORDINATE BENCHES . ACCORDINGLY, SAME IS CONFIRMED. 7. NOW, WE TAKE THE REVENUES APPEAL FOR THE A.Y. 2010 - 11 . THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS IN THE APPEAL: 1. ON THE FACTS AND IN TH E CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 15,22,602/ - MADE ON ACCOUNT OF DIFFERENCE IN RATE OF BORROWING AND RATE ON DEPOSITS MADE IN BANKS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS NOT APPR ECIATED THE FINDING OF THE A.O. THAT THE BORROWED FUNDS WERE INVESTED IN FDRS AND INVESTMENT IN FDRS NOT BEING PART OF BUSINESS ACTIVITY OR INCIDENTAL TO BUSINESS OF THE ASSESSEE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.5,41,923/ - BEING EXCESS INTEREST PAID ON UNSECURED LOANS. 4. ON THE FATS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.6,96,758/ - BEING EXCESS INTEREST PAID TO THE PARTNERS OF THE FIRM . 8. IN THE YEAR THE ASSESSING OFFICER AGAIN RAISED HIS RESERVATION FOR ALLOWING THE INTEREST PAYMENT. AS OBSERVED BY THE ASSESSING OFFICER , THE 7 ITA NO S . 2176/PN/2012 AND 1605/PN/2013, M/S. H.H. PATEL & COMPANY, JALGAON ASSESSEE HAS INVESTED BY WAY OF FD IN THE STATE BANK OF INDIA, CHALISGAON OF RS.4.60 CRORES. THE SAID FDRS CARRIED DIFFERENT RATES OF INTEREST RANGING FROM 8.75% TO 8.10%. AS OBSERVED BY THE ASSESSING OFFICER THE ASSESSEE HAS UNSECURED LOAN TO THE EXTENT OF RS.2.45 CRORES DURING THE YEAR AND ON THE SAID LOAN THE ASSESSEE HAS PAID THE INTEREST @ 16% P.A. THE ASSESSING OFFICER, THEREFORE, PROCEEDED TO DISALLOW THE INTEREST PORTION TO THE EXTENT OF DIFFERENTIAL RATE OF INTEREST I.E. RATE OF INTEREST ON FDRS AND INTEREST PAID ON UNSECURED LOAN. THE ASSESSEE FILED THE REPLY AS IN THE A.Y. 2009 - 10 AND DISALLOWED P ART OF INTEREST BY WORKING OUT THE DIFFERENCE I.E. RATE OF INTEREST EARNED ON THE FDRS AND RATE OF INTEREST PAID TO THE UNSECURED LOAN WHICH IS ADMITTEDLY @ 16%. THE ASSESSING OFFICER TOOK THE BANK INTEREST @ 14.25% AND WORKED OUT THE DIFFERENCE @ 1.75% A ND DISALLOWED THE SAME TO THE EXTENT OF RS.20,64,525/ - . 9. THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEES FURTHER CLAIM OF INTEREST OF 2.25% IS ALSO NOT TO BE ALLOWED AS THE BANK RATE OF INTEREST O N FDR IS ONLY 8.10% AND INTEREST ON PARTNERS CAP ITAL IS 12%. IN THE OPINION OF THE ASSESSING OFFICER , THE UNSECURED LOAN CREDITORS WERE EITHER THE PARTNERS OR RELATIVES OF THE PARTNERS AND MONEY INVESTED IN BANK COULD HAVE BEEN USED IN BUSINESS. HE, THEREFORE, MADE THE FURTHER DISALLOWANCE OF RS.6,96, 758/ - . IN SUM AND SUBSTANCE THE ASSESSING OFFICER MADE THE ADDITION BY DISALLOWING THE INTEREST ON THE FOLLOWING REASONS: A. THE R ATE OF INTEREST ON FDRS AND INTEREST PAID TO THE RELATIVES OF THE PARTNERS WHICH IS @ 12% OF RS.15,22,602/ - . B. THE INTEREST PAID T O THE UNSECURED LOANS CREDITORS AND THE BANK RATE , THE DIFFERENCE BETWEEN THE INTEREST PAID TO THE UNSECURED LOANS CREDITORS AND BANK RATES I.E. 16% - 14.25% = 1.75% OF RS.5,41,923/ - . C. THE DIFFERENCE BETWEEN THE BANK RATE ON THE PRESUMPTION IF UNSECURED LOA NS CREDITORS WOULD HAVE KEPT THE MONEY INTO THE 8 ITA NO S . 2176/PN/2012 AND 1605/PN/2013, M/S. H.H. PATEL & COMPANY, JALGAON BANK , THE INTEREST RATE THEY GOT AND INTEREST RATE OF THE ASSESSEE FIRM GIVEN TO THEM . THE ASSESSING OFFICER, ACCORDINGLY, MADE THE TOTAL ADDITION OF RS.27,61,283/ - . THE ASSESSEE CHALLENGED THE ADDITION BEFO RE THE LD. CIT(A) AND LD. CIT(A) FOLLOWING HIS REASONS FOR THE A.Y. 2009 - 10 DELETED THE ENTIRE ADDITION. NOW, THE REVENUE IS IN APPEAL BEFORE US. 10. WE HAVE HEARD THE PARTIES. WE HAVE ALREADY DECIDED THE IDENTICAL ISSUE IN THE A.Y. 2009 - 10. THE REASON S GIVEN BY THE ASSESSING OFFICER ARE VERBATIM IN THE A.Y. 2009 - 10 MORE SO THE BASIS OF THE DISALLOWANCE. WE, THEREFORE, FOLLOWING OUR REASONS IN THE A.Y. 2009 - 10 , ALSO CONFIRM THE ORDER OF THE LD. CIT(A) IN THE A.Y. 2010 - 11 AND ALL THE GROUNDS TAKEN BY TH E REVENUE ARE DISMISSED. 11. IN THE RESULT, BOTH THE REVENUES APPEAL ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 15 - 1 2 - 201 4 SD/ - SD/ - ( G.S. PANNU ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED : 15 TH DECEMBER, 201 4 RK/PS COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) - I I , NASHIK 4 THE CIT - I I , NASHIK 5 6 THE DR, ITAT, B BENCH, PUNE. GUARD FILE. //TRUE COPY// BY ORDER ASSISTANT REGISTRAR INCOME TAX APPEL LATE TRIBUNAL PUNE