The DCIT, Circle -5, Ahmedabad V. P.G. Foils Ltd., Ahmedabad

ITA 2184/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6257 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-11-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 09-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KARTAR SINGH
• Assessee Lawyers: S N SOPARKAR
• Keywords: Business expenditure; Question of law; Revenue expenditure; Capital expenditure
• Section: 10(10D); 37(1); 148; 28; 10

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI G. D. AGARWAL, VP AND BHAVNESH SAINI , JM) ITA NO.2184/AHD/2009 A. Y.: 2006-07 THE D. C. I. T., CIRCLE-5, 2 ND FLOOR, C. U. SHAH CHAMBERS, ASHRAM ROAD, AHMEDABAD 380009 VS M/S. P. G. FOILS LTD., 6, NAPTUNE TOWER, ASHRAM ROAD, AHMEDABAD PA NO. AAACP 9274 C (APPELLANT) (RESPONDENT) APPELLANT BY SHRI KARTAR SINGH, DR RESPONDENT BY SHRI S. N. SOPARKAR, AR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-XI , AHMEDABAD DATED 03-04-2009, FOR ASSESSMENT YEAR 2006-07, CHAL LENGING THE DELETION OF ADDITION OF RS.4,15,20,000/- ON ACCOUNT OF KEYMAN INSURANCE PREMIUM. 2. BRIEFLY, THE FACTS OF THE CASE ARE, IT WAS THE C ONTENTION OF THE AO THAT AS PER GUIDELINES GIVEN BY M/S. BAJAJ ALLIANZE LIFE INSURANCE COMPANY LTD. FOR TAKING POLICY THE ASSESSEE IS NOT ENTITLED TO MAKE SUCH HUGE PREMIUM PAYMENT. THEREFORE, HE ALLOWED ON LY RS.34,80,000/- AGAINST THE CLAIM OF THE ASSESSEE OF RS.4,50,00,000/- AND ACCORDINGLY DISALLOWED RS.4,15,20,000/-. IT WAS NOTED THAT THE ASSESSEE HAS TAKEN POLICY DURING THE PREVIOUS ASSES SMENT YEAR FOR A SUM ASSURED OF RS.22,50,00,000/- IN THE NAME OF THE DIRECTORS SHRI ABHAY P. SHAH FOR A SUM ASSURED OF RS.11,25,00,000/ - AND THE ITA NO.2184/AHD/2009 DCIT CIRCLE-5, AHMEDABAD VS M/S. P. G. FOILS LTD. 2 MANAGING DIRECTOR SHRI PANKAJ P. SHAH FOR A SUM ASS URED OF RS.11,25,00,000/-. THEREFORE, THE TOTAL SUM ASSURED WAS RS.22,50,00,000/-. IT WAS SUBMITTED THAT THE AO IS NOT JUSTIFIED TO DISALLOW THE ABOVE PREMIUM IN VIEW OF THE FACT THAT M/S. BAJAJ ALLIANZE LIFE INSURANCE COMPANY LTD. HAS ACCEPTED THE INSURA NCE POLICY. THEREFORE, THE AO CANNOT TAKE SUPPORT OF THE GUIDEL INES GIVEN BY M/S. BAJAJ ALLIANZE LIFE INSURANCE COMPANY LTD. FOR MAK ING THE DISALLOWANCE PREMIUM PAYMENT. IT WAS ALSO SUBMITTED AS PER INCOME TAX ACT, U/S 31(1) THE ENTIRE PAYMENT OF KEYMAN INS URANCE PREMIUM IS ALLOWABLE AND CBDT HAS GIVEN CLARIFICATION VIDE CIRCULAR NO.762 DATED 18-02-1998. THEREFORE, THE AO SHOULD NOT HAVE DISALLOWED THE CLAIM IN PART. IT WAS FURTHER SUBMITTED THAT SIMILA R CLAIM WAS MADE IN THE PRECEDING ASSESSMENT YEAR 2005-06 WHICH HAS BEE N ACCEPTED BY THE DEPARTMENT. IT WAS BRIEFLY SUBMITTED IN THE WRI TTEN SUBMISSION FILED BEFORE THE LEARNED CIT(A) THAT THE ASSESSEE IS A PU BLIC LIMITED COMPANY AND OBTAINED KEYMAN INSURANCE POLICY AND T HE INSURANCE COMPANY HAS TAKEN PRIOR APPROVAL FROM THE HIGHER AU THORITIES FOR EXCESS SUM ASSURED AS PER I. R. D. A. GUIDELINES, T HEREFORE, KEYMAN INSURANCE POLICY IS A VALID CONTRACT BETWEEN THE PA RTIES AND AS SUCH IT WAS ALLOWABLE DEDUCTION. IT WAS FURTHER SUBMITTED T HAT THE POSITION IS CLEAR IN THE BOARD CIRCULAR AND THAT IN THE YEAR OF RECEIPT THE KEYMAN INSURANCE PREMIUM HAS BEEN MADE TAXABLE ACCORDING T O SECTION 28 (VI) OF THE IT ACT. SEVERAL DECISIONS WERE RELIED U PON IN SUPPORT OF THE CONTENTION. THE LEARNED CIT(A) ACCEPTED THE CLAIM O F THE ASSESSEE AND HELD THAT SIMILAR CLAIM IS ALREADY ALLOWED IN A SSESSMENT YEAR 2005-06 AND FURTHER THE AO ACCEPTED THE CORRECTNESS OF THE CLAIM OF ITA NO.2184/AHD/2009 DCIT CIRCLE-5, AHMEDABAD VS M/S. P. G. FOILS LTD. 3 THE ASSESSEE BUT ACCEPTED THE CLAIM PARTLY. ADDITIO N WAS ACCORDINGLY DELETED. 3. THE LEARNED DR RELIED UPON THE ORDER OF THE AO A ND REFERRED TO THE CIRCULAR ISSUED BY I. R. D. A. DATED 30-01-2006 , FILED COPY OF COMPOSITION OF AUTHORITY AND ITS DUTIES AND POWERS AND SUBMITTED THAT SINCE THE POLICY WAS TAKEN AGAINST GUIDELINES ISSUE D BY I. R.D. A., THEREFORE, IT WAS AGAINST PUBLIC POLICY AND WAS NOT ALLOWABLE DEDUCTION U/S 37(1) OF THE IT ACT. HE HAS SUBMITTED THAT UNDER PROVISO TO SECTION 10 (10D) OF THE IT ACT, POLICY COULD BE TAKEN FOR ONE PERSON ONLY, THEREFORE, THE LEARNED CIT(A) SHOULD NOT HAVE ALLOWED THE CLAIM OF THE ASSESSEE. 4. ON OTHER HAND, THE LEARNED COUNSEL FOR THE ASSES SEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW A ND SUBMITTED THAT THE CLAIM OF THE ASSESSEE WAS FOUND TO BE GENU INE BY THE AO. HE HAS SUBMITTED THAT THE AO HAS NOT DISPUTED THAT KEYMAN INSURANCE PREMIUM IS ALLOWABLE AS BUSINESS EXPENDIT URE BUT HAS GONE BY THE FACT ONLY THAT THE LITERATURE OF M/S. B AJAJ ALLIANZE INSURANCE COMPANY LTD. PROVIDED THE CRITERIA FOR TH E SUM ASSURED IN THIS TYPE OF POLICIES AND SINCE HUGE AMOUNT IS INSU RED WHICH IS AGAINST THE GUIDELINES ISSUED BY INSURANCE REGULATO RY AND DEVELOPMENT AGENCIES (IRDA). HE HAS SUBMITTED THAT THE INSURANCE COMPANY ISSUED A CERTIFICATE TO THAT EFFECT (PB-24) IN WHICH IT WAS CLARIFIED THAT THE GUIDELINES OF IRDA ARE NOT COMPU LSORY BUT SIMPLY GUIDELINES AND THAT POLICY IN THE CASE OF THE ASSES SEE WAS OBTAINED WITH THE APPROVAL OF THEIR SENIORS AS PER THE GUIDE LINES. IT WAS ALSO ITA NO.2184/AHD/2009 DCIT CIRCLE-5, AHMEDABAD VS M/S. P. G. FOILS LTD. 4 CLARIFIED THAT THE AMOUNT IS TAXABLE AT THE TIME OF MATURITY. HE HAS SUBMITTED THAT ACCORDING TO LAW, THE RECEIPT ON ACC OUNT OF KEYMAN INSURANCE POLICY IS TAXABLE UNDER THE LAW. HE HAS S UBMITTED THAT IN THE ASSESSMENT YEAR 2005-06 CLAIM OF THE ASSESSEE H AS BEEN ALLOWED BUT THE REVENUE DEPARTMENT REOPENED THE ASS ESSMENT U/S 148 OF THE IT ACT WHICH HAS BEEN QUASHED BY THE HON BLE GUJARAT HIGH COURT IN CIVIL APPEAL NO.12910/2010 DATED 25-1 -2011. COPY OF THE ORDER IS PLACED ON RECORD. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE MADE SIMILAR CLAIM IN THE ASSESSMENT YEAR 2005-06 ON WHICH CLAIM OF THE ASSES SEE WAS ALLOWED FOR DEDUCTION. THE REVENUE DEPARTMENT REOPE NED THE ASSESSMENT FOR ASSESSMENT YEAR 2005-06 BUT THE HON BLE GUJARAT HIGH COURT QUASHED THE SAME VIDE ORDER DATED 25-01- 2011. THUS, THE ASSESSMENT ORDER FOR 2005-06 HAS REACHED FINALI TY WHEREBY SIMILAR CLAIM OF THE ASSESSEE HAS BEEN ALLOWED BY T HE REVENUE DEPARTMENT, THEREFORE, THE FINDINGS OF THE LEARNED CIT(A) CANNOT BE SAID TO BE PERVERSE OR AGAINST THE LAW. THE INSURAN CE COMPANY HAS ALSO CLARIFIED VIDE THEIR LETTER (PB-24) THAT SUCH POLICY WAS OBTAINED AFTER APPROVAL TAKEN FROM THE SENIORS; THEREFORE, I T WAS A VALID CONTRACT BETWEEN THE PARTIES WHICH CAN NOT BE TAKEN ADVERSELY BY THE REVENUE DEPARTMENT. FURTHER, THE LEARNED DR FILED C OPY OF THE CIRCULAR OF THE IRDA DATED 30-01-2006 WHICH WAS ISS UED BECAUSE DESPITE CIRCULAR SOME INSURERS WERE SELLING PARTNER SHIP INSURANCE POLICIES THROUGH ENDOWMENT OR UNIT LINK PLAN. SUCH IS NOT THE FACT IN THE CASE OF THE ASSESSEE. SINCE A VALID INSURANCE C ONTRACT IS ITA NO.2184/AHD/2009 DCIT CIRCLE-5, AHMEDABAD VS M/S. P. G. FOILS LTD. 5 EXECUTED BETWEEN THE PARTIES AS PER LAW AND ACTED U PON BY THE PARTIES, THEREFORE, IT CANNOT BE TREATED AS OFFENCE OR PROHIBITED BY LAW OR AGAINST PUBLIC POLICY. THE CIRCULAR OF IRDA REFE RRED BY THE LEARNED DR WOULD NOT BE RELEVANT HERE. NO CASE IS MADE OUT BY THE AO THAT ONLY ONE POLICY CAN BE TAKEN UNDER THE PROVISIONS O F SECTION 10(10D) OF THE IT ACT. ITAT AHMEDABAD BENCH IN THE CASE OF M/S. PARMESHWAR ENGINEERS VS ACIT IN ITA NO.4369/AHD/200 7 CONSIDERED THE ISSUE IN DETAIL AND VIDE ORDER 20-08-2010 ALLOWED THE CLAIM OF THE ASSESSEE BY CONSIDERING THE BOARD CIRCULAR NO.762 DATED 18-02-1998. THE FINDINGS OF THE TRIBUNAL IN T HIS CASE FROM PARA 7 TO 9 ARE REPRODUCED AS UNDER: 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE HAS RELIED UPON THE CIRCULAR NO.762 DATED 18-02-1998 PARA 14.4 OF WHICH ARE REPRODUCED AS UNDER: 14.4 THE ACT ALSO LAYS DOWN THAT THE SUMS RECEIVED BY THE SAID ORGANISATION ON SUCH POLICIES, BE TAXED AS BUSINESS PROFIT; THE SURRENDER VALUE OF THE POLICY, ENDORSED IN FAVOUR OF THE EMPLOYEE (KEYMAN), OR THE SUM RECEIVED BY HIM AT THE TIME OF RETIREMENT BE TAKEN AS PROFITS IN LIEU OF SALARY FOR TAX PURPOSES; AND IN CASE OF OTHER PERSONS HAVING NO EMPLOYER-EMPLOYEE RELATIONSHIP, THE SURRENDER VALUE OF THE POLICY OR SUM RECEIVED UNDER THE POLICY BE TAKEN AS INCOME FROM OTHER SOURCES AND TAXED ACCORDINGLY. THE PREMIUM PAID ON THE KEYMAN INSURANCE POLICY IS ALLOWED AS BUSINESS EXPENDITURE. THE PREMIUM PAID ON KIP HAS BEEN ALLOWED AS BUSINESS EXPENDITURE. THE AMOUNT RECEIVED IN KIP ITA NO.2184/AHD/2009 DCIT CIRCLE-5, AHMEDABAD VS M/S. P. G. FOILS LTD. 6 HAS BEEN MADE TAXABLE AND ACCORDING TO SECTION 28 (VI) OF THE IT ACT WITH EFFECT FROM 01-10-1996 WHIC H PROVIDES THAT A SUM RECEIVED UNDER KIP INCLUDING TH E SUM ALLOCATED BY WAY OF BONUS ON SUCH POLICY WILL B E TREATED AS INCOME CHARGEABLE TO INCOME TAX UNDER TH E HEAD PROFIT AND GAINS OF BUSINESS OR PROFESSION. EXPLANATION TO SECTION 10(10D) IS REPRODUCED ABOVE IN THE FINDING OF THE LEARNED CIT(A) FIND MENTION T HE WORD IS OR WAS CONNECTED IN ANY MANNER WHATSOEVER WITH THE BUSINESS WOULD HAVE WIDER MEANING. THE SAME IS CONSIDERED BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. B. N. EXPORTS (SUPRA) AND IT WAS HELD AS UNDER: HELD, FOR THE PURPOSE OF S. 10(10D), A KEYMAN INSURANCE POLICY MEANS A LIFE INSURANCE POLICY TAKEN BY A PERSON ON THE LIFE OF ANOTHER PERSON WHO IS OR WAS IN EMPLOYMENT AS WELL AS ON A PERSON WHO IS OR WAS CONNECTED IN ANY MANNER WHATSOEVER WITH THE BUSINESS OF THE SUBSCRIBER. THE WORD IS OR WAS CONNECTED IN ANY MANNER WHATSOEVER WITH THE BUSINESS OF THE SUBSCRIBER ARE WIDER THAN WHAT WOULD BE SUBSUMED UNDER A CONTRACT OF EMPLOYMENT. THE LATER PART MAKES IT CLEAR THAT A KEYMAN INSURANCE POLICY FOR THE PURPOSES OF CL. (10D) IS NOT CONFINED TO A SITUATION WHERE THERE IS A CONTRACT OF EMPLOYMENT. CIRCULAR NO.762, DATED 18 TH FEB., 1998 ISSUED BY THE CBDT CLARIFIES THE POSITION BY STIPULATING THAT THE PREMIUM PAID FOR A KEYMAN INSURANCE POLICY IS ALLOWABLE AS BUSINESS EXPENDITURE. THERE IS A FINDING OF FACT BY THE TRIBUNAL THAT THE FIRM HAD NOT TAKEN FOR THE PERSONAL BENEFIT OF THE PARTNER, BUT FOR THE BENEFIT OF THE FIRM, IN ORDER TO PROTECT ITSELF AGAINST THE SET BACK THAT MAY BE CAUSED ON ACCOUNT OF THE DEATH OF A PARTNER. THE OBJECT AND PURPOSE OF A KEYMAN INSURANCE POLICY IS TO PROTECT THE BUSINESS AGAINST A FINANCIAL SET ITA NO.2184/AHD/2009 DCIT CIRCLE-5, AHMEDABAD VS M/S. P. G. FOILS LTD. 7 BACK WHICH MAY OCCUR, AS A RESULT OF A PREMATURE DEATH, TO THE BUSINESS OR PROFESSIONAL ORGANIZATION. THERE IS NO RATIONAL BASIS TO CONFINE THE ALLOWABILITY OF THE EXPENDITURE INCURRED ON THE PREMIUM PAID TOWARDS SUCH A POLICY ONLY TO A SITUATION WHERE THE POLICY IS IN RESPECT OF THE LIFE OF AN EMPLOYEE. A KEUMAN INSURANCE POLICY IS OBTAINED ON THE LIFE OF A PARTNER TO SAFEGUARD THE FIRM AGAINST A DISRUPTION OF THE BUSINESS THAT MAY RESULT DUE TO THE PREMATURE DEATH OF A PARTNER. THEREFORE, THE EXPENDITURE WHICH IS LAID OUT FOR THE PAYMENT OF PREMIUM ON SUCH A POLICY IS INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. HENCE, THE APPEAL BY THE REVENUE DOES NOT RAISE ANY SUBSTANTIAL QUESTION OF LAW. 8. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO FILED COPY OF THE KEYMAN INSURANCE POLICY IN THE MATTER I N RESPECT OF TWO OF THE PARTNERS IN WHICH PAYMENT OF RS.10,00,000/- AND RS.1,00,000/- HAVE BEEN PAID. IN THIS KIP, THE ASSESSEE FIRM IS A PROPOSER FIRM A ND THE NAME OF THE LIFE INSURED IS THE PARTNER OF T HE ASSESSEE FIRM. THE PERIODICAL PREMIUM PAYMENT IS PRESCRIBED YEARLY AND THAT THE BENEFITS OUT OF THE POLICY WAS PAYABLE TO THE PROPOSER I.E. THE ASSESSE E FIRM. IN THE CASE OF DISSOLUTION OF PARTNERSHIP FIR M FOR ANY REASON OTHER THAN DEATH OF ANY OF THE PARTNERS INSURED UNDER THE POLICY, THAN THE MENTIONED POL ICY SHALL BE EITHER SURRENDERED TO THE COMPANY FOR ITS CASH VALUE IF ANY OR MAY PAID UP FOR VALUE IF ANY A S ACQUIRED UNDER THE POLICY AS ON THE DATE OF THE DISSOLUTION OF THE PARTNERSHIP AND SUCH PAID UP POLICY SHALL BE ABSOLUTELY ASSIGNED IN FAVOUR OF TH E PARTNERS INSURED UNDER THE POLICY. IT WOULD MEAN TH AT THE ASSESSEE FIRM HAD NOT TAKEN INSURANCE FOR THE PERSONAL BENEFIT OF THE PARTNERS BUT FOR THE BENEFI T OF THE FIRM, IN ORDER TO PROTECT ITSELF AGAINST THE SE T BACK ITA NO.2184/AHD/2009 DCIT CIRCLE-5, AHMEDABAD VS M/S. P. G. FOILS LTD. 8 THAT MAY BE CAUSED ON ACCOUNT OF DEATH OF A PARTNER . THEREFORE, THE ASSESSEE FIRM BEING PROPOSER AND ULTIMATE BENEFICIARY OUT OF KIP HAS BEEN ABLE TO PR OVE THAT POLICY WAS OBTAINED WITH THE OBJECT TO PROTECT THE INTEREST OF THE ASSESSEE FIRM IN THE EVENT OF DEATH OF ANY OF THE PARTNERS. THEREFORE, THE KIP IS OBTAINED BY THE ASSESSEE FIRM FOR THE PURPOSE OF ITS BUSINESS. IN THE CASE OF DISSOLUTION, THE BENEFITS WOULD GO TO T HE PARTNERS MEANING THEREBY THE PARTNERS OF THE ERSTWHILE FIRM. IN THAT EVENT, NO PERSONAL BENEFIT HAS BEEN ASSIGNED TO THE PARTNERS. THUS, THE ASSESSEE FIRM PROVED THAT IT HAS TAKEN THE KIP FOR ITS PARTN ERS WHO ARE CONNECTED WITH THE BUSINESS OF THE ASSESSEE FIRM EXCEPT THE SLEEPING PARTNER. THE PARTNERS ARE DIRECTLY CONNECTED WITH THE BUSINESS OF THE ASSESSE E FIRM AND ARE KEY PERSONS TO TAKE DECISION IN THE BUSINESS OF THE ASSESSEE. AS NOTED ABOVE, THE POLIC Y WAS TAKEN FOR THE BENEFIT OF THE BUSINESS OF THE ASSESSEE, THEREFORE, THE AMOUNT INCURRED FOR OBTAINING KIP POLICY SHALL HAVE TO BE CONSIDERED AS REVENUE EXPENDITURE. THE KIP IS NOT CONFINED TO A SITUATION WHERE THERE IS A CONTRACT OF EMPLOYMENT, PREMIUM OF KIP OF PARTNERS OF THE FIRM IS WHOLLY AN D EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND IS ALLOWABLE AS BUSINESS EXPENDITURE. THE SAME VIEW IS TAKEN BY THE ITAT AHMEDABAD BENCH IN THE CASE OF M/S. GEM ART (SUPRA) IN WHICH DEPARTMENTAL APPEAL HAS BEEN DISMISSED ON THE IDENTICAL ISSUES. THE VIE W OF THE AO THAT IT IS CAPITAL EXPENDITURE IS NEGATED BY THE LEARNED CIT(A) AND THERE IS NO CHALLENGED TO TH E FINDING OF THE LEARNED CIT(A) IN THIS REGARD. SINCE THE AMOUNT IS LAID OUT WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND THAT ACCORDING TO SECTION 28(VI) OF THE IT ACT WITH EFFECT FROM 01-10-1996 TH E SUM RECEIVED UNDER KIP IS TAXABLE INCOME, THEREFORE , THE AUTHORITIES BELOW SHOULD HAVE HELD THAT THE AMOUNT INCURRED BY THE ASSESSEE FOR OBTAINING KIP WAS A REVENUE EXPENDITURE EXCEPT IN THE CASE OF SLEEPING PARTNER WHO HAS NOT BEEN TAKING ANY ITA NO.2184/AHD/2009 DCIT CIRCLE-5, AHMEDABAD VS M/S. P. G. FOILS LTD. 9 ACTIVE PART IN THE BUSINESS OF THE ASSESSEE AND HAD NOT BEEN CONNECTED WITH DAY TO DAY BUSINESS ACTIVIT Y OF THE ASSESSEE. 9. CONSIDERING THE ABOVE DISCUSSIONS, WE ARE OF THE VIEW THAT KIP OBTAINED BY THE ASSESSEE FIRM IN THE NAMES OF THE PARTNERS MR. ASHISHBHAI M. AMIN ON PAYMENT OF RS.10,00,000/- IS ALLOWABLE AS REVENUE EXPENDITURE. WE ACCORDINGLY, SET SIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ADDITION OF RS.10,00,000/-. THE ADDITION OF RS.1,00,000/- IS HOWEVER, CONFIRMED IN RESPECT OF THE SLEEPING PARTN ER. IN THE RESULT, GROUND NO.1 OF THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 6. CONSIDERING THE FACTS IN THE LIGHT OF THE ABOVE DECISION, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) IN DELETING THE ADDITION. ALL THE OBJECTIONS OF THE LEARNED DR HAVE BEEN TAKEN INTO CONSIDERATION IN WHICH WE DO NOT FIND ANY MERIT. TH ERE IS NO MERIT IN THE DEPARTMENTAL APPEAL. THE SAME IS ACCORDINGLY DI SMISSED. 7. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 30-06-2011 SD/- SD/- (G. D. AGARWAL) VICE PRESIDENT (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 30-06-2011 LAKSHMIKANT/- ITA NO.2184/AHD/2009 DCIT CIRCLE-5, AHMEDABAD VS M/S. P. G. FOILS LTD. 10 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD