The ACIT,Navsari Circle, Navsari V. Disti Chemi Metal Works, Bilimora

ITA 2217/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94784 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 05-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Assessee Lawyers: R N VEPARI
• Keywords: Permanent establishment; Non-deduction of tax

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD - , , BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ I.T.A. NO.2217/AHD/2012 ( / ASSESSMENT YEAR : 2009-10) THE ACIT NAVSARI CIRCLE NAVSARI / VS. M/S.DISTI CHEMI METAL WORK SADANAND MILL COMPOUND BILLIMORA $ ./ ./ PAN/GIR NO. : AABFD 7980 P ( $' / APPELLANT ) .. ( ()$' / RESPONDENT ) $' * / APPELLANT BY : SHRI NARENDRA SINGH, SR.DR ()$' + * / RESPONDENT BY : SHRI R.N. VEPARI, AR ,- + . / DATE OF HEARING 04/11/2015 /0 + . / DATE OF PRONOUNCEMENT 30/11/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-VALSAD [CIT(A) IN SHORT] DATED 27/07/2012 PERTAINING TO ASSESSMENT YEAR (AY) 2009-10. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- ITA NO.2217 /AH D/2012 ASSTT. CIT VS. M/S.DISTI CHEMI METAL WORK ASST.YEAR 2009-10 - 2 - 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION MADE OF RS.93,83,031/- U/S.41(1) OF THE ACT ON ACCO UNT OF CESSATION OF LIABILITY. 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS BY DELE TING DISALLOWANCE OF RS.1,42,50,000/- MADE U/S.40(A)(IA) OF THE ACT BEING INSTALLATION EXPENSES PAID TO KINGSTON INDUSTRIAL C ORPORATION, A NON-RESIDENT. 3. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELE TING ADDITION OF RS.1,43,27,313/- BEING UNACCOUNTED CONTRACT RECEIPT AND PROFESSIONAL RECEIPT. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (A) OUGHT TO HAVE UPHELD THE ORDER OF TH E ASSESSING OFFICER. 5. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE L.CI T(A) MAY BE SET- ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED . 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE A SSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 22/12/2011, THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE VARIOUS ADDITIONS, NAMELY ADDITION ON ACCOUNT OF FO RFEITURE/CESSATION OF LIABILITY OF RS.93,83,031/-, ADDITION ON ACCOUNT O F DISALLOWANCE OF INSTALLATION EXPENSES PAID TO KINGSTON INDUSTRIAL C ORPORATION (KIC) OF RS.1,42,50,000/- AND ADDITION ON ACCOUNT OF NON-DIS CLOSURE OF INTEREST RECEIPT, CONTRACT RECEIPT PROFESSIONAL/TECHNICAL SE RVICES OF RS.1,43,27,313/- (RS.12,55,552 + 1,30,71,761). TH E ASSESSEE BEING AGGRIEVED BY THE ASSESSMENT ORDER, PREFERRED AN APP EAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE ALLOWED ITA NO.2217 /AH D/2012 ASSTT. CIT VS. M/S.DISTI CHEMI METAL WORK ASST.YEAR 2009-10 - 3 - THE APPEAL. AGGRIEVED BY THE ORDER OF THE LD.CIT (A), NOW THE REVENUE IS IN APPEAL BEFORE US. 3. FIRST GROUND OF APPEAL IS AGAINST DELETION OF AD DITION OF RS.93,83,031/- MADE BY INVOKING THE PROVISIONS OF S ECTION 41(1) OF THE ACT. THE LD.SR.DR SUPPORTED THE ORDER OF THE AO AN D SUBMITTED THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITIO N. HE REITERATED THE SUBMISSIONS AS WERE MADE IN THE STATEMENT OF FACTS. THE LD.SR.DR SUBMITTED THAT THE ASSESSEE HAD RECEIVED ADVANCE FR OM FOLLOWING EIGHT PARTIES: 1. AMMANA BIO PHARMA PVT.LTD. 2. AURANGABAD DISTILLERY PVT.LTD. 3. BHAGAT INDUSTRIAL CORPORATION LIMITED 4. BHAVANI DISTILLERIES & CHEMICALS LIMITED 5. KUTCH BIO FUEL 6. PATRAN DISTILLERIES PRIVATE LIMITED 7. SHIVNATH RASAYAN PRIVATE LIMITED 8. YOGESHWARI PETROCHEMICAL PRIVATE LIMITED THE LD.SR.DR SUBMITTED THAT THE AO ISSUED NOTICES U/S.133(6) OF THE ACT AND NO REPLY WAS RECEIVED FROM THESE PARTI ES EXCEPT TWO PARTIES M/S.PATRAN DISTILLERIES PVT.LTD. AND M/S. BHAVANI DISTILLERIES & CHEMICALS. THE LD.SR.DR SUBMITTED THAT THE ASSESSE E FAILED TO FURNISH THE EVIDENCES FOR DEMONSTRATING THAT THE AMOUNT IS OUTS TANDING AS ON 31/03/2009 IN THE BOOKS OF ACCOUNT OF THE RESPECTIV E PARTIES. HE ITA NO.2217 /AH D/2012 ASSTT. CIT VS. M/S.DISTI CHEMI METAL WORK ASST.YEAR 2009-10 - 4 - SUBMITTED THAT THE LD.CIT(A) HAS PURELY RELIED ON T HE ASSESSEES SUBMISSION. HE SUBMITTED THAT THE ONUS WAS UPON TH E ASSESSEE TO PROVE THAT THE LIABILITY WAS YET TO RIPE FOR CESSATION. THE ASSESSEE DID NOT FURNISH ANY EVIDENCE IN THE FORM OF CORRESPONDENCE, ETC. TO PROVE THAT THE LIABILITY IS YET TO RIPE FOR CESSION. 3.1. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE R EITERATED THE SUBMISSIONS AS WERE MADE IN THE WRITTEN SUBMISSIONS . THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO HAD MADE ADDITIO N OF RS.93,83,031/- IN RESPECT OF THE ADVANCES RELATED TO EIGHT PARTIES . HE DREW OUR ATTENTION TOWARDS PAGE NOS.2 TO 10 OF THE ASSESSMENT ORDER (P ARAS- 5 TO 5.5) THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSE SSEE IS IN THE BUSINESS OF MANUFACTURE OF DISTILLATION AND CHEMICAL PLANTS AND SELLS THEM IN INDIA AND ABROAD. THESE PLANTS ARE CUSTOMIZED PLANTS AND GENERALLY CONSTRUCTED AS PER SPECIFICATION. FOR THIS PURPOSE , DEPENDING UPON THE TYPE OF PLANT, IT TAKES ABOUT 1 TO 2 YEARS TO COMPL ETE THEM AS SPECIFIC MATERIALS, DESIGNS, ETC. HAVE TO BE OBTAINED AND PR EPARED. SINCE THE ASSESSEE INCURS COST, IT GENERALLY OBTAINS SOME ADV ANCES FROM THE BUYERS WHO PLACE ORDERS. THE AO HAD NOTED THAT IN THE BAL ANCE-SHEET THERE ARE ADVANCES OF EIGHT PARTIES. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT ON ACCOUNT OF CHANGED SITUATION IN BUSINESS, THOSE WHO HAVE PUT ORDERS MAY CHANGE THEIR VIEW ABOUT THE POSSIBLE VIABILITY OF THE PROJECT AND MAY CHOOSE TO CANCEL THE ORDERS. HOWEVER, SINCE THE ASSESSEE HAS ALREADY ITA NO.2217 /AH D/2012 ASSTT. CIT VS. M/S.DISTI CHEMI METAL WORK ASST.YEAR 2009-10 - 5 - DONE SOME WORK, THE ASSESSEE WOULD FORFEIT THE ADVA NCE OR RETURN PART OF IT AS THE CASE MAY BE. THE BUYERS WOULD NATURALLY EXPECT TO HAVE THE FULL AMOUNT OF ADVANCE, WHILE THE ASSESSEE WOULD NOT AGR EE TO IT BECAUSE IT HAS ALREADY INCURRED SOME PREPARATORY EXPENDITURE. HARD NEGOTIATIONS GENERALLY TAKE PLACE AND ISSUES ARE SETTLED. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT ONE OF THE CONSIDERATIONS T HAT WEIGHS WITH THE ASSESSEE IS ITS REPUTATION AND BUSINESS EXIGENCY AB OUT GETTING FURTHER ORDERS EITHER FROM THE SAME PARTY OR OTHERS AND, TH EREFORE, THE ASSESSEE TAKES DECISION AFTER CONSIDERABLE TIME AND NEGOTIAT IONS. IN THE CASE OF FOUR PARTIES; VIZ. SL.NOS.(1), (2), (5) AND (7) OF THE ABOVE LISTED, THE ASSESSEE DID NOT BUDGE DESPITE CONTINUOUS PRESSURE FROM THE FOUR PARTIES AND EVENTUALLY TOOK THE DECISION TO CANCEL THE ORDE RS AND FORFEIT THE ADVANCES DURING AY 2010-11, WHERE THESE INCOMES HAV E BEEN SHOWN IN THE RETURN OF INCOME. THE LD.COUNSEL FOR THE ASSES SEE SUBMITTED THAT THE AO FAILED TO APPRECIATE THE FACT THAT THIS IS SOLE DECISION OF A BUSINESSMAN AND EVERY BUSINESSMAN HAS TO TAKE INTO CONSIDERATIO N SEVERAL FACTORS BEFORE FORFEITING THE SUBSTANTIAL ADVANCES RECEIVED FROM THE PARTIES. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO H AD SOUGHT PARTICULARS OF CONFIRMATION, ETC. FROM THE ABOVE EIGHT PARTIES AND IN THE LIMITED TIME, CONFIRMATIONS COULD BE OBTAINED ONLY IN RESPECT OF TWO PARTIES; VIZ. (1) BHAVAI DISTILLERIES & CHEMICALS LTD. AND (2) PAATRA N DISTILLERIES PVT.LTD. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ACCOUNTS OF RELATED PAPERS HAVE BEEN FURNISHED TO THE AO ALONGWITH LETT ER DATED 02/02/2012. ITA NO.2217 /AH D/2012 ASSTT. CIT VS. M/S.DISTI CHEMI METAL WORK ASST.YEAR 2009-10 - 6 - THEREFORE HE SUBMITTED THAT EVEN ON THE BASIS OF LO GIC OF THE AO, THE ADDITION MADE IN RESPECT OF THE ABOVE FOUR PARTIES; VIZ. AMMANA BIO PHARMA PVT.LTD., AURANGABAD DISTILLERY PVT.LTD., BH AGAT INDUSTRIAL CORPORATION LTD. AND YOGESHWARI PETROCHEMICAL PVT.L TD. WAS REQUIRED TO BE DELETED. THE LD.COUNSEL FOR THE ASSESSEE SUBMIT TED THAT THERE IS NO ILLEGALITY IN THE ORDER OF THE LD.CIT(A). HE SUBMI TTED THAT AS PER PROVISIONS OF SECTION 41(1) OF THE ACT, THE ADDITIO N CAN BE MADE ONLY WHEN LIABILITY HAS BEEN CREATED IN RESPECT OF EXPEN DITURE THAT HAS BEEN ALLOWED IN EARLIER YEAR CEASES OR IS REMITTED. NOW IT MAY BE APPRECIATED THAT THESE AMOUNTS WERE PURE ADVANCES. HE SUBMIT TED THAT THIS WOULD CLEARLY SHOW THAT THESE ARE NOTHING BUT ADVANCES AN D HAVE NOT COME INTO EXISTENCE BY DEBITING ANY EXPENDITURE WHICH HAS BEE N ALLOWED. HE SUBMITTED THAT THE ASSESSEE HIMSELF HAS OFFERED FOR TAX THE AMOUNT OF ADVANCE INITIATED BY IT IN THE AY 2010-11. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ISSUE TO BE DETERMINED IS WHETHER THE LD.CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE BY THE AO IN RESPECT OF ADVANCES RECEIVED. THE CONTENTION OF THE REVENUE IS THAT THE LIABILITY WAS CEASED TO EXIST, THIS IS FORTIFIED FROM THE FACT THAT THE ASSESSEE H IMSELF HAD OFFERED THE SAME FOR INCOME IN THE SUBSEQUENT YEAR. THE CONT ENTION OF THE ASSESSEE IS THAT FIRSTLY, THE ADDITION OUGHT NOT TO HAVE BEE N MADE BY INVOKING THE ITA NO.2217 /AH D/2012 ASSTT. CIT VS. M/S.DISTI CHEMI METAL WORK ASST.YEAR 2009-10 - 7 - PROVISIONS OF SECTION 41(1) OF THE ACT. AS PER PRO VISIONS OF SECTION 41(1) OF THE ACT, THE ADDITION CAN BE MADE ONLY WHEN THE LIABILITY HAS BEEN CREATED IN RESPECT OF EXPENDITURE THAT HAS BEEN ALL OWED IN EARLIER YEARS CEASED OR IS REMITTED. SINCE THE AMOUNTS WERE PURE ADVANCES, WE DO NOT AGREE WITH THE ARGUMENTS OF THE LD.COUNSEL FOR THE ASSESSEE THAT THIS BEING PURE ADVANCES. IN FACT, UNDISPUTEDLY, THE ADVANCES WERE GIVEN FOR THE PURPOSE OF PURCHASE/CONSTRUCTION OF PLANTS ESSENTIA LLY THESE ADVANCES WERE TRADE RECEIPTS. ANOTHER CONTENTION OF THE ASS ESSEE IS THAT SINCE NEGOTIATIONS WERE GOING ON WITH THE CONCERNED PARTI ES, IT CANNOT BE ASSUMED THAT THE LIABILITIES WERE CEASED TO EXIST. IN SUPPORT OF THIS, THE LD.COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TOWA RDS PAGE NOS.42 TO 139 OF THE PAPER-BOOK. ON THE CONTRARY, THE REVE NUE HAS PLACED RELIANCE ON THE DECISION OF THE COORDINATE BENCH ( ITAT MUMBAI BENCH A) RENDERED IN THE CASE OF ASHT LAXMI DIAMOND & J EWELLERY VS. ITO REPORTED AT (2015) 59 TAXMANN.COM 430 (MUMBAI TRI B.). TO BUTTRESS THE CONTENTION THAT THE ASSESSEE WAS REQUIRED TO OF FER THE SAME FOR TAXATION IN THE YEAR UNDER APPEAL. HOWEVER, THE LD .CIT(A) HAS PLACED RELIANCE ON THE JUDGEMENT OF HONBLE HIGH COURT OF GUJARAT IN THE CASE OF MOTILAL AMBAIDAS VS. CIT REPORTED AT 108 ITR 1 36 (GUJ.) AND JUDGEMENT OF THE HONBLE HIGH COURT OF MADRAS IN TH E CASE OF CIT VS. TAMILNADU WAREHOUSING CORPORATION REPORTED AT (2007 ) 292 ITR 310 (MAD.). ITA NO.2217 /AH D/2012 ASSTT. CIT VS. M/S.DISTI CHEMI METAL WORK ASST.YEAR 2009-10 - 8 - 4.1. THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF MOTILAL AMBAIDAS VS. CIT (SUPRA) HAS HELD THAT WHAT HAS BEE N ENACTED IN SECTION 41(1) IS THAT IF A DEDUCTION HAS BEEN MADE IN A PRE VIOUS YEAR AND THE ASSESSEE HAS BENEFITED BY SUCH DEDUCTION IN THE PAS T, IF BY CHANCE SOME AMOUNT IS REFUNDED TO HIM OR COMES BACK TO HIM, THE AMOUNT SO GOT BACK SHOULD BE BROUGHT TO TAX. IT CANNOT BE CONTENDED T HAT SECTION 41(1) IS A CHARGING SECTION AND, THEREFORE, SHOULD E STRICTLY CONSTRUED. FURTHER, THE HONBLE HIGH COURT OF MADRAS IN THE CASE OF CIT VS. TAMILNADU WAREHOUSING CORPORATION(SUPRA) HAS HELD THAT ONCE I T WAS SHOWN AS LIABILITY BY THE ASSESSEE, THE COMMISSIONER WAS WRO NG IN HOLDING THAT IT WAS ASSESSABLE U/S.41(1) OF THE ACT. UNLESS AND UN TIL THERE IS A CESSATION OF LIABILITY, SECTION 41 IS NOT APPLICABLE. 4.2. IN THE LIGHT OF ABOVE JUDGEMENTS, WE DO NOT S EE ANY REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) ON THIS I SSUE, SINCE THE REVENUE HAS NOT PLACED ANY CONTRARY MATERIAL SUGGESTING THA T THE LIABILITY WERE CEASED TO EXIST IN THE YEAR UNDER APPEAL. THUS, GR OUND NO.1 OF REVENUES APPEAL IS REJECTED. 5. SECOND GROUND OF APPEAL IS AGAINST DELETION OF D ISALLOWANCE OF RS.1,42,50,000/- BY INVOKING THE PROVISIONS OF SECT ION 40(A)(IA) OF THE ACT ON ACCOUNT OF NON-DEDUCTION OF TAX. THE LD.SR. DR SUBMITTED THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITIO N. HE SUBMITTED THAT ITA NO.2217 /AH D/2012 ASSTT. CIT VS. M/S.DISTI CHEMI METAL WORK ASST.YEAR 2009-10 - 9 - THE AO HAS GIVEN A FINDING THAT THE ASSESSEE FAILED TO FURNISH THE EVIDENCE IN SUPPORT OF THE SERVICE RENDERED BY M/S.KIC, JAMA ICA. THEREFORE, THE AO WAS JUSTIFIED FOR MAKING THE SAID ADDITION. 5.1. ON THE CONTRARY, THE LD.COUNSEL FOR THE ASSESS EE ARGUED THAT THE ASSESSEE HAD ASSIGNED WORK TO ONE KINGSTON INDUSTRI AL CORPORATION (KIC) BASED AT JAMAICA TO CARRY OUT THE WORK ON BEHALF OF THE ASSESSEE. THE SAID CONCERN HAS NO PERMANENT ESTABLISHMENT IN INDI A. THE WORK WAS CARRIED OUT OUTSIDE OF INDIA. THE PAYMENTS RECEIVE D BY THE SAID CONCERN WAS NOT SUBJECTED TO TAX IN INDIA. THEREFORE, HE S UBMITTED THAT THE AO WAS NOT JUSTIFIED IN INVOKING THE PROVISIONS OF SEC TION 40(A)(IA) OF THE ACT. HE PLACED RELIANCE ON THE JUDGEMENT OF HONBL E SUPREME COURT RENDERED IN THE CASE OF GE INDIA TECHNOLOGY CENTR E (P) LTD. VS. CIT & ANR. REPORTED AT (2010) 327 ITR 0456(SC). TO BUT TRESS THE CONTENTION THAT THE ASSESSEE WOULD REQUIRE TO DEDUCT TAX ONLY WHEN THE INCOME IS SUBJECTED TO TAX IN INDIA. THE LD.COUNSEL FOR THE ASSESSEE ALSO PLACED THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F VODAFONE INTERNATIONAL HOLDINGS B.V. REPORTED AT 66 DTR 265( SC). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE JUDGEMENTS RELIED UPON BY THE LD.COU NSEL FOR THE ASSESSEE. WE FIND THAT THE ASSESSEE HAS FURNISHED CERTAIN DOC UMENTS WITH REGARD TO THE DISPUTE WITH M/S.KIC IN THE FORM OF A COPY OF AFFIDAVIT BEFORE THE ITA NO.2217 /AH D/2012 ASSTT. CIT VS. M/S.DISTI CHEMI METAL WORK ASST.YEAR 2009-10 - 10 - HONBLE SUPREME COURT OF JAMAICA AT PAGE NOS.149 TO 152 OF THE PAPER- BOOK SUBMITTED BY THE ASSESSEE. THE ASSESSEE HAS A LSO PLACED A COPY OF SERVICE AGREEMENT ENTERED WITH M/S.KIC. IN SUPPOR T OF THE CONTENTION, IN FACT, THE ASSESSEE HAD ASSIGNED THE WORK TO THE SAID PARTY. THE UNDISPUTED FACTS EMERGE FROM THE RECORDS ARE THAT T HE REVENUE HAS NOT PLACED ANY MATERIAL SUGGESTING THAT THE SAID PARTY WAS HAVING PERMANENT ESTABLISHMENT IN INDIA. THE PAYMENTS WERE MADE TO THE SAID PARTY WERE SUBJECTED TO TAX IN INDIA. THEREFORE, RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE HONBLE APEX COURT IN THE CASE OF GE IN DIA TECHNOLOGY CENTRE (P) LTD. VS. CIT & ANR., WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A), SAME IS HEREBY UPH ELD. THUS, GROUND NO.2 OF REVENUES APPEAL IS REJECTED. 7. THIRD GROUND OF REVENUES APPEAL IS AGAINST DELE TION OF RS.1,43,27,313/- BEING UNACCOUNTED CONTRACT RECEIPT AND PROFESSIONAL RECEIPT. THE LD.SR.DR REITERATED THE SUBMISSIONS A S WERE MADE IN THE STATEMENT OF FACTS. 7.1. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE R EITERATED THE SUBMISSIONS AS WERE MADE IN THE WRITTEN SUBMISSIONS . 8. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE CONTENTION OF THE REVENUE IS THAT THE ASSESSEE HAD RECEIVED THE ITA NO.2217 /AH D/2012 ASSTT. CIT VS. M/S.DISTI CHEMI METAL WORK ASST.YEAR 2009-10 - 11 - IMPUGNED CONTRACT AMOUNT FROM ONE DR.V.V.PATIL, SSK LTD. THE ASSESSEE HAS NOT ACCOUNTED FOR AND OFFERED FOR TAX OF THIS RECEIPT IN THE BOOKS OF ACCOUNT. HOWEVER, THE LD.CIT(A) HAS DECID ED THE ISSUE IN FAVOUR OF ASSESSEE BY OBSERVING AS UNDER:- FURTHER, THE AO ALSO CALLED FOR THE INFORMATION FR OM PADMASHRI DR.V.V. PATIL SSK LTD. U/S.133(6) OF THE ACT AND TH E PARTY CONFIRMED THAT THEY HAVE PAID INTEREST OF RS.71,78,571/- ONLY AND NO PAYMENT UNDER THE HEADS CONTRACT OR PROFESSIONAL FEES WAS P AID. HOWEVER, THE AO WAS NOT SATISFIED WITH THE EXPLANATIONS GIVEN BY THE APPELLANT AND PADMASHRI DR.V.V. PATEL SSK LTD. AND THEREFORE, MAD E THE SAID ADDITION. BEFORE ME THE LD.AR CONTENDED THAT THE S AID ADDITION MADE BY THE AO WAS TOTALLY UNJUSTIFIED BECAUSE THE PAYER I. E. PADMASHRI DR.V.V. PATEL SSK LTD. HAD CONFIRMED INDEPENDENTLY TO THE A O IN REPLY TO THE NOTICE U/S.133(6) OF THE ACT. IF THE AMOUNT HAD BE EN RECEIVED, IT SHOULD HAVE BEEN REFLECTED IN THE BANK ACCOUNTS OF THE APP ELLANT BECAUSE THE AMOUNTS HAVE BEEN PAID THROUGH CHEQUES, THE LD.AR A RGUED. I HAVE ALSO PERUSED THE INFORMATION FURNISHED TO THE AO BY PADM ASHRI DR.V.V. PATIL SSK LTD. SUBMITTED BEFORE ME. THE LETTER TO AO CONTAINS DETAILS OF PAYMENTS MADE TO THE APPELLANT AND THE PAYMENT SCHE DULED. THE QUESTION HERE IS CAN THE ADDITION BE MADE ONLY ON T HE BASIS OF AIR INFORMATION AND WITHOUT ANY EVIDENCES BRINGING ON R ECORDS? THE APPELLANT HAS CONFIRMED THAT NO SUCH PAYMENT WAS RE CEIVED BY HIM AND THIS FACT WAS CONFIRMED BY THE PAYER ALSO. THE COR RESPONDENCE BETWEEN THE PARTIES AND THE AO ALSO SUPPORT THIS VIEW. TH ERE IS NOTHING ON RECORD TO SHOW THAT THE AMOUNT WAS RECEIVED BY THE APPELLANT BUT NOT SHOWN IN THE BOOKS OF ACCOUNT. AS RIGHTLY POINTED BY THE LD.AR, IF THE PAYMENTS DETAILS ARE REFLECTED IN THE FORM 26AS, TH EN THE PAYMENT MUST HAVE BEEN BY CHEQUES WHICH SHOULD HAVE FOUND PLACE IN BANK ACCOUNTS. IN THAT CASE EVEN AIR INFORMATION CONTAINS THE BANK DETAILS AS WELL. THE AO HAS NOT BROUGHT OUT ANY SUCH EVIDENCE TO SHO W THAT THE APPELLANT HAD NOT REFLECTED THE SAID AMOUNT IN HIS ACCOUNT. ON THE OTHER HAND THE LD.AR DISCHARGED ONUS ON HIM BY FURN ISHING AFFIDAVITS, CONFIRMATION FROM THE PAYER AND THE LEDGER A/C. IN THIS CIRCUMSTANCES, THE ANSWER TO THE QUESTION THAT CAN THE ADDITION BE MADE ONLY ON THE ITA NO.2217 /AH D/2012 ASSTT. CIT VS. M/S.DISTI CHEMI METAL WORK ASST.YEAR 2009-10 - 12 - BASIS OF AIR INFORMATION AND WITHOUT ANY EVIDENCES BRINING ON RECORDS IS NO. IN OTHER WORDS, THE ADDITION MADE BY THE AO IS NOT JUSTIFIED AND LEGALLY NOT SUSTAINABLE. HENCE, AO IS DIRECTED TO DELETE THE ADDITION MADE IN THIS GROUND. THE APPELLANT GETS RELIEF IN THIS GROUND OF APPEAL. 8.1. THE AFORESAID FINDING OF THE LD.CIT(A) ON FACT IS NOT CONTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDE R OF THE LD.CIT(A) ON THIS ISSUE, AS THE PAYEE HAS CLARIFIED THAT NO SUCH CONTRACT OR PROFESSIONAL PAYMENT WAS PAID TO THE ASSESSEE. THUS, GROUND NO. 3 OF REVENUES APPEAL IS REJECTED. 9. GROUND NOS.4 & 5 ARE GENERAL IN NATURE WHICH REQ UIRE NO INDEPENDENT ADJUDICATION. 10. IN THE RESULT, REVENUES APPEAL STANDS DISMISSE D. ORDER PRONOUNCED IN THE COURT ON MONDAY, THE 30 TH DAY OF NOVEMBER, 2015 AT AHMEDABAD. SD/- SD/- ( ) ( ) ( MANISH BORAD ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 30/ 11 /2015 4..., ,.../ T.C. NAIR, SR. PS