Appeal details
Counselvise Citation
25320114 RSA 2009
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 4 month(s) 2 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
25-05-2012
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
F
Next Hearing Date
10-04-2012
Assessment Year
2005-2006
Appeal Filed On
22-01-2009
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.253/DEL/2009 ASSESSMENT YEAR : 2005-06 DCIT, M/S RAJ LAXMI STONE CRUSHER HALDWANI. V. PVT. LTD., NAINITAL ROAD, HALDWANI. AND I.T.A. NO.349/DEL/2009 ASSESSMENT YEAR: 2005-06 M/S RAJ LAXMI STONE DCIT, CRUSHER PVT. LTD., HALDWANI. NANITAL ROAD, HALSWANI. V. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AABC AABC AABC AABCR RR R- -- -0021 0021 0021 0021- -- -Q QQ Q APPELLANT BY : SHRI KK MISHRA, SR. DR. RESPONDENT BY : SHRI ASHWANI TANEJA, ADVOCATE SHRI SOMIL AGGARWAL, C.A. ORDER PER TS KAPOOR, AM: THESE ARE TWO APPEALS, ONE BY THE ASSESSEE AND ONE BY THE REVENUE. THESE APPEALS WERE HEARD TOGETHER AND FOR TH E SAKE OF CONVENIENCE ARE BEING DISPOSED OFF BY THIS COMMON ORDE R. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER:- ITA NO253&349/DEL/2009 2 1. THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF ` .16,33,645/- ON ACCOUNT OF DISALLOWANCE U/S 40A(2)(B) OF THE INCOME TAX ACT, 1961 IGNORING T HE FACTS BROUGHT ON RECORD BY THE ASSESSING OFFICER THAT BOTH AV ERAGE MANUFACTURED COST AND SELLING RATE IS LESS THAN THE PURC HASE RATE OF THE ASSESSEE. MOREOVER, LD CIT(A) HAS ACCEPTED THE ARGUMENTS OF THE ASSESSEE NOT SUPPORTED BY ANY EVIDENCE. 2. THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF ` .53,000/- ON ACCOUNT OF LEGAL FEE OF BEING CAPITAL NATURE IGNORING THE FACT THAT THE AMO UNT HAS BEEN SPENT FOR INCREASING THE AUTHORIZED CAPITAL OF COMPAN Y WHICH IS A ONE TIME EXPENDITURE AND NOT A RECURRING EXPENDITUR E, SECONDLY THE NATURE OF EXPENDITURE HAS NOTHING TO DO WITH COM MENCEMENT OF THE BUSINESS. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER:- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF T HE CASE, LD CIT(A) II, DEHRADUN HAS ERRED IN LAW AND ON FACT S IN CONFIRMING THE ACTION OF THE LD ASSESSING OFFICER IN M AKING ADDITION OF ` .49,00,462/- ON ACCOUNT OF ILLEGAL TRANSPORTATION O N THE BASIS OF SURMISES AND ASSUMPTIONS WITHOUT PLACING ANY CORROBORATING MATERIAL AND BY RECORDING INCORRECT F ACTS AND OBSERVATIONS PURELY ON THE BASIS OF THIRD PARTY REPORTS THE FINDINGS WHICH WERE ALSO STAYED BY THE HIGHER AUTHORIT IES. 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF T HE CASE, THE LD CIT(A) II, DEHRADUN HAS ALSO ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF THE LD ASSESSING OFFICER IN MA KING ADDITION OF ` .45,89,133/- ON ACCOUNT OF ILLEGAL STOCK ON THE BASIS ITA NO253&349/DEL/2009 3 OF SURMISES AND ASSUMPTIONS WITHOUT CONSIDERING THE RELEV ANT MATERIAL AND BY RECORDING INCORRECT FACTS AND OBSERVA TIONS PURELY ON THE BASIS OF THIRD PARTY REPORTS, THE FINDINGS OF WH ICH WERE ALSO STAYED BY THE HIGHER AUTHORITIES WHO ALSO REGULARI ZED THE SAME ON 28.3.2008 CONSIDERING THE SAME HAS HAVING MINED FROM THE PIT AND COLLECTING THE ROYALTY ACCORDINGLY. THE SAID INCOME HAS BEEN BROUGHT TO ACCOUNTS IN THE FINANCIAL YEAR 20 07-08 RESULTING IN DOUBLE TAXATION OF THE SAME INCOME ONCE IN ASSESSMENT YEAR 2005-06 AND SECOND IN ASSESSMENT YEAR 2008- 09. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF T HE CASE, THE LD CIT(A) II, DEHRADUN HAS FURTHER ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN D ISALLOWING A SUM OF ` .62 LAKHS AS HAVING COVERED UNDER THE PROVISIONS OF SECTION 40A(IA) IN COMPLETE DISREGARD TO THE DEPARTME NTAL CIRCULARS AND THE TERMS OF THE AGREEMENT ON RECORD FA ILING TO APPRECIATE THAT THE TDS PROVISIONS FOR HIRING OF MACH INE AND EQUIPMENTS WERE INTRODUCED BY THE IT AMENDMENT ACT, 2006 AND THE SAME COULD NOT HAVE BEEN MADE APPLICABLE RETROSPE CTIVELY FROM ASSESSMENT YEAR 2005-06. 4. THE LD CIT(A) HAS ALSO ERRED IN LAW AND ON THE FACTS O F THE CASE IN NOT GIVING BENEFIT OF PROVISIONS OF SECTION 80-IB OF T HE IT ACT WHICH ARE APPLICABLE TO THE UNIT AND THE SAME WAS NOT CLAIMED IN THE ORIGINAL RETURN AS THE COMPANY HAD NIL PROFIT DU E TO BROUGHT FORWARD LOSSES. THE SAID REJECTION OF CLAIM IS AGAINST TH E SPIRIT OF THE BOARD CIRCULAR NO.14(XL-35) DATED 11 TH APRIL, 1955. 5. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MODIFY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF H EARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHE R. ITA NO253&349/DEL/2009 4 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMP ANY IS ENGAGED IN RUNNING OF STONE CRUSHER AND MANUFACTURIN G OF STONE GRITS AND STONE DUST WHICH ARE EXTRACTED FROM GOLA RIVER, HALDWANI (ACQUIRING RIGHTS FROM FOREST DEPARTMENT OF UTTRANCH AL PRADESH). THE RETURN DECLARING NET INCOME OF NIL WAS FILED ON 31. 10.2005 WHICH WAS PROCESSED U/S 143(1) ON 5.5.2006. LATER ON NOTICE U/S 143(2) WAS ISSUED. THE ASSESSMENT PROCEEDINGS WERE CONCLUDED AND THE FOLLOWING ADDITIONS WERE MADE:- I) DISALLOWANCE U/S 40A(2)(B) IN RESPECT OF ALLEGED PURCHASE OF FINISHED GOODS AT COMPARATIVELY HIGH PRICE ` .16,33,645/-. II) PLANT & MACHINERY BY TREATING HEAVY BILL FOR A COMPONENT USED FOR REPLACEMENT AS CAPITAL EXPENDITUR E ` .5,20,000/-. III) PETTY UN-VERIFIABLE EXPENSES ` .1.50,000/- IV) LEGAL FEE FOR INCREASING CAPITAL OF THE COMPANY ` .53,000/-. V) OUT OF RUNNING AND HIRED VEHICLES ` .1,00,000/-. VI) PENALTY ON ACCOUNT OF ILLEGAL MINING ` .75,000/-. VII) ILLEGAL TRANSPORTATION (UN-DISCLOSED SALES) ` .49,00,452/-. VIII) ILLEGAL STOCK OF ` .45,89,133/-. IX) DISALLOWANCE U/S 40A(IA) IN RESPECT OF NON DEDUCTION O F TDS ON FIXED MONTHLY HIRE CHARGES OF TRANSPORTATION ` .62 LAKHS. 4. AGGRIEVED BY THE ABOVE, THE ASSESSEE COMPANY FILED A N APPEAL BEFORE LD CIT(A). THE LD CIT(A) VIDE HIS ORDER DATED 8.1.2008 DELETED THE ADDITION AT (I) TO (III) ABOVE. AGGRIEVED, BY THE CIT(A)S ORDER BOTH THE DEPARTMENT AND THE ASSESSEE HAS FILED SEPARATE APPEAL S. THE ITA NO253&349/DEL/2009 5 DEPARTMENT HAS FILED APPEAL AGAINST DELETION OF ADDI TION MADE U/S 40A(2)(B) AMOUNTING TO ` ..16,33,645/- AND ` .53,000/- BEING LEGAL FEE BEING CAPITAL IN NATURE. WHEREAS THE ASSESSEE HAS FILED APPEAL AGAINST CONFIRMATION OF ADDITION OF ` .49,00,452/- ON ACCOUNT OF ILLEGAL TRANSPORTATION AND ` .45,89,133/- BEING ILLEGAL STOCK. THE APPEAL OF THE ASSESSEE ALSO INCLUDE CONFIRMATION OF DISALLOWANCE U/S 40A (IA) IN RESPECT OF HIRING OF MACHINES AND EQUIPMENTS ON THE G ROUND THAT TDS WAS NOT DEDUCTED. WE WILL FIRST TAKE UP THE APPEAL FI LED BY THE DEPARTMENT. 5. GROUND NO.1 RELATES TO ADDITION OF ` .16,33,645/- ON ACCOUNT OF DISALLOWANCE U/S 40A(2)(B) OF THE ACT. DURING THE ASSE SSMENT YEAR, THE ASSESSEE HAS PURCHASED FINISHED GOODS WEIGHING 326729 QTLS FROM ITS SISTER CONCERN @ ` .18.50 PER QTL. THE ASSESSING OFFICER OBSERVED THAT THE COST OF MANUFACTURED GOODS CAME TO ` .11.87 PER QTL. AND IN VIEW OF DIFFERENCE BETWEEN THE COST OF MANUFACTURED GOODS AND COST OF PURCHASE FROM SISTER CONCERN COVERED U/S 40A(2)(B) OF T HE ACT, THE ASSESSING OFFICER MADE ADDITION OF ` .16,33,645/- @ ` .5/- PER QTL. ON TOTAL PURCHASES OF 326729 QTL. THE CONTENTION OF THE ASSESSEE THAT THE PURCHASES WERE MADE ON FOR BASIS AND THE PURCHASES WERE M ADE AT PREVALENT MARKET PRICE DURING THE MONTH OF MARCH DI D NOT FIND FAVOUR WITH THE ASSESSEE. THE ASSESSEE DURING PLEADINGS BEFORE LD CIT(A) SUBMITTED THE FOLLOWING ARGUMENTS IN SUPPORT OF ITS DE FENCE THAT PAYMENTS AGAINST PURCHASES MADE FROM SISTER CONCERN WERE NOT EXCESSIVE. 1. THAT THE APPELLANT COMPANY HAS MADE THE ABOVE PURCH ASES TO TIED OVER THE CRISIS IN THE SUBSEQUENT MONTH OF MAY, JU NE AND JULY WHEN THE RAW MATERIAL AVAILABILITY BECOMES VERY POOR AND MINING ACTIVITY IS CLOSED. ITA NO253&349/DEL/2009 6 2. THE MATERIAL WAS SOLD @ ` .20/- PER QTL. IN THE SUBSEQUENT MONTH THEREBY EARNING PROFIT OF ` .1.5/- PER QTL. 3. THE GOODS WERE PURCHASED ON CREDIT AND THEREBY THE AP PELLANT SAVED ON ACCOUNT OF INTEREST ON SUCH PAYMENTS. 4. THE MATERIAL WAS PURCHASED ON FOR BASIS AND FREIGHT WA S BORNE BY THE SUPPLIER. 6. THE LD CIT(A) AFTER HEARING THE SUBMISSIONS OF THE A SSESSEE AGREED WITH THE CONTENTIONS MADE BY THE ASSESSEE AND DEL ETED THE ADDITION OF ` .16,33,645/-. WHILE DELETING THE ADDITION, THE LD C IT(A) HAD MADE THE FOLLOWING OBSERVATIONS:- 1. THAT THE NEGOTIATED PRICE OF ` .18.50 CONTAINS CONSIDERATION OF MAKING DELAYED PAYMENTS TO THE SELLER AND THEREFORE U LTIMATELY THE COMPANY HAS MADE SURPLUS ON SUCH SALES. 2. THAT THOUGH THE MATERIAL WAS LIFTED FROM DECEMBER, 2 004 TO MARCH, 2005 THE RATES WERE FINALIZED ONLY IN THE MON TH OF MARCH, 2005 WHEN THE SELLING RATE OF MATERIAL WAS ` .20/- PER QTL. THEREFORE, THE PURCHASE RATE OF ` .18.50/- PER QTL. WAS NOT EXCESSIVE SPECIFICALLY KEEPING IN VIEW THE FACT THAT T HE MATERIALS WERE SUPPLIED ON FOR AND THE APPELLANT HAD SAVED NOT IONAL INTEREST ON WORKING CAPITAL FOR A PERIOD OF ABOUT 8 MONTHS. THE OPERATIVE PART OF LD CIT(A)S ORDER IN THIS REGARD IS REPRODUCED BELOW:- I AM IN AGREEMENT WITH THE CONTENTION OF THE COUNSE L OF THE APPELLANT THAT UNDER BUSINESS EXIGENCIES OF THE SITUATIO N, THE APPELLANT HAD TO RESORT TO PURCHASE AT THE PREVAILING MARKET PRICE WHEN THE PURCHASE NEGOTIATION ACTUALLY GOT SETT LED DURING MARCH, 2005 AND THEREFORE THE REJECTION OF SUCH PURC HASE RATE IS ITA NO253&349/DEL/2009 7 NOT TENABLE AND THEREFORE I AM NOT IN A POSITION TO SUSTAIN THE ADDITION MADE BY THE ASSESSING OFFICER U/S 40A(2)(B) OF THE IT ACT BY ADOPTING AN ESTIMATED RATE OF SUCH PURCHASE AT ` .13.50 PER QTL. AS AGAINST THE ACTUAL RATE OF PURCHASE AT ` .18.50/- PER QTL. AND ACCORDINGLY THE ASSESSING OFFICER IS HEREBY DIRECTED TO DELETE SUCH ADDITION OF ` .16,33,645/-. 7. AGGRIEVED THE DEPARTMENT IS IN APPEAL. 8. THE LD DR ARGUED THAT WHATEVER STOCK WAS PURCHASED IN THE MONTH OF MARCH, WAS LYING AS STOCK IN TRADE IN THE MO NTH OF MARCH AND THEREFORE THERE WAS NO BUSINESS EXIGENCIES AND THEREFORE HE PLEADED THAT THERE IS CONTRADICTION IN THE ORDER OF LD CIT(A ) WHEREIN THE LD CIT(A) HAD STATED THAT DURING BUSINESS EXIGENCIES THE ASSE SSEE COULD HAVE TO PURCHASE AT A LITTER HIGHER PRICE. THEREFOR E, HE ARGUED THAT THE ORDERS OF LD CIT(A) BE REVERSED AND THE ORDER OF ASSESSIN G OFFICER BE RESTORED. 9. THE LD AR ARGUED THAT PURCHASES WERE COMPULSORY AS I TS P[RICE VARIES FROM TIME TO TIME. THE MOMENT SUPPLY DECREASED THE PRICE TEND TO INCREASE. HE FURTHER ARGUED THAT PAST AVERAGE CANNOT BE TAKEN FOR DETERMINING THE PRESENT MARKET PRICE. THE ASSESSING OFFICER HAD TAKEN THE AVERAGE OF PAST PRICE AND HAD COMPARED IT WITH THE PURCHASE PRICE PAID BY THE ASSESSEE WHEREAS IT SHOULD HAVE BEEN C OMPARED WITH THE PRESENT MARKET PRICE WHICH WAS ` .20/- PER QTL. HE FURTHER ARGUED THAT SINCE THE STOCK WAS LYING AS ON 31 ST MARCH, AND WAS VALUED AS ITS PURCHASE PRICE, THERE IS NO IMPACT ON PROFIT/LOSS OF TH E YEAR. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PA RTIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE HAVE OBSERVED ITA NO253&349/DEL/2009 8 THAT LD CIT(A) HAD RIGHTLY DELETED THE ADDITION BY COMPARING THE PURCHASE P[RICE PAID BY THE ASSESSEE WITH THE MARKET PRI CE PREVALENT AT THE TIME OF PURCHASE I.E. IN THE MONTH OF MARCH. MOREOVER CIT(A) HAS RIGHTLY OBSERVED THAT GOODS WERE PURCHASED ON FOR B ASIS AS THERE WAS NO FREIGHT DEBITED IN THE BOOKS OF ASSESSEE WHICH THE ASSESSING OFFICER COULD HAVE EASILY CHECKED FROM THE BOOKS OF ACCOUNTS. SIMILARLY HIS OBSERVATION REGARDING CONSIDERATION OF ELEMENT OF INTEREST IN THE PRICE IS ALSO CORRECT AS THE ASSESSEE BENEFITED FROM THE SA VING IN NOTIONAL INTEREST. THEREFORE, KEEPING IN VIEW ALL TH ESE ELEMENTS LIKE CONSIDERATION OF MARKET PRICE IN MARCH, 2005, ELEMEN T OF INTEREST AND SAVING OF FREIGHT, THE LD CIT(A) HAS RIGHTLY REVERSED THE ORDER OF ASSESSING OFFICER ON THIS GROUND. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE IN THE ORDER OF LD CIT(A). THIS GROUND OF THE REVENUE IS DISMISSED. 11. THE NEXT GROUND RELATES TO ADDITION OF ` .53,000/- ON ACCOUNT OF LEGAL FEES. THE ASSESSEE HAD INCURRED AN AMOUNT OF ` .66,500/- UNDER THE HEAD LEGAL EXPENDITURE. THE AMOUNT INCLUDED ` .53,000/- FOR INCREASE IN THE AUTHORIZED SHARE CAPITAL OF THE COMPA NY. THE ASSESSING OFFICER REJECTED THIS AMOUNT OF ` .53,000/- AS BEING OF REVENUE NATURE AND THEREBY ADDED BACK THE AMOUNT OF ` .53,000/- CONSIDERING IT EXPENDITURE OF CAPITAL NATURE. 12. BEFORE LD CIT(A), THE LD AR SUBMITTED THAT ` .53,000/- WAS PAID TO REGISTRAR OF COMPANIES FOR INCREASE IN THE AUTHORIZED SHARE CAPITAL; OF THE COMPANY AND THE EXPENDITURE WAS INCURRED AFTER T HE COMMENCEMENT OF BUSINESS AND THEREFORE IS A REGULAR REV ENUE EXPENDITURE AND SHOULD BE ALLOWED AS NORMAL BUSINESS EX PENSE. THE LD CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AGREED ITA NO253&349/DEL/2009 9 WITH THE CONTENTIONS DELETED THE ADDITION OF ` .53,000/-. THE RELEVANT PORTION OF LD CIT(A)S ORDER IS REPRODUCED BELOW:- I FIND ENOUGH FORCE IN THE CONTENTION OF THE COUNSE L OF THE APPELLANT AND SINCE THE EXPENSES HAVE BEEN LAID OUT AF TER THE COMMENCEMENT OF OPERATION, THE SAME SHOULD CONSTITUTE REVENUE EXPENSES AND ACCORDINGLY THE SAME SHOULD BE ALL OWED IN THE ASSESSMENT. IN VIEW OF THESE FACTS, THE ASSESSING OFFI CER IS HEREBY DIRECTED TO DELETE THE ADDITION OF ` .53,000/- UNDER THE HEAD LEGAL EXPENSES. 13. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 14. THE LD DR ARGUED THAT ` .53,000/- IS A CAPITAL EXPENDITURE BEING INCURRED FOR INCREASE IN SHARE CAPITAL OF THE COMPANY AND THEREFORE SHOULD NOT BE ALLOWED AS REVENUE EXPENDITURE. 15. ON THE OTHER HAND, LD AR SUBMITTED THAT THE AMO UNT IS A REGULAR BUSINESS EXPENDITURE AND WAS INCURRED AFTER COMMENCEMEN T OF BUSINESS AND THEREFORE IT IS A REVENUE EXPENDITURE TO B E ALLOWED AGAINST THE PROFITS OF THE COMPANY. 16. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PA RTIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE ARE OF THE CONSIDERED OPINION THAT THE EXPENDITURE INCURRED FOR INCREASE IN THE SHARE CAPITAL OF THE COMPANY AFTER COMMENCEMENT OF B USINESS IS NOT A CAPITAL EXPENDITURE BUT A REGULAR BUSINESS EXPENDITURE OF REVENUE NATURE. THEREFORE, WE DO NOT SEE ANY REASON TO INTERF ERE IN THE ORDER OF LD CIT(A). HENCE, THE SECOND GROUND RAISED BY THE RE VENUE IN THIS APPEAL IS DISMISSED. ITA NO253&349/DEL/2009 10 ASSESSEES APPEAL: ASSESSEES APPEAL: ASSESSEES APPEAL: ASSESSEES APPEAL: 17. THE FIRST & SECOND GROUND IN THE ASSESSEES APPEAL R ELATES TO DISALLOWANCE OF ADDITION OF ` .49,00,462/0 ON ACCOUNT OF ILLEGAL TRANSPORTATION + ` .4589133/- ON ACCOUNT OF ILLEGAL STOCK. DURING THE YEAR UNDER CONSIDERATION, A SURVEY WAS CONDUCTED AT TH E PREMISES OF THE APPELLANT BY THE FOREST DEPARTMENT OF UTTRAKHAND . ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SURVEY, THE DM NA INITAL PASSED ORDER ON 19.3.2005 HOLDING THAT DURING THE YEAR UND ER CONSIDERATION, THE APPELLANT HAS DONE ILLEGAL TRANSPORTATION OF 6551 029 CUBIC METERS OF STONE GRITS. IT WAS HELD BY THE DM, NAINITAL THAT DURING THE YEAR, THE APPELLANT HAS DONE ILLEGAL MINING OF 77885.57 CUBIC METERS OF STONE. FURTHER IT WAS ALLEGED THAT THE APPELLANT IS FOUND TO BE IN POSSESSION OF ILLEGAL STOCK OF 52567.43 CUBIC METERS OF STONE BOULDE RS. THE DM, NAINITAL PASSED ORDER ON DATED 19.3.2005 WHEREIN IT W AS HELD AS UNDER:- 1. THAT THE APPELLANT HAS DONE ILLEGAL MINING OF 77885. 57 CUBIC METERS FOR WHICH COMPOUNDING FEES OF ` .21,17,793/- WAS IMPOSED. 2. THE APPELLANT WAS HAVING ILLEGAL STOCK OF 52567.43 CU BIC METERS OF STONE FOR WHICH COMPOUNDING FEES OF ` .50,18,906/- IMPOSED. 3. THAT THE APPELLANT HAS DONE ILLEGAL TRANSPORTATION FO R 65510.29 CUBIC METERS OF STONE GRITS FOR WHICH COMPOUNDING FEE S OF ` .1,71,23,186/- WAS IMPOSED. 18. THE ASSESSING OFFICER ON THE BASIS OF THESE ORDERS CALC ULATED THE UNDISCLOSED SALES OF ` .1,60,01,540/.- AND AFTER APPLYING 30% PROFIT ON TURNOVER ARRIVED AT A FIGURE OF ` .48,00,452/- AS BEING PROFITS EARNED BY ITA NO253&349/DEL/2009 11 THE ASSESSEE OUT OF BOOKS OF ACCOUNT. A SUM OF ` .ONE LAKH WAS ALSO ADDED TO THIS FIGURE BEING CAPITAL EMPLOYED FOR RUNN ING SUCH BUSINESS OUTSIDE THE BOOKS, THUS, MAKING TOTAL ADDITION OF ` .49,00,462/-. THE ASSESSING OFFICER FURTHER ALLEGED THAT THE ASSESSEE MUST HAV E INCURRED EXPENSES ON ACCOUNT OF LABOUR AND TRANSPORT CHARGES OU TSIDE THE BOOKS OF ACCOUNTS. HE TOOK ` .4.85 PER QTL. AS AVERAGE TRANSPORTATION AND LABOUR CHARGES AND THEREFORE CALCULATED AN AMOUN T OF ` .45,89,133/- BEING PAYMENTS MADE FOR LABOUR AND TRAN SPORTATION OUTSIDE THE BOOKS OF ACCOUNT AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFO RE LD CIT(A). 19. THE LD AR SUBMITTED THE FOLLOWING SUBMISSIONS BEFORE LD CIT(A):- 1) THAT THE ASSESSING OFFICER HAS WRONGLY MADE THE ADDITION ON ACCOUNT OF ILLEGAL MINING/ILLEGAL TRANSPORTATION ON THE BASIS OF REPORT OF DM, NAINITAL WHICH HAD ALREADY BEE N STAYED BY COMMISSIONER DUE TO INHERITANCE WEAKNESS IN THE FINDINGS OF INVESTIGATING AGENCIES. 2) THAT THE LD ASSESSING OFFICER PROCEEDED TO MAKE SUPERFLUOUS ADDITION ON THE BASIS OF FURTHER ASSUMPTION ON THE BASIS OF SAID REPORT OF DM, NAINITAL WITHOUT PLACI NG ANY MATERIAL ON RECORD AND WITHOUT FINDING ANY DEFECT I N THE ACCOUNTS. 3) THE ASSESSING OFFICER FAILED TO TAKE NOTE OF THE FACT T HAT LD DM, NAINITAL HAD INITIALLY ALLOWED THE APPELLANT TH E RIGHT TO TRANSPORT AND USE THE MATERIAL BY HIM FROM HIS OWN SI TE BY DEPOSITING THE ROYALTY AND COMPOUNDING FEES AND LATER ON CANCELLED HIS OWN ORDER ARBITRARILY WITHOUT ASSIGNING ANY REASON. ITA NO253&349/DEL/2009 12 20. THE LD CIT(A) AFTER GOING THROUGH THE SUBMISSIONS FILED BY LD AR DID NOT ACCEPT THE CONTENTIONS MADE BY LD AR AND CO NFIRMED BOTH THE ADDITIONS. THE OPERATIVE PART OF THE LD CIT(A)S ORDE R IS REPRODUCED BELOW:- SINCE THE MINING OFFICER AND THE JOINT ENQUIRY COM MITTEE CONSISTING OF OFFICIALS OF FOREST DEPARTMENT, PWD AND REVENUE DEPARTMENT WERE THE EXPERTS WHO HAS DETERMINED THE Q UANTUM OF ILLEGAL MINING AND ILLEGAL TRANSPORTATION AND ILL EGAL POSSESSION OF STOCK, THE REPORT OF SUCH AUTHORITIES CANNOT BE BRU SHED ASIDE. FURTHER, DM, NAINITAL BEING COMPETENT AUTHORITY TO EVALUATE SUCH REPORTS, I HAVE NO OTHER FRESH MATERIALS TO DIFFER FRO M THE FINDINGS OF SUCH AUTHORITIES AND ACCORDINGLY THE ADDITION MADE BY THE ASSESSING OFFICER TOWARDS THE UNDISCLOSED SALES TO THE TUNE OF ` .49,00,462/- IS HEREBY UPHELD. SIMILARLY, THE ASSESSING OFFICER HAS MADE AN ADDITION OF `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` .62 LAKHS TO M/S RADHA TRANSPORT AGENCY AND M/S PARVEEN STONE CRUSHER AMOUNTI NG TO ` .50 LAKHS AND ` .12 LAKHS RESPECTIVELY FOR USING JCV/DUMPER. THE ASSESSING OFFICER NOTED DURING ASSESSMENT PROCEEDINGS THAT TAX WAS NOT ITA NO253&349/DEL/2009 15 DEDUCTED ON PAYMENTS MADE FOR USE OF THESE TRUCKS/DUMPE RS. THE ASSESSEE WAS REQUIRED TO EXPLAIN AS TO WHY THESE PAYMENTS SH OULD NOT BE DISALLOWED U/S 40A(IA). THE ASSESSEE REPLIED THAT NO TAX WAS REQUIRED TO BE DEDUCTED AS THE TRANSACTION WAS NOT CO VERED BY THE PROVISIONS OF SECTION 194C AND 194-I OF THE ACT AND HE FURTHER PLEADED THAT THIS TYPE OF TRANSACTION HAS BEEN COVERED BY TAXA TION LAWS AMENDMENT ACT, 2006 W.E.F. 13.7.2006. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENTION AND DISALLOWED THE SUM OF ` .62 LAKHS CONSIDERING THIS AS CONTRACTUAL PAYMENT IN PERFOR MANCE OF WORKS CONTRACT. THE OPERATIVE PART OF THE ASSESSING OFFICERS ORDER IS REPRODUCED BELOW:- FROM THE COPY OF AGREEMENT FILED, IT IS CLEAR THAT THE ASSESSEE HAS ENTERED INTO A CONTRACT WITH LESSER TO USE HIS DUMPE RS/JCV LOADERS AT A FIXED PRICE PER MONTH FOR TRANSPORTING GOODS. THE CONTRACTS ARE TERMINABLE AT A NOTICE OF TWO MONTHS. T HUS, IT IS CLEAR THAT IT IS A CASE OF TRANSPORTING GOODS CONTRACT WHERE EXPENSES ARE TO BE BORNE BY THE ASSESSEE BUT THE DUMPERS/J CV WAS TO BE PROVIDED BY M/D RADHA TRANSPORT AGENCY AND M/S PARVEEN STONE CRUSHERS. 27. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE LD CIT (A) AND SUBMITTED AS UNDER:- 1) THAT ASSESSING OFFICER HAD MADE THE ADDITION ILLEGAL LY AND AGAINST THE PROVISIONS OF LAW IN COMPLETE DISREGARD TO DEPARTMENTAL CIRCULARS AND TERMS OF AGREEMENT ON RECO RD. ITA NO253&349/DEL/2009 16 2. THAT TDS PROVISION FOR HIRING OF MACHINES/EQUIPMEN TS WERE INTRODUCED BY THE INCOME TAX AMENDMENT ACT, 2006 AN D THE SAME COULD NOT HAVE BEEN MADE APPLICABLE RETROSPECTIV ELY. 3. THE ASSESSING OFFICER CONTRADICTED HIS FINDINGS MADE IN PARA 8 OF THE ORDER CONSIDERING THE TRANSACTION AS RUNNING A ND MAINTENANCE OF HIRED VEHICLE FOR THE PURPOSE OF MAKI NG DISALLOWANCE OF ` .1 LAC. 4) THE ASSESSING OFFICER HAD DELIBERATELY FAILED TO DIST INGUISH BETWEEN HIRING OF MACHINES AND TRANSPORTATION CONTRA CT. 28. THE CIT(A) DID NOT AGREE WITH THE CONTENTIONS O F LD AR AND UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER. THE OPERATIVE PART OF LD CIT(A)S ORDER IS REPRODUCED BELOW:- I AM NOT AGREEABLE TO SUCH CONTENTION USED BY THE CO UNSEL OF THE APPELLANT BECAUSE THE TRANSACTION OF TAKING DUMP ERS/JCB LOADERS AT A FIXED PRICE PER MONTH AS PER CONTRACT EN TERED INTO BY THE APPELLANT WITH THE LESSOR CONSTITUTES A WORKS CONTRA CT AND THEREFORE THE PROVISION OF SECTION 194C ARE CLEARLY A PPLICABLE. 29. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE THE TRI BUNAL. 30. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. BEFORE US THE LD AR ARGUE D THAT THE SAID AGREEMENT FOR SUPPLY OF DUMPER WAS NOT A WORKS CONTRAC T AND IT WAS ONLY FOR SUPPLY FOR DUMPERS WHICH IS NOTHING BUT EQUI PMENTS. RELIANCE WAS PLACED ON THE FOLLOWING JUDGMENTS:- ITA NO253&349/DEL/2009 17 1. MITHARI TRANSPORT CORPORATION V. ACIT VIASHAKAPATNAM BENCH REPORTED IN 124 IITD 40. 2. DCIT V. SATISH AGGARWAL & CO. (ASR BENCH) 124 TTJ 542 . 3. DATTA DIGAMBER SAHKARI SANSTHAN V. ACIT ITAT PUNE BE NCH 83 ITD 148. 31. THE LD AR BROUGHT BEFORE OUR NOTICE THAT ALL TH ESE CASES WERE CASES DECIDED BY DIFFERENT BENCHES OF THE TRIBUNAL. IT WAS HELD IN ALL CASES THAT WHERE THE VEHICLES ARE SIMPLY PLACED AT THE DISPOSAL OF THE ASSESSEE WITHOUT INVOLVING THEMSELVES CARRYING OUT ANY PA RT OF WORK, IT CANNOT BE SAID THAT THE PAYMENTS MADE FOR HIRING OF V EHICLES FELL IN THE CATEGORY OF PAYMENTS TOWARDS CONTRACT AND THEREFORE T HE ASSESSEE WAS NOT LIABLE TO DEDUCT TAX AT SOURCE. 32. THE LD DR RELIED UPON THE ORDERS OF THE ASSESSING OF FICER AND THE LD CIT(A) AND ARGUED THAT THE PAYMENTS MADE BY THE A SSESSEE SQUARELY FIT IN THE PROVISIONS OF SECTION 194C OF THE A CT AS IS CLEAR FROM THE TERMS AND CONDITIONS OF LEASE AGREEMENT OF DUMPERS. 33. WE HAVE CONSIDERED THE ORDERS OF THE ASSESSING OFFICE R AND THOSE OF LD CIT(A). FROM THE PLAIN READING OF RELEVA NT PORTION OF ASSESSING OFFICERS ORDER, IT IS OBSERVED THAT ASSESSING OFFI CER HAD RELIED ON THE TERMS AND CONDITIONS OF LEASE AGREEMENT WHEREIN DUMPERS WERE LEASED TO THE LESSEE AT A FIXED PRICE FOR TRANSPORT OF GOODS AND MOVING AND SHIFTING OF MATERIAL. THE ASSESSING OFFICER FURTHER OBSERVED THAT LEASE RENT PAID ARE NOTHING BUT TRANSPORT CONTRACT OR WORKS CONTRACT, THEREFORE, IN HIS OPINION , THE PROVISIONS OF SECTION 194C OF THE ACT WERE CLEARLY APPLICABLE. THE LD CIT(A) ALSO TOOK THE VIEW THAT CONTRACT ENTERED INTO BY THE APPELLAN T WITH THE LESSER ITA NO253&349/DEL/2009 18 CONSTITUTES SERVICE CONTRACT AND THEREFORE THE PROVISIO NS OF SECTION 194C ARE CLEARLY APPLICABLE. 34. THE ASSESSING OFFICER IN HIS ORDER AT PARA 12 OF PAG E 08 HAS CLEARLY MENTIONED THAT IT IS A TRANSPORTING CONTRAC T WHERE EXPENSES ARE TO BE BORNE BY THE ASSESSEE BUT THE DUMPERS/JCB WAS TO BE PROVIDED BY M/S RADHA TRANSPORT AGENCY AND M/S PASRVIN STONE. IN FACT THE ASSESSING OFFICER HIMSELF HAS ADMITTED IN HIS ORDER T HAT DUMPERS/JCB WERE HIRED AND ALL EXPENSES WERE BORNE BY THE ASSESSEE. THIS ESTABLISHES THE FACT THAT AGREEMENT WAS FOR LEASE O F DUMPERS/JCB ONLY AND THERE WAS NO AGREEMENT FOR EXECUTING ANY W ORK OR CONTRACT AND HENCE CANNOT BE CLASSIFIED AS WORKS CONTRACT OR A SE RVICE CONTRACT. TO ARRIVE AT THE CORRECT CONCLUSION IN THE PRESENT CA SE WE HAVE TO COMPARE THE FACTS OF THE PRESENT CASE WITH THE FACTS OF CASES RELIED UPON BY THE LD AR WHICH ARE AS UNDER:- 1. MITHARI TRANSPORT CORPORAT 1. MITHARI TRANSPORT CORPORAT 1. MITHARI TRANSPORT CORPORAT 1. MITHARI TRANSPORT CORPORATION V. ACIT VISHAKHAPAT NAM BENCH ION V. ACIT VISHAKHAPATNAM BENCH ION V. ACIT VISHAKHAPATNAM BENCH ION V. ACIT VISHAKHAPATNAM BENCH REPORTED IN 124 ITD 40. REPORTED IN 124 ITD 40. REPORTED IN 124 ITD 40. REPORTED IN 124 ITD 40. THE ASSESSEE A TRANSPORT CONTRACTOR HIRED LORRIES FROM OT HER PERSONS TO TRANSPORT BITUMEN TO VARIOUS POINTS AS PER D IRECTIONS OF THE OWNERS OF GOODS. THE ASSESSEE HIMSELF EXECUTED TH E CONTRACT OF TRANSPORTATION OF BITUMEN. THE LORRY OW NERS HAD SIMPLY PLACED THE VEHICLES AT THE DISPOSAL OF THE ASSESSEE WITHOUT INVOLVING THEMSELVES IN CARRYING OUT ANY PART OF THE WORK UNDERTAKEN BY THE ASSESSEE. IT WAS HELD THAT PAYMENTS TO LORRY OWNERS CANNOT BE CATEGORIZED AS PAYMENTS TOWARDS SUB CONTRACTS AND THEREFORE ASSESSEE WAS NOT LIABLE TO DEDUCT TAX AT SOURCE AS PER THE PROVISIONS OF SECTION 194C AND CONSEQ UENTLY THE PROVISIONS OF SECTION 40(A)(I) WERE NOT APPLICABLE SUCH PAYMENTS. ITA NO253&349/DEL/2009 19 DCIT V. SATISH AGGARWAL & C DCIT V. SATISH AGGARWAL & C DCIT V. SATISH AGGARWAL & C DCIT V. SATISH AGGARWAL & CO. 124 TTJ 542 (AMRITSAR ): O. 124 TTJ 542 (AMRITSAR): O. 124 TTJ 542 (AMRITSAR): O. 124 TTJ 542 (AMRITSAR): THE ASSESSEE HIRED TRUCKS FOR A FIXED PERIOD ON PAYMENT OF HIRE CHARGES. THERE WAS NO AGREEMENT FOR CARRYING OUT ANY WORK OR TO TRANSPORT ANY GOODS AS OR PASSENGERS FROM ONE PLACE TO ANOTHER. IT WAS HELD THAT HIRING OF TRUCKS FOR THE PURPOSE OF U SING THEM IN ASSESSEES BUSINESS DID NOT AMOUNT TO CONTRACT FOR CARRYING OUT ANY WORK AS CONTEMPLATED IN SECTION 194C. FOR CARRYI NG OUT ANY WORK MANPOWER IS THE SINE QUA NON. MERE PROVIDING OF THE TRUCKS WITHOUT ANY MANPOWER CAN NOT BE TERMED AS CARRYING O UT ANY WORK BY THE TRUCK OWNERS. ONCE THE CONTRACT WAS NOT FOR CARRYING OUT ANY WORK, THE PROVISIONS OF SECTION 194C WERE NOT ATTRACTED. DATTA DIGAMBER SAHAKARI KAMGAR SANSTHAN LTD. V. ACIT 83 ITD DATTA DIGAMBER SAHAKARI KAMGAR SANSTHAN LTD. V. ACIT 83 ITD DATTA DIGAMBER SAHAKARI KAMGAR SANSTHAN LTD. V. ACIT 83 ITD DATTA DIGAMBER SAHAKARI KAMGAR SANSTHAN LTD. V. ACIT 83 ITD 148 (PUNE). 148 (PUNE). 148 (PUNE). 148 (PUNE). ASSESSEE A COOPERATIVE SOCIETY ENGAGED IN EXECUTING CON TRACT FOR TRANSPORTATION OF MILK OF THE GOVT. MILK SCHEME S BY USING TANKERS BELONGING TO ITS MEMBERS ON PAYMENT OF TRANSPOR T CHARGES. TRANSPORT WORK UNDERTAKEN BY THE ASSESSEE SOCIET Y WAS SO COMPLEX THAT NO INDIVIDUAL TANKER OWNER COULD BE SAID TO BE CARRYING OUT ANY PART THEREOF. TANKER OWNERS HAD MER ELY ENTRUSTED THESE TANKERS TO THE ASSESSEE SOCIETY. THEREFORE , IT COULD NOT BE SAID THAT THE ASSESSEE SOCIETY HAD GIVEN FUR THER SUB CONTRACT TO ITS OWN MEMBERS. THEREFORE, PROVISIONS OF SECTION 194C WERE NOT APPLICABLE. 35. THE FACTS OF THE CASES RELIED UPON BY LD AR ARE SIM ILAR TO THE FACTS OF PRESENT CASE AND HENCE THE RATIO LAID DOWN IN THOSE CASES IS APPLIED TO THE PRESENT CASE AND IS CONCLUDED THAT IN THE PRESENT CASE ITA NO253&349/DEL/2009 20 ASSESSEE WAS NOT REQUIRED TO DEDUCT TAX ON PAYMENTS MADE FOR LEASE OF DUMPERS. IN VIEW OF THE ABOVE, THE APPEAL OF THE ASSESSEE IS ALLOWED. 36. THE FOURTH AND LAST GROUND OF ASSESSEES APPEAL IS R EGARDING NON ALLOWING OF DEDUCTION U/S 80IB ON THE GROUND THAT IT WAS NOT CLAIMED IN THE ORIGINAL RETURN OF INCOME. THE LD CIT(A) REJECT ED THIS GROUND OF APPEAL BECAUSE OF THE FACT THAT NO CLAIM WAS MADE IN THE RETURN OF INCOME AND NO CLAIM WAS MADE BEFORE ASSESSING OFFICER DU RING ASSESSMENT PROCEEDINGS. 37. BEFORE US LD AR ARGUED THAT EVEN NO CLAIM WAS MAD E IN THE RETURN OF INCOME THEN ALSO THE ASSESSEE IS ELIGIBLE TO GE T THE BENEFIT OF DEDUCTION U/S 80IB OF THE ACT. HE PLEADED THAT THE O BJECTIVE OF THE INCOME TAX PROCEEDINGS IS TO ASSESS FAIR AMOUNT OF INCOM E AND TAX PAYABLE AS PER LAW. IF ANY CLAIM IS ALLOWABLE TO THE ASSESSEE AND THE ASSESSEE OMITS TO MAKE CLAIM IN THE RETURN, IT WAS THE DU TY OF THE ASSESSING OFFICER TO INFORM THE ASSESSEE ABOUT SUCH OMISSION AND GIVE HIM OPPORTUNITY TO MAKE THE CLAIM AS PER LAW. HE PLA CED RELIANCE IN THE DECISION OF DELHI BENCH OF THE TRIBUNAL IN THE C ASE OF M/S JP STONE CRUSHER PVT. LTD. IN I.T.A. NO.3872/DEL/2009, ASSESSMENT YEAR 2006-07 AND IN I.T.A. NO. 350/DEL/2009 FOR ASSESSMENT YEAR 2005 -06 AND IN THE CASE OF MALIKA ARJUN JEO RESOURCES ASSOCIATES IN I.T.A. NO.,5000/DEL/2004 FOR ASSESSMENT YEAR 2002-03. RELIANC E WAS ALSO PLACED ON THE DECISION OF HON'BLE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2006-07 IN I.T.A. NO.3874/DEL/2009. 38. THE LD DR RELIED UPON THE ORDER OF LD CIT(A) IN THIS REGARD AND ARGUED THAT IN THE ABSENCE OF ANY SPECIFIC CLAIM MADE BY THE ASSESSEE BEFORE ASSESSING OFFICER. THE LD CIT(A) WAS CORRECT IN D ISMISSING THIS GROUND OF APPEAL. ITA NO253&349/DEL/2009 21 39. WE HAVE HEARD THE RIVAL PARTIES AND HAS GONE THR OUGH THE MATERIAL PLACED ON RECORD. WE HAVE ALSO GONE THROUG H THE JUDGMENT OF HON'BLE TRIBUNAL IN ALL CASES RELIED UPON BY THE LD A R AND HAS FOUND THE FACTS OF THE PRESENT CASE ARE SIMILAR ONLY IN THE C ASE IN I.T.A. NO.350/DEL/.2009 WHEREIN THE HON'BLE DELHI BENCH D HAS DEALT WITH THE SIMILAR ISSUE WHICH WAS AT GROUND NO.3 OF THE APPE AL. THE TRIBUNAL HAS HELD IN FAVOUR OF THE ASSESSEE AND HAD REM ITTED BACK FILE TO THE OFFICE OF ASSESSING OFFICER FOR CONSIDERATION OF CLAIM OF ASSESSEE U/S 80IB. WHILE DECIDING THE MATTER, THE HON'BLE TRI BUNAL HAD CONSIDERED VARIOUS JUDICIAL PRONOUNCEMENTS IN WHICH I T WAS HELD THAT THE AUTHORITIES UNDER THE ACT ARE UNDER AN OBLIGATIO N TO ACT IN ACCORDANCE WITH LAW. IF AN ASSESSEE UNDER A MISTAKE, MISC ONCEPTION OR NOT BEING PROPERLY INSTRUCTED IS OVER-ASSESSED, THE AUTH ORITIES UNDER THE ACT ARE REQUIRED TO ASSIST HIM AND ENSURE THAT ONLY LEGITIMATE TAXES ARE COLLECTED. 40. RESPECTFULLY FOLLOWING THE VARIOUS JUDICIAL PRONO UNCEMENTS, WE ARE OF THE CONSIDERED OPINION THAT THIS ISSUE ALSO REQU IRES TO BE CONSIDERED AT THE LEVEL OF ASSESSING OFFICER. THEREFORE, WE RESTORE THE SAME TO THE FILE OF THE ASSESSING OFFICER TO BE DECIDED AS PER LAW. THEREFORE, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. 41. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED AND HE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 42. ORDER PRONOUNCED IN THE OPEN COURT ON THE 25TH DAY OF MAY, 2012. SD/- SD/- (A.D. JAIN) (T.S. KAPOOR ) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 25.5.2012. HMS ITA NO253&349/DEL/2009 22 COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). DATE OF HEARING 10.4.2012 DATE OF DICTATION 16.5.2012 DATE OF TYPING 18.5.2012 DATE OF ORDER SIGNED BY 25.5.2012 BOTH THE MEMBERS & PRONOUNCEMENT. DATE OF ORDER UPLOADED ON NET & SENT TO THE BENCH CONCERNED.
