The ACIT, Circle-6, Surat V. M/s. Laser Mark, Surat

ITA 2805/AHD/2004

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0402 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2009
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 27-11-2009
• Assessment Year: 2001-2002
• Appeal Filed On: 20-09-2004
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Assessee Lawyers: J P SHAH
• Keywords: TDS
• Section: 143(3); 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER DATE OF HEARING:27/11/2009 DRAFTED ON:30.11.0 9 ITA NO.2805/AHD/04 ASSESSMENT YEAR : 2001-2002 ASST. COMMISSIONER OF INCOME TAX, CIRCLE-6, SURAT. VS. M/S. LASER MARK 1 ST FLOOR, DURGABHAVAN KHANSB NO DELLO, RUGHNATHPURA, MAIN ROAD, SURAT. PAN/GIR NO. : AAAFL 9390C (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI C.K.MISHRA SR. D.R. RESPONDENT BY: SHRI J.P.SHAH A.R. O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD.CIT(APPEALS)-IV, SURAT, DATED13.07.2004 IN APPEA L NO.CAS-IV/71/03-04. 2. THE SOLE GROUND OF APPEAL TAKEN BY THE REVENUE I S THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN DELETI NG THE ADDITION OF RS.32,60,820/- MADE ON ACCOUNT OF TRANSFER OF PROFI T TO ASSOCIATE CONCERNS IN THE GARB OF DISCOUNT. 3. THE BRIEF FACTS OF THE CARE ARE THAT THE APPELLA NT IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF LASER SAWING OF DIAMOND ON JOB WORK BASIS. THE APPELLANT FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2001-02 ON 12.07.2001 DECLARING TOTAL INCOME OF RS.59,97,900/- . THE LEARNED ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-6, SURAT COMPLET ED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT BY PASSING AN ORDER DATED 29.10.2003 WHEREBY THE TOTAL INCOME OF THE APPELLANT WAS DETERMINED AT RS.92,58,720/-. WHILE ITA NO .2805/AHD/2004 M/S. LASER MARK ASST.YEAR -2001-02 - 2 - DETERMINING THE TOTAL INCOME AT RS.92,58,720/- , TH E LD LEARNED ASSESSING OFFICER HAS DISALLOWED THE TOTAL CLAIM OF DISCOUNT OF RS.32,60,820/- ON ACCOUNT OF ALLEGED TRANSFER OF PROFITS TO ASSOCIATE S CONCERNS. 4. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX(A PPEALS) DELETED THE ABOVE ADDITION. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. IN THE INSTANT CASE, THE ASSESSEE IS ENGAGED IN LASER SAWING OF DIAMONDS ON JOB WORK BASIS. THE ASSESSEE ITS RETURN OF INCOME DISCLOSED RECEIPT OF RS.1,87,37,183/- FROM THE JOB WORK CHARGES WHICH INCLUDED RS.1,64,36,392/- FR OM M/S. H. DIPAK & CO. MUMBAI AND RS.3,93,033/- FROM M/S. DEPAK H. SHAH MU MBAI, WHICH WERE THE SISTER CONCERNS OF THE ASSESSEE. THUS, OUT OF T OTAL RECEIPTS OF RS.1,87,37,183/-, RS.167,75,425/- WERE FROM AFORESA ID TWO SISTER CONCERNS. THE LEARNED ASSESSING OFFICER OBSERVED THAT IN RESP ECT OF M/S. H. DIPAK & CO. MUMBAI THE ASSESSEE HAS RAISED GROSS BILLS OF R S. 1,96,23,069/- ON WHICH TDS WAS ALSO DEDUCTED BY THE SAID PARTY, BUT THE AS SESSEE CLAIMED TO HAVE ALLOWED DISCOUNT OF RS.31,86,677/- TO THE SAID CONC ERNS AND THEREFORE, REFLECTED RS.1,64,36,392/- ONLY IN ITS RECEIPTS. S IMILARLY, IN THE CASE M/S DIPAK H. SHAH, THE LEARNED ASSESSING OFFICER OBSERV ED THAT THE GROSS BILL RAISED BY ASSESSEE WAS TO THE TUNE OF RS.413176/- B UT THE ASSESSEE HAS SHOWN RECEIPT OF RS.3,39,033/- ONLY AFTER ALLOWING DISCOU NT OF RS.74,143/- TO THE SAID CONCERN. THE LEARNED ASSESSING OFFICER OBSERVED FOR M THE ABOVE THAT THE ASSESSEE HAS ALLOWED DISCOUNT OF RS. 32,60,820/- TO THE SISTER CONCERNS WHICH WERE 20% OF THE BILLED AMOUNT. ACCORDING TO THE LEA RNED ASSESSING OFFICER, SUCH HIGH RATE OF DISCOUNT WAS UNHEARD OF IN THE LI NE OF THE BUSINESS IN WHICH THE ASSESSEE WAS ENGAGED. THE LEARNED ASSESSING OF FICER FURTHER OBSERVED THAT TWO SISTER CONCERNS TO WHOM DISCOUNT WAS ALLOW ED WERE CLAIMING DEDUCTION UNDER SECTION 80HHC OF THE ACT IN RESPEC T OF THEIR INCOME AND ITA NO .2805/AHD/2004 M/S. LASER MARK ASST.YEAR -2001-02 - 3 - THEREBY THEY WERE LIABLE TO PAY LESSER TAX ON THE S AME AMOUNT OF INCOME AND THEREFORE, THE ASSESSEE BEING THE SISTER CONCERN DI VERTED THE PROFIT TO THE SAID SISTER CONCERNS IN ORDER TO PAY LESSER AMOUNT OF TA X. IN VIEW OF THIS, THE LEARNED ASSESSING OFFICER ADDED RS.32,60,820/- BEIN G DISCOUNT CLAIMED BY THE ASSESSEE AS GIVEN TO THE SAID TWO SISTER CONCER NS. 6. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X(APPEALS) DELETED THE ABOVE ADDITION BY OBSERVING AS UNDER:- AFTER CONSIDERING THE OBSERVATIONS OF LEARNED ASSE SSING OFFICER IN THE ASSESSMENT ORDER AS WELL AS REMAND REPORT AN D SUBMISSION OF THE APPELLANT, IT IS CLEAR THAT THE ADDITION WAS MADE B Y THE LEARNED ASSESSING OFFICER ON THE FOLLOWING GROUND ONLY:- I) THE BILLS WERE RAISED @ RS.100/- PER CARAT AND DISC OUNT ALLOWED WAS RS.20/- PER CARAT AS AN AFTERTHOUGHT IN ORDER TO REDUCE THE TAX LIABILITY ESPECIALLY BECAUSE THE PRINCIPAL IN MUMBAI ENJOIN THE BENEFIT OF DEDUCTION UNDER SEC TION 80HHC AND THE TAX LIABILITY ON THE PRINCIPAL WAS ON LY 20% OF THE BENEFIT TAKEN BY THE AS ASSESSEE AS WELL AS OF GIVING DISCOUNT. II) THE TDS CERTIFICATE SHOWS THAT THE PRINCIPAL HAD DE DUCTED TDS @ 2.2% UNIFORMLY AND PAID THE SAME TO THE GOVERNMENT. ACCORDING TO THE LEARNED ASSESSING OFFI CER, THIS SHOWS THE INTENTION OF THE PRINCIPAL AS HAVING ACCEPTED THE RATE OF RS.100/- PER CARAT. III) THE CHART OF BILLS RAISED BY THE APPELLANT AND MONE Y RECEIVED BY THE APPELLANT FROM THE PRINCIPALS SHOWS THAT NO AMOUNT WAS WITHHELD. THE LEARNED ASSESSING OFFIC ER HAS STATED THAT TILL NOVEMBER, 2000 THE BILLS OF RS .1.28 CRORE WERE RAISED WHEREAS THE PAYMENT OF RS.1.25 CR ORES WAS MADE. SIMILARLY BILLS FROM DECEMBER, 2000J TO M ARCH 2001 WAS RAISED FOR RS.67.93 LACS AND PAYMENT WAS M ADE FOR RS.42 LAC. IV) THE PARTIES I.E. BOTH THE PRINCIPALS WERE RELATED T O THE APPELLANT AND HENCE THEY WERE COVERED BY THE PROVIS ION OF SECTION 40A(2)(B). V) FROM THE ABOVE, IT IS CLEAR THAT THE WHOLE DEVISE O F GIVING DISCOUNT WAS COLOURABLE AND ENTERED INTO TO ACCOMMODATE SO THAT THE TAX LIABILITY WOULD REDUCED . 2.3.5 THE CONTENTION OF THE LEARNED ASSESSING OFFIC ER IN RESPECT OF THE ABOVE POINTS IS NOT SUSTAINABLE FROM THE DOCUMENTS FURNISHED BY THE ITA NO .2805/AHD/2004 M/S. LASER MARK ASST.YEAR -2001-02 - 4 - APPELLANT AND ALSO GIVEN TO THE LEARNED ASSESSING O FFICER FOR REMAND REPORT. IT IS TRUE THAT THE APPELLANT HAD GIVEN WRO NG REASONING AT THE TIME OF ASSESSMENT PROCEEDINGS BUT THE BILLS SUBMIT TED TO THE LEARNED ASSESSING OFFICER WERE ONLY SAMPLE BILLS PERTAINING TO THE PERIOD APRIL TO AUGUST, 2000 ONLY. THE WHOLE CONCLUSION WAS DRAWN ON THE BASIS OF THOSE BILLS. THE LEARNED ASSESSING OFFICER HAS NOT BEEN ABLE TO POINT OUT IN THE REMAND REPORT THAT WRONG BILLS WERE SUBMITTE D. AT THAT THE LEARNED ASSESSING OFFICER HAS STATED IN THAT THE SU BMISSIONS IN SO FAR AS THE ARGUMENTS MADE WERE WRONG. ABOUT VERACITY OF TH E BILLS VIS--VIS TDS CERTIFICATE HAS BEEN VERIFIED. THEREFORE, THE D OUBT ABOUT THE GENUINENESS OF BILL DOES NOT EXIST. THE CONTENTION OF THE LEARNED ASSESSING OFFICER /ADDL. CIT IN REMAND REPORT WITH RESPECT TO RAISING OF THE BILL AND RECEIPT OF FULL PAYMENT IS TOTALLY WRO NG. FROM THE TABLE REPRODUCED ABOVE, IT IS CLEAR THAT EVEN THOUGH THE TABLE SPEAKS DIFFERENTLY, THE LEARNED ASSESSING OFFICER HAS GIVE N A WRONG STATEMENT. FROM THE TABLE GIVEN BY THE ADDL. CIT IN HIS LETTER DATED 16.06.2004, IT IS CLEAR THAT ALTHOUGH THE BILLS WERE RAISED FROM MAY 2000 TO NOVEMBER, 2000 AMOUNTING TO RS.1,28,29,729/- BUT THE ONE TO O NE CORRELATION FOR THE PAYMENT FROM MAY, 2000 TO JANUARY 2001HAS BEEN MADE. IT IS NOT UNDERSTOOD AS TO WHY THE ADDL. CIT HAS STATED THAT ONE TO ONE CORRELATION SHOWS THAT THE PAYMENT OF RS.1.25 CRORE HAS BEEN MADE UPTO NOVEMBER, 2000 AS AGAINST THE BILL OF RS.1.28 CRORE UP NOVEMBER 2000 ALTHOUGH THE BILLS WERE RAISED FOR RS.1.28 CRO RE BUT THE PAYMENT WAS RECEIVED ONLY OF RS.55 LACS. OUT OF THE SAID PA YMENT OF RS.1.25 CRORE, RS.20 LCAS HAS BEEN RECEIVED IN DECEMBER, 20 00 AND RS.50 WAS RECEIVED IN JANUARY, 2001 IN ON THE BASIS OF THIS T ABLE PREPARED BY THE ADDL. CIT IN HIS LETTER MENTIONED ABOVE. THE APPELL ANT HAS STATED THAT THIS TABLE ITSELF PROVES THAT OUT OF RS.1.25 CRORE TO APPELLANT ONLY RS.55 LACS WAS GIVEN AGAINST BILLS OF RS.1.28 CRORE AND H ENCE SUBSTANTIAL PORTION OF THE PAYMENT WAS WITHHELD. IT IS ONLY WHEN THE PA RT SETTLEMENT WAS MADE IN SEPTEMBER THAT RS.20 LAC WERE REALISED IN DECEMBER, 2000 AND ONLY WHEN THE ALMOST FULL SETTLEMENT WAS MADE BY DE CEMBER END THAT 40% OF THE PAYMENT I.E. RS50 LACS WERE REALIZED IN JANUARY 2001. FROM THE TABLE CITED BY THE ADDL. CIT IN HIS REMAND REPO RT, IT IS THE CASE OF THE ASSESSEE WHICH BECOMES STRONGER AND IT DOES NOT PRO VE THE CONTENTION OF THE ADDL.CIT THAT THERE WAS NO DISPUTE BETWEEN T HE ASSESSEE AND THE PRINCIPALS. IN FACT, THIS TABLE PROVES THAT THERE M IGHT HAVE BEEN A DISPUTE WHICH WAS RESOLVED SOMEWHERE AROUND DECEMBER 2000. THE CONTENTION OF THE LEARNED ASSESSING OFFICER THAT THE PARTIES A RE COVERED BY THE PROVISIONS OF SECTION 40A(2)(B) ARE CORRECT BUT IT IS SEEN THAT THE END THE DISALLOWANCE HAS NOT BEEN MADE UNDER SECTION 40A(2) (B). FURTHER, THE LEARNED ASSESSING OFFICER HAS TO GIVE PROOF THAT TH E RATE AT WHICH THE ASSESSEE HAS SOLD OR DONE THE WORK FOR THE PRINCIPA L IS LESS THAN THE MARKET RATE. SINCE NO SUCH FINDING HAVE BEEN GIVEN AND THE DISALLOWANCE ITA NO .2805/AHD/2004 M/S. LASER MARK ASST.YEAR -2001-02 - 5 - HAS NOT BEEN MADE UNDER SECTION 40A(2)(B), THIS OBS ERVATION HAS NOT MEANING. THEREFORE, SINCE NO COMPARISON HAS BEEN GI VEN WITH THE MARKET RATE, THE CONTENTION OF THE LEARNED ASSESSIN G OFFICER THAT THE PROVISION OF SECTION 40A(2)(B) ARE NOT APPLICABLE D O NOT GIVEN ANY MERIT. IT IS FURTHER STATED BY THE APPELLANT THAT THE PRIN CIPALS KEPT ON DEDUCTING TDS FROM THE BILLS RAISED FOR THE SIMPLE REASON THA T IF THE TDS HAD NOT BEEN DEDUCTED @2.2% THEY WOULD HAVE DEFAULTED AND T HEY WOULD HAVE VIOLATED THE TDS PROVISIONS INVITING PENALTY ETC. THE APPELLANT HAD ALSO NOT OBJECTED TO THE DEDUCTION OF TDS ON THE ENTIRE BILL BECAUSE ITS LIABILITY FOR TAX WAS MUCH GREATER THAN THE TOTAL A MOUNT OF TDS THAT WOULD HAVE BEEN DEDUCTED AS PER THE BILLS RAISED. F URTHER, IT IS CLEAR FROM THE TDS CERTIFICATE COPY OF WHICH WAS FILED WITH TH E LEARNED ASSESSING OFFICER THAT THE BILLS RAISED ARE THE SAME AS THE C OPIES OF THE BILLS FILED WITH THE LEARNED ASSESSING OFFICER AND THE AMOUNTS TALLY. FROM THE BILLS, IT MAY BE SEEN THAT THE RATES OF THE LABOUR WORK AS STATED BY THE APPELLANT IS SUBSTANTIATED. IT IS CLEAR THAT FROM A PRIL TO SEPTEMBER, THE RATE WAS CHARGED @RS.100/- PER CARAT FOR BOTH THE Q UALITIES AND FROM OCTOBER TO DECEMBER, THE RATE FOR ONE OF THE MAJOR QUALITY WAS CHARGED @ RS.85/- PER CARAT AND FOR THE ANOTHER QUALITY WHI CH WAS LESSER IN AMOUNT, IT WAS CHARGED @ RS.100/- PER CARAT. IT IS ALSO PROVED THAT FROM JANUARY, 2001 TO MARCH, 2001 AND ALSO TILL MARCH, 2 004J FOR BOTH THE QUALITIES, THE RATES HAVE BEEN CHARGED @ RS.60/- PE R CARAT. IF IT WAS AN ACCOMMODATION TO REDUCE THE TAX LIABILITY, THE ASSE SSEE COULD NOT HAVE PRODUCE THE PROOF TO SHOW THAT THE RATE TILL MARCH, 2004 HAS BEEN RS.60/- PER CARAT ONLY. IT HAS BEEN CONTENDED BY TH E APPELLANT THAT FROM THE FACT THAT TILL MARCH, 2004 AND RATE ALLOWED HAS BEEN RS.60/- PER CARAT SHOWS THAT THE AGREEMENT WAS FINALLY ARRIVED AT FRO M JANUARY, 2001 THAT THE RATE WAS TO BE CHARGED @ RS.60/- PER CARAT ONLY FOR BOTH THE QUALITIES. IT IS FURTHER SEEN THAT IN THE ASSESSMEN T ORDER, THE LEARNED ASSESSING OFFICER DID NOT BOTHER TO VERIFY WHETHER THE 20% DISCOUNT ON THE BILLS WAS EQUAL TO THE TOTAL DISCOUNT CLAIMED B Y THE ASSESSEE IN THE RETURN. IT IS SEEN THAT IF HE HAD CALCULATED THE 20 % DISCOUNT, HE WOULD HAVE REALIZED THAT THE FIGURE OF DISCOUNT WAS NOT T ALLYING. 20% OF GROSS RECEIPT OF RS.1,67,75,695/- FROM M/S. H.DEEPAK & CO . WOULD BE RS.33,55,139/- AND 20% OF GROSS RECEIPT FROM MR. DE EPAK H. SHAH OF RS.19,61,988/- WOULD BE RS.3,92,297/- TOTALLING TO RS.37,74,436/- AS AGAINST THE CLAIM OF RS.32,60,820/-. THE AMOUNT OF DISCOUNT CLAIMED WAS CORRECT BUT WAS NOT TALLYING WITH THE 20% OF THE TO TAL BILLING WHEREAS FROM ALL THE BILLS IT IS SEEN THAT THE DISCOUNT AMO UNT ARE IN CONFORMITY WITH 20% DISCOUNT AT DIFFERENT VARYING RATES AND IF THE DISCOUNT IS CALCULATED IN THIS MANNER THEN ONLY THE DISCOUNT CL AIMED IN THE PROFIT & LOSS ACCOUNT TALLIES. THIS FURTHER SHOWS THAT THE B ILLS HAVE NOT BEEN FUDGED OR REMADE. IT ONLY SHOWS THAT THE SUBMISSION MADE WAS INCORRECT EARLIER DUE TO THE FACT THAT THE SUBMISSION WAS MAD E ON THE BASIS OF ITA NO .2805/AHD/2004 M/S. LASER MARK ASST.YEAR -2001-02 - 6 - SAMPLE BILLS. THE CONTENTION OF THE LEARNED ASSESSI NG OFFICER THAT THE WHOLE DEVICE WAS MADE TO EVADE THE TAX BECAUSE THE PRINCIPAL WAS GETTING 80% BENEFIT UNDER SECTION 80HHC IS PLAUSIBL E BUT AS STATED BY THE APPELLANT IT IS HIGHLY UNLIKELY THAT THE PRINCI PAL WHO WAS PAYING MORE THAN RS.2 CRORE OF TAX WOULD RESORT TO THIS DEVICE FOR SAVING A FEW LAC RUPEES (MUCH LESS THAN RS.10 LAC) AS AGAINST EARNIN G OF RS.2 CRORE. IN ANY CASE, AS STATED ABOVE, THE BILLS ARE ORIGINAL BILLS AS BORNE OUT FROM THE TDS CERTIFICATE. THE CONTENTION MADE THAT UP TO AUG UST, THE RATE WAS RS.100/- PER CARAT FROM SEPTEMBER TO DECEMBER RS.85 /- AND FROM JANUARY, 2000 ONWARDS THE RATE IS BORNE OUT FROM T HE BILLS SUBMITTED. SINCE THE DISCOUNT @ 20% ON THESE BILLS TALLIES WIT H THE TOTAL DISCOUNT FURTHER PROVES THAT THE CONTENTION OF THE APPELLANT IS CORRECT. 3. IN VIEW OF THE ABOVE, THE ADDITION MADE THE LEAR NED ASSESSING OFFICER CANNOT BE SUSTAINED AS IT IS BASED TOTALLY ON CONJECTURES AND SURMISES AND NOT ON FACTS. THE LEARNED ASSESSING OF FICER HAS ALSO NOT BEEN ABLE TO PROVE THAT THERE WAS SOME UNDERHAND DE ALING OR THERE WAS TRANSACTIONS IN CASH. HENCE, THE ADDITION OF RS.32, 60,820/- IS DELETED. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENT LY SUPPORTED THE ORDER OF THE LEARNED ASSESSING OFFICER AND SUBMITTE D THAT LEARNED COMMISSIONER OF INCOME TAX(APPEALS) WAS NOT JUSTIFI ED IN DELETING THE ADDITION MERELY ON THE GROUND THAT THE SISTER CONCE RNS HAVE PAID TAXES IN CRORES WOULD NOT HAVE ADOPTED THIS DEVICE OF DISCOU NT MERELY TO SAVE TAXES WHICH WOULD HAVE BEEN LESS THAN RS.10 LACS. HE ARGU ED THAT THE LEARNED ASSESSING OFFICER HAS POINTED OUT THAT DISCOUNT ALL OWED WHICH WAS ABOUT 20% OF THE BILL VALUE WAS UNHEARD OF AND THUS THE SAME WAS NOT AS PER THE MARKET RATE. THE LEARNED COMMISSIONER OF INCOME TAX(APPEAL S) WITHOUT BRINGING ON RECORD, ANY MATERIAL TO SHOW THAT THE DISCOUNT W AS IN ACCORDANCE WITH THE MARKET RATE PREVAILING AT THE MATERIAL TIME WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.32,60,820/-. ON THE OTHER HAND, LEAR NED AUTHORISED REPRESENTATIVE OF THE ASSESSEE VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AND STATED THAT A NET PROFIT DECLARED BY THE ASSESSEE AFTER ALLOWING DISCOUNTS TO THE SIS TER CONCERNS WORKED OUT TO 31% OF THE RECEIPTS, AND THEREFORE, THE DISCOUNT AL LOWED CANNOT BE HELD AS UNREASONABLE. WE FIND THAT IN THE INSTANT CASE, THE ASSESSEE HAS RECEIVED JOB CHARGES OF RS.1,87,37,183/- OUT OF WHICH 1,67,75,42 5/- WAS FROM THE SAID TWO ITA NO .2805/AHD/2004 M/S. LASER MARK ASST.YEAR -2001-02 - 7 - SISTER CONCERNS AND THE BALANCE AMOUNT OF RS. 19,61 ,758/- WAS FROM OTHERS. WE FIND THAT BOTH THE PARTIES BEFORE US OR BEFORE T HE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS BROUGHT NO MATERIAL TO S HOW THE RATES AT WHICH JOB CHARGES WAS REALIZED FROM THE OTHER PARTIES AND HOW THE SAME COMPARES WITH THE NET JOB CHARGES REALIZED FROM THE SAID TWO SISTER CONCERNS. IN THE INSTANT CASE, IT IS OBSERVED THAT THE GENUINENESS O F DISCOUNT ALLOWED BY THE ASSESSEE TO THE AFORESAID TWO SISTER CONCERNS IS NO T IN DOUBT OR DEBATE. THE ONLY POINT WHICH IS TO BE EXAMINED TO ADJUDICATE TH E ISSUE WAS THAT THE NET JOB CHARGES WHICH WAS REALIZED BY THE ASSESSEE FROM THE SAID TWO SISTER CONCERNS WERE IN ACCORDANCE WITH THE MARKET RATE PREVAILING AT THE MATERIAL TIME OR NOT. WE FIND THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ALSO NOT EXAMINED THE ISSUE FROM THIS POINT OF VIEW. THE LEA RNED COMMISSIONER OF INCOME TAX(APPEALS) HAS OBSERVED THAT THE RATES AT WHICH BILLS WERE DRAWN IN THE CASE OF SISTER CONCERNS WERE RS.100/- PER CARAT FOR THE PERIOD APRIL TO AUGUST 2000, @ RS.85/- PER CARAT DURING THE PERIOD SEPTEMBER TO DECEMBER 2000 AND RS.65/- PER CARAT DURING THE PERIOD JANUAR Y 2001 TO MARCH 2001. HOWEVER, THE LEARNED COMMISSIONER OF INCOME TAX(APP EALS) HAS NOT BROUGHT ON RECORD, WHAT WAS THE RATE OF DISCOUNT PE R CARAT WHICH WAS ALLOWED BY THE ASSESSEE TO ITS SISTER CONCERNS DURING THE A FORESAID PERIOD. IN OUR CONSIDERED OPINION, NO MEANINGFUL INTERPRETATION OF THE ABOVE RATES CAN BE DRAWN WITHOUT THE CORRESPONDING AMOUNT OF DISCOUNT ALLOWED BY THE ASSESSEE IS CONSIDERED TOGETHER. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS NOT BROUGHT ON RECORD THE TOTAL QUANTITY OF JOB WORK DONE BY THE ASSESSEE DURING THE PERIOD UNDER CONSIDERATION AND TO CONSID ER THEREAFTER THE NET RATE PER CARAT REALIZED BY THE ASSESSEE FROM THE SISTER CONCERNS DURING THE SAID PERIOD AND HOW THE SAME COMPARED TO THE MARKET RATE PREVAILING AT THAT PERIOD. AS OBSERVED ABOVE, THE ASSESSEE HAS RENDER ED SERVICES TO OTHERS ALSO OF ABOUT RS. 19,61,758/-. THUS, THE LEARNED ASSESSI NG OFFICER COULD HAVE EASILY EXAMINED THAT WHAT WAS THE RATE AT WHICH SER VICES WERE RENDERED BY THE ASSESSEE TO THE OTHER PARTIES AT THE MATERIAL TIME AND WHETHER THOSE RATES WERE ITA NO .2805/AHD/2004 M/S. LASER MARK ASST.YEAR -2001-02 - 8 - MORE THAN THE NET RATE REALIZED BY THE ASSESSEE FRO M THE SAID TWO SISTER CONCERNS. ON THE OTHER HAND, THE ASSESSEE COULD HAV E ALSO PRODUCE THE BILLS OF THE OTHER PARTIES TO SHOW THAT THE NET RATES REALIZ ED FROM THE SAID TWO SISTER CONCERNS WERE NOT LESS THAN THE RATES FOR WHICH IT DID SIMILAR JOBS FOR OTHER PARTIES. IN THE CIRCUMSTANCES, IN OUR CONSIDERED OP INION, IT SHALL BE FAIR AND IN THE INTEREST OF THE JUSTICE TO RESTORE THIS ISSUE B ACK TO THE FILE OF LEARNED ASSESSING OFFICER FOR ADJUDICATION AFRESH IN LIGHT OF THE DISCUSSION MADE HEREINABOVE AFTER ALLOWING PROPER OPPORTUNITY OF HE ARING TO THE ASSESSEE. WE ORDER ACCORDINGLY. THUS, THIS GROUND OF APPEAL OF T HE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED AT THE CLOSE OF THE HEARING IN THE PRESENCE OF THE PARTIES IN THE COURT ON 27/11/2009. SD/- SD/- ( MAHAVIR SINGH) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 27/11/2009 PREPARED AND COMPARED BY : PARAS ITA NO .2805/AHD/2004 M/S. LASER MARK ASST.YEAR -2001-02 - 9 - COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-IV, SURAT. 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD