ITO, New Delhi V. M/s. Kama Holdings Ltd., New Delhi

ITA 2993/DEL/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6398 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 20-03-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 15-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MONA SINGH
• Assessee Lawyers: ANANDI PRASAD
• Keywords: Earning of tax free income; Proportionate interest; Revised return; Rule 8D
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 14A; 143(1); 13

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER I.T.A. NO. 2993/DEL/2014 A.Y. : 2008-09 INCOME TAX OFFICER, WARDS 5(1), NEW DELHI ROOM NO. 376A, CR BUILDING, I.P. ESTATE, NEW DELHI VS. M/S KAMA HOLDINGS LTD., C-8, COMMERCIAL COMPLEX, SAFDARJUNG DEVELOPMENT AREA, NEW DELHI 110 016 (PAN: AAFCS9521A) (APPELLANT) (RESPONDENT) DEPARTMENT BY : MS. MONA SINGH, CIT(DR) ASSESSEE BY : SH. ANANDI PRASAD, CA ORDER PER H.S. SIDHU : JM THE REVENUE HAS FILED THIS APPEAL AGAINST THE IMP UGNED ORDER DATED 21.1.2014 PASSED BY THE LD. CIT(A)-XI, NEW DE LHI RELEVANT TO ASSESSMENT YEAR 2008-09. 2. THE GROUNDS RAISED IN THE REVENUES APPEAL READ AS UNDER:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) ERRED IN RESTRICTING THE ADDITIONAL DISALLOWANCE MADE U/S. 14A TO RS. 92,88,538/- AND ALLOWING RELIEF OF RS. 4,42,76,962/ - 2 TO THE ASSESSEE WITHOUT APPRECIATING THE PROVISION OF RULE 8D? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE COMPUTED UNDER RULE 8D(2)(II) AMOUNTING TO RS. 5,14,64,000/- MADE BY THE AO AND ACCEPTING THE WORKING OF THE ASSESSEE OF DISALLOWAN CE OF RS. 71,86,533/- UNDER RULE 8D(2)(I), IGNORING TH E FACT THAT THE PROVISION OF RULE 8D DOES NOT MAKE AN Y SUCH DISTINCTION? 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 12,32,814/- BEING PRIOR PERIOD EXPENSES IGNORING THE FACT THAT THE BILL WAS RAISED ON 28.3.2007 PERTAINING TO FY 2006-07? 4. THAT THE ORDER OF THE LD. CIT(A) IS ERRONEOUS AN D IS NOT TENABLE ON FACTS AND IN LAW. 5. THAT THE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER. 3 6. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, A MEND OR FOREGO ANY GROUND(S) OF THE APPEAL RAISED ABOVE AT THE TIME OF THE HEARING. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF ENGINEERING PLAS TIC AND FISH NET TWINES. THE ASSESSEE FILED ITS RETURN OF INCOME SH OWING LOSS OF RS. 29,59,46,143/- ON 29.09.2008. THE RETURN WAS REVISE D ON 31.3.2010 BY CLAIMING PRIOR PERIOD EXPENDITURE AMOUNTING TO RS. 51,81,578/- AND LOSS WAS DECLARED AT RS. 30,24,23,126/-. THE R EVISED RETURN WAS PROCESSED U/S. 143(1) OF THE I.T. ACT. THE CASE WA S SELECTED FOR SCRUTINY AND THE AO COMPLETED THE ASSESSMENT U/S. 1 43(3) OF THE I.T. ACT, BY MAKING A DISALLOWANCE OF RS. 5,35,65,500/- U/S. 14A OF THE I.T. ACT, 1961 AT A LOSS OF RS.24,36,76,000/- VIDE HIS ORDER DATED 28.12.2010. 4. AGAINST THE SAID ORDER OF THE LD. AO, ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 21.1. 2014 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5. AGGRIEVED WITH THE AFORESAID ORDER OF THE LD. CI T(A), REVENUE IS IN APPEAL BEFORE THE TRIBUNAL 6. LD. DR RELIED UPON THE ORDER OF THE AO AND REITE RATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL AND STA TED THAT THE LD. CIT(A) HAS WRONGLY DELETED THE ADDITIONS. 4 7. ON THE CONTRARY, LD. COUNSEL OF THE ASSESSEE RE LIED UPON THE ORDER OF THE LD. CIT(A). 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE ORDERS OF THE REV ENUE AUTHORITIES. WE FIND THAT LD. CIT(A) HAS ELABORATELY DISCUSSED THE ISSUE NO. 1 & 2 VIDE PARA NO. 7.1 TO 7.2 (WRONGLY MENTIONED AS PARA NO. 8.2) AND ISSUE NO. 3 VIDE PARA NO. 8(WRONGLY MENTIONED AS PARA NO. 9) OF THE IMPUGNED ORDER WHICH READS AS UNDER:- 7.1 THE FACTS OF THE CASE AND THE WRITTEN SUBMISS IONS OF THE APPELLANT HAVE BEEN CAREFULLY CONSIDERED. GROUN D NO. I, II, III & IV OF THE APPEAL ARE AGAINST THE ADDITION ON ACCOUNT OF DISALLOWANCE OF ~ 5,35,65,5001- MADE BY THE AO U /S 14A OF THE ACT AFTER APPLYING RULE 8D OF THE ACT. T HE APPELLANT HAD SUO-MOTO MADE DISALLOWANCE OF ~ 18,32 ,5001- U/S 14A OF THE ACT. THE DISALLOWANCE HAS BEEN MADE BY THE AO AFTER INVOKING RULE 8D(2)(II) AND 8D(2)(III) OF THE IT RULES, 1962 AND THE AO OBSERVED THAT THERE ARE NO DIRECT E XPENSES RELATING TO THE INVESTMENTS YIELDING EXEMPT DIVIDEN D INCOME. THE ISSUE OF DISALLOWANCE HAS BEEN SUBJECT MATTER O F DISPUTE IN APPELLANT'S CASE SINCE A Y 2006-07 ONWAR DS SO MUCH SO THAT THE MATTER REACHED UPTO THE LEVEL OF H ON'BLE HIGH COURT. AS THE RULE 8D WAS NOT OPERATIVE IN A Y 2006- 5 07 & 2007-08, THE HON'BLE HIGH COURT DIRECTED THE A O TO COMPUTE THE DISALLOWANCE KEEPING IN MIND THE DECISI ON OF JURISDICTIONAL COURT IN THE CASE OF M/S MAXOP INVES TMENT LTD. ITA NO. 687/2009. ACCORDINGLY, FOLLOWING THE DIRECT IONS OF THE COURT, THE AO HAS DISALLOWED THE PROPORTIONATE INTEREST PERTAINING TO THE INVESTMENTS IN A Y 2006-07 AND IN AY - 2007-08, THE AO IN ADDITION TO PROPORTIONATE INTERE ST FURTHER DISALLOWED AN ESTIMATED EXPENDITURE OF RS.3 LAC IN RESPECT OF ADMINISTRATIVE AND MANAGERIAL EXPENSES RELATING TO EARNING OF EXEMPT INCOME. IN THIS BACKDROP, THE APP ELLANT HAS VEHEMENTLY ARGUED THAT SINCE THE QUANTUM OF INVESTMENTS REMAINED UNCHANGED AT 7,86,9.10 LAC SIN CE A Y 2005-06 TO 2009-10, THE PROPORTIONATE INTEREST EXPE NSES HAVE AGAIN BEEN OFFERED AS DISALLOWANCE U/S 14A OF THE ACT, TREATING THE SAME AS DIRECT EXPENDITURE RELATI NG TO EARNING OF EXEMPT INCOME. THEREFORE, THE APPELLANT HAS DISALLOWED RS. 71,86,533/- (BEING AVERAGE INTEREST @ 8.39% ON RS.857.04 LACS) UNDER RULE 8D(2)(I) OF IT RULES. FURTHER, THE AO'S ACTION IN RESPECT OF A1LOWANCE UNDER RULE 8D(2)(III) AMOUNTING TO RS. 39,34,548/- HAS ALSO NOT BEEN DISP UTED BY THE APPELLANT IN ITS COMPUTATION BEING EXPENDITURE COMPONENT RELATING TO ADMINISTRATION AND MANAGERIAL EXPENDITURE ATTRIBUTABLE TO EARNING OF EXEMPT INCOM E. 6 HOWEVER, THE APPELLANT HAS OBJECTED THE DISALLOWANC E UNDER RULE 8D(2)(II) OF THE IT RULES, SINCE IT HAS ALREAD Y BEEN ACCEPTED BY THE AO THAT BEFORE 31ST MARCH, 2005, AN AMOUNT OF RS. 875.04 LAC HAS BEEN UTILIZED FOR INVE STMENT AND REMAINING LOAN WAS FOR BUSINESS PURPOSES. SINCE THEN NO NEW INVESTMENT IN SHARES HAS BEEN MADE BY THE APPELLANT AND VARIOUS LOANS OBTAINED BY THE APPELLA NT HAVE BEEN UTILIZED FOR SPECIFIC PURPOSE OF BUSINESS WORK ING CAPITAL REQUIREMENT. THE APPELLANT'S ARGUMENT HAVE FORCE AN D IT IS UNDISPUTED THAT THE AO HAD DETERMINED IN AY.2006-07 , THE LOAN AMOUNT OF 857.04 LAC UTILIZED FOR INVESTMENT I N SHARES OUT OF TOTAL BORROWINGS OF RS.4612.12 LAC AND SAME HAS BEEN FOLLOWED IN A Y 2007 -OS AS THE QUANTUM OF INV ESTMENT IN SHARES REMAINED UNCHANGED. THE FACTS BEING THE S AME DURING THE YEAR UNDER CONSIDERATION AND THE AMOUNT OF DISALLOWANCE HAS ALREADY BEEN DISALLOWED BY THE APP ELLANT UNDER RULE 8D(2)(I) OF IT RULES AS DIRECTLY ATTRIBU TABLE EXPENDITURE; THERE REMAINS NO JUSTIFICATION FOR MAK ING FURTHER DISALLOWANCE UNDER RULE SD(2)((II) OF IT RU LES. THUS, TOTAL DISALLOWANCE ULS 14A OF THE ACT COMES AT RS. 1,11,21,08L/-. 7 8.2. THUS, OUT OF TOTAL ADDITION ON ACCOUNT OF DISA LLOWANCE OF RS. 5,35,65,500/- MADE BY THE AO ULS 14A OF THE ACT , AN AMOUNT OF RS. 92,88,538/- (RS. 1,11,21,08L - 18,32, 543) ONLY IS SUSTAINED AND THE APPELLANT GETS THE CONSEQ UENTIAL RELIEF. GROUND NO. I, II, III & IV ARE PARTLY LOWED . 9. GROUND NO. V & VI OF THE APPEAL ARE AGAINST THE DISALLOWANCE OF RS. 51,8L ,578/- AS PRIOR PERIOD EX PENSES. THE APPELLANT HAD NOT MADE THIS CLAIM IN ITS ORIGIN AL RETURN. HOWEVER, A REVISED RETURN WAS FILED ON 31.03.2010 B Y CLAIMING PRIOR PERIOD EXPENSES AMOUNTING TO RS. 51, 8L,578/-. IN SUPPORT OF THESE EXPENSES, THE APPELLANT HAD FIL ED THE COPY OF INVOICE RAISED BY M/S FERTILIZERS & CHEMICA LS TRAVANCORE LTD. AMOUNTING TO RS. 12,32,814/- IN RES PECT OF RAW MATERIAL CONSUMPTION. THE AO DISALLOWED THE ENT IRE CLAIM AS THE ASSESSEE COULD NOT FILE ANY DOCUMENTAR Y EVIDENCE IN SUPPORT OF ITS CLAIM OF GODOWN RENT, RE PAIRS AND MAINTENANCE AND FREIGHT ON SALES. DURING THE AP PELLATE PROCEEDINGS, NO DOCUMENTARY EVIDENCES IN RESPECT OF ITEMS ENUMERATED BY THE AO HAD BEEN FILED BY THE APPELLAN T. HOWEVER, THE COPY OF INVOICE RAISED BY M/S FERTILIZ ERS & CHEMICALS TRAVANCORE LTD. (FACT LTD.) WHICH WAS ALS O PRODUCED BEFORE THE AO WAS AGAIN FURNISHED. THE PER USAL OF 8 THIS INVOICE SHOWS THAT THE APPELLANT COMPANY PURCH ASED THE RAW MATERIAL THROUGH THIS INVOICE WHICH IS DATE D 11.03.2007. THE SAME HAD BEEN REPORTEDLY SENT FRO M KOCHI (KERALA) TO CHENNAI FACTORY OF APPELLANT COMPANY. A S PER THE INVOICE,' THE SAID RAW MATERIAL WAS DELIVERED TO TH E APPELANT COMPANY ON 30.04.2007, AS CERTIFIED BY THE REPRESEN TATIVE OF THE AUTHORIZED CARRIER. THIS FACT HAS BEEN RECORDED AT PART II, S1. NO. 43/30/4/07, WHICH HAS BEEN REFLECTED ON THE FACE OF THE INVOICE ITSELF. THE AO HAS NOT GIVEN ANY REASON TO DISBELIEVE THE INVOICE AFTER ACKNOWLEDGING THE SAME . FROM THE DOCUMENTS, IT IS CLEAR THAT THE RAW MATERIAL WA S RECEIVED DURING THE CURRENT YEAR, EVEN IF IT WAS BOUGHT ON 28.03.2007. AS THE LIABILITY GOT CRYSTALLIZED DURIN G THE CURRENT YEAR, SUCH EXPENSES ARE VERY MUCH ALLOWABLE AS HELD BY VARIOUS COURTS, RELIED UPON BY THE APPELLAN T IN ITS SUBMISSIONS. REGARDING THE REMAINING EXPENSES OF PR IOR PERIOD VIZ. GODOWN RENT, REPAIR AND MAINTENANCE AND FREIGHT ON SALES, NO DOCUMENTARY EVIDENCES IN SUPPO RT OF THE CLAIM THAT THE LIABILITY GOT CRYSTALLIZED DURIN G THE CURRENT YEAR HAVE BEEN FILED BY THE APPELLANT AND THEREFORE , THE AO WAS JUSTIFIED IN DISALLOWING THE SAME. 9 IN THE RESULT, THE APPELLANT GETS A RELIEF OF RS.12 ,32,814/- OUT OF TOTAL ADDITION OF RS.51,81,578/-. THE GROUND S OF APPEAL ARE PARTLY ALLOWED. IN THE RESULT, THE APPEAL OF THE APPELLANT IS PARTL Y ALLOWED. 8.1 ON PERUSING THE ABOVE FINDING OF THE LD. CIT(A) , WITH REGARD TO GROUND NO. 1 & 2, WE NOTE THAT THIS ISSUE RELATES TO AGAINST THE ADDITION ON ACCOUNT OF DISALLOWANCE OF RS. 5,35,65, 500/- MADE BY THE AO U/S 14A OF THE ACT AFTER APPLYING RULE 8D OF THE ACT. THE ASSESSEE HAD SUO-MOTO MADE DISALLOWANCE OF RS.18,32,500/- U/ S.14A OF THE ACT. THE DISALLOWANCE HAS BEEN MADE BY THE AO AFTER INVOKING RULE 8D(2)(II) AND 8D(2)(III) OF THE IT RULES, 1962 AND THE AO OBSERVED THAT THERE ARE NO DIRECT EXPENSES RELATING TO THE INVEST MENTS YIELDING EXEMPT DIVIDEND INCOME. THE ISSUE OF DISALLOWANCE H AS BEEN SUBJECT MATTER OF DISPUTE IN APPELLANT'S CASE SINCE A Y 200 6-07 ONWARDS SO MUCH SO THAT THE MATTER REACHED UPTO THE LEVEL OF H ON'BLE HIGH COURT. AS THE RULE 8D WAS NOT OPERATIVE IN A Y 2006-07 & 2 007-08, THE HON'BLE HIGH COURT DIRECTED THE AO TO COMPUTE THE D ISALLOWANCE KEEPING IN MIND THE DECISION OF JURISDICTIONAL COUR T IN THE CASE OF M/S MAXOP INVESTMENT LTD. ITA NO. 687/2009. ACCORDINGLY , FOLLOWING THE DIRECTIONS OF THE COURT, THE AO HAS DISALLOWED THE PROPORTIONATE INTEREST PERTAINING TO THE INVESTMENTS IN A Y 2006- 07 AND IN AY - 2007-08, THE AO IN ADDITION TO PROPORTIONATE INTERE ST FURTHER 10 DISALLOWED AN ESTIMATED EXPENDITURE OF RS.3 LAC IN RESPECT OF ADMINISTRATIVE AND MANAGERIAL EXPENSES RELATING TO EARNING OF EXEMPT INCOME. IN THIS BACKDROP, THE ASSESSEE HAS VEHEMENT LY ARGUED THAT SINCE THE QUANTUM OF INVESTMENTS REMAINED UNCHANGED AT 7,86,9.10 LAC SINCE A Y 2005-06 TO 2009-10, THE PROPORTIONATE INTEREST EXPENSES HAVE AGAIN BEEN OFFERED AS DISALLOWANCE U/S 14A OF THE ACT, TREATING THE SAME AS DIRECT EXPENDITURE RELATING TO EARNING OF EXEMPT INCOME. THEREFORE, THE ASSESSEE HAS DISALLOWED RS. 71,86,53 3/- (BEING AVERAGE INTEREST @ 8.39% ON RS.857.04 LACS) UNDER RULE 8D(2 )(I) OF IT RULES. FURTHER, THE AO'S ACTION IN RESPECT OF A1LOWANCE UN DER RULE 8D(2)(III) AMOUNTING TO RS. 39,34,548/- HAS ALSO NOT BEEN DISP UTED BY THE ASSESSEE IN ITS COMPUTATION BEING EXPENDITURE COMPO NENT RELATING TO ADMINISTRATION AND MANAGERIAL EXPENDITURE ATTRIBUTA BLE TO EARNING OF EXEMPT INCOME. HOWEVER, THE ASSESSEE HAS OBJECTED T HE DISALLOWANCE UNDER RULE 8D(2)(II) OF THE IT RULES, SINCE IT HAS ALREADY BEEN ACCEPTED BY THE AO THAT BEFORE 31ST MARCH, 2005, AN AMOUNT O F RS. 875.04 LAC HAS BEEN UTILIZED FOR INVESTMENT AND REMAINING LOAN WAS FOR BUSINESS PURPOSES. SINCE THEN NO NEW INVESTMENT IN SHARES HA S BEEN MADE BY THE APPELLANT AND VARIOUS LOANS OBTAINED BY THE APP ELLANT HAVE BEEN UTILIZED FOR SPECIFIC PURPOSE OF BUSINESS WORKING C APITAL REQUIREMENT. WE NOTE THAT LD. CIT(A) HAS RIGHTLY OBSERVED THAT THE ASSESSEES ARGUMENT HAVE FORCE AND IT IS UNDISPUTED THAT THE A O HAD DETERMINED IN AY.2006-07, THE LOAN AMOUNT OF 857.04 LAC UTILIZ ED FOR INVESTMENT 11 IN SHARES OUT OF TOTAL BORROWINGS OF RS.4612.12 LAC AND SAME HAS BEEN FOLLOWED IN AY 2007-08 AS THE QUANTUM OF INVESTMENT IN SHARES REMAINED UNCHANGED. THE FACTS BEING THE SAME DURING THE YEAR UNDER CONSIDERATION AND THE AMOUNT OF DISALLOWANCE HAS AL READY BEEN DISALLOWED BY THE APPELLANT UNDER RULE 8D(2)(I) OF IT RULES AS DIRECTLY ATTRIBUTABLE EXPENDITURE; THERE REMAINS NO JUSTIFIC ATION FOR MAKING FURTHER DISALLOWANCE UNDER RULE 8D(2)((II) OF IT RU LES. THUS, TOTAL DISALLOWANCE ULS 14A OF THE ACT COMES AT RS. 1,11,2 1,08L/-. THUS, OUT OF TOTAL ADDITION ON ACCOUNT OF DISALLOWANCE OF RS. 5,35,65,500/- MADE BY THE AO ULS 14A OF THE ACT, AN AMOUNT OF RS. 92,8 8,538/- (RS. 1,11,21,08L - 18,32,543) ONLY WAS RIGHTLY SUSTAINE D AND THE ASSESSEE GETS THE CONSEQUENTIAL RELIEF, WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, HENCE, WE UPHOLD THE ORDER OF THE LD. CI T(A) ON THE ISSUE IN DISPUTE AND ACCORDINGLY, WE DISMISS THE GROUND NOS. 1 & 2 RAISED BY THE REVENUE. 8.2 WITH REGARD TO GROUND NO. 3, WE FIND THAT AS AG AINST THE DISALLOWANCE OF RS. 51,8L,578/- AS PRIOR PERIOD EXP ENSES. THE ASSESSEE HAD NOT MADE THIS CLAIM IN ITS ORIGINAL RETURN. HOW EVER, A REVISED RETURN WAS FILED ON 31.03.2010 BY CLAIMING PRIOR PE RIOD EXPENSES AMOUNTING TO RS. 51,8L,578/-. IN SUPPORT OF THESE E XPENSES, THE ASSESSEE HAD FILED THE COPY OF INVOICE RAISED BY M/ S FERTILIZERS & CHEMICALS TRAVANCORE LTD. AMOUNTING TO RS. 12,32,81 4/- IN RESPECT OF 12 RAW MATERIAL CONSUMPTION. THE AO DISALLOWED THE ENT IRE CLAIM AS THE ASSESSEE COULD NOT FILE ANY DOCUMENTARY EVIDENCE IN SUPPORT OF ITS CLAIM OF GODOWN RENT, REPAIRS AND MAINTENANCE AND F REIGHT ON SALES. DURING THE APPELLATE PROCEEDINGS, NO DOCUMENTARY EV IDENCES IN RESPECT OF ITEMS ENUMERATED BY THE AO HAD BEEN FILE D BY THE ASSESSEE. WE NOTE THAT HOWEVER, THE COPY OF INVOICE RAISED B Y M/S FERTILIZERS & CHEMICALS TRAVANCORE LTD. (FACT LTD.) WHICH WAS ALS O PRODUCED BEFORE THE AO WAS AGAIN FURNISHED. THE PERUSAL OF T HIS INVOICE SHOWS THAT THE APPELLANT COMPANY PURCHASED THE RAW MATERI AL THROUGH THIS INVOICE WHICH IS DATED 11.03.2007. THE SAME HAD B EEN REPORTEDLY SENT FROM KOCHI (KERALA) TO CHENNAI FACTORY OF APPE LLANT COMPANY. AS PER THE INVOICE, THE SAID RAW MATERIAL WAS DELIVERE D TO THE ASSESSEE COMPANY ON 30.04.2007, AS CERTIFIED BY THE REPRESEN TATIVE OF THE AUTHORIZED CARRIER. THIS FACT HAS BEEN RECORDED AT PART II, S1. NO. 43/30/4/07, WHICH HAS BEEN REFLECTED ON THE FACE OF THE INVOICE ITSELF. THE AO HAS NOT GIVEN ANY REASON TO DISBELIEVE THE I NVOICE AFTER ACKNOWLEDGING THE SAME. FROM THE DOCUMENTS, IT IS C LEAR THAT THE RAW MATERIAL WAS RECEIVED DURING THE CURRENT YEAR, EVEN IF IT WAS BOUGHT ON 28.03.2007. AS THE LIABILITY GOT CRYSTALLIZED DURIN G THE CURRENT YEAR, SUCH EXPENSES ARE VERY MUCH ALLOWABLE AS HELD BY VA RIOUS COURTS, RELIED UPON BY THE ASSESSEE IN ITS SUBMISSIONS. REG ARDING THE REMAINING EXPENSES OF PRIOR PERIOD VIZ. GODOWN RENT , REPAIR AND MAINTENANCE AND FREIGHT ON SALES, NO DOCUMENTARY EV IDENCES IN 13 SUPPORT OF THE CLAIM THAT THE LIABILITY GOT CRYSTAL LIZED DURING THE CURRENT YEAR HAVE BEEN FILED BY THE ASSESSEE AND TH EREFORE, THE AO WAS JUSTIFIED IN DISALLOWING THE SAME. THEREFORE, THE ASSESSEE GETS A RELIEF OF RS.12,32,814/- OUT OF TOTAL ADDITION OF RS.51,81 ,578/-, WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, THEREFORE, W E UPHOLD THE ORDER OF THE LD. CIT(A) ON THE ISSUE IN DISPUTE AND ACCOR DINGLY, WE DISMISS THE GROUND NO. 3 RAISED BY THE REVENUE. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/03/2017. SD/- SD/- [L.P. SAHU] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICI AL MEMBER DATE 27/3/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES