KHETAN TILES PRIVATE LIMITED, Jaipur V. ACIT, Jaipur

ITA 353/JPR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2128 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 04-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Keywords: Earning of tax free income; Tax effect; Revised return
• Section: 40A(3); 92E; 80HHC; 14A; 115JB; 80IB; 12A; 10B; 12; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA- @ ITA NO. 353/JP/2017 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2013-14 KHETAN TILES PVT. LTD., C/O KALANI & CO. 5 TH FLOOR, THE MILE STONE, GANDHI NAGAR TURN, TONK ROAD, JAIPUR CUKE VS. ACIT CIRCLE-4 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCK0431H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA- @ ITA NO. 505/JP/2017 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2013-14 DCIT CIRCLE-4 JAIPUR CUKE VS. KHETAN TILES PVT. LTD., C/O KALANI & CO. 5 TH FLOOR, THE MILE STONE, GANDHI NAGAR TURN, TONK ROAD, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCK0431H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL JKTLO DH VKSJ LS @ REVENUE BY : SHRI R.A. VERMA LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 03/08/2017 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 09/08/2017 VKNS'K@ ORDER ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 2 PER: VIKRAM SINGH YADAV, A.M. THESE ARE TWO CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE AGAINST THE ORDER OF LD. CIT (A)-2, JAIPUR DATED 27.03.2017 FOR A.Y. 2013-14 WHEREIN THE RESPECTIVE GROUNDS OF THE APPEAL ARE AS UNDER:- ITA NO. 353/JP/17 (GROUND OF ASSESSEES APPEAL):- 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED ON FACTS AND IN LAW IN UPHOLDING THE ACTION OF AO I N DISALLOWING THE CLAIM OF DEDUCTION U/S 80IA(1) OF RS. 13,04,887 /- BY HOLDING THAT ASSESSEE HAS NEITHER COMPLIED WITH THE MANDATO RY REQUIREMENT OF E-FILING THE TAX AUDIT REPORT FOR CL AIMING THE DEDUCTION NOR FILED THE AUDIT REPORT MANUALLY BEFOR E THE DUE DATE. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS. 2,97,115/- U/S 40A(3) OF IT ACT, 1961. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS. 13,414/- U/S 14A READ WITH RULE 8D. ITA NO. 505/JP/17 (GROUND OF REVENUES APPEAL):- (I). WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DIRECTING TO T REAT 25% OF STOCK AS DEFECTIVE AS AGAINST THE FINDINGS OF THE AO THAT NO STOCK WAS FOUND DEFECTIVE ON THE BASIS OF SALE BILLS DENOTING SIMILAR VALUE. 2. FIRSTLY, REGARDING GROUND NO. 1 OF THE ASSESSEE, BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CLAIMED DEDUCTION U/S 80 IA OF RS. 13,04,887/- ON THE INCOME FROM TWO WIND MILL TURBIN ES. THE ASSESSEE FILED E-RETURN OF INCOME FOR THE YEAR UNDER CONSIDE RATION ON 30.09.2013. ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 3 THIS RETURN WAS FILED WITHOUT ATTACHING THE AUDIT R EPORT IN FORM 10CCB. ANY DOCUMENT. AS PER THE ASSESSEE, THE AMENDMENT T O RULE 12(2) WHICH PROVIDES FOR FURNISHING THE AUDIT REPORT ELEC TRONICALLY IS APPLICABLE FROM AY 2014-15. THE AO HOWEVER OBSERVED THAT AMEN DMENT TO RULE 12(2) WAS MADE BY IT(SEVENTH AMENDMENT) RULE, 2013 DT. 11.06.2013. IT PROVIDES THAT THE AUDIT REPORT REQUIRED U/S 80IA IS ALSO TO BE FURNISHED ELECTRONICALLY. THE PROVISO WAS MADE APPL ICABLE W.R.E.F. 01.04.2013 AND IS THUS APPLICABLE FOR SUBJECT ASSES SMENT YEAR 2013-14, AND E-FILING OF AUDIT REPORT U/S 44AB AND SECTION 8 0IA IN FORM 10CCB HAVE BECOME MANDATORY TO BE FILE ON OR BEFORE THE D UE DATE OF FILING OF THE RETURN. THE CBDT HAS ISSUED ORDER U/S 119(2)(A) ON 26/09/2013 AND EXTENDED THE DATE OF FILING OF AUDIT REPORT TO 31.10.2013 SUBJECT TO THE CONDITION THAT THE ASSESSEE SHOULD FILE THE AUD IT REPORT ALONG WITH COPY OF RETURN IN PAPER FORM BEFORE THE AO BEFORE 3 0.09.2013 AND THEREAFTER MANDATORY E-FILE THE AUDIT REPORT BEFORE 31.10.2013. HOWEVER, THE ASSESSEE HAS NOT FILED FORM 10CCB IN P APER FORM BEFORE 30.09.2013 BEFORE THE AO. EVEN FORM 10CCB WAS NOT E -FILED TILL DATE ALTHOUGH IT WAS MANDATORY TO FILE UPTO 31.10.2013. HE THEREFORE, DISALLOWED THE CLAIM OF DEDUCTION U/S 80-IA. 3. THE LD. CIT(A) UPHELD THE ORDER OF THE AO. THE RELEVANT FINDING OF THE CIT(A) IS REPRODUCED WHICH IS AS UNDER: THE ASSESSING OFFICER NOTED THAT THE AUDIT REPORT HAS NOT BEEN FILED ELECTRONICALLY WITHIN THE DUE DATE AND THE RE PORT IS ALSO FILED MANUALLY DURING THE ASSESSMENT PROCEEDINGS. IT IS S EEN THAT THE AMENDMENT TO RULE 12(2) RELATING TO E-FILING OF AUD IT REPORT IN ORDER TO CLAIM DEDUCTION UNDER SECTION 80IA WAS INT RODUCED BY ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 4 INCOME TAX (SEVENTH AMENDMENT) RULES 2013 W.E.F. 01 .04.2013 AND WAS APPLICABLE FROM ASSESSMENT YEAR 2013-14. TH E REPORT WAS ALSO NOT FILED IN THE EXTENDED DATE FOR THE SAM E UNDER SECTION 119(2)(A) TO 31.10.2013. THUS, THE ASSESSEE HAS NOT COMPLIED WITH THE MANDATORY REQUIREMENT OF E-FILING OF THE TAX AUDIT REPORT FOR CLAIMING THE DEDUCTION. THE AUTHOR IZED REPRESENTATIVE PLACED RELIANCE ON RAJ KUMAR BAFNA V S. ITO (2016) 48 CCH 244 (JAIPUR TRIBUNAL). THIS CASE RELA TES TO PENALTY UNDER SECTION 271B AND THE ASSESSEE WAS ILLITERATE AND DEPENDENT ON PROFESSIONALS WHICH WAS A FINDING OF THE APPELLA TE AUTHORITY. IN THE CASE OF HARISBHAI BABUBHAI VS. ITO IN ITA NO. 6 46/AHD/2016 (AHD. TRIB.) ALSO THE AUDIT REPORT UNDER SECTION 44 AB WAS FILED MANUALLY WITHIN THE DUE DATE. IN THE PRESENT CASE N EITHER THE REPORTS WERE E-FILED NOR MANUALLY FILED BEFORE THE DUE DATE. FURTHER, NO VALID REASONS FOR NOT E-FILING THE REPO RT HAVE BEEN FORWARDED. THERE IS A CLEAR VIOLATION OF THE PROVIS IONS OF THE ACT. IN VIEW OF THE SAME, DEDUCTION UNDER SECTION 80IA C ANNOT BE ALLOWED. THE GROUND OF APPEAL IS DISMISSED. 4. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT FROM THE FACTS STATED ABOVE, THE MOOT QUESTION WHICH ARISES IN THE PRESENT CASE IS WHETHER NON FILING OF AUDIT REPORT IN FORM 10CCB BEFORE THE DUE DATE OF FILING OF RETURN IS SO FATAL AS TO DISALLOW THE CLAIM OF DEDUCTION U/S 80IA. THE LD AR TOOK US THROUGH THE AMENDMENT TO THE RULE S AND IT WAS SUBMITTED THAT BY IT(THIRD AMENDMENT) RULE, 2013 DT . 01.05.2013, A ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 5 PROVISO WAS INSERTED TO RULE 12(2) TO PROVIDE THAT WHERE AN ASSESSEE IS REQUIRED TO FURNISH A REPORT OF AUDIT U/S 44AB, 92E OR 115JB OF THE ACT, THE SAME SHALL BE FURNISHED ELECTRONICALLY. THE PRO VISO WAS SUBSTITUTED BY IT(SEVENTH AMENDMENT) RULE, 2013 DT. 11.06.2013 TO PROVIDE THAT THE AUDIT REPORT REQUIRED U/S 80IA IS ALSO TO BE FU RNISHED ELECTRONICALLY. IT WAS SUBMITTED THAT THE PROVISO WAS MADE APPLICAB LE W.R.E.F. 01.04.2013 AND IS THUS APPLICABLE FOR THE SUBJECT A SSESSMENT YEAR. IT WAS FURTHER SUBMITTED THAT THERE IS NO DISPUTE A S TO THE FACT THAT ASSESSEE HAS FILED THE AUDIT REPORT MANUALLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THAT IT IS ELIGIBLE TO C LAIM DEDUCTION U/S 80IA. THE ONLY DEFAULT ON PART OF ASSESSEE IS THAT IT HAS NOT FILED THE AUDIT REPORT IN FORM 10CCB EITHER MANUALLY OR ELECT RONICALLY ON OR BEFORE THE DUE DATE OF FILING OF RETURN. THIS DEFAU LT HAS ARISEN BECAUSE INITIALLY BY THE IT (THIRD AMENDMENT) RULE, 2013 DT . 01.05.2013, ASSESSEE WAS REQUIRED TO FILE ONLY THE TAX AUDIT RE PORT U/S 44AB ELECTRONICALLY. THIS WAS FILED BY THE ASSESSEE WHIL E E-FILING THE RETURN ON 30.09.2013. THEREAFTER, BY IT (SEVENTH AMENDMENT) R ULE, 2013 DT. 11.06.2013, THE AUDIT REPORT U/S 80IA WAS ALSO REQU IRED TO BE FILED ELECTRONICALLY WITH THE RETURN. THIS AMENDMENT MISS ED THE ATTENTION OF THE ASSESSEE AND THEREFORE, AUDIT REPORT IN FORM 10 CCB COULD NOT BE FILED ON OR BEFORE THE DUE DATE OF FILING OF THE RE TURN OR BY THE EXTENDED DATE OF 31.10.2013. THESE AMENDMENTS HAVING BEEN IN TRODUCED FOR THE FIRST TIME IN THE RELEVANT AY, THERE IS A REASONABL E CAUSE FOR NOT E-FILING THE AUDIT REPORT IN FORM 10CCB ELECTRONICALLY. 4.1 IT WAS FURTHER SUBMITTED THAT IT HAS BEEN HELD IN VARIOUS CASES THAT OBTAINING THE AUDIT REPORT TO CLAIM EXEMPTION/ DEDUCTION WHEREVER ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 6 REQUIRED BY A SECTION IS A MANDATORY REQUIREMENT BU T FILING OF THE SAME IS A PROCEDURAL REQUIREMENT AND THEREFORE, EVEN WHE N SUCH REPORT IS FILED IN BEFORE THE COMPLETION OF ASSESSMENT, THE R EQUIREMENT OF THE SECTION AS TO THE FILING OF THE REPORT SHOULD BE TA KEN AS COMPLIED WITH. FOR THIS PROPOSITION, RELIANCE IS PLACED ON THE FOL LOWING CASES:- CIT VS. G.M. KNITTING INDUSTRIES PVT. LTD. & ANR. ( 2015) 125 DTR 38 (SC) IT WAS HELD THAT ASSESSEE IS ENTITLED TO DEDUCTION U/S 80IB EVEN THOUGH IT HAS NOT FILED THE AUDIT REPORT IN FORM 10CCB ALO NG WITH THE RETURN BUT HAS FILED THE SAME BEFORE THE COMPLETION OF ASSESSM ENT. CIT VS. FORTUNA FOUNDATION ENGINEERS & CONSULTANTS PVT. LTD. (2017) 152 DTR 236 (ALL.)(HC) FILING OF AUDIT REPORT ALONG WITH RETURN IS NOT MAN DATORY AND ONLY DIRECTORY AND ASSESSEE CANNOT BE MADE TO SUFFER IF IT FILED AUDIT REPORT IN FORM 10CCB IN THE COURSE OF ASSESSMENT PROCEEDIN GS AND NOT ALONG WITH RETURN. CIT VS. GODHA CHEMICALS (P.) LTD. 83 DTR 190 (RAJ.) THE EXPRESSION ALONG WITH RETURN OF INCOME AS OCC URRING IN SUB-SECTION (4) OF SECTION 80HHC IS DIRECTORY IN NATURE IN SO FAR AS IT RELATES TO THE TIME FOR FURNISHING OF THE REPORT OF AN ACCOUNTANT BY THE ASSESSEE IN THE PRESCRIBED FORM & EVEN IF SUCH A REPORT IN THE PRES CRIBED FORM IS NOT FURNISHED ALONG WITH THE ROI BUT IS FURNISHED DURIN G THE COURSE OF ASSESSMENT PROCEEDING, IT CANNOT BE REMOVED OUT OF CONSIDERATION ONLY FOR THE REASONS OF THE SAME HAVING NOT BEEN FILED A T THE INITIAL STAGE OF ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 7 FILING THE RETURN. THEREFORE, ASSESSEE COULD NOT B E DENIED THE BENEFIT OF DEDUCTION U/S 80HHC BECAUSE THE AUDIT REPORT IN FOR M NO. 10CCAC HAD BEEN FILED DURING THE COURSE OF ASSESSMENT PROCEEDI NGS. CIT VS. RAI BAHADUR BISSESSWARLAL MOTILAL MALWASIE TRUST 195 ITR 825 (CAL.) THE ASSESSEE HAS BEEN DENIED THE BENEFIT OF EXEMPTI ON U/S 11 AS THE AUDIT REPORT IN FORM NO. 10B WAS NOT FILED ALONG WI TH THE RETURN OF INCOME AND THE FILING OF SAID REPORT LATER DID NOT SATISFY THE CONDITION STATED IN SECTION 12A. THE DENIAL OF EXEMPTION IS S UPPORTED ON THE GROUND THAT THE PROVISIONS OF SECTION 12A ARE MANDA TORY. THERE IS NO DOUBT THAT SEC. 12A SPECIFICALLY STATES THAT THE PR OVISIONS OF SEC 11 & 12 SHALL NOT APPLY IN RELATION TO INCOME OF ANY TRUST IF CONDITIONS STATED THEREIN ARE NOT FULFILLED AND IN THE CONDITIONS, IT IS PROVIDED THAT THE ACCOUNTS OF THE TRUST SHOULD BE AUDITED AND THE REP ORT OF THE AUDITOR IN FORM 10B SHOULD BE FURNISHED ALONG WITH THE RETURN. IF SEC. 12A IS READ IN ISOLATION AND THE RULE OF STRICT AND LITERAL CON STRUCTION IS APPLIED, THE APPROACH OF THE REVENUE IN THIS CASE HAS TO BE HELD AS CORRECT. BUT THERE IS NO JUSTIFICATION FOR APPLYING THE RULE OF STRICT CONSTRUCTION OR FOR CONSIDERING THE PROVISIONS OF SECTION 12A IS ISOLAT ION. HAVING REGARD TO THE OTHER PROVISIONS OF THE ACT RE GARDING FILING OF THE RETURN OR REVISED RETURN OR RECTIFYING THE DEFECTS IN THE RETURN, THE PROVISIONS OF SECTION 12A ARE DIRECTORY IN THE SENS E THAT THE AO IS NOT POWERLESS TO ALLOW AN ASSESSEE TO FILE THE AUDIT RE PORT, IF NOT FILED ALONG WITH THE RETURN, ANY TIME BEFORE THE COMPLETION OF THE ASSESSMENT. ONE HAS TO LOOK AT THE PURPOSE OF THE PROVISIONS. ONE H AS TO CONSTRUE THE PROVISION TO ENSURE COHERENCE AND CONSISTENCY TO AV OID UNDESIRABLE ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 8 CONSEQUENCES. WHERE THE AUDIT REPORT WAS MADE READY AFTER THE RETURN WAS FILED, THERE WAS NO REASON WHY SUCH AUDIT REPOR T SHOULD NOT BE ALLOWED TO BE FILED BEFORE THE COMPLETION OF THE AS SESSMENT. NO CASE HAS BEEN MADE OUT THAT THE DELAY IN GETTING THE ACC OUNTS AUDITED AND IN FILING OF THE REPORT IN FORM NO. 10B DEFEATED AN Y OBJECT OF THE ACT, OR THE ASSESSEES ACTION WAS IN SUBSTANCE NOT IN CONFO RMITY WITH THE INTENT AND PURPOSE OF THE ACT. THE IT AUTHORITIES FELL INT O ERROR IN DENYING THE CLAIM OF EXEMPTION U/S 11. IN VIEW OF ABOVE, THE AO BE DIRECTED TO ALLOW CLAIM OF DEDUCTION U/S 80IA TO THE ASSESSEE. 5. THE LD. D/R SUPPORTED THE ORDER OF THE LOWER AUT HORITIES AND SUBMITTED THAT E-FILING OF AUDIT REPORT WITHIN THE PRESCRIBED TIME LIMIT IS MANDATORY IN NATURE AND THE AO HAS RIGHTLY DENIED THE DEDUCTION ON ACCOUNT OF FAILURE OF THE ASSESSEE TO COMPLY WITH T HE SAID REQUIREMENTS. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PURSUED THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE WAS ENTITLED TO DEDUCTION UNDER SECTION 80IA OF THE ACT. THE PR OVISIONS OF SECTION 80IA(8) UNDER CONSIDERATION READS AS UNDER: (8) WHERE THE ASSESSEE IS A PERSON OTHER THAN A CO MPANY OR A CO- OPERATIVE SOCIETY, THE DEDUCTION UNDER SUB-SECTION (1) FROM PROFITS AND GAINS DERIVED FROM AN INDUSTRIAL UNDERTAKING SHALL NOT BE ADMISSIBLE UNLESS THE ACCOUNTS OF THE INDUSTRIAL UNDERTAKING F OR THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR FOR WHICH THE DEDUC TION IS CLAIMED HAVE BEEN AUDITED BY AN ACCOUNTANT, AS DEFINED IN THE EX PLANATION BELOW SUB-SECTION (2) OF SECTION 288 , AND THE ASSESSEE FURNISHES, ALONG WITH ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 9 HIS RETURN OF INCOME, THE REPORT OF SUCH AUDIT IN T HE PRESCRIBED FORM DULY SIGNED AND VERIFIED BY SUCH ACCOUNTANT. 7. ADMITTEDLY, IN SUPPORT OF CLAIM OF DEDUCTION UND ER SECTION 80IA, THE AUDIT REPORT IN PRESCRIBED FORM 10CCB HAS BEEN FILE D BY THE ASSESSEE COMPANY DURING THE COURSE OF ASSESSMENT PROCEEDINGS . THE HONBLE SUPREME COURT IN CIT V. G.M. KNITTING INDUSTRIES (P ) LTD. (SUPRA) DISMISSED THE APPEAL OF REVENUE AND CONFIRMED THE V IEW TAKEN BY MADRAS HIGH COURT IN CASE OF CIT V. AKS ALLOYS (P.) LTD. [2012] 18 TAXMANN.COM 25 (MAD.) HOLDING THAT EVEN THOUGH NEC ESSARY CERTIFICATE IN FORM 10CCB ALONG WITH RETURN OF INCOME HAD NOT B EEN FILED BUT SAME WAS FILED BEFORE FINAL ORDER OF THE ASSESSMENT WAS MADE, THE ASSESSEE WAS ENTITLED TO CLAIM DEDUCTION UNDER SECTION 80-IB . IN LIGHT OF THE ABOVE, WE AGREE WITH THE CONTENTION OF THE LD AR TH AT WHILE FILING OF THE AUDIT REPORT IS MANDATORY, THE FURTHER CONDITION TH AT IT SHOULD BE FILED WITH THE RETURN OF INCOME IS DIRECTORY IN NATURE AN D SO LONG AS THE AUDIT REPORT HAS BEEN FILED DURING THE COURSE OF ASSESSME NT PROCEEDINGS, SUBSTANTIAL COMPLIANCE HAS BEEN MADE. IN THE RESUL T, GROUND NO. 1 OF THE ASSESSEES APPEAL IS ALLOWED. 8. REGARDING GROUND NO. 2 OF THE ASSESSEES APPEAL, BRIEF FACTS OF THE CASE ARE THAT THE AO OBSERVED THAT THE ASSESSEE HAS MADE THE FOLLOWING CASH PAYMENTS IN VIOLATION OF PROVISIONS OF SECTION 40A(3) OF INCOME TAX ACT, 1961:- DATE AMOUNT PAID TO 30-07-2012 50,000/- ARIHANT ROADLINES ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 10 22-10-2012 36,000/- DELHI HARIYANA ROADLINES 16-11-2012 37,500/- DINESH GOODS TRANSPORT COMPANY 26-11-2012 36,595/- DINESH GOODS TRANSPORT COMPANY 30-11-2012 40,000/- ARIHANT ROADLINES 10-08-2012 97,020/- FOR MARBLE BLOCK PURCHASE TOTAL 2,97,115/- 8.1 IN ASSESSMENT PROCEEDING, ASSESSEE FILED ITS SU BMISSION JUSTIFYING THE CASH PAYMENT AND ALSO THAT HOW SECTION 40A (3) IS NOT APPLICABLE TO SUCH PAYMENT IN AS MUCH AS THE PAYMENT MADE TO THE INDIVIDUAL DRIVERS DOES NOT EXCEED THE LIMIT SPECIFIED U/S 40A(3). THE AO, HOWEVER, HELD THAT SUBMISSION OF ASSESSEE DOES NOT EXPLAIN AS TO HOW SECTION 40A(3) IS NOT APPLICABLE. ACCORDINGLY, HE MADE DISALLOWANC E OF RS. 2,97,115/-. 9. THE LD. CIT(A) CONFIRMED THE DISALLOWANCE. THE RELEVANT FINDING OF THE CIT(A) IS REPRODUCED AS UNDER: 4.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASS ESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE BOOKS OF ACCO UNTS CLEARLY REFLECTED THAT CASH AMOUNTS EXCEEDING THE LIMIT PRE SCRIBED UNDER SECTION 40A(3) HAD BEEN MADE AND THE SAME WERE NOT COVERED IN THE EXCEPTIONS ENUMERATED IN RULE-6DD. THE AUTHORIZED R EPRESENTATIVE SUBMISSIONS THAT THESE WERE ADVANCES WHICH WERE LAT ER ADJUSTED AGAINST PAYMENTS IS NOT SUPPORTED BY ANY EVIDENCE W HATSOEVER. IN VIEW OF THE SAME THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS CONFIRMED. THE GROUND OF APPEAL IS DISMISSED. ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 11 10. DURING THE COURSE OF HEARING, THE LD. AR SUBMIT TED THAT THE ASSESSEE IS EXPORTING THE MARBLE AND FOR THIS PURPO SE IT HIRED THE TRAILERS FROM VARIOUS TRANSPORT AGENCIES FOR TRANSP ORTATION OF GOODS AT THE MUNDRA PORT. FROM THE SAME TRANSPORT AGENCY ON THE SAME DAY, MORE THAN ONE TRAILER IS HIRED. AS PER THE GENERAL MARKET PRACTICE, ASSESSEE GIVE ADVANCE TO THE INDIVIDUAL TRAILOR DRI VER AND THE ADVANCE SO GIVEN IS LESS THAN THE LIMIT OF RS. 35,000/- PRE SCRIBED U/S 40A(3). THUS, THE INDIVIDUAL PAYMENT TO TRAILOR DRIVER HAS NOT EXCEEDED THE LIMIT OF RS. 35,000/- U/S 40A(3) BUT THE LOWER AUTHORITIE S HAVE ADDED THE PAYMENT MADE TO ALL THE TRAILOR DRIVERS OF SUCH TRA NSPORT AGENCY ON THAT DATE. SECTION 40A(3) IS ATTRACTED WHEN PAYMENT MADE TO A PERSON IN A DAY EXCEEDS THE PRESCRIBED LIMIT. IN THE PRESENT CA SE, PAYMENT MADE TO A PERSON, I.E. TO THE INDIVIDUAL DRIVER DO NOT EXCE ED THE PRESCRIBED LIMIT AND THEREFORE, PROVISIONS OF SECTION 40A(3) IS NOT VIOLATED. THE LD. CIT(A) HAS OBSERVED THAT ASSESSEE HAS NOT FILED EVI DENCE IN THIS REGARD WHEREAS SUCH EVIDENCE WERE AVAILABLE WITH THE AO IN THE BOOKS OF ACCOUNTS PRODUCED AND EXAMINED BY HIM ON TEST CHECK BASIS. COPY OF LEDGER ACCOUNT OF M/S ARIHANT ROADLINES ALONG WITH THE COPY OF GR IS PRODUCED FOR READY REFERENCE. IN THIS CONNECTION, R ELIANCE IS PLACED ON THE DECISION IN CASE OF ITO VS. DHANSHREE ISPAT (20 17) 50 CCH 86 (PUNE) (TRIB.). 10.1 IT WAS FURTHER SUBMITTED THAT THE PROVISION CONTAIN ED IN SECTION 40A(3) AND RULE 6DD ARE INTENDED TO REGULATE BUSINE SS TRANSACTIONS AND TO PREVENT THE USE OF UNACCOUNTED MONEY OR TO R EDUCE THE CHANCES TO USE BLACK MONEY FOR BUSINESS TRANSACTIONS. WHILE MAKING ADDITION OF ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 12 RS. 2,97,115/-, LOWER AUTHORITIES HAVE NOT OBJECTED TO THE GENUINENESS OF THE PAYMENTS MADE TO THE TRANSPORTERS. WHERE THE PERSON TO WHOM PAYMENT IS MADE IS GENUINE AND CASH IS PAID IN BUSI NESS EXPEDIENCY, THE SAME CANNOT BE DISALLOWED U/S 40A(3). RELIANCE IN THIS CONNECTION IS PLACED ON THE FOLLOWING CASES:- - BROTHERS PHARMA (P.) LTD. ITO (2016) 45 ITR(TRIB.) 0154 (JPR.): - ANUPAM TELE SERVICES VS. INCOME TAX OFFICER (2014) 366 ITR 122 (GUJ)(HC) - SRI LAXMI SATYANARAYANA OIL MILLS VS. COMMISSIONER OF INCOME TAX (2014) 367 ITR 0200 (AP) 11. THE LD. D/R SUPPORTED THE ORDER OF THE AUTHORIT IES BELOW. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PURSUED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE VARIOUS JUDICIAL PRECEDENTS CITED AND BROUGHT TO OUR NOTICE BY THE LD AR. THE LD. CIT(A) CONFIRMED THE DISALLOWANCE BY HOLDING THAT THE BOOKS OF ACCOUNTS CLEARLY REFLECTED THAT CASH AMOUNTS EXCEEDING THE LIMIT PRESCRIBED U/S 40A (3) HAD BEEN MADE AND THE SAME WERE NOT COVERED IN THE EXCEPTION S ENUMERATED IN RULE 6DD. THE HONBLE SUPREME COURT IN CASE OF ATTAR SINGH GURMUKH SINGH REPORTED IN 191 ITR 667 HAS HELD THAT SECTION 40A(3) MUST NOT BE READ IN ISOLATION OR TO THE EXCL USION OF RULE 6DD. THE SECTION MUST BE READ ALONG WITH RULE. IT WAS F URTHER HELD BY THE HONBLE SUPREME COURT THAT IT IS OPEN TO THE ASSES SEE TO FURNISH TO THE SATISFACTION OF THE AO THE CIRCUMSTANCES UNDER WHIC H THE PAYMENT IN THE MANNER PRESCRIBED IN SECTION 40A(3) WAS NOT PRA CTICABLE OR WOULD ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 13 HAVE CAUSED GENUINE DIFFICULTY TO THE PAYEE. IN TH E INSTANT CASE, THE ASSESSEE COMPANY HAS HIRED TRAILERS FROM WELL-ESTAB LISHED TRANSPORT AGENCIES SUCH AS ARIHANT ROADLINES, DELHI HARYANA R OADLINES, DINESH GOOD TRANSPORT COMPANY. THE LD AR HAS SUBMITTED TH AT IT HIRED THE TRAILERS FROM VARIOUS TRANSPORT AGENCIES FOR TRANSP ORTATION OF GOODS AT THE MUNDRA PORT AND FROM THE SAME TRANSPORT AGENCY ON THE SAME DAY, MORE THAN ONE TRAILER IS HIRED. IT WAS FURTHER SUBM ITTED THAT AS PER THE GENERAL MARKET PRACTICE, ASSESSEE GIVE ADVANCE TO T HE INDIVIDUAL TRAILOR DRIVER AND THE ADVANCE SO GIVEN IS LESS THAN THE LI MIT OF RS. 35,000/- PRESCRIBED U/S 40A(3). SO, THE QUESTION IS WHETHER GENERAL MARKET PRACTICE IS GOOD ENOUGH TO SATISFY THE TEST OF GENU INE OR PRACTICAL DIFFICULTY FOR THE PAYEE NOT TO ACCEPT CHEQUE PAYME NT. IN OUR VIEW, MORE THAN THE MARKET PRACTICE, IT IS THE COMPELLING CIRCUMSTANCES IN THE GIVEN FACTS AND SITUATIONS WHICH SHOULD DETERMINE T HE ALLOWABILITY OF CASH PAYMENTS. THERE IS NOTHING ON RECORD TO SUGGE ST ANY COMPELLING CIRCUMSTANCES WHEREBY THE CASH PAYMENTS WERE MADE T O TRUCK DRIVERS INSTEAD OF TRANSPORT AGENCIES OR SUCH CASH PAYMENTS WERE REQUESTED FOR BY SUCH TRANSPORT AGENCIES TO BE PAID TO THEIR TRUC K DRIVERS IN ANY COMPELLING CIRCUMSTANCES. 13. NOW, COMING TO ANOTHER CONTENTION OF THE LD AR THAT THE TERM PAYMENT TO A PERSON REFERRED TO IN SECTION 40A(3) SHOULD BE READ IN THE INSTANT CASE TO PAYMENT TO INDIVIDUAL TRUCK DR IVERS AND SHOULD NOT BE READ AS PAYMENT TO INDIVIDUAL TRANSPORT AGENCY . IN THIS REGARD, WE REFER TO THE PROVISIONS OF SECTION 40A(3) WHICH PRO VIDES THAT WHERE THE ASSESSEE INCURS ANY EXPENDITURE IN RESPECT OF W HICH A PAYMENT OR AGGREGATE OF PAYMENTS MADE TO A PERSON IN A DAY, OT HERWISE THAN BY ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 14 AN ACCOUNT PAYEE CHEQUE DRAWN ON A BANK OR ACCOUNT PAYEE BANK DRAFT, EXCEEDS TWENTY THOUSAND RUPEES, NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF SUCH EXPENDITURE. THE PROVISO FURTHE R PROVIDES THAT PROVIDED FURTHER THAT IN THE CASE OF PAYMENT MADE FOR PLYING, HIRING OR LEASING GOODS CARRIAGES, THE PROVISIONS OF SUB-SECT IONS (3) AND (3A) SHALL HAVE EFFECT AS IF FOR THE WORDS 'TWENTY THOUS AND RUPEES', THE WORDS 'THIRTY-FIVE THOUSAND RUPEES' HAD BEEN SUBSTI TUTED. IT TALKS ABOUT INCURRENCE OF EXPENDITURE AND PAYMENT MADE TO WARDS SUCH AN EXPENDITURE FOR PLYING, HIRING OR LEASING GOODS CAR RIAGES OTHERWISE THAN THROUGH AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BA NK DRAFT. THE REFERENCE TO THE PERSON THEREFORE HAS TO BE SEEN IN THIS CONTEXT. IN THE PRESENT CASE, THE ASSESSEE COMPANY HAS HIRED TH E SERVICES OF TRANSPORT AGENCY, IT THUS INCURS A LIABILITY AND OW E PAYMENT TO SUCH TRANSPORT AGENCY FOR AVAILING ITS SERVICES. IT CAN EITHER MAKE PAYMENT THROUGH ACCOUNT PAYEE CHEQUE OR BANK DRAFT OR IN CA SH. WHERE IT MAKES PAYMENT IN CASH, IT IS HIT BY PROVISIONS OF S ECTION 40A(3). THE PAYMENT TO A TRUCK DRIVER IS THUS A PAYMENT TO AND ON BEHALF OF THE TRANSPORT AGENCY AND IS NOT A PAYMENT TO THE TRUCK DRIVER IN HIS INDIVIDUAL CAPACITY AS THE ASSESSEE HAS AVAILED THE SERVICES OF THE TRANSPORT AGENCY TO TRANSPORT ITS GOODS AND NOT THA T OF THE TRUCK DRIVER SIMPLICITER. IT WOULD THEREFORE TO BE READ AS THE PAYMENT OR AGGREGATE OF PAYMENT TO A TRANSPORT AGENCY (AND NOT TO AN IND IVIDUAL DRIVER) IN A SINGLE DAY AND WHERE THE SAME EXCEEDS THE THRESHOLD OF RS 35,000, UNLESS IT IS SPECIFICALLY COVERED BY THE EXCEPTION AS PROVIDED IN RULE 6DD, IT WILL BE SUBJECT TO DISALLOWANCE. INFACT, RU LE 6DD(K) TALKS ABOUT THE REVERSE SITUATION WHERE THE PAYMENT IS MADE BY ANY PERSON TO HIS AGENT WHO IS REQUIRED TO MAKE PAYMENT IN CASH FOR G OODS OR SERVICES ON ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 15 BEHALF OF SUCH PERSON. THEREFORE, WHERE THE PAYMENT IS MADE TO THE AGENT OF THE PAYER, RULE 6DD COMES TO THE RESCUE AN D NOT OTHERWISE. THE TRUCK DRIVERS ARE NOT THE AGENT OF THE ASSESSEE COMPANY AND THUS NOT COVERED UNDER THE EXCEPTION CARVED OUT IN RULE 6DD. GIVEN THE CURRENT PROVISIONS IN SECTION 40A(3) READ WITH RULE 6DD, IN THE INSTANT CASE, THE PAYMENTS TO INDIVIDUAL TRANSPORT AGENCIES EXCEED THE THRESHOLD OF RS 35,000 AND THUS RIGHTLY DISALLOWED BY THE AO. IN THE RESULT, GROUND NO. 2 OF THE ASSESSEE IS DISMISSED. 14. REGARDING GROUND NO. 3 OF THE ASSESSEES APPEAL , BRIEF FACTS OF THE CASE ARE THAT ASSESSEE INVESTED RS. 2,97,358/- IN SHARES OF SBBJ IN EARLIER YEARS. IT RECEIVED DIVIDEND INCOME OF RS. 3 2,480/- DURING THE YEAR WHICH WAS CLAIMED EXEMPT U/S 10(34) OF THE ACT . SINCE THE ASSESSEE HAS NOT SHOWN ANY EXPENSES RELATABLE TO EX EMPT INCOME, THE AO DISALLOWED RS. 14,901/- BY COMPUTING THE EXPENDI TURE INCURRED IN RELATION TO EARNING EXEMPT INCOME IN ACCORDANCE WIT H RULE 8D OF INCOME TAX RULES, 1962. 15. THE LD. CIT(A) ACCEPTED THE SUBMISSION OF THE A SSESSEE THAT THE INTEREST FREE FUNDS WERE AVAILABLE WITH THE ASSESSE E WHICH WERE MUCH THAN THE INVESTMENT MADE BY THE ASSESSEE AND THUS, NO DISALLOWANCE ON ACCOUNT OF INTEREST EXPENSES IS CALLED FOR. HOWE VER, SHE CONFIRMED THE DISALLOWANCE OF RS. 13,414/- OUT OF ADMINISTRAT IVE EXPENSES BY HOLDING THAT SOME EXPENDITURE WOULD HAVE GONE INTO EARNING THE DIVIDEND INCOME. ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 16 16. DURING THE COURSE OF HEARING, THE LD. AR SUBMIT TED THAT AT THE OUTSET, IT MAY BE NOTED THAT THE AO WHILE COMPUTING THE DISALLOWANCE IN ACCORDANCE WITH RULE 8D OF INCOME TAX RULES, 1962, MADE DISALLOWANCE OUT OF INTEREST EXPENSES AT RS. 13,414 /- AND OUT OF ADMINISTRATIVE EXPENSES AT RS. 1,487/- (REFER PG 10 OF THE ASSESSMENT ORDER). THE LD. CIT(A) ACCEPTED THAT NO DISALLOWANC E IS TO BE MADE OUT OF THE INTEREST EXPENSES BUT HAS WRONGLY CONFIRMED THE DISALLOWANCE OUT OF ADMINISTRATIVE EXPENSES AT RS. 13,414/- AS A GAINST RS. 1,487/- DISALLOWED BY AO. THEREFORE, EVEN IF ORDER OF LD. C IT(A) IS UPHELD, THE DISALLOWANCE BE DIRECTED TO BE RESTRICTED AT RS. 1, 487/- AS AGAINST RS. 13,414/- INCORRECTLY MENTIONED BY THE LD. CIT(A). 17. AFTER HEARING BOTH THE PARTIES, DISALLOWANCE OF ADMINISTRATIVE EXPENSES IS RESTRICTED TO RS 1,487. IN THE RESULT, THE GROUND IS PARTLY ALLOWED. ITA NO. 505/JP/17 18. REGARDING SOLE GROUND OF APPEAL TAKEN BY THE RE VENUE, BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY IS ENGAGE D IN MANUFACTURING, TRADING AND EXPORT OF MARBLE TILES & SLABS. THE AO OBSERVED THAT ASSESSEE HAS SHOWN CLOSING STOCK OF R S. 5,20,26,159/- IN RESPECT OF MARBLE BLOCKS, SLABS, TILES ETC. IN STOC K REGISTER, NO STOCK IS MENTIONED AS DEFECTIVE. NO IDENTIFICATION WAS MAINT AINED BY THE ASSESSEE FOR THE DEFECTIVE GOODS. THERE IS NO INSTA NCE OF SELLING THE DEFECTIVE GOODS. ALL THE SALE VOUCHERS ARE FOR FRES H GOODS AND OF SIMILAR VALUES. ACCORDINGLY, HE ISSUED SHOW CAUSE NOTICE AS TO WHY THE METHOD ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 17 OF VALUATION OF STOCK SHOULD NOT BE REJECTED. THE A SSESSEE FILED ITS EXPLANATION WHICH IS REPRODUCED AT PAGE 3 & 4 OF TH E ASSESSMENT ORDER. THE AO, HOWEVER, REJECTED THE CONTENTION OF THE ASS ESSEE BY HOLDING THAT ASSESSEE HAS NO BASIS TO VALUE 25% OF THE STOC K AT 50% OF VALUE HOLDING IT AS DEFECTIVE. ACCORDINGLY, HE HELD THE S TOCK AS NON-DEFECTIVE STOCK AND THUS ENHANCED THE VALUE OF CLOSING STOCK BY RS. 73,28,633/-. DURING AY 2012-13, VALUE OF CLOSING STOCK WAS ENHAN CED BY RS. 31,44,138/- WHICH RESULTED IN INCREASE IN VALUE OF OPENING STOCK FOR THE YEAR UNDER CONSIDERATION. ACCORDINGLY, AO MADE NET ADDITION OF RS. 41,84,495/- (73,28,633-31,44,138) ON ACCOUNT OF UND ER VALUATION OF THE CLOSING STOCK. ON APPEAL, THE LD CIT(A) HAS PARTLY UPHELD THE ORDER OF THE AO AND PARTLY ALLOWED THE APPEAL OF THE ASSESSE E. THE ASSESSEE HAS ACCEPTED THE ORDER OF THE LD CIT(A) AND THE REV ENUE IS IN APPEAL AGAINST THE RELIEF GRANTED BY THE LD CIT(A) WHEREBY THE LATTER HAS DIRECTED TO TREAT 25% OF STOCK AS DEFECTIVE. 19. DURING THE COURSE OF HEARING, THE LD. AR SUBMIT TED THAT THE ASSESSEE IS REGULARLY VALUING FINISHED STOCK AT COS T OF PRODUCTION OR NET REALIZABLE VALUE WHICHEVER IS LOWER. IN SCHEDULE 21 TO THE ACCOUNTS, THE METHOD OF VALUATION OF THE FINISHED GOODS IS STATED AS UNDER:- FINISHED GOODS ARE VALUED ON COST OF PRODUCTION AN D NET REALIZABLE VALUE WHICHEVER IS LESS, AFTER GIVING EFFECT OF DEF ECTIVE GOODS ON ESTIMATED BASIS IF ANY. FURTHER THE COST OF PRODUCT ION IS CONSIDERED ACCORDING TO THE EXTENT OF MANUFACTURING PROCESS AS PER ESTIMATE. IT WAS FURTHER SUBMITTED THAT IN THIS BUSINESS, GOO DS ARE SOLD ON SELECTIVE BASIS AND THEREFORE, THE BEST QUALITY GOO DS ARE SOLD FIRST AND ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 18 THE REMAINING GOODS GETS ACCUMULATED. SUCH ACCUMULA TED STOCK HAS A LOWER REALIZABLE VALUE AND THEREFORE, STOCK OF SUCH GOODS IS VALUED AT LOWER THAN COST. NORMALLY, CONSIDERING THE PAST EXP ERIENCE, THE ASSESSEE IN RESPECT OF CERTAIN ITEMS LIKE MARBLE BL OCKS/TILES/SLAB, ETC., TREAT 75% OF THE STOCK AS FRESH AND 25% AS DEFECTIV E. THE FRESH STOCK IS VALUED AT AVERAGE COST OF PRODUCTION AND DEFECTI VE GOODS ARE VALUED AT 50% OF THE AVERAGE COST OF PRODUCTION. HOWEVER, IN SOME CASES, THIS RATIO IS INCREASED OR DECREASED CONSIDERING THE ACT UAL POSITION OF THE DEFECTIVE GOODS. THIS METHOD OF VALUATION OF CLOSIN G STOCK HAS BEEN CONSISTENTLY FOLLOWED BY THE ASSESSEE. 20. IT MAY BE NOTED THAT ASSESSEE IS VALUING CLOSIN G STOCK OF VARIOUS ITEMS OF FINISHED STOCK AT COST OR REALISABLE VALUE WHICHEVER IS LOWER AFTER GIVING EFFECT OF DEFECTIVE GOODS ON ESTIMATE BASIS. THIS ESTIMATION IS MADE ON YEAR TO YEAR BASIS. THE ESTIMATION OF TH E DEFECTIVE FINISHED GOODS AND ITS VALUATION IN DIFFERENT ASSESSMENT YEA R IS AS UNDER:- PARTICULAR S NATURE AND VALUE AY 08-09 AY 09-10 AY 10-11 AY 11-12 AY 12-13 AY 13-14 MARBLES SLABS DEFECTIVE % 50 50 50 50 50 25 VALUATION % 25 25 25 25 25 50 MARBLES SLABS IMPORTED DEFECTIVE % 0 0 0 50 50 50 VALUATION % 0 0 0 50 50 50 POLISH TILES DEFECTIVE % 50 50 25 25 50 25 VALUATION % 25 25 50 50 25 50 GANGSAW TILES DE FECTIVE % 50 50 50 50 50 25 VALUATION % 25 25 50 50 25 50 ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 19 FROM THE ABOVE TABLE IT CAN BE NOTED THAT ASSESSEE ON THE BASIS OF PHYSICAL VERIFICATION IS ESTIMATING THE DEFECTIVE S TOCK AND THE SAME IS VALUED AT CERTAIN PERCENTAGE OF THE AVERAGE COST OF PRODUCTION TO ARRIVE AT THE NET REALISABLE VALUE. THIS IS FOLLOWED CONSI STENTLY ON YEAR TO YEAR BASIS. ASSESSEE HAS CONSISTENTLY TAKEN THE DEFECTIV E STOCK AT 50% AND VALUED IT AT 25% (50% IN CASE OF MARBLE SLAB IMPORT ED) OF THE AVERAGE COST OF PRODUCTION. DURING THE YEAR, ASSESSEE HAS T AKEN THE DEFECTIVE STOCK AT 25% (50% IN CASE OF MARBLE SLAB IMPORTED) AND VALUED IT AT 50% OF THE AVERAGE COST OF PRODUCTION ON THE BASIS OF PHYSICAL VERIFICATION. THEREFORE, THERE IS NO REASON WITH TH E AO TO CONSIDER THE STOCK OF THESE ITEMS AS GOOD AND VALUE THE SAME AT AVERAGE COST OF PRODUCTION. 21. IT IS A SETTLED LAW THAT CLOSING STOCK OF ONE Y EAR BECOMES THE OPENING STOCK OF THE NEXT YEAR. THE AO SIMPLY INCRE ASED THE VALUE OF THE CLOSING STOCK OF THE YEAR BY RS. 73,28,633/- WI THOUT DIRECTING TO CORRESPONDINGLY INCREASE THE VALUE OF THE OPENING S TOCK OF NEXT YEAR. THE LD. CIT(A) HAS GIVEN THE DIRECTION TO INCREASE THE VALUE OF OPENING STOCK BY THE AMOUNT OF ADDITION CONFIRMED BY HIM. T HIS DIRECTION IS NOT CHALLENGED BY THE DEPARTMENT. HENCE, IN CASE THE VA LUATION OF STOCK AS DONE BY AO IS APPROVED, HE HAS TO ADOPT THE SAME AS OPENING STOCK IN NEXT YEAR. THEREFORE, IN AY 2014-15, THE INCOME WOU LD BE REDUCED BY THE SAME AMOUNT. THE SUPREME COURT IN CASE OF CIT V S. EXCEL INDUSTRIES LTD., 388 ITR 295 HAS ALSO HELD THAT WHE RE IN SEVERAL A.Y.S THE REVENUE ACCEPTED THE ORDER OF THE TRIBUNAL IN F AVOUR OF THE ASSESSEE AND DID NOT PURSUE THE MATTER ANY FURTHER BUT IN RESPECT OF SOME A.Y.S, THE MATTER WAS TAKEN IN APPEAL BEFORE THE HIGH COURT BUT ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 20 WITHOUT ANY SUCCESS, THE REVENUE CANNOT BE ALLOWED TO FLIP-FLOP ON THE ISSUE AND IT OUGHT LET THE MATTER REST RATHER THAN SPEND THE TAXPAYERS MONEY IN PURSUING LITIGATION FOR THE SAKE OF IT. IT FURTHER HELD THAT WHEN THE RATE OF TAX REMAINED THE SAME IN PRESENT A.Y. A S WELL AS IN SUBSEQUENT A.Y., THE DISPUTE RAISED BY THE REVENUE IS ENTIRELY ACADEMIC OR AT BEST MAY HAVE A MINOR TAX EFFECT. IT WAS THER EFORE, NO NEED FOR THE REVENUE TO CONTINUE WITH THE LITIGATION WHEN IT WAS QUITE CLEAR THAT NOT ONLY WAS IT FRUITLESS (ON MERITS) BUT ALSO THAT IT MAY NOT HAVE ADDED ANYTHING MUCH TO THE PUBLIC COFFERS. IT MAY ALSO BE NOTED THAT THE PUNJAB & HARYANA HIGH COURT IN CASE OF CIT VS. SATI SH ESTATE PVT. LTD. (2014) 226 TAXMAN 11 WHERE ADDITION OF RS. 75 LAKHS WAS MADE ON ACCOUNT OF UNDERVALUATION OF CLOSING STOCK OF THE L AND BUT THE CLOSING STOCK OF LAND SHOWN BY THE ASSESSEE IS ACCEPTED BY AO AS OPENING STOCK FOR THE SUBSEQUENT MADE BY THE AO AS ON LOSS TO THE REVENUE HAS BEEN CAUSED. IN THE PRESENT CASE ALSO, FOR SUBSEQUE NT AY 2014-15, AO HAS ACCEPTED THE CLOSING STOCK DECLARED BY THE ASSE SSEE AS OPENING STOCK AND ALSO ACCEPTED THE CLOSING STOCK DECLARED IN THAT YEAR. THEREFORE, THE GROUND RAISED BY THE DEPARTMENT IS O NLY ACADEMIC HAVING NO TAX EFFECT. 22. SIMILAR ISSUE HAS COME UP BEFORE THE HONBLE IT AT IN AY 2005-06, 2008-09, & 2009-10 WHERE THE ORDER OF LD. CIT(A) WA S UPHELD. THEREFORE, ALSO THE GROUND OF THE DEPARTMENT SHOULD BE DISMISSED.IN VIEW OF ABOVE, GROUND OF THE DEPARTMENT BE DISMISSE D BY UPHOLDING THE ORDER OF LD. CIT(A). ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 21 23. THE LD. D/R SUPPORTED THE ORDER OF THE ASSESSIN G OFFICER AND SUBMITTED THAT THERE WAS NO BASIS FOR LD CIT(A) TO TREAT 25% OF STOCK AS DEFECTIVE. 24. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ISSUE UNDER CONSIDERATION RELATES T O FINDING OF THE LD CIT(A) TO THE LIMITED EXTENT IT RELATES TO DETERMIN ATION OF 25% OF STOCK AS DEFECTIVE AND BASIS THEREOF FOR THE PURPOSES OF VALUING THE CLOSING STOCK. REGARDING THE OTHER FINDING OF THE LD CIT(A) THAT AN ADDITION MADE ON ACCOUNT OF UNDERVALUATION OF CLOSING STOCK IN THIS YEAR WILL RESULT IN INCREASE IN THE VALUE OF OPENING STOCK IN SUBSEQUENT YEAR, THE SAME HAS NOT BEEN CHALLENGED BY THE REVENUE BEFORE US AND HENCE, WE ARE NOT COMMENTING ON THE SAME. 25. WE NOW REFER TO THE DETAIL FINDINGS OF THE CIT( A) WHICH ARE REPRODUCED AS UNDER: 2.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSE SSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THIS GROUND RELATES T O ADDITION OF RS. 41,84,495/- ON ACCOUNT OF UNDERVALUATION OF CLOSING STOCK AND NOT CONSIDERING INCREASE IN THE VALUE OF OPENING STOCK OF NEXT YEAR BY RS. 13,25,633/-. THE ASSESSING OFFICER NOTICED THAT CER TAIN AMOUNT (25%) OF STOCK WAS BEING TREATED AS DEFECTIVE STOCK AND V ALUED AT 50% OF ITS VALUE. THE ASSESSING OFFICER FURTHER OBSERVED THAT THERE IS NO BASIS FOR SUCH VALUATION BEING FOLLOWED AND IT WAS ON LUMP SU M OR ESTIMATED BASIS. SUCH STOCK HAD BEEN SHOWN OVER THE YEARS AND FOR THE LAST FIVE YEARS THE VALUE OF THE SAME STOOD AT RS. 4,17,24,50 6/-. FURTHER, THE ASSESSING OFFICER NOTED THAT NO STOCK WAS FOUND TO HAVE BEEN SOLD AT LOWER RATE AS PER THE BOOKS OF ACCOUNTS AND SALE BI LLS. IN VIEW OF THE ABOVE, THE ASSESSING OFFICER ENHANCED THE CLOSING S TOCK BY TREATING THE ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 22 STOCK TREATED AS DEFECTIVE BY THE ASSESSEE AS NORMA L STOCK AND VALUING IT AT FULL VALUE INSTEAD OF 50% APPLIED BY THE ASSE SSEE. IN THE PRESENT PROCEEDINGS, IT IS SUBMITTED THAT AS PER SCHEDULE 21 TO THE ACCOUNTS, REFERENCE TO VALUATION OF DEFECTIVE G OOD ON ESTIMATED BASIS IS APPEARING. THE NATURE OF BUSINESS IS SUCH THAT GOODS ARE SOLD ON SELECTIVE BASIS AND STOCK GETS ACCUMULATED. A C HART SHOWING THE ESTIMATION OF GOODS FOR PREVIOUS YEARS AND RATES A PPLIED WAS FILED. LASTLY, IT WAS SUBMITTED THAT CLOSING STOCK OF ONE YEAR BECOME THE OPENING STOCK OF NEXT YEAR AND IF THE VALUE OF CLO SING STOCK FOR THE CURRENT YEAR IS INCREASED, THE OPENING STOCK VALUE FOR NEXT YEAR WOULD ALSO INCREASE AND RELIANCE WAS PLACED ON THE APEX C OURT IN THE CASE OF CIT VS. EXCEL INDUSTRIES LTD. 358 ITR 295. IT WAS ALSO SUBMITTED THAT THE SAME ISSUE AROSE IN ASSESSMENT YEAR 2005-06 AND TRAVELLED UPTO ITAT, IN ASSESSMENT YEAR 2008-09 AND 2009-10 ALSO I SSUE AROSE AND THE CIT(A) FOLLOWING THE DECISION OF THE ITAT FOR E ARLIER YEARS DELETED THE SAME. IN ASSESSMENT YEAR 2010-11, THE ASSESSING OFFICER HAS ACCEPTED THE VALUATION OF THE CLOSING STOCK AS SUCH IN THE ASSESSMENT UNDER SECTION 143(3). IT IS SEEN THAT THE ASSESSEE HAS BEEN ADOPTING DIFF ERENT PERCENTAGE OF STOCK TO BE TREATED AS DEFECTIVE WITHOUT ANY SPECIF IC BASIS. FURTHER, WHEN CONFRONTED BY THE ASSESSING OFFICER, THE APPEL LANT COULD NOT PROVE THAT ANY STOCK WAS ACTUALLY SOLD AT A LOWER PRICE W ITH REFERENCE TO ITS BOOKS OF ACCOUNTS AND BILLS AND VOUCHERS. A COMPARATIVE CHART OF ESTIMATION OF DEFECTIVE STOC K WAS CALLED FOR, FOR THE LAST 6 YEARS I.E. 2008-09 ONWARDS AND IT IS SEE N THAT THE APPELLANT HAS BEEN VALUING THE PERCENTAGE OF DEFECTIVE STOCK SOMETIMES AT 50% AND SOMETIMES AT 25%, NO CONSISTENT POLICY HAS BEEN ADOPTED. EVEN COMPARED TO THE PREVIOUS YEAR PURCHASES OF MARBLE S LABS, POLISH TILES AND GANGSAW TILES HAVE BEEN CHANGED. AS REGARDS IM PORTED TILES, MY PREDECESSOR FOR THE ASSESSMENT YEAR 2011-12, WHICH IS THE FIRST YEAR OF THESE TILES, HAS HELD THAT 50% OF STOCK BEING TAKEN AS DEFECTIVE IS ON HIGHER SIDE AND HAS RESTRICTED THE SAME TO 25%. IN THE PRESENT YEAR ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 23 ALSO, THE ASSESSEE HAS TAKEN THE SAME AT 50%. IN TH E OTHER CATEGORIES IT IS SEEN THAT THE APPELLANT HAS VALUED THE DEFECT IVE STOCK AT LESSER PERCENTAGE I.E. 25% AND VALUED AT A HIGHER VALUE (5 0%) AS COMPARED TO LAST YEAR. IN VIEW OF THE ORDERS OF ITAT FOR EAR LIER YEARS, THE CONTENTION OF THE ASSESSING OFFICER THAT THERE WAS NO DEFECTIVE STOCK CANNOT BE ACCEPTED. HOWEVER, IN CASE OF IMPORTED MA RBLE SLABS WHICH WERE DEALT WITH FOR FIRST TIME IN ASSESSMENT YEAR 2 010-11, THE DECISION OF CIT(A)-2, FOR ASSESSMENT YEAR 2011-12 IS BEING F OLLOWED AND THE 50% OF DEFECTIVE STOCK IS RESTRICTED TO 25%, TO THA T EXTENT THE ADDITION FOR UNDER VALUATION OF CLOSING STOCK IS UPHELD. THE GROUND NO. 1 IS PARTLY ALLOWED. FURTHER AS HELD IN THE ASSESSMENT YEAR 2011-12 BY M Y PREDECESSOR, AN ADDITION MADE ON ACCOUNT OF UNDER VALUATION OF CLOS ING STOCK IN THIS YEAR WILL RESULT IN INCREASE OF THE SAME IN THE NEX T YEAR. THE ASSESSING OFFICER IS THEREFORE DIRECTED TO INCREASE THE VALUE OF OPENING STOCK OF ASSESSMENT YEAR 2014-15 BY THE AMOUNT OF ADDITION M ADE IN THIS YEAR ON ACCOUNT OF UNDER VALUATION OF CLOSING STOCK. THE GROUND NO. 1.1 IS ALLOWED. 26. ON PERUSAL OF THE ABOVE FINDINGS OF THE LD CIT( A), IT IS NOTED THAT FIRSTLY, SHE HAS ACKNOWLEDGED THE FACT THAT THE ASS ESSEE HAS BEEN ADOPTING DIFFERENT PERCENTAGE OF STOCK TO BE TREATE D AS DEFECTIVE WITHOUT ANY SPECIFIC BASIS. FURTHER, SHE ALSO ACKNO WLEDGED THAT WHEN CONFRONTED BY THE ASSESSING OFFICER, THE APPELLANT COULD NOT PROVE THAT ANY STOCK WAS ACTUALLY SOLD AT A LOWER PRICE WITH R EFERENCE TO ITS BOOKS OF ACCOUNTS AND BILLS AND VOUCHERS. THEREAFTER, SHE HAS EXAMINED THE COMPARATIVE CHART SHOWING DEFECTIVE PERCENTAGE OF S TOCK IN THE PREVIOUS YEARS AND OBSERVED THE COMPARATIVE POSITIO N VIS-A-VIS PREVIOUS YEAR AND FURTHER TAKING INTO CONSIDERATION THE ORDE RS OF ITAT FOR EARLIER YEARS, HELD THAT THE CONTENTION OF THE ASSESSING O FFICER THAT THERE WAS ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 24 NO DEFECTIVE STOCK CANNOT BE ACCEPTED. APPARENTLY, THIS FINDING IS IN RELATION TO FINISHED STOCK OTHER THAN IMPORTED MAR BLE SLABS. IN RESPECT OF STOCK OF IMPORTED MARBLE SLABS, SHE HAS FOLLOWED THE DECISION OF HER PREDECESSOR FOR AY 2010-11 WHERE PERCENTAGE OF DEFECTIVE STOCK WAS RESTRICTED TO 25% AS AGAINST 50% DONE BY THE AO . 27. THE ABOVE FACTUAL MATRIX THUS PRESENT A SITUATI ON WHERE THE LD CIT(A) AT FIRST PLACE ACCEPT THE FACT THAT THE ASSE SSEE HAS BEEN ADOPTING DIFFERENT PERCENTAGE OF STOCK TO BE TREATE D AS DEFECTIVE WITHOUT ANY SPECIFIC BASIS AND THEN, FOLLOWING THE POSITION IN THE APPELLATE PROCEEDINGS IN THE EARLIER YEARS, ACCEPT THE FACT THAT THE ASSESSEE DOES POSSESS DEFECTIVE STOCK FOR THE YEAR UNDER CONSIDERATION. 28. IN OUR VIEW, THE RESULTS OF THE EARLIER YEARS M IGHT SHOW THE RELEVANT TREND BUT ARE NOT NECESSARY CONCLUSIVE FOR DETERMIN ATION OF POSITION OF ACTUAL STOCK OF DEFECTIVE GOODS FOR THE YEAR UNDER CONSIDERATION. IT IS A FUNCTION OF IDENTIFYING AND DETERMINING THE POSITIO N OF DEFECTIVE STOCK THROUGH AN APPROPRIATE METHODOLOGY TAKING INTO CONS IDERATION THE PHYSICAL CONDITION AND MOVEMENT OF STOCK DURING THE YEAR. SECONDLY, THE POSITION IN THE PAST YEARS CAN BE RELIED UPON A S FAR AS METHOD OF VALUATION OF STOCK IS CONCERNED. WHERE THERE IS CON SISTENCY IN THE METHOD OF VALUATION, THE SAME SHOULD NOT BE DISTURB ED AND ORDINARILY BE FOLLOWED UNLESS THERE ARE VALID REASONS IDENTIFI ED BY THE AO TO DEVIATE FROM THE SAME. HOWEVER, THE FACT REMAINS T HAT SUCH METHOD OF VALUATION HAS TO BE APPLIED TO THE ACTUAL FACTS PER TAINING TO YEAR UNDER CONSIDERATION. THERE CANNOT BE A SITUATION WHERE T HE ACTUAL FACTS ARE NOT EMERGING FROM THE RECORDS BUT FOLLOWING THE PAS T YEARS, WHERE IT IS ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 25 FOUND THAT THERE IS A CONSISTENCY IN THE METHOD OF VALUATION OF STOCK IS CONCERNED, THE SAME SHOULD BE FOLLOWED IN THE YEAR UNDER CONSIDERATION. IN THE INSTANT CASE, THERE IS NO DI SPUTE REGARDING VALUATION OF DEFECTIVE STOCK AT LOWER OF COST AND N ET REALISABLE VALUE. THE DISPUTE RELATES TO DETERMINATION OF THE EXTENT OF THE DEFECTIVE STOCK. IN THE INSTANT CASE, THE LD AR HAS CONTENDE D THAT BASED ON PAST EXPERIENCE, ESTIMATION OF DEFECTIVE STOCK IS MADE O N YEAR ON YEAR BASIS. IT IS INTERESTING TO NOTE FROM TABLE REPRODUCED AT PARA 20 ABOVE, IN RESPECT OF MARBLE SLABS, PERCENTAGE OF DEFECTIVE ST OCK HAS BEEN STATIC AT 50% RIGHT FROM AY 2008-09 ONWARDS AND SUDDENLY, THE RE IS DRASTIC FALL TO 25% DURING THE YEAR UNDER CONSIDERATION. SIMILA R IS THE POSITION IN RESPECT OF IMPORTED MARBLE SLABS STARTING AY 2011-1 2 ONWARDS WHEREIN DEFECTIVE STOCK HAS BEEN ESTIMATED AT 50%. IN RESP ECT OF POLISH TILES, PERCENTAGE OF DEFECTIVE STOCK HAS BEEN SHOWN FLUCTU ATING BETWEEN 25% AND 50% DURING THE SAME PERIOD. IN RESPECT OF GANG SAW TILES, PERCENTAGE OF DEFECTIVE STOCK HAS BEEN STATIC AT 50 % RIGHT FROM AY 2008-09 ONWARDS AND SUDDENLY, THERE IS DRASTIC FALL TO 25% DURING THE YEAR UNDER CONSIDERATION. WHAT IS THEREFORE UNCLEA R IS HOW THE PERCENTAGE OF DEFECTIVE STOCK CAN BE SO CONSISTENT AND STATIC, AND THAT TOO OVER A LONG PERIOD OF SIX YEARS AND SECONDLY, W HAT IS THE REASON FOR SUDDEN FALL IN THE PERCENTAGE OF DEFECTIVE STOCK DU RING THE YEARS IN RESPECT OF SOME OF THE ITEMS AS NOTED ABOVE. ON PE RUSAL OF RECORDS, WE ALSO FIND THAT THE DEFECTIVE STOCK HAS BEEN REFE RRED TO BY THE ASSESSEE AS A STOCK WHICH IS NOT OF BEST QUALITY, I S SLOW MOVING AND HAS GOT ACCUMULATED AT THE END OF THE YEAR AND WHICH IS DETERMINED BASED ON PHYSICAL VERIFICATION. IT IS THUS A STOCK WHICH IS IDENTIFIABLE AND NOT A DEAD STOCK BUT A SLOW MOVING STOCK IN THE SENSE THA T IT TAKES LONGER TO ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 26 DISPOSE IT OFF AND THE FACT THAT IT HAS BEEN DISPOS ED OFF SUBSEQUENTLY AT A PARTICULAR VALUE. THE ONUS IS THUS ON THE ASSESS EE TO DEMONSTRATE THE POSITION OF DEFECTIVE STOCK AND MOVEMENT (SALE) THE REOF OVER THE PAST YEARS. WHERE THROUGH SUCH MOVEMENT OF STOCK, IT CAN BE DEMONSTRATED THAT THE TREND OF DEFECTIVE STOCK THROWS A PERCENTA GE OF 25% OR 50% OF SPECIFIED GOODS AS DEFECTIVE, THE SAME CAN THEN BE ACCEPTED AS A RELIABLE AND ROBUST BASIS TO HELP DETERMINATION OF RELEVANT TREND FOR IDENTIFICATION OF DEFECTIVE STOCKS. HOWEVER, AS WE HAVE HELD ABOVE, THE ASSESSEE HAS TO DEMONSTRATE THROUGH FACTS OF THE IN STANT YEAR THAT SUCH A TREND PERCENTAGE OF DEFECTIVE STOCK CAN BE APPLIE D FOR THE YEAR UNDER CONSIDERATION TAKING INTO CONSIDERATION THE POSITIO N OF OPENING STOCK, PURCHASES, SALE AND CLOSING STOCK. THERE IS HOWEVE R NOTHING ON RECORD TO SUGGEST THAT THE ASSESSEE HAS DISCHARGED THIS IN ITIAL ONUS PLACED ON IT. IN THE RESULT, WE ARE SETTING ASIDE THE MATTER TO THE FILE OF THE LD CIT(A) TO EXAMINE THE MATTER AFRESH AS PER LAW AFTE R PROVIDING APPROPRIATE OPPORTUNITY TO THE ASSESSEE. IN THE RE SULT, THE GROUND OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 09/08/2017 SD/- SD/- DQY HKKJR FOE FLAG ;KNO (KUL BHARAT) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER ITA NO. 353 & 505/JP/2017 KHETAN TILES PVT. LTD., JAIPUR VS. ACIT, JAIPUR 27 TK;IQJ@ JAIPUR FNUKAD@ DATED:- 09/08/2017. * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- KHETAN TILES PVT. LTD., JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CIRCLE-4, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 353 & 505/JP/2017} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR