IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AN D SHRI GEORGE MATHAN, JUDICIAL MEMBER .. I.T.A. NO. 356/MDS/2009 ASSESSMENT YEAR : 2005-06 THE ASSISTANT COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE-II(4), CHENNAI. V. M/S. LEAAP INTERNATIONAL P. LTD., 46, RAJAJI SALAI, CHENNAI-600 001. (PAN: AAACL1251F) (APPELLANT) (RESPONDENT) APPELLANT BY : DR. I. VIJAYAKUMAR RESPONDENT BY : SHRI V. S. JAYAKUMAR O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(APPEALS)-III, CHENNAI IN APPEAL NO. 548/07-08/A .III DATED 18-11-2008 FOR THE ASSESSMENT YEAR 2005-06. 2. DR. I. VIJAYAKUMAR, LEARNED CIT-DR REPRESENTED O N BEHALF OF THE REVENUE AND SHRI V. S. JAYAKUMAR, ADVOCATE REPRESENTED ON B EHALF OF THE ASSESSEE. 3. IN THE REVENUES APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: THE ORDER OF THE LEARNED CIT(A) IS CONTRARY TO LAW AND FACTS AND CIRCUMSTANCES OF THE CASE. I.T.A. NO.356/MDS/2009 2 2.1. THE LEARNED CIT(A) ERRED IN DELETING THE DISA LLOWANCE OF ` 5,14,78,766/- U/S 40A(1) TOWARD FOREIGN OPERATIONA L PAYMENTS. 2.2. HAVING REGARD TO THE HON'BLE SUPREME COURTS DECISION IN THE CASE OF TRANSMISSION CORPORATION OF A.P LTD. (239 ITR 587), THE LEARNED CIT(A) OUGHT TO HAVE UPH ELD THE ACTION OF THE ASSESSING OFFICER. 2.3. THE LEARNED CIT(A) FAILED TO NOTE THAT THE JURISDICTIONAL ITATS DECISION IN THE CASE OF M/S. FRONTIER OFFSHORE EXPLORATION (INDIA) LTD. ITA NO. 2037/MDS /2006 DATED 28.2.2007 SUPPORTS THE ACTION OF THE ASSESSIN G OFFICER. 2.4. HAVING REGARD TO THE DECISION OF THE JURISDIC TIONAL ITAT IN THE CASE OF WEST ASIA MARITIME LTD. V. ITO, INTERNATIONAL TAXATION II (111 ITD 155) WHEREIN THE ITAT QUOTING THE DECISION OF THE HON'BLE SUPREME COURT I N THE CASE OF P.C.ROY & CO. (INDIA) P. LTD. V. A.C. MUKHERJEE, ITO (36 ITR 365) HAS OBSERVED THAT IF CHARGEABLE UNDER THE PRO VISIONS OF THE ACT MEANS ACTUALLY LIABLE TO TAX, IN OTHER WORD S, IF THE SUM CONTEMPLATED IS TAXABLE INCOME, THE DIFFICULTY IS U NDOUBTEDLY CREATED AS TO COMPLYING WITH THE PROVISIONS OF THE SECTION, THE LEARNED CIT(A) OUGHT TO HAVE CONFIRMED THE ACTION O F THE ASSESSING OFFICER. 3. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUC ED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE LEARNED CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING O FFICER RESTORED. I.T.A. NO.356/MDS/2009 3 4. AT THE TIME OF HEARING, THE LEARNED DR SUBMITTED THAT THE ISSUE IN THE APPEAL WAS THE DISALLOWANCE OF THE FOREIGN OPERATIO N PAYMENTS UNDER SECTION 40(A)(I) ON ACCOUNT OF THE NON-DEDUCTION OF TDS UND ER SECTION 195 OF THE INCOME TAX ACT, 1961. THE LEARNED DR FILED WRITTEN SUBMISSION WHICH IS EXTRACTED AS FOLLOWS: THE ISSUE INVOLVED IN THE DISALLOWANCE OF FOREIGN OPERATIONAL PAYMENTS U/S 40(A)(I) OF ` 5,14,78,766/-. THE REVENUE RELIES ON SUPREME COURTS DECISION IN THE CASE OF TRANSMISSIO N CORPORATION OF A.P LTD. IN 239 ITR 587. APART FROM THIS APEX COURTS DECISION, THE REVENUE DERIVES SUPPORT FROM THE FOLLOWING DECISIONS OF JURISDICTIONAL ITAT:- (I) FRONTIER OFFSHORE EXPLORATION (I) PVT. LTD. V. DCIT (2009) ITD 494) (II) WEST ASIA MARITIME LTD. V. ITO (2008) (111 IT D 155) 2. THE CIT(A) AND THE ASSESSEE RELIED UPON THE DEC ISION OF THE HON'BLE ITAT MADRAS A BENCH IN THE CASE OF IN DOPEL GARMENTS PVT. LTD. V. DCIT(2003) (86 ITD 102). IN THIS CONNECTION IT IS TO BE STATED THAT THE CASE OF INDO PEL GARMENTS PVT. LTD. IS FAIRLY AN OLD ONE DATED 17.5.2001 WHIC H WAS BASED UPON THEN EXISTING CIRCULARS. THE OTHER 2 DECISION S OF CHENNAI ITAT RELIED BY REVENUE IN THE CASE OF FRONTIER OFFS HORE EXPLORATION (I) PVT. LTD. V. DCIT(SUPRA) AND WEST AS IA MARITIME LTD. V. ITO (SUPRA) WERE PRONOUNCED ON 28.2.2007 AN D 19.5.2006 RESPECTIVELY. THESE 2 DECISIONS SHOULD B E APPLIED ON THE FACTS OF THE ASSESSEE IN THE APPEAL AS THEY WER E PASSED ON I.T.A. NO.356/MDS/2009 4 LATER DATES ON THE BASIS OF THE LATEST JUDICIAL PRO NOUNCEMENT AND CIRCULARS. 3. THE ASSESSEE ALSO DERIVES STRENGTH FROM THE SPE CIAL BENCH DECISION IN PRASAD PRODUCTIONS IN 125 ITD 263 (MAD) . WITH DUE RESPECT, I HAVE TO SAY THAT THE SAID DECISION MAY N OT BE FULLY APPLICABLE IN THE CASE OF THE ASSESSEE AS THERE ARE NO EVIDENCES TO SHOW THAT THERE EXISTED AGREEMENTS BETWEEN THE A SSESSEE AND NON-RESIDENTS. IT IS NOT PROVED BY THE ASSESSE E THAT THESE NON-RESIDENTS DO NOT HAVE PERMANENT ESTABLISHMENT I N INDIA WHEREAS IN PRASAD PRODUCTIONS IT WAS PROVED THAT TH E NON- RESIDENT DID NOT HAVE PERMANENT ESTABLISHMENT IN IN DIA. NOT ONLY THAT, THERE EXISTED DTAA IN THE CASE OF PRASAD PRODUCTIONS WHEREAS IN THE INSTANT CASE, THE ASSESSEE DID NOT B RING ANY SUCH DOCUMENT ON DTAA BETWEEN IT AND NON-RESIDENTS. 4. THE RATIO OF THE DECISION OF TRANSMISSION CORPO RATION OF A.P LTD. V. CIT (SUPRA) HAS BEEN ELABORATELY DISCUS SED IN THE CASE OF FRONTIER OFFSHORE EXPLORATION (I) PVT. LTD. (SUPRA). FOR THE SAKE OF CONVENIENCE IT IS REPRODUCED AS BELOW: ..AS POINTED OUT BY THE LD.D.R., BASICALLY THE ISSUE INVOLVED IN THE CASE OF TRANSMISSION CORPORATION OF A.P. LTD. VS. CIT (SUPRA) WAS DETERMINATION OF TAX AND INTEREST E TC. U/S 201 AND ONE OF THE ISSUE WAS WHETHER THE PROVISIONS OF SECTION 195 OF THE ACT ARE APPLICABLE TO CASES WHERE SUM PAID T O NON- RESIDENT DOES NOT WHOLLY REPRESENT INCOME. THE HON 'BLE ANDHRA PRADESH HIGH COURT AS WELL AS THE HON'BLE SUPREME C OURT HAS VERY CLEARLY OBSERVED THAT IF IT IS HELD TAX IS TO BE DEDUCTED ONLY ON THE PROPORTION OF INCOME COMPRISED IN THE GROSS PAYMENT MADE TO NON-RESIDENT IN THE ABSENCE OF SECTION 195( 2), THEN THE PROVISIONS OF 195(2) WOULD BE OTIOSE AND THEREFORE, IT MAY NOT BE CORRECT TO INTERPRET THE PROVISION IN THIS FASHI ON. THEN THE SUPREME COURT AGAIN VERY CLEARLY OBSERVED THAT IT I S A TENTATIVE I.T.A. NO.356/MDS/2009 5 DEDUCTION WHICH CLEARLY INDICATE THAT DEDUCTION HAS TO BE MADE ON THE WHOLE PAYMENT AND IF THE ASSESSEE IS OF THE OPINION THAT WHOLE OF SUCH GROSS AMOUNT DOES NOT CONSTITUTE INCO ME OF THE RECIPIENT, THEN HE COULD ALWAYS COME TO THE DEPARTM ENT BY WAY OF APPLICATION U/S 195(2). THAT IS WHY THE HON'BLE SUPREME COURT CLEARLY OBSERVED AT PAGE 595, THE RIGHTS OF PAYEE OR RECIPIENT ARE FULLY SAFEGUARDED U/S 195(2), 195(3) AND 197. THE ONLY THING WHICH IS REQUIRED TO BE DONE BY THEM IS TO FILE APPLICATION FOR DETERMINATION BY THE ASSESSING OFFI CER THAT SUCH SUM WOULD NOT BE CHARGEABLE TO TAX IN THE CASE OF R ECIPIENT OR FOR DETERMINATION OF THE APPROPRIATE PROPORTION OF SUCH SUM SO CHARGEABLE OR FOR GRANT OF CERTIFICATE AUTHORIZING THE RECIPIENT TO RECEIVE THE AMOUNT WITHOUT DEDUCTION OF TAX OR DEDU CTION OF TAX OR DEDUCTION OF INCOME TAX AT ANY LOWER RATES OR NO DEDUCTION. ON SUCH DETERMINATION, TAX AT APPROPRIATE RATE COUL D BE DEDUCTED AT THE SOURCE (EMPHASIS SUPPLIED). THE NEXT TWO LINES ARE VERY IMPORTANT AND SEEMS TO BE THE RATIO OF THE DECISION WHICH ARE AS UNDER : IF NO SUCH APPLICATION IS FILED, INCOME TAX OF SUCH SUM IS TO BE DEDUCTED AND IT IS STATUTORY OBLIGATION OF TH E PERSON RESPONSIBLE FOR PAYING SUCH SUM TO DEDUCT TAX THEREON BEFORE MAKING PAYMENT. HE HAS TO DISCHARGE THE OBLIGATION OF TAX DEDUCTION AT SOURCE (EMPHASIS SUPPLIED). FROM THE ABOVE OBSERVATIONS, IT BECOMES CLEAR FROM THE CONTEXT OF SECTION 195 THE ABOVE SEEMS TO BE THE RATIO. IN VIEW OF THE ABOVE DISCUSSION THE REVENUE FINDS NO MERIT IN THE APPEAL FILED BY THE ASSESSEE. IN ANY CASE NO L OSS IS GOING TO OCCUR TO ASSESSEE DUE TO THIS DISALLOWANCE AS PROVI SO TO SECTION I.T.A. NO.356/MDS/2009 6 40(A)(I) IS CLEAR THAT WHENEVER THE SO CALLED TAX I S DEDUCTED AND PAID TO GOVERNMENT, THE ASSESSEE WILL GET DEDUCTION ACCORDINGLY EVEN IN SUBSEQUENT YEARS. 5. IN REPLY, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT THE PAYMENTS HAD BEEN MADE BY THE ASSESSEE IN FOREIGN E XCHANGE AS THE PAYMENTS WERE MADE TO THE FOREIGN COMPANIES. IT WAS SUBMITT ED THAT THE SERVICES WERE RENDERED OUTSIDE INDIA AND THE COMPANIES TO WHOM TH E PAYMENTS WERE MADE DID NOT HAVE ANY BRANCHES IN INDIA. IT WAS THE FUR THER SUBMISSION THAT THE NECESSARY CHARTERED ACCOUNTANTS CERTIFICATE HAD BE EN ISSUED TO CONFIRM THAT NO TAX WAS DEDUCTIBLE IN INDIA AND THE PAYMENTS WERE M ADE IN ACCORDANCE WITH THE RESERVE BANK OF INDIAS CIRCULAR AS ALSO THE CBDT C IRCULAR NO.10/2002 DATED 09- 10-2002. IT WAS THE SUBMISSION THAT THE ASSESSEE C OMPANY IS ENGAGED IN THE BUSINESS OF FREIGHT FORWARDING AND CUSTOMS HOUSE CL EARING. IT WAS THE SUBMISSION THAT THE PAYMENT WAS PARTLY TOWARDS THE FREIGHT CHARGES FOR MOVING THE GOODS AND PARTLY FOR TRANSPORTATION FOR CLEARIN G/FORWARDING AT THE FOREIGN PORTS AND THE REMITTANCES WERE FOR SERVICES RENDERE D OUTSIDE INDIA. IT WAS THE FURTHER SUBMISSION THAT THE FINDING OF THE LEARNED CIT(A) THAT ALL THE FREIGHT PAYMENTS OR CLEARING AND FORWARDING CHARGES, PAYME NTS HAVE BEEN RECEIVED ABROAD AND THE REAL WORK OF TRANSPORTATION OR CLEAR ING AND FORWARDING BY THE NON-RESIDENT HAVE BEEN DONE ABROAD ONLY, HAS NOT BE EN DISPUTED BY THE REVENUE. IT WAS THE SUBMISSION THAT THE PAYMENTS H AVING BEEN MADE FOR I.T.A. NO.356/MDS/2009 7 SERVICES RENDERED OUTSIDE INDIA, THE FOREIGN COMPAN IES WHICH DID NOT HAVE ANY BRANCHES OR BUSINESS PLACES IN INDIA AND WHICH WERE MADE IN ACCORDANCE WITH THE CHARTERED ACCOUNTANTS CERTIFICATE ISSUED AS AL SO THE CIRCULARS OF THE RESERVE BANK OF INDIA AND THE CBDT, WERE NOT LIABLE FOR DED UCTION OF TAX U/S 195 AND CONSEQUENTLY NO DISALLOWANCE BY INVOKING THE PROVIS IONS OF SECTION 40(A)(I) OF THE ACT WAS CALL FOR. HE VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED CIT(A). HE ALSO FILED A GROUND-WISE NOTE ON THE ISSUE, WHI CH IS REPRODUCED BELOW : CHART GR. NO. DEPARTMENTS GROUNDS ASSESSEES SU BMISSIONS. 1 GENERAL GENERAL________ 2.1 THE LEARNED CIT(A) ERRED IN DELETING THE C ORRECT PROVISION IS 40(A)(I). THE DISALLOWANCE OF ` 5,14,78,766/- THE DEPARTMENT ACCEPTS THAT U/S 40(A)(I) TOWARD FOREIGN OPERATIONAL THE PAY MENT IN QUESTION IS MADE PAYMENTS. FOR FOREIGN OPERATIONS. INDOPEL GARMENTS P. LTD. V. CIT (CHENNAI) 86 ITD 102 (CHENNAI) REFERRED TO BY THE CIT(A) IN PARA 5.8 IS SQUARELY APPLICABLE. (G.E. INDIA TECH 327 ITR (SC) 2.2 HAVING REGARD TO THE HON'BLE SUPREME THE SPECIAL BENCH IN PRASAD COURTS DECISION IN THE CASE OF PR ODUCTIONS IN 125 ITD 263 TRANSMISSION CORPORATION OF A.P.LTD. (SB)(MA D) HAS DEALT WITH THIS (239 ITR 587), THE LEARNED CIT(A) SPECIF IC ISSUE AND HAVE GIVEN OUGHT TO HAVE UPHELD THE ACTION OF THE GUIDELI NES. (PLEASE REFER PARA ASSESSING OFFICER. 24 TO 26). I.T.A. NO.356/MDS/2009 8 2.3 THE LEARNED CIT(A) FAILED TO NOTE THAT THE CO RRECT NAME OF THE CASE IS THE JURISDICTIONAL ITAT DECISION IN M/S. FRON TIER OFFSHORE EXPLORA- ATION (INDIA) LTD. THIS THE CASE OF M/S. FRONTIER OFFSHORE ITAT ORDER HA S BEEN EXPLANATION (INDIA) LTD. ITA 2037/ SPECIFICALLY C ONSIDERED MDS/2006 DATED 28.02.2007 SUPPORTS IN THE ABOVE C ITED SPECIAL THE ACTION OF THE ASSESSING OFFICER. 2.4 HAVING REGARD TO THE DECISION OF THE THE CA SE LAW IN 36 ITR 365 IN JURISDICTIONAL ITAT IN THE CASE OF P.C. ROY & CO. (INDIA) P. LTD. V. WEST ASIA MARITIME LTD. V. ITO, INTER- A.C. MUKHE RJEE IS NOT THAT NATIONAL TAXATION II (111 ITD 155), OF THE SUPREM E COURT BUT WHEREIN THE ITAT QUOTING THE DECISION THAT OF THE CALCUTTA HIGH OF HON'BLE SUPREME COURT IN THE CASE OF COURT. T HE ISSUE RAISED IN P.C. ROY & CO. (INDIA) P. LTD. V. A.C. THIS GROUN D IS ALSO DEALT MUKHERJEEE, ITO (36 ITR 365) HAS WITH BY THE SPE CIAL BENCH OBSERVED THAT IF CHARGEABLE UNDER THE THOUGH 36 ITR 365 (CAL) PROVIGIONS OF THE ACT MEANS ACTUALLY AS SUCH HAS NOT BEEN REFE- LIABLE TO TAX. IN OTHER WORDS, IF THE SUM RRED T O IN THE SPECIAL CONTEMPLATED IS TAXABLE INCOME, THE BENCH CITED SUPRA. DIFFICULTY IS UNDOUBTEDLY CREATED AS TO COMPLYING WITH THE PROVISIONS OF THE SECTIONS, THE LEARNED CIT(A) OUGHT TO HAVE CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 3. FOR THESE AND OTHER GROUNDS THAT MAY GENERAL. BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE LEARNED CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. IT WAS THE SUBMISSION THAT THE DECISION IN THE CASE OF PRASAD PRODUCTIONS BY THE SPECIAL BENCH OF THE ITAT REPORTED IN 125 ITD 263 ( SB) (MAD) SQUARELY COVERS THE ASSESSEES CASE. IT WAS THE SUBMISSION THAT TH E CASE LAWS AS REFERRED TO BY I.T.A. NO.356/MDS/2009 9 THE REVENUE WERE CONSIDERED BY THE DECISION OF THE SPECIAL BENCH OF THE ITAT IN THE CASE OF PRASAD PRODUCTIONS. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE ASSESSING OFFICER HAS DISALLOWED THE OPERATION PAYMENTS TO THE NON-RESIDENTS. THE ASSESSMENT ORDE R CLEARLY RECOGNIZES THE PAYMENTS TO HAVE BEEN MADE TO NON-RESIDENTS. THE A SSESSING OFFICER HAS BASICALLY DISALLOWED THE CLAIM OF EXPENDITURE ON TH E GROUND THAT THE POWER TO DECIDE WHETHER TAX IS DEDUCTIBLE OR NOT ON ANY PAYM ENT TO A NON-RESIDENT CANNOT BE EXERCISED SUO MOTU BY THE ASSESSEE ITSELF UNDER THE EXISTING LAWS. HOWEVER, A PERUSAL OF THE REPLY FILED BY THE ASSESSEE BEFORE T HE ASSESSING OFFICER DATED 14- 12-2007 CLEARLY SHOWS THAT THE ASSESSEE HAS SPECIFI CALLY CONFIRMED THAT THE PAYMENTS WERE MADE TO THE FOREIGN COMPANIES FOR SER VICES RENDERED OUTSIDE INDIA AND THE COMPANIES DID NOT HAVE ANY BRANCH OR BUSINESS PLACE IN INDIA. THE ASSESSEE HAS ALSO CATEGORICALLY CONFIRMED THAT THE CHARTERED ACCOUNTANTS CERTIFICATE HAS BEEN ISSUED TO CONFIRM THAT NO TAX IS DEDUCTIBLE IN INDIA AND THE PAYMENT IS IN ACCORDANCE WITH RBI CIRCULAR NO. 03 A ND THE CBDT CIRCULAR NO. 10/2002 DATED 19-10-2002. THESE FACTS AS CONFIRMED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER REMAIN UNDISPUTED AND UN-REBUTTED . ONCE IT IS FOUND THAT THE PAYMENTS HAVE BEEN MADE TO FOREIGN COMPANIES FOR TH EIR SERVICES RENDERED OUTSIDE INDIA AND THAT SUCH FOREIGN COMPANIES DO NO T HAVE ANY BRANCH OR PLACE IN INDIA, THEN THE INCOME OF SUCH FOREIGN COMPANIES WOULD OBVIOUSLY NOT BE I.T.A. NO.356/MDS/2009 10 TAXABLE IN INDIA. IF THE INCOME OF THE FOREIGN COM PANY IS NOT TAXABLE IN INDIA, THEN AS PER THE PROVISIONS OF SEC. 195 AS THE SUM I S NOT CHARGEABLE UNDER THE PROVISIONS OF THIS ACT THE SAID SECTION CANNOT HAVE AN APPLICATION. THIS VIEW OF OURS FINDS SUPPORT FROM THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF G.E. INDIA TECH REPORTED IN 327 ITR 456 (SC) WHEREIN THE HON'BLE SUPREME COURT HAS HELD AS FOLLOWS : AS STATED HEREINABOVE, SECTION 195(1) USES THE EXPRESSION SUM CHARGEABLE UNDER THE PROVISIONS OF THE ACT. WE NEED TO GIVE WEIGHTAGE TO THOSE WORDS. FURTHER, SECTION 195 USES THE WORD PAYER AND NOT THE WORD ASSESSEE. THE PAYER IS NOT AN ASSESSEE. TH E PAYER BECOMES AN ASSESSEE-IN-DEFAULT ONLY WHEN HE F AILS TO FULFIL THE STATUTORY OBLIGATION UNDER SECTION 19 5(1) IF THE PAYMENT DOES NOT CONTAIN THE ELEMENT OF INCOME THE PAYER CANNOT BE MADE LIABLE. HE CANNOT BE DECLARED TO BE AN ASSESSEE-IN-DEFAULT. IN THE CIRCUMSTANCES, RESPECTFULLY FOLLOWING THE PR INCIPLES AS LAID DOWN BY THE HON'BLE SUPREME COURT, AS IT IS FOUND THAT THE PAYM ENTS MADE BY THE ASSESSEE BEING TO A FOREIGN COMPANY FOR SERVICES RENDERED OU TSIDE INDIA AND THE FOREIGN COMPANY HAVING NO BRANCHES OR BUSINESS PLACE IN IND IA, THE PAYMENTS MADE BY THE ASSESSEE TO THE FOREIGN COMPANIES ARE NOT LIABL E FOR DEDUCTION AT SOURCE U/S 195 OF THE ACT. CONSEQUENTLY, THE SAID EXPENDITURE IS NOT DISALLOWABLE BY INVOKING THE PROVISIONS OF SECTION 40(A)(I) OF THE ACT. IN THE CIRCUMSTANCES THE I.T.A. NO.356/MDS/2009 11 ORDER OF THE LEARNED CIT(A) ON THIS ISSUE STANDS CO NFIRMED. IN THE CIRCUMSTANCES, THE APPEAL OF THE REVENUE IS DISMISS ED. 7. THE ORDER WAS PRONOUNCED IN THE COURT ON 27/05/2 011. SD/- SD/- (ABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 27 TH MAY, 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE