ACIT, New Delhi V. M/s. Hermes India Retails & Distributors Pvt. Ltd., New Delhi

ITA 4315/DEL/2014

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 2912 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2021
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: I1
• Assessment Year: 2009-2010
• Appeal Filed On: 07-08-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Recovery proceedings; Transfer pricing; International transaction; Source of fund; Additional evidence; TDS; Set aside
• Section: 133(6); 250; 251; 13; 22; 92CA; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: I-1 NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER [THROUGH VIDEO CONFERENCING] ITA NO.4315/DEL./2014 ASSESSMENT YEAR: 2009-10 ACIT, CIRCLE-12(1), NEW DELHI VS. M/S. HERMES INDIA RETAILS & DISTRIBUTORS PVT. LTD., G/H 5-9, SHOPPING ARCAD, THE OBEROI, DR. ZAKIR HUSSAIN MARG, NEW DELHI PAN :AADCK2054N (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THIS APPEAL BY THE DEPUTY COMMISSIONER OF INCOME-TA X, CIRCLE-12(1), NEW DELHI [IN SHORT THE ASSESSING OF FICER(AO)] IS DIRECTED AGAINST ORDER DATED 05/05/2014 PASSED BY T HE CIT (APPEALS)-XX, NEW DELHI [IN SHORT THE LD. CIT(A)] THE CASE OF M/S APPELLANT BY SHRI SURENDERPAL, CIT(DR) RESPONDENT BY SH. SALIL AGARWAL, ADV. SH. MADHUR AGARWAL, ADV. SH. SHAILESH GUPTA, CA & SH. SANJEEV JAIN, CA DATE OF HEARING 21.01.2021 DATE OF PRONOUNCEMENT 23.02.2021 2 ITA NO.4315/DEL./2014 HERMES INDIA RETAIL AND DISTRIBUTORS PRIVATE LIMITE D (IN SHORT THE ASSESSEE) FOR ASSESSMENT YEAR 2009-10 RAISING FOLL OWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN IN LAW, THE LD. CIT(A) HAS ERRED IN ACCEPTING EVIDENCE PROD UCED AT APPELLATE STAGE, AS THE ASSESSEE HAD FAILED TO DEMONSTRATE THAT ITS CASE WAS COVERED UNDER ANY OF THE CONDITIONS MENTIONED IN CLAUSE(A) TO (D) OF RULE 46 A OF THE INCOME TAX RULES. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN TREATING THE COMPARABLE ALTA MODA AS NON-COMPARABLE ALTHOUGH IT IS A ROBUST COMPARABLE IN THE CASE OF ASSESSEE AND THEREBY DELE TING TP ADDITION OF RS.7,24,81,076/-. 3. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. CIT(A) HAS ERRED IN ACCEPTING BILLS AND VOUCHER S WHICH THE ASSESSEE HAD FAILED TO SUBMIT DURING TRAN SFER PRICING PROCEEDINGS AND ALSO ERRED IN DELETING TP ADJUSTMENT OF RS.5,32,25,677/- IN THIS RESPECT. 4. THE APPELLANT CRAVES LEAVE, TO ADD, ALTER OR AME ND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF THE HE ARING. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSE SSEE IS ENGAGED IN IMPORTING AND SELLING OF PRODUCTS OF BRA ND NAMELY HERMES, IN THE INDIAN MARKET. IN RELEVANT YEAR UN DER CONSIDERATION, THE ASSESSEE SOLD PRODUCTS THROUGH I TS OWN STORE LOCATED AT OBEROI HOTEL, NEW DELHI. THE ASSESSEE FILED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 30/09/20 09, DECLARING LOSS OF RS.99,85,343/-. THE RETURN OF INC OME FILED BY THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND A CCORDINGLY STATUTORY NOTICES UNDER THE INCOME-TAX ACT, 1961 (I N SHORT THE ACT) WERE ISSUED AND COMPLIED WITH. IN VIEW OF THE INTERNATIONAL TRANSACTIONS CARRIED OUT BY THE ASSESSEE, THE LD. A SSESSING OFFICER REFERRED THE MATTER OF DETERMINATION OF THE ARMS-L ENGTH PRICE OF THOSE INTERNATIONAL TRANSACTIONS TO THE LEARNED TRA NSFER PRICING 3 ITA NO.4315/DEL./2014 OFFICER (TPO). THE LEARNED TPO AFTER TAKING INTO CO NSIDERATION TRANSFER PRICING STUDY OF THE ASSESSEE AND OTHER EV IDENCES, PROPOSED TRANSFER PRICING ADJUSTMENT OF 12,57,06,753/- IN HER ORDER DATED 29/01/2013. THE LEARNED ASSESSING OFFIC ER PASSED THE IMPUGNED ASSESSMENT ORDER ON 03/05/2013 AFTER M AKING ADDITIONS INCLUDING THE TRANSFER PRICING ADJUSTMENT PROPOSED BY THE LEARNED TPO AND DISALLOWANCE OUT OF MISCELLANEO US EXPENSES OF 20,428/-. AGGRIEVED WITH THE ORDER OF THE ASSESSIN G OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED CI T(A), WHO PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVE D WITH THE ORDER OF THE LD. CIT(A), THE REVENUE (THROUGH THE A SSESSING OFFICER) IS IN APPEAL BEFORE THE INCOME-TAX APPELLA TE TRIBUNAL (IN SHORT THE TRIBUNAL), RAISING THE GROUNDS AS REPRO DUCED ABOVE. 3. BOTH THE PARTIES APPEARED BEFORE THE TRIBUNAL THRO UGH VIDEO CONFERENCING FACILITY AND FILED PAPERS ELECTRONICAL LY. 4. THE FIRST GROUND OF THE APPEAL IS AGAINST ADMISSIO N OF ADDITIONAL EVIDENCES BY THE LEARNED CIT(A). BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTED THAT LD. CIT(A) HAS ADMITTED ADDITIONAL EVIDENCES IN VIOLATI ON OF RULE 46A OF INCOME TAX RULES, 1962 (IN SHORT THE RULES). A CCORDING TO HIM, THE ASSESSEE APPEARED 11 TIMES BEFORE THE LEAR NED TPO DURING TRANSFER PRICING PROCEEDINGS, WHICH LASTED F OR AROUND ONE YEAR, BUT FAILED TO PRODUCE THE EVIDENCES BEFORE TH E LEARNED TPO. HE SUBMITTED THAT THE ASSESSEE HAS NOT DEMONSTRATED BEFORE THE LEARNED CIT(A) AS HOW IT FULFILLED REQUIREMENT OF R ULE 46A OF THE RULES. THE LEARNED DR RELIED ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF MANISH BUILDWELL PVT. LTD . REPORTED IN 245 CTR 397 AND JANSAMPARK ADVERTISING AND MARKETI NG PRIVATE 4 ITA NO.4315/DEL./2014 LIMITED REPORTED IN 375 ITR 373 AND SUBMITTED THAT AFTER ADMISSION OF THE ADDITIONAL EVIDENCES, THOSE EVIDEN CES SHOULD HAVE BEEN REFERRED TO THE ASSESSING OFFICER/TPO FOR HIS COMMENTS ON MERIT. 4.1 ON THE CONTRARY, THE LEARNED COUNSEL OF THE ASSESS EE RELIED ON THE FINDING OF THE LEARNED CIT(A) AND SUBMITTED THAT BEFORE ADMITTING, THE LD. CIT(A) HAD SENT THE ADDITIONAL E VIDENCES TO LEARNED ASSESSING OFFICER FOR HIS COMMENTS, AND THE LEARNED AO/TPO NOT ONLY OBJECTED TO ADMISSIBILITY OF THOSE EVIDENCES ONLY, BUT ALSO GIVEN COMMENTS ON MERIT OF THE ADDIT ION AND THUS THERE IS DUE COMPLIANCE OF THE DECISION OF HONBLE HIGH COURT IN THE CASE OF MANISH BUILDWELL P. LTD. (SUPRA). AS F AR AS ELIGIBILITY UNDER RULE 46A OF THE RULES IS CONCERNED, THE LEARN ED COUNSEL REFERRED TO PAGE 76 TO 120 OF THE PAPER-BOOK AND SU BMITTED THAT QUERY REGARDING THE COMPARABLE COMPANY M/S ALTA MOD A WAS MADE ON 28/01/2013 BY THE LEARNED TPO I.E. ONE DAY BEFORE PASSING OF TRANSFER PRICING ORDER AND THUS NO SUFFI CIENT OPPORTUNITY WAS PROVIDED BY THE TPO. HE SUBMITTED T HAT THE ASSESSING OFFICER/LEARNED TPO MADE THE ORDER WITHOU T PROVIDING SUFFICIENT OPPORTUNITY TO THE ASSESSEE FOR PRODUCIN G EVIDENCES AND THEREFORE IN TERMS OF RULE 46A(1)(D) OF RULES, THE ASSESSEE IS ELIGIBLE FOR PRODUCING ADDITIONAL EVIDENCES BEFORE THE LD. CIT(A). HE SUBMITTED THAT IN REMAND PROCEEDINGS, THE LD. TP O HAS COMMENTED ON THE ISSUE OF SELECTION OF COMPARABLE, NAMELY, ALTA MODA. HE FURTHER SUBMITTED THAT THE LD. CIT(A) HAS ALREADY ANALYZED THE ADDITIONAL EVIDENCES AND COMPLIED WITH THE DECISION OF HONBLE HIGH COURT IN THE CASE OF JANSAMPARK ADV ERTISING & 5 ITA NO.4315/DEL./2014 MARKETING PVT. LTD. (SUPRA), THEREFORE, NO REQUIRE MENT OF SENDING THE SAME AGAIN TO EITHER THE LEARNED AO OR THE TPO. 4.2 WE HAVE HEARD RIVAL SUBMISSION OF THE PARTIES ON T HE ISSUE IN DISPUTE AND PERUSED THE RELEVANT MATERIAL, INCLU DING THE FINDING OF THE LEARNED CIT(A) ON ADMISSIBILITY OF A DDITIONAL EVIDENCES. THE LD. CIT(A) IN PARA 4.1 HAS REFERRED THAT ADDITIONAL EVIDENCES PRODUCED BY THE ASSESSEE IN PAPER-BOOKS 1 TO 5 WERE FORWARDED TO THE LEARNED TPO FOR HIS COMMENTS. THE LEARNED TPO OBJECTED TO THE ADMISSIBILITY OF THE ADDITIONAL EVI DENCES, ON THE GROUND THAT THE ASSESSEE FAILED TO PRODUCE EVIDENCE S DURING THE TRANSFER PRICING PROCEEDINGS AND, THEREFORE, CONDIT IONS FOR INVOKING RULE 46A OF THE RULES ARE NOT FULFILLED BY THE ASSESSEE. THE LEARNED CIT(A), HOWEVER, RELIED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S QUARK SYSTEMS PRIVATE L IMITED (SUPRA) AND DECISION OF THE HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF BABULAL JAIN (SUPRA). THE LD. CIT(A) PERUSED THE CHART OF CHRONOLOGICAL DATES DURING TRANSFER PRICIN G PROCEEDINGS , WHICH WAS PRODUCED BY THE ASSESSEE AND CONCLUDED TH AT NO SUFFICIENT OPPORTUNITY WAS PROVIDED TO THE ASSESSEE AND, THEREFORE, HE ADMITTED ADDITIONAL EVIDENCE. THE REL EVANT FINDING OF THE LEARNED CIT(A) IS REPRODUCED AS UNDER: 4.1.4 THE SHOW CAUSE NOTICE DATED 17/01/2013 PROP OSING (I)KEWAL KIRAN CLOTHING LTD AS COMPARABLE WITH PROP OSED GP RATE OF 60.98% (II)REJECTING 8 COMPARABLES USED IN TP STUDY & (III)ASKING FOR DETAILS OF REIMBURSEMENT OF EXPENSES WAS RECEIVED B Y THE APPELLANT ONLY ON 19/01/2013 THROUGH MAIL. WRITTEN SUBMISSION REJECTING KEWAL KIRAN AS A COMPARABLE AND SAMPLE COPIES OF RE -IMBURSEMENT OF EXPENSES WERE FILED BY THE APPELLANT ON 28/01/20 13. NEW COMPARABLE NAMELY ALTA MODA GARMENTS LTD WAS PROPOS ED BY TPO ON 28/01/2013 VIDE ENTRY IN ORDER SHEET. WRITTEN SU BMISSION WAS FILED BY APPELLANT VIDE LETTER DATED 29/01/2013. TH E ORDER U/S 6 ITA NO.4315/DEL./2014 92CA(3) DETERMINING THE TP ADJUSTMENT OF RS. 12.57 CRORES WAS PASSED BY TPO ON 29/01/2013. THE SEQUENCE OF EVENTS SHOWS THAT THE APPELLANT WAS NOT GIVEN PROPER OPPORTUNITY TO FURNISH EVIDENCE DURING TP PROCEEDINGS. DURING THE APPELLATE PROCEED INGS, THE APPELLANT HAS SUBMITTED FIVE PAPER BOOKS. THE SUBMI SSION OF THE APPELLANT DATED 18.11.2013 ALONG WITH THE COPIES OF ALL THE PAPER BOOKS WERE FORWARDED TO THE TPO VIDE THE LETTER F.N O. CIT(A)- XX/2013-14/455 DATED 19.11.2013. IN RESPONSE TO IT, THE TPO HAS SUBMITTED THE REMAND REPORT F.NO. DDIT/TPO I(5)/201 3-14/175 DATED 14/02/2014 AS DISCUSSED ABOVE. CONSIDERING TH E FACTS OF THE CASE, I AM OF THE OPINION THAT THE TPO HAS PASSED T HE ORDER U/S 92CA(3) WITHOUT GIVING SUFFICIENT OPPORTUNITY TO TH E APPELLANT TO ADDUCE EVIDENCE AND THE PRESENT CASE FALLS WITHIN T HE AMBIT OF THE EXCEPTIONAL CIRCUMSTANCES AS SPECIFIED IN RULE 46A( L)(D). IN VIEW OF THE ABOVE, I HOLD THAT THE ADDITIONAL EVIDENCE IS R EQUIRED TO BE ADMITTED AS PER THE PROVISION OF RULE 46A AND ALSO IN THE INTEREST OF JUSTICE. THEREFORE, THE ADDITIONAL EVIDENCES ARE AD MITTED IN THIS CASE. 4.3 ON PERUSAL OF THE ORDER SHEET OF TRANSFER PRICING PROCEEDINGS, IT IS UNDISPUTED THAT QUERY REGARDING THE COMPARABLE M/S ALTA MODA WAS MADE ONLY ONE DAY PRIO R TO THE PASSING OF THE ORDER BY THE LD. TPO AND THUS IT IS EVIDENT THAT NO SUFFICIENT OPPORTUNITY WAS PROVIDED TO THE ASSESSEE TO ADDUCE EVIDENCE IN SUPPORT TO CHALLENGE OF THE COMPARABLE, NAMELY, M/S ALTA MODA. THUS, WE DO NOT FIND ANY ERROR IN THE FI NDING OF THE LD. CIT(A) THAT THE ASSESSEE IS ELIGIBLE FOR FILING ADD ITIONAL EVIDENCES UNDER RULE 46A(1)(D) OF THE RULES. 4.4 HOWEVER, IN VIEW OF THE DECISION OF THE HONBLE DE LHI HIGH COURT IN THE CASE OF MANISH BULDWELL PRIVATE LIMITE D (SUPRA), THE LD. CIT(A) WAS REQUIRED TO FORWARD THE ADDITIONAL E VIDENCES FOR THE COMMENT OF THE LEARNED AO/TPO ON MERIT. THE HON BLE DELHI HIGH COURT IN THE CASE OF MANISH BUILDABLE PRIVATE LIMITED HAS HELD AS UNDER: 7 ITA NO.4315/DEL./2014 22. AS WE HAVE WITH THE CONSENT OF THE LEARNED COUNSEL, HEARD THEM ON MERITS, WE PROCEED TO DECIDE THE AFORESAID SUBSTANTIAL QUESTIONS OF LAW. SINCE THE CIT(A) HIMSELF REFERS T O R. 46A AND HAS ALSO ADMITTED THAT THE CONFIRMATION LETTERS ADDUCED BY THE ASSESSEE BEFORE HIM WERE TECHNICALLY FRESH EVIDENCE, IT IS N OT POSSIBLE TO ACCEPT THE PLEA OF THE LEARNED COUNSEL FOR THE ASSE SSEE THAT THE CIT(A), IN EXAMINING THE CONFIRMATION LETTERS, WAS EXERCISING HIS INDEPENDENT POWERS OF ENQUIRY UNDER SUB-S. (4) OF S . 250 OF THE IT ACT. IT IS TRUE THAT THE CIT(A) AS FIRST APPELLATE AUTHORITY HAS COTERMINOUS POWERS OVER THE SOURCES OF INCOME CONST ITUTING THE SUBJECT-MATTER OF THE ASSESSMENT, EXCEPT THE POWER TO TACKLE NEW SOURCES OF INCOME NOT CONSIDERED BY THE AO, AND CAN DO WHAT THE AO CAN DO AND CAN DIRECT THE AO TO DO WHAT HE HAS F AILED TO DO, AS HELD BY THE SUPREME COURT IN THE CASE OF CIT VS. KA NPUR COAL SYNDICATE (1964) 53 ITR 225 (SC) BUT IN THIS CASE, THE CIT(A) DID NOT EXERCISE THIS RIGHT. THIS POWER, WHICH IS RECOGNIZE D IN SUB-S. (4) OF S. 250, HAS TO BE EXERCISED BY THE CIT(A) AND THERE SH OULD BE MATERIAL ON RECORD TO SHOW THAT HE, WHILE DISPOSING OF THE A PPEAL, HAD DIRECTED FURTHER ENQUIRY AND CALLED FOR THE CONFIRM ATION LETTERS FROM THE ASSESSEE EVEN IN RESPECT OF RECEIPT OF MONIES F ROM CUSTOMERS BY WAY OF CHEQUES. RULE 46A IS A PROVISION IN THE IT R ULES, 1962 WHICH IS INVOKED, ON THE OTHER HAND, BY THE ASSESSEE WHO IS IN AN APPEAL BEFORE THE CIT(A). ONCE THE ASSESSEE INVOKES R. 46A AND PRAYS FOR ADMISSION OF ADDITIONAL EVIDENCE BEFORE THE CIT(A), THEN THE PROCEDURE PRESCRIBED IN THE SAID RULE HAS TO BE SCR UPULOUSLY FOLLOWED. THE FACT THAT SUB-S. (4) OF S. 250 CONFER S POWERS ON THE CIT(A) TO CONDUCT AN ENQUIRY AS HE THINKS FIT, WHIL E DISPOSING OF THE APPEAL, CANNOT BE RELIED UPON TO CONTEND THAT THE P ROCEDURAL REQUIREMENTS OF R. 46A NEED NOT BE COMPLIED WITH. I F SUCH A PLEA OF THE ASSESSEE IS ACCEPTED, IT WOULD REDUCE R. 46A TO A DEAD LETTER BECAUSE IT WOULD THEN BE OPEN TO EVERY ASSESSEE TO FURNISH ADDITIONAL EVIDENCE BEFORE THE CIT(A) AND THEREAFTE R CONTEND THAT THE EVIDENCE SHOULD BE ACCEPTED AND TAKEN ON RECORD BY THE CIT(A) BY VIRTUE OF HIS POWERS OF ENQUIRY UNDER SUB-S. (4) OF S. 250. THIS WOULD MEAN IN TURN THAT THE REQUIREMENT OF RECORDING REAS ONS FOR ADMITTING THE ADDITIONAL EVIDENCE, THE REQUIREMENT OF EXAMINI NG WHETHER THE CONDITIONS FOR ADMITTING THE ADDITIONAL EVIDENCE AR E SATISFIED, THE REQUIREMENT THAT THE AO SHOULD BE ALLOWED A REASONA BLE OPPORTUNITY OF EXAMINING THE EVIDENCE ETC. CAN BE THROWN TO THE WINDS, A POSITION WHICH IS WHOLLY UNACCEPTABLE AND MAY RESUL T IN UNACCEPTABLE AND UNJUST CONSEQUENCES. THE FUNDAMENT AL RULE WHICH IS VALID IN ALL BRANCHES OF LAW, INCLUDING IT LAW, IS THAT THE ASSESSEE SHOULD ADDUCE THE ENTIRE EVIDENCE IN HIS POSSESSION AT THE EARLIEST POINT OF TIME. THIS ENSURES FULL, FAIR AND DETAILED ENQUIRY AND VERIFICATION. A SEVEN-JUDGE BENCH OF THE SUPREME CO URT IN KESHAV MILLS CO. LTD. VS. CIT (1965) 56 ITR 365 (SC) HAD O BSERVED AS UNDER: 8 ITA NO.4315/DEL./2014 'PROCEEDINGS TAKEN FOR THE RECOVERY OF TAX UNDER TH E PROVISIONS OF THE ACT ARE NATURALLY INTENDED TO BE OVER WITHOUT UNNEC ESSARY DELAY, AND SO, IT IS THE DUTY OF THE PARTIES, BOTH THE DEP ARTMENT AND THE ASSESSEE, TO LEAD ALL THEIR EVIDENCE AT THE STAGE W HEN THE MATTER IS IN CHARGE OF THE ITO.' 23. IT IS FOR THE AFORESAID REASON THAT R. 46A STARTS I N A NEGATIVE MANNER BY SAYING THAT AN APPELLANT BEFORE THE CIT(A ) SHALL NOT BE ENTITLED TO PRODUCE BEFORE HIM ANY EVIDENCE, WHETHE R ORAL OR DOCUMENTARY, OTHER THAN THE EVIDENCE ADDUCED BY HIM BEFORE THE AO. AFTER MAKING SUCH A GENERAL STATEMENT, WHICH IS IN CONSONANCE WITH THE PRINCIPLE STATED IN THE ABOVE JUDGMENT, EX CEPTIONS HAVE BEEN CARVED OUT THAT IN CERTAIN CIRCUMSTANCES IT WO ULD BE OPEN TO THE CIT(A) TO ADMIT ADDITIONAL EVIDENCE. THEREFORE, ADD ITIONAL EVIDENCE CAN BE PRODUCED AT THE FIRST APPELLATE STAGE WHEN C ONDITIONS STIPULATED IN THE R. 46A ARE SATISFIED AND A FINDIN G IS RECORDED. RULE 46A READS : '46A. PRODUCTION OF ADDITIONAL EVIDENCE BEFORE THE DEPUTY COMMISSIONER (APPEALS) AND COMMISSIONER (APPEALS). (1) THE APPELLANT SHALL NOT BE ENTITLED TO PRODUCE BEFORE T HE DEPUTY COMMISSIONER (APPEALS) OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS), ANY EVIDENCE, WHETHER ORAL OR DOCUMENTAR Y, OTHER THAN THE EVIDENCE PRODUCED BY HIM DURING THE COURSE OF P ROCEEDINGS BEFORE THE ASSESSING OFFICER, EXCEPT IN THE FOLLOWI NG CIRCUMSTANCES, NAMELY : (A) WHERE THE ASSESSING OFFICERHAS REFUSED TO ADMIT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED; OR (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE ASSESSING OFFICER; OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING BEFORE THE ASSESSING OFFICERANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL; OR (D) WHERE THE ASSESSING OFFICERHAS MADE THE ORDER A PPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE APPELL ANT TO ADDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL. (2) NO EVIDENCE SHALL BE ADMITTED UNDER SUB-R. (1) UNLESS THE DEPUTY COMMISSIONER (APPEALS) OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS) RECORDS IN WRITING THE REASONS FOR ITS AD MISSION. (3) THE DEPUTY COMMISSIONER (APPEALS) OR, AS THE CA SE MAY BE, THE COMMISSIONER (APPEALS) SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE 9 ITA NO.4315/DEL./2014 PRODUCED UNDER SUB-R. (1) UNLESS THE ASSESSING OFFI CERHAS BEEN ALLOWED A REASONABLE OPPORTUNITY (A) TO EXAMINE THE EVIDENCE OR DOCUMENT OR TO CROSS -EXAMINE THE WITNESS PRODUCED BY THE APPELLANT, OR (B) TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WITN ESS IN REBUTTAL OF THE ADDITINAL EVIDENCE PRODUCED BY THE APPELLANT . (4) NOTHING CONTAINED IN THIS RULE SHALL AFFECT THE POWER OF THE DEPUTY COMMISSIONER (APPEALS) OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS) TO DIRECT THE PRODUCTION OF ANY DOCUMENT, OR THE EXAMINATION OF ANY WITNESS, TO ENABLE HIM TO DISPOS E OF THE APPEAL, OR FOR ANY OTHER SUBSTANTIAL CAUSE INCLUDING THE EN HANCEMENT OF THE ASSESSMENT OR PENALTY [WHETHER ON HIS OWN MOTION OR ON THE REQUEST OF THE ASSESSING OFFICERUNDER CL. (A) OF SUB-S. (1) OF S. 251 OR THE IMPOSITION OF PENALTY UNDER S. 271.' WE ARE HIGHLIGHTING THESE ASPECTS ONLY TO PRESS HOM E THE POINT THAT THE CONDITIONS PRESCRIBED IN R. 46A MUST BE SHOWN T O EXIST BEFORE ADDITIONAL EVIDENCE IS ADMITTED AND EVERY PROCEDURA L REQUIREMENT MENTIONED IN THE RULE HAS TO BE STRICTLY COMPLIED W ITH SO THAT THE RULE IS MEANINGFULLY EXERCISED AND NOT EXERCISED IN A RO UTINE OR CURSORY MANNER. A DISTINCTION SHOULD BE RECOGNIZED AND MAIN TAINED BETWEEN A CASE WHERE THE ASSESSEE INVOKES R. 46A TO ADDUCE ADDITIONAL EVIDENCE BEFORE THE CIT(A) AND A CASE WHERE THE CIT (A), WITHOUT BEING PROMPTED BY THE ASSESSEE, WHILE DEALING WITH THE APPEAL, CONSIDERS IT FIT TO CAUSE OR MAKE A FURTHER ENQUIRY BY VIRTUE OF THE POWERS VESTED IN HIM UNDER SUB-S. (4) OF S. 250. IT IS ONLY WHEN HE EXERCISES HIS STATUTORY SUO MOTU POWER UNDER THE AB OVE SUB-SECTION THAT THE REQUIREMENTS OF R. 46A NEED NOT BE FOLLOWE D. ON THE OTHER HAND, WHENEVER THE ASSESSEE WHO IS IN APPEAL BEFORE HIM INVOKES R. 46A, IT IS INCUMBENT UPON THE CIT(A) TO COMPLY WITH THE REQUIREMENTS OF THE RULE STRICTLY. 24. IN THE PRESENT CASE, THE CIT(A) HAS OBSERVED THAT T HE ADDITIONAL EVIDENCE SHOULD BE ADMITTED BECAUSE THE ASSESSEE WA S PREVENTED BY ADDUCING THEM BEFORE THE AO. THIS OBSERVATION TA KES CARE OF CL. (C) OF SUB-R. (1) OF R. 46A. THE OBSERVATION OF THE CIT(A) ALSO TAKES CARE OF SUB-R. (2) UNDER WHICH HE IS REQUIRED TO RE CORD HIS REASONS FOR ADMITTING THE ADDITIONAL EVIDENCE. THUS, THE REQUIR EMENT OF SUB-RS. (1) AND (2) OF R. 46A HAVE BEEN COMPLIED WITH. HOWE VER, SUB-R. (3) WHICH INTERDICTS THE CIT(A) FROM TAKING INTO ACCOUN T ANY EVIDENCE PRODUCED FOR THE FIRST TIME BEFORE HIM UNLESS THE A O HAS HAD A REASONABLE OPPORTUNITY OF EXAMINING THE EVIDENCE AN D REBUT THE SAME, HAS NOT BEEN COMPLIED WITH. THERE IS NOTHING IN THE ORDER OF THE CIT(A) TO SHOW THAT THE AO WAS CONFRONTED WITH THE CONFIRMATION LETTERS RECEIVED BY THE ASSESSEE FROM THE CUSTOMERS WHO PAID THE 10 ITA NO.4315/DEL./2014 AMOUNTS BY CHEQUES AND ASKED FOR COMMENTS. THUS, THE END RESULT HAS BEEN THAT ADDITIONAL EVIDENCE WAS ADMITT ED AND ACCEPTED AS GENUINE WITHOUT THE AO FURNISHING HIS C OMMENTS AND WITHOUT VERIFICATION. SINCE THIS IS AN INDISPENS ABLE REQUIREMENT, WE ARE OF THE VIEW THAT THE TRIBUNAL O UGHT TO HAVE RESTORED THE MATTER TO THE CIT(A) WITH THE DIR ECTION TO HIM TO COMPLY WITH SUB-R. (3) OF R. 46A. IN OUR OPINION AND WITH RESPECT, THE ERROR COMMITTED BY THE TRIBUNAL IS THA T IT PROCEEDED TO MIX UP THE POWERS OF THE CIT(A) UNDER SUB- S. (4) O F S. 250 WITH THE POWERS VESTED IN HIM UNDER R. 46A. THE TRIBUNAL SEE MS TO HAVE OVERLOOKED SUB-R. (4) OF R. 46A [SIC-S. 250] WHICH ITSELF TAKES NOTE OF THE DISTINCTION BETWEEN THE POWERS CONFERRED BY THE CIT(A) UNDER THE STATUTE WHILE DISPOSING OF THE ASSESSEES APPEAL AN D THE POWERS CONFERRED UPON HIM UNDER R. 46A. THE TRIBUNAL ERRED IN ITS INTERPRETATION OF THE PROVISIONS OF R. 46A VIS--VI S S. 250(4). ITS VIEW THAT SINCE IN ANY CASE THE CIT(A), BY VIRTUE OF HIS COTERMINOUS POWERS OVER THE ASSESSMENT ORDER, WAS EMPOWERED TO CALL FOR ANY DOCUMENT OR MAKE ANY FURTHER ENQUIRY AS HE THINKS F IT, THERE WAS NO VIOLATION OF R. 46A IS ERRONEOUS. THE TRIBUNAL APPE ARS TO HAVE NOT APPRECIATED THE DISTINCTION BETWEEN THE TWO PROVISI ONS. IF THE VIEW OF THE TRIBUNAL IS ACCEPTED, IT WOULD MAKE R. 46A OTIO SE AND IT WOULD OPEN UP THE POSSIBILITY OF THE ASSESSEES CONTENDIN G THAT ANY ADDITIONAL EVIDENCE SOUGHT TO BE INTRODUCED BY THEM BEFORE THE CIT(A) CANNOT BE SUBJECTED TO THE CONDITIONS PRESCR IBED IN R. 46A BECAUSE IN ANY CASE THE CIT(A) IS VESTED WITH COTER MINOUS POWERS OVER THE ASSESSMENT ORDERS OR POWERS OF INDEPENDENT ENQUIRY UNDER SUB-S. (4) OF S. 250. THAT IS A CONSEQUENCE WHICH C ANNOT AT ALL BE COUNTENANCED. (EMPHASIS SUPPLIED EXTERNALLY) 4.5 THE ASSESSEE HAS PRODUCED ADDITIONAL EVIDENCE BEFO RE THE LD. CIT(A), WHICH WERE FORWARDED TO THE LEARNED TPO . THE LD. CIT(A) IN THE IMPUGNED ORDER HAS REPRODUCED THE COM MENT OF THE TPO ON THE ISSUE OF SELECTION OF COMPARABLE M/S ALT A MODA AND REIMBURSEMENT OF EXPENSES. THE OBJECTION OF THE TPO ON THE ISSUE OF SELECTION OF M/S ALTA MODA IS EXTRACTED AS UNDER : COMMENTS OF THE TPO: IN THE ANNUAL REPORT OF THE ALTA MODA GARMENTS, ALT HOUGH IT IS MENTIONED AT ONE PLACE THAT ASSESSEE IS IN BUSINESS OF CONSTRUCTION, BUT IN THE SAME BREATH IN DIRECTORS REPORT ITS SA YS THE COMPANY PRINCIPALLY ENGAGED TO CARRY ON THE BUSINESS OF TRA DING IN HIGH 11 ITA NO.4315/DEL./2014 FASHION GARMENTS OF VARIOUS ITALIAN BRANDS AND DIFF ERENT KINDS OF ORNAMENTS, LEATHER ITEMS, ACCESSORIES ETC. 4.6 THUS, IT IS EVIDENT THAT AS FAR AS ISSUE OF SELECT ION OF M/S ALTA MODA IS CONCERNED, THE LEARNED TPO HAS GIVEN H IS COMMENT ON THE MERIT AND, THEREFORE, NO VIOLATION OF THE FI NDING OF THE HONBLE DELHI HIGH COURT IN THE CASE OF MANISH BUIL DWELL P LTD. AS FAR AS SECOND ISSUE OF REIMBURSEMENT OF EXPENSES IS CONCERNED, THE LEARNED TPO HAS NOT GIVEN HIS COMMEN T ON MERIT, WHICH IS EVIDENT FROM HIS COMMENTS REPRODUCED BY TH E LD. CIT(A), WHICH ARE EXTRACTED AS UNDER: SINCE THE ASSESSEE COULD NOT PROVIDE THESE EVIDENC ES AT THE TIME OF TP PROCEEDING, AS ASSESSEE CLAIMS NO SUFFICIENT TIM E WAS GIVEN, THE ADJUSTMENT WERE MADE ON THESE EXPENSES. HOWEVER, TH E INVOICES WHICH THE ASSESSEE HAS PRODUCED ON THIS STAGE, COUL D HAVE BEEN PROVIDED AT THE TIME OF TP PROCEEDINGS, AS ALL THES E INVOICES ARE TO BE MEANT TO BE MAINTAINED AT TIME OF THE TRANSFER PRIC ING STUDY UNDER RULE 10D. 4.7 ON PERUSAL OF THE ABOVE COMMENTS OF THE LEARNED TP O, WE FIND THAT THAT THERE IS NO VIOLATION ON THE PART OF LD CIT(A). HE HAD DULY FORWARDED ALL EVIDENCES FOR THE COMMENT OF THE LD. TPO, BUT THE LD. TPO CONSCIOUSLY DID NOT GIVE ANY COMMEN T ON THE EVIDENCES RELATED TO REIMBURSEMENT OF EXPENSES. THE LD. CIT(A) CANT BE FAULTED IN SUCH CIRCUMSTANCES FOR THE INAC TION OF THE LD TPO. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, WE D ONT FIND ANY VIOLATION ON THE PART OF LD. CIT(A) IN ADMITTING AD DITIONAL EVIDENCES UNDER RULE 46A OF THE RULES. THE GROUND N O. 1 OF THE APPEAL IS ACCORDINGLY DISMISSED. 12 ITA NO.4315/DEL./2014 5. IN GROUND NO. 2, THE REVENUE HAS CHALLENGED EXCLUS ION OF COMPARABLE M/S ALTA MODA. 5.1 THE FACTS IN BRIEF QUA THE ISSUE IN DISPUTE ARE TH AT THE ASSESSEE REPORTED FOLLOWING INTERNATIONAL TRANSACTI ONS: NATURE OF INTERNATIONAL TRANSACTION MOST APPROPRIATED METHOD PROFIT LEVEL INDICATOR (PLI) TESTED PARTYS MARGIN COMPARABLES MARGIN VALUE OF INTERNATIONAL TRANSACTION PURCHASE OF TRADED GOODS RESALE PRICE METHOD (RPM) GROSS PROFIT/SALES (GP/SALES) 45.11% 25.67% 91,580,453 PURCHASE OF FIXED ASSETS COMPARABLE UNCONTROLLED PRICE METHOD (CUP) 3,647, 163 REIMBURSEMENT OF EXPENSES PAID CUP 87,887,042 5.2 IN SUPPORT OF CLAIM THAT TRANSACTION OF PURCHASE O F TRADED GOODS IS AT ARMS LENGTH, THE ASSESSEE CHOSE RESALE PRICE METHOD (RPM) AS THE MOST APPROPRIATE METHOD AND TAKING THE ASSESSEE AS TESTED PARTY, COMPARED GROSS PROFIT MARGIN (45.11%) OF THE ASSESSEE WITH THE AVERAGE MARGIN COMPARABLES INCLUD ING, FOREIGN COMPARABLES COMPANIES. THE LEARNED TPO REJECTED THE COMPARABLE SELECTED BY THE ASSESSEE AND SELECTED CO MPARABLE, NAMELY, M/S. ALTA MODA HAVING GROSS PROFIT RATIO OF 72.30%. THE LEARNED TPO ACCORDINGLY PROPOSED AN ADJUSTMENT OF 7,24,81,076/- TO THE INTERNATIONAL TRANSACTION OF P URCHASE OF TRADED GOODS. THE LEARNED CIT(A) REJECTED THE COMPA RABLE M/S. ALTA MODA OBSERVING AS UNDER: 4.3.3 THE APPELLANT HAS SUBMITTED THE FOLLOWING CH ART SHOWING THE COST OF SALES TO SALES RATIO OF M/S ALTA MODA GARME NTS LIMITED FOR F. Y. 2009-2010 AND F. Y. 2008-2009. COST OF SALES TO SALES RATIO OF M/S ALTA MODA GARM ENTS LIMITED IS 1:6 IN 2009 WHEREAS IT IS 1:3 IN NEXT YEAR 2010 I.E., DRASTIC FALL IN COST OF GOODS SOLD (COGS) RATIO AS COMPARED TO THE RATIO WITH FIRST 13 ITA NO.4315/DEL./2014 YEAR. COMPARABLE CALCULATION OF THE SAME FOR THE F. Y.2008-2009 & F.Y.2009-2010 IS DETAILED BELOW FOR YOUR REFERENCE. PARTICULARS F. Y. 2009-2010 F. Y. 2008-2009 REVENUE SALES 40,251,236.00 20,813,987.00 OTHER INCOMES 13,983.00 CLOSING STOCK 4,519,801.00 3,342,000.00 TOTAL 44,771,037.00 24,169,970.00 EXPENDITURE OPENING STOCK 3,342,000.00 4,306,125.00 PURCHASES 14,087,500.00 2,250,869.00 DIRECT COSTS - 136,806.00 FRANCHISE COMMISSION 4,812,500.00 - TOTAL 22,242,000.00 6,693,800.00 AMOUNT RATIO AMOUNT RATIO COST OF GOODS SOLD TO SALES RATIO (BEFORE FRANCHISE COMMISSION) 12,909,699 (32%) 1:3 3,351,800 (16%) 1:6 COST OF GOODS SOLD TO SALES RATIO (AFTER FRANCHISE COMMISSION) 17,722,199 (44%) 4:9 3,351,800 (16%) 1:6 4.3.4 I HAVE CAREFULLY GONE THROUGH THE ORDER PASSE D U/S 92CA(3), SUBMISSION OF THE APPELLANT AND THE REMAND REPORT. THE APPELLANT HAS STATED THAT THE TPO HAD PROPOSED THE NAME OF AL TA MODA GARMENTS LTD AS A COMPARABLE TO THE APPELLANT ON 28 /1/2013 AND THE REPLY WAS TO BE GIVEN ON 29/ 1/2013 THE VERY NE XT DAY. THE TPO PASSED THE ORDER U/S 92CA ON 29/1/2013 ITSELF. THE TPO DID NOT GIVE ADEQUATE TIME AND WAS IN A HURRY TO PASS THE S AID ORDER IN THE CASE OF THE APPELLANT COMPANY. THE APPELLANT HAS SU BMITTED THAT THE SEARCH STRATEGY WAS NOT PROVIDED BY THE TPO TO THE APPELLANT, WITH RESPECT TO THE SELECTION OF ALTA MODA GARMENTS LTD AS A COMPARABLE VIDE ORDER SHEET ENTRY DATED 28TH JANUARY, 2013. IT IS ALSO PERTINENT TO NOTE THAT WITH THE SEARCH STRATEGY AND FILTERS A DOPTED BY THE TPO IN SHOW CAUSE NOTICE, ONLY ONE COMPARABLE NAMELY KE WAL KIRAN CLOTHING LIMITED WAS PROPOSED. THE AUDITED ACCOUNTS ALSO REVEALS THAT ALTA MODA GARMENTS IS INTO MULTIPLE ACTIVITIE S OF CONSTRUCTION AND TEXTILE INDUSTRY WHEREAS THE APPELLANT IS IN TH E BUSINESS OF EXCLUSIVELY SELLING HERMES BRANDED PRODUCTS WHICH CONSISTS OF SILK AND TEXTILE PRODUCTS, LEATHER PRODUCTS, READY TO WE AR ACCESSORIES, PERFUMES, WATCHES, TABLEWARE AND OTHER PRODUCTS. TH E APPELLANT 14 ITA NO.4315/DEL./2014 HAS SUBMITTED THAT SINCE ALTA MODEL GARMENTS LTD. I S IN THE MULTIPLE BUSINESSES, THE SEGMENT- WISE RESULT IS NOT AVAILAB LE. THE APPELLANT HAS ALSO ARGUED THAT THE TPO HAS DISREGARDED FAR PR OFILE OF THE APPELLANT COMPANY WHICH WAS COMPLETELY DIFFERENT FR OM ALTA MODA. ALTA MODA GARMENT IS WORKING ON THE FRANCHISE MODEL WHILE THE APPELLANT IS IN RETAIL BUSINESS. THE APPELLANT HAS STATED THAT THE FINANCIAL STATEMENTS OF ALTA MODA GARMENTS LIMITED FOR THE F.Y. 2008-09 WERE NOT AVAILABLE IN PUBLIC DOMAIN TILL 30 TH NOVEMBER 2009 AS THE FINANCIALS WERE AUDITED & SIGNED BY THE STATUTORY AUDITORS ON 02.12.2009 AND THE ANNUAL GENERAL MEETI NG (AGM) OF THE COMPANY WAS HELD ON 29TH DECEMBER, 2009. IN THE PRESENT CASE, THE APPELLANT HAS COMPLETED ITS TRANSFER PRICING ST UDY ON 19TH SEPTEMBER 2009 AND BASED ON THAT HAD FILED THE REPO RT IN FORM 3CEB ON 29TH SEPTEMBER 2009, THE P & L A/C OF ALTA MODA GARMENTS REVEALS THAT AN AMOUNT OF RS.7,06,745/- HA S BEEN DEBITED AS CUSTOM DUTY SEPARATELY, WHICH HAS NOT BEEN INCLU DED IN PURCHASES FOR THE PURPOSE OF COMPUTING G.P. THE APP ELLANT HAS FURTHER SUBMITTED THAT IN THE CASE OF THE APPELLANT COMPANY, THE CUSTOM DUTY OF RS.2,51,75,641 IS INCLUDED IN PURCHA SES FOR THE PURPOSES OF DETERMINING THE GP. THE APPELLANT HAS A RGUED THAT FOR THE PURPOSE OF MAKING THE GP OF THE APPELLANT COMPA NY COMPARABLE WITH M/S ALTA MODA GARMENTS, PERCENTAGE OF CUSTOM D UTY I.E. 36.51% SHOULD BE ADDED TO THE GP MARGIN OF 45.11% D ECLARED BY THE APPELLANT COMPANY. THUS THE ADJUSTED G.P. MARGI N COMES TO 81.62%, WHICH IS HIGHER THAN THE GP MARGIN OF COMPA RABLE COMPANY, ALTA MODA GARMENTS I.E. 72.3%. 5.3 FURTHER, THE LD. CIT(A) ACCEPTED THE FIVE FOREIGN COMPARABLE COMPANIES AND THEIR AIRTHMATIC MEAN GROSS PROFIT MA RGIN ( 29.86%) BEING LESS THAN THE GROSS PROFIT MARGIN OF THE ASSESSEE (45.11%), THE LD. CIT(A) DELETED THE TRANSFER PRICI NG ADJUSTMENT OF 7,24,81,076/-. 5.4 BEFORE US, THE LEARNED DR SUBMITTED THAT THE LD. C IT(A) HAS REJECTED THE COMPARABLE BY MAKING FRIVOLOUS CLAIMS THAT M/S. ALTA MODA IS A BRAND AND TRADEMARK HOLDER AND IS NOT INT O RETAILING BUSINESS AND FOLLOWING FRANCHISE MODEL. ACCORDING T O HIM, M/S ALTA MODA HAS PAID FRENCHISE COMMISSION IN SUBSEQUE NT ASSESSMENT YEAR AND, THEREFORE, IN THE YEAR UNDER C ONSIDERATION IT CANNOT BE REJECTED ON THE GROUND OF DIFFERENT BUSIN ESS MODEL. 15 ITA NO.4315/DEL./2014 5.5 THE LEARNED COUNSEL OF THE ASSESSEE, ON THE OTHER HAND, RELIED ON THE ORDER OF THE LD. CIT(A). HE ALSO REFE RRED TO THE ANNUAL REPORT OF THE COMPANY FILED IN PAPER-BOOK TO SUPPORT THAT THE COMPANY WAS ENGAGED IN CONSTRUCTION AND THEREFO RE IT IS FUNCTIONALLY DISSIMILAR TO THE ASSESSEE. HE EMPHASI ZED THAT THE COMPANY ALSO NEEDS TO BE EXCLUDED ON THE GROUND OF DIFFERENT BUSINESS MODEL I.E. FRANCHISE MODEL AS COMPARED TO RETAIL BUSINESS BY THE ASSESSEE THOUGH ITS OWN SHOP. HE A LSO SUBMITTED THAT WHILE COMPUTING THE MARGIN OF M/S ALTA MODA TH E CUSTOM DUTY PAID FOR IMPORT OF PRODUCT HAS NOT BEEN CONSID ERED. ACCORDING TO HIM, IF THE CUSTOM DUTY PAID BY THE AS SESSEE IS EXCLUDED, ASSESSEES GROSS PROFIT MARGIN WORKS OUT TO 81.62% WHICH IS HIGHER THAN THE GROSS PROFIT MARGIN OF M/S ALTA MODA, CONSEQUENTLY NO TRANSFER PRICING ADJUSTMENT WOULD B E REQUIRED IN THE CASE OF THE ASSESSEE WITH REFERENCE TO INTERNAT IONAL TRANSACTION OF PURCHASE OF TRADED GOODS. 5.6 WE HAVE HEARD RIVAL SUBMISSION OF THE PARTIES AND PERUSED THE RELEVANT MATERIAL ON RECORD. AS FAR AS CONTENTI ON OF THE LEARNED COUNSEL THAT THE COMPANY, M/S ALTA MODA IS ENGAGED IN CONSTRUCTION, WE FIND THAT UNDER THE CLAUSE OF GENE RAL INFORMATION (SCHEDULE -13) TO THE SIGNIFICANT ACCOUNTING POLICI ES AND NOTES OF ACCOUNT ( PAGE -199 OF PAPERBOOK-1), IT IS REPORTED AS UNDER: THE COMPANY IS PRINCIPALLY ENGAGED TO CARRY ON THE BUSINESS OF CONSTRUCTIONS. THE FINANCIAL STATEMENTS ARE APPROVE D AND AUTHORISED FOR ISSUE IN ACCORDANCE WITH RESOLUTION OF THE BOAR D OF DIRECTORS ON 02/12/2009. 16 ITA NO.4315/DEL./2014 5.7 HOWEVER, WE NOTE THAT UNDER DIRECTORS REPORT (PAG E 183 OF APB-1), THE PRINCIPAL ACTIVITY OF THE COMPANY IS ME NTIONED AS UNDER: PRINCIPAL ACTIVITY THE COMPANY IS PRIMARILY ENGAGED TO CARRY ON THE BU SINESS OF TRADING IN HIGH FASHION GARMENTS OF VARIOUS ITAL IAN BRANSON DIFFERENT KINDS OF ORNAMENTS, LEATHER ITEMS , ASSESSEE IS ETC. 5.8 IN VIEW OF THE ABOVE, IN OUR OPINION, THE REMARK O F BUSINESS OF CONSTRUCTION MAY BE WITH REFERENCE TO CONSTRUCTI ON OF THE STORE, HOWEVER, FOR VERIFYING THIS FACT BEYOND DOUBT, WE F EEL IT APPROPRIATE TO SET ASIDE THE FINDING OF THE LEARNED CIT(A) ON THE ISSUE IN DISPUTE AND RESTORE THE MATTER BACK TO THE AO/TPO FOR ASCERTAINING THE FUNCTIONS OF THE COMPANY DURING R ELEVANT YEAR FROM THE COMPANY ITSELF USING AUTHORITY UNDER SECTI ON 133(6) OF THE ACT. 5.9 REGARDING THE ISSUE AS TO WHETHER THE COMPANY IS I N RETAILING THROUGH ITS OWN SHOP OR THOUGH FRANCHISE MODEL IS CONCERNED, ON PERUSAL OF CHART OF FINANCIAL STATEME NT OF THE COMPANY FOR FINANCIAL YEAR 2008-09 (I.E. ASSESSMENT YEAR UNDER CONSIDERATION) AVAILABLE IN IMPUGNED ORDER, WE FIND THAT IN FINANCIAL YEAR 2008-09, NO FRANCHISE COMMISSION HAS BEEN SHOWN AS RECEIVED. FURTHER, ON PAGE 183 OF THE PAPERBOOK- 1, IN DIRECTORS REPORT, UNDER THE HEAD REVIEW OF THE OP ERATIONS IT IS MENTIONED AS UNDER: ALTA MODA COMMENCED ITS OPERATIONS AT ITS FLAGSHIP STORE IN HYDERABAD ON 16 TH FEB., 2008. THE STORE WAS RECEIVED VERY WELL AND 17 ITA NO.4315/DEL./2014 HAS CLOCKED REASONABLY STRONG SALES IN THE LAST ON E YEAR. THE SECOND OUTLET WAS OPENED IN CHENNAI ON 24 TH APRIL, 2008 ON A FRANCHISEE BASIS. THE COMPANY HAD ALSO STARTED THE CONCEPT OF SHOP N SHOP, HAVING ESTABLISHED TWO MORE OUTLETS IN HYDE RABAD. ALL THE RETAIL OUTLETS ARE LOCATED IN UP MARKET AREAS. THE COMPANY HAS ACHIEVED A TOP LINE OF RS.208 LAKHS FOR THE FINANCI AL YEAR ENDING 31 ST MARCH, 2009. 5.10 THUS, THE COMPANY HAS ITS OWN STORE AND DURING TH E RELEVANT YEAR OPENED A FRANCHISEES STORE ALSO, BUT NO INCOME FROM FRANCHISE COMMISSION HAS BEEN SHOWN IN THE YEAR UND ER CONSIDERATION THEREFORE THERE IS NO IMPACT OF FRANC HISE STORE ON THE GROSS PROFIT MARGIN REPORTED IN FINANCIAL STATE MENT OF THE COMPANY IN THE YEAR UNDER CONSIDERATION. THUS, IT C ANNOT BE HELD AS FUNCTIONALLY DIFFERENT ON THE GROUND OF DIFFEREN T BUSINESS MODEL AS COMPARED TO THE ASSESSEE. 5.11 THE COMMENT OF THE LD. CIT(A) THAT THE COMPANY M /S ALTA MODA GARMENTS LTD. HAS NOT FILED ITS ANNUAL RETURN FOR FINANCIAL YEAR 2009-10 WITH REGISTER OF COMPANIES, IS NOT REL ATED TO THE YEAR UNDER CONSIDERATION AND PERTAINS TO SUBSEQUEN T TO THE FINANCIAL YEAR UNDER CONSIDERATION AND, THEREFORE, IT CANNOT BE PRESUMED THAT FRAUDULENT ACTIVITIES MIGHT HAVE BEEN ADOPTED BY THE COMPANY FOR INFLATING ITS PROFIT IN THE YEAR UN DER CONSIDERATION. FURTHER, THE COMMENT OF THE LD. CIT( A) THAT PROFIT OF THE COMPANY IN SUBSEQUENT YEAR HAS DROPPED TO 50 .32% FROM 72.39% IN THE YEAR UNDER CONSIDERATION AND, THEREFO RE, PROFIT OF THE COMPANY IS EXTREMELY VOLATILE, IS ALSO NOT RELE VANT BECAUSE IN THE TRANSFER PRICING COMPARABILITY HAS TO BE CONSID ERED IN RELEVANT YEAR AND NOT WITH SUBSEQUENT YEARS. THE LD. CIT(A) HAS CONCLUDED HIS FINDING MERELY ON THE PRESUMPTION THA T ASSESSEE MIGHT HAVE INFLATED ITS PROFIT IN THE INITIAL YEAR TO COME OUT FOR 18 ITA NO.4315/DEL./2014 PUBLIC OFFERING OF SHARES. RELIANCE PLACED BY THE L D. CIT(A) ON UNFOUNDED INFORMATION WITHOUT ANY COGENT EVIDENCE I S NOT JUSTIFIED. 5.12 HOWEVER, AS FAR AS THE GROUND THAT WHILE COMPUTING MARGIN OF THE COMPANY, THE CUSTOM DUTY PAID ON IMPORT OF P RODUCTS HAS BEEN EXCLUDED, IS CONCERNED, WE ARE OF THE OPINION THAT FOR COMPARABILITY GROSS PROFIT MARGIN OF BOTH THE COMPA NY AND THE ASSESSEE HAS TO BE COMPUTED IN SIMILAR MANNER. BOTH IN THE CASE OF ASSESSEE AS WELL AS IN THE COMPARABLE COMPANY TR EATMENT OF THE CUSTOM DUTY HAS TO BE GIVEN IN THE SIMILAR MANN ER. IF THE CUSTOM DUTY IS PART OF THE TRADING ACCOUNT THEN SAM E IS TO BE TREATED IN IDENTICAL MANNER WHILE COMPUTING THE GRO SS PROFIT MARGIN OF THE COMPANY AS WELL AS THE ASSESSEE. SINC E WE HAVE ALREADY RENDERED THE ISSUE OF VERIFYING THE FUNCTIO N OF THE COMPANY TO THE LD AO/TPO, SO IF THE COMPANY IS FOUN D TO FUNCTIONALLY SIMILAR TO THE ASSESSEE, THE LD AO/TPO , SHALL COMPUTE THE MARGIN OF THE COMPANY IN VIEW OF OUR DI RECTION ABOVE. 5.13 THE GROUND NO. 2 OF THE APPEAL OF THE REVENUE IS ACCORDINGLY ALLOWED FOR THE STATISTICAL PURPOSES. 6. IN GROUND NO. 3, THE REVENUE HAS CHALLENGED ADJUST MENT OF 5,32,25,677/- MADE TO THE INTERNATIONAL TRANSACTIO N OF REIMBURSEMENT OF EXPENSES TO ASSOCIATED ENTERPRISES (AES). 6.1 THE FACTS IN BRIEF QUA THE ISSUE IN DISPUTE ARE TH AT THE ASSESSEE HAS SHOWN REIMBURSEMENT OF EXPENSES PAID A T RS.8,78,87,042/-, TOWARDS COST REIMBURSEMENT TO ITS AES. ACCORDING TO THE ASSESSEE, THESE EXPENSES WERE INCU RRED BY THE ASSOCIATED ENTERPRISES TOWARDS THIRD PARTIES, WHICH HAVE BEEN 19 ITA NO.4315/DEL./2014 REIMBURSED BY THE ASSESSEE ON THE COST TO COST BASI S. IN VIEW OF THE ASSESSEE, THESE INTRA-GROUP TRANSACTION OF REIM BURSEMENT ARE ON COST TO COST BASIS, AND THUS AT ARMS-LENGTH. TH E ASSESSEE SUBMITTED THAT REIMBURSEMENT OF THE EXPENSES BROADL Y INCLUDE TWO TYPES OF EXPENSES. FIRSTLY, THE EXPENSES IN THE NATURE OF HOTEL RENT, SALARY, FEES, TRAVEL EXPENSES, COURIER CHARGE S, OFFICE STATIONARY ETC. WHICH ARE CATEGORIZED AS REVENUE EX PENSES AND DEBITED TO THE PROFIT AND LOSS ACCOUNT UNDER VARIOU S HEADS. SECONDLY, EXPENSES IN THE NATURE OF THE CAPITAL EXP ENDITURE, SUCH AS LAPTOP PURCHASED, FURNITURE AND AIR-CONDITIONER PURCHASE ETC. WHICH HAVE BEEN CAPITALIZED BY ADDING TO THE FIXED ASSET ACCOUNTS. THE ASSESSEE FILED INVOICES/DEBIT NOTES O F THE ABOVE EXPENSES ON SAMPLE BASIS. THE LEARNED TPO, HOWEVER, OBSERVED THAT THE ASSESSEE DID NOT PROVIDE BREAKUP OF THE RE IMBURSEMENT EXPENSES AND SAMPLE INVOICES PROVIDED WERE EITHER N OT RELEVANT FOR THE PERIOD UNDER CONSIDERATION, WITHOUT ANY REC ONCILIATION WITH ITS AUDITED FINANCIALS AND WERE IN THE LANGUAG E OTHER THAN ENGLISH, MAKING IT DIFFICULT TO UNDERSTAND THE PART ICULARS AND NECESSITY OF THE TRANSACTIONS/INVOICES. HE ALSO NOT ED THAT THE ASSESSEE HAD NOT PROVIDED DETAILS OR INVOICES OF TH E EXPENSES UNDER HEAD HOTEL RENT, SALARY, FEES, COURIER CHARGES ETC. IN VIEW OF THE OBSERVATION THE LEARNED TPO ACCEPTED EX PENSES TO THE EXTENT OF 3,46,61,365/-AND FOR THE BALANCE, THE LEARNED TPO OBSERVED THAT THE ASSESSEE FAILED TO DEMONSTRATE TH E GENUINENESS, EXISTENCE AND/OR THE TANGIBLE BENEFIT DERIVED FROM SUCH EXPENSES. THE LEARNED TPO ALSO OBSERVED THAT NO COST BENEFIT ANALYSIS OF THE EXPENSES WAS PROVIDED. SHE CONCLUDED THAT THE ASSES SEE FAILED TO PROVIDE ANY CREDIBLE BASIS REGARDING NECESSITY AND GENUINENESS OF 20 ITA NO.4315/DEL./2014 THE PAYMENT AND CONSEQUENTLY THE CUP OF THOSE INTRA GROUP SERVICES WAS HELD TO BE AT 3,46,61,365/- AND ADJUSTMENT OF 5,32,25,677/- WAS PROPOSED. 6.2 BEFORE THE LD. CIT(A) THE ASSESSEE CLAIMED TO HAVE PRODUCED EVIDENCE IN SUPPORT OF REMAINING EXPENSES ALSO. THE LD. CIT(A) FORWARDED THOSE EVIDENCES TO THE LEARNED TPO, HOWEV ER THE LEARNED TPO SIMPLY OBJECTED TO THE ADMISSION OF THE ADDITIONAL EVIDENCE AND NO COMMENT WAS GIVEN ON THE MERIT. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION AND REJOINDER OF T HE ASSESSEE ON THE REMAND REPORT, DELETED THE TRANSFER PRICING ADJ USTMENT OBSERVING AS UNDER: 4.5.5 IN THE PRESENT CASE THE DETAILS OF EXPENSES WITH BILL/VOUCHERS WERE REQUISITIONED BY THE TPO VIDE SHOW CAUSE NOTIC E DATED 17/01/2013, WHICH WAS RECEIVED BY THE APPELLANT THR OUGH EMAIL ON 19/01/2013. DUE TO PAUCITY OF TIME, THE APPELLANT H AD SUBMITTED SAMPLE INVOICES OF THE TRANSACTIONS BEFORE THE TPO ON 25/01/2013. THE TPO VIDE HER ORDER DATED 29/1/2013 U/S 92CA(3) HAD DISALLOWED THE AMOUNT OF RS.5,32,25,677 OUT OF THE TOTAL REIMBURSEMENT EXPENSES OF RS.8,78,87,042 TO ITS AE. THE REMAINING AMOUNT OF RS.3,46,61,365/- HAD BEEN ALLOWED BY THE TPO. THE SAID AMOUNT OF RS.5,32,25,677/- HAD BEEN DISALLOWED BY T HE TPO ON THE GROUND THAT DOCUMENTS SUBMITTED BY THE APPELLANT CO MPANY WERE INADEQUATE AND THE NEED FOR SUCH OF EXPENDITURE SHO WN TO BE INCURRED BY AES HAD NOT BEEN ESTABLISHED. THE REIMB URSEMENT EXPENDITURE CONSISTS OF (I) THE LEASEHOLD IMPROVEME NT OF RS 53,810,549/-, (II) PURCHASE OF RS 22,355,686/-, (II I) ADMINISTRATIVE, SELLING & OTHER EXPENSES OF RS 4,749,927/-, (IV) FI XED RENT & RATES OF RS 3,810,585/-, (V) COMMUNICATION EXPENSES OF RS 1,785,665/-, (VI) FURNITURE & FIXTURES OF RS 762,920/-, (VII) WA GES & ALLOWANCES OF RS 566,830/-, (VIII) MISCELLANEOUS EXPENSES OF R S 4,539/- AND (X) COMPUTERS OF S 40,500/-. THE APPELLANT HAS ALSO STA TED THAT ALL THE RELEVANT DETAILS OF RS.8,78,87,042/- HAD ALREADY BE EN FILED BY THE APPELLANT COMPANY VIDE ITS REPLY DATED 12/4/2012 AN D 26/4/2012 (PAGE NO. 167 TO 190 OF THE PAPER BOOK NO.L) AS PER THE EARLIER REQUISITION OF THE TPO. THE SAID DETAILS WERE NOT C ONSIDERED BY THE TPO WHILE PASSING ORDER U/S 92CA(3). THE APPELLANT HAS STATED THAT THE DISALLOWANCE OF RS.38,10,585/- ON ACCOUNT OF FI XED RENT 8S RATES RELATES THE PAYMENT TO THE LANDLORD OF THE PREMISES OF THE OBEROI HOTEL. THE APPELLANT HAS STATED THAT THE DISALLOWAN CE OF RS.3,62,39,803/- OUT OF REIMBURSEMENT RELATES TO CA PITAL EXPENDITURE 21 ITA NO.4315/DEL./2014 SUCH AS LEASEHOLD IMPROVEMENT EXPENDITURE. THE APPE LLANT HAS ALSO STATED THAT THE PURCHASES OF RS.58,82,335/- INCLUDE D IN REIMBURSEMENT OF EXPENSES WERE INITIAL PURCHASES DU E TO START-UP OPERATIONS AND WERE ON COST-TO-COST BASIS WITHOUT A NY MARKUP. DURING THE COURSE OF THE APPELLATE PROCEEDINGS THE APPELLANT HAS SUBMITTED PAPER BOOK-4 AND PAPER BOOK-1 CONTAINING THE COPIES OF INVOICES WITH RESPECT TO REIMBURSEMENT OF EXPENSES. ALL THE PAPER BOOKS WERE FORWARDED TO THE TPO FOR HIS COMMENTS. I N THE REMAND REPORT THE TPO HAS NOT MADE ANY ADVERSE COMMENT EXC EPT MAKING THE OBSERVATION THAT NOFRESH EVIDENCE SHOULD BE ADM ITTED UNDER RULE 46A. AT PARA4.1.4 OF THIS ORDER ABOVE, I HAVE ALREADY HELD THE ADDITIONAL EVIDENCE IS REQUIRED TO BE ADMITTED AS P ER THE PROVISION OF RULE 46A AND ALSOIN THE INTEREST OF JUSTICE. ACCORD INGLY, THE ADDITIONAL EVIDENCE HAS BEEN ADMITTED UNDER RULE 46 A IN THE INSTANT CASE. 4.5.6THE APPELLANT HAS EXPLAINED THAT THE APPELLANT COMPANY WAS FORMED IN MAY 2007 AND STARTED ITS COMMERCIAL OPERA TION IN THE FINANCIAL YEAR 2008-09 ONWARDS (1/9/2008). DURING T HE ENTIRE PERIOD OF 2007-2008, THE APPELLANT COMPANY DID NOT BEGIN ITS OPERATIONS OR UNDERTAKE ANY BUSINESS SINCE THE APPE LLANT COMPANY WAS ENGAGED IN THE CONSTRUCTIONS OF ITS SHOWROOM FR OM WHERE THE GOODS WERE PROPOSED TO BE SOLD. THE APPELLANT COMPA NY HAD SET UP ITS BUSINESS OPERATIONS IN INDIA THROUGH A RETAIL S HOWROOM AT THE OBEROI HOTEL, NEW DELHI WHICH WAS UNDER CONSTRUCTIO N FROM MAY 2007 TO MAY 2008. THE APPELLANT HAS FURTHER EXPLAIN ED THAT DURING THE SAID PERIOD, THE PAID UP CAPITAL OF THE COMPANY WAS ONLY RS. 1,00,000/- AND IT HAD TO BUILD AND SET UP ITS SHOW ROOM AT THE OBEROI HOTEL, NEW DELHI. THE APPELLANT COMPANY DURI NG THE SAID PERIOD HAD TO RENOVATE THE OBEROI HOTEL PREMISES CO MPLETELY SINCE BARE SHELL PREMISES HAD BEEN PROVIDED TO IT BY THE HOTEL. FOR THIS PURPOSE AND DUE TO PAUCITY OF FUNDS, THE AE(S) HAD PAID TO VARIOUS THIRD PARTIES ON BEHALF OF THE APPELLANT COMPANY, W HICH WAS DULY REIMBURSED TO THE AES ON COST TO COST BASIS WITHOUT ANY MARK-UP OR ANY ELEMENT OF PROFIT. THE TPO HAS DISALLOWED THE A MOUNT OF RS 5,32,25,677/- OUT OF THE TOTAL REIMBURSEMENT OF RS 8,78,87,042/- ON THE GROUND THAT THE APPELLANT DID NOT SUBMIT THE FU LL DETAILS. DURING THE COURSE OF THE APPELLATE PROCEEDINGS THE APPELLA NT HAS SUBMITTED PAPER BOOK-4 AND PAPER BOOK-1 CONTAINING THE COPIES OF ALL THE INVOICES WITH RESPECT TO REIMBURSEMENT OF EXPENSES. I HAVE PERUSED THE DETAILS SUBMITTED BY THE APPELLANT COMPANY. IN THE PRESENT CASE, THE AES WHICH HAD MADE PAYMENTS TO THIRD PARTIES ON BEHALF OF THE APPELLANT COMPANY DUE TO PAUCITY OF FUNDS IN THE IN ITIAL YEAR OF OPERATION WERE DULY REIMBURSED BY THE APPELLANT COM PANY ON COST TO COST BASIS WITHOUT ANY MARK-UP. CONSIDERING THE FAC TS OF THE CASE I AM OF THE VIEW THAT THE TPO HAS WRONGLY DETERMINED THE TP ADJUSTMENT OF RS.5,32,25,677/- OUT OF REIMBURSEMENT EXPENSES OF RS.8,78,87,042/- PAID TO ITS AE. ACCORDINGLY, THE A O/TPO IS DIRECTED 22 ITA NO.4315/DEL./2014 TO DELETE THE ADDITION OF RS 5,32,25,677/- ON ACCOU NT OF THE TP ADJUSTMENT OUT OF REIMBURSEMENTS EXPENSES. THIS ISS UE IS DECIDED IN FAVOUR OF THE APPELLANT. 6.3 BEFORE US, THE LEARNED DR SUBMITTED THAT DESPITE S HOW CAUSE NOTICE DATED 17/01/2013 TO PROVIDE DETAILS OF HEAD-WISE REIMBURSEMENT OF EXPENSES AND ITS PURPOSE ISSUED BY THE LEARNED TPO, ONLY SAMPLE BILLS WERE FURNISHED BY THE ASSESS EE AND THEREFORE LEARNED TPO IS JUSTIFIED IN PROPOSING THE ADJUSTMENT. 6.4 THE LEARNED COUNSEL OF THE ASSESSEE, ON THE OTHER H AND, RELIED ON THE ORDER OF THE LEARNED CIT(A) AND SUBMI TTED THAT DETAILS OF ENTIRE EXPENDITURE 8,78,87,042/- WAS FURNISHED BEFORE THE LEARNED CIT(A), WHO FORWARDED THOSE DETAILS INC LUDING BILLS/INVOICES OF THE EXPENSES FOR HIS/HER COMMENTS . THE LEARNED COUNSEL ALSO REFERRED TO THE COPY OF INVOICES OF TH OSE EXPENSES FILED IN THE FORM OF PAPER-BOOK 2. ACCORDING TO HIM , THE SAMPLE COPIES OF BILLS WERE FILED BEFORE THE LEARNED TPO D URING TRANSFER PRICING PROCEEDING AND HE DID NOT INSIST FOR FILING BILLS/ INVOICE OF ALL THE EXPENSES, OTHERWISE THE ASSESSEE WOULD HAVE FILED ALL THE DETAILS BEFORE HIM. 6.5 WE HAVE HEARD RIVAL SUBMISSION OF THE PARTIES ON TH E ISSUE IN DISPUTE AND PERUSED THE RELEVANT MATERIAL ON REC ORD. THERE IS NO DISPUTE ON THE FACT THAT ONLY SAMPLE BILLS OF EX PENSES REIMBURSED TO THE AES WERE PRODUCED BEFORE THE LEAR NED TPO DURING ORIGINAL TRANSFER PRICING PROCEEDINGS AND TH EREFORE THE LEARNED TPO PROPOSED ADJUSTMENT IN RESPECT OF THE E XPENSES FOR WHICH BILLS/INVOICES WERE NOT PRODUCED BEFORE HER. DURING APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A), TH E ASSESSEE HAS PRODUCED ENTIRE DETAILS OF EXPENSES REIMBURSED ALON G WITH 23 ITA NO.4315/DEL./2014 BILLS/INVOICES AS ADDITIONAL EVIDENCE, WHICH WERE F ORWARDED BY THE LEARNED CIT(A), TO THE LEARNED TPO FOR HIS COMMENTS . THE LEARNED TPO OBJECTED TO THE ADMISSION OF THE ADDITI ONAL EVIDENCES AND ABSTAINED FROM GIVING HIS COMMENTS ON THE EVIDENCES OF EXPENSES, WHICH SHOWS THAT HE WAS UNAB LE TO POINT OUT ANY DEFECT IN THE EVIDENCES OF THE ASSESSEE. BE FORE US, THE LD DR HAS ALSO NOT POINTED OUT ANY DEFECT OR IRREGULA RITY IN ANALYSIS OF THE CIT(A) ON THE ISSUE OF EXPENSES REIMBURSED. IN SUCH CIRCUMSTANCES, NO USEFUL PURPOSE WILL BE SERVED BY SENDING THE MATTER BACK TO LD. TPO. WE, ACCORDINGLY REJECT THE ARGUMENTS OF THE LD. DR AND DISMISS THE GROUND NO. 3 OF THE APPE AL. 6.6 IN RESULT, THE APPEAL OF THE REVENUE IS ALLOWED P ARTLY FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD FEBRUARY, 2021 SD/- SD/- (AMIT SHUKLA) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 23 RD FEBRUARY, 2021. RK/- (DTDS) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI