DCIT, Bangalore V. M/s Ray + Keshavan Design Associates Pvt. Ltd., Bangalore

ITA 472/BANG/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0667 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-01-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 02-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AJITH SHAH
• Keywords: Business expenditure; Bad and doubtful debts; Commercial expediency
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER ITA NO.472/BANG/2012 ASSESSMENT YEAR : 2008-09 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 12(4), BANGALORE. VS. M/S. RAY + KESHAVAN DESIGN ASSOCIATES PVT. LTD., NO.22, BRUTON ROAD, BANGALORE 560 025. PAN: AABCR 7274F APPELLANT RESPONDENT APPELLANT BY : SHRI A. SUNDARARAJAN, JT. CIT (SR.DR -III) RESPONDENT BY : SHRI AJITH SHAH, C.A. DATE OF HEARING : 07.01.2013 DATE OF PRONOUNCEMENT : 11.01.2013 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 13.01.2012 OF THE CIT(APPEALS)-III, BANGALORE RELATING TO ASSE SSMENT YEAR 2008-09. 2. GROUND NO.1 RAISED BY THE REVENUE IS GENERAL IN NATURE. GROUND NO.2 RAISED BY THE REVENUE READS AS FOLLOWS:- 2. THE CIT(A) ERRED IN ALLOWING THE BAD DEBTS WRIT TEN OFF TO THE P & L ACCOUNT, AMOUNTING TO RS.26,58,077/- WHIC H REPRESENTED AMOUNT OUTSTANDING FROM DEBTORS AGAINST DESIGNING AND BRAND CONSULTANCY SERVICES RENDERED, EVEN THOUG H THE ASSESSEE COMPANY HAD NOT TAKEN ANY EFFECTIVE STEPS TO RECOVER THE AMOUNT AND THE GENUINENESS OF THE BAD DEBTS WRITTEN OFF WAS NOT PROVED BY THE ASSESSEE COMPANY. ITA NO.472/BANG/2012 PAGE 2 OF 9 3. THE ASSESSEE IS A COMPANY. IT DERIVES INCOME FR OM CARRYING OUT THE ACTIVITY OF DESIGNING ADVERTISEMENTS. IN THE PROFI T & LOSS ACCOUNT, THE ASSESSEE HAD DEBITED A SUM OF RS.32,50,530 AS BAD D EBTS WRITTEN OFF. THE SUM WAS CLAIMED AS DEDUCTION WHILE COMPUTING TOTAL INCOME. THE AO DISALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAD NOT ESTABLISHED THAT THE DEBTS HAVE BECOME BAD. AG AINST THE AFORESAID DECISION, THE ASSESSEE PREFERRED AN APPEAL BEFORE T HE CIT(APPEALS). BEFORE THE CIT(APPEALS), THE ASSESSEE SUBMITTED AS FOLLOWS:- (A) THE AMOUNT OF BAD DEBTS WRITTEN OFF TO THE PRO FIT & LOSS ACCOUNT REPRESENTS AMOUNT OUTSTANDING FROM DEBTORS AGAINST DESIGNING AND BRAND CONSULTANCY SERVICES RE NDERED; (B) THE BAD DEBTS HAVE BEEN ACCOUNTED AS PART OF I NCOME AND HAVE ENTERED IN THE QUANTIFICATION OF TOTAL INCOME OF THE ASSESSEE OF THE RELEVANT YEARS IN WHICH THE CORRESP ONDING INVOICES WERE RAISED AND ACCOUNTED; (C) WRITE OFF WAS ON ACCOUNT OF NON-ACCEPTANCE OF THE JOB(S) BY THE CUSTOMERS, DISPUTE(S) REGARDING THE BILL AMOUNT (S) AND AFTER CONSTANT FOLLOW-UP CLIENT DID NOT PAY. AMOUNT S WERE WRITTEN OFF BASED ON THE EVALUATION AND HONEST JUDG EMENT REACHED BY THE MANAGEMENT OF THE ASSESSEE AFTER TAK ING INTO ACCOUNT THE RELEVANT FACTORS OF THE RECOVERABI LITY OF THE AMOUNT(S) INVOLVED. PERSONAL FOLLOW-UPS WERE MADE BY MS. MEETA MALHOTRA (DIRECTOR) AND MR. ARVIND HEGDE (BUSINESS- DIRECTOR) FOR RECOVERY AND AFTER PROPER EVALUATION ON NON RECOVERABILITY OF THE DEBTS AND H ONEST JUDGMENT REACHED BY THE MANAGEMENT, THE MANAGEMENT OF THE ASSESSEE DECIDED TO WRITE OFF THE DEBTS UNDER R EFERENCE. SINCE FOLLOW-UPS WERE MADE PERSONALLY THERE ARE NO WRITTEN COMMUNICATIONS BY AND BETWEEN THE ASSESSEE AND THE RESPECTIVE CLIENTS/S WHOSE DEBTS HAVE BEEN WRITTEN AS BAD DEBTS. (D) THE BAD DEBTS WHICH HAVE BEEN DISALLOWED BY THE LD. AO ARE IN RELATION TO HINDUSTAN LEVER LIMITED AND MUMB AI INTERNATIONAL AIRPORT LIMITED [THE SAID CLIENTS] AM OUNTING TO ITA NO.472/BANG/2012 PAGE 3 OF 9 RS. 14,08,077/- AND RS. 12,50,000/- RESPECTIVELY. T HE ASSESSEE ALSO ENCLOSED A STATEMENT SHOWING BILL-WIS E BREAK- UP OF THE AMOUNTS WRITTEN OFF IN RESPECT OF THE SAI D CLIENTS, ALONGWITH JOB DESCRIPTION AND THE REASONS FOR WRITI NG OFF THE SAME. (E) THE ASSESSEE ALSO FILED DECLARATION OF MS. MEE TA MALHOTRA (DIRECTOR) AND MR. ARVIND HEGDE (BUSINESS DIRECTOR) OF THE ASSESSEE WITH RESPECT TO THE WRITE OFF OF DEBTS DUE FROM THE SAID CLIENTS. (F) WE HAVE CHARGED OFF THE DEBTS AS BAD AS THESE WE(RE) NOT RECOVERABLE FROM THE SAID CLIENTS AND WERE WRITTEN OFF AS BAD DEBTS DURING THE YEAR ENDED 31ST MARCH, 2008. 4. THE CIT(APPEALS) ON A CONSIDERATION OF THE SUBMI SSIONS OF THE ASSESSEE, HELD AS FOLLOWS:- 3.4. I HAVE CAREFULLY CONSIDERED THE ISSUE ON APP EAL BEFORE ME. AT THE OUTSET, I MUST MENTION THAT THE PREMISE ON W HICH THE AO DECLARED THE DEBTS TO BE NOT GENUINE IS INSUFFICI ENT. RECOVERY EFFORTS NOT HAVING BEEN MADE TO AN EXTERNALLY-EXPEC TED EXTENT DOES NOT AUTOMATICALLY RENDER A DEBT TO BE RECOVERA BLE. THE LAW ALLOWS THIS JUDGMENT TO BE EXERCISED BY THE PRUDENT MANAGEMENT OF A BUSINESS. IN THE PRESENT CASE, THE DETAILS OF THE DEBTS ARE PROVIDED BOTH AT THE ASSESSMENT AND APPELLATE STAGE S. THE MANAGEMENT HAVE MADE EFFORTS TO THE EXTENT DEEMED COMMERCIALLY PRUDENT AND EXPEDIENT TO RECOVER THE D EBTS, WHICH ARE OWED BY TWO REPUTED COMPANIES. WHILE IT IS NO-D OUBT OPEN TO ARGUMENT AS TO AT WHICH STAGE OF THE RECOVERY PROCE SS A DEBT SHOULD NORMATIVELY BE DESIGNATED AS BAD, THE CASELA W ON THE SUBJECT IS VERY CLEAR. THE HONBLE SUPREME COURT IN THE CASE OF TRF LTD. VS. CIT (2010), AFTER NOTICING THE CHANGE IN LAW W.E.F. 1-4-89 HAS HELD THAT FROM 1.4.1989 IT IS NOT NECES SARY FOR THE ASSESSEE TO ESTABLISH THAT THE DEBT, IN FACT, HAS B ECOME IRRECOVERABLE. IT IS ENOUGH IF THE BAD DEBT IS WRIT TEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE. IN T HIS JUDGEMENT, THE HONBLE COURT FOLLOWED THE RATIO OF EARLIER DEC ISIONS IN THE CASE OF VIJAYA BANK VS CIT [2010] 323 ITR 166 [SC] AND SOUTHERN TECHNOLOGIES LTD VS JCIT [2010] 320 ITR 57 7 [SC]. ACCORDINGLY, THIS GROUND OF APPEAL IS ALLOWED. ITA NO.472/BANG/2012 PAGE 4 OF 9 5. AGGRIEVED BY THE ORDER OF THE CIT(APPEALS), THE REVENUE HAS RAISED GROUND NO.2 BEFORE THE TRIBUNAL. 6. THE LD. DR RELIED ON THE ORDER OF THE ASSESSING OFFICER, WHILE THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS WERE MADE BEFORE THE CIT(APPEALS). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS . PRIOR TO 1 STAPRIL, 1989, EVERY ASSESSEE HAD TO ESTABLISH, AS A MATTER OF FACT, THA T THE DEBT ADVANCED BY THE ASSESSEE HAD, IN FACT, BECOME IRRECOVERABLE. TH AT POSITION GOT ALTERED BY DELETION OF THE WORD ESTABLISHED, WHICH EARLIE R EXISTED IN SECTION 36(1)(VII) OF THE INCOME TAX ACT, 1961 [`ACT', FOR SHORT]. FOR THE SAKE OF CLARITY, WE RE-PRODUCE HEREINBELOW PROVISIONS OF S ECTION 36(1)(VII) OF THE ACT, BOTH PRIOR TO1ST APRIL, 1989 AND POST-1ST APRI L, 1989: PRE-1 ST APRIL, 1989 : OTHER DEDUCTIONS: 36.(1) THE DEDUCTIONS PROVIDED F OR IN THE FOLLOWING CLAUSES SHALL BE ALLOWED IN RESPECT OF TH E MATTERS DEALT WITH THEREIN, IN COMPUTING THE INCOME REFERRED TO I N SECTION 28(I) TO (VI) XXXX XXXX XXXX (VII) SUBJECT TO THE PROVISIONS OF SUB-SECTION(2), THE AMOUNT OF ANY DEBT, OR PART THEREOF, WHICH IS ESTABLISHED TO HAVE BECOME A BAD DEBT IN THE PREVIOUS YEAR. POST-1 ST APRIL, 1989: OTHER DEDUCTIONS:36.(1) THE DEDUCTIONS PROVIDED FOR IN THE FOLLOWING CLAUSES SHALL BE ALLOWED IN RESPECT OF THE MATTERS DEALT WITH THEREIN, IN COMPUTING THE INCOME REFERRED TO IN SECTION28(I) TO (VI) XXXX XXXX XXXX ITA NO.472/BANG/2012 PAGE 5 OF 9 (VII) SUBJECT TO THE PROVISIONS OF SUB-SECTION(2), THE AMOUNT OF ANY BAD DEBT OR PART THEREOF WHICH IS WRITTEN OFF AS I RRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE FOR THE PREVIOUS YEAR. 8. IN TRF LIMITED VS. CIT 230 CTR 14 (SC), THE HO NBLE SUPREME HAS HELD THAT AFTER 1ST APRIL, 1989, IT IS NOT NEC ESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DEBT, IN FACT, HAS BECOME IRRECO VERABLE. IT IS ENOUGH IF THE BAD DEBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACC OUNTS OF THE ASSESSEE. IN VIEW OF THE ABOVE, THE AO WAS NOT JUSTIFIED IN MAKI NG THE DISALLOWANCE OF CLAIM FOR DEDUCTION ON ACCOUNT OF BAD DEBTS ON THE GROUND THAT THE DEBTS IN QUESTION HAVE NOT BEEN ESTABLISHED TO HAVE BECOME B AD. 9. APART FROM THE ABOVE, IT IS CLEAR THAT THE ASSES SEE HAD GIVEN ALL THE DETAILS AND IT IS NOT THE CASE OF THE ASSESSING OFF ICER THAT ANY OTHER CONDITION FOR GRANT OF DEDUCTION U/S. 36(1)(VII) OF THE ACT, HAVE NOT BEEN SATISFIED. IN THE CIRCUMSTANCES, WE ARE OF THE VIE W THAT THE ORDER OF THE CIT(APPEALS) DOES NOT CALL FOR INTERFERENCE. CONSE QUENTLY, GROUND NO.2 RAISED BY THE REVENUE IS DISMISSED. 10. GROUND NO.3 RAISED BY THE ASSESSEE READS AS FOL LOWS:- THE CIT(A) ERRED IN ALLOWING THE LEGAL AND PROFESS IONAL CHARGES OF RS.46,00,000/- ON THE GROUND THAT SEC.192 OF THE I.T. ACT, 1961 IS OUTSIDE THE PURVIEW OF SEC.40(A)(IA) OF THE IT. ACT, 1961. 11. THE ASSESSEE MADE A PAYMENT OF RS.46 LAKHS AS P ROFESSIONAL CHARGES TO MS. MEETA MALHOTRA, DIRECTOR OF THE ASSE SSEE COMPANY. IN RESPECT OF THE AFORESAID PAYMENT, THE ASSESSEE HAD DEDUCTED TAX AT SOURCE U/S. 194J OF THE ACT TREATING THE PAYMENT AS A PAYM ENT FOR PROFESSIONAL ITA NO.472/BANG/2012 PAGE 6 OF 9 CHARGES RENDERED. ACCORDING TO THE AO, THE PAYMENT WAS BEING MADE IN THE NORMAL COURSE OF BUSINESS AND THEREFORE THE PAY MENT SHOULD HAVE BEEN CONSIDERED AS SALARY PAID TO AN EMPLOYEE. THE AO WAS OF THE VIEW THAT THERE WAS AN EMPLOYER-EMPLOYEE RELATIONSHIP BE TWEEN MS. MEETA MALHOTRA AND THE ASSESSEE. THE AO THEREFORE CONCLU DED THAT THE PAYMENT IN QUESTION WAS A SALARY. THE AO ALSO NOTICED THAT IN THE RETURN OF INCOME FILED BY MS. MEETA MALHOTRA, SHE HAD DECLARED THE S UM OF RS.46 LAKHS AS PROFESSIONAL CHARGES RECEIVED FROM THE ASSESSEE AND CLAIMED EXPENDITURE OF RS.36,47,785 AND REFLECTED THE INCOME OF ONLY RS .9,52,215. THE AO WAS OF THE VIEW THAT HAD THE ASSESSEE TREATED THE P AYMENT IN QUESTION AS SALARY, THEN MS. MEETA MALHOTRA CAN CLAIM ONLY PERM ISSIBLE DEDUCTIONS UNDER THE HEAD SALARIES AND NOT A SUM OF RS.36,47,7 85/. THE AO THEREFORE CONCLUDED AS FOLLOWS:- 7.11 THE ASSESSEE COMPANY HAS MISREPRESENTED THE ABOVE SALARY OF RS.46,00,000/- AS PROFESSIONAL CHARGES AND DEDUCTED TAX AT SOURCE U/S 194J OF THE INCOME TAX A CT, 1961. THIS HAS BEEN SPECIFICALLY DONE TO GIVE AN UNDUE AD VANTAGE TO MS.MEETA MALHOTRA WHO IS THE DIRECTOR OF THE ASSESS EE COMPANY HOLDING 5% OF THE SAME TO CLAIM ADDITIONAL EXPENSES IN HER RETURN OF INCOME. 7.12. THEREFORE, AN AMOUNT OF RS.46,00,000/- IS DI SALLOWED AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE COMP ANY. THUS THE DISALLOWANCE UNDER THIS HEAD IS RS.46,00,0 00/-. 12. BEFORE THE CIT(A), THE ASSESSEE POINTED OUT THA T THE ASSESSING OFFICER HAD ISSUED SUMMONS TO MS. MEETA MALHOTRA BY INVOKING THE PROVISIONS OF SECTION 131 OF THE ACT. BASED ON HER RETURN OF INCOME FOR THE ITA NO.472/BANG/2012 PAGE 7 OF 9 YEAR ENDED 31ST MARCH 2008, THE LEARNED AO HAS OBSE RVED AND COME TO THE FOLLOWING CONCLUSIONS: (A) MS. MEETA MALHOTRA WAS RENDERING SERVICES TO T HE ASSESSEE AS A CONSULTANT AND NOT AS A SALARIED EMPLOYEE (OBS ERVATION); (B) HOWEVER, EXCEPT FOR RECEIPT OF PROFESSIONAL CH ARGES OF RS. 46,00,000/- FROM THE ASSESSEE, SHE HAS NO OTHER PRO FESSIONAL RECEIPTS; (C) ON THE AFORESAID PROFESSIONAL RECEIPTS, SHE HAS , CLAIMED EXPENDITURE OF RS. 36,47,785/- AND CONSEQUENTLY, HA S OFFERED NET INCOME OF RS.9,52,215/- TO TAX; (D) THE SERVICES ARE RENDERED ON A MONTHLY BASIS; AND (E) THERE EXIST AN EMPLOYER-EMPLOYEE RELATIONSHIP W HEREBY MS. MEETA MALHOTRA HAS NOT RENDERED CONSULTANCY SERVICE S BUT WAS UNDER DIRECT SUPERVISION CONTROL OF THE ASSESSE E. 13. IT WAS ALSO SUBMITTED THAT THOUGH THE AO HAS NO T SPELT OUT THE REASON FOR MAKING THE DISALLOWANCE, THE APPARENT RE ASON WAS THAT THE ASSESSEE OUGHT TO HAVE DEDUCTED TAX AT SOURCE U/S. 192 OF THE ACT, TREATING THE PAYMENT IN QUESTION AS A SALARY. IF IT IS CONS TRUED AS SALARY, THEN MS. MEETA MALHOTRA COULD NOT HAVE CLAIMED EXPENSES, EXC EPT STANDARD DEDUCTION. THE ASSESSEE FURTHER SUBMITTED THAT THE QUESTION WHETHER IT IS SALARY OR PROFESSIONAL INCOME IN THE HANDS OF MS. M EETA MALHOTRA, WILL HAVE NO BEARING ON THE ALLOWABILITY OF DEDUCTION IN THE HANDS OF THE ASSESSEE. IT WAS SUBMITTED THAT THE AO HAS NOT DISPUTED THE FACT THAT THE EXPENDITURE IN QUESTION HAS BEEN INCURRED WHOLLY & EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE AND THEREFORE DEDUCTION OU GHT TO HAVE BEEN ALLOWED. IT WAS ALSO POINTED OUT THAT EVEN IF A HI GHER RATE OF TAX OUGHT TO HAVE BEEN DEDUCTED TREATING THE SAME AS SALARY (U/S . 192 OF THE ACT), EVEN ITA NO.472/BANG/2012 PAGE 8 OF 9 THEN A DISALLOWANCE OF THE EXPENSES U/S. 40(A)(IA) OF THE ACT COULD NOT HAVE BEEN MADE AS THOSE PROVISIONS DO NOT APPLY TO PAYME NT OF SALARIES. 14. THE CIT(APPEALS), ON A CONSIDERATION OF THE ABO VE SUBMISSIONS, HELD AS FOLLOWS:- 4.2. HAVING EXAMINED THE RATIO ADOPTED BY THE AO AND THE GROUNDS RELIED UPON BY THE APPELLANT, I FIND THAT O NCE THE COMMERCIAL EXPEDIENCY OF A PAYMENT IS NOT QUESTIONE D, AND THE TDS IS ACTUALLY EFFECTED, THE QUESTION OF A PERCEIV ED MISAPPLICATION OF THE PARTICULAR TDS PROVISION BECO MES ACADEMIC. THE APPELLANT HAS ACCEPTED ITS LIABILITY TO DEDUCT THE TAX AT SOURCE. A CONSULTANCY AGREEMENT EXISTS, AND ITS GENUINENESS IS NOT CONTESTED Y THE AO WITH ANY RIGO UR. VARIOUS COURTS HAVE HELD THAT IT IS NOT FOR THE DEPARTMENT TO DICTATE THE OPERATIONS OF AN ASSESSEES BUSINESS, OR DICTATE TO HIM THE EXTENT OF COMMERCIAL EXPEDIENCY TO BE PURSUED. THE TECHNIC AL CONTRIBUTION OF THE CONSULTANT TO THE APPELLANT COM PANY IS NOT CONTESTED. I ALSO AGREE WITH THE DEFENCE OF THE APP ELLANT THAT THE PROVISIONS OF SEC 192 BEING OUTSIDE THE PURVIEW OF SEC 40(A)(IA), THE AO HAS PUT HIMSELF INTO A CONUNDRUM WHERE THE A DDITION CANNOT BE MADE UNDER THE LATTER SECTION ONCE SEC 19 2 IS INVOKED. IT IS ALSO CURIOUS TO SEE THAT THE VERY SAME AO IN THE ORDER FOR THE AY 2009-10 HAS ALLOWED THE SAME CHARGES WITHOUT DEM UR. ALL THIS IS REFLECTIVE OF THE FACT THAT THE ADDITION UN DER APPEAL BEFORE US WAS NOT MADE WITH PROPER APPLICATION OF MIND AND BASED ON SUFFICIENT EVIDENCE. I FIND THE ADDITION MADE TO BE UNSUSTAINABLE, AND ACCORDINGLY DELETE THE SAME. 15. AGGRIEVED BY THE ORDER OF THE AO, THE REVENUE H AS PREFERRED GROUND NO.3 BEFORE THE TRIBUNAL. 16. WE HAVE HEARD THE SUBMISSIONS OF THE LD. DR, WH O RELIED UPON THE ORDER OF THE ASSESSING OFFICER. WE ARE OF THE VIEW THAT THE ORDER OF THE CIT(APPEALS) DOES NOT CALL FOR ANY INTERFERENCE. AS RIGHTLY POINTED OUT BY HIM, ONCE COMMERCIAL EXPEDIENCY OF A PAYMENT IS ACC EPTED AND TDS HAS BEEN EFFECTED, THE DEDUCTION WILL HAVE TO BE ALLOWE D. WE ALSO FIND THAT ITA NO.472/BANG/2012 PAGE 9 OF 9 THERE WAS A CONSULTANCY AGREEMENT AND THE PAYMENT I N QUESTION PRIMA FACIE IS A PAYMENT FOR PROFESSIONAL SERVICES RENDERED. T HE AO SEEMS TO HAVE PROCEEDED ON A MISAPPREHENSION THAT THE NOMENC LATURE GIVEN TO A PAYMENT BY THE PAYER WILL BE CONCLUSIVE IN THE HAND S OF THE PAYEE. AS RIGHTLY HELD BY THE CIT(APPEALS), THE PAYMENT IN QU ESTION WAS A PAYMENT FOR PROFESSIONAL SERVICES RENDERED AND COULD NOT BE TREATED AS A PAYMENT OF SALARY. IN ANY EVENT, THE DISALLOWANCE OF THIS LEGITIMATE BUSINESS EXPENSES IN THE HANDS OF THE ASSESSEE IS WITHOUT AN Y BASIS AND CANNOT BE SUSTAINED. WE THEREFORE DISMISS GROUND NO.3 RAISED BY THE REVENUE. 17. IN THE RESULT, THE APPEAL BY THE REVENUE IS DIS MISSED. PRONOUNCED IN THE OPEN COURT ON THIS 11 TH DAY OF JANUARY, 2013. SD/- SD/- ( JASON P. BOAZ ) ( N.V. VASUDEVAN ) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 11 TH JANUARY, 2013. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. C IT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.