Zubeda Real Estate Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 4749/DEL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98062 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 18-11-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 01-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R SAMPATH
• Keywords: Capital asset
• Section: 143(3); 234B; 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H NEW DELHI BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 4749/DEL/2011 ASSTT.YEAR: 2007-08 ZUBEDA REAL ESTATE PVT. LTD., VS I NCOME TAX OFFICER, 1-E, NAAZ CINEMA COMPLEX, WARD-18(4), JHANDEWALAN EXTENSION, NEW DELHI. NEW DELHI. (PAN: AAACZ2678Q) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI R.S. SINGHVI, CA RESPONDENT BY : SHRI S .R. SAMPATH, SR. DR DATE OF HEARING: 18.11.015 DATE OF PRONOUNCEMENT: 23.12.2015 O R D E R PER L.P. SAHU, A.M. THIS APPEAL BY THE ASSESSEE HAS BEEN FILED AGAINST THE ORDER OF THE CIT(A)-XXI, NEW DELHI DATED 2.9.2011 WITH THE FOLLO WING GROUNDS OF APPEAL:- 1. THAT THE IMPUGNED ORDER DATED 02.09.2011 PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX-(APPEALS)-XXI, N EW DELHI IS BAD IN LAW AND WRONG ON FACTS. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LD. COMMISSIONER OF INCOME-TAX(APPEALS)-XXI HAS ERRED I N LAW IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN M AKING DISALLOWANCE U/S THE INCOME-TAX ACT, 1961 AMOUNTING TO RS. 14,55,376/- PAID BY THE ASSESSEE TO THE CONSOLIDATO R FOR TRANSFER OF RIGHTS. I.T.A. NO. 4741/DEL/2014 ASSESSMENT YEAR 2007-08 2 2.1 THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, TH E LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-XXI HAS ERRED IN HOLDING THAT THE CONSOLIDATOR WAS WORKING AS AN AGENT OF TH E ASSESSEE AND HENCE THE ASSESSEE OUGHT TO HAVE DEDUCTED TDS O N AMOUNT PAID TO THE CONSOLIDATOR U/S 194C OR 194H OF THE IN COME-TAX ACT, 1961. 3. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, TH E LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-XXI HAS ERRED IN LAW IN NOT APPRECIATING THAT THE DISALLOWANCE OF THE SAID SUM OF RS. 14,55,376/- WHICH IS INCLUDED IN PURCHASES DURING T HE YEAR HAS NO IMPACT ON APPELLANTS PROFIT LIABLE TO TAX AS TH E ENTIRE PURCHASES FROM PART OF CLOSING STOCK OF THE APPELLA NT AT THE YEAR END. 2. THE FACTS ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY INCORPORATED ON 16.03.2006 AND ENGAGED IN THE BUSINESS OF REAL ESTA TE AND OTHER ALLIED ACTIVITIES AS STATED IN THE MEMORANDUM & ARTICLES OF ASSOCIATI ON OF THE APPELLANT COMPANY. THE ASSESSEE COMPANY HAD INCURRED A LOSS OF RS. 20,211/- AS PER PROVISIONS OF INCOME TAX ACT, 1961 DURING THE FINAN CIAL YEAR 2006-07. HOWEVER, RETURN OF INCOME WAS FILED ON 23.02.2008. DUE TO LATE FILING OF RETURN THE LOSS OF RS.20,211/- HAD NOT BEEN CARRIED FORWA RD. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143(3) OF THE INCOME T AX ACT, 1961 VIDE ASSESSMENT ORDER DATED 18.12.2009 AT A TOTAL INCOME OF RS.14,55,376/- THEREBY CREATING ADDITIONAL DEMAND OF RS. 6,71,135/- (INCL UDING INTEREST U/S 234A AND U/S 234B OF THE ACT AND RS. 19,595/- AND RS.1,61,66 0/- RESPECTIVELY). THE ASSESSING OFFICER MADE AN ADDITION OF RS.14,55,376/ - BY HOLDING THAT THE PAYMENT OF RS. 14,55,376/- AS CONSOLIDATION CHARGES HAD BEEN MADE WITHOUT DEDUCTION OF TDS AND, HENCE, MADE CONTRAVENTIONS OF PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. I.T.A. NO. 4741/DEL/2014 ASSESSMENT YEAR 2007-08 3 3. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CI T(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. AGGRIEVED, THE ASSESSEE IS I N APPEAL BEFORE US. 4. CHALLENGING THE IMPUGNED ORDER, THE LEARNED COUNSEL OF THE ASSESSEE HAS CONTENDED THAT ON THE FACTS AND CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) HAS ERRED IN LAW IN UPHOLDING THE ACTION OF THE ASSESSI NG OFFICER IN MAKING DISALLOWANCE U/S 40(A)(IA) OF THE INCOME TAX ACT, 1 961 AMOUNTING TO RS. 14,55,376/- PAID BY THE ASSESSEE TO THE CONSOLIDAT OR FOR TRANSFER OF RIGHTS; THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE CONSOLIDATOR WAS WORKING AS AN AGENT OF TH E ASSESSEE AND HENCE THE ASSESSEE OUGHT TO HAVE DEDUCTED TDS ON AMOUNT PAID TO THE CONSOLIDATOR U/S 194C OR 194H OF THE INCOME TAX ACT, 1961; AND THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW IN NOT APPRECIATING THAT THE DISAL LOWANCE OF SAID SUM OF RS.14,55,376/- WHICH IS INCLUDED IN PURCHASES DURIN G THE YEAR HAS NO IMPACT ON APPELLANT'S PROFIT LIABLE TO TAX AS THE ENTIRE PURC HASES FORM PART OF CLOSING STOCK OF THE APPELLANT AT THE YEAR END. 5. THE ID. COUNSEL FOR THE ASSESSEE HAS FURTHER PLACED RELIANCE ON THE TRIBUNAL DECISION (AUTHORED BY ONE OF US - THE JM), DATED 05 .10.2011, IN ITA NO.2361/DEL/2011 AND 1953/DEL/2011 FOR ASSESSMENT Y EAR 2007-08 REPORTED AS 142 TTJ 545 (DEL) IN THE CASE OF 'FINIAN ESTATES DEVELOPERS (P) LTD.' (COPY AT PAGES 40-50 OF THE APPEAL FILE). THE ID. COUNSEL FOR THE ASSESSEE HAS I.T.A. NO. 4741/DEL/2014 ASSESSMENT YEAR 2007-08 4 CONTENDED THAT IN 'FINIAN ESTATES DEVELOPERS (P) LT D. (SUPRA), UNDER SIMILAR CIRCUMSTANCES, THE PROVISIONS OF SECTION 40(A) (IA) OF THE IT ACT HAVE BEEN HELD TO BE NOT APPLICABLE. 6. LD. DR ON THE OTHER HAND, HAS STRONGLY RELIE D ON THE IMPUGNED ORDER. IT HAS BEEN CONTENDED THAT THE ASSESSEE HAS NOT BEEN A BLE TO REBUT THE CATEGORICAL FINDINGS OF THE CIT(A) TO THE EFFECT THAT THE PROVI SIONS OF SECTION 40(A)(IA) OF THE ACT ARE SQUARELY ATTRACTED AND THE ASSESSEE IS GUILTY OF CONTRAVENTION OF SUCH PROVISIONS, SINCE THE RELATIONSHIP BETWEEN THE ASSESSEE AND M/S VEEL HAS NOT BEEN ESTABLISHED TO BE THAT OF PRINCIPAL AND PR INCIPAL; THAT RATHER, THIS RELATIONSHIP IS THAT OF PRINCIPAL AND AGENT; THAT M /S VEEL WAS ACTING LIKE AN AGENT BETWEEN THE SELLER OF THE PROPERTY AND THE AS SESSEE COMPANY, WHICH FINDING OF THE AUTHORITIES BELOW HAS ALSO NOT BEEN SUCCESSFULLY CONTROVERTED BY THE ASSESSEE; THAT THEREFORE, THE FINDINGS OF THE L D. CIT(A) IN THE CASE OF THE ASSESSEE ARE WELL PLACED, REQUIRING NO INTERFERENCE WHATSOEVER; AND THAT THE APPEAL, THEREFORE, REQUIRES TO BE DISMISSED OUTRIGH T, HAVING NO MERIT. 7. WE HAVE HEARD BOTH THE PARTIES AND HAVE PERUSE D THE MATERIAL ON RECORD. THE MATTER, IT IS SEEN, IS SQUARELY COVERED IN FAVO UR OF THE ASSESSEE BY FINIAN ESTATES DEVELOPERS (P) LTD. (SUPRA) INASMUCH AS IN THAT CASE, THE VERY SAME AGREEMENT AS THE ONE UNDER CONSIDERATION HEREIN, WA S AT ISSUE. WHILE DECIDING THE MATTER IN FAVOUR OF THE ASSESSEE THEREIN, IT WA S HELD AS FOLLOWS:- I.T.A. NO. 4741/DEL/2014 ASSESSMENT YEAR 2007-08 5 23. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE MATERIAL ON RECORD. THE AO OBSERVED THAT THE ASSESSEE HAD SH OWN PURCHASES AND CLOSING STOCK OF LAND AT RS.60,23,16, 022/-. THIS INCLUDED A SUM OF RS.4,20,15,681/- PAID BY THE ASSE SSEE TO M/S. VIKRAM ELECTRIC EQUIPMENT P. LTD. M/S. VIKRAM ELECT RIC EQUIPMENT P. LTD. HAD BEEN APPOINTED BY THE ASSESSE E AS A CONSOLIDATOR TO ACQUIRE AND CONSOLIDATE THE LAND HO LDING. IT WAS OBSERVED BY THE AO THAT AS PER THE MOU WITH VIKRAM ELECTRIC EQUIPMENT P. LTD., PAYMENTS WERE TO ACCRUE TO VIKRA M ELECTRIC EQUIPMENT P. LTD. ONLY ON ACQUISITION OF A MINIMUM OF 27 ACRES OF LAND. OBSERVING THAT THE CONSOLIDATOR, I.E., VIK RAM ELECTRIC EQUIPMENT P. LTD. HAD NOT CONSOLIDATED THE REQUISIT E MINIMUM 27 ACRES OF LAND DURING THE YEAR, THE AO DISALLOWED THE AMOUNT OUT OF PURCHASES. ACCORDINGLY, HE ALSO REDUCED THE CLOSING STOCK BY A SIMILAR AMOUNT. THE CLOSING STOCK WAS THUS DET ERMINED AT ` 54,03,00,341/-. 24. BEFORE THE LD. CIT(A), THE ASSESSEE CONTENDED T HAT THE AMOUNT INVOLVED WAS NOT OF RS.4,20,15,641/-, SINCE VIKRAM ELECTRIC EQUIPMENT P. LTD. HAD BEEN PAID ONLY RS.1,24,33,376 /-. IT WAS ON THIS CONTENTION OF THE 1953(DEL)2011 ASSESSEE THAT THE LD. CIT(A) DIRECTED THE AO TO VERIFY THE ACTUAL AMOUNT INVOLVE D. 25. IT HAS BEEN MAINTAINED BY THE ASSESSEE ALL THRO UGH THAT THE PAYMENT TO VIKRAM ELECTRIC EQUIPMENT P. LTD. WAS ON ACCOUNT OF TRANSFER OF CERTAIN RIGHTS OF VIKRAM ELECTRIC EQUIP MENT P. LTD. IN THE LANDS TRANSFERRED TO THE ASSESSEE AND WAS NOT T OWARDS ANY SERVICES RENDERED. AS A CONSOLIDATOR, VIKRAM ELECTR IC EQUIPMENT P. LTD. WAS TO CONTACT THE LOCAL FARMERS IN AND ARO UND GURGAON, WHO WERE WILLING TO SELL THEIR LAND. VIKRAM ELECTRI C EQUIPMENT P. LTD. WAS MAKING PAYMENTS FROM ITS ACCOUNT TO THE FA RMERS AND THERETO HAVE CERTAIN RIGHTS IN THE LAND. ON THE ULT IMATE TRANSFER OF LAND TO THE ASSESSEE THROUGH VIKRAM ELECTRIC EQU IPMENT P. LTD., THE FINAL PAYMENT WAS TO BE MADE TO THE FARME RS. TOWARDS THE RIGHT OF VIKRAM ELECTRIC EQUIPMENT P. LTD., 2% OF THE COST OF LAND (IN SOME CASES, EVEN A HIGHER AMOUNT) WAS TO B E PAID TO VIKRAM ELECTRIC EQUIPMENT P. LTD., AS MUTUALLY AGRE ED. THIS WAS THE MUTUALLY AGREED PRICE. VIKRAM ELECTRIC EQUIPMEN T P. LTD. WORKED FOR LAND ACQUISITION AND AFTER SCRUTINY OF T HE CONCERNED DOCUMENTS OF THE LAND, VIKRAM ELECTRIC EQUIPMENT P. LTD. WOULD SUGGEST THE APPROPRIATE LAND FOR PURCHASE BY THE AS SESSEE. VIKRAM ELECTRIC EQUIPMENT P. LTD. THUS ACTED WITH T HE FARMERS ON ITS OWN ACCOUNT RATHER THAN FOR AND ON BEHALF OF TH E ASSESSEE, ON I.T.A. NO. 4741/DEL/2014 ASSESSMENT YEAR 2007-08 6 PRINCIPLE TO PRINCIPLE BASIS, WITH THE FARMERS ON T HE 1953(DEL)2011 ONE HAND AND THE ASSESSEE ON THE OTHE R. THE ASSESSEE CONTENDS THAT THIS BEING SO, THE PROVISION S OF NEITHER SECTION 194 C , NOR SECTION 194 H GET ATTRACTED TO THE PAYMENT MADE BY THE ASSESSEE TO VIKRAM ELECTRIC EQUIPMENT P . LTD. THE PAYMENT ALONG WITH PAYMENT MADE TO THE FARMERS DIRE CTLY REPRESENTED THE PURCHASE OF THE COST OF LAND AND HA D BEEN CORRECTLY TREATED AS SUCH IN THE ASSESSEE'S BOOKS O F ACCOUNT. IT HAS BEEN CONTENDED THAT ALTERNATIVELY, IN ANY CASE, THE PAYMENT MADE TO VIKRAM ELECTRIC EQUIPMENT P. LTD. HAS NOT A FFECTED THE TAXABLE PROFITS OF THE ASSESSEE DURING THE YEAR. TH E TOTAL PURCHASES WERE LYING AS CLOSING STOCK, AS OBSERVED BY THE TAXING AUTHORITIES ALSO AND THE EFFECT OF ADJUSTMENT WITH REGARD TO THE AMOUNT PAID TO VIKRAM ELECTRIC EQUIPMENT P. LTD. WO ULD ARISE ONLY ON AND IN THE INSTANCES OF SALE OF LAND BY THE ASSESSEE . IT IS AS SUCH THAT IT HAS BEEN CLAIMED THAT NO DISALLOWAN CE U/S 40(A)(IA) OF THE ACT IS CALLED FOR, MUCH LESS ANY C ONSEQUENTIAL ACTION U/S 201 OF THE ACT. IT HAS BEEN CONTENDED TH AT VIKRAM ELECTRIC EQUIPMENT P. LTD. HAD AN IMPORTANT ROLE TO PLAY AS A CONSOLIDATOR, SINCE THE ASSESSEE REQUIRED CONTIGUOU S LAND HOLDINGS IN ORDER TO DEVELOP A COLONY. IN CASE ANY LAND WHICH WAS AGREED TO BE ACQUIRED BY VIKRAM ELECTRIC EQUIPM ENT P. LTD. WAS NOT FOUND TO BE SUITABLE, IT WAS VIKRAM ELECTRI C EQUIPMENT P. LTD. WHICH WOULD HAVE TO BEAR THE CONSEQUENCES, INDICATING THAT VIKRAM ELECTRIC EQUIPMENT P. LTD. WAS NOT 1953 (DEL)2011 ACTING AS AN AGENT ON BEHALF OF THE ASSESSEE, BUT W AS WORKING ON A PRINCIPLE TO PRINCIPLE BASIS, INDEPENDENTLY. 26. THE STAND OF THE DEPARTMENT, ON THE OTHER HAND, HAS BEEN THAT MOU SIGNED BY THE ASSESSEE AND VIKRAM ELECTRIC EQUIPMENT P. LTD. LAYS DOWN THAT VIKRAM ELECTRIC EQUIPMENT P. LTD. WAS ACTING AS AN AGENT OF THE ASSESSEE, RENDERING SERVI CES, FOR WHICH, THE PROVISIONS OF SECTION 194 H OF THE ACT ARE APPL ICABLE AND IT IS CORRECTLY APPLIED BY THE LD. CIT(A). 27. IN THIS REGARD, IT IS SEEN THAT CLAUSE 3.2 OF T HE MOU BETWEEN THE ASSESSEE AND VIKRAM ELECTRIC EQUIPMENT P. LTD. MAKES IT CLEAR THAT VIKRAM ELECTRIC EQUIPMENT P. LTD. OR ITS AGENT AGREED TO ASSIGN THEIR RIGHTS TO PURCHASE THE LAND IN FAVO UR OF THE ASSESSEE. IT WOULD BE APPROPRIATE TO REPRODUCE HERE , THE SAID CLAUSE 3.2:- I.T.A. NO. 4741/DEL/2014 ASSESSMENT YEAR 2007-08 7 3.2 IN CONSIDERATION OF THE CONSOLIDATOR OR ITS AGE NT/NOMINEE ASSIGNING ITS RIGHTS TO PURCHASE THE LAND IN FAVOUR OF THE BUYER COMPANY AND CAUSING THE LAND OWNERS TO EXECUTE THE SALE DEEDS DIRECTLY IN FAVOUR OF THE BUYER COMPANY, THE BUYER COMPANY SHALL PAY THE CONSOLIDATOR SUCH SUM AS MAY BE MUTUALLY AGREED. HOWEVER, IT IS SPECIFICALLY AGREED BY THE CONSOLIDATOR THAT NO SUM SHALL ACCRUE TO IT ON THIS ACCOUNT TILL IT PROCURES 27 ACRES OF LAND FOR THE BUYER COMPANY (UN LESS 1953(DEL)2011 THE BUYER COMPANY DECIDES TO PROCURE LESS THAN 27 ACRES THROUGH THE CONSOLIDATOR) AND ALL THE ISSU ES RELATING TO POSSESSION AND MUTATION F SUCH LAND ARE SETTLED TO THE SATISFACTION OF THE BUYER COMPANY.' 28. THE ABOVE CLAUSE ALSO MAKES IT EVIDENT THAT UNL ESS THE ASSESSEE DECIDED TO PROCURE LESS THAN 27 ACRES OF L AND THROUGH VIKRAM ELECTRIC EQUIPMENT P. LTD., VIKRAM ELECTRIC EQUIPMENT P. LTD., WAS TO PROCURE 27 ACRES OF LAND FOR THE AS SESSEE, FAILING WHICH, NO PAYMENT WAS TO BE MADE BY THE ASSESSEE TO VIKRAM ELECTRIC EQUIPMENT P. LTD. 29. THIS CLEARLY SHOWS THAT VIKRAM ELECTRIC EQUIPME NT P. LTD. WAS TRANSACTING ON A PRINCIPLE TO PRINCIPLE BASIS A ND IT CANNOT BE SAID THAT THE PAYMENT WAS MADE BY THE ASSESSEE TO V IKRAM ELECTRIC EQUIPMENT P. LTD. FOR RENDERING OF ANY SER VICE. THE PROVISIONS OF SECTION 194 H OF THE ACT ARE, THEREFO RE, NOT AT ALL APPLICABLE. 30. MOREOVER, THE AMOUNT PAID TO VIKRAM ELECTRIC EQ UIPMENT P. LTD. WAS DULY REFLECTED BY THE ASSESSEE IN THE PURC HASES CLOSING STOCK. NO SALES HAD BEEN MADE DURING THE YEAR UNDER CONSIDERATION. IT HAS NOT BEEN SHOWN TO BE OTHERWIS E. IN SUCH A SCENARIO, IN OUR CONSIDERED OPINION, NO DISALLOWANC E IS CALLED FOR. 31. FURTHER STILL, THE CHART AT PAGE 16 OF THE ASSE SSEE'S PAPER BOOK SHOWS THAT ALMOST 2% OF THE SALE VALUE WAS BEI NG PAID BY THE ASSESSEE TO VIKRAM ELECTRIC EQUIPMENT P. LTD. A S CONSIDERATION FOR TRANSFERRING VIKRAM ELECTRIC EQUI PMENT P. LTD.'S RIGHTS. THIS WAS IN TERMS OF THE AFORE-MENTI ONED CLAUSE 3.2 OF THE MOU BETWEEN THE ASSESSEE AND VIKRAM ELECTRIC EQUIPMENT P. LTD. IT HAS NOT BEEN SHOWN IF SUCH PAY MENT IS NOT A FAIR COMPENSATION PAID BY THE ASSESSEE TO VIKRAM EL ECTRIC EQUIPMENT P. LTD. WHICH, ANYHOW, IS NOT AN IMPEDIME NT IN I.T.A. NO. 4741/DEL/2014 ASSESSMENT YEAR 2007-08 8 HOLDING, AS ABOVE, THAT THE TRANSACTIONS BETWEEN TH E ASSESSEE AND VIKRAM ELECTRIC EQUIPMENT P. LTD. ARE ON A PRINCIPL E TO PRINCIPLE BASIS, NOT ATTRACTING THE PROVISIONS OF SECTION 194 H OF THE ACT. 32. PERTINENTLY, NO ADDITION HAVING BEEN MADE FOR T HE YEAR BY THE AO, THE ALTERNATE CONTENTION OF THE ASSESSEE TO THE EFFECT THAT NO ADDITION CAN BE MADE DURING THE YEAR, STANDS ACCEPT ED BY BOTH THE AUTHORITIES BELOW. 33. THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT IN ANY CASE DO NOT APPLY, THE ASSESSEE HAVING NOT CLAIMED ANY DEDU CTION FOR ANY EXPENSES ON ACCOUNT OF PAYMENT TO VIKRAM ELECTRIC E QUIPMENT P. LTD , EITHER IN ITS PROFIT AND LOSS ACCOUNT OR IN T HE COMPUTATION OF TAXABLE INCOME FILED. IT WAS ONLY THAT THE AO RECOR DED A LOSS OF RS.19,700/-. THIS OBVIOUSLY, DID NOT INCLUDE ANY AD DITION OF EITHER RS.4.02 CRORES OR RS.1.24 CRORES. 34. IN VIEW OF THE ABOVE DISCUSSIONS, THE GRIEVANCE OF THE ASSESSEE IS FOUND TO BE CORRECT AND IS ACCEPTED AS SUCH. 8. THE ABOVE JUDGMENT IN THE CASE OF FINIAN ESTATE S (SUPRA) HAS NOT BEEN SHOWN TO HAVE BEEN SET ASIDE OR OVERTURNED ON APPEA L. THE FACTS PRESENTLY BEFORE US ARE IN PARI MATERIA WITH THOSE IN FINIAN ESTATES (SUPRA). THAT BEIN G SO, THE FINDING OF THE LD. CIT(A) TO THE EFFECT THA T THE RELATIONSHIP BETWEEN THE ASSESSEE COMPANY AND M/S VEEL IS THAT OF PRINCIPAL AND AGENT AND NOT OF PRINCIPAL AND PRINCIPAL, IS NOT FOUND TO BE CORRECT . IN THIS REGARD, CLAUSE 3.2 OF THE MOU BETWEEN THE ASSESSEE AND M/S VEEL AS CONSID ERED IN FINIAN ESTATES(SUPRA) NEEDS TO BE REITERATED AND STRESSED . FURTHER, DURING THE YEAR, UNDISPUTEDLY, NO SALES WERE MADE, DUE TO WHICH FACT ITSELF NO DISALLOWANCE IS CALLED FOR, AS, AGAIN, HELD IN FINIAN ESTATES(SUP RA). 9. IN VIEW OF THE ABOVE, FINDING MERIT IN THE GRIEV ANCE SOUGHT TO BE RAISED BY THE ASSESSEE, THE SAME IS ACCEPTED. I.T.A. NO. 4741/DEL/2014 ASSESSMENT YEAR 2007-08 9 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23.12.2015 SD/- SD/- (I.C. SUDHIR) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 23RD DECEMBER 2015 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. C.I.T.(A) 4. C.I.T. 5. DR BY ORDER ASSTT.REGISTRAR