The Deputy Commissioner of Income tax, Jalandhar V. M/s. Sarup Tanneries Ltd., Jalandhar

ITA 476/ASR/2008

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9614 (ITAT-AMRITSAR)
• Duration Of Justice: 7 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-06-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 07-10-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKAR
• Assessee Lawyers: Y K SUD
• Keywords: Wholly owned subsidiary; Commercial expediency

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NO.476(ASR)/2008 ASSESSMENT YEAR: 2005-06 DY. CIT, RANGE-III, JALANDHAR. VS. M/S SARUP TANNERIES LTD. P.O. RAMDASPURA, JALANDHAR. PAN: (APPELLANT) (RESPONDENT) APPELLANT BY: SH. BHAWANI SHANKAR (DR.) RESPONDENT BY: SH. Y.K. SUD. (CA.) DATE OF HEARING: 30.06.2016 DATE OF PRONO UNCEMENT: 10.08.2016 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY REVENUE AGAINST THE ORD ER OF LEARNED CIT(A), JALANDHAR, DATED 24.07.2008 FOR ASST. YEAR: 2005-06. 2. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS OF A PPEAL. 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN D ELETING THE ADDITION OF RS.3,86,63,896/- MADE BY THE A.O BY DISALLOWING LOS S CLAIMED AS AMOUNT WRITTEN OFF DUE FROM SUBSIDIARY COMPANY. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN DE LETING THE DISALLOWANCE OF RS.86,183/- MADE OUT OF FOREIGN TRA VELING EXPENSES AND RS.1,00,000/- OUT OF CAR EXPENSES. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN A LLOWING THE ASSESSEE TO CARRY FORWARD A LOSS OF RS.8,76,277/-. 4. IT IS PRAYED THAT THE ORDER OF THE LEARNED COMMI SSIONER OF INCOME TAX(APPEALS) BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 3. AT THE OUTSET, THE LEARNED AR SUBMITTED THAT THE APPEAL OF REVENUE WAS EARLIER DISPOSED OFF BY THE HONBLE TRIBUNAL VI DE ORDER DATED 23 RD ITA NO.476 (ASR)/2008 ASST. YEA R: 2005-06 2 JANUARY, 2009 WHEREIN THE HONBLE TRIBUNAL HAD PART LY ALLOWED THE APPEAL OF REVENUE BY REVERSING THE ORDER OF LEARNED CIT(A) WHICH THE REVENUE HAD RAISED GROUND NOS. 1 & 3 OF ITS APPEAL. THE LEARNED AR FURTHER SUBMITTED THAT THE ASSESSEE FILED MISCELLAN EOUS APPLICATION AND THE TRIBUNAL RECALLED PARTIALLY THE ABOVE ORDER BY HOLDING THAT THE TRIBUNAL HAD OMITTED TO CONSIDER THE HONBLE SUPREM E COURT JUDGMENT IN THE CASE OF AMALGAMATIONS PVT. LTD VS. CIT (1969)226 ITR 188(SC ). IT WAS SUBMITTED THAT IN THE MEAN TIME ASSESSEE HAD AP PROACHED THE HONBLE PUNJAB & HARYANA HIGH COURT AND THE HONBLE PUNJAB & HARYANA HIGH COURT AFTER NOTING DOWN THE ENTIRE FAC TS HAD RESTORED THE ISSUE BACK TO THE OFFICE OF TRIBUNAL TO DECIDE THE ISSUES AFRESH AND THEREFORE, PARTIES ARE BEFORE THIS TRIBUNAL. 4. AS REGARDS MERITS OF THE CASE, THE LEARNED AR HE AVILY PLACED HIS RELIANCE ON THE ORDER OF LEARNED CIT(A) AND ALSO RE LIED ON THE JUDGMENTS LISTED IN THE PAPER BOOK AT PAGE 1 TO 48. 5. THE LEARNED DR, ON THE OTHER HAND, HEAVILY PLACE D HIS RELIANCE ON THE ORDER OF ASSESSING OFFICER. 6. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THAT ASSESS EE DERIVES ITS INCOME FROM MANUFACTURE AND SALE OF LEATHER GOODS, SHOE UP PER, SOLES ETC. DURING THE ASSESSMENT PROCEEDINGS FOR THE YEAR UNDE R CONSIDERATION THE ITA NO.476 (ASR)/2008 ASST. YEA R: 2005-06 3 ASSESSING OFFICER OBSERVED THAT ASSESSEE HAD DEBITE D IN ITS P&L ACCOUNT AN AMOUNT OF RS.3,86,63,836/- ON ACCOUNT OF LOSS DU E TO IRRECOVERABILITY OF AMOUNT DUE FROM ITS SUBSIDIARY COMPANY IN U.S.A . THE ASSESSEE HAD ISSUED STANDBY LETTER OF GUARANTEE ON BEHALF OF ITS SUBSIDIARY IN U.S.A WHICH THE LENDERS HAD INVOKED AND ASSESSEE COMPANY HAD TO PAY THE GUARANTEED AMOUNT AND THEREFORE THE AMOUNT HAD BECO ME RECOVERABLE FROM ITS SUBSIDIARY BUT WHICH THE SUBSIDIARY COULD NOT PAY AND THEREFORE, THE ASSESSEE HAD WRITTEN IT OFF IN ITS P&L ACCOUNT. THE ASSESSING OFFICER ALSO OBSERVED THAT ASSESSEE HAD CLAIMED CARRY FORWA RD OF CAPITAL LOSS OF RS.8,76,277/- ON ACCOUNT OF LOSS OF SHARE CAPITAL I NVESTMENT IN ITS SUBSIDIARY COMPANY IN U.S.A. THE ASSESSING OFFICER HELD THAT SUCH LOSSES CLAIMED BY ASSESSEE WERE NOT RELATED TO THE BUSINESS OF ASSESSEE AND THEREFORE, WERE NOT ALLOWABLE AND THEREFORE, HE MADE AN ADDITION OF AMOUNTS REPRESENTED BY SUCH AMOUNTS AND DID NOT ALL OW CARRY FORWARD OF CAPITAL LOSS. ON APPEAL BEFORE LEARNED CIT(A), T HE LEARNED CIT(A) DELETED THESE ADDITIONS ALONG WITH OTHER ADDITIONS. 7. ON FURTHER APPEAL FILED BY THE REVENUE BEFORE TH E HONBLE TRIBUNAL, THE HONBLE TRIBUNAL PARTLY ALLOWED THE APPEAL OF R EVENUE. THE ASSESSEE FILED MISCELLANEOUS APPLICATION AGAINST THE ORDER D ATED 23.1.2009 PASSED BY THE HONBLE TRIBUNAL AND THE ITAT IN ITS ORDER I N M.A. NO.46(ASR)/2009 VIDE ORDER DATED 30 TH JUNE, 2010 PARTIALLY RECALLED ITS EARLIER ORDER BUT DID NOT ADJUDICATE ON THE ISSUE A FTER THE RECALL. THE ITA NO.476 (ASR)/2008 ASST. YEA R: 2005-06 4 HONBLE TRIBUNAL HAD RECALLED THE ISSUE OF ALLOWABI LITY OF AMOUNT WHICH THE ASSESSEE HAD DEBITED IN ITS P&L ACCOUNT. HOWEVE R, THE HONBLE TRIBUNAL HAD DISMISSED THE OTHER ISSUE RAISED IN MI SC. APPLICATION RELATING TO CARRY FORWARD OF CAPITAL LOSS. IN THE M EAN TIME THE ASSESSEE HAD APPROACHED THE HONBLE PUNJAB & HARYANA HIGH CO URT AND THE HONBLE PUNJAB & HARYANA HIGH COURT NOTING DOWN ALL THE MATERIAL FACTS RESTORED THE MATTER BACK TO THE OFFICE OF TRIBUNAL AND DIRECTED THE TRIBUNAL TO ADJUDICATE THE ISSUES PENDING BEFORE IT . THE OPERATIVE PART OF THE HONBLE COURT IS REPRODUCED BELOW. 3. IT WAS POINTED OUT BY LEARNED COUNSEL FOR THE P ARTIES THAT AN APPLICATION UNDER SECTION 254(2) OF THE ACT BEARING MA NO.46(AS R)2009 WAS FILED BY THE ASSESSEE. THE TRIBUNAL VIDE ORDER DATED 30.6.20 10 CORRECTED THE MISTAKE ON ACCOUNT OF NOT HAVING NOTICED THE JUDGME NT OF THE SUPREME COURT IN CIT VS. M/S AMALGAMATIONS PRIVATE LIMITED (1997) 226 ITR 188. IT WAS OBSERVED BY THE TRIBUNAL THAT THE APPLICABILITY OF THE AFORESAID DECISION CANNOT BE ADJUDICATE UNDER THE PROVISIONS OF SECTION 254(2) OF THE ACT AS IT IS COVERED UNDER SECTION 254(1) OF THE AC T. THE SAID APPLICATION WAS, THUS, PARTLY ALLOWED BY RECALLING ITS EARLIER ORDER ON THIS ASPECT. THEREAFTER, REVENUE ALSO FILED MA NO.12(ASR)/201 UN DER SECTION 254(2) OF THE ACT AGAINST THE ORDER DATED 30.6.2010 WHICH WAS DISMISSED BY THE TRIBUNAL VIDE ORDER DATED 19.11.2012. THE REVENUE F ILED APPEAL BEARING ITA NO.53 OF 2013 ASSAILING THE SAID ORDER WHICH WA S DISMISSED BY THIS COURT ON 9.4.2015 WITH THE FOLLOWING OBSERVATIONS:- 3. THE APPELLANT FILED M.A. NO.12(ASR)/2011 UNDER SECTION 254(2) OF THE ACT AGAINST THE ORDER DATED 30.06.201 0 WHICH WAS DISMISSED BY THE IMPUGNED ORDER AND JUDGMENT DATED 19.11.2012. IN VIEW OF WHAT WE HAVE MENTIONED EARLI ER, THE APPELLANT IS IN ANY EVENT NOT WITHOUT A REMEDY. HOW EVER, THIS ORDER IN AN APPLICATION UNDER SECTION 254(2) IS NOT APPEALABLE. 4. NEEDLESS TO ADD THAT THE DECISION IN ITA-472-200 9, IF DECIDED BEFORE THE TRIBUNAL DECISIONS THE MATTER UNDER SECT ION 254(1), WOULD HAVE ITS OWN EFFECT.. 4. LEARNED COUNSEL FOR THE REVENUE PRODUCED THE REC ORD OF ITA NO.54 OF 2013 FOR THE PERUSAL OF THE COURT. ITA NO.476 (ASR)/2008 ASST. YEA R: 2005-06 5 5. IT WAS FURTHER SUBMITTED BY LEARNED COUNSEL FOR THE PARTIES THAT THE TRIBUNAL AFTER PARTIALLY RECALLING ITS ORDER DATED 23.1.2009 WHICH HAS BEEN IMPUGNED IN THIS APPEAL HAD KEPT THE MATTER PENDING REGARDING ADMISSIBILITY OF THE DEDUCTION. 6. IT WAS PRAYED BY LEARNED COUNSEL FOR THE PARTIES THAT IN VIEW OF THE SUBSEQUENT DEVELOPMENTS THAT HAVE TAKEN PLACE AFTER THE FILING OF THE APPEAL, THE PRESENT APPEAL BE DISPOSED OF BY DIRECT ING THE TRIBUNAL TO ADJUDICATE THE ISSUE PENDING BEFORE IT IN ACCORDANC E WITH LAW WITHOUT BEING INFLUENCED BY ANY FINDINGS OR OBSERVATION NOT ICED BY THE TRIBUNAL IN ITS EARLIER ORDER DATED 23.1.2009 IN THAT REGARD. O RDER ACCORDINGLY. 7. THE APPEAL STANDS DISPOSED OF IN THE MANNER INDICAT ED ABOVE. THEREFORE, IN VIEW OF THE ABOVE FINDINGS OF HONBLE COURT, WE HAVE AGAIN HEARD THE PARTIES ON THE ISSUE PENDING BEFORE IT AN D HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. IN VIEW OF THE HONB LE COURTS ORDER WE HAVE TO DECIDE ON THE FOLLOWING ISSUE ONLY. WHETHER LEARNED CIT(A) HAS RIGHTLY ALLOWED RELIEF T O THE ASSESSEE BY DELETING THE ADDITION OF RS,3,86,63,836/-. WE FIND THAT ASSESSEE COMPANY OPENED ITS WHOLLY OWN ED SUBSIDIARY IN THE NAME OF SARUP FOOTWEAR ASSEMBLY CORPORATION IN USA FOR MANUFACTURING AND SALE OF FOOTWEARS WHICH IS THE MA IN BUSINESS OF THE COMPANY. IT STOOD GUARANTEE FOR THE WORKING CAPITAL OF THE SUBSIDIARY COMPANY TO THE EXTENT OF RS.3,86,63,836/-. THE SUBS IDIARY COMPANY DUE TO THE CIRCUMSTANCES BEYOND ITS CONTROL HAD TO CLOS E DOWN ITS BUSINESS AND WENT SICK AND THEREFORE, THE SHARE CAPITAL INVE STED BY ASSESSEE COMPANY GOT VANISHED AND THE GUARANTEE GIVEN BY THE ASSESSEE WHICH WAS INVOKED WAS NOT RECOVERABLE FROM SUBSIDIARY COM PANY AND THEREFORE, ASSESSEE WROTE OFF THE SAID AMOUNT IN P&L ACCOUNT S. ITA NO.476 (ASR)/2008 ASST. YEA R: 2005-06 6 8. AS REGARDS LOSS OF CAPITAL TO THE TUNE OF RS.8,7 6,277/- THE ASSESSEE CLAIMED IT AS CAPITAL LOSS AND CARRIED FORWARD TO N EXT YEAR. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF LOSS CLAIMED IN P&L ACCOUNTS BY HOLDING THAT LOSS DID NOT ARISE FROM NORMAL COURSE OF BUSIN ESS OF ASSESSEE AND FOR THE SAME REASON IT DID NOT ALLOW CARRY FORWARD OF CAPITAL LOSS. HOWEVER, ON APPEAL BEFORE LEARNED CIT(A), HE ALLOWE D RELIEF ON BOTH ISSUES BY HOLDING AS UNDER: I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT. I HAVE GONE THROUGH THE FINDINGS OF THE AO AS INCORPORATED IN THE ORDER. 1 HAVE ALSO SEEN THE REPORT OF THE AO ALONG WITH THE REJOINDER FILED BY THE APPELLANT. AS SEEN FROM THE ORDER, THE AO DID N OT ALLOW THE CLAIM OF RS.3.86 CRORES ON ACCOUNT OF LOSS DUE TO IRRECOV ERABILITY OF DIRECT LOAN AND ALSO LOAN AMOUNT FOR THE EXECUTION OF STAN D BY LETTER OF CREDIT PAID TO THE WOS [WHOLLY OWNED SUBSIDIARY] CO . IN THE USA. IT WAS NOT TREATED AS TRADING LOSS AS AO HELD THAT GRA NTING LOAN TO ITS SUBSIDIARY OR STANDING GUARANTEE FOR ANY COMPANY IN CLUDING ITS SUBSIDIARY IS NOT THE BUSINESS OF THE APPELLANT COM PANY. THE AO DID NOT FIND ANY MERITS IN THE CASE LAWS CITED BY THE A PPELLANT AND AO INTURN BY PLACING RELIANCE ON CERTAIN CASE LAWS AS MENTIONED IN THE ORDER, DID NOT ALLOW THE SAID DEBIT ON ACCOUNT OF D IRECT LOAN TO SUBSIDIARY AND ALSO THE LOAN AMOUNT PAID FOR EXECUT ION OF STAND BY LETTER OF CREDIT CLAIMED BY THE APPELLANT. THE CASE OF THE APPELLANT ON THE OTHER HAND IS AS PER WRITTEN SUBMISSIONS THE RE IS NO DISPUTE ABOUT THE FACT THAT THE AMOUNT HAVE BEEN WRITTEN OF F BY THE APPELLANT AFTER CLOSURE OF THE WOS INI USA DURING T HE RELEVANT YEAR. THE APPELLANT COMPANY IS IN THE BUSINESS OF EXPORTI NG SHOES TO USA AFTER MANUFACTURING IN INDIA AND II ORDER TO EXPAND ITS BUSINESS IT ESTABLISHED A WHOLLY OWNED SUBSIDIARY COMPANY UNDER THE NAME AND STYLE OF SARUP FOOTWEAR ASSEMBLY CORPN IN THE Y EAR 1999. THE APPELLANT REPRESENTING THE HOLDING COMPANY, THE INV ESTMENT IN THE SHAPE OF SHARE CAPITAL AND LOANS AND ADVANCES BECAM E THE LIABILITY OF THE HOLDING COMPANY. IN THE RETURN FURNISHED BY TO THE APPELLANT TO THE REGISTRAR OF COMPANY IN ACCORDANCE WITH THE PROVISIONS OF COMPANIES ACT, THE FINANCIAL AFFAIRS OF THE SUBSIDI ARY COMPANY WERE REFLECTED IN THE BALANCE SHEET OF THE APPELLANT. TH E AO HELD THAT IT WAS NOT THE BUSINESS OF THE APPELLANT BUT WHILE HOL DING SO THE ID. AO HAS SIMPLY GONE BY THE MAIN OBJECTS AS APPEARING IN THE MEMORANDUM OF ASSOCIATION [MOA SR. NO. ILL ( A)] AN D IN THE PROCESS IGNORED THE OBJECTS INCIDENTAL OF THE MAIN OBJECTS WHICH COVER THE ITA NO.476 (ASR)/2008 ASST. YEA R: 2005-06 7 ISSUE .UNDER DISPUTE AS ENUMERATED IN CLAUSE B OF T HE MOA. THERE IS NO DENIAL OF THE FACT THAT FACTUM OF EXISTENCE AND INCURRING OF EXPENDITURE FOR THE WOS WAS NOT IN DOUBT OR DISPUTE ALONG WITH OTHER FACTS I E. CLOSURE OF BUSINESS ACTIVITIES BY THE WOS BY THE END OF FINANCIAL YEAR 2001-02 AND THE ACTUAL DATES /PER IOD OF PAYMENT MADE TO THE WOS OR FOR EXECUTION OF STAND BY LETTER OF CREDIT THESE FACTS, THEREFORE, REVEALS THAT THE ADVANCING OF LOA N AND TO STAND SURETY FOR THE WOS IS A STATUTORY OBLIGATION UNDER THE COMPANIES ACT. THE LD. AO HAVE NOT ALLOWED THE CLAIM OF THE A PPELLANT BY MENTIONING IN PARA 5 THAT IT IS NOT INCIDENTAL TO I TS BUSINESS AND WHILE HOLDING SO NO DISPUTE WAS RAISED OF ITS BEING , IN THE NATURE OF TRADING LOSS OR A CAPITAL LOSS. IT WAS ALSO NOT THE FINDINGS THAT THE FUNDS LEANT TO SUBSIDIARY COMPANY WERE USED FOR NON BUSINESS PURPOSES. THEREFORE, IT IS TO BE SEEN WHETHER THE T RANSACTIONS WERE INCIDENTAL TO THE BUSINESS OF THE APPELLANT AND WHE THER THE SAME HAD ANY ELEMENT OF COMMERCIAL EXPEDIENCY. NO DOUBT IN VIEW OF THE MOA AND ITS RELEVANT CLAUSES 9 AND 19. THE TRANSACT IONS WITH THE WOS WERE CONNECTED WITH THE BUSINESS OF THE APPELLA NT AND IN THIS REGARD THE FINDINGS OF THE AO CAN NOT BE SUSTAINED. AS PER THE PROVISIONS OF COMPANIES ACT U/S 4 (1) AND 4(3) DEAL ING WITH HOLDING AND SUBSIDIARY COMPANY THE ID. AO FAILED TO APPRECI ATE THAT IT WAS A WOS AND. THEREFORE, ALL THE INVESTMENTS WHETHER I N THE EQUITIES OR BY WAY OF LOANS WERE TO FLOW FROM THE HOLDING COMPA NY. IN A RECENT DECISION THE HON'BLE APEX COURT IN THE CASE OF SA B UILDERS VS. CIT REPORTED AT (2007) 288 ITR 1 HAVE HELD THAT 'LOAN T O A SISTER COMPANY WHICH IN THIS CASE WAS A WOS, IS ONE WHICH SHOULD BE TREATED AS PROMPTED BY COMMERCIAL EXPEDIENCY.' WHIL E HOLDING SO, IT WAS THE RULING THAT THE TRANSACTION PROMPTED BY COM MERCIAL EXPEDIENCY THE CLAIM ARISING THEREFROM WAS EVEN OTH ER ALLOWABLE. THE HON'BLE APEX COURT- REVERSED THE DECISION OF HO N'BLE BOMBAY HIGH COURT IN THE CASE OF PHALTAN SUGAR MILLS LTD V S. CWT 208 ITR 989 AND UP HELD THE VIEW OF THE HON'BLE TRIBUNAL IN THAT CASE WHEREIN IT WAS HELD THAT THE AMOUNT BORROWED AND UT ILIZED BY THE SUBSIDIARY COMPANY THE AMOUNTS IN QUESTION CAN BE S AID TO HAVE BEEN BORROWED BY THE APPELLANT COMPANY FOR THE PURP OSES OF ITS BUSINESS. IT ALSO ENDORSED THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. DALMYA CEMENT LTD CITED AS 2 54 ITR 377. THUS FROM THE RELEVANT DECISION THE SPECIAL RELATIO NSHIP BETWEEN THE HOLDING AND SUBSIDIARY COMPANY WAS RECOGNIZED AND I T WAS HELD THAT THE ADVANCES MADE BY THE HOLDING COMPANY TO TH E SUBSIDIARY COMPANY, BEING PROMPTED BY COMMERCIAL EXPEDIENCY, F ALL WITHIN THE AMBIT OF SECTION 37. I AGREE WITH THE APPELLANT THA T EXISTENCE OF THE AGREEMENT WAS NOT MATERIAL BECAUSE THE HOLDING COMP ANY STOOD GUARANTEE FOR THE ARRANGEMENT OF FINANCE FOR THE SU BSIDIARY COMPANY.THE BUSINESS CONSIDERATION WAS IN THE NATUR E OF MANUFACTURING OF SHOES FOR THE CUSTOMERS OF THE APP ELLANT IN THE USA. CONSIDERING THE FACTS OF THE CASE, THE DECISIO N RELIED UPON BY THE AO ARE ON DISTINGUISHABLE FACTS THAN ON THE FACTS EXIS TING IN THE CASE OF THE APPELLANT. IN THE CASE DECIDED BY HON BLE MADRAS H IGH COURT CITED AS 150 ITA NO.476 (ASR)/2008 ASST. YEA R: 2005-06 8 ITR 365 (MAD) WHICH WAS RELIED UPON BY THE AO THERE IN IT WAS HELD THAT GIVING OF GUARANTEE WAS NEITHER PART OF THE ASSESSE ES LINE OF BUSINESS NOR WAS IT CLOSELY INTER LINKED WITH HIS BUSINESS AS FI NANCER. IN THAT CASE THE ASSESSEE WAS NOT TAKEN TO HAVE GIVEN THE GUARANTEE IN THE COURSE OF HIS BUSINESS AND THE DEDUCTION CLAIMED WAS HELD NOT ALL OWABLE AS BAD DEBT OR BUSINESS LOSS. BUT IN THE CASE OF APPELLANT, THE MONEY ADVANCED TO ITS SUBSIDIARY WAS FOR THE PURPOSE OF THE BUSINESS AND NOT LIKE THE FACTS IN THE QUOTED CASE WHEREIN THE MONEY LENT WAS NOT RELATED TO THE BUSINESS OF THE ASSESSEE. THE AO HAS ALSO PLACED RELIANCE ON THE DE CISION OF HON'BLE MADRAS HIGHJ2OURT IN THE CASE OF JANKI RAM (KS) VS. CIT (1962) 45 ITR430 (MAD) AND THE SAID DECISION WAS FOLLOWED BY HON'BLE MADRAS HIGH COURT IN THE ABOVE CASE CITED AS 150 ITR 365 ( MAD) [SUPRA]. SINCE THE DECISION IN 150 ITR 365 WAS HELD NOT APPLICABLE TO THE FACTS IN THE CASE OF APPELLANT, THEREFORE, THE EARLIER DECISION REPORTED AT 45 ITR 430 AND FOLLOWED BY THE HONBLE MADRAS HIGH COURT ALSO CAN N OT BE HELD APPLICABLE TO THE FACTS OF THE CASE. THE AO HAS ALSO REFERRED TO THE DECISION OF HON'BLE CALCUTTA HIGH COURT CITED AS 167 ITR 859 BUT IN THA T CASE THE DECISION WAS BASED ON THE FACTS THAT THE FURNISHING OF GUARANTEE WAS NOT IN THE . NORMAL COURSE OF BUSINESS OF ASSESSEE OR FOR SNY COMMERCIA L CONSIDERATION RATHER IT RESULTED ONLY IN THE NATURE OF AN ACCOMMODATION PROVIDED TO THE DEBTOR ON EXTRA COMMERCIAL CONSIDERATION. THUS THE LOSS IN CURRED IN GRANTING LOAN WAS HELD NON DEDUCTIBLE. IT IS A DECISION ON ITS OW N FACTS AND IT DOES NOT BECOME RELEVANT TO THE FACTS AS EXISTING IN THE CAS E OF THE APPELLANT. THE AO ALSO PLACED RELIANCE ON THE DECISION OF HON BLE APEX COURT CITED AS 77 ITR 754 (SC). IT WAS HELD THEREIN THAT THERE WAS NO MATERIAL TO ESTABLISH THAT THE MANAGED COMPANY WAS UNDER LEGAL OBLIGATION TO FINANCE THE SELLING AGENT OR TO GUARA NTEE OF THE LOAN ADVANCED TO THE SELLING AGENT WHICH INDIRECTLY FACI LITATED THE CARRYING ON OF ASSESSEES BUSINESS. BUT IN THE CASE OF APPELLANT THE WOS WAS FINANCED BY THE HOLDING COMPANY FOR THE PUR POSE OF BUSINESS OF THE APPELLANT. ON THE FACTS OF THE CASE THE DECISION RELIED UPON BY THE APPELLANT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE REPORTED AT (1980) 125 ITR 4&2 (BOM) BECOMES R ELEVANT WHEREIN IT WAS HELD THAT IF THE OBJECT OF ADVANCING OF MONEY WAS TO PROVIDE FINANCE FOR A COMPANY IN WHICH THE ASSESSEE WAS SUBSTANTIALLY INTERESTED, THE DEBT MUST BE REGARDED AS DIRECTLY SPRINGING FROM ITS BUSINESS ACTIVITIES AND THE CONN ECTION COULD NOT BE CONSIDERED TOO REMOTE FOR THE PURPOSE OF ALLOWAN CE AS A TRADING DEBT. IT WAS HELD THAT TEST AND THE APPROACH TO BE APPLIED IN THIS CASE MUST BE THAT OF A BUSINESSMAN. BY PAYING REGAR D TO THE ECONOMIC REALITIES WHICH EXISTED BEHIND THE LEGAL F ACADE THE LOSS WAS HELD DEDUCTIBLE AS A TRADING LOSS IN THE CITED CASE. IN THE OTHER CASE DECIDED BY HONBLE BOMBAY HIGH COURT CITED AS (1979) 119 ITR 38FF (BOM) THE AO HELD THE LOAN AMOUNT BEING ADVANC ED BY THE APPELLANT COMPANY AS A CAPITAL LOSS AND WAS HELD NO T ALLOWABLE AS TRADING LOSS. BUT IT WAS HELD THEREIN THAT THE LOAN -ADVANCED BY THE ASSESSEE TO ITS MANAGING COMPANY WAS INCIDENTAL TO THE CARRYING ON OF THE BUSINESS BY THE ASSESSEE COMPANY AS MANAGING AGENTS AND THE MANAGING COMPANY HAVING GONE INTO LIQUIDATION A ND ADVANCE ITA NO.476 (ASR)/2008 ASST. YEA R: 2005-06 9 BECAME IRRECOVERABLE THE LOSS BECAME TRADING LOSS W HICH WAS ELIGIBLE AS DEDUCTION WHILE COMPUTATION THE BUSINES S INCOME OF THE ASSESSEE COMPANY. IN THE CASE OF APPELLANT ALSO THE APPELLANT WAS MANAGING THE AFFAIRS OF THE WOS BY HAVING THE COMPL ETE SHARE HOLDING OF THE WOS AND THE WOS HAVING GONE INTO LOSS AS IN THE CITED CASE, THE SAID LOSS WAS ELIGIBLE AS TRADING LOSS. THEREFORE, CONSI DERING THE FACTS IN THE CASE OF APPELLANT, THE CLAIM MADE BY THE APPELLANT ALSO GETS SUPPORTED BY THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CA SE CITED AS 74 1TR 78[SUPRA]. NO DOUBT THE SUBSIDIARY COMPANY CLOSED I TS BUSINESS BY THE END OF 2000-01 BUT THE APPELLANT CHOSE TO WRITE OFF THE AMOUNT AS IT GOT PERMISSION FROM THE RBI TO CLOSE DOWN , ITS SUBSIDI ARY ON 16-6-2004 WHICH IS RELEVANT TO THE YEAR UNDER CONSIDERATION. THE AO HAS PLACED RELIANCE ON THE LETTER DATED 6-10-2003 OF THE RBI WHICH IS MENT IONED IN CERTAIN OTHER LETTERS OF THE RBI FILED BY THE APPELLANT BEFORE TH E AO DATED 15-11-2003 AND 13-4-2004 WHEREIN THE RBI DESIRED FROM APPELLAN T TO FILE VARIOUS DOCUMENTARY EVIDENCE IN SUPPORT OF ITS C 1 AIM FOR APPROVAL OF CLOSURE OF WOS IN USA. FROM THE SAID LETTERS WHICH WERE SUBSEQ UENT TO THE LETTER DATED 6-10-2003 OF THE RBI REFLECTED IN THE ORDER, IT BECOMES CLEAR THAT THE RBI HAD NOT GIVEN THE FINAL APPROVAL BUT THE AO WHI LE MENTIONING AND RELYING ON THE SAID LETTER DATED 6-10-2003 OMITTED TO CONSIDER OTHER LETTERS. IN FACT THE APPELLANT FINALLY GOT THE APPROVAL FOR THE CLOSURE ON 16-6-2004 AND THE SAME FALLING IN THE RELEVANT ASSTT YEAR THE CLAIM WAS MADE. |AFTER CONSIDERING THE DECISIONS OF HON'BLE APEX COURT IN THE CASE CITED AS 53 1TR 114 RENDERED IN THE CONTEXT OF ACCRUAL OF INCOME AN D 53 TTR 1J34 (SC) WHERE IT WAS CALLED UPON TO DECIDE THE QUESTION OF INCURRING OF LIABILITY AND DEDUCTION THEREOF, THE SETTLED POSITION OF LAW WHIC H EMERGES IS THAT IN THE CASE OF AN ASSESSEE FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING A LIABILITY IS SAID TO BE PROPERLY INCURRED WHEN THE DISPUTE BE TWEEN THE PARTIES IS IMMEDIATELY SETTLED OR FINALLY ADJUDICATED, WHER E THE LIABILITY IN QUESTION IS NOT A STATUTORY LIABILITY. IN THE CASE OF APPELLANT ALSO THE MATTER CAME TO BE FINALLY SETTLED ON RECEIPT O F APPROVAL OF THE RBI TO CLOSE THE WPS W.E.F. 16-6-2004. THE FINAL AD JUDICATION BEING FALLING IN THE RELEVANT YEAR THE CLAIM OF THE APPEL LANT THUS BECOMES ELIGIBLE FOR ALLOWANCE. AS GATHERED, IT IS NOT A CA SE WHERE THE APPELLANT HAS REALIZED ANYTHING AS REALIZATION AMOU NT OF THE ASSETS OF THE WOS. THE WOS BEING IN LOSSES THE APPELLANT H AD NOT CHARGED ANY INTEREST ON THE AMOUNT EXTENDED TO IT AS THE SA ID AMOUNT WAS ADVANCED TOWARDS THE WORKING CAPITAL REQUIREMENTS O F THE SUBSIDIARY TO PAY OFF ITS LIABILITY AGAINST EXPENSE S. REGARDING THE STANDBY LETTER OF CREDIT WHICH WAS GIVEN TO THE FOR EIGN BANK TO PROVIDE WORKING CAPITAL FINANCE TO THE WOS THE SAME WAS REVOKED BY THE FOREIGN BANK AS WOS WAS UNABLE TO PAY ITS DE BT. THE LOSS OF THE SUBSIDIARY, THEREFORE, APPEARED IN THE ANNUAL R ETURN FILED TO THE REGISTRAR OF COMPANIES FOR THE RELEVANT PERIOD. THU S THE FINANCIAL AFFAIRS OF THE WOS WERE PART OF BALANCE SHEET OF TH E APPELLANT COMPANY. THERE WERE NO CONTRARY FINDING IN THE EARL IER YEAR ON THIS ISSUE. THEREFORE, FINDINGS OF THE AO THAT THE LOSS SUFFERED DOES NOT DIRECTLY EMERGE FROM THE CARRYING ON THE BUSINESS O R PROFESSION OF THE APPELLANT CAN NOT BE SUSTAINED. .ACCORDINGLY, T HE/FINDINGS OF THE ITA NO.476 (ASR)/2008 ASST. YEA R: 2005-06 10 AO IN THIS REGARD ARE VACATED AND THE GROUNDS TAKEN BY THE APPELLANT ARE ALLOWED. 9. WE FIND THAT HONBLE TRIBUNAL IN ITS ORDER DATED 23 .01.2009 REVERSED THE FINDINGS OF LEARNED CIT(A) WITH RESPECT TO ABOV E TWO ADDITIONS. HOWEVER, THE HONBLE TRIBUNAL VIDE ORDER DATED 30.0 6.2010 RECALLED THE ISSUE OF CLAIM OF WRITE OFF OF RS.3,86,63,836/-, WH EREAS THE ISSUE OF CARRY FORWARD OF CAPITAL LOSS WAS DISMISSED. THE HONBLE TRIBUNAL WHILE RECALLING THE ORDER TO THAT EXTENT HAD HELD THAT TR IBUNAL WHILE PASSING ORDER DATED 23.01.2009 OMITTED TO TAKE INTO ACCOUNT THE ORDER OF HONBLE SUPREME COURT IN THE CASE OF AMALGAMATIONS PVT. LTD VS. CIT (SUPRA). THE FINDINGS OF THE TRIBUNAL AS CONTAINED IN PARA 7 .4 ARE REPRODUCED BELOW. 7.4. IN THE LIGHT OF THE ABOVE TWO DECISIONS OF TH E HONBLE SUPREME COURT RELIED UPON BY THE ASSESSEE, WE ARE OF THE CONSIDER ED OPINION THAT THE LATEST DECISION OF THE HONBLE SUPREME COURT, IN TH E CASE OF CIT VS. AMALGAMATIONS PVT. LTD. (SUPRA) WAS NOT CONSIDERED BY THE BENCH IN THE IMPUGNED APPELLATE ORDER. THUS, RESPECTFULLY FOLLOW ING THE CORE RATIO DECIDENDI LAID DOWN BY THE HONBLE SUPREME COURT, I N THE CASE OF ACIT VS. SAURASHTRA KUTCH STOCK EXCHANGE LTD. (2008) 305 ITR 227 (SC), WE HOLD THAT NON-CONSIDERATION OF THE DECISION OF THE HONB LE SUPREME COURT, IN THE CASE OF CIT VS. AMALGAMATIONS PVT. LTD. (SUPRA), WH ICH DEALS WITH THE ISSUE OF LOSS SUSTAINED, CONSEQUENT UPON STANDING G UARANTEE TO A SUBSIDIARY COMPANY CONSTITUTES MISTAKE APPARENT FRO M RECORD. CONSEQUENTLY, THE SPECIFIC ISSUE OF CLAIM OF IMPUGN ED LOSS RAISED IN THE IMPUGNED MISC. APPLICATION IS RECTIFIABLE MISTAKE APPARENT FROM RECORD, AS CONTEMPLATED U/S 254(2) OF THE ACT., HAVING REGA RD TO THE DECISION OF THE HONBLE SUPREME COURT, IN THE CASE OF ASSTT. COMMIS SIONER OF INCOME TAX VS. SAURASHTRA KUTCH STOCK EXCHANGE LTD. (SUPRA). T HUS, TO THIS EXTENT ALONE, THE IMPUGNED APPELLATE ORDER OF THE BENCH IS RECTIFIED. IT IS MADE CLEAR THAT THE APPLICABILITY OR OTHERWISE OF THE DE CISION OF THE HONBLE SUPREME COURT, IN THE CASE OF CIT VS. AMALGAMATIONS PVT. LTD.(SUPRA), CANNOT BE ADJUDICATED UNDER PROVISIONS OF SECTION 2 54(2) OF THE ACT, AS THE SAME IS COVERED UNDER SECTION 254(1) OF THE ACT. ITA NO.476 (ASR)/2008 ASST. YEA R: 2005-06 11 10. WE FIND THAT IN THE CASE OF AMALGAMATIONS PVT. LTD VS. CIT (1969) 226 ITR 188 (SC), THE HONBLE APEX COURT HAS HELD THAT THE NATURE OF THE BUSINESS OF ASSESSEE COMPANY INCLUDED FURNISHING OF GUARANTEE TO DEBTS BORROWED BY SUBSIDIARY COMPANY AND THEREFORE, IT WA S HELD THAT ASSESSEE COMPANY HAD INCURRED THE LOSS IN CARRYING ON ITS OW N BUSINESS WHICH INCLUDED FURNISHING OF GUARANTEES TO DEBTS BORROWED BY ITS SUBSIDIARY COMPANY. THE RELEVANT FINDINGS OF HONBLE SUPREME COURT AS CONTAINED IN PRA 8 & 9 ARE REPRODUCED BELOW. THE HIGH COURT HAS REFERRED TO ITS EARLIER JUDGMEN T IN AMALGAMATIONS P. LTD. VS. CIT ( 1969) 73 ITR 380 (MAD) : TC 24R.808, WHEREIN THE NATURE OF THE BUSINESS OF THE ASSESSEE- COMPANY HAS BEEN CONSIDER ED AND IT HAS BEEN HELD THAT THE PROVISIONS OF S. 23A OF THE 1922 ACT WERE APPLI CABLE TO THE ASSESSEE-COMPANY SINCE THE ASSESSEE-COMPANY'S BUSINESS INCLUDES FURN ISHING GUARANTEE TO DEBTS BORROWED BY SUBSIDIARY COMPANIES. THE HIGH COURT HA S HELD THAT THE SAID FINDING GIVEN IN THAT CASE IS CLEARLY APPLICABLE TO THE QUE STIONS UNDER CONSIDERATION BEFORE IT AND THAT THE ASSESSEE-COMPANY HAD INCURRED THE L OSS IN CARRYING ON ITS OWN BUSINESS WHICH INCLUDES FURNISHING GUARANTEES TO DE BTS BORROWED BY ITS SUBSIDIARY COMPANIES. ACCORDING TO THE HIGH COURT; THE LOSS WAS ALLOWABLE AS A DEDUCTION IN THE YEAR IN WHICH IT CAME TO BE ASCERT AINED AND IN THE INSTANT CASE THE HIGH COURT HELD THAT THE ASSESSEE-COMPANY COULD HAVE ASC ERTAINED WHETHER THERE WAS LOSS IN THE TRANSACTION OF GUARANTEE ONLY AT THE STAGE OF FINAL PAYMENT BY THE LIQUIDATORS WHICH WAS RECEIVED IN THE RELEVA NT PREVIOUS YEAR FOR THE ASST. YR. I 962-63 AND THAT THE TRIBUNAL WAS RIGHT IN ALLOWING IT IN T HAT YEAR. THE JUDGMENT OF THE HIGH COURT DOES NOT SUFFER FROM ANY LEGAL IN FIRMITY. CIT VS. AMALGAMATION (P) LTD. (1976) 108 ITR 895 (MAD) : TC 14R.884 AFFIRMED. (PARAS 8 & 9) 11. NOW COMING TO THE FACTS AND CIRCUMSTANCES OF TH E PRESENT CASE, WE FIND THAT ASSESSEE COMPANY SET UP A WHOLLY OWNED SU BSIDIARY IN U.S.A FOR THE PURPOSE OF ATTAINMENT OF ITS MAIN OBJECTS. THE INCIDENTAL OBJECTS AS CONTAINED IN CLAUSE OF MEMORANDUM OF ASSOCIATION STATES THAT THE COMPANY IN PURSUANCE AND DEVELOPMENT OF ITS BUSINES S CAN INCORPORATE OR PROMOTE ANY COMPANY OR COMPANIES WHETHER IN INDI A OR ELSEWHERE ITA NO.476 (ASR)/2008 ASST. YEA R: 2005-06 12 WHICH IN THE COMPANY OR COMPANIES COULD OR MIGHT DI RECTLY OR OTHERWISE PROVED ADVANTAGE TO THE ASSESSEE. CLAUSE 9 OF THE I NCIDENTAL OBJECTS AUTHORIZES THE ASSESSEE TO LEND AS ADVANCE MONEY WI TH OR WITHOUT SECURITY . FOR THE SAKE OF CONVENIENCE THE OBJECTS CLAUSE AS CONTAINED IN CLAUSE 9 & 19 ARE REPRODUCED BELOW. (9) TO LEND AND ADVANCE MONEY, EITHER WITH OR WITH OUT SECURITY AND GIVE CREDIT TO SUCH PERSONS (INCLUDING GOVERNMENT) AND U PON SUCH TERMS AND CONDITIONS AS THE COMPANY MAY THINK FIT IN CONNECTI ON WITH ITS BUSINESS. (19) TO FORM INCORPORATE OR PROMOTE ANY COMPANY OR COMPANIES WHETHER IN INDIA OR ELSEWHERE HAVING AMONGST ITS OR THEIR OBJE CTS THE ACQUISITION OF ALL OF THE ASSET OF THE COMPANY OR FOR ANY OTHER OBJECT ' WHICH IN THE OPINION OF THE COMPANY COULD OR MIGHT DIRECTLY OR OTHERWISE PR OVE ADVANTAGEOUS TO THE COMPANY AND TO PAY ALL OR ANY OF THE COSTS AND EXPENSES INDIRECTLY ASSIST THE COMPANY IN THE CONTROL OR THE DEVELOPMEN T OF ITS BUSINESS AND PROPERTIES OR INCURRED IN CONNECTION WITH ANY SUCH PROMOTION INCORPORATION AND REMUNERATE ANY PERSON OR COMPANY IN ANY MANNER IT SHALL THINK FIT FOR SERVICES RENDERED OR TO BE RENDERED TO THE COMPANY IN OR ABOUT THE CONDUCT OF ITS BUSINESS. 12. CLAUSE 9 OF THE OBJECTS INCIDENTAL TO MAIN OBJE CTS AUTHORIZED THE COMPANY TO LEND AND ADVANCE MONEY, EITHER WITH OR W ITHOUT SECURITY AND GIVE CREDIT TO SUCH PERSONS ON SUCH TERMS AND CONDI TIONS AS THE COMPANY MAY THINK FIT IN CONNECTION WITH ITS BUSINE SS. IN THE PRESENT CASE THE ASSESSEE HAS NOT LENT ANY MONEY TO ITS SUB SIDIARY COMPANY BUT HAD INDIRECTLY LENT THE MONEY BY EXECUTING STANDBY LETTER OF GUARANTEE FOR THE DEBTS OBTAINED BY SUBSIDIARY COMPANY IN U.S.A. IN VIEW OF THIS ENABLING PROVISION IN THE MEMORANDUM OF ASSOCIATION OF COMPANY THE ASSESSEE BEING HOLDING COMPANY STOOD GUARANTEE FOR THE ARRANGEMENT OF FINANCE FOR THE SUBSIDIARY COMPANY. THE LENDER INVO KED THE SAID LETTER OF ITA NO.476 (ASR)/2008 ASST. YEA R: 2005-06 13 GUARANTEE AND ASSESSEE HAD TO MAKE PAYMENT FOR THE SAME. THE ENTIRE SEQUENCE OF EVENTS RESULTED INTO INDIRECTLY LENDING TO THE SUBSIDIARY COMPANY WHICH BECOME IRRECOVERABLE DUE TO LOSSES OF THE SAID SUBSIDIARY AND HAD TO BE WRITTEN OFF IN THE P&L ACCOUNT OF ASS ESSEE. KEEPING IN VIEW THE RATIO OF HONBLE SUPREME COURT IN THE CASE OF A MALGAMATIONS (P) LTD. (SUPRA) THE SAID UNRECOVERED AMOUNT FROM ITS SUBSI DIARY IS A LOSS INCURRED BY ASSESSEE IN CARRYING ON ITS OWN BUSINE SS. THEREFORE, THE ISSUE BEFORE US AS RAISED BY REVENUE IN GROUND NO.1 IS DECIDED AGAINST REVENUE AND GROUND NO.1 OF APPEAL IS DISMISSED. NON E OF THE OTHER GROUNDS RAISED BY REVENUE WERE PENDING BEFORE THE T RIBUNAL AS THEY HAD ALREADY REACHED THEIR FINALITY AND HENCE CANNOT BE ADJUDICATED AGAIN GROUND NO.2 RAISED BY REVENUE HAS ALREADY BEEN ADJU DICATED BY HONBLE TRIBUNAL VIDE ITS ORDER DATED 23.01.2009 AND HONBL E TRIBUNAL HAD ALREADY DISMISSED IT. SIMILARLY GROUND NO.3 RAISED BY REVENUE HAS ALREADY BEEN ADJUDICATED BY THE HONBLE TRIBUNAL VI DE ITS ORDER DATED 23.01.2009 IN FAVOUR OF REVENUE. THOUGH ASSESSEE HA D FILED MISC. APPLICATION ON THIS ISSUE ALSO BUT THE HONBLE TRIB UNAL HAD DISMISSED THE MISC. APPLICATION ON THIS ACCOUNT. THE ASSESSEE THOUGH TOOK BOTH ISSUES TO HONBLE PUNJAB & HARYANA HIGH COURT BUT T HE HONBLE PUNJAB & HARYANA HIGH COURT HAD DIRECTED THE TRIBUNAL TO D ISPOSE OFF THE MATTERS PENDING BEFORE IT. AS THE HONBLE TRIBUNAL HAD NOT RECALLED ITS ORDER ON THIS ISSUE, THEREFORE, THE ONLY ISSUE PEND ING BEFORE TRIBUNAL WAS ITA NO.476 (ASR)/2008 ASST. YEA R: 2005-06 14 RELATING TO CLAIM OF LOSS OF RS.3,86,63,896/- WHICH WE HAVE ALREADY ADJUDICATED. 13. THE APPEAL OF THE REVENUE IS THUS DISPOSED OFF AS ABOVE AND THE APPEAL STANDS PARTLY ALLOWED IN TERMS OF THE EARLIE R ORDER OF TRIBUNAL AND THE PRESENT ORDER. 14. IN VIEW OF THE ABOVE, THE APPEAL FILED BY REVEN UE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 .08.2016. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT ME MBER DATED:10.08.2016. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER