ACIT, Trichur V. M/s. Sundararaj Saw Mills & Industries, Thrissur

ITA 488/COCH/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52266 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 15-09-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 31-08-2009
• Court: TRIBUNAL
• Department Lawyers: PREETHA S NAIR ADV
• Assessee Lawyers: S VIJAYAPRABHA
• Keywords: Assessment record; Onus to prove
• Section: 143(3); 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND SANJAY AROR A, AM I.T.A NO. 488/COCH/2009 ASSESSMENT YEAR:2006-07 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-2(1), RANGE- 2, TRICHUR. VS. SUNDARARAJ SAW MILLS & INDUSTRIES, NETAJI ROAD, ARANATTUKARA, TRICHUR-18. [PAN:AAJFS 0401N] (REVENUE-APPELLANT) (ASSESSEE-R ESPONDENT) REVENUE BY MS. S. VIJAYAPRABHA, JR.DR REVENUE BY SMT. PREETHA S. NAIR, ADV.-AR DATE OF HEARING 15/09/2011 DATE OF PRONOUNCEMENT 21/10/2011 O R D E R PER SANJAY ARORA, AM: THIS IS AN APPEAL BY THE REVENUE ARISING OUT OF THE ORDER BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-V, KOCHI (CIT(A) FOR SHOR T) DATED 26.5.2009 FOR THE ASSESSMENT YEAR (A.Y.) 2006-07, PARTLY ALLOWING TH E ASSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S. 143(3) OF THE INCOME-TAX ACT, 1961 (`THE ACT) DATED 30/12/2008. 2. THE SECOND GROUND OF THE REVENUES APPEAL; THE F IRST BEING GENERAL IN NATURE, WARRANTING NO ADJUDICATION, IS IN RESPECT OF RESTRI CTION OF THE DISALLOWANCE IN RESPECT OF EXPENSES CLAIMED UNDER THE HEAD `CLEARING AND FORWA RDING CHARGES BY THE LD. CIT(A) TO 5% (OF THAT CLAIMED) AS AGAINST 15% BY THE ASSESSIN G OFFICER (AO). THE REVENUES CASE, WHICH STOOD OBJECTED TO EMPHATICALLY BY THE LD. DR BY READING OUT THE RELEVANT PART OF THE ASSESSMENT ORDER (PARA 7), IS THAT THE EXPENDITURE WAS NOT VERIFIABLE, BOOKED MAINLY PER SELF-MADE VOUCHERS, REFLECTING THE PAYMENTS IN CASH . THERE WAS EVEN NO IDENTIFICATION OF I.T.A. NO.488/COCH/2009 (ASSTT. YEAR: 2006-07) 2 THE PAYEES. UNDER THE CIRCUMSTANCES, THE AO WAS PE RFECTLY JUSTIFIED IN DISALLOWING A PART OF THE CLAIM AND, IN FACT, WAS MORE THAN REASONABLE IN LIMITING THE SAME TO 15% OF THE CLAIM AT ` 95.06 LAKHS, I.E., ` 14,25,961/-. RELIANCE WAS PLACED BY HER ON THE DEC ISION IN THE CASE OF HEMAMBIKA CHITIES & LOANS (P.) LTD. V. CIT (DY.) , 266 ITR 427 (KER.). THE ASSESSEES CASE, ON THE OTHER HAND, IS THAT FOR BOT H THE IMMEDIATELY PRECEDING YEARS, I.E., A.Y. 2004-05 (IN I.T.A. NOS. 838 & 866/COCH/2007 DA TED 29.4.2009) AND AY 2005-06 (IN I.T.A. NO. 52/COCH 2009 DATED 15.9.2010) (COPIE S ON RECORD), THE TRIBUNAL HAS CONFIRMED THE DISALLOWANCE AT 5%. IN OTHER WORDS, W HILE THE REVENUE SEEKS TO MAKE OUT A CASE ON FACTS, THE ASSESSEE RELIES ON THE FACT THAT THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE RELEVANT YEAR, I.E., VIS--VIS THE PRECEDING YEARS, FOR WHICH THE MATTER CAN BE SAID TO HAVE REACHED FINALITY, AT LEAST AT T HE END OF THE TRIBUNAL, PER ITS DECISIONS. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. THE LD. CIT(A), WE FIND, HAS ALSO BEEN GUIDED IN HER ESTIMATE OF THE D ISALLOWANCE AT 5% BY THE DECISION BY THE TRIBUNAL IN THE ASSESSEES CASE FOR A.Y. 2004-0 5, WHICH HAD HOWEVER CONFIRMED THE SAME (DISALLOWANCE) AT 10% FOR A.Y. 2005-06. THE EX PENDITURE CLAIMED FOR THE CURRENT YEAR IS ADMITTEDLY AT ` 3.60 PER BAG (OF CEMENT), WHILE FOR THE PRECEDING Y EAR, AS FINALLY ALLOWED BY THE TRIBUNAL, WORKS TO ` 2.10 PER BAG (REFER PARA 4 OF ITS ORDER DATED 15/9/2010). A DISALLOWANCE @ 15% WORKS TO AN ADMITT ED CLAIM OF ` 3.06 PER BAG ( ` 3.60 X 85%). AS SUCH, EVEN THOUGH IN PERCENTAGE TERMS THE DISALLOWANCE WORKS TO 15% OF THE GROSS CLAIM, THE AMOUNT ALLOWED BY THE AO (I.E., ` 3.06 PER BAG) IS ITSELF MORE THAN THAT SUSTAINED IN SECOND APPEAL BY THE TRIBUNAL FOR THE IMMEDIATELY PRECEDING YEAR. THE ASSESSEE, WHO HAS NOT CONTESTED THE ORDER OF THE FI RST APPELLATE AUTHORITY, HAS NOT BROUGHT ON RECORD ANY MATERIAL TO JUSTIFY THE ENHANCED EXPE NDITURE OF ` 1.50 PER BAG ( ` 3.60 - ` 2.10), WHICH RATHER WORKS TO AN INCREASE OF OVER 70 % OVER THAT ALLOWED FOR THE IMMEDIATELY PRECEDING YEAR. THIS FURTHER FORTIFIES THE CLAIM OF THE REVENUE THAT THE ASSESSEE HAS INFLATED THE EXPENDITURE. THE ASSESSEE HAS NOT MADE OUT ANY CASE QUA ITS CLAIM FOR INCREASED EXPENDITURE, POINTING OUT THE C IRCUMSTANCES LEADING THERETO, EITHER BEFORE US OR THE AUTHORITIES BELOW. RATHER, ITS CON SISTENT STAND HAS BEEN OF THERE BEING NO CHANGE IN THE FACTS AND CIRCUMSTANCES W.R.T. THE PR ECEDING YEARS. COUPLE THIS WITH THE TRITE I.T.A. NO.488/COCH/2009 (ASSTT. YEAR: 2006-07) 3 LAW IN THE MATTER, THAT THE ONUS TO PROVE ITS CLAIM /S IS CLEARLY ON THE ASSESSEE, AS CLARIFIED BY THE HONBLE JURISDICTIONAL HIGH COURT PER ITS DE CISIONS, INTER ALIA , IN THE CASE OF RAM BAHADUR THAKUR LTD. VS. CIT , 261 ITR 390 (KER.) (FB) AND HEMAMBIKA CHITIES & LOANS (P.) LTD. V. CIT (DY.) (SUPRA). AS SUCH, THE DISALLOWANCE IS JUSTIFIED UN DER THE CIRCUMSTANCE OF NON-PROVING ITS CLAIM BY THE ASSESS EE. THE LD. CIT(A) HAS MADE NO ATTEMPT TO RELATE THE EXPENDITURE CLAIMED BY THE AS SESSEE WITH THE VOLUME OF WORK UNDERTAKEN DURING THE CURRENT YEAR VIS-A-VIS THE PR ECEDING YEAR/S, OR THE ASSESSEES CLAIM, I.E., IN REAL TERMS, FOR THOSE YEARS, AND WHO HAS, AS AFORE-NOTED, BEEN ALLOWED EXPENDITURE AT ` 3.06 PER BAG, OR AN INCREASE OF NEARLY ` 1.0 PER BAG, I.E., AT ALMOST 50%, OVER THE IMMEDIATELY PRECEDING YEAR. WE ACCORDINGLY UPHOLD T HE DISALLOWANCE, I.E., AS EFFECTED; THE NON-DISCHARGE BY THE ASSESSEE OF THE ONUS THERE ON U/S. 37(1) BEING PATENT AND, IN FACT, NOT DENIED. WE DECIDE ACCORDINGLY. WE MAY ALSO CLAR IFY THAT OUR DECISION IS IN SUBSTANCE IN CONFORMITY AND IN VALIDATION OF THE TRIBUNALS D ECISION IN THE ASSESSEES CASE FOR A.Y. 2005-06, WHICH STANDS RELIED UPON BY THE ASSESSEE I TSELF. 4.1 THE THIRD GROUND OF APPEAL IS IN RESPECT OF THE DISALLOWANCE OF EXPENSES AGAINST CONTRACT PAYMENT (TRANSPORT). THE AO OBSERVED THAT THE ASSESSEE HAD CLAIMED A TOTAL EXPENDITURE OF ` 275.46 LAKHS (AGAINST A CONTRACT RECEIPT OF ` 283.14 LAKHS), OF WHICH A SUM OF ` 104.21 LAKHS WAS PAID TO THE SISTER CONCERNS, AND W HICH STOOD ACCOUNTED FOR BY THEM AS WELL. FOR THE BALANCE CLAIM OF ` 171.25 LAKHS, FOR WHICH THE PAYMENT WAS MADE TO LORRY OPERATIONS, HOWEVER, NO PROPER VOUCHERS WE RE MAINTAINED. THE EXPENDITURE WAS AGAIN IN CASH, AND NOT BEARING THE DETAILS, EITHER OF THE MOTOR VEHICLES PER WHICH THE TRANSPORT STOOD OSTENSIBLY EFFECTED NOR THE SIGNATU RES OF THE PAYEE-DRIVERS, ETC. ACCORDINGLY, HE DISALLOWED 10% THEREOF, I.E., ` 17,12,504/-. 4.2 IN APPEAL, IT WAS CLARIFIED BY THE ASSESSEE THA T THERE WAS A CHANGE IN THE MARKETING POLICY OF ITS PRINCIPALS, I.E., M/S. ACC CEMENT LTD ., FROM THIS YEAR ONWARDS. WHILE PREVIOUSLY IT WAS BILLING ITS DEALERS ON F.O.R. EX- WAREHOUSE BASIS, FROM THE CURRENT YEAR, THE GOODS ARE BILLED ON F.O.R. DESTINATION (THE DEA LERS SHOP/DEPOT) BASIS, AND THE TRANSPORT CHARGES, AS INCURRED BY THE DEALERS, REIM BURSED TO THEM THROUGH THE ASSESSEE, I.T.A. NO.488/COCH/2009 (ASSTT. YEAR: 2006-07) 4 THEIR C&F AGENT. ACCORDINGLY, OF THE IMPUGNED PAYME NT OF ` 171.25 LAKHS, ` 123.45 LAKHS IS PAID TO THE ACC DEALERS, WHICH STANDS ROUT ED THROUGH IT. AS SUCH, ONLY THE BALANCE ` 47,79,489/- REPRESENTS THE PAYMENT TO THE OUTSIDE T RUCKERS. THE LD. CIT(A) ON THAT BASIS DIRECTED THE AO TO EXCLUDE THE PAYMENT M ADE TO THE ACC DEALERS FROM THE IMPUGNED DISALLOWANCE, ALSO OBSERVING THAT THE DIRE CTION BY THE ADDL. CIT, TRICHUR TO THE AO IN THE MATTER WAS FOR A.Y. 2005-06 AND, THUS, NO T APPLICABLE FOR THE CURRENT YEAR. AGGRIEVED, THE REVENUE IS IN APPEAL. 5. WE HAVE HEARD THE PARTIES, EACH RELYING ON THE ORDER BY THE AUTHORITY BELOW, I.E., AS FAVOURABLE TO IT, AND PERUSED THE MATERIAL ON RECOR D. WE FIND THAT THIS ISSUE CAME UP BEFORE THE TRIBUNAL FOR THE IMMEDIATELY PRECEDING Y EAR, I.E., A.Y. 2005-06, AS WELL, WHEREAT IT, PARTLY ALLOWING THE REVENUES CLAIM, CO NFIRMED THE DISALLOWANCE AT 10%. THE MODIFICATION EFFECTED BY THE LD. CIT(A), HOWEVER, I S NOT IN THE RATE, BUT IN THE BASE AMOUNT OVER WHICH THE SAME IS TO APPLY, WITH THE AS SESSEE BEING NOT IN APPEAL. THE ASSESSEE CONTENDS OF A CHANGE IN THE MARKETING POLI CY FROM THE CURRENT YEAR (REFER PARA 4.2 ABOVE). AS SUCH, THE BASIC AND THE ONLY ISSUE T HAT SURVIVES IS THE VALIDITY OF THE ASSESSEES CLAIM FOR EXCLUDING THE AMOUNT OF ` 123.45 LAKHS, OSTENSIBLY PAID TO THE ACC DEALERS. HOWEVER, THE MOOT AND THE PRIMARY QUESTION IS: WHY DOES THE ASSESSEE NOT HAVE PROPER VOUCHERS IN ITS RESPECT ? THIS IS MOST SURPRISING AS THE SAME (REIMBURSEMEN T) WOULD ONLY BE ON THE BASIS OF FURNISHING THE PROOF OF INCURRING THE EXPENDITURE BY THE DEALERS, I.E., THE ASSESSEES CLAIM WOULD ONLY BE D ULY SUPPORTED BY THE RELEVANT EVIDENCES. IT COULD ALSO BE THAT THE REIMBURSEMENT IS EFFECTED AT STANDARD RATES, I.E., AS PRESCRIBED BY ITS PRINCIPAL (THOUGH IN THAT CASE IT WOULD NOT STR ICTLY QUALIFY TO BE TERMED AS A REIMBURSEMENT), OR ON THE BASIS OF DULY APPROVED CL AIMS BY THE DEALERS. WHATEVER BE THE ARRANGEMENT/MECHANISM, IT IRRESISTIBLY POINTS TO TH E EXISTENCE OF PROPER VOUCHERS, WHILE IN THE PRESENT CASE, AS IT APPEARS, THERE IS NOTHIN G TO EVIDENCE EVEN THE PAYMENT TO THE DEALERS, WHO WOULD IN ANY CASE ISSUE RECEIPT FOR TH E AMOUNT RECEIVED, AND WHICH ONLY WOULD EVIDENCE THE PAYMENT THERETO AND, CONSEQUENTL Y, THE DISCHARGE OF THE LIABILITY BY THE ASSESSEE IN ITS RESPECT. IN OTHER WORDS, THOUGH THE ASSESSEE HAS BEEN ABLE TO SECURE CREDIT OR REIMBURSEMENT FROM ITS PRINCIPAL ON THE B ASIS OF PAYMENT TO ITS DEALER, AND I.T.A. NO.488/COCH/2009 (ASSTT. YEAR: 2006-07) 5 WHICH MAY FALL WITHIN THE NORMS FIXED IN THE MATTER BY THE FORMER, IT MUST BE ABLE TO SUPPORT ITS CLAIM OF PAYMENT TO THE DEALERS WITH CR EDIBLE EVIDENCE/S. RATHER, IT SURPRISES US THAT PAYMENTS, WHICH WORK TO HUGE SUM, ARE PAID IN CASH AND NOT PER CHEQUE OR ANY OTHER BANKING ARRANGEMENT. UNDER THE CIRCUMSTANCES, THE MATTER IS CLEARLY FACTUALLY INDETERMINATE, SO THAT WE ONLY CONSIDER IT FIT AND PROPER TO REMIT THE SAME BACK TO THE FILE OF THE AO FOR AN ADJUDICATION ON MERITS, AFTER DUE VERIFICATION AND EXAMINATION OF THE MATERIALS, IF ANY, ADVANCED BY THE ASSESSEE IN SUPP ORT OF ITS CLAIM, WHO SHALL BE ALLOWED DUE OPPORTUNITY TO EXPLAIN ITS CASE BEFORE HIM. WE DECIDE ACCORDINGLY. 6. THE NEXT GROUND (GROUND NO. 4) RELATES TO THE DI SALLOWANCE IN THE SUM OF ` 48,000/- IN RESPECT OF SALARY TO PARTNERS, BEING IN EXCESS OF THE LIMIT AS PRESCRIBED IN THE PARTNERSHIP DEED. THE ISSUE, WE FIND, AROSE FOR TH E IMMEDIATELY PRECEDING YEAR AS WELL, WHEREAT IT WAS HELD BY THE TRIBUNAL THAT WHERE THE REVISED PARTNERSHIP DEED, I.E., WITH REFERENCE TO WHICH THE ASSESSEES TOTAL CLAIM OF ` 1.83 LAKHS AS SALARY TO THE WORKING PARTNERS HAS BEEN PREFERRED, STANDS PLACED ON RECOR D DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, NON-FILING OF THE SAME EARLIER WOULD N OT BE FATAL TO ITS CLAIM. HOWEVER, THE MATTER WAS REMITTED BACK TO THE AO FOR VERIFICATION , ALSO NOTING THAT IT IS THE DATE OF THE EXECUTION OF THE INSTRUMENT OF PARTNERSHIP WHICH IS RELEVANT, AND NOT THE ANTERIOR OR THE PRIOR DATE FROM WHICH THE SAME MAY HAVE BEEN MADE E FFECTIVE OR OPERATIVE. THE DATE OF THE REVISED PARTNERSHIP IS, AGAIN, WE FIND, NOT CLE AR. WE WONDER HOW THIS ISSUE CONTINUES TO ARISE FROM YEAR TO YEAR; THE ASSESSEE HAVING, AS CLAIMED, FURNISHED THE REVISED PARTNERSHIP DEED ON ITS ASSESSMENT RECORD, ALBEIT A FTER THE FILING OF THE RETURN FOR A.Y. 2005-06. UNDER THE CIRCUMSTANCES, FINDING NO MATERI AL CHANGE IN THE FACTS AND CIRCUMSTANCES, WE, ONLY CONSIDER IT PROPER TO RESTO RE THE MATTER BACK TO THE FILE OF THE AO, AS FOR THE IMMEDIATELY PRECEDING YEAR, WITH LIKE DI RECTIONS; IT HAVING BEEN NOT CLARIFIED TO US DURING HEARING BY EITHER PARTY AS TO WHAT TRANSP IRED IN THE MATTER FOR THAT YEAR SUBSEQUENT TO THE ORDER BY THE TRIBUNAL. THAT IS, W E ALLOW THE ASSESSEES CLAIM IN PRINCIPLE, SUBJECT TO VERIFICATION BY THE AO. WE D ECIDE ACCORDINGLY. I.T.A. NO.488/COCH/2009 (ASSTT. YEAR: 2006-07) 6 7. THE NEXT AND FIFTH GROUND OF THE REVENUES APPEA L IS IN RESPECT OF DISALLOWANCE OF SALARY TO ONE SMT. SANTHI (WIFE OF SHRI V. SURESHRA J, MANAGING PARTNER) AND SMT. BHAGYALAKSHMI (WIFE OF SHRI V. SUNDARARAJ, WORKING PARTNER), CLAIMED THE SUM OF ` 96,000/- AND ` 60,000/- RESPECTIVELY. THE AO, AS IN THE PRECEDING YEAR, DISALLOWED THE SAME ON THE BASIS OF THE STATEMENT OF THE TWO PARTN ERS RECORDED U/S. 131 OF THE ACT ON 08.12.2006. THE SAME, WE FIND, HAS BEEN CONFIRMED BY THE TRIBUNAL FOR THE IMMEDIATELY TWO PRECEDING YEARS, I.E., A.Y. 2004-05 AND 2005-06 . THE ASSESSEE HAS NOT BROUGHT ON RECORD ANY CHANGE IN THE MATERIAL FACTS AND CIRCUMS TANCES. IN FACT, IT HAS WE OBSERVE FAILED TO BRING ON RECORD ANY MATERIAL TO ESTABLISH THE RENDERING OF SERVICES BY THE TWO LADIES. FURTHER, THE SAID STATEMENT, WHICH, AMONG OTHERS, IS THE MATERIAL RELIED UPON BY THE REVENUE, WOULD BE MORE APPLICABLE IN-AS-MUCH AS THE DATE OF THE STATEMENT IS MORE PROXIMATE IN TIME TO THE YEAR UNDER REFERENCE, I.E. , VIS--VIS THE IMMEDIATELY TWO PRECEDING YEARS. WE DECIDE ACCORDINGLY. 8. THE SIXTH GROUND OF APPEAL RELATES TO THE DISALL OWANCE EFFECTED IN THE SUM OF ` 34035/-, EFFECTED AT THE RATE OF 10%, IN RESPECT OF EXPENDITURE ON VEHICLE REPAIRS. THE SAME IS, AGAIN, FOR WANT OF PROPER VOUCHERS. THE S AID ISSUE, WE FIND, CAME UP BEFORE THE TRIBUNAL FOR THE IMMEDIATELY PRECEDING YEAR, I.E., A.Y. 2005-06, WHEREAT A LIKE DISALLOWANCE AT 10% STOOD CONFIRMED BY IT, NOTING T HAT THE PURCHASE OF PARTS AND FUEL, BEING THE TWO MAJOR COMPONENTS OF THE EXPENDITURE U NDER THE SAID HEAD, WOULD BE NORMALLY PURCHASED ONLY FROM ACCREDITED AND PROPER SOURCES, SO THAT THE ASSESSEE, IN THE REGULAR COURSE, WOULD HAVE PROPER EXPLANATION AND V OUCHERS FOR THE SAME, AND IT IS ONLY AS AN EXCEPTION THAT THE EXPENDITURE, AS WHERE FROM ROADSIDE VENDORS, WOULD NOT BE PROPERLY VOUCHED FOR. THE DETAILS SUCH AS THE VEH ICLE NUMBERS, AS WELL AS THE SIGNATURES OF THE PAYEES, ARE ADMITTEDLY ABSENT. WE, ACCORDIN GLY, CONFIRM THE SAME. 9. THE LAST AND THE SEVENTH GROUND OF APPEAL IS IN RESPECT OF THE DISALLOWANCE IN THE SUM OF ` 81,900/- QUA EXPENDITURE ON ESTABLISHMENT CHARGES, PAID TO THE SISTER CONCERNS. THE BASIS OF THE DISALLOWANCE IS THAT THE THREE SIS TER CONCERNS, TO WHOM THE SAME STAND ALLOWED, WERE NOT IN BUSINESS OPERATION FOR THE REL EVANT YEAR, SO THAT THE REIMBURSEMENT I.T.A. NO.488/COCH/2009 (ASSTT. YEAR: 2006-07) 7 THERE-TO, WHICH IS OSTENSIBLY QUA THREE STAFF MEMBERS, I.E., ONE EACH FOR THE THREE FIRMS, ON THE BASIS THAT THEY WERE WORKING FOR THE ASSESSEE, COULD NOT BE ACCEPTED. IN APPEAL, IT WAS CONTENDED THAT THE AO DID NOT CARRY OUT ANY VERIFIC ATION OF THE ASSESSEES CLAIM, WHICH HAD EXPLAINED THE BASIS OF THE CLAIM, FURNISHING TH E NAMES OF THE THREE STAFF MEMBERS OF ITS THREE CONCERNS WORKING WITH IT, SO THAT ASSAILI NG THE SAME WAS NOT PROPER. THE LD. CIT(A) FOUND NO INFIRMITY IN THE ASSESSEES CLAIM. WE FIND THAT THE ONLY REASON FOR THE DISALLOWANCE BY THE AO, IS THE FACT THAT THE THREE SISTER CONCERNS WERE NOT FUNCTIONAL DURING THE RELEVANT YEAR. WE ARE UNABLE TO SEE AS T O HOW IS THE SAME RELEVANT; RATHER, IF AT ALL, THE SAME ENDORSES THE ASSESSEES CLAIM, INASMU CH IT IS ONLY FOR THAT REASON THAT THE SAID STAFF COULD BE SPARED BY THEIR EMPLOYER FIRMS, AND COULD WORK FOR THE ASSESSEE. WE DECIDE ACCORDINGLY, UPHOLDING THE IMPUGNED ORDER ON THIS GROUND. 10. IN THE RESULT, THE REVENUES APPEAL IS PARTLY A LLOWED AND PARTLY ALLOWED FOR STATISTICAL PURPOSES. SD/- SD/- (N.R.S.GANESAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 21ST OCTOBER, 2011 GJ COPY TO: 1. M/S. SUNDARARAJ SAW MILLS & INDUSTRIES, NETAJI R OAD, ARANATTUKARA, TRICHUR-18. 2. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE -2(1), RANGE-2, TRICHUR. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-V, KOCH I. 4. THE COMMISSIONER OF INCOME-TAX, TRICHUR. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE .