Gujarat Liqui Pharmacaps Pvt. Ltd., Baroda V. The Dy.CIT.,Circle-1(1), Baroda

ITA 573/AHD/2012

• Counselvise Citation: 57320514 RSA 2012
• Duration Of Justice: 3 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 18-08-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 06-03-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGHSR D R
• Assessee Lawyers: S N SOPARKAR
• Keywords: Business expenditure; Salary income; Services rendered outside India; Non-deduction of tax; Bad and doubtful debts
• Section: 6

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD .. , ( .) , BEFORE SHRI G.D. AGARWAL,VICE PRESIDENT (AZ) AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.573/AHD/2012 ( / ASSESSMENT YEAR : 2008-09) GUJARAT LIQUI PHARMACAPS PVT.LTD. NO.662-666, GIDC WAGHODIA BARODA 391 760 / VS. THE DCIT CIRCLE-1(1) BARODA % & ./ ./ PAN/GIR NO. : AAACG 7270 K ( %( / APPELLANT ) .. ( )*%( / RESPONDENT ) %( + / APPELLANT BY : SHRI S.N. SOPARKAR, AR )*%( , + / RESPONDENT BY : SHRI NARENDRA SINGH, SR.DR -. , /& / DATE OF HEARING 18/08/2015 0123 , /& / DATE OF PRONOUNCEMENT 10/09/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-I, BARODA [CIT(A) IN SHORT] DATED 20/12/2011 PERTAINING TO ASSESSMENT YEAR (AY) 2008-09. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE LEARNED CIT(APPEALS) HAS ERRED IN CONFIRMING T HE LEARNED ASSESSING OFFICERS ACTION OF DISALLOWING THE SUM O F RS.32,19,508 BY ITA NO.573/AHD/ 2012 GUJARAT LIQUI PHARMACAPS PVT.LTD. VS. DCIT ASST.YEAR 2008-09 - 2 - UPHOLDING THAT IN VIEW OF NON DEDUCTION OF TAX FROM SALARY PAID TO FOREIGN SALES PERSONNEL, THE DEDUCTION OF THE AMOUN T UNDER REFERENCE CANNOT BE ALLOWED AS THE SALARY PAID TO T HEM HAS BEEN EARNED IN INDIA. 2. THE LEARNED CIT(APPEALS) HAS ERRED IN CONFIRMING TH E LEARNED ASSESSING OFFICERS ACTION OF DISALLOWING THE SUM OF RS.6,84,250 THE DETAILS OF WHICH HAVE BEEN MENTIONED ON PAGE 3 OF T HE ASSESSMENT ORDER. 3. THE LEARNED CIT(APPEAL) HAS ERRED IN DISALLOWING TH E SUM OF RS.1,991 BY HOLDING THE SAME TO BE PRIOR PERIOD EXP ENSES AS PERTAINING TO FEBRUARY AND MARCH, 2007 REPRESENTING TELEPHONE BILLS PAID TO TATA INDICON. THE APPELLANT RESERVES THE RIGHT TO ADD/AMEND/ALTER THE GROUND OF APPEAL ADDUCED ABOVE. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE A SSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 06/12/2010. WHILE FRAMING THE ASSESSMENT, TH E AO MADE ADDITION ON ACCOUNT OF NON-DEDUCTION OF TAX ON SALARY PAID T O FOREIGN SALES EMPLOYEES OF RS.32,19,508/-, ADDITION ON ACCOUNT OF DISALLOWANCE U/S.40(A)(IA) OF RS.3,54,264/-, ADDITION ON ACCOUNT OF DISALLOWANCE OF BAD DEBTS OF RS.6,84,250/-, ADDITION ON ACCOUNT OF DISA LLOWANCE OF CAPITAL EXPENSE OF RS.17,858/- AND ADDITION ON ACCOUNT OF DISALLOWANCE OF PRIOR PERIOD EXPENSE OF RS.1,991/-. AGAINST THE SAID ASS ESSMENT ORDER, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE PARTLY ALLOWED THE APPEAL; THEREBY THE LD.CIT(A) DIRECTED THE AO TO ALLOW THE CREDIT OF TD S OF RS.1,05,989/- SUBJECT TO VERIFICATION AND CONFIRMED THE DISALLOWA NCE OF RS.32,19,508/-. ITA NO.573/AHD/ 2012 GUJARAT LIQUI PHARMACAPS PVT.LTD. VS. DCIT ASST.YEAR 2008-09 - 3 - FURTHER, THE LD.CIT(A) CONFIRMED THE DISALLOWANCE O F RS.3,54,264/- AS MADE BY THE AO BY INVOKING THE PROVISIONS OF SECTIO N 40(A)(IA) OF THE ACT. THE LD.CIT(A) ALSO CONFIRMED THE DISALLOWANCE OF RS.6,84,520/- AS MADE ON ACCOUNT OF DISALLOWANCE OF BAD DEBTS. THE LD.CIT(A) FURTHER CONFIRMED THE ADDITION OF RS.1,991/- MADE ON ACCOUN T OF PRIOR PERIOD EXPENSE. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASSESSEE IS NOW IN APPEAL BEFORE US. 3. FIRST GROUND IS AGAINST CONFIRMATION OF DISALLOW ANCE OF RS.32,19,508/-. THE LD.COUNSEL FOR THE ASSESSEE SU BMITTED THAT BOTH THE AUTHORITIES BELOW HAVE ERRED IN MAKING THE DISALLOW ANCE AND ADDING THE SAME TO THE INCOME OF THE ASSESSEE. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE MADE PAYMENT TO ITS EMP LOYEES POSTED OUT OF INDIA WHO WERE DURING THE YEAR UNDER CONSIDERATION NON-RESIDENT INDIAN. THE INCOME EARNED AND RECEIVED WAS OUT OF INDIA, TH EREFORE SUCH SALARY INCOME WAS NOT SUBJECTED TO TAX IN INDIA. UNDER T HESE FACTS, THE ASSESSEE WAS JUSTIFIED FOR NOT DEDUCTING THE TAX AT SOURCE. HE SUBMITTED THAT THE TAX CAN BE DEDUCTED WHEN THE INCOME IS TAXABLE IN I NDIA. THE LD.COUNSEL FOR THE ASSESSEE, IN SUPPORT OF THE CONTENTION, HAS PLACED RELIANCE ON THE JUDGEMENT OF HONBLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF DIRECTOR OF INCOME-TAX (INTERNATIONAL TAXATION) VS. PRAHLAD VIJENDRA RAO REPORTED AT (2011) 239 CTR 107 (KARNA.). THE LD.CO UNSEL FOR THE ASSESSEE FURTHER PLACED RELIANCE ON THE JUDGEMENT O F HONBLE HIGH COURT ITA NO.573/AHD/ 2012 GUJARAT LIQUI PHARMACAPS PVT.LTD. VS. DCIT ASST.YEAR 2008-09 - 4 - OF DELHI RENDERED IN THE CASE OF MOTHER DAIRY FRUIT , VEGETABLE (P.)LTD. VS. CIT REPORTED AT (2011 240 CTR 40 (DELHI). 3.1. ON THE CONTRARY, SR.DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. HE SUBMITTED THAT THE COORDINATE BENCH IN T HE CASE OF CAP.A.L. FERNANDES VS. ITO (2002) 81 ITD 203(MUM) HAS DECID ED THE ISSUE IN FAVOUR OF THE REVENUE. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE AO MADE DISALLOWANCE ON ACCOUNT OF NON-DEDUCTION OF TAX. THE AO WAS OF THE VIEW THAT THE ASSESSEE WAS REQUIRED TO DEDUCT TAX ON THE SALARY PAID TO STAFF (FOREIGN) OF RS.32, 19,508/-. THE LD.CIT(A) CONFIRMED THE ADDITION BY FOLLOWING THE DECISION OF THE COORDINATE BENCH IN THE CASE OF CAP.A.L. FERNANDES VS. ITO(SU PRA). WE FIND THAT THE LD.CIT(A) HAS RECORDED AT PAGE-6 OF HIS ORDER T HAT TWO OF ITS EMPLOYEES, NAMELY SHRI MAHENDRA KOTHARI SHRI SAHAS HANK KARANDE AND DETAILS OF THEIR STAY IN INDIA ARE STATED TO BE 57 DAYS AND 47 DAYS RESPECTIVELY. HOWEVER, IN THE CASE OF SHRI ATUL SH ARMA, HIS DETAILS OF STAY IN INDIA WAS NOT AVAILABLE. THREFOR, SO FAR D ISALLOWANCE OF EXPENDITURE IN RESPECT OF SALARY TO ATUL SHARMA IS CONCERNED, SAME NEEDS NO INTERFERENCE BY THIS TRIBUNAL. ACCORDINGLY, DIS ALLOWANCE OF EXPENDITURE OF RS.3,42,187/- IS HEREBY CONFIRMED. I N THE PRESENT CASE, THE ITA NO.573/AHD/ 2012 GUJARAT LIQUI PHARMACAPS PVT.LTD. VS. DCIT ASST.YEAR 2008-09 - 5 - UNDISPUTED FACTS ARE THAT THE SALARY WAS PAID TO TH E EMPLOYEES WHO WERE APPOINTED UNDER THE CONTRACT OF EMPLOYMENT AT OUTSI DE INDIA FOR CARRYING OUT THE BUSINESS OPERATIONS OF THE ASSESSEE-COMPANY . THE CONTENTION OF THE ASSESSEE IS THAT THE SALARY WAS PAID OUTSIDE IN DIA FOR THE SERVICES RENDERED OUTSIDE INDIA AND THE PERSONS WHO WERE NO N-RESIDENT INDIANS DURING THE YEAR UNDER APPEAL. THEREFORE, IT IS CON TENDED THAT THE INCOME ACCRUED AND RECEIVED OUTSIDE INDIA WAS NOT SUBJECTE D TO TAX IN INDIA. THE ASSESSEE WAS JUSTIFIED NOT TO DEDUCT THE TAX ON SUC H PAYMENT. THE LD.CIT(A) HAS FOLLOWED THE DECISION OF COORDINATE B ENCH RENDERED IN THE CASE OF CAP.A.L. FERNANDES VS. ITO (2002) 81 ITD 2 03(MUM) AND WAS ALSO OF THE OPINION THAT THE SALARY IN QUESTION WER E CREDITED TWO EMPLOYEES ACCOUNTS MAINTAINED IN INDIA. THE SAME WERE DEEMED TO BE RECEIVED IN INDIA AND ALSO AS PER SECTION 5 OF THE ACT IRRESPECTIVE OF THE STATUS OF THE CONCERNED EMPLOYEES, THE SAME WERE TA XABLE IN INDIA. THE ONLY QUESTION WHICH REQUIRES FOR CONSIDERATION IS T HAT WHETHER THE SALARY PAID TO FOREIGN EMPLOYEES WAS TAXABLE IN INDIA. CO NSEQUENTLY, THE TAX WAS REQUIRED TO BE DEDUCTED BY THE ASSESSEE. THE R ESIDENTIAL STATUS OF ANY PERSON IS DETERMINED IN ACCORDANCE WITH THE PRO VISIONS OF SECTION 6 OF THE ACT. THE AUTHORITIES BELOW HAVE NOT MADE DI SALLOWANCE ON THE BASIS OF THE STATUS OF THE ASSESSEE. THE DISALLOWA NCE HAS BEEN MADE ON THE BASIS THAT THE INCOME RECEIVED BY THE PERSONS W AS DEEMED TO HAVE BEEN RECEIVED AND ACCRUED IN INDIA. THEREFORE, SAM E WAS TAXABLE IN INDIA. THE LD.COUNSEL FOR THE ASSESSEE ARGUED AT L ENGTH TO BUTTRESS THE ITA NO.573/AHD/ 2012 GUJARAT LIQUI PHARMACAPS PVT.LTD. VS. DCIT ASST.YEAR 2008-09 - 6 - CONTENTION THAT SALARY PAID TO EMPLOYEES POSTED OUT OF INDIA, AND RENDERING SERVICES OUT OF INDIA WOULD NOT BE TAXABL E. THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF DIRECTOR OF INC OME TAX (INT.TAXN.) VS. PRAHLAD VIJENDRA RAO (SUPRA) NOTED THE FACT THA T THE EMPLOYEE BEING CHIEF ENGINEER WORKING IN A SHIP, STAYED OUT OF IND IA DURING THE RELEVANT PERIOD FOR 227 DAYS AND THAT SALARY WAS EARNED BY H IM WAS ON ACCOUNT OF THE WORK DISCHARGED BY HIM ON BOARD DURING THE SAID PERIOD, WHICH OUTSIDE THE SHORES OF INDIA. THE HONBLE HIGH COUR T AFTER EXAMINING THE LAW AND JUDICIAL PRONOUNCEMENT HELD THAT IT WOULD E MERGE THAT ASSESSEE WAS WORKING OUTSIDE INDIA FOR A PERIOD OF 225 DAYS AND THE INCOME IN QUESTION EARNED BY ASSESSEE HAS NOT ACCRUED IN INDI A AND IS NOT DEEMED TO HAVE ACCRUED IN INDIA. AS SUCH, THE CONTENTION OF THE REVENUE CANNOT BE ACCEPTED. 4.1. FROM THE ABOVE, IT IS EVIDENT THAT THE HONBLE HIGH COURT HAS RULED WHERE THE EMPLOYEE DISCHARGES HIS DUTIES OUTSIDE IN DIA AND HIS STAY IS BEYOND THE PRESCRIBED LIMIT TO TERM HIM RESIDENT, T HE INCOME EARNED EARNED UPON SUCH DISCHARGE OF DUTIES OUTSIDE INDIA WOULD NOT BE WITHIN THE AMBIT OF TERM HAS ACCRUED IN INDIA AND IS DEEME D TO HAVE ACCRUED IN INDIA. THEREFORE, WOULD NOT BE TAXABLE IN INDIA. ADMITTEDLY, IF ANY INCOME WHICH IS NOT TAXABLE IN INDIA, WOULD NOT BE LIABLE FOR TAX. IN THE CASE IN HAND, ADMITTEDLY TWO OF THE EMPLOYEES OF TH APPELLANT WORKED OUTSIDE INDIA AND WERE NRI. THEREFORE, IN THE LIGH T OF JUDGMENT OF ITA NO.573/AHD/ 2012 GUJARAT LIQUI PHARMACAPS PVT.LTD. VS. DCIT ASST.YEAR 2008-09 - 7 - HONBLE KARNTAKA HIGH COURT IN THE CASE OF DIT (INT .TAXN.) VS. PRAHLAD VIJENDRA RAO (SUPRA), THE AMOUNT OF SALARY PAID TO SUCH EMPLOYEES WOULD NOT BE TAXABLE IN INDIA. THE REVENUE HAS NOT BROUG HT TO OUR NOTICE ANY CONTRARY BINDING PRECEDENT. THEREFORE, THE DISALLO WANCE OF EXPENDITURE TOWARDS PAYMENT OF SALARIES TO REMAINING TWO EMPLOY EES, IS HEREBY DELETED. THIS GROUND OF ASSESSEES APPEAL IS PARTL Y ALLOWED. 5. APROPOS TO GROUND NO.2, THE LD.COUNSEL FOR THE A SSESSEE SUBMITTED THAT FIGURES MENTIONED IN THE GROUND PERTAINS TO PA GE 4 BUT NOT OF PAGE 3. THE SAME WAS DUE TO TYPOGRAPHICAL ERROR. HE SUBMIT TED THAT IN PLACE OF PAGE 3, PAGE 4 AND 5 MAY BE READ. THE LD.DR HAS NO OBJECTION TO THIS SUBMISSION OF THE LD.COUNSEL FOR THE ASSESSEE. THE REFORE, THE FIGURE OF DISALLOWANCE OF RS.6,84,520/-, MENTIONED IN THE PAG E 4 AND 5 OF THE ASSESSMENT ORDER IS TAKEN AS SUBJECT MATTER OF THIS GROUND. 6. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSION MADE BEFORE LD.CIT(A). HE SUBMITTED THAT THE TRANSACTIO NS WERE AFFECTED IN THE NORMAL COURSE OF BUSINESS, THEREFORE, WRITE OFF THE SAME NEEDS TO BE ALLOWED. HE SUBMITTED THAT IN VIEW OF JUDGMENT OF THE HONBLE APEX COURT RENDERED I THE CASE OF T.R.F. LTD., NOW THE A SSESSEE IS NOT REQUIRED TO DEMONSTRATE THAT DEBT ACTUALLY BECAME BAD. HE S UBMITTED THAT IT IS SUFFICIENT THAT THE ASSESSEE HAS WRITTEN OFF THE AM OUNT FROM IT ACCOUNTS. ITA NO.573/AHD/ 2012 GUJARAT LIQUI PHARMACAPS PVT.LTD. VS. DCIT ASST.YEAR 2008-09 - 8 - 7. ON THE CONTRARY, THE LD. SR.DR SUPPORTED THE ORD ER OF THE AUTHORITIES BELOW. THE LD.DR SUBMITTED THAT THE LD .CIT(A) HAS GIVEN FINDING THAT THE CLAIM IS NOT OF BAD DEBT OF BUSINE SS LOSS AND IS RESPECT OF PAYMENT TO QCS. NO MATERIAL WAS PLACED ON RECORD T O SHOW THAT THE PAYMENT WAS TOWARDS THE BUSINESS OF THE ASSESSEE. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE LD.CIT(A) HAD CONFIRMED THE DISALLOWANCE BY OBSERVI NG AS UNDER: 5.2 I HAVE CONSIDERED THE SUBMISSIONS. EXCEPT FOR PAYMENT TO QCS, ALL OTHER PAYMENTS ARE CLAIMED TO BE MADE O N BEHALF OF OTHER PARTIES, WHICH DUE TO NON PAYMENT BY THE SAID PARTIES, WERE WRITTEN OFF. IN VIEW OF THIS, THE CLAIM IS NOT OF BAD DEBTS U/S 36(L)(VII) BUT IS OF 'BUSINESS LOSS'. APPELLANT HAS NOT BEEN ABLE TO FILE ANY EVIDENCE IN SUPPORT OF THE SAID AMOUNTS BE ING GENUINE BUSINESS DEBTS. IN VIEW OF THIS, CLAIM TOTALING TO RS.5,58,683/- I.E. AFTER EXCLUDING QCS CANNOT BE ALLOWED. IN RESP ECT OF CLAIM TOWARDS QCS, THERE IS NO PROOF OF TRANSACTION HAVIN G BEEN MADE TOWARDS APPELLANT'S BUSINESS, AS ADMITTEDLY, N O INVOICE IS THERE. IN THIS SITUATION, CLAIM OF RS.1,52,837/- AS LOSS ALSO COULD NOT BE ALLOWED. TO SUM UP, DISALLOWANCE OF RS.6,84, 520/- IS CONFIRMED. HOWEVER, THE SUBMISSIONS BEFORE THE CIT(A) WERE AS UNDER: 'THE LEARNED AO HAS DEALT WITH THE ISSUE VIDE PARA 6 OF THE ASSESSMENT ORDER. THE BREAK UP OFRS.6,84,250 IS AS UNDER. DATE NAME OF THE PARTY AMOUNT REMARKS ITA NO.573/AHD/ 2012 GUJARAT LIQUI PHARMACAPS PVT.LTD. VS. DCIT ASST.YEAR 2008-09 - 9 - 15-09-07 VELJI DOSABHAI & SONS P LTD. 6,250 AMOUNT WAS RECOVERABLE TOWARDS CLEARING AND FORWARDING CHARGES PAID IN FINANCIAL YEAR 2004- 05. THE PARTY DID NOT PAY THE AMOUNT AND HENCE THE SAME IS WRITTEN OFF. 31-12-2007 POLYCHEM CORPORATION 10,060 AMOUNT WAS RECOVERABLE TOWARDS PAYMENT FOR PURCHASE OF CONSUMABLE STORES MADE IN FINANCIAL YEAR 2004- 05. THE PARTY DID NOT PAY THE AMOUNT AND HENCE THE SAME IS WRITTEN OFF. 31-03-08 QCS 1,52,837 THIS REPRESENTS PAYMENT FOR INSPECTION CHARGES TO QCS MADE IN FINANCIAL YEAR 2006 - 07. THE PARTY DID NOT ISSUE ANY INVOICE AND HENCE THE SAME IS WRITTEN OFF. 31-03-08 MUNABHAI B MALIK 25,000 AMOUNT WAS RECOVERABLE TOWARDS PAYMENT FOR PURCHASE OF CEMENT. THE PARTY DID NOT PAY THE AMOUNT AND HENCE THE SAME IS WRITTEN OFF. ITA NO.573/AHD/ 2012 GUJARAT LIQUI PHARMACAPS PVT.LTD. VS. DCIT ASST.YEAR 2008-09 - 10 - 31-03-08 CJ GELATIN PRODUCTS 4,90,373 AMOUNT WAS RECOVERABLE TOWARDS PAYMENT FOR PURCHASE OF RAW MATERIAL MADE IN FINANCIAL YEAR 2006- 07. THE PARTY DID NOT PAY THE AMOUNT AND HENCE THE SAME IS WRITTEN OFF. WITH REFERENCE TO ABOVE, WE HAVE TO SUBMIT TO YOUR HONOUR THAT THESE WRITE OFFS ARE NOTHING BUT THE LEGITIMATE BUSINESS EXPENDITURE AS THE PAYMENTS MADE EARLIER ON BEHALF OF PARTIES OR PAYMENT MADE TO PARTIES BUT NO INVOICE WAS ISSUED TO US REQUIRED US TO WRITE OFF THE AMOUNTS UNDER REFERENC E. ALL THE ITEMS UNDER REFERENCE REPRESENTED PAYMENTS OF REVENUE NATURE. WE RELY ON THE DECISION OF CALCUTTA HIGH COURT IN T HE CASE OF COMMISSIONER OF INCOME TAX V.ROHTAS INDUSTRIES LTD. [(1979) 120ITR 110(CAL.)]THE COPY OF THE DECISION IS ENCLOSED AS ANNEXURE 6. THE COURT HELD AS UNDER. 'WHETHER, ON FACTS, AMOUNTS PAID AS ADVANCE WERE IN NATURE OF TRADE DEBTS TO BE REALISED BY ASSESSES FROM ITS SUPPLIER DEBTORS AND, THEREFORE, AMOUNT -WRITTEN OFF WAS ALLOWABLE AS BAD DEBT - HELD, YES ' IN VIEW OF THIS, WE HAVE TO REQUEST YOUR HONOUR TO KINDLY DIRECT THE LEARNED AO TO DELETE THE DISALLOWANCE.' 9. THERE IS NO DISPUTE WITH REGARD TO THE FINDING T HAT THE PAYMENT WERE MADE IN THE REGULAR COURSE OF BUSINESS. THERE IS NO FINDING OF THE AUTHORITIES BELOW THAT THE PAYMENT WERE NOT RELATED TO THE BUSINESS OF THE ASSESSEE. UNDER THESE FACTS, EXCEPT IN THE CASE OF QCS, WHERE THE ASSESSEE ITSELF HAS ADMITTED THAT NO INVOICE WAS IS SUED, THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN DISALLOWING THE CLAIM O F THE ASSESSEE. THEREFORE, WE HEREBY DIRECT THE AO TO DELETE THE DI SALLOWANCE EXCEPT IN THE CASE OF QCS. THE DISALLOWANCE TO THE EXTENT OF RS.1,52,837/- IS ITA NO.573/AHD/ 2012 GUJARAT LIQUI PHARMACAPS PVT.LTD. VS. DCIT ASST.YEAR 2008-09 - 11 - CONFIRMED AND REST OF THE AMOUNT IS DELETED. THIS GROUND OF THE ASSESSEES APPEAL IS PARTLY ALLOWED AS DISCUSSED HE REINABOVE. 10. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON THURSDAY, THE 10 TH DAY OF SEPTEMBER, 2015 AT AHMEDABAD. SD/- SD/- ( .. ) ( ) ( . ) ( G.D. AGARWAL ) ( KUL BHARAT ) VICE PRESIDENT (AZ) JUDICIAL MEMBER AHMEDABAD; DATED 10/ 09 /2015 6/..-, .-../ T.C. NAIR, SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. %( / THE APPELLANT 2. )*%( / THE RESPONDENT. 3. 789 : / CONCERNED CIT 4. : ( ) / THE CIT(A)-I, BARODA 5. ;< )-89 , / 893 , 7 / DR, ITAT, AHMEDABAD 6. <= >. / GUARD FILE. / BY ORDER, *; ) //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD