ACIT, Gwalior V. M/s Cardinal Drus Ltd., Lashkar

ITA 651/AGR/2008

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50482 (ITAT-AGRA)
• Duration Of Justice: 3 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 16-11-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 25-10-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Assessee Lawyers: ARUN DAGA
• Keywords: Capital asset; Depreciation; Question of law; Notional interest; Capital receipt; Unabsorbed depreciation
• Section: 43B; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI B.P. JAIN, ACCOUNTANT MEMBER ITA NO.651/AGR/2008 ASSESSMENT YEAR: 2005-06 ASSTT. COMMISSIONER OF INCOME TAX, VS. M/S CA RDINAL DRUGS LIMITED, CIRCLE-1, GWALIOR. SANJAY COMPLEX, JAYENDRA GANJ, GWALIOR (M.P.) (PAN: AAACC 8089 L). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A.K. SHARMA, JR. D.R. RESPONDENT BY : SHRI ARUN DAGA, C.A. DATE OF HEARING : 16.11.2011 DATE OF PRONOUNCEMENT : 21.11.2011 ORDER PER BENCH : THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER OF LD. CIT(A), GWALIOR DATED 23.07.2008 FOR THE ASSESSMENT YEAR 2005-06. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE LD. CIT(A) ERRED IN LAW AS WELL ON FACT IN ALLOWING RELIEF IN LOAN TO THE TUNE OF RS.4,61,36,264/- GRANTED BY FIN ANCIAL INSTITUTION BEING UTILISED FOR THE PURCHASE OR DEPRECIABLE ASSE T WHICH WAS NOT BORNE BY THE ASSESSEE. ITA NO.651/AGR/2008 A.Y. 2005-06 2 2. THE LD. CIT(A) ERRED IN LAW AS WELL ON FACT IN A LLOWING THE INTEREST ON LOAN WHICH WAS NOT PAID BY THE ASSESSEE AND NOTIONAL INTEREST WAS CLAIMED AS LOSS IN ITS STATEMENT OF IN COME AMOUNTING OF ` 9,98,01,259/-. 3. THE LD. CIT(A) ERRED IN LAW AS WELL ON FACT IN A LLOWING DEPRECIATION ON THE ASSETS PURCHASED OUT OF FUNDS R ECEIVED FROM THE FINANCIAL INSTITUTION AND RELIEF IN LOAN, COST OF W HICH WAS NOT REDUCED TO THAT EXTENT AND ALLOWING DEPRECIATION ON THE FUL L VALUE OF THE ASSET. 4. THE LD. CIT(A) HAS ENTERTAINED FRESH EVIDENCE I. E. CLARIFICATION DATED 07.07.2008 FROM AUDITOR, AS MENTIONED AT THE BOTTOM OF PAGE-11 OF THE APPEAL ORDER, WITHOUT AFFORDING ANY OPPORTUN ITY TO THE ASSESSING OFFICER OF EXAMINING THE FRESH EVIDENCE. 5. THE APPELLANT CRAVES LEAVE TO ADD/ALTER ANY OF T HE GROUNDS OF APPEAL 3. IN GROUND NOS.1 & 2, THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS RAISED LOANS FROM STATE BANK OF INDIA AND M.P. FINA NCIAL CORPORATION. IT WAS ARGUED BY THE LD. COUNSEL FOR THE ASSESSEE THAT DUE TO LOSSES THE ASSESSEE COMPANY WAS REGISTERED AS SICK COMPANY BY B.I.F.R. VIDE ORD ER DATED 15.01.2002 AS THE NET WORTH OF THE ASSESSEE COMPANY PLUMMETED INTO NEGATI VE. THE COMPANY SINCE WAS DECLARED AS SICK COMPANY, THE LENDING INSTITUTION C OULD NOT RECOVER THE INTEREST AND THE PRINCIPAL SINCE THE COMPANY HAD NO RESOURCES AN D WAS MAKING LOSSES. THE STATE BANK OF INDIA AND M.P. FINANCIAL CORPORATION WAVED CERTAIN PORTION OF THE LOAN AND UNPAID INTEREST DUE TO THEM. AS PER THE P ROVISIONS OF SECTION 43B OF THE ACT INTEREST ON LOAN PAYABLE TO SCHEDULED BANKS AND FINANCIAL INSTITUTION IS ALLOWABLE ONLY ON ACTUAL PAYMENT BASIS. WHEREAS, T HE DEDUCTION OF INTEREST ITA NO.651/AGR/2008 A.Y. 2005-06 3 PAYABLE WAS NEITHER CLAIMED NOR ALLOWED AS PER THE PROVISION OF SECTION 43B OF THE ACT BY THE A.O. IN TWO YEARS WHEREAS IN ONE YEAR I. E. ASSESSMENT YEAR 2001-02 THE INTEREST NOT PAID HAD BEEN ADDED BACK IN THE COMPUT ATION OF INCOME WHICH HAS BEEN ALLOWED. ON WAIVER OF PART OF LOAN AND INTERE ST BY STATE BANK OF INDIA AND M.P. FINANCIAL CORPORATION THE AMOUNT WAS FIRST CRE DITED TO THE P&L ACCOUNT AS UNDER :- WAIVER OF LOAN 46136264 WAIVER OF INTEREST 99801259 151897436 4. IT WAS FURTHER SUBMITTED THAT WHILE COMPUTING TH E INCOME FOR FILING RETURN, THE ADDITION ON ACCOUNT OF WAIVER OF LOAN BEING A C APITAL RECEIPT AND ADDITION ON ACCOUNT OF WAIVER OF INTEREST PAYABLE WAS, HOWEVER, DEDUCTED FROM THE PROFIT & LOSS OF RS.9,81,556/-. BESIDES CARRIED FORWARD LOS S FOR THE ASSESSMENT YEAR 2004- 05 AT RS.54,28,040/- WAS ALSO SPECIFIED IN THE COMP UTATION SHEET WHICH FORMED PART OF THE INCOME TAX RETURN. THE A.O. HOWEVER IN GROS S VIOLATION OF THE SETTLED POSITION OF LAW AND FACTS MADE THE FOLLOWING ADDITI ONS :- RELIEF IN PRINCIPAL LOAN BY WAIVING THE SAME BY SBI & MPFC RS.4,61,36,364/- WAIVER OF INTEREST PAYABLE TO SBI & MPFC RS.9,98,01 ,259/- (WHICH WAS NOT PAID AND NOT ALLOWED AS DEDUCTION BY VIRTUE OF SECTION 43B) LESS: INTEREST PAYABLE DISALLOWED U/S 43B RS.1,66, 55,735/- RS.8,31,45,524/- -------------------- TOTAL RS.1,29,28,188/- ITA NO.651/AGR/2008 A.Y. 2005-06 4 5. THE A.O. ALSO FAILED TO SET OFF THE CARRIED FORW ARD LOSS OF ASSESSMENT YEAR 2004-05 WHICH WAS DUE TO UNABSORBED LOSS AND DEPREC IATION AS ASSESSED U/S. 143(3). ACCORDINGLY AN APPEAL WAS FILED BEFORE THE LD. CIT(A). 6. SUBSEQUENTLY AN APPLICATION U/S 154 FOR RECTIFIC ATION OF THE ASSESSMENT WAS FILED BEFORE THE A.O. FOR DELETING THE ADDITION MAD E FOR THE PART WAIVER OF LOAN WHICH IS A CAPITAL RECEIPT AND PART WAIVER OF INTER EST PAYABLE AS INTEREST WAS NOT ALLOWED AS A DEDUCTION U/S.43B AND PROVISION OF SEC TION 41(1) WERE NOT ATTRACTED. THE A.O. WAS ALSO REQUESTED TO ALLOW CARRY FORWARD OF LOSS AS PER INCOME TAX ASSESSMENT FOR THE EARLIER YEARS AS PER RECORD. TH E A.O., HOWEVER, REJECTED THE RECTIFICATION APPLICATION MOVED U/S.154. HENCE AN APPEAL WAS ALSO FILED BEFORE THE LD. CIT(A) AGAINST A.O.S ORDER REJECTING THE RECTI FICATION APPLICATION MADE U/S.154. 7. THE LD. CIT(A) AFTER EXAMINING THE DOCUMENTS REL ATING TO SANCTION OF LOAN AS WELL AS TERMS & CONDITIONS OF WAIVER OF LOAN AND IN TEREST AND AFTER ALLOWING AN OPPORTUNITY TO THE A.O. TO INDICATE WHETHER THEY WE RE NOT OF CAPITAL NATURE AND LOOKING TO THE RECORDS HELD THAT LOAN WAIVED BEING OF CAPITAL NATURE CAN NOT BE ADDED BACK. SIMILARLY INTEREST WAIVED BEING NOT AL LOWED AS A DEDUCTION CAN NOT BE ADDED BACK U/S 41(1) OF THE ACT. THE LD. CIT(A) AL SO ALLOWED SET OFF OF EARLIER YEAR ITA NO.651/AGR/2008 A.Y. 2005-06 5 LOSSES AND UNABSORBED DEPRECIATION AS PER LAW AND P ENALTY ALLOWED IN THE APPEAL. THE REVENUE HAS FILED THE APPEAL AGAINST THE LD. CI T(A)S ORDER. 8. IT WAS FURTHER SUBMITTED THAT FOR ATTRACTING THE PROVISIONS OF SECTION 41(1), THE FIRST REQUISITE CONDITION TO BE SATISFIED IS TH AT THE ASSESSEE SHOULD HAVE GOT DEDUCTION OR BENEFIT OF ALLOWANCE IN RESPECT OF LOS S, EXPENDITURE OR TRADING LIABILITY INCURRED BY IT AND SUBSEQUENTLY DURING ANY PREVIOUS YEAR, THE ASSESSEE SHOULD HAVE RECEIVED ANY AMOUNT IN RESPECT OF SUCH LOSS, EXPEND ITURE OR TRADING LIABILITY BY WAY OF REMISSION OR CESSATION THEREOF. THE REMISSION W OULD BECOME INCOME ONLY IF THE ASSESSEE HAS CLAIMED DEDUCTION IN RESPECT OF EXPEND ITURE OR TRADING LIABILITY. IN THIS REGARD, RELIANCE WAS PLACED UPON THE JUDGEMENT IN THE CASE OF CIT VS. TOSHA INTERNATIONAL LIMITED, 209 TAXATION (2009) 57 (DEL. ), COPY PLACED ON RECORD. THE FACT OF THE ASSESSEES CASE AND THE CASE OF TOSHA I NTERNATIONAL LIMITED ARE PARI- PASUE. THEREFORE, IT WAS REQUESTED THAT THE REVENU ES GROUND OF APPEAL MAY BE DISMISSED. 9. IT WAS FURTHER SUBMITTED THAT AS ALREADY SUBMITT ED IN THE STATEMENT OF FACT AND DISCUSSED IN DETAIL BY THE LD. CIT(A) IN THE AP PELLATE ORDER, THE INTEREST OF RS.9,98,01,259/- ON LOAN WAS NOT PAID TO THE SBI/MP FC AND ACCORDINGLY NOT CLAIMED AS A DEDUCTION IN COMPUTATION OF INCOME/LOS S IN ANY OF THE YEAR(S) AND THEREFORE, THE A.O. MADE A PATENT ERROR IN ADDING I T U/S 41(1) AS REMISSION OF A ITA NO.651/AGR/2008 A.Y. 2005-06 6 LIABILITY WHILE THE ABOVE INTEREST LIABILITY WAS NE VER CLAIMED NOR ALLOWED. HENCE THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION. R ELIANCE WAS PLACED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. TOSHA INTERNATIONAL LIMITED, 209 TAXATION (2009) 57 (DEL.). REVENUES GROUND IS FALLACIOUS AND MISCONCEIVED AND MAY THEREFORE, BE DISMISSED. 10. IN RESPONSE TO THE QUERY FROM THE EARLIER BENCH , THE LD. COUNSEL FOR THE ASSESSEE SHRI ARUN DAGA, CHARTERED ACCOUNTANT SUBMI TTED HIS WRITTEN SUBMISSION WITH RESPECT TO ALL THE GROUNDS OF APPEAL AND WITH SPECIFIC REFERENCE TO GROUND NOS.1 & 2 HE MET OUT THE QUERIES AND SUBMITTED AS UNDER :- AT THE OUTSET IT IS SUBMITTED THAT WAIVER OF LOAN IS NOT AN INCOME WITHIN THE MEANING OF SECTION 28(IV) OR SECT ION 28(I) OR SECTION 2(24) OF THE ACT. IT IS FURTHER SUBMITTED FOR ATTR ACTING THE PROVISION OF SECTION 41(1), THE FIRST REQUISITE CONDITION TO BE SATISFIED IS THAT THE ASSESSEE SHOULD HAVE GOT DEDUCTION OR BENEFIT OF AL LOWANCE IN RESPECT OF LOSS, EXPENDITURE OR TRADING LIABILITY INCURRED BY IT AND SUBSEQUENTLY DURING ANY PREVIOUS YEAR. THE ASSESSE E SHOULD HAVE RECEIVED ANY AMOUNT IN RESPECT OF SUCH LOSS, EXPEND ITURE OR TRADING LIABILITY BY WAY OF REMISSION OR CESSATION THEREOF. THE REMISSION WOULD BECOME INCOME ONLY IF THE ASSESSEE HAS CLAIME D DEDUCTION IN RESPECT OF EXPENDITURE OR TRADING LIABILITY. IT IS THE LOAN TO THE ASSESSEE. IN THIS REGARD RELIANCE WAS PLACED ON THE JUDGEMENT IN CIT VS. TOSHA INTERNATIONAL LIMITED, 209 TAXATION (2009) 57 (DEL.) AND ISKRAEMECO REGENT LIMITED VS. CIT (2011) 196 TAXATI ON 103 (MAD), COPIES OF THE JUDGMENTS ARE FILED ON RECORD. THE F ACT OF ASSESSEES CASE AND THE CASE OF ABOVEMENTIONED CASES ARE PARI- PASUE. AS PER CASE LAW OF HONBLE BOMBAY HIGH COURT IN THE CASE O F MAHINDRA & MAHINDRA LIMITED VS. CIT (2003) 261 ITR 503, THE PR INCIPAL AMOUNT ITA NO.651/AGR/2008 A.Y. 2005-06 7 OF LOAN WAIVED BY THE BANK CANNOT BE TREATED TO BE INCOME OF THE ASSESSEE EITHER WITHIN THE MEANING OF SECTION 41(1) OF THE ACT OR OTHERWISE WITHIN THE MEANING OF SECTION 28(IV) OR S ECTION 28(I) OR SECTION 2(24) OF THE ACT. IT IS HUMBLY PRAYED THAT REVENUES GROUND OF APPEAL MAY BE DISMISSED. IT IS SUBMITTED THAT PRIMA-FACIE THE GROUND RAISED BY THE REVENUE IS MISCONCEIVED. AS ALREADY SUBMITTED IN T HE STATEMENT OF FACTS AND DISCUSSED IN DETAIL BY THE CIT(A) IN THE APPELLATE ORDER, RS.1,66,55,735/- AND RS.2,18,89,444/- OUT OF THE IN TEREST OF RS.9,98,01,259/- WERE DISALLOWED U/S. 43B IN ASSESS MENT YEAR2001-02 AND 2002-03 RESPECTIVELY. THIS FACT WAS DISCUSSED ON PAGE LAST PARA OF PAGE 4 AND FIRST PARA OF PAGE 5 OF CIT(A) ORDER. THE REST AMOUNT REPRESENT FOR INTEREST OF THE ASSESSMENT YEAR 2003- 04 AND 2004-05 WHICH WAS NOT DEBITED IN P&L ACCOUNT AS INTEREST WA S NOT PAID IN THE SBI/MPFC. THIS FACT ALSO MENTIONED ON PAGE NO.5 & 14 OF CIT(A) ORDER. AS INTEREST NOT CLAIMED AS A DEDUCTION IN C OMPUTATION OF INCOME/LOSS IN ANY OF THE YEAR(S), THEREFORE THE AS SESSING OFFICER MADE A PATENT ERROR IN ADDING IT U/S 41(1) AS REMIS SION OF A LIABILITY WHILE THE ABOVE INTEREST LIABILITY WAS NEVER CLAIME D NOR ALLOWED. HENCE THE LEARNED CIT(A) RIGHTLY DELETED THE ADDITI ON. WE AGAIN RELY ON HONBLE DELHI HIGH COURT DECISION IN CIT(A) VS. TOSHA INTERNATIONAL LIMITED, 209 TAXATION (2009) 57 (DEL. ) AND ISKRAEMECO REGENT LIMITED VS. CIT (2011) 196 TAXATION 103 (MAD ) SUPRA. REVENUES GROUND IS FALLACIOUS AND MISCONCEIVED AND MAY THEREFORE DISMISS. 11. THE LD. CIT(A) DELETED THE ADDITIONS MADE BY TH E A.O. 12. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTH ER HAND, OPPOSED THE ORDER MADE BY THE LD. CIT(A) AND RELIED UPON THE ORDER OF THE A.O. ITA NO.651/AGR/2008 A.Y. 2005-06 8 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE LD. COUNSEL FOR THE ASSESSEE SHRI ARUN DAGA, RELIED UPON THE DECISION OF HONBLE HIGH COURT OF MADRAS IN THE CASE OF ISKRAEMECO REGE NT LIMITED VS. CIT REPORTED IN (2011) 49 DTR (MAD) 185/196 TAXATION 103 (MAD.) DATED 23 RD NOVEMBER, 2010, COPY OF WHICH IS ON RECORD, WHERE IT HAS BEEN HELD THAT PROFIT CHARGEABLE TO TAX UNDER SECTION 41(1) WITH REGARD TO WAIVER OF LO AN RECEIVED FOR THE PURPOSE OF ACQUIRING CAPITAL ASSETS DID NOT CONSTITUTE TRADING LIABILITY AND HENCE SECTION 41(1) OF THE ACT HAS NO APPLICATION WHERE LOAN IS WAIVED BY THE BANK. THEREFORE, LOAN RECEIVED FOR THE PURPOSE OF ACQUIRING CAPITAL ASSET S DID NOT CONSTITUTE A TRADING LIABILITY AND HENCE SECTION 41(1) HAS NO APPLICATIO N WHERE THE LOAN IS WAIVED BY THE BANK. SHRI DAGA FURTHER RELIED UPON THE DECISION O F HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT VS. TOSHA INTERNATIONAL LIMITED REPORTED IN (2009) 209 TAXATION 57 (DEL.), COPY OF WHICH IS ON RECORD WHERE IT HAS BEEN HELD THAT THE ASSESSEE COMPANY HAVING INCURRED LOSSES BECAME SICK COMPANY AND WAS REGISTERED WITH B.I.F.R. AND AS A ONE TIME SETTLEMENT SCHEME, THE F INANCIAL INSTITUTIONS AND BANKS REMITTED 40% OF THE LOANS AND WAIVED THE ENTIRE AMO UNT OF INTEREST. THE A.O. TREATING THE WAIVER OF LOAN AND INTEREST AMOUNT AS TAXABLE LIABILITY AND TAXED THE SAME UNDER SECTION 41(1) OF THE ACT. THE LD. CIT(A ) AND THE TRIBUNAL DELETED THE ADDITION MADE AS THE ASSESSEE HAD NOT CLAIMED DEDUC TION OF LOAN AND ALSO OF INTEREST IN THE EARLIER YEAR AS AN EXPENDITURE OR A S A TRADING LIABILITY. THE HONBLE HIGH COURT CONFIRMED THE TRIBUNALS ORDER BY HOLDIN G THAT THE TRIBUNAL HAS ITA NO.651/AGR/2008 A.Y. 2005-06 9 RENDERED ITS DECISION ON CORRECT APPRECIATION OF LA W AS NO SUBSTANTIAL QUESTION OF LAW WAS INVOLVED AND THE REVENUES APPEAL WAS DISMI SSED FOR THE ASSESSMENT YEAR 2001-02. THIS ORDER OF THE HONBLE HIGH COURT OF DELHI IS DATED 23.09.2008. 14. THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF TOSHA INTERNATIONAL LIMITED AND ISKRAEMECO REGENT LIMITED (SUPRA). THE FACTS IN THE PRESENT CASE ARE THAT THE ASSESSEE COMPANY HAD BEEN REGISTERED WITH B.I.F.R. AND THE BANK AND FINANCIAL INSTITUTIONS HAVE WAIVED LOA N AND THE INTEREST IN ONE TIME SETTLEMENT. THE TERM LOAN RAISED FROM M.P. FINANCI AL CORPORATION WAS USED FOR ACQUIRING THE CAPITAL ASSETS AND DIRECTLY COVERED B Y THE DECISION IN THE CASE OF TOSHA INTERNATIONAL LIMITED AND ISKRAEMECO REGENT L IMITED (SUPRA), WHEREAS THE LOAN WAIVER BY THE BANK ON THE CASH CREDIT LIMIT IS DIRECTLY COVERED BY THE DECISION OF HONBLE HIGH COURT OF DELHI IN THE CASE OF TOSHA INTERNATIONAL LIMITED (SUPRA) AND CANNOT BE HELD TO BE THE INCOME OF THE ASSESSEE . THEREFORE, THE PRESENT CASE DOES NOT FALL UNDER THE PROVISIONS OF SECTION 41(1) OF THE ACT AND THE LD. CIT(A) HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE BY DE LETING THE ADDITION MADE BY THE A.O. WE FIND NO ERROR IN THE ORDER OF THE LD. CIT( A) WITH RESPECT TO GROUND NOS.1 & 2 OF THE REVENUE. THUS, GROUND NOS.1 & 2 OF THE REVENUE ARE DISMISSED. 15. AS REGARDS GROUND NO.3, IT WAS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE SAID GROUND DOES NOT ARISE OUT OF A.O.S O R LD. CIT(A)S ORDER. OUR ITA NO.651/AGR/2008 A.Y. 2005-06 10 ATTENTION WAS INVITED TO THE ORDER OF THE LD. CIT(A ) AT PAGE NO.12, LAST PARAGRAPH, WHICH MENTIONS AS UNDER :- THE ASSESSING OFFICER WAS ALSO REQUIRED TO INDICAT E IF THE LOAN SANCTIONED BY THE SBI & MPFC WERE NOT OF CAPITAL NA TURE AND IF THE SAME WERE OF REVENUE NATURE OR IF ANY PART THERE OF COULD BE SO TREATED OR COULD HAVE ANY ELEMENT OF A REVENUE RECE IPT OR OF TAXABLE INCOME. THERE IS NOTHING ON RECORD IF THE SAID LOA N CARRIED ANY ELEMENT OF A REVENUE NATURE OR IF THE LOAN CARRIED ANY OTHER ELEMENT OTHER THAN OF CAPITAL NATURE. 16. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. SINCE THE SAID GROUND NO.3 OF THE REVENUE DOES NOT ARISE OUT OF THE A.O.S OR THE LD. CIT(A)S ORDER, THEREFORE, IT IS NOT A MATTER OF OU R ADJUDICATION. HENCE, THE GROUND NO.3 RAISED BY THE REVENUE IS DISMISSED. 17. AS REGARDS TO GROUND NO.4, WITH REGARD TO FRESH EVIDENCE, IT WAS SUBMITTED THAT THIS IS NOT A FRESH EVIDENCE AND THE LD. CIT(A ) WITHIN HIS POWERS UNDER SECTION 250(4) CAN MAKE FURTHER QUERIES. IN VIEW OF THESE POWERS, THE LD. CIT(A) SOUGHT CERTAIN CLARIFICATIONS FROM THE AUDITOR OF THE ASSE SSEE COMPANY WHICH WERE GIVEN BY THE ASSESSEE. 18. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. WE ARE CONVINCED WITH THE ARGUMENTS MADE BY THE LD. CO UNSEL FOR THE ASSESSEE SHRI DAGA THAT THE LD. CIT(A) WITHIN HIS POWERS UNDER SE CTION 250(4) OF THE ACT CAN ITA NO.651/AGR/2008 A.Y. 2005-06 11 CONDUCT ENQUIRES WHILE DISPOSING OF AN APPEAL. IN VIEW OF THOSE POWERS, CERTAIN CLARIFICATIONS WERE SOUGHT WHICH WERE GIVEN BY THE ASSESSEE COMPANY AND THEREFORE, THE SAME CANNOT BE HELD TO BE AN ADDITIO NAL EVIDENCE UNDER RULE 46A. THEREFORE, IN THE CIRCUMSTANCES AND FACTS OF THE CA SE, GROUND NO.4 OF THE REVENUE IS DISMISSED. 19. IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO. 651/AGR/2008 IS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 21.11.2011) SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 21 ST NOVEMBER, 2011 PBN/* COPY OF THE ORDER FORWARDED TO: APPELLANT/RESPONDENT/CIT CONCERNED/CIT(APPEALS) CO NCERNED/D.R., ITAT, AGRA BENCH, AGRA/GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY