Dy.Commissioner of Income Tax Circle-2(1)(1), Ahmedabad V. Endeavour Careers Pvt. Ltd., Ahmedabad

ITA 669/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5830 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 16-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: D K PARIKH
• Keywords: Depreciation; Business expenditure; Earning of tax free income; Deemed to accrue or arise in india; Proportionate interest; Retrospective amendment; Additional evidence; Question of law; Commercial expediency
• Section: 143(3); 14A; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE DCIT, CIRCLE - 2(1)(1), AHMEDABAD (APPELLANT) VS M/S. ENDEAVOUR CAREERS PVT. LTD., 101, SUYOJAN BLDG OFF C.G. ROAD, AHMEDABAD - 380009 PAN: AABCE4808N (RESPONDENT) REVENUE BY : S H RI MUDIT NAGPAL , SR. D . R. ASSESSEE BY: S H RI D.K. PARIKH , A.R. DATE OF HEARING : 29 - 01 - 2 018 DATE OF PRONOUNCEMENT : 20 - 03 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS REVE NUE S APPEAL FOR A.Y. 2012 - 13 , ARIS ES FROM ORDER OF THE CIT(A) - 2 , AHM EDABAD DATED 04 - 01 - 2016 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS. 18,75,800/ - MADE U/S.40(A)(IA) OF THE ACT, WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN RESTRIC TING THE DISALLOWANCE U/S.14A R.W.R 8D TO RS.3,950/ - , WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD. I T A NO . 669 / A HD/20 16 A SS ESSME NT YEAR 2012 - 13 I.T.A NO. 669 /AHD/20 16 A.Y. 2012 - 13 PAGE NO DCIT VS. M/S. ENDEAVOUR CAREERS PVT. LTD. 2 3. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS.23,39,931/ - MADE U/S. 36(1)(III) OF THE ACT, WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD. 3. THE BRIEF FACTS OF THE CASE ARE DISCUSSED UNDER DIFFERENT GROUNDS OF APPEAL AS FOLLOWS . DISALLOWANCE OF RS. 1 8,75,800/ - U/S. 40(A)(IA) 4. O N SCRUTINY, THE ASSESSING OFFICER NO TICED THAT ASSESEE HA S NOT DEDUC TED TDS ON PAYMENT OF INTEREST TO NBF C (NON BANKING FINANCIAL COMPANY) AMOUNTING TO RS . 24 , 75 , 437/ - THEREFORE, THE SAME WAS DISALLOWED U/S40(A)(IA) OF THE ACT. 5. AGGRIEVED ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS PARTLY ALLOWED THE APPEAL BY OBSERVING AS UNDER: - 3.6 DECISION: I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE WRITTEN SUBMISSION OF THE APPELLANT. THE AO HAS MADE THE DIS ALLOWANCE OF INTEREST PAID TO NBFC'S DETAILED BELOW AMOUNTING TO RS.24,75,437/ - (CORRECT FIGURE IS RS.22,70,595/ - ) STATING THE FACT THAT THE APPELLANT HAS NOT MADE THE TDS WHILE MAKING THE PAYMENT OF INTEREST TO THESE PARTIES. SR. NO. NAME OF PAYEE TOTA L INTEREST (RS.) TDS LIABILITY U/S. 194 - A (RS.) 1 BAJAJ FINANCE LTD. 2,74,292/ - 27,429/ - 2 RELIGARE FINVEST LTD. 15,21,001/ - 1,52,100/ - 3 KOTAK MAHINDRA PRIME LTD. 3,94,795/ - 39,479/ - 4 MAGMA FINE CORP. LTD. 80,507/ - 8,050/ - TOTAL 22,70,595/ - 2,27,058/ - THUS, AS PER AO THERE WAS VIOLATION OF THE PROVISIONS OF SECTION 194A OF THE I. T. ACT AND FOR SUCH DEFAULT, THE AO INVOKED THE PROVISIONS OF SECTION 40(A) (IA) OF THE I. T. ACT. IN THE PRESENT APPELLATE PROCEEDINGS, THE APPELL ANT SUBMITTED THE FORM NO. 26A ALONG WITH ANNEXURE IN RESPECT OF THE PARTIES NAMELY; BAJAJ FINANCE LIMITED, RELIGARE FINVEST LIMITED, MAGMA FINCORP LIMITED, BESIDES A LETTER FROM KOTAK MAHINDRA PRIME LIMITED STATING THAT THE INTEREST INCOME HAS BEEN OFFERE D BY THEM FOR TAXATION IN THEIR RETURN OF INCOME IN VIEW OF THE FIRST PROVISO TO SECTION 201 R.W. SECOND PROVISO TO SECTION 40(A)(IA) WHICH WAS HELD TO BE APPLICABLE WITH RETROSPECTIVE EFFECT FROM 01/04/2005 BY THE VARIOUS COURTS. 3.7. THE APPELLANT ALSO MADE A REQUEST FOR ADMITTING THESE ADDITIONAL EVIDENCES UNDER RULE 46A OF I. T. RULES, STATING THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE APPELLANT VIDE ITS LETTER DATED 27/11/2014, SUBMITTED TO THE AO ON 04/12/2014, ENCL OSING THEREWITH THE COPIES OF THE LETTER ISSUED FOR THE PARTIES TO PROVIDE THE FORM NO. 26A IN RESPECT OF THE INTEREST PAYMENT MADE TO THEM. THROUGH THE AFORESAID LETTER, THE APPELLANT ALSO REQUESTED TO GRANT SOME TIME SO AS TO SUBMIT THI S FORM 26A DURING THE ASSESSMENT PROCEEDINGS, BUT THE AO DID NOT ACCEPT THE REQUEST OF THE APPELLANT AND FRAMED THE ASSESSMENT ORDER ON I.T.A NO. 669 /AHD/20 16 A.Y. 2012 - 13 PAGE NO DCIT VS. M/S. ENDEAVOUR CAREERS PVT. LTD. 3 29/12/2014. SO THE APPELLANT REQUESTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS DUE TO LA CK OF TIME, IT COULD NOT OBTAIN THE FORM NO. 26A' FROM THE RECIPIENT PARTIES, AND THEREFORE, THE SAME COULD NOT BE SUBMITTED. AFTER COMPLETION OF THE ASSESSMENT, THE APPELLANT RECEIVED THESE FORMS AND NOW SUBMITTED IN THE PRESENT APPEL LATE PROCEEDINGS. THE REQUEST OF THE APPELLANT IS FOUND CORRECT FOR THE REASON THAT THE SAME INCOME CANNOT BE TAXED TWICE, ONCE THE RECIPIENT HAS PAID THE TAXES THEREUPON, THEN THE APPELLANT CANNOT BE FAULTED ONCE AGAIN LIABLE FOR THE DISALLOWANCE OF THE S IMILAR AMOUNT. MOREOVER, IT TAKES SOME TIME AND EFFORTS TO GET THE FORM NO. 26A FROM SUCH A GIANT COMPANIES WHICH DO NOT BOTHER EVEN TO EXCEED THE REQUEST OF THE CLIENTS. EVEN THOUGH AFTER PERSUASIONS, THE APPELLANT COULD GET THE FORM NO.26A AND LETTERS F ROM THESE PARTIES AND THE SAME HAVE BEEN ALSO FORWARDED TO THE AO FOR ITS COMMENTS. IN THE REMAND REPORT, THE AO HAS NOT CONTROVERT THE ADDITIONAL EVIDENCES SUBMITTED BY THE APPELLANT. IT HAS SIMPLY CONTENDED THAT THE APPELLANT COULD NOT SUBMIT ANY CERTIFI CATE OR ANY CLARIFICATION DURING THE ENTIRE ASSESSMENT PROCEEDINGS. THUS, THERE WAS DEFAULT FOR NON DEDUCTION OF IDS ON THE INTEREST PAYMENT. IT HAS ALSO RAISED A VERY VAGUE OBJECTION THAT THE PAYMENTS HAVE BEEN MADE ON 28/07/2015 AND LETTER FILING ADDITIONAL EVIDENCE WAS OF 29/07/2015, THEREFORE, PAYMENT WAS NOT MADE TILL 28/07/2015 AND THE PAYMENTS WERE MADE LATE BY 7 MONTHS. IN THIS REGARD, IT IS WORTH HERE TO MENTION THAT THE LIABILITY TO MAKE THE IDS ARISES AT THE TIME OF CREDIT OF THE INTEREST OR PAYMENT THEREOF WHICHEVER IS EARLIER. SINCE IN THE INSTANT CASE, THE PAYMENT OF THE INTEREST U/S. 201 (1 A) HAVE BEEN MADE ON 28/07/2015 ON THE TAX DEDUCTIBLE AMOUNT FROM THE DATE OF SUCH TAX WAS DEDUCTIBLE TO THE DATE ON WHICH SUCH TAX IS ACT UALLY PAID I.E. LATE BY 7 MONTHS, WOULD NOT MAKE THE FORM NO. 26A INVALID AND RATHER THE OBJECTION ITSELF IS WITHOUT ANY BASE WHICH IS NOT RELEVANT. THIS INTEREST PAYMENT HAS BEEN MADE BY THE APPELLANT AS PER THE PROVISIONS OF LAW, SO IT WOULD NOT INVALIDA TE THE PROVISIONS OF SECTION 201 AND 40(A) (IA) OF THE ACT. THE AO ALSO OBSERVED THAT THESE PROVISIONS WERE NOT APPLICABLE FOR THE YEAR UNDER CONSIDERATION, AS WERE APPLICABLE FROM A. Y.201 3 - 1 4 BUT THIS IS ALSO NOT TENABLE IN VIEW OF THE VARIOUS DECISIO NS / JUDGMENTS DISCUSSED BELOW, WHEREIN THE HON'BLE COURTS HAVE HELD THAT THESE PROVISIONS ARE APPLICABLE WITH RETROSPECTIVE EFFECT FROM 01/04/2005. FURTHER, IT IS ALSO OBJECTED THAT THE APPELLANT WAS TO BE TREATED AS ASSESS EE IN DEFAULT AS PER THE PROVISIONS OF SECTION 201(1) OF THE I.T. ACT. HOWEVER, THIS CONTENTION OF THE AO IS ALSO NOT FOUND CORRECT FOR THE REASON THAT ONCE THE PAYEES HAVE PAID THE TAXES, THEN THE APPELLANT COULD NOT BE HELD TO BE TREATED AS ASSESSEE IN D EFAULT IN VIEW OF THE HON'BLE SUPREME COURT JUDGMENT IN THE CASE OT HINDUSTAN COCA - COLA BEVERAGE PVF. LTD. : (2007): 293 ITR 226 3.8. IN VIEW OF THE AFORESAID DISCUSSIONS, THE ADDITIONAL EVIDENCES SUBMITTED BY THE APPELLANT UNDER RULE 46A ARE ADMITTED AS P ER THE CLAUSE (C) & (D) AS THE REQUEST MADE BY THE APPELLANT TO THE AO IN THE ASSESSMENT PROCEEDINGS VIDE LETTER DATED 27/11/2014 FILED ON 04/12/2014 REQUESTING TO GRANT SOME TIME FOR FURNISHING THE FORM NO. 26A HAS NOT BEEN ACCEPTED DUE TO PENDING REQUEST FOR ISSUANCE OF FORM NO. 26A OF THE APPELLANT WITH THE PAYEES. THUS, THE ADDITIONAL EVIDENCES SUBMITTED BY THE APPELLANT ARE ADMITTED. RELIANCE IN THIS REGARD IS PLACED ON THE FOLLOWING JUDGMENTS: ANMOL COLOUR INDIA PVT. LTD. VS. ITO 31 SOT 18 (JP) 7217TJ 269 WHEREBY IT HAS BEEN HELD THAT THE POWERS OF THE FIRST APPELLATE AUTHORITY ARE VERY WIDE AND COTERMINOUS WITH THOSE OF THE ASSESSING OFFICER AND WHAT AO CAN DO HE CAN DO AND WHAT AO FACE TO DO THAT ALSO HE CAN DO. CIT VS. KHANPUR COOL SYNTHICATE (1964) 53 ITR 225 (SC) WHEREBY IT HAS BEEN HELD THAT SECTION 250(4) EMPOWERS THE CIT(A) TO MAKE FURTHER INQUIRIES ON ITS OWN OR TO DIRECT THE A.O. TO MAKE FURTHER INQUIRY AND TO REPORT HIM. CIT VS. K. RAVLNDRANAFHAN NAIR (2003) 131 TAXMAN 743 (KER.) WHEREBY IT HAS BEEN HELD THAT THE CIT(A) WAS NOT JUSTIFIED IN REJECTING THE ADMISSION OF CONFIRMATORY LETTERS STRAIGHT WAY ON THE PLEA THAT THE EVIDENCE WAS NOT FILED BEFORE THE A.O. THIS RATIO SQUARELY APPLIES ON THE FACTS ON THE PRESENT CASE IN AS MUCH AS HERE ALSO A.O.'S ALLEGATION WAS THAT THE EVIDENCES WERE NOT FILED BEFORE HIM WHICH IS NOT JUSTIFIED GROUND FOR REJECTION. SMT.PRABHAVATI SHAH VS. CIT (1998) 231 ITR 1 (BOM.) CIT VS. SURETECH HOSPITAL & RESEARCH CENTRE LTD. (2007) 293 ITR 53 WHEREBY IT HAS BEEN HELD THAT THE FINDING RECORDED BY THE TRIBUNAL THAT DOCUMENTS PRODUCED BY THE APPELNAT BEFORE THE CIT(A) WERE NECESSARY FOR DISPOSAL OF THE APPEAL ON MERITS IT WAS JUSTIFIED IN HOLDING THAT THE CIT(A) OUGHT TO HAVE EXERCISED ITS POWER TO ADMIT ADD ITIONAL EVIDENCES. IN THE INSTANT CASE THE CERTIFICATE OF THE 1RCTC AND THE CERTIFICATE OF THE CHARTERED ACCOUNTANT OF THE IRCTC IN FORM NO.26A IN RESPECT TO RULE 31ACB WAS NECESSARY TO BE CONSIDERED FOR DISPOSAL OF THE APPEAL ON MERITS. ACIT VS. JOGINDERS INGH ITA NO.2942/DELHI/2011 (HON'BLE DELHI ITAT) ASHOKKUMAR B. PATEL IN ITA NO.L804/AHD/2009 (HON'BLE ITAT, AHMEDABAD) HAS HELD THAT THE PURPOSE OF RULE - 46A IS TO ENSURE THAT THERE IS NO MISCARRIAGE OR JUSTICE AND THOUGH EXCEPTION PROVIDED IN RULE - 46A D ID NOT EXIST THE EVIDENCES SHOULD BE ADMITTED AFTER AFFORDING OPPORTUNITY TO THE A.O. KESHAV MILLS CO. LTD. VS. CIT (1965) 56 ITR 365 3.9. NOW, COMING ON THE MERITS OF THE CASE, IT IS FOUND THAT IN RESPECT OF THE INTEREST PAYMENT TO BAJAJ FINANCE LIMITED A T RS.2,74,292/ - AND JN RESPECT OF RELIGARE FINVEST LIMITED FOR THE INTEREST PAYMENT OF RS.15,21,001/ - , THE APPELLANT HAS SUBMITTED THE FORM NO. 26A AS PER RULE 31 ACB READ WITH FIRST PROVISO TO SECTION 201(1) AND SECOND PROVISO TO SECTION 40(A)(IA), THEREF ORE, THE DISALLOWANCE MADE BY THE AO TO THE EXTENT OF AFORESAID TWO PARTIES IS FOUND NOT CORRECT AS THESE PARTIES HAVE COMPLIED WITH THE AFORESAID PROVISIONS OF LAW AND PAID THE TAXES ON THE INTEREST RECEIPTS BY THEM FROM THE APPELLANT. THEREFORE, THE SAME CANNOT BE HELD TO ONCE AGAIN TAXED IN THE HANDS OF THE APPELLANT AND ACCORDINGLY, DISALLOWANCE OF THE SAME IS DELETED. 3.9.1. NOW WITH REGARD TO THE INTEREST PAYMENT OF RS.80,507/ - WITH REGARD TO MAGMA FINCORP LIMITED, ALTHOUGH THE LETTER SUBMITTED BY THE CA OF THE PAYEE IS NOT IN PRESCRIBED FORMAT BUT ALL THE DETAILS DESIRED IN THE ANNEXURE TO FORM NO. 26A LIKE PAN NUMBER, COPY OF ACKNOWLEDGMENT OF MAGNA FINCORP FOR A.Y. 2012 - 13 ENCLOSED I.T.A NO. 669 /AHD/20 16 A.Y. 2012 - 13 PAGE NO DCIT VS. M/S. ENDEAVOUR CAREERS PVT. LTD. 4 WHICH CONTAINED THE E - FILING ACKNOWLEDGEMENT NO., RETURNED INCOME, T AX PAYMENTS, DATE OF FILING ETC. WHICH SHOWS THE SAID PARTY HAS INCLUDED THE INTEREST INCOME IN THEIR BOOKS OF ACCOUNT AND PAID THE TAXES. THUS SUBSTANTIVELY, ALL THE DETAILS DESIRED WERE AVAILABLE IN THE LETTER AND FORM NO. 26A, THEREFORE, THE SAME IS ACC EPTED AND DISALLOWANCE OF RS.80,507/ - IN THIS REGARD IS DELETED. 3.10. THE APPELLANT DURING THE COURSE OF APPELLATE PROCEEDINGS ARGUED THAT BY THE FINANCE ACT 2013 SECOND PROVISION TO SECTION 40 A (IA) HAS BEEN INSERTED AND ACCORDING TO THAT IF THE APPELLA NT FAILED TO DEDUCT THE WHOLE/ PART OF TAX AND FOR SAID DEFAULT THE APPELLANT IS NOT DEEMED TO BE AN ASSESSEE IN DEFAULT UNDER THE 1 ST PROVISIO TO SECTION 201 (1) THEN IT SHALL BE TREATED THAT THE ASSESSES HAD DEDUCTED AND PAID THE TAX ON SUCH SUM BEFORE T HE DATE OF FURNISHING OF RETURN OF INCOME BY THE PAYEE. 3.11. IN THIS REGARD RELIANCE HAS BEEN MADE ON SOME OF THE FOLLOWING DECISIONS / JUDGMENTS AS UNDER: - ACIT VS. RAJA CHAKRAVORTY (LUCKNOW I TAT) 57 TAXMANN. COM 88 DCIT VS. ANAND MARAKALA IN I TA NO. 1584/BANG/2013 & CO NO.5/BANG/2013 DATED 13/09/2013 S. M. ANAND VS. ACIT IN ITA NO. 1831/BANG/2013 DATED 21/02/2014 G.SHANKAR IN ITA NO. 1832/BANG/2013 DATED 10/10/2014 '5.4.1.WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD, INCLUDING THE JUDICIAL DECISIONS CITED. ADMITTEDLY, THE UNDISPUTED FACT IS THAT THE ASSESSEE IN THE CASE ON HAND, HAS NOT DEDUCTED TAX AT SOURCE ON THE PAYMENTS MADE TO SHRI UDAY KUMAR SHETTY, THE FACT THAT THE PAYEE HA ACCOUNTED FOR THESE PAYMENTS IN HIS BOOKS OF ACCOUNT, FINANCIAL STATEMENTS AND THE SAME HAVE BEEN OFFERED FOR TAX IN HIS RETURN OF INCOME FOR THE PERIOD RELEVANT TO ASSESSMENT YEAR 2005 - 06, HAS NOT BEEN CONTROVERTED BY THE AUTHORITIES BELOW. I N OUR CONSIDERED OPINION, SINCE THE PAYEE / RECIPIENT I.E. SHRI UDAY KUMAR SHETTY HAS ACCOUNTED FOR THESE PAYMENT IN HIS BOOKS OF ACCOUNT, AUDITED U/S. 44AB OF THE ACT AND HAS OFFERED THE SAME FOR TAX IN HIS RETURN OF INCOME FOR THE RELEVANT PERIOD, THUS, BY VIRTUE OF AMENDMENT, BY WAY OF INSERTION OF THE SECOND PROVISO TO SECTION 40( A )(IA) OF THE ACT W.E.F. 01/04/2013, THE PROVISONS OF SECTION 40(A)(IA) OF THE ACT WOULD NOT BE ATTRACTED TO THE PAYMENTS MADE BY THE ASSESSEE TO SHRI UDAY KUMAR SHETTY AMOUNTI NG TO RS.L,53,78,795/ - . IN COMING TO THIS VIEW, WE DRAW SUPPORT FROM THE TWO ABOVE CITED DECISIONS OF THE CO - ORDIANTE BENCHES OF THIS TRIBUNAL IN THE CASE OF DCIT VS. ANAND MARAKALA (ITA NO. 1584/BANG/2012 AND CO NO.58/BANG/2013 DATED 13/09/2013) WHEREIN I T WAS HELD THAT INSERTION OF THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT SHOULD BE READ RETROSPECTIVELY FROM 901/04/2005 AND NOT PROSPECTIVELY FROM 01/04/2013. IN THIS VIEW OF THE MATTER, THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT IS NOT ATTRACT ED TO THE PAYMENTS MADE BY THE ASSESSEE TO SHRI UDAY KUMAR SHETTY AMOUNTING TO RS.1,53,78,795/ - SINCE THE OBJECT OF INTRODUCTION OF SECTION 40(A)(IA) IS ACHIEVED FOR THE REASON THAT THE PAYEE / RECIPIENT HAS ACCOUNTED FOR, DECLARED AND OFFERED FOR TAXATION THE PAYMENTS RECEIVED FROM THE ASSESSEE IN HIS HANDS. 5.4.2. EARLIER, WE HAVE HELD THAT THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT IS RETROSPECTIVE IN OPERATION W.E.F. 1/4/2005. S PER THE NEWLY INSERTED PROVISO, THE ASSESSEE IS REQUIRED TO FILE FO RM NO. 26A AS PER RULE 31ACB OF THE IT RULES, 1962 SO AS NOT TO BE HE|D AS AN ASSESSEE IN DEFAULT AS PER THE PROVISO TO SECTION 201 OF THE ACT. AS HELD IN THE DECISION OF THE CO - ORDINATE BENCH IN THE CASE OF S. M. ANAND VS. ACIT (SUPRA), SINCE THE ASSESSEE IN THE PERIOD UNDER CONSIDERATION I.E. ASSESSMENT YEAR 2005 - 06, COULD NOT HAVE CONTEMPLATED THAT SUCH A COMPLIANCE W A S TO BE MADE, WE ALSO IN THE CASE ON HAND, REMIT THE MATTER TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER IS DIRECTED TO CON SIDER THE ALLOWANCE OR OTHERWISE OF THE EXPENDITURE CLAIMED AMOUNTING TO RS.1,53,78,795/ - ON ACCOUNT OF PAYMENTS TO SHRI UDAY KUMAR SHETTY AFTER AFFORDING THE ASSESSEE ADEQUATE OPPORTUNITY TO FILE FORM NO. 26A AND VERIFICATION OF WHETHER THE SAID PAYEE HAS REFLECTED THE PAYMENT / RECEIPT IN HIS BOOKS OF ACCOUNT AND OFFERED THE SAME TO TAX IN THE PERIOD UNDER CONSIDERATION. IN THESE CIRCUMSTANCES, WE SET ASIDE THE ORDER OF THE ID. CIT(A) TO THE FILE OF THE ASSESSING OFFICER ONLY FOR THE LIMITED PURPOSE AS DI RECTED ABOVE.' CIT - I VS ANSAL LANDMARK TOWNSHIP IN ITA NO. 160/2015 & 161/2015 DATED 26/08/2015, THE HON'BLE DELHI HIGH COURT HAS ALSO ENDORSED THE SAME VIEW. THE HEAD NOTES OF THE JUDGMENT IS AS UNDER: - NO S 40(A)(IA) DISALLOWANCE FOR FAILURE TO DEDUCT IDS ON PAYMENT IF PAYEE HAS OFFERED AMOUNT TO TAX. SECOND PROVISO TO S. 40(A)(IA) INSERTED BY FINANCE ACT 2013 W.E.F. 1.4.2013 SHOULD BE TREATED AS CURATIVE AND TO HAVE RETROSPECTIVE EFFECT FROM 1.4.2005. ITAT PRAISED FOR 'THOROUGH ANALYSIS' OF THE PROVISI ON. RAJENDRAKUMAR 362 ITR 2 41 (HON'BLE DELHI HIGH COURT) CIT VS. SRI JAGANNATH STEEL CORPORATION (1991) 191 ITR 676 RAJEEV KUMAR AGARWAL IN ITA NO.337/AGRA/2013 FOR A.Y. 2006 - 07 VIDE ORDER DTD. 29.5.2014 (H'BLE ITAT AGRA) HELD THAT THE 2 - * PROVISIO N TO SECTION 40(A) (IA) WAS MADE EFFECTIVE RETROSPECTIVELY W E F 1 4 2005 BEING THE DATE FROM WHICH SUB CLAUSE (IA) OF SECTION 40 A' (IA) HAS BEEN INSERTED BY THE FINANCE ACT 2004. RELEVANT PORTION OF THE DECISION IS REPRODUCED HERE UNDER: '3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS ALSO THE APPLICABLE LEGAL POSITION. 4 LET US FIRST TAKE A LOOK AT THE LEGISLATIVE AMENDMENT OF SECTION 40(A) (I A) VIDE FINANCE ACT 2012, AND T RY T O APPRECIATE THE SCHEME OF THINGS AS EVIDENT IN THE AMENDED SECTION. SECOND PROVISO O F SECTION 40(A) (IA), INTRODUCED WITH EFFECT FROM 1ST APRIL 20ID, PROVIDES, THAT WHERE AN ASSESSEE FAILS TO DEDUCT THE WHOLE OR ANY PART OF THE TAX I N ACCORDANCE WITH THE PROVISIONS OF CHAPTER XVII - B ON ANY SUCH SUM BUT IS NOT DEEMED T O BE AN ASSESSEE IN DEFAU LT UNDER THE FIRST PROVISO TO SUB - SECTION (1) OF SECTION 201, T HEN, FOR THE PURPOSE OF THIS SUB - CLAUSE, IT SHALL BE DEEMED THAT THE ASSESSEE HAS DEDUCTED AND PAID THE TAX ON SUCH SUM ON THE DATE OF FURNISHI NG, OF RET URN OF INCOME BY THE RESIDENT PAYEE REFERRED TO IN THE SEND PROVISO'. IN OTHER WORDS, AS LONG AS THE ASSESSEE CANNOT BE TREATED AS AN ASSESSEE IN DEFAULT, THE DISALLOWANCE UNDER SEC T I O N 40(A )(I A ) CANNOT COME I NTO PLAY EITHER. TO UNDERSTAND THE EF FECT OF THIS PROVISO, IT IS USEFUL TO REFER TO FIRST PROVISO T O SECTION 201(1), WHICH IS ALOS INTRODUCED BY THE FINANCE ACT 20I2AND EFFECTIVE 1ST JULY 2012, C~3 WHICH PROVID ES THAT 'ANY PERSON , INCLUDING T HE PRINCIPAL O FFICER OF A COMPANY, WHO FAILS TO DEDUCT THE WHOLE OR ANY PART OF T HE FAX IN I.T.A NO. 669 /AHD/20 16 A.Y. 2012 - 13 PAGE NO DCIT VS. M/S. ENDEAVOUR CAREERS PVT. LTD. 5 ACCORDANCE WITH THE PROVISIONS OF THIS CHAPTER ON T HE SUM PAID TO A RESIDENT OR ON THE SUM CREDITED TO THE ACCOUNT OF A RESIDENT SHALL NOT BE DEEMED T O BE A N ASSESSEE IN DEFAULT IN RESPECT OF SUCH FAX IF SUCH RESIDENT - (I) HAS FURNISHED HIS RETURN OF INCOME UNDER SECTION 139; (II) HAS TAKEN INTO ACCOUNT SUCH SUM FOR COMPUTING INCOME IN SUCH RETUR N OF INCOME; AND (III) HAS PAID THE FAX DUE ON T HE INCOME DEC LARED BY HIM IN SUCH RETURN OF INCOME, AND T HE PERSON FURNISHES A CERTIFICATE TO T HIS EFFECT FROM AN ACCOUNTANT IN SUCH FORM AS MAY BE PRESCRIBED.' THE UNAMBIGUOUS UNDERLYING PRINCIPLE SEEMS TO BE THAT IN THE SITUATIONS IN WHICH T HE ASSESSEE'S FAX WITHHOLD ING LAPSE HAVE NOT RESULTED IN ANY LOSS T O THE EXCHEQUER, AND THIS FACT CAN BE REASONABLY DEMONSTRATED, THE ASSESSEE CANNOT BE TREATED AS AN ASSESSEE IN DEFAULT. THE NET EFFECT OF THESE AMENDMENTS IS THAT TH E DISALLOWANCE UNDER SECTION 40(A)(IA) SHALL NOT BE ATTRACTED IN T HE SITUATIONS IN WHICH EVEN IF THE ASSESSEE HAS NOT DEDUCTED FAX AT SOURCE FROM THE RELATE D PAYMENTS FOR EXPENDITURE BUT T HE RECIPIENT OF THE MONIES HAS TAKEN INT O ACCOUNT THESE RECEIPTS IN COMPUTATION OF HIS INCO ME, PAID DUE TAXES, IF ANY , ON T HE INCOME SO COM PUTED AND HAS FILED HIS INCOME T AX RETURN UNDER SECTION 139F 1). THERE IS ALSO A PROCEDURAL REQUIREMENT OF ISSUANCE OF A CERTIFICATE, IN T HE PRESCRIBED FORMAT, EVIDENCING COM PLIANCE OF THESE CONDITIONS BY T HE RECIPIEN TS OF INCOME, BUT THAT IS ESSENT IALLY A PROCEDURAL ASPECT OF THE MATTER. THE LEGISLATIVE AMENDMENT SO BROUGHT ABOUT BY T H E FINANCE ACT, 2012, SO FAR AS T HE SCHEME OF DISALLOWAN CE UNDER SECTION 40(A)(IA) IS CONCERNED, SUBSTANTIALLY MIL/GATES THE RI GOUR OF, WHAT OTHERWISE S EEMED T O BE, A RATHER HARSH DISALLOWANCE PROVISION. 5. AS FOR THE QUESTION AS TO WHETHER T HIS AMENDMENT CAN BE TREATED AS RETROSPECTIVE IN NATURE, EV EN IN T HE C ASE OF BHARTI SHIPYARD (SUPRA) - A SPECIAL BENCH DECISION VEHEMENTLY RELIED UPON IN SUPPORT OF REVENUE'S CASE, THE SPECIAL BENCH, ON PRINCIPLES, SUMMED UP THE SETTLED LEGAL POSITION TO THE EFFECT THAT 'ANY AMENDMENT OF T HE SUBSTAN TIVE PROVISION WHICH IS AIMED AT ...... (INTER ALIA) RE MOVING UNINTENDED CONSEQUENCES TO MAKE T HE PROVISIONS WORKABLE HAS T O BE TREATED AS RETROSPECTIVE NOTWITHSTANDING T HE FACT THAT THE AMENDMENT HAS BEEN GIVEN EFFECT PROSPECTIVELY'. IF WAS HELD THAT IF T HE CONSEQUENCES SOUGHT TO BE REMEDIED BY THE SUBSEQUENT AMENDMENTS WERE T O BE TREATED AS 'INTEN DED CONSEQUENCES', THE AMENDMENT COULD NOT BE TREATED AS RETROSPECTIVE IN EFFECT. THE SPECIAL BENCH THEN PROCEEDED TO DR AW A LINE OF DEMARCATION BETWEEN INTENDED CONSEQUENCES AND UNINTENDED CONSEQUENCES , AND FINALLY THE RETROSPECTIVELY OF FIRST PROVISO WAS DECIDED AGAINST THE ASSESSEE ON THE GROUND THAT THIS SPECIAL BENCH WA S OF THE CONSIDERED VIEW THAT 'THE OBJECTIVE SOUGHT TO BE ACHIEVED BY BRINGING OUT SECTION 40(A)(IA) IS THE AUGMENTATION OF TDS PROVISIONS' AND WENT ON TO ADD THAT 'IF, IN ATTAINING THIS MAIN OBJECTIVE OF AUGMENTATION OF SUCH PROVISIONS, THE ASSESSEE SUFFERS DISALIOWANCE OF ANY AMOUNT IN THE YEAR OF DEFAULT, WHICH IS OTHERWISE DEDUCTIBLE, THE LEGISLATURE ALLOWED IT TO CONTINUE'. IT WAS FURTHER OBSERVED THAT 'THIS IS THE COST WHICH PARLIAM ENT HAS AWARDED TO THOSE ASSESSEES WHO FAIL TO COMPLY WITH THE RELEVANT PROVISIONS BY CONSIDERING OVERALL OBJECTIVE OF BOOSTING TDS COMPLIANCE'(EMPHASIS BY UNDERLINING SU PPLIED BY US). IN OTHER WORDS, T HE AMENDMENT WAS HELD TO BE PROS PECTIVE BECAUSE, IN T H E WISDOM OF THE SPECIAL BENCH, T HE 2010 AMENDMENT TO SECTION 40(A)(IA) BY INSERTING FIRST PROVISO THERETO, WHICH IS WHAT T HE SPECIAL BENCH WAS DEALING WITH, WA S AN 'INTENDED CONSEQUENCE' OF THE PROVISION OF SECTION 40(A) (IA). 6. HOWEVER, THE STAND SO TAKEN BY T HE SPECIAL BENCH WAS DISAPPROVED BY HON'BLE DELHI HIGH COURT IN THE CASE OF CI T VS ROJINDER KUMAR (362 ITR 241). WHILE DOING SO, THEIR LORDSHIPS OBSERVED THAT, 'THE OBJECT OF INTRODUCTION OF SECTION 40(A)(IA) IS TO ENSURE T HAT TDS PROVISIONS ARE SCRUPULOUSLY IMPLEMENTED WIT HOUT DEFAULT IN ORDER TO AUGMENT RECOVERIES........FAILURE TO DEDUCT TDS OR DEPOSIT TDS RESULTS IN LOSS OF REVENUE AND MAY DEPRIVE THE GOVERNMENT OF THE TAX DUE AND PAYABLE' (EMPHASIS BY UNDERLINING SUPPLI ED BY US)'. HAVING NOTED T HE UNDERLYING OBJECTIVES, THEIR LORDSHIPS ALSO PUT IN A WORD OF CAUTION BY OBSERVING THAT, 'THE PROVISION SHOULD BE INTERPRETED IN A FAIR, JUST AND EQUITABLE MANNER'. THEIR LORDSHIPS THUS RECOGNIZED T HE BIGGER PICTURE OF REALIZATI ON OF LEGITIMATE FAX DUES, AS OB JECT OF SECTION 40(A)(IA), AND T HE NEED OF ( ITS FAIR, JUST AND EQUITABLE I NTERPRETATION. THIS APPROACH IS QUALITATIVELY DIFFERENT FROM PERCEIVING THE OBJECT OF SECTION 40(A)(IA) AS AWARDING OF COSTS ON T HE 'ASS ESSEES WHO FAI L TO COMPLY WITH T HE RELEVANT PROVISIONS BY CONSIDERING OVERALL OBJECTIVE OF BOOS TING TDS COMPLIANCE'. NOT ONLY T HE CONCLUSIONS ARRIVED AT BY T HE SPEC IAL BENCH WERE DISAPPROVED BUT T HE VERY FUNDAMENTAL ASSUMPTION UNDERLYING ITS APPRO ACH, I.E. ON T HE ISSUE OF THE OBJECT OF SECTION 40(A)(IA), WAS REJECTED TOO. IN ANY EVENT, EVEN GOING BY BHARTI SHIPYARD DECISION (SUPRA), WHAT WE HAVE TO REALLY EXAMINE IS WHETHER 2012 AMENDMENT, INSERTING SECOND PROVISO TO SECTION 40(A)(IA), DEALS WITH AN 'INTENDED CONSEQUENCE ' OR WITH AN 'UNINTENDED CONSEQUENCE'. 7. WHEN WE LOOK AT THE OVERALL SCHEME OF THE SECTION AS IT EXISTS NOW AND THE BIGGER PICTURE AS IF EMERGES AFTER INSERTION OF SECOND PROVISO TO SECTION 40(A)(IA) , IF IS BEYOND DOUBT THAT THE UNDER LYING OBJECTIVE OF SE CTION 40(A) (IA) WAS TO DISALLOW DEDUCTION IN RESPECT OF EXPENDITURE IN A SITUATION IN WHICH THE INCOME EMBEDDED IN RELATED PAYMENTS REMAINS UNTAXED DUE TO NON DEDUCTION OF FAX AT SOURCE BY THE ASSESSEE. IN OTHER WORDS, DEDUCIBILITY OF EXPENDITURE IS MADE CONTINGENT UPON THE INCOME, IF ANY, EMBEDDED IN SUCH EXPENDITURE BEING BROUGHT TO FAX, IF APPLICABLE. IN EFFECT, THUS, A DEDUCTION FOR EXPENDITURE IS NOT ALLOWED TO THE ASSESSEES, IN CASES WHERE ASSESSEES HAD FAX WITHHOLDING OBLIGATIONS FROM THE RELATED PA YMENTS, WITHOUT CORRESPONDING I NCOME INCLUSION BY THE RECIPIENT . THAT IS THE CLEARLY DISCERNABLE BIGGER PICTURE, AND, UNMISTAKABLY, A VERY PRAGMATIC AND FAIR POLICY APPROACH TO THE ISSUE - HOWSOEVER BELATED THE REALIZATION OF UNINTENDED AND UNDUE HARDSHIPS TO THE TAXPAYERS MAY HAVE BEEN. IF SEEMS TO PROCEED ON THE BASIS, AND RIGHTLY SO, THAT SEEKING FAX DEDUCTION AT SOURCE COMPLIANCE IS NOT AN END IN ITSELF, SO FAR AS THE SCHEME OF THIS LEGAL PROVISION IS CONCERNED, BUT IS ONLY A MEAN OF RECOVERING DUE FAXE S ON INCOME EMBEDDED IN THE PAYMENTS MADE BY THE ASSESSEE. THAT'S HOW, AS WE HAVE SEEN A SHORT WHILE AGO, HON'BLE DELHI HIGH COURT HAS VISUALIZED THE SCHEME OF THINGS - AS EVIDENT FROM THEIR LORDSHIPS' REFERENCE TO AUGMENTATION OF RECOVERIES IN THE CONTEXT OF 'LOSS OF REVENUE' AND 'DEPRIVING THE GOVERNMENT OF THE FAX DUE AND PAYABLE'. 8. WITH THE BENEFIT OF THIS GUIDANCE FROM HON'BLE DELHI HIGH COURT, IN VIEW OF LEGISLATIVE AMENDMENTS MADE FROM TIME TO TIME, WHICH THROW LIGHT ON WHAT WAS ACTUALLY SOUGHT TO BE ACHIEVED BY THIS LEGAL PROVISION, AND IN THE I.T.A NO. 669 /AHD/20 16 A.Y. 2012 - 13 PAGE NO DCIT VS. M/S. ENDEAVOUR CAREERS PVT. LTD. 6 LIGHT OF THE ABOVE ANALYSIS OF THE SCHEME OF THE LAW, WE ARE OF THE CO NSIDERED VIEW THAT SECTION 40(A)(IA) CANNOT BE SEEN AS INTENDED TO BE A PENAL PROVISION TO PUNISH THE LAPSES OF NON DEDUCTION OF FAX AT SO URCE FROM PAYMENTS FOR EXPENDITURE - PARTICULARLY WH EN THE RECIPIENTS HAVE TAKEN INT O ACCOUNT INCOME EMBEDDED IN THESE PAYMENTS, PAID DUE FAXES THEREON AND FILED INCOME TAX RETURNS IN ACCORDANCE WITH THE LAW. AS A COROLLARY TO THIS PROPOSITION, IN OUR CONSI DERED VIEW, DECLINING DEDUCTION IN RESPECT OF EXPENDITURE RELATING TO THE PAYMENTS OF THIS NATURE CANNOT BE TREATED AS AN 'INTEND ED CONSEQUENCE' OF SECTION 40(A)(IA). IF IT IS NOT AN INTENDED CONSEQUENCE I.E. IF IT IS AN UNINTENDED CONSEQUENCE, EVEN GOI NG BY BHARTI SHIPYARD DECISION (SUPRA) , 'REMOVING UNINTENDED CONSEQUENCES TO MAKE THE PROVISIONS WORKABLE HAS TO BE TREATED AS RETROSPECTIVE NOTWITHSTANDING THE FACT THAT THE AMENDMENT HAS BEEN GIVEN EFFECT PROSPECTIVELY '. REVENUE, THUS, DOES NOT DERIVE ANY A DVANTAGE FROM SPECIAL BENCH DECISION IN THE CASE BHARTI SHIPYARD (SUPRA). 9. ON A CONCEPTUAL NOTE, PRIMARY JUSTIFICATION FOR SUCH A DISALLOWANCE IS THAT SUCH A DENIAL OF DEDUCTION IS TO COMPENSATE FOR THE LOSS OF REVENUE BY CORRESPONDING INCOME NOT BEING T AKEN INTO ACCOUNT IN COMPUTATION OF TAXABLE INCOME IN THE HANDS OF THE RECIPIENTS OF THE PAYMENTS. SUCH A POLICY MOTIVATED DEDUCTION RESTRICTIONS SHOULD, THEREFORE, NOT COME INTO PLAY WHEN AN ASSESSEE IS ABLE TO ESTABLISH THAT THERE IS NO ACTUAL LOSS OF RE VENUE. THIS DISALLOWANCE DOES DEINCENTIVIZE NOT DEDUCTING TAX AT SOURCE, WHEN SUCH TAX DEDUCTIONS ARE DUE, BUT, SO FAR AS THE LEGAL FRAMEWORK IS CONCERNED, THIS PROVISION IS NOT FOR THE PURPOSE OF PENALIZING FOR THE TAX DEDUCTION AT SOURCE LAPSES. THERE AR E SEPARATE PENAL PROVISIONS TO THAT EFFECT. DEINCENTIVIZING A LAPSE AND PUNISHING A LAPSE ARE TWO DIFFERENT THINGS AND HAVE DISTINCTLY DIFFERENT, AND SOMETIMES MUTUALLY EXCLUSIVE, CONNOTATIONS. WHEN WE APPRECIATE THE OBJECT OF SCHEME OF SECTION 40(A)(IA) , AS ON THE STATUTE, AND TO EXAMINE WHETHER OR NOT, ON A 'FAIR, JUST AND EQUITABLE' INTERPRETATION OF LAW - AS IS THE GUIDANCE FROM HON'BLE DELHI HIGH COURT ON INTERPRETATION OF THIS LEGAL PROVISION, IN OUR HUMBLE UNDERSTANDING, IT COULD NOT BE AN 'INTENDED CO NSEQUENCE' TO DISALLOW THE EXPENDITURE, DUE TO NON DEDUCTION OF FAX AT SOURCE, EVEN IN A SITUATION IN WHICH CORRESPONDING INCOME IS BROUGHT TO TAX IN THE HANDS OF THE RECIPI ENT. THE SCHEME OF SECTION 40(A)( IA), AS WE SEE IT, IS AIMED AT ENSURING THAT AN EX PENDITURE SHOULD NOT BE ALLOWED AS DEDUCTION IN THE HANDS OF AN ASSESSEE IN A SITUATION IN WHICH INCOME EMBEDDED IN SUCH EXPENDITURE HAS REMAINED UNTAXED DUE TO FAX WITHHOLDING LAPSES BY THE ASSESSEE. IF IS NOT, IN OUR CONSIDERED VIEW, A PENALTY FOR FAX WI THHOLDING LAPSE BUT IT IS A SORT OF COMPENSATORY DEDUCTION RESTRICTION FOR AN INCOME GOING UNFAXED DUE TO TAX WITHHOLDING LAPSE. THE PENALTY FOR TAX WITHHOLDING LAPSE PER SE IS SEPARATELY PROVIDED FOR IN SECTION 271 C, AND, SECTION 40(A ) (IA) DOES NOT ADD TO THE SAME. THE PROVISIONS OF SECTION 40FAJ(IA) , AS THEY EXISTED PRIOR TO INSERTION OF SECOND PROVISO THERETO, WENT MUCH BEYOND THE OBVIOUS INTENTIONS OF THE LAWMAKERS AND CREATED UNDUE HARDSHIPS EVEN IN CASES IN WHICH THE ASSESSEE'S TAX WITHHOLDING LAPSE S DID NOT RESULT IN ANY LOSS TO THE EXCHEQUER. NOW THAT THE LEGISLATURE HAS BEEN COMPASSIONATE ENOUGH TO CURE THESE SHORTCOMINGS OF PROVISION, AND THUS OBVIATE THE UNINTENDED HARDSHIPS, SUCH AN AMENDMENT IN LAW, IN VIEW OF THE WELL SETTLED LEGAL POSITION T O THE EFFECT THAT A CURATIVE AMENDMENT TO AVOID UNINTENDED CONSEQUENCES IS TO BE TREATED AS RETROSPECTIVE IN NATURE EVEN THOUGH IT MAY NOT STATE SO SPECIFICALLY, THE INSERTION OF SECOND PROVISO MUST BE GIVE N RETROSPECTI VE EFFECT FROM THE POINT OF TIME WHEN THE RELATED LEGAL PROVISION WAS INTRODUCED. IN VIEW OF THESE DISCUSSIONS, AS ALSO FOR THE DETAILED REASONS SET OUT EARLIER, WE CANNOT SUBSCRIBE TO THE VIEW THAT IF COULD HAVE BEEN AN 'INTENDED CONSEQUENCE' TO PUNISH THE ASSESSEES FOR NON DEDUCTION OF FAX AT SOURCE BY DECLINING THE DEDUCTION IN RESPECT OF RELATED PAYMENTS, EVEN WHEN THE CORRESPONDING INCOME IS DULY BROUGHT TO FAX. THAT WILL BE GOING MUCH BEYOND THE OBVIOUS INTENTION OF THE SECTION. ACCORDINGLY, WE HOLD THAT THE INSERTION OF SECOND PROVISO T O SECTION 40(A)(IA) IS DECLARATORY AND CURATIVE IN NATURE AND IF HAS RETROSPECTIVE EFFECT FROM 1ST APRIL, 2005, BEING THE DATE FROM WHIC H SUB CLAUSE (IA) OF SECTION 40(A) WAS INSERTED BY THE FINANCE (NO. 2) ACT, 2004. 10 . IN VIEW OF THE ABOVE DISCUSSIONS, WE DEEM IF FIT AND PROPER TO REMIT THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION IN THE LIGHT OF OUR ABOVE OBSERVATIONS AND AFTER CARRYING OUT NECESSARY VERIFICATIONS REGARDING RELATED PAYMENTS HAVING BEEN TAKEN INT O ACCOUNT BY THE RECIPIENTS IN COMPUTATION OF THEIR INCOME, REGARDING PAYMENT OF FAXES IN RESPECT OF SUCH INCOME AND REGARDIN G FILING OF THE RELATED INCOME T AX RETURNS BY THE RECIPIENTS. WHILE GIVING EFFECT TO THESE DIRECTIONS, THE ASSESSING OFFICER SHALL GIVE DUE AND FAI R OPPORTUNITY OF HEARING TO THE ASSESSEE, DECIDE THE MATTER IN ACCORDANCE WITH THE LAW AND BY WAY OF A SPEAKING ORDER. WE ORDER SO.' 3.12. I N THIS REGARD IT WAS SUBMITTED B Y THE APPELLANT THAT THE PAYEE HAD COMPLIED WITH ALL THE CONDITIONS TO FIRST PROVISO TO SECTION 201 (1) OF I.T. ACT AND THEREFORE AS PER THE NEWLY INSERTED SECOND PROVISO TO SECTION 40 A (IA) NO DISALLOWANCE IS WARRANTED WITH REGARD TO COMPLIANCE OF THE CONDITION OF 1 ST PROVISO TO SECTION 201 (1). IN SUPPORT IT HAS SUB MITTED THE FORM NO. 26A ISSUED BY THE CHARTED ACCOUNTANT CERTIFYING THAT THE RECIPIENTS HAD FURNISHED ITS RETURN OF INCOME INCLUDING THE INCOME ON INTEREST RECEIPTS FROM APPELLANT AND TAXES DUE THEREUPON HAVE BEEN PAID. THUS AS PER THE RULE 31ACB OF I. T. RULES, THE FORM NO 26A HAVE BEEN OBTAINED AND SUBMITTED AS PER THE REQUIREMENT OF 1 ST PROVISO TO SECTION 201 (1) OF I.T. ACT AND IN TURN THE SAME SATISFIES THE REQUIREMENT OF 2 ND PROVISO TO SECTION 40 A (IA) OF I.T. ACT. 3.13. THE APPELLANT FURTHER ARGUED THAT AS PER THE JUD GMENT OF H'BLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES (P) LTD. SINCE THE TAXES ON THE INTEREST INCOME IN THEIR RETURNS OF INCOME HAVE ALREADY BEEN PAID BY THE RECIPIENT AND NOW ONCE AGAIN THE TAXES ON THE SAME CANNOT BE RECOVERED FROM T HE APPELLANT BY TREATING THE APPELLANT IN DEFAULT FOR NON - DEDUCTION OF IDS. SIMILAR VIEWS HAVE BEEN ENDORSED BY H'BLE DELHI ITAT IN THE CASE OF UE TRADE CORPORATION (INDIA) LTD. CIT (ITA N0.2303/DEL/2011). 3.14. IN VIEW OF THE AFORESAID DISCUSSION AND JUDG MENTS / DECISIONS OF VARIOUS COURTS, THE RECIPIENT COMPANIES HAS ALREADY INCLUDED THE INTEREST RECEIPTS IN ITS BOOKS OF ACCOUNTS AND THE INCOME THEREUPON HAS ALREADY BEEN OFFERED TO TAX AS PER THE FORM NO. 26A IN VIEW OF RULE 31ACB, HENCE, THERE IS COMPLIA NCE TO THE SECOND PROVISO TO SECTION 40(A)(IA) R.W. FIRST PROVISO TO SECTION 201(1) OF THE I. T. ACT, 1961 AND THUS, NO DISALLOWANCE U/S. 40(A)(IA) IS WARRANTED IN RESPECT OF THE AFORESAID THREE PARTIES. THUS, THE DISALLOWANCE IN RESPECT OF THOSE THREE PAR TIES MADE BY THE AO IS DELETED. I.T.A NO. 669 /AHD/20 16 A.Y. 2012 - 13 PAGE NO DCIT VS. M/S. ENDEAVOUR CAREERS PVT. LTD. 7 3.15. NOW COMING TO THE ONE PARTY NAMELY; KOTAK MAHINDRA PRIME, A LETTER OF VIDE PRESIDENT, ACCOUNTS STATING THAT THE INTEREST OF RS.3,75,9707 - HAS BEEN BOOKED AS INTEREST IN THE BOOKS OF ACCOUNTS IS SUBMITTED AND THIS LETTER ALSO CONTAINS THE PAN NO., AO I.E. DCIT, CIRCLE - 3(2), AAYAKAR BHAVAN, MUMBAI, E - FILING ACKNOWLEDGEMENT NO., DATE OF FILING ETC. BUT THE SAME IS NOT ACCEPTED FOR THE REASON THAT AS PER RULE 31ACB, THE CERTIFICATE HAS NOT BEEN GIVEN BY THE CHARTERED ACCOU NTANT, BUT THE VICE PRESIDENT, ACCOUNTS AND HENCE THE RULES HAVE NOT BEEN FOLLOWED. IT IS ALSO WORTH HERE TO MENTION THAT THE INTEREST PAYMENT BY THE APPELLANT T O THIS PARTY WAS AT RS.3,94,795/ - WHILE THE LETTER FROM KOTAK MAHINDRA PRIME WAS SHOWING THE IN TEREST AT RS.3,75,970/ - , THUS, THE INTEREST RECEIPTS SHOWN BY THE PAYEE ARE LESS THAN THE INTEREST PAYMENT SHOWN BY THE APPELLANT. THEREFORE, THE DISALLOWANCE OF THE CLAIM OF INTEREST AT RS.3,94,795/ - AS DEBITED IN P & L ACCOUNT IN THIS REGARD IS CONF IRMED. THE GROUND OF APPEAL IS PARTLY ALLOWED. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE HAS MADE INTEREST PAYMENT TO THE FOLLOWING PARTIES DURING THE YEAR UNDER CONSIDERATION. SR. NO. NAM E OF PAYEE TOTAL INTEREST (RS.) TDS LIABILITY U/S. 194 - A (RS.) 1 BAJAJ FINANCE LTD. 2,74,292/ - 27,429/ - 2 RELIGARE FINVEST LTD. 15,21,001/ - 1,52,100/ - 3 KOTAK MAHINDRA PRIME LTD. 3,94,795/ - 39,479/ - 4 MAGMA FINE CORP. LTD. 80,507/ - 8 ,050/ - TOTAL 22,70,595/ - 2,27,058/ - THE AO HAS DISALLOW ED THE CLAIM OF ASSESSEE OF INTEREST PAYMENT TO THE AMOUNT OF RS.24,75,437/ - ON THE GROUND OF NOT DEDUCTING TDS AS PER THE PROVISIONS OF SECTION 40(A) (IA) OF THE A CT . THE LD. CIT(A) HAS ALL OWED THE CLAIM OF THE ASSESSEE BY STATING THAT IT IS DEMONSTRATED IN FORM NO. 26A ALONG WITH ANNEXURE IN RESPECT OF THE AFORESAID PAYEES THAT THE INTEREST INCOME HAS BEEN OFFERED BY THEM FOR TAXATION IN THEIR RETURN OF INCOME ACCORDING TO THE FIRST PRO VISO TO SECTION 201 R.W. SECOND PROVISO TO SECTION 40(A)(IA) HELD TO BE APPLICABLE WITH RETROSPECTIVE EFFECT FROM 01/04/2005 BY THE VARIOUS COURTS. BEFORE THE LD. CIT(A) , T HE A SSESSEE FILED ADDITIONAL EVIDENCES UNDER RULE 46A OF I. T. RUL ES ON THE REASONING THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAS REQUESTED THE ASSESSING OFFICER TO GRANT SOME TIME TO COLLECT I.T.A NO. 669 /AHD/20 16 A.Y. 2012 - 13 PAGE NO DCIT VS. M/S. ENDEAVOUR CAREERS PVT. LTD. 8 INFORMATION I.E. 26A ETC. FROM THE PAYEES, HOWEVER, THE ASSESSING OFFICER HAS NOT ACCEPTED THE REQUEST OF THE ASSESSEE AND COMPLETED THE ASSESSMENT ON 04/12/2014. AFTER EXAMINATION OF THESE EVIDENCES THE LD. CIT(A) STATED THAT THE RECIPIENT HAS PAID THE TAXES , THE REFORE, THE SAME AMOUNT CANNOT BE TAXED AGAIN. DURING THE COURSE OF REMAND PROCEEDINGS A SSESSING OFFICER FAILED TO CONTROVERT THE ADDITIONAL EVIDENCES SUBMITTED BY THE A SSESSEE . THE LD.CIT(A) HAS ALSO STATED THAT INTEREST HAS ALSO BEEN PAID BY THE A SSESSEE AS PER THE PROVISIONS OF OF SECTION 201(IA) OF THE ACT. THE LD. CIT(A) HAS ALSO ELA BORATED THE VARIOUS DECISIONS / JUDGMENTS OF THE HON'BLE COURTS IN AFFIRMATIONS OF APPLICABILITY OF THE AFORESAID PROVISIONS WITH RETROSPECTIVE EFFECT FROM 01/04/2005. WE HAVE ALSO CONSIDERED THE FINDINGS OF THE COORDINATE BENCH OF ITAT AHMEDABAD IN THE CASE OF SH. RAMKRUPA KEDICARE VIDE ITA NO.2189/AHD/2011 DATED 14/7/2016 ON THE IDENTICAL ISSUE REPRODUCED AS UNDER: - 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THROUGH THIS GROUND ASSESSEE HAS C HALLENGED THE ACTION OF LD. CIT(A) IN CONFIRMING THE DISALLOWANCE OF RS.53,41,049/ - U/S 40(A)(IA) OF THE ACT TOWARDS PAYMENT OF LABORATORY. WE OBSERVE THAT DURING THE COURSE OF HEARING LD. AR HAS SUBMITTED THAT WITHOUT GOING INTO APPLICABILITY OF SECTION 1 94J OF THE ACT FOR THE PAYMENT KINDLY REFER TO THE SECOND PROVISO IN SECTION 40(A)(IA) OF THE ACT INSERTED W.E.F. 1.4.2013 AS PER WHICH DISALLOWANCE CANNOT BE MADE IN CASE THE ASSESSEE PROVES THAT THE RECIPIENT OF THE SUM HAS INCLUDED THE INCOME IN HIS RE TURN OF INCOME AND HAS PAID DUE TAXES. WE FURTHER OBSERVE THAT IN THE CASE OF ANSAL LAND MARK TOWNSHIP (P) LTD. VS. CIT IN ITA NO.160/2015 SIMILAR ISSUE CAME UP BEFORE HON. DELHI HIGH COURT WHEREIN RELIANCE WAS PLACED BY THE RESPONDENT ON THE DECISION OF T HE CO - ORDINATE BENCH, AGRA IN THE CASE OF RAJEEV KUMAR AGARWAL VS. ADDL. CIT IN ITA NO.337/AGRA/2013 WHEREIN IT WAS HELD THAT THE SECOND PROVISO TO SECTION 40(A)(IA) IS DECLARATORY AND CURATIVE IN NATURE AND IT HAS RETROSPECTIVE EFFECT FROM 01.04.2005. HON. DELHI HIGH COURT ADOPTED THE DECISION OF THE TRIBUNAL, AGRA BENCH IN THE CASE OF RAJEEV KUMAR AGARWAL VS. ADDL. CIT (SUPRA) AND DISMISSED THE APPEAL OF THE REVENUE BY OBSERVING AS UNDER : - 13. TURNING TO THE DECISION OF THE AGRA BENCH OF ITAT IN RAJIV KUMAR AGARWAL V. ACIT (SUPRA ) , THE COURT FINDS THAT IT HAS UNDERTAKEN A THOROUGH ANALYSIS OF THE SECOND PROVISO TO SECTION 40 (A)(IA) OF THE ACT AND ALSO SOUGHT TO EXPLAIN THE RATIONALE BEHIND ITS INSERT ION. IN PARTICULAR, THE COURT WOULD LIKE TO REFER TO PARA 9 OF THE SAID ORDER WHICH READS AS UNDER: ON A CONCEPTUAL NOTE, PRIMARY JUSTIFICATION FOR SUCH A DISALLOWANCE IS THAT SUCH A DENIAL OF DEDUCTION IS TO COMPENSATE FOR THE LOSS OF REVENUE BY CORRES PONDING INCOME NOT BEING TAKEN INTO ACCOUNT IN COMPUTATION OF TAXABLE INCOME IN THE HANDS OF THE RECIPIENTS OF THE PAYMENTS. SUCH A POLICY MOTIVATED DEDUCTION RESTRICTIONS SHOULD, THEREFORE, NOT COME INTO PLAY WHEN AN ASSESSEE IS ABLE TO ESTABLISH THAT THE RE IS NO ACTUAL LOSS OF REVENUE. THIS DISALLOWANCE DOES DEINCENTIVIZE NOT DEDUCTING TAX AT SOURCE, WHEN SUCH TAX DEDUCTIONS I.T.A NO. 669 /AHD/20 16 A.Y. 2012 - 13 PAGE NO DCIT VS. M/S. ENDEAVOUR CAREERS PVT. LTD. 9 ARE DUE, BUT, SO FAR AS THE LEGAL FRAMEWORK IS CONCERNED, THIS PROVISION IS NOT FOR THE PURPOSE OF PENALIZING FOR THE TAX DEDUCTION AT SOURCE LAPSES. THERE ARE SEPARATE PENAL PROVISIONS TO THAT EFFECT. DEINCENTIVIZING A LAPSE AND PUNISHING A LAPSE ARE TWO DIFFERENT THINGS AND HAVE DISTINCTLY DIFFERENT, AND SOMETIMES MUTUALLY EXCLUSIVE, CONNOTATIONS. WHEN WE APPRECIATE THE OBJECT OF SCH EME OF SECTION 40(A)(IA), AS ON THE STATUTE, AND TO EXAMINE WHETHER OR NOT, ON A 'FAIR, JUST AND EQUITABLE' INTERPRETATION OF LAW - AS IS THE GUIDANCE FROM HON'BLE DELHI HIGH COURT ON INTERPRETATION OF THIS LEGAL PROVISION, IN OUR HUMBLE UNDERSTANDING, IT C OULD NOT BE AN 'INTENDED CONSEQUENCE' TO DISALLOW THE EXPENDITURE, DUE TO NON DEDUCTION OF TAX AT SOURCE, EVEN IN A SITUATION IN WHICH CORRESPONDING INCOME IS BROUGHT TO TAX IN THE HANDS OF THE RECIPIENT. THE SCHEME OF SECTION 40(A)(IA), AS WE SEE IT, IS A IMED AT ENSURING THAT AN EXPENDITURE SHOULD NOT BE ALLOWED AS DEDUCTION IN THE HANDS OF AN ASSESSEE IN A SITUATION IN WHICH INCOME EMBEDDED IN SUCH EXPENDITURE HAS REMAINED UNTAXED DUE TO TAX WITHHOLDING LAPSES BY THE ASSESSEE. IT IS NOT, IN OUR CONSIDERED VIEW, A PENALTY FOR TAX WITHHOLDING LAPSE BUT IT IS A SORT OF COMPENSATORY DEDUCTION RESTRICTION FOR AN INCOME GOING UNTAXED DUE TO TAX WITHHOLDING LAPSE. THE PENALTY FOR TAX WITHHOLDING LAPSE PER SE IS SEPARATELY PROVIDED FOR IN SECTION 271 C, AND, SECTI ON 40(A)(IA) DOES NOT ADD TO THE SAME. THE PROVISIONS OF SECTION 40(A)(IA), AS THEY EXISTED PRIOR TO INSERTION OF SECOND PROVISO THERETO, WENT MUCH BEYOND THE OBVIOUS INTENTIONS OF THE LAWMAKERS AND CREATED UNDUE HARDSHIPS EVEN IN CASES IN WHICH THE ASSESS EE'S TAX WITHHOLDING LAPSES DID NOT RESULT IN ANY LOSS TO THE EXCHEQUER. NOW THAT THE LEGISLATURE HAS BEEN COMPASSIONATE ENOUGH TO CURE THESE SHORTCOMINGS OF PROVISION, AND THUS OBVIATE THE UNINTENDED HARDSHIPS, SUCH AN AMENDMENT IN LAW, IN VIEW OF THE WEL L SETTLED LEGAL POSITION TO THE EFFECT THAT A CURATIVE AMENDMENT TO AVOID UNINTENDED CONSEQUENCES IS TO BE TREATED AS RETROSPECTIVE IN NATURE EVEN THOUGH IT MAY NOT STATE SO SPECIFICALLY, THE INSERTION OF SECOND PROVISO MUST BE GIVEN RETROSPECTIVE EFFECT F ROM THE POINT OF TIME WHEN THE RELATED LEGAL PROVISION WAS INTRODUCED. IN VIEW OF THESE DISCUSSIONS, AS ALSO FOR THE DETAILED REASONS SET OUT EARLIER, WE CANNOT SUBSCRIBE TO THE VIEW THAT IT COULD HAVE BEEN AN 'INTENDED CONSEQUENCE' TO PUNISH THE ASSESSEES FOR NON DEDUCTION OF TAX AT SOURCE BY DECLINING THE DEDUCTION IN RESPECT OF RELATED PAYMENTS, EVEN WHEN THE CORRESPONDING INCOME IS DULY BROUGHT TO TAX. THAT WILL BE GOING MUCH BEYOND THE OBVIOUS INTENTION OF THE SECTION. ACCORDINGLY, WE HOLD THAT THE INS ERTION OF SECOND PROVISO TO SECTION 40(A)(IA) IS DECLARATORY AND CURATIVE IN NATURE AND IT HAS RETROSPECTIVE EFFECT FROM 1ST APRIL, 2005, BEING THE DATE FROM WHICH SUB CLAUSE (IA) OF SECTION 40(A) WAS INSERTED BY THE FINANCE (NO. 2) ACT, 2004. 14. THE C OURT IS OF THE VIEW THAT THE ABOVE REASONING OF THE AGRA BENCH OF ITAT AS REGARDS THE RATIONALE BEHIND THE INSERTION OF THE SECOND PROVISO TO SECTION 40(A) (IA) OF THE ACT AND ITS CONCLUSION THAT THE SAID PROVISO IS DECLARATORY AND CURATIVE AND HAS RETROSP ECTIVE EFFECT FROM 1ST APRIL 2005, MERITS ACCEPTANCE. 15. IN THAT VIEW OF THE MATTER, THE COURT IS UNABLE TO FIND ANY LEGAL INFIRMITY IN THE IMPUGNED ORDER OF THE ITAT IN ADOPTING THE RATIO OF THE DECISION OF THE AGRA BENCH, ITAT IN (RAJIV KUMAR AGARWAL V. ACIT). 16. NO SUBSTANTIAL QUESTION OF LAW ARISES IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. THE APPEAL IS DISMISSED. 14. RESPECTFULLY FOLLOWING THE JUDGMENT OF HON. DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LANDMARK TOWNSHIP (P) LTD. (S UPRA) AND THE DECISION OF THE CO - ORDINATE BENCH, AGRA, IN THE CASE OF RAJEEV KUMAR AGARWAL VS. ADDL. CIT (SUPRA), WE RESTORE THIS ISSUE TO THE FILE OF ASSESSING OFFICER WITH THE DIRECTION THAT ASSESSEE SHALL PROVIDE BEFORE HIM ALL THE DETAILS WITH REGARD T O THE RECIPIENTS OF THE INCOME OF HAVING RECEIVED RS.53,41,049/ - AND TAXES PAID BY THEM. WE FURTHER DIRECT THE ASSESSING OFFICER TO CARRYOUT NECESSARY VERIFICATION IN RESPECT OF THE PAYMENTS AND TAXES OF SUCH INCOME AND ALSO FILING OF I.T.A NO. 669 /AHD/20 16 A.Y. 2012 - 13 PAGE NO DCIT VS. M/S. ENDEAVOUR CAREERS PVT. LTD. 10 INCOME - TAX RETURN BY THE RECIPIENTS. NEEDLESS TO MENTION THAT ADEQUATE OPPORTUNITY WILL BE PROVIDED TO THE ASSESSEE FOR FILING NECESSARY DETAILS TO SHOW THAT THE SAID RECIPIENTS HAVE REFLECTED THE RECEIPTS IN THEIR BOOKS OF ACCOUNT AND OFFERED THE SAME TO TAX IN THE PERIOD UND ER CONSIDERATION. IN CASE THE ASSESSING OFFICER FINDS THAT THE RECIPIENTS HAVE DULY PAID THE TAXES ON THE INCOME, THE ADDITION MADE BY THE ASSESSING OFFICER SHALL STAND DELETED. THIS GROUND OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. FOLLOWING THE D ECISION OF THE COORDINATE BENCH AS SUPRA , WE RESTORE THIS ISSUE FOR TO THE FILE OF THE ASSESSING OFFICER TO CARRYOUT NECESSARY VERIFICATION IN RESPECT OF THE PAYMENTS OF TAXES OF SUCH INCOME AND ALSO FILING OF INCOME TAX RETURN BY THE RECIPIENTS AND DECID E THE ISSUE AS PER THE DIRECTION ISSUED BY THE COORDINATE BENCH AS SUPRA AFTER AFFORDING PROPER OPPORTUNITIES TO THE ASSESSEE. ACCORDINGLY THIS GROUND OF APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. DISALLOWANCE U/S. 14A R.W. RULE 8D TO R S. 3950/ - 7 . THE ASSESSING OFFICER HAS NOTICED THAT ASSESSEE HAS EARNED DEEMED INCOME OF RS. 3 , 950/ - CLAIMED AS EXEMPT U/S. 10(34) /10(35) OF THE ACT. ON SCRUTINY ASSESSING OFFICER APPLIED THE PROVISION OF SECTION 14A R.W. RULE 8D AND DISALLOWED THE AMOUN T OF RS . 77,494/ AS EXPENSES INCURRED TOWARDS EARNING EXEMPT INCOME. 8 . AGGRIEVED ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) RESTRICTED THE ADDITION TO THE EXTENT OF EXEMPT OF INCOME OF RS . 3 , 950/ - BY PLACING RELIANCE ON T H E DECISION S OF C O - ORDINATE BENCH OF ITAT AND OTHER ITAT S IN THE FOLLOWING CASES: - (I) M/S. SHREE LAXMI BIDI TRADING CO. VS. DCIT [CO NO.315&316/AHD/2014 DT. 30/03/2015] (II) JIVRAJ TEA LIMITED VS. DCIT CIRCLE - 1, SURAT [ITA NO. 866/AHD/2012 DATED 28/08/201 4 (AHMED ABAD TRIBUNAL) (III) MADHUSUDAN INDUSTRIES LTD. VS. ITO [ITA NO. 1715/AHD/2011 DATED 13/02/2015 (AHMEDABAD TRIBUNAL) 9. CONSIDERING THAT THE ASSESSEE WAS HAVING INTEREST FREE FUNDS AND THE DECISION S OF THE COORDINATE BENCHES OF ITAT AHEMDABAD AS SUPRA WE ARE I.T.A NO. 669 /AHD/20 16 A.Y. 2012 - 13 PAGE NO DCIT VS. M/S. ENDEAVOUR CAREERS PVT. LTD. 11 INCLINED WITH THE DECISION OF LD.CIT(A) THAT DISALLOWANCE OF EXPENDITURE U/S 14A CANNOT EXCEED THE EXEMPT INCOME . A CCORDINGLY THE APPEAL OF THE REVENUE IS DISMISSED. DISALLOWANCE OF RS . 23 , 39 ,931/ - U/S. 36(1 )(III) OF THE ACT 10. THE ASSESSING O FFICER HAS NOTICED THAT CLOSING BALANCE OF LONG TERM LOANS AS ON 31/03/2012 WAS RS.2,32,98,227 AS AGAINST THE OPENING BALANCE OF RS 1,57,00,627/ AS ON 1/04/2011 . / THE ASSESSING OFFICER HAS FURTHER NOTICED THAT THE ASSESS HAS GIVEN INTEREST FREE ADVANCES TO BON TEMP PRIVATE LTD. AND ONE DREAM EDUVENTURES PRIVATE LIMITED AMOUNTING TO RS.2,22,58,627/ AND RS.10,39,600/ - RESPECTIVELY. THE ASSESSING OFFICER HAS ASKED WHY INTEREST SHOULD NOT BE CHARGED ON SUCH LOANS AND ADVANCES U/S 36 (1) (III) OF THE ACT. THE ASSESSE E EXPLAINED THAT IT IS HAVING SHAREHOLDING OF 96.5% IN THOSE COMPANIES AND THEY WERE ENGAGED IN THE BUSINESS OF INSTITUTIONAL CATERING, RESTAURANT AND CANTEEN SERVICES. THEREFORE THE ADVANCES MADE BY THE ASSESEEE WERE TOWARDS THE COMMERCIAL EXPEDIENCY OF T HE SUBSIDIARY COMPANY. THE ASSESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE AND STATED THAT ON ONE HAND THE ASSESSEE COMPANY HAS CLAIMED INTEREST EXPENSES OF RS.28,98,527/ AND ON THE OTHER HAND IT HAD GRANTED INTEREST FREE LOAN AND ADVANC ES TO THE SUBSIDIARY COMPANY. THE ASSESSING OFFICER NOTICED THAT OPENING BALANCE OF INTEREST FREE LOAN AND ADVANCES WAS RS. 1,57,00627/ - ON WHICH IT HAS CHARGED INTEREST @12 % U/S 36(1)(III) WHICH COMES TO RS.18,84,075/. THE ASSESSING OFFICER HAS FURTHER S TATED THAT THE ASSESSEE HAS NOT GIVEN ANY LEDGER AND DATE WISE DETAIL OF LOAN OF RS.75,97600/ - PROVIDED DURING THE YEAR. THEREFORE THE ASSESSING OFFICER HAS CONSIDERED HALF OF THESE LOANS AND ADVANCES FOR CALCULATING INTEREST @ 12% FOR I.T.A NO. 669 /AHD/20 16 A.Y. 2012 - 13 PAGE NO DCIT VS. M/S. ENDEAVOUR CAREERS PVT. LTD. 12 DISALLOWANCE U/S 36( 1)(III).THEREFORE INTEREST @12% ON HALF OF THIS AMOUNT OF RS.37,98,800/ WORKED OUT TO BE RS.4,55,856/ OF THE ACT. T HE ASSESSING OFFICER HAS MADE DISALLOWANCE OF INTEREST PAYMENT OF RS. 23,39,931/ - (1884075/+455856) U/S. 36(1 )(III) OF THE ACT ON THE ADVANCES MADE BY THE ASSES SEEE TO ITS SUBSIDIARY COMPANY . 11 . AGGRIEVE D ASSESSEE FILED APPEAL BEFORE T H E LD. CIT(A) . THE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE BY OBSERVING AS UNDER: - 6.5. IT IS APPARENT THAT THE APPELLANT HAD GRANTED THE INTER EST FREE ADVANCES TO THE AFORESAID TWO PARTIES. ONE PARTY NAMELY; BON TEMP PVT. LTD. IS A SUBSIDIARY COMPANY IN WHICH THE APPELLANT HAD THE SHARE HOLDING OF 96.5%, WHILE THE OTHER PARTY NAMELY; ONE DREAM EDUVENTURE PVT. LTD. WAS THE SISTER CONCERN OF APPEL LANT. THE BON TEMP PVT. LTD. WAS OTHERWISE ALSO RELATED TO THE BUSINESS OF THE APPELLANT IN THE FORM OF PROVIDING THE CATERING, CANTEEN AND RESTAURANT SERVICES. THUS, THERE WERE BUSINESS CONNECTIONS OF THE APPELLANT WITH THE SAID PARTY. FURTHER, IT HAS BEE N NOTICED FROM THE BANK STATEMENT THAT THE IMMEDIATE SOURCE OF THE LENDINGS TO BOTH THE CONCERNS WERE EITHER THE FEE RECEIPTS FROM STUDENTS BY THE APPELLANT OR INTEREST FREE BORROWINGS FROM THE SISTER CONCERNS. THUS, IT HAS BEEN NOTICED THAT THE LENDINGS T O BOTH THE GROUP CONCERNS WERE MADE OUT OF THE INTEREST FREE FUNDS AVAILABLE WITH IT. THUS, THE INTEREST FREE FUNDS OWNED BY THE APPELLANT WERE MUCH MORE THAN THE INTEREST FREE ADVANCES GRANTED TO THE AFORESAID THREE PARTIES. THUS., NO INTEREST BEARING FUN DS HAVE BEEN UTILISED FOR THE PURPOSE OF ADVANCES TO THE AFORESAID TWO PARTIES. EVEN OTHER - WISE ALSO THE ADVANCES GIVEN TO THE AFORESAID PARTIES WERE FOR THE BUSINESS PURPOSES NOT FOR ANY OTHER PURPOSES AND THESE WERE ON ACCOUNT OF COMMERCIAL EXPEDIENCY. N OTHING HAS BEEN BROUGHT ON RECORD TO DEMONSTRATE THAT THE INTEREST BEARING FUNDS WERE SPECIFICALLY GRANTED AS INTEREST FREE LENDINGS TO ANY OF THE GROUP CONCERNS. THE ONUS WAS UPON THE AO TO PROVE THE NEXUS OF THE INTEREST BEARING FUNDS WITH THE INTEREST F REE LENDINGS WHICH HAS NOT BEEN DISCHARGED. 6.6. CONSIDERING THE FACTS AND SUBMISSIONS, THE DISALLOWANCE MADE BY THE A O TOWARDS THE INTEREST U/S. 36(1 )(III) IS NOT CORRECT, AND THEREFORE, THE SAME IS DELETED. RELIANCE IS PLACED ON THE FOLLOWING DECISIONS / JUDGMENTS: - (I) HERO CYCLES PVT. LTD. VS.CIT [2015] 379 ITR 34 (SC) BUSINESS EXPENDITURE - INTEREST ON BORROWED CAPITAL - LOANS GIVEN TO DIRECTORS - ASSESSEE HAVING CREDIT BALANCE IN BANK ACCOUNT AT TIME OF ADVANCES - INTEREST PAID ON BORROWINGS NOT T O BE DISALLOWED - INCOME TAX ACT, 1961, S. 36(1)(III). ADVANCE WAS OUT OF BUSINESS EXPEDIENCY - INTEREST PAID ON BORROWINGS NOT TO BE DISALLOWED - INCOME TAX ACT, S. 36(1)(III). (II) CIT VS. TORRENT LEASING & FINANCE PVT. LTD. IN TAX APPEAL NO. 620 TO 625 OF 2006 DATED 17/12/2014, WHEREBY THE HON'BLE GUJARAT HIGH COURT HAS HELD THAT WHEN THE INTEREST FREE FUNDS WERE AVAILABLE WITH THE APPELLANT THEN DISALLOWANCE OF INTEREST U/S. 36(1) (III) OF THE ACT WAS UNWARRANTED. (III) CIT VS. RELIANCE UTILITIE S [ITA APPEAL NO. 1398 OF 2008] HON'BLE BOMBAY HIGH COURT WHERE AN ASSESSEE HAS HIS OWN FUNDS AS WELL AS BORROWED FUNDS A PRESUMPTION CAN BE MADE THAT THE ADVANCES FOR NON BUSINESS PURPOSES HAVE BEEN MADE OUT OF THE OWN FUNDS AND THAT THE BORROWED FUNDS HA VE NOT BEEN FOR THIS PURPOSE. ACCORDINGLY, DISALLOWANCE OF THE INTEREST IN THE BORROWED FUNDS IS NOT JUSTIFIED. IV) S. A. BUILDERS LTD. VS. CIT (APPEALS) & ANR 288 ITR WHEREIN IT HAS BEEN HELD AS UNDER: - 'INTEREST ON BORROWED FUNDS CANNOT BE DISAL LOWED IF THE ASSESSEE HAS ADVANCED INTEREST FREE LOAN TO A SISTER CONCERN AS A MEASURE OF COMMERCIAL EXPEDIENCY; WHAT IS TO BE SEEN IS 'BUSINESS PURPOSE' AND WHAT THE SISTER CONCERN DID WITH THE MONEY ADVANCED. (V) CIT VS. RAGHUVEER SYNTHETICS LTD. [(2013) 354 ITR 222]. THE HON'BLE GUJARAT HIGH COURT HAS HELD AS UNDER: - 'AS CAN BE NOTED FROM THE ORDER OF THE TRIBUNAL, THE ASSESSING OFFICER DISALLOWED THE INTEREST SOLELY ON THE GROUND THAT THE ASSESSEE HAD GIVEN INTEREST FREE LOANS TO THE ASSOCIATE CO NCERNS, VIZ., R.R.FAMILY TRUST AND SAGAR TEXTILE MILLS AND THIS DISALLOWANCE, IN APPEAL THE CIT (APPEALS) DELETED BY HOLDING THAT THE AMOUNT ADVANCED TO BOTH R.R.FAMILY TRUST AND SAGAR TEXTILES MILS WERE NOT GIVEN DURING THE YEAR UNDER CONSIDERATION, BUT T HE SAME WAS GIVEN IN THE EARLIER YEARS. CIT (APPEALS] HAD ALSO TAKEN NOTE OF THE FACT THAT THERE WAS SUFFICIENT FUNDS AVAILABLE WITH THE ASSESSEE - RESPONDENT ON WHICH THERE WAS NO INTEREST LIABILITY THAT HAD BEEN INCURRED. IN SUCH CIRCUMSTANCES, RELYING ON THE CASE OF TORRENT FINANCIERS LTD. (SUPRA), IF FOUND THAT THE DISALLOWANCE WAS NOT JUSTIFIABLE. THE TRIBUNAL ON NOTING THESE DETAILS, IN TERMS HELD THAT THERE WAS NOTHING CONTRARY THAT COULD BE BROUGHT ON RECORD BY THE DEPARTMENT. THE ASSESSEE'S EQUITY SH ARE CAPITAL RS.3.85 CORES AND RESERVE AND SURPLUS OF I.T.A NO. 669 /AHD/20 16 A.Y. 2012 - 13 PAGE NO DCIT VS. M/S. ENDEAVOUR CAREERS PVT. LTD. 13 RS.5.52 CRORES ALSO WERE NOTED BY THE TRIBUNAL. IT FOUND THAT THE INTEREST FREE FUND AVAILABLE WITH THE ASSESSEE WAS FAR GREATER THAN THE LOAN ADVANCED TO THE SISTER CONCERNS AND AS A COROLLARY TO THAT, IF CONCLUDED THAT THE BORROWED MONEY WAS NOT UTILIZED FOR THE PURPOSE OF ADVANCE TO THE SISTER CONCERNS, AS HAD BEEN NOTED BY THE ASSESSING OFFICER. WHAT HAD WEIGHED WITH THE TRIBUNAL IS THE FACT THAT THE ENTIRE INTEREST FREE FUNDS INCLUDED OWNER'S OWN CAP ITAL AND ACCUMULATED PROFITS AND OTHER INTEREST FREE CREDITS AND LOANS AND IF THE TOTAL INTEREST FREE ADVANCES INCLUDING THE DEBIT BALANCE OF THE PARTNERS DID NOT EXCEED THE TOTAL INTEREST FREE FUNDS AVAILABLE WITH THE ASSESSEE, INTEREST WAS NOT DISALLOWAB LE MERELY ON ACCOUNT OF THE UTILIZATION OF THE FUNDS FOR NON - BUSINESS PURPOSES. THUS, AS CAN BE SEEN THE TRIBUNAL ACTUALLY RELIED ON THE FINDINGS GIVEN IN CASE OF TORRENT FINANCIERS LTD. (SUPRAJ AND FURTHERMORE THERE WAS NOTHING CONTRARY THAT COULD BE BROU GHT ON RECORD BY THE DEPARTMENT FOR IT TO HOLD OTHERWISE. FACTUALLY, IF FOUND HUGE FUNDS WERE AVAILABLE WITHOUT ANY INTEREST LIABILITY WITH THE ASSESSEE AND THAT THERE WAS NO EVIDENCE TO HOLD THAT THE BORROWED MONEY WAS UTILIZED FOR THE PURPOSE OF ADVANCE TO THE SISTER CONCERN. ALL THESE ASPECTS CUMULATIVELY LED THE TRIBUNAL TO HOLD THAT THE DISALLOWANCE MADE ONLY ON THE GROUND THAT ADVANCES WERE GIVEN OUT OF THE BORROWED FUNDS, HOLDING THE ASSESSEE INELIGIBLE FOR ALLOWANCE OF INTEREST BY THE ASSESSING OFFI CER OF THE SUM OF RS. 18.66 LACS WAS NOT SUSTAINABLE. THE TRIBUNAL HAS CORRECTLY APPROACHED THE ISSUE WHICH HAS BEEN PROPOSED IN THE PRESENT TAX APPEAL. WHEN THERE WAS NO EVIDENCE BROUGHT ON RECORD BY THE DEPARTMENT FOR THE TRIBUNAL TO HOLD OTHERWISE THAN WHAT HAS BEEN CONCLUDED BY WAY OF ANY MATERIAL WE HOLD THAT THE ISSUE IS APPROPRIATELY CONCLUDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE', (VI) CIT - I VS. AMOD STAMPING PVT. LTD. [2014 (45 TAXMAN. COM 427] HAS ALSO ENDORSED THE SIMILAR VIEW S. '[3.2.] SIMILAR OBSERVATIONS ARE MADE BY THE LEARNED ITAT WITH RESPECT TO THE ASSESSMENT YEARS 2005 - 06 AND 2006 - 07. IN THE CASE OF RELIANCE UTILITIES AND POWER LTD., THE BOMBAY HIGH COURT HAS HELD THAT IF THERE ARE FUNDS AVAILABLE BOTH INTEREST - FREE AN D OVERDRAFT AND / OR LOANS TAKEN, THEN A PRESUMPTION WOULD ARISE THAT INVESTMENTS WOULD BE OUT OF THE INTEREST FREE FUNDS GENERATED OR AVAILABLE WITH THE COMPANY, IF THE INTEREST FREE FUNDS WERE SUFFICIENT TO MEET THE INVESTMENTS AND THEREFORE, INTEREST WA S DEDUCTIBLE. SIMILAR VIEW HAS BEEN TAKEN BY THE DIVISION BENCH OF THIS COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. GUJARAT STATE FERTILIZERS AND CHEMICALS LTD. REPORTED IN [2013] 358 ITR 323 (GUJ.). APPLYING THE RATIO / LAW LAID DOWN BY THE BOMBAY HIGH COURT IN THE CASE OF RELIANCE UTILITIES AND POWER LTD. AS WELL AS DIVISION BENCH OF THIS COURT IN THE CASE OF GUJARAT STATE FERTILIZERS AND CHEMICALS LTD. TO THE FACTS OF THE CASE ON HAND AND WHEN IT HAS BEEN FOUND THAT THE ASSESSEE WAS HAVING INTERE ST FREE FUNDS FAR IN EXCESS OF INVESTMENTS AND THEREFORE, IT CAN BE SAID THAT THE INVESTMENTS ARE MADE OUT OF INTEREST FREE FUNDS AND THEREFORE, THE AO WAS NOT JUSTIFIED IN MAKING ADDITIONS AND / OR MAKING DISALLOWANCE UNDER SECTION 36(1)(III) OF THE I. T. ACT. UNDER THE CIRCUMSTANCES, NO ERROR AND / OR ILLEGALITY HAS BEEN COMMITTED BY THE LEARNED ITAT IN DELETING THE DISALLOWANCE MADE BY THE AO UNDER SECTION 36(1)(III) OF THE 1. T. ACT. NO QUESTION OF LAW MUCH LESS SUBSTANTIAL QUESTION OF LAW ARISE WITH RE SPECT TO DELETION OF DISALLOWANCE MADE BY THE AO UNDER SECTION 36(1)(III) OF THE I.T. ACT.' VII) THE HON'BLE SUPREME COURT IN CASE OT MUNJAL SALES CORPORATION 298 ITR 298 HAS ALSO OBSERVED THAT WHEN ASSESSEE HAS SUFFICIENT INTEREST FR EE FUNDS TO GRANT ADVANCES TO SISTER CONCERN, NO DISALLOWANCE OF INTEREST IS JUSTIFIED. VIII) THE HON'BLE AHMEDABAD I.T.A.T. IN CASE OF PARESH LAL CHAND SHAH IN ITA NO 3408/AHM.2010 VIDE ITS ORDER DATED 29 TH APRIL 2013 HAS DECIDED THE SIMILAR ISSUE IN FAVO UR OF ASSESSEE AFTER CONSIDERING THE DECISION OF RAGHUVIR SYNTHETICS LIMITED REFERRED SUPRA. IV) SHAHIBAUG ENTREPRENEURS VS. ITO, 50 ITD 113 (AHD) 'IN ABSENCE OF NEXUS BETWEEN INTEREST - BEARING LOANS TAKEN AND INTEREST FREE LOAN GIVEN, INTEREST PAID ON BO RROWED MONEY CANNOT BE DISALLOWED. THERE MAY BE VARIETY OF REASONS WHY AN ASSESSEE DOESN'T CHARGE OR TAKE INTEREST FROM LOANEE PARTIES; WHILE AT THE SAME TIME, IT PAY INTEREST ON BORROWINGS WHICH ARE FOR BUSINESS PURPOSES. FOR THE SIMPLE REASON THAT THE AS SESSEE HAS FAILED TO CHARGE INTEREST ON ITS RECEIVABLES AND DUES THERE SHOULD NOT BE PROPORTIONATE DISALLOWANCE IN RESPECT OF INTEREST PAID BY THE ASSESSEE ON ITS BORROWINGS WHICH ARE FOR THE PURPOSE OF BUSINESS. IN THE ABSENCE OF ANY FINDING OR EVIDENCE T HAT BORROWING WAS NOT FOR BUSINESS, THE DISALLOWANCE OF PROPORTIONATE INTEREST BY THE ASSESSING OFFICER CANNOT BE UPHELD. THUS WHERE THE ASSESSEE BORROWED MONEY FOR THE PURPOSE OF THE BUSINESS AND THE INTEREST PAID THEREON WAS DISALLOWED PROPORTIONATELY BY THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE DID NOT CHARGE INTEREST ON AMOUNTS RECEIVABLE BY IT FROM ITS SUBSIDIARY COMPANY AND OTHERS BUT THE ASSESSING OFFICER HAD NOT SHOWN ANY NEXUS OR CLOSE RELATION BETWEEN THE LOANS OBTAINED AND THE LOANS A DVANCED FREE OF INTEREST, IT WAS HELD THAT THE DISALLOWANCE WAS NOT JUSTIFIED' ' \ X) GUJARAT NARMADA VALLEY FERTILIZERS CO. LTD. VS. DCIT 1TAT, AHMEDABAD - A BENCH [73 TTJ 787] 'BUSINESS EXPENDITURE INTEREST ON BORROWED CAPITAL DIVERSION OF INTEREST BEARIN G ADVANCES TO ASSOCIATE CONCERNS WITHOUT INTEREST SUFFICIENT FUNDS AVAILABLE WITH ASSESSEE ON WHICH NO INTEREST WAS PAID NO EVIDENCE TO LINK THE INTEREST BEARING LOAN OBTAINED BY ASSESSEE WITH INTEREST FREE ADVANCES MADE TO ASSOCIATE CONCERNS ADDITION DELE TED. HELD ON GOING THROUGH THE FIGURE IN THE BALANCE SHEET OF THE ASSESSEE COMPANY AS ON 1 ST APRIL, 1994 AND 31 ST MARCH, 1995 IT FOUND THAT THE SHARE CAPITAL AND THE RESERVES AND SURPLUS TOGETHER WITH THE I.T.A NO. 669 /AHD/20 16 A.Y. 2012 - 13 PAGE NO DCIT VS. M/S. ENDEAVOUR CAREERS PVT. LTD. 14 ACCUMULATED DEPRECIATION WOULD FAR EXCEED THE LOANS AND ADVANCES MADE TO THE THREE CONCERNS. THE PERCENTAGE OF LOANS AND ADVANCES IN RELATION TO THE OWN FUNDS OF THE ASSESSEE COMPANY WOULD BE 0.012 PERCENT AS ON 1 ST APRIL 1994 AND 0.0135 PERCENT AS ON 31 ST MARCH 1995, AS PER DETAILS FURNISHED. IN OTHER WOR DS WHERE SUFFICIENT FUNDS AVAILABLE WITH THE COMPANY ON WHICH NO INTEREST WAS PAID AND OUT OF WHICH THE LOANS AND ADVANCES TO THE ABOVE SAID CONCERNS COULD BE MADE. THERE IS NO CLEAR EVIDENCE THAT THE INTEREST BEARING LOANS TAKEN BY THE ASSESSEE COMPANY FO R THE PURPOSE OF ITS OWN BUSINESS HAVE BEEN DIVERTED FOR NON BUSINESS PURPOSE, NO DIRECT NEXUS HAS BEEN PROVED EITHER BY THE AO OR BY THE C1T(A) BETWEEN THE INTEREST BEARING LOANS TAKEN AND THE INTEREST FREE ADVANCES GIVEN. IN THIS VIEW OF THE MATTER, THE AO IS DIRECTLY TO DELETE THE ADDITION SHAHIBAUG ENTERPRENUERS V. ITO [1994] 49 TTJ (AHD) 554; (1994) 50 ITD 113 (AHD) DURAMETALIC INDIA VS. I AC (1991) 38 ITD 211 (MAD.) 209; (1993) 46 ITD 389 (MAD.) 138 ITR 45 (GUJ) CIT VS. HOTEL SEVERE (1998) 148 CTR (MA D.) 585 AN D REGAL THEATRE VS. CIT (1998) 100 TAXMAN 116 (DEL.) RELIED ON'. 6.7. RESPECTFULLY FOLLOWING THE JUDGMENTS OF HON'BLE GUJARAT HIGH COURT, JURISDICTIONAL .T.A.T. AND OTHER AUTHORITIES REFERRED SUPRA, THE DISALLOWANCE OF INTEREST MADE BY ASSESSING OFFICER OF RS.23,39,931 / - IS DELETED. 12. WE HAVE GONE THROUGH THE DETAILED FINDINGS OF THE LD.CIT(A REGARDING GRANTING OF INTEREST FREE ADVANCES T O O NE PARTY NAMELY; BON TEMP PVT. LTD. A SUBSIDIARY COMPANY IN WHICH THE A SSESSEE HAD THE SHARE HOLDING OF 96.5%, WHILE THE OTHER PARTY NAMELY DREAM EDUVENTURE PVT. LTD. WAS THE SISTER CONCERN OF A SSESSEE . THE BON TEMP PVT. LTD. WAS IN THE BUSINESS OF PROVIDING CATERING, CANTEEN AND RESTAURANT SERVICES AND W AS HAVING BUSINESS CONNECTIONS WITH THE A SSE SSEE . THE LD.CIT(A) HAS ELABORATED IN HIS FINDINGS AS SUPRA THAT NO INTEREST BEARING FUNDS HAVE BEEN USED FOR THE PURPOSE OF ADVANCES TO THE AFORESAID TWO PARTIES AND THE ADVANCES GIVEN TO THE AFORESAID PARTIES WERE FOR THE BUSINESS PURPOSES NOT FOR ANY OTHER PURPOSES . THE LD.CIT(A) HAS ALSO PLACED RELIANCE ON A NUMBER OF JUDICIAL PRONOUNCEMENT AS SUPRA IN HIS ORDER. AFTER CONSIDERING THE DETAILED FINDINGS OF THE LD.CIT(A) WE DO NOT FIND ANY REASON TO INTERFERE IN HIS DECISION, THEREFORE, THE APPEAL OF TH E REVENUE IS DISMISSED. 13. IN THE RESULT , THE GROUNDS OF APPEAL 1 OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES AND GROUND NO.2 & 3 ARE D ISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 20 - 03 - 201 8 SD/ - SD/ - ( S.S. GODARA ) ( AM ARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 20 /03 /2018 / COPY OF ORDER FORWARDED TO: - I.T.A NO. 669 /AHD/20 16 A.Y. 2012 - 13 PAGE NO DCIT VS. M/S. ENDEAVOUR CAREERS PVT. LTD. 15 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUAR D FILE. BY ORDER/ , / ,