ITO, Wd. 3(1), Pune V. Swapnali RDS Joint Venture, Pune

ITA 771/PUN/2011

• Counselvise Citation: [2012] 120 COUNSELVISE.COM (IT) 0016 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 01-08-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 07-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VINITA MENON
• Keywords: Rule of consistency; Advance ruling; Relationship of principal and agent
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER , AND SHRI R.K.PANDA, ACCOUNTANT MEMBER. ITA.NO.771/PN/2011 (ASSTT. YEAR : 2008-09) ITO, WARD-3(1), PUNE. .. APPELLANT VS. SWAPNALI RDS JOINT VENTURE, 759/34, BHOSALE PAVILION, BHANDARKAR ROAD, DECCAN GYMKHANA, PUNE 411004. .. RESPONDENT PAN: AAAAS6751R ASSESSEE BY : SHRI NIKHIL PATHAK DEPARTMENT BY : MS.VINITA MENON DATE OF HEARING : 21.09.2012 DATE OF PRONOUNCEMENT : 26.09.2012 ORDER PER SHAILENDRA KUMAR YADAV, JM : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) AGAINST DELETION OF DISALLOWANCE U/S. 40(A)( IA) OF THE ACT. 2. AT THE OUTSET OF HEARING, LD. AUTHORISED REPRESE NTATIVE POINTED OUT THAT THIS CASE IS COVERED IN FAVOUR OF THE ASSESSEE BY ITAT, PUNE BENCH, IN ITA.NO.65/PN/2011 FOR A.Y. 200 6-07 IN THE CASE OF ITO VS. GAMMON PROGRESSIVE-JV, WHEREIN VIDE PARAS 5 TO 9 THE TRIBUNAL DECIDING SIMILAR ISSUE IN FAVOUR OF TH E ASSESSEE BY DISMISSING THE APPEAL OF THE REVENUE, HAS HELD AS U NDER: 5. AFTER GOING THROUGH THE ABOVE SUBMISSIONS AND M ATERIAL ON RECORD, WE FIND THAT THE FIRST ISSUE IS REGARDIN G STATUS OF THE ASSESSEE. THE ASSESSING OFFICER HAS MENTIONED THE STATUS AS FIRM. HOWEVER, IN THE EXPLANATION GIVEN, THE ASSES SEE HAS 2 MADE IT CLEAR THAT THE STATUS IN WHICH THE RETURNS WAS FILED WAS THAT OF AN AOP. IT WAS EXPLAINED THAT IN THE R ETURNS OF INCOME SINCE BEGINNING TILL THE A.Y. 2006-07, THE S TATUS WAS MENTIONED AS AOP ONLY, I.E., WHEN THE RETURNS WERE FILED MANUALLY. HOWEVER, FROM A.Y. 2007-08, WHEN ELECTRO NIC FILING HAD TO BE DONE, DUE TO COMPUTER ERROR THE STATUS AP PEARED AS FIRM ON THE ITR ACKNOWLEDGEMENT, WHEREAS IN THE COMPUTATION OF TOTAL INCOME, IT WAS CORRECTLY MENTI ONED AS AOP. IT WAS EXPLAINED THAT I.T.RETURN FORM NO.5 WA S ACTUALLY APPLICABLE FOR FIRMS, AOPS AND BOIS. THEREFORE, TH IS ERROR MIGHT HAVE OCCURRED. THE ASSESSEE HAS ALSO FILED C OMPUTATION OF TOTAL INCOME ALONGWITH ACKNOWLEDGEMENTS FROM A.Y . 2002- 03 TO A.Y. 2006-07 IN WHICH THE STATUS WAS REGULARL Y SHOWN AS AOP AND EVEN IN THE APPLICATION FORM FOR ALLOTMENT OF PAN IT WAS SHOWN AS AOP. THE CIT(A) NOTICED FROM THE RECO RD THAT STATUS WAS SHOWN AS AOP. HOWEVER, IT WAS NOT VERY MUCH RELEVANT FOR THE PURPOSE OF APPLICABILITY OF PROVIS IONS OF SECTION 194C SINCE TDS PROVISIONS ARE APPLICABLE TO ALL ENT ITIES EXCEPT INDIVIDUALS AND HUF HAVING GROSS RECEIPTS OR TURNOV ER FROM BUSINESS OR PROFESSION BELOW THE PRESCRIBED LIMIT. 6. IT WAS FURTHER EXPLAINED ON BEHALF OF THE ASSESS EE THAT JOINT VENTURE AS SUCH DOES NOT EXECUTE ANY CONTRACT WORK BUT WERE MERELY FORMED FOR OBTAINING CONTRACT WORK AND FOR RECEIVING THE PAYMENT, WHICH WAS IMMEDIATELY DISTRI BUTED IN THE RATIO OF THE SHARE OF THE WORK DONE. THE ACTUA L SHARE IN THE JOINT VENTURE OF THE TOTAL WORK ALLOCATED WAS 6 0% FOR M/S.GAMMON INDIA LTD. AND 40% FOR M/S.PROGRESSIVE CONTRACTION LTD. IN THIS BACKGROUND IT WAS EXPLAIN ED THAT THE CONTRACT ACCOUNT AND THE BALANCE SHEET OF THE JOIN T VENTURE REVEALS NOTHING BUT APPORTIONMENT OF CONTRACT RECEI PTS, ASSETS AND LIABILITIES BETWEEN THE MEMBERS. THERE WAS NO EXPENDITURE BOOKED IN THE CONTRACT ACCOUNT NOR ANY PROFIT AND LOSS ACCOUNT PREPARED FOR THE PURPOSE SINCE THERE D ID NOT ARISE ANY PROFIT OR LOSS TO THE ASSESSEE PER SE. T HE JOINT VENTURE TRANSFERRED NOT ONLY THE GROSS REVENUE BUT ALSO THE CORRESPONDING TDS TO ITS MEMBERS IN THE RATIO OF TH EIR WORK DONE BY INDIVIDUAL MEMBERS FOR WHICH THE APPOINTMEN T CERTIFICATE WAS DULY ISSUED EVERY YEAR BY THE ASSES SING OFFICER. IN THIS BACKGROUND IT WAS SUBMITTED THAT THERE WAS NO RELATIONSHIP OF CONTRACTOR AND SUB-CONTRACTOR BETWE EN THE JOINT VENTURE AND ITS TWO MEMBERS. THEREFORE, THER E WAS NO QUESTION OF APPLICABILITY OF TDS PROVISIONS U/S.194 C OF THE ACT. THE ASSESSEE ALSO EXPLAINED WHY A RETURNS WER E FILED BY THE JOINT VENTURE AS AOP. IT WAS EXPLAINED THAT IT WAS DONE TO PASS ON THE CREDIT OF TDS TO THE MEMBERS ON THE BAS IS OF TAX APPORTIONMENT CERTIFICATES WHO HAVE ACCOUNTED FOR T HE CORRESPONDING CONTRACT REVENUE IN THEIR RESPECTIVE RETURNS. IT WAS ALSO SUBMITTED THAT NIL INCOME ARISING IN THE HANDS OF THE AOP IS CONFIRMED BY THE ACTION OF THE ASSESSING OFFICER IN NOT ASSESSING ANY PROFIT/INCOME ARISING FROM THE CO NTRACT APART FROM THIS DISALLOWANCE U/S. 40(A)(IA) OF THE ACT. THE 3 ASSESSEE VIDE ITS SUBMISSIONS DATED 26.03.2010 AND 06.09.2010, EXPLAINED THE DIFFERENCE BETWEEN REVENU E SHARING ARRANGEMENT ENTERED INTO BY THE JOINT VENTURE VIS-A -VIS SUB- CONTRACT. IT WAS EXPLAINED ON BEHALF OF THE ASSESS EE THAT IN THE CASE OF SUB-CONTRACT, THERE WAS A RELATIONSHIP OF PRINCIPAL AND AGENT WHEREAS IN THE SITUATION OF REVENUE SHARI NG, IT WAS ON A PRINCIPAL TO PRINCIPAL BASIS. FURTHER, IN SUB -CONTRACTING, THE CONTRACTOR RETAINS HIS SHARE OF PROFIT ALONGWIT H THE TDS AND ONLY THE BALANCE IS PASSED ON TO SUB-CONTRACTOR . BUT IN JOINT VENTURE, ASSESSEES DID NOT RETAIN ANY SHARE I N THE REVENUE WITH IT AND HAS PASSED THE ENTIRE GROSS REV ENUE ALONGWITH TDS APPORTIONED FOR THEM. IT WAS SUBMITT ED THAT THE DEPARTMENT HAS ALSO ISSUED TAX APPORTIONMENT CE RTIFICATES EVERY YEAR DURING THE PAST EIGHT YEARS TO ENABLE TH E TWO MEMBERS TO CLAIM THE TDS CREDITS IN THEIR RESPECTIV E CASES. EVEN IN THE CURRENT ASSESSMENT YEAR, IT WAS NOTICED THAT TAX APPORTIONMENT CERTIFICATE WAS ISSUED BY THE DEPARTM ENT VIDE LETTER NO.PN/WD.3(4)/TC/07-08 DATED 26.11.2008 OF T HE ASSESSING OFFICER IN WHICH THE ASSESSING OFFICER HA S ALLOWED APPORTIONMENT OF ENTIRE TDS OF RS.9,26,588/- DURING THE YEAR TO M/S.GAMMON INDIA LTD., SINCE ENTIRE WORK DURING THE YEAR WAS CARRIED OUT BY IT. SIMILARLY, THERE HAS BEEN A PPORTIONMENT TO EITHER OF THE TWO COMPANIES OR TO BOTH THE COMPA NIES IN THE EARLIER YEARS ALSO BY THE ASSESSING OFFICER FOR ENA BLING THEM TO CLAIM TDS IN RESPECTIVE CASES. THE ASSESSEE, VIDE ITS SUBMISSION DATED 22.04.2010, FURNISHED THE DETAILS WHICH REVEALED THAT GROSS REVENUE FROM THIS CONTRACT RECE IPTS BY JOINT VENTURE WAS ACCOUNTED FOR IN CASE OF EITHER OR BOTH OF THE TWO COMPANIES WHO WERE MEMBERS OF THE JOINT VENTURE IN ALL ASSESSMENT YEARS 2001-02 TO 2008-09. IT WAS FURTHE R EXPLAINED BY THE ASSESSEE THAT REVENUE SHARING WAS NOT EXACTLY 60:40 IN EACH YEAR SINCE IT DEPENDS ON THE RELATIVE WORK DONE IN THE PARTICULAR YEAR. HAVING EXPLAINED THE DIFFERENCE BETWEEN CASES OF CONTRACT/SUB-CONTRACT, IN THE BACKGROUND OF CLAUSES OF THE AGREEMENT, THE ASSESSE E RELIED ON THE DECISION OF HON'BLE HIMACHAL PRADESH HIGH COURT IN THE CASE OF CIT VS. AMBUJA DARLA KASHLOG MANGU TRANSPOR T COOPERATIVE SOCIETY (2009) 227 CTR 299 (HP). 7. IN THE BACKGROUND OF THE TAX APPORTIONMENT CERTI FICATES ISSUED BY THE ASSESSING OFFICER, IT WAS STATED ON B EHALF OF THE ASSESSEE THAT THE ASSESSING OFFICER HAS MARKED COPY OF THIS CERTIFICATE TO THE MEMBERS OF THE JOINT VENTURE AS WELL AS TO THEIR RESPECTIVE ASSESSING OFFICERS, WHICH SHOWS TH AT THE ASSESSING OFFICER HAS APPLIED HIS MIND AND CONSCIOU SLY ACCEPTED THE FACT THAT THE JOINT VENTURE AOP WAS FO R THE DISTRIBUTION OF RECEIPTS AMONGST ITS CONSTITUENTS I N PROPORTION OF THEIR WORK SHARING. THEREFORE, THERE WAS NO APP LICABILITY OF PROVISIONS OF TDS U/S.40(A)(IA) OF THE ACT. 8. FURTHER, THE ASSESSEE, VIDE ITS SUBMISSION DATED 06.09.2010, MADE COMPARISON OF THE TAX RATES APPLIC ABLE TO 4 DOMESTIC COMPANIES, BEING JOINT VENTURE PARTNER IN THEIR INDIVIDUAL CAPACITY AND THE TAX RATES APPLICABLE TO THE AOP. HOWEVER, IN SUBMISSION DATED 21.10.2010, IT WAS EXP LAINED THAT TAX RATES IN THE CASE OF DOMESTIC COMPANY AND THE AOP WOULD BE THE SAME IN THIS CASE. THIS WAS DUE TO AP PLICABILITY OF SECTION 167B OF THE ACT. THE ASSESSEE ALSO FILE D DETAILS OF THE RETURNS OF INCOME OF THE TWO CORPORATE ENTITIES BEING JOINT VENTURE MEMBERS, ALONGWITH ACKNOWLEDGEMENTS OF THEI R I.T. RETURNS, WHICH REVEALED THAT BOTH OF THEM HAD HUGE POSITIVE RETURNED INCOMES EVERY YEAR. FOR THIS PAYMENT THE STAND OF THE ASSESSEE WAS THAT THE METHOD OF APPORTIONMENT O F REVENUE TO THE MEMBERS WAS NOT TO TAKE ANY UNDUE BENEFIT OF LOSSES INCURRED BY THEM. THEREFORE, IT WAS STATED THAT TH ERE WAS NO LOSS TO THE REVENUE AS A RESULT OF THIS METHOD ADOP TED BY THE ASSESSEE OF SHARING THE GROSS REVENUE BY ITS MEMBER S, WHICH WAS TAXED IN THEIR HANDS. HOWEVER, THIS EXPLANATIO N OF THE ASSESSEE DID NOT FIND FAVOUR FROM THE ASSESSING OFF ICER. THE ASSESSEE HAS ALSO RAISED THE ISSUE OF CONSISTENCY S TATING THAT THE SAME METHOD WAS BEING ACCEPTED BY THE DEPARTMEN T IN THE PAST 8 TO 10 YEARS INCLUDING A.Y. 2007-08 IN WH ICH TAX APPORTIONMENT CERTIFICATE WAS ALSO BEING ISSUED. I T WAS CONTENDED THAT THIS ASPECT HAS NOT BEEN CONSIDERED IN THE ASSESSMENT ORDER U/S.143(3) FOR A.Y. 2007-08. ON T HE PRINCIPLE OF CONSISTENCY, THE LD. AUTHORISED REPRES ENTATIVE RELIED ON THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF GOPAL PUROHIT (2010) 228 CTR 582 (BOM.) AND ASSESSEE ALSO RELIED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF RADHASOAMI SATSANG VS. CIT (1992) 193 ITR 3 21 (SC) WHEREIN IT WAS OBSERVED THAT STRICTLY SPEAKING THE PRINCIPLE OF RES JUDICATA DOES NOT APPLY TO INCOME TAX PROCEEDIN GS SINCE EACH ASSESSMENT YEAR WAS A SEPARATE UNIT IN ITSELF AND WHAT IS DECIDED IN ONE YEAR MAY NOT APPLY IN THE FOLLOWING YEAR. IT WAS FURTHER CONTENDED THAT WHERE A FUNDAMENTAL ASPECT PERMEATING THROUGH THE DIFFERENT ASSESSMENT YEARS H AS BEEN FOUND AS A FACT ONE WAY OR THE OTHER AND PARTIES HA VE ALLOWED THAT POSITION TO BE SUSTAINED BY NOT CHALLENGING TH E ORDER, IT WOULD NOT BE AT ALL APPROPRIATE TO ALLOW THE POSITI ON TO BE CHANGED IN A SUBSEQUENT YEAR. IT WAS ALSO CONTENDE D THAT HON'BLE KERALA HIGH COURT IN THE CASE OF MANJUNATH MOTOR SERVICE AND CANARA PUBLIC CONVEYANCES, 197 ITR 321 (KAR.) OBSERVED THAT METHOD ADOPTED BY THE ASSESSING OFFIC ER WOULD RESULT IN DOUBLE TAXATION OF THE SAME INCOME SINCE GROSS RECEIPTS DISTRIBUTED AMONGST THE TWO JOINT VENTURE PARTNERS WAS INCLUDED AS RECEIPTS IN THEIR RESPECTIVE CASES AND THE JOINT VENTURE PARTNERS HAD ALSO UTILISED THE TDS CREDITS ON THE BASIS OF APPORTIONMENT CERTIFICATE ISSUED BY THE ASSESSIN G OFFICER. IN VIEW OF THE ABOVE DISCUSSION, CIT(A) WAS JUSTIFI ED IN HOLDING THAT IN ABSENCE OF ANY CONTRACT OR SUB-CONTRACT WOR K BY JOINT VENTURE TO ITS MEMBER COMPANIES, PROVISIONS OF SECT ION 194C WERE NOT APPLICABLE FOR THE PURPOSE OF TDS. THE TW O CORPORATE ENTITIES FORMING JOINT VENTURE WERE ALREADY BEING A SSESSED SINCE A.Y. 2000-01 ONWARDS ON THEIR RESPECTIVE SHAR ES AND 5 TDS APPORTIONMENT CERTIFICATES WERE ALSO ISSUED BY THE ASSESSING OFFICER EVERY YEAR FOR THESE EIGHT YEARS INCLUDING THE CURRENT ASSESSMENT YEAR TO ENABLE THEM TO CLAIM THE SAME IN THEIR OWN CASES. MOREOVER, THERE WAS NO PROFIT AND LOSS ACCOUNT IN THE ASSESSEES CASE AND THERE WAS NO CLA IM OF ANY EXPENDITURE. THEREFORE, THERE WAS NO QUESTION OF A NY DISALLOWANCE UNDER THE PROVISIONS OF SECTION 40(A)( IA) OF THE ACT. MOREOVER, DISALLOWANCE U/S. 40(A)(IA) MADE BY THE ASSESSING OFFICER CANNOT BE SUSTAINED. IN EFFECT, THE METHOD ADOPTED BY THE ASSESSING OFFICER WILL ALSO RESULT I N DOUBLE TAXATION OF THE SAME CONTRACT REVENUE WHICH IS IN V IOLATION OF THE KARNATAKA HIGH COURT DECISION REPORTED IN 197 I TR 321 (KAR.). THIS VIEW IS FORTIFIED BY THE DECISION OF THE ITAT PUNE BENCH IN ITO VS. RAJDEEP & PMCC INFRASTRUCTURE, WHE REIN THE TRIBUNAL HAS OBSERVED AS UNDER: 6. WE HAVE NOTED THAT IT IS AN ADMITTED POSITION T HAT NO WORK IS CARRIED OUT BY THE AOP, IT HAS ACTED AS A CONDUIT BETWEEN THE MSRDC AND THE TWO PERSONS CONSTITUTING THIS AOP SO FAR AS THEIR SEPARATE, AND NEATLY IDENTIFIED, WORK AREAS ARE CONCERNED. A MERE EXIST ENCE OF AN AOP CANNOT LEAD TO TAXABILITY IN THE HANDS OF TH E AOP UNLESS THE AOP RECEIVES MONIES IN ITS OWN RIGHT. W E HAVE NOTED THAT HON'BLE AUTHORITY OF ADVANCE RULING S WAS IN SEISIN OF A MATERIALLY IDENTICAL SITUATION I N THE CASE OF VAN OORD ACZ BV IN RE(248 ITR 399) IN WHICH TWO CONTRACTORS JOINED HANDS FOR CARRYING OUT NEATL Y IDENTIFIED SEPARATE WORK WHICH WAS A PART OF COMPOS ITE CONTRACT AWARDED TO THE AOP, BUT THE TAXABILITY OF INCOME FROM SUCH CONTRACT WAS HELD TO BE TAXABLE IN THE HA NDS OF THE RESPECTIVE CONTRACTORS. WHILE HOLDING SO HON'B LE AUTHORITY FOR ADVANCE RULING OBSERVED AS FOLLOWS: '7. SO FAR AS QUESTION NOS. 1 AND 2 ARE CONCERNED THE PARTIES HAVE SPECIFICALLY RULED OUT CONSTITUTIO N OF ANY PARTNERSHIP BETWEEN THEM. THERE IS NO SHARING OF PROFITS OR LOSS. THEY HAVE SPECIFICALLY PROVIDED IN THE AGREEMENT THAT EACH PARTY WILL BEAR ITS OWN LOSS AND RETAIN ITS PROFITS AS AND WHEN SUC H PROFITS OR LOSS ARISE. HAVING REGARD TO THE AGREEME NT WE ARE OF THE VIEW THAT THE APPLICANT CANNOT BE TREATED AS A PARTNERSHIP WHICH CAN ONLY BE CREATED BY AN AGREEMENT. NOR CAN IT BE TREATED AS AN AOP. IN ORDER TO CONSTITUTE AN AOP THERE WILL HAVE TO BE COMMON PURPOSE OR COMMON ACTION AND THE OBJECT OF THE ASSOCIATION MUST BE TO PRODUCE INCOME JOINTLY. IT IS NOT ENOUGH THAT THE PERSONS RECEIVE THE INCOME JOINTLY. IN THE INSTANT CASE, EACH OF THE TWO PARTIES HAS AGREED TO BEAR ITS OWN LOSS OR RETAIN ITS OWN PROFI T SEPARATELY. BOTH HAVE AGREED TO EXECUTE THE JOB 6 TOGETHER FOR BETTER CO-OPERATION IN THEIR RELATIONS HIP WITH THE CHENNAI PORT TRUST. THE INTENTION WAS NOT TO CARRY OUT ANY BUSINESS IN COMMON, ONLY A PART OF THE JOB WILL BE DONE BY VOACZ ACCORDING TO ITS TECHNICAL SKILL AND CAPABILITY. THE OTHER PART OF T HE CONTRACT WILL BE EXECUTED BY HCC. THE TOTAL VALUE O F THE CONTRACT WAS RS. 2,62,01,03,120. THE APPLICANT' S SHARE OF WORK WAS VALUED AT RS. 44,52,78,920 (17 PER CENT OF TOTAL VALUE). THE ASSOCIATION WITH THE HCC WAS NOT WITH THE OBJECT OF EARNING THIS INCOME BUT FOR CO ORDINATION IN EXECUTING THE CONTRACT SO THAT HCC COULD ALSO MAKE ITS OWN PROFIT. HHC'S WORK AND INCOME ARISING THEREFROM WAS QUITE SEPARATE AND INDEPENDENT OF THE APPLICANT'S WORK AND INCOME. IF THE COST INCURRED BY THE HCC OR THE APPLICANT WAS MORE THAN THEIR INCOME, EACH PARTY WILL HAVE TO BEAR ITS LOSS WITHOUT ANY ADJUSTMENT FROM THE OTHER PARTY. THE ASSOCIATION OF THE PETITIONER COMPANY WITH HCC WAS UNDOUBTEDLY FOR MUTUAL BENEFIT BUT SUCH ASSOCIATION WILL NOT MAKE THEM A SINGLE ASSESSABLE UNIT AND LIABLE TO TAX AS AN AOP. FOR EXAMPLE, A BUILDING CONTRACTOR MAY ASSOCIATE WITH A PLUMBER AND AN ELECTRICIAN TO EXECUTE A BUILDING PROJECT. ALL THESE PERSONS ARE DRIVEN BY PROFIT-MAKING MOTIVE. BUT THAT BY ITSELF WILL NOT MAKE THE THREE PERSONS LIABLE TO BE TAXED AS AN AOP IF EACH ONE HAS A DESIGNED AND INDEPENDENT ROLE TO PLAY IN THE BUILDING PROJECT. IN THE INSTAN T CASE, THE APPLICANT HAS STATED THAT THE APPLICANT HAS MADE ITS OWN ARRANGEMENT FOR EXECUTION OF WORK INDEPENDENT FROM THAT OF HCC. THERE IS NO CONTROL OR CONNECTION BETWEEN THE WORK DONE BY THE APPLICANT AND HCC.' 8. ON THE FACTS HEREINABOVE, THE APPLICANT AND HCC CANNOT BE TREATED AS AN AOOP FOR THE PURPOSE OF LEVY OF INCOME-TAX. THE APPLICANT WILL BE LIABLE TO BE TAXED AS A SEPARATE AND INDEPENDENT ENTITY. THE QUESTION NO.1 IS ANSWERED ACCORDINGLY.' 7. WE ARE IN CONSIDERED AGREEMENT WITH THE VIEWS SO EXPRESSED BY THE HON'BLE AUTHORITY FOR ADVANCE RULI NG. WE ADOPT THE REASONING OF THE HON'BLE AAR AND, RESPECTFULLY FOLLOWING THE SAME, APPROVE THE CONCLU SION ARRIVED AT BY THE CIT(A) AND DECLINE TO INTERFERE I N THE MATTER. IN VIEW OF THE ABOVE DISCUSSION, WE ARE NOT INCLINE D TO INTERFERE IN THE FINDING OF THE CIT(A) WHO HAS DIRECTED THE A SSESSING OFFICER TO DELETE THE ADDITION. THE SAME IS UPHELD . 7 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. 3. NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE ON BEHALF OF REVENUE. 4. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING WE ARE NOT INCLINED TO INTERFERE WITH THE FINDING OF THE CIT(A ) WHO HAS RIGHTLY HELD THAT THERE IS NO QUESTION OF DISALLOWANCE MADE U/S. 40(A)(IA) OF THE ACT. SAME IS UPHELD. 5. AS A RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 26 TH DAY OF SEPTEMBER, 2012. SD/- SD/- ( R.K.PANDA ) ( SHAILENDRA KUMAR YAD AV ) ACCOUNTANT MEMBER JUDICIAL MEMBER GSPS PUNE, DATED THE 26 TH SEPTEMBER, 2012 COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE ITO, WARD-3(1), PUNE. 3. THE CIT(A)-II, PUNE. 4. THE CIT-II, PUNE. 5. THE DR B BENCH, PUNE. 6. GUARD FILE. BY ORDER //TRUE COPY// PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE.