INCOME TAX OFICER , AMRITSAR V. MESERS BHAGAT INDUSTRIES CORPORATION LIMITED, AMRITSAR

ITA 779/ASR/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7836 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 14-06-2019
• Assessment Year: 2008-2009
• Appeal Filed On: 26-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V WADHWA LD
• Keywords: Onus to prove; TDS; Set aside
• Section: 143(3); 147; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNA L AMRITSAR BENCH, AMRITSAR BEFORE SH. VIKRAM SINGH YADAV , ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.779(ASR)/2017 ASSESSMENT YEAR:2008-09 INCOME TAX OFFICER, WARD-5(1), AMRITSAR. VS. M/S. BHAGAT INDUSTRIES CORP. LTD., VPO KHASA, AMRITSAR. [PAN:AAACB 7368P] (APPELLANT) (RESPONDENT) APPELLANT BY: SH. CHARAN DASS (LD. DR) RESPONDENT BY: SH. V. WADHWA (LD. CA) DATE OF HEARING: 14.06.2019 DATE OF PRONOUNCEMENT: 22.07.2019 ORDER PER N.K.CHOUDHRY: THE INSTANT APPEAL HAS BEEN PREFERRED BY THE REVENUE DEPARTMENT AGAINST THE ORDER DATED 28/09/2017 IMPUG NED HEREIN PASSED BY THE LD. CIT(A)-2, AMRITSAR U/S. 250( 6) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT) WHEREIN THE LD. CIT(A) SET ASIDE THE ASSESSMENT ORDER DATED 31.03 .2016 PASSED U/S 143(3) R.W.SEC.149 OF THE ACT AND DELETED THE ADDITION OF RS.65,11,730/- WHICH WAS MADE BY THE ASSESSING OFFICER U/S 69 OF THE ACT AS UNEXPLAINED MONEY. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAD FIL ED ITS RETURN OF INCOME BY DECLARING A LOSS OF RS.39,02,148/ - ON DATED 04/12/2009. THE ASSESSING OFFICER REOPENED THE ASSESSMENT U/S 147 OF THE ACT ON THE REASON THAT THE ASSESSE E ITA NO.779 /ASR/2017 (A.Y.2008-09) ITO VS. BHAGAT INDUSTRIES CO RP. LTD. 2 POSSESSED A SUBSIDIARY NAMED AND STYLED AS M/S KHALSA DISTILLERIES, WHOSE RIGHTS WERE TRANSFERRED TO M/S BAGGA MILLENNIUM LIQUOR PVT. LTD., HYDERABAD FOR SALE VIDE MEMORANDUM OF UNDERSTANDING (MOU). THE AO OBSERVED TH AT THE ASSESSEE HAD RECEIVED AN AMOUNT OF RS.25,14,00,000/- DURING THE FINANCIAL YEAR: 2007-08 ON ACCOUNT OF SALE, WHICH RECEIPT WAS NOT REFLECTED IN THE FINAL ACCOUNTS AND HAS N OT BEEN OFFERED FOR TAXATION. THE ASSESSING OFFICER ALSO OBSERVED THAT THE ASSESSEE HAD RECEIVED RS.203,98,065/- FROM GURSIMRAN IN TH E YEAR UNDER CONSIDERATION WHICH WAS EXPLAINED BY THE ASSE SSEE THAT THE SAID AMOUNT WAS RECEIVED FROM M/S. GURSIMRAN DISTILLERIES PVT. LTD, DURING THE F.Y. 2007-08 IN THE BANK ACCOUNTS. FURTHER FROM THE CITI BANK, THE PAYMENT OF RS.125,90,890/- FROM PNB(2) AND THE AMOUNT OF RS.12,9 5,445/- WAS PAID BY THE ASSESSEE TO GURUSIMRAN DISTILLERIES PVT. LT D. THEREFORE, THE NET RECEIPT FROM GURUSIMRAN DISTILLERI ES WAS RS.65,11,730/-. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD NEVER MENTIONED ITS BUSINESS DEALING WITH M/S GURSIMRAN DISTILLERIES PVT. LTD., BESIDES THE SAME WERE N OT REFLECTED IN P&L ACCOUNT, BALANCE SHEET. THE ASSESSING OFFICE R FURTHER OBSERVED THAT THE ASSESSEE THE ASSESSEE NEITHER REFL ECTED THE BUSINESS DEALING NOR PRODUCED ANY SALE OR PURCHASE BI LLS IN THE NAME OF THE AFORESAID COMPANY AND THEREFORE, THE PURPOSE OF THIS MONEY INFLOW/OUTFLOW AND THE QUANTUM OF BUSIN ESS DONE AND THE PROFIT EARNED BY THE ASSESSE REMAINED UNEXPLAIN ED AND ULTIMATELY THE ASSESSING OFFICER ADDED THE ADDITION OF RS.65,11,730/- AS UNEXPLAINED MONEY U/S 69A OF THE ACT RECEIVED DURING THE F.Y:2007-08, IN THE TOTAL INCOME OF THE ASSESSEE. ITA NO.779 /ASR/2017 (A.Y.2008-09) ITO VS. BHAGAT INDUSTRIES CO RP. LTD. 3 3. THE ASSESSEE CHALLENGED THE SAID ADDITION BEFORE THE LD. CIT(A) AND SUBMITTED THE FOLLOWING SUBMISSION BEFORE THE LD. CIT(A). IN THE WRITTEN SUBMISSIONS FILED BY THE APPELLANT IN THE APPEAL PROCEEDINGS IT WAS STATED THAT THE ADDITIONS MADE DURING THE SCRUTINY ASSESSMENT FOR A Y 2007-08 HAS ALREADY BEEN DELETED BY THE CIT(A) IN APPEAL NO. 78/2015-16 VIDE ORDER DATED 29-04-2016. THE APPELLANT REITERATED THAT DURING THE F.Y. 2006-07 T HE ASSESSEE HAD ENTERED INTO MOU WITH BAGGA MILLENIUM LIQUOR INDIA P LTD AND CONSEQUENTLY M/S GURSIMRAN DISTILLERIES P LTD (THE GROUP COMPANY OF BAGGA MILL ENIUM LIQUOR INDIA P LTD. AFTER EXECUTION OF MOU DATED 18 -05- 2006, THE ASSESSEE COMPANY MOVED PETITION TO THE HONBLE DELHI HIGH COURT FOR APPROVAL OF THE SCHEME OF DEMERGER U/S 391-394 OF THE COMPANIES ACT, 1956. FO R THE DEMERGER OF DISTILLERY UNIT INTO THE TRANSFEREE COMPANY M/S DIGVIJAY CHEMICAL LTD, THE HONBLE DELH I HIGH COURT PASSED THE ORDER ON 17-12-2007 WHICH WAS EFFECTIVE FROM THE APPOINTED DATE AS PER MOU IE 01- 04- 2006. THE SAID DEMERGER WAS DULY COVERED U/S 2(19AA ) OF THE I T ACT. THEREFORE THERE WAS NO CHARGEABILIT Y TO THE INCOME TAX ACT IN THE HAND OF THE ASSESSEE COMPANY. THIS HAS ALSO BEEN ACCEPTED BY THE AO WHILE FRAMING THE ASSESSMENT FOR A Y 2007-08 AND 2008-09 AND CONFIRMED BY THE CIT(A) VIDE ORDER IN APPEAL NO. 78/2015-16 I N THE CASE OF A Y 2007-08. THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSE E HAD SUBMITTED COMPLETE DETAILS OF THE TRANSFER OF S HARES OF THE TRANSFEREE COMPANY (DEMERGE COMPANY DIGVIJA Y CHEMICALS LTD) IN THE DIFFERENT ASSESSMENT YEARS AL ONG WITH THE SUBMISSIONS DATED 05-02-2016 WHICH HAD BEE N ACCEPTED BY THE AO AND NOTHING TO THE CONTRARY WAS EVER HELD BY THE AO. THAT IT IS A KNOWN FACT THAT UNDER THE SCHEME OF THE DEMERGER AND AMALGAMATION THE ASSESSE E COMPANY COULD BE TAKEN FOR CHARGEABILITY OF INCOME TAX ONLY FOR THE SHARES, WHICH IT TRANSFERRED IN THE DE MERGED ITA NO.779 /ASR/2017 (A.Y.2008-09) ITO VS. BHAGAT INDUSTRIES CO RP. LTD. 4 COMPANY AND THAT ALSO IN THE ASSESSMENT YEAR IN WHI CH THE TRANSFER OF SHARES TAKES PLACE. THE ASSESSEE COMPANY TRANSFERRED ONLY 7280 SHARES FOR A CONSIDERATION OF RS.338,957/- DURING F Y RELEVANT T O A Y 2012- 13 AS BROUGHT ON RECORD IN THE ASSESSMENT PROCEEDINGS. THE ASSESSEE COMPANY WAS ASSESSED UNDE R SCRUTINY FOR THE A Y 2012-13 AND NO ADVERSE INFEREN CE WAS TAKEN IN RESPECT OF THIS TRANSFER BY THE AO WHI LE FRAMING THE ASSESSMENT. THE AO MADE THE ADDITION OF RS.65,11,730/-, TO THE TOTAL INCOME IN THE A Y 2008-09. THE AMOUNT WAS TAKEN OUT AS NET OF THE AMOUNTS RECEIVED FROM GURSIMRAN DISTILLE RIES P LTD RS (20398065 - 13886335) AS TAKEN FROM THE FUND FLOW STATEMENT SUBMITTED. THE APPELLANT SUBMITTED T HAT THE PAYMENT RECEIVED FROM GURSIMRAN DISTILLERIES P LTD AND PAYMENTS MADE BY THE ASSESSEE TO GURSIMRAN DISTILLERIES P LTD DURING THE PERIOD WHEN THE PROCE SS OF THE DEMERGER AND AMALGAMATION WAS STILL TO ATTAIN FINALITY BY THE ORDER OF THE HONBLE DELHI HIGH COU RT ON 17-12-2007, WERE NOT PART OF THE MONIES / CONSIDERA TION IN TERMS OF THE MOU. THAT BY ANY STRETCH OF IMAGINA TION THESE MONEY CANNOT BE TAKEN TO BE CONNECTED WITH TH E SCHEME OF DEMERGER / AMALGAMATION. THESE PAYMENTS FULFILLED ALL THE CRITERIA OF IDENTITY, CAPACITY TO PAY AND GENUINENESS OF THE TRANSACTIONS. THEREFORE THESE CO ULD NOT BE TAKEN TO BE THE INCOME OF THE ASSESSEE COMPA NY UNDER THE I T ACT. FURTHER THE AO ERRED IN OBSERVING THAT THE AMOUNT WHICH WAS ADDED BY THE AO TO THE TOTAL INCOME U/ S 69A OF THE ACT WAS NOT RECORDED IN THE BOOKS OF ACCOUNT S. IN FACT ALL THE PAYMENTS WAS RECORDED IN THE BOOKS OF ACCOUNTS, DULY AUDITED BY CA AND EXPLAINED IN FULL TO THE AO. THE ASSESSEE SUBMITTED THAT THE ASSESSEE CANNOT BE CHARGED TO TAX FOR THE TRANSFER OF MONIES IN CONNEC TION WITH DEMERGER / AMALGAMATION AS STATED ABOVE. THAT THE ASSESSEE COMPANY IN THE YEAR UNDER CONSIDERATION DI D NOT HAVE ANY INCOME FROM THE DEMERGED UNDERTAKING ITA NO.779 /ASR/2017 (A.Y.2008-09) ITO VS. BHAGAT INDUSTRIES CO RP. LTD. 5 (KHALSA DISTILLERY) NOR COULD HAVE IN TERMS OF THE MOU AND THE HIGH COURT ORDER OF DEMERGER. THE LD. CIT(A) WHILE CONSIDERING THE SUBMISSION OF THE ASSESSEE DELETED RS.65,11,730/- BY HOLDING AS UNDER: DECISION: - THE AO MADE THE ADDITION OF RS 65,11,730/-, TO THE TOTAL INCOME IN THE A Y 2008-09. THE AMOUNT WAS TAKEN OUT AS NET OF THE AMOUNTS RECEIVED FROM GURSI MRAN DISTILLERIES P LTD RS (20398065 - 13886335) AS TAKE N FROM THE FUND FLOW STATEMENT SUBMITTED. THE APPELLA NT SUBMITTED BEFORE THE UNDERSIGNED THAT THE PAYMENT RECEIVED FROM GURSIMRAN DISTILLERIES P LTD AND PAYM ENTS MADE BY THE ASSESSEE TO GURSIMRAN DISTILLERIES P LT D DURING THE PERIOD WHEN THE PROCESS OF THE DEMERGER AND AMALGAMATION WAS STILL TO ATTAIN FINALITY BY THE OR DER OF THE HONBLE DELHI HIGH COURT ON 17-12-2007, WERE NO T PART OF THE MONIES / CONSIDERATION IN TERMS OF THE MOU. I AGREE THAT BY ANY STRETCH OF IMAGINATION THESE MONE Y CANNOT BE TAKEN TO BE CONNECTED WITH THE SCHEME OF DEMERGER/AMALGAMATION. FURTHER THESE PAYMENTS FULFILLED ALL THE CRITERIA OF IDENTITY, CAPACITY TO PAY AND GENUINENESS OF THE TRANSACTIONS. THEREFORE THESE CO ULD NOT BE TAKEN TO BE THE INCOME OF THE ASSESSEE COMPA NY UNDER THE I T ACT. THE APPELLANT RECEIVED RS 20398065/- FROM M/S GURSIMRAN DISTILLERIES P LTD DURING THE YEAR AND TH E APPELLANT] RETURNED RS 1,38,86,335/- BACK TO M/S GURSIMRAN DISTILLERIES/ P LTD DURING THE YEAR UNDER CONSIDERATION AND RETAINED ONLY TH AMOUNT OF THE DIFFERENCE OF RS (20398065 - 13886335)= RS 65,11,73 0/- WHICH WAS ON ACCOUNT OF LEASE RENT NET OF TDS OF THE KHASA DISTILLERY UNIT. (THE GROSS LEASE RENT RECEIV ED BY THE APPELLANT FROM GDPL DURING THE YEAR FOR FIVE MONTHS WAS RS.83,75,000/- IN ACCORDANCE WITH THE LEASE DAT ED 30-10-2006 BETWEEN THEM IN RESPECT OF THE KHASA DISTILLERY UNIT OF THE APPELLANT COMPANY WHICH WAS LEASED OUT TO GDPL VIDE LEASE DEED DATED 30-10-2006 AND AFTER DEDUCTING TDS THEREON, THE NET AMOUNT OF LEASE ITA NO.779 /ASR/2017 (A.Y.2008-09) ITO VS. BHAGAT INDUSTRIES CO RP. LTD. 6 RENT OF RS 65,11,730/- WAS TRANSFERRED BY THE APPEL LANT TO KHASA DISTILLERY COMPANY (PROP. M/S DIGVIJAY CHEMICAL LTD) THE TRANSFEREE COMPANY AS PER MOU DAT ED 18- 05-2006 BETWEEN THE ASSESSEE AND BAGGA MILLENIU M LIQUOR INDIA PVT LTD, ON 30-09-2007 AS EVIDENT FROM THE CONFIRMED COPY OF ACCOUNT OF KHASA DISTILLERY (PROP . M/S DIGVIJAY CHEMICALS LTD) IN THE BOOKS OF THE APPELLA NT FOR THE F Y 2007- 08. AFTER EXECUTION OF THE SAID MOU DATED 18-05-2006 THE ASSESSEE COMPANY MOVED PETITION TO THE HONBLE DELHI HIGH COURT FOR APPROVAL OF THE SCHEME OF DEME RGER U/S 391-394 OF THE COMPANIES ACT, 1956. THE DEMERGE R OF THE KHASA DISTILLERY UNIT INTO THE TRANSFEREE CO MPANY, DIGVIAY CHEMICAL LTD, WAS APPROVED BY THE HONBLE D ELHI HIGH COURT VIDE ORDER DATED 17- 12-2007 AND WAS EFFECTIVE FROM THE APPOINTED DATE AS PER MOU I.E. APRIL 1, 2006. THE DEMERGER UNDER THE HIGH COURT ORDER WA S COVERED U/S 2(19AA) OF THE I T ACT AND THIS WAS EXP RESSLY STATED BY THE HONBLE HIGH COURT IN ITS SAID ORDER. THEREFORE IN VIEW OF THE SAID MOU DATED 18-05- 2006, THE APPELLANT WAS NOT ENTITLED TO RETAIN THE LEASE RENT OF RS.65,11,730/- IN RESPECT OF THE KHASA DIST ILLERY UNIT W.E.F 01-04-2006 WHICH STOOD DEMERGED FROM THE ASSESSEE COMPANY TO THE TRANSFEREE COMPANY M/S DIGVIJAY CHEMICAL LTD AND WHICH MOU WAS APPROVED BY THE HONBLE DELHI HIGH COURT VIDE ORDER DATED 17-12 - 2007. THEREFORE THE APPELLANT HAD TRANSFERRED THE L EASE RENT OF RS.65,11,730/- FOR FIVE MONTHS RECEIVED FRO M M/S GURSIMRAN DISTILLERY P LTD TO THE TRANSFEREE KHASA DISTILLERY CO (PROP. DIGVIJAY CHEMICAL LTD) ON 30-0 9-2007 AND THEREFORE NO ADDITION IN RESPECT OF THIS SUM OF RS 65,11,730/- COULD BE MADE IN THE HANDS OF THE APPEL LANT. THE ADDITION OF RS 65,11,730/- IS THEREFORE DELETED . 4. THE REVENUE DEPARTMENT IS IN APPEAL BEFORE US AGAINST THE ORDER PASSED BY THE LD. CIT(A) ON FOLLOWING GROUNDS. ITA NO.779 /ASR/2017 (A.Y.2008-09) ITO VS. BHAGAT INDUSTRIES CO RP. LTD. 7 I) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS BY DELETING THE WHOLE ADDITION OF RS.65,11,370/- BY WRONGLY ACCEPTING THE VERSION OF THE ASSESSEE DURING THE APPELLATE PROCEEDINGS. II) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS B Y IGNORING THE FACT THAT THE AMOUNT OF RS. 65,11,370/- (I.E. RS. 2,03,9 8,065 - RS. 1,38,86,335/-) RECEIVED BY THE ASSESSEE COMPANY FRO M M/S GURSIMARAN DISTILLERIES PVT. LTD REMAINED UNEXPLAIN ED AND UNDISCLOSED AND THE SAME IS ALSO NOT BROUGHT UNDER TAXATION BY ASSESSEE, SINCE THE ASSESSEE COMPANY NEITHER REFLEC TED ANY BUSINESS DEALING WITH M/S GURSIMARAN DISTILLERIES P VT. LTD NOR PRODUCED ANY SALE/PURCHASE BILLS/VOUCHERS WHICH PRO VES THE BUSINESS TRANSACTION OF THE ASSESSEE COMPANY WITH M /S GURSIMARAN DISTILLERIES PVT. LTD. III) THE LD. CIT(A)-2, AMRITSAR ERRED ON IGNORING THE IMPLEMENTATION OF SEC. 69A OF THE INCOME TAX ACT, 1961 IN THE INSTANT CASE. IV) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS BY I GNORING THE FACT THE ASSESSEE FAILED TO FULFILL THE CRITERIA OF PRI NCIPLE OF ONUS TO PROVE DURING THE ASSESSMENT PROCEEDINGS, SINCE THE ASSES SEE FAILED TO PROVE THE GENUINENESS OF THE BUSINESS DEA LING WITH THE M/S GURSIMARAN DISTILLERIES PVT. LTD. 5. HAVING HEARD THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. CIT(A) WHILE PASSING THE ORDER OBSERVED THAT THE APPELLANT HAD RECEIVED THE AMOUNT O F RS.2,03,98,065/- FROM M/S. GURSIMRAN DISTILLEREIS PVT. L TD. DURING THE YEAR AND RETURNED BACK RS.1,38,86,335/- TO THE SAID COMPANY DURING THE YEAR UNDER CONSIDERATION ITSELF AND RETAINED ONLY AMOUNT OF DIFFERENCE I.E. RS.65,11,730/- ON ACCOUN T OF LEASE RENT NET OF TDS OF THE KHASA DISTILLERIES UNIT. THE GR OSS LEASE RENT RECEIVED BY THE APPELLANT FROM THE SAID COMPANY D URING THE YEAR FOR A PERIOD OF FIVE MONTHS WAS RS.83,75,000/- AS PER LEASE DEED DATED 30/10/2006 QUA KHASA DISTILLERIES UNIT OF T HE APPELLANT COMPANY. IT WAS LEASED OUT VIDE LEASE DATED 30/10/2006 AND AFTER DEDUCTING THE TDS THEREON, THE NET AMOUNT OF LEASE RENT OF RS.65,11,730/- WAS TRANSFERRED BY THE ASSESSEE TO KHASA DISTILLERIES COMPANY (PROPRIETOR M/S DIGV IJAY ITA NO.779 /ASR/2017 (A.Y.2008-09) ITO VS. BHAGAT INDUSTRIES CO RP. LTD. 8 CHEMICALS LTD.) THE TRANSFEREE COMPANY AS PER MOU DATE D 18/05/2006 BETWEEN THE ASSESSEE AND BAGGA MILLENIUM LIQ UOR INDIAN PVT. LTD. ON 30/09/2007 AS EVIDENT FROM THE CO NFIRMATION OF THE COPY OF ACCOUNT OF KHASA DISTILLERY IN THE BOOKS OF THE ASSESSEE FOR THE F.Y.2007-08. IT WAS ALSO CONSIDERED BY TH E LD. CIT(A) THAT AFTER EXECUTION OF THE SAID MOU DATED 18 /05/2006 THE DEMERGER OF KHASA DISTILLERY UNIT WAS ALLOWED IN D IGVIJAY CHEMICALS LTD. VIDE ORDER DATED 17/12/2007 BY THE HON BLE DELHI HIGH COURT AND DEMERGER WAS EFFECTIVE FROM 1 ST APRIL, 2006 AND THE HONBLE COURT EXPRESSLY STATED THAT DEMERGER WAS COV ERED U/S 2(19AA) OF THE ACT. ON CONSIDERING THE MATERIAL FAC TS AND CIRCUMSTANCES TO THE EFFECT THAT IN VIEW OF THE AFORESAID MOU DATED 18/05/2006 THE ASSESSEE WAS NOT ENTITLED TO RETAIN THE LEASE RENT OF RS.65,11,730/- QUA KHASA DISTILLERY UNIT WITH EFFECT FROM 1 ST APRIL, 2006 WHICH DEMERGED TO M/S DIGVIJAY CHEMCIALS LTD. AS PER HIGH COURT ORDER THEREFORE, THE ASSESSEE HAD TRANSFERRED THE SAID AMOUNT. THE SAID LEASE RENT RECEIVE D FROM GURSIMRAN DISTILLERY UNIT PVT. LTD. , WAS TRANSFERRED T O THE TRANSFEREE COMPANY I.E. KHASA DISTILLERY COMPANY ON 30/09/2007 AND THEREFORE, ULTIMATELY THE LD. CIT(A) HELD THAT NO ADDITION IN RESPECT OF AMOUNT OF RS.65,11,730/- COULD B E MADE IN THE HANDS OF THE ASSESSEE AND THEREFORE, THE SAID ADDI TION IS DELETED. IN OUR CONSIDERED OPINION, THE LD. CIT(A) WHILE DELET ING THE ADDITION NOT ONLY TAKEN INTO CONSIDERATION THE MO U DATED 18/05/2006 WHICH RESULTED INTO DEMERGER AND THE APPRO VAL BY THE HONBLE DELHI HIGH COURT VIDE ITS ORDER DATED 17/1 2/2007 BUT ALSO TAKEN INTO CONSIDERATION THE PECULIAR FACTS AND CIRCUMSTANCES INCLUDING DEMERGER ORDER DATED 17/12/2007 A ND ITA NO.779 /ASR/2017 (A.Y.2008-09) ITO VS. BHAGAT INDUSTRIES CO RP. LTD. 9 THE TRANSACTION CARRIED ON THE BASIS OF MOU REFERRED ABO VE AND THE DEMERGER ORDER. AS IT IS A FACT THAT W.E.F. 01/04 /2006 KHASA DISTILLERY COMPANY HAS BEEN DEMERGED IN THE TRANSFEREE COMPANY I.E., M/S DIGVIJAY CHEMICALS LTD. VIDE MOU DAT ED 18/05/2006 WHICH SUBSEQUENTLY GOT APPROVAL OF THE HONB LE DELHI HIGH COURT AND THE ASSESSEE TRANSFERRED THE LEASE R ENT UNDER DISPUTE TO THE TRANSFEREE COMPANY ON DATED 30/09 /2007 AND THEREFORE NO ADDITION IS CALLED FOR. EVEN OTHERWI SE THE REVENUE DEPARTMENT FAILED TO BRING ON RECORD ANY MAT ERIAL CONTRARY IF ANY, AGAINST THE ORDER IMPUGNED HENCE, WE DO NOT HAVE ANY HESITATION TO HOLD THAT THE ORDER UNDER CHAL LENGE DOES NOT SUFFER FROM ANY PERVERSITY, ILLEGALITY AND/OR IMP ROPRIETY, THUS DOES NOT REQUIRE ANY INTERFERENCE BY THIS COURT. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE DEPA RTMENT STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.07.2019. SD/- SD/- ( VIKRAM SINGH YADAV ) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICI AL MEMBER DATED: 22.07.2019 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) M/S. BHAGAT INDUSTRIAL CORP. LTD., VPO KHASA, AMRITSAR (2) THE INCOME TAX OFFICER, WARD-5(1), AMRITSR (3) THE CIT(A)-2, AMRITSAR (4) THE CIT CONCERNED (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER