The DCIT, Circle-4, Ahmedabad V. JMC Projects (India)Ltd., Ahmedabad

ITA 86/AHD/2008

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 101335 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-06-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 03-01-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K MADHUSUDAN
• Assessee Lawyers: M K PATEL
• Keywords: Gift; Business income; Business expenditure
• Section: 37; 143(3)

Judgement Text

ITA NO S . 86/AHD/2008 & 2566/ AHD/20 09 A.Y. 200 5 - 06 & 2006 - 07 PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH, AHMEDABAD BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO S . 86/AHD/2008 & 2566/AHD/2009 ASSESSMENT YEAR S : 20 0 5 - 06 & 2006 - 07 D.C.I.T., CIRCLE - 4 , AHMEDAB AD/ VS. JMC PROJECTS (INDIA) LIMITED , A.C.I.T. (OSD) - 1, 104, SHAPATH - 4, RANGE - 4, AHMEDABAD. OPP. KARNAVATI CLUB, S.G. ROAD, AHMEDABAD 380 054. [PAN A A ACJ 3814 E ] (APPELLANT ) (RESPONDENT) A PPELLANT BY : S HRI K. MADHUSU DAN , SR. D.R. RE SPONDENT BY : S HRI M.K. PATEL, A.R. DATE OF HEARING : 2 0 .0 6 . 20 16 DATE OF PRONOUNCEMENT : 08 . 0 9 .2016 O R D E R PER S.S. GODARA , J.M. TH ESE APPEALS BY REVENUE FOR A SSESSMENT Y EAR S 200 5 - 06 & 2006 - 07 , ARISE FROM TWO SEPARATE ORDER S OF THE CIT(A) - VIII , AHMEDABAD DATED 03.10.2007 & 04.05.2009 , PASSED IN CASE NO.C IT(A) - VIII/DC.4/6/07 - 08 & C IT(A) - VIII/DC.4/ 32/08 - 09 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. W E COME TO R EV ENUE S PLEADINGS FIRST IN TH E TWO INSTANT APP E ALS. IT RAISES AS MANY SUB STANTIVE GROUND IN ITA NO. 86/AHD/2008 PER T AINING TO THE FORMER ASSESSMENT YEAR 2005 - 06. ITS FIRST SUB STANTIVE GROUND SEEKS TO RESTORE DISALLOWANCE OF GIFT, BONI & CHANDLA EXPENSES OF RS.2,17,622/ - MADE BY THE A SSESSING OFFICER AND DELETED IN T H E LOWER APPELLATE ORDER. ITS LATTER SUB STANTIVE GROUND ASSAI LS COR R ECTNESS OF THE LOWER APPELLATE ORDER DELETING DISALLOWANCE OF DEFEC T LIABILITY PROVISION AMOUNTING TO RS.2,37,99,162/ - . IT AP PEARS FROM REVENUE S LATTER APPEAL I T A NO. 2566/AHD/2009 FOR ASSESSMENT YEAR 2006 - ITA NO S . 86/AHD/2008 & 2566/ AHD/20 09 A.Y. 200 5 - 06 & 2006 - 07 PAGE 2 OF 7 07 THAT ITS SOLE SUB STANTIVE GRIEVANCE IS IDENTICAL TO LATTER GROUND HEREINABOVE SINCE THE ONLY DISTINCTION IS THAT OF TH E CORRESPONDING DISALLOWANCE FIGURE OF DEFECT LIABILIT Y PROVISION OF RS.1,12,31, 4 04/ - . THERE IS NO DISPUTE THAT RELEVANT FACTS QUA THE LATTER ISSUE OF DE F ECT LIABIL ITY PROVISION ARE IDENTICAL IN BOTH THE IMPUGNED ASSESSMENT YEAR . WE ACCORDINGLY TR E AT ASSESSMENT YEAR 2005 - 06 INVOLVING ITA NO. 86/AHD/2008 AS T HE LEAD ASSESSMENT YEAR. 3. WE COME TO THE FORMER ISSUE OF GIFT, BONY AND CHANDLA EXPENS E S OF RS.2,17,622/ - . THIS ASSESSEE IS A COMPANY EN G AG E D IN CONSTRUCTION BUSINESS. IT CLAIMED TOTAL EXPENDITURE OF RS.4,35,244/ - AS SPENT ON GIFTS , BONI AND CHANDLA E XPENSES. IT INTER ALIA PLEADED THAT THE SAME WERE INCURRED AS PER BUSINESS CUSTOMS AND TRADITIONS FOLLOWED IN MULTIPLE STATES HAVING A NUMBER OF SITES, QUOTED N ECESSARY VOUCHERS AND DOCUMENTS , TERMED THE SAME AS GENUINE AND EXPRESSED ITS WILLINGNESS TO LEAD ALL NECESSARY EVIDENCE FOR VERIFICATION . THE A SSESSING OFFICER IN A SS ESSMENT O RDER DATED 22.03.2007 DISALLOWED THE SUM IN QUESTION OF RS.2,17,622/ - @ 50% OF THE GROSS SUM BY OBSERVING THAT NEITHER THER E WAS ANY EV IDENCE AVAILABLE FOR VERIFICATION NOR THE ASSESSEE HAD PRODUCED THE RELEVANT EVIDENCE. 4. THE ASSESSEE PREFERRED APPEAL. THE CIT(A) DELETES THE IMPUGNED DISALLOWANCE. H E OBSERVES THAT THESE EXPENSES ARE GEN UINELY INCUR RED FOR THE PURPOSE OF THE BUSINESS HAVING TURNOVER OF 237 CRORES FROM VARIOUS CONSTRUCTION PROJEC T S ON MULTIPLE SITES. HE GOES ON TO HOLD THAT ALL THESE EXPENSES HAVE BEEN PAID BY ACCOUNT PAYEE CHEQUES. T H IS RESULTS IN THE R EVENUE BEING AG G RI E VED AGAINST THE LOW E R APPELLATE ORDER. 5. WE HAVE HEARD RIVAL CONTENTIONS. BOT H THE L EARNED REPRESENTATIVES REITERATE THEIR RESPECTIVE S T ANDS IN SUPPORT OF AND AGAINST THE IMPUGN ED DISALLOWANCES. THE R EVENUE FAILS TO PLACE ON RECORD ANY MATERIAL BEFORE US REBUTTING CIT ( A ) S FINDIN G S AS ABOVE THAT THE ASSESSEE HAS ALR E ADY F I LED ALL NECESSARY DET A ILS AND EVIDENCES ALONG WITH PROOF OF ITA NO S . 86/AHD/2008 & 2566/ AHD/20 09 A.Y. 200 5 - 06 & 2006 - 07 PAGE 3 OF 7 PAYMENT. T HERE CAN HARDLY BE ANY DOU B T THAT THIS ASSESSEE IS CARRYING OUT HIS MULTIPLE CONSTRUCTION PROJEC T S WHEREIN SUCH EXPENSES ARE UNDERTAKEN ON AUSPICIOUS OCCASION OF COMMENCEMENT OF CONSTRUCTION AC TIVITY ETC. WE FIND NO REASON TO INTERFERE WITH CIT (A) S FINDING UNDER CHALLENGE. T HIS FI R ST SUB STANTIVE GROUND IS DECLINED. 6. W E COME TO THE LATTER ISSUE OF DEFECT LIABILITY PROVISIONS AMOUNTING TO RS.2,37,99,162/ - . THE A SSESSING OFFICER CAME ACROSS T HE SAME AS CLAIMED AS A PROVISION IN P ROFIT & L OSS ACCOUNT. THE ASSESSEE IN SUPPORT OF ITS UNIQUE CONSTRUCTION BUS I NESS INVOLVING TENDERS, RIVAL BIDS, AND VARIETY OF CONSTRUCTION MATERIAL FOLLOWED BY EXECUTION AND DEFECT CLAUSES IMPOSED IN TH E RELEVANT AG REEMENTS PROJECT - WISE/STEPWISE. IT PLACED ON RECORD THREE AGREEMENTS WITH M/S. ASIAN P AINTS, SIERA ATLANTIC AND P RESTIGE E STATES PROJECTS IN TAM I L NADU, HYDERABAD & BANGA L ORE RESPECTIVELY SE T TING OUT CONDITIONS OF DEFECT LIABILITY . T HE ASS ESSEE FU R THER C LARIF IES ITS REVENUE REORGANISATION M ETHOD . T HE FIRST ONE WAS IN RESPECT TO CONSTRUCTION CONTRACT INVOLVING RUNNING ACCOUNT BILLS PREPARED ON PERCENTAGE COMPLETION METHOD I.E. INCOME IN CASE OF CLAIMS RECOGNISED TO THE EXTENT IT EXPECTED THE SAME WITH REA SONABLE CERTAINTY . L ATTER METHOD WAS IN RESPECT TO OTHER INCOME RECOGNISED WHEN THER E WAS NO SIGNIFICANT UNCERTAINTY . THE ASSESSEE STATED THAT IT WAS CONTRACTUALLY BARRED BY AGREEMENT CLAUSES TO REMOVE DEFECTS IN QUALITY AND WORKMANSHIP PERIOD VARYING BE TWEEN 12 TO 18 MONTHS QUA OTHER INCOME METHOD. IT SUBM IT TED TO HAVE PROVIDED NECES SA RY SECURITY TO CLIENTS IN THE FORM OF BANK GUARANTEE OR CASH RETENTION TILL THE DEFECT PERIOD LASTED. THE ASS ESSEE EXPLAINED THAT IT HAD STAR T ED MAKING PROVISION IN THE I MPUGNED ASSESSMENT YEAR ONLY AS A CHANGE FROM ACTUAL PAYMENT SYSTEM FOLLOWED IN THE PAST. IT STARTED CREDITING THE PROVISION IN P ROFIT & LOSS ACCOUNT AFTER DISCLOSING DEFECT LIABILITY PERIOD SUB JECT TO THE CONDITION THAT ITS CLIENTS CERTIFIED THE BILLS, D EFEC T LIABILITY WAS OVER, PERFORMANCE GUAR A N T EE STOOD RETURNED AND ALL AMOUNTS WERE RELEASED BY THE CLIENTS . THE ASS ESSEE S FURTHER CASE WAS THAT THE ITA NO S . 86/AHD/2008 & 2566/ AHD/20 09 A.Y. 200 5 - 06 & 2006 - 07 PAGE 4 OF 7 IMPUGNE D PROVISION HAS BEEN MADE ON THE BASIS OF PAST EXPERIENCE IN BOOKS. THE A SSESSING OFFICER DID NOT AGREE TO THE SAME FOR THE RE A SON THAT NEITHER THE ASSE SSEE S PROVISION FOR THE IMPUGNED DEFECT LIABILITY WAS FOR ANY ASCERTAINED LIABILITY NOR THE SAME HAD BEEN RAISED ON PAST EXPERIENCE OF SHORT FALL/SURPLUSES. HE ACCORDINGLY DISALLOWED THE SUM IN QUEST ION OF RS.2,37,99,162/ - IN QUESTION. 7. THE C IT ( A ) DELETES THE DEFECT LIABILITY PROVISION DISALLOWANCE IN QUESTION AS UNDER: - 4.2 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE A.R. AND THE FACTS OF THE CASE AND THE JUDICIAL DECISIONS CITED BY THE A UTHORISED REPRESENTATIVE . AS PER TH E IMPORTANT TERMS OF THE CONTRACT, DEFECT LIABILITY PERIOD HAS BEEN DEFINED AS 12 TO 18 MONTHS FROM THE DATE OF COMPLETION OR HANDING OVER OF THE PROJECTS. THE DEFECT LIABILITY CLAUSE CAN BE SEEN FROM THE SPECIMEN COPIES OF 3 AGREEMENTS FILED BY THE A.R - THE APPELLANT HAS MADE PROVISION FOR THE FIRST TIME IN THIS YEAR. THE PROVISION HAS BEEN MADE @ 1% OF THE TURNOVER. IN THE DECISION OF BANGALORE BENCH OF ITAT IN THE CASE OF IBM INDIA LTD., VS. CIT REPORTED IN 290 ITR 18 3 (AT) (BANG) IT HAS BEEN HELD THAT THOUGH THE EXACT AMOUNT OF WARRANTY CAN NOT BE QUANTIFIED HOWEVER, THE SUM IS BASED ON SCIENTIFIC APPROACH AND BASED ON PAST EXPERIENCE. AND ACCORDINGLY, THE TRIBUNAL HAD ALLOWED THE PROVISION MADE FOR WARRANTY LIABILITY IN THAT CASE. I N THE CASE OF THE APPELLANT, THE APPELLANT HAS MADE THE PROVISION @ 1% OF TURNOVER ON THE BASIS OF PAST EXPERIENCE . IN FACT IN A.Y.2004 - 05, THE LIABILITY OF LIQUIDATED DAMAGES, CONTRACTUAL DISPUTES AND DEDUCTION FROM BILLS FOR QUALITY PROBL EMS WAS OF RS.1,42,59,382/ - ON A TURNOVER OF RS.183.69 CRORES WHICH COMES TO AROUND 0.78% OF THE TURNOVER , AND IN A.Y.2005 - 06 THE ACTUAL SUCH EXPENSES WERE OF RS.2,91,56,250 / - ON A TURNOVER OF RS.237.99 CRORES WHICH COMES TO 1.23% AS PER THE DETAILS SUBMIT TED BY THE A.R. AT PAGES 18 TO 23 OF THE PAPER BOOK. THE PROVISION MADE AT 1% OF THE TURNOVER IS REASONABLE AND HAS BEEN MADE ON A SCIENTIFIC BASIS AND THEREFORE, THE SAME IS HELD ALLOWABLE. 4.3 THE FACTS OF THE APPELLANT'S CASE ARE SIMILAR TO THAT IN TH E CASE OF C.I.T. V. VINITEC CORPORATION PVT. LTD. (278 ITR 337) (DELHI). AS IN THAT CASE HERE ALSO THE APPELLANT HAD MADE CHANGES TO ITS ACCOUNTING SYSTEM TO INCLUDE THE PROVISION MADE BY IT IN EACH YEAR FOR FUTURE LIABILITY TO CUSTOMERS UNDER THE WARRANT Y CLAUSE. IN THAT CASE THE A.O. HAD DISALLOWED THE CLAIM. THE TRIBUNAL ACCEPTED THE ASSESSEE'S CLAIM, HOLDING THAT THE LIABILITY WAS DEFINITE AND CERTAIN, THE QUANTIFICATION ALONE BEING BASED ON ESTIMATE, AND OBSERVING THAT FROM THE DATA FURNISHED BY THE A SSESSEE FOR PAST YEARS OF THE PERCENTAGE OF WARRANTY EXPENSES, THE ASSESSEE'S ESTIMATED LIABILITY OF TWO PER CENT IN RELATION TO THE SALE WAS ACCEPTABLE AND NOT ARBITRARY. ON APPEAL BY THE REVENUE, THE HON'BLE COURT HELD AFFIRMING THE DECISION OF THE TRIBU NAL, THAT THE WARRANTY CLAUSE 'AS PART OF THE SALE DOCUMENT AND IMPOSED A LIABILITY UPON THE ASSESSEE TO DISCHARGE ITS OBLIGATION UNDER THAT CLAUSE FOR THE PERIOD OF WARRANTY. IT WAS A LIABILITY, WHICH WAS CAPABLE OF BEING CONSTRUED IN DEFINITE TERMS, WHIC H HAD ARISEN IN THE ACCOUNTING YE AR ALTHOUGH ITS ACTUAL QUANTIFICATION AND DISCHARGE MIGHT BE DEFERRED TO A FUTURE DATE. ONCE THE ASSESSEE IS MAINTAINING HIS ACCOUNTS ON THE MERCANTILE SYSTEM, A LIABILITY ACCRUED, THOUGH TO BE DISCHARGED AT A FUTURE DATE, WOULD BE A PROPER DEDUCTION WHILE ITA NO S . 86/AHD/2008 & 2566/ AHD/20 09 A.Y. 200 5 - 06 & 2006 - 07 PAGE 5 OF 7 WORKING OUT THE PROFITS AND GAINS OF HIS BUSINESS, REGARD BEING HAD TO THE ACCEPTED PRINCIPLES OF COMMERCIAL PRACTICE AND ACCOUNTANCY. TO SUBSTANTIATE ITS CLAIM FOR THE ASSESSMENT YEAR 2000 - 01, THE ASSESSEE HAD GIVEN THE F IGURES OF THE LAST FIVE YEARS OF WARRANTY LIABILITY PROVIDED VIS - A - VIS THE EXPENDITURE INCURRED. THESE FIGURES CLEARLY EXHIBITED THAT THE ASSESSEE HAD INCURRED EXPENDITURE RESULTING FROM THE WARRANTY CLAUSE TO THE EXTENT OF MORE THAT 2 PERCENT OF ITS TOTAL SALES IN THE PREVIOUS YEAR. THERE WAS DIRECT NEXUS BETWEEN THE CLAIM OF THE ASSESSEE AND ITS OBLIGATION ARISING FROM THE WARRANTY. THERE WAS NOTHING ON RECORD WHICH COULD SUGGEST THAT THE CHANGE IN ACCOUNTANCY WAS MOTIVATED OR WAS IMPROPER OR THAT THE PRO VISION MADE IN THE ACCOUNTING YEAR AND DEDUCTION CLAIMED AS BUSINESS EXPENDITURE' WAS UNDULY EXCESSIVE AND WAS INTENDED TO EVADE TAXATION. HERE ALSO THERE IS NOTHING TO SHOW THAT THE CHANGE IN METHOD OF ACCOUNTING WAS MOTIVATED AND THERE IS DIRECT NEXUS BE TWEEN THE CLAIM OF THE APPELLANT A ND ITS OBLIGATION ARISING FROM WARRANTY. 4.4 EVEN OTHERWISE AS THE APPELLANT HAS ACCUMULATED LOSS OF RS.16.50 CRORES AS ON 31 - 3 - 05 AND HAS GOT TOTAL CARRIED FORWARD LOSS OF RS.25.59 C RORES AT THE END OF A.Y.2006 - 07 , NO M OTIVE OF REDUCTION TAX LIABILITY CAN BE ASSIGNED TO THE APPELLANT FOR THE ABOVE CHANGE IN THE METHOD OF ACCOUNTING OF PROVISION FOR LIABILITY. THE APPELLANT HAS NO TAX LIABILITY EVEN HI THE SUBSEQUENT YEAR . 4.5 ON CONSIDERATION OF THE FACTS O F THE CASE A ND RELYING ON THE RATIO OF DECISIONS CITED BY THE ID. A.R. I AM OF THE VIEW THAT THE DISALLOWANCE OF PROVISION OF WARRANTY LIABILITY OR DEFECT LIABILITY MADE BY THE A. O. IS NOT PROPER AND JUSTIFIED , SPECIALTY WHEN THE LIABILITY HAS BEEN MADE ON A REASONABL E AND SCIENTIFIC BASIS . HENCE THE DISALLOWANCE IS DELETED. 8. L EARNED DEPARTMENTAL REPRESENTATIVE STRONGLY REITERATES A SSESSING OFFICER S FINDINGS INVOKING THE DISALLOWANCE IN QUESTION PERTAINING TO DEFECT LIABILITY PROVISION. HE HIGHLIGHTS THE FACT THA T THE ASS ESSEE HAD CHANGE D HIS METHOD OF ACCOUNTING IN T H E IMPUGNED ASSESSMENT YEAR ONLY SINCE EARLIER IT FOLLOWED ACTUAL PAYMENT SYSTEM. THERE IS NO DISPUTE THAT ASS ESSEE HAS MADE THE IMPUGNED PROVISION TO ENSURE COMPLIANCE OF ACCOUNTING STANDARD - 7. THE R EVENUE THEREAFTER COMPARES FIGURES OF SUCCEE DING ASSESSMENT YEAR 2 006 - 07 INVO LVING ACTUAL DEFECT LIABILITY DISA LLOWANCE OF RS.27,02,848/ - AGAINST THE IMPUGNED PROVISION OF 2.37 CRORES I.E. MUCH LESS THAN THE PROVISION. IT STRONGLY ARGUES THAT PRECEDING ASSESSMENT YEAR DID NOT INVOLVE SUCH DEFECT LIABILITY PROVIS I ON CLAUSES SINCE THE EXACT E XPRESSION THEREIN WERE LIQUIDAT E D DAMAGES/CONTRACTUAL DISPUT E S/QUALITY PROBLEMS. THE R EVENUE SEEKS ACCEPTANCE OF ITS INSTANT SUB STANTIVE GROUND ACCORDINGLY. ITA NO S . 86/AHD/2008 & 2566/ AHD/20 09 A.Y. 200 5 - 06 & 2006 - 07 PAGE 6 OF 7 9. THE ASSESS E E DRAWS SUPPORT FROM THE CIT ( A ) S FINDING UNDER CHALLENGE. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE CASE FILE. THERE IS NO DISPUTE THAT HON BLE APEX COURT IN CASE OF ROTORK CONTROLS INDIA PVT . LTD . VS. CIT (2009) 314 ITR 62 (SC) SE TTLE THE LAW REGARDING SUCH A LIABILITY PROVISION. THEIR LORDSHIPS HOLD THAT THE SAME IS ALLOWABLE UNDER SECTION 37 OF THE ACT PROVIDED THIS ESTIMATION IS AS PER NATURE OF THE BUSINESS, SALES, PRODUCT MANUFACTURED/SOLD AS FOLLOWED BY A SCIENTIFIC METHOD OF ACCOUNTING BEING ADOPTED. WE PROCEED TO DEAL WITH TH E INS T ANT ISSUE KEEPING IN MIND THESE VITAL PARAMETERS. T HE FACTUAL POSITION IS VERY MUCH ADMITTED THAT THE ASS ESSEE COMPANY HAS TO KEEP A PORTION OF IT S CONTRACTUAL MONEY WITH ITS CLIENTS FOR SUFFIC IENTLY LONG PERIOD RANGING BETWEEN 12 TO 18 MONTHS IN THE FORM OF CASH RETENTION OR BANK GUARANTEE. THE SAME IS RELEASED ONLY AFTER THIS DEFECT CLAUSE PERIOD IS OVER WITHOUT INVOLVING ANY CORRESPONDING REPAIR WORK. WE NOTICE THAT EVEN THE A SSESSING OFFIC ER IS FAIR ENOUGH IN NOT DISPUTING THIS FACTUAL POSITION. HE REJECTS ASS ESSEE S CLAIM ON TWO COUNTS. THE FI R ST ONE IS T HAT THE ASS ESSEE H A S NOT MADE PROVISION FOR ANY ASCERTAINED LIABILITY. W E FIND FROM PAG E NOS. 35 TO 37 OF THE PAPER BOOK ALONG WITH THE CORRESPONDING AGREEMENT THAT THE ASS ESSEE S COMPUTATION OF PROVISION OF DEFECT LIABILITY IS COMPUTED AS PER THE SPECIFIC LOGIC THEREIN. CASH RETENTION BY ITS CLIENTS IS BETWEEN 5 TO 10 %. THE ASS ESSEE HAS MADE THE IMPUGNED PROVISION @ 1% BY FOLLOWING THE ABOVE STATED COMPUTATION. L EARNED DEPARTMENTAL REPRESENTATIVE FAILS TO DISPUTE COR R ECTNESS T HEREOF IN THE C OURSE OF HEARING. WE ARE OF THE OPINION IN THESE FAC T S AND CIR CUMSTANCES THAT THE ASS ESSEE HAS SATISFIED BOTH THE A SSESSING OFFICER S OBJECTIONS S O AS TO SUPPORT THE LOWER APP ELLATE FINDINGS UNDER CHALLENGE. THE CI T(A) HAS ALREADY SET OUT THE COR R ESPONDIN G FIGUR E FORMING THE BASIS OF ESTIMATION. THE R EVENUE S LAST ARGUMENT THAT PRECEDING ASSESSMENT YEARS INVOLVED DIFFERENT LIABILITIES IS ALSO DEVO ID OF MERI T S SINCE IT IS ONLY A DIFFERENCE OF NOMENCLATURE VIS - A - VIS THE NAMING OF THE LIABILITY HEAD IN THE IMPUGNED ASSESSMENT YEAR. ITA NO S . 86/AHD/2008 & 2566/ AHD/20 09 A.Y. 200 5 - 06 & 2006 - 07 PAGE 7 OF 7 WE REJECT R EVENUE S SECOND SUB STANTIVE G ROUND AS WELL. THE CIT(A) S FINDING EXTRACTED HEREINABOVE STAND S CONFIRMED. 11. R EVENUE S APPEAL ITA NO. 86/AHD/2008 FAILS. 12. WE COME TO LAT T ER ASSESSMENT YEAR 2006 - 07 INVOLVING R EVENUE S ITA NO. 2566AHD/2009 RAISING THE SOLE SUB STANTIVE ISSUE OF DEF E CT LIABILITY PROVISIO N AMOUNTING TO RS.1,12,31,404/ - . 13. BOTH THE PARTIES FAIRLY STATE THAT OUR ADJUDICATION HEREINABOVE ON TH E VERY ISSUE IN FORMER ASSESSMENT YEAR SQUARELY COVERS THE SAME. WE APPRECIATE THIS FAIR STAND. THIS APPEAL ALSO MEETS THE SAME FATE. 14. THESE TWO R EVENUE S APPEAL S ARE DISMISSED. P RONOUNCED IN THE OPEN CO URT TODAY ON THE 8 TH DAY OF SEPTEMBER, 2016. SD/ - SD/ - MANISH BORAD S.S. GODARA (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, THE 8 TH DAY OF SEPTEMBER , 2016 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD