VENUS DETECTIVE & SECURITY SERVICES P.LTD, MUMBAI V. ITO 2(3)(4), MUMBAI

ITA 879/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3416 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 30-12-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 07-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M V RAJGURU
• Keywords: Period of limitation; Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI BEFORE SHRI JASON P. BOAZ (AM) AND SHRI SANDEEP GOS AIN (JM) ITA NO. 879/MUM/2014 ASSESSMENT YEAR: 2007-08 M/S. VENUS DETECTIVE & SECURITY SERVICES PVT. LTD. 16, POLICE COURT LANE, FORT, MUMBAI- 400 001. PAN : AABCV1733B VS. THE ITO - 2 (3 ) (4), ROOM NO. 555, 5 TH FLOOR, AAYKAR BHAVAN, M.K.ROAD, MUMBAI- 400020. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. NITESH JOSHI RESPONDENT BY : SHRI. M.V. RAJGURU DATE OF HEARING: 10/08 /2016 DATE OF PRONOUNCEMENT: 19/08/201 6 O R D E R PER JASON P. BOAZ, AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINS T THE ORDER OF THE CIT(APPEALS)- 6, MUMBAI DT. 29/10/2013 FOR ASST. YEAR 2007-08. 2. THE FACTS OF THE CASE AS EMANATE FROM THE RECOR D, BRIEFLY, ARE AS UNDER:- 2.1 THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR ASST. YEAR 2007-08 ON 31/10/2007 DECLARING TOTAL INCOME OF RS. 2,77,566/- THE RETURN WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (IN SHORT T HE ACT) AND THE CASE WAS SUBSEQUENTLY TAKEN UP FOR SCRUTINY . THE ASSESSMEN T WAS COMPLETED U/S 143(3) OF THE ACT VIDE ORDER DT. 30/12/2009, WHEREIN THE A SSESSEES INCOME WAS DETERMINED AT RS. 60,05,730/- IN VIEW OF THE FOLLOW ING ADDITIONS/DISALLOWANCES:- 2 ITA NO. 879/MUM/2014 ASSESSMENT YEAR: 2007-08 (I) DISALLOWANCE U/S 40(A)(IA) - RS. 5,27,067/- (II) ADDITION U/S 41(1) - RS. 50,33,230/- (III) DISALLOWANCE OF BUSINESS PROMOTION EXPENSES - RS. 25,635/- (IV) DISALLOWANCE OUT OF MISC. EXPENSES - RS. 1,42,230/- 2.2 AGGRIEVED BY THE ORDER OF ASSESSMENT FOR ASST. YEAR 2007-08 DT. 31/12/2009, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(APP EALS)-6, MUMBAI. THE LD. CIT(A) DISPOSAL OFF THE ASSESSEES APPEAL VIDE THE IMPUGNED ORDER DT. 29/10/2013 ALLOWING THE ASSESSEE PARTIAL RELIEF. IN THE IMPUGN ED ORDER, THE LD. CIT(A)- (I) DELETED THE DISALLOWANCE U/S 40(A)(IA) OF THE A CT AMOUNTING TO RS. 5,27,067/-; (II) THE ADDITION U/S 41(1) OF THE ACT WAS SUSTAINE D TO THE EXTENT OF RS. 10,38,403/- (III) HE UPHELD THE DISALLOWANCE OF RS. 25,635/-, B EING 10% OF BUSINESS PROMOTION EXPENSES CLAIMED; AND (IV) UPHELD THE DISALLOWANCE OF RS. 1,42,230/-, B EING 10% OF MISC. EXPENDITURE CLAIMED. 3. AGGRIEVED, BY THE ORDER OF THE CIT(APPEALS)-6 MU MBAI DT. 29/10/2013 FOR ASST. YEAR 2007-08, THE ASSESSEE HAS PREFERRED THIS APPEA L RAISING THE FOLLOWING GROUNDS :- 1. THE CIT(A) ERRED IN UPHOLDING THE ADDITION IN RE SPECT OF SUNDRY CREDITORS OF RS. 10,38,403/- WHICH WAS MADE BY THE AO BY INVOKING THE PROVISIONS OF SECTION 41(1) OF THE ACT. 2. THE CIT(A) ERRED IN UPHOLDING THE ADHOC DISALLOW ANCE AS MADE BY THE AO OF RS. 25,635/- OUT OF BUSINESS PROMOTION EX PENSES AND RS. 1,42,230/- OUT OF REPAIRS & MAINTENANCE, SECURITY M AINTENANCE, COMPUTER AND MOBILE EXPENSES, PETROL AND TELEPHONE EXPENSES. 3 ITA NO. 879/MUM/2014 ASSESSMENT YEAR: 2007-08 3. THE APPELLANT CRAVES LEAVE TO ADD, TO AMEND OR T O ALTER ANY OF THE ABOVE GROUNDS OF APPEAL. 4. THE GROUND AT SR. NO. 3 BEING GENERAL IN NATURE, AND NOT BEING URGED BEFOR E US IS DISMISSED AS INFRUCTUOUS. 5. GROUND NO. 2 :- DISALLOWANCE OUT OF BUSINESS PROMOTION AND MISC. EXPENSES CLAIMED . 5.1 IN THIS GROUND, THE ASSESSEE HAS ASSAILED THE I MPUGNED ORDER OF THE LD. CIT(A) AS BEING ERRONEOUS IN UPHOLDING DISALLOWANCES OF RS . 25,635/- OUT OF BUSINESS PROMOTION EXPENSES AND RS. 1,42,230/- OUT OF REPA IRS AND MAINTENANCE, SECURITY MAINTENANCE, COMPUTER AND MOBILE EXPENSES, PETROL A ND TELEPHONE EXPENSES. 5.2 WE HAVE HEARD THE RIVAL CONTENTIONS OF THE LD. AR FOR THE ASSESSEE AND THE LD. DR ON BEHALF OF REVENUE AND PERUSED AND CAREFULLY C ONSIDERED THE MATERIAL ON RECORD. AS OBSERVED BY THE LD. CIT(A) IN THE IMPUGN ED ORDER, THE ASSESSEE WAS NOT ABLE TO FURNISH THE RELEVANT DETAILS AND SUPPORTING DOCUMENTS EVIDENCES IN RESPECT OF THE CLAIM OF THE AFOREMENTIONED EXPENSE S BEFORE THE ASSESSING OFFICER (AO) IN THE COURSE OF ASSESSMENT PROCEEDINGS. WE FIND FROM THE RECORD THAT EVEN IN APPELLANT PROCEEDINGS, AND ALSO BEFORE US, EXCEP T FOR RAISING THE GROUND, THE ASSESSEE WAS NOT ABLE TO BRING ON RECORD ANY MATERI AL EVIDENCE TO ESTABLISH THE CLAIM OF THE AFOREMENTIONED EXPENSES. IN THIS VIEW OF THE MATTER, WE FIND THAT THE DISALLOWANCE MADE BY THE AO OF 10% OF THE AFOREMENT IONED EXPENSES TO BE REASONABLE IN THE FACTUAL MATRIX OF THE CASE AND CO NSEQUENTLY UPHOLD, THE AFORESAID DISALLOWANCES OF RS. 25,635/- OUT OF BUSI NESS PROMOTION EXPENSES AND RS. 1,42,230/- OUT OF THE MISC. EXPENSES MENTIONED ABOVE . CONSEQUENTLY, GROUND NO. 2 OF THE ASSESSEES APPEAL IS DISMISSED. 6. GROUND NO. 1 - ADDITION U/S 41(1) OF THE ACT RS. 10 ,38,403/- 4 ITA NO. 879/MUM/2014 ASSESSMENT YEAR: 2007-08 6.1.1 THE FACTS OF THIS MATTER AS EMANATE FROM THE RECORD ARE THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED FROM THE A SSESSEES BALANCE SHEET FOR THE RELEVANT PERIOD THAT THERE WERE SUNDRY CREDITOR S AMOUNTING TO RS. 44,88,000/- AND CREDITORS IN RESPECT OF ADVERTISIN G, AMOUNTING TO RS. 5,45,230/-. THE A.O REQUIRED THE ASSESSEE TO FILE CONFIRMATIONS IN RESPECT OF ALL THE AFORESAID CREDITORS AND SINCE THE REQUIRED CONFIRMATIONS WERE NOT FILED, THE A.O CAME TO THE VIEW THAT EITHER THE CREDITORS WERE NOT GENUINE OR THAT THE LIABILITY IN RESPECT OF THESE CREDITORS HAS CEASED TO EXIST. IN THAT VIEW O F THE MATTER HE PROCEEDED TO ADD THE ENTIRE AMOUNT OF RS.50,33,230/- (VIZ- 44,88,000 /- + 5,45,230/-) TO THE INCOME OF THE ASSESSEE AS CESSATION OF LIABILITY U/S 41(1) OF THE ACT. 6.1.2 ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE CONTENDED THAT THE ADDITIONS MADE U/S 41(1) OF THE ACT WERE UNJUSTIFIED AND FURN ISHED CONFIRMATION FROM SOME CREDITORS. THE LD. CIT(A) THEN CALLED FOR A REMAND REPORT FROM THE A.O IN RESPECT OF THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE. IN THE REMAND REPORT DT. 31/05/2013 FILED BY THE A.O BEFORE THE LD. CIT(A), THE ASSESSING OFFICER SUBMITTED THAT, SINCE SUNDRY CREDITORS TO THE EXTENT OF RS. 31,63,352/- DISALLOWED BY THE A.O WERE CONFIRMED BY THE LD. CIT(A) IN THE ASSESSE ES CASE FOR ASST. YEAR 2003- 04, ADDITION IN RESPECT OF BALANCE SUNDRY CREDITORS AMOUNTING TO RS. 25,36,874/- MAY BE SUSTAINED BY THE LD. CIT(A). IN RESPONSE TO THE AOS REMAND REPORT, THE ASSESSEE CONTENDED THAT THE AOS PROPOSAL TO CONFI RM THE DISALLOWANCE IN RESPECT OF THE BALANCE CREDITORS AT RS. 25,36,874/- IS INCO RRECT SINCE THE A.O HAS NEITHER VERIFIED THE CONFIRMATIONS, FROM THE CREDITORS SUBM ITTED BY THE ASSESSEE AS ADDITIONAL EVIDENCE NOR GIVEN HIS COMMENTS IN THIS REGARD AND ACCORDINGLY SOUGHT DELETION OF THE ENTIRE ADDITION BY THE A.O U/S 41(1 ) OF THE ACT. 6.1.3 THE LD. CIT(A) OBSERVED THAT THE ASSESSEES CONTENTIONS THAT THE A.O HAS NEITHER VERIFIED THE CONFIRMATIONS OF THE CREDITOR S FILED BY THE ASSESSEE NOR GIVEN ANY COMMENTS THEREON WAS CORRECT. THE LD. CIT(A) ON SUO MOTO EXAMINATION OF THOSE CONFIRMATION FILED, DIRECTED THE A.O TO DELE TE AN AMOUNT OF RS. 14,98,471/- 5 ITA NO. 879/MUM/2014 ASSESSMENT YEAR: 2007-08 OUT OF THE ADDITION OF RS. 25,36,874/- PROPOSED BY THE A.O IN THE REMAND REPORT, AND CONSEQUENTLY SUSTAINED THE ADDITION OF RS. 10,3 8,403/- WHICH IS BEFORE US FOR ADJUDICATION. 6.2.1 IN THIS GROUND, THE ASSESSEE HAS ASSAILED THA T IMPUGNED ORDER OF THE LD. CIT(A) IN SUSTAINING THE ADDITION U/S 41(1) OF THE ACT TO THE EXTENT OF RS. 10,38,403/-. AT THE OUTSET OF THE HEARING, THE LD. AR INFORMED THE BENCH, THAT SUBSEQUENT TO THE PASSING OF THE IMPUGNED ORDER, TH E LD. CIT(A) VIDE LETTER DT. 07/03/2014 HAD PROPOSED RECTIFICATION OF THE SAME U /S 154(3) OF THE ACT, IN ORDER TO REDUCE THE ADDITION U/S 41(1) OF THE ACT TO RS. 6,00,471/- (I.E. RS. 25,36,874 LESS RS. 19,36,403/-) AND PLACED A COPY OF THE SAME ON RECORD. THE LD. AR, HOWEVER, SUBMITTED THAT THE ASSESSEE IS NOT AWARE W HETHER THE PROPOSED RECTIFICATION TO THE IMPUGNED ORDER HAS BEEN EFFECT ED BY THE LD. CIT(A). 6.2.2 THE LD. AR FOR THE ASSESSEE SUBMITTED THAT TH E ADDITION OF RS. 10,38,403/- OR RS. 6,00,471/- U/S 41(1) OF THE ACT UPHELD BY TH E LD. CIT(A) COULD NOT BE SUSTAINED SINCE THE OUTSTANDING BALANCE OF THE PART IES/SUNDRY CREDITORS INVOLVED APPEAR AS OUTSTANDING IN THE ASSESSEES BALANCE S HEET AS ON 31/03/2007. THIS FACT, THE LD. AR CONTENDS, CLEARLY ESTABLISHES /IND ICATES THAT THERE IS NO CESSATION OF LIABILITY ON THE PART OF THE ASSESSEE OR THE CRE DITORS IN THOSE CASES. RATHER, IT IS ACKNOWLEDGEMENT BY THE ASSESSEE OF AN EXISTING DEBT IT OWES TO ITS CREDITORS AND THEREFORE THE ADDITIONS MADE /CONFIRMED U/S 41(1) O F THE ACT BY THE AUTHORITIES BELOW IS UNSUSTAINABLE. IT IS SUBMITTED THAT OUTST ANDING SUNDRY CREDIT BALANCES OF CERTAIN PARTIES CONSIDERED SUSPECT BY THE AUTHOR ITIES BELOW LIKE, MAYUR PLYWOOD OF RS. 2,75,263/-; KUMAR ELECTRONICS OF RS. 2,70,014/-,ADVANCE FROM CUSTOMERS OF RS. 25,000/- AND DINERS CLUB LTD., HA VE BEEN PAID UP AND SETTLED BY THE ASSESSEE IN THE SUBSEQUENT YEARS. COPIES OF THE LEDGER ACCOUNTS OF THESE PARTIES IN THE ASSESSEES BOOKS IN SUBSEQUENT YEARS HAS ALSO BEEN PLACED BEFORE THE AUTHORITIES BELOW. IT IS CONTENDED BY THE LD. A R THAT SINCE THE A.O HAS NOT BROUGHT ON RECORD ANY EVIDENCE OR MATERIAL, INCLUDI NG ANY STATEMENT AFTER 6 ITA NO. 879/MUM/2014 ASSESSMENT YEAR: 2007-08 EXAMINING THE CREDITORS THAT THE DEBTS HAD BEEN EXT INGUISHED AND THAT THE LIABILITY OF THE ASSESSEE TO PAY THEM HAS CEASED, DESPITE THE FACT THAT THE ASSESSEE HAS ACKNOWLEDGED THE SUNDRY CREDITORS DEBTS IN ITS BALA NCE SHEET AT THE END OF RELEVANT YEAR I.E. AS ON 31/03/2007, THE PROVISIONS OF SECTION 41(1) OF THE ACT CANNOT BE INVOKED. IN SUPPORT OF THIS PROPOSITION T HE LD. AR PLACED RELIANCE ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. HOTLINE ELECTRONICS LTD. 6.3 PER CONTRA, THE LD. DR FOR REVENUE SUPPORTED AN D PLACED RELIANCE ON THE IMPUGNED ORDER OF THE LD. CIT(A) ON THIS ISSUE. 6.4.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. IN THE CASE ON HAND IT IS S EEN THE A.O NOTICED THAT THE ASSESSEE HAD REFLECTED SUNDRY CREDITORS OF RS. 44,8 8,000/- AND CREDITORS FOR ADVERTISING AMOUNTING TO RS. 5,45,230/- WHICH WERE SHOWN AS OUTSTANDING IN THE BALANCE SHEET AS ON 31/03/2007. AS THE ASSESSEE FAI LED TO FILE REQUIRED CONFIRMATIONS, THE A.O CAME TO THE VIEW THAT THE EN TIRE CREDITOR/SUNDRY CREDITORS BALANCES WERE NOT GENUINE AND HAS CEASED TO EXIST A ND PROCEEDED TO BRING THE AMOUNT OF RS. 50,33,230/- TO TAX IN THE ASSESSEES HANDS U/S 41(1) OF THE ACT AS CESSATION OF LIABILITY. ON APPEAL, THE LD. CIT(A) W HO CALLED FOR REMAND REPORT FROM THE A.O ON THE ADDITIONAL EVIDENCES IN THE FORM OF CONFIRMATION DETAILS FILED BY THE ASSESSEE. THE A.O IN THE REMAND REPORT DT. 31/05/20 13, INTER ALIA , PROPOSED THE ADDITION U/S 41(1) OF THE ACT BE SUSTAINED TO THE E XTENT OF RS. 25,36,874/-. WE FIND THAT THE LD. CIT(A) OBSERVED THAT THE A.O IN REMAND PROCEEDINGS HAS NOT VERIFIED THE CONFIRMATIONS FILED BY THE ASSESSEE N OR COMMENTED ON THEM AND THEREFORE PROCEEDED TO EXAMINE THE SAME. ON EXAMINA TION THEREOF, WE FIND THAT THE LD. CIT(A) HELD IN THE IMPUGNED ORDER THAT THE ADDITION U/S 41(1) OF THE ACT COULD BE SUSTAINED TO THE EXTENT OF RS. 10,38,403/ -. ON SUBSEQUENT EXAMINATION THEREOF, THE LD. CIT(A) VIDE LETTER DT. 07/03/2014 HAS FURTHER PROPOSED TO REDUCE THE ADDITION U/S 41(1) OF THE ACT TO RS. 6,00,417/- . 7 ITA NO. 879/MUM/2014 ASSESSMENT YEAR: 2007-08 6.4.2 ACCORDING TO THE LD AR FOR THE ASSESSEE, EVE N THE ADDITIONS U/S 41(1) OF THE ACT TO THE EXTENT OF RS. 10,38,403/- OR RS. 6,00,4 71 CANNOT BE SUSTAINED SINCE THE OUTSTANDING BALANCES OF THE CREDITORS / PARTIE S INVOLVED APPEAR AS ACKNOWLEDGED OUTSTANDING CREDITORS IN THE ASSESSEE S BALANCE SHEET AS ON 31/03/2007. IN THE CASE OF HAND, AS OBSERVED BY TH E LD. CIT(A) NEITHER IN ASSESSMENT PROCEEDINGS NOR IN REMAND PROCEEDINGS HA S THE A.O VERIFIED THE CONFIRMATIONS, DETAILS, ADDITIONAL EVIDENCES FILED BY THE ASSESSEE IN SUPPORT OF THE OUTSTANDING CREDITORS BALANCES. NO ENQUIRIES WE RE CAUSED OR NOTICES ISSUED BY THE A.O TO THE CREDITORS TO ASCERTAIN FROM THEM WHE THER THEY HAD GIVEN UP THEIR DUES FROM THE ASSESSEE. THE FACT THAT THE CREDITORS /BALANCES WERE NOT WRITTEN BACK IN THE ASSESSEES ACCOUNTS BUT STOOD REFLECTED IN THE ASSESSEES BALANCE SHEET AS ON 31/03/2007, CLEARLY ESTABLISHES THAT TH ERE WAS NO CESSATION OR REMISSION OF LIABILITY. ON THE CONTRARY, IT IS AN A CKNOWLEDGEMENT BY THE ASSESSEE OF EXISTING DEBTS IT OWES TO ITS CREDITORS. EXCEPT FOR THE FACT THAT THE SAID CREDITORS BALANCES WERE OUTSTANDING, NO MATERIAL WAS BROUGHT ON RECORD BY THE A.O TO SHOW THAT THERE WAS REMISSION OR CESSATION OF LIABILITY. WHEN THE A.O WAS OF THE VIEW THAT THERE WAS REMISSION OR CESSATION OF LIABILITY IN THE CASE ON HAND AND INVOKED THE PROVISIONS OF SECTION 41(1) OF THE ACT, IT WAS INCUMBENT UPON HIM TO CAUSE NECESSARY ENQUIRES TO BE MADE TO BRING ON RECORD MA TERIAL EVIDENCE TO ESTABLISH INVOCATION OF THE PROVISIONS OF SECTION 41(1) OF TH E ACT. THE FACT THAT THE ASSESSEE REFLECTS THESE AMOUNT AS CREDITORS IN ITS BALANCE S HEET AS ON 31/03/2007, ACKNOWLEDGES ITS LIABILITY TO ITS CREDITORS AND ALS O EXTENDS THE PERIOD OF LIMITATION U/S 18 OF THE LIMITATION ACT. ONCE THE ASSESSEE ACK NOWLEDGES AND CLAIMS THAT THE DEBTS TO SUNDRY CREDITORS ARE OUTSTANDING IN ITS BA LANCE SHEET AND IT IS LIABLE TO PAY ITS CREDITORS, REVENUE CANNOT CONCLUDE THAT THE CREDITORS HAVE REMITTED THEIR LIABILITY OR THAT THE LIABILITY HAS OTHERWISE CEASE D WITHOUT ANY MATERIAL EVIDENCE TO THE CONTRARY. IN THE CASE ON HAND, THE CREDITORS CO NTINUE TO BE REFLECTED IN THE ASSESSEES BOOKS OF ACCOUNTS AND BALANCE SHEET AS O N 31/03/2007. IN FACT, IN RESPECT OF SOME OF THE CREDITORS BALANCES CONSIDERE D SUSPECT BY THE AUTHORITIES BELOW, LIKE DINERS CLUB LTD., MAYUR PLYWOOD, KUMAR ELECTRONICS, ADVANCE FROM 8 ITA NO. 879/MUM/2014 ASSESSMENT YEAR: 2007-08 CUSTOMER, THE ASSESSEE HAS PLACED BEFORE THE AUTHOR ITIES BELOW COPIES OF RESPECTIVE LEDGER ACCOUNTS SHOWING REPAYMENTS / SET TLEMENT OF ACCOUNT, OUTSTANDING BALANCES IN SUBSEQUENT YEARS WHICH WE FIND HAVE NOT BEEN DISPROVED OR FOUND FAULT WITH BY THE AUTHORITIES BELOW. 6.4.3. IN THIS FACTUAL MATRIX OF THE CASE AS DISCUS SED ABOVE, WE ARE OF THE OPINION THAT THE AUTHORITIES BELOW HAVE NOT BROUGHT ON RECO RD ANY EVIDENCE OR MATERIAL, INCLUDING STATEMENTS OF CREDITORS, ETC. TO SHOW THA T THE DEBTS OWED TO THEM HAVE BEEN EXTINGUISHED OR THAT THERE WAS REMISSION OR CE SSATION OF LIABILITY, DESPITE THE EXTENSION OF THE PERIOD OF LIMITATION BY ACKNOWLEDG EMENT OF THE CREDITORS IN THE ASSESSEES BALANCE SHEET AS ON 31/03/2007. WE, THER EFORE, HOLD THAT THE ADDITION OF RS. 10,38,403/- UPHELD BY THE LD. CIT(A) IS NOT SUSTAINABLE AND DIRECT THE A.O TO DELETE THE SAME. IN COMING TO THIS FINDING, WE D RAW SUPPORT FROM THE JUDGMENT IN THE CASE OF CIT VS. SUGAULI SUGAR WORKS (P) LTD. (1999) 236 ITR 518 (SC) AND OF THE DELHI HIGH COURT IN THE CASE OF HOTLINE ELECTR ONICS LTD. (2012) 80 CCH 0156 (DEL HC), WHICH ARE CLEARLY APPLICABLE IN THE CASE ON HAND. GROUND NO. 1 OF ASSESSEES APPEAL IS ALLOWED. 7. IN THE RESULT, THE ASSESSEE APPEAL FOR A.Y. 2007 -08 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH AUGUST, 2016 SD/- SD/- ( SANDEEP GOSAIN ) (JASON P.BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 19/08/2016 9 ITA NO. 879/MUM/2014 ASSESSMENT YEAR: 2007-08 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. !' , $ !'% , / DR, ITAT, MUMBAI 6. &' ( / GUARD FILE. / BY ORDER, ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI PRAMILA