Cemach Machineries Limited, Ahmedabad V. ITO, Ward-1(1)(3), Ahmedabad

ITA 952/AHD/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1115 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 17-10-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 16-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N R SONI
• Keywords: Recovery proceedings; Business income; Business expenditure; Commercial expediency; TDS
• Section: 40A(3); 143(3); 40(a)(ia); 143(2); 13; 145; 28

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO. 952/AHD/2018 / ASSESSMENT YEAR: 2014-15 CEMACH MACHINERIES LTD., C/O. KETAN H. SHAH, ADVOCATE, 903, SAPPHIRE COMPLEX, CG ROAD, NAVRANGPURA, AHMEDABAD PAN : AADCC 0186 B VS. INCOME TAX OFFICER, WARD 1(1) (3), AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI KETAN H. SHAH, AR WITH SHRI AMAN SHAH, AR REVENUE BY : SHRI N R SONI, CIT-DR ! / DATE OF HEARING : 17/10/2019 / DATE OF PRONOUNCEMENT: 11/12/2019 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAIN ST THE ORDER OF LEARNED CIT(A)-1, AHMEDABAD DATED 26.03.2018 PASSED FOR ASSESSMENT YEAR 2014-15. 2. IN THE FIRST GROUND OF APPEAL THE ASSESSEE HAS P LEADED THAT LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF LOSS OF RS.6,72,66,732/-. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED ITS RETURN OF INCOME ELECTRONICALLY ON 30.11.2014 DECLARING LOSS OF (-) RS.23,325/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSE SSMENT AND A NOTICE UNDER SECTION 143(2) OF THE INCOME-TAX ACT WAS ISSUED AND SERVED UPON THE ASSESSEE. ON SCRUTINY OF THE ACCOUNTS, IT REVEALED TO THE ASSESSING OFFICER ITA NO. 952/AHD/2018 CEMACH MACHINERIES LTD VS.ITO FOR AY: 2014-15 2 THAT THE CLOSING STOCK AS ON 31.03.2014 IS SHOWN AT RS. NIL. THE ASSESSEE HAS SHOWN BUSINESS INCOME OF (-) RS. 8,12,46,412/-. HE FOUND THAT THE OPENING STOCK AS WORK-IN-PROGRESS (WIP) OF RS.9,55,78,790/- WAS SHOWN BY THE ASSESSEE. IT HAS MADE PURCHASES OF RS.67,14,205/-. IF BOTH THESE FIGURES ARE TAKEN TOGETHER (I.E. WIP + PURCHASES), THEN IT WOUL D COME TO RS.10,22,92,995/-. THE ASSESSEE HAS SOLD THIS STOC K FOR A SUM OF RS.3,50,26,263/- AND REDUCED THE STOCK TO RS. NIL. THIS EXERCISE HAS GIVEN RISE TO LOSS OF (-) RS.6,72,66,732/-. THE ASSESSIN G OFFICER INVITED THE EXPLANATION OF THE ASSESSEE TO SHOW AS TO WHY IT HA S DISPOSED OF ITS STOCK OF RS. 10.22 CRORES FOR A SUM OF RS.3.50 CRORES ONLY. IN RESPONSE TO THE QUERY OF THE ASSESSING OFFICER, THE ASSESSEE HAS FILED A DET AILED REPLY IT HAS PARTLY REPRODUCED BY THE ASSESSING OFFICER AS WELL AS BY T HE LEARNED CIT(A). COPY OF SUCH REPLY IS AVAILABLE ON PAGE NOS. 26-30 OF TH E PAPER-BOOK AND OUR ATTENTION WAS DRAWN TOWARDS THIS REPLY BY THE LEARN ED COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING. WE WILL REVERT BA CK TO THIS REPLY WHILE MAKING AN ANALYSIS OF THIS ISSUE. 4. AFTER CONSIDERING THE REPLY OF THE ASSESSEE, THE LEARNED ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAS SHOWN PROFIT ON SALE OF ASSETS AT RS.7,34,94,438/-; THEREFORE, IN ORDER TO AVOID P AYMENT OF TAXES ON THIS PROFIT, IT HAS ADOPTED THIS MODUS OPERANDI OF SHOWI NG BUSINESS LOSS. HE ACCORDINGLY DISALLOWED THE CLAIM OF THE ASSESSEE. 5. DISSATISFIED WITH THIS DISALLOWANCE, ASSESSEE CA RRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A), BUT THE APPEAL DI D NOT BRING ANY RELIEF TO THE ASSESSEE. LEARNED FIRST APPELLATE AUTHORITY HA S CONCURRED WITH THE VIEW OF THE LEARNED ASSESSING OFFICER. 6. WHILE IMPUGNING THE ORDERS OF THE REVENUE AUTHOR ITIES, LEARNED COUNSEL FOR THE ASSESSEE TOOK US THROUGH THE REPLY OF THE ASSESSEE AVAILABLE ITA NO. 952/AHD/2018 CEMACH MACHINERIES LTD VS.ITO FOR AY: 2014-15 3 ON PAGE NOS. 26-30 OF THE PAPER-BOOK. HE POINTED OU T THAT THE ASSESSEE HAS PLEADED THAT ALL THE CIRCUMSTANCES MENTIONED IN THE REPLY HAVE FORCED THE ASSESSEE TO CLOSE ITS BUSINESS AND TO SELL ALL THE STOCK-IN-TRADE AT THE BEST AVAILABLE PRICE. HE FURTHER CONTENDED THAT THE BOO KS OF ACCOUNTS OF THE ASSESSEE ARE DULY AUDITED. NO DEFECTS IN THE BOOKS WERE FOUND OUT. THE ASSESSING OFFICER WAS UNABLE TO LAY HIS HANDS ON AN Y TRANSACTION WHICH SUGGESTS THAT THE ASSESSEE HAS SOLD A PARTICULAR IT EM AT A HIGHER PRICE AND RECEIVED EXTRA CONSIDERATION IN CASH. IN OTHER WOR DS, THE ASSESSING OFFICER HAD DOUBTED THE LOSS SUFFERED BY THE ASSESSEE IN TH E BUSINESS ON A SUSPICION. HE SUBMITTED THAT, WITHOUT REJECTION OF BOOKS, SUCH LOSS CANNOT BE DETERMINED FOR DISALLOWANCE. HE RELIED UPON THE OR DER OF ITAT IN THE CASE OF ACIT VS. AROMA HIGHTECH LTD, REPORTED IN [2019] 109 TAXMANN.COM 65 (AHD TRIB). HE FURTHER RELIED UPON THE ORDER OF THE TRIBUNAL IN THE CASE OF DCIT VS. PARAS DYEING & PRINTING MILLS (P.) LTD., R EPORTED IN [2011] 44 SOT 12 (AHMEDABAD). THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. ANIL KUMAR & CO., REPORTED IN [2016] 67 TAXMANN.COM 278 (KAR) HAS ALSO BEEN REFERRED. APART FROM THESE, THE LEAR NED COUNSEL FOR THE ASSESSEE HAS ALSO PLACED ON RECORD A LARGER NUMBER OF DECISIONS. WE THINK IT IS NOT NECESSARY TO RECAPITULATE AND RECITE ALL THE DECISIONS ON THIS LEGAL ASPECTS, BUT SUFFICE IT TO SAY THAT CORE OF ALL THE DECISIONS OF THE TRIBUNAL AS WELL AS OF THE HONBLE HIGH COURTS IS TO THE EFFECT THAT SALES OF THE ASSESSEE COULD BE DOUBTED IF IT WAS NOT PRACTICALLY POSSIBLE FOR THE ASSESSING OFFICER TO DEDUCE TRUE INCOME FROM THE BOOKS OF ACCOUNTS MA INTAINED BY THE ASSESSEE. IN OTHER WORDS, IF BOOKS OF ACCOUNTS ARE REJECTED, ONLY THEN ESTIMATED VALUE OF THE SALES SHOWN BY THE ASSESSEE IS TO BE WORKED OUT. HE POINTED OUT THAT WHEN THIS ASPECT WAS BROUGHT TO TH E NOTICE OF THE LEARNED CIT(A), THEN LEARNED CIT(A) HAS MERELY OBSERVED THA T SINCE THE ASSESSING OFFICER WAS ESTIMATING SALES ONLY, THERE WAS NO NEC ESSITY TO REJECT THE BOOKS ITA NO. 952/AHD/2018 CEMACH MACHINERIES LTD VS.ITO FOR AY: 2014-15 4 OF ACCOUNTS. LEARNED COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE LOSS SUFFERED IN THE BUSINESS OUGHT NOT TO HAVE BEEN DIS ALLOWED. 7. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESEN TATIVE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. HE POINTED O UT THAT THERE WAS A PROFIT ON SALE OF ASSETS; THEREFORE, THERE WAS A MOTIVE FO R THE ASSESSEE TO REDUCE THE PROFIT SO THAT IT CAN AVOID PAYMENT OF TAXES; OTHER WISE, NO BUSINESSMAN WOULD LIKE TO SELL THE STOCK-IN-TRADE AT 1/3 RD OF ITS VALUE AND IT IS A VERY STRONG CIRCUMSTANCE TO DOUBT THE TRANSACTIONS UNDER TAKEN BY THE ASSESSEE. 8. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. SECTION 145 HAS A DIRECT BEARIN G ON THE CONTROVERSY; THEREFORE, IT IS IMPERATIVE UPON US TO TAKE NOTE OF THE RELEVANT PART OF THE SECTION WHICH READS AS UNDER: - '145. (1) INCOME CHARGEABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION' OR 'INCOME FROM OTHER SOURCES' SHALL, S UBJECT TO THE PROVISIONS OF SUB-SECTION (2), BE COMPUTED IN ACCORDANCE WITH EIT HER CASH OR MERCANTILE SYSTEM OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSE SSEE. (2) THE CENTRAL GOVERNMENT MAY NOTIFY IN THE OFFICI AL GAZETTE FROM TIME TO TIME [ACCOUNTING STANDARDS] TO BE FOLLOWED BY ANY C LASS OF ASSESSEES OR IN RESPECT OF ANY CLASS OF INCOME. (3) WHERE THE ASSESSING OFFICER IS NOT SATISFIED AB OUT THE CORRECTNESS OR COMPLETENESS OF THE ACCOUNTS OF THE ASSESSEE, OR WH ERE THE METHOD OF ACCOUNTING PROVIDED IN SUB-SECTION (1) [OR ACCOUNTI NG STANDARDS AS NOTIFIED UNDER SUB-SECTION (2), HAVE NOT BEEN REGULARLY FOLL OWED BY THE ASSESSEE], THE ASSESSING OFFICER MAY MAKE AN ASSESSMENT IN THE MAN NER PROVIDED IN SECTION 144.]' 9. A BARE READING OF SECTION 145 WOULD REVEAL THAT IT PROVIDE THE MECHANISM HOW TO COMPUTE THE INCOME OF THE ASSESSEE . ACCORDING TO SUB- SECTION 1, THE INCOME CHARGEABLE UNDER THE HEAD PRO FIT AND GAINS OF BUSINESS OR PROFESSION OR INCOME FROM OTHER SOURCE SHALL BE COMPUTED IN ACCORDANCE WITH THE METHOD OF ACCOUNTANCY EMPLOYED BY AN ASSES SEE REGULARLY, SUBJECT ITA NO. 952/AHD/2018 CEMACH MACHINERIES LTD VS.ITO FOR AY: 2014-15 5 TO SUB-SECTION 2 OF SECTION 145 OF THE ACT. SUB-SEC TION 2 PROVIDES THAT THE CENTRAL GOVERNMENT MAY NOTIFY IN THE OFFICIAL GAZET TE FROM TIME TO TIME, THE ACCOUNTING STANDARD REQUIRED TO BE FOLLOWED BY ANY CLASS OF ASSESSEE IN RESPECT OF ANY CLASS OF INCOME. THUS, IT INDICATES THAT INCOME HAS TO BE COMPUTED IN ACCORDANCE WITH THE METHOD OF ACCOUNTAN CY FOLLOWED BY AN ASSESSEE I.E. CASH OR MERCANTILE, SUCH METHOD HAS T O BE FOLLOWED KEEPING IN VIEW THE ACCOUNTING STANDARD NOTIFIED BY THE CENTRA L GOVERNMENT FROM TIME TO TIME. SUB CLAUSE 3 PROVIDES A SITUATION, TH AT IS, IF THE ASSESSING OFFICER IS UNABLE TO DEDUCE THE TRUE INCOME. ON THE BASIS OF METHOD OF ACCOUNTANCY FOLLOWED BY AN ASSESSEE THAN HE CAN REJ ECT THE BOOK RESULT AND THE ASSESSEE'S INCOME ACCORDING TO HIS ESTIMATION O R ACCORDING TO HIS BEST JUDGMENT. THE ASSESSING OFFICER IN THAT CASE IS REQ UIRED TO POINT OUT THE DEFECTS IN THE ACCOUNTS OF ASSESSEE AND REQUIRED TO SEEK EXPLANATION OF THE ASSESSEE QUA THOSE DEFECTS. IF THE ASSESSEE FAILED TO EXPLAIN THE DEFECTS THAN ON THE BASIS OF THE BOOK RESULT, INCOME CANNOT BE D ETERMINED AND ASSESSING OFFICER WOULD COMPUTE THE INCOME ACCORDING TO HIS E STIMATION KEEPING IN VIEW THE GUIDING FACTOR FOR ESTIMATING SUCH INCOME. 10. IN THE LIGHT OF ABOVE, LET US APPRECIATE FACTS OF THE PRESENT CASE AND, IN ORDER TO APPRECIATE THE DISPUTE, IT IS NECESSARY TO TAKE NOTE OF THE REPLY GIVEN BY THE ASSESSEE TO THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, WHICH READS AS UNDER:- SUB: DETAILED SUBMISSION IN REFERENCE TO EXPENDITU RE CLAIMED OF RS.9,55,78,790/- 1. PLEASE REFER TO PARA 20 OF THE AUDIT REPORT, FRO M WHICH IT IS FOUND THAT THERE IS WIP OF RS.9,55,78,790/-. THIS AMOUNT HAS BEEN WR ITTEN OFF DURING THE FINANCIAL YEAR 2013-14 I.E. ASST. YEAR 2014-15. 2. THE ASSESSEE COMPANY, CEMACH MACHINERIES LIMITED , HAS BEEN INCORPORATED ON 27.02.2007. THE MAIN BUSINESS OF TH E ASSESSEE IS TO MANUFACTURE PHARMACEUTICAL MACHINERIES LIKE (I) TAB LET MAKING MACHINE, (II) VENULATION MACHINE, (III) PHARMA ACCESSORIES MACHIN E AND (IV) ITA NO. 952/AHD/2018 CEMACH MACHINERIES LTD VS.ITO FOR AY: 2014-15 6 PHARMACEUTICAL MACHINERY SPARES. THE PROJECT REPORT DATED 24.03.209 IS ENCLOSED HEREWITH. PRACTICALLY, THE FIRST FINANCIAL YEAR IS 2008-09, WHEREIN THERE IS TURNOVER OF RS. 5,19,33,745/-. DURING THIS FINANCIAL YEAR, THE ASSESSEE HAS PURCHASED PLANT AND MACHINERY WORTH RS .5,04,01,616/-, FOR WHICH NECESSARY SCHEDULE IS ATTACHED HEREWITH AT PA GE 5. THIS MACHINERY HAS BEEN PURCHASED BY TAKING FINANCE FROM SYNDICATE BAN K, MANINAGAR BRANCH, AHMEDABAD. THE SECURED LOAN TAKEN FOR THE FINANCIAL YEARS 2008-09 AND 2009-10 IS IN REFERENCE TO THE FOLLOWING BANKS: AS ON AS ON 31.03.2010 31.03.2009 (RS.) (RS.) --------------- --------------- ICICI BANK HONDACITY LOAN 0 298547 ICICI BANK - INNOVA CAR 0 217537 ICICI BANK - SANTRO CAR 0 70525 RELIANCE CAPITAL LTD.-VERNA CAR 256736 511338 SYNDICATE BANK CC 27800730 13506289 SYNDICATE BANK WCDL 19539061 28868470 SYNDICATE BANK PCL 3240073 0 SYNDICATE BANK TERM LOAN 20440448 27191007 --------------- -------------- 71277048 70663713 --------------- -------------- THE MAIN SECURED LOAN IS FROM SYNDICATE BANK, CC AC COUNT AND WCDL (WORKING CAPITAL DECREASING LIMIT) MEANING THEREBY THAT THIS LOAN OF RS.2,88,68,470/- HAS BEEN GIVEN TO THE ASSESSEE-COM PANY AGAINST THE PENDING AND NEW ORDERS, FOR WHICH A LIST HAS BEEN GIVEN TO THE BANK AT THE RELEVANT POINT OF TIME. 3. FOR THE FINANCIAL YEAR 2009-10 I.E. ASST. YEAR 2 010-11, THERE IS TURNOVER OF RS. 14,52,98,432/-, WHICH CONSISTS OF PHARMACEUT ICAL MACHINERY AS STATED ABOVE, IN THIS YEAR, THE SECURED LOAN IN REFERENCE TO SYNDICATE BANK IS INCREASED TO RS.2,78,00,730/- AND OVERALL SECURED L OAN IS INCREASED TO RS.7,12,77,048/-. 4. FOR THE FINANCIAL YEAR 2010-11 I.E. ASST. YEAR 2 011-12, THERE IS TURNOVER OF RS.26,34,96,951/-. DURING THIS YEAR, THE ASSESSE E HAS ALSO STARTED MANUFACTURING PLASTIC MACHINERIES LIKE PVP PIPE MAK ING MACHINERIES, SUTALI PLANT, PLASTIC SHEET PLANT ETC. DURING THIS YEAR, T HE ASSESSEE TRIED TO INCREASE THE PRICE OF THEIR FINISHED PRODUCTS LOOKING TO HUG E INVESTMENT AND SECURED LOAN. THE ASSESSEE HAS TO COMPETE WITH THE BIG BRAN DS HAVING MARKET ESTABLISHMENT I.E. CADMACH PHARMACEUTICAL MACHINERY PRIVATE LIMITED, KEVIN PROCESSING PRIVATE LIMITED, CMC PHARMACEUTICA LS, FLUTE PIPE ITA NO. 952/AHD/2018 CEMACH MACHINERIES LTD VS.ITO FOR AY: 2014-15 7 PRIVATE LIMITED ETC. ALL THESE COMPANIES ARE EXISTI NG IN THE MARKET SINCE 1990 OR SO. 5. THE DETAILS OF MONTHLY PURCHASE ACCOUNT WITH PAR TIES' NAME ARE ENCLOSED HEREWITH FOR TOTAL PURCHASE MADE IN FORM OF MONTHLY PURCHASE REGISTER. SIMPLE INVOICES HAVE ALREADY BEEN SUBMITTED DURING THE COURSE OF LAST HEARING ALONG WITH LETTER DATED 14.11.2016. 6. REGARDING BREAK-UP FOR AN AMOUNT OF RS.9,55,78,7 90/-, THE DETAILED BREAK- UP OF WIP IS ATTACHED HEREWITH, FROM WHICH IT IS FO UND THAT THE MACHINES OF THE ASSESSEE ARE TECHNICALLY BACK DRIVEN BECAUSE TH E COMPETITORS ARE OFFERING MORE ADVANCE TECHNOLOGICAL INSTRUMENTS. THEY HAVE D ONE AUTOMIZATION AND THEY HAVE PRODUCED IN THE MARKET WITH INTERCHANGEAB ILITY, THAT THE CUSTOMER HAS TO BUY ONE MORE MACHINE WITH THE FIRST PART OF 3 / 4 TYPES SO THAT THEY AVOIDED TO PURCHASE FOUR MACHINES OF THE ASSESSEE A ND REPLACED IT WITH COMPETITORS' MACHINE. THEREFORE, THE BUYERS OF THE ASSESSEE AVOIDED TO PURCHASE ASSESSEE'S MACHINE BECAUSE FOR THEIR USE, IF THEY PURCHASE THE MACHINE OF THE ASSESSEE, IT REQUIRES MORE SPACE AND MORE LABOUR, AND THEREFORE, THEY OPTED ONLY ONE MACHINE INSTEAD OF T HE OUTDATED MACHINE OF THE ASSESSEE. THE MAIN THING IS THAT DUE TO FINANCIAL H URDLE OF THE ASSESSEE, THE ASSESSEE CANNOT AFFORD TO R& D UNIT SINCE THERE ARE RECOVERY PROCEEDINGS STARTED BY SYNDICATE BANK. 7. WE HEREBY ATTACH VARIOUS CORRESPONDENCES WITH THE BANKERS OF THE ASSESSEE, WHICH PROVE THAT THE ASSESSEE ON A PROPOS ED LIST OF NPA SINCE THE YEAR 2008. (I) LETTER DATED 02.06.2008 FROM SYNDICATE BANK IN REFE RENCE TO EXTENSION OF ADHOC FACILITY BECAUSE THE COMPANY WAS NOT ABLE TO REPAY THE ADHOC LIMIT. (II) LETTER DATED 23.06.2008 FROM SYNDICATE BANK, AGAIN IN REFERENCE TO EXTENSION OF ADHOC FACILITY, THAT THEY HAVE AGAIN E XTENDED THE LIMIT. (III) LETTER DATED 30.10.2008 IN REFERENCE TO R ENEWAL PROPOSAL IN REFERENCE TO RECONSTRUCTING OF LIMIT. (IV) LETTER DATED 06.12.2008 FROM THE ASSESSEE TO THE BANK. IT IS SAID THAT THERE IS LIQUIDITY SHORTFALL OF 1.50 CRORES AND STA TED THAT THERE IS GLOBAL RECESSION GOING ON, AND THE ENTIRE NATION IS FACING FINANCIAL TROUBLE AND FURTHER STATED THAT THERE IS POSSIBILITY OF REV IVAL OF PHARMACEUTICAL MARKET AND REQUESTED TO PROVIDE LIQUIDITY SUPPORT. (V) LETTER DATED 07.01.2009 FROM THE ASSESSEE TO THE MANAGER REQUESTING FOR RECONSTRUCTING OF THE BANKING FACILITY OF THE A SSESSEE IN REFERENCE TO TERM LOAN, CASH CREDIT AND WORKING CAPITAL DEFICIT LIMIT (WCDL), WHEREIN THE ASSESSEE HAS AGAIN PROPOSED CASH FLOW S TATEMENT ITA NO. 952/AHD/2018 CEMACH MACHINERIES LTD VS.ITO FOR AY: 2014-15 8 MENTIONING THE PROJECTED SALES FOR GETTING SUCH LIM IT, WHICH CANNOT BE ACHIEVED IN VIEW OF VARIOUS FACTORS, WHICH WERE BEY OND THE CONTROL OF THE ASSESSEE. (VI) LETTER DATED 24.03.2009 TO THE MANAGER FRO M THE ASSESSEE IN REFERENCE TO RECONSTRUCTING REQUEST AND PROJECTED REVENUE, WH ICH HAS NOT BEEN ACHIEVED DUE TO COMPETITION IN THE MARKET. (VII) LETTER DATED 27.03.2009 FROM SYNDICATE BANK IN REFERENCE TO RECONSTRUCTING OF CREDIT LIMIT ADDRESSED TO THE REG IONAL OFFICE. (VIII) LETTER DATED 30.03.2009 FROM SYNDICATE BANK IN REFERENCE TO RECONSTRUCTING THE REQUEST MADE BY THE ASSESSEE VID E LETTER DATED 30.01.2009. (IX) LETTER DATED 06.06.2009 FROM REGIONAL OFFI CE TO THE BANK IN REFERENCE TO SALE OF PROPERTY, PROPOSAL MADE BY THE ASSESSEE AND REQUESTED THAT TO MONITOR THE ACCOUNT CLOSELY TO ENSURE THAT IT DOES NOT SLEEP INTO NPA. 8. IT MAY NOT BE OUT OF PLACE TO MENTION HERE THA T IN VIEW OF THE AFORESAID CORRESPONDENCES, IT IS ADMITTED FACT THAT ASSESSEE' S FINANCIAL HEALTH WAS NOT SO GOOD, LOOKING TO VARIOUS BIG GROUPS INVOLVED IN SIM ILAR LINE OF BUSINESS. SINCE THE ASSESSEE IS NOT ABLE TO UPDATE ITSELF AND WAS UNDER FINANCIAL CRUNCH NOR THE BANKING PEOPLE WERE READY TO GIVE ANY FINAN CE TO THE ASSESSEE. FURTHER, THE MAJORITY STAFF OF THE ASSESSEE HAS STA RTED THEIR OWN COMPANY. WE FURTHER SAY THAT THE ASSESSEE HAS SOLD ITS PROPERTY OF PLOT NO.56/A/14, PHASE I, VATVA, GIDC IN THE YEAR 2008 FOR AN APPROXIMATE AMOUNT OF RS.1.2 CRORE JUST TO PAY UP THE BANKERS' DUE. THEREAFTER, THE TH INGS ARE NOT GOING TO BE MATERIALIZED, AND THEREFORE, AGAIN COMPELLED TO SEL L REMAINING FACTORY BUILDING ALONG WITH VARIOUS FURNITURE AND FIXTURE M ENTIONED THEREIN IN F.Y.2013-14 FOR AN AMOUNT OF RS.9,09,00,000/. 9. WE ALSO ENCLOSE HEREWITH THE DETAILS UNSECURED LOAN RECEIVED FROM VARIOUS PARTIES LIKE BARCLAYS BANK AND OTHER FINANC IAL INSTITUTIONS SINCE 2007, WHICH PROVE THAT THE ASSESSEE HAS ALREADY GOT AN IDEA OF THE FINANCIAL CRUNCH IN THE FUTURE YEARS IF IT DOES NOT ACHIEVE I TS PROJECTED SALES BECAUSE THE COMPANY HAS DONE HEAVY INVESTMENT IN THE BUILDING S OLD DURING F.Y. 2013- 14, WHICH WAS PURCHASED IN THE YEAR 2007 AND ONWARD S. THE COMPANY IS TRYING ITS LEVEL BEST SINCE YEAR 2007-08 BUT ULTIMA TELY THE FACTORY BUILDING HAD TO BE SOLD OUT IN THE F.Y. 2013-14, AND ACCORDI NGLY, WHATEVER WIP THAT THE COMPANY IS HAVING IN REFERENCE TO VARIOUS SPACE WERE WRITTEN OFF JN THE BOOKS OF ACCOUNTS. THESE ARE NOT SALEABLE IN THE OP EN MARKET SINCE THERE WERE NO BUYERS TO PURCHASE THESE ITEMS. 10. IT IS SAID THAT, DURING THE YEAR THE PURCHASE OF RS. 67,14,205/- AS PER COPY OF THE PURCHASE REGISTER AND COPY OF THE SAMPL E INVOICES FILED. DETAILS OF THE SALES OF RS. 3,50,26,263/- HAS ALSO BEEN PLACED ON RECORD. THERE CANNOT BE ITA NO. 952/AHD/2018 CEMACH MACHINERIES LTD VS.ITO FOR AY: 2014-15 9 SALE OF RS. 3.50 CRORE IN REFERENCE TO 67.14 LACS A ND THEREFORE, AS PER THE SUBMISSION MADE DATED 14.11.2016, ASSESSEE HAS SOLD OUT THE SELLABLE ITEM OUT OF THE OPENING W.I.P. THEREFORE, WE HAVE TRIED OUR LEVEL BEST TO SELL VARIOUS ITEMS LYING IN OUR FACTORY BUILDING AND GODOWN HAS ALSO BEEN SOLD OUT IN FY 2013-14. THEREFORE, WE HAVE NO SPACE TO STORE OUR R AW MATERIAL AND / OR FINISHED GOODS. 11. IT MAY BE NOTED THAT ONE PARTY NAMELY SHIV KRU PA STEEL HAS TAKEN STAY AGAINST THE PROPERTY SOLD DURING FY 2013-14 AND THE REFORE, WE HAVE GIVEN FINAL SETTLEMENT AMOUNT OF RS. 12,60,000/- TO THE S AID PARTY AND THEREAFTER THE PRESENT PROPERTY HAS BEEN SOLD FOR THE AMOUNT O F RS. 9,09,00,000/-. 12. IT MAY BE NOTICED THAT IN EARLIER ASSESSMENT YE AR, SCRUTINY HAS BEEN DONE U/S. 143(3) BY SHRI U. G. JOSHI HOWEVER, THE ORDER IS NOT TRACEABLE IN OUR OFFICE. 13. THERE WAS A NOTICE FROM ARBITRATION PROCEEDINGS FROM ARBITRAL TRIBUNAL, NEW DELHI IN REFERENCE TO DUES WITH RELIGARE FINANC E FOR THE AMOUNT OF RS. 24,25,000/-, WHICH IS DATED 13-12-2013. THIS ITSELF PROVES THAT THE ASSESSEE'S POSITION WAS NOT FINANCIALLY SOUND. 14. IT IS FURTHER STATED THAT, THE CHEQUE ISSUED BY US HAS ALSO BEEN RETURNED OF VARIOUS PARTIES AND LIST OF THE PARTIES WITH AMOUNT AND OTHER DETAILS ARE ATTACHED HEREWITH. 15. IT MAY BE NOTED THAT WHATEVER SALES CONSIDERATI ON HAS BEEN RECEIVED FROM SALE OF FACTORY BUILDING, HAS BEEN USED TO PAY OFF THE VARIOUS DUES OF SYNDICATE BANK. IT IS NOT THE CASE THAT THE DIRECTO RS HAVE TAKEN OUT THE SALES CONSIDERATION RECEIVED OF RS. 9.09 CRORES. 16. MR. AMIT SHAH - DOMESTIC MARKETING HEAD, MR. AS HISH VENKAR -EXPORT, MR. PIYUSHRARNAWAT - PRODUCTION HEAD, MR. MRUGESH G AJJAR -PRODUCTION HEAD. ALL THESE FOUR PERSONS HAVE LEFT THE JOB AND STARTED THEIR HOME COMPANY FORM THE FY 2011-12 UNDER THE NAME OF CEMAC H PHARMACEUTICAL PVT. LTD. AND THEY HAVE CONTACTED OUR CUSTOMERS DIR ECTLY. THEY HAVE STARTED MAKING RUMOURS IN THE MARKET THAT OUR COMPANY IS UN DERGOING FINANCIAL TROUBLE AND IF THE CUSTOMER GIVES THE ORDER THEN, T HE COMPANY WILL NOT PROVIDE THE GOODS SINCE THE COMPANY IS UNDER NPA LI ST OF SYNDICATE BANK. LETTER FROM SYNDICATE BANK IN REFERENCE TO NPA DATE D 01.09.2013 IS ENCLOSED HEREWITH. 17. IN NUTSHELL, WE SAY THAT, THE COMPANY WAS IN A FINANCIAL TROUBLE SINCE THE YEAR 2008 WHEN THE FIRST PROPERTY HAS BEEN SOLD OUT AND WITH THE CHEQUE ISSUED TO VARIOUS PARTIES HAS BEEN RETURNED BACK. T HEREFORE, THE ASSESSEE HAS NO OTHER ALTERNATE TO ACCEPT TOMORROW THE FUND FROM THE MARKET TO PAY OFF THE DUES OF VARIOUS BANKERS. FURTHER, THERE WAS NOTICE U/S. SURFASI ACT BY THE ITA NO. 952/AHD/2018 CEMACH MACHINERIES LTD VS.ITO FOR AY: 2014-15 10 SYNDICATE BANK DATED 01.09.2013 REQUESTING US TO PA Y THEIR DUES BY SELLING OUT THE REMAINING BUILDING AND STOCK. THEREFORE, THE ASSESSEE HAS NO ALTERNATE TO WRITE O FF THE REMAINING STOCK IN FY 2013-14 WHICH IS ALLOWABLE AS THE BUSINESS LOSS OR BUSINESS EXPENDITURE U/S. 28 AND / OR 37 OF THE INCOME TAX ACT. 11. AT THIS STAGE, WE WOULD LIKE TO APPRAISE OURSEL VES WITH THE OBSERVATIONS OF THE HONBLE GUJARAT HIGH COURT IN T HE CASE OF VOLTAMP TRANSFORMERS P. LTD VS. CIT, REPORTED IN 129 ITR 10 2 (GUJ), THOUGH THE OBSERVATION WAS MADE IN THE CONTEXT OF ALLOWANCE OR DISALLOWANCE OF BUSINESS EXPENDITURE, HOWEVER, IT IS RELATED TO APP RECIATION OF COMMERCIAL EXPEDIENCY WHILE ALLOWING SUCH BUSINESS EXPENDITURE . THE HONBLE COURT HAS OBSERVED THAT SO FAR AS THE QUESTIONS OF COMMERCIAL EXPEDIENCY AN D BUSINESS NEEDS OF AN ORGANIZATION ARE CONCERNED, IT IS NOT T HE VIEW-POINT OF A REVENUE OFFICER WHICH SHOULD COUNT, BUT IT SHOULD BE THE VIEW-POINT OF AN ORDINARY BUSINESS MAN DEALING WITH A SITUATION LIKE THE ONE FACED BY HIM . HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. DALMIA CEMENT LTD., REPORTED IN 254 ITR 377, ALSO HAD AN OCCASION TO APPRECIATE THE EXPRESSION COMMERCIAL EXPEDIENCY AND THE HONBLE HIGH DELHI HIGH COURT HAS OBSERVED AS UNDER :- AN EXPENDITURE TO WHICH ONE CANNOT APPLY AN EMPIRI CAL OR SUBJECTIVE STANDARD IS TO BE JUDGED FROM THE POINT OF VIEW OF A BUSINESSMAN AND IT IS RELEVANT TO CONSIDER HOW THE BUSINESSMAN HIMSELF TR EATS A PARTICULAR ITEM OF EXPENDITURE. THE TERM 'COMMERCIAL EXPEDIENCY' IS NO T A TERM OF ART. IT MEANS EVERYTHING THAT SERVES TO PROMOTE COMMERCE AN D INCLUDES EVERY MEANS SUITABLE TO THAT END. IN APPLYING THE TEST OF COMMERCIAL EXPEDIENCY, FOR DETERMINING WHETHER THE EXPENDITURE WAS WHOLLY AND EXCLUSIVELY LAID OUT FOR THE PURPOSE OF THE BUSINESS THE REASONABLENESS OF T HE EXPENDITURE HAS TO BE JUDGED FROM THE POINT OF VIEW OF THE BUSINESSMAN AN D NOT THE REVENUE (SEE CIT V. WALCHAND AND CO. (P.) LTD. ; J. K. WOOL LEN MANUFACTURERS V. CIT ; ALUMINIUM CORPORATION OF INDIA LTD. V. CIT AN D CIT V. PANIPAT WOOLLEN AND GENERAL MILLS CO. LTD. . BUT IT MUST NO T SUFFER FROM THE VICE OF COLLUSIVENESS OR COLOURABLE DEVICES. 12. IN THE PRESENT CASE, THE ASSESSEE WAS INCORPORA TED ON 27.02.2007. IT HAS BEEN MANUFACTURING PHARMACEUTICAL MACHINERIES, BUT OVER A PERIOD OF ITA NO. 952/AHD/2018 CEMACH MACHINERIES LTD VS.ITO FOR AY: 2014-15 11 TIME ITS PRODUCTS BECAME OUTDATED BECAUSE THE COMPE TITORS HAVE INTRODUCED NEW ALTERNATIVE PRODUCTS. THE CREDITORS, MORE PART ICULARLY SECURED CREDITORS, HAVE LAUNCHED RECOVERY PROCEEDINGS AGAIN ST THE ASSESSEE. THE ASSESSEE HAS POINTED OUT TO THE ASSESSING OFFICER T HAT SYNDICATE BANK HAS ISSUED A NOTICE ON 01.09.2013 UNDER SARFAESI ACT AN D THE ASSESSEE WAS UNDER TREMENDOUS PRESSURE FOR DISCHARGING LOAN LIAB ILITY. ITS SALES WERE DECLINING AND IT HAS TO SELL OFF ITS STOCK-IN-TRADE INCLUDING RAW-MATERIAL. IN SUCH CIRCUMSTANCES, IT IS HIGHLY IMPROBABLE THAT AN ASSESSEE WOULD RECEIVE MARKET PRICE, MORE SO, WHEN A MANUFACTURING UNIT IS SELLING ITS RAW-MATERIAL AND OTHER BYPRODUCTS ON CLOSURE OF ITS BUSINESS AND IT IS QUITE IMPOSSIBLE TO FETCH THE MARKET PRICE. WE COULD APPRECIATE THE CA SE OF REVENUE IF IT WAS ABLE TO LAY ITS HANDS ON PARTICULAR TRANSACTION AND COULD VERIFY FROM MAJOR SALES THAT THESE SALES HAVE NOT BEEN MATERIALIZED O N THE PRICES REFLECTED BY THE ASSESSEE IN ITS INVOICES, RATHER BUYERS HAVE PU RCHASED AT A HIGHER PRICE AND SOME UNDERPAYMENTS WERE MADE; AND NO EFFORTS WE RE TAKEN TO INQUIRE WITH THIS ANGLE. THE ASSESSING OFFICER SIMPLY ASSU MED THAT, SINCE THERE IS PROFIT ON SALE OF PLANT AND ASSETS, THE ASSESSEE MU ST HAVE MANIPULATED SALE OF STOCKS & ASSETS AND SHOWN THE SAME AT A LESSER P RICE. THERE SHOULD BE A DEMONSTRATIVE PROOF OF THIS ASSUMPTION EITHER ON THE BASIS OF DIRECT EVIDENCES OR ON THE BASIS OF CIRCUMSTANTIAL EVIDENC ES - MORE SO IN A SITUATION WHERE THE ASSESSEE WAS UNABLE TO MANUFACTURE THE PR ODUCTS ON ACCOUNT OF FINANCIAL CRUNCH AND GOING TO CLOSE-DOWN THE BUSINE SS. AT THE TIME OF HEARING, IT WAS BROUGHT TO OUR NOTICE THAT EVEN THE SALE PROCEEDINGS FROM THE ASSETS HAVE NOT COME TO THE DIRECTORS. IT WAS TOTAL LY UTILIZED FOR THE PURPOSE OF REPAYMENT OF EXISTING LOANS. THEREFORE, IN OUR V IEW, THE ASSESSEE HAS RIGHTLY DEMONSTRATED THE LOSS SUFFERED BY IT ON SAL E OF STOCK AND THE LEARNED ASSESSING OFFICER FAILED TO BRING SUFFICIENT EVIDEN CE TO DOUBT THESE TRANSACTIONS. WE, THEREFORE, ALLOW THIS GROUND OF APPEAL AND DELETE THE DISALLOWANCE AMOUNTING TO RS.6,72,66,732/-. IN OTH ER WORDS, LEARNED ITA NO. 952/AHD/2018 CEMACH MACHINERIES LTD VS.ITO FOR AY: 2014-15 12 ASSESSING OFFICER SHALL TREAT THIS LOSS AS GENUINE AND GIVE CONSEQUENTIAL BENEFIT OF SET OFF, IF ANY, AVAILABLE TO THE ASSESS EE. 13. IN GROUND NO.2, THE ASSESSEE HAS PLEADED THAT L EARNED CIT(A) HAS ERRED IN NOT DELETING THE DISALLOWANCE OF RS.14,47, 707/-. THIS DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER WITH THE AID OF S ECTION 40(A)(IA) OF THE ACT ON THE GROUND THAT THE ASSESSEE HAS MADE PAYMEN T OF INTEREST TO VARIOUS FINANCIAL INSTITUTIONS AND FAILED TO DEDUCT THE TDS . NO ARGUMENTS WERE ADVANCED ON THIS ASPECT AND THERE IS NO EXPLANATION WITH THE ASSESSEE. THEREFORE, THIS GROUND OF APPEAL IS REJECTED. 14. IN GROUND NO.3, THE GRIEVANCE OF THE ASSESSEE I S THAT LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.5,89,375 /-, WHICH WAS ADDED BY THE ASSESSING OFFICER WITH THE HELP OF SECTION 40A( 3) OF THE ACT. 15. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE HAS MADE PAYMENTS TO FIVE PERSONS/ENTITIES AMOUNTING TO RS.5,89,375/-. THESE PAYMENTS HAVE BEEN MADE IN EXCESS OF RS.20,000/- AND THESE WERE M ADE WITHOUT ACCOUNT PAYEE CHEQUE. THEREFORE, ACCORDING TO THE ASSESSIN G OFFICER, THE ASSESSEE HAS COMMITTED A DEFAULT WITHIN THE MEANING OF SECTI ON 40A(3) OF THE ACT. HE, THEREFORE, DISALLOWED THE CLAIM OF THE ASSESSEE . APPEAL TO THE LEARNED CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 16. BEFORE US, LEARNED COUNSEL FOR THE ASSESSEE SUB MITTED THAT, ON THE GENUINENESS OF EXPENDITURE AND GENUINENESS OF THE P AYMENTS, NO OBJECTION WAS RAISED BY THE ASSESSING OFFICER. THEREFORE, THE EXPENSE DESERVES TO BE ALLOWED TO THE ASSESSEE. HE MADE REFERENCE TO RULE 6DD (J). LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF I TAT, DELHI BENCH IN THE CASE OF KGL NETWORK (P) LTD VS. ACIT, REPORTED IN [2018] 97 TAXMANN.COM 400 (DELHI TRIB). HE ALSO RELIED UPON THE JUDGMENT OF TRIBUNAL IN THE CASE OF ITA NO. 952/AHD/2018 CEMACH MACHINERIES LTD VS.ITO FOR AY: 2014-15 13 A. DAGA ROYAL ART VS. ITO, REPORTED IN [2018] 94 TA XMANN.COM 401 JAIPUR - TRIB.). ON THE OTHER HAND, LEARNED DEPARTMENTAL RE PRESENTATIVE RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES. 17. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS A ND GONE THROUGH THE RECORD CAREFULLY. THE ITAT, DELHI BENCH IN THE CAS E OF KGL NETWORK (P) LTD (SUPRA) HAS OBSERVED THAT, THOUGH THERE IS AN AMEND MENT IN RULE 6DD OF THE INCOME-TAX RULES IN THE YEAR 2008, BUT SECTION 40A( 3) OF THE INCOME-TAX ACT ITSELF PROVIDES AN EXCEPTION ON ACCOUNT OF NATURE A ND EXTENT OF BANKING FACILITIES AVAILABLE, CONSIDERATION OF BUSINESS EXP EDIENCY AND OTHER RELEVANT FACTORS. IN THE PRESENT CASE, NO SUCH FACTORS HAVE BEEN POINTED OUT. THE ASSESSEE IS HAVING NUMBER OF BANK ACCOUNTS. IT IS OPERATING IN AN AREA WHERE BANKING FACILITIES ARE AVAILABLE. NO BUSINESS EXPEDIENCY HAS BEEN POINTED OUT, BECAUSE IT HAS ALREADY SOLD ALL OF ITS STOCK, THEN WHAT WAS A COMPULSION TO THE ASSESSEE TO MAKE PAYMENTS TO THES E FIVE ENTITIES WITHOUT ACCOUNT PAYEE CHEQUE. IT HAS COMMITTED A DEFAULT W ITHIN THE MEANING OF SECTION 40A(3) OF THE ACT WHICH CONTEMPLATES THAT I F AN ASSESSEE INCURS ANY EXPENDITURE IN RESPECT OF WHICH A PAYMENT OR AGGREG ATE OF PAYMENTS MADE TO A PERSON IN A DAY, OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR DRAFT EXCEEDS RS.20,000, NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF SUCH EXPENDITURE. THE CASE OF THE ASSESSEE DULY FALLS W ITHIN THIS CLAUSE AND, THEREFORE, IT IS NOT ENTITLED FOR ANY DEDUCTION. H ENCE, THIS GROUND OF APPEAL IS REJECTED. 18. IN GROUND NO.4, THE GRIEVANCE OF THE ASSESSEE I S THAT LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.1,69,608 /-. 19. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE HAS RECEIVED INTEREST OF RS.1,69,608/- FROM INTEC CAPITAL LTD., BUT THIS INC OME HAS NOT BEEN ACCOUNTED FOR BY THE ASSESSEE. THE ASSESSEE HAS CON TENDED THAT A DISPUTE ITA NO. 952/AHD/2018 CEMACH MACHINERIES LTD VS.ITO FOR AY: 2014-15 14 WAS PENDING WITH INTEC CAPITAL LTD AND IT HAS NOT R ECEIVED THIS AMOUNT. LEARNED CIT(A) HAS CONFIRMED THIS ADDITION ON THE G ROUND THAT THE ASSESSEE HAS BEEN FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNT ING. IT HAS ALREADY RECOGNIZED THIS ACCOUNT OF THE ASSESSEE; THEREFORE, THIS SHOULD ALSO HAVE BEEN ACCOUNTED FOR THE PURPOSE OF INCOME-TAX ALSO. AFTE R GOING THROUGH THE WELL REASONED FINDINGS OF THE LEARNED CIT(A), WE DO NOT FIND ANY FORCE IN THE SUBMISSIONS OF THE ASSESSEE. ACCORDINGLY, THIS GROU ND OF THE ASSESSEE IS ALSO REJECTED. 20. IN GROUND NO.5, THE GRIEVANCE OF THE ASSESSEE I S THAT LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.70,723/- U/S. 36(1)(VA) OF THE ACT. A PERUSAL OF THE RECORD WOULD INDICATE THAT THE ASS ESSEE FAILED TO DEPOSIT EMPLOYEES CONTRIBUTION TO ESIC AND PF ACCOUNT WITH IN THE DUE DATE PROVIDED UNDER THOSE ACT. HENCE, LEARNED ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF DEDUCTION. LEARNED CIT(A) CONFIRMED T HE DISALLOWANCE BY FOLLOWING THE DECISION OF HONBLE JURISDICTIONAL HI GH COURT IN THE CASE OF CIT VS. GUJARAT STATE ROAD TRANSPORT CORPORATION, R EPORTED IN 366 ITR 170 (GUJ) SINCE THE ASSESSEE FAILED TO DEPOSIT THE EMPL OYEES CONTRIBUTION WITHIN THE DUE DATE PROVIDED UNDER ESIC & PF ACT. THEREFO RE, IN VIEW OF THE HONBLE GUJARAT HIGH COURT JUDGMENT (SUPRA), LEARNE D CIT(A) HAS NOT COMMITTED ANY ERROR BY PUTTING RELIANCE UPON THIS D ECISION. IN VIEW OF THE ABOVE, THIS GROUND OF ASSESSEES APPEAL IS ALSO REJ ECTED. 21. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 11 TH DECEMBER 2019 AT AHMEDABAD. SD/- S D/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 11/12/2019 BIJU T., SR.PS ITA NO. 952/AHD/2018 CEMACH MACHINERIES LTD VS.ITO FOR AY: 2014-15 15 ! &'( )( / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! # / CONCERNED CIT 4. # ( ) / THE CIT(A) 5. & ! , ! , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT. REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION- 10.12.2019.. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .10.12.2019.. OTHER MEMBER 11.12.2019. 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. - 11.12.2019.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 11.12.2019.. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK11. 12.2019 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER 8. DATE OF DESPATCH OF THE ORDER