ACIT, New Delhi V. M/s. DCS International Trading, New Delhi

ITA 98/DEL/2012

• Counselvise Citation: 9820114 RSA 2012
• Duration Of Justice: 1 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 30-09-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 06-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Assessee Lawyers: SURESH ANANTHARAMAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI J.S. REDDY ITA NO. 98/DEL/2012 A.YR. 2008-09 ACIT CIR. 33(1), VS. M/S DCS INTERNATIONAL TRAD ING, NEW DELHI. 33/33A, RAMA ROAD, INDUSTRIAL AREA, SHIWAJI MARG, NEW DELHI. PAN: AAAFD 5340 C AND ITA NO. 694/DEL/2012 A.YR. 2008-09 M/S DCS INTERNATIONAL TRADING, VS. ACIT CIR. 33(1 ), 33/33A, RAMA ROAD, INDUSTRIAL AREA, NEW DELHI. SHIWAJI MARG, NEW DELHI. ( APPELLANT ) ( RESPONDENT ) DEPARTMENT BY : SHRI SAMEER SHARMA SR. DR ASSESSEE BY : SHRI SURESH ANANTHARAMAN CA O R D E R PER R.P. TOLANI, J.M: : THESE ARE CROSS APPEALS ONE BY THE ASSESSEE AND T HE OTHER BY THE REVENUE AGAINST CIT(A)S ORDER DATED 31-10-2011 REL ATING TO A.Y. 2008-09. RESPECTIVE GROUNDS ARE AS UNDER: 2 REVENUES APPEAL (ITA NO. 98/DEL/2012): 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE I N THE HANDS OF THE FIRM UNDER SECTION 40(B) OF SALARY/ REMUNERATION TO PARTNERS. CIT(A) CITING THE CASE OF DURGA DASS DEVKI NANDAN VS. ITO, PALAMPUR REPORTED IN (20 11) 200 TAXMAN 318 AND HIS ORDER ON THE ISSUE IS PERVER SE IN VIEW OF THE FACT THAT THE MATTER IS SQUARELY COVERE D BY THE JURISDICTIONAL HIGH COURT VIZ. THE HONBLE DELHI HI GH COURT IN ITS DECISION IN ITA NO. 1154 OF 2011 IN THE CASE OF M/S SOOD BRIJ & ASSOCIATES VS. CIT, XIII, NEW DELHI, DE CISION DATED 04-11-2011 IN THE FAVOUR OF REVENUE. 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE IN TH E HANDS OF THE FIRM UNDER SECTION 40(B) OF SALARY/ REMUNERA TION TO PARTNERS ON THE GROUND THAT HE SALARY TO PARTNERS H AD BEEN ALLOWED IN THE EARLIER ASSESSMENT YEAR IS PERVERSE AND CIT(A) HAS ERRED IN THUS DELETING THE DISALLOWANCE SINCE THE ISSUE WAS EXAMINED IN DEEP SCRUTINY IN THE A.Y. 200 8-09 AND CASES FOR ALL POSSIBLE YEARS REOPENED ON THE GROUND S OF ESCAPEMENT OF INCOME DUE TO SALARY/ REMUNERATION TO PARTNERS WHICH REQUIRED TO BE DISALLOWED IN THE HAN DS OF THE FIRM U/S 40(B). 3. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE CIT(A) HAS ERRED IN HIS ORDER AND THE CIT(A)S ORDE R IS PERVERSE IN RESPECT OF THE DISALLOWANCE OF RS. 7,70 ,677/- U/S 40(A)(IA) OF THE ACT AS THE ASSESSEE HAD NOT DEPOSI TED THE TDS PAYABLE IN THE GOVERNMENT ACCOUNT BEFORE 31-03- 2008 THOUGH THE AMOUNTS WERE DEDUCTED PRIOR TO 29-02-200 8, WHEREBY THOUGH UPHOLDING THE ADDITION, CIT(A) HAS D IRECTED GRANTING THE DEDUCTION OF THE SAID EXPENDITURE IN T HE AY 2009-10 SINCE THE DEDUCTION FOR AY 2009-10 IS TO BE DECIDED IN THE ASSESSMENT FOR THE AY 2009-10 AND CIT(A) CAN NOT GIVE A DIRECTION FOR THE SAME IN THE ASSESSMENT YEA R 2008- 09. 3 ASSESSEES APPEAL (ITA NO. 694/DEL/2012) : THE LOWER AUTHORITIES HAS ERRED ON FACTS AND ON LA W BY MAKING ADDITIONS ON ACCOUNT OF EXPENSE OF RS. 7,70,677/- CORRESPONDING TO TDS PAYABLE AMOUNT OF RS. 17,294/- IGNORING AVAILABLE TAX CHALLANS AND OTHER MATERIALS AVAILABL E ON RECORD. 2. THE GROUNDS WILL REVEAL THAT GROUND NO. 3 OF THE REVENUES APPEAL AND SOLE GROUND RAISED BY THE ASSESSEE ARE IN RESPECT O F DISALLOWANCE U/S 40(A)(IA) OF THE I.T. ACT. 3. APROPOS FIRST TWO REVENUES GROUNDS, THE ASSESSI NG OFFICER DISALLOWED THE SALARY/ REMUNERATION PAID BY THE ASSESSEE PARTN ERSHIP FIRM TO ITS PARTNERS U/S 40(B)(V) ON THE GROUND THAT THE PARTNE RSHIP DEED DOES NOT CLEARLY SPECIFY THE SCALE OF REMUNERATION PAYABLE TO PARTNE RS. 3.1. AGGRIEVED, ASSESSEE PREFERRED FIRST APPEAL WHE RE IT WAS PLEADED THAT CLAUSE 6 OF THE PARTNERSHIP DEED CLEARLY PROVIDED T HE SCALE OF REMUNERATION PAYABLE BY THE ASSESSEE AS UNDER: 6. THAT ALL THE PARTIES SHALL BE WORKING PARTNERS AND THEY SHALL BE PAID AN ANNUAL REMUNERATION IN COMMENSURAT E WITH THEIR TIME DEVOTED AND SERVICES PROVIDED BY THEM FO R CARRYING ON BUSINESS OF THE FIRM AND THEY SHALL BE ALLOWED T O WITHDRAW SUCH AMOUNTS DURING THE YEAR FOR THEIR PERSONAL EXP ENSES, WHICH SHALL BE ADJUSTED AGAINST THEIR ANNUAL REMUNE RATION. AND THE ABOVE REMUNERATION CAN BE LESS/MORE ACCORDING T O THE BUSINESS OF THE FIRM, SUBJECT TO THE LIMITS PRESCRI BED UNDER THE PROVISIONS OF SECTION 40(B) OF THE INCOME TAX ACT, 1961 TO WHICH EACH OF THE WORKING PARTNER IS ENTITLED TO AS UNDER:- 4 I) THE REMUNERATION PAYABLE TO THE PARTNERS SHALL B E CALCULATED AT PERCENTAGE OF THE INCOME OF SUCH ACCOUNTING PERIOD AS MAY BE PRESCRIBED UNDER THE INCOME TAX ACT, 1961 OR ANY OTHER PROVISION AS MAY BE IN FORCE IN THE INCOME TAX ASSESSMENT OF THE PARTNERS HIP FIRM FOR THE RELEVANT ACCOUNTING PERIOD. II) AND FOR THE PURPOSE OF ABOVE CALCULATION INCOM E, OTHER THAN LONG TERM CAPITAL GAIN, SHALL BE COMPUTED AS D EFINED IN EXPLANATION 3 TO SECTION 40(B) OF THE INCOME TAX ACT, 1961 OR ANY OTHER PROVISION, AS MAY BE IN FORCE, IN THE INCOME TAX ASSESSMENT OF THE PARTNERSHIP FIRM FOR T HE RELEVANT ACCOUNTING PERIOD. III) NONE OF THE PARTNERS SHALL BE ENTITLED TO DRAW ANY REMUNERATION IN THE ACCOUNTING PERIOD IN WHICH THE PARTNERSHIP FIRM HAS SUFFERED LOSS ON THE BASIS OF THE INCOME AS COMPUTED UNDER THE PROVISION OF THE INCOM E TAX ACT, 1961 REFERRED TO IN CLAUSE 6(II) ABOVE. 3.2. CIT(A) RELIED ON THE HONBLE HIMACHAL PRADESH HIGH COURT JUDGMENT IN THE CASE OF DURGA DASS DEVKI NANDAN VS. ITO (201 1) 200 TAXMAN 318 AND DELETED THE ADDITION BY FOLLOWING OBSERVATIONS: 3.1. THE FACTS OF THIS CASE ARE EXACTLY IDENTICAL AS THE A.O. AHS DISALLOWED DEDUCTION UNDER 40(B)(V) OF THE ACT ON T HE GROUND THAT THE PARTNERSHIP DEED DOES NOT SPECIFY THE AMOUNT OF THE SALARY REQUIRED TO BE PAID TO EACH OF THE WORKING PARTNERS NOR SPECIFY THE METHOD OF QUANTIFICATION OF SALARY TO THE WORKING PARTNERS. A CCORDING TO THE DETAILS FILED BY THE AR OF THE APPELLANT THE MAXIMU M ALLOWABLE SALARY TO PARTNERS AS PER THE PROVISION OF 40(B)(V)(1) OF THE ACT IS QUANTIFIED AS FOLLOWS: PROFIT BEFORE REMUNERATION 7318230 1. RS. 50,000/- OR 90% OF THE FIRST 100000 OF BOOK PROFIT, 90000 2. 60% OF THE NEXT 100000 OF THE BOOK PROFIT. 600 00 3. 40% OF BALANCE AMOUNT OF BOOK PROFIT(7118230X0.4 ) 2847292 MAXIMUM ALLOWABLE SALARY TO PARTNERS 2997292 5 3.2. AGAINST THIS, THE APPELLANT HAS CLAIMED ONLY R S. 7,20,000/- AS SALARY TO PARTNERS AND THE ENTIRE AMOUNT WAS DISALL OWED BY THE A.O. FOLLOWING CIRCULAR NO. 739 DATED 25-03-1996. FURTHE R, THE APPELLANTS AR HAS POINTED OUT THAT THE PREVIOUS ASSESSMENT YEA R, THE SIMILAR CLAIM OF SALARY PAID TO WORKING PARTNERS AMOUNTING TO RS. 7,20,000/- WAS ALLOWED IN THE ASSESSMENT ORDER PASSED U/S 143( 3) ON 07-10- 2009. THE COPY OF THE ASSESSMENT ORDER WAS ALSO SUB MITTED. FOLLOWING THE ABOVE DECISION OF THE HONBLE HIGH COURT OF HIM ACHAL PRADESH, THE SALARY PAID TO PARTNERS IS ALLOWED SINCE THE SA ME DO NOT EXCEED THE MAXIMUM PERMISSIBLE AS PER SECTION 40(B)(V)(1) OF THE I.T. ACT, 1961. AS A RESULT, THE APPELLANT SUCCEEDS IN GROUND NO. 1 AND THE A.O. IS HEREBY DIRECTED TO ALLOW THE DEDUCTION OF RS. 7, 20,000/- PAID AS SALARY TO WORKING PARTNERS. AGGRIEVED, REVENUE IS BEFORE US. 4. LD. DR CONTENDS THAT THE SPECIFICATION OF REMUNE RATION PROVIDED IN ASSESSEES PARTNERSHIP DEED IS NOT CLEAR AND SPECI FIC, THEREFORE, THE SAME HAS BEEN RIGHTLY DISALLOWED BY ASSESSING OFFICER IN TER MS OF SECTION 40(B). RELIANCE IS PLACED ON HONBLE DELHI HIGH COURT JUDG MENT IN THE CASE OF SOOD BRIJ & ASSOCIATES VS. CIT (ITA NO. 1154 OF 201 1 ORDER DATED 4-11- 2011), WHICH IS IN FAVOUR OF THE REVENUE. IN THAT C ASE THE HONBLE DELHI HIGH COURT HELD THAT REMUNERATION OF THE PARTNERS WAS NO T PROPERLY SPECIFIED IN THE PARTNERSHIP DEED, THEREFORE, THE SAME WAS DISAL LOWED. 5. LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, CONTENDS THAT THE JUDGMENT IN THE CASE OF SOOD BRIJ & ASSOCIATES (SUP RA) IS NOT APPLICABLE TO THE FACTS OF ASSESSEES CASE INASMUCH AS IT WAS A Q UESTION OF SUPPLEMENTARY PARTNERSHIP DEED DATED 1-4-1992. THE REMUNERATION C LAUSE OF THE PARTNERSHIP 6 DEED AS REPRODUCED IN THE ORDER OF HIGH COURT IS TO TALLY DIFFERENT THAN THE ASSESSEES PARTNERSHIP DEED CLAUSES IN THIS BEHALF. IN THE CASE OF SOOD BRIJ & ASSOCIATES (SUPRA), THE SAME ARE AS UNDER: 1. THAT SUBJECT TO MUTUAL CONSENT OF THE PARTNERS, AND SUBJECT TO THE PROVISIONS OF THE INCOME TAX ACT, 96 1, THE WORKING PARTNER OR PARTNERS SHALL BE PAID SUCH REMU NERATION AS MAY BE MUTUALLY AGREED BETWEEN THEMSELVES, FROM TIM E TO TIME, AND SUCH REMUNERATION SHALL BE DEDUCTIBLE EXPENSE B EFORE ARRIVING A THE SHARE OF THE PARTNERS AS ALLOCABLE F ROM THE NET PROFITS. 2. THAT BOTH THE PARTNERS (HEREINAFTER REFERRED AS WORKING PARTNERS), SHALL DEVOTE THEIR TIME AND ATTENTION IN THE CONDUCT OF THE AFFAIRS OF THE PARTNERSHIP FIRM, AS THE CIRCUMS TANCES AND NEED OF THE FIRMS BUSINESS MAY REQUIRE. THE TOTAL R EMUNERATION PAYABLE TO THE WORKING PARTNERS SHALL BE AN AMOUNT PERMISSIBLE AS REMUNERATION TO THE WORKING PARTNERS UNDER THE I NCOME TAX ACT, 1961 AND AS APPLICABLE FROM TIME TO TIME. 5.1. IN PARA 10 OF THE ORDER THE HONBLE HIGH COURT AFTER READING VARIOUS CLAUSES OF THE PARTNERSHIP DEED AND SUPPLEMENTARY P ARTNERSHIP DEED, FOLLOWING HAS BEEN HELD: 10. THE QUESTION IS WHETHER THE SECOND SENTENCE OF CLAUSE 2 OF THE SUPPLEMENTARY PARTNERSHIP DEED READ WITH CLAUSE 7 OF THE PARTNERSHIP DEED, WHICH STATES THAT THE PROFIT S AND LOSSES WILL BE EQUALLY DIVIDED AND BORNE BY THE PARTNERS, SATISFIES THE REQUIREMENTS OF SECTION 40(B)(V). IN OTHER WORDS, W HETHER THE TWO CLAUSES READ TOGETHER QUANTIFY OR STIPULATE THE MANNER OF QUANTIFYING THE REMUNERATION THAT IS PAYABLE TO THE PARTNERS? HAVING EXAMINED THE SAID CLAUSES, WE FEEL THAT ON C ONJOINT READING OF CLAUSE 7 OF THE PARTNERSHIP DEED DATED 1 ST MAY, 1976 AND CLAUSE 1 AND 2 OF THE SUPPLEMENTARY PARTNERSHIP DEED 7 DATED 1 ST APRIL, 1992, CONDITIONS OF SECTION 40(B)(V) ARE NO T SATISFIED. 5.2. THUS, IN THE CASE OF SOOD BRIJ & ASSOCIATES (S UPRA) THE CLINCHING DIFFERENCE BETWEEN THE SUPPLEMENTARY PARTNERSHIP DE ED CLAUSES 1 & 2 ARE THE WORDS, PARTNERS SHALL BE PAID SUCH REMUNERATION AS MAY BE MUTUALLY AGREED BETWEEN THEMSELVES, FROM TIME TO TIME. THUS, THE HIGH COURT HELD THE REMUNERATION TO BE NON SPECIFIC IN THAT CASE BE CAUSE SAME WAS LEFT TO THE DISCRETION OF THE PARTNERS. IN CONTRADISTINCTION, I N ASSESSEES CASE THE REMUNERATION IS CLEARLY SPECIFIED TO BE COMPUTED IN THE MANNER PROVIDED BY EXPLANATION 3 TO SECTION 40(B) OF THE I.T. ACT. THE REMUNERATION CLAUSE IS FURTHER CLARIFIED IN CLAUSES 3,4,5 & 6 OF THE PARTN ERSHIP DEED. 5.3. THE RELEVANT CLAUSES OF REMUNERATION IN THE CA SE OF SOOD BRIJ & ASSOCIATES (SUPRA) AND ASSESSEE BEING MATERIALLY DI FFERENT, THE DELHI HIGH COURT JUDGMENT IS NOT APPLICABLE TO ASSESSEES CASE . 6. APROPOS REVENUES GROUND NO. 2 LD. DR RELIED O T HE ORDER OF ASSESSING OFFICER. 7. LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, CONTENDS THAT IT HAS NOT BEEN DISPUTED THAT THE TDS IN QUESTION WAS PAID BY THE ASSESSEE TO THE GOVT. TREASURY ON 31-3-2008 I.E. LAST DAY OF THE AC COUNTING YEAR. THE ASSESSING OFFICER DISALLOWED THE EXPENDITURE ON THE ALLEGATION THAT THE TDS 8 THOUGH DEDUCTED IN EARLIER MONTHS, WERE NOT DEPOSIT ED WITHIN THE DUE DATE. CIT(A) HELD AS UNDER: 4.2. DURING THE APPELLATE PROCEEDINGS, THE APPELLA NTS AR RAISED AN ALTERNATIVE PLEA THAT DIRECTION MAY BE IS SUED TO THE A.O TO ALLOW THE EXPENDITURE OF RS. 7,70,677/- IN THE ASSESSMENT YEAR 2009-10. IN VIEW OF THE ABOVE DECIS ION OF ITAT SPECIAL BENCH WHICH MAKES IT CLEAR THAT EXPENDITURE INCURRED IS TO BE ALLOWED IN THE YEAR IN WHICH TDS IS DEPOSITED IN THE GOVERNMENT ACCOUNT AS PER PROVISION TO 40(A)(IA) OF THE I.T. ACT, 1961, I HEREBY DIRECT THE A.O TO GRANT THE DED UCTION OF EXPENDITURE OF RS. 7,70,677/- IN THE A.Y. 2009-10. HOWEVER, GROUND NO. 2 OF THE APPEAL IS REJECTED IN VIEW OF T HE ABOVE DECISION OF THE ITAT SPECIAL BENCH MENTIONED ABOVE . 7.1. THUS, THE CIT(A) THOUGH DISMISSED ASSESSEES G ROUND AT THE SAME TIME, GAVE A DIRECTION TO ALLOW THE SAME IN A.Y. 20 09-10. REVENUE IS AGGRIEVED PLEADING THAT CIT(A) DOES NOT HAVE POWER TO ISSUE SUCH DIRECTION. ON THE OTHER HAND, THE ASSESSEE IS AGGRIEVED CLAIMI NG THAT ONCE THE TDS FOR F.Y. 2007-08 IS DEPOSITED WITHIN THE FINANCIAL YEAR , THE SAME IS DUE COMPLIANCE OF TDS PROVISION AND NO DISALLOWANCE CAN BE MADE U/S 40(A)(IA). 8. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. APROPOS FIRST TWO GROUNDS OF T HE REVENUE REGARDING THE REMUNERATION PAID TO THE PARTNERS IN ACCORDANCE WIT H THE PARTNERSHIP DEED, IN OUR CONSIDERED VIEW THE TERMS AND CONDITIONS OF THE ASSESSEES PARTNERSHIP DEED ARE SPECIFIC AND CANNOT BE TERMED AS NON-SPECI FIC. RELIANCE PLACED BY 9 THE REVENUE ON THE CASE OF SOOD BRIJ & ASSOCIATES ( SUPRA) DOES NOT HELP THE REVENUES STAND AS IN THAT CASE, AS PER THE RELEVAN T TERMS AND CONDITIONS OF THE PARTNERSHIP DEED, THE REMUNERATION WAS TO BE PA ID AS MUTUALLY AGREED BY THE PARTNERS. THERE IS SIGNIFICANT DIFFERENCE IN TH E LANGUAGE OF TERMS AND CONDITIONS PARTNERSHIP IN BOTH THE CASES WHICH WE HAVE REPRODUCED ABOVE. IN VIEW THEREOF, WE SEE NO INFIRMITY IN THE ORDER O F CIT(A) ALLOWING THE CLAIM OF THE ASSESSEE U/S 40(B) OF THE I.T. ACT. RE LYING ON HONBLE HIMACHAL PRADESH HIGH COURT JUDGMENT IN THE CASE OF DURGA DA SS DEVKI NANDAN (SUPRA), THIS GROUND OF THE REVENUE IS DISMISSED. 9. APROPOS COMMON GROUND REGARDING ALLOWABILITY OF EXPENDITURE U/S 40(A)(IA) THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NARESH KUMAR (ITA NO. 218/2013 DATED 6-9-2013) HAS CONSIDE RED THE PROVISION OF SEC. 40(A)(IA) W.E.F. 1-4-2005 AND SUBSEQUENT AMEND MENTS. THE IMPUGNED YEAR IN THIS CASE IS ALSO 2008-09 WHICH IS SIMILAR TO ASSESSEES CASE. THE HONBLE HIGH COURT HAS HELD THAT SEC. 40(A)(IA) WIL L NOT BE ATTRACTED IN CASE WHERE RELEVANT TDS IS DEPOSITED BEFORE DUE DATE OF FILING OF THE RETURN BY FOLLOWING OBSERVATIONS: IN VIEW OF THE AFORESAID DISCUSSION IN PARAS 18,19 AND 20, IT IS APPARENT THAT THE RESPONDENT ASSESSEE DID NOT VI OLATE THE UNAMENDED SECTION 40(A)(IA) OF THE ACT. WE HAVE NOT ED THE AMBIGUITY AND REFERRED THEIR CONTENTION OF REVENUE AND REJECTED THE INTERPRETATION PLACED BY THEM. THE AME NDED PROVISIONS ARE CLEAR AND FREE FROM ANY AMBIGUITY AN D DOUBT. 10 THEY WILL HELP CURTAIL LITIGATION. THE AMENDED PROV ISION CLEARLY SUPPORT VIEW TAKEN IN PARAGRAPHS 17-20 THAT THE EXPRESSION SAID DUE DATE USED IN CLAUSE A OF PROV ISO TO UNAMENDED SECTION REFERS TO TIME SPECIFIED IN SECTI ON 139(1) OF THE ACT. THE AMENDED SECTION 40(A)(IA) EXPANDS A ND FURTHER LIBERALISES THE STATUS WHEN IT STIPULATES THAT DEDU CTIONS MADE IN THE FIRST ELEVEN MONTHS OF THE PREVIOUS YEAR BUT PAID BEFORE THE DUE DATE OF FILING OF THE RETURN, WILL CONSTITU TE SUFFICIENT COMPLIANCE. 9.1. IN THE ASSESSEES CASE TDS IS DEPOSITED WITHIN THE ACCOUNTING PERIOD ITSELF. IN VIEW OF THE FOREGOING, RESPECTFULLY FOL LOWING HONBLE DELHI HIGH COURT JUDGMENT IN THE CASE OF NARESH KUMAR (SUPRA), WE HOLD THAT THE ASSESSEES IMPUGNED EXPENDITURE CANNOT BE DISALLOWE D U/S 40(A)(IA) AND THE SAME IS TO BE ALLOWED. 10. IN THE RESULT, REVENUES APPEAL IS DISMISSED AN D ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 22-11-2013. SD/- SD/- ( J.S. REDDY ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 22-11-2013. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR 11