Ideal Sheet Metal Stamping & Pressing Pvt.Ltd., Ahmedabad V. The ACIT.,Circld-4, Ahmedabad

ITA 983/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0048 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 20-10-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 10-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Gross profit estimation; Capital asset converted into stock in trade; Business expenditure; Earning of tax free income; Corroborative evidences; Revenue expenditure; Capital expenditure
• Section: 143(3); 14A; 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMEDABAD BEFORE SHRI R.P. TOLANI, JM, & SHRI MANISH BORAD , AM. ITA NO. 983/AHD/2013 ASST. YEAR: 2009-10 IDEAL SHEET METAL STAMPING & PRESSING PVT. LTD., KALIDAS MILL COMPOUND, GOMTIPUR, AHMEDABAD. VS. ACIT, CIRCLE-4, AHMEDABAD APPELLANT RESPONDENT PAN AAACI 3670D AND ITA NO.1065/AHD/2013 ASST. YEAR 2009-10 DCIT, CIR-4, AHMEDABAD. VS. IDEAL SHEET METAL STAMPING & PRESSING PVT. LTD., KALIDAS MILL COMPOUND, GOMTIPUR, AHMEDABAD. APPELLANT RESPONDENT APPELLANT BY SHRI SANJAY R. SHAH, AR RESPONDENT BY SHRI K. MADHUSUDAN, SR. DR. DATE OF HEARING: 20/10/16 DATE OF PRONOUNCEMENT: 11/11/2016 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER . THESE CROSS APPEALS BY ASSESSEE AND REVENUE FOR AS ST. YEAR 2009-10 ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A )-VIII, AHMEDABAD, ITA NO. 983 & 1065/AHD/2013 ASST. YEAR 2009-10 2 DATED 22.01.2013 IN APPEAL NO.CIT(A)-VIII/ACIT/CIR. 4/193/11-12 ARISING OUT OF ORDER U/S 143(3) OF THE IT ACT, 1961 (IN SHORT THE ACT) FRAMED ON 25/11/2011 BY ACIT, CIRCLE-4, AHMEDABAD.. 2. THE FACTS OF THE CASE AS CULLED OUT FROM THE REC ORD ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN TH E BUSINESS OF MANUFACTURING OF TEXTILE MACHINERY, SPARE PARTS AN D AUTO MOBILE COMPONENTS. RETURN OF INCOME FOR ASST. YEAR 2009-10 WAS FILED ON 30 TH SEPTEMBER, 2009 DECLARING TOTAL INCOME AT RS.1,70, 40,858/-. CASE WAS SELECTED FOR SCRUTINY ASSESSMENT. NOTICE U /S 143(2) OF THE ACT WAS ISSUED AND DULY SERVED. NECESSARY QUESTIONN AIRE AND QUERY RAISED BY ASSESSING OFFICER WERE DULY REPLIED BY AS SESSEE FROM TIME TO TIME. INCOME WAS ASSESSED AT RS.2,29,34,267/- AF TER MAKING ADDITION OF RS.58,93,409/-. 3. APPEAL WAS PARTLY ALLOWED BY THE FIRST APPELLATE AUTHORITY. 4. NOW BOTH THE ASSESSEE AND REVENUE ARE IN CROSS A PPEALS BEFORE THE TRIBUNAL. 5. FIRST WE TAKE UP ASSESSEES APPEAL WHEREIN MODIF IED GROUNDS OF APPEAL WERE FILED ON 28.7.16 WHICH READ AS FOLLO WS:- 1.1 THE ORDER PASSED U/S 250 FOR AY 2009-10 ON 22- 1 -2013 BY THE CIT( A)-VIII, AHMEDABAD TO THE EXTENT CONFIRMING THE DISALLOWANCE S/ ADDITIONS IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUST ICE. 1.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN NOT CONS IDERING FULLY SAND PROPERLY THE SUBMISSIONS DT. 21-2-2013 FURNISHED BY THE APPELLAN T. ITA NO. 983 & 1065/AHD/2013 ASST. YEAR 2009-10 3 2.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN UPHOLDING THAT THE PROVISIONS OF SEC 14A R.W.R. 8D WERE ATTRACTED TO T HE FACTS OF THE PRESENT CASE. 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) OUGHT NOT TO HAVE UPHELD THE SEC. 14A R.W.R 8D BY AO. 3.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN UPHOLDING THE DISALLOWANCE U/S 14A AT RS.3,53,002/- AND THEREBY C ONFIRMING THE DISALLOWANCE OF RS.3,53,002/-. 3.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT( A) OUGHT NOT TO HAVE CONFIRMED THE DISALLOWANCE U/S 14A R.W. RULE 8D AT RS.3,53,002/-. 41. THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN UPHOLDING THE ADDITION U/S 41(1) AT RS.10,33,414/-. 4.2 THE LD. CIT(A) HAS ERRED IN UPHOLDING THAT THE PROVISIONS OF SEC. 41(1) WERE ATTRACTED TO THE OUTSTANDING BALANCES OF CREDITORS, THOUGH TH E LIABILITY HAD NOT CEASED NOR WRITTEN BACK IN THIS YEAR. 5. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING DISALLOWANCE OF RS.60,000/- MADE U/S 40(A)(IA) BY AO. IT IS PRAYED THAT THE DISALLOWANCE/ ADDITIONS AS CO NFIRMED BY CIT(A) MAY PLEASE BE DELETED OR 6. GROUND NO.1 IS OF GENERAL NATURE, WHICH NEEDS NO ADJUDICATION. 7. GROUND NO.2 WHEREIN ASSESSEE HAS CHALLENGED THE ORDER OF LD. CIT(A) FOR UPHOLDING THE DISALLOWANCE U/S 14A AT RS .3,53,002/-. 8. LD. AR SUBMITTED THAT DISALLOWANCE OF RS.12,58,4 30/- WAS MADE BY ASSESSING OFFICER U/S 14A IN ADDITION TO RS .25,000/- DISALLOWED BY THE ASSESSEE SUO MOTU BEING EXPENDITU RE TOWARDS EARNING EXEMPT INCOME. LD. CIT(A) DELETED A PORTION OF DISALLOWANCE OF INTEREST EXPENDITURE AT RS.2,67,87/- BY TAKING A VIEW THAT ASSESSEE HAS EARNED NET INTEREST INCOME DURING THE YEAR I.E. INTEREST RECEIVED WAS OVER AND ABOVE THE INTEREST PAID AND, THEREFORE , NO DISALLOWANCE WAS MADE TOWARDS INTEREST EXPENDITURE. AS REGARDS D ISALLOWANCE ITA NO. 983 & 1065/AHD/2013 ASST. YEAR 2009-10 4 UNDER RULE 8D(III) OF IT RULES, LD. CIT(A) RESTRICT ED THE CALCULATION OF 0.5% TO AVERAGE VALUE OF INVESTMENT BY REPLACING TO TAL AVERAGE INVESTMENT FETCHING EXEMPT INCOME AS AGAINST TOTAL AVERAGE INVESTMENTS OF THE ASSESSEE AS A RESULT OF WHICH DI SALLOWANCE OF RS.9,90,552/- UNDER RULE 8D(III) WAS SUSTAINED TO R S.3,53,002/-. LD. AR FURTHER SUBMITTED THAT THERE HAS BEEN NO SPECIFI C EXPENDITURE INCURRED BY ASSESSEE TOWARDS TAX FREE INVESTMENT AN D RS.25,000/- OFFERED BY ASSESSEE IS SUFFICIENT TO COVER UP THE I NTEREST COST AND IN LACK OF SPECIFIC FINDING BY ASSESSING AUTHORITY ABO UT THE EXPENDITURE DIRECTLY OR INDIRECTLY RELATING TO HAVE BEEN SPENT FOR MANAGING THE INVESTMENT NO DISALLOWANCE WAS CALLED FOR UNDER RUL E 8D(III) OF THE RULES. 9. ON THE OTHER HAND, LD. DR COULD NOT CONTROVERT T HE SUBMISSIONS MADE BY LD. AR TOWARDS THE DISALLOWANCE OF INTEREST UNDER RULE 8D(II) BUT STRONGLY OBJECTED THE CONTENTIONS OF LD. AR TH AT NO DISALLOWANCE IS CALLED FOR UNDER RULE 8D(III) OF THE RULES BY SU BMITTING THAT SINCE W.E.F. ASST. YEAR 2008-09 RULE 8D HAS BEEN AMENDED WITH THE INSERTION OF THE NEW METHOD AND THE SAME NEEDS TO H AVE BEEN APPLIED. LD. DR FURTHER SUBMITTED THAT ASSESSEE IN APPEAL BEFORE LD. CIT(A) HAS ITSELF REQUESTED TO GIVE DIRECTION TO DI SALLOW MAXIMUM OF RS.3,53,002/- WHICH ITSELF MEANS THAT TO THE EXTENT OF RS.3,53,002/- ASSESSEE IS AGREED FOR THE DISALLOWANCE. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE RAISED IN THIS MODIFIED GROUND IS RELATING TO DISALLOWANCE UPHELD BY LD. CIT(A) AT RS.3,53,002/-. WE FIND THAT ITA NO. 983 & 1065/AHD/2013 ASST. YEAR 2009-10 5 ASSESSEE HAS EARNED TAX FREE INTEREST INCOME OF RS. 55,02,903/- AND DIVIDEND INCOME AT RS.3,86,077/-. AVERAGE INVESTMEN T FETCHING TAX FREE INTEREST/DIVIDEND STOOD AT RS.6,56,70,485/-. W E FURTHER FIND THAT LD. CIT(A) DELETED DISALLOWANCE OF RS.2,67,878/- PR OVIDED UNDER RULE 8D(II) OF THE RULES TOWARDS INTEREST EXPENDITURE B Y OBSERVING THAT AT THE END OF THE YEAR ASSESSEE EARNED NET INTEREST IN COME I.E. INTEREST RECEIVED FOR THE YEAR AT RS.13,38,901/- AS AGAINST INTEREST PAID OF RS..3,71,352/- WHICH LEAVES NET INTEREST OF RS.9,67 ,549/-. WE FURTHER OBSERVE THAT LD. CIT(A) HAS RIGHTLY FOLLOWED THE DE CISION OF THE TRIBUNAL IN THE CASE OF DCIT V. M/S TRADE APARTMENT LTD. IN ITA NO.1277/KOL/2011 FOR ASST. YEAR 2008-09 PRONOUNCED ON 30 TH MARCH 2012 WHEREIN IT HAS BEEN HELD - 3. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS ALSO THE A PPLICABLE LEGAL POSITION. 4. AS LEARNED CIT(A) HAS RIGHTLY OBSERVED, ONCE THE RE IS NO NET INTEREST EXPENDITURE, AS IS THE CASE BEFORE US - UPON SETTING OFF INTEREST CRED ITED TO PROFIT AND LOSS ACCOUNT, NO PART OF INTEREST DEBITED CAN BE DISALLOWED AS ATTRIBUTABLE TO EARNING TAX FREE DIVIDEND. THE CIT(A) WAS THUS QUITE JUSTIFIED IN DELETING THE INT EREST DISALLOWANCE. WE HAVE ALSO NOTED THAT ENTIRE EXPENSES INCURRED BY THE ASSESSEE HAVE BEEN OFFERED FOR DISALLOWANCE, AND ONCE THAT HAPPEN, NOTHING REMAINS FOR FURTHER DISAL LOWANCE U/S. 14A. THE DISALLOWANCE UNDER SECTION 14A CAN COME INTO PLAY ONLY OUT OF EX PENSES CLAIMED FOR DEDUCTION AND EXPENSES HAVE BEEN CLAIMED FOR DEDUCTION, THERE CAN NOT BE ANY DISALLOWANCE EITHER. THE CONCLUSIONS ARRIVED AT BY THE CIT(A) ARE, THEREFORE , CORRECT AND ADMIT NO INTERFERENCE BY US. WE, APPROVE AND CONFIRM THE ORDER OF THE CIT(A) . RESPECTFULLY FOLLOWING THE ABOVE DECISION WE ARE IN CONSENSUS WITH THE VIEW TAKEN BY LD. CIT(A) DELETING THE DISALLOWA NCE OF INTEREST UNDER RULE 8D(III) OF THE RULES. 11. AS FAR AS DISALLOWANCE OF RS.3,53,002/- IS CONC ERNED IT HAS BEEN CALCULATED BY APPLYING 0.5% OF AVERAGE INVESTM ENT. FROM GOING ITA NO. 983 & 1065/AHD/2013 ASST. YEAR 2009-10 6 THROUGH THE AUDITED BALANCE SHEET OF THE ASSESSEE A ND MORE SPECIFICALLY SCHEDULE -5 AT PAGE 69 OF THE PAPER BO OK WE OBSERVE THAT THERE ARE VARIOUS INVESTMENTS REGULARLY MADE DURING THE YEAR IN THE MUTUAL FUNDS AND TAX FREE BONDS, SOME OF THEM ARE B ROUGHT FORWARD, SOME HAVE BEEN SOLD OUT AND IN SOME CASES THERE HAV E BEEN ADDITION TO THE PREVIOUS BALANCE. IN ALL REGULAR AC TIVITY IN THE INVESTMENT ACCOUNT HAS BEEN CARRIED OUT DURING THE YEAR AND CERTAIN AMOUNT OF EXPENDITURE TOWARDS ADMINISTRATIVE COST, SALARY EXPENDITURE, BANK CHARGES ETC. CANNOT BE IGNORED IN THE GIVEN CIRCUMSTANCES. FURTHER LOOKING TO THE PROVISIONS OF RULE 8D(III) R.W.S. 14A OF THE ACT WE BELIEVE THAT IT IS NOT EASY FOR T HE ASSESSING OFFICER TO GO INTO THE INTRICACIES OF THE BOOKS OF ACCOUNTS IN ORDER TO EXTRACT PARTICULAR DETAILS IN ORDER TO CALCULATE THE COST I NCURRED TOWARDS MANAGING INVESTMENT. IN ORDER TO CURE THIS SITUATIO N AMENDED RULE 8D COMES INTO FORE PLAY. WE FIND THAT AS PER RULE 8 D (III) AMOUNT OF RS.3,53,002/- HAS BEEN CALCULATED AND LOOKING TO TH E SIZE AND VARIETY OF INVESTMENTS, WE FIND THAT THE DISALLOWANCE HAS B EEN REASONABLY SUSTAINED BY LD. CIT(A). WE UPHOLD THE SAME. ACCORD INGLY, THIS GROUND OF ASSESSEE IS DISMISSED. 12. AS REGARDS GROUND NO.4, ASSESSEE IS AGGRIEVED W ITH THE ORDER OF LD. CIT(A) UPHOLDING THE ADDITION MADE U/S 41(1) OF THE ACT AT RS.10,33,414/-. BRIEF FACTS RELATING TO THIS GROUND ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS LD. ASSESSING OFFI CER OBSERVED THAT OUTSTANDING AMOUNT PAYABLE TO SEVEN PARTIES TO TALING TO RS.20,44,109/- ARE BEING BROUGHT FORWARD FROM LAST MANY YEARS AND NO PAYMENTS WERE MADE TO THESE PARTIES AFTER CREATI NG OF TRADING ITA NO. 983 & 1065/AHD/2013 ASST. YEAR 2009-10 7 LIABILITY. FURTHER NO TRANSACTIONS WERE ENTERED INT O WITH THESE SEVEN PARTIES. LD. ASSESSING OFFICER ALSO OBSERVED THAT A SSESSEE HAS NO WHEREABOUT OF THESE PARTIES AND THE CREDIT BALANCES OF THESE PARTIES MUST HAVE BEEN WRITTEN OFF AS INCOME IN THE BOOKS O F ACCOUNT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF ASSESSE E SPECIFICALLY FURNISHED REPLY WITH REGARD TO TWO OLD CREDIT BALAN CES WITH REGARD TO RS.5,49,929/- IN RESPECT OF PAL PEOGEOT LTD. AND RS .4,93,486/- IN RESPECT OF ORIENTAL TRANSPORT CO. SUBMITTING THAT T HERE WAS A DISPUTE WITH THESE PARTIES AND ASSESSEE MAY HAVE TO PAY THE SE OUTSTANDING BALANCES IN FUTURE. HOWEVER, NO SUPPORTING EVIDENCE WAS FURNISHED THEREIN. 13. WHEN THE ISSUE CAME UP BEFORE LD. CIT(A) IT WAS OBSERVED BY HIM THAT OUT OF THE IMPUGNED DISALLOWANCE U/S 41(1) OF THE ACT OF RS.22,44,109/- A SUM OF RS.12,10,695/- RELATED TO F IVE PARTIES WHO WERE EITHER PAID OFF/WRITTEN BACK AS INCOME AND ACC ORDINGLY DELETED THE SAME LEAVING BEHIND THE SUSTAINED DISALLOWANCE U/S 41(1) OF THE ACT TOWARDS TWO CREDITORS PAL PEOGEOT LIMITED RS. 5,,49,929/- AND ORIENTAL TRANSPORT CO. RS.4,93,486/-. LD. CIT(A) PA RTLY ALLOWED THIS GROUND BY OBSERVING AS FOLLOWS :- 5.3. I HAVE GONE THROUGH THE CONTENTION OF THE AO AND SUBMISSION MADE BY THE APPELLANT. BEFORE ME THE APPELLANT SUBMITTED TH AT OUT OF THE TOTAL ADDITION MADE BY THE AO FOR OUTSTANDING BALANCES OF CREDITOR S, SOME OF THEM HAVE BEEN PAID AND SOME OF THEM HAVE BEEN WRITTEN BACK IN THE SUBSEQUENT YEARS. REMAINING CREDITORS ARE PENDING BECAUSE OF DISPUTES WITH THEM. THE REPRESENTATIVE OF THE APPELLANT HAS SHOWN ME THE CO PY OF LEDGER ACCOUNTS OF CREDITORS FOR SUBSEQUENT YEARS WHICH ARE PLACED ON RECORDS IN PAPER BOOK. AS REGARDS THE TWO CREDITORS VIZ. PAL PEUGEOT LTD AND ORIENT TRANSPORT CO., WITH WHICH APPELLANT HAS DISPUTE, NO EVIDENCE HAVE BEEN PRODUCED BUT IT WAS EXPLAINED THAT THEY ARE TRYING TO SOLVE THE DISPUTE , THROUGH MEDIATOR. NO ADDITION ITA NO. 983 & 1065/AHD/2013 ASST. YEAR 2009-10 8 CAN BE SUSTAINED IN RESPECT OF CREDITORS WHICH HAVE BEEN PAID OR WRITTEN BACK IN SUBSEQUENT YEARS. IF IT IS SUSTAINED, THEN THERE WI LL BE DOUBLE TAXATION WHICH IS NOT PERMITTED IN THE LAW. AS FAR AS OUTSTANDING BAL ANCES OF TWO CREDITORS WHICH ARE IN DISPUTES THE APPELLANT HAS NOT PRODUCED ANY EVIDENCE IN THIS REGARD BEFORE. THEREFORE, I AM INCLINED TO CONFIRM THE ADD ITION MADE BY THE AO TO THE EXTENT OF THE DISPUTED OUTSTANDING BALANCE OF TWO C REDITORS I.E. PAL PEUGEOT LTD. 5,39,928 AND ORIENT TRANSPORT COMPANY RS.4,93,486 W HICH COMES TO RS. 10,33,414. IN VIEW OF THE ABOVE, THE AO IS DIRECTED TO DELETE THE REMAINING AMOUNT OF RS.12,10,695 (RS. 22,44,109-RS. 10,33,414 ). THIS GROUND OF APPEAL IS PARTLY ALLOWED. 14. AGGRIEVED, ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 15. LD. AR REITERATED THE SUBMISSIONS ABOUT THESE T WO PARTIES- PAL PEOGEOT LIMITED RS.5,,49,929/- AND ORIENTAL TRANSPO RT CO. RS.4,93,486/- THAT THERE WERE DISPUTES WITH THESE P ARTIES AND WOULD BE RESOLVED IN THE NEAR FUTURE BUT COULD NOT PLACE ANY OTHER MATERIAL EVIDENCE TO SUPPORT HIS CONTENTIONS. 16. ON THE OTHER HAND, LD. DR SUPPORTED THE ORDER O F ASSESSING OFFICER TO THE EFFECT THAT REVENUE HAS RAISED SIMIL AR TYPE OF GROUND IN THEIR APPEAL AGAINST THE ORDER OF LD. CIT(A) DELETI NG THE PART DISALLOWANCE U/S 41(1) OF THE ACT. 17. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE THROUGH THIS GROUND NO.4 RELATES TO ADDIT ION SUSTAINED AT RS.10,33,414/- BY LD. CIT(A) U/S 41(1) OF THE ACT. AS REFERRED ABOVE THAT THE DISALLOWANCE OF RS.22,44,109/- WAS MADE U/ S 41(1) OF THE ACT BY ASSESSING OFFICER. WHEN THE ISSUE CAME UP BEFORE LD. CIT(A) ASSESSEE SUBMITTED DETAILS SHOWING THE STATUS OF TH E IMPUGNED SUNDRY CREDITORS WHICH IS IN THE FORM OF TABLE AS M ENTIONED BELOW :- ITA NO. 983 & 1065/AHD/2013 ASST. YEAR 2009-10 9 SR. NO. PARTY NAME CL. BAL AS STATUS PAGE NOS. ON 1/03/2009 1. SS TRADERS 74,977.98 WRITTEN BACK ON 31/03/2011 2. MALIN& ASSOCIATES 11,14,547.00 PAYMENT MADE ON 24/11/2010 3. MASTER ENTERPRISE 6,969 WRITTEN BACK ON 1-4-2009 4. PAL PEUGEOT LTD. 5,39,928.96 THERE IS DISPUTE WITH PARTIES AND WILL BE RESOLVED WITHIN ONE OR '- TWO MONTHS. 5. UNIVERSAL ENGG, MFG. INDUSTRY 11,505 WRITTEN BACK AS ON 31 -OS- 2010 6. CHINUBHAI KALIDAS & BROS 20,695 (DR.) IT WAS DEBIT BALANCE WHICH IS ADJUSTED ON 1-4- 2009 AGAINST THE CREDIT BALANCE OF THE SAME PARTY. 7. ORIENT TRANSPORT 4,93,486 00 THERE IS DISPUTE WITH 18. ON THE BASIS OF ABOVE INFORMATION PROVIDED TO L D. CIT(A) BY ASSESSEE LD. CIT(A) DELETED THE ADDITION OF RS.12,1 0,695/- RELATING TO 5 PARTIES OTHER THAN PAL PEOGEOT LIMITED AND ORIENT AL TRANSPORT CO.WITH REGARD TO UNPAID BALANCE OF PAL PEOGEOT LIM ITED AND ORIENTAL TRANSPORT CO. A QUESTION WAS POSED TO LD. AR DURING THE COURSE OF HEARING BEFORE US THAT SINCE THE DATE OF ORDER OF LD. CIT(A) DATED 22.1.2013 WHEREIN IT WAS SUBMITTED THAT THE D ISPUTE ABOUT ITA NO. 983 & 1065/AHD/2013 ASST. YEAR 2009-10 10 ABOVE REFERRED TWO PARTIES WILL BE RESOLVED WITHIN ONE OR TWO MONTHS, THEN WHAT IS THE STATUS AS ON DATE I.E. WHETHER THE DISPUTE HAS BEEN RESOLVED AND THE IMPUGNED DUE HAS BEEN REPAID OR AN Y OTHER COMMUNICATION BETWEEN THE ASSESSEE AND THESE TWO PA RTIES EVIDENCING THAT THE DISPUTE IS STILL PERSISTING. TO THIS QUESTION LD. AR COULD NOT FAIRLY REPLY BUT REQUESTED STRONGLY TO RE LY ON THE JUDGMENT OF HON. JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V S. NITIN S. GARG (2012) 22 TAXMANN.COM 59 (GUJ) WHEREIN IT HAS BEEN HELD THAT MERELY BECAUSE LIABILITIES ARE OUTSTANDING FOR LAST MANY Y EARS IT COULD NOT BE INFERRED THAT SUCH LIABILITIES CEASED TO EXIST AND SINCE ASSESSEE HAD CONTINUED TO ADMITTING AMOUNTS AS LIABILITIES IN IT S BALANCE SHEET THE TRIBUNAL WAS JUSTIFIED IN DELETING THE IMPUGNED ADD ITION. AT THIS JUNCTURE WE FIND IT RELEVANT TO HAVE A GLANCE WITH THE OBSERVATIONS MADE BY HON. SUPREME COURT IN THE CASE OF CIT VS. SUGAULI SUGAR WORKS (P) LTD. IN CIVIL APPEAL NO.2344 OF 1992 WHE REIN IT WAS OBSERVED THAT WHETHER THE LIABILITY IS ACTUALLY BAR RED BY LIMITATION IS NOT A MATTER WHICH CAN BE DECIDED BY CONSIDERING TH E ASSESSEES CASE ALONE BUT HAS TO BE DECIDED ONLY IF THE CREDIT OR IS BEFORE THE CONCERNED AUTHORITY. IN THE ABSENCE OF THE CREDITOR , IT IS NOT POSSIBLE FOR THE AUTHORITY TO COME TO A CONCLUSION THAT THE DEBT IS BARRED AND HAS BECOME UNENFORCEABLE. IN THE LIGHT OF ABOVE OBS ERVATION OF HON. SUPREME COURT WE BELIEVE THAT IN THE GIVEN FACTS AN D CIRCUMSTANCES OF THE CASE BEFORE US ASSESSEE COULD NOT PROVE AT A NY POINT OF TIME THAT THERE EXISTED A LIABILITY TO BE PAID TO PAL PE OGEOT LIMITED AT RS.5,,49,929/- AND ORIENTAL TRANSPORT CO. AT RS.4,9 3,486/-. WE FIND THAT SINCE THE ASSESSMENT PROCEEDINGS TILL THE HEAR ING BEFORE THE TRIBUNAL WHICH HAS STRETCHED FOR ALMOST 5 YEARS THE RE HAS BEEN NO ITA NO. 983 & 1065/AHD/2013 ASST. YEAR 2009-10 11 CHANGE IN THE STATUS QUO PROVED BY ASSESSEE BEFORE VARIOUS AUTHORITIES. THE ASSESSEE IS SUBMITTING THAT THERE IS A DISPUTE AND LIABILITY MAY ARISE IN FUTURE. BUT IN SUPPORT THERE OF THERE IS NOT A SINGLE EVIDENCE. DURING THE COURSE OF HEARING BEFORE US, L D. AR REQUESTED TO PROVIDE ONE MORE OPPORTUNITY TO PROVE THE GENUINENE SS OF THE UNPAID LIABILITY OF RS.10,33,414/- PAYABLE TO TWO PARTIES. BEFORE US LD. DR RAISED NO OBJECTION AGAINST THE REQUEST MADE BY LD. AR. WE ARE, THEREFORE, OF THE VIEW IN THE GIVEN FACTS AND CIRCU MSTANCES OF THE CASE ONE LAST OPPORTUNITY MAY BE GIVEN TO ASSESSEE AND WE RESTORE THIS LIMITED ISSUE TO THE FILE OF ASSESSING OFFICER FOR VERIFYING UNPAID LIABILITY OF PAL PEOGEOT LIMITED RS.5,,49,929/- AND ORIENTAL TRANSPORT CO. RS.4,93,486/-. FURTHER WE DIRECT THE ASSESSEE A LSO TO SHOW ALL NECESSARY EVIDENCES AND DOCUMENTS TO PROVE THAT THE RE EXISTS A DISPUTE TO THE EXTENT OF IMPUGNED AMOUNT OF RS.10,3 3,414. IN CASE ASSESSEE IS UNABLE TO PROVE THE DISPUTE BOTH THESE PARTIES IN THE PAST THEN THE IMPUGNED AMOUNT OF RS.10,33,414/- WILL BE SUSTAINED AS AN ADDITION U/S 41(1) OF THE ACT. ACCORDINGLY, THIS GR OUND IS ALLOWED FOR STATISTICAL PURPOSES. 19. GROUND NO.5 NOT PRESSED, HENCE IT IS DISMISSED AS NOT PRESSED. 20. NOW WE TAKE UP REVENUES APPEAL IN ITA NO.1065/ AHD/2013 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE ADDITION TO RS. 10,33,414/- OUT OF RS. 22,44,109/- MADE U/S 41(1) OF THE L. T. ACT. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE ADDITION TO RS.3,53,002/- OUT OF RS. 12, 58,430/- MADE U/S 1 4A R.W.R. 8D WITHOUT APPRECIATING THE FACTS THAT THE ASSESSEE FAILED TO PRODUCE THE DAY-TO- ITA NO. 983 & 1065/AHD/2013 ASST. YEAR 2009-10 12 DAY MOVEMENT OF FUNDS TO ENABLE THE ASSESSING OFFIC ER TO ASCERTAIN THE SEGREGATION OF NATURE OF FUND. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E ; THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED TO TH E ABOVE EXTENT. 21. WE WILL DEAL THE GROUNDS AT SERIATUM. 22. GROUND NO.1 READS AS UNDER :- 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN D ELETING THE ADDITION MADE FOR LOW GP AMOUNTING TO RS.21.30,870/- EVEN WH EN NO SATISFACTORY EXPLANATION WAS GIVEN FOR THE: DECLINE IN GP BEFORE THE ASSESSING OFFICER. 23. DURING THE COURSE OF ASSESSMENT PROCEEDINGS LD. ASSESSING OFFICER TAKING THE BASIS OF LOWER G.P. IN PERCENTAG E TO LAST TWO YEARS G.P., DEDUCTION IN PERCENTAGE OF CONSUMPTION OF RAW MATERIAL, NON- RECONCILIATION OF BALANCE RELATING TO FEW PARTIES, ALTOGETHER LEAD TO A CONCLUSION BY ASSESSING OFFICER TO REJECT THE BOOKS RESULT OF THE ASSESSEE AND ESTIMATING NET PROFIT AT 13.84% AS AGA INST 12.15% SHOWN BY ASSESSEE AND MAKING ADDITION OF RS.21,30,8 70/-. 24. WHEN THE ISSUE CAME UP BEFORE LD. CIT(A) TOTAL ADDITION WAS DELETED, AS THE ASSESSEE WAS HAVING IMPUGNED GP IN PERCENTAGE FOR LAST THREE YEARS AVERAGE GP AND FURTHER THE UNRECON CILED BALANCES WERE RECONCILED WHICH OCCURRED DUE TO SOME ARITHMET ICAL ERROR AND THERE WAS NO OTHER MISTAKES POINTED OUT BY THE ASSE SSING OFFICER IN THE BOOKS OF ACCOUNT OF ASSESSEE. ITA NO. 983 & 1065/AHD/2013 ASST. YEAR 2009-10 13 25. AGGRIEVED, REVENUE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 26. LD. DR SUPPORTED THE ORDER OF ASSESSING OFFICER WHEREAS THE LD. AR RELIED ON THE ORDER OF LD. CIT(A). 27. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. REVENUE IS AGGRIEVED WITH THE ORDER OF C IT(A) ALLOWING ASSESSEES APPEAL IN DELETING THE ADDITION OF RS. 2 1,30,870/- MADE BY ASSESSING OFFICER BY REJECTING THE BOOKS OF ACCOUNT AND ADOPTING NET PROFIT RATE OF 13.84% AS AGAINST 12.15% SHOWN BY AS SESSEE. WE OBSERVE THAT LD. ASSESSING OFFICER TOOK BASIS OF LA ST TWO YEARS AVERAGE WHEREAS IN NORMAL COURSE OF ASSESSMENT PROC EEDINGS THREE YEARS AVERAGE IS TAKEN AS A BENCH MARK TO COMPARE T HE CURRENT YEARS G.P. AND N.P. RATE CONSISTENCY. WE FIND THAT BELOW GP RATE AND NP RATE FOR LAST THREE YEARS AS COMPARED TO ASS T. YEAR 2009-10 FOR WHICH REVENUE IS UNDER APPEAL :- PARTICULARS GROSS PROFIT % NET PROFIT % 2006-07 15.85% 5.93% 2007-08 16.8% 8.87% 2008-09 23.14% 13.84% AVG. NET PROFIT % 18.60% 9.55% . FOR THE YEAR UNDER CONSIDERATION 22.78% 12.15% (IE. A.Y. 2009-10) ITA NO. 983 & 1065/AHD/2013 ASST. YEAR 2009-10 14 FROM THE ABOVE TABLE IT CAN BE SEEN THAT AVERAGE N. P. FOR LAST THREE YEARS IS 9.53% WHEREAS IN THE YEAR UNDER APPEAL IT IS 12.15% WHICH IS HIGHER THAN THE AVERAGE. SIMILARLY WE ALSO OBSER VE THAT THE REDUCTION IN SALES AND RAW MATERIAL CONSUMED IS ALS O AT PAR SO MUCH SO THAT SALES WERE REDUCED BY 24.3%IN PERCENTAGE TO LAST YEAR WHEREAS RAW MATERIAL HAVE REDUCED TO 25.66%. WE FUR THER OBSERVE THAT LD. CIT(A) HAS TAKEN NOTE OF THE RELEVANT FACT S WHILE ADJUDICATING THIS GROUND OBSERVING AS BELOW :- 2.2. I HAVE GONE THROUGH THE CONTENTION OF THE AO AND SU BMISSIONS MADE BY THE APPELLANT. BEFORE ME THE APPELLANT HAS PRODUCED THE EXPLANATION AND RECONCILIATION IN RESPECT OF ALL THE ABOVE THREE PA RTIES. IN RESPECT OF SUCHAL ENTERPRISE, THERE IS NO DIFFERENCE IN AMOUNT OF COM MISSION RECORDED BY THE BOTH THE PARTIES. DISPUTES ARISES BECAUSE IN BOOKS OF SU CHAL ENTERPRISE, COMMISSION IS ACCOUNTED FOR ON NET BASIS (AFTER DEDUCTING TDS) WHILE IN BOOKS OF APPELLANT SAME HAS BEEN ACCOUNTED FOR ON GROSS BASIS. RECONCI LIATION HAS BEEN SUBMITTED BEFORE ME. IN CASE OF M/S. LAXMI MACHINE TOOLS, THE DIFFERENCE ARISES BECAUSE SALES FOR THE MONTH OF MARCH HAS BEEN ACCOUNTED IN NEXT APRIL IN THEIR BOOKS OF ACCOUNT WHITE APPELLANT HAS ACCOUNTED FOR IN THE MO NTH OF MARCH ITSELF. RECONCILIATION HAS BEEN SUBMITTED BEFORE ME IN THIS REGARD. AS FAR AS M/S. RSWM IS CONCERNED, IT IS SUBMITTED THAT M/S. RSWM H AS FOUR BRANCHES. ON INQUIRY FROM THE AO, PARTY HAD SENT ACCOUNT ONLY IN RESPECT OF ONE BRANCH (MANDAPAM BRANCH) WHILE APPELLANT MAINTAINS THE LED GER ACCOUNT FOR ALL THE FOUR BRANCHES TOGETHER. THEREFORE, THE ACCOUNT OF M/S. R SWM WAS NOT RECONCILED. THE SAME EXPLANATION WAS ALSO SUBMITTED BEFORE THE AO BUT HE HAS NOT CONSIDERED THE SAME. THE APPELLANT PRODUCED BEFORE , ME THE CONFIRMATIONS OF REMAINING BRANCHES AND WORKED OUT RECONCILIATION OF FIGURES BETWEEN AMOUNTS OF THE PARTY WITH 'HE APPELLANT AND VICE VERSA-WHICH T ALLIES. IN- VIEW OF THE ABOVE, NEITHER THE SALES ARE UNDERSTATED NOR ARE THE EXPEN SES INFLATED IN THE BOOKS OF ACCOUNT OF THE APPELLANT. THEREFORE, WHEN THERE IS NO DEFECT FOUND IN BOOKS OF ACCOUNT, AO IS NOT JUSTIFIED IN REJECTING THE SAME. APPELLANT ALSO RELIES ON THE DECISION OF GUJARAT HIGH COURT IN CASE OF CIT VS. V IKRAM PLASTICS 239 ITR 161. RESPECTFULLY FOLLOWING THE SAME I HOLD THAT THE PRO VISIONS OF SECTION 145(2) OUGHT NOT TO HAVE BEEN INVOKED AND REJECTION OF BOOKS OF ACCOUNT BY THE AO IS PROPER. AS FAR AS ADDITION OF NP IS CONCERNED, THE AO HAS C OMPARED THE NP WITH IMMEDIATELY PREVIOUS YEAR. WHILE BEFORE ME THE APPE LLANT HAS SUBMITTED THE AVERAGE OF LAST THREE YEARS I.E. 9.55% (AVERAGE OF 5.93%, 8.87% AND 13.84%) AS AGAINST WHICH NP FOR THE YEAR UNDER CONSIDERATION S HOWN BY APPELLANT IS 12.15%. FOR MAKING THE COMPARISON, BASIS OF ONE YEAR IS NOT JUSTIFIED. THEREFORE, COMPARISON MADE BY THE AO IS NOT CORRECT. FURTHER T HE AO HAS MADE THE ITA NO. 983 & 1065/AHD/2013 ASST. YEAR 2009-10 15 COMPARISON OF VALUE OF SALES WITH ITEM OF RAW MATER IAL WHICH MAY PRODUCE ABSURD RESULT. IN VIEW OF THE ABOVE, I HOLD THAT AO IS NOT JUSTIFIED IN MAKING THE ADDITION OF NP ON THE BASIS THAT IT IS LOWER THAN IMMEDIATEL Y PREVIOUS YEAR AS THE SAME IS WITHOUT ANY CONCRETE BASIS. THEREFORE, THE AO IS DI RECTED TO DELETE THE ADDITION OF RS. 21,30,870/-. THIS GROUND OF APPEAL IS ALLOWED. WE ARE, THEREFORE, OF THE VIEW THAT FIGURES AND EXP LANATION SUBMITTED BY ASSESSEE BEFORE LOWER AUTHORITIES HAS FAIRLY OVE RSHADOWED THE REASONS RECORDED BY ASSESSING OFFICER FOR REJECTING THE BOOKS OF ACCOUNT. IN SUCH SITUATION, WE ARE OF THE VIEW THAT LD. ASSESSING OFFICER ERRED IN REJECTING THE BOOKS OF ACCOUNT AND ESTIMATE THE PROFIT. ACCORDINGLY, WE FIND NO REASON TO INTERFERE WITH TH E ORDER OF LD. CIT(A). THIS GROUND OF REVENUE IS DISMISSED. 28. GROUND NO.2 READS AS UNDER :- 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN D ELETING THE ADDITION MADE ON ACCOUNT OF PROFESSION FEES AMOUNTING TO RS. 2,00,000/- WITHOUT APPRECIATING THE FACTS THAT EXPENDITURE IS NOT FOR DAY-TO-DAY BUSINESS TRANSACTION AND WAS INCURRED FOR DISPUTE OF LAND WHICH IS NOT A REVENUE EXPENDITURE. 29. BRIEF FACTS RELATING TO THIS GROUND ARE THAT AS SESSEE INCURRED RS.2 LACS FOR PAYING PROFESSIONAL CHARGES FOR DEFEN DING THE DISPUTE RELATING TO A LAND BEING A BUSINESS ASSET OF THE CO MPANY. LD. ASSESSING OFFICER DISALLOWED THE EXPENSES AND TREAT ED IT AS CAPITAL EXPENDITURE AS BEING INCURRED FOR SPECIFIC LAND. HO WEVER, LD. CIT(A) DELETED THE SAME BY OBSERVING THAT IT BEING A NORMA L BUSINESS EXPENDITURE. ITA NO. 983 & 1065/AHD/2013 ASST. YEAR 2009-10 16 30. IN APPEAL BEFORE US, LD. DR SUPPORTED THE ORDER OF ASSESSING OFFICER AND LD. AR RELIED ON THE ORDER OF LD. CIT(A ). 31. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE RELATES TO DELETION OF DISALLOWANCE OF RS .2 LACS PAID TO SHRI VIPIN S. PARIKH REGARDING DISPUTE OVER THE LAND AT VATVA. FROM PERUSAL OF RECORD, WE OBSERVE THAT ASSESSEE HAS INC URRED LEGAL EXPENDITURE OF RS.2 LACS FOR CONTESTING THE DISPUTE REGARDING THE HOLDING OF LEASE SINCE SEVERAL YEARS AND THE EXPENS ES WERE INCURRED FOR THE PURPOSE OF LEGAL ADVICE FOR DISPUTE OF THE LAND. SUCH EXPENDITURE AS PER ASSESSEE WAS WHOLLY AND EXCLUSIV ELY FOR THE PURPOSE OF BUSINESS AND IS REQUIRED TO BE ALLOWED U NDER SECTION 37(1) OF THE ACT. THIS FACT PLACED BEFORE US HAS NO T BEEN CONTROVERTED BY THE REVENUE AT ANY POINT OF TIME IN THE PROCEEDI NGS HELD BEFORE THE LOWER AUTHORITIES. FURTHER WE FIND THAT LD. CIT (A) DELETED THE IMPUGNED DISALLOWANCE BY OBSERVING AS UNDER:- 4.3. I HAVE GONE THROUGH THE CONTENTION OF THE AO AND SUBMISSION MADE BY THE APPELLANT. ISSUE BEFORE ME IS ONLY THAT RS. 2 LAKHS PAID TO ADVOCATE FOR DEFENDING THE CASE OF LEASE-HOLD LAND IS TO BE CONSIDERED AS REVENUE EXPENDITURE OR CAPITAL EXPENDITURE. THE MAIN CONTENTION OF THE AO IS THAT BECAUSE IT IS INCURRED IN RESPECT OF FIXED ASSET WHICH IS GIVING ENDURING BEN EFIT TO THE COMPANY, THEREFORE, IT SHOULD BE CAPITALIZED AGAINST WHICH THE APPELLAN T SUBMITTED THAT IT IS NOT INCURRED FOR THE PURPOSE OF PURCHASING THE FIXED AS SETS BUT FOR DEFENDING OR MAINTAINING THE ASSET WHICH IS USED FOR THE PURPOSE OF THE BUSINESS OF THE APPELLANT. APPELLANT ALSO SUBMITTED THE JUDGMENT OF HON'BLE BANGALORE TRIBUNAL IN CASE OF DEPUTY COMMISSIONER OF INCOME-TAX V. ITC HOTELS LTD. 1 SOT 703 WHEREIN ON IDENTICAL FACTS THE TRIBUNAL HAS HELD TH E SAME AS REVENUE EXPENDITURE ITA NO. 983 & 1065/AHD/2013 ASST. YEAR 2009-10 17 BEING EXPENSES INCURRED IN ORDER TO SAFEGUARD ITS R IGHT TO CARRY ON THE BUSINESS.' I AM INCLINED TO ACCEPT THE ARGUMENT OF THE APPELLANT THAT PROFESSIONAL FEES PAID TO ADVOCATE FOR SAFEGUARDING THE ASSET AND NOT FOR PUR CHASING THE ASSETS SHOULD BE ALLOWED AS REVENUE EXPENDITURE. THE COURT CASE HAS NOTHING TO DO WITH PURCHASE OF THE ASSET. IN CASE OF INSURANCE PREMIUM PAID FOR SAFEGUARDING ASSETS AGAINST THE FUTURE LOSS IS ALLOWABLE AS BUSINESS EXPENDITUR E. SIMILARLY, PROFESSIONAL FEES PAID FOR SAFEGUARDING TITLE TO THE ASSET SHOULD ALS O BE ALLOWED AS BUSINESS EXPENDITURE. HON'BLE BANGALORE TRIBUNAL IN CASE OF ITC LTD. (SUPRA) ON IDENTICAL FACTS HAS ALLOWED EXPENDITURE AS REVENUE EXPENDITUR E. FOLLOWING THE SAME, I DIRECT THE AO TO DELETE THE DISALLOWANCE OF PROFESS IONAL FEES OF RS. 2.00 LAC AND ALLOW THE SAME AS REVENUE EXPENDITURE. THIS GROUND OF APPEAL IS ALLOWED. WE ARE, THEREFORE, OF THE VIEW THAT THE AMOUNT OF R S.2,00,000/- PAID IS NOT PAID TOWARDS PURCHASE OF ANY ASSET BUT REVEN UE EXPENDITURE IN THE NORMAL COURSE OF BUSINESS FOR SAFEGUARDING THE INTEREST OF ASSESSEE RELATING TO DISPUTE OVER THE LAND AT VATVA . WE, THEREFORE, FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. C IT(A). ACCORDINGLY, THIS GROUND OF REVENUE IS DISMISSED. 32. GROUND NO.3 RELATES TO DELETION OF DISALLOWANCE MADE U/S 41(1) OF THE ACT BY LD. CIT(A) AT RS.12,10,695/-. WE OBSE RVE THAT WE HAVE DEALT WITH THIS GROUND RELATING TO DISALLOWANCE U/S 41(1) OF THE ACT WHILE DEALING WITH ASSESSEES APPEAL IN GROUND NO.4 WHEREIN WE HAVE OBSERVED THAT LD. CIT(A) HAS RIGHTLY DELETED THE DI SALLOWANCE TO THE EXTENT OF RS.12,10,695/- AS THE ASSESSEE WAS ABLE T O DEMONSTRATE THAT THE IMPUGNED LIABILITY WAS WRITTEN BACK OR IN THE ALTERNATIVE PAID OFF. HOWEVER, FOR THE REMAINING DISALLOWANCE OF RS. 10,33,414/-OUT OF RS.22,44,109/- RELATING TO TWO UNPAID CREDITORS I.E . PAL PEOGEOT ITA NO. 983 & 1065/AHD/2013 ASST. YEAR 2009-10 18 LIMITED RS.5,,49,929/- AND ORIENTAL TRANSPORT CO. R S.4,93,486/- WE HAVE RESTORED THE ISSUE BACK TO THE FILE OF ASSESSI NG OFFICER FOR VERIFYING THE STATUS OF DISPUTE WITH THESE PARTIES. APPLYING THE SAME DECISION TO THIS GROUND OF REVENUE, WE PARTLY ALLOW THE SAME FOR STATISTICAL PURPOSES. 33. GROUND NO.4 RELATES TO DELETION OF DISALLOWANCE OF RS.9,05,428/- U/S 14A R.W.R 8D AGAINST THE ORDER OF LD. CIT(A) OU T OF TOTAL DISALLOWANCE OF RS.12,58,430/-. WE OBSERVE THAT WE HAVE DEALT WITH THIS ISSUE TO DISALLOWANCE U/S 14A OF THE ACT WHILE ADJUDICATING ASSESSEES APPEAL IN GROUND NO.2 & 3 WHEREIN WE HAV E SUSTAINED THE DISALLOWANCE OF RS. 3,53,002/- U/S 14A OF THE ACT A ND UPHOLD THE VIEW TAKEN BY LD. CIT(A). APPLYING THE SAME DECISION TO THIS GROUND OF REVENUE, WE DISMISS THIS GROUND. 34. GROUND NOS.5 & 6 ARE OF GENERAL NATURE, WHICH N EED NO ADJUDICATION. 35. IN THE RESULT, THE APPEAL OF ASSESSEE AND THAT OF THE REVENUE BOTH ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH NOVEMBER, 2016 SD/- SD/- (R.P.TOLANI) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 11/11/2016 ITA NO. 983 & 1065/AHD/2013 ASST. YEAR 2009-10 19 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 8/11/2016 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 10/11/2016 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 11/11/2016 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: