M/s.Brilliant Study centre, Kottayam V. ACIt, Kottayam

MA 29/COCH/2011

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 7354 (ITAT-COCHIN)
• Duration Of Justice: 4 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-12-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 26-08-2011
• Court: TRIBUNAL
• Department Lawyers: VIJAYAPRABHA
• Assessee Lawyers: K I JOHN
• Keywords: Gift; Depreciation; Principle of natural justice; Cost of acquisition; Onus to prove; Revenue expenditure; Capital expenditure
• Section: 40A(3); 37(1); 154

Judgement Text

M.A. 29/COCH/2011 BRILLANT STUDY CENTRE V. ASSTT. CIT, KOTTAYAM 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI SANJAY ARO RA (AM) M.A. NO.29/COCH/2011 (ARISING OUT OF ITA NO.174/COCH/2009) (ASSESSMENT YEAR 2006-07) BRILLIANT STUDY CENTRE VS ASSIST.COMMISSIONER OF INCOME-TAX PULIYANNOOR PO CIRCLE 1, KOTTAYAM. MUTHOLY, PALAI PAN : AAEFB8385K (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI K.I. JOHN RESPONDENT BY: MS. VIJAYAPRABHA DATE OF HEARING : 23-09-2011 DATE OF PRONOUNCEMENT: 27 -12-2011 O R D E R PER SANJAY ARORA (AM) THIS IS A MISCELLANEOUS APPLICATION U/S. 254(2) OF THE INCOME-TAX ACT, 1961 (`THE ACT, HEREAFTER) BY THE ASSESSEE IN RESPECT OF ITS APPEAL CONTESTING ITS ASSESSMENT (FOR ASSESSMENT YEAR 2006-07), DECIDED BY THE TRIBUNAL V IDE ITS ORDER DATED 22-06-2011, ALONG WITH THE REVENUES APPEAL (ITA NO.190/COCH/20 09). ADJUSTMENT TO ITS RETURNED INCOME ON THREE COUNTS, VIZ. (I) NON ALLOWANCE OF E XPENDITURE ON BOOKS U/S. 37(1) BY TREATING THEM AS PLANT, ENTITLED TO DEPRECIATION U/S 32(1) (@60%); (II) DISALLOWANCE U/S 37(1) OF UNVERIFIABLE EXPENDITURE BY TREATING IT AS UNGENUINE; AND (III) DISALLOWANCE U/S. 40A(3), WERE CONTESTED BY THE ASSESSEE PER THE SAID APPEALS, WHICH STOOD CONFIRMED VIDE THE IMPUGNED ORDER. THE ASSESSEE HAS NOW MOVED THE TRIBUNAL U/S. 254(2), IMPUGNING ITS ORDER ON EACH OF THE THREE ADJUSTMENTS ON ONE OR MO RE COUNTS. M.A. 29/COCH/2011 BRILLANT STUDY CENTRE V. ASSTT. CIT, KOTTAYAM 2 2. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. WE SHALL DEAL WITH EACH OF THE CONTENTIONS RAISED, ISSUE-WISE. CLAIM OF EXPENDITURE ON BOOKS AS REVENUE IN NATURE DEDUCTIBLE U/S. 37(1) 3.1 THE SAID ISSUE; BOTH THE ASSESSEE AND THE REVEN UE BEING IN APPEAL, STANDS DISCUSSED BY THE TRIBUNAL VIDE PARAGRAPHS 3.1 TO 5. 8 (PAGES 2 TO 13) OF ITS ORDER. EACH OF THE SEVERAL ARGUMENTS RAISED BY BOTH THE PARTIES; T HEIR RESPECTIVE CASES; THE LAW IN THE MATTER, AS WELL AS THE FACTUAL DETERMINATION OF THE ISSUE, FINDS NARRATION VIDE PARAS 3, 4 & 5 OF THE IMPUGNED ORDER, BROADLY IN THAT ORDER. ON THE BASIS THEREOF, IT HOLDS BOOKS TO FORM A PART OF THE PROFIT-MAKING APPARATUS OF THE A SSESSEES ENTERPRISE/TRADE AND, ACCORDINGLY, A CAPITAL EXPENDITURE, WHICH SATISFIES THE DEFINITION OF PLANT. FURTHER, THE BOOKS WERE FOUND TO BE USED FOR AND TOWARD A PROF ESSIONAL ACTIVITY AND, CONSEQUENTLY, ELIGIBLE FOR DEPRECIATION @ 60% (PER PARAS 5.6 & 5. 7). WE CANNOT HERE TRAVEL INTO THE MERITS OF THE CASE, WHICH WOULD AMOUNT TO A REVIEW, IMPERMISSIBLE U/S. 254(2), BUT ONLY TO THE `MISTAKE/(S), IF ANY, THAT MAY HAVE OCCURRE D IN ADJUDICATING THE APPEAL, AS BORNE OUT BY THE RECORD. 3.2 TOWARD THIS, WE FIND THAT THE ASSESSEES FI RST CONTENTION IS THAT THE TRIBUNAL HAS RELIED ON CASE LAWS AT PARAGRAPH 5.1 OF ITS ORDER, WHICH WERE NEITHER RELIED UPON BY THE REVENUE NOR DID THE TRIBUNAL INDICATE THAT IT WAS R ELYING ON THE SAID JUDGMENTS, SO THAT THERE WAS NO OPPORTUNITY TO IT TO MEET THE SAME, AN D THERE HAS BEEN THUS A VIOLATION OF A PRINCIPLE OF NATURAL JUSTICE. RELIANCE IN THIS CON TEXT STANDS PLACED ON THE DECISION IN THE CASE OF NARESH K. PAHUJA V. ITAT , 234 CTR (BOM) 284. ALL THAT WE CAN SAY WITH REGAR D TO THIS OBJECTION AND EVEN AS WE ADMIT TO THE PRI NCIPLE LAID DOWN IN THE SAID DECISION - IS THAT THE SAME IS MISCONCEIVED, AND A COMPLETE MI SREADING OF THE TRIBUNALS ORDER, WHICH HAS TO BE READ AS A WHOLE AND HOLISTICALLY, A ND THE CITED DECISION HAS NO APPLICATION IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THE REV ENUE, CLAIMING THE BOOKS UNDER REFERENCE TO BE A PLANT, IT WAS DEEMED NECESSARY BY THE TRIBUNAL TO VISIT THE DEFINITION OF M.A. 29/COCH/2011 BRILLANT STUDY CENTRE V. ASSTT. CIT, KOTTAYAM 3 THE TERM PLANT AS PROVIDED BY THE STATUTE (SECTIO N 43(3)), AS WELL AS ITS ELUCIDATION BY THE HIGHER COURTS OF LAW, BEING THE APEX COURT AND THE JURISDICTIONAL HIGH COURT IN THE MAIN. SIMILARLY, THE DECISIONS EXPLAINING THE SCOPE OF THE TERM BOOKS WERE ALSO REFERRED TO, EVEN AS ADMITTEDLY THERE WAS NO DISPUT E AS TO THE IMPUGNED EXPENDITURE BEING ON BOOKS. THAT IS, THE ASSESSEE APPARENTLY CONTE STING THE SETTLED POSITION OF LAW BEING RELIED ON BY THE REVENUE, I.E., THAT THE `BOOKS AR E PLANT, SATISFYING ITS FUNCTIONAL TEST, NAY, COVERED BY THE STATUTORY DEFINITION OF THE TER M, IT WAS INCUMBENT ON IT (THE ASSESSEE) TO ADVERT THERETO, UNLESS OF COURSE IT DOES NOT CON TEST THOSE DECISIONS, IN RATIO THAT IS, IN WHICH CASE THERE COULD POSSIBLY BE NO GRIEVANCE WHA TSOEVER. THE REFERENCE TO THE CASE LAW BY THE TRIBUNAL WAS THUS GUIDED BY THE TERMS AN D THE CONTOURS OF THE CONTROVERSY THAT THE TRIBUNAL WAS CALLED UPON TO DECIDE, AND ONLY TO WARD SEEKING TO DRAW THE STATEMENT OF LAW IN THE MATTER. COULD THE ASSESSEE CLAIM, WE WONDER, OF THE STATUTO RY DEFINITION OF THE TERM `PLANT, TO WHICH ABUNDANT REFERENCE HAD BEEN MADE BY THE REVENUE, AS HAVING NOT BEEN PUT ACROSS TO IT BY THE TRIBUNAL DURING HEARIN G, SO THAT ITS ORDER BECOMES `MISTAKEN ON THAT SCORE ? THAT WOULD BE LUDICROUS. THE REFERENCE TO THE SET TLED LAW, ON WHICH AGAIN THERE IS NO DISPUTE OR COULD POSSIBLY BE, IT MAY BE APPRECIATED, FALLS IN THE SAME SPACE, BOTH FORMING A PART OF THE `LAW. AS AFORE-STATED, IT WAS INCUMBENT ON THE ASSESSEE, IF NOT THE REVENUE AS WELL, TO ADVERT THERETO, SO AS TO EX HIBIT AS TO HOW AND WHY, EVEN SO, THE SAME WAS NOT APPLICABLE TO IT IN THE FACTS AND CIRC UMSTANCES OF THE CASE; THE ISSUE BEING ESSENTIALLY FACTUAL IN NATURE. BE AS IT MAY, THE TR IBUNAL BEING OBLIGED TO APPLY THE LAW, WHICH IS ITS MANDATE, IT WAS DUTY BOUND TO REFER TH ERETO, BEING EVEN OTHERWISE BINDING ON IT. THAT IS, IT CANNOT ABSTAIN THERE-FROM EVEN IF THE PARTIES DO NOT ASSIST THE COURT PROPERLY, WHO MAY HAVE THEIR OWN REASONS FOR NOT DOING SO. HOW COULD THE LAW, ONE MAY ASK, BE APPLIED, IF THE SAME IS NOT CLEAR OR CLARIFIED, AND FOR AND TOWARD WHICH REFERENCE HAS THEREFORE NECESSARILY TO BE MADE TO SOME AUTHENTIC SOURCE/S . 3.3 CONTINUING FURTHER, THE ASSESSEE HAS NOT SH OWN ANY PREJUDICE CAUSED TO IT; THE LAW BEING EVEN OTHERWISE PER SE NEUTRAL. AS SUCH, IT IS CLEARLY WRONG TO SAY THAT THE SAID CASE LAW IS IN ANY MANNER `ADVERSE TO THE ASSESSEE. WHA T STANDS DRAWN FROM THE IMPUGNED M.A. 29/COCH/2011 BRILLANT STUDY CENTRE V. ASSTT. CIT, KOTTAYAM 4 REFERENCE, IT MAY BE NOTED, IS ONLY THE FUNDAMENTAL PRINCIPLE, I.E., THAT A `TOOL OF THE TRADE WOULD QUALIFY TO BE A PLANT, WHICH IS NEITHER ASS AILABLE NOR IN FACT STANDS CHALLENGED BY THE ASSESSEE AT ANY STAGE; THE SAME REPRESENTING TH E REVENUES CASE. NO WONDER, THE ASSESSEE ITSELF STATES THAT ALL THE REFERRED DECISI ONS (LISTED AT PARAGRAPH 5.1 OF THE IMPUGNED ORDER) ARE OF NO RELEVANCE, WHICH IS IN A SENSE TRUE INASMUCH AS THEY HAVE LITTLE BEARING ON THE FACTUAL DETERMINATION OF THE ISSUE. THE ASSESSEE, THUS, EFFECTIVELY CONTRADICTS ITSELF. EVEN THE TRIBUNAL ON THE BASIS OF THE SAID REFERENCE ONLY RECORDS A PRELIMINARY FINDING THAT THE BOOKS ANSWER THE DES CRIPTION OF PLANT (PER PARA 5.1), AND DOES NOT DECIDE THE ISSUE ON THAT BASIS. IT PROCEED S TO EXPLICITLY STATE THAT, NEVERTHELESS, I.E., GIVEN, AND DESPITE, THE POSITION OF LAW, IN V IEW OF THE ASSESSEES CLAIM OF IT REPRESENTING A REVENUE EXPENDITURE IN THE FACTS AND CIRCUMSTANCES OF ITS CASE, THE SAME WOULD HAVE TO BE FACTUALLY EXAMINED, DRAWING SUPPOR T FOR ITS THIS OBSERVATION FROM THE DECISION BY THE APEX COURT IN THE CASE OF ALEMBIC CHEMICAL WORKS CO. LTD. VS. COMMISSIONER OF INCOME-TAX (1989) 177 ITR 377 (SC), ALSO RELIED UPON BY THE A SSESSEE (REFER PARAGRAPHS 5.2 & 5.3). THE ASSESSES CLAIM O F THE TRIBUNAL DECIDING THE ISSUE WITHOUT NOTICE TO IT, LEADING TO A PREJUDICE, IS, T HUS, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHOLLY UNWARRANTED, AND CLEARLY AN ALIBI. OUR EXAMINATION AND A PERUSAL OF ITS ORDER, RATHER, SHOWS AN APPLICATION OF MIND ON EACH ASPECT OF THE CASE IN A CLEAR AND TRANSPARENT MANNER; THE TRIBUNAL BEING BOUND TO STA TE ITS REASONS FOR WHAT IT DECIDES. TO CONTEND, FURTHER, THAT THE SAID DECISION [ ALEMBIC CHEMICAL WORKS CO. LTD. VS. CIT (SUPRA)] HAS NOT BEEN CONSIDERED, WHICH IS ALSO AN OBJECTION RAISED BY THE ASSESSEE, IS PRESUMPTUOUS AND CONTRADICTORY TO THE FACTS ON RECO RD. 3.4 THE TRIBUNAL GOES ON FURTHER TO FACTUALLY EXAMINE THE MATTER AT PARAGRAPHS 5.4 TO 5.6 OF ITS ORDER, TO CONCLUDE THAT BOOKS CONSTITU TE A PART OF THE PROFIT-MAKING APPARATUS OF THE ASSESSEE-FIRM AND, THUS, ONLY ITS CAPITAL EX PENDITURE. TO CONTEND, AS DOES THE ASSESSEE PER ITS WRITTEN SUBMISSIONS, THAT THE SAME IS ONLY `RITUALISTIC, ONLY DESERVES TO BE DEPRECIATED IN THE STRONGEST TERMS. PERHAPS, A REFE RENCE THERETO DURING HEARING, THE SAME M.A. 29/COCH/2011 BRILLANT STUDY CENTRE V. ASSTT. CIT, KOTTAYAM 5 BEING NOT SPECIFICALLY REFERRED TO BY EITHER PARTY THEREAT, WOULD HAVE IMPELLED US TO INSIST ON IT BEING EXPUNGED. THERE IS NO SCOPE FOR SUCH IN SINUATIONS EVEN IN APPELLATE PROCEEDINGS, MUCH LESS IN RECTIFICATION PROCEEDINGS . WOULD THAT IMPLY THAT THE FINDINGS AND THE ORDERS OF THE LOWER AUTHORITIES, WHICH STAN D IN EFFECT CONFIRMED BY THE TRIBUNAL, ARE SIMILARLY MOTIVATED ? IN FACT, THE GIST OF THE TRIBUNALS FINDINGS, LI STED AT PAGE 2 OF ITS WRITTEN SUBMISSIONS BY THE ASSESSEE, WOULD ITSELF D ISPROVE ITS CHARGE(S). BESIDES, IT WOULD ALSO PROVE CONCLUSIVELY THE BASIS OF THE DECI SION BY THE TRIBUNAL, I.E., AS DISCUSSED AT PARA NOS. 5.6 & 5.7 OF ITS ORDER, AND NOT THE PR ELIMINARY FINDINGS ENTERED INTO BY IT AT PARAGRAPH 5.1, WHICH THE ASSESSEE CLAIMS TO BE PREJ UDICED BY. THE PLEA/S RAISED IS THUS WITHOUT BASIS, AND ONLY AN ALIBI . 3.5 IN VIEW OF THE FOREGOING, WE HAVE NO HESI TATION IN STATING THAT THE INSTANT APPLICATION IS, FOR MOST PART, AN ABUSE OF THE PROC ESS OF LAW, AND THEREFORE EVEN NOT LIABLE TO BE ADMITTED AS A COMPETENT APPLICATION U/S. 254( 2) OF THE ACT. JUDICIAL INSTITUTIONS ARE RESPECTED THE WORLD OVER, WHILE ADMITTING THAT THEI R DECISIONS, AS IN THE CASE OF ANY OTHER HUMAN ENDEAVOUR, ARE NOT INFALLIBLE (AND FOR WHICH RECOURSE STANDS PROVIDED BY LAW), NOT ONLY BECAUSE OF THE LEGAL SANCTITY ACCORDED TO THEI R DECISIONS, BUT EQUALLY AND, RATHER, MORE SO, FOR THEIR PROBITY AND INDEPENDENCE. THIS R ESPECT IS ESSENTIALLY A RESPECT FOR THE RULE OF LAW, ON THE BASIS OF WHICH ONLY THE DISPUTE S ARE TO BE DECIDED BY THE TRIBUNALS/COURTS. THIS TRIBUNAL HAS ALWAYS SOUGHT T O PRESERVE THOSE HIGH STANDARDS OF INTEGRITY AND JUDICIAL INDEPENDENCE, WHICH IS THE W ELLSPRING OF FAIRNESS AND JUSTICE AND, THUS, THE EDIFICE OF ANY RELIABLE JUSTICE DELIVERY SYSTEM, AND WE CANNOT COUNTENANCE ANY ATTEMPT TO DIMINISH IT. THAT IS NOT TO SAY, AND NEI THER DO WE INTEND TO IN ANY MANNER, THAT THERE IS NO SCOPE FOR AN ERROR IN JUDGMENT, WHICH C OULD WELL BE (THOUGH IT COULD BE SO HELD ONLY BY A HIGHER AUTHORITY), BUT ONLY THAT WE CANNOT ALLOW ANY LITIGANT TO IMPUTE ANY MOTIVE OR CAST ASPERSION/S ON THE FUNCTIONING OF TH IS TRIBUNAL. THE ONLY COURSE AVAILABLE TO AN APPELLANT/RESPONDENT, WHERE IT CONSIDERS THAT A DECISION AS NOT IN AGREEMENT WITH THE LAW, OR OTHERWISE INFIRM, IS TO SEEK ITS REVIEW FOL LOWING THE PROCESS OF LAW. THIS IS TRITE LAW, AND TOWARD WHICH WE DO NOT WANT TO ENCUMBER TH IS ORDER, EVEN AS THE DECISION BY M.A. 29/COCH/2011 BRILLANT STUDY CENTRE V. ASSTT. CIT, KOTTAYAM 6 THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F R. NAGARAJAN & CO. V. STATE OF KERALA (1986) KLT 1231, RELIED UPON BY THE ASSESSEE ITSELF IS TO THIS EFFECT. WHILE WE ABSTAIN FROM DOING SO, WE MAY CLARIFY THAT WE WOULD BE CONS TRAINED TO AWARD COSTS FOR SUCH PETITIONS IN FUTURE. 3.6 PER PARAGRAPH 7 OF ITS APPLICATION, THE ASSESSE E QUESTIONS THE TRIBUNALS WISDOM IN STATING THAT IT DOES NOT THINK IT NECESSARY FOR THE PURPOSE AT HAND TO ANSWER THE QUESTION AS TO WHETHER THE ASSESSEE-FIRM IS IN BUSINESS OR CAN BE SAID TO BE A PROFESSIONAL FIRM. THE TRIBUNAL STATES SO ONLY AFTER CATEGORICALLY HOLDING THAT `THE BOOKS BEING USED BY THE ASSESSEE, A COACHING TUTORIAL, FOR TEACHING, CAN ON LY BE CONSIDERED AS USED FOR PROFESSION, SO THAT DEPRECIATION @ 60% STANDS RIGHTLY APPLIED B Y THE REVENUE. IS NOT THE SAID `OBJECTION CLEARLY A SUBJECT MATTER OF REVIEW ? IN FACT, WE ARE UNABLE TO UNDERSTAND THE ASSESSEES GRIEVANCE, WHOSE CASE IS ONLY OF THE SAM E REPRESENTING AN EXPENDITURE OF REVENUE NATURE. FURTHER, EVEN AS OBSERVED BY THE TR IBUNAL, A FINDING AS TO THE ASSESSEE BEING A BUSINESS FIRM WOULD ONLY LEAD TO A REDUCTIO N IN THE CLAIM OF DEPRECIATION ALREADY ALLOWED TO IT. THE EMPHASIS OF THE TRIBUNAL, AS APP ARENT; THE PURPOSE BEING THE RATE AT WHICH THE DEPRECIATION IS TO BE EXIGIBLE, IS ON THE NATURE AND EXTENT OF `USER, PARTICULARLY CONSIDERING THAT THE SAME IS ONLY IN THE REGULAR CO URSE OF ITS TRADE, AND NOT THE CLASSIFICATION OF THE SAID TRADE AS `BUSINESS OR ` PROFESSION. CLEARLY, IT IS ONLY AFTER CONSIDERING THE ARGUMENTS ADVANCED THAT THE SAME HA S BEEN DEEMED AS NOT RELEVANT BY THE TRIBUNAL. WHETHER THE CONSIDERATIONS THAT WEIGHED W ITH THE TRIBUNAL IN DECIDING AS IT DID, WERE VALID OR NOT IN LAW, OR WHETHER IT WAS NECESSA RILY REQUIRED TO ANSWER THE QUESTION AFORESAID, COULD ONLY BE ANSWERED IN REVIEW PROCEED INGS, SO THAT THE CHARGE OF THE SAME BEING A `MISTAKE IS MISCONCEIVED. THE RELIANCE ON THE DECISION IN THE CASE OF CIT V. BHAGWAN BROKER AGENCY , 212 ITR 133 (RAJ.) IS, THEREFORE, CLEARLY MISPLAC ED. FURTHER, AS THE SAME WOULD NECESSARILY INVOLVE, AND STAND TO BE PRECEDED BY, A FINDING AS TO THE SAME BEING THE `BASIS ISSUE, AS THE ASSESSEE CLAIMS PER ITS M.A., IT WOULD FALL WITHIN THE AMBIT M.A. 29/COCH/2011 BRILLANT STUDY CENTRE V. ASSTT. CIT, KOTTAYAM 7 OF REVIEW PROCEEDINGS. RELIANCE ON THE DECISIONS IN THE CASE OF 1993 (SUPP) (4) SCC 495; 198 CTR 72; AND 69 ITD 1, IS, CONSEQUENTLY, OF NO M OMENT. 3.7 LIKEWISE, PARAGRAPH 8 OF THE APPLICATION ADVERT S TO THE TRIBUNALS UPHOLDING THE INVOCATION OF ENTRY III (9)(I)(B) OF THE DEPRECIATI ON SCHEDULE AS WITHOUT ANY MATERIAL, MAKING REFERENCE TO THE DECISION IN THE CASE OF COMMISSIONER OF INCOME-TAX VS. BHARAT CELLULAR LTD. (2010) 234 CTR 146 (SC). THE TRIBUNAL HAS DEALT WI TH THIS ISSUE AT PARAGRAPHS 5.7 & 5.8 OF ITS ORDER, DULY CONSIDERING THE ASSESSEES ARGUMENTS AS RAISED IN ITS RESPECT. ACCORDINGLY, WE FIND NO MERIT IN THE C LAIM OF IT BEING A MISTAKE. REFERENCE TO THE CITED DECISION IS WHOLLY AMISS, AS ALSO THE CHA RGE THAT THE RELEVANT ARGUMENTS HAVE NOT BEEN CONSIDERED WHILE EXAMINING THE FACTUAL ASPECT OF THE MATTER, TOWARD WHICH THE ASSESSEE HAD RELIED ON THE DECISION IN THE CASE OF SARASWATI INDUSTRIAL SYNDICATE LTD. VS. COMMISSIONER OF INCOME-TAX (1999) 237 ITR 1 (SC), WHICH IS TO THE SAME EFFECT AS THE DECISION IN THE CASE OF CIT V . BHARAT CELLULAR LTD. (SUPRA), IT NOW ADVERTS TO (ALSO REFER PARA 5.6 OF THE IMPUGNED ORDER). 3.8 PARAGRAPH 9 CHALLENGES THE CONSIDERATION OF THE ARGUMENT BASED ON SECTION 44AA, AS BEING NOT MADE IN THE RIGHT PERSPECTIVE. THE ASS ESSEE DOES NOT CLARIFY THE BASIS FOR SO STATING. CLEARLY, THE SAME QUESTIONS THE MERITS OF THE CONSIDERATION, PRECLUDED UNDER RECTIFICATION PROCEEDINGS. 3.9 THE ASSESSEE SEEMS TO HAVE RAISED ALL THE POINTS ON WHICH IT `CONSIDERS THE ORDER ERRONEOUS, EVEN WITHOUT CONFINING ITSELF TO THE `FA CTS OF ITS CASE, AND THE PARAMETERS OF THE RECTIFICATION PROCEEDINGS. VIDE PARAGRAPH 5 OF ITS PETITION, IT CONTENDS THAT `ADMITTEDLY THE BOOKS HAVE NO VALUE AFTER THE YE AR OF PURCHASE, SO THAT THE FINDING OF THEIR PURCHASE COST BEING A CAPITAL EXPENDITURE IS A `MISTAKE. THE SAID STATEMENT IS FACTUALLY INCORRECT, AS THERE IS NO SUCH ADMISSION BY THE REVENUE (REFER PARAGRAPH 3.9 AND 5.2 OF THE ASSESSMENT ORDER AND THAT BY THE FIR ST APPELLATE AUTHORITY RESPECTIVELY). IN M.A. 29/COCH/2011 BRILLANT STUDY CENTRE V. ASSTT. CIT, KOTTAYAM 8 FACT, WERE IT SO, ALL THAT THE ASSESSEE WAS REQUIRE D TO DO WAS TO MOVE, SIMILARLY, A RECTIFICATION APPLICATION U/S. 154 BEFORE THE REVEN UE AUTHORITIES. IT MAY BE CLARIFIED THAT THERE IS NO FINDING BY ANY OF THE AUTHORITIES, INCL UDING THE TRIBUNAL, THAT THE ENTIRE EXPENDITURE IS ONLY TOWARD `GUIDE BOOKS (WHATEVER ITS IMPACT ON THE FINAL DECISION MAY BE), AND NEITHER IS THERE ANY MATERIAL ON RECORD TO WARD THIS. THE RELIANCE ON THE DECISIONS REPORTED AT 199 ITR 771; 198 CTR 72; AND R. NAGARAJAN & CO. V. STATE OF KERALA (SUPRA) IS, THEREFORE, MISPLACED. 3.10 IN SUM, ALL THAT THE TRIBUNAL HAS FOUND IS THAT THE `BOOKS UNDER REFERENCE FORM A PART OF THE PROFIT-MAKING APPARATUS, A TOOL OF THE TRADE FOR THE ASSESSEE, A COACHING TUTORIAL AND, THUS, CONSTITUTE A PLANT, EXIGIBLE FOR DEPRE CIATION, JUST AS THE ANNUAL PUBLICATIONS (VIZ. ITR, CTR), ABUNDANTLY REFERRED TO IN ARGUING THE PRESENT CASE, ARE FOR A LAWYER / LAW FIRM. THE SAME DOES NOT IMPLY THAT THERE IS NO DEC LINE IN THEIR UTILITY OVER TIME WHICH ANY DEPRECIABLE ASSET WOULD BE SUBJECT TO, BUT ONLY THAT THEY HAVE AN ENDURING VALUE FOR IT. AS AFORE-STATED, THE PARTIES ARE AT LIBERTY TO CONTEND OF THE IMPUGNED APPELLATE ORDER AS BEING `ERRONEOUS, AND SEEK APPROPRIATE REMEDY BEFO RE A HIGHER APPELLATE FORUM. THE RECTIFICATION PROCEEDINGS AS INITIATED BY THE ASSES SEE IN THE MATTER ARE TOTALLY MISCONCEIVED, IF NOT MOTIVATED. GROUND NOS. 1 TO 9 OF THE ASSESSEES MISCELLANEOUS PETITION ARE, ACCORDINGLY, DISMISSED. DISALLOWANCE OF A PART OF THE EXPENDITURE ON `BOOKS AND `AWARDS 4. THE EXPENDITURE ON `BOOKS AND `AWARDS, DISALLO WED ON ACCOUNT OF ADMITTED NON AVAILABILITY OF VOUCHERS SUBSTANTIATING THE CLAIM, STANDS CONFIRMED BY THE TRIBUNAL, AFTER OBSERVING THE RELEVANT FACTS AND CIRCUMSTANCES OF B OTH THESE ITEMS PER PARAGRAPHS 8.2 AND 8.3 OF ITS ORDER; STATING THE BACKGROUND FACTS AND THE RESPECTIVE CASES OF BOTH THE PARTIES AT PARAGRAPH 8.1 OF ITS ORDER, ALSO ADVERTING THE SETT LED LAW IN THE MATTER, WITH REFERENCE TO A FULL BENCH DECISION BY THE HONBLE JURISDICTIONAL H IGH COURT, THUS: M.A. 29/COCH/2011 BRILLANT STUDY CENTRE V. ASSTT. CIT, KOTTAYAM 9 `8.1 THE LAW IN THE MATTER IS TRITE, AND THE ONU S TO ESTABLISH THE EXPENDITURE WITH SOME EVIDENCE IS SQUARELY ON THE ASSESSEE, EVEN AS, HAVI NG REGARD TO THE PRACTICAL CONSIDERATIONS, THE NATURE OF THE EVIDENCE WHICH CO ULD BE CONSIDERED AS SATISFACTORY WOULD VARY WITH THE FACTS AND CIRCUMSTANCES OF THE CASE (REFER: CIT V. RAM BAHADUR THAKUR LTD., 261 ITR 388 (KER)). FURTHER, WE ALSO OBSERVE THAT THOUGH THE EXPENDITURE ON BOOKS WOULD NOT FALL TO BE CONSIDERED U/S. 37(1) ; THE SAME HAVING BEEN CONFIRMED BY US AS CAPITAL EXPENDITURE, FORMING PART OF PLANT, E LIGIBLE FOR DEPRECIATION, NEVERTHELESS, THE COST THEREOF HAS TO BE AS THAT ACTUALLY INCURRE D BY THE ASSESSEE TOWARD THE SAME AND, AS SUCH, HAS TO BE, AGAIN, LED BY THE ASSESSEE WITH SOME EVIDENCE. IN OTHER WORDS, IT WOULD NOT MATERIALLY IMPACT THE ASSESSEES CASE, AN D THE AO HAS, WHILE COMPUTING THE ASSESSABLE INCOME FOR THE YEAR, CORRECTLY ADDED BAC K THE ENTIRE EXPENDITURE (ON BOOKS AND AWARDS) DISALLOWED, I.E., `5.11 LAKHS, WHILE WO RKING OUT THE DEPRECIATION ON THE REDUCED COST OF BOOKS, I.E., BY ADJUSTING IT DOWNWA RDS BY `3.10 LAKHS. WE ARE UNABLE TO SEE ANY BASIS OF THE ASSESSEES C LAIM OF BEING AGGRIEVED BY THE SAID REFERENCE. IT REFERS TO THE SAME LAW WHICH THE REVENUE HAS APPLIED, AND WHICH IN FACT IT DOES NOT DISPUTE. AFTER THE SAID STATEMENT OF TR ITE LAW (AS ALSO THE BACKGROUND FACTS), WHICH THE TRIBUNAL ITSELF STATES AS BEING REQUIRED TO BE APPLIED WITH REGARD TO THE PRACTICAL CONSIDERATIONS, AS THE NATURE OF EVIDENCE CONSIDERE D SATISFACTORY WOULD VARY WITH THE FACTS AND CIRCUMSTANCES OF EACH CASE, IT PROCEEDS T O EXAMINE THE ASSESSEES CASE, AS WELL AS OF THE REVENUE, I.E., FACTUALLY, AS: `8.2 HAVING MADE OUR PRELIMINARY OBSERVATIONS IN THE MATTER, WE WOULD DISCUSS BRIEFLY THE FACTS AS WELL AS THE CASES OF THE PARTIES FOR B OTH THE ITEMS, HAVING BEEN TREATED DIFFERENTLY BY THE LD. CIT(A). WITH REGARD TO BOOKS (`3.10 LAKHS), THE ASSESSEE HAS NOT REBUTTED THE AOS FINDING THAT ITS CLAIM IS UNSUPPO RTED BY VOUCHERS. BY ITS OWN ADMISSION . IT IS NOT CLEAR AS TO HOW THE ASSESSE E CLAIMS TO BE PREJUDICED, WHICH IT MUST NECESSARILY EXHIBIT FOR IT TO BE VALID. THE TRIBUNA L CONFIRMS THE FACTUAL FINDING OF THE EXPENDITURE BEING UNVERIFIABLE AND, THUS, IN-GENUIN E, QUA `BOOKS, WHILE CONSIDERS IT FIT TO RESTORE THE MATTER QUA EXPENDITURE ON `AWARDS BACK TO THE FILE OF THE FI RST APPELLATE AUTHORITY, FINDING IT TO BE FACTUALLY INDETERMINATE . ITS DECISIONS STAND RENDERED ON THE SAME SET OF PRIMARY FACTS, I.E., UNSUBSTANTIATED CL AIM/S FOR EXPENDITURE, WHICH ARE M.A. 29/COCH/2011 BRILLANT STUDY CENTRE V. ASSTT. CIT, KOTTAYAM 10 ADMITTED, AND AS CONSIDERED BY THE AUTHORITIES BELO W. THE REFERENCE TO CASE LAW, WHICH IS UNDISPUTEDLY TRITE AND SETTLED, IS MADE ONLY FOR TH E PURPOSE OF `AUTHENTICATION AND `COMPLETENESS OF THE ORDER. WHAT THE ASSESSEE SEEK S TO BE PROVIDED OPPORTUNITY TO ADDRESS, WHICH IT CLAIMS ON THE BASIS TO SAID STATE MENT OF TRITE LAW AS TO THE ONUS TO PROVE ITS CLAIM, WE FAIL TO FATHOM. THE SAID ARGUMENT ONL Y NEEDS TO BE STATED TO BE REJECTED. WE HOLD ACCORDINGLY. 5. GROUND NO. 10 OF THE ASSESSEES MISCELLANEOU S PETITION IS, ACCORDINGLY, DISMISSED. DISALLOWANCE OF EXPENDITURE U/S. 40A(3) 6. VIDE PARAGRAPHS 11 & 12 OF THE PETITION, THE ASS ESSEE AGAIN CHALLENGES THE MERITS OF THE DISALLOWANCE U/S. 40A(3) CONFIRMED BY THE TR IBUNAL VIDE PARAGRAPHS 9 & 10 OF ITS ORDER. IT CLAIMS A WRONG ASSUMPTION OF FACTS BY TH E TRIBUNAL, EVEN AS THESE ARE THE SAME AS BEFORE THE AUTHORITIES BELOW, WHICH HAVE NOT BEE N CHALLENGED BY THE ASSESSEE EVEN IN APPEAL. THE TRIBUNAL RENDERS ITS FINDING ON FACTS T HUS: `10. .. AS SUCH, WHILE THE ASSESSEES CASE IS PURE LY LEGAL, THAT OF THE REVENUE, FACTUAL. THE LAW IN THE MATTER IS UNEXCEPTIONAL, AND IT IS O NLY THE PAYMENT FOR EACH TRANSACTION THAT IS RELEVANT AND NOT THE TOTAL PAYMENT MADE DUR ING THE COURSE OF A DAY. THIS IS ALL THE MORE SO AS S. 40A(3) IS A DEEMING SECTION, AS SUC H, THE INFERENCE THAT THESE REPRESENTED, IN EFFECT, A SINGLE TRANSACTION, PAID FOR SIMULTANEOUSLY, I.E., AT ONE GO, IS UNEXCEPTIONAL. THE TRIBUNAL (COCHIN BENCH) HAS ALS O UNDER SIMILAR CIRCUMSTANCES, UPHELD THE APPLICATION OF S. 40A(3) IN THE CASE OF SREE SAKTHIPAPER MILLS LTD. V. CIT (IN ITA NO. 388/COCH/2008 DATED 03/6/2010 FOR AY 2004-0 5); ITS RELEVANT FINDINGS BEING AS UNDER: .. THE GIFT ITEMS PURCHASED (EXPENDITURE ON WHICH IS U NDER REFERENCE) MAY NOT BE THE SAME, WHICH FINDING THE ASSESSEE FINDS OBJECTIONABLE, BUT THAT DOES NOT ALTER THE FACTUAL FINDING ON WHICH ITS DECISION, AS ALSO BY THE AUTHORITIES B ELOW, IS BASED, I.E., THAT IT IS A CASE OF A SINGLE TRANSACTION AND NOT MULTIPLE TRANSACTIONS. THE ASSESSEE ADVERTS TO THE LEGAL POSITION, WHICH IS ADMITTED TO BY ALL THE AUTHORITI ES, INCLUDING THE TRIBUNAL, SO THAT THERE IS NO DISPUTE WITH REGARD THERETO. ACCORDINGLY, ITS G RIEVANCE WITH RESPECT THERETO IS WHOLLY MISPLACED, AS ALSO, CONCOMITANTLY, ITS RELIANCE ON THE DECISIONS REPORTED AT, INTER ALIA, 326 ITR 642 (SC); 234 CTR 118 (SC); 305 ITR 227 (SC); 2 94 ITR 444 (SC), BESIDES OTHERS, M.A. 29/COCH/2011 BRILLANT STUDY CENTRE V. ASSTT. CIT, KOTTAYAM 11 RELIED UPON BY THE ASSESSEE. ACCORDINGLY, EVEN AS WE FIND NO MERIT IN THE ASSESSEES OBJECTION, WE IN DEFERENCE TO ITS OBJECTION, CONSID ER IT APPROPRIATE TO ADD THE WORD PRESUMABLY AFTER THE WORDS WOULD SHOW THAT AND BEFORE THE WORDS THE SAME ITEMS AT LINE 21, PARAGRAPH 10 OF ITS ORDER. WE DECIDE AC CORDINGLY. 7. GROUND NOS. 11 & 12 OF THE ASSESSEES MISCEL LANEOUS PETITION ARE, ACCORDINGLY, PARTLY ALLOWED. A CLERICAL MISTAKE FOUND BY THE TRIBUNAL 8 LASTLY, THE PERUSAL OF THE IMPUGNED ORDER FOR THE PURPOSE OF THIS APPLICATION, REVEALS A CLERICAL ERROR, SO THAT THE WORDS ACQUISITION OF THE WOULD STAND INSERTED AFTER THE WORDS INCURRED ON THE AND BEFORE THE WORD CA R AT LINE 11, PARAGRAPHS 5.6 (PAGE 9) OF THE IMPUGNED ORDER. THE SAME, AS THE READING OF THE RELEVANT SENTENCE, AS MODIFIED, WOULD SHOW, IS ONLY TOWARD MEETING THE DEFICIENCY O BSERVED IN THE CONSTRUCTION OF THE SAID SENTENCE, AND IN NO MANNER `ADDING THERETO, O R IN ANY MANNER PREJUDICING EITHER PARTY. WE DECIDE ACCORDINGLY. 9. IN THE RESULT, THE ASSESSEES MISCELLANEOUS APPL ICATION IS PARTLY ALLOWED. SD/- SD/- (N.R.S. GANESAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER COCHIN, DT: 27 TH DECEMBER, 2011 PK/- COPY TO 1. BRILLIANT STUDY CENTRE, PULIYANNOOR PO, MUTHOLI, PA LAI 2. ASSIST.COMMISSIONER OF INCOME-TAX, CIR.1, KOTTAYAM 3. COMMISSIONER OF INCOME-TAX (APPEALS)-IV, KOCHI 4. COMMISSIONER OF INCOME-TAX, KOTTAYAM BY ORDER 5. D.R (TRUE COPY) ASSTT.REGISTRAR, INCOME-TAX APPELLATE TRI BUNAL, COCHIN