Nootan Sarva Vidyalaya Kelvani Mandal, Visnagar v. The ACIT., Patan Range,, Patan

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE S/SHRI MAHAVIR SINGH JM AND D.C.AGRAWAL AM NOOTAN SARVA VIDYALAYA KELVANI MANDAL NOOTAN SARVA VIDYALAYA CAMPUS PATANI DARWAJA VISNAGAR. VS. ADDL. CIT PATAN RANGE PATAN. (APPELLANT) .. (RESPONDENT) SARVA VIDYALAYA KELVANI MANDAL SARVA VIDYALAYA CAMPUS OPP. RAILWAY STATION KADI. VS. ADDL. CIT PATAN RANGE PATAN. (APPELLANT) .. (RESPONDENT) AND ASST. CIT PATAN RANGE PATAN. VS. SARVA VIDYALAYA KELVANI MANDAL SARVA VIDYALAYA CAMPUS OPP. RAILWAY STATION KADI. (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI S. N. DIVETIA AR REVENUE BY:- SHRI ALOK JOHRI CIT DR ITA NO.1053/AHD/2007 ASST. YEAR 2003-04 ITA NO.2599/AHD/2007 ASST. YEAR 2003-04 ITA NO.2802/AHD/2007 ASST. YEAR 2003-04 ITA NOS.1053 2599 & 2802/AHD/2007 ASST. YEAR 2003-04 2 O R D E R PER D.C. AGRAWAL ACCOUNTANT MEMBER . THESE ARE THREE APPEALS INVOLVING COMMON ISSUES AN D HENCE THEY ARE TAKEN UP TOGETHER FOR THE SAKE OF CONVENIENCE. ITA NO.1053/AHD/2007 ASST. YEAR 2003-04 (ASSESSEES APPEAL) 2. IN THIS APPEAL THE ASSESSEE HAS RAISED FOLLOWING GROUNDS :- (1) THE LD. CIT(A) HAS ERRED IN LAW AND/OR IN FACTS FOR NOT CONSIDERING THE INCOME AND EXPENDITURE OF RENT AMOU NTING TO RS.1 01 94 894/- AS A NOTIONAL INCOME AND EXPENDITU RE. (2) THE LD. CIT(A) WAS WRONG IN NOT ACCEPTING THE PLEA OF THE APPELLANT THAT THE RENT RECEIVED FROM VARIOUS INSTI TUTIONS IS AN INCOME OF THE APPELLANT AND THEREFORE THE INCOME TO THE APPELLANT ITSELF NOT REQUIRED TO BE INCLUDED FOR TH E PURPOSE OF COMPUTATION. (3) THE HONBLE TRIBUNAL MAY THEREFORE BE PLEASED TO DELETE THE INCOME OF RENT OR TO ALLOW THE EXPENDITURE OF RENT TO THE APPELLANT. 3. THE FACTS OF THE CASE ARE THAT ASSESSEE IS A CHA RITABLE TRUST AND IS REGISTERED UNDER BOMBAY PUBLIC TRUST ACT ON 19 TH DECEMBER 1952. IT IS ALSO REGISTERED WITH THE COMMISSIONER OF INCOME-TAX UNDER SECTION 12AA OF THE ACT. THE MAIN OBJECT OF THE TRUST IS SPREAD OF EDUCATION AND ALLIED ACTIVITIES. IT HAS 18 EDUCATIONAL INSTITUTIONS RUNN ING SCHOOLS AND COLLEGES IN THE FIELD OF ENGINEERING TECHNOLOGY AND GENERAL ETC. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO FOUND THAT THE ASSESSEE TRUST IS RECEIVING REVENUE FROM SEVERAL SOURCES AS UNDER :- ITA NOS.1053 2599 & 2802/AHD/2007 ASST. YEAR 2003-04 3 (1) GRANT-IN-AID AGAINST BUILDING; (2) GRANT-IN-AID AGAINST COMPENSATION FOR RENT PAID BY THE ASSESSEE FOR TAKING THE BUILDINGS ON RENT FOR RUNNING THE ED UCATIONAL INSTITUTIONS; (3) FEES FROM STUDENTS; AND (4) RECEIPTS FROM OTHER INSTITUTIONS. 4. THE EXPENDITURE INCLUDED FOLLOWING HEAD :- (I) PAYMENT OF RENT BY EDUCATIONAL INSTITUTION IN R ESPECT OF THE BUILDING OWNED BY THE TRUST. (II) OTHER EXPENDITURE TO RUN THE INSTITUTIONS. 5. THE AO FOUND THAT ASSESSEE HAS IN THE ACCOUNT O F EDUCATIONAL INSTITUTION DEBITED PAYMENT OF RENT PAID TO THE TR UST AND TREATED IT AS EXPENDITURE/APPLICATION OF INCOME. 6. ON THE OTHER HAND IT IS CLAIMED BY THE ASSESSEE THAT SUCH RENT RECEIVED BY THE TRUST IS CREDITED AS INCOME ON WHIC H STATUTORY DEDUCTION UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND @ 3 0%. ACCORDING TO THE AO BUILDINGS WHERE EDUCATIONAL INSTITUTIONS AR E RUN ARE OWNED BY THE ASSESSEE-TRUST AND THEREFORE ONE CANNOT MAKE THE PAYMENT OF RENT TO SELF. ACCORDINGLY THE EXPENDITURE CLAIMED BY THE AS SESSEE TRUST WAS CONSIDERED ON HIGHER SIDE AS IT HAS DEBITED NOTIONA L RENT. FURTHER IT HAS WRONGLY CLAIMED STATUTORY DEDUCTION OF 30%.. THIRDL Y IN PLACE OF STATUTORY INVESTMENT OF 15% ASSESSEE HAS SHOWN HIGH ER INVESTMENT WHICH NEEDED TO BE DISALLOWED. HE NOTED THAT GROSS REVENU E RECEIPT OF THE TRUST WAS RS.7 02 30 979/-. IT WAS REQUIRED TO APPLY @ 85 % THEREOF ON CHARITABLE ACTIVITIES OF THE TRUST WHICH WORKS OUT TO RS.5 96 96 332/-. THE ASSESSEE HAS IN FACT SHOWN THE APPLICATION AT RS.4 22 80 723/-. THUS THERE IS A SHORTAGE OF SUM OF RS.1 74 15 609/- IN APPLICA TION. THIS DEFICIENCY WAS TREATED AS INCOME OF THE ASSESSEE. FURTHER HE F OUND THAT ASSESSEE WAS SUPPOSED TO APPLY NOT MORE THAN 15% IN INVESTMENT. IT WORKS OUT TO ITA NOS.1053 2599 & 2802/AHD/2007 ASST. YEAR 2003-04 4 RS.1 05 34 646/-. IT HAS INVESTED RS.1 70 63 468/-. THUS THERE IS EXCESS INVESTMENT OVER AND ABOVE 15% WHICH WORKS OUT TO RS .65 28 821/-. THIRDLY ASSESSEE TRUST CLAIMED 30% OF RENT ALLOWANC E AT RS.30 58 468/- WHICH CANNOT BE GIVEN AS RENT RECEIVED IS NOT ACTUA L BUT IS ONLY NOTIONAL INCOME. THUS THE AO HAS COMPUTED THE INCOME OF THE ASSESSEE TRUST AS UNDER :- THE INCOME SHOWN BY THE ASSESSEE AS LOSS (-) RS.27 08 388/- ADD: AS DISCUSSED ABOVE GENERATION OF INCOME NOT QUALIFYING FOR EXEMPTION U/S 11[RS.17415609 (59696332 42280723) RS.1 74 15 609/- ADD: GENERATION OF SURPLUS BY WAY OF INVESTMENT IN EXCESS OF 15% NOT QUALIFYING FOR EXEMPTION U/S 11[RS.652882/- (17063468 -10534646) RS.65 28 821/- ADD: DISALLOWANCE OF STATUTORY RENT ALLOWANCE AT THE RATE 30% AS DISCUSSED ABOVE RS.30 58 468/ - -------------- -------- TOTAL INCOME RS.2 42 94 510/- 7. THE LD. CIT(A) ON THE OTHER HAND DIRECTED THAT ASSESSEE IS NOT ENTITLED TO 30% STATUTORY ALLOWANCE AS ASSESSEE HAS NOT ACTUALLY RECEIVED ANY RENT. WHAT WAS CREDITED WAS ONLY NOTIONAL RENT AND WHAT WAS DEBITED WAS ALSO NOTIONAL. THERE CANNOT BE ANY PAYMENT FROM SELF TO SELF. ON THE SAME LOGIC THE LD. CIT(A) HELD THAT RENTAL RECEIPT OF RS.1 01 94 894/- IS NOT REAL INCOME BUT HE HELD THAT THIS IS INTEGRAL P ART OF THE TOTAL RECEIPT COLLECTED BY THE TRUST THROUGH ITS 18 INSTITUTIONS WHEREAS DEBIT OF THE SAME SUM IS FOR NOTIONAL RENTAL EXPENDITURE. IN RESPECT ADDITION ON ACCOUNT OF UNDER APPLICATION OF RECEIPT FOR WHICH AO HAD PROPO SED AN ADDITION OF RS.1 74 15 609/- THE LD. CIT(A) FOUND THAT TOTAL R EVENUE AND CAPITAL EXPENDITURE OF THE ASSESSEE WORKS OUT TO RS.7 56 98 708/-. OUT OF THIS ITA NOS.1053 2599 & 2802/AHD/2007 ASST. YEAR 2003-04 5 RS.4 52 08 476/- IS ON REVENUE ACCOUNT WHEREAS RS.3 04 90 232/- IS ON CAPITAL ACCOUNT. EXPENDITURE ON CAPITAL ACCOUNT SHO ULD ALSO BE TREATED AS APPLICATION OF INCOME AS HELD BY HON. SUPREME COURT IN S.RM.M.CT.M.TIRUPANNI TRUST VS. CIT (1998) 230 ITR 636 (SC). THE LD. CIT(A) WORKED OUT TOTAL RECEIPT OF THE ASSESSEE TRUST AT RS.8 62 43 677/- WHICH WAS ALSO AFFIRMED BY LD. AO IN REMAND PROCEEDINGS. ON THIS BASIS 85% OF THE EXPENDITURE O F RS.8 62 43 677/- WOULD COME TO RS.7 33 07 125/-. SINCE STATUTORY REQ UIREMENT IS LESS THAN ACTUAL APPLICATION OF FUNDS NO ADDITION IS CALLED F OR ON THIS ACCOUNT AND ASSESSEE IS ENTITLED FOR EXEMPTION FOR ENTIRE RECE IPT. BUT HE CONFIRMED THE ADDITION OF RS.1 01 94 894/- AS RENTAL INCOME. 8. AGAINST THIS THE LD. AR SUBMITTED THAT SO FAR A S THE NOTIONAL EXPENDITURE OF RENT AND NOTIONAL INCOME OF RENT IS CONCERNED SUCH CREDIT AND DEBIT ENTRIES WILL COUNTER THEMSELVES AND NEUTR ALIZE WHEN ACCOUNTS OF THE TWO I.E. OF THE EDUCATIONAL INSTITUTION AND OF THE TRUST ARE CONSOLIDATED AND THEREFORE WITHOUT CONCEDING THE POINT HE SUB MITTED THAT THERE WILL NOT BE ANY CASE FOR CLAIM OF STATUTORY RENTAL ALLOW ANCE @ 30%. FROM THAT POINT OF VIEW THE RENTAL RECEIPT OF RS.1 01 94 894/ - SHOULD ALSO BE CONSIDERED AS NEUTRALIZED. 9. AGAINST THIS THE LD. DR SUBMITTED THAT THERE AR E MISTAKES BY BOTH THE LD. AO AND THE LD. CIT(A). ALL THE RECEIPTS BY THE ASSESSEE SHOULD BE CONSIDERED TOGETHER WHETHER ON CAPITAL ACCOUNT OR O N REVENUE ACCOUNT SUBJECT TO ANY RECEIPT GIVEN SPECIFICALLY FOR CORPU S OF THE TRUST WHICH SHOULD BE EXCLUDED. THERE SHOULD NOT BE ANY DEBIT O R CREDIT FOR RENT AND THIRDLY ONCE THERE IS NO ACTUAL RECEIPT OF RENT THE RE IS NO CASE FOR 30% STATUTORY ALLOWANCE. FINALLY DEFICIENCY BETWEEN 85% OF STATUTORY APPLICATION AND ACTUAL APPLICATION SHOULD BE CONSID ERED FOR DISALLOWANCE. ITA NOS.1053 2599 & 2802/AHD/2007 ASST. YEAR 2003-04 6 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW BOTH THE AO AND T HE LD. CIT(A) HAD COMMITTED LEGAL ERROR IN APPRECIATING THE FACTUAL M ATRIX OF THE CASE. IF FOR THE PURPOSE OF CLAIMING GRANT-IN-AID FROM THE GOVER NMENT ON ACCOUNT OF PAYMENT OF RENT THE ASSESSEE IS SHOWING RENT PAYME NT TO THE TRUST AND TO OFF SET IT IS SHOWING RENTAL INCOME IN THE HANDS OF THE TRUST BUT WHEN SUBSEQUENTLY IT IS AMALGAMATING THE ACCOUNT OF THE INSTITUTION IN THE TRUST FOR INCOME-TAX PURPOSES THEN DEBIT AND RENTAL CREDI T WOULD NEUTRALIZE AND THERE CANNOT BE ANY RENTAL EXPENDITURE OR RENTAL IN COME. HOWEVER THERE IS UTTER CONFUSION AS TO HOW MUCH RENTAL EXPENDITUR E HAS BEEN CLAIMED BY THE INSTITUTION AND HOW MUCH CORRESPONDING SUCH NOT IONAL RENTAL HAS BEEN SHOWN BY THE TRUST. THE FIGURES DO NOT TALLY. ON ON E HAND THE AO MENTIONED THAT TOTAL AMOUNT OF RENT DEBITED IS RS.4 22 80 723/- BUT RENTAL INCOME IS CONSIDERED ONLY AT RS.1 01 94 974/-. WHEN THERE IS NOTIONAL DEBIT OF RENT AND CORRESPONDING NOTIONAL CREDIT OF RENT THEN THERE SHOULD NOT BE ANY DIFFERENCE IN FIGURES. THEREFORE CORREC T STATE OF AFFAIRS ARE REQUIRED TO BE VERIFIED. THE ASSESSEE IS REQUIRED T O EXPLAIN WITH EVIDENCE AS TO HOW MUCH WAS THE EXACT NOTIONAL DEBIT OF RENT AL EXPENDITURE IN THE ACCOUNT OF VARIOUS EDUCATIONAL INSTITUTIONS AND HOW MUCH WAS NOTIONAL CORRESPONDING CREDIT OF RENT IN THE ACCOUNT OF THE TRUST. IF ANY RENT IS PAID TO ANY OTHER PARTY OTHER THAN THE TRUST THEN EVIDE NCE HAS TO BE SUBMITTED BY THE ASSESSEE SO AS TO CLAIM THE ALLOWANCE THEREO F AS AN EXPENDITURE. IN ABSENCE OF SUCH EVIDENCE ENTIRE SUM OF RS.4 22 80 7 23/- SHOULD BE TREATED AS NOTIONAL DEBIT OF RENT PAID BY THE TRUST AND SHO ULD BE TAKEN OUT OF RECKONING FROM COMPUTING EXPENDITURE FOR THE PURPOS ES OF APPLICATION. SECONDLY NO NOTIONAL RENTAL INCOME AT ALL HAS TO BE TAKEN AS RECEIPT. ONLY THE ACTUAL RECEIPT IN THE FORM OF GRANT-IN-AID OR S TUDENT FEES OR ANY OTHER REAL CASH IN-FLOW ACCRUED OR RECEIVED WOULD ALONE B E CONSIDERED AS ITA NOS.1053 2599 & 2802/AHD/2007 ASST. YEAR 2003-04 7 INCOME OF THE TRUST. STATUTORY PERCENTAGE OF 85% WI LL BE APPLIED ON SUCH ACTUAL RECEIPT. THIRDLY NO DEDUCTION OF STATUTORY 30% OF HOUSE RENT ALLOWANCE WILL BE ALLOWED FOR THE REASONS DISCUSSED ABOVE. FOURTHLY GRANT-IN-AID SPECIFICALLY FOR THE PURPOSE OF CORPUS OF THE TRUST WOULD BE EXCLUDED FROM RECKONING OF THE RECEIPTS SIDE OF THE INCOME AND EXPENDITURE ACCOUNT. WHERE THERE IS NO SUCH SPECIFI C DIRECTION/GRANT BY THE GOVERNMENT OR DONOR IT WILL BE TREATED AS A REC EIPT AT PAR WITH OTHER RECEIPTS ON REVENUE ACCOUNT. FIFTHLY ANY EXPENDITUR E INCURRED ON CAPITAL ACCOUNT SUCH AS ON CONSTRUCTION OF BUILDING WOULD A LSO BE TREATED AS APPLICATION OF FUND. 11. ON THE BASIS OF ABOVE GUIDELINES THE AO WILL WO RK OUT THE INCOME OF THE ASSESSEE CALCULATE ACTUAL EXPENDITURE/APPLI CATION OF THE ASSESSEE FOR CHARITABLE PURPOSES WORK OUT 85% OF RECEIPT/IN COME OF THE ASSESSEE AND FIND OUT THE DEFICIENCY BETWEEN SUCH 85% AND AC TUAL AMOUNT OF EXPENDITURE/APPLICATION. SUCH DEFICIENCY WOULD ALON E BE SUBJECT TO TAX AND NO OTHER FIGURE SUCH AS NOTIONAL RENTAL INCOME OR INVESTMENT IN EXCESS OF 15% AS DONE BY THE AO WOULD BE SUBJECTED TO TAX . 12. IN THE PRESENT CASE ONLY DISPUTE RELATES TO SUM OF RS.1 01 90 894/- WHICH HAS BEEN SUSTAINED BY THE LD. CIT(A) AS INCOM E. AFTER GIVING EFFECT TO LD. CIT(A)S ORDER WHATEVER INCOME IS SURVIVED THEN INCOME COMPUTED BY THE AO BY FOLLOWING OUR OBSERVATION ABO VE WILL NOT BE MORE THAN THE INCOME SO SURVIVED AFTER GIVING APPEA L EFFECT TO THE ORDER OF LD. CIT(A). IF ASSESSEE GETS SOME RELIEF AFTER C OMPUTING INCOME AS PER OUR DIRECTION ABOVE THEN SUCH RELIEF WOULD BE ALLO WED. THUS IN NO CASE INCOME AS COMPUTED AS PER OUR OBSERVATION ABOVE WI LL BE MORE THAN INCOME WORKED OUT AFTER APPEAL EFFECT GIVEN TO THE ORDER OF LD. CIT(A) AND WILL BE RESTRICTED TO THAT FIGURE ONLY. THE REA SONS ARE THAT REVENUE IS ITA NOS.1053 2599 & 2802/AHD/2007 ASST. YEAR 2003-04 8 NOT IN APPEAL AGAINST THE ORDER OF LD. CIT(A) NOR I T HAS FILED ANY CROSS- OBJECTION. AS A RESULT APPEAL FILED BY THE ASSESSE E IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.2599/AHD/2007 ASST. YEAR 2003-04 (ASSESSEES APPEAL) 13. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN TH IS APPEAL :- (1) THE LD. CIT(A) HAS ERRED IN LAW AND/OR IN FACTS FOR NOT CONSIDERING THE INCOME AND EXPENDITURE OF RENT AMOU NTING TO RS.2 00 23 692/- AS A NOTIONAL INCOME AND EXPENDITU RE. (2) THE LD. CIT(A) WAS WRONG IN NOT CONSIDERING THE PLE A OF THE APPELLANT THAT THE RENT RECEIVED FROM VARIOUS INSTI TUTIONS IS AN INCOME OF THE APPELLANT AND THEREFORE THE INCOME TO THE APPELLANT ITSELF NOT REQUIRED TO BE INCLUDED FOR TH E PURPOSES OF COMPUTATION. (3) THE LD. CIT(A) WAS WRONG IN NOT CONSIDERING THE EXP ENDITURE OF RENT AMOUNTING TO RS.1 87 87 692/- PAID BY THE 58 I NSTITUTES ARE THE EXPENDITURE OF THE TRUST. (4) THE HON. TRIBUNAL MAY THEREFORE BE PLEASED TO DEL ETE THE INCOME OF RENT OR TO ALLOW THE EXPENDITURE OF RENT TO THE APPELLANT. ITA NO.2802/AHD/2007 ASST. YEAR 2003-04 (REVENUES APPEAL) 14. THE REVENUE HAS RAISED FOLLOWING GROUNDS IN THI S APPEAL: (1) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT HOLDING THAT THE ASSESSEE WAS ELIGIBLE FOR INVESTMENT IN RESPECT OF 85% OF RS.2 98 13 438/- AND NOT RS.3 49 39 042/- U/S 11 OF THE ACT. (2) CONSEQUENT TO THE ABOVE FINDING THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO GIVE FURTHER DEDUC TION TO THE EXTENT OF RS.51 25 554/-. 15. THE FACTS RELATING TO THIS ASSESSEE ARE THE SAM E AS THE FACTS DESCRIBED BY US IN THE CASE OF NOOTAN SARVA VIDHYAL AYA KELWANI MANDAL ITA NOS.1053 2599 & 2802/AHD/2007 ASST. YEAR 2003-04 9 VISNAGAR IN ITA NO.1053/AHD/2007. HERE ALSO THE ASS ESSEE HAS DEBITED NOTIONAL RENT IN THE ACCOUNT OF EDUCATIONAL INSTITU TION CREDITED NOTIONAL INCOME IN THE ACCOUNT OF TRUST AND CLAIMED 30% STAT UTORY HOUSE RENT ALLOWANCE. THE AO COMPUTED INCOME OF THE TRUST BY W ORKING OUT DEFICIENCY BETWEEN 85% OF GROSS RECEIPT AND EXPENDI TURE INCLUDING NOTIONAL RENT SHOWN TO BE PAID BY THE ASSESSEE AND HE ALSO TAXED SURPLUS OF INVESTMENT OVER AND ABOVE 15% ABOVE LIMIT. THE C OMPUTATION OF INCOME BY AO IS AS UNDER :- THE INCOME SHOWN BY THE ASSESSEE AS LOSS (-) RS.5 5 0 70 670/- ADD: AS DISCUSSED ABOVE. GENERATION OF INCOME NOT QUALIFYING FOR EXEMPTION U/S 11 RS.21324229/- (168943155 -147618926) RS.2 13 24 229/- ADD: GENERATION OF SURPLUS BY WAY OF INVESTMENT IN EXCESS OF 15% NOT QUALIFYING FOR EXEMPTION U/S.11 ` RS.5125544/- (34939042 -29813498) RS.51 25 544/- ADD: DISALLOWANCE OF STATUTORY RENT ALLOWANCE AT THE RATE 30% AS DISCUSSED ABOVE RS.60 07 108/- ---------------------- TOTAL LOSS (-) RS.2 26 13 789/- 16. THE LD. CIT(A) HAS ALSO GIVEN SIMILAR DECISION AS IN THE CASE OF NOOTAN SARVA VIDYALAYA KELWANI MANDAL. HE HAS UPHEL D THE RECEIPT OF NOTIONAL RENT BUT DID NOT ALLOW NOTIONAL EXPENDITUR E OF RENT AND DID NOT ALLOW 30% OF RENTAL ALLOWANCE. AS A RESULT BOTH TH E PARTIES ASSESSEE AS WELL AS THE REVENUE ARE IN APPEALS. 17. WE HAVE HEARD THE PARTIES AND DIRECT THE AO TO CARRY OUT RECOMPUTATION OF RECEIPTS EXPENDITURE STATUTORY A LLOWABLE EXPENDITURE/APPLICATION AND THEREAFTER WORK OUT ASS ESSABLE DEFICIENCY. HE ITA NOS.1053 2599 & 2802/AHD/2007 ASST. YEAR 2003-04 10 WILL WORK OUT STATUTORY PERCENTAGE OF EXPENDITURE A ND TAX THAT DEFICIENCY AS INCOME. ON THE BASIS OF SIMILAR GUIDELINES AS GI VEN BY US IN THAT CASE THE AO WILL CARRY OUT NECESSARY WORKING AND COMPUTE SURPLUS INCOME (DEFICIENCY) IN APPLICATION FOR TAX PURPOSES. HOWEV ER THE RIDER THAT WE HAVE DIRECTED IN THAT CASE ON ACCOUNT OF REVENUE NO T FILING ANY APPEAL OR CROSS-OBJECTION WILL NOT BE APPLICABLE IN THE PRESE NT CASE. THE AO WILL BE FREE TO COMPUTE THE INCOME AS PER OUR OBSERVATIO N/GUIDANCE GIVEN THEREIN. AS A RESULT BOTH THE APPEALS ARE ALLOWED BUT FOR STATISTICAL PURPOSES. 18. IN THE RESULT ALL THE THREE APPEALS TWO OF AS SESSEES AND ONE OF THE REVENUE ARE ALLOWED BUT STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN OPEN COURT ON 18.2.11. SD/- SD/- (MAHAVIR SINGH) (D.C. AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMB ER AHMEDABAD DATED : 18.2.11. MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD ITA NOS.1053 2599 & 2802/AHD/2007 ASST. YEAR 2003-04 11 1.DATE OF DICTATION 7/2/2011 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 9/2/ 2011 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..