MOH Limited, Ahmedabad v. The Income tax Officer, Ward-4(4),, Ahmedabad

ITA 110/AHD/2005 | 2001-2002
Pronouncement Date: 24-12-2010 | Result: Allowed

Appeal Details

RSA Number 11020514 RSA 2005
Bench Ahmedabad
Appeal Number ITA 110/AHD/2005
Duration Of Justice 5 year(s) 11 month(s) 14 day(s)
Appellant MOH Limited, Ahmedabad
Respondent The Income tax Officer, Ward-4(4),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 24-12-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 24-12-2010
Date Of Final Hearing 14-12-2010
Next Hearing Date 14-12-2010
Assessment Year 2001-2002
Appeal Filed On 10-01-2005
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD A BENCH BEFORE SHRI G.D. AGARWAL VICE-PRESIDENT (AZ) AND SHRI MAHAVIR SINGH JUDICIAL MEMBER ITA NO.110 &116/AHD/2005 [ASSTT.YEAR: 2001-02] MOH LIMITED -VS- INCOME TAX OFFICER KHADIA CHAR RASTA WARD-4(4) AHMEDABAD NR. PUROHIT HOTEL AHMEDABAD PAN NO.ABCM0365L INCOME TAX OFFICE -VS- MOH LIMITED WARD-4(4) AHMEDABAD KHADIA CHAR RASTA NR. PURHOHIT HOTEL AHMEDABAD (APPELLANT) (RESPONDENT) ITA NO.3316-3318/AHD/2009 [ASSTT. YEARS :2001-02 TO 2002-03 & 2004-05 MOH LIMITED -VS- INCOME TAX OFFICER 996 KHADIA CHAR RASTA WARD-4(4) AHMEDABAD AHMEDABAD (APPELLANT) (RESPONDENT) REVENUE BY : SHRI ANIL KUMAR CIT-DR ASSESSEE BY: SHRI SAKAR SHARMA AR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- OUT OF THESE FIVE APPEALS ITA NO.110/AHD/2005 & 116/AHD/2005 ARE CROSS APPEALS ARISING OUT OF ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)- VIII AHMEDABAD IN APPEAL NO.CIT(A)/VIII/ ITO/4(4)/ 24/04-05 DATED 10-11- 2004. THE ASSESSMENT WAS FRAMED BY ITO WARD-4(4) A HMEDABAD U/S.143(3)(II) OF THE INCOME-TAX ACT 1961 (HEREINA FTER REFERRED TO AS THE ACT) ITA NO.110 116/AHD/2005 & 3316-18/AHD/2009 A.YS 01-02 02-03 & 04 -05 MOH LTD. V. ITO WD-4(4) ABD PAGE 2 VIDE HIS ORDER DATED 30-03-2004 FOR ASSESSMENT YEAR 2001-02. THE OTHER THREE APPEALS BY THE ASSESSEE ARE ARISING OUT OF OR DERS OF CIT(A)-VIII AHMEDABAD IN APPEAL NOS. CIT(A)VIII/ITO/4(4)/165 1 62 & 238/08-09 OF DIFFERENT DATE 17 TH & 13 TH AUGUST 2009. THE ASSESSMENTS WERE FRAMED BY ITO WARDD-4(4) AHMEDABAD U/S.143(3) R.W.S. 147 OF THE ACT VIDE HIS DIFFERENT ORDERS DATED 31-12-2007 & 24-11-2006 FOR ASSESSMENT YEARS 2001-02 2002- 03 & 2004-05 RESPECTIVELY. FIRST WE WILL DEAL WITH CROSS APPEALS OF REVENUE AN D ASSESSEE IN ITA NO.116/AHD/2005 & ITA NO.110/AHD/2005. 2. THE FIRST COMMON ISSUE IN THESE CROSS APPEALS IS AS REGARDS TO THE ORDER OF CIT(A) DELETING THE ADDITION U/S.68 OF THE ACT BUT CONFIRMING THE ADDITION ON ACCOUNT OF SALES REALIZATION FROM RS.7. 08 CRORES TO RS.12.35 CRORES. FOR THIS REVENUE HAS RAISED THE FOLLOWING GROUND :- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS SI N DELETING THE ADDITION OF RS.7 08 00 000/- MADE BY THE A.O U/S.68 OF THE I .T. ACT. THE ASSESSEE HAS RAISED SIX GROUNDS BUT SUBSEQUENTL Y REVISED VIDE APPLICATION DATED 14-10-2010 AND RAISED THE ISSUE O F NOT GRANTING SET OFF UNABSORBED BUSINESS LOSS AS WELL AS ASSESSING THE I NCOME FROM OTHER SOURCE AND NOT UNDER THE HEAD BUSINESS INCOME. FOR THIS IT HAS RAISED THE FOLLOWING REVISED GROUNDS:- 1. THE LD. CIT(A) ERRED ON FACTS AND IN LAW IN INV OKING PROVISIONS OF SECTION 68 OF THE ACT IN DIRECTING THE ASSESSING OF FICER TO TAX SALES REALIZATION AMOUNTING TO RS.12 35 10 000/-. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT THE ASSESSING OFFICER HAD INV OKED PROVISIONS OF SECTION 68 IN RESPECT TO TWO CREDITS APPEARING IN T HE BOOKS TOTALING AT RS.7K 08 00 000/- REPRESENTING UNPAID SOFTWARE PURC HASES AND THERE WAS NO ADDITION U/S.68 IN RESPECT OF SALES TURNOVER . THE ACTION OF LD. CIT(A) DIRECTING TO TAX SALES AT THE TIME OF REALIZ ATION AMOUNTS TO ENHANCEMENT FOR WHICH NO NOTICE WAS GIVEN TO THE AP PELLANT. THE ACTION OF THE LD. CIT(A) BEING ILLEGAL AND VOID AB-INITO A ND CONTRARY TO THE PROVISIONS OF THE ACT IS REQUESTED TO BE QUASHED/CA NCELLED. ITA NO.110 116/AHD/2005 & 3316-18/AHD/2009 A.YS 01-02 02-03 & 04 -05 MOH LTD. V. ITO WD-4(4) ABD PAGE 3 2. THE LD. CIT(A) ERRED ON FACTS AND IN LAW IN DIRE CTING TO ASSESS THE INCOME FROM SOFTWARE BUSINESS EQUAL TO SALES REALIZ ED DURING THE YEAR INSTEAD OF DETERMINING THE SAME BY APPLYING PRINCIP LES OF REAL INCOME THEORY I.E. TO THE EXTENT THE FUNDS SO RECEIVED HA D BEEN RETAINED AND ENJOYED BY THE APPELLANT. 3. THE LD. CIT(A) ERRED ON FACTS AND I LAW IN HOLDI NG THAT INCOME OF RS.1 57 10 09090/- IS NOT ENTITLED TO BE ASSESSED E ITHER UNDER THE HEAD INCOME FROM OTHER SOURCES AS HELD IN THE ASSESSME NT ORDER OR UNDER THE HEAD INCOME FROM BUSINESS. ON THE FACTS AND I N THE CIRCUMSTANCES OF THE CASE HE OUGHT TO HAVE DIRECTE D TO ASSESS THE SAME UNDER THE HEAD INCOME FROM BUSINESS. 4. THE LD. CIT(A) ERRED ON FACTS AND IN LAW IN NOT GRANTING SET OFF OF UNABSORBED DEPRECIATION AND BUSINESS LOSS PERTAININ G TO EARLIER YEARS WHILE ASSESSING THE INCOME. 3. AT THE OUTSET THE LD. COUNSEL FOR THE ASSESSEE SHRI SAKAR SHARMA REQUESTED THE BENCH TO SUBSTITUTE GROUND NO.2 TAKEN IN APPEAL FURNISHED ON 11/01/2005 IN ITA NO.116/AHD/2005 WHICH REMAINED TO BE RAISED DUE TO INADVERTENCE THOUGH PLEA FOR THE SAME WAS RAISED BE FORE THE CIT(A). HE NARRATED FACTS OF THE CASE THAT THE ASSESSEE IS ENG AGED IN THE BUSINESS OF MANUFACTURING PROCESSING AND SELLING GRANITE AND A LSO ENTERED INTO A NEW BUSINESS ACTIVITY OF MARKETING OF SPECIALIZED SOFTW ARE ON BACK-TO-BACK BASIS FROM THIS YEAR. UNDER THIS ARRANGEMENT IT PURCHASED SPECIALIZED SOFTWARE ON CREDIT SOLD THE SAME TO THE PARTIES WHO WERE INTER ESTED IN ACQUIRING THE SAME REALIZED THE MONEY FROM SUCH PARTIES AND PAID TO TH E PARTIES FROM WHOM SUCH SOFTWARE HAD BEEN ACQUIRED AND WAS UNDER NO OBLIGAT ION TO MAKE PAYMENT TO THE SUPPLIERS OF SOFTWARE UNLESS THE AMOUNT IS REAL IZED FROM THE PARTIES WHO ACQUIRED THE SAME. MEANING THEREBY SOFTWARE HAD BEE N ACQUIRED AT THE SPECIFIC REQUESTS OF THE RESPECTIVE PARTIES WHO WE RE INTERESTED IN ACQUIRING THE SAME. HE STATED THAT THIS SOFTWARE BUSINESS HAS BEEN HELD TO BE NON- GENUINE BY THE AO WHO ON VERIFICATION NOTICED THAT ASSESSEE NOT ONLY OPENED BANK ACCOUNTS TOGETHER WITH SUPPLIERS AS WELL AS BU YERS OF SOFTWARE BUT ALSO SQUARED UP ACCOUNTS BY ROTATING THE SAME FUNDS AMON G SUCH ACCOUNTS TILL SUCH ACCOUNTS REDUCED TO NIL BALANCE OF LIABILITY A ND BALANCE SHOWN AS DEBTOR ITA NO.110 116/AHD/2005 & 3316-18/AHD/2009 A.YS 01-02 02-03 & 04 -05 MOH LTD. V. ITO WD-4(4) ABD PAGE 4 IN THE BOOKS. THIS FINDING OF THE AO HAS BEEN UPHEL D BY CIT(A) AS IN COURSE OF APPELLATE PROCEEDINGS IT CONTENDED BEFORE THE CIT( A) THAT IF SOFTWARE BUSINESS IS HELD TO BE NON GENUINE THEN INCOME NEE D TO BE COMPUTED ON REAL INCOME BASIS BY EXCLUDING TRANSACTIONS RELATING TO PURCHASE AND SALE OF SOFTWARE. THE CIT HOWEVER DID NOT CARRY OUT ANY SUC H EXERCISE OR GAVE ANY DIRECTION IN THIS REGARD. THIS BEING A LEGAL ISSUE WHICH REMAINED TO BE ADJUDICATED IT REQUESTED TRIBUNAL TO GRANT SUBSTIT UTION OF REVISED GROUNDS AGAINST GROUNDS RAISED AT TIME OF FILING OF APPEAL. 4. ON THE ABOVE PLEA THE BENCH PUT A QUERY TO THE LD. COUNSEL WHETHER HE IS ARGUING THAT THE BUSINESS OF SOFTWARE I.E. TRADI NG IN CUSTOMIZE SOFTWARE WAS MERELY A BOOK ENTRY AND IT IS REALLY NOT ASSESSEES BUSINESS HE PROMISED TO FILE A WRITTEN SUBMISSION IN THIS RESPECT. 5. THE LD. COUNSEL FOR ASSESSEE SHRI SHARMA ON 114 -12-2010 FILED WRITTEN SUBMISSION NARRATING THAT THE ASSESSEE ACTED AS TRA NSFORMER OF BOOK ENTRY AND MODUS OPERANDI THE ASSESSEE IN SOFTWARE ACTIVIT Y WAS BACK-TO-BACK TRANSACTION AND FURTHER CLARIFIED THAT THE ACCOMMOD ATION OF THESE TRANSACTIONS IN THE BOOKS OF ACCOUNT THE ASSESSEE HAS NOT AVAIL ED ANY BENEFIT UNDER ANY OF THE PROVISIONS OF ANY STATUES. THE WRITTEN SUBMI SSIONS FILED BY THE ASSESSEES COUNSEL UNDER THE SIGNATURE OF DIRECTOR OF ASSESSEE-COMPANY SHRI SUNIL M SHAH ARE AS UNDER:- HON'BLE MEMBERS DURING THE COURSE OF HEARING A QUERY HAS BEEN RAISE D BY THE HON'BLE BENCH AS TO WHETHER ASSESSEE UNDERTOOK GENU INE SOFTWARE TRADING ACTIVITY OR SUCH ACTIVITIES WERE M ERELY ON BOOKS AND WERE ACCOMMODATION ENTRIES. IN THIS REGARD IT I S SUBMITTED THAT ASSESSEE DURING THE RELEVANT ASSESSMENT YEARS DISCLOSED THREE KIND OF BUSINESS ACTIVITIES: (1) GRANITE BUSINESS: MANUFACTURING AND TRADING OF GRANITE SLABS BLOCKS & TILES. (2) SOFTWARE BUSINESS: TRADING OF CUSTOMIZED SOFTWARES; AND (3) WORLD ON PHONE BUSINESS: MAKING ADVERTISEMENTS AND ITA NO.110 116/AHD/2005 & 3316-18/AHD/2009 A.YS 01-02 02-03 & 04 -05 MOH LTD. V. ITO WD-4(4) ABD PAGE 5 CALLING APPLICATIONS FOR COMMENCING FACILITY FOR IN TERNATIONAL PHONE CALLS THROUGH INTERNET. BUSINESS ACTIVITIES APPEARING AT SR NO (1) & (3) WE RE UNDERTAKEN BY ASSESSEE ON ITS OWN WHEREAS BUSINESS ACTIVITIES APPEARING AT SR NO (2) WERE UNDERTAKEN BY ASSESSEE AT THE BEHEST OF MANAGEMENT OF TRANS TECHNO GROUP (I.E. SKYLID TELECOMMUNICATIONS LTD/ TRANS TECHNO FOODS LTD AND OTHER GROUP COMPANIES) WHO APPROACHED THE ASSESSEE TO ROU TE TRANSACTIONS RELATING TO SOFTWARE BUSINESS UNDERTAK EN BY THEM THROUGH ASSESSEE'S BOOKS FOR WHICH THEY PROVIDED CO PIES OF INVOICES AND OTHER RELEVANT DOCUMENTS ABOUT THE ID ENTITY OF SUCH PARTIES. THEY ASSURED ASSESSEE OF ARRANGING REQUIRE D BANKING TRANSACTIONS CONFIRMATIONS AND OTHER DOCUMENTS FOR SQUARING UP ACCOUNTS RELATING TO THIS PART OF BUSINESS. FOR ALL OWING ASSESSEE'S BOOKS FOR ROUTING SUCH TRANSACTIONS THEY OFFERED ASSESSEE MARGIN OF ABOUT HALF PERCENT OF BILLED SALES DISCLO SED IN THE ACCOUNTS. SINCE THESE WERE BACK TO BACK TRANSAC TIONS I.E. PAYMENTS TO THE CREDITORS INTRODUCED IN THE ACCOUNT S WERE TO BE PAID OUT OF REALIZATIONS FROM THE DEBTORS AND ASSES SEE WAS NOT REQUIRED EITHER TO BRING NEW FUNDS OR TO MARKET SUC H SOFTWARES THE ASSESSEE WHO WAS CASH STRAPPED AND NEEDED FUNDS AGREED FOR THE SAME AND THEREFORE MADE ENTRIES IN THE BOO KS OF ACCOUNTS AS PER THE DIRECTIONS OF MANAGEMENT OF TRA NS TECHNO GROUP. IN THIS BACKGROUND ASSESSEE AT THE DICTATES OF TRANS TECHNO GROUP MADE ACCOUNTING ENTRIES AND RETAINED F UNDS TO THE EXTENT PERMITTED BY THE SAID GROUP. IN THIS BACKGROUND ASSESSEE SUBMITS THAT TRANSACTIO NS UNDERTAKEN FOR SR. NO. (1) & (3) BELONG TO THE ASSE SSEE AND ARE GENUINE WHEREAS TRANSACTIONS APPEARING AT SR NO (2) APPEAR IN THE BOOKS OF THE ASSESSEE MERELY AS BOOK ENTRY AS A DVISED AND SUGGESTED BY TRANS TECHNO GROUP AND THEREFORE ARE N OTHING BUT ACCOMMODATION ENTRIES. MODUS OPERAND! OF UNDERTAKIN G BACK TO BACK SOFTWARE ACTIVITY WAS BROUGHT TO THE NOTICE OF THE LD. CIT (A) IN THE COURSE OF APPELLATE PROCEEDINGS BY WAY O F SUBMISSIONS. THE ASSESSEE FURTHER SUBMITS AND CLARIFIES THAT BY ALLOWING ACCOMMODATION OF THESE TRANSACTIONS IN THE BOOKS OF ASSESSEE THE ASSESSEE HAS NOT AVAILED ANY TAX BENEFIT EITHER UNDER THE ITA NO.110 116/AHD/2005 & 3316-18/AHD/2009 A.YS 01-02 02-03 & 04 -05 MOH LTD. V. ITO WD-4(4) ABD PAGE 6 PROVISIONS OF INCOME-TAX ACT OR UNDER THE PROVISION S OF ANY OTHER STATUTES. 6. ON THIS LD. CIT-DR STATED THAT THIS ISSUE IS NO T ANALYZED BY ANY OF THE AUTHORITIES BELOW I.E. NEITHER THE ASSESSING OFFICE R NOR THE CIT(A) AND THIS BEING A NEW PLEA IT REQUIRES TO BE DECIDED AFRESH AFTER CONSIDERING ALL THE MATERIAL FACTS NECESSARY FOR ASSESSMENT YEAR AND AC CORDINGLY HE URGED THE BENCH IN CASE THE PLEA IS ADMITTED IT REQUIRES RE -ADJUDICATION AT THE LEVEL OF THE ASSESSING OFFICER. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT IN REGARD TO THE GROUNDS IN ENTIRETY THE ISSUES REQUIRE RECONSIDERATION WHETHER THE TRAD ING OF CUSTOMIZED SOFTWARE IS FOR ROTATION OF TRANSACTION OF COMPANIES NAMELY TRANS TECHNO GROUP (I.E. SKYLID TELECOMMUNICATIONS LTD. TRANS TECHNO FOODS L TD AND OTHER GROUP COMPANIES) AND WHETHER TO THESE TRANSACTIONS SEC. 68 WILL APP LY OR THE ENTIRE TURNOVER WILL BE CONSIDERED FOR THE PURPOSE OF ASSE SSMENT. AND WHETHER THESE TRANSACTIONS ARE BACK-TO-BACK TRANSACTION OR ACCOMM ODATION ENTRIES THE ASSESSING OFFICER WILL HAVE TO VERIFY AND GIVE A FI NDING AND DECIDE THE ISSUE. FOR THIS WE WILL DISCUSS THE BRIEF FACTS THAT THE ASSESSEE IS A PUBLIC LIMITED LISTED COMPANY ENGAGED IN THE BUSINESS OF PROCESSIN G POLISHING AND TRADING OF GRANITES. DURING THE YEAR UNDER CONSIDERATION IT GOT ENGAGED IN TRADING OF COMPUTER SOFTWARE ALSO. THE ASSESSEE FILED RETURN O F INCOME DECLARING INCOME AT NIL ON 31-10-2001 AFTER SETTING OFF OF BROUGHT F ORWARD LOSSES AND UNABSORBED DEPRECIATION. THE RETURN OF INCOME WAS A CCOMPANIED WITH AUDITED ACCOUNTS TAX AUDIT REPORT U/S.44AB ETC. TH E ASSESSMENT WAS COMPLETED U/S.143(3) ON 30-03-2004 DETERMINING TOTA L INCOME AT RS.6 92 81 214/-. IN THE ASSESSMENT ORDER ASSESSING OFFICER MADE TWO ADDITIONS. FIRST U/S.68 AMOUNTING TO RS.7.08 LAKH I N RESPECT OF THE CREDIT OUTSTANDING BALANCES PERTAINING TO THE TWO SUPPLIER S OF SOFTWARE I.E. CAREER INFORMATION TECHNOLOGY AND GAP CORPORATE SERVICES P VT. LD. THE SECOND ITA NO.110 116/AHD/2005 & 3316-18/AHD/2009 A.YS 01-02 02-03 & 04 -05 MOH LTD. V. ITO WD-4(4) ABD PAGE 7 ADDITION WAS MADE ON ACCOUNT OF ALLEGED UNEXPLAINED CASH SALES AMOUNTING TO RS.2 56 700/- AND IN THE ASSESSMENT ORDER THE AO HELD TRANSACTIONS OF SALES AND PURCHASES OF SOFTWARE TO BE BOGUS AND NON -GENUINE. THE AO ALSO HELD DECLARED PROFITS OF RS.1 57 10 000/- FROM SOFT WARE BUSINESS AND ALLEGED CASH SALES OF RS.2 56 700/- AS INCOME ASSESSABLE UN DER THE HEAD INCOME FROM OTHER SOURCES AGAINST INCOME DECLARED IN THE RETURN OF INCOME UNDER THE HEAD INCOME FROM BUSINESS. THE ASSESSEE HAS CLAIM ED BEFORE US THAT THERE WAS NO INFLOW OF MONEY IN RESPECT OF THE ADDITIONS MADE U/S.68 BY THE AO IN THE YEAR UNDER CONSIDERATION. THE ASSESSEE PREFERRE D APPEAL BEFORE THE CIT(A) AND SUBMITTED THAT SINCE ENTIRE SALES AND PU RCHASE TRANSACTIONS OF SOFTWARE HAVE BEEN HELD NON-GENUINE AND BOGUS THER E COULD NOT BE ANY INCOME FROM SOFTWARE BUSINESS WHICH CAN BE BROUGHT TO TAX. THE CIT(A) WAS ALSO INFORMED ABOUT THE FACT THAT ADDITIONS MADE IN RESPECT OF THE TWO PARTIES I.E. CAREER INFORMATION TECHNOLOGY AND GAP CORPORAT E SERVICES PVT. LTD. U/S.68 THERE WAS NO INFLOW OF FUNDS IN THE BOOKS OF THE ASSESSEE FROM THESE PARTIES PROVISIONS OF SEC 68 OF THE ACT AS NOT APPL ICABLE AND AS SUCH HAVE BEEN WRONGLY INVOKED. IT WAS ALSO PLEADED THAT INCO ME ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES IS ASSESSABLE UNDE R THE HEAD INCOME FROM BUSINESS. THE ATTENTION OF CIT(A) WAS ALSO DRAWN T O THE ADDITION MADE IN RESPECT OF CASH SALES AMOUNTING TO RS.2 56 700/- TH AT THE SAID AMOUNT REPRESENTS SALES DULY RECORDED IN THE BOOKS PERTAIN ING TO THE GRANITE BUSINESS AND THEREFORE ADDITION MADE IS NOT JUSTIFIED. WHILE DISPOSING OF THE APPEAL CIT(A) HAS UPHELD THE ACTION OF AO INVOKING PROVISI ONS OF SEC.68 IN RESPECT OF THE SOFTWARE SALES OF RS.12 35 10 000/-. THE FACT I S THAT THE PROVISIONS OF SECTION 68 WERE NOT INVOKED IN RESPECT OF THE SOFTW ARE SALES BUT WERE INVOKED IN RESPECT OF THE TWO PARTIES REPRESENTING SOFTWARE PURCHASES. SIMILARLY CIT(A) HAS HELD THAT THE INCOME ASSESSABLEU/S.68 OF THE ACT IS NOT ENTITLED TO BE ASSESSED UNDER ANY OF THE HEAD OF INCOME INCLUDI NG INCOME FROM OTHER SOURCES. THE CIT(A) HAS NOT REDUCED THE QUANTUM OF INCOME ASSESSABLE UNDER THE HAD WHEN THE PROVISIONS OF SECTION 68 ARE INVOKED IN RESPECT OF THE SALES REALIZED. THIS HAS RESULTED INTO OVER ASSESSM ENT OF INCOME BY RS.11.10 ITA NO.110 116/AHD/2005 & 3316-18/AHD/2009 A.YS 01-02 02-03 & 04 -05 MOH LTD. V. ITO WD-4(4) ABD PAGE 8 LAKH. FURTHER SHIFTING OF ASSESSMENT U/S.68 FROM P ARTIES CONNECTED WITH THE SOFTWARE PURCHASE TO THE PARTIES CONNECTED WITH THE SOFTWARE SALES AMOUNTS TO ENHANCEMENT OF INCOME. THE CIT(A) ALSO UPHELD TH E ACTION OF AO MAKING ADDITION OF RS.2 57 200/- WITHOUT APPRECIATING THE SUBMISSIONS MADE. AGGRIEVED ASSESSEE AND REVENUE PREFERRED CROSS APP EALS BEFORE TRIBUNAL. 8. WE FIND FROM THE ABOVE FACTS THAT IN REGARD TO THE GROUNDS IN ENTIRETY THE ISSUES REQUIRE RECONSIDERATION WHETHER THE TRA DING OF CUSTOMIZED SOFTWARE IS FOR ROTATION OF TRANSACTION OF COMPANIES NAMELY TRANS TECHNO GROUP (I.E. SKYLID TELECOMMUNICATIONS LTD. TRANS TECHNO FOODS L TD AND OTHER GROUP COMPANIES) AND WHETHER TO THESE TRANSACTIONS SEC. 68 WILL AP PLY OR THE ENTIRE TURNOVER WILL BE CONSIDERED FOR THE PURPOSE OF ASSE SSMENT. AND WHETHER THESE TRANSACTIONS ARE BACK-TO-BACK TRANSACTION OR ACCOMM ODATION ENTRIES THE ASSESSING OFFICER WILL HAVE TO VERIFY AND GIVE A FI NDING AND DECIDE THE ISSUE. THE ASSESSING OFFICER WILL ALSO CONSIDER THE PLEA WHETHER THE ASSESSEES INCOME IS FROM OTHER SOURCES OR INCOME FROM BUSINES S. THE OTHER CONSEQUENTIAL ACTIONS THE AO WILL TAKE WHILE ADJUD ICATING THESE ISSUES. ACCORDINGLY THIS CROSS APPEALS OF REVENUE AND THA T OF THE ASSESSEE ARE SET ASIDE TO THE FILE OF ASSESSING OFFICER FOR RE-ADJUD ICATION AND ALLOWED FOR STATISTICAL PURPOSES. COMING TO ITA NO.3316-3318/AHD/2009 OF ASSESSEES A PPEALS. 9. AT THE OUTSET LD. COUNSEL FOR ASSESSEE SHRI SH ARMA AND LD. CIT-DR SHRI ANIL KUMAR FAIRLY AGREED THAT SINCE THE MAIN C ROSS APPEALS ARE SET ASIDE TO THE FILE OF ASSESSING OFFICER IN THESE YEARS AL SO ARE EXACTLY IDENTICAL AND NEEDS RE-ADJUDICATION IN VIEW OF DECISION TAKEN IN ASSESSMENT YEAR 2001-02. 10. WE FIND THAT IN ITA NO.3316-3317/AHD/2009 THAT THERE IS ONE ISSUE REGARDING JURISDICTION AND IN ALL THESE THREE APPEA LS THERE ARE ISSUES REGARDING MERITS WHICH HAS A DIRECT CONNECTION WITH THE MAIN ISSUE IN ABOVE CROSS APPEALS WHICH ARE ALREADY SET ASIDE TO THE FILE OF ASSESSING OFFICER ON ITA NO.110 116/AHD/2005 & 3316-18/AHD/2009 A.YS 01-02 02-03 & 04 -05 MOH LTD. V. ITO WD-4(4) ABD PAGE 9 AGREEMENT OF BOTH THE PARTIES WE SET ASIDE THESE A PPEALS ALSO TO THE FILE OF ASSESSING OFFICER FOR FRESH ADJUDICATION ON JURISDI CTION AS WELL AS ON MERITS. THESE THREE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT APPEALS OF ASSESSEE AND THAT OF THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS DAY OF 24 TH DEC 2010 SD/- SD/- ( G.D.AGARWAL ) ( MAHAVIR SINGH ) (VICE PRESIDENT) (JUDICIAL MEMBER) AHMEDABAD DATED : 24/12/2010 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)-VIII AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD