Tractors and Farm Equipment Ltd., CHENNAI v. ACIT, CHENNAI

ITA 2096/CHNY/2016 | 2010-2011
Pronouncement Date: 28-10-2016

Appeal Details

RSA Number 209621714 RSA 2016
Assessee PAN AAACT2761Q
Bench Chennai
Appeal Number ITA 2096/CHNY/2016
Duration Of Justice 3 month(s) 17 day(s)
Appellant Tractors and Farm Equipment Ltd., CHENNAI
Respondent ACIT, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-10-2016
Appeal Filed By Assessee
Bench Allotted D
Assessment Year 2010-2011
Appeal Filed On 11-07-2016
Judgment Text
IN THE INCOME - TAX APPELLATE TRIBUNAL D BENCH CHENNAI . BEFORE SHRI CHANDRA POOJARI ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY JUDICIAL MEMBER ./ I.T.A.NO. 1950 /MDS/201 6 / ASSESSMENT YEAR :20 08 - 09 THE DEPUTY COMMISSIONER OF INCOME TAX CORPORATE CIRCLE 3 (1) NEW BLOCK 4 TH FLOOR 121 M.G. ROAD NUNGAMBAKKAM CHENNAI 600 034. VS. M/S. TRACTORS AND FA RM EQUIPMENTS LTD. NO. 35 POTTIPATTI PLAZA NUNGAMBAKKAM HIGH ROAD CHENNAI 600 034. [PAN: A A A C T2761Q ] ( / APPELLANT ) ( / RESPONDENT ) I.T.A. NOS. 2094 2095 & 2096/MDS/2016 ASSESSMENT YEARS: 2008 - 09 2009 - 10 & 2010 - 11 M/S. TRACTOR S AND FARM EQUIPMENTS LTD. NO. 35 POTTIPATTI PLAZA NUNGAMBAKKAM HIGH ROAD CHENNAI 600 034. VS. THE ASSISTANT COMMISSIONER OF INCOME TAX CORPORATE CIRCLE 3(1) CHENNAI 600 034. ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI R. MOHAN CIT / RESPONDENT BY : SHRI R. VIJAYARAGHAVAN ADVOCATE / DATE OF HEARING : 09 . 08 .201 6 / DATE OF P RONOUNCEMENT : 28 . 1 0.2016 / O R D E R PER DUVVURU RL REDDY JUDICIAL MEMBER : THE CROSS APPEAL S FILED BY THE REVENUE AS WELL AS THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 1 1 C HENNAI DATED 1 5 . 0 3 .201 6 RELEVANT TO THE ASSESSMENT YEAR 20 08 - 09 . THE ASSESSEE H AS ALSO FILED APPEALS AGAINST DIFFERENT ORDERS OF THE LD. CIT(A) 11 I.T.A. NO S . 1950 & 2094 - 2096 /M/ 1 6 2 DATED 21.04.2016 FOR THE ASSESSMENT YEARS 2009 - 10 AND 2010 - 11. FIRST WE SHALL TAKE CROSS APPEALS. I.T.A. NO. 1950/MDS/2016 [A.Y. 2008 - 09] 2. THE APPEAL OF THE REVENUE IS FOUND TO HAVE B EEN FILED LATE BY THREE DAYS BEFORE THE TRIBUNAL . THE ASSESSING OFFICER HAS FILED AN AFFIDAVIT FOR CONDONATION OF DELAY BY STATING THAT THE RECORDS OF THE CASE INADVERTENTLY GOT MIXED UP WITH OTHER FILES AND THEREBY THERE WAS SHORT DELAY OF THREE DAYS IN F ILING THE APPEAL BEFORE THE TRIBUNAL . BY REFERRING TO THE AFFIDAVIT THE LD. DR HAS REQUESTED FOR CONDONING THE DELAY AND TO ADMIT THE APPEAL FOR HEARING. THE LD. COUNSEL FOR THE ASSESSEE DID NOT SERIOUSLY OBJECT TO THE SUBMISSIONS OF THE LD. DR. ACCORDING LY WE CONDONE THE DELAY OF THREE DAYS IN FILING THE APPEAL AND ADMIT THE APPEAL FOR HEARING. 3. THE ONLY EFFECTIVE GROUND RAISED IN THE APPEAL OF THE REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANC E UNDER SECTION 14A OF THE INCOME TAX ACT 1961 [ ACT IN SHORT] TO 2% OF THE EXEMPTED INCOME INSTEAD OF APPLYING RULE 8D BY RELYING ON THE DECISION OF THE HON BLE MUMBAI HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD. V. DCIT [2010] 328 ITR 81. 3 .1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF TRACTORS ENGINEERING PLASTIC COMPONENTS AND BATTERIES AND TRADING IN RELATED PARTS AND ATTACHMENTS. THE ASSESSEE FILED ITS RETURN OF INCOME ON 30.09.200 8 ADMITTING TOTAL INCOME AT .221 00 60 262/ - . I.T.A. NO S . 1950 & 2094 - 2096 /M/ 1 6 3 THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE ACT ON 20.08.2009. SUBSEQUENTLY THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) OF THE ACT ON 24.08.2009. NOTICE UNDER SECTION 142(1) OF THE ACT ALONG WITH QUESTIONNAIRE WAS ISSUED TO THE ASSESSEE ON 02.11.2011. IN RESPONSE THERETO THE ASSESSEE HAS FILED ALL DETAILS AS CALLED FOR. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND ALSO IN VIEW OF THE ORDER OF THE TPO DETERMIN ING THE ARMS LENGTH PRICE UNDER SECTION 92CA OF THE ACT THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT UNDER SECTION 143(3) R.W.S. 144C(3) OF THE ACT BY ASSESSING THE TOTAL INCOME OF THE ASSESSEE AT .240 30 47 571/ - AFTER MAKING VARIOUS DISALLOWANCES/ ADDITIONS. 3.2 THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AS WELL AS FACTS OF THE CASE THE LD. CIT(A) PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE. 3.3 ON BEING AGGRIEVED THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. THE LD. DR HAS SUBMITTED THAT I T IS A TRITE PRINCIPLE OF LAW THAT THE LAW WHICH WOULD APPLY TO AN ASSESSMENT YEAR IS THE LAW PREVAILING ON THE FIRST DAY OF APRI L. THEREFORE WHEN T HE RULES WERE NOTIFIED TO COME INTO FORCE ON MARCH 24 2008 IT WOULD APPLY WITH EFFECT FROM ASSESSMENT YEAR 2008 - 09 IN VIEW OF THE DECISION OF THE HON BLE MUMBAI HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD. V. DCIT (SUPRA). T HUS THE LD. CIT(A) WAS NOT CORRECT IN RESTRICTING THE DISALLOWANCE UNDER SECTION 14A OF THE ACT TO 2% OF THE I.T.A. NO S . 1950 & 2094 - 2096 /M/ 1 6 4 EXEMPTED INCOME INSTEAD OF APPLYING RULE 8D AND PLEADED THAT THE ORDER OF THE LD. CIT(A) SHOULD BE REVERTED AND RESTORED THAT OF THE ASSESSING OFF ICER. 3.4 ON THE OTHER HAND BY RELYING ON THE DECISION OF THE COORDINATE BENCH THE TRIBUNAL IN THE CASE OF INAUTIX TECHNOLOGIES INDIA P. LTD. V. ACIT 42 ITR (TRIB) 324 (CHENNAI) THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE LD. CIT(A) HAS RIG HTLY FOLLOWED THE DECISION OF THE TRIBUNAL WHICH MAY BE CONFIRMED. 3.5 WE HAVE HEARD BOTH SIDES PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IN THIS CASE THE ASSESSEE HAS DERIVED DIVIDEND INCOME OF .9 44 98 000/ - FROM VARIOUS MUTUAL FUNDS AND INVESTMENTS WITH VARIOUS COMPANIES WHICH ARE EXEMPTED UNDER SECTION 10(34) OF THE ACT WHEREAS THE ASSESSEE HAS NOT EXCLUDED ANY EXPENDITURE RELATABLE TO THIS EXEMPT INCOME. ACCORDINGLY THE ASSESSEE WAS ASKED TO SUBMIT THE E XPENDITURE DIRECTLY RELATABLE TO THE DIVIDEND INCOME EARNED. IN RESPONSE THERETO VIDE ITS LETTER DATED 21.12.2011 THE ASSESSEE HAS FURNISHED THE DETAILS OF EMPLOYEES DIRECTLY INVOLVED IN INVESTMENTS AND TREASURY ACTIVITIES AND THEIR SALARIES AND ALLOWANC E TO THE EXTENT OF .29 62 697/ - SHALL BE CONSIDERED AS EXPENDITURE AS PER RULE 8D(1). HOWEVER BY APPLYING CLAUSE (I) (II) AND (III) TO RULE 8D THE ASSESSING OFFICER HAS DISALLOWED .1 46 62 697/ - AS AN EXPENDITURE INCURRED IN RELATION TO EARNING EXEMPT INCOME NOT ALLOWABLE. ON APPEAL THE LD. CIT(A) RESTRICTED THE DISALLOWANCE OF EXPENDITURE UNDER SECTION 14A OF THE ACT TO 2% OF THE DIVIDEND INCOME WHICH WORKS OUT TO I.T.A. NO S . 1950 & 2094 - 2096 /M/ 1 6 5 .18 89 963/ - I.E. 2% OF .9 44 98 000/ - . ON PERUSAL OF THE ASSESSMENT ORDER IT IS AMP LY CLEAR THAT THE ASSESSEE AS ADMITTED APPLICABILITY OF RULE 8D AND OFFERED A SUM OF .29 62 697/ - AS EXPENDITURE AS PER RULE 8D(1) TOWARDS EARNING OF DIVIDEND INCOME. HOWEVER DURING THE COURSE OF APPELLATE PROCEEDINGS THE ASSESSEE HAS SUBMITTED BEFORE T HE LD. CIT(A) THAT RULE 8D WAS NOTIFIED ON 24.03.2008 AND THEREFORE IT IS NOT APPLICABLE TO THE ASSESSMENT YEAR 2008 - 09 . THE DIFFERENT STANDS TAKEN BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS AND APPELLATE PROCEEDINGS ARE NOT CORRECT. WITH REGARD TO APPLICATION OF RULE 8D THE HON BLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD. V. DCIT (SUPRA) HAS HELD AS UNDER: . HOWEVER UNLESS EXPRESSLY OR BY NECESSARY IMPLICATION A CONTRARY PROVISION IS MADE NO RETROSPECTIVE EFFECT IS TO B E GIVEN TO ANY RULE SO AS TO PREJUDICIALLY AFFECT THE INTERESTS OF THE ASSESSEE. THE RULES WERE NOTIFIED TO COME INTO FORCE ON MARCH 24 2008. IT IS A TRITE PRINCIPLE OF LAW THAT THE LAW WHICH WOULD APPLY TO AN ASSESSMENT YEAR IS THE LAW PREVAILING ON THE FIRST DAY OF APRIL. CONSEQUENTLY RULE 8D WHICH HAS BEEN NOTIFIED ON MARCH 24 2008 WOULD APPLY WITH EFFECT FROM ASSESSMENT YEAR 2008 - 09 . IN VIEW OF THE ABOVE LAW LAID DOWN BY OF THE HON BLE MUMBAI HIGH COURT THAT THE APPLICATION OF PROVISIONS OF R ULE 8 D NOTIFIED WITH EFFECT FROM 24.03.2008 WOULD APPLY WITH EFFECT FROM ASSESSMENT YEAR 2008 - 09 WHICH WAS NOT FOUND TO HAVE BEEN REVERSED BY THE HIGHER COURT THE QUESTION OF RESTRICTION OF DISALLOWANCE @ 2% AS WELL AS APPLICATION OF THE ABOVE SAID NOTIFICATI ON WHETHER FROM RETROSPECTIVELY OR PROSPECTIVELY DOES NOT ARISE. FURTHER THE SAME DIVISION BENCH WITH SAME COMBINATION IN THE CASE OF M/S. TVS MOTOR COMPANY LTD. V. JCIT IN I.T.A. NO. 1707/MDS/2012 DATED 27.04.2016 HAS DECIDED THAT RULE 8D SHALL BE APPL ICABLE FROM THE ASSESSMENT YEAR 2008 - 09 ONWARDS BY FOLLOWING VARIOUS DECISION OF THE C BENCH OF THE TRIBUNAL [SAME I.T.A. NO S . 1950 & 2094 - 2096 /M/ 1 6 6 COMBINATION]. ACCORDINGLY WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND RESTORE THAT OF THE ASSESSING OFFICER. THE GROUND RAI SED BY THE REVENUE IS ALLOWED. I.T.A. NO. 2095 /MDS/2016 [AY : 2009 - 10] 4. FOR THE ASSESSMENT YEAR 2009 - 10 THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAS DERIVED DIVIDEND INCOME OF .1681.26 LAKHS FROM VARIOUS MUTUAL FUNDS AND INVESTMENTS WITH VARIOUS COMPANIES WHICH ARE EXEMPTED UNDER SECTION 10(34) OF THE ACT WHEREAS THE ASSESSEE HAS NOT EXCLUDED ANY EXPENDITURE RELATABLE TO THIS EXEMPT INCOME. ACCORDINGLY THE ASSESSEE WAS ASKED TO SUBMIT THE EXPENDITURE DIRECTLY RELATABLE TO THE DIVIDEND INCOME EARNED. IN RESPONSE THERETO VIDE ITS LETTER DATED 20.03.2013 THE ASSESSEE HAS FURNISHED THE DETAILS OF EMPLOYEES DIRECTLY INVOLVED IN INVESTMENTS AND TREASURY ACTIVITIES AND THEIR SALAR IES AND ALLOWANCE TO THE EXTENT OF .38 32 986/ - SHALL BE CONSIDERED AS EXPENDITURE AS PER RULE 8D(1). HOWEVER BY APPLYING CLAUSE (I) (II) AND (III) TO RULE 8D THE ASSESSING OFFICER HAS DISALLOWED .2 86 76 429/ - AS AN EXPENDITURE INCURRED IN RELATION TO EARNING EXEMPT INCOME NOT ALLOWAB LE. ON APPEAL BY FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S. LAKSHMI RING TRAVELLERS V. ACIT IN I.T.A. NO. 2083/MDS/2011 DATED 02.03.2012 THE LD. CIT(A) CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. AGAINST THE ABOVE ORDER OF T HE LD. CIT(A) THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD AND FIND THAT THE ASSESSING OFFICER HAS DETERMINED THE EXPENDITURE IN I.T.A. NO S . 1950 & 2094 - 2096 /M/ 1 6 7 RELATION TO INCOME WHICH DOES NOT FORM PA RT OF THE TOTAL INCOME UNDER SECTION 14A OF THE ACT R.W.S RULE 8D (I) (II) & (III) OF THE INCOME TAX RULES AND MADE THE DISALLOWANCE. IN THE CASE OF M/S. LAKSHMI RING TRAVELLERS V. ACIT (SUPRA) THE TRIBUNAL HAS HELD THAT S EC TION 14A(1) DECLARES THE LAW T HAT THE EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO THE INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT SHALL NOT BE ALLOWED AS A DEDUCTION IN COMPUTING THE TAXABLE INCOME OF THE ASSESSEE. SEC TION 14A(2) PROVIDES FOR DETERMINING T HE QUANTUM OF SUCH EXPENDITURE WHICH SHALL NOT BE ALLOWED AS A DEDUCTION. THAT IS THE MACHINERY PROVISION AS FAR AS SEC TION 14A IS CONCERNED. IN THAT PROVISION IT HAS BEEN PROVIDED THAT IF THE ASSESSING OFFICER IS NOT SATISFIED WITH THE CORRECTNESS OF T HE COMPUTATIONS MADE BY AN ASSESSEE HE SHALL COMPUTE THE QUANTUM IN ACCORDANCE WITH THE METHOD THAT MAY BE PRESCRIBED. FOR THIS MATTER RULE 8D HAS ALREADY BEEN PRESCRIBED. SUB - SEC.(3) FURTHER PROVIDES THAT EVEN IN A CASE WHERE AN ASSESSEE CLAIMS THAT N O EXPENDITURE WAS INCURRED THE ASSESSING AUTHORITY HAS TO PRESUME THE INCURRING OF SUCH EXPENDITURE AS PROVIDED UNDER SUB - SEC.(2) READ WITH RULE PRESCRIBED. THEREFORE IT BECOMES CLEAR THAT EVEN IN A CASE WHERE THE ASSESSEE CLAIMS THAT NO EXPENDITURE WAS SO INCURRED THE STATUTE HAS PROVIDED FOR A PRESUMPTIVE EXPENDITURE WHICH HAS TO BE DISALLOWED BY FORCE OF THE STATUTE. IN A DISTANT MANNER LITERALLY SPEAKING IT MAY EVEN BE CONSIDERED FOR THE PURPOSE OF CONVENIENCE AS A DEEMING PROVISION. WHEN SUCH DEE MING PROVISION IS MADE ON THE BASIS OF STATUTORY PRESUMPTION THE REQUIREMENT OF FACTUAL EVIDENCE IS REPLACED BY STATUTORY PRESUMPTION AND THE ASSESSING I.T.A. NO S . 1950 & 2094 - 2096 /M/ 1 6 8 OFFICER HAS TO FOLLOW THE CONSEQUENCES STATED IN THE STATUTE. IT MEANS THAT EVEN IN A CASE WHERE NO EX PENDITURE IS STATED TO HAVE BEEN INCURRED THE ASSESSING AUTHORITY HAS TO APPLY RULE 8D. AS THE STATUTORY PRESUMPTION SUBSTITUTES THE REQUIREMENT OF FACTUAL EVIDENCE THE QUESTION OF ENQUIRY DOES NOT ARISE. BY FOLLOWING THE ABOVE DECISION OF THE TRIBUNAL THE LD. CIT(A) CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. IN VIEW OF THE ABOVE WE FIND NO REASON TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT(A) ON THIS ISSUE. THUS THE GROUND RAISED BY THE ASSESSEE IS DISMISSED. I.T.A. NO. 2096/MDS/ 2016 [AY : 2010 - 11] 5. F OR THE ASSESSMENT YEAR 2010 - 11 ALSO THE ASSESSEE IS IN APPEAL AGAINST CONFIRMATION OF DISALLOWANCE OF .4 90 41 670/ - MADE UNDER SECTION 14A OF THE ACT BY APPLYING RULE 8D ON IDENTICAL FACTS. IN VIEW OF OUR FINDINGS IN THE ASSESSMENT YEAR 200 9 - 1 0 THE SIMILAR GROUND RAISED BY THE ASSESSEE IN THE ASSESSMENT YEAR 2010 - 11 IS ALSO DISMISSED . I.T.A. NO. 2094/M DS/2016 [A.Y.: 2008 - 09] 6 . IN THE ASSESSEE S APPEAL FOR THE ASSESSMENT YEAR 2008 - 09 THE ONLY EFFECTIVE GROUND RAISED IS WITH REGARD TO CONFIRMATION OF DISALLOWANCE OF BAD DEBT WRITTEN OFF OF .16 73 43 000/ - . 6 .1 IN THE PROFIT AND LOSS ACCOUNT THE AS SESSEE HAD DEBITED A SUM OF .18 84 38 000/ - TOWARDS DEBTS/ADVANCES WRITTEN OFF. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO FURNISH THE BREAK UP DETAILS ALONG WITH DETAILS FOR ADVANCES WRITTEN OFF. WHILE VERIFYING THE DETAILS T HE ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE HAD WRITTEN OFF A SUM OF I.T.A. NO S . 1950 & 2094 - 2096 /M/ 1 6 9 .16 73 43 000/ - RECEIVABLE FROM ITS OWN SISTER CONCERN M/S. ALPUMP LIMITED. THE ASSESSEE WAS ASKED TO EXPLAIN THE REASONS FOR THE WRITE OFF OF THE ABOVE ADVANCES AND ALSO TO FURNI SH LEDGER ACCOUNT COPY. THE ASSESSEE VIDE ITS SUBMISSION DATED 16.12.2011 HAS STATED AS UNDER: THE VENDOR WAS SUPPLYING COMPONENTS FOR TRACTORS FROM 2006. THE VENDOR REQUESTED THE COMPANY TO PROVIDE ADVANCE FOR INCREASING THE CAPACITY TO SUPPLY ADDITIO NAL QUANTITY TO THE COMPANY AND ALSO REQUESTED TO ADJUST THE ADVANCE AGAINST FUTURE SUPPLIES. BASED ON THE REQUEST THE COMPANY PROVIDED ADVANCE FROM TIME TO TIME. THE VENDOR COULD NOT SUPPLY THE REQUIRED QUANTITY WITH QUALITY SPECIFICATION AS REQUIRED BY T HE COMPANY. THE VENDOR INFORMED THAT THE MONEY HAS BEEN INVESTED IN ENHANCING THE CAPACITY AND SINCE THE COMPANY WAS NOT ACCEPTING THE COMPONENTS SUPPLIED THEY ARE NOT IN A POSITION TO REPAY THE ADVANCES. THE BOARD CONSIDERING THAT THE ADVANCE WAS PAID TO CATER TO THE NEEDS OF THE COMPANY AND SINCE THE COMPANY IS NOT ACCEPTING THE SUPPLIES DECIDED TO WRITE OFF THE ADVANCES AS THE REC OVERABILITY SEEMED VERY REMOTE. HOWEVER THE ASSESSING OFFICER HAS NOT ACCEPTED THE SUBMISSIONS OF THE ASSESSEE AND MADE THE DISALLOWANCE OF . 16 73 43 000/ - AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE BY HOLDING THAT THE ADVANCES GIVEN BY THE ASSESSEE TO THE SISTER CONCERN CANNOT BE TREATED AS GIVEN IN NORMAL COURSE OF BUSINESS AND THERE WAS NO BUSINESS EXIGENCY . 6 .2 THE A SSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AS WELL AS CONSIDERING THE PROVISIONS OF SECTION 36(1)(VII) AND SECTION 36(2) OF THE ACT THE LD. CIT(A) CONFIRMED THE DISALLOWANCE MADE BY THE AS SESSING OFFICER. 6 .3 ON BEING AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. BY RELYING ON THE DECISION IN THE CASE OF TRF LIMITED 323 ITR 397 (SC) THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT AFTER AMENDMENT TO THE PROVISIONS OF SECTI ON 36(1)(VII) OF THE ACT IT IS NOT NECESSARY FOR THE ASSESSEE I.T.A. NO S . 1950 & 2094 - 2096 /M/ 1 6 10 TO ESTABLISH THAT THE DEBT IN FACT HAS BECOME IRRECOVERABLE AND IT IS ENOUGH IF THE BAD DEBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE ASSESSEE AND PLEADED THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER SHOULD BE DELETED. ON THE OTHER HAND THE LD. DR STRONGLY SUPPORTED THE ORDER PASSED BY THE AUTHORITIES BELOW. 6 . 4 WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. ADMITTEDLY THE ASSESSEE IS NO T IN THE BUSINESS OF MONEY LENDING. BEFORE THE ASSESSING OFFICER T HE ASSESSEE HAS STATED THAT THE ABOVE ADVANCES WERE MAINLY GIVEN TOWARDS SUPPLY OF MATERIALS FROM ITS SISTER CONCERN AND THE SAME WERE UTILIZED BY THE SISTER CONCERN FOR THE CAPITAL EXPANS ION. THEREFORE M/S ALPUMP LTD. WAS NOT IN A POSITION TO PAY THESE ADVANCES. M/S. ALPUMP LIMITED IS A SUBSIDIARY OF THE ASSESSEE COMPANY IN WHICH THE ASSESSEE HAS ALREADY INVESTED IN THE EQUITY SHARES TO THE TUNE OF .26.80 CRORES. FROM THE DETAILS THE ASSESSING OFFICER HAS NOTICED THAT M/S. ALPUMP LIMITED HAS SUPPLIED MATERIALS WORTH OF ONLY .12.26 LAKHS DURING THE YEAR. AS PER LEDGER ACCOUNT AS ON 01.04.2007 .8 95 74 350 / - WAS DUE FROM M/S. ALPUMP LTD. THEREFORE WHATEVER THE SUPPLIES MADE TO BE MADE BY M/S ALPUMP LTD CAN COMFORTABLY BE ADJUSTED AGAINST THE OPENING BALANCE. THUS THERE WA S NO NEED TO GIVE ANY FURTHER ADVANCES TOWARDS SUPPLY OF MATERIALS. THIS CLEARLY SHOWS THAT THESE ADVANCES ARE NOT GIVEN FOR ANY SUPPLY OF MATERIALS IN THE REGULAR COURSE OF BUSINESS. WITH REGARD TO THE CONTENTION OF THE ASSESSEE THAT THESE ADVANCES WERE UTILIZED BY THE SUBSIDIARY FOR INCREASING ITS CAPACITY TO SUPPLY ADDITIONAL QUANTITY THE ASSESSING OFFICER HAS I.T.A. NO S . 1950 & 2094 - 2096 /M/ 1 6 11 OPINED THAT THESE ADVANCES GIVEN TOWARDS SUPPLY OF MATERIALS CAN VERY WELL BE ADJUST ED TOWARDS ITS FUTURE SUPPLY COMMITMENTS. FURTHER HE NOTICED THAT THESE ADVANCES WERE MAINLY GIVEN DURING THE CURRENT YEAR AND LAST YEAR WHICH CAN BE EASILY COLLECTIB LE. IT IS NOT THE CASE OF THE ASSESSEE THAT THE ADVANCES ARE OUTSTANDING FROM LAST MANY YEARS. MOREOVER M/S. ALPUMP LIMITED IS NOT ANY OUTSIDE PARTY TO SAY THAT ADVANCES ARE IRRECOVERABLE FOR VARIOUS REASONS LIKE BANKRUPTCY OR NOT TRACEABLE ETC. FURTHER THE ASSESSING OFFICER HAS OBSERVED F ROM THE LEDGER ACCOUNT THAT THESE ADVANCES ARE MAINLY IN THE NATURE OF SHORT TERM LOANS AND OPINED THAT THESE ADVANCES CANNOT BE TREATED AS GIVEN IN NORMAL COURSE OF BUSINESS. THEREFORE BY RELYING ON THE DECISION IN THE CASE OF DCM LIMITED VS. DCIT 317 ITR 261 AND ALSO MADHYA PRADESH HIGH COURT IN THE CASE OF M / S. BINODIRAM BALCHAND & CO. VS. CIT 251 ITR 819 WHEREIN IT WA S HELD THAT ADVANCES GIVEN TO THE SISTER CONCERNS WHICH WERE NOT IN THE COURSE OF BUSINESS OF MONE Y LENDING IS NOT ALLOWABLE AS EXPENDITURE THE ASSESSING OFFICER HAS HELD THAT THE ABOVE CIRCUMSTANCES DOES NOT WARRANTS WRITE OFF OF THESE ADVANCES. THUS THE ASSESSING OFFICER DISALLOWED THE ADVANCES GIVEN TO ASSESSEE'S SISTER CONCERN M/S. ALPUMP LIMITED OF . 16 73 43 000/ - AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. ON APPEAL THE LD. CIT(A) HAS OBSERVED AS UNDER: 5.4.3 I HAVE PERUSED THE DECISION OF THE HON'BLE HIGH COURT OF MADHYA PRADESH IN THE CASE OF BINODIRAM BALCHAND & CO VS CIT (251 ITR 819) (MP )(2001) RELIED ON BY THE ASSESSING OFFICER. THE HEAD NOTE OF THE SAID DECISION IS MENTIONED BELOW: SECTION 36( 1 )(VII) OF THE INCOME - TAX ACT) 1961 - BAD DEBTS - WHETHER FOR CLAIMING LOAN ADVANCED TO SISTER CONCERN! SUBSIDIARY AS BAD DEBTS IT IS OBLIGATO RY ON PART OF FIRM WHICH IS ADVANCING SUCH LOANS TO SISTER CONCERN OR SUBSIDIARY TO SHOW THAT PROPER EFFORTS WERE MADE FOR I.T.A. NO S . 1950 & 2094 - 2096 /M/ 1 6 12 RECOVERY PURPOSES OTHERWISE SUCH ENTRIES WOULD BE SUSCEPTIBLE TO INVITING OF AN ADVERSE INFERENCE PUTTING SUCH ENTRIES IN GAMUT OF ATTEMPTS AT REDUCING TAXABLE INCOME BY REDUCING PROFIT AND RESULTANT REDUCTION IN CAPITAL - HELD) YES - WHETHER TAXING OFFICERS ARE AT LIBERTY TO PUT TO SCRUTINY SUCH TRANSACTION AND ARE ENTITLED TO PROBE VERACITY OF SUCH TRANSACTION AND COME TO A CONCLUSI ON WHETHER A TRANSACTION IS BONA FIDE OR AN ATTEMPT TO CONCEAL TAXABLE INCOME AND EVADE PAYMENT OF TAX - HELD YES - WHETHER SCRUTINY SHOULD BE WITH DISPASSIONATE ATTITUDE - HELD YES WHETHER WHERE ASSESSING OFFICER HAD ELABORATELY DISCUSSED SALIENT FEATU RES IN HIS ORDER WHICH DEPICTED DISPASSIONATE IMPARTIAL SCRUTINY AND DISALLOWED ASSESSEE - FIRM'S CLAIM OF BAD DEBTS ASSESSING OFFICER'S ORDER WAS LIABLE TO CONFIRMED - HELD YES' (EMPHASIS SUPPLIED). 5.4.4 IN VIEW OF THE AFORESAID DECISION WHICH IS SQUA RELY APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE I AM CONVINCED THAT THE DECISION OF THE HON'BLE HIGH COURT OF MADHYA PRADESH IN THE CASE OF BINODIRAM BALCHAND & CO. VS. CIT AS MENTIONED ABOVE IS AGAINST THE APPELLANT'S CASE. THE WR ITE OFF AS IRRECOVERABLE OF ANY DEBT OR PART THEREOF IS SPECIFICALLY IS DEALT UNDER SECTION 36(1)(VII) WHICH IS SUBJECTED TO THE PROVISIONS OF SECTION 36(2). FOR READY REFERENCE THE PROVISIONS OF SECTION 36(2) IS REPRODUCED HEREUNDER: SECTION 36(2) - I N MAKING ANY DEDUCTION FOR BAD DEBT OR PART THEREOF THE FOLLOWING PROVISIONS SHALL APPLY - (I) NO SUCH DEDUCTION SHALL BE ALLOWED UNLESS SUCH DEBT OR PART THEREOF HAS BEEN TAKEN INTO ACCOUNT IN COMPUTING THE INCOME OF THE ASSESSEE OF THE PREVIOUS YEAR I N WHICH THE AMOUNT OF SUCH DEBT OR PART THEREOF IS WRITTEN OFF OF AN EARLIER PREVIOUS YEAR OR REPRESENTS MONEY LENT IN THE ORDINARY COURSE OF THE BUSINESS OF BANKING OR MONEY - LENDING WHICH IS CARRIED ON BY THE ASSESSEE (II) IF THE AMOUNT ULTIMATELY R ECOVERED ON ANY SUCH DEBTOR PART OF DEBIT IS LESS THAN THE DIFFERENCE BETWEEN THE DEBT OR PART AND THE AMOUNT SO DEDUCTED THE DEFICIENCY SHALL BE DEDUCTIBLE IN THE PREVIOUS YEAR IN WHICH THE ULTIMATE RECOVERY IS MADE; (III) ANY SUCH DEBT OR PART OF DEB T MAY BE DEDUCTED IF IT HAS ALREADY BEEN WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF AN EARLIER PREVIOUS YEAR (BEING A PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING ON THE 1 ST DAY OF APRIL 1988 OR ANY EARLIER ASSESSMENT YEAR) BUT THE ASSES SING OFFICER HAD NOT ALLOWED IT TO BE DEDUCTED ON THE GROUND THAT IT HAD NOT BEEN ESTABLISHED TO HAVE BECOME A BAD DEBT IN THAT YEAR; (IV) WHERE ANY SUCH DEBT OR PART OF DEBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS OF THE PREVIOUS YEAR (BEING A PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL 1988 OR ANY EARLIER ASSESSMENT YEAR) AND THE ASSESSING OFFICER IS SATISFIED THAT SUCH DEBT OR PART BECAME A BAD DEBIT IN ANY EARLIER PREVIOUS YEAR NOT FALLING BEYOND A PERIOD OF FOUR PREVIOUS YEARS I.T.A. NO S . 1950 & 2094 - 2096 /M/ 1 6 13 IMMEDIATELY PRECEDING THE PREVIOUS YEAR IN WHICH SUCH DEBT OR PART IS WRITTEN OFF THE PROVISIONS OF SUB - SECTION (6) OF SECTION 155 SHALL APPLY; (V) WHERE SUCH DEBT OR PART OF DEBT RELATES TO ADVANCES MADE BY AN ASSESSEE TO WHICH CLAUSE (VIIA) OF SUB - SECTION (1) APPLIES NO SUCH DEDUCTION SHALL BE ALLOWED UNLESS THE ASSESSEE HAS DEBITED THE AMOUNT OF SUCH DEBT OR PART OF DEBT IN THAT PREVIOUS YEAR TO THE PROVISION FOR BAD AND DOUBTFUL DEBTS ACCOUNT MADE UNDER THAT CLAUSE. 5.4.5 IT IS CLEAR FROM THE AFORESAID PROVISIONS OF SECTION 36(2) WHICH SHOULD BE READ WITH SECTION 36(1)(VII) THE APPELLANT DOES NOT FULFIL THE CONDITIONS LAID DOWN U/S 36(1)(VII) READ WITH SECTION 36(2). THE APPELLANT'S ALTERNATE PLEA THAT IF NOT ALLOWED U/S 36(1)(VII) IT SHOULD BE CONSIDERED AS A DEDUCTION U/S 37 IS NOT ACCEPTABLE FOR THE REASON THAT THE WRITE OFF OF BAD DEBT IS SPECIFICALLY DEALT U/S 36(1)(VII) READ WITH SECTION 36(2). 5.4.6 IN VIEW OF THE ABOVE REMARKS THE AO'S DISALLOWANCE OF APPELLANT 'S CLAIM OF WRITE OFF OF BAD DEBTS (ADVANCE) IS UPHELD AND THE APPELLANT'S GROUNDS ARE DISMISSED. 6 .5 IN THE PRESENT CASE THE ASSESSEE HAS ADVANCED MONEY TO ITS SISTER CONCERNED M/S. ALPUMP LTD. MAINLY TOWARDS SUPPLY OF MATERIALS. THE ASSESSEE HAS ALREA DY INVESTED IN THE EQUITY SHARES TO THE TUNE OF .26.80 CORES IN ITS SISTER CONCERN. AS PER LEDGER ACCOUNT AS ON 01.04.2007 .8 95 74 350/ - WAS DUE FROM M/S. ALPUMP LTD. SO WHATEVER SUPPLY TO BE MADE BY M/S. ALPUMP LTD. CAN COMFORTABLY BE ADJUSTED AGAINS T THE OPENING BALANCE AND NO FURTHER ADVANCE WAS REQUIRED TO BE GIVEN TO THE SISTER CONCERN. ANYWAY WHATEVER ADVANCES GIVEN BY THE ASSESSEE TO ITS SUBSIDIARY CAN VERY WELL BE ADJUSTED TOWARDS ITS FUTURE SUPPLY COMMITMENTS. IT IS NOT THE CASE THAT THE SIST ER CONCERN M/S. ALPUMP LTD. IS ANY OUTSIDE PARTY TO SAY THAT THE ADVANCES ARE IRRECOVERABLE FOR VARIOUS REASONS LIKE BANKRUPTCY OR NOT TRACEABLE ETC. THE ADVANCES WERE MAINLY GIVEN DURING THE CURRENT YEAR AND LAST YEAR WHICH CAN BE EASILY COLLECTIBLE. M/S . ALPUMP LTD. IS ASSESSEE S OWN SUBSIDIARY COMPANY THE AFFAIRS OF WHICH ARE VERY WELL UNDER THE CONTROL OF THE I.T.A. NO S . 1950 & 2094 - 2096 /M/ 1 6 14 ASSESSEE BEING A MAJOR SHAREHOLDER. MOREOVER IN VIEW OF THE PROVISIONS OF SECTION 36(1)(VII) OF THE ACT FOR CLAIMING LOAN ADVANCED TO SISTER C ONCERN/SUBSIDIARY AS BAD DEBTS IT IS OBLIGATORY ON THE PART OF THE ASSESSEE WHICH IS ADVANCING SUCH LOANS TO SISTER CONCERN/SUBSIDIARY TO SHOW THAT PROPER EFFORTS WERE MADE FOR RECOVERY PURPOSES AND OTHERWISE SUCH ENTRIES WOULD BE SUSCEPTIBLE TO DRAW AN ADVERSE INFERENCE PUTTING SUCH ENTRIES IN GAMUT OF ATTEMPTS AT REDUCING TAXABLE INCOME BY REDUCING PROFIT AND RESULTANT REDUCTION IN CAPITAL. IN THIS CASE T HE ASSESSEE HAS NOT EXPLAINED ANY EFFORTS STATED TO HAVE BEEN MADE FOR RECOVERY OF THE ADVANCES. FURTHER IN VIEW OF THE PROVISIONS OF SECTION 36(2)(I) OF THE ACT NO SUCH DEDUCTION SHALL BE ALLOWED UNLESS SUCH DEBT OR PART THEREOF HAS BEEN TAKEN INTO ACCOUNT IN COMPUTING THE INCOME OF THE ASSESSEE OF THE PREVIOUS YEAR IN WHICH THE AMOUNT OF SUCH DEBT OR PART THEREOF IS WRITTEN OFF OF AN EARLIER PREVIOUS YEAR OR REPRESENTS MONEY LENT IN THE ORDINARY COURSE OF THE BUSINESS OF BANKING OR MONEY - LENDING WHICH IS CARRIED ON BY THE ASSESSEE. IN THE APPELLATE ORDER THE LD. CIT(A) HAS GIVEN DETAILED FINDIN GS WHICH HAVE BEEN REPRODUCED HEREINABOVE AND WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A) ON THIS ISSUE. THUS THE GROUND RAISED BY THE ASSESSEE IS DISMISSED. 7 . THE ASSESSEE HAS RAISED SIMILAR COMMON GROUND ON AN IDENTICAL FACTS AGAINS T THE CONFIRMATION OF DISALLOWANCE OF BAD DEBT WRITTEN OFF AMOUNTING TO .6 42 23 108/ - FOR THE ASSESSMENT YEAR 2009 - 10 AS WELL AS .1 15 00 000/ - FOR THE ASSESSMENT YEAR 2010 - 11. IN VIEW OF THE ABOVE FINDINGS IN THE I.T.A. NO S . 1950 & 2094 - 2096 /M/ 1 6 15 ASSESSMENT YEAR 2008 - 09 THE GROUND RAIS ED BY THE ASSESSEE FOR THE ASSESSMENT YEARS 2009 - 10 AND 2010 - 11 IS ALSO DISMISSED. 8 . THE NEXT GROUND RAISED IN THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2010 - 11 IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE RESTRICTION OF THE CLAIM OF R & D EXPENDITURE UNDER SECTION 35(2AB) OF THE ACT. 8 .1 THE ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE HAS CLAIMED .26 70 95 840/ - UNDER SECTION 35(2AB) OF THE ACT ON ACCOUNT OF EXPENDITURE TOWARDS R & D ACTIVITIES. THEREFORE THE ASSESSEE WAS ASKED TO FILE FORM 3CL FOR THE CLAIM MADE. THE ASSESSEE VIDE ITS LETTER DATED 25.03.2014 FILED A COPY OF FORM 3CL AND ALSO A R EVISED MEMO OF INCOME INCORPORATING CHANGES IN THE AMOUNT AS ALLOWED BY DSIR FOR THE CLAIM UNDER SECTION 35(2AB) OF THE ACT. AFTER CONSIDERING THE ABOVE THE ASSESSING OFFICER HAS RESTRICTED THE CLAIM UNDER SECTION 35(2AB) OF THE ACT TO .25 95 58 340/ - AS ALLOWED BY THE DSIR AGAINST THE CLAIM OF .26 70 95 840/ - AND THE BALANCE AMOUNT OF .75 37 500/ - WAS DISALLOWED AND ADDED TO THE INCOME OF THE ASSESSEE. 8 .2 ON APPEAL BEFORE THE LD. CIT(A) THE ASSESSEE HAS RAISED A GROUND OF ALLOWANCE OF .50 25 000/ - INCURRED FOR R & D UNDER SECTION 35(2) OF THE ACT. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AS WELL AS CONSIDERING THE PROVISIONS OF SECTION 35(2AB) OF THE ACT DISMISSED THE GROUND RAISED BY THE ASSESSEE. 8 .3 BEFORE US THE LD. COUNSEL FOR THE ASSESSEE HAS ARGUED THAT EVEN THOUGH THE COMPETENT AUTHORITY BEING DSIR HAS NOT ALLOWED THE ENTIRE I.T.A. NO S . 1950 & 2094 - 2096 /M/ 1 6 16 EXPENDITURE INCURRED TOWARDS R & D AND RESTRICTED TO THE EXTENT OF .25 95 58 340/ - THE ASSESSING OFFICER SHOULD HAVE ALLOWED THE BALANCE EXPENDITURE UNDER SECTION 35(2) OF THE ACT AND PLEADED THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER SHOULD BE DELETED. 8 .4 PER CONTRA THE LD. DR HAS SUBMITTED THAT ONCE THE E XPENDITURE INCURRED TOWARDS R & D ACTIVITIES WAS ALLOWED UNDER SECTION 35 (2AB) OF THE ACT NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF THE R & D EXPENDITURE UNDER ANY OTHER PROVISIONS OF THE ACT AS SPECIFIED UNDER SECTION 35(2AB)(2) OF THE ACT. 8 .5 WE HA VE CONSIDERED RIVAL SUBMISSIONS. IN FORM 3CL THE DSIR ALLOWED THE EXPENDITURE TOWARDS R & D TO THE EXTENT OF .25 95 58 340/ - AND ACCORDINGLY THE ASSESSING OFFICER RESTRICTED THE EXPENDITURE UNDER SECTION 35(2AB) OF THE ACT AGAINST ASSESSEE S CLAIM OF .26 70 95 840/ - . BEFORE THE LD. CIT(A) THE ASSESSEE HAS CLAIMED TO ALLOW THE BALANCE EXPENDITURE INCURRED TOW ARDS R & D ACTIVITIES UNDER SECTION 35(2) OF THE ACT @ 100%. THE PROVISIONS OF SECTION 35(2) OF THE ACT IS MEANT FOR THE PURPOSES OF CLAUSE (IV) OF SUB - SECTION (1) TO SECTION 35 OF THE ACT WHICH IS IN RESPECT OF ANY EXPENDITURE OF CAPITAL IN NATURE ON SCI ENTIFIC RESEARCH RELATED TO THE BUSINESS CARRIED ON BY THE ASSESSEE. WHEREAS THE DEDUCTION UNDER SECTION 35(2AB) (1) OF THE ACT IS PROVIDED IN RESPECT OF ANY EXPENDITURE ON SCIENTIFIC RESEARCH ON IN - HOUSE RESEARCH AND DEVELOPMENT ACTIVITY AS APPROVED BY THE PRESCRIBED AUTHORITY [NOT BEING EXPENDITURE IN THE NATURE OF COST OF ANY LAND OR BUILDING]. IN THIS CASE THE PRESCRIBED AUTHORITY BEING DSIR WHO HAS RESTRICTED THE I.T.A. NO S . 1950 & 2094 - 2096 /M/ 1 6 17 EXPENDITURE TO THE EXTENT OF .25 95 58 340/ - THE SAME WAS ALLOWED BY TH E ASSESSING OFFICER. OVER AND ABOVE BEFORE THE LD. CIT(A) THE ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 35(2) OF THE ACT @ 100%. IN VIEW OF THE SPECIFIC PROVISIONS LAID OUT UNDER SECTION 35(2AB)(2) OF THE ACT THAT NO DEDUCTION SHALL BE ALLOWED IN RESP ECT OF THE EXPENDITURE MENTIONED IN CLAUSE (1) OF SECTION 35(2AB) OF THE ACT UNDER ANY OTHER PROVISIONS OF THE INCOME TAX ACT. THEREFORE ONCE THE ASSESSEE CLAIMED THE R&D EXPENDITURE UNDER SECTION 35(2AB) THE ASSESSEE CANNOT CLAIM ANY DEDUCTION UNDER SE CTION 35(2) OF THE ACT FOR THE SAME EXPENDITURE. WHEN THE STATUTE IS VERY CLEAR THERE IS NO GROUND FOR THE ASSESSEE TO CLAIM THE DEDUCTION. THEREFORE THE LD. CIT(A) HAS RIGHTLY REJECTED THE GROUND RAISED BY THE ASSESSEE AND THUS THE GROUND RAISED BY THE ASSESSEE IS DISMISSED. 9 . IN THE RESULT THE REVENUE S APPEAL FOR THE AY 2008 - 09 IS ALLOWED AND THE APPEALS OF THE ASSESSEE FOR THE AYS 2008 - 09 TO 2010 - 11 ARE DISMISSED. ORDER PRONOUNCED ON THE 28 TH OCTOBER 20 16 AT CHENNAI. SD/ - SD/ - ( CHANDRA POOJ ARI ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI DATED THE 28 . 1 0 .201 6 VM/ - / COPY TO: 1. / APPELLANT 2. / RESPONDENT 3. ( ) / CIT(A) 4. / CIT 5. / DR & 6. / GF.