Gujarat Gas Tradiang Co.Ltd.,, Ahmedabad v. The Income tax Officer,Ward-4(1),, Ahmedabad

ITA 2176/AHD/2008 | 2004-2005
Pronouncement Date: 31-07-2015 | Result: Allowed

Appeal Details

RSA Number 217620514 RSA 2008
Assessee PAN AAACK7745B
Bench Ahmedabad
Appeal Number ITA 2176/AHD/2008
Duration Of Justice 7 year(s) 1 month(s) 24 day(s)
Appellant Gujarat Gas Tradiang Co.Ltd.,, Ahmedabad
Respondent The Income tax Officer,Ward-4(1),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2015
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 31-07-2015
Date Of Final Hearing 28-07-2015
Next Hearing Date 28-07-2015
Assessment Year 2004-2005
Appeal Filed On 06-06-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD .. ( .) BEFORE SHRI G.D. AGARWAL VICE PRESIDENT (AZ) AND SHRI KUL BHARAT JUDICIAL MEMBER 1. ./ I.T.A.NO.2176/AHD/2008A.Y.2004-05 2. ./ I.T.A.NO. 768/AHD/2010A.Y.2005-06 1. GUJARAT GAS TRADING CO. LTD. 2 SHANTISADAN SOCIETY NR.PARIMAL GARDEN ELLISBRIDGE AHMEDABAD PAN : AAACK 7745 B 2. DO- / VS. 1.THE ITO WARD-4(1) AHMEDABAD 2.THE JT.CIT RANGE-4 AHMEDABAD ( %& / APPELLANT ) .. ( '(%& / RESPONDENTS ) %& ) / APPELLANT BY : SHRI S.N.SOPARKAR AR '(%& * ) / RESPONDENT BY : SHRI NARENDRA SINGH SR.DR + * -. / DATE OF HEARING 28/07/2015 /012 * -. / DATE OF PRONOUNCEMENT 31/07/2015 / O R D E R PER SHRI KUL BHARAT JUDICIAL MEMBER : THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAI NST THE SEPARATE ORDERS OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS )-VIII AHMEDABAD [CIT(A) IN SHORT] DATED 31/03/2008 & 09 /12/2009 ITA NOS.2176/AHD/2008 & 768 /AHD/2010 GUJARAT GAS TRADING CO.LTD. VS. ITO & JCIT ASST.YEAR(S) 2004-05 & 2005-06 RESPECTIVELY - 2 - PERTAINING TO ASSESSMENT YEARS (AYS) 2004-05 & 2005 -06 RESPECTIVELY. SINCE COMMON ISSUES ARE INVOLVED BOTH THESE APPEAL S WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLID ATED ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST WE TAKE UP THE ASSESSEES APPEAL IN ITA N O.2176/AHD/2008 FOR AY 2004-05 AS A LEAD CASE. THE ASSESSEE HAS RA ISED THE FOLLOWING CONCISED GROUNDS OF APPEAL:- PURSUANT TO THE DIRECTIONS FROM THE HONBLE BENCH APPELLANT CRAVES LEAVE TO SUBMIT THE FOLLOWING CONCISE GROUNDS OF AP PEAL BEFORE THE HONBLE ITAT. 1. GENERAL 2. (A) LD. CIT (A) ERRED IN LAW AND ON FACTS IN CONFI RMING ACTION OF AO IN NOT GRANTING DEDUCTION OF RS. 1 45 04 757/- C OMMISSION ON PERFORMANCE GUARANTEE CLAIMED DURING THE ASSESSMENT PROCEEDINGS AS PER THE AGREEMENT. LD. CIT (A) OUGHT TO HAVE ALL OWED THE DEDUCTION CLAIMED (B) LD. CIT (A) FURTHER ERRED IN LAW AND ON FACT IN CONFIRMING ACTION OF AO IN NOT GRANTING DEDUCTION OF RS.3 20 07 330/ - COMMISSION PAID ON PURCHASES CLAIMED DURING THE ASSESSMENT PRO CEEDINGS. LD. CIT (A) OUGHT TO HAVE DELETED SUCH DISALLOWANCE AS THE EXPENSES INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS IS AN ALLOWABLE EXPENSE. 3. & 4 EXPLANATORY IN SUPPORT OF GROUND # 2(A) & 2(B) 5. LD. CIT (A) ERRED IN CONFIRMING ACTION OF AO DISALLOWING THE CLAIM OF BUSINESS EXPENDITURE MADE IN ABSENCE OF FILING R EVISED RETURN OF ITA NOS.2176/AHD/2008 & 768 /AHD/2010 GUJARAT GAS TRADING CO.LTD. VS. ITO & JCIT ASST.YEAR(S) 2004-05 & 2005-06 RESPECTIVELY - 3 - INCOME. LD. CIT (A) OUGHT TO HAVE ACCEPTED THE CLAI M MADE DURING THE ASSESSMENT PROCEEDINGS OF GENUINE & LEGITIMATE EXPE NSES. 6. LD. CIT (A) ERRED IN LAW AND ON FACT IN CONFIRMI NG ACTION OF AO IN MAKING ADDITION OF RS. 1 11 330/- TOWARDS THE PUR CHASE COMMISSION FOR THE TYPOGRAPHICAL ERROR IGNORING THE SUBMISSION S & DETAILS ON RECORD. 3. GROUND NO.1 IS GENERAL IN NATURE. GROUND NOS.2 TO 6 ARE INTER- CONNECTED AND THEREFORE THE SAME ARE DECIDED TOGE THER. 4. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE A SSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143(3) O F THE INCOME TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 19/12/2006; THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE ADDITION OF RS.1 11 330/- ON ACCOUNT OF DISALLOWANC E OF COMMISSION ON PERFORMANCE GUARANTEE. AGAINST THE SAID ASSESSMENT ORDER THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DISMISSED THE APPEAL. 5. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE ASSESSEE WAS REQUIRED TO MAKE PAYMENT OF COMMISSION AS PER THE A GREEMENT. IN SUPPORT OF THE CONTENTION LD.COUNSEL FOR THE ASSES SEE DREW OUR ATTENTION TOWARDS PAPER-BOOK AT PAGE NOS.53 TO 57 & 58 TO 65. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AUTHORITIES BEL OW OUGHT TO HAVE ALLOWED THE EXPENDITURE. THE LD.COUNSEL FOR THE AS SESSEE SUBMITTED THAT ITA NOS.2176/AHD/2008 & 768 /AHD/2010 GUJARAT GAS TRADING CO.LTD. VS. ITO & JCIT ASST.YEAR(S) 2004-05 & 2005-06 RESPECTIVELY - 4 - THE EXPENDITURE WAS ESSENTIAL FOR THE PURPOSE OF BU SINESS. HE FURTHER SUBMITTED THAT THE ORDERS OF THE AUTHORITIES BELOW ARE CRYPTIC IN NATURE. 5.1. ON THE CONTRARY LD.SR.DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE AO DECIDED THE ISSUE BY OBSERVING AS UNDER. 4. IN THE STATEMENT OF TOTAL INCOME FILED ALONG W ITH THE RETURN THE ASSESSEE HAS ADDED BACK FOLLOWING AMOUNT TO THE NET PROFIT AS PER P&L A/C. COMMISSION ON PERFORMANCE GUARANTEE RS.1 45 04 757/- PURCHASE COMMISSION RS.3 18 96 000/- IN THIS CONNECTION THE ASSESSEE HAS APPENDED A NOTE TO THE STATEMENT AS UNDER:- DURING THE YEAR UNDER REVIEW THE ASSESSEE COMPANY HAS MADE PROVISION FOR COMMISSION FOR PERFORMANCE GUARANTEE GIVEN TO SUPPLIER ON BEHALF OF THE COMPANY OF RS.1 45 04 757/- AND HA S ALSO PROVIDED FOR COMMISSION ON PURCHASE AGGREGATING TO RS.3 18 9 6 000/-. THE SAME HAS BEEN DISALLOWED AND WILL BE CLAIMED AT THE TIME OF ACTUAL PAYMENT WITH NECESSARY DOCUMENTS AS PER LAW. HOWEVER AGAINST THIS STAND TAKEN BY THE ASSESSEE VIDE POINT NO.16 TO REPLY DATED 11/08/06 THE ASSESSEE HAS SUBMITTED THA T THE SAME IS AS PER AGREEMENT AND HENCE IT IS ALLOWABLE AS BUSINESS EXP ENSES AND THEREFORE THE SAME BE ALLOWED ACCORDINGLY. TO SUBSTANTIATE T HIS THE ASSESSEE AT PAGE A-47 HAS GIVEN THE DETAILS OF PURCHASE EXPENSE S BREAKUP ACCORDING TO WHICH THE COMMISSION ON CORPORATE GIVE N TO SUPPLIER IS ITA NOS.2176/AHD/2008 & 768 /AHD/2010 GUJARAT GAS TRADING CO.LTD. VS. ITO & JCIT ASST.YEAR(S) 2004-05 & 2005-06 RESPECTIVELY - 5 - SHOWN AS PER STATEMENT. HOWEVER THE AMOUNT OF COM MISSION ON PURCHASE IS STATED AT RS.3 20 07 330/- AGAINST THE PURCHASE COMMISSION ADDED BACK IN THE STATEMENT AT RS.3 18 96 000/-. F ROM TIME AND AGAIN DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASS ESSEE WAS REQUESTED TO EXPLAIN THE DIFFERENCE OF RS.1 11 330/-. IN RES PONSE TO THIS SPECIFIC REQUEST THE ASSESSEE VIDE AT POINT NO.1 SUBMISSION DATED 7/11/06 HAS CORRECTED THE MISTAKE AND AGREED THAT THE CORRECT A MOUNT IS RS.3 20 07 330/-. THE DIFFERENCE AMOUNT OF RS.1 11 330/- IS THEREFORE ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 6.1. ON APPEAL TO THE LD.CIT(A) THE LD.CIT(A) DISM ISSED THE APPEAL BY OBSERVING AS UNDER:- 6. ON CONSIDERATION OF THE ABOVE FACTS OF THE CAS E AND THE SUBMISSIONS OF THE LD.A.R. AS THE APPELLANT HAS NOT FILED REVIS ED RETURN CLAIMING THE ABOVE EXPENSES AND HAS FILED A SIMPLE LETTER BEFORE THE A.O. AND FURTHER THE FULL FACTS HAVE NOT BEEN PLACED BEFORE THE A.O. AND DETAILS AND EVIDENCES HAVE NOT BEEN FILED BEFORE THE A.O. AND F URTHER I FIND FROM WHATEVER DETAILS HAVE BEEN FILED BEFORE ME THE NECE SSITY OF INCURRING THE EXPENSES IS NOT ESTABLISHED AND ALSO IT IS NOT ESTA BLISHED THAT SERVICES HAVE BEEN RENDERED BY THE PAYEES THE CLAIMS MADE B Y THE APPELLANT ARE DISMISSED. FURTHER THE ADDITION OF RS.1 11 330/- M ADE BY THE A.O. IS FOUND TO BE PROPER AND SO THE SAME IS UPHELD. 6.2. THE CONTENTION OF THE LD.COUNSEL FOR THE ASSES SEE IS THAT ALL THE DETAILS WERE AVAILABLE BEFORE THE LD.CIT(A) AND LD. CIT(A) OUGHT TO HAVE ALLOWED THE CLAIM. HE SUBMITTED THAT THE CLAIM OTH ERWISE AVAILABLE TO THE ASSESSEE CAN BE MADE BEFORE THE APPELLATE AUTHORITY . IN SUPPORT OF THIS HE PLACED RELIANCE ON THE JUDGEMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF GOETZE (INDIA) LTD. V CIT (284 ITR 323) [SC]. THE UNDISPUTED FACT EMERGES THAT THE ASSESSEE IN THE A SSESSMENT YEAR UNDER ITA NOS.2176/AHD/2008 & 768 /AHD/2010 GUJARAT GAS TRADING CO.LTD. VS. ITO & JCIT ASST.YEAR(S) 2004-05 & 2005-06 RESPECTIVELY - 6 - CONSIDERATION HIMSELF HAD ADDED THE AMOUNT OF COMM ISSION ON PERFORMANCE GUARANTEE AND PURCHASE COMMISSION INTO THE NET PROFIT AND APPENDED A NOTE WHICH WAS REPRODUCED BY THE AO IN H IS ORDER. HOWEVER DURING THE COURSE OF ASSESSMENT PROCEEDING S VIDE LETTER DATED 11/08/2006 THE ASSESSEE CLAIMED THE EXPENDITURE ST ATING THAT THE EXPENSE WAS ALLOWABLE. WE FIND THAT THE LD.CIT(A) HAS REJE CTED THE GROUND ON THE BASIS THAT THE ASSESSEE HAS NOT FILED THE REVISED R ETURN CLAIMING THE ABOVE EXPENDITURE AND HAS FILED A SIMPLE LETTER BEFORE TH E AO AND FURTHER THE FULL FACTS HAVE NOT BEEN PLACED BEFORE THE AO AND A LSO DETAILS AND EVIDENCES HAVE NOT BEEN FILED BEFORE THE A.O. THE L D.CIT(A) ALSO OBSERVED THAT THE DETAILS FILED BEFORE HIM THE NECE SSITY OF INCURRING THE EXPENSES IS NOT ESTABLISHED AND ALSO IT IS NOT ESTA BLISHED THAT SERVICES HAVE BEEN RENDERED BY THE PAYEES. WE FIND THAT TH E CONTENTION OF THE ASSESSEE IS THAT THE EXPENDITURE WAS REQUIRED TO BE INCURRED UNDER A CONTRACT THEREFORE BEING A CONTRACTUAL LIABILITY THE ASSESSEE WAS REQUIRED TO MAKE THE PAYMENT OF COMMISSION AS PER THE TERMS OF THE AGREEMENT. THE LIABILITY OF THE EXPENDITURE IS NOT DISPUTED AN D THE EXPENDITURE HAS BEEN DISALLOWED ON THE BASIS THAT THE DETAILS WERE NOT AVAILABLE BEFORE THE AUTHORITIES BELOW. UNDER THESE FACTS OF THE CASE A ND TAKING A NOTE OF THE FACT THAT THE ASSESSEE HAS PRODUCED COPIES OF VARIO US AGREEMENTS RELATING TO THE PAYMENT OF COMMISSION WERE REQUIRED TO BE PA ID BY THE ASSESSEE WE ARE OF THE CONSIDERED VIEW THAT THE AO SHOULD VE RIFY THE EVIDENCES PLACED BEFORE HIM ABOUT THE QUANTUM OF COMMISSION P AID AND ALSO THE ITA NOS.2176/AHD/2008 & 768 /AHD/2010 GUJARAT GAS TRADING CO.LTD. VS. ITO & JCIT ASST.YEAR(S) 2004-05 & 2005-06 RESPECTIVELY - 7 - NATURE OF SERVICES RECEIVED BY THE ASSESSEE. THUS GROUNDS RAISED IN THIS APPEAL ARE RESTORED TO THE FILE OF AO FOR VERIFICA TION AND THE APPEAL OF THE ASSESSEE FOR AY 2004-05 IS TREATED AS ALLOWED BUT F OR STATISTICAL PURPOSES. 7. NOW WE TAKE UP THE ASSESSEES APPEAL IN ITA NO.768/AH D/2010 FOR AY 2005-06. THE ASSESSEE HAS RAISED THE FOLLOWI NG GROUNDS OF APPEAL:- YOUR APPELLANT BEING AGGRIEVED WITH THE ORDER PASSE D BY THE CIT (APPEALS) VIII AHMEDABAD PRESENTS THIS APPEAL AGAINST THE SAME ON THE FOLLOWING AMONGST OTHER GROUNDS. 1. THE ORDER PASSED BY LEARNED CIT (APPEALS) IS BAD IN LAW AND ON FACT AND HENCE IT IS REQUESTED THAT THE SAME BE SUITABLY MODIFIED. 2. THE LEARNED CIT (APPEALS) HAS GROSSLY ERRE D IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE MADE BY THE LEARNED ASSESSING OFFI CER OF THE APPELLANT'S CLAIM FOR DEDUCTION OF RS.L 28 55 000/- AND OF RS.1 45 80 000 /- BEING EXPENSES PAYABLE TOWARDS PURCHASE COMMISSION AND COMMISSION ON PERFORMANCE G UARANTEE RESPECTIVELY TO BRITISH ENERGY HOLDINGS LIMITED. 3. THE LEARNED CIT (APPEALS) HAS GROSSLY ERRE D IN LAW AND ON FACTS IN CONFIRMING THE AFORESAID DISALLOWANCE MADE BY THE AO BY NOT TA KING COGNIZANCE OF THE REVISED RETURN OF INCOME FILED ELECTRONICALLY ON 25/7/2007. THE LEARNED CIT (A) WRONGLY CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OF FICE FOR THE APPELLANT'S CLAIM WITHOUT APPRECIATING THE FACT THAT THE APPELLANT HA D CLAIMED THE AFORESAID EXPENDITURE EVEN AT THE TIME OF ASSESSMENT U/S.143( 3) AND DURING THE ASSESSMENT THE APPELLANT PRODUCED ALL THE RELEVANT DOCUMENTS COPI ES OF AGREEMENTS CALLED FOR SUBSTANTIATING THE APPELLANT'S CLAIM THAT THIS EXPE NDITURE IS A GENUINE BUSINESS EXPENDITURE. 4. THE LEARNED CIT (APPEALS) HAS GROSSLY ERRE D IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE MADE BY THE LEARNED ASSESSING OFFI CER WITHOUT APPRECIATING THE FACT THAT THE EXPENDITURE IN QUESTION HAS BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS OF THE APPELLANT AND THE LI ABILITY ON ACCOUNT OF SUCH ITA NOS.2176/AHD/2008 & 768 /AHD/2010 GUJARAT GAS TRADING CO.LTD. VS. ITO & JCIT ASST.YEAR(S) 2004-05 & 2005-06 RESPECTIVELY - 8 - EXPENDITURE HAS CRYSTALLIZED DURING THE PREVIOUS YE AR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL AND THAT THE COMMISSION ON PERFORMANCE GUARANTEE AND PURCHASE COMMISSION HAS BEEN PAID IN ACCORDANCE WITH THE TER MS OF AGREEMENT ENTERED INTO WITH BRITISH GAS INDIA PVT. LTD. BG ENERGY HOLDING LTD AND GUJARAT GAS CO. LTD. 5. THE LEARNED CIT (APPEALS) HAS GROSSLY ERRE D IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE MADE BY THE LEARNED ASSESSING OFFI CER BY ARBITRARILY HOLDING THAT THERE ARE NO EVIDENCES PRODUCED BY THE APPELLANT FO R THE SERVICES RENDERED BY BG ENERGY HOLDINGS LIMITED DURING THE YEAR UNDER APPEA L. THE APPELLANT SUBMITS HEREBY THAT IT HAD PRODUCED ALL THE EVIDENCES AND RECORDS FOR THE SERVICES RENDERED BY THE BG ENERGY HOLDINGS LIMITED DURING THE ASSESSMENT PR OCEEDINGS AS WELL AS APPELLATE PROCEEDINGS HOWEVER THE SUBMISSIONS HAVE BEEN IGNOR ED WHILE CONFIRMING THE DISALLOWANCE. 6. THE LEARNED CIT (APPEALS) HAS GROSSLY ERRE D IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE MADE BY THE LEARNED ASSESSING OFFI CER BY ARBITRARILY HOLDING THAT IF THERE ARE NO CHANGES IN THE TERMS AND CONDITIONS OF THE AGREEMENT AFFECTING THE PAYMENT THEN THE SAID EXPENDITURE NEED NOT BE ACCOU NTED OR CLAIMED AS TAX DEDUCTIBLE SUBSEQUENTLY. THE APPELLANT WOULD LIKE T O BRING TO YOUR NOTICE THAT ANY BUSINESS EXPENDITURE SHOULD BE ALLOWED AS A DEDUCTI BLE EXPENDITURE IF IT HAS BEEN INCURRED DIRECTLY OR INDIRECTLY FOR THE BUSINESS OF THE APPELLANT EVEN THOUGH THERE ARE NO CHANGES IN THE TERMS AND CONDITIONS OF THE AGREE MENT. THE FACT THAT THE APPELLANT EXERCISED PRUDENCE IN NOT CLAIMING THESE AMOUNTS AS DEDUCTIBLE EXPENDITURE TILL THEY WERE PAID SHOULD NOT BE USED AGAINST THE APPELLANT. 7. THE LEARNED CIT (APPEALS) HAS GROSSLY ERRE D IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE MADE BY THE LEARNED ASSESSING OFFI CER BY ARBITRARILY HOLDING THAT THE PAYMENTS IN QUESTION ARE IN THE NATURE OF COMMI SSION ATTRACTING DEDUCTION OF TAX AT SOURCE AS PER THE PROVISIONS OF CHAPTER XVTI-B I .T. ACT WITHOUT APPRECIATING THE FACT THAT THE PAYMENTS IN QUESTION ARE IN THE NATUR E OF INCOME FROM BUSINESS IN THE HANDS OF THE RECIPIENTS AND AS PER ARTICLE 7 OF THE DTAA (DOUBLE TAX AVOIDANCE AGREEMENT) BETWEEN INDIA AND THE UNITED KINGDOM THE AFORESAID INCOME IS NOT TAXABLE IN INDIA BECAUSE BG ENERGY HOLDINGS LIMITED DID NOT HAVE ANY PERMANENT ESTABLISHMENT IN INDIA DURING THE YEAR UNDER APPEAL . HENCE THERE WAS NO LIABILITY TO DEDUCT TAX AT SOURCE FROM SUCH PAYMENTS. THE LEARNE D CIT (A) FAILED TO APPRECIATE THE FACT THAT AS PER LEGAL OPINION PLACED ON RECORD THE PAYMENT BEING IN THE NATURE OF INCOME FROM BUSINESS IN THE HANDS OF THE NON RESIDE NT THERE WAS NO LIABILITY TO DEDUCT TAX AT SOURCE AND THEREFORE THE PROVISIONS OF SECTI ON 40 (A) (IA) ARE NOT APPLICABLE TO THE FACTS OF THE APPELLANT CASE. ITA NOS.2176/AHD/2008 & 768 /AHD/2010 GUJARAT GAS TRADING CO.LTD. VS. ITO & JCIT ASST.YEAR(S) 2004-05 & 2005-06 RESPECTIVELY - 9 - 8. THE LEARNED CIT (APPEALS) HAS GROSSLY ERRE D IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE MADE BY THE LEARNED ASSESSING OFFI CER WITHOUT CLEARLY STATING OR BRINGING ON RECORD THE ADDITIONAL SPECIFIC EVIDENCE S REQUIRED FROM THE APPELLANT TO SUBSTANTIATE THAT SERVICES WERE RENDERED BY BG ENER GY HOLDINGS LIMITED TO THE APPELLANT IN THIS SPECIFIC BUSINESS TRANSACTION. TH E APPELLANT WOULD LIKE TO BRING TO YOUR NOTICE THAT IT HAD SUBMITTED ALL THE NECESSARY EVIDENCE DURING ASSESSMENT PROCEEDINGS AS WELL AS THE APPELLATE PROCEEDINGS FO R SUBSTANTIATING THE SERVICES RENDERED BY BG ENERGY HOLDINGS LIMITED TO THE APPEL LANT. HOWEVER ALL THE EVIDENCE HAVE BEEN NEGATED ARBITRARILY 9. IT IS THEREFORE PRAYED THAT THE DISALLOWA NCE MADE BY THE LEARNED ASSESSING OFFICER AND CONFIRMED BY THE CIT (A) OF THE APPELLA NT'S CLAIM FOR DEDUCTION OF EXPENDITURE ON PURCHASE COMMISSION AND COMMISSION O N PERFORMANCE GUARANTEE PAYABLE TO BRITISH GAS ENERGY HOLDINGS LTD MAY PLEA SE BE DELETED. 10. THE LEARNED CIT (APPEALS) HAS GROSSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS. 26 00 000/- MADE BY THE LEARNED ASSESSING OFFICER ON ACCOUNT OF INTEREST RECEIVED FROM M/S. UNITED PHOSPEROUS WITHO UT APPRECIATING THE FACT THAT THE APPELLANT HAD DISCLOSED THE RECEIPT OF SUCH INTERES T AS INCOME IN F.Y. 2003-04 AND 2004-05 ON ACCRUAL BASIS AND DOCUMENTARY EVIDENCE I N THE FORM OF LEDGER ACCOUNTS WERE FURNISHED WHICH CORROBORATED DISCLOSURE OF SUC H INCOME. 11. THE LEARNED CIT (APPEALS) HAS GROSSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS. 26 00 000/- MADE BY THE LEARNED ASSESSING OFFICER WITHOUT APPRECIATING THE FACT THAT EVEN AS PER SUB-RULE (3) & (4) OF RULE 37BA OF INCOME TAX RULES TO BE READ WITH SECTION 199 OF THE INCOME TAX ACT THE CREDIT FOR TAX AMOUNTING TO RS.5 43 660 IS ALLOWABLE TO THE APPELLANT. 12. IT IS THEREFORE PRAYED THAT THE IMPUGNED AD DITION OF RS. 26 00 000/- MADE BY THE AO AND CONFIRMED BY THE CIT (A) MAY PLEASE BE D ELETED. YOUR APPELLANT PRAYS FOR LEAVE TO ADD ALTER AND/OR AMEND ALL OR ANY OF GROUNDS BEFORE THE FINAL HEARING OF APPEAL FILED. 7.1. IN THIS APPEAL THE FACTS ARE IDENTICAL TO THE FACTS OF ASSESSEES APPEAL IN ITA NO.2176/AHD/2008 FOR AY 2004-05(SUPRA ). THE RESPECTIVE REPRESENTATIVES OF THE PARTIES ADOPTED T HEIR ARGUMENTS AS WERE ITA NOS.2176/AHD/2008 & 768 /AHD/2010 GUJARAT GAS TRADING CO.LTD. VS. ITO & JCIT ASST.YEAR(S) 2004-05 & 2005-06 RESPECTIVELY - 10 - ADDRESSED IN ITA NO.2176/AHD/2008(SUPRA) WHEREIN W E HAVE ALLOWED THE APPEAL OF THE ASSESSEE FOR STATISTICAL PURPOSES . ACCORDINGLY THE APPEAL OF THE ASSESSEE FOR THIS AY 2005-06 ALSO FO R THE SAME REASONING WE RESTORE ALL THE GROUNDS RAISED BY THE ASSESSEE T O THE FILE OF AO FOR VERIFICATION. AS A RESULT THIS APPEAL OF THE ASSE SSEE IS ALSO ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE COMBINED RESULT BOTH THE APPEALS OF THE ASSESSEE FOR AYS 2004-05 & 2005-06 ARE ALLOWED FOR STATISTICAL P URPOSES. ORDER PRONOUNCED IN THE COURT ON FRIDAY THE 31 ST DAY OF JULY 2015 AT AHMEDABAD. SD/- SD/- ( .. ) ( ) ( . ) ( G.D. AGARWAL ) ( KUL BHARAT ) VICE PRESIDENT (AZ) JUDICIAL MEMBER AHMEDABAD; DATED 31/ 07 /2015 5-..+ .+../ T.C. NAIR SR. PS ITA NOS.2176/AHD/2008 & 768 /AHD/2010 GUJARAT GAS TRADING CO.LTD. VS. ITO & JCIT ASST.YEAR(S) 2004-05 & 2005-06 RESPECTIVELY - 11 - !'#$#%! / COPY OF THE ORDER FORWARDED TO : 1. %& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. 678 9 / CONCERNED CIT 4. 9 ( ) / THE CIT(A)-VIII AHMEDABAD 5. :; '+78 - 782 6 / DR ITAT AHMEDABAD 6. ;< = / GUARD FILE. / BY ORDER (: ' //TRUE COPY// / ( DY./ASSTT.REGISTRAR) / ITAT AHMEDABAD 1. DATE OF DICTATION .. 28.7.15 (DICTATION-PAD 8+ PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..29.7.15 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.31.7.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31.7.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER