DCIT, Hyderabad v. M/s Bhagawati Ana Labs Ltd., Hyderabad

ITA 221/HYD/2010 | 2006-2007
Pronouncement Date: 31-01-2011 | Result: Allowed

Appeal Details

RSA Number 22122514 RSA 2010
Assessee PAN AABCB5249G
Bench Hyderabad
Appeal Number ITA 221/HYD/2010
Duration Of Justice 11 month(s) 18 day(s)
Appellant DCIT, Hyderabad
Respondent M/s Bhagawati Ana Labs Ltd., Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 31-01-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted B
Tribunal Order Date 31-01-2011
Assessment Year 2006-2007
Appeal Filed On 11-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B HYDERABAD BEFORE SHRI G.C. GUPTA VICE PRESIDENT AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER ITA NO.221/H/2010 ASSESSMENT YEAR 2006-07 THE DCIT CIRCLE 1(3) HYDERABAD VS. M/S BHAGAVATHI ANA LABS LTD. HYDERABAD (PAN AABCB 5249 G) (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. K. KAMAKSHI RESPONDENT BY : SHRI A.V. RAGHURAM O R D E R PER CHANDRA POOJARI ACCOUNTANT MEMBER: THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED A GAINST THE ORDER PASSED BY THE CIT(A) II HYDERABAD DATED 17.11.200 9 AND PERTAINS TO THE ASSESSMENT YEAR 2006-07. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS IN I TS APPEAL: 1. THE CIT(A) ERRED IN HOLDING THAT AMOUNT OF ADDI TION DELETED UNDER NORMAL PROVISIONS BE LOGICALLY DEDUCTED FROM THE BOOK PROFITS U/S 115JB. 2. THE CIT(A) ERRED IN ALLOWING THE ASSESSEE TO DIS PUTE THE ADDITION MADE IN THE ORIGINAL ASSESSMENT ORDER AND WHICH WAS NOT DISPUTED IN THE ORIGINAL APPEAL FILED AGAINST T HE ASSESSMENT ORDER IN THE APPEAL FILED AGAINST THE CONSEQUENTIAL ORDER GIVING EFFECT TO THE APPELLATE ORDER. 3. THE CIT(A) ERRED IN HOLDING THAT THE AMOUNT OF PROFIT DIRECTLY TAKEN TO THE BALANCE SHEET WITHOUT ROUTING THROUGH THE PROFIT AND LOSS ACCOUNT DOES NOT AMOUNT TO BOOK PRO FIT U/S 115JB. 3. BRIEF FACTS OF THE ISSUE ARE THAT ORIGINALLY THE ASSESSEE FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006 -07 ON ITA NO.221/H/2010 M/S BHAGAVATHI ANA LABS. HYDERABAD 2 2 24.10.2006 DECLARING NIL INCOME. THE SAID RETURN W AS PROCESSED U/S 143(1) OF THE IT ACT 19.11.2007. LATER NOTICE U/S 143(2) WAS ISSUED. THE ASSESSMENT COMPLETED U/S 143(3) VIDE O RDER DATED 30.12.2008 AS FOLLOWS: A. TAXABLE INCOME UNDER NORMAL PROVISIONS OF THE A CT. NET PROFIT AS PER THE P&L A/C RS.38 08 610 ADD: 1. DEPRECIATION AS PER BOOK CONSIDERED SEPARATELY RS.8 54 984 2. DONATIONS RS. 44 000 3. AMOUNT OF REMISSION ASSESSED TO TAX AS PROFIT U/S 41(1) & 28(IV) AS DISCUSSED ABOVE RS.2 50 00 000 4. AMOUNT OF DISALLOWANCE U/S 40(A)(IA) AS DISCUSSED ABOVE RS.18 28 942 RS.2 77 27 926 ------------------- RS.3 15 36 536 LESS: DEPRECIATION AS PER REVISED STATEMENT RS. 20 89 763 ------------------- INCOME FROM BUSINESS RS.2 94 46 773 LESS: SET OFF OF UNABSORBED DEPRECIATION RS.6 5 37 065 FOR THE AY 1998-99 TO 04-05 LESS: SET OFF OF LOSS B/FD FOR AY 00-01 TO 2004-05 RS.22 76 422 RS.88 13 487 TOTAL INCOME R S.2 06 33 286 TAX PAYABLE U/S 115JB TOTAL INCOME (COMPUTED FROM P&L A/C) RS.2 06 33 286 B. TAXABLE INCOME U/S 115JB OF THE ACT: NET PROFIT AS PER P&L A/C 38 08 610 ADD: AMOUNT WRITTEN BACK ON ACCOUNT OF ONE TIME SE TTLEMENT THE ASSESSEE HAS TAKEN THIS AMOUNT DIRECTLY THE BAL ANCE SHEET UNDER P&L A/C WITHOUT CONSIDERING IN THE P&L A/C IN DETER- MINING BOOK PROFIT UNDER THE COMPANIES ACT. HENC E THE SAID AMOUNT OF RS.2 22 77 243/- IS ADDED TO THE NET PROFIT TO ARRIVE AT CORRECT BOOK PROFIT U/S 115JB RS.2 22 77 423 LESS B/F LOSS RS.94 30 354 UNABSORBED DEPRECIATION RS.54 92 228 RS.54 92 228 TAXABLE PROFIT RS.2 05 93 805 ITA NO.221/H/2010 M/S BHAGAVATHI ANA LABS. HYDERABAD 3 3 4. THE ASSESSING OFFICER OPTED TO CONSIDER THE IN COME OF THE ASSESSEE UNDER NORMAL PROVISIONS OF THE ACT INSTEAD OF INCOME COMPUTED U/S OF 115JB OF THE ACT SINCE THE NORMAL INCOME COM PUTED IS HIGHER THAN THE LATER ONE. AGAINST THIS THE ASSESSEE CARRIED THE APPEAL TO THE CIT(A) WHERE THE ASSESSEE RAISED THE FOLLOWING GROUNDS: 1. THE ASSESSING OFFICER ERRED BOTH ON FACTS AND IN LA W MAKING THE IMPUGNED ADDITION OF RS.2 50 00 000/- U/S 41(1)/28( IV) OF THE ACT. THE ASSESSING OFFICER OUGHT TO HAVE APPRECIATED THA T THE CASE OF THE ASSESSEE DOES NOT FALL WITHIN THE PROVISIONS OF SEC TION 41(1) OR 28(IV) OF THE IT ACT AND THEREFORE THERE WAS NO JUSTIFICA TION FOR TREATING RS.2 50 00 000 AS INCOME OF THE ASSESSEE. 2. THE ASSESSING OFFICER SHOULD NOT HAVE LEVIED INTERE ST U/S 234B OF THE ACT AS THE CASE DOES NOT WARRANT LEVY OF INTEREST 3. THE ASSESSING OFFICER SHOULD NOT HAVE INITIATED PEN ALTY U/S 271(1) ( C ) OF THE IT ACT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE CIT(A)-II HYDERABAD VIDE HIS ORDER IN ITA NO.0270/CIT(A)- II/0809 DATED 26.3.2009 CONSIDERED THE ABOVE GROUND S AND INTER ALIA DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER IN RESPECT OF AMOUNT OF REMISSION ASSESSED TO TAX AS PROFIT U/S 41(1) AND 2 8 (IV) OF THE IT ACT AT RS.2 50 00 000/-. 6. LATER THE CONSEQUENTIAL ORDER DATED 19.5.2009 PASSED BY THE ASSESSING OFFICER GIVING EFFECT TO THE CIT(A) II O RDER DATED 26.3.2009 WHICH READS AS UNDER: CONSEQUENT TO THE CIT(A) HYDERABADS ORDER IN ITA NO.0270/CIT(A)-II/08-09 DATED 23.3.2009 THE ORDER U/S 143(3) OF THE IT ACT 1961 DATED 30.12.2008 IS MODIFIED AS UNDER: A. COMPUTATION OF INCOME UNDER NORMAL PROVISIONS: TOTAL INCOME AS PER ORDER U/S 143(3) DATED 31.12.20 08 RS.2 06 33 286 LESS RELIEF GRANTED BY THE CIT(A) RS.2 50 00 000 ITA NO.221/H/2010 M/S BHAGAVATHI ANA LABS. HYDERABAD 4 4 LOSS UNABSORBED DEPRECIATION TO BE CARRIED FORWARD ( - ) RS.43 66 714 TAX NIL B. COMPUTATION OF INCOME U/S 115JB OF THE IT ACT: TAXABLE PROFIT AS PER ORDER U/S 143(3): RS.2 05 93 805 TAX THERE ON 15 44 535 ADD. SURCHARGE 1 54 454 EDU. CESS 33 980 TOTAL 17 32 969 LESS: TDS 18 18 045 ---------------- BALANCE 4 14 924 ADD. INTEREST U/S 234B 1 36 925 --------------- TOTAL 5 51 849 ADD REFUND ISSUED U/S 143(1) 14 49 845 -------------- PAYABLE 20 01 694 ADD INTEREST U/S 234D 1 37 735 ------------ PAYABLE 21 39 429 LESS: PAID ON 27.02.09 5 00 000 ------------- BALANCE PAYABLE 16 39 429 ADD INTEREST U/S 220(2) 7 580 ------------- TOTAL PAYABLE 16 47 009 ------------- 8. AGAINST THIS CONSEQUENTIAL ORDER THE ASSESSEE FILED A PETITION U/S 154 OF THE IT ACT ON 27.5.2010 BEFORE THE ASSES SING OFFICER WHICH READS AS FOLLOWS: 1. THE ASSESSEE HAD PREFERRED AN APPEAL BEFORE TH E CIT(A) CONTESTING ADDITION OF RS.2 50 00 000/- ON ACCOUNT OF REMISSION OF LIABILITY REPRESENTED BY ONE TIME WAIVER OF LOAN ALONG WITH I NTEREST. THE CIT(A) ALLOWED THIS APPEAL BY DELETING THIS ADDITION VIDE HIS ORDER DATED 26.3.2009 CITED ABOVE. ITA NO.221/H/2010 M/S BHAGAVATHI ANA LABS. HYDERABAD 5 5 2. WHILE COMPLETING THE ORIGINAL ASSESSMENT TAX L IABILITY WAS DETERMINED ON THE BASIS OF THE REGULAR INCOME COMPU TED U/S 143(3) OF THE IT ACT AS THE RETURNED INCOME WAS ENHANCED DUE TO A BOVE ADDITION. THE TAX WAS DETERMINED AT RS.90 35 404/-. THE TAX LIABILIT Y AS PER PROVISIONS SECTION 115JB WAS COMPUTED AT RS.16 47 009. HOWEVE R SINCE THE TAX ON THE REGULAR COMPUTED INCOME WAS MORE THE SAME WAS ADOP TED AS PAYABLE BY THE ASSESSEE. 3. WHILE COMPUTING THE TAX LIABILITY U/S 115JB TH E ASSESSING OFFICER HAD MADE AN ADDITION OF RS.2 22 77 423/- (O UT OF RS.2 50 00 000) ON ACCOUNT OF REMISSION OF LIABILITY WHICH WAS THE SUB JECT MATTER OF APPEAL. 13. IT IS BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER THAT THE LIABILITY U/S 115JB SHOULD HAVE BEEN DETERMINED BY DELETING THE ADDITION OF RS.2 22 77 423/- WHICH WAS DELETED BY CIT(A). IT I S ALSO NOTED THAT COMPUTATION OF TAX U/S 115JB HAS A DIRECT NEXUS WIT H COMPUTATION OF TAX UNDER NORMAL PROVISIONS OF IT ACT. SINCE THE IMPUG NED AMOUNT OF RS.2 22 77 423 WAS DELETED BY THE CIT(A) THE SAME SHOULD NOT HAVE BEEN TAKEN INTO ACCOUNT WHILE COMPUTING THE LIABILITY U/ S 115JB WHILE GIVING EFFECT TO CIT(A) ORDER AS OTHER WISE THE RELIEF GRA NTED BYCITA WOULD BE RENDERED NUGATORY. THIS BEING A PATENT MISTAKE ON THE FACE OF THE RECORD THE SAME REQUIRES MODIFICATION U/S 154 OF THE ACT. IT IS THEREFORE REQUESTED THAT RS.2 22 77 423/- MAY BE EXCLUDED FOR THE PURPO SE OF WORKING OUT THE INCOME AND CONSEQUENT LIABILITY U/S 115JB. 4. EVEN OTHERWISE THE ADDITION OF RS.2 22 77 423/ - TO THE PROFIT COMPUTED UNDER THE COMPANIES ACT AT RS.38 08 610/- IS NOT PERMISSIBLE AS THE SAME IS NOT AN ITEM SPECIFIED UNDER EXPLANATION 1 TO SECTION 115JB. LAW HAS BEEN SETTLED THAT THE ASSESSING OFFICER CAN NOT ADJUST THE BOOK PROFIT OTHER THAN THOSE AUTHORISED UNDER THE EXPLANATION 1 TO SECTION 115JB. IN THIS CONNECTION DECISION OF THE SUPREME COURT IN TH E CASE OF APPOLLO TYRES VS. CIT 2002 255 ITR 273 IS RELEVANT. THEREFORE THE COMPUTATION OF INCOME U/S 115JB AND CONSEQUENT LIABILITY DIRECTLY CONFLICTS WITH THE DECISION OF THE SUPREME COURT IN THE ABOVE CASE. I T IS SETTLED LAW THAT ON THE BASIS OF A DECISION OF A SUPREME COURT RECTIFIC ATION U/S 154 IS PERMISSIBLE. IT IS THEREFORE REQUESTED THAT THE CO MPUTATION U/S 115JB BY ADDICTING RS.2 22 77 423/- IS A PATTERNED MISTAKE APPARENT FROM THE RECORD. IT IS FURTHER BROUGHT TO THE KIND NOTICE O F THE ASSESSING OFFICER THAT ON THE BASIS OF A DECISION OF SUPREME COURT RECTIFI CATION CAN BE MADE. 5. IT MAY BE SEEN WHILE COMPUTING THE TAX LIABILI TY IN THE ORIGINAL ASSESSMENT ORDER U/S 115JB NO INTEREST U/S 234B W AS CHARGED. THE SAME MAY NOT BE CHARGED WHILE GIVING EFFECT TO CIT(A) OR DER. 9. AFTER CONSIDERING THE ABOVE PETITION FILED BY THE ASSESSEE THE ASSESSING OFFICER REJECTED THE SAME VIDE HIS ORDER DATED 24.6.2009 OBSERVING THAT THE BOOK PROFIT U/S 115JB WAS CORREC TLY ADOPTED AT ITA NO.221/H/2010 M/S BHAGAVATHI ANA LABS. HYDERABAD 6 6 RS.2 05 93 805/- AS COMPUTED IN THE ORIGINAL ORDER U/S 143(3) DATED 30.12.2008 AND THERE IS NO MISTAKE APPARENT ON RECO RD. FURTHER THE ASSESSEE FILED AN APPEAL TO THE CIT(A). THE CIT(A) VIDE ORDER DATED 17.11.2009 OBSERVED THAT THE CONSEQUENTIAL ORDER OF ASSESSING OFFICER DATED 19.5.2009 AND THE ASSESSMENT ORDER DATED 30.1 2.2008 REVEALS THAT THE ASSESSING OFFICER HAD NOT GIVEN ANY BASIS OR RE ASONS FOR ADOPTING THE TAXABLE PROFITS AT RS.2 05 93 805/- IN THE CONSEQUE NTIAL ORDER. BUT IT APPEARS THAT HE HAS STRAIGHTAWAY ADOPTED THE TAXABL E PROFIT COMPUTED U/S 115JB IN HIS ASSESSMENT ORDER DATED 30.12.2008 AND HAS NOT PASSED SPEAKING ORDER GIVEN THE RATIONALE FOR ADOPTING SUC H TAXABLE PROFIT U/S 115JB AS THE TOTAL INCOME OF THE ASSESSEE. WHILE CO MPUTING THE BOOK PROFIT U/S 115JB IN THE ASSESSMENT ORDER DATED 30.1 2.2008 THE ASSESSING OFFICER ADDED THE AMOUNT WRITTEN BACK BY THE ASSESS EE TO THE NET PROFIT STATING THAT THE ASSESSEE HAD TAKEN THIS AMOUNT DIR ECTLY TO THE BALANCE SHEET AND NOT CREDITED TO ITS P&L A/C. THE ASSESSI NG OFFICER HAD ACCORDINGLY COMPUTED THE BOOK PROFIT IN THE SCRUTIN Y ASSESSMENT AT RS.2 05 93 805/-. IN THE CONSEQUENTIAL ORDER DATED 19.5.2009 THE ASSESSING OFFICER HAS NOT DEDUCTED THE WRITTEN BACK AMOUNT OF RS.2 50 00 000/- DELETED BY THE CIT(A)-II HYDERABA D IN THE APPELLATE ORDER AS HE HAS DONE IN THE COMPUTATION OF REGULAR TOTAL INCOME. THE ISSUE FOR CONSIDERATION NOW IS WHETHER THE ASSESSIN G OFFICER IS RIGHT IN COMPUTING THE TAXABLE PROFIT U/S 115JB AS HE DID WH ILE GIVING EFFECT TO THE ORDER OF THE CIT(A) II HYD. IN THIS CONTEXT IT I S TO BE SEEN THAT THE ASSESSING OFFICER DEDUCTED THE RELIEF GRANTED BY TH E CIT(A) FROM THE TOTAL INCOME ARRIVED AT IN THE ORDER U/S 143(3) DATED 31. 12.2008 AND ARRIVED AT A LOSS FIGURE OF RS.43 66 714/- BUT DID NOT CARRY O UT THE DEDUCTION OF THE SIMILAR AMOUNT IN THE COMPUTATION OF BOOK PROFIT U/ S 115JB. A PLAIN READING OF SUB SECTION 2 OF 115JB REVEALS THAT FOR THE PURPOSES OF THIS SECTION PROFIT AS ARRIVED AT FROM THE P&L A/C PREP ARED IN ACCORDANCE WITH THE PROVISIONS OF COMPANIES ACT SHOULD BE STARTING POINT AND ADJUSTMENTS ITA NO.221/H/2010 M/S BHAGAVATHI ANA LABS. HYDERABAD 7 7 AS PROVIDED UNDER EXPLANATION 1(A) TO (I) SHOULD BE MADE THEREAFTER. IN THE ASSESSEE CASE IT IS AN UNDISPUTED FACT THAT THE PR OFIT AS PER P&L ACCOUNT IS RS.38 08 610/- HERE THE ADDITION MADE BY THE AS SESSING OFFICER OF RS.2 22 77 423/- IS TO BE SEEN IN THE CONTEXT OF IT EMS (A) TO (I) UNDER EXPLANATION 1 AND DECIDE WHETHER IT IS ONE OF THE E LIGIBLE ITEMS FOR ADJUSTMENT. A CAREFUL PERUSAL OF THE ITEMS (A) TO (I) SHOWS THAT THE AMOUNT WRITTEN BACK BY THE ASSESSEE AND TAKEN TO BALANCE S HEET DOES NOT FALL INTO ANY OF THESE ITEMS. THIS VIEW IS IN ACCORDANCE WIT H THE DECISION OF THE APEX COURT IN APOLLO TYRES LTD. VS. CIT (2002) (255 ITR 273). ACCORDINGLY IT IS LOGICAL THAT THE ASSESSING OFFICER IS NOT ENT ITLED TO MAKE THE ADDITION OF THE SAID AMOUNT WHICH WAS SPECIFICALLY DELETED BY T HE CIT(A) II IN HIS ORDER DATED 26.3.2009. THUS IN CARRYING OUT THE D IRECTIONS OF THE CIT(A)-II GIVEN IN THE ORDER IN ITA NO.0270/CIT(A)-II/08-09 THE ASSESSING OFFICER HAS NOT DEDUCTED THE AMOUNT OF RS.2 22 77 423 AS OB SERVED ABOVE. FINALLY THE CIT(A) GIVEN THE DIRECTION TO THE ASSE SSING OFFICER ACCORDINGLY TO DEDUCT FROM BOOK PROFIT COMPUTED U/S 115JB OF THE I T ACT A SUM OF RS.2 22 77 423/- I.E. THE AMOUNT DIRECTLY TAKEN IN TO THE BALANCE SHEET BY THE ASSESSEE INSTEAD OF PROFIT AND LOSS ACCOUNT. AGAINST THIS THE REVENUE IS IN APPEAL BEFORE US 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSE D THE MATERIALS AVAILABLE ON RECORD. THE ASSESSEE IN ITS FIRST ROU ND OF APPEAL BEFORE THE CIT(A) HAS NOT CHALLENGED THE COMPUTATION OF BOOK P ROFIT U/S 115JB OF THE IT ACT. AS EVIDENT FROM THE GROUNDS OF APPEAL REPR ODUCED IN THE PARA NO. 4 OF THIS ORDER THE ASSESSEE HAS CHALLENGED ONLY T HE ISSUES RELATING TO THE DETERMINATION OF INCOME UNDER NORMAL PROVISIONS OF THE IT ACT AND THE CIT(A) VIDE ORDER DATED 26.3.2009 INTER ALIA DELET ED THE ADDITION RELATING TO REMISSION ASSESSED TO TAX AS PROFIT U/S 41(1) AND 2 8(IV) OF THE ACT AT RS.2 50 00 000/-. THE ISSUE IN COMPUTATION OF BOOK PROFIT U/S 115JB IS RELATING TO ADDITION OF RS.2 22 77 423/- I.E. THE A MOUNT WRITTEN BACK ON ITA NO.221/H/2010 M/S BHAGAVATHI ANA LABS. HYDERABAD 8 8 ACCOUNT OF ONE TIME SETTLEMENT AND THE ASSESSEE HAS TAKEN THIS AMOUNT DIRECTLY TO THE BALANCE SHEET WITHOUT CONSIDERING I N THE P&L A/C IN DETERMINING BOOK PROFIT UNDER THE COMPANIES ACT IS NOT AT ALL THE GROUND BEFORE THE CIT(A). THE ASSESSEE HAS NOT PREFERRED ANY APPEAL AGAINST THE ISSUE RELATING TO COMPUTATION OF THE BOOK PROFIT IN THE FIRST ROUND OF APPEAL AND THE CIT(A) HAS NOT AT ALL DEALT THE ISSUE RELAT ING TO COMPUTATION OF BOOK PROFIT. BEING SO HOW THE ASSESSEE CAN HAVE A NY GRIEVANCE AGAINST THE COMPUTATION OF BOOK PROFIT U/S 115JB OF THE IT ACT? WHEN THE COMPUTATION OF BOOK PROFIT U/S 115JB OF THE ACT IS NOT AT ALL THE SUBJECT MATTER BEFORE THE CIT(A) IN ITS FIRST ROUND HOW TH E ASSESSEE CAN FILE A PETITION U/S 154 BEFORE THE ASSESSING OFFICER AGAIN ST THE GIVING EFFECT ORDER PASSED BY ASSESSING OFFICER W.R.T. CIT(A) ORDER DA TED 26.3.2009. THE CONSEQUENTIAL ORDER PASSED BY THE ASSESSING OFFICER ON 19.5.2009 IS IN ACCORDANCE WITH THE DIRECTION GIVEN BY THE CIT(A) I N HIS ORDER DATED 26.3.2009. NOW THE ASSESSEE AS WELL AS THE CIT(A) WANTS TO DISPOSE OFF THE ISSUE RELATING TO THE COMPUTATION OF BOOK PROFIT T HROUGH RECTIFICATION U/S 154 OF THE ACT. IN OUR OPINION THE CIT(A) IS TRAV ELLING BEYOND THE ISSUE BEFORE HIM. NOW THE CIT(A) THROUGH THE IMPUGNED A PPELLATE ORDER WANTS TO DECIDE THE ISSUE WHICH IS NOT BEFORE HIM IN THE FIRST ROUND OF APPEAL. HIS ACTION IS NOTHING BUT TO DO THE THING INDIRECTL Y WHICH IS NOT POSSIBLE TO DO DIRECTLY THAT IS NOT PERMITTED BY LAW. THE ORDE R OF CIT(A) IS PASSED WITHOUT UNDERSTANDING THE PROVISIONS OF SECTION 115 JB AS WELL AS PROVISIONS OF SECTION 154. THIS IMPUGNED APPELLATE ORDER IS SUFFERING FROM PERVERSENESS AND DEVOID OF MERITS. HENCE WE INCLI NED TO REVERSE THE SAME AND THE ALLOW THE GROUND TAKEN BY THE REVENUE. ITA NO.221/H/2010 M/S BHAGAVATHI ANA LABS. HYDERABAD 9 9 11. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 31. 1.2011 SD/- SD/- G.C. GUPTA CHANDRA POOJARI VICE PRESIDENT ACCOUNTANT MEMBER DATED THE 31 ST JANUARY 2011 COPY FORWARDED TO: 1. THE DY. DIRECTOR OF INCOME TAX (E)-I HYDERABAD 2. SHRI AGARWAL SIKSHA SAMITHI 21-1-823 PATHERGAT TI HYD. 3. CIT(A)- IV HYDERABAD. 4. CIT HYDERABAD 5. THE D.R. ITAT HYDERABAD. NP