VARDHAMAN & HIRANANDANI DEVELOPERS, MUMBAI v. ITO 12(3)(4), MUMBAI

ITA 6455/MUM/2010 | 2007-2008
Pronouncement Date: 28-02-2011 | Result: Dismissed

Appeal Details

RSA Number 645519914 RSA 2010
Assessee PAN MARCH1998T
Bench Mumbai
Appeal Number ITA 6455/MUM/2010
Duration Of Justice 5 month(s) 27 day(s)
Appellant VARDHAMAN & HIRANANDANI DEVELOPERS, MUMBAI
Respondent ITO 12(3)(4), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-02-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted F
Tribunal Order Date 28-02-2011
Assessment Year 2007-2008
Appeal Filed On 01-09-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F MUMBAI BEFORE SHRI S V MEHROTRA ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO JUDICIAL MEMBER ITA NO. 6455/MUM/2010 (ASSESSMENT YEAR 2007-08) VARDHAMAN AND HIRANANDANI DEVELOPERS 514 DALAMAN TOWERS 214 FPJ MARG NARIMAN POINT MUMBAI-400021 PAN:AAAFV2059E . APPELLANT VS THE INCOME TAX OFFICER WARD 12(3)(4) MUMBAI. RESPONDENT APPELLANT BY : SHRI CHETAN A KARIA RESPONDENT BY : SMT.ASHIMA GUPTA O R D E R PER VIJAY PAL RAO JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 23.07.2010 OF THE CIT(A) FOR THE ASSES SMENT YEAR 2007-08. 2. THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS IN THIS APPEAL: 1. THE LD. CIT(A) ERRED IN CONFIRMING ADDITION OF RS.1 78 74 364/- U/S 41/(1)/28(IV) ITA NO. 6455/MUM/2010 (ASSESSMENT YEAR 2007-08) 2 2. WITHOUT PREJUDICE THE LEARNED CIT(A) ERRED IN CONFIRMING THE ASSESSMENT OF HE SAID AMOUNT I AY 2007-08. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO FOUND THAT THE ASSESSEE HAS SHOWN TO HAVE ISSUED C HEQUES BY WAY OF BOOK ENTRIES FROM 11 TH MARCH 1998 TILL 31 ST MARCH 2007 OF RS.1.61 CRORES WHICH HAS NOT BEEN ENCASHED .. THE ASSESSING OFFICER ALSO FOUND THAT THE SAME RELATES TO PAYMENTS FOR VARIOUS CREDITORS WHICH HAS BEEN WIPED OFF FRO M ITS BOOKS AND HAS BEEN SHOWN AS OVERDRAFT FROM ORIENTAL BANK OF COMMERCE. HE HAS ALSO FOUND THAT IN MANY CASES E VEN THE NAMES OF PARTIES WERE NOT MENTIONED. THEREFORE TH E AO WAS OF THE VIEW THAT THE CORRECT NATURE IS OF DISCHARGE D LIABILITIES AND THE ASSESSEE HAS MERELY PASSED BOOK ENTRIES TO SUBSTANTIATE THAT THE DISCHARGE WAS BY WAY OF REPA YMENT OF THE CREDIT BALANCES. THE AO FOUND THAT THE SAID TR EATMENT IS CLEARLY IN THE NATURE OF TREATMENT SPECIFIED IN EXP LANATION 1 TO SECTION 41(1) REGARDING ENTRIES WHICH CAN BE TREAT ED AS DISCHARGES OF LIABILITY BY UNILATERAL ACT OF WRITI NG OFF SUCH LIABILITIES IN ITS BOOKS. 4. THE AO ALSO OBSERVED THAT THERE WAS SUBSTANTIAL CREDITS OUTSTANDING IN THE BOOKS OF ASSESSEE FOR THE LAST 8-10 YEARS WHICH ARE REPRODUCED BELOW: ITA NO. 6455/MUM/2010 (ASSESSMENT YEAR 2007-08) 3 SR.NO. NAME OF THE PARTY AMOUNT 1 KANCHAN M BHORA RS.77 302 2 MEENA D PAHALAJANI RS.21 937 3 METAL CRAFT RS.71 400 4 OM TRANSPORT CO. RS.1 166 5 PRANAV CONST. EQUIPMENT P LTD RS.1 98 485 6 PRIMA PLY AND LAMINATESC[ RS.3 88 529 7 R S STONE SUPPLY COM. RS.1 869 8 RAJASHREE CEMENT RS.500 9 RUPAL TRANSPORT RS.1 193 10 SHREE RAM ENTERPRISES RS.4 980 11 SHREE RAMDEV ENTERPRISES RS.10 319 12 SOILS AND FOUNDATION ENGINEERS RS.11 889 13 STRESSCRETE INDIA LTD RS.47 500 14 SURAJ TRADERS RS.3 594 15 YADAV ELECTRIC STORES RS.1 273 16 RAJENDRAKUMAR H JAIN RS.77 302 17 SUBASHCHAND JAIN RS.77 302 18 GUJARAT BLDG MATGERIALS P LTD RS.13 326 19 J K PLUMBING AND SANITATION RS.5 71 026 20 HEMAND J ZAVERI RS.2 31 095 21 J B DECORA RS.7 342 22 OTHER EXPENSES RS.92 83 817 TOTAL RS.1 10 03 146 5. THE AO CALLED UPON THE ASSESSEE TO PRODUCE THE ADDRESSES OF THE FOLLOWING PARTIES: 1. PRANAV CONST. EQUIPMENT P LTD ITA NO. 6455/MUM/2010 (ASSESSMENT YEAR 2007-08) 4 2. MEENA D PAHALAJANI 3. KANCHAN M BHORA 4. RAJENDRAKUMAR H JAIN 5. SUBASHCHAND JAIN 6. HEMAND J ZAVERI 6. AGAIN THE NOTICE U/S 133(6) WAS ISSUED AND THE NOTICE STRESSCRETE INDIA LTD J K PLUMBING AND SANITATION COULD NOT BE SERVED DUE TO INCORRECT ADDRESS. IN REPLY TO THE N OTICE SOME PARTIES STATED THAT THERE IS NO BALANCE OUTSTANDIN G AS PER THEIR RECORDS. 7. IN REPLY TO THE SHOW CAUSE NOTICE THE ASSESSEE SUBMITTED BEFORE THE AO THAT IT HAD MADE CERTAIN P URCHASE FROM PRIMA PLY AND LAMINATES AND J K PLUMBING AND SANITATION. THE ASSESSEE ALSO SUBMITTED THAT THE PROJECT UNDERTAKEN BY THE FIRM IS UNDER CONSTRUCTION AND A LL THE EXPENSES INCURRED TILL DATE ARE DEBITED TO WORK-IN -PROGRESS (WIP) ACCOUNT AND TILL DATE NO DEDUCTION HAS BEEN C LAIMED IN RESPECT OF ANY OF THE EXPENSES. THE ASSESSEE SUBM ITTED THAT AS PER THE PROVISIONS OF SECTION 41(1) THE ADDITION TO INCOME HAS TO BE MADE ONLY IF ANY DEDUCTION OR ALLOWANCE H AS BEEN CLAIMED IN ANY PREVIOUS YEAR AND THEREFORE IF ANY C REDIT BALANCES ARE OUTSTANDING FOR MORE THAN 8 TO 10 YEA RS THE SAME CAN BE REDUCED FROM WORK IN PROGRESS AND IN NO WAY BE CONSIDERED AS INCOME U/S 41(1) OF THE IT ACT. ITA NO. 6455/MUM/2010 (ASSESSMENT YEAR 2007-08) 5 8. THE AO WAS OF THE VIEW THAT THE METHOD OF ACCOU NTING FOLLOWED BY THE ASSESSEE IS MERELY FOR RECOGNITION OF PROFIT AND IS AN ALLOWABLE METHOD FOR PROJECT LASTING OVE R MANY YEARS DUE TO UNPREDICTABILITY OF THE EXTENT OF PROF IT ESPECIALLY AT THE STAGE OF COMMENCEMENT OF THE PROJECT. 9. THE AO DID NOT ACCEPT THE EXPLANATION OF THE ASS ESSEE AND HELD THAT THE DISCHARGED LIABILITY OF RS.1 78 74 364/- CONSISTING OF DISCHARGE OF LIABILITY UNILATERALLY E FFECTED BY THE ASSESSEE BY BOOK ENTRIES FOR ISSUE OF CHEQUES TO TH E EXTENT OF RS.1 60 55 035/- AND THE CREDITORS OUTSTANDING FOR MORE THAN 8 TO 10 YEARS OF RS.18 19 329/- (AFTER EXCLUDING RS.92.84 LAKHS BEING INTEREST ON LOAN TO HDFC) IS TAXABLE U NDER 41(1)/28(IV) ON ACCOUNT OF DISCHARGE OF LIABILITY O R ALTERNATIVELY CONSTITUTING BENEFIT ACCRUED ON ACCOUNT OF CONDUCT ING OF THE BUSINESS 10. ON APPEAL THE CIT(A) CONFIRMED THE ADDITION M ADE BY THE AO VIDE IMPUGNED ORDER 11. BEFORE US THE LEARNED AR SUBMITTED THAT ALL E XPENSES INCURRED TILL DATE ARE DEBITED TO WIP AND ACCOUNT ANT NO DEDUCTION HAS BEEN CLAIMED THUS NO ADDITION CAN BE MADE ITA NO. 6455/MUM/2010 (ASSESSMENT YEAR 2007-08) 6 U/S 41(1. THE LEARNED AR SUBMITTED THAT THE AO HAS OBSERVED THAT THE METHOD OF ACCOUNTING FOLLOWED IN THE PROJ ECT COMPLETION METHOD IS ONLY FOR REORGANIZATION OF REV ENUE AT THE END OF THE PROJECT. HE SUBMITTED THAT THE WIP IS PREPAID FOR EACH YEAR AND FILED WITH THE RETURN AND SUCH WORK I N PROGRESS INDICATES ALL THE EXPENSES BORN IN THAT YEAR. THE LEARNED AR SUBMITTED THAT THE INCOME IS NOT RECOGNIZABLE AS ON THE DATE OF THE END OF THE RELEVANT FINANCIAL YEARS AND TH E EXPENSES HAVE NOT BEEN GIVEN EFFECT TO DETERMINING PROFIT. THE LEARNED AR SUBMITTED THAT FOR THE PURPOSE OF SECTION 41(1) ;THE CRITERIA THAT THE ALLOWANCE OR DEDUCTION HAS BEEN M ADE IS NOT FULFILLED. ALTERNATIVELY THE LEARNED AR SUBMITTED THAT THE ADDITION CANNOT BE TAXED IN THE ASSESSMENT YEAR UND ER CONSIDERATION BECAUSE THE PAYMENTS SHOWN BY THE ASS ESSEE THROUGH CHEQUES WERE DURING THE PERIOD FROM 1998 -99 TO 2006-07. 12. ON THE OTHER HAND THE LEARNED DR HAS SUBMITTED THAT THE ASSESSEE HAS SHOWN IN THE BOOKS OF ACCOUNTS THE PAYMENT TO THE CREDITORS WHEREAS NO SUCH PAYMENTS WAS MADE BY THE ASSESSEE THEREFORE THE ASSESSEE HAS W RITTEN OFF CREDITS FROM THE BOOKS OF ACCOUNT AND THE SAME REPR ESENTS INCOME BEING PART OF THE TRADING ACCOUNT OF THE A SSESSEE. IT ITA NO. 6455/MUM/2010 (ASSESSMENT YEAR 2007-08) 7 IS A BENEFIT TO THE ASSESSEE TO THE EXTENT OF THE A MOUNT WHICH WAS SHOWN AS LIABILITY TO THE SUNDRY CREDITORS AGA INST THE SUPPLY OF RAW MATERIAL CONSUMED IN THE CONSTRUCTIO N OF THE PROJECT ON THE BUILDING WHICH HAS SHOWN WIP. THUS THE LEARNED DR SUBMITTED THAT EVEN IF THE ASSESSEE HAS NOT RECOGNIZED ANY INCOME FROM THE PROJECT THE LIABIL ITY WHICH IS NO MORE EXISTS CERTAINLY A GAIN IN THE TRADING AC COUNT OF THE ASSESSEE AND LIABLE TO THE TAX UNDER SECTION 41(1)/ 28(IV). HE HAS RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES . HE HAS RELIED UPON THE DECISION OF THE HON. JURISDICTIONAL HIGH COURT IN THE CASE OF SOLID CONTAINERS LTD V/S DY CIT (308 ITR 417) 13. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AS WE LL AS THE DECISION OF THE HON. JURISDICTIONAL HIGH COURT IN T HE CASE OF SOLID CONTAINERS LTD V/S DY CIT (308 ITR 417). IT I S UNDISPUTED FACT THAT THE ASSESSEE HAS SHOWN THE PAYMENT BY IS SUING CHEQUES TOWARDS THE DISCHARGE OF LIABILITY REPRESEN TING THE TRADE CREDITORS. THESE PAYMENTS WERE FOR PURCHASE OF RAW MATERIAL CONSUMED BY THE ASSESSEE IN THE CONSTRUCT ION OF PROJECT WHICH IS NOT COMPLETED AND THEREFORE THE AS SESSEE HAS NOT RECOGNIZED ANY INCOME FROM THE SAID PROJECTS. THE ASSESSEE HAS BEEN SHOWING THE ENTIRE COST OF THE P ROJECT AS WIP. THE MAIN CONTENTION OF THE ASSESSEE IS THAT EVEN IF ITA NO. 6455/MUM/2010 (ASSESSMENT YEAR 2007-08) 8 THERE IS REMISSION OF LIABILITY THE SAME CANNOT BE TAXED AS INCOME BUT AT THE MOST MAY BE REDUCED FROM THE COST OF THE WIP. WE DO NOT AGREE WITH THE CONTENTION OF THE LE ARNED AR THAT THE INCOME DUE TO REMISSION OF LIABILITY CAN B E RECOGNIZED ONLY WHEN THE PROJECT IS COMPLETED. THE ASSESSEE H AS NOT DISPUTED THE REMISSION OF LIABILITIES TOWARDS THE CREDIT BALANCES FOR MATERIAL CONSUMED IN THE CONSTRUCTION OF THE PROJECT. THE ASSESSEE HAS NOT STRAIGHT WAY WRITTEN OFF THE LIABILITY BUT HAS INDIRECTLY WIPED OUT BY WAY OF EN TRIES IN THE BOOKS OF ACCOUNT BY ISSUING THE CHEQUES WHICH WERE NOT ENCASHED. THUS THE REAL EFFECT OF EXERCISE CARRIE D OUT BY THE ASESEEE FOR MAKING THE ENTRIES IN THE BOOKS OF ACCO UNT OF DISCHARGING OF THE LIABILITY WITHOUT ACTUAL PAYME NT WOULD BE THE REMISSION OF THE LIABILITY. UNDISPSUTEDLY THE LIABILITY WAS FOR THE CONSTRUCTION OF THE PROJECT WHICH HAS SHOWN AS STOCK- IN-TRADE/WIP THEREFORE THE REMISSION OF THE SAME HAS BECOME THE INCOME OF THE ASSESSEE BEING PART OF TH E TRADING ACTIVITY. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SOLID CONTAINERS LTD V/S DY CIT (SUPRA) RELIED UPO N BY THE DR HAS OBSERVED AS UNDER : ITA NO. 6455/MUM/2010 (ASSESSMENT YEAR 2007-08) 9 3. IT IS WORTHWHILE TO REFER TO THE OBSERVATION O F THE APEX COURT IN T V SUNDARAM IYANGAR AND SONS LT D (1996) 222 ITR 344: 22. THE PRINCIPLE LAID DOWN BY ATKINSON J APPLIES IN FULL FORCE TO THE FACTS OF THIS CASE IF A COMMO N SENSE VIEW OF THE MATTER IS TAKEN THE ASSESSEE BECAUSE OF THE TRADING OPERATION HAD BECOME RICHER BY THE AMOUNT WHICH IT TRANSFERRED TO ITS PROFIT AN D LOSS ACCOUNT. THE MONEYS HAD ARISEN OUT OF ORDINAR Y TRADING TRANSACTIONS. ALTHOUGH THE AMOUNTS RECEIVE D ORIGINALLY WERE NOT OF INCOME NATURE THE AMOUNTS REMAINED WITH THE ASSESSEE FOR A LONG PERIOD UNCLAIMED BY THE TRADE PARTIES. BY LAPSE OF TIME THE CLAIM OF THE DEPOSIT BECAME TIME BARRED AND THE AMOUNT ATTAINED A TOTALLY DIFFERENT QUALITY. IT BE CAME A DEFINITE TRADE SURPLUS ATKINSON. J POINTED OUT T HAT IN TATTERSALLS CASE (1939) 7 ITR 316 (CA) NO TRADING ASSET WAS CREATED. MERE CHANGE OF METHOD OF BOOKKEEPING HAD TAKEN PLACE. BUT WHERE A NEW ASSET CAME INTO BEING AUTOMATICALLY BY OPERATION OF LAW COMMON SENSE DEMANDED THAT THE AMOUNT SHOULD BE ENTERED IN THE PROFIT AND LOSS ACCOUNT FOR THE Y EAR AND BE TREATED AS TAXABLE INCOME. IN OTHER WORDS T HE PRINCIPLE APPEARS TO BE THAT IF AN AMOUNT IS RECEIV ED IN COURSE OF A TRADING TRANSACTION EVEN THOUGH IT IS NOT TAXABLE IN THE YEAR OF RECEIPT AS BEING OF REV ENUE CHARACTER THE AMOUNT CHANGES ITS CHARACTER WHEN TH E AMOUNT BECOMES THE ASSESSEES OWN MONEY BECAUSE OF LIMITATION OR BY ANY OTHER STATUTORY OR CONTRACT UAL RIGHT. WHEN SUCH A THING HAPPENS COMMON SENSE DEMANDS THAT THE AMOUNT SHOULD BE TREATED AS INCOME. 23. IN THE PRESENT CASE THE MONEY WAS RECEIVED BY THE ASSESSEE IN THE COURSE OF CARRYING ON HIS BUSINESS. ALTHOUGH IT WAS TREATED AS DEPOSIT AND WAS OF CAPITAL NATURE AT THE POINT OF TIME IT WAS RECEIVED BY EFFLUX OF TIME THE MONEY HAS BECOME TH E ASSESSEES OWN MONEY. WHAT REMAINS AFTER ADJUSTMENT OF THE DEPOSITS HAS NOT BEEN CLAIMED BY THE CUSTOMERS. THE CLAIMS OF THE CUSTOMERS HAVE BECOME BARRED BY LIMITATION. THE ASSESSEE ITSELF H AS TREATED THE MONEY AS ITS OWN MONEY AND TAKEN THE AMOUNT TO ITS PROFIT AND LOSS ACCOUNT. THERE IS N O EXPLANATION FROM THE ASSESSEE WHY THE SURPLUS MONEY WAS TAKEN TO ITS PROFIT AND LOSS ACCOUNT EVEN IF I T WAS SOMEBODY ELSES MONEY. IN FACT AS ATKKINSON. J ITA NO. 6455/MUM/2010 (ASSESSMENT YEAR 2007-08) 10 POINTED OUT THAT WHAT THE ASSESSEE DID WAS THE COMMONSENSE WAY OF DEALING WITH THE AMOUNTS. 4. THE PRESENT APPELLANT CAN HARDLY DERIVE ANY ADVANTAGE FROM THE CASE OF MAHINDRA AND MAHINDRA LTD V/S CIT (2003) 261 ITR 501 (BOM). AS IN THAT CASE A CLEAR FINDING WAS RECORDED THAT THE ASSESSEE CONTINUED TO PAY INTEREST AT THE RATE OF 6% FOR A PERIOD OF 10 YEARS AND THE AGREEMENT FOR PURCHASE OF TOOLING WAS ENTERED INTO MUCH PRIOR TO THE APPROVA L OF LOAN ARRANGEMENT GIVEN BY THE RBI. THEREFORE TH E LOAN AGREEMENT IN IS ENTIRELY WAS NOT OBLITERATE D BY SUCH WAIVER. SECONDLY THE PURCHASE CONSIDERATION RELATED TO CAPITAL ASSETS. THE TOOLING WERE IN THE NATURE OF DIES AND THE ASSESSEE WAS A MANUFACTURER OF HEAVY VEHICLES. THE IMPORT WAS THAT OF PLANT A ND MACHINERY AND THE WAIVER COULD NOT CONSTITUTE BUSINESS. THE FACT OF THE PRESENT CASE ARE ENTIREL Y DIFFERENT INASMUCH AS IT WAS A LOAN TAKEN FOR TRADI NG ACTIVITY AND ULTIMATELY UPON WAIVER THE AMOUNT WA S RETAINED IN BUSINESS BY THE ASSESSEE. THUS THE PRINCIPLE STATED BY THE SUPREME COURT IN THE CASE O F T V SUNDARAM IYENGAR AND SONS LTD (1996) 222 ITR 344 WOULD BE SQUARELY APPLICABLE TO THE FACTS OF TH E PRESENT CASE. THE AMOUNT WHICH INITIALLY DID NOT FA LL WITHIN THE SCOPE OF THE PROVISIONS RENDERING IT LIA BLE TO TAX SUBSEQUENTLY HAD BECOME THE ASSESSEES INCOME BEING PART OF THE TRADING OF THE ASSESSEE. SIMILAR VIEW WAS ALSO TAKEN BY A BENCH OF THE MADRAS HIGH COURT IN THE CASE OF CIT V. ARIES ADVERTISING P LTD (20 02) 255 ITR 510. THE COURT TOOK THE VIEW THAT THE ASSESSEE BECAUSE OF TRADING OPERATION BECAME RICHE R BY THE AMOUNT WHICH HAD BEEN TRANSFERRED AND/OR RETAINED IN THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE. 5. IN VIEW OF THE ABOVE SETTLED POSITION OF LAW AND THE FACTS OF THE PRESENT CASE WE ARE OF THE CONSIDERED VIEW THAT NO QUESTION OF LAW MUCH LESS SUBSTANTIAL QUESTION OF LAW ARISES FOR CONSIDERATIO N IN THE PRESENT APPEAL. APPEAL DISMISSED IN LIMINE ITA NO. 6455/MUM/2010 (ASSESSMENT YEAR 2007-08) 11 14. IN VIEW OF THE DECISION OF THE HON. JURISDICTIO NAL HIGH COURT (SUPRA) WE ARE OF THE VIEW THAT ONCE THE LIA BILITY IN THE TRADING ACCOUNT UNDISPUTEDLY CEASES TO EXIST WOUL D BE THE INCOME OF THE ASSESSEE AND HAS NO NEXUS WITH THE R ECOGNITION OF THE INCOME FROM THE PROJECT IN QUESTION FOR THE PURPOSE OF THE TIME OF TAXING THE SAME. 15 AS REGARDS THE CONTENTION OF THE LEARNED AR OF T HE ASSESSEE THAT THE REMISSION OF THE LIABILITY HAS NOT ACCRUED ENTIRELY DURING THE YEAR UNDER CONSIDERATION BUT DU RING THE LONG SPAN OF TIME THEREFORE THE SAME CANNOT BE TA XED IN THE ASSESSMENT YEAR UNDER CONSIDERATION WE FIND THAT T HE REMISSION HAS BEEN ADMITTED BY THE ASSESSEE ONLY IN THE YEAR UNDER CONSIDERATION AND NOT IN THE EARLIER YEARS. T HE ASSESSEE WAS MAKING THE ENTRIES IN THE BOOKS OF ACCOUNT RIGH T FROM THE BEGINNING BUT ONLY IN THE YEAR UNDER CONSIDERATION IN WHICH THE ISSUE ARISES AND IT WAS CONSIDERED AS CESSATION OF LIABILITY DUE TO AFFLUX OF TIME AS WELL AS THE ASSESSEE HAS A LREADY ACCEPTED THE NON-EXISTENCE OF THE TRADING LIABILITY . WHEN THE ASSESSEE BY WAY OF ARTIFICIAL ENTRIES SHOWING TH E PAYMENTS TO CREDITOR AND CORRESPONDING ENTRY FOR OVERDRAFT W ITHOUT COMING OUT WITH CLEAN HANDS THEN THE STAND TAKEN BY THE ASSESSEE HAS NO SUBSTANCE. THEREFORE WE DO NOT FI ND ANY MERIT IN THE ALTERNATIVE CONTENTION OF THE LEARNED AR. IN VIEW OF THE ABOVE DISCUSSION AS WELL AS FACTS AND THE CI RCUMSTANCES OF THE CASE WE FIND NO ERROR OR ILLEGALITY IN THE O RDER OF THE LEARNED CIT(A). ITA NO. 6455/MUM/2010 (ASSESSMENT YEAR 2007-08) 12 16. IN THE RESULT APPEAL OF THE ASSESSEE STANDS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28TH FEB 2 011 SD SD (S V MEHROTRA ) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL M EMBER MUMBAI DATED 28 TH FEB 2011 SRL:15211 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH BY ORDER TRUE COPY ASSTT. REGISTRAR ITAT MUMBAI