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Facts
The assessee, a partnership firm engaged in retail trading, had its case selected for scrutiny for AY 2018-19, leading to an addition of Rs. 4,22,00,000/- under Section 68 for cash credits from seven lenders by the Assessing Officer. The CIT(A) granted partial relief, upholding an addition of Rs. 51,00,000/- against unsecured loans from three specific parties: Sh. Vinod Kumar, Sh. Jagjit Singh, and Smt. Pawandeep Kaur. Both the assessee and the revenue filed cross-appeals against this decision.
Held
The Tribunal observed that the assessee had discharged its onus under Section 68 by submitting PAN, Aadhaar, ITRs, bank statements, and ledger accounts, demonstrating the identity, genuineness, and creditworthiness of the lenders. The loans were received and repaid through banking channels. Citing several judicial precedents, the Tribunal ruled that suspicion cannot outweigh evidence and that the AO failed to conduct proper inquiries into the submitted documents. Consequently, the addition of Rs. 51,00,000/- confirmed by the CIT(A) was deleted.
Key Issues
Whether the addition of Rs. 51,00,000/- as cash credits under Section 68 for unsecured loans from three parties was justified, considering the assessee's submission of documentary evidence proving identity, genuineness, and creditworthiness, and that the loans were received and repaid through banking channels.
Sections Cited
Section 68 of the Income Tax Act, 1961, Section 133(6), Section 142(1), Section 143(3), Section 144B, Finance Act, 2022
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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.
Before: SH. UDAYAN DAS GUPTA & SH. KHETTRA MOHAN ROY
Date of Hearing 18.08.2025 Date of Pronouncement 22.08.2025 ORDER Per: Khettra Mohan Roy, AM: These are Cross- appeals directed against the order of ld. CIT (Appeals), NFAC, Delhi, dated 04.03.2025 for the A.Y. 2018-19.
& 359/Asr/2025 2 Assessment Year: 2018-19
We first take up the assessee’s appeal in ITA No. 250/Asr/2025. The 2. following grounds of appeal, in Form No. 36, are as under:
“1. That the Ld. CIT(A) has erred in confirming the addition on account of cash credits in the name of following persons: - Name of Person Amount Received Sh.Vinod Kumar 20,00,000/- Sh. Jagjit Singh 11,00,000/- Smt. Pawandeep Kaur 20,00,000/- 2. That the Ld. CIT(A) has failed to appreciate that the amount of loan was received from the above said parties during the year under consideration through banking channels and the same was paid back through banking channels during the same year and, as such, the confirmation of addition as made by the Ld. CIT(A) is against the facts and circumstances of the case.
That the Ld. CIT(A) has failed to appreciate and consider the binding judgment of Hon’ble Punjab & Haryana High Court in the case of CIT Vs. Varinder Rawlley, reported in [2014] 51 taxmann.com 524, in which, it has been held that no addition on account of cash credit can be sustained, where the amount of loan is squared up during the year under consideration. The Judgment of Jurisdictional Amritsar Bench of the ITAT in has been confirmed by the Hon’ble P&H High Court.
4. That the Ld. CIT(A) has failed to appreciate that the PAN Numbers/Aadhar Card, Bank statements and evidence of filing the return of income of above persons had been submitted during the course of proceedings before the CIT(A), but the Ld.CIT(A) has failed to consider the same.
5. That since the assessee has proved the identity, genuineness and credit worthiness of the transaction and, as such, the part addition sustained by the Ld. CIT(A) is against the facts and circumstances of the case.
& 359/Asr/2025 3 Assessment Year: 2018-19
That the addition of cash credits as made by the Assessing Officer, is not justified since the AO has failed to accede the request of the assessee to make enquiries from the parties by issuing notices to the said creditors.
That the appellant craves leave to add or amend the grounds of appeal
before the appeal is finally heard or disposed off.”
3. Facts in brief, the assessee is a partnership firm engaged in business of retail trading of IMFL/Beer and Country Liquor etc during the year under consideration. It filed its return of income on 30.10.2018, declaring total income of Rs.4,35,17,680/-. Subsequently, the case of the assessee was selected for complete scrutiny and specific issues related to the ‘issuance of unsecured loan’ and ‘Business expenses’ was pointed out by Ld. AO. Thereafter, the AO passed an assessment order on 10.05.2021 u/s 143(3) r.w.s. 144B of the Act with an addition of Rs.4,22,00,000/- u/s 68 in respect of cash credit received from seven different lenders.
4. Aggrieved the order passed by the AO, the assessee filed an appeal before the First appellate authority, and the Worthy CIT(A) has given part relief to the assessee i.e. relief of Rs. 3,71,00,000/- against unsecured loan taken from 4 parties and upheld the addition of Rs. 51,00,000/- on account of unsecured loan taken from 3 parties namely that;
Name of Person Amount Received Sh.Vinod Kumar 20,00,000/- & 359/Asr/2025 4 Assessment Year: 2018-19
Sh. Jagjit Singh 11,00,000/- Smt. Pawandeep Kaur 20,00,000/-
Aggrieved, both the parties have filed these cross appeals. We have heard Sh. Sudhir Sehgal, Advocate, ld. counsel for the assessee at length. He filed a paper book running into 99 pages. Smt. Balvinder Kaur, CIT DR argued on behalf of the revenue. She relied on the order of the AO and vehemently submitted that the relief granted by the ld. CIT(A) is unwarranted.
6. The ld. AR of the assessee has submitted that the assessee is maintaining its regular book of account, which is audited by Chartered accountant and regular return of income being filed as per audited books for the relevant year consideration i.e. First year of assessee business, the assessee total return declaring income of Rs. 4,35,17,680/-. The ld. AR of the assessee further stated that the AO has not considered the said documents merely because of the fact that, the above said parties have not filed the response to notice issued u/s 133(6). However, the Worthy. CIT(A) considered the detailed submissions and documentary evidences filed by the assessee, which proves the identity, genuineness and creditworthiness of the creditors. Though, the CIT(A) has accepted the same and deleted the addition made by the Ld. AO against with regard to 4 above said parties out of total 7 parties. Reliance is being placed on judgement of HIGH COURT OF & 359/Asr/2025 5 Assessment Year: 2018-19 DELHI Principal Commissioner of Income-tax v. Wel Intertrade (P.) Ltd. reported in [2023] 152 taxmann.com 663 (Delhi) where in it is held as under:
“INCOME TAX : Where assessee had taken loan from a party, since assessee discharged its primary onus of proving identity and capacity of creditor as well as genuineness of transaction, merely because creditor had not responded to notice issued under section 133(6), such loan could not be treated as unexplained credit under section 68” 6.1 In this regard, it appears that these names and the amount have been taken from the 03 parties out of 07 are tabulated as under:
Name of Person Amount Received Sh.Vinod Kumar 20,00,000/- Smt. Pawandeep Kaur 20,00,000/- Sh. Jagjit Singh 11,00,000/- 6.2 The ld. AO further observed that these parties had not submitted any bank statement, ledger account etc., therefore, identity, genuineness and creditworthiness of the above parties remain questionable and no one was produced by the assessee.
6.3 The ld. AR submitted that, the confirmation of the above said party, could not filed before the Ld. AO as well as Worthy CIT(A), merely because of fact that, the above said party namely Sh. Vinod Kumar was suffering from severe disease & 359/Asr/2025 6 Assessment Year: 2018-19 and the submission have been filed before the CIT(A) as per page no. 24 of the CIT(A) order, wherein, we have given the submission that the above said creditor was suffering from severe disease from last 5-6 months and he was unable to speak and none of his family member was aware of the transactions made by Sh. Vinod Kumar, who later died on 29.08.2022 i.e. 5 years later from date of receiving/repaying unsecured loan from the above said person. The AO has observed that, the assessee failed to arrange confirmation of above said person and though, the addition of Rs. 20 Lakh made by the AO in the hands of assessee for using funds for 48 days only, which is not justified as the assessee has duly repaid the loan through proper banking channel and also assessee had filed the Pan, Address and copy of account of the said party vide reply dated 06.04.2021 relevant page 27. And the AO ought to have himself made enquiry from the Jurisdictional Assessing Officer of the Creditor and verify the same.
6.4 Regarding the creditor Smt. Pawandeep Kaur, it is submitted that, the addition made by the AO with regard to the parties mentioned at 6 above merely because of fact that, the confirmation of the above said party, was not filed before the AO as well as Worthy CIT(A), Though, it have been self-decided by the AO as well as confirmed by the CIT(A) that, if there is no confirmation there in the records from the party without appreciating the other documents filed in the shape of Bank statements of the creditor, showing entries of repayment made by & 359/Asr/2025 7 Assessment Year: 2018-19 assessee with in short span of time and , also other details i.e. Pan & Aadhar and ITR were also filed. Further, it is submitted that, from perusal of bank statement of the above said creditor filed at page 82 of the Paper book, it is discernible that, the creditor was having sufficient balance in his bank account for giving the amount of Rs. 20lakh as unsecured loan. Since all three elements i.e. Identity, Creditworthiness and genuineness are proved no addition is called for.
6.5 Now, regarding Sh. Jagjit Singh, it is submitted that, the addition made by the AO with regard to parties mentioned at above merely because of fact that, the confirmation of the above said party, was not filed before the AO as well as Worthy CIT(A), Though, it have been self-decided by the AO as well as confirmed by the CIT(A) that, if there is no confirmation there in the records from the party without appreciating the other documents filed in the shape of Bank statements, showing the transaction of unsecured loans made to assessee and also the bank statement of the assessee has been filed showing that, the loan was repaid by the assessee with in short span of time and amount of Rs. 9 lakh advance to the creditor as fresh loan by assessee. Since all the three elements i.e. Identity, Creditworthiness and genuineness are proved no addition is called for.
The assessee’s detailed submission wherein various documents were filed to 6.6 discharge the onus u/s.68 and the source of the funds have been discussed in detail & 359/Asr/2025 8 Assessment Year: 2018-19 before the Assessing Officer in response to notice issued u/s 142(1) dated 06.04.2021.
In sums and substance, the relevant contents of the assessee’s reply enlisting 6.7 the evidences/documents filed was as under:
Firstly, the documents filed to discharge the onus:— i. Copy of the ledger account of the party in the books of the assessee. ii. Copy of relevant extract of the bank statement of the assessee evidencing the unsecured loan received and repaid by the assessee to the party. Relevant page 76, 77. iii. Copy of PAN Card of the party alongwith the complete address of the party. Copy of Death Certificate of the party dated 29.08.2022.
It was thus contended that the above documents goes to show that these unsecured loans have been given by these three parties to the assessee had also filed the confirmed ledger a/c of assessee in books of bank statement. From all above documents, it was submitted that direct nexus is apparent, that is, these three parties have given loan to the assessee if the amount paid back through banking channel then balance amount / repaid amounts cannot be held as doubted, the relavant judgment and the head notes of the said judgment are reproduced below:
& 359/Asr/2025 9 Assessment Year: 2018-19
“a. Judgment of Hon’ble Punjab & Haryana High Court in the case of CIT vs. Karaj Singh as reported in [2011] 15 taxmann.com 70 (Punjab & Haryana) dated 31.03.2011. “Section 68 of the Income-tax Act, 1961 - Cash credits - Assessment year 1992-93 - Assessee filed return for relevant assessment year declaring certain income - On a complaint, matter was investigated and it was found that assessee had introduced his own secret funds to tune of Rs. 1.50 lakhs through one 'N' who first deposited that money in his account and later on got prepared a bank draft in name of assessee on pretext of foreign remittance and same was given to assessee - On that basis, Assessing Officer made addition of Rs. 1.50 lakhs to assessee's income by invoking provisions of section 68 - On appeal, Commissioner (Appeals) sustained addition - However, on second appeal, Tribunal, on basis of material on record, came to conclusion that amount in question had been repaid to 'N' through banking channel within a period of 15 days and said transaction was a bona fide transaction and provisions of section 68 were not attracted - Whether on facts, Tribunal was justified in deleting addition made by Assessing Officer - Held, yes [In favour of assessee]” b. Judgment in the case of PCIT vs. Merrygold Gems (P.) Ltd. as reported in [2024] 164 taxmann.com 764 (Gujarat) dated 11.06.2024. INCOME TAX : Where amount of loan received by assessee was returned within same financial year, appellate authorities had rightly deleted addition made under section 68 in respect of such loan Section 68 of the Income-tax Act, 1961 - Cash credit (Scope of provision) - Assessment year 2016-17 - Assessing Officer made addition of certain & 359/Asr/2025 10 Assessment Year: 2018-19 amount to assessee's income on account of unsecured loan treading same as unexplained cash credit under section 68 - Whether since amount of loan received by assessee was returned within same financial year, appellate authorities had rightly deleted addition made by Assessing Officer - Held, yes [Paras 9 and 11] [In favour of assessee] Judgment of Hon’ble Gujarat High Court in the case of PCIT vs. c. Ambe Tradecorp (P.) Ltd. as reported in [2022] 145 taxmann.com 27 (Gujarat) dated 05.07.2022. INCOME TAX : Where assessee took loan from two parties and assessee had furnished requisite material showing identity of loan givers and that assessee was not beneficiary as loan was repaid in subsequent year, no addition under section 68 could be made on account of such loan Judgment of Hon’ble ITAT Ahemdabad Bench in the case of DCIT vs. d. Tripoli Management Pvt. Ltd. in vide order dated 01.08.2024. Judgment of Hon’ble ITAT Surat Bench in the case of Rajhans e. Construction (P.) Ltd. vs. ACIT as reported in [2022] 140 taxmann.com 370 (Surat-Trib.) dated 14.03.2022.”
8.1 The ld. AR further placed reliance upon the judgment of Agra Bench in the case of Income Tax Officer-1 Morena,vs. Shri Agrasen Logistics in the extract of the said order is as under:
& 359/Asr/2025 11 Assessment Year: 2018-19
“21. Another major fact which was ignored/ not appreciated by the AO is that in many cases loans were repaid by the assessee in the year itself or in subsequent year and the necessary details of the repayment of loan amounts were also submitted to the AO. The Hon’ble Gujarat High Court in the case of PCIT Vs Ojas Tarmake Pvt Ltd reported in 156 Taxmann.com 75 has observed as under: “Where appellant showed unsecured loans received during relevant assessment year and AO made addition on ground that appellant failed to discharge onus of liability as laid down under section 68, since amount of loan received by appellant was returned to loan party during year itself and all transactions were carried out through banking channels, impugned addition was to be deleted.”
The ld. AO without adverting to the documents filed went to observe that assessee did not produce any of the parties. On these reasoning he made the addition u/s. 68 of Rs. 4,22,00,000/-.
Thus it was stated that the source in the hands of the assessee stands proved.
11. On the other hand, the ld. DR argued and relied upon the order of the AO and further she relied upon the following judgment; i. M/s Sumit Global Pvt. Ltd. vs. ITO-1 Raigarh (C.G.) (TAXC No. 120 of 2024) (HC C.G.)
& 359/Asr/2025 12 Assessment Year: 2018-19 ii. Further she submitted that notice u/s 133(6) issued by the AO to the creditors were not complied with by all the parties, casts serious doubt on the genuineness of the credits. However, this lapse at the part of the assessee was not taken consideration by the ld. CIT(A).
We have heard the rival submissions and perused the relevant finding given in the impugned order as well as material referred to before us. The assessee had received unsecured loan from parties. The Assessing Officer at various places had stated that this fact whether the onus cast upon the assessee has been discharged or not and what the material has been brought on record by the Assessing Officer to dislodge the assessee’s explanation and the evidences. During the course of assessment proceedings, as stated above, the assessee has filed various documents to prove the identity, genuineness and creditworthiness of the parties like, confirmed copy of account, ITRs, audited financial statements where the amount invested has been duly disclosed in the balance sheet, documents filed. Further such loan has also been repaid through banking channel.
11.1 In view of above facts and in the circumstances of the case, we are of the considered view that our reasoning given and we hold that the unsecured loan of Rs.51,00,000/- (lakhs) received from the three persons which cannot be held to be non-genuine.
& 359/Asr/2025 13 Assessment Year: 2018-19 11.2 Thus, considering the above submission and various judgments of Hon’ble Courts and also the ITAT, Agra Bench in in the case of ITO vs. Shri Agrasen Logistics, order dated 24.06.2025. wherein, payments of loan have been made through banking channel and loan amounts has been repaid within year and the Ld. AO as well as CIT(A) has nowhere doubted the amount of repayment made by the assessee to the above said creditors, thus no addition is called for. The relevant para 27 to 31 are held as under:
“27. It is also relevant to state an amendment is made that vide Finance Act, 2022 wherein second proviso to section 68 is added, so as to provide that the nature and source of any sum, whether in the form of loan or borrowing, or any other liability credited in the books of an assessee shall be treated as explained only if the source of funds is also explained in the hands of the creditor or entry provider. However, this additional onus of proof of satisfactorily explaining the source in the hands of the creditor, would not apply if the creditor is a wellregulated entity, i.e., it is a Venture Capital Fund, Venture Capital Company registered with SEBI. This amendment has taken effect from 1st April, 2023 and accordingly applies in relation to the assessment year 2023- 24 and subsequent assessment years. The year before us is AY 2021-22 thus this amendment is not applicable and as has been held by the hon’ble Delhi High court in the case of Vrindavan farms (supra), when the assessee had filed all the details, the burden of proving the genuineness and creditworthiness of the creditor stood discharged by the assessee.
& 359/Asr/2025 14 Assessment Year: 2018-19
As observed above, the requirement of explaining ‘Source’ of ‘Source’ in respect of loans is applicable from A.Y. 2023-24 and subsequent years. Reliance in this regard is placed on Delhi ITAT decision dated 31/05/2022 in the case of M/s Mall Hotels Ltd. V. CIT (ITA No. 2688/DEL/2014). The Hon’ble Delhi Bench of ITAT in the case of ACIT v Smt. Prem Anand (ITA No. 3514/Del/2014) vide its decision dated 13.04.2017 has held that amendment made in section 68 of the Act w.e.f. 01.04.2013 empowers the A.O. to examine source of source in case of share application money / share capital / share premium from 01.04.2013 and this amendment does not give power to the A.O. to examine source of source of non-share capital cases.
Regarding surrounding circumstances, it is observed that while making addition u/s 68 of the Act, the AO has doubted the financial capacity of loan creditors but such addition cannot be made on preponderance of probability and there has to be some evidence and substance in contention. The Assessing Officer has not brought anything on record to establish that the sources in the hands of loan creditors is non-genuine. Merely because they have shown meagre income or no sufficient sources as presumed by Assessing Officer, loan taken by appellant from them cannot be held to be accommodation entries. It is wellsettled position of law that no matter how strong suspicion is, it cannot take place of the evidence. Therefore, in the absence of any evidence showing that in fact, appellant has given cash in lieu of unsecured loan taken, merely on the basis of suspicion, no addition can be made for which reliance is placed on decision of & 359/Asr/2025 15 Assessment Year: 2018-19 Hon'ble Supreme court in the case of Daulatram Rawatmull, (1964) 53 ITR 574.
In view of above facts and in the circumstances of the case, we are of the considered view that the decision of the Ld. CIT(A) as observed above, is not only based on the relevant documents which have been produced by the Assessee to establish identity and creditworthiness of the parties from whom the Assessee had taken the loans and genuineness of the transactions but also based on the legal precedents and the fact that the Assessee has taken the unsecured loan through banking channel and repaid the loan through banking channel itself and then only deleted the addition under consideration. We observe, as demonstrated by the Ld. Counsel of the Assessee that the Hon'ble Jurisdictional High Court in the case of Principal Commissioner of Income-tax v. Anshika Consultants (P.) Ltd (supra) has also dealt with the fact that where assessee has discharged its burden by filing all the necessary evidences to prove the loans, provisions of section 68 cannot be invoked. Further hon’ble Gujarat high court in the case of PCIT Vs. Ojas Tarmake Pvt. Ltd. (supra) has held that where major portion of the credit has been repaid during the year and the AO has accepted the debit entries as genuine, the Hon'ble court on the said facts ultimately affirmed the decision of the Tribunal in deleting the addition. Further the hon’ble Gujarat high court re-affirmed this view in the case of PCIT Vs. Merrygold Gems Pvt. Ltd. Similar view is also expressed by the hon’ble Punjab & Haryana high court in the case of CIT Vs. Karaj Singh (supra).
Regarding revenue’s alternate prayer of the remanding back the matter to the file of ld.CIT(A) or AO, as discussed & 359/Asr/2025 16 Assessment Year: 2018-19
above, the assessee has duly discharged the burden casted upon it and the AO has failed to make any enquiry if he had doubts about the genuineness of the evidences field thus if one more opportunity is given to the assessee, it would be gross injustice with the assessee. It is also a settled law that AO cannot be provided an opportunity to plug the loopholes and once a view is taken after appreciating the evidences available, it cannot be said that no proper opportunity was provided to AO. It is further seen that no new or fresh evidence was filed by the assessee before the ld. CIT(A) and all the details filed were already submitted before the AO. Thus, we find no force in this argument of the revenue.”
Accordingly, the addition of Rs.51,00,000/- (fifty one lakhs) was made u/s 68 as confirmed by the ld. CIT(A) is directed to be deleted.
In the result the appeal of the assessee is allowed.
I.T.A. No. 359/Asr/2025
This cross appeal is filed by the revenue against the part relief given by the ld. CIT(A) for unsecured loan taken from 4 parties out of total 7 parties. The grounds of the revenue are as under:
“(i) That on facts and circumstances of the case, Ld. CIT(A) has erred in deleting the additions in question without giving any specific findings on the issue. involved.
& 359/Asr/2025 17 Assessment Year: 2018-19
(ii) That on facts and circumstances of the case, Ld. CIT(A) has erred in deleting the additions in question without examining the genuineness and creditworthiness of the parties. (ⅲ) The appellant craves leave to add, alter or amend any/all of the ground of appeal before or during the course of the hearing of the appeal.”
14. The ld. CIT(A) has passed a detailed order and relied on a number of judicial precedents to extend relief. No infirmity is discernible thereof.
The ld. CIT DR has submitted a detailed synopsis, the relevant portion (page 3) is reproduced below: “The CIT(A) passed order u/s 250 on 04.03.2025, partly allowed relief to the assessee. However, certain significant deficiencies are apparent from the order passed: i. No Remand Report from AO: Despite serious issues raised and explicit discrepancies in explanation furnished were brought on record in the assessment order, the CIT(A) did not seek a remand report from the Assessing Officer before treating the transactions as genuine. This denied the AO an opportunity to present his comments and rebut the assessee’s claims. ii. Non-compliance of Notices u/s 133(6): Notices issued by the AO to the creditors were not complied with by the parties, namely M/s Jagshan Enterprises, Sh. Gian Prakash Singla, Ameja& Co., M/s RJT Wines and all of the parties did not file their response. Absence of compliance casts serious doubt on the genuineness of the credits. However, this lapse at the part of the assessee was not taken consideration by the CIT(A).
& 359/Asr/2025 18 Assessment Year: 2018-19 iii. Specific Findings of the AO: The Assessing Officer gave very specific findings when it concluded assessment proceeding such as: a. Jagshan Enterprises (PAN: AAJFJ2792F, Loan: Rs. 1,00,00,000/-) • Filed a loss return. • No genuine business activity. • No revenue from operations. • Advanced large loans despite having taken unsecured loans from others. • No interest income from the substantial loan given. b. Sh. Gian Prakash Singla (Loan: Rs.96,00,000/-) Filed ITR with income of only Rs.5,00,000/-. Questionable capacity to advance such a large unsecured loan. c. Ameja& Co. (Loan: Rs. 1,25,00,000/-) Declared income of only Rs. 16,08,610/-. Financial capacity disproportionate to the loan advanced. d. M/s RJT Wines (Loan: Rs.50,00,000/-) Declared income of Rs.6,76,080/-. Creditworthiness not established.
Lack of Financial Documents: Financial statements and bank account statements of all four parties were not furnished either by the assessee or the lenders before the AO. This fundamental evidence being absent, the transactions could not have been accepted as genuine.
5. From the above, it is clear that the assessee has not discharged the primary burden cast upon it under section 68 of the Act. The Hon’ble Supreme Court in NRA Iron & Steel Pvt. Ltd. has categorically held that the assessee must prove identity, capacity, and genuineness of the transaction by cogent evidence. The acceptance of such transactions by the CIT(A) without proper & 359/Asr/2025 19 Assessment Year: 2018-19
verification and giving an opportunity of Assessing Officer amounts to denying natural justice to revenue. Hence, it is requested that the order of the Ld. Assessing Officer may be restored.” 15.1 She has primarily harped upon submission of additional evidences however; we do not find to be acceptable since it is not articulated in grounds of appeal. Accordingly, there is no scope to interfere with the findings of the ld. CIT(A).
Hence the Department appeal is dismissed. 16. In the result, the appeal of the assessee is allowed and the revenue appeal is dismissed.