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Income Tax Appellate Tribunal, AGRA BENCH: AGRA
Before: SHRI A. D. JAIN, & DR. MITHA LAL MEENA
Fit For Publication Sd/- Sd/- A.M. J.M. IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH: AGRA BEFORE SHRI A. D. JAIN, JUDICIAL MEMBER, AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER
I.T.A No. 296/Agra/2016 (ASSESSMENT YEAR: 2011-12)
Navda Educational Trust Vs..ITO-4(3), 2, Sapan Bagh, Dayal Bagh, Agra. Agra. PANNo.AAATN8824D (Assessee) (Revenue)
I.T.A No. 264/Agra/2016 (ASSESSMENT YEAR 2011-12)
ITO (Exemption), Vs..Navda Educational Trust Agra. 2, Sapan Bagh, Dayal Bagh, Agra. PANNo.AAATN8824D (Revenue) (Assessee)
Assessee by Shri R.C. Tomar, AR./ (ITP) Revenue by Shri Waseem Arshad, Sr. DR.
Date of Hearing 23.08.2017 Date of Pronouncement 21.11.2017 ORDER PER, A. D. JAIN, JUDICIAL MEMBER:
These are Cross appeals for Assessment Year 2011-12. ITA No. 296/Agra/2016 has been filed by the assessee, whereas ITA No. 264/Agra/2016 has been preferred by the Department.
I.T.A Nos. 296 & 264/Agra/2016 2
ITA No. 296/Agra/2016 This is assessee’s appeal for A.Y. 2011-12 taking the following grounds: 2. “1. That the CIT(A) has erred on facts and in law to hold that the appellant did not file details of sundry creditors at the assessment stage.
That the learned C1T(A) has erred on facts and in law to deny the admission^ of additional supplementary evidence in support of the primary evidence produced at the assessment stage in respect of trade creditors of Rs. 19,90,604.00 under rule 46A of the Income Tax Rules produced before him which was subjected to remand report also.
That the A.O. has not made any objection about the admission of the evidence regarding trade creditors of Rs. 19,90,604.00 which goes to the root of the matter in the remand report and denial of admission of the same is illegal and is mere denial of justice.
That the CIT(A) has erred on facts and in law to sustain the addition of Rs. 19,90,604.00 which represent trade creditors and paid off subsequently.”
The facts are that the assessee is a Society engaged in Educational activities. During the assessment stage, the AO had observed that the Assessee Society was granted registration under section 12AA of the Act by Ld. CIT -2, Agra on 05.02.2014 w.e.f. from 01.04.2013. Since for the year under consideration
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registration u/s 12AA of the IT Act was not available to the Assessee Society, the AO assessed the assessee’s net surplus of income over expenditure of Rs.42,94,078/-. The AO had also added a sum of Rs.19,90,604/- towards unverifiable sundry creditors. Further, a sum of Rs.8,75,368/- was added by the AO as interest on advance of Rs.35,81,000/- at the rate of 12% per annum. Thus in the aforesaid manner, the AO had completed the assessment in the assessee's case at a total income of Rs.71,60,050/-. 4. While making the addition of Rs.19,90,604/-, the AO observed as follows: "During the course of assessment proceedings the assessee has not produced books of accounts. Vide order sheet entry dated 10.02.2014, the assessee was required to produce confirmation of sundry creditors along with complete address. The assessee has not furnished copy of account of sundry creditors, complete address. In absence of books of accounts and complete bills & vouchers, complete address and confirmation the sundry creditors for Rs. 28,64,504/-, the sundry creditors are not acceptable. During last year the assessee has shown sundry creditors for Rs. 8,73,900/- and this has been subtracted from Rs.28,64,504/- and the balance Rs. 19,90,604/- is being added to the income of the assessee."
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The ld. CIT(A) sustained the addition. 6. We have heard both the parties and have perused the relevant material on record. As available from the impugned order (Para 7.1), the assessee, vide written submissions dated 15.02.2016, contended before the ld. CIT(A) that the A.O. had made addition of Rs.19,90,604/- on the ground that the assessee had not furnished copy of account of sundry creditors and complete address and confirmation from the sundry creditors. The CIT (Appeal)’s attention was specifically drawn to the written submissions made before the A.O. vide letter dated 03.02.2014, whereby, the assessee had submitted the details of sundry trade creditors and other creditors along with their addresses and PAN Nos. Copy of the list of sundry creditors and other creditors along with their ledger account and reply dated 03.02.2014 produced were produced to support the assessee's submission. It was stated that the addition made by the A.O. was unwarranted and illegal, because the A.O. had not given the proper opportunity when he had himself mentioned that assessment was time barring; and that however, the list of sundry creditors along with their complete address was being submitted in order to prove the genuineness of sundry creditors, which may be admitted under Rule 46A of the IT Rules. 7. The AO filed the following remand report (impugned order page 17 para 7.2), dated 10.03.2016: “As regards to the addition of Rs.19,90,604/- made on the ground of non-verification of sundry creditors, I completely rely
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on the stand taken by the AO as despite affording ample opportunities to the appellant assessee, no relevant details or documents were filed nor any books of accounts were produced during the course of assessment proceedings in order to prove the genuineness of the sundry creditors. Therefore, in view of the said reasons, the addition may kindly be sustained and the ground of the appellant may be rejected.”
The assessee filed the following rejoinder (impugned order page 18B to 20A), dated 29.03.2016 to the AO’s remand report: "Disallowance of Rs, 19,90,604/- on account of sundry creditors.
The A.O. has made addition Rs.19,90,604/- on the ground that the assessee has not furnished copy of account of sundry creditors and complete address and confirmation.
Your honours kind attention is drawn to the written submissions made before the A.O. vide letter dated 03.02.2014 (copy enclosed) whereby the assessee has submitted the details of sundry creditors and other trade creditors along with their complete addresses. It was also requested that the same made kindly be admitted under rule 46A of the Act.
The copy of written submission along with the reply dated 03.02.2014 had been sent to the A.O. for his comments in the remand report. The A. O. has, however, not uttered a single word about, anything found contrary to the evidences placed on record by the assessee even in remand proceedings.
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He has not made any further enquiry and has not brought on record any adverse material against the submissions made by the Assessee in his remand report. At the cost of repetition, the sundry creditors are explained as under :-
Rs. 40632/- Amar Traders; as per copy of account the opening credit balance on 01.04.2010 was Rs. 140632/- and after making payment of Rs. 1,00,000/- vide cheque no. 686718 dated 24.03.2011 drawn on Karnatka Bank A/c No. 7301 the closing balance was drawn at Rs. 40,632/-. Since the payment has been made through the banking channel. There was no reason to disbelieve this creditors accounts by a general observation without any discussion.
Kirti Enterprises Rs. 4,71,250/-. The trade creditor is a cement dealer from whom cement to the tune of Rs. 4,71,250/- was purchased on different dates and the payment of Rs. 461000/- was made on different dates through cheque drawn on Karnatka Bank A/c No. 7301 as detailed in the copy of ledger account enclosed. Therefore, it is incorrect on the part of A.O. to disbelieve the closing balance of Rs. 10,250/- shown as outstanding.
Mahendra Singh Pachauri Rs. 199000/- . The complete address of the creditor has been given in the written reply dated 03.02.2014 as under:-
Mahendra Singh Pachauri r/o Bruj Atibal, Barhan, Agra. The opening balance was Rs. 199000/- and the same is the closing
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balance. Since no amount was taken during the year nor the A.O. has made any further enquiry, though the complete address was given, the addition of Rs. 199000/- for the opening balance brought forward from preceding year treating the sundry creditor as not genuine is illegal and arbitrary.
Mahindra Singh Pachauri Inter College Rs. 5,00,000/-. The trust has received Rs. 5,00,000/- on different dates from the said society. The complete address was given as also the purpose of loan amount of Rs. 5,00,000/- which was received to meet the margin money of term loan. His complete address was also furnished.
Mangal Traders Rs. 99230/-. As per copy of account of trade creditor enclosed, steel was purchase from him. The payment to the tune of Rs. 2,73,726/- out of the purchases made at Rs. 3,72,956/- has been made by cheque drawn on Karnataka Bank Account No. 7301 as per details given in the copy of ledger account. Since the payment have been made by cheque there was no reason to disbelieve the identity and the closing balance of Rs.99,230/- which remained outstanding as on the close of the accounting year after accepting the payments made during the year and disbelieving the closing balance.
Shital Steel Corporation Rs.70,742/-. Similar is the position in respect of Shital Steel Corp. where closing balance has been shown at Rs. 70,742/- from whom the purchase of iron was made and the payments on different dates were made. The total purchases were of Rs. 6,24,726/- and the payment by
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cheque was of Rs.5,53,994/- leaving the balance at Rs.70,742/- which has been shown as trade creditors.
Sikarwar Electricals Rs. 71868/-. Opening balance was Rs. 2,21,868/- and the payment of Rs.150000/- has been made on 31.07.2010 by cheque no. 694671 drawn on Karnataka Bank A/c No. 7301 and after that closing balance of Rs. 71,868/- has been drawn. Therefore, there was no justification to disbelieve the closing balance of said trade creditor.
Tyagi Ply Board Rs. 19930/-. Total purchases were made of Rs. 57,372/- out of which the payment of Rs. 37,422/- has been made by cheque and the closing balance has been drawn at Rs.19,930/-. Since the payment is made through banking channel there was no reason to disbelieve the closing balance of trade creditor i.e. accepting the credit & debit side and disbelieving the closing balance.
Upadhyay Cement Store Rs. 17,500/-. The total purchases of cement made during the year were of Rs. 3,37,500/- out of which Rs. 3,20,000/- has been paid by cheque and balance of Rs. 17,500/- represent closing balance. On strength of the copy of ledger account when the payments are made through banking channel there was no reason to disbelieve the said trade creditors account.
Smt Munni Devi as per copy of ledger account the opening balance was of Rs. 48,000/- and the land for Rs. 1,50,000/- was purchased from her. Out of the total outstanding amount of Rs.
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2,46,000/-, payment of Rs. 48,000/- has been made. She is assessed to tax at PAN No. AICPD8829L. The complete address and PAN no. and the purpose of land purchased was given to A.O. vide reply dated 03.02.2014. Hence the amount of credit balance disbelieve by the A.O. is arbitrary.
Navda Developers Rs. 5,60,400/-. Total purchases made from him was of gitti, brick and chambal sand. The copy of ledger account was furnished before the A.O. along with complete address. The A.O. has even in remand proceedings made no further enquiry to support his contention that the said creditor is un-genuine. The creditor is assessed to tax at PAN No. AICPD8229L.
PurushottamTyagi Rs.1,36,400/- represent the balance brought forward from the preceding year. His complete address and PAN No. ACMPT6699Q was given to A.O. Since it is an opening balance no addition is legally warranted that too by a generalized view without bring any adverse material on record."
The ld. CIT(A) confirmed the addition by holding as follows: “7.4 I have considered the facts of the case, the written submission filed by the Ld, AR for the appellant and perused the order passed by the AO. Besides, the remand report of the AO and rejoinder on same as submitted by the Ld. AR of assessee, have also been considered. While going through the order of the AO and the remand report on assessee's submissions as submitted by the AO, it is clear that the appellant at the assessment stage,
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did not file any details of sundry creditors. Now in the rejoinder submissions has improved its facts by filing additional details / evidences. However, such details of assessee trust cannot be entertained.
7.5 Firstly, rejoinder submission on the issue has to be rejected for the reason that the assessee cannot be allowed to keep its improving on fact from to time and that too at appellate stage. Secondly any application for admission of additional evidence has to be supported by reasons for which the appellant could not produce such evidence before the AO during assessment proceedings. I have already held that assessment under section 144 is justified. The appellant has though requested for admission of additional evidence, but no reasons have assigned for not producing such evidence before the AO. The rejoinder has been submitted after receipt of remand report from the AO with further request of admission of additional evidence. I find that it is not permissible under law. The AO has been effectively denied opportunity of examination of evidence and find the genuineness thereof. I therefore, have no option, but to refuse the evidence submitted by the appellant and dismiss the relevant ground of appeal.”
The assessee contends that it had furnished written submissions dated 03.02.2014 (supra) (APB 37-44) before the AO in compliance to notice (APB 34- 35) issued u/s 142(1) of the IT Act, dated 31.08.2012, query no. 14. Attention has
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been drawn to APB page 41, i.e., the details of the sundry creditors as furnished to the AO. 11. The ld. DR has drawn attention to APB page 39 and 40, where expenses shown of more than Rs.20,000/- about construction of building have been tabulated. It is contended that no details of suppliers of building material were provided by the assessee and so, the addition was correctly confirmed by the CIT(A), as this expenditure was not verifiable. In this regard, it is seen that the details at pages 39 and 40 of the Assessee’s Paper Book are in response to query no. 12 (APB 34-35) contained in the questionnaire (supra) dated 31.08.2012 issued to the assessee by the AO. This query is not regarding the issue at hand, i.e., sundry creditors. It is regarding the addition in fixed assets made during the year. 12. So far as regards sundry creditors, the assessee had filed the aforesaid written submissions dated 03.02.2014 before the AO in response to query no. 14 contained in the questionnaire (supra). The factum of the assessee having filed such written submissions before the AO stands, as contended, accepted by the AO when in the first para at page 4 of the assessment order, it has been observed that ‘the facts have been considered alongwith the written submission of the assessee’. 13. The assessee filed the very same written submissions dated 03.02.2014 before the ld. CIT(A) also. The assessee also requested for admission of the evidence furnished alongwith the said written submissions, as additional evidence.
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The ld. CIT(A) asked for a remand report from the AO. The AO, in the remand report, made no comment on these details of sundry creditors, as furnished by the assessee before the AO, as well as before the ld. CIT(A). 15. The ld. CIT(A), it is seen, has erred in rejecting these details without carrying out/ getting carried out necessary verification of the sundry creditors, wrongly observing that the assessee did not file any details of sundry creditors at the assessment stage; that the details were filed only in rejoinder to the remand report, with a request for admitting them as additional evidence, without giving any reason for not having furnished the details before the AO; and that the assessee had thereby improved its case by filing additional details/evidence, which was impermissible. Remarkably, by way of Ground No. 1 before the ld. CIT(A), the assessee had specifically apprised the ld. CIT(A) of the AO’s acceptance of the fact that the assessee had filed its written submission before the AO. 16. Since the factum of the assessee having filed the details of sundry creditors by way of written submissions (supra) dated 03.02.2014 before the AO stands accepted by the AO himself, there is no question of the assessee having improved its case at the stage of rejoinder to the AO’s remand report. The ld. CIT(A) has clearly gone wrong in rejecting such details at the threshold without verifying/getting verified the same. The AO at the first instance, had erred in not verifying these details before making the addition.
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This issue is, thus, remitted to the AO for deciding it afresh in accordance with law, on making necessary verification of the sundry creditors as claimed by the assessee. The assessee shall be afforded adequate opportunity of hearing by the AO. All pleas available under the law shall remain so available to the assessee. The assessee shall, no doubt, co-operate in the fresh proceedings before the AO. Ordered accordingly. I.T.A No. 264/Agra/2016
This is Department’s appeal for A.Y. 2011-12, taking the following grounds: 18. “1. The Ld. CIT(Appeals) has erred in law and on facts in deleting the addition made as surplus of Income over Expenditure ignoring the fact that the amended proviso to section 12A(2) inserted by the Finance (No. 2) Act. 2014 w.e.f. 01-10-2014 to be construed as retrospective in the cases where registration has been granted on 01.10.2014 or after this date and assessment proceedings be pending.
The Ld. CIT(Appeals) has erred in law and on facts in deleting the addition made as surplus of Income over Expenditure ignoring the fact that the original application dated 21.09.2011 for grant of registration u/s 12AA was rejected by the Ld. Chief CIT (OSD), Agra vide her order dated 26.03.2012 and the benefits as laid
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down in the first and second proviso of section 12A(2) of the Act cannot be extended to the assessee trust.
The Ld. CIT(Appeals) has erred in law and on facts in deleting the addition of Rs. 8,75,368/- ignoring the fact that despite giving ample opportunities to the appellant assessee, no relevant details or documents were filed nor any books of accounts were produced during the course of entire proceedings.
The Ld. CIT(Appeals) has erred in law and on facts in deleting the addition of Rs. 8,75,368/- ignoring the fact that one of the reasons for rejection of original application dated 21.09.2011 for grant of registration u/s 12AA vide rejection order u/s 12AA dated 26.03.2012 was that the funds of the trust were given on loan/advances in violation of section 13(1)(d)(1) read with section 11(5) of the Act.”
Apropos Ground Nos. 1 & 2, the assessee Society, which is engaged in Educational activities, claimed excess of income over expenditure, amounting to Rs.42,94,078/-, as exempt under sections 11 & 12 of the I.T. Act. The AO observed that the assessee was allowed registration u/s 12AA of the Act vide order dated 05.04.2013; that as such, it did not enjoy registration for A.Y. 2011-12, i.e., the year under consideration; and that therefore, the claim for exemption under sections 11 & 12 of the Act was not allowable. The ld. CIT(A) allowed the exemption claimed.
I.T.A Nos. 296 & 264/Agra/2016 15
The ld. DR states that the Ld. CIT(Appeals) has erred in law and on facts in deleting the addition made as surplus of Income over Expenditure, ignoring the fact that the amended proviso to section 12A(2) inserted by the Finance (No.2) Act, 2014, w.e.f. 01-10-2014 is to be construed as retrospective in the cases where registration has been granted on 01.10.2014 or after this date and assessment proceedings be pending; that the Ld. CIT(Appeals) has ignored the fact that the original application dated 21.09.2011 for grant of registration u/s 12AA was rejected by the Ld. Chief CIT (OSD), Agra vide her order dated 26.03.2012 and the benefits as laid down in the first and second provisos of section 12A(2) of the Act cannot be extended to the assessee trust.
The ld. Counsel for the assessee has relied on the impugned order. 22. We have heard the parties and have perused the material on record. The ld. CIT(A) has observed as follows: “6.9 Thus, irrespective of the fact that registration u/s 12AA of the Act has been granted on 05.02.2014 with effect from 01.04.2013, the fact of the matter is that as on date of assessment the assessee's trust application for registration u/s 12AA was pending, as the Hon'ble ITAT restored back the matter of granting registration to the Ld. CIT, who in turn vide her order dated 05.02.2014 granted the registration to the assessee (appellant) w.e.f. 01.04.2013. In the process of grant of
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registration, the shortfall if any was made good by the appellant trust by suitably amending its objects before the Ld CIT-II, Agra. Thus, in view of the amended provisions, in my considered opinion, the AO ought to have completed the pending assessment by granting benefit of section 11 and 12 of the Act. Therefore, the objection of the AO in remand report that this is case of rejection of registration u/s 12A of the Act and thus proviso to section 12A of the Act will not be applicable, is not on any sound footing. Since the Ld.CIT herself allowed registration u/s 12AA on the same application as filed earlier and no new application has been filed, therefore the proviso to section 12A is clearly applicable in this case. In the case before Hon'ble ITAT, Kolkata in the case of Sree Sree Ramkrishna Samiti, Siliguri vs. DCIT pertained to assessment years 2004-05, 2005-06, 2006-07 and 2007-08 and the registration under section 12AA was granted to the appellant therein on 29.02.2010 w.e.f. 01.04.2010. The cases for assessment years under appeal were re-opened under section 148 by issuing notice on 30.03.2010 and were completed without granting benefit of section 11. The Hon’ble ITAT, Kolkata Benches, Kolkata on analysis of amendments brought by Finance (No. 2) Act, 2014 had held that grant of registration under section 12AA would have retrospective effect. Thus, while analyzing the amendments brought by Finance (No.2) Act, 2014 and
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respectfully following the decision of ITAT, Kolkata, it is held that the income of assessee is to be computed in the manner provided by section to 13 of the Act and in said view of matter, the assessee was having gross receipt of Rs. 1,22,02,921/- and having surplus of Rs.42,94,077/- had also applied Rs.59,17,114/- towards acquisition of fixed assets and thus whole of surplus has been applied for its objects and purposes. Accordingly, in view of the aforesaid, the addition of Rs.42,94,077/- as made by the AO cannot be sustained, and the same is therefore deleted. As a result, the Ground Nos. 2, 3, 4 & 5 of assessee are allowed.”
The amendment to section 12AA of the IT Act, by way of introducing the first proviso in section 12A(2) by the Finance (No.2) Act 2014, has been held to be retrospective by the Kolkata ITAT in the case of ‘Sree Sree Ramkrishna Samiti, Siliguri vs. DCIT’ (supra). It is this decision which the CIT(A) has followed and, in our considered opinion, correctly so. No decision to the contrary has been cited before us. The assessee was granted registration w.e.f. 01.04.2013. As per the said proviso to section 12A(2), in such a case, the provisions of section 11 and 12 of the Act shall apply in respect of any income derived from property held under the trust of any assessment year preceding the assessment year immediately following the financial year in which the application for registration is made (on or after 01.06.2007), for which, assessment proceedings are pending before the AO as on
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the date of registration and the objects and activities of the trust remain the same for such preceding assessment year. In the assessee’s case, though the application for registration was initially 24. rejected, the Tribunal restored the matter to the ld. CIT, vide order dated 05.02.2014. The CIT granted registration by allowing that very application. It is also undisputed that the objects and activities, which are educational in nature, remain unchanged. As such, the aforesaid proviso to section 12A(2) is squarely applicable. Therefore, as rightly held by the ld. CIT(A), the AO should have granted the benefit of sections 11 and 12 of the Act to the assessee. 25. In view of the above, finding no merit in the grievance raised by the Department, the same is rejected and the impugned order on this issue is upheld. 26. Regarding Ground Nos. 3 and 4, the AO, while making the addition of Rs.8,75,368/- on account of deemed interest on advances of Rs.35,81,000/- observed that: "During the year, the assessee has shown advances in the balance sheet, given for Rs.35,81,000/- but in the income and expenditure account assessee has not shown any interest income. Vide order sheet entry dated 10.02.2014, the assessee was required to furnish details of interest regarding advances given for Rs.35,81,000/- and Rs.37,13,740/-. The assessee has not submitted any reply. Therefore, for total advances Rs.72,94,740/- interest
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@12% per is calculated which comes to Rs.8,75,368/-. The amount Rs.8,75,368/- is income of the assessee which has not been shown by the assessee. Therefore, an amount of Rs.8,75,368/-is being added to the income of the assessee."
The ld. CIT(A) deleted the addition observing that there was no payment of interest; that there was nothing brought on record by the AO that interest on advances as a matter of fact had been earned by the assessee; that the interest could not have been earned on hypothetical terms and income which can be assessed under the Act should be real income which has been received by or accrued to the assessee or deemed to have been received by or accrued to the assessee. The CIT(A) relied on ‘CIT vs. Shoorji Vallabhdas’, reported as 46 ITR 144 (SC), wherein it was held that:
"Income-tax is levy on income. No doubt, the Income-tax Act takes into account two points of time at which the liability to tax is attracted, viz., the accrual of the income or its receipt; but the substance of the matter is the income. If income does not result at all, there cannot be a tax, even though in book- keeping, an entry is made about a "hypothetical income", which does not materialize. Where income has, in fact, been received and is subsequently given up in such circumstances that it remains the income of the recipient, even though given up, the tax may be payable. Where, however, the income can be said not to have resulted at all, there is obviously neither accrual
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nor receipt of income, even though an entry to that effect might, in certain circumstances, have been made in the books of account."
The CIT(A) further held that since the assessee had not debited any
expenditure on account of interest in the Income & Expenditure Account, no
addition for deemed interest could be made, unless it was proved that the assessee
had earned any interest on deposits; and that therefore, the addition made by the
AO for making addition on account of deemed interest without bringing any
material on record that the assessee had earned any interest on advances could not
be sustained.
The ld. DR has contended that the ld. CIT(A) has erred in law and on facts
in deleting the addition of Rs.8,75,368/-, ignoring the fact that despite giving
ample opportunities to the assessee, no relevant details or documents were filed,
nor any books of account were produced during the course of the entire
proceedings; and that the ld. CIT(A) has also erred in ignoring the fact that one of
the reasons for rejection of original application dated 21.09.2011 for grant of
registration u/s 12AA vide rejection order u/s 12AA dated 26.03.2012 was that the
funds of the trust were given on loan/advances in violation of section 13(1)(d)(1)
read with section 11(5) of the Act.
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The ld. Counsel for the assessee has, again, placed strong reliance on the impugned order. 31. Since the AO did not bring anything on record to establish that the assessee had actually earned interest on the advances made, the ld. CIT(A) has, while deleting the addition, rightly relied on ‘CIT vs. Shoorji Vallabhadas’, 46 ITR 144 (SC), wherein, it has been held that if income does not result at all, there cannot be a tax, even though in book keeping, an entry is made about a hypothetical income which does not materialize; and that where the income cannot be said to have resulted at all, there is, obviously, neither accrual, nor receipt of income, even though an entry to that effect might have been made in the books of account. Accordingly, on this issue also, the Department’s grievance has no legs to 32. stand on and it is rejected. The impugned order on this issue is confirmed as well. In the result, the assessee’s appeal is treated as allowed for statistical 33. purposes, whereas the Department’s appeal is dismissed. Order pronounced in the open court on 21/11/2017.
Sd/- Sd/-
(DR. MITHA LAL MEENA) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 21/11/2017 *AKV* Copy forwarded to:
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Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT AGRA