DCIT, CENTRAL CIRCLE-8, NEW DELHI vs. BHAIJEE COMMODITIES PVT. LTD., DELHI

The Grounds of Appeal raised by the assessee read as under:

The prayer for admission of additional grounds noted above which are not set forth in memorandum of appeal are being admitted for adjudication in terms of Rule 11 of Income Tax (Appellate Tribunal) Rules, 1963 owing to the fact that objections raised in additional grounds are legal in nature for which relevant facts are stated to be emanating from existing records.

Aggrieved, the assessee preferred appeal before the CIT(A). Before the CIT(A), the assessee challenged the action of the Assessing Officer both on (a) lack of jurisdiction under S. 147 of the Act as well as (b) lack of merits in additions carried out by the AO. The CIT(A) did not see any merit in the challenge to jurisdiction assumed by the AO under S. 147 of the Act and endorsed the assumption of jurisdiction for reassessment of income. However, on appraisal of facts on merits, the CIT(A) granted partial relief to the extent of Rs.1,50,00,000/- out of additions of Rs.2 crores made under Section 68 in respect of share capital subscribed by various parties. Thus, on merits, the CIT(A) sustained the additions to the extent of Rs.50 lakh under section 68 on account of subscription of share in relation to one of the parties namely; ‘Shalini Holdings Pvt. Ltd.’ on the premise that this subscriber co. is a shell co. engaged in providing accommodation entries and is found to be controlled and operated by one Shri S.K. Jain Group as alleged by the Investigation Wing of the deptt. pursuant to search conducted on S K Jain group. The additions of Rs.50 lakh on account share subscription by Shalini Holding was thus confirmed by the CIT(A) while other subscription by other 3 parties were found to be boanfide and thus additions for remaining amount of Rs. 1.5 cr. was cancelled. Similarly, the CIT(A) declined to interfere with the additions of Rs.2,35,49,859/- made by the Assessing Officer on account of fictitious gains from transactions carried out on NMCE [National Multi Commodity Exchange] platform. The CIT(A) upheld the additions made by the Assessing Officer alleging indulgence in tax evasion practices by the assessee by claiming fictitious profits/losses by using NMCE platform. The CIT(A) also declined to interfere with the additions made amounting to Rs.14,12,991/- by the Assessing Officer alleging unexplained expenditure on account of commission paid to indulge in obtaining fictitious profits by misusing NMCE platform.

As noted above, the assessee has inter alia challenged the jurisdiction of the Assessing Officer assumed under Section 147 rws s.148 rws 151 of the Act. Since, the challenge to the legality of reopening being jurisdictional one and goes to the root of the whole controversy, it will be appropriate to adjudicate this aspect of the appeal first.

The reasons recorded under Section 148(2) of the Act being germane to the adjudication of jurisdictional issue, are reproduced hereunder: “Reasons recorded for initiating proceedings u/s 148 of the I.T. Act, 1961 In the case of M/s Bhaijee Commodities Pvt Ltd (PAN : AAAC8890S6)- A.Y. 2010-11 Information had been received from DIT(Inv.)-II, New Delhi vide letter F.No DIT(Inv.)-II/U/sl48/2012-13/198 date/l2.03.2013 & also from the DDIT(Inv.), Unit-VI(2), New Delhi vide letter F.No.DDIT(Inv.)/ U-VI(2)) / information sharing / 2012-13/ 133 dated 22.03.2013 that a search & survey action was conducted by the investigation wing, Delhi the case of Shri Surendra Kumar Jain (S K Jain) on 14.09.2010. It was gathered that Shri Surendra Kumar Jain and his brother Sh. Virendra Jain were engaged in the business of providing accommodation entries by providing RTGS/Cheques/PO/DD in lieu of cash, to a large number of beneficiary companies through various paper and dummy companies floated controlled by them. 2. Further, it has been revealed from the aforesaid information /details that M/s. Bhaijee Commodities Pvt. Ltd has received accommodation entries in the form of share

Based on the Forward Market Commission (FMC) report that ''clients/members of NMCE were found to be involved in creating artificial volume and suspected evasion of Income Tax by misuse of NMCE platform", a focused survey action u/s 133A of the Income Tax Act, 1961 was conducted by Pf. Director of Income Tax (Inv.),' Ahmedabad at the premises of NMCE and backup of the NMCE trade was taken. The information in the database was perused and analyzed and a list of 85 suspicious parties was generated. After analysis, most of the companies In the said list were found to be shell companies and were not filing Returns of Income and some who filed UR, did not claim loss from the transactions as mentioned above in their return of income. On detailed analysis, it was established that the brokers have misused NMCE platform and created non genuine losses and profit which were given to different clients/beneficiaries according to their requirement.

As per the information, M/s Bhaijee Portfolio Ltd. (PAN No. AACCB9390H) was found to have indulged in getting/obtaining fictitious profit/loss entries through NMCE platform available with brokers during the F.Y. 2009-10. The details of such transactions are as under:- PAN of Name of Whether Name of Sub Amount in Beneficiary Beneficiary fictitious Broker Rs. Client Client Profit or Loss AAACB8905G Bhaijee Profit Advent 11,79,079 Commodities Commodities Pvt. Ltd AAACB8905G Bhaijee Profit Fairdeal 1,32,81,789/- Commodities Vincom Pvt Pvt. Ltd AAACB8905G Bhaijee Profit Gulistan Vaniya 2,96,750/- Commodities Pvt. Ltd AAACB8905G Bhaijee Profit Gubert 17,37,000/- Commodities Merchant Pvt. Ltd AAACB8905G Bhaijee Profit Hemant Saraogi 49,57,554/- Commodities Pvt. Ltd AAACB8905G Bhaijee Profit Manobir 10,22,850/- Commodities Synthetic Pvt. Ltd AAACB8905G Bhaijee Profit Rupam Traders 8,22,700/- Commodities Pvt. Ltd AAACB8905G Bhaijee Profit Yashwi 2,52,137/- Commodities commodities Pvt. Ltd Pvt. Ltd. Total 2,35,49,853/- 7. On perusal of the above table, it appears that M/s Bhaijee Commodities Pvt. Ltd. made use of non-genuine NMCE transactions to book contrived gains. The total amount of transactions in the form of fictitious gains involves Rs. 2,35,49,859/-. On perusal of the ITR of M/s. Bhaijee Commodities Pvt., it is observed that the profit so earned has not been reflected by the assesses company. At the same time, as per prevalent market practice, payment of commission ranging from 3% to 6%, amounting to Rs. 14,12,991/- (Rs. 2,35,49,859/- @ 6%) were also made by assessee outside its books of accounts which needs to be brought to tax.

I have carefully perused and analyzed the facts of the case as detailed above and the following facts emerge from the same:- (i) Particulars of parties are found recorded in the information received from investigation unit, from whom the assessee company has received fictitious gain/loss (ii) Perusal of the information in table, it clearly shows that the name- of the assesses company M/s. Bhaijee Portfolio Ltd. appears as beneficiary who were provided fictitious profits/loss entries from various parties by misusing the NMCE platform. On perusal of the assessment records, it appears that the assesses company has not disclosed any expense on account of commission paid for obtaining fictitious gain/loss from the transactions carried out through NMCE platform.

From the above discussion, it is evident that the undisclosed income amounting to Rs. 50,00,000/- in this case has been introduced by Shri SK Jain Group of companies in the form of share capital/premium/loan and assessee company has also obtained fictitious entries of profits amounting to Rs. 2,35,49,859/- to cover unaccounted income and reduce tax Instance from the transactions carried out through NMCE platform and in the process has also Incurred-commission expenses amounting to Rs.14,12,991/- outside its books of accounts. The assessee has, thus failed to disclose fully & truly all material facts necessary for assessment. Therefore, after consideration the information received and facts of the case, I have reason to believe that income chargeable to tax to the tune of Rs.2,99,62,850/- has escaped assessment by reason of failure on the part of the assessee to disclose ail material facts fully and truly which requires to be now brought for taxation by invoking the provisions of section 147 of the Income tax act, 1961.”

In response to the notice issued under Section 148(1) proposing reopening of the assessment, the assessee denied any escapement of income and filed objection dated 02.05.2017 before the Assessing Officer in this regard. The Assessee also called upon the AO to supply the basis or material for escapement alleged in the reasons recorded. The Assessing Officer, in turn, disposed of the objection vide order dated 28.07.2017 and observed that the jurisdiction under Section 147 has been rightly assumed by the Assessing Officer to assess the income escaped assessment. The CIT(A) also found merit in the assumption of jurisdiction in the first appeal.

The contentions of the Assessee on lack of jurisdiction under s. 147 are broadly outlined hereunder; (i) The reasons recorded would make it evidently clear that the Assessing Officer has acted in a mechanical manner and without application of mind and without objectively ascertaining the facts before recording the reasons towards alleged escapement. The assessment has been reopened on the basis of borrowed satisfaction without independent application of mind and thus consequential action and proceedings are illegal and bad in law. On facts, all the commodities transactions mentioned in the reasons were duly recorded in the books of account and the profits arising thereon has been duly incorporated in the taxable income and there was no failure on the part of the assessee to disclose all material facts. Similarly, no reference to any adverse material is placed on record to suspect the propriety of share capital issued at par to Shalini Holdings’. Placing reliance on the judgment rendered in the case of Pr. CIT vs. RMG Polyvinyl (I) Ltd. 396 ITR 5 (del.), the Ld. Counsel contended that in the absence of any tangible material whatsoever brought on record, reopening an assessment based on unsupported and generalized information of investigating wing per se is wholly arbitrary exercise of powers and thus untenable. The information provided by the investigation wing to the AO itself is delightfully vague and non-descript and not backed by any tangible material detected in the course of search or at any other stage of enquiry. The modus operandi narrated in the case of S. K, Jain group would not give rise to any prima facie belief towards escapement in the hands of assessee. Such assertions made in the report of investigation wing would at best give rise a reason to initiate enquiries to ascertain the correctness of suspicion which is wholly distinct from the pre-eminent expression ‘reason to believe’. The ‘reason to believe’ is the fulcrum for exercise of powers under s. 147 of the Act. The ‘believe’ fostered, although subjective in nature, must trigger from reasons which are objective in nature and need to be based on something tangible and substantive. The belief on escapement thus could not have been made in the instant case in the absence of any objective material.

We shall address ourselves with the main objections raised on account of assumption of jurisdiction under Section 147 of the Act without satisfying conditions of Section the Act.

As further contended, not only the reasons recorded by the Assessing Officer are devoid of ‘reason to believe’ and are without application of mind, the approval of PCIT under s. 151 suffers from non application of mind for yet another reason. As per the approval memo presented by the AO before PCIT for his approval, the Assessing Officer stated that scope of exercise of powers under S. 147 by him is to be adjudged with reference to ‘clause (b) to Explanation 2 of Section 147’ of the Act. As a corollary, other part of S. 147 stood excluded for the purposes of his approval. As further adverted, Explanation-2 merely explains the chargeable income ‘deemed to have escaped assessment’ and once a resort to Explanation-2 to Section 147 has been taken for the purposes of approval in exclusion to other part of the provision of Section 147, it would imply that the requirement of holding ‘reason to believe’ has been dispensed with by the AO and what has been supported is ‘escapement of income’ alone. The satisfaction drawn and approval accorded by the Pr.CIT is thus restricted to clause (b) to Explanation-2 of Section 147 of the Act only. The approval sought and granted on such narrow compass manifests the action of approval to be an illusory exercise and an idle formality. A reference was made to the judgment of the Hon’ble High Court in the case of Kalpana Shantilal Hariya vs. ACIT W.P no. 3063/ 2017 (Bom.).

On the basis of aforesaid contentions and submissions, the ld. counsel in essence contends that the reasons recorded under Section 148(2) are (a) vague and nondescript (b) no reference to any material to support the generalized allegations (c) the most basic details like transactions giving rise to fictitious gains in commodity transactions alleged not available at the time of reopening(d) no reference to incriminating document or tangible material to corroborate the alleged lack of bonafides in the subscription by Shalini Holdings except an investigation report, which in turn, do not make reference to any documents and is of inferential nature (e) notwithstanding, the information/material if any, never supplied to the assessee despite specific request (f) grossly incorrect repeated reference towards allegation of fictitious profits through NMCE platform attributable to a different assessee namely ‘Bhaijee Portfolio Ltd.’ (g) all transactions carried on the NMCE platform duly incorporated in the return ignored (h) the reasons recorded by the Assessing Officer clearly on borrowed satisfaction of the other officer of the Department and proceeded on dotted lines without the availability of so called material in possession of the Assessing Officer and no analysis of material if any and without confronting the same to the assessee and thus the belief held is pretense (h) the assessment has been reopened on hypothesis and wrong inferences (i) the approval granted by the Pr.CIT under Section 151 is mechanical and perfunctory and without application of mind for multiple reasons namely, the name of other entity mentioned for commodity transaction and scope of approval for reopening was confined by AO to Explanation 2 to Section 147 and consequent approval thus does not travel beyond existence of allegation of escapement. To put it differently, the approval given is not qua other mandatory pre-conditions inbuilt in the provisions of s. 147 of the Act.

The assessee thus contends that for multiple reasons on standalone and cumulative basis, the reopening under Section 147 of the Act does not meet the requirement of law at all and thus jurisdiction usurped under Section 147 is apparently without sanction of law.

To support the additional ground, the Assessee contends that the entire edifice for initiation of proceedings under Section 147 is certain information collected by the Department through its Investigation Units. The Assessing Officer has formed the belief towards escapement of income on the basis of communication received from the Investigation Wing of the Department. Therefore, where pursuant to search in the case of third party giving rise to material pertaining to the Assessee and where the provisions of Section 153A of the Act were initiated in the case of third party, i.e., S.K. Jain Group, the only course of action available to the AO was resort to S. 153C and the provisions of S. 147 stood ousted in the present case. The proceedings, if any, can lie in the case of the assessee under Section 153C alone in exclusion to Section 147 of the Act. The whole proceedings under Section 147 is void ab initio and bad in law in the light of several judgment of the Co-ordinate Bench listed hereunder:

Per contra, the revenue seeks to plead that the Assessing Officer in the present case has fully satisfied the conditions of Section 147 independent of Section 153C of the Act. The revenue contends that in a case where the satisfaction by the AO of the searched person has not been recorded under Section 153C, the AO of the Assessee cannot be prevented to exercise powers conferred under section 147 of the Act to assess the escaped income. It was further contended that assumption of jurisdiction under Section 153C is dependent upon its own set of pre-requisites and Assessing Officer cannot be faulted for assumption of jurisdiction under Section 147 in the absence of any statutory dictate adverse to exercise of wide powers under s. 147 which is coupled with duty.

On merits, the assessee contends that in the remand proceedings, the Assessing Officer as per the remand report dated 4th July, 2019 has clearly made an averment to the effect that the shareholder company namely ‘Shalini Holdings Pvt. Ltd. [now known as Alstone Textiles (India) Ltd.] has provided documentary evidences in support of purchase of shares of the assessee company. The bank statement of shareholder company shows that the shareholder company has made payment of Rs.50 lakh through banking channel on 06.04.2009. Copy of ITR along with balance sheet was also obtained by the Assessing Officer and submitted before the CIT(A) in the remand proceedings. The subscriber gas also confirmed the subscription. The assessee thus contends that on the face of tell-tale evidences and in the absence of any incriminating material shown against the assessee except bald information from DDIT(Inv.), the addition could not be made and sustained under Section 68 merely on the basis of baseless perception and conjectures. The ld. counsel also contends that the assessee has issued share capital to several companies at the same price.

As regards the profits / losses arising on commodity transactions carried through registered brokers NMCE platform, the assessee submits that all the transactions have been duly reported and the profits arising thereon has been fully accounted and included as part of chargeable income and thus it fails to understand as to how the escapement of such income from taxation has taken place. The AO has proceeded against the assessee on the factually incorrect allegation and data of other entity i.e Bhajee Portfolio. The Assessing Officer has rather not provided any details of alleged unaccounted fictitious profits to enable the assessee to corroborate its assertions of full disclosure.

It goes without saying that the reasons recorded are the manifestation of mind of Assessing officer. It is the tool for judging the validity of order under challenge. It gives opportunity to the appellate forums and Courts to objectively see whether or not the AO has proceeded on the relevant material and evidence while invoking drastic provisions of S. 147. It is no longer res integra that the evaluation of correctness of assumption of jurisdiction is confined to recorded reasons only. Expression ‘Reason to believe’ is the most salutary safeguard to prevent arbitrary exercise of power and source of jurisdiction arises to belief towards escapement of chargeable income on the basis of reasons i.e. relevant material. The material before the AO should be such which outweighs the doubtful circumstances. S. 147 being substantive provision which bestows jurisdiction to back assess the return of earlier years, strict compliance of the conditions mentioned therein are required to be observed before resorting to the section. The courts have not been permitting reopening on irrelevant or extraneous material. Also, the information gathered per se does not tantamount to realization or belief therein. The information received may however give birth to realization. Furthermore, standalone information per se does not ipso facto tantamount to evidence. While information in the possession of AO cannot be subjected to sufficiency test but however relevancy test can not be wished away. It is also trite that the reopening of assessment is not automatic on receipt of some unsubstantiated information from other officer of the deptt. The ‘information’ received per se can not be regarded as ‘belief’. It can possibly give birth to requisite belief. Thus, it was incumbent upon Assessing Officer to test the material himself and apply his own mind to the material, if any, which has given rise to alleged information from DIT(Inv.). He is required to form his independent reason to believe on escapement. It is well settled that the formation of belief is a statutory function which can not be relegated. Also, the formation of belief being statutory power can not be exercised without application of mind. Various Courts have also consistently observed that the ‘belief’ of AO must be induced by reasons and a mere belief in existence of reasons or to say, contents of reasons does not provides source of power for exercise of jurisdiction.

In the absence of material, the alleged information from other officer of the deptt. has to be reckoned as abstract, bald and bare one and thus has no rational probative value and could be acted upon by the AO under law. The AO is duty bound to test the alleged information himself in the light of relevant material and weigh the credibility of information and consequently disclose his ‘process of reasoning’ to arrive at the ‘reason to belief’ contemplated under S. 147. The appraisal of the material needs to be carried out by the AO and none other. The process of holding ‘reason to belief’ being justiciable and open to judicial review, the reference to material relied upon while holding requisite belief of escapement of chargeable income is a sin qua non. It is the only visible safeguard against possible injustice and arbitrariness. Mere adoption of some information from other officer straightaway can not be characterized as bonafide belief of AO in the absence of some cogent and demonstrable material. The AO can not merely be ‘satisfied’ on the alleged information. He is required to undergo strictier test for reopening the case. The statute has made careful selection of expression ‘reason to believe’ and not mere ‘satisfaction’. Further, it is not belief per se that is a pre-condition for invoking section 147 of the said Act but a belief founded on reasons. The expression used in erstwhile section 147 is ‘If the Assessing Officer has reason to believe’ and not ‘If the Assessing Officer believes’.

On appraisal of the reasons recorded under Section 148(2) and approval thereon under Section 151 of the Act and in the light of contentions raised on behalf of the assessee, it is noticed that the case has been reopened on the last date of the limitation period for two reasons, namely, accommodation entry of Rs.50 lakh in the form of share capital from M/s. Shalini Holdings Pvt. Ltd. and allegation of undisclosed fictitious profit to the extent of Rs.2,35,48,859/- derived from transactions on NMCE platform. The Assessing Officer has proceeded under Section 147 r.w. Section 148 of the Act on the basis of information received from DDIT (Inv.) New Delhi and DDIT (Inv.) Kolkata. The DDIT (Inv.) New Delhi has alleged the assessee company to be beneficiary of accommodation entry in form of share capital from Shalini Holdings Pvt. Ltd. whereas the DDIT (Inv.) Kolkata has alleged misuse of NMCE platform which has resulted in fictitious profits received by the assessee. On perusal of the reports of the Investigation Wing as placed on record, we find merit in the plea canvassed on behalf of the assessee that the allegation against the assessee towards accommodation entries from ‘Shalini Holdings P Ltd.’ are bald and generic and without any specific material in support. No material has been referred in the note of the Investigation Wing which may possibly implicate the subscription receipts by the assessee in any objective manner. The report primarily revolves around the modus operandi of S K Jain Group. Likewise, the allegation of fictitious profits is qua other entity. The so called ‘belief’ formed by the Assessing Officer towards escapement of chargeable income is thus without the availability of relevant or tangible material and merely follows the opinion expressed by the investigation wing. The reasons assigned by the Assessing Officer towards escapement is dehors any tangible material which may give rise to a prima facie belief to attack the propriety of the share subscription. Likewise, the allegation of fictitious profits is also bald one and premised in incorrect recording of facts. The particulars of transaction giving rise to alleged unaccounted fictitious profits is not made available at any stage of the proceedings beginning with issuance of notice under Section 148 till the matter is traveled to the Tribunal. No instance of unreported profits has been identified even in the assessment as well. The onus has been wrongly shifted on the assessee without providing the details/particulars of transactions in commodity exchange towards alleged fictitious profits. The formation of ‘reason to believe’ is thus clearly extraneous to any material relevant for formation of prima facie belief. No live link or direct nexus between the so called information and the belief is found. Noticeably, the objection of the Assessee has also been disposed in a summary manner disregarding the points raised by the assessee. The order disposing objections does not utter a single word on the nature of material available or transaction carried at NMCE platform. The assessee thus has sufficiently demonstrated that neither there is any relevant material to make wide ranging allegations towards accommodation entry and earning fictitious profits nor the reasons recorded spells out the exact particulars of transactions giving birth to such allegations. No culpability can be inferred at the stage of reopening notice based on quality of information gathered against the assessee. This apart, the approval granted under Section 151 is also clearly demonstrated to be out of sync with the duty cast under Section 151 of the Act. In the present case, the exercise appears to have been ritualistic and formal rather than meaningful, which is the rationale for the safeguard of an approval by a higher ranking officer The Pr.CIT has granted approval without observing the inconsistency and glaring inadequacy in the approval memo placed before him wherein the scope of reopening was curtailed to mere case of alleged ‘escapement’ qua Explanation-2 disregarding other overwhelming conditions of the main provision thereof. In terms of approval memo, the reasons recorded thus can be read to be approved towards ‘escapement’ contemplated under Explanation -2 but such approval would not extend to existence of other conditions such as holding of ‘reason to belief’ etc. The approval granted under Section 151 thus runs contrary to the ratio of judgment of the Hon’ble Bombay High Court in the case of Smt. Kalpana Shantilal Hariya vs. ACIT in W.P. No. 3063/2017. The Pr.CIT has been weighed and endorsed the action of reopening under Section 151 apparently without any application of mind to such deficiencies in approval memo. The reasons so recorded, thus has no leg to stand in the eyes of law when tested at the counters of prerequisites of Sections 147 and 151 of the Act.

It is also noticed that in the similar fact situation, the reassessment under Section 147 on the grounds of fictitious transaction at NMCE platform has been cancelled by the Co-ordinate Bench in Gangeshwari Metal Pvt. Ltd. vs. ITO reported in (2020) 60 CCH 154 (Delhi Tribunal) relevant to Assessment Year 2010-11. The Co-ordinate Bench in that case observed that the Assessing Officer has proceeded merely on the basis of report given by the investigation wing without any application of mind and the Assessing Officer was not even aware of the actual profits earned by the assessee from commodities. The reopening action of the Assessing Officer was discarded and quashed by the Co-ordinate Bench.

We also bear in mind the observations made by the Hon’ble Delhi High Court in the case of Pr. CIT vs. G & G Pharma Pvt. Ltd., 384 ITR 147 (Del) & Sarthak Securities Co. (P) Ltd. 329 ITR 110 (Del.) wherein it was held that it is the basic requirement of law that Assessing Officer himself applied his mind to the underlying material which led him to hold belief that the income of the assessee has escaped assessment and such reference to the material is sorely missing. Similar judgements have been rendered by the Hon’ble Delhi High Court in the case of Krown Agro Foods Pvt. Ltd. vs. ACIT (2015) 375 ITR 460 (Del); CIT vs. Insecticides (India) Ltd. (2013) 357 ITR 330 (Del) Orient Craft Ltd. vs. CIT (2013) 354 ITR 536 (Del) and other plethora of other judgments.

We thus find overwhelming potency in the plea of the assessee that reasons recorded and approval granted thereon under Section 151 do not meet the requirement of law at all and thus the issuance of notice under Section 148 based on cryptic and nondescript reasons combined with a mechanical approval of the Pr.CIT that too on a narrow compass under Section 151 is not permissible in law. We thus have no hesitation to hold that the notice issued under Section 148 is thus without jurisdiction and consequently reassessment framed for Assessment Year 2010-11 is bad in law and hence quashed.

In the light of the delineations made above, we are not inclined to go to the other aspects emerging from main grounds and additional grounds. We are also not inclined to adjudicate the action of the Assessing Officer on merits.

The appeal of the assessee is thus allowed and the appeal of the Revenue is dismissed.