Commissioner Of Income Tax, Jaipur-Iii, Jaipur v. M/S Popular Art Palace (P) Ltd., Bud Ke Balaji, Ajmer Road, Jaipur

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH, JAIPUR JUDGEMENT 1. D.B. Income Tax Appeal No.122/2002. Commissioner of Income Tax, Jaipur-III, Jaipur. Vs. M/s Popular Art Palace (P) Ltd., Bud Ke Balaji, Ajmer Road, Jaipur. 2. D.B. Income Tax Appeal No.106/2002. Commissioner of Income Tax, Jaipur-III, Jaipur.Vs. M/s Popular Art Palace (P) Ltd., Bud Ke Balaji, Ajmer Road, Jaipur. 3. D.B. Income Tax Appeal No.110/2002. Commissioner of Income Tax, Jaipur-III, Jaipur.Vs.M/s Popular Art Palace (P) Ltd., Bud Ke Balaji, Ajmer Road, Jaipur. 4. D.B. Cross Objection No.31/2003.InD.B. Income Tax Appeal No.106/2002. Commissioner of Income Tax, Jaipur-III, Jaipur.Vs. M/s Popular Art Palace (P) Ltd., Bud Ke Balaji, Ajmer Road, Jaipur. 5. D.B. Cross Objection No.32/2003.InD.B. Income Tax Appeal No.110/2002. Commissioner of Income Tax, Jaipur-III, Jaipur.Vs.M/s Popular Art Palace (P) Ltd., 39-40, Bud Ka Balaji, Ajmer Road, Jaipur. 6. D.B. Income Tax Appeal No.55/2003. Commissioner of Income Tax, Jaipur-III, Jaipur.Vs.M/s Popular Art Palace (P) Ltd., Bud Ke Balaji, Ajmer Road, Jaipur. 7. D.B. Cross Objection No.87/2003. In D.B. Income Tax Appeal No.55/2003. Commissioner of Income Tax, Jaipur-III, Jaipur.Vs. M/s Popular Art Palace (P) Ltd., 39-40, Bud Ke Balaji, Ajmer Road, Jaipur. 8. D.B. Income Tax Appeal No.124/2003. M/s Popular Art Palace (P) Ltd., 39-40, Bud Ke Balaji, Ajmer Road, Jaipur, through its Director Ram Ratan Singhal.Vs. The Assistant Commissioner of Income Tax, Company Circle 2 (Now known as Deputy Commissioner of Income Tax Circle-7, Central Revenue Building, Statue Circle, Bhagwan Das Road, Jaipur. 9. D.B. Income Tax Appeal No.165/2003. M/s Popular Art Palace (P) Ltd., 39-40, Bud Ke Balaji, Ajmer Road, Jaipur, through its Director Ram Ratan Singhal.Vs. The Assistant Commissioner of Income Tax, Company Circle 2 (Now known as Deputy Commissioner of Income Tax Circle-7, Central Revenue Building, Statue Circle, Bhagwan Das Road, Jaipur. Date of order : 18.10.2016. HON'BLE MR. JUSTICE K.S. JHAVERIHON'BLE MR. JUSTICE MAHENDRA MAHESHWARI Mr. Sameer Jain for the appellant.Mr. N.M. Ranka, senior advocate with Mr. N.K. Jain for the respondents. 1.The appeals are preferred by the assessee against thejudgment and order of the Tribunal whereby the Tribunal has partlyallowed the appeal of the assessee. Following substantial question of law was framed by this Court while admitting the appeals. “Whether the expenses incurred by the appellantOrganization for availing the services of variousagencies- viz. accountinhg agency, marketingservices for introduction of buyers to the appellantand several other services for enhancing andmaintaining the business could be disallowed bythe Assessing Authorities so as to treat them astaxable income?” 2.The department has preferred cross objections beingNo.31/2003 and 32/2003. Other group of appeals is AppealsNo.43/2001 and 55/2000 and Cross Objection No. 87/2003 and the lastgroup of appeals is Appeal No.124/2003 and 165/2003 where only onequestion is framed where the Tribunal has held against the assesseeand confirmed the order of the Assessing Officer and the CIT (Appeals). 3.Counsel for the appellant Mr. Jain, while appearing for theDepartment, contended that the three questions which are raised forconsideration are as under: “1. Whether in the facts and circumstances of thecase, the ITAT was justified in holding that theassessee is entitled for the benefit of deduction U/s.80 I of the Act on the machinery which was an oldassets and was put to use by the assessee in its oldunit has also claimed depreciations on same in theearlier assessment year? 3.Counsel for the appellant Mr. Jain, while appearing for theDepartment, contended that the three questions which are raised forconsideration are as under: “1. Whether in the facts and circumstances of thecase, the ITAT was justified in holding that theassessee is entitled for the benefit of deduction U/s.80 I of the Act on the machinery which was an oldassets and was put to use by the assessee in its oldunit has also claimed depreciations on same in theearlier assessment year? 2.Whether in the facts and circumstances of thecase, the ITAT has erred in law and acted perverselyin holding that the forklift truck was on trial run in theold unit and which was ready for use in the new unitshould be treated as a new asset without properlyinterpreting the provisions of Sec. 80 I(2) andExplanation-2 thereof according to which the totalvalue old plant and machinery exceeded 20% and theassessee was not entitled to the benefit envisagedu/s.80I(2)? 3.Whether in the facts and circumstances, theITAT has erred erroneously and illegally in upholdingthe order of CIT (A) as well as ITAT have upheld therejection of accounts as well as invoking of provisionsof Sec.145 of the I.T. Act by Assessing Officer?” 4.The issue regarding Forklift is covered by the decision of this Court in Cross Objection No.20/2003 in D.B. Income Tax AppealNo.171/2002 and Cross Objection No.44/2003 in D.B. Income TaxAppeal No.111/2002 and Cross Objection No.11/2002 in D.B. IncomeTax Appeal No.122/2002 where this Court has held that Forklift is not aplant and machinery and, therefore, they are not entitled for the benefit under section 80-I of the Income Tax Act, 1961. 5.With regard to other issue for invoking the provisions ofSection 145 of the Income Tax Act, hee has contended that the Tribunaland CIT (Appeals) have abruptly deducted Rs.8,78,985/- toRs.2,00,000/- without any reasoning where the Assessing Officer whileassessing the books of accounts has rejected the given reasons on thebasis of gross profit which has been earned by the assessee on anaverage of 35% on the basis of increase of turn over to the extent ofRs.1.65 crores and correspondingly when the turn over is increased, theexpenses after they have remained unchanged, therefore, he hasestimated 35% on the basis of increased turn over. Therefore, hecontended that the CIT (Appeals) and the Tribunal have seriouslycommitted an error in confirming the order of the CIT, therefore, hecontended that the rational approach which has been taken by theAssessing Officer is required to be adopted and same percentage ofgross profit is required to be adopted. 6.Counsel for the respondent appearing for the assessee hascontended that in view of the fact that the assessee has produced onrecord the total turn over sales as gross profit shown in terms of thepercentage as estimated by the department and contended that the viewtaken by the CIT (Appeals) and the Tribunal is just and proper and nointerference is called for. 7.Regarding Forklift and others, he has contended that in viewof Explanation II to Section 80-I of the Income Tax Act, Forklift is not aplant and machinery as old machinery is entitled for the benefit undersection 80-I of the Act, which reads as under: “80-I. (1) Where the gross total income of anassessee includes any profits and gains derivedfrom an industrial undertaking or a ship or thebusiness of a hotel [or the business of repairs toocean-going vessels or other powered craft], towhich this section applies, there shall, inaccordance with and subject to the provisions ofthis section, be allowed, in computing the totalincome of the assessee, a deduction from suchprofits and gains of an amount equal to twenty percent thereof : 7.Regarding Forklift and others, he has contended that in viewof Explanation II to Section 80-I of the Income Tax Act, Forklift is not aplant and machinery as old machinery is entitled for the benefit undersection 80-I of the Act, which reads as under: “80-I. (1) Where the gross total income of anassessee includes any profits and gains derivedfrom an industrial undertaking or a ship or thebusiness of a hotel [or the business of repairs toocean-going vessels or other powered craft], towhich this section applies, there shall, inaccordance with and subject to the provisions ofthis section, be allowed, in computing the totalincome of the assessee, a deduction from suchprofits and gains of an amount equal to twenty percent thereof : Provided that in the case of an assessee, being acompany, the provisions of this sub-section shallhave effect [in relation to profits and gains derivedfrom an industrial undertaking or a ship or thebusiness of a hotel] as if for the words “twenty percent”, the words “twenty-five per cent” had beensubstituted. [(1A) Notwithstanding anything contained in sub-section (1), in relation to any profits and gainsderived by an assessee from—(i) an industrial undertaking which begins tomanufacture or produce articles or things or tooperate its cold storage plant or plants; or (ii) a ship which is first brought into use; or (iii) the business of a hotel which starts functioning,on or after the 1st day of April, 1990, [but beforethe 1st day of April, 1991], there shall, inaccordance with and subject to the provisions ofthis section, be allowed in computing the totalincome of the assessee, a deduction from suchprofits and gains of an amount equal to twenty-fiveper cent thereof : Provided that in the case of an assessee, being acompany, the provisions of this sub-section shallhave effect in relation to profits and gains derivedfrom an industrial undertaking or a ship or thebusiness of a hotel as if for the words “twenty-fiveper cent”, the words “thirty per cent” had beensubstituted.] (2) This section applies to any industrialundertaking which fulfils all the followingconditions, namely :— (i) it is not formed by the splitting up, or thereconstruction, of a business already in existence;(ii) it is not formed by the transfer to a newbusiness of machinery or plant previously used for any purpose; (iii) it manufactures or produces any article orthing, not being any article or thing specified in thelist in the Eleventh Schedule, or operates one ormore cold storage plant or plants, in any part ofIndia, and begins to manufacture or producearticles or things or to operate such plant or plants,at any time within the period of [ten] years nextfollowing the 31st day of March, 1981, or suchfurther period as the Central Government may, bynotification in the Official Gazette, specify withreference to any particular industrial undertaking; (iv) in a case where the industrial undertakingmanufactures or produces articles or things, theundertaking employs ten or more workers in amanufacturing process carried on with the aid ofpower, or employs twenty or more workers in amanufacturing process carried on without the aid ofpower : Provided that the condition in clause (i) shall notapply in respect of any industrial undertaking whichis formed as a result of the re-establishment,reconstruction or revival by the assessee of thebusiness of any such industrial undertaking as isreferred to in section 33B, in the circumstancesand within the period specified in that section :Provided further that the condition in clause (iii)shall, in relation to a small-scale industrialundertaking, apply as if the words “not being anyarticle or thing specified in the list in the EleventhSchedule” had been omitted. Provided that the condition in clause (i) shall notapply in respect of any industrial undertaking whichis formed as a result of the re-establishment,reconstruction or revival by the assessee of thebusiness of any such industrial undertaking as isreferred to in section 33B, in the circumstancesand within the period specified in that section :Provided further that the condition in clause (iii)shall, in relation to a small-scale industrialundertaking, apply as if the words “not being anyarticle or thing specified in the list in the EleventhSchedule” had been omitted. Explanation 1.—For the purposes of clause (ii) ofthis sub-section, any machinery or plant which wasused outside India by any person other than theassessee shall not be regarded as machinery orplant previously used for any purpose, if thefollowing conditions are fulfilled, namely :— (a) such machinery or plant was not, at any timeprevious to the date of the installation by theassessee, used in India; (b) such machinery or plant is imported into Indiafrom any country outside India; and (c) no deduction on account of depreciation inrespect of such machinery or plant has beenallowed or is allowable under the provisions of thisAct in computing the total income of any person forany period prior to the date of the installation of themachinery or plant by the assessee. Explanation 2.—Where in the case of an industrialundertaking, any machinery or plant or any partthereof previously used for any purpose istransferred to a new business and the total value ofthe machinery or plant or part so transferred doesnot exceed twenty percent of the total value of themachinery or plant used in the business, then, forthe purposes of clause (ii) of this sub-section, thecondition specified therein shall be deemed tohave been complied with. Explanation 3.—For the purposes of this sub-section, “small-scale industrial undertaking” shallhave the same meaning as in clause (b) of theExplanation below sub-section (8) of section80HHA. (3) This section applies to any ship, where all thefollowing conditions are fulfilled, namely :— (i) it is owned by an Indian company and is whollyused for the purposes of the business carried onby it; (ii) it was not, previous to the date of its acquisitionby the Indian company, owned or used in Indianterritorial waters by a person resident in India; and(iii) it is brought into use by the Indian company atany time within the period of [ten] years nextfollowing the 1st day of April, 1981. (4) This section applies to the business of anyhotel, where all the following conditions arefulfilled, namely :— (i) the business of the hotel is not formed by thesplitting up, or the reconstruction, of a businessalready in existence or by the transfer to a newbusiness of a building previously used as a hotel orof any machinery or plant previously used for anypurpose; (ii) the business of the hotel is owned and carriedon by a company registered in India with a paid-upcapital of not less than five hundred thousandrupees; (iii) the hotel is for the time being approved for thepurposes of this sub-section by the CentralGovernment; (iv) the business of the hotel starts functioning afterthe 31st day of March,1981, but before the 1st dayof April, [1991]. [(4A) This section applies to the business ofrepairs to ocean-going vessels or other poweredcraft which fulfils all the following conditions,namely :— (i) the business is not formed by the splitting up, orthe reconstruction, of a business already inexistence; (ii) it is not formed by the transfer to a newbusiness of machinery or plant previously used forany purpose; (iii) it is carried on by an Indian company and thework by way of repairs to ocean-going vessels orother powered craft has been commenced by suchcompany after the 31st day of March, 1983, butbefore the 1[st] day of April, 1988; and (iv) the business of the hotel starts functioning afterthe 31st day of March,1981, but before the 1st dayof April, [1991]. [(4A) This section applies to the business ofrepairs to ocean-going vessels or other poweredcraft which fulfils all the following conditions,namely :— (i) the business is not formed by the splitting up, orthe reconstruction, of a business already inexistence; (ii) it is not formed by the transfer to a newbusiness of machinery or plant previously used forany purpose; (iii) it is carried on by an Indian company and thework by way of repairs to ocean-going vessels orother powered craft has been commenced by suchcompany after the 31st day of March, 1983, butbefore the 1[st] day of April, 1988; and (iv) it is for the time being approved for thepurposes of this sub-section by the CentralGovernment.] (5) The deduction specified in sub-section (1) shallbe allowed in computing the total income in respectof the assessment year relevant to the previousyear in which the industrial undertaking begins tomanufacture or produce articles or things, or tooperate its cold storage plant or plants or the shipis first brought into use or the business of the hotelstarts functioning [or the company commenceswork by way of repairs to ocean-going vessels orother powered craft] (such assessment year beinghereafter in this section referred to as the initialassessment year) and each of the sevenassessment years immediately succeeding theinitial assessment year : Provided that in the case of an assessee, being aco-operative society, the provisions of this sub-section shall have effect as if for the words “sevenassessment years”, the words “nine assessmentyears” had been substituted : Provided further that in the case of an assesseecarrying on the business of repairs to ocean-goingvessels or other powered craft, the provisions ofthis sub-section shall have effect as if for the words“seven assessment years”, the words “fourassessment years” had been substituted:][Provided also that in the case of— (i) an industrial undertaking which begins tomanufacture or produce articles or things or tooperate its cold storage plant or plants; or (ii) a ship which is first brought into use; or (iii) the business of a hotel which starts functioning,on or after the 1st day of April, 1990 [but before the1st day of April, 1991], provisions of this sub-section shall have effect as if for the words “sevenassessment years”, the words “nine assessmentyears” had been substituted :Provided also that in the case of an assessee, being a co-operative society, deriving profits andgains from an industrial undertaking or a ship or ahotel referred to in the third proviso, the provisionsof that proviso shall have effect as if for the words“nine assessment years”, the words “elevenassessment years” had been substituted.] (6) Notwithstanding anything contained in anyother provision of this Act, the profits and gains ofan industrial undertaking or a ship or the businessof a hotel [or the business of repairs to ocean-going vessels or other powered craft] to which theprovisions of sub-section (1) apply shall, for thepurposes of determining the quantum of deductionunder sub-section (1) for the assessment yearimmediately succeeding the initial assessmentyear or any subsequent assessment year, becomputed as if such industrial undertaking or shipor the business of the hotel [or the business ofrepairs to ocean-going vessels or other poweredcraft] were the only source of income of theassessee during the previous years relevant to theinitial assessment year and to every subsequentassessment year up to and including theassessment year for which the determination is tobe made. (7) Where the assessee is a person other than acompany or a co-operative society, the deductionunder sub-section (1) from profits and gainsderived from an industrial undertaking shall not beadmissible unless the accounts of the industrialundertaking for the previous year relevant to theassessment year for which the deduction isclaimed have been audited by an accountant, asdefined in the Explanation below sub-section (2) ofsection 288, and the assessee furnishes, alongwith his return of income, the report of such audit inthe prescribed form duly signed and verified bysuch accountant. (8) Where any goods held for the purposes of thebusiness of the industrial undertaking or the hotelor the operation of the ship [or the business ofrepairs to ocean-going vessels or other poweredcraft] are transferred to any other business carriedon by the assessee, or where any goods held forthe purposes of any other business carried on bythe assessee are transferred to the business of theindustrial undertaking or the hotel or the operationof the ship [or the business of repairs to ocean-going vessels or other powered craft] and, in either case, the consideration, if any, for such transfer asrecorded in the accounts of the business of theindustrial undertaking or the hotel or the operationof the ship [or the business of repairs to ocean-going vessels or other powered craft] does notcorrespond to the market value of such goods ason the date of the transfer, then, for the purposesof the deduction under this section, the profits andgains of the industrial undertaking or the businessof the hotel or the operation of the ship [or thebusiness of repairs to ocean-going vessels or otherpowered craft] shall be computed as if the transfer,in either case, had been made at the market valueof such goods as on that date : Provided that where, in the opinion of the[Assessing] Officer, the computation of the profitsand gains of the industrial undertaking or thebusiness of the hotel or the operation of the ship[or the business of repairs to ocean-going vesselsor other powered craft] in the manner hereinbeforespecified presents exceptional difficulties, the[Assessing] Officer may compute such profits andgains on such reasonable basis as he may deemfit. Explanation.—In this sub-section, “market value”, inrelation to any goods, means the price that suchgoods would ordinarily fetch on sale in the openmarket. (9) Where it appears to the [Assessing] Officerthat, owing to the close connection between theassessee carrying on the business of the industrialundertaking or the hotel or the operation of the ship[or the business of repairs to ocean-going vesselsor other powered craft] to which this sectionapplies and any other person, or for any otherreason, the course of business between them is soarranged that the business transacted betweenthem produces to the assessee more than theordinary profits which might be expected to arise inthe business of the industrial undertaking or thehotel or the operation of the ship [or the businessof repairs to ocean-going vessels or other poweredcraft], the [Assessing] Officer shall, in computingthe profits and gains of the industrial undertakingor the hotel or the ship [or the business of repairsto ocean-going vessels or other powered craft] forthe purposes of the deduction under this section,take the amount of profits as may be reasonablydeemed to have been derived therefrom. (10) The Central Government may, after makingsuch inquiry as it may think fit, direct, bynotification in the Official Gazette, that theexemption conferred by this section shall not applyto any class of industrial undertakings with effectfrom such date as it may specify in the notification.][Deductions in respect of profits and gains fromindustrial undertakings or enterprises engaged ininfrastructure development, etc.” (10) The Central Government may, after makingsuch inquiry as it may think fit, direct, bynotification in the Official Gazette, that theexemption conferred by this section shall not applyto any class of industrial undertakings with effectfrom such date as it may specify in the notification.][Deductions in respect of profits and gains fromindustrial undertakings or enterprises engaged ininfrastructure development, etc.” 8.On the appeal preferred by the assessee, only one questionis framed and the counsel for the appellant has contended that all theauthorities have seriously committed an error in confirming the orderspassed by the Assessing Officer, CIT (Appeals) and the Tribunal in asmuch as for the previous year, the expenses were allowed fully and inlumpsum and the respondent has committed serious error andcontended that in view of Section 40 which reads as under and thecircular of the department at page 1 para 74 of the Finance Act whichreads as under: “74. It may be noted that the new provision isapplicable to all categories of expenditure incurredin business and professions, including expenditureon purchase of raw materials, stores or goods,salaries to employees and also other expenditureon professional services, or by way of brokerage,commission, interest, etc. Where payment for anyexpenditure is found to have been made to arelative or associate concern falling within thespecified categories, it will be necessary for theIncome-taxOfficertoscrutinisethereasonableness of the expenditure with referenceto the criteria mentioned in the section. TheIncome-tax Officer is expected to exercise hisjudgment in a reasonable and fair manner. Itshould be borne in mind that the provision is meantto check evasion of tax through excessive orunreasonable payments to relatives and associateconcern and should not applied in a manner whichwill cause hardship in bona fide cases.” 8.1Reliance has also been made on the decision of SupremeCourt in the case of J.K. Woollen Manufacturers Vs. Commissioner ofIncome Tax, U.P.- (1968)72 ITR 612, Laxmi Engineering Industries Vs.I.T.O. (2008) 298 ITR 203 (Raj.) and C.I.T. Vs. Udaipur Distillery Co. Ltd.- (2009) 316 ITR 426 (Raj.). “Section 40A(2)(a). Where the assessee incursany expenditure in respect of which payment hasbeen or is to be made to any person referred to inclause (b) of this sub-section, and the AssessingOfficer is of opinion that such expenditure isexcessive or unreasonable having regard to thefair market value of the goods, services or facilitiesfor which the payment is made or the legitimateneeds of the business or profession of theassessee or the benefit derived by or accruing tohim therefrom, so much of the expenditure as is soconsidered by him to be excessive orunreasonable shall not be allowed as a deduction.” 9.Taking into consideration the expenses is required to beallowed. The counsel for the appellant Mr. Jain has taken us to the orderand contended that it is a sister concern which has not done in genuinemanner and in the transaction and concurrent findings no substantialquestion is raised. It would not be appropriate for this Court to entertainthis appeal and contended that the appeal deserves to be dismissed. 10.We have heard Mr. Sameer Jain for the appellantdepartment and Mr. N.M. Ranka, senior advocate for the respondentassessee. 11.Coming to the issue of the appeal of the department, the firstissue which is posted for our consideration is whether in the facts andcircumstances of the case, the Tribunal was justified in holding that theassessee is entitled for the benefit of deduction U/s 80-I of the Act onthe machinery which was an old assets and was put to use by the assessee in its old unit has also claimed depreciations on same in theearlier assessment year? Therefore, the issue no.1 is required to beanswered in favour of the assessee. The assessee is entitled to getbenefit under section 80-I of the Act. 10.We have heard Mr. Sameer Jain for the appellantdepartment and Mr. N.M. Ranka, senior advocate for the respondentassessee. 11.Coming to the issue of the appeal of the department, the firstissue which is posted for our consideration is whether in the facts andcircumstances of the case, the Tribunal was justified in holding that theassessee is entitled for the benefit of deduction U/s 80-I of the Act onthe machinery which was an old assets and was put to use by the assessee in its old unit has also claimed depreciations on same in theearlier assessment year? Therefore, the issue no.1 is required to beanswered in favour of the assessee. The assessee is entitled to getbenefit under section 80-I of the Act. 12.In our view, regarding issue no.2, which is concluded in viewof the decision of the Division Bench of this Court, therefore, theassessee will not be entitled for the benefit under section 80 I of the Actand, therefore, the question is answered in favour of the department andagainst the assessee. 13.Regarding issue no.3 regarding lumpsum amount taken bythe CIT (Appeals), the contention of Mr. Jain is required to be accepted.The Assessing Officer by adopting 35%, in our view which is at higherside, even if we accept the profit which has been shown by theassessee from the year 1991-92 to 1996-97, the average of whichcomes to 31.4, for that we put the estimate 32% instead of 35% by theAssessing Officer. In that view of the matter, the issue no.3 is answeredin favour of the the Department and against the assessee and weestimate profit 32% and calculation may be done on that basis by theAssessing Officer. 14.Regarding cross objection which is for our consideration iswhether the Tribunal was right in holding that the Forklift is plant andmachinery for purposes of Section 80-I(2) of the Act in view of ouranswer in Issue no.2. This is required to be rejected, therefore, the crossobjections are required to be rejected. 15.Regarding other appeals of the assessee, particularly para 7of the order of the Tribunal in Tax Appeal No.165/2003 which reads as under: “keeping in view the past history of the case, thearrangement of making higher payment by way ofswitching over to a new system by linking thepayment of charges to the sales cannot be held tobe a bonafide arrangement for lack of evidencebefore us. Keeping in view the past practice andhaving regard to the provisions of section 40A(2) ofthe Income-tax Act, 1961 and also in view of thefindings as recorded by the ld. Commissioner ofIncome tax (Appeals) no interference is considerednecessary in respect of disallowance ofRs.12,97,336/- for assessment year 95-96 and forthe parity of reasons confirming the restriction ofclaim to Rs.15 lakhs out of the total claim ofRs.48,20,041/- for assessment year 96-97 for thesame services and also for the reasons containedin the order of the ld. Commissioner of Income tax(Appeals) making disallowance of Rs.2 lakhs out ofa claim of Rs.17 lakhs for system designing layout. Accordingly, both the grounds raised by theassessee stand rejected.” 16.Thus, we are of the opinion that the Tribunal has notcommitted any error in rejecting the appeal and even otherwise theconcurrent findings of the Tribunal is just and proper. Therefore, theissues are decided in favour of the department and against theassessee. 17.The appeals are accordingly disposed of. (MAHENDRA MAHESHWARI), J. (K.S. JHAVERI), J. bblm