| SooperKanoon Citation | sooperkanoon.com/75620 |
| Court | Income Tax Appellate Tribunal ITAT Mumbai |
| Decided On | May-09-2007 |
| Judge | P Kumar, P M Devi |
| Appellant | Asstt. Cit |
| Respondent | Vijay Talkies |
2. Brief facts of the case are that the assessee is a partnership firm consisting of three partners, M/s. Vishwa Bhatt, J.S. Bhavnani and P.S.Bhavnanis, sharing profit in the ratio of 2:1:1 respectively. The business of the partnership firm was of running a theatre. Disputes arose between thepartners giving rise to litigation in respect of the same. On 16-11-1992consent terms were filed in the High Court of Bombay to settle the pending litigation wherein it was agreed that Mrs. Bhatt will take over all the assets, goodwill and the liabilities of the partnership firm of M/s. Vijay Talkies and Rs. 1.5 crores would be paid to the Bhavnanis, the other two partners, each getting Rs. 75 lakhs.
The firm was dissolved on 25-11-1993and thereafter accounts of the firm were drawn up to give effect to the consent terms. To carry out the same, the assets of the firm appearing in the books of account at Rs. 51,16,093 were revalued at Rs. 3,02,87,432 and the surplus of Rs. 2,51,71,339 (sic) (Rs. 3,02,87,432 minus Rs. 51,19,063 (sic)) was credited to the account of the partners in such a manner that the account of each of the Bhavnani's showed a credit balance of Rs. 75 lakhs and the balance was credited to the account of Mrs. Bhatt i.e. an amount of Rs. 63,54,692.67 was credited to each of the Bhavnani's and an amount of Rs. 1,24,41,953 was credited to the account of Mrs. Bhatt.
3. During the course of assessment proceedings, assessing officer noticed that the assessee did not offer any profit on account of revaluation of the assets and their distribution amongst the partners.
The assessee submitted that the distribution of assets on dissolution of firm was not a transfer defined under Section 2(47) of the Income Tax Act and that as held by the Hon'ble Supreme Court in the case of Malabar Fisheries Co. v. CIT and Addl. CIT v.Mohanbhai Pamabhai the transaction did not result in any transfer and there was no capital gains tax liability. However, the assessing officer observed that with the amendment of law with effect from 1-4-1989, the revaluation and distribution of asset at the time of dissolution of the assessee firm were expressly liable to capital gains tax according to the provisions of Section 45(4) of the Income Tax Act.
Thus, according to him the decisions of the Hon'ble Supreme Court were not applicable after the amendment of the provisions of law. He adopted the fair market value of the assets as on the date of the transfer at Rs. 3,02,87,432 which is the value adopted by the assessee for the distribution in accordance with the consent terms and held that the profit arising from this transaction was expressly liable to tax under Section 45(4) of the Act.
4. In reply to the query by the assessing officer, assessee filed a computation of capital gains, working out the long term capital gains at Rs. 1,36,16,247 on the ground that the assets other than land and building were of nominal value. The assessing officer was not satisfied with the working given by the assessee and held that the difference between the consideration determined at the time of dissolution of the firm in respect of the assets and its value thereof, is liable to tax as short term capital gain in accordance with provisions of Section 50 of the Income Tax Act. Aggrieved assessee filed an appeal before the Commissioner (Appeals) who held that the provisions of Section 45(4) are applicable in the assessee's case, because the value of land and building was substantially more than the book value. With regard to the valuation of the other assets like projector he held them to be liable to short term capital gain, and as regards the telephone he held it to be long term capital gain. Since the land was not a depreciable asset, it was held that provisions of Section 50 do not apply for land and as depreciation was never claimed for the building, they were held to be liable to long term capital gains and the assessment was modified accordingly. Aggrieved by the finding of the Commissioner (Appeals) that the land and building were liable to long term capital gain and also on the basis of value of depreciated assets like furniture, electrical installation etc. and giving the relief of short term capital gain on fair market value on the transfer of these assets the revenue has filed this appeal before us and the grounds of appeal raised by the revenue are as under: 1. On the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) II, Mumbai erred in directing the assessing officer to compute long term capital gain on building as per para 6 of his order without appreciating the fact that Section 50 was applicable to the asset as depreciation was allowable on assets although not claimed.
2. On the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) II Mumbai erred in observing that depreciated assets like Furniture, Electrical Installation have no enhanced value thereby giving relief of short-term capital gain on their Fair Market Value on the transfer of these assets.
3. On the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) II Mumbai erred in not considering the fair market value of depreciated assets like Furniture, Electrical Installation etc. included in the valuation of assets appearing in the Balance Sheet.
5. Aggrieved by the finding of the Commissioner (Appeals) that the dissolution of the firmand distribution of assets was a transfer and liable to capital gain tax, theassessee is in appeal before us by way of cross objection and the cross objections raised therein are as under: (i) The Commissioner (Appeals) failed to appreciate that the transactions entered into did not result in a transfer and did not give rise to any capital gains. The Commissioner (Appeals) erred in applying the provisions of Section 45(4) and Section 50.
(ii) In the alternative and without prejudice to (1), the Commissioner (Appeals) ought tohave held that the subject-matter of the transfer is the businessDundertaking as a whole and that capital gains have to be computed on that basis.
(iii) Without prejudice to the above, the Commissioner (Appeals) ought to have computed the long-term capital gains on the land and building by adopting the valuation reports dated 3-3-1993 and ought to have held that there was no gains in respect of movable assets.
6. As the cross objection relate to the question whether there was a transfer at all, and as this goes to the root of the matter, they are dealt with first.
7. The learned Sr. Counsel for the assessee, Shri S.E. Dastur submitted that the provisions of Section 45(4) are not applicable to the assessee's case. He submitted that on the dissolution of a firm, the distribution of assets between the partners would not amount to transfer. He referred to the decisions of the Apex Court in the cases of Malabar Fisheries Co. (supra) and N. Khadervali Saheb v. N. Guru Sahib (2003) 261 ITR l for the proposition that a partnership firm is not an independent legal entity and its partners are the real owners of the assets of the partnership firm and that on dissolution of a partnership firm, the allotment of assets to individual partner is not a case of transfer of any assets of the firm because the assets which hereinbefore belonged to all the partners jointly, will after dissolution of the firm stand allotted to the partners individually.
Thus there is no transfer or extinguishment of rights in the assets within the meaning of Section 2(47) of the Income Tax Act.
8. The learned Sr. Counsel submitted that the charge of tax under Section 45(4) of the Act cannot be made effective without a corresponding amendment in the definition of transfer under Section 2(47) of the Act as including a distribution of capital assets upon dissolution of a firm within the meaning of transfer. However, the learned Counsel fairly submitted that the Bombay High Court in the case of CIT v. A.N. Naik Associates has held that in view of omission of Section 47(ii) by the Finance Act, 1987, the effect of which is that distribution of capital assets on the dissolution of a firm would be regarded as transfer, no amendment is required in the definition of transfer in Section 2(47) of the Income Tax Act.
9. The learned Sr. Counsel further submitted that capital gains can be levied in the hands of the 'owner' on profits and gains arising from the transfer of a capital asset. According to him, it is a settled position in law as held by the Apex Court in the case of N Khadervali Saheb (supra), that there is no separate legal entity like a partnership firm and the partners are the real owners of the assets of the partnership firm. Hence, capital gains cannot be taxed in the hands of the partnership firm, who is not the owner of the assets which have allegedly been transferred.
10. The further submission of the learned Sr. Counsel has been that capital gains can be taxed/levied only if the assessee i.e., partnership firm is in 'existence' on the alleged date of transfer of capital assets. He submitted that Apex Court in the case of Malabar Fisheries (supra), has held that every dissolution is in point of time anterior to the actual distribution, as division or allotment of the asssets take place after making up the accounts and discharging the debts and liabilities due by the firm. Therefore, a firm which ceases to exist on dissolution will not be in existence at the time of distribution and hence no capital gains can be levied on the firm (which is not in existence) as mentioned in Section 45(4).
11. The other argument put forward by the learned Sr. Counsel is that Section 45(4) applies to a case of 'distribution of capital assets'.
According to him cash not being the capital asset or an immovable property the provisions of Section 45(4) are not applicable to the distribution of cash. He referred to the decision of the Apex Court in the case of S. V. Chandra Pandian v. S.V. Sivalinga Nadar , wherein it has been held that the nature of the property received by a partner upon dissolution is "movable property i.e., cash'' which certainly cannot be regarded as a capital asset and therefore there is no distribution of capital assets so as to trigger an application of Section 45(iv).
12. In the alternative, the learned Sr. Counsel also submitted that Section 45(4) applies to a case of 'distribution of assets'. He submitted that 'distribution' implies to division of a property as held by the Supreme Court in the case of Punjab Distilling Industries Ltd. v. CIT . According to him in the case on hand, a capital asset being the entire theatre business has been taken over by one person only i.e., Mrs. Bhatt and the others have been paid money which is not a capital asset and therefore there has been no distribution of capital asset and hence Section 45(4) cannot be applied to this case. He submitted that the word 'distribution' itself implies plurality of persons. The learned Sr. Counsel also submitted before us an alternate plea that the entire theatre business of the assessee firm being taken over by Mrs. Bhatt, the transaction should be regarded as a 'slump transfer' as held by the Bombay High Court in the case of Premier Automobiles Ltd. v. ITO . He submitted that in the absence of the 'cost of acquisition' or 'cost of improvement' of the theatre business and the dates in respect of the same, the computation machinery fails and there cannot be any liability to capital gains tax. In support of these contentions he relied upon the decision of the Tribunal in the case of Coromondel Fertilisers Ltd. v.Dy. CIT (2004) 90 ITD 344 (Hyd.) and Industrial Machinery Associates v.CIT (2002) 81 ITD 482 (Ahd.).
13. The last alternative submission made by the learned Sr. Counsel was that the assessing officer may be directed to take the fair market value of the land as on 1-4-1981 at Rs. 21,39,700 as opined by the registered valuer as against Rs. 16 lakhs which has been directed to be taken by the Commissioner (Appeals).
14. The learned DR supported the order of the assessing officer and submitted that Section 45(4) is the charging section for the levy of capital gains and Sub-section (4) provides for levy of capital gains on distribution of capital assets on dissolution of the firm. He submitted that the law prior to the amendment of Section 45 of the Act was that the distribution of capital assets on dissolution of the firm was not to be regarded as transfer under Clause (ii) of Section 47; but the Finance Act, 1987 with effect from 1-4-1988 omitted this clause, the effect of which is that the distribution of capital assets on the dissolution of a firm would henceforth be regarded as transfer. Thus, according to him the Legislature has amended the definition of transfer by implication instead of amending definition of 'transfer' under Section 2(47) of the Act. In support of his contentions about the constitutional validity of Section 45(4), the learned DR relied upon the decision of the Bombay High Court in the case of A.N. Naik Associates (supra). He further submitted that where a large measure of assets are incapable of physical division and the partners agreed that the assets are to be taken over by one partner, such an arrangement amounted to distribution of assets of the firm on dissolution and there is no sale as held by the Hon'ble Apex Court in the case of CIT v.Bankey Lal Vaidya (1971) 79 ITD 594. In support of his contentions he also relied upon the decision of the Punjab & Haryana High Court in the case of Raman Lal Khanna v. CIT . With reference to the assessee's argument that for the purpose of computation of capital gains under Section 45(4) the fair market value of each asset on the date of transfer is to be considered. The learned DR submitted that this is so because as per this section, full value of the consideration on transfer is the fair market value of the asset. In support of his contention, he relied upon the decision of the Andhra Pradesh High Court in the case of Raj laxmi Trading Co. v. CIT .
Thus, according to him the question whether this transfer being a slump sale is not at all relevant for the computation of capital gains. The learned DR further submitted that the assessee had itself furnished the full value of consideration agreed on transfer during the course of assessment proceedings and therefore the same was taken as the fair market value of the land and building and as per the ratio laid down by the Apex Court in the case of CIT v. Artex Mfg. Co. (1997) 227 ITR 2602, the capital gain in the present case has to be computed and the consideration agreed upon by the partners is not at all relevant for this purpose.
15. The learned DR also filed written summary of arguments made on behalf of the revenue vide letter dated 29-5-2006. The assesses also filed letter dated 1-6-2006 in reply to the summary of arguments filed by the revenue taking a stand that the revenue has filed the summary of arguments after the conclusion of hearing on 26-5-2006 without seeking the leave of the court and that filing of the submissions after the conclusion, of the hearing is not proper and only serves to delay in proceedings.
16. We find that the summary of arguments filed by the revenue only relates to the case law referred to by the learned DR during the course of hearing and, therefore, the objection of the assessee on the said summary is rejected. In the said letter the assessee has also made the following submissions (a) The Bombay High Court in the case of A.N Naik Associates (supra), has not dealt with the further issues as raised by the assessee in para 6A to of its note handed over in the course of the hearing held on 26-5-2006.
(b) That there can be no doubt that money is part of an asset of the firm but is not a capital asset and thus there is no distribution of capital receipts for application of Section 45(4) of the Income Tax Act.
(c) Section 45(4) provides that the fair market value of the assets on the date of transfer shall be deemed to be the full value of the consideration received or accruing; as a result of the transfer and even if the principle laid down by the Andhra Pradesh High Court in the case of Rajlaxmi Trading Co. (supra), is to be accepted, one has to determine the capital asset that is deemed to be transferred under Section 45(4) of the Act and the computation machinery failed in the absence of the cost of acquisition or cost of improvement of the theatre business and the dates in respect of the same.
(d) That the ratio of the Supreme Court decision in the case of Artex Mfg. Co. (supra), is not applicable to the case as the facts are different.
17. Having heard both the parties and having considered their rival contentions and the material on record, the following questions arise forour consideration (i) Whether the distribution of assets on the dissolution of the firm would amount to transfer? (ii) Whether the capital gains is taxable in the hands of the firm which is already dissolved and is not in existence.
(iii) As, in a partnership firm, partners are the joint owners of the assets, whether the partnership firm is taxable? (v) Whether the distribution of cash would qualify the distribution of capital assets? (vi) Whether in the absence of cost of acquisition and the date in respect of the same, the computation machinery failed? (vii) What would be the basis for the valuation of the capital assets and computation of capital gains under Section 45(4) the Income Tax Act? 18. As regards question No. (i), it is admitted by both the parties that the Bombay High Court in the case of AN. Naik Associates (supra), has held that an amendment is not required in the definition of 'transfer' in Section 2(47) of the Act in view of the simultaneous omission of Section 47(ii) of the Income Tax Act. Thus it has to be held that the distribution of assets of the dissolution of the firm will amount to transfer and liable for taxation of capital gains.
19. As regards question Nos. (ii) and (iii), the learned Counsel for the assessee has relied upon the decision of the Apex Court in the case of Malabar Fisheries (supra) and N. Khadevali Saheb's case (supra) for the proposition that a partnership firm is not an independent entity from its partners and partners are the real owners of assets of the firm and therefore on the dissolution of the firm, the assets which heretofore belonged to the partners jointly, will after dissolution belong to the partners individually. Thus there is no transfer or of assignment of ownership in the assets. Further in the case of Malabar Fisheries (supra), it was also held that dissolution of a firm must, in point of time, be anterior to the actual distribution, division or allotment of the assets that takes place after making accounts and discharging the debts and liabilities due by the firm. Thus the distribution, division or allotment of assets is not done by the dissolved firm and therefore there is no transfer of assets by the (dissolved firm) to any firm.
20. But the above decisions were rendered on an entirely different set of facts. In the case of Malabar Fisheries (supra), the Apex Court was dealing with a situation where a firm consisting of four partners carried on six different businesses and it was allowed rebate under Section 33 in respect of machinery installed during the relevant period. The firm was dissolved on March, 1963 and under the deed of dissolution, one of the firm's business was taken over by one of the partners and the remaining five by two of the other partners and the fourth partner received a sum of Rs. 3,81,082 in lieu of his share in the assets of the firm. The question was whether the rebate under Section 33 allowed to the firm could be withdrawn on the ground that there was a sale or transfer of the machinery within the meaning of Section 34(3)(b) read with Section 2(47) of the Act.
21. In the case of N. Khadavali Saheb (supra), the Apex Court was dealing with a question as to whether the award of settlement requires registration under Section 17 of the Indian Registration Act and it was held that it is not necessary as the document did not transfer or assign any interest in any asset.
22. The case on hand, we are dealing with Section 45(4) of the Income Tax Act, which reads as under 45(4) - The profits or gains arising from the transfer of a capital asset by way of distribution of capital assets on the dissolution of a firm or other association of persons or body of individuals (not being a company or a circumstances-operative society) or otherwise, shall be chargeable to tax as the income of the firm, association or body, of the previous year in which the said transfer takes place and, for the purposes of Section 48, the fair market value of the asset on the date of such transfer shall be deemed to be the full value of the consideration received or accruing as a result of the transfer.
23. The Bombay High Court in the case of AN. Naik Associates (supra) has considered the decision of the Apex Court in Malabar Fisheries' case (supra) and various other decisions of the same line and has held that all these judgments were previous to the amendment brought about by the Finance Act, 1987 which introduced Sub-sections (3) & (4) in Section 45, with effect from 1-4-1988. After considering the amended provisions of Sections 45(4) and 47 of the Income Tax Act, it was held that the purpose and object of the Act of 1987 was to charge tax arising on distribution of capital assets of firms which otherwise was not subject to taxation to block the escape routes for avoiding capital gains tax and therefore if the object of the Act is seen and the mischief it seeks to avoid, it would be clear that the intention of Parliament was to bring into the tax net transactions whereby assets were brought into a firm or taken out of the firm. Thus, respectfully following the decision of the jurisdictional High Court, we answer these questions against the assessee.
24. As regards question No. (ii), Section 45(4) refers to "the profits or gains arising from the transfer of a capital asset by way of distribution of capital assets on the dissolution of the firm". Thus, the reference here is to the capital asset. The Income Tax Act defines the capital asset under Section 2(14) of the Act. It is defined that the capital assets means property of any kind held by an assessee, whether or not connected with his business or profession but does not include (a)Any stock-in-trade, consumable stores or raw materials held for the purposes of his business or profession; (b)Personal effects, that is to say, movable property (including wearing apparel and furniture, but excluding jewellery) held for personal use by the assessee or any member of his family dependent on him.
Thus, capital asset means property of any kind. The words "any kind" qualify and include both movable and immovable property as well as tangible or intangible property. The Apex Court in the case of Dwarka Dass Srinivas of Bombay v. Sholapur Spg. & Wvg. Co. Ltd. has held that a property is a bundle of rights which the owner can law fully exercise to the exclusion of all others. He is entitled to use and enjoy as he pleases provided he does not infringe any law of the State. Property is either corporeal or incorporeal. In the case of Rustom Cawasjee Cooper v. UOI and Ahmed G.H. Ariff v. CWT , it has been held that in its normal connotation, property means the "highest right the man can have to anything, being that right which one has to lands or tenements, goods or chattels which does not depend on another courtesy but it includes ownership, and interest in corporeal things, and also rights such as a trade mark, copy rights, patent and even rights in personal capable of transfer of transmission such as debt and signifies a beneficial right to or a thing considered as having a money value, especially with reference to transfer or succession and to their capacity of being injured". It was also held by the Supreme Court that the word 'property' should be given a liberal and wide connotation so as to extend to those well recognized types of interest which have the insignia or characteristic of property right. The only exclusion from the purview of the definition of capital asset in Section 2(14) is the movable property which is held for personal use by the assessee or any member of his family depending on him and the stock-in-trade, consumable, stores or raw materials held for the purpose of the business or profession of an assessee. If the capital assets of the firm have been valued in terms of money, it cannot be said that there is no transfer or distribution of capital assets. What is converted into money is the right to the share in the partnership firm which is undoubtedly a capital asset. In this view of the matter, we reject the contentions of the assessee that there is no transfer of the capital assets.
25. As regards question No. (v), the assessee has relied upon the decision of the Bombay High Court in the case of Premier Automobiles Ltd. (supra), wherein it was held that where there is a sale of entire undertaking as a going concern, and there was no sale of itemized assets, transaction amounts to a slump sale and capital gains have to be computed on that basis.
26. In the above case, the Hon'ble Court was dealing with a sale of an undertaking on an 'as is where is' basis. But, in the case on hand, the assets of the firm were revalued to give effect to the consent terms.
Therefore, in our view, the above decision does not apply to the facts of this case and it cannot be termed as slump sale.
27. The next question No. (vii) relates to the computation machinery in the absence of cost of acquisition or cost of improvements and the dates in respect of the same. The argument of the assessee has been that the cost of acquisition of the assets and the dates in respect of the same are not available and therefore the computation of the capital gain machinery fails. The Andhra Pradesh High Court in the case of Rajlaxmi Trading Co.(supra), was dealing with the computation of capital gains of the firm and is solution of the firm and transfer of assets. It was held that the provisions of Section 45(4) clearly shows that on distribution of capital assets as a result of dissolution of the firm for the purpose of Section 48, the fair market value of the asset on the date of transfer should be taken C as a full value of the consideration received or accruing as a result of transfer. It was a case where the assets were taken over at book value, which differed from the fair market value of the property transferred as determined by the District Registrar Ranga Reddy District. The court held that the difference between the fair market value and the book value should be added as the short term capital gains. In the case on hand the assessee's claim has been that there is no cost of acquisition or the date of acquisition for computation of the capital gains. But the said assets should have been given some value in the books of account of the assessee firm and therefore the assessee's contention is not acceptable. In the result, cross objection Nos. 1 and 2 are rejected.
28. As regards cross objection No. 3, the assessee had got the land and building valued by a registered valuer who certified that the fair market value of the land and building at Rs. 2,48,72,925. On the basis of the said valuation report the assessee offered for assessment of long term capital gains amounting to Rs. 1,36,16,247. Since at the time of actual distribution the assets have been valued at Rs. 3,02,87,432 (sic) the assessing officer found it logical to adopt any other valuation as the fair market value therefore he ignored the valuation report furnished by the assessee and held that the profit on distribution of assets is assessable as short term capital gains by virtue of provisions of Section 50 of the Act. As regards the application of Section 50 of the Act and that no depreciation was ever allowed on the building, the assessing officer observed that depreciation was not claimed presumably because the computation of income for the earlier years resulted in loss. He also observed that even if depreciation was claimed and had been allowed, the amount so allowed would merely have accumulated as unabsorbed depreciation, thus, the assessing officer treated the entire expenses of Rs. 2,51,71,340 as income from short term capital gains.
29. On appeal to the Commissioner (Appeals) it was held that land not being a subject of Section 32 of the Income Tax Act, the provisions of Section 50 do not apply and the profit attributable to land has to be taxed as long term capital gains. He also held that the provisions of Section 50 apply to set of capital assets in respect of which depreciation has been allowed under the Act and as depreciation was never allowed on the building, the profit attributable to the building was also liable to be assessed as income from long-term capital gains.
With regard to the actual computation of income from long-term capital gains, the Commissioner (Appeals) held that the land having been acquired prior to 1-4-1981, its fair market value as on 1-4-1981 has to be determined and that has to be indexed. He further observed that the registered valuer in his report has valued the land keeping in view its actual utilization on a later date i.e., after erection of structures during 1985-89. Thus, he came to the conclusion that the actual areas actually used for construction of shops or for commercial use have been valued at a higher figure than the area utilized for canteen and kitchen. He therefore estimated the valuation of the land at Rs. 16 lakhs as on 1-2-1981 and directed the assessing officer to calculate the index cost. As regards the fair market value of the land and building as on the date of dissolution, the Commissioner (Appeals) held that the market value of the land and building mutually agreed between the partners should be adopted as a fair market value of the assets and there was no need to embark upon the estimation of other value.
Aggrieved, assessee is before us.
30. Having considered the rival contentions and having gone through thematerial on record, we find that the findings of the Commissioner (Appeals) are reasonable.The registered valuer's report is not on the basis of the position of land ason 1-4-1981 but it is on the basis of the position of the land after theerection of the structures during 1985-89. Therefore, the Commissioner (Appeals) hasrightly not considered the valuation report of the registered valuer dated3-3-1993.
As regards the gain on movable assets are concerned, we are in agreement with the contentions of the learned Counsel for the assessee that the movable assets include, furniture, projector machine, electrical installations, water pump etc., there was no gain as the Commissioner (Appeals) himself has felt that they were over used and were unlikely to command higher price than their book value. Having held so, we are of the opinion that the Commissioner (Appeals) ought not to have observed that the market value of the projector is in excess of its book value by Rs. 50,000 and is to be assessed to tax as short-term capital gains in accordance with the provisions of Section 50 of the Income Tax Act. The addition on account of short-term capital gains on movable assets is therefore deleted.
32. I.T.A. No. 5972/M/96 As all the grounds raised in revenue's appeal have already been dealt with in the ground No. 3 of the assessee's cross objection No. 64/M/03, in view of our findings given therein revenue's appeal is dismissed.