TaxTMI 
TaxTMI 
2012 (11) TMI 1301
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....re and since no specific issues involved, they have become inconsequential. Ground No.9 is not maintainable as charging of interest u/s 234B and 234C of the Act is mandatory and consequential in nature. The remaining grounds are relating to the various issues, namely: (1) (Ground No.2) that the authorities below erred in disallowing Rs. 10,68,71,384/- being 'Info & tracking of delivery schedules' paid to South Elegant Limited (SEL); (2) (Ground Nos. 3,4 & 5) that the authorities below were not justified in disallowing Rs. 18,35,79,000/- paid to SEL as 'termination fees; (3) (ground Nos.6 & 7) that the authorities below erred in disallowing/restricting the claims under various heads, namely: Under the head Disallowed by the AO Restricted to by CIT(A) Staff Welfare expenses Rs. 16,80,270/- Rs. 10,00,000/- Administration Exp. Others Rs. 16,64,580/- Rs. 9,00,000/- (4) (Ground No.8) that the order of the authority below was bad in law that during the course of assessment proceeding, no opportunity was given on the additions made. A.Y 2007-08- ITA NO.1243/B/10- (assessee's appeal): 3. For this assessment year as well, t....
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....): 6. As in last assessment year, the Revenue has raised ten grounds, out of which, ground Nos.1, 2, 9 & 10 do not qualify for adjudication as no specific issues have been raised. In the remaining grounds, the issues raised are reformulated as under: Under the head Disallowed by the AO Relief allowed by CIT(A) (gr.3) Staff Welfare Exp. Rs. 7038859 restricted the addition to 15% (Gr.4) Others Rs. 833587 - do - (Gr.5) Water charges Rs. 519993 - do - (Gr.6) Travel & conveyance Rs. 2298780 - do - (Gr.7) Sample exp. & business Promotion expenses Rs. 1000000 Rs. 5,00,000 (Gr.8) Customs duty on Machinery Rs. 220986 Rs. 1,00,000 7. As the issues raised in these appeals being inter-linked and pertaining to the same assessee, for the sake of convenience, they were heard, considered together and disposed off, in this common order. 8. Briefly stated, the assessee company ['the assessee' in short] is engaged in the business of manufacture and export of ready made garments. For both the assessment years, the AO had, for the detailed reasons recorded in the assessment orders under dispute, made various....
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.... handling and tracking of delivery schedule; and (ii) termination fee for the termination of such services etc. While presenting the assessee's case before the earlier Bench, the learned A R had filed additional evidence, certifying the genuineness of transaction entered into between the assessee and SEL. The additional evidence sought to be produced, according to the assessee, comprised of only two certificates from SEL. However, the earlier Bench, according to the assessee, had remitted back the issue to the file of the AO on the premise that the additional evidence submitted by the assessee of its transactions with 477 parties was voluminous and thereby required verification by the AO etc. However, according to the assessee, the confirmation was merely contained a list of 477 orders which was inadvertently misconstrued by the earlier Bench as being 477 transactions undertaken by the assessee. Thus, the earlier Bench had inadvertently misunderstood the nature of the additional evidence as voluminous, which requires to be examined by the AO etc., whereas such an additional evidence merely comprised of two certificates from SEL. 9.2. In conclusion, it was pointed out that the is....
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....cking schedules payment of Rs. 10.68 crores to SEL; and (ii) termination charges of Rs. 18.35 crores to SEL are taken up together for consideration. 10.1. In respect of the disallowance of termination fee of Rs. 18.35 crores paid to SEL, it was the claim of the assessee that it had entered into an agreement dated 1.7.2002 with SEL for availing the services on information and tracking of delivery schedules and that at the time of entering into the said agreement, three points, namely, duration, fee and termination were discussed and agreed to by both the parties. Therefore, it was claimed, the said item of expenditure was incurred wholly and fully for the purposes of business and that there was no need for any disallowance under this head. With regard to the disallowance of expenditure of Rs. 10.68 crores under the head 'Info and tracking and delivery schedule', it was contended by the assessee that major part of the amount was paid to SEL as the said SEL had necessary infrastructure and capacity to render services required by the assessee and that the services rendered by SEL were really warranting the payments as agreed upon. 10.2. However, the AO had, in his remand report t....
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....in the case of CIT v. M/s. Samsung Electronics reported in (2009) 320 ITR 209 (Kar). 10.4. The affirmation of the AO has been strongly denied by the assessee in its rejoinder to the remand report as recorded in the order of the CIT (A). 10.5. After due consideration of rival submissions, the CIT (A) had rejected the contentions of the assessee and upheld the additions made on twin issues, namely, (i) Info & tracking of delivery schedules paid to SEL; and (ii) termination charges paid to SEL. The relevant portions of reasons recorded by the CIT (A) are extracted as below: "5.5.1........ The fact is that such expenses have been claimed by the appellant in past i.e., in AY 2003-04, 2004-05 and 2005-06 and also allowed by the Department. The fact is also that survey u/s 133A(1) of I.T. Act was conducted in the business premises of the assessee on 5.11.2009 i.e., during the course of assessment proceeding, in which neither copy nor original agreement dated 1.7.2002 nor the copy or the original of the scheme of arrangement dated 1.4.2005 or the copy / original of termination agreement could be found which itself could be held as an evidence that payments were for some othe....
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....h a prudent businessman would definitely ask and require before assigning any contract of huge amount of Rs. 10 crores unless the other party is a dummy or / and the contract is non-existent. However, nothing of such sort had been done. Even at rejoinder stage, even if the AO alleged. SEL to be dummy one having no activity at all in the remand report, no additional evidence had been furnished by the AR to disprove such allegation. Instead, it has been alleged that the AO is biased. I see no such bias. I see AO has performed his duties of investigation impartially. He has shifted the burden of proof to the appellant to prove the capacity of SEL to perform the task of tracking the customers and delivery of goods of appellant to them. The onus, so shifted has not been attended to by the appellant at all. Thus, I wonder what prevented the appellant to file such proofs, viz., the Certificate of ROC, copy of Memorandum, some activity chart, some certificates of proof of manufacture or services rendered by the SEL from Hong Kong Government officials to at least show that such company existed at the relevant period and was really capable of delivering the goods and services for which purpo....
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....paper, it loses its enforceability and, therefore, cannot be held as a contract at all. In fact contract has been defined as an enforceable agreement. The agreement to become enforceable must possess certain characteristics viz., (i) It must be in writing because writing provides exact meaning to the terms of contract which need interpretation at the time of dispute; (ii) It must be signed by the contracting parties who are competent to contract; (iii) Two witnesses must also sign such document; (iv) The terms of contract must not be opposed to law or public policy; (v) The contract must conform to the legal formalities; In this case what the AO points out that the legal formalities are not fulfilled. One of such formality as to immovable properties is of compulsory registration u/s 17A of Indian Registration Act. In respect of other transactions/documents and contract which involves high values / denomination, the minimum legal formality is that it should be on stamp paper either executed before a notary or a Executive Magistrate who would put his seal and stamp as well as reference no date, place etc., so that it gets the appr....
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....mp paper. The learned AR had refused to buy the CIT (A)'s philosophy that the nonexistence of the agreement came to light only during the survey proceedings and on demand a copy of the non-existent plain paper agreement was produced etc. Instead, he had categorically advocated that the copies of the agreement as well as the termination letter were with the Department much before the survey proceedings initiated. With regard to the CIT (A)'s allegation of (i)non-production of Certificate of ROC, (ii) Memorandum of Association, Articles of Association, (iii) Activity chart, (iv) proof of manufacture/service rendered to evidence that SEL was capable of rendering services to the assessee etc., the learned AR had furnished copies of the same for the perusal of the Bench. 10.7. With regard to the accusation of the CIT (A) that the agreement was on a plain paper which was neither stamped nor registered/notarized etc; it was argued by the learned AR that admissibility of a document as evidence in the court of law and proof of its genuineness were two entirely different issues. A genuine document may not be admissible in a Court of law if it does not comply with the requirement of the Ev....
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.... (ii) Agreement with SEL (iii) copies of invoices raised by SEL and Gruyters Agenturen BV; (iv) Ledger extract of the Info & tracking of delivery schedules; (v) Details about payments through banking channels; & (vi) Confirmation for receipt of the amount by SEL and Gruyters Agenturen BV. 10.10. Further, it was submitted that the confirmation received from one of the customers, namely, GSTAR has been filed as additional evidence before this Hon'ble Bench to suggest that the services were provided by SEL. In respect of the Revenue's charge that no correspondence between the assessee and the service provider was filed to prove that the services have been availed of etc., the learned AR averred that a submission dated 8.12.2009 was filed with the AO containing the e-mail correspondence between the assessee and the service provider i.e., these were part of the assessment proceedings. 10.11. With regard to (i) details of arriving at the compensation amount & payments made through banking channels; & (ii) the correspondence between the assessee and SEL in relation to termination of the service agreement has not been brought on record etc., the le....
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....he service provider to plan his affairs. In this case, the contract was with Hong Kong entity does not alter the deductibility of expenditure in the hands of the assessee. It was, further, claimed that the fact that even the department had not disputed the providing of service has been rendered in Europe. The bona-fide understanding of the assessee about the termination amount being payable as per European law as well as express provision of the written agreement in good faith would be obvious even from the response to questions recorded during November, 2009. The contract envisages Hong Kong as the jurisdiction with respect to any dispute, given that the contract was entered into with a company incorporated and resident in Hong Kong. The amount paid was deductible as business expenditure and the counter claims of the revenue before this Hon'ble Bench without citing any valid basis was only on mere suspicion and, therefore, untenable. 10.14. In respect of the amount paid was deductible as business expenditure and the counter claims of the revenue before this Bench are without any valid basis and the Revenue's objection that the additional evidences furnished at this stage would ....
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.... which is not permissible. 10.16. In respect of the Revenue's argument that if the additional evidence were to be accepted, the same should be sent to the AO to examine the issues arising from the evidence filed etc., the learned AR submitted that the CIT (A) had resorted to confirm the disallowance for the alleged two reasons, namely, (i) invalid plain paper agreement; and (ii) void agreement as legal formalities were not followed while entering into such agreement. 10.16.1. In this connection, it was submitted that all the relevant materials necessary for deciding the issues in appeal are now available on record before this Hon'ble Bench and, therefore, it was pleaded that the revenue should not be allowed to set up a new case. 10.16.2. In the alternative, if the Hon'ble Bench considers it fit to validate the authenticity of the documents now submitted as additional evidence to further support and establish the fact that services have been rendered and the contract was genuine, it was submitted by the learned AR that the issue be restored to the file of the AO with a specific direction to verify the authenticity or otherwise of the additional evidence now produced as the....
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....Hong Kong for which, there was no explanation from the assessee; - that the assessee's sister concern JKPL had started its business during the AY 2006-07 and it had also made commission payments; and that the said commission payment was made to SEL. The assessee has now come up with a theory that the ultimate beneficiary of both M/s.South Elegant Ltd, Hong Kong and M/s Sharp Eagle Ltd, Hong Kong was Mr. Manfred Gruyters only; - that during the year under dispute, the assessee had made a commission payment of Rs. 10.68 crores to SEL and JKPL also made a payment of Rs. 14.75 crores to Sharp Eagle Ltd, H K; and that the moot question is as to why the assessee had to pay a termination fee of Rs. 18.5 crores to SEL when the sister concern of the assessee continues to do business with Mr. Manfred Gruyters through another company, M/s. Sharp Eagle Ltd - that the assessee wound up its business sometime around the AY 2006-07 and JKPL took over the business; that by the AY 2007-08, the assessee wound up its business operations and had only continued to be an entity - leasing factory premises to JKPL and on the contrary JKPL took over the business of the assessee; ....
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....ain paper not being notarized has also been brought on focal point. Though the alleged contract was enforceable in HK, the assessee had claimed that the payment of termination fee was in accordance with European regulations. 10.18. In conclusion, it was forcefully argued that since the claims of the assessee with regard to (i) payment of Rs. 10.68 crores being info & tracking of delivery schedules paid to SEL; and (ii) termination fee of Rs. 18.35 crores have not been properly explained coupled with documentary proofs and also the assessee has now come up with additional evidence before this Hon'ble Bench which have not been placed either before the assessment or remand report proceedings or at the appellate stage. Thus, for the principles of natural justice and fairness, the twin issues are to be restored to the desk of the AO for comprehensive examination of the assessee's claim. 11. We have carefully considered the rival submissions, perused the relevant materials on records and also the voluminous paper book furnished by the learned AR during the course of hearing. On his part, the learned DR came up with an elaborate Note along with enclosures. 11.1. Briefly, the asse....
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....assessee, it has to be held that no agreement existed and the payment was not for the purpose of business. Thirdly, even if it is agreed that there is payment, it is necessary to examine whether the payee was capable of doing such business so as to make it eligible to receive such payment. During the course of assessment proceeding, the AO had insisted for proofs of the existence of the company SEL and had also been required to show proof that such companies own manpower, machineries and technology to provide the info and tracking of delivery schedules and therefore the AR was wrong in alleging that no specific proof was required by the AO. In fact, the AO in the assessment order speaks about some discreet enquiry conducted in respect of SEL which revealed that the SEL is likely to be non-existent. Such allegation itself would have roused the appellant at the appellate stage to show sufficient proofs and provide satisfactory explanation that SEL exists and it was financially sound and stable and carried on activities in the nature of customer tacking in Europe scientifically. Such could have been done by providing copies of incorporation certificate, commencement of business certif....
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....assessee. 11.4.1. The additional evidences now produced were the documents the CIT (A) had specified in his order which would aid in establishing the genuineness of the expenditure. These documents were not available with the assessee during the course of appellate proceedings before the CIT (A) and the same is vital and necessary and, hence, the additional evidences now produced is taken on record for advancement of substantial cause and justice. 11.4.2. On a careful perusal of the Service Agreement purported to have been entered into on 1.7.2002, it has been noticed under the recitals that 'SEL is a sourcing agent for orders who amongst other services, provide services on information and tracking of deliveries schedules'. With regard to premature termination of agreement by either party, it has been recited under the caption '4. Termination', the relevant portions of which are extracted as under: 'a. This agreement may be terminated by either party after 1st July 2012, giving to the other 12 months' notice in writing; ................................................................................................ d. Termination o....
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.... AO, the contention as to whether the service agreement is valid and whether the payments are disallowable u/s 40(a)(i) of the Act has not been adjudicated/considered. It is ordered accordingly. 12. The next ground of the assessee is that the authorities below have erred in disallowing/restricting the claims under various heads, namely, staff Welfare expenses and administration Expenses etc., Staff Welfare Expenditure & administrative expenses - others: 12.1. It was the case of the AO that the assessee had debited Rs. 67.21 lakhs towards Staff Welfare expenses, however, on verification, he had found that the expenditure mainly on providing food to its employees which was not an allowable expenditure. Moreover, according to the AO, this expenditure was over and above the canteen expenditure which has been claimed separately. Further, no bills/vouchers were made available for verification and that a significant amount was incurred which was unverifiable; the AO resorted to disallow 25% of such expenditure claimed [Rs. 16.8 lakhs]. 12.2. Likewise, the assessee had claimed Rs. 83.22 lakhs under the head 'Others'. In the absence of any documents/bills to support ....
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....ings...'[Refer: P 9 of assessee's Note dt.14.6.2012]. 12.5.1. During the course of hearing, the learned A R had furnished nine voluminous paper books running into thousands of pages which, inter alia, containing the correspondences [along with copies of ledgers account] made with authorities below. In its letter dated 8.12.2009 addressed to the AO, the assessee had furnished the printout of ledgers, pertaining to, among others, (i) staff Welfare; (ii) business promotion expenses; (iii) Other administrative expenses; (iv) sample expenses; (v) canteen expenses etc., This has been duly acknowledged by the Office of the Addl. CIT, Range-11, Bangalore on 8.12.2009 [courtesy: P 1186 of P.B. 4 Part 1 of A.R]. Even though the AO had admitted in his assessment order dated 8.12.2009 [para 4.2.] that '.........The assessee company has thereafter filed its written replies dated 27.11.2009, 30.10.2009 and dated 8.12.2009 which have been considered', we are afraid, the AO would not have been in a position to verify all the claims of the assessee with reference to the ledger accounts, cash vouchers etc., which were, admittedly, running into hundreds of pages. 12.5.2. Admittedly, in the inst....
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....er issue [ground No.8] raised by the assessee was that the order of the assessing officer was bad in law as no opportunity of being heard was extended when the additions were made during the assessment proceedings. 13.1. At the outset, we would like to point out that there is no substance in the allegation of the assessee since the assessment proceedings were stretched to almost four months right from 10.9.2009 to 8.12.2009 [source: Asst. order] and that the assessee had ample time at its disposal to put across its grievance, if any, at that relevant point of time. Therefore, this allegation of the assessee doesn't deserve any merit. It is dismissed accordingly. A.Y 2007-08 - ITA No.1243/B/10- [by the assessee]: 14. For this assessment year too, the assessee had raised a similar theory [ground No.3] that the AO had not provided adequate opportunity to put forth its view etc. In this connection, we would like to reiterate that during the assessment proceedings, the assessee was extended four opportunities (dates of hearing) on 28.10.2009, 27.11.09, 2.12.09 and again on 8.12.2009 to put forth its objections/contentions etc. Such being the ground reality, we find no sub....
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....22,98,780/-...." On further appeal, the CIT (A) restricted the addition to Rs. 11,49,390/-. The assessee being aggrieved is in appeal before us. The learned counsel for the assessee submitted the above said expenses were incurred for business purpose and duly supported by bills and vouchers. The AO did not examine the details of vouchers and, therefore, it was submitted it was wrong and erroneous to note that the expenses debited under this head was not fully supported by bills and vouchers. Necessary details were in fact furnished and the AO, without calling for further explanation made an ad-hoc disallowance; It was submitted that a substantial expenditure is on account of providing free transportation services to the staffs and the employees of the company as the company operates three shifts i.e., 24/7 and, hence, free transportation became necessity and critical. 15.2.1. The details of expenses claimed under this head have been furnished by the assessee to the AO which has been acknowledged by the AO. This being so, we are of the considered view that the AO was not justified in making disallowance of the assessee's claim on an ad-hoc basis by comparing the turnover and t....
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.... the assessee with reference to the ledger accounts, cash vouchers etc., 16.2.1. Therefore, we are of the opinion that the AO was not justified in resorting to disallow the claim of the assessee on ad-hoc basis when all the relevant details were available with him. The AO is accordingly directed to verify the assessee's claim with reference to the details furnished by it and to take suitable action in the matter. To enable the AO to do the above mentioned exercise, this issue is restored to him. 17. Likewise, the assessee had also claimed deductions under the heads 'Sample Expenses and Business promotion expenses' of Rs. 5.96 lakhs and Rs. 11.27 lakhs respectively. It was the case of the AO that on verification of the details furnished by the assessee, it was found to be mainly these expenses were related to the credit card expenses of its Managing Director. As no evidence was produced by the assessee to suggest that those expenses were attributable to the business activities of the assessee, the AO had resorted to disallow a lump sum disallowance of Rs. 10 lakhs as, in his view, the partial involvement of such expenses for the personal use of the managing director cannot be ....
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....estricted the addition of Rs. 2,20,986/- to Rs. 1,00,000/-. 18.2. We have carefully considered the assessee's contentions and also diligently perused the reasoning of the AO in disallowing the assessee's claim. It is an undisputed fact that the assessee had debited a sum of Rs. 2.2 lakhs towards customs duty - machinery. Admittedly, the expenditure debited towards customs duty on machinery was capital in nature, the AO was well within his domain to come to a conclusion that the expenditure was nothing but capital in nature. It is ordered accordingly. 18.3. Before parting with, we would like to reiterate that the amount of Rs. 2.2 lakhs towards customs duty has been included by the assessee under the head 'repairs and maintenance' which must have prompted the CIT (A) to restrict the addition to Rs. 1 lakh by treating the said claim also for having incurred for the maintenance of the machinery by the assessee. Since this expenditure has been precisely incurred towards 'customs duty - machinery' which was capital in nature, the CIT (A) was not justified to restrict the disallowance to Rs. 1 lakhs without going into the merits of the issue. We shall now take up the issue....
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....cted. The AO's reasoning of MD's physical presence in India [hardly for 14 - 15 days in a year) was countered by the assessee that the physical stay of the MD in India doesn't have anything to do with the assessee's business. The CIT (A) had also justified the argument of the assessee that the MD was directly responsible for its business as he had brought in sales from Italy and other European countries and, therefore, justified the remuneration paid to Shri Kothari. The CIT (A) had also highlighted that the remuneration paid to the MD has been taxed in his hands and also necessary TDS effected. Thus, he had deleted the entire disallowance of Rs. 8.14 crores. 20.4. Before us, the learned D R had supported the stand of the AO and in particular that by keeping himself away from the work spot, the MD had divested all his responsibilities by delegating them to others to manage the day-to-day affairs of the assessee and, thus, he was ineligible to receive such remuneration. It was, therefore, pleaded that the stand of the CIT (A) be assailed and that of the AO be restored. 20.5. On the other hand, the learned AR had supported the CIT (A)'s stand in deleting the entire disallowance....
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.... taking into account the contentions of the assessee as recorded in his order under dispute, observed that 'in terms of section 23 of the Income-tax Act, 1961, the higher of the rent received or rent receivable following needs to be adopted as ALV. Since the AO has not brought anything on record to hold that the rent received is not in excess of the municipal valuation, I am left with no option, but to agree with the AR and I hereby direct the AO to adopt the municipal value of the rent , if it is in excess of the rent received.'[Para 11.1.] 21.3. Before us, the learned D R had forcefully supported the AO's stand as the AO had brought out the willful intention of the assessee in charging less rent from its subsidiary which would facilitate its sister concern to post increased income so as to claim exemption from tax u/s 10B of the Act. This clandestine intention of the assessee has been exposed by the AO thereby he had brought to tax-net the difference between rent paid and rent received from its sister concern. It was, therefore, pleaded that the stand of the AO requires to be sustained. 21.4. On the other hand, the learned AR submitted that the premises on which the rent pa....
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....agreement entered into with SEL, the assessee had engaged SEL as a sourcing agent w. e. f. 1.7.2002 for a period of ten years. As per the terms of the said agreement, the assessee had paid compensation of Rs. 18.35 crores for premature termination of the agreement and the said amount was remitted to the nonresident SEL without effecting TDS. According to the AO, the nature of services (to be) rendered by SEL and also the basis of commission payable etc., have not been spelt out in the said agreement. 22.2. During the course of proceedings u/s 201(1) and 201(1A) of the Act, the assessee was required to furnish and explain the circumstances under which the assessee had not effected TDS while making remittances to SEL. After due consideration of the assessee's contentions, analyzing the provisions of s. 9(1)(i) r. w. s. 5(2)(b) of the Act and for the detailed reasons recorded in his impugned order under dispute, the AO had observed in his concluding paragraph as under: "15. Thus, the assessee company ought to have done TDS on the outward remittances made to the non-resident as per provisions of sec. 195(1) of the Indian I.T. Act whereas it has failed to do the same. Theref....
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.....(iii): As per provisions of section 28(ii)(c) 'Any person.........................thereto', getting any compensation or any payment 'due to' or 'received by' becomes taxable in their hands. For applying these provisions, it is to be proved that the foreign agent had an agency in India but in this case of M/s SEL was a commission agent on the foreign soil i.e., in Hong Kong and was not having any agency in India and, accordingly, these provisions are not applicable to the appellant...." ..................................................................................................... 9.6. Item No.(vi): The very same issue of violation of the provisions of section 195 has been considered in the regular order passed by the AO u/s 143(3) on 8.12.2009. in this order, it is held that there is violation of provisions of section 195 and has further held that, this violation has led to the disallowance of the same amount of Rs. 18,35,79,000/- u/s 40(a)(i). Accordingly, even on the ground that it is not genuine expenditure which is allowable u/s 37(1) as also in view of violation of section 195, disallowance is made u/s 40(a)(i). This....
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....oceedings altogether. It was, therefore, prayed that the stand of the AO on this point requires to be restored. 22.5. On the other hand, the learned AR supported the findings of the CIT (A) and pleaded that as there was no infirmity in the stand of the CIT (A), there was no cause for the Revenue in seeking the intervention of this Bench on the issue. 22.6. We have carefully considered the rival submission and diligently perused the relevant case records. 22.7. At the outset, we would like to reiterate that the claim of deduction u/s 37 of termination charges amounting to Rs. 18.35 lakhs as genuine business expenditure was restored to the file of the AO for fresh consideration [Para 11.5.2 supra]. Therefore, the question of disallowance of the same amount by invoking the provision of s. 40(a)(i) need to be decided only after the decision is taken by the AO as regard to the allowability or otherwise of the amount u/s 37. Therefore the adjudication of the issue that is raised by the Revenue in this appeal is premature and, hence, need to be considered along with the claim of deduction u/s 37 of the Act. Hence, the plea of the Revenue is restored to the file of the AO with a d....