TaxTMI 
TaxTMI 
2025 (4) TMI 663
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....rred on facts and in law in not allowing the claim of additional deduction of expenditure of Rs. 1,05,97,782/- as evidenced by the entries of cash outflows in the names of the employees found in the seized material against the gross unaccounted cash receipts from sale of spent solvents and scrap of Rs. 1,02,22,479/- for arriving at the real income thereon. 3. In the facts and circumstances of the case and in law, the Ld. CIT(A) erred in failing to consider the notarized affidavits of the employees and labour contractors furnished as additional evidence which substantiate the additional claim of expenditure towards labour payments by corroborating and supplementing the entries of cash outflows in the names of the employees found in the seized material. 4. In the facts and circumstances of the case and in law, the Ld. CIT(A) erred in allowing the deduction of expenditure to the extent of Rs. 10,22,248/- only on estimate basis at 10% of the gross unaccounted cash receipts from sale of spent solvents and scrap." 2.1. The grounds raised by the Revenue in ITA No.1124/Hyd/2024 for A.Y. 2020-21 read as under : "1. The Ld. CIT (Appeals) erred both on facts and ....
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....ure incurred against unaccounted receipts from sale of spent solvent / scrap and dismissed the addition made on account of deemed dividend in the hands of the appellant. 4.1. Aggrieved by the order of LD.CIT(A), the assessee is now in appeal before the Tribunal. 5. The first issue that came up for our consideration from Ground Nos.2 to 4 of the assessee's appeal and ground nos.2 and 3 of the Revenue's appeal is the disallowance of claim of deduction of expenditure against the unaccounted cash receipts from sale of spent solvents / scrap. The facts with regard to the impugned dispute are that the assessee is engaged in the manufacturing and sale of bulk drugs. In the process, the assessee purchased various solvents and used them for manufacturing bulk drugs. The used solvents had to be discarded by the assessee. During the course of search at the registered office of the assessee on 24.02.2021, a Sony make pen-drive of 16 GB was found in the possession of Shri R. Buchi Reddy, Cashier, which contained various Excel sheet data. From the excel sheets, it was found that the spent solvents / scrap was sold in cash and such transactions were not recorded in the books of accounts....
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.... of the appellant company and in order to put a quietus to the issue, he stated that the cash receipts from the sale of spent solvents / scrap of Rs. 1,02,22,479/- was offered as additional income in the hands of the assessee for the year under consideration. 5.1. Subsequently, during the post-search investigation, Shri MSN Reddy has furnished a sworn affidavit dated 05-07-2021 to the DDIT(Investigation), Unit - II(2), Hyderabad, and reiterated his statements made during the course of the search in the statement recorded on 27-4-2021. Apart from reiterating the explanation furnished in his sworn statement dated 27-4-2021, he explained in the affidavit that the disposal of hazardous waste of spent solvents / scrap does not attract serious attention of the management from the financial perspective since the revenue generated from the disposal of the same is insignificant in relation to the operational revenue of the group companies. The only interest of the management is the quick disposal of the said waste due to its hazardous nature, failing which it may invite problems from the pollution regulatory authorities. He further stated that after examination of the issue that the data....
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....xplanation furnished by MSN Reddy, the Managing Director of the appellant company, in the sworn statement dated 27-04-2021 and the affidavit dated 05-07-2021, and contended that the unaccounted cash receipts from the sale of spent solvents / scrap offered as additional income in the return of income filed under Section 153A of the Act do not represent the real income of the assessee, as the said amounts were expended for the purpose of business by way of disbursement to the workers who were involved in handling of the said material as per their demand considering the risks and inconveniences they had to face in handling the hazardous waste. Therefore, the appellant requested for deduction towards expenditure incurred for disposal of such hazardous material and claimed that the appellant and other group companies incurred a sum of Rs. 66,80,52,108/- towards the cash payments made to workers through the head office employees for Assessment Years 2011-12 to 2021-22, as per the seized material for all six group companies. The AO, however, was not convinced with the explanation furnished by the assessee, completed the assessment by accepting the additional income declared by the appella....
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....entries of cash inflow towards unaccounted cash receipts from sale of spent solvents / scrap as well as cash outflow entries showing handling the cash to various persons. Since both debit and credit entries are simultaneously recorded in the same seized document, the document should be read as a whole and cherry picking of data according to convenience is not justified. The LD.CIT(A) further observed that it is evident from the sworn statement dated 27-4-2021 and the subsequent affidavit dated 5-7- 2021 of Shri MSN Reddy that since beginning, he adhered to his stand that the unaccounted cash receipts were utilized for making payments to workers who were involved in handling of disposal of hazardous waste. The appellant submitted notarized affidavits of the concerned employees and labour contractors as additional evidence to substantiate its claim of making excess payments to workers. Since the appellant's claim of expenditure incurred for making payments to workers is based on seized material, the sworn statement and subsequent affidavits, the claim of the appellant has some reasonable force even if additional evidence by way of notarized affidavits is ignored. 6.3. The LD.C....
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....ional wages, to employees who were involved in the disposal of said scrap. The AO conveniently ignored one part of the seized document, which contains details of expenditure incurred against unaccounted cash receipts from the sale of spent solvents / scrap, even though the Managing Director of the appellant company claimed that the management did not pay any attention to the financial aspects of the disposal of spent solvents / scrap, but only showed interest in the quick and early disposal of waste because of its hazardous nature and the impact that may be created on environment. Although, the appellant has furnished all the evidence, including the sworn affidavit from the persons deployed to disburse expenditure to various persons, but the LD.CIT(A) has ignored all the evidence filed by the assessee and allowed 10% of receipt as expenditure incurred against unaccounted cash receipts from the sale of spent solvents / scrap. Therefore, he submitted that the deduction towards expenditure incurred for handling and disposal of spent solvents / scrap, as per the very same seized material, which was quantified as Rs.1,02,22,479/- may be allowed as a deduction against the unaccounted cas....
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....der of the LD.CIT(A) should be upheld. 10. We have heard both parties, perused the material available on record and gone through the orders of the authorities below. We find that, this issue is squarely covered in favour of the assessee by the decision of the ITAT Hyderabad Benches, in assessee's own case for A.Y. 2018-19 in ITA No. 1057/Hyd/2024 wherein the Tribunal has followed the decision in the case of MSN Pharmachem Private Limited for the A.Y 2019-20 in ITA No.884/Hyd/2024, where the Tribunal has directed the Assessing Officer to allow 60% of expenditure against unaccounted cash receipts from sale of spent solvents / scrap for the year under consideration. The relevant findings of the Tribunal are as under: "10. We have heard both parties, perused the material, and gone through the orders of the authorities below. There is no dispute with regard to the fact that during the course of the search in the office of the appellant and other group companies, a Sony make 16 GB pen drive was found and seized from the possession of cashier Shri R. Buchi Reddy, which was marked as Annexure A/MSN/OFF/PD1. The entries contained in the Excel workbook in the seized pen drive....
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....ich represents cash outflow in the name of various employees. Since the cash inflow and outflow are recorded in the very same incriminating material, in our considered view, the said seized material should be read as a whole for the purpose of assessment instead of cherry- picking of data according to the convenience of the Assessing Officer or the assessee. Therefore, in our considered view, the findings recorded by the LD.CIT(A) on this issue while allowing adhoc deduction on estimate basis to the extent of 10% of such unaccounted cash receipts is in accordance with law and needs to be accepted. Furthermore, there is no dispute regarding the fact that, right from the beginning, MSN Reddy, the managing director of the assessee company, made it very clear that the disposal of the hazardous waste material and amount received from sale of spent solvents / scrap does not attract serious attention of the management from the financial perspective, as the revenue generated from the dispersal of the same is insignificant when compared to the operational revenue of the group companies. He further stated that the only interest of the management is the quick disposal of the said waste, faili....
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....aste is cumbersome and also involves a certain amount of expenditure, but erred in allowing deduction of 10% on estimation basis from unaccounted cash receipts from the sale of spent solvents / scrap. 10.3. Having said so, let us come back how to quantify the amount of expenditure incurred by the appellant for earning unaccounted cash receipts from the sale of spent solvents / scrap. Admittedly, the seized material contains cash outflow in the name of various persons, including the employees of the appellant company, and their associates. The appellant has quantified the total amount of cash outflow in the seized document in the name of employees at Rs. 66,80,52,108/- for all assessment years and for all the assessees put together. The appellant has also quantified cash outflows of Rs. 17,63,52,315/- in the name of MSN Reddy and family members out of unaccounted cash receipts. The appellant has not claimed deduction towards the amount received by MSN Reddy, the managing director and other directors of the appellant company amounting to Rs. 17,63,52,315/ -. In respect of cash outflow representing amounts paid to various employees, the appellant has quantified an amount of R....
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....the said scrap. We further noted that the cash outflow represents payments made to various employees are in the name of few employees, and during the course of search, simultaneously search was carried out at the residence of three employees, where no incriminating material has been found in their possession to allege that the cash received by them has been utilized for their personal purposes, including the acquisition of any assets. This fact is further strengthened the arguments of the assessee that the cash given to said employees has been utilized for the purpose of business and also for disbursal of cash to the workers, who involved in handling of hazardous waste. Therefore, we are of the considered view that the LD.CIT(A), having taken note of the affidavit filed by the employees of the assessee, who are involved in handling and disposal of scrap, but erred in considering only 10% of receipts as expenditure against unaccounted cash receipts from sale of spent solvents / scrap. 10.4. Having said so, let us come back to the issue of quantification of expenditure deductible against unaccounted cash receipts from sale of spent solvents / scrap. Admittedly, the LD.CIT(A)....
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....bursed 80% of the amount received from unaccounted cash receipts in the name of various employees, and also going by the nature of the material, in our considered view, at least 60% of the receipts need to be considered as expenditure against unaccounted receipts from the sale of spent solvents / scrap. Therefore, we direct the AO to deduct 60% of the receipts as expenditure against unaccounted receipts from sale of spent solvents / scrap. In other words, out of the additional income offered by the assessee and assessed by the AO towards unaccounted receipts from sale of spent solvents / scrap, the assessee gets relief to the extent of 60%, and the balance amount of 40% of unaccounted cash receipts is hereby sustained for both the assessment years." 11. In this view of the matter and by respectfully, following the decision of the ITAT Hyderabad Benches in the case of MSN Pharmachem Private Limited for the A.Y 2019-20 in ITA No.884/Hyd/2024 (supra) and assessee's own case for A.Y. 2018-19, we direct the Assessing Officer to allow 60% of the receipts as expenditure against unaccounted cash receipts from sale of spent solvents / scrap and sustain 40% of addition towards unaccou....
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.... above two companies and also received payments in respect of sales made to the above two companies, and submitted that these transactions are in the course of the normal business of the assessee and have business exigency or commercial expediency. 13. The AO, after examination of the ledger accounts of the recipient company, observed that the basic ingredients of 'deemed dividend' as defined under section 2(22)(e) of the Act, such as common substantial shareholding of Shri MSN Reddy in the Appellant Company, two recipient companies and the availability of accumulated profits by way of reserves in the hands of the appellant company, have been satisfied. The AO analyzed the details of the opening balance, sales, purchases, receipts, payments, and closing balance in the affidavit of the two recipient companies and observed that the appellant has paid an excess amount to MSNL and MSNO in comparison to the amounts payable to the recipient company by aggregating the sales and payments made to the recipient companies and subtracting the purchases made and payments received from the recipient companies. Further, the AO, having regard to the Board's Circular No. 19/2017 date....
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....ct of the excess payments made to MSNL and MSNO as deemed dividend taxable under Section 2(22)(e) of the Act and contended that commercial transactions between two associated or group companies in the ordinary course of business are not covered under the provisions of Section 2(22)(e) of the Act. The assessee further contended that the AO, having noticed the fact that the appellant and the other two companies are engaged in similar line of business of manufacture and sale of bulk drugs and also there are commercial transactions between the appellant and the other two companies in the form of purchases, sales, receipts, and payments, has erred in applying the provisions of Section 2(22)(e) r.w.s. 115Q of the Act towards excess payments made by the assessee to the above two companies, ignoring the fact that the said transactions are purely commercial transactions between the two companies. The appellant has also challenged the findings of the AO with regard to the re-characterization of transactions between the appellant company and the other two companies as loans and advances as defined under Section 2(22)(e) without appreciating the fact that current account transactions between t....
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....ny cannot be treated as current account. The LD.CIT(A) has also rejected the contention of the assessee with regard to the argument that the excess amount paid to the two companies has been utilized for the business of the recipient company and that no part of the said payments was utilized / diverted for the benefit of the common shareholder because it is seen that Shri MSN Reddy is the substantial shareholder in both the payee and the recipient company, and any excess payment made to the payee in the guise of trade and advances would avoid the payment of dividend distribution tax under Section 115-O and would indirectly benefit the common shareholder; thus, the said payments fall under the deeming provisions of Section 2(22)(e) of the Act. Therefore, considering the nature of transactions between the parties, the quantum of payment, and also by considering the CBDT Circular No.19/2017 dated 12-6-2017 coupled the details of amount paid by the appellant to the recipient companies, by allowing 200% of purchases as normal payments in the ordinary course of business, and excess payments over and above 200% have been treated as loans and advances for the purpose of Section 2(22)(e) of ....
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....and bulk drugs, they have transactions with each other for purchases, sales, and also requirement of short-term funds for carrying out the business activities. Therefore, the Assessing Officer having accepted the fact that there are commercial transactions between the appellant and the two companies, and that these are in the nature of trade advances as per Board Circular No.19/2017 dated 12-06- 2017, but erred in coming to the conclusion that only a portion of advances paid by the appellant company falls under trade advances and rest is loans and advances. 20. The Learned Counsel for the assessee, referring to certain judicial precedents, including the decision of the Hon'ble Gujarat High Court in the case of Jayesh T Kotak Vs. DCIT reported in (2020) 425 ITR 435 (Gujarat), submitted that any payment made by a company in which a shareholder has shareholding exceeding 10% of the voting power to any concern in which such shareholder has substantial interest, would be deemed to be dividend in his hands if any benefit from such transaction has been received by such shareholder. The intention of the Legislature is to tax funds ultimately received by a shareholder holding not les....
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.... of loans or advances given to the two companies. Since the conditions for invoking the provisions of Section 2(22)(e) are satisfied, the reasons given by the AO to consider the transactions between the appellant company and the other two companies as loans and advances must be examined in light of the transactions between these companies. If you go by the analysis of the transactions between the Appellant Company and the other two companies, as done by the Assessing Officer, there is a clear fact to the effect that the appellant has made very minimum purchases from the above two companies, but has made substantial amounts over and above the value of purchases. Therefore, the Assessing Officer came to the conclusion that any amount paid in excess of 150% / 200% of purchases should be treated as loans and advances, and thus, rightly computed the excess amount paid by the appellant company to the two companies and invoked the provisions of Section 2(22)(e) read with Section 115Q of the Act. Therefore, he submitted that the order of LD.CIT(A) should be upheld. 22. We have heard both parties, perused the material available on record and gone through the orders of the authorities bel....
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....However, having regard to the Board's Circular No. 19/2017, wherein it was stated that the trade advances, which are in the nature of commercial transactions, would not fall under the ambit of the word "advance" in section 2(22)(e) and keeping in view the flexibility required in practical business situations, the AO treated the payments made by the appellant company to the extent of 150% of the purchases made from the recipient companies as the payments made in the ordinary course of business and the payments made in excess of such 150% of the purchases as payments having no nexus with the business transactions. Accordingly, the AO reduced an additional amount of 50% of the purchases from the excess payments and such balance excess payments were treated as payments made by way of 'advances or loans' on the reasoning that they have no relation to the trading transactions between the companies. In this connection, the AO noted that the appellant company is not engaged in the business of finance and that no interest was charged in respect of such 'advances or loans'. The said amounts of excess payments were accordingly held to be constituting deemed dividend u/ s 2....
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.... AO observed that the appellant company, being the payer company, is liable to pay dividend distribution tax under the provisions of section 115-O of the Act, in respect of the said deemed dividend u/s 2(22)(e) in the hands of the common substantial shareholder, in view of the amendment made to section 115Q with effect from 01.04.2018 making dividend distribution tax applicable to deemed dividend also. Since no dividend distribution tax has been paid in respect of such deemed dividend by the appellant company, the AO made addition of deemed dividend of Rs.243,06,97,212/ - u/s 2(22)(e) of the Act for A.Y. 2019-20 and Rs.266,76,84,647/ - for A.Y. 2020-21, in respect of which the appellant failed to pay dividend distribution tax, in the assessment order passed u/s 153A in the case of the appellant company. On first appeal filed by the assessee, the LD.CIT(A) upheld the inference of deemed dividend drawn by the AO in the assessment order. However, the LD.CIT(A) allowed partial relief with regard to the working of the quantum of deemed dividend by holding that payments made to the extent of 200% of purchases can be considered to have been made as per normal commercial practice and exces....
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....g and the availability of accumulated profits in the hands of the appellant company. However, it is the contention of the appellant that the other basic ingredient for inferring deemed dividend that there should be payments by the payer company (appellant) by way of 'advances or loans' to the recipient company, is not satisfied in the appellant's case and consequently, no deemed dividend arises in the hands of the common substantial shareholder and no liability to pay dividend distribution tax arises in the hands of the appellant company. Therefore, it is necessary to examine the issue in light of provisions of section 2(22)(e) of the Act, nature of transactions between two companies and the purpose of payments to two recipient companies. 19. The appellant has made three-fold arguments. The first and foremost argument of the appellant is that all the transactions between the appellant company and the recipient group companies have been made in the ordinary course of the business carried on by them and they do not come under the purview of deemed dividend u/s 2(22)(e) of the Act, as they cannot be characterized as 'loans or advances'. Admittedly, these g....
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....(e)(i) is basically in the nature of an explanation. That cannot, however, have bearing on interpretation of the main provision of section 2(22)(e) and once it is held that the business transactions do not fall within section 2(22)(e), there is no need to go further to section 2(22)(e)(ii). The provision of section 2(22)(e)(i) gives an example only of one of the situations where the loan/ advance will not be treated as a deemed dividend, but that's all. The same cannot be expanded further to take away the basic meaning, intent and purport of the main part of section 2(22)(e). This interpretation is in accordance with the legislative intention of introducing section 2(22)(e). [Para 11] Therefore, the Tribunal was correct in holding that the amount advanced for business transaction between the assessee-company and the company P was not such to fall within the definition of the deemed dividend under section 2(22)(e). [Para 12]" 20. Similar view has been expressed by various Courts in CIT Vs. Creative Dyeing & Printing Pvt Ltd [2009] 318 ITR 476 (Delhi), CIT Vs. Ambassador Travels Pvt Ltd [2009] 318 ITR 376 (Delhi), CIT Vs. Raj Kumar [2009] 318 ITR 462 (Delhi), CI....
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....t companies and payments in the nature of trade advances are being made to the said companies against the purchases, the AO/CIT(A) has drawn an artificial line for segregating the payments into 'trade advances' which are in the nature of commercial transactions and 'loans or advance' which do not have such commercial character. Such an approach of the AO/CIT(A) is not permissible since the extent to which trade advances are paid is purely a commercial decision which is contingent on the business expediencies. The AO/CIT(A) cannot place himself in the arm-chair of the businessman and usurp his role for deciding what constitutes reasonable level of trade advances that can be given against the purchases. In this regard, reliance is placed on the decision of the Hon'ble Supreme Court in the case of Hero Cycles (P) Ltd Vs.CIT [2015] 379 ITR 347 (SC) (Pg No.97-99 of PB-I), wherein it was held that the Revenue cannot justifiably claim to put itself in the arm- chair of the businessman or in the position of the Board of Directors and assume the role to decide how much is reasonable expenditure having regard to the circumstances of the case. The Hon'ble Apex Court fu....
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.... in the assessment order (Pg No. 50 and 51 of the order), the business activities of the group companies are inter-related and inter-dependent since each company is making sale of raw materials, engineering materials and intermediates to the other associate companies, in view of the fact that the manufacturing process is fragmented into different stages and different group companies are handling the manufacture at different stages. In view of existence of such inter-dependency among the associate concerns, the said companies provide funds to each other on a need basis as a measure of business expediency as and when there is requirement of funds for the purpose of business in order to provide the required support to the business of the other associate concerns. Further, this fact is also apparent from the audited financials of the appellant company that export sales constitute a significant portion of its total sales (Pg No 17 of PB-I). The appellant is making the export sales by taking marketing services from the foreign subsidiary companies promoted by MSN Laboratories Pvt Ltd namely, MSN Pharmaceuticals Inc, USA, MSN Laboratories Europe Ltd and Mega MSN Pte Ltd, Singapore (Pg No.....
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....ch were furnished to the AO during the assessment proceedings (Pg No.62-67 and Pg No.68 of PB-I). We further observed that there is a series of debits and credits in the concerned ledger accounts, which clearly indicate that the transactions were effected in the normal course of business and the concerned group companies have given funds to and received funds from each other as and when required for the purpose of the business of the said group companies. It needs to be borne in mind that such transactions between the group companies cannot be considered to be in the nature of 'loans or advance' to the group companies. An account containing such series of debit and credit entries reflecting movement of funds both ways between the associate/ group companies as per their business requirements has to be construed to be in the nature of a Current Adjustment Account unlike the transactions in the nature of 'loans or advances' to a shareholder or to a concern in which the shareholder has substantial interest, the movement of funds in a current adjustment/ accommodation account is in either direction on a need basis. Therefore, transactions which are in the nature of curre....
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....s received from various group companies could not be considered as loans and advance, as contemplated u/s 2(22)(e) since the said transactions between the group concerns are current and inter banking accounts containing both types of entries of giving and taking of amounts. In the case of Iswar Chand Jindal Vs. ACIT [2015] 61 taxmann.com 428 (Delhi-Trib), the ITAT, Delhi held that the transactions between the two group companies are in the nature of current account transactions and the same cannot be regarded as deemed dividend under section 2(22)(e) of the Act. The sum and substance of ratio laid down by various courts and Tribunals is that current account transactions between two group companies cannot be regarded as loans or advances as defined u/s 2(22)(e) of the Income Tax Act, 1961. Therefore, we are of the considered view that the provisions of deemed dividend u/s 2(22)(e) are not applicable to the transactions between the appellant company and recipient companies, as the said transactions bear the character of current adjustment account transactions due to two-way movement of funds on a need basis. Thus, the addition made by the AO towards deemed dividend in the hands of th....
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....d any benefit to the substantial common shareholder. We further noted that at para 7.19.2 of the assessment order, the AO has also accepted the factual position that the funds received from the appellant company have been utilized for financing the current assets of the recipient companies. Thus, it may be seen that there is no finding by the AO on facts that such funds have been diverted by the recipient companies for the benefit of the common substantial shareholder. On the other hand, the AO expressed his opinion that such financing of current assets of the recipient companies by the interest free funds received from the appellant company can be construed as a benefit accruing directly or indirectly to the recipient company. Since the utilization of the relevant funds for financing the working capital (current assets) of the recipient companies is an undisputed fact, it cannot be said that any part of the said funds has been diverted to the common substantial shareholder. Consequently, there is no scope for obtaining any direct or indirect benefit by the common substantial shareholder from the said funds. Therefore, in our considered view, it is not legally tenable to consider t....
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....e Limited has advanced unsecured loans as referred to therein to its sister concerns, viz. Gujarat Mall Management Co. Put. Ltd. and Aryan Arcade Put. Ltd., there is no information to the effect that such payment was made for the benefit of the petitioner. Except for the fact that the loan giver company in which the petitioner had shareholding in excess of 10 per cent of the voting power, had given loans and advances as referred to therein to two concerns in which the petitioner had substantial interest, the reasons are totally silent as regards any benefit having been obtained by the petitioner from the said loan transactions. It is not the case of the respondent that even if no amount has travelled to the petitioner, he would still be liable to be taxed for the said transactions merely by dint of the fact that two concerns in which he had substantial interest had received loans from a company in which he had shareholding exceeding 10 per cent of the voting power. According to the respondent, the question as to whether or not the amount had travelled to the petitioner is a matter to be decided at the stage of evaluation at during the course of the re-assessment proceedings. Eviden....
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...., which have been routed to him through different concerns in which he holds substantial interest. 27. Let us now come back to the observations of the Assessing Officer. In the assessment order, the AO expressed the view that the requirement that the payment made by the payer company should result in a benefit to the shareholder so as to construe the same to be in the nature of deemed dividend is not applicable to the limb of section 2(22)(e) dealing with "payments by way of loans or advances made by a company in which the shareholder has not less than 10% voting power to a company/ concern in which such shareholder has substantial interest". The AO stated that the said condition is applicable only to another limb of section 2(22)(e) which deals with the "payments made by the payer company on behalf of or for the individual benefit of the shareholder". However, the said view of the AO is patently contrary to the decision rendered by the Hon'ble Gujarat High Court in the case of Jayesh T Kotak (supra) which has since been affirmed by the Hon'ble Supreme Court. The decision rendered by the Hon'ble Gujarat High Court in the said case that receipt of benefit by the....