TaxTMI 
TaxTMI 
2025 (6) TMI 1456
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....hd/2023 : AY 2010-11 - By Assessee - Ground No. 3 2. At the outset, both the parties brought to our notice that the issue stands covered by the decision of ITAT in assessee's own case in ITA No. 329/Ahd/2017 for AY 2011-12 vide order dated 16.11.2022 and also in 328/Ahd/2017 for AY 2011-12. For the sake of ready reference, the relevant part of the order is reproduced hereunder:- "5. The action of the Assessing Officer in treating the amount of Rs.14,42,91,136/- as speculative loss was challenged by the assessee in an appeal filed before the learned CIT(A) and the following submissions were made on behalf of the assessee before the learned CIT(A) in writing in support of its case that the amount in question being finance charges/interest was deductible as business expenditure and the Assessing Officer was not justified in treating the same as speculative loss:- "5. Regarding addition on account of trading transactions on NSEL platform and loss incurred at Rs. 14,42,91,136/-. 5.1 The Assessing Officer in para 4 of the assessment order has referred trading practice of the commodities on NSEL i.e. National Spot Exchange Ltd. It is stated that as per the me....
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....136/- on the transactions of cotton wash oil on NSEL through NK Proteins. The Party-wise summary of the transactions of sale and' purchase is reproduced on page 8 to 10 of the assessment order. The transactions stated by him are summarized as under:- Sale of NKIL Purchase of NKIL Goods traded Quantity Amount Quantity Amount Profits/losses Castor seeds 333154875 12778992143 333154875 13071300187 (-)292308045 Indian castor oil 47070000 4231635650 47070000 4309751760 (-)78116110 Cotton wash oil 90079620 4670418546 90079620 4747764011 (-)77345466 Total:- (-)447769621 Keeping in view the background of para 5.2 of the assessment order, the Assessing Officer proposed to disallow the above loss on the ground that the transactions were not supported by the delivery of goods. The appellant had, therefore, explained before the AO that :- i) the transactions were entered into through NK Proteins, broker of the NSEL and that transactions are basically in the nature of financial transactions. ii) The appellant had entered i....
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....e entire quantity is set off for purchase of sale in the hands of each of the party. V) NK Inds. on the first sale receives the sale consideration within 3 days i.e. on settlement of T+3 contract. As against this, NK Corporation makes payment for purchase made by it under T+36 contract from the purchasing party of NK Inds. and it has to pay on the settlement date, after 36 days. The assesses pays to NK Corporation the purchase consideration on the expiry of T+36 contract. VI) Similar contracts are being entered into and the funds are received as per T+3 contract which are repaid as per T+36 contract. VII) For the above purpose, NK Proteins also maintains margin account of certain percentage of value of transaction on NSEL. VIII) The Assessing Officer has not accepted the above contentions vide para 7.16 to 7.20 of the order. The main reasons given by him are summarized as under- i)The transactions are fictitious for purchase & sale on NSEL platform, without actual delivery of goods. (para 7.14) ii) There was no real transaction of purchase and sale but the transactions were given to obtain the funds from the in....
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....ys Rs.110 to IBMA. iii) On the other end, NK Corporation sells the said material to NKIL on the same day for Rs. 112 and its payment is to be made after the period of settlement of T+36 transaction. iv) Thus, the goods sold by NKIL are adjusted against goods purchased from NK Corpn. Similarly, goods purchased by IBMA are adjusted against goods sold to NK Corpn. and goods purchased by NK Corpn. from IBMA are adjusted against the goods sold to NKIL. v) Thus, in the process, the NKIL gets funds of Rs. 100 for a period of at least 36 days. The difference between the payment made by it at Rs. 112 and the payment received at Rs. 100 is the cost of finance of Rs. 100 for the period of 36 days. Copies of bills representing one such trading cycle are enclosed which is explained as above. Slide / chart explaining above cycle and fund-flow arising there from is enclosed. It was with reference to the above contention explained before the AO that the transactions are of the nature to garner funds for business and that the difference being the trading loss is in fact the cost. It was explained that the appellant had obtained the funds for the purpose ....
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....acts of the case, observation of the A.O as well as the case law relied upon by the appellant. It is observed that the A.O has made an addition of Rs. 14,42,91,136/- on account of loss arising out of fictitious transactions. It is observed at para-6.1 of the order that due to NSEL Scam various regulatory and law enforcement agencies are already investigating the role of the appellant as well as the N.K. Group concerns. The Investigation wing of Income-tax Department too had surveyed the N.K. Group u/s.133A of the Act on 22/8/2013. The appellant itself has admitted that the T+3 and T+36 transactions were in the nature of paired contracts and there was no underlying commodities in these contracts. It is also seen from the findings of FMC, as mentioned earlier, that A.O has correctly drawn the conclusion that these were the trade contracts without any actual delivery of the goods. Shri Nilesh Patel, Director of the appellant has also admitted the said fact. The A.O has summarised the finding at para 7.19 page-17 of the assessment order. I completely agree with the findings of the A.O. The appellant has tried to defend itself by taking the argument such as the substance of transaction ....
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....ransactions as trade contracts and not financial transactions. I am of the considered opinion that irrespective of the contention of the appellant that these are financial transactions, I would like to rely upon what has been reflected in its books of accounts by the appellant. As all the transactions on NSEL platform conducted by the appellant were without any physical delivery these transactions are treated as speculative in nature and the loss incurred is speculative loss which cannot be set off against the normal business income. Therefore, the addition of Rs.14,42,91,136/- is hereby confirmed and the ground of appeal is hereby dismissed." 6. The learned Counsel for the assessee submitted that the assessee has suffered a loss of Rs. 14,42,91,136/-, but the Assessing Officer disallowed the same stating therein that it is a speculative loss. The Ld.AR submitted that a reference was made for audit u/s.142(2A) only on the basis of some newspaper report and on that basis it was presumed that the assessee's case is required a special audit. The Ld.AR further submitted that the assessee incurred loss in respect of cotton wash oil. The Ld.AR submitted that the assessee entered....
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....s trading loss in the books, hence, there is no question of debiting the same as interest in the accounts. The Ld.AR submitted that moreover as will be observed from the example given by the assessee before the CIT(A), the receipt of proceeds from sale are from the different entity than the payment made towards the purchase which is from a different entity. As it is considered as trading loss, there is no question of applicability of section 40(a)(ia) of the Act. The Ld. A.R. relied upon the decision of Hon'ble Apex Court in case of Tuticorin Alkali Chemicals & Fertilizers Ltd. vs. CIT (1997) 227 ITR 172 (SC), Mc Dowell & Co. Ltd. (1985) 154 ITR 148 (SC), Virtual 400 ITR 409 and 370 ITR 547 (SC). The Ld. A.R. also relied upon the decision of Great Eastern Shipping related to interest which was decided by the Apex Court. 7. The Ld. DR submitted that as regards ground No.4, there was no transfer of goods and the assessee could not explain as to why the route of exchange, i.e. NSEL has been taken. The DR relied upon the assessment order and the order of the CIT(A). The Ld. D.R. submitted that the borrowers and lenders entered into a pair of contracts for every deal and concep....
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....self is speculative, but in the present case the transaction was that of payment made by banking channel through account payee cheque for purchase and sale with the seller and buyers who are assessed to tax as per the contentions of the assessee. When the parties that of purchaser and seller are present and not artificial then the said transaction cannot be treated as speculative transaction and the loss incurred thereon cannot be speculative loss. The contention of the Ld. D.R. that the N. K. Proteins and its client has executed T+3 and T+36 trade contracts itself establishes that there was a transaction to that effect from the platform of NSEL for which the NSEL has maintained a settlement account with HDFC Bank in the name of N. K. Protein Ltd. For the purpose of carrying out transaction with NSEL they use to keep 3.5% of the value of the transaction as margin money of this account which is released only after the transaction is over. But since the transaction was not materialized in end the settlement amount was received in consonance with these business transactions from NSEL and thus it cannot be treated as speculative loss and is a part of business loss. As rightly contended....
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.... for AY 2011- 12 vide order dated 16.11.2022. For the sake of ready reference, the relevant part of the order is reproduced hereunder:- "20. As regards the issue involved in Ground No.5 of this appeal relating to the disallowance made by the Assessing Officer and confirmed by the learned CIT(A) on account of debit notes received by the assessee from N.K. Proteins Ltd by treating the same as unexplained expenditure, the material facts relevant to this issue are that NKPL had raised debit notes on assessee company for poor quality of FSG oil; and, as noted by the Special Auditor, the rate difference as reflected in the said debit notes was not debited by the assessee-company in the P&L account but the same was adjusted in the purchase and sales ledger. It was also found by the Assessing Officer that credit was given by the assessee-company to NKPL on account of such debit notes firstly on 28.02.2011 for Rs. 18,18,62,275/- and then on 31.03.2011 for Rs. 14,61,06,496/-. In this connection, the following explanation was offered by the assessee-company before the Assessing Officer to support and substantiate the debit notes raised by the NKPL. "5. It is stated that NKPL....
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....be seen that the entire transaction is commercial transaction and that NKPL is entitled to export Incentives of Rs. 60.38 Crore since NKPL is a star trading export house and therefore the buyers would feel comfortable to buy from NKPL At the same time NKPL has borne the entire export expenses of Rs. 32.78 Crore. The break-up of such expenses is enclosed [Page No._____]. 5.7 It may please further be noted that if export incentives do not belong to the NKPL than the entire transaction is not profitable in case of NKPL in as much as if it is ignored than there would be net loss as per P & L Account Further, it may please be noted that there was no intension whatsoever to make NKIL BIFR company in as much as NKIL is already sick company from 2002 as per BIFR Order dated 31-03-2014 [Please refer Para No. 15 & 16]. 5.8 Further, it may please be noted that NKIL and NKPL are companies and are liable to tax @ 30% with surcharge. NKIL has returned the loss. Whereas NKPL has returned the profit and paid the taxies thereon meaning by there is no question of any favour or disfavor by NKPL to NKIL. The transactions are entirely strictly commercial transactions and that the same....
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....Shri Ashvin P. Patel, Whole Time Director in NKIL. Since both of them are not the Managing Directors of the respective companies, the MOU signed by them has no significance in deciding the business policies. Further, the MOU has been executed on plain paper which is not notarized or registered document. Thus the MOU is of no worth to substantiate the contention of the assessee. iii) Further, on perusal of the related party details and copies of ledger accounts submitted by the assessee vide submission dated 03.11.2014, it was noticed that the assessee has credited Rs.18,18,62,275/- on 28.02.2011 and Rs, 14,61,06,496/- on 31.03.2011 on account of debited note received from NKPL towards poor quality of FSG Oil received during the year as per debit note dated raised by NKPL on 28.02.2011. ....... ....... Thus the contention of the assessee that the debit notes were not issued in respect of poor quality of FSG Oil sold to NKPL, is conflicting statements of the assessee which establishes the modus operandi of the assessee to reduce its profit. iv) The notes on accounts are silent on this aspect. The 'MOU' has neither been mentioned in the aud....
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....iculars Amount (Rs) 1. Trade margin at 1% of value. 7,96,84,259 2. Rate difference 23,26,66,952 3. VAT at 4%. 1,24,94,048 4. Additional VAT at 1%. 31,23,512 Total of Debit Notes:- 32,79,68,772 It may be noted that the debit note is on account of trade margin i.e. commission @ 1% and such trade margin is being charged in the course of normal business practice. Further amount represents rate difference charged by NKPL in terms of the MOU. As stated before the AO, as per understanding between the parties, the profit/loss on the goods so sold to NKPL which may arise to them on further sale by them for export would be belonging to the appellant. Thus, any difference between the price charged by the appellant and the price realised by the NKPL is transferred to the appellant. A perusal of the chart would show that for the month of April, May and June there was credit given by them for such rate difference. This itself shows that there was no intention of transfer of profit from the appellant, and the debit notes were raised as per the understanding between the parties. It does not represent transfer of any profit. T....
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....s are as stated above, on genuine MOD and genuine commercial understanding between parties. The addition may please be deleted." 20.4 The learned CIT(A) did not find merit in the submissions made on behalf of the assessee on this issue and proceeded to confirm the addition made by the Assessing Officer by disallowing assessee's claim on account of debit notes raised by NKPL vide paragraph no. 8.2 of his impugned order as under :- "8.2 I have carefully considered rival contentions and observations made by the A.O. in the assessment order. It is observed that the A.O has made an addition of Rs. 32,79,68,772/- as unexplained expenses on account of debit note received from N.K. Proteins Ltd. At para-8 of the order of assessment the A.O has mentioned that as per the special audit report that NKPL has raised debit note for poor quality of FSG Oil on the appellant. The rate difference on this account was not directly debited to the P & L A/c. On scrutiny by the special auditor it was observed by the special auditor that the credit is given to M/s. NKPL through debit notes firstly on 28/2/2011 for Rs. 18,18,62,275/- and on 31/3/2011 for Rs. 14,61,06,496/-. According to ap....
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....as observed that the amount of Rs. 18,18,62,275/- on 28/2/2011 an amount of Rs. 14,61,06,496/- on 31/3/2011 were reflected as debit note for poor quality of FSG oil in the books of the appellant. The calculation done by the special auditor reflects that the debit note has been raised for trade margin of 1%, Further on the trade margin and rate difference amount in the debit note, 5% of VAT is also charged which has resulted into total debit note of Rs. 32,79,68,772/-. According to special auditor this transaction of debit note has helped the appellant to file the BIFR status of sick company. The whole transaction of debit note has resulted into loss of Rs. 32.80 crores to the appellant. The special auditor has also doubted and considered the debit note as a colourable device to maximize loss of the appellant company. Further the special auditor has also pointed out that the appellant had sold caster oil to Tirupati Proteins Pvt. Ltd, which in turn had sold caster oil to another concern namely Hathibhai Bhulakhidas Pvt. Ltd. for exports as well as to M/s. NKPL (exporter for the appellant). However, Tirupati Proteins has not charged any trade margin or rate difference for the said tr....
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....nting to Rs. 32.80 crores accordingly was debited by the assesseecompany in its books of accounts and the said amount was already offered to tax by NKPL as its income. He invited our attention to the Memorandum of Understanding entered into by the assessee-company with NKPL and submitted that the same was duly acted upon by both the parties. He submitted that even VAT was also charged by NKPL on the said debit notes. He contended that all these vital aspects were brought to the notice of the learned CIT(A) by the assessee in the written submission filed before him, but he proceeded to upheld the findings of the Assessing Officer without appreciating the case of the assessee. He also invited our attention to the details of credit/debit notes issued by NKPL and submitted that the disallowance made by the authorities below, which has resulted in double taxation of the said amount, is not sustainable. 22. Learned DR, on the other hand, submitted that although it has now been claimed by the assessee that the debit notes were raised on account of price difference actually charged and realized, the same was debited in the books of account on account of poor quality of goods expor....
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....ount of debit note in question was duly recognized by NKPL as its profit which was offered to tax and keeping in view that the assessee-company was a BIFR company since 2002 incurring consistent losses, it cannot be said by any stretch of imagination that the debit notes were raised to reduce the taxable income of the assessee-company as alleged by the authorities below. There was a Memorandum of Understanding entered into between the assessee-company & NKPL and the same was acted upon by both the sides by raising debit/credit notes for the difference in price charged by the assessee to NKPL and the price actually realized by NKPL from corresponding exports as the same was to be transferred to the assessee-company. Keeping in view all these facts and circumstances of the case, we are inclined to accept the claim of the assessee that the amount of debit notes in question was its business expenditure being the difference in sale price charged and actually realized which is allowable as deduction. In that view of the matter, we delete the disallowance made by the Assessing Officer and confirmed by the learned CIT(A) on this issue and allow Ground No.5 of the assessee's appeal." 5. ....
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.... (b) the successor in business has obtained, whether in cash or in any other manner whatsoever, any amount in respect of which loss or expenditure was incurred by the first-mentioned person or some benefit in respect of the trading liability referred to in clause (a) by way of remission or cessation thereof, the amount obtained by the successor in business or the value of benefit accruing to the successor in business shall be deemed to be profits and gains of the business or profession, and accordingly chargeable to income-tax as the income of that previous year. Explanation 1. - For the purposes of this sub-section, the expression "loss or expenditure or some benefit in respect of any such trading liability by way of remission or cessation thereof" shall include the remission or cessation of any liability by a unilateral act by the first mentioned person under clause (a) or the successor in business under clause (b) of that sub-section by way of writing off such liability in his accounts. Explanation 2. - For the purposes of this sub-section, "successor in business" means (i) where there has been an amalgamation of a company with another company, th....
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....ssee, have their character changed by efflux of time. Before answering the said question, the Supreme Court took note of the test laid down by Lord Greene in Morley [H.M.Inspector of Taxes] Vs. Tattersall [1939 (7) ITR 316 (CA)] to the effect that the taxability of a receipt was fixed with reference to its character at the moment it was received and that merely because the recipient treated it subsequently in his income account as his own, it would not alter that character. The Supreme Court noted that this test laid down by Lord Greene formed the basis of several judgments delivered by our courts. 26. After taking note of the principle of law laid down by Lord Greene, the Supreme Court considered a few decisions of different High Courts as well as the Supreme Court, where the Courts distinguished the decision in Morley. Thereafter, the Supreme Court pointed out that the amounts in question were not in the nature of security deposits held by the assessee for the performance of contract by its constituents. The Supreme Court also held that the unclaimed surplus retained by the assessee will be its trade receipt and the assessee itself treated the same as trade receipt by br....
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....n in T.V.Sundaram Iyengar & Sons and rejected the claim of the assessee. 29. In Logitronics, the Delhi High Court was concerned with the very same questions that we are called upon to deal with in this case. In the case before the Delhi High Court, the assessee availed a loan from the State Bank of India, but failed to discharge its liability. The loan was categorized as a non performing asset and proceedings for recovery have been initiated. During the pendency of those proceedings, a One Time Settlement was arrived at and a portion of the loan as well as interest were waived. In the return filed by the assessee, they showed the interest waived as income, but not the amount of loan waived. The principal amount written off was directly taken to the balance sheet under the head 'capital reserve' and it was not offered for taxation. The Assessing Officer looked at the expanded meaning of the expression 'income' under Section 2(24) and held that the principal amount of loan written off was nothing but gain/income in the hands of the assessee by relying upon Section 28(iv) and 41(1). The assessee's first appeal was allowed by the Commissioner, but his order....
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....er thereof would not amount to any income exigible to tax. But, if the loan was for trading purpose and was treated as such from the beginning in the books of account, the waiver thereof may result in the income more so when it was transferred to the profit and loss account. 34. In Rollatainers, the Delhi High Court was again concerned with a case where in terms of a corporate debt restructuring package worked out between the assessee and the bank, a portion of the principal and interest were waived. The Income Tax Appellate Tribunal held that the waiver of the working capital loan utilised towards the day-to-day business operations resulted in manifest in the revenue field and hence, was taxable in the year of waiver. 35. Finding on facts that the term loans in question were taken for the purchase of capital assets from time to time and these amounts did not come into the possession of the assessee on account of any trading transactions, the Delhi High Court reiterated the opinion rendered in Logitronics. 36. Therefore, the law as expounded by the Delhi High Court appears to be that if a loan had been taken for acquiring a capital asset, waiver thereof w....
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....bate or discount of a portion of the price to be paid, when the payments scheduled over a period of time, are made promptly. It is needless to point out that in such cases, the prompt payment of money itself brings forth a benefit in the form of an incentive or a rebate or a discount in the price of the product. We do not know why it should not happen in the case of waiver of a part of the loan. Therefore, the finding recorded in paragraph 27.1 of the decision in Iskraemeco Regent Limited that Section 28(iv) has no application to any transaction, which involves money, is a sweeping statement and may not stand in the light of the express language of Section 28(iv). In our considered view, the waiver of a portion of the loan would certainly tantamount to the value of a benefit. This benefit may not arise from "the business" of the assessee. But, it certainly arises from "business". The absence of the prefix "the" to the word "business"makes a world of difference. 40. We shall now turn our attention to the distinction sought to be made between the waiver of a portion of the loan taken for the purpose of acquiring capital assets on the one hand and the the waiver of a portion ....
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....liabilities side of the balance sheet is reduced and the amount shown as Capital Reserves, is increased to the extent of waiver. Alternatively, the amount representing the waived portion of the loan is shown as a capital receipt in the profit and loss account itself. These aspects have not been taken note of in Iskraemeco Regent Ltd. 44. In view of the above, the questions of law are liable to be answered in favour of the Revenue/appellant. Accordingly, they are answered in favour of the appellant/Revenue and the appeal filed by the Revenue is allowed. No costs." 7. The Ld. CIT(A) deleted the addition relying on the judgments in the case of CIT Vs. Mahindra and Mahindra Ltd., 404 ITR 1 (SC) and CIT Vs. Phool Chand Jiwan Ram, 4 Taxman 204 (Del). 8. Before us, the Ld. DR relied on the order of the Assessing Officer and Ld. AR supported the order of the Ld. CIT(A). 9. We have examined the judgment of the Hon'ble High Court of Madras dated 22.04.2016 in the case of CIT Vs. Ramaniyam Homes (P.) Ltd., which held as under: "37. But, the Delhi High Court, both in Logitronics as well as in Rollatainers, did not take note of one fallacy in the reasoning given in pa....
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....ng recorded in paragraph 27.1 of the decision in Iskraemeco Regent Limited that Section 28(iv) has no application to any transaction, which involves money, is a sweeping statement and may not stand in the light of the express language of Section 28(iv). In our considered view, the waiver of a portion of the loan would certainly tantamount to the value of a benefit. This benefit may not arise from "the business" of the assessee. But, it certainly arises from "business". The absence of the prefix "the" to the word "business"makes a world of difference. 40. We shall now turn our attention to the distinction sought to be made between the waiver of a portion of the loan taken for the purpose of acquiring capital assets on the one hand and the waiver of a portion of the loan taken for the purpose of trading activities on the other hand. 41. It appears that in so far as accounting practices are concerned, no such distinction exists. Irrespective of the purpose for which, a loan is availed by an assessee, the amount of loan is always treated as a liability and it gets reflected in the balance sheet as such. When a repayment is made in monthly, quarterly, half yearly or ye....
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....e benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained by such person or the value of benefit accruing to him shall be deemed to be profits and gains of business or profession and accordingly chargeable to income-tax as the income of that previous year, whether the business or profession in respect of which the allowance or deduction has been made is in existence in that year or not; or x x x" 15) On a perusal of the said provision, it is evident that it is a sine qua non that there should be an allowance or deduction claimed by the assessee in any assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee. Then, subsequently, during any previous year, if the creditor remits or waives any such liability, then the assessee is liable to pay tax under Section 41 of the IT Act. The objective behind this Section is simple. It is made to ensure that the assessee does not get away with a double benefit once by way of deduction and another by not being taxed on the benefit received by him in the later year with reference to deduction allowed earlier in case of remission of suc....
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....ccordingly, leaving parties to bear their own cost." 11. Hence respectfully following the ratio laid down by the Hon'ble Apex Court, we decline to interfere with the order of the Ld. CIT(A). Appeal of the Revenue on this ground is dismissed. Issue : Purchases without consideration ITA No. 443/Ahd/2023 : AY 2013-14 - By Revenue 12. The entire part of the assessment on this issue is as under:- "8. Purchase at NSEL without consideration:- 81. Vide para 2 of observations made in special audit report it has been highlighted that M/s. NKIL has during the year purchased Castor seed through NSEL Platform amounting to Rs. 62,21,328/- (weighing 173.530 MT) However, the company has not furnished details to special auditor regarding payments for such goods purchased and has merely replied that the payment is made through Settlement account of NSEL This fact states that the goods are received by company without any payment and the same is settled against other parties account, thus, the Castor Seeds received are in the nature of payment received from NSEL, alike to the payment received in NKPL-NSEL client A/c. Thus, the Castor Seeds of Rs. 62.21 lac are received to....
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....d regarding genuineness of payments made from NKIL's account. Thus, considering this fact and the findings of special auditor in this regard, it is concluded that the Castor Seeds of Rs. 62.21 lac are received to the assessee company as NSEL Payments in Barter System, which is undoubtedly income / receipt of the company." 13. The Ld. CIT(A), on this issue, held as under:- "6.10 The learned has carried out addition of Rs. 62,21,328/- on account of purchases without consideration based on submission made by special auditor. 6.11 In this contest the appellant submitted that it had purchased castor seed on NSEL platform on actual delivery basis under farmers contract and appellant submitted bank statement reflecting payment made along with relevant vouchers and ledger extracts of said purchase. 6.12 On perusal of the supporting evidences submitted by the appellant it is evident that there are no purchases recorded without consideration. Therefore, addition made by learned AO is deleted." 14. Before us, the Ld. AR reiterated of the arguments taken before the Revenue Authorities and the Ld. DR relied on the order of the Assessing Officer. We have gone....