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Showing 121 to 140 of 1233 Records
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2014 (5) TMI 1116 - CESTAT NEW DELHI
Demand - clandestine removal of final product - recovery of commercial invoices in respect of duty paid goods which were rejected by their customer and were kept outside the factory and were diverted from their only - Held that:- it is found that having recovered commercial invoices, the Revenue did not make further investigation as regards the identity of the buyers and the transporter etc. so as to corroborate the charge of clandestine removal. No efforts were made to find out the source of the raw material and no statements of the production people were recorded. It is well settled law that charges of clandestine removal cannot be upheld on the basis of non-corroborative evidences. Inasmuch as in the present case there is neither any corroboration to the charge of clandestine removal under the cover of commercial invoices nor any independent evidence produced on record. Further, as the plea of the appellant as regards raising of commercial invoices stands accepted in respect of some of the returned goods, I am of the view that the charges of clandestine removal cannot be upheld against the appellant. - Decided in favour of appellant with consequential relief
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2014 (5) TMI 1115 - ITAT MUMBAI
Eligibility for exemption under section 11 - receipt received from Mahalaxmi Hospitality, Mahalaxmi Hotel & Resort and Mahalaxmi Food Link for Purposes of playing cards and also having Permit Room Bar and Restaurant for catering and soft drinks and hiring income from Marriage Hall/ground - Held that:- The AO has given a categorical finding that though the membership of the club is open to public but it has been restricted in many ways and it is not easy to get membership of the club even for the persons who count in the society. Even the membership is offered on payment of very high premium. High class premium services, such as facility of liquor bar, playing cards, restaurant, marriage hall, catering services etc. have been provided to the members, which cannot be said to constitute any charitable activity. Services can be availed for consideration only by members who constitute high class, influential and rich persons that too on payment of high premium for getting membership of the club. Though the assessee club is also offering the facility of sports to its members that itself, cannot partake the character of charitable activity. It is not the case of the assessee trust that such sports activities are provided or have resulted into any benefit to the public at large or any section of the society. The sports activities accompanied by facilities like liquor bar, playing cards, restaurant, marriage hall, catering services etc. limited to a certain group of persons i.e. members of the club cannot be said to be a charitable activity from which any benefit is derived by the public or section of the public rather the benefits are limited to high and rich distinguishable group of persons i.e. members of the club only. There is no element of charity involved in such an activity rather the activities of the club are meant for leisure and pleasure of the members of the club and the membership has been restricted to certain individuals not to any section of the society.
We therefore do not find any infirmity in the order of the AO in holding that the activities of the assessee trust do not fall in the definition of charitable purpose as defined under section 2(15) of the Act.
Benefit of mutuality - We may point out that if the services of restaurant, bar room, swimming-pool etc. are restricted to members or their family members or guests only, then the income from those services cannot be said to be business income of the society and the benefit of mutuality will be available to the assessee in relation to such facilities/services. However, the income which has been earned by the assessee by providing facilities to non members is required to be treated as business income of the assessee. We accordingly restore the matter back to the file of the AO to distinguish the income from facilities/services which have been offered to non members as compared to the income relating to the services/facilities which have been provided to members of the club. It will not affect the concept of mutuality or benefit of mutuality even if the said services are offered by the club by way of providing contracts etc. to private parties on commission basis or rent basis, for the benefit of members/family members or guests of the club members only.
Since the grounds relating to above claim of the assessee were not adjudicated by the ld. CIT(A) but were dismissed being rendered infructuous and since we have restored the matter to AO to distinguish the income earned from non members, hence we direct the AO to consider the above claim of depreciation etc. of the assessee accordingly as per law. - Decided in favour of revenue for statistical purposes.
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2014 (5) TMI 1114 - CESTAT NEW DELHI
Cenvat Credit - Entitlement to avail the Cenvat credit of service tax paid on the construction activities of the factory and its parts, prior to 1.4.2011 - Held that:- Availability of Cenvat credit of service tax paid on repair and maintenance of the building/plant/road etc. I find that the definition of input service as contained in Rule 2(l) specifically includes services used in relation to modernisation, renovation or repair of a factory. The said definition was amended with effect from 1.4.2011 wherein construction of the factory was excluded. As there is no exclusion in respect of the services relatable to renovation or repair, find no reasons to hold that such services were not cenvatable. Accordingly, the Revenue's appeal on the said ground is also not acceptable.
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2014 (5) TMI 1113 - ITAT BANGALORE
Status of the assessee - treated as AJP as declared by the assessee or AOP as proposed by the AO - entitlement to exemption u/s. 10(23C)(iiiad) - whether the assessee was entitled to exemption u/s. 11? - Held that:- We find that the issues raised by the revenue in its ground of appeal have all been dealt with by the Hon’ble High Court of Karnataka in the assessee’s own case viz., Children Education Society, (2013 (7) TMI 519 - KARNATAKA HIGH COURT ). On the question of status of the assessee, the Hon’ble High Court has held that the same has to be adopted as AJP. On the question of exemption u/s. 10(23C)(iiiad) of the Act, the Hon’ble High Court has held that the assessee was entitled to the said exemption and that the receipts of each of the educational institutions have to be considered separately and not by aggregation. With regard to the receipts by way of building fund and infrastructure development fund, the Hon’ble High court remanded the same to the Assessing Officer for fresh consideration to look into the ledger books and other accounts showing the receipts on account of building fund and infrastructure fund and its utilization for the purpose of construction and on that basis, pass suitable orders.
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2014 (5) TMI 1112 - ITAT PUNE
Income assessed u/s. 172(4) in the hands of the assessee as an agent - income accrued in India - DTAA of India Cyprus - interpretation of 'Effective Management' - Held that:- The authorities below have taxed income in the hands of Shaan as an agent of Glendive. If in their opinion Glendive may be bogus entity interposed in between to take advantage of Cyprus treaty, then it is not the income of Glendive but that of Aquavita. On one side, they are taxing the income in the hands of Glendive and on the other hand, they hold that Glendive is only a paper company. If in their opinion it is the income of Glendive, in that event, it is to be noted that Glendive does not have any establishment outside Cyprus. Accordingly, the income arises to it in Cyprus only.
It is not the case of the authorities below that Glendive has any establishment outside Cyprus. According to authorities below, Glendive is just a paper company and has been interposed in the transaction as a charterer. In that event, the income would accrue to Aquavita and not Glendive. This approach of authorities below is not justified. The other reasoning given by authorities below is that the effective management of Glendive cannot be in Cyprus because it has no staff, big office establishment in Cyprus and it is a one person company. He has relied on the OECD commentary which explains the words 'Effective Management'. The Indo Cyprus Treaty defines the words 'Effective Management' in Article 8 itself.
While other treaties like the one's with Mauritius, Poland, Netherlands do not define the words 'Effective Management' in the Article 8 thereof. Thus, for interpreting, these treaties, reliance may be placed on the OECD Commentary but so far as the Cyprus Treaty is concerned, there is no reason to rely upon to OECD Commentary because Article 8 itself has defines the term. Hence, in our case, when Article 8 of Cyprus Treaty explains clearly the word 'Effective Management', there is no need to refer to OECD Commentary or other sources for the meaning of these words. In view of the above, the CIT(A) erred in holding that the income of Glendive was taxable u/s 172(4) in the hands of Shaan Marine as an agent and the treaty benefits were not available to Glendive. - Decided in favour of assessee
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2014 (5) TMI 1111 - ITAT AHMEDABAD
Addition made on the basis of statement made during the course of survey u/s.133A - receipt of money in cash - Held that:- As evident from the observation of the ld.CIT(A) that the AO had not confronted the assessee regarding receipt of money in cash and merely assumed that the assessee has received cash from each and every purchaser.
Undisputedly, the AO has not made enquiry from the other purchasers and no material has been placed on record that money was received in cash except that statement was made by one of the Directors of the company during the course of survey. The ld.CIT(A) has held that the retraction letter of the assessee is not valid without giving any reason. We also find that the ld.CIT(A) has not taken into account the decision of CIT vs. Khader Khan Son reported at (2007 (7) TMI 182 - MADRAS HIGH COURT) and the appeal filed by the Revenue before the Hon’ble Apex Court [2013 (6) TMI 305 - SUPREME COURT] . Therefore, ld.CIT(A) was not justified in confirming the action of the AO and moreover the Revenue has not placed any independent material on record to substantiate the addition. Under these facts, the addition to the extent of ₹ 2,95,000/- only (Rs.4,75,000 – ₹ 1,80,000) is hereby sustained and the AO is directed to delete the balance amount of ₹ 29,75,000/-. - Decided partly in favour of assessee.
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2014 (5) TMI 1110 - SUPREME COURT
Problem with regard to the water level of Mullaperiyar dam after it had solved on 27.02.2006 (Mullaperiyar Environmental Protection Forum) because the Kerala State Legislature enacted the law immediately thereafter fixing and limiting Full Reservoir Level (FRL) to 136 ft - Held that:- Tamil Nadu is entitled to the reliefs as prayed in para 40 (i) and (ii) of the suit. Consequently, it is declared that the Kerala Irrigation and Water Conservation (Amendment) Act, 2006 passed by the Kerala legislature is unconstitutional in its application to and effect on the Mullaperiyar dam. The 1st defendant-State of Kerala-is restrained by a decree of permanent injunction from applying and enforcing the impugned legislation or in any manner interfering with or obstructing the State of Tamil Nadu from increasing the water level to 142 ft. and from carrying out the repair works as per the judgment of this Court dated 27.2.2006 in W.P.(C) No. 386/2001 with connected matters.
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2014 (5) TMI 1109 - SUPREME COURT
Admission to educational institutions including private educational institutions - Validity of clause (5) of Article 15 of the Constitution inserted by the Constitution (Ninety-third Amendment) Act, 2005 with effect from 20.01.2006 and on the validity of Article 21A of the Constitution inserted by the Constitution (Eighty-Sixth Amendment) Act, 2002 with effect from 01.04.2010 - Held that:- Constitution (Ninety third Amendment) Act, 2005 inserting clause (5) of Article 15 of the Constitution and the Constitution (Eighty-Sixth Amendment) Act, 2002 inserting Article 21A of the Constitution do not alter the basic structure or framework of the Constitution and are constitutionally valid. We also hold that the 2009 Act is not ultra vires Article 19(1)(g) of the Constitution. We, however, hold that the 2009 Act insofar as it applies to minority schools, aided or unaided, covered under clause (1) of Article 30 of the Constitution is ultra vires the Constitution. Accordingly, Writ Petition filed on behalf of Muslim Minority Schools Managers’ Association is allowed and Writ Petition filed on behalf of non-minority private unaided educational institutions are dismissed.
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2014 (5) TMI 1108 - CESTAT BANGALORE
Denial of refund of Cenvat credit - availed on input services - Event management servicesm, real estate agent service, consultant service, tour operator service and travel agent service - RFefund claimed on the ground that credit could not be utilized because the output service is exported and accumulated CENVAT credit is to be refunded under Rule 5 of CENVAT Credit Rules 2004 under Notification No. 5/06 NT dated 14.03.2006.
Held that:- appellant has made out a complete case for eligibility for refund in respect of service tax paid on all the above input services. However, the matter has to be remanded for the purpose of verification of documents and records and sanction of refund and payment of the amount to the appellant. - Appeal allowed by way of remand
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2014 (5) TMI 1107 - SC ORDER
Waiver of pre-deposit - Whether the figure mentioned in the order is correct or not - while quantifying the amount of waiver of pre-deposit, the learned Tribunal has taken a mistaken and incorrect figure - High Court held that to make the amount of deposit in a round figure, it would be ₹ 3 crores instead of ₹ 3.4 crores. Therefore, learned Tribunal has rightly exercised its discretion in asking to make the deposit reported in [2014 (3) TMI 1051 - ANDHRA PRADESH HIGH COURT] - Apex Court dismissed the special leave petition for no reason to interfere
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2014 (5) TMI 1106 - BOMBAY HIGH COURT
Transfer pricing adjustment - Held that:- Appeal admitted on the following substantial question of law:-
Whether on the facts and in the circumstance of the case and in law, the Tribunal was justified in confirming the order of CIT (Appeals) in deleting the addition of ₹ 61,84,483/- made under Section 92CA(3) by the Assessing Officer?”
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2014 (5) TMI 1105 - DELHI HIGH COURT
Suspension of CHA licence - Regulation 19 of the CBLR, 2013 - Petitioner contended that in compliance with Regulation 19(2), a hearing was given after the suspension order within the time specified but, no order has been made as yet, therefore, entire suspension order vitiate also second part of Regulation 19(2) prescribes a further period of 15 days within which the order is to be made either revoking or confirming the suspension, has to be construed as casting a mandate.
Held that:- in the absence of any indication, within the Regulation, as to the consequence of not passing an order within the time stipulated, the Court is unpersuaded with the petitioner’s arguments that the discretion to pass the order within fifteen days of hearing is, in fact, a mandatory requirement. At the same time, this Court is not oblivious of the fact that more than five months have elapsed since the hearing was given on 31-12-2013. In these circumstances, to balance the equities, it would be appropriate that the Commissioner grants a fresh hearing to the petitioner or his representative as the case may be, within a week from today and thereafter pass orders under Regulation 19 either revoking or confirming the suspension. - Petition disposed of
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2014 (5) TMI 1104 - ITAT MUMBAI
Adhoc addition being 25% of the total interest claimed by the assessee as deduction - Held that:- It is not in dispute that the assessee has obtained loan for business purpose and utilised the same for the purpose of business. Interest paid by the assessee on such loan was allowed as deduction from year to year. Therefore there is no dispute with regard to the fact that the expenditure is wholly and exclusively incurred for the purpose of business. The assessee is at liberty to arrange its affairs in such a way which would strengthen business relations and the Assessing Officer cannot put himself in the shoes of the businessman to decide as to what would be the course of action that needs to be taken in a given situation. In the instant case the assessee explained the reasons for permitting group concerns long term credits. Merely because the Assessing Officer views its otherwise, expenditure incurred for the purpose of business cannot be disallowed, particularly in the light of the decision of Hon'ble Apex Court in the case S.A. Builders Ltd. (2006 (12) TMI 82 - SUPREME COURT ).
The tax authorities have not made out any case for disallowance of 25% of the total claim. The Assessing Officer is directed to allow the claim in its entirety - Decided in favour of assessee
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2014 (5) TMI 1103 - CALCUTTA HIGH COURT
Power of Settlement Commission to grant immunity from prosecution and penalty - Held that:- It is true that ordinarily the settlement comes as a package and composite tax statement is either to be accepted or rejected. The settlement tax cannot be accepted only in part. Where, however, the settlement is under different heads, which are segregable there is no reason why the part of the settlement which is legally unsustainable cannot be set aside, if the same is segregable. In the instant case, the Settlement Commission, has allowed the demand of the department in full in respect of Central Excise duty, Education Cess, interest and even penalty and given the writ petitioners relief only from prosecution. The penalty being segregable and legally unsustainable, the same is liable to be set aside by this Court.
For the reasons discussed above, the writ petition is allowed. The impugned Final Order passed by the Customs and Excise Settlement Commissioner, Additional Bench, Kolkata, is set aside to the extent it purports to levy penalty on the petitioners. The concerned respondents shall forthwith, and in any case within two months from the date of receipt of a certified copy of this order, refund the penalty amount paid by and/or realized from the respective writ petitioners.
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2014 (5) TMI 1102 - ITAT AHMEDABAD
Disallowance out of purchases - difference found between the credit entry in the bank account and sale proceeds - Held that:- It is true that without purchase no sale can be executed. The appellant had not produced the books of accounts before the AO, however made available copy of bank account to the AO on which addition had been made. The appellant had shown net profit on sale of ₹ 32.01 lac @ 4.08%. The AO made addition without comparing any case in the similar line of business @ 25% and disallowed the expenses on estimated basis. He made addition on account of difference found between the credit entry in the bank account and sale proceeds shown by the assessee at ₹ 17,31,629/-. The AO has not brought any material on record that the assessee had made purchases outside the books of accounts. The sales included the cost of purchase plus expenses and net profit.
Therefore, the whole sale proceeds cannot be added as income of the assessee. As suggested by the ld.counsel for the assessee that 5% on net profit of total credit entries, i.e. ₹ 49,32,992/- be taken as income of the assessee which comes to ₹ 2,46,649/-. The appellant had already disclosed income at ₹ 1,30,757/- and returned income at ₹ 95,114/-. After reducing the amount of returned income, the net addition is worked out at ₹ 1,15,892/-; whereas as per the peak theory of investment, the maximum balance was at ₹ 2,05,643/-. The appellant had not established that all the cash deposited in the bank account came from the sale proceeds of the assessee. In the absence of complete books of accounts, we estimate the assessee’s income for the year under consideration at ₹ 2.05 lacs on the basis of ‘peak’ plus ‘income’ disclosed by the assessee in the return. When assessee’s income has been estimated on the basis of facts, no other addition remained to be justified as held by the various courts on this issue. - Decided partly in favour of assessee
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2014 (5) TMI 1101 - ITAT AHMEDABAD
Addition on account of assessee’s saving bank account - peak amount of entries - Held that:- We find that the fact that SB account of the assessee with “SNCB” was not disclosed in the account book of the assessee nor it was disclosed to the department, could not be controverted on behalf of the assessee. However, the action of the Department in adding the entire aggregate of the credit entries in the said bank account is not in accordance with the settled position of law. In such a case, only the peak amount of entries could be added as income in the hands of the assessee. Since the account of the assessee was undisclosed to the department and the peak amount is addable as income in the hands of the assessee, the plea of the Revenue that the assessee should prove the co-relation between the credit and debit entries in the said bank account, is not sustainable. In the facts and circumstances of the case, and in accordance with the settled law, we direct the AO to determine the peak amount in the said SB Account No.1001926 with “SNCB” and restrict the addition to the peak amount only, and this part of the ground of the appeal of the assessee is partly allowed.
With regard to the other addition of ₹ 40,000/- on account of inflation in opening stock, no argument was addressed on behalf of the assessee before us, and accordingly, the ground of the appeal of the assessee, with regard to the issue of this addition of ₹ 40,000/- on account of inflation in opening stock figure is dismissed. - Decided partly in favour of assessee.
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2014 (5) TMI 1100 - ITAT PUNE
Eligibility for deduction u/s.80P(2)(a)(i) - to whether the addition if any sustained u/s. 40(a)(ia) is eligible for deduction u/s.80P(2)(a)(i)? - Held that:- Addition made u/s.40(a)(ia) has to be allowed as deduction u/s.80P(2)(a)(i) of the I.T. Act. See Pharande Developers Versus ITO [2013 (6) TMI 690 - ITAT PUNE ]. In this view of the matter, the ground raised by the Revenue is accordingly dismissed.- Decided in favour of assessee
Addition on gross amount of MSEB commission - Held that:- We find merit in the submission of the Ld. Counsel for the assessee that pro-rata expenditure should be allowed to the assessee for earning the commission since the assessee has to incur various expenditure and such pro-rate expenditure comes to 91.40%. If the said rate is applied then the net income from MSEB commission after considering the expenditure works out to ₹ 19,531/- which is below ₹ 50,000/- and is eligible for deduction u/s.80P(2)(c). - Decided in favour of assessee
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2014 (5) TMI 1099 - ITAT PUNE
Eligibility for deduction u/s 80P(2)(a)(i) - Held that:- The income earned by co-operative society, engaged in the business of providing credit facility to its members is exempt. The assessee has earned income from facilities provided to its members. The fact that the income earned from members from loans advanced, which were partially secured out of borrowing from NDCC Bank, does not make any difference. Nowhere, it has been provided in the above section that in order to earn income from providing credit facilities to its members, amount used for giving credit facilities to its members should not be from borrowing from cooperative banks. In view of above, the CIT(A) was justified in observing that the assessee is eligible for deduction u/s 80P(2)(a)(i) - Decided in favour of assessee
Addition on account of income from cash collection counter - Held that:- the business activity of credit co-operative society and co-operative banks are similar in respect of accepting deposits, providing credit facilities and also carrying on activity of electricity bills, telephone bills collection centre. The Hon’ble Bombay High Court in the case of CIT Vs. Ahmednagar District Central Co-operative Bank Ltd. (2003 (7) TMI 50 - BOMBAY High Court ) has laid down that the activity of collecting bills, dues and charges for and on behalf of government, local authority, MTNL, BEST, MSEB, etc. is akin to banking activity and is eligible for deduction u/s. 80P(2)(a)(i). In view of above, the CIT(A) was justified in directing the Assessing Officer to allow the deduction u/s. 80P(2)(a)(i) in respect of the said income - Decided in favour of assessee
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2014 (5) TMI 1098 - ITAT MUMBAI
Additions made u/s 153C - Held that:- Additions are not sustainable when there is no indication of incriminating material having been found in the course of search to be used against the assessee.
Regarding the addition of ₹ 3.60 lakhs, being income from Bombay Rayon Fashions Ltd, it is submitted that the Assessing Officer made estimated additions based on the statement recorded during the assessment proceedings u/s 131 of Act. It is the case where AO estimated the income for personal use at the rate of ₹ 30,000/- per month and the same is not supported by any incriminating material. As stated above, such additions are not sustainable in law. Therefore, we are of the opinion that the additional ground raised by the assessee is allowed in his favour.
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2014 (5) TMI 1097 - ALLAHABAD HIGH COURT
Imposition of penalty - Excess of the jurisdiction conferred - Petitioner claimed that as per the provision of section 22(3)(b) of the Act read over rule 45 of the U. P. VAT Rules as existing at that time, there was no requirement of indicating the name and address of the purchaser in the cash memo, therefore, imposition of penalty amounts to harassment - Held that:- the Deputy Commissioner (Assessment) had the authority to issue a notice under section 54 of the Act. The notice so issued was for the alleged violation of the provision of section 22(3)(b) of the Act. Whether or not the petitioner has violated the provision is a question of fact which can be easily explained by the petitioner before the authority concerned. Once the court finds that the authority had the jurisdiction to issue a notice, the basis on which the writ of prohibition is sought for by the petitioner disappears. The prayer for the issue of a writ of prohibition restraining the authorities from proceeding in the matter is essentially based on the constitutional challenge that the authority had no jurisdiction in the matter.
Once we have held that the authority had the jurisdiction to issue notice and proceed in the matter, the basis on which the writ of prohibition is sought by the petitioner disappears. It is not a case where the petitioner was being put to unnecessary harassment at the hands of the authority nor it is a case where a writ of prohibition should be issued because the authority had no jurisdiction to proceed in the matter. The petitioner claim that even section 22(3)(b) of the Act did not prohibit the petitioner from issuing a cash memo without the names of the purchaser is a question of appreciation which can easily be dealt with by the authority. Therefore, this court is not inclined to issue a writ of prohibition and it would be open to the petitioner to file a reply to the notices issued by the authority under section 54 of the Act and satisfy the authority that no case of penalty is made out in the light of the provisions of the Act. - Decided against the petitioner
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