M/s. Gujarat Industries Power Co.Ltd., Baroda V. The Dy.CIT.,Circle-1(1), Vadodara

CO 111/AHD/2015

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4769 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 9 month(s) 17 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 12-04-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 25-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 147; 43B; 115JB; 13

Judgement Text

, ‘D’ । IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD (Convened through Virtual Court) BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR & SHRI WASEEM AHMED, ACCOUNTANT MEMEBR आयकर अपील सं./I.T.A. Nos. 472/Ahd/2013, 535/Ahd/2014, 1257/Ahd/2015 A/w. CO No .111/Ahd/2015 & 2463/Ahd/2016 A/w. C O No.207/Ahd/2016 ( Assess ment Ye ar : 2009-10, 2010-11,2011-12 & 2012-13) Gu ja rat I n du str ie s Pow er Co. Lt d. P. O. P et ro ch e mica ls, D is t. - Bar od a - 39 13 46 / V s . De pu ty C o mmi ss io ner o f In co me T ax Cir cl e- 1( 1), Aa yk a r Bh av an , Ra ce Co ur se, V ad od ar a यी ल सं./ ीआ आर सं./P A N / G IR N o . : A A A C G 7 2 7 7 Q (Appellant/ Respondent/Cross Objector) . . (Appellant/Respondent) र क र स /Revenue by : Sh ri M oh d. Us ma n, CI T D R & Sh ri Pu ru sh ot ta m Ku ma r, Sr. D R अपील र स /Assessee by : Shri Milin Mehta, A.R. स क र D a t e o f H e a r i n g 18/01/2022 ! क र /D a t e o f P r o n o u n c e m e n t 13/04/2022 ORDER PER BENCH: This batch of six appeals filed by the Revenue and assessee and cross objection filed by the assessee are as follows: ITA Nos. 472/Ahd/2013 & Ors. (Gujarat Industrial Power Co. Ltd. ) - 2 - S l . N o . IT A / C O N o . A . Y . Fi l e d b y 1 IT A N o . 4 7 2 / A h d / 2 0 1 3 2 0 0 9 - 1 0 A s s e s s e e 2 IT A N o . 5 3 5 / A h d / 2 0 1 4 2 0 1 0 - 1 1 A s s e s s e e 3 IT A N o . 1 2 5 7 / A h d / 2 0 1 5 2 0 1 1 - 1 2 R e v e n u e 4 C O N o . 1 1 1 / A h d / 2 0 1 5 2 0 1 1 - 1 2 A s s e s s e e 5 IT A N o . 2 4 6 3 / A h d / 2 0 1 6 2 0 1 2 - 1 3 R e v e n u e 6 C O N o . 2 0 7 / A h d / 2 0 1 6 2 0 1 2 - 1 3 A s s e s s e e 2. The issues involved in these appeals are recurrin g in nature for all the assessment years, since for the sake of brevity ITA No. 1257/Ahd/2015 and CO No. 111/Ahd/2015 relevant to the Asst. Year 2011-12 is taken as lead case for disposal of the above batch of appeals. 3. The grounds of appeal raised by Revenue in ITA No. 1257/Ahd/2015 for A.Y. 2011-12 read as under: “ 1 . O n t h e f a c t s a n d i n t h e c i r c u m s t a n c e s o f t h e c as e a n d i n l a w , t h e l e a r n e d C I T ( A ) e r r e d ( i ) i n d e l e t i n g d i s a l l o w a n c e o f R s . 7 2 , 9 6 , 8 1 6 / - m a de u / s 1 4 A o f t h e I T A c t | r . w . R u l e 8 D w h i l e c o m p u t i n g B o o k P r o f it u / s 1 1 5 J B o f t h e I T A c t , i g n o r i n g t h e p r o v i s i o n s o f E x pl a n a t i o n [ 1] (f ) t o S e c t i o n 1 1 5 J B o f t h e I T ) A c t . ( i i ) ( a ) i n d e l e t i n g t h e a d d i t i o n o f R s . 4 , 7 3 , 2 7 , 3 4 5/ - ( n e t o f d e p r e c i a t i o n ) m a d e o n a c c o u n t o f c a p i t a l e x p e n d i t u re i n r e s p e c t o f s p a r e s ( b ) i n d e l e t i n g t h e a d d i t i o n o f R s . 4 6 , 8 9 , 6 6 1 / - ( n e t o f d e p r e c i a t i o n ) m a d e o n a c c o u n t o f r e p a i r s & m a i n t e n an c e c l a i m e d . ( c ) i n n o t a p p l y i n g t h e r a t i o o f t h e d e c i s i o n s i n th e c a s e o f B a l l i m a l N a v a l K i s h o r v s . C I T 2 2 2 I T R 4 1 4 ( S C ) a nd t h e S u p r e m e C o u r t d e c i s i o n i n t h e c a s e o f C I T u s S a r a v an a S p i n n i n g M i l l s P v t . L t d . ( 2 0 0 7 ) 2 9 3 I T R 2 0 1 ( S C ) , to t h e f a c t o f t h i s c a s e . ( i i i ) i n a l l o w i n g t h e s u n d r y b a l a n c e w r i t t e n o f f a m o u n t i n g t o R s . 5 , 0 2 , 0 4 2 / - w h i l e c o m p u t i n g d e d u ct i o n u / s 8 0 I A o f t h e I T A c t . ” ITA Nos. 472/Ahd/2013 & Ors. (Gujarat Industrial Power Co. Ltd. ) - 3 - 4. The grounds of appeal raised by assessee in cross objection (CO No. 111/Ahd/2015) for A.Y. 2011-12 read as under: “ A l l t h e g r o u n d s o f a p p e a l i n t h i s a p p e a l a r e m u t u al l y e x c l u s i v e a n d w i t h o u t p r e j u d i c e t o e a c h o t h e r . 1 . T h e l e a r n e d C o m m i s s i o n e r o f I n c o m e T a x ( A p p e a l s ) - 1 , V a d o d a r a [ " t h e C I T (A )"] e r r e d i n f a c t a n d i n l a w i n c o n f i r m i n g t h e a c t i o n o f D e p u t y C o m m i s s i o n e r o f I n co m e T a x , C i r c l e - 1 ( 1 ) , B a r o d a (" t h e A O " ) i n r e o p e n i n g t he a s s e s s m e n t u / s 1 4 7 o f t h e I n c o m e T a x A c t , 1 9 6 1 (" t he A c t " ). D i s a l l o w a n c e u / s . 1 4 A : 2 . T h e l e a r n e d C I T ( A ) e r r e d i n f a c t a n d i n l a w i n co n f i r m i n g t h e a c t i o n o f A O i n m a k i n g d i s a l l o w a n c e b y i n v o k i n g t h e p r o v i s i o n o f s e c t i o n 1 4 A o f t h e A c t a n d a l s o i n d i re c t i n g t h e A O t o r e c a l c u l a t e t h e a m o u n t o f d i s a l l o w a n c e a s p e r R u l e 8 D o f t h e I n c o m e T a x R u l e s , 1 9 6 2 (" t h e R u l e s " ). 3 . Wi t h o u t p r e j u d i c e t o a b o v e , t h e l e a r n e d C I T ( A ) e r r e d i n f a c t a n d i n l a w i n r e j e c t i n g t h e c o n t e n t i o n o f t h e A p p e ll a n t t h a t i n t e r e s t o f R s . 5 , 5 0 1 . 7 4 l a c s c a n n o t b e c o n s i d e r e d w h i l e c o m p u t i n g t h e d i s a l l o w a n c e u / s . 1 4 A o f t h e A c t . C a p i t a l E x p e n d i t u r e : 4 . T h e l e a r n e d C I T ( A ) e r r e d i n f a c t a n d i n l a w i n co n f i r m i n g t h e a c t i o n o f t h e A O i n d i s a l l o w i n g r e p a i r a n d m a i nt e n a n c e e x p e n s e s t o p l a n t & M a c h i n e r y a m o u n t i n g t o R s . 3 1 , 45 , 1 7 8 / - o n t h e g r o u n d t h a t i t i s c a p i t a l e x p e n d i t u r e d e s p i te t h e f a c t t h a t n o e n d u r i n g b e n e f i t a c c r u e d t o t h e A p p e l l a n t . 5 . Wi t h o u t p r e j u d i c e t o a b o v e , t h e l e a r n e d C I T ( A ) e r r e d i n f a c t a n d i n l a w i n n o t d i r e c t i n g t h e A O t o e n h a n c e t h e p r o f i t s f o r c o m p u t i n g d e d u c t i o n u / s . 8 0 I A b y a m o u n ts o f e x p e n s e s t r e a t e d a s c a p i t a l i n n a t u r e . Deduction u/s. 80 IA: 6 . T h e l e a r n e d C I T ( A ) e r r e d i n f a c t a n d i n l a w i n re d u c i n g t h e f o l l o w i n g a m o u n t s f r o m t h e p r o f i t s o f t h e b u s i n e s s f o r t h e p u r p o s e o f c o m p u t i n g t h e d e d u c t i o n u / s S O L A o n t h e g r o u n d t h a t t h e s a m e a r e n o t d e r i v e d f r o m t h e i n d u s t r i a l u n d e r t a k i n g . ITA Nos. 472/Ahd/2013 & Ors. (Gujarat Industrial Power Co. Ltd. ) - 4 - 7 . T h e l e a r n e d C I T ( A ) e r r e d i n f a c t a n d i n l a w i n co n f i r m i n g t h e a c t i o n o f t h e A O i n r e d u c i n g t h e g r o s s i n c o m e in s t e a d o f n e t i n c o m e f o r t h e p u r p o s e o f d e d u c t i o n u s . 8 0 I A o f t h e A c t . 8 . T h e l e a r n e d A O e r r e d i n f a c t a n d i n l a w i n n o t di r e c t i n g , t h e A O t o a l l o w d e d u c t i o n u / s . 8 0 I A o n t h e e n h a n c e d p r of i t s o n a c c o u n t o f d i s a l l o w a n c e o f e x p e n s e s t r e a t e d a s c a p it a l i n n a t u r e . 9 . T h e l e a r n e d C I T ( A ) e r r e d i n f a c t a n d i n l a w i n co n f i r m i n g t h e a c t i o n o f A O i n c h a r g i n g i n t e r e s t u / s . 2 3 4 B o f t h e A c t . 1 0 . T h e l e a r n e d C I T ( A ) e r r e d i n f a c t a n d i n l a w i n c o n f i r m i n g t h e a c t i o n o f A O i n c h a r g i n g i n t e r e s t u / s . 2 3 4 C o f t h e A c t . 1 1 . T h e l e a r n e d C I T ( A ) e r r e d i n f a c t a n d i n l a w i n c o n f i r m i n g t h e a c t i o n o f A O i n ^ c h a r g i n g i n t e r e s t u / s . 2 3 4 D o f t h e A c t . 1 2 . T h e l e a r n e d C I T ( A ) e r r e d i n f a c t a n d i n l a w i n c o n f i r m i n g t h e a c t i o n o f A O i n i n i t i a t i n g p e n a l t y p r o c e e d i n g u/ s . 2 7 1 ( l ) ( c ) o f t h e A c t . ” 5. As against this disallowances mentioned above, five disallowances wer e alread y considered by this Tribunal in ITA No. 3003/Ahd/2010 & ors. relating to A.Ys. 2003-04 & ors., P a r t i c u l a r s S u r a t P l a n t ( A m o u n t i n R s . ) S a l e o f S c r a p 1 , 4 7 , 8 0 , 3 6 2 A s h D i s p o s a l 1 , 3 5 , 5 1 , 9 1 6 R e c o v e r y o f B o n d M o n e y f r o m E m p l o y e e s 3 3 , 0 5 , 1 9 9 R e c o v e r y f r o m C o n t r a c t o r 1 , 5 4 , 2 9 3 L i q u a t e d D a m a g e s 8 , 9 3 , 5 8 2 I n s u r a n c e C l a i m s 1 , 7 5 , 3 9 , 5 9 4 T o t a l 5 , 0 5 , 2 9 , 4 1 9 ITA Nos. 472/Ahd/2013 & Ors. (Gujarat Industrial Power Co. Ltd. ) - 5 - vide order dated 28.02.2022. It is being agreed by both the parties. The issues are alread y covered in assessee’s own case in ITA No. 3003/Ahd/2010. However, issue regarding disallowance under s.14A of the Act in computation of book profit under s.115JB of the Act is a new issue to be considered by the Tribunal. The AO while computing the book profit under s.115JB of the Act of Rs.1,20,51,97,223/-. The AO added a sum of Rs.72,96,816/- which was disallowed under s.14A o f the Act . 6. The brief facts of the case are that assessee is engaged in generation of power in the form of electricity. During Asst. Year 2011-127, assessee filed its return of income dec laring Nil income and book profit u/s. 115JB of IT Act of Rs.1,20,51,97,223/-. The return of inco me was processed under s.143(1) of the Act on 07.01.20127. Subsequently, the case reopened by issuing notice u/s.148 of the Act and a detailed reassess ment order was passed on 23.01.2014 making the following Disallowances: (i) Replace ment of parts of machines treated as capital expenditure; (ii) clai m of deduction u/s.80IA of the I T Act. (iii) Disallowance under s.14A (iv) In co mputation of Book Profit u/s. 115JB (v) clai m of deduction under 43B (for A.Y. 2009-10 & 2010-11) & (vi) depreciation on Managing Director’s residence. (for A.Y. 2009-10 & 2010-11) & ITA Nos. 472/Ahd/2013 & Ors. (Gujarat Industrial Power Co. Ltd. ) - 6 - Thus, the Ld Assessing Officer deter mined the total income as ‘Nil’ under nor mal computation and book profit u/s. 115JB of the Act of Rs. 1,21,24,94,039/- and demanded the tax of Rs.17,21,980/- which includes interest under s. 234A, 234B, 234C & 234D. 7. Aggrieved against the same, the assessee ca me before the CIT( A). The CIT( A) has considered and deleted the addition by observing as follows: “ 4 . 1 Wi t h r e g a r d t o a b o v e g r o u n d o f a p p e a l t h e r e l ev a n t p a r t o f 5 - " m i s s i o n d a t e d 1 6 / 0 1 / 2 0 1 5 o f t h e A R o f t h e a p p e l la n t i s r e p r o d u c e d h e r e u n d e r f o r r e f e r e n c e : " G r o u n d N o . 3 : A d j u s t m e n t i n B o o k P r o f i t s U / s . 1 1 5 JB 2 5 . T h e A O h a s a l s o m a d e a n u p w a r d a d j u s t m e n t i n t he b o o k p r o f i t s b y t h e a m o u n t o f d i s a l l o w a n c e m a d e u / s . 1 4 A. We h a v e a l r e a d y s u b m i t t e d t h a t n o d i s a l l o w a n c e u / s . 1 4A c a n b e m a d e . We h a v e a / s o s t a t e d t h a t d i s a l l o w a n c e u / s . 1 4A c a n n o t e x c e e d R s . 1 8 . 2 6 l a c s . S i n c e t h e r e i s n o f i n d i n g t ha t t h e A p p e l l a n t h a s i n c u r r e d e x p e n s e s f o r e a r n i n g t a x f r ee i n c o m e w e s u b m i t t h a t n o a d j u s t m e n t u / s . 1 1 5 J B c a n b e m a d e. 2 6 . We r e l y o n f o l l o w i n g d e c i s i o n s w h e r e i n i t h a s b e e n h e l d t h a t e v e n i f d i s a l l o w a n c e u / s . 1 4 A i s m a d e t h e s a m e c a n no t b e a d d e d t o t h e b o o k p r o f i t s u / s . 1 1 5 J B . i ) M i n d a S a i L i m i t e d v . I T O [ I T A N o . 2 9 7 4 / D e l / 1 3 ( I T A T D e l h i ) ] I n t h e a b o v e c a s e t h e A O h a s m a d e a d d i t i o n o f d i s a l l o w a n c e u / s . 1 4 A f o r c o m p u t i n g b o o k p r o f i t u / s. 1 1 5 J B w h i c h w a s c o n f i r m e d b y t h e C I T ( A ). O n f u r t h e r a p p e a l , t h e H o n ' b l e I T A T , D e l h i h a s d e l e t e d t h e a d j u s t m e n t o f d i s a l l o w a n c e u / s . 1 4 A f o r c o m p u t i n g th e b o o k p r o f i t u / s . 1 1 5 J B a n d h e l d t h a t T h e r e i s n o e s t o p p e l a g a i n s t t h e l a w . T h e m e r e f a c t t h a t t h e a s s e s s e e h a s a c c e p t e d t h i s d i s a l l o w a n c e a f f e c t s t h at d i s a l l o w a n c e o n l y a n d n o t h i n g m o r e t h a n t h a t ; i t d oe s n o t c l o t h e s u c h a n a d j u s t m e n t , i n c o m p u t a t i o n o f b oo k p r o f i t u n d e r s e c t i o n 1 1 5 J B , w i t h l e g a l i t y . T h e r e i s n o d i s p u t e t h a t t h e r e i s n o c o r r e s p o n d i n g t a x e x e m p t ITA Nos. 472/Ahd/2013 & Ors. (Gujarat Industrial Power Co. Ltd. ) - 7 - i n c o m e . T h e r e f o r e , t h e a d j u s t m e n t i n q u e s t i o n i s i n d e e d u n s u s t a i n a b l e i n l a w . i i ) H 5 B C I n v e s t D i r e c t ( I n d i a ) L t d . v . D C I T [ I T A N os . 3 4 8 5 &3 9 4 4 / M u m / 2 0 1 2] T h e e x p e n d i t u r e d i s a l l o w e d U / S . 1 4 A i s o n l y t h a t i n cu r r e d a n d c l a i m e d b y t h e a s s e s s e e i n r e s p e c t o f d i v i d e n d i n c o m e , e x e m p t u / s . 1 0 . I t i s o n l y o n t h i s b a s i s , a n d t h i s b a s i s a l o n e , t h a t w e h a v e f o u n d E x p l a n a t i o n l (f ) t o s e c t i o n 1 1 5 JB ( s . 1 1 5 J A ) t o b e p r o v i d i n g a c l e a r l e g a l b a s i s t o t he a d j u s t m e n t q u a e x p e n d i t u r e r e l a t a b l e t o d i v i d e n d i nc o m e . T h a t t h e a m o u n t d i s a l l o w e d U / S . 1 4 A p r o v i d e s a r e a d y b a s i s f o r d e t e r m i n i n g t h e a m o u n t o f s u c h e x p e n d i t u r e i s an o t h e r m a t t e r . I t w o u l d b e a c o m p l e t e f a l l a c y a n d a t r a v e st y o f f a c t s , b e i n g w i t h o u t b a s i s a n d w h o l l y p r e s u m p t u o u s t o s t a t e o r c o n s i d e r t h a t t h e d i s a l l o w a n c e (u / s 1 4 A ) i s q u a n o t i o n a l e x p e n d i t u r e a n d n o t a g a i n s t t h a t a c t u a l l y c l a i m e d by t h e a s s e s s e s a n d , f u r t h e r , p e r i t s b o o k s o f a c c o u n t . O r d o e s i t m e a n t o s u g g e s t t h a t t h e e x p e n d i t u r e c l a i m e d i s o u ts i d e t h e b o o k s o f a c c o u n t ? We s a y s o a s w i t h o u t d o u b t t h e a d j u s t m e n t u n d e r E x p l a n a t i o n 1 c o u l d o n l y b e q u a s um s d e b i t e d o r c r e d i t e d a n d t h u s r e f l e c t e d i n t h e a c c o un t s . I n f a c t , i n t h i s r e g a r d , w e h a v e a l s o c l a r i f i e d t h a t wh e r e a n d t o t h e e x t e n t t h e r e i s a d i f f e r e n c e b e t w e e n t h e e x p e n di t u r e , i . e . , a s p e r t h e a s s e s s e e ' s b o o k s a n d t h a t a s c l a i m e d p e r i t s r e t u r n o f i n c o m e , o n l y t h e s u m d e b i t e d i n b o o k s ( t o t h e p r o f i t a n d l o s s a c c o u n t ) w o u l d h o l d . F u r t h e r , t h e de c i s i o n b y t h e t r i b u n a l i n G o e t z e ( I n d i a ) L t d . v s . C I T [ 2 0 09] 3 2 S O T 1 0 1 ( D e l ) , f o l l o w e d , i n t e r a l i a , b y t h e t r i b u n a l i n O v i r a L o g i s t i c s L t d . ( i n I T A N o s . 2 4 3 9 & 3 2 3 0 / M u m (C ) / 2 0 1 2 d a t e d 3 0 . 0 8 . 2 0 1 3 ) , s t a n d s s i n c e r e v e r s e d b y t h e h o n ' b l e hi g h c o u r t i n C I T v s . G o e t z e I n d i a L t d . [ 2 0 1 4] 3 6 1 I T R 5 0 5 (D el ) ; t h e r e l e v a n t f i n d i n g s b y t h e h o n ' b l e c o u r t a p p e a r i n g a t p g s . 5 2 9 - 5 3 1 o f i t s ' j u d g m e n t . We d e c i d e a c c o r d i n g l y . " 4 . 2 T h e a b o v e s u b m i s s i o n o f t h e a p p e l l a n t h a s b e e n c o n s i d e r e d . I n t h i s r e g a r d i t i s h e l d t h a t t h e H o n ' b l e I T A T , A hm e d a b a d i n t h e c a s e o f A l e m b i c L t d . i n I T A N o . 1 9 2 8 / 2 0 1 0 d a t e d 2 7 /0 3 / 2 0 1 4 f o r A Y 2 0 0 7 - 0 8 h a s d e c i d e d t h e s i m i l a r i s s u e i n f a v o u r o f a s s e s s e e a n d a g a i n s t t h e D e p a r t m e n t . T h e H o n ' b l e I T A T , A h m e d a b a d i n t h i s r e f e r r e d o r d e r h a s m e n t i o n e d t h a t f o r m a k i n g a d j u s tm e n t u / s 1 1 5 J B , t h e I T A T , M u m b a i B e n c h i n t h e c a s e o f M / s E ss a r T e l e h o l d i n g s L t d . v s D C I T i n I T A N o . 3 8 5 0 / M u m / 2 0 1 0 f o r 2 0 0 5 - 0 6 h a s h e l d t h a t p r o v i s i o n s o f s u b s e c t i o n 2 a n d 3 o f s e c t i o n 1 4 A c a n n o t b e i m p o r t e d i n t o c l a u s e ( f ) o f e x p l a n a t i o n to s e c t i o n 1 1 5 J B o f t h e A c t . A s p e r I T A T , A h m e d a b a d i t i s h e l d b y t he H o n ' b l e I T A T M u m b a i B e n c h t h a t c l a u s e ( f ) o f e x p l a n a t i o n 1 t o s ec t i o n 1 1 5 J B r e f e r s t o a m o u n t d e b i t e d t o P &L A c c o u n t , w h i c h c a n b e a d d e d b a c k t o t h e b o o k p r o f i t w h i l e c o m p u t i n g t h e b o o k p ro f i t u / s 1 1 5 3 B . A s p e r H o n ' b l e I T A T , A h m e d a b a d s i m i l a r v i e w s h a v e be e n t a k e n b y ITA Nos. 472/Ahd/2013 & Ors. (Gujarat Industrial Power Co. Ltd. ) - 8 - t h e I T A T , D e l h i B e n c h i n t h e c a s e o f G o e t z e ( I n d i a ) L t d . 3 2 S O T 1 0 1 . T h u s , t h e H o n ' b l e I T A T , A h m e d a b a d h a s h e l d t h at a d j u s t m e n t m a d e b y t h e A O i s n o t a s p e r l a w . R e s p e c t f u l l y f o l lo w i n g t h i s d e c i s i o n o f H o n ' b l e I T A T , A h m e d a b a d i n t h e c a s e o f A l e m b i c L t d . f o r A Y 2 0 0 7 - 0 8 i t i s h e l d t h a t t h e A O i s n o t c o r r e ct i n d i s a l l o w i n g R s . 7 2 , 9 6 , 8 1 6 / - w h i l e c o m p u t i n g b o o k p r o f i t u / s 1 1 5J B b y i n v o k i n g t h e p r o v i s i o n s o f s e c t i o n 1 4 A r e a d w i t h R u l e 8 D . I n v i e w o f t h i s t h e A O i s d i r e c t e d t o d e l e t e t h e d i s a l l o w a n c e o f R s. 7 2 , 9 6 , 8 1 6 / - w h i l e c o m p u t i n g b o o k p r o f i t u / s 1 1 5 J B . T h u s , t h e g r o un d o f a p p e a l n o . 3 o f t h e a p p e l l a n t i s a l l o w e d . ” For the well-considered reasons given in the judgment passed by the Ah medabad Bench, Mumbai bench and Delhi Bench, we have no hesitation in confirming the deletion mad e b y the CIT( A). Therefor e, this ground of appeal raised by the Revenue is hereby re jected. 8. In the re maining issues, namel y, Gr ound Nos. 1to 3, 5 &6 are being covered in assessee’s own case in ITA No. 3003/Ahd/2010 & ors. relating to A.Ys. 2003-04 & ors., dated 28.02.2022. The findings of the sa me had been r eproduced hereunder: “14. Is s u e N o . 1 r e g a r d i n g R e p l a c e m e n t o f p a r t s i n m a c h i n er i e s t r e a t e d a s c a p i t a l i n n a t u r e. T h e L d A R M r . M i l a n M e t h a a p p e a r i n g f o r t h e a s s e s s e e s u b m i s s i o n i s o f t w o f o ld s [ a] t h a t t h e A c c o u n t i n g m e t h o d o r a c c o u n t i n g t r e a t m e n t w h e t h e r st a t u t o r i l y p r e s c r i b e d u n d e r a n y l a w o r o t h e r w i s e c a n n o t o v e r r id e t h e p r o v i s i o n s o f t h e I n c o m e T a x A c t . F u r t h e r C l a s s i f i ca t i o n o f i t e m s i n t h e b o o k s i s n o t r e l e v a n t f o r d e c i d i n g t h e t r e a tm e n t o f s u c h i t e m s w h i l e c o m p u t i n g t a x a b l e i n c o m e a s h e l d b y t h e H o n ’ b l e S u p r e m e C o u r t i n t h e c a s e o f K e d a r n a t h J u t e M a n u f a ct u r i n g C o L t d - 8 2 I T R 3 6 3 . T h u s t h e b o o k e n t r i e s a r e n o t c o nc l u s i v e f o r d e t e r m i n i n g t h e n a t u r e o f e x p e n d i t u r e . T h e p r o v i s i on s o f l a w p r e v a i l o v e r t h e b o o k e n t r i e s . A c c o r d i n g l y , c o n s u m pt i o n o f s p a r e s b e i n g o n l y r e p l a c e m e n t o f s p a r e p a r t s w o u l d q u a l i f y u n d e r t h e h e a d " c u r r e n t r e p a i r s " a n d t r e a t e d a s R e v e n u e E x p e nd i t u r e . T h e L d A R s u b m i t t e d b e f o r e t h e B e n c h a “ T e c h n i c a l Wr i t e U p ” a b o u t t h e m a c h i n e r y a n d a l s o d e t a i l s o f s p a r e s c o n s u m e d at r e g u l a r i n t e r v a l s f o r v a r i o u s a s s e s s m e n t y e a r s a s f o l l o w s : ITA Nos. 472/Ahd/2013 & Ors. (Gujarat Industrial Power Co. Ltd. ) - 9 - Technical Write up Stage # 1 Bucket Kit- General Electric, USA- G.E.Fr.6 Gas Turbine G.E.Fr.6 (ms6001B) Gas Turbine is 3 Stage turbine having set of Nozzle, Bucket and Shroud in each stage. Bucket set is assembled on turbine rotor in inverted fur- tree slots provided on rotor. Stage # 2 Bucket Kit consists of 92 buckets which when assembled on the rotor forms a series like wheel. The basic function of Buckets is to convert the heat energy of hot flue gases in to mechanical energy and thereby driving the coupled generator, which generates the POWER. Stage # 3 Due to high working temperature of around 800' C and high speed of the turbine (5100 RPM), this component is the most critical in the turbine and failure of this component may lead to catastrophic damage to the machine. The buckets are designed with special profile of airfoil cross section for efficient energy conversion. It is manufactured using precision investment casing process using GTD-1 11 material, which is General Electric. USA proprietary material. To overcome very high operating temperature, Buckets are coated with proprietary Thermal Barrier Coating (TBC)-GT FN33 and designed with cooling provision. Because of the above specialties, buckets are designed and manufactured as per General Electric, USA proprietary material and process under very stringent quality control and tests. For a power generating company, these spares are in the nature of consumables spares only notwithstanding its high cost. It is also to be submitted that the Original Equipment Manufacturer which in the case of the assessee company is BHEL / General Electric, USA have very categorically prescribed the operating life of the above bucket which helps to ensure trouble free operation and to avoid any catastrophic damage to the machine. Further it is also to be stated that by replacement of the buckets on completion of 48000 hours of continuous operation the power generation capacity is neither increased nor is the power plant efficiency or life of the plant gets increased. The cost of the Gas Turbine parts such as Buckets and Nozzles are high primary due to very special metallurgy and manufacturing process provided by the manufacturer viz. General Electric. USA. The landed cost to the assessee company also increases as the same is required to be imported and thus attracts custom duty, air freight, insurance etc. T h e d e t a i l s o f s p a r e s c o n s u m e d a t r e g u l a r i n t e r v a l s f o r v a r i o u s A s s t . y e a r s i s a s u n d e r : A s s t Y e a r I t e m D e s c r i p t i o n A m o u n t ( R s . ) 2 0 0 3 - 0 4 S t a g e - 1 B u c k e t K i t , F r a m e - V I 3 , 9 6 , 9 2 , 5 5 7 ITA Nos. 472/Ahd/2013 & Ors. (Gujarat Industrial Power Co. Ltd. ) - 10 - P N o . 3 1 4 B 7 1 6 2 G 0 1 5 2 0 0 4 - 0 5 S t a g e - 1 B u c k e t K i t a l o n g w i t h s e t o f h a r d w a r e f o r G a s T u r b i n e 3 , 1 1 , 3 8 , 0 0 1 S t a g e - 1 B u c k e t K i t - C u t t e r t o o t h a l o n g w i t h s e t o f h a r d w a r e f o r G a s T u r b i n e s p a r e 2 , 3 0 , 6 1 , 2 9 2 S t a g e - 2 N o z z l e K i t w i t h i n t e r - s t a g e r u s h s e a l s f o r F R - 9 G a s T u r b i n e 9 , 7 9 , 2 0 , 7 8 8 S t a g e - 2 B u c k e t K i t , C u t t e r t e e t h d e s i g n f o r F R - 9 G a s T u r b i n e 6 , 8 8 , 2 0 , 9 4 3 2 0 0 5 - 0 6 S t a g e - 1 B u c k e t K i t a l o n g w i t h s e t o f ha r d w a r e f o r G a s T u r b i n e 3 , 3 5 , 4 4 , 3 0 5 S t a g e - 1 B u c k e t K i t - C u t t e r t o o t h a l o n g w i t h s e t o f h a r d w a r e f o r G a s T u r b i n e s p a r e 2 , 3 0 , 6 1 , 2 9 2 2 0 0 6 - 0 7 C o m p r e s s o r R o t o r B l a d e G T F r . 6 1 , 6 3 , 2 6 , 1 2 6 C o m p r e s s o r S t a t o r B l a d e G T F r . 6 2 , 1 9 , 6 5 , 9 6 1 E n t r A r m ( E x c i t o r ) 6 7 , 6 9 , 3 5 8 2 0 0 7 - 0 8 S t a g e - 1 N o z z l e A r r a n g e m e n t f o r G T F R - 6 1 , 0 6 , 0 1 , 6 7 7 S t a g e - 1 B u c k e t K i t f o r G T F R – 6 3 , 2 5 , 6 8 , 4 5 6 2 0 0 8 - 0 9 S t a g e - 1 N o z z l e - F r - 6 G a s T u r b i n e 3 , 0 7 , 1 0 , 0 0 0 S t a g e - 2 B u c k e t f o r G T F R – 6 2 , 3 0 , 2 1 , 0 0 0 1 4 . 1 . T h e s e c o n d f o l d o f a r g u m e n t o f t h e L d . C o u n s el f o r t h e a s s e s s e e i s t h a t t he spares consumed during the year under the consideration does not give enduring benefit to the assessee nor it increases the life or capacity of the machines and therefore are in nature of current repairs allowable as revenue expenditure. The assessee being in the business of generation and distribution of power requires specialized machines for generating power. Some of the parts of the machines require replacement from time to time on being used for fixed number of hours. The number of hours after which the machines are to be replaced are prescribed by the original equipment manufacturer (OEM). As soon as the machines complete the prescribed number of firing hours, the same are replaced. T h u s t he replacement is of parts of ITA Nos. 472/Ahd/2013 & Ors. (Gujarat Industrial Power Co. Ltd. ) - 11 - machines and not the entire machinery. The classification of spares in the books is not relevant for determining taxability of such items as per Income Tax Act. Fu r t h e r t he consumption of spares is 0.50% of the net block of plant and machinery as on 31.03.2005. Every year such expenditure is required to be incurred with regularity considering the nature of business. 1 4 . 2 . I n s u p p o r t o f t h i s c o n t e n t i o n t h e L d A R f u r t he r s u b m i t t e d t h a t t h i s i s s u e i s s q u a r e l y c o v e r e d b y t h e d e c i s i o n o f t h e c o - o r d i n a t e B e n c h e s o f I T A T , H y d e r a b a d i n t h e c a s e o f D C I T - V s - A P G a s P o w e r C o r p o r a t i o n L t d r e p o r t e d i n 2 0 1 4 [ I D 2] - G JX - 0 2 2 4 - T H Y D w h e r e i n a f t e r d e t a i l e d d i s c u s s i o n o f S u p r e m e Co u r t s a n d o t h e r J u d g e m e n t s h e l d a s f o l l o w s : “ ... ... 1 5 . W e h a v e h e a r d t h e s u b m i s s i o n s o f t h e p a r t ie s a n d p e r u s e d t h e o r d e r s o f t h e r e v e n u e a u t h o r i t i e s as w e l l a s o t h e r m a t e r i a l s p l a c e d o n r e c o r d . I t i s q u i t e e vi d e n t f r o m t h e f a c t s e m a n a t i n g f r o m r e c o r d t h a t t h e e x p e nd i t u r e i n c u r r e d o f R s . 2 0 , 2 1 , 4 6 , 2 7 8 / - w h i c h i s s u b j e c t m a t te r o f d i s a l l o w a n c e w a s t o w a r d s r e p a i r / r e p l a c e m e n t o f n o z zl e s , b u c k e t s , s h r o u d s , b e a r i n g s , p i e c e s a n d c o m b u s t i o n li n e r s w h i c h a r e p a r t s o f t h e t h r e e g a s t u r b i n e s u t i l i z e d f o r g e n e r a t i n g p o w e r . I t i s a l s o a f a c t t h a t t h e p o w e r g e n e r a t i o n p l a n t c o n s i s t s o f t w o s y s t e m s i . e . , g a s t u r b i n e s a n d g e n e r a t i n g u n i t . A s c a n b e n o t i c e d f r o m t h e p r oc e s s o f g e n e r a t i o n o f p o w e r a s d i s c u s s e d b y t h e C I T ( A ) i n hi s o r d e r , t h e r e i s n o i n t e r m e d i a t e p r o d u c t i n t h e g e n er a t i o n o f p o w e r . I t i s a l s o a f a c t o n r e c o r d t h a t t h e r e p l a c ed / r e p a i r e d p a r t s w e r e r e l a t i n g t o t h r e e g a s t u r b i n e s . A b o o k le t s u b m i t t e d b y t h e a s s e s s e e r e g a r d i n g o p e r a t i o n a n d m a i n t e n a n c e o f h e a v y d u t y g a s t u r b i n e c l e a r l y s h o w s t h a t a w e l l p l a n n e d m a i n t e n a n c e p r o g r a m m e i s r e q u i r e d f o r g e t t i n g t h e m a x i m um e q u i p m e n t a v a i l a b i l i t y a n d o p t i m i z a t i o n o f m a i n t e n a n c e c o s t s . T h e s a i d b o o k l et f u r t h e r s p e c i f i c a l l y n o t i f i e s t h e p a r t s w h i c h r e q u ir e c a r e f u l a t t e n t i o n a n d m a i n t e n a n c e a r e t h o s e a s s o c i a t e d w i t h t h e c o m b u s t i o n p r o c e s s t o g e t h e r w i t h t h o s e e x p o s e d t o th e h o t g a s e s d i s c h a r g e d f r o m t h e c o m b u s t i o n s y s t e m . T h i s in c l u d e c o m b u s t i o n l i n e r s , e n d c a p s , f u e l n o z z l e s a s s e m b l i es , c r o s s f i r e t u b e s , t r a n s i t i o n p i e c e s , t u r b i n e n o z z l e s , t u rb i n e s t a t i o n e r y s h r o u d s a n d t u r b i n e b u c k e t s . T h e s a i d b oo k l e t m e n t i o n s a b o u t p e r i o d i c i n s p e c t i o n a n d r e p a i r / r e f u r b i s h / r e p l a c e m e n t o f t h e a f o r e s a i d p a r t s o f t h e g a s t u r b i n e . I t a l s o m e n t i o n s t h a t w h e n t h e p a r t s ar e n o t r e p a i r a b l e , t h e y a r e t o b e r e p l a c e d . F r o m t h i s , i t i s v e r y m u c h c l e a r t h a t t h e e n t i r e g a s t u r b i n e s a r e n o t r e pl a c e d b u t s o m e o f i t s p a r t s a r e e i t h e r r e p a i r e d o r r e p l a ce d a s p e r t h e m a i n t e n a n c e r e q u i r e m e n t . I t i s t o b e n o t e d f r o m t h e d e t a i l e d d i s c u s s i o n m a d e b y t h e C I T ( A ) t h a t t h e a s se s s e e h a s s u b m i t t e d t h e d e t a i l s o f p e r i o d i c i n s p e c t i o n t o b e m a d e a s r e c o m m e n d e d b y t h e e q u i p m e n t m a n u f a c t u r e r . F u r t he r ITA Nos. 472/Ahd/2013 & Ors. (Gujarat Industrial Power Co. Ltd. ) - 12 - i t i s a f a c t t o b e t a k e n n o t e o f t h a t t h e a s s e s s e e h a s b e e n c l a i m i n g s u c h e x p e n d i t u r e t o w a r d s r e p l a c e m e n t o f n oz z l e , s h r o u d s , b u c k e t s e t c . , f r o m t h e F . Y . 1 9 9 8 - 9 9 a n d a ll a l o n g t h e d e p a r t m e n t h a s a l l o w e d s u c h e x p e n d i t u r e . T h i s fa c t h a s n o t b e e n c o n t r o v e r t e d b y t h e l e a r n e d D . R . I t i s a l so a f a c t t h a t o u t o f t h e t o t a l b l o c k o f t h e a s s e t s r e l a t i n g t o g a s t u r b i n e s o f R s . 5 1 7 c r o r e s , t h e r e p a i r a n d m a i n t e n a nc e t o t h e e x t e n t o f R s . 2 0 , 2 1 , 4 6 , 2 7 8 / - . T h e r e f o r e , c o n s i d er i n g t h e q u a n t u m o f e x p e n d i t u r e , i t c a n n o t b e s a i d t h a t t h e re i s r e p l a c e m e n t o f t h e e n t i r e g a s t u r b i n e s o a s t o b r i ng i n t o e x i s t e n c e a c o m p l e t e l y n e w a s s e t r e s u l t i n g i n e n d u ri n g b e n e f i t t o t h e a s s e s s e e . I t i s a f u r t h e r f a c t o n r ec o r d t h a t t h e a s s e s s e e ’ s c o n t e n t i o n t h a t t h e r e i s n o e n h a n c e me n t o f c a p a c i t y o f t h e g a s t u r b i n e s o r g e n e r a t i o n o f p o w e r a f t e r r e p l a c e m e n t / r e p a i r o f t h e p a r t o f t h e g a s t u r b i n e s r e m a i n s u n c o n t r o v e r t e d . T h e r e f o r e , i n t h e a f o r e s a i d c i r c u m s t a n c e s , i t c a n n ot b e s a i d t h a t t h e e x p e n d i t u r e i n c u r r e d b y t h e a s s e s s e e i n r e p a i r / r e p l a c e m e n t o f t h e p a r t s o f t h e g a s t u r b i n e , h a s r e s u l t e d i n b r i n g i n g i n t o e x i s t e n c e o f a n a s s e t o f e n d u r i n g b e n e f i t t o t h e a s s e s s e e s o a s t o t r e a t i t a s c a p i t al e x p e n d i t u r e . S o f a r a s t h e d e c i s i o n i n t h e c a s e o f C I T V/ s . S a r a v a n a S p i n n i n g M i l l s ( s u p r a ) i s c o n c e r n e d , t h e CI T ( A ) h a s c l e a r l y b r o u g h t o u t t h e d i s t i n g u i s h i n g f e a t u r e s. I t i s t o b e n o t e d t h a t i n t h e c a s e o f C I T V/ s . S a r a v a n a S p i nn i n g M i l l s , t h e r e i s a c l e a r o b s e r v a t i o n o f t h e H o n ’ b l e S u p r e m e C o u r t t h a t t h e T e x t i l e P l a n t c o n s i s t s o f d i f f e r e n t d e p a r t m e n t s h a v i n g i t s o w n i n d e p e n d e n t p l a n t s a n d m a c h i n e r y w h i c h p r o d u c e d i f f e r e n t i n t e r m e d i a t e p r o du c t s . H o w e v e r , i n t h e c a s e o f t h e a s s e s s e e t h e r e i s n o s uc h i n t e r m e d i a t e p r o d u c t s w h i c h r e q u i r e s i n d e p e n d e n t a nd s e p a r a t e p l a n t s a n d m a c h i n e r y . O n t h e c o n t r a r y , w h at t h e a s s e s s e e h a s r e p l a c e d i s c e r t a i n p a r t s o f t h e g a s tu r b i n e s a n d t h e g a s t u r b i n e s a s a w h o l e h a v e n o t b e e n r e p l ac e d . T h e r e f o r e , i n t h i s c o n t e x t t h e o b s e r v a t i o n m a d e b y t h e H o n ’ b l e S u p r e m e C o u r t i n t h e c a s e o f C I T V/ s . S a r a va n a S p i n n i n g M i l l s r a t h e r f a v o u r s t h e a s s e s s e e . B e c a u s e t h e H o n ’ b l e S u p r e m e c o u r t i n t h e s a i d d e c i s i o n h a s h e l d t h a t w h e n c e r t a i n p a r t s o f a a i r c o n d i t i o n e r o r a T . V. is r e p l a c e d , i t d o e s n o t a m o u n t t o r e p l a c e m e n t o f e n t ir e u n i t . T h e r e f o r e , a p p l y i n g t h e s a m e l o g i c t o t h e f a c t s o f t h e a s s e s s e e ’ s c a s e , i t c a n b e s a i d t h a t t h e r e i s n o r ep l a c e m e n t o f t h e g a s t u r b i n e a s a w h o l e b u t c e r t a i n r e p a i r a nd r e p l a c e m e n t t o s o m e o f t h e p a r t s o f t h e g a s t u r b i n e, w h i c h d o e s n o t r e s u l t i n b r i n g i n g i n t o e x i s t e n c e a n e w a ss e t o f e n d u r i n g n a t u r e , r a t h e r , t h e r e p a i r a n d m a i n t e n a n c e a r e o f r e c u r r i n g n a t u r e a n d e s s e n t i a l l y r e q u i r e d f o r s m o o th r u n n i n g o f b u s i n e s s o f t h e a s s e s s e e i . e , g e n e r a t i o n o f p o w e r . T h e o t h e r d e c i s i o n o f t h e H o n ’ b l e S u p r e m e C ou r t ITA Nos. 472/Ahd/2013 & Ors. (Gujarat Industrial Power Co. Ltd. ) - 13 - r e l i e d u p o n b y t h e l e a r n e d D . R . i n t h e c a s e o f C I T V/ s . S r i M a n g a y a r k a r a s i M i l l s ( P ) L t d . 3 1 5 I T R 1 1 4 a l s o f o l lo w i n g t h e d e c i s i o n i n t h e c a s e o f C I T V/ s . S a r a v a n a S p i n ni n g M i l l s ( s u p r a ) , h a s l a i d d o w n t h e s a m e p r o p o s i t i o n of l a w . O n t h e o t h e r h a n d , t h e d e c i s i o n s r e l i e d u p o n b y t h e a s s e s s e e a s n o t e d i n t h e o r d e r o f t h e C I T ( A ) c l e a r ly s u p p o r t s t h e v i e w t h a t t h e e x p e n d i t u r e i n c u r r e d b y t h e a s s e s s e e c a n n o t b e t r e a t e d a s c a p i t a l e x p e n d i t u r e . I n t h e a f o r e s a i d v i e w o f t h e m a t t e r , w e d o n o t f i n d a n y r ea s o n t o i n t e r f e r e w i t h t h e f i n d i n g s o f t h e C I T ( A ) i n t h i s re g a r d . W e t h e r e f o r e , c o n f i r m t h e o r d e r o f t h e C I T ( A ) a n d d i r ec t t h e A s s e s s i n g O f f i c e r t o d e l e t e t h e a d d i t i o n m a d e o n a cc o u n t o f d i s a l l o w a n c e o f e x p e n d i t u r e t o t h e t u n e o f R s . 2 0 , 2 1 , 4 6 , 2 7 8 / - . 1 4 . 3 . P e r c o n t r a t h e L d D R a p p e a r i n g f o r t h e R e v e n ue c o u l d n o t b r i n g a n y c o n t r a r y v i e w o n t h e a b o v e p r e p o s i t i o n b ut h o w e v e r c o n t e n t e d t h a t w h e n t h e a s s e s s e e i t s e l f c l a i m e d t h e a b o v e e x p e n s e s i n i t s b o o k s o f a c c o u n t a s “ C a p i t a l ” n o w c a n n o t c l ai m t h e s a m e a s “ R e v e n u e ” a n d r e l i e d u p o n t h e o r d e r p a s s e d b y t h e As s e s s i n g O f f i c e r a n d p r a y e d f o r c o n f i r m i n g t h e a d d i t i o n s i n ce i t i s r e c u r r i n g i n n a t u r e . 1 5 . We h a v e g i v e n o u r t h o u g h t f u l c o n s i d e r a t i o n o n th e m a t e r i a l s p l a c e d b e f o r e u s n a m e l y T e c h n i c a l Wr i t e U p , D e t a i l s o f s p a r e s c o n s u m e d a t r e g u l a r i n t e r v a l s f o r v a r i o u s A s s t . y e ar s a n d t h e c a s e l a w s r e l i e d b y t h e a s s e s s e e . We n e e d n o t l a b o u r o u rs e l f i n c o m i n g t o a c o n c l u s i o n t h a t t h e R e p l a c e m e n t o f p a r t s i n m ac h i n e r i e s t r e a t e d a s N o t C a p i t a l b u t “ R e v e n u e ” i n n a t u r e f o r t h e f o l l o w i n g r e a s o n s : a . F o r a p o w e r g e n e r a t i n g c o m p a n y , t h e s e b u c k e t sp a r e s a r e i n t h e n a t u r e o f c o n s u m a b l e s s p a r e s o n l y n o t w i t h s t a n d in g i t s h i g h c o s t . b . T h e b u c k e t s a r e d e s i g n e d w i t h s p e c i a l p r o f i l e o f a i r f o i l c r o s s s e c t i o n f o r e f f i c i e n t e n e r g y c o n v e r s i o n . c . D u e t o h i g h w o r k i n g t e m p e r a t u r e o f a r o u n d 8 0 0 ' C a n d h i g h s p e e d o f t h e t u r b i n e ( 5 1 0 0 R P M ) , t h i s c o m p o n e n t i s t h e m o s t c r i t i c a l i n t h e t u r b i n e a n d f a i l u r e o f t h i s c o m p o n en t m a y l e a d t o c a t a s t r o p h i c d a m a g e t o t h e m a c h i n e . d . I t i s a l s o s e e n f r o m t h e O r i g i n a l E q u i p m e n t M a n uf a c t u r e r n a m e l y B H E L / G e n e r a l E l e c t r i c , U S A h a v e v e r y c a t e g o ri c a l l y p r e s c r i b e d t h e o p e r a t i n g l i f e o f t h e a b o v e b u c k e t wh i c h h e l p s t o e n s u r e t r o u b l e f r e e o p e r a t i o n a n d t o a v o i d a n y c a t as t r o p h i c d a m a g e t o t h e m a c h i n e . e . F u r t h e r i t i s a l s o s t a t e d t h a t b y r e p l a c e m e n t of t h e b u c k e t s o n c o m p l e t i o n o f 4 8 0 0 0 h o u r s o f c o n t i n u o u s o p e r a t i o n th e p o w e r ITA Nos. 472/Ahd/2013 & Ors. (Gujarat Industrial Power Co. Ltd. ) - 14 - g e n e r a t i o n c a p a c i t y i s n e i t h e r i n c r e a s e d n o r i s t h e p o w e r p l a n t e f f i c i e n c y o r l i f e o f t h e p l a n t g e t s i n c r e a s e d . f . T h e c o s t o f t h e G a s T u r b i n e p a r t s s u c h a s B u c k et s a n d N o z z l e s a r e h i g h p r i m a r y d u e t o v e r y s p e c i a l m e t a l l u r g y a n d m a n u f a c t u r i n g p r o c e s s p r o v i d e d b y t h e m a n u f a c t u r e r o u t s i d e I n d i a a n d t h e a s s e s s e e c o m p a n y p r o c u r e s t h e s a m e b y i m p o r t a n d t h u s a t t r a c t s c u s t o m d u t y , a i r f r e i g h t , i n s u r a n c e et c . g . F u r t h e r t h e r e p l a c e m e n t o f p a r t s i s C a p i t a l o r Re v e n u e i s N o m o r e R e s i n t e g r a b a s e d o n t h e o b s e r v a t i o n m a d e b y th e H o n ’ b l e S u p r e m e C o u r t i n t h e c a s e o f C I T V / s . S a r a v a n a S p i nn i n g M i l l s a n d C I T V / s . S r i M a n g a y a r k a r a s i M i l l s (P ) L t d . 3 1 5 I T R 1 1 4 w h e r e i n h e l d t h a t w h e n c e r t a i n p a r t s o f a n a i r - c o n di t i o n e r o r a T . V . i s r e p l a c e d , i t d o e s n o t a m o u n t t o r e p l a c e m e n t o f e n t i r e u n i t . h . T h u s t h i s i s s u e i s a l r e a d y d e a l t b y t h e c o - o r d in a t e B e n c h e s o f I T A T , H y d e r a b a d i n t h e c a s e o f D C I T - V s - A P G a s P o we r C o r p o r a t i o n L t d w h e r e i n a f t e r d e t a i l e d d i s c u s s i o n he l d t h a t e x p e n d i t u r e i n c u r r e d b y t h e a s s e s s e e c a n n o t b e t r e at e d a s c a p i t a l e x p e n d i t u r e b u t R e v e n u e e x p e n d i t u r e o n l y . i . T h u s , a p p l y i n g t h e s a m e l o g i c t o t h e f a c t s o f t he a s s e s s e e ’ s c a s e , i t c a n b e s a i d t h a t t h e r e i s n o r e p l a c e m e n t o f t h e g a s t u r b i n e a s a w h o l e b u t c e r t a i n r e p a i r a n d r e p l a c e m e n t t o s o m e o f t h e p a r t s o f t h e g a s t u r b i n e , w h i c h d o e s n o t r e s u l t i n b r i n g i n g i n t o e x i s t e n c e a n e w a s s e t o f e n d u r i n g n a t u r e , r a t h e r , t h e r e p a i r a nd m a i n t e n a n c e a r e o f r e c u r r i n g n a t u r e a n d e s s e n t i a l l y r e q u i r e d f or s m o o t h r u n n i n g o f b u s i n e s s o f t h e a s s e s s e e i . e , g e n e r a t i o n o f p o w e r . j . T h e r e f o r e w e h a v e n o h e s i t a t i o n i n h o l d i n g t h a t t h e r e p l a c e m e n t o f s p a r e s i n t h e m a c h i n e r i e s w o u l d b e a l l o w a b l e a s R e v e n u e e x p e n d i t u r e o n l y a n d a d d i t i o n m a d e b y t h e A O i s d i re c t e d t o b e d e l e t e d . T h u s t h e D e p a r t m e n t g r o u n d i s r e j e c t e d . 1 6 . I s s u e N o . 2 r e l a t e s t o a d d i t i o n a l c l a i m u n d e r s ec t i o n 8 0 I A o f t h e A c t . T h e L d C o u n s e l f o r t h e a s s e s s e e s u b m i t t e d t h a t t h e re i s n o d i s p u t e t h a t t h e A s s e s s e e h a s s a t i s f i e d a l l t h e c o n d i t i o n s f o r c l a i m i n g d e d u c t i o n u / s 8 0 I A o f t h e A c t . O n l y r e a s o n f o r d i s a l l o w i n g t h e c l a i m o f A s s e s s e e i s n o n - f u r n i s h i n g o f a u d i t r e p o r t a l o n g w i t h t h e r e t u r n o f i n c o m e . R e f e r r i n g t o p a g e n o s . 2 4 7 t o 2 7 4 o f t h e p a p e r b o o k t h e L d A R s t a t e d t h a t t h e A u d i t Re p o r t w a s f i l e d b e f o r e c o m p l e t i o n o f t h e A s s e s s m e n t . T h u s , i t i s s et t l e d l a w t h a t f i l i n g o f r e p o r t d u r i n g t h e p e n d e n c y o f a s s e s s m e n t p r o c e e d i n g s i s s u f f i c i e n t c o m p l i a n c e f o r c l a i m i n g d e d u c t i o n u / s 8 0I A o f t h e A c t a n d r e l i e d o n t h e j u d g e m e n t o f t h e j u r i s d i c t i o n a l Hi g h C o u r t i n t h e c a s e o f G u j a r a t O i l a n d A l l i e d I n d u s t r i e s - 2 0 1 I T R 3 2 5 . 1 7 . T h e L d A R f u r t h e r s u b m i t t e d t h a t r e g a r d i n g t h e i s s u e o f s e t o f f o f l o s s e s a s p e r s e c t i o n 8 0 I A ( 5 ) f o r c o m p u t a t i o n o f i n c o m e o f e l i g i b l e u n i t , t h e i s s u e o f " I n i t i a l A s s e s s m e n t Y e ar " i s s e t t l e d b y ITA Nos. 472/Ahd/2013 & Ors. (Gujarat Industrial Power Co. Ltd. ) - 15 - C B D T C i r c u l a r N o . 1 o f 2 0 1 6 d a t e d 1 5 - 0 2 - 2 0 1 6 . A s p er t h e C i r c u l a r , t h e t e r m ' i n i t i a l a s s e s s m e n t y e a r ' w o u l d m e a n t h e fi r s t y e a r o p t e d f o r b y t h e a s s e s s e e f o r c l a i m i n g d e d u c t io n u / s 8 0 - I A . A s p e r C B D T C i r c u l a r , A Y 2 0 0 6 - 0 7 w o u l d b e t h e I n i t ia l A s s e s s m e n t Y e a r s i n c e f o r t h e S L P P u n i t , t h e A s s e s se e h a s c l a i m e d t h e d e d u c t i o n u / s 8 0 I A f o r t h e f i r s t t i m e i n A Y 2 0 06 - 0 7 . T h e r e f o r e t h e r e q u i r e m e n t o f s e t t i n g o f f u n a b s o r b e d d e p r e c i a ti o n a n d l o s s e s s h a l l a r i s e f r o m A Y 2 0 0 7 - 0 8 i . e . i m m e d i a t e l y s u c c e ed i n g t h e i n i t i a l a s s e s s m e n t y e a r i . e . A Y 2 0 0 6 - 0 7 . 1 7 . 1 . R e l e v a n t p o r t i o n o f C B D T C i r c u l a r N o . 1 / 2 0 1 6 d a t e d 1 5 . 0 2 . 2 0 1 6 i s e x t r a c t e d b e l o w : I n t h e a b o v e s u b - s e c t i o n , w h i c h p r e s c r i b e s t h e m a n ne r o f d e t e r m i n i n g t h e q u a n t u m o f d e d u c t i o n , a r e f e r e n c e ha s b e e n m a d e t o t h e t e r m ' i n i t i a l a s s e s s m e n t y e a r ' . I t h a s b e e n r e p r e s e n t e d t h a t s o m e A s s e s s i n g O f f i c e r s a r e i n t e r pr e t i n g t h e t e r m ' i n i t i a l a s s e s s m e n t y e a r ' a s t h e y e a r i n wh i c h t h e e l i g i b l e b u s i n e s s / m a n u f a c t u r i n g a c t i v i t y h a d c o m m en c e d a n d a r e c o n s i d e r i n g s u c h f i r s t y e a r o f c o m m e n c e m e n t / o p e r a t i o n e t c . i t s e l f a s t h e f i r s t y e ar f o r g r a n t i n g d e d u c t i o n , i g n o r i n g t h e c l e a r m a n d a t e p r o vi d e d u n d e r s u b - s e c t i o n ( 2 ) w h i c h a l l o w s a c h o i c e t o t h e a s s e s s e e f o r d e c i d i n g t h e y e a r f r o m w h i c h i t d e s i r e s t o c l a im d e d u c t i o n o u t o f t h e a p p l i c a b l e s l a b o f f i f t e e n ( o r t w e n t y ) y e a r s . T h e m a t t e r h a s b e e n e x a m i n e d b y t h e B o a r d . I t i s a bu n d a n t l y c l e a r f r o m s u b - s e c t i o n ( 2 ) t h a t a n a s s e s s e e w h o i s e l i g i b l e t o c l a i m d e d u c t i o n u / s 8 0 I A h a s t h e o p t i o n t o c h o o s e th e i n i t i a l / f i r s t y e a r f r o m w h i c h i t m a y d e s i r e t h e c la i m o f d e d u c t i o n f o r t e n c o n s e c u t i v e y e a r s , o u t o f a s l a b o f f i f t e e n ( o r t w e n t y ) y e a r s , a s p r e s c r i b e d u n d e r t h a t s u b - s e ct i o n . I t i s h e r e b y c l a r i f i e d t h a t o n c e s u c h i n i t i a l a s s e s s m e n t y e a r h a s b e e n o p t e d f o r b y t h e a s s e s s e e , h e s h a l l b e e n t i t l ed t o c l a i m d e d u c t i o n u / s 8 0 1 A f o r t e n c o n s e c u t i v e y e a r s b e g i n ni n g f r o m t h e y e a r i n r e s p e c t o f w h i c h h e h a s e x e r c i s e d s u c h o p t i o n s u b j e c t t o t h e f u l f i l l m e n t o f c o n d i t i o n s p r e s c r i b e d i n t h e s e c t i o n . H e n c e , t h e t e r m ' i n i t i a l a s s e s s m e n t y e a r ' w o u l d m e a n t h e f i r s t y e a r o p t e d f o r b y t h e a s s e s s e e f o r cl a i m i n g d e d u c t i o n u / s 8 0 1 A . H o w e v e r , t h e t o t a l n u m b e r o f y ea r s f o r c l a i m i n g d e d u c t i o n s h o u l d n o t t r a n s g r e s s t h e p r e s c ri b e d s l a b o f f i f t e e n o r t w e n t y y e a r s , a s t h e c a s e m a y b e a n d t h e p e r i o d o f c l a i m s h o u l d b e a v a i l e d i n c o n t i n u i t y . T h e A s s e s s i n g O f f i c e r s a r e , t h e r e f o r e , d i r e c t e d t o a l l o w d e d u c t i o n u / s 8 0 I A i n a c c o r d a n c e w i t h t h i s c l a r i f i ca t i o n s a t i s f i e d t h a t a l l t h e p r e s c r i b e d c o n d i t i o n s a p p l i ca b l e i n a p a r t i c u l a r c a s e a r e d u l y s a t i s f i e d . P e n d i n g l i t i g a ti o n o n a l l o w a b i l i t y o f d e d u c t i o n u / s 8 0 I A s h a l l a l s o n o t b e p u r s u e d t o t h e e x t e n t i t r e l a t e s t o i n t e r p r e t i n g ' i n i t i a l as s e s s m e n t ITA Nos. 472/Ahd/2013 & Ors. (Gujarat Industrial Power Co. Ltd. ) - 16 - y e a r ' a s m e n t i o n e d i n s u b s e c t i o n ( 5 ) o f t h a t s e c t i on f o r w h i c h t h e S t a n d i n g C o u n s e l s / D . R . s b e s u i t a b l y i n s t ru c t e d . ” 1 7 . 2 . I n r e p l y , t h e L d D R a p p e a r i n g f o r t h e R e v e n u e a d m i t t e d t h a t t h e a b o v e C i r c u l a r N o . 1 / 2 0 1 6 i s s u e d b y t h e C B D T h a s p u t t o e n d a l l t h e i s s u e s f o l l o w i n g t h e j u d g e m e n t r e n d e r e d b y t h e H i g h C o u r t o f M a d r a s i n t h e c a s e o f V e l a y u t h a s a m y S p i n n i n g M i ll s . 1 8 . We h a v e g i v e n o u r t h o u g h t f u l c o n s i d e r a t i o n o n th e m a t e r i a l s p l a c e d b e f o r e u s t h e i s s u e i s n o w s e t t l e d b y t h e C ir c u l a r N o . 1 / 2 0 1 6 i s s u e d b y t h e C B D T t h a t a n a s s e s s e e w h o i s e l i g i b l e t o c l a i m d e d u c t i o n u / s 8 0 I A h a s t h e o p t i o n t o c h o o s e t h e i n it i a l / f i r s t y e a r f r o m w h i c h i t m a y d e s i r e t h e c l a i m o f d e d u c t i o n f o r t e n c o n s e c u t i v e y e a r s , o u t o f a s l a b o f f i f t e e n ( o r t w en t y ) y e a r s , a s p r e s c r i b e d u n d e r t h a t s u b - s e c t i o n . T h e C i r c u l a r f u rt h e r c l a r i f i e d t h a t o n c e s u c h i n i t i a l a s s e s s m e n t y e a r h a s b e e n o p te d f o r b y t h e a s s e s s e e , h e s h a l l b e e n t i t l e d t o c l a i m d e d u c t i o n u/ s 8 0 1 A f o r t e n c o n s e c u t i v e y e a r s b e g i n n i n g f r o m t h e y e a r i n r e s p e ct o f w h i c h h e h a s e x e r c i s e d s u c h o p t i o n s u b j e c t t o t h e f u l f i l l m e nt o f c o n d i t i o n s p r e s c r i b e d i n t h e s e c t i o n . H e n c e , t h e t e r m ' i n i t i a l a s s e s s m e n t y e a r ' w o u l d m e a n t h e f i r s t y e a r o p t e d f o r b y t h e a s s e s s e e f o r c l a i m i n g d e d u c t i o n u / s 8 0 I A . H o w e v e r , t h e t o t a l n u m b e r o f y ea r s f o r c l a i m i n g d e d u c t i o n s h o u l d n o t t r a n s g r e s s t h e p r e s c ri b e d s l a b o f f i f t e e n o r t w e n t y y e a r s , a s t h e c a s e m a y b e a n d t h e p e r i o d o f c l a i m s h o u l d b e a v a i l e d i n c o n t i n u i t y . T h u s t h e A s s e s s i n g O f f i c e r s a r e d i r e c t e d t o a l l o w d e d u c t i o n u / s 8 0 I A i n a c c o r d a n c e w i t h t h i s c l a r i f i c a t i o n a n d S t a n d i n g C o u n s e l s / D . R . s a r e s u i t ab l y i n s t r u c t e d p e n d i n g l i t i g a t i o n o n a l l o w a b i l i t y o f d e d u c t i o n u / s 8 0 I A s h a l l a l s o n o t b e p u r s u e d t o t h e e x t e n t i t r e l a t e s t o i n t e r p r et i n g ' i n i t i a l a s s e s s m e n t y e a r ' a s m e n t i o n e d i n s u b s e c t i o n ( 5 ) o f s e c t i o n 8 0 I A o f t h e A c t . 1 9 . F o l l o w i n g t h i s C i r c u l a r t h e S L P f i l e d b y t h e d ep a r t m e n t w a s a l s o d i s m i s s e d a g a i n s t H i g h C o u r t ' s r u l i n g t h a t l o ss i n y e a r e a r l i e r t o i n i t i a l a s s e s s m e n t y e a r a l r e a d y a b s o r b e d a g a i n s t p r o f i t o f o t h e r b u s i n e s s c a n n o t b e n o t i o n a l l y b r o u g h t f o r wa r d a n d s e t o f f a g a i n s t p r o f i t s o f e l i g i b l e b u s i n e s s a s n o s u c h m a nd a t e i s p r o v i d e d i n s e c t i o n 8 0 - I A ( 5 ) o f t h e I T A c t r e p o r t e d i n A s s i st a n t C o m m i s s i o n e r o f I n c o m e - t a x , T i r u p u r - V s - V e l a y u d h a sw a m y S p i n n i n g M i l l s ( P . ) L t d . r e p o r t e d i n [ 2 0 1 6] 7 6 t a xm a n n . c o m 1 7 6 ( S C ) . F o l l o w i n g t h e s a m e w e h e r e b y r e j e c t t h e G r o u nd s o f a p p e a l f i l e d b y t h e R e v e n u e a n d a l l o w t h e c l a i m o f d e d u c t io n u / s . 8 0 I A i n f a v o u r o f t h e a s s e s s e e . 2 0 . I s s u e N o . 3 r e l a t e s t o d i s a l l o w a n c e u n d e r S e c t i on 1 4 A o f t h e A c t . T h e L d C o u n s e l f o r t h e a s s e s s e e s u b m i t t e d t h a t t h e a s s e s s e e d i s c l o s e d t a x f r e e i n c o m e o f R s . 6 5 , 3 6 , 0 7 0 / - , c o m p r is i n g o f d i v i d e n d i n c o m e a n d i n t e r e s t o n t a x f r e e b o n d . H o we v e r t h e r e w e r e n o a d m i n i s t r a t i v e e x p e n s e s w e r e i n c u r r e d s i n c e t h e t a x f r e e i n c o m e w a s e s s e n t i a l l y p a s s i v e i n c o m e r e q u i r i n g n o e f f o r t s o n t h e ITA Nos. 472/Ahd/2013 & Ors. (Gujarat Industrial Power Co. Ltd. ) - 17 - p a r t o f t h e a s s e s s e e . T h e n e x t p a r t n a m e l y o f f i n a nc i a l e x p e n s e s a r e c o n c e r n e d t h e a s s e s s e e s u b m i t t e d i t h a d n o t m a de a n y i n v e s t m e n t s d u r i n g t h e y e a r i n t h e a s s e t s y i e l d i n g t h e t a x f r e e i n c o m e . T h e a d h o c d i s a l l o w a n c e o f 1 0 % o n t h e e x e mp t i n c o m e u n d e r S . 1 4 A o f t h e A c t m a d e b y t h e A O i s a g a i n s t l aw a n d t h e C I T [ A] i s a l s o n o t c o r r e c t i n d i r e c t i n g t o a d o p t R ul e 8 D , s i n c e t h e a s s e s s m e n t y e a r s a r e p r i o r t o t h e i n t r o d u c t i o n R u l e 8 D . I n t h e a b s e n c e o f a n y a d m i n i s t r a t i v e e x p e n s e s a n d n o b a r r ow e d f u n d s f o r s u c h i n v e s t m e n t s , t h e q u e s t i o n o f d i s a l l o w a n c e u / s .1 4 A i s u n w a r r e n t e d . 2 1 . P e r c o n t r a t h e L d D R a p p e a r i n g f o r t h e R e v e n u e a c c e p t e d t h a t m a n y r u l i n g s b y v a r i o u s C o u r t o n t h i s i s s u e a n d h o we v e r s u p p o r t e d t h e o r d e r s o f t h e l o w e r a u t h o r i t i e s . 2 2 . We h a v e g i v e n o u r t h o u g h t f u l c o n s i d e r a t i o n o n th e m a t e r i a l s p l a c e d b e f o r e u s , t h e i s s u e i s n o w s e t t l e d b y t h e Ho n ’ b l e S u p r e m e C o u r t i n t h e c a s e o f M a x o p p I n v e s t m e n t L t d . - V s - C om m i s s i o n e r o f I n c o m e T a x , N e w D e l h i r e p o r t e d i n [ 2 0 1 8] 9 1 t a x m a n n. c o m 1 5 4 ( S C ) w h e r e i n i t c l e a r l y h e l d t h a t R u l e 8 D i s p r o s p ec t i v e i n n a t u r e a n d c o u l d n o t h a v e b e e n m a d e a p p l i c a b l e i n r e s p e c t o f a s s e s s m e n t y e a r s p r i o r t o 2 0 0 7 w h e n t h i s r u l e w a s i n s e r t e d w . e. f . M a r c h 2 4 , 2 0 0 8 v i d e I n c o m e T a x ( F i f t h A m e n d m e n t ) R u l e s , 2 0 0 8 . F u r t h e r j u r i s d i c t i o n a l H i g h C o u r t i n t h e c a s e o f P r i n c i p a l C o m m i s s i o n e r o f I n c o m e - t a x - 4 - V s - S i n t e x I n d u s t r i e s L t d . r e p o r t e d [ 2 0 1 7] 8 2 t a x m a n n . c o m 1 7 1 ( G u j a r a t ) w h e r e i n i t i s c l e a r l y h e ld t h a t t h e E x p e n d i t u r e i n c u r r e d i n r e l a t i o n t o i n c o m e n o t i n c lu d i b l e i n t o t a l i n c o m e ( A d m i n i s t r a t i v e e x p e n s e s ) - Wh e t h e r w h e r e a ss e s s e e a l r e a d y h a d i t s o w n s u r p l u s f u n d a g a i n s t w h i c h m i n or i n v e s t m e n t w a s m a d e , n o q u e s t i o n o f m a k i n g a n y d i s a l l o w a n c e o f e x p e n d i t u r e i n r e s p e c t o f i n t e r e s t a n d a d m i n i s t r a t i v e e x p e n s e s u n d e r s e c t i o n 1 4 A a r o s e a n d , t h e r e f o r e , t h e r e w a s n o q u e s t i o n o f a n y e s t i m a t i o n o f e x p e n d i t u r e i n r e s p e c t o f i n t e r e s t a n d a d m i n i s t ra t i v e e x p e n s e s u n d e r r u l e 8 D . F u r t h e r t h e H o n ’ b l e C o u r t r e f e r r e d th e a n o t h e r d e c i s i o n i n t h e c a s e o f Pr. CIT v. India Gelatine & Chemicals Ltd. [2015] 376 ITR 553/[2016] 66 taxmann.com 356 wherein i t i s o b s e r v e d t h a t w h e n t h e a s s e s s e e h a d s u f f i c i e n t i n t e r e s t - f r e e f u n d s o u t o f w h i c h c o n c e r n e d i n v e s t m e n t s h a d b e e n m a d e , d i s a l l o w a n c e un d e r S e c t i o n 1 4 A i s n o t j u s t i f i e d . T h u s w e c l e a r i n o u r m i n d t h e d i r e c t i o n g i v e n b y t h e L d C I T [ A] t o a p p l y R u l e 8 D i s n o t p r o p e r a n d t h e r e b e i n g t h e s u r p l u s f u n d s w e r e i n v e s t e d b y t h e a s s e s s e e a n d t h e r e w e r e n o a d m i n i s t r a t i v e e x p e n s e s , t h e d i s a l l o w a n c e m a d e u / s .1 4 A i s u n w a r r a n t e d a n d l i a b l e t o b e d e l e t e d . T h u s t h e C r os s O b j e c t i o n f i l e d b y t h e a s s e s s e e i s a l l o w e d b y d e l e t i n g t h e a dd i t i o n m a d e u / s . 1 4 A o f t h e A c t . 2 3 . I s s u e N o . 4 r e l a t e s t o d e p r e c i a t i o n o n b u i l d i n g u s e d f o r M a n a g i n g D i r e c t o r ’ s r e s i d e n c e. L d A R s u b m i t t e d t h a t a s p e r t h e d e p r e c i a t i o n c h a r t i n t h e t a x a u d i t r e p o r t , a n a d d it i o n o f R s . 8 7 , 2 7 , 7 5 0 / - o n a c c o u n t o f G I P C L H o u s e u n d e r t h e h e a d f a c t o r y b u i l d i n g . T h e a s s e s s e e c l a i m e d M D ’ s h o u s e i s r e s i d en c e - c u m - ITA Nos. 472/Ahd/2013 & Ors. (Gujarat Industrial Power Co. Ltd. ) - 18 - o f f i c e b u i l d i n g i s u s e d f o r t h e p u r p o s e o f r e s i d e n ce / o f f i c e o f t h e M a n a g i n g D i r e c t o r a n d h e d i s c h a r g e s h i s o f f i c i a l d ut i e s 3 6 5 d a y s f o r o f f i c i a l m e e t i n g s , t h e r e f o r e t h e r a t e o f d e p r e ci a t i o n o f 1 0 % i s c l a i m e d b y t h e a s s e s s e e . P e r C o n t r a t h e L d D R r e l i ed o n t h e o r d e r s o f t h e L o w e r A u t h o r i t i e s . 2 4 . We h a v e g i v e n o u r t h o u g h t f u l c o n s i d e r a t i o n o n th e m a t e r i a l s p l a c e d b e f o r e u s , a s t h e b u i l d i n g i s u s e d f o r o f f i ci a l - c u m - r e s i d e n t i a l p u r p o s e b y t h e M a n a g i n g D i r e c t o r , w i t h a l l o f f i c e f a c i l i t i e s w e f i n d t h a t 1 0 % d e p r e c i a t i o n c a n b e g r an t e d o n t h i s B u i l d i n g a n d d i r e c t t h e A O t o a l l o w t h e s a m e . A c c o rd i n g l y t h e C O f i l e d o n t h i s g r o u n d i s a l l o w e d . 2 5 . I s s u e N o . 5 r e l a t e s t o d i s a l l o w a n c e o f c o n t r i b u t i o n m a d e t o v a r i o u s o r g a n i z a t i o n s : T h e a s s e s s e e c l a i m e d p a y m e n t o f R s . 2 , 0 0 , 0 0 0 / = t o S V A D E S , R s . 9 5 , 6 5 , 5 5 9 / = t o D E E P a n d R s . 1 5 , 3 6 , 5 0 0 / = t o v a r i o u s N G O s t h e s a m e w e r e d i s a l lo w e d b y t h e A O . B u t t h e L d C I T [ A] g r a n t e d r e l i e f i n c a s e s w e r e t h e a s s e s s e e h a s s u b m i t t e d C e r t i f i c a t e o f R e g i s t r a t i o n o f 8 0 G i n r e s p e c t o f p a y m e n t s m a d e t o S V A D E S a n d D E E P a n d b a l a n c e a m o u n t w a s c o n f i r m e d . 2 6 . I n o u r c o n s i d e r e d v i e w t h e C I T [ A] h a s g r a n t e d ap p r o p r i a t e r e l i e f t o t h e a s s e s s e e , w h i c h d o e s n o t r e q u i r e a n y f u r t h e r i n f e r e n c e . A c c o r d i n g l y t h e C O f i l e d o n t h i s g r o u n d i s d i s m i s s e d . 2 7 . I s s u e N o . 6 r e l a t e s t o c l a i m o f d i s a l l o w a n c e u n d e r S. 4 3 B o f t h e A c t. T h e l e a r n e d C I T ( A ) b y h i s d e t a i l e d o r d e r h a s h e l d t h a t t h e A O w a s c o r r e c t i n n o t a l l o w i n g t h e d e d u c t i o n o f i n te r e s t a m o u n t i n g t o R s . 2 , 4 9 , 8 2 , 5 9 7 / - . H o w e v e r , t h e A O i s d i r e c t e d t o a l l o w t h i s a s a d e d u c t i o n i n A Y 2 0 0 8 - 0 9 . S i m i l a r l y, t h e i n t e r e s t p a y m e n t d i s a l l o w e d i n t h e e a r l i e r y e a r , w h i c h w a s ac t u a l l y p a i d i n t h e P Y c o r r e s p o n d i n g t o A Y 2 0 0 7 - 0 8 s h o u l d b e a l l o w ed a s d e d u c t i n g i n t h i s y e a r . 2 8 . I n o u r c o n s i d e r e d v i e w t h e C I T [ A] h a s g r a n t e d ap p r o p r i a t e r e l i e f t o t h e a s s e s s e e , w h i c h d o e s n o t r e q u i r e a n y f u r t h e r i n f e r e n c e . A c c o r d i n g l y t h e C O f i l e d o n t h i s g r o u n d i s d i s m i s s e d . ” 9. In C.O. No. 117/Ahd/2009, the assessee has not pressed Ground No.1, namel y, validity of reopening of assessment. Therefore, this ground of Cross Objection is dismissed as not pressed. 10. In the result, the c aptioned appeals are : ITA Nos. 472/Ahd/2013 & Ors. (Gujarat Industrial Power Co. Ltd. ) - 19 - S l . N o . IT A / C O N o . A . Y . Fi l e d b y R e s u l t 1 IT A N o . 4 7 2 / A h d / 2 0 1 3 2 0 0 9 - 1 0 A s s e s s e e A l l o w e d 2 IT A N o . 5 3 5 / A h d / 2 0 1 4 2 0 1 0 - 1 1 A s s e s s e e Allowed 3 IT A N o . 1 2 5 7 / A h d / 2 0 1 5 2 0 1 1 - 1 2 R e v e n u e Dismissed 4 C O N o . 1 1 1 / A h d / 2 0 1 5 2 0 1 1 - 1 2 A s s e s s e e Dismissed 5 IT A N o . 2 4 6 3 / A h d / 2 0 1 6 2 0 1 2 - 1 3 R e v e n u e Dismissed 6 C O N o . 2 0 7 / A h d / 2 0 1 6 2 0 1 2 - 1 3 A s s e s s e e Dismissed Sd/- Sd/- ( WASEEM AHMED) (MAHAVIR PRASAD) ACC OUNTANT MEMB ER JUDICIAL MEMBER Ahmedabad: Dated 13/04/2022 True Copy S.K.SINHA ेश ! " #े" / Copy of Order Forwarded to:- ". र / Revenue 2. आ दक / Assessee %. सं&ं'( आयकर आय ) / Concerned CIT 4. आयकर आय ) - अपील / CIT (A) ,. - . /ीय 01 1 '(2 आयकर अपील य अ'(कर!2 अ34द & द / DR, ITAT, Ahmedabad 5. / 67 8 ल / Guard file. By order/आद श स 2 उप/स3 यक पं ीक र आयकर अपील य अ'(कर!2 अ34द & द । This Order pronounced in Open Court on 13/04/2022