Parle Bisleri Pvt.Ltd, V. ACIT Cir - 25,

CO 293/MUM/2003

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 8023 (ITAT-MUMBAI)
• Duration Of Justice: 8 year(s) 11 month(s) 1 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-11-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 20-11-2012
• Assessment Year: misc
• Appeal Filed On: 29-12-2003
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset; Business income; Depreciation; Question of law; Cost of acquisition; Capital receipt; Unabsorbed depreciation; Revenue expenditure
• Section: 2(14); 234B; 32

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI . . , , ! '# ! '# ! '# ! '# , ,, , $ $ $ $ % % % % BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER . / ITA NO. 6571/MUM./2002 ( $' ( )( / ASSESSMENT YEAR : 19992000 ) DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE25, OLD CGO ANNEX 4 TH FLOOR, 101, M.K. ROAD MUMBAI 400 020 .. *+ / APPELLANT ' V/S M/S. BISLERI SALES LTD. (FORMERLY KNOWN AS GOLDEN AGRO PRODUCTS LTD.) WESTERN EXPRESS HIGHWAY CHAKALA, ANDHERI (EAST) MUMBAI 400 099 .... ,-*+ / RESPONDENT * ./ PERMANENT ACCOUNT NUMBER AAACG5144N ,-% . / C.O. NO. 292/MUM./2003 ( . 6571 /MUM./2002 /0! 1 ) (ARISING OUT OF ITA NO. 6571/MUM./2002 ( $' ( )( / ASSESSMENT YEAR : 19992000 ) M/S. BISLERI SALES LTD. (FORMERLY KNOWN AS GOLDEN AGRO PRODUCTS LTD.) WESTERN EXPRESS HIGHWAY CHAKALA, ANDHERI (EAST) MUMBAI 400 099 .. ,-% / CROSS OBJECTOR ' V/S DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE25, OLD CGO ANNEX 4 TH FLOOR, 101, M.K. ROAD MUMBAI 400 020 .... ,-*+ / RESPONDENT * ./ PERMANENT ACCOUNT NUMBER AAATG2361E 2 3 / REVENUE BY : MR. S.D. SRIVASTAVA $' (4! 2 3 / ASSESSEE BY : MR. S.E. DASTUR A/W MR. SANJIV M. SHAH BISLERI SALES LTD & ETC. 2 . / ITA NO. 3757/MUM./2003 ( $' ( )( / ASSESSMENT YEAR : 19992000 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE8(1), AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .. *+ / APPELLANT ' V/S M/S. DELHI BISLERI CO. LTD. (FORMERLY DELHI BOTTLING CO. LTD.) WESTERN EXPRESS HIGHWAY CHAKALA, ANDHERI (EAST) MUMBAI 400 099 .... ,-*+ / RESPONDENT * ./ PERMANENT ACCOUNT NUMBER AABCD0518J ,-% . / C.O. NO. 164/MUM./2004 ( . 3757 /MUM./2003 /0! 1 ) (ARISING OUT OF ITA NO. 3757/MUM./2003 ( $' ( )( / ASSESSMENT YEAR : 19992000 ) M/S. DELHI BISLERI CO. LTD. (FORMERLY DELHI BOTTLING CO. LTD.) WESTERN EXPRESS HIGHWAY CHAKALA, ANDHERI (EAST) MUMBAI 400 099 .. ,-% / CROSS OBJECTOR ' V/S ASSTT. COMMISSIONER OF INCOME TAX CIRCLE8(1), AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .... ,-*+ / RESPONDENT * . / PERMANENT ACCOUNT NUMBER AABCD0518J BISLERI SALES LTD & ETC. 3 . / ITA NO. 2972/MUM./2003 ( $' ( )( / ASSESSMENT YEAR : 19992000 ) M/S. DELHI BISLERI CO. LTD. (BEING AMALGAMATED COMPANY OF DELHI BISLERI CO. LTD.), WESTERN EXPRESS HIGHWAY, CHAKALA, ANDHERI (EAST) MUMBAI 400 099 .. *+ / APPELLANT ' V/S INCOME TAX OFFICER WARD8(1)(3), AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .... ,-*+ / RESPONDENT * ./ PERMANENT ACCOUNT NUMBER AABCD0518J . / ITA NO. 6923/MUM./2002 ( $' ( )( / ASSESSMENT YEAR : 19992000 ) ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE25, OLD CGO ANNEX 4 TH FLOOR, 101, M.K. ROAD MUMBAI 400 020 .. *+ / APPELLANT ' V/S M/S. PARLE BISLERI PVT. LTD. WESTERN EXPRESS HIGHWAY CHAKALA, ANDHERI (EAST) MUMBAI 400 099 .... ,-*+ / RESPONDENT * ./ PERMANENT ACCOUNT NUMBER AAACP8415F ,-% . / C.O. NO. 293/MUM./2003 ( . 6923 /MUM./2002 /0! 1 ) (ARISING OUT OF ITA NO. 6923/MUM./2002 ( $' ( )( / ASSESSMENT YEAR : 19992000 ) M/S. PARLE BISLERI PVT. LTD. WESTERN EXPRESS HIGHWAY CHAKALA, ANDHERI (EAST) MUMBAI 400 099 .. ,-% / CROSS OBJECTOR ' V/S ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE25, OLD CGO ANNEX 4 TH FLOOR, 101, M.K. ROAD MUMBAI 400 020 .... ,-*+ / RESPONDENT * ./ PERMANENT ACCOUNT NUMBER AAACP8415F BISLERI SALES LTD & ETC. 4 . / ITA NO. 6552/MUM./2002 ( $' ( )( / ASSESSMENT YEAR : 19992000 ) M/S. PARLE BISLERI PVT. LTD. WESTERN EXPRESS HIGHWAY CHAKALA, ANDHERI (EAST) MUMBAI 400 099 .. *+ / APPELLANT ' V/S DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE25, OLD CGO ANNEX 4 TH FLOOR, 101, M.K. ROAD MUMBAI 400 020 .... ,-*+ / RESPONDENT * ./ PERMANENT ACCOUNT NUMBER AAACP8415F . / ITA NO. 6750/MUM./2002 ( $' ( )( / ASSESSMENT YEAR : 19992000 ) DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE25, OLD CGO ANNEX 4 TH FLOOR, 101, M.K. ROAD MUMBAI 400 020 .. *+ / APPELLANT ' V/S M/S. BISLERI ADVERTISING LTD. WESTERN EXPRESS HIGHWAY CHAKALA, ANDHERI (EAST) MUMBAI 400 099 .... ,-*+ / RESPONDENT * ./ PERMANENT ACCOUNT NUMBER AAAFJ5862D ,-% . / C.O. NO. 291/MUM./2003 ( . 6570 /MUM./2002 /0! 1 ) (ARISING OUT OF ITA NO. 6570/MUM./2002 ( $' ( )( / ASSESSMENT YEAR : 19992000 ) DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE25, OLD CGO ANNEX 4 TH FLOOR, 101, M.K. ROAD MUMBAI 400 020 .. ,-% / CROSS OBJECTOR ' V/S M/S. PARLE BISLERI PVT. LTD. WESTERN EXPRESS HIGHWAY CHAKALA, ANDHERI (EAST) MUMBAI 400 099 .... ,-*+ / RESPONDENT * ./ PERMANENT ACCOUNT NUMBER AAACP8415F BISLERI SALES LTD & ETC. 5 $' (4! 2 3 / ASSESSEE BY : MR. RAJAN R. VORA 2 3 / REVENUE BY : MR. S.D. SRIVASTAVA ' 2 ! / DATE OF HEARING 20.11.2012 ' 56) 2 ! / DATE OF ORDER 30.11.2012 ' ' ' ' / ORDER ! '# ! '# ! '# ! '# , ,, , $ $ $ $ 7 7 7 7 / PER AMIT SHUKLA, J.M. THESE ARE CROSS APPEALS AS WELL AS THE CROSS OBJECT IONS PREFERRED BY THE ASSESSEE AND THE REVENUE, WHICH ARE DIRECTED AG AINST SEPARATE IMPUGNED ORDERS PASSED BY THE LEARNED COMMISSIONER (APPEALS), MUMBAI, FOR THE ASSESSMENT YEAR 19992000. SINCE THE GROUND S RAISED IN ALL THE AFORESAID CROSS APPEALS AND THE CROSS OBJECTIONS AR E COMMON AND INTER CONNECTED, THEREFORE, AS A MATTER OF CONVENIENCE, T HESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY WAY OF THIS CONSOLIDATED ORDER. 2. WE FIRST TAKE UP REVENUES APPEAL IN ITA NO.6571/MU M./2002 AND ASSESSEES CROSS OBJECTION NO.292/MUM./2003, ARISIN G OUT OF THE ORDER DATED 16 TH SEPTEMBER 2002, PASSED BY THE COMMISSIONER (APPEAL S). FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED IN 1. DELETING THE ADDITION OF RS.2 CRORES MADE ON ACC OUNT OF L.T.CG. WHICH REPRESENTS AMOUNT RECEIVED FOR DESIST ING FROM UTILISATION OF BUSINESS KNOW-HOW; 2. DELETING THE ADDITION OF RS. 2 CRORES EVEN WHILE HOLDING THAT UTILISATION OF BUSINESS KNOW- HOW CONSTITUTES AN AS SET WITHIN THE MEANING OF SECTION 2(14) OF THE I T. ACT AND ITS RE LINQUISHMENT SHALL INVITE CHARGE OF CAPITAL GAIN IN ACCORDANCE W ITH SECTION 45 OF THE I. T. ACT: BISLERI SALES LTD & ETC. 6 3. DELETING THE ADDITION OF ` .6 CRORES FOR COMPUTING BOOK PROFIT UNDER SECTION 115JA AS THESE AMOUNTS WERE NOT CREDI TED TO P & L A/C. AND DIRECTLY BROUGHT TO RESERVE ACCOUNT IN THE BALANCE-SHEET: 4. DELETING THE ADDITION OF RS.6 CRORES MADE FOR CO MPUTING BOOK PROFIT UNDER SECTION 115JA RELYING ON THE DECI SION OF APPOLLO TYRES 255 ITR 273 WHERE THE FACTS OF THE CASE WERE DIFFERENT: 5. RELYING ON THE DECISION OF SUPREME COURT IN THE CASE OF APPOLLO TYRES 255 ITR 273 WHERE THE FACTS OF THE CA SE WERE DIFFERENT IN VIEW OF THE FACT THAT THE ARREARS OF D EPRECIATION WERE DEBITED IN PROFIT AND LOSS ACCOUNT IN THE SAID CASE . 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, WHIC H IS ENGAGED IN THE BUSINESS OF TRADING OF ARATED WATER AND CARBONATED SOFT DRINKS, HAD ENTERED INTO TRANSACTIONS DURING THE RELEVANT YEAR WITH M/S. HINDUSTAN COCO COLA BOTTLING NORTHWEST PVT. LTD., A SUBSIDIA RY OF U.S. BASED COCO COLA CO. AS PER THE SEPARATE AGREEMENTS ENTERED INT O WITH THE SAID PARTY, ON 27 TH NOVEMBER 1998, THE ASSESSEE RECEIVED FOLLOWING CON SIDERATIONS: I) SALE OF SALES GENERATING ASSETS ` 1.50 CRORES II) AGREEMENT FOR PURCHASE OF GOODWILL ` 1.00 CRORE III) AGREEMENT OF DESISTING FROM UTILISING OF BUSINESS KNOWHOW ` 5.00 CRORES 4. THE ASSESSEE HAD DECLARED THE AMOUNT RECEIVED FOR G OODWILL OF ` 1.00 CRORE AS LONG TERM CAPITAL GAIN AND WITH REGAR D TO A SUM OF ` 5.00 CRORES RECEIVED TOWARDS RESTRAINT COVENANTS AS NON TAXABLE RECEIPT IN THE RETURN OF INCOME. THE ASSESSEE, IN THE RETURN OF IN COME, MADE FOLLOWING NOTES: PURSUANT TO AGREEMENT DATED 27.11.98, THE ASSESSEE RECEIVED A SUM OF RS.1,00,00,000/- TOWARDS GOODWILL FROM HINDU STAN COCA- COLA BOTTLING NORTHWEST PVT. LTD. THE ASSESSEE WAS ADVISED THAT THE RECEIPT MAY BE BROUGHT TO TAX UNDER THE HEAD C APITAL GAINS AS LONG TERM CAPITAL GAIN. IN VIEW THEREOF; THE ASS ESSEE HAS INVESTED THE ENTIRE SUM OF RS. 1,00,00,000/- IN DSP MERILL LYNCH BOND FUND (GROWTH) (SECURITY) QUALIFYING FOR EXEMPT ION UNDER SECTION 54EA. THE TAXABLE PORTION OF CAPITAL GAINS COMPRISED THEREIN IS NIL. DETAILS ABOUT INVESTMENT IN 54EA QU ALIFYING SECURITIES ALONGWITH NECESSARY PROOF IS SENT HEREWI TH. CONSIDERATION FOR RESTRAINT & DESISTING FROM USE OF KNOW-HOW: BISLERI SALES LTD & ETC. 7 A SUM OF RS.5.00,00,000 RECEIVED BY THE COMPANY UND ER AGREEMENT DATED 27. 11.98 IN CONSIDERATION OF TEN Y EAR RESTRAINT ON RIGHT TO USE BUSINESS ENTREPRENEURSHIP AND/OR FO R RESTRAINT OR ITS RIGHT TO CAM ON SPECIFIED ACTIVITIES IS A CAPI TAL RECEIPT. WITH REGARD THERETO, THE COMPANY HAS NOT EFFECTED TRANSF ER OF ANY ASSET (MUCH LESS, CAPITAL ASSET) OWNED BY THE COMPANY WIT HIN THE MEANING OF SECTION 2(47) OF THE ACT. BASED ON JUDIC IAL PRONOUNCEMENTS AND PROFESSIONAL ADVICE, THE COMPANY HOLDS THE VIEW THAT THE IMPUGNED RECEIPT IS A NON TAXABLE CAP ITAL RECEIPT. WHILE THE ASSESSEE HOLDS THIS VIEW FIRMLY, IT HAS O UT OF ABUNDANT CAUTION DEPOSITED A SUM OF RS.3,00,00,000/- IN DSP MENU LYNCH BOND FUND (GROWTH) QUALIFYING FOR EXEMPTION UNDER S ECTION 54EA. THE ASSESSEE RESERVES THE RIGHT TO WITHDRAW THIS IN VESTMENT AND CONVERT IT INTO CASH ONCE THE NONTAXABILITY IS CON FIRMED BY THE ASSESSING OFFICER. THE DETAILS OF INVESTMENT MADE A LONGWITH NECESSARY PROOF IS SENT HEREWITH. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN AS TO WHY THE SUM OF ` 1.00 CRORE RECEIVED ON ACCOUNT OF GOODWILL AND THE SUM OF ` 5.00 CRORES RECEIVED ON ACCOUNT OF RESTRAINT COVENANTS SHOULD NOT BE TAXED. THE ASSESSING OFFICER FURTHER OBSERVED THAT BOTH THESE AMOUNTS WERE CREDI TED BY THE COMPANY DIRECTLY TO THE CAPITAL RESERVES ACCOUNT IN THE BAL ANCE SHEET AND WERE NOT CONSIDERED FOR MINIMUM ALTERNATE TAX (FOR SHORT MAT ) LIABILITY. INSOFAR AS THE SUM OF ` 1.50 CRORES RECEIVED ON ACCOUNT OF SALE OF SALES G ENERATING ASSETS ARE CONCERNED, THE ASSESSING OFFICER FOUND T HAT THE ASSESSEE HAS CREDITED THE SAME TO THE BLOCK OF ASSETS WHICH HAS BEEN OFFERED AS INCOME UNDER SECTION 50 OF THE INCOME TAX ACT, 1961 (FOR S HORT THE ACT ) WITHOUT SETOFF OF ANY LOSS, THEREFORE, THE SAME WAS ACCEPT ED. WITH REGARD TO ` 1.00 CRORE, THE ASSESSING OFFICER ACCEPTED THAT IT HAS BEEN CORRECTLY OFFERED AS LONG TERM CAPITAL GAIN AND THE SAME HAS BEEN RIGHTLY CLAIMED EXEMPT UNDER SECTION 54EA OF THE ACT AS THE AMOUNT WAS INVESTED IN THE RECOGNISED BOND. HOWEVER, WITH REGARD TO THE SUM OF ` 5.00 CRORES RECEIVED TOWARDS RESTRAINT COVENANT, THE ASSESSEE S UBMITTED THAT UNDER THE RESTRAINT AGREEMENT, THE ASSESSEE HAS AGREED TO DESIST FROM CARRYING ON OF BUSINESS ACTIVITIES CONNECTED WITH MANUFACTUR E, SALE AND DISTRIBUTION OF MARKETING OF CARBONATED SOFT DRINKS FOR A PERIOD OF TEN YEARS AND IT DOES NOT AMOUNT TO ANY TRANSFER OF CAPITAL ASSETS. VARIO US CASE LAWS WERE RELIED UPON IN SUPPORT OF THESE CONTENTIONS WHICH HAVE BEE N ENUMERATED AT PAGE5 OF THE ASSESSMENT ORDER. THE ASSESSEE, HOWEV ER, SUBMITTED THAT BISLERI SALES LTD & ETC. 8 BY WAY OF ABANDONED PRECAUTION, A SUM OF ` 3.00 CRORES WERE INVESTED INTO NOTIFIED SECURITIES UNDER SECTION 54EA. 6. THE ASSESSING OFFICER REJECTED THE ASSESSEES CONTE NTION AND ADDED THE BALANCE OF ` 2.00 CRORES AFTER OBSERVING AND HOLDING AS UNDER: THE CLAIM OF THE ASSESSEE THAT THE AMOUNT OF ` 5.00 CRORES IS NOT TAXABLE IS NOT ACCEPTABLE FOR THE FOLLOWING REASONS . A) THE VERY CIRCUMSTANCES THAT THE ASSESSEE HAS HIMSEL F INVESTED SUM OF ` 3.00 CRORES IN SECTION 54EA SECURITIES IS INDICATIVE THAT THE ASSESSEE HIMSELF REGARDS THIS A MOUNT AS REVENUE RECEIPT. B) REFERENCE TO SECTION 55(2)(A) OF THE ACT WILL SHOW THAT THE COVERAGE AND SCOPE OF SECTION IS BEING CONSISTENTLY EXPANDED WITH ATTEMPTED TAX AVOIDANCE BY THE ASSESSEE. SINCE ASSESSMENT YEAR 199899, APART FROM GOODWILL OTHER VALUABLE RIGHTS ARE ALSO COVERED. THE NONCOMPETE R IGHT IS ALSO A VALUABLE RIGHT AS EVIDENCED BY THE CONDUCT O F THE PARTIES BY PUTTING VALUE THEREON. THE RIGHT ALSO BE ING A VALUABLE RIGHT AND ASSET, IT CAN BE REGARDED AS COV ERED BY SECTION 55(2)(A) OF THE ACT. HAVING REGARD TO THE ABOVE, I REJECT THE CLAIM OF T HE ASSESSEE ABOUT NONTAXABILITY. THE ASSESSEE TRANSFERRED WAS A LONG TERM ASSET. I, THEREFORE, CONSIDER THE AMOUNT AS CHARGEA BLE UNDER SECTION 55(2)(A) SUBJECT TO EXEMPTION UNDER SECTION 54EA. THE ASSESSEE HAS INVESTED ` 3.00 CRORES IN DSP MERILL LYNCH BOND FUND (GROWTH) BEING ONE OF THE SPECIFIED SECURITIES UNDE R SECTION 54EA. THE PROOF OF INVESTMENT HAS BEEN VERIFIED. THE INVE STMENT HAS BEEN MADE WITHIN PRESCRIBED TIME OF SIX MONTHS FROM THE DATE OF TRANSFER. THE CLAIM FOR EXEMPTION IS THEREFORE ACCE PTED. BEING NIL COST ASSET, THE VALUE OF GROSS CONSIDERATION EQUATE S THE NET SALE CONSIDERATION AS ALSO CAPITAL GAINS. SINCE PART OF THE AMOUNT IS INVESTED, EXEMPTION IS EQUIVALENT TO INVESTMENT OF ` 3.00 CRORES IS ALLOWED AND THE BALANCE SUM OF ` 2.00 CRORES IS BROUGHT TO TAX A LONG TERM CAPITAL GAIN. 7. FURTHER, WITH REGARD TO THE COMPUTATION OF BOOK PRO FIT UNDER SECTION 115JA, THE ASSESSING OFFICER OBSERVED THAT THE SAME SHOULD HAVE BEEN SHOWN IN THE PROFIT & LOSS ACCOUNT AS A BOOK PROFIT FOR MAT LIABILITY INSTEAD OF DIRECTLY CREDITING IT TO THE CAPITAL RESERVES AC COUNT. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE, IN SUM AND SUBSTAN CE, SUBMITTED THAT (I) PROFIT AND LOSS ACCOUNT IS SUPPOSED TO CONTAIN NORMAL OPERATIONAL RESULTS OF THE WORKING OF THE COMPANY. ONE TIME REA LIZATION OF THE ASSETS BISLERI SALES LTD & ETC. 9 AND CAPITAL RECEIPTS NEED NOT BE ROUTED THROUGH PRO FIT AND LOSS ACCOUNT; (II) CAPITAL GAIN WHICH IS EXEMPT UNDER SECTION 54E A, CANNOT BE SUBJECTED TO TAX UNDER MAT BECAUSE THAT AMOUNTS TO DILUTING T HE EXEMPTION; AND (III) ASSESSING OFFICER IS BOUND BY THE PROFIT & LO SS ACCOUNT AS IS PRESENTED TO HIM AND HE CANNOT ALTER THE PROFIT & LOSS ACCOUN T AS PRESENTED BY THE COMPANY TO ITS SHAREHOLDERS. 8. THE ASSESSEES CONTENTION WAS REJECTED BY THE ASSES SING OFFICER AFTER GIVING DETAILED REASONING WHICH HAS BEEN ELAB ORATED FROM PAGES8 TO 13 OF THE ASSESSMENT ORDER. THE SUM AND SUBSTANCE O F THE ASSESSING OFFICERS CONCLUSION IS THAT (I) THE ASSESSEE HAS IGNORED THE PROVISIONS OF CLAUSE (B) OF EXPLANATION TO SECTION 115JA, WHILE C ALCULATING THE BOOK PROFIT AS THE SAME SHOULD HAVE BEEN PART OF THE NET PROFIT ; (II) THE CASE LAWS RELIED UPON BY THE ASSESSEE ESPECIALLY IN CASES OF IN CIT V/S BIPINCHANDRA MAGANLAL AND CO. LTD., [1961] 041 ITR 290 (SC) AND JAGDISH A. SADARANGANI V/S GOVERNMENT OF INDIA, [1998] 230 ITR 422 (SC) ARE NOT RELEVANT IN THE PRESENT CASE AS TAXABILITY OF INCOM E UNDER SECTION 115JA IS A DEEMING PROVISION AND SUPERSEDES THE NORMAL MANNE R OF COMPUTATION OF INCOME; (III) ALL KIND OF PROFITS ARE TO BE TAKEN I N THE PROFIT & LOSS ACCOUNT AS IT WOULD REFLECT THE POSITION OF ACTUAL PROFIT & LOSS OF A COMPANY. FOR THIS CONCLUSION, HE RELIED UPON THE DICTIONARY MEANING O F PROFIT & LOSS ACCOUNT ; (IV) EVEN AS PER THE REQUIREMENT OF PARTSII AND III OF SCHEDULEVI OF COMPANIES ACT, 1956, UNDER WHICH PRO FIT & LOSS ACCOUNT HAS TO BE MAINTAINED AS PER THE REQUIREMENT OF SECT ION 115JA(2), IS THAT THE COMPANY SHOULD DISCLOSE THE RESULT OF THE WORKI NG OF THE COMPANY INCLUDING CREDIT OR RECEIPT AND DEBIT OR EXPENDITUR E IN RESPECT OF NON RECURRING EXPENDITURE TRANSACTIONS OR TRANSACTION O F AN EXCEPTIONAL NATURE, THEREFORE, THE ASSESSEE SHOULD HAVE DISCLOSED THE R ECEIPTS IN QUESTION IN THE PROFIT & LOSS ACCOUNT EVEN AS PER COMPANIES ACT , 1956; (V) AS PER THE ACCOUNTING STANDARD AS/5 ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA, NET PROFIT AND LOSS FOR THE PERIOD CONTEM PLATES THAT ALL THE DISCLOSURE SHOULD BE MADE IN THE PROFIT AND LOSS IT SELF. THUS, THE ASSESSEE HAS NOT PREPARED THE PROFIT & LOSS ACCOUNT AS PER T HE REQUIREMENT OF COMPANIES ACT, 1956, AND ACCOUNTING STANDARD. WITH REGARD TO THE BISLERI SALES LTD & ETC. 10 RELIANCE PLACED BY THE ASSESSEE ON THE SPECIAL BENC H DECISION OF THE TRIBUNAL, CALCUTTA BENCH, IN SUTLEJ COTTON MILLS LT D. V/S ACIT, [1993] 045 ITD 022 (SB) (CAL.), HE HELD THAT THE REVENUE HAS N OT ACCEPTED THE SAID DECISION AND AN APPEAL HAS BEEN PREFERRED BEFORE TH E JURISDICTIONAL HIGH COURT; AND LASTLY, THE METHODOLOGY ADOPTED BY THE A SSESSEE FOR NOT ROUTING THESE RECEIPTS THROUGH PROFIT & LOSS ACCOUN T BUT DIRECTLY CREDITING TO THE CAPITAL RESERVE ACCOUNT IS NOTHING BUT A DEV ICE TO MITIGATE THE TAX LIABILITY AND, THEREFORE, THE JUDGMENT OF HON'BLE S UPREME COURT IN MCDOWELL AND CO. LTD. V/S CTO, [1985] 154 ITR 148 (SC), GETS CLEARLY APPLICABLE. IN SUPPORT OF HIS CONCLUSION, HE RELIED UPON VARIOUS DECISIONS RENDERED BY THE TRIBUNAL AS GIVEN IN PAGES12 AND 1 3 OF THE ASSESSMENT ORDER. 9. ACCORDINGLY, HE ADDED THE RECEIPT OF ` 6.00 CRORES TO THE BOOK PROFIT WHILE COMPUTING THE INCOME UNDER SECTION 115JA. 10. THE ASSESSEE, BEING AGGRIEVED BY THE STAND SO TAKEN BY THE ASSESSING OFFICER, PREFERRED FIRST APPEAL, WHEREIN BEFORE THE LEARNED COMMISSIONER (APPEALS), A DETAIL SUBMISSION WITH RE GARD TO THE NON TAXABILITY OF ` 5.00 CRORES RECEIVED TOWARDS RESTRAINT COVENANT WA S MADE AND RELIANCE WAS PLACED UPON VARIOUS CASE LAWS IN S UPPORT OF THE SAME. THE LEARNED COMMISSIONER (APPEALS), AFTER TAKING IN TO CONSIDERATION VARIOUS JUDGMENTS AS RELIED UPON BY THE ASSESSEE WH ICH HAVE BEEN DISCUSSED IN PARAS5 TO 5.5 OF THE APPELLATE ORDER AND SPECIFICALLY THE DECISION OF A COORDINATE BENCH OF THE TRIBUNAL, MU MBAI, IN KAMLESH S. SONAWALE AND HEMANT S. SONAWALE, ITA NO.4705 & 4706 /BOM. /1991, HELD THAT RECEIPT OF ` 5.00 CRORES IS CAPITAL IN NATURE AND NONTAXABLE. THE RELEVANT FINDINGS OF THE LEARNED COMMISSIONER (APPE ALS) FOR COMING TO THIS CONCLUSION IN FAVOUR OF THE ASSESSEE ARE REPRODUCED HEREIN BELOW FOR THE SAKE OF READY REFERENCE:- I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT THAT THE CASE OF THE APPELLANT IS CLEARLY THAT OF CAPITA L RECEIPT ON ACCOUNT OF RESTRICTIVE COVENANT ENTERED INTO BY APPELLANT W ITH HINDUSTAN COCA COLA BOTTLING NORTHWEST PVT. LTD. (HCCC IN SHO RT), A SUBSIDIARY OF U.S. BASED COCA COLA COMPANY (TCCC IN SHORT). ON GIVEN FACTS AS MENTIONED IN THE ASSESSMENT ORDER AND ON RECORD, IT IS CLEAR THAT BISLERI SALES LTD & ETC. 11 THE PAYMENT OF RS.5 CRORE IS ON ACCOUNT OF RESTRICT IVE COVENANT AND THEREFORE IS CLEARLY OF THE NATURE TO WHICH THE DEC ISION OF HON. ITAT A BENCH MUMBAI IN THE CASE OF ITA NO.4705 AND 470 6 QUOTED SUPRA WHEREIN THE HON. ITAT HAS FOLLOWED THE DECISI ONS OF HON. SUPREME COURT AND THE JURISDICTIONAL HIGH COURT IS CLEARLY APPLICABLE. THE ENGLISH CASES QUOTED SUPRA HAVE ONL Y PERSUASIVE IMPORTANCE BUT THEY PROVIDE IMPORTANT INPUT FOR INT ERPRETING THE LAW. THE DECISION OF HON. CALCUTTA HIGH COURT AS RE PORTED IN 34, ITR 729, CLEARLY LAYS DOWN THAT CONSIDERATION RECEIVED FOR RESTRICTIVE COVENANT IN REGARD TO ONES BUSINESS OR PROFESSION IS A CAPITAL RECEIPT. IN VIEW OF THIS DECISION ALSO, THE RECEIPT OF RS.5 CRORES IS HELD TO BE CAPITAL IN NATURE. THUS, IN VIEW OF CASE LAWS RELIED UPON BY THE APPELLANT AND MENTIONED HEREINBEFORE, I AM O F THE CONSIDERED VIEW THAT CONSIDERATION RECEIVED BY THE ASSESSEE FOR RESTRICTIVE COVENANT AT RS.5 CRORE IS A CAPITAL REC EIPT BECAUSE IT IS RECEIVED FOR FOREGOING OPPORTUNITIES B IMPAIRING T RADING STRUCTURE OF THE ASSESSEE. ON GIVEN FACTS, IT IS HELD THAT TH IS RECEIPT OF RS.5 CRORES ON ACCOUNT OF RESTRICTIVE COVENANT IS A CAPI TAL RECEIPT BECAUSE IT IMPAIRS THE TRADING STRUCTURE OF THE APP ELLANT. 5.7 ON GIVENS FACTS IT IS HELD THAT A.OS TWO FOLD ARGUMENTS, NAMELY ASSESSEES CONDUCT IN INVESTING OF RS.3 CRORES IN S ECURITIES U/S 54EA AND BROADENING OF THE AMBIT OF SECTION 55(2)(A) OF THE I T ACT, 1961 ARE HELD TO BE DEVOID OF MERIT. IN FACT I FIND MERIT IN THE SUBMISSION OF THE APPELLANT THAT THE EXTINGUISHMENT OF EVERY TYPE OF RIGHT DOES NOT GIVE RISE TO CAPITAL GAIN. THOUGH HERE, THERE IS NO EXTINGUISHMENT AS SHALL BE DISCUSSED LATER. IN THIS CONNECTION, I FIND THAT THE PROVISIONS OF LAW AS CONTAINED IN SEC TION 28(VA) BROUGHT ON STATUTE BOOK WITH EFFECT FROM 1.4.2003 B Y FINANCE ACT, 2002 LEND CREDENCE TO THIS LINE OF ARGUMENT BY THE APPELLANT. IN MY CONSIDERED VIEW, THE LAW LEGISLATED BY PARLIAMENT B Y FINANCE, 2002 CLEARLY BRINGS INTO ITS PURVIEW THE RECEIPTS ON ACC OUNT OF RESTRICTIVE COVENANTS BUT THIS LAW IS EFFECTIVE FROM 1.4.2003 A ND THEREFORE HAS NO APPLICATION TO THE A.Y. 1999-2000 WHEREIN THE AP PELLANT RECEIVED RS.5 CORES AS A CONSIDERATION FOR RESTRICT IVE COVENANTS TO CARRY OUT ITS BUSINESS AND NOT TO DISCLOSE AND USE KNOW-HOW ETC. FOR A PERIOD OF TEN YEARS. 5.8 AS REGARDS A.OS RELIANCE ON ORDER OF THE LEARN ED CIT(A) XLII IN THE CASE OF PANE SOFT DRINKS P LTD. FOR A.Y. 1998-9 9 IN APPEAL NO.CIT(A) XLIIIIT 213/JC SR 6/98-99, IT MAY BE MENT IONED THAT THERE THE PAYMENT RECEIVED IS ON ACCOUNT OF RIGHT OF FIRST REFUSAL AND HERE IN CASE OF THE APPELLANT THE CONSIDERATION IS RECEIVED ON ACCOUNT OF RESTRICTIVE COVENANT AND THUS BOTH THESE RECEIPTS ARE ON DIFFERENT FOOTINGS AND IN MY CONSIDERED VIEW, CANNO T BE SAID TO BE PARA MATERIA. I FIND CONSIDERABLE MERIT IN THE SU BMISSION OF THE APPELLANT AS CONTAINED IN WRITTEN SUBMISSION FILED ON 20.01.2002 THAT THE ISSUE OF NON-TAXABILITY OF AMOUNT RECEIVED AS A RESULT OF RESTRICTIVE COVENANT WAS NOWHERE BEFORE THE LEARNED CIT(A)XLII IN CASE OF PANE SOFT DRINKS P LTD. IN VIEW OF THIS AND IN VIEW OF DECISION OF THE HON ITAT IN CASE OF APPEAL NO.4705 AND 4706 IN CASE OF ASSISTANT ACIT V KAMLESH SONAWALA HEMANT S SONAWALA REFERRED TO SUPRA, IT IS HELD THAT CONSIDERATION RE CEIVED ON ACCOUNT OF RESTRICTIVE COVENANT IS A CAPITAL RECEIPT. BISLERI SALES LTD & ETC. 12 5.9 FOR BEING TAXED AS CAPITAL GAIN, THERE MUST BE A TRANSFER WITHIN THE MEANING OF SECTION 2(47) OF THE I.T. ACT, 1961. ON GIVEN FACTS, I AM OF THE CONSIDERED VIEW THAT THE LEARNED A.O. H AS FAILED TO PROVE THAT THERE WAS ANY SUCH TRANSFER BY THE ASSES SEE IN FAVOUR - OF HCCC. THE RESTRICTIVE COVENANT BETWEEN THE APPEL LANT AND THE HCCC DOES NOT RESULT IN ANY TRANSFER. IN FACT THE E XERCISE OF OPTION OF NOT ENGAGING INTO SPECIFIED BUSINESS ACTIVITY AN D NON-DISCLOSING OF TECHNICAL KNOW-HOW TO A THIRD PARTY AND NON-UTIL ISATION OF THE SAME FOR A PERIOD OF TEN YEARS IS, IN MY CONSIDERED VIEW, A DENIAL / RESTRICTION RESULTING INTO NON-EXERCISE OF A RIGHT INHERENT IN THE APPELLANT AND THIS RIGHT, AS A RESULT OF THE RESTRI CTIVE COVENANT, SHALL BE DORMANT FOR TEN YEARS. THUS, IN MY VIEW, THE RIG HT IS RETAINED WITH THE APPELLANT IN DORMANT FORM FOR TEN YEARS AN D THERE IS NO TRANSFER OF ANY SIGHT BY THE RESTRICTIVE COVENANT E NTERED INTO BY THE APPELLANT WITH TCCC. IN THIS VIEW OF THE MATTER, I DO NOT FIND ANY MERIT IN THE VIEWS OF THE A.O. THAT BROADENED SCOPE OF SECTION 55(2)(A) COVERS THE RECEIPT ON ACCOUNT OF PROMISE T O NOT EXERCISE THE RIGHT FOR A PERIOD OF TEN YEARS. 5.10 IN VIEW OF DISCUSSION HEREIN BEFORE AND FOLLOW ING DECISION OF HON. ITAT IN THE CASE OF APPEAL NOS. 4705 & 4706 QU OTED SUPRA WHEREIN THE HON. ITAT BENCH, MUMBAI FOLLOWED THE DE CISIONS OF HON. SUPREME COURT IN THE THREE CASES QUOTED SUPRA, IT IS HELD THAT AMOUNT OF RS. 5 CRORES RECEIVED BY THE APPELLANT FO R THE RESTRICTIVE COVENANT HAVING A LIFE OF TEN YEARS WITH HCCC WAS R ECEIVED AS A COMPENSATION FOR LOSS OF A SOURCE OF INCOME FOR A P ERIOD OF TEN YEARS AND THEREFORE WAS IN NATURE OF CAPITAL RECEIP T NOT LIABLE TO TAX. ACCORDINGLY THE ADDITION OF S.2 CRORE MADE BY THE A.O. TREATING THIS AMOUNT AS LONG TERM CAPITAL GAIN IS DELETED. 11. THE REVENUE, BEING AGGRIEVED BY THE ORDER SO PASSED BY THE LEARNED COMMISSIONER (APPEALS), IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 12. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE AMOUNT OF ` 5.00 CRORES RECEIVED BY THE ASSESSEE ON ACCOUNT OF RESTRAINT COVENANT IS NOTHING BUT EXTINGUISHMENT OF RIGHT WHICH AMOUNTS TO TRANSFER WITHIN THE MEANING OF SUBSECTION 47(II) P F SECTION 2 AND, THEREFORE, THE AMOUNT RECEIVED IS ON ACCOUNT OF TRA NSFER OF CAPITAL ASSETS LIABLE TO BE TAXED AS CAPITAL ACCOUNT AND THE ASSES SING OFFICER WAS FULLY JUSTIFIED IN TAXING THE SAME. THE LEARNED DEPARTMEN TAL REPRESENTATIVE, DURING THE COURSE OF HEARING, IN RESPONSE TO A QUER Y RAISED BY THE BENCH AS TO WHETHER THE PROVISIONS OF SECTION 55(2)(A) WO ULD BE APPLICABLE IN THIS CASE, SUBMITTED THAT PROVISIONS OF SECTION 55 WILL COME INTO FORCE ONLY WHEN IT IS HELD TO BE CAPITAL RECEIPT AND COST OF A CQUISITION IS TO BE DETERMINED AND NOT OTHERWISE. HE THUS, STRONGLY REL YING UPON THE FINDINGS BISLERI SALES LTD & ETC. 13 AND CONCLUSION DRAWN BY THE ASSESSING OFFICER SUBMI TTED THAT THE AMOUNTS RECEIVED BY THE ASSESSEE IS ON ACCOUNT OF TRANSFER OF A CAPITAL ASSET. 13. ON THE OTHER HAND, THE LEARNED SENIOR COUNSEL MR. S OLI DASTUR, SUBMITTED BEFORE US THAT FIRST OF ALL PROVISIONS OF SECTION 55(2)(A) WILL NOT BE APPLICABLE AT ALL IN THIS CASE AS THE CLAUSE REL ATING TO RIGHT TO MANUFACTURE, PRODUCE OR PROCESS ANY ARTICLE OR THIN G OR RIGHT TO CARRY ON ANY BUSINESS WILL NOT BE APPLICABLE IN THE INSTANT CASE AS THE ASSESSEE HAS RECEIVED MONEY ON ACCOUNT OF NOT TO CARRY ON ANY BU SINESS OR MANUFACTURE, PRODUCE OR PROCESS ANY ARTICLE OR THIN G. THE PROVISIONS OF SECTION 55(2)(A), THUS, STRICTLY SPEAKING, WILL NOT BE APPLICABLE AT ALL. HE FURTHER SUBMITTED THAT SUCH A RECEIPT CAN, AT BEST, BE TAXED ONLY UNDER SECTION 28(VA) OF THE ACT WHICH PROVIDES THAT ANY SUM WHETHER RECEIVED OR RECEIVABLE IN CASH OR KIND, UNDER THE AGREEMENT OF NOT CARRYING OUT ANY ACTIVITY IN RELATION TO ANY BUSINESS SHALL BE CHARG EABLE TO TAX . HOWEVER, SUCH PROVISIONS HAVE BEEN BROUGHT UNDER THE STATUTE BY FINANCE ACT, 2002, W.E.F. 1 ST APRIL 2003, WHICH IS APPLICABLE FROM THE A.Y. 2003 04. THEREFORE, THIS SECTION WILL NOT APPLY IN THE ASSES SMENT YEAR 1999-2000. HE SUBMITTED THAT THIS ISSUE HAS BEEN NOW SET AT RE ST BY THE JUDGMENT OF HON'BLE SUPREME COURT IN GUFFIC CHEM PVT. LTD. V/S CIT, [2011] 332 ITR 602 (SC) . THUS, IN VIEW OF THE JUDGMENT OF HON'BLE SUPREME COURT, SUCH A RECEIPT CANNOT BE HELD TO BE TAXABLE AT ALL IN THE IMPUGNED ASSESSMENT YEAR I.E., 19992000 AND, HENCE, THE FINDING OF THE LEARNED COMMISSIONER (APPEALS) IS TO BE UPHELD. 14. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS OF THE PARTIES, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE CASE LAWS RELIED UPON BY BOTH THE PARTIES INCLUDING THE MATERIAL AVAILABL E ON RECORD. THE ASSESSEE HAS RECEIVED A SUM OF ` 5.00 CRORES UNDER AN AGREEMENT DATED 27 TH NOVEMBER 1998, IN CONSIDERATION OF 10 YEARS OF RES TRAINT ON RIGHT TO CARRY ON BUSINESS OR TO CARRY ON SPECIFIED ACTIVITI ES MENTIONED THEREIN. THE ASSESSING OFFICER HAS TREATED THE SUM SO RECEIVED T O BE TAXABLE UNDER THE HEAD CAPITAL GAINS FIRSTLY, ON THE GROUND THAT THE ASSESSEE HAS ITSEL F INVESTED THE SUM OF ` 3.00 CRORES OUT OF THE RECEIPTS OF ` 5.00 CRORES IN BISLERI SALES LTD & ETC. 14 THE SECURITIES SPECIFIED UNDER SECTION 54EA AND, SE CONDLY, THE NON COMPETE RIGHT IS ALSO A VALUABLE RIGHT AND IS COVER ED BY SECTION 55(2)(A) OF THE ACT. WE DO NOT FIND ANY MERIT IN SUCH A CONCLUS ION DRAWN BY THE ASSESSING OFFICER FOR THE REASON THAT SECTION 55(2) (A) IS FOR THE PURPOSE OF DETERMINING THE COST OF ACQUISITION IN RELATION TO A CAPITAL ASSET WHICH ALSO INCLUDES RIGHT TO MANUFACTURE PRODUCE OR PROCESS AN Y ARTICLE OR THING OR RIGHT TO CARRY ON ANY BUSINESS. IN THE PRESENT CASE , THE ASSESSEE HAS NOT RECEIVED ANY RIGHT TO CARRY SUCH KIND OF ACTIVITIES . IN FACT, THE AMOUNT HAS BEEN GIVEN FOR NOT TO CARRY OUT ANY SUCH BUSINESS A CTIVITIES OR MANUFACTURING. REGARDING OTHER ASPECT THAT THE ASSE SSEE HAS ITSELF TREATED PART OF ITS RECEIPT AS CAPITAL GAIN BY MAKING THE I NVESTMENT IN SPECIFIED SECURITIES FOR THE PURPOSE OF EXEMPTION UNDER SECTI ON 54EA, WILL ALSO NOT HELP THE CASE OF THE REVENUE AS ONE HAS TO SEE THE NATURE OF RECEIPTS AND NOT THE CONDUCT OF THE ASSESSEE. AS RIGHTLY POINTED OUT BY THE LEARNED SENIOR COUNSEL THAT IF AT ALL THIS SUM CAN BE TREAT ED TO BE AS TAXABLE INCOME, THE SAME CAN BE TAXED UNDER THE PROVISIONS OF SECTION 28(VA) WHICH HAS BEEN BROUGHT IN THE STATUTE W.E.F. 1 ST APRIL 2003. THE HON'BLE SUPREME COURT IN GUFFIC CHEM PVT. LTD. (SUPRA) HAS HELD THAT PRIOR TO THIS PERIOD, SUCH A PAYMENT IS TO BE TREATED AS CAPITAL RECEIPT NOT LIABLE FOR TAX. THE RELEVANT OBSERVATION AND THE CONCLUSION OF THEI R LORDSHIPS ARE AS UNDER: THE POSITION IN LAW IS CLEAR AND WELL SETTLED. THER E IS A DICHOTOMY BETWEEN RECEIPT OF COMPENSATION BY AN ASSESSEE FOR THE LOSS OF AGENCY AND RECEIPT OF COMPENSATION ATTRIBUTABLE TO THE NEGATIVE / RESTRICTIVE COVENANT. THE COMPENSATION RECEIVED FOR THE LOSS OF AGENCY IS A REVENUE RECEIPT WHEREAS THE COMPENSATIO N ATTRIBUTABLE TO A NEGATIVE / RESTRICTIVE COVENANT IS A CAPITAL R ECEIPT. XXX XXX XXX ONE MORE ASPECT NEEDS TO BE HIGHLIGHTED. PAYMENT RE CEIVED AS NON-COMPETITION FEE UNDER A NEGATIVE COVENANT WAS A LWAYS TREATED AS A CAPITAL RECEIPT TILL THE ASSESSMENT YEAR 2003- 04. IT IS ONLY VIDE FINANCE ACT, 2002 WITH EFFECT FROM 1.4.2003 THAT TH E SAID CAPITAL RECEIPT IS NOW MADE TAXABLE [SEE: SECTION 28(VA)]. THE FINANCE ACT, 2002 ITSELF INDICATES THAT DURING THE RELEVANT ASSESSMENT YEAR COMPENSATION RECEIVED BY THE ASSESSEE UNDER NON- CO MPETITION AGREEMENT WAS A CAPITAL RECEIPT, NOT TAXABLE UNDER THE 1961 ACT. IT BECAME TAXABLE ONLY WITH EFFECT FROM 1.4.2003. IT I S WELL SETTLED THAT A LIABILITY CANNOT BE CREATED RETROSPECTIVELY. IN THE PRESENT CASE, COMPENSATION RECEIVED UNDER NON-COMPETITION A GREEMENT BISLERI SALES LTD & ETC. 15 BECAME TAXABLE AS A CAPITAL RECEIPT AND NOT AS A RE VENUE RECEIPT BY SPECIFIC LEGISLATIVE MANDATE VIDE SECTION 28(VA) AN D THAT TOO WITH EFFECT FROM 1.4.2003. HENCE, THE SAID SECTION 28(VA ) IS AMENDATORY AND NOT CLARIFICATORY. LASTLY, IN COMMISSIONER OF I NCOME-TAX, NAGPUR V. RAI BAHADUR JAIRAM VALJI REPORTED IN 35 I TR 148 IT WAS HELD BY THIS COURT THAT IF A CONTRACT IS ENTERED IN TO IN THE ORDINARY COURSE OF BUSINESS, ANY COMPENSATION RECEIVED FOR I TS TERMINATION (LOSS OF AGENCY) WOULD BE A REVENUE RECEIPT. IN THE PRESENT CASE, BOTH CIT (A) AS WELL AS THE TRIBUNAL, CAME TO THE C ONCLUSION THAT THE AGREEMENT ENTERED INTO BY THE ASSESSEE WITH RAN BAXY LED TO LOSS OF SOURCE OF BUSINESS; THAT PAYMENT WAS RECEIV ED UNDER THE NEGATIVE COVENANT AND THEREFORE THE RECEIPT OF `50 LAKHS BY THE ASSESSEE FROM RANBAXY WAS IN THE NATURE OF CAPITAL RECEIPT. IN FACT, IN ORDER TO PUT AN END TO THE LITIGATION, PARLIAMEN T STEPPED IN TO SPECIFICALLY TAX SUCH RECEIPTS UNDER NON-COMPETITIO N AGREEMENT WITH EFFECT FROM 1.4.2003 . 15. THUS, RESPECTFULLY FOLLOWING THE LAW LAID DOWN BY T HE HON'BLE SUPREME COURT, WE DO NOT FIND ANY MERIT IN THE GROU NDS RAISED BY THE REVENUE AND, CONSEQUENTLY, THE FINDINGS GIVEN BY TH E LEARNED COMMISSIONER (APPEALS) ARE UPHELD THAT THE SUM OF ` 5.00 CRORES IS TREATED AS A CAPITAL RECEIPT AND IS NOT CHARGEABLE TO TAX IN THE YEAR UNDER APPEAL. THUS, GROUNDS NO.1 AND 2, ARE DISMISSED. 16. WITH REGARD TO THE INCLUSION OF ` 5.00 CRORES AND ` 1.00 CRORES UNDER THE COMPUTATION OF MAT LIABILITY UNDER SECTION 115J A, THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS HEAVILY RELIED UPON THE DETAIL REASONING GIVEN BY THE ASSESSING OFFICER AND SUBMITTED THAT E VEN THOUGH SECTION 115JA PROVIDES THAT PROFIT & LOSS ACCOUNT HAS TO BE MAINTAINED IN ACCORDANCE WITH THE PROVISIONS OF PARTSII AND III OF SCHEDULEVI OF COMPANIES ACT, 1956, THE ASSESSING OFFICER ALWAYS H AS THE RIGHT TO EXAMINE AS TO WHETHER THE ASSESSEES PROFIT & LOSS ACCOUNT HAS BEEN MADE IN ACCORDANCE WITH THE SAID PROVISION OR NOT. IN CASE, THE PROFIT & LOSS ACCOUNT HAS NOT BEEN DRAWN IN ACCORDANCE WITH THE PROVISIONS OF COMPANIES ACT, 1956, HE HAS THE RIGHT TO TINKER WIT H THE ASSESSEES PROFIT & LOSS ACCOUNT WHILE COMPUTING THE INCOME UNDER SEC TION 115JA. IN SUPPORT OF HIS CONTENTION, HE HAS PLACED HEAVY RELI ANCE IN THE CASE OF KOPRAN PHARMACEUTICAL PVT. LTD. V/S DCIT, 119 ITD 3 55, WHEREIN THE TRIBUNAL, MUMBAI BENCH, HAS EVEN CONSIDERED THE JUD GMENT OF HON'BLE SUPREME COURT IN APOLLO TYERS LTD. V/S CIT, [2002] 255 ITR 273 (SC), BISLERI SALES LTD & ETC. 16 WHICH HAS BEEN HEAVILY RELIED UPON BY THE LEARNED C OMMISSIONER (APPEALS). HE SUBMITTED THAT IN THIS DECISION, THE TRIBUNAL HAS ALSO RELIED UPON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN CIT V/S VEE KAY LAL INVESTMENT CO. P. LTD., [2001] 249 ITR 597 (MUM.), WHICH IS DIRECTLY ON THE POINT. 17. ON THE OTHER HAND, THE LEARNED SR. COUNSEL, MR. DAS TUR, SUBMITTED THAT UNDER THE PROVISIONS OF EXPLANATION TO SECTION 115JA, BOOK PROFIT HAS BEEN DEFINED AS NET PROFIT AS SHOWN BY THE ASSE SSEE IN THE PROFIT & LOSS ACCOUNT FOR THE RELEVANT PREVIOUS YEAR IN ACCO RDANCE WITH THE PROVISIONS OF PARTS-II AND III OF SCHEDULE-VI OF CO MPANIES ACT, 1956. THE BASIC CONDITION IS THAT THE ASSESSEE MUST HAVE CRED ITED THE AMOUNT TO THE PROFIT & LOSS ACCOUNT. IN THE PRESENT CASE, THE ASS ESSEE HAS NOT CREDITED THE AMOUNT IN THE PROFIT & LOSS ACCOUNT BUT HAS DIR ECTLY TAKEN IT TO THE CAPITAL RESERVE ACCOUNT IN THE BALANCE SHEET. HENCE , THERE WAS NO NECESSITY TO INCREASE THE BOOK PROFIT BY RESERVES W HICH ARE NOT DEBITED TO PROFIT & LOSS ACCOUNT. HE SUBMITTED THAT THIS ISSU E HAS SINCE BEEN SETTLED BY THE HON'BLE SUPREME COURT IN APOLLO TYRES LTD. (SUPRA) AND HE DREW OUR ATTENTION TO THE QUESTION OF LAW NO.1, WHICH WA S REQUIRED TO BE ANSWERED BY THE HON'BLE SUPREME COURT AND THE RELEV ANT OBSERVATION AND FINDINGS OF THE HON'BLE SUPREME COURT GIVEN AT PAGE S-279 AND 280 OF THE JUDGMENT. HE FURTHER RELIED UPON THE DECISION OF TH E HON'BLE SUPREME COURT IN CIT V/S HCL COMNET SYSTEMS AND SERVICES LTD., [2008 ] 305 ITR 409 (SC) , WHEREIN THE PRINCIPLE LAID DOWN IN APOLLO TYRES L TD. (SUPRA) HAS BEEN REITERATED THAT THE ASSESSING OFFICER HAS TO A CCEPT THE AUTHENTICITY OF THE ACCOUNTS MAINTAINED IN ACCORDANCE WITH THE PROV ISIONS OF PARTS-II AND III OF SCHEDULE-VI OF COMPANIES ACT, 1956, WHICH HA S BEEN CERTIFIED BY THE AUDITOR AND APPROVED BY THE COMPANY IN GENERAL MEET ING. THE ASSESSING OFFICER HAS POWER ONLY TO EXAMINE AS TO WHETHER THE BOOKS OF ACCOUNT ARE DULY CERTIFIED BY THE AUTHORITIES UNDER COMPANIES A CT, 1956 OR NOT AND WHETHER SUCH BOOKS HAVE BEEN PROPERLY MAINTAINED IN ACCORDANCE WITH COMPANIES ACT, 1956. BEYOND THAT, THE ASSESSING OFF ICER HAS NO JURISDICTION TO GO BEYOND THE NET PROFIT SHOWN IN T HE PROFIT & LOSS ACCOUNT EXCEPT TO THE EXTENT PROVIDED IN THE EXPLANATION. H E SUBMITTED THAT THIS BISLERI SALES LTD & ETC. 17 PRINCIPLE HAS BEEN REITERATED IN SEVERAL DECISIONS. REGARDING THE JUDGMENT OF JURISDICTIONAL HIGH COURT IN VEE KAY LAL (SUPRA) , HE SUBMITTED THAT THE SAME HAS BEEN CONSIDERED BY THE JURISDICTIONAL HIGH COURT IN A LATER JUDGMENT OF CIT V/S AKSHAY TEXTILE TRADING, [2008] 304 ITR 401 (BOM.) . HE FURTHER RELIED UPON VARIOUS OTHER JUDGMENT RENDE RED BY THE HON'BLE SUPREME COURT AND THE JURISDICTIONAL HIGH COURT. HE , THUS, CONCLUDED THAT THE FINDINGS GIVEN BY THE COMMISSIONER (APPEALS) AR E WHOLLY IN ACCORDANCE WITH THE PROVISIONS OF LAW AND THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT. 18. IN THE REJOINDER, THE LEARNED DEPARTMENTAL REPRESEN TATIVE SUBMITTED THAT NONE OF THE DECISIONS RELIED UPON BY THE SR. C OUNSEL HAS BEEN DISTINGUISHED THE CASE OF VEE KAY LAL (SUPRA) OR HAS GIVEN ANY OBSERVATION THAT IT IS NO MORE A GOOD LAW. THE ASSESSING OFFICE R HAS NOT TINKERED WITH THE ACCOUNTS BUT HE HAS ONLY APPLIED CORRECT ACCOUN TING PRINCIPLE IN ACCORDANCE WITH THE PROVISIONS OF COMPANIES ACT, 19 56. 19. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS OF THE PARTIES, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE MATERIAL PLACED ON RECORD. THE ASSESSEE HAS CREDITED A SUM OF ` 1.00 CRORE RECEIVED TOWARDS GOODWILL AND ` 5.00 CRORES RECEIVED TOWARDS RESTRAINT COVENANT TO CAPITAL RESERVE ACCOUNT DIRECTLY IN THE BALANCE SHEET AND H AS NOT DEBITED TO THE PROFIT & LOSS ACCOUNT. THE ASSESSING OFFICERS CASE IS THAT THE SAME SHOULD HAVE BEEN SHOWN AS BOOK PROFIT AND MAT LIABILITY UNDER SECTION 115JA. SECTION 115JA IS A DEEMING PROVISION WHICH PROVIDES MAT TO BRING CERTAIN COMPANIES WITHIN THE NET OF INCOME TAX WHEREBY COMP ANIES ARE LIABLE TO PAY TAX ON AT LEAST 30% OF ITS BOOK PROFIT AS SHOWN IN ITS OWN ACCOUNT. SUB-SECTION (2) OF SECTION 115JA PROVIDES THAT FOR THE PURPOSE OF SECTION 115JA, THE COMPANY SHALL PREPARE ITS PROFIT & LOSS ACCOUNT FOR THE RELEVANT PREVIOUS YEAR IN ACCORDANCE WITH THE PROVISIONS OF PARTS-II AND III OF SCHEDULE-VI TO THE COMPANIES ACT, 1956. THUS, THE B OOK PROFIT HAS TO BE WORKED OUT AS PER THE PROFIT & LOSS ACCOUNT PREPARE D IN ACCORDANCE WITH THE PROVISIONS OF SUB-SECTION (2) OF SECTION 115JA ONLY AND THE ASSESSING OFFICER HAS TO RELY UPON THE STATEMENT OF ACCOUNTS OF THE COMPANY BISLERI SALES LTD & ETC. 18 PREPARED IN THAT MANNER ONLY. THE LIMITED SCOPE OF THE ASSESSING OFFICER IS TO EXAMINE AS TO WHETHER THE BOOKS OF ACCOUNT HAVE BEEN CERTIFIED BY THE AUTHORITY UNDER COMPANIES ACT HAVING BEEN PROPERLY MAINTAINED IN ACCORDANCE WITH THE SAID ACT. HIS SCOPE IS LIMITED ONLY FOR MAKING INCREASES AND REDUCTIONS AS PROVIDED IN THE EXPLANA TION TO THE SAID SECTION. THIS ISSUE IS NO LONGER RES INTEGRA AS THE HON'BLE SUPREME COURT IN THREE JUDGES BENCH IN APOLLO TYRES LTD (SUPRA) HAS INTERPRETED THE SCOPE OF SECTION 115JA. BEFORE THE HON'BLE SUPREME COURT, ONE OF THE MAIN QUESTIONS TO BE ANSWERED WAS AS UNDER:- (I) CAN AN ASSESSING OFFICER WHILE ASSESSING A COMPANY FOR INCOME TAX UNDER SECTION 115J OF THE ACT QUESTION T HE CORRECTNESS OF THE PROFIT & LOSS ACCOUNT PREPARED BY THE ASSESS EE COMPANY AND CERTIFIED BY THE STATUTORY AUDITORS OF THE COMPANY AS HAVING BEEN PREPARED IN ACCORDANCE WITH THE REQUIREMENTS OF PAR TSII AND III OF SCHEDULE VI TO THE COMPANIES ACT? THIS QUESTION HAS BEEN ANSWERED BY THEIR LORDSHIPS AFTER ANALYZING THE PROVISIONS OF SECTION 115J AS UNDER:- IF WE EXAMINE THE SAID PROVISION IN THE ABOVE BACKGROUND, WE NOTICE THAT THE USE OF THE WORDS 'IN ACCORDANCE WIT H THE PROVISIONS OF PARTS II AND III OF SCH. VI TO THE COMPANIES ACT ' WAS MADE FOR THE LIMITED PURPOSE OF EMPOWERING THE ASSESSING AUT HORITY TO RELY UPON THE AUTHENTIC STATEMENT OF ACCOUNTS OF THE COM PANY. WHILE SO LOOKING INTO THE ACCOUNTS OF THE COMPANY, AN AO UND ER THE IT ACT HAS TO ACCEPT THE AUTHENTICITY OF THE ACCOUNTS WITH REFERENCE TO THE PROVISIONS OF THE COMPANIES ACT WHICH OBLIGATES THE COMPANY TO MAINTAIN ITS ACCOUNT IN A MANNER PROVIDED BY THE CO MPANIES ACT AND THE SAME TO BE SCRUTINISED AND CERTIFIED BY STA TUTORY AUDITORS AND WILL HAVE TO BE APPROVED BY THE COMPANY IN ITS GENERAL MEETING AND THEREAFTER TO BE FILED BEFORE THE REGISTRAR OF COMPANIES WHO HAS A STATUTORY OBLIGATION ALSO TO EXAMINE AND SATI SFY THAT THE ACCOUNTS OF THE COMPANY ARE MAINTAINED IN ACCORDANC E WITH THE REQUIREMENTS OF THE COMPANIES ACT. IN SPITE OF ALL THESE PROCEDURES CONTEMPLATED UNDER THE PROVISIONS OF THE COMPANIES ACT, WE FIND IT DIFFICULT TO ACCEPT THE ARGUMENT OF THE REVENUE THA T IT IS STILL OPEN TO THE AO TO RE-SCRUTINISE THIS ACCOUNT AND SATISFY HIMSELF THAT THESE ACCOUNTS HAVE BEEN MAINTAINED IN ACCORDANCE W ITH THE PROVISIONS OF COMPANIES ACT. IN OUR OPINION, RELIAN CE PLACED BY THE REVENUE ON SUB-S. (1A) OF S. 115J OF THE IT ACT IN SUPPORT OF THE ABOVE CONTENTION IS MISPLACED. SUB-S. (1A) OF S. 11 5J DOES NOT EMPOWER THE AO TO EMBARK UPON A FRESH INQUIRY IN RE GARD TO THE ENTRIES MADE IN THE BOOKS OF ACCOUNT OF THE COMPANY . THE SAID SUBSECTION, AS A MATTER OF FACT, MANDATES THE COMPA NY TO MAINTAIN ITS ACCOUNT IN ACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES BISLERI SALES LTD & ETC. 19 ACT WHICH MANDATE, ACCORDING TO US, IS BODILY LIFTE D FROM THE COMPANIES ACT INTO THE IT ACT FOR THE LIMITED PURPO SE OF MAKING THE SAID ACCOUNT SO MAINTAINED AS A BASIS FOR COMPUTING THE COMPANYS INCOME FOR LEVY OF INCOME-TAX. BEYOND THAT, WE DO N OT THINK THAT THE SAID SUB-SECTION EMPOWERS THE AUTHORITY UNDER T HE IT ACT TO PROBE INTO THE ACCOUNTS ACCEPTED BY THE AUTHORITIES UNDER THE COMPANIES ACT. IF THE STATUTE MANDATES THAT INCOME PREPARED IN ACCORDANCE WITH THE COMPANIES ACT SHALL BE DEEMED I NCOME FOR THE PURPOSE OF S. 115J OF THE ACT, THEN IT SHOULD BE TH AT INCOME WHICH IS ACCEPTABLE TO THE AUTHORITIES UNDER THE COMPANIE S ACT. THERE CANNOT BE TWO INCOMES ONE FOR THE PURPOSE OF COMPAN IES ACT AND ANOTHER FOR THE PURPOSE OF INCOME-TAX BOTH MAINTAIN ED UNDER THE SAME ACT. IF THE LEGISLATURE INTENDED THE AO TO REA SSESS THE COMPANYS INCOME, THEN IT WOULD HAVE STATED IN S. 1 15J THAT 'INCOME OF THE COMPANY AS ACCEPTED BY THE AO. IN TH E ABSENCE OF THE SAME AND ON THE LANGUAGE OF S. 115J, IT WILL HA VE TO HELD THAT VIEW TAKEN BY THE TRIBUNAL IS CORRECT AND THE HIGH COURT HAS ERRED IN REVERSING THE SAID VIEW OF THE TRIBUNAL. THEREFORE, WE ARE OF THE OPINION, THE AO WHILE COMP UTING THE INCOME UNDER S. 115J HAS ONLY THE POWER OF EXAMININ G WHETHER THE BOOKS OF ACCOUNT ARE CERTIFIED BY THE AUTHORITIES U NDER THE COMPANIES ACT AS HAVING BEEN PROPERLY MAINTAINED IN ACCORDANCE WITH THE COMPANIES ACT. THE AO THEREAFTER HAS THE L IMITED POWER OF MAKING INCREASES AND REDUCTIONS AS PROVIDED FOR IN THE EXPLANATION TO THE SAID SECTION. TO PUT IT DIFFERENTLY, THE AO DOES NOT HAVE THE JURISDICTION TO GO BEHIND THE NET PROFIT SHOWN IN T HE P&L A/C EXCEPT TO THE EXTENT PROVIDED IN THE EXPLANATION TO S. 115 J. 20. THIS PRINCIPLE HAS BEEN REITERATED BY THE HON'BLE S UPREME COURT IN MALAYALA MANORAMA CO. LTD. V/S CIT, [2008] 300 ITR 251 (SC) . IN THIS CASE, THE HON'BLE SUPREME COURT HAS REFERRED TO THE DECISION OF JURISDICTIONAL HIGH COURT IN KYNETIC MOTORS, [2008] 262 ITR 330 (BOM.) AND HELD THAT IN VIEW OF THE JUDGMENT OF HON'BLE SU PREME COURT IN APOLLO TYRES LTD. (SUPRA), THE ASSESSING OFFICER CANNOT RE -WORK THE NET PROFIT PREPARED BY THE COMPANY IN ACCORDANCE WITH COMPANIE S ACT. ONCE THIS ISSUE HAS BEEN SETTLED BY THE HON'BLE SUPREME COURT , WE DO NOT FIND NECESSARY TO DEAL WITH THE OTHER DECISIONS RELIED U PON BY THE PARTIES AS THE LAW IS VERY CLEAR ON THIS ISSUE SPECIFICALLY THE SC OPE OF THE ASSESSING OFFICER THAT TINKERING OF ASSESSEES PROFIT & LOSS ACCOUNT EXCEPT FOR THOSE PROVIDED IN EXPLANATION THERETO. 21. IN THE PRESENT CASE, THE ASSESSING OFFICER HAS HEAV ILY RELIED UPON CLAUSE (B) OF EXPLANATION TO SECTION 115JA WHICH PR OVIDES THAT THE AMOUNT CARRIED TO ANY RESERVE WHATEVER NAME CALLED SHOULD BE INCREASED IN THE BISLERI SALES LTD & ETC. 20 BOOK PROFIT. HE HAS ALSO REFERRED TO VARIOUS DICTIO NARY MEANING FOR THE WORD PROFIT & LOSS ACCOUNT . THE EXPLANATION IS VERY CLEAR THAT THE BOOK PROFIT MEANS THE NET PROFIT AS SHOWN IN THE PROFIT & LOSS ACCOUNT WHICH HAS BEEN PREPARED IN ACCORDANCE WITH PARTS-II AND III O F SCHEDULE-VI TO THE COMPANIES ACT, 1956, AND SUCH NET PROFIT HAS TO BE INCREASED AND REDUCED IN VIEW OF THE PROVISIONS GIVEN IN THE EXPLANATION. THUS, THE EXPLANATION PRE-SUPPOSES THAT THE AMOUNT RECEIVED SHOULD BE DEB ITED TO THE PROFIT & LOSS ACCOUNT AND IF THE SAME HAS NOT BEEN DEBITED A ND HAS BEEN DIRECTLY TAKEN TO THE CAPITAL RESERVE ACCOUNT IN THE BALANCE SHEET, THE SAME CANNOT BE TINKERED WITH SO AS TO INCLUDE IT IN THE PROFIT & LOSS ACCOUNT. OTHERWISE, IT WILL ENHANCE THE SCOPE OF THE ASSESSING OFFICER TO RE-WORK THE NET PROFIT ARRIVED AT BY THE COMPANY WHICH HAS BEEN CERTIFIED BY THE PRESCRIBED AUTHORITY AND DULY APPROVED BY THE COMPANY IN ITS G ENERAL MEETING AND WHICH HAS BEEN FILED BEFORE THE REGISTRAR OF COMPAN IES WHO HAS A SATISFACTORY OBLIGATION TO EXAMINE AND SATISFY THAT THE ACCOUNTS HAVE BEEN MAINTAINED IN ACCORDANCE WITH THE REQUIREMENT OF CO MPANIES ACT, 1956. THUS, IN VIEW OF THE RATIO AND THE LAW LAID DOWN BY THE HON'BLE SUPREME COURT, WE DO NOT FIND ANY REASON TO DEVIATE FROM TH E FINDINGS GIVEN BY THE COMMISSIONER (APPEALS) AND, ACCORDINGLY, THE GROUND S TAKEN BY THE REVENUE STAND DISMISSED. 22. 4 !8 2 4 2 ! 9: ; 22. IN THE RESULT, REVENUES APPEAL IS DISMISSED. WE NOW TAKE UP ASSESSEES CROSS OBJECTION NO.292/MUM./2003, ARISING OUT OF REVENUES APPEAL IN ITA NO.6571/MUM. /2002 . 23. IN GROUND NO.1, THE ASSESSEE HAS TAKEN ALTERNATIVE GROUND THAT THE ASSESSING OFFICER SHOULD HAVE ACCEPTED THE CONTENTI ONS OF THE ASSESSEE THAT AT LEAST, TO THE EXTENT OF THE RECEIPTS WHICH ARE EXEMPT UNDER SECTION 54EA, SHOULD NOT CONSTRUED PART OF BOOK PROFIT. SIN CE WE HAVE ALREADY DISMISSED THE GROUNDS NO.3, 4 AND 5, RAISED IN THE APPEAL PREFERRED BY THE REVENUE IN ITA NO. 6571/MUM./2002, AND HAS ALLOWED THE ASSESSEES BISLERI SALES LTD & ETC. 21 CONTENTIONS, THIS GROUND BECOMES INFRUCTUOUS AND, A CCORDINGLY, THE SAME IS DISMISSED AS SUCH. 24. GROUND NO.2, RELATES TO LEVY OF INTEREST UNDER SECT ION 234B AND 234C OF THE ACT. 25. BOTH THE PARTIES AGREE BEFORE US THAT THIS GROUND I S CONSEQUENTIAL IN NATURE. ACCORDINGLY, THE ASSESSING OFFICER IS DIREC TED TO GIVE CONSEQUENTIAL EFFECT IN ACCORDANCE WITH LAW WHILE COMPUTING THE I NCOME OF THE ASSESSEE. 26. 4 !8 $' (4! 2 ,-% <2 /=> ' ! ? 2 ! 9: ; 26. IN THE RESULT, ASSESSEES CROSS OBJECTION IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. WE NOW TAKE UP REVENUES APPEAL IN ITA NO.3757/MUM./2003 , VIDE WHICH FOLLOWING GROUNDS HAVE BEEN RAISED: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A) ERRED IN TREATING THE RECEIPT OF ` 10 CRORES ON SALE OF RIGHT TO MANUFACTURE AERATED PRODUCTS AS CA PITAL RECEIPTS NOT CHARGEABLE TO TAX WITHOUT APPRECIATION OF THE FACTS OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO EXCLUDE THE RECEIPT OF ` 14 CRORES IN COMPUTING THE BOOK PROFIT UNDER SECTION 115JA OF THE ACT WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS FAILED TO PREPARE THE PROFIT & LOS S ACCOUNT IN TERMS OF PARTSI AND II OF SCHEDULE VI OF THE COMPA NIES ACT GIVING ALL THE NECESSARY DETAILS. 27. GROUND NO.1, IS SIMILAR TO GROUNDS NO.1 AND 2, RAIS ED BY THE REVENUE IN ITA NO.6571/MUM./2010, AND IN VIEW OF TH E FINDINGS GIVEN THEREIN, GROUND NO.1, IS DISMISSED. 28. GROUND NO.2, IS SIMILAR TO GROUNDS NO.3, 4 AND 5, A S RAISED IN REVENUES APPEAL IN ITA NO.6571/MUM./2010, AND IN V IEW OF THE FINDINGS GIVEN THEREIN, THIS GROUND IS TREATED AS DISMISSED. BISLERI SALES LTD & ETC. 22 29. 4 !8 2 4 2 ! 9: ; 29. IN THE RESULT, REVENUES APPEAL IS DISMISSED. WE NOW TAKE UP ASSESSEES CROSS OBJECTION NO.164/MUM./2004 , ARISING OUT OF REVENUES APPEAL IN ITA NO.3757/MUM./2003 , VIDE WHICH, FOLLOWING GROUNDS HAVE BEEN RAISED: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN NOT DEALING WITH ALTERNATIV E CONTENTION OF THE APPELLANT IN GROUND NO.6 TO THE EFFECT THAT THE LEARNED ASSESSING OFFICER OUGHT TO HAVE ACCEPTED CONTENTION OF THE APPELLANT THAT AT LEAST TO THE EXTENT THE RECEIPTS TOWARDS CONSIDERATION FOR SALE OF GOODWILL ( ` 4.00 CRORES) AND CONSIDERATION FOR NONCOMPETE COVENANTS ( ` 10.00 CRORES) WERE EXEMPTED UNDER SECTION 54EA THE RECEIPT DID NOT CONSTITUTE PART OF BOOK PROFIT UNDER SECTION 115JA. 30. THE ASSESSEE HAS TAKEN AN ALTERNATIVE GROUND WHICH IS SIMILAR TO THE GROUND RAISED IN C.O. NO.292/MUM./2003. IN VIEW OF OUR FINDINGS GIVEN THEREIN, THIS GROUND BECOMES INFRUCTUOUS AND THE SA ME IS HEREBY DISMISSED. 31. 4 !8 $' (4! 2 ,-% 4 2 ! 9: ; 31. IN THE RESULT, ASSESSEES CROSS OBJECTION IS DI SMISSED. WE NOW TAKE UP ASSESSEES APPEAL IN ITA NO.2972/MUM./2003 , WHEREIN, FOLLOWING GROUNDS HAVE BEEN RAISED: 1. ON BEING AGGRIEVED BY THE ORDER OF THE LEARNED HONABLE CIT(A)-VIIL DATED 12.3.2003, THIS APPEAL PETITION I S BEING SUBMITTED ON THE FOLLOWING GROUNDS, WHICH IT IS PRAYED MAY BE CONSIDERED WITHOUT PREJUDICE TO ONE ANOTHER. THE APPEAL PETITI ON IS SUBMITTED BY M/S. BISLERI INTERNATIONAL PVT. LTD. BEING AMALG AMATED COMPANY OF M/S. DELHI BISLERI CO. LTD. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A) ERRED IN NOT PERMITTING SET OFF IN RESPECT O F DEPRECIATION LOSS OF RS.4.65 CR. PERTAINING TO A.Y.1991-92 TO 1996-97 (I.E. UPTO A.Y.199697) AGAINST INCOME CHARGEABLE UNDER SECTIO N 50 OF THE ACT. BISLERI SALES LTD & ETC. 23 IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A) ERRED IN NOT ACCEPTING CONTENTION OF THE APP ELLANT. (A) THAT, THE ABSORPTION OF UNABSORBED DEPRECIATION CLAIM FOR THE YEARS UPTO A.Y. 1996-97 WAS GOVERNED BY THE PROVISI ONS OF SECTION 32(2) AS THEY THEN SUBSISTED. (B) THAT, AMENDMENT MADE TO SECTION 32(2) W.E.F. A. Y. 1997-98 WAS PROSPECTIVE AS WAS CLEAR, INTER ALIA, FROM LEGI SLATIVE INTENT EXPRESSED IN THE FINANCE MINISTERS SPEECH [REFER 2 22 ITR 36 (ST)] AND WAS, THEREFORE, MEANT TO BE APPLICABLE TO DEPRE CIATION CLAIMS ARISING IN A.Y. 1997-98 AND ONWARDS. (C) THAT, INCOME CHARGED TO TAX UNDER SECTION 50 RE PRESENTS PROFITS AND GAINS OF BUSINESS AND HENCE, IN TERMS OF DECISI ON OF J.K.CHEMICALS V/S. ACIT (ITA NO. 8206 / 8618 / B/89 ), THE SET OFF OF UNABSORBED DEPRECIATION CLAIMED WAS CORRECT. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) ERRED IN HOLDING THAT COMPENSATION O F RS.23,17,936 PAID TO WORKMEN WAS INADMISSIBLE AS THE EXPENDITURE WAS INCURRED UPON CLOSURE OF BUSINESS. THE APPELLANT SUBMITS THA T THERE WAS NO CLOSURE OF BUSINESS EVEN OTHERWISE EXPENDITURE ME RITED DEDUCTION. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) ERRED IN REJECTING THE GROUND NO, 7 CHALLENGING LEVY OF INTEREST UNDER SECTION 234B BY HOLDING IT TO BE INFRUCTUOUS. YOUR APPELLANT CRAVES LEAVE TO ADD TO AMEND, ALTER, DELETE AND/OR MODIFY THE ABOVE GROUNDS OF APPEAL ON OR BEFORE THE FINAL DATE OF HEARING OF THIS APPEAL PETITION. 32. THIS APPEAL WAS REPRESENTED BY MR. RAJAN VORA, LEAR NED COUNSEL FOR THE ASSESSEE. IN GROUND NO.1, THE ASSESSEE HAS CHAL LENGED DISALLOWANCE OF SET-OFF OF UNABSORBED DEPRECIATION OF ` 4.65 CRORES, PERTAINING TO ASSESSMENT YEARS 1991-92 TO 1996-97, AGAINST INCOME CHARGEABLE UNDER THE HEAD SHORT TERM CAPITAL GAINS UNDER SECTION 50 OF THE ACT. 33. BEFORE THE ASSESSING OFFICER, THE ASSESSEE CLAIMED THAT UNABSORBED DEPRECIATION PERTAINING TO ASSESSMENT YEAR 1996-97 IN THE EARLIER YEARS SHOULD BE ALLOWED TO BE SET-OFF AGAINST THE SHORT T ERM CAPITAL GAINS CHARGEABLE UNDER SECTION 50, THAT HAS ARISEN TO THE ASSESSEE ON ACCOUNT OF SALE OF ITS DEPRECIABLE ASSETS. SECTION 32(2) IS AP PLICABLE ONLY IN RESPECT OF UNABSORBED DEPRECIATION IN THE ASSESSMENT YEAR 1997 -98 AND NOT IN RESPECT OF UNABSORBED DEPRECIATION CARRIED FORWARD IN THE EARLIER BISLERI SALES LTD & ETC. 24 ASSESSMENT YEARS. THE ASSESSING OFFICER, HOWEVER, R EJECTED THE ASSESSEES CONTENTIONS AND THE CLAIM FOR SET-OFF OF UNABSORBED DEPRECIATION OF THE EARLIER YEARS WAS DENIED. 34. BEFORE THE COMMISSIONER (APPEALS), THE ASSESSEE MAD E VERY DETAILED SUBMISSIONS WHICH HAVE BEEN DISCUSSED IN D ETAIL IN THE APPELLATE ORDER FROM PARAS-19 TO 26. THE COMMISSIONER (APPEAL S) TOO REJECTED THE ASSESSEES CLAIM AND UPHELD THE ASSESSING OFFICERS ACTION. 35. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUB MITTED THAT THIS ISSUE NOW STANDS COVERED BY THE SPECIAL BENCH DECISION OF THE TRIBUNAL IN DCIT V/S TIMES GUARANTEE LTD, [2010] 131 TTJ (MUM.) 257 (SB) , AND DREW OUR ATTENTION TO PARA-38 OF THE SAID JUDGMENT WHEREIN THE SPECIAL BENCH HAS SUMMARIZED THE ALLOWABILITY OF DEPRECIATI ON TO BE SET-OFF AFTER ANALYZING THE PROVISIONS OF SECTION 32 AND VARIOUS OTHER JUDGMENTS. 36. LEARNED DEPARTMENTAL REPRESENTATIVE FAIRLY ADMITTED THAT THE ISSUE STANDS COVERED BY THE DECISION OF THE SPECIAL BENCH IN TIMES GUARANTEE (SUPRA) . 37. AFTER CAREFULLY CONSIDERING THE FINDINGS OF THE ASS ESSING OFFICER AND THE COMMISSIONER (APPEALS) AS WELL AS THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL CITED SUPRA, WE FIND THAT INSOFAR AS T HE ISSUE OF BROUGHT FORWARD UNADJUSTED DEPRECIATION ALLOWANCE UP TO ASS ESSMENT YEAR 1996-97 IS CONCERNED, THE SAME IS TO BE TREATED AS CURRENT DEPRECIATION AND CAN BE SET-OFF AGAINST THE INCOME UNDER ANY HEAD. THE RELE VANT FINDINGS AND OBSERVATIONS ARE AS UNDER:- 38. THE LEGAL POSITION OF CURRENT AND BROUGHT FORWA RD UNADJUSTED/UNABSORBED DEPRECIATION ALLOWANCE IN THE THREE PERIODS, IS SUMMARIZED AS UNDER :- A. IN THE FIRST PERIOD (I.E. UPTO A.Y. 1996-97) I. CURRENT DEPRECIATION , THAT IS THE AMOUNT OF ALL OWANCE FOR THE YEAR UNDER SECTION 32(1), CAN BE SET OFF AGAINST IN COME UNDER ANY HEAD WITHIN THE SAME YEAR. II. AMOUNT OF SUCH CURRENT DEPRECIATION WHICH CAN N OT BE SO SET OFF WITHIN THE SAME YEAR AS PER I. ABOVE SHALL BE DEEME D AS BISLERI SALES LTD & ETC. 25 DEPRECIATION U/S 32(1), THAT IS DEPRECIATION FOR TH E CURRENT YEAR IN THE FOLLOWING YEAR(S) TO BE SET OFF AGAINST INCOME UNDER ANY HEAD, LIKE CURRENT DEPRECIATION. B. IN THE SECOND PERIOD (I.E. A.Y. 1997-98 TO 2001- 02) I. BROUGHT FORWARD UNADJUSTED DEPRECIATION ALLOWANC E FOR AND UPTO A.Y. 1996-97 (HEREINAFTER CALLED THE `FIRST UNADJUS TED DEPRECIATION ALLOWANCE), WHICH COULD NOT BE SET OFF UPTO A.Y. 1 996-97, SHALL BE CARRIED FORWARD FOR SET OFF AGAINST INCOME UNDER AN Y HEAD FOR A MAXIMUM PERIOD OF EIGHT A.YS. STARTING FROM A.Y. 19 97-98. II. CURRENT DEPRECIATION FOR THE YEAR U/S 32(1) ( F OR EACH YEAR SEPARATELY STARTING FROM A.Y. 1997-98 UPTO 2001-02) CAN BE SET OFF FIRSTLY AGAINST BUSINESS INCOME AND THEN AGAINST IN COME UNDER ANY OTHER HEAD. III. AMOUNT OF CURRENT DEPRECIATION FOR A.YS. 1997- 98 TO 2001-02 WHICH CANNOT BE SO SET OFF AS PER II. ABOVE, HEREIN AFTER CALLED THE `SECOND UNABSORBED DEPRECIATION ALLOWANCE SHALL BE CARRIED FORWARD FOR A MAXIMUM PERIOD OF EIGHT ASSESSMENT YE ARS FROM THE A.Y. IMMEDIATELY SUCCEEDING THE A.Y. FOR WHICH IT W AS FIRST COMPUTED, TO BE SET OFF ONLY AGAINST THE INCOME UND ER THE HEAD `PROFITS AND GAINS OF BUSINESS OR PROFESSION. C. IN THE THIRD PERIOD ( I.E. A.Y. 2002-03 ONWARDS) I. `FIRST UNADJUSTED DEPRECIATION ALLOWANCE CAN BE SET OFF UPTO A.Y. 2004-05, THAT IS, THE REMAINING PERIOD OUT OF MAXIM UM PERIOD OF EIGHT A.Y.S (AS PER BI. ABOVE) AGAINST INCOME UNDER ANY HEAD. II. `SECOND UNABSORBED DEPRECIATION ALLOWANCE CAN BE SET OFF ONLY AGAINST THE INCOME UNDER THE HEAD `PROFITS AND GAIN S OF BUSINESS OR PROFESSION WITHIN A PERIOD OF EIGHT A.YS. SUCCEEDI NG THE A.Y. FOR WHICH IT WAS FIRST COMPUTED. III. CURRENT DEPRECIATION FOR THE YEAR U/S 32(1), F OR EACH YEAR SEPARATELY, STARTING FROM A.Y. 2002-03 CAN BE SET O FF AGAINST INCOME UNDER ANY HEAD. AMOUNT OF DEPRECIATION ALLOW ANCE NOT SO SET OFF (HEREINAFTER CALLED THE `THIRD UNADJUSTED D EPRECIATION ALLOWANCE) SHALL BE CARRIED FORWARD TO THE FOLLOWI NG YEAR. IV. THE `THIRD UNADJUSTED DEPRECIATION ALLOWANCE S HALL BE DEEMED AS DEPRECIATION U/S 32(1), THAT IS DEPRECIATION FOR THE CURRENT YEAR IN THE FOLLOWING YEAR(S) TO BE SET OFF AGAINST INCO ME UNDER ANY HEAD, LIKE CURRENT DEPRECIATION, IN PERPETUITY . 38. THE ASSESSEES CASE IS SQUARELY COVERED BY PART-B O F PARA-38, AS REPRODUCED ABOVE. RESPECTFULLY FOLLOWING THE SAME, WE HOLD THAT THE ASSESSEE IS ENTITLED TO SET-OFF OF UNABSORBED DEPRE CIATION PERTAINING TO THE BISLERI SALES LTD & ETC. 26 ASSESSMENT YEARS UP TO 1996-97, AGAINST SHORT TERM CAPITAL GAINS. ACCORDINGLY, THIS GROUND IS ALLOWED AS SUCH. 39. IN GROUND NO.2, THE ASSESSEE HAS CHALLENGED THE DIS ALLOWANCE OF RETIREMENT COMPENSATION OF ` 23,17,936, PAID TO WORKMEN ON THE GROUND THAT THE EXPENDITURE WAS INCURRED UPON THE CLOSURE OF THE BUSINESS. 40. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THI S ISSUE IS COVERED BY THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN CIT V/S BHOR INDUSTRIES LTD., [2003] 264 ITR 180 (BOM.) , WHEREIN THE JURISDICTIONAL HIGH COURT HAS HELD THAT EXPENDITURE RELATING TO VO LUNTARY RETIREMENT SCHEME IS A REVENUE EXPENDITURE AND IS AN ALLOWABLE DEDUCTION. 41. LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER H AND, FAIRLY ADMITTED THAT THIS ISSUE STANDS COVERED BY THE JUDG MENT OF JURISDICTIONAL HIGH COURT CITED SUPRA. 42. AFTER GOING THROUGH THE ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS), WE FIND THAT HE HAS CONFIRMED THE DISALL OWANCE ON THE GROUND THAT IT IS CAPITAL IN NATURE AFTER OBSERVING AND HO LDING AS UNDER: 41. IN THE CIRCUMSTANCES, IT IS TO BE SEEN WHETHER THE PAYMENT MADE TO THE EMPLOYEES LEAVING THEIR SERVICES WHICH IN TURN HAD ARISEN IN THE PECULIAR CIRCUMSTANCES OF THE INDUSTR IAL UNDERTAKING OF THE APPELLANT COMPANY HAVING GOT CLOSED IN VIEW OF THE SAID PART OF THE BUSINESS HAVING BEEN TRANSFERRED CAN BE HELD TO BE OF REVENUE NATURE. THERE IS NO DISPUTE THAT THE EMPLOY EES TO WHOM THE PAYMENTS WERE MADE WERE PART OF THE WORK FORCE OF THE UNIT THAT WAS TRANSFERRED. ANOTHER PART OF THE WORK FORC E REFUSE TO LEAVE THEIR JOB WHILE THE BALANCE WERE TAKEN BY THE NEW MANAGEMENT AS PART OF THE BUSINESS. HENCE AS FAR AS THE APPELLANT IS CONCERNED, THE PAYMENT WAS MADE ON THE CLOSURE OF THE INDUSTRIAL UNDERTAKING WHERE THESE PERSONS WERE EMPLOYED. IN THE DECISION IN THE CASE OF COIMBATORE PREMIER CORP . P. LTD. V/S CIT, 244 ITR 445 (MAD.) IT HAS BEEN HELD THAT COMPE NSATION PAID ON THE CLOSURE OF THE MANUFACTURING UNIT TO ITS WOR KMEN IS NOT ALLOWABLE AS REVENUE EXPENDITURE. 42. IN VIEW OF THE FACTS IN THE INSTANT CASE THE PA YMENT WAS MADE AS FULL AND FINAL SETTLEMENT OF DUES CONSEQUEN T TO THE TRANSFER OF THE AERATED SOFT DRINK MANUFACTURING UN IT TO THE WORKMEN EMPLOYED IN THE SAID UNIT WHO DECLINED TO R EMAIN IN EMPLOYMENT OF THE NEW OWNER OF THE SAID UNIT. THE C IRCUMSTANCES OF THE PAYMENTS ARE IDENTICAL TO THE FACTS IN THE C ASE OF BISLERI SALES LTD & ETC. 27 COIMBATORE PREMIER CORP. LTD. (SUPRA). HENCE THE PA YMENT MADE CONSTITUTE A PAYMENT THAT IS OF CAPITAL NATURE AND HENCE CANNOT BE HELD AS ADMISSIBLE FOR DEDUCTION. CONSEQUENTLY, THE ACTION OF THE ASSESSING OFFICER TO DISALLOW THE DEDUCTION IS AS P ER LAW AND HENCE IS TO BE ESTIMATED THE DISALLOWANCE OF ` 23,17,436 ON THIS ACCOUNT IS THEREFORE UPHELD THOUGH ON A DIFFERENT REASON. 43. THIS ISSUE, AS ADMITTED BY BOTH THE PARTIES, NOW ST ANDS COVERED BY THE JUDGMENT OF JURISDICTIONAL HIGH COURT RENDERED IN BHOR INDUSTRIES LTD. (SUPRA), WHEREIN THEIR LORDSHIPS OBSERVED AND HELD AS UNDER: FOR THE ASSESSMENT YEAR 1996-97, THE ASSESSEE-COMP ANY CLAIMED DEDUCTION OF RS. 10,02,23,735 FOR THE PAYMENT UNDER THE VOLUNTARY RETIREMENT SCHEME IN RESPECT OF ITS PLANT AT BORVIL E BUT THE ASSESSING OFFICER RESTRICTED THE DEDUCTION AT RS. 3 3,40,918 AND DISALLOWED THE BALANCE AMOUNT OF RS. 9,68,82,917 AS EXCESS CLAIM. THE COMMISSIONER (APPEALS) TOOK THE VIEW THAT THE A SSESSEE IN ITS BOOKS SPREAD OVER THE AMOUNT OF RS. 10,02,23,735 OV ER A PERIOD SIXTY MONTHS AND HENCE THE ASSESSING OFFICER WAS RI GHT IN NOT GIVING THE FULL DEDUCTION OF RS. 10,02,23,735 DURIN G THE ASSESSMENT YEAR IN QUESTION. THE TRIBUNAL TOOK THE VIEW THAT T HE VOLUNTARY RETIREMENT SCHEME EXPENSES WERE NOT INCURRED FOR AC QUIRING ANY ASSET BUT WERE INCURRED TO REDUCE THE COST AND THE LIABILITY STOOD ASCERTAINED, QUANTIFIED AND DISCHARGED DURING THE A CCOUNTING YEAR ENDING ON MARCH 31, 1996, AND ALLOWED THE CLAIM OF THE ASSESSEE. ON APPEAL : _HELD, _ (I) THAT SINCE THE REVENUE DID NOT PREFER ANY APP EAL AGAINST THE ORDER OF ASSESSMENT THE REVENUE COULD N OT CONTEND THAT THE ENTIRE EXPENSES WERE IN THE CAPITAL FIELD. (II) THAT IN THE ANNUAL REPORT FOR THE ACCOUNTING Y EAR MARCH 31, 1996, THE ASSESSEE HAD WRITTEN OFF THE SAID EXPENSE S OVER A PERIOD OF SIXTY MONTHS. IN THE EARLIER YEARS, THE ASSESSEE HAD WRITTEN OFF SUCH EXPENSES OVER A PERIOD OF THIRTY-SIX MONTHS AT THE RATE OF RS. 55,68,025 WHEREAS IN THE YEAR IN QUESTION IT HAD WR ITTEN OFF A SMALLER AMOUNT OF RS. 33,40,818. THUS, THE REVENUE COULD NOT HAVE ANY GRIEVANCE ABOUT THE CHANGE OF THE PERIOD O VER WHICH THE AMOUNT WAS WRITTEN OFF. (III) THAT THE SAID EXPENSES WERE INCURRED BY THE A SSESSEE TO SAVE EXPENSE. THIS WAS NOT REFEREABLE TO ANY INCOME-YIEL DING ASSET. IT MUST BE ALLOWED IN ITS ENTIRETY IN THE YEAR IN WHIC H IT WAS INCURRED AND IT COULD NOT BE SPREAD OVER A NUMBER OF YEARS E VEN THOUGH THE ASSESSEE HAD WRITTEN IT OFF IN ITS BOOKS OVER A PER IOD OF YEARS. FURTHER, THE ASSESSEE HAD INCURRED THE SAID EXPENSE S NOT TO THE TUNE OF RS. 10,02,23,735 BUT ONLY RS. 6,79,06,431. THE REMAINING EXPENSES WERE ON ACCOUNT OF GRATUITY, BONUS, LEAVE TRAVEL ALLOWANCE, ETC., WHICH COULD NOT BE SPREAD OVER BY THE ASSESSING OFFICER OVER A PERIOD OF SIXTY MONTHS. THEREFORE, T HE EXPENSES RELATING TO VOLUNTARY RETIREMENT SCHEME WERE A REVE NUE EXPENDITURE AND WERE AN ALLOWABLE DEDUCTION. EMPIRE JUTE CO. LTD. BISLERI SALES LTD & ETC. 28 V. CIT [1980] 124 ITR 1 (SC) FOLLOWED. TAPARIA TOOL S LTD. V. JOINT CIT [2003] 260 ITR 102 (BOM) EXPLAINED AND DISTINGU ISHED. 44. RESPECTFULLY FOLLOWING THE AFORESAID RATIO LAID DOW N BY THE JURISDICTIONAL HIGH COURT, WE HOLD THAT THE RETIREM ENT COMPENSATION PAID TO THE WROKMEN IS REVENUE EXPENDITURE AND IS TO BE ALLOWED IN THIS YEAR. CONSEQUENTLY, GROUND NO.2, RAISED BY THE ASSESSEE I S ALLOWED. 45. GROUND NO.3, RELATES TO CHARGING OF INTEREST UNDER SECTION 234B OF THE ACT. 46. BOTH THE PARTIES AGREE BEFORE US THAT THIS GROUND I S CONSEQUENTIAL IN NATURE. ACCORDINGLY, THE ASSESSING OFFICER IS DIREC TED TO GIVE CONSEQUENTIAL EFFECT IN ACCORDANCE WITH LAW WHILE COMPUTING THE I NCOME OF THE ASSESSEE. 47. 4 !8 $' (4! 2 <2 /=> ' ! 2 ? ! 9:; 47. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED FOR STATISTICAL PURPOSES. WE NOW TAKE UP REVENUES APPEAL IN ITA NO.6923/MUM./2002 , VIDE WHICH FOLLOWING GROUNDS HAVE BEEN RAISED: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN 1. DELETING THE ADDITION OF RS. 8 CRORES MADE ON ACCOU NT OF L.T.C.G. WHICH REPRESENTS AMOUNT RECEIVED FOR DESIS TING FROM UTILISATION OF BUSINESS KNOW-HOW; 2. DELETING THE ADDITION OF RS.8 CRORES EVEN WHILE HOLDING THAT UTILISATION OF BUSINESS KNOW-HOW CONSTITUTES AN ASS ET WITHIN THE MEANING OF SECTION 2(14) OF THE I T ACT AND ITS REL INQUISHMENT SHALL INVITE CHARGE OF CAPITAL GAIN IN ACCORDANCE WITH SE CTION 45 OF THE I T ACT; 3. NOT APPRECIATING THE FACT THAT THE DECISIONS OF THE ITAT RELIED UPON BY THE LEARNED CIT(A) IN THE CASE OF ACIT.CIR. 23(1) VDS. KAMLESH S,.SONAWALLA (ITA.NO.4705/BOM/91)& ACIT. CI R.23(1) VS. HEMANT S.SONAWALLA (ITA.NO.4706 /BOMI9L) HAVE NOT B EEN ACCEPTED BY THE DEPARTMENT AND HAVE NOT ATTAINED FI NALITY. BISLERI SALES LTD & ETC. 29 4. IGNORING THE FACT THAT THE ASSESSEE HAS ITSELF I NVESTED A SUM OF RS.7 CRORES IN SEC.54EA SECURITIES WHICH INDICAT ES THAT THE ASSESSEE ITSELF REGARDS THIS AMOUNT AS TAXABLE. 5. DELETING THE ADDITION OF RS. 35 CRORES FOR COMPU TING BOOK PROFIT U/S II 5JA AS THESE AMOUNTS WERE NOT CREDITE D TO P & L A/C. AND DIRECTLY TO BE BROUGHT TO RESERVE ACCOUNT IN TH E BALANCE-SHEET; 6. DELETING THE ADDITION OF RS.35 CRORES FOR COMPUT ING BOOK PROFIT U/S.1I5JA RELYING ON THE DECISION OF APPOLLO TYRES 255 ITR 273 WHERE THE FACTS OF THE CASE WERE DIFFERENT. 7. RELYING ON THE DECISION OF APPOLLO TYRES 255 ITR 273 WHERE THE FACTS OF THE CASE WERE DIFFERENT IN VIEW OF THE FACT THAT THE ARREARS OF DEPRECIATION WERE DEBITED IN PROFIT AND LOSS ACCOUNT IN THE SAID CASE . 48. GROUNDS NO.1, 2 3 AND 4, RELATE TO TAXABILITY OF NO NCOMPETE (RESTRAINT COVENANT) RECEIPT. THIS ISSUE IS SIMILAR TO GROUNDS NO.1 AND 2 RAISED BY THE REVENUE IN ITA NO.6571/MUM./2002, AND IN VIEW OF OUR DECISION GIVEN THEREIN, WE DISMISS THESE GROUNDS AL SO. 49. GROUNDS NO.5, 6 AND 7, RELATE TO IMPLICATION OF MAT ON ACCOUNT OF RECEIPT OF GOODWILL AND NONCOMPETE RECEIPTS. 50. THE ISSUE ARISING OUT OF GROUNDS NO.5, 6 AND 7, IS SIMILAR TO THE ISSUE RAISED IN GROUND NO.3 4 AND 5 IN REVENUES APPEAL I N ITA NO.6571/MUM./2002, AND IN VIEW OF OUR DECISION GIVE N THEREIN, THESE GROUNDS ARE DISMISSED AS SUCH. 51. 4 !8 2 4 2 ! 9: ; 51. IN THE RESULT, REVENUES APPEAL IS DISMISSED. WE NOW TAKE UP ASSESSEES CROSS OBJECTION NO.293/MUM./2003 , ARISING OUT OF REVENUES APPEAL IN ITA NO.6923/MUM. /2002, WHEREIN FOLLOWING GROUNDS HAVE BEEN RAISED: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED C.LT(A) ERRED IN NOT DEALING WITH FOLLOWING GROUND RAISED AT SR. NO. 10.4 IN OUR GROUNDS OF APPEAL BEFORE C.I.T( A) :- WITHOUT PREJUDICE TO THE ABOVE GROUNDS OF APPEAL, THE DEPUTY COMMISSIONER OF INCOME-TAX OUGHT TO HAVE ACCEPTED C ONTENTION OF BISLERI SALES LTD & ETC. 30 THE APPELLANT THAT AT LEAST TO THE EXTENT THE RECEI PTS WERE EXEMPTED UNDER SECTION 54EA, THE RECEIPTS DID NOT CONSTITUTE PART OF BOOK PROFIT. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED C.L.T(A) ERRED IN NOT DEALING WITH FOLLOWIN G GROUND RAISED AT SR. NO. 12.1 IN OUR GROUNDS OF APPEAL BEFORE C.I.T( A). THE DEPUTY COMMISSIONER OF INCOME-TAX ERRED IN LEV YING INTEREST OF RS.1 29,71,955/- UNDER SECTION 234B AND INTEREST OF RS.14,02,298/- UNDER SECTION 234C. THE LEVY IS INCO RRECT AND EXCESSIVE MORE PARTICULARLY HAVING REGARD TO SUPR EME COURT DECISION IN THE CASE OF RANCHI CLUB LTD (164 CTR 20 0) . 52. THE AFORESAID GROUNDS RAISED IN THIS CROSS OBJECTIO N ARE SIMILAR TO THE GROUNDS RAISED BY THE ASSESSEE IN ITS CROSS OBJECTI ON NO.292/MUM./2003. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE TREAT TH ESE GROUNDS AS INFRUCTUOUS AND HOLD THE SAME AS DISMISSED. 53. 4 !8 $' (4! 2 ,-% 4 2 ! 9: ; 53. IN THE RESULT, ASSESSEES CROSS OBJECTION IS DI SMISSED. WE NOW TAKE UP ASSESSEES APPEAL IN ITA NO.6552/MUM./2002 , VIDE WHICH, FOLLOWING GROUNDS HAVE BEEN RAISED: 1. IN THE FACTS AND CIRCUMSTANCE AND IN LAW, THE LE ARNED C.I.T(A) ERRED IN UPHOLDING DISALLOWANCE IN RESPECT OF SUM OF RS.1,79,123/- DEBITED TO PRIOR PERIOD EXPENSE ACCOU NT. 2. IN THE FACTS AND CIRCUMSTANCE AND IN LAW, THE LE ARNED C.I.T(A) ERRED IN NOT DEALING WITH GROUND NO. 3.4 O F THE APPEAL PETITION BEFORE HIM WHEREIN THE APPELLANT ALSO DISP UTED DOUBLE DISALLOWANCE OF THE IMPUGNED SUM OF RS.1,79,123/- D EBITED TO PRIOR PERIOD EXPENSE ACCOUNT. 3. IN THE FACTS AND CIRCUMSTANCE AND IN LAW, THE LE ARNED C.I.T(A) ERRED IN UPHOLDING THE ACTION OF THE D.C.I .T IN NOT GRANTING SET OFF OF UNABSORBED DEPRECIATION OF RS.1,73,47,96 6/- AGAINST INCOME OF RS.10,44,29,082/- CHARGED TO TAX UNDER SE CTION 50 OF THE ACT. 4. IN THE FACTS AND CIRCUMSTANCE AND IN LAW, THE LE ARNED C.L.T(A) ERRED IN NOT DEALING WITH GROUND NO. 5.4 O F THE APPEAL PETITION BEFORE HIM, WHEREIN THE APPELLANT DISPUTED DOUBLE DISALLOWANCE OF THE SUM OF RS.2,10,403/- DEBITED TO FINES AND PENALTIES . BISLERI SALES LTD & ETC. 31 54. AT THE TIME OF HEARING, LEARNED COUNSEL FOR THE ASS ESSEE SUBMITTED BEFORE US THAT HE DID NOT WISH TO PRESS GROUNDS NO. 1, 2 AND 4, TO WHICH, THE LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT RAI SE ANY OBJECTION. CONSEQUENTLY, THESE GROUNDS ARE TREATED TO BE DISMI SSED AS NOT PRESSED . 55. IN GROUND NO.3, THE ASSESSEE HAS CHALLENGED DISALLO WANCE OF SETOFF OF UNABSORBED DEPRECIATION OF ` 1,73,47,966, AGAINST THE INCOME OF ` 10,44,29,082, UNDER THE HEAD SHORT TERM CAPITAL GAIN UNDER SECTION 50 OF THE ACT. 56. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE U S THAT UNABSORBED DEPRECIATION PERTAINS TO ASSESSMENT YEAR 199798 AND IS ALLOWED TO BE SETOFF IN THIS ASSESSMENT YEAR AGAIN ST SHORT TERM CAPITAL GAIN. HE SUBMITTED THAT EVEN THOUGH THE SPECIAL BEN CH DECISION ON THIS ISSUE IS AGAINST THE ASSESSEE, HOWEVER, THE SAME HA S BEEN NOW COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF HONBLE G UJARAT HIGH COURT IN GENERAL MOTORS PVT. LTD. V/S DCIT, PASSED IN SPECIA L CIVIL APPLICATION NO.1773/2012, VIDE JUDGMENT DATED 23 RD AUGUST 2012. 57. LEARNED DEPARTMENTAL REPRESENTATIVE FAIRLY AGREED T HAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE AFORESAID JUDGMENT OF GUJARAT HIGH COURT. 58. AFTER CAREFULLY GOING THROUGH THE ORDER PASSED BY T HE LEARNED COMMISSIONER (APPEALS) AND THE JUDGMENT OF GUJARAT HIGH COURT, WE FIND THAT THE HIGH COURT HELD THAT PROVISIONS OF SECTION 32(2) AS AMENDED BY FINANCE ACT, 2001, PERMITS THE UNABSORBED DEPRECIAT ION ALLOWANCE AVAILABLE IN ASSESSMENT YEAR 199798, 19992000, 20 0001 AND 200102 TO BE CARRIED FORWARD TO THE SUCCEEDING YEAR. THE R ELEVANT OBSERVATION AS GIVEN IN PARA37, IS REPRODUCED HEREIN BELOW: THE CBDT CIRCULAR CLARIFIES THE INTENT OF THE AMEND MENT THAT IT IS FOR ENABLING THE INDUSTRY TO CONSERVE SUFFICIENT FU NDS TO REPLACE PLANT AND MACHINERY AND ACCORDINGLY THE AMENDMENT D ISPENSES WITH THE RESTRICTION OF 8 YEARS FOR CARRY FORWARD A ND SET OFF OF UNABSORBED DEPRECIATION. THE AMENDMENT IS APPLICABL E FROM BISLERI SALES LTD & ETC. 32 ASSESSMENT YEAR 2002-03 AND SUBSEQUENT YEARS. THIS MEANS THAT ANY UNABSORBED DEPRECIATION AVAILABLE TO AN ASSES S EE ON 1ST DAY OF APRIL, 2002 (A.Y. 2 002- 03) WILL BE DEALT WITH IN ACCORDANCE WITH THE PROVISIONS OF SECTION 32(2) AS AMENDED BY FINAN CE ACT, 2001 AND NOT BY THE PROVISIONS OF SECTION 3 2(2) AS IT S TOOD BEFORE THE SAID AMENDMENT. HAD THE INTENTION OF THE LEGISLATUR E BEEN TO ALLOW THE UNABSORBED DEPRECIATION ALLOWANCE WORKED OUT IN A.Y. 1997-98 ONLY FOR EIGHT SUBSEQUENT ASSESSMEN T YEARS EVEN AFTER THE AMENDMENT OF SECTION 3 2(2) BY FINANCE AC T, 2001 IT WOULD HAVE INCORPORATED A PROVISION TO THAT EFFECT. HOWEVER, IT DOES NOT CONTAIN ANY SUCH PROVISION. HENCE KEEPING IN VI EW THE PURPOSE OF AMENDMENT OF SECTION 3 2(2) OF THE ACT, A PURPOS IVE AND HARMONIOUS INTERPRETATION HAS TO BE TAKEN. WHILE CO NSTRUING TAXING STATUTES, RULE OF STRICT INTERPRETATION HAS TO BE A PPLIED, GIVING FAIR AND REASONABLE CONSTRUCTION TO THE LANGUAGE OF THE SECTION WITHOUT LEANING TO THE SIDE OF ASSESSEE OR THE REVENUE. BUT IF THE LEGISLATURE FAILS TO EXPRESS CLEARLY AND THE ASSESSEE BECOMES E NTITLED FOR A BENEFIT WITHIN THE AMBIT OF THE SECTION BY THE CLEA R WORDS USED IN THE SECTION, THE BENEFIT ACCRUING TO THE ASSESSEE C ANNOT BE DENIED. HOWEVER, CIRCULAR NO.14 OF 2001 HAD CLARIFIED THAT UNDER SECTION 32(2), IN COMPUTING THE PROFIT AND GAINS OF BUSINES S OR PROFESSION FOR ANY PREVIOUS YEAR, DEDUCTION OF DEPRECIATION UN DER SECTION 32(2) SHALL BE MANDATORY. THEREFORE, THE PROVISIONS OF SECTION 32(2) AS AMENDED B FINANCE ACT 2001 WOULD ALLOW THE UNABSORBED DEPRECIATION ALLOWANCE AVAILABLE IN THE A.Y. 1997-9 8 199900 2000-01 AND 2001-02 TO BE CARRIED FORWARD TO THE SU CCEEDING YEARS, AND IF AN UNABSORBED DEPRECIATION OR PART TH EREOF COULD NOT BE SET OFF TILL THE A.Y. 200203 THEN IT WOULD BE C ARRIED FORWARD TILL THE TIME IT IS SET OFF AGAINST THE PROFITS AND GAIN S OF SUBSEQUENT YEARS. 59. THUS, RESPECTFULLY FOLLOWING THE AFORESAID JUDGMENT , WE HOLD THAT ASSESSEES CLAIM FOR SETOFF OF UNABSORBED DEPRECIA TION IS ALLOWABLE AGAINST SHORT TERM CAPITAL GAIN. CONSEQUENTLY, GROU ND NO.3, IS HEREBY ALLOWED. 60. INSOFAR AS GROUND NO.5 IS CONCERNED, THE LEARNED CO UNSEL FOR THE ASSESSEE SUBMITTED THAT THIS GROUND BECOMES PURELY ACADEMIC IF GROUNDS NO.1 TO 4, RAISED BY THE REVENUE IN ITS APPEAL IN I TA NO.6923/MUM./2002, ARE ALLOWED IN FAVOUR OF THE ASSESSEE. 61. SINCE WE HAVE ALREADY DISMISSED THE GROUNDS NO.1 TO 4, RAISED BY THE REVENUE IN ITS APPEAL IN ITA NO.6923/MUM./2002, GROUND NO.5, RAISED IN THIS APPEAL HAS BEEN RENDERED ACADEMIC AND HENCE , DISMISSED AS INFRUCTUOUS. BISLERI SALES LTD & ETC. 33 62. GROUND NO.6, RELATES TO CHARGING OF INTEREST UNDER SECTION 234B AND 234C OF THE ACT. 63. BOTH THE PARTIES AGREE BEFORE US THAT THIS GROUND I S CONSEQUENTIAL IN NATURE. ACCORDINGLY, THE ASSESSING OFFICER IS DIREC TED TO GIVE CONSEQUENTIAL EFFECT IN ACCORDANCE WITH LAW WHILE COMPUTING THE I NCOME OF THE ASSESSEE. 64. 4 !8 $' (4! 2 <2 /=> ' ! 2 ? ! 9:; 64. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED FOR STATISTICAL PURPOSES. WE NOW TAKE UP REVENUES APPEAL IN ITA NO.6570/MUM./2002 , VIDE WHICH, FOLLOWING GROUNDS HAVE BEEN RAISED: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD CIT(A) HAS ERRED IN 1. DELETING THE ADDITION OF RS.3.5 CRORES MADE ON A CCOUNT OF L,T.C.G WHICH REPRESENTS AMOUNT RECEIVED FOR DESIST ING FROM UTILISATION OF BUSINESS KNOW-HOW 2. DELETING THE ADDITION OF RS. 3.5 CRORES EVEN WHI LE HOLDING THAT UTITISATION OF BUSINESS KNOW-HOW CONSTITUTES A N ASSET WITHIN THE MEANING OF SECTION 2(14) OF THE I T, ACT AND IT S RELINQUISHMENT SHAFL INVITE CHARGE OF CAPITAL GAIN IN ACCORDANCE W ITH SECTION 45 OF THE I. T. ACT; 3. DELETING THE ADDITION OF RS.7.5 CRORES FOR COMPU TING BOOK PROFIT UNDER SECTION 11 5JA AS TNESE AMOUNTS WERE N OT CREDITED TO P & L A/C. AND DIRECTED TO HE BROUGHT TO RESERVE AC COUNT IN THE BALANCE-SHEET; 4. DELETING THE ADDITION OF RS.7.5 CRORES MADE FOR COMPUTING BOOK PROFIT UNDER SECTION 11 5JA RELYING ON THE DEC ISION OF APPOLLO TYRES 255 ITR 273 WHERE THE FACTS OF THE CASE WERE DIFFERENT; 5. RELYING ON THE DECISION OF SUPREME COURT IN THE CASE OF APPOLLO TYRES 255 1TR 273 WHERE THE FACTS OF THE CA SE WERE DIFFERENT IN VIEW OF THE FACT THAT THE ARREARS OF D EPRECIATION WERE DEBITED IN PROFIT AND LOSS ACCOUNT IN THE SAID CASE ; BISLERI SALES LTD & ETC. 34 6. DIRECTING THE ASSESSING OFFICER TO SET OFF CURRE NT YEARS LOSS AGAINST SHORT TERM CAPITAL GAINS AS SECTION 71(2) O F THE I.T. ACT, 1961, DOES NOT LAY DOWN ANY PRIORITY FOR SET OFF; 7. OBSERVING THAT A CONSTRUCTION MOST BENEFICIAL TO THE ASSESSEE SHOULD BE ADOPTED AND IN DIRECTING THE SET OFF OF B USINESS LOSS AGAINST SHORT TERM CAPITAL GAINS WITHOUT GIVING REA SONS FOR DOING SO . 65. GROUNDS NO.1 AND 2, ARE SIMILAR TO THE GROUNDS NO.1 AND 2, RAISED IN REVENUES APPEAL IN ITA NO.6571/MUM./2002. CONSISTE NT WITH THE VIEW TAKEN THEREIN, WE DISMISS THESE GROUNDS ALSO. 66. GROUNDS NO.3 TO 5 ARE SIMILAR TO GROUNDS NO.3 TO 5, RAISED IN REVENUES APPEAL IN ITA NO.6571/MUM./2002. CONSISTE NT WITH THE VIEW TAKEN THEREIN, WE DISMISS THESE GROUNDS ALSO. 67. INSOFAR AS GROUNDS NO.6 AND 7 ARE CONCERNED, BOTH T HE PARTIES AGREE BEFORE US THAT THESE GROUNDS WILL BECOME PURELY ACA DEMIC IF GROUNDS NO.1 AND 2 IN ITA NO.6570/MUM./2002, ARE ALLOWED IN FAVO UR OF THE ASSESSEE. 68. SINCE GROUNDS NO.1 AND 2, IN ITA NO.6570/MUM./2002, HAVE ALREADY BEEN DISMISSED AND DECIDED IN FAVUOR OF THE ASSESSE E, HENCE, THESE GROUNDS BECOME PURELY ACADEMIC IN NATURE AND ARE DI SMISSED AS INFRUCTUOUS. 69. 4 !8 2 4 2 ! 9: ; 69. IN THE RESULT, REVENUES APPEAL IS DISMISSED. WE NOW TAKE UP ASSESSEES CROSS OBJECTION NO.291/MUM./2002 , VIDE WHICH, FOLLOWING GROUNDS HAVE BEEN RAISED: BEING AGGRIEVED BY THE ORDER OF THE HONABLE CIT.(A ), THE FOLLOWING MEMORANDUM OF CROSS OBJECTION IS FILED WHICH IT IS PRAYED MAY PLEASE BE CONSIDERED. 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED C.I.T(A) ERRED IN NOT DEALING WITH FOLLOWIN G GROUNDS RAISED AT SR. NO. 7 IN OUR GROUNDS OF APPEAL BEFORE C.I. T (A) - WITHOUT PREJUDICE, THE LEARNED A.O. OUGHT TO HAVE ACCEPTED CONTENTION OF THE APPELLANT THAT AT LEAST TO THE EX TENT THE RECEIPTS BISLERI SALES LTD & ETC. 35 WERE EXEMPTED UNDER SECTION 54EA, THE RECEIPTS DID NOT CONSTITUTE PART OF BOOK PROFITS. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED A.O. ERRED IN NOT GRANTING SET OFF OF BUSINESS LOSS LUNABSORBED DEPRECIATION OF RS. 55,55,475/- IN TERMS OF CLAUSE (III) OF SECTION II5JA(2). 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED C.L.T(A) ERRED IN NOT ACCEPTING CONTENTION OF THE APPELLANT THAT INTEREST UNDER SECTION 234B WAS, IF AT ALL, LE VIABLE ONLY WITH RESPECT TO RETURNED INCOME. 70. THE ASSESSEE HAS TAKEN AN ALTERNATIVE GROUND. SINCE WE HAVE ALREADY DISMISSED THE APPEAL OF THE REVENUE IN ITA NO. GROUNDS NO.1 TO 4, RAISED BY THE REVENUE IN ITS APPEAL IN ITA NO.6923/ MUM./2002, GROUND NO.5, RAISED IN THIS APPEAL HAS BEEN RENDERED ACADE MIC AND HENCE, DISMISSED AS INFRUCTUOUS. 71. IN VIEW OF OUR FINDINGS GIVEN THEREIN, THIS GROUND BECOMES INFRUCTUOUS AND THE SAME IS HEREBY DISMISSED. 72. SINCE WE HAVE ALREADY DISMISSED THE GROUNDS NO.1 TO 4, RAISED BY THE REVENUE IN ITS APPEAL IN ITA NO.6570/MUM./2002, ARE DISMISSED AND DECIDED IN FAVOUR OF THE ASSESSEE, THE GROUNDS RAIS ED IN THIS CROSS OBJECTION BECOME ACADEMIC IN NATURE AND HENCE, DISM ISSED AS INFRUCTUOUS. 73. 4 !8 $' (4! 2 ,-% 4 2 ! 9: ; 73. IN THE RESULT, ASSESSEES CROSS OBJECTION IS DI SMISSED. ' 2 6) @ A'8 30 TH NOVEMBER 2012 6 2 B ; ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER 2012 SD/- . .. . . . . . R.S. SYAL ACCOUNTANT MEMBER SD/- ! ! ! ! '# '# '# '# $ $ $ $ AMIT SHUKLA JUDICIAL MEMBER MUMBAI, A AA A ' '' ' DATED: 30 TH NOVEMBER 2012 BISLERI SALES LTD & ETC. 36 ' 2 ,$! C DC)! / COPY OF THE ORDER FORWARDED TO : (1) $' (4! / THE ASSESSEE; (2) / THE REVENUE; (3) E () / THE CIT(A); (4) E / THE CIT, MUMBAI CITY CONCERNED; (5) CHB ,$!$' , , / THE DR, ITAT, MUMBAI; (6) BI( J / GUARD FILE. -C! ,$! / TRUE COPY '' / BY ORDER , . KL / PRADEEP J. CHOWDHURY 4M $' K / SR. PRIVATE SECRETARY / / 9 / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI