M/s Avon Cycles Ltd., Ludhiana V. DCIT, Ludhiana

CO 35/CHANDI/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5560 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 7 month(s) 6 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 23-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 17-10-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHANDRA KANTA
• Assessee Lawyers: SUBHASH AGGARWAL
• Keywords: Depreciation; Rule 8D
• Section: 14A; 32

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A, CHANDIGARH . . , , BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 970/CHD/2016 ! / ASSESSMENT YEAR : 2013-14 THE DCIT, CIRCLE-5, LUDHIANA VS. '# M/S AVON CYCLES LTD., G.T.ROAD, LUDHIANA $ % ./ PAN NO: AABCA4140R $&/ APPELLANT ()$& / RESPONDENT APPEAL AGAINST THE ORDER OF CIT(A)-2, LUDHIANA DA TED 01.06.2016 & C.O. NO.35/CHD/2016 (IN ./ ITA NO. 970/CHD/2016) ! / ASSESSMENT YEAR : 2013-14) M/S AVON CYCLES LTD., G.T.ROAD, LUDHIANA VS. '# THE DCIT, CIRCLE-5, LUDHIANA $ % ./ PAN NO: AABCA4140R $&/ APPELLANT ()$& / RESPONDENT APPEAL AGAINST THE ORDER OF CIT(A)-2, LUDHIANA DA TED 31.3.2016 -. / 0 / ASSESSEE BY : SH. SUBHASH AGGARWAL, ADVOCATE / 0 / REVENUE BY : SMT.CHANDRAKANTA, SR.DR 1 2 / .3% / DATE OF HEARING : 26.02.2019 45! / .3% / DATE OF PRONOUNCEMENT : 23.05.2019 / ORDER ITA NS. 970-C-2016 & C.O.36-CHD/2016 M/S AVON CYCLES LTD, LUDHIANA 2 PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL BY REVENUE AND CORRESPONDING CRO SS OBJECTIONS BY THE ASSESSEE HAVE BEEN PREFERRED AGAI NST THE ORDER DATED 01.06.2016 OF THE COMMISSIONER OF INCOME TAX (APPEA LS)-2, LUDHIANA [HEREINAFTER REFERRED TO AS CIT(A)]. 2. THE REVENUE IN ITA NO. 970/CHD/2016 HAS TAKEN THE FOLLOWING GROUNDS:- 1. THAT THE WORTHY CIT(A)-2, LUDHIANA HAS ERRED ON THE FACTS AS WELL AS IN LAW IN DELETING DISALLOWANCE U/S 36(L )(III) AMOUNTING TO RS. 38,05,007/-. 2. THE WORTHY CIT(A)-2, LUDHIANA HAS NOT APPRECI ATED THE FACTS THAT THE LAND PURCHASED WAS NOT PUT TO USE AN D NO INTEREST HAS BEEN CAPITALIZED ON THE SAME NOR ANY BUSINESS P URPOSE IS EVIDENT FROM RECORDS WHY INTEREST SHOULD NOT BE CAP ITALIZED U/S 36(L)(III). 3. THAT THE WORTHY CIT(A)-2, LUDHIANA HAS FURTHER E RRED ON THE FACTS AS WELL AS IN LAW IN DIRECTING THE AO TO RECOMPUTE THE DISALLOWANCE U/S 14A OF THE L.T.ACT 1961 R.W.R. 8D OF THE I.T. RULE IN ACCORDANCE WITH THE ORDER OF HON'BLE ITAT IN ASS SESSEE'S OWN CASE FOR A.Y. 2008-09 IN ITA NO 1143/CHD/2011 DATED 17.01.2013. 4. THAT THE WORTHY CIT(A)-2 HAS NOT APPRECIATED THA T ONCE IT IS HELD THAT DISALLOWANCE U/S 14A IS CALLED, IT HAS TO BE COMPUTED AS PER RULE 8D OF I.T. RULES AND NOT IN ANY OTHER M ANNER. 5. THAT THE WORTHY CIT(A) FURTHER ERRED ON THE FACT S AS WELL AS IN LAW IN DELETING THE ADDITION MADE BY DISALLOWING DEPRECIATION ON POWER EVACUATION FACILITY ON WIND TURBINE GENE RATOR @ 80%. ITA NS. 970-C-2016 & C.O.36-CHD/2016 M/S AVON CYCLES LTD, LUDHIANA 3 6, THE WORTHY CIT(A)-2, LUDHIANA HAS NOT APPRECI ATED THE FACT THAT THE ASSESSE DID NOT ENJOY THE OWNERSHIP OF INF RASTRUCTURE EVACUATION NET WORKS. AS PER SECTION 32 OF L.T.ACT, 1961 FOR CLAIMING DEPRECIATION ON ASSETS, THE FIRST CONDITIO N IS THAT THE ASSESSE SHOULD HAVE OWNERSHIP OF THE ASSET. 7. FURTHER THE WORTHY CIT(A)-2. LUDHIANA HAS NOT AP PRECIATED THE FACT THAT THE INCOME TAX RULES 1962 PROVIDE SPECIAL RATE OF DEPRECIATION ONLY FOR RENEWABLE ENERGY DEVICE BEING WIND MILL AND ANY DEVICES WHICH RUN ON WIND MILLS. THE POWER EVACUATION INFRASTRUCTURE IS NOT A RENEWABLE ENERGY DEVICE. 8. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOS E OFF. 3. IN ITS CROSS OBJECTIONS NO. 35/CHD/2016, THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS:- 1. THAT THE LEARNED CIT (A)- 2, LUDHIANA, HAS ERRED IN SUSTAINING A DISALLOWANCE OF RS. 31,20,874/- U/S 14A / RULE 8D (2)(II) OF THE INCOME TAX RULES. 2. THAT THE LEARNED CIT(A) IS IN COMPLETE DEFIANCE OF THE ORDER OF THE TRIBUNAL FOR THE A.Y. 2010-11 & 2011-12 WHEREIN THE HON'BLE TRIBUNAL HAD DELETED THE DISALLOWANCE U/S 1 4A ON THE GROUND THAT AFTER NETTING OF INTEREST NOTHING REMAI NED FOR MAKING ANY DISALLOWANCE ON ACCOUNT OF INTEREST. 3. THAT THE LEARNED CIT(A) HAS IGNORED THAT THE PRI NCIPLES OF JUDICIAL DISCIPLINE REQUIRE THAT THE ORDERS OF THE HIGHER APPELLATE AUTHORITIES SHOULD BE FOLLOWED UNRESERVEDLY BY THE SUBORDINATE AUTHORITIES AND NON-COMPLIANCE LEADS TO INITIATION OF CONTEMPT PROCEEDINGS. 4. THAT IN ANY CASE THE CONFORMATION OF DISALLOWANCE O F RS. 31,20,874/- IS AGAINST THE LAW AND FACTS OF THE CAS E AND IGNORING THE SUBMISSIONS MADE BY THE APPELLANT. ITA NS. 970-C-2016 & C.O.36-CHD/2016 M/S AVON CYCLES LTD, LUDHIANA 4 5. THAT THE ASSESSEE CRAVES FOR PERMISSION TO ADD, AME ND OR ALTER ANY CROSS-OBJECTION AT THE TIME OF HEARING. 4 . GROUND NO.1 & 2 OF REVENUES APPEAL : THE REVENUE THROUGH ITS GROUND NOS. 1 & 2 OF THE APPEAL HAS AGITATED THE AC TION OF THE CIT(A) IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFF ICER U/S 36(1)(III) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') IN RE SPECT OF DISALLOWANCE OF INTEREST ON CAPITAL WORK IN PROGRESS. 5. THE LD. CIT(A) DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER FOLLOWING THE DECISION OF THE TRIBUNAL DATE D 27.11.2015 IN THE OWN CASE OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2010-11 AND 2011-12 IN ITA NO. 687/CHD/2014 & ORS. THE LD. COUNSEL AT T HIS STAGE HAS SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY THE SUBSEQUENT DECISION OF THE TRIBUNAL DATED 6.8.2018, IN THE OWN CASE OF THE ASSESSEE, FOR ASSESSMENT YEAR 2012-13 IN ITA NO. 195/CHD/2016 RE LATING TO THE ASSESSMENT YEAR 2012-13, WHEREIN, ON IDENTICAL ISS UE, THE TRIBUNAL AFTER CONSIDERING THE RIVAL SUBMISSIONS HELD THAT S INCE ASSESSEE WAS POSSESSED OF OWN SUFFICIENT FUNDS TO MEET THE INVES TMENT IN QUESTION, NO DISALLOWANCE WAS ATTRACTED. THE RELEVANT PART OF TH E ORDER OF THE TRIBUNAL (SUPRA) IS REPRODUCED AS UNDER:- 9. HAVING HEARD THE CONTENTIONS OF BOTH THE PARTIE S, WE FIND NO MERIT IN THE PRESENT GROUND RAISED BY TH E REVENUE. UNDOUBTEDLY, THE CIT(APPEALS) HAD DELETED THE DISALLOWANCE OF INTEREST FOLLOWING THE ORDER OF THE ITA NS. 970-C-2016 & C.O.36-CHD/2016 M/S AVON CYCLES LTD, LUDHIANA 5 I.T.A.T. IN PRECEDING YEARS I.E. ASSESSMENT YEARS 2 010- 11 AND 2011-12 FINDING THE FACTS TO BE IDENTICAL WI TH THE PRESENT CASE BOTH WITH REGARD TO INVESTMENT MAD E IN LAND AND INVESTMENT IN CAPITAL WORK IN PROGRESS. THE ITAT, WE NOTE, HAD DELETED THE DISALLOWANCE FOR THE REASON THAT THE ASSESSEE HAD DEMONSTRATED AVAILABIL ITY OF OWN FUNDS FOR THE PURPOSE OF MAKING THE INVESTME NT. VIS A VIS THE INVESTMENT MADE IN CAPITAL WORK IN PROGRESS THE ITAT, WE FIND, AGREED WITH THE CIT(APPEALS) THAT FOR THE PURPOSE OF MAKING DISALLOWANCE OF INTEREST ON ACCOUNT OF INVESTMENT M ADE IN WORK IN PROGRESS, IT WAS NECESSARY TO SHOW THAT INTEREST BEARING FUNDS HAD BEEN BORROWED SPECIFICAL LY FOR THE SAID PURPOSE, WHICH WAS NOT DONE BY THE REVENUE. THE REVENUE, IN THE PRESENT CASE, WE FIN D, HAS NOT BROUGHT OUT TO OUR NOTICE ANY DISTINGUISHIN G FACTS. EVEN OTHERWISE, THE LD. COUNSEL FOR ASSESSEE HAS DEMONSTRATED THE AVAILABILITY OF ENOUGH OWN FUNDS F OR THE PURPOSE OF MAKING INVESTMENT IN LAND DURING THE YEAR, WHICH FACT HAS NOT BEEN CONTROVERTED BY THE REVENUE BEFORE US. THEREFORE, FOLLOWING THE PARITY OF REASONING MADE IN THE EARLIER YEARS BY THE I.T.A.T. , NO DISALLOWANCE OF INTEREST ON ACCOUNT OF INVESTMENT M ADE IN LAND DURING THE YEAR, WE HOLD, WAS ALSO WARRANT ED. 10. IN VIEW OF THE ABOVE WE UPHOLD THE ORDER OF THE CIT(APPEALS) IN DELETING THE DISALLOWANCE MADE OF INTEREST MADE UNDER SECTION 36(1)(III) OF THE ACT, AMOUNTING TO RS.14,42,161/-. GROUND OF APPEAL NOS.1 AND 2 RAISED BY THE REVENUE ARE, THEREFORE, DISMISS ED. 6. THE LD. COUNSEL FOR THE ASSESSEE BEFORE US HAS D EMONSTRATED THAT THE SHARE CAPITAL OF THE ASSESSEE DURING THE YEAR W AS 89.64 LACS WHEREAS THE RESERVES AND SURPLUS WERE AT 20779.64 LACS TOTALLING 20869.28 LACS. BESIDES THAT THE INCOME OF THE ASSE SSEE FOR THE YEAR UNDER CONSIDERATION WAS AT 40.49 CRORES, HOWEVER, THE TOTAL CAPITAL WORK IN PROGRESS WAS AT 11.26 CORES ONLY, OUT OF WHICH THE OLD ITA NS. 970-C-2016 & C.O.36-CHD/2016 M/S AVON CYCLES LTD, LUDHIANA 6 INVESTMENT INLAND WAS 8.90 CRORES AND INVESTMENT DU RING THE YEAR WAS 3.07 CORES. EVEN IF WE TAKE INTO CONSIDERATION THE OTHER INVESTMENT OF 4286 LACS IN SHARES, IT IS SEEN THAT THE ASSESSEE W AS POSSESSED OF SUFFICIENT OWN FUNDS TO MEET THE CAPITAL WORK IN PR OGRESS. THE ISSUE IS NOW SQUARELY COVERED BY THE DECISION IN THE CASE OF HERO CYCLES (P) LTD VS. CIT 379 ITR 347 (SC) AN D ALSO BY THE RECENT DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT (LTU) VS. RELIANCE INDUSTRIES LTD. [2019] 410 ITR 466 (SC), WHEREIN, THE HON'BLE SUPREME COURT HAS AFFIRMED T HE PROPOSITION OF LAW THAT IF THE OWN FUNDS / INTEREST FREE FUNDS ARE AVAILABLE WITH THE ASSESSEE TO MEET THE INVESTMENT, PRESUMPTION WILL B E THAT THE ASSESSEE HAD USED ITS OWN / INTEREST FREE FUNDS FOR THE SAID INVESTMENT. 7. IN VIEW OF THIS WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) ON THIS ISSUE AND GROUND NOS. 1 & 2 OF THE A PPEAL ARE, THEREFORE, DISMISSED. 8. GROUND NOS. 3 & 4 OF REVENUES APPEAL AND GROUNDS OF CROSS OBJECTIONS: THESE GROUNDS ARE RELATING TO THE ACTION OF THE CI T(A) IN DIRECTING THE ASSESSING OFFICER TO RECOMPUTE THE DISALLOWANCE U/S 14A READ WITH RULE 8-D OF THE I.T. RULES, WHEREAS, THE ASSESSEE IN ITS CROSS OBJECTIONS HAS AGITATED THE ACTION OF THE CI T(A) ON THIS ISSUE IN SUSTAINING THE DISALLOWANCE OF 31,20,874/- MADE UNDER SECTION 14A READ WITH RULE 8D(2)(II) OF THE I.T. RULES. ITA NS. 970-C-2016 & C.O.36-CHD/2016 M/S AVON CYCLES LTD, LUDHIANA 7 9. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT T HE ASSESSEE HAD SHOWN INVESTMENT OF 42.86 CRORES, AS ON 31.3.2013, FROM THIS INVESTMENT, THE ASSESSEE EARNED DIVIDEND INCOME OF 19,62,932/-. THE ASSESSEE DURING THE YEAR HAD INCURRED AND CLAIMED F INANCIAL EXPENDITURE OF 5.27 CORES. THE ASSESSING OFFICER APPLYING THE PRO VISIONS OF SECTION 14A READ WITH RULE 8D OF THE I.T. RULES COMPUTED TH E DISALLOWANCE U/S 14A AT 77,45,320/-. 10. IN APPEAL BEFORE THE CIT(A), THE ASSESSEE RAISE D SEVERAL CONTENTIONS THAT DISALLOWANCE OF INTEREST IF ANY W AS TO BE MADE AFTER NETTING OFF INTEREST RECEIVED, THAT INTEREST PAID O N LOANS TAKEN FOR SPECIFIC PURPOSES RELATED TO THE BUSINESS OF THE AS SESSEE WAS TO BE EXCLUDED AND THAT IN VIEW OF SUFFICIENCY OF OWN FUN DS NO DISALLOWANCE U/S 14A WAS WARRANTED. THE LD. CIT(APPEALS) FOUND T HAT THE I.T.A.T. HAD DECIDED IDENTICAL ISSUE IN THE CASE OF THE ASSE SSEE IN ASSESSMENT YEAR 2008-09, GIVING PART RELIEF TO THE ASSESSEE. H E ACCORDINGLY DIRECTED THE ASSESSING OFFICER TO REWORK THE DISALL OWANCE IN ACCORDANCE WITH THE ORDER OF THE ITAT IN PRECEDING YEARS THUS GIVING PART RELIEF TO THE ASSESSEE. 11. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE TR IBUNAL DATED 6.8.2018 IN ITA NO. 195/CHD/2016 RELATING TO THE ASSESSMENT YEAR 2012-13. THE ITA NS. 970-C-2016 & C.O.36-CHD/2016 M/S AVON CYCLES LTD, LUDHIANA 8 TRIBUNAL IN THE IDENTICAL FACTS IN EARLIER ASSESSME NT YEARS IN THE CASE OF ASSESSEE HAS DECIDED THE ISSUE BY OBSERVING AS UNDE R:- 13. AT THE OUTSET OUR ATTENTION WAS DRAWN TO THE O RDER OF THE ITAT IN ASSESSMENT YEARS 2010-11 & 2011-12, WHICH WAS FOLLOWED BY THE CIT(APPEALS) AND COPY OF WHICH WAS PLACED BEFORE US. DRAWING OUR ATTENTION T O PAGES 7-13 OF THE ORDER, WHERE THE ISSUE OF DISALLOWANCE OF EXPENSES U/S 14A WAS DEALT WITH ,IT WAS POINTED OUT THAT THE ITAT HAD GRANTED RELIEF TO THE ASSESSEE ACCEPTING ITS CONTENTION THAT INTEREST PAI D WHICH IS DIRECTLY ATTRIBUTABLE TO EARNING TAXABLE I NCOME I.E. INTEREST ON CASH CREDITS AND PACKING CREDIT BE EXCLUDED FOR COMPUTING DISALLOWANCE U/S 14A OF THE ACT. LD.DR STATED THAT REVENUE WAS AGGRIEVED BY THE ORDE R OF THE CIT(APPEALS) DIRECTING THE ASSESSING OFFIC ER TO FOLLOW THE ORDER OF THE ITAT AND THUS ALLOW RELIEF TO THIS EXTENT TO THE ASSESSEE, WHICH HAS BEEN RAISED IN GROUND NO.3 BEFORE US. GROUND NO.4 RAISED BY THE REVENUE RELATING TO NETTING OFF THE INTEREST, IT WA S ADMITTED BEFORE US, HAD BEEN WRONGLY TAKEN SINCE T HE CIT(APPEALS) HAD DENIED THE BENEFIT OF NETTING AND THE REVENUE THEREFORE HAD NO GRIEVANCE AGAINST THE SAM E. 14. TAKING UP GROUND NO.3, LD. DR FAIRLY CONCEDED THAT THE ISSUE WAS COVERED BY THE ORDER OF THE I.T .A.T. IN THE CASE OF THE ASSESSEE ITSELF IN THE PRECEDING ASSESSMENT YEARS I.E. 2010-11 AND 2011-12. HE HOWEV ER RELIED ON THE ORDER OF THE ASSESSING OFFICER. 15. THE LD. COUNSEL FOR ASSESSEE, ON THE OTHER HAND , RELIED UPON THE ORDER OF THE CIT(APPEALS). 16. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTIES. IN VIEW OF THE ADMITTED FACT THAT IN PRECE DING YEARS THE ITAT HAD HELD THE EXCLUSION OF INTEREST P AID ON SPECIFIC LOANS TAKEN FOR BUSINESS PURPOSES FROM THE INTEREST DISALLOWABLE U/S 14A OF THE ACT, WE FIND N O REASON TO INTERFERE IN THE ORDER OF THE CIT(APPEALS ) DIRECTING THE ASSESSING OFFICER TO RECOMPUTE THE DISALLOWANCE IN ACCORDANCE WITH THE SAID DIRECTION OF THE ITAT. NO DISTINGUISHING FACTS HAVE BEEN BROUGHT TO ITA NS. 970-C-2016 & C.O.36-CHD/2016 M/S AVON CYCLES LTD, LUDHIANA 9 OUR NOTICE BY THE LD. DR. THEREFORE THE DIRECTION OF THE CIT(APPEALS) TO FOLLOW THE ORDER OF THE ITAT IN THE PRECEDING YEAR IN THIS RESPECT IS UPHELD. GROUNDS OF APPEAL NOS. 3 & 4 RAISED BY THE REVENUE ARE ACCORDINGLY DISMISSED. 12. THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OU R ATTENTION TO THE FACTS FOR THE YEAR UNDER CONSIDERATION THAT THE ASS ESSEE DURING THE YEAR HAS NOT MADE ANY FRESH INVESTMENT. ALL THE INVESTM ENTS WERE OLD INVESTMENTS. THE TRIBUNAL IN THE EARLIER ASSESSMENT YEARS I.E. 2009-10, 2010-11 & 2011-12 HAD ACCEPTED THE CONTENTION OF TH E ASSESSEE THAT THE INTEREST PAID AND RECEIVED IS TO BE NETTED. THAT TH E ASSESSEE DURING THE YEAR PAID GROSS INTEREST OF 4,78,58,035/-, OUT OF WHICH A SUM OF 1,97,57,256/- WAS PAID ON TERM LOAN AND FURTHER A S UM OF 10,69,842/- WAS PAID AS INTEREST ON PACKING CREDIT LOAN. THAT T HE AFORESAID INTEREST PAID WAS FOR SPECIFIC PURPOSE AND CANNOT BE ATTRIBU TED TO THE INVESTMENT MADE BY THE ASSESSEE. APART FROM THAT, THE ASSESSEE RECEIVED A TOTAL INTEREST OF 2,77,30,221/- WHICH IS ALSO REQUIRED TO BE NETTED OF AGAINST THE TOTAL INTEREST EXPENDITURE. UNDER THE CIRCUMSTA NCES, THE NET INTEREST PAID WILL BE IN NEGATIVE AND, HENCE, NO DISALLOWANC E OF INTEREST EXPENDITURE UNDER RULE 8D (2)(II) IS CALLED FOR. TH E ISSUE IS SQUARELY COVERED BY THE EARLIER DECISION OF THE TRIBUNAL INC LUDING THE DECISION DATED 6.8.2018 PASSED IN ITA NO. 195/CHD/2016 FOR A SSESSMENT YEAR 2012-13 (SUPRA) AS REPRODUCED ABOVE. ITA NS. 970-C-2016 & C.O.36-CHD/2016 M/S AVON CYCLES LTD, LUDHIANA 10 13. IN VIEW OF THIS, GROUND NOS. 3 & 4 OF THE REVEN UES APPEAL ARE HEREBY DISMISSED, WHEREAS, THE CROSS OBJECTIONS OF THE ASSESSEE IS ALLOWED AND IT IS ORDERED THAT NO INTEREST DISALLOW ANCE U/S 14A READ WITH RULE 8D (2)II) IS CALLED FOR IN THIS CASE. HOWEVER, SO FAR AS THE DISALLOWANCE OF ADMINISTRATI VE EXPENDITURE UNDER RULE 8D (2)(II) IS CONCERNED, THE ORDER OF T HE CIT(A) IS CONFIRMED TO THAT EXTENT. HOWEVER, THE ASSESSEE WILL BE GIVE N BENEFIT OF SUO MOTU DISALLOWANCE DECLARED, IF ANY, U/S 14A OF THE ACT. 14. GROUND NO. 5, 6 & 7: THE REVENUE VIDE THESE GROUNDS HAS AGITATED THE ACTION OF THE CIT(A) IN DELETING THE A DDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF DE PRECIATION ON POWER EVACUATION FACILITY ON WIND TURBINE GENERATOR @ 80% . 15. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE DECISION OF THE HON'BLE HIGH COUR T IN THE OWN CASE OF THE ASSESSEE VIDE ORDER DATED 4.11.2015 PASSED IN I TA NO. 65 & 66 OF 2015 TITLED AS CIT VS. M.S AVON CYCLES LTD. WHE REIN, THE COUNSEL FOR THE REVENUE HAD FAIRLY CONCEDED THAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF THE HONBLE PUNJAB & HARYANA HIGH C OURT DATED 18.12.2014 IN THE CASE OF CIT VS. M/S EASTMAN IMPE X IN ITA NO. 350 OF 2013, WHEREIN, THE HON'BLE HIGH COURT WHILE RELY ING UPON THE DECISION OF THE HON'BLE HIGH COURT OF RAJASTHAN IN CIT VS. K.K. ENTERPRISES, [2014] 108 DTR 109 OBSERVED AS UNDER:- ITA NS. 970-C-2016 & C.O.36-CHD/2016 M/S AVON CYCLES LTD, LUDHIANA 11 WE HAVE PERUSED THE OPINION RECORDED BY THE RAJASTHAN HIGH COURT AND FIND NO REASON TO RECORD AN OPINION TO THE CONTRARY. A WIND MILL, WHICH IS A SOURCE OF RENEWABLE ENERGY, CANNOT KANCHAN 2015.01.06 16:04 I ATTEST TO THE ACCURACY AND AUTHENTICITY OF THIS DOCUMENT CHANDIGARH ITA NO. 350 OF 2013 POSSIBLY FUNCTION WITHOUT POWER EVACUATION INFRASTRUCTURE AND, THEREFORE, TO HOLD T HAT IT IS NOT INTEGRAL TO A WIND MILL WOULD BE TRAVESTY ING OF FACTS AND JUSTICE. IT WOULD BE NECESSARY TO CLAR IFY THAT WE ARE NOT DEALING WITH AN ORDINARY DEVICE, WHERE TRANSMISSION LINES AND ELECTRICITY GENERATION DEVICES ARE INVOLVED BUT A WIND MILL, WHICH OBVIOUS LY CANNOT SUPPLY ELECTRICITY WITHOUT POWER EVACUATION INFRASTRUCTURE AS INTEGRAL TO ITS VERY FUNCTIONING AND USER. CONSEQUENTLY, WE ANSWER QUESTIONS OF LAW AGAINST THE REVENUE AND DISMISS THE APPEALS ACCORDINGLY. 16. WE, THEREFORE, DO NOT FIND ANY REASON TO INTERF ERE IN THE ORDER OF THE CIT(A) ON THIS ISSUE. THESE GROUND OF THE APPEA L OF THE REVENUE ARE ACCORDINGLY DISMISSED. SUBJECT TO OUR DIRECTIONS G IVEN ABOVE, THE APPEAL OF THE REVENUE IS HEREBY DISMISSED, WHEREAS , THE CROSS OBJECTIONS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23.05.2019 SD/- SD/- ( . . / N.K. SAINI) ( ! / SANJAY GARG) '#$ / VICE PRESIDENT % & / JUDICIAL MEMBER DATED : 23.05.2019 .. ITA NS. 970-C-2016 & C.O.36-CHD/2016 M/S AVON CYCLES LTD, LUDHIANA 12 6 / (.78 98!. / COPY OF THE ORDER FORWARDED TO : 1. $& / THE APPELLANT 2. ()$& / THE RESPONDENT 3. 1 :. / CIT 4. 1 :. ( )/ THE CIT(A) 5. 8; (.< , 3 < , =>?@ / DR, ITAT, CHANDIGARH 6. ? A2 / GUARD FILE 6 1 / BY ORDER, B / ASSISTANT REGISTRAR