Sigachi Laboratories Limited, Hyderabad V. DCIT, Hyderabad

CO 4/HYD/2010

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8519 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 23 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 23-05-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-12-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 31-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M H NAIK
• Assessee Lawyers: S RAMA RAO
• Keywords: Earning of tax free income; Bad and doubtful debts
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.75/HYD/2010 : ASSESSMENT YEAR 2006-07 DY , COMMISSIONER OF INCOME - TAX, CIRCLE 3(2), HYDERABAD V/S M/S. SIGACHI LABORATORIES LTD., HYDERABAD (PAN AACCS 8220 M) (APPELLANT) (RESPONDENT) CROSS OBJECTION NO.4/HYD/10 (IN ITA NO.75/HYD/2010) : ASSESSMENT YEAR 2006-07 M/S. SIGACHI LABORATORIES LTD., HYDERABAD (PAN AACCS 8220 M) V/S DY, COMMISSIONER OF INCOME-TAX, CIRCLE 3(2), HYDERABAD (CROSS OBJECTOR) (APPELLANT - IN - APPEAL) REVENUE BY : SHRI M.H.NAIK, DR ASSESSEE BY : SHRI S.RAMA RAO DATE OF HEARING 14.03.2013 DATE OF PRONOUNCEMENT 23.05.2013 O R D E R PER SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER: THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE CIT( A) IV, HYDERABAD DATED 30.10.2009 FOR THE ASSESSMENT YEAR 2006-07. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING OF BULK DR UGS AND INTERMEDIARIES, FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006- 07, ADMITTING AN INCOME OF RS.2,75,330. ASSESSEE S INCOME COMPRISED OF CONVERSION/JOB WORK CHARGES, INTEREST ON FDS, DI VIDENDS AND PROFIT ON ITA NO.75/HYD/10 & CO 4/HYD/ 10 M/S. SIGACHI LABORATORIES LTD., HYDERABAD 2 SALE OF INVESTMENTS. IT WAS THE CLAIM OF THE ASSES SEE BEFORE THE ASSESSING OFFICER, THAT THE CONVERSION/JOB WORK CHA RGES SHOWN IN THE PROFIT & LOSS ACCOUNT REPRESENTED THE RECEIPT OF LE ASE AMOUNTS FROM TWO COMPANIES TO WHOM THE FACTORY PREMISES HAD BEEN LET OUT DURING THE YEAR. THE ASSESSEE HAS ALSO FURNISHED COPIES OF T HE LEASE AGREEMENTS WHICH SHOWED THAT THE ASSESSEE HAS LEASED OUT ITS P REMISES TO M/S. NIFTY LABS PVT. LTD. AND M/S. METROCHEM AOPI PVT. LTD. FO R THE PURPOSE OF MANUFACTURE OF THEIR DRUGS. IN CONSIDERATION, THE ASSESSEE HAD RECEIVED AN ANNUAL LEASE OF RS.34,50,000. THE ASSESSING OFF ICER OBSERVED FROM THE LEASE DEEDS THAT THE LESSEES HAD REIMBURSED THE AMOUNTS SPENT BY THE ASSESSEE COMPANY TOWARDS EFFLUENT CHARGES, SALA RIES, WAGES, MAINTENANCE AND ELECTRICITY CHARGES. THE ASSESSING OFFICER CONCLUDED THAT THE ASSESSEE WAS NOT DOING ANY MANUFACTURING A CTIVITY, AND THE SAID FINDING WAS ALSO CORROBORATED BY THE FACT OF ABSENC E OF ANY WORK IN PROGRESS OR CLOSING STOCK. HE ACCORDINGLY, PROCEEDE D TO DISALLOW THE MANUFACTURING EXPENDITURE TOTALING TO RS.2,51,636, BY CONCLUDING THAT THERE WAS NO MANUFACTURING ACTIVITY AND THAT ALL TH E EXPENSES WERE REIMBURSABLE BY THE LESSEES. 3. THE ASSESSING OFFICER FURTHER, DISALLOWED THE ASSESSEES CLAIM FOR ELECTRICITY CHARGES OF RS.4,361 AND POSTAGE AND TELEGRAMS OF RS.84,393, OBSERVING THAT EXCEPTS FOR RECEIPT OF LE ASE RENTALS, THERE WAS NO BUSINESS ACTIVITY, AND THAT AS PER THE LEASE AGR EEMENTS EVEN THE ELECTRICITY CHARGES WERE REIMBURSABLE. THE ASSESSI NG OFFICER ALSO DISALLOWED THE ASSESSEES CLAIM FOR COLLECTION CHAR GES, SHARE TRANSFER FEE, LISTING FEE, TRAVELLING EXPENDITURE, INTEREST ON LO AN, SALARIES, ETC. TOTALING TO RS.1,61,237 UNDER THE HEAD ADMINISTRATIVE EXPEN DITURE, OBSERVING THAT SHARE TRANSFER FEE, COLLECTION CHARGES, LISTIN G FEE, ETC. WERE ATTRIBUTABLE TO THE EARNING OF INCOME FROM TRANSACT IONS IN SHARES, AND EVEN THE REQUIREMENT OF WORK FORCE BY THE ASSESSEE MUST HAVE BEEN ONLY FOR THE TRANSACTIONS IN SHARES AND THE EARNING OF L EASE INCOME. SINCE THE ITA NO.75/HYD/10 & CO 4/HYD/ 10 M/S. SIGACHI LABORATORIES LTD., HYDERABAD 3 INCOME FROM TRANSACTIONS IN SHARES WAS NOT INCLUDIB LE IN THE TOTAL INCOME, THE ASSESSING OFFICER OPINED THAT EXPENDITURE ATTRI BUTABLE TO SUCH INCOME WAS NOT ALLOWABLE. THE ASSESSING OFFICER FURTHER D ISALLOWED ASSESSEES CLAIM FOR BAD DEBTS OF RS.20,43,069, ON THE GROUND THAT THE ASSESSEE COMPANY DID NOT HAVE ANY BAD DEBTS AT THE BEGINNING OF THE YEAR, AND AS SUCH IT IS DIFFICULT BELIEVE THAT THE DEBTS RAISED DURING THE YEAR HAVE BECOME UNRECOVERABLE. 4. THE ASSESSING OFFICER ACCORDINGLY, COMPLETED THE ASSESSMENT ON A TOTAL INCOME OF RS.35,60,781, AS AGAINST RETUR NED INCOME BEFORE SET OFF OF RS.10,16,085, VIDE ORDER OF ASSESSMENT DATE D 22.11.2008 PASSED UNDER S.143(3) OF THE ACT, WITH THE ADDITIONS/DISAL LOWANCES, MADE AS FOLLOWS- INCOME FROM BUSINESS BEFORE SET-OFF AS RETURNED RS.10,16,085 ADD: 1)MANUFACTURING EXPENSES RS. 2,51,636 2)SALARY & ELECTRICITY CHARGES RS. 88 ,754 3)EXPENDITURE DISALLOWED RS. 1,61,237 4)BAD DEBTS RS. 20,43,069 TOTAL INCOME RS. 35,60,781 5. ON APPEAL, THE CIT(A), ANALYZING THE LEASE DEED S, OBSERVED THAT THE EXPENSES ON SALARY AND ELECTRICITY INCURRE D FOR THE OFFICE PURPOSES WERE TO BE INCURRED BY THE ASSESSEE ITSELF , AND HENCE, EXPENDITURE ON ELECTRICITY AND OFFICE SALARY OF RS. 4,361 AND RS.49,584 RESPECTIVELY WERE NOT INCURRED FOR THE FACTORY PREM ISES. HE ACCORDINGLY DELETED THE ADDITION TO THE EXTENT OF RS.53,945 OUT OF THE TOTAL ADDITION OF RS.88,754 MADE BY THE ASSESSING OFFICER. IT WAS ALSO CONTENDED BEFORE THE CIT(A) THAT CERTAIN EXPENSES TOWARDS MAINTENAN CE OF FACTORY WERE REQUIRED TO BE INCURRED BY THE ASSESSEE FOR ENSURIN G THAT THE TWO LESSEE PARTIES ARE CARRYING ON THEIR ACTIVITIES STRICTLY I N ACCORDANCE WITH THE ITA NO.75/HYD/10 & CO 4/HYD/ 10 M/S. SIGACHI LABORATORIES LTD., HYDERABAD 4 LEASE AGREEMENTS, AND AS SUCH THE EXPENDITURE INCUR RED BY THE ASSESSEE ON THE STAFF DEPLOYED AND ON INSURANCE OF THE FACTO RY WAS CLEARLY ALLOWABLE. THE CIT(A), FINDING MERIT IN THIS CONTE NTION OF THE ASSESSEE, ACCEPTED THE CLAIM OF THE ASSESSEE IN RELATION TO I NSURANCE OF RS.62,979; ESI OF RS.8,932 AND FACTORY SALARIES OF RS.88,428. ASSESSEE WAS THUS ALLOWED RELIEF OF RS.1,60,339, OUT OF THE DISALLOWA NCE ON ACCOUNT OF TOTAL MANUFACTURING EXPENSES CLAIMED OF RS.2,51,636, FURT HER OBSERVING THAT DETAILS OF BALANCE AMOUNT OF MANUFACTURING EXPENSES OF RS.91,297 HAVE NOT BEEN FIELD BY THE ASSESSEE. THE CIT(A) SUSTAIN ED THE ADDITION OF RS.1,61,237 MADE BY THE ASSESSING OFFICER ON ACCOUN T OF SHARE TRANSFER FEE, LISTING FEE, COLLECTION CHARGES, ETC. ON THE G ROUND THAT THE SAME WERE NOT BEING FOR THE PURPOSE OF BUSINESS ACTIVITY. HE HOWEVER, DELETED THE DISALLOWANCE OF RS.20,43,069 ON ACCOUNT OF BAD DEBT S MADE BY THE ASSESSING OFFICER, AFTER ELABORATE DISCUSSION ON TH E ISSUE, AND FOLLOWING THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL I N THE CASE OF POYSHA OXYGEN (P)LTD. V/S. ACIT(19 SOT 711)(DEL), AND THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF AUTO METERS LTD. V/S.CIT(292 ITR 245), FOLLOWING THE RATIO LAID DOWN IN WHICH IT WAS CONSISTENTLY HELD BY THE VARIOUS BENCHES OF THE TRIBUNAL INCLUDING THOSE AT HYDERABAD, THAT MERE WRITE OFF OF A DEBT IN THE BOOKS OF ACCOUNT WOULD B E SUFFICIENT TO ACCEPT A CLAIM FOR DEDUCTION TOWARDS THE BAD DEBT. THE CIT( A) ALSO ACCEPTED THE ASSESSEES CLAIM FOR SET OFF OF LOSSES OF THE EARLI ER YEARS, AND DIRECTED THE ASSESSING OFFICER TO EXAMINE THE SAME IN ACCORDANCE WITH LAW AND ALLOW THE SAME AFTER DUE VERIFICATION. 6. WHILE REVENUE PREFERRED ITS APPEAL, ITA NO.75/H YD/2010, AGGRIEVED BY THE RELIEFS GRANTED BY THE CIT(A), ASS ESSEE PREFERRED ITS CROSS OBJECTION IN THE SAID APPEAL, BEING CO NO.4/H YD/2010 AGGRIEVED BY THE ADDITIONS SUSTAINED BY THE CIT(A). ITA NO.75/HYD/10 & CO 4/HYD/ 10 M/S. SIGACHI LABORATORIES LTD., HYDERABAD 5 7. GROUNDS OF THE REVENUE IN ITS APPEAL ARE AS FO LLOWS- 1. THE CIT(A) ERRED ON FACTS AND IN LAW. 2, THE CIT(A) ERRED IN NOT APPRECIATING THE FACT TH AT THE LEASE DEED CLEARLY SPECIFIES THAT THE EXPENDITURE I N RELATION TO THE SALARIES, FACTORY EXPENSES, ELECTRI CITY CHARGES ARE REIMBURSABLE AND HENCE THE CLAIM OF EXPENDITURE OF THE ASSESSEE IS NOT ALLOWABLE. 3. THE CIT(A) SHOULD HAVE UPHELD THE DISALLOWANCE O F BAD DEBTS. 4. THE CIT(A) SHOULD HAVE UPHELD THE DISALLOWANCE O F THE EXPENDITURE INCURRED FOR EARNING THE EXEMPTED INCOM E. 5. . 8. WE FIND THAT THE CIT(A) AFTER VERIFYING THE LEAS E DEEDS HELD THAT EXPENSES ON SALARY AND ELECTRICITY INCURRED WERE NO T FOR THE PURPOSE OF MAINTAINING THE OFFICE AND FEES EXPENSES WERE NOT I NCURRED FOR FACTORY PURPOSES. THE ADDITION TO THE EXTENT OF RS.53,945/- OUT OF THE TOTAL ADDITION OF RS.88,745/- WAS DELETED BY THE CIT(A). WE FIND THAT THE ASSESSEE IS IN POSSESSION AND CONTROL OF THE FACTOR Y PREMISES AND OTHER PLANT AND MACHINERY. THE ASSESSEE IS OWNER OF THE S AID ASSETS INSPITE OF THE FACT THAT THE ENTIRE ACTIVITY/WORKS BEING CARRI ED ON BY M/S. METROCHEM AOPI LTD. NEVERTHELESS SOME EXPENDITURE ON MAINTENA NCE OF THE FACTORY HAS TO BE CARRIED OUT AND INCURRED BY THE ASSESSEE. THERE IS MERIT IN THE CONTENTION OF THE ASSESSEE THAT THE COMPANY INCURS EXPENDITURE ONLY IN CONNECTION WITH THE MANUFACTURING PROCESS, WHEREAS, WITH RESPECT TO OTHER EXPENDITURE LIKE MAINTENANCE OF THE PREMISES HAS TO BE CARRIED OUT BY THE ASSESSEE ITSELF. IT WAS ALSO POINTED OUT THA T SOME EMPLOYEES ARE NECESSARY TO VERIFY WHETHER M/S. METROCHEM AOPI LTD . IS CARRYING OUT THE ACTIVITIES WITHOUT ANY DETRIMENT TO THE OWNER THAT IS THE ASSESSEE AND WHETHER THE ASSETS ARE BEING KEPT IN TACT AS PER AG REEMENT OR NOT. THE SALARY AND ELECTRICITY CHARGES IN RESPECT OF ADMINI STRATIVE BLOCK AND ITA NO.75/HYD/10 & CO 4/HYD/ 10 M/S. SIGACHI LABORATORIES LTD., HYDERABAD 6 EXPENDITURE TOWARDS INSURANCE AND EXPENDITURE TOWAR DS ESI ARE TO BE ALLOWED. WE FIND THAT CLAUSE 7 OF MOU DATED 23 RD MARCH, 2005 ENTERED BETWEEN M/S. SIGACHI LABORATORIES LTD., AND M/S. NI FTY LABS PVT. LTD. AND METROCHEM APL. PVT. LTD. READS AS FOLLOWS : 07. THE PARTY OF THE SECOND PART HAS AGREED TO PAY ALL ELECTRICITY CHARGES/ACD/AND OTHER DEMANDS AS PER THE BILLS OF A PSEB/AP TRANSCO IN RESPECT OF THE POWER CONSUMED FOR THE FACTORY PREMISES OF THE PARTY OF THE FIRST PART. THE PARTY OF THE FIRST PART HAS INFORMED THAT IT IS HAVING ACD CREDIT WITH AP TRANSCO/APSEB AND IF THE PARTY OF THE SECOND PART C ONSUMES SUCH QUANTITY OF POWER FROM AP TRANSOM/APSEB OR IF IT RAISES A BILL FOR ACD/OR IF AS PER THE RULES AND REGULATIONS OF AP TRANSCO, IF THE PARTY OF THE SECOND PART IS REQUIRE D TO PAY ANY ACD, THEN SUCH ACD SHALL BE PAID TO THE PARTY OF TH E SECOND PART WITHIN 15 DAYS BY THE PARTY OF THE FIRST PART. 9. FROM THE ABOVE CLAUSE, WE OBSERVE THAT PARTY OF FIRST PARTY IS RETAINING ITS CONTROL THE OFFICE PREMISES AND IT IS ONLY THE FACTORY PREMISES WHICH IS TAKEN ON LEASE BY THE METROCHEM AND CARRYI NG ON MANUFACTURE WORK IN THE PREMISES. HENCE, THE ASSESSEE IS NECESS ARILY REQUIRED TO INCUR EXPENDITURE WHICH HAS BEEN ALLOWED BY CIT(A). 10. HENCE, WE CONFIRM THE ORDER OF THE CIT(A) AND ALLOW SALARY AND ELECTRICITY CHARGES AMOUNTING TO RS.8,745/-, IN SURANCE OF RS.62,979/- AND ESI OF RS.8932/-. 11. WITH RESPECT TO CLAIM OF DISALLOWANCE OF DEBT MADE BY THE ASSESSING OFFICER THE CIT(A) HAS RELIED ON THE ORDE R OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF OXYGEN PVT. LTD. VS. ACIT AND HELD THAT MERE WRITE-OFF OF DEBT IN THE BOOKS OF ACCOUNT WOUL D BE SUFFICIENT TO ACCEPT THE CLAIM FOR DEDUCTION TOWARDS BAD DEBT. TH E SUPREME COURT IN ITA NO.75/HYD/10 & CO 4/HYD/ 10 M/S. SIGACHI LABORATORIES LTD., HYDERABAD 7 THE CASE OF TRF LTD., 323 ITR 397, HELD THAT IT IS NOT NECESSARY FOR AN ASSESSEE TO ESTABLISH THAT THE DEBT HAD BECOME IRRECOVERABLE AND IT IS ENOUGH IF THE BAD DEBT IS WRITTEN OFF AS IRRECOVERA BLE IN THE ACCOUNTS. RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF TRF LTD. (SUPRA), WE CONFIRM THE ORDER OF T HE CIT(A) ON THIS ISSUE. HENCE, GROUND NO. 2 AND 3 RAISED BY THE REVE NUE ARE DISMISSED. 12. GROUND NO. 4 RAISED BY THE REVENUE RELATES TO D ISALLOWANCE OF EXPENDITURE OF RS.1,61,237/- BY THE ASSESSING OFFIC ER ON THE GROUND OF EARNING EXEMPT INCOME WHILE DEALING IN SHARES. THE CIT(A), HOWEVER, FOUND THAT THE SHARE TRANSFER FEE, LISTING FEE, COL LECTION CHARGES ETC., CANNOT BE CONSIDERED AS NOT BEING FOR THE PURPOSE O F BUSINESS ACTIVITY AND HELD THAT THE SAME IS TO BE DELETED. THE REVENU E IN GROUND NO. 4 HAS AGITATED ON THE ISSUE OF DISALLOWANCE OF EXPENDITUR E BY THE CIT(A). THE LEARNED A.R. SUBMITTED THAT THE CIT(A) SHOULD HAVE UPHELD DISALLOWANCE OF EXPENDITURE INCURRED FOR EARNING EXEMPTED INCOME . 13. WE HEARD THE PARTIES AND PERUSED THE IMPUGNED ORDERS OF THE LOWER AUTHORITIES AND OTHER MATERIAL ON RECORD. EV EN THOUGH THE DECISION OF THE SPECIAL BENCH DECISION OF THE TRIBUNAL IN TH E CASE OF DAGA CAPITAL MANAGEMENT (P)LTD., (SUPRA) RELIED UPON BY THE LEAR NED COUNSEL FOR THE ASSESSEE SUPPORTS THE CASE OF THE ASSESSEE, WE FIND THAT THE HONBLE BOMBAY HIGH COURT HAS DECIDED SIMILAR ISSUE IN THE CASE OF GODREJ AND BOYCE MFG. CO. LTD. V/S. CIT (328 ITR 81) AND THE S AME IS RELEVANT FOR THE RATIO THAT THE PROVISIONS OF RULE 8D SHOULD BE MADE APPLICABLE EVEN TO THE ASSESSMENT YEARS PRIOR TO THE AMENDMENT TO THE SAID RULE. IT IS ALSO RELEVANT TO MENTION THAT THE SAID JUDGMENT OF BOMBA Y HIGH COURT CONSIDERED THE DECISIONS CITED ABOVE. IT HAS BEEN H ELD BY THE HONBLE BOMBAY HIGH COURT IN THAT CASE, INTER ALIA, AS FOLL OWS- ITA NO.75/HYD/10 & CO 4/HYD/ 10 M/S. SIGACHI LABORATORIES LTD., HYDERABAD 8 67. EVEN IN THE ABSENCE OF SUB-SS. (2)AND (3)OF S. 14A AND OF R.8D, THE AO WAS NOT PRECLUDED FROM MAKING APPORTI ONMENT. SUCH AN APPORTIONMENT WOULD HAVE TO BE MADE IN ORDER TO GIVE EFFECT TO THE SUBSTANTIVE PROVISIONS OF SUB-S.(1) OF S.14A WH ICH PROVIDE THAT NO DEDUCTION WOULD BE ALLOWED IN RESPECT OF EXPENDI TURE INCURRED IN RELATION TO INCOME WHICH DOES NOT FORM PART OF T OTAL INCOME UNDER THE ACT. . THEREFORE, WE FIND NO MISTAKE IN THE DIRECTION OF T HE CIT(A) TO THE ASSESSING OFFICER AND THE ASSESSING OFFICER MAY APP LY THE RULE 8D FOR DETERMINATION OF DISALLOWABLE EXPENDITURE ATTRIBUTA BLE FOR EARNING OF EXEMPT INCOME ON A REASONABLE BASIS MENTIONING THE EXPRESS REASONS. REVENUES GROUND ON THIS ISSUE IS ACCORDINGLY DISMISSED. 14. IN THE RESULT, APPEAL OF THE REVENUE IS DISMIS SED. 15. EFFECTIVE GROUNDS OF THE ASSESSEE IN ITS CROS S-OBJECTIONS READ AS FOLLOWS- 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS.91,297 ON ACCOUNT OF MANUFACTURING EXPENSES DEBITED TO PROFIT & LOSS ACCOUNT. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING DISALLOWANCE OF RS.34,809 ON ACCOUNT OF ELECTRICITY, POSTAGE & TELEGRAMS AND OFFICE SALARIES DEBITED TO PROFIT & LOSS ACCOUNT. 3. 16. WE FIND THAT THE ASSESSING OFFICER HAS ASSESSE D THE INCOME UNDER THE HEAD INCOME FROM BUSINESS. IT IS THE CL AIM OF THE ASSESSEE THAT CERTAIN EXPENSES HAVE BEEN INCURRED TO KEEP TH E MANUFACTURING UNIT INTACT AND ALSO WITH RESPECT TO RETAINING THE PROPE RTY AS HE WAS VESTED INTEREST AS OWNER. IN THESE CIRCUMSTANCES, THE LEAR NED COUNSEL FOR THE ASSESSEE SUBMITTED THAT A SUM OF RS.91,297/- WHICH HAS BEEN DEBITED TO THE ACCOUNT OF MANUFACTURING EXPENSES IS TO BE ALLO WED AND ALSO THE AMOUNT OF RS.34,809/- ON ACCOUNT OF ELECTRICITY, PO STAGE AND TELEGRAMS. ITA NO.75/HYD/10 & CO 4/HYD/ 10 M/S. SIGACHI LABORATORIES LTD., HYDERABAD 9 UNDER THESE CIRCUMSTANCES, WE REMIT THE ISSUE TO TH E FILE OF THE ASSESSING OFFICER TO VERIFY AND SEGREGATE THE FACTORY EXPENSE S AND OTHER EXPENSES AS THERE IS NO CLEAR DEMARCATION OF THE SAME AND DE CIDE THE ISSUE IN ACCORDANCE WITH LAW. 17. IN THE RESULT, CROSS-OBJECTIONS OF THE ASSESSE E ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 23.05.2013 SD/- (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER. DT/- 23 RD MAY, 2013 COPY FORWARDED TO: 1. M/S. SIGACHI LABORATORIES LTD., C/O. SHRI S.RAMA RAO, FLAT NO.102, SHIRYA'S ELEGANCE, NO.3-6-643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 2. DY. COMMISSIONER OF INCOME - TAX CIRCLE 3(2) , HYDERABAD 3. 4. 5. COMMISSIONER OF INCOME - TAX(APPEALS) I V HYDERABAD COMMISSIONER OF INCOME-TAX III, HYDERABAD THE DEPARTMENTAL REPRESENTATIVE, ITAT HYDERABAD B.V.S. SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER.