M/s. Torrent Pvt.Ltd., Ahmedabad V. The ACIT.,Circle-8, Ahmedabad

CO 96/AHD/2012

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3654 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 10 month(s) 26 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 13-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 06-09-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 18-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SU RENDRA KUMAR
• Assessee Lawyers: S N SOPARKAR SHRI P M MEHTA; SMT
• Keywords: Capital asset; Depreciation; Earning of tax free income; Proportionate interest; Retrospective amendment; Cost of acquisition; Bad and doubtful debts; Scheme of amalgamation; Assessment record; Revised return
• Section: 143(3); 234B; 14A; 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE, SHRI N. K. BILLAIYA , ACCOUNTANT MEMBER AND SHRI S. S. GODARA, JUDICIAL MEMBER ITA NO. 737 & 1671/AHD/2012 (ASSESSMENT YEARS: 2007-08 & 2009-10) WITH CROSS OBJECTION NOS. 96 & 156/A HD/2012 (ASSESSMENT YEARS: 2007-08 & 2009-10) THE A.C.I.T./ A.C.I.T. (OSD), CIRCLE-8, AHMEDABAD APPELLANT VS. M/S. TORRENT PRIVATE LIMITED, TORRENT HOUSE, OFF. ASHRAM ROAD, AHMEDABAD RESPONDENT/CR OSS OBJECTOR & ITA NOS. 1670 & 1663/AHD/2012, 983 & 1163/AHD/2014 (ASSESSMENT YEA RS: 2008-09 & 2003-04) A.C.I.T. (OSD)/ D.C.T.T.(OSD), CIRCLE-8, AHMEDABAD APPELLANT VS. M/S. TORRENT PRIVATE LIMITED, TORRENT HOUSE, OFF. ASHRAM ROAD, AHMEDABAD RESPONDENT/CROS S APPELLANT PAN: AAACT5459R ITA NOS. 737, 1671,1663 & 1670/AHD/12, 983 & 1153/ A/14 & CO NOS. 96 & 156/AHD 12 [M/S. TORRENT PVT. LTD. ] - 2 - / BY REVENUE : SHRI SURENDRA KUMAR, CIT. D. R. / BY ASSESSEE : SHRI S. N. SOPARKAR, SHRI P. M. MEHTA AND SMT. URVASHI SHODHAN, A.RS. /DATE OF HEARING : 05.04.2018 /DATE OF PRONOUNCEMENT : 13.04.2018 ORDER PER S. S. GODARA, JUDICIAL MEMBER THE INSTANT BATCH OF EIGHT CASES ARISE AGAINST THE CIT(A)-XIV, AHMEDABADS SEPARATE LOWER APPELLATE ORDERS DATED 2 4.01.2014 IN CASE NO. CIT(A)-XIV/DCIT(OSD)/CIR.-8/252/2012-13 IN ASSESSME NT YEAR 2003-04, DATED 31.01.2012 IN CASE NO. CIT(A) XIV/ACIT CIR. 8/287/0 9-10 IN ASSESSMENT YEAR 2007-08, DATED 14.05.2012 IN CASE NOS. CIT(A) XIV/A CIT CIR. 8/271/10-11 AND CIT(A) XIV/ACIT CIR. 8/189/2011-12 FOR ASSESSMENT YEARS 2008-09 AND 2009- 10; RESPECTIVELY. RELEVANT PROCEEDINGS IN ASSESSME NT YEAR 2003-04 ARE U/S. 143(3) R.W.S. 254 OF THE INCOME TAX ACT, 1961; IN SHORT T HE ACT WHEREAS ALL OTHER ASSESSMENT YEARS INVOLVE REGULAR ASSESSMENTS U/S.14 3(3) OF THE ACT. 2. LEARNED COUNSEL REPRESENTING ASSESSEE FILES BEFO RE US A COMPILATION CHART OF ALL THE RELEVANT ISSUES INVOLVED IN THE ENTIRE BATC H OF EIGHTS CASES. THE REVENUE IS FAIR ENOUGH IN NOT DISPUTING CORRECTNESS THEREOF. WE TAKE THE SAID COMPILATION CHART AS PART OF OUR RECORD. LEARNED REPRESENTATIV ES FURTHER REQUEST US TO TREAT ASSESSMENT YEAR 2007-08 INVOLVING REVENUES APPEAL ITA NO.737/AHD/2012 AND ASSESSEES CO NO. 96/AHD/2012 AS THE LEAD ASSESSMEN T YEAR. WE DO NOT SEE ANY UNREASONABLENESS IN THE INSTANT PLEA. THE SAME IS THEREFORE ACCEPTED. ITA NOS. 737, 1671,1663 & 1670/AHD/12, 983 & 1153/ A/14 & CO NOS. 96 & 156/AHD 12 [M/S. TORRENT PVT. LTD. ] - 3 - ASSESSMENT YEAR 2007-08 (REVENUES APPEAL ITA NO.737/AHD/2012 AND ASSESSEE S CO NO. 96/AHD /2012) 3. THE REVENUE APPEARS TO HAVE PLEADED ITS FIVE SUB STANTIVE GROUNDS THAT THE CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN REVE RSING ASSESSING OFFICERS ACTION MAKING SECTION 14A R.W. RULE 8D DISALLOWANCE AFTER HOLDING THAT THE SAID RULE DOES NOT APPLY WITH RETROSPECTIVE EFFECT IN THE IMP UGNED ASSESSMENT YEAR, IN CONCLUDING THAT CONSEQUENTIAL MAT ADJUSTMENT 115JB QUA THE AMOUNT IN QUESTION OF RS.1,49,66,635/- IS NOT SUSTAINABLE, RESTRICTING THE SAID DISALLOWANCE TO THE EXTENT OF ADMINISTRATIVE EXPENDITURE OF RS.25LACS O NLY AND ALSO IN SETTING ASIDE ASSESSEES ADDITIONAL GROUND SEEKING TO REDUCE ITS MAT INCOME BY RS.12,60,88,128/- IN THE NATURE OF PROVISION MADE F OR DIMINUTION IN VALUE OF INVESTMENTS/DOUBTFUL DEBTS WITHOUT THERE BEING ANY CLAIM IN ITS RETURN; RESPECTIVELY. 4. THE ASSESSEES CROSS OBJECTION CO NO.96/AHD/2012 RAISES THREE SUBSTANTIVE GROUNDS. ITS FIRST GRIEVANCE IS THAT THE CIT(A) HA S ERRED IN LAW AS WELL AS ON FACTS IN MAKING ADMINISTRATIVE EXPENDITURE DISALLOWANCE O F RS.25LACS IN LOWER APPELLATE PROCEEDINGS. IT THEN SEEKS TO CLAIM INTEREST EXPEN DITURE OF RS.8,52,52,561/- AS REJECTED IN THE LOWER APPELLATE PROCEEDINGS. ITS L AST SUBSTANTIVE GROUND IS WITHOUT PREJUDICE TO THE ABOVE PLEA, THE SAID EXPENDITURE O UGHT TO HAVE BEEN ACCEPTED AS CAPITALIZATION TOWARDS COST OF SHARES FOR THE PURPO SE OF COMPUTING ITS INCOME FROM CAPITAL GAINS. 5. THE ABOVE NARRATED PLEADINGS MAKE IT SUFFICIENTL Y CLEAR THAT THE MAJOR ISSUE APART FROM REVENUES FIFTH SUBSTANTIVE GROUND IS TH AT CORRECTNESS OF SECTION 14A R.W. RULE 8D DISALLOWANCE ITS QUANTIFICATIONS AS WE LL AS THE CONSEQUENTIAL MAT ADJUSTMENT U/S.115JB OF THE ACT. WE THUS TAKE UP T HIS COMMON ISSUE FIRST FOR THE SAKE OF COMPLETENESS AND BREVITY. ITA NOS. 737, 1671,1663 & 1670/AHD/12, 983 & 1153/ A/14 & CO NOS. 96 & 156/AHD 12 [M/S. TORRENT PVT. LTD. ] - 4 - 6. THIS ASSESSEE IS A COMPANY MAKING INVESTMENTS IN SHARES, DEBENTURES AND SECURITY. IT DERIVED EXEMPT DIVIDEND INCOME OF RS. 67,45,61,270/- IN THE IMPUGNED ASSESSMENT YEAR WITHOUT APPORTIONING ANY C ORRESPONDING EXPENDITURE THERETO. THE ASSESSING OFFICER FRAMED HIS REGULAR ASSESSMENT ON 29.12.2009 DISALLOWING THE AMOUNT IN QUESTION OF RS.1,49,66,63 5/- AS PER RULE 8D OF THE INCOME TAX RULES. THIS FOLLOWED CONSEQUENTIAL MAT ADJUSTMENT AS WELL IN ASSESSEES BOOKS PROFITS COMPUTED U/S.115JB OF THE ACT. 7. THE CIT(A) RESTRICTS THE ABOVE DISALLOWANCE TO R S.25LACS ONLY IN THE NATURE OF ADMINISTRATIVE EXPENDITURE AND FURTHER DELETES T HE ABOVE BOOK PROFITS ADJUSTMENT IN QUESTION AS FOLLOWS: 3.3 DECISION: I HAVE CAREFULLY PERUSED THE ASSESSMENT ORDER AND T HE SUBMISSIONS GIVEN BY THE APPELLANT. THE A. O. HAS MADE THE DISALLOWAN CE U/S. 14A BY APPLYING THE PROVISIONS OF RULE 8D. THE APPELLANT HAS SUBMITTED THAT PROVISIONS OF RULE 8D ARE NOT APPLICABLE FOR THE PRESENT A. Y. AND BY MEN TIONING THE DECISION OF BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE VS. DCIT I T HAS BEEN SUBMITTED THAT THE PROVISIONS ARE APPLICABLE W. E. F. 01/04/1989. THE SUBMISSION OF THE APPELLANT THAT THE PROVISIONS OF RULE 8D ARE NOT APPLICABLE PRIOR TO 01/04/1989 IS ACCEPTABLE. IT IS NOW JUDICIALLY SETTLED THAT THE PROVISIONS ARE EFFECTIVE FROM 01 /04/1989 I.E. FOR A. Y. 2008-09 ONWARDS. THEREFORE, THE DISALLOWANCE MADE BY THE A. O. BY AP PLYING THE PROVISIONS OF RULE 8D WAS NOT JUSTIFIED AND IT IS ACCORDINGLY SET ASID E. HOWEVER, IT IS SEEN THAT THE APPELLANT COMPANY HAS MADE TOTAL INVESTMENT OF RS.652.79 CRORES DURING THE YEAR AND HAS INCURRE D ADMINISTRATIVE EXPENSES OF RS.1,49,66,635/- ON VARIOUS ACTIVITIES OF THE COMPA NY. THE INVESTMENT HAS YIELDED DIVIDEND INCOME OF RS.67,45,61,270/- AND THE APPELL ANT HAS NOT APPORTIONED ANY CORRESPONDING EXPENDITURE RELATED TO EARNING OF THI S INCOME. ACCORDINGLY, A SHOW CAUSE WAS ISSUED BY THIS OFFICE ON 05/07/2011 ASKIN G THE APPELLANT TO EXPLAIN WHY DISALLOWANCE ON ACCOUNT OF ADMINISTRATIVE EXPENSES BE NOT MADE. THE APPELLANT VIDE HIS LETTER DATED 27/01 /2012 HAS SUBMITTED A W RITTEN REPLY. THE APPELLANT HAS SUBMITTED THAT APART FROM THE INCOME OF DIVIDEND, THE APPELLANT WAS ALSO HAVING INCOME FROM INTEREST, CAPITAL GAIN ON SALE OF SHARE S, WHICH HAVE BEEN OFFERED FOR TAX. THE ENTIRE ADMINISTRATIVE EXPENSES ARE NOT REL ATED TO EARNING OF DIVIDEND ONLY. IT WAS FURTHER SUBMITTED THAT THE TOTAL INVES TMENT IN THE EARLIER YEAR WAS RS.665.83 CRORES WHICH WAS AT THE END OF YEAR RS.65 2.79 CRORES. THEREFORE, NO NEW INVESTMENT WAS MADE. THE APPELLANT HAS ALSO SUB MITTED THAT IN THE EARLIER YEARS, THE A. O. HAD MADE DISALLOWANCE OF RS.5 LACS FOR A. Y. 2005-06 WHICH WAS REDUCED BY CIT(A) TO RS.50,000/-. IN A. Y. 2006-07 , DISALLOWGNCE WAS OF ONLY RS.6.79 LACS. THEREFORE, THE DISALLOWANCE SHOULD NO T EXCEED THE DISALLOWANCE MADE IN A. Y. 2006-07. ITA NOS. 737, 1671,1663 & 1670/AHD/12, 983 & 1153/ A/14 & CO NOS. 96 & 156/AHD 12 [M/S. TORRENT PVT. LTD. ] - 5 - AFTER CONSIDERING THE SUBMISSIONS IN RESPONSE TO TH E SHOW CAUSE ISSUED BY THIS OFFICE, I AM OF THE CONSIDERED OPINION THAT IT CANNOT BE SAID THAT THE APPELLANT HAS NOT INCURRED ANY EXPENDITURE IN E ARNING THE DIVIDEND INCOME WHICH IS EXEMPT FROM TAX. THE MANAGEMENT OF INVESTM ENT AND KEEPING A TRACK OF THE RETURN IN THE INVESTMENT, THE DECISION FOR MAKI NG THE INVESTMENT AND TO SELL THE INVESTMENT REQUIRES CONSIDERABLE MANAGERIAL AND STA FF LEVEL INTERVENTION AND, THEREFORE, WILL RESULT IN SUBSTANTIAL EXPENDITURE T HEREIN. IT IS NOTED FROM THE AUDITED ACCOUNTS THAT THE APPELLANT HAS EARNED DIVI DEND OF RS. 19,26,81,869/- IN THE PRECEDING YEAR, WHEREAS THE DIVIDEND EARNED IN THIS YEAR IS RS.67,45,61,270/-, WHICH SHOWS THAT THERE IS A SUBSTANTIAL INCREASE OF MORE THAN 3 TIMES IN EARNING OF THE DIVIDEND. THE CLAIM OF THE APPELLANT THAT IN THE EARLIER YEAR A DISALLOWANCE OF RS.6.79 LACS WAS MADE AND THE SAME SHOULD BE CON SIDERED FOR THIS YEAR ALSO IS NOT ACCEPTABLE AS THERE IS A SUBSTANTIAL INCREASE T O THE EARNING OF DIVIDEND AND THE INVESTMENT HAVE ALSO BEEN RESHUFFLED SUBSTANTIALLY AS THE BALANCE SHEET SHOW THAT THERE IS A VAST DIFFERENCE BETWEEN THE IN VESTMENT OF EARLIER YEAR AND IN THE PRESENT YEAR EVEN THOUGH THE TOTAL VALUE OF INV ESTMENT MORE OR LESS REMAINS EQUAL. THEREFORE, THE FACTS OF THE EARLIER YEAR AND THE PRESENT YEAR ARE DIFFERENT AND THE YARDSTICK APPLIED BY THE A. O. IN THE EARLI ER YEARS CANNOT BE APPLIED TO THE FACTS OF THE PRESENT YEAR. IT IS TO BE NOTED TH AT THE APPELLANT IS ALSO SHOWING INCOME BY WAY OF INTEREST, CAPITAL GAIN ON SALE OF SHARES WHICH IS OFFERED FOR TAX ALONG WITH THE INCOME FROM DIVIDEND. IT IS ALSO A F ACT THAT EARNING OF DIVIDEND DOES NOT REQUIRE THAT MUCH ADMINISTRATIVE ATTENTION AS IS REQUIRED FOR SALE OF SHARES AND EARNING OF INTEREST. THE DIVIDEND INCOME HAS INCREASED TO ABOUT 3.5 TIMES AS COMPARED TO EARLIER YEAR. CONSIDERING THES E FACTS, I CONSIDER IT REASONABLE TO DISALLOW A SUM OF RS. 25 LACS ON ACCO UNT OF ADMINISTRATIVE EXPENSES U/S. 14A OF THE ACT. REGARDING THE DISALLOWANCE OF EXPENDITURE WORKED OU T FOR SECTION 14A WHILE WORKING OUT THE BOOK PROFIT U/S. 115JB, THE A PPELLANT HAS SUBMITTED THAT IN THE COMPUTATION OF 115JB, NO ADJUSTMENT OF NOTIONAL ALLOWANCE AS PER SECTION 14A WAS PERMISSIBLE. THE APPELLANT HAS ALSO SOUGHT TO RELY ON THE JUDGMENT OF IT AT, DELHI IN THE CASE OF GOETZ INDIA [32 SOT 101 I' M WHICH IT HAS BEEN HELD THAT UNDER CLAUSE F OF EXPLANATION TO SECTION 115JA, THE PROVISIONS OF SECTION 2 AND SUB-SECTION 3 OF SECTION 14A CANNOT BE IMPORTED. FU RTHER, THE APPELLANT HAS ALSO RELIED ON THE DECISION OF IT AT, AHMEDABAD IN THE C ASE OF GUJARAT STATE ENERGY GENERATION LIMITED IN THE ORDER DATED 15/04/2011 IN IT A NO. 1777 AND 2028/AHD/2009. IT HAS BEEN HELD BY THE HON'BLE BENC H THAT AFTER CONSIDERING THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF AP OLLO TYRES, ONLY SUCH ITEMS WHICH ARE SPECIFICALLY MENTIONED IN EXPLANATION TO SECTION 115JB NEED TO BE EXCLUDED OR INCLUDED AND NOTHING MORE CAN BE BROUGH T IN. AFTER THE CAREFUL ANALYSIS OF THE ISSUE INVOLVED, 1 AM OF THE OPINION THAT THE BOOK PROFIT HAS TO BE COMPUTED AS PER THE AUDIT ED BOOKS OF ACCOUNTS MAINTAINED BY THE APPELLANT AND THE AUDITED RESULTS WHICH HAVE BEEN APPROVED IN THE A.G.M. BY THE SHAREHOLDERS. ONLY THOSE ADJUST MENTS CAN BE MADE TO THE APPROVED BOOK PROFIT WHICH ARE SPECIFICALLY MENTION ED IN THE INCOME TAX ACT. ANY NOTIONAL ADJUSTMENT IN THE BOOK PROFIT IS NOT P ERMISSIBLE. THE FACTS OF THE CASE ARE ALSO IDENTICAL TO THE JUDGMENT OF ITAT, AH MEDABAD IN THE CASE OF GUJARAT STATE ENERGY GENERATION LTD.(SUPRA) AND THE REFORE RESPECTFULLY FOLLOWING THE JUDGMENT OF ITAT, AHMEDABAD, THE DISALLOWANCE M ADE BY THE A. O. AS PER CLAUSE F TO THE EXPLANATION OF SECTION 115JB IS DIR ECTED TO BE DELETED. THE GROUND OF APPEAL IS ALLOWED. ITA NOS. 737, 1671,1663 & 1670/AHD/12, 983 & 1153/ A/14 & CO NOS. 96 & 156/AHD 12 [M/S. TORRENT PVT. LTD. ] - 6 - 8. BOTH THE PARTIES REITERATE THEIR RESPECTIVE PLEA DINGS DURING THE COURSE OF HEARING BEFORE US. THE REVENUES FIRST ARGUMENT AS PER ITS CORRESPONDING GROUND IS THAT THE ASSESSING OFFICER HAD RIGHTLY INVOKED R ULE 8D IN THE IMPUGNED ASSESSMENT YEAR AS REVERSED IN THE LOWER APPELLATE PROCEEDINGS. IT FAILS TO DISPUTE THAT THE HONBLE APEX COURTS RECENT JUDGMENT IN (2 018) 401 ITR 445 (SC) CIT VS. M/S. ESSAR TELEHOLDINGS LTD. AS WELL AS HONBLE JUR ISDICTIONAL HIGH COURTS DECISION IN CIT VS. TORRENT POWER LTD. (2014) 363 I TR 474 (GUJ) SETTLE THE LAW THAT RULE 8D OF THE INCOME TAX RULES APPLIES W.E.F. ASSESSMENT YEAR 2008-09 ONLY. WE REITERATE THAT WE ARE IN ASSESSMENT YEAR 2007-08. WE THUS FIND NO MERIT IN REVENUES FIRST SUBSTANTIVE GROUND. THE SAME IS ACCORDINGLY REJECTED. 9. LEARNED CIT.D.RS. NEXT ARGUMENT IS THAT THE CIT (A) OUGHT TO HAVE UPHELD THE ENTIRE ADDITION OF RS.1.99 CRORES THAN THE ADMI NISTRATIVE FIGURE OF RS.25LACS ONLY. WITHOUT PREJUDICE TO THE FACT THAT RULE 8D DO ES NOT APPLY IN THE IMPUGNED ASSESSMENT YEAR. HE QUOTES HONBLE APEX COURTS JU DGMENT IN (2018) 91 TAXMANN.COM 154 (SC) MAXOPP INVESTMENT LTD VS. CIT( A) AS WELL AS GODREJ & BOYCE MANUFACTURING CO. LTD. V. DCIT [2017] 394 ITR 449 (SC) THAT AN ASSESSEES EXPENDITURE IN CASE OF EXEMPT INCOME IS TO BE APPORTIONED FOR THE PURPOSE OF COMPUTING SECTION 14A DISALLOWANCE. LEA RNED DEPARTMENTAL REPRESENTATIVE LASTLY SUBMITS THAT THE LOWER APPELL ATE AUTHORITY OUGHT NOT TO HAVE DELETED CONSEQUENTIAL MAT ADJUSTMENT AS WELL AS PER HONBLE JURISDICTIONAL HIGH COURTS JUDGMENT IN CIT VS. GSFC LTD. (2013) 358 IT R 324 (GUJ) ALLEGEDLY UPHOLDING A SIMILAR MAT ADJUSTMENT. 10. THE ASSESSEE ON ITS TURN TAKES US TO PAPER BOOK PAGE 101 REVEALING INTEREST FREE FUNDS OF RS.6,50,43,84,881/- AS AGAINST ITS TA X FREE INVESTMENT OF RS.6,52,79,37,522/-. IT THEN POINTS US THAT AS PER PAGE 77 READ WITH 102 THAT IT HAS NOT CLAIMED ANY INTEREST EXPENDITURE IN THE IMPUGNE D ASSESSMENT YEAR WHICH COULD TRIGGER THE CORRESPONDING DISALLOWANCE IN QUESTION. THE TAXPAYERS CASE THEREFORE IS THAT THE SAID INTEREST EXPENDITURE ALREADY STAND S ADDED ON SUO MOTTU BASIS. WE INVITED ASSESSEES ATTENTION TO ITS SECOND AND THIR D SUBSTANTIVE GROUNDS (SUPRA) ITA NOS. 737, 1671,1663 & 1670/AHD/12, 983 & 1153/ A/14 & CO NOS. 96 & 156/AHD 12 [M/S. TORRENT PVT. LTD. ] - 7 - NOW CLAIMING THE SAID INTEREST FIGURES OF RS.8.52CR ORES. MR. SOPARKAR STATES THAT THE IMPUGNED ISSUE OF SECTION 14A DISALLOWANCE APAR T FROM ADMINISTRATIVE EXPENDITURE AND MAT ADJUSTMENT NEEDS TO BE REMITTED BACK FOR THE REASON THAT IF THE INTEREST AMOUNT IN QUESTION IS ACCEPTED IN CONS EQUENTIAL PROCEEDINGS, IT WOULD LEAD TO RE-COMPUTATION OF SECTION 14A DISALLOWANCE AMOUNT AS WELL. THE REVENUES CASE BEFORE US QUA THIS ISSUE IS THAT THE CIT(A) HAS RIGHTLY REJECTED THE ABOVE INTEREST CLAIM SINCE NOT RAISED IN ORIGINAL A S WELL AS REVISED RETURN. WE FIND THE REVENUES INSTANT TECHNICAL ARGUMENT TO BE NO M ORE SUSTAINABLE AS PER HONBLE JURISDICTIONAL HIGH COURTS JUDGMENT IN CIT V. MITE SH IMPEX 270 CTR 66 (GUJ.) ACCEPTING THE CONCERNED ASSESSEES CLAIM RAISED IN PRINCIPLE WITHOUT THE ABOVE TWO TYPES OF RETURN. WE TAKE INTO ACCOUNT ALL THESE FA CTS TO RESTORE ASSESSEES LATTER TWO GROUNDS BACK TO THE ASSESSING OFFICER FOR APPROPRIA TE ADJUDICATION AS PER LAW. SUFFICE TO SAY, THAT ASSESSEE HAS ALREADY STATED VE RY CLEARLY THE REVENUES CORRESPONDING SUBSTANTIVE GROUND QUA SECTION 14A AL SO REQUIRES FRESH COMPUTATION IN PRECEDING TERMS (SUPRA). WE THUS AC CEPT REVENUES THIRD AND ASSESSEES LATTER TWO GROUNDS FOR STATISTICAL PURPO SES. IT IS MADE CLEAR THAT THE ASSESSING OFFICER MAY EXAMINE ALL THE RELEVANT FACT S AS WELL AS LEGAL DEVELOPMENTS RELEVANT TO THIS ISSUE IN QUESTION IN CONSEQUENTIAL PROCEEDINGS. 11. WE NOW ADVERT TO ADMINISTRATIVE EXPENDITURE DIS ALLOWANCE ISSUE OF RS.25LACS. HONBLE APEX COURTS DECISION HEREINABO VE MAKE IT CLEAR THAT THE RELEVANT EXPENDITURE HAS TO BE APPORTIONED IN CASE OF EXEMPT AND TAXABLE INCOME. IT HAS COME ON RECORD THAT THIS ADMINISTRATIVE EXPE NDITURE DISALLOWANCE ISSUE HAS ARISEN IN PRECEDING ASSESSMENT YEAR AS WELL. LEARN ED SENIOR COUNSEL REFERS TO THE PRECEDING YEARS DEVELOPMENTS QUA THE VERY ISSUE TO FAIRLY OFFER THE IMPUGNED DISALLOWANCE @5% OF THE SUM IN QUESTION AMOUNTING T O RS.1,49,66,635/-; COMING TO RS.7.5LACS. HE HOWEVER FAILS TO REBUT THE CIT(A )S DISTINCTION DRAWN IN HIS ABOVE EXTRACTED OPERATIVE FINDINGS. WE TAKE INTO A CCOUNT ALL THESE FACTS AND CIRCUMSTANCES TO PARTLY ACCEPT ASSESSEES ARGUMENTS TO RESTRICT THE IMPUGNED DISALLOWANCE TO A LUMP SUM AMOUNT OF RS.8LACS ONLY. THE ASSESSEES SUBSTANTIVE ITA NOS. 737, 1671,1663 & 1670/AHD/12, 983 & 1153/ A/14 & CO NOS. 96 & 156/AHD 12 [M/S. TORRENT PVT. LTD. ] - 8 - GROUND IS THEREFORE PARTLY ACCEPTED WHEREAS REVENUE S CORRESPONDING PLEA SEEKING TO REVIVE THE ENTIRE DISALLOWANCE FAILS. 12. THIS LEAVES US WITH YET ANOTHER IMPORTANT ASPEC T OF REVENUES PLEADINGS SEEKING TO RESTORE CONSEQUENTIAL MAT ADJUSTMENT U/S .115JB OF THE ACT QUA THE ABOVESTATED SECTION 14A DISALLOWANCE. THIS TRIBUNA LS RECENT SPECIAL BENCH DECISION IN ACIT VS. VIREET INVESTMENT PVT. LTD. CA SE (2017) 165 ITD 27 (DELHI)(SB) AS WELL AS HONBLE BOMBAY HIGH COURTS JUDGMENT IN ITA NO.337/2013 CIT VS. BENGAL FINANCE & INVESTMENTS PV T. LTD. DECIDED ON 10.02.2015 HAVE ALREADY ADJUDICATED THE VERY ISSUE IN ASSESSEES FAVOUR THAT SECTION 14A DISALLOWANCE AMOUNT IS NOT TO BE ADDED WHILST FINALIZING SECTION 115JB COMPUTATION BOOK PROFITS. LEARNED CIT.D.R. P LACES STRONG RELIANCE ON GSFCS CASE (SUPRA). WE FIND THAT THE TRIBUNALS ORDER UNDER CHALLENGE THEREIN AT REVENUES BEHEST SOUGHT TO REVIVE THE ENTIRE SECTIO N 14A DISALLOWANCE TO RS.1,14,43,640/- AS RESTRICTED TO RS.5LACS ONLY AS WELL AS FOR THE PURPOSE OF BOOK PROFITS COMPUTATION. THEIR LORDSHIPS ANOTHER JUDG MENT IN TAX APPEAL NO. 1249/2004 DATED 20.07.2016 IN ALEMBIC LTDS. CASE I N ASSESSEES FAVOUR. WE CONSIDER ALL THESE FACTUAL AND LEGAL DEVELOPMENTS T O CONCLUDE THAT THE CIT(A) HAS RIGHTLY HELD THAT THE IMPUGNED DISALLOWANCE MADE U/ S.14A IS NOT TO BE ADDED IN MAT COMPUTATION U/S.115JB OF THE ACT. THE REVENUE S CORRESPONDING SUBSTANTIVE GROUND IS THEREFORE DECLINED. 13. THIS LEAVES US WITH REVENUES FIFTH SUBSTANTIVE GROUND SEEKING TO REVIVE 115JB BOOKS PROFITS ADJUSTMENT OF RS.12,60,88,128/- RELATING TO PROVISION MADE FOR DIMINUTION IN VALUE OF INVESTMENT/DOUBTFUL DEBT S; AS DELETED IN COURSE OF THE LOWER APPELLATE PROCEEDINGS AS FOLLOWS: 5. THE THIRD GROUND OF APPEAL RELATES TO NOT REDUC ING INCOME COMPUTED U/S. 115JB BY RS.L2,60,88,128/- BEING PROVISIONS FOR DIM INUTION IN VALUE OF INVESTMENTS AND PROVISIONS FOR DOUBTFUL DEBTS NO LO NGER REQUIRED OFFERED AS INCOME IN PROFIT AND LOSS ACCOUNT AS PER RETROSPECT IVE AMENDMENT BROUGHT BY FINANCE ACT, 2009 W.R.E.F. 01/04/2001. ITA NOS. 737, 1671,1663 & 1670/AHD/12, 983 & 1153/ A/14 & CO NOS. 96 & 156/AHD 12 [M/S. TORRENT PVT. LTD. ] - 9 - 5.1 THE APPELLANT HAS SUBMITTED THAT IT HAD CREDITE D RS. 12,60,88,128/- TO THE PROFIT & LOSS ACCOUNT ON ACCOUNT OF PROVISIONS FOR DIMINUTION IN VALUE OF INVESTMENT AND PROVISION FOR DOUBTFUL DEBTS NO LONG ER REQUIRED. THE FINANCE ACT 2009 HAS PROVIDED THAT SUCH AMOUNTS IF DEBITED TO T HE P & L ACCOUNT WOULD BE ADDED BACK PROFIT WITH EFFECT FROM 1-4-2001 IN CALC ULATING BOOK PROFIT. THEREFORE, THE A.O. OUGHT NOT TO HAVE CONSIDERED THE AMOUNTS C REDITED TO THE PROFIT & LOSS ACCOUNT ON ACCOUNT OF REVERSAL IN THE BOOKS AND CRE DITED AS PART OF PROFIT IN THE YEAR IN WHICH THE AMOUNTS ARE REVERSED AND CREDITED TO PROFIT & LOSS ACCOUNT. THE A.O. MAY, THEREFORE, BE DIRECTED TO REDUCE THE BOOK PROFIT BY THIS AMOUNT. 5.2 DECISION : I HAVE CAREFULLY PERUSED THE SUBMISSION MADE BY THE APPELLANT. IT IS OBSERVED FROM THE ASSESSMENT RECORDS THAT THE APPEL LANT HAS NOT MADE ANY SUCH CLAIM IN THE RETURN OF INCOME. HOWEVER, THE AMENDME NT WHICH HAS BEEN REFERRED BY THE APPELLANT HAS COME INTO EFFECT AFTER THE RET URN WAS FILED BY THE APPELLANT AND, THEREFORE, THE APPELLANT MIGHT HAVE BEEN PREVE NTED BY A GENUINE REASON FOR NOT MAKING SUCH CLAIM IN THE RETURN. THE A. O. IS, THEREFORE, DIRECTED TO EXAMINE THE MATTER IN ACCORDANCE WITH THE LAW AND RECORDS. THE GROUND OF APPEAL IS, THEREFORE, PARTLY ALLOWED . 14. IT TRANSPIRES THAT THE CIT(A) HAS ONLY DIRECTED THE ASSESSING OFFICER TO EXAMINE THE RELEVANT FACTS. THE REVENUES CASE BEF ORE US IS THAT THE ASSESSEE HAS NOWHERE RAISED SUCH A CLAIM BY WAY OF ORIGINAL OR R EVISED RETURN. THE INSTANT PLEA IS NO MORE ACCEPTABLE AS PER HONBLE JURISDICTIONAL HIGH COURTS DECISION IN CIT V. MITESH IMPEXS CASE (SUPRA). IT IS FURTHER EVIDENT THE HONBLE JURISDICTIONAL HIGH COURTS RECENT JUDGMENT HAS DECIDED THE VERY LEGAL ISSUE IN VODAFONE ESSAR GUJARAT LTD.S CASE (2017) 397 ITR 55 (GUJ) AS FOLL OWS: 23. BY WAY OF CULMINATION OF ABOVE JUDICIAL PRONOU NCEMENTS AND STATUTORY PROVISIONS, THE SITUATION THAT ARISES IS THAT PRIOR TO THE INTRODUCTION OF CLAUSE(I) TO THE EXPLANATION TO SECTION 115JB, AS HELD BY THE SU PREME COURT IN CASE OF HCL COMNET SYSTEMS AND SERVICES LTD. (SUPRA), THE THEN EXISTING CLAUSE (C) DID NOT COVER A CASE WHERE THE ASSESSEE MADE A PROVISION FO R BAD OR DOUBTFUL DEBT. WITH INSERTION OF CLAUSE (I) TO THE EXPLANATION WITH RET ROSPECTIVE EFFECT, ANY AMOUNT OR AMOUNTS SET ASIDE FOR PROVISION FOR DIMINUTION IN T HE VALUE OF THE ASSET MADE BY THE ASSESSEE, WOULD BE ADDED BACK FOR COMPUTATION O F BOOK PROFIT UNDER SECTION 115JB OF THE ACT. HOWEVER, IF THIS WAS NOT A MERE P ROVISION MADE BY THE ASSESSEE BY MERELY DEBITING THE PROFIT AND LOSS ACCOUNT AND CREDITING THE PROVISION FOR BAD AND DOUBTFUL DEBT, BUT BY SIMULTANEOUSLY OBLITE RATING SUCH PROVISION FROM ITS ACCOUNTS BY REDUCING THE CORRESPONDING AMOUNT FROM THE LOANS AND ADVANCES ON THE ASSET SIDE OF THE BALANCE SHEET AND CONSEQUENTL Y, AT SIDE OF THE BALANCE SHEET AND CONSEQUENTLY, AT THE END OF THE YEAR SHOWING TH E LOANS AND ADVANCES ON THE ASSET ASIDE OF THE BALANCE SHEET AS NET OF THE PROV ISION FOR BAD DEBT, IT WOULD AMOUNT TO A WRITE OFF AND SUCH ACTUAL WRITE OFF WOU LD NOT BE HIT BY CLAUSE (I) OF THE EXPLANATION TO SECTION 115JB. THE JUDGMENT IN C ASE OF DEEPAK NITRITE LIMITED ITA NOS. 737, 1671,1663 & 1670/AHD/12, 983 & 1153/ A/14 & CO NOS. 96 & 156/AHD 12 [M/S. TORRENT PVT. LTD. ] - 10 - (SUPRA) FELL IN THE FORMER CATEGORY WHEREAS FROM TH E BRIEF DISCUSSION AVAILABLE IN THE JUDGMENT IT APPEARS THAT CASE OF INDIAN PETROCHEMICALS CORPORATION LTD. (SUPRA), FELL IN THE LATER CATEGORY. 15. LEARNED SENIOR COUNSEL INVITES OUR ATTENTION TO THE FACT THAT THE ASSESSEE HAS ALREADY COMPLIED WITH THE ABOVE PROPOUNDED NET TING CONDITION IN ITS BALANCE SHEET. WE NOTICE THAT NEITHER OF THE LOWER AUTHORI TY HAS APPLIED ITS MIND TO THE SAID FACTUAL ASPECT SINCE THE ASSESSEE HAS RAISED I TS CORRESPONDING CLAIM IN LOWER APPELLATE PROCEEDINGS ONLY WHEREIN THE CIT(A) HAS D IRECTED THE ASSESSING OFFICER TO CONSIDER ALL THE RELEVANT FACTS. WE THUS SEE NO REASON TO ACCEPT ASSESSEES ABOVE FACTUAL ASSERTIONS. WE MAKE IT CLEAR THAT TH E ASSESSING OFFICER SHALL EXAMINE THE ABOVE NARRATED LEGAL AS WELL AS FACTUAL MATRIX OF THE INSTANT ISSUE IN CONSEQUENTIAL PROCEEDINGS. THE REVENUES INSTANT A PPEAL ITA NO.737/AHD/2012 IS PARTLY ACCEPTED FOR STATISTICAL PURPOSES IN ABOV E TERMS QUA SECTION 14A ISSUE ONLY (APART FROM ADMINISTRATIVE EXPENDITURE, RULE 8 D APPLICATION AND SECTION 115JB) AS CLARIFIED IN PRECEDING PARAGRAPHS. THE A SSESSEES CO NO.96/AHD/2012 IS PARTLY ACCEPTED. ASSESSMENT YEAR 2008-09 (ASSESSEES & REVENUES CROSS APPEALS ITA NO.1663 & 1670/AHD/2012) 16. WE NOTICE FIRST OF ALL THAT THE ASSESSEES APPE AL ITA NO. 1663/AHD/2012 RAISES TWO SUBSTANTIVE GROUNDS OF APPEAL CHALLENGIN G THE LOWER APPELLATE AUTHORITYS ACTION IN AFFIRMING ASSESSING OFFICERS ACTION INTER ALIA MAKING SECTION 14A R.W. 8D DISALLOWANCE AND ALSO IN SETTIN G ASIDE THE ISSUE REGARDING ITS CLAIM FOR REDUCTION OF RS.4,03,25,000/- IN THE NATU RE OF PROVISION WRITTEN BACK IN RESPECT OF DIMINUTION IN THE VALUE OF INVESTIGATION FOR COMPUTING BOOK PROFITS U/S.115JB OF THE ACT. THE REVENUES AS MANY GROUND S IN ITS CROSS APPEAL ITA NO. 1670/AHD/2012 SEEK TO REVIVE SECTION 115JB BOOK PRO FITS ADJUSTMENT PERTAINING TO THE ABOVE SECTION 14A DISALLOWANCE AND ALSO CHAL LENGE THE CIT(A)S ACTION IN SETTING ASIDE THE ABOVE LATTER ISSUE OF DIMINUTION IN VALUE OF INVESTMENT (AS RAISED IN ASSESSEES APPEAL) BACK TO THE ASSESSING OFFICER FOR APPROPRIATE ADJUDICATION. ITA NOS. 737, 1671,1663 & 1670/AHD/12, 983 & 1153/ A/14 & CO NOS. 96 & 156/AHD 12 [M/S. TORRENT PVT. LTD. ] - 11 - 17. WE ADVERT TO FORMER COMMON ISSUE OF SECTION 14A DISALLOWANCE. THERE IS NO DISPUTE THAT THE ASSESSEE HAS DERIVED EXEMPT INC OME OF RS.4,72,21,530/- ALONGWITH TAXABLE INCOME OF RS.7,37,28,462/- IN THE IMPUGNED ASSESSMENT YEAR. THE ASSESSING OFFICER INVOKED SECTION 14A R.W. RULE 8D TO COMPUTE DIRECT EXPENDITURE OF RS.1,71,83,354/- AND ADMINISTRATIVE EXPENDITURE OF RS.3,24,34,056/- AGGREGATING TO RS.4,96,17,410/- WH ICH WAS FINALLY ARRIVED AT RS.2,36,09,877/-. HE MISTAKENLY TOOK THE SAME AS R S.2,12,78,474/- IN ASSESSMENT ORDER. LEARNED COUNSEL TAKES US TO ASSESSEES BALA NCE SHEET AT PAGE 58 INDICATING ITS INTEREST FREE FUNDS OF RS.6,70,81,62,989/- AS A GAINST TAX FREE INVESTMENTS OF RS.6,44,56,85,001/-. HE SEEKS TO APPLY NETTING F ORMULA AS PER HONBLE JURISDICTIONAL HIGH COURTS DECISION IN (2017) 85 T AXMANN.COM 72 (GUJ) PR.CIT VS. NIRMA CREDIT & CAPITAL (P.) LTD. WE FIND THE SAID JUDICIAL PRECEDENT TO BE NOT RELEVANT TO THE INSTANT ISSUE AS THEIR LORDSHIPS AD JUDICATED THE PROPORTIONATE INTEREST EXPENDITURE DISALLOWANCE IN RULE 8D(2)(II) CLAUSE W HEREAS INSTANT LIS INVOLVES DIRECT AND ADMINISTRATIVE EXPENDITURE IN FIRST AND THIRD CLAUSES OF THE RULE. WE REPEAT THAT THIS ASSESSEE IS ITSELF AN INVESTMENT C OMPANY HAVING DECLARED BOTH EXEMPT AS WELL AS TAXABLE INCOME. THE ASSESSING OF FICER AND CIT(A) HAVE BOTH TAKEN ENTIRE ADMINISTRATIVE EXPENDITURE AND REMUNER ATION BENEFITS FOR THE PURPOSE OF COMPUTING IMPUGNED DISALLOWANCE ON THE PREMISE T HAT IT DOES NOT NEED TO SPEND THE SAME ON ANY OTHER HEAD. 18. LEARNED SENIOR COUNSEL SEEKS TO RESTRICT THE IM PUGNED DISALLOWANCE ON LUMP SUM BASIS AS PER PRECEDING ASSESSMENT YEARS A DJUDICATION AS REFERRED IN EARLIER PART OF OUR INSTANT ORDER. WE FIND NO MERI T SINCE THE IMPUGNED DISALLOWANCE FROM ASSESSMENT YEAR 2008-09 HAS TO BE COMPUTED AS PER STATUTORY FORMULA. HONBLE APEX COURTS DECISIONS (SUPRA) MA KE IT CLEAR THAT AN ASSESSEES EXPENDITURE HAS TO BE APPORTIONED BETWEEN EXEMPT AN D TAXABLE INCOME. THERE IS NO OTHER ARGUMENT OR MATERIAL REFERRED DURING THE C OURSE OF HEARING WHICH COULD REBUT THE RELEVANT NEXUS ESTABLISHED BETWEEN ASSESS EES EXEMPT INCOME AND THE ALLEGED DIRECT EXPENDITURE. THE SAID COMPUTATION Q UA THE SUM IN QUESTION OF RS.1.71 CRORES STANDS CONFIRMED ACCORDINGLY. WE RE ITERATE THAT THERE IS NO ITA NOS. 737, 1671,1663 & 1670/AHD/12, 983 & 1153/ A/14 & CO NOS. 96 & 156/AHD 12 [M/S. TORRENT PVT. LTD. ] - 12 - PROPORTIONATE EXPENDITURE DISALLOWED IN THE INSTANT CASE. THIS LEAVES US WITH ADMINISTRATIVE EXPENDITURE OPENING OF RS.64,26,523/ -. THE ASSESSING OFFICER HAD INITIALLY ARRIVED AT 0.5% FIGURE OF RS.3,24,34,056/ -. HE THEN REDUCED THE SAID SUM OF RS.64.26LACS WITH THE FOLLOWING REASONING: THE DIRECT EXPENDITURE IS TAKEN TO BE THE TOTAL EM PLOYEES REMUNERATION AND BENEFITS AS THE TIME AND EFFORT REQUIRED TO TRADE T HE SHARES HAS BEEN NEGLIGENT OR RATHER IT WOULD BE APPROPRIATE TO STATE THAT TRADIN G OF SHARES HAS BEEN NONEXISTENT DURING THE YEAR. SINCE VS % OF THE AVERAGE INVESTME NT IS MORE THAN THE TOTAL GENERAL AND ADMINISTRATION EXPENSE, SO THE DISALLOW ANCE IS RESTRICTED TO THE TOTAL GENERAL & ADMINISTRATION EXPENSE AND DEPRECIATION E XPENSE. THE TOTAL DISALLOWANCE COMES TO RS.23609877/- (RS.17183354/- + RS.4095120/-+ RS. 23,31,403). ACCORDINGLY A DISALLOWANCE OF RS. 21278 474/-IS MADE. RELIANCE IS PLACED UPON THE FOLLOWING JUDGEMENTS'. 19. IT IS EVIDENT THAT THE ASSESSING OFFICER HAD TA KEN THE LATTER TWO SUMS IN THE NATURE OF GENERAL/ADMINISTRATIVE EXPENSES AND DEPRE CIATION FOR THE PURPOSE OF COMPUTATION THE ADMINISTRATIVE EXPENDITURE IN ISSUE . LEARNED DEPARTMENTAL REPRESENTATIVE FAILS TO DISPUTE THAT THE IMPUGNED H EAD OF ADMINISTRATIVE EXPENDITURE IS AN INDIRECT EXPENSES AS AGAINST THE DIRECT ONE HAVING A VISIBLE NEXUS. IT HAS FURTHER COME ON RECORD THAT THE ASSE SSEE HAS DECLARED BOTH THE EXEMPT AND TAXABLE INCOME (SUPRA). WE TAKE INTO AC COUNT ALL THESE FACTS AND CIRCUMSTANCES TO RESTRICT THE IMPUGNED DISALLOWANCE TO AD HOC AMOUNT OF RS.50LACS. THE ASSESSEE GETS RELIEF OF RS.14,26,523 /- ONLY. WE MAKE IT CLEAR THAT WE HAVE RESTRICTED THE IMPUGNED DISALLOWANCE IN VIE W OF THE FACT THAT THE ASSESSEE IS AN INVESTMENT COMPANY ITSELF. IT IS THEREFORE A SSUMED TO HAVE INCURRED THE SAID EXPENDITURE PREDOMINANTLY ON ITS INVESTMENTS YIELDI NG EXEMPT INCOME BY WAY OF DIVIDEND. THE ASSESSEE THEREFORE PARTLY SUCCEEDS I N ITS FIRST SUBSTANTIVE GROUND. 20. WE FURTHER NOTICE THAT BOTH THE PARTIES SECOND SUBSTANTIVE GROUND RAISE THE COMMON ISSUE OF DIMINUTION IN VALUE OF INVESTMENTS AS SET ASIDE TO THE ASSESSING OFFICER FOR FACTUAL VERIFICATION. BOTH THE LEARNED REPRESENTATIVES AGREE THAT WE HAVE ALREADY UPHELD SIMILAR DIRECTIONS IN ASSESSMEN T YEAR 2007-08 IN EARLIER PART OF OUR ORDER. BOTH PARTIES SECOND SUBSTANTIVE GRO UND IS THEREFORE DECLINED. ASSESSEES APPEAL ITA NO.1663/AHD/2012 IS PARTLY AC CEPTED. THIS LEAVES US WITH ITA NOS. 737, 1671,1663 & 1670/AHD/12, 983 & 1153/ A/14 & CO NOS. 96 & 156/AHD 12 [M/S. TORRENT PVT. LTD. ] - 13 - REVENUES FORMER SUBSTANTIVE GROUND SEEKING TO REVI VE BOOK PROFITS ADJUSTMENT OF SECTION 14A DISALLOWANCE. WE HAVE ALREADY AFFIRMED CIT(A)S IDENTICAL ACTION IN ASSESSMENT YEAR 2007-08 HEREINABOVE. THE REVENUES INSTANT FORMER SUBSTANTIVE GROUND AS WELL AS ITS MAIN APPEAL ITA NO.1670/AHD/2 012 FAIL ACCORDINGLY. ASSESSMENT YEAR 2009-10 (REVENUES APPEAL ITA NO.1671/AHD/2012 AND ASSESSEE S CO NO. 156/AHD /2012) 21. THE REVENUES FIRST SUBSTANTIVE GROUND PLEADS T HAT THE CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN REVERSING ASSESSING OFFI CERS ACTION DISALLOWING ASSESSEES LONG TERM CAPITAL LOSS WITH THE FOLLOWIN G DETAILED DISCUSSIONS: 4.3 DECISION: I HAVE CAREFULLY PERUSED THE ASSESSMENT ORDER AND T HE SUBMISSIONS GIVEN BY THE APPELLANT. THE ISSUE INVOLVED IS RELATED TO REJECTION OF INDEXATION BY TAKING THE DATE OF ACQUISITION BY PREVIOUS OWNERS OF THE I NVESTMENT BY THE A.O. THE APPELLANT HAS CLAIMED THAT THE INDEXATION SHOULD BE GIVEN FROM THE DATE OF ACQUISITION BY THE PREVIOUS OWNER AS AGAINST DATE O F ACQUISITION BY THE APPELLANT AFTER AMALGAMATION ALLOWED BY THE A. O. IT IS NOTED THAT THE INVESTMENT WERE ACQUIRED BY TH E APPELLANT ON SCHEME OF AMALGAMATION OF OTHER COMPANIES WITH IT. THE PRO VISIONS OF SECTION 47 (VI) DEFINES THAT ANY TRANSFER IN A SCHEME OF AMALGAMATI ON SHALL NOT BE REGARDED AS TRANSFER AND NOTHING CONTAINED IN SECTION 45 SHALL APPLY. NOW, AS PER THE PROVISIONS OF SECTION 49(L)(E), THE COST OF ACQUISI TION OF THE ASSET SHALL BE DEEMED TO BE THE COST FOR WHICH THE PREVIOUS OWNER OF THE PROPERTY, ACQUIRED IT, AS INCREASED BY THE COST OF ANY IMPROVEMENT OF THE ASS ET INCURRED OR BORNE BY THE PREVIOUS OWNER OR THE ASSESSEE AS THE CASE MAY BE. THEREFORE, IN VIEW OF SECTION 49(1), THE COST OF ASSET OF SUCH INVESTMENT IS TO B E TAKEN AS THAT OF THE PREVIOUS OWNER. AS POINTED OUT BY THE A. R., SECTION 48 OR A NY OTHER SECTION DOES NOT DEFINE THE TERM 'FIRST YEAR IN WHICH ASSET WAS HELD BY THE ASSESSEE'. HOWEVER, WHEN PROVISIONS OF SECTION 47, 48 & 49 ARE TO BE APPLIED AND -CONSIDERED TOGETHER, THE PICTURE BECOMES CLEAR. FOR THE PURPOSE OF HOLDING P ERIOD, IT WOULD BE RELEVANT TO REFER TO SECTION 2(42A) WHEREIN THE SHORT TERM CAPI TAL ASSET IS DEFINED. AS PER EXPLANATION OF THE SAID SECTION, THE PERIOD FOR WHI CH THE ASSET IS HELD BY THE ASSESSEE IS TO BE DETERMINED BY INCLUDING THE PERIO D FOR WHICH ASSET WAS HELD BY THE PREVIOUS OWNER AS REFERRED TO IN SECTION 49(1) [REFER TO EXPLANATION 1 CLAUSE (B)]. THUS, AFTER CONSIDERING THESE PROVISIONS, THE PERIOD OF HOLDING BY THE AMALGAMATING COMPANIES IS TO BE INCLUDED IN THE PER IOD OF HOLDING BY THE APPELLANT. ACCORDINGLY, IT IS HELD THAT THE APPELLA NT HELD CAPITA} ASSET FROM THE DATE ON WHICH THE AMALGAMATING COMPANIES ACQUIRED S UCH ASSETS AND THE A. O. WAS, THEREFORE, NOT JUSTIFIED IN CONSIDERING THE DA TE OF AMALGAMATION FOR THE PURPOSE OF INDEXATION. THIS FINDING IS FURTHER SUPP ORTED BY THE RATIO OF THE ITA NOS. 737, 1671,1663 & 1670/AHD/12, 983 & 1153/ A/14 & CO NOS. 96 & 156/AHD 12 [M/S. TORRENT PVT. LTD. ] - 14 - BOMBAY HIGH COURT DECISION IN THE CASE OF CIT VS MA NJULLA J. SHAH [ITA NO.3378 OF 2010] DATED 11/10/2011 WHEREIN SIMILAR A NALYSIS HAS BEEN MADE BY THE HON'BLE COURT. ACCORDINGLY, THE A. O. IS DIRECT ED TO CONSIDER THE PERIOD OF HOLDING OF THE INVESTMENT FROM THE DATE WHEN THE IN VESTMENTS WERE ACQUIRED BY THE AMALGAMATING COMPANIES. THE APPELLANT'S CLAIM I N THIS REGARD, IS THEREFORE, ACCEPTED AND THE GROUND OF APPEAL IS ACCORDINGLY ALLOWED. 22. HEARD BOTH THE PARTIES. IT IS CLEAR FROM THE C IT(A)S ABOVE EXTRACTED FINDINGS THAT HE HAS DIRECTED THE ASSESSING OFFICER TO TAKE COST OF ACQUISITION OF ASSESSEES CAPITAL ASSETS AS THEY HAD BEEN ACQUIRED BY THE ORIGINAL OWNER/AMALGAMATING COMPANIES CONCERNED. LEARNED DE PARTMENTAL REPRESENTATIVE FAILS TO DISPUTE THE LEGAL POSITION AS PER HONBLE JURISDICTIONAL HIGH COURTS JUDGMENT IN (2013) 38 TAXMANN.COM 42 (GUJAR AT) CIT VS. GAUTAM MANUBHAI AMIN THAT SUCH A COST HAS TO BE ADOPTED AS IT HAD BEEN INCURRED BY THE ORIGINAL OWNER. WE THUS SEE NO MERIT IN REVENUES FIRST SUBSTANTIVE GROUND. 23. THE REVENUES SECOND SUBSTANTIVE GROUND SEEKS T O REVIVE SECTION 115JB MAT ADJUSTMENT QUA 14A DISALLOWANCE OF RS.2,43,69,9 06/-. SUFFICE TO SAY, WE HAVE ALREADY DECIDED SIMILAR ISSUE IN ASSESSEES FA VOUR IN PRECEDING PARAGRAPHS IN ASSESSMENT YEARS 2007-08 AND 2008-09. WE THUS ADOP T JUDICIAL CONSISTENCY TO REJECT THE REVENUES INSTANT SUBSTANTIVE GROUND AS WELL. 24. THE REVENUES THIRD SUBSTANTIVE GROUND CHALLENG ES THE CORRECTNESS OF THE CIT(A)S ACTION DIRECTED THE ASSESSING OFFICER TO F OLLOW ASSESSMENT YEAR 2008-09 DISCUSSION/FINAL COMPUTATION ON THE ISSUE PROVISION FOR DIMINUTION IN VALUE OF INVESTMENTS/DOUBTFUL DEBT WHILST FINALIZING BOOK PR OFITS. BOTH THE PARTIES ARE AD IDEM THAT WE HAVE REJECTED REVENUES SIMILAR SUBSTA NTIVE GROUND IN EARLIER ASSESSMENT YEARS IN PRECEDING PARAGRAPHS. WE ADOPT THE VERY COURSE OF ACTION HEREINABOVE AS WELL TO REJECT REVENUES INSTANT SUB STANTIVE GROUND AS WELL AS MAIN APPEAL ITA NO.1671/AHD/2012. 25. THIS LEAVES US WITH ASSESSEES CROSS OBJECTION NO. 156/AHD/2012 RAISING SOLE SUBSTANTIVE GROUND CHALLENGING CORRECTNESS OF SECTION 14A DISALLOWANCE OF ITA NOS. 737, 1671,1663 & 1670/AHD/12, 983 & 1153/ A/14 & CO NOS. 96 & 156/AHD 12 [M/S. TORRENT PVT. LTD. ] - 15 - RS.2,43,69,906/- OUT OF RS.2,43,82,266/-. THE SAME COMPRISES OF DIRECT EXPENDITURE OF RS.1,93,96,561/- HAVING NEXUS WITH A SSESSEES EXEMPT INCOME. THERE IS NO MATERIAL ON RECORD BEFORE US TO REBUT T HE SAID NEXUS. WE THUS AFFIRM THE IMPUGNED DIRECT EXPENDITURE DISALLOWANCE. THERE IS NO PROPORTIONATE INTEREST EXPENDITURE DISALLOWANCE MADE IN THE IMPUGNED ASSES SMENT YEAR. LAST HEAD THEREFORE COMES TO BE THAT OF ADMINISTRATIVE EXPEND ITURE AND DEPRECIATION OF RS.20,26,956/- AND RS.29,58,749/- TOTALING TO RS.49 ,85,705/-. THE ASSESSEE DERIVED EXEMPT INCOME FROM DIVIDEND OF RS.48.76 CRO RES, SHARE IN PARTNERSHIP FIRM TO RS.1.618 CRORES, INTEREST INCOME OF RS.14.7 4 CRORES AND OTHER INCOME OF RS.3.70LACS ONLY. A SAFE PRESUMPTION CAN BE DRAWN THAT THE ASSESSEE INCURRED MAJOR PART OF ITS ADMINISTRATIVE EXPENSES QUA THE E XEMPT INCOME ONLY. WE THUS AFFIRM THE IMPUGNED ADMINISTRATIVE EXPENDITURE DISA LLOWANCE OF RS.49,85,705/- TO A LUMP SUM AMOUNT OF RS.45LACS AND GRANT PART RELIE F TO THE EXTENT OF RS.4,85,705/- ONLY. THE ASSESSEES INSTANT SUBSTAN TIVE GROUND AS WELL AS CROSS OBJECTION IS PARTLY ACCEPTED IN ABOVE TERMS WITH A RIDER THAT OUR ABOVE ESTIMATION IN ANY OF IMPUGNED ASSESSMENT YEAR (S) WOULD NOT BE TREATED AS A PRECEDENT. ASSESSMENT YEAR 2003-04 (ASSESSEES & REVENUES CROSS APPEALS ITA NO.1163 & 983/AHD/2014) 26. THE REVENUES SOLE SUBSTANTIVE GRIEVANCE IN ITS APPEAL ITA NO.983/AHD/2014 CHALLENGES CORRECTNESS OF THE CIT(A )S ACTION DELETING SECTION 234B INTEREST OF RS.29,99,684/- WITH THE FOLLOWING DETAILED DISCUSSION: (C) GROUND NO.3 IS AGAINST THE LEVY OF INTEREST U/ S.234B OF THE ACT. AS DISCUSSED AT PARA 5.1 (A) ABOVE, THE APPELLANT ON T HE BASIS OF VARIOUS LEGAL PROPOSITION AS RATIO OF VARIOUS CASE LAWS CONTENDED THAT THOUGH THE PROVISIONS OF ADVANCE TAX ARE APPLICABLE FOR THE PROCEEDINGS U/S. 115JB OF THE ACT BUT ON ACCOUNT OF RETROSPECTIVE AMENDMENT IN RESPECT OF 'P ROVISION OF DIMINUTION OF VALUE OF ASSET', SUCH LIABILITY CANNOT BE FORESEEN AT THE TIME OF FILING OF RETURN OF INCOME AND CANNOT BE HELD AS MALAFIDE IN VIEW OF HO N'BLE SUPREME COURT DECISION IN THE CASE OF HCL COMNET SYSTEM & SERVICE S LTD. (SUPRA). IT IS IN THIS REGARD, I AM INCLINED WITH APPELLANT THAT RATIO OF HON'BLE ITAT, DELHI 'H' BENCH IN THE CASE OF UTTAM SUGAR MILLS LTD.(SUPRA) AND HO N'BLE ITAT, BANGALORE IN THE CASE OF JSW STEEL LTD.(SUPRA) ARE APPLICABLE IN THE CASE OF APPELLANT. HON'BLE CALCUTTA HIGH COURT IN THE CASE OF EMAMI LTD. VS. C .I.T.(2011) 337 ITR 470 AND HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. JUPITER BIO-SCIENCE LTD. ITA NOS. 737, 1671,1663 & 1670/AHD/12, 983 & 1153/ A/14 & CO NOS. 96 & 156/AHD 12 [M/S. TORRENT PVT. LTD. ] - 16 - (2011) 13 TAXMANN.COM 161 FOLLOWED THE RATIO THAT T HE RETROSPECTIVE AMENDMENT DOES NOT PUT ANY ASSESSEE IN DEFAULT FOR ADVANCE TA X TO THAT AMENDED ISSUE AND THEREFORE THOUGH THE LEVY U/S.234B OF THE ACT IS MA NDATORY IN NATURE, CHARGING AND/OR LEVY OF INTEREST U/S.234B OF THE ACT FOR THE ADDITION RELATED TO RETROSPECTIVE AMENDMENT IS NOT JUSTIFIED AND SUSTAINABLE IN LAW. IT IS THEREFORE, THIS GROUND IS ALLOWED. 27. HEARD BOTH THE PARTIES. IT HAS COME ON RECORD THAT THE IMPUGNED INTEREST LIABILITY HAD BEEN FASTENED ON THE ASSESSEE ONLY IN VIEW OF RETROSPECTIVE AMENDMENT (SUPRA). HONBLE JURISDICTIONAL HIGH COU RT IN (2017) 83 TAXMANN.COM 109 (GUJ) IN CIT VS. NATIONAL DAIRY DEVELOPMENT BOA RD HOLDS THAT SUCH A LIABILITY DOES NOT ARISE IN CASE OF RETROSPECTIVE AMENDMENT. WE THUS SEE NO REASON TO INTERFERE WITH LEARNED CIT(A)S FINDINGS UNDER CHAL LENGE. THE REVENUES INSTANT GROUND AS WELL AS MAIN APPEAL ITA NO.983/AHD/2014 F AIL ACCORDINGLY. 28. WE NOW ADVERT TO ASSESSEES CROSS APPEAL ITA NO . 1163/AHD/2014. ITS FIRST SUBSTANTIVE GROUND IS THAT THE CIT(A) HAS ERR ED IN LAW AS WELL AS ON FACTS IN UPHOLDING ASSESSING OFFICERS ACTION ADDING THE AMO UNT IN QUESTION OF RS.13.85CRORES AFTER CONCLUDING THE SAME TO BE FOR WRITE OFF AND NOT AS A PROVISION FOR DIMINUTION IN VALUE OF ITS INVESTMENTS WITH THE FOLLOWING DETAILED DISCUSSION: (A) GROUND NO.1 IS AGAINST THE DISALLOWANCE AND A DDITION OF RS.13,85,00,000 WHILE COMPUTING BOOK PROFIT U/S.115JB OF THE ACT ON THE CONTENTION THAT IMPUGNED ITEM DEBITED TO THE P&L ACCOUNT WAS, IN TRUTH AND S UBSTANCE, A WRITE OFF AND NOT A PROVISION FOR DIMINUTION IN THE VALUE OF ITS INVEST MENT TO WHICH ALONE THE NEWLY RETROSPECTIVELY INSERTED CLAUSE (I) IN THE EXPLANAT ION TO SECTION 115JB(2) COULD APPLY. FIRSTLY, THE APPELLANT IN AFFIRMATION AGREED THAT N EWLY INSERTED CLAUSE (I) TO EXPLANATION TO SECTION 115JB(2) IS APPLICABLE NO W BEING THE AMENDMENT THOUGH BROUGHT BY THE FINANCE ACT 2009 BUT WITH RET ROSPECTIVE DATE. IT IS THE APPELLANT'S CONTENTION THAT FACTS RELATED TO RS.13, 85,00,000 ARE IN THE FORM OF A WRITE OFF AND NOT A PROVISION AND HENCE SUCH CLAUSE IS NOT APPLICABLE. AS DISCUSSED AT PARA 5.1(B) ABOVE, THE APPELLANT'S ANNUAL REPORT AND AUDITED ACCOUNTS DOES NOT REVEAL OF SUCH WRITE OFF BECAUSE, THE DIMINUTION OF ASSET IN THE BALANCE SHEET AT SCHEDULE IV FOR INVES TMENT REFLECT 'PROVISION IN DIMINUTION IN VALUE OF INVESTMENT OF RS.83,96,21,77 9 WITHOUT SPECIFYING THE DETAILS OF TYPE OF INVESTMENT OF LONG TERM INVESTME NTS AND CURRENT INVESTMENTS IN SHARES, DEBENTURES, MUTUAL FUNDS, GOVT. SECURITIES ETC. TO WHICH SUCH VALUE APPLY. FURTHER OUT OF THIS ONLY RS.13,85,00,000 WAS DEBITE D IN AUDITED PROFIT AND LOSS ITA NOS. 737, 1671,1663 & 1670/AHD/12, 983 & 1153/ A/14 & CO NOS. 96 & 156/AHD 12 [M/S. TORRENT PVT. LTD. ] - 17 - ACCOUNT AS 'PROVISION FOR DIMINUTION IN VALUE OF IN VESTMENT.' THERE IS NO DETAILS WHICH TYPE OF SHARES, SECURITIES, DEBENTURES ETC. A RE WRITTEN OFF AND WHY OUT OF RS. 83,96,21,779 ONLY RS.13,85,00,000 IS CONSIDERED. FU RTHER AS DISCUSSED IN PARA 5.1(B) ABOVE, THE APPELLANT HAS BUSINESS OF SHARE & SECURITIES TRADING BEING A NON-BANKING FINANCE COMPANY (NBFC) BESIDES HAVING I NVESTMENT ACTIVITIES ALSO IN SHARES & SECURITIES RESULTING INTO LONG TERM/SHO RT TERM CAPITAL GAIN. IF THE APPELLANT HAS WRITTEN OFF CERTAIN INVESTMENT AS CLA IMED THEN IT WILL RESULT INTO CORRESPONDING SHORT TERM/LONG TERM CAPITAL LOSS WHI CH THE APPELLANT HAS NEITHER COMPUTED NOR REFLECTED. THIS CLEARLY REFLECTS THAT THESE ARE PROVISIONS AND NOT THE ACTUAL WRITE OFF. ON THE PROPOSITION OF LAW, BY THE AMENDMENT FOR INS ERTION OF CLAUSE (I) TO EXPLANATION TO SECTION 115 JB (2) OF THE ACT, THE F AIR & CONSISTENT VIEW AS ADOPTED BY HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V HC L COMNET SYSTEM AND SERVICES LTD. (2007) 292 ITR 299 DULY AFFIRMED BY T HE SUPREME COURT IN 305 ITR 409 WAS NEUTRALIZED. HON'BLE KARNATAKA HIGH COURT I N THE CASE OF CIT VS. MYSORE BREWERIES LTD. (2009) 227 CTR (KAQR.)569 HEL D THAT 'IN VIEW OF INSERTION OF CLAUSE (I) TO EXPLANATION 1 TO SECTION 115JB, WITH RETROSPECTIVE EFFECT, AMOUNT SET ASIDE AS PROVISION FOR DIMINUTION IN VALUE OF ASSETS IS TO BE ADDED BACK FOR COMPUTATION OF BOOK PROFIT U/S.115JB. THIS IS FOLLOWED IN THE CASE OF CIT V. YASHASWI LEASING & F INANCE LTD. (2012) 204 TAXMAN 602 (KAR.) SIMILAR VIEW IS TAKEN BY HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V. STERIPLATE (P)LTD. (201 2) 20 TAXMAN. COM.375.' AS DISCUSSED IN PARA 5.1 (A) THAT APPELLANT TO SUBS TANTIATE THE CONTENTION THAT THE AMOUNT IS ACTUAL WRITTEN OFF AND NOT A PRO VISION, RELIED ON HON'BLE SUPREME COURT IN THE CASE OF VIJAYA BANK (SUPRA) AN D HON'BLE KARNATAKA HIGH COURT CASE OF YOKOGAWA INDIA LTD. (SUPRA) WITH DUE REGARDS, I AM NOT INCLINED TO ACCEPT THAT RATIO OF THESE CASES ARE APPLICABLE TO APPELLANT'S CASE OR THE FACTS ARE SIMILAR TO THE FACTS OF THESE CASES. IN BOTH THE CA SES THE ISSUE WAS RELATED TO BAD DEBTS AND SECTION 3B(1)(VII) OF THE ACT WAS INVOLVE D. IRRESPECTIVE OF THE FACTS THAT WHETHER THE SAME WAS PROVISION OR ACTUAL WRITE OFF, IN THE CASE OF APPELLANT, RS. 13,85,00,000 IS NEITHER RELATED TO ANY DEBT NOR ANY BAD DEBT. THE APPELLANT'S BUSINESS ACTIVITIES OF SHARE TRADING AS ELABORATED AT PARA 5.1(B) ABOVE UNDER THE CONTINUED LICENCE AS NBFC CANNOT TREAT THE 'PROVISI ONS IN DIMINUTION OF INVESTMENT' AS 'BAD DEBTS'. AS EXPLAINED EARLIER, T HE PROVISION FOR BAD DEBT AND ACTUAL WRITE OFF OF BAD DEBTS U/S.36(1)(VII) FOR A BANKING COMPANY LIKE VIJAYA BANK IS ENTIRELY DIFFERENT AND AFFECTING BUSINESS P ROFIT. WHILE IN THE CASE OF APPELLANT SUCH PROVISIONS OF DIMINUTION OF VALUE OF INVESTMENT WILL AFFECT ONLY INVESTMENT AND ITS WRITE OFF WILL AFFECT LONG/SHORT TERM CAPITAL GAIN. THE APPELLANT NEITHER SPECIFIED SUCH SELECTIVE CLAIM OF RS.13,85, 00,000 IN BALANCE SHEET NOR REFLECTED SUCH LOSS IF INCURRED ON ACCOUNT OF SUCH WRITE OFF. IT IS THEREFORE, I AM NOT INCLINED WITH THE CONTENT ION OF APPELLANT BOTH ON FACTS AS WELL AS ON LEGAL PROPOSITION THAT A.O.S A DDITION OF RS.13,85,00,000 FOR COMPUTING BOOK PROFIT U/S.115JB OF THE ACT IS NOT J USTIFIED. THIS GROUND IS THEREFORE DISMISSED. ITA NOS. 737, 1671,1663 & 1670/AHD/12, 983 & 1153/ A/14 & CO NOS. 96 & 156/AHD 12 [M/S. TORRENT PVT. LTD. ] - 18 - 29. WE HAVE HEARD BOTH THE PARTIES REITERATING THEI R RESPECTIVE STANDS. CASE FILE PERUSED. LEARNED SENIOR COUNSEL FIRST OF ALL TAKES US TO PAGE 24 IN PAPER BOOK. HIS CASE IS THAT THE ASSESSEE HAD SHOWN INVESTMENT AMOU NT IN BALANCE SHEET OF RS.4,90,26,84,859/- AS ON 31.03.2003. HE THEN REFE RS TO ASSESSEES P&L ACCOUNT CREATING PROVISION FOR THE IMPUGNED DIMINUTION AMOU NTING TO RS.13.85CRORES. THIS FOLLOWS PAGE 31(SCHEDULE IV) INDICATING THE AS SESSEE TO HAVE ARRIVED AT THE ABOVE INVESTMENT FIGURE. LASTLY COMES PAGE 57 CONT AINING DETAILS OF ASSESSEES PROVISION IN THE IMPUGNED ASSESSMENT ORDER OF RS.69 ,46,73,244/- AS WELL AS SIMILAR PROVISIONS WRITTEN BACK AMOUNTING TO RS.55, 61,73,244/-. THE ASSESSEES CASE ACCORDINGLY IS IT HAS DULY FOLLOWED NETTING PR INCIPLE AS PER HONBLE JURISDICTIONAL HIGH COURTS JUDGMENT IN VODAFONE ES SARS CASE (SUPRA). THESE CRUCIAL FACTS EVIDENT FROM CASE RECORD HAVE GONE UN REBUTTED FROM REVENUE SIDE. WE THUS TAKE INTO ACCOUNT ALL THIS COGENT MATERIAL AS WELL AS LEGAL PROPOSITION SETTLED BY HONBLE JURISDICTIONAL HIGH COURT TO ACC EPT ASSESSEES INSTANT FIRST SUBSTANTIVE GROUND AS IT HAS DULY FOLLOWED THE NETT ING PRINCIPLE PROPOUNDED IN THE HONBLE FULL BENCH DECISION. WE MAKE IT CLEAR THAT THEIR LORDSHIPS HAVE ALREADY CONSIDERED ALL THE CASE LAWS INCLUDING HCL COMMET ( SUPRA). WE THUS ACCEPT ASSESSEES FORMER SUBSTANTIVE GROUND. 30. WE COME TO ASSESSEES LATTER SUBSTANTIVE GROUND CHALLENGING BOTH THE LOWER AUTHORITIES ACTION REJECTING ITS DEDUCTION CLAIM O F RS.9,93,93,233/- ON ACCOUNT OF WRITE BACK OF EXCESS PROVISION FOR LOANS AND ADVANC ES CREDITED TO P&L ACCOUNT IN COMPUTING BOOKS PROFITS. BOTH PARTIES ARE AD IDEM THAT THE SAME NEEDS TO BE REMITTED BACK TO THE ASSESSING OFFICER TO FRAME CON SEQUENTIAL ASSESSMENT MORE PARTICULARLY IN VIEW OF HIS FINDINGS ON THE VERY IS SUE IN PRECEDING PARAGRAPHS. THE ASSESSEE INFORMS US DURING THE COURSE OF HEARING TH AT IF A PROVISION IS DISALLOWED IN EARLIER ASSESSMENT YEAR AND ADDED HEREIN AS WELL , THE SAME WOULD RESULT IN CASE OF DOUBLE DISALLOWANCE. RELEVANT REFERENCE IS ALSO DRAWN TO OUR FINDINGS RIGHT FROM THE LEAD ASSESSMENT YEAR 2007-08. WE THEREFOR E DIRECT THE ASSESSING OFFICER TO FRAME CONSEQUENTIAL ASSESSMENT AS PER LAW IN ABO VE TERMS. THE INSTANT GROUND ITA NOS. 737, 1671,1663 & 1670/AHD/12, 983 & 1153/ A/14 & CO NOS. 96 & 156/AHD 12 [M/S. TORRENT PVT. LTD. ] - 19 - IS TAKEN AS ACCEPTED FOR STATISTICAL PURPOSES. THE ASSESSEES CROSS APPEAL ITA NO.1163/AHD/2014 IS PARTLY ACCEPTED IN ABOVE TERMS. 31. WE QUOTE OUR DETAILED DISCUSSION HEREINABOVE TO PARTLY ALLOW REVENUES APPEAL ITA NO.737/AHD/2012 FOR STATISTICAL PURPOSES , DISMISS ITS OTHER APPEALS ITA NOS.1670 & 1671/AHD/2012 AND ITA NO.983/AHD/201 4 AND PARTLY ALLOW ASSESSEES APPEALS ITA NOS.1663/AHD/2012 & 1163/AHD /2014 AND CO NOS. 96 & 156/AHD/2012. ORDERED ACCORDINGLY. [PRONOUNCED IN THE OPEN COURT ON THIS THE 13 TH DAY OF APRIL, 2018.] SD/- SD/- (N. K. BILLAIYA) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER AHMEDABAD: DATED 13/04/2018 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE 3 ! / CONCERNED CIT 4 !- / CIT (A) ()*+ ,--. ./0 / DR, ITAT, AHMEDABAD 1+2345 / GUARD FILE. BY ORDER / . // ./0