M/s. Tamilnadu Power Finance & Infrastructure Development Corpn. Ltd., CHENNAI V. ACIT, CHENNAI

ITA 102/CHNY/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1074 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-03-2013
• Assessment Year: 1997-1998
• Appeal Filed On: 24-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR S MOHARANA
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH CHENN AI BEFORE SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER AND SHRI V.DURGA RAO, JUDICIAL MEMBER .. ITA NOS. 101 TO 109/MDS./2011 ASSESSMENT YEARS: 1996-97 TO 2003-04 & 2006-07 & ITA NO.1922/MDS./2011 ASSESSMENT YEAR : 2007-08 M/S.TAMILNADU POWER FINANCE & INFRASTRUCTURE DEVELOPMENT CORPN. LTD., TUFIDCO POWERFIN TOWERS, NO.490/3-4,ANNA SALAI, NANDANAM, CHENNAI 600 035. VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-III(1), CHENNAI 600 034. PAN AAACT 2840 A (APPELLANT) (RESPONDENT) ITA NOS.225 TO 233 /MDS./2011 ASSESSMENT YEARS: 1996-97 TO 2003-04 & 2006-07 & ITA NO.2034/MDS./2011 ASSESSMENT YEAR : 2007-08 THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-III(1), CHENNAI 600 034. VS. M/S.TAMILNADU POWER FINANCE & INFRASTRUCTURE DEVELOPMENT CORPN. LTD., TUFIDCO POWERFIN TOWERS, NO.490/3-4,ANNA SALAI, NANDANAM, CHENNAI 600 035. PAN AAACT 2840 A (APPELLANT) (RESPONDENT) ITA NO. 101 TO 109/1922//MDS/11 ITA NO. 225 TO 233/2034//MDS/11 2 ASSESSEE BY : SHRI R.VIJAYARAGHAVAN, ADVOCATE DEPARTMENT BY : DR.S.MOHARANA, C.I.T. DR DATE OF HEARING : 11.03.13 DATE OF PRONOUNCEMENT : 21 .03.13 O R D E R PER BENCH : THESE ARE CROSS-APPEALS OF ASSESSEE AND DEPARTME NT RESPECTIVELY FOR THE IMPUGNED ASSESSMENT YEARS. 2. ONE COMMON GROUND APPEARS IN ALL THE APPEALS OF THE REVENUE WHICH IS REGARDING TREATMENT OF HIRE PURCHA SE INCOME. ASSESSING OFFICER HAD DECLINED TO ALLOW THE ASSESSE E, DEDUCTION CLAIMED UNDER SECTION 36(1)(VIII) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). HOWEVER, ON APPEALS OF ASSESSEE, CIT(A) ALLOWED THE DEDUCTION. 3. AS AGAINST THIS, ONE COMMON GROUND TAKEN BY T HE ASSESSEE IN ALL ITS APPEALS, IS WITH RESPECT TO DIS ALLOWANCE OF ITS ITA NO. 101 TO 109/1922//MDS/11 ITA NO. 225 TO 233/2034//MDS/11 3 CLAIM FOR DEDUCTION OF LEASE INCOME UNDER SECTION 3 6(1)(VIII), WHICH WAS CONFIRMED BY THE CIT(A). 4. FACTS APROPOS THESE TWO ISSUES ARE THAT ASSESSE E, A NON- BANKING FINANCIAL COMPANY OWNED BY THE TAMILNADU GOVERNMENT, HAD IN ITS RETURNS FOR THE IMPUGNED YE ARS, CLAIMED DEDUCTION UNDER SECTION 36(1)(VIII) ON ITS LEASE IN COME, HIRE CHARGES AS WELL AS INTEREST RECEIVED ON DEPOSITS. THESE WERE IN ADDITION TO ITS CLAIM FOR SIMILAR DEDUCTION ON INTE REST ON LONG TERM FINANCE GIVEN BY IT TO VARIOUS CONCERNS. ASSESSING OFFICER HAD DECLINED TO CONSIDER THE FORMER CLAIM TAKING A VIEW THESE WERE NOT INCOME DERIVED FROM LONG TERM FINANCE. ASSESSE E HAD MOVED IN APPEAL AGAINST THE DENIAL OF DEDUCTION UND ER SECTION 36(1)(VIII) OF THE ACT, FIRST BEFORE THE CIT(A) AN D THEN BEFORE THIS TRIBUNAL. THIS TRIBUNAL HAD REMITTED THE ISSUE WIT H REGARD TO THE CLAIM OF ASSESSEE FOR DEDUCTION UNDER SECTION 36(1) (VIII) OF THE ACT, ON ITEMS OTHER THAN INTEREST ON DIRECT LONG T ERM FINANCE, BACK TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERAT ION AFRESH. SUCH DIRECTIONS WERE GIVEN BY THE TRIBUNAL FOR A REASON THAT LOWER AUTHORITIES HAD NOT GONE INTO THE ASPECT WHETHER SU CH DEDUCTIONS CLAIMED ASSESSEE FELL WITHIN THE SCOPE OF EXPLANATI ON (E) OF THE SAID SECTION. THIS TRIBUNAL NOTED THAT DEDUCTION U NDER SECTION ITA NO. 101 TO 109/1922//MDS/11 ITA NO. 225 TO 233/2034//MDS/11 4 36(1)(VIII) WAS AVAILABLE ONLY TO PROFITS DERIVED FROM A BUSINESS OF LONG TERM FINANCE AND SINCE TERM LONG TERM FINAN CE WAS DEFINED IN EXPLANATION (E), IT WAS NECESSARY TO SEE WHETHER THE CLAIMS OF ASSESSEE FITTED INTO THE SAID DEFINITION . 5. ACCORDINGLY, THE MATTER WAS ONCE AGAIN, CONSIDE RED BY THE ASSESSING OFFICER. IN SUCH FRESH PROCEEDINGS, ASSES SEE WAS REQUIRED TO FURNISH DOCUMENTS JUSTIFYING ITS ELIGIB ILITY FOR DEDUCTION UNDER SECTION 36(1)(VIII) OF THE ACT, WITH RESPECT TO ITS LEASING INCOME, HIRE PURCHASE INCOME AND INTEREST ON DEPOSI TS. REPLY OF THE ASSESSEE WAS THAT IT WAS A NON-BANKING FINANCIA L CORPORATION INCORPORATED BY THE STATE IN 1991, FOR PROVIDING LONG TERM FINANCE FOR INFRASTRUCTURE DEVELOPMENT. AS PE R THE ASSESSEE, IT WAS ELIGIBLE FOR CLAIMING DEDUCTION OF THESE AMOUNTS SINCE THE FUNDING WHICH GAVE RISE SUCH INCOME FELL WITHIN THE DEFINITION OF LONG TERM FINANCE GIVEN IN EXPLANATI ON(E) TO SECTION 36(1)(VIII) OF THE ACT. HOWEVER, ASSESSING OFFICER WAS NOT IMPRESSED. ACCORDING TO HIM, ASSESSEE COULD NOT SAT ISFY THE CONDITIONS REQUIRED UNDER EXPLANATION (E) WITH REGA RD INCOME FROM LEASING ACTIVITY, HIRE PURCHASE ACTIVITY AND INTERE ST ON DEPOSITS. ASSESSING OFFICER HELD THAT UNLESS MONEY WAS ACTUAL LY LENT OR ADVANCED WITH A CONDITION THAT IT WAS REPAID ALONG WITH INTEREST ITA NO. 101 TO 109/1922//MDS/11 ITA NO. 225 TO 233/2034//MDS/11 5 AND UNLESS PERIOD OF REPAYMENT WAS FIVE YEARS OR MO RE, A DEDUCTION CLAIMED UNDER SECTION 36(1)(VIII) COULD NOT BE ALLOWED. AS FOR INTEREST ON DEPOSITS, LD. A.O. RELYING ON TH E DECISION OF HONBLE SUPREME COURT IN THE CASE OF TUTICORIN ALKA LI CHEMICALS AND FERTILIZERS LTD. VS. CIT ( 227 ITR 172) TOOK A VIEW THAT INTEREST ON SHORT TERM DEPOSITS MADE OUT OF SURPLUS FUNDS FELL UNDER THE HEAD INCOME FROM OTHER SOURCES AND ASSE SSEE WAS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 36(1)(VIII ) OF THE ACT. FURTHER, ACCORDING TO HIM, THE IMMEDIATE SOURCE OF INCOME ALONE WAS TO BE CONSIDERED FOR APPLICATION OF SECTION 36( 1)(VIII). RELIANCE WAS ALSO PLACED ON THE CBDT CIRCULAR NO.1 OF 2001/F.NO.225/186/2000-ITA-II, DATED 9 TH FEBRUARY, 2001 WHEREIN THE REASONS FOR AMENDING SECTION 36(1)(VIII ) THROUGH FINANCE ACT, 1995 WAS EXPLAINED. ACCORDING TO HIM , PURPOSE OF THE AMENDMENT WAS TO RESTRICT THE DEDUCTION TO INCO ME DERIVED FROM THE BUSINESS OF PROVIDING LONG TERM FINANCE. 6. LD. ASSESSING OFFICER ALSO CONSIDERED THE DEFI NITION OF A HIRE PURCHASE AGREEMENT UNDER HIRE PURCHASE ACT, 19 72 AS ALSO DEFINITION OF A LEASE UNDER THE TRANSFER OF PROPERT Y ACT, 1882, FOR SUPPORTING HIS FINDINGS THAT THERE WAS NO LENDING O F MONEY WHEN GOODS WERE GIVEN ON HIRE OR LEASE. ASSESSING OFFIC ER ALSO NOTED ITA NO. 101 TO 109/1922//MDS/11 ITA NO. 225 TO 233/2034//MDS/11 6 THAT ASSESSEE HAS CLAIMED DEPRECIATION ON LEASED A SSETS, THEREBY SHOWING THAT THERE WAS NO ELEMENT OF FINANC ING IN SUCH LEASING. FURTHER AS PER THE ASSESSING OFFICER, AS SESSEE HAD CLAIMED EXEMPTION FROM INTEREST TAX ACT ON HIRING I NCOME RECEIVED FOR A REASON THAT SUCH INCOME WAS NOT INTE REST. ASSESSEE HAD CLAIMED DEPRECIATION ON ASSETS GIVEN O N HIRE AS WELL. EFFECTIVELY, HE DENIED THE DEDUCTION CLAIMED UNDER SECTION 36(1)(VIII) TO THE ASSESSEE ON ITS EARNINGS FROM LEASING, EARNINGS FROM HIRING AND INTEREST ON DEPOSITS WITH BANK. I TS CLAIM WAS ALLOWED ONLY IN RESPECT OF INTEREST ON LONG TERM FI ANC. 7. ASSESSEE MOVED IN APPEAL BEFORE THE CIT(A) ONCE AGAIN. ARGUMENT OF THE ASSESSEE WAS THAT ITS ENTIRE INCOM E WAS DERIVED FROM LONG TERM FINANCE, PROVIDED TO TAMILNADU ELEC TRICITY BOARD, WHATEVER THE CLASSIFICATIONS WERE. ACCORDING TO TH E ASSESSEE, LONG TERM FINANCE INCLUDED NOT ONLY DIRECT LOANS, B UT ALSO INDIRECT LOANS IN THE FORM OF HIRE PURCHASE, LEASING AND OTH ER ADVANCES. ARGUMENT OF THE ASSESSEE WAS THAT THE AGREEMENTS OF HIRE PURCHASE AND LEASE WERE EFFECTIVELY ONLY FOR FINAN CING THE PURCHASE OF ITEMS MENTIONED THEREIN AND WERE NOT OP ERATING LEASE OR HIRING OF GOODS SIMPLICITER. ASSESSEE ALS O CLAIMED THAT IT HAD NOT AVAILED DEPRECIATION ON ASSETS GIVEN UNDER THE HIRE ITA NO. 101 TO 109/1922//MDS/11 ITA NO. 225 TO 233/2034//MDS/11 7 PURCHASE AGREEMENT. RELIANCE WAS PLACED ON THE DECI SION OF HONBLE APEX COURT IN THE CASE OF SUNDARAM FINANCE LTD., VS. THE STATE OF KERALA AND ANOTHER (1966) AIR 1178, 19 66 SCR(2) 828 AND ASEA BROWN BOVERI LIMITED VS. INDUSTRIAL FI NANCE CORPORATION OF INDIA AND OTHERS (2006) 154 TAXMAN 512. LD. CIT(A) WAS IMPRESSED WITH SUCH ARGUMENT IN SO FAR A S IT RELATED TO INCOME FROM HIRE PURCHASE. ACCORDING TO HIM, ASS ESSEE WAS ONLY FINANCING THE PURCHASE OF THE ASSETS BY M/S.TA MILNADU ELECTRICITY BOARD. ASSESSEE HAD ALSO PAID INTEREST TAX ON THE HIRE CHARGES RECEIVED FROM THE BOARD. ACCORDING TO LD. CIT(A), ASSESSEE HAD ALSO NOT CLAIMED ANY DEPRECIATION ON ASSETS GIVEN ON HIRE. BALANCES WERE SHOWN ONLY AS STOCK ON HIRE, AS A PART OF CURRENT ASSETS. HOWEVER, IN SO FAR AS LEASING INCOM E WAS CONCERNED, CIT(A) WAS OF THE OPINION THAT WHATSOEVE R WAS RECEIVED WAS ONLY LEASE RENTAL AND NOT INTEREST. F URTHER AS PER CIT(A), ASSESSEE HAD NOT PAID ANY INTEREST TAX ON T HE LEASE RENTAL. ACCORDING TO HIM, LEASE RENTAL STOOD ON A DIFFERENT FOOTING WHEN COMPARED TO HIRE PURCHASE TRANSACTIONS. HE THE REFORE, HELD THAT THERE WAS NO ELEMENT OF INTEREST IN THE LEASE RENTAL RECEIVED BY THE ASSESSEE. ACCORDINGLY, HE HELD LEASE INCOM E TO BE NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 36(1)(VIII) OF THE ACT WHEREAS HIRE CHARGES WERE HELD AS ELIGIBLE FOR SUCH DEDUCTI ON. ITA NO. 101 TO 109/1922//MDS/11 ITA NO. 225 TO 233/2034//MDS/11 8 8. WITH REGARD TO INTEREST ON DEPOSIT ON WHICH ALS O ASSESSING OFFICER HAD DENIED THE CLAIM UNDER SECTION 36(1)(VI II) OF THE ACT, LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO VERIFY THE CONTENTION OF THE ASSESSEE THAT IT HAD NOT IN THE FIRST PLACE CLAIMED ANY DEDUCTION FOR SUCH INTEREST. 9. NOW, BEFORE US, LD. D.R STRONGLY ASSAILING THE ORDER OF THE CIT(A) IN SO FAR AS IT RELATED TO HIS DIRECTION THA T HIRE PURCHASE INCOME WAS ELIGIBLE FOR DEDUCTION UNDER SECTION 36( 1)(VIII) AND SUPPORTING HIS ORDER IN SO FAR AS IT RELATED TO THE CONFIRMATION OF THE TREATMENT OF LEASE INCOME, SUBMITTED THAT CONDI TIONS MENTIONED IN SECTION 36(1)(VIII) OF THE ACT WERE NO T SATISFIED WITH RESPECT TO SUCH INCOME. ACCORDING TO HIM, SUCH DEDU CTION WAS PROVIDED IN THE STATUTE, FOR ENCOURAGING INVESTMEN TS IN INFRASTRUCTURE FACILITY, BY PROVIDING LONG TERM FIN ANCE. LONG TERM FINANCE WAS CLEARLY DEFINED IN EXPLANATION (E) TO T HE SAID SECTION AND NEITHER HIRE PURCHASE INCOME NOR THE LEASE INC OME FELL UNDER THE DEFINITION. FURTHER, ACCORDING TO HIM, WHAT C OULD BE ALLOWED WAS ONLY INCOME DERIVED FROM A BUSINESS OF PROVIDIN G LONG TERM FINANCE AND NOTHING MORE. A DIRECT NEXUS WITH THE BUSINESS OF PROVIDING LONG TERM FINANCE WAS TO BE SHOWN AND IF SUCH NEXUS ITA NO. 101 TO 109/1922//MDS/11 ITA NO. 225 TO 233/2034//MDS/11 9 WAS NOT THERE, THE INCOME WILL NOT BE ELIGIBLE FOR CLAIMING DEDUCTION UNDER SECTION 36(1)(VIII). ACCORDING TO H IM, LD. CIT(A) FELL IN ERROR WHEN HE ATTEMPTED A DISTINCTION BETWE EN HIRE FINANCE INCOME AND LEASE RENTAL INCOME. NEITHER HIRE PURCH ASE INCOME NOR LEASE INCOME HAD ANY DIRECT CONNECTION WITH THE BUSINESS OF PROVIDING LONG TERM FINANCE. RELIANCE WAS PLACED O N THE DECISION OF CO-ORDINATE BENCH IN ITA NO.530 & 531/03, 1497/0 4, 1561 & 1562/06 DATED 20 TH JULY, 2007 IN ASSESSEE'S OWN CASE IN WHICH IT WAS HELD THAT WORD DERIVE USED IN SECTION 3 6(1)(VIII) WOULD NOT BRING UNDER ITS SWEEP, ITEMS OF INCOME WHICH W ERE NOT HAVING IMMEDIATE NEXUS WITH LONG TERM FINANCING BUSINESS. D.R. ALSO PLACED RELIANCE ON THE DECISION OF DELHI BENCH OF T HIS TRIBUNAL IN THE CASE OF TOURISM FINANCE CORPORATION OF INDIA VS . JCIT (2010) 2 ITR (TRIB) 1 AND NATIONAL CO-OPERATIVE DEVELOPMEN T CORPORATION VS. ACIT (2012) 33 CCH 154 (DEL.). FUR THER, ACCORDING TO HIM, EQUITABLE CONSIDERATION WERE OUT OF PLACE WHILE INTERPRETING A TAXING STATUTE AND WHEN THE LANGUAGE WAS CLEAR AND UN-AMBIGUOUS, THERE WAS NO SCOPE FOR IMPORTING INTO THE STATUTE, WORDS, WHICH WERE NOT THERE. IN THIS REGARD RELIANC E WAS PLACED ON THE DECISIONS OF THE HONBLE APEX COURT IN THE C ASE OF CIT VS.ORISSA STATE WAREHOUSING CORPN. 201 ITR 729 AND SMT TARULATA SHYAM & OTHERS VS. CIT 108 ITR 345. ITA NO. 101 TO 109/1922//MDS/11 ITA NO. 225 TO 233/2034//MDS/11 10 10. PER CONTRA, LD. A.R. IN SUPPORT OF HIS APPEAL AND SUPPORTING THE ORDER OF CIT(A) WITH REGARD TO HIS ALLOWANCE OF HIRING INCOME SUBMITTED THAT LONG TERM FINANCE HAD MANY FACETS. I T DID NOT SIMPLY MEAN, DIRECT CASH LOAN, BUT ALSO INCLUDED LOANS, WHICH HELPED ACQUISITION OF ASSETS. ACCORDING TO HIM, L EASE AS WELL AS HIRE AGREEMENTS WERE ONLY FOR PROVIDING FINANCE TO THE M/S.TAMILNADU ELECTRICITY BOARD, WHICH WAS DIRECTLY ACQUIRING THE ASSETS. FURTHER, IT WAS SUBMITTED BY THE A.R THAT ASSETS HIRED OR LEASED OUT TO M/S.TAMILNADU ELECTRICITY BOARD COULD NEVER BE RESUMED BACK. BY VERY NATURE OF SUCH ASSETS, IT CO ULD NOT BE USED ELSEWHERE OTHER THAN IN THE SUB-STATION & DIST RIBUTION AND POWER PROJECTS OF M/S.TNEB. WHEN M/S.TAMILNADU ELE CTRICITY BOARD COULD NOT SATISFY THE RIGOROUS CONDITIONS FOR AVAILING A CASH LOAN, FINANCE WAS PROVIDED TO IT IN AN INDIRECT MA NNER BY HELPING IT PURCHASE THE ASSETS IT REQUIRED, AND PAYING FOR SUCH PURCHASE. STRICT CONSTRUCTION OF THE LEASE AND HIRE PURCHASE AGREEMENTS MADE BY ASSESSING OFFICER WAS OUT OF PLACE. ACCORDI NG TO HIM, COMMERCIAL CONSIDERATION OUGHT HAVE BEEN GIVEN MORE IMPORTANCE. LD. A.R SUBMITTED THAT THE TERMS USED I N SECTION 36(1)(VIII) WERE PROFITS DERIVED FROM BUSINESS OF P ROVIDING LONG TERM FINANCE AND NOT PROFITS DERIVED FROM LONG TER M FINANCE. ITA NO. 101 TO 109/1922//MDS/11 ITA NO. 225 TO 233/2034//MDS/11 11 ACCORDING TO HIM, THERE WAS A SUBTLE DIFFERENCE BE TWEEN PROFIT DERIVED FROM BUSINESS OF PROVIDING LONG TERM FINANC E AND PROFIT DERIVED FROM LONG TERM FINANCE. BUSINESS OF PROVI DING LONG TERM FINANCE INCLUDED ALL TYPE OF FINANCING, INCLUDING I NDIRECT FINANCING BY WAY OF LEASING AND HIRE PURCHASE. RELIANCE WAS PLACED ON THE DECISION OF DELHI BENCH OF THIS TRIBUNAL IN POWER FINANCE CORPORATION LTD. VS. DCIT 10 SOT 190 AND RURAL ELE CTRIFICATION CORPORATION LTD. VS. ACIT, 34 SOT 159. 11. WE HAVE PERUSED THE ORDERS OF THE LOWER AUTHOR ITIES AND HEARD RIVAL CONTENTIONS. WE FIND THAT THE MATTER W AS EARLIER CONSIDERED BY THIS TRIBUNAL FOR VERY SAME ASSESSMEN T YEAR AND REMITTED BACK TO THE ASSESSING OFFICER FOR CONSIDER ATION AFRESH WITH FOLLOWING DIRECTIONS:- THE LEARNED COUNSEL OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE IS SOLELY A LONG TERM LENDING INSTITUTION AND ITS RESOURCES AND APPLICATIONS HAVE NEXUS WITH LONG TERM FINANCE. IT HAS BEEN SUBMITTED THAT DEDUCTION U/S 36(1)(VIII) CONTEMPLAT ES BENEFIT OF DEDUCTION TO BE GIVEN TO APPROVED FINANCIAL CORPORA TIONS ON THE PROFITS DERIVED FROM BUSINESS OF PROVIDING LONG TER M FINANCE AND THE BENEFITS IS NOT LIMITED TO 'PROFIT FROM PROVIDI NG LONG TERM FINANCE' BUT FROM PROFIT DERIVED THERE FROM. FINANC E CAN BE IN MANY WAYS VIZ., LOANS, EQUITIES, HIRE PURCHASE, LEA SE, INVESTMENTS AND DEPOSIT. THESE ALL CAN BE AND ARE IN FACT FOR L ONG TERM. HENCE, THE ENTIRE INCOME IS FROM BUSINESS OF PROVIDING LON G TERM FINANCE AND THE ASSESSEE HAS NO OTHER BUSINESS. ITA NO. 101 TO 109/1922//MDS/11 ITA NO. 225 TO 233/2034//MDS/11 12 THE LEARNED DEPARTMENTAL REPRESENTATIVE IN REBUTTAL OF THE AFORESAID CLAIM PLACED RELIANCE UPON THE SANGUINE P ROVISIONS OF SECTION 36(1)(VIII) AND THE EXPLANATION THERETO WHI CH READS AS UNDER: '(VIII) [IN RESPECT OF ANY SPECIAL RESERVE CREATED [AND MAINTAINED] BY A FINANCIAL CORPORATION WHICH IS ENGAGED IN PROV IDING LONG-TERM FINANCE FOR .. [INDUSTRIAL OR AGRICULTURA L DEVELOPMENT OR DEVELOPMENT OF INFRASTRUCTURE FACIL ITY IN INDIA OR BY A PUBLIC COMPANY FORMED AND REGISTERED IN INDIA WITH THE MAIN OBJECT OF CARRYING ON THE BUSIN ESS OF PROVIDING LONG-TERM FINANCE FOR CONSTRUCTION OR PUR CHASE OF HOUSES IN INDIA FOR RESIDENTIAL PURPOSES, AN AMOUNT NOT EXCEEDING FORTY PER CENT OF THE PROFITS DERIVED FRO M SUCH BUSINESS OF PROVIDING LONG-TERM FINANCE (COMPUTED U NDER THE HEAD ''PROFITS AND GAINS OF BUSINESS OR PROFESS ION [BEFORE MAKING ANY DEDUCTION UNDER THIS CLAUSE]) CA RRIED TO SUCH RESERVE ACCOUNT:] PROVIDED THAT WHERE THE AGGREGATE OF THE AMOUNTS CA RRIED TO SUCH RESERVE ACCOUNT FROM TIME TO TIME EXCEEDS [TWI CE THE AMOUNT OF] THE PAID-UP SHARE CAPITAL [AND OF THE GE NERAL RESERVES] OF THE CORPORATION [OR, AS THE CASE MAY B E, THE COMPANY}, NO ALLOWANCE UNDER THIS CLAUSE SHALL BE M ADE IN RESPECT OF SUCH EXCESS. [EXPLANATION.-IN THIS CLAUSE,- (A) ''FINANCIAL CORPORATION' SHALL INCLUDE A PUBLI C COMPANY AND A GOVERNMENT COMPANY; (B) 'PUBLIC COMPANY SHALL HAVE THE MEANING ASSIGNE D TO IT IN SECTION 3 OF THE COMPANIES ACT, 1956(1 OF 1956); (C) 'GOVERNMENT COMPANY' SHALL HAVE THE MEANING ASSIGNED TO IT IN SECTION 617 OF THE COMPANIES ACT; 1956 (1 OF 1956); [(D) ''INFRASTRUCTURE FACILITY SHALL HAVE THE MEAN ING ASSIGNED TO IT IN CLAUSE (23G)OF SECTION 10:) [(E) LONG-TERM FINANCE MEANS ANY LOAN OR ADVANCE WHERE THE TERMS UNDER WHICH MONEYS ARE LOANED OR ADVANCED PROVIDE FOR REPAYMENT ALONG WITH INTEREST THEREOF DURING A PERIOD OF NOT LESS THAN FIV E YEAR S;] FROM THE READING OF THE AFORESAID, IT IS EVIDENT TH AT THE DEDUCTION ENVISAGED UNDER THIS SECTION PERTAINS TO PROFITS DE RIVED FROM BUSINESS OF PROVIDING LONG TERM FINANCE, WHICH HAS SPECIFICALLY BEEN DEFINED. IN THIS CONTEXT, WE ALSO DRAW SUPPORT FROM EXPOSITION IN H.H. PRINCE AZAM JHA BAHADUR VS. EXPE NDITURE TAX OFFICER 1971 83 ITR 92 (SC) THAT THE ACT IN THE VER Y NATURE OF ITA NO. 101 TO 109/1922//MDS/11 ITA NO. 225 TO 233/2034//MDS/11 13 THINGS CANNOT BE ABSOLUTELY CAST UPON LOGIC. IT IS TO BE READ AND UNDERSTOOD ACCORDING TO ITS LANGUAGE. IF A PLAIN RE ADING OF THE LANGUAGE COMPELS THE COURT TO ADOPT AN APPROACH DIF FERENT FROM THAT DICTATED BY ANY RULE OF LOGIC, THE COURT MAY T HINK OF ADOPTING IT. IT FURTHER TRANSPIRES THAT THE CIRCULAR EXPLAINING THE RATIONALE FOR AMENDMENT .IN SECTION 36(1)(VIII) READS AS UNDER.: 'IT WAS NOTED THAT MANY OF THESE APPROVED FINANCIAL CORPORATIONS/APPROVED PUBLIC COMPANIES HAD DIVERSIF IED THEIR ACTIVITIES AND WERE CLAIMING DEDUCTION UNDER THIS SECTION EVEN IN RESPECT OF THEIR INCOME DERIVED FRO M ACTIVITIES OTHER THAN THOSE SPECIFIED IN THIS SECTI ON. AS THERE WAS NO JUSTIFICATION FOR ALLOWING THE DEDUCTION WIT H REFERENCE TO INCOME FROM OTHER ACTIVITIES OR FROM S OURCES OTHER THAN BUSINESS THE FINANCE ACT, 1995, HAS AMEN DED SECTION 36(1) (VIII) TO LIMIT THE DEDUCTION TO 40 P ER CENT ONLY IN RESPECT OF INCOME DERIVED FROM PROVIDING LO NG TERM FINANCE FOR THE ACTIVITIES SPECIFIED IN SECTION 36( 1)(VIII). NOW, INCOME ARISING FROM OTHER BUSINESS ACTIVITIES OR FROM SOURCES OTHER THAN BUSINESS WILL NOT BE TAKEN INTO ACCOUNT FOR COMPUTING DEDUCTION UNDER SECTION 36(1)(VIII). CONSIDERING THE PRESENT CASE, PARTICULARLY IN THE L IGHT OF THE CBDT CIRCULAR CLARIFYING THE RATIONALE BEHIND THE AMENDM ENT, IT IS EVIDENT THAT THE INTENTION OF PROVIDING DEDUCTION U /S. 36(1)(VIII) IS ONLY IN RESPECT OF INCOME DERIVED FROM PROVIDING LO NG TERM FINANCE FOR THE ACTIVITIES SPECIFIED U/S 36(L)(VIII ). HENCE, THE LEARNED COUNSEL OF THE ASSESSEE'S INTERPOLATION THA T THE WORD 'DERIVED' USED IN THE SECTION WILL BRING OMNIBUS AC TIVITIES OF THE ASSESSEE UNDER THE SWEEP OF THIS SECTION IS NOT ON TERRA FIRMA. AS IS EVIDENT FROM THE AFORESAID CIRCULAR, THE VERY PURPO SE OF BRINGING THIS AMENDMENT WAS TO RESTRICT THIS DEDUCTION AS IN COME DERIVED FROM OTHER DIVERSIFIED ACTIVITIES WERE BEING CLAIME D UNDER IT. UNDER THE CIRCUMSTANCES, THE RELIANCE PLACED BY THE LEARNED COUNSEL OF THE ASSESSEE ON THE WORD 'DERIVED' CANNO T OXYGENATE THE ASSESSEE'S CLAIM. AS HELD BY PRIVY COUNCIL IN C OMMISSIONER OF INCOME TAX VS. RAJA BAHADUR KAMAKHAYA NARAYAN SI NGH & OTHERS (1948) 16 ITR 325, THE WORD 'DERIVED' IS NOT A TERM OF ART. ITS USE IN THE DEFINITION INDEED DEMANDS AN ENQUIRY INTO THE GENEALOGY OF THE PRODUCT BUT THE ENQUIRY SHOULD STO P AS SOON AS THE EFFECTIVE SOURCES ARE DISCOVERED. CONSIDERING THE PRESENT CASE THROUGH THE PRISM OF T HE AFORESAID PRECEDENT, WE FIND THAT IN DETERMINING THE PROFITS ELIGIBLE FOR ITA NO. 101 TO 109/1922//MDS/11 ITA NO. 225 TO 233/2034//MDS/11 14 DEDUCTION UNDER THIS SECTION, ONE HAS TO GO NO FURT HER THAN EXPLANATION 'E' DEFINING 'LONG TERM FINANCE' UNDER THIS SECTION. FROM THE FACTS OF THIS CASE, WE FIND THAT IN DEALIN G WITH THE ELIGIBILITY OF THE DISPUTED INCOME FOR DEDUCTION CO NTEMPLATED U/S 36(1)(VIII), THE LOWER AUTHORITIES HAVE NOT GONE IN TO THIS ASPECT AS TO WHETHER THIS ASPECT OF SECTION IS SATISFIED OR N OT. HENCE, IN THE INTEREST OF JUSTICE, WE RESTORE THIS ISSUE TO THE F ILES OF THE ASSESSING OFFICER TO GIVE A FINDING AS TO WHETHER T HESE ACTIVITIES WOULD COME UNDER EXPLANATION E OF SECTION 36(1)(V III). IT THAT BE SO, THE ASSESSEE WILL BE ELIGIBLE FOR THIS DEDUCTIO N. 12. THE DIRECTION OF THE TRIBUNAL WAS TO CONSIDER WHETHER THE INCOME FROM LEASING AND HIRING FELL WITHIN THE AMBI T OF SECTION 36(1)(VIII) AND ALSO WHETHER SUCH ACTIVITIES CAME W ITHIN THE DEFINITION OF LONG TERM FINANCE GIVEN IN EXPLANATIO N (E) TO SECTION 36(1)(VIII). IN OTHER WORDS, ESSENTIALLY I T WAS REQUIRED TO DECIDE WHETHER SUCH ACTIVITIES OF LEASE AND HIRE UN DERTAKEN BY THE ASSESSEE FELL WITHIN THE DEFINITION OF LONG TE RM FINANCE AND IF IT WERE TO BE CONSIDERED LONG TERM FINANCE WHETHER INC OME FROM SUCH ACTIVITIES COULD BE CONSIDERED AS DERIVED FROM BUSINESS OF PROVIDING LONG TERM FINANCE. FOR DECIDING THESE I SSUES, PRIMARY REQUIREMENT, IN OUR OPINION, IS TO SEE THE AGREEMEN TS BASED ON WHICH ASSESSEE HAD PROVIDED SUCH FACILITIES TO M/S. TAMILNADU ELECTRICITY BOARD OR TO ANY OTHER CUSTOMER, FOR TH AT MATTER. WITHOUT GOING THROUGH TERMS OF THE HIRE AGREEMENT A ND TERMS OF ITA NO. 101 TO 109/1922//MDS/11 ITA NO. 225 TO 233/2034//MDS/11 15 THE LEASE AGREEMENT, IF ONE WAS TO COME TO A CONCL USION THAT IT WAS A SIMPLE CASE OF FINANCING, IT WILL BE TERRA FIGMENTA AND NOT TERRA FIRMA . THE TERMS ENTERED IN BETWEEN THE PARTIES WILL DE CIDE THE NATURE OF THE TRANSACTIONS. SUBSTANCE OF SUCH A GREEMENT WILL SHOW WHETHER THE INTENTION WAS ONLY FINANCING OR TH E INTENTION WAS LEASING OR HIRING. WE ALSO FIND SOME CONTRADICT IONS BETWEEN THE FINDINGS OF THE CIT(A) AND THE FINDINGS OF THE ASSESSING OFFICER. ASSESSING OFFICER STATES IN HIS ORDER THA T ASSESSEE HAD CLAIMED DEPRECIATION BOTH FOR LEASED ASSETS AS WEL L AS HIRED ASSETS, WHEREAS THE CIT(A) IN HIS ORDER SAYS THAT A SSESSEE HAD NOT CLAIMED DEPRECIATION ON ASSETS HIRED OUT. FURT HER, ASSESSING OFFICER MENTIONS IN HIS ORDER THAT HIRE PURCHASE I NCOME WAS CLAIMED BY THE ASSESSEE AS EXEMPT FROM INTEREST TAX , WHEREAS CIT(A) SAYS THAT ASSESSEE HAD PAID INTEREST TAX ON HIRE RECEIPTS. HOWEVER, NONE OF THE LOWER AUTHORITIES WENT INTO TH E AGREEMENTS ENTERED BY THE ASSESSEE WITH ITS CUSTOMERS TO FIND THE TRUE NATURE OF THE TRANSACTIONS. 13. DIFFERENCE BETWEEN A FINANCE LEASE AND OPERAT ING LEASE AND HIRE PURCHASE FINANCE AND SIMPLE HIRING OF GOOD S, HAVE BEEN WELL BROUGHT OUT BY THE DECISION OF HONBLE APEX CO URT IN THE CASE OF M/S.ICDS LTD. VS. CIT ( CIVIL APPEAL NO.3286 TO 3290 OF 2008 ITA NO. 101 TO 109/1922//MDS/11 ITA NO. 225 TO 233/2034//MDS/11 16 DATED 14.01.13). RELEVANCE OF ACCOUNTING STANDARDS- 19 OF INSTITUTE OF CHARTERED ACCOUNTANT OF INDIA, WHILE D ECIDING ON SUCH ISSUES HAS BEEN CLEARLY BROUGHT OUT BY THE SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF INDUS IND BANK VS. ACIT IN (2012) 135 ITD 165. WHAT COMES OUT OF THESE DECISIONS IS THAT NAT URE OF A HIRE AND FOR LEASE HAVE TO BE SEEN BEFORE COMING TO A CO NCLUSION WHETHER THESE WERE MERE OPERATIONAL OR FINANCIAL. NO DOUBT, ASSESSING OFFICER RELIED ON THE DEFINITION OF HIRE PURCHASE AGREEMENT UNDER THE HIRE PURCHASE ACT, 1972 AND DE FINITION OF LEASE UNDER TRANSFER OF PROPERTY ACT, 1882. TH ESE ARE DEFINITIONS IN THE RESPECTIVE ENACTMENTS AND WILL H AVE LITTLE RELEVANCE IF THE TERMS OF AGREEMENTS ENTERED INTO B Y THE PARTIES SHOW A DIFFERENT INTENTION. UNLESS AND UNTIL ALL TH E INGREDIENTS SPECIFIED IN EXPLANATION (E) TO SECTION 36(1)(VIII) ARE SATISFIED, THE TRANSACTION WILL NOT FALL WITHIN THE REACH OF LONG TERM FINANCE. IF THE TRANSACTIONS ARE NOT CONSIDERED AS LONGTERM FI NANCE, THERE IS NO QUESTION OF ANY DEDUCTION BEING GIVEN UNDER S ECTION 36(1)(VIII) OF THE ACT SINCE THE CLAIM GETS OUSTED AT THE THRESHOLD. AN INTERPRETATION OFTEN TAKEN THAT IN CASE OF AMBI GUITY OR DOUBT, BENEFIT ALWAYS WENT TO THE ASSESSEE, IN OUR OPINION , NO LONGER HOLD GOOD IN VIEW OF THE JUDGEMENT OF HONBLE APE X COURT IN THE CASE OF COMMISSIONER OF CENTRAL EXCISE V. HARICHAN D SHRIGOPAL ITA NO. 101 TO 109/1922//MDS/11 ITA NO. 225 TO 233/2034//MDS/11 17 (2011) 1 SCC 236. THEIR LORDSHIPS CLEARLY HELD TH AT A PERSON WHO CLAIMED EXEMPTION OR CONCESSION, IS REQUIRED TO ESTABLISH CLEARLY THAT HE WAS COVERED BY THE PROVISION CONCER NED AND IN THE CASE OF DOUBT OR AMBIGUITY, BENEFIT WOULD GO TO THE STATE. CONSIDERING ALL THESE ASPECTS, WE ARE OF THE OPINIO N THAT MATTER REQUIRES A FRESH LOOK BY THE ASSESSING OFFICER. WE SET ASIDE THE THE ORDERS OF THE AUTHORITIES BELOW AND REMIT THE I SSUES REGARDING CLAIM OF DEDUCTION UNDER SECTION 36(1)(VIII) ON LE ASE INCOME AND HIRE PURCHASE INCOME, BACK TO THE FILE OF ASSESSING OFFICER FOR CONSIDERATION AFRESH IN ACCORDANCE WITH LAW. 14. THE FINDING OF THE ASSESSING OFFICER THAT INTE REST ON SHORT TERM DEPOSITS WAS NOT ELIGIBLE FOR THE DEDUCTION U NDER SECTION 36(1)(VIII) , WHICH WERE CONFIRMED BY THE CIT(A), I N OUR OPINION, IS IN ACCORDANCE WITH LAW. DEPOSITS CAN NEVER BE TREA TED ON PAR WITH LOANS OR ADVANCES. THEREFORE, INTEREST ON DEP OSITS WILL NEVER FALL WITHIN THE DEFINITION OF LONG TERM FINAN CE GIVEN IN EXPLANATION (E) TO SECTION 36(1)(VIII) OF THE ACT. WE DO NOT FIND ANY MERIT IN THIS GROUND TAKEN BY THE ASSESSEE IN I TS APPEAL FOR A.Y. 2007-08. ITA NO. 101 TO 109/1922//MDS/11 ITA NO. 225 TO 233/2034//MDS/11 18 15. REVENUE HAS TAKEN A GROUND REGARDING LEVY OF I NTEREST UNDER SECTION 234D IN THEIR APPEALS FOR ASSESSMENT YEARS 1997- 98, 1999-00, 2000-01, 2001-02, 2002-03, 2003-04 & 2 006-07. LD. CIT(A) HELD THAT SUCH LEVY WAS APPLICABLE ONLY FROM ASSESSMENT YEAR 2004-05 RELYING ON THE DECISION OF DELHI SPECIAL BENCH OF TRIBUNAL IN THE CASE OF ITO VS. M /S.EKTA PROMOTERS PVT LTD. IN 113 ITD 719. HOWEVER, WE FIN D THAT HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. INFRASTRUCTURE DEVELOPMENT FINANCE CO. LTD. 340 IT R 580 HAS HELD THAT WHERE REGULAR ASSESSMENT WAS COMPLETED AF TER THE AMENDED PROVISION CAME INTO OPERATION, ASSESSEE WAS LIABLE TO PAY INTEREST ON THE REFUNDED AMOUNT. THEREFORE, TH E ISSUE OF LEVY OF INTEREST FOR THESE YEARS IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER, FOR VERIFYING THE DATE ON WHICH THE REGULAR ASSESSMENTS WERE COMPLETED FOR THE IMPUGNED ASSESSM ENT YEARS. IF REGULAR ASSESSMENTS WERE COMPLETED AFTER 01.06.03, LEVY OF PENALTY UNDER SECTION 234D WAS JUSTIFIED AN D IF THE REGULAR ASSESSMENT WAS COMPLETED PRIOR TO THAT DATE, THERE COULD NOT BE ANY LEVY OF PENALTY UNDER SECTION 234D OF THE ACT. ORDERED ACCORDINGLY. RELATED GROUND OF THE REVENUE IS ALLOW ED FOR STATISTICAL PURPOSES. ITA NO. 101 TO 109/1922//MDS/11 ITA NO. 225 TO 233/2034//MDS/11 19 16. ONLY OTHER ISSUE LEFT IN REVENUE APPEAL IS A G ROUND IN ITS APPEAL FOR ASSESSMENT YEAR 2006-07, REGARDING DISA LLOWANCE UNDER SECTION 43D OF THE ACT, WHICH WAS DELETED BY THE CIT(A). 17. FACTS APROPOS ARE THAT ASSESSEE HAD ADVANCED A SUM OF ` 300 LAKHS, AS TERM LOAN TO M/S.NEPC MICON LTD., WH O HAD FAILED TO REPAY THE INSTALLMENTS DUE FROM 01.04.1997. ASS ESSEE HAD CLASSIFIED THE DUES AS NON-PERFORMING ASSET IN ITS BOOKS BASED ON RESERVE BANK OF INDIA GUIDELINES. ASSESSEE HAD NOT SHOWN ANY ACCRUAL OF INTEREST ON SUCH TERM LOAN IN ITS AC COUNTS. ASSESSING OFFICER WAS OF THE OPINION THAT SINCE IT WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING, IT WAS MANDATORY T O SHOW THE ACCRUED INTEREST. AS PER THE ASSESSING OFFICER, RB I GUIDELINES WERE ONLY FOR THE PURPOSE OF SUPERVISION, AND MANAG EMENT OF NON BANKING FINANCIAL COMPANIES AND WAS NOT RELEVANT FO R ASCERTAINING INCOME UNDER THE INCOME TAX ACT. THOUGH ASSESSEE E XPLAINED THAT BY VIRTUE OF SEC.43D, IT WAS NECESSARY FOR IT TO OFFER SUCH INTEREST INCOME, ONLY WHEN INTEREST WAS REALIZED, ASSESSING OFFICER WAS NOT IMPRESSED. AN ADDITION WAS MADE. 18. IN ITS APPEAL BEFORE THE CIT(A), ARGUMENT OF ASSESSEE WAS THAT INTEREST WAS NOT AT ALL CREDITED TO THE PROFI T AND LOSS ACCOUNT. ITA NO. 101 TO 109/1922//MDS/11 ITA NO. 225 TO 233/2034//MDS/11 20 WHEN INTEREST WAS NOT AT ALL CREDITED, THERE WAS N O QUESTION OF ACCRUAL, ESPECIALLY SINCE THE ASSESSEE HAD CLASSIFI ED THE LOAN AS NON PERFORMING ASSET. FURTHER, ACCORDING TO THE AS SESSEE, SEC.43D WAS APPLICABLE, SINCE GOVERNMENT OF TAMILNA DU BY G.O. MS. NO.47 DATED 09.01.1991 HAD DECLARED IT AS A STA TE FINANCIAL CORPORATION. LD. CIT(A) WAS APPRECIATIVE OF THESE C ONTENTIONS AND DELETED THE ADDITION MADE BY THE ASSESSING OFF ICER. 19. NOW, BEFORE US, LD. D.R ASSAILING THE ORDER OF LD. CIT(A) SUBMITTED THAT ASSESSEE WAS FOLLOWING MERCANTILE AC COUNTING SYSTEM AND THEREFORE, IT WAS MANDATORY TO ACCOUNT THE INCOME ACCRUED ON LOANS GIVEN BY IT. PARTIES WERE DUTY BO UND TO PAY INTEREST TO THE ASSESSEE AND ASSESSEE WAS LAWFULLY ENTITLED FOR SUCH INTEREST. HENCE, IT COULD NOT SAY THAT THERE WAS NO ACCRUAL OF INCOME. PER CONTRA, LD. A.R. SUPPORTED THE ORD ER OF LD. CIT(A). 20. WE HAVE PERUSED THE ORDERS OF THE LOWER AUTHOR ITIES AND HEARD THE RIVAL CONTENTIONS. THERE IS NO DOUBT TH AT ASSESSEE HAD NOT CHARGED IN ITS BOOKS OF ACCOUNTS ANY INTEREST O N THE LOANS CLASSIFIED BY IT AS NON PERFORMING ASSETS. IT IS N OT A CASE WHERE ASSESSEE HAD CREDITED SUCH INTEREST AND THEN CLAIME D WRITE OFF., ITA NO. 101 TO 109/1922//MDS/11 ITA NO. 225 TO 233/2034//MDS/11 21 ASSESSEE MIGHT HAVE BEEN FOLLOWING MERCANTILE SYSTE M OF ACCOUNTING. HOWEVER, THE PRUDENTIAL NORMS PRESCRI BED BY RBI, FOR NON BANKING FINANCIAL COMPANY UNDER SECTION 45 Q OF THE RBI ACT, MADE IT OBLIGATORY FOR THE ASSESSEE TO CLASSIF Y THE LOANS ON WHICH INTEREST WAS NOT RECEIVED FOR A PERIOD EXCEED ING SIX MONTHS, AS NON-PERFORMING ASSETS. ONCE IT WAS SO CLASSIFIED, INTEREST COULD NOT BE CHARGED IN ITS ACCOUNTS AND T AKEN AS INCOME. JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. ELGI FINANCE LTD (293 ITR 357) HAS HELD THAT ASSES SEE WAS JUSTIFIED IN NOT RECOGNIZING INCOME FROM NON PERFOR MING ASSETS IN CONSONANCE WITH THE NOTIFICATION ISSUED BY RBI. WE ARE OF THE OPINION THAT THIS DECISION OF HONBLE JURISDICTION AL HIGH COURT GOES IN FAVOUR OF THE ASSESSEE. WE THEREFORE, CANN OT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) IN THIS REGARD. 21. TO SUMMARISE THE RESULT, APPEALS OF ASSESSEE F OR ASSESSMENT YEARS 1996-97, 1997-98, 1998-99, 1999-00 , 2000- 01, 2001-02, 2002-03, 2003-04 AND 2006-07 ARE ALLOW ED FOR STATISTICAL PURPOSES WHEREAS ITS APPEAL FOR ASSESSM ENT YEAR 2007-08 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. APPEAL OF REVENUE FOR ASSESSMENT YEARS 1996-97, 1997-98, 1998 -99, 1999-00, 2000-01, 2001-02, 2002-03, 2003-04 & 2007- 08 ARE ITA NO. 101 TO 109/1922//MDS/11 ITA NO. 225 TO 233/2034//MDS/11 22 ALLOWED FOR STATISTICAL PURPOSES WHEREAS ITS APPEAL FOR ASSESSMENT YEAR 2006-07 IS PARTLY ALLOWED FOR STATI STICAL PURPOSES. ORDER PRONOUNCED ON THURSDAY, THE 21 ST MARCH, 2013 AT CHENNAI. SD/- SD/- (V.DURGA RAO) (ABRAHAM P GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED 21 ST MARCH, 2013 . K S SUNDARAM COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE ITA NO. 101 TO 109/1922//MDS/11 ITA NO. 225 TO 233/2034//MDS/11 23