DCIT, Central Circle - 7, Hyderabad V. M/s. My Home Industries Ltd, Hyderabad

ITA 1032/HYD/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2831 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 26-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M RAVINDRA SAI
• Assessee Lawyers: S RAMA RAO
• Keywords: Capital asset; Depreciation; Business expenditure; Bad and doubtful debts; Capital expenditure
• Section: 43B; 143(3); 153A; 234B; 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER S.NO. ITA NO. AY APPELLANT RESPONDENT 1. 932/H/11 2004-05 MY HOME INDUSTRIES LTD., HYDERABAD. (PAN AABCM9480C) DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 7, HYDERABAD. 2. 1249/H/11 2004-05 DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 7, HYDERABAD. MY HOME CEMENT INDUSTRIES LTD., HYDERABAD. (PAN AABCM9480C) 3. 1032/H/11 2004-05 -DO- -DO- 4. 933/H/11 2005-06 MY HOME INDUSTRIES LTD., HYDERABAD. (PAN AABCM9480C) DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 7, HYDERABAD. 5. 934/H/11 2006-07 -DO- -DO- 6. 1033/H/11 2006-07 DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 7, HYDERABAD. MY HOME INDUSTRIES LTD., HYDERABAD. (PAN AABCM9480C) AND C.O. NO. AY CROSS OBJECTOR RESPONDENT 7. 73/H/12 (IN ITA NO. 1249/H/11) 2004-05 DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 7, HYDERABAD MY HOME CEMENT INDUSTRIES LTD., HYDERABAD. ASSESSEE BY : SHRI S. RAMA RAO REVENUE BY : SHRI M. RAVINDRA SAI DATE OF HEARING : 14/03/2013 DATE OF PRONOUNCEMENT : 2 9/04/2013 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THESE APPEALS FILED BY THE ASSESSEE AS WELL AS REV ENUE ARE DIRECTED AGAINST SEPARATE ORDERS OF CIT(A) FOR THE ASSESSMENT YEARS 2004-05 TO 2006-07. SINCE IDENTICAL ISSUES AR E INVOLVED IN ITA NOS. 932, 933, 934 & 1032 & 1033/H11 AND C.O.7 3/H/12 MY HOME INDUSTRIES LTD. 2 THESE APPEALS, THEY WERE CLUBBED AND HEARD TOGETHER , THEREFORE, A COMMON ORDER IS PASSED FOR THE SAID OF CONVENIENC E. THE ASSESSEE ALSO FILED CO IN ITA NO. 1249/H/11. ITA NO. 932/H/11 APPEAL BY THE ASSESSEE FOR AY 20 04-05. 2. THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER OF THE AO PASSED U/S 143(3) R.W.S. 153A OF THE IT ACT, WHEREI N THE TOTAL INCOME WAS DETERMINED AT RS. 12,94,48,637/- BEFORE SETTING OFF OF BROUGHT FORWARD LOSSES AND DEPRECIATION. THE BOO K PROFIT WAS ALSO DETERMINED AT RS. 26,00,20,143/- BY MAKING CER TAIN ADDITIONS. AGAINST THE ORDER OF THE AO, THE ASSESSE E PREFERRED APPEAL BEFORE THE CIT(A). 3. GROUND NO. 1 AND 6 ARE GENERAL IN NATURE. 4. GROUND NO. 2 IS DIRECTED AGAINST THE ACTION OF T HE CIT(A) IN HOLDING THAT THE EXPENDITURE ON MAINTENANCE OF SOFT WARE OF RS. 13,50,000/- IS CAPITAL IN NATURE. 5. IT WAS SUBMITTED BY THE AR THAT THE ASSESSEE ACT UALLY SPENT THE ABOVE AMOUNT FOR GETTING THE COMPUTER SOFTWARE PROGRAMME AND THE ASSESSEE HAD INCURRED THE SAID EXPENDITURE. SINCE THE ASSESSEE COULD NOT MAKE USE OF THE SAID SOFTWARE PR OGRAMME, THE ASSESSEE HAD CLAIMED THE SAID EXPENDITURE AS NORMAL BUSINESS EXPENDITURE. THE AO DID NOT ACCEPT THE SAID CLAIM O F THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAD INCURRED THE EX PENDITURE FOR DEVELOPMENT OF SOFTWARE PROGRAMME AND, THEREFORE, T HE SAME WAS TREATED AS CAPITAL EXPENDITURE. HENCE, HE HAD D ISALLOWED THE ASSESSEES CLAIM. ON APPEAL, THE CIT(A) WAS OF THE VIEW THAT THE ASSESSEE HAD UTILIZED THE COMPANYS FUNDS FOR DEVEL OPMENT OF SOFTWARE PROGRAMME FOR THE PURPOSE OF ASSESSEE COMP ANY. HE, ITA NOS. 932, 933, 934 & 1032 & 1033/H11 AND C.O.7 3/H/12 MY HOME INDUSTRIES LTD. 3 THEREFORE, HELD THAT THE AO HAD RIGHTLY TREATED THE EXPENDITURE AS CAPITAL EXPENDITURE AND HENCE, HE CONFIRMED THE ACT ION OF THE AO. 6. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 7. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT ACCORDING TO THE PROVISIONS OF SECTION 43(6), THE W DV IS TO BE INCREASED BY THE ACTUAL COST OF ANY ASSET OPERATING WITHIN THAT BLOCK AND ACQUIRED DURING THE PREVIOUS YEAR AND, HE NCE, THERE IS NO RESTRICTION THAT THE ASSET SHOULD HAVE BEEN USED DURING THE YEAR FOR THE PURPOSE OF INCLUSION IN THE WDV. HE AR GUED THAT IN VIEW OF THE DEFINITION OF THE WORD WDV, THE EXPEN DITURE INCURRED IN ACQUISITION OF A CAPITAL ASSET IS ELIGIBLE FOR D EPRECIATION. ALTERNATIVELY, THE LEANED COUNSEL SUBMITTED THAT TH E SAID EXPENDITURE SHOULD BE ALLOWED AS REVENUE EXPENDITUR E. 8. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORD AS WELL AS GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE CONFIRM THE ORDER OF THE AO AND CIT(A) IN TREATING THE EXPENDITURE ON MAINTENANCE OF SOFTWARE OF RS. 13,50 ,000/- AS CAPITAL EXPENDITURE AND ALLOW DEPRECIATION AT 60% , ACCORDING TO THE TABLES OF RATES AT WHICH DEPRECIATION IS ADMISS IBLE FOR ASSESSMENT YEAR IN APPEAL THE RATE OF DEPRECIATION FOR COMPUTER AND COMPUTER SOFTWARE IS AT 60%. 10. GROUND NO. 3, 4 & 5 ARE DIRECTED AGAINST THE AC TION OF THE CIT(A) IN HOLDING THAT THE PROVISION FOR UNPAID GRA TUITY AMOUNTING TO RS. 4,33,325/-, THE PROVISION FOR BONUS OF RS. 17,60,854/- AND ITA NOS. 932, 933, 934 & 1032 & 1033/H11 AND C.O.7 3/H/12 MY HOME INDUSTRIES LTD. 4 THE PROVISION FOR DOUBTFUL DEBTS OF RS. 40,24,034/- ARE TO BE ADDED FOR WORKING OUT BOOK PROFIT U/S 115JB OF THE IT ACT. 11. THE ASSESSEE COMPANY HAD DISCLOSED THE BOOK PRO FIT AT RS. 25,38,01,930/-. THE AO HAD MADE AN ADDITION OF RS. 17,60,854/- TOWARDS PROVISION FOR BONUS, RS. 4,33,325/- TOWARDS PROVISION FOR GRATUITY AND RS. 40,24,34/- TOWARDS PROVISION FOR D OUBTFUL DEBTS ON THE GROUND THAT THE LIABILITY TOWARDS THE BONUS, GRATUITY AND DOUBTFUL DEBTS ARE NOT ASCERTAINED LIABILITIES. IT WAS THE CONTENTION OF THE AO THAT THE ASSESSEE HAD CLAIMED THE PROVISION FOR BONUS, GRATUITY AND DOUBTFUL DEBTS THOUGH IT IS NOT ASCERTAINED LIABILITIES. THE ASSESSEE HAD MADE A PROVISION FOR BONUS, GRATUITY AND DOUBTFUL DEBTS WHICH THE ASSESSEE HAD ADDED BAC K WHILE COMPUTING THE NORMAL COMPUTATION OF INCOME. THE ASS ESSEE HOWEVER HAD NOT ADDED THE SAME WHILE COMPUTING THE INCOME U/S 115JB OF THE ACT. THEREFORE, THE AO HAD ADDED THIS AMOUNT WHILE COMPUTING THE PROFITS U/S 115JB. 12. ON APPEAL, BEFORE THE CIT(A) THE CONTENTION OF THE AR OF THE ASSESSEE WAS THAT THE AO WAS NOT JUSTIFIED IN ADDI NG BACK THE CLAIM OF PROVISIONS TOWARDS BONUS, GRATUITY, AND DO UBTFUL DEBTS. IT WAS ALSO CONTENDED BY THE AR OF THE ASSESSEE THA T THE ASSESSEE HAD TO CLAIM THE SAID PROVISIONS SINCE THE LIABILITY ARISES DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR. HE SUBMITTED THAT THE PROVISION FOR BONUS, GRATUITY, A ND DOUBTFUL DEBTS COULD NOT BE DEBITED TO PROFIT & LOSS ACCOUNT ONLY BECAUSE AS PER THE SECTION 43B OF THE ACT AND, THEREFORE, W HILE COMPUTING THE NORMAL TOTAL INCOME OF THE ASSESSEE IN THE NORM AL COURSE OF PROVISIONS, THE UNPAID BONUS, GRATUITY AND DOUBTFUL DEBTS HAD BEEN ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE . HE FURTHER SUBMITTED THAT SUCH UNPAID BONUS, GRATUITY AND DOUB TFUL DEBTS, ITA NOS. 932, 933, 934 & 1032 & 1033/H11 AND C.O.7 3/H/12 MY HOME INDUSTRIES LTD. 5 WHICH ARE CLAIMED AS BONUS, GRATUITY AND DOUBTFUL D EBTS ARE ASCERTAINED LIABILITIES, THE AO SHOULD HAVE ALLOWED THE SAID LIABILITIES AND SHOULD NOT HAVE BEEN ADDED WHILE CO MPUTING THE PROFIT U/S 155JB OF THE ACT. 13. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESS EE, THE CIT(A) HELD THAT WHILE COMPUTING THE BOOK PROFIT U/ S 115JB OF THE ACT, THE PROVISIONS FOR THE LIABILITIES WHICH ARE N OT ASCERTAINED LIABILITIES HAD TO BE ADDED BACK. THE CIT(A) FOLLOW ED THE DECISION OF THE APEX COURT IN THE CASE OF STATE BANK OF PATI ALA VS. CIT, 219 ITR 706 (SC) WHEREIN IT HAS BEEN HELD AS FOLLOW S: IF THE SUMS SET APART IN THE BALANCE SHEET ARE ONLY THE PROVISIONS. THE ASSESSEE WILL NOT BE ENTITLED TO TH E RELIEF CLAIMED BY IT. IN VIEW OF THE RATIO LAID DOWN BY THE APEX COURT IN THE CASE OF STATE BANK OF PATIALA (SUPRA), THE CIT(A) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER ON THIS ISUSE. 14. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 15. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORD AS WELL AS GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE FOLLOWING DECISIONS: I) CIT VS. ESCHJAY FORGINGS PVT. LTD., 251 ITR 15. II). APOLLO TYRES LTD. VS. CIT, 255 ITR 273 (SC) WH EREIN THE APEX COURT HELD THAT THE ACCOUNTS PREPARED IN ACCOR DANCE WITH THE PROVISIONS OF THE COMPANIES ACT CANNOT BE DISTURBED BY THE AO. III) CIT VS. HELWETT PACKARD INDIA, 314 ITR 55 WHER EIN IT IS HELD THAT THE PROVISION FOR GRATUITY CANNOT BE ADDE D FOR THE PURPOSE OF ARRIVING AT THE BOOK PROFIT. ITA NOS. 932, 933, 934 & 1032 & 1033/H11 AND C.O.7 3/H/12 MY HOME INDUSTRIES LTD. 6 IV) CIT VS. ILPEA PARAMOUNT PVT. LTD., 336 ITR 54 W HEREIN IT IS HELD THAT THE PROVISION FOR GRATUITY CANNOT BE A DDED. 16. IN VIEW OF THE RATIOS LAID DOWN IN THE AFORESAI D COURTS, WE HOLD THAT THE PROVISION FOR GRATUITY AND PROVISION FOR BONUS CANNOT BE ADDED FOR THE PURPOSE OF ARRIVING AT THE BOOK PR OFIT U/S 115JB OF THE IT ACT. 17. WITH REGARD TO THE PROVISION FOR BAD AND DOUBTF UL DEBTS, IT IS OBSERVED THAT THE PROVISIONS OF SEC. 115J ARE RETRO SPECTIVELY AMENDED AGAINST THE ASSESSEE. THEREFORE, WE DISMISS THE GROUND RAISED BY THE ASSESSEE WITH REGARD TO THE PROVISION FOR BAD AND DOUBTFUL DEBTS. 18. THE ASSESSEE HAS RAISED AN ADDITIONAL GROUND WI TH REGARD TO THE APPLICATION OF THE PROVISIONS OF SECTION 153A W HEN THE INCOME IS DETERMINED U/S 143(3) I.E. THE REGULAR ASSESSMEN T AND THE INCOME DETERMINED U/S 153A ARE THE SAME. THIS GROU ND HAS NOT BEEN PRESSED BY THE LEARNED COUNSEL FOR THE ASSESSE E AT THE TIME OF HEARING BEFORE US AND, THEREFORE, THE SAME IS DI SMISSED AS NOT PRESSED. 19. IN THE RESULT, APPEAL OF THE ASSESSEE BEING ITA NO. 932/HYD/2011 IS PARTLY ALLOWED. ITA NO. 1249/H/11 APPEAL BY THE REVENUE FOR 2004- 05 20. GROUND NOS. 1 & 5 ARE GENERAL IN NATURE. 21. GROUND NOS. 2 & 3 ARE WITH REGARD TO THE DISALL OWANCE OF RS. 3 LAKHS BEING 1/5 TH OF THE TOTAL EXPENSES INCURRED IN CONNECTION WITH OBTAINING PERMISSION FOR INCREASE IN AUTHORIZE D SHARE CAPITAL FROM THE REGISTRAR OF COMPANIES. ITA NOS. 932, 933, 934 & 1032 & 1033/H11 AND C.O.7 3/H/12 MY HOME INDUSTRIES LTD. 7 22. IT WAS THE SUBMISSION OF THE AR OF THE ASSESSEE BEFORE THE CIT(A) THAT THE AO HAD WRONGLY DISALLOWED THE EXPEN DITURE CLAIMED U/S 35D OF THE IT ACT AT RS. 3,00,000/- BEI NG 1/5 TH OF TOTAL EXPENSES OF RS. 15,00,000/-. IT WAS THE CONTE NTION OF THE AR OF THE ASSESSEE THAT THE ASSESSEE HAD INCURRED THE ABOVE EXPENSES WITH REGISTRAR OF COMPANIES IN CONNECTION WITH INCREASE IN AUTHORIZED SHARE CAPITAL AND, THEREFORE, THE AO WAS NOT JUSTIFIED TO DISALLOW THE EXPENSES INCURRED TOWARDS FEES PAID TO REGISTRAR OF COMPANIES AS THE AO HAD IGNORED THE FA CT THAT THE EXPENDITURE IS ONLY IN CONNECTION WITH INCREASE IN AUTHORIZED SHARE CAPITAL WHICH IS ALLOWABLE U/S 35D OF THE IT ACT. 23. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESS EE, THE CIT(A) HELD THAT THE EXPENSES WERE INCURRED IN CONN ECTION WITH REGISTRAR OF COMPANIES TOWARDS INCREASE IN SHARE CA PITAL, THEREFORE, THE AO WAS NOT JUSTIFIED IN DISALLOWING THE EXPENSES WHICH IS LEGALLY ALLOWABLE U/S 35D OF THE ACT. HE, THEREFORE, ALLOWED THE EXPENSES CLAIMED BY THE ASSESSEE. 24. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 25. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORD. WE FIND THAT THE ISSUE IS SQUARELY COVERED BY THE DECI SION OF THE JURISDICTIONAL TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2003-04 IN ITA NO. 798/HYD/2004 VIDE ORDER DATED 06/02/2009 WH EREIN THE COORDINATE BENCH HELD AS FOLLOWS: 9. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THERE IS NO DISPUTE THAT THE ASSESSEE HAS CLAIMED A DEDUCTION OF RS. 3,00,000/- ON ACCOUNT OF FEES PAID TO THE REGISTRAR OF COMPANIES FOR OBTAINING PE RMISSION TO INCREASE ITS AUTHORIZED SHARE CAPITAL. THE ASSES SEE CLAIMED THAT THE AMOUNT PAID IS DEDUCTIBLE U/S 35D( 2)(C)(III) OF THE ACT. THE ABOVE CLAIM WAS NEGATIVE BY THE AO AND THE ITA NOS. 932, 933, 934 & 1032 & 1033/H11 AND C.O.7 3/H/12 MY HOME INDUSTRIES LTD. 8 LD. CIT(A). AFTER CONSIDERING THE DECISIONS RELIED ON BY THE REVENUE, WE FIND THAT THE ISSUE IS SQUARELY COVERED AGAINST THE ASSESSEE AND IN FAVOUR OF REVENUE BY THE DECISI ONS CITED BY THE AO IN HIS ASSESSMENT ORDER. IN CIT VS. HINDU STAN INSECTICIDES LTD., [2001] 250 ITR 338 (DEL), IT HAS BEEN HELD AT PAGE 338 (HEADNOTES) AS UNDER: HELD, (I) THAT THE EXPENDITURE OF RS. 1,00,500/- ON ACCOUNT OF FEES PAID BY THE ASSESSEE TO THE REGISTR AR OF COMPANIES FOR INCREASING THE AUTHORIZED SHARE CAPIT AL OF THE COMPANY WAS CAPIAL EXPENDITURE. PUNJAB STATE INDUSTRIAL DEVELOPMENT CORPORATION LTD . VS. CIT [1997] 225 ITR 792 (SC) AND BROOKE BOND INDIA LTD., V. CIT [1997] 225 ITR 798 (SC) FOLLOWED . (II) THAT ITEMS 1 AND 2 OF THE TENTH SCHEDULE TO TH E COMPANIES ACT, 1956, WHICH PRESCRIBE THE FEES PAYAB LE TO THE REGISTRAR OF COMPANIES FOR REGISTRATION OF N EW COMPANIES, OPERATE IN A CONCEPTUALLY AND CONTEXTUAL LY DIFFERENT FIELD FROM ITEM 3 WHICH DEALS WITH FEES F OR INCREASE OF SHARE CAPITAL. SECTION 35D(2)(C)(III) D EALS WITH EXPENDITURE INCURRED BY WAY OF FEES FOR REGISTRATION OF A COMPANY UNDER THE ACT. FEES PAID UNDER ITEM 3 OF THE TENTH SCHEDULE CANNOT BE STATED TO BE FEES PAID FOR REGISTERING A COMPANY. THEREFORE, SECTION 35D WAS NOT APPLICABLE. CIT VS. KISENCHAND CHELLARAM (INDIA) PVT. LTD., [19 81] 130 ITR 385 (MAD) REFERRED TO. IN THE ABSENCE OF ANY DISTINGUISHABLE FEATURE BROUG HT ON RECORD BY THE LD. COUNSEL FOR THE ASSESSEE, WE RESPECTFULLY FOLLOWING THE ABOVE DECISION, HOLD THA T THE ASSESSEE IS NOT ENTITLED TO THE DEDUCTION OF RS. 3,00,000/- U/S 35D(2)(C)(III) OF THE ACT AND ACCORD INGLY THE ORDER PASSED BY THE LD. CIT(A) UPHOLDING THE DISALLOWANCE IS UPHELD. THE GROUND TAKEN BY THE ASSESSEE IS THEREFORE REJECTED. 26. SINCE THE ISSUE UNDER CONSIDERATION IS IDENTICA L TO THE ONE DECIDED BY THE COORDINATE BENCH IN ASSESSEES OWN C ASE FOR AY 2003-04 (SUPRA), RESPECTFULLY FOLLOWING THE SAME, W E SET ASIDE THE ORDER OF THE CIT(A) AND ALLOW THE GROUND OF APP EAL OF THE REVENUE. ITA NOS. 932, 933, 934 & 1032 & 1033/H11 AND C.O.7 3/H/12 MY HOME INDUSTRIES LTD. 9 27. GROUND NO. 4 IS WITH REGARD TO ALLOWABILITY OF DEPRECIATION ON THE EXPENDITURE ON THE SOFTWARE. IN ASSESSEES A PPEAL BEING ITA NO. 932/H/11 WE HAVE HELD THAT THE SAME TO BE C APITAL IN NATURE AND ALLOWED DEPRECIATION AT 60%, WE DISMISS THIS GROUND RAISED BY THE REVENUE. 28. IN THE RESULT, APPEAL OF THE REVENUE BEING ITA NO. 1249/H/11 IS PARTLY ALLOWED. C.O. NO. 73/H/12 IN ITA NO. 1249/H/11 BY THE DEPA RTMENT FOR AY 2004-05 29. SINCE WE HAVE ALREADY DECIDED THE APPEAL BEING ITA NO. 932/H/11 BY THE ASSESSEE FOR AY 2004-05 AND WE FIND THAT THE C.O. AGAINST THE ORDER U/S 143(3) OF THE IT ACT AND ALSO THAT THE AO DETERMINED THE SAME INCOME U/S 153A AND SINCE WE HAVE ALREADY DECIDED THE APPEAL ITA NO. 932/H/11, WHICH IS AGAINST THE ORDER U/S 143(3) READ WITH SECTION 153A, WE DIS MISS THE C.O. AS REDUNDANT. 30. IN THE RESULT, THE C.O. FILED BY THE REVENUE IS DISMISSED. ITA NO. 1032/H/11 APPEAL BY THE REVENUE FOR AY 2 004-05 31. THIS APPEAL IS PASSED U/S 143(3) READ WITH SECT ION 153A OF THE IT ACT. 32. GROUND NOS. 1 & 5 ARE GENERAL IN NATURE, HENCE, NO ADJUDICATION IS REQUIRED. 33. GROUND NOS. 2 &3 ARE WITH REGARD TO THE DISALLO WANCE OF RS. 3 LAKHS BEING 1/5 TH OF THE TOTAL EXPENSES INCURRED IN CONNECTION ITA NOS. 932, 933, 934 & 1032 & 1033/H11 AND C.O.7 3/H/12 MY HOME INDUSTRIES LTD. 10 WITH OBTAINING PERMISSION FOR INCREASE IN AUTHORIZE D SHARE CAPITAL FROM THE REGISTRAR OF COMPANIES. 34. SIMILAR GROUND HAS BEEN DECIDED BY US IN REVENU E APPEAL NO. 1249/HYD/11 VIDE PARAS 21 TO 26 (SUPRA) WHEREIN FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2003- 04, THE GROUND OF APPEAL OF THE REVENUE IS ALLOWED. RESPECTFULLY FOLLOWING THE CONCLUSIONS DRAWN THEREIN, THIS GROUN D OF APPEAL OF THE REVENUE IS ALLOWED. 35. GROUND NO. 4 IS WITH REGARD TO CHARGING OF INTE REST U/S 234B AND 234C. THE LEARNED DR RELIED ON THE ORDER OF THE HONBLE SUPREME COURT IN THE CASE OF JCIT VS. ROLTA INDIA L TD., 330 ITR 470. THUS, IT IS CONCLUDED THAT INTEREST UNDER SECT IONS 234B AND 234C SHALL BE PAYABLE ON FAILURE TO PAY ADVANCE TAX IN RESPECT OF TAX PAYABLE UNDER SECTION 115JA & 115JB OF THE ACT. THUS, THIS GROUND OF APPEAL IS ALLOWED. 36. IN THE RESULT, APPEAL OF THE REVENUE BEING ITA NO. 1032/H/11 IS ALLOWED. ITA NO. 933/H/11 AND 934/H/11 APPEALS BY THE ASSES SEE FOR AY 2005-06 AND 2006-07 37. THE GROUNDS RAISED BY THE ASSESSEE IN THESE TWO APPEALS ARE SIMILAR IN NATURE, THEREFORE, THE SAME ARE TO BE DE CIDED TOGETHER. 38. GROUND NOS. 1 & 3 ARE GENERAL IN NATURE, HENCE, NO ADJUDICATION IS REQUIRED. 39. GROUND NO.2 , IN BOTH THE APPEALS, ARE WHETHER THE PROVISION FOR BONUS, AND PROVISION TOWARDS GRATUITY ARE TO BE ADDED FOR WORKING THE BOOK PROFIT U/S 115JB F THE ACT. ITA NOS. 932, 933, 934 & 1032 & 1033/H11 AND C.O.7 3/H/12 MY HOME INDUSTRIES LTD. 11 40. SIMILAR GROUND HAS BEEN DECIDED BY US IN AY 200 4-05 IN ITA NO. 932/H/11 VIDE PARAS 10 TO 16 (SUPRA) WHEREIN WE HAVE HELD THAT PROVISION FOR GRATUITY AND PROVISION FOR BONUS CANNOT BE ADDED FOR THE PURPOSE OF ARRIVING AT THE BOOK PROFI T U/S 115JB OF THE IT ACT. THUS, THIS GROUND OF APPEAL IN BOTH TH E YEARS UNDER CONSIDERATION IS ALLOWED. 41. IN THE RESULT, THE APPEALS BEING ITA NO. 933 & 934/H/11 ARE ALLOWED. ITA NO. 1033/H/11 APPEAL BY THE REVENUE FOR AY 20 06-07. 42. GROUND NOS. 1 & 5 ARE GENERAL IN NATURE, HENCE , NO ADJUDICATION IS REQUIRED. 43. GROUND NOS. 2 &3 ARE WITH REGARD TO THE DISALLO WANCE OF RS. 3 LAKHS BEING 1/5 TH OF THE TOTAL EXPENSES INCURRED IN CONNECTION WITH OBTAINING PERMISSION FOR INCREASE IN AUTHORIZE D SHARE CAPITAL FROM THE REGISTRAR OF COMPANIES. 44. SIMILAR GROUND HAS BEEN DECIDED BY US IN REVENU E APPEAL NO. 1249/HYD/11 VIDE PARAS 21 TO 26 (SUPRA) WHEREIN FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2003- 04, THE GROUND OF APPEAL OF THE REVENUE IS ALLOWED. RESPECTFULLY FOLLOWING THE CONCLUSIONS DRAWN THEREIN, THIS GROUN D OF APPEAL OF THE REVENUE IS ALLOWED. 45. GROUND NO. 4 IS WITH REGARD TO CHARGING OF INTE REST U/S 234B AND 234C. SIMILAR GROUND HAS BEEN DECIDED BY US IN ITA NO. 1032/H/11 VIDE PARA NO. 35 (SUPRA). RESPECTFULLY FO LLOWING THE CONCLUSIONS DRAWN THEREIN, WE ALLOW THIS GROUND OF APPEAL. ITA NOS. 932, 933, 934 & 1032 & 1033/H11 AND C.O.7 3/H/12 MY HOME INDUSTRIES LTD. 12 46. IN THE RESULT, APPEAL OF THE REVENUE BEING ITA NO. 1033/H/11 IS ALLOWED. 47. TO SUM UP, ALL THE APPEALS UNDER CONSIDERATION ARE DECIDED AS FOLLOWS: 1. ITA NO. 932 BEING ASSESSEES APPEAL IS PARTLY A LLOWED. 2. ITA NOS. 933 & 934/H/11 BEING ASSESSEES APPEAL S ARE ALLOWED. 3. ITA NO. 1249/H/11 BEING REVENUE APPEAL IS PARTLY ALLOWED. 3. ITA NOS. 1032 & 1033/H/11 BEING REVENUE APPEALS ARE ALLOWED. 4. C.O. NO. 73/H/12 RAISED BY THE REVENUE IS DISMIS SED. PRONOUNCED IN THE OPEN COURT ON 29/04/2013. SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGH AVAN) ACCOUNTANT MEMBER JUDICIAL MEMBE R HYDERABAD, DATED: 29 TH APRIL, 2013. KV COPY TO:- 1) MY HOME INDUSTRIES LTD., C/O S. RAMA RAO, ADVOC ATE, 3-6-643, SHRIYAS ELEGANCE, FLAT NO. 102, ST. NO. 9 , HIMAYATNAGAR, HYDERABAD 29. 2) DCIT, CENTRAL CIRCLE - 7, HYDERABAD 3) CIT(A)-VII, HYDERABAD 4) CIT(CENTRAL), HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., H YDERABAD. S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK ITA NOS. 932, 933, 934 & 1032 & 1033/H11 AND C.O.7 3/H/12 MY HOME INDUSTRIES LTD. 13 9 DATE OF DISPATCH OF ORDER