Essel Mining & Industries Limited, Kolkata V. D.C.I.T Cir - 5,kolkata, Kolkata

ITA 1069/KOL/2013

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3531 (ITAT-KOLKATA)
• Duration Of Justice: 5 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 12-04-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 06-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P K SRIHARI
• Assessee Lawyers: D S DAMLE
• Keywords: Earning of tax free income; Proportionate interest; Question of law
• Section: 14A; 10B

Judgement Text

1 ITA NOS. 1069/KOL/2013, 1004/KOL/2014, 2064/KOL/2013 & 1294/KOL/2014 ESSEL MINING & INDUSTRIES LTD., AYS 2009-10 & 2010- 11 , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA ( ) . . , . ' # $% % , '( ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 1069/KOL/2013 ASSESSMENT YEAR: 2009-10 & I.T.A. NO. 1004/KOL/2014 ASSESSMENT YEAR: 2010-11 ESSEL MINING & INDUSTRIES LTD. (PAN: AAACE6607L) VS. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-5, KOLKATA. APPELLANT RESPONDENT & I.T.A. NO. 2064/KOL/2013 ASSESSMENT YEAR: 2009-10 & I.T.A. NO. 1294/KOL/2014 ASSESSMENT YEAR: 2010-11 DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-5, KOLKATA VS. ESSEL MINING & INDUSTRIES LTD. APPELLANT RESPONDENT DATE OF HEARING 16.07.2018 DATE OF PRONOUNCEMENT 21.08.2018 FOR THE ASSESSEE SHRI D. S. DAMLE, FCA FOR THE REVENUE SHRI P. K. SRIHARI, CIT, DR ORDER PER SHRI A.T.VARKEY, JM THESE ARE CROSS APPEALS PREFERRED BY THE ASSESSEE A ND REVENUE AGAINST THE ORDER OF LD. CIT(A)-6, KOLKATA DATED 18.02.2013 (FOR AY 2009 -10) AND DATED 21.03.2014 (FOR AY 2010-11). 2 ITA NOS. 1069/KOL/2013, 1004/KOL/2014, 2064/KOL/2013 & 1294/KOL/2014 ESSEL MINING & INDUSTRIES LTD., AYS 2009-10 & 2010- 11 2. FIRST WE TAKE UP ASSESSEES APPEAL FOR AY 2009 -10 IN ITA NO. 1069/KOL/2013. GROUND NOS. 1 TO 3 ARE DIRECTED AGAINST THE ACTION OF THE LD. CIT(A) CONFIRMING THE DISALLOWANCE AGGREGATING TO RS.19,81,76,000/- U/S. 14A OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) READ WITH RU LE 8D OF THE INCOME-TAX RULES, 1962 (HEREINAFTER REFERRED TO AS THE RULES). 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE HAD DERIVED DIVIDEND INCOME OF RS.14,48,18,000/- DURING THE RELEVANT YEAR WHICH WA S CLAIMED EXEMPT U/S. 10(34) OF THE ACT. IN THE RETURN OF INCOME THE ASSESSEE HAD SUO MOTO COMPUTED AND DISALLOWED A SUM OF RS.7,24,404/- U/S. 14A OF THE ACT AS EXPENSES INCUR RED IN RELATION TO EARNING OF EXEMPT INCOME. THE AO BY APPLYING RULE 8D OF THE RULES MA DE DISALLOWANCE OF RS.23,44,12,765/- IN THE FOLLOWING MANNER: RULE 8D(2)(I) DIRECT EXPENSES NIL RULE 8D(2)(II) INTEREST RS.21,36,61,350/- RULE 8D(2)(III) ADMINISTRATIVE EXPENSES RS. 2,07 ,51,415/- RS.23,44,12,765/- AGGRIEVED BY THE DISALLOWANCE COMPUTED BY THE AO, T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO IN PRINCIPLE CONFIRMED T HE ADDITION MADE BY THE AO U/S. 14A OF THE ACT TO THE TOTAL INCOME BUT RECTIFIED THE ER RORS WHICH HAD CREPT INTO THE COMPUTATION OF DISALLOWANCE IN TERMS OF RULE 8D OF THE RULES MA DE BY THE AO AND HENCE, CONFIRMED THE ADDITION U/S. 14A OF THE ACT TO THE EXTENT OF RS.19 ,81,76,000/- WHICH, INTER-ALIA, INCLUDED A SUM OF RS.17,99,25,000/- UNDER RULE 8D(2)(II) AND R S.182.51 LACS UNDER RULE 8D(2)(III) OF THE RULES. AGGRIEVED AGAINST THE ORDER OF LD. CIT( A), ASSESSEE IS BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WITH REGARD TO THE DISALLOWANCE OF PROPO RTIONATE INTEREST OF RS.17,99,25,000/- CONFIRMED BY THE LD. CIT(A) U/S. 14A READ WITH RULE 8D(2)(II) OF THE RULES THE LD. AR OF THE ASSESSEE CONTENDED THAT INVESTMENTS WERE MADE B Y THE ASSESSEE COMPANY OUT OF ITS OWN FUNDS WHICH WAS SUFFICIENT TO COVER THE COST OF INV ESTMENTS AND THAT NO INTEREST BEARING FUNDS WERE UTILIZED TO MAKE INVESTMENTS WHICH YIELD ED THE EXEMPT INCOME. 3 ITA NOS. 1069/KOL/2013, 1004/KOL/2014, 2064/KOL/2013 & 1294/KOL/2014 ESSEL MINING & INDUSTRIES LTD., AYS 2009-10 & 2010- 11 5. OUR ATTENTION WAS DRAWN TO THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2008-09 IN ITA NO. 786/KOL/2013 DATED 02.05.2018 WHEREIN ON SIMILAR FACTS AND CIRCUMSTANCES IT WAS HELD AS UNDER: 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND FROM THE PERUSAL OF THE BALANCE SHE ET OF THE ASSESSEE THAT THE ASSESSEE IS HAVING SUFFICIENT OWN FUNDS AT ITS DISP OSAL FOR THE PURPOSE OF MAKING INVESTMENTS AND ACCORDINGLY IT COULD BE HELD THAT N O BORROWED FUNDS WERE UTILIZED FOR MAKING INVESTMENTS. WE FIND THAT THIS FACTUAL I SSUE HAD ALREADY BEEN CONSIDERED IN ASSESSEES OWN CASE BY THIS TRIBUNAL IN ITA NO. 589/KOL/2011 DATED 20.5.2016 FOR THE ASST YEAR 2007-08 HAD CATEGORICALLY HELD THAT A LL THE INVESTMENTS WERE MADE ONLY OUT OF OWN FUNDS OF THE ASSESSEE AND NOT OUT OF BOR ROWED FUNDS. HENCE THERE CANNOT BE ANY DISALLOWANCE OF INTEREST UNDER SECOND LIMB O F RULE 8D(2) OF THE RULES. WE FIND THAT DURING THE YEAR UNDER APPEAL, THE SAME OL D INVESTMENTS WERE BROUGHT FORWARD FROM EARLIER YEARS. MOREOVER, THE PROFITS O F THE ASSESSEE FOR THE YEAR ALSO HAS INCREASED DURING THIS YEAR AND INVESTMENTS HAD DECREASED DURING THE YEAR. WE FIND THAT THIS ISSUE IS ALSO COVERED BY THE DECISIO N OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF PR.CIT VS RASOI LTD IN G.A.NO. 633 OF 2016 . THE JURISDICTIONAL HIGH COURT AFTER CONSIDERING THE JUDGEMENT OF THE C O-ORDINATE BENCH IN DHANUKA & SONS REPORTED IN 339 ITR 319 (CAL) HAD OBSERVED AS UNDER:- IT APPEARS FOR BOTH THE ASSESSMENT YEARS THE APPEL LATE AUTHORITY HELD THAT THERE WAS NO FINDING OF DIRECT NEXUS BETWEEN THE BO RROWED FUND AND INVESTMENT IN SHARES. THE ASSESSEES OWN FUNDS WERE FAR IN EXCESS OF THE AVERAGE TOTAL INVESTMENTS. THERE COULD NOT BE ANY P RESUMPTION OF UTILIZATION OF BORROWED FUNDS. HENCE DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D(2)(II) WAS DELETED WHILE DISALLOWANCE OF INDIREC T EXPENSES OF RS 1,82,346/- BY APPLICATION OF RULE 8D(2)(III) UPHELD WITH THE DIRECTION TO ALLOW RELIEF OF THE SUM ALREADY DISALLOWED BY THE APPELLA NT ITSELF. ON APPEAL PREFERRED BY THE REVENUE THE TRIBUNAL HEL D AS FOLLOWS:- WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH F ACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT NOW THE REV ENUE COULD NOT ESTABLISH THAT THE INVESTMENTS MADE IN SHARES GIVIN G EXEMPTED INCOME IS OUT OF BORROWED FUNDS ON WHICH INTEREST IS PAID BY ASSESSEE. THERE IS NO NEXUS WHATSOEVER. ON SPECIFIC QUERY LD. SR.DR COULD NOT CONTROVERT THAT THE ASSESSEE HAS MADE IN INVESTMENT IN SHARES GIVING EXEMPT INCOME OUT OF OWN FUNDS WHICH IS AT ABOUT 24 29 LACS AND INVESTMENT IS AT RS 365 LACS ONLY. ONCE THIS FACT H AS NOT BEEN DENIED AND CIT(A) HAS CATEGORICALLY OBSERVED THAT THE ASSE SSEE HAS MADE INVESTMENT IN SHARES OUT OF ITS OWN FUNDS NO DISALL OWANCE CAN BE ATTRIBUTED QUA THE INTEREST PAID ON BORROWED FUNDS FOR INVESTING THE SAME IN INTEREST FREE FUNDS. IN VIEW OF THE ABOVE, WE CONFIRM THE ORDER OF CIT(A) ON THE COMMON ISSUE.. WE FIND THAT THIS CASE HAS YIELDED CONCURRENT FINDI NG OF FACTS REGARDING EXPENDITURE INCURRED BY THE ASSESSEE FOR THE PURPOS E OF EARNING THE EXEMPT INCOME, BY THE APPELLATE AUTHORITY AND THE TRIBUNAL . AS SUCH THERE IS NO 4 ITA NOS. 1069/KOL/2013, 1004/KOL/2014, 2064/KOL/2013 & 1294/KOL/2014 ESSEL MINING & INDUSTRIES LTD., AYS 2009-10 & 2010- 11 SCOPE FOR INTERFERENCE WITH SUCH CONCURRENT FINDING S OF FACTS. WE, THEREFORE, ARE NOT SATISFIED THAT THE CASE INVOLVES ANY SUBSTA NTIAL QUESTION OF LAW. THE APPLICATION AND APPEAL ARE THUS DISMISSED. WE FIND THAT THE OWN FUNDS OF THE ASSESSEE FOR VARI OUS ASST YEARS TOGETHER WITH THE VALUE OF INVESTMENTS ARE AS UNDER:- ASSESSMENT YEARS (RUPEES IN CRORES) PARTICULARS 05-06 06-07 07-08 08-09 SHARE CAPITAL GENERAL RESERVES PROFIT AND LOSS A/C TOTAL OWN FUNDS INVESTMENTS PROFIT FOR THE YEAR INCREASE / (DECREASE) IN INVESTMENTS 0.49 544.30 32.53 577.32 321.02 572.24 - 0.49 1105.14 45.77 1150.91 352.15 771.52 31.13 0.49 1165.14 568.18 1733.81 295.73 896.54 (56.42) 0.49 1249.15 1319.55 2569.19 283.46 1256.55 (12.27) HENCE THE RATIO LAID DOWN BY THE HONBLE JURISDICT IONAL HIGH COURT IN RASOI LTD SUPRA WOULD SQUARELY APPLY TO THE FACTS B EFORE US. RESPECTFULLY FOLLOWING THE SAME, WE HOLD THAT NO DISALLOWANCE TO WARDS INTEREST UNDER SECOND LIMB OF RULE 8D(2) OF THE RULES IS WARRANTED IN THE FACTS OF THE INSTANT CASE. 4.2. WITH REGARD TO DISALLOWANCE UNDER RULE 8D(2)( III) OF THE RULES, WE HOLD THAT ONLY INVESTMENTS YIELDING EXEMPT INCOME SHOULD BE CONSIDERED FOR THE PURPOSE OF WORKING OUT DISALLOWANCE THEREON, IN CON SONANCE WITH THE DECISION RENDERED BY THIS TRIBUNAL IN THE CASE OF R EI AGRO LTD REPORTED IN 144 ITD 141. ACCORDINGLY WE DIRECT THE LD AO TO REC OMPUTE THE DISALLOWANCE UNDER THE THIRD LIMB OF RULE 8D(2) OF THE RULES ACCORDINGLY. WHILE DOING SO, HE SHOULD ALSO REDUCE THE DISALLOWA NCE ALREADY MADE BY THE ASSESSEE IN THE RETURN OF INCOME. 6. FROM THE AUDITED ACCOUNTS WE NOTE THAT THE POSIT ION OF THE ASSESSEES OWN FUNDS VIS- -VIS IN ITS INVESTMENT IN SHARES AND UNITS CONSIDE RED FOR DISALLOWANCE U/S. 14A OF THE ACT BY THE LD. CIT(A) WERE AS UNDER:- PARTICULARS 31.03.2009 (RS.IN CRORES) `31.03.2008 (RS. IN CRORES) SHARE CAPITAL 299.69 0.49 RESERVES 1349.15 1249.15 P&L A/C. BALANCE 2176.16 1319.55 TOTAL OWN FUNDS 3825.00 2569.19 INVESTMENT IN SHARES AND SECURITIES 446.60 283. 46 5 ITA NOS. 1069/KOL/2013, 1004/KOL/2014, 2064/KOL/2013 & 1294/KOL/2014 ESSEL MINING & INDUSTRIES LTD., AYS 2009-10 & 2010- 11 FROM THE AFORESAID CHART WE NOTE THAT THE ASSESSEE IN FACT HAD OWN FUNDS TO THE TUNE OF RS.3825 CR. AND INVESTMENT IN SHARES AND SECURITIES WERE ONLY RS.446.60 CR. FROM THESE FIGURES WE FIND THAT THE ASSESSEE HAD AT ITS DISPOS AL SUFFICIENT FUNDS TO MAKE THE INVESTMENT WHICH YIELDED EXEMPT INCOME. THUS, IT IS NOTED THA T THE FACTS OF THE CASE ARE ANALOGOUS TO THE FACTS INVOLVED IN THE EARLIER AY 2008-09. 7. THE LD. DR APPEARING ON BEHALF OF THE REVENUE CO ULD NOT POINT OUT ANY CHANGE IN LAW OR FACTS CONCERNING THE ISSUE REGARDING DISALLO WANCE U/S. 14A OF THE ACT. AT THE TIME OF HEARING, THE LD. DR, HOWEVER, MADE AN ALTERNATIVE A RGUMENT THAT THE ASSESSEE BESIDES INVESTING IN SHARES AND UNITS, YIELDING DIVIDEND IN COME, INVESTMENT WERE MADE IN DEBENTURES, BONDS AND GRANTED INTEREST FREE LOANS T O SUBSIDIARIES WHICH TOTALLS FAR MORE THAN THE ASSESSEES OWN FUNDS IN THE FORM OF CAPITAL AND RESERVES AS REFLECTED IN THE AUDITED ACCOUNTS. THE LD. DR, THEREFORE, CONTENDED THAT IT WAS A CLEAR CASE THAT THE ASSESSEES BORROWED FUNDS WERE INFACT UTILIZED FOR NON-BUSINE SS PURPOSES AND, THEREFORE, DISALLOWANCE OUT OF INTEREST PAID MADE BY THE AO AND CONFIRMED B Y THE LD. CIT(A) SHOULD BE UPHELD. 8. WE HOWEVER, ARE NOT PERSUADED TO AGREE WITH THE LD. DRS CONTENTION BEFORE US RELATING TO DISALLOWANCE U/S. 14A OF THE ACT WHICH CAN ONLY BE MADE IF THE EXPENDITURE IS INCURRED IN RELATION TO EARNING OF ANY TAX FREE INC OME. ADMITTEDLY, INVESTMENTS IN BONDS AND DEBENTURES AND ADVANCE TO SUBSIDIARIES COULD NO T HAVE PRODUCED TAX FREE INCOME AND FOR THAT REASON SEC. 14A OF THE ACT WAS NOT APPLICA BLE TO IT. FURTHERMORE, EVEN THE LOWER AUTHORITIES HAVE NOT MADE OUT ANY CASE THAT THE BOR ROWED FUNDS WERE RELATABLE TO INVESTMENT IN BONDS AND DEBENTURES AND ADVANCE TO S UBSIDIARY AND THAT THE INTEREST PAID THEREON WAS FOR NON-BUSINESS PURPOSES AND HENCE, DI SALLOWABLE U/S. 36(1)(III) OF THE ACT. WE, THEREFORE, DO NOT DEEM IT FIT OR APPROPRIATE TO ENTERTAIN THIS ARGUMENT AT THIS STAGE AS IT WOULD TANTAMOUNT TO ENHANCING THE SCOPE OF APPEAL W HEREAS THE ISSUE BEFORE US CONCERNS ONLY DISALLOWANCE U/S. 14A OF THE ACT. IN VIEW OF THE ABOVE, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL (SUPRA) FOR AY 2008-09, WE DI RECT THE AO TO DELETE THE DISALLOWANCE OF PROPORTIONATE INTEREST MADE U/S. 14A OF THE ACT READ WITH RULE 8D(2)(II) OF THE RULES. 9. NEXT COMING TO THE DISALLOWANCE OF RS.182.51 LAC S MADE UNDER RULE 8D(2)(III) OF THE RULES. WE FIND THAT THIS TRIBUNAL IN ASSESSEE S OWN CASE FOR AY 2008-09 FOLLOWING THE 6 ITA NOS. 1069/KOL/2013, 1004/KOL/2014, 2064/KOL/2013 & 1294/KOL/2014 ESSEL MINING & INDUSTRIES LTD., AYS 2009-10 & 2010- 11 DECISION RENDERED BY THE TRIBUNAL IN THE CASE OF RE I AGRO LTD. REPORTED IN 143 ITD 141 HELD THAT ONLY DIVIDEND BEARING INVESTMENT IN SHARE S ARE TO BE CONSIDERED FOR MAKING DISALLOWANCE U/S. 14A OF THE ACT. FOLLOWING THE SA ME, WE REMAND THIS ISSUE BACK TO THE FILE OF THE AO WITH A DIRECTION TO CONSIDER ONLY IN VESTMENT IN SHARES AND UNITS HELD ON THE OPENING AND CLOSING DATE OF THE PREVIOUS YEAR WHICH YIELDED DIVIDEND INCOME FOR THE PURPOSE OF COMPUTING THE DISALLOWANCE U/S. 14A OF T HE ACT READ WITH RULE 8D(2)(III) OF THE RULES. NEEDLESS TO SAY, ASSESSEE SHOULD BE GIVEN O PPORTUNITY OF HEARING. THEREFORE, GROUND NOS. 1 TO 3 ARE PARTLY ALLOWED FOR. 10. GROUND NOS. 4 AND 5 OF THE APPEAL ARE AGAINST T HE LD. CIT(A)S ACTION IN CONFIRMING THE ALLOCATION OF 7.39% OF DIRECTORS REMUNERATION AND AUDITORS REMUNERATION OF RS.19,55,66,000/- AND RS.29,62,000/- TO BE CONSIDE RED AS DEDUCTION IN ARRIVING AT THE PROFITS OF THE UNDERTAKINGS ELIGIBLE FOR DEDUCTION U/S. 10B AND 80IA OF THE ACT. 11. BRIEFLY STATED FACTS ARE THAT DURING THE RELEVA NT YEAR THE ASSESSEE HAD CLAIMED DEDUCTION U/S. 80IA OF THE ACT IN RESPECT OF ITS WI ND POWER DIVISION AND U/S. 10B OF THE ACT IN RESPECT OF ITS 100% EOU AT KHATRA. IN THE A SSESSMENT ORDER, THE AO AFTER EXAMINING THE AUDITED ACCOUNTS OF THE RESPECTIVE UNDERTAKINGS FOUND THAT IN ARRIVING AT THE PROFIT OF THE UNDERTAKING, THE ASSESSEE HAD NOT ALLOCATED CERTAIN EXPENSES WHICH IN HIS OPINION RELATED TO THESE ELIGIBLE UNDERTAKINGS AS WELL. THE ITEMS OF THE EXPENSES CONSIDERED FOR ALLOCATION WERE DIRECTORS REMUNERATION, AUDITORS REMUNERATIO N, TRAVELLING AND CONVEYANCE AND LEGAL AND PROFESSIONAL. ACCORDING TO AO, THESE EXP ENSES WERE COMMON AND, THEREFORE, THESE EXPENSES SHOULD HAVE BEEN ALLOCATED ON PRO-RA TA BASIS BETWEEN THE ELIGIBLE UNITS AND OTHER UNITS ON THE BASIS OF THEIR RESPECTIVE TURNOV ER. THEREAFTER, THE AO WORKED OUT THE PRO-RATA PERCENTAGE OF TURNOVER OF THE ELIGIBLE UNI TS TO THE COMPANY AS A WHOLE AT 7.39% AND ACCORDINGLY, APPORTIONED THESE EXPENSES TO RESP ECTIVE ELIGIBLE UNITS. ON APPEAL, THE LD. CIT(A) DELETED THE ADJUSTMENT QUA THE EXPENDITU RE ON ACCOUNT OF TRAVELLING & CONVEYANCE AND LEGAL & PROFESSIONAL. THE LD. CIT(A ), HOWEVER, CONFIRMED THE ADJUSTMENT QUA THE DIRECTORS REMUNERATION AND AUDITORS FEE. AGGRIEVED BY THE ACTION OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 7 ITA NOS. 1069/KOL/2013, 1004/KOL/2014, 2064/KOL/2013 & 1294/KOL/2014 ESSEL MINING & INDUSTRIES LTD., AYS 2009-10 & 2010- 11 12. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE DIRECTORS REMUNERATION OF RS.1955.66 LACS WAS PAID TO THE DIRECTORS IN ACCORDANCE WITH SEC. 198, 348 AND 349 OF THE COMPANIES ACT, 1956 WHICH, INTER-ALIA, INCLUDED DIRECTORS SITTING FEES AND COM MISSION TOTALING TO RS.1459.74 LACS TO NON-EXECUTIVE DIRECTORS OF RS.495.92 LACS AS REMUNE RATION TO THE MANAGING DIRECTOR. THE LD. AR SUBMITTED THAT THE NON-EXECUTIVE DIRECTORS W ERE NOT INVOLVED IN MONITORING DAY TO DAY BUSINESS OPERATION OF THE ASSESSEE COMPANY, BU T WERE RESPONSIBLE FOR DECIDING POLICY ISSUES AND TO ENSURE CORPORATE GOVERNANCE AND STATU TORY COMPLIANCES. THE DIRECTORS REMUNERATION WAS PAID IN ACCORDANCE WITH THE FORMUL A PRESCRIBED IN THE COMPANIES ACT AND THEIR REMUNERATION WAS NOT BASED ON THE TIME AN D EFFORTS DEVOTED TO THE DAY TO DAY FUNCTIONING OF THE COMPANY. THE LD. AR, THEREFORE , CLAIMED THAT SINCE REMUNERATION PAID TO THE NON-EXECUTIVE DIRECTORS WAS BASED ON STATUTO RY FORMULA AND HAD NO DIRECT RELATION WITH OPERATIONS OF THE ELIGIBLE UNDERTAKINGS, IN AR RIVING AT THE PROFITS OF THE ELIGIBLE UNDERTAKINGS SUCH EXPENDITURE COULD NOT BE TAKEN IN TO ACCOUNT. THE LD. AR RELIED ON SEVERAL JUDGMENTS OF THE HONBLE HIGH COURTS AND TH E TRIBUNAL TO SUPPORT HIS CONTENTION. ON THE OTHER HAND, THE LD. DR VEHEMENTLY RELIED ON THE ORDERS OF THE LOWER AUTHORITIES AND PLEADED FOR NO INTERFERENCE FROM OUR PART. 13. AFTER GIVING A THOUGHTFUL CONSIDERATION TO THE FACTS OF THE CASE AND THE PROVISIONS OF SECTION 80IA/10B OF THE ACT, WE NOTE THAT THIS INCE NTIVE LINKED SECTIONS CONTAINED BOTH SUBSTANTIVE PROVISIONS WHICH ARE REQUIRED TO BE SAT ISFIED FOR CLAIMING DEDUCTIONS/EXEMPTION AND THE COMPUTATION OF PROFIT TO ARRIVE AT THE SUM ELIGIBLE FOR DEDUCTION/EXEMPTION. IT IS NOTED THAT FOR COMPUTATION PURPOSE THIS SECTION REF ER TO PROFIT DERIVED FROM ELIGIBLE BUSINESS. THE HONBLE COURTS WHILE INTERPRETING T HE COMPUTATION OF PROFITS DERIVED FROM ELIGIBLE BUSINESS HAVE HELD THAT THE WORD DERIVED FROM IS NARROWER IN CONNOTATION AS COMPARED TO THE WORD ATTRIBUTABLE TO. THE HONBLE SUPREME COURT IN THE CASE OF LIBERTY INDIA VS. CIT (2009) 317 ITR 218 (SC) HELD THAT THE EXPRESSION DERIVED FROM INTENDS TO COVER SOURCES NOT BEYOND THE FIRST DEGREE. MEANING THEREBY THE EXPRESSION DERIVED FROM SIGNIFIES THAT ONLY INCOME/EXPENDITURE DIRECTLY AND INEXTRICABLY RELATED TO ELIGIBLE UNDERTAKING SHOULD BE CONSIDERED IN COMPUTING PROFI TS OF THE ELIGIBLE UNDERTAKINGS. INDIRECT EXPENDITURE WHICH HAS NO DIRECT NEXUS OR C ONNECTION TO THE PROFITS OF INDUSTRIAL 8 ITA NOS. 1069/KOL/2013, 1004/KOL/2014, 2064/KOL/2013 & 1294/KOL/2014 ESSEL MINING & INDUSTRIES LTD., AYS 2009-10 & 2010- 11 UNDERTAKING SHOULD NOT BE CONSIDERED IN COMPUTING D EDUCTION U/S. 80IA/10B OF THE ACT. WE FIND THAT THE FOREGOING PROPOSITION FINDS SUPPOR T IN THE FOLLOWING DECISIONS: I) GRAPHITE INDIA LTD. VS. ADDL. CIT, ITA NO. 304 T O 305/KOL/ 2018, II) `DCIT VS. CATIVISON PRODUCTS LTD. 142 TAXMAN 10 4 (DEL.ITAT) III) RRB CONSULTANTS & ENGG. PVT. LTD. 112 TTJ 794 (ITAT DEL.) IV) NATIONAL FERTILIZERS LTD. IN RE 142 TAXMAN 5 (A AR NEW DEL.) 14. IN VIEW OF THE ABOVE, LET US NOW EXAMINE WHETHE R THE ITEMS OF EXPENSES IN QUESTION VIZ. DIRECTORS REMUNERATION AND AUDITORS REMUNERAT ION HAVE ANY FIRST DEGREE NEXUS OR CONNECTION WITH THE PROFITS DERIVING FROM ELIGIBLE UNDERTAKINGS. . ON PERUSAL OF THE SEPARATE AUDITED ACCOUNTS OF THE ELIGIBLE UNDERTAKI NGS, WE NOTE THAT NO EXPENSES HAVE BEEN DEBITED IN RESPECT OF THE AUDIT CONDUCTED ON THESE SEGMENTAL ACCOUNTS AND IN THAT VIEW OF THE MATTER, WE HOLD THAT THE AUDITORS REMUNERATION DEBITED IN P&L ACCOUNT, INTER-ALIA, COMPRISED OF THE FEES PAID TO AUDITORS FOR AUDITING THE SEPARATE ACCOUNTS OF THE ELIGIBLE UNDERTAKINGS. IN ABSENCE OF THE BREAK-UP OF FEES P AID TO AUDITORS, WE FIND NO INFIRMITY IN THE ORDER OF THE LOWER AUTHORITIES IN ALLOCATING T HE AUDITORS REMUNERATION TO THE ELIGIBLE UNDERTAKING ON PRO-RATA BASIS AND HENCE, THE ORDER OF THE LOWER AUTHORITIES TO THAT EXTENT IS CONFIRMED. 15. NOW COMING TO THE DIRECTORS REMUNERATION, WE F IND THAT THE SAME CAN BE BIFURCATED INTO REMUNERATION AND SITTING FEES OF RS.1459.74 LA CS PAID TO NON-EXECUTIVE DIRECTORS AND A SUM OF RS. 495.92 LACS PAID TO THE MANAGING DIRECTO R. WE NOTE THAT THE NON-EXECUTIVE DIRECTORS DO NOT PARTICIPATE IN THE DAY-TO-DAY WORK OF THE COMPANY NOR ARE IN-CHARGE OF THE OPERATIONS OF THE UNDERTAKINGS AND HENCE THE REMUNE RATION PAID TO THEM DID NOT HAVE FIRST DEGREE NEXUS WITH THE PROFITS OF THE ELIGIBLE UNDER TAKING. WE NOTE THAT THE NON-EXECUTIVE DIRECTORS ATTENDED THE BOARD MEETINGS AND WERE INVO LVED IN POLICY DECISION MAKING, MATTERS OF CORPORATE GOVERNANCE ETC. WHICH HAD NO FIRST DE GREE NEXUS WITH THE OPERATIONS OF THE ELIGIBLE UNDERTAKING. THE LD. DR COULD NOT CONTROV ERT THIS PARTICULAR FACT, THEREFORE, THE AO/LD. CIT(A) ERRED ON FACTS AND IN LAW IN ALLOCATI NG SUMS OUT OF THE DIRECTORS REMUNERATION TO THE EXTENT OF RS.1459.74 LACS WHILE ARRIVING AT THE INCOME ELIGIBLE FOR 9 ITA NOS. 1069/KOL/2013, 1004/KOL/2014, 2064/KOL/2013 & 1294/KOL/2014 ESSEL MINING & INDUSTRIES LTD., AYS 2009-10 & 2010- 11 DEDUCTION U/S. 80IA/10B OF THE ACT AND, THEREFORE, WE DELETE THE ALLOCATION MADE ON THIS ISSUE. 16. AS FAR AS REMUNERATION OF RS.495.92 LACS PAID T O THE MANAGING DIRECTOR IS CONCERNED, WE NOTE THAT THE MANAGING DIRECTOR IS IN VOLVED IN THE DAY-TO-DAY AFFAIRS OF THE COMPANY AND IS RESPONSIBLE FOR OVER-ALL OPERATIONS OF THE COMPANY INCLUDING THE ELIGIBLE UNDERTAKING. IN THE CIRCUMSTANCES, THE MANAGING DI RECTORS REMUNERATION INDEED HAVE NEXUS WITH THE FUNCTIONING OF THE ELIGIBLE UNDERTAK ING AND, THEREFORE, WE UPHOLD THE ALLOCATION MADE OUT OF THE MANAGING DIRECTORS REMU NERATION TO THE PROFITS OF THE ELIGIBLE UNDERTAKING. THEREFORE, GROUND NOS. 4 AND 5 ARE PA RTLY ALLOWED. 17. NOW, REVENUES APPEAL IN ITA NO. 2064/KOL/2013 FOR AY 2009-10. GROUND NOS. 1 TO 3 OF THE APPEAL ARE AGAINST THE ACTION OF THE LD . CIT(A) FOR ALLOWING THE DEDUCTION OF PRIOR PERIOD EXPENSES OF RS.89,78,073/-. 18. BRIEFLY STATED FACTS ARE THAT IN THE SCHEDULE-1 6 OF THE AUDITED FINANCIALS AS WELL AS THE TAX AUDIT REPORT, PRIOR PERIOD EXPENSES HAVE BEEN D ISCLOSED AT RS.89,78,073/- WHICH COMPRISES OF INTEREST OF RS.79,81,509/- PAID TO DY. DIRECTOR OF MINES, JODA FOR DELAYED PAYMENTS OF ROYALTY AND OTHER ITEMS OF RS.9,96,564/ -. ACCORDING TO AO, THE ASSESSEE WAS UNABLE TO ESTABLISH THAT THIS LIABILITY FOR EXPENSE S PERTAINING TO EARLIER YEARS HAD CRYSTALISED DURING THE FINANCIAL YEAR AND, THEREFORE, DISALLOWE D THE ENTIRE SUM. ON APPEAL, THE LD. CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER: 6. I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSES SING OFFICER IN THE ASSESSMENT ORDER AND SUBMISSIONS OF THE APPELLANT. THE APPELLA NT HAS PAID AN AMOUNT OF RS.79,81,509/- FOR DELAYED PAYMENT OF PRIORITY TO T HE DEPUTY DIRECTOR (MINES) AND THE DEMAND FOR THE SAME WAS RAISED DURING THE PERIO D RELEVANT TO ASSESSMENT YEAR 2009-10 AS PER THE LETTER NO.60428/MINES DATED 29.0 8.2008 OF THE OFFICE OF DEPUTY DIRECTOR (MINES) JODA TO DIST: KEONJHAR, ORISSA. TH E MATTER WAS UNDER DISPUTE AND THE DEMAND CRYSTALLISED DURING THIS PERIOD. SINCE T HE DEMAND HAS BEEN CRYSTALLISED DURING THE YEAR AND IT WAS UNDER DISPUTE THAT NO IN TEREST PAYMENT IS TO BE GIVEN BUT ULTIMATELY THE PAYMENT HAS TO PAY THE INTEREST AND CLAIM THE SAME IN THE YEAR OF PAYMENT. THEREFORE, IT IS HELD THAT THE APPELLANT I S ENTITLED FOR THE CLAIM OF RS.79,81 ,509/- BEING THE STATUTORY DUES OF THE GOVT. OF IND IA EVEN OTHERWISE AS PER THE PROVISION OF SECTION 438 OF THE INCOME-TAX ACT, 196 1. THE SAME IS TO BE ALLOWED AS DEDUCTION IN THE YEAR OF PAYMENT 37. THE APPELLANT HAS FILED THE DETAILS OF RS.89,78 ,073/- AS FOLLOWS: 10 ITA NOS. 1069/KOL/2013, 1004/KOL/2014, 2064/KOL/2013 & 1294/KOL/2014 ESSEL MINING & INDUSTRIES LTD., AYS 2009-10 & 2010- 11 19. AGGRIEVED BY THE AFORESAID DECISION OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 11 ITA NOS. 1069/KOL/2013, 1004/KOL/2014, 2064/KOL/2013 & 1294/KOL/2014 ESSEL MINING & INDUSTRIES LTD., AYS 2009-10 & 2010- 11 20. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE PRINCIPAL ITEM OF PRIOR PERIOD EXPENSES WAS RS.79,81,509/- PAID TO DY. DIRECTOR OF MINES, JODA FOR DELAYED PAYMENT OF ROYALTY. IT IS NOTED THAT THE DEMAND FOR THE SAME WAS RAISED BY THE OFFICE OF DY. DIRECT OR OF MINES, JODA VIDE NOTICE DATED 29.08.2008 I.E. IN THE RELEVANT FY 2008-09. IN THE AFORESAID CIRCUMSTANCES, SINCE INTEREST DEMAND WAS RAISED BY THE PAYEE ONLY IN THE RELEVAN T YEAR, THE LD. CIT(A) RIGHTLY HELD THAT THE LIABILITY FOR SUCH EXPENSES AROSE AND CRYSTALIS ED IN THIS YEAR ONLY. AS REGARDS OTHER ITEMS OF EXPENSES, THE LD. CIT(A) OBSERVED THAT THE BILLS FOR CERTAIN EXPENSES FOR THE FY 2007-08 WERE RECEIVED BY THE ASSESSEE ONLY IN THE N EXT YEAR I.E. THE RELEVANT FY 2008-09. ALTHOUGH THE ASSESSEE HAD PROVIDED FOR THE EXPENSES ON ESTIMATE BASIS IN THE EARLIER YEAR BUT THERE WAS CERTAIN DIFFERENCE BETWEEN THE PROVIS IONS ESTIMATED AND THE ACTUAL BILLED AMOUNT AND IT WAS THIS DIFFERENTIAL AMOUNT WHICH WA S CHARGED TO THE P&L ACCOUNT FOR THE RELEVANT YEAR. THE LD. CIT(A) OBSERVED THAT SINCE THE BILLS WERE RECEIVED AFTER THE END OF THE FY 2007-08 AND IN FY 2008-09, THE DIFFERENTIAL AMOUNT HAD CRYSTALISED IN THE RELEVANT YEAR ITSELF AND, THEREFORE, ALLOWED THE SAME. THE LD. CIT, DR APPEARING FOR THE REVENUE WAS UNABLE TO POINT OUT ANY INFIRMITY IN THE FINDIN G RECORDED BY THE LD. CIT(A). WE, THEREFORE, DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). THEREFORE, GROUND NOS. 1 TO 3 OF REVENUES APPEAL ARE DISMISSE D. 21. COMING TO NEXT GROUND NO. 4 TAKEN BY THE REVENU E IS AGAINST THE ACTION OF THE LD. CIT(A) IN RESTRICTING THE ALLOCATION OF EXPENSES ON LEGAL AND PROFESSIONAL AND TRAVELLING AND CONVEYANCE TO THE ELIGIBLE UNDERTAKING U/S. 80IA AN D 10B OF RS.30,99,000/- AND RS.5,63,000/- AS OPPOSED TO THE TOTAL DISALLOWANCE OF RS.115.82 LACS MADE BY THE AO. 22. BRIEFLY STATED FACTS AS ARE ALREADY DISCUSSED I N THE FOREGOING PORTION OF THIS ORDER, THE ASSESSEE HAD CLAIMED DEDUCTION U/S. 80IA AND 10B OF THE ACT IN RESPECT OF ITS WIND POWER DIVISION AND 100% EOU UNIT RESPECTIVELY. IN THE AS SESSMENT ORDER THE AO HAD IDENTIFIED CERTAIN EXPENSES WHICH IN HIS OPINION WERE COMMON AND RELATED TO THIS ELIGIBLE UNDERTAKING AS WELL. THE ITEMS OF EXPENSES, INTER ALIA, INCLUDED EXPENSES ON TRAVELLING AND CONVEYANCE AND LEGAL AND PROFESSIONAL FEES OF RS.69 2.27 LACS AND RS. 875 LACS RESPECTIVELY. THE AO WORKED OUT THE PRO-RATA PERCENTAGE OF TURNOV ER OF THE ELIGIBLE UNDERTAKING TO THE COMPANY AS A WHOLE AS 7.39% AND ACCORDINGLY, APPOR TIONED THESE EXPENSES TO RESPECTIVE 12 ITA NOS. 1069/KOL/2013, 1004/KOL/2014, 2064/KOL/2013 & 1294/KOL/2014 ESSEL MINING & INDUSTRIES LTD., AYS 2009-10 & 2010- 11 ELIGIBLE UNITS. ON APPEAL, THE LD. CIT(A) FOUND TH AT IN FORM 10CCB, THE AUDITORS HAD ALREADY IDENTIFIED AND ALLOCATED THE AMOUNT OF RS.3 0,99,000/- AND RS.5,63,000/- OUT OF LEGAL AND PROFESSIONAL FEE AND TRAVELLING AND CONVEYANCE PERTAINED TO THE ELIGIBLE UNDERTAKINGS. ACCORDING TO THE LD. CIT(A), WHEN THE DETAILS HAD A LREADY BEEN AUTHENTICATED BY THE AUDITORS, NO FURTHER ALLOCATION OUT OF THESE ITEMS OF EXPENSES WERE REQUIRED. AGGRIEVED BY THE ACTION OF THE LD. CIT(A), THE REVENUE IS BEFORE US. 23. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PAPER BOOK FILED THE ASSESSEE HAS E NCLOSED SEPARATE AUDITED P&L ACCOUNT OF THE ELIGIBLE UNDERTAKINGS. FROM PERUSAL OF THE SCH EDULE OF EXPENSES FORMING PART OF THE AUDITED ACCOUNTS, WE FIND THAT LEGAL AND PROFESSION EXPENSES AS WELL AS TRAVELLING AND CONVEYANCE EXPENSES INCURRED BY THESE UNDERTAKINGS WERE DEBITED TO THE STAND ALONE ACCOUNT OF THESE ELIGIBLE UNDERTAKINGS AND HENCE, N O FURTHER ALLOCATION ON ACCOUNT OF THESE ITEMS OF EXPENSES TO THE ELIGIBLE UNDERTAKINGS WAS WARRANTED. THE LD. DR WAS UNABLE TO CONTROVERT THIS FACT WHICH IS EVIDENT FROM THE DOCU MENTS ON RECORD. WE, ACCORDINGLY, UPHOLD THE ORDER OF THE LD. CIT(A) ON THIS SCORE. THEREFORE, GROUND NO. 4 OF REVENUES APPEAL IS DISMISSED. 24. COMING TO APPEAL OF ASSESSEE APPEAL IN ITA NO. 1004/KOL/2014 AND REVENUES APPEAL IN ITA NO. 1294/KOL/2014 FOR AY 2010-11. GR OUND NOS. 1 TO 4 OF ASSESSEES APPEAL AND GROUND NO. 1 OF REVENUES APPEAL RELATE TO THE DISALLOWANCE U/S. 14A OF THE ACT READ WITH RULE 8D OF THE RULES. 25. BRIEFLY STATED FACTS OF THE CASE ARE THAT DURIN G THE YEAR THE ASSESSEE HAD DERIVED DIVIDEND INCOME OF RS.1130.86 LACS FROM INVESTMENT IN SHARES AND SECURITIES WHICH WAS CLAIMED AS EXEMPT FROM TAX AGAINST WHICH A SUM OF R S.5,33,586/- WAS OFFERED AS DISALLOWANCE U/S. 14A OF THE ACT. IN THE ASSESSMEN T ORDER THE AO INVOKED SEC. 14A AND MADE DISALLOWANCE OF RS.19,10,00,218/- UNDER RULE 8 D(2)(II) AND RS.2,69,42,445/- UNDER RULE 8D(2)(III). ON APPEAL, THE LD. CIT(A) CONFIRM ED THE DISALLOWANCE U/S. 14A READ WITH RULE 8D OF THE RULES BUT DIRECTED THE AO TO CONSIDE R THE NET INTEREST EXPENDITURE AFTER DEDUCTING THE INTEREST INCOME INSTEAD OF GROSS INTE REST EXPENSES FOR THE PURPOSE OF RULE 13 ITA NOS. 1069/KOL/2013, 1004/KOL/2014, 2064/KOL/2013 & 1294/KOL/2014 ESSEL MINING & INDUSTRIES LTD., AYS 2009-10 & 2010- 11 8D(2)(II) OF THE RULES. AGGRIEVED BY THE ORDER OF LD. CIT(A), BOTH THE ASSESSEE AS WELL AS REVENUE ARE IN APPEAL BEFORE US. 26. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PER USING THE MATERIAL AVAILABLE ON RECORD, WE NOTE THAT THE ISSUE INVOLVED IN THIS GRO UND IS SIMILAR TO THE ONE INVOLVED IN GROUND NOS. 1 TO 4 IN ASSESSEES APPEAL FOR AY 2009 -10 WHICH WE HAVE DECIDED IN THE FOREGOING PORTIONS IN THIS ORDER. FOLLOWING OUR CO NCLUSION DRAWN IN AY 2009-10, WE FIND THAT IN THE RELEVANT YEAR AS WELL THE ASSESSEE HAD SUFFICIENT OWN SURPLUS FUNDS NAMELY RS.4334.36 LACS AT ITS DISPOSAL TO COVER THE COST O F INVESTMENT OF RS.631.10 LACS. WE ACCORDINGLY, HOLD THAT NO DISALLOWANCE OUT OF INTER EST WAS WARRANTED U/S. 14A OF THE ACT. THE AO IS ACCORDINGLY DIRECTED TO DELETE THE DISALL OWANCE MADE U/S. 8D(2)(II). AS REGARDS THE DISALLOWANCE MADE BY AO UNDER RULE 8D(2)(III) O F THE RULES, WE DEEM IT FIT AND PROPER TO REMAND THE ISSUE BACK TO THE FILE OF THE AO WITH A DIRECTION TO CONSIDER ONLY THE INVESTMENTS AT THE BEGINNING AND CLOSING OF THE REL EVANT PREVIOUS YEAR WHICH YIELDED DIVIDEND TO THE ASSESSEE DURING THE RELEVANT YEAR I N COMPUTING PERMISSIBLE DISALLOWANCE U/S. 14A OF THE ACT READ WITH RULE 8D(2)(III) OF TH E RULES. IN VIEW OF OUR FOREGOING CONCLUSION THE GROUNDS RAISED BY THE REVENUE BECOME S ACADEMIC ONLY. 27. COMING NEXT TO GROUND NO. 5 OF ASSESSEES APPEA L AND GROUND NOS. 2 AND 3 OF REVENUES APPEAL RELATE TO THE ALLOCATION OF COMMO N EXPENSES COMPRISING OF DIRECTORS REMUNERATION, AUDITORS REMUNERATION, CONVEYANCE AN D TRAVELLING EXPENSES AND LEGAL AND PROFESSIONAL EXPENSES IN WORKING OUT THE PROFITS OF THE ELIGIBLE UNDERTAKINGS U/S. 80IA AND 10B OF THE ACT. AFTER CONSIDERING THE RIVAL SUBMIS SIONS IT IS OBSERVED THAT THE ISSUE INVOLVED IN THESE GROUNDS ARE SIMILAR TO THE GROUND NOS. 4 AND 5 OF ASSESSEES APPEAL AND GROUND NO. 4 OF REVENUES APPEAL IN AY 2009-10. FO LLOWING THE CONCLUSION DRAWN IN AY 2009-10, WE HOLD THAT THE MANAGING DIRECTORS REMUN ERATION AND AUDITORS REMUNERATION OF RS.5,12,23,000/- AND RS.4,23,000/- RESPECTIVELY HAD NEXUS WITH THE FUNCTIONING OF THE ELIGIBLE UNDERTAKINGS AND ACCORDINGLY, CONFIRM THE ORDERS OF THE LOWER AUTHORITIES FOR MAKING ALLOCATION OUT OF THESE EXPENSES AGAINST THE INCOME TO BE CONSIDERED FOR THE PURPOSE OF COMPUTING DEDUCTION U/S. 80IA AND 10B OF THE ACT. SIMILARLY, WE FIND THAT THE AUDITOR HAD IDENTIFIED AND ALLOCATED THE EXPENDITUR E RELATABLE TO THE ELIGIBLE UNDERTAKINGS ON ACCOUNT OF TRAVELLING AND CONVEYANCE AND LEGAL AND PROFESSIONAL EXPENSES AND IN THAT VIEW 14 ITA NOS. 1069/KOL/2013, 1004/KOL/2014, 2064/KOL/2013 & 1294/KOL/2014 ESSEL MINING & INDUSTRIES LTD., AYS 2009-10 & 2010- 11 OF THE MATTER WE UPHOLD THE ORDER OF THE LD. CIT(A) THAT NO FURTHER ALLOCATION ON ACCOUNT OF THESE TWO ITEMS OF EXPENSES WAS CALLED FOR. ACCORD INGLY, THE GROUND RAISED BY THE ASSESSEE AS WELL AS THE REVENUE IS DISMISSED. 11. IN THE RESULT, THE APPEALS OF ASSESSEE ARE PAR TLY ALLOWED AND THAT OF REVENUE ARE DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 21ST AUGUS T, 2018 SD/- SD/- (DR. A. L. SAINI) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 21ST AUGUST, 2018 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT DCIT, CIRCLE-5, KOLKATA 2 RESPONDENT M/S. ESSEL MINING & INDUSTRIES LTD., 10, CAMAC STREET, KOLKATA-700 017. 3. 4. CIT(A)-VI, KOLKATA. (SENT THROUGH E-MAIL) CIT , KOLKATA. 5. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, SR. PVT. SECRETARY