M/s. Singhal Enterprises Pvt Ltd., Kolkata V. D.C.I.T., C.C. - 4(1), Kolkata., Kolkata

ITA 1071/KOL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4484 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 14-01-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 21-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM BILASH MEENA
• Assessee Lawyers: A K TULSIYAN
• Keywords: Business income; Business expenditure; Principle of natural justice; Assessment record; Set aside
• Section: 143(3); 142(1); 80HHC; 80IA; 80HH; 207; 13; 22; 263; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A, BENC H KOLKATA BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM ./ITA NOS.1071 & 1072/KOL/2018 ( / ASSESSMENT YEARS:2013-14 &2014-15) M/S SINGHAL ENTERPRISES PVT. LTD. 303, CENTURY TOWERS, 45, SHAKESPARE SARANI, KOLKATA- 700017 VS. DCIT, CC-4(1), KOLKATA ./ ./PAN/GIR NO.: AADCS 6988 F (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI A.K. TULSIYAN, CA RESPONDENT BY :SHRI RAM BILASH MEENA, CIT / DATE OF HEARING : 14/01/2020 /DATE OF PRONOUNCEMENT : 26/02/2020 / O R D E R PER DR. A.L. SAINI, AM: THE CAPTIONED TWO APPEALS FILED BY THE ASSESSEE, P ERTAINING TO ASSESSMENT YEARS2013-14 &2014-15 RESPECTIVELY, ARE DIRECTED AG AINST THE SEPARATE ORDERS PASSED BY THE PR. COMMISSIONER OF INCOME TAX, CENTR AL, KOLKATA-2, UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT ) DATED 06.03.2018. 2. SINCE THESE TWO APPEALS RELATE TO THE SAME ASSES SEE, COMMON AND IDENTICAL ISSUES ARE INVOLVED THEREFORE THESE HAVE BEEN CLUBB ED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. THE ASSESSEES APPEAL IN ITA NO. 1071/KOL/2018, FOR A.Y . 2013-14 IS TAKEN AS A LEAD CASE. M/S SINGHAL ENTERPRISES PVT. LTD. ITA NOS.1071 & 1072/KOL/2018 ASSESSMENT YEARS:2013-14 & 2014-15 P PP PA AA AG GG GE EE E | || | 2 22 2 3. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE AR E AS FOLLOWS: 1.A) THAT THE LD. PR. CIT WAS WRONG IN EXERCISING THE REVISIONARY POWER U/S 263 OF THE I. T. ACT ON THE ORDER PASSED U/S 143(3) OF THE I. TAX ACT BY SET ASIDE THE IMPUGNED ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE ASSESSEE HAS TAKEN AND THE A.O. ALSO CONFIRM THE FA CT THAT THE OUTSTANDING OF FD/OD FACILITY WERE AVAILABLE AGAINST FD AND NET IN COME WAS OFFERED FOR TAXATION WITHOUT CLAIMING DEDUCTION 80IA OF THE ACT . WHEREAS, THE LD. PR. CIT(A) HAS TAKEN THE GROSS RECEIPT OF INCOME IN PLACE OF N ET RECEIPT OF INCOME AND THEREBY, RESTRICTING THE DEDUCTION CLAIMED U/S 80IA OF THE ACT IN PLACE OF ENTIRE/ACTUAL DEDUCTION CLAIMED U/S 80IA OF THE ACT BY THE ASSESSEE. THUS, THE ABOVE ACTION OF THE LD. PR. CIT IN SETTING ASIDE TH E ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT IS BAD IN LAW AND NEEDS TO BE QUA SHED. B) THAT WITHOUT PREJUDICE TO THE ABOVE GROUND, THE LD. PR. CIT(A) ALSO IGNORE THE FACT THAT THE INTEREST PAID ON THE OD AGAINST FD HA S NOT BEEN USED IN THE EXEMPTED UNIT. HENCE, NO PORTION OF THE INTEREST OF OD CAN BE APPORTIONED TOWARDS THE EXEMPTED INCOME ON WHICH THE DEDUCTION CLAIMED BY THE ASSESSEE AND ALLOWED BY A.O. U/S 80IA OF THE ACT. THUS, THE ABOV E ACTION OF THE LD. PR. CIT IN SETTING ASIDE THE ASSESSMENT ORDER PASSED U/S 143(3 ) OF THE ACT IS BAD IN LAW AND NEEDS TO BE QUASHED. C) THAT WITHOUT PREJUDICE TO THE GROUND (1A) & (1B ), AT THE STAGE OF ASSESSMENT PROCEEDINGS, THE MATTER WAS EXPLAINED AND NECESSARY DOCUMENTS WERE SUBMITTED BEFORE THE A.O. ALL THE ISSUES HAVE BEEN EXAMINED B Y THE A.O AS SUBMITTED BEFORE THE LD. PR.CIT WITH ALL SUPPORTING DOCUMENTS. THE A .O. AFTER DUE ENQUIRY AND TAKEN ONE OF THE POSSIBLE VIEW AS PER LAW, PASS THE SAID ORDER. HENCE, THE ORDER PASSED U/S 143(3) CANNOT BE TERMED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THUS, THE ABOVE ACTION OF THE LD. PR. CIT IN SETTING ASIDE THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT IS BAD IN LAW AN D NEEDS TO BE QUASHED. 2. THAT THE LD. PR. CIT(A) ERRED IN NOT ACCEPTING T HE FACT THAT THE INTEREST ON OD AND FD BOTH ARE INTERLINKED AS BOTH ARE LINKED WITH THE BANK. THUS, BOTH THE INTEREST PAID AND EARNED ARE HAVING THE DIRECT NEXU S. HENCE, THE NET INTEREST INCOME AFTER DEDUCTION OF INTEREST EXPENDITURE IS B ECOME ELIGIBLE FOR TAXATION TO INCOME TAX. THE SAID FACT HAS ALREADY BEEN ADJUDICA TED AT VARIOUS COURTS I.E. SUPREME COURT AND OTHER HIGH COURT. THUS, THE NOT A LLOWING THE ADJUSTMENT OF INTEREST INCOME ON FD WITH INTEREST EXPENDITURE ON OD AND THEREBY RESTRICTING THE DEDUCTION CLAIMED U/S 80IA OF THE ACT IS WRONG. THUS, THE ORDER PASSED U/S 263 OF THE ACT BY THE LD. PR. CIT IN SETTING ASIDE THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT IS BAD IN LAW AND NEEDS TO BE QUA SHED. 3. THAT THE PETITIONER CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY GROUND/S OF APPEAL BEFORE OR AT THE TIME OF HEARING. 4. BRIEF FACTS QUA THE ISSUE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE A.Y. 2013-14, ON 30.09.2013 DISCLOSING TOTAL INCOME OF RS. 4,20,61,240/-. IN THE M/S SINGHAL ENTERPRISES PVT. LTD. ITA NOS.1071 & 1072/KOL/2018 ASSESSMENT YEARS:2013-14 & 2014-15 P PP PA AA AG GG GE EE E | || | 3 33 3 ASSESSEE`S CASE AN ASSESSMENT WAS MADE U/S 143(3) O F THE INCOME TAX ACT ON 07.01.2016 AT TOTAL INCOME OF RS. 4,34,64,832/-. LATER ON, LD PRINCIPAL COMMISSIONER OF INCOME TAX ( PCIT) HAS EXERCISED HIS JURISDICTION U/S 263 OF THE ACT AS THE ABOVE MENTIO NED ASSESSMENT ORDER DATED 07.01.2016 FRAMED U/S 143(3) OF THE ACT WAS ERRONEO US AND PREJUDICIAL TO THE INTEREST OF REVENUE ON THE FOLLOWING ISSUES:- (A) ON PERUSAL OF ASSESSMENT RECORDS OF THE ABOVE CASE, IT HAS BEEN FOUND THAT THE ASSESSEE COMPANY HAD SET OFF INTEREST OF RS. 3,19,8 1,862/- ON BANK OVERDRAFT ACCOUNT AGAINST FD INTEREST INCOME OF RS. 3,56,89,504/- AND THE RESULTANT INTEREST INCOME OF RS. 37,07,642/- HAD BEEN SHOWN AS OTHER INCOME CHARGEAB LE TO TAX AND THEREBY TAXABLE INCOME WAS REDUCED AND PROFIT FROM ELIGIBLE UNIT WA S APPRECIATED FOR CLAIMING DEDUCTION U/S 80IA OF THE ACT. THE CLAIM OF SUCH EXCESS DEDUC TION WAS ALLOWED BY THE AO AT THE TIME OF ASSESSMENT. GROSS TOTAL INCOME OF THE ASSESSEE COMPANY BEFORE A LLOWING DEDUCTION U/S 80IA WAS ASSESSED AT RS. 11,79,50,755/-. DEDUCTION U/S 80IA ALLOWED TO THE ASSESSEE COMPANY WAS RS. 7,44,85,923/-. THE ASSESSEE HAD DISCLOSED OTHER INCOME OF RS. 2,43,01,928/- (NOTE-21 OF ANNUAL ACCOUNTS). IT WAS OBSERVED FROM ASSESSMEN T RECORDS THAT THE INTEREST ON FD (UNDER THE HEAD OTHER INCOME) WAS ADJUSTED WITH I NTEREST ON BANK OVERDRAFT OF RS. 3,19,81,862/- WHICH APPEARED TO BE A PURE BUSINESS EXPENDITURE. AS PER THE PROVISION OF INCOME TAX ACT, 1961 DEDUCTION U/S 801A IS AVAILABL E TO THE ASSESSEE COMPANY TO THE EXTENT OF BUSINESS INCOME INCLUDED IN GROSS TOTAL I NCOME. IF THE INTEREST ON FD WAS NOT ADJUSTED WITH INTEREST ON BANK OVERDRAFT THEN THE T OTAL OTHER INCOME OF THE ASSESSEE COMPANY WOULD BE RS. 5,62,83,790/- [2,43,01,928 + 3 ,19,81,862]. AND INCOME COMPRISED OF PROFITS AND GAINS OF BUSINESS & PROFESSION INCOM E WOULD BE RS. 6,16,66,965/- [11,79,50,755 - 5,62,83,790] AND ASSESSEE WOULD BE ELIGIBLE FOR DEDUCTION U/S 80IA TO THE EXTENT OF RS. 6,16,66,965. THIS ISSUE WAS NOT EXAMI NED AT THE TIME OF ASSESSMENT. B) IT IS OBSERVED THAT AS PER FORM NO. 10CCB THE TO TAL SALE OF THE ELIGIBLE UNDERTAKING (RS. 25,99,00,163/-) COMPRISED OF INTER-UNIT SALE OF POWER: SALE OF POWER TO SPONGE IRON UNIT : RS. 6,24,29,8 06/- SALE OF POWER TO INDUCTION FURNACE UNIT : RS. 12,2 2,63,460/- AS PER PROVISIONS OF SECTION 80IA(8) SUCH NOTIONAL SALE VALUE IS REQUIRED TO BE DETERMINED ON MARKET VALUE OF THE GOODS. THE ISSUE WAS NOT V ERIFIED AND EXAMINED BY THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT. ACCORDINGLY, THE SHOW-CAUSE NOTICE DATED 14.11.2017 WAS ISSUED BY THE LD PCIT. 5. IN RESPONSE TO THE SHOW CAUSE NOTICE OF LD. PCIT , THE ASSESSEE SUBMITTED WRITTEN SUBMISSION BEFORE THE LD. PCIT WHICH IS REPRODUCED BELOW: 6. HOWEVER, THE LD. PCIT REJECTED THE CONTENTION OF THE ASSESSEE AND HELD AS FOLLOWS: 13. IN THE INSTANT CASE THE ASSESSEE COMPANY HAD SE T OFF INTEREST OF RS.3,19,81,862/- ON BANK OVERDRAFT ACCOUNT AGAINST FD INTEREST INCOM E OF RS. 3,56,89,504/- AND THE RESULTANT INTEREST INCOME OF RS. 37,07,642/ AS OTHER INCOME CHARGEABLE TO TAX. THE ASSESSEE PRE PARED THE FINANCIAL ACCOUNTS FOLLOWING THE GENERALLY ACCE ACCEPTED ACCOUNTING PRINCIPLES BANK OVERDRAFT FACIL ITY IS UTILIZED FOR THE PURPOSE OF WORKING CAPITAL OF THE BUSINESS AND ACCORDINGLY INTEREST ON BANK O/D SHOULD BE A BUSINESS EXPENDITURE. THEREFORE IN THE I SHOULD HAVE BEEN ADJUSTED WITH BUSINESS INCOME. THE ASSESSEE HAS CONTENDED THAT OD FACILITY HAS BEEN GRANTED ON THE SECURITY OF THE FIXED DEPOSITS AND THEREFORE THE INTEREST ON OD AND INTEREST ON FD ARE INTERLINK ED. THE ASS M/S SINGHAL ENTERPRISES PVT. LTD. ITA NOS. 1071 & 1072 ASSESSMENT YEARS: 2013 6. HOWEVER, THE LD. PCIT REJECTED THE CONTENTION OF THE ASSESSEE AND HELD AS 13. IN THE INSTANT CASE THE ASSESSEE COMPANY HAD SE T OFF INTEREST OF ON BANK OVERDRAFT ACCOUNT AGAINST FD INTEREST INCOM E OF RS. AND THE RESULTANT INTEREST INCOME OF RS. 37,07,642/ AS OTHER INCOME CHARGEABLE TO TAX. THE ASSESSEE PRE PARED THE FINANCIAL ACCOUNTS FOLLOWING THE GENERALLY ACCE PTED ACCOUNTING PRINCIPLES. AND AS PER GENERALLY ACCEPTED ACCOUNTING PRINCIPLES BANK OVERDRAFT FACIL ITY IS UTILIZED FOR THE PURPOSE OF WORKING CAPITAL OF THE BUSINESS AND ACCORDINGLY INTEREST ON BANK O/D SHOULD BE A BUSINESS EXPENDITURE. THEREFORE IN THE I NSTANT CASE INTEREST ON BANK O/D SHOULD HAVE BEEN ADJUSTED WITH BUSINESS INCOME. THE ASSESSEE HAS CONTENDED THAT OD FACILITY HAS BEEN GRANTED ON THE SECURITY OF THE FIXED DEPOSITS AND THEREFORE THE INTEREST ON OD AND INTEREST ON FD ARE INTERLINK ED. THE ASS ESSEE COMPANY HAS M/S SINGHAL ENTERPRISES PVT. LTD. 1071 & 1072 /KOL/2018 2013 -14 & 2014-15 P PP PA AA AG GG GE EE E | || | 4 44 4 6. HOWEVER, THE LD. PCIT REJECTED THE CONTENTION OF THE ASSESSEE AND HELD AS 13. IN THE INSTANT CASE THE ASSESSEE COMPANY HAD SE T OFF INTEREST OF ON BANK OVERDRAFT ACCOUNT AGAINST FD INTEREST INCOM E OF RS. AND THE RESULTANT INTEREST INCOME OF RS. 37,07,642/ - HAD BEEN SHOWN AS OTHER INCOME CHARGEABLE TO TAX. THE ASSESSEE PRE PARED THE FINANCIAL ACCOUNTS PTED ACCOUNTING PRINCIPLES. AND AS PER GENERALLY ACCEPTED ACCOUNTING PRINCIPLES BANK OVERDRAFT FACIL ITY IS UTILIZED FOR THE PURPOSE OF WORKING CAPITAL OF THE BUSINESS AND ACCORDINGLY INTEREST ON BANK O/D SHOULD NSTANT CASE INTEREST ON BANK O/D SHOULD HAVE BEEN ADJUSTED WITH BUSINESS INCOME. THE ASSESSEE HAS CONTENDED THAT OD FACILITY HAS BEEN GRANTED ON THE SECURITY OF THE FIXED DEPOSITS AND THEREFORE ESSEE COMPANY HAS M/S SINGHAL ENTERPRISES PVT. LTD. ITA NOS.1071 & 1072/KOL/2018 ASSESSMENT YEARS:2013-14 & 2014-15 P PP PA AA AG GG GE EE E | || | 5 55 5 FURTHER CONTENDED THAT SINCE THE COMPANY HAS USED I TS FD FOR TAKING OVERDRAFT FACILITIES WITHOUT EN-CASHING FD, THE INTEREST ON T HE OVERDRAFT HAS A DIRECT NEXUS WITH THE FD INTEREST. HENCE THE INTEREST ON OD WHIC H HAS A DIRECT BEARING ON THE FD HAS BEEN ADJUSTED WITH FD INTEREST AND THE NET I NTEREST INCOME HAS BEEN SHOWN AS OTHER INCOME IN NOTE NO-21 OF THE AUDITE D ACCOUNTS. IN THE INSTANT CASENO INDEPENDENT ENQUIRY/VERIFICATION WAS DONE AT THE TIME OF ASSESSMENT TO DETERMINE WHETHER INTEREST ON OD AND INTEREST ON FD ARE INTERLINKED OR NOT AND WHETHER INTEREST ON OD CAN BE ADJUSTED WITH INTERES T ON FD IN THE LIGHT OF PROVISIONS OF INCOME TAX ACT, 1961. FURTHER NO INDE PENDENT ENQUIRY/VERIFICATION WAS DONE AT THE TIME OF ASSESSMENT ON THE ISSUE THA T INTEREST ON BANK OD AND INTEREST ON FD ARE NOT RELATING TO THE ELIGIBLE UNI T AND THE SAME ARE RELATING TO DRI UNIT FOR WHICH THE ASSESSEE HAS NOT CLAIMED DED UCTION U/S 80IA. 14. IN VIEW OF THE FACTS AND THE LEGAL POSITION STA TED ABOVE, I AM OF THE VIEW THAT THE ORDER PASSED ON AN INCORRECT ASSUMPTION OF FACT S OR INCORRECT APPLICATION OF LAW AND WITHOUT MAKING REQUISITE INQUIRIES WILL SAT ISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOUS AND PRE-JUDICIAL TO THE INTER EST OF THE REVENUE WITHIN THE MEANING OF SECTION 263 OF THE INCOME TAX ACT, 1961. 15. I HAVE CAREFULLY EXAMINED THE ASSESSMENT RECORD AND SUBMISSIONS MADE BY THE ASSESSSEES A.R. THE IMPUGNED ASSESSMENT ORDER DATE D 07.01.2016 HAS BEEN PASSED WITHOUT MAKING RELEVANT ENQUIRY OR VERIFICAT ION WITH RESPECT TO THE ISSUE DISCUSSED IN PARA-13. THEREFORE, THE RELIABILITY, V ALIDITY AND GENUINENESS OF CLAIM OF THE ASSESSEE APPEAR TO HAVE NOT BEEN EXAMINED BY THE ASSESSING OFFICER AS NO PROPER ENQUIRY HAS BEEN MADE TO GATHER EVIDENCES IN THIS REGARD. THE A.O. HAS FAILED TO MAKE INQUIRIES WHICH WERE CALLED FOR IN T HE CIRCUMSTANCES OF THE CASE. HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE IMPUGNED ASSESSMENT ORDER FOR THE A.Y. 2013-14 U/S 143(3) OF THE INCOME TAX ACT, 1961 DATED 07.01.2016 IS DEEMED TO BE ERRONEOUS IN SO FA R AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. 16. CONSEQUENTLY, IN EXERCISE OF THE JURISDICTION C ONFERRED BY SECTION 263 OF THE ACT, THE SAID ORDER OF ASSESSMENT DATED 07.01.2016 FOR A.Y. 2013-14 IS SET ASIDE ON THE ABOVE SAID SPECIFIC ISSUE WITH A DIRECTION T O THE A.O. TO MAKE NECESSARY EXAMINATION ON THE ABOVE ISSUE AND DIRECTED TO PASS A FRESH ASSESSMENT ORDER AND RE-COMPUTE THE ASSESSEES INCOME AFTER MAKING PROPE R ENQUIRIES ON THE FOREGOING ISSUE, AFTER OFFERING REASONABLE OPPORTUN ITY TO THE ASSESSEE OF BEING HEARD. 7. AGGRIEVED BY THE ORDER OF THE LD. PCIT THE ASSES SEE IS IN APPEAL BEFORE US. 8. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFOR E US THAT THE ASSESSMENT ORDER WAS PASSED BY THE AO AFTER MAKING PROPER ENQUIRY AN D PROPER APPLICATION OF MIND THEREFORE, ASSESSMENT ORDER CANT BE TERMED AS ERRO NEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. APART FROM THIS, LD COUNSEL SU BMITTED BEFORE US A BRIEF NOTE TO EXPLAIN THE EXPRESSION 'ERRONEOUS, 'ERRONEOUS ASSE SSMENT AND 'ERRONEOUS JUDGMENT WHICH HAVE BEEN DEFINED IN BLACKS LAW DI CTIONARY 6 TH ADDITION PAGE M/S SINGHAL ENTERPRISES PVT. LTD. ITA NOS.1071 & 1072/KOL/2018 ASSESSMENT YEARS:2013-14 & 2014-15 P PP PA AA AG GG GE EE E | || | 6 66 6 542, THE SAME IS RELEVANT IN THE ASSESSEE`S CASE UN DER CONSIDERATION WHICH IS REPRODUCED BELOW: ACCORDING TO THAT DEFINITION ERRONEOUS MEANS INV OLVING ERROR, DEVIATING FROM THE LAW. 'ERRONEOUS ASSESSMENT REFERS TO AN ASSESS MENT THAT DEVIATES FROM THE LAW AND IS, THEREFORE, INVALID AND IS A DEFECT THAT IS JURISDICTIONAL IN ITS NATURE, AND DOES NOT REFER TO THE JUDGMENT OF THE ASSESSING OFFICER. SIMILARLY, 'ERRONEOUS JUDGMENT MEANS ONE RENDERED ACCORDING TO COURSE & PRACTICE OF COURT BUT CONTRARY TO LAW, UPON MISTAKEN VIEW OF LAW OR UPON ERRONEOUS APPLICATION OF LEGAL PRINCIPLES. FROM THE AFORESAID DEFINITIONS, IT IS CLEAR THAT AN ORDER CANT BE TERMED AS ERRONEOUS UNLESS IT IS NOT IN ACCORDANCE WITH LAW. IF AO ACTING IN ACCORDANCE WITH LAW, MAKES A CERTAIN ASSESSMENT, THE SAME CANNOT BE BRANDED AS ERRONEOUS SIMPLY BECAUSE OF THE FACT THAT THE COMMISSIONER IS OF THE OPINION THAT MORE ELABORATE ENQUIRIES AND INQUESTS SHOULD HAVE BEEN M ADE. ERROR SHOULD BE AN ERROR IN APPROACH, ERROR IN COM PUTATION, ERROR IN APPLYING THE RELEVANT LAW OR FACTS, OR ERROR IN SELECTING A PRINCIPLE WHICH WOULD NOT GOVERN THE FACT SITUATION. ARBITRARY EXERCISE OF QUASI JUD ICIAL POWER CERTAINLY WOULD FALL WITHIN THE SCOPE OF SECTION 263. BY RESORT TO A DIF FERENT METHOD, A LARGER TAX CAN BE LEVIED AND COLLECTED CANNOT BE THE SOLE CONSIDER ATION TO ATTRACT SECTION 263, AS PREJUDICIAL TO THE INTEREST OF REVENUE, UNLESS THE SAID METHOD IS THE ONLY MODE LEGALLY APPLICABLE (CF. S.S. MUDDANNA VS STATE OF K ARNATAKA (1963) 89 STC 90,95 (KARN.) 9. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE HA S PRIMARILY REITERATED THE STAND TAKEN BY THE LD PCIT WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND THE SAME IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 10. WE HEARD BOTH THE PARTIES AND CAREFULLY GONE TH ROUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCUMENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLU DING THE FINDINGS OF THE LD CIT(A) AND OTHER MATERIAL AVAILABLE ON RECORD. FIRS T OF ALL, WE HAVE TO SEE WHETHER THE REQUISITE JURISDICTION NECESSARY TO ASSUME REVI SIONAL JURISDICTION IS THERE EXISTING BEFORE THE PR. CIT TO EXERCISE HIS POWER. FOR THAT, WE HAVE TO EXAMINE AS TO WHETHER IN THE FIRST PLACE THE ORDER OF THE ASSE SSING OFFICER FOUND FAULT BY THE PRINCIPAL CIT IS ERRONEOUS AS WELL AS PREJUDICIAL T O THE INTEREST OF THE REVENUE. FOR THAT, LET US TAKE THE GUIDANCE OF JUDICIAL PRECEDEN CE LAID DOWN BY THE HONBLE APEX COURT IN MALABAR INDUSTRIES LTD. VS. CIT [2000 ] 243 ITR 83(SC) WHEREIN THEIR LORDSHIP HAVE HELD THAT TWIN CONDITIONS NEEDS TO BE SATISFIED BEFORE M/S SINGHAL ENTERPRISES PVT. LTD. ITA NOS.1071 & 1072/KOL/2018 ASSESSMENT YEARS:2013-14 & 2014-15 P PP PA AA AG GG GE EE E | || | 7 77 7 EXERCISING REVISIONAL JURISDICTION U/S 263 OF THE A CT BY THE CIT. THE TWIN CONDITIONS ARE THAT THE ORDER OF THE ASSESSING OFFI CER MUST BE ERRONEOUS AND SO FAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN T HE FOLLOWING CIRCUMSTANCES, THE ORDER OF THE AO CAN BE HELD TO BE ERRONEOUS ORDER, THAT IS (I) IF THE ASSESSING OFFICERS ORDER WAS PASSED ON INCORRECT ASSUMPTION OF FACT; OR (II) INCORRECT APPLICATION OF LAW; OR (III)ASSESSING OFFICERS ORD ER IS IN VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE; OR (IV) IF THE ORDER IS PASSED BY THE ASSESSING OFFICER WITHOUT APPLICATION OF MIND; (V) IF THE AO HAS NOT INVESTIG ATED THE ISSUE BEFORE HIM; THEN THE ORDER PASSED BY THE ASSESSING OFFICER CAN BE TE RMED AS ERRONEOUS ORDER. COMING NEXT TO THE SECOND LIMB, WHICH IS REQUIRED T O BE EXAMINED AS TO WHETHER THE ACTIONS OF THE AO CAN BE TERMED AS PREJUDICIAL TO THE INTEREST OF REVENUE. WHEN THIS ASPECT IS EXAMINED ONE HAS TO UNDERSTAND WHAT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIES (SUPRA) HELD THAT THIS PHRASE I.E. PREJUDICIAL TO THEINTEREST OF THE REVENUE HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING OFFICER. THEIR LORDSHIP HELD THAT IT HAS TO BE REMEMBERED THAT EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF ASS ESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTEREST OF THE REVEN UE. WHEN THE ASSESSING OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND I T HAS RESULTED IN LOSS TO THE REVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AND THE AS SESSING OFFICER HAS TAKEN ONE VIEW WITH WHICH THE CIT DOES NOT AGREE, IT CANNOT B E TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTEREST OF THE REVENUE UNLESS THE VIEW TAKEN BY THE ASSESSING OFFICER IS UNSUSTAINABLE IN LAW. 11. TAKING NOTE OF THE AFORESAID DICTUM OF LAW LAID DOWN BY THE HONBLE APEX COURT, LET US EXAMINE WHETHER ORDER PASSED BY AO U/ S 143(3) OF THE ACT, DATED 07.01.2016 IS ERRONEOUS AND PREJUDICIAL TO THE INTE REST OF REVENUE. WE NOTE THAT LD PCIT HAS OBSERVED THATTHE ASSESSEE COMPANY HAD SET OFF INTEREST OF RS.3,19,81,862/- ON BANK OVERDRAFT ACCOUNT AGAINST FD INTEREST INCOME OF RS. 3,56,89,504/- AND THE RESULTANT INTEREST INCOME OF RS. 37,07,642/- HAD BEEN SHOWN AS OTHER INCOME CHARGEABLE TO TAX. THE ASSESSEE PRE PARED THE FINANCIAL ACCOUNTS FOLLOWING THE GENERALLY ACCEPTED ACCOUNTING PRINCIP LES. AND AS PER GENERALLY M/S SINGHAL ENTERPRISES PVT. LTD. ITA NOS.1071 & 1072/KOL/2018 ASSESSMENT YEARS:2013-14 & 2014-15 P PP PA AA AG GG GE EE E | || | 8 88 8 ACCEPTED ACCOUNTING PRINCIPLES BANK OVERDRAFT FACIL ITY IS UTILIZED FOR THE PURPOSE OF WORKING CAPITAL OF THE BUSINESS AND ACCORDINGLY INTEREST ON BANK O/D SHOULD BE A BUSINESS EXPENDITURE. THEREFORE, IN THE INSTANT C ASE INTEREST ON BANK O/D SHOULD HAVE BEEN ADJUSTED WITH BUSINESS INCOME.GROSS TOTAL INCOME OF THE ASSESSEE COMPANY BEFORE ALLOWING DEDUCTION U/S 80IA WAS ASSE SSED AT RS. 11,79,50,755/-. DEDUCTION U/S 80IA ALLOWED TO THE ASSESSEE COMPANY WAS RS. 7,44,85,923/-. IF THE INTEREST ON FD WAS NOT ADJUSTED WITH INTEREST ON BA NK OVERDRAFT THEN THE TOTAL OTHER INCOME OF THE ASSESSEE COMPANY WOULD BE RS. 5 ,62,83,790/- [2,43,01,928 + 3,19,81,862]. AND INCOME COMPRISED OF PROFITS AND G AINS OF BUSINESS & PROFESSION INCOME WOULD BE RS. 6,16,66,965/- [11,79,50,755 - 5 ,62,83,790] AND ASSESSEE WOULD BE ELIGIBLE FOR DEDUCTION U/S 80IA TO THE EXT ENT OF RS. 6,16,66,965/- INSTEAD OF RS. 7,44,85,923/-. AS PER LD PCIT, THIS ISSUE WA S NOT EXAMINED BY AO AT THE TIME OF SCRUTINY ASSESSMENT U/S 143(3) OF THE ACT T HEREFORE ORDER OF THE AO WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E. THE LD COUNSEL SUBMITTED THAT OD FACILITY HAS BEEN GRANTED ON THE SECURITY OF THE FIXED DEPOSITS AND THEREFORE THE INTEREST ON OD AND INTEREST ON FD ARE INTERLINKED. SINCE THE COMPANY HAS USED ITS FD FOR TAKING OVERDR AFT FACILITIES WITHOUT EN- CASHING THE FD, THE INTEREST ON THE OVERDRAFT HAS A DIRECT NEXUS WITH THE FD INTEREST. HENCE THE INTEREST ON OD WHICH HAS A DIRE CT BEARING ON THE FD HAS BEEN ADJUSTED WITH FD INTEREST AND THE NET INTEREST INCO ME HAS BEEN SHOWN AS OTHER INCOME. THE AO HAS TAKEN ONE OF THE PLAUSIBLE VIEW OF NETTING UP OF INTEREST EXPENSES WITH INTEREST INCOME IN VIEW OF THE SUPREM E COURT JUDGMENT IN THE CASE OF ACG ASSOCIATED CAPSULES (P) LTD VS. CIT (2012) 1 8 TAXMANN. COM 137( SC). THE HON`BLE SUPREME COURT HAS DELIVERED THE JUDGMEN T IN THE CONTEXT OF SECTION 80HHC WHEREIN IT WAS HELD THATNINETY PER CENT OF TH E NET INTEREST OR NET RENT WHICH HAS BEEN INCLUDED IN THE PROFITS OF THE ASSESSEE AS COMPUTED UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION' AND N OT THE GROSS INTEREST OR GROSS RENT, IS TO BE DEDUCTED UNDER CL. (1) OF EXPLN. (BA A) TO S. 80HHC FOR DETERMINING THE PROFITS OF THE BUSINESS. THE FINDINGS OF THE HO N`BLE SUPREME COURT IS MENTIONED BELOW: M/S SINGHAL ENTERPRISES PVT. LTD. ITA NOS.1071 & 1072/KOL/2018 ASSESSMENT YEARS:2013-14 & 2014-15 P PP PA AA AG GG GE EE E | || | 9 99 9 3. FOR APPRECIATING THE SECOND ISSUE, WE MAY REFER VE RY BRIEFLY TO THE FACTS OF THE CASE. FOR THE ASST. YR. 2003-04, THE ASSESSEE FILED A RETURN OF INCOME CLAI MING A DEDUCTION OF RS. 34,44,24,827 UNDER S. 80HHC OF THE ACT. THE AO PASSED THE ASSESSMENT ORDER DEDUCTI NG NINETY PER CENT OF THE GROSS INTEREST AND GROSS RENT RECEIVED FROM THE PROFITS OF BUSINESS WHILE COMPUTI NG THE DEDUCTION UNDER S. 80HHC AND ACCORDINGLY RESTRICTED THE DEDUCTION UNDER S. 80HHC TO RS. 2,36 ,25,053. THE ASSESSEE FILED AN APPEAL AGAINST THE ASSESSMENT ORDER BEFORE THE CIT(A), WHO CONFIRMED T HE ORDER OF THE AO EXCLUDING NINETY PER CENT OF THE GROSS INTEREST AND GROSS RENT RECEIVED BY THE ASSES SEE WHILE COMPUTING THE PROFITS OF THE BUSINESS FOR THE PURPOSES OF S. 80HHC. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE INCOME-TAX APPELLATE TRIBUNAL (FOR SHORT 'THE TRIBUNAL'). THE TRIBUNAL HELD, RELY ING ON THE DECISION OF THE DELHI HIGH COURT IN CIT VS. SHRI RAM HONDA POWER EQUIP &ORS. (2007) 207 CTR (DEL) 68 9 : (2007) 289 ITR 475 (DEL), THAT NETTING OF THE INTEREST COULD BE ALLOWED IF THE ASSESSEE IS ABLE T O PROVE THE NEXUS BETWEEN THE INTEREST EXPENDITURE AND INTEREST INCOME AND REMANDED THE MATTER TO THE FILE OF THE AO. THE TRIBUNAL ALSO REMANDED THE ISSUE OF NETTING OF THE RENT TO THE AO WITH THE DIRECTION TO FIND OUT WHETHER THE ASSESSEE HAS PAID THE RENT ON THE SAME FLATS AGAINST WHICH RENT HAS BEEN RECEIVED FRO M THE STAFF AND IF SUCH RENT WAS PAID THEN SUCH REN T IS TO BE REDUCED FROM THE RENTAL INCOME FOR THE PURPOSE O F EXCLUSION OF BUSINESS INCOME FOR COMPUTING THE DEDUCTION UNDER S. 80HHC. AGAINST THE ORDER OF THE TRIBUNAL, THE REVENUE FILED AN APPEAL BEFORE THE HI GH COURT AND THE HIGH COURT HAS DIRECTED THAT ON REMAN D THE AO WILL DECIDE THE ISSUE IN ACCORDANCE WITH T HE JUDGMENT OF THE HIGH COURT IN CIT VS. ASIAN STAR CO . LTD. (2010) 231 CTR (BOM) 1 : (2010) 37 DTR (BOM) 209 : (2010) 326 ITR 56 (BOM) IN WHICH IT HAS BEEN HELD THAT WHILE DETERMINING THE PROFITS OF THE BUSI NESS AS DEFINED IN EXPLN. (BAA) TO S. 80HHC, NINETY PER CENT OF THE GROSS RECEIPTS TOWARDS INTEREST AND NOT NINETY PER CENT OF THE NET RECEIPTS TOWARDS INTEREST ON FI XED DEPOSITS IN BANKS RECEIVED BY THE ASSESSEE WOUL D BE EXCLUDED FOR THE PURPOSE OF WORKING OUT THE DEDUCTI ON UNDER S. 80HHC OF THE ACT. 4. LEARNED COUNSEL FOR THE APPELLANT SUBMITTED THAT I T WILL BE CLEAR FROM THE EXPLN. (BAA) THAT NINETY P ER CENT OF ANY RECEIPTS BY WAY OF BROKERAGE, COMMISSIO N, INTEREST, RENT, CHARGES OR ANY OTHER RECEIPT OF A SIMILAR NATURE INCLUDED IN SUCH PROFITS WILL BE EXC LUDED FOR DETERMINING THE PROFITS AND GAINS OF BUSI NESS OR PROFESSION. HE ARGUED THAT AS THE NET RECEIPTS AND NOT THE GROSS RECEIPTS TOWARDS INTEREST AND RENT AR E INCLUDED IN PROFITS AND GAINS OF BUSINESS OR PROFES SION, NINETY PER CENT OF SUCH NET INTEREST AND NET RENT AND NOT NINETY PER CENT OF GROSS INTEREST AND GROSS REN T ARE TO BE EXCLUDED FOR DETERMINING THE PROFITS OF THE BUSINESS UNDER EXPLN. (BAA) TO S. 80HHC OF THE ACT. 5. IN SUPPORT OF THIS ARGUMENT, LEARNED COUNSEL FOR T HE APPELLANT RELIED ON THE DECISION OF THIS COURT I N DISTRIBUTORS (BARODA) (P) LTD. VS. UNION OF INDIA & ORS. (1985) 47 CTR (SC) 349 : (1985) 155 ITR 120 (SC) IN WHICH A CONSTITUTION BENCH OF THIS COURT HA S HELD THAT ONLY THE DIVIDENDS COMPUTED IN ACCORDAN CE WITH THE PROVISIONS OF THE ACT, WHICH IS INCLUDED I N THE GROSS TOTAL INCOME OF THE DOMESTIC COMPANY, S HALL BE TAKEN INTO ACCOUNT FOR WORKING OUT THE RELIEF UNDER S. 80M OF THE ACT. HE CITED THE JUDGMENT IN CIT VS . SHRI RAM HONDA POWER EQUIP (SUPRA) IN WHICH THE DELHI HI GH COURT HAS TAKEN A VIEW THAT THE WORD 'INTEREST' IN EXPLN. (BAA) TO S. 80HHC CONNOTES 'NET INTEREST' AN D NOT 'GROSS INTEREST' AND, THEREFORE, IN DEDUCTING SUCH INTEREST, THE AO WILL HAVE TO TAKE INTO ACCOUNT THE NET INTEREST, I.E. GROSS INTEREST AS REDUCED BY EX PENDITURE INCURRED FOR EARNING SUCH INTEREST. HE SUBMITTED TH AT THE KARNATAKA HIGH COURT IN CIT VS. GOKULDAS EXPORTS &ORS. (2011) 333 ITR 214 (KAR) HAS TAKEN A SIMILAR VIEW RELYING ON THE DECISION OF THE HIGH CO URT IN CIT VS. SHRI RAM HONDA POWER EQUIP (SUPRA). 6. LEARNED COUNSEL FOR THE APPELLANT REFERRED TO THE M EMORANDUM TO FINANCE (NO. 2) BILL, 1991 EXPLAINING THE RATIONALE OF EXPLN. (BAA) IN WHICH INTER ALIA I T IS STATED THAT AS SOME EXPENDITURE MIGHT BE INCUR RED IN EARNING SUCH INCOMES, WHICH IN THE GENERALITY OF CA SES IS PART OF COMMON EXPENSES, AND THUS AD HOC 10 PER CENT DEDUCTION FROM SUCH INCOMES HAVE BEEN PROVIDED FOR TO ACCOUNT FOR THESE EXPENSES. HE SUBMITTED TH AT THE HIGH COURT HAS NOT CORRECTLY APPRECIATED THE ME MORANDUM AND HAS HELD, RELYING ON THE MEMORANDUM, THAT GROSS INTEREST AND GROSS RENT HAVE TO BE DEDUC TED UNDER EXPLN. (BAA) TO S. 80HHC TO AVOID A DISTO RTED FIGURE OF EXPORT PROFITS. 7. LEARNED COUNSEL FOR THE REVENUE, ON THE OTHER HAND , RELIED ON THE REASONS GIVEN BY THE BOMBAY HIGH COURT IN CIT VS. ASIAN STAR CO. LTD. (SUPRA) AND SU BMITTED THAT THE BOMBAY HIGH COURT HAS RIGHTLY HELD THAT NINETY PER CENT OF THE GROSS AMOUNT RECEIVED T OWARDS INTEREST AND RENT HAVE TO BE EXCLUDED FROM T HE PROFITS AND GAINS OF BUSINESS FOR COMPUTING THE PRO FITS OF THE BUSINESS AS DEFINED IN EXPLN. (BAA) TO S. 80HHC OF THE ACT. HE ALSO RELIED ON THE MEMORANDUM TO THE FINANCE (NO. 2) BILL, 1991 IN SUPPORT OF HIS SUBMISSION THAT NINETY PER CENT OF THE GROSS INTERE ST AND GROSS RENT HAS TO BE DEDUCTED FROM THE PROFI TS OF THE ASSESSEE UNDER EXPLN. (BAA). 8. BEFORE WE DEAL WITH THE CONTENTIONS OF LEARNED COU NSEL FOR THE PARTIES, WE MAY EXTRACT EXPLN. (BAA) T O S. 80HHC OF THE ACT : M/S SINGHAL ENTERPRISES PVT. LTD. ITA NOS.1071 & 1072/KOL/2018 ASSESSMENT YEARS:2013-14 & 2014-15 P PP PA AA AG GG GE EE E | || | 1 11 10 00 0 'EXPLANATION.FOR THE PURPOSES OF THIS SECTION, (BAA) 'PROFITS OF THE BUSINESS' MEANS THE PROFITS O F THE BUSINESS AS COMPUTED UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION' AS REDUCED BY (1) NINETY PER CENT OF ANY SUM REFERRED TO IN CLS. (IIIA), (IIIB), (IIIC), (IIID) AND (IIIE) OF S. 28 OR OF ANY RECEIPTS BY WAY OF BROKERAGE, COMMISSION, INTEREST, RENT, CH ARGES OR ANY OTHER RECEIPT OF A SIMILAR NATURE INCL UDED IN SUCH PROFITS; AND (2) THE PROFITS OF ANY BRANCH, OFFICE, WAREHOUSE OR ANY OTHER ESTABLISHMENT OF THE ASSESSEE SITUATE OU TSIDE INDIA.' 9. EXPLANATION (BAA) EXTRACTED ABOVE STATES THAT 'PRO FITS OF THE BUSINESS' MEANS THE PROFITS OF THE BUSI NESS AS COMPUTED UNDER THE HEAD 'PROFITS AND GAINS OF BU SINESS OR PROFESSION' AS REDUCED BY THE RECEIPTS OF THE NATURE MENTIONED IN CLS. (1) AND (2) OF THE EXPLN. (BAA). THUS, PROFITS OF THE BUSINESS OF AN ASSESSEE WILL HAVE TO BE FIRST COMPUTED UNDER THE HEAD 'PROFITS A ND GAINS OF BUSINESS OR PROFESSION' IN ACCORDANCE W ITH PROVISIONS OF SS. 28 TO 44D OF THE ACT. IN THE COMP UTATION OF SUCH PROFITS OF BUSINESS, ALL RECEIPTS O F INCOME WHICH ARE CHARGEABLE AS PROFITS AND GAINS OF BUSINE SS UNDER S. 28 OF THE ACT WILL HAVE TO BE INCLUDED. SIMILARLY, IN COMPUTATION OF SUCH PROFITS OF BUSINE SS, DIFFERENT EXPENSES WHICH ARE ALLOWABLE UNDER SS . 30 TO 44D HAVE TO BE ALLOWED AS EXPENSES. AFTER INCLUDING SUCH RECEIPTS OF INCOME AND AFTER DEDUCTING SUCH EXPENSES, THE TOTAL OF THE NET RECEIPTS ARE PROFITS OF THE BUSINESS OF THE ASSESSEE COMPUTED UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION' FROM WHICH DEDUCTIONS ARE TO MADE UNDER CLS. (1) AND (2) OF EXPLN. (BAA). 10. UNDER CL. (1) OF EXPLN. (BAA), NINETY PER CENT OF ANY RECEIPTS BY WAY OF BROKERAGE, COMMISSION, INTER EST, RENT, CHARGES OR ANY OTHER RECEIPT OF A SIMILAR NAT URE INCLUDED IN ANY SUCH PROFITS ARE TO BE DEDUCTED FROM THE PROFITS OF THE BUSINESS AS COMPUTED UNDER THE H EAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION'. THE EXPRESSION 'INCLUDED IN SUCH PROFITS' IN CL. (1) OF THE EXPLN. (BAA) WOULD MEAN ONLY SUCH RECEIPTS BY WAY OF BROKERAGE, COMMISSION, INTEREST, RENT, CHARGES OR A NY OTHER RECEIPT WHICH ARE INCLUDED IN THE PROFITS OF THE BUSINESS AS COMPUTED UNDER THE HEAD 'PROFITS AND GA INS OF BUSINESS OR PROFESSION'. THEREFORE, IF ANY QUANTUM OF THE RECEIPTS BY WAY OF BROKERAGE, COMMIS SION, INTEREST, RENT, CHARGES OR ANY OTHER RECEIPT OF A SIMILAR NATURE IS ALLOWED AS EXPENSES UNDER SS. 3 0 TO 44D OF THE ACT AND IS NOT INCLUDED IN THE PROF ITS OF BUSINESS AS COMPUTED UNDER THE HEAD 'PROFITS AND GA INS OF BUSINESS OR PROFESSION', NINETY PER CENT OF SUCH QUANTUM OF RECEIPTS CANNOT BE REDUCED UNDER CL . (1) OF EXPLN. (BAA) FROM THE PROFITS OF THE BUSINESS. IN OTHER WORDS, ONLY NINETY PER CENT OF T HE NET AMOUNT OF ANY RECEIPT OF THE NATURE MENTIONE D IN CL. (1) WHICH IS ACTUALLY INCLUDED IN THE PROFIT S OF THE ASSESSEE IS TO BE DEDUCTED FROM THE PROFIT S OF THE ASSESSEE FOR DETERMINING 'PROFITS OF THE BUSINESS' OF THE ASSESSEE UNDER EXPLN. (BAA) TO S. 80HHC. 11. FOR THIS INTERPRETATION OF EXPLN. (BAA) TO S. 80HH C OF THE ACT, WE RELY ON THE JUDGMENT OF THE CONSTITUTION BENCH OF THIS COURT IN DISTRIBUTORS (B ARODA) (P) LTD. VS. UNION OF INDIA &ORS. (SUPRA). S EC. 80M OF THE ACT PROVIDED FOR DEDUCTION IN RESPECT OF CERTAIN INTERCORPORATE DIVIDENDS AND IT PROVIDED I N SUB- S. (1) OF S. 80M THAT 'WHERE THE GROSS TOTAL INCOME OF AN ASSESSEE BEING A COMPANY INCLUDES ANY INCOME BY WAY OF DIVIDENDS RECEIVED BY IT FROM A DOMESTIC COM PANY, THERE SHALL, IN ACCORDANCE WITH AND SUBJECT T O THE PROVISIONS OF THIS SECTION, BE ALLOWED, IN COMPUTIN G THE TOTAL INCOME OF THE ASSESSEE, A DEDUCTION FRO M SUCH INCOME BY WAY OF DIVIDENDS AN AMOUNT EQUAL TO' A CE RTAIN PERCENTAGE OF THE INCOME MENTIONED IN THIS SECTION. THE CONSTITUTION BENCH HELD THAT THE COURT MUST CONSTRUE S. 80M ON ITS OWN LANGUAGE AND ARRIV E AT ITS TRUE INTERPRETATION ACCORDING TO THE PLAIN NATU RAL MEANING OF THE WORDS USED BY THE LEGISLATURE AN D SO CONSTRUED THE WORDS 'SUCH INCOME BY WAY OF DIVIDEND S' IN SUB-S. (1) OF S. 80M MUST BE REFERABLE NOT ON LY TO THE CATEGORY OF INCOME INCLUDED IN THE GROSS TOTAL INCOME BUT ALSO TO THE QUANTUM OF THE INCOME SO INCLUDED. SIMILARLY, EXPLN. (BAA) HAS TO BE CONSTRU ED ON ITS OWN LANGUAGE AND AS PER THE PLAIN NATURAL MEANING OF THE WORDS USED IN EXPLN. (BAA), THE WORD S 'RECEIPTS BY WAY OF BROKERAGE, COMMISSION, INTERE ST, RENT, CHARGES OR ANY OTHER RECEIPT OF A SIMILAR NAT URE INCLUDED IN SUCH PROFITS' WILL NOT ONLY REFER T O THE NATURE OF RECEIPTS BUT ALSO THE QUANTUM OF RECEIPTS INCLUDED IN THE PROFITS OF THE BUSINESS AS COMPUTE D UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSI ON' REFERRED TO IN THE FIRST PART OF THE EXPLN. (BA A). ACCORDINGLY, IF ANY QUANTUM OF ANY RECEIPT OF THE N ATURE MENTIONED IN CL. (1) OF EXPLN. (BAA) HAS NOT BEEN INCLUDED IN THE PROFITS OF BUSINESS OF AN ASSESSEE AS COMPUTED UNDER THE HEAD 'PROFITS AND GAINS OF BU SINESS OR PROFESSION', NINETY PER CENT OF SUCH QUANTUM OF THE RECEIPT CANNOT BE DEDUCTED UNDER EXPLN. (BAA) T O S. 80HHC. M/S SINGHAL ENTERPRISES PVT. LTD. ITA NOS.1071 & 1072/KOL/2018 ASSESSMENT YEARS:2013-14 & 2014-15 P PP PA AA AG GG GE EE E | || | 1 11 11 11 1 12. IF WE NOW APPLY EXPLN. (BAA) AS INTERPRETED BY US IN THIS JUDGMENT TO THE FACTS OF THE CASE BEFORE US , IF THE RENT OR INTEREST IS A RECEIPT CHARGEABLE AS PRO FITS AND GAINS OF BUSINESS AND CHARGEABLE TO TAX UN DER S. 28 OF THE ACT, AND IF ANY QUANTUM OF THE RENT OR IN TEREST OF THE ASSESSEE IS ALLOWABLE AS AN EXPENSE I N ACCORDANCE WITH SS. 30 TO 44D OF THE ACT AND IS NOT TO BE INCLUDED IN THE PROFITS OF THE BUSINESS OF T HE ASSESSEE AS COMPUTED UNDER THE HEAD 'PROFITS AND GA INS OF BUSINESS OR PROFESSION', NINETY PER CENT OF SUCH QUANTUM OF THE RECEIPT OF RENT OR INTEREST WILL NOT BE DEDUCTED UNDER CL. (1) OF EXPLN. (BAA) TO S. 80 HHC. IN OTHER WORDS, NINETY PER CENT OF NOT THE GROSS RENT OR GROSS INTEREST BUT ONLY THE NET INTEREST OR NET RENT, WHICH HAS BEEN INCLUDED IN THE PROFITS OF BUSINESS OF THE ASSESSEE AS COMPUTED UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION', IS TO BE DEDUCTED UNDER CL. (1) OF EXPLN. (BAA) TO S. 80HHC FOR DETERMINING THE PROFITS OF THE BUSINESS. 13. THE VIEW THAT WE HAVE TAKEN OF EXPLN. (BAA) TO S. 80HHC IS ALSO THE VIEW OF THE DELHI HIGH COURT IN CIT VS. SHRI RAM HONDA POWER EQUIP (SUPRA) AND THE TRIBUNAL IN THE PRESENT CASE HAS FOLLOWED THE JUDGMENT OF THE DELHI HIGH COURT. ON APPEAL BEING F ILED BY THE REVENUE AGAINST THE ORDER OF THE TRIBUN AL, THE HIGH COURT HAS SET ASIDE THE ORDER OF THE TRIBU NAL AND DIRECTED THE AO TO DISPOSE OF THE ISSUE IN ACCORDANCE WITH THE JUDGMENT OF THE BOMBAY HIGH COU RT IN CIT VS. ASIAN STAR CO. LTD. (SUPRA). WE MUST, THUS, EXAMINE WHETHER REASONS GIVEN BY THE HIGH COU RT IN ITS JUDGMENT IN CIT VS. ASIAN STAR CO. LTD. (SUPRA) WERE CORRECT IN LAW. 14. ON A PERUSAL OF THE JUDGMENT OF THE HIGH COURT IN CIT VS. ASIAN STAR CO. LTD. (SUPRA), WE FIND THAT T HE REASON WHICH WEIGHED WITH THE HIGH COURT FOR TAKING A DIFFERENT VIEW, IS THAT RENT, COMMISSION, INTERE ST AND BROKERAGE DO NOT POSSESS ANY NEXUS WITH EXPORT TURN OVER AND, THEREFORE, THE INCLUSION OF SUCH ITEMS IN THE PROFITS OF THE BUSINESS WOULD RESULT IN A DISTORTIO N OF THE FIGURE OF EXPORT PROFITS. THE HIGH COURT H AS RELIED ON A DECISION OF THIS COURT IN CIT VS. K. RAVINDRAN ATHAN NAIR (2007) 213 CTR (SC) 227 : (2007) 295 ITR 228 (SC) IN WHICH THE ISSUE RAISED BEFORE THIS COUR T WAS ENTIRELY DIFFERENT FROM THE ISSUE RAISED IN T HIS CASE. IN THAT CASE, THE ASSESSEE OWNED A FACTORY IN WHICH HE PROCESSED CASHEWNUTS GROWN IN HIS FARM AND HE EXPORTED THE CASHEWNUTS AS AN EXPORTER. AT THE SAME TIME, THE ASSESSEE PROCESSED CASHEWNUTS WHICH WERE SUPPLIED TO HIM BY EXPORTERS ON JOB WORK BASIS AND HE COLLECTED PROCESSING CHARGES FOR THE SAME. HE, HOWEVER, DID NOT INCLUDE SUCH PROCESSING CHARGES CO LLECTED ON JOB WORK BASIS IN HIS TOTAL TURNOVER FOR THE PURPOSE OF COMPUTING THE DEDUCTION UNDER S. 80HHC(3 ) OF THE ACT AND AS A RESULT THIS TURNOVER OF COLLECTION CHARGES WAS LEFT OUT IN THE COMPUTATION OF PROFITS AND GAINS OF BUSINESS OF THE ASSESSEE AN D AS A RESULT NINETY PER CENT OF THE PROFITS OF THE ASSESS EE ARISING OUT OF THE RECEIPT OF PROCESSING CHARGES WAS NOT DEDUCTED UNDER CLS. (1) OF THE EXPLN. (BAA) TO S. 8 0HHC. THIS COURT HELD THAT THE PROCESSING CHARGES W AS INCLUDED IN THE GROSS TOTAL INCOME FROM CASHEW BUSI NESS AND HENCE IN TERMS OF EXPLN. (BAA), NINETY PER CENT OF THE GROSS TOTAL INCOME ARISING FROM PROCESSING C HARGES HAD TO BE DEDUCTED UNDER EXPLN. (BAA) TO ARR IVE AT THE PROFITS OF THE BUSINESS. IN THIS CASE, THIS COURT HELD THAT THE PROCESSING CHARGES RECEIVED BY THE ASSESSEE WERE PART OF THE BUSINESS TURNOVER AND ACC ORDINGLY THE INCOME ARISING THEREFROM SHOULD HAVE B EEN INCLUDED IN THE PROFITS AND GAINS OF BUSINESS OF TH E ASSESSEE AND NINETY PER CENT OF THIS INCOME ALSO WOULD HAVE TO BE DEDUCTED UNDER EXPLN. (BAA) TO S. 80HHC OF THE ACT. IN THIS CASE, THIS COURT WAS NOT DECIDI NG THE ISSUE WHETHER NINETY PER CENT DEDUCTION IS TO B E MADE FROM THE GROSS OR NET INCOME OF ANY OF THE RECEIPTS MENTIONED IN CL. (1) OF THE EXPLN. (BAA). 15. THE BOMBAY HIGH COURT HAS ALSO RELIED ON THE MEMOR ANDUM EXPLAINING THE CLAUSES OF THE FINANCE BILL, 1991 CONTAINED IN THE CIRCULAR DT. 19TH DEC., 1991 [(1992) 101 CTR (ST) 1] OF THE CBDT TO COME T O THE CONCLUSION THAT THE PARLIAMENT INTENDED TO EXCL UDE ITEMS WHICH WERE UNRELATED TO THE EXPORT TURNOV ER FROM THE COMPUTATION OF DEDUCTION AND WHILE EXCLUDI NG SUCH ITEMS WHICH ARE UNRELATED TO EXPORT FOR THE PURPOSE OF S. 80HHC, PARLIAMENT HAS TAKEN DUE NOTE OF THE FACT THAT THE EXPORTER ASSESSEE WOULD HAVE INCURRED SUCH EXPENDITURE IN EARNING THE PROFITS AN D TO AVOID A DISTORTED FIGURE OF EXPORT PROFITS, NI NETY PER CENT OF THE RECEIPTS LIKE BROKERAGE, COMMISSION, IN TEREST, RENT, CHARGES ARE SOUGHT TO BE EXCLUDED FRO M THE PROFITS OF THE BUSINESS. IN OUR CONSIDERED OPINION, IT WAS NOT NECESSARY TO REFER TO THE EXPLANATORY MEMORANDUM WHEN THE LANGUAGE OF EXPLN. (BAA) TO S. 80HHC WAS CLEAR THAT ONLY NINETY PER CENT OF RECEIPTS BY WAY OF BROKERAGE, COMMISSION, INTEREST, RENT, CHARGES OR ANY OTHER RECEIPT OF A SIMILAR NA TURE INCLUDED IN SUCH PROFITS COMPUTED UNDER THE HEAD PR OFITS AND GAINS OF BUSINESS OF AN ASSESSEE COULD BE DEDUCTED UNDER CL. (1) OF EXPLN. (BAA) AND NOT NINE TY PER CENT OF THE QUANTUM OF ANY OF THE AFORESAID RECEIPTS WHICH ARE ALLOWED AS EXPENSES AND THEREFOR E NOT INCLUDED IN THE PROFITS OF BUSINESS OF THE AS SESSEE. 16. IN THE RESULT, WE ALLOW THE APPEAL AND SET ASIDE T HE IMPUGNED ORDER OF THE HIGH COURT AND REMAND THE MATTER TO THE AO TO WORK OUT THE DEDUCTIONS FROM RE NT AND INTEREST IN ACCORDANCE WITH THIS JUDGMENT. N O COSTS. M/S SINGHAL ENTERPRISES PVT. LTD. ITA NOS.1071 & 1072/KOL/2018 ASSESSMENT YEARS:2013-14 & 2014-15 P PP PA AA AG GG GE EE E | || | 1 11 12 22 2 THEREFORE, THE AO HAS TAKEN ONE OF THE PLAUSIBLE VI EW OF NETTING UP OF INTEREST EXPENSES WITH INTEREST INCOME IN VIEW OF THE SUPREM E COURT JUDGMENT IN THE CASE OF ACG ASSOCIATED CAPSULES (P) LTD(SUPRA), THEREFOR E, UNDER THESE CIRCUMSTANCES THE ORDER PASSED BY THE AO U/S 143(3) IS NOT ERRONE OUS. 12. WE NOTE THAT THE AO AFTER MAKING PROPER ENQUIRY AND PROPER APPLICATION OF MIND FRAMED THE ASSESSMENT U/S 143(3) OF THE ACT, T HEREFORE THE ORDER OF THE AO CANT BE TERMED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. AT THIS JUNCTURE IT IS RELEVANT AND USEFUL TO QUOTE THE PRO VISIONS OF EXPLANATION 2 TO SEC 263 OF THE ACT, WHICH IS REPRODUCED HEREUNDER READY REFERENCE; EXPLANATION 2 .FOR THE PURPOSES OF THIS SECTION, IT IS HEREBY DE CLARED THAT AN ORDER PASSED BY THE ASSESSING OFFICER SHALL BE DEEMED TO BE ERRONEOUS IN SO FARAS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, IF, IN THE OPINION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER, A) THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR VER IFICATION WHICH SHOULD HAVE BEEN MADE: B) THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT INQ UIRING INTO THE CLAIM; C) THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WITH ANY ORDER, DIRECTION OR INSTRUCTION ISSUED BY THE BOARD UNDER SECTION 119; OR D) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WITH AN Y DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE, RENDERED BY THE JURISD ICTIONAL HIGH COURT OR SUPREME COURT IN THE CASE OF THE ASSESSEE OR ANY OTHER PERS ON, DURING THE ASSESSMENT PROCEEDINGS ALL THE DETAILS A SKED FOR BY THE LD. AO HAVE BEEN DULY SUBMITTED BY ASSESSEE. THE AO VIDE SI NO- 11 OF NOTICE U/S 142(1) DATED 16.07.2015 HAD ASKED TO SUBMIT THE DETAILS, S EPARATE ACCOUNTS OF THE POWER GENERATION PLANT WITH SEPARATE CALCULATION OF PROFI T FROM IT. THE AO HAD ALSO ASKED TO SUBMIT THE FORM NO-10CCB FOR CLAIMING DEDUCTION U/S 80IA.IN THE COURSE OF HEARING ALL THE RELEVANT DETAILS AND DOCUMENTS WERE SUBMITTED BEFORE AO. IT IS ALSO EVIDENT FROM THE NOTING OF THE ASSESSMEN T ORDER MADE IN PARA-2 WHERE THE ASSESSING OFFICER HAD OBSERVED THE FOLLOWING :- IN RESPONSE TO THE SAID NOTICES, ASSESSEES A/R SHRI S.K.RAUT, F.C.A APPEAR ED FROM TIME TO TIME AND EXPLAINED THE RETURN. HE HAS ALSO SUBMITTED THE DET AILS AS AND WHEN REQUISITIONED AND THE CASE WAS HEARD. THE ASSESSEE IS A COMPANY ENGAGED IN THE MAN UFACTURING OF SPONGE IRON, INGOTS AND POWER AT ITS FACTORIES LOCATED AT RAIGARH IN CHHATTISGARH AND JHARSUGUDA IN ORISSA.. ' M/S SINGHAL ENTERPRISES PVT. LTD. ITA NOS.1071 & 1072/KOL/2018 ASSESSMENT YEARS:2013-14 & 2014-15 P PP PA AA AG GG GE EE E | || | 1 11 13 33 3 FROM THE ABOVE IT IS ABUNDANTLY CLEAR THAT LD AO H AS EXAMINED THE ISSUE OF DEDUCTION CLAIMED U/S 80IA FOR THE POWER UNIT OF TH E COMPANY. THE AO HAD EXAMINED THE DOCUMENTS AND EXPLANATIONS SUBMITTED B EFORE HIM.THEREAFTER THE AO HAD TAKEN ONE OF THE PLAUSIBLE VIEW OF NETTING U P OF INTEREST EXPENSES WITH INTEREST INCOME IN VIEW OF THE SUPREME COURT JUDGME NT IN THE CASE OF ACG ASSOCIATED CAPSULES (P) LTD(SUPRA).THEREFORE, UNDER THESE CIRCUMSTANCES IT CANNOT BE SAID THAT THE ORDER OF THE AO IS ERRONEOUS. 13.WE NOTE THAT WHEN THERE IS AN APPLICATION OF MIN D AND A DECISION HAS BEEN TAKEN BY THE A.O., THE ASSESSMENT ORDER CANNOT BE S AID TO BE ERRONEOUS UNLESS THE SAME IS POTENTIALLY WRONG OR UNLAWFUL. FOR THAT WE RELY ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF M/S. MALABAR I NDUSTRIAL CO. LTD. VS CIT (2000) 243 ITR 83 (SC)(SUPRA). FURTHER, WE NOTE THAT THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. SUNBEAM AUTO LTD. (227 CTR 133) DREW THE THIN LINE OF DIFFERENCE BETWEEN 'LACK OF INQUIRY' AND 'INADEQUATE INQUIRY' AND HELD THAT IN THE CASE OF INADEQUATE INQUIRY THERE CANNOT BE 263 ORDER. THEREFORE, WITHO UT PREJUDICE, EVEN IT IS HELD THAT THE AO HAD MADE INADEQUATE INQUIRY THEN ALSO POWERS UNDER SECTION 263 OF THE ACT CANNOT BE INVOKED UNDER THE FACTS AND CIRCUMSTA NCES OF THE CASE. THIS POSITION IS FURTHER SUPPORTED BY THE FOLLOWING JUDICIAL PRON OUNCEMENTS; CITVS. ANIL KUMAR SHARMA, 335 ITR 83 (DEL HC); RAMAKANT SINGH VS. CIT 140 TTJ 41 (PATNA ITAT); VODAFONE ESSAR SOUTH LTD. VS CIT 141 TTJ 84 (DEL IT AT); CIT VS. DEVELOPMENT CREDIT BANK LTD. 323 ITR 206 (2 010); CIT VS GABRIAL INDIA LTD. 203 ITR 108 (1993); RUSSEL PROPERTIES PVT LTD VS. CIT 109 ITR 229 (CAL) ; CITVS. VIKASH POLYMERS 341 ITR 537 (DEL); M/S SINGHAL ENTERPRISES PVT. LTD. ITA NOS.1071 & 1072/KOL/2018 ASSESSMENT YEARS:2013-14 & 2014-15 P PP PA AA AG GG GE EE E | || | 1 11 14 44 4 14. IN THIS REGARD, WE ALSO PLACE RELIANCE ON THE J UDGMENT OF DELHI HIGH COURT IN THE CASE OF FAB INDIA OVERSEAS (P) LTD. VS. CIT, 2 01 TAXMAN 173 WHEREIN UNDER THE SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE THE HON'BLE COURT OBSERVED AS UNDER: ''IN VIEW OF AFORESAID, IT IS REITERATED THAT THE A SSESSING OFFICER CALLED FOR CERTAIN CLARIFICATIONS THROUGH THE QUESTIONNAIRE OF THE ASS ESSEE AND THAT THE SAME WERE FURNISHED WITH THE REQUIRED DETAILS. THIS FACT IS E VEN TAKEN NOTE OF BY THE COMMISSIONER HIMSELF IN HIS ORDER. THE ONLY GRIEVAN CE OF THE COMMISSIONER WAS THAT THE ASSESSING OFFICER SHOULD HAVE MADE FURTHER ENQUIRIES RATHER THAN ACCEPTING THE EXPLANATION GIVEN BY THE ASSESSEE. IT CANNOT BE SAID TO BE A CASE OF LACK OF ENQUIRY. WE ACCORDINGLY, ANSWER QUESTION NO . 2 IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. ' (EMPHASIS SUPPLIED).' IN VIEW OF THE FACTS OF THE CASE AND JUDICIAL PRONO UNCEMENTS RELIED UPON, IT IS WELL ESTABLISHED THAT THE IMPUGNED ORDER PASSED U/S. 143 (3) DATED 07.01.2016 WAS PASSED AFTER CALLING FOR RELEVANT INFORMATION AND A FTER DETAILED EXAMINATION OF THE SAME. THE AO HAS PASSED THE ASSESSMENT ORDER AFTER CALLING FOR DETAILS ON THE ISSUE AND AFTER CONSIDERING THE REPLY AND DOCUMENTS AFTER VERIFICATION OF THE SAME AND AFTER DUE APPLICATION OF MIND PASSED THE ASSESS MENT ORDER, SO IT CANNOT BE TERMED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. SO, THE LD. CITS FINDING FAULT WITH THE ORDER OF THE AO IS ERR ONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE ON ACCOUNT OF LACK OF INQUI RY HAS TO FAIL. 15. IN ANY EVENT, WE NOTE THAT THE ASSESSING OFFICE R HAS ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND EVEN IF IT HAS RESULTED IN L OSS TO THE REVENUE, THE SAID DECISION OF THE ASSESSING OFFICER CANNOT BE TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AS HELD BY HONBLE SUPR EME COURT IN MALABAR INDUSTRIES LTD. VS. CIT (SUPRA). SINCE THE ORDER OF THE ASSESSING OFFICER CANNOT BE HELD TO BE ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE, IN THE FACTS AND CIRCUMSTANCES NARRATED ABOVE, THE USURPAT ION OF JURISDICTION EXERCISING REVISIONAL JURISDICTION BY THE PRINCIPAL CIT IS NOT SUSTAINING IN THE EYES OF LAW AND, THEREFORE, WE ARE INCLINED TO QUASH THE VERY ASSUMP TION OF JURISDICTION TO INVOKE REVISIONAL JURISDICTION U/S 263 BY THE PRINCIPAL CI T. THEREFORE, WE QUASH THE ORDER OF THE PRINCIPAL CIT DATED 06.03.2018, BEING AB INITIO VOID. M/S SINGHAL ENTERPRISES PVT. LTD. ITA NOS.1071 & 1072/KOL/2018 ASSESSMENT YEARS:2013-14 & 2014-15 P PP PA AA AG GG GE EE E | || | 1 11 15 55 5 16. IN THE RESULT, THE BOTH THE APPEALS OF THE ASSE SSEE ( IN ITA NO.1071 AND 1072/KOL/2018)ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 26.02.2020 SD/- ( S.S.GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE: 26/02/2020 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. M/S SINGHAL ENTERPRISES PVT. LTD. 2. DCIT, CC-4(1), KOLKATA 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATABENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES