DCIT, CHENNAI V. M/s. Hyundai Motor India Ltd., Sriperambudur

ITA 1162/CHNY/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51784 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-08-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 15-07-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Depreciation; Additional depreciation; Cost of acquisition; Competent authority; Set aside
• Section: 32(1)(iia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO. 1162/MDS/2010 (ASSESSMENT YEAR : 2005-06) THE DEPUTY COMMISSIONER OF INCOME TAX, LARGE TAXPAYER UNIT, CHENNAI 600 101. (APPELLANT) V. M/S HYUNDAI MOTOR INDIA LTD., PLOT NO.H-1, SIPCOT INDUSTRIAL PARK, IRRUNGATTUKOTTAI, SRIPERUMPUDUR, KANCHEEPURAM DISTRICT 602 105. PAN : AAACH2364M (RESPONDENT) I.T.A. NO. 808/MDS/2010 (ASSESSMENT YEAR : 2005-06) M/S HYUNDAI MOTOR INDIA LTD., PLOT NO.H-1, SIPCOT INDUSTRIAL PARK, IRRUNGATTUKOTTAI,SRIPERUMPUDUR, KANCHEEPURAM DISTRICT 602 105. (APPELLANT) V. THE ADDITIONAL COMMISSIONER OF INCOME TAX, LARGE TAXPAYER UNIT, CHENNAI 600 101. (RESPONDENT) REVENUE BY : SHRI SHAJI P. JACOB ASSESSEE BY : SHRI R. VI JAYARAGHAVAN & SHRI SAROJKUMAR PARIDA DATE OF HEARING : 18.08.2011 DATE OF PRONOUNCEMENT : 18.08.2011 I.T.A. NO. 1162 & 808/MDS/10 2 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : THESE CROSS APPEALS FILED BY THE REVENUE AND ASSE SSEE RESPECTIVELY, ARE AGAINST AN ORDER DATED 26.4.2010 OF COMMISSIONER OF INCOME TAX (APPEALS), LARGE TAXPAYER UNIT, CHENN AI, FOR ASSESSMENT YEAR 2005-06. 2. ASSESSEES APPEAL IN I.T.A. NO. 808/MDS/2010 IS TAKEN UP FIRST FOR DISPOSAL. 3. GRIEVANCE RAISED BY THE ASSESSEE IS THAT LD. CIT (APPEALS) UPHELD DETERMINATION OF ADDITIONAL DEPRECIATION AT A SUM OF ` 88,23,97,584/- AGAINST ORIGINAL CLAIM OF ` 91,33,01,997/-, RESULTING IN A DISALLOWANCE OF ` 3,09,04,434/-. 4. ASSESSEE, CARRYING ON BUSINESS OF MANUFACTURING AND TRADING IN VEHICLES AND VEHICLE COMPONENTS, HAD, DURING THE RE LEVANT PREVIOUS YEAR, CALCULATED ADDITIONAL DEPRECIATION UNDER SECT ION 32(1)(IIA) OF INCOME-TAX ACT, 1961 (IN SHORT THE ACT). AS PER THE A.O., THE CLAIM I.T.A. NO. 1162 & 808/MDS/10 3 OF ADDITIONAL DEPRECIATION WAS INFLATED AND THE WOR K-OUT FOR ARRIVING AT EXCESS AS GIVEN BY THE A.O. IS REPRODUCED HEREUNDER :- SUCH EXCESS CLAIM WAS DISALLOWED. 5. IN ITS APPEAL BEFORE LD. CIT(APPEALS), SUBMISSIO N OF THE ASSESSEE WAS THAT THE CLAIM OF ADDITIONAL DEPRECIAT ION WAS AS PER THE AUDIT CERTIFICATE IN FORM NO.3AA AND 3CD SUBMITTED ALONG WITH RETURN. ACCORDING TO ASSESSEE, ADDITIONAL DEPRECIA TION WAS CALCULATED ON ASSETS ACTUALLY ACQUIRED DURING THE R ELEVANT PREVIOUS YEAR AND DISALLOWANCE WAS NOT CALLED FOR. HOWEVER, LD. CIT(APPEALS) WAS OF THE OPINION THAT ASSESSEE HAD NOT GIVEN DETA ILS REGARDING ADDITIONAL DEPRECIATION AND HENCE, THE DISALLOWANCE WAS JUSTIFIED. (I) DEPRECIATION VALUE OF THE ADDITIONS MADE AND PUT TO USE FOR MORE THAN 180 DAYS : ` 561,53,28,185 15% ADDITIONAL DEPRECIATION : ` 84,22,99,227 LESS: CLAIMED BY THE ASSESSEE : ` 87,28,20,629 EXCESS CLAIMED : ` 3,05,21,402 (II) DEPRECIATION VALUE OF THE ADDITIONS MADE AND PUT TO USE FOR LESS THAN 180 DAYS : ` 50,37,02,684 7 % DEPRECIATION : ` 3,77,77,701 LESS: CLAIMED BY THE ASSESSEE : ` 3,81,60,712 EXCESS CLAIMED : ` 3,83,011 THE EXCESS CLAIMED OF (I) AND (II) AMOUNTING TO ` 3,09,04,413/- I.T.A. NO. 1162 & 808/MDS/10 4 6. NOW BEFORE US, LEARNED A.R. SUBMITTED THAT ADDIT IONAL DEPRECIATION CLAIMED BY THE ASSESSEE AS PER AUDIT R EPORT IN FORM NO.3AA ` 91,33,01,997/-. AGAINST THIS, ASSESSING OFFICER H AD CONSIDERED SUCH CLAIM TO BE 91,09,81,341/- WHICH RE LATED TO PLANT AND MACHINERY FALLING UNDER 25% BLOCK. ACCORDING TO HI M, FORM NO.3CD AUDIT REPORT WAS RECONCILABLE WITH FIGURES GIVEN IN AUDIT REPORT IN FORM NO.3AA AND THIS ASPECT WAS NEVER NOTED BY THE A.O. OR LD. CIT(APPEALS). THE DIFFERENCE, ACCORDING TO HIM, WA S ON ACCOUNT OF FOREIGN EXCHANGE GAINS ON LOAN TAKEN FOR ACQUISITIO N OF ASSETS IN FINANCIAL YEAR 2003-04 AND ALSO ON ACCOUNT OF ADJUS TMENT OF SALE CONSIDERATION RECEIVED ON SALE OF CERTAIN PLANT AND MACHINERY AGAINST THE ACTUAL COST OF MACHINERY ACQUIRED DURING THE RE LEVANT PREVIOUS YEAR. ACCORDING TO HIM, MACHINERY ACQUIRED DURING THE RELEVANT PREVIOUS YEAR WAS ELIGIBLE FOR ADDITIONAL DEPRECIAT ION AND THEREFORE, SALE CONSIDERATION RECEIVED ON SALE OF OLD MACHINER Y, OUGHT HAVE BEEN ADJUSTED AGAINST OPENING WDV AND NOT ON THE AC TUAL COST OF NEW MACHINERY ACQUIRED. LEARNED A.R. SUBMITTED THA T ASSESSING OFFICER NEVER GAVE AN OPPORTUNITY FOR RECONCILING T HE FIGURES GIVEN IN I.T.A. NO. 1162 & 808/MDS/10 5 FORM NO.3CD AND 3AA BUT ARBITRARILY ARRIVED AT A DI FFERENCE OF ` 3,09,04,413/- AND DISALLOWED THE AMOUNT CONSIDERING IT AS EXCESS CLAIM OF DEPRECIATION. 7. PER CONTRA, LEARNED D.R. SUBMITTED THAT ADJUSTME NT OF FOREIGN EXCHANGE GAIN FOR ARRIVING AT COST OF ACQUISITION O F A NEW ASSET WAS MANDATED BY SECTION 43A OF THE ACT. ACCORDING TO H IM, IF THE FLUCTUATION GAIN IN FOREIGN EXCHANGE RATE RELATED T O ANY LOAN RAISED BY THE ASSESSEE FOR ACQUIRING NEW PLANT AND MACHINERY, SUCH AMOUNT HAD TO BE ADJUSTED WITH THE COST OF ACQUISITION. I N ANY CASE, ACCORDING TO HIM, ASSESSEE HAD NOT PROPERLY RECONCI LED THE FIGURES GIVEN BY IT IN FORM NO.3AA AND FORM NO.3CD, BEFORE THE ASSESSING OFFICER. 8. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL C ONTENTIONS. ASSESSING OFFICER HAD STARTED HIS CALCULATION FOR W ORKING OUT ALLEGED EXCESS CLAIM OF ADDITIONAL DEPRECIATION TAKING COST OF MACHINERY ACQUIRED AND PUT TO USE FOR MORE THAN 180 DAYS ` 5,61,53,28,185/- AND COST OF MACHINERY PUT TO USE FOR LESS THAN 180 DAYS ` 50,37,02,684/-. AS PER THE LEARNED A.R., ASSESSING OFFICER HAD I.T.A. NO. 1162 & 808/MDS/10 6 CONSIDERED THE ADDITIONS FOR THE FIRST HALF OF THE RELEVANT PREVIOUS YEAR TOTALING TO ` 5,84,19,10,021 AND DEDUCTED THEREFROM FOREIGN EXCHANGE GAIN OF ` 13,60,46,154/- AND CONSIDERATION RECEIVED ON SALE OF ASSETS ` 9,05,35,682/- FOR ARRIVING AT THE SUM OF ` 5,61,53,28,185/-. ACCORDING TO HIM, THE COST OF PLANT AND MACHINERY A CQUIRED DURING THE FIRST HALF WAS ` 5,83,20,90,716/- AS PER AUDIT CERTIFICATE IN FORM NO.3AA AND THIS WAS CORRECTLY RECONCILABLE WITH FOR M NO.3CD. NO DOUBT, WE FIND THAT FIGURES ADJUSTED BY THE A.O. IN CLUDED FOREIGN EXCHANGE GAIN AND CONSIDERATION ON SALE OF ASSETS. SECTION 32(1)(IIA) OF THE ACT SPECIFIES THAT ADDITIONAL DEP RECIATION HAS TO BE CALCULATED ON ACTUAL COST OF MACHINERY OR PLANT ACQ UIRED DURING THE RELEVANT PREVIOUS YEAR. WHEN WE CONSIDER THE TERM ACTUAL COST, DEFINITION THEREOF HAS BEEN GIVEN IN SECTION 43(1) OF THE ACT. IT MEANS ACTUAL COST OF THE ASSETS TO THE ASSESSEE, RE DUCED BY THE PORTION OF THE COST, IF ANY, THAT HAS BEEN MET DIRE CTLY OR INDIRECTLY BY ANY OTHER PERSON OR AUTHORITY. BUT THIS DEFINITION HAS TO BE READ ALONG WITH SECTION 43A OF THE ACT WHICH SPECIFIES THAT AC TUAL COST HAS TO BE ADJUSTED FOR ANY INCREASE OR REDUCTION IN LIABILITY CONSEQUENT TO CHANGE IN RATE OF EXCHANGE, ON THE LOANS RAISED TO ACQUIRE SUCH I.T.A. NO. 1162 & 808/MDS/10 7 ASSET. THEREFORE, THERE IS CONSIDERABLE FORCE IN T HE CONTENTION OF THE LEARNED D.R. THAT THE FOREIGN EXCHANGE GAIN OR LOSS IF IT RELATED TO PLANT AND MACHINERY ACQUIRED DURING THE RELEVANT PR EVIOUS YEAR HAD TO BE CONSIDERED FOR ARRIVING AT ACTUAL COST. WE F IND THAT NONE OF THE AUTHORITIES BELOW HAD TAKEN INTO CONSIDERATION THE RELEVANT PROVISIONS OF THE ACT, NOR VERIFIED THE FIGURES GIVEN BY THE A SSESSEE PROPERLY. WE ALSO FIND THAT ADJUSTMENTS WERE CARRIED OUT ON T HE ACTUAL COST OF NEW PLANT AND MACHINERY ACQUIRED IN THE RELEVANT PR EVIOUS YEAR, FOR CONSIDERATION RECEIVED ON SALE OF ASSETS. BUT, WHE THER THE SALE OF ASSETS CONSIDERED BY THE A.O. WAS THAT OF PLANT AND MACHINERY INCLUDED IN THE OPENING WDV, OR OUT OF NEW ASSETS H AVE TO BE VERIFIED. WE ARE, THEREFORE, OF THE OPINION THAT T HE MATTER IN ITS ENTIRETY REQUIRES A FRESH LOOK. WE, THEREFORE, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND REMIT THE ISSUE BACK TO T HE FILE OF THE A.O. FOR CONSIDERATION AFRESH. ASSESSEE SHALL BE GIVEN OPPORTUNITY TO RECONCILE THE FIGURES AND ALSO PRODUCE SUFFICIENT E VIDENCE TO PROVE THAT FOREIGN EXCHANGE GAIN DID NOT PERTAIN THE LOAN S TAKEN FOR ACQUIRING NEW PLANT AND MACHINERY DURING THE RELEVA NT PREVIOUS YEAR, I.T.A. NO. 1162 & 808/MDS/10 8 AND ALSO TO SHOW THAT THE SALE OF ASSETS WERE NOT O F THE NEWLY ACQUIRED ITEMS BUT FROM THE OPENING WDV. ORDERED A CCORDINGLY. 9. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALL OWED FOR STATISTICAL PURPOSES. 10. NOW WE TAKE UP APPEAL OF THE REVENUE IN I.T.A. NO. 1162/MDS/2010. 11. GRIEVANCE OF THE REVENUE IS THAT LD. CIT(APPEAL S) DELETED THE ADDITION MADE TOWARDS DUTY FREE CREDIT ENTITLEMENT THOUGH ASSESSEE HAD ITSELF CREDITED SUCH AMOUNT IN THE PROFIT AND L OSS ACCOUNT. 12. ASSESSEE HAD, DURING THE RELEVANT PREVIOUS YEAR , CREDITED TO ITS PROFIT AND LOSS ACCOUNT A SUM OF ` 74,57,68,693/- AS DUTY FREE CREDIT ENTITLEMENT (DFCE). THIS WAS ACCOUNTED BY T HE ASSESSEE ON ACCRUAL BASIS. HOWEVER, WHILE COMPUTING THE TOTAL INCOME, SUCH AMOUNT WAS REDUCED. A.O. WAS OF THE OPINION THAT S ECTION 145A REQUIRED PROFITS AND GAINS OF BUSINESS TO BE ADJUST ED TO INCLUDE THE AMOUNT OF DUTY PAID OR INCURRED FOR BRINGING THE GO ODS TO ITS PLACE OF LOCATION AND CONDITION AS ON DATE OF VALUATION. AS PER THE A.O., SUCH I.T.A. NO. 1162 & 808/MDS/10 9 AMOUNT WAS TO BE CONSIDERED AS PROFITS OF THE ASSES SEE VIDE SECTION 28(IIIB) OF THE ACT. HE, THEREFORE, MADE AN ADDITI ON OF ` 74,57,68,693/-. 13. BEFORE LD. CIT(APPEALS), ASSESSEES SUBMISSION WAS THAT AGAINST EXPORT OF ` 19,39,72,47,000/-, GOVERNMENT OF INDIA HAD GRANTED DFCE LICENSE OF ` 74,57,68,693.90 ONLY ON 10.8.2005. ACCORDING TO ASSESSEE, THE AMOUNT WAS NEVER RECEIVE D AND THE SAME WAS OFFERED AS INCOME IN THE SUBSEQUENT YEAR 2006-0 7 WHEN THE LICENCE WAS RECEIVED. ASSESSEE ALSO POINTED OUT TH AT IT HAD NOT SOLD ANY OF SUCH DFCE DURING THE RELEVANT PREVIOUS YEAR, AND HENCE THERE WAS NO QUESTION OF ANY TAXATION THEREOF. THERE BEI NG NO SALE, ACCORDING TO ASSESSEE, THERE WAS NO BENEFIT WHICH C OULD BE TAXED FOR THE RELEVANT PREVIOUS YEAR. LD. CIT(APPEALS) WAS A PPRECIATIVE OF THIS CONTENTION. ACCORDING TO HIM, THOUGH ASSESSEE HAD ACCOUNTED DFCE LICENCE ON ACCRUAL BASIS, NO SUCH BENEFITS WERE REC EIVED DURING THE RELEVANT PREVIOUS YEAR. THE ACTUAL LICENCE WAS REC EIVED ONLY ON 10.8.2005 AFTER THE RELEVANT PREVIOUS YEAR AND FOR THAT YEAR, ASSESSEE HAD OFFERED IT AS INCOME. ACCORDING TO HIM, ONLY C ASH ASSISTANCE I.T.A. NO. 1162 & 808/MDS/10 10 RECEIVED OR RECEIVABLE COULD BE CONSIDERED AS INCOM E UNDER SECTION 28(IIIB) OF THE ACT. RELYING ON SECTION 28(IIIA) O F THE ACT, LD. CIT(APPEALS) WAS OF THE OPINION THAT ONLY PROFIT ON LICENCE WAS CHARGEABLE TO TAX AND ASSESSEE HAD NOT SOLD ANY PAR T OF THE LICENCE DURING RELEVANT PREVIOUS YEAR. THEREFORE, THERE WA S NO QUESTION OF TAXING SUCH AMOUNT. HE, THEREFORE, DELETED THE ADD ITION MADE BY THE A.O. 14. NOW BEFORE US, LEARNED D.R., STRONGLY ASSAILING THE ORDER OF LD. CIT(APPEALS), SUBMITTED THAT SIMILAR BENEFIT RECEIV ED BY EXPORTERS IN THE FORM OF DUTY ENTITLEMENT PASS BOOK (DEPB) WAS S UBJECT MATTER OF ADJUDICATION BY SPECIAL BENCH OF THIS TRIBUNAL IN T HE CASE OF TOPMAN EXPORTS V. ITO [318 ITR (AT) 87]. ACCORDING TO HIM , LIKE DEPB, DFCE WAS ALSO A POST EXPORT INCENTIVE AND FACE VALU E WAS CHARGEABLE TO TAX AT THE TIME OF ACCRUAL, WHICH WAS WHEN THE APPLICATION WAS FILED BY THE ASSESSEE TO THE COMPET ENT AUTHORITY, PURSUANT TO EXPORTS DONE BY IT. LEARNED D.R. SUBMI TTED THAT PROFITS ON SALE OF SUCH DFCE LICENCE COULD BE CHARGEABLE TO TAX IN THE YEAR IN WHICH IT WAS SOLD. HOWEVER, ACCORDING TO HIM, A SSESSEE HAVING ACCOUNTED ON ACCRUAL BASIS THE DFCE, IT COULD NOT R UN AWAY FROM ITS I.T.A. NO. 1162 & 808/MDS/10 11 OBLIGATION TO PAY TAX THEREOF, DESPITE FOLLOWING ME RCANTILE SYSTEM OF ACCOUNTING. 15. PER CONTRA, LEARNED A.R. SUBMITTED THAT DUTY EN TITLEMENT PASS BOOK SCHEME AND DUTY FREE CREDIT ENTITLEMENT SCHEME WERE DIFFERENT AND THEREFORE, RELIANCE PLACED ON THE DEC ISION OF SPECIAL BENCH IN THE CASE OF TOPMAN EXPORTS (SUPRA) WAS INC ORRECT. ACCORDING TO HIM, EVEN OTHERWISE, THE DECISION OF S PECIAL BENCH IN TOPMAN EXPORTS STOOD REVERSED BY HON'BLE BOMBAY HIG H COURT IN THE CASE OF CIT V. KALPATARU COLOURS AND CHEMICALS (328 ITR 451). 16. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONTENTIONS. THERE IS NO DISPUTE THAT WHAT THE ASSESSEE ACCOUNTE D DFCE VALUE ON ACCRUAL BASIS, BASED ON ITS APPLICATION FILED BE FORE THE COMPETENT AUTHORITY FOR A DUTY FREE CREDIT ENTITLEMENT CERTIF ICATE. SUCH DFCE, AS PER PUBLIC NOTICE NO.40 (RE-2003)/2002-2007 NEW DELHI: DATED 28 TH JANUARY, 2004, WAS APPLICABLE TO STATUS HOLDERS WH O HAD ACHIEVED MINIMUM EXPORT TURNOVER OF ` 25 CRORES. THE DFCE COULD BE USED FOR IMPORT OF ANY CAPITAL GOODS INCLUDING S PARES, OFFICE EQUIPMENTS, PROFESSIONAL EQUIPMENTS, OFFICE FURNITU RE AND I.T.A. NO. 1162 & 808/MDS/10 12 CONSUMABLES PROVIDED SUCH GOODS WERE FREELY IMPORTA BLE UNDER ITC(HS). THE TERM STATUS HOLDER, AS PER EXIM POL ICY, SIMPLY MEANT STATUS AS EXPORT HOUSE, TRADING HOUSE, STAR TRADING HOUSE AND SUPER STAR TRADING HOUSE. THOUGH THE A.O. HAS CONS IDERED THE DFCE ACCRUALS AS CASH ASSISTANCE UNDER SECTION 28(I IIB) OF THE ACT, OBVIOUSLY ASSESSEE HAD NOT RECEIVED ANY CASH ASSIST ANCE. IT COULD NOT, THEREFORE, FALL IN SAID SUB-CLAUSE OF THE ACT. IF WE HAVE A LOOK AT SUB-SECTIONS (IIIA) TO (IV) OF SECTION 28, IT RUNS AS UNDER:- (IIIA) PROFITS ON SALE OF A LICENCE GRANTED UNDER T HE IMPORTS (CONTROL) ORDER, 1955, MADE UNDER THE IMPORTS AND E XPORTS (CONTROL) ACT, 1947 (18 OF 1947); (IIIB) CASH ASSISTANCE (BY WHATEVER NAME CALLED) REC EIVED OR RECEIVABLE BY ANY PERSON AGAINST EXPORTS UNDER ANY SCH EME OF THE GOVERNMENT OF INDIA; (IIIC) ANY DUTY OF CUSTOMS OR EXCISE RE-PAID OR RE-PA YABLE AS DRAWBACK TO ANY PERSON AGAINST EXPORTS UNDER THE CUS TOMS AND CENTRAL EXCISE DUTIES DRAWBACK RULES, 1971; (IIID) ANY PROFIT ON TRANSFER OF THE DUTY ENTITLEMENT PASS BOOK SCHEME, BEING THE DUTY REMISSION SCHEME UNDER THE EX PORT AND IMPORT POLICY FORMULATED AND ANNOUNCED UNDER SECTION 5 OF THE FOREIGN TRADE (DEVELOPMENT AND REGULATION) ACT, 199 2 (22 OF 1992); (IIIE) ANY PROFIT ON THE TRANSFER OF THE DUTY FREE RE PLENISHMENT CERTIFICATE, BEING THE DUTY REMISSION SCHEME UNDER T HE EXPORT I.T.A. NO. 1162 & 808/MDS/10 13 AND IMPORT POLICY FORMULATED AND ANNOUNCED UNDER SEC TION 5 OF THE FOREIGN TRADE (DEVELOPMENT AND REGULATION) ACT, 1992 (22 OF 1992); (IV) THE VALUE OF ANY BENEFIT OR PERQUISITE, WHETHER CONVERTIBLE INTO MONEY OR NOT, ARISING FROM BUSINESS OR THE EXER CISE OF A PROFESSION; NONE OF THESE SUB-CLAUSES RELATE TO DFCE DIRECTLY. WHETHER SUCH DFCE SCHEME CAN BE COMPARED WITH DEPB SCHEME OR DUT Y FREE REPLENISHMENT SCHEME OR DUTY REMISSION SCHEME HAS N OT BEEN LOOKED INTO BY ANY OF THE AUTHORITIES BELOW. IT IS ALSO TO BE SEEN WHETHER SUCH AMOUNT CAN BE CONSIDERED UNDER SECTION 28(IV) OF THE ACT. WE ARE OF THE OPINION THAT THE AUTHORITIES BE LOW HAVE NOT PROPERLY VERIFIED THE SCHEME NOR GIVEN A FINDING AS TO WHICH SECTION COULD BE APPLIED THEREON. SIMILARLY, RELEVANCE OF DECISION OF SPECIAL BENCH IN TOPMAN EXPORTS (SUPRA) AS ALSO THAT OF HON 'BLE BOMBAY HIGH COURT IN KALPATARU COLOURS AND CHEMICALS (SUPR A) HAVE ALSO TO BE SEEN VIS--VIS DUTY FREE CREDIT ENTITLEMENT SCHE ME. HENCE, WE ARE OF THE OPINION THAT THE MATTER REQUIRES A RE-VI SIT BY THE A.O. WE, THEREFORE, SET ASIDE THE ORDERS OF AUTHORITIES BELO W AND REMIT THE ISSUE BACK TO THE FILE OF THE A.O. FOR FRESH CONSID ERATION DE NOVO IN I.T.A. NO. 1162 & 808/MDS/10 14 ACCORDANCE WITH LAW. ASSESSEE SHALL BE GIVEN AN OP PORTUNITY TO EXPLAIN ITS CASE. 17. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 18. TO SUMMARISE, BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON THE EIGHTEENTH DAY OF AUGUST, 2011. SD/- SD/- (GEORGE MATHAN) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 18 TH AUGUST, 2011. KRI. COPY TO: (1) ASSESSEE (2) ASSESSING OFFICER (3) CIT(A), LTU, CHENNAI (4) CIT-LTU, CHENNAI (5) D.R. (6) GUARD FILE