ACIT, Ludhiana V. M/s Hero Cycles Ltd., Ludhiana

ITA 1239/CHANDI/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9777 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-03-2016
• Assessment Year: 1996-1997
• Appeal Filed On: 27-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: SUBHASH AGGARWAL
• Keywords: Period of limitation; Revised return; Revenue expenditure; Capital expenditure

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 1239/CHD/2012 ASSESSMENT YEAR:1996-97 ACIT VS. HERO CYCLES LTD. CIRCLE V HERO NAGAR LUDHIANA G.T. ROAD LUDHIANA PAN NO. AAACH4073P (APPELLANT) (RESPONDENT) APPELLANT BY : SH. S.K.MITTAL RESPONDENT BY : SH. SUBHASH AGGARWAL DATE OF HEARING : 07/07/2016 DATE OF PRONOUNCEMENT :18/07/2016 ORDER PER ANNAPURNA GUPTA A.M. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF LD. CIT(A)- II, LUDHIANA DT. 18/09/2012. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. (A) THE LD. CIT(A)-II, LUDHIANA, ON FACTS AS WELL A S IN LAW, HAS ERRED IN DELETING THE DISALLOWANCE OF RS. 1,36,16,693/- MADE BY THE A.O. ON ACCOUNT OF EXPENDITURE OF CAPITAL NATURE. (B) THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT TH E PROJECT WAS NOT ABANDONED BY THE ASSESSEE DURING THE RELEVANT PREVIOUS YEAR A ND ACCORDINGLY THIS LOSS DID NOT ARISE DURING THE PREVIOUS YEAR. 2. THAT THE ORDER OF THE CIT(A)-II, LUDHIANA BE SET ASIDE AND THAT OF THE A.O. BE RESTORED . 3. THE ONLY ISSUE IN THE PRESENT APPEAL RELATES TO THE TREATMENT OF EXPENDITURE, INCURRED FOR THE SETTING UP OF THE BMW CAR PROJECT BY THE ASSESSEE AF RS. 1,36,16,693/-, WHETHER AS REVENUE OR CAPITAL . 4. BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE A SSESSEE HAD INCURRED EXPENDITURE OF RS. 1,36,16,693/- FOR EXPLORING THE POSSIBILITY OF SETTING UP A NEW 2 BMW CAR PROJECT, WHICH WAS SUBSEQUENTLY ABANDONED. WHILE IN THE BOOKS OF ACCOUNTS, THE ASSESSEE HAD CATEGORIZED THE EXPENDIT URE AS CAPITAL WORK IN PROGRESS, DURING ASSESSMENT PROCEEDINGS IT CLAIMED THE SAME AS REVENUE. THE AO DENIED THIS CLAIM OF THE ASSESSEE, SINCE HE WAS OF THE VIEW THAT THE ACTION OF THE ASSESSEE IN MAKING THE CLAIM IN THE COURSE OF A SSESSMENT PROCEEDINGS TANTAMOUNTED TO FILING REVISED RETURN OF INCOME, WH ICH BEING BEYOND THE PERIOD OF LIMITATION PROVIDED IN THE ACT, WAS NOT ACCEPTAB LE. THE MATTER WAS CARRIED IN APPEAL BEFORE THE LD. CIT(A) WHO UPHELD THE STAND O F THE AO. THEREAFTER THE ASSESSEE FILED AN APPEAL BEFORE THE HONBLE ITAT, W HO UPHELD THE ACTION OF THE AO, HAVING REGARD TO THE JUDGMENT OF THE HONBLE SU PREME COURT IN THE CASE OF GOETZE(INDIA) LTD. REPORTED IN 284 ITR 323, BUT AT THE SAME TIME ADMITTED THIS GROUND AS ADDITIONAL GROUND OF APPEAL FOLLOWING THE JUDGMENT OF THE APEX COURT IN THE CASE OF NTPC LTD. VS. CIT 229 ITR 383. THE HONBLE ITAT THEREAFTER RESTORED THE ISSUE TO THE FILE OF THE AO TO BE DEAL T WITH ON MERITS, SINCE THE LOWER AUTHORITIES HAD NOT ADJUDICATED THE ISSUE ON MERITS . IN PURSUANCE TO THE SAME, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE FURNISHED THE DETAILS OF EXPENDITURE ON THE PROJECT AND STATED THAT SIMIL AR EXPENDITURE INCURRED BY IT FOR THE SETTING UP OF COMMUNICATIONS AND CEMENT PRO JECT DURING THE YEAR, WHICH WAS ALSO ABANDONED, WAS ALLOWED AS REVENUE EX PENDITURE BY THE HONBLE ITAT. THE AO REJECTED THE CONTENTION OF TH E ASSESSEE ON THE GROUND THAT THE REVENUE HAD FILED AN APPEAL BEFORE THE HON BLE HIGH COURT AGAINST THE ORDER OF THE ITAT ON THE ISSUE OF ENTERTAINING THE ASSESSEES GROUND OF APPEAL AND RESTORING THE ISSUE TO THE FILE OF THE AO. 5. THE MATTER WAS CARRIED IN APPEAL BEFORE THE LD. CIT(A) WHERE THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AO, THAT SIMILAR EXPENDITURE ON TELECOMMUNICATION AND CEMENT PROJECT HAD BEEN ALLOWED BY THE ITAT IN THE IMPUGNED YEAR IN THE ASSESSEES OWN CASE, HOLDING THE EXPENSES TO HAVE BEEN INCURRED FOR THE EXPANSION OF THE EXIS TING BUSINESS OF THE ASSESSEE 3 AND NOT FOR SETTING UP OF A NEW BUSINESS. LD. CIT(A ), AFTER CONSIDERING THE ASSESSEES SUBMISSIONS, ALLOWED THE ASSESSEES APPEAL BY HOLDING THAT THE FACTS OF THE ASSESSEES CASE, IN THE CASE OF BMW CAR PROJECT WERE SIMILAR TO THE FACTS OF THE TELECOMMUNICATION AND CEMENT PROJECT AND THEREF ORE THE NATURE OF THE EXPENDITURE CLAIMED IN THE CASE OF TWO PROJECTS WAS ALSO SIMILAR. LD.CIT(A) HELD THAT SINCE THE ITAT HAD HELD THE EXPENDITURE IN THE CASE OF TELECOMMUNICATION AND CEMENT PROJECT TO BE REVENUE IN NATURE, THE ISS UE IN THE PRESENT CASE WAS SQUARELY COVERED BY THE AFORESTATED DECISION OF THE ITAT AND THE IMPUGNED EXPENDITURE WAS ALSO HELD TO BE REVENUE IN NATURE. LD. CIT(A) ALLOWED THE ASSESSEES APPEAL BY HOLDING AT PARA 5.7 OF ITS ORDE R AS FOLLOWS: 5.7 I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. IT MAY BE RELEVANT TO REFER TO THE ORDER OF THE HONBLE ITAT IN THE APPEL LANTS OWN CASE FOR THE AY 1996- 97. THE APPELLANT HAD MADE A SIMILAR CLAIM OF RS. 1 8,61,406/- ON ACCOUNT OF EXPENDITURE INCURRED ON EXPLORING THE POSSIBILITY O F EXPANDING THE BUSINESS OPERATION AND SETTING UP NEW TELECOMMUNICATION AND CEMENT PROJECT. THE HONBLE ITAT AFTER CONSIDERING THE FACT OF THE CASE , THE NATURE OF EXPENDITURE INCURRED AND THE CASE LAWS ON THE ISSUE HELD THE EX PENDITURE TO BE A REVENUE EXPENDITURE. THIS ISSUE IS DEALT WITH IN PARA 37, 3 8, 39 AND 40 OF THE ORDER OF THE HONBLE ITAT. THE FACTS OF THE APPELLANTS CASE IN THE CASE OF BMW CAR PROJECT ARE SIMILAR TO THE FACTS OF TELECOMMUNICATION AND CEMEN T PROJECT. NATURE OF EXPENDITURE CLAIMED IN THE CASE OF TWO PROJECTS IS ALSO SIMILAR. THIS ISSUE IS THEREFORE SQUARELY COVERED BY THE HONBLE ITATS CA SE REFERRED TO ABOVE. THE FOLLOWING CASE LAWS RELIED UPON BY THE APPELLANT AL SO SUPPORT THE APPELLANTS CASE: (I) COMMISSIONER OF INCOME TAX VS PRIYA VILLAGE ROA DSHOWS LTD. [2010] 228 CTR 271 (DEL) (II) INDO RAMA SYNTHETICS (I) LTD VS. COMMISSIONER OF INCOME TAX, [2010] 328 ITR 278 (DEL) (III) COMMISSIONER OF INCOME TAX VS. ESCORT AUTOMAT ICALLY COMPONENTS LTD, 323 ITR 11 (P&H) (IV) ORDER DATED 11/08/2008 OF HONBLE PUNJAB & HAR YANA HIGH COURT IN THE CASE OF CIT VS. VARDHMAN SPINNING & GENERAL MILLS IN ITR NO. 122 OF 1999. KEEPING IN VIEW THE AFORESAID FACTUAL AND LEGAL POS ITION, THIS GROUND OF APPEAL IS ALLOWED. 6. AGGRIEVED BY THE SAME THE REVENUE FILED THE PRES ENT APPEAL BEFORE US. 7. DURING THE COURSE OF HEARING BEFORE US LD. DR CO NTENDED THAT THE ISSUE OF ALLOWANCE OF CLAIM OF EXPENDITURE ON THE BMW CAR PR OJECT, WHICH WAS ADMITTED BY THE HONBLE ITAT FOR ADJUDICATION VIDE ITS ORDER DT. 30/04/2007 AND RESTORED TO THE AO FOR DECIDING ON MERIT, HAS BEEN CONTESTED BEFORE THE HONBLE HIGH COURT AND SINCE THE MATTER WAS STILL P ENDING BEFORE THE HIGH COURT 4 THE ISSUE CANNOT BE DECIDED IN FAVOUR OF THE ASSESS EE. ALTERNATIVELY, LD. DR ARGUED THAT THE DECISION OF THE ITAT IN THE ASSESSE ES CASE IN THE IMPUGNED ASSESSMENT YEAR , IN RELATION TO ALLOWANCE OF EXPEN DITURE ON THE TELECOMMUNICATION AND CEMENT PROJECT, CANNOT APPLY TO THE PRESENT ISSUE IN HAND. LD. DR FURTHER RELIED UPON THE ORDER OF THE A O AND STATED THAT THE EXPENDITURE INCURRED ON THE BMW PROJECT TANTAMOUNTE D TO BRINGING INTO EXISTENCE A NEW BUSINESS AND THEREFORE SHOULD BE TR EATED AS A CAPITAL EXPENDITURE. 8. THE LD. AR ON THE OTHER HAND ARGUED THAT MERELY BECAUSE THE REVENUE HAD FILED AN APPEAL AGAINST THE ORDER OF THE ITAT T O THE HIGH COURT AGAINST THE ADMISSION OF THE ASSESSEES GROUND OF APPEAL ON THE IMPUGNED ISSUE, IT CANNOT BE SAID THAT THE ISSUE CANNOT BE DECIDED ON MERITS BY THE HONBLE ITAT. LD. AR FURTHER STATED THAT THE LD. CIT(A) HAD CORRECTLY HE LD THAT THE FACTS IN THE PRESENT CASE WERE IDENTICAL TO THAT IN THE CASE OF EXPENDIT URE INCURRED BY THE ASSESSEE ON THE TELECOMMUNICATION & CEMENT PROJECT AND SINCE THAT EXPENDITURE HAD BEEN HELD BY THE ITAT VIDE ITS ORDER DT. 30/04/2007 TO HAVE BEEN INCURRED FOR THE PURPOSE OF EXPANSION OF THE EXISTING BUSINESS AND N OT FOR THE PURPOSE OF SETTING UP OF A NEW BUSINESS, THE SAME APPLIES TO THE PRESE NT ISSUE ALSO AND IS THEREFORE TO BE TREATED AS REVENUE EXPENDITURE. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND ALSO THE DOCUMENTS PLACED BEF ORE US. 10. WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CI T(A) TREATING THE IMPUGNED EXPENDITURE AS REVENUE. THE LD. CIT(A) HAD GIVEN A CLEAR FINDING, THAT THE FACTS RELATING TO THE IMPUGNED ISSUE ARE SIMILAR TO THE F ACTS RELATING TO THE EXPENDITURE INCURRED FOR THE SETTING UP OF TELECOMM UNICATION & CEMENT PROJECT, AND THEREFORE THE FINDINGS OF THE HONBLE ITAT ON THAT ISSUE APPLY IN THE PRESENT CASE ALSO. WE FIND THAT NATURE OF EXPENSES INCURRED ON BOTH THE PROJECTS AND CLAIMED AS REVENUE ARE SIMILAR. WHILE THE EXPEN SES INCURRED ON THE 5 TELECOMMUNICATION & CEMENT PROJECT AS MENTIONED IN THE ORDER OF THE ITAT WERE IN THE NATURE OF TRAVELLING, CONSULTANCY, PROF ESSIONAL CHARGES, CONDUCTING OF FEASIBILITY STATUS, TRAVEL RELATED TO CONSULTANT S ETC., THE NATURE OF EXPENDITURE INCURRED ON THE BMW CAR PROJECT HAVE BEEN REPRODUCE D AT PAGE 3 OF THE ASSESSMENT ORDER AS FOLLOWS: (A) LEGAL & PROFESSIONAL 11,63,963/- (B) PROMOTION 11,87,774/- (C) SALARY (PERSONNEL EXP.) 18,85,905/- (D) ADVT. 6,870/- (E) CONVEYANCE 4,57,386/- (F) TRAVELLING (FOREIGN / DOMESTIC) 63,75,489/- (G) MISC. EXPENDITURE. 1,27,899/- (H) STAFF WELFARE 1,00,307/- (I) ENTERTAINMENT 7,06,846/- (J) RENT 15,22,999/- (K) TELEPHONE / ELECTRICITY 81,255/- TOTAL 1,36,16,693/- THE PERUSAL OF THE SAME SHOWS THAT THE NATURE OF EX PENDITURE IN BOTH THE CASES WAS GENERAL. FURTHER UNDISPUTEDLY BOTH THE PROJECTS AND ALSO THE EXISTING BUSINESS OF THE ASSESSEE WERE IN THE NATURE OF MANUFACTURING ACTIVI TIES. WHILE THE EXISTING BUSINESS OF THE ASSESSEE WAS OF MANUFACTURING BICYC LE, BICYCLE PARTS ETC. THE PROPOSED TELECOMMUNICATION AND CEMENT PROJECT RELAT ED TO MANUFACTURING OF CEMENT AND TELECOMMUNICATION AND THE BMW CAR PROJEC T WAS ALSO A MANUFACTURING PROJECT. MOREOVER, THERE IS NO DISPUT ING THE FACT THAT THE FUNDS AND MANAGEMENT OF THE EXISTING BUSINESS AND BOTH TH E NEW PROJECTS WAS COMMON AND THERE WAS COMPLETE UNITY OF CONTROL. ON THIS FACTUAL MATRIX, THE HONBLE ITAT, WE FIND, HAD HELD IN THE CASE OF EXPE NDITURE INCURRED ON THE TELECOMMUNICATION AND CEMENT PROJECT, TO BE FOR EXP ANSION OF THE EXISTING PROJECT AND NOT SETTING UP A NEW PROJECT. THE RELEV ANT FINDINGS OF THE ITAT AT PARA 37-39 OF ITS ORDER AS FOLLOWS: 37. NOW WE MAY TAKE UP FOR CONSIDERATION THE REMAINING LIMB OF THE DISALLOWANCE AMOUNTING TO RS.18,61,406/-. THE ASSESSEE COMPANY IS ENGAGED IN THE MANUFACTURE AND SALE OF CYCLE AND CYCLE PARTS. THE ASSESSEE EXPLORED A POSSIBILITY OF EXTENDING ITS BUSINESS OP ERATIONS AND SETTING UP NEW TELECOMMUNICATION AND CEMENT PROJECT S. FOR THIS ENDEAVOUR THE ASSESSEE INCURRED AN EXPENDITURE OF RS.18,61,406/- WHICH WAS CLAIMED AS REVENUE EXPENDI TURE. THE DETAILS OF THE SAID EXPENDITURE HAVE BEEN PLACED IN THE PAPER 6 BOOK AT PAGES 48 TO 49. THE EXPENDITURE HAS BEEN I NCURRED UNDER VARIOUS HEADS NAMELY TRAVELING, CONSULTANCY, PROFESSIONAL CHARGES, CONDUCTING OF FEASIBILITY STA TUS, TRAVEL RELATED TO CONSULTANTS ETC. BOTH THE ASSESSING OFF ICER AS WELL AS THE CIT(APPEALS) HAS HELD THAT THE EXPENDITURE I N QUESTION WAS A CAPITAL EXPENDITURE. THE REASONING ADVANCED BY THE ASSESSING OFFICER IS THAT SINCE THE ASSESSEE ITSELF HAS TREATED THIS EXPENDITURE AS CAPITAL EXPENDITURE IN THE BOOK S OF ACCOUNT, THE SAME CANNOT BE ALLOWED AS REVENUE EXPE NDITURE IN THE TAX PROCEEDINGS. THE CIT(APPEALS) FURTHER H ELD THAT SINCE THE EXPENDITURE RELATED TO A NEW BUSINESS THE REFORE IT WAS A CAPITAL EXPENDITURE. 38. IN OUR VIEW THE FIRST AND THE FOREMOST ISSUE T O BE DECIDED IS AS TO WHETHER THE PROPOSED BUSINESS OF T HE ASSESSEE NAMELY TELECOMMUNICATION AND CEMENT PROJEC T WAS A NEW BUSINESS OR AN EXTENSION OF THE EXISTING BUSI NESS OF THE ASSESSEE. IF IT IS FOUND THAT THE NEW PROPOSED BUS INESS, WHICH HAS OF COURSE BEING ABANDONED, WAS A NEW BUSINESS, THE EXPENDITURE RELATABLE THERETO WOULD CERTAINLY QUALI FY TO BE A CAPITAL EXPENDITURE. IF, ON THE OTHER HAND, IF IT IS FOUND THAT IT WAS ONLY AN EXTENSION OF THE EXISTING BUSINESS AND NOT A NEW BUSINESS, THE EXPENDITURES RELATING THERETO IS TO B E ALLOWED AS A REVENUE EXPENDITURE SUBJECT TO VERIFYING THE NAT URE OF THE EXPENDITURE IN QUESTION. THE ASSESSEE PRESENTLY IS IN THE BUSINESS OF MANUFACTURE OF CYCLE AND CYCLE PARTS. T HERE IS NO DENYING THE FACTUM OF UNITY OF CONTROL AND INTERLAC ING OF FUNDS OF THE PROPOSED PROJECT WITH THE EXISTING BUS INESS OF THE ASSESSEE. IN THIS CONTEXT WE MAY REFER TO THE DECIS ION OF THE DELHI HIGH COURT IN THE CASE OF CIT VS MODI INDUSTR IES LTD. (NO.3) 200 ITR 341. IN THAT CASE THE ASSESSEE WAS MANUFACTURING VARIOUS COMMODITIES LIKE SUGAR, VANAS PATI, SOAPS, PAINTS AND VARNISH, TORCH AND LANTERN, IT ST ARTED MANUFACTURING A NEW COMMODITY, VIZ, SPECIAL ALLOY W IRE AND BILLETS. THE HON'BLE HIGH COURT HELD THAT THE BUSIN ESS OF MANUFACTURE OF SPECIAL ALLOYS AND BILLETS WAS MEREL Y AN EXPANSION OF BUSINESS AND NOT A NEW BUSINESS. THE HON'BLE HIGH COURT HELD AS UNDER: IN A LARGER SENSE THE BUSINESS OF THE ASSESSEE REM AINED THE SAME VIZ., THE BUSINESS OF MANUFACTURE. IT WAS ALR EADY MANUFACTURING DIVERSE ITEMS AND A NEW ITEM WAS ADDE D TO THIS BUSINESS. THE FACTS FOUND BY THE TRIBUNAL ARE THAT THERE WAS COMPLETE UNITY OF CONTROL AND THERE WAS A COMMO N FUND AND THESE FACTORS HAVE BEEN REGARDED AS MOST MATERI AL BY THE SUPREME COURT AS IS EVIDENT FROM THE CASE OF ST ANDARD REFINERY AND DISTILLERY LTD. (1971) 79 ITR 589 (S.C ) AND THE OTHER CASES REFERRED TO THEREIN. 39. IN OUR VIEW THE RATIO OF THE ABOVE DECISION SQUARELY APPLIES IN THE INSTANT CASE. THE ASSESSEE IS ALREADY IN THE BUSINESS OF MANUFACTURING VARIOUS ARTICLES VIZ BICYCLES, BICYCLE PARTS ETC. AND THE PROPOSED PROJECT OF TELECOMMUNICATIONS AND CEMENT PROJECT WAS ONLY AN EXTENSION OF ITS EXISTING BUSINESS AND THERE WAS A COMPLETE UNITY OF CONTROL AND A COMMON FUND. THEREFORE, THE EXPENDITURES INCURRED IN CONNECTION WITH THE EXPANS ION OF EXISTING BUSINESS OF THE ASSESSEE TO SET UP A NEW TELECOMMUNICATION AND CEMENT PROJECT UNDER THE SAME MANAGEMENT WITH COMMON ADMINISTRATIVE CONTROL WAS A N ALLOWABLE EXPENDITURE. IN THE INSTANT CASE THE EXP ENDITURE IS TO BE TREATED AS INCURRED FOR THE EXPANSION OF THE EXISTING BUSINESS, THOUGH THE OBJECT OF SETTING UP OF THE PR OJECT CONTEMPLATED, ON WHICH EXPENDITURE WAS INCURRED, DI D NOT ULTIMATELY MATERIALIZE. THE HON'BLE CALCUTTA HIGH C OURT IN THE CASE OF WOODCRAFT PRODUCTS LTD. (SUPRA), IN A SIMIL AR SITUATION, HELD THAT MAY BE THE EXPENDITURE IS ABORTED BUT ITS CHARACTER 7 AS A REVENUE EXPENDITURE INCURRED FOR THE PURPOSE O F THE EXPANSION OF EXISTING BUSINESS CANNOT BE DISREGARDE D AND WAS HELD ALLOWABLE AS A REVENUE EXPENDITURE. HAVING RE GARD TO THE AFORESAID DISCUSSION, THE IMPUGNED EXPENDITURE, IN OUR VIEW IS ALLOWABLE AS A REVENUE EXPENDITURE. SINCE THE FACTS RELATING TO THE EXPENDITURE INCURRE D ON THE BMW CAR PROJECT ARE SIMILAR TO THAT OF THE TELECOM & CEMENT PROJECT AND THE LD. DR HAVING NOT BROUGHT TO OUR NOTICE ANY DISTINGUISHING FACT WE HO LD THAT THE LD. CIT(A), HAS RIGHTLY APPLIED THE RATIO OF THE ITAT ON ISSUE IN T HE PRESENT CASE AND THEREBY TREATED THE IMPUGNED EXPENDITURE AS REVENUE IN NATU RE. THE ARGUMENT OF THE LD. DR THAT SINCE THE ADMISSION OF THE CLAIM OF EXPENDITURE HAS BEEN CHALLENGED BEFORE THE HIGH COURT, THE SAME CANNOT BE DEALT WITH ON MERITS, WE FIND HAS NO SUBSTANCE. IT HAS BEEN STATE D AT BAR BY THE COUNSEL OF THE ASSESSEE, THAT THE MATTER BEFORE THE HONBLE HIGH C OURT IS STILL PENDING AND FURTHER THERE IS NO STAY AGAINST THE OPERATION OF T HE ORDER OF THE HONBLE ITAT. IN SUCH CIRCUMSTANCES, THE ORDER OF THE ITAT STANDS. T HE PRESENT APPEAL HAVING ARISEN AS A CONSEQUENCE TO THE ORDER OF THE ITAT, T HE SAME HAS TO BE ADJUDICATED UPON AND THERE IS NO BAR, IN THE EYES O F LAW, AGAINST THE SAME. IN VIEW OF THE ABOVE WE UPHOLD THE ORDER OF THE LD. CIT(A) TREATING THE EXPENDITURE ON SETTING UP OF BMW CAR PROJECT AMOUNT ING TO RS. 1,36,16,693/- AS REVENUE IN NATURE. 11. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :18/07/2016 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR