DCIT, CC-XI, KOLKATA, Kolkata V. M/s Himalaya Granites Pvt. Ltd., Kolkata

ITA 1281/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1882 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2017
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 06-04-2017
• Assessment Year: 2003-2004
• Appeal Filed On: 05-06-2014
• Court: TRIBUNAL
• Department Lawyers: RAJAT KUMAR KUREEL J
• Assessee Lawyers: A K TULSYAN
• Keywords: Depreciation; Tax effect
• Section: 80HHC; 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENC H KOLKATA BEFORE SHRI N.V.VASUDEVAN, JM & DR. A.L.SAINI, AM ITA NO.1280, 1281 & 1283/KOL/2014 ( / ASSESSMENT YEARS :2002-03, 2003-04 & 2006-07) DCIT, CC-XI, ROOM NO.311,3 RD FL. AAYAKAR BHAWAN POORVA, 110- SHANTIPALLY, KOLKATA- 700107 VS. M/S HIMALAYA GRANITES PVT. LTD. 16A, SHAKESPEARE SARANI, KOLKATA-700071 ./ ./PAN/GIR NO. : AAACH 5121 L ( /APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI RAJAT KUMAR KUREEL, JCIT(DR) /ASSESSEE BY : A.K. TULSYAN, AR / DATE OF HEARING : 06/04/2017 /DATE OF PRONOUNCEMENT 26/04/2017 / O R D E R PER DR. ARJUN LAL SAINI, AM: THESE THREE CAPTIONED APPEALS FILED BY THE REVENUE , PERTAINING TO ASSESSMENT YEARS 2002-03, 2003-04 AND 2006-07, ARE DIRECTED AGAINST ORDERS PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) CENTRAL- III, KOLKATA, IN APPEAL NO.167 & 168 & 166/CC-II/CI T(A) C-III/2008-09/ KOLKATA, DATED 31.03.2014, 07.04.2014 & 07.04.2014, WHICH IN TURN ARISE OUT OF ASSESSMENT ORDERS PASSED BY THE ASSESSING OF FICER U/S.147/263/143(3) OF THE INCOME TAX ACT 1961, (HER EINAFTER REFERRED TO AS THE ACT), ALL DATED 31.12.2008. 2. THESE APPEALS RELATE TO SAME ASSESSEE, PERTAIN ING TO DIFFERENT ASSESSMENT YEARS AND COMMON ISSUES INVOLVED THEREFO RE, THESE HAVE BEEN CLUBBED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. APP EAL OF REVENUE IN ITA NO. 1281/K/2014 IS TAKEN AS A LEAD CASE. ITA NO.1280/1281/1283/KOL/2014 M/S HIMALAYA GRANITES PVT. LTD. 2 3. THE FACTS OF THE CASE IS THAT THE ASSESSEE COMP ANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF GRANITE MONUMENTS, MIN ING OF GRANITE BLOCKS AND PROCESSING OF DIMENSIONAL GRANITE BLOCKS. THE C OMPANY ALSO DOES EXPORT OF GOODS AND CLAIMS DEDUCTIONS UNDER SECTION 80HHC. THE COMPANY HAVE FIXED ASSETS, BY NAME, QUARRY LAND & D EVELOPMENT AND CLAIMS DEPRECIATION THEREON. THE ASSESSING DISALLOW ED THE DEPRECIATION ON QUARRY LAND & DEVELOPMENT BASED ON THE COMMENT G IVEN BY THE TAX AUDITOR IN TAX AUDIT REPORT. THE TAX AUDITOR STATED THAT CREATION OF BLOCK OF ASSETS IS NOT IN CONFORMITY WITH THE PROVISIONS OF SECTION 2(11) ON THE INCOME TAX ACT, 1961 THEREFORE, THE DEPRECIATION AL LOWABLE TO THE COMPANY IS NOT IN ACCORDANCE WITH SECTION 32 OF THE ACT AND BASED ON THESE COMMENTS THE ASSESSING OFFICER HELD THAT ASSE SSEE COMPANY IS NOT ENTITLED TO CLAIM THE DEPRECIATION ON QUARRY AND LA ND DEVELOPMENT. THE ASSESSING OFFICER ALSO DISALLOWED THE CLAIM OF THE ASSESSEE UNDER SECTION 80HHC STATING THAT DIFFERENT HIGH COURTS HAVE GIVEN DIFFERENT VIEWS ON THE SAME ISSUE AND THE LAW IS NOT SETTLED ON THE ISSUE. 4. NOT BEING SATISFIED WITH THE ORDER OF THE ASSESS ING OFFICER, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(APPEALS), WHO HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. IN RESPECT OF THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DEDUCTION UN DER SECTION 80HHC, THE LD. CIT(APPEALS) HELD THAT THE EXPLANATION (BAA ) TO SECTION 80HHC IMPLICITLY IMPLIES NET OF INTEREST, THEREFORE HE DIRECTED THE ASSESSING OFFICER TO TAKE THE NET OF INTEREST TO COMPUTE T HE DEDUCTION UNDER SECTION 80HHC. THE LD. CIT(APPEALS) OBSERVED THAT I F BORROWED MONEY IS ITA NO.1280/1281/1283/KOL/2014 M/S HIMALAYA GRANITES PVT. LTD. 3 UTILIZED FOR MAKING ADVANCES ON WHICH INTEREST IS R ECEIVED, THEN INTEREST PAID ON SUCH BORROWING SHOULD BE REDUCED FROM INTER EST RECEIVED AND FROM THE RESULTANT AMOUNT, BEING NET INTEREST, 90% IS TO BE REDUCED AS PER EXPLANATION (BAA) TO SECTION 80HHC(4B) FOR WORKING OUT DEDUCTION. THE EXPLANATION (BAA) PROVIDES FOR REDUCTION OF 90% OF RECEIPT BY WAY OF INTEREST INCLUDED IN SUCH INTEREST, THEREFORE, ONE HAS TO CONSIDER ONLY SUCH RECEIPT BY WAY OF INTEREST, WHICH IS INCLUDED IN PR OFIT. IF THE CONTENTION OF THE REVENUE THAT 90% OF GROSS RECEIPT WAS TO BE CON SIDERED IGNORING INTEREST PAYMENT, WAS ACCEPTED, THE WORDS INCLUD ED IN SUCH PROFIT WOULD BE REDUNDANT. MOREOVER, IF PROFIT WAS COMPUTED AS P LEADED BY THE REVENUE, IT WOULD GIVE A DISTORTED FEATURE OF EXPOR T PROFIT. THEREFORE, ONLY NET INTEREST CAN BE DISALLOWED AND NOT GROSS INT EREST. BASED ON THIS, THE LD. CIT(APPEALS) DIRECTED THE ASSESSING OFFICER TO TAKE INTO ACCOUNT THE NET INTEREST. 5. REGARDING CLAIM FOR DEPRECIATION UNDER SECTION 3 2 ON QUARRY LAND & DEVELOPMENT, THE LD. CIT(APPEALS) OBSERVED THAT A S PER BOOKS OF ACCOUNT THE ASESSEE HAS BEEN MAINTAINING FOR THE DE PRECIATION IN THE ACCOUNTING MANNER OF GROUP DEPRECIATION METHOD/DECL INING BALANCE METHOD. CONSIDERING THE NATURE OF THE BUSINESS, THI S WOULD HAVE BEEN THE APPROPRIATE ACCOUNTING METHOD TO PROVIDE FOR THE DE PRECIATION IN THE BOOKS OF ACCOUNT. BUT FOR INCOME-TAX PURPOSES, FOR COMPUTING THE DEPRECIATION ALLOWANCE, THE DIFFERENT CLASS OF ASSE TS COMPRISED IN THE PROJECT, I.E. QUARRIES, HAS TO BE REARRANGED AS PER THE BLOCK OF ASSETS AND THE APPROPRIATE DEPRECIATION RATE ALLOWABLE AS PER THE DEPRECIATION TABLE ITA NO.1280/1281/1283/KOL/2014 M/S HIMALAYA GRANITES PVT. LTD. 4 IN THE INCOME TAX RULES. THE LD. CIT(APPEALS) OBSER VED THAT THE DEPRECIATION UPON GROUPING THE RESPECTIVE ASSETS UN DER THE RESPECTIVE BLOCK OF ASSET AND COMPARED WITH ORIGINAL CLAIM IN INCOME TAX RETURN, THE ASSESSEE HAS REARRANGED UNDER THE APPROPRIATE BLOC K OF ASSET FOR ALL THE FIVE QUARRIES (AT SENDUR, TITLAGARH, JAGALPET, CHAR ANADASPURAM & GOURALA). THE LD. CIT(APPEALS) SATISFIED WITH THE A RRANGEMENT OF THE DIFFERENT INTANGIBLE ASSETS UNDER THE APPROPRIATE B LOCK OF ASSETS AND THE APPLICABLE RATE OF DEPRECIATION AS PER THE INCOME T AX RULES DONE BY THE ASSESSEE. HOWEVER, THE LD. CIT(APPEALS) OBSERVED TH AT THERE IS A SLIGHT VARIATION AS REGARDS LEASE PREMIUM OF QUARRIES, W HICH IS A INTANGIBLE ASSET BEING IN THE NATURE OF LICENSE FOR COMMERCIAL RIGHT, AND FOR WHICH THE PRESCRIBED RATE OF DEPRECIATION AS PER THE INCOME T AX RULES IS AT 25%. HOWEVER, THE ASSESSEE HAS CLAIMED AT MUCH LESSER AL LOWANCE BY ADOPTING THE LEASE YEARS DURATION PERIODS AS BASIS. THE LD. CIT(APPEALS) CONSIDERED THE SAID METHOD ADOPTED BY THE ASSESESE AS AN APPROPRIATE METHOD CONSIDERING THE NATURE OF THE LONG LEASE PER IODS. THE LD. CIT(APPEALS) ALSO OBSERVED THAT THE ASSESSING OFFIC ER HAS DISALLOWED DEPRECIATION CLAIMED ON THE QUARRY LAND & DEVELOPME NT, MAINLY BASED ON THE TAX AUDIT REPORT, WHICH IS TOTALLY WRONG. TH E TAX AUDITOR DID NOT PUT ANY REMARK IN THE TAX AUDIT REPORT THAT THE ASSESSE E IS NOT ELIGIBLE TO CLAIM DEPRECIATION. THEREFORE, THE END NOTE REMARK OF THE TAX AUDITOR IS NOT SO MUCH IN THE CONTEXT THAT THE CLAIM IS WRONG IN TOTO BUT THAT THE MANNER OF PRESENTATION AS A SEPARATE BLOCK OF ASSET S IS NOT IN CONFORMITY WITH SECTION 2(11), WHICH REQUIRES THAT THE BLOCK O F ASSETS BE BUILDINS, ITA NO.1280/1281/1283/KOL/2014 M/S HIMALAYA GRANITES PVT. LTD. 5 MAXHINERY , PLANT AND FURNITURE. THERE IS NO DISPUT E ABOUT THE EXISTENCE OF THE ASSETS, DEPRECIATION WILL HAVE TO BE ALLOWED . THE ISSUE WAS SIMPLY, CONSIDERING THE VERY NATURE OF THE BUSINESS OF QUAR RIES, TO REARRANGING THE DIFFERENT ASSETS AS PER THE APPROPRIATE CLASS OF AS SETS, AND BLOCK OF ASSETS AS PER THE INCOME TAX RULES. BASED ON THE AB OVE FINDINGS, THE LD. CIT(APPEALS) HAD DIRECTED THE ASSESSING OFFICER TO ALLOW THE DEPRECIATION CLAIM OF THE ASSESSEE AT RS.28,70,141/-. 6. NOT BEING SATISFIED WITH THE ORDER OF THE LD. CI T(APPEALS), THE REVENUE IS IN APPEAL BEFORE US AND HAS TAKEN THE FO LLOWING GROUNDS OF APPEAL:- (I) THAT ON THE FACTS AND CIRCUMSTANCES AND IN LAW LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF DEPRECIATION ON QUARRY LAND & DEVELOPMENT AMOUNTING TO RS.29,42,646/- MADE BY THE ASSESSING OFFICER IN ACCORDANCE WITH THE PROVISIONS OF SECTION 32 OF I.T . ACT. (II) THAT ON THE FACTS AND CIRCUMSTANCES AND IN LAW LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF DEDUCTION U/S 80HHC OF I.T. ACT MADE BY THE ASSESSI NG OFFICER IN ACCORDANCE WITH THE PROVISIONS OF THE I. T. ACT. (III) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE ORDER OF THE LD. CIT(A) BE VACATED AND THE ORDER OF THE ASSESSING OFFICER BE RESTORED. 7. THE FIRST GROUND RAISED BY THE REVENUE RELATES T O THE DEPRECIATION ON QUARRY LAND & DEVELOPMENT AMOUNTING TO RS.29,42,646/-. ITA NO.1280/1281/1283/KOL/2014 M/S HIMALAYA GRANITES PVT. LTD. 6 7.1. THE LD. D.R. FOR THE REVENUE HAS PRIMARILY REI TERATED THE STAND TAKEN BY THE ASSESSING OFFICER, WHICH WE HAVE ALREA DY NOTED IN OUR EARLIER PARA, AND IS NOT BEING REPEATED FOR THE SAKE OF BRE VITY. 7.2. THE LD. A.R. FOR THE ASSESSEE HAS SUBMITTED TH AT THE ASSESSING OFFICER DISALLOWED THE CLAIM OF DEPRECIATION ON QUA RRY LAND & DEVELOPMENT BASED ON THE CLARIFICATION OF THE TAX A UDIT REPORT, WHICH IS ENTIRELY WRONG. THE TAX AUDITOR IN HIS TAX AUDIT RE PORT DO NOT SAY ANYTHING THAT THE ASSESSEE IS NOT ELIGIBLE TO CLAIM THE DEPRECIATION, HE HAS JUST EXPLAINED THAT THERE IS NO BLOCK FOR SUCH ASSE T IN THE INCOME TAX ACT TO CLAIM DEPRECIATION U/S 32 OF THE ACT. THE LD. A. R. FURTHER EXPLAINED THE NATURE OF PREMIUM FOR QUARRY IS THAT, THE ASSESSE E MAKES THE PAYMENT TO THE GOVERNMENT AND THE GOVERNMENT ALLOWS THE AS SESSEE TO EXPLOIT THE NATURAL RESOURCE OF GRANITE FOR SOME PERIOD. IT MAY BE NOTED THAT UNDER THE CONSTITUTION, ALL NATURAL WEALTH BELONGS TO THE REPUBLIC AND NO INDIVIDUAL OR COMPANY CAN HOLD ANY RIGHT TO OWN THE M, BUT THE COMPANY CAN ACQUIRE RIGHT TO USE THESE NATURAL WEALTH AND P AYS LICENSE FEE TO THE GOVERNMENT AND AFTER THE EXPIRY OF THE PERIOD OF MI NING GRANTED TO THE ASESSEE, THE LAND REVERTS BACK TO THE GOVERNMENT/OW NER. SO THE PREMIUM WHICH PURCHASES A COMMERCIAL RIGHT EXTINGUISHES AFT ER LAPSE OF A PERIOD. THEREFORE, THE RIGHT TO EXPLORE DEPRECIATES AND DEP RECIATION IS ALLOWABLE ONLY ON THE SAME RIGHT IN TERMS OF SECTION 2(11)(B) OF THE INCOME TAX ACT, 1961 READ WITH SECTION 32(1)(II) AND RULE 5(1) OF T HE INCOME TAX RULES. ON SUCH ASSETS, THE INCOME TAX RULES PROVIDES THE D EPRECIATION RATE OF 25%. THE LD. A.R. ALSO SUBMITTED THAT THE QUARRY LA ND & DEVELOPMENT ITA NO.1280/1281/1283/KOL/2014 M/S HIMALAYA GRANITES PVT. LTD. 7 ARE INTANGIBLE ASSETS BEING THE NATURE OF LICENSE F OR COMMERCIAL RIGHT AND FOR WHICH THE PRESCRIBED RATE OF DEPRECIATION AS PE R THE INCOME TAX RULES IS AT 25%. HOWEVER, THE ASSESSEE HAS CLAIMED AT MUC H LESSER ALLOWANCE BY ADOPTING THE LEASE YEARS DURATION PERIODS AS BAS IS. 7.3. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED TH E RELEVANT MATERIAL AVAILABLE ON RECORD, WE NOTICED THAT QUARRY LAND & DEVELOPMENT IS AN INTANGIBLE ASSET BEING IN NATURE OF LICENSE FOR COM MERCIAL RIGHT AND FOR WHICH THE PRESCRIBED RATE OF DEPRECIATION AS PER TH E INCOME TAX RULES IS AT 25%. THE ASSESSEE HAS SUBMITTED BEFORE THE ASSES SING OFFICER AS WELL AS BEFORE THE LD. CIT(APPEALS) THE VARIOUS CHARTS O F DEPRECIATION EXPLAINING THE PROVISION ON THE AMOUNT OF DEPRECIAT ION CLAIMED BY THE ASSESSEE. THEREFORE, CONSIDERING THE NATURE OF THE BUSINESS, WE ARE OF THE VIEW THAT THE METHOD ADOPTED BY THE ASSESSEE TO COMPUTE THE DEPRECIATION ON QUARRY LAND & DEVELOPMENT IS APPROP RIATE AND, THEREFORE, WE CONFIRM THE ORDER PASSED BY THE LD. C IT(APPEALS). 7.4 IN THE RESULT, GROUND NO. 1 OF THE REVENUES AP PEAL STANDS DISMISSED. 7.5. THE ISSUE INVOLVED IN GROUND NO. 1 IN ITA NO. 1283/KOL/2014 IS IDENTICAL WITH THE GROUND NO. 1 IN ITA NO. 1281/KOL /2014. AS WE HAVE ALREADY DECIDED THE GROUND NO. 1 IN ITA NO. 1281/KO L/2014 IN FAVOUR OF THE ASSESSEE, THE GROUND NO. 1 OF ITA NO. 1283/KOL/ 2014 RAISED BY THE REVENUE IS ALSO DISMISSED. ITA NO.1280/1281/1283/KOL/2014 M/S HIMALAYA GRANITES PVT. LTD. 8 8. GROUND NO. 2 RAISED BY THE REVENUE RELATES TO TH E DISALLOWANCE OF DEDUCTION UNDER SECTION 80HHC OF TH E INCOME TAX ACT, 1961. 8.1. THE LD. D.R. FOR THE REVENUE HAS SUBMITTED BEF ORE US THAT THE ASSESEE-COMPANY HAD EARNED INTEREST OF RS.45,52,146 /- AND PAID INTEREST EXPENDITURE OF RS.1,49,83,526/-. THE ASSESSEE-COMPA NY HAS NOT CONSIDERED THE INTEREST INCOME OF RS.45,52,146/- WH ILE COMPUTING THE PROFIT OF THE BUSINESS FOR THE PURPOSE OF SECTION 8 0HHC. AS PER EXPLANATION (BAA) BELOW SUB-SECTION (4C) OF SECTION 80HHC, 90% OF ANY RECEIPT BY WAY OF BROKERAGE, COMMISSION, INTEREST, RENT, CHARGES OF ANY OTHER RECEIPT OF A SIMILAR NATURE INCLUDED IN THE P ROFIT OF THE BUSINESS IS TO BE EXCLUDED FROM THE PROFIT OF THE BUSINESS TO ARRI VE AT THE ELIGIBLE PROFIT OF THE BUSINESS FOR DEDUCTION UNDER SECTION 80HHC. AS PER EXPLANATION (BAA) OF SECTION 80HHC, THE ASSESSEE HAS NOT REDUCE D THE INTEREST INCOME AT RS. 45,52,146/- WHILE COMPUTING THE PROFI T OF THE BUSINESS FOR THE PURPOSE OF SECTION 80HHC. THE LD AR EXPLAINED T HAT THE MAIN ISSUE IN THIS APPEAL IS THAT THE ASSESSEE TOOK THE NET OF INTEREST , WHEREAS THE CONTENTION OF THE ASSESSING OFFICER WAS THAT IT SHO ULD BE GROSS INTEREST . 8.2. THE LD. A.R. FOR THE ASSESSEE HAS FURTHER SUBM ITTED THAT THE ISSUE REGARDING EXPLANATION (BAA) TO SECTION 80HHC GIVES CONTROVERSY ABOUT NET PROFIT OR GROSS PROFIT. THE PLAIN MEANING OF TH E WORDS PROFITS AND GAINS OF BUSINESS OR PROFESSION IMPLIES THAT IT HAS TO B E NET PROFIT. THE COMPUTATION OF THE PROFITS AND GAINS OF BUSINESS IS ALWAYS NET AS IT IS THE NET PROFIT OF THE PROFIT & LOSS ACCOUNT. THE MAJORI TY OF THE JUDICIAL ITA NO.1280/1281/1283/KOL/2014 M/S HIMALAYA GRANITES PVT. LTD. 9 PRONOUNCEMENTS WHICH ADVOCATING THAT IT SHOULD BE NET PROFIT. THE ASSESSEE, WHILE MAKING SUBMISSIONS BEFORE LD CIT(A) , RELIED ON THE FOLLOWING JUDGMENTS: (I) S. DAMANJIT SINGH VS.- ACIT (2002) 121 TAXMAN 303 (DELHI((MAG.); (II) PINK STAR VS.- DCIT (2002) 72 ITD 137 (MUM.); (III) HONDA STEEL POWER PRODUCTS LIMITED VS.- DCIT (2000) 69 TTJ (DEL.) 97 (IV) HINDUSTAN GUM & CHEMICALS LTD. VS.- ITO (2008 ) 23 SOT 143 (KOL.); (V) ACIT VS.- ARUN PURI (2008) 23 SOT 380 (DELHI) ; (VI) PRIYANKA GEMS VS.- ACIT (2005) 3 SOT 817 (AHM .). ALL THESE JUDGMENTS HOLD THAT THE WORD INTEREST IN CLAUSE (BAA) OF THE EXPLANATION CONNOTES NET INTEREST AND NOT GROSS INTEREST. THEREFORE, THE ASSESSING OFFICER WILL HAVE TO TAKE INTO ACCOUN T THE NET INTEREST, I.E. GROSS INTEREST AS REDUCED BY EXPENDITURE INCURRED F OR EARNING SUCH INTEREST. IN VIEW OF THE ABOVE, THE ASSESSEE SUBMIT TED THAT IN CALCULATING DEDUCTION UNDER SECTION 80HHC, THE NET INTEREST H AS TO BE CONSIDERED WHICH IS IN SUCH PROFIT AS REFERRED IN EXPLANATIO N (BAA). THEREFORE, WHERE THE INTEREST INCOME IS INEXTRICABLY CONNECTED WITH THE BUSINESS OF THE ASSESESE, THEN FOR DETERMINING THE PROFIT AND GAINS OF BUSINESS AS PER EXPLANATION (BAA) TO SECTION 80HHC(4B) THE NET INT EREST INCOME SHOULD BE CONSIDERED INSTEAD OF THE GROSS INTEREST RECEIP T. 8.3 HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT IN THE ITA NO.1280/1281/1283/KOL/2014 M/S HIMALAYA GRANITES PVT. LTD. 10 SUBMISISNS OF THE ASSESEE, AS PROPOSITIONS CANVASSE D BY THE LD. A.R. FOR THE ASSESSEE ARE SUPPORTED BY THE JUDGMENTS CITED(S UPRA). WE NOTICE THAT VARIOUS HONBLE HIGH COURTS HAVE EXPLAINED THE TERM INOLOGY THAT EXPLANATION (BAA) TO SECTION 80HHC IMPLICITLY IMPLI ES NET INTEREST AND NOT THE GROSS INTEREST. WE, THEREFORE, CONFIRM THE OR DER OF THE LD. CIT(APPEALS). 8.4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE BEING ITA NO. 1281/KOL/2014 IS DISMISSED. 9. NOW WE COME TO THE ITA NO. 1280/KOL/2014 FILED B Y THE REVENUE FOR ASSESSMENT YEAR 2002-03. THIS APPEAL IS NOT MAI NTAINABLE BECAUSE OF LOW TAX EFFECT. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, HAS POINTED OUT THAT THE TAX EFFECT INVOLVED IN THIS APPEAL OF THE REVENUE IS LESS THAN THE REVISED MONETARY LIMIT FIXED BY THE CBDT VIDE CIRCULAR NO. 21/2015 DATED 10TH DECEMBER, 2015 AT RS.10,00,000/- FOR FILING THE APPEAL BY THE REVENUE BEFORE THE TRI BUNAL AND THIS POSITION CLEARLY EVIDENT FROM THE GROUNDS RAISED BY THE REVE NUE IN THIS APPEAL IS NOT DISPUTED EVEN BY THE LD. D.R. IN CIRCULAR NO. 2 1/2015 (SUPRA) ISSUED BY THE CBDT, THE MONETARY LIMIT FOR FILING THE APPE ALS BY THE REVENUE BEFORE THE TRIBUNAL HAS BEEN INCREASED TO RS.10,00, 000/- AND AS CLARIFIED IN THE SAID CIRCULAR, THE SAID MONETARY LIMIT IS AP PLICABLE RETROSPECTIVELY EVEN TO THE APPEALS PENDING BEFORE THE TRIBUNAL. TH E CBDT HAS ALSO INSTRUCTED THAT SUCH PENDING APPEALS BELOW THIS SPE CIFIED TAX LIMIT OF RS.10,00,000/- MAY BE WITHDRAWN/ NOT PRESSED. KEEPI NG IN VIEW THE INSTRUCTION GIVEN BY THE CBDT VIDE CIRCULAR NO. 21/ 2015 DATED ITA NO.1280/1281/1283/KOL/2014 M/S HIMALAYA GRANITES PVT. LTD. 11 10.12.2015, WHICH IS SQUARELY APPLICABLE IN THE PRE SENT CASE, THE APPEAL FILED BY THE REVENUE IN THIS CASE IS TREATED AS WIT HDRAWN/NOT PRESSED AND DISMISSED ACCORDINGLY. 10 IN THE RESULT, THE APPEAL OF THE REVENUE ( IN IT A NO.1280/KOL/2014), IS DISMISSED. 11. TO SUM UP, IN THE RESULT, ALL THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26/04 /2017. SD/ - (N.V.VASUDEVAN) SD/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; $% DATED 26/04/2017 & ()*/PRAKASH MISHRA ,SR.PS. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSTT. REGISTRAR) % & , / ITAT, KOLKATA 1. / THE APPELLANT-DCIT, CENTRAL CIRCLE-XI, KOLKATA 2. / THE RESPONDENT.-M/S HIMALAYA GRANITES PVT. LTD. 3. 4 ( ) / THE CIT(A), KOLKATA. 4. 4 / CIT 5. 567 8 , 8 , / DR, ITAT, KOLKATA 6. 79 / GUARD FILE. 5 //TRUE COPY//