ACIT, JODHPUR V. M/s. Ercon Composites, JODHPUR

ITA 132/JODH/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4799 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 14-12-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 09-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALKA R JAIN
• Keywords: Business income; Depreciation; Earning of tax free income; Commercial expediency; Unabsorbed depreciation
• Section: 143(3); 14A; 10B; 145; 27; 154; 11

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, JODHPUR BEFORE SHRI B.P JAIN ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY JUDICIAL MEMBER ITA NO S .13 2 & 133 /JODH/2015 ASSESSMENT YEAR S : 201 0 - 1 1 & 2011 - 12 THE ACIT VS. M/S ERCON COMPOSITES CIRCLE - 1 F - 123, MIA, 2 ND PHASE, BASNI JODHPUR JODHPUR PAN NO. AABFE6551F (APPELLANT) (RESPONDENT) A SSESSEE BY : SH. RAJENDRA JAIN DEPARTMENT BY : SMT. ALKA R. JAIN DATE OF HEARING : 14 /1 2 /2016 DATE OF PRONOUNCEMENT : 19/12/2016 ORDER PER BENCH BOTH THE AFORESAID APPEALS HAVE BEEN PREFERRED BY THE REVENUE AGAINST THE RESPECTIVE ORDERS OF THE LD. CIT(A) - 1 FOR A.Y. 2010 - 11 ORDER DT. 19/01/2015 AND FOR A.Y. 2011 - 12 ORDER DT. 20/01/2015. 2. THAT THE GROUND OF APPEAL FILED BY THE REVENUE IN ITA NO. 132/JODHPUR/2015 FOR A.Y. 2010 - 11 AS FOLLOWS: 1. GIVING FINDING THAT THE AO HAS NOT POINTED OUT DEFECTS IN THE BOOKS OF ACCOUNT MAINTAINED IN REGULAR COURSE OF BUSINESS FOR NON EOU UNIT OF THE ASSESSEE. 2 2. G IVING FINDING THAT THE AO HAS ERRED IN REJECTING THE BOOKS OF ACCOUNT AND APPLYING THE PROVISIONS OF SECTION 145(3) AND G.P. RATE OF 48.27 %. 3. DELETING THE TRADING ADDITION OF RS. 1,23, 34 , 525 / - WHEN PARTICULARLY, THE AO HAS GIVEN REASONS I N DETAIL AT PAGE NO. 2 TO 8 OF ASSESSMENT ORDER. 4. HOLDING THAT THE AO WAS NOT JUSTIFIED IN DISALLOWING OF RS. 15,99,968/ - BEING 50% OF TOTAL REMUNERATION ALLOCATED TO UNIT II(EOU) OUT OF CLAIM MADE IN P&L ACCOUNT OF UNIT - I ( NON EOU UNIT) WHEN PARTICULAR LY, THE REMUNERATION IS ALLOWABLE UNDER SECTION 40(B) TO WORKING PARTNERS OF THE FIRM. THE ASSESSEE FIRM CARRIES BUSINESS THROUGH TWO UNDERTAKINGS (NON EOU AND EOU); HENCE, THE REMUNERATION IS AL LOWABLE IN EITHER EQUAL RATIO OR RATIO OF BOOK PROFIT. 5. ACCEPTING THE SIMPLE PAPER CLAIMED TO BE APPENDED AS PART OF PARTNERSHIP DEED CLAIMED TO BE AMENDED ON 01/04/2004. 6. DISALLOWING OF RS. 18,86,440/ - MADE UNDER SECTION 14A OF IT ACT; WHEN PARTICULARLY IGNORING THE LAW THAT ONUS IS ON ASSESSEE TO PROVE WIT H PRIMARY DISCOUNTS THAT AS ON DATE OF INVESTMENT THE INTEREST FREE FUND WAS AVAILABLE WITH ASSESSEE. 7. IGNORING THE FACT THAT DURING THE YEAR THE INVESTMENT IN EXEMPT INCOME STOOD AT RS. 8,41,10,201/ - AS AGAINST LAST YEAR OF RS. 3,57,36,861/ - AND ON BO RROWED FUND THE ASSESSEE HAS PAID INTEREST OF RS. 43,09,615/ - . 8. HOLDING THAT THE INTEREST INCOME IS ELIGIBLE FOR DEDUCTION U/S 10B WHEN PARTICULARLY, THE INTEREST INCOME IS NOT GENERATED FROM EXPORT OF GOODS AND HAS NO DIRECT RELATION WITH EXPORT ACTIVI TY. 9. ALLOWING DEDUCTION OF RS. 8,04,12,127/ - UNDER SECTION 10B FOR 100% EOU UNIT IGNORING THE LAW THAT AND IN ABSENCE OF ANY NOTIFICATION SUGGESTING THAT THE ASSISTANT DEVELOPMENT COMMISSIONER HAS BEEN NOMINATED TO PERFORM THE DUTIES OF THE BOARD CONSTI TUTED UNDER SECTION 14 OF THE INDUSTRIAL DEVELOPMENT AND REGULATION ACT, 1951 FOR THE PURPOSE OF APPROVAL UNDER SECTION 10B. 10. IGNORING THE DECISION IN THE CASE OF M/S CIT VS. REGENCY CREATION LTD. REPORTED IN 79 DTR 24 (DELHI) AND CIT VS. JE ENTERPRIS ES (P)LTD. RECORDED IN 111DTR 262 (KOLKATA). 11. IGNORING THE POSITION OF LAW THAT APPROVAL BY THE BOARD CONSTITUTED UNDER SECTION 14 OF INDUSTRIAL DEVELOPMENT AND REGULATION ACT, 1951 IS NECESSARY AND IT CAN E EXAMINED BY THE AO AT ANY STAGE OF CLAIM. 1 2. DELETING THE DISALLOWANCE OF R.S 1,04,95,000/ - MADE ON ACCOUNT OF CLAIM OF DEPRECIATION IGNORING THE FACT THAT THE ASSESSEE FAILED TO PRODUCE PROPER EVIDENCES REGARDING WIND MILL AND SALE OF ELECTRICITY AND ALSO THE CIT(A) DID NOT PROVIDE OPPORTUNITY TO THE AO TO EXAMINE AUTHENTICITY OF THE LETTER OF SUPERINTENDENT ENGINEER, TAMIL NADU ELECTRICITY BOARD PRODUCED BY THE ASSESSEE. 13. DIRECTING THE AO TO ALLOW THE SET OFF OF UNABSORBED DEPRECIATION RS. 38,08,699/ - IGNORING THE FACT THAT AFTER THE ORDER O F THE AO U/S 143(3) THERE WAS NOT REMAINING ANY UNABSORBED DEPRECIATION FOR AY 2009 - 10 TO BE CARRIED FORWARD 3 AND APPEAL AGAINST THE ORDER OF THE ITAT, BY WHICH THE ADDITIONS MADE BY THE ORDER DELETED, IS PENDING BEFORE RAJASTHAN HIGH COURT. 3. GROUNDS OF APPEAL FILED BY THE REVENUE IN ITA NO.133/JODHPUR/2015 FOR THE A.Y. 2011 - 12 ARE AS FOLLOWS: 1. GIVING FINDING THAT THE AO HAS NOT POINTED OUT DEFECTS IN THE BOOKS OF ACCOUNT MAINTAINED IN REGULAR COURSE OF BUSINESS FOR NON EOU UNIT OF THE ASSESSEE. 2. GIVING FINDING THAT THE AO HAS ERRED IN REJECTING THE BOOKS OF ACCOUNT AND APPLYING THE PROVISIONS OF SECTION 145(3) AND G.P. RATE OF 48.27%. 3. DELETING THE TRADING ADDITION OF RS. 1,23,34,525/ - WHEN PARTICULARLY, THE AO HAS GIVEN REASONS IN DETAIL AT P AGE NO. 2 TO 8 OF ASSESSMENT ORDER. 4. DISALLOWING OF RS. 11,92,728/ - MADE U/S 14A OF IT ACT; WHEN PARTICULARLY IGNORING THE LAW THAT ONUS IS ON ASSESSEE TO PROVE WITH PRIMARY DISCOUNTS THAT AS ON DATE OF INVESTMENT THE INTEREST FREE FUND WAS AVAILABLE W ITH ASSESSEE. 5. IGNORING THE FACT THAT DURING THE YEAR THE INVESTMENT IN EXEMPT INCOME STOOD AT RS. 5,01,85,652/ - AND ON BORROWED FUND THE ASSESSEE HAS PAID INTEREST OF RS. 43,74,373/ - . 6. HOLDING THAT THE AO WAS NOT JUSTIFIED IN DISALLOWING OF RS. 33,1 6,647/ - BEING 50% OF TOTAL REMUNERATION ALLOCATED TO UNIT II (EOU UNIT) OUT OF CLAIM MADE IN P&L ACCOUNT OF UNIT - I (NON EOU UNIT) WHEN PARTICULARLY, THE REMUNERATION IS ALLOWABLE U/S 40(B) TO WORKING PARTNERS OF THE FIRM. THE ASSESSEE FIRM CARRIES BUSINESS THROUGH TWO UNDERTAKINGS (NON EOU AND EOU); HENCE, THE REMUNERATION IS ALLOWABLE IN EITHER EQUAL RATIO OR RATIO OF BOOK PROFIT. 7. ACCEPTING THE SIMPLE PAPER CLAIMED TO BE APPENDED AS PART OF PARTNERSHIP DEED CLAIMED TO BE AMENDED ON 01/04/2004. 8. HOLD ING THAT THE INTEREST INCOME OF RS. 9,77,067/ - IS ELIGIBLE FOR DEDUCTION U/S 10B WHEN PARTICULARLY, THE INTEREST INCOME IS NOT GENERATED FROM EXPORT OF GOODS AND HAS NO DIRECT RELATION WITH EXPORT ACTIVITY. 4. FIRST WE WILL TAKE UP THE APPEAL IN ITA NO. 1 32/JODHPUR/2015 FOR THE A.Y. 2010 - 11. 5. THAT THE GROUND NO. 1, 2 & 3 RELATES TO TRADING ADDITION OF RS. 1,23,50,192/ - DONE BY THE AO AND APPLICATION OF SECTION 145(3) OF THE A CT. 4 6. THAT THE AO HAS MADE THI S ADDITION BASED ON THE REASON A S I S MENTIONED IN THE ASSESSMENT ORDER WHICH IS ON RECORD. 7. THAT THE LD. CIT WITH REGARD TO THIS GROUND HAS HELD AS UNDER: AFTER PROPER APPRECIATION OF THE FACTS, I FIND THAT HE ASSESSEES BOOKS OF ACCOUNT MAINTAINED IN SIMILAR FASHION WERE ACCEPTED ALL ALONG UNTIL THE ASSESSMENT YEAR 2008 - 09 IN THE SCRUTINY ASSESSMENT AND ONLY IN AY 2009 - 10, THE BOOKS OF ACCOUNTS WERE REJECTED BY THE ASSESSING OFFICER, WHICH WAS HELD TO BE IMPROPER BY MY PREDECESSOR AND HIS ORDER STOOD APPROVED BY THE HONBLE TRIBUNAL. S INCE THE FACTS OF THE CASE ARE IDENTICAL AND THE AO HAS NOT POINTED OUT ANY DEFECT IN THE BOOKS OF ACCOUNT MAINTAINED IN REGULAR COURSE OF BUSINESS DULY SUPPORTED WITH VOUCHERS, THE ACTION OF THE ASSESSING OFFICER IN REJECTING THE BOOKS OF ACCOUNT IS NOT P ROPER AND AS SUCH I HOLD THAT THE AO ERRED IN REJECTING THE BOOKS OF ACCOUNT AND APPLYING THE PROVISIONS OF SECTION 145(3) AND WAS FURTHER NOT JUSTIFIED IN APPLYING THE G.P. RATE OF 50.82%. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO DELETE THE TRADI NG ADDITION OF RS. 1,23,50,192/ - . THE GROUNDS OF APPEAL ARE ALLOWED IN FAVOUR OF THE APPELLANT . 8. WE HAVE PERUSED THE CASE RECORDS, FACTS AND CIRCUMSTANCES OF THE CASE AND WE FIND THAT ON IDENTICAL FACTS THE COORDINATE BENCH OF ITAT JODHPUR IN ASSESSEE S OWN CASE HAS HELD THAT THE PROVISIONS OF SECTION 145 OF THE ACT IS NOT APPLICABLE A N D HAVE DELETED THE TRADING ADDITION MADE BY THE AO. THAT THE RELEVANT PORTION OF THE FINDINGS OF THE C OORDINATE BENCH IN ITAT NO. 426/JODHPUR/2012 FOR A.Y. 2009 - 10 IS AS FOLLOWS: 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PATRTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ASSESSING OFFICER MADE THE ADDITION BY ESTIMATING THE GP RATE OF NON - EO U UNIT BY COMPARING THE SAME WITH THE GP RATE OF EOU UNIT, BUT IGNORED THIS VITAL FACT THAT THE RAW - MATERIAL CONSUMED IN THE CASE OF EOU UNIT AND NON - EOU UNIT WAS NOT THE SAME. IN THE PRESENT CASE, THE ASSESSING OFFICER PRESUMED THAT MAXIMUM OF PURCHASES A ND MANUFACTURING EXPENSES WERE DEBITED TO THE EOU UNIT SO AS TO REDUCE THE PROFIT OF OTHER UNITS. IN OOUR OPINION, THE PRESUMPTION OF THE ASSESSING OFFICER IS WRONG BECAUSE HAD IT BEEN THE CASE THEN THE GP RATE OF THE OTHER UNITS WOULD HAVE BEEN ON HIGHER SIDE. IN THE INSTANT CASE, IT IS AN ADMITTED FACT THAT THE ASSESSING OFFICER HAD NOT INVOKED THE PROVISIONS OF SECTION 145(3) OF THE ACT AND THIS FACT HAS BEEN ADMITTED EVEN IN G.NO. 1 WHEREIN IT IS STATED THAT ASSESSING OFFICER HAD REJECTED THE BOOK RES ULT UNDER SECTION 145(3) THOUGH IT HAS NOT BEEN MENTIONED IN THE ASSESSMENT ORDER. 5 THEREFORE, THE ADDITION ON ESTIMATE BASIS WITHOUT REJECTING THE BOOKS OF ACCOUNTS WAS NOT JUSTIFIED. 9. FOR THE AFORESAID VIEW, WE ARE ALSO FORTIFIED BY THE JUDGMENT OF THE HONBLE DELHI HIGH COURT RELIED BY THE LEARNED COUNSEL FOR THE ASSESSEE IN THE CASE OF CIT VS. SMT. POONAM RANI REPORTED IN (2010) 326 ITR 223, WHEREIN IT HAS BEEN HELD AS UNDER: - THE AO HAS NOT POINTED OUT ANY PARTICULAR DEFECT OR DISCREPANCY IN THE ACCOUNT BOOKS MAINTAINED BY THE ASSESSEE. THE CIT(A) WAS SATISFIED THAT THE ASSESSEE HAD FURNISHED COMPLETE DETAILS, INCLUDING QUANTITATIVE DETAILS IN RESPECT OF PURCHASE OF RAW MATERIAL, MANUFACTURE OF COPPER WIRE AND SALE OF THE FINISHED PRODUCTS. IN THE SE CIRCUMSTANCES, IT CANNOT BE APPRECIATED AS TO HOW THE ACCOUNTS, MAINTAINED BY THE ASSESSEE, COULD HAVE BEEN SAID TO BE INCOMPLETE OR INACCURATE. IN FACT, THE AO HAD NO MATERIAL BEFORE HIM TO TREATE THE ACCOUNTS OF THE ASSESSEE AS DEFECTIVE OR INCOMPLETE . 10. IN VIEW OF THE AFORESAID DISCUSSION, WE DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT. 9. THAT WE ARRIVE AT OUR CONSIDERED VIEW THAT THIS ISSUE IS COVERED BY THE DECISION OF COORDINATE BENCH AND THEREFORE WE UPHOLD THE FINDINGS OF THE LD. CIT(A) ON THIS GROUND AND HENCE GROUND NO. 1,2 & 3 OF APPEAL BY THE REVENUE IS DISMISSED. 10. THAT THE NEXT GROUND OF APPEAL NO. 4 & 5 RELATES TO REMUNERATION PAID TO PARTNERS. 11. THAT WITH REGARD TO THESE GROUNDS LD. CIT(A) HELD THAT THE AO WAS NOT JU STIFIED IN DISALLOWING THE CLAIM OF REMUNERATION PAID TO PARTNERS WHICH WAS CLAIMED AS PER TERMS OF PARTNERSHIP DEED. THE ADDITION MADE BY THE AO WAS DELETED. THE LD. CIT(A) HAD OBSERVED AS UNDER: 5.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE SUBM ISSION FO THE APPELLANT AND I FIND THAT IT IS AN UNDISPUTED FACT THAT REMUNERATION TO WORKING PARTNER HAS BEEN CLAIMED OUT OF THE PROFIT OF UNIT - I AND THE SAME IS CREDITED TO THE PARTNERS CAPITAL ACCOUNT. FROM PROFITS OF UNIT - II AND THE SAME IS CREDITED T O THE PARTNERS CAPITAL ACCOUNT. FROM PROFITS OF UNIT - II NO REMUNERATION WAS CLAIMED. IT IS NOT THE CASE OF THE A.O. THAT REMUNERATION WORKED IS FROM THE PROFITS OF UNIT - II. FURTHER, THE ASSESSING OFFICER DOUBTED THE GENUINENESS OF PAPER 6 APPENDED TO THE PA RTNERSHIP DEED ON THE GROUND THIS PAGE WAS NEITHER WRITTEN OVER A STAMP NOT IT WAS SIGNED BY THE NOTARY. ON THE CONTRARY, IT WAS STATED BY THE APPELLANT THAT THIS WAS PAGE APPENDED ON ACCOUNT OF OPENING OF NEW UNIT I.E. UNIT - II. IT WAS FURTHER STATED THAT IT WAS JUST IN CONTINUATION OF EARLIER PARTNERSHIP DEED AND THE CHANGES WERE MADE WITH A MUTUAL CONSENT OF ALL THE PARTNERS. THEREFORE, THE APPELLANT CONTENDED THAT THERE IS NO BASIS OR JUSTIFICATION TO DOUBT THE GENUINENESS OF THE PAPER WHICH IS ACTUALLY A PART OF THE VALID PARTNERSHIP DEED. UNDER THESE CIRCUMSTANCES, MOOT QUESTION BEFORE, THE UNDERSIGNED IS THAT WHETHER A PARTNERSHIP DEED CAN BE HELD AS INVALID ON THE GROUND THAT THE DEED HAD NOT BEEN DULY STAMPED. IN THIS REGARD, DECISION OF HONBLE CAL CUTTA HIGH COURT IS RELEVANT, WHICH ADJUDICATED ON THIS ISSUE AS UNDER: - THUS, WHERE A DEED OF PARTNERSHIP WAS ALREADY ADMITTED IN EVIDENCE BY THE ASSESSING OFFICER, IT WAS NOT POSSIBLE FOR HIM TO QUESTION SUCH ADMISSION AT A LATER STAGE ON THE GROUND TH AT THE DEED HAD NOT BEEN DULY STAMPED. 5.3.1 FROM THE ABOVE FACTS, IT IS CLEAR THAT THE APPELLANT HAS COMPLIED WITH THE ESSENTIAL INGREDIENTS OF A PARTNERSHIP, WHICH ARE AS UNDER: - (1) THAT THERE SHOULD BE AN ACTUAL OR PHYSICAL OVERT ACT ON THE PART OF T WO PERSONS TO EMBARK ON A BUSINESS ADVENTURE. (2) THAT IF ANY BUSINESS IS CARRIED ON BY ONE OR ANY OF THE PARTNERS, THE PROFIT OF THE BUSINESS SHALL BE SHARED BY THEM IN THE RATIO CONTAINED IN THE PARTNERSHIP AGREEMENT. FROM THE ABOVE, IT BECOMES CLEAR TH AT IN THE INSTANT CASE, THE APPELLANT HAS FULFILLED ALL PREREQUISITES CONDITION AS MENTIONED ABOVE FOR PARTNERSHIP DEED TO BE CONSIDERED AS GENUINE AND VALID. IN VIEW OF THE ABOVE, IT IS HELD THAT THE AO WAS NOT JUSTIFIED IN DISALLOWING THE CLAIM OF REMU NERATION TO THE PARTNERS WHICH WAS CLAIMED AS PER TERMS OF PARTNERSHIP DEED. IN VIEW OF ABOVE THE ADDITION MADE BY THE AO IS HEREBY DELETED. THE GROUND OF APPEAL IS ALLOWED. 12. WE HAVE PERUSED THE RECORDS OF THE CASE AND WE ARRIVE AT OUR CONSIDERED V IEW THAT IT IS CLEARLY ON RECORD THE ASSESSEE HAS EXPLAINED THAT PARTNERSHIP FIRM CAME INTO EXISTENCE ON 21/01/2004 WHEN ONLY UNIT I WAS IN EXISTENCE. THE TERMS AND CONDITIONS OF PARTNERSHIP DEED WERE EXECUTE D ON 27/01/2004. IT WAS FURTHER EXPLAINED THAT THEREAFTER THE DECISIONS W ERE TAKEN TO ESTABLISH UNIT - II AND FOR THIS PURPOSE THE PARTNERSHIP DEED WAS AMENDED ON 01/04/2004. THAT THE CHANGES WERE CARRIED OUT WITH THE MUTUAL CONSENT OF ALL 7 THE PARTNERS AND THE AMENDED DEED WAS DULY WITNESSED BY THE INDEP ENDENT WITNESSES. THIS FACT IS NOT A NEW FACT AND HAS BEEN ACCEPTED IN PAST FOR SEVERAL YEARS. 13. THAT , AT THE TIME OF HEARING THE LD. AR SUBMITTED BEFORE US THAT THIS IS THE FIRST TIME SUCH ADDITION S W ERE MADE AND EVEN IN THE EARLIER YEARS THERE W ERE NO ADDITION S ON THESE GROUNDS. THAT IT IS ALSO ON RECORD THAT REMUNERATION TO WORKING PARTNER HAS BEEN CLAIMED OUT OF THE PROFIT OF UNIT - I AND THE SAME IS CREDITED TO THE PARTNERS CAPITAL ACCOUNT. FROM PROFITS OF UNIT - II NO REMUNERATION WAS CLAIMED. IT I S NOT THE CASE OF AO THAT REMUNERATION WORKED IS FROM THE PROFITS OF UNIT - II. THE AO ALSO DOUBTED THE GENUINENESS OF PAPER APPENDED TO THE PARTNERSHIP DEED ON THE GROUND THAT THIS PAGE WAS NEITHER WRITTEN OVER A STAMP NOR IT WAS SIGNED BY THE NOTARY. THAT HOWEVER, THE ASSESSEE SUBMITTED BEFORE THE AO THAT THIS PAGE WAS APPENDED ON ACCOUNT OF OPENING OF NEW UNIT I.E; UNIT - II AND IT WAS JUST IN CONTINUATION OF EARLIER PARTNERSHIP DEED. THAT AS RIGHTLY MENTIONED BY THE LD. CIT(A) THE DECISION OF THE CALCUTTA H IGH COURT WHERE A DEED OF PARTNERSHIP WAS ALREADY ADMITTED IN EVIDENCE BY THE ASSESSING OFFICER , IT WAS NOT P OSSIBLE FOR HIM TO QUESTION SUCH ADMISSION AT A LATER STAGE ON THE GROUND THAT THE DEED HAS NOT BEEN DULY STAMPED. THAT IT IS ALSO ON RECORD THE E SSENTIAL INGREDIENTS OF THE PARTNERSHIP DEED WHICH THE ASSESSEE HAS COMPLIED WITH ARE : 8 1. THAT THREE SHOULD BE AN ACTUAL OR PHYSICAL OVER ACT ON THE PART OF TWO PERSONS TO EMBARK ON A BUSINESS ADVENTURE. 2. THAT IF ANY BUSINESS IS CARRIED ON BY ONE OR ANY OF THE PARTNERS, THE PROFIT OF THE BUSINESS SHALL BE SHARED BY THEM IN THE RATIO CONTAINED IN THE PARTNERSHIP AGREEMENT. THEREFORE IT IS CRYSTAL CLEAR THAT THE ACTIVITY OF THE ASSESSEE WERE AS PER THE PARTNERSHIP DEED AND WE THEREFORE UPHOLD THE FINDI NGS OF THE LD. CIT(A) ON THIS GROUND AND SUSTAIN THE DELETION. 14. THESE GROUND OF APPEAL FILED BY THE REVENUE IS DISMISSED. 15. THAT THE NEXT GROUND OF APPEAL I.E; GROUND NO. 6 & 7 RELATES TO APPLICATION OF PROVISIONS OF SECTION 14A OF THE INCOME TAX ACT . 16. THE LD. CIT(A) HAS DELETED THIS ADDITION AS REASONS SPECIFIED IN HIS ORDER ON RECORD, THE OPERATIVE PART IS AS FOLLOWS: I HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSION OF THE APPELLANT. I HAVE ALSO GONE THROUGH THE REASONS GIVEN BY THE AO W HILE DISALLOWING THE PORTION OF INTEREST UNDER SECTION 14A OF THE ACT. I HAVE ALSO GONE THROUGH THE FINDINGS RECORDED BY THE HONBLE TRIBUNAL ON SIMILAR ISSUE. SINCE THE FACTS AND CIRCUMSTANCES OF THE CASE ARE SIMILAR TO THE FACTS OF A.Y. 2009 - 10 AND AS SU CH KEEPING IN VIEW THE DECISION OF THE HONBLE TRIBUNAL I SEE NO REASON FOR MAKING DISALLOWANCES OF PART OF INTEREST UNDER SECTION 14A OF THE ACT. ACCORDINGLY, THE ADDITION IS HELD TO BE UNJUSTIFIED AND ACCORDINGLY, DISALLOWANCE OF RS. 18,46,440/ - MADE ON THIS ACCOUNT IS DELETED. THE APPELLANT GETS A RELIEF OF RS. 18,46,440/ - . THE GROUND OF APPEAL IS ALLOWED. 17. WE HAVE PERUSED THE CASE RECORDS AND WE FIND THAT IN ASSESSEES OWN CASE IN ITA NO. 418/JODHPUR/2012 THE COORDINATE BENCH OF ITAT JODHPUR HAS HELD THAT THE PROVISION OF SECTION 14A IS NOT APPLICABLE TO THE ASSESSEE AND THE 9 DISALLOWANCE MADE BY THE AO ON THIS GROUND WAS DELETED. THE RELEVANT PORTION OF THE ITAT ORDER IS AS UNDER 20. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ASSESSEE MADE AN INVESTMENT IN TAX FREE BONDS AND UNITS TO THE EXTENT OF RS . 3,75,15,666/ - AND EARNED TAX FREE DIVIDEND INCOME OF RS. 4,84,180/ - . AS PER THE PROVISIONS OF SECTION 14A(1) OF THE ACT, NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO INCOME WHICH DOES NOT FORM PART OF TH E TOTAL INCOME UNDER THE ACT. IN THE PRESENT CASE, THE ASSESSING OFFICER CONSIDERED THAT THE INTEREST PAID BY THE ASSESSEE WAS TO BE DISALLOWED ON PROPORTIONATE BASIS UNDER SECTION 14A OF THE ACT, BUT NOTHING IS BROUGHT ON RECORD TO PROVE THE NEXUS BETWEEN THE INTEREST BEARING FUNDS AND THE INVESTMENT IN BONDS AND MUTUAL FUNDS ON WHICH EXEMPTED DIVIDEND INCOME WAS EARNED BY THE ASSESSEE. IN THE INSTANT CASE, THE ASSESSEE INCURRED INTEREST EXPENSES OF RS. 44,25,073/ - OUT OF WHICH RS. 40,30,540/ - WAS RELATED TO THE INTEREST TO THE PARTNERS FIXED CAPITAL AND REMAINING INTEREST OF RS. 3,94,533/ - WAS CONCERNED WITH THE INTEREST TO THE PARTIES. AS REGARD TO THE INTEREST PAID TO THE PARTNERS, IT IS NOT IN DISPUTE THAT THE SAID INTEREST WAS PAID UNDER SECTION 40(B) OF THE ACT AS PER THE TERMS OF PARTNERSHIP DEED AND THE PARTNERS CAPITAL WAS FIXED. NOTHING IS BROUGHT ON RECORD THAT THE FIXED CAPITAL OF THE PARTNERS WAS UTILIZED TO MAKE THE INVESTMENT IN THE UNITS AND BONDS. ON THE CONTRARY, THE ASSESSEE STATED THAT T HERE WAS CURRENT CAPITAL ACCOUNT OF THE PARTNERS AND THE BALANCE WAS AT RS. 8,76,43,107/ - AS ON 31/03/2009 AND RS. 8,51,36,613/ - AS ON 31/03/2008, WHICH WAS UTILIZED IN MAKING THE INVESTMENT IN MUTUAL FUND FOR RS. 3,57,36,861/ - AS ON 31/03/2009 AND RS. 3,1 3,64,086/ - AS ON 31/03/2008, THEREFORE, THE PARTNERS CURRENT CAPITAL ACCOUNT APPEARS TO BE MORE THAN SUFFICIENT FOR MAKING THE INVESTMENT IN MUTUAL FUNDS. MOREOVER, THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE SAID PARTNERS CURRENT CAPIT AL WAS NON - INTEREST BEARING AND USED FOR INVESTMENT IN MUTUAL FUND, WAS NOT CONTROVERTED AT ANY STAGE. WE THEREFORE ARE OF THE VIEW THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LEARNED CIT(A) WAS NOT JUSTIFIED PARTICULARLY WHEN IN THE PRECEDING YEARS UNDER SIMILAR CIRCUMSTANCES NO DISALLOWANCE HAS BEEN MADE WHILE FRAMING THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT ON 12/12/2010 FOR THE A.Y. 2008 - 09 AND ON 27/03/2009 FOR THE AY 2007 - 08, COPIES OF WHICH ARE PLACED AT PAGE NOS. 90 - 92 AND 147 - 151 RESPECTIVELY OF THE ASSESSEES PAPER BOOK AND THE FACTS FOR THE YEAR UNDER CONSIDERATION ARE IDENTICAL TO THE FACTS INVOLVED IN THE EARLIER YEARS. WE THEREFORE CONSIDERING THE TOTALITY OF THE FACTS ARE OF THE VIEW THAT THE IMPUGNED DISALL OWANCE MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LEARNED CIT(A) WAS NOT JUSTIFIED. ACCORDINGLY, THE SAME IS DELETED. THAT FOLLOWING THE FINDINGS AND DECISIONS OF THE COORDINATE BENCH ON THIS ISSUE WE UPHOLD THE DECISION OF THE LD. CIT(A) AND THE DELETION MADE ON THIS ACCOUNT IS SUSTAINED . THIS GROUND OF APPEAL FILED BY THE REVENUE IS DISMISSED. 10 18. THAT THE NEXT GROUND OF APPEAL NO. 8 RELATES TO DEDUCTION UNDER SECTION 10B ON INTEREST INCOME. 19. THAT ON THIS GROUND THE LD. CIT(A) OBSERVED THAT IN ASSESSEES OWN CASE ON IDENTICAL FACTS AND CIRCUMSTANCES FOR A.Y. 2009 - 10 THE COORDINATE BENCH OF ITAT, JODHPUR HAVE GIVEN FINDINGS IN FAVOUR OF THE ASSESSEE AND ACCORDINGLY THE LD. CIT(A) BASED ON THE DEC ISION OF THE COORDINATE BENCH IN ITAT, JODHPUR IN ITA NO. 418/JODHPUR/2012 ALLOWED THE CLAIM OF THE ASSESSEE. 20. WE HAVE PERUSED THE CASE RECORDS AND WE FIND THAT IN ASSESSEES OWN CASE FOR A.Y. 2009 - 10 THE COORDINATE BENCH OF ITAT, JODHPUR IN ITA NO. 418 /JODHPUR/2012 ON THIS ISSUE HAD HELD AS UNDER: 29. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, IT SEEMS THAT THE ASSESSEE PLEDGED THE FDR AS SECURITY FOR EXPORT ORIENTED UNITS ( EOU)AND EARNED THE INTEREST ON THOSE FDRS. IN THE INSTANT CASE, THE FDRS WERE PLEDGED FOR COMMERCIAL EXPEDIENCY OF THE ASSESSEE, THEREFORE AS PER THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. JAGDISH PRASAD M. JOSHI (SUPRA), I T IS TO BE CONSIDERED AS BUSINESS INCOME AND ELIGIBLE FOR DEDUCTION UNDER SECTION 10B OF THE ACT. ON A SIMILAR ISSUE, THIS BENCH OF THE ITAT IN THE CASE OF ACIT, UDAIPUR VS. M/S. DEVGANGA ENTERPRISES (SUPRA) HELD IN PARA 3 AS UNDER: - 3. WE HAVE HEARD RIVAL SUBMISSIONS. BOTH PARTIES HAVE REITERATED THEIR EARLIER STAND. APART FROM THE ABOVE LD. AR HAS PLACED RELIANCE ON THE DECISION OF THE HONBLE HIGH COURT OF PATNA RENDERED IN THE CASE OF SHYAM BIHARI VS. CIT & ANOTHERS REPORTED IN (2012) 345 ITR 283 (PAT). THE LD. DR HAS RELIED ON THE DECISION OF SPECIAL BENCH, DELHI IN THE CASE OF DCIT VS. ALLIED CONSTRUCTION (2007) 106 TTJ (DEL (SB)595 DATED 30/11/2006. HE HAS TRIED TO DISTINGUISH THE FACTS OF THE JAIPUR BENCH A DECISION IN THE CASE OF M/S. S.P. EQUIPME NT AND SECURITIES VS. ACIT IN ITA NO. 464/JP/2007 ON WHICH DECISION LD. CIT(A) HAS RELIED. AFTER CONSIDERING RIVAL SUBMISSIONS WE HAVE FOUND THAT THE HONBLE HIGH COURT OF PATNA IN THE ABOVE NOTED CASE HAS CLEARLY HELD THAT IN THE CASE OF A CIVIL CONTRACTO R WHO DERIVED HIS INCOME FROM CONTRACT WORK OBTAINED FROM THE GOVERNMENT DEPARTMENTS AND FOR OBTAINING WHICH DEPOSIT OF MONEY IN FDRS AND NSCS WAS A PRE REQUISITE CONDITION, IT HAS BEEN HELD THAT INTEREST EARNED BY THE ASSESSEE ON THE INVESTMENT OF AMOUNT IN FIXED DEPOSITS WHICH WAS ONLY TO PROVIDE A BANK GUARANTEE TO THE CONTRACTEE IN ORDER TO ACQUIRE THE CONTRACT WORK, COULD NOT BE 11 TREATED AS INCOME FROM OTHER SOURCES AND HAS TO BE TREATED AS BUSINESS INCOME ONLY. THE HONBLE HIGH COURT HAS RELIED ON THE DECISION OF KARNATAKA HIGH COURT IN THE CASE OF CIT VS. CHINNA NACHIMUTHU CONSTRUCTION 297 ITR 70 (KAR). ACCORDINGLY, BY RESPECTFULLY FOLLOWING THE ABOVE JUDGMENTS WE CANNOT ALLOW THIS APPEAL OF THE REVENUE. WE ALSO DRAW SUPPORT FOR THE JUDGMENT OF THE HON BLE APEX COURT IN THE CASE OF CIT VS. GOVINDA CHOUDHARY & SONS (1993) 203 ITR 881 (SC). SO, BY RESPECTFULLY FOLLOWING THE AFORESAID ORDER, THIS GROUND OF ASSESSEES APPEAL IS ALLOWED . THAT FOLLOWING THE DECISION OF THE COORDINATE BENCH WE UPHOLD THE F INDINGS OF THE LD. CIT(A) AND THE DEDUCTION UNDER SECTION 10B IN RESPECT OF INTEREST ON FDR SHOULD BE ALLOWED TO THE ASSESSEE AND THE DECISION OF LD. CIT(A) ON THIS GROUND IS SUSTAINED. 21. THIS GROUND OF APPEAL FILED BY THE REVENUE IS DISMISSED. 22. THAT WITH REGARD TO THE NEXT GROUND OF APPEAL NO. 9,10 & 11 THE LD. CIT(A) HAS OBSERVED AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE REASONS GIVEN BY THE AO FOR REJECTING THE CLAIM UNDER SECTION 10B THAT FROM RECORD IT IS APPARENTLY CLEAR THAT IN ALL THE ASSESSMENT YEARS EXCEPT A.Y. 2010 - 11, THE AO HAS ALLOWED THE CLAIM UNDER SECTION 10B . THAT WHEN THE CLAIM OF THE ASS ESSEE WAS EXAMINED IN THE INITIAL YEAR AND THE DEDUCTION HAS BEEN ALLOWED FOR SEVERAL YEAR THEN THERE WAS NO REASON TO TAKE THE SAME IN THE YEAR UNDER CONSIDERATION WITHOUT ESTABLISHING THAT THERE IS CHANGE IN PROCESS / ACTIVITIES OF THE ASSESSEE. I T IS AN UNDISPUTED FACT THAT THE ASSESSEE PRODUCED THE LETTER BEFORE THE AO ALONGWITH APPLICATION UNDER SECTI ON 154 ON 12/04/2013 ALONGWITH THE LETTER ISSUED BY MINISTRY OF COMMERCE & INDUSTRY, GOVERNMENT OF INDIA DT. 25/03/2013 WHICH READS AS UNDER: 12 TO, M/S ERCON COMPOSITES IIND PHASE, BASNI, JODHPUR 342005, RAJASTHAN SUBJECT: RATIFICATION IN RESPECT OF L OP NO. 7 - 75/2004 - 100% EOU DATED 25/02/2004 - REG. SIR, PLEASE REFER TO YOUR LETTER DATED 22/03/2013 ON THE ABOVE SUBJECT AND TO STATE THAT YOUR 100% EOU NAMELY, M/S ERCON COMPOSITES AT KHASRA NO. 1102/740/1, BEHIND M.I.A. HALL, IIND PHASE, BASNI, JODHPUR - 3 42005, RAJASTHAN, VIDE LOP NO. 7 - 75/2004 - 100% EOU DATED 25/02/2004 APPROVED BY THE DEVELOPMENT COMMISSIONER, NSEZ HAS BEEN RATIFIED BY THE BOARD OF APPROVALS IN EXERCISE OF POWER CONFERRED BY SECTION 14 OF THE INDUSTRIES (DEVELOPMENT AND REGULATION )ACT, 1 951. THAT IN THE LIGHT OF THE ABOVE DISCUSSION THE LD. CIT(A) HELD THAT IT IS CLEAR THE ASSESSEE COMPLIED WITH NECESSARY PREREQUISITE AND THEREFORE THERE IS NO REASON TO DENY THE DEDUCTION CLAIM BY THE ASSESSEE UNDER SECTION 10B OF THE ACT. 23. WE HAVE PERUSED THE CASE RECORDS, FACTS AND CIRCUMSTANCES OF THE CASE AND WE OBSERVE THAT IN THE PAPER BOOK THERE IS A COPY OF CERTIFICATE IN RESPECT OF EOU AND RELEVANT DOCUMENTARY EVIDENCES PLACED ON RECORD IN THE PAPER BOOK FROM PAGE S 1 - 27 . T HAT IT IS A LSO ON RECORD THAT IN THE SUBSE QUENT YEAR AND EVEN IN THE PAST, T HE AO HAS ALLOWED EXEMPTION UNDER SECTION 10B OF THE ACT. THAT WHEN THERE IS NO MATERIAL CHANGE IN THE ACTIVITIES OF THE ASSESSEE OR FACTS AND CIRCUMSTANCES OF THE CASE THE EXEMPTION UNDER SE CTION 10B OF THE ACT SHOULD BE ALLOWED. 24. THAT IN OUR CONSIDERED VIEW WE UPHOLD THE FINDINGS OF THE LD. CIT(A). THEREFORE, THESE GROUNDS OF APPEAL FILED BY THE REVENUE IS DISMISSED. 13 25. THAT WITH REGARD TO THE GROUND NO. 12 RELATING TO DEPRECIATION ON WIND MILL. 26. WE HAVE PERUSED THE CASE RECORDS AND WE FIND THAT ON IDENTICAL FACTS THE COORDINATE BENCH OF ITAT, JODHPUR IN ASSESSEES CASE FOR A.Y. 2006 - 07 AND 2008 - 09 IS ALLOWED DEPRECIATION ON WIND MILL. THAT ON PERUSAL OF THE ORDER IN ITA NO. 417/JO DH/2012 FOR A.Y. 2006 - 07 AND ITA NO. 375/JODHPUR/2011 FOR A.Y. 2008 - 09, IT IS CRYSTAL CLEAR THAT IN EARLIER YEAR DEPRECIATION ON WIND MILL WAS ALLOWED. THAT FOLLOWING THE DECISION OF THE COORDINATE BENCH ON THIS ISSUE WE UPH O LD THE FINDINGS OF THE LD. CIT( A) WHO HAS HELD AS UNDER: 9.3 I HAVE CONSIDERED THE FACTS OF THE CASE AND THE REASONS GIVEN BY THE ASSESSING OFFICER FOR REJECTING THE CLAIM OF DEPRECIATION. I HAVE ALSO CONSIDERED THE SUBMISSION MADE BY THE APPELLANT AND PERUSED THE COPY OF THE ORDERS P ASSED BY THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2006 - 07 & 2008 - 09. THE DOCUMENTARY EVIDENCE PLACED BEFORE THE ASSESSING OFFICER SHOWS THAT THE APPELLANT HAS SHOWN INCOME FROM GENERATION OF TWO WIND MILLS ON WHICH DEPRECIATION WAS C LAIMED AND THIS FACT IS EVIDENT FROM PAGE NO. 46 OF THE PAPER BOOK. I FURTHER FIND THAT THE CERTIFICATE ISSUED BY THE TAMIL NADU ELECTRICITY BOARD, A COPY OF WHICH IS AVAILABLE AT PAGE NO. 44 & 45 SHOWS THAT WIND MILLS GOT COMMISSIONED ON 22/03/2010 AND ST ARTED GENERATING ELECTRICITY. I FURTHER FOUND THAT ORDER FOR ERECTION AND INSTALLATION OF WIND MILLS WERE GIVEN ON 29 DECEMBER 2009 AND THE BILLS WERE ISSUED ON 30/03/2010 AND AS SUCH THE PRESUMPTION OF THE AO THAT WIND MILL CANNOT BE INSTALLED IN A DAY IS UNCALLED FOR. FURTHER THE ISSUE IS FULLY COVERED WITH THE DECISION OF THE TRIBUNAL IN WHICH ON SIMILAR FACTS THE CLAIM OF DEPRECIATION WAS ALLOWED. CONSIDERING ALL THE FACTS AND EVIDENCES ON RECORD, THE ASSESSEE IS ENTITLED TO THE DEPRECIATION AND AS SUCH THE SAME IS ALLOWED. THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE CLAIM OF DEPRECIATION. THUS THE APPELLANT GETS A RELIEF OF RS. 1,04,95,000/ - . THE GROUND OF APPEAL IS ALLOWED. THAT IN THE LIGHT OF THESE FINDINGS WE SUSTAIN THE ORDER OF THE LD. CIT(A ) AND HENCE THIS GROUND OF APPEAL BY THE REVENUE IS DISMISSED. 14 27. THAT THE NEXT GROUND OF APPEAL RELATES TO SET OFF OF UNABSORBED DEPRECIATION. THAT WITH REGARD TO THIS GROUND THE AO DISALLOWED THE CLAIM OF SET OFF OF DEPRECIATION FOR THE A.Y. 2009 - 10 ON THE GROUND THAT THE ASSESSMENT WAS COMPLETED AT THE TOTAL INCOME OF RS. 53,61,676/ - AND AS SUCH THERE CANNOT BE A CLAIM OF BROUGHT FORWARD OF DE PRECIATION AND AS SUCH THE SAME WAS DISALLOWED. DURING THE COURSE OF THE APPELLATE PROCEEDINGS, IT HAS BEEN POINTED OUT BY THE ASSESSEE THAT THE APPEAL FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2009 - 10 WAS DECIDED BY THE LD. CIT(A) AS WELL AS BY THE HO NBLE TRIBUNAL AND ALL THE ADDITIONS MADE BY THE AO WAS DELETED EITHER BY THE LD. CIT(A) OR BY THE TRIBUNAL. 28. THAT THE LD. CIT(A) HELD THAT ON OVERALL APPRECIATION OF THE FACTS AND SUBMISSIONS OF THE ASSESSEE , THE AO IS DIRECTED TO VERIFY THE CLAIM THAT THERE WAS A LOSS IN THE A.Y. 2009 - 10 AFTER GIVING EFFECT TO THE ORDER OF THE LD. CIT(A) AND THE TRIBUNAL AND ALLOW THE CLAIM TO THE EXTENT OF UNABSORBED DEPRECIATION WHICH WAS NOT SET OFF WITH THE PROFIT COMPUTED FOR THE A.Y. 2009 - 10. 29. THAT WE OBSERVE AND ARRIVE AT OUR CONSIDERED VIEW WITH REGARD TO THIS GROUND THE LD. CIT(A) HAS ALLOWED WITH SPECIFIC DIRECTIONS TO THE AO TO RECOMPUTE THE CLAIM OF BROUGHT FORWARD OF UNABSORBED DEPRECIATION IN THE LIGHT OF DECISION OF THE LD. CIT(A) AND TRIBUNAL IN THE A.Y. 2009 - 10. 30. THAT WE FIND NO INFIRMITY WITH THE FINDINGS OF THE LD. CIT(A) ON THIS GROUND AND UPHOLD THE SAME. 31. THIS GROUND OF APPEAL BY REVENUE IS DISMISSED. 15 32. NOW WE TAKE UP THE APPEAL IN ITA NO. 133/JODHPUR/2015 FOR A.Y. 2011 - 12. 33. THAT WIT H REGARD TO THE GROUND NO. 1,2 & 3 RELATING TO SECTION 145(3) AND TRADING ADDITION WE HAVE ALREADY DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE, SINCE IT IS COVERED BY THE FINDINGS OF THE COORDINATE BENCH OF THE ITAT, JODHPUR IN ASSESSEES OWN CASE AND WE HAVE GIVEN FINDINGS ACCORDINGLY IN ITA NO. 132/JODHPUR/2015 AND THE SAME FINDINGS FOLLOWS HERE ALSO. ACCORDINGLY THESE GROUNDS OF APPEAL FILED BY THE REVENUE IS DISMISSED. 34. THAT THE GROUND NO. 4 & 5 RELATING TO APPLICATION OF PROVISION OF SECTION 14 A IS ALSO COVERED BY THE COORDINATE BENCH OF ITAT, JODHPUR IN ASSESSES OWN CASE AND THE FINDINGS WE HAVE GIVEN IN ITA NO. 132/JODH/2015 SHALL FOLLOW HERE AS WELL. ACCORDINGLY THESE GROUNDS OF APPEAL FILED BY THE REVENUE IS DISMISSED. 35. THAT WITH REGARD TO GROUND NO. 6 & 7 OF APPEAL REGARDING REMUNERATION PAID TO PARTNERS WE HAVE ALREADY DECIDED THIS ISSUE IN ITA NO. 132/JODH/2015 IN FAVOUR OF THE ASSESSEE AND THE SAME SHALL FOLLOW THIS ASSESSMENT YEAR ALSO. ACCORDINGLY THESE GROUNDS OF APPEAL FILED BY THE REVENUE IS DISMISSED 36. THAT WITH REGARD TO THE GROUND NO. 8 WHICH IS DEDUCTION UNDER SECTION 10B ON INTEREST INCOME WE FIND THAT IDENTICAL FACTS THE COORDINATE BENCH OF ITAT, JODHPUR IN THE ASSESSEES OWN CASE HAS HELD THAT DEDUCTION UNDER SECTION 10B IS ALLOWED TO THE ASSESSEE AND WITH REGARD TO THIS ISSUE WE HAVE ALREADY DECIDED IN ITA NO. 132/JODH/2015 FOR AY 2010 - 11 IN FAVOUR OF THE ASSESSEE, ACCORDINGLY THIS GROUND OF APPEAL BY THE REVENUE IS ALSO DISMISSED. 16 37. BY FOLLOWING OUR EARLIER DECISION GIVEN IN ITANO. 132/JODHPUR/2015, WE DECIDE THIS APPEAL ACCORDINGLY, THEREFORE THE APPEAL I.E; ITA NO. 133/JODHPUR/2015 IS ALSO DISMISSED ON THE SAME LINES. 38. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVENUE ARE DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/ - SD/ - (B.P. JAIN) ( PARTHA SARATHI CHAUDHURY ) ACCOU NTANT MEMBER JUDICIAL MEMBER DATED : 19/12/2016 AG COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR