Universal Precision Screws, New Delhi V. JCIT, New Delhi

ITA 1454/DEL/2015

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 5920 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Assessment Year: 2010-2011
• Appeal Filed On: 12-03-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: ASHISH GOEL
• Keywords: Business income; Opportunity of being heard
• Section: 10B; 10

Judgement Text

1 ITA NO. 1454/D EL/2015 (UNIVERSAL PRECISION SCREWS) IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE HONBLE PRESIDENT, SHRI G.D.AGRAWAL AND SHRI KULDIP SINGH, JUDICIAL MEMBER I.T.A. NO.1454/DEL/2015 (ASSESSMENT YEARS 2010-11) UNIVERSAL PRECISION SCREWS VS. JCI T 146, NEW CYCLE MARKET, RANGE-39 JHANDEWALAN EXTN. NEW DELHI NEW DELHI PAN :AABFU6927B ASSESSEE BY : SH. ASHISH GOEL, CA REVENUE BY :NONE (SR. D R) DATE OF HEARING : 06.09.2018 DATE OF PRONOUNCEMENT : 03.10.2018 ORDER PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, UNIVERSAL PRECISION SCREWS HEREINAFTER R EFERRED TO AS THE ASSESSEE BY FILING PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 19.01.2015 PASSED BY THE LD. C OMMISSIONER OF INCOME TAX (APPEALS)-XX, NEW DELHI QUA THE ASSES SMENT YEAR 2010-11 ON THE GROUNDS INTER ALIA THAT :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] IS BAD BOTH IN THE EYE OF LA W AND 2 ITA NO. 1454/D EL/2015 (UNIVERSAL PRECISION SCREWS) ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW I N CONFIRMING THE VARIOUS ADDITIONS AND DISALLOWANCES MADE BY THE AO IGNORING' THE ORDER OF THE HONBLE I TAT IN ASSESSEES OWN CASE IN EARLIER YEAR, WHEREBY THE SAME HAS BEEN DELETED, IN TOTAL DISREGARD TO THE PRINCIP LE OF BINDING PRECEDENT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN RESTRICTING THE EXEMPTION UNDER SECTION 10B OF THE INCOME TAX ACT T O AN AMOUNT OF RS.52,34,341/- AS AGAINST RS.70,03,995 /- CLAIMED BY THE ASSESSEE AND ALLOWABLE UNDER THE ACT . 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW I N CONFIRMING THE ACTION OF THE AO IN EXCLUDING THE AM OUNT OF RS.14,21,719/- ON ACCOUNT OF INTEREST WHILE COMP UTING DEDUCTION UNDER SECTION 10B OF THE ACT DESPITE THE FACT THAT SUCH INTEREST INCOME IS INEXTRICABLY LINKED WI TH THE BUSINESS UNDERTAKING AND IS PART OF THE BUSINESS PR OFITS AND HENCE CANNOT BE EXCLUDED WHILE COMPUTING THE DEDUCTION UNDER SECTION 10B OF THE ACT. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW I N CONFIRMING THE ACTION OF THE AO IN NOT EXCLUDING A SUM OF/ RS. 14,29,186/- BEING INTEREST PAID ON LOAN USE D TOWARDS CONSTRUCTION OF THE PROPERTY WHILE COMPUTIN G BUSINESS INCOME. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW I N CONFIRMING THE ACTION OF THE AO IN CONSIDERING TOTA L TURNOVER WHILE COMPUTING EXEMPTION UNDER SECTION 10 B TO BE RS.7,18,75,940/- AS AGAINST RS. 7,14,16,743/- TAKEN BY THE ASSESSEE. 7. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW I N NOT EXCLUDING THE SCRAP SALE FROM THE LOCAL TURNOVER AS WELL AS TOTAL TURNOVER WHILE COMPUTING DEDUCTION UNDER SECTION 10B OF THE ACT. 8 (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN L AW IN CONFIRMING THE ACTION OF THE AO IN NOT ALLOWING DEDUCTION OF AN AMOUNT OF RS.14,29,186/- ON ACCOUNT OF 3 ITA NO. 1454/D EL/2015 (UNIVERSAL PRECISION SCREWS) INTEREST CLAIMED UNDER SECTION 24(B) OF THE ACT WHI LE COMPUTING INCOME FROM HOUSE PROPERTY. (II) THAT THE ABOVESAID DISALLOWANCE HAD BEEN MADE DESPITE THE FACT THAT THE LOAN ON WHICH INTEREST HA S BEEN PAID WAS UTILIZED FOR THE PURPOSE OF CONSTRUCTION O F LET OUT PROPERTY. 9 (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN L AW IN CONFIRMING THE ADHOC DISALLOWANCE OF RS.44,430/- MA DE BY THE AO BEING 10% OF THE EXPENSES INCURRED ON ACCOUNT OF ENTERTAINMENT EXPENSES, TRAVELLING AND CONVEYANCE. (II) THAT THE DISALLOWANCE HAS BEEN CONFIRMED DESPITE TH E SAME BEING MADE ARBITRARILY AND WITHOUT THERE BEING ANY BASIS FOR THE SAME. (III) THE DISALLOWANCE HAS BEEN CONFIRMED REJECTING THE CONTENTION OF ASSESSEE THAT ALL THE EXPENSES HAVE B EEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS ONLY. 10 (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW I N CONFIRMING AN ADHOC DISALLOWANCE OF RS. 1,00,000/- MADE BY AO OUT OF VARIOUS EXPENSES. (II) THAT THE ABOVE DISALLOWANCE HAS BEEN CONFIRMED REJECTING THE CONTENTION OF THE ASSESSEE THAT THE S AME HAS BEEN MADE ON AN ADHOC BASIS WITHOUT THERE BEING ANY BASIS FOR THE SAME. 11 (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW I N CONFIRMING ADHOC DISALLOWANCE OF AN AMOUNT OF RS.25,000/- MADE BY THE AO ON ACCOUNT OF DIWALI EXPENSES. (II) THAT THE ABOVE DISALLOWANCE HAS BEEN CONFIRM ED REJECTING THE CONTENTION OF THE ASSESSEE THAT THE E XPENSES HAS BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS ONLY. 4 ITA NO. 1454/D EL/2015 (UNIVERSAL PRECISION SCREWS) 2. BRIEFLY STATED THE FACTS NECESSARY TO ADJUDICATE THE CONTROVERSY AT HAND ARE : AO MADE ADDITION OF RS. 14,21,719/- BY EXCLUDING THE SAME BEING INTEREST, WHILE COMPUTING DEDUCTION U/S 10B OF THE ACT. AO ALSO MADE ADDITION OF RS. 14,29, 186/- BY NOT EXCLUDING THE SAID AMOUNT BEING PAID ON LOAN UTILIZ ED TOWARDS CONSTRUCTION OF PROPERTY WHILE COMPUTING BUSINESS I NCOME. AO FURTHER TREATED THE TOTAL TURNOVER FOR COMPUTING EX EMPTION U/S 10B AT RS.7,18,75,940/- AS AGAINST RS. 7,14,16,743/- CL AIMED BY THE ASSESSEE. AO HAS ALSO NOT EXCLUDED THE SCRAP SALE F ROM THE TOTAL TURNOVER TO COMPUTE THE DEDUCTION U/S 10B OF THE AC T. AO DISALLOWED 10% OF EXPENSES CLAIMED BY THE ASSESSEE ON ACCOUNT OF ENTERTAINMENT EXPENSES, TRAVELLING EXPENSES AND CON VEYANCE EXPENSES TO THE TUNE OF RS. 44,144/-, 1,90,428/-AND RS. 2,09,737/- RESPECTIVELY. AO FURTHER MADE ADHOC DISALLOWANCES O F RS. 4,31,910/-, RS.19,457/- AND RS.2,12,100/- ON ACCOUN T OF MISCELLANEOUS EXPENSES ON ACCOUNT OF SHORT/EXCESS EXPENSES AND ON GARDEN MAINTENANCE RESPECTIVELY, ON ESTIMATED B ASIS. AO FURTHER MADE ADHOC DISALLOWANCES CLAIMED BY THE ASS ESSEE ON ACCOUNT OF JEWELLERY EXPENSES. 5 ITA NO. 1454/D EL/2015 (UNIVERSAL PRECISION SCREWS) 3. ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) BY WAY OF FILING APPEAL WHO HAS UPHELD THE ADDITION MADE BY T HE AO BY DISMISSING THE APPEAL. FEELING AGGRIEVED, THE ASSE SSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT AP PEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE, GONE THROUGH THE DOCUMENTS RELIED UPON AN D ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN THE LIGH T OF THE FACTS AND CIRCUMSTANCES OF THE CASE. LD. CIT DR MADE A REQ UEST FOR ADJOURNMENT AS SENIOR DR IS ON LEAVE. SINCE THE IS SUE IN CONTROVERSY IS COVERED IN ASSESSEES OWN CASE FOR A Y 2009-10, AS CONTENDED BY THE LD. AR FOR THE ASSESSEE BY PLACING ON RECORD COPY OF THE ORDER, THE CONTENTION RAISED BY LD. CIT DR F OR ADJOURNMENT IS HEREBY REJECTED. GROUNDS NO. 1, 2 & 3 5. GROUND NOS.1, 2 AND 3 HAVE NOT BEEN PRESSED B Y THE LD. AR FOR THE ASSESSEE, HENCE, NEED NO ADJUDICATION. GROUND NO. 4 6. AO AS WELL AS CIT(A) HAVE EXCLUDED THE AMOUNT OF RS.14,21,719/- CLAIMED BY THE ASSESSEE ON ACCOUNT O F INTEREST FOR COMPUTING DEDUCTION U/S 10B OF ACT. THE LD. AR FOR THE ASSESSEE 6 ITA NO. 1454/D EL/2015 (UNIVERSAL PRECISION SCREWS) CONTENDED THAT SINCE THE INTEREST INCOME IS INEXTRI CABLY LINK WITH THE BUSINESS UNDERTAKING AND AS SUCH PART OF THE BU SINESS PROFIT AND FURTHER CONTENDED THAT THE ISSUE IN CONTROVERSY IS COVERED IN ASSESSEES FAVOUR IN ITS OWN CASE FOR ASSESSMENT YE AR 2009-10 IN ITA NO. 2034/DEL/2013. 7. WHEN WE EXAMINE THE DECISION RENDERED BY CO-ORDI NATE BENCH OF TRIBUNAL IN ASSESSEES OWN CASE FOR ASSES SMENT YEAR 2009-10. THE ISSUE HAS BEEN DECIDED IN FAVOUR OF TH E ASSESSEE. OPERATING PART OF THE ORDER PASSED BY CO-ORDINATE BENCH OF TRIBUNAL IS EXTRACT AS UNDER FOR READY PERUSAL :- 6. THE NEXT GROUND IS AGAINST THE TREATMENT OF I NTEREST INCOME AS INELIGIBLE FOR DEDUCTION U/S 10B OF THE A CT. THE ASSESSEE RECEIVED INTEREST ON FDRS AMOUNTING TO `16,01,196/-. ON BEING CALLED UPON TO EXPLAIN AS TO HOW THIS AMOUNT WAS ELIGIBLE FOR DEDUCTION U/S 10B, THE ASSE SSEE STATED THAT THE INTEREST ON FDR WAS RECEIVED ON 'MA RGIN KEPT IN THE BANK FOR UTILIZATION OF LETTER OF CREDI T (L/C) AND BANK GUARANTEE LIMITS FROM BANK.' UNCONVINCED WITH THE ASSESSEE'S SUBMISSIONS, THE AO TREATED SUCH INTERES T AS INCOME FROM OTHER SOURCES AND DID NOT ALLOW DEDUCTI ON U/S 10B ON IT. THE LD. CIT(A) ECHOED THE ASSESSMENT ORD ER ON THIS POINT. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, WE FIND THAT THE AO HE LD INTEREST INCOME AS INELIGIBLE FOR DEDUCTION UNDER SECTION 10B(1) AS IT WAS ITA NO.2034/DEL/2013 NOT 'DERIVED FROM' THE ELIGIBLE BUSINESS. THE VIEW POINT OF THE AO WOU LD HAVE BEEN CORRECT IF THERE HAD BEEN NO FURTHER ELABORATI ON OF THE 7 ITA NO. 1454/D EL/2015 (UNIVERSAL PRECISION SCREWS) EXPRESSION 'SUCH PROFITS AND GAINS AS ARE DERIVED B Y A HUNDRED PER CENT EXPORT ORIENTED UNDERTAKING FROM T HE EXPORT OF ARTICLES OR THINGS.......'. THE POSITION UNDER CONSIDERATION IS NOT AKIN TO SOME OF THE SECTIONS E MPLOYING THIS EXPRESSION WITHOUT ANY FURTHER AMPLIFICATION O F THE SAME. SUB-SECTION (4) OF SECTION 10B GIVES MEANING TO THE EXPRESSION 'PROFITS DERIVED FROM EXPORT OF ARTICLES OR THINGS ........' TO MEAN THE AMOUNT WHICH BEARS TO THE 'PR OFITS OF THE BUSINESS' OF THE UNDERTAKING THE SAME PROPORTION AS THE EXPORT TURNOVER IN RESPECT OF SUCH ARTICLES OR THIN GS, ETC., BEARS TO THE TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY THE UNDERTAKING. A BARE PERUSAL OF SUB-SECTION (4) IN JUXTAPOSITION TO SUB-SECTION (1) OF SECTION 10B TRANSPIRES THAT THE EXPRESSION 'DERIVED BY'' USED IN SUB-SECTI ON (1) CANNOT BE CONSTRUED IN ITS LITERAL SENSE TO MEAN ENCOMPASSING ONLY SUCH ITEMS OF INCOME WHICH HAVE D IRECT OR IMMEDIATE NEXUS WITH THE ELIGIBLE UNDERTAKING. T HE MEANING GIVEN TO THIS EXPRESSION IN SUB-SECTION (4) AS REFERRING TO 'THE PROFITS OF THE BUSINESS' MAKES TH E EXPRESSION MORE LIBERAL TO COVER ANY INCOME WHICH I S ITA NO.2034/DEL/2013 CONNECTED WITH 'THE BUSINESS' AND SHOULD NOT BE NECESSARILY 'DERIVED FROM THE INDUSTRIAL UND ERTAKING' ALONE. TURNING TO THE NATURE OF PRESENT INTEREST IN COME, BEING ARISING FROM FDRS OBTAINED FOR MARGIN MONEY F OR THE PURPOSES OF AVAILING CREDIT LIMITS FROM BANKS, IT BECOMES VIVID THAT SUCH INTEREST BEARS THE REQUISITE CHARAC TERISTICS OF A 'BUSINESS INCOME.' THE MUMBAI BENCH OF THE TRIBUN AL IN LIVINGSTONES JEWELLERY (P) LTD. VS. DCIT (2009) 31 SOT 323 (MUM) HAS HELD THAT INTEREST DERIVED BY AN EXPO RTER FROM FIXED DEPOSITS MADE WITH THE BANK FOR OBTAININ G CREDIT LIMITS IS ELIGIBLE FOR THE BENEFIT U/S 10A. SIMILAR VIEW HAS BEEN EXPRESSED IN ACIT VS. MOTOROLA INDIA ELECTRICA LS (P) LTD. (2008) 114 ITD 387 (BANG.) BY HOLDING THAT THE INTEREST INCOME HAVING CLOSE NEXUS WITH THE BUSINESS ACTIVIT Y OF THE ASSESSEE IS ASSESSABLE AS INCOME FROM BUSINESS AND, HENCE, ELIGIBLE FOR THE BENEFIT U/S 10A AND SECTION 10B . IN VIEW OF THE ABOVE DISCUSSION, WE HOLD THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S10B OF THE ACT IN RESPECT OF THE INTER EST INCOME EARNED ON FDRS MADE FOR THE PURPOSES OF KEEP ING MARGIN MONEY OR FOR AVAILING ANY OTHER CREDIT FACIL ITY FROM BANKS. 8 ITA NO. 1454/D EL/2015 (UNIVERSAL PRECISION SCREWS) 8. THE IMPUGNED ORDER ON THE ISSUE OF DEDUCTION U/S 10B IS SET ASIDE AND THE MATTER IS SENT BACK TO THE AO FOR COMPUTING DEDUCTION U/S 10B AFRESH IN CONFORMITY WI TH OUR ABOVE FINDINGS AND CONCLUSIONS. 8. SO FOLLOWING THE DECISION RENDERED BY THE CO-ORD INATE BENCH OF TRIBUNAL IN ASSESSEES OWN CASE THE MATTER IS RE FERRED BACK TO THE AO FOR RECOMPUTATION OF DEDUCTION U/S 10B IN VIEW O F WHAT HAS BEEN DISCUSSED ABOVE. CONSEQUENTLY GROUND NO. 4 IS DETERMINED IN FAVOUR OF THE ASSESSEE. GROUNDS NO. 5 & 8 9. AO AS WELL AS LD. CIT(A) HAVE NOT EXCLUDED THE AMOUNT OF RS. 14,29,186/- CLAIMED AS INTEREST PAID ON LOAN US ED FOR THE PURPOSE OF CONSTRUCTION OF PROPERTY WHILE COMPUTING THE BUSINESS INCOME. ASSESSEE BROUGHT TO OUR NOTICE THAT THIS IS SUE IS ALSO COVERED IN ASSESSEES FAVOUR IN ITS OWN CASE FOR AS SESSMENT YEAR 2009-10. CO-ORDINATE BENCH OF TRIBUNAL HAS DEALT WITH THIS ISSUE IN PARA 10 OF THE ORDER (SUPRA) WHICH IS EXTRACTED FOR READY PERUSAL AS UNDER :- 10. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PE RUSING THE RELEVANT MATERIAL ON RECORD, IT IS OBSERVED THA T SECTION 24(B) TALKS OF ALLOWING DEDUCTION FOR THE INTEREST PAYAB LE BY THE ASSESSEE WHERE PROPERTY HAS BEEN ACQUIRED, CONS TRUCTED, 9 ITA NO. 1454/D EL/2015 (UNIVERSAL PRECISION SCREWS) REPAIRED, RENEWED OR RECONSTRUCTED WITH BORROWED CA PITAL. THE ASSESSEE HAS ADMITTEDLY SHOWN SOME INCOME FROM LET OUT PROPERTY UNDER THE HEAD 'INCOME FROM HOUSE PROP ERTY.' ONCE SOME TERM LOAN HAS BEEN TAKEN FOR ACQUIRING OR CONSTRUCTING, ETC., THE PROPERTY, WHICH FETCHED INC OME UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY', THEN, INTERE ST ON SUCH LOAN HAS TO BE ALLOWED AS DEDUCTION U/S 24(B) OF THE ACT. THE VIEW POINT OF THE ASSESSEE TO THIS EXTENT IS ERGO ACCEPTED IN PRINCIPLE. HOWEVER, WE ARE UNABLE TO CA LCULATE SUCH AMOUNT OF INTEREST WITH PRECISION. UNDER SUCH CIRCUMSTANCES, THE IMPUGNED ORDER IS SET ASIDE ON T HIS SCORE AND THE MATTER IS SENT BACK TO THE AO FOR VERIFYING AND ASCERTAINING THE AMOUNT OF LOAN UTILIZED FOR THE BU ILDING IN RESPECT OF WHICH RENTAL INCOME ASSESSABLE UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY' WAS EARNED AND, ACCORD INGLY, ALLOWING DEDUCTION TOWARDS SUCH INTEREST U/S 24(B) OF THE ACT. NEEDLESS TO SAY, THE ITA NO.2034/DEL/2013 ASSE SSEE WILL BE ALLOWED A REASONABLE OPPORTUNITY OF BEING H EARD IN SUCH DETERMINATION. 10. SO WHEN UNDISPUTEDLY THE ASSESSEE HAS PAID THE INTEREST ON LOAN UTILIZED FOR THE CONSTRUCTION OF PROPERTY HAD SHOWN ITS INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY, INTERE ST THEREON IS ALLOWABLE DEDUCTION U/S 24B OF THE ACT. SO FOLLOWIN G THE DECISION RENDERED BY CO-ORDINATE BENCH OF TRIBUNAL, WE DIREC T THE AO TO ALLOW THE DEDUCTION CLAIMED BY THE ASSESS AFTER VER IFYING THE AMOUNT OF LOAN UTILIZED, INTEREST PAID THEREON AND THEREAFTER ASSESS THE INCOME FROM THE HOUSE PROPERTY EARNED BY THE AS SESSEE, BY 10 ITA NO. 1454/ DEL/2015 (UNIVERSAL PRECISION SCREWS) PROVIDING OPPORTUNITY OF BEING HEARD. SO GROUND NO. 5 AND 8 ARE DETERMINED IN FAVOUR OF THE ASSESSEE. GROUND NO. 6 11. GROUND NO. 6 IS NOT PRESSED BY LD. AR FOR ASSES SEE BECAUSE OF THE MEAGER AMOUNT INVOLVED, SO IT NEEDS NO ADJUD ICATION. GROUND NO. 7 12. AO AS WELL AS THE CIT(A) HAS NOT EXCLUDED THE S CRAP SALE FROM TURN OVER AS WELL AS TOTAL TURNOVER WHILE COMP UTING THE DEDUCTION U/S 10B OF THE ACT. THIS ISSUE HAS ALSO B EEN DECIDED IN ASSESSEES FAVOUR IN ITS OWN CASE FOR AY 2009-10 BY THE CO- ORDINATE BENCH OF TRIBUNAL, WHICH HAS BEEN AFFIRMED BY THE HONBLE DELHI HIGH COURT. OPERATIVE PART OF THE DEC ISION RENDERED BY HONBLE HIGH COURT IS EXTRACTED AS UNDER :- 5. IN ALLOWING THE ASSESSEES APPEAL BY THE IMPUGNED ORDER, THE ITAT HELD THAT IN TERMS OF THE JUDGMENT OF THE SUPREME COURT IN CIT V. PUNJAB STAI NLESS STEEL INDUSTRIES (2014) 364 ITR 144 (SC) SALE OF SC RAP IS NOT INCLUDABLE IN THE TOTAL TURNOVER SINCE THE ASSESSEE WAS NOT ENGAGED IN THE BUSINESS OF SCRAP. CONSEQUENTLY, THE IMPUGNED ORDERS OF THE CIT(A) AND THE AO TREATING T HE SCRAP AMOUNT AS PART OF THE DOMESTIC TURNOVER WAS S ET ASIDE. 6. ON THE ABOVE ASPECT, THE COURT FINDS NO ERROR COMMITTED BY THE ITAT AS THE LEGAL POSITION HAS BEE N MADE 11 ITA NO. 1454/ DEL/2015 (UNIVERSAL PRECISION SCREWS) EXPLICIT BY THE DECISION OF THE SUPREME COURT IN CI T V. PUNJAB STAINLESS STEEL INDUSTRIES (SUPRA). CONSEQUE NTLY, THE COURT DECLINES TO FRAME A QUESTION ON THIS ISSUE. 13. SO FOLLOWING THE DECISION RENDERED BY THE CO-OR DINATE BENCH OF TRIBUNAL AFFIRMED BY HONBLE HIGH COURT, WE ARE OF THE CONSIDERED VIEW THAT THE AMOUNT OF SALE OF SCRAP IS NOT INCLUDIBLE IN THE TOTAL TURNOVER OR LOCAL TURN OVER AS THE ASSESS EE IS NOT INTO THE BUSINESS OF SCRAPS, SO WE FIND NO ILLEGALITY OR PER VERSITY IN THE FINDINGS RETURNED BY THE LD. CIT(A), HENCE GROUND N O.7 IS DETERMINED AGAINST THE ASSESSEE. GROUNDS NO. 9, 10 AND 11 14. GROUNDS NO. 9, 10 & 11 HAVE NOT BEEN PRESS ED BY LD. AR FOR ASSESSEE BECAUSE OF THE MEAGER AMOUNT INVOLVED. 15. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE P RESENT APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD OCTOBER, 2018. SD/- SD/- (G.D.AGRAWAL) (KULDIP SIN GH) PRESIDENT JUDICIA L MEMBER DATE: 3 RD OCTOBER, 2018 BINITA 12 ITA NO. 1454/ DEL/2015 (UNIVERSAL PRECISION SCREWS) COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER AR, ITAT