M/s. Fairdeal Filaments Ltd., Surat V. The Dy.CIT.,Circle-1, Surat

ITA 1562/AHD/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0259 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 06-12-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 12-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: Y P VERMA
• Assessee Lawyers: R N VEPARI
• Keywords: Rejection of books of accounts; Depreciation
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , .. , '# ' $ BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI T.R.MEENA, ACCOUNTANT MEMBER 1. ./ I.T.A. NO.1562/AHD/2010 A.Y. 2007-08 2. ./ I.T.A. NO.1576/AHD/2010 A.Y. 2007-08 1. FAIRDEAL FILAMENTS LTD. 3 RD FLOOR DAWAR CHAMBERS RING ROAD SURAT 2.THE DY.CIT CIRCLE-1, SURAT % / VS. 1. THE DY.CIT CIRCLE-1, SURAT 2. M/S.FAIRDEAL FILAMENTS LTD., SURAT ./ ./ PAN/GIR NO. : AAACF 3804 A ( / APPELLANTS ) .. ( / RESPONDENTS ) ASSESSEE BY : SHRI R.N.VEPARI REVENUE BY : SHRI Y.P.VERMA, SR.D.R. / DATE OF HEARING : 06.12.2012 !' / DATE OF PRONOUNCEMENT : 15.2.13 #$ / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THESE ARE THE CROSS-APPEALS BY THE ASSESSEE AND T HE REVENUE FROM ARISING FROM THE ORDER OF THE LD.CIT(A)-I, SURAT DATED 10/03/2010 PASSED FOR A.Y. 2007-08. 2. ASSESSEES APPEAL, ITA 1562/AHD/2010 A.Y. 2007-08 2.1. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE F OLLOWING GROUNDS:- (I) DISALLOWANCE U/S.40A(2) OF THE ACT :- ITA NO.1562/AHD/2010 (BY ASSESSEE) & ITA NO.1576/AHD/2010 (BY REVENUE) FAIRDEAL FILAMENTS LTD. VS. DCIT ASST.YEAR - 2007-08 - 2 - THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN RETAINING ADDITION OF RS.23.36 LACS IN RESPECT OF P AYMENT MADE TO UDAY YARN TWISTING GROUP BY HOLDING IT AS FALLING U /S.40A(2)(B) OF THE ACT, WHEN THE ABOVE CONCERN IS NOT FALLING U/S. 40A(2)(B) OF THE ACT. (II) DISALLOWANCE OF DEPRECIATION:- (1) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN CONFIRMING THE VIEW OF THE ASSESSING OFFICER THAT T HE APPELLANT WAS NOT ENTITLED TO DEDUCTION U/S.32 IN RESPECT OF DEPRECIATION @ 50% ON MACHINERY REQUIRED UNDER TUFS. (2) ON THE FACTS AND CIRCUMSTANCES AND AS PER LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) WAS NOT JUSTIF IED IN TAKING THE AFOREMENTIONED VIEW. (III) MISCELLANEOUS :- (1) THE APP SUBMITS THAT IT IS NOT LIABLE TO INTERE ST U/S.234B OF THE ACT. (2) THE APPELLANT SUBMITS THAT IT IS NOT LIABLE T O INTEREST U/S.234C OF THE ACT. (3) THE APP CRAVES TO LEAVE, ADD, ALTER OR VARY A NY OF THE GROUNDS OF APPEAL. 2.2. REVENUES APPEAL, ITA 1576/AHD/2010 A.Y. 2007-08 IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLOWI NG GROUNDS:- (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN RESTRICTING TH E ADDITION MADE BY THE A.O. ON ACCOUNT OF FALL IN GP OF RS.1,49,24,480/- TO 23,36,000/- (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF TH E ASSESSING OFFICER. ITA NO.1562/AHD/2010 (BY ASSESSEE) & ITA NO.1576/AHD/2010 (BY REVENUE) FAIRDEAL FILAMENTS LTD. VS. DCIT ASST.YEAR - 2007-08 - 3 - (3) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A) MAY BE SET-ASIDE AND THAT OF ASSESSING OFFICER MAY BE REST ORED TO THE ABOVE EXTENT. 3. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S. 143(3) DATED 30.12.2009 WERE THAT THE A SSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF YARN & FABRICS. IT WAS NOTED BY THE AO THAT DURING THE YEAR UNDER CONSIDER ATION, THE ASSESSEE HAS SHOWN GROSS PROFIT OF RS.4,15,27,000/- ON TOTAL TURNOVER OF RS.62,70,79,000/- WHICH WORKED OUT TO 6.62% AS AGAI NST THE G.P. OF 13.70% ON TOTAL TURNOVER OF RS.45,25,71,000/- SHOWN IN THE IMMEDIATE PRECEDING YEAR. ACCORDING TO AO, THERE WAS A FALL IN G.P. OF 7.08% DURING THE YEAR UNDER CONSIDERATION AS COMPARED TO IMMEDIATE PRECEDING YEAR. IN COMPLIANCE OF SHOW CAUSE, THE EXPLANATION OF THE ASSESSEE WAS THAT THERE WAS HIGH INCREASE IN THE SALARY AND WAGE S. IT HAS ALSO BEEN INFORMED THAT THE COST OF THE MATERIAL HAD GONE UP. AS PER AO, THERE WAS DISPROPORTIONATE INCREASE IN THE EXPENSES. TH ERE WAS NO DAY-TO-DAY STOCK REGISTER MAINTAINED BY THE ASSESSEE. HE HAS REFERRED SAMIR DIAMONDS 71 ITD 75 FOR THE LEGAL PROPOSITION THAT IN THE ABSENCE OF INCOMPLETE BOOKS OF ACCOUNTS, THE AO IS JUSTIFIED I N INVOKING THE PROVISIONS OF SECTION 145(2) OF IT ACT. THE AO HA S ALSO CITED AWADHESH PRATAP SINGH ABDUL REHMAN AND BROTHERS 2 10 ITR 406 FOR THE PROPOSITION THAT THE PRESENCE OR THE ABSENC E OF A STOCK REGISTER IS IMPORTANT. THE ABSENCE OF THE SAME GIVE RISE TO A LEGITIMATE INFERENCE THAT ALL IS NOT WELL WITH THE BOOKS. FINALLY, APPL YING THE PROVISIONS OF SECTION 145(3) OF IT ACT, THE BOOKS OF ACCOUNTS WER E REJECTED AND IN HIS OPINION, IT WAS REASONABLE TO ADOPT 9% GP RATE AS A GAINST THE GP OF ITA NO.1562/AHD/2010 (BY ASSESSEE) & ITA NO.1576/AHD/2010 (BY REVENUE) FAIRDEAL FILAMENTS LTD. VS. DCIT ASST.YEAR - 2007-08 - 4 - 6.62% SHOWN BY THE ASSESSEE. THE DIFFERENCE OF RS .1,49,24,480/- WAS TAXED IN THE HANDS OF THE ASSESSEE. 4. AT THIS JUNCTURE, IT IS WORTH TO MENTION THAT I N THE GROUNDS OF APPEAL THE ASSESSEE HAS MADE A REFERENCE OF DISALLO WANCE U/S.40A(2)(B) OF IT ACT AND OBJECTED THAT THE UDAY YARN TWISTING DID NOT FALL UNDER SECTION 40A(2)(B). IN THIS REGARD, WE HAVE NOTED T HAT THERE WAS NO INVOCATION OF THE PROVISIONS OF SECTION 40A(2)(B) B Y THE AO IN THE IMPUGNED ASSESSMENT ORDER. THERE WAS ONLY A REFER ENCE OF PAYMENT OF LEASE RENT WHICH WAS INCREASED DURING THE YEAR UNDE R CONSIDERATION. OTHERWISE, THERE WAS NO SPECIFIC MENTION OF THE INV OCATION OF SECTION 40A(2)(B) FOR THE PURPOSE OF DISALLOWANCE. THE AO HAS NOTED THAT THE LEASE RENT PAID TO UDAY YARN TWISTING HAD INCREASED FROM RS.35.83 LACS TO RS.59.19 LACS. IT HAS ALSO BEEN NOTED BY THE AO THAT THE SAID PARTY HAPPENED TO BE A RELATED PARTY THUS FALLING WITHIN THE MEANING OF SECTION 40A(2)(B). ACCORDING TO HIM, THE INCREASE OF 65% IN LEASE RENT WAS QUITE UNREASONABLE. IN THE OPINION OF THE AO, THE ASSESSEE HAD NOT GIVEN ANY SPECIFIC REASON FOR SUCH INCREASE IN THE LEASE RENT. BUT THE FACT REMAINED THAT THE AO HAD FINALLY APPLIED THE GP RAT E AT 9% AND SINCE THE ASSESSEE HAD ADOPTED 6.62%, THEREFORE THE DIFFERENC E BETWEEN THE TWO GP RATES, I.E. 2.38% WAS ACCORDINGLY TAXED IN THE HAN DS OF THE ASSESSEE. 5. WHEN THE MATTER REACHED BEFORE THE CIT(A), THE V IEW TAKEN BY HIM IS REPRODUCED BELOW FOR THE SAKE OF CLARITY. ITA NO.1562/AHD/2010 (BY ASSESSEE) & ITA NO.1576/AHD/2010 (BY REVENUE) FAIRDEAL FILAMENTS LTD. VS. DCIT ASST.YEAR - 2007-08 - 5 - 2.3. I HAVE CONSIDERED THE SUBMISSION MADE BY THE APPELLANT AND THE OBSERVATION OF THE A.O. THE MAIN REASON FOR RE JECTING THE BOOKS OF ACCOUNT IS THAT THE ASSESSEE HAS NOT MAINT AINED DAY-TO- DAY STOCK REGISTER WHEREAS THE ASSESSEE HAS STATED THAT IT HAS MAINTAINED THE STOCK REGISTER AS IT WAS SUBJECT TO EXCISE DUTY. THE SAME WAS PRODUCED BEFORE THE A.O. THE A.O. HAS REJ ECTED THE BOOKS OF ACCOUNT SAYING THAT THE VALUATION OF CLOSI NG STOCK IS NOT SUPPORTED WITH EVIDENCES. THE APPELLANT ON THE OTH ER HAND STATED THAT VIDE LETTER DATED 30.11.2009 ANNEXURE-VII GAVE COMPLETE DETAILS OF STOCK RECORD. THE APPELLANT HAS BEEN AB LE TO SUBSTANTIALLY EXPLAIN THE FALL IN G.P. RATE IN MANU FACTURING AS SEEN FROM THE ABOVE DISCUSSION. HOWEVER, WITH RESPECT T O THE LEASE RENT IT IS SEEN THAT THE LEASE RENT HAS BEEN INCREASED F ROM RS.35.83 LACS TO RS.59.19 LACS, I.E. AN INCREASE OF ALMOST RS.23. 36 LACS. IT HAS BEEN STATED THAT 52 WATER JET LOOMS WERE UTILIZED B OTH IN CURRENT YEAR AS WELL AS IN LAST YEAR AND STILL THE LEASE RE NT HAS INCREASED SUBSTANTIALLY BY ALMOST 65%. THE EXPLANATION OF TH E ASSESSEE THAT THE LEASE RENT IS PAID AS PER AGREED CONTRACT. CON FIRMATION OF THE PARTY WAS GIVEN. IT IS PERTINENT TO NOTE THAT THE PARTY IS COVERED BY PROVISIONS OF SECTION 40A(2)(B) AND HENCE THIS EXPL ANATION IS NOT FULLY ACCEPTABLE. THE APPELLANT HAS BROUGHT NO MATERIAL ON RECORD TO SHOW THAT THE LEASE RENT OF THE WATER JET LOOM HAD TO BE INCREASED. THIS IS SECOND YEAR OF TAKING THE WATER JET LOOMS. INCREASE OF RENT JUST AFTER ONE YEAR IS NOT JUSTIFI ED, SPECIALLY WHEN THE LESSER IS SISTER CONCERN AND BECAUSE OF THIS RE ASON ALSO THE ASSESSEES PROFIT HAS DECREASED. HENCE, THIS INCRE ASE OF EXPENDITURE BY RS.23.36 LACS COVERED BY SECTION 40A (2)(B) IS NOT AT ALL JUSTIFIABLE . IN VIEW OF THE ABOVE, I AGREE WITH THE APPELLANT THAT THERE IS NO REASON FOR REJECTING THE BOOKS OF ACCOUNT, SINCE THE A.O. HAS NOT BROUGHT ANY SPECIFIC DEFECTS ON IT. T HE A.O. HAS BROUGHT NO MATERIAL TO SHOW THAT THE SALES AND PURC HASES WERE NOT GENUINE, BOGUS OR PURCHASES WERE INFLATED ETC. IN VIEW OF THIS, REJECTING OF BOOKS OF ACCOUNT IS DELETED. HOWEVER, AS REGARDS ADDITION OF G.P. IS CONCERNED, THE SAME IS RESTRICT ED TO RS.23.36 LACS BEING DISALLOWANCE U/S.40A(2)(B) AS THE ASSESS EE HAS INCREASED ITS COST OF LEASE RENT IN RESPECT OF THE GROUP CONCERN, NAMELY, UDAI YARN TWISTING GROUP, THAN THE SECOND R EASON WITH NO REASON. IN VIEW OF THE ABOVE, THE ADDITION OF RS.1,49,24, 480/- ITA NO.1562/AHD/2010 (BY ASSESSEE) & ITA NO.1576/AHD/2010 (BY REVENUE) FAIRDEAL FILAMENTS LTD. VS. DCIT ASST.YEAR - 2007-08 - 6 - IS RESTRICTED TO RS.23.36 LACS. THESE GROU7NDS OF APPEAL ARE, THEREFORE, PARTLY ALLOWED. 6. IT WAS NOTED BY HIM THAT THE REJECTION OF BOOKS OF ACCOUNTS BY THE AO FOR NOT MAINTAINING DAY-TO-DAY STOCK REGISTER WA S NOT ON SOUND FOOTING BECAUSE IT WAS STATED BEFORE HIM THAT THE A SSESSEE HAD MAINTAINED THE STOCK REGISTER AS PER THE REQUIREMENT OF EXCISE DEPARTMENT. THE RECORDS OF THE EXCISE DUTY WAS PLACED BEFORE THE AO . AS PER LD.CIT(A), THE ASSESSEE WAS ALSO IN A POSITION TO SUBSTANTIALL Y EXPLAIN THE FALL IN GP. BUT IN RESPECT OF LEASE-RENT, THE OBSERVATION OF LD .CIT(A) WAS THAT THE PAYMENT TO SISTER-CONCERN WAS NOT JUSTIFIED ESPECIA LLY THE SUBSTANTIAL INCREASE IN RENT IN RESPECT OF LEASE-OF WATER JET L OOMS. THEREFORE, THE INCREASE OF LEASE-RENT OF RS.23.36 LACS WAS HELD TO BE COVERED BY THE PROVISIONS OF SECTION 40A(2)(B) OF THE ACT. BECAUS E OF THIS PART RELIEF NOW BOTH THE SIDES ARE BEFORE US. 7. FROM THE SIDE OF THE ASSESSEE, LD.AR MR.R.N.VEPA RI APPEARED AND AT THE OUTSET INFORMED THAT ACTUALLY THE FALL IN TH E GP IN THE MANUFACTURING OPERATION WAS ONLY 1.92%, THEREFORE T HE AO HAS WRONGLY HELD THAT THE FALL IN GP WAS 2.38%. HE HAS BIFURCA TED THE GROSS PROFIT RATE OF THE DIFFERENT OPERATIONS OF THE ASSESSEE IN THE FOLLOWING MANNER:- REASONS FOR FALL IN RATE OF GROSS PROFIT RATE ASST.YEAR TURNOVER RS. GROSS PROFIT RS. RATE 2006-07 2007-08 COMBINED 45,40,57,047 61,39,77,799 4,81,39,131 4,37,97,172 13.76% 6.62% ITA NO.1562/AHD/2010 (BY ASSESSEE) & ITA NO.1576/AHD/2010 (BY REVENUE) FAIRDEAL FILAMENTS LTD. VS. DCIT ASST.YEAR - 2007-08 - 7 - 2006-07 2007-08 MANUFACTURING 43,20,65,348 44,46,57,250 4,77,32,844 4,06,09,091 11.05% 9.13% 2006-07 2007-08 TRADING 2,19,91,699 (4.8% OF TOTAL) 16,93,20,549 (27.5% OF TOTAL) 4,06,287 31,88,081 1.85% 1,88% ACT7UAL FALL OF RATE OF GROSS PROFIT IN MANUFACTURI NG OPERATION HAS BEEN FROM 11.05% TO 9.13% I.E. BY 1.92% ONLY. 7.1. THE NEXT PLANK OF THE ARGUMENT OF THE LD.AR WA S THAT PER SE THE NON-MAINTENANCE OF STOCK REGISTER SHOULD NOT BE MAD E THE BASIS FOR ADDITION. CASE LAW RELIED UPON WERE AS FOLLOWS:- 1. KIRAN CORPORATION [TM] - 102 TTJ 375 (AHD) 2. PROTINKEM - 102 TTJ 604 (ASR) 3. GAJANAN TRADERS - 104 TTJ 1030 (BANG] 4. ASHOKKUMAR AGARWAL - 98 TTJ 663 (JD.) 7.2. FURTHER, IT HAS ALSO BEEN ARGUED THAT THE ASSE SSEE HAD MAINTAINED THE STOCK RECORDS ON SOFTWARE KNOWN AS DOS. LD.AR HAS ALSO INFORMED THAT THE ASSESSEE HAD MAINTAINED THE COMPLETE RECOR D AS PRESCRIBED BY EXCISE DEPARTMENT. HE HAS THEREFORE PLEADED THAT T HE GP ADDITION MADE BY THE AO MERELY BECAUSE OF THE REASON THAT THERE W AS NO STOCK REGISTER WAS BASELESS. 8. FROM THE SIDE OF THE REVENUE, LD.SR.DR MR.Y.P.VE RMA HAS PLEADED THAT IN THE ABSENCE OF STOCK REGISTER, THE AO IS EMPOWERED TO ESTIMATE THE GP. RATHER, THE LD.CIT(A) HAS ARBITRA RILY HELD THAT THE PROVISIONS OF SECTION 40A(2)(B) WAS TO BE APPLIED, ALTHOUGH THE AO HAS ITA NO.1562/AHD/2010 (BY ASSESSEE) & ITA NO.1576/AHD/2010 (BY REVENUE) FAIRDEAL FILAMENTS LTD. VS. DCIT ASST.YEAR - 2007-08 - 8 - NOT MADE OUT THE CASE IN THAT MANNER. BECAUSE OF THIS REASON LD.DR HAS PLEADED THAT THE QUESTION OF 40A(2)(B) ALONG WITH T HE GP ADDITION IS REQUIRED TO BE CONSIDERED BY THE TRIBUNAL. 9. WE HAVE HEARD BOTH THE SIDES. WE HAVE PERUSED T HE MATERIAL ON RECORD. AT FIRST, WE SHALL ADJUDICATE UPON THE BAS IS OF GP ADDITION AS MADE BY THE AO. WE HAVE NOTED THAT THE ASSESSEE WA S IN A POSITION TO SUBSTANTIATE ITS SALES AS ALSO THE PURCHASES. RAT HER, THE UNDISPUTED FACT WAS THAT THE MONTH-WISE QUANTITATIVE DETAILS OF TH E MANUFACTURED ARTICLE WAS KEPT BY THE ASSESSEE. THE ASSESSEE WAS SUBJE CT TO EXCISE DUTY, HENCE UNDER OBLIGATION TO MAINTAIN SUCH RECORDS. IT HAS ALSO BEEN NOTED THAT STOCK RECORDS FOR EACH SEGMENT, I.E. SIZING, T EXTURISING, TFO AND WEAVING ACTIVITY HAS ALSO BEEN MAINTAINED BY THE AS SESSEE. THUS, IT WAS PLEADED THAT FOR EACH SEGMENT A SEPARATE MONTH-WISE QUANTITY IN RESPECT OF OPENING STOCK, PURCHASE, SALES, PURCHASE RETURNS , SALES RETURNS AND TRANSFER OF CLOSING STOCK WAS DULY MAINTAINED. WE ARE ALSO OF THE VIEW, AS HELD BY SEVERAL COURTS THAT THE ABSENCE OF STOCK REGISTER AS DEMANDED BY THE AO, PER SE WOULD NOT LEAD TO AN INFERENCE TH AT REST OF THE ACCOUNTS OF THE ASSESSEE WERE ALSO FALSE OR INCOMPLETE. TH E ABSENCE OF THE STOCK REGISTER SHOULD BE COUPLED WITH THE OTHER FACTS TO DEMONSTRATE THAT THERE WAS FALSITY IN THE BOOK RESULT, THEN ONLY THE AO IS EMPOWERED TO APPLY AN ESTIMATION TO DETERMINE THE PROFIT OF THE ASSESSEE . ON THE CONTRARY, THE ASSESSEE HAS INFORMED THAT THE SLIGHT FALL IN THE G P WAS BECAUSE OF HIKE IN THE RATE OF PAYMENT OF SALARY AND WAGES AS ALSO THE RE WAS HIKE IN THE COST OF THE MATERIAL. COMPARATIVE FIGURES WERE ON RECO RD TO SUBSTANTIATE THE HIKE IN THE EXPENSES. WE THEREFORE HOLD THAT THE L D.CIT(A) HAS RIGHTLY ITA NO.1562/AHD/2010 (BY ASSESSEE) & ITA NO.1576/AHD/2010 (BY REVENUE) FAIRDEAL FILAMENTS LTD. VS. DCIT ASST.YEAR - 2007-08 - 9 - HELD THAT THE ASSESSEE WAS ABLE TO SUBSTANTIALLY EX PLAIN THE FALL IN GP RATE IN MANUFACTURING ACTIVITY. ON THIS COUNT, WE THERE FORE HOLD THAT NO ADDITION IS REQUIRED IN THE HANDS OF THE ASSESSEE. 9.1. NOW WE ARE LEFT WITH AN ANOTHER ISSUE IN RELAT ION TO THE INVOCATION OF THE PROVISIONS OF SECTION 40A(2)(B) OF IT ACT. SINCE THE ORDER OF THE AO MERGES WITH THE ORDER OF LD.CIT(A), THEREFORE TH E APPLICABILITY OF THE PROVISIONS OF SECTION 40A(2)(B), AS INVOKED BY THE CIT(A), MUST NOT BE OVERLOOKED. HOWEVER, WHILE APPLYING THE PROVISIONS OF SECTION 40A(2)(B), THE LD.CIT(A) HAS NOT EXAMINED THE LEASE AGREEMENT, IF ANY, AS ALSO THE REASON FOR INCREASE IN LEASE-RENT FROM RS.35.83 LACS TO RS.59.19 LACS. ONLY THIS MUCH WAS STATED THAT 52 W ATER JET-LOOMS. WERE UTILIZED. THERE WAS A MENTION OF A CONTRACT ON TH E BASIS OF WHICH THE LEASE-RENT WAS PAID, BUT THAT FACT REMAINED UNINVES TIGATED. FROM THE TONE AND TENOR OF THE ARGUMENTS OF BOTH THE SIDES, WE HAVE NOTICED THAT THE REVENUE AS ALSO THE ASSESSEE BOTH REMAINED UNSA TISFIED WITH THE RESULT OF LD.CIT(A), HENCE BOTH ARE IN APPEAL BEFOR E US. IT WAS EXPRESSED FROM BOTH THE SIDES THAT BEFORE INVOCATION OF SECTI ON 40A(2)(B), CERTAIN INFORMATIONS WERE REQUIRED TO BE COLLECTED AND IN T HE ABSENCE OF THOSE INFORMATION IT WAS NOT FAIR ON THE PART OF THE LD.C IT(A) TO ASSESS AN AMOUNT BY HOLDING THAT THE INCREASE IN THE LEASE-RE NT WAS NOT JUSTIFIED. WE THEREFORE DEEM IT PROPER TO RESTORE THIS ISSUE B ACK TO THE FILE OF LD.CIT(A) FOR DE NOVO ADJUDICATION WITH THE DIRECTI ON THAT THE PARTIES BEFORE US SHOULD BE ALLOWED A REASONABLE OPPORTUNIT Y OF HEARING TO BE GRANTED ON THIS ISSUE, SO THAT A REASONABLE AS ALSO A JUSTIFIABLE VIEW SHOULD FOLLOW. ITA NO.1562/AHD/2010 (BY ASSESSEE) & ITA NO.1576/AHD/2010 (BY REVENUE) FAIRDEAL FILAMENTS LTD. VS. DCIT ASST.YEAR - 2007-08 - 10 - 10. THE RESULT OF ABOVE DISCUSSION IS THAT GROUND N O.1 OF BOTH SIDES ARE SET ASIDE, HENCE TO BE TREATED AS ALLOWED FOR S TATISTICAL PURPOSES ONLY. 11. APROPOS TO GROUND NO.2 OF THE ASSESSEE, THE ISS UE OF DISALLOWANCE OF DEPRECIATION ON THE MACHINERY UNDER TUF SCHEME N OW STOOD RESOLVED BY SEVERAL ORDERS AS RIGHTLY FOLLOWED BY LD.CIT(A) AND RESTRICTED TO 50%. FOR AYS 2004-05 & 2006-07 BY A CONSOLIDATED ORDER O F ITAT B BENCH AHMEDABAD IN ASSESSEEES OWN CASE TITLED AS FAIRDE AL FILAMENTS LTD. VS. DCIT DATED 23/04/2010, IT WAS HELD BY PARAGRAPH NO .5 THAT THE ASSESSEE IS ENTITLED FOR DEPRECIATION ON PLANT & MACHINERY P URCHASED UNDER TUF SCHEME @ 50%. RESPECTFULLY FOLLOWING THIS DECISION , WE HEREBY DIRECT TO ALLOW THE SAME RATE OF DEPRECIATION FOR THE YEAR UNDER CONSIDERATION AS WELL. GROUND IS ALLOWED. 12. IN THE RESULT, BOTH THE APPEALS MAY BE TREATED AS PARTLY ALLOWED THAT TOO FOR STATISTICAL PURPOSES ONLY. SD/- SD/- ( %..&' ) ( & & ' ) # () # ( T.R. MEENA ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 15 / 2 /2013 %.., .)../ T.C. NAIR, SR. PS ITA NO.1562/AHD/2010 (BY ASSESSEE) & ITA NO.1576/AHD/2010 (BY REVENUE) FAIRDEAL FILAMENTS LTD. VS. DCIT ASST.YEAR - 2007-08 - 11 - '' ( )*+ ,'+- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. + ,- . / CONCERNED CIT 4. . () / THE CIT(A)-I, SURAT 5. 123 )),-, ,-', 4&#+# / DR, ITAT, AHMEDABAD 6. 356 7 / GUARD FILE. ''% / BY ORDER, 1 ) //TRUE COPY// ./ / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DIRECT DICTATION ON COMPUTER DATED 4.2.13 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 5.2.13 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S15.2.13 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 15.2.13 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER