M/s. Rishi Kiran Logistics Pvt. Ltd., GANDHIDHAM V. The Joint Commr. of Income Tax, GANDHIDHAM

ITA 160/RJT/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5460 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 23-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MJ RANPURA
• Keywords: Depreciation; Opportunity of being heard; Earning of tax free income; Period of limitation; Fair market value; Time period of passing order
• Section: 143(3); 14A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH E-COURT AT AH MEDABAD] (BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER & SHRI WASEEM AHMED, ACCOUNTANT MEMBER) ITA. NO: 379/RJT/2016 & C.O. NO. 06/RJT/2018 (ASSESSMENT YEAR: 2011-12) ASSISTANT COMMISSIONER OF INCOME TAX, GANDHIDHAM CIRCLE, GANDHIDHAM- KUTCH M/S.RISHI KIRAN LOGISTICS PVT. LTD. PLOT NO. 8, SECTOR-8, GANDHIDHAM- KUTCH V/S V/S M/S.RISHI KIRAN LOGISTICS PVT. LTD. PLOT NO. 8, SECTOR- 8, GANDHIDHAM-KUTCH ASSISTANT COMMISSIONER OF INCOME TAX, GANDHIDHAM CIRCLE, GANDHIDHAM-KUTCH (APPELLANT) (RESPONDENT) ITA. NO: 349/RJT/2016 & C.O. NO. 07/RJT/2018 (ASSESSMENT YEAR: 2012-13) ASSISTANT COMMISSIONER OF INCOME TAX, GANDHIDHAM CIRCLE, GANDHIDHAM- KUTCH M/S.RISHI KIRAN LOGISTICS PVT. LTD. PLOT NO. 8, SECTOR-8, GANDHIDHAM- KUTCH V/S V/S M/S.RISHI KIRAN LOGISTICS PVT. LTD. PLOT NO. 8, SECTOR- 8, GANDHIDHAM-KUTCH ASSISTANT COMMISSIONER OF INCOME TAX, GANDHIDHAM CIRCLE, GANDHIDHAM-KUTCH (APPELLANT) (RESPONDENT) ITA NOS.160/ RJT/15 & ITA 349 & 3 79/AHD/2016 . A.YS. 2010- 11, 2011-12 & 2012-13 2 ITA. NO: 160/RJT/2015 (ASSESSMENT YEAR: 2010-11) M/S.RISHI KIRAN LOGISTICS PVT. LTD. PLOT NO. 8, SECTOR-8, GANDHIDHAM- KUTCH V/S JOINT COMMISSIONER OF INCOME TAX, GANDHIDHAM RANGE, GANDHIDHAM (APPELLANT) (RESPONDENT) PAN: AADCR 4880P APPELLANT BY : SHRI JITENDRA KUMAR, CIT/ DR RESPONDENT BY : SHRI M.J. RANPURA, A.R. ( )/ ORDER DATE OF HEARING : 17-01-2019 DATE OF PRONOUNCEMENT : 31 -01-2019 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THESE THREE APPEALS OUT OF WHICH IN ITA NO. 160/RJT /2015 HAS BEEN FILED BY THE ASSESSEE AND ITA NOS. 379/RJT/2016 & 349/RJT/20 16 HAVE BEEN FILED BY THE REVENUE AGAINST THE ORDERS OF THE LD. CIT(A) AN D TWO C.OS. HAVE BEEN FILED BY THE ASSESSEE. 2. SINCE ISSUES ARE COMMON IN ALL THE APPEALS BUT APPE AL FILED BY THE ASSESSEE IN ITA NO. 160/RJT/2015 ORDERS WERE BASED BY THE LOWER AUTHORITIES AS EX PARTE BECAUSE OF SOME REASON, ASSESSEE COULD NOT APPEAR B EFORE THE LOWER AUTHORITIES. THEREFORE, IN ORDER TO REACH TO REASONABLE A JUSTIF Y CONCLUSION. WE WOULD LIKE TO DISPOSE OF ALL THREE APPEALS TOGETHER ALONG WITH CROSS OBJECTION FILED BY THE ITA NOS.160/ RJT/15 & ITA 349 & 3 79/AHD/2016 . A.YS. 2010- 11, 2011-12 & 2012-13 3 ASSESSEE. FIRST OF ALL WE WILL TAKE UP THE ITA NO. 349/RJT/2016. THE REVENUE HAS TAKEN FOLLOWING GROUNDS HAVE BEEN TAKEN: 1. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIO N MADE BY THE A.O. ON ACCOUNT OF DISALLOWING OF DEDUCTION U/S.80IA(4)(I) ON STORA GE TANK-MDI OF RS. 1,14,31,020/- AND STORAGE TANK-EDA OF RS.76,04,753/ -. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE U/S.14A OF RS.31,40,255/- THOUGH THE ASSESSEE HAD I NVESTMENT OF RS.4.65 CRORE IN SHARES FOR WHICH NO EXPENSES HAVE BEEN ALLOCATED BY THE ASSESSEE. 3. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIO N OF RS.4,37,18,888/- MADE BY THE A.O. U/S.40A(2)(A) R.W.S.40A(2)(B) IN RESPECT O F TERMINAL HANDLING &. STORAGE CHARGES PAID TO SHREEJI POWER &. INSULATOR PVT. LTD . (SPIPL). 4. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIO N OF RS.2,27,867/- MADE BY THE A.O. ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON LAND PURCHASED, OR LAND RELATED EXPENSES UNDER THE WINDMILL. 5. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIO N OF RS.2,61,000/- MADE BY THE A.O. ON ACCOUNT OF DISALLOWANCE OF SHARE ISSUE EXPE NSES. 6. IT IS THEREFORE PRAYED THAT THE ORDER OF LD.CIT( A) BE SET ASIDE AND THAT OF AO BE RESTORED TO THE ABOVE EXTENT. 3. IN THIS CASE, THE APPELLANT, A PRIVATE LIMITED COMP ANY IS ASSESSED TO TAX BY THE DEPUTY COMMISSIONER OF INCOME-TAX, GANDHIDHAM. IT I S ENGAGED IN THE BUSINESS OF CLEARING, FORWARDING, STORAGE AND WAREH OUSING, CARGO HANDLING THROUGH CRANES AND OTHER EQUIPMENTS, WIND MILL POWE R GENERATION AND MANUFACTURING OF SALT. REGULAR BOOKS OF ACCOUNT ARE BEING MAINTAINED AND ARE DULY AUDITED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 AS ALSO U/S. 44AB OF THE INCOME-TAX ACT. 4. RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONS IDERATION WAS E-FILED ON 30.09.2012 DECLARING THEREIN TOTAL INCOME AT RS. NI L AFTER CLAIMING DEDUCTIONS OF (I) RS. 2,25,43,715/- U/S 80IA(4)(I) OF THE ACT IN RESPECT PROFIT FROM ENTERPRISE CARRYING ON BUSINESS OF DEVELOPING, MAIN TAINING & OPERATING PORT ITA NOS.160/ RJT/15 & ITA 349 & 3 79/AHD/2016 . A.YS. 2010- 11, 2011-12 & 2012-13 4 AND (II) RS. 37,92,260/ BEING PROFIT FROM UNDERTAK ING OF GENERATION AND DISTRIBUTION OF POWER THROUGH WIND MILL U/S. 80IA(4 )(IV) OF THE ACT. 5. DURING ASSESSMENT PROCEEDING U/S. 143(3) OF THE ACT , THE APPELLANT PRODUCED BOOKS OF ACCOUNT, BANKING RECORDS, BILLS, INVOICES ETC AND ALSO SUBMITTED ALL THE RELEVANT DETAILS EXPLANATIONS / CLARIFICATIONS AS D ESIRED BY THE A.O. FROM TIME TO TIME. THE APPELLANT HAS ALSO MOVED AN APPLICATION U /S 144A OF THE ACT BEFORE THE ID. JOINT COMMISSIONER OF INCOME TAX FOR NECESS ARY DIRECTION. 6. THE AO VIDE ORDER U/S. 143(3) OF THE ACT DATED 26.0 3.2015 ASSESSED THE TOTAL INCOME OF THE APPELLANT AT RS. 10,52,75,630/- WHERE IN HE MADE FOLLOWING VARIATIONS TO THE RETURNED INCOME: (I) DISALLOWED THE CLAIM OF DEDUCTION OF RS. 2, 25,43,715/- (RS.1,34,66,469/- FROM MDI STORAGE TANK PLUS RS. 90,77,2467- FROM EDI STORAGE TANK) MADE U/S 80IA(4) OF THE ACT FROM PROFIT OF DEVELOPING/OPERAT ING/MAINTAINING MDI AND EDI STORAGE TANKS AT PORT BY ALLEGING THAT THE APPE LLANT FAILED TO FULFILL NECESSARY CONDITIONS FOR CLAIMING SUCH DEDUCTIONS U /S 80IA(4) OF THE ACT. (II) THE AO ALSO ALLEGED THAT THE INTERPRETAT ION OF INITIAL YEAR HAS TAKEN BY THE ASSESSEE FROM THE START OF YEAR IN WHICH APPELL ANT STARTS EXERCISING ITS OPTION IS WRONG AND INITIAL ASSESSMENT YEAR HAS TO BE UNDE RSTOOD AS THE YEAR IN WHICH UNDERTAKING STARTS FUNCTIONING. HE ALLEGED THAT ELI GIBLE PROFIT FOR MDI AND EDI STORAGE TANK, AFTER CONSIDERING EARLIER YEAR'S LOSS ES AND DEPRECIATION WOULD BE NIL AND DISALLOWED THE CLAIM OF DEDUCTION U/S 80IA OF THE ACT. (III) DISALLOWED THE CLAIM OF DEDUCTION U/S 8 0IA OF RS. 37,92,256/- BY ALLEGING THAT PROFIT OF WIND MILL, ELIGIBLE FOR DED UCTION U/S 80IA(4) OF THE ACT BECOMES NIL AFTER ABSORPTION OF EARLIER YEARS' LOSS ES/DEPRECIATION. ITA NOS.160/ RJT/15 & ITA 349 & 3 79/AHD/2016 . A.YS. 2010- 11, 2011-12 & 2012-13 5 (IV) ALLEGED THAT THE ASSESSEE HAD INCURRED SH ARE ISSUE EXPENSES OF RS. 2,61,000/- IN NORMAL COURSE AND THE SAME IS NOT FIT INTO CRITERIA LAID DOWN U/S. 35D OF THE ACT AND ACCORDINGLY DISALLOWED THE SAME. (V) DISALLOWED RS. 30,94,549/- BY INVOKING PR OVISIONS OF SECTION 14A OF THE ACT ON THE ALLEGED GROUND THAT APPELLANT FAILED TO PROVE ONE-TO-ONE NEXUS FROM BANK ACCOUNT THAT INVESTMENT HAS BEEN DONE ENT IRELY FROM ITS OWN FUNDS. (VI) ALLEGED THAT ASSESSEE (I) PAID EXCESSIVE T ERMINAL HANDLING CHARGES TO SHREEJI POWER AND INSULATORS PVT. LTD. [SPIPL] AND (II) PAID FOR THE QUANTITIES WHICH HAVE NOT BEEN USED BY THE APPELLANT. HE ALSO ALLEGED THAT THE APPELLANT SHIFTED PROFIT FROM MARKETING & OTHER ACTIVITIES TO SPIPL FOR WHICH NO SERVICE HAS BEEN PROVIDED BY THE SPIPL. THUS, THE AO ALLEGE D THAT APPELLANT ROUTED THE TRANSACTIONS FROM SPIPL AT ARBITRARY & HYPOTHET ICAL RATES AND SAVED ITS TAX ON RS.6,22,78,406/- AND SAVED DIVIDEND DISTRIBUTION TAX. IN TOTAL DISREGARDS TO THE SUBMISSIONS OF THE APPELLANT, THE AO ALLEGED TH AT THE PAYMENT MADE BY APPELLANT TO SPIPL IN EXCESS OF WHAT SPIPL HAS PAID TO OWNERS AND WAREHOUSE IS UNREASONABLE AND DISALLOWED THE SAME. (VII) ALLEGED THAT EXPENSES FOR PROVIDING FREE ACCESS TO LAND AND KEEPING AREA VACANT SURROUNDING TO THE LAND ON WHICH WINDMILL IS ERECTED IS NOT NECESSARY FOR FUNCTION OF WINDMILL AND THEREFORE NOT QUALIFY FOR DEPRECIATION AND THEREBY DISALLOWED DEPRECIATION AT RS. 1,20,81,572/- AND AD DED THE SAME TO THE RETURNED INCOME. (VIII) DISALLOWED RS. 16,29,230/- BEING LEASE R ENT PAID FOR THE LAND WHERE WIND MILLS HAVE BEEN INSTALLED BY TREATING THE SAME IN CAPITAL NATURE. 7. AGAINST THE ORDER OF THE LD.A.O, ASSESSEE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LD. CIT(A) AND LD. CIT(A) MADE DETAILED ENQUIRY AND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. ITA NOS.160/ RJT/15 & ITA 349 & 3 79/AHD/2016 . A.YS. 2010- 11, 2011-12 & 2012-13 6 8. BY WAY OF SECOND APPEAL, REVENUE HAS COME BEFORE US . 9. IN THIS CASE, THE APPELLANT, A PRIVATE LIMITED COMP ANY IS ASSESSED TO TAX BY THE DEPUTY COMMISSIONER OF INCOME-TAX, GANDHIDHAM. IT I S ENGAGED IN THE BUSINESS OF CLEARING, FORWARDING, STORAGE AND WAREH OUSING, CARGO HANDLING THROUGH CRANES AND OTHER EQUIPMENTS, WIND MILL POWE R GENERATION AND MANUFACTURING OF SALT. REGULAR BOOKS OF ACCOUNT ARE BEING MAINTAINED AND ARE DULY AUDITED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 AS ALSO U/S. 44AB OF THE INCOME-TAX ACT. 10. NOW WE COME TO GROUND NO. 1 RELATED TO DELETING TH E ADDITION MADE BY THE A.O. ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/S. 8 0IA(4)(I) ON STORAGE TANK- MDI OF RS. 1,34,66,469/- AND STORAGE TANK-EDA OF RS . 90,77,246/-. 11. IN THIS CASE, AOS ALLEGATION IS THAT STORAGE TANK IS DEVOID OF LOADING AND UNLOADING FACILITY AND SAME ARE NOT WITHIN THE PREM ISES OF KANDLA PORT TRUST AND HELD THAT MDI-STORAGE TANK, FOR WHICH ASSESSEE HAS CLAIMED DEDUCTION IS NOT AN ENTERPRISE AS (A) IT IS INCAPABLE OF DOING I NDEPENDENT BUSINESS IN ABSENCE OF LOADING & UNLOADING FACILITY (B) NO SEPARATE ACC OUNTS HAS BEEN MAINTAINED, AS MOST OF EXPENSES ARE ALLOCATED ON PRO-RATE BASIS. 12. IN REPLY BEFORE THE LOWER AUTHORITIES, ASSESSEE STA TED THAT THAT THERE IS DIFFERENCE IN THE NATURE OF BUSINESS IN CASE OF MDI STORAGE TA NK AND OTHER TANKS AT THE TANK FARM. THE FULL NOMENCLATURE OF MDI MEANS 'DIPH ENYLMETHANE DIISOCYANATE CHEMICAL PRODUCT. IT IS TO SUBMIT THAT THE CHEMICAL 'MDI' NEEDS TO BE STORAGE IN A SEPARATE TANKS BUILT AT THE PORT AS PER MOU WITH DOW CHEMICAL INTERNATIONAL PVT. LTD. AND IS FULLY DEDIC ATED TO THAT PARTY ONLY WHICH ITA NOS.160/ RJT/15 & ITA 349 & 3 79/AHD/2016 . A.YS. 2010- 11, 2011-12 & 2012-13 7 IS USED BY THEM FOR STORAGE OF A SPECIFIC CARGO AT A SPECIFIC TEMPERATURE REQUIRED TO BE MAINTAINED FOR THAT PARTICULAR TANK AND THE CARGO OF DOW CHEMICAL INTERNATIONAL PRIVATE LIMITED IS ONLY STOR ED AS PER THE AGREEMENT WITH THE PARTY AND ASSESSEE HAS FILED COPY OF THE AGREEM ENT BEFORE THE LOWER AUTHORITIES. 13. AND ASSESSEE STATED THAT STORAGE FACILITY IS FOR LO ADING AND UNLOADING OF CHEMICAL, A COPY OF STORAGE AND TERMINAL AGREEMENT WITH M/S DOW CHEMICAL INTERNATIONAL PVT. LTD, DATED 22.10.2007 IS ALSO FI LED. AND THE STORAGE TANKS ARE CONNECTED WITH ASSOCIATED PUMPS, PIPELINES, CONNECT ING HOSES, VALVES, METERING AND CONTROL DEVICES AND AUXILIARY EQUIPMENT TO CARR Y OUT THE LOADING AND UNLOADING FUNCTIONS. THUS, THE MDI TANKS ARE SPECIA L TANKS FOR SPECIFIC LIQUID CARGO HENCE HAS SEPARATE DEDICATED PIPELINE AND PUM P FOR THE SAME HAS BEEN INSTALLED. THE TANKER VESSELS CARRYING ON THE SPECI FIC CHEMICALS COME TO KANDLA PORT FOR DISCHARGE OF THE CARGO. THE VESSELS ARE BE RTHED AT OIL CARGO JETTY AND AFTER NECESSARY CUSTOMS FORMALITIES; THE CARGO IS U NLOADED IN THE STORAGE TANK THROUGH PIPELINES AS PER PERMISSION OF KANDLA PORT TRUST. 14. AS WE CAN SEE, THAT CASE OF THE ASSESSEE CASE IS SQ UARELY FALLS UNDER THE CLARIFICATION PROVIDED IN CIRCULAR NO. 10 OF 2005. IT IS FACT THAT STORAGE TANKS ARE AN INTEGRAL PART OF PORT OPERATIONS AND IT CAN'T BE UTILIZED FOR ANY OTHER NON- PORT OPERATIONS, MOREOVER, IN AY 2013-14, THE AO IN HIS ORDER U/S. 143(3) DATED 28.03.2016, AFTER PHYSICAL VERIFICATION OF; T HE STRUCTURE, CATEGORICALLY GIVEN HIS FINDING THAT THE RESPONDENT QUALIFIED THE CON DITION OF NEW INFRASTRUCTURAL FACILITY OF HAVING STRUCTURES AT THE PORT FOR STOR AGE, LOADING AND UNLOADING. 15. SATELLITE IMAGE / MAP ON THE WIKIMAPIA.ORG CLEARLY SHOW THE AREA / BOUNDARIES ITA NOS.160/ RJT/15 & ITA 349 & 3 79/AHD/2016 . A.YS. 2010- 11, 2011-12 & 2012-13 8 OF KANDLA PORT, WITHIN WHICH THE RESPONDENT HAS DE VELOPED THE STRUCTURE, I.E., STORAGE TANKS. THE AO'S OBSERVATION THAT THE STRUCT URE OF RESPONDENT IS NOT PART OF PORT IS INCORRECT AND FOR KANDLA PORT TRUST , COMMISSIONER OF CUSTOM HAS NOTIFIED ASSESSEE AS CUSTODIAN AND THEREFORE TH E SAME IS STIPULATED WITHIN THE CUSTOM BONDED AREA I.E. PORT AND SAME IS PART O F PAPER BOOK AT PAGE 285 TO 287. THEREFORE, IN OUR CONSIDERED OPINION, ASSE SSEE IS ENTITLED FOR DEDUCTION U/S. 80IA(4)(I) OF RS. 2,25,43,715/- BEING THE PROF IT FROM ENTERPRISE CARRYING ON THE BUSINESS OF DEVELOPING/OPERATING/MAINTAINING IN FRASTRUCTURE FACILITIES I.E. PORT AND ALSO ENTITLED FOR DEDUCTION. THUS, THIS GR OUND OF APPEAL IS DISMISSED. 16. NOW WE COME TO GROUND RELATED TO DELETING THE ADDIT ION MADE U/S. 14A OF RS. 28,70,910/- THOUGH THE ASSESSEE HAD INVESTMENT OF R S. 4.65 CRORE IN SHARES FOR WHICH NO EXPENSES HAVE BEEN ALLOCATED BY THE ASSESS EE. 17. AS WE CAN SEE, ASSESSEE HAD MADE INVESTMENT OF RS. 4.65 CRORES IN SHARES. OUT OF TOTAL INVESTMENT IN SHARES / SECURITIES REFLECTE D IN THE BALANCE SHEET OF THE RESPONDENT AT RS. 4,47,27,718/-, INVESTMENT OF RS.4 ,45,75,000/-REPRESENTS STRATEGIC INVESTMENT MADE IN THE SUBSIDIARY COMPANY OF THE RESPONDENT NAMELY MIS. SHREEJI POWER & INSULATORS PRIVATE LIMITED. CO PY OF RELEVANT EXTRACT OF THE INVESTMENT SCHEDULE FROM THE AUDITED FINANCIAL STATEMENT ARE FILED AND SAME ARE AT PAGE 387 OF PAPER BOOK. THIS INVESTMENT IN T HE SUBSIDIARY IS MADE WITH A VIEW TO GAIN MAJORITY CONTROL OVER THE MANAGEMENT A ND BOARD OF THE SUBSIDIARY SO AS TO SAVE THE SUBSIDIARY FROM HOSTILE TAKEOVER. THEREFORE, INVESTMENT WAS NOT MADE WITH A VIEW TO EARN ANY EXEMPT INCOME OR T O EARN DIVIDEND AND HENCE, IN SUCH SCENARIO PROVISION OF SECTION 14A OF THE ACT CANNOT BE INVOKED - HON'BLE HIGH COURT OF DELHI IN THE CASE OF CHEMIN VEST LTD. VS. CIT (2015) 378 ITR 33 HAS HELD IF NO EXEMPT INCOME HAS BEEN EA RNED BY THE ASSESSEE IN ITA NOS.160/ RJT/15 & ITA 349 & 3 79/AHD/2016 . A.YS. 2010- 11, 2011-12 & 2012-13 9 THE RELEVANT ASSESSMENT YEAR THEN NO DISALLOWANCE C AN BE MADE U/S. 14A OF INCOME TAX ACT.. 18. AS WE CAN SEE, ASSESSEE WAS HAVING SUBSTANTIAL INTE REST FREE FUNDS, IT IS FACT THAT AS PER PAPER BOOK INTEREST FREE FUNDS WENT INTO INV ESTMENT, WHICH GENERATED EXEMPT INCOME. THEREFORE, NO DISALLOWANCE CAN BE MA DE U/S. 14A AS NO INTEREST BEARING FUNDS HAS BEEN DEPLOYED TO EARN EX EMPT INCOME. AND LD. A.O. HAD NOT DEMONSTRATED ANY NEXUS BETWEEN THE EARNING OF EXEMPT INCOME FOR SUCH INCOME. THEREFORE, IN OUR CONSIDERED OPINION, LD. CIT(A) HAS RIGHTLY GRANTED RELIEF TO THE ASSESSEE. 19. BUT DISALLOWANCE MADE UNDER RULE 8D(III) OF RS. 2,2 3,639/- ARE CONFIRMED BY LOWER AUTHORITIES BECAUSE ASSESSEE HAS NOT BEEN ABL E TO PROVE ONE TO ONE NEXUS OF INTEREST FREE FUNDS AS WELL AS INVESTMENT IN SEC URITIES BECAUSE SUCH INVESTMENT REQUIRE BANK CHARGES, CLERICAL WORK AND TIME OF DIRECTORS. THEREFORE, WE ARE OF THE OPINION THAT LD. CIT(A) HAS RIGHTLY C ONFIRMED THE ADDITION OF RS. 2,23,639/- 20. NOW WE COME TO GROUND RELATED TO DELETING THE ADDIT ION OF RS. 5,71,01,606/- MADE BY THE A.O. U/S. 40A(2)(A) R.W.S. 40A(2)(B) IN RESPECT OF TERMINAL HANDLING & STORAGE CHARGES PAID TO SHREEJI POWER & INDUSLATOR PVT. LTD. 21. LD. A.OS CONTENTION WAS THAT ASSESSEE HAS ROUTED T HE PAYMENTS TO OWNERS OF TANKS AND WAREHOUSES THROUGH SPIPL, JUST BY ARRANGI NG THE BILLS FROM THEM TO SPIPL AND FROM SPIPL TO HIMSELF, WHEREIN ASSESSEE H AS PAID AT THE RATE EXCESSIVE OF FAIR MARKET VALUE AND EVEN FOR THE QUA NTITIES WHICH HAS NOT BEEN EVER USED BY THE ASSESSEE, IT HAS SHIFTED HIS OWN E ARNED PROFIT OF RS. ITA NOS.160/ RJT/15 & ITA 349 & 3 79/AHD/2016 . A.YS. 2010- 11, 2011-12 & 2012-13 10 6,22,78,406/- FROM MARKETING AND OTHER ALLIED ACTIV ITIES RELATED TO TERMINAL HANDLING & STORAGE AND WARE HOUSES. 22. ON THE OTHER HAND, ASSESSEES CONTENTION IS THAT 'E XCESSIVE' WOULD MEAN SOMETHING MORE THAN WHAT IS BEING CONSIDERED AS NOR MAL HAVING REGARD TO THE GENERAL MARKET POLICY. IN THE GIVEN CASE, THE RESPO NDENT HAS PAID TO THE UNRELATED THIRD PARTIES AT THE SAME RATE AT WHICH I T HAS PAID TO RELATED PARTY I.E. SPIPL. THE RESPONDENT HAS PAID TO SPIPL @ RS. 140/- KL PER MONTH WHICH IS THE SAME RATE AT WHICH THE PAYMENT IS MADE TO THIRD UNRELATED PARTIES, (I) KESAR TERMINALS & INFRASTRUCTURE LIMITED; (II) FRIENDS SA LT WORKS & ALLIED INDUSTRIES AND; (III) CRL TERMINAL PVT. LTD. IN FACT, THE PAYM ENT MADE TO SPIPL IS ON LOWER SIDE WHEN COMPARED TO FRIENDS SALT WORKS & AL LIED INDUSTRIES AS FOLLOWS: SR. NO. NAME & ADDRESS OF THE PARTY BILL NO. BILL DATE RATE PER KL PER MONTH 1 KESAR TERMINAL & INFRASTRUCTURE LTD. DTC/10 - 11/347 17.11.2010 140/ - 2 FRIENDS SALT WORKS & ALLIED INDUSTRIES FSWAI - TP - 384 08.05.201 165/ - 3 CRL TERMINAL P. LTD. 1985 30.10.2010 140/ - 23. IN SUPPORT OF ITS CONTENTION ASSESSEE HAS FILED DET AILED DOCUMENTS BEFORE THE LOWER AUTHORITIES WHEN MATTER WENT BEFORE THE LD. C IT(A), HE HELD THAT ASSESSEE HAS NOT MADE EXCESSIVE PAYMENT TO THE RELATED PARTY . 24. AS WE CAN SEE, THAT PAYMENT MADE TO PERSONS OTHER T HAN PERSONS COVERED U/S. 40A(2)(B) WERE COMPARABLE AND INTERALIA PAYMENT TO THE PERSONS COVERED ITA NOS.160/ RJT/15 & ITA 349 & 3 79/AHD/2016 . A.YS. 2010- 11, 2011-12 & 2012-13 11 U/S.40A(2)(B) WAS NOT EXCESSIVE EITHER IN COMPARISO N TO THE OTHER INDEPENDENT PARTIES AS WELL AS TO THE MARKET RATE WHICH CAN ASS UMED AS TO NEARER TO THE RATES AT WHICH THE SAID THIRD PARTIES ARE BEING PAID. THE REFORE, IN OUR CONSIDERED OPINION, LD. CIT(A) HAS RIGHTLY GRANTED PART RELIEF TO THE ASSESSEE. 25. NOW WE COME TO GROUND RELATED TO DELETING THE ADDIT ION OF RS. 1,20,81,572/- MADE BY THE A.O. ON ACCOUNT OF DISALLOWANCE OF DEPR ECIATION ON WINDMILL. 26. THE ASSESSEE HAS CLAIMED DEPRECIATION OF RS. 1,13,8 5,840/-IN RESPECT OF THE COMMON POWER EVACUATION CHARGES. THE ABOVE CHARGES WERE PAID TO THE SUZLON ENERGY FOR COMMON POWER EVACUATION INFRASTRUCTURE F ACILITY ON SHARING BASIS AND THESE CHARGES WERE NOT REFUNDABLE. IT IS ALSO C LEAR FROM THIS BILL THAT RESPONDENT HAS NOT ACQUIRED ANY ASSET BY PAYING THE SE CHARGES ON WHICH IT CAN CLAIM DEPRECIATION. ASSESSEE HAS CLAIMED DEPRECIATI ON ON WIND MILL INCLUSIVE OF CIVIL & ELECTRIC WORK AS WELL. 27. AND LD. A.O. HELD THAT IN SUCH CIRCUMSTANCES, ASSES SEE CANNOT CLAIM DEPRECIATION @ 80% ON WINDMILL BUT ASSESSEE STATED THAT IN RESPECT OF THE ENTIRE WINDMILL INCLUSIVE OF CIVIL, ELECTRICAL ITEM S BECAUSE A POWERFUL THRUST OF AIR AT ANY POINT OF TIME. SPECIALIZED FOUNDATION AN D SPECIALIZED AREA SPECIFICALLY EAR-MARKED TO FACILITATE A FLOW OF WIND WITHOUT HIN DRANCE, AND SPECIALIZED ELECTRICAL FITTINGS AND HIGH-TENSION LINES ARE ALL BASIC REQUIREMENTS FOR A WIND MILL PLANT. NONE OF THESE REQUIREMENTS INCLUDING TH E PREMISES CAN BE SEEN DETACHED FROM WHAT IS CALLED A 'WIND MILL' SINCE A WIND MILL TO WORK THESE ARE ESSENTIAL. ITA NOS.160/ RJT/15 & ITA 349 & 3 79/AHD/2016 . A.YS. 2010- 11, 2011-12 & 2012-13 12 28. AS WE CAN SEE, THE LD. A.O. HAS UNNECESSARILY ADOPT ED A VERY RESTRICTIVE VIEW WHEREIN HE HAS RESORTED TO DISSECT THE PURCHASE VAL UE OF THE ENTIRE WINDMILL ASSEMBLY IN VARIOUS SUB COMPONENTS I.E. LAND, MACHI NERY, LABOUR CHARGES, RIGHT TO ACCESS, ETC. AND HAS OPINED THAT 80% DEPRECIATIO N WILL BE AVAILABLE ONLY TO THE WINDMILL PROPER MENTIONED IN THE DEPRECIATION S CHEDULE IN THE IT RULES. ERECTING AND OPERATING WINDMILL ASSEMBLY IS NOT LIM ITED TO INSTALLING A WINDMILL TURBINE ONLY. BRINGING WINDMILL IN EXISTENCE AND MA KING IT OPERATIONAL REQUIRES FULFILLMENT OF VARIOUS SUB COMPONENTS LIKE INSTALLI NG AND FABRICATING ACCESSORY MACHINERIES, ELECTRIC FITTING, CIVIL CONSTRUCTIONS, HIRING LABOURS, GETTING PERMISSION, DOCUMENTATIONS, GETTING ACCESS TO THE L AND, GETTING POWER CONNECTING, GETTING POWER OUTPUT CONNECTION, GETTIN G ACCESS TO POOLING STATION. 29. IN SUPPORT OF ITS CONTENTION, ASSESSEE ALSO CITED A JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. PARRY ENGINEERING AND ELECTRONICS PVT. LTD. IN TAX APPEAL NO. 604/2012 WHEREIN IT IS HELD THAT WINDMILL ARE ENTITLED FOR DEPRECIATION AND DECIDED THE MATTER ON FAVOUR OF TH E ASSESSEE AND OPERATIVE PARA OF HONBLE GUJARAT HIGH COURT ORDER IS REPRODU CED: 5. WE ARE OF THE OPINION THAT THE APPROACH OF BOTH THE AUTHORITIES IS PERFECTLY JUSTIFIED. WINDMILL WOULD REQUIRE A SCIEN TIFICALLY DESIGNED MACHINERY IN ORDER TO HARNESS THE WIND ENERGY TO THE MAXIMUM POT ENTIAL. SUCH DEVICE HAS TO BE FITTED AND MOUNTED ON A CIVIL CONSTRUCTION, EQUI PPED WITH ELECTRIC FITTINGS IN ORDER TO TRANSMIT THE ELECTRICITY SO GENERATED. SUC H CIVIL STRUCTURE AND ELECTRIC FITTINGS, THEREFORE, IT CAN BE WELL IMAGINED, WOULD BE HIGHLY SPECIALIZED. THUS, SUCH CIVIL CONSTRUCTION AND ELECTRIC FITTING WOULD HAVE NO USE OTHER THAN FOR THE PURPOSE OF FUNCTIONING OF THE WINDMILL. ON THE OTHE R HAND, IT CAN BE EASILY IMAGINED THAT WINDMILL CANNOT FUNCTION WITHOUT APPR OPRIATE INSTALLATION AND ELECTRIFICATION. IN OTHER WORDS, THE INSTALLATION O F WINDMILL AND THE CIVIL STRUCTURE ITA NOS.160/ RJT/15 & ITA 349 & 3 79/AHD/2016 . A.YS. 2010- 11, 2011-12 & 2012-13 13 AND THE ELECTRIC FITTINGS ARE SO CLOSELY INTERCONNE CTED AND LINKED AS TO FORM THE COMMON PLANT. AS ALREADY NOTED, THE LEGISLATURE HAS PROVIDED FOR HIGHER RATE OF DEPRECIATION OF 80 PER CENT ON RENEWABLE ENERGY DEV ISES INCLUDING WINDMILL AND ANY SPECIALLY DESIGNED DEVISE, WHICH RUNS ON WINDMI LL. THE CIVIL STRUCTURE AND THE ELECTRIC FITTING, EQUIPMENTS ARE PART AND PARCEL OF THE WINDMILL AND CANNOT BE SEPARATED FROM THE SAME. THE ASSESSEE S CLAIM FOR H IGHER DEPRECIATION ON SUCH INVESTMENT WAS, THEREFORE, RIGHTLY ALLOWED . 30. THEREFORE RESPECTFULLY FOLLOWING THE ORDER OF JURIS DICTIONAL HIGH COURT, WE UPHELD THE ORDER OF LD. CIT(A) AND DISMISSED THE GR OUND OF REVENUE. 31. NOW WE COME TO GROUND RELATED TO DELETING THE ADDIT ION OF RS. 12,920/- MADE BY THE A.O. ON ACCOUNT OF DISALLOWANCE OF EXPENDITU RE INCURRED ON CONSIDERATION FOR LEASE LAND. 32. AS WE CAN SEE, ASSESSEE HAS MADE THIS PAYMENT TO KA NDLA PORT TRUST AS WINDMILL LAND CHARGES AND SAME ARE FOR BUSINESS PUR POSE. THEREFORE, SUCH AMOUNT CANNOT BE DISALLOWED AND LD. CIT(A) HAS RIGH TLY ALLOWED THE CLAIM OF THE ASSESSEE. 33. NOW WE COME TO ITA NO. 379/RJT/2016. THE REVENUE HA S TAKEN FOLLOWING GROUNDS OF APPEAL. 1) THE LD. CIT(A) HAS ERRED IN DELETING THE AD DITION MADE BY THE A.O. ON ACCOUNT OF DISALLOWING OF DEDUCTION U/S.80IA(4)(I) ON STORAGE TANK-MDI OF RS.1,14,31,020/- AND STORAGE TANK-EDA OF RS.76,04,7 53/-. 2) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT S IN DELETING THE ADDITION MADE U/S.14A OF RS.31,40,255/- THOUGH THE ASSESSEE HAD I NVESTMENT OF RS.4.65 CRORE, IN SHARES FOR WHICH NO EXPENSES HAVE BEEN ALLOCATED BY THE ASSESSEE. ITA NOS.160/ RJT/15 & ITA 349 & 3 79/AHD/2016 . A.YS. 2010- 11, 2011-12 & 2012-13 14 3) THE LD. CIT(A) HAS ERRED IN DELETING THE AD DITION OF RS.4,37,18,888/- MADE BY THE A.O. U/S.40A(2)(A) R.W.S.40A(2)(B) IN RESPEC T OF TERMINAL HANDLING & STORAGE CHARGES PAID TO SHREEJI POWER & INSULATOR P VT. LTD. (SPIPL). 4) THE LD. CIT(A) HAS ERRED IN DELETING THE AD DITION OF RS.2,27,867/- MADE BY THE A.O. ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON LAND PURCHASED, OR LAND RELATED EXPENSES UNDER THE WINDMILL. 5) THE LD. GIT(A) HAS ERRED IN DELETING THE AD DITION OF RS.2,61,000/- MADE BY THE A.O. ON ACCOUNT OF DISALLOWANCE OF SHARE ISSUE EXPENSES. 6) IT IS THEREFORE PRAYED THAT THE ORDER OF LD .CIT(A) BE SET ASIDE AND THAT OF AO BE RESTORED TO THE ABOVE EXTENT. 34. NOW WE COME TO GROUND NO. 1 RELATED TO DELETING THE ADDITION MADE BY THE A.O. ON ACCOUNT OF DISALLOWING OF DEDUCTION U/S. 80 IA(4)(I) ON STORAGE TANK- MDI OF RS. 1,14,31,020/- AND STORAGE TANK-EDA OF RS . 76,04,753/-. 35. IN CONNECTED ITA NO. 349/RJT/2016, WE HAVE ALREADY GRANTED RELIEF TO THE ASSESSEE AND DISMISSED GROUND OF REVENUE. SO, THIS GROUND OF APPEAL IS DISMISSED. 36. NOW WE COME TO GROUND RELATED TO DELETING THE ADDIT ION MADE U/S.14A OF RS.31,40,255/- THOUGH THE ASSESSEE HAD INVESTMENT O F RS.4.65 CRORE, IN SHARES FOR WHICH NO EXPENSES HAVE BEEN ALLOCATED BY THE AS SESSEE. 37. SINCE, WE HAVE CONFIRMED THE ORDER OF THE LD. CIT(A ) IN CONNECTED APPEAL IN ITA NO. 349/RJT/2016, THEREFORE, WE DISMISS THIS GR OUND OF APPEAL. 38. NOW WE COME TO GROUND RELATED TO DELETING THE ADDI TION OF RS.4,37,18,888/- MADE BY THE A.O. U/S.40A(2)(A) R.W.S.40A(2)(B) IN R ESPECT OF TERMINAL HANDLING & STORAGE CHARGES PAID TO SHREEJI POWER & INSULATOR PVT. LTD. (SPIPL). ITA NOS.160/ RJT/15 & ITA 349 & 3 79/AHD/2016 . A.YS. 2010- 11, 2011-12 & 2012-13 15 39. SINCE ALREADY WE HAVE CONFIRMED THE ORDER OF THE LD . CIT(A) AND DISMISSED THE APPEAL OF REVENUE AND GRANTED PART RELIEF TO THE A SSESSEE. THEREFORE, THIS GROUND OF APPEAL IS DISMISSED. 40. NOW WE COME TO GROUND RELATED TO DELETING THE ADDIT ION OF RS.2,27,867/- MADE BY THE A.O. ON ACCOUNT OF DISALLOWANCE OF DEPRECIAT ION ON LAND PURCHASED, OR LAND RELATED EXPENSES UNDER THE WINDMILL. 41. SINCE THE HONBLE HIGH COURT HAS ALREADY HELD THAT WINDMILL ARE SUBJECT TO DEPRECIATION AND IN CONNECTED APPEAL IN ITA NO. 349 /RJT/2016. WE HAVE DECIDED THE MATTER IN FAVOUR OF ASSESSEE. THEREFORE , THIS GROUND OF APPEAL IS DISMISSED. 42. NOW WE COME TO GROUND RELATED TO DELETING THE ADDIT ION OF RS.2,61,000/- MADE BY THE A.O. ON ACCOUNT OF DISALLOWANCE OF SHARE ISS UE EXPENSES IS CONCERNED AN AMOUNT OF RS. 2,61,000/- ON ACCOUNT OF AMORTIZATION OF SHARE ISSUE EXPENSES U/S.35D WERE DEBITED BY THE ASSESSEE ITS PROFIT AND LOSS ACCOUNT. BUT LD.A.O. DISALLOWED THE SAME ON THE GROUND THAT ASSESSEE COM PANY IS A PRIVATE LIMITED COMPANY AND HAS MADE EXPENSES IN RELATION TO NORMAL ISSUE OF SHARES, NOT FOR PUBLIC ISSUE, AND EXPENSES HAS BEEN DONE AFTER STAR TUP OF BUSINESS AND ARE NOT RELATED TO EXPANSION OF UNDERTAKING OR SETTING UP O F NEW UNIT. 43. IN APPEAL BEFORE THE LD. CIT(A), LD. CIT(A) GRANTED RELIEF TO THE ASSESSEE. 44. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMPUGN ED ORDER. THE ABOVE SAID EXPENSES HAS BEEN INCURRED BEFORE THE COMMENCEMENT OF BUSINESS AND SAME ARE IN THE CAPITAL IN NATURE. IN OUR CONSIDERED OPI NION, ASSESSEE HAS RIGHTLY ITA NOS.160/ RJT/15 & ITA 349 & 3 79/AHD/2016 . A.YS. 2010- 11, 2011-12 & 2012-13 16 CLAIMED ITS AMORTIZATION. THEREFORE, WE DISMISS THI S GROUND OF APPEAL BY HOLDING THAT ABOVE EXPENSES WERE INCURRED FOR BUSIN ESS PURPOSE AND SAME ARE ALLOWABLE. 45. IN THE RESULT, THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. ITA NO. 160/RJT/2015 ASSESSEES APPEAL FOR A.Y. 201 0-11 46. IN SAID APPEAL, ASSESSEE HAS TAKEN FOLLOWING GROUND S OF APPEAL: 1.0 THE GROUNDS OF APPEAL MENTIONED HEREUNDER ARE W ITHOUT PREJUDICE TO ONE ANOTHER. 2.0 THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-S, RAJKOT [HEREINAFTER REFERRED TO AS THE 'CIT(A)'] ERRED ON FACTS AS ALSO IN LAW I N DISMISSING THE APPEAL WITHOUT ALLOWING SUFFICIENT OPPORTUNITIES OF BEING HEARD. T HE APPEAL MAY KINDLY BE RESTORED BEFORE THE ID. CIT(A). 3.0 THE LD. CIT(A) ERRED ON FACTS AS ALSO IN LAW IN NOT ALLOWING CLAIM OF DEDUCTION U/S. 80IA OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT') OF RS. 56,58,655/-. THE REJECTION OF CLAIM IS TOTALLY UNJU STIFIED ON FACTS ALSO IN LAW AND CLAIM OF DEDUCTION U/S. 80IA(4) MAY KINDLY BE DIREC TED TO BE ALLOWED. 4.0 THE LD. CIT(A) ERRED ON FACTS AS ALSO IN LAW IN NOT ALLOWING CLAIM OF DEDUCTION U/S. 80IA OF THE ACT OF RS. 29,33,517/-. THE REJECT ION OF CLAIM OF DEDUCTION U/S. 80IA IS TOTALLY UNJUSTIFIED ON FACTS ALSO IN LAW AN D MAY KINDLY BE DELETED. 5.0 THE LD. CIT(A) ERRED ON FACTS AS ALSO IN LAW IN NOT ALLOWING SHARE EXPENSES OF RS. 2,61,000/- U/S. 35D OF THE ACT. THE DISALLOWANC E MADE MAY KINDLY BE DELETED. 6.0 THE LD. CIT(A) ERRED ON FACTS AS ALSO IN LAW IN CONFIRMING ADDITION OF RS. 10,07,333/-U/S. 41(2) OF THE ACT. THE ADDITION MADE WAS BASED ON CONJECTURES AND SURMISES AND MAY KINDLY BE DELETED. 8.0 THE LD. CIT(A) ERRED ON FACTS AS ALSO IN L AW IN RETAINING DISALLOWANCE OUT OF STAFF WELFARE EXPENSE AT RS. 50,096/- AND TRAVELLIN G EXPENSE OF RS. 20,208/- ON THE ALLEGED GROUND OF PERSONAL ELEMENT. THE DISALLO WANCE MAY KINDLY BE DELETED. 9.0 THE LD. CIT(A) ERRED 6N FACTS AS ALSO IN C ONFIRMING DISALLOWANCE OF INTEREST EXPENSES OF RS. 30,04,841/- U/S. 14A OF THE ACT. TH E DISALLOWANCE MAY KINDLY BE DELETED. ITA NOS.160/ RJT/15 & ITA 349 & 3 79/AHD/2016 . A.YS. 2010- 11, 2011-12 & 2012-13 17 47. FIRST GROUND OF ASSESSEE IS THAT SINCE LD. CIT(A) H AS NOT GIVEN SUFFICIENT OPPORTUNITY OF BEING HEARD, THEREFORE, APPEAL MAY K INDLY BE RESTORED TO LD. CIT(A). SINCE WE HAVE DECIDED THE SIMILAR GROUNDS I N CONNECTED APPEALS WHICH HAVE BEEN TAKEN BY THE ASSESSEE IT ITS APPEAL IN IT A NO. 379/RJT/2016. THEREFORE, WE WOULD ALSO DISPOSE OF THIS APPEAL ON MERIT. THUS, THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 48. NOW WE COME TO GROUND RELATING TO NOT ALLOWING THE CLAIM OF DEDUCTION U/S. 80IA(4) OF THE ACT OF 56,58,655/-. 49. SINCE IN CONNECTED APPEALS, WE HAVE DECIDED AGAINST THE REVENUE AND GRANTED RELIEF TO THE ASSESSEE. THEREFORE, THIS GROUND OF A PPEAL IS ALLOWED. 50. NOW WE COME TO GROUND RELATING TO CLAIM OF DEDUCTIO N U/S. 80IA OF THE ACT OF RS. 29,33,517/-. 51. SAME GROUND HAS BEEN ALLOWED BY US IN CONNECTED APP EAL IN ITA NO. 379/RJT/2016 & ITA 349/RJT/2016 IN FAVOUR OF ASSESS EE AND AGAINST THE REVENUE. THEREFORE IN PARITY WITH THOSE ORDERS, WE ALLOW THIS GROUND OF APPEAL. 52. NOW WE COME TO GROUND RELATING TO SHARES EXPENSES O F RS. 2,61,000/- U/S. 35D. 53. IN ITA NO. 379/RJT/2016, IN THIS CASE, THIS AMOUNT WAS ALLOWED BY THE LD. CIT(A) IN THE ORDER FOR ASSESSMENT YEAR 2011-12. TH EREAFTER APPEAL WAS FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A). NOW WE HAVE ALLOWED THIS GROUND OF APPEAL OF THE ASSESSEE. SINCE ALREADY ORD ER OF THE LD. CIT(A) HAS BEEN CONFIRMED WITH REGARD TO RS. 2,61,000/- U/S. 35D. S INCE THIS GROUND IS ALREADY COVERED BY OUR ORDER AS DISCUSSED ABOVE. HENCE GROU ND OF ASSESSEE IS ALLOWED.. ITA NOS.160/ RJT/15 & ITA 349 & 3 79/AHD/2016 . A.YS. 2010- 11, 2011-12 & 2012-13 18 54. NOW WE COME TO ADDITION OF RS. 10,07,333/- U/S. 41( 2) OF THE ACT IS CONCERNED, ASSESSEE WAS ASKED BY THE LOWER AUTHORIT IES FOR OUTSTANDING OF FOLLOWINGS: SR. NO NAME OF THE ASSESSEE AMOUNT 1 ANITA INTERNATIONAL 37047 2 DEVA M DAFDA 70181 3 DUPOLY MARKETING PVT LTD 97365 4 EMERSON PROCESS MANGMENT PVT LTD 1522 5 FRIENDS AND CHEMICAL TERMINLS 16369 6 HEAT MAX ENGINEERING 120781 7 INOX INDIA LIMITED 9619 8 JINDAL INTERNATIONAL 43110 9 K. R SHIPPING AGENCIES 18831 10 KARYA SIDDHI BLOWER SYSTEM PVT LTD 10417 11 K HODIYAR FABRICATORS 109976 12 KSA SALE CONSIDERATION 114589 13 MODERN INSPECTION SERVICES 4906 14 ORIENTAL TRADELINK 37703 15 PERTOLEUM OILS & CHEMICALS 114522 16 R. PFOAM 3894 17 RADIENT TRADING 12480 18 SANDHYA CONSTRUCTION 4750 19 SARJAN REALITIES 11000 ITA NOS.160/ RJT/15 & ITA 349 & 3 79/AHD/2016 . A.YS. 2010- 11, 2011-12 & 2012-13 19 20 SCIENTECH CONSULTANTS & ENGINEERING 4776 21 SUPREME ELEVTORS (1) PVT. LTD 29953 22 UNITED ENGINEERING WORKS 127293 23 VISHWAS AIRCON 6249 TOTAL 1007333 55. BUT BEFORE LOWER AUTHORITIES AND BEFORE US, ASSESSE E COULD NOT SUBMIT ANY EXPLANATION THAT WHY THESE AMOUNTS HAD BEEN SHOWN O UTSTANDING FOR SUCH A LONG PERIOD AND WHAT STEPS HAVE BEEN TAKEN BY THE A SSESSEE TO RECOVER THESE AMOUNTS AND EVEN BEFORE US ASSESSEE COULD NOT EXPLA IN ABOUT THE LIST IN DETAILS. THEREFORE, WE DISMISS THIS GROUND OF APPEAL BY THE ASSESSEE. 56. NOW WE COME TOS DEPRECIATION AMOUNT WAS OF RS. 11,3 9,336/- IS CONCERNED, SAME WAS CLAIMED APART FROM WIND MILL AS FOLLOWS DATE & NO. OF DESCRIPTION IN FIRST DEPRECIATION INVOICE/DEBIT NOTE BILL/DEBIT NOTE TIME CLAIMED IN ISSUED BY PUT TO YEAR UNDER USE CO NSIDERATION DESCRIPTION IN LEDGER AMOUNT CONSIDERATION FOR 870770 2ND 3344 LAND DEBIT NOTE RAISED BY SUBHAM REALTIES, PROVIDING FREE & EASY ACCESS AND KEEPING ARE VACANT. HALF OF 2006 PROCESSING FEE DATE D 17.02.2006 BEING THE AMOUNT OF 1000000 2ND 19200 LAND ADMINISTRATION HALF OF ITA NOS.160/ RJT/15 & ITA 349 & 3 79/AHD/2016 . A.YS. 2010- 11, 2011-12 & 2012-13 20 57. SINCE THIS AMOUNT HAS BEEN SPENT FOR THE INSTALLATI ON OF WIND MILL AND WITHOUT ABOVE EXPENSES WIND MILL COULD NOT BE INSTALLED AND IN CONNECTED ITA NO. 379/RJT/2016. WE HAVE ALLOWED CLAIM OF THE ASSESSEE AND DISMISSED THE GROUND OF THE REVENUE. THEREFORE, IN OUR CONSIDERED OPINIO N, THIS DEPRECIATION IS ALLOWABLE. THEREFORE, WE ALLOW RS. 11,39,336/- AS D EPRECIATION. 58. NOW WE COME TO DISALLOWANCE OUT OF STAFF WELFARE EX PENSES AT RS. 50,096/- AND TRAVELLING EXPENSE OF RS. 20,208/- ON THE ALLEG ED GROUND OF PERSONAL ELEMENT. 59. SINCE ASSESSEE HAS NOT SUBMITTED ANY DETAILS WITH L OWER AUTHORITIES AND EVEN BEFORE US, ASSESSEE HAS NOT SUBMITTED ANY PLAUSIBLE EXPLANATION FOR NOT SUBMITTING DETAILS OF EXPENDITURE OF THIS AMOUNT. T HEREFORE, WE DISMISS THIS GROUND OF APPEAL. LAND DEBIT NOTE ISSUED BY & INFRASTRCUTURAL 2007 ADMINSTRATION SUZLON GUJARAT WIND CHARGES SINFRASTRUCURE PARK - LTD DA TED CHARGES 17.03.2007 CONSIDERATION FOR 23,26,650 2ND 1116792 PROVIDING FREE & EASY PART OF DEBIT NOTE RAISED BY ACCESS AND KEEPING 2009 SUBHAM REALTIES, ARE VACANT. TO EASY & FREE DATED 09.01.2009 ACESS D.N.3435,3426/09 TOTAL DEPRECIATION CLAIMED ON THESE GROUND IN YEAR UNDER CONSIDERING 1139336 ITA NOS.160/ RJT/15 & ITA 349 & 3 79/AHD/2016 . A.YS. 2010- 11, 2011-12 & 2012-13 21 60. NOW WE COME TO DISALLOWANCE OF INTEREST EXPENSES OF RS. 30,04,841/- U/S. 14A. 61. SINCE IN CONNECTED APPEALS IN ITA NO. 379/RJT/2016, SINCE ALREADY WE HAVE GIVEN RELIEF TO THE ASSESSEE AND DISMISS THE GROUND OF THE REVENUE FOR ADDITION MADE U/S. 14A OF RS. 3140255/- 62. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PART LY ALLOWED. C.O. NO. 06 & 07/RJT/2018 FOR A.YS. 2011-12 & 2011 -13 63. ASSESSEE HAS FILED THESE CROSS OBJECTIONS BEYOND TH E LIMITATION PERIOD AND THERE IS A DELAY OF 494 DAYS BUT ASSESSEE HAS NOT GIVEN A NY COGENT REASON AND PLAUSIBLE EXPLANATION FOR FILING OF DELAYED CROSS O BJECTION IN SUPPORT OF ITS CONTENTION. THEREFORE, WE ARE NOT INCLINED TO ENTER TAIN CROSS OBJECTIONS FILED BY THE ASSESSEE. THUS, BOTH THE COS ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 31 - 01- 2019 SD/- SD/- (WASEEM AHMED) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 31/01/2019 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD