DCIT, Circle-12(1), Kolkata, Kolkata V. M/s Hindusthan Gum & Chemicals Ltd., Kolkata

ITA 1601/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1523 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 09-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Depreciation; Additional depreciation; Question of law; Benefit of exemption
• Section: 143(3); 80HHC; 14A; 80IB; 10B; 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [BEFORE HONBLE SHRI M.BALAGANESH, AM & SHRI S.S. VISWANETHRA RAVI, JM] I.T.A NO. 1410/KOL/20 16 ASSESSMENT YEAR : 2010-1 1 HINDUSTAN GUM & CHEMICALS LTD. -VS- DCIT, CIRCLE-12(1), KOLKATA [PAN: AAACH 7214 E] (APPELLANT) (RESP ONDENT) I.T.A NO. 1601 /KOL/2016 ASSESSMENT YEAR : 2010-1 1 DCIT, CIRCLE-12(1), KOLKATA -VS- HINDUSTAN GUM & CHEMICALS LTD. [PAN: AAACH 7214 E] (APPELLANT) (RESPON DENT) FOR THE APPELLANT : SHRI J.P. KHAITAN, SR. ADVOCATE SHRI VINOD SHARMA, CA FOR THE RESPONDENT : SHRI SALLONG YADEN, ADDL . CIT DATE OF HEARING : 06.02.2018 DATE OF PRONOUNCEMENT : 14.02.2018 ORDER PER M.BALAGANESH, AM 1. THESE CROSS APPEALS BY THE ASSESSEE AS WELL AS REVENUE ARISE OUT OF THE COMMON ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APP EALS)-4, KOLKATA [IN SHORT THE LD CIT(A)] IN APPEAL NO.189/CIT(A)-4/CIR-12/KOL/14-15 DATED 23.05.2016 AGAINST THE ORDER PASSED BY THE DCIT, CIRCLE-12, KOLKATA [ IN S HORT THE LD AO] UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE A CT) DATED 11.03.2014 FOR THE ASSESSMENT YEARS 2010-11. 2 ITA NOS.1410&1601/KOL/2016 HINDUSTAN GUM & CHEMICALS LTD. A.YR. 2010-11 2 2. DISALLOWANCE U/S 14A READ WITH RULE 8D OF THE RULES : GROUND NO.1 OF ASSESSMENT YEAR 2010-11 GROUND NO. 3 OF ASSESSMENT YEAR 2010-11 THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESSEE ENGAGED IN THE BUSINESS OF MANUFACTURING/TRADING GUAR GUM ETC. AND WIND POWER GENERATION. THE ASSESSEE IS HAVING 100% EXPORT ORIENTED UNIT AT VIRAMGRAM. THE ASSESSEE RECEIVED DIVIDEND INCOME OF RS. 76,14,772/- AND CLAIMED THE SAME AS E XEMPT IN THE RETURN OF INCOME. THE LD. AO SOUGHT TO INVOKE THE PROVISION O F 14A READ WITH RULE 8D OF THE RULES AND SHOW CAUSED THE ASSESSEE IN THIS REGA RD. IN RESPONSE TO THIS, THE ASSESSEE REPLIED VIDE LETTER DATED 28.02.2014 AS UN DER: IT IS ENGAGED IN THE BUSINESS OF MANUFACTURE AND S ALE OF GUAR GUM, POWDER GUM, GUAR (SPLIT ETC. ALL EXPENSES INCURRED WERE IN RELA TION TO ITS BUSINESS ONLY. THE SHARES ON WHICH DIVIDEND WAS RECEIVED WERE PURCHASED OUT O F ITS OWN FUND AND NO FUNDS WERE BORROWED ON INTEREST. FURTHER, IT WAS ALSO SUBMITTE D THAT THE DIVIDEND IN RESPECT OF UNITS OF MUTUAL FUNDS IN MOST OF THE CASES HAS BEEN REINVESTED IN THE RESPECTIVE SCHEMES WITHOUT BEING ACTUALLY RECEIVED BY THE ASSESSEE. TH E DIVIDEND WARRANTS RECEIVED FROM COMPANIES/ MUTUAL FUNDS ARE REQUIRED TO BE DEPOSITE D IN THE ASSESSEE'S BANK ACCOUNT FOR WHICH PRACTICALLY NO EXPENDITURE WAS INCURRED. YOUR KIND ATTENTION IS ALSO DRAW TO COLUMN 17(C) OF OUR TAX AUDIT REPORT DATED 08.09.20 10, WHEREIN THE AUDITOR HAS QUALIFIED THE FOLLOWING: . 'WE HAVE EXAMINED THE RECORDS/DETAILS WITH A VIEW T O ASCERTAIN WHETHER THERE EXIST ANY ITEM OF DIRECT EXPENDITURE WHICH IS INADM ISSIBLE U/S. 14A OF THE IT ACT, 1961. FOR THIS PURPOSE WE HAVE FORMED SUBSTANTIAL C HECKS. SUCH SUBSTANTIAL CHECKS DID NOT REVEAL ANY SPECIFIC EXPENDITURE WHIC H IS INADMISSIBLE U/S. 14A. AS INFORMED TO US THE COMPANY HAS GIVEN STANDING IN STRUCTIONS TO BNP PARIBAS BANK TO INVEST THE SURPLUS FUND IN DEBT SCHEMES OF MUTUAL FUND AND THERE IS NO DAY TO DAY INVOLVEMENT OF THE COMPANY IN MANAGING T HE FUND. FURTHER THE COMPANY HAS NOT PAID ANY FEE/CHARGES TO BNP PARIBAS . FURTHER EXPENDITURE INCURRED BY 100% EOU UNIT, HAS BEEN DEDUCTED FOR CO MPUTING EXEMPTED INCOME U/S. 10B, HENCE NOT GIVEN HERE.' FURTHER, IT WOULD BE SEEN FROM SCHEDULE 5 TO THE AS SESSEE'S ACCOUNTS (INTERNAL PAGE 17 OF THE ACCOUNTS) THAT NO FRESH INVESTMENT WAS MADE IN ANY SHARES DURING THE RELEVANT PREVIOUS YEAR. THE AGGREGATE AMOUNT WHICH STOOD INV ESTED IN SHARES WAS RS.43,80,732/- BOTH AS ON MARCH 31, 2009 AND AS ON MARCH 31, 2010. EVEN AS ON MARCH 31, 2004 TO MARCH 31, 2008, THE AGGREGATE AMO UNT WHICH STOOD INVESTED IN 3 ITA NOS.1410&1601/KOL/2016 HINDUSTAN GUM & CHEMICALS LTD. A.YR. 2010-11 3 SHARES WAS RS.43,80, 732/-. THEREFORE, IT IS EVIDEN T THAT THE SHARES WERE ACQUIRED BY THE ASSESSEE A LONG TIME AGO OUT OF ITS OWN FUNDS W ITHOUT RESORTING TO ANY BORROWINGS. THE CURRENT INVESTMENT AS ON MARCH 31, 2009 WAS RS. 705.16 LACS INVESTED IN UNITS OF DEBT SCHEMES OF MUTUAL FUNDS. DURING THE PREVIOUS Y EAR ENDED MARCH 31, 2010, THE ASSESSEE SOLD THE UNITS OF DEBT SCHEMES OF MUTUAL F UNDS HELD BY IT AS ON 31.03.2009. BESIDES, DURING THE YEAR UNDER REFERENCE, THE COMPA NY PURCHASED AND SOLD UNITS OF DEBT SCHEMES OF VARIOUS MUTUAL FUND. IN RESPECT OF SUCH DEBT SCHEMES OF MUTUAL FUNDS, ONLY THE DIVIDEND WAS EXEMPT BECAUSE OF PAYM ENT OF DIVIDEND DISTRIBUTION TAX BY THE MUTUAL FUNDS BUT IN ANY CASE, TAX WAS PAYABL E ON THE GAIN, IF ANY, MADE UPON DISPOSAL/REDEMPTION OF THE UNITS. AS CONFIRMED BY T HE TAX AUDITOR ALSO, INVESTMENTS IN UNITS OF MUTUAL FUNDS WERE ENTRUSTED BY THE ASSESSE E TO BNP PARIBAS BANK WHICH DID NOT CHARGE ANY FEE FOR SUCH WEALTH MANAGEMENT SERVI CE. THE DIVIDEND OF RS. 76,14,772/- RECEIVED BY THE ASS ESSEE DURING THE RELEVANT PREVIOUS YEAR COMPRISED OF RS. 18,90,100/- IN RESPECT OF ITS SHAREHOLDING IN BIRLA CORPORATION LIMITED, RS. 100/- IN RESPECT OF SHARES HELD IN UNI VERSAL CABLES LTD. AND THE REMAINING AMOUNT OF RS. 57,24,672/- WAS IN RESPECT OF UNITS O F DEBT SCHEMES OF MUTUAL FUNDS AND THEREFORE THE ONLY ACTIVITY OF THE COMPANY WAS TO DEPOSIT 3 DIVIDEND WARRANTS IN ITS BANK ACCOUNT DURING THE ENTIRE YEAR. ON BASIS OF ABOVE SUBMISSION YOU WILL FIND THAT ALM OST THE ENTIRE EXPENSES INCURRED BY THE ASSESSEE ARE IN CONNECTION WITH ITS BUSINESS OF MANUFACTURING AND TRADING IN GUAR GUM PRODUCTS. ONLY THE SURPLUS BUSINESS FUNDS OF TH E ASSESSEE ARE INVESTED IN SAFE AND LIQUID INVESTMENTS. BNP PARIBAS LOOKS AFTER THE INV ESTMENTS AND PROVIDES THE WEALTH MANAGEMENT SERVICE WITHOUT ANY CHARGE WHATSOEVER. T HE ASSESSEE'S SHARE INVESTMENTS ARE NON-MOVING. ACCORDINGLY IT IS SUBMITTED THAT TH E COMPANY DID NOT INCUR ANY EXPENDITURE TO EARN DIVIDEND INCOME. THE LD. AO DID NOT ACCEPT THE EXPLANATIONS GIVEN B Y THE ASSESSEE AND RESORTED TO MAKE DISALLOWANCE UNDER SECOND AND THIRD LIMB OF RU LE 8D(2) AND WORKED OUT THE DISALLOWANCE FIGURE OF RS. 4,41,712/-. THE LD. CIT(A) APPRECIATI NG THE STRONG EVIDENCES OF THE ASSESSEE HELD THAT IT HAD SUFFICIE NT OWN FUNDS TO MAKE INVESTMENTS IN SHARES AND DEBT FUNDS OF MUTUAL FUNDS AND DELETED T HE DISALLOWANCE MADE UNDER SECOND LIMB OF RULE 8D(2). HOWEVER, HE UPHELD THE DISALLOW ANCE MADE UNDER THIRD LIMB OF RULE 8D(2) OF THE RULES. AGGRIEVED BOTH THE ASSESSE E AS WELL AS REVENUE ARE IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS: I.T.A. NO. 1410/KOL/2016 ASSESSMENT YEAR 2010-11 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS) ERRED IN NOT HOLDING THAT NO EXPENSES HAVE BEEN INC URRED TO EARN DIVIDEND 4 ITA NOS.1410&1601/KOL/2016 HINDUSTAN GUM & CHEMICALS LTD. A.YR. 2010-11 4 INCOME RATHER ERRED IN CONFIRMING THE DISALLOWANCE MADE U/S 14A READ WITH RULE 8D(2)(III). I.T.A. NO. 1601/KOL/2016 ASSESSMENT YEAR 2010-11 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE MADE BY THE AO AS PER THE PROVISIO NS OF RULE 8D(II) OF IT RULES DESPITE NOT HAVING ANY CORROBORATING DOCUMENT TO WARRANT SUCH DELETION. 2.1. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND T HAT THE ASSESSEE HAD DERIVED DIVIDEND INCOME IN THE FOLLOWING MANNER: BIRLA CORPORATION LTD. SHARES RS. 18,90,100/- MUTUAL DEBT SCHEMES RS. 57,24,672/- TOTAL RS. 76,14,772/- THE ASSESSEE HAD SOLD THE ENTIRE MUTUAL FUNDS DEBT SCHEMES AMOUNTING TO RS. 705.16 LACS. DURING THE YEAR UNDER APPEAL. THE ASSESSEE HA D SUFFICIENT OWN FUNDS WHICH IS QUITE EVIDENT FROM THE PERUSAL OF THE BALANCE SHEET AND A CCORDINGLY IT COULD BE SAFELY CONCLUDED THAT ALL THE INVESTMENTS WERE MADE ONLY O UT OF OWN FUNDS OF THE ASSESSEE BY PLACING RELIANCE ON THE FOLLOWING DECISIONS OF VARI OUS HIGH COURTS: I) HONBLE BOMBAY HIGH COURT IN THE CASE OF RELIANCE P OWER UTILITIES AND POWER LTD. REPORTED IN 313 ITR 340 (BOM); II) HDFC BANK REPORTED IN 366 ITR 505 (BOM); WE FIND THAT OWN FUNDS AVAILABLE IN THE FORM OF CAP ITAL AND RESERVES AND SURPLUS WERE RS. 15769.49 LACS AND WHEREAS THE INVESTMENTS IN MU TUAL FUNDS WERE ONLY RS. 43.81 LACS AS ON 31.03.2010. THE NET PROFIT EARNED DURING THE YEAR AND AVAILABLE FOR APPROPRIATION WAS RS. 1736.90 LACS. THESE FACTS CLEARLY PROVE TH AT THE INVESTMENTS WERE MADE ONLY OUT OF OWN FUNDS. ACCORDINGLY, WE HOLD THAT THE LD. CIT(A) RIGHTLY DELETED THE DISALLOWANCE MADE UNDER SECOND LIMB OF RULE 8D(2) O F THE RULES. WITH REGARD TO THE DISALLOWANCE MADE UNDER THIRD LIMB OF RULE 8D(2), WE HOLD THAT ONLY DIVIDEND BEARING INVESTMENTS IN SHARES AND MUTUAL FUND DEBT SCHEMES SHOULD BE CONSIDERED BY THE LD. AO 5 ITA NOS.1410&1601/KOL/2016 HINDUSTAN GUM & CHEMICALS LTD. A.YR. 2010-11 5 FOR WORKING OUT THE DISALLOWANCE AT 0.5% OF AVERAGE VALUE OF INVESTMENT. THIS FINDING IS IN CONSONANCE WITH THE DECISION RENDERED BY THIS TR IBUNAL IN REI AGRO LTD. REPORTED IN 144 ITD 141. ACCORDINGLY, GROUND NO.1 RAISED BY THE ASSESSEE IS PARTLY ALLOWED AND GROUND NO. 4 RAISED BY THE REVENUE IS DISMISSED. 3. DISALLOWANCE OF PROVISION FOR LEAVE ENCASHMENT OF R S. 47,75,059/- GROUND NO. 2 OF ASSESSEE APPEAL THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESSEE MADE A PROVISION FOR LEAVE ENCASHMENT AMOUNTING TO RS. 47,75,059/- IN ITS BOOK AND CLAIME D THE SAME AS DEDUCTION IN THE RETURN OF INCOME. THE LD. AO APPLIED THE PROVISION OF SECTION 43B(F) OF THE ACT AND DISALLOWED THE SAME. THIS ACTION OF THE LD. AO WAS UPHELD BY THE LD. CIT(A). AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUND: I.T.A. NO. 1410/KOL/2016- ASSESSMENT YEAR 2010-11 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(APPEALS) ERRED IN NOT HOLDING THAT PROVISION FOR LEAVE ENCAS HMENT FOR RS. 47,75,059/- IS NEITHER STATUTORY LIABILITY NOR CONTINGENT LIABILIT Y AND THEREFORE NOT TO BE CONSIDERED FOR THE PURPOSE OF COMPUTING DISALLOWANC E U/S 43B(F) OF THE I.T. ACT, 1961. 3.1. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND T HAT THOUGH THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF EXIDE INDUSTRIES LTD VS U NION OF INDIA REPORTED IN 292 ITR 470 (CAL) HAD STRUCK DOWN THE PROVISIONS OF SECTION 43B(F) OF THE ACT AS UNCONSTITUTIONAL. THE REVENUE HAD CARRIED THE MATTE R FURTHER TO THE HONBLE SUPREME COURT WHICH INITIALLY IN SPECIAL LEAVE TO APPEAL (C IVIL) CC 12060 / 2008 DATED 8.9.2008 HAD HELD AS UNDER:- THE PETITION WAS CALLED ON FOR HEARING TODAY. UPON HEARING COUNSEL THE COURT MADE THE FOLLOWING O RDER. ISSUE NOTICE. IN THE MEANTIME, THERE SHALL BE STAY OF THE IMPUGNE D JUDGEMENT, UNTIL FURTHER ORDERS. 6 ITA NOS.1410&1601/KOL/2016 HINDUSTAN GUM & CHEMICALS LTD. A.YR. 2010-11 6 LATER THE HONBLE SUPREME COURT IN SPECIAL LEAVE TO APPEAL (CIVIL) NO(S). CC 22889 / 2008 DATED 8.5.2009 HAD HELD AS UNDER:- THE PETITION WAS CALLED ON FOR HEARING TODAY. UPON HEARING COUNSEL THE COURT MADE THE FOLLOWING O RDER DELAY CONDONED. LEAVE GRANTED. PENDING HEARING AND FINAL DISPOSAL OF THE CIVIL APP EAL, DEPARTMENT IS RESTRAINED FROM RECOVERING PENALTY AND INTEREST WHICH HAS ACCRUED T ILL DATE. IT IS MADE CLEAR THAT AS FAR AS THE OUTSTANDING INTEREST DEMAND AS OF DATE IS CO NCERNED, IT WOULD BE OPEN TO THE DEPARTMENT TO RECOVER THAT AMOUNT IN CASE CIVIL APP EAL OF THE DEPARTMENT IS ALLOWED. WE FURTHER MAKE IT CLEAR THAT THE ASSESSEE WOULD, D URING THE PENDENCY OF THIS CIVIL APPEAL , PAY TAX AS IF SECTION 43B(F) IS ON THE STA TUTE BOOK BUT AT THE SAME TIME IT WOULD BE ENTITLED TO MAKE A CLAIM IN ITS RETURNS. HENCE FROM THE AFORESAID SUPREME COURT JUDGEMENT, I T COULD BE INFERRED THAT THE HONBLE SUPREME COURT HAD NOT STAYED THE JUDGEMENT OF THE HONBLE CALCUTTA HIGH COURT DURING LEAVE PROCEEDINGS. BUT THE HONBLE SU PREME COURT HAD ONLY PASSED AN INTERIM ORDER ON THE IMPUGNED ISSUE. HENCE WE DEEM IT FIT AND APPROPRIATE , IN THE INTEREST OF JUSTICE AND FAIR PLAY, TO REMAND THIS I SSUE TO THE FILE OF THE LD AO TO PASS ORDERS BASED ON THE OUTCOME OF THE MAIN APPEAL ON M ERITS BY THE HONBLE SUPREME COURT AS STATED SUPRA. ACCORDINGLY, THE GROUND NO. 2 OF ASSESSEE APPEAL FOR ASST YEAR 2010-11 IS ALLOWED FOR STATISTICAL PURPOSES. 4. ADDITION TOWARDS PROVISION FOR MARK TO MARKET LOSS RS. 2,12,48,372/- GROUND NO. 3 OF ASSESSEE APPEAL THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESSEE CLAIMED THAT THE PROVISION FOR MARK TO MARKET LOSS PERTAINING TO ASSESSMENT YEAR 2009-10 W AS MADE WHICH WAS DISALLOWED BY THE LD. AO IN ASSESSMENT YEAR 2009-10. THE ASSESSEE WROTE BACK THE SAID PROVISION FOR MARK TO MARKET LOSS IN THE SUM OF RS. 2,12,48,372/- IN ITS BOOKS OF ACCOUNTS DURING THE YEAR UNDER APPEAL. SINCE, THIS SUM WAS ALREADY DISA LLOWED BY THE LD. AO IN ASSESSMENT 7 ITA NOS.1410&1601/KOL/2016 HINDUSTAN GUM & CHEMICALS LTD. A.YR. 2010-11 7 YEAR 2009-10, THE ASSESSEE CLAIMED DEDUCTION TOWARD S THE SAME IN THE RETURN OF INCOME FILED FOR ASSESSMENT YEAR 2010-11 IN ORDER TO AVOID DOUBLE TAXATION. THIS WAS NOT GRANTED BY THE LD. AO. 4.1. THE LD. CIT(A) DISMISSED THE PLEA OF THE ASSES SEE BY OBSERVING AS UNDER: IN THIS GROUND THE ASSESSEE HAS CLAIMED THAT THE M ARK-TO-MARKET LOSS PERTAINING TO A.Y.2009-10 AND RESERVED IN THE ASSESSEES BOOKS DU RING THE CURRENT YEAR BE ALLOWED TO BE DEDUCTED SINCE IN THE ASSESSMENT ORDER FOR A.Y. 2009-10, THE LOSS WAS DISALLOWED. I HOWEVER FIND THAT MY PREDECESSOR IN HIS APPELLATE O RDER FOR A.Y. 2009-10 ALLOWED THE ASSESSEES CLAIM FOR DEDUCTION OF MTM LOSS AMOUNTIN G TO RS. 2,12,48,372/-. AS SUCH ON REVERSAL OF THE SAID LOSS, NO DEDUCTION IS PERMISSI BLE TO THE APPELLANT IN A.Y. 2010-11. FOR THESE REASONS THEREFORE, GROUND NO. 8 IS DISMIS SED. 4.2. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS: 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED DCIT BE DIRECTED TO EXCLUDE A SUM OF RS. 2,12,48,372/- BEING PROVISI ON FOR MARK TO MARKET LOSS PERTAINING TO ASSESSMENT YEAR 2009-10 REVERSED DURI NG THE YEAR IN CASE THE DEPTS APPEAL ON THE ISSUE IS ALLOWED IN THEIR FAVO UR AND DEDUCTION FOR PROVISION MADE IS WITHDRAWN. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THA T THE LD. CIT(A) HAD DENIED RELIEF TO THE ASSESSEE ON THE GROUND THAT THE SAID PROVISI ON HAS ALREADY BEEN MADE AS DEDUCTION IN ASSESSMENT YEAR 2009-10 IN HIS PREDECESSOR. IN T HESE CIRCUMSTANCES, IF FURTHER DEDUCTION IS GRANTED FOR THE VERY SAME PROVISION IN ASSESSMENT YEAR 2010-11 TO THE ASSESSEE THEN IT WOULD AMOUNT TO DOUBLE DEDUCTION B EING GIVEN TO THE ASSESSEE. THIS HAS BEEN RIGHTLY OBSERVED BY THE LD. CIT(A). WE ALSO FI ND THAT AGAINST THE RELIEF GRANTED TO THE ASSESSEE ON THE SAID PROVISION IN ASSESSMENT YE AR 2009-10, THE REVENUE HAD PREFERRED AN APPEAL BEFORE THIS TRIBUNAL WHICH WAS DISPOSED OFF IN I.T.A. NO. 1798 & 2161/KOL/ 2014 DATED 25.10.2017 WHEREIN IT HAS HELD AS UNDER: 8 ITA NOS.1410&1601/KOL/2016 HINDUSTAN GUM & CHEMICALS LTD. A.YR. 2010-11 8 9 ITA NOS.1410&1601/KOL/2016 HINDUSTAN GUM & CHEMICALS LTD. A.YR. 2010-11 9 17. THE LD. CIT(A) HAS APPLIED THIS DECISION OF THE TRIBUNAL IN THE ASSESSEES OWN CASE AND GRANTED RELIEF. WE FIND NO INFIRMITY IN THE SAME AN D DISMISS THIS GROUND OF THE REVENUE. ACCORDINGLY, WE FIND THAT THE ASSESSEE WOULD BE GIV EN DOUBLE DEDUCTION IF RELIEF IS GRANTED IN ASSESSMENT YEAR 2010-11 FOR THE VERY SAM E PROVISION OF RS. 2,12,48,372/-, HENCE, WE HOLD THAT THE LD. CIT(A) HAD RIGHTLY DISM ISSED THE PLEA OF THE ASSESSEE. ACCORDINGLY, GROUND NO.3 RAISED BY THE ASSESSEE IS DISMISSED. 6. DISALLOWANCE OF OTHER INCOME WHILE COMPUTING THE DE DUCTION U/S 10B OF THE ACT. GROUND NOS. 1 AND 2 OF REVENUE APPEAL THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESSEE IS HAVING A 100% EOU AT VIRAMGRAM. THE ASSESSEE COMPANY CLAIMED DEDUCTION U/S 10B OF T HE ACT TO THE TUNE OF RS. 6,25,86,299/-. THE LD. AO HAD GONE THROUGH THE PROF IT AND LOSS ACCOUNT OF THE SAID EOU UNIT AND OBSERVED THAT THE INCOME OF THE ASSESSEE I NCLUDES A SUM OF RS. 86,85,103/- REPRESENTING OTHER INCOME AS UNDER: HEADS AMOUNT(RS.) RENT 5,907/- 10 ITA NOS.1410&1601/KOL/2016 HINDUSTAN GUM & CHEMICALS LTD. A.YR. 2010-11 10 CLAIMS REALIZED 4,99,626/- SUPPLIERS BALANCE WRITTEN BACK 18/- MISCELLANEOUS INCOME & RECEIPTS 7,882/- DUTY DRAWBACK 81,71,670/- TOTAL 86,85,103/- THE LD. AO OBSERVED THAT THIS OTHER INCOME CANNOT B E CONSTRUED AS PROFIT DERIVED FROM THE MANUFACTURE OF ELIGIBLE ARTICLE FROM THE ELIGIB LE UNDERTAKING OF THE ASSESSEE AND ACCORDINGLY DENIED DEDUCTION U/S 10B TO THAT EXTENT . THE LD. CIT(A) GRANTED RELIEF TO THE ASSESSEE BY PLACING RELIANCE ON THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2003-04 TO 2007-08. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS : 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) HAS ERRED IN FACT AND IN LAW IN ACCEPTING ASSESSEES CO NTENTION REGARDING APPLICABILITY OF EXEMPTION U/S 10B OF THE ACT ON IN COMES FROM OTHER SOURCES. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) ERRED IN NOT RELYING THE DECISION OF THE APEX COURT IN THIS REGARD. 6.1. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT THE ISSUE UNDER DISPUTE IS SQUARELY COVERED BY THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITS FAVOUR FOR THE ASSESSMENT YEAR 2008-09 IN I.T.A. NO. 462 & 752/KOL/2014 DATED 08.03.2017 WHEREIN IT WAS HELD AS UNDER: 5. THE FIRST ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD CITA WAS JUSTIFIED IN ALLOWING EXEMPTION U/S 10B OF THE ACT IN RESPECT OF OTHER INCOME OF THE ASSESSEE TO THE TUNE OF RS. 18,20,101/- IN THE FACT S AND CIRCUMSTANCES OF THE CASE. 5.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASS ESSEE IS HAVING A100% EXPORT ORIENTED UNIT (EOU) AT VIRAMGAM AND HAD CLAIMED EXEMPTION U/ S 10B OF THE ACT IN RESPECT OF PROFITS OF THE BUSINESS OF THE SAID UNDERTAKING IN THE RETURN. THE SAID PROFITS ADMITTEDLY INCLUDES THE FOLLOWING INCOMES WHICH IN THE OPINION OF THE LD AO WAS NOT DERIVED FROM EXPORT OF ARTICLES AS PER SECTION 10B OF THE ACT :- RENT FROM STAFF QUARTERS 5,712 INSURANCE CLAIMS REALIZED 36,390 11 ITA NOS.1410&1601/KOL/2016 HINDUSTAN GUM & CHEMICALS LTD. A.YR. 2010-11 11 EXCESS LIABILITIES NO LONGER REQUIRED 8 MISCELLANEOUS INCOME & RECEIPTS (INCLUDING DUTY DRAWBACK OF RS. 20,64,901) 20,69,044 INTEREST RECEIVED (NET) (-) 2,91,053 ------------------ 18,20,101 THE LD AO HELD THAT THE AFORESAID INCOMES WERE NOT DERIVED FROM THE EXPORT OF ARTICLES OR THINGS AND ACCORDINGLY DENIED THE EXEMPTION U/S 10B OF THE ACT ON THE SAME. IN SUPPORT OF HIS CONTENTION, HE PLACED RELIANCE ON VA RIOUS DECISIONS. THE LD CITA GRANTED THE EXEMPTION U/S 10B OF THE ACT AND GAVE RELIEF TO THE ASSESSEE BY FOLLOWING THE CO- ORDINATE BENCH DECISION OF THIS TRIBUNAL IN ASSESSE ES OWN CASE FOR THE ASST YEARS 2003- 04 AND 2004-05 VIDE ORDER DATED 28.12.2007 IN ITA N O.S 150 AND 277 (KOL) OF 2007 AND ITA NOS. 5678 AND 580/KOL/2009 RESPECTIVELY. AGGRI EVED, THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUND:- 1. THAT IS THE FACTS AND IN LAW OF THE CASE THE LD . CIT(A) ERRED IN ALLOWING THE EXEMPTED INCOME U/S. 10B FOR INTEREST EARNED FROM O THER INCOME IN THE FORM OF INTEREST, DUTY DRAWBACK ETC. OF RS. 18,20,101/-.' 5.2. THE LD DR ARGUED THAT STAFF ACCOMMODATION REN T IS NOT DERIVED FROM EXPORT OF ARTICLES OR THINGS AS PER SECTION 10B OF THE ACT. THE INCOME IN THE FORM OF DUTY DRAWBACK IS SQUARELY COVERED IN FAVOUR OF THE REVEN UE BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF LIBERTY INDIA VS CIT R EPORTED IN 317 ITR 218 (SC) WHEREIN IT WAS HELD THAT DUTY DRAWBACK RECEIPTS AND DEPB BENEFITS DO NOT FORM PART OF THE NET PROFITS ELIGIBLE INDUSTRIAL UNDERTAKINGS FO R THE PURPOSE OF DEDUCTION U/S 80IA / 80IB OF THE ACT AS THEY ARE NOT DERIVED FROM THE IN DUSTRIAL UNDERTAKING. IN RESPECT OF EXCESS LIABILITIES WRITTEN BACK, HE ARGUED THAT IT IS NOT KNOWN WHETHER THE LIABILITIES WERE ORIGINALLY CREATED IN THIS 100% EOU OR FOR OTHER UN ITS AS ADMITTEDLY THE ASSESSEE IS HAVING BOTH TAXABLE UNIT AS WELL AS EXEMPT UNIT. I N RESPONSE TO THIS, THE LD AR ARGUED THAT THE PROVISIONS OF SECTION 10B(1) OF THE ACT ST ARTS WITH SUBJECT TO THE PROVISIONS OF THIS SECTION . THE PROVISIONS OF SECTION 10B(4) O F THE ACT CLEARLY SPECIFIES THAT THE PROFIT DERIVED FROM THE 100% EOU SHOULD BE AS FOLLO WS:- PROFITS OF THE BUSINESS OF THE UNDERTAKING * EXPOR T TURNOVER / TOTAL TURNOVER HENCE, THE ENTIRE INCOME OF THE 100% EOU SHALL BE E LIGIBLE FOR EXEMPTION U/S 10B OF THE ACT. HE FURTHER STATED THAT THE ASSESSEE MAINTA INS SEPARATE PROFIT AND LOSS ACCOUNT AND BALANCE SHEET FOR THE 100% EOU WHICH IS ALSO PA RT OF THE RECORDS. IN RESPECT OF RENT RECOVERED FROM STAFF, THE SAME ONLY REPRESENTS RECOVERY OF RENT FROM STAFF QUARTERS IN RESPECT OF THE QUARTERS LET OUT BY THE ASSESSEE ON THE RENTED PREMISES. IN OTHER WORDS, THE ASSESSEE PAYS RENT FOR THE TOTAL PREMISES INCLU DING STAFF QUARTERS AND RECOVERS THE RENT FROM STAFF FOR THEIR QUARTERS ACCOMMODATION. HENCE IT IS EFFECTIVELY RECOVERY OF EXPENDITURE AND NOT ANY INCOME FOR ASSESSEE. IN R ESPECT OF INSURANCE CLAIMS RECEIVED, THE SAME WAS RECEIVED FOR DAMAGES FOR GOODS PERTAIN ING TO 100% EOU AND HENCE IS THE INCOME OF THE 100% EOU. IN RESPECT OF DUTY DRAWBAC K, THE LD AO CONCEDES THE FACT THAT THE SAME BELONGS TO THE CATEGORY OF ANCILLARY PROFITS OF THE 100% EOU AND HAVING SAID SO, THAT ALSO WOULD ONLY ADD TO THE PROFITS OF THE BUSINESS OF THE UNDERTAKING AND HENCE IS ELIGIBLE FOR EXEMPTION U/S 10B IN TERMS OF SECTION 10B(4) OF THE ACT. HE 12 ITA NOS.1410&1601/KOL/2016 HINDUSTAN GUM & CHEMICALS LTD. A.YR. 2010-11 12 FURTHER STATED THAT THE DECISION OF HONBLE APEX CO URT IN LIBERTY INDIA CASE SUPRA AND OTHER DECISIONS RELIED UPON BY THE LD AO WERE ALL R ENDERED IN THE CONTEXT OF DEDUCTIONS UNDER SECTIONS 80HH / 80HHC / 80IA / 80IB ETC AND H ENCE THE SAME CANNOT BE USED FOR SECTION 10B WHERE THE LANGUAGE OF THE STATUTE IS CO VERED AND EXEMPTION IS TO BE RECKONED AS PER COMPUTATION MECHANISM PROVIDED IN S ECTION 10B(4) OF THE ACT. HE PLACED RELIANCE ON THE DECISION OF THE HONBLE CALC UTTA HIGH COURT IN ASSESSEES OWN CASE IN ITA 666 OF 2008 WITH GA NO. 3269 OF 2014 I TAT 159 OF 2014 DATED 30.6.2016 WHERE THE SIMILAR ISSUE WAS HELD IN FAVOUR OF THE A SSESSEE BY FOLLOWING THE PROVISIONS OF SECTION 10B(4) OF THE ACT. HE ACCORDINGLY PRAYED F OR NON-INTERFERENCE OF THE ORDER OF THE LD CITA. 5.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD. THE DETAILS OF OTHER INCOME TO THE TUNE OF RS 18,20,101/- AS DETAILED HEREINABOVE PERTAINS TO 100% EOU AS COULD BE EVIDEN T FROM THE SEGMENTAL PROFIT AND LOSS ACCOUNT OF 100% EOU FURNISHED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES. HENCE THE ENTIRE OTHER INCOME BECOMES THE PROFITS O F THE BUSINESS OF THE UNDERTAKING (I.E 100% EOU) . THEN AUTOMATICALLY THE ASSESSEE IS ENT ITLED FOR DEDUCTION AS PER THE COMPUTATION MECHANISM PROVIDED IN SECTION 10B(4) OF THE ACT. FOR THE SAKE OF CONVENIENCE, THE PROVISIONS OF SECTION 10B(1) AND 1 0B(4) OF THE ACT ARE REPRODUCED HEREUNDER:- 10B (1) SUBJECT TO THE PROVISIONS OF THIS SECTION, A DEDUCTION OF SUCH PROFITS AND GAINS AS ARE DERIVED BY A HUNDRED PER CENT EXPORT-ORIENTED U NDERTAKING FROM THE EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARE FOR A PERIOD OF TEN CONSECUTIVE ASSESSMENT YEARS BEGINNING WITH THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE UNDERTAKING BEGINS TO MANUFACTURE OR PRODUCE ARTICL ES OR THINGS OR COMPUTER SOFTWARE, AS THE CASE MAY BE, SHALL BE ALLOWED FROM THE TOTAL IN COME OF THE ASSESSEE : PROVIDED THAT WHERE IN COMPUTING THE TOTAL INCOME O F THE UNDERTAKING FOR ANY ASSESSMENT YEAR, ITS PROFITS AND GAINS HAD NOT BEEN INCLUDED B Y APPLICATION OF THE PROVISIONS OF THIS SECTION AS IT STOOD IMMEDIATELY BEFORE ITS SUBSTITU TION BY THE FINANCE ACT, 2000, THE UNDERTAKING SHALL BE ENTITLED TO THE DEDUCTION REFE RRED TO IN THIS SUB-SECTION ONLY FOR THE UNEXPIRED PERIOD OF AFORESAID TEN CONSECUTIVE ASSES SMENT YEARS 10B(4) FOR THE PURPOSES OF SUB-SECTION (1), THE PR OFITS DERIVED FROM EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARE SHALL BE THE AMOUNT WHI CH BEARS TO THE PROFITS OF THE BUSINESS OF THE UNDERTAKING, THE SAME PROPORTION AS THE EXPO RT TURNOVER IN RESPECT OF SUCH ARTICLES OR THINGS OR COMPUTER SOFTWARE BEARS TO THE TOTAL T URNOVER OF THE BUSINESS CARRIED ON BY THE UNDERTAKING. FROM THE AFORESAID SECTION, IT IS VERY CLEAR AS RIG HTLY POINTED OUT BY THE LD AR THAT SECTION 10B(1) OF THE ACT STARTS WITH THE EXPRESSIO N SUBJECT TO THE PROVISIONS OF THIS SECTION--------. THE PROVISIONS OF SECTION 10B(4) OF THE ACT WHICH STIPULATES THE COMPUTATION MECHANISM CLEARLY STATES THAT THE ENTIR E PROFITS OF THE BUSINESS OF THE ELIGIBLE UNDERTAKING SHOULD BE TAKEN INTO ACCOUNT F OR COMPUTING THE AMOUNT ELIGIBLE FOR SECTION 10B OF THE ACT. WE ALSO FIND THAT THE HON BLE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE VIDE ITS ORDER DATED 30.6.2016 SUPRA HAD HELD THIS ISSUE IN FAVOUR OF THE ASSESSEE. THE QUESTION RAISED BEFORE THE CO URT IS AS BELOW:- 13 ITA NOS.1410&1601/KOL/2016 HINDUSTAN GUM & CHEMICALS LTD. A.YR. 2010-11 13 (A) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE INCOME TAX APPELLATE TRIBUNAL ERRED IN LAW IN DIRECTING THE ASSESSING OF FICER TO TREAT THE INTEREST INCOME OF RS.28,74,473/- AS PART OF THE PROFITS OF BUSINESS O F THE 100% E. O. U. ELIGIBLE FOR DEDUCTION UNDER SECTION 10B OF THE INCOME TAX ACT, 1961 AND COMPUTE DEDUCTION ACCORDINGLY WITHOUT APPRECIATING THE FACT THAT THE SAID INTEREST INCOME WAS NOT PROFIT FROM THE BUSINESS BUT ACCRUED ON FIXED DEPOSIT KEPT BY THE ASSESSEE IN BANK? A BARE READING OF SUB-SECTION (1) SUGGESTS THAT 10 0 % EXPORT ORIENTED UNDERTAKINGS ARE ENTITLED TO A DEDUCTION OF PROFITS AND GAINS DERIVE D FROM THE EXPORT OF ARTICLES FOR A PERIOD OF 10 YEARS. THE AFORESAID ENTITLEMENT IS, HOWEVER, SUBJECT TO THE PROVISIONS OF SECTION 10B. IN OTHER WORDS, SUBJECT TO THE PROVISIONS CONT AINED IN THE OTHER PARTS OF THE SECTION 10B, THE BENEFIT IS AVAILABLE TO AN ASSESSEE. IT WA S NOT DISPUTED THAT THE ONLY RELEVANT PROVISION TO BE TAKEN INTO ACCOUNT IS SUBSECTION (4 ) WHICH WE ALREADY HAVE QUOTED. SUB- SECTION (4) PROVIDES THE QUANTUM OF DEDUCTION WHICH CAN BE AVAILED BY AN ASSESSEE. THE QUANTUM OF DEDUCTION IS DEPENDENT UPON THE TOTAL TU RNOVER OF THE BUSINESS OF THE UNDERTAKING AND THE EXPORT TURNOVER OF THE UNDERTAK ING. ONCE THESE TWO FIGURES ARE AVAILABLE, ONE HAS TO DIVIDE THE TOTAL TURNOVER BY THE EXPORT TURNOVER IN ORDER TO WORK OUT THE PERCENTAGE OF THE EXPORT TURN OVER, VIS--VIS T HE TOTAL TURN OVER. SUPPOSE TOTAL TURN OVER IS RS. 100/- AND TOTAL EXPORT TURN OVER IS FOR RS 10/-, THEN THE EXPORT TURN OVER IS 10 % OF THE TOTAL TURNOVER. THEN ONE HAS TO FIND OUT T HE TOTAL PROFIT OF THE BUSINESS OF THE UNDERTAKING. SUPPOSE THE TOTAL PROFIT OF THE BUSINE SS OF THE UNDERTAKING IS RS. 100, IN THAT CASE, DEDUCTION AVAILABLE TO THE ASSESSEE UNDER SEC TION 10 SUB-SECTION (1) OF SECTION 10B SHALL BE 10% OF RS. 100, I.E. TO SAY RS. 10/-. THIS IS THE FORMULA WHICH HAS BEEN PROVIDED BY SUBSECTION (4) FOR THE PURPOSE OF WORKING OUT TH E BENEFIT OR DEDUCTION UNDER SUBSECTION (1). TOTAL TURNOVER SHALL NATURALLY INCL UDE RECEIPT ON ACCOUNT OF 5 INTEREST. THE LEGISLATURE DOES NOT APPEAR TO HAVE PROVIDED FOR EX CLUDING THE AMOUNT OF INTEREST FROM THE TOTAL TURN OVER AS HAS BEEN DONE IN THE CASE OF 80HHC BY EXPLANATION (BAA) OF SUB- SECTION (4C) THEREOF. IN THAT CASE, 90% OF THE INCO ME ARISING OUT OF INTEREST HAS TO BE EXCLUDED FROM THE PROFITS OF THE BUSINESS FOR THE P URPOSE OF ARRIVING AT DEDUCTION AVAILABLE UNDER SECTION 80HHC. BUT AN IDENTICAL PRO VISION IS NOT THERE. THEREFORE, THAT PROVISION CANNOT BE IMPORTED BY IMPLICATION. THE SU BMISSION THAT THE AMOUNT EARNED FROM INTEREST WAS NOT INTENDED TO BE TAKEN INTO ACC OUNT FOR THE PURPOSE OF GIVING BENEFIT UNDER SUBSECTION (1) OF SECTION 10B MAY BE CORRECT. BUT THE AMOUNT OF DEDUCTION AVAILABLE TO A 100% EXPORT ORIENTED UNDERTAKING IS NECESSARILY DEPENDENT UPON THE FORMULA PROVIDED IN SUBSECTION (4). THERE IS, AS SU CH, NO SCOPE FOR ANY CONTROVERSY THAT PART OF THE MONEY WAS EARNED FROM INTEREST AND NOT FROM EXPORT. THIS QUESTION CAME UP BEFORE THE KARNATAKA HIGH COURT AND WAS ANSWERED IN THE CASE OF CIT VS. MOTOROLA INDIA ELECTRONICS (P.) LTD. REPORTED IN [2014] 46 T AXMANN.COM 167 (KARNATAKA) AS FOLLOWS : IN THE INSTANT CASE, THE ASSESSEE IS A 100% EOU, W HICH HAS EXPORTED SOFTWARE AND EARNED THE INCOME. A PORTION OF THAT INCOME IS INCL UDED IN EEFC ACCOUNT. YET ANOTHER PORTION OF THE AMOUNT IS INVESTED WITHIN THE COUNTR Y BY WAY OF FIXED DEPOSITS, ANOTHER PORTION OF THE AMOUNT IS INVESTED BY WAY OF LOAN TO SISTER CONCERN WHICH IS DERIVING INTEREST OR THE CONSIDERATION RECEIVED FROM SALE OF THE IMPORT ENTITLEMENT, WHICH IS PERMISSIBLE IN LAW. NOW THE QUESTION IS WHETHER THE INTEREST 6 RECEIVED AND THE CONSIDERATION RECEIVED BY SALE OF IMPORT ENTITLEMEN T IS TO BE CONSTRUED AS INCOME OF THE BUSINESS OF THE UNDERTAKING. THERE IS A DIRECT NEXU S BETWEEN THIS INCOME AND THE INCOME OF THE BUSINESS OF THE UNDERTAKING. THOUGH IT DOES NOT PARTAKE THE CHARACTER OF A PROFITS AND GAINS FROM THE SALE OF AN ARTICLE, IT IS THE IN COME WHICH IS DERIVED FROM THE CONSIDERATION REALIZED BY EXPORT OF ARTICLES. IN VI EW OF THE DEFINITION OF INCOME FROM PROFITS AND GAINS INCORPORATED IN SUBSECTION (4), T HE ASSESSEE IS ENTITLED TO THE BENEFIT OF EXEMPTION OF THE SAID AMOUNT AS CONTEMPLATED UNDER SECTION 10B OF THE ACT. THEREFORE, THE TRIBUNAL WAS JUSTIFIED IN EXTENDING THE BENEFIT TO THE AFORESAID AMOUNTS ALSO. WE DO 14 ITA NOS.1410&1601/KOL/2016 HINDUSTAN GUM & CHEMICALS LTD. A.YR. 2010-11 14 NOT FIND ANY MERIT IN THESE APPEALS. THEREFORE, THE FIRST SUBSTANTIAL QUESTION OF LAW RAISED IN ITA NO. 428/2007 IS ANSWERED IN FAVOUR OF THE RE VENUE AND AGAINST THE ASSESSEE AND THE FIRST SUBSTANTIAL QUESTION OF LAW IN ITA NO. 44 7/2007 IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. IN THE LIGHT OF THE AFORESAID FINDINGS, THE SECOND QUESTION OF LAW IN BOTH THE APPEALS DO NOT ARISE FOR CONSIDERATION. MR. DUDHORIA, LEARNED ADVOCATE APPEARING FOR THE RE VENUE DREW OUR ATTENTION TO A JUDGMENT OF THE MADRAS HIGH COURT IN THE CASE OF IN TERNATIONAL 7 COMPONENTS INDIA LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX REPORTED I N 2015 - (372) ITR- 0190 - MADRAS WHEREIN THE FOLLOWING VIEW WAS TAKEN : IN THE LIGHT OF THE ABOVE SAID DECISION, WE ARE OF THE FIRM VIEW THAT THE INTEREST EARNED FROM DEPOSITS WITH CORPORATION BANK, ELECTRI CITY BOARD AND ON STAFF ADVANCES DOES NOT HAVE DIRECT OR IMMEDIATE NEXUS WI TH THE BUSINESS OF THE ASSESSEES UNDERTAKING AND, CONSEQUENTLY, THEY ARE NOT ELIGIBLE FOR GRANT OF DEDUCTION UNDER SECTION 10B OF THE ACT, WHICH IS AK IN TO SECTION 80HH OF THE ACT DEALT WITH IN THE DECISION REFERRED SUPRA. MR. R.N.BAJORIA, LEARNED SENIOR ADVOCATE RIGHTLY PO INTED OUT THAT THE JUDGMENT OF THE MADRAS HIGH COURT IS OF NO RELEVANCE FOR THE SIMPLE REASON THAT SUB-SECTION (4) OF SECTION 10B WAS NOT TAKEN INTO ACCOUNT BY THE HONB LE MADRAS HIGH COURT. THEREFORE, THIS JUDGMENT IS OF NO ASSISTANCE IN DECIDING THE I SSUE. THE LEARNED TRIBUNAL HAS PASSED THE FOLLOWING ORDER: THERE IS NO REQUIREMENT FOR THE PURPOSES OF SECTIO N 10B TO ESTABLISH DIRECT NEXUS BETWEEN THE INCOME AND THE UNDERTAKING. THE E NTIRE BUSINESS INCOME OF THE 100% EOU WILL BE THE PROFITS OF THE BUSINESS O F THE UNDERTAKING. IT HAS BEEN HELD ABOVE THAT THE INTEREST EARNED ON TEMPORA RILY SURPLUS BUSINESS FUNDS OF THE 100% EOU DEPOSITED WITH BANKS FOR SHORT PERI ODS IS BUSINESS INCOME AND HAS IN FACT BEEN SO ASSESSED. IT IS NOT IN DISPUTE THAT THE SURPLUS FUNDS WERE OF THE 100% EOU. AS SUCH, THE INTEREST EARNED THEREON HAS TO BE REGARDED AS PART OF THE PROFIT OF THE BUSINESS OF THE UNDERTAKING. WE 8 FURTHER FIND THAT THE TRIBUNAL IN THE CASE OF CHEVIOT CO. LTD. FOR ASSESS MENT YEARS 2003-04 AND 2004- 05, RELIED UPON BY THE ASSESSEE, HAS DEALT WITH SIM ILAR ISSUE. IN THOSE CASES, THE DIFFERENCE BETWEEN THE PROVISIONS OF SECTIONS 10B A ND 80HH WAS NOTED AND AFTER CONSIDERING THE JUDGMENTS OF THE HONBLE SUPREME CO URT IN STERLING FOODS (SUPRA) AND IN P.R.PRABHAKAR VERSUS CIT (284 ITR 54 8 (SC) ) APPROVING THE SPECIAL BENCH DECISION OF THE TRIBUNAL IN INTERNATI ONAL RESEARCH PARK LABORATORIES LIMITED VERSUS ASSISTANT C.I.T. (212 I TR (AT) 1 (SB) ), IT WAS HELD THAT THE PROFITS OF THE BUSINESS OF THE UNDERTAKING WOULD INCLUDE ITS ENTIRE BUSINESS INCOME. KEEPING IN VIEW THE ABOVE DECISION AND THE DECISION OF THE TRIBUNAL, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS TO SUCCEED. THE ASSESSING OFFICER IS DIRECTED TO TREAT THE INTEREST OF RS. 28,74,473/- AS PART OF THE PROFITS OF THE BUSINESS OF THE 100% EOU ELIGIBLE FO R DEDUCTION UNDER SECTION 10B AND COMPUTE THE DEDUCTION ACCORDINGLY. THE ASSE SSING OFFICER SHOULD DEDUCT THE SUM OF RS. 8,01,30,294/- (RS. 7,72,54,82 1/- + RS. 28,74,473/-) AND NOT ONLY RS. 7,72,54,821/- FROM THE PROFIT AS PER PROFI T AND LOSS ACCOUNT FOR THE PURPOSE OF SEPARATE CONSIDERATION UNDER SECTION 10B GROUND NOS. 3,4 AND 5 OF THE ASSESSEES APPEAL ARE THUS ALLOWED. WE ARE OF THE OPINION THAT THE TRIBUNAL WAS RIGHT I N THE VIEW THEY TOOK FOR THE REASONS DISCUSSED BY US. IN THAT VIEW OF THE MATTER, THE QU ESTION NO. 1 IS 9 ANSWERED IN THE NEGATIVE AND IN FAVOUR OF THE ASSESSEE. THE APPEAL IS, THEREFORE, DISMISSED. 15 ITA NOS.1410&1601/KOL/2016 HINDUSTAN GUM & CHEMICALS LTD. A.YR. 2010-11 15 5.3.1. WE ALSO AGREE WITH THE ARGUMENT OF THE LD AR THAT THE DECISIONS RELIED UPON BY THE LD AO AND LD DR WERE RENDERED IN THE CONTEXT O F DEDUCTIONS U/S 80HH / 80HHC / 80IA / 80IB OF THE ACT AND THE WORDS USED THEREON C ANNOT BE IMPORTED INTO SECTION 10B OF THE ACT WHEN THE LANGUAGE STIPULATED IN SECTION 10B (4) OF THE ACT IS VERY CATEGORICAL AND UNAMBIGUOUS. 5.3.2. IN VIEW OF OUR AFORESAID FINDINGS AND RESPEC TFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE SUPRA, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD CITA IN THIS REGAR D. ACCORDINGLY, WE DISMISS THE GROUND NO. 1 RAISED BY THE REVENUE. RESPECTFULLY FOLLOWING THE SAME THE GROUND NOS. 1 A ND 2 RAISED BY THE REVENUE ARE DISMISSED. 7. DISALLOWANCE OF ADDITIONAL DEPRECIATION GROUND NO. 3 OF REVENUE APPEAL THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESSEE PURCHASED & INSTALLED NEW PLANT & MACHINERY FOR ITS MANUFACTURING BUSINESS. SOME OF S UCH PLANT & MACHINERY WAS PUT TO USE FOR A PERIOD OF LESS THAN 180 DAYS DURING THE F INANCIAL YEAR 2008-09 (ASSESSMENT YEAR 2009-10). FOR THE YEAR, IN RESPECT OF SUCH PLA NT & MACHINERY, THE ASSESSEE CLAIMED ONLY 50% INITIAL DEPRECIATION U/S 32(1)(IIA) OF TH E INCOME TAX ACT, 1961(HEREINAFTER REFERRED TO AS THE ACT) IN VIEW OF THE SECOND PROVI SO TO SECTION 32(1) OF THE ACT. FURTHER, BALANCE 50% OF INITIAL DEPRECIATION, AMOUNTING TO R S. 21,71,119/- ON SUCH PLANT & MACHINERY HAS BEEN CLAIMED BY THE COMPANY DURING TH E YEAR UNDER REFERENCE. NOW DURING THE YEAR UNDER APPEAL I.E. ASSESSMENT YEAR 2 010-11, THE ASSESSEE CLAIMED FURTHER DEPRECIATION (I.E. BALANCE 10% WHICH IS 50% OF 20%) ON THIS PLANT AND MACHINERY ON THE PLEA THAT IT IS ENTITLED TO GET TH E BALANCE DEPRECIATION THIS YEAR ALSO. THE LD. AO HELD THAT AFTER ALLOWING A PORTION OF ADDITIONAL DEPRECIATION IN ASSESSMENT YEAR 2009-10, WRITTEN DOWN VALUE HAS BEE N WORKED OUT BY THE LD. AO AND THE SAME HAS BEEN BROUGHT FORWARD DURING THE YE AR UNDER APPEAL AS OPENING WRITTEN DOWN VALUE, ON WHICH REGULAR DEPRECIATION W OULD BE APPLICABLE TO THE 16 ITA NOS.1410&1601/KOL/2016 HINDUSTAN GUM & CHEMICALS LTD. A.YR. 2010-11 16 ASSESSEE AT THE RATES PRESCRIBED FOR PLANT AND MACH INERY. WITH THESE OBSERVATIONS, HE DISALLOWED THE REMAINING PORTION OF UNCLAIMED AD DITIONAL DEPRECIATION PERTAINING TO ASSESSMENT YEAR 2009-10 (I.E. BALANCE 10%) IN THE ASSESSMENT AND GRANTED ONLY REGULAR DEPRECIATION. THE LD CITA GRANTED RELIEF TO THE ASSESSEE AND DIRECTED THE LD AO TO ALLOW THE REMAINING PORTION O F ADDITIONAL DEPRECIATION OF RS 21,71,119/- IN THE YEAR UNDER APPEAL. 7.1. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US O N THE FOLLOWING GROUNDS: 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE LD. CIT(A) ERRED IN ALLOWING ADDITIONAL DEPRECIATION FOR A PERIOD NOT R EFERRED IN THE STATUTE. 7.2. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND T HAT THIS ISSUE IS COVERED BY THIS ORDER OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR A SSESSMENT YEAR 2008-09 IN I.T.A. NO. 462 AND 752/KOL/2014 DATED 08.03.2017 WHEREIN IT WA S HELD THAT: 6.3. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT THE ISSUE UNDER DISPUTE IS SQUARELY COVERED BY THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL SUPRA WHEREIN IT WAS HELD AS UNDER :- 4. GROUND NO. 1 RELATING TO DEPRECIATION ON PLANT AND MACHINERY WHICH WERE PUT TO USE LESS THAN 180 DAYS DURING THE SAID FINANCIAL YE AR. DURING THE PREVIOUS ASSESSMENT YEAR (2006-07) THE ASSESSEE CLAIMED 50% OF DEPRECIATION AND IT WAS ALLOWED. NOW FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE CLAIMED FURTHER 1 0% DEPRECIATION TO THE EXTENT OF RS.20,97,495/- UNDER SECOND PROVISO TO SEC. 32(1)(I IA) OF THE ACT. THE AO DENIED THE SAME ON THE GROUND THAT THE ACT DOES NOT HAVE OPTION WHE RE ASSESSEE CAN CLAIM REMAINING DEPRECIATION IN SUBSEQUENT YEAR. THE CIT(A) CONFIR MED THE ORDER OF THE AO, HOWEVER, DIRECTED THE AO TO RECALCULATE THE AMOUNT OF DEPRE CIATION ON WRITTEN DOWN VALUE (WDV). 5.THE LD AR BEFORE US SUBMITS THAT THE CASE IN HAND IS SQUARELY COVERED BY THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT & ANR VS. RITTAL INDIA PVT. LTD REPORTED IN (2016) 380 ITR 423(KARN). 6.THE LD. SR. DR RELIED ON THE ORDERS OF THE AUTHO RITIES BELOW. 7. HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT MATERIAL ON RECORD. IN THIS REGARD, WE MAY REFER TO THE DECISION OF THE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT AND ANOTHER VS RITTAL INDIA PRIVATE LTD (SUPRA). THE FA CTS OF THE CASE THEREIN ARE THAT THE ASSESSEE BEING AN EXISTING INDUSTRIAL UNDERTAKING H AD ACQUIRED AND INSTALLED NEW PLANT AND MACHINERY IN THE F.Y 2006-07 AND CLAIMED 50% OF ADD ITIONAL 20% DEPRECIATION I.E, 10% ADDITIONAL DEPRECIATION UNDER SECTION 32(1)(IIA) OF THE ACT IN THE CORRESPONDING ASSESSMENT YEAR 2007-08 FOR THE REASON THAT THE NEW MACHINERY WAS ACQUIRED AFTER 01-10-2006. THE RELEVANT PORTIONS AT PAGE NOS AT 9 AND 10 OF WHICH IS REPRODUCED HEREIN BELOW FOR BETTER UNDERSTANDING:- 17 ITA NOS.1410&1601/KOL/2016 HINDUSTAN GUM & CHEMICALS LTD. A.YR. 2010-11 17 THE LANGUAGE USED IN CLAUSE (IIA) OF THE SAID SECT ION CLEARLY PROVIDES THAT A FURTHER SUM EQUAL TO 20 PER CENT. OF THE ACTUAL COS T OF SUCH MACHINERY OR PLANT SHALL BE ALLOWED AS DEDUCTION UNDER CLAUSE (II)'. T HE WORD 'SHALL' USED IN THE SAID CLAUSE IS VERY SIGNIFICANT. THE BENEFIT WHICH IS TO BE GRANTED IS 20 PER CENT. ADDITIONAL DEPRECIATION. BY VIRTUE OF THE PROVISO R EFERRED TO ABOVE, ONLY 10 PER CENT. CAN BE CLAIMED IN ONE YEAR, IF PLANT AND MACH INERY IS PUT TO USE FOR LESS THAN 180 DAYS IN THE SAID FINANCIAL YEAR. THIS WOULD NEC ESSARILY MEAN THAT THE BALANCE 10 PER CENT. ADDITIONAL DEDUCTION CAN BE AVAILED OF IN THE SUBSEQUENT ASSESSMENT YEAR, OTHERWISE THE VERY PURPOSE OF INSERTION OF CLAUSE (IIA) WOULD BE DEFEATED BECAUSE IT PROVIDES FOR 20 PER CENT. DEDUCTION WHIC H SHALL BE ALLOWED. IT HAS BEEN CONSISTENTLY HELD BY THIS COURT, AS WEL L AS THE APEX COURT, THAT THE BENEFICIAL LEGISLATION, AS IN THE PRESENT CASE, SHOULD BE GIVE N LIBERAL INTERPRETATION SO AS TO BENEFIT THE ASSESSEE. IN THIS CASE, THE INTENTION OF THE LEGISL ATION IS ABSOLUTELY CLEAR, THAT THE ASSESSEE SHALL BE ALLOWED CERTAIN ADDITIONAL BENEFIT, WHICH WAS RESTRICTED BY THE PROVISO TO ONLY HALF OF THE SAME BEING GRANTED IN ONE ASSESSMENT YEAR, I F CERTAIN CONDITION WAS NOT FULFILLED. BUT, THAT, IN OUR CONSIDERED VIEW, WOULD NOT RESTRAIN TH E ASSESSEE FROM CLAIMING THE BALANCE OF THE BENEFIT IN THE SUBSEQUENT ASSESSMENT YEAR. THE TRIBUNAL, IN OUR VIEW, HAS RIGHTLY HELD, THAT ADDITIONAL DEPRECIATION ALLOWED UNDER SECTION 32(1)(IIA) OF THE ACT IS A ONE-TIME BENEFIT TO ENCOURAGE INDUSTRIALISATION, AND THE PRO VISIONS RELATED IT HAVE TO BE CONSTRUED REASONABLY, LIBERALLY AND PURPOSIVELY, TO MAKE THE PROVISION MEANINGFUL WHILE GRANTING THE ADDITIONAL ALLOWANCE. WE ARE IN FULL AGREEMENT WITH SUCH OBSERVATIONS MADE BY THE TRIBUNAL. 8. HEARD BOTH PARTIES AND PERUSED THE RELEVANT MATE RIAL ON RECORD. BY READING OF CLAUSE (IIA) TO SUB-SECTION (1) OF SECTION 32 PROVIDES FOR ALLOWANCE OF INITIAL DEPRECIATION EQUAL TO 20% OF THE ACTUAL COST OF NEW PLANT AND MACHINERY A CQUIRED AND INSTALLED AFTER MARCH 31, 2005 WITH EFFECT FROM THE ASSESSMENT YEAR 2006-07 T O THOSE WHO ENGAGED IN THE BUSINESS OF MANUFACTURE OR PRODUCTION OF ANY ARTICLE OR THING. THEREFORE, THE ASSESSEE IS ENTITLED TO CLAIM 20% OF DEPRECIATION EQUAL TO THE ACTUAL COST OF PLANT AND MACHINERY, BUT, WHERE AS THE 2 ND PROVISO TO SECTION 32(1) OF THE ACT RESTRAINS THE AUTHORITY TO ALLOW DEPRECIATION TO 50% OF SUCH 20% IF THE SUBJECTED PLANT AND MACHINER Y ACQUIRED DURING THE PREVIOUS YEAR AND IS PUT TO USE FOR A PERIOD OF LESS THAN 180 DAY S IN THAT PREVIOUS YEAR. ACCORDING TO AO IN HIS ORDER AT PAGE NO-4 REFERRED THAT THE ASSESSE E PUT TO USE NEW PLANT AND MACHINERY FOR LESS THAN 180 DAYS AND CONFIRMED BY THE CIT-A IN PA RA-8 OF IMPUGNED ORDER AND IT IS A REQUIREMENT UNDER 2 ND PROVISO TO SECTION 32(1) WHICH LIFTS THE RESTRICTI ON ON AO ALLOW THE FURTHER DEPRECIATION OF 10% OF WHICH REMAINED UNCLA IMED OUT OF 20% AS REFERRED IN CLAUSE (IIA) TO SUB-SECTION (1) OF SECTION 32 OF TH E ACT. THE FACTS OF THE PRESENT ARE SIMILAR TO THE DECISION SUPRA RELIED ON BY THE ASSESSEE. TH EREFORE, WE ARE OF THE VIEW THAT THE LAW LAID DOWN BY THE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT AND ANOTHER VS RITTAL INDIA PRIVATE LTD SUPRA IS APPLICABLE TO THE PRESEN T CASE, THUS WE HOLD THAT THE ASSESSEE IS ENTITLED TO CLAIM REMAINING 50% DEPRECIATION OF SUC H 20% WHICH IS EQUAL TO THE ACTUAL COST OF NEW PLANT AND MACHINERY, ACCORDINGLY GROUND NO-1 RAISED BY THE ASSESSEE IS ALLOWED. RESPECTFULLY FOLLOWING THE SAME, WE DISMISS GROUND NO. 2 RAISED BY THE REVENUE. RESPECTFULLY FOLLOWING THE SAME GROUND NO. 3 RAISED BY THE REVENUE IS DISMISSED. 18 ITA NOS.1410&1601/KOL/2016 HINDUSTAN GUM & CHEMICALS LTD. A.YR. 2010-11 18 8. DISALLOWANCE OF PROVISION FOR MARK TO MARKET LOSS RS. 38,29,247/- GROUND NO. 5 OF REVENUE APPEAL THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESSEE MADE A PROVISION FOR MARK TO MARKET LOSS OF RS. 38,29,347/- ON RESTATEMENT OF FORWARD EXCHAN GE CONTRACTS AND THE SAME WAS DISALLOWED BY THE ASSESSEE IN THE RETURN OF INCOME WHILE COMPUTING THE BUSINESS INCOME. LATER IN THE COURSE OF ASSESSMENT, THE ASSE SSEE VIDE LETTER DATED 28.02.2014, REQUESTED TO ALLOW THE DEDUCTION FOR SUCH LOSS IN V IEW OF THE FACT THAT SIMILAR CLAIM WAS ALLOWED BY THE LD. CIT(A) WHILE DECIDING THE ASSESS EES APPEAL FOR ASSESSMENT YEAR 2009-10. THE LD. AO HOWEVER DID NOT DEAL WITH THE S AID SUBMISSION OF THE ASSESSEE AND PROCEEDED TO ASSESS THE TOTAL INCOME WITH REFERENCE TO THE BUSINESS INCOME AS RETURNED BY THE ASSESSEE. ACCORDINGLY, THE ASSESSEE PREFERRE D AN APPEAL ON THIS GROUND BEFORE THE LD. CIT(A). THE LD. CIT(A) BY PLACING RELIANCE ON T HE DECISION OF HONBLE APEX COURT IN THE CASE OF CIT VS. WOODWARD GOVERNOR INDIA PVT. LTD. REPORTED IN 312 ITR 154 (SC) AND ONGC VS. CIT REPORTED IN 323 ITR 180 (SC) GRANTED RELIEF TO THE ASSESSEE BY OBSERVING AS UNDER: 8.2. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS O F THE AR AND HAVE PERUSED THE DETAILS OF SUCH LOSS. THE ISSUE WITH REGARD TO ALLO WABILITY OF MARK-TO-MARKET LOSS ARISING OUT OF RE-STATEMENT OF FOREIGN EXCHANGE LIABILITIES HAS BEEN DECIDED BY THE APEX COURT IN THE CASE OF CIT VS. WOODWARD GOVERNOR INDIA (P) LTD. (312 ITR 154) AND O.N.G.C VS. CIT (322 ITR 180). IN THESE DECISIONS THE APEX COURT HAS HELD THAT THE LOSS INCURRED ON RESTATEMENT OF FOREIGN CURRENCY LIABILITIES IN C ONFORMITY WITH EXCHANGE RATE PREVAILING ON THE BALANCE SHEET DATE IS NOT A CONTI NGENT LIABILITY BUT DEFINED AND ASCERTAINED LIABILITY AND THEREFORE THE LOSS INCURR ED ON RESTATEMENT IS LIABLE TO BE ALLOWED IN THE CASE OF AN ASSESSEE WHO FOLLOWS MERC ANTILE SYSTEM OF ACCOUNTING. FURTHER SUCH LOSS IS ALLOWABLE IF THE UNDERLYING AS SET OR UNDERLYING LIABILITY IS INCURRED ON TRADING ACCOUNT. IN THE APPELLANTS CASE, IT HAD ENTERED INTO FOREIGN EXCHANGE FORWARD CONTRACTS FOR HEDGING EXCHANGE FLUCTUATION RISKS IN RESPECT OF EXPORT ORDERS. AS SUCH THE UNDERLYING TRANSACTION IN RELATION TO FORW ARD CONTRACT ENTERED INTO BY THE ASSESSEE WAS TRADING TRANSACTION AND THEREFORE ANY LOSS CONNECTED WITH SUCH TRADING TRANSACTION AND WAS IN THE REVENUE FIELD AND THEREF ORE TO BE ALLOWED IN VIEW OF THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. WOODWARD GOVERNOR INDIA (P) LTD. (SUPRA) AND O.N.G.C. VS. CIT(SUPRA). IN FACT THIS VIEW FINDS SUPPORT IN THE APPELLATE ORDER PASSED BY MY PREDECESSOR FOR A. YS. 2008-09 AND 2009-10 RESPECTIVELY. FOLLOWING THESE APPELLATE ORDERS, THE AO IS DIRECTED TO ALLOW THE DEDUCTION FOR MARK-TO-MARKET LOSS OF RS. 38,29,347/ -. GROUND NO. 7 IS ALLOWED. 19 ITA NOS.1410&1601/KOL/2016 HINDUSTAN GUM & CHEMICALS LTD. A.YR. 2010-11 19 8.1. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US O N THE FOLLOWING GROUNDS: 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE LD. CIT(A) ERRED IN ALLOWING THE CLAIM OF MARK-TO-MARKET LOSES. 8.2. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND T HAT ON PERUSAL OF THE FACT THAT THE ISSUE HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASS ESSEE BY THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009-10 IN I.T.A NOS. 1798 & 2161/KOL/2014 DATED 25.10.2017. THE RELEVANT PORTIO N HAS ALREADY BEEN REPRODUCED ELSEWHERE IN THIS ORDER. THE SAME ARE NOT REPRODUCE D HERE FOR THE SAKE OF BREVITY. ACCORDINGLY, GROUND NO. 5 RAISED BY REVENUE IS DISM ISSED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 14.02.2018 SD/- SD/- [S.S. VISWANETHRA RAVI] [ M.BAL AGANESH ] JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 14.02.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. HINDUSTAN GUM & CHEMICALS LTD., BIRLA BUILDING, 4 TH FLOOR, 9/1, R.N. MUKHERJEE ROAD, KOLKATA-700001. 2. DCIT, CIRCLE-12(1), KOLKATA, AAYAKAR BHAWAN, 7 TH FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKATA-700069. 3..C.I.T.- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S 20 ITA NOS.1410&1601/KOL/2016 HINDUSTAN GUM & CHEMICALS LTD. A.YR. 2010-11 20