Gujarat State Financial Corporation, V. The JT. CIT., Spl. Range-7,

ITA 1607/AHD/2004

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6216 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 22-06-2011
• Assessment Year: 1998-1999
• Appeal Filed On: 13-05-2004
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KARTAR SINGH
• Assessee Lawyers: PF JAIN
• Keywords: Capital asset; Depreciation; Rule of consistency; Bad and doubtful debts; Revenue expenditure; Capital expenditure
• Section: 143(3); 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI G. D. AGARWAL, VP AND BHAVNESH SAINI , JM) ITA NO.1607/AHD/2004 A. Y.: 1998-99 GUJARAT STATE FERTILIZER CORPORATION LTD., BLOCK NO.10, SECTOR 11, UDHYOG BHAVAN, GANDHINAGAR 382 011 VS THE J. C. I. T., SPECIAL RANGE-4, AHMEDABAD PA NO. AABCG 2924 M (APPELLANT) (RESPONDENT) APPELLANT BY SHRI P. F. JAIN, AR RESPONDENT BY SHRI KARTAR SINGH, DR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-IX , AHMEDABAD DATED 16-02-2004, FOR ASSESSMENT YEAR 1998-99. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES AND PERUSED THE FINDINGS OF THE AUTHORITIES BELOW. 3. GROUND NO.1 OF APPEAL OF THE ASSESSEE IS GENERAL AND IS DISMISSED AS SUCH. 4. ON GROUNDS NO.2 TO 4 OF THE APPEAL, THE ASSESSEE CHALLENGED THE ORDER OF THE LEARNED CIT(A) IN CONFIRMING DISAL LOWANCE MADE BY THE AO IN RESPECT OF PROVISIONS MADE U/S 36(1) (VII A) OF THE IT ACT FOR BAD AND DOUBTFUL DEBTS OF RS.46,33,450/-. THE AO NO TED IN THE ITA NO.1607/AHD/2004 G. S. F. C. VS JCIT, SR-1, AHMEDABAD 2 ASSESSMENT ORDER THAT RETURN WAS PROCESSED U/S 143( 1) (A) OF THE IT ACT BY MAKING PRIMA FACIE ADJUSTMENT OF RS.46,33,45 0/- ON 19-02-1999 ON ACCOUNT OF DISALLOWANCE OF CLAIM OF B AD DEBTS RESTRICTED TO THE EXTENT OF RESERVE CREATED FOR BAD DEBTS AS THE ASSESSEE WAS GETTING DOUBLE DEDUCTION BY WAY OF CLA IMING RESERVE U/S 36 (1) (VIIA) OF THE IT ACT AND BY WAY OF CLAIM ING BAD DEBTS. IT WAS SUBMITTED BEFORE THE AO THAT RESERVE U/S 36 (1) (VI IA) OF THE IT ACT WAS CREATED ONLY ON 31-03-1998 AND THE AMOUNTS WRIT TEN OFF AS BAD DEBTS WERE WRITTEN OFF DURING THE YEAR AND THEREFOR E, THE CLAIM OF THE BAD DEBTS CANNOT BE RESTRICTED BY THE AMOUNT OF RES ERVE CREATED U/S 36(1) (VIIA) OF THE IT ACT. THE AO NOTED THAT SIMIL AR ISSUE WAS INVOLVED IN THE ASSESSEES OWN CASE IN EARLIER YEAR S AND THE DISALLOWANCE WAS MADE THEREOF BY DISALLOWING THE CL AIM OF BAD DEBTS TO THE EXTENT OF RESERVE U/S 36 (1) (VIIA) OF THE I T ACT WAS CREATED BY THE ASSESSEE. THE ADDITION MADE ON THIS ACCOUNT IS SUSTAINED BY THE FIRST APPELLATE AUTHORITY. IN THE EARLIER YEARS ALS O THE BAD DEBTS CLAIM TO THE EXTENT OF RESERVE CREATED DURING THE YEAR WA S DISALLOWED. THE SAME FACTS ARE APPLICABLE IN THE YEAR UNDER CONSIDE RATION. FURTHER, AS CLAIMED BY THE ASSESSEE, THE RESERVE U/S 36(1) (VII A) OF THE IT ACT WAS CREATED ON 31-03-1998, BUT THE DATE 31-03-1998 IS ALSO COVERED BY THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL I.E. ASSESSMENT YEAR 1998-99. THE AO, THEREFORE, DID NOT FIND ANY FORCE IN THE CONTENTION OF THE ASSESSEE AND THEREFORE, CL AIM OF THE ASSESSEE OF BAD DEBTS WAS DISALLOWED TO THE EXTENT OF RESERVE CREATED U/S 36 (1) (VIIA) OF THE IT ACT DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL I.E. RS. 46,33,450/- A ND THE SAME WAS ADDED TO THE INCOME OF THE ASSESSEE WHICH WAS ALREA DY DISALLOWED ITA NO.1607/AHD/2004 G. S. F. C. VS JCIT, SR-1, AHMEDABAD 3 U/S 143(1) (A) OF THE IT ACT DATED 19-02-1999 AND T HE SIMILAR DISALLOWANCES WERE RETAINED IN THE ASSESSMENT ORDER NOW PASSED U/S 143(3) OF THE IT ACT. THE ASSESSEE OBJECTED TO THE DISALLOWANCE OF CLAIM FOR PROVISION MADE FOR BAD AND DOUBTFUL DEBTS AT RS.46,33,450/- BEFORE THE LEARNED CIT(A). THE LEARNED CIT(A) NOTED THAT THE REASONS FOR DISALLOWANCE AND ARGUMENTS AND FACTS ARE SAME W HICH HAVE BEEN EXACTLY SIMILARLY CONSIDERED IN THE PRECEDING ASSES SMENT YEAR 1997- 98. THE LEARNED CIT(A) NOTED THAT IN THE PRECEDING ASSESSMENT YEAR 1997-98, THE LEARNED CIT(A) VIDE ORDER DATED 16-02- 2004 JUSTIFIED THE DISALLOWANCE. ACCORDINGLY, IT WAS HELD THAT DISALLO WANCE IS JUSTIFIED BEING DOUBLE DEDUCTION CLAIMED WHICH IS NOT PERMISS IBLE UNDER THE PROVISO TO SECTION 36(1) (VII) READ WITH SECTION 36 (1) (VIIA) OF THE IT ACT. THE APPEAL OF THE ASSESSEE WAS ACCORDINGLY DIS MISSED. 5. THE LEARNED COUNSEL FOR THE ASSESSEE ADMITTED TH AT IN THE PRECEDING ASSESSMENT YEAR 1997-98 THE TRIBUNAL ALSO CONFIRMED THE ADDITION IN ITA NO.1606/AHD/2004 VIDE ORDER DATED 1 4-05-2010 BECAUSE THIS GROUND WAS NOT PRESSED BEFORE THE TRIB UNAL. THE LEARNED COUNSEL FOR THE ASSESSEE HOWEVER, SUBMITTED THAT SINCE THE FACTS ARE NOT AVAILABLE ON RECORD, THEREFORE, THE M ATTER MAY BE REMANDED TO THE FILE OF THE AO FOR RECONSIDERATION IN THE LIGHT OF THE DECISIONS OF ITAT MUMBAI BENCH IN THE CASE OF OMAN INTERNATIONAL AND BANK SAOG VS DCIT, 92 ITD 76 AND ITAT DELHI BEN CH IN THE CASE OF TOURISM FINANCE CORPORATION OF INDIA LTD. V S CJIT 2 ITR (TRIB.) 1. ITA NO.1607/AHD/2004 G. S. F. C. VS JCIT, SR-1, AHMEDABAD 4 6. ON THE OTHER HAND, THE LEARNED DR RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE C LAIMED DOUBLE DEDUCTION WHICH IS CORRECTLY DENIED BY THE AUTHORIT IES BELOW BY APPLYING PROVISO TO SECTION 36(1) (VII) OF THE IT A CT. THE LEARNED DR SUBMITTED THAT THE ASSESSEE HAS NOT FILED ANY DETAI LS AND FACTS ON THIS ISSUE IN THE PAPER BOOK AS WELL AS BEFORE THE AUTHO RITIES BELOW; THEREFORE, THERE IS NO JUSTIFICATION TO SET ASIDE T HE MATTER TO THE FILE OF THE AO. THE LEARNED DR FURTHER SUBMITTED THAT SINCE THIS ADDITION IS RETAINED ON THE BASIS OF DISALLOWANCE MADE U/S 143( 1) (A) OF THE IT ACT, THEREFORE, THE ASSESSEE SHOULD ALSO BRING ON R ECORD AS TO WHAT HAPPENED AFTER PASSING ORDER BY THE LEARNED CIT(A) AGAINST THAT ORDER/PROCESSING VIDE ORDER DATED 12-03-2001 MENTIO NED AT PAGE 2 OF THE APPELLATE ORDER. THE LEARNED DR, THEREFORE, SUB MITTED THAT IN THE ABSENCE OF ANY FACTS AND DETAILS ON RECORD, THE ISS UE BEING SIMILAR WITH THE ASSESSMENT YEAR 1997-98 IN WHICH THE TRIBU NAL ALSO DISMISSED THE APPEAL OF THE ASSESSEE, THE APPEAL OF THE ASSESSEE ON THESE GROUNDS MAY BE DISMISSED. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDERS OF THE A UTHORITIES BELOW. THE AO HAS SPECIFICALLY NOTED THAT SIMILAR DISALLOWANCE IS MADE WHILE PROCESSING THE RETURN U/S 143 (1) (A) OF THE IT ACT , BECAUSE THE ASSESSEE HAS CLAIMED DOUBLE DEDUCTION. THE LEARNED CIT(A) NOTED AT PAGE 2 OF THE APPELLATE ORDER THAT SUCH PROCESSING WAS SUBJECTED TO APPEAL BEFORE THE LEARNED CIT(A) WHICH WAS DECIDED BY HIM VIDE ORDER DATED 12-03-2001 IN WHICH CERTAIN DIRECTIONS HAVE BEEN ISSUED BY THE LEARNED CIT(A). NOTHING IS EXPLAINED BY THE LEARNED COUNSEL ITA NO.1607/AHD/2004 G. S. F. C. VS JCIT, SR-1, AHMEDABAD 5 FOR THE ASSESSEE WHETHER THE ORDER OF THE LEARNED C IT(A) AGAINST PROCESSING OF THE RETURN U/S 143 (1) (A) OF THE IT ACT HAVE BECOME FINAL OR SUBJECTED TO FURTHER APPEAL BEFORE THE HIG HER FORUM. THIS ADDITION IS RETAINED ON THE BASIS OF THE PROCESSING MADE U/S 143 (1) (A) OF THE IT ACT. SINCE, THE PROCESSING U/S 143 (1 ) (A) OF THE IT ACT WHERE THIS CLAIM WAS DISALLOWED REMAINED SUBJECT MA TTER IN APPEAL BEFORE THE LEARNED CIT(A), THEREFORE THE ASSESSEE S HALL HAVE TO BRING SOME RECORD BEFORE US TO SHOW THAT THE FINDING OF T HE TRIBUNAL IN THE PRESENT APPEAL WOULD NOT EFFECT ADVERSELY THE CASE OF THE REVENUE. IN THE ABSENCE OF ANY MATERIAL ON RECORD, NOTHING IS C LARIFIED BY THE ASSESSEES COUNSEL. FURTHER, IT IS A FACT THAT THE ISSUE IS EXACTLY SAME WHICH WAS CONSIDERED IN EARLIER YEARS INCLUDING ASS ESSMENT YEAR 1997-98 IN WHICH SIMILAR CLAIM OF THE ASSESSEE WAS DISALLOWED. THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL IN TH E PRECEDING ASSESSMENT YEAR 1997-98 IN ITA NO.1606/AHD/2004 (SU PRA) AND THIS GROUND WAS DISMISSED BY THE TRIBUNAL BEING NOT PRES SED BY THE LEARNED COUNSEL FOR THE ASSESSEE. THEREFORE, THE FI NDING OF FACT IN THE PRECEDING ASSESSMENT YEAR ON THE SIMILAR ISSUE HAS BECOME FINAL AND AS SUCH ON THE BASIS OF RULE OF CONSISTENCY, THE AS SESSEE WOULD NOT BE ENTITLED FOR ANY FURTHER RELIEF ON THE MATER IN ISSUE UNLESS THE SOME FACTS, EVIDENCES AND MATERIAL HAVE BEEN BROUGHT ON RECORD TO CONTRADICT THE FINDINGS OF THE AUTHORITIES BELOW. T HE LEARNED COUNSEL FOR THE ASSESSEE HOWEVER, DID NOT BRING ANY MATERIA L ON RECORD TO CONTRADICT THE FINDINGS OF THE AUTHORITIES BELOW. H E HAS MERELY RELIED UPON SOME DECISIONS OF THE TRIBUNAL WHICH COULD BE CONSIDERED IF THE ASSESSEE COULD HAVE BROUGHT SOME EVIDENCE AND MATER IAL ON RECORD. THE DECISIONS CAN BE APPLIED AGAINST THE FACTS OF T HE CASE. IN THE ITA NO.1607/AHD/2004 G. S. F. C. VS JCIT, SR-1, AHMEDABAD 6 ABSENCE OF ANY MATERIAL OR EVIDENCE TO EXPLAIN THIS ISSUE, WE DO NOT FIND IT PROPER TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW. IN THE RESULT, GROUNDS NO.2 TO 4 OF THE APPEAL OF THE ASSESSEE ARE DISMISSED. 8. ON GROUNDS NO.5 TO 8 OF THE APPEAL, THE ASSESSEE CHALLENGED THE ORDER OF THE LEARNED CIT(A) IN RESTRICTING THE CLAIM OF DEPRECIATION TO 25% OF THE COST OF MACHINERIES INSTEAD OF 100% O N THE LEASED ASSETS. THE LEARNED CIT(A) NOTED THAT THIS ISSUE IS DISCUSSED BY THE AO AT LENGTH ON PAGES 3 TO 10 OF THE ASSESSMENT ORD ER. THE ASSESSEE CLAIMED THAT MACHINERIES WHICH HAD BEEN LE ASED TO M/S. VESPAR FISCHER LTD. AT RS.1,50,00,000/-, TO M/S. VE SPAR CONTAINERS LTD. AT RS.1,49,37,229/-, TO M/S. KRISHNA PLASTOCH EM LTD. AT RS.72,00,000/- AND TO M/S. AMBUJA INTERMEDIATES LTD . AT RS.60,26,193/- AND WERE ELIGIBLE FOR DEPRECIATION @ 100% BEING MACHINERIES FALLING UNDER ITEMS PROVIDED IN APPENDI X-I. THE AO HAS FOUND THIS CLAIM TO BE INELIGIBLE ON THE GROUND THA T FIRST TWO CONCERNS HAVE BEEN GIVEN LEASED MACHINERIES FOR ROLLING STEE L ROLLS WHICH ARE ELIGIBLE TO BE GRANTED 100% DEPRECIATION AND THEREF ORE, THE CLAIM IS INADMISSIBLE. THE LEARNED CIT(A) RECORDED THE SUBMI SSION OF THE ASSESSEE AND UPHELD THE ORDER OF THE AO FOR GRANTIN G NOMINAL DEPRECIATION. 9. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT NO BILLS ARE AVAILABLE WITH THE ASSESSEE ON THIS ISSUE AND A S SUCH HE IS NOT IN A POSITION TO EXPLAIN THIS ISSUE. HE HAS HOWEVER, S UBMITTED THAT DEPRECIATION MAY BE ALLOWED ON WRITTEN DOWN VALUE O F THE ITA NO.1607/AHD/2004 G. S. F. C. VS JCIT, SR-1, AHMEDABAD 7 MACHINERIES AS PER LAW. THE LEARNED DR DID NOT DISP UTE THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE. 10. ON CONSIDERATION OF THE FACTS IN THE LIGHT OF T HE SUBMISSIONS OF THE PARTIES, WE DO NOT FIND MERIT IN THESE GROUNDS OF APPEAL OF THE ASSESSEE. WE ACCORDINGLY, DISMISS GROUNDS NO. 5 TO 8 OF THE APPEAL OF THE ASSESSEE. HOWEVER, THE AO IS DIRECTED TO GRA NT DEPRECIATION ON THE WRITTEN DOWN VALUE OF THE MACHINERIES AS PER LA W. WITH THE ABOVE OBSERVATIONS THESE GROUNDS OF APPEAL OF THE ASSESSE E ARE DISMISSED. 11. ON GROUNDS NO.9 AND 10 OF THE APPEAL, THE ASSES SEE CHALLENGED THE ORDER OF THE LEARNED CIT(A) IN DISAL LOWING RS.25,00,000/- BEING CONTRIBUTION MADE TO INDEX-B F OR CONSTRUCTION OF INVESTORS FRIENDLY CENTRE OF INDEX TAB CONSIDERING IT TO BE A CAPITAL EXPENDITURE. THE AO DISALLOWED THE CLAIM OF THE ASS ESSEE CONSIDERING THE EXPENDITURE TO BE CAPITAL IN NATURE . THE ASSESSEE EXPLAINED THAT INDEX-B WAS A STAGE GOVERNMENT BODY ESTABLISHED BY THE GOVERNMENT OF GUJARAT FOR PROVIDING INDUSTRIAL INFORMATION TO PUBLIC IN RESPECT OF ESTABLISHMENT AND AVAILABILITY OF LOAN TO VARIOUS INDUSTRIES AND ALSO PROVIDING COMPUTER SERVICES TO VARIOUS GOVERNMENT CORPORATIONS. TOTAL EXPENDITURE OF INDEX -B IS TO BE BORNE BY VARIOUS GOVERNMENT CORPORATION AND THE ASSESSEE S CONTRIBUTION WAS RS.68,50,000/- INCLUSIVE OF CONTRIBUTION OF RS. 25,00,000/- FOR CONTRIBUTION TOWARDS CONSTRUCTION OF INVESTOR FRIEN DLY OFFICE AT INDEX- B TO MEET INVESTORS AND CHAIRMANS SECRETARY. BY CO NTRIBUTING RS.25,00,000/- TO INDEX-B FOR CONSTRUCTION OF INVES TOR FRIENDLY CENTRE, NO CAPITAL ASSET IS CREATED IN FAVOUR OF THE ASSESS EE CORPORATION. THE ITA NO.1607/AHD/2004 G. S. F. C. VS JCIT, SR-1, AHMEDABAD 8 CONTRIBUTION IS MADE TO THIRD PARTY WHICH CANNOT PR OVIDE ANY ENDURING BENEFIT TO THE ASSESSEE, IT WAS THEREFORE, CLAIMED AS REVENUE EXPENDITURE. THE LEARNED CIT(A) HOWEVER, REJECTED THE CLAIM OF THE ASSESSEE. 12. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND S UBMITTED THAT IDENTICAL ISSUE CAME FOR CONSIDERATION BEFORE ITAT AHMEDABAD BENCH IN THE CASE OF THE SAME ASSESSEE IN ASSESSMEN T YEAR 2001-02 IN ITA NO.2909/AHD/2004 AND CLAIM OF THE ASSESSEE T OWARDS CONTRIBUTION OF CED WAS ALLOWED BY THE TRIBUNAL VID E ORDER DATED 29 TH APRIL, 2009. COPY OF THE ORDER IS FILED ON RECORD. HE HAS ALSO RELIED ON THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS RAJ SPINNING AND WEAVING MILLS LTD., 272 ITR 487. O N THE OTHER HAND, THE LEARNED DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE H ONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS RAJ SPIN NING AND WEAVING MILLS LTD., 272 ITR 487 HELD AS UNDER: HELD, THAT BY INCURRING EXPENDITURE FOR CONSTRUCTION OF BUILDING FOR THE INSTITUTE, THE PRO FIT MAKING APPARATUS OF THE ASSESSEE WAS NOT EXPANDED. ITS INCOME EARNING MACHINERY REMAINED THE SAME. THE ASSESSEE HAD, BY CONTRIBUTING TO THE CONSTRUCTION OF THE BUILDING ONLY FACILITATED THE TRAINING OF ITS WORKERS AT HAND WITHOUT NECESSITATI NG THEIR TRAINING AT A DISTANCE CAUSING MORE EXPENSE O F TIME AND MONEY. THEREFORE IT COULD NOT BE SAID THAT THE ASSESSEE ACQUIRED ANY ENDURING BENEFIT IN THE CAPITAL FIELD. THE EXPENSES INCURRED BY THE ASSESSE E ITA NO.1607/AHD/2004 G. S. F. C. VS JCIT, SR-1, AHMEDABAD 9 TOWARDS CONSTRUCTION OF THE BUILDING FOR THE INSTITUTION WERE EXPENSES WHOLLY AND EXCLUSIVEL8Y INCURRED FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE AND WERE NOT IN THE NATURE OF CAPITAL EXPENDITURE. THEREFORE, THEY WERE ALLOWABLE AS REVENUE EXPENSES UNDER SECTION 37(1) OF THE INCOME- TAX ACT, 1961. 13.1 ITAT AHMEDABAD BENCH IN THE CASE OF THE SAME A SSESSEE IN ASSESSMENT YEAR 2001-02 (SUPRA) CONSIDERED THE SIMI LAR ISSUE IN WHICH ASSESSEE CONTRIBUTED RS.5,00,000/- TO CENTER FOR ENTREPRENEURS DEVELOPMENT (CED) ESTABLISHED BY STAT E GOVERNMENT AND THE TRIBUNAL HELD THAT THE EXPENDITURE AS REVEN UE IN NATURE. ADDITION WAS DELETED AND CLAIM OF THE ASSESSEE WAS ALLOWED. THE FACTS ARE SAME AS HAVE BEEN CONSIDERED ABOVE. IN TH E ASSESSMENT YEAR UNDER APPEAL, THE ASSESSEE HAS SIMILARLY CONTR IBUTED THE AMOUNT IN QUESTION TO INDEX-B WHICH IS ESTABLISHED BY THE GOVERNMENT OF GUJARAT FOR PROVIDING INDUSTRIAL INFORMATION TO THE PUBLIC. NO CAPITAL ASSET IS CREATED IN FAVOUR OF THE ASSESSEE CORPORAT ION. IF ANY CAPITAL IS CREATED THAT IS CREATED FOR INDEX-B. THE ASSESSE E WOULD NOT GET ANY ENDURING BENEFIT FOR THE PURPOSE OF ITS BUSINESS. I N ANOTHER YEAR THE TRIBUNAL HAS ALREADY ALLOWED THE CLAIM OF THE ASSES SEE CONSIDERING IT TO BE REVENUE EXPENDITURE CONNECTED WITH THE BUSINE SS ACTIVITIES OF THE ASSESSEE. CONSIDERING THE ABOVE FACTS, WE FIND THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ABOVE JUDG MENT. WE ACCORDINGLY, HOLD THAT THE EXPENDITURE IS REVENUE I N NATURE AND WHOLLY AND EXCLUSIVELY INCURRED FOR THE PURPOSE OF BUSINES S OF THE ASSESSEE. SAME IS ALLOWABLE DEDUCTION. WE ACCORDINGLY, SET AS IDE THE ORDERS OF ITA NO.1607/AHD/2004 G. S. F. C. VS JCIT, SR-1, AHMEDABAD 10 THE AUTHORITIES BELOW AND DELETE THE ADDITION. IN T HE RESULT, GROUNDS NO.9 AND 10 OF THE APPEAL OF THE ASSESSEE ARE ALLOW ED. 14. THE ASSESSEE RAISED ADDITIONAL GROUND OF APPEAL CHALLENGING LEVY OF ADDITIONAL TAX WHICH WAS LEVIED U/S 143 (1) (A) OF THE IT ACT AND RETAINED IN THE PRESENT ASSESSMENT ORDER. THE L EARNED CIT(A) NOTED THAT NO SPECIFIC ARGUMENTS HAVE BEEN ADVANCED IN SUPPORT OF THIS GROUND. THE LEARNED CIT(A) ALSO FOUND FROM THE RECORDS THAT VIDE HIS APPELLATE ORDER DATED 12-03-2001 AGAINST THE OR DER U/S 143(1) (A) OF THE IT ACT, THE LEARNED CIT(A) HAD ISSUED CERTAI N DIRECTIONS IN THIS REGARD. THE AO WAS, THEREFORE, DIRECTED TO RE-CALCU LATE THE TOTAL INCOME BEGINNING FROM REVISED INCOME WITH REFERENCE TO INTIMATION U/S 143 (1) (A) OF THE IT ACT AFTER GIVING APPEAL E FFECT TO THE ORDER DATED 12-03-2001. 15. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ITAT AHMEDABAD BENCH IN ASSESSMENT YEAR 1997-98 IN ITA NO.1606/AHD/2004 (SUPRA) RESTORED THIS ISSUE TO THE FILE OF THE LEARNED CIT(A) FOR RE-DECIDING THE SAME. HE HAS, TH EREFORE, SUBMITTED THAT THE MATTER MAY BE REMANDED TO THE FILE OF THE LEARNED CIT(A) FOR FRESH ADJUDICATION BY ADMITTING THE ADDITIONAL GROU ND. 16. ON CONSIDERATION OF THE ABOVE FACTS, WE FIND TH AT IN THE PRECEDING ASSESSMENT YEAR 1997-98 THE TRIBUNAL NOTE D IN THE ORDER THAT THIS ISSUE IS ALREADY DECIDED BY THE LEARNED C IT(A) IN THE PROCEEDINGS U/S 143 (1) (A) OF THE IT ACT. HOWEVER, LATER ON IT WAS FOUND THAT THE ISSUE OF ADDITIONAL TAX WAS NOWHERE ADJUDICATED. THEREFORE, THIS ISSUE WAS RESORTED TO THE FILE OF T HE LEARNED CIT(A) FOR ITA NO.1607/AHD/2004 G. S. F. C. VS JCIT, SR-1, AHMEDABAD 11 RE-DECIDING THE SAME IN ACCORDANCE WITH LAW. HOWEVE R, WE FIND THAT ASSESSEES COUNSEL HAS NOT BROUGHT ANY MATERIAL ON RECORD. EVEN, THE ORDER OF THE LEARNED CIT(A) DATED 12-03-2001 IS NOT PRODUCED BEFORE US FOR PERUSAL. NOTHING IS CLARIFIED WHETHER THIS ORDER OF THE LEARNED CIT(A) HAS REACHED FINALITY OR NOT AND WHAT ARE THE DIRECTIONS GIVEN THEREOF. IN THE ABSENCE OF ANY MATERIAL ON R ECORD, THE FINDING OF THE LEARNED CIT(A) CANNOT BE TAKEN WRONG ON THE FA CE OF IT. IN THE A ASSESSMENT YEAR 1997-98 THE TRIBUNAL ON GOING THROU GH THE ORDER OF THE EARNED CIT(A) ON PROCESSING OF THE RETURN U/S 1 43(1) (A) OF THE IT ACT NOTED THAT THIS ISSUE WAS NOT DECIDED THEREIN, IN THE PROCESSING US/ 143(1) (A) OF THE IT ACT. THE FACTS ARE, THEREF ORE, NOT SIMILAR. ACCORDINGLY, IN THE ABSENCE OF ANY EVIDENCE OR MATE RIAL ON RECORD, WE DO NOT FIND ANY JUSTIFICATION TO ADMIT THE ADDITION AL GROUND OF APPEAL RAISED BY THE ASSESSEE. THE SAME ARE ACCORDINGLY DI SMISSED. 17. NO OTHER POINT IS ARGUED OR PRESSED. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED AS INDICATED ABOVE ORDER PRONOUNCED IN THE OPEN COURT ON 30-06-2011 SD/- SD/- (G. D. AGARWAL) VICE PRESIDENT (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 30-06-2011 LAKSHMIKANT/- ITA NO.1607/AHD/2004 G. S. F. C. VS JCIT, SR-1, AHMEDABAD 12 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD