ACIT, Circle-10(2), Kolkata, Kolkata V. M/s Eastern Silk Industries Ltd., Kolkata

ITA 1739/KOL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7524 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-06-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 31-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C J SINGH
• Assessee Lawyers: MANISH TIWARI
• Keywords: Capital asset; Business expenditure; Earning of tax free income; Competent authority; Revised return; Revenue expenditure; Capital expenditure; Rule 8D
• Section: 14A

Judgement Text

ITA NO. 1739/KOL/2016 ASSESSMENT YEAR: 2011-2012 & ITA NO. 1071/KOL/2017 ASSESSMENT YEAR: 2010-2011 M/S. EASTERN SILK INDUSTRIES LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 1739/KOL/2016 ASSESSMENT YEAR: 2011-2012 & I.T.A. NO. 1071/KOL/2017 ASSESSMENT YEAR: 2010-2011 ASSISTANT COMMISSIONER OF INCOME TAX,.............. .................... APPELLANT CIRCLE-10(2), KOLKATA, AAYAKAR BHAWAN, 3 RD FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 -VS.- M/S. EASTERN SILK INDUSTRIES LIMITED,.............. ..................... RESPONDENT 19, R.N. MUKHERJEE ROAD, KOLKATA-700 001 [PAN: AAACE5807C] APPEARANCES BY: SHRI C.J. SINGH, JCIT, SR. D.R , FOR THE APPELLANT SHRI MANISH TIWARI, FCA, FOR THE RESPONDEN T DATE OF CONCLUDING THE HEARING : JUNE 18, 2019 DATE OF PRONOUNCING THE ORDER : JULY 26, 2019 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ):- THESE TWO APPEALS FILED BY THE REVENUE ARE DIRECTE D AGAINST TWO SEPARATE ORDERS PASSED BY THE LD. COMMISSIONER OF I NCOME TAX (APPEALS)- 4, KOLKATA DATED 27.05.2016 AND BY LD. CIT(APPEALS) -15, KOLKATA DATED 07.03.2017 FOR ASSESSMENT YEARS 2011-12 AND 2010-11 RESPECTIVELY AND SINCE SOME OF THE ISSUES RAISED THEREIN ARE COMMON, THE SAME HAVE BEEN ITA NO. 1739/KOL/2016 ASSESSMENT YEAR: 2011-2012 & ITA NO. 1071/KOL/2017 ASSESSMENT YEAR: 2010-2011 M/S. EASTERN SILK INDUSTRIES LIMITED 2 HEARD TOGETHER AND ARE BEING DISPOSED OF BY A SINGL E CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST WE SHALL TAKE UP THE APPEAL OF THE REVENUE FOR A.Y. 2011-12 BEING ITA NO. 1739/KOL/2016 , WHICH IS DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-4, KOLKATA DATED 27.05.2016. 3. IT IS NOTED THAT THERE IS A DELAY OF 22 DAYS ON THE PART OF THE REVENUE IN FILING THIS APPEAL BEFORE THE TRIBUNAL. IN THIS REGARD, THE REVENUE HAS FILED AN APPLICATION SEEKING CONDONATIO N OF THE SAID DELAY AND KEEPING IN VIEW THE REASONS GIVEN THEREIN, WE A RE SATISFIED THAT THERE WAS A SUFFICIENT CAUSE FOR THE DELAY OF 22 DAYS ON THE PART OF THE REVENUE IN FILING THIS APPEAL BEFORE THE TRIBUNAL. EVEN THE LD. COUNSEL FOR THE ASSESSEE HAS NOT RAISED ANY OBJECTION IN THIS REGAR D. THE DELAY OF 22 DAYS IN FILING THIS APPEAL BY THE REVENUE IS ACCORDINGLY CONDONED AND THIS APPEAL OF THE REVENUE IS BEING DISPOSED OF ON MERIT . 4. GROUNDS NO. 1 TO 5 (REVISED) INVOLVE THE INTER-L INKED ISSUES RELATING TO THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SE CTION 35(1)(IV) AND SECTION 35(2AB) OF THE INCOME TAX ACT, 1961 AND THE SAME READ AS UNDER:- 1. THAT THE LD. CIT(A) WAS ERRED IN ALLOWING FRESH ALTERNATIVE CLAIM IN RESPECT OF CAPITAL EXPENDITURE AMOUNTING TO RS.8,06,080/- ON ACCOUNT OF CONSTRUCTI ON OF LABORATORY BUILDING U/S. 35(1)(IV) OF THE INCOME TA X ACT.1961 WHERE THE SAME HAS BEEN OTHERWISE CLAIMED UNDER THE SECTION 35(2AB) OF THE INCOME TAX ACT.1961 IN T HE ITR. 2. THAT THE LD. CIT(A) WAS ERRED IN ALLOWING THE CL AIM OF WEIGHTED DEDUCTION OF RS.2,59,90,238/- @ 200% OF AC TUAL EXPENDITURE ON ACCOUNT OF REVENUE EXPENDITURE WHERE THE ASSESSEE ITSELF HAS ADMITTED THAT IT WAS NOT ELIGIB LE FOR DEDUCTION @ 200% ON SUCH EXPENDITURE. 3. THAT THE LD. CIT(A) WAS ERRED IN HOLDING THE IMP UGNED REVENUE EXPENDITURE OF RS.2,59,90,238/- ELIGIBLE FO R DEDUCTION U/S. 35(2AB) OF THE INCOME TAX ACT.I961 C ONTRARY ITA NO. 1739/KOL/2016 ASSESSMENT YEAR: 2011-2012 & ITA NO. 1071/KOL/2017 ASSESSMENT YEAR: 2010-2011 M/S. EASTERN SILK INDUSTRIES LIMITED 3 TO THE MERITS OF THE ORDER OF APPROVAL IN FORM NO. 3CM ISSUED BY THE DSIR. 4. THAT THE LD. CIT(A) HAS ERRED IN ALLOWING DEDUCT ION U/S. 35(2AB) OF THE INCOME TAX ACT,1961 IGNORING THE ORD ER OF APPROVAL IN FORM NO. 3CM ISSUED BY THE DS1R, WHICH SPEAKS VOLUME THAT THE APPROVAL OF THE SCHEME WAS ONLY FOR THE PURPOSE OF CAPITAL EXPENDITURE ON RESEARCH AND DEVE LOPMENT FACILITY. 5. THAT THE LD. CIT(A) HAS ERRED IN PLACING HIS REL IANCE UPON THE JUDGEMENT OF THE HON'BLE GUJRAT HIGH COURT IN C IT VS. CLARIS LIFE SCIENCE LTD.[2010] 326 ITR 251 (GUJ.), WHICH SPEAKS ABOUT THE ALLOWABILITY OF DEDUCTION OF EXPEN DITURES U/S. 35(2AB) OF THE ACT PRIOR TO THE DATE OF CERTIF ICATE OF THE DSIR DISSUADING FROM THE CORE ISSUE OF ALLOWABILITY OF THE NATURE OF EXPENDITURE. 5. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING, EXPORT AND IMPORT OF SILK FABRICS. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION, I.E. A.Y. 2011-12 WAS FILED BY IT ON 29.09.2011 DECLARING TOTAL INCOME OF RS.50,07,79,683/-. IN THE SAID RETURN, WEIGHTED DEDUCTION AT 200% WAS CLA IMED BY THE ASSESSEE UNDER SECTION 35(2AB) OF THE ACT IN RESPECT OF CAPI TAL EXPENDITURE OF RS.16,57,628/- AND REVENUE EXPENDITURE OF RS.2,59,9 0,238/- INCURRED ON SCIENTIFIC RESEARCH. FROM THE PERUSAL OF THE RELEVA NT DETAILS OF THE SAID EXPENDITURE FURNISHED BY THE ASSESSEE, IT WAS FOUND BY THE ASSESSING OFFICER THAT THE CAPITAL EXPENDITURE CLAIMED BY THE ASSESSEE WAS INCLUSIVE OF THE EXPENDITURE OF RS.8,06,080/- INCURRED ON CON STRUCTION COST OF THE LABORATORY BUILDING. KEEPING IN VIEW THE SPECIFIC P ROVISIONS CONTAINED IN SECTION 35(2AB), THE ASSESSING OFFICER DISALLOWED T HE CLAIM OF THE ASSESSEE FOR WEIGHTED DEDUCTION UNDER SECTION 35(2A B) IN RESPECT OF THE SAID EXPENDITURE INCURRED ON CONSTRUCTION OF LABORA TORY BUILDING. THE ASSESSING OFFICER ALSO FOUND FROM THE PERUSAL OF FO RM NO. 3CM ISSUED BY THE MINISTRY OF SCIENCE & TECHNOLOGY, DEPARTMENT OF SCIENTIFIC & INDUSTRIAL RESEARCH, GOVERNMENT OF INDIA (COMPETENT AUTHORITY) THAT APPROVAL FOR THE PURPOSE OF DEDUCTION UNDER SECTION 35(2AB) WAS GRANTED ITA NO. 1739/KOL/2016 ASSESSMENT YEAR: 2011-2012 & ITA NO. 1071/KOL/2017 ASSESSMENT YEAR: 2010-2011 M/S. EASTERN SILK INDUSTRIES LIMITED 4 TO THE ASSESSEE ONLY TO THE EXTENT OF EXPENDITURE I NCURRED ON CAPITAL ASSETS FOR THE PURPOSE OF RESEARCH AND DEVELOPMENT FACILITIES, WHICH WAS OTHER THAN THE EXPENDITURE ON LAND AND BUILDING. HE ACCORDINGLY HELD THAT THE ASSESSEE WAS NOT ENTITLED TO CLAIM WEIGHTED DED UCTION @ 200% IN RESPECT OF THE REVENUE EXPENDITURE OF RS.2,59,90,23 8/- INCURRED ON SCIENTIFIC RESEARCH. HE ACCORDINGLY DISALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 35(2AB) TO THE EXTENT O F RS.2,76,02,398/- (RS.2,59,90,238/- + RS.16,12,160/-). HE ALSO DISALL OWED THE ALTERNATIVE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 3 5(1)(IV) OF THE ACT IN RESPECT OF CAPITAL EXPENDITURE OF RS.8,06,080/- INC URRED ON THE CONSTRUCTION OF LABORATORY BUILDING ON THE GROUND T HAT SUCH CLAIM WAS NOT MADE BY THE ASSESSEE EITHER IN THE RETURN OF IN COME ORIGINALLY FILED OR BY WAY OF FILING REVISED RETURN. TO ARRIVE AT THIS CONCLUSION, HE RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CA SE OF GOETZE (INDIA) LIMITED [284 ITR 323]. 6. THE DISALLOWANCE MADE BY THE ASSESSING OFFICER O N ACCOUNT OF ITS CLAIM FOR WEIGHTED DEDUCTION UNDER SECTION 35(2AB) AS WELL AS ITS ALTERNATIVE CLAIM FOR DEDUCTION UNDER SECTION 35(1) (IV) WAS CHALLENGED BY THE ASSESSEE IN THE APPEAL FILED BEFORE THE DL. CIT (APPEALS) AND AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE AS WELL AS THE MATERIAL AVAILABLE ON RECORD, THE LD. CIT(APPEALS) ALLOWED T HE ALTERNATIVE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 35(1)(IV) IN RESPECT OF EXPENDITURE OF RS.8,06,080/- INCURRED BY THE ASSESS EE ON THE CONSTRUCTION OF LABORATORY BUILDING FOR THE FOLLOWING REASONS GI VEN IN PARAGRAPH NO. 4.2 OF HIS IMPUGNED ORDER:- 4.2. I HAVE CONSIDERED THE ASSESSMENT ORDER AS WEL L AS THE SUBMISSIONS MADE BY THE AR OF THE APPELLANT. I FIND THAT THE APPELLANTS CLAIM FOR WEIGHTED DEDUCTION WITHIN THE MEANING OF SECTION 35(2AB) OF THE ACT HAS RIGHTLY B EEN DENIED BY AO. IN VIEW OF THE EXPRESS CONDITION SPEC IFIED IN THE SAID PROVISION ITSELF, I HOWEVER, DO NOT AGREE WITH THE VIEWS EXPRESSED BY AO TO DENY THE APPELLANT'S ALTER NATIVE ITA NO. 1739/KOL/2016 ASSESSMENT YEAR: 2011-2012 & ITA NO. 1071/KOL/2017 ASSESSMENT YEAR: 2010-2011 M/S. EASTERN SILK INDUSTRIES LIMITED 5 CLAIM FOR DEDUCTION U/S 35(1)(IV) @ 100% ON COST OF LAND AND BUILDING. RESPECTFULLY FOLLOWING THE DECISION O F THE HON'BLE ITAT, COCHIN BENCH IN THE CASE OF MERCHEM L TD. SUPRA, THE AO IS DIRECTED TO ALLOW DEDUCTION U/S 35 (1 )(IV) ON VALUE OF LAND AND LABORATORY BUILDING OF RS.8,06 ,080/-. THIS GROUND IS ACCORDINGLY ALLOWED. 7. KEEPING IN VIEW THAT ITS ALTERNATIVE CLAIM FOR D EDUCTION UNDER SECTION 35(1)(IV) WAS ALLOWED BY THE LD. CIT(APPEAL S) TO THE EXTENT OF RS.8,06,080/- BEING THE EXPENDITURE INCURRED ON THE COST OF LABORATORY BUILDING, THE ASSESSEE REVISED ITS CLAIM FOR DEDUCT ION UNDER SECTION 35(2AB) ONLY IN RESPECT OF REVENUE EXPENDITURE INCU RRED ON SCIENTIFIC RESEARCH AMOUNTING TO RS.2,59,90,238/- AND AFTER CO NSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE AS WELL AS THE MAT ERIAL AVAILABLE ON RECORD, THE LD. CIT(APPEALS) ALLOWED THE SAME FOR T HE FOLLOWING REASONS GIVEN IN PARAGRAPH NO. 5.2 AND 5.3 OF HIS IMPUGNED ORDER:- 5.2. I HAVE CONSIDERED THE ASSESSMENT ORDER AS WEL L AS THE WRITTEN SUBMISSIONS OF THE APPELLANT. I FIND THAT I N THE MEMO OF APPEAL, THE APPELLANT IS AGGRIEVED AGAINST DISAL LOWANCE OF RS.2,76,02,398/-. HOWEVER, THE APPELLANT REVISED TH E AMOUNT OF DISALLOWANCE AT RS.2,59,90,238/- AS PER RECONCIL IATION SHOWN AT ITEM 4. THE DISALLOWANCE OF RS.2,59,90,238 /- WHICH IS CONTESTED REFERS TO DENIAL OF WEIGHTED DEDUCTION @ 200% ON REVENUE EXPENDITURE INCURRED IN RESPECT OF TWO I N-HOUSE UNITS AT BANGALORE FACTORY OF THE APPELLANT. THE RE VENUE EXPENDITURE ON SCIENTIFIC RESEARCH AND DEVELOPMENT WORKS AMOUNTING TO RS.2,59,903/- WHICH IS DEBITED IN PROF IT & LOSS A/C HAVING BEEN ALLOWED BY AO, THE APPELLANT IS AGG RIEVED FOR WEIGHTED DEDUCTION EQUIVALENT TO IDENTICAL AMOU NT WHICH HAS BEEN REJECTED. 5.3. I HAVE PERUSED THE AUDIT REPORT OF THE CHARTER ED ACCOUNTANT CERTIFYING THE MAINTENANCE OF SEPARATE A CCOUNTS OF RESEARCH & DEVELOPMENT WORKS THROUGH TWO IN-HOUS E UNITS. THE REVENUE EXPENDITURE INCURRED UNDER DIFFE RENT HEADS AS CERTIFIED BY AUDITOR IS TABULATED AS FOLLO WS: UNIT-I UNIT-II TOTAL SALARY & WAGES (IN LACS) RS.29.11 RS.86.39 RS.115.50 MATERIALS CONSUMABLE STORES (IN RS. 18.61 RS.94.35 RS. 112.96 ITA NO. 1739/KOL/2016 ASSESSMENT YEAR: 2011-2012 & ITA NO. 1071/KOL/2017 ASSESSMENT YEAR: 2010-2011 M/S. EASTERN SILK INDUSTRIES LIMITED 6 LACS) ELECTRICITY - RS. 3.23 RS. 3.23 OTHER EXPENDITURE - RS. 28.21 RS. 28.21 TOTAL RS.47.72 RS.212.18 RS.259.90 I HAVE ALSO PERUSED FORM 3CM GRANTING APPROVAL OF I N-HOUSE RESEARCH & DEVELOPMENT FACILITY U/S 35(2AB) OF THE ACT W.E.F. 1ST APRIL 2009 UPTO 31ST MARCH 2012. THE SAID APPRO VAL SHOWS DATE OF ISSUE AS 28 TH OCTOBER 2011 AND DATE OF APPLICATION MADE AS 23RD MARCH 2011. THE AO APPEARS TO HAVE DEN IED WEIGHTED DEDUCTION ON REVENUE EXPENDITURE BY REFERR ING TO COMMENTS MADE BY DSIR AT THE CLOSE OF THE SAID APPR OVAL APPEARING UNDER BRACKET [ ]. IT IS CLEARLY MANIFEST ED THAT THE SAID AUTHORITY GRANTED APPROVAL U/S 35(2AB) W.E.F. 1ST APRIL 2009 UPTO 31ST MARCH 2012. ONCE THE APPROVAL IS GRA NTED TILL 31.03.2012 THE SO-CALLED RESTRICTION APPEARING WITH IN BRACKET MAY BE SAID AS NOT APPLICABLE. I AGREE WITH THE CON TENTIONS OF THE APPELLANT THAT THE PROVISIONS CONTAINED IN SECT ION 35(2AB) AUTHORIZES WEIGHTED DEDUCTION ON 'ANY EXPENDITURE' INCURRED FOR SCIENTIFIC RESEARCH AND DEVELOPMENT ON THE LINE OF BUSINESS ENUMERATED THEREIN AND SUBJECT TO APPROVAL OF PRESC RIBED AUTHORITY. I ALSO AGREE THAT PRESCRIBED AUTHORITY H AS THE POWER TO GRANT OR REJECT APPROVAL U/S 35(2AB). IT C ANNOT DIRECT QUANTUM OF DEDUCTION U/S 35(2AB). I AM FORTI FIED WITH THE DECISION OF GUJARAT HIGH COURT IN THE CASE OF C LARIS LIFE SCIENCES LTD. SUPRA WHEREIN IT WAS, INTER-ALIA, HEL D THAT ONCE THE CERTIFICATE BY THE DSIR IS ISSUED THAT WOULD BE SUFFICIENT TO HOLD THAT THE ASSESSEE FULFILLED THE CONDITIONS LAI D DOWN IN THE AFORESAID PROVISION. MOREOVER, A PLAIN READING OF T HE PROVISIONS CONTAINED IN SECTION 35(2AB) OF THE ACT CLEARLY MANIFESTS AS FOLLOWS: 'WHERE A COMPANY ENGAGED IN THE BUSINESS OF [BIO- TECHNOLOGY OR IN [ANY BUSINESS OF MANUFACTURE OR PRODUCTION OF ANY ARTICLE OR THING, NOT BEING AN ARTICLE OR THING SPECIFIED IN THE LIST OF THE ELEVE NTH SCHEDULE]] INCURS ANY EXPENDITURE ON SCIENTIFIC RESEARCH (NOT BEING EXPENDITURE IN THE NATURE OF COST OF ANY LAND OR BUILDING) ON IN-HOUSE RESEARCH AND DEVELOPMENT FACILITY AS APPROVED BY THE PRESCRIBED AUTHORITY, THEN THERE SHALL BE ALLOWED A DEDUCTION OR [A SUM EQUAL TO [TWO] TIMES OF THE EXPENDITURE] SO INCURRED. I AM, THEREFORE, OF THE CONSIDERED OPINION THAT THE APPELLANT IS ENTITLED TO WEIGHTED DEDUCTION IN RESPECT OF REVENU E EXPENDITURE OF RS.2,59,90,238/- AS DEBITED IN PROFI T & LOSS A/C ITA NO. 1739/KOL/2016 ASSESSMENT YEAR: 2011-2012 & ITA NO. 1071/KOL/2017 ASSESSMENT YEAR: 2010-2011 M/S. EASTERN SILK INDUSTRIES LIMITED 7 AND FURTHER CERTIFIED BY THE AUDITOR SHOWING BREAK- UP OF SUCH REVENUE EXPENDITURE UNDER EACH OF TWO UNITS. THE AO IS DIRECTED TO ACT ACCORDINGLY IN THE MATTER. 8. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS REGARDS T HE ISSUE INVOLVED IN GROUND NO. 1, IT IS OBSERVED THAT THE ALTERNATIVE C LAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 35(1)(IV) OF THE ACT IN RES PECT OF CAPITAL EXPENDITURE OF RS.8,06,080/- INCURRED ON CONSTRUCTI ON OF THE LABORATORY BUILDING WAS DISALLOWED BY THE ASSESSING OFFICER ON THE GROUND THAT THE SAID CLAIM WAS NOT MADE BY THE ASSESSEE EITHER IN T HE RETURN OF INCOME ORIGINALLY FILED OR BY WAY OF FILING REVISED RETURN . FOR THIS CONCLUSION, HE DERIVED SUPPORT FROM THE DECISION OF THE HONBLE SU PREME COURT IN THE CASE OF GOETZE (INDIA) LIMITED (SUPRA). AS CLARIFIE D BY THE HONBLE SUPREME COURT IN THE DECISION RENDERED IN THE CASE OF GOETZE (INDIA) LIMITED (SUPRA) ITSELF, THE APPELLATE AUTHORITY LIK E THE CIT(APPEALS) CAN ENTERTAIN ANY NEW CLAIM OF THE ASSESSEE, SUCH AS TH E CLAIM FOR DEDUCTION UNDER SECTION 35(1)(IV) EVEN WHEN THE SAME WAS NOT MADE BY THE ASSESSEE IN THE RETURN OF INCOME ORIGINALLY FILED O R BY WAY OF FILING REVISED RETURN. THE LD. CIT(APPEALS), IN OUR OPINIO N, THEREFORE, WAS FULLY JUSTIFIED IN ENTERTAINING THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 35(1)(IV) OF THE ACT AND ALLOWING THE SAME ON MERIT BY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUN AL AT COCHIN IN THE CASE OF ACIT VS.- MERCHEM LIMITED [46 TAXMANN.COM 185] . AT THE TIME OF HEARING BEFORE US, EVEN THE LD. D.R. HAS NOT RAISED ANY CONTENTION TO DISPUTE THIS POSITION. WE, THEREFORE, UPHOLD THE IM PUGNED ORDER OF THE LD. CIT(APPEALS) ALLOWING ALTERNATIVE CLAIM OF THE ASSE SSEE FOR DEDUCTION UNDER SECTION 35(1)(IV) AND DISMISS GROUND NO. 1 OF THE REVENUES APPEAL. ITA NO. 1739/KOL/2016 ASSESSMENT YEAR: 2011-2012 & ITA NO. 1071/KOL/2017 ASSESSMENT YEAR: 2010-2011 M/S. EASTERN SILK INDUSTRIES LIMITED 8 9. AS REGARDS THE COMMON ISSUE RAISED IN GROUNDS NO . 2 TO 5 OF THE REVENUES APPEAL RELATING TO THE DELETION BY THE LD . CIT(APPEALS) OF THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOU NT OF ASSESSEES CLAIM FOR WEIGHTED DEDUCTION UNDER SECTION 35(2AB), THE L D. D.R. HAS INVITED OUR ATTENTION TO THE COPY OF APPROVAL GIVEN IN FORM NO. 3CM BY THE COMPETENT AUTHORITY FOR IN-HOUSE RESEARCH AND DEVEL OPMENT FACILITIES OF THE ASSESSEE TO POINT OUT THAT THE SAID APPROVAL WA S GIVEN FOR THE PERIOD 1 ST APRIL, 2009 TO 28 TH MARCH, 2011 ONLY FOR THE PURPOSE OF CAPITAL EXPENDITURE INCURRED ON RESEARCH AND DEVELOPMENT FA CILITIES. HE HAS CONTENDED THAT THE ASSESSEE-COMPANY AS PER THE SAID APPROVAL THUS WAS NOT ENTITLED TO CLAIM WEIGHTED DEDUCTION IN RESPECT OF REVENUE EXPENDITURE INCURRED ON RESEARCH AND DEVELOPMENT FA CILITIES AND THIS VITAL ASPECT WAS OVERLOOKED BY THE LD. CIT(APPEALS) WHILE ALLOWING THE CLAIM OF THE ASSESESE FOR WEIGHTED DEDUCTION EVEN I N RESPECT OF REVENUE EXPENDITURE. THE LD. COUNSEL FOR THE ASSESSEE, ON T HE OTHER HAND, HAS CONTENDED THAT THE ROLE OF THE COMPETENT AUTHORITY IS ONLY TO APPROVE THE IN-HOUSE RESEARCH AND DEVELOPMENT FACILITY AND ONCE SUCH APPROVAL IS GIVEN IN FROM NO. 3CM IN RESPECT OF IN-HOUSE RESEAR CH AND DEVELOPMENT FACILITY, THE ASSESSEE BECOMES ELIGIBLE FOR WEIGHTE D DEDUCTION ON REVENUE EXPENDITURE AS WELL AS THE CAPITAL EXPENDITURE INCU RRED IN RESPECT OF SUCH RESEARCH AND DEVELOPMENT FACILITY EXCLUDING ONLY TH E CAPITAL EXPENDITURE INCURRED ON LAND AND BUILDING. HE HAS CONTENDED THA T THE CONDITIONS STIPULATED BY THE COMPETENT AUTHORITY IN FROM NO. 3 CM THAT THE APPROVAL WAS ONLY FOR THE PURPOSE OF CAPITAL EXPENDITURE ON RESEARCH AND DEVELOPMENT FACILITIES THUS WAS BEYOND THEIR JURISD ICTION AND THE ASSESSING OFFICER WAS NOT JUSTIFIED IN RELYING ON T HE SAME TO DISALLOW THE CLAIM OF THE ASSESSEE FOR WEIGHTED DEDUCTION UNDER SECTION 35(2AB) IN RESPECT OF REVENUE EXPENDITURE INCURRED ON THE IN-H OUSE RESEARCH AND DEVELOPMENT FACILITY, WHICH WAS DULY APPROVED BY TH E COMPETENT AUTHORITY. IN SUPPORT OF THIS CONTENTION, HE RELIED ON THE DECISION OF THE ITA NO. 1739/KOL/2016 ASSESSMENT YEAR: 2011-2012 & ITA NO. 1071/KOL/2017 ASSESSMENT YEAR: 2010-2011 M/S. EASTERN SILK INDUSTRIES LIMITED 9 HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS.- S ANDAN VIKAS (INDIA) LIMITED (335 ITR 117). 10. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PER USING THE RELEVANT MATERIAL AVAILABLE ON RECORD, WE FIND THAT THIS ISS UE RELATING TO THE ASSESSEES CLAIM FOR WEIGHTED DEDUCTION UNDER SECTI ON 35(2AB) OF THE ACT IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY TH E DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF SANDAN VIKA S (INDIA) LIMITED (SUPRA), WHEREIN IT WAS HELD AS UNDER:- WHAT IS TO BE SEEN IS THAT THE ASSESSEE WAS INDULG ING IN RESEARCH AND DEVELOPMENT ACTIVITY AND HAD INCURRED THE EXPENDITURE THEREUPON. ONCE A CERTIFICATE BY THE DS IR IS ISSUED THAT WOULD BE SUFFICIENT TO HOLD THAT THE AS SESSEE FULFILS THE CONDITIONS LAID DOWN IN THE AFORESAID P ROVISIONS. THE LOWER AUTHORITIES ARE READING MORE THAN WHAT IS PROVIDED BY LAW. A PLAIN AND SIMPLE READING OF THE ACT PROVIDES THAT ON APPROVAL OF THE RESEARCH AND DEVEL OPMENT FACILITY, EXPENDITURE SO INCURRED IS ELIGIBLE FOR W EIGHTED DEDUCTION THE TRIBUNAL HAS CONSIDERED THE SUBMISSIO NS MADE ON BEHALF OF THE ASSESSEE AND TOOK THE VIEW THAT SE CTION SPEAKS OF: (I) DEVELOPMENT OF FACILITY; (II) INCURRING OF EXPENDITURE BY THE ASSESSEE FOR DEVELOPMENT OF SUCH FACILITY; (III) APPROVAL OF THE FACILITY BY THE PRESCRIBED AUTHORITY, WHICH IS DSIR; AND (IV) ALLOWANCE OF WEIGHTED DEDUCTION ON THE EXPENDITURE SO INCURRED BY THE ASSESSEE. A PLAIN READING CLEARLY MANIFESTS THAT THE ASSESSEE HAS TO DEVELOP FACILITY, WHICH PRESUPPOSES INCURRING EXPEN DITURE IN THIS BEHALF, APPLICATION TO THE PRESCRIBED AUTHO RITY, WHO AFTER FOLLOWING PROPER PROCEDURE WILL APPROVE THE F ACILITY OF OTHERWISE AND THE ASSESSEE WILL BE ENTITLED TO W EIGHTED DEDUCTION OF ANY AND ALL EXPENDITURE SO INCURRED. A PLAIN AND HARMONIOUS READING OF RULE AND FORM CLEARLY SUG GESTS THAT ONCE FACILITY IS APPROVED, THE ENTIRE EXPENDIT URE SO INCURRED ON DEVELOPMENT OF RESEARCH AND DEVELOPMENT ITA NO. 1739/KOL/2016 ASSESSMENT YEAR: 2011-2012 & ITA NO. 1071/KOL/2017 ASSESSMENT YEAR: 2010-2011 M/S. EASTERN SILK INDUSTRIES LIMITED 10 FACILITY HAS TO BE ALLOWED FOR WEIGHTED DEDUCTION A S PROVIDED BY SECTION 35(2AB). THE LEGISLATIVE INTENT ION BEHIND THE ABOVE ENACTMENT IS TO BOOST THE RESEARCH AND DEVELOPMENT FACILITY IN INDIA AND TO ENCOURAGE THE DEVELOPMENT OF THE FACILITY BY PROVIDING DEDUCTION OF WEIGHTED EXPENDITURE IS VERY CLEAR THAT THE ENTIRE EXPENDITURE INCURRED BY THE ASSESSEE ON DEVELOPMENT OF FACILITY, IF APPROVED, HAS TO BE ALLOWED FOR THE PU RPOSE OF WEIGHTED DEDUCTION. WE ARE IN FULL AGREEMENT WITH THE REASONING GIVEN B Y THE TRIBUNAL AND WE ARE OF THE VIEW THAT THERE IS NO SC OPE FOR ANY OTHER INTERPRETATION AND SINCE THE APPROVAL IS GRANTED DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR IN QUESTION, WE ARE OF THE VIEW THAT THE ASSESSEE IS E NTITLED TO CLAIM THE WEIGHTED DEDUCTION IN RESPECT OF THE ENTI RE EXPENDITURE INCURRED UNDER SECTION 35(2AB) OF THE A CT BY THE ASSESSEE. 11. IN OUR OPINION, THE RATIO OF THE DECISION OF TH E HONBLE DELHI HIGH COURT IN THE CASE OF SANDAN VIKAS (INDIA) LIMITED ( SUPRA) IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE AND RES PECTFULLY FOLLOWING THE SAME, WE UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A PPEALS) ALLOWING THE CLAIM OF THE ASSESSEE FOR WEIGHTED DEDUCTION UNDER SECTION 35(2AB) IN RESPECT OF REVENUE EXPENDITURE INCURRED ON IN-HOUSE RESEARCH AND DEVELOPMENT FACILITY, WHICH WAS DULY APPROVED BY TH E COMPETENT AUTHORITY. GROUNDS NO. 2 TO 5 OF THE REVENUES APPE AL ARE ACCORDINGLY DISMISSED. 12. IN GROUND NO. 6, THE REVENUE HAS CHALLENGED THE ACTION OF THE LD. CIT(APPEALS) IN DELETING THE DISALLOWANCE OF RS.4,1 9,614/- MADE BY THE ASSESSING OFFICER UNDER SECTION 14A OF THE ACT READ WITH RULE 8D OF THE INCOME TAX RULES, 1962. 13. DURING THE YEAR UNDER CONSIDERATION, THE ASSESS EE-COMPANY HAD EARNED DIVIDEND INCOME OF RS.1,850/-, WHICH WAS CLA IMED TO BE EXEMPT FROM TAX. THE DISALLOWANCE OF RS.1,02,481/- WAS ALS O OFFERED BY THE ITA NO. 1739/KOL/2016 ASSESSMENT YEAR: 2011-2012 & ITA NO. 1071/KOL/2017 ASSESSMENT YEAR: 2010-2011 M/S. EASTERN SILK INDUSTRIES LIMITED 11 ASSESSEE UNDER SECTION 14A ON ACCOUNT OF EXPENDITUR E INCURRED IN RELATION TO THE EARNING OF THE SAID EXEMPT INCOME. THE ASSESSING OFFICER APPLIED RULE 8D TO WORK OUT THE EXPENDITURE INCURRE D BY THE ASSESESE IN RELATION TO THE EXEMPT INCOME AT RS.5,22,095/- AND MADE A FURTHER DISALLOWANCE OF RS.4,19,614/- UNDER SECTION 14A. ON APPEAL, THE LD. CIT(APPEALS) DELETED THE SAID DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 14A BY APPLYING RULE 8D FOR THE FOLLO WING REASONS GIVEN IN PARAGRAPH NO. 6.2 OF HIS IMPUGNED ORDER:- 6.2. I HAVE GONE THROUGH THE CONTENTIONS OF THE A R OF THE APPELLANT AND VARIOUS JUDICIAL DECISIONS RELIED UPO N IN THIS REGARD. IT IS A FACT THAT DIVIDEND INCOME EARNED AN D CLAIMED AS DEDUCTION WAS TO THE EXTENT OF RS.1,850/- ONLY. IT IS ALSO A FACT ON RECORD THAT THE APPELLANT OFFERED DISALLOWA NCE U/S 14A AT RS.1,02,481/- IN ITS RETURN. KEEPING IN VIEW THE JUDICIAL DECISION THAT APPLICATION OF RULE 80(2) IS NOT AUTOMATIC BUT SUBJECTED TO SATISFACTION AS WELL AS THE DECISION OF THE DELHI HIGH COURT IN ITA NO. 117/201 5, THE AO IS DIRECTED TO RESTRICT DISALLOWANCE TO RS.1,02,481 /- AS OFFERED IN THE RETURN. THE BALANCE DISALLOWANCE OF RS.4,19,614/- I.E. (5,22,095 - 1,02,481) IS DELETED . 14. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES O N THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON REC ORD. KEEPING IN VIEW ALL THE FACTS OF THE CASE INCLUDING ESPECIALLY THE FACT THAT THE DISALLOWANCE OF RS.1,02,481/- OFFERED BY THE ASSESSEE UNDER SECT ION 14A WAS MUCH MORE THAN THE EXEMPT INCOME IN THE FORM OF DIVIDEND OF RS.1,850/- ONLY EARNED BY THE ASSESSEE DURING THE YEAR UNDER CONSID ERATION, WE ARE OF THE VIEW THAT THE FURTHER DISALLOWANCE OF RS.4,19,614/- MADE BY THE ASSESSING OFFICER UNDER SECTION 14A BY APPLYING RUL E 8D WAS NOT SUSTAINABLE AND THE LD. CIT(APPEALS) WAS FULLY JUST IFIED IN DELETING THE SAME. WE ACCORDINGLY UPHOLD THE IMPUGNED ORDER OF T HE LD. CIT(APPEALS) ON THIS ISSUE AND DISMISS GROUND NO. 6 OF THE REVEN UES APPEAL. 15. AS REGARDS THE ISSUE RAISED IN GROUND NO. 7 REL ATING TO THE DELETION BY THE LD. CIT(APPEALS) OF THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ITA NO. 1739/KOL/2016 ASSESSMENT YEAR: 2011-2012 & ITA NO. 1071/KOL/2017 ASSESSMENT YEAR: 2010-2011 M/S. EASTERN SILK INDUSTRIES LIMITED 12 ON ACCOUNT OF BELATED PAYMENT OF EMPLOYEES CONTRIB UTION TO P.F AND ESI AMOUNTING TO RS.2,31,562/-, WE FIND THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONB LE CALCUTTA HIGH COURT IN THE CASE OF CIT VS.- VIJAY SHREE LIMITED (ITA N O. 245 OF 2011), WHEREIN IT WAS HELD THAT THE DUE DATE OF DEPOSIT SH OULD BE CONSIDERED AS DUE DATE OF FILING OF RETURN UNDER SECTION 139(1) O F THE INCOME TAX ACT, 1961. SINCE THE PAYMENTS IN QUESTION TOWARDS EMPLOY EES CONTRIBUTION TO P.F. AND ESI WERE MADE BY THE ASSESSEE BEFORE THE D UE DATE OF FILING OF ITS RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT, W E RESPECTFULLY FOLLOW THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COU RT IN THE CASE OF VIJAY SHREE LIMITED (SUPRA) AND UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF BELATED PAYMENT OF EMPLOYEES CONTRIBUTI ON TO P.F. AND ESI. GROUND NO. 7 OF THE REVENUES APPEAL IS ACCORDINGLY DISMISSED. 16. THE ISSUE INVOLVED IN GROUND NO. 8 OF THE REVEN UES APPEAL FOR A.Y. 2011-12 RELATES TO THE DELETION BY THE LD. CIT(APPE ALS) OF THE DISALLOWANCE OF RS.1,54,645/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CLUB EXPENSES. 17. IN THE PROFIT & LOSS ACCOUNT FILED ALONG WITH I TS RETURN OF INCOME, A SUM OF RS.1,93,010/- WAS DEBITED BY THE ASSESSEE ON ACCOUNT OF EXPENDITURE INCURRED AT CLUBS. IN THE COMPUTATION O F TOTAL INCOME, THE SAID EXPENDITURE TO THE EXTENT OF RS.38,365/- WAS D ISALLOWED BY THE ASSESSEE-COMPANY ITSELF. ACCORDING TO THE ASSESSING OFFICER, THE ENTIRE EXPENDITURE INCURRED AT CLUBS BY THE ASSESSEE WAS O F PERSONAL NATURE AND THE SAME WAS NOT ALLOWABLE AS BUSINESS EXPENDITURE. HE ACCORDINGLY MADE A DISALLOWANCE OF RS.1,54,645/- ON THIS ISSUE. ON A PPEAL, THE LD. CIT(APPEALS) DELETED THE SAID DISALLOWANCE MADE BY THE ASSESSING OFFICER BY RELYING ON THE DECISION OF THE HONBLE MADRAS HI GH COURT IN THE CASE OF ITA NO. 1739/KOL/2016 ASSESSMENT YEAR: 2011-2012 & ITA NO. 1071/KOL/2017 ASSESSMENT YEAR: 2010-2011 M/S. EASTERN SILK INDUSTRIES LIMITED 13 CIT VS.- SUNDARAN & INDUSTRIES [158 CTR 437] AND T HE DECISION OF THE MUMBAI BENCH OF THIS TRIBUNAL IN THE CASE OF PRITAM HOTELS PVT. LIMITED VS.- ITO [17 TTJ 550]. THE LD. CIT(APPEALS) HELD TH AT BUSINESS EXPEDIENCY OF THE EXPENDITURE INCURRED AT CLUBS WAS ESTABLISHE D BY THE ASSESSEE AND THE CLAIM OF THE ASSESSEE WAS NOT REBUTTED BY THE A SSESSING OFFICER WITH ANY TENABLE OR COGENT MATERIAL. 18. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES O N THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON REC ORD. AS RIGHTLY HELD BY THE LD. CIT(APPEALS), THE NEXUS OF THE EXPENDITURE INCURRED AT CLUBS WITH ITS BUSINESS WAS ESTABLISHED BY THE ASSESSEE AND I N THE ABSENCE OF ANY TENABLE OR COGENT MATERIAL TO REBUT OR CONTROVERT T HE SAME, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOU NT OF CLUB EXPENSES WAS NOT TENABLE. JUDICIAL PRONOUNCEMENTS RELIED UPO N BY THE LD. CIT(APPEALS) ALSO SUPPORT THE CASE OF THE ASSESSEE ON THIS ISSUE. WE, THEREFORE, FIND NO JUSTIFIABLE REASON TO INTERFERE WITH THE IMPUGNED ORDER OF THE LD. CIT(APPALS) GIVING RELIEF TO THE ASSESSE E ON THIS ISSUE AND UPHOLDING THE SAME, WE DISMISS GROUND NO. 8 OF THE REVENUES APPEAL FOR A.Y. 2011-12. 19. NOW WE SHALL TAKE UP THE REVENUES APPEAL FOR A .Y. 2010-11 BEING ITA NO. 1071/KOL/2017 , WHICH IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(APPEALS)-15, KOLKATA DATED 07.03.2017. 20. AS REGARDS GROUND NO. 1, IT IS OBSERVED THAT TH E ISSUE INVOLVED THEREIN RELATING TO THE DELETION BY THE LD.CIT(APPE ALS) OF THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ASSESSE ES CLAIM FOR WEIGHTED DEDUCTION UNDER SECTION 35(2AB) IS SIMILAR TO THE O NE INVOLVED IN GROUNDS NO. 2 TO 5 OF THE REVENUES APPEAL FOR A.Y. 2011-12, WHICH HAS ALREADY BEEN DECIDED BY US. FOLLOWING OUR CONCLUSIO N DRAWN IN A.Y. 2011- ITA NO. 1739/KOL/2016 ASSESSMENT YEAR: 2011-2012 & ITA NO. 1071/KOL/2017 ASSESSMENT YEAR: 2010-2011 M/S. EASTERN SILK INDUSTRIES LIMITED 14 12, WE UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(APP EALS) ALLOWING THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 3 5(2AB) OF THE ACT. GROUND NO. 1 OF THE REVENUES APPEAL FOR A.Y. 2010- 11 IS ACCORDINGLY DISMISSED. 21. THE COMMON ISSUE RAISED IN GROUNDS NO. 2 & 3 RE LATES TO THE DELETION BY THE LD. CIT(APPEALS) OF THE ADDITION OF RS.10,19,224/- MADE BY THE ASSESSING OFFICER BY DISALLOWING THE CLAIM O F THE ASSESSEE FOR SHORT-TERM CAPITAL LOSS BY APPLYING THE PROVISIONS OF SECTIONS 94(7) AND 94(8). 22. IN THE COMPUTATION OF TOTAL INCOME, CAPITAL GAI N ARISING FROM THE SALE OF INVESTMENT AMOUNTING TO RS.11,27,822/- WAS CLAIMED TO BE EXEMPT BY THE ASSESSEE. THE RELEVANT DETAILS IN RESPECT OF SUCH CAPITAL GAIN ONLY TO THE EXTENT OF RS.1,08,599/- WERE FURNISHED BY TH E ASSESSEE AND IN THE ABSENCE OF THE RELEVANT DETAILS IN RESPECT OF THE B ALANCE CAPITAL GAIN OF RS.10,19,224/-, THE ASSESSING OFFICER HELD THAT THE CLAIM OF THE ASSESSEE WAS NOT ESTABLISHED. HE ACCORDINGLY TREATED THE SAI D AMOUNT OF RS.10,19,224/- AS INCOME OF THE ASSESSEE CHARGEABLE TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES. BEFORE THE LD. CI T(APPEALS), IT WAS SUBMITTED BY THE ASSESSEE THAT IT HAD INCURRED CAPI TAL LOSS OF RS.10,19,224/- AND THE SAME WAS SET OFF AGAINST THE CAPITAL GAIN ARISING ON THE SALE OF SECURITIES. IT WAS CONTENDED THAT TH E ASSESSEE THUS HAD NOT SUPPRESSED ANY CAPITAL GAIN OF RS.10,19,224/- AND T HE ADDITION MADE BY THE ASSESSING OFFICER BY TREATING THE SAID AMOUNT A S CHARGEABLE TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES WAS NOT JUSTIFIED. THE LD. CIT(APPEALS) FOUND MERIT IN THIS CONTENTION RAISED ON BEHALF OF THE ASSESSEE AND DELETED THE ADDITION MADE BY THE ASSES SING OFFICER ON THIS ISSUE. 23. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES A ND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ALTHOUGH THE LD. D.R. HAS SUBMITTED ITA NO. 1739/KOL/2016 ASSESSMENT YEAR: 2011-2012 & ITA NO. 1071/KOL/2017 ASSESSMENT YEAR: 2010-2011 M/S. EASTERN SILK INDUSTRIES LIMITED 15 THAT AN ALTOGETHER NEW CLAIM WAS MADE BY THE ASSESS EE BEFORE THE LD. CIT(APPEALS) AND THE SAME WAS ACCEPTED BY THE LD. C IT(APPEALS) WITHOUT GIVING THE ASSESSING OFFICER AN OPPORTUNITY TO VERI FY THE SAME, WE FIND THAT THE IMPUGNED ADDITION WAS MADE BY THE ASSESSIN G OFFICER WITHOUT GIVING ANY SOUND OR COGENT REASON AND THE AMOUNT OF CAPITAL GAIN WAS TREATED BY HIM AS INCOME FROM OTHER SOURCES ON THE BASIS OF MERE CONJECTURES AND SURMISES. ON THE OTHER HAND, THE RE LEVANT FACTS PERTAINING TO THIS ISSUE WERE PROPERLY EXPLAINED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) AND AFTER HAVING SATISFIED WIT H THE CLAIM OF THE ASSESSEE, RELIEF WAS ALLOWED BY THE LD. CIT(APPEALS ) TO THE ASSESSEE ON THIS ISSUE. WE, THEREFORE, FIND NO JUSTIFIABLE REAS ON TO INTERFERE WITH THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) GIVING RELIE F TO THE ASSESSEE ON THIS ISSUE AND UPHOLDING THE SAME, WE DISMISS GROUN DS NO. 2 & 3 OF THE REVENUES APPEAL FOR A.Y. 2010-11. 24. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON JULY 26, 201 9. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP ) JUDICIAL MEMBER V ICE-PRESIDENT (KZ) KOLKATA, THE 26 TH DAY OF JULY, 2019 COPIES TO : (1) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-10(2), KOLKATA, AAYAKAR BHAWAN, 3 RD FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (2) M/S. EASTERN SILK INDUSTRIES LIMITED, 19, R.N. MUKHERJEE ROAD, KOLKATA-700 001 (3) COMMISSIONER OF INCOME TAX (APPEALS)-4, KOLKAT A, (4) COMMISSIONER OF INCOME TAX- ,KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOL KATA LAHA/SR. P.S.