Satlej Industries Ltd., Rajasthan V. DCIT, New Delhi

ITA 1776/DEL/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6633 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 12-01-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 13-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIMA BARNWAL
• Keywords: Earning of tax free income; Deemed to accrue or arise in india
• Section: 80HHC; 14A; 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SRI G.D. AGARWAL, HONBLE VICE PRESIDENT SRI C.M.GARG, JUDICIAL MEMBER ITA NO.1776 & 1777/DEL./2011 ( ASSTT. YEAR : 2003-04) (ASSTT. YEAR : 2004-05) SATLEJ INDUSTRIES LTD. (NOW KNOWN AS SIL INVESTMENTS LTD.) BHAWANIMANDI, DISTT. JHALANWAR RAJASTHAN VS DCIT CIRCLE -8(1), ROOM NO. 163, FIRST FLOOR, C.R. BUILDING, I.P.ESTATE NEW DELHI (APPELLANT) (RESPONDENT) PAN : AABCS2899H) ASSESSEE BY : SH. ROHIT JA IN, ADV., SH. SAMBHAV JAIN, C.A. REVENUE BY : SH. ANIMA BAR NWAL, SR. DR DATE OF HEARING : 12.01.2016 DATE OF PRONOUNCEMENT : 24. 02.2016 ORDER PER C.M.GARG, J.M. THESE APPEALS HAVE BEEN FILED AGAINST THE ORDERS OF THE CIT(A)-XII, NEW DELHI PASSED IN FIRST APPEALS NO. 52 AND 157/06-07 FOR AY 2003-04 AND 2004-05 RESPECTIVELY BOTH DATED 24.01.2011. APPLICATION OF THE ASSESSEE FOR ADMISSION OF ADDITIONA L GROUND UNDER RULE 11 OF INCOME TAX APPELLATE TRIBUNAL, RULES 1963 2 ITA NO. 1776,1777/DEL/2011 SATLEJ INDUSTRIES LTD. 2. WE HAVE HEARD THE ARGUMENT OF BOTH THE SIDES O N CAREFULLY PERUSED THE RECORD BEFORE US THE LD. COUNSEL OF THE ASSESSE E SUBMITTED THAT IN BOTH THE APPEALS. THE ASSESSEE REQUESTED FOR ADMISSION OF AD DITIONAL GROUND OF APPEAL. THE LD. COUNSEL FURTHER CONTENDED THAT THE ASSESSIN G OFFICER VIDE ASSESSMENT ORDER DID NOT ALLOW THE REDUCTION IN RESPECT OF EXP ORT PROFITS ALLOWABLE WHILE COMPUTING BOOK PROFITS IN TERMS OF CLAUSE (IV) OF E XPLANATION I TO SECTION 115JB OF THE ACT. THE LD. COUNSEL FURTHER SUBMITTED THAT THE AO ALSO RESTRICTED THE ALLOWABLE REDUCTION U/S 115JB OF THE ACT TO THE EXT ENT OF THE LIMITS SPECIFIED IN SUB SECTION 1B OF SECTION 80HHC OF THE ACT, WITHOUT APPRECIATING THAT SUCH LIMITS ARE NOT APPLICABLE FOR COMPUTING BOOK PROFIT S. THE LD. COUNSEL FURTHER POINTED OUT THAT ON THE SAID BASIS THE ASSESSING OF FICER OBSERVE THAT WHILE COMPUTING BOOK PROFITS DEDUCTION OF EXPORT PROFITS WAS TO BE RESTRICTED 50 % OF THE ELIGIBLE PROFITS AS PER SUB SECTION (IB) OF SEC TION 80HHC OF THE ACT WHICH IS CONTRARY TO THE SCHEME OF COMPUTING BOOK PROFITS U/ S 115JB OF THE ACT. THE LD. COUNSEL SUBMITTED THAT ADDITIONAL GROUNDS WERE RAIS ED BEFORE THE CIT(A) BUT ON ACCOUNT OF IN ADVERTENCE NOT TAKEN IN THE MEMORA NDUM OF APPEAL FILED BEFORE THE TRIBUNAL. THE LD. COUNSEL PLACING RELIAN CE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF NTPC LTD. VS. CIT 229 ITR 383(SC) SUBMITTED THAT ADDITIONAL GROUNDS RAISED ON THE BASIS OF DECISION OF HONBLE SUPREME COURT IN THE CASE OF AJANTA FARMA LTD. VS. CIT 327 ITR 305 ( SC) WHICH GOES TO THE ROOT OF THE CONTROVERSY, THEREFORE, ADDITIONAL GROUND MAY KINDLY BE ADMITTED FOR ADJUDICATION. 3. THE LD. DR STRONGLY OPPOSED TO THE ADMISSION O F ADDITIONAL GROUNDS AND CONTENDED THAT WHEN THE GROUNDS WERE NOT RAISED BEFORE THE TRIBUNAL IN FORM NO. 36 THEN THE SAME CANNOT BE RAISED SUBSEQUE NTLY FOR FILLING THE GAPS IN THE APPEAL OF THE ASSESSEE. HOWEVER, HE FAIRLY ACCE PTED THESE ISSUES WERE RAISED BEFORE THE CIT(A) IN THE FIRST APPEAL FOR BO TH THE YEARS. 3 ITA NO. 1776,1777/DEL/2011 SATLEJ INDUSTRIES LTD. 4. ON CAREFULLY CONSIDERATION OF ABOVE RIVAL SUB MISSIONS OF BOTH THE SIDES FROM COPY OF THE FORM NO. 35 AVAILABLE ON REC ORD IN BOTH THE APPEALS IT IS APPARENT THAT THE ASSESSEE CHALLENGED THIS LEGAL IS SUE BEFORE THE CIT(A) BUT THE SAME WERE NOT SUBMITTED WHILE FILING THESE APPEALS BEFORE THE TRIBUNAL. HOWEVER, IN THE HUMBLE OPINION SINCE THE LEGAL ISSU ES RAISED BY THE ASSESSEE BY WAY OF PROPOSED ADDITIONAL GROUNDS GOES TO THE ROO T OF THE CONTROVERSY BEING LEGAL. THEREFORE, RESPECTFULLY FOLLOWING THE PREPOS ITION LAID DOWN BY HONBLE APEX COURT IN THE CASE OF NTPC VS. CIT (SUPRA) ADDI TIONAL GROUNDS PROPOSED BY THE ASSESSEE IN BOTH THE APPEALS ARE ADMITTED FOR A DJUDICATION. FINALLY, APPLICATIONS OF THE ASSEESSEE IN BOTH THE APPEALS F OR ADMISSION OF ADDITIONAL GROUNDS ARE ALLOWED. 5. BOTH THE ADMISSION OF ADDITIONAL GROUNDS AS ARE ALLOWED WHICH READ AS UNDER : 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ASSESSING OFFICER ERRED IN NOT ALLOWING REDUCTION OF 100% EXP ORT PROFITS ALLOWABLE WHILE COMPUTING BOOK PROFITS IN TERMS OF CLAUSE (IV) O F EXPLANATION 1 TO SECTION 115JB OF THE INCOME TAX ACT, 1961(THE ACT). 1.1 THAT THE ASSESSING OFFICER FAILED TO APPRECIATE THA T THE ENTIRE EXPORT PROFITS IS ALLOWABLE AS DEDUCTION WHILE COMPUTING BOOK PR OFITS UNDER SECTION 115JB AND THE SAME IS NOT REQUIRED TO BE RESTRICTED TO THE EXTENT SPECIFIED IN SUB-SECTION (1B) OF THE SECTION 80HHC OF THE ACT. 6. FROM APPEAL RECORDS WE NOTE THAT THE ASSESSEE HAS RAISED SIMILARLY WORDED GROUNDS IN BOTH THE APPEALS AND EXCEPT AMOUN TS MENTIONED THEREIN GROUNDS ARE THE SAME. FOR SAKE OF COMPLETENESS, T HE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN ITA NO. 1776.DEL.2011 FOR AY 20 03-04 ARE BEING REPRODUCED BELOW :- 4 ITA NO. 1776,1777/DEL/2011 SATLEJ INDUSTRIES LTD. 1. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN UP HOLDING THE ACTION OF THE ASSESSING OFFICER IN DENYING BENEFIT OF DEDUCTION U NDER SECTION 80HHC OF THE INCOME TAX ACT, 1961 (THE ACT) AMOUNTING TO RS. 2 ,89,79,156/- BY EXCLUDING GROSS AMOUNT RECEIVED ON TRANSFER OF DEPB CREDITS F ROM ELIGIBLE PROFITS, IN VIEW OF THE AMENDMENT BROUGHT ABOUT BY THE TAXATION LAWS (AMENDMENT) ACT, 2005. 1.1. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN REDU CING THE ENTIRE AMOUNT OF DEPB BENEFIT FROM THE PROFITS OF THE BUSINESS, W ITHOUT APPRECIATING THAT ONLY PROFIT ON TRANSFER OF DEPB CREDITS OUGHT TO BE EXCL UDED IN TERMS OF PROVISO TO SUB-SECTION (3) OF SECTION 80HHC READ WITH SECTION 28(IIID) OF THE ACT. 2.THAT THE CIT(A) ERRED ON FACTS AND IN LAW, IN ENHANCING THE INCOME OF THE APPELLANT BY DIRECTING THE ASSESSING OFFICER TO REC OMPUTED THE BOOK PROFITSUNDER SECTION 115JB OF THE ACT BY ADDING: (A) THE AMOUNT TRANSFERRED FROM RESERVES ON ACCOUNT S OF DEFERRED GOVERNMENT SUBSIDY AMOUNTING TO RS. 21,41,540/-; (B) THE AMOUNT RELATING TO PROVISION AGAINST TRANSI T CLAIM OF RS. 5,13,071/- AND PROVISION AGAINST REFUND OF INSURANCE PREMIUM OF RS . 13,101/-. 3. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN NO T ALLOWING REDUCTION OF AMOUNT OF RS. 21,41,540/- TRANSFERRED FROM RESERVES ON ACCOUNT OF DEFERRED GOVERNMENT SUBSIDY, TO THE CREDIT OF PROFIT AND LOS S ACCOU T, WHILE COMPUTING BOOK PROFITUNDER SECTION 115JB OF THE ACT. 4. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN AD DING BACK PROVISION AGAINST TRANSIT CLAIM OF RS. 5,13,071/- AND PROVISI ON AGAINST REFUND OF INSURANCE PREMIUM OF RS. 13,101/-, DEBITED TO THE PROFIT AND LOSS ACCOUNT, WHILE COMPUTING BOOK PROFITS UNDER SECTION 115JB OF THE ACT. GROUNDS OF APPEALS NO. 1 AND 1.1 AND ADDITIONAL GRO UNDS OF APPEAL : 7. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON RECORD BEFORE US. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER ERRED IN DENYI NG THE DEDUCTION UNDER 80HHC OF THE ACT ON THE AMOUNTS RELATABLE TO DEPB C REDIT, IN VIEW OF THE DECISIONS OF HONBLE SUPREME COURT IN THE CASE OF C IT VS. AVANI EXPORTS 232 5 ITA NO. 1776,1777/DEL/2011 SATLEJ INDUSTRIES LTD. TAXMAN 357 AND IN THE CASE OF TOPMAN EXPORT VS. CIT 342 ITR 49(SC ). THE LD. COUNSEL FURTHER ELABORATED THAT AS A CONSEQUENCE TO THE DECISION OF SUPREME COURT IN THE CASE OF AVANI EXPORTS(SUPRA) 3 RD & 4 TH PROVISO INSERTED IN THE YEAR 2005 TO SECTION 80HHC WOULD NOT BE APPLICABLE TO AY 2003-04 AND 2004-05. THEREFORE, ASSESSING OFFICER ERRED IN DENYING DEDUC TION U/S 80HHC OF THE ACT BY APPLYING THE SAID PROVISO. THE LD. COUNSEL FURTH ER SUBMITTED THAT AS A CONSEQUENCE OF THE DECISION OF HONBLE SUPREME COUR T IN THE CASE OF TOPMAN EXPORT VS. CIT (SUPRA) PROFIT, IF ANY, ON TRANSFER OF DEPB CREDITS GETS EXCLUDED FROM THE PROFIT OF THE BUSINESS FOR THE PURPOSE OF COMPUTING DEDUCTION U/S 80HHC OF THE ACT, THUS, THE ASSESSEE WOULD BE ELIGI BLE FOR DEDUCTION U/S 80HHC OF THE ACT ON ENTIRE AMOUNT OF DEPB CREDIT. 8. THE LD. COUNSEL FURTHER SUBMITTED THAT THE AF ORESAID DECISION OF HONBLE SUPREME COURT IN THE CASES OF AVANI EXPORT (SUPRA) AND TOPMAN EXPORTS (SUPRA) ARE SQUARELY APPLICABLE IN THE PRESENT CA SE OF THE ASSESSEE AND THEREFORE, THEN THE APPELLANT SHOULD BE HELD ELIGI BLE FOR DEDUCTION U/S 80HHC OF THE ACT ON ENTIRE PROFITS INCLUDING THE GROSS FA CE VALUE OF DEPB CREDIT AND THE AO MAY BE DIRECTED TO RECOMPUTED DEDUCTION U/S 80HHC OF THE ACT BY INCLUDING THE GROSS FACE VALUE OF DEPB CREDIT, AS H AS BEEN HELD BY HONBLE APEX COURT. THE LD. COUNSEL FURTHER SUBMITTED THAT DEDUCTION U/S 80HHC OF THE ACT WE DIRECTED TO BE ALLOWED TO THE ASSESSEE A T BOTH THE STAGES I.E. COMPUTING THE INCOME UNDER NORMAL PROVISIONS AS WEL L AS WHILE COMPUTING THE BOOK PROFITS U/S 115JB IF THE ACT. 9. REGARDING ADDITIONAL GROUNDS RAISED BY ASSESSEE , THE LD. COUNSEL POINTED OUT THAT THESE ARE CONNECTED WITH GROUND NO. 1 AND RELATE TO MANNER/COMPUTATION OF AMOUNT TO BE ALLOWED AS REDUC TION U/S 80HHC OF THE ACT WHILE COMPUTING BOOK PROFITS AND ALSO TO THE MA NNER WHILE COMPUTING AND ALSO MANNER BOOK PROFITS U/S 115JB OF THE ACT. THE LD. COUNSEL OF THE 6 ITA NO. 1776,1777/DEL/2011 SATLEJ INDUSTRIES LTD. ASSESSEE FINALLY SUBMITTED THAT THE AO MAY KINDLY B E DIRECTED TO RECOMPUTED THE BOOK PROFIT IN THE LIGHT OF DECISIONS OF HONBL E SUPREME COURT IN THE CASE OF AJANTA PHARMA (SUPRA), AND TOPMAN EXPORTS (SUPRA ) AND AVANI EXPORT (SUPRA) U/S 115JB OF THE ACT WITH REFERENCE TO THE ADJUSTED BOOK PROFITS AS HELD BY THE SUPREME COURT IN THE CASE OF CIT VS. BA HARI INFORMATION TECHNOLOGY SYSTEM PVT. LTD. REPORTED AS 340 ITR 593 (SC) AND THE AO MAY ALSO KINDLY BE DIRECTED TO ALLOW REDUCTION OF 100% EXPOR T PROFITS AS COMPUTED U/S 80HHC OF THE ACT. 10. REPLYING TO THE ABOVE THE LD. DEPARTMENTAL R EPRESENTATIVE (DR) STRONGLY SUPPORTED THE ACTION OF THE AO AS WELL AS THE IMPUG NED ORDER OF THE CIT(A). HOWEVER, HE FAIRLY SUBMITTED THAT THE DEPARTMENT HA S NO SERIOUS OBJECTION IF GROUND NO. 1 AND 1.1 AND ADDITIONAL GROUNDS OF THE ASSESSEE ARE RESTORE TO THE FILE OF AO FOR AFRESH ADJUDICATION IN THE LIGHT OF RELEVANT DECISIONS OF HONBLE SUPREME COURT(SUPRA) WHICH WERE NOT IN-EXISTENCE A T THE TIME OF PASSING THE IMPUGNED ASSESSMENT ORDER. 11. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSIO N OF BOTH THE SIDES, FROM THE RELEVANT ASSESSMENT ORDERS WE NOTE THAT THE ASS ESSMENT ORDER FOR AY 2003-04 WAS PASSED ON 29.3.2006 AND THE ASSESSMENT ORDER FOR AY 2004-05 WAS PASSED ON 26.12.2006 AND MUCH WATER HAS BEEN FL OWN FROM THESE DATES TO TILL DATE. WE RESPECTFULLY NOTE THAT THE CONTROV ERSY IN REGARD TO COMPUTATION OF BOOK PROFITS U/S 80HHC OF THE ACT AN D U/S 115JB OF THE ACT HAS BEEN SETTLED BY HONBLE APEX COURT BY THE LAND MARKED DECISION IN THE CASE OF AJANTA FARMA (SUPRA), AVANI EXPORTS (SUPRA) AND TOPMAN EXPORTS (SUPRA). THEREFORE, WE FIND IT APPROPRIATE TO RESTO RE THESE GROUNDS TO THE FILE OF AO FOR AFRESH ADJUDICATION AFTER CONSIDERING THE DICTA OF HONBLE APEX COURT IN THE AFORESAID DECISIONS AND OTHER RELEVANT DECIS IONS AND AS PER PROVISIONS OF THE ACT. THEREFORE, GROUND NO. 1 AND 1.1 ALONG W ITH ADDITIONAL GROUNDS OF 7 ITA NO. 1776,1777/DEL/2011 SATLEJ INDUSTRIES LTD. THE ASSESSEE IN BOTH THE APPEALS ARE RESTORED TO TH E FILE OF AO FOR AFRESH ADJUDICATION AFTER AFFORDING DUE OPPORTUNITY OF HEA RING FOR THE ASSESSEE AND WITHOUT BEING PREJUDICED FROM THE EARLIER ASSESSMEN T AND IMPUGNED ORDERS FOR BOTH THE YEARS. 12. ACCORDINGLY, THESE GROUNDS OF THE ASSESSEE ARE DEEMED TO BE ALLOWED FOR STATISTICAL PURPOSES. GROUNDS NO. 2, 3 & 4 OF THE ASSESSEE IN AY 2003-04 : APROPOSE THESE GROUNDS WE HAVE HEARD ARGUMENTS OF B OTH THE SIDES AND CAREFULLY PERUSED THE RELEVANT MATERIALS PLACED ON RECORD BEFORE US. THE LD. COUNSEL OF THE ASSESSEE, INTENDED THAT THE CIT(A) W RONGLY TOOK AN ACTION OF ENHANCING AND DIRECTING THE AO TO RECOMPUTED BOOK P ROFITS U/S 115JB OF THE ACT BY DIRECTING CERTAIN UPWARD ADJUSTMENTS. THE LD . COUNSEL ALSO POINTED OUT WITHOUT PREJUDICE TO GROUND NO.2 THAT THE CIT(A) AL SO ERRED IN DIRECTING THE AO TO NOT ALLOW REDUCTION OF RS. 21,41,540/- TRANSFERR ED FROM DEFERRED GOVT. SUBSIDY RESERVE A/C TO THE P& L ACCOUNT, WHILE COM PUTING BOOK PROFITS U/.S 115JB OF THE ACT. REGARDING GROUND NO. 4 THE LD. CO UNSEL ALSO POINTED OUT THAT CIT(A) INCORRECTLY DIRECTED THE AO TO MAKE UPWARD A DJUSTMENT OF PROVISION AGAINST TRANSIT CLAIM OF RS. 5,13,071/- AND PROVISI ON AGAINST TRANSIT CLAIM OF RS. 5,13,071/- AND PROVISION OF INSURANCE PREMIUM OF RS . 13,101/- WHILE COMPUTING BOOK PROFITS U/S 115JB OF THE ACT. THE L D. COUNSEL PRAYED THAT IF THE MAIN ISSUE OF DENIAL OF DEDUCTION CLAIMED U/S 8 0HHC OF THE ACT AT BOTH THE OCCASIONS I.E. WHILE COMPUTING INCOME UNDER NO RMAL PROVISIONS AND WHILE COMPUTING DEEMED INCOME U/S 115JB OF THE ACT IS RES TORED TO THE FILE OF THE AO THEN THE GROUND NO. 2,3& 4 BEING RELATED TO AND CONSEQUENTIAL TO MAIN ISSUE MAY ALSO BE RESTORED TO THE FILE OF THE AO FO R AFRESH ADJUDICATION ALONG WITH THE MAIN ISSUE. 8 ITA NO. 1776,1777/DEL/2011 SATLEJ INDUSTRIES LTD. 13. THE LD. DR STRONGLY SUPPORTED THE ACTION OF THE AUTHORITIES BELOW AND CONTENDED THAT THE AO WAS QUITE JUSTIFIED IN DENYIN G BENEFIT OF SECTION 80HHC OF THE ACT AND IN CALCULATING DEEMED INCOME U/S 115 JB OF THE ACT. THE LD. DR ALSO SUPPORTED THE ACTION OF THE AO AS WELL AS OF THE CIT(A) IN ENHANCING AND UPHOLDING THE CONCLUSION OF THE AO PERTAINING TO GR OUNDS NO. 2, 3 & 4. HOWEVER, HE FAIRLY SUBMITTED THAT IF IT IS FOUND JU ST AND PROPER TO RESTORE THESE ISSUES TO THE FILE OF THE AO FOR ADJUDICATION WITH THE MAIN ISSUE, THEN DEPARTMENT HAS NO SERIOUS OBJECTION TO THAT. 14. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSION S, WE ARE OF THE VIEW THAT SINCE BY THE EARLIER PART OF THIS ORDER WE HAVE RES TORED OF MAIN ISSUE TO THE FILE OF THE AO FOR A FRESH ADJUDICATION HENCE, WE A LSO FIND IT APPROPRIATE TO RESTORE THESE ISSUES TO THE FILE OF THE AO IN THE S IMILAR LINE. THUS, GROUNDS NO. 2, 3 & 4 BEING RELATED TO MAIN ISSUE OF COMPUTATIO N OF PROFITS UNDER NORMAL PROVISIONS AS WELL IN REGARD TO DEEMED INCOME U/S 1 15JB OF THE ACT ARE RESTORED TO THE FILE OF THE AO FOR AFRESH ADJUDICAT ION AFTER AFFORDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. CONSEQUENTL Y, GROUND NOS. 2, 3 & 4 ARE DEEMED TO BE ALLOWED FOR STATISTICAL PURPOSES. GROUND NOS. 2 & 3 IN 1771/DEL./2011 FOR AY 2004-05 : 15. BOTH PARTIES AGREED THAT FACTS AND CIRCUMSTA NCES IN REGARD TO GROUND NO. 2 & 3 FOR AY 2004-05 ARE SIMILAR TO EARLIER AY 200 3-04 HENCE, OUR CONCLUSION FOR AY 2003-04 WOULD APPLY MUTATIS MUTANDIS GROUND NOS. 2 & 3 OF THE ASSESSEE FOR AY 2004-05 AND THUS SAME ARE ALSO REST ORED TO THE FILE OF THE AO FOR AFRESH ADJUDICATION ALONG WITH MAIN GROUND OF T HE ASSESSEE. GROUND NO. 4 FOR AY 2004-05 : 16. APROPOS THIS GROUND THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE CIT(A) ALSO ERRED IN DIRECTING THE AO TO COMPLETE T HE AMOUNT OF DISALLOWANCE U/S 14A OF THE ACT, WHILE COMPUTING BOOK PROFITS UN DER SECTION 115JB OF THE 9 ITA NO. 1776,1777/DEL/2011 SATLEJ INDUSTRIES LTD. ACT, WITHOUT APPRECIATING THAT NO EXPENSES HAD, IN FACT, BEEN INCURRED BY THE ASSESSEE FOR EARNING EXEMPT INCOME. THE LD. COUNSEL SUBMITTED THAT THIS ISSUE MAY ALSO BE RESTORED TO THE FILE OF THE AO FO R AFRESH ADJUDICATION ALONG WITH MAIN ISSUE. THE DR REITERATING HIS SUBMISSION MADE AND NOTED BY TOWARDS GROUND NO. 2 & 3 AND ALSO DID NOT SERIOUSLY OBJECT TO THE RESTORATION OF THIS ISSUE TO THE FILE OF THE AO IN THE SIMILAR LINE. 17. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS , WE ARE OF THE VIEW THAT SINCE, WE HAVE RESTORED MAIN ISSUE TO THE FILE OF T HE AO THEN CONTROVERSY REGARDING GROUND NO. 4 FOR AY 2004-05 BEING RELATED TO MAIN ISSUE OF COMPUTATION OF BOOK PROFITS U/S 115JBOF THE ACT ALS O DESERVES TO BE RESTORED TO THE FILE OF THE AO FOR AFRESH CONSIDERATION AND WE RESTORE THE SAME TO THE FILE OF THE AO FOR RE ADJUDICATION ALONG WITH MAIN GROUND OF THE ASSESSEE. ACCORDINGLY, GROUND NO. 4 OF THE ASSESSEE FOR AY 20 04-05 IS ALSO DEEMED TO BE ALLOWED FOR STATISTICAL PURPOSES. 18. IN THE RESULT, BOTH THE APPEALS OF THE ASSE SSEE ARE DEEMED TO BE ALLOWED FOR STATISTICAL PURPOSES WITH THE DIRECTIO NS AS NOTED ABOVE. ORDER PRONOUNCED IN THE COURT ON 24 /02/2016 . SD/- SD/- ( G.D.AGARWAL ) (C.M.GARG) VICE PRESIDENT J UDICIAL MEMBER DATED: 24 / 02/2016 *BINITA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 10 ITA NO. 1776,1777/DEL/2011 SATLEJ INDUSTRIES LTD. DATE INITIAL 1. DRAFT DICTATED ON 12.02.2016 2. DRAFT PLACED BEFORE AUTHOR 12.02.2016 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.