M/s. Meenam Fisheries Ltd., CHENNAI V. ITO (OSD), CHENNAI

ITA 1828/CHNY/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51704 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 17-08-2011
• Assessment Year: 1999-2000
• Appeal Filed On: 27-10-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHA JI P JACOB SRDR
• Assessee Lawyers: T T DURAIRAJ KANDIAR
• Keywords: Capital asset; Depreciation; Capital receipt; Unabsorbed depreciation
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO. 1828 & 1829/MDS/2010 (ASSESSMENT YEARS : 1999-2000 & 2000-01) M/S MEENAM FISHERIES LTD., NO.14 VYASAR STREET, T. NAGAR, CHENNAI 600 017. PAN : AAACM2597F (APPELLANT) V. THE INCOME TAX OFFICER, COMPANY CIRCLE IV(2), CHENNAI 600 034. (RESPONDENT) APPELLANT BY : SHRI T.T. DURAIRAJ KANDIAR, CA RESPONDENT BY : SHRI SHA JI P. JACOB, SR-DR DATE OF HEARING : 17.08.2011 DATE OF PRONOUNCEMENT : 19.08.2011 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : THESE ARE APPEALS FILED BY THE ASSESSEE AGAINST OR DERS DATED 25.08.2010 OF COMMISSIONER OF INCOME TAX (APPEALS)- V, CHENNAI, FOR THE RESPECTIVE ASSESSMENT YEARS. 2. APPEAL FOR ASSESSMENT YEAR 1999-2000 IS TAKEN UP FIRST FOR DISPOSAL. I.T.A. NOS. 1828 & 1829/MDS/10 2 3. GROUND NO.1 WAS NOT PRESSED BY THE LD. COUNSEL F OR THE ASSESSEE. 4. VIDE ITS GROUND NO.2, GRIEVANCE RAISED BY THE AS SESSEE IS THAT CIT(APPEALS) CONFIRMED THE ADDITION OF ` 93 LAKHS ON ACCOUNT OF WAIVER OF PRINCIPAL PORTION OF A TERM LOAN. 5. SHORT FACTS APROPOS ARE THAT ASSESSEE HAD IN ITS AUDIT REPORT IN FORM 3CD FOR THE RELEVANT PREVIOUS YEAR, MENTIONED CAPITAL RECEIPT OF ` 93 LAKHS, BEING PRINCIPAL AMOUNT OF A LOAN WAIVED BY SICICI. ASSESSING OFFICER FOUND THAT THE SAID AMOUNT THOUGH IT WAS ON ACCOUNT OF PRINCIPAL OF LOAN WAIVED BY SICICI, WAS ENTERED INTO PROFIT AND LOSS APPROPRIATION ACCOUNT. THERE WAS AN INTER EST WAIVER OF ` 45,40,710/- ALSO, BUT, FOR WHICH NO CLAIM WHATSOEVE R WAS MADE BY THE ASSESSEE. WITH REGARD TO PRINCIPAL WAIVER, CON TENTION OF THE ASSESSEE WAS THAT SECTION 41 COULD NOT BE APPLIED S INCE LOAN WAS TAKEN FOR ACQUISITION OF CAPITAL ASSET. HOWEVER, A SSESSING OFFICER RELYING ON THE DECISION OF HON'BLE APEX COURT IN TH E CASE OF CIT V. T.V. SUNDARAM IYENGAR AND SONS LTD. (222 ITR 344), WAS OF THE OPINION THAT MONEY WAS RECEIVED BY THE ASSESSEE FRO M SICICI ONLY IN THE COURSE OF CARRYING ON ITS BUSINESS AND THOUGH I T WAS A DEPOSIT OF I.T.A. NOS. 1828 & 1829/MDS/10 3 CAPITAL NATURE AT THE POINT OF RECEIPT, BY EFFLUX O F TIME, SUCH MONEY HAD BECOME THAT OF THE ASSESSEE. HE, THEREFORE, MA DE AN ADDITION OF ` 93 LAKHS TO THE TOTAL INCOME. 6. IN ITS APPEAL BEFORE CIT(APPEALS), ARGUMENT OF T HE ASSESSEE WAS THAT THE AMOUNT WAS ORIGINALLY RECEIVED AS A LO AN FOR PURCHASE OF PLANT AND MACHINERY AND THE PRINCIPAL AMOUNT OF ` 93 LAKHS WAS WAIVED BY M/S SICICI AS A PART OF ONE-TIME SETTLEME NT. HOWEVER, LD. CIT(APPEALS) WAS NOT IMPRESSED. ACCORDING TO HIM, THOUGH THE ASSESSEE HAD RELIED ON THE DECISION OF HON'BLE BOMB AY HIGH COURT IN THE CASE OF MAHINDRA & MAHINDRA LTD. V. CIT (261 IT R 501), IN A LATER DECISION, THE SAME HIGH COURT IN THE CASE OF SOLID CONTAINERS LTD. V. DCIT (308 ITR 417) HAD TAKEN A DIFFERENT VIEW THAT CHARACTER OF RECEIPT WAS NOT DEPENDENT ON THE TREATMENT GIVEN BY THE ASSESSEE. AS PER LD. CIT(APPEALS), ASSESSING OFFICER HAD TAKE N A CORRECT VIEW THAT ASSESSEE HAD BECOME RICHER BY A SUM OF ` 93 LAKHS ON ACCOUNT OF WAIVER OF LOAN AND THIS WAS TO BE TAXED. HE UPH ELD THE ORDER OF ASSESSING OFFICER. 7. NOW BEFORE US, LEARNED A.R. SUBMITTED THAT DECIS ION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF SOLID CONTAINERS L TD. (SUPRA) WAS I.T.A. NOS. 1828 & 1829/MDS/10 4 NOT APPLICABLE ON FACTS. ACCORDING TO HIM, THE LOA N WAS TAKEN BY THE ASSESSEE FOR ACQUISITION OF PLANT AND MACHINERY AND SETTLEMENT WAS OF THE LOAN AMOUNT AND NOT THE INTEREST AMOUNT. TH EREFORE, ACCORDING TO HIM, DECISION OF BOMBAY HIGH COURT IN THE CASE O F MAHINDRA & MAHINDRA LTD. (SUPRA) WAS APPLICABLE AND THE SAID A MOUNT COULD NOT BE CONSIDERED AS INCOME OF THE ASSESSEE EITHER UNDE R SECTION 41 OR UNDER SECTION 28(IV) OF INCOME-TAX ACT, 1961 (IN SH ORT THE ACT). 8. PER CONTRA, LEARNED D.R. SUBMITTED THAT BY THE W AIVER OF LOAN THROUGH ONE-TIME SETTLEMENT, THE WHOLE DUES OF SICI CI WERE OBLITERATED AND THEREFORE, THE DECISION OF BOMBAY H IGH COURT IN THE CASE OF MAHINDRA & MAHINDRA LTD. (SUPRA) HAD NO APP LICABILITY. ACCORDING TO HIM, ASSESSEE HAD BECOME RICHER BY VIR TUE OF THE WAIVER AND WAS RIGHTLY TAXED FOR SUCH SUM BY THE A.O. 9. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL C ONTENTIONS. THERE IS NO DISPUTE TO THE FACT THAT SUM OF ` 93 LAKHS WAIVED BY SICICI, WAS A PART OF LOAN TAKEN BY THE ASSESSEE FR OM THEM FOR PURCHASE OF PLANT AND MACHINERY. THERE IS ALSO NO DISPUTE THAT THE INTEREST WAIVER OF ` 45,40,710/- WAS NOT CLAIMED BY THE ASSESSEE. A.O. RELIED ON THE DECISION OF HON'BLE APEX COURT I N THE CASE OF T.V. I.T.A. NOS. 1828 & 1829/MDS/10 5 SUNDARAM IYENGAR AND SONS LTD. (SUPRA) FOR MAKING T HE ADDITION, WHEREAS, LD. CIT(APPEALS) RELIED ON THE DECISION OF HON'BLE BOMBAY HIGH COURT IN SOLID CONTAINERS LTD. (SUPRA) FOR CON FIRMING THE SAME. IN THE CASE OF T.V. SUNDARAM IYENGAR AND SONS LTD. (SUPRA), WHAT WAS RECEIVED BY THE ASSESSEE WAS DEPOSITS IN THE CO URSE OF BUSINESS AND SUCH DEPOSITS WERE RECEIVED AS A PART OF ITS TR ADING OPERATION. DURING THE EFFLUX OF TIME, THE DEPOSITS WHICH REMAI NED UNCLAIMED BY THE PARTIES, BECAME THE MONEY OF THE ASSESSEE. HER E, ON THE OTHER HAND, WHAT WAS RECEIVED BY THE ASSESSEE WAS NOT DEP OSIT BUT LOAN FOR PURCHASE OF PLANT AND MACHINERY. THERE IS NO C ASE FOR THE REVENUE THAT SUCH LOAN WAS NOT RAISED FOR ACQUISITI ON OF PLANT AND MACHINERY. DUE TO EFFLUX OF TIME, SUCH A LOAN DID NOT BECOME THE MONEY OF THE ASSESSEE. ONLY AT THE POINT OF ENTERI NG INTO ONE-TIME SETTLEMENT WITH M/S SICICI, THE LOAN AMOUNT GOT WAI VED. THIS CANNOT BE COMPARED WITH THE CASE OF A CUSTOMER DEPOSIT WHI CH HAD, BY EFFLUX OF TIME, DUE TO ABSENCE OF CLAIM OF THE CONCERNED P ARTIES, BECAME THE MONEY OF THE ASSESSEE. NOW, COMING TO THE DECI SION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF SOLID CONTAINERS L TD. (SUPRA) RELIED ON BY LD. CIT(APPEALS), NO DOUBT, THEIR LORDSHIPS D ID CONSIDER THEIR EARLIER DECISION IN MAHINDRA & MAHINDRA LTD. (SUPRA ). IN MAHINDRA & I.T.A. NOS. 1828 & 1829/MDS/10 6 MAHINDRA LTD. (SUPRA), THE ASSESSEE HAD CONTINUED T O PAY INTEREST FOR A PERIOD OF TEN YEARS DESPITE SETTLEMENT OF PRINCIP AL AND THE LOAN AGREEMENT FOR PURCHASE OF TOOLINGS WAS ENTERED INTO MUCH PRIOR TO THE APPROVAL OF THE LOAN BY THE RESERVE BANK OF INDIA. BUT, IF WE LOOK AT THE FACTS OF SOLID CONTAINERS LTD. (SUPRA), IT CAN BE SEEN THAT THE LOAN TAKEN BY THE ASSESSEE FOR BUSINESS PURPOSES, WAS WR ITTEN BACK, BASED ON CONSENT TERMS BETWEEN ONE OTHER CONCERN AN D THE ASSESSEE. IT WAS FOR THIS REASON, THE A.O. CONSIDE RED THE CREDIT BALANCE WRITTEN BACK AS THE INCOME OF THE ASSESSEE, THE BENEFIT BEING DIRECTLY ARISING OUT OF THE BUSINESS ACTIVITY OF TH E ASSESSEE. HERE, ON THE OTHER HAND, WHAT HAS BEEN WAIVED IS A LOAN TAKE N FOR ACQUIRING PLANT AND MACHINERY. THE WAIVER HAS BEEN MADE BY A ONE-TIME SETTLEMENT. IT CANNOT BE CONSIDERED AS A BENEFIT O F PERQUISITE ARISING FROM THE BUSINESS OF THE ASSESSEE FOR APPLICATION O F SECTION 28(IV) OF THE ACT. ASSESSEE HAD ALSO NEVER CLAIMED ANY ALLOW ANCE FOR THE PRINCIPAL AMOUNT OF LOAN AS DEDUCTION IN ANY OF THE YEARS. IN OUR OPINION, THE FACTS OF THE CASE ARE NOT SUCH THAT TH E LOAN AMOUNT WAIVED BY M/S SICICI CAN BE CONSIDERED AS A BENEFIT OR PERQUISITE ARISING FROM THE BUSINESS OF THE ASSESSEE. NOR CAN IT BE CONSIDERED AS INCOME UNDER SECTION 41 OF THE ACT. TILL THE MO MENT THE AMOUNT I.T.A. NOS. 1828 & 1829/MDS/10 7 WAS WAIVED BY THE SAID M/S SICICI, IT REMAINED A LO AN DUE FROM THE ASSESSEE TO M/S SICICI. THERE WAS NO CONVERSION BY THE ASSESSEE OF THE LOAN TO DEPOSIT OR DEPOSIT TO ITS OWN MONEY AT ANY POINT OF TIME. WE ARE, THEREFORE, OF THE OPINION THAT ASSESSEES C ASE CAN BE MORE COMPARED WITH THE DECISION OF HON'BLE BOMBAY HIGH C OURT IN THE CASE OF MAHINDRA & MAHINDRA LTD. (SUPRA) AND THE AM OUNT COULD NOT BE CONSIDERED AS INCOME OF THE ASSESSEE. ADDITION MADE IN THIS REGARD IS DELETED. GROUND NO.2 IS ALLOWED. 10. VIDE ITS GROUND NO.3, GRIEVANCE OF THE ASSESSEE IS THAT LD. CIT(APPEALS) HELD DEDUCTION UNDER SECTION 80HHC OF THE ACT TO BE MADE BEFORE SETTING OFF CARRIED FORWARD LOSS AND UN ABSORBED DEPRECIATION. 11. BEFORE US, LEARNED A.R. SUBMITTED THAT DEDUCTIO N UNDER SECTION 80HHC OF THE ACT WAS TO BE ALLOWED BEFORE SETTING O FF CARRIED FORWARD LOSS AND UNABSORBED DEPRECIATION. ACCORDING TO HIM , THE SCHEME OF THE ACT WOULD SHOW THAT ONLY AFTER ARRIVING AT THE TOTAL INCOME, THE CARRY FORWARD LOSS AND UNABSORBED DEPRECIATION COUL D BE CONSIDERED FOR SET OFF. LEARNED A.R. SUBMITTED THAT IF CARRIE D FORWARD LOSS AND UNABSORBED DEPRECIATION WERE SET OFF BEFORE CALCULA TING DEDUCTION I.T.A. NOS. 1828 & 1829/MDS/10 8 UNDER SECTION 80HHC OF THE ACT, IT WOULD RESULT IN SUBSTANTIAL REDUCTION OF THE AMOUNT OF CARRIED FORWARD LOSSES A ND UNABSORBED DEPRECIATION, FOR FUTURE YEARS. FURTHER, ACCORDING TO HIM, IT WILL NEGATE THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTI ON 80HHC OF THE ACT. 12. PER CONTRA, LEARNED D.R. SUBMITTED THAT ARGUMEN T OF THE ASSESSEE COULD NOT BE ACCEPTED SINCE IT WENT AGAINS T THE DECISION OF HON'BLE APEX COURT IN THE CASE OF IPCA LABORATORY L TD. V. DCIT (266 ITR 521). 13. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONTENTIONS. THE ASSESSEE HAD FIRST DEDUCTED ELIGIBLE DEDUCTION UNDER SECTION 80HHC OF THE ACT BEFORE ADJUSTING CARRIED FORWARD L OSSES. AS AGAINST THIS, ASSESSING OFFICER HAD FIRST ADJUSTED THE CARR IED FORWARD LOSSES AND UNABSORBED DEPRECIATION OF EARLIER YEARS, AFTER WHICH THERE WAS NOTHING LEFT FOR GIVING ANY DEDUCTION UNDER SECTION 80HHC OF THE ACT. THE QUESTION IS WHETHER ANY DEDUCTION UNDER SECTION 80HHC OF THE ACT COULD BE GIVEN BEFORE SETTING OFF CARRIED FORWA RD LOSS AND UNABSORBED DEPRECIATION. UNDER SECTION 80HHC(1), D EDUCTION HAS TO BE GIVEN IN COMPUTING THE TOTAL INCOME OF THE ASSES SEE. FOR I.T.A. NOS. 1828 & 1829/MDS/10 9 COMPUTING TOTAL INCOME OF THE ASSESSEE, BOTH PROFIT S AS WELL AS LOSSES HAVE TO BE TAKEN INTO CONSIDERATION AS HELD BY HON' BLE APEX COURT IN THE CASE OF IPCA LABORATORY LTD. (SUPRA) AT PARA 1 2 OF ITS ORDER. RELEVANT PARAS 12 AND 13 OF THE ORDER IS REPRODUCED HEREUNDER, FOR BREVITY:- 12. UNDER S. 80HHC(1) THE DEDUCTION IS TO BE GIVEN IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE. IN COM PUTING THE TOTAL INCOME OF THE ASSESSEE BOTH PROFITS AS WELL A S LOSSES WILL HAVE TO BE TAKEN INTO CONSIDERATION. SEC. 80AB IS RELEVANT. IT READS AS FOLLOWS: 80AB. WHERE ANY DEDUCTION IS REQUIRED TO BE MADE OR ALLOWED UNDER ANY SECTION INCLUDED IN THIS CHAPT ER UNDER THE HEADING C-DEDUCTIONS IN RESPECT OF CERTAIN INCOMES IN RESPECT OF ANY INCOME OF THE NATURE SPECIFIED IN THAT SECTIO N WHICH IS INCLUDED IN THE GROSS TOTAL INCOME OF THE ASSESSEE, THEN, NOTWITHSTANDING ANYTHING CONTAINED IN THAT SECTION, FOR THE PURPOSE OF COMPUTING THE DEDUCTION UNDER THAT SECTI ON, THE AMOUNT OF INCOME OF THAT NATURE AS COMPUTED IN ACCO RDANCE WITH THE PROVISIONS OF THIS ACT (BEFORE MAKING ANY DEDUCT ION UNDER THIS CHAPTER) SHALL ALONE BE DEEMED TO BE THE AMOUN T OF INCOME OF THAT NATURE WHICH IS DERIVED OR RECEIVED BY THE A SSESSEE AND WHICH IS INCLUDED IN HIS GROSS TOTAL INCOME. SEC. 80B(5) IS ALSO RELEVANT. SEC. 80B(5) PROVIDES THAT GROSS TOTAL INCOME MEANS TOTAL INCOME COMPUTED IN ACCORD ANCE WITH THE PROVISIONS OF THE I.T. ACT. 13. SEC. 80AB IS ALSO IN CHAPTER VI-A. IT STARTS W ITH THE WORDS WHERE ANY DEDUCTION IS REQUIRED TO BE MADE OR ALLOWED UNDER ANY SECTION OF THIS CHAPTER. THIS WOULD INCL UDE S. 80HHC. SEC. 80AB FURTHER PROVIDES THAT NOTWITHSTANDING AN YTHING CONTAINED IN THAT SECTION. THUS, S. 80AB HAS BEEN GIVEN AN I.T.A. NOS. 1828 & 1829/MDS/10 10 OVERRIDING EFFECT OVER ALL OTHER SECTIONS IN CHAPTE R VI-A. SEC. 80HHC DOES NOT PROVIDE THAT ITS PROVISIONS ARE TO P REVAIL OVER S. 80AB OR OVER ANY OTHER PROVISION OF THE ACT. SEC. 8 0HHC WOULD THUS BE GOVERNED BY S. 80AB. DECISIONS OF THE BOMBA Y HIGH COURT AND THE KERALA HIGH COURT TO THE CONTRARY CANN OT BE SAID TO BE THE CORRECT LAW. SEC. 80AB MAKES IT CLEAR TH AT THE COMPUTATION OF INCOME HAS TO BE IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. IF THE INCOME HAS TO BE COM PUTED IN ACCORDANCE WITH THE PROVISIONS OF THE ACT, THEN NOT ONLY PROFITS BUT ALSO LOSSES HAVE TO BE TAKEN INTO CONSIDERATION . BROUGHT FORWARD LOSSES AND UNABSORBED DEPRECIATION FROM BUSINESS ARE ITEMS WHICH HAVE TO BE ADJUSTED WITHIN THE HEAD OF INCOME ITSELF AND GROSS TOTAL INCOME HAS TO BE ARRIVED AT AFTER C ONSIDERING SUCH BROUGHT FORWARD LOSSES AND UNABSORBED DEPRECIATION. DEDUCTION UNDER CHAPTER VI-A CAN BE GIVEN ONLY FROM SUCH GROS S TOTAL INCOME TO ARRIVE AT THE TOTAL INCOME. THIS BEING SO, WE ARE OF THE OPINION THAT ASSESSING OFFICER WAS WELL JUSTIFIED IN FIRST SETTI NG OFF CARRIED FORWARD LOSSES AND UNABSORBED DEPRECIATION. IT MAY BE THAT AFTER SUCH SET OFF, NOTHING LEFT WHATSOEVER FOR DEDUCTION UNDER SE CTION 80HHC OF THE ACT. BUT, THIS COULD NOT BE A GROUND FOR A CHANGE IN THE SCHEME OF THE ACT FOR ARRIVING AT GROSS TOTAL INCOME AND TOTA L INCOME. WE ARE, THEREFORE, OF THE VIEW THAT THERE IS NO MERIT IN TH E PLEADINGS OF THE ASSESSEE IN THIS REGARD. GROUND NO.3 STANDS DISMIS SED. I.T.A. NOS. 1828 & 1829/MDS/10 11 14. VIDE ITS GROUND NO.4, GRIEVANCE OF THE ASSESSEE IS THAT LD. CIT(APPEALS) DIRECTED THE A.O. TO RECOMPUTE THE BOO K PROFIT UNDER SECTION 115JA OF THE ACT IN A VAGUE MANNER. ACCORD ING TO ASSESSEE, NO CLEAR CUT DIRECTION WAS GIVEN TO A.O. RELEVANT DIRECTION GIVEN BY LD. CIT(APPEALS) IS REPRODUCED HEREUNDER:- 8.1 FIND THAT THIS ISSUE IS DECIDED IN FAVOUR OF T HE ASSESSEE VIDE ORDER OF THE HON'BLE TRIBUNAL IN ITA NO.2313/M DS/2006 DATED 29.04.2008 FOR THE A.Y. 2002-03 IN ASSESSEES OWN CASE. IN PARA 4 OF THE SAID ORDER, AS RELIED UPON BY THE S PECIAL BENCH DECISION IN THE CASE OF DCIT V. SYNCOME FORMULATIONS (I) LTD. AS REPORTED IN 292 ITR 144 (AT) DATED 14.03.2007 FOR T HE PROPOSITION THAT FOR THE PURPOSE OF COMPUTATION OF BOOK PROFIT FOR COMPUTATION OF DEDUCTION UNDER SECTION 80HHC, I T IS NOT PROFIT AS COMPUTED UNDER THE HEAD PROFIT AND GAINS OF THE BUSINESS THAT IS TO BE APPLIED BUT IT IS BOOK PRO FIT AS PER BOOKS OF ACCOUNT PREPARED IN ACCORDANCE WITH THE PROVISIO NS OF COMPANIES ACT, 1956. CBDT CIRCULAR NOS.559 DATED 0 4.05.1990 AND 680 DATED 21.12.1994 HAVE ALREADY BEEN CITED IN SUPPORT OF THIS INTERPRETATION. THUS, THE ASSESSEE SUCCEEDS O N THIS GROUND. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO RE COMPUTE THE BOOK PROFIT UNDER SECTION 15JB OF THE I.T. ACT. WE FIND THAT LD. CIT(APPEALS) HAS FOLLOWED DECISION OF THIS TRIBUNAL IN THE CASE OF SYNCOME FORMULATIONS (I) LTD. (SUPRA). LD. CIT(APPEALS) HAD DIRECTED THE A.O. TO RECOMPUTE THE BOOK PROFITS FOLLOWING THIS DECISION. WE DO NOT FIND ANYTHING UNCLEAR IN THE D IRECTION GIVEN BY LD. CIT(APPEALS). THOUGH STRENUOUS EFFORTS WERE MADE B Y THE LEARNED A.R. IN THIS REGARD, WE ARE OF THE OPINION THAT THE DIRECTION GIVEN BY LD. I.T.A. NOS. 1828 & 1829/MDS/10 12 CIT(APPEALS) WAS CLEAR AND THERE IS NOTHING VAGUE A BOUT IT. GROUND NO.4 STANDS DISMISSED. 15. IN THE RESULT, APPEAL IS PARTLY ALLOWED FOR STA TISTICAL PURPOSES. 16. NOW, LET US TAKE THE APPEAL FOR ASSESSMENT YEAR 2000-01. 17. GROUND NO.1 WAS NOT PRESSED BY LEARNED A.R. 18. GROUND NO.2 IS SIMILAR TO GROUND NO.3 RAISED BY THE ASSESSEE FOR ASSESSMENT YEAR 1999-2000. WE HAVE ALREADY DIS MISSED THIS ISSUE AT PARA 13 ABOVE. FOLLOWING THE SAME REASONI NG, WE DISMISS THIS GROUND FOR IMPUGNED ASSESSMENT YEAR AS WELL. 19. GROUND NO.3 RAISED BY THE ASSESSEE IS SIMILAR T O GROUND NO.4 RAISED BY IT FOR ASSESSMENT YEAR 1999-2000. WE HAV E AT PARA 14 ABOVE DISMISSED THE SAID GROUND. FOR THE SAME REAS ONING, WE DISMISS GROUND NO.3 FOR THE IMPUGNED ASSESSMENT YEA R ALSO. 20. APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2000 -01 IS DISMISSED. I.T.A. NOS. 1828 & 1829/MDS/10 13 21. TO SUMMARISE, APPEAL OF THE ASSESSEE FOR ASSESS MENT YEAR 1999-2000 IS PARTLY ALLOWED, WHEREAS APPEAL FOR ASS ESSMENT YEAR 2000-01 IS DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 19 TH AUGUST, 2011. SD/- SD/- (GEORGE MATHAN) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 19 TH AUGUST, 2011. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-V, CHENNAI-34 (4) CIT, CHENNAI-III, CHENNAI (5) D.R. (6) GUARD FILE