Appeal Details
Counselvise Citation
[2012] 140 COUNSELVISE.COM (IT) 63269 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 6 month(s) 27 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
28-12-2012
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
D
Next Hearing Date
30-10-2012
Assessment Year
2006-2007
Appeal Filed On
31-05-2010
Judgement Text
ITA NO 1865 /AHD/2010 A.YR.. 2006 -07. 1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AH MEDABAD (BEFORE SHRI MUKUL KR.SHRAWAT JM & SHRI ANIL CHATUR VEDI A.M.) I.T.A. NO.1865/AHD/2010. (ASSESSMENT YEAR: 2006-07) TORRENT POWER LTD., TORRENT HOUSE, NEAR DINESH HALL, OFF ASHRAM ROAD, AHMEDABAD. (APPELLANT) VS. ASSISTANT COMMISSIONER OF INCOME TAX,CIRCLE-8, A-WING, AJANTA COMMERCIAL CENTRE, ASHRAM ROAD, AHMEDABAD. (RESPONDENT) PAN: AAACT0294J APPELLANT BY : MR.VARTIK R. CHOKSHI, A.R. RESPONDENT BY : MR.D.P. GUPTA, CIT (D.R) ( )/ ORDER DATE OF HEARING : 30-10-2012 DATE OF PRONOUNCEMENT : 28-12-2012 PER: SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF THE LD. CIT (A)-XIV, AHMEDABAD DATED 19-2-2009 FOR THE ASSESSME NT YEAR 2006-07. 2. THE CONCISE GROUNDS RAISED BY THE ASSESSEE ARE A S UNDER:- 1. IN LAW AND IN THE FACTS OF THE CASE, THE LD. CI T (A) HAS ERRED IN NOT ADJUDICATING UPON GROUND NO.1 CHALLENGING THE V ALIDITY OF THE ASSESSMENT ORDER. 2. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN CONFIRMING AND ENHANCING ADDIT ION MADE BY THE A.O. BY APPLYING THE PROVISIONS OF SECTION 14 R.W. RULE 8D(2). ITA NO 1865 /AHD/2010 A.YR.. 2006 -07. 2 3.1. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF T HE APPELLANTS CASE, THE LD. CIT (A) HAS GROSSLY ERRED IN UPHOLDIN G THE DISALLOWANCE OF DEDUCTION FOR DEPRECIATION AMOUNTING TO RS.499.9 1 LACS CLAIMED BY THE APPELLANT @ 25% APPLICABLE TO INTANGIBLE ASSETS ON THE GROUND THAT THE APPELLANTS RIGHTS UNDER THE CONCERNED LEA SE DEEDS GRANTING LONG TERM LEASE OF LANDS TO THE APPELLANT WERE RECO VERED BY THE EXPRESSION OR ANY OTHER BUSINESS OR COMMERCIAL RIG HTS OF SIMILAR NATURE USED IN CLAUSE (B) OF EXPLANATION3 BELOW SU B-SECTION (1) OF SECTION 32. 3.2. WITHOUT PREJUDICE TO THE FOREGOING, IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE, THE LD. CIT (A) OUGHT TO HAVE APPRECIATED THAT IN TERMS OF THE RATIO OF THE DECIS ION OF THE GUJARAT HIGH COURT IN DCIT VS. SUN PHARMACEUTICALS INDUSTRY LTD. (227 CTR 206), THE APPELLANT DESERVED TO BE GRANTED FULL DED UCTION IN RESPECT OF THE EXPENDITURE ON LEASE PREMIA ACTUALLY INCURRED B Y THE APPELLANT IN THE PRESENT ASSESSMENT YEAR. 3.3. WITHOUT PREJUDICE TO THE FOREGOING, IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE, THE LD. CIT( A) OUGHT TO HAVE DIRECTED THE LD. CIT (A) FOR GRANTING PROPORTIONAT E DEDUCTION IN RESPECT OF THE PREMIA OF LEASE HOLD LANDS PAID BY T HE APPELLANT BASED ON THE PERIOD FOR WHICH THE APPELLANT HAD BEEN GRAN TED THE RESPECTIVE LEASES. 4. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN NOT ENTER TAINING GROUND NO.7 OF THE APPELLANTS APPEAL BEFORE HIM CHALLENGI NG THE LEVY OF INTEREST U/S. 234C AND U/S. 234D AS ALSO CHALLENGIN G WITHDRAWAL OF INTEREST EARLIER GRANTED TO THE APPELLANT U/S. 244A , ON THE GROUND THAT THE SAME WAS CONSEQUENTIAL IN NATURE. HE OUGHT TO H AVE APPRECIATED, INTERALIA, THAT VIDE ITS SAID GROUND, THE APPELLANT HAD CHALLENGED THE VERY LEVY OF INTEREST/WITHDRAWAL OF INTEREST AND AL SO THAT THE APPELLANTS CASE BEING SQUARELY COVERED BY THE RATI O OF THE GUJARAT HIGH COURT DECISION IN BHARAT MACHINERY & HARDWARE MARTS CASE (136 ITR 875) AND OF THE DECISION OF THE ITAT, DELH I BENCH IN HARYANA WAREHOUSING CORPORATION V. DCIT [252 ITR (A .T.) 34 ], THE LEVY AS ALSO WITHDRAWAL OF INTEREST DESERVED TO BE DELETED ALTOGETHER. 5. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE, THE LD. CIT (A) HAS GROSSLY ERRED IN REFUSING TO ADJUDICATE UPON GROUND NO.8 OF THE APPELLANTS APPEAL BEFORE HIM CH ALLENGING THE INITIATION OF PENALTY PROCEEDINGS U/S. 271(1)(C ) O N THE GROUND THAT THE ITA NO 1865 /AHD/2010 A.YR.. 2006 -07. 3 SAME WAS PREMATURE. HE OUGHT TO HAVE APPRECIATED, I NTERALIA, THAT WHEN THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE EMINENTLY SHOWED THAT THERE WAS NO WARRANT OR JUSTIFICATION F OR INITIATING PENALTY PROCEEDINGS U/S. 271(1)(C), HE OUGHT TO HAVE ORDERE D FOR THE CANCELLATION OF THOSE PROCEEDINGS. 6. THE APPELLANT CRAVES LEAVE TO ADD, AMEND AND/OR ALTER THE GROUND OR GROUNDS OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 3. OUT OF THE VARIOUS GROUNDS RAISED, ASSESSEE DID NOT PRESS GROUND NO.1 & 5 AND THEREFORE THE SAME ARE DISMISSED. GROU ND NO.4 BEING OF CONSEQUENTIAL IN NATURE AND THEREFORE NOT ADJUDICAT ED SEPARATELY. GROUND NO.6 BEING GENERAL IN NATURE, NOT ADJUDICATED. THUS THE EFFECTIVE GROUNDS BEFORE US ARE GROUND NO.2 AND 3. 4. THE BRIEF FACTS CULLED OUT FROM THE ORDERS OF A. O. AND CIT(A) ARE AS UNDER:- 5. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINES S OF GENERATION, TRANSMISSION AND DISTRIBUTION OF ELECTRICITY. TORRE NT POWER AEC LTD., AND TORRENT POWER GENERAL LTD., AMALGAMATED/MERGED WITH TORRENT POWER LTD. (ASSESSEE) BY ORDER OF HONBLE GUJARAT HIGH COURT D ATED 12-7-2006 WITH EFFECT FROM 1-4-2005. THE ASSESSEE ELECTRONICALLY F ILED ITS RETURN OF INCOME ON 29-12-2006 DECLARING TOTAL INCOME OF RS.265,84,4 6,020/-. THE CASE WAS SELECTED FOR SCRUTINY AND SUBSEQUENTLY THE ASSESSME NT WAS FRAMED U/S. 143(3) VIDE ORDER DATED 30-12-2008 AND THE TOTAL IN COME WAS DETERMINED AT RS.271,33,84,180/- BY MAKING VARIOUS ADDITIONS / DISALLOWANCES. AGGRIEVED BY THE ORDER OF A.O. ASSESSEE CARRIED TH E MATTER BEFORE THE CIT (A). CIT (A) VIDE HIS ORDER DATED 19-2-2009 GRANTED PARTIAL RELIEF TO THE ITA NO 1865 /AHD/2010 A.YR.. 2006 -07. 4 ASSESSEE. IT IS AGAINST THE AFORESAID ORDER OF CIT (A), THE ASSESSEE IS NOW IN APPEAL BEFORE US. GROUND NO.2 IS WITH RESPECT TO THE DISALLOWANCE MAD E U/S.14A R.W.S. RULE 8D. 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS A.O. OBSERVED THAT THE ASSESSEE HAD SHOWN EXEMPT INCOME COMPRISING OF TAX FREE INTEREST ON BONDS (RS.1,01,48,630/-) AND DIVIDEND (RS.12,98,69, 465/-) AGGREGATING TORS.14,00,18,095/-. ASSESSEE WAS ASKED TO SHOW CAU SE AS TO WHY DISALLOWANCE U/S. 14A SHOULD NOT BE MADE. THE ASSES SEE INTER ALIA SUBMITTED THAT OUT OF THE TOTAL EXEMPT INCOME OF RS .14 CRORE, THE AMOUNT OF RS.6,12,14,747/- WAS THE INCOME EARNED BY SUGEN PRO JECT. SINCE SUGEN PROJECT WAS UNDER CONSTRUCTION, NO EXPENDITURE WAS CLAIMED BY THE ASSESSEE IN RESPECT OF THE SAID PROJECT AND THEREFO RE THERE WAS NO QUESTION OF MAKING ANY DISALLOWANCE IN CONNECTION TO THE SAI D INCOME. WITH RESPECT TO THE REMAINING AMOUNT OF RS.7,88,03,348/- WHICH C OMPRISED OF DIVIDEND AND TAX FREE INTEREST, THE ASSESSEE SUBMITTED THAT THE INVESTMENTS WERE MADE OUT OF THE HUGE AMOUNT OF INTEREST FREE FUNDS AVAILABLE WITH IT IN THE FORM OF SHARE CAPITAL AND RESERVES (AMOUNTING TO RS .2607.18 CRORES). IT WAS FURTHER SUBMITTED THAT OUT OF THE TOTAL INVESTM ENTS OF RS.135.97 CRORES, RS.66.84 CRORE WERE SPECIFICALLY INVESTED OUT OF CO NTINGENCY RESERVE. THE INVESTMENT OF BALANCE AMOUNT OF RS.69.13 CRORE WERE MADE OUT OF ITS OWN FUNDS COMPRISING OF SHAREHOLDERS FUNDS AND FREE RES ERVES. IT WAS FURTHER SUBMITTED THAT DURING THE YEAR UNDER CONSIDERATION NO MAJOR EFFORTS WERE MADE BY ASSESSEE TO EARN THE EXEMPT INCOME AND THER EFORE NO PART OF EXPENDITURE WAS INCURRED TOWARDS INVESTMENT ACTIVIT Y. THE ASSESSEE THUS ITA NO 1865 /AHD/2010 A.YR.. 2006 -07. 5 SUBMITTED THAT NO PART OF ADMINISTRATIVE EXPENSES C OULD BE CONSIDERED TO HAVE BEEN INCURRED FOR THE PURPOSE OF EARNING EXEMP T INCOME. A.O. DID NOT AGREE WITH THE CONTENTION OF THE ASSESSEE. HE W AS OF THE VIEW THAT THE MUTUAL FUND TRANSACTION REVEALS HIGH FREQUENCY OF R EDEMPTION WHICH ACCORDING TO HIM REQUIRES CONSTANT FOLLOW UP AND MO NITORING. HE WAS THEREFORE OF THE VIEW THAT SOME PART OF THE EXPENSE S WAS INCURRED ON EMPLOYEES REMUNERATION AND ADMINISTRATIVE EXPENSES WHICH ARE ATTRIBUTABLE TO THE EARNING OF DIVIDEND INCOME. HE FURTHER OBSERVED THAT THE ASSESSEE HAS BORROWED INTEREST BEARING LOANS AND PA ID INTEREST AND FINANCIAL CHARGES TO THE TUNE OF RS.43.47 CRORES. H E ACCORDINGLY ESTIMATED 1% OF INTEREST EXPENDITURE ON RS.43.47 CRORES I.E. RS.43,47,000/- AND DISALLOWED IT U/S. 14A. AGGRIEVED BY THE ADDITION M ADE BY THE A.O., ASSESSEE CARRIED THE MATTER BEFORE THE CIT (A). 7. THE SUBMISSIONS MADE BY ASSESSEE BEFORE THE CIT (A) WERE NOT FOUND ACCEPTABLE BY HIM. HE WAS OF THE VIEW THAT TH OUGH THERE MAY NOT BE DIRECT EXPENSES INCURRED BY ASSESSEE FOR EARNING EX EMPT INCOME BUT INDIRECT EXPENSES IN THE NATURE OF ADMINISTRATIVE A ND ESTABLISHMENT EXPENSES CANNOT BE DENIED ALTOGETHER. CIT (A) RELY ING ON THE DECISION OF THE SPECIAL BENCH OF TRIBUNAL IN THE CASE OF DAGA C APITAL MANAGEMENT PVT. LTD. & OTHERS, WORKED OUT THE DISALLOWANCE U/S . 14A BY APPLYING THE PROVISIONS OF RULE 8D OF THE INCOME TAX RULES, 1962 . ACCORDING TO CIT (A), THE TOTAL DISALLOWANCE BY FOLLOWING THE METHOD PRE SCRIBED UNDER RULE 8D WORKED OUT TO RS.48,77,592/- BUT SINCE THE A.O. HAD ALREADY DISALLOWED RS.43,47,000/-, HE ENHANCED THE DISALLOWANCE TO THE EXTENT OF RS.5,30,592/-( 48,77,592 -43,47,000). AGGRIEVED BY THE ORDER OF THE CIT (A) THE ASSESSEE IS NOW IN APPEAL BEFORE US. ITA NO 1865 /AHD/2010 A.YR.. 2006 -07. 6 8. BEFORE US, THE LD. A.R. SUBMITTED THAT THE A.O. HAS MADE THE DISALLOWANCE U/S.14A ON AN ADHOC BASIS WITHOUT POIN TING OUT ANY SPECIFIC INSTANCE OF THE EXPENDITURE INCURRED TO EARN EXEMPT INCOME. HE FURTHER SUBMITTED THAT RULE 8D IS PROSPECTIVE IN NATURE AS HELD BY HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ BOYCE 328 ITR 80. AS THE ASSESSMENT YEAR IN THE PRESENT APPEAL IS 2006-07 HE SUBMITTED THAT THE PROVISIONS OF RULE 8D WERE NOT APPLICABLE TO THE YEAR UNDER APPEA L. HE FURTHER SUBMITTED THAT ON IDENTICAL ISSUES IN THE ASSESSMENT YEAR 200 4-05 THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE U/S. 14A WAS DELETED BY HONBLE TRIBUNAL. HE PLACED ON RECORD COPY OF THE DECISION IN ITA NO.504 & 773/AHD/2008 DATED 12-10-2012 & PLACED IT AT PAGE-81 TO 95 OF THE PAPE R BOOK. THE LD. A.R. POINTED OUT FROM THE BALANCE SHEET PLACED AT PAGE 3 1 OF THE PAPER BOOK, THAT THE ASSESSEE WAS HAVING SHAREHOLDERS FUNDS TO THE EXTENT OF RS.2607.18 CRORES AS AGAINST WHICH THE INVESTMENTS WAS ONLY TO THE EXTENT OF RS.195.10 CRORES. HE THUS SUBMITTED THAT THE ASS ESSEE HAS NOT USED ANY BORROWED FUNDS FOR THE PURPOSE OF MAKING INVESTMENT S. HE FURTHER SUBMITTED THAT OUT OF THE TOTAL DISALLOWANCE OF RS. 10,68,851/- MADE U/S. 14A IN A.Y. 2004-05, ASSESSEE DID NOT PRESS FOR DIS ALLOWANCE OF RS.2,79,851/- REPRESENTING INTEREST EXPENSES ON ACC OUNT OF SMALLNESS OF AMOUNT. THE DISALLOWANCE OF INTEREST IN A.Y. 2004-0 5 WORKS OUT TO 0.13% OF TOTAL INTEREST AND FINANCE CHARGES. HE SUBMITTED TH AT EVEN IF SIMILAR RATIO IS APPLIED IN THE YEAR UNDER APPEAL, THE DISALLOWANCE ON ACCOUNT OF INTEREST WILL WORK OUT TO RS.5.65 LACS (TOTAL INTEREST AND F INANCE CHARGES RS.4347 LACS X 0.13%). HE PLACED ON RECORD THE WORKING OF THE INTEREST DISALLOWANCE IN A.Y. 2004-05 AND SIMILAR DISALLOWAN CE IF AT ALL IS TO BE MADE IN A.Y. 2006-07 ON ACCOUNT OF INTEREST AND FIN ANCIAL CHARGES. THE LD. ITA NO 1865 /AHD/2010 A.YR.. 2006 -07. 7 A.R. THUS URGED THAT IN VIEW OF THE DECISION OF BOM BAY HIGH COURT IN THE CASE OF GODREJ BOYCE (SUPRA),THE PROVISIONS OF RULE 8D ARE NOT APPLICABLE AND THEREFORE NO DISALLOWANCE BE MADE. IN THE ALTER NATE IF AT ALL THE DISALLOWANCE IS TO BE MADE, THE SAME BE MADE AT THE RATE OF 0.13% OF TOTAL INTEREST EXPENSES. 9. ON THE OTHER HAND, THE LD. D.R. SUBMITTED THAT C ONSIDERING THE MAGNITUDE OF THE MUTUAL FUND REDEMPTIONS, THE A.O. WAS JUSTIFIED IN MAKING THE DISALLOWANCE AT 1% OF THE TOTAL INCOME. THE LD. D.R. FURTHER SUBMITTED THAT IN A.Y. 2004-05 THE ASSESSEE HAS ACCEPTED THE FACT THAT INTEREST BEARING FUNDS WERE USED FOR THE PURPOSE OF MAKING I NVESTMENTS AND THEREFORE HAD NOT PRESSED FOR THE DISALLOWANCE OF R S.2,79,851/-. HE THEREFORE, SUBMITTED THAT SINCE THE ASSESSEE HAS AL READY ADMITTED THAT IT HAD USED INTEREST BEARING FUNDS, THE A.O. WAS JUSTI FIED IN MAKING THE DISALLOWANCE IN THE YEAR UNDER APPEAL. HE FURTHER SUBMITTED THAT SINCE THE FACTS IN THE CURRENT YEAR ARE SIMILAR TO THAT OF A. Y. 2004-05 FOLLOWING THE DECISION OF A.Y.2004-05,THE DISALLOWANCE BE UPHELD IN THE CURRENT YEAR. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE A.O. HAS MADE DISALLOWANC E OF 1% OF THE INTEREST AND FINANCE EXPENSES ON ACCOUNT OF INTEREST EXPENSE S. WE FURTHER FIND THAT A.O. HAS NOT GIVEN A SPECIFIC FINDING OF USE O F INTEREST BEARING FUNDS FOR MAKING INVESTMENTS. WE FURTHER FIND THAT CIT (A) HA S MADE ENHANCEMENT TO DISALLOWANCE U/S. 14A BY FOLLOWING THE METHOD PR ESCRIBED UNDER RULE 8D OF THE INCOME TAX RULES, 1962. IN THE CASE OF GODRE J BOYCE MFG. CO. LTD. VS. CIT (2010) 328 ITR 81 (BOM.), THE HONBLE HIGH COURT HAS HELD THAT RULE 8D IS NOT RETROSPECTIVE AND IS APPLICABLE FROM A.Y. 2008-09. ITA NO 1865 /AHD/2010 A.YR.. 2006 -07. 8 11. IN THE CASE OF MAXOPP INVESTMENT LTD. (2011) 64 DTR 122 (DEL.),HONBLE HIGH COURT RELYING ON THE DECISION I N THE CASE OF HERO CYCLES LTD. (323 ITR 518) HAS HELD THAT THE EXPRESSION E XPENDITURE INCURRED IN SEC.14A REFERS TO ACTUAL EXPENDITURE AND NOT TO SO ME IMAGINED EXPENDITURE. THE COROLLARY TO THIS IS IF NO EXPEND ITURE IS INCURRED IN RELATION TO EXEMPT INCOME, NO DISALLOWANCE CAN BE MADE U/S. 14A OF THE ACT. IT FURTHER HELD THAT THE REQUIREMENT OF THE A.O. EMBA RKING UPON DETERMINATION OF THE AMOUNT OF EXPENDITURE INCURRED IN RELATION TO EXEMPT INCOME WOULD BE TRIGGERED ONLY IF THE A.O. RETURNS TO A FINDING THAT HE IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE IN RESPECT OF SUCH EXPENDITURE. THEREFORE THE CONDITION PRECEDENT FOR A.O. ENTERING UPON A DETERMINATION OF THE AMOUNT OF EXPENDITURE INCURR ED IN RELATION TO EXEMPT INCOME IS THAT THE A.O. MUST RECORD THAT HE IS NOT SATISFIED WITH THE CORRECTNESS OF CLAIM OF ASSESSEE IN RESPECT OF SUCH EXPENDITURE. IT FURTHER HELD THAT WHILE REJECTING THE CLAIM OF ASSESSEE WIT H REGARD TO EXPENDITURE OR NO EXPENDITURE, AS THE CASE MAY BE, IN RELATION TO EXEMPT INCOME, THE A.O. WOULD HAVE INDICATED COGENT REASONS FOR THE SAME. 12. CONSIDERING THE TOTALITY OF FACTS AND MORE SO I N VIEW OF THE FACT THAT THE APPLICABILITY OF RULE 8D IS APPLICABLE FROM A.Y . 2008-09 AND IN THE PRESENT CASE SINCE THE A.Y. INVOLVED IS 2006-07, WE ARE OF THE VIEW THAT NO DISALLOWANCE CAN BE MADE BY APPLYING THE PROVISIONS OF RULE 8D. WE FURTHER FIND THAT A.O. HAD DISALLOWED 1% OF THE INTEREST EX PENSES ON ADHOC BASIS AND THE SAME WAS ENHANCED BY CIT (A) BY FOLLOWING T HE METHOD PRESCRIBED UNDER RULE 8D. A.O. HAS NOT PIN POINTED ANY EXPENDI TURE WHICH THE ASSESSEE HAS INCURRED FOR EARNING EXEMPT INCOME. WE ALSO FIND SUPPORT TO ITA NO 1865 /AHD/2010 A.YR.. 2006 -07. 9 OUR REASONING BY THE RATIO LAID DOWN BY HONBLE DEL HI HIGH COURT IN THE CASE OF MAXOPP INVESTMENTS LTD.(SUPRA). WE THEREFOR E, CONSIDERING THE TOTALITY OF FACTS ARE OF THE VIEW THAT THE ADDITION NEEDS TO BE DELETED. THUS THIS GROUND OF THE ASSESSEE IS ALLOWED. GROUND NOS.3.1, 3.2 AND 3.3, ARE INTERCONNECTED AND THEREFORE THEY ARE DISPOSED OF TOGETHER. DEPRECIATION ON LEASE-HOLD LAND. 13. ON PERUSING THE DEPRECIATION STATEMENT A.O. OBS ERVED THAT ASSESSEE HAS CLAIMED DEPRECIATION OF RS.4,99,90,962/- @ 25% ON THE LEASEHOLD LAND OF RS.8,22,27,955/- IN THE CASE OF ERSTWHILE TORREN T POWER A.E.C. (NOW MERGED WITH TPL) AND RS.12,94,59,252/- IN THE CASE OF ERSTWHILE TORRENT POWER SEC (NOW MERGER WITH TPL). A.O. WAS OF THE V IEW THAT ASSESSEE IS NOT ENTITLED TO CLAIM DEPRECIATION ON THE PREMIUM P AID FOR ACQUISITION OF LEASEHOLD LAND. THE A.O. ISSUED SHOW CAUSE NOTICE T O THE ASSESSEE ASKING HIM TO EXPLAIN AS TO WHY THE DEPRECIATION ON LEASE HOLD LAND SHOULD NOT BE DISALLOWED. THE ASSESSEE INTERALIA SUBMITTED THAT L AND WAS TAKEN ON LEASE FROM SURAT MUNICIPAL CORPORATION (SMC) FOR SETTING UP RECEIVING STATION. SMC GAVE THE ASSESSEE THE RIGHTS OF DEVELOPMENT ON LAND GIVEN UNDER LEASE FOR A PERIOD OF 99 YEARS WITH A VERY NOMINAL TOKEN OF RS.1 PER SQ. MTR. AND CHARGED RS.2,000/- PER SQ. MT. AS PREMIUM. IT W AS FURTHER SUBMITTED THAT PREMIUM IS A COST OF COMMERCIAL RIGHTS GIVEN T O USE LAND AT A NOMINAL RENT AND INTEREST COST ON INVESTMENT. IT WAS POINTE D OUT THAT SMC GAVE COMMERCIAL RIGHTS TO USE THE LAND FOR FURTHER DEVEL OPMENT AND THEREFORE THE ASSESSEE HAD CLAIMED DEPRECIATION ON COST OF USING COMMERCIAL RIGHTS. THE ITA NO 1865 /AHD/2010 A.YR.. 2006 -07. 10 CONTENTION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE A.O. FOR THE REASONS AS SUMMED-UP IN HIS ORDER WHICH ARE AS UNDE R:- 6.5.3.TO SUM UP:- (1) THE LEASE IS FOR A PERIOD OF 99 YEARS, WHICH IS A SUBSTANTIAL PERIOD FOR HOLDING THE PROPERTY. (2) ONCE A LUMP SUM PAYMENT WAS MADE, THEN THE ASSE SSEE COMPANY IS REQUIRED TO PAY YEARLY RENT OF RS.1 PER SQ. MTR. ONLY, WHICH IS NEGLIGIBLE BECAUSE FOR ALL INTENTS AND PUR POSES, THE ASSESSEE COMPANY HAD BECOME THE OWNER SO NATURALLY NOT TO PAY ANY RENT FOR A PROPERTY IN THE CAPACITY AS GOOD AS AN OWNER. (3) THE ASSESSEE HAS NEITHER MADE PAYMENT NOR EXECU TED THE LEASE DEED IN THE RELEVANT PERIOD. (4) THE ASSESSEE HAS ACQUIRED ENDURING ADVANTAGE FO R A LONG PERIOD OF 99 YEARS WHICH IS ALSO IN A WAY A PERPETU AL RIGHT CONFERRED ON THE ASSESSEE DUE TO THE PAYMENT OF LUM P SUM AMOUNT AS PREMIUM. (5) THE PROPERTY WAS ACQUIRED FOR ALL INTENTS AND P URPOSES IN THE CAPACITY OF AN OWNER AND THE LUMP SUM PAYMENT WAS M ADE AS A CONSIDERATION FOR ACQUIRING THE RIGHTS OVER THE P ROPERTY. (6) SUCH PREMIUM IS CAPITAL IN NATURE AND THEREFORE DEPRECIATION IS NOT ALLOWABLE. (7) SUCH PREMIUM CANNOT BE SAID TO BE ANY OTHER BUS INESS OR COMMERCIAL RIGHTS AS MENTIONED IN PART-B OF DEPRECI ATION RULE. (8) VARIOUS JUDICIAL AUTHORITIES ALSO TREAT THE EXP ENDITURE INCURRED ON ACQUISITION OF LEASEHOLD LAND AS CAPITAL EXPEND ITURE AND THEREFORE, THE ASSESSEE IS NOT ENTITLED FOR ANY DEP RECIATION ON THE SAME. (9) THE FACTS REGARDING THE LEASE HOLD LAND ARE SIM ILAR IN BOTH THE CONSTITUENTS OF TORRENT POWER LTD. I.E. TPSEC AND T PAEC. ITA NO 1865 /AHD/2010 A.YR.. 2006 -07. 11 WHILE THE ERSTWHILE TOWER POWER SEC LTD. (TPSEC) TO OK LEASE HOLD LAND FROM SURAT MUNICIPAL CORPORATION (SMC),TO RRENT POWER AEC LTD. (TPAEC) TOOK LAND ON LEASE FROM AHME DABAD MUNICIPAL CORPORATION (AMC) ON SIMILAR TERMS. 14. A.O. ACCORDINGLY DISALLOWED THE ASSESSEES CLAI M OF DEPRECIATION OF RS.4,99,92,962/- ON THE LEASEHOLD LAND AND ADDED TO THE INCOME OF THE ASSESSEE. AGGRIEVED BY THE ACTION OF A.O. THE ASSES SEE CARRIED THE MATTER BEFORE THE CIT (A). 15. CIT (A) DID NOT AGREE TO THE CONTENTIONS OF THE ASSESSEE FOR THE REASON THAT ON SIMILAR ISSUE IN THE ASSESSEES OWN CASE (ERSTWHILE COMPANIES VIZ. TORRENT POWER SEC (TPSEC) AND TORREN T POWER AEC (TPAEC) NOW AMALGAMATED WITH ASSESSEE) THE HONBLE ITAT IN ITA NO.1998/AHD/2006 & C.O. NO.254/AHD/2006 FOR A.Y. 20 02-03 VIDE ORDER DATED 23-12-2008 HAD HELD AGAINST THE ASSESSEE. CIT (A) FURTHER DISTINGUISHED THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF DCIT VS. SUN PHARMACEUTICALS INDUSTRY LTD.(2009) 22 7 CTR (GUJ.) 206 AND UPHELD THE ADDITION BY HOLDING AS UNDER:- 4.3. I HAVE CONSIDERED THE FACTS OF THE CASE AND T HE SUBMISSIONS OF THE APPELLANT. I AM NOT INCLINED TO ACCEPT THE CONT ENTIONS OF THE APPELLANT SINCE THE A.O. HAD ALREADY CONSIDERED ALL SUCH SUBMISSIONS INCLUDING THE RATIO OF VARIOUS CASE LAWS RELIED UPO N AND JUDICIOUSLY REBUTTED OR GIVEN REASONING FOR NON ACCEPTANCE OF S AME. SIMILAR ISSUE IN THE APPELLANTS OWN CASE (THE ERSTWHILE CO MPANIES VIZ. TORRENT POWER SEC. LTD. (TPSEC) AND TORRENT POWER A EC LTD. (PAEC) NOW AMALGAMATED WITH APPELLANTS COMPANY) TH E HON. ITAT AHMEDABAD D BENCH IN THE APPELLANTS M/S. TORRENT P OWER SEC LTD.(ITA NO. 198/AHD/2006 C.O. NO.254/AHD/2006) CAS E FOR A.Y. 2002-03 VIDE ORDER 23-12-2008 HAD ALREADY CONSIDERE D THE ISSUE IN ITA NO 1865 /AHD/2010 A.YR.. 2006 -07. 12 RESPECT OF LEASEHOLD RIGHTS ON LAND SO ACQUIRED AND CLAIM OF DEPRECIATION AND HELD AGAINST THE APPELLANT. IT IS IMPORTANT TO LOOK INTO GROUND OF APPEAL; TAKEN BY APPELLANT VIDE C.O. NO.2 54/AHD/2006 AS FOLLOWS:- 1. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF TH E RESPONDENTS CASE, THE LD. CIT (A) HAS ERRED IN NOT GRANTING DEPRECIATION @ 25% ON THE PREMIUM OF RS.2,39,39,500 /- PAID FOR LEASE HOLD LAND TO SURAT MUNICIPAL CORPORATION. IN DOING SO, HE HAS ERRED IN TREATING TENANCY RIGHTS IN THE LAND AS A TANGIBLE ASSET, WHICH IN FACT, IS AN INTANGIBLE ASSET, ELIGI BLE FOR DEPRECIATION U/S. 32 OF THE I.T. ACT. 2. WITHOUT PREJUDICE TO THE ABOVE, PREMIUM PAID [FO R LEASEHOLD LAND FOR A PERIOD OF 99 YEARS] IS REVENUE IN NATURE. THEREBY THE CIT (A) HAS ERRED IN NOT ALLOWING PREMI UM PAID AS REVENUE EXPENDITURE FOR THE LEASEHOLD LAND TO SURAT MUNICIPAL CORPORATION. 3. WITHOUT PREJUDICE TO THE ABOVE, THE PREMIUM OF RS.2,39,239,500/- PAID FOR LEASEHOLD LAND FOR A PER IOD OF 99 YEARS SHOULD BE ALLOWED TO BE AMORTIZED OVER THE PE RIOD OF LEASE I.E. 99 YEARS. THEREBY, THE LD. CIT(A) HAS ER RED IN LAW AS WELL AS IN FACTS OF THE RESPONDENTS CASE, IN NOT A LLOWING TO AMORTIZE THE PREMIUM PAID OVER THE PERIOD OF 99 YEA RS. THE HONBLE ITAT AT PARA-27 HELD THAT WE FIND THAT THE PAYMENT OF PREMIUM FOR OBTAINING THE 99 YEARS LEASE WAS EVIDENTLY AN EXPENDITURE INCURRED IN CAPITAL FIELD FOR OBTAINING AN ASSET OF ENDURING NATURE, WH ICH CANNOT STAND ON A DIFFERENT FOOTING THAN THE COST OF THE L AND, AS SPENT BY ANYBODY FOR PURCHASE OF LAND. THE MERE FACT THAT SOME SUCH REQUIREMENTS OR CONDITIONS HAVE BEEN SPECIFIED IN T HE LEASE DEED DOES NOT HOWEVER FETTER THE RIGHTS OF THE LESS EE CREATE ANY IMPEDIMENTS IN THE ENJOYMENT OF ITS RIGHT OVER USER OF THE LAND SO AS TO INTERFERE WITH OR LESSEN OR IN ANY MANNER CHANGE THE ENDURING NATURE OF THE RIGHTS GRANTED TO THE ASSESS EE THROUGH THE LEAS DEED. WE FIND THAT THE PREMIUM PAID FOR OB TAINING THE 99 YEARS LEASE FROM SMC CANNOT BE TREATED AS INTANG IBLE ASSET ITA NO 1865 /AHD/2010 A.YR.. 2006 -07. 13 AND NO DEPRECIATION WOULD BE ADMISSIBLE TO THE ASSE SSEE AS PER THE PROVISION OF THE ACT. WE FURTHER FIND THAT THE LAND DEVELOPED BY THE SMC WILL NOT FALL IN THE CATEGORY OF A COMMERCIAL OR BUSINESS RIGHT AND NOT BE ENTITLED TO DEPRECIATION. IF ANY DEPRECIATION IS ALLOWED IN THE SE FACTS AND CIRCUMSTANCES, THAT WILL BE EVIDENTLY OPPOSED TO TH E ACCEPTED LEGAL POSITION. THE PREMIUM PAID FOR OBTAINING THE 99 YEARS LEASE FROM THE SMC CANNOT BE TREATED AS AN INTANGIB LE ASSET AND NO DEPRECIATION WOULD, THEREFORE, BE ADMISSIBLE THEREON IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. FURTHER, THE OBTAINING OF LAND FROM THE SMC WAS IN THE NATURE OF CAPITAL E XPENDITURE FOR OBTAINING ENDURING BENEFIT IN POSSESSION OF LAN D FOR A PERIOD OF 99 YEARS. THEREFORE, THE EXPENDITURE CANNOT BE A LLOWED AS REVENUE EXPENDITURE. ACCORDINGLY, THE ISSUE OF THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. SINCE THE HONBLE ITAT AHMEDABAD AFTER CONSIDERING ALL THE FACTS AND CIRCUMSTANCES INCLUDING THE RATIOS OF VARIOUS C ASE LAWS HELD AGAINST THE APPELLANT NOT ONLY IN RESPECT OF ALLOWA BILITY OF DEPRECIATION BEING SUCH LEASE-HOLDING IS NOT AN INTANGIBLE ASSET , BUT ALSO HELD THAT PAYMENT OF SUCH AMOUNT IS CAPITAL IN NATURE AND AS SUCH COST OF LAND SO ACQUIRED ON WHICH NO DEPRECIATION IS PERMITTED A S PER I.T. RULES AND PROVISION BESIDES THE SAME IS CAPITAL EXPENDITU RE. THE APPELLANT DURING THE COURSE OF APPELLATE PROCEEDINGS REFERRED THE APPLICABILITY OF THE RATIO OF HON. GUJARAT HIGH COURTS DECISION IN THE CASE OF DY. CIT VS. SUN PHARMACEUTICALS INDUSTRY LTD. (2009) 22 7 CTR (GUJ.)206, WHERE FOR A.Y. 1994-95,HONBLE GUJARAT HIGH COURT O N THE FACTS SIMILAR TO THE APPELLANT HELD THAT ENTIRE PREMIUM P AID FOR ACQUISITION OF LAND ON LEASE OF 99 YEARS WITH MARKING PAYMENT OF A DVANCE RENT OF RS.48 CR. AND PAYING NOMINAL MONTHLY RENT OF RS.40 PER MONTH IS AN ALLOWABLE REVENUE EXPENDITURE. WITH DUE REGARD TO T HE RATIO OF SUCH DECISION, THE APPELLANTS CLAIM CANNOT BE ACCEPTED ON THE FOLLOWING REASONS:- A) THE APPELLANT HAS NOT CLAIMED ENTIRE EXPENDITURE AS REVENUE EXPENDITURE IN ITS RETURN OF INCOME. IN FACT, THE A PPELLANT HAS CLAIMED THE PREMIUM PAID FOR LEASE HOLD LAND AS INTANGIBLE ASSET AND CLAIMED DEPRECIATION ON IT. FURTHER, THE PREVIOUS YEAR IS N OT THE FIRST YEAR OF SUCH PAYMENT AND CLAIM AND THEREFORE, ALLOWABILITY OF ENTIRE PAYMENT AS REVENUE CANNOT BE CONSIDERED IN THE PRESENT ASSE SSMENT YEAR. ITA NO 1865 /AHD/2010 A.YR.. 2006 -07. 14 B) THE CLAIM OF ENTIRE PREMIUM PAID AS REVENUE EXPE NDITURE WAS ONE OF THE GROUNDS OF APPEAL (GROUND NO.2.) AS DISC USSED EARLIER BEFORE THE HONBLE ITAT IN APPELLANTS OWN CASE, BU T THE SAME WAS DISMISSED BY THE HONBLE ITAT VIDE ORDER DT. 23-12- 2008. THE APPELLANT IS PLACING RELIANCE ON HONBLE GUJARAT HI GH COURT (SUPRA) TO CLAIM IT IN ENTIRETY SINCE THE DECISION OF SUN PHAR MACEUTICALS (SUPRA) WAS NOT RELIED ON BY APPELLANT BEFORE THE HONBLE I TAT. BUT, IN THE CASE OF SUN PHARMACEUTICALS (SUPRA), THE HON. ITAT DECISION IN FAVOUR OF APPELLANT WAS DATED 17-2-99, I.E. BEFORE THE HONBLE ITATS ORDER IN APPELLANTS CASE I.E. 23-12-2008 AND, THER EFORE, THE SAME WAS NEITHER RELIED UPON NOR MENTIONED BY THE APPELL ANT AND EVEN IF MENTIONED, THE REFERENCE IS NOT AVAILABLE IN HONBL E ITATS ORDER IN APPELLANTS CASE. IT IS A JUDICIAL DICTUM THAT THE LAW ASSIST THOSE WHO ARE VIGILANT AND NOT THOSE WHO SLEEP OVER THEIR RIG HT VIGILANTIBUS, NON DORMATIBUS VENUIUNT C) THE CLAIM OF PREMIUM PAID FOR LEASEHOLD RIGHT OF LAND THROUGH A GROUND OR THROUGH AN APPLICATION WITHOUT CLAIMING T HE SAME IN RETURN OF INCOME IS ALSO AGAINST THE SETTLED PRINCIPLE OF CLAIM OF ANY SUCH DEDUCTION AS HELD BY THE HONBLE SUPREME COURT IN T HE CASE OF GOETZE (INDIA) LTD. VS. CIT (2006) 284 ITR 323(SC.) . D) BY ACCEPTING THE APPELLANTS CLAIMS OF ALLOWABIL ITY OF ENTIRE EXPENDITURE AS REVENUE NOT ONLY REDUCE THE RETURNED INCOME OF PREVIOUS YEAR BUT ALSO EFFECT THE ASSESSED INCOME O F EARLIER YEAR AND, THEREFORE HAS CASCADING EFFECT FOR WHICH THERE IS N O SCOPE OF RECTIFICATION IN THE ACT. 16. AGGRIEVED BY THE ORDER OF THE CIT (A), ASSESSEE IS NOW IN APPEAL BEFORE US. 17. BEFORE US AT THE OUTSET THE LD. A.R. SUBMITTED THAT IN THE ASSESSEES OWN CASE IN THE CASE OF TORRENT POWER LTD., (FORMER LY KNOWN AS TORRENT POWER SEC. LTD.) IN ITA NO.293/AHD/2008 & ITA NO.77 1/AHD/2008 ON IDENTICAL FACTS HONBLE ITAT HAS RESTORED THE MATTE R TO THE FILE OF A.O. HE ITA NO 1865 /AHD/2010 A.YR.. 2006 -07. 15 THEREFORE SUBMITTED THAT FOLLOWING THE AFORESAID DE CISION, IN THE PRESENT APPEAL, SIMILAR DIRECTIONS MAY BE ISSUED AND THE MA TTER MAY BE REMITTED TO THE FILE OF A.O. 18. THE LD. D.R. FAIRLY AGREED THAT THE MATTER BE R EMITTED BACK TO THE FILE OF A.O. FOR VERIFICATION IN THE LIGHT OF DECISION I N THE CASE OF DCIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. (SUPRA). 19. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT THE FACTS AN D CIRCUMSTANCES OF THE CASE IN THE PRESENT APPEAL ARE IDENTICAL TO THAT OF EARLIER YEARS. WE FIND THAT ON AN IDENTICAL ISSUE IN ASSESSMENT YEAR 2004-05, T HE CO-ORDINATE BENCH OF TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.293/AH D/2008 & 771/AHD/2008 HAS REMITTED THE MATTER BACK TO THE FI LE OF A.O. BY HOLDING AS UNDER:- 3. ON THIS SHORT SUBMISSION OF RESTORATION, LD. D. R. MR. KARTAR SINGH HAD NO OBJECTION BUT STATED THAT ONCE THE MA TTER HAS BEEN DECIDED BY THE HONBLE HIGH COURT, THOUGH THE A.O. HAD LEFT WITH A LIMITED SCOPE BUT STILL HAS TO VERIFY THE CONNECTED FACTS TO APPLY THE RATIO LAID IN THE SAID PRECEDENT. THE SAID VERDICT IS AS FOLLOWS, REPRODUCED FROM THE HEAD NOTES (329 ITR 479):- THE ASSESSEE-COMPANY CLAIMED DEDUCTION OF A SUM OF RS.48,02,616/- BEING PAYMENT TO GIDC. IT CONTENDED THAT THE LEASE RENT IN RESPECT OF THE LAND ALLOTTED TO THE A SSESSEE- COMPANY BEING VERY NOMINAL I.E. AT RS.40 PER YEAR,T HE PAYMENT WAS NOTHING ELSE BUT ADVANCE RENT AND HENCE, ALLOWA BLE AS REVENUE EXPENDITURE. AFTER GOING THROUGH THE LEASE AGREEMENT THE A.O. DISALLOWED THE CLAIM HOLDING THAT THE ASSE SSEE HAD ACQUIRED A BENEFIT OF ENDURING NATURE IN THE FORM O F USE OF LAND FOR A PERIOD OF 99 YEARS; THAT THE LAND HAD BEEN TR ANSFERRED THROUGH A REGISTERED DEED INVOLVING TRANSFER OF IMM OVABLE ITA NO 1865 /AHD/2010 A.YR.. 2006 -07. 16 PROPERTY AND THUS, THE ASSESSEE HAD ACQUIRED A FIXE D ASSET IN THE FORM OF A PARCEL OF LAND. THE TRIBUNAL HELD THA T THE LEASE RENT WAS DEDUCTIBLE. ON APPEAL TO THE HIGH COURT: HELD, DISMISSING THE APPEAL, THAT THE TRIBUNAL HAD FOUND THAT THE LAND IN QUESTION WAS NOT ACQUIRED BY THE ASSESS EE. MERELY BECAUSE THE DEED WAS REGISTERED THE TRANSACTION IN QUESTION WOULD NOT ASSUME A DIFFERENT CHARACTER. THE LEASE R ENT WAS VERY NOMINAL. BY OBTAINING THE LAND ON LEASE THE CA PITAL STRUCTURE OF THE ASSESSEE DID NOT UNDERGO ANY CHANG E. THE ASSESSEE ONLY ACQUIRED A FACILITY TO CARRY ON BUSIN ESS PROFITABLY BY PAYING NOMINAL LEASE RENT. THE LEASE RENT PAID B Y THE ASSESSEE TO GIDC WAS ALLOWABLE AS REVENUE EXPENDITU RE. 4. ON CAREFUL READING OF THE JUDGMENT OF SUN PHARMA CEUTICALS IND. LTD. (SUPRA), WE HAVE FOUND THAT THE ISSUE WAS CONF INED TO THE QUESTION OF DEDUCTIBILITY OF THE LEASE RENT. DISMIS SING THE APPEAL OF THE REVENUE, THE COURT HAS SAID THAT THE TRIBUNAL H AD FOUND THAT THE LAND IN QUESTION WAS NOT ACQUIRED BY THE ASSESSEE. MERELY BECAUSE THE DEED WAS REGISTERED THE TRANSACTION IN QUESTION WOULD NOT ASSUME A DIFFERENT CHARACTER. BY OBTAINING THE LAND ON LEASE THE ASSESSEE HAS ACQUIRED A FACILITY TO CARRY ON BUSINE SS BY PAYING NOMINAL LEASE RENT, THEREFORE, LEASE RENT PAID WAS HELD ALLOWABLE AS REVENUE EXPENDITURE. IN THIS CONTEXT WE MAY LIKE TO ADD THAT THOUGH THE RESPECTED CO-ORDINATE BENCH VIDE AN ORDER DATED 21-1-2011 FOR A.Y. 2005-06 HAS RESTORED BOTH THE GROUNDS FOR RE-A DJUDICATION BY A.O. BUT THE DISTINCTION BETWEEN THE TWO GROUNDS IS THAT GROUND NO.1 IS ABOUT CLAIM OF DEPRECIATION ON LEASE HOLD RIGHTS AND GROUND NO.2 IS ABOUT THE CLAIM OF EXPENDITURE PERTAINING TO THE SA ID LEASE. THE HONBLE COURT HAS DECIDED ONLY IN RESPECT OF DEDUCT IBILITY OF LEASE RENT BUT SINCE THE MATTER NOW STOOD RESTORED BACK T O THE A.O., THEREFORE, WE HEREBY DIRECT TO KEEP IN MIND THIS SU BTLE DISTINCTION AND RE-DECIDE AS PER LAW. IDENTICALLY, THESE TWO GROUND S MAY BE TREATED AS ALLOWED BUT FOR STATISTICAL PURPOSES. 20. SINCE IT IS AN UNDISPUTED FACT THAT THE FACTS I N THE PRESENT YEAR ARE SIMILAR TO THAT OF EARLIER YEAR, WE ARE OF THE VIEW THAT SINCE FOR A.Y. 2004-05, THE MATTER HAS BEEN REMITTED BACK TO THE FILE OF A. O. TO EXAMINE AND DECIDE ITA NO 1865 /AHD/2010 A.YR.. 2006 -07. 17 THE ISSUE IN LINE WITH THE DIRECTIONS CONTAINED THE REIN, IN THE YEAR UNDER APPEAL ALSO THE MATTER BE REMITTED BACK TO THE FILE OF A.O. TO DECIDE THE MATTER. WE RESPECTFULLY FOLLOWING THE DECISION OF T HE CO-ORDINATE BENCH REMIT THE ISSUE TO THE FILE OF A.O. TO EXAMINE THE FACTS AND DECIDE THE ISSUE IN THE LIGHT OF DECISION IN THE CASE OF DCIT VS. SU N PHARMACEUTICALS IND. LTD., AND AFTER GIVING REASONABLE OPPORTUNITY OF HE ARING TO ASSESSEE. THUS THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. 21. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 28 - 12 - 2012. SD/- SD/- (MUKUL KUMAR SHRAWAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACC OUNTANT MEMBER AHMEDABAD. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-XIV, AHMEDABAD. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHM EDABAD ITA NO 1865 /AHD/2010 A.YR.. 2006 -07. 18 1.DATE OF DICTATION 31 - 10 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 4, 13 ,15 / 12 / 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S 24 -12 -2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 28 - 12 -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 28 - 12 -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 28 - 12 -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..
