The DCIT, Circle-1(2), Baroda V. M/s. Inox Leisure Ltd., Baroda

ITA 1984/AHD/2009

• Counselvise Citation: 198420514 RSA 2009
• Duration Of Justice: 2 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 10-08-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 18-06-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR SHRI S K GUPTA
• Keywords: Business expenditure; Principle of natural justice; Speculation loss; Capital receipt; Revenue expenditure; Capital expenditure
• Section: 115JB; 250; 37

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD , . .! ' , #$ # % BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI A.N. PAHUJA, ACCOUNTANT MEMBER APPEAL(S) BY: APPELLANT VS. RESPONDENT SL. NO(S). ITA NO(S) ASSESSMENT YEAR(S) APPELLANT (S) RESPONDENT(S) 1. 1984/AHD/2009 2003-04 DCIT CIR.1(2) BARODA M/S.INOX LEISURE LTD. 2 ND FLOOR, ABS TOWER OLD PADRA ROAD BARODA PAN : AAACI6063J 2. 1991/AHD/2009 2004-05 ASSESSEE ACIT CIR-1(2)BARODA 3. 2299/AHD/2009 2004-05 REVENUE ASSESSEE 4. 1992/AHD/2009 2005-06 ASSESSEE REVEN UE 5. 2300/AHD/2009 2005-06 REVENUE ASSESSE E ASSESSEE BY : SHRI S.N. SOPARKAR REVENUE BY : SHRI S.K. GUPTA, CIT-D.R. & ' ($/ // / DATE OF HEARING : 10 & 11/08/2011 *+, ' ($ / DATE OF PRONOUNCEMENT : 09/09/2011 #-/ O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : ALL THESE APPEALS HAVE BEEN FILED BY THE ASSESSE E AND THE REVENUE AGAINST THE ORDERS OF THE LEARNED CIT(AP PEALS)-I, BARODA DATED 24/03/2009 (FOR A.Y. 2003-04) AND DATED 14/ 05/2009 (FOR A.YS. 2004-05 & 2005-06). SINCE THESE APPEALS ARE INTER- CONNECTED HENCE, FOR ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 2 - THE SAKE OF CONVENIENCE, WE HEREIN-BELOW PROCEED T O DECIDE ALL THESE APPEALS COLLECTIVELY BY THIS SINGLE ORDER. SEVERAL GROUNDS HAVE BEEN RAISED WHICH ARE DECIDED AS UNDER:- (A) REVENUES APPEALS, (I) ITA NO.1984/AHD/2009 FOR A. Y. 2003-04 , (II)ITA NO.2299/AHD/2009 FOR A.Y. 2004 -05 & (III) ITA NO.2300/AHD/2009 FOR A.Y. 2005-06 2. FOR A.YS. 2003-04 AND 2004-05 GROUND NO.1, AND FOR A.Y. 2005- 06 GROUND NO.2 READ AS UNDER: 1(A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE ENTERTAINMENT TAX EXEMPTION OF RS.1,85,06,998/- AND RS.1,14,47,905/- IN RESPECT OF PUNE AND BARODA MULTIPLEXES RESPECTIVELY ARE CAPITAL RECEIPT WHICH IS NOT EXIGIBLE TO TAX [ FOR A.Y.2004-05 RS.7,56,98,490 AND FOR A.Y. 2005-06 RS.10,83,19,857 ]. 1(B) THE LD. CIT(A) FAILED TO APPRECIATE THAT THE S UBSIDY RECEIVED BY THE ASSESSEE AFTER COMPLETION OF CINEMA HOUSE AN D COMMENCEMENT OF OPERATION IS CLEARLY A REVENUE RECE IPT EXIGIBLE TO TAX, AS HELD BY THE INDORE BENCH OF ITA T IN THE CASE OF ITO VS. SHREEJI CHITRA MANDIR, 97 ITD 77 AN D M.P. HIGH COURT IN THE CASE OF SUNDRARAM EXHIBITIONS (P) LTD. 202 CTR 408. 2. LEAD YEAR IS A.Y. 2003-04 AND FACTS IN BRIEF AS EMERGED FROM THAT ASSESSMENT ORDER PASSED U/S.143(3) OF THE ACT DATED 30/03/2006 ARE THAT THE ASSESSEE-COMPANY IS IN THE BUSINESS OF OPERATI NG A MULTIPLEX ENTERTAINMENT COMPLEX AND RUNNING OF CINEMA THEATRE IS THE MAIN ACTIVITY. IT HAS ALSO BEEN NOTED BY THE AO THAT TH ERE WERE TWO MULTIPLEXES WITH CINEMA THEATRES ONE AT BARODA AND THE OTHER AT PUNE. IT WAS FOUND THAT THE COMMERCIAL OPERATION WAS STARTE D DURING THE ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 3 - FINANCIAL YEAR UNDER CONSIDERATION. FURTHER, IT WA S NOTED BY THE AO THAT IN RESPECT OF MULTIPLEX AT PUNE, A SUM OF RS.2,85,0 6,998 AND IN RESPECT OF BARODA MULTIPLEX A SUM OF RS.1,14,47,905/- WERE THE AMOUNTS OF ENTERTAINMENT TAX, CLAIMED AS EXEMPT. CONTENTION OF THE ASSESSEE WAS THAT THE SAID ENTERTAINMENT TAX WAS AN INCENTIVE AN D IN THE NATURE OF CAPITAL RECEIPT, THEREFORE, NOT CHARGEABLE TO TAX. IT WAS ALSO CONTESTED BEFORE THE AO THAT THE CLAIM WAS ALLOWABLE IN THE L IGHT OF DCIT VS. RELIANCE INDUSTRIES, 88 ITD 273. IT WAS ALSO INFORMED THAT EXEMPTION IN RESPECT OF ENTERTAINMENT TAX FOR BOTH THE MULTIP LEXES SITUATED AT PUNE AND BARODA WERE GRANTED BY THAT DEPARTMENT AFTER FE W MONTHS OF COMMERCIAL OPERATION. AS PER AO, THE ISSUE IN HA ND WAS COVERED BY THE SAHNEY STEEL AND PRESS WORKS LTD. VS. CIT, 228 IT R 253 (SC). ACCORDING TO AO, AN INCENTIVE GIVEN AS A GENERAL AS SISTANCE TO CARRY ON THE BUSINESS OR TRADE IS NOTHING BUT IN THE NATURE OF TRADING RECEIPT. HOWEVER MARKING A DISTINCTION, AO HAS ALSO QUOTED THAT IF THE OBJECT OF THE ASSISTANCE HAPPENED TO BE TO ENABLE THE ASSESS EE TO ACQUIRE ANY NEW PLANT & MACHINERY FOR FURTHER EXPANSION OF ITS MANU FACTURING ACTIVITY, THEN THE SUBSIDY IS IN THE NATURE OF CAPITAL RECEI PT. SINCE THE ASSISTANCE WAS GRANTED TO THE ASSESSEE AFTER THE COMMENCEMENT OF THE OPERATION OF MULTIPLEXS, THEREFORE, IT WAS FOR BUSINESS OPERATIO N, HENCE IN AOS VIEW IT WAS A REVENUE RECEIPT. UNDISPUTEDLY THE INCENT IVE WAS GIVEN FROM THE ENTERTAINMENT TAX (E.T.) EXEMPTIONS, THEREFOR E, IT WAS AFTER THE COMMENCEMENT OF THE BUSINESS OPERATION. AS PER A.O . THE OBJECT OF THE INCENTIVE WAS NOT TO ENABLE THE ASSESSEE TO ACQUIRE NEW PLANT & MACHINERY, BUT FOR THE PURPOSE OF CARRYING THE BUSI NESS OPERATION. ACCORDINGLY, ENTERTAINMENT TAX WHICH WAS COLLECTED BY THE ASSESSEE AND ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 4 - CLAIMED AS EXEMPT WAS DISALLOWED BY TREATING AS RE VENUE RECEIPT. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE A UTHORITY. 3. BEFORE LD. CIT(A), IT WAS SUBMITTED AS UNDER:- 4.1. IN APPEAL, IT WAS SUBMITTED BY THE LD. AR AS UNDER:- THE COMPANY IS ENTITLED TO ENTERTAINMENT TAX (ET) EXEMPTION IN RESPECT OF ITS MULTIPLEXES AT PUNE & BARODA. THE AMOUNT OF EXEMPTION AVAILED DURING THE YEAR ENDED ON 31.03.03 IN RESPECT OF ITS MULTIPLEX AT PUNE WAS OF RS.2,85,06,998 AND IN RESPECT OF ITS BARODA MULTIPLEX WAS OF RS.1,14,47,905. IT IS OUR CONTENTION THAT SUCH INCENTIVE IS A CAPITAL RECEIPT NOT CHARGEABLE TO TAX AND HENCE THE AMOUNT OF ET EXEMPTION ACTUALLY AVAILED D URING THE YEAR OF RS.3,99,54,903 BE ALLOWED AS A DEDUCTION. THE GOVERNMENT OF GUJARAT INTRODUCED THE NEW PACKAG E SCHEME OF INCENTIVES FOR TOURISM PROJECTS FOR THE PERIOD 1 995 TO 2000 WITH A VIEW TO ENCOURAGE TOURISM SECTOR BY ATTRACTING HI GHER INVESTMENTS IN THE AREAS WITH TOURISM POTENTIALS AN D TO GENERATE EMPLOYMENT OPPORTUNITIES. IN LINE WITH THIS SCHEME WE GOT THE EXEMPTION FROM THE ENTERTAINMENT TAX (ET) FOR OUR MULTIPLEX AT BARODA WITH RELATION TO THE ELIGIBLE INVESTMENTS MADE IN CONSTR UCTION OF THE MULTIPLEX . THOUGH WE COULD START AVAILING THE EXEMPTION ONL Y AFTER THE COMMENCEMENT OF ITS COMMERCIAL OPERATIONS , IT WAS GRANTED TO US WITH REFERENCE TO THE AMOUNT SO INVES TED BY US AND WHICH QUALIFIES FOR THE EXEMPTION. IN THIS CONNECT ION WE ARE ENCLOSING COPIES OF THE FOLLOWINGS FOR YOUR PERUSAL : A. NEW PACKAGE SCHEME OF INCENTIVES FOR TOURISM PROJEC TS 1995 TO 2000. B. LETTER NO. COT/NTP/IC/69 DT. 30.01.02 RECEIVED FROM COMMISSIONERATE OF TOURISM, GOVERNMENT OF GUJARAT INFORMING US WE ARE ELIGIBLE FOR THE ET EXEMPTION I N RESPECT OF THE AMOUNT INVESTED BY US IN CONSTRUCTION OF THE MU LTIPLEX TILL 24.10.02. ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 5 - C. LETTER NO.COT/NTP/IC/I DT.01.01.02 IN CONNECTION WI TH CLARIFICATIONS IN RESPECT OF TAX HOLIDAY FOR MULTIP LEXES RECEIVED FROM COMMISSIONERATE OF TOURISM, GOVERNMENT OF GUJA RAT. D. RESOLUTION NO.TPN/1095/1983/(1)-S. DT 13.05.96 ISSU ED BY INFORMATION BROADCASTING & TOURISM DIVISION, GOVERN MENT OF GUJARAT, FOR EXTENDING THE BENEFITS OF THE NEW PACK AGE SCHEME OF INCENTIVES FOR TOURISM PROJECTS. (GUJARATI VERSI ON) E. LETTER NO. COT/NTP/IC/375 DT. 17.09.03 RECEIVED FRO M COMMISSIONERATE OF TOURISM, GOVERNMENT OF GUJARAT G RANTING US A CERTIFICATE OF ET INCENTIVE OF RS.544.45 LACS. SIMILARLY FOR OUR MULTIPLEX AT PUNE WE HAVE BEEN GRANTED EXEMPTION FROM ET IN THIS CONNECTION WE ARE ENCLOSI NG COPIES OF THE FOLLOWINGS FOR YOUR PERUSAL: A. ORDINANCE NO.XXIV OF 2001 PUBLISHED BY REVENUE & FO RESTS DEPARTMENT OF MAHARASHTRA ON 17.08.01 WITH STATEMEN T OF PURPOSE (ENGLISH VERSION) B. POLICY FOR EXEMPTION FROM ET ISSUED BY REVENUE & FO REST DEPARTMENT OF MAHARASHTRA ON 20.09.01 (MARATHI VERS ION) C. ELIGIBILITY CERTIFICATE DT. 15.06.02 ISSUED TO US B Y THE COLLECTOR OF PUNE. D. A NOTE ON TREATMENT OF ET EXEMPTION AS A CAPITAL RE CEIPT SUBMITTED VIDE LETTER DT. 25.1.05 & 13.12.05 DURING ASSESSMENT PROCEEDINGS. WHILE CLAIMING THE EXEMPTION OF ET AS CAPITAL RECEI PT, WE HAVE RELIED UPON THE JUDGMENT GIVEN BY ITAT, MUMBAI BENC H J (SPECIAL BENCH) ON 23.10.03 IN THE CASE OF DCIT VS. RELIANCE INDUSTRIES LTD. (88 ITD 273). A COPY F THE SAME IS ENCLOSED FOR YOUR PERUSAL. 4. THE LD.CIT(A) HAS CONSIDERED FEW DECISIONS, NAME LY, SAHNEY STEEL AND PRESS WORKS LTD. VS CIT, 228 ITR 253(SC), DCIT VS. RELIANCE INDUSTRIES LTD. 88 ITD 273 (SB)[MUM] AND CIT VS. PO NNI SUGARS & CHEMICALS LTD. & OTHERS, 219 CTR 105 (SC). THE LD.CIT(A) HAS ALSO ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 6 - EXAMINED THE SCHEME OF THE GOVERNMENT AND THE NOTIF ICATION OF GOVERNMENT OF GUJARAT ISSUED BY COMMISSIONERATE OF TOURISM AND A RESOLUTION BY INFORMATION, BROADCASTING AND TOURIST DIVISION, GOVERNMENT OF GUJARAT. THE LD.CIT(A) HAS ALSO DI SCUSSED THE DECISION OF ITAT INDORE BENCH IN THE CASE OF ITO VS. SHREEJI CHITRA MANDIR 97 ITD 77 (INDORE) AND DECISION OF HONBLE M.P. HIGH COURT IN THE CASE OF SUNDARAM EXHIBITIONS (P) LTD. 202 CTR 408 (MP). THE LD.CIT(A) HAS DISCUSSED THE ORDINANCE ISSUED BY THE GOVERNMENT IN THE FOLLOWING MANNER:- 4.2.4 IN RESPECT OF PUNE MULTIPLEX, THE SUBSIDY HAD BEEN GRANTED BY AMENDMENT OF SECTION (3) OF BOMBAY ENTERTAINMENT S DUTY ACT, 1923 THROUGH THE MAHARASHTRA ORDINANCE NO .XXIV OF 2001 DT.17.08.2001, I.E. THE BOMBAY ENTERTAINMENTS DUTY (AMENDMENT) ORDINANCE, 2001. THE OBJECT OF THE ORD INANCE HAS BEEN ARTICULATED IN THE STATEMENT ATTACHED TO THE O RDINANCE, THE RELEVANT PORTION OF WHICH READS AS UNDER: AS A RESULT OF THE ONSLAUGHT OF CABLE TELEVISION A ND ADVANCEMENT IN THE FILED OF INFORMATION TECHNOLOGY, THE AVERAGE OCCUPANCY IN CINEMA THEATRE HAS FALLEN CONSIDERABLY AND HARDLY ANY NEW THEATRES HAVE BEEN STARTED IN THE RECENT PAST. PUBLIC AT LARGE THESE DAYS PRE FERS TO SEE MOVIES AT HOME. KEEPING IN VIEW THIS SCENARIO, A C ONCEPT OF COMPLETE FAMILY ENTERTAINMENT CENTRE, MORE POPULARL Y KNOWN AS MULTIPLEX THEATRE COMPLEX HAS EMERGED. THESE MULTIPLEX THEATRE COMPLEXES OFFER VARIOUS ENTERTAIN MENT FACILITIES FOR THE ENTIRE FAMILY UNDER SINGLE ROOF. HOWEVER, THESE COMPLEXES ARE HIGHLY CAPITAL INTENSIVE, THEIR GESTATION PERIOD IS ALSO QUITE LONGER, AND THEREFORE, NEED GO VERNMENT SUPPORT AND INCENTIVE IN ENTERTAINMENT DUTY. THE GOVERNMENT OF MAHARASHTRA, THEREFORE, CONSIDERS IT NECESSARY TO ENCOURAGE, BY GIVING INCENTIVES FOR THE ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 7 - CONSTRUCTION OF NEW CINEMA THEATRES AND TO ENSURE THE HEALTHY CULTURAL DEVELOPMENT IN THE STATE OF MAHARA SHTRA. GOVERNMENT HAS, THEREFORE, WITH A VIEW TO COMMEMORA TE BIRTH CENTENARY OF CHATRAPATI LATE SHRI V.SHANTARAM , DECIDED TO GRANT CONCESSION IN ENTERTAINMENTS DUTY TO MULTIPLEX THEATRE COMPLEXES TO PROMOTE CONSTRUCTION OF NEW CINEMA HOUSES IN THE STATE. 5. ON THE BASIS OF THE ABOVE DISCUSSION, HE HAS MEN TIONED THAT ON PERUSAL OF THE OBJECT OF THE LEGISLATION, THE GOVER NMENT HAS TAKEN DECISION TO GRANT CONCESSION IN ENTERTAINMENT DUTY WHICH WERE POINTEDLY TARGETED AT CONSTRUCTION OF NEW CINEMA HO USES IN THE STATE. THE SAID CONCESSION WAS ALLOWED @ OF 100% FROM THE PAYMENT OF ENTERTAINMENT DUTY FOR THE FIRST THREE YEARS FROM T HE DATE OF COMMENCEMENT OF MULTIPLEX THEATRE, 75% EXEMPTION FR OM ENTERTAINMENT DUTY FOR THE SUBSEQUENT TWO YEARS AND NIL EXEMPTIO N FROM THE SIXTH YEAR ONWARDS. HE HAS ALSO NOTED THAT THE DATE ON WHICH A MULTIPLEX THEATRE IS OPENED FOR THE ADMISSION TO THE PUBLIC I S THE DATE OF COMMENCEMENT. HE HAS ALSO MENTIONED THAT FROM TH E NOTIFICATIONS ETC. IT WAS CLEARED THAT THE SAID EXEMPTION OF ENTERTAIN MENT DUTY WAS AVAILABLE ONLY TO A NEW UNIT FOR THE PERIOD OF FIRS T FIVE YEARS ONLY. ON THAT BASIS, LD. CIT(A) HAS REMARKED THAT THE SAID S UBSIDY WAS INTENDED TO PROMOTE CONSTRUCTION OF NEW CINEMA COMPLEXES. HE WAS OF THE VIEW THAT THE SUBSIDY WAS RELATABLE TO CREATION OF A CAP ITAL ASSET CREATED THROUGH CAPITAL OUTLAY. ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 8 - 5.1. IN RESPECT OF BARODA MULTIPLEX, THE SUBSIDY WAS GRANTED BY THE GOVERNMENT OF GUJARAT VIDE NEW TOURISM POLICY 19 95. THE SAID SCHEME WAS SPELT OUT IN A RESOLUTION NO.NTP-1095/19 83-C DATED 20/12/1995 IN THE FOLLOWING TERMS:- THE STATE GOVERNMENT HAVE DECLARED NEW TOURISM PO LICY 1995 WHEREIN TOURISM HAS BEEN ACCORDED THE STATUS OF AN INDUSTRY, WITH A VIEW TO MAKE AVAILABLE ALL FISCAL AND NON-FISCAL INCENTIVES, BENEFITS, RELIEFS AND CONCESSIONS AVAILABLE TO INDU STRIES. BASED ON THE NEW TOURISM POLICY AND IN ORDER TO GIVE A BOO ST TO TOURISM SECTOR BY ATTRACTING HIGHER INVESTMENT IN THE AREAS WITH TOURISM POTENTIAL AND TO GENERATE EMPLOYMENT OPPORTUNITIES, THE STATE GOVERNMENT IS PLEASED TO INTRODUCE THE FOLLOWING NE W PACKAGE SCHEME OF INCENTIVES FOR TOURISM PROJECTS FOR THE P ERIOD 1995- 2000, SCRAPING THE OLD INCENTIVE SCHEME OF 1991 ANN OUNCED VIDE GOVERNMENT RESOLUTION CITED IN THE PREAMBLE. 5.2. ON THAT BASIS, LD.CIT(A) FOUND THAT SUCH A NEW UNIT WAS ELIGIBLE TO TAX HOLIDAY, SUCH AS, ENTERTAINMENT TAX FOR A PERIO D OF 5 YEARS. HE HAS HELD THAT THE OBJECT OF THE SCHEME WAS TO ENABLE AN ASSESSEE TO SET UP A NEW UNIT, HENCE HE HAS FOLLOWED THE DECISION OF HON 'BLE APEX COURT IN THE CASE OF PONNI SUGARS & CHEMICALS LTD. & OTHERS (SUPRA) AND DIRECTED THE AO NOT TO INCLUDE IN THE TAXABLE INCOME. BEING AGGRIEVED NOW THE REVENUE IS BEFORE US. 6. FROM THE SIDE OF THE REVENUE, LD. SHRI S.K. GUPT A, CIT-DR APPEARED. HE HAS ARGUED THAT THE ADMITTED FACTUA L POSITION WAS THAT THE SUBSIDY WAS NOT GRANTED BEFORE THE COMMENCEMENT OF THE BUSINESS. IT WAS NOT GRANTED FOR THE ESTABLISHMENT OR CONSTRUCTI ON OF MULTIPLEX ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 9 - THEATRE. ACCORDING TO LD.DR MR.GUPTA, THE ADMITTE D FACTUAL POSITION IS THAT THE SUBSIDY WAS GIVEN TO THE ASSESSEE WHEN THE CONSTRUCTION WAS ALREADY OVER AND THE BUSINESS OF EXHIBITION OF FILM S WAS STARTED. THE SUBSIDY WAS RECEIVED AFTER THE CONSTRUCTION WAS OVE R AND THE BUSINESS WAS ALREADY ESTABLISHED FOR THE COMMERCIAL USE OF R UNNING OF THE BUSINESS. FOR THIS LEGAL PROPOSITION HE HAS PLAC ED RELIANCE ON SUNDARAM EXHIBITIONS (P) LTD. 202 CTR 408 (MP). THE LD.DR HAS ALSO CITED SHREEJI CHITRA MANDIR 97 ITD 77 (INDORE) AND ARGUED THAT SINCE THE ASSET HAS ALREADY BEEN CREATED, THEREFORE , THE SUBSIDY WAS NOT RELATED TO A CAPITAL OUTLAY BUT ITS PURPOSE WAS T O ASSIST THE ASSESSEE TO RUN THE BUSINESS OF CINEMA HOUSE. HE HAS VEHEMENT LY CONTESTED THAT THE RECEIPT OF THE SUBSIDY HAD NO NEXUS WITH THE CREATI ON OF ANY FIXED ASSET, THEREFORE, ITS NATURE SHOULD NOT BE HELD AS A CAPI TAL RECEIPT. DR HAS ALSO EMPHASIZED THAT THERE WAS NO CASH WAS GIVEN B Y THE GOVERNMENT AS A SUBSIDY TO THIS ASSESSEE BUT IT WAS ONLY IN THE F ORM OF A TAX HOLIDAY, THEREFORE, SUCH A SUBSIDY DO NOT QUALIFY FOR EXEMPT ION. LD.DR HAS ALSO MENTIONED CLAUSE-8 (INCENTIVES OF THE NEW PACKAGE SCHEME FOR INCENTIVE TOURISM PROJECT 1995-2000 DTD. 20/12/199 5) AND ARGUED THAT THE TAX HOLDING IS AVAILABLE TO NEW UNITS OR AN EXP ANSION OF EXISTING UNITS IN RESPECT OF ENTERTAINMENT TAX COLLECTED ON SALE O F TICKETS. BECAUSE IT WAS A PART OF THE SALE WHICH WAS COLLECTED AT THE T ICKET COUNTERS, HENCE, THE NATURE WAS NOTHING BUT A REVENUE RECEIPT. 7. FROM THE SIDE OF THE ASSESSEE LD.AR MR. S.N.SOPA RKAR APPEARED AND, AT THE OUTSET, STATED THAT THE ISSUE IS DIRECT LY COVERED BY THE DECISION OF HONBLE HIGH COURT BOMBAY IN THE CASE OF CIT-I, KOLHAPUR VS. M/S.CHAPHALKAR BROTHERS, PUNE, DATED 8 TH JUNE-2011 IN INCOME TAX ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 10 - APPEAL NO.1036 OF 2010 AND INCOME TAX APPEAL NO.114 7 OF 2010. HE HAS INFORMED THAT THE SCHEME WHICH WAS PRONOUNCED BY THE MAHARASHTRA GOVERNMENT WAS NOT EVEN IDENTICAL BUT I T WAS THE SAME SCHEME WHICH WAS ADOPTED BY THE GUJARAT GOVERNMENT. SINCE THE SAID SCHEME OF MAHARASHTRA GOVERNMENT WAS CONSIDERE D AND THE EXEMPTION WAS AFFIRMED BY THE HONBLE HIGH COURT, T HEREFORE, THE ISSUE NOW STOOD COVERED IN FAVOUR OF THE ASSESSEE. RELE VANT PARAGRAPH (CHAPALKAR BROS.) OF THIS PRECEDENT IS AS FOLLOWS :- 5. SINCE THE OBJECT OF SUBSIDY WAS TO PROMOTE CONSTRUCTION OF MULTIPLEX THEATRE COMPLEXES, IN OUR OPINION, RECEIP T OF SUBSIDY WOULD BE ON CAPITAL ACCOUNT. THE FACT THAT THE SUBSIDY WAS NOT MEANT FOR REPAYING THE LOAN TAKEN FOR CONSTRUCTION OF MULTIPLEXES CANNOT BE A GROUND TO HOLD THAT SUBSIDY RECEIPT WAS ON REVENUE ACCOUNT, BECAUSE, IF THE OBJECT OF THE SCHEME WAS T O PROMOTE CINEMA HOUSES BY CONSTRUCTING MULTIPLEX THEATRES, T HEN IRRESPECTIVE OF THE FACT THAT THE MULTIPLEXES HAVE BEEN CONSTRUC TED OUT OF OWN FUNDS OR BORROWED FUNDS, THE RECEIPT OF SUBSIDY WOU LD BE ON CAPITAL ACCOUNT. IN THE LIGHT OF THE AFORESAID OBJECTS OF THE SCHE ME FRAMED BY THE STATE GOVERNMENT, THE DECISION OF THE INCOME TAX APPELLATE TRIBUNAL THAT THE AMOUNT OF SUBSIDY RECEI VED BY THE ASSESSEE IS ON CAPITAL ACCOUNT CANNOT BE FAULTED. ACCORDINGLY, BOTH THE APPEALS ARE DISMISSED WITH NO ORDER AS TO COSTS. 8. WE HAVE HEARD BOTH THE SIDES AT LENGTH. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW IN THE LIGHT OF THE COMPILATION FILED AND CASE LAWS REFERRED. WE HAVE EXAMINED THE REL EVANT CLAUSES OF THE SCHEME. A NEW PACKAGE SCHEME OF INCENTIVE FOR TOURISM PROJECT 1995- 2000 DATED 20 TH DECEMBER-1995 WAS PRONOUNCED BY THE GOVT. OF GUJARAT, INFORMATION, BROADCASTING & TOURISM DEPART MENT BY RESOLUTION NO.NTP-1095/1983-C DATED 20.12.1995. AS PER THE ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 11 - SCHEME, IN ORDER TO GIVE A BOOST TO TOURISM SECTOR BY ATTRACTING HIGHER INVESTMENT IN THE AREAS WITH TOURISM POTENTIAL AND TO GENERATE EMPLOYMENT OPPORTUNITIES THE STATE GOVERNMENT WAS P LEASED TO INTRODUCE CERTAIN NEW PACKAGES WHICH WERE FOR THE PROJECTS FO R A PERIOD OF 1995 TO 2000. IT HAS BEEN INFORMED BY LD.AR THAT THE SAI D PERIOD WAS LATER ON EXTENDED. AS PER CLAUSE 4.2 NEW TOURISM UNIT MEANS A PROJECT SET UP FOR THE FIRST TIME. THE ORIGINAL INVESTMENT MEANS INVESTMENT ON FIXED CAPITAL. AS PER THE ELIGIBILITY, THERE WAS A CLAUSE NO.4.4 INELIGIBLE INVESTMENT ACCORDING TO WHICH CERTAIN INVESTMENTS WERE NOT DECLARED AS ELIGIBLE FOR INCENTIVES VIZ.(1) WORKING CAPITAL, (2 ) GOOD-WILL, (3) PRE- OPERATIVE EXPENSE, (4) COMMISSIONING FEES, (5) SECO ND-HAND PLANT & MACHINERY PURCHASED OR SHIFTED FROM WITHIN THE COUN TRY (6) INTEREST CAPITALIZED, (7) VEHICLES AND (8) CONSUMABLE STORE . THE SCHEME HAS ALSO DEFINED VIDE CLAUSE 4.5 ELIGIBLE CAPITAL INVESTMENT. THE ELIGIBLE CAPITAL INVESTMENT INCLUDED LAND REQUIRED FOR THE PROJECT, BUILDING AND OTHER ACCOMMODATION REQUIRED FOR RUNNING OF THE UNI T, PLANT & MACHINERY, FURNITURE AND FIXTURE , INSTALLATION CHARGES, COST OF DEVELOPMENT, INVESTMENT MADE BY AN ELIGIBLE UNIT D URING THE OPERATIVE PERIOD OF THE SCHEME, ETC. A TAX HOLIDAY HAS BEEN GRANTED UPTO 100% OF THE CAPITAL INVESTMENT. THE QUANTUM OF INCENTIVE WAS ALSO FIXED AND AS PER THE SCHEME IT SHOULD NOT EXCEED 100% OF ELIGIBLE CAPITAL INVESTMENT. AS PER THE PERIOD OF THE ELIGIBILITY IF THE LIMITS OF INCENTIVES EXPIRE BEFORE THE ELIGIBLE PERIOD, THEN THE UNIT WA S NOT ALLOWED TO AVAIL OF ANY FURTHER BENEFIT. AT THIS JUNCTURE, LD.AR MR.S .N.SOPARKAR HAS PLEADED THAT THIS VERY CLAUSE ITSELF PROVES THAT TH E INCENTIVE WAS CAPITAL RELATED. ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 12 - BEFORE US, AN ORDINANCE OF MAHARASHTRA GOVERNMENT DATED 17/08/2001 HAS ALSO BEEN PLACED. AS PER THE TERMS MULTIPLEX THEATRE COMPLEX MEANS AN ENTERTAINMENT FROM CULTURE CENTRE WHICH PROVIDES THEATRES IN A COMPLEX WITH MINIMUM TOTAL SEATING CA PACITY OF 1250. THERE WAS SOME VARIATION IN THE SEATING CAPACITY C LAUSES, ETC. IN RESPECT OF THEATRE OUTSIDE THE MUNICIPAL CORPORATION OF MUM BAI. THIS ORDINANCE HAS PRESCRIBED THAT THERE WILL BE NO DUT Y ON THE PROPRIETOR OF A MULTIPLEX OF THE ENTERTAINMENT TAX COLLECTED. LD. AR HAS ALSO MENTIONED THAT THE ORDINANCE OF THE MAHARA SHTRA GOVERNMENT WAS VERBATIM ADOPTED BY THE GUJARAT STATE GOVERNMENT. LD.AR HAS ALSO MENTIONED THAT THE HONBLE BOMBAY HIGH COU RT IN THE APPEAL OF M/S CHAPALKAR BROS. ( SUPRA) HAS REPRODUCED THE S TATEMENT WHICH WAS IN THE SAID ORDINANCE SO AS TO EXAMINE THE NATURE OF THE SCHEME, AND FOR REFERENCE, WE HEREBY REPRODUCE THE SAME FROM THE OR DINANCE AS UNDER :- STATEMENT AS A RESULT OF THE ONSLAUGHT OF CABLE TELEVISION AN D ADVANCEMENT IN THE FIELD OF INFORMATION TECHNOLOGY, THE AVERAGE OCCUPANCY IN CINEMA THEATRE HAS FALLEN CONSIDERABLY AND HARDLY A NY NEW THEATRES HAVE BEEN STARTED IN THE RECENT PAST. PUB LIC AT LARGE THESE DAYS PREFERS TO SEE MOVIES AT HOME. KEEPING IN VIE W THIS SCENARIO, A CONCEPT OF COMPLETE FAMILY ENTERTAINMENT CENTRE, MORE POPULARLY KNOW AS MULTIPLEX THEATRE COMPLEX HAS E MERGED. THESE MULTIPLEX THEATRE COMPLEXES OFFER VARIOUS ENT ERTAINMENT FACILITIES FOR THE ENTIRE FAMILY UNDER SINGLE ROOF. HOWEVER, THESE COMPLEXES ARE HIGHLY CAPITAL INTENSIVE, THEIR GESTA TION PERIOD IS ALSO QUITE LONGER, AND THEREFORE, NEED GOVERNMENT S UPPORT AND INCENTIVE IN ENTERTAINMENT DUTY. 2. THE GOVERNMENT OF MAHARASHTRA, THEREFORE, CONSI DERS IT NECESSARY TO ENCOURAGE, BY GIVING INCENTIVES FOR TH E CONSTRUCTION OF NEW CINEMA THEATRES AND TO ENSURE THE HEALTHY CU LTURAL DEVELOPMENT IN THE STATE OF MAHARASHTRA. ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 13 - 3. GOVERNMENT HAS , THEREFORE, WITH A VIEW TO COMMEMORATE BIRTH CENTENARY OF CHITRAPATI LATE SHRI V. SHANTARAM, DECIDED TO GRANT CONCESSION IN ENTERTAINMENTS DUTY TO MULTIPLEX THEA TRE COMPLEXES TO PROMOTE CONSTRUCTION OF NEW CINEMA HOU SES IN THE STATE. 8.1. OUR ATTENTION HAS ALSO BEEN DRAWN THAT IT WAS OBLIGATORY ON THE PART OF THE MULTIPLEX OWNERS TO RUN THE THEATRE FOR 10 Y EARS AND IN CASE OF BREACH THE COLLECTOR WAS AUTHORIZED TO RECOVER THE ENTERTAINMENT DUTY ALONGWITH INTEREST AS IF NO CONCESSION IN ENTERTAIN MENT DUTY WAS EVER GRANTED. THEREFORE, IT WAS OBLIGATORY ON THE PAR T OF THE PROPRIETOR OF THE MULTIPLEX TO INFORM THE DAILY COLLECTION OF THE E.T . TO THE GOVERNMENT. 8.2. AFTER THE DISCUSSION ABOUT THE NATURE OF THE S CHEME, IT HAS BEEN BROUGHT TO OUR NOTICE THAT IN RESPECT OF PUNE MULTIPLEX THE SUBSIDY WAS GRANTED BY AN AMENDMENT OF SECTION-3 OF BOMBAY ENTE RTAINMENT DUTY ACT 1923 VIDE MAHARASHTRA ORDINANCE NO.XXIV OF 2001 DATED 17/08/2001 IN RESPECT OF BOMBAY ENTERTAINMENTS DUTY (AMENDMENT) ORDINANCE, 2001. IN RESPECT OF VADODARA MULTIPLEX , THE SUBSIDY WAS GRANTED BY GOVERNMENT OF GUJARAT THROUGH NEW TOURISM POLICY 1 995 AS SPELT OUT BY RESOLUTION NO.NTP-1095/1983-C DATED 20/12/1995. BOTH THE SCHEMES WERE IDENTICALLY WORDED AS EXPLAIN ED TO US AND THE VERY PURPOSE WAS TO PROMOTE THE CINEMA INDUSTRY. AS FAR AS THE COLLECTION OF THE ENTE RTAINMENT DUTY AND ABOUT THE AMOUNT COLLECTED, THERE IS NO DISPUTE BETWEEN THE PARTIES APPEARING BEFORE US. THE ONLY DISPUTE IS THAT WHETHER THE SA ID AMOUNT WHICH WAS COLLECTED AS A DUTY ON SALE OF TICKETS WAS IN THE N ATURE OF A CAPITAL ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 14 - RECEIPT OR IN THE NATURE OF A REVENUE RECEIPT. THE IDENTICAL MATTER HAD COME UP BEFORE THE ITAT PUNE BENCH IN THE CASE OF M/S.CHAPHALKAR BROTHERS VS. ITO ( ONE OF US I.E. J.M. IS THE AUTHO R) BEARING ITA NOS.1342 & 1342/PN/2006 FOR A.YS. 2003-04 & 2004-0 5 AND VIDE AN ORDER DATED 30/06/2009 , THE NATURE OF CLAIM AND THE PURPOSE OF THE SCHEME WERE EXAMINED IN THE LIGHT OF FEW FOLLOWING CASE LAWS:- I. RUBY RUBBGER WORKS LTD. (178 ITR 181) II. SADICHHA CHITRA (189 ITR 774) III. SAHNEY STEEL AND PRESS WORKS LTD. (228 ITR 25 3) IV. BALARAMPUR CHINI MILLS LTD. (238 ITR 445) V. PONNI SUGAR AND CHEMICALS LTD. (260 ITR 605) * VI. KANYAKUMARI DISTRICT CO-OPERATIVE SPINNING MIL LS LTD. (264 ITR 684) VII. RELIANCE INDUSTRIES LTD. (273 ITR 16) VIII. KALPANA PALACE (275 ITR 365) IX. R.B. NARAIN SINGH SUGAL MILLS LTD. (85 ITD 55 2) NB:-[ * THE LATEST CITATION IS CIT VS. PONNI SUGA RS AND CHEMICALS LIMITED (2008) 306 ITR 392 (SC) ] 8.3. THE TRIBUNAL HAS EXAMINED THE SCHEME AND THEN OPINED THAT IT WAS A BENEVOLENT SCHEME FOR THE BENEFIT TO THE EXHIBIT ORS/ MULTIPLEX OWNERS. THE SUBSIDY WAS MEANT TO GRANT ECONOMIC ASSISTANCE TO SET UP A MULTIPLEX. THE SUBSIDY WAS COLLECTED AS ENTERTAINM ENT DUTY ON SALE OF TICKETS. IT WAS FOUND BY THE TRIBUNAL THAT SUCH CO LLECTION WAS NOT A TRADE RECEIPT OF THE ASSESSEE BECAUSE THE ENTERTAINMENT D UTY WAS COLLECTED ON BEHALF OF THE GOVERNMENT. IT WAS COLLECTED UNDE R A SPECIFIC DIRECTION AND IT WAS ALSO UTILIZED UNDER THOSE DIRECTIONS. THE SAID COLLECTION OF DUTY HAD NO NEXUS WITH THE DAY-TO-DAY FUNCTION OR R UNNING OF THE MULTIPLEX. THE COLLECTION OF THE DUTY WAS NOT WITH AN OBJECTIV E TO ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 15 - SUPPLEMENT THE TRADE RECEIPT. THE SUBSIDY WAS MEANT FOR THE RECOUPMENT OF A CAPITAL EXPENDITURE ALREADY INCURRE D BY THE ASSESSEE. IT WAS HELD THAT THERE CAN BE TWO WAYS FOR THE DI SBURSEMENT OF THE SUBSIDY, ONE THAT THE GOVERNMENT CAN GIVEN A CASH SUBSIDY OR IN THE ALTERNATE, SECOND, BY A SPECIFIC SCHEME CAN ALLOW A BENEFICIARY TO RETAIN ANY CESS OR DUTY COLLECTED ON BEHALF OF THE GOVERNM ENT. DUE TO THIS REASON, THE MANNER THROUGH WHICH A DUTY IS COLLECTE D IS OF NO CONSEQUENCE. THEREAFTER, A CONCLUSION WAS DRAWN AS UNDER:- IN THE LIGHT OF THE ABOVE DISCUSSION WE CAN THEREF ORE SUMMARIZE OUR CONCLUSION THAT BROADLY SPEAKING THE SUBSIDY CA N BE OF TWO TYPES. (I) FOR THE PURPOSE OF HELPING THE GROWTH OF AN INDUSTR Y . (II) FOR THE PURPOSE OF SUPPLEMENTING THE PROFIT S OF AN INDUSTRY. 10.1. TO ASCERTAIN WHETHER IN A PARTICULAR CASE TH E SUBSIDY IN QUESTION FALL UNDER THE CATEGORY (I) OR (II); ONE H AS TO CAREFULLY EXAMINE THE FORM AS WELL AS SUBSTANCE OF THE IMPUGN ED SCHEME. WE HAVE DONE THAT EXERCISE AND ON CLOSE EXAMINATION UNDISPUTEDLY IT WAS NOTICED THAT THE SCHEME IN QUESTION HAD FALL EN IN THE FIRST CATEGORY I.E. FOR THE PURPOSE OF HELPING THE GROWTH OF AN INDUSTRY. THOUGH THE COLLECTION WAS IN THE FORM OF AN ENTERTA INMENT DUTY VIA SALE OF TICKETS FOR A LIMITED PERIOD BUT ITS UT ILIZATION WAS PREDETERMINED AND GRANTED WITH AN ASSURANCE TO COVE R UP THE COST OF CONSTRUCTION. ONCE IT IS DEMONSTRATED BEFORE US THAT TOO UNDISPUTEDLY THAT IT WAS NOT ATTRIBUTED IN ANY MANN ER TOWARDS SUPPLEMENTING OF DAY-TO-DAY EXPENDITURE OR IN THE F URTHERANCE OF THE PROFITS THEN IT CANNOT BE SAID TO BE IN THE CHA RACTER OF A REVENUE RECEIPT. CONTRARY TO THIS IT WAS IN THE NA TURE OF A CAPITAL RECEIPT BEING AN INCENTIVE TO SUPPLEMENT THE CONSTR UCTION EXPENDITURE OF NEW SET UP OF MULTIPLEXES HENCE IN T HE NATURE EOF CAPITAL RECEIPT. TO ARRIVE AT THIS CONCLUSION WE D RAW SUPPORT FROM ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 16 - A PLETHORA OF DECISIONS, FEW OF THEM ALREADY CITED ABOVE. WITH THE RESULT WE DECIDE THE GROUND IN FAVOUR OF THE ASSESS EE. 8.4. THE SAID ORDER OF THE TRIBUNAL NOW STOOD CONFIRMED BY THE HONBLE BOMBAY HIGH COURT AS CITED IN THE CASE OF M /S.CHAPHALKAR BROTHERS PUNE (SUPRA). THE HONBLE COURT HAS SAID THAT THE SUBSIDY WAS FOR THE PROMOTION OF THE CONSTRUCTION OF MULTIP LEX THEATRES, HENCE IT WAS GRANTED ON CAPITAL ACCOUNT. THE HONBLE COU RT HAS ALSO CONFIRMED THAT THE SUBSIDY WAS NOT MEANT FOR REPAYING ANY LOA N TAKEN FOR CONSTRUCTION OF MULTIPLEXES. CONSIDERING THE OBJE CT OF THE SCHEME, THE COURT HAS OPINED THAT THE SAME WAS TO PROMOTE CINEM A HOUSES TO CONSTRUCT MULTIPLEX THEATRES. IT WAS HELD THAT IR RESPECTIVE OF THE FACT THAT THE MULTIPLEXES HAVE BEEN CONSTRUCTED OUT OF OWN FU NDS OR BORROWED FUNDS THE RECEIPT OF SUBSIDY WOULD BE ON CAPITAL AC COUNT. WE HAVE TO FOLLOW THIS VERDICT PRIMARILY DUE TO THE REASON THA T THE VERY SCHEME IN QUESTION, NOW BEFORE US, HAS BEEN CONSIDERED BY THE HONBLE COURT IN THIS JUDGEMENT. 8.5. AS FAR AS THE DECISION OF SUNDARAM EXHIBITIONS (P) LTD.(SUPRA) IS CONCERNED, AS CITED FROM THE SIDE OF THE REVENUE B Y LD.CIT-DR, M R.GUPTA, WE HAVE THOROUGHLY EXAMINED OF THAT CASE. IT WAS FOUND BY THE HONBLE COURT THAT QUOTE FROM A CAREFUL PERUSAL OF THESE RULES, WE MAY DRAW AN INFERENCE THAT THE FINANCIAL ASSISTANCE WAS PROVIDED TO ENCOURAGE THE CINEMA OWNERS IN THIS LINE OF BUSINES S SO THAT THEY MAY CONSTRUCT ANOTHER CINEMA HOUSE, BUT IN THE INSTANT CASE, NO EFFORTS WERE MADE ON BEHALF OF THE ASSESSES TO CONSTRUCT ANY OTH ER CINEMA HOUSE AND HE HAS USED THE SUBSIDY RECEIVED FROM THE STATE GOV ERNMENT IN ITS ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 17 - BUSINESS ENTIRELY. UNQUOTE. THEREFORE, THE BASIC DISTINCTION WHICH WAS DRAWN BY THE HONBLE M.P. HIGH COURT WAS THAT NO EF FORTS WERE MADE BY THE ASSESSEE TO CONSTRUCT ANY OTHER CINEMA HOUSE AN D THAT ASSESSEE HAD USED THE SUBSIDY FOR ITS BUSINESS. ON ACCOUNT OF THAT FACT, IT WAS CONCLUDED THAT IN VIEW OF FOREGOING DISCUSSION, THE SUBSIDY RECEIVED BY THAT ASSESSEE WAS HELD AS REVENUE IN NATURE HENCE E XIGIBLE TO TAX. 8.6. AS FAR AS THE DECISION OF SHREEJI CHITRA MANDIR (S UPRA) IS CONCERNED, AS CITED BY THE LD.DR MR.GUPTA, THE RESPECTED CO-ORDINATE BENCH INDORE HAS EXAMINED THE SCHEME. THE SUBSIDY WAS TO BE GIVEN IN INSTALLMENTS AS DETERMINED BY THE ADMINISTRATION. EACH ELIGIBLE CINEMA HOUSE WAS REQUIRED TO FILE APPLICATION IN PRESCRIBE D FORM TO THE COLLECTOR. AFTER THE RECEIPT OF APPLICATION FROM THE OWNERS OF THE CINEMA HOUSES, THE COLLECTOR OF THE DISTRICT WILL MAKE SUCH ENQUIRIES AS HE MAY CONSIDER IT NECESSARY AND OBTAIN NECESSARY INFORMATION TO MAKE RECOMMENDATIONS TO THE COMMISSIONER OF EXCISE, WHO IN TURN WAS TO MAKE THE PAYMENT OF SUBSIDY UNDER INTIMATION TO THE COLLECTOR. IT WAS ALSO FOUND BY THE TRIBUNAL THAT IF THE OWNERS OF THE CINEMA HOUSES HA VE TAKEN LOAN FROM RASHTRIYA FILM DEVELOPMENT CORPORATION OR M.P.STATE FILM DEVELOPMENT CORPORATION, THEN THE SUBSIDY WOULD BE GIVEN THROUGH THEM. ON THAT FACTUAL FINDING, A DISTINCTION WAS DRAWN BY THE TRIBUNAL THAT THERE WAS A DIFFERENCE BETWEEN SUBSIDISING THE CAPITAL OUTLAY AND SUBSIDISING THE RUNNING OF THE BUSINESS. A CLEAR- CUT FINDINGS WAS GIVEN THAT GRANT-IN-AID RECEIVED BY THAT ASSESSEE WAS NOT RELATED TO ANY ASSET OR CAPITAL OUTLAY, IT WAS RECEIVED AFTER COMPLETION OF THE CINEMA HOUSE AND IT WAS TO ASSIST THE ASSESSEE TO RUN THE BUSINESS OF C INEMA HOUSE. IT WAS HELD THAT SUBSIDY WAS NOT GIVEN FOR CONSTRUCTION BU T THE PAYMENT OF ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 18 - SUBSIDY WAS NOTHING BUT SUPPLEMENTARY TRADE RECEIPT . LD.DR HAS THEREFORE RELIED UPON THESE TWO DECISIONS, HOWEVER, WE HAVE NOTICED THAT THE FACTS WERE DISTINCT FROM THE FACTS FROM THE CAS E IN HAND, HENCE HEREBY HOLD THAT THESE TWO PRECEDENTS BEING DISTINGUISHABL E ON FACTS THEREFORE DO NOT APPLY ON THE FACTS OF THIS CASE. 8.7. WE HAVE EXAMINED THE TRUE NATURE OF THE SUBSIDY IN THE HANDS OF THE ASSESSEE. HAVING REGARD TO THE NATURE OF S UBSIDY AND IN THE LIGHT OF THE ORDER OF THE HONBLE BOMBAY HIGH COURT, WE H EREBY AFFIRM THE FINDING OF LD.CIT(A). MOREOVER, THE FACTS OF THE C ASE IN HAND IS AKIN TO THE FACTS OF M/S CHAPHALKAR BROTHERS ( SUPRA) THERE FORE HOLDS THE FIELD, CONSEQUENTLY THIS ISSUE NOW STOOD SETTLED IN ASSES SEES FAVOUR BY THE HONBLE BOMBAY HIGH COURT. WE DECIDE ACCORDINGLY AND THESE GROUNDS ARE DISMISSED. 9. GROUND NO.2 (A) & 2(B) READS AS UNDER: 2(A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.35,96,000/- ON ACCOUNT OF EXPENDITURE OF RS.2,9 6,000/- BY WAY OF PROFESSIONAL FEES FOR REGISTRATION OF TRA DE MARK AND RS.33,00,000/- TOWARDS STAMP DUTY ON DOCUMENTATION FOR LOANS TAKEN FROM BANKS, TREATED AS CAPITAL EXPENDITURE. 2(B) THE LD. CIT(A) FAILED TO APPRECIATE THAT THE EXPENDITURE FOR REGISTRATION OF TRADE MARK IS INCURRED FOR OBTAINING AN ENDURING BENEFIT SINCE THE TRADE MARK WOULD CONTINU E WITH THE ASSESSEE FOR LONGER TIME. SIMILARLY, THE STAMP DUTY WAS PAID FOR OBTAINING TERMS LOAN WHICH WAS DIRECTLY LI NKED TO THE ASSETS OF THE COMPANY. THEREFORE, THESE EXPENS ES WERE CLEARLY IN CAPITAL IN NATURE. ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 19 - 9.1. IT WAS NOTED BY THE AO THAT A SUM OF RS.2,96,000/- WAS CLAIMED WHICH WAS ON ACCOUNT OF REGISTRATION OF TRADE MARKS. IT HAS ALSO BEEN NOTED BY THE AO THAT A SUM OF RS.10 LACS WAS PAID AS STAMP DUTY PERTAINING TO ICICI BANK LOAN. IT HAS ALSO BEEN NOTED BY THE AO THAT A SUM OF RS.20 LACS WAS PAID AS STAMP DUTY IN RESPECT OF UTI BANK LOAN. AS PER AO, ALL THOSE EXPENDITURE WERE CAPITAL E XPENSES. THE TOTAL CLAIM WAS COMPUTED BY THE AO AT RS.35,96,000/ - AND DISALLOWED BY TREATING THE SAME AS CAPITAL EXPENDITURE. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 10. THE LD.CIT(A) HAS DISCUSSED TWO CASE LAWS; NAME LY, CIT VS. FINLEY MILLS LTD. 20 ITR 475(SC) , IN RESPECT OF EXPENDITURE ON REGISTRATION OF TRADE-MARK AND INDIA CEMENTS LTD. 60 ITR 52(SC) IN RESPECT OF EXPENDITURE ON STAMP DUTY, ETC. FOR OBT AINING LOAN FROM THE BANK. HE HAS OPINED THAT THE ISSUE IS SQUARELY COV ERED BY THOSE PRECEDENTS, HENCE ALLOWED THE CLAIM. 11. FROM THE SIDE OF THE REVENUE, LD.DRS CONTENTIO N WAS THAT THE TRADE-MARK GIVES AN ENDURING BENEFIT, THEREFORE, TH E EXPENDITURE CONNECTED TO THE SAID ASSET SHOULD NOT BE ALLOWED A S A REVENUE EXPENDITURE. LIKEWISE IN RESPECT OF STAMP DUTY PA ID IN OBTAINING LOAN, THE LD.DR HAS ARGUED THAT THE LOANS WERE STATED TO BE TAKEN FOR THE PURPOSE OF CREATION OF ASSETS OF THE COMPANY AND IT S EXPANSION, THEREFORE, THE CONNECTED EXPENDITURE SHOULD ALSO HAVE BEEN CAP ITALIZED INSTEAD OF CLAIMING AS REVENUE EXPENDITURE. 12. HAVING HEARD THE SUBMISSIONS, WE HAVE EXAMINED THE NATURE OF EXPENDITURE AND THE RELATED CASE LAWS. THE ASSESSEE HAD ITS OWN TRADE- ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 20 - MARK INOX WHICH WAS TO BE REGISTERED UNDER THE TRADE-MARK AUTHORITY, MUMBAI. FOR THAT PURPOSE, ASSESSES HAS ENGAGED A LAWYER AND ALSO REQUIRED TO PAY THE FEES. TOTAL EXPENDITURE I NCURRED WAS RS.2,96,000/-. THE CORRESPONDING BILLS HAVE BEEN PLACED ON RECORD. AS FAR AS THE QUESTION OF TRADE-MARK IS CONCERNED, THE ISSUE IS NOW SETTLED VIDE THE CASES OF CIBA OF INDIA LTD. 69 ITR 692 (SC), MIHIR TEXTILE 287 ITR 232( GUJ.), AND KANPUR CIGARETTES PVT.LTD. 287 ITR 485( ALL.) . IN THE CASE OF CENTURY SPINNING 15 ITR 105( BOM. ) ON IDENTICAL FACTS IT WAS HELD THAT THE PROFESSIONAL FEES, ETC. PAID FOR TRADE-MARK IS AN EXPENDITURE OF REVENUE NATURE. RESPECTFULLY FOLLO WING THESE DECISIONS AND THE DECISIONS CITED BY THE LD.CIT(A), WE HEREBY AFFIRM THE RELIEF AND DISMISS THIS PART OF THE GROUND. 12.1. ABOUT THE CONTROVERSY OF EXPENDITURE ON STAMP DUTY, A SUM OF RS.10 LACS WAS PAID FOR REGISTERING THE MEMORANDUM IN RESPECT OF LOAN TAKEN FROM ICICI BANK PUNE. AGAIN, ON TWO DIFFER ENT DATES, RS.10 LACS EACH WERE PAID AS STAMP DUTY FOR REGISTERING A COMP OSITE HYPOTHECATION DEED IN RESPECT OF LOAN TAKEN FROM UTI BANK PUNE. FURTHER, A SUM OF RS.3 LACS WAS ALSO PAID AS A STAMP DUTY FOR REGISTE RING A SUPPLEMENTARY DEED IN RESPECT OF LOAN TAKEN FROM UTI BANK FOR BAR ODA UNIT. THE ARGUMENT IS THAT THE EXPENDITURE WAS BUSINESS NECES SITY AND INCURRED WHOLLY AND EXCLUSIVELY FOR RUNNING THE BUSINESS. T HERE IS A DIRECT DECISION OF ORISSA CEMENT LTD. VS. CIT 73 ITR 14(DEL) AS ALSO THE DECISION OF INDIA CEMENTS LTD. VS. CIT 60 ITR 52(SC), WHEREIN IT WAS HELD THAT THE AMOUNT SPENT ON OBTAINING LOAN IS AN EXPENDITURE LAID OUT WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSIN ESS. IT HAS ALSO BEEN HELD THAT THE OBJECT FOR WHICH A LOAN IS TAKEN IS A N IRRELEVANT ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 21 - CONSIDERATION. RESPECTFULLY FOLLOWING THESE TWO DE CISIONS, WE HEREBY UPHOLD THE VIEW TAKEN BY THE LD.CIT(A). THIS PART OF THE GROUND, THEREFORE, GOES IN FAVOUR OF THE ASSESSEE. IN TH E RESULT, THIS GROUND OF THE REVENUE IS DISMISSED. 13. GROUND NO.3 FOR A.YS.2003-04, 2005-06 AND GROUND N O.2 FOR A.Y. 2004-05 READ AS UNDER: 3(A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DIRECTING TO ALLOW DEDUCTIO N U/S.80IB AS CLAIMED BY THE ASSESSEE COMPANY. 3(B) THE LD. CIT(A) FAILED TO APPRECIATE THAT THE D ECISION OF THE ASSESSING OFFICER REJECTING THE CLAIM OF DEDUCT ION U/S.80IB WAS BASED ON A PHYSICAL INQUIRY CONDUCTED AT PUNE MULTIPLEX & BARODA MULTIPLEX WHEN IT WAS FOUND THAT THE ASSESSEE HAS NOT SATISFIED THE CONDITIONS PRESCRIBED UNDER RULE 18DB FOR GRANT OF DEDUCTION U/S.80IB OF THE ACT. 13.1. THE ASSESSEE HAS OPERATED TWO MULTIPLEX THE ATRES; ONE AT BARODA AND OTHER AT PUNE. IN THE COURSE OF ASSESSMENT PRO CEEDINGS, THE AO HAS EXAMINED THE LAY OUT AND BUILDING PLANS OF THOSE TW O THEATRES. ON VERIFICATION, IT WAS NOTED BY THE AO THAT AS PER RU LE 18DB, IT WAS REQUIRED THAT THE TOTAL BUILT-UP AREA SHOULD NOT BE LESS THAN 22500 SQ.FT. AND SHOULD ATLEAST CONSISTS 50% OF THE TOTAL BUILT- UP AREA FOR MULTIPLEX. FURTHER, IT WAS NOTED THAT AS PER RULE 18 DB SUB-RU LE-(I) CLAUSE(E) THERE SHOULD BE ATLEAST ONE LOBBY IN THE CINEMA THEATRE H AVING AREA OF MINIMUM 3 SQ.FT. PER SEAT. AS PER AO, IF THE COM MON AREAS WERE TO BE ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 22 - EXCLUDED, THEN THE TOTAL BUILT-UP AREA OF THE MULTI PLEX THEATRE WOULD REMAIN LESS THAN THE PRESCRIBED AREA OF 22500 SQ.FT . IN RESPECT OF PUNE AND BARODA MULTIPLEXES. THE AO HAS, THUS, GIVEN A FI NDING THAT THE ASSESSEE WAS NOT ENTITLED FOR THE DEDUCTION U/S.80IB(7A) OF I.T. ACT. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 14. LIKE AO, LD.CIT(A) HAS ALSO DISCUSSED THE FACTU AL AS ALSO LEGAL ASPECT IN DETAIL. ON EXAMINATION OF THE PRESCRIB ED RULE 18DB AND THE PROVISIONS OF SECTION 80IB(7A) OF THE I.T. ACT, HE HAS COMMENTED THAT THE AO WHILE CONSIDERING THE BUILT-UP AREA OF THE C INEMA THEATRE HAD EXCLUDED THE COMMON AREAS COMPRISING OF PROJECTION ROOM, STAIR CASES, AIR CONDITIONING AREA, TOILETS, ADMINISTRATIVE AREA , ETC. IT WAS NOTED BY THE LD.CIT(A) THAT ONLY AUDITORIUM WAS CONSIDERED. LD. CIT(A) HAS GIVEN A FINDING QUOTE IF THE AIR-CONDITIONING UNIT, PROJECTION ROOM, STAIRWAYS, GANGWAYS, ETC. ARE TAKEN INTO CONSIDERAT ION, THE TOTAL BUILT-UP AREA OF THE CINEMA THEATRES LOCATED AT THE MULTIPLE XES AT BARODA AND PUNE WOULD EXCEED THE MINIMUM PRESCRIBED ARE OF 22, 500 SQ.FT. THE TOTAL BUILT-UP ARE A IN CASE OF PUNE UNIT IS 43,839 SQ.FT. AND IN THE CASE OF BARODA UNIT IS 40,281 SQ.FT. HENCE, I AM OF THE OP INION THAT THE AO WAS NOT JUSTIFIED IN DENYING THE DEDUCTION U/.80IB ON T HIS GROUND. UNQUOTE . HE HAS ALSO GIVEN A FINDING THA T THE LOBBIES AT BARODA AND AT PUNE WERE CONTIGUOUS THEREFORE CONNEC TED. HIS FINDING WAS QUOTE SO FAR AS THE OTHER OBJECTION OF THE AO IS CONCERNE D I.E., THAT THE AREA OF THE LOBBIES WAS LESS THAN 3 SQ.FT. PER SEAT, IT IS PERTINENT TO NOTE THAT THE TOTAL NUMBER OF SEATS IN THE PUNE UNI T WAS 1316 AND IN THE BARODA UNIT WAS 1318. HENCE THE AREAS OF THE LOBBI ES IN THE TWO ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 23 - MULTIPLEXES SHOULD HAVE BEEN MINIMUM OF 3948 SQ.FT. AND 3954 SQ.FT. AS PER THE CERTIFICATE OF THE CHARTERED ACCOUNTANT FUR NISHED IN FORM NO.10CCBA, THE AREA OF THE LOBBY IN PUNE MULTIPLEX WAS 5375 SQ.FT. AND THE AREA OF THE LOBBIES OF BARODA UNIT WERE 5135 AN D 3972 SQ.FT. RESPECTIVELY. REGARDING THE NON-CONTIGUOUS OR DISC ONTINUOUS NATURE OF THE LOBBIES AS ASSERTED BY THE ASSESSING OFFICER, T HE BUILDING PLAN AND ARCHITECTURAL DRAWINGS OF THE TWO MULTIPLEXES WERE CALLED FOR AND EXAMINED. UNQUOTE. HE HAS ALSO CONSIDERED THE OXFORD D ICTIONARY MEANING OF THE TERM LOBBY AND HELD THAT THE CORRI DORS ARE TO BE CONSIDERED AS A PART OF THE LOBBY. FINALLY, IT WAS HELD THAT THE AO WAS NOT JUSTIFIED IN DENYING THE DEDUCTION U/S.80IB OF THE ACT. 14.1 NOW THE REVENUE IS BEFORE US. REVENUE S OBJECTION IS THAT THE TECHNICAL QUESTION OF APPLICABILITY OF RULE 18DB S HOULD NOT HAVE BEEN DECIDED BY LD.CIT(A) WITHOUT OBTAINING AN ASSISTANC E FROM A QUALIFIED PERSON. LD.CIT(A) COULD HAVE REFERRED THE MATTER T O THE DISTRICT VALUATION OFFICER TO GET HIS COMMENTS. IT WAS A DISPUTE TO BE DECIDED ON THE BASIS OF A SPOT ENQUIRY SO AS TO ASCERTAIN THE SPECIFICATION OF BUILDING CONSTRUCTION IN THE LIGHT OF THE PROVISIO NS OF THE ACT, BUT THE HELP OF AN EXPERT WAS NOT TAKEN BY THE FIRST APPELL ATE AUTHORITY AND THEREFORE FAULTED IN GRANTING THE EXEMPTION. 15. DURING THE COURSE OF HEARING, LD.AR MR.S.N.SOPA RKAR HAD SOUGHT PERMISSION TO PLACE ON RECORD THE CONSTRUCTION PLAN FOR BOTH THE MULTIPLEXES OF BARODA AND PUNE. THOSE PLANS WERE FILED BEFORE US. THE MAPS AND SITE PLANS NOW PLACED BEFORE US ARE TE CHNICAL AND FOR US IT IS NOT EASY TO EAR-MARK THE AREAS PRESCRIBED FOR LO BBY, FOR PROJECTOR ROOM, ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 24 - AREA OF THEATRE AND THE AREA OCCUPIED, AIR-CONDITIO NING, PARKING, AREA OF EACH CINEMA SEAT ETC.ETC. LD. CIT(A) HAS NOT OBTA INED ANY REMAND REPORT FROM THE REVENUE DEPARTMENT WHILE DECIDING T HE TECHNICAL ISSUE OF THE CONSTRUCTION OF THE MULTIPLEX. THE CONNECTE D RULE HAS ISSUED GUIDELINE FOR CONSTRUCTION OF A MULTIPLEX, ACCORDIN G TO WHICH TOTAL BUILT- UP AREA OF A CINEMA THEATRE COMPRISING MULTIPLEX SH OULD NOT BE LESS THAN 22500 SQ.FT. AND SHOULD CONSISTS ATLEAST 50% OF THE BUILT-UP AREA, EXCLUDING THE PARKING AREA. A MULTIPLEX SHOULD CO MPRISE OF ATLEAST THREE CINEMA THEATRES. IT SHOULD ALSO HAVE COMMERCIAL SHOPS. THE CAPACITY OF CINEMA THEATRE SHOULD BE ATLEAST 900 SEATS AND C INEMA THEATRE SHOULD NOT HAVE LESS THAN 100 SEATS. COMMERCIAL SHOPS SHOULD NOT BE LESS THAN 3000 SQ. FT, HOWEVER, THE MINIMUM BUILT-UP AREA OF EACH SHOP SHOULD NOT BE LESS THAN 250 SQ.FT. A MULTIPLEX IS REQUIRED TO BE CENTRALLY AIR- CONDITIONED. THE CINEMA THEATRE SHOULD USE SEAT-BA TCH NOT LESS THAN 20 INCHES. FROM THE DETAILS FURNISHED BEFORE US S PECIALLY THE MAPS GIVEN IT IS DIFFICULT FOR US TO GIVE A FINDING THAT THE L AY OUT PLAN WAS IN-CONFORMITY WITH THE PRESCRIBED IT RULES. IN T HE INTEREST OF NATURAL JUSTICE, WE DEEM IT PROPER TO RESTORE THIS GROUND O F THE REVENUE BACK TO THE STAGE OF THE AO TO DECIDE AFRESH, NEEDLESS TO S AY AFTER PROVIDING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. IT IS FOR THE ASSESSEE AS ALSO FOR THE AO TO TAKE ASSISTANCE FROM A TECHNI CAL PERSON, SUCH AS, AN ARCHITECT OR A CIVIL ENGINEER TO ASCERTAIN THE FULF ILLMENT OF THE CONDITIONS AS PRESCRIBED UNDER THE STATUTE OF I.T. ACT. WIT H THESE OBSERVATIONS, GROUND MAY BE TREATED AS ALLOWED BUT FOR STATISTICAL PURPOSES. 16. GROUND NO.4 FOR A.YS. 2003-04 & 2005-06 AND GROUND NO.3FOR A.Y. 2004-05 READ AS UNDER:- ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 25 - 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN CANCELLING THE ENHANCE MENT OF BOOK PROFIT FOR THE PURPOSE OF SECTION 115JB BY THE AMOUNT OF PROVISION FOR GRATUITY AMOUNTING TO RS.5,10,000/-. 16.1. AS PER THE COMPUTATION OF BOOK PROFIT U/S.1 15JB OF THE ACT, IT WAS NOTICED BY THE AO THAT THE ASSESSEE HAD NOT ADD ED BACK AN AMOUNT OF RS.4,60,000/- PERTAINING TO PROVISION FOR LEAVE EN CASHMENT. IT WAS ALSO FOUND THAT A SUM OF RS.5,10,000/- PERTAINED TO THE PROVISION FOR GRATUITY. THE AO WAS OF THE VIEW THAT THOSE W ERE NOT THE ASCERTAINED LIABILITIES AND MERELY A PROVISION WAS MADE, HENCE, THE TOTAL AMOUNT WAS ADDED BACK FOR THE PURPOSE OF COMPUTATION OF BOOK P ROFIT U/S.115JB OF THE ACT. 17. FOLLOWING ECHJAY FORGINGS (P) LTD. 251 ITR 15(BOM), LD.CIT(A) HAS HELD THAT PROVISIONS FOR GRATUITY AND LEAVE ENCASHMENT WERE MADE ON ACTUARIAL BASIS, HENCE ALLOWABLE. MORE OVER IN THE CASE OF BHARAT EARTH MOVERS V/ S CIT 245 ITR 428( SC) IT WAS HELD A PROVISION IS MADE FOR MEETING THE LIABILITY UNDER T HE LEAVE ENCASHMENT SCHEME PROPORTIONATE WITH THE ENTITLEMENT EARNED BY THE EMPLOYEE ON ACCUMULATION AS APPLICABLE ON THE RELEVANT DATE, TH EN THE LIABILITY IS NOT A CONTINGENT LIABILITY . 18. ON HEARING THE SUBMISSIONS OF BOTH THE SIDES, W E FIND NO FALLACY IN THE JUDGEMENT OF THE LD.CIT(A) SPECIALLY WHEN THE I SSUE WAS DECIDED FOLLOWING A HIGH COURT DECISION WHEREIN IT WAS HELD THAT IF A PROVISION IS ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 26 - MADE ON THE BASIS OF A ACTUARIAL VALUATION , THEN THE LIABILITY IS NOTHING BUT AN ASCERTAINED LIABILITY, THEREFORE, SHOULD NO T BE ADDED IN THE COMPUTATION OF BOOK PROFIT FOR THE PURPOSE OF THE PROVISIONS OF SECTION 115JB OF THE ACT. THIS GROUND OF THE REVENUE IS, THEREFORE, DISMISSED. 19. NOW WE ARE LEFT WITH ONE MORE GROUND FOR A.Y. 2005-06, I.E. GROUND NO.1 ; REPRODUCED BELOW:- 1(A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE DISALLOWANCE OF RS.24,30,000 BEING LOSS FROM CROSS CURRENCY SWAP TRANSACTION TREATED AS SPECULATIVE LOSS. 1(B) THE LD. CIT(A) FAILED TO APPRECIATE THAT THE ASSESSEE COMPANY HAD ENTERED INTO A TRANSACTION WITH UTI BAN K BY VIRTUE OF WHICH IT HAD INCURRED LOSS OF RS.24.30 LACS AND SUC H TRANSACTION WAS IN THE NATURE OF SPECULATIVE TRANSACTION. 19.1. THE ASSESSEE HAS CLAIMED A LOSS OF RS.24.30 L ACS ON ACCOUNT OF CROSS CURRENCY SWAP TRANSACTION . THE LOSS WAS CLAIMED AS BUSINESS EXPENDITURE. THE ASSESSEE HAS ENTERED INTO A TRA NSACTION IN RESPECT OF UTI RUPEE LOAN WITH ICICI BANK FOR US$ CURRENCY. THE SAID ARRANGEMENT WAS SUBJECTED TO TWO RISKS, I.E. FORWAR D RATE ADJUSTMENT AND FORWARD EXCHANGE RISKS OF US $. IN TERMS OF THE SA ID AGREEMENT THE BANK HAD AGREED TO PAY AMOUNT IN RUPEE WHICH WAS SUFFICI ENT TO SUPPLANT RUPEE LIABILITY OF PRINCIPAL AMOUNT AND INTEREST. IN TURN, THE ASSESSEE WAS TO PAY THE BANK THE FRA I.E. A FIXED RATE OF IN TEREST. THE FLUCTUATION IN FRA AND US $ BEING PROPORTIONAL TO THE DOLLAR RA TE, THEREFORE, DEPENDING UPON THE MOVEMENT OF FOREIGN CURRENCY IN CURRENCY OPTION ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 27 - MARKET THE LIABILITY HAD INCURRED. THE AO HAS NO TED THAT THE ARRANGEMENT WAS A SWAP TRANSACTION THEREFORE THE ASSESSEE WAS AT LIBERTY TO CANCEL THE ARRANGEMENT IN THE EVENT OF T HE FLUCTUATION RESULTING INTO A DETRIMENTAL ADVERSE FLUCTUATION. THE ASSE SSEE WAS ALSO AT LIBERTY TO BOOK THE GAIN PURSUANT TO SWAP TRANSACTION AT AN OPPORTUNE TIME OWING TO FAVOURABLE SWING IN THE CURRENCY OPEN MAR KET. AS PER AO, IN EFFECT THE ASSESSEE HAD ENTERED INTO A SWAP TRAN SACTION WITH ICICI BANK AND THEREFORE ACTUALLY PLAYING WITH CURRENCY O PTION MARKET WITH THE ELEMENT OF FIXED INTEREST RATE. HOWEVER, THERE WA S AN ELEMENT OF GAIN OR LOSS WHICH COULD BE MATERIALIZED DEPENDING UPON THE FLUCTUATION IN CURRENCY OPTION MARKET. THE LOSS SO ARRIVED BY T HE ASSESSEE, AS PER AO WAS IN THE NATURE OF SPECULATIVE TRANSACTION. AS P ER AO, THE ASSESSEE HAS INDULGED IN SWAP TRANSACTION WHICH WAS NOT A LOSS D ERIVED FROM THE BUSINESS OF OPERATING MULTIPLEX COMPLEXES, THEREFOR E, IT WAS IN THE NATURE OF SPECULATIVE LOSS AND ACCORDINGLY DISALLOW ED. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 20. THE LD.CIT(A) WAS OF THE OPINION THAT THE PURPO SE OF LOAN WAS IN RESPECT OF BARODA UNIT. AS PER THE PROVISIONS OF FEMA, A COMPANY COULD NOT ENTER INTO A TRANSACTION IN FOREIGN CURRE NCY WITHOUT AN UNDERLYING TRANSACTION. THE ARRANGEMENT OF CURRE NCY SWAP TRANSACTION WAS ONE OF THE AVAILABLE MODES FOR GUARDING AGAINST THE RISK OF INCREASED INTEREST PAYMENT DUE TO FLUCTUATION IN THE FOREIGN CURRENCY EXCHANGE RATE. HE HAS ALSO NOTED THAT IN THE PRECEDING YEAR, THE A SSESSEE HAD GAINED FROM SUCH SWAP ARRANGEMENT. THE BURDEN OF HIGHER INTEREST WAS NOT IN THE NATURE OF SPECULATIVE LOSS. ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 28 - 20.1 FROM THE SIDE OF THE REVENUE, LD.DR MR. S.K.GUPTA HAS SUPPORTED THE ORDER OF THE AO AND ARGUED THAT A TRA NSACTION WHICH WAS ENTERED INTO WITH AN EXPECTATION OF GAIN OR LOSS IS NOTHING BUT A SPECULATIVE TRANSACTION. THE ASSESSEE HAS NOT TAKE N DELIVERY OF ANY COMMODITY AND ENTERED INTO THE SAID TRANSACTION WIT H A MOTIVE TO GAIN ON FLUCTUATION OF CURRENCY RATE. DUE TO THIS REASON , IT WAS RIGHTLY CONSIDERED BY THE AO AS A TRANSACTION IN THE NATURE OF SPECULATION WHICH WAS WRONGLY REVERSED BY THE CIT(A). 21. ON HEARING THE SUBMISSIONS OF BOTH THE SIDES, W E HAVE NOTICED THAT IT WAS NOT AN INDEPENDENT TRANSACTION OF SWAPPING I N FOREIGN CURRENCY BUT THE TRANSACTION WAS CONNECTED WITH THE BANK LOAN. IT HAS BEEN STATED WITH FULL SENSE OF RESPONSIBILITY THAT AS PER THE G UIDELINES OF FEMA, NO PERSON IS ALLOWED TO ENTER INTO A FOREIGN CURRENCY DEALING UNLESS AND UNTIL IT IS CONNECTED WITH SOME BUSINESS TRANSACTION OR A LOAN TRANSACTION. THE PURPOSE OF LOAN FROM UTI BANK AS PER SANCTION O F LOAN TERM DATED 22/04/2002, IT WAS FOR SETTING UP MULTIPLEX PROJECT AT BARODA . BECAUSE OF THIS REASON THE ISSUE IS TO BE DECIDED I N TERMS OF THE VIEW TAKEN BY THE HONBLE COURT AS PRONOUNCED IN THE CAS ES OF CIT VS. WOOD WARD GOVERNOR INDIA 294 ITR 451 (DELHI) AND V.S. DEMPO & COMPANY 206 ITR 291(BOM.). THESE TWO JUDGEMENTS WERE NOT AVAILABLE BEFORE AO, THEREFORE, THIS GROUND IS REQU IRED TO BE RECONSIDERED AT THE STAGE OF INVESTIGATION, SO THAT THE PURPOSE AND NATURE OF LOAN IS FIRST TO BE ASCERTAINED AND THEN ACCORDINGLY TO T REAT THE ADMISSIBILITY OF LOSS AS CLAIMED BY THE ASSESSEE. WE HOLD SO AND T HIS GROUND OF THE REVENUE MAY BE TREATED AS ALLOWED BUT FOR STATISTICAL PURPOSES ONLY. ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 29 - 22. IN THE RESULT, APPEALS OF THE REVENUE ARE PART LY ALLOWED BUT FOR STATISTICAL PURPOSES ONLY. (B) ASSESSEES APPEALS, ITA NOS.1991 & 1992/AHD/2009 F OR A.YS. 2004-05 & 2005-06 23. (A) GROUND NO.1 FOR A.Y. 2004-05 IS AS UNDER:- 1. IN CONFIRMING THE DISALLOWANCE OF RS.21,32,001 IN RESPECT OF ABANDONED PROJECT AT GURGAON. (B) GROUND NO.1 FOR A.Y. 2005-06 IS AS UNDER:- 1. IN CONFIRMING THE DISALLOWANCE OF RS.23,24,528 IN R ESPECT OF ABANDONED PROJECTS ANDHERI AND ALLAHABAD. 23.1. FACTS FOR BOTH THE YEARS ARE ALMOST IDENTICAL AS NARRATED IN THE RESPECTIVE ASSESSMENT ORDERS PASSED U/S.143(3) RESP ECTIVELY DATED 13/11/2006 AND 31/12/2007. FOR A.Y. 2004-05, A SU M OF RS.21,32,001/- WAS STATED TO BE IN RESPECT OF A NEW PROJECT AT GUR GAON. UNDISPUTEDLY, THE SAID PROJECT WAS ABANDONED. THE IMPUGNED AMOU NT WAS STATED TO BE IN RESPECT OF PROJECT REPORT, CONSULTATION AND COST OF TRAVEL, ETC. ON ONE HAND, THE ARGUMENT OF THE ASSESSEE WAS THAT IN THE COURSE OF AN ALREADY EXISTING BUSINESS, IT WAS DESIRED TO EXPAND THE SAME BUSINESS, HENCE, THE EXPENDITURE INCURRED IS ALLOWABLE AS REVENUE EX PENDITURE. ON THE OTHER HAND, AO WAS OF THE VIEW THAT UNDISPUTEDLY TH E IMPUGNED EXPENDITURE WAS TOWARDS SETTING UP OF A NEW PROJECT , HENCE, THE EXPENDITURE WAS TOWARDS CAPITAL FIELD. THE EXPEN DITURE WAS PRE- OPERATIVE IN NATURE, THEREFORE, OTHERWISE ALSO IT W AS REQUIRED TO BE CAPITALIZED IN THE EVENT OF THE SAID PROJECT COMMEN CED ITS BUSINESS OPERATION, COMMENTED BY THE REVENUE AUTHORITIES. PLACING RELIANCE ON ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 30 - E.I.D. PARRY (INDIA) LTD. VS. CIT 257 ITR 253 , THE AO HAS DISALLOWED THE CLAIM. IT IS WORTH TO MENTION THAT THE IMPUG NED EXPENDITURE WAS NOT CLAIMED IN THE COMPUTATION OF INCOME BUT OUT OF ABU NDANT PRECAUTION THE SAID CLAIM WAS MADE THROUGH NOTES ANNEXED TO THE CO MPUTATION OF INCOME. 24. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST AP PELLATE AUTHORITY, LD.CIT(A) HAS DISCUSSED FEW CASE LAWS, VIZ. E.I.D. PARRY (INDIA) LTD.(SUPRA), CIT VS. PRITHVI INSURANCE CO. LTD. 63 ITR 632, CIT VS. COROMANDAL FERTILIZERS 247 ITR 417 AND CIT VS. S EHASAYEE PAPER & BOARDS LTD. 243 ITR 421. ON READING OF THOSE JUDGE MENTS, THOUGH LD.CIT(A) HAS COMMENTED THAT QUOTE ALTHOUGH SOME HIGH COURTS HAVE HELD THAT EXPENDITURE INCURRED ON FEASIBILITY STUDI ES, PROJECT VIABILITY STUDIES, AND THE LIKE ARE TO BE ALLOWED AS REVENUE EXPENDITURE IN THE CASE OF ABANDONED PROJECTS, HERE THE FACTS ARE SLIGHTLY DIFFERENT. UNQUOTE. HE HAS CONCLUDED THAT IN CASE THE PROJECT WAS COMPLETE D AND COMMENCED A BUSINESS, THEN THE EXPENDITURE SHOULD HAVE BEEN CA PITALIZED AND SHOULD HAVE FORMED THE COST OF THE PROJECT. IN THE OPINIO N OF LD.CIT(A), THE EXPENDITURE WAS LAID OUT IN CAPITAL FIELD, THUS THE AOS VIEW WAS UPHELD. 25. FROM THE SIDE OF THE ASSESSEE, LD.AR S.N.SOPARK AR APPEARED AND, AT THE OUTSET, PLACE RELIANCE ON THE DECISION OF HO NBLE DELHI HIGH COURT IN THE CASE OF CIT VS. PRIYA VILLAGE ROADSHOWS LTD., 332 ITR 594 (DELHI). 26. ON THE OTHER HAND FROM THE SIDE OF THE REVENUE, MR. S.N.GUPTA, CIT DR HAS SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND PLACED ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 31 - RELIANCE ON THE DECISION OF HONBLE MADRAS HIGH COU RT IN THE CASE OF E.I.D. PARRY (INDIA) LTD. VS. CIT REPORTED AT 257 I TR 253 (MAD). 27. WE HAVE HEARD BOTH THE SIDES. FOR A.Y. 2004-05 , AN EXPENDITURE OF RS.21,32,001/- WAS IN RESPECT OF THE PROJECT AT GURGAON, HOWEVER, THAT PROJECT WAS ABANDONED. THE AO HAS MENTIONED THA T ON EXAMINATION OF THE NATURE OF EXPENDITURE IT WAS FOUND THAT THE SAM E WAS IN RESPECT OF PROJECT REPORT, ADVISORY CONSULTATION, COST FOR TRA VEL AND OTHER RELATED ACTIVITIES. FOR A.Y. 2005-06, EXPENDITURE INCURR ED WAS RS.22,69,624/- IN RESPECT OF A PROJECT AT ANDHERI, BOMBAY AND A SU M OF RS.54,904/- INCURED FOR A PROJECT AT ALLAHABAD. BOTH THE PROJ ECTS WERE ABANDONED. FOR BOTH THE YEARS, THE ASSESSEE HAS NOT CLAIMED TH E EXPENDITURE IN ITS COMPUTATION OF INCOME BUT MADE A CLAIM THROUGH NOTE S ANNEXED TO THE COMPUTATION OF INCOME. THE NATURE OF EXPENDITURE WAS ALIKE FOR BOTH THE YEARS, I.E. EXPENDITURE ON PROJECT REPORT, CONS ULTATION, COST OF TRAVEL AND OTHER RELATED ACTIVITIES. FROM THESE FACTS, IT IS CLEAR THAT THE ASSESSEE, IN FACT, WANTED TO PURSUE THE LIKE NATURE BUSINESS ALREADY IN EXISTENCE, I.E. RUNNING OF A MULTIPLEX AND EXHIBITI ON OF CINEMATIC FILMS. IT IS ALSO EVIDENT, AS NOTED BY THE AO, THAT THE EXPENDITURE WAS TOWARDS TECHNICAL REPORTS AND FINANCIAL FEASIBILITY OF THE PROJECT AND THOSE PROJECT REPORTS WERE OBTAINED FROM THE EXPERTS. FROM THE SIDE OF THE REVENUE, THOSE EXPENDITURE WERE ON CAPITAL FIELD AN D THEREFORE REQUIRED TO BE CAPITALIZED AS PRE-OPERATIVE EXPENDITURE IN R ESPECT OF THOSE PROJECTS. THEREFORE, REVENUE HAS HELD THAT IT WAS A CAPITAL E XPENDITURE BEING PART OF THE COST OF THE PROJECT. ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 32 - REVENUE HAS ALSO PLACED RELIANCE ON E.I.D. PARRY ( INDIA) LTD.[SUPRA]. ON CAREFUL READING, WE HAVE FOUND THAT THE ASSESSEE I N THAT CASE WANTED TO SET UP A NEW PROJECT FOR THE MANUFACTURE OF MENTHOL AT ENNORE. THE EXPENDITURE WAS INCURRED AS ENGINEERING FEE, TRAVEL EXPENSES, INTEREST, SALARY FOR EMPLOYEES WORKING IN THE PROJECT, LEGAL FEES, ETC. FOR THE PERIOD FROM 1975 TO 1978. HOWEVER, THE ASSESSEE S OUGHT THE CLAIM AS DEDUCTIBLE EXPENDITURE FOR THE ASSESSMENT YEAR IN Q UESTION, I.E. A.Y. 1981-82. IT IS ALSO NOTICED BY THE HONBLE COURT THAT THE EXPENDITURE WAS INCURRED FOR THE PURPOSE OF SETTING UP A NEW PROJECT. IT HAS ALSO BEEN NOTED BY THE HONBLE COURT THAT THE EXPENDITUR E HAD BEEN INCURRED IN THE YEARS PRIOR TO THE ASSESSMENT YEAR IN QUESTI ON. AFTER RECORDING THOSE FINDINGS ON FACT, IT WAS HELD THAT BY THE SUB SEQUENT EVENT OF CLOSURE OF THE PROJECT; IT DID NOT CONVERT AN EXPENDITURE I N THE NATURE OF CAPITAL INTO A REVENUE EXPENDITURE. THE EXPENDITURE WAS SETTING UP OF A NEW PROJECT WHICH WAS CLEARLY IN THE CAPITAL FIELD. AN OBSERVATION OF THE QUOTE IS WORTH REPRODUCTION:- THE EXPENDITURE INCURRED ON THAT CAPITAL PROJECT W AS NOT SOMETHING WHICH COULD BE REGARDED AS REVENUE EXPEND ITURE LAID OUT EXCLUSIVELY AND WHOLLY FOR THE PURPOSES OF BUSI NESS OF THE ASSESSEE AS WHAT THE ASSESSEE WAS TRYING TO START W AS A NEW BUSINESS FOR THE MANUFACTURE OF A NEW PROJECT. THE EXPENDITURE INCURRED THEREIN WAS CLEARLY CAPITAL EXPENDITURE AN D NOT REVENUE EXPENDITURE. 27.1. THEREFORE, THE DISTINCTION IS THAT IN THE ABO VE CITED PRECEDENT, THE ASSESSEE WAS SETTING UP A NEW PROJECT FOR THE PURPO SE OF MANUFACTURING OF A NEW PRODUCT. ON THE OTHER HAND, IN THE PRESENT APPEAL, NOW BEFORE US, ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 33 - THE ASSESSEE IS RUNNING A MULTIPLEX CINEMA THEATRE AND THE EXPENDITURE WAS IN RESPECT OF A NEW PROJECT FOR THE SAME LINE O F BUSINESS OF RUNNING OF MULTIPLEX AND CINEMA THEATRE. UNDISPUTEDLY, T HE EXPENDITURE WAS TOWARDS PROJECT REPORT AND CONSULTATION FEES, ETC. ON IDENTICAL FACTS IN THE CASE OF CIT VS. PRIYA VILLAGE ROADSHOWS LTD. (SUPRA) , THE HONBLE DELHI HIGH COURT HAS HELD AS UNDER:- THE ASSESSEE WAS INVOLVED IN THE BUSINESS OF RUNNI NG CINEMAS. THERE WAS A PROPOSAL BEFORE THE ASSESSEE TO TAKE OVER A CINEMA THEATRE FOR CONVERSION INTO A MULTIP LEX AND OPERATION AND MANAGEMENT THEREOF. THE ASSESSEE AVA ILED OF THE SERVICES OF AN ARCHITECT AND PAID HIM RS.2,05,0 00 AS FEE. HOWEVER IT WAS FOUND THAT THE PROJECT WAS NOT FINAN CIALLY AND TECHNICALLY VIABLE AND HENCE THE ASSESSEE DROPPED T HE PROJECT. LIKEWISE, THERE WAS A PROPOSAL TO TAKE OVER A CINEM A THEATRE FOR THE PURPOSE OF CONVERSION INTO A FOUR-SCREEN CI NEMA COMPLEX. DETAILED TECHNICAL AND FINANCIAL FEASIBIL ITY WAS CARRIED OUT AND BUILDING PLANS WERE PREPARED BY A CONSULTANCY GROUP. IN THIS CONNECTION THE ASSESSE E INCURRED AN EXPENDITURE OF RS.12,39,239. ON SUBSEQUENT MARK ET RESEARCH THE ASSESSEE PREFERRED TO RETAIN THE SINGL E-SCREEN CINEMA AND THE PROPOSAL OF CONVERSION OF THE CINEMA INTO A MULTIPLEX WAS SHELVED. THE ASSESSEE CLAIMED THE EX PENSES AS REVENUE EXPENDITURE. THE REVENUE HELD IT TO BE A C APITAL EXPENDITURE ON THE GROUND THAT THE EXPENSES WERE IN CURRED FOR ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 34 - CREATING A NEW ASSET. HOWEVER, THE TRIBUNAL ALLOWE D THE EXPENSES AS BUSINESS EXPENDITURE UNDER SECTION 37 O F THE INCOME-TAX ACT, 1961. ON APPEAL : HELD, DISMISSING THE APPEAL, THAT THE FEASIBILITY S TUDIES CONDUCTED BY THE ASSESSEE WERE FOR THE SAME AND EXI STING BUSINESS WITH A COMMON ADMINISTRATION AND COMMON FU ND AND THE STUDIES WERE ABANDONED WITHOUT CREATING ANY NEW ASSET. THEREFORE, THE EXPENSES WERE OF REVENUE NATURE. 27.2. IN OUR OPINION, THE ISSUE IN HAND IS THEREF ORE DIRECTLY COVERED BY THE AFOREMENTIONED ORDER OF THE HONBLE DELHI HIGH COURT, WHEREIN THE ASSESSEE WAS ALSO INVOLVED IN THE BUSINESS OF RUNNI NG CINEMAS. IN THE RESULT, WE HEREBY REVERSE THE FINDINGS OF THE AUTHO RITIES BELOW AND DIRECT THE REVENUE AUTHORITIES TO ALLOW THE CLAIM. THUS, THIS GROUND IS ALLOWED IN BOTH THE YEARS. 28. GROUND NO.2 FOR A.Y.2004-05 READS AS UNDER :- 2. IN RESPECT OF DEDUCTION U/S.81 IB: A) IN CONFIRMING EXCLUSION OF GAIN OF RS.56,00,000 FROM CROSS- CURRENCY SWAP TRANSACTION AND INTEREST INCOME OF RS .3,66,282 FROM THE INCOMES OF RESPECTIVE MULTIPLEXES WHILE CO MPUTING DEDUCTION U/S.80IB. B) IN HOLDING THAT THEY ARE NOT REQUIRED TO BE CON SIDERED AS PART OF INCOME OF MULTIPLEX BUSINESS WHILE COMPUTING THE DE DUCTION U/S.80IB. GROUND NO.2 FOR A.Y.2005-06 READS AS UNDER :- 2. IN CONFIRMING EXCLUSION OF INTEREST INCOME OF R S.53,234 FROM THE INCOME OF BARODA MULTIPLEX WHILE COMPUTING DEDU CTION U/S.80IB. ITA NOS.198 4,1991,2299,1992 & 2300/AHD/2009 REG: M/S.INOX LEISURE LTD. - 35 - 28.1. FROM THE SIDE OF THE ASSESSEE, LD.AR MR. S.N .SOPARKAR APPEARED AND STATED AT THE OUTSET THAT THESE GROUNDS ARE MER ELY ACADEMIC IN NATURE AND NEED NOT TO BE ARGUED. CONSIDERING HIS SUBMISS ION THESE GROUNDS BEING NOT PRESSED, HENCE DISMISSED. 29. AS A RESULT, APPEALS OF THE REVENUE ARE P ARTLY ALLOWED BUT FOR STATISTICAL PURPOSES AND APPEALS OF THE ASSESSEE AR E PARTLY ALLOWED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 09/ 09 /2011. SD/- SD/- ( A.N. PAHUJA ) ( MU KUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBE R AHMEDABAD; DATED 09/ 09 /2011 .(.. , . ../ T.C. NAIR, SR. PS #- #- #- #- ' '' ' /0 /0 /0 /0 1#0, 1#0, 1#0, 1#0, / COPY OF ORDER FORWARDED TO:- 1. 34 / APPELLANT 2. /634 / RESPONDENT 3. 8 / CONCERNED CIT 4. 8- / CIT (A)-I, BARODA 5. 0<= / , , / DR, ITAT, AHMEDABAD 6. =? @A / GUARD FILE. BY ORDER/ #- #, 60 / //TRUE COPY// B/ ! ,