DCIT, Circle - 3(1) , Kolkata V. M/s. SPPL Property Management Pvt. Ltd., , Kolkata

ITA 22/KOL/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0583 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2021
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 09-07-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 06-01-2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DINESH AIBOR JAYAL SAWKUIE
• Assessee Lawyers: S JHAJHARIA
• Keywords: Business income; Opportunity of being heard; Rule of consistency; Bad and doubtful debts; Revised return; Revenue expenditure; TDS; Set aside; FORM 26AS
• Section: 143(3); 142(1); 194C; 80IA; 13; 22; 28

Judgement Text

1 ITA NO. 22/KOL/2020 SPPL PROPERTY MANAGEMENT PVT. LTD., AY 2014-15 , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA [BEFORE HONBLE SHRI P. M. JAGTAP, VICE PRESIDENT A ND HONBLE SHRI A. T. VARKEY, JM] I.T.A. NO. 22/KOL/2020 ASSESSMENT YEAR: 2014-15 DEPUTY COMMISSIONER OF INCOME- TAX, CIRCLE-3(1), KOLKATA. VS. M/S. SPPL PROPERTY MANAGEMENT PVT. LTD. (PAN: AAICS7168Q) APPELLANT RESPONDENT DATE OF HEARING (VIRTUAL) 09.07.2021 DATE OF PRONOUNCEMENT 16.07.2021 FOR THE APPELLANT SHRI DINESH AIBOR JAYAL SAWKUIE, CIT FOR THE RESPONDENT SHRI S. JHAJHARIA, FCA ORDER PER SHRI A. T. VARKEY, JM: THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A)-10, KOLKATA DATED 31.10.2019 FOR AY 2014-15. 2. GROUND NO. 1 OF THE REVENUES APPEAL READS AS U NDER: WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE BY THE A.O. OF RS. 4,47,35,486/- ON ACCOUNT OF DISALLOWANCE OF DEDUCTION CLAIMED U/S. 80LA(4)(III) OF THE ACT IN R ESPECT OF PROFIT DERIVED FROM 'INDUSTRIAL PARK SALARPURIA SOFTZONE DISREGARDING THE FACT THE ASSES SEE FAILED TO FURNISH CBDT NOTIFICATION IN ACCORDANCE WITH INDUSTRIAL PARK SCHEME, 2020 WHICH IS MANDATORY FOR CLAIM OF DEDUCTION U/S. 80-IA(4)(III). 2.1. BRIEF FACTS AS NOTED BY THE AO IS THAT THE ASS ESSEE COMPANY HAD CLAIMED DEDUCTION U/S 80-IA(4)(III) FOR RS.16,07,99,016 FOR THE FOUR PROJECTS. THE AO NOTED THAT ASSESSEE HAD FILED THE AUDITED ACCOUNTS OF THE ASSESSEE COMPANY AS WELL AS FORM 10CCB AND SEPARATE ACCOUNTS OF EACH DECLARED ELIGIBLE PROJECT. ACCORDI NG TO AO, THE AUTHORIZED REPRESENTATIVE COULD NOT FURNISH THE NOTIFICATION OF THE CBDT IN A CCORDANCE WITH THE INDUSTRIAL PARK SCHEME 2002, AS NOTIFIED IN THE GAZETTE OF INDIA, W HICH IS MANDATORY FOR CLAIM OF DEDUCTION U/S 80-IA( 4) III) IN RESPECT OF THE PROJECT OF 'SA LARPURIA TOUCHSTONE' AND 'SALARPURIA SOFTZONE', IN SPITE OF CALLING OR THE SAME THROUGH NOTICES ISSUED U/S 142(1) DATED 8/8/2016 & 2 ITA NO. 22/KOL/2020 SPPL PROPERTY MANAGEMENT PVT. LTD., AY 2014-15 29/8/2016, TILL THE PASSING OF ASSESSMENT. THEREFOR E, THE DEDUCTION U/S 80-IA(4)(III) IN RESPECT OF THE PROJECT OF 'SALARPURIA TOUCHSTONE' A ND 'SALARPURIA SOFTZONE' WAS DISALLOWED AND THE SUM OF RS.6,32,25,256 IS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 2.2. AGGRIEVED BY THE AFORESAID ACTION OF THE AO, T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO WAS PLEASED TO DELETE THE SAME I N RESPECT OF SALARPURIA SOFTZONE . AGGRIEVED BY THE ACTION OF THE LD. CIT(A), THE REVE NUE IS BEFORE US. 2.3. WE HAVE HEARD RIVAL SUBMISSIONS AND CAREFULLY GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE AO HAS OBSERVED THAT THE ASSESSEE COMPANY HAS FILED ITS RETURN OF INCOME FOR AY 2014-15 ON 29.11. 2014 DECLARING A TOTAL INCOME OF RS.41,04,26,777/-. THE AO NOTED THAT THE ASSESSEE FILED A REVISED RETURN ON 29.03.2016 DECLARING A TOTAL INCOME OF RS.40,88,96,546/-. THE AO TOOK NOTE OF THE FACT THAT THE ASSESSEE CLAIMED DEDUCTION U/S. 80IA OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR RS.16,03,16,963/- AND INCOME OF RS. 24,85,79,580/- WAS OFFERED TO TAX. LATER THE CASE WAS SELECTED FOR COMPLETE SCRUTINY THROUGH CASS. 2.4. THE AO NOTES THAT THE ASSESSEE COMPANY HAD IN COME FROM MAINTENANCE OF PROPERTIES/HOUSING PROJECTS/INDUSTRIAL PARKS AND RE NT AND OTHER MISCELLANEOUS RECEIPTS FROM SUCH ESTABLISHMENTS AND ALSO FROM TRADE OF FLATS OF GROUP COMPANIES. THE AO NOTED THAT THE ASSESSEE COMPANYS INCOME INCLUDED INCOME FROM OPER ATION AND MAINTENANCE OF INDUSTRIAL PARK PROJECTS AND PER FIRST PROVISO TO SECTION 80 -IA(4)(III) OF THE ACT, THE PROFIT FROM SUCH ACTIVITY BEING ELIGIBLE FOR 100% DEDUCTION UNDER CH APTER VIA OF THE ACT. THE AO NOTED THAT THE ASSESSEE COMPANY HAD BEEN CLAIMING SUCH DE DUCTION SINCE AY 2006-07. THE AO ACKNOWLEDGES THAT HE COLLECTED INFORMATION AND EVID ENCE FROM THE ASSESSEE COMPANY BY ISSUING STATUTORY NOTICE AS PER LAW. 2.5. COMING TO THE FACTS OF THE GROUND NO.1 THE AO NOTED THAT THE ASSESSEE COMPANY HAS CLAIMED DEDUCTION U/S. 80-IA(4)(III) OF THE ACT FOR RS.16,07,97,016/- FOR THE FOLLOWING PROJECTS: 3 ITA NO. 22/KOL/2020 SPPL PROPERTY MANAGEMENT PVT. LTD., AY 2014-15 2. 6. THE AO ACKNOWLEDGES THAT THE ASSESSEE HAD SUBMIT TED THE AUDITED ACCOUNTS AS WELL AS FORM NO. 10CCB AND SEPARATE ACCOUNTS OF EAC H DECLARED ELIGIBLE PROJECTS. THE AO FOUND THAT OUT OF FIVE (5) PROJECTS WHICH IS NAMED THEREIN IN THE CHART CITED SUPRA TWO (2) OF THE PROJECTS THE LD. AR COULD NOT SUBMIT THE NOTIFICATION OF THE CBDT AS PER THE INDUSTRIAL PARKS SCHEME, 2002 WHICH ACCORDING TO THE AO, IS MANDATORY FOR CLAIMING OF DEDUCTION U/S. 80-IA(4)(I II) I.E. PROJECT OF SALARPURIA TOUCHSTONE AND SALARPURIA SOFTZONE, THEREFORE, DEDU CTION CLAIMED U/S. 80IA(4)(III) OF THE ACT IN RESPECT OF BOTH THESE PROJECTS WERE DISA LLOWED AND A SUM OF RS.6,32,25,256/- WAS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. ON APPEAL, THE LD. CIT(A) HAS GIVEN RELIEF TO THE ASSESSEE IN RESP ECT OF THE PROJECT NAMED SALARPURIA SOFTZONE BY ALLOWING DEDUCTION OF RS.4,47,35,486/- AND UPHELD THE ACTION OF THE AO IN RESPECT OF THE OTHER PROJECT SALARPURIA TOUCHST ONE AND CONFIRMED THE DISALLOWANCE OF RS.1,84,89,770/-. THE REVENUE IS IN APPEAL IN R ESPECT OF THE RELIEF GRANTED TO THE DEDUCTION IN RESPECT OF THE PROJECT SALARPURIA SOF TZONE TO THE TUNE OF RS.4,47,35,486/- AND THE ASSESSEE IS NOT IN APPEAL AGAINST THE ACTION OF THE LD. CIT(A) 4 ITA NO. 22/KOL/2020 SPPL PROPERTY MANAGEMENT PVT. LTD., AY 2014-15 CONFIRMING THE ACTION OF THE AO IN RESPECT OF SALA RPURIA TOUCHSTONE (WHICH ISSUE ACCORDING TO THE LD. AR IS SUBJUDICE IN THE HONBLE KARNATAKA HIGH COURT). 2.7. IT IS NOTED THAT THE AO HAS DISALLOWED THE CLA IM IN RESPECT OF THE PROJECT NAMED SALARPURIA SOFTZONE SINCE THE ASSESSEE WAS UNABL E TO FURNISH A COPY OF THE RELEVANT CBDT NOTIFICATION. HOWEVER, IT IS NOTED THAT THE A PPROVAL FOR THE PROJECT HAS BEEN GRANTED BY MINISTRY OF COMMERCE & INDUSTRY ON 25.07 .2006 AND THE LD. AR DREW OUR ATTENTION TO THE LATER DEVELOPMENT WHICH HAS TAKEN PLACE WHEREIN THE CBDT VIDE NOTIFICATION DATED 08.09.2020 HAS NOTIFIED THE SAL ARPURIA SOFT ZONE AS UNDER: 2.8. FROM A PERUSAL OF THE ABOVE, WE NOTE THAT THE CBDT HAS ALBEIT LATE HAD ISSUED NOTIFICATION IN ACCORDANCE TO LAW IN RESPECT OF M/S . SOFTZONE TECH PARK LTD., THEREFORE, THIS PROJECT IS ELIGIBLE FOR DEDUCTION U/S. 80-IA(4 )(III) OF THE ACT. WE ALSO NOTE THAT THE LD. CIT(A) HAS GIVEN RELIEF TO THE ASSESSEE BY TAKI NG NOTE OF THIS TRIBUNALS DECISION IN THE CASE OF M/S. SALARPURIA SOFTZONE VS. JCIT IN IT A NOS. 665 & 666/KOL/2013 AND CROSS APPEAL BEING ITA NOS. 581 & 813/KOL/2013 FOR AYS. 2008-09 & 2009-10 WHICH WAS PRONOUNCED BY THIS TRIBUNAL B BENCH VIDE ORDE R DATED 29.02.2016 WHICH HAS BEEN REPRODUCED BY THE LD. CIT(A) FROM PAGES 14 TO 20 OF HIS ORDER. WE ALSO NOTE THAT THE TRIBUNAL HAS TAKEN NOTE OF THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN A CASE OF CIT VS. ITTINA PROPERTIES PVT. LTD., ITA NO . 556 OF 2013 AND 105 OF 2014 DATED 5 ITA NO. 22/KOL/2020 SPPL PROPERTY MANAGEMENT PVT. LTD., AY 2014-15 15.07.2014 IN SIMILAR MATTER AS WELL AS THE DECISIO N OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. AKRUTI CITY LTD. (2013) 214 TAX MAN 398 (BOM) WHEREIN THE HONBLE BOMBAY HIGH COURT HAS HELD THAT ONCE INDUST RIAL PARK WAS APPROVED BY MINISTRY OF COMMERCE & INDUSTRY, CBDT HAS TO SUO M OTO ISSUE NOTIFICATION AND ANY DELAY ON THE PART OF THE CBDT IN ISSUING NOTIFICATI ON WOULD NOT WARRANT THE ASSESSEE BEING DENIED BENEFIT OF DEDUCTION U/S. 80-IA(4)(III ) OF THE ACT. HONBLE HIGH COURT HAS DECIDED THIS ISSUE AS UNDER: 2.9. TAKING NOTE OF THE RATIO OF THESE DECISIONS T HE TRIBUNAL HAS GIVEN RELIEF TO THAT ASSESSEE (SALARPURIA SOFT ZONE) FOR CLAIMING DEDUC TION U/S. 80-IA(4)(III) OF THE ACT AND FOLLOWING THE SAME, THE LD. CIT(A) HAS GIVEN THE BE NEFIT OF THE CLAIM OF DEDUCTION OF RS.4,47,35,486/- U/S. 80-IA(4)(III) OF THE ACT AT 1 00% OF THE BUSINESS PROFIT DERIVED FROM THE INDUSTRIAL PARK SALARPURIA SOFTZONE. WE F IND THAT THE CBDT NOTIFICATION (SUPRA) AND THE TRIBUNALS DECISION (SUPRA) IN THE CASE OF M/S. SALARPURIA SOFTZONE (SUPRA), SO WE ARE OF THE OPINION THAT THE LD. CIT( A) HAS CORRECTLY ALLOWED THE DEDUCTION AND NO INFIRMITY COULD BE POINTED OUT BY THE LD. CIT, DR, THEREFORE, WE CONFIRM THE ACTION OF THE LD. CIT(A) AND DISMISS TH IS GROUND OF APPEAL OF THE REVENUE. 6 ITA NO. 22/KOL/2020 SPPL PROPERTY MANAGEMENT PVT. LTD., AY 2014-15 3. COMING TO GROUND NO. 2 OF THE REVENUE, WHICH IS AS UNDER: 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE BY THE AO O F RS.7,44,875/- ON ACCOUNT OF DISALLOWANCE OF DEDUCTION CLAIMED U/S. 80IA (4)(III) OF THE ACT DISREGARDING THE FACT THAT SUCH INCOME IS NOT DIRECTLY RELATED TO OPERATING AND MAINTENANCE OF TH E ELIGIBLE PROJECTS AND THUS CANNOT BE CLAIMED FOR COMPUTING DEDUCTION U/S. 80IA(4)(III) O F THE I. T. ACT, 1961. 3.1. BRIEF FATS OF THIS ISSUE AS NOTED BY THE AO TH AT THE ASSESSEE IN ITS PROFITS OF ELIGIBLE PROJECTS OF 'SALARPURIA G R TECH PARK', 'SALARPURIA HALLMARK' AND 'SALARPURIA INFOZONE' HAD INCLUDED OTHER INCOME RS.7,44,875/-. THE AO NOTES T HAT IN ORDER TO OPERATE AND MAINTAIN THE INDUSTRIAL PARKS HAD COLLECTED DEFINITE MAINTENANC E CHARGES FROM THE OCCUPANTS OF THE INDUSTRIAL PARKS FROM WHICH MAINTENANCE EXPENDITURE S WERE MET AND PROFIT WAS DERIVED. ACCORDING TO AO, DURING THE ASSESSMENT HEARINGS THE ISSUE OF EARNING OF 'OTHER INCOME' FROM THE ELIGIBLE PROJECTS WERE EXAMINED AND IT WAS FOUN D THAT THERE IS NO NEXUS BETWEEN THE OPERATION / MAINTENANCE ACTIVITY AND THE EXTRA OTHE R INCOME EARNED FROM SUCH PROJECTS, AND THEREFORE THE SUM OF RS.7,44,875 IS TREATED AS AN N ON-ELIGIBLE INCOME TO QUALIFY FOR DEDUCTION U/S 80 IA(4)(III). ACCORDING TO AO, THE A UTHORIZED REPRESENTATIVE COULD FURNISH NO LOGIC OR EVIDENCE TO PROVE OTHERWISE. ACCORDING TO AO, OTHER 'MISCELLANEOUS' INCOME OF RS.7,44,875 IS NOT DIRECTLY RELATED TO OPERATING AN D MAINTENANCE OF THE ELIGIBLE PROJECTS AND THUS ADDED BACK TO THE INCOME OF THE ASSESSEE. 3.2. AGGRIEVED BY THE AFORESAID ACTION OF AO, THE A SSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO ALLOWED THE CLAIM U/S. 80IA(4)(III) OF THE ACT. AGGRIEVED, THE REVENUE IS BEFORE US. 3.3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THRO UGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE ONLY REASON GIVEN BY THE AO TO DISALLOW THE CLAIM RAISED BY THE ASSESSEE U/S. 80IA(4)(III) OF THE ACT WAS THAT THIS AMOUNT CLAIMED AS DEDUCTION HAD NO NEXUS WITH THE OPERATION & MAINTENANCE ACTIVITY OF THE AS SESSEE AND SINCE NO EVIDENCE COULD BE FURNISHED BY THE ASSESSEE TO ESTABLISH THE NEXUS TH E CLAIM FOR DEDUCTION HE DISALLOWED. ON APPEAL, THE LD. CIT(A) NOTED THAT THE MISCELLANEOUS INCOME OF RS.7,44,875/- IS AGGREGATE OF MISCELLANEOUS INCOME EARNED FROM THREE (3) INDUSTR IAL PARKS VIZ. M/S. SALARPURIA G. R. TECH PARK (RS.96,670/-), M/S. SALARPURIA HALLMARK (RS.31 ,590/-) AND M/S. SALARPURIA INFOZONE 7 ITA NO. 22/KOL/2020 SPPL PROPERTY MANAGEMENT PVT. LTD., AY 2014-15 (RS.7,44,875/-). IT WAS TAKEN NOTE BY THE LD. CIT( A) THAT THIS AMOUNT WAS EARNED ON ACCOUNT OF SALE OF WASTE MATERIALS LEFTOVER BY THE OCCUPANTS AND ALSO ON ACCOUNT OF SOME INTEREST EARNED ON ELECTRIC DEPOSIT MADE WITH BESCO N FOR ELECTRIC CONNECTION FOR CONSUMPTION IN PARK; AND FOR THE MAINTENANCE OF THE THREE (3) INDUSTRIAL PARK NAMED AS M/S. SALARPURIA G. R. TECH PARK, M/S. SALARPURIA HALLMAR K AND M/S. SALARPURIA INFOZONE. IT WAS TAKEN NOTE BY THE LD. CIT(A) THAT THE WASTE MATERIA LS ACCUMULATED AND PILED UP IN THE RESPECTIVE PARKS WERE FINALLY DISPOSED OF AT NOMINA L PRICES WHICH WAS NECESSARY, SINCE THE MATERIALS WHICH IS NONE RE-USABLE WERE GETTING ACCU MULATED/PILING UP WHICH NEEDED TO BE REMOVED. THEREFORE, THE REMOVAL OF WASTE MATERIAL I S TO KEEP THE THREE PARKS CLEAN AND TIDY WHICH IS PART AND PARCEL OF THE MAINTENANCE ACTIVIT Y OF THE ASSESSEE COMPANY. THEREFORE, ACCORDING TO THE ASSESSEE, THE INCOME GENERATED FRO M SUCH SALE OF WASTE MATERIALS AND THE INTEREST EARNED IN THE PROCESS ARE PART OF THE ASSE SSEES BUSINESS ACTIVITY OF OPERATING AND MAINTENANCE OF INDUSTRIAL PARKS AND CITED VARIOUS J UDICIAL DECISIONS BEFORE THE LD. CIT(A) TO BUTTRESS ITS CLAIM. IT WAS BROUGHT TO OUR NOTICE T HAT THIS KIND OF DISALLOWANCE WAS MADE BY THE AO FOR THE FIRST TIME AND IN THE PREVIOUS YEAR S AND SUBSEQUENT YEARS THERE HAS BEEN NO SUCH DISALLOWANCE ON SIMILAR/IDENTICAL INCOME WHICH THE ASSESSEE HAD RECEIVED FROM SALE OF WASTE/SCRAP MATERIALS WHICH WAS NECESSARY FOR MAINT AINING THE PARKS. THEREFORE, CITING THE RULE OF CONSISTENCY THE LD. AR SUPPORTED THE ORDER OF THE LD. CIT(A). WE NOTE THAT THE LD. CIT(A) HAS GIVEN A FINDING OF FACT THAT ALL THE ITE MS CLAIMED UNDER THE HEAD MISCELLANEOUS INCOME HAVE A DIRECT NEXUS WITH THE BUSINESS OF TH E ASSESSEE NAMELY OPERATION AND MAINTENANCE OF THE THREE (3) ELIGIBLE INDUSTRIAL PA RKS. THE LD. CIT(A) HAS NOTED THAT IN THE FACTS OF THE CASE THE PROFITS AND GAINS FROM SALE OF SCRAP AND THE INTEREST INCOME CONSTITUTES INCOME FROM BUSINESS AND CITING THE DECISION OF THE HONBLE APEX COURT IN SANJEEB LAL 365 ITR 389 WAS OF THE OPINION THAT PURPOSIVE INTERPRET ATION IS REQUIRED TO BE MADE WHILE ADJUDICATING SUCH CLAIMS. WE FIND THAT SINCE THE S CRAPS OR WASTE MATERIALS WHICH WERE LEFT BEHIND BY THE OCCUPANTS WHEN THEY SHIFT FROM THE PA RK WERE GETTING ACCUMULATED IN THE PARKS AND REMOVAL OF THE SAME WAS NECESSARY TO KEEP THE PARK CLEAN & TIDY WHICH ACTIVITY IS THE TASK OF ASSESSEE I.E. OPERATION & MAINTENANCE O F THE PARK, SO THE INCOME WHICH WAS GENERATED FROM THE SALE OF SCRAP/WASTE MATERIAL (NO N-REUSABLE) AND INTEREST FROM BESCOM HAVE NEXUS WITH THE MAINTENANCE AND OPERATION OF TH E INDUSTRIAL PARKS. THE DEPOSITS INTEREST 8 ITA NO. 22/KOL/2020 SPPL PROPERTY MANAGEMENT PVT. LTD., AY 2014-15 FROM BESCOM WHICH WAS CLARIFIED BY THE LD. AR OF TH E ASSESSEE THAT WITHOUT DEPOSIT OF MONEY, ELECTRIC CONNECTION AND UN-INTERRUPTED SUPPL Y OF ELECTRICITY COULD NOT BE GIVEN BY THE BESCOM, THEREFORE, FOR SMOOTH OPERATION AND MAINTEN ANCE OF THE PARKS UNINTERRUPTED ELECTRICITY IS THE NECESSITY AND, THEREFORE, THE IN TEREST INCOME IN THIS WAY IS HAVING NEXUS WITH THE MAINTENANCE AND THE OPERATION OF THE PARK AND HAVE DIRECT NEXUS WITH THE INCOME (INTEREST) WHICH IS A PLAUSIBLE VIEW OF LD. CIT(A), WHICH WE DO NOT WANT TO INTERFERE BECAUSE IN EARLIER YEARS & SUBSEQUENT YEARS, SUCH A DISALLOWANCE WAS MADE BY THE AO. THEREFORE, APPLYING THE RULE OF CONSISTENCY WE UPHO LD THE ACTION OF LD. CIT(A) AND WE DISMISS THE GROUND OF REVENUE. 4. GROUND NO. 3 OF REVENUE APPEAL READS AS UNDER: 3. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 43,00,997/- AS RENTAL INCOME EARNED IN THE THREE INDUSTRIAL PARKS IGNORING THE FACT THAT PROFIT DERIVED FROM IN DUSTRIAL PARKS SALARPURIA SOFTZONE WAS TREATED AS NON-ELIGIBLE INCOME TO QUALIFY FOR DEDUC TION U/S 80IA(4)(III)? 4.1. BRIEF FACTS OF THE CASE AS NOTED BY THE AO IS THAT THE ASSESSEE HAS SHOWN HE REVENUE FROM OPERATIONS OF SALARPURIA GR TECH PARK, SALARPU RIA HALLMARK AND SALARPURIA INFOZONE INCLUDED RS. 43,00,997/- AS INCOME FROM RENT. THI S RENT INCOME WAS CLAIMED BY THE ASSESSEE TO BE FROM LETTING OUT SPACES IN THE INDUS TRIAL PARKS TO THE OCCUPANTS. ACCORDING TO AO, THE AUTHORIZED REPRESENTATIVE GAVE NO FURTHER E XPLANATIONS. THE AO NOTED THAT THE ASSESSEE COMPANY WAS NOT THE OWNER OF THE ELIGIBLE PROJECTS, IT HAD ENTERED INTO AGREEMENT WITH THE DEVELOPERS OF THE PROJECTS TO OPERATE AND MAINTAIN THE PARKS BUILT BY THE DEVELOPERS AND ENJOYED THE DEDUCTION UNDER CHAPTER VIA AS PER FIRST PROVISION TO SECTION 80IA(4)(III). ACCORDING TO AO, LETTING OUT SPACES ON THE PREMISES OF ANY ELIGIBLE PROJECT IS NOT AN ACTIVITY, WHICH CAN BE RELATED TO OPERATE AND MAINTAIN THE PROJECTS. THE AO THEREFORE, DISALLOWED DEDUCTION U/S 80IA(4)(III) TO THE EXTENT OF RS. 43, 00,997/- DERIVED FROM LETTING OUT ELIGIBLE PROJECTS SPACE, AND ADD BACK THE SUM TO THE INCOME OF THE ASSESSEE. 4.2. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BE FORE THE LD. CIT(A), WHO WAS PLEASED TO ALLOW THE APPEAL OF THE ASSESSEE. AGGRIEVED, TH E REVENUE IS BEFORE US. 4.3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH TH E FACTS AND CASE. WE NOTE THAT THE AO DID NOT ALLOW THE BENEFI T OF DEDUCTION OF RENTAL INCOME OF RS.43,00,997/- EARNED FROM THREE (3) INDUSTRIAL PARKS U/S. 80IA(4) (III) OF THE ACT. ON APPEAL, THE LD. CIT(A) EXAMINED AS TO WHETHER THIS RECEIPT H OPERATING AND MAINTENANCE OF THE ELIGIBLE BUSINESS (3 INDUSTRIAL PARKS). THE LD. CIT(A) AFTER CONSIDERING THE FACTS NOTED THAT THE RENTAL I NCOME WAS EARNED BY THE ASSESSEE BY ALLOWING KIOSKS/STALLS WITHIN THE INDUS ASSESSEE. THE LD. CIT(A0 FOUND THAT THE INCOME DER IVED FROM LETTING OUT OF SUCH KIOSKS/STALLS AND THE RESULTANT BENEFIT IN THE HA NDS OF THE ASSESSEE WAS FOR PROVIDING BETTER SERVICES TO THE OCCUPANTS OF THE I PORTION OF THE BUSINESS ACTIVITY OF OPERATING AND M AINTENANCE OF THE INDUSTRIAL PARKS. THE LD. CIT(A) NOTED THAT THE SAID KIOSKS/STALLS WERE GIVEN ON RENT SO THAT THE PERSONS WORKING IN VARIOUS COMPANIES O REFRESHMENT AS WELL. MOREOVER, THE LD. CIT(A) HAS TAKEN NOTE OF THE CBDT CIRCULAR NO. 16 OF 2016 WHICH CLARIFIES THAT THE LEASE RENT FROM LE TTING OUT BUILDINGS/DEVELOPED SPACE ALONG WITH OTHER AMEN ITIES IN THE INDUSTRIAL PARK (SEZ) NEED TO BE TREAT ED AS BUSINE THIS RESPECT, THE CBDT CIRCULAR IS REPRODUCED AS UNDER: 9 SPPL PROPERTY MANAGEMENT PVT. LTD., WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH TH E FACTS AND CASE. WE NOTE THAT THE AO DID NOT ALLOW THE BENEFI T OF DEDUCTION OF RENTAL INCOME OF EARNED FROM THREE (3) INDUSTRIAL PARKS U/S. 80IA(4) (III) OF THE ACT. ON APPEAL, THE LD. CIT(A) EXAMINED AS TO WHETHER THIS RECEIPT H AD DIRECT NEXUS WITH THE OPERATING AND MAINTENANCE OF THE ELIGIBLE BUSINESS (3 INDUSTRIAL PARKS). THE LD. CIT(A) AFTER CONSIDERING THE FACTS NOTED THAT THE RENTAL I NCOME WAS EARNED BY THE ASSESSEE BY ALLOWING KIOSKS/STALLS WITHIN THE INDUS TRIAL PARKS AND THE ELIGIBLE BUSINESS OF THE ASSESSEE. THE LD. CIT(A0 FOUND THAT THE INCOME DER IVED FROM LETTING OUT OF SUCH KIOSKS/STALLS AND THE RESULTANT BENEFIT IN THE HA NDS OF THE ASSESSEE WAS FOR PROVIDING BETTER SERVICES TO THE OCCUPANTS OF THE I NDUSTRIAL PARKS AND, THEREFORE, WAS AN EXTENDED PORTION OF THE BUSINESS ACTIVITY OF OPERATING AND M AINTENANCE OF THE INDUSTRIAL PARKS. THE LD. CIT(A) NOTED THAT THE SAID KIOSKS/STALLS WERE GIVEN ON RENT SO THAT THE PERSONS WORKING IN VARIOUS COMPANIES O PERATING FROM THE INDUSTRIAL PARK S REFRESHMENT AS WELL. MOREOVER, THE LD. CIT(A) HAS TAKEN NOTE OF THE CBDT CIRCULAR NO. 16 OF 2016 WHICH CLARIFIES THAT THE LEASE RENT FROM LE TTING OUT BUILDINGS/DEVELOPED SPACE ALONG ITIES IN THE INDUSTRIAL PARK (SEZ) NEED TO BE TREAT ED AS BUSINE RESPECT, THE CBDT CIRCULAR IS REPRODUCED AS UNDER: ITA NO. 22/KOL/2020 SPPL PROPERTY MANAGEMENT PVT. LTD., AY 2014-15 WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH TH E FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE AO DID NOT ALLOW THE BENEFI T OF DEDUCTION OF RENTAL INCOME OF EARNED FROM THREE (3) INDUSTRIAL PARKS U/S. 80IA(4) (III) OF THE ACT. ON APPEAL, AD DIRECT NEXUS WITH THE BUSINESS OF OPERATING AND MAINTENANCE OF THE ELIGIBLE BUSINESS (3 INDUSTRIAL PARKS). THE LD. CIT(A) AFTER CONSIDERING THE FACTS NOTED THAT THE RENTAL I NCOME WAS EARNED BY THE ASSESSEE BY TRIAL PARKS AND THE ELIGIBLE BUSINESS OF THE ASSESSEE. THE LD. CIT(A0 FOUND THAT THE INCOME DER IVED FROM LETTING OUT OF SUCH KIOSKS/STALLS AND THE RESULTANT BENEFIT IN THE HA NDS OF THE ASSESSEE WAS FOR PROVIDING NDUSTRIAL PARKS AND, THEREFORE, WAS AN EXTENDED PORTION OF THE BUSINESS ACTIVITY OF OPERATING AND M AINTENANCE OF THE INDUSTRIAL PARKS. THE LD. CIT(A) NOTED THAT THE SAID KIOSKS/STALLS WERE GIVEN ON RENT SO THAT THE PERSONS S TO GET COFFEE, TEA AND REFRESHMENT AS WELL. MOREOVER, THE LD. CIT(A) HAS TAKEN NOTE OF THE CBDT CIRCULAR NO. 16 OF 2016 WHICH CLARIFIES THAT THE LEASE RENT FROM LE TTING OUT BUILDINGS/DEVELOPED SPACE ALONG ITIES IN THE INDUSTRIAL PARK (SEZ) NEED TO BE TREAT ED AS BUSINE SS INCOME. IN 4.4 IT WAS ALSO BROUGHT TO OUR NOTICE THAT THE AO IN EA RLIER YEARS HAD ALLOWED THE CLAIM OF THE ASSESSEE IN RESPECT OF THIS RENTAL INCOME BY TR EATING IT AS BUSINESS INCOME AND ALLOWED THE CLAIM U/S. 80IA(4)(III) OF THE ACT. IN THE LIG HT OF THE CBDT CIRCULAR ( NOTE OF THE FACT THAT IN EARLIER YEARS AND SUBSEQUE NT YEARS THE LEASE RENT INCOME OFF OF KIOSKS/STALLS OF RS.43,00,997/ YEARS AND SUBSEQUENT YEARS THIS CLAIM WAS NOT DISA DISALLOWANCE IS MADE, SO BY APPLYING THE RULE OF CO NSISTENCY, THE DISALLOWANCE WAS NOT WARRANTED SINCE THERE IS NO CHANGE IN FACTS OR LAW. THEREFORE, THE ACTION OF LD. CIT(A) IS CONFIRMED. THEREFORE, WE CONFIRM THE ORDE REVENUES APPEAL. 4. GROUND NO. 4 OF REVENU4ES APPEAL READS AS UNDER: 4. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS. WITHOUT CONSIDERING THE FACT THAT THE RECONCILIATIO N STATEMENT FURNISHED BY THE ASSESSEE IS NOT BACKED BY CREDIBLE EVIDENCE? 5.1. THE FACTS OF THE CASE AS NOTED BY THE AO TOTAL RECEIPT FOR THE YEAR WAS RS. 90,92,17,176/ THE ITR, TOTAL REVENUE FROM OPERATION WAS SHOWN AS RS. 75,62,42,439/ T HE REVENUE DECLARATION WAS AUTHORIZED REPRESENTATIVE WAS ASKED TO RECONCILE TH E DIFFERENCE IN RESPONSE ACKNOWLEDGES THAT ASSESSEE PURSUANT TO THE SAME HAD FILED 10 SPPL PROPERTY MANAGEMENT PVT. LTD., IT WAS ALSO BROUGHT TO OUR NOTICE THAT THE AO IN EA RLIER YEARS HAD ALLOWED THE CLAIM OF THE ASSESSEE IN RESPECT OF THIS RENTAL INCOME BY TR EATING IT AS BUSINESS INCOME AND ALLOWED THE CLAIM U/S. 80IA(4)(III) OF THE ACT. IN THE LIG HT OF THE CBDT CIRCULAR ( NOTE OF THE FACT THAT IN EARLIER YEARS AND SUBSEQUE NT YEARS THE LEASE RENT INCOME RS.43,00,997/ - TO BE TREATED AS BUSINESS INCOME AND YEARS AND SUBSEQUENT YEARS THIS CLAIM WAS NOT DISA LLOWED AND FOR THE FIRST TIME THIS DISALLOWANCE IS MADE, SO BY APPLYING THE RULE OF CO NSISTENCY, THE DISALLOWANCE WAS NOT WARRANTED SINCE THERE IS NO CHANGE IN FACTS OR LAW. THEREFORE, THE ACTION OF LD. CIT(A) IS THEREFORE, WE CONFIRM THE ORDE R OF THE LD. CIT(A) AND DISMISS THIS GROUND OF GROUND NO. 4 OF REVENU4ES APPEAL READS AS UNDER: WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS. 13,20,80,813/- BEING THE UNDISCLOSED 26AS RECEIPT, WITHOUT CONSIDERING THE FACT THAT THE RECONCILIATIO N STATEMENT FURNISHED BY THE ASSESSEE IS NOT BACKED BY CREDIBLE EVIDENCE? THE FACTS OF THE CASE AS NOTED BY THE AO A S PER 26AS DATA RELATING TO THE ASSESSEE, THE TOTAL RECEIPT FOR THE YEAR WAS RS. 90,92,17,176/ - , WHICH WHILE AS PER THE FINAL ACCOUNTS AND THE ITR, TOTAL REVENUE FROM OPERATION WAS SHOWN AS RS. 75,62,42,439/ HE REVENUE DECLARATION WAS LESSER BY RS. 15,29,74,737/-. THEREFORE, THE AO ASKED THE AUTHORIZED REPRESENTATIVE WAS ASKED TO RECONCILE TH E DIFFERENCE IN RESPONSE ACKNOWLEDGES THAT ASSESSEE PURSUANT TO THE SAME HAD FILED RECONCILIATION STATEMENT. ITA NO. 22/KOL/2020 SPPL PROPERTY MANAGEMENT PVT. LTD., AY 2014-15 IT WAS ALSO BROUGHT TO OUR NOTICE THAT THE AO IN EA RLIER YEARS HAD ALLOWED THE CLAIM OF THE ASSESSEE IN RESPECT OF THIS RENTAL INCOME BY TR EATING IT AS BUSINESS INCOME AND ALLOWED THE CLAIM U/S. 80IA(4)(III) OF THE ACT. IN THE LIG HT OF THE CBDT CIRCULAR ( SUPRA) AND TAKING NOTE OF THE FACT THAT IN EARLIER YEARS AND SUBSEQUE NT YEARS THE LEASE RENT INCOME FROM LETTING BE TREATED AS BUSINESS INCOME AND SINCE IN EARLIER LLOWED AND FOR THE FIRST TIME THIS DISALLOWANCE IS MADE, SO BY APPLYING THE RULE OF CO NSISTENCY, THE DISALLOWANCE WAS NOT WARRANTED SINCE THERE IS NO CHANGE IN FACTS OR LAW. THEREFORE, THE ACTION OF LD. CIT(A) IS R OF THE LD. CIT(A) AND DISMISS THIS GROUND OF WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS BEING THE UNDISCLOSED 26AS RECEIPT, WITHOUT CONSIDERING THE FACT THAT THE RECONCILIATIO N STATEMENT FURNISHED BY THE ASSESSEE IS NOT S PER 26AS DATA RELATING TO THE ASSESSEE, THE , WHICH WHILE AS PER THE FINAL ACCOUNTS AND THE ITR, TOTAL REVENUE FROM OPERATION WAS SHOWN AS RS. 75,62,42,439/ -. THE AO NOTED THAT THEREFORE, THE AO ASKED THE AUTHORIZED REPRESENTATIVE WAS ASKED TO RECONCILE TH E DIFFERENCE IN RESPONSE AND HE RECONCILIATION STATEMENT. THE AO 11 ITA NO. 22/KOL/2020 SPPL PROPERTY MANAGEMENT PVT. LTD., AY 2014-15 NOTED THAT THE RECONCILIATION STATEMENT FILED BY TH E ASSESSEE AFFIRMED THAT THE MAINTENANCE CHARGES AS PER 26AS WAS RS. 57,17,66,220/- BUT AS PER ACCOUNTS THE MAINTENANCE CHARGES WAS RS. 43,96,85,407/-. ACCORDING TO AO, NO EXPLANA TION WAS OFFERED FOR THE DIFFERENCE OF RS. 13,20,80,813/-. THEREFORE, AO WAS OF THE OPINI ON THAT RS. 13,20,80,813/- WAS NOT OFFERED TO TAX AND THUS THE SUM OF RS. 13,20,80,813 /- WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE AS UNDISCLOSED INCOME. 5.2. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BE FORE THE LD. CIT(A) AND THE LD. CIT(A) DELETED THE ADDITION OF RS.13,20,80,813/-. AGGRIEVED, THE REVENUE IS BEFORE US. 5.3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROU GH THE FACTS AND CIRCUMSTANCES OF THE CASE. AT THE OUTSET, IT WAS BROUGHT TO OUR NOTICE BY THE LD. AR THAT BEFORE PASSING THE ASSESSMENT ORDER U/S. 143(3) OF THE ACT DATED 22.12 .2016, THE AO HAD IN FACT ISSUED A DRAFT ASSESSMENT ORDER DATED 01.12.2016 PLACED FROM PAGE 166 TO 168 OF PAPER BOOK WHEREIN THE AO HAD PROPOSED TO MAKE ADDITION ON THREE (3) ITEMS WHICH HAVE ALREADY BEEN DISCUSSED (SUPRA ISSUES RAISED FROM GROUND NO. 1 TO 3) AND IN THAT DRAFT ORDER THE AO HAD NOT MENTIONED ABOUT THE PROPOSED ADDITIONS OF RS.13,20 ,80,813/- PERTAINING TO THIS GROUND NO. 4 OF REVENUE APPEAL AND RS.2,02,30,945/- (GROUND NO. 5) OF THE REVENUE APPEAL. ACCORDING TO THE LD. AR, NO OPPORTUNITY WAS GIVEN BY THE AO BEFO RE FINDING FAULT ON THESE TWO FAULTS AND MAKING THESE TWO ADDITIONS. THEREFORE, DURING THE FIRST APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A) THE ASSESSEE FILED ALL THE DETAILS/RECONCILI ATION RESPECT OF THE ADDITION OF RS.13,20,80,813/- AND THE LD. CIT(A) AFTER CALLING FOR REMAND REPORT FROM AO AND AFTER GOING THROUGH THE FACTS OF THE CASE HAS GIVEN RELIE F TO THE ASSESSEE. WE NOTE THAT THE LD. CIT(A) HAS CALLED FOR THE REMAND REPORT (WHICH HAS BEEN REPRODUCED FROM PAGE 31 TO 32 OF THE IMPUGNED ORDER) AND THEREAFTER TAKING NOTE OF T HE REJOINDER FILED BY THE ASSESSEE TO THE REMAND REPORT (WHICH IS REPRODUCED FROM PAGE 33 TO 37 OF THE IMPUGNED ORDER) AND THEREAFTER THE LD. CIT(A) HAS FOUND THAT THE ADDITI ON OF RS.13,20,80,813/- WAS NOT WARRANTED, SINCE HE FOUND THERE WAS A DIFFERENCE B ETWEEN THE MAINTENANCE CHARGE RECEIVED (A) AS APPEARING IN 26AS DATA RS.57,17,66,220/- AND (B) THAT DISCLOSED AND CREDITED IN THE AUDITED ACCOUNTS RS.43,96,85,407/- THUS THE DIFFER ENCE OF RS.13,20,80,813/-. ACCORDING TO THE AO, IT WAS THE UNDISCLOSED INCOME SINCE THE ASS ESSEE WAS NOT ABLE TO EXPLAIN THE DIFFERENCE BY FILING RECONCILIATION STATEMENT. BY AO TO RECONCILE THE DIFFERENCE, SO QUESTION OF A SSESSEE FILING THE RECONCILIATION STATEMENT DOES NOT ARISE ANYWAY THE ASSESSEE HAD FILED THE SA ME BEFORE THE LD. CIT(A) AND REMAND REPORT HAS BEEN OBTAINED IN THIS REGARD. THE DIFFERENCE OF RS.13,20,80,813/ IGNORING THE FACT THAT SUCH DIFFERENCE REIMBURSEMENT OF ELECTR ICITY CHARGES AND GENERATOR CHARGES FOR WHICH NET I NCOME (RECEIPT LESS EXPENDITURE) O F RS.1,49,07,169/ SUCH AN ADDITION WOULD AMOUNT TO DOUBLE DEDUCTION A ND, THEREFORE, THE AO HAD ERRED IN MAKING THE ADD ITION. THE ASSESSEE HAD FILED THE RECONCILIATION W HICH IS FOUND PLACED AT PAGE 163 OF THE PAPER BOOK WHICH IS AS UNDER: 5.4. THE LD. AR DREW OUR ATTENTION TO PAGE 211 OF THE PA PER BOOK RELEVANT PORTION OF WHICH IS AS UNDER: 12 SPPL PROPERTY MANAGEMENT PVT. LTD., THE AO, IT WAS THE UNDISCLOSED INCOME SINCE THE ASS ESSEE WAS NOT ABLE TO EXPLAIN THE DIFFERENCE BY FILING RECONCILIATION STATEMENT. HOWEVER AS WE NOTED NO OPPORTUNITY WAS GIVE BY AO TO RECONCILE THE DIFFERENCE, SO QUESTION OF A SSESSEE FILING THE RECONCILIATION STATEMENT DOES NOT ARISE ANYWAY THE ASSESSEE HAD FILED THE SA ME BEFORE THE LD. CIT(A) AND REMAND REPORT HAS BEEN OBTAINED IN THIS REGARD. THE ASSESSEE CONTENDED BEFORE THE LD. CIT(A) THAT THE DIFFERENCE OF RS.13,20,80,813/ - WAS MADE BY THE AO TERMING IT AS UNDISCLOSED INCOME IGNORING THE FACT THAT SUCH DIFFERENCE WA S ON ACCOUNT OF RENTAL RECEIPT OF RS.70,09,943/ ICITY CHARGES AND GENERATOR CHARGES FOR WHICH NET I NCOME (RECEIPT F RS.1,49,07,169/ - AND RS.2,02,26,996/- WAS ALREADY OFFERED TO TAX AND SUCH AN ADDITION WOULD AMOUNT TO DOUBLE DEDUCTION A ND, THEREFORE, THE AO HAD ERRED IN ITION. THE ASSESSEE HAD FILED THE RECONCILIATION W HICH IS FOUND PLACED AT PAGE 163 OF THE PAPER BOOK WHICH IS AS UNDER: THE LD. AR DREW OUR ATTENTION TO PAGE 211 OF THE PA PER BOOK RELEVANT PORTION OF ITA NO. 22/KOL/2020 SPPL PROPERTY MANAGEMENT PVT. LTD., AY 2014-15 THE AO, IT WAS THE UNDISCLOSED INCOME SINCE THE ASS ESSEE WAS NOT ABLE TO EXPLAIN THE WE NOTED NO OPPORTUNITY WAS GIVE BY AO TO RECONCILE THE DIFFERENCE, SO QUESTION OF A SSESSEE FILING THE RECONCILIATION STATEMENT DOES NOT ARISE ANYWAY THE ASSESSEE HAD FILED THE SA ME BEFORE THE LD. CIT(A) AND REMAND THE ASSESSEE CONTENDED BEFORE THE LD. CIT(A) THAT WAS MADE BY THE AO TERMING IT AS UNDISCLOSED INCOME S ON ACCOUNT OF RENTAL RECEIPT OF RS.70,09,943/ - AND ICITY CHARGES AND GENERATOR CHARGES FOR WHICH NET I NCOME (RECEIPT WAS ALREADY OFFERED TO TAX AND SUCH AN ADDITION WOULD AMOUNT TO DOUBLE DEDUCTION A ND, THEREFORE, THE AO HAD ERRED IN ITION. THE ASSESSEE HAD FILED THE RECONCILIATION W HICH IS FOUND PLACED AT PAGE THE LD. AR DREW OUR ATTENTION TO PAGE 211 OF THE PA PER BOOK RELEVANT PORTION OF 13 ITA NO. 22/KOL/2020 SPPL PROPERTY MANAGEMENT PVT. LTD., AY 2014-15 NOTE 20 REVENUE FROM OPERATIONS FOR THE YEAR ENDED 31.03.2014 FOR THE YEAR ENDED 31.03.2013 INCOME FROM SALE OF FLATS (TRADED) INCOME FROM SERVICES MAINTENANCE CHARGES ELECTRICITY CHARGES GENERATOR MAINTENANCE OTHER MISC. CHARGES OTHER OPERATING INCOME RENT RECEIVED 5,71,41,601.00 43,96,85,407.06 1,49,07,168.57 2,02,26,996.93 9,07,989.00 70,09,943.20 53,98,79,105.76 39,07,52,381.47 1,44,20,281.00 94,52,858.40 63,94,677.00 42,10,20,197.87 TOTAL NOTE 21 OTHER INCOME FOR THE YEAR ENDED 31.03.2014 FOR THE YEAR ENDED 31.03.2013 MISCELLANEOUS INCOME COMPENSATION CLAIM PROFESSIONAL CHARGES RECEIVED PROFIT ON SALE OF INVESTMENT (FLATS) PROFIT ON SALE OF FIXED ASSETS INTEREST INCOME ON FIXED DEPOSIT ON DEBENTURES [RELATED PARTY NOTE28(K)] ON BESCOM DEPOSIT ON OTHERS ON SHORT TERM LOANS AND ADVANCES [RELATED PARTY NOTE 28(K)] 11,24,232.72 17,34,844.25 24,61,999.34 4,76,21,712.34 81,002.00 1,59,146.00 77,72,389.00 74,10,882.00 6,85,257.00 20,44,53,470.00 66,07,302.90 64,70,895.00 2,41,513.00 14,07,75,716.00 TOTAL 27,35,04,935.13 15,40,95,426.90 NOTE 22 PURCHASE OF GOODS YEAR ENDED 31.03.2014 FOR THE YEAR ENDED 31.03.2013 PURCHASE OF FLATS IN SALARPURIA GREENAGE SALARPURIA MELODY 3,98,70,567.25 2,67,43,600.00 TOTAL 6,66,14,167.25 14 ITA NO. 22/KOL/2020 SPPL PROPERTY MANAGEMENT PVT. LTD., AY 2014-15 5.5 BY DRAWING OUR ATTENTION TO THESE FACTS THE LD. AR STATED THAT THE ASSESSEE HAD INCOME FROM ELECTRICITY CHARGES TO THE TUNE OF RS.1 ,49,07,168/- AND GENERATOR MAINTENANCE OF RS.2,02,26,996/-. ACCORDING TO THE LD. AR, IN R ESPECT OF RS.12,01,38,071/- THE CUSTOMERS HAD DEDUCTED TDS WHICH WAS GENERATOR/ELECTRICITY CH ARGES REIMBURSEMENT. IT WAS POINTED OUT THAT THE ELECTRICITY AND GENERATOR MAINTENANCE INCOME WHERE NO TDS WAS DEDUCTED WAS TO THE TUNE OF RS.87,14,59,551/-. THUS, THE ELECTR ICITY AND GENERATOR MAINTENANCE CHARGES COME TO RS.99,15,97,622/- WHEN DEDUCTED BY THE EXPE NSES ON ACCOUNT OF ELECTRICITY AND GENERATOR MAINTENANCE CHARGES, THE NET RECEIPT IS O NLY TO THE TUNE OF RS.3,51,34,164/- WHICH TALLIES WITH THE P&L ACCOUNT, SO THERE IS NO DIFFER ENCE AND IT WAS RECONCILED. THE LD. CIT(A) AFTER GOING THROUGH THE RECONCILIATION AND S UBMISSIONS MADE BY THE LD. AR HELD AS UNDER: 3. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. A.O IN THE REMAND REPORT AS WELL AS THE SUBMISSIONS OF THE APPELLANT COUNTERING THE FIN DINGS OF THE LD. A.O, AS MADE OUT IN THE SAID REPORT. I NOTE THAT THE ADDITION OF RS. 13,20,80,81 3/- IS ON ACCOUNT OF ALLEGED DIFFERENCE IN AMOUNT OF INCOME SO REPORTED IN THE 26AS DATA AND THAT DIS CLOSED BY THE APPELLANT IN ITS PROFIT & LOSS ACCOUNT FOR THE YEAR. THE LD. AO IN HIS ORDER HAS C ONCLUDED THAT SINCE, SUCH DIFFERENCE HAS NOT BEEN CONSIDERED AND ACCOUNTED FOR IN THE RELEVANT Y EAR UNDER CONSIDERATION, THE ADDITION WAS DULY WARRANTED. IN THE REMAND REPORT, I OBSERVE THA T THE LD. AO HAS REITERATED THE EARLIER FINDINGS, WITHOUT RESPONDING TO THE FACTUAL CONTENT IONS AS MADE OUT BY THE APPELLANT, DULY SUPPORTED BY NECESSARY DOCUMENTATION. MOREOVER, HE HAS NO COMMENTS TO MAKE ON THE SPECIFIC SUBMISSION AND RECONCILIATION STATEMENT GIVEN BY TH E E APPELLANT. THE APPELLANT IN ITS SUBMISSION HAS SPECIFICALLY EXPLAINED THE ALLEGED CAUSE OF THE DIFFERENCE IN THE TWO DATA I.E. DATA AS PER 26AS AND AMOUNT SO SHOWN CREDITED IN THE P & L ACCOUNT. ON A PERUSAL OF THE RECONCILIATION, IT WAS OBSERVED THAT THE DIFFERENCE IS MAINLY DUE TO THREE FIGURES: A. TDS DEDUCTED ON THE REIMBURSEMENT RECEIVED BY THE APPELLANT RS. 12,01,38,071/- B. TDS ON SERVICE TAX BY SOME PARTIES RS. 4 3,32,799/- C. RENTAL INCOME CONSIDERED IN P & L ACCOUNT BUT NOT CONSIDERED BY AO FOR THE PURPOSE OF DIFFERENCE RS. 70,09,943/- RS. 13,20,80,813/- 4. THE APPELLANT IN ITS SUBMISSION HAS ALSO EXPLAIN ED THAT THE BILL FOR REIMBURSEMENT RAISED ON DIFFERENT PARTIES WERE RS.99,15,97,622/-, WHEREAS T HE AMOUNT EXPENDED WAS RS.95,64,63,358/- AND THEREFORE THE DIFFERENCE BEING RS.3,51,34,164/- WAS BOOKED AS 'INCOME' AND WHICH APPEARS FOR ELECTRICITY AT RS. 1,49,07,168.57 AND FOR GENER ATOR MAINTENANCE RS.2,02,26,996.93 AGGREGATING TO RS.3,51,34,165.50 AND THE SAME HAS B EEN DUTY REFLECTED IN THE P & L ACCOUNT FOR THE SUBJECT A.Y 2014-15. THE APPELLANT HAS SUBMITTE D THE COMPLETE LIST OF THE PARTIES (FOR REIMBURSEMENT) ALONG WITH THE AMOUNT OF REIMBURSEME NT SO RAISED ON EACH OF THEM AND THE AMOUNT EXPENDED ON THEIR BEHALF AND THIS COMPLETE I NFORMATION WAS ALSO FILED BEFORE THE LD. AO. IN THE BACKGROUND OF THE FORGOING FINDINGS, I OBSER VE THAT THE IMPUGNED ADDITION MADE BY THE LD. AO IS COMPLETELY UNJUSTIFIED, AS HON'BLE COURTS HAV E OPINED SEVERAL OCCASIONS THAT MERELY ON THE BASIS THE DATA IN 26AS THE ADDITION CANNOT BE S USTAINED. IN SUCH RESPECT, IT IS FURTHER OBSERVED 15 ITA NO. 22/KOL/2020 SPPL PROPERTY MANAGEMENT PVT. LTD., AY 2014-15 THAT THE APPELLANT HAS DUTY EXPLAINED THE SO CALLED DIFFERENCE BETWEEN THE TWO DATAS, AND THERE DOES NOT ARISE ANY OCCASION ON THE PART OF THE LD. AO TO MAKE SUCH ADDITION MERELY ON THE BASIS OF SUCH DIFFERENCE IN THE 26AS DATA AND AMOUNT REFL ECTED IN THE P & L ACCOUNT. FURTHER, IT IS ALSO OBSERVED THAT AN AMOUNT CANNOT BE AN INCOME JUST BE CAUSE TDS HAS BEEN DEDUCTED SINCE THE LIABILITY TO PAY TAX DEPENDS ON THE CHANGEABILITY O F SUCH INCOME WHICH DEFINED IN SEC. 4 OF THE ACT. IN MY CAREFULLY CONSIDERED VIEW ON SUCH ISSUES, UND ER THE PROVISION OF SEC. 4 OF THE ACT, IF AN AMOUNT DOES NOT BEAR THE CHARACTER OF INCOME THE SA ME CANNOT BE MADE CHARGEABLE TO TAX AND CANNOT BE CONVERTED TO INCOME ONLY BECAUSE PAYER OF THE SUM DEDUCTS TAX UNDER SOME MISCONCEPTION OF LAW. 5. IN THE CASE OF APPELLANT AS WELL SIMPLY BECAUSE THE PAYER HAVE DEDUCTED TAX U/S 194C ON THE REIMBURSEMENT SO MADE BY THEM, THE SAME CANNOT BE TREATED AS INCOME MERELY ON THE BASIS OF FORM 26AS DATA. THAT OBSERVED, I NOTE THAT THE APPE LLANT HAS SUCCESSFULLY EXPLAINED THAT THE DIFFERENCE IN REIMBURSEMENT HAS BEEN OFFERED TO TAX I.E. NET INCOME EARNED ON ACCOUNT OF REIMBURSEMENT HAS ALSO BEEN OFFERED' TO TAX AND HEN CE THE APPELLANT ITSELF HAS TAKEN THE NET EARNING OF SUCH AMOUNT FOR THE A.Y 2014-15, AND HEN CE NO SEPARATE ADDITION IN SUCH RESPECT CAN BE CALLED FOR. IN SUCH RESPECT, I ALSO DRAW STRENGT H FROM THE FOLLOWING JUDGMENTS : A. ADMINISTRATOR OF ESTATE OF LD. EDULJI FRAMROZE D INSHAW (EFD) 103 TAXMANN.COM 452 (MUMBAI ITAT) B. DCIT V. LYOD INSULATION INDIA LTD. (ITA NO.2400/ DEL/2011 DT. 9.8.2012) - FOR THE PROPOSITION THAT 'INCOME OF TAX PRAYER IS NOT REGUL ARLY TO BE COMPUTED MERELY WITH REFERENCE TO THE TDS CERTIFICATE BUT ASSESSMENT OF INCOME IS ALTOGETHER AN INDEPENDENT EXCISE'. 6. IN THE AFORESAID CASE THE LD. AO HAS NOT BEEN AB LE TO POINT OUT ANY LOOPHOLE IN THE SUBMISSION OF THE APPELLANT; MOREOVER, I AM SATISFI ED THAT THE APPELLANT HAS EXPLAINED AND RECONCILED THE ALLEGED DIFFERENCES, AND AS SUCH THE ADDITION MADE BY THE LD. A.O IS UNSUSTAINABLE ON THE BARE FACTS OF THE CASE. THE ADDITIONS ARE TH EREFORE DIRECTED TO BE DELETED, AND ACCORDINGLY GROUNDS 6 &. 7 OF THIS APPEAL STAND ALLOWED. 5.6. THE LD. CIT DR COULD NOT POINT OUT ANY INFIR MITY IN THE IMPUGNED ORDER(SUPRA) PASSED BY THE LD. CIT(A). THE LD. CIT(A) AFTER GOI NG THROUGH THE FACTS AND THE RECONCILIATION FILED AS WELL AS AFTER GOING THROUGH THE COMPLETE LIST OF PARTIES (WHO DEDUCTED TDS ON REIMBURSEMENT ALONG WITH THE AMOUNT OF REIMB URSEMENT) WHICH IS PLACED AT PAGE 164 TO 165 OF THE PAPER BOOK, HAS MADE A FACTUAL FI NDING THAT THERE IS NO DIFFERENCE WHICH WARRANTS ANY ADDITION ON THIS COUNT. IN THE LIGHT OF THE AFORESAID DISCUSSION WE ARE OF THE OPINION THAT THE AO ERRED IN MAKING THE ADDITION M ERELY ON THE BASIS OF THE DATA IN 26AS AND THE LD. CIT(A) AFTER PERUSAL OF THE RECONCILIA TION AND OTHER DOCUMENTS FILED HAS RIGHTLY DELETED THE ADDITION WHICH DOES NOT REQUIRE ANY INT ERFERENCE FROM OUR PART AND, THEREFORE, WE CONFIRM THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. THEREFORE, THIS GROUND OF APPEAL OF REVENUE IS DISMISSED. 16 ITA NO. 22/KOL/2020 SPPL PROPERTY MANAGEMENT PVT. LTD., AY 2014-15 6. GROUND NO. 5 READS AS UNDER: 5. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS. 2,02,30, 945/- ON ACCOUNT OF SUNDRY BALANCES WRITTEN OFF DEBITED IN THE AUDITED P & L ACCOUNT IGNORING THE F ACT THAT DURING THE COURSE OF ASSESSMENT PROCEEDING THE ASSESSEE HAS FAILED TO FURNISH ANY D OCUMENT IN THIS REGARD DESPITE PROVIDING SEVERAL OPPORTUNITIES OF BEING HEARD TO THE ASSESSE E ? 6.1. BRIEF FACTS OF THE CASE AS NOTED BY THE AO IS THAT THE ASSESSEE IN THE PROFIT AND LOSS ACCOUNT HAD DEBITED A SUM OF RS. 2,02,30,945/- AS SUNDRY BALANCE WRITTEN OFF. THEREFORE, THE AO ASKED THE ASSESSEE TO FURNISH THE DETAILS O F SUNDRY BALANCES WRITTEN OFF WITH REFERENCE TO OPENING DEBTORS AND CLOSING DEBTORS AN D THE YEAR OF ACCOUNTING TO REVENUE OF SUCH BALANCES. ACCORDING TO AO, THE ASSESSEE COULD NOT FURNISH ANY SUCH DETAILS. THEREFORE, THE SUM OF RS. 2,02,30,945/- WAS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 6.2. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BE FORE THE LD. CIT(A), WHO WAS PLEASED TO DELETE THE SAME. AGGRIEVED, THE REVENUE IS BEFO RE US. 6.3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROU GH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE LD. CIT(A) HAS GIVEN RELIEF TO THE ASSESSEE BY HOLDING AS UNDER: 7. HAVING CAREFULLY PERUSED THE FACTS OF THE CASE, I FIND THAT THE CONTENTION OF THE APPELLANT IS CORRECT ON FACTS, THAT THE LD. A.O R DID NOT INCLUD E THE PROPOSED ADDITION OF RS.2,02,30,945/- THAT THE ASSESSEE COMPANY HAD DEBITED IN AUDITED P/ L A/C SUM OF RS.2,02,30,945/- ON ACCOUNT OF SUNDRY BALANCES WRITTEN OFF UNDER THE HEAD 'OTHE R EXPENSES' IN SCHEDULE - 27 OF THE AUDITED ACCOUNTS. I ALSO OBSERVE THAT THE LD. A.O DID NOT G IVE ANY SHOW-CAUSE IN THE MATTER, AND SADDLED THE APPELLANT WITH THIS ADDITION. THAT OBSE RVED, I NOTE THAT ON FACTS THE IMPUGNED AMOUNT OF RS.2,02,30,945/- HAD BEEN ACTUALLY WRITTE N OFF IN THE P&L A/C. AND HAD BEEN CREDITED TO THE SUNDRY DEBTORS ACCOUNT, BY THE ASSE SSEE COMPANY. THERE IS NO GAINSAYING THAT AFTER 1ST DAY OF APRIL, 1989, FOR/ . ALLOWANCE OF B AD DEBT / BUSINESS LOSS IT IS ADEQUATE / ENOUGH IF THE DEBT IS WRITTEN OFF AS 'IRRECOVERABLE' IN TH E ACCOUNTS, AS HAS ALSO BEEN DECIDED BY THE HON'BLE SUPREME COURT IN THE CASE OF TRF LTD. V. CI T (2010) 190 TAXMAN 391 (SC). IN THAT SITUATION, IN MY CONSIDERED VIEW THE POSITION OF LA W IS AMPLY CLEAR AFTER 01.04.1989. IN MY CONSIDERED VIEW OF THE MATTER, WHEN THE ADMITTED AN D UNDISPUTED POSITION IS THAT THE DEBT / ADVANCES HAVE BEEN WRITTEN OFF AND THE LOAN AND ADV ANCES WAS GIVEN IN ORDINARY COURSE. OF REGULAR BUSINESS ACTIVITIES OF THE ASSESSED THE DEC ISION OF' THE APEX COURT WAS ADEQUATE FOR THE APPELLANT IN SO FAR AS THE ACTION OF WRITING OF F OF DEBT WAS SUFFICIENT TO CLAIM THE LOSS. SUCH A POSITION HAS BEEN ELABORATED IN RECENT JUDGMENTS, AND ONE SUCH JUDGMENT IS THE CASE OF THE HON'BLE ITAT, NEW DELHI IN CAPITAL SERVICES (INDIA) VS ADD). CIT, RANGE-12, NEW DELHI [ ITA NO. 2897 /DEL/2007 FOR A.Y 2000-01 ] AND CO IN [ITA NO. 2807 /DEL /2007 FOR A.Y 2000- 01 ] DATED 10TH JUNE, 2015. THE RELEVANT PORTION OF THE JUDGMENT IS REPRODUCED AS UNDER: 9. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROUG H THE MATERIAL PLACED ON RECORD. WE FIND THAT LD. CIT(A) HIMSELF SUPPORTED A FINDING THAT IN EARLIER YEAR, THE ASSESSEE WAS ALLOWED DEDUCTION ON ACCOUNT OF SOFTWARE BY ITAT AN D WE FURTHER FIND THAT DURING THE YEAR 17 ITA NO. 22/KOL/2020 SPPL PROPERTY MANAGEMENT PVT. LTD., AY 2014-15 1995-96 TO 1997-98, HON'BLE DELHI HIGH COURT HAD AL SO CONFIRMED THE ORDER OF ITAT AND HAD DISMISSED THE APPEAL OF REVENUE. WE FURTHER OBSERVE THAT HON'BLE DELHI HIGH COURT HAD RECORDED A FINDING OF FACT THAT EXPENDITURE WAS INC URRED ON M S OFFICE AND NOT ON CUSTOMIZED SOFTWARE AND HAD THEREFORE, CONFIRMED THE ITAT ORDE R. IN THE PRESENT CASE, THE A.O. HAD NOTED IN THE ASSESSMENT ORDER THAT EXPENDITURE WAS INCURR ED ON APPLICATION SOFTWARE AND, THEREFORE, ASSESSEE CANNOT BE SAID TO HAVE INCURRED EXPENDITUR E ON CUSTOMIZED SOFTWARE. IN THE CASE LAW OF CIT (A) VS ASAHI INDIA SAFETY GLASS LTD. 203 TAX MAN 277 RELIED UPON BY LD. A.R. THE HON'BLE COURT HAS HELD THAT EXPENDITURE INCURRED ON APPLICATION SOFTWARE IS A REVENUE EXPENDITURE. IN THE PRESENT CASE AS NOTED BY A.O. T HE EXPENDITURE WAS INCURRED ON APPLICATION SOFTWARE. THEREFORE, RESPECTFULLY FOLLOWING THE HON 'BLE DELHI HIGH COURT, WE HOLD THE EXPENDITURE INCURRED ON APPLICATION SOFTWARE TO BE REVENUE IN NATURE AND THEREFORE, WE ALLOW GROUND NO.2. II) BAD DEBTS: LD. A.R. SUBMITTED THAT BAD DEBTS HA D BEEN WRITTEN OFF BY ASSESSEE IN ITS BOOKS OF ACCOUNTS AND, THEREFORE, ITS CASE WAS SQUARELY C OVERED BY THE ORDER OF HON'BLE SUPREME COURT IN THE CASE OF TRF LTD. VS CIT 323 ITR 397 PL ACED AT PAPER BOOK 39 OF COMPILATION OF JUDGEMENTS. LD. A.R. FURTHER RELIED UPON THE CASE L AW OF AUTO METERS LTD. 292 ITR 345 DECIDED BY HON'BLE DELHI HIGH COURT PLACED A PAPER BOOK PAGES 42-43. INVITING OUR ATTENTION TO A.O.'S OBJECTION IN DISALLOWING THE WRITE OFF OF BAD DEBTS, LD. A.R. SUBMITTED THAT THE A.O. HAD DISALLOWED THE CLAIM HOLDING THAT LOAN GIVEN BY ASSESSEE HAS NOT FULLY BECOME IRRECOVERABLE AS THE LOANEE WAS NOT DECLARED BIFR C OMPANY AND THE CASE WAS PENDING WITH BIFR. LD. A.R. SUBMITTED THAT THE A.O. HAD HELD THA T TILL THE FINAL CONCLUSION WAS PENDING BEFORE BIFR THERE WAS CHANCE THAT ASSESSEE COULD GE T A PART OF AMOUNT AND THEREFORE, LOAN CANNOT BE SAID TO HAVE BECOME IRRECOVERABLE. IN THI S RESPECT, LD. A.R. SUBMITTED THAT HON'BLE SUPREME COURT IN THE CASE LAW OF TRF LTD. HAS CLEAR LY HELD THAT THE BAD DEBT CLAIM IS AVAILABLE TO AN ASSESSEE WHEN HE WRITES OFF IN ITS BOOKS OF ACCOUNTS THEREFORE, AS THE ASSESSEE HAD WRITTEN OFF THE CLAIM IN ITS BOOKS OF ACCOUNT, THE CLAIM OF DEDUCTION IS IN ACCORDANCE WITH LAW. LD. D.R. ON THE OTHER HAND SUBMITTED THAT THE A.O. HAS PASSED A DETAILED ORDER IN THIS RESPECT AND LD. CIT(A) HAS ALSO UPHELD THE SAME HOLDING THA T THE LOAN OF ASSESSEE WAS A SECURED LOAN AND THERE WAS A CHANCE OF RECOVERY OF AT LEAST PART IAL AMOUNT AND THEREFORE, LOSS ON ACCOUNT OF BAD DEBTS WAS NOT ASCERTAINED. IN VIEW OF THE FA CT THAT DEBT HAD NOT BECOME BAD, THEREFORE, HE HIGHLY PLACED RELIANCE ON THE ORDERS OF AUTHORIT IES BELOW. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROUGH T HE MATERIAL PLACED ON RECORD. FROM THE FACTS OF THE CASE, WE OBSERVE THAT THE ASSESSEE IS A NBFC AND ADVANCING LOANS IS ONE OF THE MAIN OBJECTS OF THE COMPANY AND THE ASSESSEE HAD AD VANCED LOAN TO ONE OF ITS CUSTOMERS NAMELY GRAPCO INDUSTRIES IN ORDINARY COURSE OF MONE Y LENDING BUSINESS AND IT IS ALSO A FACT THAT THE AMOUNT RECOVERABLE FORM THE LOANEE HAS BEE N WRITTEN OFF IN THE BOOKS OF ACCOUNTS OF ASSESSEE. IT IS ALSO OBSERVED THAT THE ASSESSEE HAD CLASSIFIED THE LOAN RECOVERABLE FROM GRAPCO LTD. AS A NON PERFORMING ASSET AS PER RBI NORMS AS NOTED AT PARA 5.3 OF A.O.'S ORDER. THE A.O. AND LD. CIT(A) HAS NOT ALLOWED THE CLAIM OF AS SESSEE HOLDING THAT DEDUCTION IS ALLOWED IN RESPECT OF BAD DEBTS WHICH IS WRITTEN OFF AS IRR ECOVERABLE IN THE ACCOUNTS AND NOT IN RESPECT OF ANY DEBT WHICH MAY BE WRITTEN OFF IN ITS ACCOUNT S. BOTH THE AUTHORITIES BELOW HAS HELD THAT PRIMARY CONDITION FOR ALLOWING THE BAD DEBT IS THAT IT SHOULD HAVE BECOME BAD AND ONLY THEN IT CAN BE WRITTEN OFF AS IRRECOVERABLE. LD. CIT(A) HAS HELD THAT ONLY WHEN PROCEEDINGS IN BIFR ARE CONCLUDED IN THE CASE OF GRAPCO AND AFTER RECOV ERING WHATEVER IS RECOVERED , THE DUES OF ASSESSEE CAN BE ASCERTAINED. HOWEVER FROM THE ORDER OF HON'BLE SUPREME COURT IN THE CASE OF TRF LTD. VSS CIT 323 ITR 397 PLACED AT PAPER BOOK P AGE 38-40, WE FIND THAT HON'BLE APEX COURT HAS HELD THAT FOR A CLAIM OF BAD DEBT, THE AS SESSEE HAS TO ONLY ESTABLISH THAT DEBT HAS BEEN WRITTEN OFF AND IT WAS NOT NECESSARY TO ESTABL ISH THAT DEBT HAS BECOME IRRECOVERABLE. ADMITTEDLY, THE DEBT HAS BEEN WRITTEN OFF AS NOTED IN THE ASSESSMENT ORDER ITSELF AND THE LOAN WAS GIVEN IN ORDINARY COURSE OF REGULAR BUSINESS AC TIVITIES OF THE ASSESSEE. THEREFORE, AS PER 18 ITA NO. 22/KOL/2020 SPPL PROPERTY MANAGEMENT PVT. LTD., AY 2014-15 THE HON'BLE SUPREME COURT DECISION, THE ACTION OF W RITING OFF OF DEBT WAS SUFFICIENT TO CLAIM THE LOSS. IN THE JUDGEMENTS RELIED UPON BY LD. A.R. , THE HON'BLE SUPREME COURT HAD REMITTED BACK THE CLAIM OF BAD DEBT TO A.O. AS IN THAT CASE, THE FACTS OF WRITING OFF OF DEBT WAS NOT EXAMINED BY A.O. HOWEVER, IN THE PRESENT CASE, THE DEBT HAS ACTUALLY BEEN WRITTEN OFF THEREFORE, RELYING UPON THE RATIO OF JUDGEMENT OF H ON'BLE SUPREME COURT, WE HOLD THAT THE CLAIM OF ASSESSEE IN RESPECT OF BAD DEBT WRITTEN OF F IS ALLOWABLE AND IN VIEW OF THE SAME, WE ALLOW GROUND NO.3 OF APPEAL. IN VIEW OF THE FACTUAL AND LEGAL MATRIX BEING SIMIL AR FOR THE CASE AT HAND, I AM UNABLE TO SUSTAIN THE ACTION OF THE LD. AO IN DISALLOWING THE IMPUGNED SUM OF RS. 2,02,30,94/- DISALLOWED AS BAD DEBTS. THE DISALLOWANCE THEREFO RE STANDS DELETED AND THE GROUND OF APPEAL NO. 8 IS ADJUDICATED IN FAVOUR OF THE APPEL LANT COMPANY. 6.4. WE NOTE THAT THE AMOUNT IN QUESTION I.E. RS.2, 02,30,945/- INCLUDES SUNDRY DEBTOR AS WELL AS LOANS AND ADVANCES. THE LOANS AND ADVANCES ARE NOT ALLOWABLE U/S. 36(V)(III) OF THE ACT. BREAK-UP OF THE AMOUNT IN QUESTION, WHICH HAS BEEN WRITTEN OFF HAS NOT BEEN GIVEN. THEREFORE, THE ALLOWABILITY OF THE LOANS/ADVANCES W RITTEN OFF BY THE ASSESSEE HAVE TO BE EXAMINED BY THE AO. ACCORDING TO THE LD. AR, EVEN IF THE ADVANCES ARE NOT ALLOWABLE U/S. 36(V)(III) OF THE ACT STILL IT IS ALLOWABLE AS BUSI NESS EXPENDITURE U/S. 28 OF THE ACT. BE THAT AS IT MAY, ON THIS ISSUE THE ORDER OF THE LD. CIT(A) I S SET ASIDE AND THIS ISSUE IS REMITTED BACK TO THE FILE OF THE AO FOR EXAMINING WHETHER THE ADVANC ES/LOANS WHICH WERE WRITTEN OFF CAN BE TREATED AS BUSINESS LOSS WHICH HE MAY DECIDE IN ACC ORDANCE TO LAW AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS PART LY ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 16 TH JULY, 2021. SD/- SD/- (P. M. JAGTAP) (A. T. VARKEY) VICE PRESIDENT JUDICIAL MEMBER DATED: 16 TH JULY, 2021 JD.(SR.P.S.) 19 ITA NO. 22/KOL/2020 SPPL PROPERTY MANAGEMENT PVT. LTD., AY 2014-15 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT- DCIT, CIRCLE-3(1), KOLKATA 2. RESPONDENT M/S SPPL PROPERTY MANAGEMENT PVT. LTD. , 11, CROOKED LANE, GROUND FLOOR, KOLKATA-700072 3. THE CIT(A)- 10, KOLKATA 4. CIT- , KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY/DDO ITAT, KOLKATA BENCHES, KOLKATA