Appeal Details
Counselvise Citation
[2019] 116 COUNSELVISE.COM (IT) 0779 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
2 year(s) 4 month(s) 14 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
19-08-2019
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
I
Assessment Year
2011-2012
Appeal Filed On
05-04-2017
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER & SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NO.2399/MUM/2017 ASSESSMENT YEAR : 2011-12 ISPAT ENERGY LTD., THE ENCLAVE, 5 TH FLOOR, NEW PRABHADEVI ROAD, PHABHADEVI, MUMBAI 400 013. PAN AAACI4970M VS. THE ACIT CIRCLE 3(2) , MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI RAKESH JOSHI & GAURAV KABRA RESPONDENT BY : S/SHRI AWANGSHI GINSON & ABHIRAMA KARTIKEYAN DATE OF HEARING : 12. 0 7 .201 9 DATE OF PRONOUNCEMENT : 19 .08.2019 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSE E AGAINST THE IMPUGNED ORDER DATED 28.02.2017, PASSED BY THE CIT(A)- 51, M UMBAI, FOR THE ASSESSMENT YEAR 2012-13. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AS WELL AS LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTI ON OF LEARNED ASSESSING IN CONSIDERING A SUM OF RS 2,96,19,07,058/- BEING WAIVER OF ADVANCE AS BUSINESS INCOME AND ADDING THE SAID SUM TO THE TOTAL INCOME FOR THE YEAR DESPITE RECORDING THE FACT THAT BUSINE SS OF APPELLANT COULD NOT BE SET UP, WITHOUT CONSIDERING THE FACTS AND CI RCUMSTANCES OF THE CASE. ITA NO.2399/MUM/2017 ISPAT ENERGY LTD. 2 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WE LL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F THE LEARNED ASSESSING IN NOT ALLOWING THE CLAIM FOR THE COST IM PROVEMENT AMOUNTING TO RS 5,03,17,635/- CAPITALIZED WITH COST OF LAND, WHILE COMPUTING THE LONG TERM CAPITAL GAINS, WITHOUT CONSIDERING THE FA CTS AND CIRCUMSTANCES OF THE CASE. 3. THE ISSUE IN FIRST GROUND OF APPEAL IS AGAINST C ONFIRMING THE ACTION OF THE ASSESSING OFFICER IN CONSIDERING A SUM OF ` 2,96,19,07,058/- BEING WAIVER OF ADVANCE AS BUSINESS INCOME. THE FACTS IN BRIEF ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSER VED THAT THE ASSESSEE IS A WHOLLY OWNED SUBSIDIARY OF ERSTWHILE JSW ISPAT STEE L LTD., AND IS ENGAGED IN THE SETTING UP A POWER PLANT OF 110 MW CAPACITY. THE A SSESSEE COMPANY WAS ENGAGED IN THE SET UP THE SAID PLANT FOR WHICH JSW ISPAT STEEL LTD. PROVIDED FINANCIAL ASSISTANCE IN THE FORM OF ADVANCE FROM TIME TO TIM E AGGREGATING TO ` 296.19 CRORES TO THE ASSESSEE TO BE ADJUSTED AGAINST THE SUPPLY O F ELECTRICITY TO THE HOLDING COMPANY M/S JSW ISPAT STEEL LTD. . THE ASSESSEE CO ULD NOT SET UP THE POWER PLANT WHEN THE ASSESSEE DECIDED TO DISCARD AND ABANDON TH E SAID PLANT AFTER TECHNICALLY EVALUATING THE PROJECT TO BE NON VIABLE . CONSEQUE NTLY, THE ASSESSEE WROTE OFF THE CAPITAL WORK IN PROGRESS, PRE-OPERATIVE EXPENSES OT HER CAPITAL ADVANCES RECEIVED, LOSS ON FIXED ASSETS DISCARDED, SHARE ISSUE EXPENSE , PROVISION FOR BAD AND DOUBTFUL DEBTS AND ADVANCES, PROVISION FOR POTENTIAL LOSS IN VALUE OF MATERIAL IN TRANSIT INCURRED IN CONNECTION WITH THEREWITH. THE TOTAL A MOUNT WRITTEN OFF BY THE ASSESSEE DURING THE YEAR UNDER ABOVEMENTIONED HEADS WAS ` 436,49,48,731/-. SIMULTANEOUSLY, THE ASSESSEE ALSO WROTE BACK ADVAN CES RECEIVED FROM THE HOLDING COMPANY M/S. JSW ISPAT LTD. AMOUNTING TO ` 296,19,07,058/-. AS A RESULT, THE ITA NO.2399/MUM/2017 ISPAT ENERGY LTD. 3 ASSESSEE DEBITED TO THE PROFIT & LOSS ACCOUNT NET A MOUNT OF ` 140,30,41,673/- AS AN EXCEPTIONAL ITEM, DETAILS OF WHICH IS AS UNDER: SHARE ISSUE EXPENSES WRITTEN OFF ... 1,34,33,21 3/- PROVISION FOR DOUBTFUL DEBTS AND ADVANCES ... 2,4 8,73,036/- PRE-OPERATIVE EXPENDITURE WRITTEN OFF ... 16 9,64,32,847/- PROV FOR POTENTIAL LOSS IN VALUE OF MATERIAL IN TRA NSIT 10,31,71,693/- -LOSS WRITTEN OFF, ON DISCARDING OF CWIP ASSET 247,66,38,189/- -CAPITAL ADVANCES WRITTEN OFF (NET OF CREDITORS) 4,99,74,021/- -LOSS ON FIXED ASSETS DISCARDED ... 4,25,7 32/- 436,49,48,731 LESS: LIABILITIES NO LONGER REQUIRED, WRITTEN BAC K (ADV. RECEIVED FROM JSW ISPAT WAIVED OFF) 296,19,07,058 140,30,41,673 WHILE FILING THE RETURN OF INCOME, IN THE COMPUTATI ON OF TOTAL INCOME, THE ASSESSEE ADDED BACK ONLY THE NET AMOUNT WRITTEN OFF AS STATE D HEREIN ABOVE OF ` 140,30,41,673/- ONLY. ACCORDING TO THE ASSESSING O FFICER, THE AMOUNT WRITTEN OFF IN THE PROFIT & LOSS ACCOUNT WAS CAPITAL IN NATURE AND WAS NOT ALLOWED UNDER ANY PROVISIONS OF THE ACT. HENCE, SHOW CAUSE NOTICE WA S GIVEN VIDE ORDER SHEET NOTING DATED 04.02.2015, AS TO WHY THE ADVANCE WAIVED OFF BY THE HOLDING COMPANY OF ` 296,19,07,058/- SHOULD NOT BE TREATED AS INCOME U/S . 28(IV) OR U/S. 41(1) OF THE ACT. THE ASSESSEE SUBMITTED A REPLY IN DETAIL STAT ING THAT THE MONEY WAS GIVEN FOR SETTING UP OF THE POWER PLANT AND WAS REPAYABLE IN CASH OR IN KIND OR FOR VALUE TO BE RECEIVED BY THEM. AS REGARDS APPLICABILITY OF SECTION 41(1), THE ASSESSEE STATED THAT THE PROJECT WAS NOT COMMISSIONED OR COMMENCED AND THAT THE SAID AMOUNT WAS NOT ALLOWED AS A DEDUCTION IN ANY PREVIOUS. TH E ASSESSING OFFICER ALSO NOTED FROM THE SUBMISSIONS OF THE ASSESSEE THAT THE SAID ADVANCE WAS RECEIVED BY THE ITA NO.2399/MUM/2017 ISPAT ENERGY LTD. 4 ASSESSEE FROM THE HOLDING COMPANY FOR SUPPLY OF ELE CTRICITY POWER AND IS THEREFORE, REVENUE IN NATURE AND REPAYABLE BY WAY OF ADJUSTMEN T OF SUPPLY OF CAPTIVE POWER TO THE HOLDING COMPANY, THUS, THE ASSESSING OFFICER HELD THAT ADVANCE BY JSW ISPAT LTD. WAS NOTHING BUT ADVANCE FROM SUPPLIER TOWARDS SUPPLY OF POWER, WHICH IS TAXABLE AS SALE CONSIDERATION. THE ASSESSING OFFIC ER NOTED THAT THE ADVANCE WAS RECEIVED FOR ACQUIRING CAPITAL ASSET IN THE FORM OF CONSTRUCTION OF POWER PLANT BUT REPAYMENT IS TO BE MADE BY WAY OF SUPPLY OF POWER A ND, THEREFORE, CANNOT BE EQUATED WITH TERM LOAN. ACCORDINGLY, THE ASSESSING OFFICER INVOKED SECTION 28(IV) R.W.S. 2(24)(I) OF THE ACT. FINALLY, THE ASSESSING OFFICER, VIDE ORDER DATED 31.03.2015, ADDED THE SUM TO THE INCOME OF THE ASSE SSEE BY REJECTING THE CONTENTIONS AND SUBMISSIONS OF THE ASSESSEE BY FRA MING ASSESSMENT U/S. 143(3) OF THE ACT IN WHICH THE SAID ADVANCE WAS ADDED AS STAT ED HEREIN ABOVE. 4. IN THE APPELLATE PROCEEDINGS, THE CIT(A) AFFIRME D THE ORDER OF THE ASSESSING OFFICER BY OBSERVING AS UNDER: 7. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE, SUBMISSIONS AND CONTENTIONS OF THE ASSESSEE AS WELL AS THE ORDE R OF THE AO, THERE IS NO DISPUTE IN THE BASIC FACTS WHICH ARE THAT THE AS SESSEE WAS SETTING UP A CAPTIVE POWER PLANT FOR ELECTRICITY GENERATION AT D HOLVI, DIST RAIGAD, FOR WHICH IT HAD INCURRED PROJECT COSTS OF RS 417.31 CR ORES . PARTLY THE COST WAS MET OUT OF THE ADVANCES OF RS 296.19 CRORES REC EIVED FROM THE HOLDING COMPANY NAMELY JSW ISPAT LTD. HOWEVER, THIS PROJECT COULD NOT BE SET UP BECAUSE OF SOME TECHNICAL REASONS AND HAD TO BE SHELVED AND THEREFORE THE ASSESSEE WROTE OFF THE ENTIRE CAPITAL COST OF RS 417.31 CRORES. HOWEVER, OUT OF THE SAME, IT REDUCED THE SU M OF RS 296.19 CRORES BEING THE LOAN RECEIVED FROM PARENT COMPANY AS THE SAME WAS ALSO WRITTEN BACK AND FINALLY ONLY NET AMOUNT OF RS 1,40 ,30,41,673/- WAS SET OFF BY THE ASSESSEE. HOWEVER, IT IS GATHERED THAT T HIS SUM OF RS 1,40,30,41,673/- HAS ALREADY BEEN DISALLOWED AND AD DED BACK BY THE ASSESSEE IN THE COMPUTATION OF INCOME AND THUS, THE ISSUE CENTERED AROUND IS THE TREATMENT OF RS 2,96,19,07,058/-, BEI NG LOAN WRITTEN BACK AND WHETHER THE SAME WAS A CAPITAL RECEIPT OR REVEN UE RECEIPT. WHILE ITA NO.2399/MUM/2017 ISPAT ENERGY LTD. 5 ASSESSEE CLAIMS THAT THIS IS PURELY A CAPITAL RECEI PT, IN NATURE OF LOAN GIVEN BY THE PARENT COMPANY TO THE ASSESSEE SUBSIDI ARY FOR SETTING UP OF A POWER PLANT, THE AO OBSERVED THAT THIS AMOUNT WAS TO BE RE-PAID THROUGH SUPPLY OF POWER BY THE ASSESSEE COMPANY TO THE PARENT COMPANY IN FUTURE, AFTER THE PLANT BECAME OPERATION AL AND THEREFORE THE CHARACTER OF RECEIPT CHANGES AND IT BECOMES A REVEN UE RECEIPT. THE AO, THEREFORE, TREATED THAT THE SAME IS LIABLE TO BE TR EATED AS INCOME IN THE HANDS OF THE ASSESSEE IN ACCORDANCE WITH THE PROVIS IONS OF SEC 28(IV) RWS 2(24)(I) OF THE ACT. 8. BEFORE PROCEEDING FURTHER, I WOULD LIKE TO REPRODUCE THE PROVISIONS OF SEC 28 (IV) AND 2(24(I) AS UNDER: 'SECTION 28(IV) THE VALUE OF ANY BENEFIT OR PERQUISITE, WHETHER CON VERTIBLE INTO MONEY OR NOT, ARISING FROM BUSINESS OR THE EXERCISE OF A PROFESSION.' THEREFORE IN VIEW OF THE PROVISIONS OF SEC 28(IV) O F THE ACT, ANY BENEFIT OR PERQUISITE ARISING FROM THE BUSINESS IS LIABLE TO B E TAXED IN THE HANDS OF THE ASSESSEE AS INCOME. FURTHER, THE WORD 'INCOME' HAS BEEN DEFINED U/S 2(24) OF THE ACT. 9. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE LD AR HAS ARGUED THAT SEC 28(IV) DEALS WITH THE VALUE OF ANY BENEFIT OF THE PERQUISITE ARISING FROM BUSINESS OR EXERCISE OF PRO FESSION. APART FROM THIS THE LD AR ARGUED THAT SECTION 2(24)(I) GIVES AN INC LUSIVE DEFINITION OF THE INCOME AND THAT THE WRITTEN BACK OF THE ADVANCES FR OM THE HOLDING COMPANY FOR SETTING UP OF THE PROJECT IS NEITHER IN COME NOR THE VALUE OF ANY BENEFIT ARISING FROM THE BUSINESS. IT HAS ALSO BEEN ARGUED THAT THE TERM LOAN AVAILED BY THE ASSESSEE COMPANY WERE NOT IN NATURE OF TRADING LIABILITY BUT WERE IN THE NATURE OF CAPITAL LIABILI TY AND THEREFORE WAIVER OF LOAN LIABILITY DOES NOT AMOUNT TO WAIVER OF ANY TRA DING LIABILITY AND THEREFORE THE WAIVER OF CAPITAL LIABILITY WOULD NOT BECOME INCOME ON THE GROUNDS OF REMISSION OR CESSATION THEREOF. THE LD A R IN THIS REGARD RELIED UPON THE JURISDICTIONAL HIGH COURT JUDGEMENT IN CAS E OF MAHINDRA & MAHINDRA V/S CIT [261 ITR 501], WHEREIN THE HON'BLE JURISDICTIONAL HIGH COURT HELD THAT LOAN TAKEN FOR PURCHASE OF PLANT 85 MACHINERY AND WAIVER OF THE PRINCIPAL AMOUNT OF LOAN TAKEN, WAS NEITHER COVERED BY SEC 28(IV) NOR BY SEC 41(1). 10. THE LD AR IN THIS REGARD ALSO RELIED UPON THE H ON'BLE DELHI HIGH COURT JUDGEMENT IN THE CASE OF LOGITRONICS P LTD V/ C CIT 333 ITR 386 (DEL) WHEREIN IT WAS HELD THAT, 'IN THE CONTEXT OF WAIVER OF LOAN AMOUNT, WHAT FOLLOWS FROM THE READING OF THE AFORESAID JUDG EMENT IS THAT THE ANSWER WOULD DEPEND UPON THE PURPOSE FOR WHICH THE SAID LOAN WAS ITA NO.2399/MUM/2017 ISPAT ENERGY LTD. 6 TAKEN. IF THE LOAN WAS TAKEN FOR ACQUIRING THE CAPI TAL RECEIPT, WAIVER THEREOF WOULD NOT AMOUNT TO ANY INCOME LIABLE TO TA X. ON OTHER HAND, IF THIS LOAN WAS FOR TRADING PURPOSE AND WAS TREATED A S SUCH FROM THE VERY BEGINNING IN THE BOOKS OF ACCOUNTS, THE WAIVER THER EOF WOULD RESULT IN THE INCOME, MORE SO, WHEN IT WAS TRANSFERRED TO P & L A CCOUNT.' 11. THE LD AR ALSO SUBMITTED THAT THE EXPENSES INC URRED, ON THE POWER PROJECT WERE SCRAPPED DURING THE YEAR AS THE PLANT WAS SHELVED, THOUGH THE SAME WAS DEBITED TO THE CAPITAL WORK-IN- PROGRESS FROM THE LAST FEW YEARS AND THE WRITE OFF OF THE SAME DURING THE YEAR IN QUESTION WOULD BE REVENUE EXPENDITURE. IT HAS BEEN ARGUED TH AT THE MAIN REASON FOR THE SAME THAT THE PROJECT WAS SCRAPPED FOR THE REASONS BEHIND THE CONTROL OF THE COMPANY AND - AS A RESULT OF WHICH N O NEW ASSET HAS COME INTO BEING. THE ASSESSEE FURTHER MENTIONED THAT IN CASE THE POWER PLANT WOULD HAVE BEEN SET UP AND PLANT COMMENCED PRODUCTI ON, THEN IT WOULD BE THE CASE WHERE THE ASSETS WAS PROVIDING BENEFIT OF ENDURING NATURE AND THEN THE ASSESSEE WOULD .HAVE BEEN LIABLE FOR C LAIM OF DEPRECIATION. IN THIS REGARD, LD AR ALSO RELIED UPON THE JUGEMENT OF HON'BLE HIGH COURT IN THE CASE OF INDO RAMA SYNTHETICS INDIA LTD VS CI T 333 ITR 18. 12. I HAVE CONSIDERED THE ARGUMENTS OF THE ASSESSEE . FROM THE FACTS OF THE CASE IT APPEARS THAT THE ASSESSEE HAD TAKEN LOAN OF RS 296.19 CRORES FROM PARENT HOLDING COMPANY WITH A VIEW TO S ET UP THE CAPTIVE POWER PLANT OF 110 MW CAPACITY AND THE POWER FROM T HE SAME WOULD BE USED BY THE PARENT COMPANY IN STEEL PRODUCTION. IT IS ALSO CLEAR THAT THIS PROJECT WAS SHELVED BECAUSE OF SOME TECHNICAL REASO NS AND BUSINESS OF THE POWER PLANT AS SUCH NEVER COMMENCED AND THEREFO RE ENTIRE THING WAS SCRAPPED. THOUGH, THE LOAN AMOUNT OF RS 296.19 CRORES WAS TO BE ADJUSTED AGAINST THE PURCHASE OF ELECTRICITY FROM A SSESSEE SUBSIDIARY AFTER PLANT BECAME OPERATIONAL. THEREFORE, IN MY CONSIDER ED VIEW THE CHARACTER OF RS 296.19 CRORES CHANGES FROM CAPITAL TO REVENUE RECEIPT, EVEN THOUGH IT WAS INITIALLY TAKEN AS AN ADVANCE, T HEREFORE APPARENTLY IT WAS IN NATURE OF CAPITAL LIABILITY. HOWEVER ONE HAS TO SEE THE REAL INTENT OF THIS ADVANCE. IT WAS NEVER TO BE RETURNED BY THE ASSESSEE TO THE HOLDING COMPANY BUT WAS TO BE ADJUSTED AGAINST FUTU RE REVENUES. SO IN A WAY IT WAS ADVANCE RECEIPT OF FUTURE REVENUES AND N OT A LOAN AS SUCH AND THEREFORE WAS IN NATURE OF REVENUE RECEIPT . THE IS SUE IS THAT ONCE CAPITAL LIABILITY CHANGES THE COLOUR AND BECOMES REVENUE LI ABILITY, WHICH WAS NEVER OFFERED BY THE ASSESSEE TO TAX EARLIER, THEN WRITING BACK OF SUCH AMOUNT IN THE HANDS OF THE ASSESSEE BECOMES AN INCO ME FOR THE ASSESSEE IN THE PRESENT YEAR . AS PER THE PROVISION S OF SECTION 28(IV) OF THE ACT, THE VALUE OF ANY BENEFIT OR PERQUISITE, WH ETHER CONVERTIBLE INTO MONEY OR NOT, ARISING FROM BUSINESS OR EXERCISE OF A PROFESSION IS BOUND TO BE TREATED AS BUSINESS INCOME IN THE HANDS OF TH E ASSESSEE, IN ACCORDANCE WITH THE PROVISIONS OF SEC 2(24) OF THE ACT. ADMITTEDLY, THE ASSESSEE IS NOT GOING TO PAY BACK THIS LIABILITY TO THE LENDER I.E., JSW ISPAT LTD AND IT HAS WRITTEN - BACK THIS AMOUNT IN ITS BOOKS. IT ALSO ITA NO.2399/MUM/2017 ISPAT ENERGY LTD. 7 APPEARS THAT IT HAS ALREADY COMMUNICATED THIS STAND TO THE PARENT COMPANY THAT THIS AMOUNT IS NO MORE PAYABLE AND THE PARENT COMPANY IS RECONCILED TO THIS FACT THAT THIS AMOUNT IS NOT GOI NG TO BE RECOVERED BACK. IN THE SITUATION, THIS ENTIRE AMOUNT OF RS 2,96,19, 07,058/- IS LIABLE TO BE TREATED AS INCOME IN THE HANDS OF THE ASSESSEE. 13. IT IS FURTHER GATHERED THAT SETTING, UP., OF N EW POWER PLANT BY THE ASSESSEE COMPANY WAS A NON-STARTER FROM THE VERY BE GINNING. IT IS GATHERED THAT THE MACHINERY IMPORTED BY THE ASSESSE E FROM FRANCE WAS AN OLD MACHINERY AND NOT NEW ONE AND WAS IN OPERATI ON THERE TILL 01.09.19.97 AND WAS USED FOR MORE THAN 40 YEARS. AS PER THE REPORT OF THE TECHNICAL CONSULTANT APPOINTED IN THIS REGARD N AMELY M/S ANMOL SIKHRI CONSULTANTS P LTD., THE LIFE OF MACHINERY IMPORTED BY THE ASSESSEE WAS ONLY 40-50 YEARS THAT TOO IF IT WAS PROPERLY MAINTA INED AND THEREFORE IT HAD ALREADY RUN ITS USEFUL LIFE . THEREFORE IT IS N OT UNDERSTANDABLE AS TO WHY THE ASSESSEE PROCEEDED TO IMPORT A VERY OLD MAC HINERY WHICH WAS NOTHING MORE THAN A STEEL SCRAP. IN FACT THE CONSUL TANT CONCLUDED IN HIS REPORT THAT IF IT IS SOLD AS SCRAP, IT WILL NOT FET CH MORE THAN 12-15 CRORES IN THE MARKET. IT IS ALSO GATHERED THAT THIS MACHINERY IMPORTED WAS NEVER CLEARED BY THE CUSTOMS AUTHORITIES, BECAUSE OF DUBI OUS NATURE OF TRANSACTION. INFACT THE ASSESSEE HAD GIVEN AN UNDER TAKING TO THE CUSTOMS AUTHORITIES VIDE LETTER DATED 13.12.2011 THAT THE M ACHINERY, ETC WILL BE KEPT IN SAFE CUSTODY AND IN GOOD CONDITION FOR WHIC H NO CHARGES WILL BE CLAIMED FROM THE DEPARTMENT. THEREFORE THERE ARE LO T OF CONFLICTING ISSUES REGARDING THE IMPORT OF MACHINERY ITSELF, LET ALONE THE SETTING UP OF PLANT ITSELF. SINCE THE MACHINERY IMPORTED WAS NOT RELEAS ED BY THE CUSTOMS AUTHORITIES THE ASSESSEE IN NO WAY COULD HAVE SET U P A POWER PLANT AND IT IS NOT UNDERSTANDABLE AS TO WHY THE ASSESSEE DID NO T SEND BACK THE MACHINERY TO THE SELLER AND RECOVERED THE MONEY IN SUCH PROCESS. 14. LOOKING TO THE FACTS OF THE CASE, THE ENTIRE E XERCISE APPEARS TO BE A MECHANISM TO AVOID INCIDENCE OF TAX AND THEREF ORE APPEARS TO BE A COLOURABLE DEVICE AS HELD BY THE HON'BLE SUPREME CO URT IN THE CASE OF ME DOWELL & ME DOWELL CO LTD AS REPORTED IN 154 ITR 14 8. THUS, THE ENTIRE EXPENSES OF RS 296-09 CRORES IN ITSELF APPEARS TO B E SUSPECT. MOREOVER, SUCH EXPENDITURE IS CERTAINLY NOT CAPITAL IN NATURE AND THE ASSESSEE COULD NOT HAVE ADJUSTED THE AMOUNT OF RS 296-19 CRORES AG AINST THE SAME. 15. IN THE CASE OF MAYAJAL ENTERTAINMENT LTD (ITA NO 1216/MDS/2011), THE HONBLE ITAT, CHENNAI UPHELD TH E DECISION OF THE AO IN REJECTING THE CLAIM OF THE ASSESSEE TOWARDS W RITING OFF OF CAPITAL WORK-IN-PROGRESS AND FIXED ASSETS AGGREGATING TO RS 236.18 CRORES. SIMILARLY, IN THE CASE OF MOHAN MEAKIN BREWERIES LT D V/S CIT (1997) 227 ITR 878 (HP), THE HON'BLE HIMACHAL PRADESH HIGH COU RT UPHELD THE DECISION OF THE ITAT IN REJECTING THE CLAIM OF THE ASSESSEE TOWARDS DISCARDING THE MILK PLANT AND CLAIMING THE SAME AS REVENUE EXPENDITURE ITA NO.2399/MUM/2017 ISPAT ENERGY LTD. 8 U/S 28. FOR CLARITY, THE RELEVANT PORTION OF THE CO URT ORDER IS REPRODUCED AS UNDER: ' 9. A BENCH OF THIS COURT HAS DEALT WITH THE QUEST ION WHETHER THE FEE PAID TO THE REGISTRAR OF COMPANIES FOR RAIS ING THE LIMIT OF THE AUTHORISED CAPITAL OF THE COMPANY FROM ONE CROR E TO FIVE CRORES IS CAPITAL EXPENDITURE OR NOT. IN MOHAN MEAK IN BREWERIES LTD. V. CIT (NO. 2) [1979J 117 ITR 505; [1979} HP 1 21, THE BENCH HELD THAT IT WAS CAPITAL EXPENDITURE AND CANN OT BE DEDUCTED FROM THE TOTAL INCOME. THAT DECISION MAY N OT BY ITSELF BE APPLICABLE TO THE FACTS OF THE PRESENT CASE, BUT AS STATED EARLIER WE HAVE TO SEE THE NATURE OF THE LICENCE FE E PAID BY THE ASSESSEE TO THE GOVERNMENT OF HIMACHAL PRADESH. ADM ITTEDLY, THE FEE WAS PAID UNDER THE PROVISIONS OF THE PUNJAB EXCISE ACT AND THE PUNJAB DISTILLERY RULES, WHICH ARE APPLICAB LE TO THE STATE OF HIMACHAL PRADESH, SECTION 21 OF THE PUNJAB EXCIS E ACT PROVIDES FOR ESTABLISHMENT OR LICENSING OF DISTILLE RIES AND BREWERIES. THE RELEVANT PART OF THE SECTION READS: ' THE FINANCIAL COMMISSIONER, SUBJECT TO SUCH RESTR ICTIONS OR CONDITION AS THE STATE GOVERNMENT MAY IMPOSE, MAY . . . (C) LICENSE THE CONSTRUCTION AND WORKING OF DISTILL ERY OR BREWERY.' 10. THE SECTION CONTEMPLATES IMPOSITION OF A. LICEN CE FEE FOR CONSTRUCTION AND WORKING OF A DISTILLERY OR BREWERY . THE RELEVANT RULE IN THE PUNJAB DISTILLERY RULES IS RULE 4 WHICH PROVIDES THAT NO LICENCE SHALL BE GRANTED UNLESS AND UNTIL THE APPLI CANT THEREFOR HAS DEPOSITED A SUM OF RS. 50,000 IN CASH AS LICENCE FE E. UNDER RULE 3, EVERY APPLICATION FOR A LICENCE FOR A DISTILLERY SHALL BE IN WRITING IN FORM NO. D-L. FORM NO. D-L READS TO THE EFFECT N ECESSARY IN THIS CASE AS FOLLOWS : ' THE UNDERSIGNED ...... ..... .BEGS TO APPLY F OR A LICENCE TO (CONSTRUCT AND) WORK AND POSSESS A DISTILLERY UNDER SECTION 21 OF THE PUNJAB EXCISE ACT, 1 OF 1914.' 11. THIS FORM IS ENTIRELY IN CONSONANCE WITH THE PR OVISIONS OF SECTION 21 OF THE ACT. HOWEVER, FORM NO. D-2, READS THAT: 'LICENCE IS HEREBY GRANTED TO ......... UNDER SECTI ON 21 OF THE PUNJAB EXCISE ACT, 1 OF 1914, TO MANUFACTURE : (A) COUNTRY SPIRIT; . , , (C) FOREIGN LIQUOR; . . . IN THE PREMISES HEREIN SPECIFIED.' ITA NO.2399/MUM/2017 ISPAT ENERGY LTD. 9 12. THOUGH SECTION 21 SPEAKS ONLY OF LICENCE FOR CO NSTRUCTION AND WORKING OF DISTILLERY OR BREWERY, FORM NO. D-2 REFE RS TO MANUFACTURE OF THE KINDS OF LIQUOR MENTIONED THEREIN. IN THE CO NTEXT FORM NO. D- 2 CAN BE UNDERSTOOD ONLY IN THE LIGHT OF THE LANGUA GE USED IN SECTION 21 READ WITH RULES 3 AND 4 ALONG WITH FORM NO. D-L. HENCE, THERE CAN BE NO DOUBT WHATEVER THAT THE LICENCE FEE PAID BY THE ASSESSEE IN THIS CASE IS FOR THE PURPOSE OF CONSTRU CTION AND WORKING OF DISTILLERY. CONSEQUENTLY, IT IS ONLY CAPITAL EXP ENDITURE BUT FOR WHICH THE ASSESSEE COULD NOT HAVE ESTABLISHED THE D ISTILLERY. HE CANNOT CLAIM THIS TO BE REVENUE EXPENDITURE AS ONE HAVING BEEN SPENT FOR THE BUSINESS. IT FOLLOWS THAT THE VIEW EX PRESSED BY THE TRIBUNAL IS CORRECT. QUESTION NO. 4 IS, THEREFORE, ANSWERED IN THE AFFIRMATIVE BY UPHOLDING THE VIEW TAKEN BY THE TRIB UNAL IN THAT THE SUM OF RS. 50,000 PAID TO THE HIMACHAL PRADESH GOVE RNMENT FOR OBTAINING A LICENCE FOR ESTABLISHING A DISTILLERY A T SOLAN FOR THE PRODUCTION OF INDIAN MADE FOREIGN LIQUOR CANNOT BE ALLOWED AS A DEDUCTION IN COMPUTING THE TOTAL INCOME OF THE ASSE SSEE-COMPANY. 13. THE REFERENCE IS ANSWERED ACCORDINGLY.' THE RATIO OF ABOVE JUDGMENTS IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE . 16. IN VIEW OF THE ABOVE FACTS, THE CLAIM OF THE AS SESSEE TOWARDS RS 296.19 CRORES BEING THE CAPITAL RECEIPT AND ADJUSTM ENT OF THE SAME AGAINST THE PROJECT COST BEFORE SCRAPPING IS HEREBY REJECTED. THEREFORE, THE AO'S DECISION IN TREATING THE SAME AS REVENUE R ECEIPT IS UPHELD. CONSEQUENTLY THE ADDITION OF RS 2,96,19,07,058/- MA DE BY THE AO IS UPHELD. THIS GROUND OF APPEAL TAKEN BY THE ASSESSEE IS DISMISSED. 5. THE LEARNED AR VEHEMENTLY SUBMITTED BEFORE THE B ENCH THAT THE ADVANCE RECEIVED FROM HOLDING COMPANY JSW ISPAT LTD., WAS A CAPITAL ADVANCE RECEIVED FOR THE PURPOSE OF SETTING UP THE CAPITAL POWER PLANT A ND REPAYMENT WAS TO BE MADE BY WAY OF SUPPLY OF ELECTRICITY POWER TO THE HOLDING C OMPANY. THE LEARNED AR SUBMITTED THAT SINCE THE ADVANCE RECEIVED WAS TOWAR DS SETTING UP POWER PLANT, OBVIOUSLY IS IN THE NATURE OF CAPITAL ADVANCE AND C ANNOT BE TREATED AS REVENUE ADVANCE. THEREFORE, THE ORDER OF THE CIT(A) CONFIR MING THE ACTION OF THE ASSESSING OFFICER IS ERRONEOUS AND DESERVES TO BE SET ASIDE. THE LEARNED AR IN DEFENCE OF HIS ARGUMENTS RELIED ON COUPLE OF DECISIONS VIZ., CIT V S. MAHINDRA AND MAHINDRA [2018] ITA NO.2399/MUM/2017 ISPAT ENERGY LTD. 10 93 TAXMANN.COM 32 (SC) AND SOLID CONTAINERS LTD. VS . DCIT [2009] 178 TAXMAN 192 (BOM). THE LEARNED AR SUBMITTED THAT THE CASE OF THE ASSESSEE WAS CLEARLY COVERED BY THE AFORESTATED DECISIONS OF HONBLE SUP REME COURT AND THAT OF HONBLE BOMBAY HIGH COURT. THE LEARNED AR WHILE RELYING TH E DECISION OF CIT VS. MAHINDRA AND MAHINDRA (SUPRA), SUBMITTED THAT PROVISIONS OF SECTION 28(IV) R.W.S. 41(1) OF THE ACT CANNOT BE APPLIED TO THE ASSESSEE AS THE NECESS ARY PRE-CONDITION FOR INVOKING THESE SECTIONS WERE NOT FULFILLED. IN THE SAID DEC ISION THE LEARNED AR SUBMITTED THAT THE HONBLE SUPREME COURT HELD THAT SECTION 28(IV) WOULD NOT APPLY TO RECEIPTS WHICH ARE IN THE NATURE OF CASH OR MONEY. SIMILARL Y, THE PROVISION OF SECTION 41(1) ALSO DOES NOT APPLY SINCE THE WAIVER OF LOAN DOES N OT MEAN CESSATION OF LIABILITY. FINALLY, THE AR PRAYED THAT THE ORDER OF THE CIT(A) BE REVERSED AND ADVANCE OF ` 296,19,07,058/- BE ALLOWED TO BE ADJUSTED AS CAPITA L EXPENDITURE AS CLAIMED. 6. THE LEARNED DR, ON THE OTHER HAND, RELIED HEAVIL Y ON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT ADVANCE WAS PU RELY IN THE NATURE OF REVENUE ADVANCE TO BE ADJUSTED BY WAY OF SUPPLY OF ELECTRIC ITY TO BE GENERATED BY POWER PLANT TO BE SET UP BY THE ASSESSEE. THE LEARNED DR SUBMITTED THAT THOUGH THE SAID ADVANCE WAS RECEIVED FOR THE PURPOSE OF SETTING UP CAPTIVE POWER PLANT THAT COULD NOT CHANGE THE NATURE OF THE ADVANCE RECEIVED BY TH E ASSESSEE. HE FURTHER CONTENDED THAT THE ADVANCE RECEIVED WAS IN THE NATU RE OF ADVANCE TOWARDS SUPPLY OF POWER TO THE HOLDING COMPANY AFTER THE COMMENCEM ENT OF THE PLANT AND, THEREFORE, NECESSARILY WAS A REVENUE CONSIDERATION FOR SUPPLY OF ELECTRICITY. THE LEARNED DR WHILE RELYING ON THE ORDERS OF THE AUTHO RITIES BELOW, SUBMITTED THAT THE ORDER PASSED BY THE CIT(A) UPHOLDING THE ORDER OF T HE ASSESSING OFFICER IS WELL- ITA NO.2399/MUM/2017 ISPAT ENERGY LTD. 11 REASONED AND NEEDS TO BE UPHELD. WHILE CONTROVERT ING THE FACTS OF THE DECISIONS RELIED UPON BY THE ASSESSEE IN THE CASE OF CIT VS. MAHENDRA AND MAHENDRA (SUPRA) AND SOLID CONTAINERS VS. DCIT (SUPRA), HE SUBMITTED THAT IN THESE CASES THE ADVANCES WERE OF CAPITAL NATURE AND HONBLE APEX CO URT AND HONBLE BOMBAY HIGH COURT HAVE HELD THAT PROVISION OF SECTION 28(IV) AN D SECTION 41(1) WERE NOT APPLICABLE, WHEREAS, IN THE PRESENT CASE ADVANCE IS PURELY IN THE NATURE OF TRADING RECEIPT. CONSEQUENTLY, THE RATIO OF THE AFORESAID DECISIONS IS NOT APPLICABLE IN THE PRESENT CASE. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. THE FACTS ARE NOT IN DISPUTE THAT THE ASSESSEE WAS IN T HE PROCESS OF SETTING UP CAPTIVE POWER PLANT FOR WHICH IT HAD RECEIVED ADVANCE OF ` ` 296,19,07,058/- FROM JSW ISPAT LTD. THE ASSESSEE INCURRED CAPITAL COST TO T HE TUNE OF ` 436.49 CRORES IN CONNECTION THE SAID PROJECT. THE CONSTRUCTION AND INSTALLATION OF THE PROJECT WAS ABANDONED BY THE ASSESSEE AFTER GETTING IT TECHNICA LLY EVALUATED AND FINDING IT TO BE NON VIABLE AND FINALLY THE EXPENSES WERE WRITTEN OF F. WHILE WRITING OFF THE CAPITAL EXPENDITURE IN PROGRESS, THE ASSESSEE REDUCED THE M ONEY RECEIVED FROM HOLDING COMPANY TO THE TUNE OF RS 2,96,19,07,058/- FROM CAP ITAL WORK IN PROGRESS. ACCORDING TO THE ASSESSING OFFICER THE SAID ADVANCE WAS IN THE NATURE OF REVENUE AS IT WAS SALES CONSIDERATION FOR THE ELECTRICITY TO B E SUPPLIED IN THE FUTURE AND, THUS, THE ADJUSTMENT OF THE ADVANCE WAS TO BE MADE BY WAY OF SUPPLY OF ELECTRICITY. THE LEARNED CIT(A) UPHELD THE SAME BY HOLDING THAT THE ADVANCE RECEIVED BY THE ASSESSEE WAS REVENUE RECEIPT. AFTER CAREFULLY ANAL YSING THE CASE ON RECORD AND ALSO THE DECISION OF THE LEARNED CIT(A), WE HOLD THAT TH E ADVANCE RECEIVED BY THE ITA NO.2399/MUM/2017 ISPAT ENERGY LTD. 12 ASSESSEE IS REVENUE ADVANCE AS IS CLEAR FROM THE FA CT THAT THE SAME IS TO BE DISCHARGED/REPAID/ADJUSTED BY WAY OF SUPPLY OF ENER GY TO THE HOLDING COMPANY. WE HAVE ALSO PERUSED THE DECISIONS RELIED UPON BY T HE AR IN DEFENCE OF HIS ARGUMENTS IN THE CASE OF CIT VS. MAHENDRA AND MAHEN DRA (SUPRA) AND SOLID CONTAINERS VS. DCIT (SUPRA). HOWEVER, THE FACTS UN DERLYING THE SAID DECISIONS ARE DIFFERENT AND THE RATIO LAID DOWN CANNOT BE APPLIED TO THE PRESENT CASE. IN THE SAID DECISIONS, THE ADVANCE RAISED BY THE ASSESSEE WERE OF CAPITAL IN NATURE AND, THEREFORE, THEY ARE NOT APPLICABLE TO THE PRESENT C ASE. ACCORDINGLY, WE UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE AND THE GROUND RA ISED BY THE ASSESSEE IS DISMISSED. 8. THE ISSUE RAISED IN THE GROUND OF APPEAL NO.2 IS AGAINST THE LEARNED CIT(A) CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN N OT ALLOWING THE CLAIM FOR COST OF IMPROVEMENT OF ` 5,03,17,635/- CAPITALIZED WITH COST OF LAND, WHILE COMPUTING THE LONG TERM CAPITAL GAINS. THE FACTS IN BRIEF ARE TH AT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSER VED THAT THE ASSESSEE HAS SOLD LAND FOR CONSIDERATION OF ` 13,45,00,000/- AND SHOWN CAPITAL LOSS OF ` 2,63,34,554/-. THE AO ALSO NOTICED THAT AS PER THE AIR INFORMATION THE SALE VALUE OF THE SAID PROPERTY WAS ` 13,54,70,000/- WHEREAS THE SALES CONSIDERATION SHO WN BY THE ASSESSEE WAS 13,45,00,000/-. ACCORDINGLY, THE ASSE SSEE WAS ASKED TO FURNISH DETAILS OF COMPUTATION OF LOG TERM CAPITAL LOSS. T HE ASSESSEE FURNISHED THE DETAILS BEFORE THE AO. THE AO OBSERVED FROM THE DETAILS FI LED BY THE ASSESSEE THAT IT HAS CLAIMED VARIOUS EXPENSES IN NATURE OF IMPROVEMENT C OST OF THE ASSET TO THE TUNE OF ` 5,03,17,635/- IN ADDITION TO THE PURCHASE COST OF ` 6,24,84,680/-. ACCORDINGLY, ITA NO.2399/MUM/2017 ISPAT ENERGY LTD. 13 THE AO CALLED FOR THE DETAILS OF DEVELOPMENT EXPENS ES, WHICH WERE NOT PRODUCED BY THE ASSESSEE CITING THE REASONS THAT ALL THE DETAIL S/RECORDS WERE DAMAGED IN THE COLLAPSE OF VICTORIA BUILDING. FINALLY, THE AO REJ ECTED THE ARGUMENTS OF THE ASSESSEE AND RECOMPUTED THE CAPITAL GAINS BY REJECTING THE C OST OF ` 5,03,17,635/-. IN THE APPELLATE PROCEEDINGS, THE CIT(A) DISMISSED THE APP EAL OF THE ASSESSEE BY OBSERVING AS UNDER: 18. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE, SUBMISSIONS AND CONTENTIONS OF THE ASSESSES AS WELL AS ORDER OF THE AO. AS MENTIONED ABOVE, DURING THE YEAR UNDER CONSIDERATION, THE ASS ESSEE SOLD, THE FACTORY LAND FOR A SUM OF RS 13,54,70,000/-. THIS L AND WAS ACQUIRED FOR A SUM OF RS 6,24,84,680/- IN THE YEAR 2007-08. WHILE COMPUTING THE CAPITAL GAINS ON SALE OF LAND, THE ASSESSEE HAS FARTHER CON SIDERED AN AMOUNT OF RS 5,03,17,635/- TOWARDS SITE DEVELOPMENT EXPENDITU RE. HOWEVER, IT IS GATHERED THAT NO DETAILS OF SUCH EXPENSES WERE FURN ISHED BEFORE THE AO, DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THEREF ORE HE REJECTED THE CLAIM OF THE ASSESSEE TOWARDS SITE DEVELOPMENT EXPE NSES AND COMPUTED THE LONG TERM CAPITAL GAINS ON SALE OF PROPERTY BY CONSIDERING ONLY THE PURCHASE COST OF LAND AT RS 6,24,84,680/- AND COMPU TED THE CAPITAL GAINS AT RS 4,64,49,176/-. DURING THE COURSE OF APPELLATE PROCEEDINGS, THOUGH THE ASSESSEE DISPUTED THE DECISION OF THE AO IN NOT ALLOWING THE CLAIM TOWARDS SITE DEVELOPMENT OR IMPROVEMENT COST AMOUNT ING TO RS 5,03,17,635/- BUT IT DID NOT FILE ANY DETAILS OR SU PPORTING EVIDENCE AS TO WHERE THE SITE DEVELOPMENT COST WAS INCURRED NOR AN Y SUPPORTING BILLS AND VOUCHERS IN THIS REGARD WERE PRODUCED NOR THE N ATURE OF WORKS WAS EXPLAINED. IF THE ASSESSEE HAD INCURRED ANY COST TO WARDS SITE DEVELOPMENT, THEY NEED TO EXPLAIN AS TO WHAT WORK A ND FOR WHAT PURPOSES THIS COST WAS INCURRED, TO WHOM THE PAYMEN TS WERE MADE, CHEQUE NUMBER, ETC, WHETHER ANY CONTRACT WAS GIVEN FOR SUCH WORKS AND WHETHER SUCH AMOUNT WAS SUBJECTED TO TDS, ETC. THE ASSESSEE ALSO NEEDED TO PRODUCE SUPPORTING BILLS AND VOUCHERS IN THIS REGARD. HOWEVER, NONE OF SUCH DETAILS HAVE BEEN FURNISHED BY THE 'AS SESSEE IN SUPPORT OF HIS CLAIM TOWARDS SITE DEVELOPMENT EXPENDITURE OF R S 5,03,17,635/-. THE ASSESSEE HAS ONLY ARGUED THAT THE AO COULD NOT HAVE CALLED FOR THESE DETAILS FOR A PERIOD OF THREE YEARS. HOWEVER, THE A SSESSEE IS GROSSLY MISTAKEN IN SAYING SO, AS THIS AMOUNT OF RS 5,03,17 ,635/- IS BEING CLAIMED BY HIM DURING THE YEAR AGAINST SALE CONSIDE RATION OF AN PROPERTY, CAPITAL GAINS FROM WHICH ARE LIABLE TO BE TAXED DUR ING THE YEAR. IF THE ASSESSEE WANTS TO HAVE PARTICULAR BENEFIT, THE ONUS LIES UPON IT TO PROVE TO THE SATISFACTION OF THE AO, THAT SUCH COSTS OR E XPENDITURE WERE ACTUALLY INCURRED AND WERE INCURRED IN A PARTICULAR YEAR / P ERIOD AND THE SAME ITA NO.2399/MUM/2017 ISPAT ENERGY LTD. 14 WERE RELATING TO THE IMPROVEMENT OF THE PROPERTY UN DER CONSIDERATION. IN ABSENCE OF ANY SUCH DETAILS, THE ASSESSEE COULD NOT CLAIM THE BENEFIT OF COST OF IMPROVEMENT OF RS 5,03,17,635/-. THEREFORE, THE CONTENTION OF THE ASSESSEE IN THIS REGARD IS REJECTED. CONSEQUENT LY, THE COMPUTATION OF THE LONG TERM CAPITAL GAIN BY THE AO AT RS 4,64,49, 176/- IS UPHELD AND GROUND TAKEN BY THE ASSESSEE IN THIS REGARD IS REJE CTED. 9. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT THE ISSUE OF DEVELOPMENTAL EXPENSES OF LAND COULD NOT BE EXAMINED BY THE AO AS THE ASSESSEE COULD NOT PRODUCE THE DOCUME NTS BEING DAMAGED AND MUTILATED IN THE BUILDING COLLAPSE. NOW THE LEARNE D AR SUBMITTED BEFORE THE BENCH THAT THE ASSESSEE HAS GENUINELY INCURRED THESE EXPE NSES AND THE SAME AS TO BE TREATED AS PART OF COST OF PROPERTY WHILE COMPUTING THE COST OF LAND. IT IS FURTHER SUBMITTED THAT THE ASSESSEE HAS RECONSTRUCTED THE R ECORD, WHICH COULD BE PRODUCED BEFORE THE AO. THE LEARNED DR, ON THE OTHER HAND, STRONGLY OPPOSED THE ARGUMENTS OF THE LEARNED AR BY SUBMITTED THAT THE A SSESSEE HAS FAILED TO PRODUCE THE RECORD BEFORE THE AUTHORITIES BELOW AND NO SECO ND ROUND SHOULD BE ALLOWED TO THE ASSESSEE TO PROVE ITS CASE. 10. AFTER ANALYSING THE FACTS ON RECORD, WE OBSERVE THAT IT WOULD BE IN THE INTEREST OF JUSTICE, IF THE ASSESSEE IS GIVEN ONE M ORE OPPORTUNITY TO EXPLAIN ITS CASE BEFORE THE AO BY FILING THE NECESSARY EVIDENCE S OF EXPENDITURE INCURRED ON DEVELOPMENT OF THE LAND. WE, ACCORDINGLY, SET A SIDE THE ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO DECIDE THE ISSUE DENOVO AFTER TAKING INTO CONSIDERATION THE DETAILS FILED BY THE ASSESSEE. ITA NO.2399/MUM/2017 ISPAT ENERGY LTD. 15 11. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 1 9 TH AUGUST, 2019. SD/- SD/- (AMARJIT SINGH) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 19 TH AUGUST, 2019. SA COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE C I T(A), MUMBAI. 4. THE C I T 5. THE DR, C BENCH, ITAT, MUMBAI BY ORDER, //TRUE COPY// (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI
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