Thiru Arooran Sugars Ltd., CHENNAI V. DCIT, CHENNAI

ITA 248/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9207 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 16-03-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 29-01-2015
• Court: TRIBUNAL
• Department Lawyers: SUNDAR RAO
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Capital asset; Business expenditure; Commercial expediency; Revenue expenditure; Capital expenditure
• Section: 37(1)

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO. 248 /MDS/2015 / ASSESSMENT YEAR :200 2 - 0 3 M/S. THIRU AROORAN SUGARS LTD., ELDORADO, V FLOOR, 112, MAHATMA GANDHI ROAD, CHENNAI 600 034. [PAN: A AAC T 2382B ] VS. THE DEPUTY COMMISSIONER OF INCOME TAX , C O MPANY CIRCLE III (2) , CHENNAI 600 034 . ( / APPELLANT ) ( / RESPONDENT ) ./ I.T.A.NO. 461/MDS/2015 / ASSESSMENT YEAR :2002 - 03 THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 3(1), NEW BLOCK, 4 TH FLOOR, 121, MAHATMA GANDHI ROAD, NUNGAMBAKKAM, CHENNAI 600 034. VS. M/S. THIRU AROORAN SUGARS LTD., ELDORADO, V FLOOR, 112, MAHATMA GANDHI ROAD, CHENNAI 600 034. ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI R. VIJAYARAGHAVAN, ADVOCATE / RESPONDENT BY : SHRI SUNDAR RAO, CIT / DATE OF HEARING : 16 . 03 .201 6 / DATE OF P RONOUNCEMENT : 15 .06 .201 6 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : BOTH THE CROSS APPEAL S FILED BY THE ASSESSEE AS WELL AS REVENUE ARE DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) I.T.A. NO S . 248 & 461 /M/15 2 III, CHENNAI , DATED 3 1 . 1 0 .20 1 4 RELEVANT TO THE ASSESSMENT YEAR 200 2 - 0 3 . THE FIRST EFFECTIVE GROUND RAISED IN THE APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF EXPENDITURE OF .33,190/ - AND ADDED BACK TO THE INCOME OF THE ASSESSEE. 2. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS SOUGHT PERMISSION TO WITHDRAW THE ABOVE GROUND AS NOT PRESSED BY MAKING ENDORSEMENT IN THE GROUNDS OF APPEAL OF THE ASSESSEE. ACCO RDINGLY, THE GROUND RAISED BY THE ASSESSEE IS DISMISSED AS NOT PRESSED . 3. THE NEXT EFFECTIVE GROUND RAISED IN THE APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF THE SHARE ISSUE EXPENDITURE AMOUNTING TO .4,65,64 9/ - . 3.1 THE ASSESSEE HAS CLAIMED A SUM OF .4,65,649/ - AS REDUCTION UNDER SECTION 35D OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT] TOWARDS EXPENSES RELATING TO RIGHTS ISSUE OF SHARES. THE ASSESSEE HAS FURTHER STATED BEFORE THE ASSESSING OFFICER THAT T HE PROCEEDS WERE UTILIZED FOR THE PURPOSES OF BUSINESS FOR EXPANDING CAPACITY OF CRUSHING AND FOR POWER GENERATION. IT WAS ALSO POINTED OUT THAT THE SIMILAR EXPENDITURE RELATING TO 1990 - 91 AND CLAIMED TILL 2001 HAD BEEN ALLOWED BY THE LD. CIT(A). HOWEVER, THE ASSESSING OFFICER HAS NOT ACCEPTED THE SUBMISSIONS OF THE ASSESSEE AND SINCE THE ASSESSEE HAS NOT ESTABLISHED THAT THE SAID EXPENDITURE WAS INCURRED FOR EXPANSION OF I.T.A. NO S . 248 & 461 /M/15 3 INDUSTRIAL UNDERTAKING THE SAME WAS DISALLOWED AND ADDED BACK TO THE INCOME OF THE ASS ESSEE. 3.2 ON APPEAL, THE LD. CIT(A) CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 3.3 BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS STRONGLY CONTENDED THAT THE ASSESSEE HAS INCURRED SHARE ISSUE EXPENSES OF .46,56,491/ - IN THE ASSESSMENT YE AR 1997 - 98 IN CONNECTION WITH RIGHT ISSUE OF 21,50,405 EQUITY SHARES AT THE RATE OF .90/ - PER SHARE. AS THE SHARE ISSUE EXPENSES ARE NOT ALLOWABLE AS REVENUE EXPENSES, THE ASSESSEE HAS NOT CLAIMED THE SAME AS DEDUCTION IN ITS COMPUTATION OF INCOME. IN THE BOOKS OF THE ASSESSEE, THE SAME WAS TREATED AS DEFERRED REVENUE EXPENSES. AS PER SECTION 35D OF THE ACT, THE ASSESSEE HAS BEEN CLAIMING DEDUCTION OF AN AMOUNT EQUAL TO ONE - TENTH OF THE AFORESAID EXPENDITURE OF .46,56,491/ - FOR EACH OF THE ASSESSMENT YEAR BEGINNING WITH THE ASSESSMENT YEAR 1997 - 98 AND THE LD. CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE FOR EARLIER ASSESSMENT YEARS. THEREFORE, THE ASSESSEE HAS PRAYED THAT THE SHARE ISSUE EXPENDITURE AMOUNTING TO .4,65,649/ - SHOULD BE ALLOWED. 3.4 ON THE OTHER HAND, THE LD. DR STRONGLY SUPPORTED THE ORDER PASSED BY THE AUTHORITIES BELOW. 3.5 WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. BEFORE US, THE LD. COUNSEL FOR THE I.T.A. NO S . 248 & 461 /M/15 4 ASSESSEE STRONGLY CONT ENDED THAT THE ASSESSEE HAS BEEN CLAIMING DEDUCTION OF AN AMOUNT EQUAL TO ONE - TENTH OF THE AFORESAID EXPENDITURE OF .46,56,491/ - FOR EACH OF THE ASSESSMENT YEAR BEGINNING WITH THE ASSESSMENT YEAR 1997 - 98 AND THE LD. CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE FOR EARLIER ASSESSMENT YEARS. O N SIMILAR FACTS AND CIRCUMSTANCES, THE LD. COUNSEL FOR THE ASSESSEE HAS FILED COPY OF THE ORDER OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEARS 1999 - 00, 2000 - 01 AND 2005 - 06 IN I.T.A. NOS. 1346 TO 1348/MDS/2015 VIDE ORDER DATED 18.12.2015 AND PRAYED THAT THE SHARE ISSUE EXPENSES SHOULD BE ALLOWED. WE FIND THAT THE SHA RE ISSUE EXPENSES CLAIMED BY THE ASSESSEE IN EARLIER ASSESSMENT YEARS HAVE BEEN CONSIDERED BY THE TRIBUNAL VIDE ITS ORDER DATED 18.12.2015, WHEREIN, THE TRIBUNAL DIRECTED THE ASSESSING OFFICER TO ALLOW THE SHARE ISSUE EXPENDITURE FOR THE EARLIER ASSESSMENT YEARS. THUS, WE FIND FORCE IN THE ARGUMENT ADVANCED BY THE LD. COUNSEL FOR THE ASSESSEE. WE HAVE PERUSED THE ORDER OF THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR EARLIER ASSESSMENT YEARS VIDE ORDER DATED 18.12.2015, WHEREIN, THE TRIBUN AL HAS OBSERVED THAT THE ASSESSEE COMPANY HAS INCURRED EXPENDITURE ON RIGHTS ISSUE FOR THE EXPANSION OF BUSINESS OPERATIONS AND SUCH EXPENDITURE COMPLY THE TEST OF BUSINESS EXPEDIENCY AND INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. BY RELY ING ON THE DECISION IN THE CASE OF CIT V. ASHOK LEYLAND LTD. 349 ITR 663 (MAD), THE TRIBUNAL HAS OBSERVED THAT THE SHARE ISSUE EXPENDITURE INCURRED BY THE ASSESSEE FALLS WITHIN THE CLAUSE OF SECTION I.T.A. NO S . 248 & 461 /M/15 5 35D OF THE ACT. ACCORDINGLY, THE TRIBUNAL DIRECTED THE AS SESSING OFFICER TO DELETE THE ADDITIONS MADE IN THE ASSESSMENT AND ALLOW THE SHARE ISSUE EXPENDITURE FOR ASSESSMENT YEARS 1999 - 2000, 2000 - 01 AND 2005 - 06. RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR EARLIER ASSESSMENT YEARS, WE ALSO DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION MADE TOWARDS SHARE ISSUE EXPENDITURE AS CLAIMED BY THE ASSESSEE. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND ALLOW THE GROUND RAISED BY THE A SSESSEE AND THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. I.T.A. NO. 461/MDS/2015 4. COMING TO THE APPEAL FILED BY THE REVENUE, THE FIRST GROUND RAISED IN THE APPEAL IS THAT THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE EXPENDITURE OF .6,28,44,388/ - INCURRED FOR SHIFTING OF PLANT AND MACHINERY FROM KOLLUMANGUDI TO A. CHITTUR IS ALLOWABLE AS REVENUE EXPENDITURE. 4.1 THE ASSESSEE COMPANY HAS CLAIMED A SUM OF .6,28,44,388/ - AS REVENUE EXPENDITURE WHICH RELATES TO TRANSFER OF THE SUGAR PLANT AT KOLLUMANGUDI TO A NEWLY LOCATED PLANT AT A.CHITTOOR. THE RELOCATED PLANT COMMENCED CRUSHING OPERATIONS DURING JANUARY 2003 FOR THE SUGAR SEASON 2003 - 2004. IN THE BOOKS OF ACCOUNTS, THE ASSESSEE HAS CLAIMED IT AS DEFERRED REVENUE EXPENDITURE BUT IN THE MEMO OF INCOME THE SAME HAS BEEN CLAIMED AS REVENUE EXPENDITURE AND ADDED TO THE LOSS AS PER P&L ACCOUNT. I.T.A. NO S . 248 & 461 /M/15 6 T H E ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE ABOVE EXPENDITURE SHOULD NOT BE DISALLOWED AS CAPITAL EXPENDITURE. THE ASSESSEE , IN RESPONSE , FIL ED THE LETTER DATED 12 - 03~2009 AND SUBMITTED THAT THE EXPENSES OF .6,28,44,388/ - ARE OF REGULAR NATURE MAINTAI N ING THE BUSINESS OPERATIONS OF THE COMPANY. THE COMPANY HAS NOT DISCONTINUED ITS B U S IN ESS B UT HAS ONLY ARRANGED FOR SHIFTING ONE OF ITS UNVIABLE UNITS FROM ONE LOCATION TO ANOTHER ON COMMERCIAL CONSIDERATIONS AND FOR BETTER CAPACITY UTILIZATION AND OPERATION. THE ASSESSEE HAS ALSO FURNISHED BREAK - UP OF THE SAID EXPENDIT U RE AND STATED THAT THE EXPENSES FURNISHED ARE OF ESSENTIAL NATURE FOR CONTINUI NG THE BUSINESS . ALL ARRANGEMENTS FOR SHIFTING ARE FOR RUNNING THE EXISTING BUSINESS IN A BETTER M ANNER. NO NEW ASSETS HAVE GOT CREATED THRO UGH THE ABOVE EXPENDITURE WARRANTING CAPITALIZATION. FURTHER IT WA S ARGUED THAT THE EXPENSES HAVE BEEN INCURRED FOR MAINTAINING THE EMPLO YEES AND ASSETS OF THE EXISTING BUSINESS WHICH HAS BEEN CONTINUED. IT WAS ALSO POINTED OUT THAT IN THE CASE OF TERRA ENERGY LTD., WHICH IS A CAPTIVE UNIT OF THE COMPANY, THE CHENNAI BENCHES OF THE TRIBUNAL HAS HELD THAT INTEREST AND S HIFTING EXPENSES ARE ALLOWABL E EXPENSES AND THEREFORE THE DEPARTMENT CANNOT TAKE CONT R ADICTING STA N DS ON THE SAME ISSU E. HOWEVER, THE ASSESSING OFFICER HAS NOT ACCEPTED THE SUBMISSIONS OF THE ASSESSEE AND OBSERVED THAT THE EXPENDITURE HAS BEEN INCURRED ON SHIFTING ONE OF ITS UNVIABLE UNITS FROM ONE LOCATION TO ANOTHER ON COMMERCIAL CONSIDERATIONS AND FOR BETTER CAPACITY UTILIZATION AND OPERATION. THIS STATEMENT OF THE ASSESSEE WOULD CLEARLY I.T.A. NO S . 248 & 461 /M/15 7 INDICATE THAT THE ASSESSEE HAS STOOD TO GAIN AN ENDURING ADVANTAGE OR BENEFIT IN THE FORM OF INCREASED PRODUCTION, REDUCED COST AND INCREASED PROFITS BY RELOCATING THE PLANT. IN VIEW OF THE ABOVE FACTS AND BY FOLLOWING THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2003 - 04, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE OF .6,28,44,388/ - AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 4.2 THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). BY FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2003 - 04, THE LD. CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO DELETE THE ADDITION. 4.3 AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. BY RELYING ON THE ORDER OF THE ASSESSING OFFICER, THE LD. DR HAS SUBMITTED THAT THE DEPARTMENT HAS PREFERRED APPEAL AGAINST THE ORDER OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 2003 - 04 AND THEREFORE PLEADED THAT THE ORDER OF THE LD. CIT(A) SHOULD BE REVERSED. 4.4 WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE FIND THAT IN THE ASSESSMENT ORDER, BY FOLLOWING THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2003 - 04 IN ASSESSEE S OWN CASE, THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF THE ASSESSEE IN THE YEAR UNDER CONSIDERATION. AGAINST THE ASSESSMENT ORDER FOR I.T.A. NO S . 248 & 461 /M/15 8 THE ASSESSM ENT YEAR 2003 - 04, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) AND THE LD. CIT(A) DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. AGAINST THE ORDER OF THE LD. CIT(A), THE DEPARTMENT FILED APPEAL BEFORE THE TRIBUNAL AND THE TRIBUN AL IN I.T.A. NOS. 1044/MDS/2009 & 1191/MDS/2009 VIDE ORDER DATED 20.11.2009, THE TRIBUNAL HAS OBSERVED AND HELD AS UNDER: 16. AS AFORESAID, ASSESSEE HAD DURING THE RELEVANT PREVIOUS YEAR SHIFTED ITS SUGAR UNIT FROM KOLLUMANGUDI TO A CHITTUR. RELOCATED PL ANT COMMENCED OPERATION M JAN 2003. EXPENDITURE INCURRED AT KOLLUMANGUDI UPTO THE START OF OPERATION WAS TREATED BY ASSESSEE IN ITS BOOKS AS CAPITAL IN NATURE BUT NEVERTHELESS CLAIMED AS REVENUE EXPENSES FOR TAX PURPOSES. ASSESSEE'S EXPLANATION WAS THAT FO R THE PURPOSE OF COMPUTATION OF INCOME UNDER INCOME TAX LAW, SUCH EXPENSES WERE ALLOWABLE. ASSESSING OFFICER, HOWEVER, RELYING ON THE DECISION OF SITALPUR SUGAR MILLS LTD . VS C I T 49 ITR 160 HELD THAT THE COST OF SHIFT.ING OF PLANT TO ANOTHER PLACE IS CAPIT AL IN NATURE AND THUS DISALLOWED THE AMOUNT. BEFORE LEARNED CIT(A), ASSESSEE'S ARGUMENT WAS THAT DIRECT AND INDIRECT EXPENDITURE INCURRED WERE IN THE NATURE OF ROUTINE EXPENDITURE LIKE SALARIES AND WAGES TO EMPLOYEES WHO WERE CONTINUOUSLY ON ROLLS. AFTER C ONSIDERING THE BREAK UP SUBMITTED BY THE ASSESSEE AND RELYING ON THE DECISION OF HON'BLE APEX COURT IN CORE HEALTH LTD (SUPRA), LD C I T(A) DELETED THE DISALLOWANCE. 17. LINE OF ARGUMENT TAKEN BY LD DR BEFORE US FOR ASSAILING THE ORDER OF THE LD CIT(A) WA S MORE OR LESS SAME AS HE HAD BEEN TAKEN ON THE GROUND REGARDING INTEREST DISALLOWANCE. 18. PER CONTRA ID A.R RELYING ON PB PAGE 24 SUBMITTED THAT SUCH EXPENDITURE TOTA1ING RS 10,55,845 WAS PURELY EMPLOYEE AND ADMINISTRATIVE COSTS AND ASSESSEE BEING AL READY BEEN IN THE BUSINESS COULD NOT BUT INCUR SUCH AMOUNT FOR CONTINUATION THEREOF. ACCORDING TO ID COUNSEL, JUST BECAUSE OF INTERRUPTION DUE TO SHIFTING, EMPLOYEE AND ADMINISTRATIVE COSTS INCURRED IN THE INTERREGNUM COULD NOT BE DISALLOWED. I.T.A. NO S . 248 & 461 /M/15 9 19. WE HA VE PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND HEARD THE RIVAL CONTENTIONS. ASSESSING OFFICER HAD RELIED ON THE DECISION OF HON'BLE APEX COURT IN THE CASE OF SITALPUR SUGAR MILLS CASE (SUPRA) FOR MAKING DISALLOWANCE OF ADMINISTRATIVE AND EMPLOYEE COST OF THE ASSESSEE DURING INTERREGNUM PERIOD IN WHICH IT SHIFTED ITS UNIT FROM ONE PLACE TO ANOTHER IT IS NOT DISPUTED THAT ASSESSEE HAD INCURRED SUCH EXPENSES IN THE INTERREGNUM PERIOD AND THE REASON FOR DISALLOWANCE WAS THAT THE ASSESSEE ITSELF HAD TREATED SUCH AMOUNT AS CAPITAL IN NATURE IN ITS BOOKS. NOW IF WE LOOK AT THE DECISION OF HON'BLE APEX COURT IN SITALPUR'S CASE, THERE THE SHIFTING WAS DONE FOR PUTTING THE FACTORY IN BETTER SHAPE SO AS TO PRODUCE LARGER BENEFITS. ON THE OTHER HAND, THE ASSESSEE HE RE WAS FORCED TO SHIFT ON ACCOUNT OF DIFFICULTY IN OBTAINING RAW MATERIAL, NAMELY, SUGARCANE IN ITS EARLIER LOCATION. IN THE CASE OF C I T VS BIMETAL BEARINGS LTD 210 ITR 945 (MDS) IT WAS HELD THAT THE EXPENDITURE RELATING TO SHIFTING OF MACHINERY ALONE COUL D BE TREATED AS CAPITAL IN NATURE WHEREAS EXPENDITURE RELATED TO EMPLOYEES HAD TO BE CONSIDERED AS REVENUE IN NATURE. AS AFORESAID ASSESSEE HAD DEMONSTRATED BEFORE THE LOWER AUTHORITIES THAT THE CLAIM WAS ADMINISTRATIVE IN NATURE BEING EMPLOYEE COST ETC. T HEREFORE WE ARE OF OPINION THAT THIS AMOUNT WAS INDEED ALLOWABLE TO THE ASSESSEE AND THE LD. CIT(A) HAD RIGHTLY DELETED THE DISALLOWANCE. NO INTERFERENCE CALLED FOR. GROUND NO 4 STANDS DISMISSED. 4.5 THE LD. DR COULD NOT CONTROVERT THE ABOVE FINDINGS OF THE TRIBUNAL OR FILED ANY ORDER OF HIGHER FORUM HAVING REVERSED THE FINDINGS OF THE TRIBUNAL. SIMPLY BECAUSE THE DEPARTMENT PREFERRED APPEAL BEFORE THE HON BLE HIGH COURT, A DIFFERENT VIEW CANNOT BE TAKEN AGAINST THE EXISTING ORDERS OF THE TRIBUNAL. RESPEC TFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2003 - 04, AS REFERRED ABOVE, WE CONFIRMING THE ORDER OF THE LD. CIT(A) AND THE GROUND RAISED BY THE REVENUE IS DISMISSED. 5. THE NEXT GRO UND RAISED IN THE APPEAL OF THE REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF .67,14,921/ - MADE WITH I.T.A. NO S . 248 & 461 /M/15 10 REGARD TO THE INTEREST PAID ON THE LOAN TAKEN FOR FUNDING SHIFTING AND OPERATIONAL PURPOSES WHICH WAS CAPITALIZED IN THE BOOKS BUT CLAIMED AS REVENUE EXPENDITURE FOR INCOME TAX PURPOSES. 5.1 THE ASSESSEE COMPANY HAS CLAIMED A SUM OF .67 , 14 , 921 / - TOWARDS INTEREST EXPENDITURE. THE ASSESSEE IN THE MEMO OF IN COME AS ADDED BACK A SUM OF .67 , 14 ,921/ - AS 'INTEREST PAID ON LOANS BORROWED FOR A. CHITTOO R UNIT C APITALISED IN THE BOOKS CLAIMED AS REVENUE EXPENDITURE'. THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THIS CLAIM SHOULD NOT BE DISALLOWED FOR THE REASONS STATED IN THE ASSESSMENT FOR THE ASSESSMENT YEAR 2003 - 04. THE ASSESSEE IN IT S REPLY DATED 30 . 11 . 2009 HAS FURNISHED THE DET A ILS AND REQUESTED TO ALLOW THE CLAIM. THE DETAILS FURNIS HED BY THE ASSESSEE IN THE RETURN ARE AS BELOW: 'THIS REPRESENTS INTEREST ON UCO BANK TERM LOAN OF RS.18 CRORES BORROWED FOR FUNDING SHIFTING AND OPERATIONAL EXPENSES PURPOSES. THE BREAK UP IS INTEREST ON LOAN UPTO 31.12.2001 - RS.1225246/ - , INTEREST FOR TH REE MONTHS PERIOD FROM JANUARY 2002 TO MARCH 2002 -- RS.5463245/ - AND FRONT END FEE FOR THE LOAN RS.26430/ - . IN THE BOOKS THIS HAD BEEN TREATED AS PART OF CAPITAL EXPENDITURE ALONG WITH OTHER OPERATIONAL EXPENDITURE. HOWEVER THIS DOES NOT DETER THE FACT OF SAME BEING REVENUE IN NATURE AS IT IS FOR FUNDING ONLY WORKING EXPENSES AND NOT FOR ANY ASSET CREATION AND THEREFORE CLAIMED AS REVENUE EXPENSE DEDUCTION IN OUR INCOME COMPUTATION. THEREFORE WE REQUEST YOU ALLOW THE SAME'. 5.2 HOWEVER, THE ASSESSING OFF ICER HAS NOT ACCEPTED THE SUBMISSIONS OF THE ASSESSEE AND OBSERVED THAT THE CONTENTION OF THE ASSESSEE THAT THE ABOVE EXPENDITURE IS REVENUE IN NATURE AS IT WA S FOR FUNDING FOR ONLY WORKING EXPENSES AND NOT FOR ANY ASSET CREATION THOUGH IN THE BOOKS IT HAS BEEN I.T.A. NO S . 248 & 461 /M/15 11 TREATED AS CAPITAL EXPENSES. SINCE T HE ASSESSEE HAS ADMITTED THAT THIS INTEREST CLAIM I S ON THE BORROWER OF TERM LOAN FROM UCO BANK FOR FUNDING SHIFTING AND OPERATIONAL EXPENSES PURPOSES, A S STATED IN ISSUE NO. 1 , THE SHIFTING EXPENDITURE RELATES TO THE TRANSFER OF THE SUGAR PLANT AT KOLLAMANGUDI IS NEWLY LOCATED AT A. CHITTUR AND ON SHIFTING ONE OF ITS UNVIABLE UNITS FROM ONE LOCATION TO ANOTHER ON COMMERCIAL CONSIDERATIONS AND FOR BETTER CAPACITY UTILIZATION AND OPERATION , WOULD CLEARLY INDICATE THA T THE ASSESSEE HAS STOOD TO GAIN AN ENDURING ADVANTAGE OR BENEFIT IN THE FO RM OF INCREASED PRODUCTION, REDUCED COST AND INCREASED PROFITS BY RELOCATING THE PLANT . IN VIEW OF THE ABOVE FACTS AND BY FOLLOWING THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2003 - 04, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE OF .6 7,14,921 / - AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 5.3 THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). BY FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESS EE S OWN CASE FOR THE ASSESSMENT YEAR 2003 - 04, THE LD. CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO DELETE THE ADDITION. 5.4 AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. BY RELYING ON THE ORDER OF THE ASSESSING OFFICER, THE LD. DR HAS SUBMITT ED THAT THE DEPARTMENT HAS PREFERRED APPEAL AGAINST THE ORDER OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 2003 - 04 AND THEREFORE PLEADED THAT THE ORDER OF THE LD. CIT(A) SHOULD BE REVERSED. I.T.A. NO S . 248 & 461 /M/15 12 5.5 WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GON E THROUGH THE ORDERS OF AUTHORITIES BELOW. WE FIND THAT IN THE ASSESSMENT ORDER, BY FOLLOWING THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2003 - 04 IN ASSESSEE S OWN CASE, THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF THE ASSESSEE IN THE YEAR UNDER CONS IDERATION. AGAINST THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2003 - 04, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) AND THE LD. CIT(A) DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. AGAINST THE ORDER OF THE LD. CIT(A), THE DEP ARTMENT FILED APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL IN I.T.A. NOS. 1044/MDS/2009 & 1191/MDS/2009 VIDE ORDER DATED 20.11.2009, THE TRIBUNAL HAS OBSERVED AND HELD AS UNDER: '9. GROUND NO 3 TAKEN BY THE REVENUE IS REGARDING DELETION OF DISALLOWANCE MAD E BY THE ASSESSING OFFICER ON ACCOUNT OF INTEREST INCURRED DURING THE PRE COMMENCEMENT PERIOD OF A SUGAR MANUFACTURING UNIT WHICH WAS CAPITALIZED !N THE BOOKS BUT CLAIMED AS REVENUE EXPENDITURE IN THE MEMO OF INCOME. ACCORDING TO REVENUE, ASSESSEE ITSELF HAD CAPITALIZED SUCH INTEREST EXPENDITURE AND THEREFORE OUGHT NOT TO HAVE CLAIMED IT AS REVENUE EXPENDITURE FOR IT PURPOSES. 10. ASSESSEE HAD, IN THE RELEVANT PREVIOUS YEAR, SHIFTED ITS SUGAR MANUFACTURING UNIT FROM KOLLUMANGUDI TO A CHITTUR AND THE PRO DUCTION AT A CHITTUR UNIT STARTED ONLY DURING JANUARY 2003. ASSESSEE HAD CONSTRUCTED A FACTORY AND OFFICE BU ILDING AT RS. 10.30 CRORES AND ACQUIRED ADDITIONAL PLANT AND MACHINERY FOR RS. 14.44 CRORES. FOR THE PURPOSE OF SHIFTING ASSESSEE RAISED CERTAIN LOA NS ON WHICH INTEREST OF RS 4,14,77,184 WAS INCURRED BY IT DURING THE PERIOD PRIOR TO THE SHIFTED UNIT BECOMING FUNCTIONAL, WHICH WAS CAPITALIZED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT BUT CLAIMED AS REVENUE EXPENDITURE FOR THE PURPOSE OF TAX COMPUTATION. ASSESSEE'S CONTENTION BEFORE THE ASSESSING I.T.A. NO S . 248 & 461 /M/15 13 OFFICER WAS THAT INTEREST ON BORROWED CAPITAL WAS ALLOWABLE U/S 36(1)(III) OF THE ACT. AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE AND RELYING ON THE DECISION OF HON'BLE APEX COURT IN THE CASE OF ASSAM BENGA L CEMENT COMPANY LTD VS CIT 27 ITR 34, CHALLAPALLI SUGARS LTD VS CIT 98 ITR 167 AND BALLIMAL NAVALKISHORE &, ANOTHER VESSEL VS CIT 224 ITR 414, ASSESSING OFFICER HELD THAT INTEREST INCURRED ON LOANS BORROWED FOR THE PURPOSE OF SHIFTING THE UNIT TILL SUCH TIME IT COMMENCED BUSINESS HAD TO BE TREATED AS CAPITAL EXPENDITURE. THUS HE DISALLOWED THE AMOUNT AND ADDED IT TO THE INCOME OF THE ASSESSEE. 11. BEFORE ID CIT(AL, ASSESSEE'S CONTENTION WAS THAT SHIFTING WAS DONE DUE TO INSUFFICIENT AVAILABILITY OF RAW MATERIALS I.E., SUGARCANE. ACCORDING TO IT, ONLY AN EXISTING PLANT WAS RELOCATED AND THE EXPENDITURE WAS NOT LAID OUT ON ANY NEW LINE OF BUSINESS. FURTHER ACCORDING TO THE ASSESSEE, CAPITAL BORROWED WAS UNDISPUTEDLY IN CONNECTION WITH RELOCATION OF PLANT AND SUCH AMOUNTS WERE USED FOR THAT PURPOSE ONLY. THEREFORE RELYING ON THE DECISION OF HON'BLE APEX COURT REPORTED IN CIT VS ASSOCIATED RUBBER INDUSTRIES LTD 236 ITR 471, IT ARGUED THAT THERE WAS NO ENDURING BENEFIT WHICH HAD ACCRUED TO IT. SPECIFICALLY IT WAS POINTED OUT TO THE ID CIT(A) THAT EXCEPT A LOAN OF RS. 18 CRORES FROM UCO BANK, WHICH WAS MEANT FOR SHIFTING, ALL OTHER LOANS ON WHICH SUCH INTEREST WAS PAID WERE FOR MEETING THE WORKING CAPITAL NEEDS. RELIANCE WAS ALSO PLACED ON THE DECISION OF THE H ON'BLE APEX COURT IN THE CASE OF DCIT VS CORE HEALTH CARE LTD 298 ITR 194. LD CIT(A) ACCEPTED THE CONTENTION OF THE ASSESSEE. ACCORDING TO HIM THERE WAS ONLY SHIFTING OF BUSINESS FROM ONE LOCATION TO ANOTHER WHICH WAS FOR BETTER CAPACITY UTILIZATION AND FO R COMMERCIAL EXPEDIENCY. FURTHER ACCORDING TO ID CIT(A), THERE WAS NO NEW LINE OF BUSINESS. THEREFORE RELYING ON THE DECISION OF HON'BLE APEX COURT IN CORE HEALTH CARE LTD (SUPRA), HE DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 12. NOW BEFOR E US, LD. D.R SUBMITTED THAT ASSESSING OFFICER HAD RELIED ON THE HON'BLE APEX COURT DECISION WHILE COMING TO A CONCLUSION THAT INTEREST INCURRED DURING PRE COMMENCEMENT PERIOD WAS NOT TO BE CONSIDERED AS CAPITAL IN NATURE. ACCORDING TO THE L D D.R., THERE W AS PURCHASE OF NEW PLANT AND MACHINERY AS ALSO CONSTRUCTION OF NEW BUILDING AND THIS WAS NOTHING BUT A NEW PLANT PUT INTO BUSINESS AND THEREFORE THE I.T.A. NO S . 248 & 461 /M/15 14 DISALLOWANCE OF INTEREST FOR THE PRE COMMENCEMENT PERIOD WAS CORRECTLY DONE BY THE ASSESSING OFFICER. 13. PER CONTRA, ID A.R SUBMITTED THAT THE ASSESSEE WAS IN THE BUSINESS OF SUGAR MANUFACTURE AND INTEREST EXPENSES WERE INCURRED ON LOANS TAKEN FOR THE PURPOSE OF SHIFTING THE SUGAR UNIT FROM ONE PLACE TO ANOTHER. THERE WAS NO NEW LINE OF BUSINESS STARTED BY T HE ASSESSEE. SUCH SHIFTING, ACCORDING TO HIM WAS DONE FOR COMMERCIAL EXPEDIENCY AND AT BEST IT COULD BE CONSIDERED ONLY AS INTEREST PAID ON LOAN TAKEN FOR EXPANSION OF A RUNNING BUSINESS. EVEN THEN ACCORDING TO HIM DECISION OF HON'BLE APEX COURT IN DCIT VS CORE HEALTH CARE LTD 298 ITR 194.WHICH WAS LATER FOLLOWED IN THE CASE OF L.K. TRUST VS CIT 222 CTR 214 (SC) WOULD JUSTIFY THE CLAIM. 14. WE HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW AND HEARD THE RIVAL CONTENTIONS. UNDISPUTEDLY FACTS ARE THAT THE ASS ESSEE WAS CARRYING ONLY MANUFACTURE AND SALE OF SUGAR. IT IS ALSO NOT DISPUTED THAT INTEREST EXPENSES WERE INCURRED ON LOANS TAKEN FOR THE PURPOSE OF SHIFTING OR FOR THE PURPOSE OF WORKING CAPITAL. THERE WAS NO NEW LINE OF BUSINESS. ASSESSEE WAS ALREADY DO ING BUSINESS OF SUGAR MANUFACTURE. WE FULLY AGREE WITH THE LINE OF ARGUMENT TAKEN BY THE LD. A.R THAT INTEREST ON LOANS BEING TAKEN BY AN EXISTING BUSINESS EVEN IF THE SHIFTING WAS CONSIDERED AS AN EXPANSION WOULD BE ELIGIBLE FOR DEDUCTION U/S 36(1)(III) O F THE ACT. THIS POSITION OF THE LAW LAID DOWN BY THE HON'BLE APEX COURT IN THE CASE OF CORE HEALTH CARE LTD (SUPRA) HAS BEEN REITERATED IN THE CASE OF L.K.TRUST (SUPRA). REVENUE HAS NO CASE THAT THERE WAS ANY NEW LINE OF BUSINESS OF SUGAR MANUFACTURE. THIS BEING SO, LD. CIT(A) WAS WELL JUSTIFIED IN DELETING THE DISALLOWANCE. THERE BEING NO NEED FOR INTERFERENCE, WE DISMISS GROUND NO 3 RAISED BY THE REVENUE. 5.6 THE LD. DR COULD NOT CONTROVERT THE ABOVE FINDINGS OF THE TRIBUNAL OR FILED ANY ORDER OF HIGHER FORUM HAVING REVERSED THE FINDINGS OF THE TRIBUNAL. SIMPLY BECAUSE THE DEPARTMENT PREFERRED APPEAL BEFORE THE HON BLE HIGH COURT, A DIFFERENT VIEW CANNOT BE TAKEN AGAINST THE EXISTING ORDERS OF THE TRIBUNAL. RESPECTFULLY FOLLOWING THE DECISION OF THE COOR DINATE BENCH OF THE I.T.A. NO S . 248 & 461 /M/15 15 TRIBUNAL IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2003 - 04, AS REFERRED ABOVE, WE CONFIRMING THE ORDER OF THE LD. CIT(A) AND THE GROUND RAISED BY THE REVENUE IS DISMISSED. 6. THE NEXT GROUND RAISED IN THE APPEAL OF THE REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF LOAN PROCESSING FEE OF .42,37,500/ - PAID TO THE BANK. 6.1 THE ASSESSEE HAS CLAIMED THE ABOVE SUM AS REVENUE EXPENDITURE IN THE MEMO OF INCOME WITH THE NARRATION LOAN PROCESSING EXPENSES PAID DURING THE YEAR. THE ASSESSEE WAS ASKED TO EXPLAIN THE PURPOSE FOR WHICH THE LOAN HAS BEEN OBTAINED AND UTILIZED. THE ASSESSEE IN ITS REPLY DATED 30 . 11 . 2009 HAS STATED AS BELOW: THIS IS FEE PAID TO BANKS FOR PROCESSING AND RELEASE OF TERM LOANS TO THE C OMPANY. IN BOOKS THIS HAS BEEN TREATED AS DEFERRED REVENUE EXPENDITURE. THERE IS NO CONCEPT OF DEFERRED REVENUE EXPENDITURE IN INCOME - TAX. THE EXPENSES BEING ONE OF BANK CHARGES INCURRED IN NORMAL COURSE OF OPERATIONS, THE AMOUNT CLAIMED ARE DEDUCTIBLE. SI MILAR EXPENDITURE HAS BEEN ALLOWED BY CIT(A) FOR AY 2003 - 04 . 6.2 THE ASSESSING OFFICER HAS OBSERVED THAT T HE ASSESSEE IN ITS ABOVE REPLY HAS NOT SPELT OUT THE P UR POSE AND UTILIZATION OF THE TERM LOAN AS TO WHETHER THE LOANS WERE UTILIZED FOR EXPANSION O R ACQUISITION OF CAPITAL ASSET OR FOR WORK ING CAPITAL PURPOSES. IN VIEW OF THE ABOVE AND SINCE THE DEPARTMENT HAS FILED APPEAL AGAINST THE ORDER OF THE LD. CIT(A) BEFORE THE I.T.A. NO S . 248 & 461 /M/15 16 TRIBUNAL, THE ASSESSING OFFICER DISALLOWED THE AMOUNT OF .42,37,500/ - AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 6.3 THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). BY FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2003 - 04, THE LD. CIT(A) HAS D IRECTED THE ASSESSING OFFICER TO DELETE THE ADDITION. 6.4 AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. BY RELYING ON THE ORDER OF THE ASSESSING OFFICER, THE LD. DR HAS SUBMITTED THAT THE DEPARTMENT HAS PREFERRED APPEAL AGAINST THE ORDER OF TH E TRIBUNAL FOR THE ASSESSMENT YEAR 2003 - 04 AND THEREFORE PLEADED THAT THE ORDER OF THE LD. CIT(A) SHOULD BE REVERSED. 6.5 WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE FIND THAT IN THE ASSE SSMENT ORDER, THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAS NOT FURNISHED IN DETAIL THE P UR POSE AND UTILIZATION OF THE TERM LOAN AS TO WHETHER THE LOANS WERE UTILIZED FOR EXPANSION OR ACQUISITION OF CAPITAL ASSET OR FOR WORK ING CAPITAL PURPOSES. MOREOVER, HE MADE THE DISALLOWANCE SINCE THE DEPARTMENT HAS FILED APPEAL AGAINST THE ORDER OF THE LD. CIT(A) FOR THE ASSESSMENT YEAR 2003 - 04 AND ACCORDINGLY DISALLOWED THE CLAIM OF THE ASSESSEE IN THE YEAR UNDER CONSIDERATION. AGAINST THE ASSESSMENT ORDE R FOR I.T.A. NO S . 248 & 461 /M/15 17 THE ASSESSMENT YEAR 2003 - 04, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) AND THE LD. CIT(A) DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. AGAINST THE ORDER OF THE LD. CIT(A), THE DEPARTMENT FILED APPEAL BEFORE THE TRIBUN AL AND THE TRIBUNAL IN I.T.A. NOS. 1044/MDS/2009 & 1191/MDS/2009 VIDE ORDER DATED 20.11.2009, THE TRIBUNAL HAS OBSERVED AND HELD AS UNDER: 8. WE HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE RIVAL CONTENTIONS. THERE IS NO DISPUTE THAT FRONT EN D FEE PAID TO ICICI BANK FOR GETTING EXPORT PERFORMANCE GUARANTEE AND ADHOC L.C. FACILITY. NO DOUBT, SUCH FACILITY THREE YEARS AND ASSESSEE HAD ONLY TREATED THE PROPORTIONATE AMOUNT AS CHARGEABLE TO PROFIT AND LOSS ACCOUNT, TREATING THE BALANCE AS DEFERRED REVENUE IN ITS BOOKS. NEVERTHELESS, IT CANNOT BE STATED THAT THIS WAS AN AMOUNT WHICH RESULTED IN ANY ENDURING BENEFIT FOR THE ASSESSEE, NOR A SUM WHICH WAS NOT EXPENDED WHOLLY FOR THE PURPOSE OF ITS BUSINESS. THAT BEING SO, IT WAS AN EXPENSE DEFINITELY A LLOWABLE U/S 37(1) OF THE ACT. COMING TO THE SECOND ISSUE OF PAYMENTS MADE TO M/S CARGIL INDIA LTD., THESE WERE ALSO ADMITTEDLY FOR OBTAINING EXPORT ORDERS AND EXPORTS WERE ONE OF THE MAJOR REVENUE EARNING SOURCE OF THE ASSESSEE. NOTHING WAS BROUGHT ON REC ORD TO REBUT THE CONTENTION OF THE ASSESSEE THAT NO AMOUNT COULD BE RECOVERED FROM CARGIL INDIA LTD. IRRESPECTIVE OF THE AMOUNT OF EXPORT ORDERS SECURED THROUGH THEM. THIS BEING SO, WAS ALSO A SUM PAID BY ASSESSEE COMPANY EXCLUSIVELY FOR THE PURPOSE OF ITS BUSINESS. AN ASSESSEE ENGAGED IN BUSINESS WOULD ALWAYS STRIVE TO INCREASE ITS BUSINESS AND FOR SUCH NEED, IT MAY MAKE PAYMENTS OF COMMISSIONS TO FACILITATE EXPANSION OF ITS SALES. IT WOULD NOT BE APPROPRIATE FOR THE REVENUE TO SIT IN CHAIR OF A BUSINESSME N AND DECIDE THE EXPEDIENCY OR OTHERWISE OF A BUSINESS EXPENDITURE. IN OUR VIEW, ID. CIT(A) RIGHTLY RELIED ON THE DECISION OF THE HON'BLE APEX COURT IN THE OF SA. BUILDERS[SUPRA].COMMERCIAL EXPEDIENCY FOR MAKING THIS PAYMENT COULD NOT BE DISPUTED. VIS - A - VI S THE CLAIM OF THE REVENUE THAT HAD ITSELF TREATED SUCH AMOUNT AS DEFERRED REVENUE IN ITS BOOKS, NO DOUBT, IT WOULD GIVE A HINT REGARDING THE INTENTION OF THE ASSESSEE AS TO HOW TO TREAT SUCH EXPENDITURE. BUT NEVERTHELESS THE IT ACT DOES NOT RECOGNIZE THE CONCEPT OF DEFERRED REVENUE EXPENDITURE FOR COMPUTING THE INCOME UNDER THE HEAD PROFITS AND GAINS OF BUSINESS/PROFESSION. WHEREVER AN AMORTIZATION OF THE EXPENSE IS TO I.T.A. NO S . 248 & 461 /M/15 18 BE DONE, THIS IS CLEARLY SPECIFIED UNDER THE ACT. AN ASSESSEE IS ELIGIBLE TO CLAIM SUCH EXPENSES THAT HAVE BEEN INCURRED BY IT FOR THE PURPOSES OF ITS BUSINE SS, IF IT IS REVENUE IN NATURE, IRRESPECTIVE OF THE TREATMENT GIVEN BY IT IN ITS BOOKS OF ACCOUNT. THEREFORE, WE CANNOT FIND ANY LACUNAE IN THE ORDER OF LD. CIT(A) IN DELETING THIS DISALL OWANCE. GROUND NO.2, THEREFORE, STANDS DISMISSED. 6.6 THE LD. DR COULD NOT CONTROVERT THE ABOVE FINDINGS OF THE TRIBUNAL OR FILED ANY ORDER OF HIGHER FORUM HAVING REVERSED THE FINDINGS OF THE TRIBUNAL. SIMPLY BECAUSE THE DEPARTMENT PREFERRED APPEAL BEFO RE THE HON BLE HIGH COURT, A DIFFERENT VIEW CANNOT BE TAKEN AGAINST THE EXISTING ORDERS OF THE TRIBUNAL. RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2003 - 04, AS REFERRED ABOVE, WE CONFIRMING THE ORDER OF THE LD. CIT(A) AND THE GROUND RAISED BY THE REVENUE IS DISMISSED. THUS, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED AND THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THE 15 TH JUNE , 201 6 AT CHENNAI. SD/ - SD/ - ( CHANDRA POOJARI ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 15 . 0 6 .201 6 VM/ - I.T.A. NO S . 248 & 461 /M/15 19 / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.