DCIT, CHENNAI V. State Industries Promotion Corporation of Tamil nadu Ltd., CHENNAI

ITA 2482/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96120 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 03-09-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 01-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S BHARATH
• Assessee Lawyers: DR ANITHA SUMANTH
• Keywords: Reopening of assessment; Bad and doubtful debts
• Section: 14A; 147

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . , ! # $ , % & BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ITA NOS. ASSESS- MENT YEAR APPELLANT RESPONDENT 2320/MDS/2014 & 2321/MDS/2014 2005-06 & 2007-08 M/S. STATE INDUSTRIES PROMOTION CORPORATION OF TAMIL NADU LTD. 19-A, RUKMANI LAKSHMIPATHY ROAD, EGMORE, CHENNAI-600008. PAN: AAACS4643J ASSISTANT COMMISSIONER OF INCOME TAX COMPANY CIRCLE-VI(4), 705, NEW BLOCK CHENNAI-34. 2481/MDS/2014 & 2482/MDS/2014 2005-06 & 2010-11 DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-VI(4), 705, NEW BLOCK, CHENNAI-34. M/S. STATE INDUSTRIES PROMOTION CORPORATION OF TAMIL NADU LTD. CHENNAI-600008. PAN: AAACS4643J ASSESSEE BY : DR.ANITHA SUMANTH, ADVOCATE REVENUE BY : MR. S.BHARATH, CIT /DATE OF HEARING : 3 RD SEPTEMBER, 2015 /DATE OF PRONOUNCEMENT : 30 TH SEPTEMBER, 2015 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: ALL THESE APPEALS ARE FILED BY THE ASSESSEE AND REVENUE FOR THE ASSESSMENT YEARS 2005-06, 2007-08 A ND 2010-11 AGAINST THE ORDERS OF COMMISSIONER OF INCOM E TAX (APPEALS)-VI, CHENNAI DATED 30.06.2014 & 30.07.2014 . SINCE THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON, TH EY ARE HEARD TOGETHER AND DISPOSED OFF BY THIS COMMON ORD ER FOR THE SAKE OF CONVENIENCE. 2 ITA NOS.2320, 2321, 2481 & 2482/MDS/2014 ITA NO.2320/MDS/2014 (A.Y.2005-06):- 2. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 30.0 6.2014 FOR THE ASSESSMENT YEAR 2005-06. THE GRIEVANCE OF T HE ASSESSEE IN THIS APPEAL IS THAT COMMISSIONER OF INC OME TAX (APPEALS) ERRED IN PASSING THE ORDER WITHOUT ADJUDI CATING THE GROUNDS RAISED BY THE ASSESSEE IN RESPECT OF DISALL OWANCE MADE UNDER SECTION 14A AND CLAIM FOR BAD DEBTS WRIT TEN OFF. 3. COUNSEL FOR THE ASSESSEE REFERRING TO THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) SUBMITS THAT I T IS THE FINDING OF THE COMMISSIONER OF INCOME TAX (APPEALS) THAT ASSESSEES AUTHORIZED REPRESENTATIVE ARGUED AGAINST OTHER ADDITIONS MADE IN THE ORDER. SHE SUBMITS THAT OTHER ADDITIONS CONSIST OF DISALLOWANCE MADE UNDER SECTION 14A OF T HE ACT AND CLAIM FOR BAD DEBTS WRITTEN OFF. COUNSEL FOR TH E ASSESSEE FURTHER SUBMITS THAT IN FACT THE LETTER FILED ON 4. 7.2014 RAISING SPECIFICALLY THE ADDITIONAL GROUNDS AGAINST DISALLO WANCE MADE UNDER SECTION 14A AND BAD DEBTS AND THESE GROUNDS W ERE NOT DISPOSED OFF BY THE COMMISSIONER OF INCOME TAX (APPEALS). 3 ITA NOS.2320, 2321, 2481 & 2482/MDS/2014 4. DEPARTMENTAL REPRESENTATIVE REFERRING TO THE LET TER DATED 4.7.2014 AND ADDITIONAL GROUNDS FILED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), SUBMITS THAT ADDITIONAL GROUNDS WERE FILED AFTER PASSING OF THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) ON 30.06.2014, THEREFORE THERE WAS NO OCCASION FOR ADJUDICATION OF ADDITIONAL GROUNDS BY THE COMMISSIONER OF INCOME TAX (APPEALS) . DEPARTMENTAL REPRESENTATIVE SUBMITS THAT ADDITIONAL GROUNDS APPEAR TO HAVE BEEN FILED ON 4.7.2014 AFTER ADJUDIC ATION OF APPEAL BY THE COMMISSIONER OF INCOME TAX (APPEALS) ON 30.06.2014. 5. IN REPLY, COUNSEL FOR THE ASSESSEE SUBMITS THAT IN THE COURSE OF HEARING BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) GROUNDS WERE RAISED ORALLY AND IMMEDIATE LY THEREAFTER, GROUNDS WERE FILED ON 4.7.2014 IN WRITI NG. COUNSEL FOR THE ASSESSEE FURTHER SUBMITS THAT COMMISSIONER OF INCOME TAX (APPEALS) HAD IN FACT MADE OBSERVATION T HAT AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ARGUED AG AINST THE OTHER ADDITIONS MADE IN THE ORDER. HOWEVER, HE DISP OSED OFF THE APPEAL ONLY ON THE GROUND SPECIFICALLY MENTIONE D IN RESPECT OF UNREALIZED INTEREST WHETHER IT IS TAXAB LE OR NOT. 4 ITA NOS.2320, 2321, 2481 & 2482/MDS/2014 THEREFORE, COUNSEL FOR THE ASSESSEE SUBMITS THAT IN THE INTEREST OF JUSTICE, MATTER MAY BE RESTORED TO THE FILE OF COMMISSIONER OF INCOME TAX (APPEALS) FOR ADJUDICATI ON OF THE GROUNDS RAISED BY THE ASSESSEE BEFORE THE COMMI SSIONER OF INCOME TAX (APPEALS). 6. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES. THE COMMISSIONER OF INCOME TAX (APPEALS) IN PARA 5 OF HIS ORDER STATED AS UNDER:- ALL THE THREE GROUNDS FILED BY THE APPELLANT ARE AGAINST THE ACTION OF THE AO IN MAKING DISALLOWANC E OF UNREALIZED INTEREST OF RS.39,76,38,000/-. THOUGH AR OF THE APPELLANT ARGUED AGAINST THE OTHER ADDITI ONS MADE IN THE ORDER, THE STATEMENT OF FACTS AND GROUN DS OF APPEAL FILED BY THE APPELLANT ARE AGAINST THE ADDITION OF UNREALIZED INTEREST MADE BY THE AO. HENCE, THE APPEAL IS DECIDED ONLY IN RESPECT OF THE FORMAL GROUND TAKEN BY THE APPELLANT IN THE APPEAL MEMO FORM NO.35. THIS ISSUE WAS DISCUSSED BY THE AO IN PARA 2.1 OF THE ASSESSMENT ORDER. THE AO DISALLOWED THE SAME ON THE GROUND THAT THE UNREALIZ ED TAX HAS BEEN BROUGHT TO TAX CONSISTENTLY. THE AO HE LD THAT AS THE APPELLANT IS FOLLOWING MERCANTILE SYSTE M OF ACCOUNTING, THE UNREALIZED INTEREST PERTAINING TO S TICKY TERM LOAN, INTEREST ON PLOT COST NEEDED TO BE TAXED IN THE YEAR UNDER CONSIDERATION. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE AR OF THE APPELLANT FILE D WRITTEN SUBMISSION VIDE LETTER DATED 30.06.2014 EXPLAINING THAT SIMILAR ISSUE WAS ALLOWED BY THE CIT(A) FOR THE A.YS. 2003-04, 2007-08, 2008-09 & 2009-10 AND ALSO RELIED UPON VARIOUS DECISIONS OF T HE HIGH COURTS AND SUPREME COURTS. THIS ISSUE HAS COME UP BEFORE ITAT A BENCH CHENNAI FOR A.YS. 2003-04, 2007-08, 2008-09 & 2009-10 IN THE APPELLANT'S OWN CASE IN ITA NO.1290, 1291, 1292, 1293/MDS/2011 AND IN ITA NO.2059/MDS/2012 DATED 5 ITA NOS.2320, 2321, 2481 & 2482/MDS/2014 07.03.2013 WHEREIN THE REVENUE'S APPEAL WAS DISMISSED IN PARA 8 OF THE ORDER RELYING UPON THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF VAS HIST CHAY VYAPAR (330 ITR 440). THE FACTS OF THE CASE AR E IDENTICAL TO THE FACTS OF THE APPELLANT'S CASE AND DECIDED BY THE ITAT A BENCH CHENNAI(SUPRA). RESPECTFULLY FOLLOWING THE DECISION OF THE ITAT A BENCH(SUPRA). I HOLD THAT THE ADDITION MADE BY THE AO IS NOT PROPER. THE AO IS DIRECTED TO DELETE THE ADD ITION. HENCE, ALL THE GROUNDS OF APPEAL RAISED BY THE APPELLANT ARE TREATED AS DISPOSED OFF. 7. IT COULD BE SEEN FROM THE ABOVE OBSERVATIONS OF THE COMMISSIONER OF INCOME TAX (APPEALS) THAT AUTHORIZE D REPRESENTATIVE OF THE APPELLANT ARGUED AGAINST OTHE R ADDITIONS MADE IN THE ORDER. IT IS ALSO THE FINDING OF THE CO MMISSIONER OF INCOME TAX (APPEALS) THAT STATEMENT OF FACTS AND GROUNDS OF APPEAL FILED BY THE APPELLANT ARE AGAINST THE AD DITION OF UNREALIZED ADDITION MADE BY THE ASSESSING OFFICER. THIS STATEMENT APPEARS TO BE NOT CORRECT AS WE COULD CLE ARLY SEE FROM THE STATEMENT OF FACTS FILED BEFORE THE COMMIS SIONER OF INCOME TAX (APPEALS) FOR THE ASSESSMENT YEAR 2005-0 6 THAT THE ASSESSEE HAD CONTESTED THE ADDITION IN RESPECT OF DISALLOWANCE MADE UNDER SECTION 14A OF THE ACT AS W ELL AS CLAIM FOR BAD DEBTS WRITTEN OFF. THE STATEMENT OF FACTS FILED BY THE APPELLANT BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) READS AS UNDER:- 6 ITA NOS.2320, 2321, 2481 & 2482/MDS/2014 THE APPELLANT IS A WHOLLY OWNED GOVERNMENT OF TAMILNADU UNDERTAKING ENGAGED IN THE DEVELOPMENT OF INDUSTRIAL ESTATES IN THE STATE OF TAMILNADU BY WAY OF ACQUISITION OF LAND THROUGH LAND ACQUISITION ACT, 1894 AND TAMILNADU ACQUISITION OF LAND FOR INDUSTRIAL PURPOS ES ACT, 1997. THE MAIN ACTIVITY OF THE APPELLANT IS TO ACQU IRE LAND AND DEVELOP THE INDUSTRIAL INFRASTRUCTURE IN ALL THE IN DUSTRIAL ESTATES INCLUDING SPECIAL ECONOMIC ZONE AND IS ALLOTTED ON A LONG TERM LEASE BASIS BESIDES PROVIDING FINANCIAL ASSIST ANCE BY WAY OF MEDIUM AND LONG TERM LOANS. THE ABOVE CASE WAS TAKEN UP FOR ASSESSMENT U/S 143(3), DURING THE COURSE OF HEARING THE LEARNED ASSESSING OFFICER DISALLOWED THE UNREALIZED INTEREST OF RS.3976380001- TO MAINTAIN THE UNIFORMITY IN THE STAND TAKEN BY THE D EPARTMENT WITH REGARD TO THIS ISSUE AND BROUGHT TO TAX THE LEARNED ASSESSING OFFICER HAS CALCULATED THE IN VESTMENT COST U/S 14A READ ALONG WITH RULE 8 D OF THE INCOME TAX ACT AND A SUM OF RS. 3719667/- WAS BROUGHT TO TAX. THE LEARNED ASSESSING OFFICER HAS DISALLOWED THE BA D DEBTS WRITTEN OFF AMOUNTING TO RS.264676022 /- SINCE THI S IS NOT A TRADE DEBT AND NO INCOME HAS DERIVED IN EARLIER YEA RS BY THIS DEBT, THE WRITE OFF OF THIS DEBT IS NOT AN ALLOWABL E EXPENDITURE AS THE CONDITION SPECIFIED IN S.36(2) IS NOT SATISF IED AND BROUGHT TO TAX. THE INTEREST ON TERM LOAN IS ACCOUNTED ON CASH BASI S IN ACCORDANCE WITH THE NOTIFICATION NO. GSR NO. 550 (E ) DATED 16 05 1989 AND GSR NO. 770 (E) DATED 10 09 1990 ISS UED BY THE DEPARTMENT OF COMPANY AFFAIRS AND THIS TREATMEN T HAS REGULARLY AND CONSISTENTLY FOLLOWED. THE APPELLANT HAS FOLLOWED THE ACCOUNTING STANDARD (AS9) - REVENUE RECOGNITION ISSUED BY THE INSTITUTE OF CHAR TERED ACCOUNTANTS OF INDIA WHEREIN IT IS STATED THAT WHER E THE ABILITY TO ASSESS THE ULTIMATE COLLECTION WITH REASONABLE C ERTAINTY IS LACKING AT THE TIME OF RAISING ANY CLAIM, IT MAY BE APPROPRIATE TO RECOGNIZE THE REVENUE ONLY WHEN IT IS REASONABLY CERTAIN THAT THE ULTIMATE COLLECTION WILL BE MADE. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DE CIDED IN FAVOUR OF THE APPELLANT ON THE SAME ISSUE FOR TH E ASSESSMENT YEARS 2003-04, 2007-08, 2008-09 AND 2009 -10 AND THE HONORABLE ITAT HAS ALSO DECIDED IN FAVOUR O F THE APPELLANT. APPELLANT SUBMITS THAT INVESTMENT WAS MADE OUT OF T HE SURPLUS FUNDS AND RETAINED EARNINGS AND THUS IT HAD NOT INC URRED ANY EXPENDITURE FOR EARNING EXEMPTED INCOME. IT WAS HELD THAT COMPANY HAD HUGE ACCUMULATED PROFITS WHICH COULD BE INVESTED AND FURTHER NO BORROWINGS WERE MADE DURING THE 7 ITA NOS.2320, 2321, 2481 & 2482/MDS/2014 CURRENT YEAR. THE APPELLANT RELIED ON THE DECISION OF HONORABLE S UPREME COURT IN THE CASE OF T.R.F. LTD. VS. C.I.T.(2010) 3 23 ITR 397 (SC) THAT AFTER 1ST APRIL, 1989 IT IS NOT NECESSARY FOR THE ASSESSES TO ESTABLISH THAT THE DEBT, IN FACT, HAS B ECOME BAD AND IRREVOCABLE. IT IS ENOUGH IF THE BAD DEBTS ARE WRITTEN OFF AS IRREVOCABLE IN THE ACCOUNTS OF ASSESSEE. THE APPELLANT ALSO RELIED ON THE DECISION OF HONORA BLE SUPREME COURT IN THE CASE OF VIJAYA BANK VS. CIT & ANR (20 10) 323 ITR 166 (SC) IT IS NOT NECESSARY TO WRI TE OFF AND ELIMINATE DEBTOR IN THE ACCOUNTS OF THE ASSESSEE. W RITING OFF THE PROVISION FOR BAD DEBTS IN P & L A/C AND REDUCI NG SUCH PROVISION FROM THE FIGURE OF DEBTORS IN THE ASSETS SIDE OF BALANCE SHEET IS ENOUGH. THE APPELLANT ALSO RELIED ON THE DECISION OF THE HO NORABLE DELHI HIGH COURT IN THE CASE OF CIT V. MORGAN SECUR ITIES & CREDITS (P) LTD., (ITA NO. 1442/2006) 2007-TIOL-LS- HC-DEL- IT, THAT ONCE IT WAS ACCEPTED THAT THE TRANSACTION ACTUALLY TOOK PLACE, THE DECISION TO WRITE OFF THE LOAN AS A BAD DEBT WAS A CONSEQUENCE OF AN HONEST JUDGEMENT. AGGRIEVED AGAINST THE ADDITION OF UNREALIZED INTERE ST THIS APPEAL IS PREFERRED. 8. IN VIEW OF THE ABOVE CONTENTIONS OF THE ASSESSEE MADE IN THE STATEMENT OF FACTS CLEARLY GO TO SHOW THAT A SSESSEE WAS CONTENDING THE ADDITIONS/DISALLOWANCES MADE UND ER SECTION 14A AND ALSO WRITTEN OFF OF BAD DEBTS. INTE RESTINGLY, WE ALSO SEE THAT ASSESSEE HAS ALSO FILED ADDITIONAL GROUNDS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) IN RESPECT OF THE BAD DEBTS FOR THE ASSESSMENT YEAR 2007-08 WH ICH IS ALSO BEFORE US AND THE COMMISSIONER OF INCOME TAX (APPEALS) STATED THAT PETITION FOR ADMITTING NEW GR OUNDS OF APPEAL DATED 3.7.2014 WAS FILED BEFORE HIM RAISIN G 8 ITA NOS.2320, 2321, 2481 & 2482/MDS/2014 ADDITIONAL GROUNDS WHICH HE HAD ADJUDICATED UPON FO R THE ASSESSMENT YEAR 2007-08. TAKING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE INTO CONSIDERATION, WE RE STORE THE ISSUES BACK TO THE FILE OF THE COMMISSIONER OF INCO ME TAX (APPEALS) TO DISPOSE OFF THE ADDITIONAL GROUNDS RAI SED BY THE ASSESSEE IN RESPECT OF ADDITIONS/DISALLOWANCES MAD E UNDER SECTION 14A OF THE ACT AND BAD DEBTS WRITTEN OFF. T HE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ITA NO.2481/MDS/2014 (A.Y.2005-06):- 9. COMING TO THE REVENUES APPEAL FOR THE ASSESSMEN T YEAR 2005-06, THE ONLY ISSUE IN THE APPEAL IS THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELET ING THE ADDITION MADE BY THE ASSESSING OFFICER TOWARDS UNRE ALIZED / ACCRUED INTEREST. 10. DEPARTMENTAL REPRESENTATIVE PLACES RELIANCE ON THE ORDER OF THE ASSESSING OFFICER. 11. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE ISSUE IN APPEAL HAS BEEN DECIDED BY THE CO-ORDINATE BENCH IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2003-04 , 2007-08 TO 2009-10 IN ITA NOS.1291 TO 1293/MDS/2011 AND 9 ITA NOS.2320, 2321, 2481 & 2482/MDS/2014 2059/MDS/2012 DATED 07.03.2013 DELETING THE ADDITIO N MADE TOWARDS UNREALIZED /ACCRUED INTEREST. COUNSEL FOR T HE ASSESSEE SUBMITS THAT THE FACTS AND CIRCUMSTANCES B EING IDENTICAL THE SAME DECISION MAY BE FOLLOWED FOR THE ASSESSMENT YEAR 2005-06 ALSO. 12. THE ASSESSING OFFICER WHILE COMPLETING THE ASSE SSMENT MADE ADDITION OF ` 39.76 CRORES STATING THAT UNREALIZED INTEREST ACCRUED DURING THE ASSESSMENT YEAR 2005-06 IS BROUGHT TO TAX AS THE UNREALIZED INTEREST HAS BEEN BROUGHT TO TAX CONSISTENTLY BY THE DEPARTMENT IN EARLIER YEARS . THIS UNREALIZED INTEREST PERTAINS TO STICKY TERM LOAN, I NTEREST ON PLOT COST AND INTEREST ON SEED CAPITAL ASSISTANCE. THE OBSERVATION OF THE ASSESSING OFFICER THAT SINCE THE ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING, THE UNREALIZED / ACCRUED INTEREST IS TO BE ADDED TO TOT AL INCOME. ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) FOL LOWING THE DECISION OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NOS.1290 TO 1293/MDS/201 1 AND 2059/MDS/2012 DATED 7.3.2013 DELETED THE ADDITION , AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE US. 10 ITA NOS.2320, 2321, 2481 & 2482/MDS/2014 13. UPON PERUSING THE ORDER OF THE CO-ORDINATE BENC H IN ITA NOS.1290 TO 1293/MDS/2011 AND 2059/MDS/2012 DA TED 7.3.2013, WE FIND THAT THE ISSUE IN APPEAL HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE HOLDING A S UNDER:- 2. APPEALS FOR ASSESSMENT YEARS 2003-04, 2008-09 AND 2009-10 ARE TAKEN UP FIRST FOR DISPOSAL. SOLE ISSUE RAISED BY THE REVENUE FOR THESE YEARS IS ON AN ADDI TION FOR ACCRUED INTEREST MADE BY THE ASSESSING OFFICER, DELETED BY THE CIT(APPEALS). AS PER REVENUE, CONSIDERING THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF TAMILNADU POWER FINANCE AND INFRASTRUCTURE DEVELOPMENT CORPORATION LTD. V. JCIT (280 ITR 491), CIT(APPEALS) SHOULD HAVE UPHELD THE ADDIT ION MADE BY THE ASSESSING OFFICER. 3. FACTS APROPOS ARE THAT ASSESSEE, A NON-BANKING FINANCIAL COMPANY, WHOLLY OWNED BY THE STATE OF TAM IL NADU, WAS ENGAGED IN PROMOTION OF INDUSTRIAL INFRASTRUCTURE IN THE STATE OF TAMIL NADU BY ACQUIR ING LAND, DEVELOPING INFRASTRUCTURE, INCLUDING SPECIAL ECONOMIC ZONES AND PROVIDING FINANCIAL ASSISTANCE B Y WAY OF MEDIUM AND LONG TERM LOANS. BALANCE SHEET O F THE ASSESSEE FOR THE RESPECTIVE ASSESSMENT YEARS, V IDE SCHEDULE L THEREOF, GIVING NOTES ON ACCOUNTS, MENTIONED THAT UNREALIZED INTEREST ON LOANS, INTERE ST ON PLOT COST AND INTEREST ON SEED CAPITAL ASSISTANCE W ERE NOT RECOGNIZED AS INCOME. CLARIFICATIONS WERE SOUGHT F ROM THE ASSESSEE AS TO WHY ACCRUED INTEREST ON LOANS SH OULD NOT BE CONSIDERED AS INCOME OF THE ASSESSEE FOR IMPUGNED ASSESSMENT YEARS SINCE IT WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. REPLY OF THE ASSE SSEE WAS THAT IT COULD FOLLOW CASH BASIS ACCOUNTING. AS PER THE ASSESSEE, BY VIRTUE OF NOTIFICATION NO.GSR 550 (E) DATED 16.5.89 AND GST 770 (E) DATED 10.9.90, IT WAS ONLY REQUIRED TO DISCLOSE THE INTEREST THAT COULD A RISE FROM SUCH LOANS ONLY IN NOTE ON ACCOUNTS EVEN IF MERCANT ILE SYSTEM WAS ADOPTED. FURTHER, AS PER ASSESSEE, IT W AS WELL WITHIN ITS RIGHT NOT TO SHOW INCOME FROM SUCH LOANS, WHICH WERE NON-PERFORMING ASSETS. HOWEVER, THE ASSESSING OFFICER WAS NOT IMPRESSED. ACCORDING TO HIM, MERELY BECAUSE RESERVE BANK OF INDIA DIRECTED THE ASSESSEE TO MAKE CERTAIN PROVISIONS FOR NON-PERFORM ING ASSETS, WOULD NOT MEAN THAT SUCH DIRECTIONS WOULD 11 ITA NOS.2320, 2321, 2481 & 2482/MDS/2014 OVERRIDE MANDATORY PROVISIONS OF INCOME-TAX ACT. RELYING ON THE DECISION OF HON'BLE JURISDICTIONAL H IGH COURT IN THE CASE OF TAMILNADU POWER FINANCE AND INFRASTRUCTURE DEVELOPMENT CORPORATION LTD. (SUPRA) , ASSESSING OFFICER HELD THAT DEDUCTION COULD NOT BE ALLOWED FOR ANY AMOUNTS EXCEEDING 5% OF TOTAL INCOM E IN RESPECT OF PROVISIONS OF BAD AND DOUBTFUL DEBTS. A S PER THE ASSESSING OFFICER, ASSESSEES PLEA THAT BY FOLL OWING CASH BASIS OF ACCOUNTING IN RESPECT OF SUCH LOANS, THERE WAS NO ESCAPEMENT OF TAXABLE INCOME, COULD NOT BE ACCEPTED, SINCE IT WOULD AMOUNT TO POSTPONEMENT OF TAXABLE LIABILITY. FURTHER, AS PER THE A.O., ASSES SEE COULD NOT FURNISH ANY EVIDENCE TO SHOW THAT IT HAD CHANGE D THE METHOD OF ACCOUNTING FROM MERCANTILE SYSTEM TO CASH IN RESPECT OF INTEREST ON SUCH LOANS WITH A VALID LEGA L APPROVAL. IN THIS VIEW OF THE MATTER, HE MADE AN A DDITION OF THE INTEREST AMOUNTS MENTIONED IN SCHEDULE L N OTES ON ACCOUNTS. THIS CAME TO ` 43,02,55,000/- FOR ASSESSMENT YEAR 2003-04, ` 1,65,04,000/- FOR ASSESSMENT YEAR 2008-09 AND ` 44.71 LAKHS FOR ASSESSMENT YEAR 2009-10. 4. IN ITS APPEALS BEFORE CIT(APPEALS) FOR THESE YEA RS, ARGUMENT OF THE ASSESSEE WAS THAT INTERESTS, WHICH WERE NOT CONSIDERED AS INCOME, WERE INTERESTS ON SUCH LO ANS WHICH HAD BECOME NON-PERFORMING ASSETS. AS PER ASSESSEE, ON THESE LOANS, NO INTEREST WAS RECEIVED FOR SIX MONTHS AND PRUDENTIAL NORMS PRESCRIBED BY RESER VE BANK OF INDIA, WHICH WERE MANDATORY FOR NON-BANKING FINANCIAL INSTITUTIONS, CLEARLY RESTRAINED IT FROM RECOGNIZING INTEREST ON NON-PERFORMING ASSETS (NPA IN SHORT). AS PER ASSESSEE, CBDT CIRCULAR NO.401 DATE D 30.6.1987 ALSO MENTIONED THAT STATE FINANCIAL CORPORATIONS WERE GOVERNED BY THE DIRECTIVES OF RES ERVE BANK OF INDIA. CRUX OF THE CONTENTION OF THE ASSES SEE WAS THAT IT, BEING A NON-BANKING FINANCIAL COMPANY, IT WAS BOUND TO FOLLOW PRUDENTIAL NORMS PRESCRIBED BY RBI UNDER RBI ACT AND COULD NOT RECOGNIZE ANY INTEREST ON LOANS WHICH HAD BECOME NPA. RELIANCE WAS PLACED BY THE ASSESSEE ON THE DECISION OF HON'BLE APEX COURT IN THE CASE OF TRO V. CUSTODIAN, SPECIAL COURT ACT, 19 34 (293 ITR 369), FOR ITS SUBMISSION THAT SECTION 45Q OF RBI ACT HAD OVERRIDING EFFECT TO PROVISIONS OF INCOME-T AX ACT. FURTHER, AS PER THE ASSESSEE, ONLY THE REAL INCOME COULD BE TAXABLE UNDER INCOME-TAX ACT AND THERE COULD NOT HAVE BEEN ANY ADDITION FOR UNREALIZED INTEREST ON S TICKY LOANS, SINCE SUCH INTERESTS WERE NEVER CHARGED IN T HE ACCOUNTS AT ALL. CONSIDERABLE RELIANCE WAS PLACED ON THE 12 ITA NOS.2320, 2321, 2481 & 2482/MDS/2014 DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. VASISTHCHAYVAAPAR LTD. ( 330 ITR 440). 5. LD. CIT(APPEALS) WAS APPRECIATIVE OF CONTENTIONS OF THE ASSESSEE. ACCORDING TO HIM, DECISION OF HON BLE DELHI HIGH COURT IN VASISTHCHAYVAAPAR LTD. (SUPRA) WAS APPLICABLE ON ALL FOUR SQUARES, WHEN COMPARED TO TH E FACTS IN ASSESSEESCASE. THERE ALSO THE QUESTION W AS WHETHER A NON-BANKING FINANCIAL COMPANY WAS BOUND BY DIRECTIVES OF RESERVE BANK OF INDIA AND WHETHER AN ASSESSING OFFICER COULD MAKE ADDITION FOR INTEREST ACCRUED ON NON-PERFORMING ASSETS,EVENTHOUGH ASSESSE E HAD NOT ACCOUNTED FOR SUCH INTERESTS. AS PER LD. CIT(APPEALS), HONBLE DELHI HIGH COURT, HAD AFTER CONSIDERING THE DECISION OF HON'BLE APEX COURT IN T HE CASE OF SOUTHERN TECHNOLOGIES LTD. V. JCIT ( 320 ITR 577), HELD THAT NBFCSWERE BOUND TO FOLLOW PRUDENTIAL NORMS PRESCRIBED BY RESERVE BANK OF INDIA SINCE SUCH PRUDENTIAL NORMS WERE ISSUED BY RBI UNDER CHAPTER III OF RBI ACT, 1934. ACCORDING TO LD. CIT(APPEALS), SECTION 45Q OF RBI ACT HAD AN OVERRIDING EFFECT AND THE DIRECTIONS ISSUED UNDER SECTION 45Q CONSTITUTED A CODE BY ITSELF. INSOFAR AS CHARGING OF INTEREST AND PROVISIONING WAS CONCERNED, A NON-BANKING FINANCIAL INSTITUTIONHAD T O FOLLOW SUCH PRUDENTIAL NORMS PRESCRIBED UNDER SECTION 45Q AND HAD NO CHOICE. IN THIS VIEW OF THE MATTER, HE DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER FOR ALL THESE YEARS. 6. NOW BEFORE US, LEARNED D.R., STRONGLY ASSAILING THE ORDERS OF CIT(APPEALS), SUBMITTED THAT ASSESSEE WAS ADMITTEDLY FOLLOWING MERCANTILE SYSTEM OF ACCOUNTIN G. ASSESSEE WAS HAVING AGREEMENTS WITH EACH OF THE PARTIES TO WHOM MONEYS WERE LOANED BY IT. AS PER S UCH AGREEMENTS, INTEREST ACCRUED TO THE ASSESSEE. THE PARTIES WERE LAWFULLY BOUND TO PAY THE ASSESSEE, IN TEREST ON THE MONEY BORROWED BY THEM. ACCRUAL OF INTEREST HAD HAPPENED BASED ON THE AGREEMENTS AND ASSESSEE HAD A LEGAL RIGHT TO CLAIM SUCH AMOUNT FROM THE BENEFICIA RIES OF THE LOANS. THEREFORE, IT COULD NOT SAY THAT THERE WAS NO ACCRUAL OF INTEREST ON SUCH LOANS. THERE WAS NO WR ITE OFF OF ANY BAD DEBT. ONCE AN ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING AND INCIDENCE OF AC CRUAL OF INCOME WAS BASED ON AGREEMENTS, IT COULD NOT SAY THAT BASED ON SOME NORMS OF RESERVE BANK OF INDIA, IT WAS POSSIBLE FOR IT, NOT TO SHOW SUCH INCOME. ACCO RDING TO LEARNED D.R., AUTHORITIES UNDER INCOME-TAX ACT W ERE NOT BOUND BY THE PRUDENTIAL NORMS PRESCRIBED BY 13 ITA NOS.2320, 2321, 2481 & 2482/MDS/2014 RESERVE BANK OF INDIA. IN THE CASE OF SOUTHERN TECHNOLOGIES LTD. (SUPRA), HON'BLE APEX COURT HAD CLEARLY HELD THAT RBI DIRECTIVES WERE ONLY IN THE C ONTEXT OF PRESENTATION OF NPA IN THE BALANCE SHEETS. BALANCE SHEET OF AN NBFC HAD NOTHING TO DO WITH TAXABLE INC OME. AS PER LEARNED D.R., THEIR LORDSHIP IN THE CASE OF SOUTHERN TECHNOLOGIES LTD. (SUPRA) CLEARLY OBSERVED THAT NATURE OF EXPENDITURE UNDER INCOME-TAX ACT COULD NO T BE CONCLUSIVELY DETERMINED BY THE MANNER IN WHICH ACCOUNTS WERE PRESENTED BASED ON RBI DIRECTIVES. THEREFORE, ACCORDING TO LEARNED D.R., PROVISION FOR NPA WAS TO BE FOLLOWED BY THE ASSESSEE ONLY FOR PRESENT ATION OF ACCOUNTS UNDER RBI DIRECTIVES. HOWEVER, FOR INC OME- TAX ACT, IT WAS BOUND TO SHOW ITS INCOME BASED ON T HE METHOD OF ACCOUNTING FOLLOWED. RELIANCE WAS PLACED ON THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF UNITED NILAGIRI TEA ESTATES CO. V. DCIT [TC (A) NO.278 OF 2006 DATED 17.7.2012]. ACCORDING TO HIM, IN THIS CASE, HONBLE JURISDICTIONAL HIGH COURT HAD CL EARLY HELD THAT WHEN AN ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING, BASED ON ACCRUAL THEORY OF INCOME, INTEREST INCOME WAS TO BE ASSESSED IN THE Y EAR IT HAD ACCRUED AND BECAME DUE. 7. PER CONTRA, LEARNED A.R., STRONGLY SUPPORTING TH E ORDERS OF CIT(APPEALS), SUBMITTED THAT THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF UN ITED NILAGIRI TEA ESTATES CO. (SUPRA) WAS NOT WITH REFER ENCE TO A PROVISION OR WRITE OFF MADE BY A NON-BANKING FINA NCIAL COMPANY. THE SAID COMPANY WAS NOT A NBFC AT ALL. THE QUESTION WHETHER AN NBFC, WHICH WAS REGULATED B Y RBI AND WAS TO FOLLOW THE PRUDENTIAL NORMS, WAS BOU ND TO SHOW ACCRUAL OF INTEREST INCOME ON NON-PERFORMIN G ASSETS, ACCORDING TO LEARNED A.R., STOOD ALREADY ANSWERED BY THE HONBLE DELHI HIGH COURT IN THE CAS E OF VASISTH CHAY VAAPAR LTD. (SUPRA). AS PER LEARNED A.R., THEIR LORDSHIP, FOR DECIDING THE CASE, HAD TAKEN IN TO CONSIDERATION JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF SOUTHERN TECHNOLOGIES LTD. (SUPRA). ACCORD ING TO HER, LD. CIT(APPEALS) WAS JUSTIFIED IN ALLOWING THE APPEAL OF THE ASSESSEE BY DELETING THE ADDITIONS MA DE BY THE A.O. 8. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. THERE IS NO DISPUTE THAT ASSESSEE IS A NON-BANKING FINANCIAL COMPANY. THERE CANNOT ALSO B E A DISPUTE THAT BEING A NON-BANKING FINANCIAL COMPAN Y, ASSESSEE WAS BOUND BY RBI DIRECTIVES. PRUDENTIAL NORMS HAVING BEEN PRESCRIBED BY RESERVE BANK OF IND IA, 14 ITA NOS.2320, 2321, 2481 & 2482/MDS/2014 BY VIRTUE OF POWER VESTED IN IT UNDER RBI ACT, ASSE SSEE WAS BOUND TO FOLLOW SUCH PRUDENTIAL NORMS. NO DOUB T, HON'BLE APEX COURT IN THE CASE OF SOUTHERN TECHNOLOGIES LTD. (SUPRA) HAD HELD THAT THE RESERVE BANK OF INDIA DIRECTIONS, 1998 WAS ONLY IN THE CONT EXT OF PRESENTATION OF NPA IN THE BALANCE SHEET AND SUCH DIRECTIONS OPERATED IN A TOTALLY DIFFERENT FIELD TH AN OF INCOME-TAX ACT, 1961. IT HAS ALSO BEEN HELD BY HON 'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF UNITED NIL AGIRI TEA ESTATES CO. (SUPRA) THAT AN ASSESSEE FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING HAD TO SHOW INTERES T INCOME IN THE YEAR IN WHICH IT HAD ACCRUED. HOWEVE R, THERE IS A FINE DISTINCTION, IN OUR OPINION, BETWEE N A PROVISION MADE FOR BAD DEBTS BASED ON THE PRUDENTIA L NORMS, BY A NON-BANKING FINANCIAL COMPANY AND NON- CHARGING OF INTEREST ON NPA IN THE BOOKS OF ACCOUNT S BY A NON-BANKING FINANCIAL COMPANY. ADMITTEDLY, HERE THE ASSESSEE WAS PROVIDING LOANS TO ITS CLIENTS AS ALSO SEED CAPITAL ASSISTANCE. CONTENTION OF THE ASSESSE E THAT LOANS ON WHICH INTERESTS WERE NOT RECEIVED FOR A PE RIOD OF SIX MONTHS BECAME NON-PERFORMING ASSET, AS PER THE PRUDENTIAL NORMS, IS ALSO IN CONSONANCE WITH THE PRUDENTIAL NORMS. BUT, HERE WHAT HAS BEEN ADDED BY THE ASSESSING OFFICER IS NOT ANY INTEREST REVERSAL DONE BY THE ASSESSEE OR ANY PROVISION MADE IN THE ACCOUNTS FOR NON-PERFORMING ASSETS. IT IS NOT EQUIVALENT TO A C ASE WHERE ASSESSEE HAD ALREADY CHARGED INTEREST ON LOAN S IN ITS BOOKS AND THEREAFTER REVERSED SUCH INTEREST, FI NDING ITS RECOVERY TO BE DIFFICULT OR BASED ON PRUDENTIAL NOR MS. ON THE OTHER HAND, IT IS A CASE WHERE THE ASSESSEE DID NOT CHARGE ANY INTEREST IN ITS ACCOUNTS ON NON-PERF ORMING ASSETS AT ALL. IT IS NOT DISPUTED THAT UNDER THE P RUDENTIAL NORMS PRESCRIBED FOR NON-BANKING FINANCIAL COMPANIE S, INTEREST COULD NOT HAVE BEEN RECOGNIZED ON NON- PERFORMING ASSETS. HON'BLE APEX COURT IN THE CASE OF SOUTHERN TECHNOLOGIES LTD. (SUPRA) WAS DEALING WITH A CASE WHERE ASSESSEE HAD BAD DEBTS AND HAD CLAIMED DEDUCTION UNDER SECTION 36(1)(VII) OF THE ACT. IN OUR OPINION, THIS CANNOT BE EQUATED WITH AN ASSESSEE WH ICH HAS NOT CHARGED INTEREST IN ITS BOOKS OF ACCOUNTS. IN OUR OPINION, LEARNED A.R. IS RIGHT IN HER ARGUMENT THAT HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF UN ITED NILAGIRI TEA ESTATES CO. (SUPRA) WAS DEALING WITH A N ASSESSEE WHICH WAS NOT A NON-BANKING FINANCIAL COMPANY. AN ASSESSEE WHICH IS NOT A NON-BANKING FINANCIAL COMPANY IS NOT BOUND BY ANY PRUDENTIAL NORMS OR RBI REGULATIONS. THEREFORE, THE QUESTION OF RBI REGULATIONS HAVE OVERRIDING EFFECT ON THE METHO D OF ACCOUNTING OF INCOME DID NOT ARISE THERE AT ALL. H ENCE, IN 15 ITA NOS.2320, 2321, 2481 & 2482/MDS/2014 OUR OPINION, THIS CASE WILL NOT HELP THE REVENUE IN ANY WAY. ON THE OTHER HAND, A LOOK AT THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF VASISTH CHA Y VAAPAR LTD. (SUPRA) CLEARLY SHOWS THAT AN ADDITION CANNOT BE MADE FOR INTEREST INCOME THAT HAS NOT BEEN RECOGNIZED BY THE ASSESSEE IN ITS BOOKS BASED ON TH E PRINCIPLES OF ACCRUAL, WHERE THE ASSESSEE CONCERNED IS A NON-BANKING FINANCIAL COMPANY BOUND BY THE DIRECTIO NS OF RBI. HONBLE DELHI HIGH COURT HAD TAKEN THIS VI EW AFTER DULY CONSIDERING THE DECISION OF HON'BLE APEX COURT IN THE CASE OF SOUTHERN TECHNOLOGIES LTD. (SUPRA). WE ARE, THEREFORE, OF THE OPINION THAT LD. CIT(APPEALS ) WAS JUSTIFIED IN RELYING ON THE DECISION OF HONBLE DEL HI HIGH COURT IN THE CASE OF VASISTH CHAY VAAPAR LTD. (SUPR A) AND DELETING THE ADDITIONS MADE BY THE ASSESSING OFFICER. NO INTERFERENCE IS REQUIRED. 9. APPEALS OF THE REVENUE FOR ASSESSMENT YEARS 2003-04, 2008-09 AND 2009-10 ARE DISMISSED. 14. SINCE THE FACTS AND CIRCUMSTANCES OF THE CASE B EING IDENTICAL, RESPECTFULLY FOLLOWING THE SAID DECISION OF THIS TRIBUNAL, WE SUSTAIN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING THE ADDITION MADE TOWARDS UNREALIZED /ACCRUED INTEREST AND REJECT THE GROUNDS RAISED BY THE REVENUE ON THIS ISSUE. THE APPEAL OF THE REVENU E IS DISMISSED. ITA NO.2321/MDS/2014 (A.Y.2007-08):- 15. NOW, WE TAKE UP THE ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2007-08. THE FIRST GROUND IN THE AS SESSEES APPEAL IS WITH REGARD TO REOPENING OF ASSESSMENT . IT IS 16 ITA NOS.2320, 2321, 2481 & 2482/MDS/2014 CONTENDED THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT ACCEPTING THE CHALLENGE TO ASSUME JURISDICTI ON UNDER SECTION 147 FOR REOPENING OF ASSESSMENT. IT IS CON TENDED BY THE ASSESSEE THAT REOPENING OF ASSESSMENT IS BAD IN LAW AND BARRED BY LIMITATION AND THE ASSESSMENT IS LIABLE T O BE CANCELLED. 16. THIS GROUND APPEARS TO HAVE NOT RAISED BEFORE T HE COMMISSIONER OF INCOME TAX (APPEALS) AND THE ASSES SEE IS RAISING THIS PLEA FOR THE FIRST TIME BEFORE THIS TR IBUNAL. ON MERITS, THE ASSESSEE CONTENDS THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN REJECTING THE GROUNDS OF APP EAL RELATING TO ADDITION MADE TOWARDS BAD DEBTS WRITTEN OFF. THE ASSESSEES PRELIMINARY GROUND IS IN RESPECT OF REOP ENING OF ASSESSMENT AND REOPENING IS BAD IN LAW AND BARRED B Y LIMITATION. THE PRELIMINARY GROUND IS PURELY A LEGA L GROUND NOT RAISED BEFORE THE COMMISSIONER OF INCOME TAX (APPEA LS). INSOFAR AS THE ADDITION SUSTAINED BY THE COMMISSION ER OF INCOME TAX (APPEALS) TOWARDS BAD DEBTS WRITTEN OFF , THE COMMISSIONER OF INCOME TAX (APPEALS) SUSTAINED THE ADDITION STATING THAT AMOUNT WRITTEN OFF IN THE ACC OUNTS IS NOT TRADE DEBT AND IT IS IN THE NATURE OF CAPITAL DEBT FOR THE REASON 17 ITA NOS.2320, 2321, 2481 & 2482/MDS/2014 THAT ASSESSEE HAS NOT PROVED THAT MONEY ADVANCED B Y THE ASSESSEE WAS OFFERED TO TAX OR ACCOUNTED AS INCOME IN THE EARLIER YEARS. IT WAS THE FINDING OF THE COMMISSIO NER OF INCOME TAX (APPEALS) THAT ASSESSEE DID NOT SHOW AS TO WHETHER THE AMOUNTS WRITTEN OFF WERE ACCOUNTED AS I NCOME IN THE EARLIER YEAR OR CURRENT YEAR. THEREFORE, COMMIS SIONER OF INCOME TAX (APPEALS) SUSTAINED THE ADDITION IN RESP ECT OF BAD DEBTS WRITTEN OFF. FOR THE ASSESSMENT YEAR 200 5-06, WE HAVE ALREADY RESTORED THE ISSUE TO THE FILE OF THE COMMISSIONER OF INCOME TAX (APPEALS) TO ADJUDICATE THE BAD DEBTS WRITTEN OFF AND DISALLOWANCE MADE UNDER SECTI ON 14A. SINCE THE OUTCOME OF ASSESSMENT YEAR 2005-06 HAS BE ARING ON THIS ASSESSMENT YEAR, WE ARE OF THE VIEW THAT TH IS MATTER ALSO BE RESTORED TO THE FILE OF THE COMMISSIONER OF INCOME TAX (APPEALS) FOR FRESH ADJUDICATION ALONG WITH THE APPEAL FOR THE ASSESSMENT YEAR 2005-06. THUS, WE RESTORE THE I SSUES TO THE FILE OF THE COMMISSIONER OF INCOME TAX (APPEALS ) FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW, AFTER PR OVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE. APPEAL OF TH E ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . 18 ITA NOS.2320, 2321, 2481 & 2482/MDS/2014 ITA NO.2482/MDS/2014 (A.Y.2010-11):- 17. THE ONLY ISSUE REMAINS IN THE APPEAL OF THE REV ENUE FOR THE ASSESSMENT YEAR 2010-11 IS THAT THE COMMISS IONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER TOWARDS UNREALIZED INTEREST. AS WE HAVE ALREADY DELETED THIS ADDITION FOLLOWING THE DE CISION OF CO-ORDINATE BENCH IN ASSESSEES OWN CASE FOR THE E ARLIER ASSESSMENT YEARS IN PARA 13 & 14 HEREINABOVE, WE DE LETE THIS ADDITION FOR THE ASSESSMENT YEAR 2010-11 ALSO. THUS THE APPEAL OF THE REVENUE IS DISMISSED. 18. TO SUM UP, APPEAL OF THE ASSESSEE IN ITA NO.2320/MDS/2014 IS ALLOWED FOR STATISTICAL PURPOSE S AND ITA NO.2321/MDS/2014 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. AND BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER, 2015. SD/- SD/- ( . ) ( ! ) ( A.MOHAN ALANKAMONY ) ( CHALLA NAGENDRA PRASAD ) # / ACCOUNTANT MEMBER % # / JUDICIAL MEMBER /CHENNAI, ' /DATED 30 TH SEPTEMBER, 2015 SOMU !%*+ -+ /COPY TO: 1. ASSESSEE 2. ASSESSING OFFICER 3. . () /CIT(A) 4. . /CIT 5. + !%%1 /DR 6. 4 /GF .