The ACIT, Circle-8, Ahmedabad V. The Serendipity Apparels(P) Ltd., Ahmedabad

ITA 2501/AHD/2010

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9728 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 15-12-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 11-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N SOPARKAR
• Keywords: Business income; Depreciation; Additional depreciation; Additional evidence; Unabsorbed depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 2438 & 2501/AHD/2010 (ASSESSMENT YEAR: 2006-07) THE SERENDIPITY APPARELS PVT.LTD. ARVIND MILLS PREMISES NARODA ROAD, AHMEDABAD ACIT, CIRCLE-8, AHMEDABAD V/S V/S INCOME TAX OFFICER, WARD- 8 (4), AHMEDABAD THE SERENDIPITY APPARELS PVT. LTD. ARVIND MILLS PREMISES NARODA ROAD, AHMEDABAD (APPELLANT) (RESPONDENT) ITA. NOS: 2211/AHD/2012 & 1885/AHD/2013 (ASSESSMENT YEARS: 2009-10 & 2010-11) ACIT, CIRCLE-8, AHMEDABAD DCIT, (OSD), CIRCLE-8, AHMEDABAD V/S V/S THE SERENDIPITY APPARELS PVT. LTD. ARVIND MILLS PREMISES NARODA ROAD, AHMEDABAD THE SERENDIPITY APPARELS PVT. LTD. ARVIND MILLS PREMISES NARODA ROAD, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAACT7017N ITA NOS. 2438 & 2501/AHD/2010 AND ORS. . A.YS. 2006-07, 2 009-10 & 2010-11 2 APPELLANT BY: SHRI S. N. SOPARKAR & PARIN SHAH, A R RESPONDENT BY: SHRI PRASOON KABRA, SR. D.R. ( )/ ORDER DATE OF HEARING : 15-12-2016 DATE OF PRONOUNCEMENT : 19 -12-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. ITA NOS. 2438/AHD/2010 AND 2501/AHD/2010 ARE APPEAL S BY THE ASSESSEE AND THE REVENUE DIRECTED AGAINST THE ORDER OF THE L D. CIT(A)-XIV, AHMEDABAD DATED 18.05.2010 PERTAINING TO A.Y. 2006- 07. ITA NO. 2211/AHD/2012 IS THE APPEAL BY THE REVENUE PREFERRE D AGAINST THE ORDER OF THE LD. CIT(A)-XIV, AHMEDABAD DATED 10.07.2012 PERT AINING TO A.Y. 2009-10 AND ITA NO. 1885/AHD/2013 IS THE APPEAL BY THE REVE NUE AGAINST THE ORDER OF THE LD. CIT(A)-XIV, AHMEDABAD DATED 25.04.2014 P ERTAINING TO A.Y. 2010- 11. 2. AS COMMON ISSUES ARE INVOLVED IN ALL THESE APPEALS, THESE WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER F OR THE SAKE OF CONVENIENCE. 3. THE CONTENTIOUS ISSUES RELATE TO THE TAXABILITY OF THE LEASE RENTAL INCOME UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PR OFESSION OR UNDER THE HEAD INCOME FROM OTHER SOURCES. THE ISSUES RELATI NG TO THE ALLOWABILITY OF DEPRECIATION, ADDITIONAL DEPRECIATION, SET OFF OF U NABSORBED DEPRECATION ITA NOS. 2438 & 2501/AHD/2010 AND ORS. . A.YS. 2006-07, 2 009-10 & 2010-11 3 AND ALLOWABILITY OF INTEREST EMANATE FROM THE MAIN ISSUE OF TAXABILITY OF RENTAL INCOME. 4. THE ASSESSEE IN ITS APPEAL IN ITA NO. 2438/AHD/2010 HAS ALSO CHALLENGED THE SERVICE OF NOTICE U/S. 143(2) OF THE ACT AS BAR RED BY LIMITATION. THE LD. SENIOR COUNSEL FAIRLY CONCEDED THAT THIS ISSUE IS N OT PRESSED; THEREFORE, THE SAME IS DISMISSED AS NOT PRESSED. THE ASSESSEE HAS ALSO CHALLENGED THE TAXABILITY OF THE RENTAL INCOME UNDER THE HEAD INC OME FROM OTHER SOURCES. IT IS THE CLAIM OF THE ASSESSEE THAT THE INCOME FROM LEASE RENTAL SHOULD HAVE BEEN TAXED UNDER THE HEAD PROFIT AND G AINS OF BUSINESS OR PROFESSION. SUBSEQUENT CONDUCT OF THE ASSESSEE PRO MPTS US TO DISMISS THIS GRIEVANCE OF THE ASSESSEE BECAUSE IN SUBSEQUENT YEA RS, THE ASSESSEE ITSELF HAS SHOWN THE LEASE RENTAL INCOME UNDER HEAD INCOM E FROM OTHER SOURCES. THEREFORE, WITHOUT GOING INTO THE MERITS OF THIS CLAIM OF THE ASSESSEE AND CONSIDERING THE SUBSEQUENT CONDUCT OF THE ASSESSEE, THIS GRIEVANCE OF THE ASSESSEE IS ALSO DISMISSED. 5. NOW WE WILL CONSIDER THE ALLOWABILITY OF DEPRECIATI ON, ADDITIONAL DEPRECIATION AND CARRY FORWARD OF UNABSORBED DEPREC IATION. 6. RIVAL CONTENTIONS HAVE BEEN HEARD AT LENGTH. WE HAV E GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELO W AND WITH THE ASSISTANCE OF THE LD. SENIOR COUNSEL; WE HAVE GONE THROUGH THE RELEVANT DOCUMENTARY EVIDENCES BROUGHT ON RECORD IN THE FORM OF PAPER BO OK IN THE LIGHT OF RULE 18(6) OF THE INCOME TAX APPELLATE TRIBUNAL RULES. ITA NOS. 2438 & 2501/AHD/2010 AND ORS. . A.YS. 2006-07, 2 009-10 & 2010-11 4 7. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF FABRICS ON JOB WORK BASIS. DURING THE PREVIOUS YEAR 2005-06, THE ASSESSEE COMPANY HAS LEASED OUT ITS ENTIRE UNIT I.E. FACTORY BUILDING, OTHER ERECTIONS AND PLANT AND MACHINERY AND ALL OTHER FIXTURES AND FITTINGS, ETC. TO ARVIND MILLS LTD. WITH EFFECT FROM 01.10.2005 FOR A PERIOD OF 8 YEARS AT MONTHLY RENT OF RS. 8.33 LACS. PRIOR TO THIS, THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF MANUFACTURING OF FABRICS ON JOB WORK BASIS. IN A .Y. 2006-07, THE A.O. TREATED THE LEASE RENTAL INCOME CHARGEABLE TO TAX U NDER THE HEAD INCOME FROM OTHER SOURCES U/S. 56(2)(III) AND NOT AS BUSI NESS INCOME. IN SUBSEQUENT YEARS, WHICH ARE ALSO UNDER APPEAL BEFOR E US, THE ASSESSEE ITSELF HAS SHOWN THE RENTAL INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. THE ISSUE RELATING TO THE HEAD OF INCOME IS NOW SETTLED BY THE ACT OF THE ASSESSEE. 8. THE A.O. DISALLOWED THE CLAIM OF DEPRECIATION AND A LSO DISALLOWED THE CLAIM OF ADDITIONAL DEPRECIATION. 9. IT IS NOT IN DISPUTE THAT THE LEASE RENTAL INCOME H AS BEEN TAXED UNDER THE HEAD INCOME FROM OTHER SOURCES. THE RELEVANT PROV ISION INVOKED BY THE A.O. IS SECTION 56(II) AND (III) OF THE ACT, WHICH READS AS UNDER:- (II) INCOME FROM MACHINERY, PLANT OR FURNITURE BELO NGING TO THE ASSESSEE AND LET ON HIRE, IF THE INCOME IS NOT CHARGEABLE TO INCOME- TAX UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION; (III) WHERE AN ASSESSEE LETS ON HIRE MACHINERY, PLA NT OR FURNITURE BELONGING TO HIM AND ALSO BUILDINGS, AND THE LETTING OF THE BUILDING IS INSEPARABLE FROM THE LETTING ITA NOS. 2438 & 2501/AHD/2010 AND ORS. . A.YS. 2006-07, 2 009-10 & 2010-11 5 OF THE SAID MACHINERY, PLANT OR FURNITURE, THE INCO ME FROM SUCH LETTING, IF IT IS NOT CHARGEABLE TO INCOME-TAX UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION. 10. SECTION 57 ALLOWS CERTAIN DEDUCTIONS FROM SUCH INCO ME. UNDER CLAUSE (II) OF SECTION 57 IT IS PROVIDED THAT ONLY IN CASES FALLIN G UNDER CLAUSES (II) AND (III) OF SUB-SECTION 2 OF SECTION 56, DEDUCTIONS U/S. 30, 31 AND 32 OF THE ACT WOULD BE ALLOWED. 11. THE MAIN CONTENTION OF THE REVENUE IN DISALLOWING T HE CLAIM OF DEPRECIATION IS THAT SECTION 30, 31 & 32 FALL UNDER PART B OF TH E ACT WHICH DEAL WITH THE COMPUTATION OF INCOME UNDER THE HEAD PROFITS AND G AINS OF BUSINESS OR PROFESSION. 12. WE FIND THAT UNDER CLAUSES (II) AND (III) OF SECTIO N 57 IN CASES OF INCOME ARISING OUT OF HIRING OF MACHINERY, PLANT AND FURNI TURE, THE LEGISLATURE INTENDED TO CONFER THE SAME BENEFIT ON THE SAME TER MS AS WAS AVAILABLE IN RESPECT OF INCOME UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION ON ACCOUNT OF CERTAIN SPECIFIED ITEMS O F EXPENDITURE OR DEDUCTION. THE SCHEME APPEARED TO BE NOT TO ALLOW ALL DEDUCTIONS AVAILABLE FOR COMPUTING THE INCOME UNDER THE HEAD ' PROFITS AND GAINS OF BUSINESS OR PROFESSION' IN RESPECT OF INCOME ARISIN G OUT OF LETTING OUT OF PLANT, MACHINERY AND FURNITURE BUT TO ALLOW DEDUCTI ONS UNDER CERTAIN SPECIFIED HEADS WHICH HAD A DIRECT RELATIONSHIP WIT H PLANT, MACHINERY, ETC. THE DEDUCTIONS ALLOWED WERE IN THE NATURE OF EXPEND ITURE ON ACCOUNT OF REPAIRS, INSURANCE AND ALSO DEDUCTION IN RESPECT OF DEPRECIATION ON THE ITA NOS. 2438 & 2501/AHD/2010 AND ORS. . A.YS. 2006-07, 2 009-10 & 2010-11 6 PLANT AND MACHINERY. WHETHER THE INCOME FROM SUCH P LANT AND MACHINERY AROSE UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION' OR 'INCOME FROM OTHER SOURCES', THE INTENTION OF THE L EGISLATURE WAS TO CONFER THE SAME BENEFITS ON ACCOUNT OF EXPENDITURE DIRECTL Y CONNECTED WITH THE PLANT AND MACHINERY. UNDER SECTION 57, THE APPLICAB ILITY OF SECTION 32 WAS NOT RESTRICTED TO SUB-SECTION (I) OF THE SAID LATTE R SECTION. SUB-SECTION (2) OF SECTION 32 WAS ALSO SPECIFICALLY INCLUDED. BY REASO N OF THE EXPRESS PROVISION OF SECTION 57, THE CONTENTION OF THE REVENUE THAT U NABSORBED DEPRECIATION RELATING TO PLANT AND MACHINERY FOR THE EARLIER YEA RS CANNOT BE ALLOWED WOULD BE CONTRARY TO THE EXPRESS PROVISIONS OF SECT ION 57 AND WOULD RENDER THE INCLUSION OF SECTION 32(2) IN SECTION 57 REDUND ANT. THIS INTERPRETATION SHOULD NOT BE FOLLOWED. 13. THE HONBLE SUPREME COURT IN THE CASE OF SMT. TARUL ATA SHYAM AND OTHERS 108 ITR 345 HAS LAID DOWN THE RATIO THERE IS NO SCOPE FOR IMPORTING INTO THE STATUTE W ORDS WHICH ARE NOT THERE. SUCH IMPORTATION WOULD BE NOT TO CONSTRUE, BUT TO AMEND, THE STATUTE. EVEN IF THERE BE A CASUS OMISSUS THE DEFECT CAN BE REMEDIED ONLY BY LEGISLATION AND NOT BE JUDICIAL INTERPRETATION. 14. THE HONBLE SUPREME COURT IN THE CASE OF PADMASUNDA RA RAO AND OTHERS IN 255 ITR 147 HAS HELD THE COURT CANNOT READ ANYTHING INTO A STATUTORY PR OVISION WHICH IS PLAIN AND UNAMBIGUOUS. A STATUTE IS THE EDICT OF THE LEGISLAT URE. THE LANGUAGE EMPLOYED IN ITA NOS. 2438 & 2501/AHD/2010 AND ORS. . A.YS. 2006-07, 2 009-10 & 2010-11 7 A STATUTE IS THE DETERMINATIVE FACTOR OF LEGISLATIV E INTENT. THE FIRST AND PRIMARY RULE OF CONSTRUCTION IS THAT THE INTENTION OF THE L EGISLATION MUST BE FOUND IN THE WORDS USED BY THE LEGISLATURE ITSELF. THE COURT ONLY INTERPRETS THE LAW AND CANNOT LEGISL ATE. IF A PROVISION OF LAW IS MISUSED AND SUBJECTED TO THE ABUSE OF THE PROCESS O F LAW, IT IS FOR THE LEGISLATURE TO AMEND, MODIFY OR REPEAL IT, IF DEEMED NECESSARY. LEGISLATIVE CASUS OMISSUS CANNOT BE SUPPLIED BY JUDICIAL INTERPRETATIVE PROCE SS. 15. THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN BULK CARRIERS 259 ITR 449 PP 465 HAS HELD THE PROVISION OF ONE SECTION OF THE STATUTE CANNOT BE USED TO DEFEAT THOSE OF ANOTHER UNLESS IT IS IMPOSSIBLE TO EFFECT RECONCILI ATION BETWEEN THEM. THUS A CONSTRUCTION THAT REDUCES ONE OF THE PROVISIONS TO A USELESS LUMBER OR DEAD LETTER IS NOT A HARMONIZED CONSTRUCTION. TO HARMON ISE IS NOT TO DESTROY. 16. COMING BACK TO THE ALLOWABILITY OF DEPRECIATION FRO M THE INCOME TAXED UNDER THE HEAD INCOME FROM OTHER SOURCES IN THE L IGHT OF THE AFORE-STATED DISCUSSIONS, IN OUR CONSIDERED OPINION, THE A.O. OU GHT TO HAVE ALLOWED DEPRECIATION AS PER THE PROVISIONS OF THE LAW. 17. SECTION 32 (1) (IIA) CONTAINS THE PROVISIONS FOR TH E ALLOWABILITY OF ADDITIONAL DEPRECIATION. AS MENTIONED ELSEWHERE, U/S. 57(II) D EDUCTIONS ARE ALLOWED AS PROVIDED IN SECTIONS 30, 31 & 32 OF THE ACT AND SIN CE THE LEGISLATURE HAS NOT SPECIFIED ANY PROVISION IN RESPECT OF ANY SUB-CLAUS E IN THESE SECTIONS, ALL THE DEDUCTIONS PROVIDED IN THESE SECTIONS HAVE TO BE AL LOWED ACCORDINGLY. THE ITA NOS. 2438 & 2501/AHD/2010 AND ORS. . A.YS. 2006-07, 2 009-10 & 2010-11 8 RATIOS LAID DOWN BY THE HONBLE SUPREME COURT MENTI ONED ELSEWHERE SQUARELY APPLY TO THIS ISSUE ALSO. WE ACCORDINGLY H ELD THAT THE ASSESSEE IS ENTITLED FOR ADDITIONAL DEPRECIATION AND THE A.O. I S DIRECTED ACCORDINGLY. 18. THE NEXT CLAIM OF THE ASSESSEE IS THAT THE UNABSORB ED DEPRECIATION. REFERABLE TO THE INCOME FROM LEASE RENT SHOULD BE C ARRIED FORWARD EVEN IF THE LEASE RENTAL INCOME IS TREATED AS INCOME FROM O THER SOURCES. 19. IN OUR UNDERSTANDING OF THE LAW, THE PRESCRIBED PER CENTAGE OF DEPRECIATION UNDER SECTION 32(1) IN ANY EVENT HAD TO BE ALLOWED SO FAR AS CURRENT DEPRECIATION WAS CONCERNED IRRESPECTIVE OF THE FACT WHETHER THE ASSETS WERE YIELDING INCOME UNDER THE HEAD 'PROFITS AND GA INS OF BUSINESS OR PROFESSION' OR 'INCOME FROM OTHER SOURCES'. THE DEP RECIATION SHOULD BE CALCULATED AT THE PRESCRIBED PERCENTAGE OF THE WRIT TEN DOWN VALUE OF THE ASSETS. THE PRESCRIBED PERCENTAGE WAS THE SAME WHET HER THE INCOME AROSE UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PR OFESSION' OR 'INCOME FROM OTHER SOURCES'. 20. THE EXPRESSION 'WRITTEN DOWN VALUE' WAS DEFINED IN SECTION 43(6) OF THE ACT AND IN THE CASE OF ASSETS ACQUIRED BEFORE THE P REVIOUS YEARS MEANT THE ACTUAL COST TO THE ASSESSEE OF THE SAID ASSETS LESS ALL DEPRECIATION ACTUALLY ALLOWED TO HIM UNDER THIS ACT OR THE EARLIER ACT OR ANY ACT REPEALED BY THAT ACT OR UNDER ANY EXECUTIVE ORDERS. WHILE DENNING TH E WRITTEN DOWN VALUE, THE ACT PROVIDED FOR DEDUCTIONS ACTUALLY ALLOWED UN DER ANY ACT, CURRENT OR REPEALED, AND THE DEFINITION OF WRITTEN DOWN VALUE WAS ALSO APPLICABLE ITA NOS. 2438 & 2501/AHD/2010 AND ORS. . A.YS. 2006-07, 2 009-10 & 2010-11 9 WHERE THE INCOME OF THE ASSETS WAS COMPUTED UNDER T HE HEAD 'INCOME FROM OTHER SOURCES'. 21. WE HAVE NOTED THE DEFINITIONS OF 'ACTUALCOST' AND ' WRITTEN DOWN VALUE' IN SECTION 43. WE ACCEPT THE SUBMISSIONS MADE ON BEHAL F OF THE ASSESSEE THAT IF THE UNABSORBED DEPRECIATION IS NOT ALLOWED TO BE DEDUCTED, THE ASSETS WHICH REMAIN THE SAME WHETHER USED IN BUSINESS AND YIELDING INCOME FROM THE BUSINESS OR WHETHER THEY ARE LET OUT AND EARN I NCOME FROM OTHER SOURCES, THERE WILL BE AN ANOMALY AS THE SAME ASSET S WOULD HAVE DIFFERENT WRITTEN DOWN VALUES AND DIFFERENT RATES OF DEPRECIA TION FOR THE PURPOSE OF DEDUCTIONS UNDER SECTION 57 THAN THAT WHICH WOULD B E COMPUTED IF THE ASSETS EARN BUSINESS INCOME. READING THE RELEVANT S ECTIONS, IT APPEARS THAT THE SCHEME OF THE ACT IS THAT THE WRITTEN DOWN VALU E AND ACTUAL COST FOR THE PURPOSE OF SECTIONS 32AND 57 ARE MEANT TO BE ONE AN D THE SAME. 22. WE ACCORDINGLY DIRECT THE A.O. TO ALLOW THE UNABSOR BED DEPRECIATION TO BE CARRIED FORWARD AS PER THE PROVISIONS OF THE LAW. 23. THE NEXT CLAIM OF THE ASSESSEE RELATES TO THE DEDUC TIONS OF INTEREST ON PRO- RATA BASIS IN A.Y. 2006-07. 24. WE FIND THAT THE A.O. HAS ALLOWED THE CLAIM OF INTE REST IN TOTO BUT ONLY FROM THE HEAD INCOME FROM OTHER SOURCES BY DISALLOWING THE SAME FROM THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION. ITA NOS. 2438 & 2501/AHD/2010 AND ORS. . A.YS. 2006-07, 2 009-10 & 2010-11 10 25. WE FIND THAT IN A.Y. 2006-06, THE ASSESSEE HAS DONE THE BUSINESS FOR SOME PART OF THE YEAR WHICH INCOME HAS BEEN TAXED UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION. IN OUR CONSIDERED OPINION, THE INTEREST SHOULD HAVE BEEN ALLOWED ON PRO RATA BASIS. WE ACCO RDINGLY DIRECT THE A.O. TO DEDUCT INTEREST PROPORTIONATELY FROM THE INCOME TAXED UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION AND INCOME FROM OTHER SOURCES. WE HOLD ACCORDINGLY. 26. FOR THE SIMILAR REASONS THE DEPRECIATION NEED TO BE BIFURCATED PROPORTIONATELY IN A.Y. 2006-07 BETWEEN THE HEADS PROFITS AND GAINS OF BUSINESS OR PROFESSION AND INCOME FROM OTHER SOUR CES. 27. WE SUMMARIZE OUR FINDINGS AS UNDER:- (I) THE LEASE RENTAL INCOME HAS TO BE TAXED UNDER T HE HEAD INCOME FROM OTHER SOURCES. (II) THE ASSESSEE IS ENTITLED FOR DEPRECIATION AS P ER THE PROVISIONS OF THE LAW. (III) THE ASSESSEE IS ALSO ENTITLED FOR ADDITIONAL DEPRECIATION AS PER THE PROVISIONS OF THE LAW. (IV) IN A.Y. 2006-07, THE A.O. MUST ALLOW THE DEDUC TION OF INTEREST AND DEPRECIATION PROPORTIONATELY BETWEEN THE TWO HEADS OF INCOME. 28. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED AND THE APPEALS OF THE REVENUE ARE DISMISSED. ITA NOS. 2438 & 2501/AHD/2010 AND ORS. . A.YS. 2006-07, 2 009-10 & 2010-11 11 29. BEFORE PARTING IN ITA NO. 2501/AHD/2010, THE REVENU E HAS ALSO CHALLENGED THE ADMISSIBILITY OF ADDITIONAL EVIDENCES IN VIOLAT ION OF RULE 46A BY THE LD. CIT(A) INSOFAR AS THE CLAIM OF ADDITIONAL DEPRECIAT ION IS CONCERNED. SINCE, WE HAVE HELD THIS ISSUE IN FAVOUR OF THE ASSESSEE A ND AGAINST THE REVENUE, WE DO NOT FIND ANY MERIT IN THIS GRIEVANCE OF THE R EVENUE. WE DECIDE ACCORDINGLY. 30. BEFORE CLOSING AND FOR THE SAKE OF THE COMPLETENESS OF THE ADJUDICATION, THE A.O. HAS ALSO INVOKED THE PROVISIONS OF SECTION 38( 2) OF THE ACT WHILE DISMISSING THE CLAIM OF DEDUCTIONS FROM THE HEAD I NCOME FROM OTHER SOURCES. 31. SECTION 38(2) READS AS UNDER:- WHERE ANY BUILDING, MACHINERY, PLANT OR FURNITURE IS NOT EXCLUSIVELY USED FOR THE PURPOSES OF THE BUSINESS OR PROFESSION, THE DEDUCTI ONS UNDER SUB-CLAUSE (II) OF CLAUSE (A) AND CLAUSE (C) OF SECTION 30, CLAUSES (I ) AND (II) OF SECTION 31 AND [CLAUSE (II) OF SUB-SECTION (1) ] OF SECTION 32 SHALL BE RE STRICTED TO A FAIR PROPORTIONATE PART THEREOF WHICH THE ASSESSING OFFICER MAY DETERMINE, HAVING REGARD TO THE USER OF SUCH BUILDING, MACHINERY, PLANT OR FURNITURE FOR TH E PURPOSES OF THE BUSINESS OR PROFESSION. 32. WE HAVE CONSIDERED THE AFOREMENTIONED SECTION FROM ALL POSSIBLE ANGLES BUT FAILED TO APPLY THE PROVISIONS TO THE FACTS OF THE CASE IN HAND. SINCE THE ASSESSEE HAS LET OUT ITS ENTIRE PREMISES LOCK, STOC K AND BARREL TO ARVIND MILLS ITA NOS. 2438 & 2501/AHD/2010 AND ORS. . A.YS. 2006-07, 2 009-10 & 2010-11 12 LTD., IN OUR CONSIDERED OPINION, THE PROVISIONS OF SECTION 38(2) DO NOT APPLY ON THE FACTS OF THE CASE. ORDER PRONOUNCED IN OPEN COURT ON 19 - 12- 20 16. SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 19/12/2016 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD