The DCIT.,Circle-1(1)(1), Ahmedabad V. Amjay Medi-Max India Pvt.Ltd., Ahmedabad

ITA 2695/AHD/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6546 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 01-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A L THAKKAR
• Keywords: Depreciation; Maximum Marginal Rate; Earning of tax free income; Question of law; Tax effect; Commercial expediency; Rule 8D
• Section: 143(3); 14A; 37(1); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI PRAMOD KUMAR, VICE PRESIDENT & MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO.2695/AHD/2017 (ASSESSMENT YEAR : 2014-15) DCIT, CIRCLE 1(1)(1), AHMEDABAD. VS. AMJAY MEDIMAX INDIA PVT. LTD., MAX HOUSE, 4 TH FLOOR OPP. KARNAVATI HOSPITAL, ELLISBRIDGE, AHMEDABAD 380 006. [PAN NO. AABCA 8241 R] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI MUDIT NAGPAL, SR. D.R. RESPONDENT BY : SHRI A. L. THAKKAR, A.R. DATE OF HEARING 14 .03.2019 DATE OF PRONOUNCEMENT 30.04.2019 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER DATED 22.09.2017 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)- 1, AHMEDABAD UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED AS TO THE ACT) ARISING OUT OF THE ORDER DATED 30.11.2016 PASSED BY THE DCIT, CIRC LE-1(1)(1), AHMEDABAD FOR THE ASSESSMENT YEAR 2014-15 WITH THE FOLLOWING GROUNDS: 1. THAT THE LD CIT(A) HAS ERRED IN LAW AND ON FACT S IN DELETING THE DISALLOWANCE OF INTEREST IN RESPECT OF CAPITAL WORK IN PROGRESS AT RS.4,51,679/-. 2. THAT THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING DISALLOWANCE OF RS.46,51,125/- MADE UNDER SECTION 14A R.W.R. 8D OF THE ACT. - 2 - ITA NO.2695/AHD/2017 DCIT VS. AMJAY MEDI-MAX (INDIA) PVT. LTD. ASST.YEAR 2011-12 3. THAT THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS.28,27,071/- MADE ON ACCOUNT OF I NTEREST FREE LOANS UNDER SECTION 36(1)(III) OF THE ACT. 4. THAT THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING IN DISALLOWANCE MADE ON ACCOUNT OF PRIOR PERIOD EXPENSES OF RS.44,1 00/-. 5. THE APPELLANT CRAVES, TO LEAVE, TO AMEND AND/OR TO ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. THE ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF DIAGNOSTIC CENTRE AND SCANNING CENTRE FILED ITS ORIGINAL RETURN OF INCOME ON 23.03 .2015 DECLARING TOTAL INCOME OF RS.2,08,04,630/- WHICH WAS PROCESSED U/S 143(1) OF THE ACT. UNDER SCRUTINY NOTICE U/S 143(2) OF THE ACT WAS ISSUED ON 03.09.2015 FOLLOWED BY A FURTHER NOTICE U/S 143(2) R.W.S. 129 DUE TO CHANGE OF INCUMBENT AND A QUESTIONNAIRE DATED 08.06.2016. DURING THE COURSE OF ASSESSMENT PROCEEDING IT APPEA RS FROM THE DETAILS GIVEN IN NOTE-9 OF THE BALANCE SHEET THAT THERE IS OPENING A S WELL AS CLOSING BALANCE OF CAPITAL WORK-IN-PROGRESS. THE CLOSING BALANCE OF CAPITAL WO RK-IN-PROGRESS (CWIP) WAS REPORTED AT RS.64,86,242/- AS ON 01.04.2014 AND THE OPENING BALANCE OF CWIP WAS REPORTED AT RS.63,78,809/-. IT ALSO APPEARED THAT THE ASSESSEE TOOK SECURED AS WELL AS UNSECURED LOANS DURING THE YEAR UNDER CONSIDERATION, DETAILS WHEREO F ARE AS FOLLOWS: BALANCE OF LONG TERM BORROWINGS AS ON 01.04.2014 RS.12,19,47,845/- BALANCE OF LONG TERM BORROWINGS AS ON 31.03.2013 RS.14,86,53,456/- BALANCE OF SHORT TERM BORROWINGS AS ON 01.04.2013 RS. 1,23,01,345/- BALANCE OF SHORT TERM BORROWINGS AS ON 31.03.2014 RS. 1,40,40,340/- ON THE ABOVE LONG TERM CAPITAL AND SECURED AND UNSE CURED BORROWINGS, THE ASSESSEE MADE PAYMENT OF INTEREST AND BORROWING COS TS TO THE TUNE OF RS.1,04,25,363/-, DURING THE YEAR FOR WHICH A NOTICE DATED 04.11.2016 WAS ISSUED UPON THE ASSESSEE TO JUSTIFY AS TO WHY NO INTEREST WAS CAPITALIZED TOWAR DS CWIP IN VIEW OF THE BALANCE REFLECTED IN THE BALANCE SHEET TOWARDS CWIP ON THE FIRST AND LAST DAY OF THE YEAR. FURTHER - 3 - ITA NO.2695/AHD/2017 DCIT VS. AMJAY MEDI-MAX (INDIA) PVT. LTD. ASST.YEAR 2011-12 THAT, THE ASSESSEE WAS FURTHER ASKED TO EXPLAIN AS TO WHY INTEREST U/S 36(1)(III) OF THE ACT SHOULD NOT BE CAPITALIZED TO THE EXTENT OF THE INTE REST ON BORROWED FUND UTILIZED FOR CWIP. IN REPLY WHEREOF THE ASSESSEE SUBMITTED THAT THE EXPENDITURE INCURRED DURING THE YEAR UNDER CONSIDERATION ON ACCOUNT OF CWIP AMOUNTI NG TO RS.1,07,433/-, WHICH WAS INCURRED DURING THE YEAR IS RELATABLE TO ASSESSEES OWN FUNDS I.E. INTERNAL REALIZATIONS. THE RECEIPTS AS PER THE AUDITED P&L ACCOUNT DURING THE YEAR AMOUNTED TO RS.13,23,72,169/-. SUCH RECEIPTS WERE MORE THAN SUFFICIENT FOR THE ACC RETION TO THE CAPITAL WORK-IN-PROGRESS OF RS.1,07,433/-. IT WAS FURTHER PLACED ON RECORD T HAT NO INTEREST BEARING BORROWED FUNDS WAS UTILIZED FOR THE PURPOSE OF CWIP BY THE ASSESSE E. THE LONG TERM BORROWINGS TAKEN BY THE ASSESSEE HAD BEEN UTILIZED FOR THE SPECIFIC PUR POSE FOR WHICH SUCH LOAN WAS TAKEN. IN THAT VIEW OF THE MATTER, THERE IS NO QUESTION OF MA KING ANY DISALLOWANCE WITH RESPECT TO THE INTEREST EXPENDITURE INCURRED ON CAPITAL WORK-I N-PROGRESS AS REPLIED BY THE ASSESSEE. HOWEVER, THE CONTENTION MADE BY THE ASSESSEE WAS NO T FOUND ACCEPTABLE AND THE LEARNED AO OUT OF THE TOTAL INTEREST EXPENSES DEBITED IN TH E P&L ACCOUNT A SUM OF RS.4,51,679/- AS CALCULATED TO BE CAPITALIZED TOWARDS CWIP U/S 36 (1)(III) OF THE ACT ADDED TO THE TOTAL INCOME OF THE ASSESSEE. IN APPEAL, THE LEARNED CIT( A) DELETED THE ADDITION. HENCE, THE INSTANT APPEAL BEFORE US. 3. AT THE TIME OF HEARING OF THE INSTANT APPEAL, TH E LEARNED REPRESENTATIVE OF THE ASSESSEE SUBMITTED BEFORE US THAT THE SIMILAR ISSUE WAS DECIDED BY THE CO-ORDINATE BENCH IN ITA NO.289/AHD/2017 FOR A.Y. 2012-13 IN FAVOUR O F THE ASSESSEE; A COPY WHEREOF WAS ALSO HANDED OVER TO US. HE, THEREFORE, PRAYS FOR TH E SAME RELIEF. ON THE CONTRARY, THE LEARNED DR RELIED UPON THE ORDER PASSED BY THE AUTH ORITIES BELOW. - 4 - ITA NO.2695/AHD/2017 DCIT VS. AMJAY MEDI-MAX (INDIA) PVT. LTD. ASST.YEAR 2011-12 4. HEARD THE RESPECTIVE PARTIES, PERUSED THE RELEVA NT MATERIALS AVAILABLE ON RECORD. IT APPEARS THAT THE LEARNED CIT(A) WHILE GRANTING RELI EF TO THE ASSESSEE OBSERVED AS FOLLOWS: 3.3. I HAVE GONE THROUGH THE ASSESSMENT ORDER, SU BMISSION OF THE APPELLANT BEFORE A.O. AND BEFORE ME IN APPELLATE PROCEEDINGS. THE A. O. HAS MADE DISALLOWANCE OF INTEREST OF RS.4,51,679/- AS CLAIMED BY APPELLANT C OMPANY IN BALANCE SHEET ON THE GROUND THAT THE ASSESSEE COMPANY HAS SHOWN CAPITAL WORK IN PROGRESS AMOUNTING TO RS.64,86,242/-. THE AO HAS OBSERVED THAT THE APPELL ANT COMPANY HAS NOT PRODUCED ANY. MATERIAL ON RECORD TO SHOW THE BASIS OF WORKING OF CAPITALIZATION OF INTEREST IN RESPECT OF CAPITAL WORK IN PROGRESS. FURTHER THE A. O. HAS REL IED UPON THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE POWER DRUGS LTD. V/S. CIT TAXMANN 194(2011). THE A.O. HAS DISALLOWED THE INTEREST OF RS.4,51,679/- AS PER THE SECTION 36(1)(III) OF THE ACT AND ADDED BACK TO THE TOTAL I NCOME. ON THE OTHER HAND APPELLANT HAS ARGUED THAT THE COP Y OF THE COMPUTATION OF INCOME FOR THE YEAR REVEALS THAT SINCE NO SUCH EXPE NSES HAVE BEEN CLAIMED WITH REGARDS THE CAPITAL WORK IN PROGRESS, THE QUESTION OF MAKIN G ANY DISALLOWANCE DOES NOT ARISE. DISALLOWANCE CAN BE MADE ONLY WHERE THE CLAIM OF DE DUCTION OR ALLOWANCE HAS BEEN MADE WHERE THERE IS NO SUCH CLAIM OF ANY ALLOWANCE, THE QUESTION OF MAKING DISALLOWANCE DOES NOT ARISE. AFTER GOING THROUGH THE FACTS OF THE CASE AND THE S UBMISSION SUBMITTED BY THE AR, IT IS SEEN THAT CLAUSE-B OF NOTE-9 OF THE FIXED ASS ETS SCHEDULE OF THE AUDIT ACCOUNTS DISCLOSED CAPITAL WORK IN PROGRESS OF RS.64,86,242/ - WHICH IS ABSOLUTELY DISTINCT AND DIFFERENT FROM THE ADDITIONS MADE TO THE GROSS BLOC K IN THE COLUMN-A OF NOTE-9 COMPRISING OF TENABLE ASSETS FORMING PART OF AUDITE D ACCOUNTS. THEREFORE, THE AO HAS COMPLETELY MISLED HIMSELF IN BELIEVING THAT THE APP ELLANT HAS CLAIMED DEPRECIATION ON CAPITAL WORK IN PROGRESS AS DISCLOSED IN THE AUDITE D ACCOUNTS. THE ABOVE COMPARISON OF BOTH THE TABLES REVEALS THAT NO SUCH DEPRECIATION H AS BEEN CLAIMED ON CAPITAL WORK IN PROGRESS OF RS.64,86,242/- AS ALLEGED. THE DECISION WHICH HAD BEEN RELIED UPON BY THE AO WHILE MAKING ADDITION ARE THEREFORE NOT APPLICAB LE SINCE BOTH THESE DECISIONS INVOLVED THE CAPITALIZATION OF EXPENSES PRIOR TO TH E ASSETS HAVING BEEN PUT TO USE. IN VIEW OF THE ABOVE FACTS AND DISCUSSION, THE ADDITION MAD E BY THE A.O. OF RS.4,51,679/- CANNOT BE SUSTAINED. THE AO IS DIRECTED TO DELETE THE SAME . THE GROUND OF THE APPELLANT IS ALLOWED. WE HAVE ALSO CAREFULLY CONSIDERED THE JUDGMENT PASS ED BY THE CO-ORDINATE BENCH IN ASSESSEES OWN CASE IN ITA NO.289/AHD/2017 FOR A .Y. 2012-13. THE RELEVANT PORTION WHEREOF IS REPRODUCED HEREINBELOW: - 5 - ITA NO.2695/AHD/2017 DCIT VS. AMJAY MEDI-MAX (INDIA) PVT. LTD. ASST.YEAR 2011-12 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIALS AVAILABLE ON RECORD. AT THE OUTSET, WE NOTE THAT THE OWN FUND OF THE ASSESSEE EXCEEDS THE AMOUNT OF CAPITAL WORK IN PROGRESS. THEREFORE, A PRESUMPTION CAN BE DRAWN THAT THERE WAS NO BORROWED FUND USED IN SUCH CAPITAL WORK IN PROGRESS . ACCORDINGLY, THE QUESTION OF UTILIZATION OF BORROWED FUND IN SUCH CAPITAL WORK I N PROGRESS DOES NOT ARISE. ACCORDINGLY, THERE CANNOT BE ANY DISALLOWANCE ON ACCOUNT OF INTE REST EXPENSES AS MADE BY THE AO. IN HOLDING SO, WE FIND SUPPORT AND GUIDANCE FROM THE J UDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF RELIANCE UTILITIES AND POWER L TD. REPORTED IN 313 ITR 340 WHEREIN IT WAS HELD AS UNDER:- THE PRINCIPLE THEREFORE WOULD BE THAT IF THERE ARE FUNDS AVAILABLE BOTH INTEREST- FREE AND OVERDRAFT AND/OR LOANS TAKEN, THEN A PRESU MPTION WOULD ARISE THAT INVESTMENTS WOULD BE OUT OF THE INTEREST-FREE FUND GENERATED OR AVAILABLE WITH THE COMPANY, IF THE INTEREST-FREE FUNDS WERE SUFFICIENT TO MEET THE INVESTMENTS. IN THIS CASE THIS PRESUMPTION IS ESTABLISHED CONSIDERING TH E FINDING OF FACT BOTH BY THE CIT(A) AND TRIBUNAL. 8.1 SIMILARLY, WE ALSO RELY ON THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. HDFC BANK LTD REPORTED IN 366 ITR 5 05 (BOM). THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED BELOW:- WHERE ASSESSEE'S CAPITAL, PROFIT RESERVES, SURPLUS AND CURRENT ACCOUNT DEPOSITS WERE HIGHER THAN THE INVESTMENT IN TAX-FREE SECURIT IES, IT WOULD HAVE TO BE PRESUMED THAT INVESTMENT MADE BY THE ASSESSEE WOULD BE OUT OF THE INTEREST-FREE FUNDS AVAILABLE WITH ASSESSEE AND NO DISALLOWANCE W AS WARRANTED U/S 14A. 8.2 SIMILARLY, WE ALSO FIND SUPPORT FROM THE JUDGMENT O F HONBLE GUJARAT HIGH COURT IN THE CASE OF UTI BANK LTD. REPORTED IN 32 TAXMANN .COM 370 WHERE THE HEADNOTE READS AS UNDER : IF THERE ARE SUFFICIENT INTEREST FREE FUNDS TO MEET TAX FREE INVESTMENTS, THEY ARE PRESUMED TO BE MADE FROM INTEREST FREE FUNDS AND NOT LOANED FUNDS AND NO DISALLOWANCE CAN BE MADE UNDER SECTION 14A. IN VIEW OF THE ABOVE PROPOSITION, WE HOLD THAT NO D ISALLOWANCE OF INTEREST EXPENSE CLAIMED BY THE ASSESSEE CAN BE MADE ON ACCOUNT OF I MPUGNED CWIP. HENCE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD. CI TA. ACCORDINGLY, THE AO IS DIRECTED TO DELETE THE ADDITION MADE BY HIM. THUS THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. SINCE IT APPEARS ON RECORD THAT THE APPELLANT HAS S UFFICIENT INTEREST FREE FUNDS TO MEET TAX FREE INVESTMENTS, IT CAN BE WELL PRESUMED THAT THEY ARE MADE FROM INTEREST FREE FUNDS AND NOT LOANED FUNDS. RELYING UPON THE JUDGME NT PASSED BY THE CO-ORDINATE BENCH, WE FIND NO DISCREPANCY/INFIRMITY IN THE ORDER PASSE D BY THE AUTHORITIES BELOW IN GRANTING - 6 - ITA NO.2695/AHD/2017 DCIT VS. AMJAY MEDI-MAX (INDIA) PVT. LTD. ASST.YEAR 2011-12 RELIEF TO THE ASSESSEE BY DELETING THE ADDITION TOW ARDS DISALLOWANCE OF INTEREST EXPENSE CLAIMED BY THE ASSESSEE. HENCE, THIS GROUND OF APPE AL FILED BY THE REVENUE IS DISMISSED. 5. GROUND NO.2 : THIS GROUND RELATES TO DELETION OF ADDITION OF R S.46,51,125/- MADE U/S 14A R.W.R. 8D OF THE ACT. 6. IT APPEARS ON RECORD THAT THE ASSESSEE INVESTED RS.16,46,47,500/- AS AT 31.03.2014 AND 31.03.2013. THE ASSESSEE COMPANY HAS NOT DISALL OWED ANY EXPENDITURE IN TERMS OF INTEREST COST, ADMINISTRATIVE COST OR ANY OTHER EXP ENSES WITH REGARD TO MAKING AND MANAGING SUCH INVESTMENTS. THE ASSESSEES CASE WAS THIS THAT IT HAS NOT EARNED ANY EXEMPT INCOME. FURTHER THAT, THE ASSESSEE COMPANY H AS NOT INCURRED ANY EXPENDITURE NOR CLAIMED ANY EXPENDITURE IN RESPECT OF EXEMPT INCOME . IN ABSENCE OF EXEMPTED INCOME AND ALSO IN ABSENCE OF EXPENDITURE RELATABLE TO SUC H EXEMPTED INCOME, NO DISALLOWANCE CAN BE MADE U/S 14A OF THE ACT R.W.R. 8D OF THE INC OME TAX RULES. HOWEVER, SUCH PLEA OF THE ASSESSEE WAS NOT ACCEPTED BY THE LEARNED AO AND DISALLOWANCE TO THE TUNE OF RS.46,51,125/- U/S 14A WAS MADE BY THE ASSESSING OF FICER WHICH IN TURN WAS DELETED BY THE LEARNED CIT(A). 7. AT THE TIME OF HEARING OF THE INSTANT APPEAL, TH E LEARNED COUNSEL APPEARING FOR THE PARTIES RELIED UPON THE JUDGMENT PASSED BY THE JURI SDICTIONAL HIGH COURT IN THE CASE OF CIT-VS-CORRETECH ENERGY PVT. LTD. IN WHICH ON IDENT ICAL ISSUE DISALLOWANCE U/S 14A HAS BEEN DELETED WHEN NO DIVIDEND INCOME WAS EARNED BY THE ASSESSEE; COPY WHEREOF WAS SUBMITTED BEFORE US BY THE LEARNED AR AT THE TIME O F HEARING OF THE APPEAL. FURTHER THAT, IT WAS ALSO ARGUED THAT IN ITA NO.289/AHD/2017 FOR A.Y. 2012-13, THE CO-ORDINATE BENCH HAS PASSED AN ORDER IN FAVOUR OF THE ASSESSEE BY CONFIRMING DELETION OF ADDITION MADE BY THE LEARNED CIT(A) IN THE APPEAL PREFERRED BY THE REVENUE. - 7 - ITA NO.2695/AHD/2017 DCIT VS. AMJAY MEDI-MAX (INDIA) PVT. LTD. ASST.YEAR 2011-12 8. HEARD THE RESPECTIVE PARTIES, PERUSED THE RELEVA NT MATERIALS AVAILABLE ON RECORD. IT APPEARS THAT LEARNED CIT(A) WHILE GRANTING RELIEF T O THE ASSESSEE OBSERVED THAT DURING THE YEAR UNDER CONSIDERATION THE SHARE CAPITAL RESE RVES AND SURPLUS WHICH ARE IN THE FORM OF INTEREST FREE FUNDS WAS OF RS.18,88,57,612/- IN THE EARLIER YEAR IT WAS RS.17,83,15,238/- RELYING ON THE JUDGMENT OF GUJARAT HIGH COURT IN TH E CASE OF HITACHI HOME & LIFE SOLUTIONS INDIA LTD. REPORTED IN 221 TAXMAN 109 PAS SED BY THE JURISDICTIONAL HIGH COURT. THE LEARNED CIT(A) OBSERVED THAT NO DISALLOWANCE U/ S 14A CAN BE MADE WHEN THE ASSESSEE IS HAVING AMPLE INTEREST FREE FUNDS. RELIA NCE WAS ALSO PLACED ON THE JUDGMENT PASSED BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT-VS-CORRTECH ENERGY PVT. LTD. REPORTED IN 45 TAXMANN.COM 116 WHERE ON IDENTICAL I SSUE OF DISALLOWANCE U/S 14A WHEN NO DIVIDEND INCOME IS EARNED BY THE ASSESSEE WAS HE LD AS FOLLOWS: 4. COUNSEL FOR THE REVENUE SUBMITTED THAT THE ASSE SSING OFFICER AS WELL AS CIT(APPEALS) HAD APPLIED FORMULA OF RULE 8D OF THE INCOME TAX RULES, SINCE THIS CASE AROSE AFTER THE ASSESSMENT YEAR 2009-2010. SINCE IN THE. PRESENT CASE, WE ARE CONCERNED WITH THE ASSESSMENT YEAR 2009-2010, SUCH FORMULA WA S CORRECTLY APPLIED BY THE REVENUE. WE HOWEVER, NOTICE THAT SUB-SECTION(1) OF SECTION 1 4A PROVIDES THAT FOR THE PURPOSE OF COMPUTING TOTAL INCOME UNDER CHAPTER IV OF THE ACT, NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF EXPENDITURE INCURRED BY THE ASSESSES IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT. IN THE PRESENT CASE, THE TRIBUNAL HAS RECORDED THE FINDING OF FACT THAT THE ASSESSEE DID NOT MAKE ANY CLAIM FOR EXEMPTION OF ANY INCOME FROM PAYMENT OF TAX. IT WAS ON THIS BASIS THAT THE TRIBUNAL HELD THAT DISALLOWANCE UNDER SECTION 14A OF THE ACT COULD NOT BE MADE. IN THE PROCESS TRIBUNAL RELIED ON THE DECISION OF DIVISION BENCH OF PUNJAB AND HARYANA HIGH COURT IN CASE OF CIT V WINSOME TEXTILE INDUSTRIES LTD. [2009] 319 ITR 204 IN WHICH ALSO TH E COURT HAD OBSERVED AS UNDER: '7. WE DO NOT FIND ANY MERIT IN THIS SUBMISSION. T HE JUDGEMENT OF THIS COURT IN ABHISHEK INDUSTRIES LTD (2006) 286 ITR 1 WAS ON THE ISSUE OF ALLOWABILITY OF INTEREST PAID ON LOANS GIVEN TO SISTER CONCERNS, WITHOUT INTEREST . IT WAS HELD THAT DEDUCTION FOR INTEREST WAS PERMISSIBLE WHEN LOAN WAS TAKEN FOR BUSINESS PU RPOSE AND NOT FOR DIVERTING THE SAME TO SISTER CONCERN WITHOUT HAVING NEXUS WITH THE BUS INESS. THE OBSERVATIONS MADE THEREIN HAVE TO BE READ IN THAT CONTEXT. IN THE PRESENT CASE, ADMITTEDLY THE ASSESSEE DID NO T MAKE ANY CLAIM FOR EXEMPTION. IN SUCH A SITUATION SECTIO N 14A COULD HAVE NO APPLICATION.' 14. WE DO NOT FIND ANY QUESTION OF LAW ARISING, TAX APPEAL IS THEREFORE DISMISSED.' - 8 - ITA NO.2695/AHD/2017 DCIT VS. AMJAY MEDI-MAX (INDIA) PVT. LTD. ASST.YEAR 2011-12 WE HAVE ALSO CAREFULLY CONSIDERED THE JUDGMENT PASS ED IN ITA NO.289/AHD/2017 WHERE ON THE SIMILAR SET OF FACTS THE TRIBUNAL OBSE RVED AS FOLLOWS: 14. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD. IT IS AN UNDISPUTED FACT THAT THERE IS NO E XEMPT INCOME EARNED BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION IN RESPECT OF THE INVE STMENT IN SHARES AS DISCUSSED ABOVE. ONCE IT IS ON RECORD THAT THERE IS NO DIVIDEND INCO ME/EXEMPTED INCOME THEN THE QUESTION OF MAKING THE DISALLOWANCE UNDER SECTION 14A DOES N OT ARISE IN VIEW OF THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CORRTECH ENERGY (P) LTD REPORTED IN 372 ITR 97 WHEREIN IT WAS HELD AS UNDER: 4. COUNSEL FOR THE REVENUE SUBMITTED THAT THE ASSE SSING OFFICER AS WELL AS CIT(APPEALS) HAD APPLIED FORMULA OF RULE 8D OF THE INCOME TAX RULES, SINCE THIS CASE AROSE AFTER THE ASSESSMENT YEAR 2009-2010. SIN CE IN THE PRESENT CASE, WE ARE CONCERNED WITH THE ASSESSMENT YEAR 2009-2010, SUCH FORMULA WAS CORRECTLY APPLIED BY THE REVENUE. WE HOWEVER, NOTICE THAT SUB SECTION(1) OF SECTION 14A PROVIDES THAT FOR THE PURPOSE OF COMPUTING TOTAL IN COME UNDER CHAPTER IV OF THE ACT, NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF EX PENDITURE INCURRED BY THE ASSESSEE IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT. IN THE PRESENT CASE, THE TRIBUNAL HAS RECO RDED THE FINDING OF FACT THAT THE ASSESSEE DID NOT MAKE ANY CLAIM FOR EXEMPTION OF AN Y INCOME FROM PAYMENT OF TAX. IT WAS ON THIS BASIS THAT THE TRIBUNAL HELD TH AT DISALLOWANCE UNDER SECTION 14A OF THE ACT COULD NOT BE MADE. IN VIEW OF THE ABOVE JUDGMENT, THERE IS NO AMBIGUIT Y THAT THERE CANNOT BE ANY DISALLOWANCE UNDER SECTION 14A OF THE ACT AS MADE B Y THE AO. ACCORDINGLY, WE DO NOT FIND ANY REASON TO DISTURB THE FINDING OF THE LEARN ED CIT (A). THUS THE AO IS DIRECTED TO DELETE THE ADDITION MADE BY HIM. HENCE, THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. IN THE ABSENCE OF ANY CHANGE OF CIRCUMSTANCES, WE D O NOT FIND ANY REASON TO INTERFERE WITH THE ORDER PASSED BY THE LEARNED CIT( A). WE THUS UPHELD THE SAME. IN THE RESULT, REVENUES THIS GROUND OF APPEAL IS DISMISSED. 9. GROUND NO.3: THIS GROUND RELATES TO THE DELETION OF DISALLOWANCE OF RS.28,27,071/- MADE ON ACCOUNT OF INTEREST FREE LOA NS U/S 36(1)(III) OF THE ACT HAS BEEN CHALLENGED BY THE REVENUE BEFORE US. - 9 - ITA NO.2695/AHD/2017 DCIT VS. AMJAY MEDI-MAX (INDIA) PVT. LTD. ASST.YEAR 2011-12 10. DURING THE COURSE OF ASSESSMENT PROCEEDING, UPO N EXAMINATION OF THE DETAILS RELATING TO THE INTEREST FREE ADVANCES EXTENDED BY THE ASSESSEE COMPANY, IT WAS FOUND THAT INTEREST FREE ADVANCES TO THE ASSOCIATES/GROUP CONC ERNS WAS EXTENDED TO THE TUNE OF RS.2,40,28,925/- BY THE ASSESSEE. IT WAS OBSERVED B Y THE LEARNED AO THAT THE ASSESSEE COMPANY DOES NOT HAVE BUSINESS TRANSACTIONS WITH TH OSE CONCERNS DURING THE RELEVANT POINT OF TIME. BY A NOTICE DATED 22.08.2016, THE AS SESSEE WAS REQUESTED TO EXPLAIN AS TO WHY INTEREST BEARING FUND WAS DIVERTED FOR NON-BUSI NESS PURPOSE. IN REPLY WHEREOF THE ASSESSEE BY AND UNDER A LETTER DATED 25.10.2016 SUB MITTED THAT NO INTEREST BEARING FUND WAS DIVERTED FOR NON-BUSINESS PURPOSE. IT WAS FURTH ER CLARIFIED THAT EXPENDITURE ON PAYMENT OF INTEREST RELATED TO MONEY BORROWED AND U TILIZED WAS EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. ON 28.11.2016, THE ASSESSEE FURTHER SUBMITTED THAT THE LOANS AND ADVANCES HAD BEEN GIVEN KEEPING IN VI EW OF THE COMMERCIAL EXPEDIENCY AND THE LARGER INTEREST OF THE BUSINESS. SUCH INTER EST FREE LOANS HAD BEEN GIVEN CONSIDERING THE COMMERCIAL EXPEDIENCY AND THE BENEFIT WHICH THE ASSESSEE MAY DERIVE FROM SUCH TRANSACTIONS. FURTHER, SUCH LOANS HAD BEEN MADE OUT OF THE INTEREST FREE FUNDS AVAILABLE WITH THE ASSESSEE OUT OF INTERNAL ACCRETIONS AND OT HER INTEREST FREE FUNDS. NO INTEREST BEARING BORROWED FUND HAS BEEN UTILIZED FOR THE PUR POSE OF SUCH LOANS AND ADVANCES. THE DETAILS GIVEN BY THE ASSESSEE SHOWN NEXUS OF THE IN TEREST FREE FUNDS AVAILABLE WITH THE ASSESSEE INTEREST FREE LOANS AND ADVANCES GIVEN. HO WEVER, SUCH CONTENTION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE BY THE LEARNED AO AND HE, THEREFORE, DISALLOWED RS.28,27,071/- ON ACCOUNT OF INTEREST FREE LOANS U/ S 36(1)(III) OF THE ACT. IN APPEAL, THE LEARNED CIT(A) DELETED SUCH ADDITION. 11. HEARD THE RESPECTIVE PARTIES, PERUSED THE RELEV ANT MATERIALS AVAILABLE ON RECORD. IT APPEARS THAT THE CONTENTION OF THE ASSESSEE HAS BEE N TAKEN CARE OF IN ITS PROPER PROSPECTIVE - 10 - ITA NO.2695/AHD/2017 DCIT VS. AMJAY MEDI-MAX (INDIA) PVT. LTD. ASST.YEAR 2011-12 OF THE LEARNED CIT(A) ON THE BASIS OF THE JUDGMENT PASSED BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT-VS-RAGHUVIR SYNTHETICS LTD . REPORTED IN (2013) 354 ITR 222 (GUJ.) DELETED SUCH ADDITION MADE BY THE LEARNED AO . IT WAS FURTHER OBSERVED THAT THE RATIO LAID DOWN BY THE HONBLE GUJARAT HIGH COURT I N THE CASE OF GUJARAT NARMADA VALLEY FERTILIZERS CO. LTD. THAT IF THE COMPANY IS HAVING OWN FUNDS FAR EXCESS THAN ADVANCE TO THE SISTER CONCERN AND WITHOUT ESTABLISHING THE NEX US BY THE ASSESSING OFFICER THE DISALLOWANCE OF INTEREST U/S 36(1)(III) IS NOT JUST IFIED. INTEREST FREE ADVANCES GIVEN FOR COMMERCIAL EXPEDIENCY NOT TO BE DISALLOWED HELD BY THE HONBLE SUPREME COURT IN THE CASE OF S.A. BUILDERS LTD.-VS-CIT REPORTED IN (2004 ) 269 ITR 535 (P&H) WAS ALSO TAKEN INTO CONSIDERATION BY THE LEARNED CIT(A). IN LIGHT OF THE ABOVE DISCUSSION, THE COURT DOES NO T FIND ANY INFIRMITY IN THE IMPUGNED ORDER PASSED BY THE APPELLATE AUTHORITY SO AS TO WARRANT INTERFERENCE. THE QUESTION IS ACCORDINGLY ANSWERED IN THE AFFIRMATION I.E. IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. CONSEQUENTLY, THIS GROUND OF A PPEAL FAILS AND IS ACCORDINGLY DISMISSED. 12. GROUND NO.4: THIS GROUND RELATES TO DELETION OF ADDITION AND/O R DISALLOWANCE ON ACCOUNT OF PRIOR PERIOD EXPENSES OF RS.44,100/-. 13. DURING THE COURSE OF ASSESSMENT PROCEEDING, IT WAS FOUND THAT THE ASSESSEE HAS CLAIMED PRIOR PERIOD EXPENDITURE OF RS.44,100/-. TH OUGH, THE APPELLANT COMPANY HAS RECEIVED THE BILL DURING THE YEAR UNDER CONSIDERATI ON BUT IT HAS NOT SUBMITTED SUCH COPY OF BILL AND INVOICES WHICH WAS RECEIVED DURING THE YEA R THUS PRIOR PERIOD EXPENSES OF RS.44,100/- WAS DISALLOWED AND ADDED TO THE TOTAL I NCOME OF THE ASSESSEE. IN THE APPELLATE PROCEEDING, THE ASSESSEE SUBMITTED THE BILLS FROM T HE VENDOR/SUPPLIERS, WHICH HAVE BEEN - 11 - ITA NO.2695/AHD/2017 DCIT VS. AMJAY MEDI-MAX (INDIA) PVT. LTD. ASST.YEAR 2011-12 RECORDED IN THE BOOKS OF ACCOUNTS AND THE EXPENDITU RE HAS BEEN CLAIMED. IT WAS THE CASE OF THE ASSESSEE THAT BILLS/INVOICES WAS RECEIVED IN THE YEAR NOT IN THE EARLIER YEAR AND ACCORDINGLY THE LIABILITY TO MAKE THE PAYMENT CRYST ALLIZED ONLY ON RECEIPT OF SUCH INVOICES/BILLS. THE LEARNED CIT(A) DELETED SUCH ADD ITION MADE BY THE ASSESSING OFFICER. HENCE THE INSTANT APPEAL BEFORE US. 14. WE HAVE HEARD THE RESPECTIVE PARTIES, PERUSED T HE RELEVANT MATERIAL AVAILABLE ON RECORD. IT WAS OBSERVED BY THE LEARNED CIT(A) IN AP PEAL THAT THE ASSESSING OFFICER HAS NOT DOUBTED THE GENUINENESS OF SUCH EXPENDITURE AND IF SUCH EXPENDITURE PERTAINS TO EARLIER YEAR, IT CAN BE ALLOWED AS EXPENDITURE IN S AID ASSESSMENT YEAR AND EVEN THIS EXERCISE IS TAX NEUTRAL AS HELD BY HONBLE DELHI HI GH COURT IN THE MATTER OF VISHNU INDUSTRIAL GLASSES AND SHRIRAM PISTON & RINGS LTD. THE CO-ORDINATE BENCH HAS ALSO GRANTED RELIEF TO THE ASSESSEE IN THE SAME SET OF F ACTS IN THE CASE OF ADANI ENTERPRISES LIMITED IN ITA NO.1859/AHD/2011, WHICH WAS RELIED U PON BY THE LEARNED CIT(A). WE HAVE ALSO CAREFULLY CONSIDERED THE JUDGMENT PASS ED IN ITA NO.289/AHD/2017 WHEREIN ASSESSEES OWN CASE ON THE SIMILAR SET OF F ACTS THE TRIBUNAL OBSERVED AS FOLLOWS: 20. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD. REGARDING THE PRIOR PERIOD EXPENSES CLAIMED BY THE ASSESSEE WE NOTE THAT THE GENUINENESS OF SUCH EXPENSES HAS NOT BEEN DOUBTED. THEREFORE, WE CAN PRESUME THAT THE IMPUGNED PRIOR PERIOD EXPENSES WERE INCURRED IN CON NECTION WITH THE BUSINESS OF THE ASSESSEE UNDER SECTION 37(1) OF THE ACT. 20.1 THE SOLE BASIS OF THE DISALLOWANCES IS THAT T HESE EXPENSES ARE PERTAINING TO THE PERIOD OF EARLIER YEARS. THEREFORE, THE SAME WAS DI SALLOWED. HOWEVER, WE NOTE THAT THE ASSESSEE IN THE YEAR UNDER CONSIDERATION AND IN THE EARLIER YEARS WAS PAYING THE TAX AT THE MAXIMUM MARGINAL RATE. AS SUCH THERE WAS NO LOS S TO THE REVENUE AS THE ASSESSEE WAS VERY MUCH ENTITLED TO THE DEDUCTION OF SUCH EXP ENSES IN THE EARLIER YEAR. THUS MERELY THE ASSESSEE OMITTED TO CLAIM THE EXPENSES IN THE E ARLIER YEAR CANNOT BE A GROUND FOR THE DISALLOWANCE FOR THE YEAR UNDER CONSIDERATION. IN T HIS REGARD WE FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF INDIAN PETROCHEMICALS CORPORATION LTD (SUPRA) WHEREIN IT W AS HELD AS UNDER: - 12 - ITA NO.2695/AHD/2017 DCIT VS. AMJAY MEDI-MAX (INDIA) PVT. LTD. ASST.YEAR 2011-12 2.3 MR. SOPARKAR, LEARNED SENIOR COUNSEL ASSISTED BY MR. AMIT K. MATHUR AND MRS. SWATI SOPARKAR, LEARNED ADVOCATES FOR THE ASSESSEE SUPPORTED THE IMPUGNED ORDER AND SUBMITTED THAT THE ISSUE INVOLVE D IN THE PRESENT APPEAL IS NOW SQUARELY COVERED BY A DECISION OF THE APEX COURT IN THE CASE OF CIT V. EXCEL INDUSTRIES LTD. [2013] 358 ITR 295/219 TAXMAN 379/3 8 TAXMANN.COM 100 (SC). 2.4 THE APEX COURT IN THE CASE OF EXCEL INDUSTRIES LTD. (SUPRA) HAS HELD AS UNDER: '32. THIRDLY, THE REAL QUESTION CONCERNING US IS TH E YEAR IN WHICH THE ASSESSEE IS REQUIRED TO PAY TAX. THERE IS NO DISPUT E THAT IN THE SUBSEQUENT ACCOUNTING YEAR, THE ASSESSEE DID MAKE IMPORTS AND DID DERIVE BENEFITS UNDER THE ADVANCE LICENCE AND THE DUTY ENTITLEMENT PASS BOOK AND PAID TAX THEREON. THEREFORE, IT IS NOT AS IF THE REVENUE HAS BEEN DEPRIVED OF ANY TAX. WE ARE TOLD THAT THE RATE OF TAX REMAINED THE SAME IN THE PRESENT ASSESSMENT YEAR AS WELL AS IN THE SUBSEQUENT ASSESS MENT YEAR. THEREFORE, THE DISPUTE RAISED BY THE REVENUE IS ENTIRELY ACADE MIC OR AT BEST MAY HAVE A MINOR TAX EFFECT. THERE WAS, THEREFORE, NO NEED F OR THE REVENUE TO CONTINUE WITH THIS LITIGATION WHEN IT WAS QUITE CLE AR THAT NOT ONLY WAS IT FRUITLESS (ON MERITS) BUT ALSO THAT IT MAY NOT HAVE ADDED ANYTHING MUCH TO THE PUBLIC COFFERS.' 2.5 THE BOMBAY HIGH COURT IN THE CASE OF CIT V. NAG RI MILLS CO. LTD.[1958] 33 ITR 681 HAS HELD AS UNDER: '3. WE HAVE OFTEN WONDERED WHY THE INCOME-TAX AUTHO RITIES, IN A MATTER SUCH AS THIS WHERE THE DEDUCTION IS OBVIOUSLY A PER MISSIBLE DEDUCTION UNDER THE INCOME-TAX ACT, RAISE DISPUTES AS TO THE YEAR IN WHICH THE DEDUCTION SHOULD BE ALLOWED. THE QUESTION AS TO THE YEAR IN WHICH A DEDUCTION IS ALLOWABLE MAY BE MATERIAL WHEN THE RAT E OF TAX CHARGEABLE ON THE ASSESSEE IN TWO DIFFERENT YEARS IS DIFFERENT ; BUT IN THE CASE OF INCOME OF A COMPANY, TAX IS ATTRACTED AT A UNIFORM RATE, AND WHETHER THE DEDUCTION IN RESPECT OF BONUS WAS GRANTED IN THE AS SESSMENT YEAR 1952-53 OR IN THE ASSESSMENT YEAR CORRESPONDING TO THE ACCO UNTING YEAR 1952, THAT IS IN THE ASSESSMENT YEAR 1953-54, SHOULD BE A MATT ER OF NO CONSEQUENCE TO THE DEPARTMENT; AND ONE SHOULD HAVE THOUGHT THAT THE DEPARTMENT WOULD NOT FRITTER AWAY ITS ENERGIES IN FIGHTING MAT TERS OF THIS KIND. BUT, OBVIOUSLY, JUDGING FROM THE REFERENCES THAT COME UP TO US EVERY NOW AND THEN, THE DEPARTMENT APPEARS TO DELIGHT IN RAISING POINTS OF THIS CHARACTER WHICH DO NOT AFFECT THE TAXABILITY OF THE ASSESSEE OR THE TAX THAT THE DEPARTMENT IS LIKELY TO COLLECT FROM HIM WHETHER IN ONE YEAR OR THE OTHER. 4. THE POINT RAISED FOR DETERMINATION TURNS ON THE WORDS USED IN SECTION 10, SUB-SECTION (2), CLAUSE (X), WHICH ALLOWS A DED UCTION IN RESPECT OF - 13 - ITA NO.2695/AHD/2017 DCIT VS. AMJAY MEDI-MAX (INDIA) PVT. LTD. ASST.YEAR 2011-12 BONUS AND SECTION 10(5). NOW, IN SECTION 10(2)(X), WHAT IS ALLOWABLE AS A DEDUCTION IS 'ANY SUM PAID TO AN EMPLOYEE AS BONUS' . BY ITSELF THIS CONTEMPLATES ACTUAL PAYMENT; BUT SECTION 10(5) DEFI NES THE WORD 'PAID' WHICH APPEARS IN SUBSECTION (2) AS MEANING 'ACTUALL Y PAID OR INCURRED ACCORDING TO THE METHOD OF ACCOUNTING UPON THE BASI S OF WHICH THE PROFITS OR GAINS ARE COMPUTED UNDER THIS SECTION'. THEREFOR E, AN ACTUAL PAYMENT IS NOT NECESSARY FOR THE PURPOSE OF THIS DEDUCTION; IT IS SUFFICIENT IF THE LIABILITY TO BONUS IS INCURRED ACCORDING TO THE MET HOD OF ACCOUNTING UPON THE BASIS OF WHICH THE PROFITS OR GAINS ARE COMPUTE D. NOW, CONSIDERING THAT THE PROFITS OR GAINS ARE COMPUTED ON THE MERCA NTILE BASIS, THE AMOUNT OF BONUS FOR THE YEAR 1951 WOULD PROPERLY BE TREATE D UNDER THE MERCANTILE SYSTEM AS AN EXPENSE FOR THE YEAR 1951. IT APPEARS TO US TO BE A MATTER OF LITTLE CONSEQUENCE THAT IN POINT OF FACT NO ENTRY W AS MADE IN THE ACCOUNT OF THAT YEAR MAKING A PROVISION FOR THE BONUS, BECAUSE OBVIOUSLY SUCH AN ENTRY COULD ONLY BE MADE AFTER THE CONCLUSION OF TH AT YEAR WHEN THE PROFITS OF THAT YEAR WERE KNOWN, AND, THEREFORE, THE LIABIL ITY FOR A BONUS, AND IT COULD HAVE BEEN MADE AT ANY TIME. THE ABSENCE OF AN ENTRY, THEREFORE, DOES NOT APPEAR TO US TO AFFECT THE QUESTION OF WHE THER THE ASSESSEE WAS ENTITLED TO A DEDUCTION IN RESPECT OF THIS AMOUNT O F RS. 1,80,000. THE POSITION APPEARS TO US TO BE MADE CLEARER WHEN ONE TURNS TO THE PRESCRIBED FORM OF RETURN IN PART IV WHEREOF AN ASS ESSEE IS TO GIVE PARTICULARS OF INCOME FROM A BUSINESS, PROFESSION O R VOCATION. THE PARTICULARS CONSIST, IN THE FIRST INSTANCE, OF PROF IT OR LOSS AS PER PROFIT AND LOSS ACCOUNT; THEN THERE ARE SEVERAL ITEMS WHICH HA VE TO BE ADDED TO THE FIGURE OF PROFITS OR DEDUCTED FROM THE FIGURE OF LO SS; AND THEN FOLLOW SEVERAL ITEMS WHICH ARE TO BE DEDUCTED FROM THE PRO FITS OR ADDED TO THE FIGURE OF LOSSES. AMONGST THE ITEMS WHICH ARE TO BE DEDUCTED, THE LAST ITEM IS 'ANY OTHER ALLOWABLE EXPENSE WHICH HAS NOT BEEN CHARGED IN ARRIVING AT THE ABOVE FIGURE OF PROFITS'. IT IS UNDER THIS HEAD THAT THE ASSESSEE CLAIMED RS. 1,80,000 AS THE RETURN IN THIS CASE WAS MADE AF TER THE CONCILIATION BOARD HAD FIXED THE AMOUNT OF BONUS. OBVIOUSLY, THI S AMOUNT OF RS. 1,80,000 IS AN ALLOWABLE EXPENSE. OBVIOUSLY, AGAIN, IT HAS NOT BEEN CHARGED IN ARRIVING AT THE FIGURE OF PROFITS ACCORD ING TO THE PROFIT AND LOSS ACCOUNT. THEREFORE, IT WAS AN AMOUNT THAT COULD LEG ITIMATELY BE SHOWN AS A DEDUCTION UNDER THIS PART OF THE STATUTORY FORM O F RETURN, AND THE ASSESSEE WERE, IN OUR OPINION, ENTITLED TO HAVE THI S DEDUCTION OR ALLOWANCE. THERE IS NO DISPUTE, AND THERE CAN BE NO NE, AS TO THE REASONABLENESS OF THE QUANTUM WHICH MIGHT HAVE BEEN MATERIAL IF THERE HAD BEEN NO CONCILIATION AND AN AWARD IN REGARD TO THE BONUS. THE ONLY DISPUTE RELATES TO THE YEAR IN WHICH THE AMOUNT SHO ULD BE ALLOWED. IN OUR OPINION, THE AMOUNT WAS RIGHTLY ALLOWABLE IN THE AS SESSMENT YEAR 1952-53 AND THE TRIBUNAL CAME TO THE CORRECT CONCLUSION.' - 14 - ITA NO.2695/AHD/2017 DCIT VS. AMJAY MEDI-MAX (INDIA) PVT. LTD. ASST.YEAR 2011-12 3. IN THE ABOVE VIEW OF THE MATTER, NO ELABORATE RE ASONS ARE REQUIRED TO BE GIVEN AS THE CONTROVERSY ALREADY STANDS CONCLUDED. IT IS AMPLY CLEAR THAT THE ONLY DISPUTE IS WITH REGARD TO THE YEAR IN WHICH THE AMO UNT SHOULD BE ALLOWED. WE AGREE WITH THE VIEW ADOPTED BY THE TRIBUNAL AND ACC ORDINGLY THE QUESTION RAISED IS ANSWERED IN FAVOUR OF ASSESSEE AND AGAINST THE R EVENUE. TAX APPEAL NO. 1773 OF 2008 IS ACCORDINGLY DISMISSED. IN VIEW OF THE AB OVE WE DO NOT FIND ANY REASON TO DISTURB THE FINDING OF LD. CIT-A. HENCE THE GROU ND OF APPEAL OF THE REVENUE IS DISMISSED. FINDING NO SUCH CHANGE OF CIRCUMSTANCES IN THE CASE IN HAND BEFORE US, RESPECTFULLY RELYING UPON THE JUDGMENT PASSED BY TH E CO-ORDINATE BENCH, WE CONFIRM THE ORDER PASSED BY THE FIRST APPELLATE AUTHORITY. HENC E, THIS GROUND OF APPEAL PREFERRED BY THE REVENUE IS DISMISSED. 15. THE 5 TH GROUND OF APPEAL IS GENERAL IN NATURE AND NOT ORDE R NEED BE PASSED. 16. IN THE RESULT, REVENUES APPEAL IS DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 30/04/2019 SD/- SD/- ( PRAMOD KUMAR ) ( MS. MADHUMITA ROY ) VICE PRESIDENT JUDICIAL MEMBER AHMEDABAD; DATED 30/04/2019 PRITI YADAV, SR.PS - 15 - ITA NO.2695/AHD/2017 DCIT VS. AMJAY MEDI-MAX (INDIA) PVT. LTD. ASST.YEAR 2011-12 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. () / THE CIT(A)-1, AHMEDABAD. 5. , ! ' , #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, //TRUE COPY// / ( DY./ASSTT. REGISTRAR) !, #$ / ITAT, AHMEDABAD 1. DATE OF DICTATION 29.04.2019 (DICTATION PAGES 14) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 30.04.2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 30.04.2019 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER