The DCIT, Circle-4, Ahmedabad V. Gujarat State Financial Services Ltd., Ahmedabad

ITA 293/AHD/2010

• Counselvise Citation: 29320514 RSA 2010
• Duration Of Justice: 2 year(s) 10 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 25-10-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 29-01-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ALOK JOSHI
• Keywords: Business income; Depreciation; Opportunity of being heard; Earning of tax free income; Bad and doubtful debts
• Section: 234B; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMADABAD BEFORE SHRI D.K.TYAGI , JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ITA NO. 1129/AHD/2009 & 153/AHD/2010 ASSESSMENT YEARS : 2005-06 & 2006-07 GUJARAT STATE FINANCIAL SERVICES LTD. WING B, 3 RD FLOOR, KHANIJ BHAVAN, 132 FT RING ROAD, NEAR UNIVERSITY GROUND, VASTRAPUR, AHMADABAD 380 052 V/S . THE JT. COMMISSIONER OF INCOME TAX, AHMADABAD, RANGE-4, AHMEDABAD PAN NO. AAAC G5581B (APPELLANT) .. (RESPONDENT) ITA NO. 1557/AHD/2009 & 293/AHD/2010 ASSESSMENT YEARS : 2005-06 & 2006-07 THE JT. COMMISSIONER OF INCOME TAX, AHMADABAD, RANGE-4, AHMEDABAD V/S . GUJARAT STATE FINANCIAL SERVICES LTD. WING B, 3 RD FLOOR, KHANIJ BHAVAN, 132 FT RING ROAD, NEAR UNIVERSITY GROUND, VASTRAPUR, AHMADABAD 380 052 (APPELLANT) .. (RESPONDENT) BY REVENUE SHRI ALOK JOSHI, CIT. D.R. /BY ASSESSEE SHRI SANJAY R. SHAH, A.R. /DATE OF HEARING 25.10.2012 /DATE OF PRONOUNCEMENT 28.12.2012 O R D E R ITA NOS. 1129 & 1557/AHD/09 & 153 & 293/AHD/2010 A.Y. 2005-06 & 06-07 PAGE 2 PER : T.R.MEENA, ACCOUNTANT MEMBER THESE ARE CROSS APPEALS FILED BY THE ASSESSED IN IT A NOS. 1129/AHD/09 & 153/AHD/10 AND BY THE REVENUE IN ITA NOS. 1557/AH D/09 & 293/AHD/10, WHICH HAVE EMANATED FROM THE ORDERS OF CIT(A)-VIII, AHMEDABAD, DATED 30.01.2009 FOR A.Y. 2005-06 & 29.09.2009 FOR A.Y. 2 006-07. THESE TWO CROSS APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. THE EFFE CTIVE GROUNDS OF BOTH CROSS APPEALS ARE AS UNDER: ( FOR A.Y. 05-06) GROUNDS OF ITA NO.1129/AHD/2009 1. THE ORDER PASSED BY THE COMMISSIONER OF INCOME T AX (APPEALS) IS ERRONEOUS AND REQUIRES TO BE MODIFIED. IT IS SUBMITTED THAT BE SO DONE NOW. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE ADDITION MADE BY AO IN RESPECT OF THE REVERSAL OF 'PROVISION FOR DIMINUTION IN VALUE OF I NVESTMENT' OF RS.16,77,234/- ON THE GROUND THAT THE APPELLANT' S CLAIM WAS PURELY NOTIONAL & IT WAS NOT PROVED THAT THE IN VESTMENT WERE STOCK IN TRADE AND THE SAME WOULD BE ALLOWED O NLY ON TRANSFER TAKES PLACE. ON THE FACTS & CIRCUMSTANCE OF THE CASE IT IS SUBMITTED THAT THE FINDINGS OF THE CIT(A ) ARE INCORRECT AS THE APPELLANT'S PLEA WAS FOR EXCLUSION OF THE REVERSAL OF PROVISION MADE IN EARLIER YEAR WHICH HA D BEEN TAXED IN THAT YEAR AND AGAIN TAXED IN THE YEAR UNDE R CONSIDERATION BY THE AO AS APPEAL FOR THOSE YEARS W ERE PENDING. IT IS SUBMITTED IT BE SO HELD NOW. ITA NOS. 1129 & 1557/AHD/09 & 153 & 293/AHD/2010 A.Y. 2005-06 & 06-07 PAGE 3 2.1 IN THE FACTS & CIRCUMSTANCES OF THE CASE, TH E COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE DIRECTED THE AO TO EXCLUDE THE SAID REVERSAL OF THE 'PROVISION FOR DIMINUTION IN VALUE OF INVESTMENT' W HILE COMPUTING THE TOTAL INCOME AS NON EXCLUSION HAS LED TO TAXING THE SAME AMOUNT IN TWICE IN TWO DIFFERENT YE ARS. IT IS SUBMITTED IT BE SO HELD NOW. 3. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED I N CONFIRMING THE DISALLOWANCE UNDER SECTION 14A OF TH E ACT IN RESPECT OF INTEREST PAID ON BORROWINGS MADE FOR INVESTMENTS IN TAX FREE SECURITIES OF RS.4.47 CRORE S (91.45 - 86.98) CRORES. IN THE FACTS AND CIRCUMSTANCES OF T HE CASE IT IS SUBMITTED THAT THE PROVISIONS OF SECTION 14A ARE NOT APPLICABLE. IT IS SUBMITTED IT BE SO HELD NOW. 3.1 THE COMMISSIONER OF INCOME TAX (APPEALS) HAS E RRED IN REDUCING GROSS BLOCK OF ASSET OUT OF OWN FUNDS FOR DETERMINING OWN FUNDS AVAILABLE FOR INVESTMENT IN T AX FREE SECURITIES. APPELLANT SUBMITS THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE NO SUCH REDUCTION WAS REQ UIRED TO BE MADE. IT IS SUBMITTED THAT IT BE SO HELD NOW. 3.2 THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE OF RS.4,48,429/- OUT OF ADMINISTRATIVE EXPENSES UNDER SECTION 14A OF THE AC T AS RELATING TO EARNING OF INCOME FROM TAX FREE SECURIT IES. IN THE FACTS AND CIRCUMSTANCES OF THE CASE IT IS SUBMI TTED THAT NO DISALLOWANCE WAS REQUIRED TO BE MADE OUT OF THE ADMINISTRATIVE EXPENSES UNDER SECTION 14A OF THE AC T. IT IS SUBMITTED THAT IT BE SO HELD NOW. 4. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE OF THE BAD DEBTS WRITTE N OFF AMOUNTING TO RS.13,50,40,960/- FOR THE REASON THAT IT HAS ITA NOS. 1129 & 1557/AHD/09 & 153 & 293/AHD/2010 A.Y. 2005-06 & 06-07 PAGE 4 NOT BEEN PROVED THAT THE SAME HAVE BECOME BAD DURIN G THE YEAR. ON THE FACTS & CIRCUMSTANCE OF THE APPEL LANT'S CASE IT IS SUBMITTED THAT THE AMENDED SECTION DOES NOT REQUIRE THE APPELLANT TO PROVE THAT THE DEBT HAS BE COME BAD DURING THE YEAR BUT REQUIRES WRITING OFF OF THE BAD DEBT OR PART THEREOF AS IRRECOVERABLE IN THE BOOKS OF AC COUNT. IT IS SUBMITTED THAT IT BE SO HELD NOW. 4.1 THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THAT THE APPELLANT HAD NOT FULFILLED THE CONDITIONS U/S 36(2) OF THE ACT. IT IS SUBMITTED THAT THE BAD DEBT WRITTEN OFF WAS DEBT WHICH REPRESENTS MONEY LENT IN THE ORDINARY COURSE OF BUSINESS OF MONEY LENDING WHICH IS CARRIED OUT BY THE APPELLANT AND ACCORDINGLY THE AP PELLANT HAD FULFILLED THE CONDITIONS OF SECTION 36(2) OF TH E ACT AND WAS HENCE ENTITLED TO DEDUCTION UNDER SECTION 36(1) (VII) OF THE ACT. IT IS SUBMITTED THAT IT BE SO HELD NOW. 5. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THAT THE APPELLANT WAS NOT ENTITLED TO DEPRECIATION @ 40% ON THE VEHICLES GIVEN ON LEASE. IT IS SUBMITTED THAT THE APPELLANT SATISFIED THE CONDITIO NS PRESCRIBED IN APPENDIX I TO THE INCOME TAX RULES AN D HENCE WAS ENTITLED TO HIGHER RATE OF DEPRECIATION. IT IS SUBMITTED THAT IT BE SO HELD NOW. 5.1 THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN HOLDING THAT THE APPELLANT HAD MADE THE CLAIM FOR DEPRECIATION @40% FOR THE FIRST TIME IN THE YEAR UN DER CONSIDERATION. IN THE FACTS AND CIRCUMSTANCE OF THE CASE, THE APPELLANT SUBMITS THAT IT HAS BEEN GRANTED DEPR ECIATION @ 40% ON THESE ASSETS IN ALL THE EARLIER YEAR AND D URING THE YEAR IT HAD ONLY SOUGHT DEPRECIATION ON THE WDV ON THOSE ASSETS. IT WAS ACCORDINGLY ENTITLED TO DEPRE CATION IN ITA NOS. 1129 & 1557/AHD/09 & 153 & 293/AHD/2010 A.Y. 2005-06 & 06-07 PAGE 5 THE YEAR UNDER CONSIDERATION @ 40%. IT IS SUBMITTE D IT BE SO HELD NOW. 6. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRE D IN HOLDING THAT INTEREST CHARGED UNDER SECTION 234B WA S CONSEQUENTIAL. IN THE FACTS AND CIRCUMSTANCES OF TH E CASE IT IS SUBMITTED THAT INTEREST U/S 234B IS NOT CHARGEAB LE. IT IS SUBMITTED THAT IT BE SO HELD NOW. GROUNDS OF ITA NO.1557/AHD/2009 1. THE LEARNED CIT (A) ERRED IN LAW AND ON FACTS I N DELETING THE DISALLOWANCE OF PROVISIONS FOR DOUBTABLE DEBTS AMOUNTING TO RS.1,29,66,421/- (1999-2000) AND RS.6,04,18,812/- (2001-02) AS THE ISSUE HAS NOT BEC OME FINAL. 2. THE LEARNED CIT (A) ERRED IN LAW AND ON FACTS IN DIRECTING THE ASSESSING OFFICER TO ALLOW DEPRECIATION AMOUNTI NG TO OF RS. 63,06,996/- ON SALE AND LEASE BACK TRANSACTIONS . ( FOR A.Y. 06-07) GROUNDS OF ITA NO.153/AHD/2010 1. THE ORDER PASSED BY THE COMMISSIONER OF INCOM E TAX (APPEALS) IS ERRONEOUS AND REQUIRES TO BE MODIFIED. IT IS SUBMITTED THAT BE SO DONE NOW. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THAT THE APPELLANT WAS NOT ENTITLED TO DEPRECIATION @ 30% ON THE VEHICLES GIVEN ON LEASE. IT IS SUBMITTED THAT THE APPELLANT SATISFIED THE CONDITIO NS PRESCRIBED IN APPENDIX I TO THE INCOME TAX RULES AN D HENCE WAS ENTITLED TO HIGHER RATE OF DEPRECIATION. IT IS SUBMITTED THAT IT BE SO HELD NOW. ITA NOS. 1129 & 1557/AHD/09 & 153 & 293/AHD/2010 A.Y. 2005-06 & 06-07 PAGE 6 2.1 THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN HOLDING THAT THE APPELLANT HAD MADE THE CLAIM FOR DEPRECIATION @30% FOR THE FIRST TIME IN A.Y. 2005-0 6. IN THE FACTS AND CIRCUMSTANCE OF THE CASE, THE APPELLA NT SUBMITS THAT IT HAS BEEN GRANTED DEPRECIATION @ 30% ON THESE ASSETS IN ALL THE EARLIER YEAR EXCEPT A.Y. 20 05-06 AND DURING THE YEAR IT HAD ONLY SOUGHT DEPRECIATION ON THE WDV ON THOSE ASSETS. IT WAS ACCORDINGLY ENTITLED TO DE PRECATION IN THE YEAR UNDER CONSIDERATION @ 30%. IT IS SUBMI TTED IT BE SO HELD NOW. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DIRECTING THE AO TO WORK OUT DISALLOWANCE U/S 14 A BY APPLYING RULE 8D OF THE INCOME TAX RULES. 14A. IN T HE FACTS & CIRCUMSTANCES OF THE CASE IT IS SUBMITTED T HAT NO DISALLOWANCE U/S 14A IS REQUIRED TO BE MADE. IT IS SUBMITTED THAT IT BE SO HELD NOW. 3.2 THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN NOT UPHOLDING THAT SECTION 14A WAS NOT APP LICABLE TO THE APPELLANT'S CASE AS THE INVESTMENTS IN SECUR ITIES YIELDING TAX FREE INCOME WERE MADE FROM OWN FUNDS O F THE APPELLANT AND NO EXPENSES ARE INCURRED IN RELATION TO THE EXEMPT INCOME. IT IS SUBMITTED IT BE SO HELD NOW. 3.3 THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) ERRED IN DIRECTING TO APPLY RULE 8D WITH RETROSPECTIVE EF FECT WHEN THE RULE WAS INSERTED IN STATUTE BOOK W.E.F. 24.03. 2008 AND HENCE WAS NOT APPLICABLE TO YEAR UNDER CONSIDERATIO N. IT IS SUBMITTED THAT IT BE SO HELD NOW. 4. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN HOLDING THAT INTEREST CHARGED UNDER SECTION 234B, 2 34C AND 234D WAS CONSEQUENTIAL. IN THE FACTS AND CIRCUMSTANCES OF THE CASE IT IS SUBMITTED THAT INTE REST U/S ITA NOS. 1129 & 1557/AHD/09 & 153 & 293/AHD/2010 A.Y. 2005-06 & 06-07 PAGE 7 234B, 234C AND 234D ARE NOT CHARGEABLE. IT IS SUBMI TTED THAT IT BE SO HELD NOW. GROUNDS OF ITA NO.293/AHD/2010 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION OF RS.28,22,430/- BEING BAD DEBTS WHICH HA D BEEN WRITTEN OFF IN EARLIER YEARS. 2. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELE TING THE ADDITION OF RS.47,95,000/- ON ACCOUNT OF REVERSAL O F INCOME (DIMINUTION IN VALUE OF INVESTMENT). 3. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELE TING THE DISALLOWANCE OF DEPRECIATION AMOUNTING TO RS.28,38, 136/-. THE ASSESSEE COMPANY IS A STATE OWNED ENTERPRISE EN GAGED IN THE BUSINESS OF PROVIDING FINANCIAL ASSISTANCE TO INDUSTRIAL UNI TS. 2. THE FIRST GROUND OF APPEAL IS GENERAL, WHICH IS DISMISSED. 3. THE SECOND GROUND OF ASSESSEE FOR A.Y. 05-06 IS AGAINST PROVISION FOR DIMINUTION IN VALUE OF INVESTMENT OF RS. 16,77,234/ -, WHICH HAS NOT BEEN PRESSED BY LD. COUNSEL FOR THE APPELLANT BECAUSE TH E CIT(A) HAD RECTIFIED HIS ORDER DATED 30.10.2009 WHEREAS IN REVENUES GROUND NO.2 FOR A.Y. 06-07, THE LD. A.O. MADE ADDITION ON ACCOUNT OF REVERSAL OF P ROVISION FOR DIMINUTION IN VALUE OF INVESTMENT OF RS.47,95,000/-. LD. COUNSEL FOR THE APPELLANT CLAIMED THAT THIS PROVISION HAD ALREADY BEEN ADDED BACK IN THE INCOME OF THE ASSESSEE IN EARLIER YEAR. THEREFORE, HE HAS REDUCE D THIS AMOUNT FROM COMPUTATION OF INCOME. THIS ASPECT IS REQUIRED TO BE VERIFIED BY THE A.O. THEREFORE, THIS ISSUE FOR A.Y. 06-07 IS SET ASIDE T O THE A.O. THE A.O. IS ITA NOS. 1129 & 1557/AHD/09 & 153 & 293/AHD/2010 A.Y. 2005-06 & 06-07 PAGE 8 DIRECTED TO GIVE REASONABLE OPPORTUNITY OF BEING HE ARD TO THE APPELLANT AND ALLOW THE CLAIM AS PER LAW. 4. THE THIRD GROUND OF ASSESSEE IN BOTH ASSESSMENT YEARS I.E. 05-06 & 06- 07 ARE AGAINST CONFIRMING THE DISALLOWANCE U/S.14A OF THE IT ACT IN RESPECT OF INTEREST PAID ON BORROWINGS MADE FOR INVESTMENTS IN TAX FREE SECURITIES OF RS.4.47 CRORES FOR A.Y. 05-06 & RS. 5.22 CRORES IN A.Y. 06-07. LD. A.O. OBSERVED THAT THE APPELLANT COMPANY HAD SHOWN EXEMP T INCOME U/S.10(15)(IV)(H) & 10(23G) AT RS. 7,54,13,707/- IN A.Y. 05-06 & RS. 7,95,36,982/- IN 06-07. THE APPELLANT HAD ALSO CLA IMED DIVIDEND INCOME AS EXEMPTED AT RS.69,86,140/- U/S. 10(34) & RS. 68,66, 000/- U/S. 10(35) OF THE IT ACT. THUS, TOTAL EXEMPTED INCOME CLAIMED BY THE AS SESSEE WAS AT RS. 8,23,99,847/- IN A.Y. 05-06 & RS. 8,94,20,000/- IN A.Y. 06-07. AS ASSESSEE HAS NOT DEBITED ANY EXPENDITURE ON ACCOUNT OF EARNI NG OF EXEMPTED INCOME U/S. 14A OF THE IT ACT. THE A.O. HAD GIVEN REASONA BLE OPPORTUNITY ON THIS ISSUE. THE APPELLANT FILED REPLY BEFORE THE A.O., WHICH WAS CONSIDERED BY HIM. AFTER CONSIDERING THE LEGAL POSITION ON THIS ISSUE, HE DISALLOWED RS.4,96,91,759/- IN A.Y. 05-06 & RS. 5,27,99,753/- IN A.Y. 06-07 U/S. 14A OF THE LT ACT. 5. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE AP PELLANT CARRIED THE MATTER BEFORE CIT(A), WHO HAD PARTLY CONFIRMED THE ADDITION IN A.Y. 05-06, WHICH IS OBSERVED AS UNDER: 7.4 I HAVE CONSIDERED THE FACTS OF THE CASE AND SU BMISSIONS OF THE LD. A.R. CAREFULLY. IT IS SEEN THAT THE A.O. HAS M ADE THE PROPORTIONATE DISALLOWANCE OF INTEREST AMOUNTING TO RS.4,92,43,330/- ITA NOS. 1129 & 1557/AHD/09 & 153 & 293/AHD/2010 A.Y. 2005-06 & 06-07 PAGE 9 BY CONSIDERING THE ENTIRE TAX FREE INVESTMENTS AMOU NTING TO RS.91.45 CRORES ON THE PRESUMPTION THAT SAME WERE MADE OUT O F INTEREST BEARING FUNDS. THE APPELLANT DURING THE RELEVANT P ERIOD WAS HAVING OWN FUNDS CONSISTING OF SHARE CAPITAL AND FREE RESE RVES AMOUNTING TO RS.86.07 CRORES, DEPRECIATION FUND AT RS.66.77 L AKHS AND PROVISION FOR DIMINUTION AT 10.77 LAKHS. THEREFORE TREATING THE ENTIRE INVESTMENT AS OUT OF BORROWED FUNDS IGNORING THE AV AILABILITY OF OWN FUND IS NOT SUPPORTED BY FACTUAL LINKS. THEREFORE, IN THE GIVEN CIRCUMSTANCES WITHOUT ANY SUPPORTING MATERIAL IT CA N NOT BE HELD THAT THE ENTIRE INTEREST COST WORKED OUT BY THE A.O. IS ATTRIBUTABLE TO THE INTEREST FREE INCOME. IT WOULD BE LOGICAL TO ALLOW CREDIT OF THE FUNDS AVAILABLE TO THE APPELLANT DURING RELEVANT PERIOD F OR WORKING OUT THE INTEREST COST ON THE INVESTMENT IN TAX FREE SECURIT IES. SINCE, THE INVESTMENT IN TAX FREE SECURITIES HAS BEEN SHOWN AT RS.91.45 CRORES AS AGAINST OWN FUNDS TO THE TUNE OF RS.86.98 CRORE, THE INTEREST ON EXCESS INVESTMENT IS REQUIRED TO BE DISALLOWED U/S. 14A OF THE ACT ACCORDINGLY. THE A.O. IS DIRECTED TO WORK OUT SUCH INTEREST ON RS.91.45 CRORE RS.86.98 CRORE (AFTER TAKING INTO ACCOUNT INVESTMENT IN GROSS BLOCK) ACCORDINGLY. THE DISALL OWANCE TO THAT EXTENT IS, THEREFORE CONFIRMED. FOR A.Y. 06-07, HE RELIED UPON THE ORDER OF SPECIAL BENCH ITO VS. DAGA CAPITAL MANAGEMENT PVT. LTD. 312 ITR (AT) 01 AND A.O. WAS DIRECTED TO APPLY RULE 8D FOR DISALLOWANCE U/S.14A. 6. NOW THE ASSESSEE IS BEFORE US. LD. COUNSEL FOR THE APPELLANT CONTENDED THAT THERE WAS NO DIRECT NEXUS BETWEEN BO RROWINGS AND INVESTMENTS IN TAX FREE SECURITIES. AS PER ASSESSE E, THE SECTION 14A IS NOT APPLICABLE. HE ALSO PLACED RELIANCE ON FOLLOWING D ECISIONS: ITA NOS. 1129 & 1557/AHD/09 & 153 & 293/AHD/2010 A.Y. 2005-06 & 06-07 PAGE 10 (I) GUJARAT INDUSTRIAL INVESTMENT CORPORATION LIMIT ED IN ITA NO. 4378/AHD/2007 (ITAT AHMADABAD) (II) CIT V. HERO CYCLES LTD. (2010) 323 ITR 518 (P & H) (III) METALMAN AUTO (P.) LTD. (2011) 11 TAXMANN.COM 51 (P & H) (IV) GUJARAT POWER CORPORATION LIMITED IN TAX APPEA L NO. 1587 OF 2009. HE FURTHER ARGUED THAT OWN FUNDS SHOULD HAVE BEEN C OMPARED DIRECTLY WITH THE INVESTMENTS WITHOUT REDUCING THE VALUE OF GROSS BLO CK OF FIXED ASSETS FROM THE SAME. IF THERE ARE SUFFICIENT OWN FUNDS THEN NO DI SALLOWANCE U/S. 14A IS CALLED FOR. HE ALSO PLACED RELIANCE ON BOMBAY HIGH COURT DECISION, IN CASE OF RELIANCE UTILITIES & POWER LTD. 313 ITR 0340 (BOM). THE LD. COUNSEL ARGUED THAT DISALLOWANCE MADE BY THE A.O. OUT OF ADMINISTR ATIVE EXPENSES WERE NOT CALLED FOR AS THERE WAS NO NEXUS, HAD BEEN ESTABLIS HED BY THE A.O. BETWEEN THEM. FROM THE SIDE OF THE REVENUE, LD. CIT DR VEH EMENTLY RELIED UPON THE ORDERS OF LOWER AUTHORITIES AND REQUESTED TO CONFIR M THE ADDITION MADE BY A.O. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE AS WELL AS LD. CIT DR FAIRLY AGREED THAT THE ISSUE IS SQUARELY COVERED BY THE ASSESSEE S OWN CASE IN ITA NO. 403/AHD/2005 FOR A.Y. 01-02, ITA NO. 865/AHD/ 2006 FOR A.Y. 02-03, ITA NO. 2158/AHD/2006 FOR A.Y. 2003-04 & 2176/AHD/2007 FOR A.Y. 04-05, WHEREIN THE TRIBUNAL HAS SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER BY OBSERVING AS UNDER: 6. WE HAVE HEARD LEARNED DR AND LEARNED AR. WE NOTICED THAT THE ASSESSEE ENTERED INTO FIVE LEASE T RANSACTIONS WITH GSRTC. THEY ARE FIRST TRANSACTION WAS IN FI NANCIAL YEAR 1993-94 WHEN, DEPRECIATION WAS CLAIMED AT RS.59,97, 155/-. ITA NOS. 1129 & 1557/AHD/09 & 153 & 293/AHD/2010 A.Y. 2005-06 & 06-07 PAGE 11 THE SECOND LEASE TRANSACTION WAS ALSO ENTERED INTO IN A.Y. 1994-95 WHEREIN DEPRECIATION OF RS.40,18,720/- WAS CLAIMED AND ALLOWED. THE THIRD LEASE TRANSACTION WAS ENTER ED INTO IN F.Y. 1996-97 ON WHICH THE DEPRECIATION APPROX. OF RS.2,00,06,325/- WAS CLAIMED. FORTH TRANSACTION TO OK PLACE IN A.Y. 1998-99 IN WHICH DEPRECIATION OF RS.4,01,38,57 6/- WAS CLAIMED AND ALLOWED. FIFTH ALSO TOOK PLACE IN A.Y . 1998-99 IN WHICH THE DEPRECIATION OF RS.7,99,42,946/- WAS CLAI MED. IT IS STATED BY THE LEARNED AR OF THE ASSESSEE THAT NO FR ESH LEASE TRANSACTION HAS TAKEN PLACE THIS YEAR AND DEPRECIAT ION IN RESPECT OF OLD LEASE TRANSACTIONS HAS ONLY BEEN CLA IMED THIS YEAR. THEREFORE, FOLLOWING THE PRINCIPLE OF CONSIS TENCY, AS PROPOUNDED IN CIT VS. H.P. COTTON TEXTILE MILLS LTD . 311 ITR 436, CIT VS. MALBOROUGH POLYCHEM PVT. LTD., 309 ITR 43; CIT VS. MOONLIGHT BUILDERS AND DEVELOPERS 307 ITR 197 A ND ACIT VS. GENDALAL HAZARILAL & CO. 263 ITR 679 WHEREIN IT IS HELD THAT EVEN THOUGH IN INCOME-TAX PROCEEDINGS PRINCIPL E OF RES- JUDICATA IS NOT APPLICABLE, BUT CONSISTENCY HAS TO BE MAINTAINED UNLESS THERE IS MANIFEST DISTINGUISHABLE FACTS. IN EARLIER YEARS, CLAIM OF DEPRECIATION WAS ACCEPTED B Y THE REVENUE WHICH HAS NOW BECOME FINAL, THE REVENUE CAN NOT DISALLOW THE PRESENT CLAIM, UNLESS FACTS AND CIRCUM STANCES ARE DISTINGUISHABLE. THEREFORE, THE REVENUE IS REQUIRE D TO MAINTAIN A JUDICIAL CONSISTENCY BETWEEN ITSELF AND TAXPAYERS. AS A RESULT, WE DO NOT FIND ANY MERIT IN THE CLAIM OF THE REVENUE AND THIS GROUND OF THE REVENUE IS DISMISSED . IN VIEW OF THE ABOVE WE SET ASIDE THIS ISSUE TO THE FILE OF ASSESSING OFFICER TO DECIDE IN TERMS OF TRIBUNALS DECISION OF ASSESSEE S OWN CASE (SUPRA) FOR ASSESSMENT YEAR 2001-02 AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING ITA NOS. 1129 & 1557/AHD/09 & 153 & 293/AHD/2010 A.Y. 2005-06 & 06-07 PAGE 12 HEARD TO THE ASSESSEE. THIS GROUND OF ASSESSEES A PPEAL IS ALLOWED FOR STATISTICAL PURPOSES FOR BOTH ASSESSMENT YEARS. 7. ASSESSEES GROUND NO. 3.2 FOR A.Y. 05-06 & GROUN D NO. 3.1 & 3.3 FOR A.Y. 06-07 WERE AGAINST CONFIRMING THE ADDITION U/S . 14A ON ACCOUNT OF ADMINISTRATIVE EXPENSES AND APPLICABILITY OF RULE 8 D. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE AS WELL AS LD. CIT DR ARE AGREED WITH IN VIEW OF THE DECISION BY THIS TRIBUNAL IN ASSESSEES OWN CASE (S UPRA). THE ISSUE IS SQUARELY COVERED IN ITA NO. 403/AHD/2005 FOR A.Y. 2 001-02, WHEREIN THE TRIBUNAL HAS DISALLOWED THE PROPORTIONATE ADMINISTR ATIVE EXPENSE AT 1% BY GIVING FOLLOWING FINDING IN PARA 10 AS UNDER: 10. WE HAVE HEARD LEARNED DR AND LEARNED AR. THIS IS UNDISPUTED FACT THAT THE ADMINISTRATIVE EXPENSES HAVE BEEN INC URRED ON TAX FREE SECURITIES. THE AO DISALLOWED PRO RATA EXPENSES AT RS.92.97 LAKHS AS PER THE WORKING GIVEN BY HIM AND REFERRED ABOVE. T HE CLAIM OF ADMINISTRATIVE EXPENSES AND OTHER EXPENSES AMOUNTED TO RS.9,91,10,622/- AND NOT RS. 92,97,250/-. IF IT IS CONSIDERED THAT 10% DISALLOWANCE IS TO BE MADE OUT OF ADMINISTRATIVE AN D OTHER EXPENSES, THEN TOTAL DISALLOWANCE WOULD AMOUNT TO RS.99,11,06 2/-. SINCE LEARNED CIT(A) HAS RESTRICTED THE DISALLOWANCE TO RS.9.91 L AKHS, WHICH IS ONLY ABOUT 1% OF THE TOTAL CLAIM AND NOT 10% AND REVENUE HAS NOT FILED ANY APPEAL AGAINST THIS WORKING, THE DISALLOWANCE IS TO BE TREATED AS MOST REASONABLE, AND NO INTERFERENCE IS CALLED FOR IN TH E IMPUGNED ORDER ON THIS ISSUE. THIS GROUND OF THE ASSESSEE IS REJECTE D. ITA NOS. 1129 & 1557/AHD/09 & 153 & 293/AHD/2010 A.Y. 2005-06 & 06-07 PAGE 13 RULE 8D IS APPLICABLE FROM THE A.Y. 08-09 AS HELD B Y HONBLE BOMBAY HIGH COURT IN CASE OF GODREJ & BOYCE MANUFACTURING CO. LTD. V. CIT (2010) 234 CTR 001. 8. WE FIND THAT IN THE PRESENT YEAR, THE FACTS ARE NOT AVAILABLE, ACCORDINGLY, THIS ISSUE IS BEING SET ASIDE TO THE FILE OF THE AS SESSING OFFICER TO FOLLOW THE DECISION TAKEN IN ASSESSEES OWN CASE IN ITAT NO. 4 03/AHD/2005 FOR ASSESSMENT YEAR 2001-02 DATED 10.07.2009 AFTER PROV IDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THIS I SSUE OF THE ASSESSEES, APPEAL IN BOTH ASSESSMENT YEARS, IS ALLOWED FOR STA TISTICAL PURPOSES. 9. GROUND NO.4 & 4.1 OF ASSESSEE FOR A.Y. 05-06 & G ROUND NO.1 OF REVENUE FOR A.Y. 06-07 IS AGAINST CONFIRMING THE DI SALLOWANCE OF BAD DEBT WRITTEN OFF AMOUNTING RS. 13,50,40,960/- IN A.Y. 05 -06. FOR THE REASONS THAT THE APPELLANT HAD NOT PROVED THE DEBT BECOME BAD AN D ALSO THE BAD DEBT RELATED TO MONEY LENDING BUSINESS AND HAD NOT FULFI LLED THE CONDITION LAID DOWN U/S.36(2) OF THE IT ACT. THE A.O. IN A.Y. 05-06 HA D OBSERVED THAT THE ASSESSEE HAD CLAIMED BAD DEBT AT RS.13.5 CRORE. TH E A.O. HAD GIVEN REASONABLE OPPORTUNITY OF BEING HEARD TO VERIFY THE CONDITION PRESCRIBED U/S. 36 OF THE IT ACT. THE APPELLANT ALSO RESPONDED TO THE A.O. AND RELIED UPON THE VARIOUS CASES. THE A.O. ALSO ANALYZED THE FACT AND VARIOUS CASE LAWS RELIED UPON BY HIM ON PAGE NO.12 OF THE ASSESSMENT ORDER. AFTER RELYING THE DECISION OF HONBLE GUJARAT HIGH COURT IN CASE OF DHALL ENTERPRISES AND ENGINEERS PVT. LTD. VS. CIT, 207 CTR 729 AND HELD THAT THE ASSESSEE HAD ACTED UNILATERAL AND WRITTEN OFF DEBTS AS IRRICOVER ABLE IN THE BOOKS OF ACCOUNT ITA NOS. 1129 & 1557/AHD/09 & 153 & 293/AHD/2010 A.Y. 2005-06 & 06-07 PAGE 14 FOR THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YE AR. THE ASSESSEE HAD NOT MADE OUT ANY CASE TO RECORD THE CASE AS IRRECOVERAB LE. THE JUDGMENT OF THE ASSESSEE IN REGARDING DEBTS AS BAD DEBT IS ONLY REG ARDED AS CONVENIENT JUDGMENT TO SUIT IN CLAIM BUT NOT AN HONEST JUDGMEN T HAVING REGARD TO THE FINANCIAL POSITION OF THE ASSESSEE. THUS, HE MADE ADDITION OF RS.13,50,40,960/- IN THE INCOME OF THE ASSESSEE. H E FURTHER OBSERVED THAT WITHOUT PREJUDICE TO ABOVE, THE BAD DEBT, CLAIMED B Y THE APPELLANT REPRESENTED THE PRINCIPAL PORTION OF LOAN AMOUNT. THE DETAILS WERE GIVEN BY THE A.O. AT PAGE NO. 13 OF THE ASSESSMENT ORDER. ACCORDING TO HIM, THE ASSESSEE HAD NOT MADE FULL COMPLIANCE OF SECTION 36(2) OF THE IT ACT . THUS, BOTH WAYS, HE HELD THAT BAD DEBT OF RS.13,50,40,960/- IS NOT ALLOWABLE . 10. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE A SSESSEE CARRIED THE MATTER BEFORE CIT(A), WHO HAS CONFIRMED THE ADDITIO N BY FOLLOWING THE HONBLE GUJARAT HIGH COURT DECISION IN CASE OF DHALL ENTERP RISES AND ENGINEERS PVT. LTD. (SUPRA). 11. NOW THE APPELLANT IS BEFORE US. THE LD. COUNSE L FOR THE APPELLANT CONTENDED THAT THE POST AMENDMENT TO SECTION 36(1)( VII) CARRIED OUT THE FINANCE ACT, 1987. IT IS NO LONGER NECESSARY FOR T HE ASSESSEE TO ESTABLISH THAT THE DEBT HAD BECOME BAD DURING THE YEAR UNDER CONSI DERATION. HE ALSO RELIED UPON THE CIRCULAR NO. 551, DATED 23.01.1990 & IN CA SE OF T.R.F. LTD. VS. CIT (2010) 323 ITR 397 (SC) AND CLAIMED THAT THE ASSESSEE HAD WRITTEN OFF THES E DEBTS AS IRRECOVERABLE DURING THE YEAR UNDER CONSID ERATION IN BOOK OF ACCOUNT, WHATEVER DEBT WRITTEN OFF REPRESENTED MONEY LENDING IN THE ORIGINAL COURSE OF ITA NOS. 1129 & 1557/AHD/09 & 153 & 293/AHD/2010 A.Y. 2005-06 & 06-07 PAGE 15 BUSINESS OF MONEY LENDING CARRIED ON BY THE APPELLA NT. THE APPELLANT EARNED INTEREST INCOME FROM THE MONEY LENDING IN COURSE OF ITS BUSINESS WHICH HAD BEEN OFFERED TO TAX AS BUSINESS INCOME AND SO HAD A CCEPTED BY THE DEPARTMENT. IF ANY LOSS INCURRED BY THE APPELLANT WAS A TRADING LOSS AND HAD BEEN INCURRED IN THE ORDINARY COURSE OF BUSINESS OF MONEY LENDING. THEN, IT IS ALLOWABLE. THE APPELLANT HAD FULFILLED THE CONDITI ON PRESCRIBED U/S. 36(2). HE ALSO RELIED ON AJAR ENTRADE (P.) LTD. V. ACIT 2 SOT 511 (TAHD). HE FURTHER RELIED UPON THE DECISION OF ITAT, DELHI A BENCH I N CASE OF DCIT VS. SREI INTERNATIONAL FINANCE LTD. IN ITA NOS. 4643 & 4881/ DEL/2003 FOR A.Y. 2000-01, WHEREIN ANY ADVANCES MADE BY THE NBFC BECOME IRRECO VERABLE AS HELD ALLOWABLE AS BAD DEBT. SIMILAR VIEWS HAD BEEN HELD BY ITAT D BENCH IN CASE OF TULIP STARS HOTELS LTD. VS. ACIT IN ITA NOS . 2007/DEL/2002, 5025/DEL/2004 & 3007/DEL/2006 FOR A.Y. 1998-99, 99- 00 & 03-04. THUS, HE CLAIMED THAT IT SHOULD BE ALLOWED AS PER RULING OF THE VARIOUS HONBLE HIGH COURTS. LD. CIT DR VEHEMENTLY RELIED UPON THE ORDE RS OF LOWER AUTHORITIES AND REQUESTED TO CONFIRM THE ADDITION. 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD AND GONE THROUGH THE LEGAL POSITION. THE APPELLANT HAD WRITTEN OFF THE BAD DEBTS AS IRRECOVERABLE IN THE BOOKS OF ACCOUNT. TH E LEGAL POSITION FOR THE CLAIM OF BAD DEBT IS THAT THE APPELLANT HAD TO WRIT E OFF THE BAD DEBT IN THE BOOKS OF ACCOUNT AS HELD IN BY THE HONBLE SUPREME COURT IN CASE OF T.R.F. LTD. VS. CIT (SUPRA). THE FACTS OF THE APPELLANT ARE IDENTICAL WITH THE CASE OF SREI INTERNATIONAL FINANCE LTD. (SUPR) AS NBFC. HO WEVER, THE ASSESSEE HAD ITA NOS. 1129 & 1557/AHD/09 & 153 & 293/AHD/2010 A.Y. 2005-06 & 06-07 PAGE 16 RECOVERED 28.22 LACS IN SUBSEQUENT YEAR FROM 13.5 C RORE. THUS, THE BAD DEBTS ARE ALLOWED AS CLAIMED TO THE EXTENT OF RS.13 ,22,18,530/-. ACCORDINGLY, GROUND NOS. 4 & 4.1 OF THE A.Y. 05-06 OF THE APPELL ANT ARE ALLOWED PARTLY AND GROUND NO. 1 OF THE REVENUE FOR A.Y. 06-07 IS ALLOW ED. THE A.O. IS DIRECTED TO EXCLUDE THE AMOUNT OF RS.28,22,430/- FROM THE INCOM E OF THE A.Y. 06-07. 13. GROUND NOS. 5 & 5.1 FOR A.Y. 05-06 OF THE APPEL LANT & GROUND NO. 2, 2.1 & 3 FOR A.Y. 06-07 OF THE REVENUE ARE AGAINST CONFI RMING THE HIGHER RATE OF DEPRECIATION @ 40% ON VEHICLE GIVEN ON LEASE AND CL AIM HAS BEEN MADE IN FIRST TIME. THE A.O. OBSERVED THAT COMPANY IS A ST ATE OWNED ENTERPRISE ENGAGED IN THE BUSINESS OF PROVIDING FINANCIAL ASSI STANCE TO INDUSTRIAL UNITS. THE APPELLANT HAD CLAIM FOR HIGHER DEPRECIATION ON LEASING TRANSACTION. THE ASSETS HAD BEEN LEASED OUT IN EARLIER YEARS TO VARI OUS COMPANIES I.E. BUSES TO GSRTC, PLANT & MACHINERY TO GUJARAT ELECTRICITY BOA RD, LARSEN & TURBO, PUJA EXPORTS, RAJASTHAN BREWERIES AND RAJESH TEXTILE IND USTRIES. THE APPELLANT CLAIMED DEPRECIATION ON SALE AND LEASE TRANSACTION AT RS.63,06,966/- IN A.Y. 05-06 & RS. 28,38,136/- IN A.Y. 06-07. THE LD. A.O. GAVE REASONABLE OPPORTUNITY OF BEING HEARD. THE APPELLANT ALSO FIL ED REPLY BUT HE DISALLOWED THE DEPRECIATION ON THE BASIS OF FINDINGS GIVEN IN ASSESSEES OWN CASE IN A.Y. 04-05. THE DEPRECIATION CLAIMED BY THE APPELLANT I N A.Y. 06-07 @ 30% BECAUSE CHANGE IN THE RATE OF DEPRECIATION IN PLACE OF 40%. 14. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE A SSESSEE CARRIED THE MATTER BEFORE THE CIT(A), WHO HAD CONFIRMED THE ADD ITION BY OBSERVING THAT THE APPELLANT HAD RUN THESE BUSES ON HIRE. AS PER INCOME TAX RULE, THE ITA NOS. 1129 & 1557/AHD/09 & 153 & 293/AHD/2010 A.Y. 2005-06 & 06-07 PAGE 17 HIGHER RATE OF DEPRECIATION CAN BE ALLOWED ON VEHIC LES USED FOR RUNNING HIRE BY THE APPELLANT. HE ALSO RELIED UPON HONBLE BOMBAY HIGH COURT DECISION IN CASE OF KOTAK MAHINDRA FINANCE LTD. VS. DCIT 265 ITR 114 (B OM.), WHEREIN THE DIFFERENCE BETWEEN LEASE AND HIRE HAD BEEN CONS IDERED BY THE HONBLE COURT. THE ASSESSEE IS A LEASING AND FINANCE COMPA NY. ITS INCOME IS FROM LEASE RENT, BILL DISCOUNTING AND SERVICE CHARGES. THEREFORE, HONBLE BOMBAY HIGH COURT HELD THAT MERELY BECAUSE THE ASSESSEE LE TS OUT MOTOR BUSES, MOTOR TRUCKS AND MOTOR VANS TO ITS CUSTOMERS, IT CANNOT B E STATED THAT THE ASSESSEE IS USING THE SAID VEHICLES IN THE BUSINESS OF RUNNI NG THEM ON HIRE. BY CONSIDERING THE ABOVE JUDGMENT, THE LD. CIT(A) CONF IRMED THE ADDITION. 15. NOW THE ASSESSEE IS BEFORE US. LD. COUNSEL FOR THE APPELLANT CONTENDED THAT NO ASSETS HAVE BEEN GIVEN ON LEASE D URING THE CURRENT YEAR. THE DEPRECIATION HAD BEEN CLAIMED ON WDV OF ASSETS ON WHICH DEPRECIATION WAS ALLOWED IN EARLIER YEAR @ 40%. HE ALSO PLACED RELIANCE ON FOLLOWING DECISIONS: (I) CIT V. BANSAL CREDITS LTD. & ORS. (2003) 259 IT R 69 (DEL) (II) CIT V. GOODWILL INDIA LTD. (2004) 268 ITR 480 (DEL.) (III) CIT V. MADAN & CO. (2001) 254 ITR 544 (MAD.) (IV) AGARWAL FINANCE CO. (P.) LTD. V. CIT (2009) 28 DTR (CAL) 102 HE FURTHER, ARGUED THAT WHEN DIFFERENT VIEWS HELD B Y THE VARIOUS COURTS ON SAME ISSUE, IT SHOULD BE DECIDED IN FAVOUR OF THE A SSESSEE AS HELD BY THE HONBLE SUPREME COURT IN CASE OF VEGETABLE PRODUCTS LTD. (1973) 88 ITR 192 ITA NOS. 1129 & 1557/AHD/09 & 153 & 293/AHD/2010 A.Y. 2005-06 & 06-07 PAGE 18 (SC), IN FAVOUR OF THE ASSESSEE. FROM THE SIDE OF REVEN UE, LD. CIT DR VEHEMENTLY RELIED UPON THE ORDERS OF THE LOWER AUTH ORITIES. 16. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE HAD NOT SOLD AND LEASED BACK THE NEW ASSETS DURING THE YEAR, THE DEPRECIATION CLAIMED BY THE APPELLANT ON WRITTEN DOWN VALUE OF SALE AND LEASE BACK ASSETS. THE IDENTICAL ISSUE IN ASSESSEES OWN CASE IN ITA NO. 2763/AHD/2007, WHEREIN REVENUES APPEAL HAD BEEN DISMISSED BY THE CO-ORDINATE C BENCH, AHMADABAD FOR A.Y. 04-05 . THE SIMILAR ISSUE WAS CONSIDERED BY C BENCH, AHMADABAD IN ASSESSEES OW N CASE IN ITA NO. 865/AHD/2006 & ITA NO.1927/AHD/2007 FOR A.Y. 02-03 AND HELD THAT SALE AND LEASE BACK IS A CONTINUING TRANSACTION ADDITION ADM ITTED BY BOTH THE SIDES. RESPECTFULLY, FOLLOWING THE TRIBUNALS DECISION, WE DISMISS THIS ISSUE OF REVENUES APPEAL. THE REVENUE HAD NOT DISTINGUISHE D THE FINDINGS OF CO- ORDINATE BENCH GIVEN FOR EARLIER YEAR WHEN TRANSACT IONS ARE SAME AND DEPRECIATION CLAIMED ON WRITTEN DOWN THE VALUE OF T HE SAME ASSETS ON SALE AND LEASE BACK TRANSACTION, THEN, WE HAVE TO FOLLOW THE EARLIER DECISION OTHERWISE MATERIAL FACTS ARE DIFFERENT. THUS, WE A RE OF CONSIDERED VIEW THAT BY FOLLOWING THE CO-ORDINATE BENCH DECISION IN EARLIER YEAR, WE ALLOW THE APPEAL OF THE ASSESSEE IN HIS FAVOUR AND DISMISS THE REVEN UES APPEAL ON THESE GROUNDS. 17. ASSESSEES GROUND NOS. 6 FOR A.Y. 05-06 & GROUN D NO.4 FOR A.Y. 06-07 ARE AGAINST CHARGING OF INTEREST U/S.234B, 234C & 2 34D ARE CONSEQUENTIAL TO THE ABOVE FINDING. THEREFORE, THE A.O. IS DIRECTED TO TAKE DECISION AS PER LAW. ITA NOS. 1129 & 1557/AHD/09 & 153 & 293/AHD/2010 A.Y. 2005-06 & 06-07 PAGE 19 18. IN THE RESULT, THE ASSESSEE & REVENUES APPEALS FOR BOTH ASSESSMENT YEARS ARE PARTLY ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 28.12.2012 SD/- SD/- ( D.K.TYAGI ) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. '#$ / APPELLANT 2. &'#$ / RESPONDENT 3. )*)+ ' ', / CONCERNED CIT 4. ' ',- ' / CIT (A) 5. 01'' +, ' ''' +, 34 * / DR, ITAT, AHMEDABAD 6. 167 89 / GUARD FILE. BY ORDER/ , :/3' )' ' ''' +, 34 * < STRENGTHEN PREPARATION & DELIVERY OF ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION 19 & 20.12.2012 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE XXX 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 21.12.2012 4) DATE OF CORRECTION 26.12.2012 5) DATE OF FURTHER CORRECTION XXX 6) DATE OF INITIAL SIGN BY MEMBERS 28.12.2012 7) ORDER UPLOADED ON ,, ,, 8) ORIGINAL DICTATION PAD HAS BEEN ENCLOSED IN THIS FILE YES 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 28.12.2012