DCIT, CIR-4(1), KOLKATA, Kolkata V. M/s Goodricks Group Ltd., Kolkata

ITA 304/KOL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1496 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 26-03-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR
• Assessee Lawyers: P N RAJENDRAN
• Keywords: Business income; Depreciation; Business expenditure; Earning of tax free income; Revised return
• Section: 40A(3); 80HHC; 14A; 139(5); 32; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA [BEFORE HONBLE SRI N.V.VASUDEVAN, JM & SHRI WASE EM AHMED, AM] I.T.A NO.304/KOL/2015 ASSESSMENT YEAR : 2002-0 3 D.C.I.T., CIRCLE-4(1) -VS.- M/S. GOODRICK E GROUP LTD. KOLKATA KOLKATA [PAN : AABCG 1614 O] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI SAURABH KUMAR, ADDL. CIT(DR) FOR THE RESPONDENT : SHRI.P.N. RAJENDRAN, FCA DATE OF HEARING : 24.08.2017. DATE OF PRONOUNCEMENT : 31.08.2017. ORDER PER N.V.VASUDEVAN, JM THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER D ATED 31.12.2014 OF CIT(A)-2, KOLKATA RELATING TO A.Y.2002-03. 2. GROUND NO.1 RAISED BY THE REVENUE READS A S FOLLOWS :- 1 THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED ON IN LAW AS WELL AS ON FACTS IN HOLDING THAT CESS ON GRE EN LEAF OF RS.1 ,07,53,006/- IS AN ALLOWABLE EXPENDITURE, IGNORING THE FACT THAT IT IS DIRECTLY ATTRIBUTABLE TO CORE AGRICULTURE ACTIVITIES OF THE ASSESSEE ASSESSED TO TAX UNDER STATE AGRICULTURE INCOME TAX BEYOND THE PURVIEW OF CENTRAL INCOME TAX AND ON THE SAME ISSUE SLP IS PENDING IN THE CASE OF AFT INDUSTRIES. 3. THE ASSESSEE IS A COMPANY AND IS CARRYING O N THE BUSINESS OF GROWING AND MANUFACTURING OF TEA. BESIDES THE ABOVE THE AFORESAID BUSINESS, THE ASSES SEE ALSO MANUFACTURES INSTANT TEA AND BLENDED TEA. INCOME FROM GROWING, MANUFACTURING AND SALE OF TEA WOULD BE COMPOSITE INCOME, WHICH MEANS IT COMPRISES AGRICULTURAL INCOME TO THE EXTENT OF GROWING TEA, WHICH IS NOT CHARGEAB LE TO TAX AND NON-AGRICULTURAL INCOME 2 ITA NO.304/KOL/2015 M/S. GOODRICKE GROUP LTD. A.YR..2002-03 2 TO THE EXTENT IT COMPRISES OF INCOME FROM MANUFACTU RE AND SALE OF TEA, WHICH INCOME IS CHARGEABLE TO TAX. RULE 8 OF THE INCOME TAX RULES, 1962 PROVIDES METHOD OF COMPUTATION FOR COMPOSITE INCOME FROM MANUFACTURE O F TEA. UNDER RULE 8 (1) OF THE INCOME TAX RULES, 1962 (RULES) INCOME DERIVED FROM SALE OF TEA GROWN AND MANUFACTURED BY THE SELLER IN INDIA SHALL BE COMPUT ED AS IF IT WERE INCOME DERIVED FROM BUSINESS, AND FORTY PER CENT OF SUCH INCOME SHALL B E DEEMED TO BE INCOME LIABLE TO TAX. ACCORDING TO THE AO CESS ON GREEN TEA LEAF LEVIED W AS AN EXPENDITURE WHICH WAS ATTRIBUTABLE TO THE ACTIVITY OF GROWING OF TEA AND WOULD THEREFORE BE NOT ALLOWABLE AS DEDUCTION WHILE COMPUTING INCOME FROM MANUFACTURE A ND SALE OF TEA. ACCORDING TO THE AO, THE FIRST STEP SHOULD BE COMPUTE INCOME FROM GR OWING AND MANUFACTURING TEA AND WITHOUT ALLOWING CESS ON GREEN TEA LEAF AS A DEDUCT ION THEREAFTER 40% SHOULD BE ATTRIBUTED TO TAXABLE INCOME AND 60% ATTRIBUTED TO AGRICULTURAL INCOME. THE PLEA OF THE ASSESSEE WAS THAT THE ENTIRE GREEN LEAF CESS HAD TO BE ALLOWED AS DEDUCTION WHILE COMPUTING THE COMPOSITE INCOME FROM MANUFACTURE AND SALE OF TEA AND ONLY ON THE LOSS OR PROFIT ARRIVED AT AFTER SUCH DEDUCTION RULE 8(1) OF THE RULES HAVE TO BE APPLIED AND 40% OF SUCH SUM HAS TO BE CONSIDERED AS TAXABLE INC OME OR LOSS FROM THE BUSINESS OF MANUFACTURE AND SALE OF TEA. 4. ON APPEAL BY THE ASSESSEE, THE CIT(A) DELETED THE DISALLOWANCE MADE BY THE AO BY FOLLOWING THE ORDER OF THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF AFT INDUSTRIES LTD. VS CIT (270 ITR167) WHEREIN IT WAS HELD THAT GREEN LEAF C ESS HAS TO BE ALLOWED AS DEDUCTION BEFORE APPLYING RULE 8(1) OF THE RULES A ND ONLY THEREAFTER 40% OF SUCH INCOME HAS TO BE BROUGHT TO TAX. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REV ENUE HAS RAISED GR.NO.1 BEFORE THE TRIBUNAL. THE LEARNED DR APPEARING ON BEHALF OF TH E REVENUE RELIED ON THE ORDER OF THE AO. ON THE OTHER HAND, THE LD.COUNSEL FOR THE A SSESSEE RELIED ON THE ORDERS OF THE LD. CIT(A). 3 ITA NO.304/KOL/2015 M/S. GOODRICKE GROUP LTD. A.YR..2002-03 3 6. AFTER HEARING THE RIVAL SUBMISSIONS AND ON C AREFUL PERUSAL OF THE MATERIALS AVAILABLE ON RECORD, KEEPING IN VIEW OF THE FACT TH AT THE ISSUE IS CONCLUDED BY THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF CIT VS AFT INDUSTRIES LTD . 270 ITR 167 (CAL) WHERE THE AMOUNT PAID AS CESS W AS HELD AS ELIGIBLE FOR DEDUCTION IN COMPUTING THE COMPOSITE INCOME UNDER RULE 8 OF I .T. RULES. THIS ISSUE IS, THEREFORE, DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE R EVENUE BY UPHOLDING THE ORDER OF THE C.I.T.(A) WHO HAS ALLOWED THE DEDUCTION OF PAYMENT OF CESS ON GREEN LEAVES IN COMPUTING THE COMPOSITE INCOME FROM TEA BUSINESS OF THE ASSESSEE UNDER RULE 8 OF THE I.T. RULES. THE FACT THAT THE SLP IS PENDING BEFORE THE HON'BLE SUPREME COURT AGAINST THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT IN RESPECT OF AFT INDUSTRIES LTD. VS CIT (270 ITR 167) WILL NOT HAVE ANY EFFECT SINCE THE H ON'BLE APEX COURT HAS NEITHER SET ASIDE THE ORDERS OF THE CALCUTTA HIGH COURT NOR GRA NTED ANY STAY. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO BROUGHT TO OUR NOTICE THE DEC ISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. M/S.APEEJAY TEA CO. LTD. CIV IL APPEAL NO.3168 OF 2006 DATED 6.8.2015 WHEREIN THE HONBLE SUPREME COURT HAS UPHE LD VIEW AS WAS TAKEN IN THE CASE OF AFT INDUSTRIES LTD. (SUPRA). IN VIEW OF THE ABO VE, GR.NO.1 RAISED BY THE REVENUE IS DISMISSED. 7. THE LD. COUNSEL FOR THE ASSESSEE ALSO DREW OUR ATTENTION TO THE FACT THAT RELIANCE PLACED BY THE AO ON THE DECISION OF THE HONBLE GAU HATI HIGH COURT IN THE CASE OF JOREHAUT GROUP LTD. 226 ITR 622 (GAU) WAS NOT CORR ECT AND IN THIS REGARD BROUGHT TO OUR NOTICE THAT THE HONBLE GAUHATI HIGH COURT IN T HE CASE OF ASSAM COMPANY LTD 275 ITR 609 (GAU) AFTER REFERRING TO ITS DECISION IN TH E CASE OF JOREHAUT GROUP LTD. (SUPRA) CLARIFIED THAT CESS ON GREEN LEAF PAID HAD TO BE AL LOWED AS DEDUCTION WHILE COMPUTING THE COMPOSITE INCOME. THE AFORESAID DECISION ALSO S UPPORTS THE CONCLUSION OF CIT(A). IT IS ALSO BROUGHT TO OUR NOTICE THAT IN ASSESSEES OW N CASE ON AN IDENTICAL ISSUE THIS TRIBUNAL IN ITA NOS. 513 AND 514/KOL/2004 FOR A.Y.1 999-2000 AND 2000-2001 BY ITS ORDER DATED 13.08.2004 HAS ALSO HELD THAT CESS ON G REEN LEAVE HAS TO BE ALLOWED AS 4 ITA NO.304/KOL/2015 M/S. GOODRICKE GROUP LTD. A.YR..2002-03 4 DEDUCTION WHILE COMPUTING THE COMPOSITE INCOME UNDE R RULE 8 OF THE RULES. IN VIEW OF THE ABOVE WE DO NOT FIND ANY MERITS IN GROUND NO.1. 8. GROUND NO.2 RAISED BY THE REVENUE READS AS FOLLOWS :- 2 THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED ON FACTS AS WELL AS IN LAW IN HOLDING THAT LEASE RENT OF RS. 36,48,000/-, IS AN ALLOWABLE EXPENDITURE, IGNORING THE FACT THAT ON SIMILAR ISSU E REVENUE PREFERRED THE CASE BEFORE THE HIGH COURT FOR THE AY. 1999-2000 & 2000- 01, WHICH IS STILL PENDING. 9. THE ASSESSEE TOOK A BUILDING ON LEASE SITUATED AT 14, GURUSADAY ROAD, KOLKATA- 700019 FOR THE PURPOSE OF ITS BUSINESS. THE ASSESSE E PAID A SUM OF RS.36,48,000/-AS RENT IN RESPECT OF THE AFORESAID PREMISES. THE AO WAS OF THE VIEW THAT SINCE THE ASSESSEE WAS THE OWNER OF THE AFORESAID PREMISES, THE CLAIM FOR DEDUCTION OF RENT PAID HAD NOT BEEN ALLOWED. THE AO HAD NOT DISPUTED THE FACT THAT THE PREMISES WERE USED BY THE ASSESSEE FOR THE PURPOSE OF ITS BUSINESS. 10. ON APPEAL BY THE ASSESSEE CIT(A) FOLLOWIN G THE DECISION OF THE HONBLE ITAT, KOLKATA IN ASSESSEES OWN CASE IN ITA NO.498/KOL/20 04 FOR A.Y.2000-01 ORDER DATED 13.08.2004 WHEREIN SIMILAR ADDITION MADE BY THE AO WAS DELETED, DELETED THE ADDITION MADE BY THE AO. 11. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE ORDER OF ITAT FOR A.Y.2000-01 WAS ALSO FOLLOWED BY THE TRIBUNAL IN A SSESSEES OWN CASE IN ITA NO.971/KOL/2015 FOR A.Y.2007-08 VIDE ITS ORDER DATE D 04.08.2017. THE LD. DR RELIED ON THE ORDER OF AO. 12. AFTER CONSIDERING THE RIVAL SUBMISSIONS IT IS SEEN THAT THIS TRIBUNAL IN THE ORDERS CITED AFTER CONSIDERING THE MATERIAL ON RECORD CAME TO THE CONCLUSION THAT THE ASSESSEE WAS NOT THE OWNER OF THE PREMISES TAKEN ON LEASE AN D THEREFORE THE DEDUCTION ON ACCOUNT 5 ITA NO.304/KOL/2015 M/S. GOODRICKE GROUP LTD. A.YR..2002-03 5 OF RENT COULD NOT BE DISALLOWED AS THE USER OF THE PREMISES FOR THE PURPOSE OF THE BUSINESS WAS NOT DISPUTED. FOLLOWING THE ORDERS OF THE TRIBUNAL ON AN IDENTICAL ISSUE WE ARE OF THE VIEW THAT ORDER OF CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. GROUND NO.2 RAISED BY THE REVENUE IS ACCORDINGLY DISMISSED. 13. GROUND NO.3 RAISED BY THE REVENUE READS AS FOLLOWS :- 3 THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED ON FACTS AS WELL AS IN LAW IN HOLDING THAT DISALLOWANCE U/S 14A OF RS.2,39,168/- WAS NOT WARRANTED AS NOTHING WAS INCURRED TO EARN DIVIDEND, IGNORING THE FACT THAT THERE WAS INVESTMENT DURING THE PERIOD FROM WHICH DIVIDEN D WAS RECEIVED AND TO EARN DIVIDEND, ADMINISTRATIVE EXPENSES CANNOT BE RULED O UT, AND REFERENCE MAY BE DRAWN FROM THE CASE M/S CHEMINVEST LTD. WHEREIN DEL HI ITAT HELD THAT PROVISIONS FOR DISALLOWANCE CAN BE INVOKED EVEN IF EXEMPT INCO ME WAS NOT RECEIVED IN ANY PARTICULAR PERIOD AND SAME VIEW HAS BEEN EXPRESSED BY CBDT VIDE ITS CIRCULAR NO.5/2014 DATED 11.02.2014. 14. THE ASSESSEE EARNED DIVIDEND INCOME OF RS.5 ,11,520/- WHICH WAS EXEMPT AND NOT CHARGEABLE TO TAX. ACCORDING TO THE ASSESSEE IT HAD NOT INCURRED ANY EXPENDITURE FOR EARNING THE DIVIDEND INCOME AND THEREFORE NO DISALL OWANCE OF EXPENSES FOR EARNING EXEMPT INCOME AS CONTEMPLATED U/S 14A OF THE INCOME TAX ACT, 1961 (ACT) SHOULD BE MADE. THE AO, HOWEVER, ESTIMATED AN EXPENSES OF RS.2,39168/- AS T HE PROBABLE EXPENDITURE THAT WOULD HAVE BEEN INCURRED BY THE AS SESSEE IN EARNING THE EXEMPT INCOME. IN MAKING THE AFORESAID ESTIMATE THE AO GAVE THE FOLLOWING REASONS :- EXPENSES FOR THE (A) HELP OF THE MANAGEMENT AND OTHER STAFF MEMBERS TO COLLECT THE DIVIDEND WARRANT AND DEPOSIT INTO THE BANK AND (B) MAINTENANCE OF A CONSOLIDATED ACCOUNT FOR BOTH RECEIPTS OF SALE PROC EEDS, INTEREST BEARING FUND AND UTILISATION OF A PART OF THE INTEREST BEARING FUND FOR INVESTMENT PURPOSE. IN VIEW OF SUCH REASONS HE ESTIMATED A PROPORTIONATE EXPENSES AT RS.2,39,168/- FOR EARNING THE AFORESAID DIVIDEND. 15. ON APPEAL BY THE ASSESSEE CIT(A) DELETED TH E ADDITION MADE BY THE AO FOR THE REASON THAT THERE WAS NO MATERIAL TO SHOW THAT THE EXPENSES DISALLOWED HAD BEEN 6 ITA NO.304/KOL/2015 M/S. GOODRICKE GROUP LTD. A.YR..2002-03 6 INCURRED FOR THE PURPOSE OF EARNING TAX FREE INCOME . THE CIT(A) HELD THAT THE ASSESSING OFFICER FAILED TO IDENTIFY ANY EXPENDITURE INCURRED FOR EARNING DIVIDEND INCOME WHICH WAS DEBITED IN THE ACCOUNTS. HE ALSO HELD THAT THER E WAS NO FRESH INVESTMENTS MADE IN SHARES DURING THE YEAR AND ACCORDINGLY THE INTEREST DEBITED IN THE ACCOUNT COULD NOT BE TREATED AS AN EXPENDITURE RELATABLE TO EARNING DIVI DEND INCOME. HE ALSO FOUND THAT THE DIVIDEND DECLARED BY THE DOMESTIC COMPANIES WERE DI RECTLY CREDITED BY THE BANK TO THE ASSESSEE'S ACCOUNT BY WAY OF ECS TRANSFER FOR WHICH NO EXPENDITURE HAD BEEN INCURRED. HE HELD THAT IN THE ABSENCE OF INCURRING ANY EXPEND ITURE FOR EARNING DIVIDEND INCOME THE DISALLOWANCE U/S 14A BY THE ASSESSING OFFICER O N PRESUMPTION OF EXPENDITURE BEING INCURRED FOR EARNING DIVIDEND INCOME CANNOT BE JUST IFIED UNLESS IT IS ESTABLISHED THAT EXPENDITURE HAD BEEN INCURRED IN EARNING DIVIDEND I NCOME AND SUCH EXPENDITURE HAD BEEN DEBITED AGAINST THE TAXABLE INCOME. THE ASSESS ING OFFICER WAS ACCORDINGLY DIRECTED TO DELETE THE DISALLOWANCE OF RS.2,39,618/- U/S 14A OF THE ACT. 16. AGGRIEVED BY THE ORDER OF CIT(A) THE REVENU E HAS RAISED GROUND NO.3 BEFORE THE TRIBUNAL. 17. AT THE TIME OF HEARING IT WAS BROUGHT TO OUR NOTICE THAT IDENTICAL ISSUE OF DISALLOWANCE U/S 14A OF THE ACT WAS CONSIDERED AND DECIDED BY THIS TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y.1999-2000 IN ITA NOS. 5 13 AND 514/KOL/2004 BY ITS ORDER DATED 13.08.2004. IN THE SAID ORDER THE TRIBUNAL R ESTRICTED THE DISALLOWANCE U/S 14A TO 1% OF THE DIVIDEND INCOME. THE FOLLOWING WERE THE RELEVANT OBSERVATIONS OF THE TRIBUNAL :- 5.1. WE HAVE HEARD BOTH THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. NO DOUBT THAT NO DIRECT EXPENSES HAS BEEN INCURRED BY THE ASSESSEE IN EARNING OR MAKING THE DIVIDEND INCOME. HOWEVER, THE ASSESSEE HAS CLAIMED THE COMPOSITE EXPENSES IN ITS PROFIT & LOSS ACCOUNT. SOME OF THE EXPENSES MAY BE ATTRIBUTABLE TO THE EARNING OF SUCH DIVIDEND INCOME. IT IS ..ADMITTED THAT NO NEW INVESTMENT IN SHARES HAS BEEN MADE DURING THE Y EAR AND NO BARROWED CAPITAL HAS BEEN UTILIZED FOR THE PURPOSE OF ACQUIRING THE SHARES. CONSIDERING THE TOTALITY 7 ITA NO.304/KOL/2015 M/S. GOODRICKE GROUP LTD. A.YR..2002-03 7 OF THE FACTS AND CIRCUMSTANCES, WE ARE OF THE CONSI DERED OPINION THAT IF 1% OF INCOME BY WAY OF DIVIDEND IS TREATED AS NECESSARY EXPENSES INCURRED IN RELATION TO EARNING OF DIVIDEND INCOME WHICH IS EXEMPTED UNDER THE ACT, IT WOULD MEET THE ENDS OF EQUITY AND JUSTICE. AND, THEREFORE, WE DIRE CT THE AO TO DISALLOW 1% OF DIVIDEND INCOME AS INADMISSIBLE EXPENDITURE AGAINST OTHER BUSINESS INCOME INASMUCH AS OF 1% OF SUCH DIVIDEND INCOME IS TO BE APPROPRIATED AGAINST THE DIVIDEND INCOME, WHICH IS EXEMPTED FROM TAX UNDER T HE PROVISION OF IT ACT. THE ORDER OF 'THE LD CIT(A) IS, THEREFORE, MODIFY TO TH AT EXTENT. 18. FOLLOWING THE AFORESAID DECISION, THE PARTI ES AGREED THAT THE DISALLOWANCE UNDER SEC.14A OF THE ACT BE RESTRICTED TO 1% OF THE DIVID END INCOME. WE ACCEPT THE SUBMISSIONS IN THIS REGARD AND DIRECT THE AO TO DIS ALLOW 1% OF THE EXEMPT INCOME AS EXPENSES DISALLOWABLE U/S 14A OF THE ACT. GROUND NO .3 RAISED BY THE REVENUE IS THUS PARTLY ALLOWED. 19. GROUND NO.4 RAISED BY THE REVENUE READS AS FOLLOWS :- 4 THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED ON FACTS AS WELL AS IN LAW IN HOLDING THAT DEPRECIATION ON A SSETS ACQUIRED OUT OF WITHDRAWAL FROM NABARD, THE ASSESSEE HAD TAKEN BENEFIT AND AGA IN DEPRECIATION ON SUCH ASSETS CANNOT BE ALLOWED AS THIS LEAD TO DOUBLE DED UCTION AGAINST THE BASIC PRINCIPLE OF TAXATION AND ON THE SAME ISSUE APPEAL IS PENDING BEFORE HON'BLE CALCUTTA HIGH COURT. 20. WE HAVE ALREADY SEEN THAT THE ASSESSEE IS IN THE BUSINESS OF GROWING AND MANUFACTURING OF TEA. UNDER SECTION 33AB OF THE ACT WHERE AN ASSESSEE CARRYING ON BUSINESS OF GROWING AND MANUFACTURING TEA, IF HE DEPOSITS ANY AMOUNT IN A SPECIFIED ACCOUNT WITH A BANK IN ACCORDANCE WITH A SCHEME THE N IT SHALL BE ALLOWED AS DEDUCTION IN COMPUTING ITS INCOME, EQUAL TO THE AMOUNT SO DEP OSITED. UNDER SECTION 33AB(B)(6) OF THE ACT IF THE MONEY DEPOSITED IS WITHDRAWN IN C ONNECTION WITH THE BUSINESS FOR MEETING ANY EXPENDITURE IN CONNECTION WITH THE BUSI NESS SUCH EXPENDITURE SHALL NOT BE ALLOWED IN COMPUTING THE INCOME CHARGEABLE UNDER TH E HEAD PROFITS AND GAINS OR BUSINESS OR PROFESSION . SECTION 33AB (6) OF THE ACT READS AS FOLLOWS :- 8 ITA NO.304/KOL/2015 M/S. GOODRICKE GROUP LTD. A.YR..2002-03 8 SECTION 33AB(6) WHERE AN AMOUNT STANDING TO THE CREDIT OF THE ASSE SSEE IN THE SPECIAL ACCOUNT OR IN THE DEPOSIT ACCOUNT IS UTILIZ ED BY THE ASSESSEE FOR THE PURPOSES OF ANY EXPENDITURE IN CONNECTION WITH SUCH BUSINESS IN ACCORDANCE WITH THE SCHEME SUCH EXPENDITURE SHALL NOT BE ALLOWED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUS INESS OR PROFESSION. 21. THE ASSESSEE WITHDREW A SUM OF RS.1,74,35,50 0/- FROM NABARD (SPECIFIED ACCOUNT) AND THIS AMOUNT WAS UTILIZED FOR ACQUISITI ON OF FIXED ASSET. THE DEPOSIT IN NABARD WAS ELIGIBLE FOR DEDUCTION U/S 33AB OF THE A CT. SINCE THE MONEY WAS WITHDRAWN AND USED FOR ACQUISITION OF FIXED ASSETS, THE AO WAS OF THE VIEW THAT THE DEPRECIATION CLAIMED ON THE FIXED ASSETS ACQUIRED B Y WITHDRAWING THE SUMS FROM NABARD ACCOUNT WAS AN EXPENDITURE IN CONNECTION WIT H THE BUSINESS CLAIMED BY THE ASSESSEE AND WAS LIABLE TO BE DISALLOWED U/S 33AB( 6) OF THE ACT. THE AO ACCORDINGLY DISALLOWED THE CLAIM OF DEDUCTION OF DEPRECIATION T O THE EXTENT OF RS.23,49,180/-. 22. ON APPEAL BY THE ASSESSEE THE CIT(A) FOLLOW ING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y.2001-02 IN ITA NO.2557/ KOL/2014 DATED 10.06.2005, DELETED THE ADDITION MADE BY THE AO. THE TRIBUNAL I N THE AFORESAID DECISION CAME TO THE CONCLUSION THAT DEPRECIATION IS NOT AN EXPENDITURE FALLING WITH THE AMBIT OF SECTION 33A. THE FOLLOWING WERE THE RELEVANT OBSERVATIONS OF CIT (A):- 6.2. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. IT IS NOTED FROM THE TEA BOARD SCHEME THAT CLAUSE ( 9) OF THE SCHEME DEALS WITH THE WITHDRAWAL AND UTILIZATION OF THE AMOUNT DEPOSITED WITH NABARD. THE SAID CLAUSE CONSISTS OF' SUB-CLAUSES (A) TO (K). ON PERU SAL OF THE SAID CLAUSES, IT IS NOTED THAT NO WITHDRAWAL CAN BE MADE ON ACCOUNT OF DEPREC IATION BEING AN EXPENDITURE. THEREFORE, THE QUESTION OF UTILIZATION OF WITHDRAWA L FROM NABARD ON ACCOUNT OF DEPRECIATION DOES NOT ARISE. THE SPECIFIED WITHDRAW AL AND UTILIZATION OF AMOUNT DEPOSITED WITH NABARD INCLUDE PURCHASE OF SPECIFIED MACHINERIES AND OTHER ASSETS ONLY. THE ASSETS SO ACQUIRED BEING CAPITAL I N NATURE IT WAS NOT AN ALLOWABLE EXPENDITURE IN COMPUTING THE INCOME UNDER THE HEAD 'PROFIT AND GAINS OF BUSINESS OR PROFESSION'. THERE IS NO FINDING BY THE ASSESSING OFFICER THAT T HE ASSESSEE HAS UTILIZED THE AMOUNT WITHDRAWN FROM NABARD FOR THE PURPOSE OF ANY EXPENDITURE IN 9 ITA NO.304/KOL/2015 M/S. GOODRICKE GROUP LTD. A.YR..2002-03 9 ACCORDANCE WITH THE SCHEME IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION'. THE ISSUE INVOLVED FOR CONSIDERATION IS NOT WHETHER DEPRECIATION IS AN EXPENDITURE OR NO T BUT WHETHER DEPRECIATION IS ALLOWABLE ON ASSETS WHICH HAVE BEEN PURCHASED OUT O F THE AMOUNTS WITHDRAWN FROM NABARD U/S 33AB(6). THE ISSUE INVOLVED IN THE DISPU TE IS COVERED BY THE ORDER OF THE KOLKATA BENCH OF THE TRIBUNAL IN ITA NO. 255 7/KOLJ2004, DATED 10.06.2005, FOR THE ASSESSMENT YEAR 2001-02, IN THE ASSESSEE CO MPANY'S OWN CASE. IN THE SAID CASE THE HON'BLE TRIBUNAL UPHELD THE DECISION OF TH E CIT(A) DELETING THE DISALLOWANCE OF DEPRECIATION ON THE ASSETS PURCHASE D OUT OF THE AMOUNT WITHDRAWN FROM NABARD. THE DEPRECIATION ON ASSETS IS DEALT WITH IN SECTION 32 OF THE ACT AND NOT UNDER SECTION 33AB OF THE ACT. SECTION 33AB HAS NO OVERRI DING EFFECT ON SECTION 32 AS THE SAID SECTION DOES NOT START WITH A NON-OBSTANTE CLAUSE 'NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT'. SINCE THIS ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE COMPANY BY THE HO NBLE KOLKATA IN ITA NO.2557/KOL/2004, DATED 10.06.2005, AND RESPECTFULL Y FOLLOWING THE SAID DECISION, THE ASSESSING OFFICER IS DIRECTED TO DELETE THE DEP RECIATION OF RS.23,49,180/- ADDED TO THE PROFIT U/S 33AB(6) OF THE ACT. 23. AGGRIEVED BY THE ORDER OF CIT(A) THE REVENUE HAS RAISED GROUND NO.4 BEFORE THE TRIBUNAL. 24. AT THE TIME OF HEARING IT WAS AGREED BY THE PARTIES THAT THE DECISION OF THE TRIBUNAL REFERRED TO BY CIT(A) IN THE IMPUGNED ORDER STILL H OLDS GOOD. IN VIEW OF THE ABOVE WE DO NOT FIND ANY MERITS IN GROUND NO.4 RAISED BY THE REVENUE AND THE SAME IS ACCORDINGLY DISMISSED. 25. GROUND NO.5 RAISED BY THE REVENUE READS AS FOLLOWS :- .5 THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED ON FACTS AS WELL AS IN LAW IN HOLDING THAT DEDUCTION U /S 80HHC IS TO BE APPLIED BEFORE APPORTIONMENT OF INCOME UNDER RULE-8, IGNORING THE FACT THAT DEDUCTION U/S 80HHC IS ALLOWABLE AGAINST INCOME ASSESSED TO CENTR AL INCOME TAX AND AS SUCH, IT IS TO BE ALLOWED AFTER APPORTIONMENT UNDER RULE- 8, CONTRARY EXCESS AMOUNT WOULD HAVE BEEN DEDUCTED FROM INCOME ASSESSEE TO CE NTRAL INCOME TAX AS ONLY 40% OUT COMPOSITE INCOME IS ASSESSED UNDER THE SAME . 26. THE ASSESSEE WAS ENTITLED TO CLAIM DEDUCTION U/S.80HHC OF THE ACT IN RESPECT OF INCOME DERIVED FROM THE BUSINESS OF EXPORT. ONE OF THE DISPUTE BEFORE THE AO ON THE 10 ITA NO.304/KOL/2015 M/S. GOODRICKE GROUP LTD. A.YR..2002-03 10 CLAIM OF THE ASSESSEE FOR DEDUCTION U/S.80HHC OF TH E ACT WAS AS TO WHETHER THE CALCULATION OF PROFIT IN THE MANNER LAID DOWN IN SU B-SECTION (3)(C)(I) AND (II) OF SEC.80HHC OF THE ACT IS TO BE DONE BY TAKING 40% OF THE PROFIT DERIVED FROM GROWING AND MANUFACTURING TEA OR BY 100% OF SUCH INCOME. IT WAS THE PLEA OF THE ASSESSEE THAT SECTION 80HHC OF THE ACT WAS ENACTED WITH A VIEW TO PROVIDE INCENTIVE TO EXPORTERS. THE WORDINGS OF SUB-SECTION (3) (A), (B) AND (C) AR E CLEAR AS TO THE COMPUTATION OF THE PROFITS DERIVED FROM SUCH EXPORTS AND ALSO COMPUTAT ION OF EXPORT PROFIT AS A PROPORTION TO THE PROFIT OF THE BUSINESS TO THE SAME PROPORTIO N AS TO THE EXPORT TURNOVER BEARS TO THE TOTAL TURNOVER OF THE BUSINESS. THE FORMULA AS PER SUB- SECTION 3(A), WHICH IS APPLICABLE TO THE APPELLANT'S CASE, IS AS FOLLOWS: EXPORT PROFIT = BUSINESS PROFIT X EXPORT TURNOVER TOTAL TURNOVER IN THIS FORMULA THERE IS NO SCOPE FOR TAKING THE BU SINESS PROFIT AT 40% THEREOF WHERE EXPORT TURNOVER AND TOTAL TURNOVER ARE TAKEN AT 100 %. THE APPELLANT SUBMITS THAT TAKING 40% BUSINESS PROFIT FOR COMPUTING DEDUCTION U/S 80H HC WOULD RENDER THE FORMULA UNWORKABLE. THUS THE FORMULA AS PER SUB-SECTION 3(A ) IN THE CASE OF APPELLANT WOULD BE AS FOLLOWS:- EXPORT PROFIT = 100% BUSINESS PROFIT X 1 00% EXPORT TURNOVER 100% TOTAL TURNOVER THUS THE FORMULA ADOPTED BY THE ASSESSING OFFICER F OR COMPUTING THE AMOUNT OF DEDUCTION U/S 80HHC WAS ERRONEOUS IN LAW. THE ASSES SING OFFICER COMPUTED THE SAID DEDUCTION AS UNDER: EXPORT PROFIT = 40% BUSINESS PROFIT X 100% E XPORT TURNOVER 100% TOTAL TURNOVER THE ASSESSEE RELIED ON THE DECISION OF THE HON'BLE SUPREME COURT HAD AN OCCASION TO CONSIDER THE FORMULA REFERRED TO IN SUB-SECTION (3) TO CALCULATE THE EXPORT PROFIT IN THE 11 ITA NO.304/KOL/2015 M/S. GOODRICKE GROUP LTD. A.YR..2002-03 11 CASE OF CIT VS LAKSHMI MACHINE WORKS (290 ITR 667) AND HELD THAT THAT WHILE INTERPRETING THE FORMULA U/S 80HHC ONE HAS TO GIVE A SCHEMATIC INTERPRETATION, OTHERWISE THE FORMULA BECAME UNWORKABLE. BY APPLYIN G THE INTERPRETATION OF SUB- SECTION (3) BY THE HON'BLE SUPREME COURT IN 290 ITR 667 (SUPRA), THE ASSESSEE CLAIMED THAT THE PROFIT OF BUSINESS SHOULD BE TAKEN AT 100% OF SUCH BUSINESS AND NOT 40% THEREOF IN ORDER TO MAKE THE FORMULA WORKABLE. 27. THE CIT(A) ON A CONSIDERATION OF THE ABOVE SUB MISSIONS WAS OF THE VIEW THAT PROFITS OF THE BUSINESS FOR THE PURPOSE OF COMPUTIN G DEDUCTION U/S 80HHC OF THE ACT WAS COMPOSITE INCOME UNDER THE HEAD INCOME FROM B USINESS OR PROFESSION AND NOT THE INCOME AFTER APPLYING RULE 8 OF THE IT RULES. T HE FOLLOWING WERE THE RELEVANT OBSERVATIONS OF CIT(A) : 8.3. AS FAR AS THE SECOND ISSUE IS CONCERNED, I .E. BUSINESS PROFITS FOR COMPUTING EXPORT PROFIT UNDER SUB-SECTION (3), I AM OF THE VI EW THAT PROFITS OF BUSINESS IS THE PROFITS AS COMPUTED IN ACCORDANCE WITH SECTIONS 30 TO 43D OF THE INCOME TAX ACT AND NOT 40% THEREOF AS PROVIDED IN RULE 8. MY SAID VIEW IS SUPPORTED BY THE SPECIAL BENCH OF KOLKATA TRIBUNAL 301 ITR (AT) 171 (SUPRA) AND ALSO THE OBSERVATIONS OF THE SUPREME COURT IN ITEM (V) IN 29 7 ITR 17 (SUPRA). THE ASSESSING OFFICER IS, THEREFORE, DIRECTED TO RECOMP UTE THE EXPORT PROFIT U/S 80HHC(3) TAKING THE BUSINESS PROFITS AS COMPUTED IN ACCORDANCE WITH THE SECTIONS 30 TO OF THE ACT BUT BEFORE APPLYING RULE 8 OF THE RULES AND DEDUCT SUCH PROFIT FROM GROSS TOTAL INCOME OF THE ASSESSEE COMPANY. 28. AGGRIEVED BY THE ORDER OF CIT(A) THE REVENU E HAS RAISED GROUND NO.5 BEFORE THE TRIBUNAL. 29. THE LD. DR RELIED ON THE ORDER OF AO. THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF CIT(A). AFTER CONSIDERING THE RIVAL SU BMISSIONS WE FIND THAT THE ISSUE RAISED BY THE REVENUE IN GROUND NO.5 IS SQUARELY CO VERED BY THE DECISION OF THE HONBLE ITAT SPECIAL BENCH IN THE CASE OF KANARAM SAHA AND SUBHASH SAHA 301 ITR (AT) 171(SB) (KOL). IN THE CASE BEFORE THE HONBLE SPEC IAL BENCH IN THE CASE OF KANARAM SAHA AND SUBHASH SAHA (SUPRA), ONE OF THE ISSUE RAI SED BEFORE THE SPECIAL BENCH WAS AS TO WHETHER IN DETERMINING THE QUANTUM OF DEDUCTION UNDER SECTION 80HHC , THE NON- 12 ITA NO.304/KOL/2015 M/S. GOODRICKE GROUP LTD. A.YR..2002-03 12 INCLUSION OF DISALLOWED BUSINESS EXPENSES IN 'PROFI TS OF BUSINESS' (HAVING EFFECT OF REDUCING THE DEDUCTION) IS WRONG, ARBITRARY, ERRONE OUS AND CONTRADICTORY (IN THE CASE BEFORE THE HONBLE SPECIAL BENCH, THE DISALLOWANCE OF EXPENSES WAS U/S.40A(3) OF THE ACT).IN THAT CASE THE ASSESSING OFFICER COMPUTED TH E INCOME OF THE ASSESSEE ON THE BASIS OF THE RETURNED INCOME BY MAKING CERTAIN DISALLOWAN CES UNDER SECTION 40A(3) AND OTHER EXPENSES. HE HOWEVER WHILE COMPUTING DEDUCTION U/S. 80HHC OF THE ACT DID NOT INCLUDE AMOUNT DISALLOWED U/S.40A(3) OF THE ACT AS PART OF THE PROFITS OF THE BUSINESS. THE SPECIAL BENCH HELD THAT THE EXPRESSION PROFITS AND GAINS OF BUSINESSFOR THE PURPOSE OF DEDUCTION U/S.80HHC OF THE ACT MEANS THE PROFITS AN D GAINS OF BUSINESS BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS CONTAINED IN SECTIONS 30 TO 43D OF THE INCOME-TAX ACT. THE FOLLOWING WERE THE RELEVANT FINDINGS OF THE HON BLE SPECIAL BENCH: 105. LEARNED COUNSEL FOR THE ASSESSEE HAD ALSO RAI SED AN ADDITIONAL GROUND IN BOTH THE ABOVE CASES WHICH WAS WITH REGARD TO CO MPUTATION OF DEDUCTION UNDER SECTION 80HHC . THE ADDITIONAL GROUND IS ADMITTED BY US VIDE OUR FINDING IN PARAGRAPH 3.1 ABOVE. WE HAVE CAREFULLY C ONSIDERED THE ARGUMENTS OF BOTH THE SIDES AND PERUSED THE MATERIAL PLACED B EFORE US. WE FIND THAT AT THE END OF SECTION 80HHC , THERE IS EXPLANATION WHICH DEFINES SEVERAL TERMS USED IN SECTION 80HHC . EXPLANATION (BAA) DEFINES THE WORDS 'PROFITS OF T HE BUSINESS', WHICH READS AS UNDER: (BAA) 'PROFITS OF THE BUSINESS' MEANS THE PROFITS O F THE BUSINESS AS COMPUTED UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PR OFESSION AS REDUCED BY: (1) NINETY PER CENT, OF ANY SUM REFERRED TO IN CLAU SES (IIIA), (IIIB), (IIIC), (IIID) AND (IIIE) OF SECTION 28 OR OF ANY RECEIPTS BY WAY OF BROKERAGE, COMMISSION , INTEREST, RENT, CHARGES OR ANY OTHER RECEIPT OF A S IMILAR NATURE INCLUDED IN SUCH PROFITS; AND (2) THE PROFITS OF ANY BRANCH, OF FICE, WAREHOUSE OR ANY OTHER ESTABLISHMENT OF THE ASSESSEE SITUATE OUTSIDE INDIA ; 106. FROM THE ABOVE IT IS EVIDENT THAT PROFITS OF B USINESS FOR THE PURPOSE OF SECTION 80HHC MEANS THE PROFITS OF BUSINESS AS COMPUTED UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION'. SECTION 29 OF THE INCOME-TAX ACT PROVIDES THAT PROFITS AND GAINS OF BUSINESS SHA LL BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS CONTAINED IN SECTIONS 30 TO 43D OF THE INCOME-TAX ACT. THUS, WHATEVER IS THE PROFITS AND G AINS OF THE BUSINESS AS COMPUTED BY THE ASSESSING OFFICER UNDER THE HEAD 'P ROFITS AND GAINS OF BUSINESS OR PROFESSION', SHOULD BE TAKEN AS PROFITS OF THE BUSINESS FOR THE 13 ITA NO.304/KOL/2015 M/S. GOODRICKE GROUP LTD. A.YR..2002-03 13 PURPOSE OF COMPUTATION OF DEDUCTION UNDER SECTION 80HHC . WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO RECOMPUTE THE DEDUC TION UNDER SECTION 80HHC AS PER OUR OBSERVATION ABOVE. THE RATIO OF THE AFORESAID DECISION, IF APPLIED TO THE FACTS OF THE PRESENT CASE CAN ONLY LEAD TO A CONCLUSION THAT PROFITS AND GAINS OF BUS INESS FOR THE PURPOSE OF COMPUTING DEDUCTION U/S.80HHC OF THE ACT SHOULD BE DETERMINED AS PER PROVISIONS CONTAINED IN SEC.30 TO 43D OF THE ACT BEFORE APPLYING RULE 8 OF THE RULES. IN THE LIGHT OF THE AFORESAID DECISION, WE FIND NO MERITS IN GROUND NO. 5 RAISED BY THE REVENUE. 30. GROUND NO.6 AND 7 RAISED BY THE REVENUE REA D AS FOLLOWS :- 6. THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED ON FACTS AS WELL AS IN LAW IN HOLDING THAT LONG TERM C APITAL LOSS ALLOWABLE TO THE ASSESSEE AS IT WAS SUBMITTED DURING THE COURSE OF A SSESSMENT PROCEEDINGS, IGNORING THE FACT THAT NEITHER IN ORIGINAL RETURN THE LONG T ERM CAPITAL LOSS WAS CLAIMED NOR DID ASSESSEE FILE REVISED RETURN U/S 139(5) FOR THE SAME, THE ASSESSING OFFICER HAS GOT NO POWER TO ENTERTAIN ANY CLAIM OTHERWISE THAN FILING A REVISED RETURN AS DECIDED BY THE HON'BLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT (284 ITR 323). 7. THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED ON FACTS AS WELL AS IN LAW IN HOLDING THAT LOSS INCURRED IN PRODUCTION OF INSTANT TEA ON THE GROUND THAT THE SAID ACTIVITY DOES NOT RELATE TO TH E COMBINED ACTIVITY OF GROWING AND MANUFACTURING OF TEA, IGNORING THE FACT THAT NE ITHER THE SAID LOSS WAS CLAIMED IN THE RETURN NOR DID ASSESSEE FILE REVISED RETURN FOR THE SAME, THE ASSESSING OFFICER HAS GOT NO POWER TO ENTERTAIN ANY CLAIM OTHERWISE T HAN FILING A REVISED RETURN AS DECIDED BY THE HON'BLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD.VS. CIT (284 ITR 323). 31. BOTH THE AFORESAID GROUNDS ARE IN RELATION TO ACTION OF CIT(A) IN ALLOWING LONG TERM CAPITAL LOSS AND IN DELETING THE LOSS INCURRED IN PRODUCTION OF INSTANT TEA AS PART OF THE COMPOSITE INCOME BEFORE APPLYING RULE 8 OF THE RULES. THESE CLAIMS HAD BEEN MADE BY THE ASSESSE BEFORE THE AO WITHOUT FILING TH E REVISED RETURN. THE AO REFUSED TO ENTERTAIN THE AFORESAID TWO CLAIMS FOR THE REASON T HAT A VALID REVISED RETURN OF INCOME U/S.139(5) OF THE ACT HAD NOT BEEN FILED MAKING SUC H A CLAIM BEFORE THE AO. ACCORDING TO THE AO IN THE LIGHT OF THE DECISION OF THE HONBLE SUPREME COURT IN THE 14 ITA NO.304/KOL/2015 M/S. GOODRICKE GROUP LTD. A.YR..2002-03 14 CASE OF GOETZ INDIA LTD. 284 ITR 323 (SC) ANY CLAIM MADE BY THE ASSESSEE WHICH IS NOT SUPPORTED BY A REVISED RETURN FILED U/S 139(5) OF T HE ACT COULD NOT BE ENTERTAINED BY THE AO. ON APPEAL BY THE ASSESSEE THE CIT(A) ENTERTAIN ED BOTH THE CLAIM OF THE ASSESSEE AND ALLOWED THE CLAIM WHICH IS SUBJECT MATTER RAISE D IN GR.NO.6 AND DIRECTED THE AO TO EXAMINE THE CLAIM OF THE ASSESSEE WHICH IS SUBJECT MATTER OF GR.NO.7. IN GR.NO.6 AND 7 RAISED BEFORE THE TRIBUNAL, THE REVENUE HAS CHALL ENGED THE ACTION OF THE CIT(A) IN ENTERTAINING A CLAIM BY AN ASSESSEE WHICH IS NOT SU PPORTED BY A REVISED RETURN OF INCOME FILED U/S.139(5) OF THE ACT. ACCORDING TO THE REVENUE, THE CIT(A) ALSO OUGHT NOT TO HAVE ENTERTAINED SUCH CLAIM.. THE CIT(A) ON THE AFORESAID ISSUE CAME TO THE CONCLUSION THAT THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF GOETZ INDIA LTD., IS APPLICABLE TO THE POWER TO ADMIT A NEW CLA IM BY THE ASSESSING OFFICER OTHERWISE THAN A REVISED RETURN. THE SAID DECISION HAS NO EFF ECT ON THE POWERS OF THE APPELLATE AUTHORITY TO ADMIT AN ADDITIONAL GROUND OR ADDITION AL CLAIM WHEN ALL THE FACTS OF THE CASE ARE ON RECORD. 32. BEFORE US THE LD. DR RELIED ON THE GROUNDS TA KEN BY THE ASSESSEE IN THE GROUNDS OF APPEAL. THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF CIT(A).WE HAVE GIVEN A VERY CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS . WE ARE OF THE VIEW THAT THERE IS NO MERIT IN GROUND NO.6 AND 7 RAISED BY THE REVENUE. THE CIT(A) AS A FIRST APPELLATE AUTHORITY HAS THE POWER TO ENTERTAIN A NEW CLAIM EV EN IN THE ABSENCE OF A REVISED RETURN OF INCOME. THE SUPREME COURT IN CASE OF GOETZE (IN DIA) LTD. (SUPRA) HAS CLARIFIED THAT 'THE DECISION WAS RESTRICTED TO THE POWER OF THE AS SESSING AUTHORITY TO ENTERTAIN A CLAIM FOR DEDUCTION OTHERWISE THAN BY A REVISED RETURN, A ND DID NOT IMPINGE ON THE POWER OF THE APPELLATE TRIBUNAL UNDER SECTION 254 OF THE INC OME-TAX ACT, 1961. THIS HAS BEEN INTERPRETED IN SEVERAL JUDICIAL PRONOUNCEMENTS AS A PPLICABLE EVEN TO THE FIRST APPELLATE AUTHORITIES. THE HONBLE DELHI HIGH COURT IN THE C ASE OF JAI PARABOLIC SPRINGS 306 ITR 42 (DELHI) HAS HELD THAT THE APPELLATE AUTHORITIES UNDER THE ACT, WERE FREE TO CONSIDER A CLAIM MADE BY AN ASSESSEE EVEN IN THE ABSENCE OF A REVISED RETURN OF INCOME AND THAT THE REQUIREMENT FOR FILING A REVISED RETURN OF INCO ME AS LAID DOWN BY THE HONBLE 15 ITA NO.304/KOL/2015 M/S. GOODRICKE GROUP LTD. A.YR..2002-03 15 SUPREME COURT IN THE CASE OF GOETZ INDIA LTD. (SUPR A) IS APPLICABLE ONLY WHEN A CLAIM IS MADE CONTRARY TO THE RETURN OF INCOME BEFORE THE AO . THE HONBLE DELHI HIGH COURT IN THE CASE OF BHARAT ALUMINIUM 163 TAXMAN 430J, HAS I NTER-ALIA RULED THAT ASSESSEE CAN FILE REVISED COMPUTATION IN THE COURSE OF ONGOING A SSESSMENT PROCEEDINGS UNDER THE ACT, WITHOUT MAKING RECOURSE TO REVISED RETURN, DESPITE THE FACT THAT TIME LIMIT FOR REVISING RETURN UNDER SECTION 139(5) HAD EXPIRED. IN THE LIG HT OF THE AFORESAID DECISIONS, WE ARE OF THE VIEW THAT THE CIT(A) WAS RIGHT IN ACCEPTING THE REVISED CLAIM WHICH ARE SUBJECT MATTER OF GR.NO.6 & 7 BEFORE THE CIT(A) AND THE CIT (A) WAS FULLY JUSTIFIED IN ADMITTING SUCH CLAIMS FOR ADJUDICATION. WE THEREF ORE DISMISS GROUND NO.6 AND 7 RAISED BY THE REVENUE. 33. IN THE RESULT THE APPEAL BY THE REVENUE I S PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 31.08.2017. SD/- SD/- [WASEEM AHMED ] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 31.08.2017. [RG PS] COPY OF THE ORDER FORWARDED TO: 1.M/S. GOODRICKE GROUP LTD., 14, GURURSADAY ROAD, K OLKTA-700019. 2. D.C.I.T., CIRCLE-4(1), KOLKATA. 3. CIT(A)- 2, KOLKATA 4. C.I.T. 2, KOLKAT A. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. BY ORDER TRUE COPY SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D. O., I.T.A.T., KOLKATA BENCHES 16 ITA NO.304/KOL/2015 M/S. GOODRICKE GROUP LTD. A.YR..2002-03 16