ISMT LTD, MUMBAI V. ITO WD 10(1)(1), MUMBAI

ITA 3073/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88128 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2015
• Appeal Filed By: Assessee
• Bench Allotted: I
• Next Hearing Date: 19-01-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 19-04-2011
• Court: TRIBUNAL
• Department Lawyers: SACHCHIDANAND DUBEY
• Keywords: Depreciation; Opportunity of being heard; Additional evidence; Bad and doubtful debts
• Section: 37(1); 32; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ./I.T.A. NO. 3073/M/2011 ( AY: 2005 - 20 06 ) ./I.T.A. NO. 3074/M/2011 ( AY: 2006 - 20 07 ) ISMT LIMITED, OFFICE NO.10, SOHRAB BUILDING, 499 - 505, KALBADEVI ROAD, MUMBAI. / VS. INCOME TAX OFFICER, WARD 10(1)(1), MUMBAI. ./ PAN : AAACJ9917A ( / APPELLANT) .. ( / RESPONDENT ) ./I.T.A. NO. 2861/M/2011 ( AY: 2005 - 20 06 ) ./I.T.A. NO. 2871/M/2011 ( AY: 2006 - 20 07 ) INCOME TAX OFFICER, WARD 10(1)(1), MUMBAI. / VS. ISMT LIMITED, OFFICE NO.10, SOHRAB BUILDING,499 - 505, KALBADEVI ROAD, MUMBAI. ./ PAN : AAACJ9917A ( / APPELLANT) .. ( / RESPONDENT ) / ASSESSEE BY : SHRI K. GOPAL / REVENUE BY : SHRI SACHCHIDANAND DUBEY, DR / DATE OF HEARING : 22 .1.2015 / DATE OF PRONOUNCEMENT :22 .1.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE FOUR APPEALS UNDER CONSIDERATION INVOLVING TWO ASSESSMENT YEARS 2005 - 06 AND 2006 - 07. THERE ARE CROSS APPEALS FOR BOTH THE AYS . APPEAL ITA NO.3073/M/2011 FILED BY THE ASSESSEE AND APPEAL ITA NO.2861/M/2011 FILED BY THE REVENUE RELATE TO THE AY 2005 - 2006. APPEAL ITA NO.3074/M/2011 FILED BY THE ASSESSEE AND APPEAL ITA NO.2871/M/2011 FILED BY THE REVENUE RELATE TO THE AY 2 2006 - 07. SINCE, THE ISSUES RAISED IN THESE FOUR APPEALS ARE CONNECTED THEREFORE, FOR THE SAKE OF CONVENIENCE, THEY ARE CLUBBED, HEARD COMBINEDLY AND DISPOSED OF IN THIS CONSOLIDATED ORDER. APPEAL WISE AND GROUND WISE ADJUDICATION IS GIVEN IN THE FOLLOWING PARAGRAP HS OF THIS ORDER. CROSS APPEALS FOR THE AY 2005 - 2006 ITA NO.3073/M/2011 (BY ASSESSEE) 2. THIS APPEAL FILED BY THE ASSESSEE ON 19.4.2011 IS AGAINST THE ORDER OF THE CIT (A) - 21, MUMBAI DATED 18.1.2011 FOR THE ASSESSMENT YEAR 2005 - 06. IN THIS APPEAL ASSESSEE RAISED 6 GROUNDS IN TOTO AND THEY RELATE TO A COUPLE OF ISSUES I.E., (I) ALLOWABILITY OF THE AIR CRAFT LEASE RENTALS OF RS. 51,24,270/ - (GROUND NOS.1, 2 AND 3) AND (II) ALLOWABILITY OF THE TRIAL RUN EXPENSES (GROUND NOS.4 , 5 AND 6). BEFORE US, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THE SAID GROUNDS 4, 5 AND 6 ARE NOT PRESSED. AFTER HEARIN G THE LD DR, WE DISMISS THE SAID GROUND NOS.4, 5 AND 6 AS NOT PRESSED. THUS, THE ONLY ISSUE NEEDS TO BE ADJUDICATED RELATES TO TH E ALLOWABILITY OF THE AIR CRAFT LEASE RENTALS. 3. IN CONNECTION WITH THE SAID GROUND NOS.1, 2 AND 3, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS O F MANUFACTURING OF SEAM LESS TU BES AND STEEL. BRINGING OU R ATTENTION TO THE P & L ACCOUNT, LD COUNSEL MENTIONED THAT THE ASSESSEE CLAIMED EQUIPMENT LEASE RENTALS AMOUNTING TO RS. 55.61 LAKHS (SCHEDULE - 13 OF THE P&L ACCOUNT IS RELEVANT). GIVING BREAKUP TO THE SAME, LD COUNSEL MENTIONED THAT SUM OF RS. 51,24,720/ - WAS PAID TO INDIAN SEAMLESS FINANCIAL SERVICES LTD (ISFSL) , THE LESSOR OF THE AIR CRAFT. VIDE THIS AGREEMENT, THE AIR CRAFT TYPE P - 68C WAS LEASED TO INDIAN SEAMLESS METAL TUBES LTD (ISMTL), WHICH WAS SUBSEQUENTLY ACQUIRED BY THE ASSESSEE. BY VIRTUE OF THE SAID AC QUISITION THE SAID COMPANY I.E., ISMTL GOT THE LEASE RIGHTS ON THE AIR CRAFT BELONGING TO THE ISFSL. AS PER THE LEASE DEED, DATED 30.11.1998 PLACED AT PAGE 113 OF THE PAPER BOOK AND THE SCHEDULE - 11 APPENDED THERETO, WHICH IS PLACED AT PAGE 132 OF THE PB, MONTHLY LEASE RENT IS RS. 2,30,048/ - UP TO NOVEMBER 1998. SUBSEQUENTLY, THE LEASE RENTALS ARE REVISED AND MONTHLY RENT IS SCHEDULED AT RS. 4,10,635/ - . AFTER DEDUCTION OF VAT @ 4% THE ANNUAL RENTAL PAID BY THE ASSESSEE 3 WORKS OUT TO RS. 51,24,270/ - FOR THE AY 2005 - 2006. DETAILS ARE GIVEN IN THE CHART FURNISHED BY THE ASSESSEE BEFORE US. ASSESSING OFFICER DISALLOWED THE SAME FOR ASSESSEES FAILURE TO FURNISH THE LOG BOOK PARTICULARS SHOWING THE USE OF THE AIR CRAFT AND THE DETAILS OF THE USERS OF THE AIR C RAFT. MATTER TRAVELLED TO THE FIRST APPELLATE AUTHORITY. 4. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, ASSESSEE FURNISHED CERTAIN ADDITIONAL EVIDENCES WHICH ARE PLACED AT SL NO.4 AND 5 (PAGES 106 TO 180) OF THE PB. CIT (A) DID NOT ENTERTAIN THE SAID EVIDENCES AND CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. THE CONTENTS OF PARAS 5 TO 5.3 OF THE IMPUGNED ORDER ARE RELEVANT IN THIS REGARD. OTHERWISE, THE CIT (A) CONSIDERED THE EVIDENCES AND REJECTED THE SAME FOR WANT OF SOME MORE DETAILS RELATING TO THE DESTINATIONS FLOWN BY THE AIR CRAFT, THE LIST OF PASSENGERS TRAVELLED IN THE AIR CRAFT, PURPOSE OF THE FLIGHT ETC. IT IS ALSO SUSPECTED THAT LIKELY THE SAID AIR CRAFT WAS USED BY OTHER PERSONS OF THE SAME GROUP. AGGRIEV ED, ASSESSEE FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 5. DURING THE PROCEEDINGS BEFORE US, LD COUNSEL FOR THE ASSESSEE NARRATED THE FACTS OF THE CASE AND MENTIONED THAT THE ASSESSEES MAIN OPERATIONS ARE IN PUNE AND ASSESSEE NEEDS TO TRAVEL TO VARIOUS PLACED AT BANGALORE AND MUMBAI FREQUENTLY AND THE AIR CRAFT WAS USED EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. LD COUNSEL FURTHER SUBMITTED THAT VIDE THE LEASE AGREEMENT (SUPRA), ASSESSEE IS UNDER OBLIGATION TO MAKE THE LEASE RENTAL PAYMENTS FOR THE FIXED PERIOD WHETHER THE SAME WERE USED OR NOT. LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE ORDER OF THE ITAT, PUNE BENCH IN THE CASE OF INTERVALVE (INDIA) PVT LTD VS. ADDL CIT VIDE ITA NO.659/PN/2009 (AY 2005 - 2006), DATED 16.12.2010 AND MENTIONED THAT UNDER THE SIMILAR CIRCUMSTANCES PART DISALLOWANCE WAS MADE OUT OF THE CLAIM OF THE LEASE RENTALS RELATING TO THE INCIDENTAL EXPENDITURE. HE SUBMITTED THAT THE TRIBUNAL MAY CONSIDER THE SAID DECISION AND DECIDE THE ISSUE ON MERITS. 6. ON THE OTHER HA ND, LD DR RELIED ON THE ORDERS OF THE ASSESSING OFFICER AND THE CIT (A). BRINGING OUR ATTENTION TO THE PAPER BOOK AND THE CERTIFICATION ISSUED BY THE LD COUNSEL, LD DR SUBMITTED THAT CERTAIN ADDITIONAL EVIDENCES WERE FURNISHED FOR THE FIRST TIME BEFORE TH E CIT (A) AND THEY WERE ACTUALLY NOT REMANDED TO THE FILE OF THE 4 ASSESSING OFFICER BEFORE CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER. REPLYING TO THE LD DR SUBMISSION, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE REMAND REPORT WAS UNCALLED FO R BY THE CIT (A) SINCE THE DISALLOWANCE MADE DISALLOWANCE MADE BY THE ASSESSING OFFICER WAS CONFIRMED BY THE CIT (A). HE ALSO PRAYED THAT THE ISSUE MAY BE REMANDED TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING ALL THE ISSUES AFRESH. HOWEVER, HE MADE A PRAYER THAT THE DECISION OF THE PUNE BENCH (SUPRA) MAY BE CONSIDERED BY THE ASSESSING OFFICER DURING THE REMANDING PROCEEDINGS. 7. ON HEARING BOTH THE PARTIES, WE FIND THE IMPUGNED PAYMENT WAS MADE BY THE ASSESSEE TOWARDS EXPENDITURE FOR LEASE RENTALS AS WELL AS DAY TO DAY MAINTENANCE OF THE AIR CRAFT. IN FACT, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE PAPERS PLACED AT PAGE 152 OF THE PB AND MENTIONED THAT TANEJA AEROSPACE & AVIATIN LIMITED IS THE OPERATOR OF THE AIR CRAFT AND THE ASSESSEE WILL NOT INCUR ANY EXPENDITURE ON ACCOUNT OF THE FUEL, SALARIES TO PILOT ETC. ON CONSIDERING THE PECULIAR FACTS OF THE PRESENT CASE, WE ARE OF THE OPINION THAT THE MATTER SHOULD BE REMANDED TO THE FILE OF THE ASSESSING OFFICER AND THE HE SHALL EXAMINE AL L THE FACTS AND ALSO THE CITED DECISION OF THE ITAT, PUNE BENCH IN THE CASE OF INTERVALVE (INDIA) PVT LTD AND DECIDE THE ISSUE AFRESH AFTER GRANTING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, GROUND NOS.1, 2 AND 3 RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.2861/M/2011 (AY 2005 - 2006) (BY REVENUE) 9. THIS APPEAL FILED BY THE REVENUE ON 11.4.2011 AGAINST THE ORDER OF THE CIT (A) - 21, MUMBAI DATED 18.1.2011 FOR THE AY 2005 - 06. IN THIS APPEAL, REVENUE RAISED 4 GROUNDS IN TOTO. 10. GROUND NO.1 RELATES TO THE DISALLOWANCE OF CLAIM OF RS.18,70,298/ - MADE U/S 35DD OF THE ACT. ASSESSEE MADE A CLAIM U/S 35DD OF THE ACT IN CONSIS TENT WITH THE PRECEDING AYS 2003 - 04 AND 2004 - 05. IN THIS REGARD, IT IS THE SUBMISSION OF THE ASSESSEE THAT THE SAID EXPENDITURE WAS INCURRED IN CONNECTION WITH THE MERGER PROCEDURE OF M/S. INDIAN SEAMLESS STEEL & ALLOYS LTD. IT IS THE CLAIM OF THE ASSESS EE 5 THAT THE PROVISIONS OF SECTION 35DD OF THE ACT ALLOW AMORTIZATION OF EXPENDITURE IN CASE OF AMALGAMATION. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THIS ISSUE NEEDS TO REVISIT THE FILE OF THE ASSESSING OFFICER FOR EXAMINING THE NATURE O F EXPENDITURE AND APPLYING THE PROVISIONS OF SECTION 35DD OF THE ACT. IT IS THE PRAYER OF THE LD COUNSEL THAT IN THE REMANDING PROCEEDINGS, ASSESSING OFFICER IS REQUIRED TO CONSIDER THE DECISION OF THE TRIBUNAL FOR THE AY 2003 - 2004, DATED 5.6.2009 WHEREIN THE IDENTICAL ISSUE WAS ADJUDICATED BY THE TRIBUNAL. 11. AFTER HEARING THE LD DR, WE FIND IT RELEVANT AND APPROPRIATE TO REMAND THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION AND DECISION AFTER GIVING A REASONABLE OPPORTUNITY OF BEI NG HEARD TO THE ASSESSEE. ACCORDINGLY, GROUND NO.1 IS RAISED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 12. GROUND NO.2 RELATES TO THE ALLOWABILITY OF THE BAD DEBTS OF RS. 22.59 LAKHS. THE ONLY OBJECTION RAISED BY THE REVENUE BEFORE US RELATES T O THE ASSESSEES FAILURE TO DEMONSTRATE THE DEBTS IN QUESTION ARE TRADING IN NATURE. IN THIS REGARD, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO PAG E 111 OF THE PAPER BOOK AND MENTIONED THAT M/S. BHAR A T I A MINI SPRING (RS. 19.47 LAKHS) AND P. T. W AHANA (RS. 3,12,109/ - ) ARE THE SAID DEBTORS AND THE SAME WERE DEMONSTRATED BY THE ASSESSEE WHICH ARE DATED 4.4.2002, 24.2.2003 IN THE CASE OF M/S. BHARATIA MINI SPRING. REFERRING TO THE OTHER PARTY I.E, P.T. WAHANA, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT INVOICES DATED 30.6.2003, 27.3.2003 ARE RELEVANT. CONSIDERING THE SAID INFORMATION, IT IS THE SUBMISSION OF THE ASSESSEE THAT THE DATES IN QUESTION ARE RELATED TO THE SALES MADE BY THE ASSESSEE. THEREFORE, CONSIDERING THE BINDING JUDGMENT OF THE HON BLE SUPREME COURT IN THE CASE OF TRF LTD VS. CIT [2010] 323 ITR 397 (SC), THE CLAIM OF THE ASSESSEE SHOULD BE ALLOWED SINCE THEY ARE WRITTEN OFF IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. 13. ON EXAMINING THE RELEVANT PAPERS RELIED UPON BY THE ASSESSEE AND AFTER HEARING THE LD DR, WE FIND THE CONCLUSIONS DRAWN BY THE CIT (A) IN PARA 4.3 OF THE IMPUGNED ORDER ARE ARE FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUND NO.2 RAISED BY THE REVENUE IS DISMISSED. 14. GROUND NO.3 RE LATES TO THE DISALLOWANCE OF TRADING LOSS AMOUNTING TO RS. 10.69 LAKHS. ASSESSING OFFICER DISALLOWED THE SAID CLAIM CONSIDERING THAT THE DEBTS 6 CLAIMED BY THE ASSESSEE CONSTITUTES AS CAPITAL LOSS AS THEY ARE MERELY ADVANCES AND THE CONDITIONS SPECIFIED IN SECTION 36(2) OF THE ACT ARE NOT FULFILLED. DURING THE PROCEEDINGS BEFORE THE CIT (A), ASSESSEE RAISED THE GROUND RELATING TO THE ALLOWABILITY OF THE SAID CLAIM U/S 28 / 37(1) OF THE ACT I.E., BUSINESS LOSS. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSES SEE, CIT (A) ALLOWED THE CLAIM OF THE ASSESSEE AS PER THE DISCUSSION GIVEN IN PARA 4.3 OF THE IMPUGNED ORDER. FOR THE SAKE OF C OMPLETENESS OF THIS ORDER, THE RELEVANT PORTION OF THE SAID PARA 4.3 IS EXTRACTED AS FOLLOWS: 4.3.HOWEVER, THE APPELLANT DID NOT CLAIM THE SAME AS BAD DEBT. THE APPELLANTS CLAIM WAS ALLOWABLE AS A TRADING LOSS AS THE SAME AROSE ON ACCOUNT OF PURCHASE OF RAW MATERIAL / SPARES WHICH RESULTED INTO SHORT SUPPLY OF MATERIAL. BEING THE PURCHASES MADE THROUGH OPENING OF LC OF PU RCHASE OF RAW MATERIAL / SPARES, THE FULL PAYMENT HAD ALREADY BEEN MADE TO THE SUPPLIER. THUS, THE SHORT SUPPLY OF MATERIAL WAS A TRADING LOSS WHICH AROSE DURING THE COURSE OF BUSINESS AND WAS NOT RECOVERABLE. THEREFORE, THE APPELLANTS CLAIM OF RS. 10.1 6 LAKHS WAS ALLOWABLE AS TRADING LOSS. THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS THEREFORE, DELETED. THIS GROUND OF APPEAL IS ALLOWED. 15. FROM THE ABOVE, IT IS EVIDENT THAT THE ADVANCE IN QUESTION RELATES TO THE PURCHASE OF THE RAW MATERIAL / SP ARES. THUS, CIT (A) GRANTED RELIEF CONSIDERING THE ABOVE FACTS AND HELD THAT THE LOSS IN QUESTION CONSTITUTES AN ALLOWABLE BUSINESS LOSS. NOTHING CONTRARY BROUGHT ON RECORD EVEN BY THE LD DR OF THE FACT THAT THE CONCLUSIONS DRAWN BY THE LD CIT (A) ARE ER RONEOUS. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT THE FINDING OF THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUND NO.3 RAISED BY THE REVENUE IS DISMISSED. 16. GROUND NO.4 RELATES TO THE ALLOWABILIT Y OF DEPRECIATION ON THE INSURANCE SPARES WHICH FORM PART OF THE BLOCK OF ASSETS. BRINGING OUR ATTENTION TO THE DEPRECIATION SCHEDULE, ASSESSEE MENTIONED THAT CERTAIN EMERGENCY SPARES WERE PURCHASED BY THE ASSESSEE FOR THE PURPOSE OF RUNNING OF THE PLANT AND MACHINERY WITHOUT ANY DISCONTINUATION. THE SPARES WERE KEPT IN CONDITION AND READY TO USE AT ANY POINT OF TIME WHEN THE MACHINERY BREAKS DOWN. THE ALLOWABILITY OF DEPRECIATION ON SUCH SPARES IS THE ISSUE BEFORE THE ASSESSING OFFICER. IN THE ASSESSME NT ORDER, ASSESSING OFFICER DISALLOWED THE CLAIM OF DEPRECIATION ON THE SAID SPARES STATING THAT THE SAME WERE NOT PUT TO USE. IN THE PROCESS, HE IGNORED THE FACT THAT THE SPARES ARE MEANT FOR THE PLANT AND MACHINERY AND THE SAME IS ALREADY IN USE. FURTH ER, THE ASSESSING OFFICER ALSO IGNORED THE FACT THAT SUCH SPARES ARE ENTITLED TO DEPRECIATION U/S 32 OF 7 THE ACT VIDE THE JUDGMENT OF THE DELHI HIGH COURT IN THE CASE OF CIT VS. INSILCO LTD [2010] 320 ITR 322 (DELHI). DURING THE PROCEEDINGS BEFORE THE FIRS T APPELLATE AUTHORITY, CIT (A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. BEFORE US, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE SAID JUDGMENT OF THE DELHI HIGH COURT (SUPRA) AND MENTIONED THE FOLLOWING: II. SECTION 32 OF THE INCOME TAX A CT, 1961 DEPRECIATION ALLOWANCE / RATE OF ASSESSMENT YEAR 2000 - 01 WHETHER EXPRESSION USED FOR PURPOSES OF BUSINESS APPEARING IN SECTION 32 TAKES INTO ACCOUNT EMERGENCY SPARES ALSO WHICH EVEN THOUGH READY FOR USE ARE NOT AS A MATTER OF FACT CONSUM ED OR USED DURING RELEVANT PERIOD AS THESE ARE SPARES SPECIFIC TO A FIXED ASSET AND WILL, IN ALL PROBABILITY, BE USELESS ONCE ASSET IS DISCARDED HELD, YES WHETHER THEREFORE, DEPRECIATION UNDER SECTION 32 IS ALLOWABLE IN RESPECT OF EMERGENCY SPARES OF P LANT AND MACHINERY EVEN THOUGH THEY HAVE NOT BEEN USED DURING THE RELEVANT PERIOD HELD, YES. 17. ON THE OTHER HAND, LD DR FILED A COPY OF THE JUDGMENT OF HONBLE BOMBAY HIGH COURT, NAGPUR BENCH IN THE CASE OF DINESHKUMAR GULABCHAND AGRAWAL VS. CIT [2004 ] 267 ITR 768 (BOMBAY). THIS JUDGMENT IS FOUND TO BE DELIVERED IN CONNECTION WITH A VEHICLE WHICH WAS NOT ACTUALLY USED BUT IT WAS KEPT READY FOR USE. 18. ON HEARING BOTH THE PARTIES AND ON PERUSAL OF THE FACTS OF THE PRESENT CASE AND THE APPLICABILITY OF THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF INSILCO LTD (SUPRA), WE ARE OF THE OPINION THAT THE FACTS OF THE JUDGMENT ARE FOUND APPLICABLE TO THAT OF THE PRESENT CASE. ACCORDINGLY, WE ARE OF THE OPINION THAT THE ASSESSEE IS ENTITLED TO CLA IM OF DEPRECIATION ON THE INSURANCE SPARES. THUS, THE FINDINGS GIVEN BY THE CIT (A) GIVEN IN PARA 9.3 OF THE IMPUGNED ORDER IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUND NO.4 RAISED BY THE REVENUE IS DISMISSED. 19. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. CROSS APPEALS FOR THE AY 2006 - 2007 ITA NO.3074/M/2011 (BY ASSESSEE) 20. THIS APPEAL FILED BY THE ASSESSEE ON 19.4.2011 IS AGAINST THE ORDER OF THE CIT (A) - 21, MUMBAI DATED 18.1.2011 FOR THE AY 2006 - 2007. 21. IN THIS APPEAL, THE SOLITARY ISSUE RAISED BY THE ASSESSEE RELATES TO THE ALLOWAB ILITY OF LEASE RENTALS AMOUNTING TO RS. 10,38,468/ - . BUT FOR THE FIGURES, THE ISSUE IN QUESTION RELATES TO THE ALLOWABILITY OF LEASE RENTAL S , WHICH IS ALREADY 8 ADJUDICATED BY US WHILE DEALING WITH THE APPEAL OF THE ASSESSEE FOR THE AY 2005 - 2006 IN THE ABOVE PARAGRAPHS OF THIS ORDER. THE ISSUE RAISED IN APPEAL ITA NO.3073/M/2011 (AY 2005 - 2006) WAS REMANDED BY US TO THE FILE OF THE ASSESSING OF FICER FOR FRESH ADJUDICATION. FOLLOWING THE SAME AND FOR THE SAKE OF CONSISTENCY, THE ISSUE RAISED IN THE PRESENT APPEAL IS ALSO REMANDED TO THE FILE OF THE ASSESSING OFFICER WITH IDENTICAL DIRECTIONS. ACCORDINGLY, GROUND NOS.1, 2, 3 AND 4 RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 22. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 2871 /M/2011 (AY 2006 - 2007) (BY REVENUE ) 23. THIS APPEAL FILED BY THE REVENUE ON 11.4.2011 IS AGAINST THE ORDER OF THE CIT (A) - 21, MUMBAI DATED 18.1.2011 FOR THE AY 2006 - 07. 24. IN THIS APPEAL, THE SOLITARY ISSUE RAISED BY THE REVENUE RELATES TO THE DISALLOWANCE OF CLAIM OF RS.18,70,298/ - MADE U/S 35DD OF THE ACT. REVENUE RAISED THE SIMILAR ISSUE WITH REFERENCE TO THE CLA IM OF DEDUCTION U/S 35DD OF THE AND THE SAME IS ALREADY ADJUDICATED BY US WHILE DEALING WITH THE APPEAL FOR THE AY 2005 - 2006 IN THE ABOVE PARAGRAPHS OF THIS ORDER. THE ISSUE RAISED IN APPEAL ITA NO. 2861 /M/2011 (AY 2005 - 2006) WAS REMANDED BY US TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. FOLLOWING THE SAME AND FOR THE SAKE OF CONSISTENCY, THE ISSUE RAISED IN THE PRESENT APPEAL IS ALSO REMANDED TO THE FILE OF THE ASSESSING OFFICER WITH IDENTICAL DIRE CTIONS. ACCORDINGLY, GROUND NOS . 1 (I) AN D 1(II) RAISED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 25. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUN CED IN THE OPEN COURT ON 22 ND JANUARY, 2015. SD/ - SD/ - (AMIT SHUKLA) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 22 .1 .2014 . . ./ OKK , SR. PS 9 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI