Gujarat Chemical Port Terminal Co.Ltd., Baroda V. The ACIT.,Circle-1(1), Baroda

ITA 3077/AHD/2011

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8175 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 04-07-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 07-12-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VASUNDHARA UPMANYU; V K SING
• Keywords: Capital asset; Depreciation; Bad and doubtful debts; Difference of opinion; Reason to believe; Change of opinion; Revenue expenditure; Capital expenditure
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER, AND SHRI S. S. GODARA, JUDICIAL MEMBER. ITA NO. 30 77 TO 3079/AHD/2011 (ASSESSMENT YEA RS: 2004-05 & 2006-07) GUJARAT CHEMICAL PORT TERMINAL CO. LTD., 2 ND FLOOR, GUJAN TOWER, OFF ALEMBIC, GORWA ROAD, BARODA-23 APPELLA NT VS. ASST. COMMISSIONER OF INCOME-TAX, CIRCLE 1(1), AAYAKAR BHAVAN, RACE COURSE, VADODARA - 07 RESPONDENT & ITA NO. 3115 TO 3120/AHD/2011 (ASSESSMENT YE ARS: 2002-03 TO 2006-07 ) THE DCIT, CIR.1(1), BARODA APPELLANT VS. GUJARAT CHEMICAL PORT TERMINAL CO. LTD., MATERIALS BHAVAN, GROUND FLOOR, VMD (RIL), P.O. PETROCHEMICALS, BAORDA - 391346 RESPONDENT PAN: AAACG6861A /BY ASSESSEE : SHRI MILIN MEHTA, A.R. /BY REVENUE : VASUNDHARA UPMANYU, CIT. D.R., & SHRI V. K. SINGH, SR. D.R. ITA NO. 3077 TO 3079 & 3115 TO 3120/AHD/11 [GUJARAT CHEMICAL PORT TERMINAL CO. LTD.] - 2 - /DATE OF HEARING : 11.10.2017 /DATE OF PRONOUNCEMENT : 13.11.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THE INSTANT BATCH COMPRISES OF NINE CASES. FIRST T WO ASSESSMENT YEARS 2002- 03 AND 2003-04 CONTAIN REVENUES APPEAL ITA NOS. 31 15 & 3116/AHD/2011 ARISING FROM THE CIT(A), BARODAS SEPARATE ORDERS D ATED 16.09.2011 AND 19.09.2011 IN CASE NOS. CAB-I/156/09-10 & CAB-I/102 /10-11; RESPECTIVELY, QUASHING ASSESSING OFFICERS ACTION TAKING RECOURSE TO SECTION 148 REOPENING VIDE SEPARATE NOTICES DATED 27.03.2009 AND 26.06.2009 FA LLING TO BE BEYOND FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR U/S.14 7 FIRST PROVISO THEREBY OVERRULING RE-ASSESSMENTS FINDINGS TREATING ASSESS EES JETTY & TRESTLE IN QUESTION TO BE ENTITLED FOR 25% RATE OF DEPRECIATION AS PLAN T AND MACHINERY THAN 10% IN BUILDING HEAD IN THE RELEVANT BLOCK INVOLVING RESPE CTIVE DISALLOWANCE/ADDITION OF RS.66,81,91,861/- & RS.50,61,62,320/-, IN PROCEEDIN GS U/S. 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. NEXT ASSESSMENT YEAR 2004-05 INVOLVES FOUR CASES . THE ASSESSEE HAS FILED ITS APPEAL ITA NOS. 3077/AHD/2011 AGAINST THE CIT(A )-I, BARODAS ORDER DATED 20.09.2011 IN CASE NO. CAB-I/380/2006-07 INTER ALI A UPHOLDING ASSESSING OFFICERS ACTION DISALLOWING / ADDING DEFERRED REVE NUE EXPENDITURE OF RS.180,18,223/-, EXPENDITURE ON RIGHT TO USE LAND O F RS.1,74,032/- AND RS.17,33,458/- BEING TREATED AS CAPITAL IN NATURE, DISALLOWANCE OF LEASE AMORTIZATION CHARGES OF RS.21,42,722/- AND PRIOR PERIOD EXPENSES OF RS.2,79,29,239/-; RESPECTIVELY IN PROCEEDINGS U/S.143(3) OF THE ACT. 3. NEXT COME ASSESSEES AND REVENUES CROSS APPEAL ITA NOS. 3078 & 3117/AHD/2011 AGAINST THE CIT(A)-I, BARODAS ORDER DATED 20.09.2011 IN CASE NO. CAB-I/265/08-09 INTER ALIA UPHOLDING ASSESSING OFFI CERS ACTION TAKING RECOURSE TO ITA NO. 3077 TO 3079 & 3115 TO 3120/AHD/11 [GUJARAT CHEMICAL PORT TERMINAL CO. LTD.] - 3 - SECTION 147 REOPENING DESPITE THE SAME BEING ALLEGE D CHANGE OF OPINION RESULTING INTO DISALLOWANCES/ADDITIONS ON ISSUES OTHER THAN F ORMING REASONS OF REOPENING UNDER VARIOUS HEADS OF REPAIRS AND MAINTENANCE OF P LANT AND MACHINERY OF RS.85,56,054/- BY TERMING IT AS CAPITAL EXPENDITURE , MINIMUM ASSURED QUANTITY DISALLOWANCE OF RS.54,00,02,000/- AND IN NOT DIRECT ING THE ASSESSING OFFICER TO DELETE BAD DEBT DISALLOWANCE/BUSINESS LOSS IN THE Y EAR OF WAIVER; RESPECTIVELY IN FORMERS CASE AND HOLDING JETTY & TRESTLE TO BE PLA NT AND MACHINERY ENTITLED FOR DEPRECIATION @25% ON ELECTRICAL INSTALLATIONS INSTE AD OF 15% UNDER BUILDING BLOCK INVOLVING DISALLOWANCE OF RS.1,35,00,332/-, IN PROC EEDINGS U/S.143(3) R.W.S. 147 OF THE ACT. 4. THIS FOLLOWS REVENUES APPEAL ITA NO.3118/AHD/20 11 PREFERRED AGAINST THE VERY CIT(A)S ORDER DATED 20.09.2011 IN CASE NO. CA B-I/103/10-11 QUASHING REOPENING IN QUESTION TO BE BEYOND FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR THEREBY REVERSING ASSESSING OFFICERS ACTION D ISALLOWING AN AMOUNT OF RS.39,39,65,490/- AFTER HOLDING THAT THE JETTY & TR ESTLE IN QUESTION DESERVED TO BE INCLUDED IN BUILDING BLOCK OF ASSETS ENTITLED FOR L ESSER RATE OF DEPRECIATION THAN THE SAME BEING TAKEN IN PLANT AND MACHINERY BLOCK ELIGI BLE FOR 25% DEPRECIATION, IN PROCEEDINGS U/S.143(3) R.W.S. 147 OF THE ACT. 5. ASSESSMENT YEAR 2005-06 CONTAINS REVENUES APPEA L ITA NO.3119/AHD/2011 EMANATING AGAINST THE VERY CIT(A) S ORDER DATED 20.09.2011 IN CASE NO. CAB-I/104/10-11 REVERSING ASSESSING OFFICE RS ACTION DISALLOWING ASSESSEES DEPRECIATION CLAIM OF RS.30,17,66,328/- ON ACCOUNT OF ITS JETTY & TRESTLE TAKEN AS BUILDING BLOCK ENTITLED FOR 10% RATE OF DE PRECIATION THAN PLANT AND MACHINERY INVOLVING 25% DEPRECIATION IN PROCEEDINGS U/S.143(3) R.W.S. 147 OF THE ACT. 6. LAST ASSESSMENT YEAR 2006-07 INVOLVES ASSESSEES AND REVENUES CROSS APPEALS ITA NOS.3079 & 3120/AHD/2011 ARISING AGAINS T THE VERY CIT(A)S ORDER DATED 23.09.2011 IN CASE NO. CAB-I/263/08-09, DISAL LOWING/ADDING ITA NO. 3077 TO 3079 & 3115 TO 3120/AHD/11 [GUJARAT CHEMICAL PORT TERMINAL CO. LTD.] - 4 - REPAIRS/MAINTENANCE EXPENDITURE OF RS.67,50,588/- A S CAPITAL IN NATURE, LEASE AMORTIZATION CHARGES OF RS.21,42,722/-, PRIOR PERIO D EXPENSES OF RS.10,89,135/-, DEPRECIATION OF RS.2,28,282/- ON FOREIGN EXCHANGE L OSS, RESTRUCTURING EXPENSES OF RS.35LACS FOLLOWED BY ALTERNATIVE PLEADINGS QUA THE ABOVE GROUNDS NO. 2 TO 3 AND 5 TO 6 IN FORMERS CASE AND IN DELETING BAD DEBTS DI SALLOWANCE OF RS.26,14,88,525/- PERTAINING TO VARIOUS PUBLIC SECTOR UNDERTAKINGS AS WELL AS IN REVERSING DEPRECIATION DISALLOWANCE OF RS.7,55,64,034/- MADE AFTER TREATIN G THE JETTY & TRESTLE IN QUESTION AS PART OF BUILDING BLOCK ENTITLED FOR 10% RATE OF DEPRECIATION THAN 25% APPLICABLE IN PLANT AND MACHINERY BLOCK; RESPECTIVELY IN PROCE EDINGS U/S.143(3) OF THE ACT. HEARD BOTH THE PARTIES. CASE FILES PERUSED. 7. A COMBINED PERUSAL OF THE ABOVE PLEADINGS MAKES IT CLEAR THAT SOME OF THE ISSUES INVOLVED IN THE INSTANT BATCH OF NINE APPEAL S ARE IDENTICAL. TAKE FOR INSTANCE REVENUES SOLE GRIEVANCE OF DEPRECIATION DISALLOWAN CE IN CASE OF ASSESSEES JETTY & TRESTLE WHEREIN THE ASSESSING OFFICER HAS CONSISTEN TLY TREATED THE SAME TO BE A BUILDING QUA ITS PORT TERMINAL ENTITLED FOR 10% RAT E OF DEPRECIATION AS AGAINST THE TAX PAYERS STAND THAT THE SAME IS RATHER A PART OF ITS PLANT AND MACHINERY ELIGIBLE FOR 25% RATE OF DEPRECIATION. ITS OTHER GRIEVANCE IN A SSESSMENT YEARS 2002-03, 2003-04 & 2004-05 SEEKS TO REVIVE ASSESSING OFFICERS ACTIO N REOPENING ASSESSMENTS VIDE SECTION 148 NOTICES DATED 27.03.2009, 26.06.2009 & 20.06.2009; RESPECTIVELY FALLING TO BE BEYOND FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEARS HEREINABOVE. THE REVENUES THIRD GRIEVANCE SEEKS T O RAISE BAD DEBTS DISALLOWANCE ISSUE IN LAST ASSESSMENT YEAR. 8. WE PROCEED IN THIS BACKDROP OF REVENUES APPEAL TO DEEM IT APPROPRIATE THAT A COMBINED ADJUDICATION OF ALL OF ITS APPEALS WOULD MEET ENDS OF JUSTICE. WE FIRST COME TO THE ABOVE LEGAL ISSUE OF REOPENING QUASHED IN ASSESSMENT YEARS 2002-03 TO 2004-05 (SUPRA). THERE IS HARDLY ANY DISPUTE THAT THE ASSESSING OFFICER HAD FRAMED REGULAR ASSESSMENTS THEREIN ON 31.01.2005, 24.03.20 06 AND 26.12.2006. HE THEREAFTER ISSUED SECTION 148 NOTICES HEREINABOVE F OR THE REASON THAT ITS JETTY & TRESTLE WERE ENTITLED FOR LESSER RATE OF DEPRECIATI ON @ 10% THAN 25% ALLOWABLE FOR ITA NO. 3077 TO 3079 & 3115 TO 3120/AHD/11 [GUJARAT CHEMICAL PORT TERMINAL CO. LTD.] - 5 - PLANT AND MACHINERY. HE ACCORDINGLY TREATED IT AS A CASE OF ESCAPEMENT OF TAXABLE INCOME FROM BEING ASSESSED. THIS FOLLOWED THE IMPU GNED RE-ASSESSMENTS BEING FRAMED RESULTING IN THE DISALLOWANCE(S) OF DEPRECIA TION CLAIMS (SUPRA) IN THE SAID TWO ASSESSMENT YEARS. THE CIT(A) REVERSES ASSESSIN G OFFICERS ACTION REOPENING THE ABOVE ASSESSMENT ON MERITS AS THERE HAD BEEN NO FAILURE ON ASSESSEES PART IN DISCLOSING FULLY AND TRULY ALL NECESSARY PARTICULAR S REGARDING ITS DEPRECIATION CLAIM BY APPLYING SECTION 147 (FIRST PROVISO). HE THERE FORE QUASHES THE IMPUGNED REOPENING IN BOTH ASSESSMENT YEARS. 9. LEARNED DEPARTMENTAL REPRESENTATIVE FAILS TO DIS PUTE THE CRUCIAL FACT THAT THE ASSESSEE HAD IN FACT DISCLOSED ALL ITS DEPRECIATION DETAILS IN FORM 3CD ANNEXURE 1A. HER CASE HOWEVER IS THAT SECTION 149(1)(B) ENV ISAGES TIME LIMIT FOR ISSUING SECTION 148 NOTICE TO BE BETWEEN FOUR YEARS TO SIX YEARS SQUARELY APPLIES IN FACTS OF THE INSTANT CASE. WE FIND NO MERIT IN THE INSTANT ARGUMENT AS THE ABOVE STATUTORY PROVISION DOES NOT OPERATE AS AN EXCEPTION TO SECT ION 147 (FIRST PROVISO). IT IS NOT A PROVISO TO PROVISO IN OTHER WORDS. LEARNED DEPARTM ENTAL REPRESENTATIVE FURTHER FAILS TO DISPUTE THAT THE QUESTION WHETHER OR NOT A PORT TERMINALS JETTY / TRESTLE IS TO BE TREATED AS PLANT AND MACHINERY IS NO MORE RES IN TEGRA SINCE THIS TRIBUNALS CO- ORDIANTE BENCH DECISION IN KANDLA PORT TRUST CASE ( 2007) 104 ITD 1 (RJT) HAS HELD SUCH ASSETS TO BE PLANT AND MACHINERY ENTITLED FOR 25% RATE OF DEPRECIATION. HONBLE JURISDICTIONAL HIGH COURT HAS UPHELD THE SA ID VIEW IN REVENUES TAX APPEAL NO.1942 OF 2006 DECIDED ON 05.07.2016. WE THEREFOR E FIND NO REASON TO ACCEPT IN REVENUES ARGUMENTS SEEKING TO TREAT ASSESSEES JET TY & TRESTLE AS BUILDING BLOCK OF ASSETS INSTEAD OF PLANT AND MACHINERY IN ALL CAS ES ON MERITS AS WELL. ITS APPEAL ITA NO.3115, 3116, 3117, 3118 & 3119/AHD/2011 ARE A CCORDINGLY DECLINED. 10. THIS LEAVES US WITH REVENUES APPEAL ITA NOS. 3 120/AHD/2011 INVOLVING THE REMAINING ISSUE OF BAD DEBTS DISALLOWANCE OF RS .26,14,88,525/- MADE BY THE ASSESSING OFFICER ON THE GROUND THAT THE DEBTORS IN QUESTION WERE IN FACT PUBLIC SECTOR UNDERTAKINGS IN WHOSE CASES IT COULD NOT BE HELD THAT THE SUMS IN QUESTION HAD BECOME ACTUALLY BAD. HE THEREFORE INVOKED THE IMPUGNED DISALLOWANCE IN ITA NO. 3077 TO 3079 & 3115 TO 3120/AHD/11 [GUJARAT CHEMICAL PORT TERMINAL CO. LTD.] - 6 - ASSESSMENT ORDER DATED 19.12.2008. THE CIT(A) QUOT ES HONBLE APEX COURTS JUDGMENT IN TRF LIMITED CASE 323 ITR 397 (SC) HOLDI NG THAT IT WAS NOWHERE INCUMBENT FOR AN ASSESSEE TO PROVE THAT THE DEBTS I N QUESTION HAD ACTUALLY BECOME BAD W.E.F. 01.04.1989. THERE IS NO DISPUTE THAT TH E ASSESSEE HAD BEEN DULY INCLUDING THE SAID AMOUNTS AS ITS INCOME IN PRECEDI NG ASSESSMENT YEARS OR THAT IT HAS ACTUALLY WRITTEN OFF THE SAME IN THE IMPUGNED A SSESSMENT YEAR. WE THEREFORE HOLD THAT THE CIT (A) HAS RIGHTLY ACCEPTED ASSESSEE S CLAIM OF BAD DEBTS. THE REVENUES INSTANT REMAINING GROUND AS WELL AS MAIN APPEAL ITA NO.3120/AHD/2011 FAILS. 11. WE NOW START WITH ASSESSEES APPEALS. IT HAS F ILED ITA NOS. 3077/AHD/2011 IN ASSESSMENT YEAR 2004-05. ITS FIRST SUBSTANTIVE GROUND CHALLENGES BOTH THE LOWER AUTHORITIES ACTION DISALLOWING DEFERRED REVENUE EX PENDITURE CLAIM OF RS.1,80,18,223/-. IT EMERGES FROM THE CIT(A)S OPE RATIVE PORTION IN PARA 2.2 PAGE 5 THAT HE HAS FOLLOWED HIS ORDERS IN ASSESSMENT YEA R 2002-03 IN CONFIRMING ASSESSING OFFICERS ACTION. WE SOUGHT TO KNOW THE FINAL STATUS OF THE ISSUE IN THE SAID ASSESSMENT YEAR. LEARNED DEPARTMENTAL REPRESE NTATIVE INVITES OUR ATTENTION TO THE CASE RECORDS CONTAINING A CO-ORDINATE BENCHS O RDER IN ASSESSEES CASE FOR THE SAID EARLIER ASSESSMENT YEAR INVOLVING APPEAL ITA N O.3075/AHD/2011 DECIDED ON 19.07.2016 HAS DECIDED THE VERY ISSUE IN REVENUES FAVOUR. MR. MEHTA HOWEVER SEEKS TO DRAW A FINE LINE OF DISTINCTION ON THE GRO UND THAT THE RELEVANT HEAD OF DEFERRED REVENUE EXPENDITURE WAS NOT THE SAME. HE FAILS TO INDICATE THE RELEVANT DISTINCTION OF ALLOWABILITY OF DEFERRED REVENUE EXP ENSES IN QUESTION IN PRINCIPLE AS ADJUDICATED IN REVENUES FAVOUR. WE THEREFORE SEE NO REASON TO ADOPT A DIFFERENT APPROACH IN THE IMPUGNED ASSESSMENT YEAR. THIS ISS UE IS THEREFORE DECIDED AGAINST THE ASSESSEE. THE IMPUGNED DISALLOWANCE OF DEFERRE D REVENUE EXPENDITURE IS ACCORDINGLY CONFIRMED. 12. BOTH THE LEARNED REPRESENTATIVE ARE AD IDEM IN INFORMING US THAT ASSESSEES NEXT TWO SUBSTANTIVE GROUNDS OF DISALLOWANCE OF RIG HT TO USE LAND AND AMORTIZATION OF LEASE CHARGES OF RS.19,07,484/- AND RS.21,42,722 /- (SUPRA) ALSO STANDS DECIDED IN ITA NO. 3077 TO 3079 & 3115 TO 3120/AHD/11 [GUJARAT CHEMICAL PORT TERMINAL CO. LTD.] - 7 - REVENUES FAVOUR AS PER THE ABOVE CO-ORDINATE BENCH DECISION IN ASSESSMENT YEAR 2002-03 HEREINABOVE. WE APPRECIATE SUCH A FAIR STA ND. BOTH THE IMPUGNED DISALLOWANCES FORMING SUBJECT MATTER OF CHALLENGE I N ASSESSEES SECOND AND THIRD SUBSTANTIVE GROUNDS ARE ACCORDINGLY REJECTED. 13. THE ASSESSEES FORTH SUBSTANTIVE GROUND SEEKS T O DELETE PRIOR PERIOD EXPENDITURE DISALLOWANCE OF RS.2,79,29,229/- AS MAD E BY BOTH THE LOWER AUTHORITIES IN ASSESSMENT AND IN LOWER APPELLATE PROCEEDINGS. T HE ASSESSING OFFICER AS WELL AS THE CIT(A) REJECT ASSESSEES CLAIM THAT THE IMPUGNE D EXPENDITURE STOOD CRYSTALLIZED IN RELEVANT PREVIOUS YEAR ONLY ALTHOUGH IT PERTAINE D TO EARLIER ASSESSMENT YEARS. MR. MEHTA FAIRLY INFORMS US AT THIS STAGE THAT THE CIT( A) HAS ACCEPTED ITS IMPUGNED CLAIM IN ASSESSMENT YEAR 2006-07. WE THEREFORE ARE OF THE VIEW THAT THE VERY GRIEVANCE RAISED IN THE IMPUGNED ASSESSMENT YEAR ST ANDS RENDERED INFRUCTUOUS. THE ASSESSEES APPEAL ITA NO.3077/AHD/2011 FAILS ACCORD INGLY. 14. NEXT ASSESSEES APPEAL IS ITA NO.3078/AHD/2011. ITS FIRST SUBSTANTIVE GRIEVANCE SEEKS TO CHALLENGE VALIDITY OF REOPENING TAKEN RECOURSE TO BY THE ASSESSING OFFICER AS MERE CHANGE OF OPINION. WE PR OCEED TO ADJUDICATE THE INSTANT LEGAL GROUND. IT IS EVIDENT THAT THE ASSESSING OFF ICER HAD FRAMED A REGULAR ASSESSMENT IN ASSESSEES CASE ON 26.12.2006 INTER A LIA MAKING VARIOUS DISALLOWANCES/ADDITIONS. HE THEREAFTER FORMED REAS ONS TO BELIEVE THAT ITS TAXABLE INCOME LIABLE TO BE ASSESSED HAD ESCAPED ASSESSMENT . HE THEREFORE ISSUED SECTION 148 NOTICE DATED 04.04.2007. THE ASSESSEE IN TURN STATED THAT ITS EARLIER REGULAR RETURN BE TAKEN AS THE ONE FILED IN FURTHERANCE TO THE ABOVE REOPENING NOTICE. IT ALSO SHOWED A COPY OF REOPENING REASONS. THE ASSESSING OFFICER FURNISHED THE SAME READING AS UNDER: 'IT IS NOTICED FROM THE CASE RECORDS THAT THE AMOUN T OF RS.128042/- PAID AS INCOME TAX WAS CAPITALIZED ON 31:3.2001 BY THE ASSESSEE AN D CONSEQUENTLY, DURING THE ASSESSMENT YEAR 2004-05 DEPRECIATION RS.18006/- HAS BEEN CLAIM ED IN THAT RESPECT. SINCE THE SAME CANNOT BE CAPITALIZED AND DEPRECIATION CANNOT BE CL AIMED IN THAT RESPECT BY THE ASSESSEE, THE DEPRECIATION OF RS.18006/- CLAIMED ON THIS ACCO UNT WAS TO BE DISALLOWED IT IS ALSO NOTICED FROM SCHEDULE 16 (SIGNIFICANT ACCOUNT POLIC IES) FORM.NG PART OF THE ACCOUNT THAT VIDE ITEM NO.5 THE ASSESSEE HAS MENTIONED THAT THE REVENUE FOR THE MINIMUM GUARANTEED QUANTITIES AGREED UPON BY THE USER PROMOTERS HAVE B EEN RECOGNIZED IN WHICH THERE IS ITA NO. 3077 TO 3079 & 3115 TO 3120/AHD/11 [GUJARAT CHEMICAL PORT TERMINAL CO. LTD.] - 8 - REASONABLE CERTAINTY OF REALIZATION. THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING AND THE INCOME HAST TO BE ACCOUNTED FOR WHEN IT IS ACCRUED TO IT UNDER THE MERCANTILE SYSTEM OF ACCOUNTING THE QUESTION OF REC OGNITION OF REVENUE UPON CERTAINTY OF REALIZATION DOES NOT ARISE. IT HAS TO BE ACCOUNTED FOR ON THE BASIS OF ACCRUAL. THE ASSESSEE HAS NOT ACCOUNTED FOR THE INCOME ON THE BASIS OF AC CRUAL. THEREFORE THE REVENUE FOR THE MINIMUM GUARANTEED QUANTITIES AGREED UPON BY THE US ER PROMOTERS 'HAVE TO BE ACCOUNTED FOR ON ACCRUAL BASIS. IT IS IMPORTANT TO MENTION TH AT IN THE EARLIER PREVIOUS YEAR ADDITION WAS MADE TO THE TOTAL INCOME OF THE ASSESSEE ON THE SAME ISSUE. THE FALL IN GP RATIO AS COMPARED TO THE LAST PREVIOUS YEAR ALSO REMAINED TO BE EXPLAINED BY THE ASSESSEE.' 15. THE ASSESSEE CHOSE TO FILE ITS WRITTEN OBJECTIO NS DATED 06.10.2008 BEFORE THE ASSESSING OFFICER AS PER HONBLE APEX COURTS JUDGM ENT IN GKN DRIVESHAFT (INDIA) LTD. VS. ITO 259 ITR 19 (SC). THE SAME STOOD REJEC TED FROM ASSESSING AUTHORITYS END AS DEVOID OF MERIT. IT THEREAFTER FRAMED CONSE QUENTIAL RE-ASSESSMENT ON 22.12.2008 INTER ALIA DISALLOWING / ADDING THE ABOV E DEPRECIATION ON INCOME TAX, DEPRECIATION ON ELECTRICAL INSTALLATION, REPAIR/MAI NTENANCE EXPENSES HELD CAPITAL IN NATURE AND MINIMUM QUANTITY SHORTFALL AMOUNTS OF RS .18,006/-, RS.13518338/-, RS.1,10,80,747/- & RS.54,00,02,000/-; RESPECTIVELY. 16. THE ASSESSEE PREFERRED APPEAL. IT CHALLENGED V ALIDITY OF THE ABOVE REOPENING FIRST OF ALL BY CALLING IT AS MERE CHANGE OF OPINIO N. IT THEREAFTER RAISED FOUR SUBSTANTIVE GROUNDS ON MERITS CHALLENGING CORRECTNE SS OF THE ABOVE AS MANY DISALLOWANCES/ADDITION. THE CIT(A)S ORDER UPHOLDS VALIDITY OF THE IMPUGNED REOPENING AS UNDER: 2.2 I HAVE CONSIDERED THE MATTER. IN APPELLANT'S C ASE, EVEN THOUGH ASSESSMENT HAD BEEN COMPLETED U/S 143(3) EARLIER, NOTICE U/S 1 48 WAS ISSUED ON 4.4.2007 I.E. WITHIN FOUR YEARS FROM THE END OF THE ASSESSMENT YE AR AND HENCE PROVISO BELOW SEC. 147 IS NOT APPLICABLE. AS HELD BY THE HON. SUPREME COURT IN THE CASE OF RAJESH JHAVERI STOCK BROKERS PVT. LTD. (2007) 291 ITR 500 (SC), UNDER SECTION 147 SUBSTITUTED W.E.F. 1,4.1989, ONLY CONDITION REQUIRE D TO BE FULFILLED FOR REOPENING WITHIN FOUR YEARS IS THAT THE AO MUST HAVE REASON T O BELIEVE THAT INCOME, PROFITS OR GAINS CHARGEABLE TO TAX ESCAPED ASSESSMENT. THE SUP REME COURT HELD THAT IF THE REOPENING IS WITHIN FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR, I.E. IN CASES NOT FALLING UNDER PROVISO TO SEC. 147; AFTER 1.4.1989, IF THE AO FOR WHATEVER REASON HAS REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMEN T, IT CONFERS JURISDICTION TO REOPEN THE ASSESSMENT. REGARDING 'CHANGE OF OPINION ', HON. HIGH COURT OF MADRAS IN THE CASE OF SHRI SHAKTHI TEXTILES LTD. (2010) 19 3 TAXMAN 216 (MAD) AFTER CONSIDERING SUPREME COURT'S DECISION IN THE CASE OF KELVINATOR OF INDIA LTD., HELD THAT THERE IS NO LEGAL NECESSITY THAT THE MATERIAL REFERRED TO IN SEC. 147 OF THE ACT SHOULD BE FRESH MATERIAL COLLECTED SUBSEQUENT TO TH E ORIGINAL ASSESSMENT ORDER AND ITA NO. 3077 TO 3079 & 3115 TO 3120/AHD/11 [GUJARAT CHEMICAL PORT TERMINAL CO. LTD.] - 9 - EVEN FROM THE MATERIALS ALREADY AVAILABLE ON RECORD , IF SUBSEQUENTLY AO HAS REASON TO BELIEVE THAT THERE WAS ESCAPEMENT OF ASSE SSMENT, SURELY HE CAN ISSUE NOTICE U/S 148, DECISION REFERRED TO BY THE APPELLA NT IN THE CASE OF GARDEN SILK MILLS 237 ITR 668 (GUJ) IS IN RESPECT OF NOTICE U/S 148 ISSUED UNDER LAW OF SECTION 147 AS IT STOOD PRIOR TO ITS AMENDMENT W.E.F. 1.4.8 9. THIS DECISION IS THEREFORE NOT APPLICABLE IN APPELLANT'S CASE. AS HELD BY THE SUPR EME COURT IN THE CASE OF RAJESH JHAVERI STOCK BROKERS PVT. LTD, AND OTHER CASES, SU FFICIENCY OF REASONS RECORDED BY THE AO CANNOT BE QUESTIONED FOR ASSESSMENTS REOPENE D WITHIN FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR. IT IS HELD THAT REOPENI NG OF ASSESSMENT U/S 147 WAS VALIDLY DONE IN APPELLANT'S CASE. 17. THE CIT(A) THEREAFTER DECLINED ASSESSEES ANOTH ER LEGAL ARGUMENT THAT THE ASSESSING OFFICER OUGHT NOT TO HAVE DISALLOWED / AD DED ITEMS OTHER THAN FORMING SUBJECT MATTER OF REOPENING REASONS (SUPRA). HE QU OTED SECTION 147 EXPLANATION 3 INSERTED BY THE FINANCE ACT (NO.2) OF 2009 WITH RET ROSPECTIVE EFFECT FROM 01.04.1989. THE ASSESSEE DOES NOT APPEAR TO HAVE P RESSED ITS CHALLENGE TO DEPRECIATION DISALLOWANCE OF RS.18,006/-. THE SAME ACCORDINGLY STOOD DISMISSED FOR WANT OF CHALLENGE. THE CIT(A) THEREAFTER ACCEP TED ASSESSEES CHALLENGE TO DEPRECIATION DISALLOWANCE OF RS.1,35,00,332/- QUA I TS JETTY & TRESTLE (SUPRA). HE THEN PARTLY AFFIRMED ASSESSING OFFICERS ACTION DIS ALLOWING EXPENSES OF RS.1,10,80,747/- TO EXTENT OF RS.85,56,054/- THEREB Y TREATING THE SAME AS CAPITAL EXPENDITURE AND BALANCE OF RS.25,24,693/- INCURRED ON PAINTING WORK AS REVENUE EXPENDITURE. LAST AND FINAL DISALLOWANCE OF SHORTA GE IN QUANTITY ALSO STANDS UPHELD IN LOWER APPELLATE ORDER AS PER CORRESPONDING FINDI NGS IN ASSESSMENT YEAR 2003-04. THIS LEAVES BOTH THE PARTIES AGGRIEVED TO THE EXTEN T OF THEIR GRIEVANCE PLEADED IN THEIR RESPECTIVE GROUNDS. 18. WE FIRST ADVERT TO ASSESSEES CHALLENGE TO VALI DITY OF REOPENING BY TERMING IT AS A CASE OF MERE CHANGE OF OPINION. THERE IS NO D ISPUTE THAT THE ASSESSING OFFICER INITIATED THE ABOVE REOPENING WITHIN FOUR YEARS FRO M THE END OF RELEVANT ASSESSMENT YEAR. IT HAS FURTHER COME ON RECORD THAT THE ASSES SEE ITSELF HAS ACCEPTED DISALLOWANCE OF DEPRECIATION OF RS.18,006/- (SUPRA) . SECTION 147 EXPLANATION 2 OF THE ACT ENVISAGES THAT ESCAPEMENT OF ASSESSMENT OF TAXABLE INCOME WOULD ARISE IN CASE OF EXCESSIVE DEPRECIATION COMPUTATION. IT IS THEREFORE A CASE WHEREIN THERE HAS BEEN A CLAIM OF NON ALLOWABLE DEPRECIATION CLAIM HA VING GONE ACCEPTED DURING ITA NO. 3077 TO 3079 & 3115 TO 3120/AHD/11 [GUJARAT CHEMICAL PORT TERMINAL CO. LTD.] - 10 - ASSESSMENT. HONBLE APEX COURTS JUDGMENT IN RAYMO ND WOOLEN MILL VS. ITO (1999) 236 ITR 34 (SC) HOLDS THAT SUFFICIENT PRIMA FACIE MATERIAL AVAILABLE WITH AN ASSESSING OFFICER POINTING TOWARDS ESCAPEMENT OF TA XABLE INCOME FROM BEING ASSESSED IS ENOUGH IN SETTING INTO MOTION THE REOPE NING IN QUESTION. WE THEREFORE FIND NO MERIT IN ASSESSEES INSTANT ARGUMENT. ITS FIRST SUBSTANTIVE TWO SUBSTANTIVE GROUNDS ARE ACCORDINGLY REJECTED. 19. THE ASSESSEES THIRD SUBSTANTIVE GROUND PLEADS THAT THE CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN CONFIRMING ASSESSING OFF ICERS ACTION MAKING DISALLOWANCES/ADDITIONS ON ISSUES OTHER THAN THOSE FORMING REASONS OF THE REOPENING. WE DO NOT FIND ANY SUBSTANCE IN THE INS TANT ARGUMENT SINCE IT HAS ALREADY COME ON RECORD THAT THE ONE OF THE ADDITION OF DEPRECIATION OF RS.18,006/- (SUPRA) ITSELF HAS ATTAINED FINALITY WHICH FORMED F IRST REASON OF REOPENING. THE ASSESSEES INSTANT THIRD SUBSTANTIVE GROUND IS ACCO RDINGLY REJECTED. 20. THE ASSESSEES FORTH SUBSTANTIVE GROUND SEEKS T O REVERSE BOTH THE LOWER AUTHORITIES ACTION HOLDING ITS REPAIR AND MAINTENA NCE EXPENDITURE OF RS.85,56,054/- OUT OF RS.1,10,80,747/- AS CAPITAL EXPENDITURE (SUP RA). WE FIND THAT THE CIT(A) FOLLOWS HIS ORDER PASSED IN ASSESSMENT YEAR 2006-07 FORMING SUBJECT MATTER OF APPEAL IN ITA NO.3079/AHD/2011 AFFIRMING IDENTICAL DISALLOWANCE AS UNDER: 3.2. 1 HAVE CONSIDERED THE SUBMISSIONS. ITEMS CATE GORIZED AS '(A) STORES & SPARES' OF RS.24,77,536/- ARE SPARE PARTS AND I AM IN AGREEMEN T WITH APPELLANT THAT REPLACEMENT OF PARTS, WHICH ARE NOT INDEPENDENT MACHINES BY THEMSE LVES WERE 'CURRENT REPAIRS' ALLOWABLE U/S.31. EXPENSES OF RS.35,40,533/- UNDER THE HEAD ' (B) PAINTING WORK' ARE ALSO ACCEPTED TO BE IN THE NATURE OF CURRENT REPAIRS, BEING INCUR RED TO PRESERVE AND MAINTAIN TANKS STORING CHEMICALS. REGARDING EXPENSES OF RS.31,04,2 41/- CLASSIFIED AS '(C) FABRICATION OF FRO TANK', THE EXPENSES WERE TOWARDS 'FABRICATION' AND 'ERECTION' OF TANKS AND NOT 'REPAIRS', APPELLANT'S CONTENTION THAT EXPENSES WER E TOWARDS REPAIRS OF EXISTING TANKS IS NOT SUPPORTED WITH ANY EVIDENCE. SUCH EXPENSE WAS THERE FORE RIGHTLY HELD TO BE OF CAPITAL NATURE. LASTLY, EXPENSE OF RS.36,46,346/-UNDER THE HEAD '(D) REPLACEMENT OF PIPELINE' WAS INCURRED FOR LAYING DOWN NEW PIPELINE FROM JETT Y TO TANK RESULTING IN ENDURING BENEFIT TO THE APPELLANT. SUCH EXPENSES WERE RIGHTLY CLASSI FIED AS CAPITAL EXPENDITURE. THE DECISIONS RELIED UPON BY THE APPELLANT CANNOT BE AP PLIED AS IT IS TO APPELLANT'S CASE; HOWEVER, THE PRINCIPLES LAID DOWN IN THE CASES OF S ARAVANA SPINNING MILLS PVT. LTD. 293 ITR 201 (SC), NEW SHORROCK SPINNING & MANUFACTURING CO. LTD., 30 ITR 338 (BOM) ETC. HAVE BEEN APPLIED WHILE DECIDING THE MATTER. TO SUM UP, OUT OF TOTAL EXPENDITURE OF RS.1,27,63,657/-, EXPENDITURE TO THE EXTENT OF RS.6 0,18,069/- IS HELD TO BE REVENUE ITA NO. 3077 TO 3079 & 3115 TO 3120/AHD/11 [GUJARAT CHEMICAL PORT TERMINAL CO. LTD.] - 11 - EXPENDITURE AND THE BALANCE AMOUNT, I.E. RS.67,50,5 88/- IS HELD TO BE CAPITAL EXPENDITURE. DEPRECIATION ALLOWED BY THE ASSESSING OFFICER MAY A CCORDINGLY BE MODIFIED. WE INVITED BOTH PARTIES ATTENTION TOWARDS ASSESSM ENT YEAR 2006-07 APPEAL HEREINABOVE. THE ASSESSEE HAD MOVED ITS FRO TANKS FROM ONE PLACE TO ANOTHER BY WAY OF CRANES AND SHAFTS IN ORDER TO COLLECT CHEMIC AL FROM INCOMING CARGO AND FOR HAVING REPLACED EXISTING NAPTHA PIPELINE FROM JETTY TO TANK. THERE IS NO MATERIAL ON RECORD INDICATING ANY INCREASE IN ASSESSEES ALR EADY INSTALLED CAPACITY IN BOTH THE ABOVE INSTANCES. OR THAT THE REPAIR AND MAINTENANC E EXPENDITURE IN QUESTION PERTAINS TO REPLACEMENT OF ASSETS CONCERNED. WE TH EREFORE OBSERVE THAT THE ASSESSEES ARGUMENTS CLAIMING BOTH THE ABOVE ITEMS AS REVENUE EXPENDITURE DESERVE TO BE ACCEPTED IN THE IMPUGNED ASSESSMENT YEAR 2004 -05 AS WELL AS IN 2006-07. THE CORRESPONDING GROUNDS IN THESE ASSESSMENT YEARS CHALLENGING THE IMPUGNED IDENTICAL DISALLOWANCE ARE ACCEPTED. 21. THE ASSESSEES NEXT SUBSTANTIVE GROUND ASSAILS CORRECTNESS OF BOTH THE LOWER AUTHORITIES FINDINGS DISALLOWING/ADDING MINIMUM ASS URED QUANTITY EXPENDITURE OF RS.54,00,02,000/- (SUPRA) IS FOUND TO BE COVERED IN ITS CASE APPEAL ITA NO.3076/AHD/2011 FOR ASSESSMENT YEAR 2003-04 DECIDE D ON 19.07.2016 WHEREIN THE ISSUE STANDS ACCEPTED AGAINST THE REVENUE. LEA RNED DEPARTMENTAL REPRESENTATIVE IS FAIR ENOUGH IN NOT POINTING OUT A NY DISTINCTION IN THE IMPUGNED ASSESSMENT YEAR. THIS DISALLOWANCE THEREFORE STAND S DELETED. THE ASSESSEES NEXT SUBSTANTIVE GROUND RAISED WITHOUT PREJUDICE TO THE INSTANT ONE STANDS RENDERED INFRUCTUOUS. ITS APPEAL ITA NO.3078/AHD/2011 IS PA RTLY ACCEPTED. 22. THIS LEAVES US WITH ASSESSEES LAST APPEAL ITA NO.3079/AHD/2011. ITS FIRST SUBSTANTIVE GROUND SEEKING TO DELETE DISALLOWANCE O F REPAIR AND MAINTENANCE EXPENSES OF RS.67,50,588/- AS CAPITAL EXPENDITURE A LREADY STANDS ACCEPTED IN PRECEDING PARAGRAPHS. 23. THE ASSESSEES SECOND SUBSTANTIVE GROUND SEEKIN G TO DELETE AMORTIZATION OF LEASE CHARGES OF RS.21,42,722/- IS ADMITTEDLY DECID ED IN REVENUES FAVOUR AS PER ITA NO. 3077 TO 3079 & 3115 TO 3120/AHD/11 [GUJARAT CHEMICAL PORT TERMINAL CO. LTD.] - 12 - THE ABOVE CO-ORDINATE BENCHS ORDER IN ASSESSMENT Y EAR 2002-03 (SUPRA). WE THEREFORE FOLLOW CONSISTENCY HEREIN AS WELL TO AFFI RM THE DISALLOWANCE IN QUESTION. 24. THE ASSESSEES THIRD SUBSTANTIVE GROUND SEEKS T O DELETE PRIOR PERIOD EXPENDITURE DISALLOWANCE OF RS.10,89,135/-. BOTH T HE LOWER AUTHORITIES HAVE REJECTED ITS EXPLANATION THAT SAME HAS IN FACT CRYS TALLIZED IN THE IMPUGNED ASSESSMENT YEAR. THEY FURTHER ARE OF THE VIEW THAT THERE IS NO SUCH EVIDENCE OF CRYSTALLIZATION OF THE SAID EXPENSES IN THE CASE FI LE. THE ASSESSEE SEEKS TO QUOTE HONBLE JURISDICTIONAL HIGH COURTS DECISION IN CIT VS. INDIAN PETROCHEMICAL CORPORATION LTD. (2016) 74 TAXMAN.COM 163 (GUJ) AND HONBLE BOMBAY HIGH COURTS JUDGMENT IN CIT VS. NAGRI MILLS LTD. 681 (B OM.). THERE CAN HARDLY BE ANY DISPUTE ABOUT THE RELEVANT LAW SETTLED IN ABOVE TWO JUDICIAL PRECEDENTS. THE ISSUE HOWEVER IS THAT OF EVIDENCE OF CRYSTALLIZATION. LE ARNED COUNSEL HAS FILED A LENGTHY PAPER BOOK TO THIS EFFECT. THE SAME NOWHERE PROVES AS TO HOW AND IN WHAT CIRCUMSTANCES THE EXPENDITURE IN QUESTION GOT CRYST ALLIZED. THE FACT HOWEVER ALSO REMAINS THAT NEITHER THE ASSESSING OFFICER NOR THE CIT(A) DOUBT GENUINENESS OF THE EXPENDITURE IN QUESTION IN PRINCIPLE. WE THEREFORE DIRECT THE ASSESSING OFFICER TO ALLOW THE SAID EXPENDITURE IN THE CORRESPONDING ASS ESSMENT YEAR INSTEAD OF THE IMPUGNED ASSESSMENT YEAR AFTER CALLING FOR NECESSAR Y RECORDS AS PER LAW. THIS ISSUE IS TAKEN AS ACCEPTED FOR STATISTICAL PURPOSES. 25. THE ASSESSEES NEXT SUBSTANTIVE GROUND CHALLENG ES BOTH THE LOWER AUTHORITIES ACTION DISALLOWING DEPRECIATION ON FOR EIGN EXCHANGE LOSS ON PAYMENT BASIS AMOUNTING TO RS.2,28,282/-. BOTH OF THEM INV OKE SECTION 43A OF THE ACT AGAINST THE ASSESSEE. A PERUSAL OF THE SAID STATUT ORY PROVISION MAKES IT APPARENT THAT THE SAME IS APPLICABLE ONLY AN ASSESSEE ACQUIR ES THE CAPITAL ASSET IN QUESTION FROM A COUNTRY OUTSIDE INDIA. THE CIT(A) UPHOLDS A SSESSING OFFICERS ACTION AS FOLLOWS: 3.2. 1 HAVE CONSIDERED THE MATTER. APPELLANTS CO NTENTION IS THAT SECTION 43A IS NOT APPLICABLE DUE TO ASSETS BEING SELF CONSTRUCTED. A PPELLANT SUBMITTED BEFORE THE ASSESSING OFFICER THROUGH LETTER DATED 14.11.2008 THAT THE CA PITALIZATION OF FOREIGN EXCHANGE LOSS IN QUESTION PERTAINED TO PLANT, AND MACHINERY AND JETT Y & TRESTLE, WHICH WERE CONSTRUCTED IN INDIA. THUS, THE FOREIGN EXCHANGE LOSS IN QUESTION PERTAINED TO VARIOUS MACHINES AND PARTS IMPORTED FROM OUTSIDE INDIA WHICH WERE USED FOR CON STRUCTING THE JETTY ETC. IN INDIA. ITA NO. 3077 TO 3079 & 3115 TO 3120/AHD/11 [GUJARAT CHEMICAL PORT TERMINAL CO. LTD.] - 13 - SECTION 43A IS APPLICABLE IN RESPECT OF INCREASE OR REDUCTION DUE TO FOREIGN EXCHANGE RATE IN RESPECT OF ANY ASSETS ACQUIRED FROM OUTSIDE INDI A AND MACHINES AND PARTS USED FOR CONSTRUCTING THE JETTY ETC. WERE 'ASSETS' BY THEMSE LVES AND EXCHANGE RATE LOSS/GAIN IN THEIR RESPECT WOULD ALSO BE GOVERNED BY SECTION 43A. FURT HER, SUPREME COURT IN THE CASE OF ONGC (2010 189 TAXMAN 292 (SC) HELD THAT 'ACTUAL PA YMENT' IS A CONDITION UNDER AMENDED SECTION 43A W.E.F. 1.4.2003 AND SUCH PAYMEN T OF DECREASED/ENHANCED LIABILITY ON ACCOUNT OF FLUCTUATION IN FOREIGN EXCHANGE RATE HAS BEEN MADE A CONDITION PRECEDENT FOR MAKING ADJUSTMENT IN THE CARRYING AMOUNT OF FIXED A SSETS. SINCE IN APPELLANT'S CASE, THE PERIOD INVOLVED IS F.Y.2005-06,I.E. AFTER AMENDMENT IN SECTION 43A W.E.F. 1.4.2003, DECREASE OR INCREASE IN LIABILITY ON NOTIONAL BASIS AS PER AS-11 CANNOT BE ADDED TO COST OF UNDERLYING ASSETS IN VIOLATION OF SECTION 43A. REG ARDING APPELLANT'S REQUEST TO ALLOW THE CLAIM OF DEPRECIATION IN THE YEAR OF ACTUAL PAYMENT , APPELLANT IS TO MAKE THE CLAIM BEFORE THE ASSESSING OFFICER AS PER LAW IN THE CONCERNED Y EAR. DISALLOWANCE OF DEPRECIATION OF RS.2,28,282/- IS CONFIRMED. 26. LEARNED COUNSEL REPRESENTING ASSESSEE STRONGLY ARGUES THAT BOTH THE LOWER AUTHORITIES HAVE ERRED IN MAKING THE IMPUGNED DISAL LOWANCE. HE HAS ALSO FILED ELABORATE WRITTEN SUBMISSION THAT THE ASSETS IN QUE STION HAD IN FACT BEEN ACQUIRED FROM WITHIN INDIA ONLY. THERE IS HOWEVER NO REBUTT AL TO THE CIT(A)S FINDINGS THAT THE ASSESSEE HAD IN FACT IMPORTED MACHINES, PARTS F ROM OUTSIDE INDIA FOR THE PURPOSE OF CONSTRUCTING ITS JETTY. LOWER APPELLATE AUTHORI TIES FURTHER CONCLUSION ON ACTUAL PAYMENT ASPECT (SUPRA) HAS ALSO NOT BEEN CONTROVERT ED. WE THEREFORE FIND NO MERIT IN ASSESSEES INSTANT SUBSTANTIVE GROUND. THE SAME STANDS REJECTED. 27. THE ASSESSEES NEXT SUBSTANTIVE GROUND PLEADS T HAT BOTH THE LOWER AUTHORITIES HAVE ERRED IN TREATING ITS LOAN RESTRUCTURING EXPEN SES OF RS.35LACS AS CAPITAL IN NATURE. THE ASSESSEE HAS ADMITTEDLY MADE THE SAID PAYMENT TO M/S. BRESCON CORPORATE ADVISOR FOR THE PURPOSE OF LOAN RESTRUCTU RING. PAGES 100 TO 104 INTER ALIA DEMONSTRATE THAT ASSESSEE HAD BEEN PAYING INTEREST AT AVERAGE RATE @12.89% STATED TO HAVE COME DOWN TO 7.85% FURTHER REDUCING ITS AVE RAGE INTEREST OUTGO FROM RS.55.29CRORES TO RS.47.17CRORES ON YEAR TO YEAR BA SIS. THERE IS FURTHER NO QUARREL THAT THE INTEREST IN QUESTION IS OTHERWISE ALLOWABL E AS REVENUE EXPENDITURE. HONBLE JURISDICTIONAL HIGH COURTS DECISION IN DCI T VS. GUJARAT NARMDA VALLEY FERTILIZERS CO. LTD. 33 TAXMANN.COM 117 (GUJ) AND C IT VS. GUJARAT STATE FERTILIZERS & CHEMICALS LTD. 358 ITR 323 (GUJ) HOLD THAT RESTR UCTURING EXPENSES ARE ADMISSIBLE AS REVENUE EXPENDITURE. WE THEREFORE DI RECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED DISALLOWANCE. ITA NO. 3077 TO 3079 & 3115 TO 3120/AHD/11 [GUJARAT CHEMICAL PORT TERMINAL CO. LTD.] - 14 - 28. THE ASSESSEES LAST SUBSTANTIVE GROUND SEEKS TO DELETE DISALLOWANCE PERTAINING TO MINIMUM GUARANTY PAYMENT IN ASSESSMEN T YEARS 2003-04 & 2004-05 AS AN ALTERNATIVE SUBMISSION TO ITS CORRESPONDING P LEADINGS IN SAID ASSESSMENT YEARS. WE HAVE ALREADY DELETED THE ABOVE DISALLOWA NCE IN PRECEDING PARAGRAPHS. THIS SUBSTANTIVE GROUND IS ACCORDINGLY RENDERED INF RUCTUOUS. ASSESSEES APPEAL ITA NO.3079/AHD/2011 IS THEREFORE PARTLY ACCEPTED. 29. WE QUOTE OUR ABOVE DISCUSSION TO DISMISS REVENU ES ALL SIX APPEALS ITA NOS. 3115 TO 3120/AHD/2011 PERTAINING TO ASSESSMENT YEARS 2002-03 TO 2006-07. ASSESSEES APPEAL ITA NOS. 3077/AHD/2011 IS DISMISS ED WHEREAS ITA NOS.3078/AHD/2011 AND 3079/AHD/2011 ARE PARTLY ALLO WED. [PRONOUNCED IN THE OPEN COURT ON THE 13 TH DAY OF NOVEMBER, 2017.] SD/- SD/- (PRAMOD KUMAR) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL M EMBER AHMEDABAD: DATED 13/11/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 45 / GUARD FILE. BY ORDER / . // . /0