The ACIT, Circle-15(1), New Delhi V. M/s. Ranbaxy Laboratories Ltd., New Delhi

ITA 3094/DEL/2011

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6098 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-09-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 01-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA M AGARWAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Business expenditure; Revenue expenditure; Capital expenditure
• Section: 43B; 143(3); 144

Judgement Text

ITA NOS. 2430 & 3094/DEL/2011 RANBAXY LABORATORIES LTD VS. ACIT A.Y. 2006-07 PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND MAHAVIR PRASAD JM] I.T.A. NO.2430/DEL/2011 ASSESSMENT YEAR : 2006-07 RANBAXY LABORATORIES LTD .....APPELLANT 12 TH FLOOR, DEVIKA TOWERS, 6, NEHRU PLACE, NEW DELHI [PAN : AAACR 0127 N] VS. ADDL. COMMISSIONER OF INCOME-TAX .RESPONDENT RANGE-15, NEW DELHI I.T.A. NO.3094/DEL/2011 ASSESSMENT YEAR : 2006-07 ADDL. COMMISSIONER OF INCOME-TAX .....APPELLANT RANGE-15, NEW DELHI VS. RANBAXY LABORATORIES LTD .RESPONDENT 12 TH FLOOR, DEVIKA TOWERS, 6, NEHRU PLACE, NEW DELHI [PAN : AAACR 0127 N] APPEARANCES BY: SN SOPARKAR FOR THE ASSESSEE APARNA M AGARWAL FOR THE REVENUE DATE OF CONCLUDING THE HEARING : 27.11.2017 DATE OF PRONOUNCING THE ORDER : 14.02.2018 O R D E R PER PRAMOD KUMAR, AM: 1. THESE CROSS APPEALS ARE DIRECTED AGAINST LEARNED CIT(A)S ORDER DATED 28 TH MARCH 2011, IN THE MATTER OF ASSESSMENT UNDER SECTI ON 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER), FOR THE ASSESSMENT YE AR 2006-07. 2. SO FAR AS THE APPEAL FILED BY THE ASSESSEE IS CO NCERNED, SOLITARY GRIEVANCE OF THE ASSESSEE IS AS FOLLOWS :- ITA NOS. 2430 & 3094/DEL/2011 RANBAXY LABORATORIES LTD VS. ACIT A.Y. 2006-07 PAGE 2 OF 7 THAT ON LAW, FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN NOT ALLOWING RS.2,95,18,083/- AS BUSINESS DEDUCTION, CHARGED TO PROFIT & LOSS ACCOUNT DURING THE YEAR UNDER APPEAL, BEING TH E DEFERRED EMPLOYEES COMPENSATION ON ACCOUNT OF COMPANYS EMPLOYEES STOC K OPTION SCHEME (ESOP). 3. LEARNED COUNSEL FOR THE ASSESSEE FAIRLY POINTS O UT THAT THE LEARNED CIT(A) HAS MERELY FOLLOWED HIS OWN ORDER FOR THE ASSESSMENT YE AR 2005-06 WHICH WAS APPROVED BY THIS TRIBUNAL VIDE A CO-ORDINATE BENCHS ORDER DATE D 21.05.2010. HE, HOWEVER, ADDS THAT THIS ISSUE WAS THEREAFTER SUBJECT MATTER OF A SPECIAL BENCH OF THIS TRIBUNAL, IN THE CASE OF BIOCON LIMITED VS. DCIT [(2014) 144 ITD SB 21], AND BY HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. PVP VENTURES LIMITED [ (2012) 23 TAXMANN.COM 268 (MAD)]. FOLLOWING THESE BINDING JUDICIAL PRECEDENTS, ANOTHE R CO-ORDINATE BENCH, IN ASSESSEES OWN CASE - REPORTED AS RANBAXY LABORATORIES LIMITED VS ACIT [(2016) 68 TAXMANN.COM 322 (DEL)], HAS DECIDED THE SAME ISSUE IN FAVOUR OF THE ASSESSEE. WE ARE THUS URGED TO FOLLOW THE LATER DECISION, WHICH FOLLOWS THE SPECIA L BENCH DECISION IN THE CASE OF BIOCON LIMITED (SUPRA) AND HONBLE MADRAS HIGH COURT DECIS ION IN THE CASE OF PVP VENTURES (SUPRA), AND UPHOLD ASSESSEES GRIEVANCE ON THIS IS SUE. LEARNED DEPARTMENTAL REPRESENTATIVE RELIES UPON THE ORDERS OF THE AUTHOR ITIES BELOW. 4 WE FIND THAT ONCE HIGHER TIERS OF JUDICIAL HIERAR CHY, I.E. A SPECIAL BENCH OF THIS TRIBUNAL AS ALSO HONBLE HIGH COURT, HAVE EXPRESSED VIEW IN FAVOUR OF THE ASSESSEE, THE EARLIER DECISIONS OF HIS TRIBUNAL CEASE TO HAVE ANY BINDING FORCE. FOLLOWING THE BINDING JUDICIAL PRECEDENTS IN BIOCONS CASE (SUPRA ) AND IN PVP VENTURES CASE (SUPRA) AND FOLLOWING THE CO-ORDINATE BENCH DECISION IN ASS ESSEES OWN CASE FOR THE ASSESSMENT YEAR 2008-09, WHICH IS IN HARMONY WITH T HOSE BINDING PRECEDENTS, WE UPHOLD THE GRIEVANCE OF THE ASSESSEE AS, BEYOND A NY DISPUTE OR CONTROVERSY, THE ISSUE IN APPEAL IS SQUARELY COVERED BY THESE DECISI ONS. THE DISALLOWANCE OF RS.2,95,18,082/-, ON ACCOUNT OF DEFERRED EMPLOYEE C OMPENSATION ON ACCOUNT OF ESOP, IS DELETED. 5. THE APPEAL OF THE ASSESSEE IS THUS ALLOWED. 6. WE NOW TAKE UP THE APPEAL FILED BY THE ASSESSING OFFICER. 7. IN THE GROUND NO.1, THE ASSESSING OFFICER HAS RA ISED THE FOLLOWING GRIEVANCE :- THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION/DISALLOWANCE MADE U/ S 43B(B) OF THE I.T. ACT, AMOUNTING TO RS.13,17,69,466/- BEING PROVISION FOR PENSION BASED ON ACTUARIAL VALUATION. 8. LEARNED REPRESENTATIVE FAIRLY AGREE THAT THE LEA RNED CIT(A) HAS MERELY FOLLOWED HIS ORDER FOR THE ASSESSMENT YEAR 2005-06 AND A CO- ORDINATE BENCH OF THIS TRIBUNAL HAS APPROVED THE SAID ORDER ON THIS POINT BY OBSERVING AS FOLLOWS :- ITA NOS. 2430 & 3094/DEL/2011 RANBAXY LABORATORIES LTD VS. ACIT A.Y. 2006-07 PAGE 3 OF 7 5. GROUND NO. 1 OF THE REVENUE'S APPEAL. IDENTICAL ISSUE WAS DECIDED BY THE TRIBUNAL IN ITA NO. 2613/DEL/2004 & ORS. IN ASSESSE E'S OWN CASE VIDE ORDER DATED 12.6.2009 WHEREIN THE TRIBUNAL HAS HELD AS UN DER:- '16. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS. THIS ISSUE IS FOUND TO BE COVERED BY THE AFOREMENTIONED DECISION OF TRIBUNAL IN ASSESSEE'S OWN CASE FOR A.Y. 1999-00. FOR THE SAKE OF CLARITY THE RELEVANT PORTION FROM THE SAID ORDER IS REPRODUCED BELOW: - 'THE NEXT DISPUTE IN THE REVENUE'S APPEAL FOR A.Y. 1999- 2000 RELATES TO DISALLOWANCE OF RS. 1,99,73,822/- MADE BY THE AO BY APPLYING THE PROVISIONS OF SEC. 43B(B) ON ACCOUNT OF PROVISION F OR PENSION. WE HAVE HEARD BOTH THE SIDES AND GONE THROUGH THE R ECORDS. EARLIER THE ASSESSEE WAS HAVING A SUPERANNUATION SCHEME WITH TH E LIC WHEREIN THE CONTRIBUTIONS WERE MADE AT CERTAIN PERCENTAGE OF SA LARIES OF THE EMPLOYEES. THE PENSION PAYABLE UNDER THE SAID SUPER ANNUATION SCHEME WAS FOUND TO BE TOO LOW AND THE ASSESSEE FOUND IT D IFFICULT TO ATTRACT AND RETAIN MANAGEMENT OF EMPLOYEES. A NEW PENSION SCHEM E WAS INTRODUCED W.E.F. 01.11.1997. THIS PENSION WAS APPLICABLE TO A LL MANAGEMENT EMPLOYEES AND WAS NON FUNDED. IN OTHER WORDS, NO SE PARATE FUND WAS CREATED AND THE PENSION WAS PAYABLE TO THE EMPLOYEE S UPON THEIR RESIGNATION/RETIREMENT OR TO THE FAMILY MEMBERS IN THE EVENT OF DEATH OF THE EMPLOYEE. THE ASSESSEE GOT THE FRESH ACTUARIAL VALUATION. THE INCREMENTAL DIFFERENCE WAS DEBITED TO THE P&L A/C. THE CIT(A) ALLOWED THE PROVISION AND HELD THAT THERE CAN NO QUESTION OF DI SALLOWANCE U/S 43B OF THE ACT. WE HAVE GONE THROUGH THE IMPUGNED ORDER AND IN THE LIGHT OF THE FACT THAT THERE WAS NO CONTRIBUTION OF ANY PENSION TO ANY FUN D AND THE ASSESSEE HAS ONLY PROVIDED ON THE BASIS OF THE ACTUARIAL VAL UATION, THE ADDITIONAL LIABILITY. THE QUESTION OF DISALLOWANCE OF SAME U/S 43B IS CLEARLY MI-SPELT. WE, THEREFORE, AGREE WITH THE REASONING GIVEN BY TH E CIT(A) AND DECLINE TO INTERFERE.' 5.1 RESPECTFULLY FOLLOWING THE PRECEDENT, WE UPHOLD THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 9. IN VIEW OF THE ABOVE FACTUAL POSITION AND BEARIN G IN MIND ENTIRETY OF THE CASE, WE APPROVE THE CONCLUSIONS ARRIVED AT BY THE LEARNED C IT(A) ON THIS POINT, AND DECLINE TO INTERFERE IN THE MATTER. 10. GROUND NO.1 IS THUS DISMISSED 11. IN THE GROUND NO.2, THE ASSESSING OFFICER HAS R AISED THE FOLLOWING GRIEVANCE :- THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF WEIGHED DEDUC TION U/S 25(2AB) IN RESPECT OF ITA NOS. 2430 & 3094/DEL/2011 RANBAXY LABORATORIES LTD VS. ACIT A.Y. 2006-07 PAGE 4 OF 7 EXPENDITURE ON SCIENTIFIC RESEARCH & DEVELOPMENT CA RRIED IN APPROVAL IN-HOUSE FACILITIES AMOUNTING TO RS.2,49,95,808/- 12. LEARNED REPRESENTATIVE FAIRLY AGREE THAT THE LE ARNED CIT(A) HAS MERELY FOLLOWED HIS ORDER FOR THE ASSESSMENT YEAR 2005-06 AND A CO- ORDINATE BENCH OF THIS TRIBUNAL HAS APPROVED THE SAID ORDER ON THIS POINT BY OBSERVING AS FOLLOWS :- 8. GROUND NO. 5 OF THE REVENUE'S APPEAL. IDENTICAL ISSUE WAS DECIDED BY THE TRIBUNAL IN ITA NO. 2613/DEL/2004 & ORS. VIDE ORDER DATED 12.6.2009 WHEREIN THE TRIBUNAL HAS HELD AS UNDER:- '36. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS. WE FOUND THAT THIS ISSUE IS COVERED BY AFOREMENTIONED DECISION OF TRIBUNAL F OR A.Y. 99-00 IN ASSESSEE'S OWN CASE. THE RELEVANT PORTION OF ORDER IS REPRODUC ED BELOW: - 'THE NEXT DISPUTE IN ASSESSEE'S APPEAL FOR A.Y. 99- 00 RELATES TO THE CLAIM OF WEIGHTED DEDUCTION U/S 35(2AB) ON THE CAPITAL EXPEN DITURE INCURRED BY THE ASSESSEE IN RESPECT OF IN-HOUSE R&D CENTER WHICH IS DULY APPROVED BY THE GOVT. OF INDIA. THE ASSESSEE IS A PHARMACEUTICAL COMPANY AND RESGUL ARLY CARRIES ON IN-HOUSE AND RESEARCH AND DEVELOPMENT ACTIVITY RELATING TO I TS BUSINESS AT THE FACILITIES APPROVED BY THE DEPARTMENT OF SCIENCE & INDUSTRIAL RESEARCH, GOVT. OF INDIA, U/S 35(2AB) OF THE ACT. IN THE COMPUTATION OF THE TOTAL INCOME, THE ASSESSEE CLAIMED THE ENTIRE EXPENDITURE, BOTH OF REVENUE AND CAPITAL , AS A DEDUCTION UNDER THE AFORESAID SECTION. THE DEPARTMENT ACCEPTED AND ALLO WED IT AS BUSINESS EXPENDITURE. THE ASSESSEE HAS RELIED ON THE FOLLOWI NG AUTHORITIES IN SUPPORT OF ITS CLAIM FOR WEIGHTED DEDUCTION IN RESPECT OF THESE EX PENSES: 1. CIT VS. SMITHKLINE & FRENCH (LTD.) 77 TAXMAN 153 (KAR.) (SLP 2. VIJAY SEEDS PVT. LTD. VS. ACIT 79 ITD 233 (PUNE) 3. CLARIS LIFE SCIENCES LTD. VS. ACIT 112 ITD 307 ( AHD.) 4. SMITHKLINE BEECHAM CONSUMER HEALTHCARE LTD. (FORMERLY KNOWN AS HMM LTD.) VS. IAC 1089/CHD./ 87 (A.Y. 1983-84). THE LD. DR, ON THE OTHER HAND, VEHEMENTLY SUPPORTED THE IMPUGNED ORDER. WE HAVE GONE THROUGH THE RECORDS. THE EXPENDITURE H AS BEEN INCURRED BY THE ASSESSEE ON VEHICLES, COMPUTERS AND OTHER ASSETS, P ROVIDED TO ITS EMPLOYEES WORKING AT THE APPROVED RESEARCH FACILITIES AND DIR ECTLY ENGAGED IN THE RESEARCH AND DEVELOPMENT ACTIVITIES. THE AO, IT MAY BE POINT ED OUT, DID NOT ACCEPT THE CLAIM OF THE ASSESSEE IN RESPECT OF WEIGHTED DEDUCT ION, WITHOUT ANY DISCUSSION IN HIS ORDER. THERE IS NO DISPUTE THAT THE EXPENDITURE IN QUESTION WAS INCURRED BY THE ASSESSEE IN RESPECT OF RESEARCH & DEVELOPMENT F ACILITIES WHICH HAVE BEEN DULY APPROVED BY THE PRESCRIBED AUTHORITY U/S 35(2A B). THEREFORE, THE ASSESSEE IS CLEARLY ENTITLED FOR WEIGHTED DEDUCTION. IT WAS ALSO REPORTED TO US AT THE TIME OF HEARING THAT THE CIT(A) DIRECTED WEIGHTED DEDUCTION U/S 35(2AB) WHILE DEALING WITH THE CLAIM OF THE ASSESSEE FOR A.Y. 01-02 IN RE SPECT OF SIMILAR EXPENSES. THERE IS NO REASON TO DENY THE SAME IN THE YEAR IN QUESTION. ACCORDINGLY, WE ITA NOS. 2430 & 3094/DEL/2011 RANBAXY LABORATORIES LTD VS. ACIT A.Y. 2006-07 PAGE 5 OF 7 DIRECT THE AO TO ALLOW THE WEIGHTED DEDUCTION IN RE SPECT OF THESE EXPENSES U/S 35(2AB) OF THE ACT.' 8.1 RESPECTFULLY FOLLOWING THE PRECEDENT, WE UPHOLD THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 13. IN VIEW OF THE ABOVE FACTUAL POSITION AND BEARI NG IN MIND ENTIRETY OF THE CASE, WE APPROVE THE CONCLUSIONS ARRIVED AT BY THE LEARNED C IT(A) ON THIS POINT, AND DECLINE TO INTERFERE IN THE MATTER. 14. GROUND NO.2 IS THUS DISMISSED 15. IN THE GROUND NO.3, THE ASSESSING OFFICER HAS R AISED THE FOLLOWING GRIEVANCE :- THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS.35,00,000/ - AND RS.10,00,000/- IN RESPECT OF CONTRIBUTION TO RANBAXY COMMUNITY HEALTH CARE SOCIETY AND RANBAXY SCIENCE FOUNDATION RESPECTIVELY. 16. LEARNED REPRESENTATIVE FAIRLY AGREE THAT THE LE ARNED CIT(A) HAS MERELY FOLLOWED HIS ORDER FOR THE ASSESSMENT YEAR 2005-06 AND A CO- ORDINATE BENCH OF THIS TRIBUNAL HAS APPROVED THE SAID ORDER ON THIS POINT BY OBSERVING AS FOLLOWS :- 6. GROUND NO. 2 OF THE REVENUE'S APPEAL. IDENTICAL ISSUE WAS DECIDED BY THE TRIBUNAL IN ITA NO. 3925/DEL/2002 VIDE ORDER DATED 31.3.2008 WHEREIN THE TRIBUNAL HAS HELD AS UNDER:- '6.16 IN VIEW OF THE ABOVE AUTHORITIES, IT IS CLEAR THAT EVEN IF THERE IS NO STATUTORY OBLIGATION ON THE PART OF THE ASSESSEE TO INCUR THE EXPENDITURE, BUT THE EXPENDITURE HAS BEEN INCURRED TO BRING GOOD-WILL TO THE ASSESSEE OR IS FOR THE PURPOSE OF PROMOTING ITS BUSINESS THEN SUCH EXPEND ITURE IS TO BE ALLOWED AS BUSINESS EXPENDITURE. IN VIEW OF THE ABOVE, WE UPHO LD THE CLAIM OF THE ASSESSEE AND ALLOW GROUND NO.5.' 6.1 RESPECTFULLY FOLLOWING THE PRECEDENT, WE UPHOLD THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 17. IN VIEW OF THE ABOVE FACTUAL POSITION AND BEARI NG IN MIND ENTIRETY OF THE CASE, WE APPROVE THE CONCLUSIONS ARRIVED AT BY THE LEARNED C IT(A) ON THIS POINT, AND DECLINE TO INTERFERE IN THE MATTER. 18. GROUND NO.3 IS THUS DISMISSED 19. IN GROUND NO.4, THE ASSESSING OFFICER HAS RAISE D THE FOLLOWING GRIEVANCE. ITA NOS. 2430 & 3094/DEL/2011 RANBAXY LABORATORIES LTD VS. ACIT A.Y. 2006-07 PAGE 6 OF 7 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF E XPENDITURE OF RS.22,07,03,117/- INCURRED ON RAISING THE LOAN AMOU NTING TO USD 440 MILLION THROUGH ZERO COUPON FOREIGN CURRENCY OPTIONAL CONVE RTIBLE BONDS AS SHARE ISSUE EXPENDITURE. 20. BRIEFLY STATED, RELEVANT MATERIAL FACTS ARE LIK E THIS. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT THE ASS ESSEE HAS INCURRED AN EXPENDITURE OF RS.22,75,03,117/- ON RAISING THE BORROWINGS OF U S$ 440 MILLIONS THROUGH ZERO COUPON CONVERTIBLE BONDS. THE ASSESSING OFFICER NOTED THA T THESE BONDS ARE OPTIONALLY CONVERTIBLE INTO EQUITY AND HAVE BEEN UTILIZED BY T HE ASSESSEE TO SUBSCRIBE TO EQUITY SHARES OF ITS DUTCH SUBSIDIARY COMPANY, I.E. RANBA XY NETHERLANDS BV, WHICH IN TURN USED THE FUNDS TO ACQUIRE A ROMANIAN COMPANY. ON T HESE FACTS, AND ALSO HAVING NOTED THAT BOND HOLDERS COULD GET THE BONDS CONVERTED INT O EQUITY SHARES WITHIN PERMISSIBLE WINDOW OF 27.4.2006 TO 18.03.2011, THE ASSESSING OF FICER TREATED THE EXPENDITURE AS CAPITAL EXPENDITURE FOR RAISING OF SHARE CAPITAL. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A) WHO DELETED THE DISALLOWANCE BY OBSERVING AS FOLLOWS :- 7.4 ON CAREFUL EXAMINATION OF THE MATTER AND IN VIE W OF THE FACT THAT THE LOAN RAISED BY THE APPELLANT THROUGH FCCB HAVE BEEN REPA ID ALONG WITH REDEMPTION PREMIUM ON 17.03.2011, I FIND THAT THE FUNDS REMAIN ED LOAN AND WERE NEVER CONVERTED INTO SHARE CAPITAL. THEREFORE, THE DECIS ION OF SUPREME COURT IN THE CASE OF BROOKE BOND (SUPRA) WHEREIN THE SHARE ISSUE EXPENSES WERE HELD AS CAPITAL WOULD NOT APPLY. RESPECTFULLY FOLLOWING TH E HONBLE SUPREME COURTS DECISION IN THE CASE OF INDIA CEMENTS LTD. AND HON BLE RAJASTHAN HIGH COURTS DECISION IN THE CASE OF SECURE METERS LTD (SUPRA), THE EXPENDITURE INCURRED ON RAISING LOAN THROUGH ABOVE DEBENTURES IS TO BE ALLO WED AS REVENUE EXPENDITURE. THE IMPUGNED ADDITION OF RS.22,75,03,117/- IS, THER EFORE, DELETED. 21. AGGRIEVED BY THE RELIEF SO GRANTED BY THE LEARN ED CIT(A), THE ASSESSING OFFICER IS IN APPEAL BEFORE ME OR US. 22. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLIC ABLE LEGAL POSITION. 23. WE FIND THAT THIS ISSUE IS NOW COVERED IN FAVOU R OF THE ASSESSEE, BY A SERIES OF JUDICIAL PRECEDENTS INCLUDING IN THE CASE OF CIT VS . SECURE METERS LTD [(2010) 321 ITR 611 (RAJ)], CIT VS. HAVELLS INDIA LTD [(2013) 352 I TR 376 (DEL)] AND CIT VS INDIAN RAILWAY FINANCE CORPORATION LIMITED [(2014) 362 ITR 548 (DEL)]. IN ANY CASE, THE CONVERSION INTO SHARES DID NOT ACTUALLY TAKE PLACE. ENTIRE LOAN WAS REPAID, ALONG WITH REDEMPTION PREMIUM ON 17.03.201. IN VIEW OF THESE DISCUSSIONS, AND IN THE LIGHT OF THE BINDING JUDICIAL PRECEDENTS REFERRED TO EARLIER, TH E ORDER OF THE LEARNED CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. WE, THEREFORE, APPROVE THE ORDER OF THE LEARNED CIT(A) ON THIS POINT AS WELL AND DECLINE TO INTERFERE IN THE MATTE R. ITA NOS. 2430 & 3094/DEL/2011 RANBAXY LABORATORIES LTD VS. ACIT A.Y. 2006-07 PAGE 7 OF 7 24. GROUND NO.4 IS THUS ALSO DISMISSED. 25. THE APPEAL OF THE ASSESSING OFFICER IS THUS DIS MISSED. TO SUM UP, WHILE APPEAL OF THE ASSESSEE IS ALLOWED, APPEAL OF THE ASSESSING OFFICER IS DISMISSED.. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 14 TH DAY OF FEBRUARY, 2018. SD/- SD/- MAHAVIR PRASAD PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, THE 14 TH DAY OF FEBRUARY, 2018 **BT/PBN* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD 1. DATE OF DICTATION: ... 12.02.2018... ORDER PREP ARED AS PER 10 PAGES MANUSCRIPT OF HONBLE AM, WHICH ARE ENCLOSED HEREWITH..... 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 12.02.2018..... 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR . P.S./P.S.: . 12.02.2018............ 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: ... 14.02.2018...... 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK : .... 14.02.2018.................... 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK : . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 8. DATE OF DESPATCH OF THE ORDER: ......