The DCIT, Circle-1(1), Baroda V. Dakshin Gujarat Vij Co.Ltd., Surat

ITA 3111/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94399 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 03-09-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 08-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R I PATEL
• Keywords: Business expenditure
• Section: 37(1); 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEFORE: S H RI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER DAKSHIN GUJARAT VIJ CO. LTD., NANA VARACHHA, ROAD, KAPODARA, SURAT PAN: AABCD8912C (APPELLANT) VS DY. COMMISSIONER OF INCOME TAX, CIRCLE 1(1), BARODA (RESPONDENT) DY. COMMISSIONER OF INCOME TAX, CIRCLE 1(1), BARODA (APPELLANT) VS DAKSHIN GUJARAT VIJ CO. LTD., NANA VARACHHA, ROAD, KAPODARA, SURAT PAN: AABCD8912C (RESPONDENT) REVENUE BY : S H RI R.I. PATEL, CIT - D . R. ASSESSEE BY: NONE DATE OF HEARING : 03 - 09 - 2 015 DATE OF PRONOUNCEMENT : 18 - 09 - 2 015 I T A NO . 2860 / A H D/20 11 A SSESSMENT YEAR 200 8 - 09 ITA NO. 3111 /AHD/20 11 ASSESSMENT YEAR 200 8 - 09 I.T.A NO. 2860 & 3111 /AHD/20 11 A.Y. 2008 - 09 PAGE NO DAKSHIN GUJARAT VI J CO. LTD VS. DCIT 2 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THESE CROSS APPEAL S FILED BY ASSESSEE AND THE REVENUE FOR ASSESSMENT YEAR 200 8 - 09 , AR ISE FROM ORDER OF THE CIT(A) - I, BARODA DATED 16 - 09 - 2011 IN APPEAL NO. CAB - I/148/ 10 - 11 , IN PROCEEDINGS UNDER SECTION 14 3(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. CASE CALLED TWICE. NONE APPEARS FOR THE ASSESSEE. A PERUSAL OF THE CASE FILE REVEALS THAT THE ASSESSEE HAS NOT PUT IN APPEARANCE ON EARLIER OCCASIONS DESPITE SERVICE OF NOTICE. WE ACCORDINGLY D ISMISS ITS APPEAL ITA 2860/AHD/2011 FOR NON - PROSECUTION AF TER HAVING CONSIDERED CIT VS. MULTIPLAN INDIA (PVT.) LTD., 38 ITD 320 (DELHI ) . THE ASSESSEE IS PROCEEDED EX - PARTE IN REVENUE S APPEAL ITA 3111/AHD/2011. WE ACCORDINGLY PROCEED TO DECIDE THIS LATTE R APPEAL AFTER HEARING THE REVENUE. 3. THE REVENUE S FIRST SUBSTANTIVE GROUND IN ITS APPEAL CHALLENGES THE LOWER APPELLATE ORDER DELETING SECTION 37(1) ADDITION OF RS. 176.28 LACS MADE ON ACCOUNT OF DISALLOWANCE CLAIM OF FINANCIAL LOSS UNDER THE SCHED ULE REPAIR AND MAINTENANCE EXPENSES . IT IS TO BE SEEN THAT THE CIT(A) S FINDINGS COMPRISE OF ASSESSING OFFICER S OBSERVATIONS AND ASSESSEE S SUBMISSIONS AS UNDER: - 4. GROUND NO.3 OF APPEAL IS REGARDING DISALLOWANCE OF FINANCIAL LOSS OF RS. 1 ,76,28,000 / - ACCOUNTED DURING THE YEAR AND INCURRED AS A I.T.A NO. 2860 & 3111 /AHD/20 11 A.Y. 2008 - 09 PAGE NO DAKSHIN GUJARAT VI J CO. LTD VS. DCIT 3 RESULT OF CERTAIN IRREGULARITIES. FINANCIAL LOSS OF RS.176.28 LAKH WAS CHARGED BY THE APPELLANT TO PROFIT AND LOSS ACCOUNT UNDER THE HEAD REPAIRS AND MAINTENANCE AFTER NOTICING CERTAIN IRREGULARITIES IN CERTAIN DIVISIONS OF THE APPELLANT COMPANY IN THE MAINTENANCE WORK CARRIED OUT DURING THE YEAR. THE CONCERNED IRREGULARITIES WERE DISCLOSED AT SR.NO.7 OF SCHEDULE - 33/ NOTES ON ACCOUNTS FORMING PART OF BALANCE SHEET FOR THE YEAR ENDED 31.3.2008. IT. WAS SUBMITTED THAT ACCOUNTS OF APPELLANT COMPANY WERE VERIFIED AND AUDITED BY THE STATUTORY AUDITORS. ALSO THE COMPTROLLER AND AUDITOR GENERAL OF INDIA (C&AG) GAVE HIS REPORT ON APPELLANT COMPANY'S ACCOUNTS. ASSESSING OFFICER OBSERVED THAT APPELLANT COMPANY HAD NOT INCU RRED THE EXPENSES ACTUALLY AND THE SAME WERE BOGUS AS WELL AS CLAIMED FRAUDULENTLY. AS PER ASSESSING OFFICER, EXPENSES, WHICH WERE ILLEGAL WERE NOT ALLOWABLE IN VIEW OF EXPLANATION BELOW SECTION 37(1), MOREOVER, AS PER ASSESSING OFFICER, APPELLANT COULD NO T SUBMIT DETAILS OF FINANCIAL LOSS OF RS.176.28 LAKH AS TO HOW AND FOR WHICH PURPOSE REPAIR AND MAINTENANCE PURPOSE MONEY WAS SPENT AND ITS ALIENABILITY. ASSESSING OFFICER DISALLOWED FINANCIAL LOSS OF RS. 176.28 LAKH. 4.1 IN APPEAL, SUBMISSIONS AS UNDER W ERE MADE: - GROUND NO.3: DISALLOWANCE ON ACCOUNT OF FINANCIAL LOSS. 1.0 THE L EARNED ASSESSING OFFICER HAS DISALLOWED THE FINANCIAL LOSS OF ' 1,76,28,000 / - ACCOUNTED DURING THE YEAR WHICH WAS INCURRED AS A RESULT OF CERTAIN IRREGULARITIES. THE LEARNED ASSESSI NG OFFICER OUGHT TO HAVE APPRECIATED THAT SUC H LOSS IS INCIDENTAL TO THE BUSI NESS OF THE APPELLANT AN D IS FULLY ALLOWABLE UNDER SECTI ON 37 OF THE I T ACT. 1.1 IT IS SUBMITTED THAT CERTAIN IRREGULARITIES WERE NOTICED IN CERTAIN DIVISIONS OF THE COMPANY IN THE MAINTENANCE WORK CARRIED OUT DURING THE YEAR UNDER CONSIDERATION. THE COMPANY HAS DISCLOSED THE IRREGULARITIES IN THE MAINTENANCE WORKS AT SR. NO.7 OF SCHEDULE - 33 NOTES ON ACCOUNTS FORMING PART OF THE BALANCE SHEET FOR THE YEAR ENDED 31 ST MARCH, 2008. THE RELEVANT EXTRACT OF THE BALANCE SHEET ARE ENCLOSED IN ANNEXURE - II. T HE FINANCIAL LOSS AMOUNTING TO 176.28 LACS IS CHARGED ON CONSERVATIVE BASIS TO PROFIT AND LOSS ACCOUNT UNDER REPAIRS AND MAINTENANCE. I.T.A NO. 2860 & 3111 /AHD/20 11 A.Y. 2008 - 09 PAGE NO DAKSHIN GUJARAT VI J CO. LTD VS. DCIT 4 IT IS FURTHER SUBMITTED THAT THE ACCOUNTS OF TH E COMPANY ARE VERIFIED AND AUDITED BY THE STAT UTORY AUDITORS OF THE COMPANY. FURTHER THE COMPTROLLER & AUDITOR GENERAL OF INDIA (C&AG) FINALLY GIVES ITS REP ORT ON THE ANNUAL ACCOUNTS. THE C&AG IS - THE FINAL AUTHORITY OF APPROVING, THE ACCOUNTS OF ALL GOVER NMENT COMPANIES. THE ABOVE IRREGULARITIES HAVE BEEN VERIFIED AT LENGTH BY THE BOTH THE AUDITORS OF THE COMPANY AND THE ACCOUNTING TREATMENT GIVEN BY THE COMPANY HAVE BEEN ACCEPTED AND CONFIRMED BY THE C&AG . HENC E THE ENTIRE EXPENDITURE OF '176,28 LACS IS F ULLY ALLOWABLE AS BUSINESS EXPENDITURE. 1.2 IT IS FURTHER SUBMITTED THAT ONCE THE COMPANY HAS 'IDENTIFIED THE LOSS SUFFE RED, IT 'HAS TO ACCOUNT FOR THE SAME. CONSIDERING THE NATURE' 'OF FRAUD COMMITTED, THE CHANCES OF RECOVERY ARE VERY REMOTE. FURTHER AS PER THE OPINION OF CRIMINAL LAWYER, IT IS SUBMITTED THAT THE CRIMINAL LAW REQUIRES THE INVESTING AGENCY TO SEIZE THE PROPERTY INVOLVED IN THE CRIME AS 'MUDDAMAL', WHICH IS PRODUCED BEFORE THE TRIAL COURT AS EVIDENCE. AT THE END OF THE TRIAL, THE COURT PASS ES ORDER FOR DISPOSAL OF THE MUDDAMAL. DEPENDING ON THE ORDER OF THE COURT THE MUDDAMAL CAN BE RESTORED TO THE OWNER. THAT, HOWEVER, IS A LONG - DRAWN PROCESS AND DEPENDS ON THE PROSECUTION PROVING THE CRIME AND ESTABLISHING THE IDENTITY OF THE PROPERTY AND THE OWNER. THIS APART, IT IS SUBMITTED THAT IN THE EVENT OF THE AMOUNT INVOLVED IN THE FRAUD IS RECOVERED SUBSEQUENTLY BY THE COMPANY, THEN OBVIOUSLY THE SAID AMOUNT WILL BE SHOWN ON THE CREDIT SIDE OF THE PROFIT & LOSS ACCOUNT AS INCOME WHICH WILL BE TAX ED ACCORDINGLY. THUS THIS CAN BE CONSIDERED A CASE SIMILAR TO THAT OF A BAD DEBT WRITTEN OFF IN THE BOOKS OF ACCOUNT WHICH IS ALLOWED IN THE YEAR IN WHICH THE SAME IS WRITTEN OFF. IF, HOWEVER, SUBSEQUENTLY SOME AMOUNT IS RECOVERED OUT OF THE SAID BAD DEBT ALREADY WRITTEN OFF THEN THE SAID AMOUNT IS TO BE TREATED AS INCOME. BUT THERE IS NO LAW TO DISALLOW THE BAD DEBT WRITTEN OFF MERELY ON THE GROUND THAT SOME AMOUNT MAY BE RECOVERED IN SUBSEQUENT YEARS. IN VIEW OF THE ABOVE, IT IS SUBMITTED THAT THE LOSS IN CURRED DURING THE YEAR AND ACCOUNTED DURING THE YEAR HAS TO BE ALLOWED DURING THE YEAR AS BUSINESS LOSS INCURRED IN THE ORDINARY COURSE. I.T.A NO. 2860 & 3111 /AHD/20 11 A.Y. 2008 - 09 PAGE NO DAKSHIN GUJARAT VI J CO. LTD VS. DCIT 5 1.3 IT IS ALSO SUBMITTED THAT ANY LOSS BECOMES ALLOWABLE IF IT SPRINGS DIRECTLY FROM AND IS INCIDENTAL TO THE BUSINESS OF THE ASSESSEE. REFERENCE IS INVITED TO THE SUPREME COURT JUDGEMENT IN CASE OF CIT VS. ABDULBHAI ABDULKADAR 41 ITR 545 (SC). FURTHER IF THERE IS A DIRECT AND PROXIMATE NEXUS BETWEEN THE BUSINESS OPERATION AND THE LOSS, OR IT IS INCIDENTAL, TO IT, THEN TH E LOSS IS DEDUCTIBLE SINCE WITHOUT THE BUSINESS OPERATION AND DOING ALL THAT IN INCIDENTAL TO IT, NO PROFIT CAN BE EARNED. REFERENCE COMMONWEALTH TRUST (INDIA) LTD. VS. CIT 242 ITR 593. REFERENCE IS ALSO INVITED TO THE CASE OF CURTIS VS. 3 G OLDFIELD LTD. 9 TC 319 WHEREIN IT HAS BEEN HELD THAT THE LOSS ARISING FROM NEGLIGENCE OR DISHONESTY OF EMPLOYEES WHO HAVE BEEN GIVEN SPECIFIED SPECIFIED DUTIES IN THE COURSE OF BUSINESS. 1.4 IN VIEW OF THE FACTS AND CIRCUMSTANCES, THE APPELLANT PRAYS THAT THE ARBITRARY DISALLOWANCES MADE UNDER THIS HEAD MAY BE DELETED.' 4.2. I HAVE CONSIDERED FACTS OF THE CASE AND SUBMISSIONS OF THE APPELLANT COMPANY. THE LOSS CLAIMED BY THE APPELLANT IS ON ACCOUNT OF IRREGULARITIES BY ITS EMPLOYEES ETC. AS FAR AS APPELLANT IS CONCERN ED, THE EXPENSES WERE INCURRED FOR ITS LEGAL BUSINESS AND NOT FOR ANY PURPOSE, WHICH WAS AN OFFENCE OR WHICH WAS PROHIBITED BY LAW. EXPLANATION BELOW SECTION 37(1) WOULD NOT BE APPLICABLE HERE. DETAILS OF LOSS WERE DISCLOSED IN SCHEDULE 33 TO NOTES ON ACCO UNTS, WHEREIN COMPLETE DETAILS OF IRREGULARITIES, ITS DIVISION WISE BREAK UP WITH NUMBER OF WORK ORDERS, TOTAL NUMBER O F BILLS INVOLVED, ITEMS SELECTED FOR VERIFICATION AND OUT OF THE SAME, ACTUAL WORK CARRIED OUT - WERE PROVIDED. IT CANNOT, THEREFORE BE SAI D THAT APPELLANT DID NOT SUBMIT DETAILS OF FINANCIAL LOSS OF RS. 17.6.28 LAKH. MOREOVER, COMPTROLLER & AUDITOR GENERAL OF INDIA DID NOT MAKE ADVERSE REMARKS REGARDING THE LOSS SO QUANTIFIED. IN VIEW OF THIS, LOSS OF RS.176.28 LAKH IS DIRECTED TO BE ALLOWED . IF, IN FUTURE, ANY AMOUNT IS RECOVERED FROM EMPLOYEES OR CONTRACTORS ETC., WHO COMMITTED THE IRREGULARITIES WHICH RESULTED IN LOSS AND AGAINST WHOM PROCEEDINGS ARE ALREADY INITIATED, SUCH RECOVERED AMOUNT IS TO BE TAXED AS APPELLANT S INCOME IN THE YEAR OF ITS RECEIPT. I.T.A NO. 2860 & 3111 /AHD/20 11 A.Y. 2008 - 09 PAGE NO DAKSHIN GUJARAT VI J CO. LTD VS. DCIT 6 4. THE REVENUE STRONGLY REITERATES ITS GROUNDS AND ASSAILS THE ABOVE EXTRACTED FINDINGS BY PLEADING THAT DETAILS OF EVIDENCE HAD NOT BEEN FILED IN THE COURSE OF ASSESSMENT. WE NOTICE THAT THE CIT(A) S FINDINGS UNDER CHALLENGE DULY TAK E INTO ACCOUNT DETAILS OF LOSS AS IN SCHEDULE 33 TO NOTES ON ACCOUNTS WITH ALL NECESSARY PARTICULARS OF IRREGULA R ITI ES IN QUESTION, DIVISION - WISE BREAK - UP, WORK ORDERS, BILLS INVOLVED, ITEMS SELECTED FOR VERIFICATION AND ACTUAL WORK CARRIED OUT. IT HAS CO ME ON RECORD THAT THIS ASSESSEE IS ALREADY SUBJECTED TO C & AG AUDIT. NEEDLESS TO SAY, THE CIT(A) HAS ALREADY CONCLUDED THAT IN CASE THERE IS ANY AMOUNT RECOVERED I N FUTURE FROM THE CONCERNED CONTRACTOR, IT SHALL BE TREATED AS ASSESSEE S INCOME IN THE YEA R OF RECEIPT. THE REVENUE FAILS TO FILE ANY EVIDENCE TO THE CONTRARY FOR REBUTTING THE ABOVE STATED FACTUAL FINDINGS . WE DO NOT SEE ANY REASON TO INTERFERE IN THE LOWER APPELLATE FINDING S. THIS REVENUE S GROUND IS REJECTED. 5. THE REVENUE S SECON D SUBSTANTIVE GROUND ASSAILS CORRECTNESS OF THE LOWER APPELLATE ORDER DELETING ADDITION OF RS. 124.8 LACS MADE ON ACCOUNT OF DISALLOWANCE OF EXTRA ORDINARY ITEMS BEING LOSSES DUE TO CYCLONE, FLOOD AND FIRE ETC MADE FOR WANT OF SUPPORTIVE EVIDENCE. WE FIND THAT THE CIT(A) S ORDER UNDER CHALLENGES DEALS WITH ASSESSING \ OFFICER S OBSERVATIONS AND ASSESSEE S ARGUMENTS AS UNDER: - 6. GROUND NO. 5 OF APPEAL IS REGARDING DISALLOWANCE OF EXTRA - ' 4 ORDINARY ITEMS AMOUNTING TO RS.1,24,28,000/ - . ASSESSING OFFICER DIS ALLOWED LOSS ON ACCOUNT OF FLOOD, CYCLONE, FIRE ETC. OF RS.124. 28 LAKH CLAIMED UNDER THE HEAD 'EXTRA - ORDINARY ITEMS' ON THE GROUND THAT APPELLANT HAD NOT SUBMITTED DETAILS SUCH AS NATURE OF LOSS, HOW IT WAS QUANTIFIED ETC . I.T.A NO. 2860 & 3111 /AHD/20 11 A.Y. 2008 - 09 PAGE NO DAKSHIN GUJARAT VI J CO. LTD VS. DCIT 7 6.1 IN APPEAL, SUBMISSIONS AS U NDER WERE MADE: - ''GROUND NO.5: DISALLOWANCE OUT OF EXTRA - ORDINARY ITEMS. THE LEARNED ASSESSING OFFICER HAS DISALLOWED EXTRA - ORDINARY ITEMS AMOUNTING TO RS.1,24,28,000/ - WITHOUT ANY COGENT REASONS WHATSOEVER. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LEARNED ASSESSING OFFICER HAD CALLED FOR THE INFORMATION RELATING TO EXTRA - ORDINARY ITEMS VIDE ITEM NO.29 OF THE NOTICE DATED 18 - 08 - 2010 ISSUED UNDER SECTION 14291) OF THE I T ACT. THE LEARNED ASSESSING OFFICER HAD ASKED TO GIVE DETAILS A ND JUSTIFICATION FOR ALL OWABILITY OF THE EXPENSES. IN RESPONSE TO THE SAME, COMPLETE DETAILS OF THE EXPENSES WERE FILED VIDE LETTER NO. DGVCL/GM(F&A)/10/15523 DATED 15 - 12 - 2010. IT WAS EXPLAINED AT THE TIME OF ASSESSMENT PROCEEDINGS THAT THIS EXPENDITURE HA S BEEN INCURRED ON ACCOUNT OF EXPENSES INCURRED FOR REHABILITATION AND REPAIRS WORKS UNDERTAKEN DUE TO FLOODS/CYCLONES AT VARIOUS DIVISIONS OF THE COMPANY. THE DIVISION - WIS E BREAKUP OF THE EXPENDITURE OF 124.28 LAKHS AS SUBMITTED BEFORE THE LEARNED ASSESSI NG OFFICER IS ENCLOSED HEREWITH. IT IS CLARIFIED THAT DUE TO UNFORESEEN CYCLONE - AND FLOOD IN F.Y 2007 - 08, THE DISTRIBUTION NETWORK IN AND AROUND PARTICULARLY SURAT AREA WAS AFFECTED ADVERSELY AND HENCE, THE COMPANY HAD TO INCUR EXPENDITURE TOWARDS RESTOR ATION OF LINE NETWORKS IN THE JURISDICTION OF THE COMPANY. THE REPAIRS ARE IN THE NATURE OF LINE MAINTENANCE NETWORK INVOLVING REPLACEMENT OF CONDUCTORS, REPAIRS CARRIED OUT TO TRANSFORMERS, REPLACEMENT OF CABLES, REPLACEMENT OF METER AND METER BOXES, ETC. IN THIS REGARD, AS AN ILLUSTRATION, IT IS SUBMITTED THAT OUT OF THE TOTAL EXPENDITURE OF '56.83 LAKHS INCURRED BY SURAT ( O & M ) DIVISION, THE MAJOR EXPENDITU RE RELATED TO THE FOLLOWING : - SR NO PARTICULARS OF ITEM AMT (') 1. REPLACEMENT OF ALL UM INIUM ALLOY CONDUCTORS OF DIFFERENT SIZES 14.37 LACS 2. REPLACEMENT OF PVC UNARMOURED CABLES OF DIFFERENT SIZES 2.53 LACS I.T.A NO. 2860 & 3111 /AHD/20 11 A.Y. 2008 - 09 PAGE NO DAKSHIN GUJARAT VI J CO. LTD VS. DCIT 8 3. REPLACEMENT OF RSJ GIRDER 116X100X11 MTR LONG 16.21 LACS 4. REPAIR CHARGES OF TRANSFORMERS OF DIFFERENT SIZES 12. 44 LACS 5 . OTHER EXPENDITURE ( RELATED TO REPLACEMENT OF GI STAY WIRES, METERS, METER BOXES, SHACKLE INSULATORS, KIT KAT FUSES, PIN INSULATORS, STAY CLAMPS FOR POLES, ETC ). 11.28 LACS IT IS FURTHER SUBMITTED THAT AT THE TIME OF NATURAL CALAMITY LIKE EARTHQUAKES, CYCLONE, FLOODS, FIRE ETC., THE COMPANY BEING A PUBLIC UTILITY UNDERTAKING HAS TO INCUR EXPENDITURE IMMEDIATELY FOR RESTORATION OF POWER. FOR THE PURPOSE THE LOSS INCURRED DUE TO THE' CALAMITY AS WELL AS THE EXPENDITURE ON REPAIRS E T C., IS ES TIMATED. ON THE BASIS OF ESTIMATE, THE COMPANY REPRESENT TO THE GOVERN MENT OF GUJARAT FOR SUBSIDY/GRANT AGAINST THE LOSS ON ACCOUNT OF FLOOD, CYCLONE, FIRE, ETC. IT CAN BE SEEN FROM THE ANNUAL ACCOUNTS THAT THE COMPANY HAD RECEIVED A GRANT/SUBSIDY FROM THE GOVERNMENT AMOUNTING TO '1789.94 LACS AGAINST LOSSES ON ACCOUNT OF FLOODS IN THE IMMEDIATELY PRECEDING YEAR IN WHICH HEAVY FLOODS WERE THERE. THE SAID SUBSIDY WAS SHOWN BY THE COMPANY AS OTHER INCOME IN SCHEDULE - 20 OF THE ANNUAL ACCOUNTS. THUS IT IS SUBM ITTED THAT THE SUBS IDY RECEIVED FOR LOSSES - IS SHO WN AS INCOME AND THE EXPENSES INCURRED FOR REPAIRS, RESTORATION WORK ARE SHOWN AS EXTRA - ORDINARY ITEMS. IN VIEW OF THE FACTS AND CIRCUMSTANCES, IT IS SUBMITTED THAT THE ENTIRE EXPENDITURE IS INCURRED OUT O F BUSINESS EXPEDIENCY IS OF REVENUE NATURE AND IS FULLY ALLOWABLE. IT IS ONLY THE ACCOUNTING TREATMENT THAT THE SAID EXPENDITURE IS SHOWN AS EXTRA - ORDINARY ITEMS. THE APPELLANT, THEREFORE, PRAYS THAT THE .DISALLOWANCES MADE ON THIS COUNT MAY BE DELETED. T HE APPELLANT ALSO INVITES YOUR HONOUR'S KIND ATTENTION TO THE FACT THAT THE SIMILAR ISSUE HAS BEEN DECIDED FAVOURABLY BY THE HON'BLE COMMISSI ONER (APPEALS) IN THE CASE OF GU JARAT ENERGY TRANSMISSION CORP. LTD., A SISTER CONCERN OF THE APPELLANT COMPANY, FO R THE ASST. I.T.A NO. 2860 & 3111 /AHD/20 11 A.Y. 2008 - 09 PAGE NO DAKSHIN GUJARAT VI J CO. LTD VS. DCIT 9 YEAR 2006 - 07 AND 2007 - 08. THE COPY OF THE CIT(A)'S ORDER PASSED FOR THE ASST, YEAR 2006 - 07 IS ENCLOSED IN ANNEXURE - III.' 6.2. I HAVE CONSIDERED FACTS OF THE CASE AND APPELLANT'S SUBMISSIONS. SIMILAR ISSUE WAS CONSIDERED BY MY LEARNED PREDECE SSOR CIT(A) - I, BARODA IN CASE OF GUJARAT ENERGY TRANSMISSION CORPORATION LTD., SISTER CONCERN OF THE APPELLANT IN CAB - I/333/08 - 09 THROUGH ORDER DATED 30.3.2010 FOR A.Y.2006 - 07 DECIDING THE ISSUE IN FAVOUR OF THE CONCERNED ASSESSEE. IN APPELLANT'S CASE ALSO , THE EXPENDITURE INCURRED WAS LESS THAN THE SUBSIDY RECEIVED FROM THE GOVERNMENT ON ACCOUNT OF FLOODS AND THE EXCESS WAS OFFERED FOR TAXATION. APPELLANT ALSO FILED DIVISION WISE DETAILS OF EXPENSES TOWARDS FLOOD RELATED DAMAGES THROUGH LETTER DATED 15.12. 2010 BEFORE THE ASSESSING OFFICER. FURTHER, BEING AN UNDERTAKING WHOLLY OWNED BY THE GOVERNMENT OF GUJARAT, APPELLANT'S ACCOUNTS WERE AUDITED BY THE AUDITORS APPOINTED BY C & A G. IN THIS SITUATION AND FOLLOWING MY LEARNED PREDECESSOR CIT(A) - I, BARODA'S OR DER IN CASE OF GUJARAT ENERGY TRANSMISSION CORPORATION LTD. IN A.Y.2006 - 07, DISALLOWANCE OF RS. 1, 24,28,000/ - IS CANCELLED. 6. WE HAVE CONSIDERED THE REVENUE S CONTENTIONS AND PERUSED THE RECORD. THE ASSESSING OFFICER STATED THE SOLE GROUND FOR REJECT ING THE CLAIM IN QUESTION TO LACK OF EVIDENCE. THE LOWER APPELLATE ORDER MENTIONS VERY CLEARLY THAT THE ASSESSEE HAD DULY FILED A LETTER DATED 15 - 12 - 2012 COMPRISING OF ALL NECESSARY DETAILS; DIVISION - WISE ON EXPENSES TOWARDS FLOOD RELATED DAMAGES. THE RE VENUE DOE S NOT PRODUCE ON RECORD COPY OF THE ABOVE STATED LETTER SO AS TO DISPEL THE ABOVE SAID SPECIFIC FINDINGS. THE CIT(A) FURTHER RELIES ON AN IDENTICAL ORDER DEALING WITH THE VERY CLAIM. THE SAME HAS ALSO GONE UN - REBUTTED IN COURSE OF HEARING BEFORE US. WE DECIDE THIS GROUND AS WELL AGAINST THE REVENUE. ITS APPEAL ITA 3111/AHD/2011 IS REJECTED. I.T.A NO. 2860 & 3111 /AHD/20 11 A.Y. 2008 - 09 PAGE NO DAKSHIN GUJARAT VI J CO. LTD VS. DCIT 10 7 . TO SUM UP, ASSESSEE S APPEAL 2860/AHD/2011 IS DISMISSED FOR NON - PROSECUTION AND REVENUE S APPEAL ITA 3111/AHD/2011 IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 18 - 09 - 2015 SD/ - SD/ - ( ANIL CHATURVEDI ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 18 /09 /2015 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,