Zuari Global Limited, (Formerly known as Zuari Industries Ltd.), Goa V. The Asst. Comm. Of Income-Tax. Circle-2, Margao., Margao

ITA 327/PAN/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93532 (ITAT-PANAJI)
• Duration Of Justice: 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-07-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 15-09-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B BALA KRISHNA LD
• Assessee Lawyers: ANANDU VITHAL NAYAK SR MANAGER
• Keywords: Condonation of delay
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI, HON'BLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 123/PNJ/2014 : (A.Y 1998 - 99) ZUARI GLOBAL LIMITED (EARLIER KNOWN AS ZUARI INDUSTRIES LTD.), JAIKISAN BHAWAN, ZUARINAGAR, GOA 403 726. PAN : AAACZ0306P ( APPELLANT) VS. ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 2, MARGAO, GOA. (RESPONDENT) ITA NO S . 127 , 229 & 230 /PNJ/2014 : (A.Y S 1998 - 99 , 2008 - 09 & 2009 - 10 ) ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 2, MARGAO, GOA. (APPELLANT) VS. ZUARI GLOBAL LIMITED (EARLIER KNOWN AS ZUARI INDUSTRIES LTD.), JAIKISAN BHAWAN, ZUARINAGAR, GOA 403 726. PAN : AAACZ0306P ( RESPONDENT) CO NOS. 37 & 38/PNJ/2014 ( IN ITA NOS.229 & 230/PNJ/2014) : (A.YS 2008 - 09 & 2009 - 10) ZUARI GLOBAL LIMITED (EARLIER KNOWN AS ZUARI INDUSTRIES LTD.), JAIKISAN BHAWAN, ZUARINAGAR, GOA 403 726. PAN : AAACZ0306P ( CROSS OBJECTOR) VS. ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 2, MARGAO, GOA. (RESPONDENT) ITA NOS. 325 TO 329/PNJ/2014 : (A.YS 1999 - 2000, 2000 - 01, 2002 - 03, 2006 - 07 & 2010 - 11) ZUARI GLOBAL LIMITED (EARLIER KNOWN AS ZUARI INDUSTRIES LTD.), JAIKISAN BHAWAN, ZUARINAGAR, GOA 403 726. PAN : AAACZ0306P ( APPELLANT) VS. ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 2, MARGAO, GOA. (RESPONDENT) 2 ITA NOS. 123, 127, 229, 230, 325 TO 329/PNJ/2014 & CO NOS. 37 & 38/PNJ/2014 ASSESSEE BY : ANANDU VITHAL NAYAK , SR. MANAGER REVENUE BY : B. BALAKRISHNA, LD. DR DATE OF HEARING : 0 7 /07/2015 DATE OF PRONOUNCEMENT : 0 7 /07/2015 O R D E R PER BENCH : ITA NOS. 123 & 127/PNJ/2014 : - 1. THESE ARE CROSS - APPEAL S FILED BY THE ASSESSEE AND REVENUE RESPECTIVELY AGAINST THE ORDER OF THE LD. CIT(A), PANAJI IN ITA NO. 154/MRG/2012 - 13 DT. 23.12.2013 FOR THE A.Y 1998 - 99. 2. SHRI ANANDU VITHAL NAYAK , SR. MANAGER (TAXATION) OF THE ASSESSEE - COMPANY REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI B. BALAKRISHNA, LD. DR REPRESENTED ON BEHALF OF THE REVENUE. THE ASSESSEE HAD MOVED AN ADJOURNMENT. ON 6.7.2015 , ONE LETTER OF ADJOURNMENT DT. 2.7.2015 WAS RE CEIVED MENTIONING THAT THE COUNSEL IS UNABLE TO TRAVEL TO GOA AS HE IS HELD UP BEFORE THE HON'BLE NAINITAL HIGH COURT AT UTTARAKHAND. ON 7.7.2015 , ANOTHER LETTER DT. 6.7.2015 HAS BEEN RECEIVED FROM THE COUNSEL WHEREIN IT IS MENTIONED THAT THE COUNSELS UN CLE LIVING IN AMRITSAR HAS EXPIRED. IN THE LETTER OF 6.7.2015, THE COUNSEL ALSO MENTIONED THAT HE WOULD NOT BE APPEARING IN HON'BLE UTTARAKHAND HIGH COURT ALSO ON ACCOUNT OF THE DEMISE OF HIS UNCLE. AS THESE APPEALS HAVE BEEN POSTED REPEATEDLY RIGHT FROM JULY, 2014 AND CONTINUOUSLY ON ONE PRETEXT OR OTHER, ADJOURNMENTS ARE BEING SOUGHT, CONSEQUENTLY, THE ADJOURNMENT APPLICATION FILED BY THE ASSESSEE STANDS REJECTED AND THE APPEALS ARE BEING DISPOSED OFF. 3 ITA NOS. 123, 127, 229, 230, 325 TO 329/PNJ/2014 & CO NOS. 37 & 38/PNJ/2014 3. ITA NO. 123/PNJ/2014 : - IN TH IS APPEAL THE ASSESSEE HAS CHALLENGED THE ACTION OF LD. CIT(A) IN UPHOLDING THE ADDITION OF RS. 92,43,000/ - BEING SALES TAX REFUND DUE TO THIRD PARTIES WHICH HAVE ALSO BEEN PAID TO THIRD PARTIES BUT WHICH HAS BEEN TREATED AS INCOME IN THE HANDS OF THE ASSESSEE BY APPLYI NG THE PROVISIONS OF SEC. 41 OF THE ACT. IT WAS SUBMITTED BY THE LD. AR THAT THE SAID AMOUNT OF RS. 92.43 LACS WAS SALES TAX REFUND IN RESPECT OF TEXMACO, A COMPANY WHICH HAD BEEN TAKEN OVER BY THE ASSESSEE - COMPANY. IT WAS THE SUBMISSION THAT THE SAID RE FUND RELATED TO THE A.YS 1985 - 86 TO 1992 - 93. THE SAID TEXMACO CEMENT PLANT BECAME PART OF THE ASSESSEE - COMPANY WITH ALL ITS ASSETS AND LIABILITIES ON 7.2.1995. THE SAID AMOUNT OF RS. 92.43 LACS HAD ALSO BEEN CREDITED TO THE ACCOUNT OF TEXMACO ON 26.2.199 8. IT WAS THE SUBMISSION THAT THE SAID AMOUNT WAS NOT THE INCOME OF THE ASSESSEE INSOFAR AS IT RELATED TO TEXMACO AND THE AMOUNT HAD ALSO BEEN PAID OVER TO TEXMACO. THE LD. AR DREW OUR ATTENTION TO PG. 127 AND 134 OF THE PAPER BOOK TO SHOW THAT THE AMOUN T HAD BEEN CREDITED TO THE ACCOUNT OF TEXMACO. 4. IN REPLY, THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF LD. CIT(A). HE DREW OUR ATTENTION TO PG. 10 & 11 OF THE ORDER OF THE LD. CIT(A). IT WAS THE SUBMISSION THAT THE ASSESSEE HAD RECEIVED THE AMOUNT A ND CONSEQUENTLY THE SAME WAS LIABLE TO BE TAXED IN THE HANDS OF THE ASSESSEE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMITTEDLY, THE ASSESSEE HAS RECEIVED SALES TAX REFUND IN RESPECT OF TEXMACO CEMENT PLANT WHICH HAD BEEN TAKEN OVER BY THE ASSESSEE IN 1995. THE REFUND RELATES TO SALES TAX EXCESSIVELY PAID BY TEXMACO FOR THE YEARS 1985 - 86 TO 1992 - 93. HOWEVER, THE LD. CIT(A) FAILED TO APPRECIATE THAT THE ASSESSEE HAS CREDITED THE ACCOUNT OF TEXMACO WITH THE SALES TAX REFUND AS IS EVIDENCED I N THE PAPER BOOK ON 26.2.1998 I.E. DURING THE RELEVANT ASSESSMENT YEAR. CONSEQUENTLY, EVEN ASSUMING THAT THE SAID AMOUNT IS 4 ITA NOS. 123, 127, 229, 230, 325 TO 329/PNJ/2014 & CO NOS. 37 & 38/PNJ/2014 TAKEN AS INCOME OF THE ASSESSEE DURING THE RELEVANT ASSESSMENT YEAR, IN VIEW OF THE FACT THAT THE ASSESSEE HAS TRANSFERRED THE AMOU NT TO TEXMACO , AS IT RELATES TO TEXMACO FOR A PERIOD WHICH WAS BEFORE THE DATE OF TAKING OVER BY THE ASSESSEE - COMPANY, THE SAME WOULD HAVE TO BE NETTED OFF AND THERE WOULD BE NO INCOME ON THIS COUNT IN THE HANDS OF THE ASSESSEE. IN THE CIRCUMSTANCES, WE A RE OF THE VIEW THAT THE SAID AMOUNT OF RS. 92.43 LACS CANNOT BE TREATED AS INCOME OF THE ASSESSEE INSOFAR AS THE CONDITIONS PRESCRIBED U/S 41(1) ARE NOT APPLICABLE IN THE CASE OF THE SAID REFUND I.E. THE ASSESSEE HAS NOT CLAIMED DEDUCTION OF THE SAID SALES TAX AND CONSEQUENTLY, THE REFUND OF THE SAME IN THE HANDS OF THE ASSESSEE CANNOT BE TAXED BY INVOKING THE PROVISIONS OF SEC. 41(1). FURTHER, THE AMOUNT HAVING BEEN TRANSFERRED BY THE ASSESSEE TO TEXMACO, THE SAME IS IN NO WAY EVEN REAL INCOME OF THE ASSE SSEE. IN THE CIRCUMSTANCES, THE ADDITION AS MADE BY THE AO AND AS CONFIRMED BY THE LD. CIT(A) STANDS DELETED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. 6. ITA NO. 127/PNJ/2014 : - IN TH IS APPEAL THE REVENUE HAS CHALLENGED THE ACTION OF LD. CIT(A) IN DELETING THE LEVY OF INTEREST U/S 234D OF THE ACT. IT WAS SUBMITTED BY THE LD. DR THAT THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF RELIANCE ENERGY LTD. REPORTED IN 358 ITR 371 WAS NOT APPLICABLE TO THE ASSESSEES CASE. 7. IN REPLY, THE LD. AR VEHEMENTLY SUPPORTED THE ORDER OF LD. CIT(A). IT WAS THE SUBMISSION THAT THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF RELIANCE ENERGY LTD. REFERRED TO SUPRA WAS SQUARELY APPLICABLE. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMITTEDLY, IN THE PRESENT CASE THE ASSESSMENT YEAR RELATES TO 1998 - 99. THE PROVISIONS OF SEC. 234D WAS INSERTED W.E.F. 1.6.2003. THE ORIGINAL ASSESSMENT IN THE ASSESSEES CASE WAS COMPLETED ON 5 ITA NOS. 123, 127, 229, 230, 325 TO 329/PNJ/2014 & CO NOS. 37 & 38/PNJ/2014 29.3.2001 I.E. BEFORE THE INTRODUCTION OF SEC. 234D. CONSEQU ENTLY, WE ARE OF THE VIEW THAT THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF RELIANCE ENERGY LTD. REFERRED TO SUPRA IS SQUARELY APPLICABLE AND THE LD. CIT(A) WAS RIGHT IN DELETING THE LEVY OF INTEREST U/S 234D OF THE ACT. CONSEQUENTLY, WE FIND NO REASON TO INTERFERE WITH THE FINDING OF THE LD. CIT(A) ON THIS ISSUE. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ITA NOS. 325 TO 32 9 /PNJ/2014 , ITA NOS. 229 & 230/PNJ/2014, & C.O NOS. 37 & 38/PNJ/2014 - 9. ITA NOS. 325 TO 327/PNJ/2014, 329/PNJ/2014 ARE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A), PANAJI IN ITA NOS. 47, 48, 49, 95, 96, 97/MRG/13 - 14 DT. 21.4.2014 FOR THE A.YS 1999 - 00, 2000 - 01, 2002 - 03, 2010 - 11 RESPECTIVELY. ITA NO. 328/PNJ/2014 IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A), PANAJI IN ITA NO. 272/MRG/11 - 12 DT. 21.4.2014 FOR THE A.Y 2006 - 07. ITA NOS. 229 & 230/PNJ/2014 ARE APPEALS FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A), PANAJI IN ITA NOS. 47, 48, 49, 95, 96, 97/MRG/13 - 1 4 DT. 21.4.2014 FOR THE A.YS. 2008 - 09 & 2009 - 10 RESPECTIVELY AND C.O NOS. 37 & 38/PNJ/2014 ARE CROSS OBJECTIONS FILED BY THE ASSESSEE AGAINST THE APPEALS OF REVENUE BEING ITA NOS. 229 & 230/PNJ/2014 . 10. THE APPEALS OF THE ASSESSEE ARE DELAYED BY 86 DAYS. THE ASSESSEE HAS FILED A PETITION FOR CONDONATION OF DELAY ALONGWITH THE NECESSARY AFFIDAVIT. IT HAS BEEN SUBMITTED THAT AS THE ASSESSEE WAS UNDER THE BELIEF THAT AS THE ASSESSEE HAD WITHDRAWN SUBSTANTIAL GROUNDS BEFORE THE LD. CIT(A) SUBJECT TO THE CONDITION THAT THE AO WOULD DROP THE PENALTY PROCEEDINGS , THE ASSESSEE WAS IN CONSULTATION WITH THE AO IN RESPECT OF DROPPING OF THE PENALTY PROCEEDINGS. AS THE AO HAD NOT DROPPED THE PENALTY PROCEEDINGS, THE ASSESSEE AFTER CONSULTATION WITH ITS COUNSEL 6 ITA NOS. 123, 127, 229, 230, 325 TO 329/PNJ/2014 & CO NOS. 37 & 38/PNJ/2014 A ND RECEIVING PROFESSIONAL GUIDANCE HAS FILED THE APPEALS. IT WAS THE SUBMISSION THAT THE DELAY IN FILING THE APPEALS MAY BE CONDONED. 11. THE LD. DR DID NOT RAISE ANY SERIOUS OBJECTIONS TO THE CONDONATION OF THE DELAY. 12. WE HAVE CONSIDERED THE AFFIDAV IT AND THE SUBMISSIONS. AS WE FIND THAT THE REASONS GIVEN FOR THE DELAY IN FILING OF THE APPEALS ARE REASONABLE, THE DELAY IN FILING OF THE APPEALS BY THE ASSESSEE STANDS CONDONED AND THE APPEALS ARE BEING DISPOSED OFF ON MERITS. 13. ITA NO. 325/PNJ/201 4 - IN THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE DISALLOWANCE OF EXPENDITURE U/S 14A IN GROUND NO. 1 AND DISALLOWANCE OF AN AD HOC AMOUNT OF RS. 10 LACS U/S 40A(2)(B) IN GROUND NO. 2. AT THE TIME OF THE HEARING, THE LD. DR SUBMITTED THAT THE ASSESSEE HAD WITHDRAWN HIS GROUNDS EXCEPT GROUNDS IN RESPECT OF DISALLOWANCE U/S 14A AND THE DIMINUTION IN THE VALUE OF GOVERNMENT OF INDIA FERTILIZER BOND LOSS. IT WAS THE SUBMISSION THAT CONSEQUENTLY THE APPEAL OF THE ASSESSEE WAS LIABLE TO BE DISMISSED. IT WA S THE SUBMISSION THAT IN RESPECT OF DISALLOWANCE U/S 14A ALSO THE ISSUE HAS BEEN SENT TO THE AO WITH THE DIRECTION TO VERIFY THE WORKING PROVIDED BY THE ASSESSEE. IN RESPECT OF THE GOVERNMENT OF INDIA FERTILIZER BOND LOSS, THE LD. CIT(A) HAS DIRECTED THE AO TO ALLOW THE REAL LOSS IN THE YEAR IN WHICH IT IS INCURRED I.E. ON THE REDEMPTION OF THE FERTILIZER BONDS. 14. IN REPLY, THE LD. AR SUBMITTED THAT AFTER THE ORDER OF THE LD. CIT( A) THERE HAVE BEEN FURTHER DEVELOPMENTS IN RESPECT OF SEC. 14A. IT WAS THE SUBMISSION THAT HE HAD NO OBJECTION IF THE ISSUE IN RESPECT OF DISALLOWANCE U/S 14A WAS RESTORED TO THE FILE OF THE AO FOR RE - ADJUDICATION AFTER TAKING INTO CONSIDERATION THE DECI SIONS 7 ITA NOS. 123, 127, 229, 230, 325 TO 329/PNJ/2014 & CO NOS. 37 & 38/PNJ/2014 OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF SIVAM MOTORS PVT. LTD. IN ITA NO. 88 OF 2014 DT. 5.5.2014, HON'BLE GUJARAT HIGH COURT IN THE CASE OF CORRTECH ENERGY PVT. LTD. IN TAX APPEAL NO. 239 OF 2014 DT. 24.3.2014, HON'BLE BOMBAY HIGH COURT I N THE CASE OF DELITE ENTERPRISES IN TAX APPEAL NO. 110 OF 2009 DT. 26.2.2009 AND HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF WINSOME TEXTILES INDUSTRIES LTD. REPORTED IN 319 ITR 204 AS ALSO THE DECISION OF THE KOLKATA BENCH OF THIS TRIBUNAL IN THE C ASE OF REI AGRO LTD. REPORTED IN 144 ITD 141. 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERUSAL OF THE ORDER OF THE LD. CIT(A) CLEARLY SHOWS THAT THE ASSESSEE HAS MADE CONDITIONAL WITHDRAWAL OF THE ASSESSEES GROUNDS. HOWEVER, IF THE GROUNDS BEF ORE THE LD. CIT(A) ARE ALSO CONSIDERED, THEN, IT WOULD BECOME EVIDENT THAT ALL THE GROUNDS BEFORE THE LD. CIT(A) HAVE NOT BEEN WITHDRAWN. THEREFORE, THE CLAIM OF THE ASSESSEE THAT THERE IS A CONDITIONAL WITHDRAWAL OF THE GROUNDS IN ASSESSEES APPEAL BEFOR E THE LD. CIT(A) CANNOT BE ACCEPTED. ADMITTEDLY, BEFORE THE LD. CIT(A), THE ASSESSEE, AFTER HAVING WITHDRAWN SUBSTANTIAL NUMBER OF GROUNDS HAS PREFERRED TO PRESS ONLY TWO ISSUES; ONE BEING AGAINST DISALLOWANCE U/S 14A AND THE SECOND IN RESPECT OF DIMINUTI ON IN THE VALUE OF THE GOVERNMENT OF INDIA FERTILIZER BONDS. ADMITTEDLY, THE ASSESSEE HAS ALSO PROVIDED A CALCULATION OF THE DISALLOWANCE LIABLE TO BE MADE U/S 14A BEFORE THE LD. CIT(A) AND THE LD. CIT(A) HAS DIRECTED THE AO TO VERIFY THE COMPUTATION MADE BY THE ASSESSEE. WE FIND THAT EVEN THE COMPUTATION AS MADE BY THE ASSESSEE IS ERRONEOUS. CONSEQUENTLY, THE ISSUE OF SEC. 14A IS RESTORED TO THE FILE OF THE AO FOR RE - ADJUDICATION. ALL THE ASPECTS IN RESPECT OF THE DISALLOWANCE U/S 14A ARE LEFT OPEN. TH E ASSESSEE SHALL BE AT LIBERTY TO RAISE ALL SUCH DEFENCES AGAINST THE DISALLOWANCE U/S 14A WHICH SHALL BE ADJUDICATED BY THE AO. CONSEQUENTLY, GROUND NO. 1 OF THE ASSESSEES APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSE. 8 ITA NOS. 123, 127, 229, 230, 325 TO 329/PNJ/2014 & CO NOS. 37 & 38/PNJ/2014 16. IN RESPECT OF GROUND NO. 2, A S THE SAID GROUND HAS NOT BEEN PRESSED BEFORE THE LD. CIT(A), THE SAME CANNOT BE RAISED BEFORE THE TRIBUNAL. CONSEQUENTLY, THE SAID GROUND STANDS DISMISSED. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE BEING ITA NO. 325/PNJ/2014 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 18. ITA NO. 32 6 /PNJ/2014 : - IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE DISALLOWANCE OF EXPENDITURE U/S 14A. IT IS FAIRLY AGREED BY BOTH THE SIDES THAT IN LINE WITH THE DECISION IN THE ASSESSEES OWN CASE IN ITA NO. 325/PNJ/2014 FOR THE A.Y 1999 - 2000, THE SAME FINDING WOULD APPLY. AS WE HAVE ALREADY RESTORED THE ISSUE OF DISALLOWANCE U/S 14A IN ITA NO. 325/PNJ/2014 TO THE FILE OF THE AO FOR RE - ADJUDICATION, ON SIMILAR LINE S THE ISSUE IN THIS CASE IS ALSO RESTORED TO THE FILE OF THE AO FOR RE - ADJUDICATION. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 19. ITA NO. 327/PNJ/2014 : - IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE DISALLOWANCE OF EXPENDITURE U/S 14A. IT IS FAIRLY AGREED BY BOT H THE SIDES THAT IN LINE WITH THE DECISION IN THE ASSESSEES OWN CASE IN ITA NO. 325/PNJ/2014 FOR THE A.Y 1999 - 2000, THE SAME FINDING WOULD APPLY. AS WE HAVE ALREADY RESTORED THE ISSUE OF DISALLOWANCE U/S 14A IN ITA NO. 325/PNJ/2014 TO THE FILE OF THE AO FOR RE - ADJUDICATION, ON SIMILAR LINES THE ISSUE IN THIS CASE IS ALSO RESTORED TO THE FILE OF THE AO FOR RE - ADJUDICATION. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 20. ITA NO. 32 8 /PNJ/2014 : - IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE ISSUE OF RE - OPENING AS ALSO THE ADDITION REPRESENTING MAT CREDIT ENTITLEMENT FOR COMPUTING THE BOOK PROFITS U/S 115JB. AS IT IS NOTICED THAT THE ASSESSEE HAS 9 ITA NOS. 123, 127, 229, 230, 325 TO 329/PNJ/2014 & CO NOS. 37 & 38/PNJ/2014 WITHDRAWN THESE GROUNDS BEFORE THE LD. CIT(A) , WE ARE OF THE VIEW THAT THE ASSESSEE CANNOT BE PERMITTED TO RAISE THESE GROUND BEFORE THE TRIBUNAL. CONSEQUENTLY, THE SAID GROUNDS STAND DISMISSED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. 21. ITA NO. 32 9 /PNJ/2014 : - IN THIS APPEAL TH E ASSESSEE HAS CHALLENGED THE DISALLOWANCE U/S 14A IN GROUND NO. 1, DIMINUTION IN THE VALUE OF FERTILIZER BONDS IN GROUND NO. 2, DISALLOWANCE OF INTEREST EXPENDITURE IN GROUND NO. 3, DISALLOWANCE OF EXPENSES INCURRED TOWARDS FEASIBILITY STUDY REPORT IN GRO UND NO. 4, DISALLOWANCE OF SETTING OFF THE LOSS ARISING ON THE SALE OF PREFERENCE SHARES OF ZMPL IN GROUND NO. 5 AND GRANTING OF SHORT TDS CREDIT IN GROUND NO. 6. 22. IN RESPECT OF GROUND NO. 1, OUR FINDINGS IN ITA NO. 325/PNJ/2014 WOULD BE SQUARELY APPLI CABLE AND CONSEQUENTLY, THE ISSUE OF DISALLOWANCE U/S 14A IS RESTORED TO THE FILE OF THE AO FOR RE - ADJUDICATION. 23. GROUND NOS. 2 TO 5 HAVE ALREADY BEEN WITHDRAWN BEFORE THE LD. CIT(A). CONSEQUENTLY, THE SAME CANNOT BE RAISED BEFORE THE TRIBUNAL. CONSE QUENTLY, THE SAME STANDS DISMISSED. 24. GROUND NO. 6 REGARDING THE ISSUE OF SHORT TDS CREDIT IS RESTORED TO THE FILE OF THE AO. LIBERTY IS GIVEN TO THE ASSESSEE TO PRODUCE EVIDENCE OF TDS WHICH IS TO BE VERIFIED BY THE AO AND IF FOUND CORRECT, CREDIT HAS TO BE GRANTED. 25. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 10 ITA NOS. 123, 127, 229, 230, 325 TO 329/PNJ/2014 & CO NOS. 37 & 38/PNJ/2014 2 6 . ITA NO. 229/PNJ/2014 : - THIS IS AN APPEAL FILED BY THE REVENUE WHEREIN THE REVENUE HAS CHALLENGED THE ACTION OF THE LD. CIT(A) DIRECTING THE AO TO ALLOW REAL LOSS ON THE SALE OF FERTILIZER COMPANIES GOVERNMENT OF INDIA SPECIAL BONDS ON THE GROUND THAT THE LOSS ON SALE OF THE BONDS WAS A CAPITAL LOSS . 2 7 . IT WAS SUBMITTED BY THE LD. DR THAT THE FERTILIZER COMPANIES GOVERNMENT OF INDIA SPECIAL BONDS WERE INVESTMENTS IN THE HANDS OF THE ASSESSEE AND LOSS INCURRED BY THE ASSESSEE ON THE SALE OF THE SAME WAS LIABLE TO BE TREATED AS CAPITAL LOSS AND NOT AS A BUS INESS LOSS. 2 8 . IN REPLY, THE LD. AR SUBMITTED THAT THE FERTILIZER BONDS ARE CURRENT ASSETS. THE SAID FERTILIZER BONDS WERE GIVEN BY THE GOVERNMENT IN LIEU OF THE SUBSIDY THAT WAS RECEIVABLE BY THE ASSESSEE - COMPANY. IT WAS THE SUBMISSION THAT THE FERT ILIZER BONDS WERE NOT PURCHASED BY THE ASSESSEE AS INVESTMENT BUT WERE, IN FACT, THRUST ON THE ASSESSEE. 2 9 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMITTEDLY, THESE BONDS ARE NOT SHOWN AS INVESTMENTS BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS. THESE ARE SHOWN AS CURRENT ASSETS. THESE BONDS HAVE BEEN RECEIVED BY THE ASSESSEE IN THE COURSE OF ITS BUSINESS AND CONSEQUENTLY WE ARE OF THE VIEW THAT THE FINDING OF THE LD. CIT(A) DIRECTING THE AO TO ALLOW THE REAL LOSS IS ON THE RIGHT FOOTING AND DOES NOT CALL FOR ANY INTERFERENCE. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. 30 . C.O NO. 37/PNJ/2014 : - IN THIS CROSS OBJECTION THE ASSESSEE HAS CHALLENGED THE ISSUE OF RE - OPENING IN GROUND NO. 1, THE DISALLOWANCE U/S 14A IN GROUND NO. 2, THE DISALLOWANCE OF THE DIMINUTION IN THE VALUE OF THE FERTILIZER BONDS IN GROUND NO. 3, THE DISALLOWANCE OF EXPENDITURE ON PLANT REVAMP STUDY IN GROUND NO. 4 AND GRANTING OF SHORT TDS CREDIT IN GROUND NO. 5. 11 ITA NOS. 123, 127, 229, 230, 325 TO 329/PNJ/2014 & CO NOS. 37 & 38/PNJ/2014 3 1 . AS THE ASSESSEE ITSELF HAS WITHDRAWN THE ISS UES IN GROUND NOS. 1 & 4 FOR THE RELEVANT ASSESSMENT YEAR BEFORE THE LD. CIT(A), THE SAME CANNOT SURVIVE BEFORE THE TRIBUNAL. CONSEQUENTLY, GROUND NOS. 1 IN RESPECT OF RE - OPENING AND GROUND NO. 4 IN RESPECT OF DISALLOWANCE OF EXPENDITURE ON PLANT REVAMP S TUDY STANDS DISMISSED. 3 2 . IN RESPECT OF GROUND NO. 2 AGAINST DISALLOWANCE U/S 14A, OUR FINDINGS IN ITA NO. 325/PNJ/2014 ARE SQUARELY APPLICABLE AND THE SAID ISSUE IS RESTORED TO THE FILE OF THE AO FOR RE - ADJUDICATION. 3 3 . IN RESPECT OF GROUND NO. 3 AG AINST DISALLOWANCE OF DIMINUTION IN THE VALUE OF THE FERTILIZER BONDS, AS WE HAVE ALREADY UPHELD THE FINDINGS OF THE LD. CIT(A) ON THIS ISSUE, THIS GROUND NO MORE SURVIVES. 3 4 . IN RESPECT OF GROUND NO. 5 AGAINST GRANTING OF SHORT TDS CREDIT, THIS ISSUE IS RESTORED TO THE FILE OF THE AO ON SIMILAR LINES AS IN GROUND NO. 6 IN ITA NO. 329/PNJ/2014. 3 5 . IN THE RESULT, THE CROSS OBJECTION FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 3 6 . ITA NO. 2 30 /PNJ/2014 : - IN THIS APPEAL THE REVENUE HAS CHALLENGED THE ACTION OF THE LD. CIT(A) IN DIRECTING THE AO TO ALLOW REAL LOSS ON THE SALE OF THE FERTILIZER COMPANIES GOVERNMENT OF INDIA SPECIAL BONDS. THIS GROUND IS ID ENTICAL TO THE GROUND IN THE REVENUES APPEAL IN ITA NO. 229/PNJ/2014 . AS WE HAVE ALREADY DISMISSED THE REVENUES APPEAL IN ITA NO. 229/PNJ/2014, ON SIMILAR LINES THE APPEAL OF THE REVENUE IN ITA NO. 230/PNJ/2014 STANDS DISMISSED. 12 ITA NOS. 123, 127, 229, 230, 325 TO 329/PNJ/2014 & CO NOS. 37 & 38/PNJ/2014 3 7 . C.O NO. 3 8 /PNJ/2014 : - AS T HE GROUNDS IN THIS CROSS OBJECTION FILED BY THE ASSESSEE ARE IDENTICAL TO THE GROUNDS IN C.O NO. 37/PNJ/2014 OUR FINDINGS IN RESPECT OF C.O NO. 37/PNJ/2014 WOULD APPLY TO THESE GROUNDS ALSO. CONSEQUENTLY, GROUND NO. 1 AGAINST RE - OPENING STANDS D ISMISSED, GROUND NO. 2 AGAINST DISALLOWANCE U/S 14A STANDS RESTORED TO THE FILE OF THE AO FOR RE - ADJUDICATION, GROUND NO. 3 AGAINST DISALLOWANCE OF DIMINUTION IN THE VALUE OF THE FERTILIZER BONDS BECOMES INFRUCTUOUS IN VIEW OF OUR UPHOLDING THE FINDING OF THE LD. CIT(A), GROUND NO. 4 AGAINST DISALLOWANCE OF INTEREST EXPENDITURE STANDS DISMISSED AND GROUND NO. 5 AGAINST GRANTING OF SHORT TDS CREDIT STANDS RESTORED TO THE FILE OF THE AO FOR RE - ADJUDICATION. IN THE RESULT, THE CROSS OBJECTION FILED BY THE ASS ESSEE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 38. IN THE RESULT, ITA NOS. 325 TO 327 & 329 /PNJ/2014 (ASSESSEES APPEALS) STAND PARTLY ALLOWED FOR STATISTICAL PURPOSES, ITA NO. 328/PNJ/2014 (ASSESSEES APPEAL) STANDS DISMISSED, ITA NOS. 229 & 230/P NJ/2014 (REVENUES APPEALS) STAND DISMISSED, ITA NO. 123/PNJ/2014 (ASSESSEES APPEAL) STANDS ALLOWED, ITA NO. 127/PNJ/2014 (REVENUES APPEAL) STANDS DISMISSED AND CO NOS. 37 & 38/PNJ/2014 (ASSESSEES CROSS OBJECTIONS) STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 0 7 /07/2015. S D / - (N.S. SAINI) ACCOUNTANT MEMBER S D / - ( GEORGE MATHAN ) JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 0 7 /07/ 201 5 *SSL* 13 ITA NOS. 123, 127, 229, 230, 325 TO 329/PNJ/2014 & CO NOS. 37 & 38/PNJ/2014 COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT(A) CONCERNED (4) CIT CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER , 14 ITA NOS. 123, 127, 229, 230, 325 TO 329/PNJ/2014 & CO NOS. 37 & 38/PNJ/2014 DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ORDER ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 0 7 /07/2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 0 8 /07/2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 0 8 /07/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 0 8 /07/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 0 8 /07/2015 SR.PS 6. DATE OF PRONOUNCEMENT 0 7 /07/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 0 8 /07/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER