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

ITA 328/PAN/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7505 (ITAT-PANAJI)
• Duration Of Justice: 2 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-03-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 15-09-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAVIRAJ Y V LD
• Keywords: Capital asset; Gift; Depreciation; Transfer pricing; Business expenditure; Bonafide belief; Earning of tax free income; Period of limitation; Proportionate interest; Speculation loss; Revenue expenditure; Capital expenditure
• Section: 14A; 115JB; 37(1); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P.K.BANSAL, HON'BLE ACCOUNTANT MEMBER SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 328 /PN J /201 4 (ASST. YEAR : 20 06 07 ) M/S ZUARI GLOBAL LIMITED (FORMERLY KNOWN A S ZUARI INDUSTRIES LIMITED) JAI KISSAN BHAWAN ZUARINAGAR, GOA V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2, BLESSING PIONEER COMPLEX, OPP . DIST & SESSION COURT, MARGAO, GOA PAN NO. AAACZ 0306 P (APPELLANT) (RESPONDENT) CO NO. 37 & 38 /PNJ /2014 (ARISING OUT OF ITA.NO. 229 & 230/PNJ/2014) M/S ZUARI GLOBAL LIMITED (FORMERLY KNOWN AS ZUARI INDUSTRIES LIMITED) JAI KISSAN BHAWAN ZUARINAGAR, GOA V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 2, MARGAO, GOA PAN NO. AAACZ 0306 P (APPELLANT) (RESPONDENT) ITA NO. 329/PNJ/2014 (ASST. YEAR: 2010 11) M/S ZUARI GLOBAL LIMITED (FORMERLY KNOWN AS ZUARI INDUSTRIES LIMITED) JAI KISSAN BHAWAN ZUARINAGAR, GOA V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 2, BLESSING PIONEER COMPLEX, OPP. DIST & SESSION COURT, MARGAO, GOA PAN NO. AAACZ 0306 P (APPELLANT) (RESPONDENT) 2 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. ITA NO. 91 /P A N/201 6 (ASST . YEAR : 2011 12 ) M/S ZUARI GLOBAL LIMITED (FORMERLY KNOWN A S ZUARI INDUSTRIES LIMITED) JAI KISSAN BHAWAN ZUARINAGAR, GOA V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1 , MARGAO, GOA PAN NO. AAACZ 0306 P (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MUKUND BAKSHI CA DEPARTMENT BY : SHRI RAVIRAJ Y.V . LD. DR DATE OF HEARING : 22/03/2017 . DATE OF PRONOUNCEMENT : 31/03/2017 O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER 1 . ITA.NO . 328/PNJ/2014 IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) PANAJI IN APPEAL NO.272/MRG/11 12 DATED. 21.04.2014 FOR THE ASSESSMENT YEAR 2006 - 07. ITA.NO. 329/P N J /1 4 IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) PANAJI IN APPEAL NO. ITA.NO. 9 5 /MRG/ 13 - 14 DATED 21.04.2014 FOR THE ASSESSMENT YEAR 2010 11 . C.O NO. 3 7 /P NJ /1 4 IS THE CROSS OBJECTION FILED BY THE ASSESSEE IN THE REVENUE APPEAL FILED IN ITA NO. 229/ PNJ/ 14 IN THE ORDER OF THE LEARNED CIT(A) PANAJI IN APPEAL NO. ITA.NO. 96/MRG / 13 - 14 DATED 21.04.2014 FOR THE ASSESSMENT YEAR 2008 09 . C.O NO. 38/P NJ /14 IS THE CROSS OBJECTION FILED BY THE ASSESSEE IN THE REVENUE APPEAL FILED IN ITA.NO.230/ PNJ /14 AGAINST THE LEARNED CIT(A) PANAJI IN APPEAL ITA.NO. 97 /MRG/ 13 - 14 DATED 21.04.2014 FOR THE ASSESSMENT YEAR 2009 10 AND ITA.NO.91/PAN/1 6 IS THE APPEAL FILED BY THE ASSESSEE AGAINST 3 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. THE ORDER OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER DATED 17.03.2016 FOR THE ASS ESSMENT YEAR 2011 12. 2 . AS ISSUES IN THE APPEAL S ARE COMMON AND RELATES TO THE SAME ASSESSEE THESE APPEALS ARE DISPOSED OF BY THIS COMMON ORDER. 3 . SHRI MUKUND BAKSHI, CA REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI RAVIRAJ Y.V REPRESENTED ON BEHALF OF THE REVENUE. 4 . ITA.NO.328/PN J /14 FOR THE A . Y - 2006 07 : - TWO GROUNDS HAVE BEEN RAISED IN THIS APPEAL . GROUND NO. 1 IS AGAINST THE REOPENING OF THE ASSESSMENT. AT THE TIME OF HEARING LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT HE DOES NOT WISH TO PRESS THE GROUND NO. 1 REGARDING REOPENING. CONSEQUENTLY GROUND NO.1 OF THE ASSESSEES APPEAL STANDS DISMISSED AS NOT PRESSED. 5 . IN REGARD TO GROUND NO.2 IT WAS SUBMITTED THAT THE ISSUE WAS AGAINST THE ACTION OF THE LEARNED CIT(A) IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING THE ADDITION OF 1.95 CRORES REPR ESENTING THE AMOUNT OF MAT CREDIT ENTITLEMENT WHEN COMPUTING THE BOOK PROFITS UNDER SECTION 115JB. IT WAS SUBMISSION THAT THE ASSESSEE WAS ENTITLED TO THE CREDIT OF THE MAT AGAINST THE CURRENT YEARS TAX LIABILITY. THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE DR E W OUR ATTENTION TO PAGE 75 OF THE PAPER BOOK, WHICH IS A COPY OF THE PROFIT & LOSS ACCOUNT WHEREIN UNDER THE PROVISION FOR TAX THE ASSESSEE HAS DEBITED .1.95 CRORES BEING THE MAT CREDIT ENTITLEMENT AGAINST THE PROFITS BEFORE TAX. THUS SHOWING PROVISION FOR TAX AT 859 . 54 LAKHS . HE FURTHER DREW OUT ATTENTION TO THE PAGE 3 OF THE ASSESSMENT ORDER WHEREIN THE COMPUTATION OF THE MAT HAS BEEN SHOWN. IT WAS SUBMISSION THAT IN THE PROFIT & LOSS THE ASSESSEE HAS DEBITED THE GROSS OF THE CURRENT YEARS TAX AGAINST THE MAT CREDIT ENTITLE MENTS AND HAS SHOWN THE NET AMOUNT IN THE PROFIT & LOSS ACCOUNT . IT WAS SUBMISSION THAT ON ACCOUNT OF THE 4 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. COMPUTATION OF THE 115JB ASSESSEE HAS CREDITED THE SAID NET AMOUNT OF . 859.54 LAKHS W HICH INCLUDED THE MAT CREDIT ENTITLEMENT OF .1.95 CRORES. IT WAS SUBMISSION THAT THE ASSESSING OFFICER HAD HELD THAT THIS AMOUNT OF . 1.95 CRORES WAS NOT ALLOWABLE. IT WAS SUBMISSION THAT UNDER IDENTICAL CIRCUMSTANCES THE COORDINATE BENCH OF THIS TRIBUNAL, AHMADABAD BENCH HAS HELD THAT THE CALCULATION AS DONE BY THE ASSESSEE WAS CORRECT. HE DREW OUT ATTENTION TO THE ORDER OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF THE JK PAPER LIMITED IN ITA N O . 2155/AHD/2013 & CO 36/AHD/14 DATED 18/10/16 WHEREIN IN PARA 23 IT HAS BEEN HELD AS FOLLOWS: - IT CAN BE SEEN THAT PROVISION FOR CURRENT TAX IS SHOWN AT . 7,41,01,907/ - AND MAT CREDIT ENTITLEMENT HAS BEEN SEPARATELY SHOWN AT . 6,13,84,689/ - IT CAN BE FURTHER SEEN THAT THE PROVISION FOR CURRENT TAX IS SHOWN AT GROSS AMOUNT. THE NET AMOUNT COMES TO . 1,27, 17,218/ - , IF THE MAT CREDIT ENTITLEMENT IS REDUCED FROM PROVISION FOR CURRENT TAX. IF THE ASSESSEE HAD SHOWN THE NET AMOUNT OF . 1,27,17,218/ - AND ADDED BACK THE SAME FOR THE COMPUTATION OF THE BOOK PROFIT, THE REVENUE WOULD HAVE ACCEPTED THIS COMPUTATIO N. BUT FOR THE ACCOUNTING PRINCIPLES AND SET GUIDELINES BOTH THE AMOUNTS WERE SHOWN SEPARATELY. CONSIDERING THESE FACTS IN TOTALITY, WE DO NOT FIND ANY LOGIC IN MAKING THE ADDITION OF . 6,13,84,689/ - FOR COMPUTING THE BOOK PROFIT; THE SAME HAS TO BE DEL ETED. GROUND NO.1 IS ACCORDINGLY DISMISSED. 6 . IN REPLY THE LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND CIT(A). IT WAS SUBMITTED THAT ASSESSEE HAD WITHDRAW N THE SAID GROUND BEFORE THE CIT(A). 5 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. 7 . WE HAVE CO NSIDERED THE RIVAL SUBMISSIONS. IT IS NOTICED THAT THE LEARNED CIT(A) HAS RECORDED THAT THE ISSUE S IN THE APPEAL HAS BEEN WITHDRAWN BEFORE THE CIT(A). HOWEVER WHEN THIS ISSUE WAS DECIDED BY THE TRIBUNAL IN ITS ORDER DATED 07.07.15 THE SAME WAS CHALLENGED BY THE ASSESSEE BEFORE THE HONBLE BOMBAY HIGH COURT IN TAX APPEAL N O . 79 TO 82 / 2015 AND BY AN ORDER DATED 16.02.2016 THE HONBLE HIGH COURT HAS SET ASIDE THE TRIBUNAL ORDER AND HAS DIRECTED THE TRIBUNAL TO HEAR THE APPEALS FRESH AFTER HEARING THE PARTIE S IN ACCORDANCE WITH THE LAW. CONSEQUENTLY AS IT IS NOTICED THAT THE WITHDRAWAL BEFORE THE LEARNED CIT(A) IS CATEGORICALLY CONDITIONAL, AND AS IT IS NOTICED THAT AS PER THE LAW THE CLAIM AS MADE BY THE ASSESSEE IS JUSTIFIABLE, THE ISSUES ARE BEING DECIDED ON MERITS. 8 . A PERUSAL OF THE PROFIT AND LOSS ACCOUNT AND COMPUTATION OF UNDER SECTION 115JB CLEARLY SHOWS THAT THE ASSESSEE IS ADDING BACK THE NET AMOUNT DEBITED TO THE PROFIT AND LOSS ACCOUNT. THE SAME IS WHAT IS EXPECTED OF THE ASSESSEE UNDER THE PRO VISIONS OF SECTION 115JB . THIS VIEW ALSO FINDS SUPPORT FROM THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL , AHMADABAD BENCH IN THE CASE THE JK PAPER LIMITED REFERRED (SUPRA). IN THE CIRCUMSTANCES THE ADDITION AS MADE BY THE ASSESSING OFFICER AND AS CONFIRMED BY THE CIT (A) STANDS ALLOWED. IN THE RESULT GROUND NO.2 OF THE APPEAL STANDS ALLOWED. 9 . IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 10 . C.O.NO.37/P N J /2014 : - IN THE CROSS OBJECTION THE ASSESSEE HAS RAISED FIVE GROUNDS. GROUND N O .1 WAS AGAINST THE REOPENING OF THE ASSESSMENT UNDER SECTION 147 OF THE ACT. AT THE TIME OF THE HEARING THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE DID NOT DESIRE TO PRESS THE SAID GROUND AND CONSEQUENTLY THE SAME STANDS DISMISSED AS WITHDRAWN. 6 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. 11 . IN REGARD TO THE GROUND N O .2 IT IS SUBMITTED BY THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT THE ISSUE WAS AGAINST THE ACTION OF THE LEARNED CIT(A) IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER BY INVOKING THE PROVISION OF SE CTION 14A OF THE ACT. IT WAS SUBMISSION BY THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT FOR THE PURPOSE OF THE MAKIN G DISALLOWANCE UNDER SECTION 14 A READ WITH RULE 8D, SATISFACTION IS LIABLE TO BE RECORDED REGARDING THE INCURRENCE OF THE EXP ENDITURE AS HAS BEEN HELD BY THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SESA GOA LTD REPORTED IN 38 TAXMAN.COM 34 (PANAJI) AS ALSO MUMBAI BENCHES IN THE CASE OF S HAPOORJI PALLONJI AND COMPANY LIMITED REPORTED IN 79 TAXMAN.COM 39 MUMBAI. 12 . THE LE ARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE DREW OUR ATTENTION TO THE ASSESSMENT ORDER , PARA 2 TO SUBMIT THAT NO SUCH SATISFACTION HAS BEEN RECORDED. IT WAS FURTHER SUBMISSION THAT THE ASSESSEE ALSO HAD SUBSTANTIAL NONINTEREST BEARING FUNDS TO AN EXTENT OF .844.45 CRORES WHEREAS THE TOTAL INVESTMENT IN THE SHARES WAS ONLY .337.68 CRORES AND EVEN THE CALCULATION OF THE DISALLOWANCE AS MADE BY THE ASSESSING OFFICER ITSELF WAS ERRONEOUS IN SO FAR AS THE ASSESSING OFFICER HAS TAKEN THE TOTAL OF THE I NVESTMENT AS HAVING GENERATED EXEMPT INCOME AND NOT THE VALUE OF THE INVESTMENTS WHICH HAS GENERATED THE EXEMPT INCOME. IT WAS SUBMISSION THAT EVEN ASSUMING THAT, DISALLOWANCE IS TO BE CALCULATED IT IS TO BE MADE TAKING INTO CONSIDERATION THE INVESTMENTS WHICH HAS GENERATED THE EXEMPT INCOME. IT WAS SUBMISSION THAT AS NO SATISFACTION ITSELF HAS BEEN RECORDED THE DISALLOWANCE AS MADE BY THE ASSESSING OFFICER WAS LIABLE TO BE DELETED. IT WAS ALSO SUBMISSION THAT AS THE ASSESSEE HAD SUBSTANTIAL OWN FUNDS IN EXCESS OF THE INVESTMENT , NO DISALLOWANCES IS LIABLE TO BE MADE IN VIEW OF THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF HDFC BANK LIMITED REPORTED IN 366 ITR 505 AS ALSO THE DECISION OF THE 7 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. HONBLE BOMBAY HIGH COURT IN SBI DHFL LIMITED R EPORTED IN 376 ITR 296. IN REPLY LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). 13 . WE HAVE CONSIDERED THE RIVAL SUBMISSION. A PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE ASSESS ING OFFICER HAS NOT RECORDED THE SATISFACTION UNDER SECTION 14A(2) REGARDING THE INCURRENCE OF EXPENDITURE. IN THE CIRCUMSTANCES RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENC H OF THIS TRIBUNAL IN THE CASE OF THE SESA GOA LTD . REFERRED (SUPRA) WHEREIN IT HAS BEEN HELD AS FOLLOWS : - 18. WE HAVE ALSO GONE THROUGH THE DECISION RELIED UPON BY THE LEARNED DR ALSO. THE DECISION OF CITICORP FINANCE (INDIA) LTD. (SUPRA) IS NO MORE RELEVANT, IN VIEW OF THE DECISION OF THE HONBLE MUMBAI HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD. (SUPRA). THE DECISION OF SOUTHERN PETRO CHEMICAL INDUSTRI E S (SUPRA) IS NOT APPLICABLE TO THE FACTS OF THE CASE. A S IN THAT CASE, THE ASSESSEE WAS REGULARLY INVESTING IN THE SHARES. THE ASSESSEE HAS NOT DISALLOWED ANY EXPENDITURE WITH REGARD TO THE EARNING OF THE DIVIDEND INCOME. UNDER THESE FACTS, THE HONBLE TRIBUNAL HELD THAT WHETHER TO INVEST OR NOT TO INVEST IS A VERY STRATEGIC DECISION AND TOP MANAGEMENT INVOLVE IN TAKING THE DECISIONS. THE DECISION RELATE TO ASSESSMENT YEAR 2000 01 MUCH PRIOR TO THE INSERTION OF PROVISIONS OF SEC. 14A(2) OF THE IT ACT, 1961. THE DECISION OF PREMIUM CONSOLIDATED CAPITAL TRUST (I) LTD. (SUPRA) RELATES TO ASSESSMENT YEAR 1991 92 TO INSERTION OF 14A(2) HENCE WILL NOT ASSIS T THE REVENUE. THE OTHER DECISION RELIED ON ARE ALSO NOT APPLICABLE TO THE F A CTS OF THE CASE, EXCEPT THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD. (SUPRA). 8 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. 14 . THIS VIEW OF OURS IS ALSO SUPPORTED BY THE DECISION OF THE HONBLE MUMBAI HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD. REPORTED IN 328 ITR 8 1. 15 . FURTHER AS IT IS NOTICED THAT THE ASSES SEE HAS SUBSTANTIAL OWN FUNDS FA R I N EXCESS OF THE INVESTMENTS WHICH HAS GENERATED THE EXEMPT INCOME . CONSEQUENTLY , IN VIEW OF THE DECISION OF THE HONBLE MUMBAI HIGH COURT IN THE CASE OF HDFC BANK LIMITED REFERRED (SUPRA) AS ALSO THE DECISION IN THE CASE OF SBI DHFL REFERRED TO (SUPRA), W E ARE OF THE VIEW THAT NO DISALLOWANCE OF INTEREST UNDER SECTION 14A IS CALLED FOR IN THE HANDS OF THE ASSESSEE. CONSEQUENTLY THE DISALLOWANCE AS MADE BY THE ASSESSING OFFICER BY INVOKING OF THE PROVISION S OF SECTION 14A READ WITH RULE 8D STANDS DELETED. IN THE RESULT GROUND NO.2 OF THE CROSS OBJECTION STANDS ALLOWED. 16 . IT WAS SUBMISS ION THAT GROUND N O. 3 WAS AGAINST THE ACTION OF THE LEARNED CIT(A) IN CONFIRMING THE DISALLOWANCE OF THE DIMU NITION IN THE VALUE OF THE FERTILIZERS BONDS UNDER SECTION 37 OF THE ACT. IT WAS SUBMISSION THAT THE FERTILIZER BONDS WERE GIVEN BY THE GOVERNMENT IN L IEU OF THE SUBSIDY THAT WERE RECEI VA BLE BY THE ASSESSEE COMPANY. IT WAS A SUBMISSION THAT THE FERTILIZER BONDS WERE NOT PURCHASED BY THE ASSESSEE AS INVESTMENTS BUT WERE IN FACT THRUST ON THE ASSESSEE IN LIEU OF THE SUBSIDY RECEIVA BLE BY THE ASSESSEE COMPANY. IT WAS A SUBMISSION THAT THE ASSESSEE HAD BEEN CLAIMING THE LOSS IN RESPECT OF THE DIM U NITION IN THE VALUES OF THE FERTILIZER BONDS EVERY YEAR AND THE DIFFERENTIAL ACTUAL LOSS WAS CLAIMED IN THE YEAR OF SALE OF THE FERTILIZER BONDS. IN REPLY LEA RNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND LEARNED CIT(A). 17 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMITTEDLY THE ASSESSEE HAS NOT SHOWN THESE BONDS AS I NVEST MENTS IN IT S BOOKS OF 9 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. ACCOUNTS. THEY ARE SHOWN AS CURRENT ASSETS. THE BONDS HAVE BEEN RECEIVED BY THE ASSESSEE ADMITTEDLY IN THE COUR SE OF ITS BUSINESS. IT IS NOTICED THAT THE LEARNED CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO ALLOW THE REAL LOSS AS AND WHEN THE BONDS ARE SOLD. THE ASSESSEE H AS NOT BEEN ABLE TO SHOW AS TO HOW THE SAID DIRECTION GIVEN BY THE LEARNED CIT(A) IS ERRONEOUS. THIS BEING SO THE FINDING OF THE LEARNED CIT(A) ON THIS ISSUE STANDS CONFIRMED. 18 . IN REGARD TO GROUND NO.4 IT WAS SUBMITTED BY THE LEARNED AUTHORIZED REPRESEN TATIVE OF THE ASSESSEE THAT THE ASSESSEE HAD INCURRED EXPENDITURE OF . 1,32,90,807/ - ON THE REVAMPING OF THE PLANT AND THE MACHINERY . IT WAS A SUBMISSION THAT THE EXPENDITURE WAS IN THE NATURE OF IMPROVING THE EFFICIENC Y OF THE MACHINERY AND CONSEQUENTLY REVENUE IN NATURE. IT WAS SUBMISSION THAT THE ASSESSING OFFICER HAD TREATED THE EXPENDITURE AS CAPITAL IN NATURE. IT WAS SUBMISSION THAT THE EXPENDITURE HA VING BEEN TREATED AS CAPITAL IN NATURE, ASSESSEE MAY BE GRANTED THE BENEFIT OF THE DEPRECIATION. IN REPLY LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND CIT(A). 19 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE ASSESSING OFFICER HAS HELD THAT T HE EXPENDITURE IN RESPECT OF THE REVAMPING OF THE AMMONIA AND UREA PLANT H AS PROVIDED ENDURING BENEFIT TO THE AS SESSEE AND LED TO A MAJOR REVAMPING IN THE AMMONIA AND UREA PLANTS. CONSEQUENTLY HE HAS DENIED THE ASSESSEES CLAIM OF THE SAME AS REVENUE EXPE NDITURE AND HELD THAT THE ASSESSEE COULD CAPITALISE THE SAME. THIS BEING SO THE ASSESSING OFFICER IS DIRECTED THE GRANT THE ASSESSEE THE DEPRECIATION IN RESPECT OF THE SAID CAPITALISED AMOUNT . IN THE RESULT GROUND NO . 4 STANDS PARTLY ALLOWED. 10 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. 20 . IT WAS THE SUBMISSION BY THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT IN RESPECT OF THE GROUND N O . 5, IT WAS AGAINST THE ACTION OF THE LEARNED CIT (A) IN NOT GRANTING THE ASSESSE E THE BENEFIT OF THE TDS CREDIT TO AN EXPENDITURE OF . 18, 50 ,403/ - . IT WA S SUBMISSION BY BOTH SIDE S THAT THERE WAS NO OBJECTION IF THIS ISSUE WAS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR RE - ADJUDICATION AFTER GRANTING THE ASSESSEE AN OPPORTUNITY TO PRODUCE AND PROVE CLAIM OF TDS WITH EVIDENCES. 21 . WE HAVE CONSIDERED TH E SUBMISSIONS. A S IT IS NOTICED THAT THE ASSESSEE HAS CLAIMED THAT THERE IS A SHORT CREDIT OF TDS, THE ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR RE - ADJUDICATION AFTER GRANTING ASSESSEE ADEQUATE OPPORTUNITY TO PRODUCE ALL SUCH EVIDENCES I N RESPECT OF THE CLAIM OF THE SHORT CREDIT OF TDS . IN THE RESULT THE GROUND N O . 5 OF THE CROSS OBJECTION PARTLY ALLOWED FOR STATISTICAL PURPOSE. 22 . IN THE RESULT THE CROSS OBJECTION FILLED BY THE ASSESSEE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 23 . C.O.NO.38 /P N J /2014 : - IT IS SUBMITTED BY THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT IN RESPECT OF THE GROUND NO . 1 IS AGAINST THE REOPENING UNDER SECTION 147 OF THE ACT. AT THE TIME OF HEARING THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SU BMITTED THAT THE SAME WAS NOT PRESSED. AS THE ASSESSEE DID NOT WISH TO PRESS THE SAM E, C ONSEQUENTLY THE SAID GROUND STANDS DISMISSED AS WITHDRAWN. 24 . IN RESPECT OF THE GROUND NO. 2 IT WAS SUBMITTED THAT THE ISSUE WAS AGAINST THE ACTION OF THE CIT(A) IN CONFIRMING THE DISALLOWANCE OF EXPENDITURE BY I NVOKING OF PROVISION OF SECTION 14A OF THE ACT. IT WAS FAIRLY AGREED BY BOTH SIDES THAT THE ISSUE WAS IDENTICAL TO THE ISSUE IN 11 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. GROUND NO.2 OF THE CROSS OBJECTION NO.37/ PNJ/ 2014 FOR THE ASSESSMENT YEAR 2008 09 AND THE SAME ARGUMENTS WOULD APP LY. 25 . WE HAVE CONSIDERED THE SUBMISSIONS. AS IT IS NOTICED THAT THE ISSUE IN GROUND N O .2 IS IN RESPECT OF THE DISALLOWANCE UNDER SECTION 14A , OUR DECISION IN RESPECT OF GROUN D NO.2 IN C.O.NO.37/P NJ /2014 WOULD APPLY TO THIS GROUND . CONSEQUENTLY THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED CIT(A) UNDER SECTION 14A READ WITH RULE 8D STANDS DELETED. 26 . IN RESPECT OF GROUND NO. 3 IT WAS FAIRLY AGREED BY BOTH SIDES THAT THE ISSUE WAS AGAINST THE ACTION OF THE LEARNED CIT(A) IN DISALLOWING THE DIMUNITION IN THE VALUE OF THE FERTILIZER BONDS UNDER SECTION 37 OF THE ACT. IT WAS FAIRLY AGREED BY BOTH SIDES THAT THE ISSUE WAS IDENTICAL TO THE ISSUE IN GROUND NO. 3 AS RAISED IN THE CROSS OBJECTION NO.37/P N J /2014 FOR THE ASSESSMENT YEAR 2008 09 . 27 . WE HAVE CONSIDERED THE SUBMISSIONS. WE HAVE ALREADY HELD THAT THE LOSS ON ACCOUNT OF THE DIMUNITION OF THE VALUE OF THE FERTILIZERS BONDS IS LIABLE TO BE ALLOWED ON THE BASIS OF THE AC T UAL LOSS INCURRED ON THE SALE / REDEMPTION OF THE BONDS IN C.O.NO.37/P N J /2014 , FOR THE RELEVANT ASSESSMENT YEAR 2008 09 , THE S A ME FINDING APPLIES TO THIS GR O UND ALSO. CONSEQUENTLY , GROUND NO. 3 IS PARTLY ALLOWED. 28 . IN RESPECT TO THE GROUND NO.4 IT WAS SUBMITTED BY LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT THE ISSUE WAS AGAINS T THE ACTION OF THE LEARNED CIT(A) IN CONFIRMING THE DISALLOWANCE OF THE INTEREST EXPENDITURE UNDER SECTION 36(1 ) (III) OF THE ACT . IT WAS SUBMISSION THAT IN THE COURSE OF THE ASSESSMENT THE ASSESSING OFFICER HAD NOTICED THAT T HE ASSESSEE HAS GIVEN INTEREST FREE FUNDS TO ITS SISTER CON CERNS AND HE CONSEQUENTLY DISALLOWED PROPORTIONATE INTEREST BY INVOKING THE PROVISION OF THE SECTION 36(1)(III) OF THE ACT. IT WAS 12 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. SUBMIS SION THAT THE ASSESSEE HAD GIVEN INTEREST FREE LOANS TO THE EXTENT OF 52.20 CRORES TO ITS SUBSIDIARY COMPANIES DURING THE YEAR. IT WAS SUBMISS ION THA T THE ASSESSEE HAD OWN FUNDS IN EXCESS OF THE INTEREST FRE E ADVANCES AND CONSEQUENTLY NO DISALLOWANCES WAS CALLED FOR. IT WAS SUBMISSION THAT THE ASSESSEE HAD OWN FUNDS TO AN EXTENT OF 927.40 CRO R ES AS AGAINST THE ADVANCE OF . 52.70 CRORES GRANTED TO THE SISTER CONCERN. ON SPECIFIC QUERY AS TO HOW MUCH WAS THE INVESTM ENTS IN THE SHARES DURING THE ASSESSMENT YEAR, IT WAS SUBMITTED THAT THE SAME WAS . 722 CRORES. IT WAS SUBMITTED THAT EVEN IF THE I NVESTMENTS WERE CONSIDERED THE GROSS NONINTEREST BEARING OWN FUNDS WAS TO EXTENT OF . 927 CRORES; AND THE ADVANCE TO THE SISTER CONCERN WAS .52.7 0 CRORES AND THE INVESTMENTS . 722 CRORES , THUS THE ASSESSEE HAD ADEQUATE NONINTEREST BEARING FUNDS TO GIVE INTEREST FREE LOANS TO SUBSIDIARY COMPANIES. IT WAS SUBMISSION IN VIEW O F THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT OF BOMBAY IN THE CASE OF RELIANCE UTILITIES AND POWER LTD. REPORTED IN 313 ITR 340, NO DISALLOWANCE IS LIABLE TO BE INVOKE D UNDER THE PROVISIONS OF SECTION 3 6 (1)(III) IS LIABLE TO BE MADE. IN REPLY LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND LEARNED CIT(A). 29 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMITTEDLY THE ASSE SSEE HAS ADEQUATE NON INTEREST BEARING OWN FUNDS F A R AN EXCESS OF THE GRO SS OF THE ADVANCES MADE TO THE SUBSIDIARY AND THE GROSS OF THE INVESTMENTS IN THE SHARES. THIS BEING SO WE RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF RELIANCE UTILITIES AND POWER LTD. REFERRED TO (SUPRA). WHEREIN IT HAS BEEN HELD IF THERE WERE FUNDS AVAILABLE BOTH INTEREST - FREE AND OVERDRAFT AND / OR LOANS TAKEN, THEN A PRESUMPTION WOULD ARISE THAT I N VESTMENTS WOULD BE OUT OF THE INTEREST - FREE FUNDS GENERATED OR AVAILABLE WITH THE COMPANY, IF THE INTEREST - FREE FUNDS WERE SUFFICIENT TO MEET THE INVESTMENTS , THE 13 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. ASSESSING OFFICER IS DIRECTED TO DELETE THE DISALLOWANCE OF INTEREST. I N THE RESULT GROUND NO.4 OF THE CROSS OBJECTION STANDS ALLOWED. 30 . IN RESPECT OF THE GROUND NO .5, IT IS FAIRLY AGRE ED BY BOTH SIDES THAT THE ISSUE WAS AGAINST THE GRANTING SHORT TDS CREDIT. IT IS FAIRLY AGREED BOTH SIDES THAT THE ISSUE WAS IDENTICAL TO THE GROUND NO. 5 OF THE C.O.NO.37/P N J /2014 FOR THE ASSESSMENT YEAR 2008 09. 31 . WE CONSIDERED THE SUBMISSION. A S WE HAVE RESTORED THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR RE - ADJUDICATION AFTER GRANTING ASSESSEE ADEQUATE OPPORTUNITY TO SUPPORT HIS CASE OF THE CLAIM OF TDS ON IDENTICAL GROUND, THIS ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR THE RELEVANT ASSESSMENT YEAR ALSO. IN THE RESULT GROUND NO.5 OF THE ASSESSEE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 32 . I N THE RESULT THE CROSS OBJECTION FILED BY THE ASSESSEE IS STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES . 33 . ITA.NO.329/PNJ/2014 FO R THE A . Y 2010 11 : - IN REGARD TO GROUND NO.1 IT WAS FAIRLY AGREED BY BOTH THE SIDES THA T THE ISSUE WAS IDENTICAL TO GROUND N O . 2 OF C.O.NO.37/PNJ/14 IN RESPECT OF THE DISALLOWANCE CONFIRMED BY THE LEARNED CIT(A) WITH RESPECT OF THE SECTION 14A READ WITH RULE 8D OF THE AC T . IT WAS SUBMISSION THAT THE SUBMISSION S IN RESPECT OF THE GROUND N O .2 IN C.O. NO. 37/PNJ/2014 WO U LD APPLY. 34 . WE HAVE CONSIDERED SUBMISSIONS. AS WE HAVE ALREADY HELD THAT THE THERE IS NO RECORD ING OF SATISFACTION AND THERE WAS ADEQUATE NONINTEREST BEARING FUNDS AVAILABLE WITH THE ASSESSEE, FOLLOWING OUR DECISION IN RESPECT OF THE GROUND N O .2 OF C.O.NO.37/PNJ/2014 THE ADDITION CONFIRMED BY THE LEARNED CIT(A) STANDS DELETED. IN THE CIRCUMSTANCES GROUND NO. 1 OF THE ASSESSEE APPEAL STANDS ALLOWED. 14 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. 35 . IN RESPECT OF GROUND N O .2 IT WAS SUBMITTED THAT T HE ISSUE WAS AGAINST THE DISALLOWANCE OF THE DIMUNITION OF THE VALUE OF THE FERTILIZER BONDS UNDER SECTION 37(1)(III) OF THE ACT. IT WAS FAIRLY AGREED THAT THE ARGUMENTS WERE IDENTICAL TO THE ARG UMENTS IN RESPECT OF GROUND NO.3 OF THE C.O. NO. 37/JPNJ/2014 FOR THE ASSESSMENT YEAR 2008 09. 36 . WE HAVE CONSIDERED THE SUBMISSIONS. AS WE HAVE ALREADY HELD THAT THE ASSESSING OFFICER IS TO ALLOW THE REAL LOSS AS AND WHEN THE FERTILIZER BONDS ARE SOLD / REDE EMED IN RESPECT OF THE FERTILIZER BONDS IN THE GROUND NO.3 OF THE ASSESSEES CROSS OBJECTION IN C.O.NO.37/PNJ/2014 FOR THE ASSESSMENT YEAR 2008 09 ON IDENTICAL FINDING FOR THIS YEAR ALSO THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE REAL LOSS AS AND WHEN THE FERTILIZER BONDS ARE SOLD / REDEEM ED . IN THE CIRCUMSTANCES GROUND N O .2 IS PARTLY ALLOWED. 37 . IN RESPECT OF THE GROUND NO.3 IT WAS FAIRLY AGREED THAT THE ISSUE WAS IDEN TICAL TO GROUND N O .4 IN C.O.NO.38/PNJ/2014 FOR THE ASSESSMENT YEAR 2009 10. IT WAS FURTHER SUBMITTED THAT FOR THE RELEVANT ASSESSMENT YEAR THE GROSS NONINTEREST BEARING OWN FUNDS WAS . 1,068 CRORES WHEREAS THE NON INTEREST BEARING LOANS TO THE SUBSIDIARIES WAS TO AN EXTE NT OF . 68.9 CRORES AND THE INVESTMENTS IN SHARES WAS . 1 , 049 CRORES. IT WAS SUBMISSION THAT THERE IS A SHORT FALL OF . 49.9 CRORES. IT WAS FAIRLY AGREE D BY THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT THE PROPORTIONATE INTEREST IN RESPECT OF THIS AM OUNT I.E. . 49.9 CRORES WAS LIABLE TO BE DISALLOWED. 38 . WE HAVE CONSIDERED THE SUBMISSIONS. ADMITTEDLY IN RESPECT OF GROUND NO .4 IN THE C.O.NO.38/PNJ/2014, WE HAVE HELD THAT A S THE ASSESSEE HAD ADEQUATE NON INTEREST BEARING FUNDS AVAILABLE D URIN G THAT F I NANCIAL YEAR NO DISALLOWANCE IS CALLED FOR UNDER SECTION 37(1)(III) OF THE ACT. HOWEVER AS IT HAS BEEN SHOWN THAT THERE IS A SHORT FALL OF THE 15 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. NONINTEREST BEARING OWN FUNDS TO AN EXTENT OF . 49.9 CRORES IN THE RELEVANT ASSESSMENT YEAR THE DISALLO WANCE OF THE PROPORTIONATE INTEREST UNDER SECTION 36(I)(III) OF THE ACT FOR THE CURRENT YEAR IS RESTRICTED TO THE PROPORTIONATE INTEREST IN RESPECT OF THE INTEREST FREE LOANS GRANTED TO THE SUBSIDIARIES TO AN EXTENT OF . 49.9 CRORES. IN THE RESULT GROUND N O.3 STANDS PARTLY ALLOWED. 39 . IT WAS A SUBMISSION IN RESPECT TO THE GROUND N O.4 OF THE APPEAL THAT THE GROUND WAS AGAINST THE DISALLOWANCE CONFIRMED BY THE LEARNED CIT(A) IN RESPECT OF THE EXPENDITURE INCURRED TOWARDS FEASIBILITY STUDY REPORT UNDER SECTION 37(1) OF THE ACT. IT WAS A SUBMISSION THAT THE ASSESSEE HAD INCURRED EXPENDITURE IN RESPECT OF THE GREENFIELD UREA FERTILIZER PROJECT . THE PAYMENT WAS MADE TO PROJECTS AND DEVELOPMENT INDIA LIMITED FOR PREPARATION OF THE TECHNO ECONOMIC FE ASIBILITY REPORT . IT WAS SUBMISSION THAT THE EXPENDITURE WAS INCURRED FOR THE PURPOSE OF EXPANSION AND DIVERSIFICATION OF THE ASSESSEES EXPANDING BUSINESS. IT WAS SUBMISSION THAT THE PROJECT WAS NOT STARTED BUT HAS BEEN ABANDONED. IT WAS SUBMISSION THAT THE ASSESSEE HAS CLAIMED THE EXPENDITURE AS REVENUE EXPENDITURE . IT WAS SUBMISSION THAT WHEN THE ASSE SS EE FILED ITS RETURN IT WAS ACTUALLY CONSIDERING THE EXPANSION AND DIVERSIFICATION. IT WAS SUBMI TTED THA T IT WAS ONLY SUBSEQUENTLY ON ACCOUNT OF TH E MARKET CONDITIONS THAT THE PROJECT WAS DROPPED. IT WAS SUBMISSION THAT THE ASSESSING OFFICER HAD HELD THAT THE EXPENDITURE WAS A CAPITAL EXPENDITURE. IT WAS SUBMISSION THAT THE ADDITION MAY BE DELETED AND THE SAME MAY BE ALLOWED AS THE REVENUE EXPENDIT URE. IN REPLY THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THA T THE EXPANSION AND DIVERSIFICATION AS PER THE PROJECT REPORT HAS NOT BEEN EXECUTED BUT HAS BEEN DROPPED AND CONSEQUENTLY THE EXPENDITURE WAS LIABLE TO BE TREATED AS THE CAPITAL EXPENDITUR E ONLY. 16 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. 40 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMITTEDLY WHEN THE ASSESSEE FILED ITS RETURNS THE ASSE SS EE DID HAVE THE BONAFIDE BELIEF TH AT IT WAS GOING TO PROCEED WITH THE BUSINESS EXPANSION AND DIVERSIFICATION. HOWEVER IT HAS BEEN ADMITTED BY THE ASSESSEE THAT DUE TO THE MARKET CONDITION IT WAS NOT FEASIBLE TO PROCEED WITH BUSINESS EXPANSION AND DIVERSIFICATION AND CONSEQUENTLY THE PROJECT HAS BEEN DROPPED. AS IT IS NOTICED THAT THE ASSESSEE HAS DROPPED ITS INTENTION OF PROCEEDING WITH T HE P ROJECT OF EXPANSION AND DIVERSIFICATION THE EXPENDITURE INCURRED ON THE FEASIBILITY STUDY IN RESPECT OF THE GREENF IELD UREA FERTILIZER PROJECT CANNOT BE TREATE D AS THE REVENUE EXPENDITURE. CONSEQUENTLY THE FINDING OF THE ASSESSING OFFICER AND THE LEARNED CIT(A) IN HOLDING THE S AID EXPENDITURE AS THE CAPITAL EXPENDITURE STANDS CONFIRMED. I N THE RESULT GROUND NO.4 OF THE ASSESSEES APPEAL STANDS DISMISSED. 41 . IN RESPECT OF THE GROUND N O .5 IT WAS SUBMITTED THAT THE ISSUE WAS AGAINST THE ACTION OF THE LEARNED CIT(A) IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING THE SET OF F OF L OSS ARISING OUT OF THE SALE OF THE PREFERENCE SHARES OF ZUARI MAROC PHOSPHATES LIMITED . LEARNED AUTHORIZED REPRESENTATIVE O F THE ASSESSEE DREW OUR ATTENTION TO THE PAGE 113 OF THE PAPER BOOK TO SUBMIT THAT THE SAID REDEEMABLE PREFERENTIAL SHARES OF ZUARI MAROC PHOSPHATES LIMITED WAS HELD AS INVESTMENTS RIGHT FROM THE DATE OF PURCHASE. IT WAS SUBMISSION THAT THESE SHARES WERE PURCHASED IN 2006 07 AND FROM THAT TIME ITSELF THE SHARE S WERE SHOWN AS INVESTMENT . IT WAS SUBMISSION THAT THE ASSESSING OFFICER HAD HELD THE LOSS ON THE SALE SPECULATION LOSS BY APPLYING THE EXPLANATION TO SECTION 73 OF THE ACT. IT WAS SUBMISSION THAT THE ASSESSEE WAS NOT IN THE BUSINESS OF PURCHASE AND SALE OF THE SHARES. THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THA T THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL AHMADABAD BENCH IN THE CA SE OF SHRI GAUTAMSHIP BREAKING INDUSTRIES LTD.,. IN ITA NO. 379/A HD /20 09 F OR TH E ASSESSMENT 17 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. YEAR 2005 06 ORDER DATED 31.12.2010 WHEREIN IN PARA 5 IT HAS BEEN HELD AS FOLLOWS. 5. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THE DEPARTMENTAL APPEAL HAS NO MERIT AND THE SAME IS LIABLE TO BE DISMISSED. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF THE ITAT AHMEDABAD BENCH IN THE CASE OF KRUTI MARKET ING LTD. (SUPRA) IN WHICH IT WAS HELD THAT 'THERE WAS NO MATERIAL OR EVIDENCE ON RECORD THAT THE ASSESSEE COMPANY WAS CARRYING ON SPECULATION BUSINESS OF DEALING IN SHARES/DEBENTURES OF OTHER COMPANIES. THE ASSESSEE COMPANY WAS MAINLY CARRYING ON BUSINESS OF TRADING IN POLYESTER FILAMENT YARN AND GREY CLOTH. THERE WAS NO SUCH FINDING THAT THE ASSESSEE COMPANY WAS ENGAGED IN THE BUSINESS OF PURCHASE AND SALE OF SHARES OF OTHER ACIT CIR - 1 , BHAVNAGAR VS SHREE GAUTAM SHIP BREAKIN G INDUSTRIES LTD. COMPANIES. THE SHARES IN QUESTION WERE HELD AS INVESTMENTS. EXPLANATION TO SECTION 73, WAS, THEREFORE, NOT APPLICABLE ON THE FACTS AND CIRCUMSTANCES OF THE CASE. THEREFORE, THE LOSS WAS NOT TO BE TREATED TO BE SPECULATION LOSS.' THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISION OF ITAT DELHI BENCH IN THE CASE OF DCIT VS JINDAL EXPORTS LTD. 101 ITD 129 (DELHI) (TM) IN WHICH IT WAS HELD THAT 'IT HAD BEEN ACCEPTED THAT THE SHARES WERE HELD BY THE ASSESSEE AS CAPITAL ASSETS (I NVESTMENTS), LOSS ACCRUING TO THE ASSESSEE WAS LIABLE TO BE ASSESSED AS SHORT TERM CAPITAL LOSS AND, THEREFORE, THERE WAS NO QUESTION OF TREATING IT AS SPECULATION LOSS BY APPLYING EXPLANATION TO SECTION 73.' THE LEARNE D COUNSEL FOR THE ASSESSEE ALSO RELIED UPON THE DECISION OF ITAT KOCHIN BENCH IN THE CASE OF HARRISONS MALAYALAM LTD. VS ACIT 32 SOT 497 IN WHICH IT WAS HELD THAT 'IN THE FACTS AND 18 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. CIRCUMSTANCES OF THE CASE, THE LOSS IS VERY MUCH IN THE NATURE OF CAPITAL L OSS, THEREFORE, THERE IS NO JUSTIFICATION IN TREATING THE SAME AS SPECULATION LOSS.' THE LEARNED DR HOWEVER, SUBMITTED THAT SECTION 73 AS PER ASSESSEE TALKS OF THE LOSS BUT IT COVERS PROFIT OF BUSINESS ALSO. HOWEVER, WE DO NOT AGREE WITH THE CONTENTION OF THE LEARNED DR BECAUSE THE PROVISIONS OF SECTION 73 OF THE IT ACT ARE APPLICABLE TO LOSSES IN SPECULATION BUSINESS AND THE EXPLANATION IS ALSO RELEVANT TO THE SAME. BUT, IN THE CASE OF THE ASSESSEE ON SALE OF SHARES THE ASSESSE E HAS DECLARED INCOME. THE AO WITHOUT PASSING ANY SPEAKING ORDER MERELY APPLIE D THE EXPLANATION TO SECTION 73 OF THE IT ACT IN ORDER TO DISALLOW THE CLAIM OF THE ASSESSEE WHICH IS NOT WARRANTED UNDER THE LAW. THE LEARNED CIT(A) ON PROPER APPRECIATION OF THE FACTS ON RECORD, RIGHTLY HELD THAT EXPLANATION TO SECTION 73 IS NOT ACIT CIR - I, I BHAVNAGAR VS SHREE GAUTAM SHIP BREAKING INDUSTRIES LTD. APPLICABLE TO THE CASE OF THE ASSESSEE BECAUSE IT HAS NOT SUFFERED ANY LOW ON SALE AND PURCHASE O F THE SHARES. THE LEARNED CIT(A) ALSO ON APPRECIATION OF THE EVIDENCES ON RECORD RIGHTLY HELD THAT THE ASSESSEE WAS HOLDING THE SHARES AND SOLD DURING THE YEAR UNDER CONSIDERATION AS INVESTMENT. THE FINDING OF FACTS RECORDED BY THE LEARNED CIT(A) HAVE NOT BEEN DISPUTED THROUGH ANY MATERIAL OR EVIDENCE ON RECORD. ONCE, THE SHARES ARE HELD AS INVESTMENT, ANY GAIN OR LOSS SUFFERED ON ACCOUNT OF SALE OF THE SAME SHALL HAVE TO BE TAXED UNDER THE HEAD CAPITAL GAIN. WE, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT(A). WE CONFIRM HIS FINDINGS AND DISMISS THE APPEAL OF THE REVENUE. 42 . IN REPLY LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND THE CIT(A). 19 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. 43 . WE HAVE CONSIDERED THE RIV AL SUBMISSIONS. ADMITTEDLY A PERUSAL OF THE ASSESSMENT ORDER PA G E 1 , NATURE OF BUSINESS SHOWS THAT T HE ASSESSING OFFICER HAS NOT RECOGNISED ASSESSEE AS BEING IN THE BUSINESS OF PURCHASE OF SALE IN THE SHARES. A PERUSAL OF THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEAR AS ALSO EARLIER ASSESSMENT YEAR SHOW THAT THESE PREFERENTIAL SHARES IN RESPECT OF THE SISTER CONCERNS NAMELY ZUARI MAROC PHOSPHATES LIMITED HAS BEEN SHOWN BY THE ASSESSEE ONLY AS INVESTMENTS. FURTHER THERE IS NOTHING ON RECORD T O SHOW THAT THE ASSESSEE IS IN THE BUSINESS OF PURCHASE AND SALE OF THE PREFERENTIAL SHARES TO HOLD THAT THE EXPLANATION TO SECTION 73 OF THE ACT WAS TO APPLY TO TREAT THE LOSS AS SPECULATION LOSS. IN THESE CIRCUMSTANCE S RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SHRI GAUTAMSHIP BREAKING INDUSTRIES LIMITED REFERRED TO (SUPRA) T HE ASSESSING OFFICER IS DIRECTED TO ALLOW THE SET OF F OF LOSS ON THE SALE OF THE PREFERENTIAL SH A RES IN ZUARI MAROC PHOSPHATES LIMITED AGAINST LONG TERM CAPITAL GAINS AS DISCLOSED BY THE ASSESSEE. IN THE RESULT GROUND NO 5 OF THE ASS ESSEES APPEAL STANDS ALLOWED. 44 . IN RESPECT OF THE GROUND N O 6 IT WAS SUBMITTED THAT THE ISSUE WAS AGAINST THE NON GRANT ING OF THE TDS CREDITS. IT WAS FAIRLY AGREED BY BOTH THE PARTIES THAT THE ISSUES CAN BE RESTORED TO THE FILE OF THE ASSESSING OFFICER AS HAS BEEN DECIDED IN GROUND N O.5 OF THE C.O.NO.37/PNJ/2014 FOR THE ASSESSMENT YEAR 2008 09 45 . WE HAVE CONSIDERED THE SUBMISSIONS. AS WE HAVE ALREADY RESTORED THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR RE - ADJUDICATION AFTER GRANTING THE ASSESSEE ADEQUATE OPPORTUNITY TO PRODUCE ALL SUCH EVIDENCE IN RESPECT OF THE CLAIM OF THE SHORT CREDIT O F TDS IN C.O. NO. 37/PNJ/2014 FOR THE ASSESSMENT YEAR 2008 09 WITH SIMILAR FINDINGS , 20 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. THIS GROUND IS ALSO RESTORED TO THE FILE OF ASSESSING OFFICER. IN THE RESULT GROUND N O 6 OF THE ASSE SSE E APPEAL STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 46 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 47 . ITA.NO.91/PAN/2016 FOR THE A . Y 201 1 1 2 : AT THE TIME OF HEARING LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE ISSUE IN RESPECT OF THE TRANSFER PRICING IN PART - A GROUNDS FROM 1 TO 6 OF THE ASSESSEES APPEAL WAS NOT PRESSED. CONSEQUENTLY GROUNDS FROM 1 TO 6 IN PART A OF THE ASSESSEE APPEAL STANDS DISMISSED AS NOT PRESSED. 48 . IN RESPECT OF PART B GROUNDS FROM 7 TO 14 , IT WAS SUBMITTED THAT THE ISSUE S WAS AGAINST THE CONFIRMING OF THE DISALLOWANCE MADE UNDER SECTION 1 4A READ WITH RULE 8D OF THE ACT. IT WAS FAIRLY AGREED BY BOTH THE SIDES THAT THE SUBMISSIONS IN RESPECT OF THE SAID GROUNDS WERE IDENTI CAL TO THE SUBMISSION IN RESPECT TO THE GROUND NO. 2 IN THE C.O. NO. 37/PNJ/2014 FOR THE ASSESSMENT YEAR 2008 09. 49 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS WE HAVE ALREADY DELETED DISALLOWANCE MADE BY INVOKING PROVISIONS OF SECTION 14A IN RESPECT OF GROUND NO .2 OF C.O.NO. 37/PNJ/2014 FOR THE ASSESSMENT YEAR 2008 09 , ON IDENTICAL FINDINGS THE DISALLOWANCE MADE UNDER SECTION 14A FOR THE RELEVANT ASSESSMENT YEAR STANDS DELETED. I N THE CIRCUMSTANCES GRO UNDS FROM 7 TO 14 OF THE ASSESSEES APPEAL STANDS ALLOWED. 50 . IN RESPECT OF PART C GROUND S 1 6 AND 17 , IT WAS SUBMITTED THAT THE ISSUE S ARE RELATI NG TO THE ADDITION BACK OF THE AMOUNT DISALLOWED UNDER SECTION 1 4A READ WITH RULE 8D WHEN COMPU TING BOOK PROFITS 21 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. UNDER SECTION 115JB. IT WAS SUBMISSION THAT THE DISALLOWANCES UNDER SECTION 14A ITSELF BE ING NOT MAINTAINABLE THE SAME C OULD NOT BE CONSIDERED WHEN COMPUTING THE BOOK PROFITS UNDER SECTION 115JB. IN REPLY THE LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND CIT (A). 51 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A S WE HAVE ALREADY DELETED THE DISALLOWANCES UNDER SECTION 14A READ WITH RULE 8D THE GROUNDS 16 AND 17 OF THE ASSESSEE APPEAL BECOME INFRUCTUOUS AS THERE IS NO DISALLOWANCES WHICH IS REQUIRED TO CONSIDERED WITH COMPUTING THE BOOK PROFITS UNDE R SECTION 115JB. IN THE RESULT THE GROUND N O . 16 AND 17 OF THE ASSESSEES APPEAL STANDS ALLOWED. 52 . IN RESPECT OF THE PART - D GROUNDS FROM 18 TO 21, IT WAS SUBMITTED THAT THE ISSUE WAS AGAINST THE DISALLOWANCES OF THE PROPORTIONATE INTEREST IN RESPECT OF TH E INTEREST FREE LOAN S GRANTED TO THE SISTER CON CERNS BY INVOKING THE PROVISION OF SECTION 36(1)(III) OF THE ACT. IT WAS FAIRLY AGREED BY BOTH THE SIDES THAT THE ISSUE WAS IDEN TICAL TO GROUND N O 4 IN THE C.O.NO.38/PNJ/2014 FOR THE ASSESSMENT YEAR 2009 10. IT WAS SUBMITTED THAT THE ASSESSEES OWN FUNDS FOR THE RELEVANT ASSESSMENT YEAR WAS . 1,220.39 CRORES AND THE INTEREST FREE ADVANCES WAS TO AN EXTENT OF . 107.80 CRORES AND INVESTMENTS . 524 CRORES. IT WAS SUBMISSION THA T THE ASSESSEE HAD ADEQUATE NON INTEREST BEARING FUNDS TO GIVE INTEREST FREE LOANS TO THE SISTER CONCERNS AND CONSEQUENTLY NO DISALLOWANCES UNDER SECTION 36(I)(III) WAS CALLED FOR. IN REPLY T HE LEARNED DEPARTMENTAL REPRESENTA TIVE VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND CIT(A) 53 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS IT IS NOTICE D THAT FOR THE RELEVANT ASSESSMENT YEAR THE ASSESSEE HAD ADEQUATE NONINTEREST BEARING FUNDS TO GIVE INTEREST FREE LOANS TO T HE SISTER 22 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. CONCERNS, R ESPECTFULLY FOLLOWING OUR DECISION IN C.O.NO . 38/PNJ/2014 FOR THE ASSESSMENT YEAR 2009 10 THE DISALLOWANCES AS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED CIT(A) STANDS DELETED. IN THE RESULT THE GROUNDS FROM 18 TO 21 ST ANDS ALLOWED. 54 . IN RESPECT OF THE PART E & F GROUNDS FROM 22 TO 24, IT WAS FAIRLY AGREED BY BOTH THE SIDES THAT THE ISSUES WAS IN RESPECT OF THE DISALLOWANCE OF THE LOSS ON ACCOUNT OF THE DIMUNITION IN THE VALUE OF THE FERTILIZER BONDS. IT WAS FAIRLY AGREED BY BOTH THE SIDES THAT THE SUBMISSIONS IN RESPECT OF THE SAID GROUNDS WERE IDENTI CAL TO THE SUBMISSION IN RESPECT TO THE GROUND NO. 3 OF THE C.O.NO. 37/PNJ/2014 FOR THE ASSESSMENT YEAR 2008 - 09. 55 . WE HAVE CONSIDERED THE SUBMISSIONS. A S WE HAVE ALREADY HELD THAT THE REAL LOSS ON THE SALE / REDEMPTION OF THE FERTILIZER BONDS IS TO BE ALLOWED IN THE YEAR OF SALE / REDEMPTION WHEN DECIDING THE GROUND N O .3 OF THE C.O.NO.37/PNJ/2014 FOR THE ASSESSMENT YEAR 2008 - 09 ON IDENTICAL FINDINGS THE A SSESSING OFFICER IS DIRECTED TO GRANT THE ASSESSEE THE REAL LOSS IN THE YEAR THE FERTILIZER BONDS ARE S OLD / REDE EMED . IN THE RESULT GROUND N O . 2 2 TO 24 STANDS PARTLY ALLOWED. 56 . IN RESPECT OF PART G GROUND 25 AND 26 , IT WAS SUBMITTED THAT THE ISSUE WAS A GAINST THE ACTION OF THE LEARNED CIT(A) IN CONFIRMING THE ADDITIONS MADE BY THE ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SECTION 41(1) ON ACCOUNT OF CESS AT ION LIABILITY. IT WAS SUBMISSION THAT THERE WERE CERTAIN TRADE LIABILITY WHICH WAS BEING CARRIED FORWARD FOR SUBSTANTIAL NUMBER OF YEARS. IT WAS SUBMISSION THAT THE ASSESSING OFFICER HAD INVOKED THE SECTION 41(1) AND TREATED THE SAME AS CESS ATION OF LIABILITY AND ADDED THE SAME TO THE TOTAL INCOME OF T HE ASSESSEE. IT WAS A SUBMISSION THAT AFTER COMPLETION OF THE ASSESSMENT SOME OF THE AMOUNTS HAVE BEEN PAID AND SOME OF THE AMOUNT STILL CONTINUES . IT WAS 23 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. A SUBMISSION THAT UNILATERAL A CT CANNOT BE TAKEN BY THE ASSESSEE IN RESPECT OF THE SUNDRY CREDITORS . THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE PLACED RELIANCE UPON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. BHOGILAL RAMJIBHAI ATARA 222 TAXMAN 313(GUJ ), CIT VS. JAIN EXPORTS PVT. LTD. 35 TAXMANN.COM 540(DELHI), CIT VS NITIN GARG 208 TAXMAN 16 (GUJ.) AND CIT VS. HOTEL EXCELISIOR LTD. 20 TAXMANN.COM 295 (DELHI) . I N REPLY THE LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESS ING OFFICER AND CIT (A). 57 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMITTEDLY THESE ARE TRADE CREDITORS . THE ASSESSEE DOES NOT HAVE LIBERTY TO WRITE OFF THE CREDITORS UNTIL AND UNLESS THE CREDITORS TH EMSEL VES WRI T E OFF THE AMOUNT . IN ANY CASE THESE ARE NOT LIABILITIES WHICH CAN BE TREATED AS BEING BARRED BY LIMITATION ON ACCOUNT OF THE E FFLUX OF TIME LEADING TO THE EXPIRY OF PERIOD OF LIMITATION. AS LONG AS THE LIABILITIES ARE SHOWN IN THE BOOKS THE PERIOD OF LIMITATION DOES NOT EXPIR E . IN THE CIRCUMSTANCES RESPECTFULLY FOLLOWING THE PRINCIPLE LAID DOWN BY THE HONBLE GUJARAT HIGH COURT AND THE HONBLE DELHI HIGH COURT REFEREED TO (SUPRA) , THE ADDITIO N AS MADE BY THE ASSESSING OFFICER AND AS CONFIRMED BY THE LEARNED CIT(A) ON ACCOUNT OF THE CESS AT ION OF LIABILITY UNDER SECTION 41(1) STANDS DEL E TED. IN THE RESULT GROUND S 25 AND 26 OF THE ASSESSEE APPEAL STANDS ALLOWED. 58 . IN RESPECT OF PART H GROUND NO. 27, IT WAS SUBMITTED BY THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT THE ISSUE WAS AGAINST THE ACTION OF THE LEARNED CIT(A) IN CONFIRMING THE DISALLOWANCE ON EXPENSES CLAIMED ON ACCOUNT OF PARTICIPATION IN SOCIAL ACTIVITIES AROUND FACTORY AND ON ACCOUNT OF GIFTS TO BUSINESS ASSOCIATES UNDER SECTION 37(1) OF THE ACT. THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE EXPENSES WERE ON ACCOUNT OF THE VARIOUS 24 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. SOCIAL ACTIVITIES WHICH WERE AN OBLIGATION ON THE PART OF THE ASSESSEE TO MAINTAIN GOOD RELATIONSHIP WITH THE LOCAL POPULATION AND ON ACCOUNT OF VA RIOUS GIFTS GIVEN TO THE BUSINESS ASSOCIATES. IT WAS SUBMISSION THAT THE SAME IS LIABLE TO THE ALLOWED AS BUSINESS EXPENDITURE. IN REPLY LEARNED DEPARTMENTAL REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS NOT PROVIDED THE DETAILS OF THE P ERSONS TO WHOM THE GIFTS HAVE BEEN GIVEN. IT WAS SUBMISSION THAT THE DISALLOWANCES ARE LIABLE TO BE CONFIRMED. 59 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMITTEDLY THE ASSESSEE HAS NOT BEEN ABLE TO PLACE BEFORE US THE DETAILS OF THE PERSONS TO WHOM THE GIFTS HAVE BEEN GIVEN. IN FACT EVEN THE ASSESSING OFFICER H AS DISALLOWED THE SAME ONLY ON THE GROUND THAT THE ASSESSEE HAS FAILED TO SUBMIT THE DETAILS AS TO WHOM THE GIFTS WERE GIVE N . THIS BEING SO THE FINDING OF THE LEARNED CIT(A) AND THAT THE ASSESSI NG OFFICER IN RESPECT OF THE DISALLOWANCES STANDS CONFIRMED. IN THE RESULT GROUND NO 27 OF THE ASSESSEE APPEAL STANDS DISMISSED. 60 . IN RESPECT OF THE PART H GROUND NO. 28 IT WAS FAIRLY AGREED BY BOTH THE SIDES THA T THE ISSUE WAS AGAINS T THE NON GRANTING OF TDS CREDIT . IT WAS FAIRLY AGREED THAT THE ISSUE MAY BE RESTORED TO THE FILE OF THE ASSESSING OFFICER BY GRANTING THE ASSE SS EE ADEQUATE OPPORTUNITY TO PRODUCE THE SAME. 61 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS WE HAVE ALREADY DECIDED THIS ISSUE I N RESPECT OF THE GROUND N O . 5 IN RESPECT OF THE C.O.NO.37/PNJ/2014 FOR THE ASSESSMENT YEAR 2008 09 AND HAVE RESTORED THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER AFTER GRANTING ADEQUATE OPPORTUNITY TO ASSESSEE TO SUBSTANTIATE ITS CLAIM , ON IDENTICAL F INDING THIS ISSUE FOR THE RELEVANT ASSESSMENT YEAR ALSO STANDS RESTORED 25 ITA NOS. 328 & 329 /PNJ/2014 CO NO.37 & 38 / PNJ/2014 & ITA NO.91/PAN/2016 M/S ZUARI GLOBAL LTD. TO THE FILE OF THE ASSESSING OFFICER FOR RE - ADJUDICATION . IN THE RESULT GROUND NO .28 STANDS PARTLY ALLOWED F OR STATISTICAL PURPOSES. 62 . I N REGARD TO THE PART - J GROUND NO. 28, IT IS AGA INST THE PENALTY PROCEEDINGS UNDER SECTION 27(1)(C) OF THE ACT. AS THE SAME IS PREMATURE AND CONSEQUENTLY DISMISSED. 63 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 31 ST MARCH, 201 7 SD/ - SD/ - (P.K.BANSAL) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 31 ST MARCH, 2017 . VSSGB / - COPY TO: 1 . THE ASSESSEE. 2 . THE REVENUE. 3 . THE CIT 4 . THE CIT(A), 5 . THE D.R. 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI