DCIT(LTU), New Delhi V. M/s. C&S Electric Ltd, New Delhi

ITA 3364/DEL/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4389 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 26-07-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 27-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Revised return
• Section: 43B; 14A; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES B DELHI BEFORE SHRI P.K.BANSAL, VICE PRESIDENT AND SH. AMIT SHUKLA, JUDICIAL MEMBER ITA NO.3143/DEL/2013 (ASSESSMENT Y EAR: 2008-09) ITA NO.3364/DEL/2013 (ASSESSMENT YEAR: 2008-09) APPELLANT BY SH. ANIL BHALLA, CA RESPONDENT BY SH. ANSHU PRAKASH, SR.DR DATE OF HEARING 21.09.2017 DATE OF PRONOUNCEMENT 22.09.2017 ORDER PER P.K.BANSAL, VICE PRESIDENT THESE CROSS APPEALS HAVE BEEN FILED AGAINST THE ORD ER DATED 31.03.2013 OF CIT(A)-LTU, NEW DELHI PERTAINING TO 2008-09 AY. 2. GROUND NO.1 TAKEN BY THE REVENUE AS WELL AS GROU ND NO.1 & 1.2 BY THE ASSESSEE RELATE TO THE SAME ISSUE I.E THE DEDUCTION AVAILABLE U/S 80IC OF THE INCOME TAX ACT, 1961 (IN SHORT ACT). C & S ELECTRIC LTD., (FORMERLY KNOWN AS CONTROLS & SWITCHGEAR CO.LTD.), 222, OKHLA INDUSTRIAL ESTATE, PHASE-III, NEW DELHI. PAN-AAACC0909K VS DCIT LTU, NEW DELHI. (APPELLANT) (RESPONDENT) DCIT (LTU), NBCC PLAZA, PUSHP VIHAR, SECTOR-III, NEW DELHI-110017. VS C &S ELECTRIC LTD., (FORMERLY KNOWN AS M/S. CONTROL & SWITCHGEAR CO. LTD.), 22, OKHLA INDUSTRIAL ESTATE, NEW DELHI-110020. PAN-AAACC0909K (APPELLANT) (RESPONDENT) ITA NO.3143 & 3364/DEL/2013 2 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y CONSIDERED THE ORDER OF THE TAX AUTHORITIES BELOW. WE NOTED THAT THE ASSES SEE HAS CLAIMED THE DEDUCTION U/S 80IC AMOUNTING TO RS.17,77,02,892/-. THE AO OU T OF THE SAID CLAIM REDUCED THE DEDUCTION BY RS.18,19,179/- WHEN THE MATTER WEN T BEFORE THE LD. CIT(A), LD. CIT(A) SUSTAINED THE ACTION OF THE AO WHILE REDUCIN G THE DEDUCTION U/S 80IC TO THE EXTENT OF RS.10,28,461/- OUT OF RS.17,77,02,892 /-. THE ASSESSEE CLAIMED THE DEDUCTION U/S 80IC IN RESPECT OF BT DIVISION, PANEL DIVISION AND BD DIVISION. THE AO REDUCED THE CLAIM OUT OF THE BT DIVISION AND PANEL DIVISION BY RS.6,50,339/- AND RS.11,68,840/-. BY APPLYING THE PROVISION OF SECTION 80IA(8) AS ACCORDING TO HIM, THE TRANSFER FROM ONE UNIT TO ANOTHER UNIT SHOULD HAVE BEEN DONE AT MARKET VALUE. WHEN THE MATTER WENT BEFORE THE LD. CIT(A), LD. CIT(A) CONFIRMED THE REDUCTION OF THE DEDUCTION U/S 80IC B Y RS.2,34,511/- IN RESPECT OF BT DIVISION AND RS.7,93,950/- FOR PANEL DIVISION. IGNORING THE FACT THAT THE ASSESSEE CLAIMED DEDUCTION U/S 80IC ONLY FOR A SUM OF RS.28,405/- FOR THE PANEL DIVISION. 4. LD.AR BEFORE US RELIED ON THE DECISION OF THE MANSAROVER BUILDERS PVT. LTD. IN ITA NO.4193/DEL/2012 WITH REFERENCE TO SECTION 40A(2), IT WAS HELD THAT THE OBLIGATION IS ON THE AO TO DETERMINE THE MARKET VAL UE FIRST. 5. THE ASSESSEE ALSO RELIED BEFORE US UNDER RULE 8 OF CENTRAL EXCISE VALUATION RULES, 2000 IN WHICH IT HAS BEEN MENTIONED THAT REA SONABLE VALUE FOR INTER UNIT TRANSFER HAS DETERMINED BY THE GOVERNMENT OF INDIA IS COST PLUS 10%. 6. LD.DR EVEN THOUGH CONTENDED THAT THE ASSESSEE HA S NOT TAKEN THIS PLEA BEFORE THE AO BUT WE FOUND THAT THE ASSESSEE HAS TA KEN THIS PLEA BEFORE THE AO AND THE LD. CIT(A). WE ALSO NOTED THAT THE COMPONE NT TRANSFER TO PANEL UNIT ARE ITA NO.3143 & 3364/DEL/2013 3 CUSTOMER SPECIFIC PRODUCT AND OF DIFFERENT STRENGTH AND SPECIFICATION THEREFORE, THEY CANNOT BE COMPARED WITH THE SIMILAR COMPONENT S COMPANY SOLD IN THE OPEN MARKET. THE AO HAD MADE THE ADJUSTMENT DUE TO THE MARKET VALUE OF THE INTER UNIT TRANSFER BUT COULD NOT DISCHARGE THE ONUS WHI CH IN OUR OPINION LIE ON HIM TO ASCERTAIN THE MARKET VALUE IN RESPECT OF THE COMPON ENT WHICH WERE TRANSFERRED BY THE ASSESSEE FROM ONE UNIT TO THE OTHER UNIT. THE ONUS LIES ON THE AO TO BRING THE COMPARATIVE INSTANCE IF THE AO WAS NOT ABLE TO BRIN G ANY COMPARATIVE INSTANCE, HE SHOULD ADOPTED THE MARKET VALUE ON THE BASIS OF TH E VALUE AS DETERMINED BY THE GOVERNMENT OF INDIA, EXCISE DEPARTMENT I.E COST PLU S 10%. IGNORING THIS VALUE IN OUR OPINION, WILL TANTAMOUNT TO THAT PROVISION OF S ECTION 80IA(A) OF THE ACT HAS NOT BEEN CORRECTLY APPLIED BY THE AO AND, THEREFORE ON THE BASIS ITSELF IGNORING THE ALTERNATE CONTENTIONS OF THE ASSESSEE THAT IF ANY D EDUCTION HAS TO BE REDUCED U/S 80IC IN RESPECT OF PANEL DIVISION THAT HAS TO BE RE DUCED ONLY BY RS.28,405/-. WE ALLOW GROUND NO.1 TAKEN BY THE ASSESSEE AND SET ASI DE THE ORDER OF THE LD.CIT(A) CONFIRMING THE REDUCTION OF THE DEDUCTION CLAIMED U /S 80IC OF THE ACT BY RS.10,28,461/-. THUS, GROUND NO.1 AND 1.2 TAKEN BY THE ASSESSEE ARE ALLOWED WHILE GROUND NO.1 TAKEN BY THE REVENUE STANDS DISMI SSED. 7. GROUND NO.1.3 SINCE NOT PRESSED BY THE ASSESSEE STANDS DISMISSED AS NOT PRESSED. GROUND NO.2 TAKEN BY THE REVENUE RELATES TO THE DELETION OF THE ADDITION OF RS.35,83,048/- MADE BY THE AO ON ACCOUNT OF THE REDUCTION IN THE CLAIM OF THE DEDUCTION U/S 10B WHILE GROUND NO.2 TAKEN BY THE AS SESSEE RELATE TO THE CLAIM OF THE DEDUCTION U/S 10B OF THE ACT IN RESPECT OF THE DISALLOWANCE MADE U/S 40A AMOUNTING TO RS.7,92,300/-. ITA NO.3143 & 3364/DEL/2013 4 8. SINCE BOTH THE GROUNDS RELATE TO THE CLAIM OF TH E DEDUCTION U/S 10B, THEY ARE DISPOSED OFF TOGETHER. 9. SO FAR AS, THE GROUND TAKEN BY THE ASSESSEE IS C ONCERNED, WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME AND W E ALSO GONE THROUGH TO THE PROVISION OF SECTION 10B(I) OF THE ACT. IT IS NOT DENIED THAT THE DISALLOWANCE OF RS.7,92,300/- WAS MADE U/S 40A OF THE ACT WHEREAS T HE DISALLOWANCE IS SO MADE, THE PROFIT AND GAINS OF THE BUSINESS OR PROFESSION HAS COMPUTED UNDER THE SAID HEAD WILL AUTOMATICALLY INCREASE. SECTION 10B(I) A LLOWS THE DEDUCTION ON THE PROFITS AND GAINS COMPUTED UNDER THE HEAD INCOME FR OM BUSINESS OF THE ELIGIBLE UNIT IN ACCORDANCE WITH THE PROVISION OF SECTION 30 TO 43D OF THE INCOME TAX ACT. THIS VIEW HAS BEEN TAKEN BY THIS TRIBUNAL IN THE FO LLOWING CASES:- (I) GEM PLUS JEWELLERY INDIA LTD. 194 TAXMAN 192 (BOMBA Y) PB 981-988 (981, 983, 987); (II) SAHASRA ELECTRONICS PVT.LTD., ITA NO.1951/DEL/2009- AY 2005-06; AND (III) ACIT VS JEWELLERY SOLUTIONS INTERNATIONAL PVT. LTD. [2009] 28 SOT 405 (ITAT, MUMBAI BENCH) 10. NO CONTRARY DECISION WAS BROUGHT TO OUR KNOWLED GE. WE, THEREFORE, DIRECT THE AO TO ALLOW THE DEDUCTION U/S 10B IN RESPECT O F THE DISALLOWANCE MADE U/S 40A AMOUNTING TO RS.7,92,300/-. THUS, THIS GROUND OF THE ASSESSEE IS ALLOWED. 11. NOW, COMING TO THE GROUND TAKEN BY THE REVENUE, WE NOTED THAT IN THIS CASE, THE AO WHILE COMPUTING THE PROFIT OF THE ELIG IBLE UNIT FOR DEDUCTION U/S 10B ALLOCATED THE CORPORATE EXPENSES WHILE THE ASSESSEE WAS OF THE VIEW THAT NEITHER THE RECEIPT NOR THE EXPENSE WHICH HAS NOT RELATED T O THE OPERATION OF THE UNDERTAKING, CAN FIND PLACE IN THE COMPUTATION OF THE PROFITS OF 100% EOU. THE AO, THEREFORE, REDUCED THE DEDUCTION U/S 10B BY RS. 35,83,048/- BUT THE LD. CIT(A) DELETED THE SAID REDUCTION MADE BY THE AO. ITA NO.3143 & 3364/DEL/2013 5 12. WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CO NSIDERED THE SAME. WE NOTED THAT IN THE CASE OF THE ASSESSEE, THE PROFITS OF THE ELIGIBLE UNIT WERE NOT HIGHER IN COMPARISON WITH THE OTHER BUSINESS. GP R ATE OF ELIGIBLE UNIT WAS 25.20% AS COMPARED TO THE GP RATE OF OTHER UNITS IN AGGREG ATE AT 29.97%. WHILE THE NET PROFIT RATIO OF THE ELIGIBLE UNIT WAS 5.87% AS COMP ARED TO THE NET PROFIT OF OTHER UNITS AT 15.09%. WE NOTED THAT IN THE CASE OF CATVISION PRODUCTS LTD. 84 TTJ (DEL) 241. THIS TRIBUNAL HAS HELD THAT ONLY THE DIRECT EXPEND ITURE HAS TO BE CONSIDERED WHILE WORKING OUT THE PROFIT FOR THE PURPOSE OF DED UCTION U/S 80IC. MUMBAI BENCH OF THE ITAT ALSO IN THE MATTER OF DCW LTD. 132 TTJ (MUM.) 442 HELD FOR THE PURPOSE OF SECTION 80IA THAT INDIRECT EXPENSES CANN OT BE RECKONED IN THE COMPUTATION OF DETERMINING THE PROFITS OF THE ELIGI BLE UNDERTAKING. LD. DR EVEN THOUGH VEHEMENTLY REFERRED TO THE ORDER OF THE AO B UT COULD NOT BROUGHT TO OUR KNOWLEDGE ANY CONTRARY DECISION. WE, THEREFORE, CO NFIRMED THE ORDER OF LD. CIT(A) IN DELETING THE REDUCTION MADE BY THE AO IN THE DED UCTION U/S 10B OF THE ACT AMOUNTING TO RS.35,83,048/-. THUS, GROUND NO.2 OF THE REVENUE STANDS DISMISSED. 13. GROUND NO.3 OF THE REVENUE RELATED TO THE RESTR ICTING THE DISALLOWANCE OF RS.4,23,507/- U/S 14A R.W. RULE 8D OF THE ACT. 14. WE HEARD THE RIVAL SUBMISSIONS ON THIS GROUND A ND WE NOTED THAT THE ASSESSEE WHILE COMPUTING THE INCOME DISALLOWED A SU M OF RS.4,23,507/- U/S 14A BUT THE AO WITHOUT RECORDING ANY SATISFACTION APPLI ED RULE 8D AND INCREASE THE DISALLOWANCE BY RS.17,77,193/-. THIS IS SETTLED LA W THAT NO DISALLOWANCE U/S 14A R.W. RULE 8D CAN BE MADE WITHOUT RECORDING THE SATI SFACTION BY THE AO U/S 14A(II) THAT THE CLAIM MADE BY THE ASSESSEE IS NOT CORRECT HAVING REGARD TO THE ACCOUNTS ITA NO.3143 & 3364/DEL/2013 6 OF THE ASSESSEE. EVEN WE NOTED THAT IN THIS CASE, THE ASSESSEE HAD CAPITAL AND RESERVE MUCH MORE THAN THE INVESTMENT. THE CAPITAL AND RESERVE AS ON 31.03.2007 WERE RS.1,17,79,62,711/- WHILE THE INVES TMENTS WERE ONLY RS.37,15,000/-. THEREFORE, IN VIEW OF THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF TAIKISHA ENGINEERING INDIA LTD. 370 ITR 338(332) [D EL.], NO DISALLOWANCE CAN BE MADE. WE, THEREFORE, CONFIRM T HE ORDER OF THE LD. CIT(A) TO RESTRICT THE DISALLOWANCE OF RS.4,23,507/-. 15. GROUND NO.4 IN ASSESSEES APPEAL AS WELL AS IN REVENUES APPEAL RELATED TO THE REDUCING AND SUSTENANCE OF THE DISALLOWANCE OUT OF THE FOREIGN TRAVEL EXPENSES. THE FACTS RELATING TO THIS GROUND ARE TH AT THE AO DISALLOWED 20% OF RS.16,76,438/- CLAIMED BY THE ASSESSEE AS FOREIGN T RAVEL EXPENSES. WHEN THE MATTER WENT BEFORE THE LD. CIT(A) BUT LD. CIT(A) RE STRICTED THE DISALLOWANCE TO 30% OF THE EXPENSES AGAINST FOREIGN CURRENCY AND CR EDIT CARDS I.E. TO RS.11,55,832/-. BOTH THE ASSESSEE AS WELL AS REVE NUE HAS COME IN APPEAL. 16. WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CO NSIDERED THE SAME. WE NOTED THAT THE DISALLOWANCE WAS MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) PARTLY ON THE BASIS OF THE EXPENSES INCURRED FOR PE RSONAL PURPOSES. IT IS NOT DENIED THAT THE ASSESSEE HAS PAID FRINGE BENEFIT TA X ON THESE EXPENSES. SINCE FRINGE BENEFIT TAX HAS BEEN PAID, THEREFORE, NO DIS ALLOWANCE CAN BE MADE ON ACCOUNT OF THE PERSONAL EXPENSES. OUR AFORESAID VI EW IS DULY SUPPORTED BY THE DECISION OF DELHI BENCH OF THIS TRIBUNAL IN ITA NO.805/DEL/2013 FOR AY 2009-10 IN THE CASE OF AERO ENTERPRISES. NO CONTRARY DECISION HAS BEEN BROUGHT TO OUR KNOWLEDGE EVEN THOUGH THE PROVISION OF SECTION 115W IS CLEAR IN THIS REGARD. WE, THEREFORE, DELETE THE DISALLOWANCE OF RS.11,55,832/ -. THUS, GROUND NO.4 RAISED ITA NO.3143 & 3364/DEL/2013 7 BY THE ASSESSEE IS ALLOWED WHILE GROUND NO.4 TAKEN BY THE REVENUE STANDS DISMISSED. 17. GROUND NO.5 IN REVENUES APPEAL RELATES TO THE CLAIM OF THE DEPRECIATION ON GOODWILL AMOUNTING TO RS.5,35,254/-. THE AO DID NO T ACCEPT THE CONTENTION OF THE ASSESSEE THAT THE GOODWILL IS ELIGIBLE FOR DEPRECIA TION AS IN TANGIBLE ASSETS. WHEN THE MATTER WENT BEFORE THE LD. CIT(A), THE LD. CIT( A) ALLOWED THE DEPRECIATION TO THE ASSESSEE. 18. WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CO NSIDERED THE ORDER OF THE TAX AUTHORITIES BELOW. IN OUR OPINION, THE ISSUE INVOL VED IS DULY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THIS TRIBUNAL IN TH E CASE OF CONTROLS & SWITCHGEAR CONTRACTORS LTD. IN ITA NO.511/DEL/2011 FOR THE AY 2007-08. NO CONTRARY DECISION WAS BROUGHT TO OUR KNOWLEDGE. WE, THEREFO RE, CONFIRM THE ORDER OF THE LD. CIT(A) ALLOWING THE DEPRECIATION ON GOODWILL OF THE ASSESSEE, THUS THIS GROUND IS ALLOWED. 19. NOW, THERE REMAINS GROUND NOS.3 & 5 AND ADDITIO NAL GROUND TAKEN BY THE ASSESSEE BEFORE THE LD. CIT(A). GROUND NO.3 RELATE S TO THE DISALLOWANCE OF LEAVE ENCASHMENT U/S 43B OF THE INCOME TAX ACT. THE FACT S RELATING TO THIS GROUND ARE THAT THE ASSESSEE CLAIMED A SUM OF RS.23,60,025/- O N ACCOUNT OF THE LEAVE ENCASHMENT PAID U/S 43B IN THE REVISED RETURN, THE CLAIM WAS FOR RS.27,13,432/-. THE AO NOTED THAT THE ASSESSEE HAS DISALLOWED U/S 43B A SUM OF RS.1,71,613/- AND HAS CLAIMED AN AMOUNT EXCEEDING BY RS.7231/-. THE AO, THEREFORE, DISALLOWED A SUM OF RS.7,231/-. THE ASSESSEE ALSO VIDE LETTER CLAIMED BEFORE THE AO, LEAVE ENCASHMENT NOT DEBITED TO THE P&L ACCOUNT TO RS.16,54,901/-. WHEN THE MATER SENT BEFORE THE LD. CIT(A), THE LD. CIT(A ) CONFIRMED THE DISALLOWANCE OF ITA NO.3143 & 3364/DEL/2013 8 RS.7,231/- STATING THAT THE ASSESSEE DID NOT PRESS THE SAME BEFORE HIM. LD. AR BEFORE US BY REFERRING TO THE LETTER DATED 15.05.20 12 CONTENDED THAT HE AMENDED THE GROUND OF APPEAL BEFORE THE LD. CIT(A) BUT THE LD. CIT(A) DID NOT GIVE ANY FINDING ON THE SAID GROUND. 20. WE HEARD THE RIVAL SUBMISSIONS AND CONSIDERED T HE ORDER OF THE TAX AUTHORITIES BELOW. WE NOTED THAT VIDE LETTER DATED 15.05.2012, THE ASSESSEE HAS AMENDED THE GROUND OF APPEAL RELATING TO THE CLAIM OF THE LEAVE ENCASHMENT U/S 43B BY TAKING THE FOLLOWING GROUND:- 1. AMENDMENT TO GROUNDS OF APPEAL 1.1. THE ASSESSEE COMPANY IS AGGRIEVED BY AN ADDITION O N ACCOUNT OF LEAVE ENCASHMENT TO THE EXTENT OF RS.1,71,613/- AND RS.16 ,54,901/. RS.1,71,613/- REPRESENTS AMOUNT DISALLOWED IN EXCES S U/S 43B OF THE ACT AS PER INCORRECT CALCULATION SUBMITTED AND RS.1 6,54,901/- HAS BEEN EXCESS DISALLOWED BY VIRTUE OF THE FACT THAT THE IM PUGNED AMOUNT WAS NOT DEBITED TO THE PROFIT & LOSS ACCOUNT, BUT WAS D EBITED TO GENERAL RESERVE AS IT WAS ON ACCOUNT OF LIABILITY FOR THE P AST YEARS. THE ASSESSEE COMPANY IS THEREFORE AGGRIEVED BY THE INCO RRECT COMPUTATION OF ASSESSABLE INCOME. 21. IN OUR OPINION, THE IMPUGNED GROUND TAKEN BY TH E ASSESSEE IS A LEGAL GROUND AND HAS TO BE ADJUDICATED BY THE LD. CIT(A) AS THE ASSESSEE CAN TAKE THE LEGAL GROUND FOR THE FIRST TIME BEFORE THE APPELLAT E AUTHORITY IN VIEW OF THE DECISION OF NTPC LTD. VS CIT 229 ITR 383(SC). SINCE THIS GROUND HAS NOT BEEN ADJUDICATED BY THE LD.CIT(A), WE THEREFORE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND RESTORE THE SAID ISSUE ALONGWITH ADDITIONAL GRO UND TAKEN BY THE ASSESSEE BEFORE THE LD. CIT(A)TO THE FILE OF THE LD. CIT(A) WITH THE DIRECTION THAT THIS GROUND TO BE DECIDED ON MERIT AFTER GIVING PROPER AND SUFF ICIENT OPPORTUNITY OF HEARING TO THE ASSESSEE. THUS, THIS GROUND IS STATISTICALLY A LLOWED. ITA NO.3143 & 3364/DEL/2013 9 22. GROUND NO.5 IN ASSESSEES APPEAL IS RELATED TO THE CLAIM OF DEPRECIATION AMOUNTING TO RS.6,68,071/-. 23. AFTER HEARING RIVAL SUBMISSIONS AND GOING THROU GH THE ORDER OF THE TAX AUTHORITIES BELOW, WE NOTED THAT THE ASSESSEE IN TH E ORIGINAL COMPUTATION OF INCOME REDUCED A SUM OF RS.6,68,071/- OUT OF THE CL AIM OF DEPRECIATION IN RESPECT OF BUILDING FOR WHICH THE ASSESSEE WAS DECLARING I NCOME UNDER THE HAD INCOME FROM HOUSE PROPERTY BUT WE NOTED DURING THE IMPUG NED ASSESSMENT YEAR, AFTER THE MERGER, THE ASSESSEE WAS NOT EARNING ANY RENT A ND THE BUILDING BEING USED BY THE ASSESSEE HIMSELF, THEREFORE, THE ASSESSEE FILED THE REVISED COMPUTATION OF INCOME AND CLAIMED THE DEPRECIATION ON THE BUILDING AMOUNTING TO RS.6,68,071/-. THE ASSESSEE HAS ALSO EXPLAINED THE REASONS FOR THE SHORT CLAIM OF THE DEPRECIATION TO THE AO SINCE THE BUILDING WAS NOT MORE USED FOR RENTAL PURPOSE. WE, THEREFORE, SET ASIDE THE ORDER OF LD. CIT(A) ON THIS ISSUE AND ALLOW THE DEPRECIATION TO THE ASSESSEE AMOUNTING TO RS.6,68071/-. THUS, THE GROU ND NO.5 TAKEN BY THE ASSESSEE IS ALLOWED. 24. GROUND NO.6 RELATES TO NOT ADJUDICATING THE ADD ITIONAL GROUND WITH REGARD TO THE GRATUITY AMOUNTING TO RS.10,62,376/- BEFORE THE LD. CIT(A). 25. WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CO NSIDERED THE SAME. WE NOTED THAT VIDE LETTER DATED 15.05.2012, THE ASSESS EE HAS TAKEN THE FOLLOWING ADDITIONAL GROUND BEFORE THE LD. CIT(A) RELATING TO THE CLAIM OF THE GRATUITY AMOUNTING TO RS.10,62,376/-:- 2. ADDITIONAL GROUND 2.1. THE ASSESSEE COMPANY IS AGGRIEVED BY AN INCORRECT COMPUTATION OF ASSESSED INCOME ON ACCOUNT OF ADDITION MADE IN RESP ECT OF PROVISION FOR GRATUITY, IN AS MUCH A SUM OF RS.10,62,736/- WHICH WAS INFACT DEBITED ITA NO.3143 & 3364/DEL/2013 10 TO GENERAL RESERVE BEING LIABILITY PERTAINING TO EA RLIER YEARS AND NOT DEBITED TO PROFIT & LOSS ACCOUNT. 26. WE NOTED THAT THE SAID ADDITIONAL GROUND IS A L EGAL GROUND BUT THE LD. CIT(A) HAS NOT GIVEN ANY FINDING ON THIS GROUND. W E ACCORDINGLY SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THIS ISSUE TO T HE FILE OF THE LD. CIT(A)WITH THE DIRECTION THAT THE LD. CIT(A) SHALL ADJUDICATE THI S GROUND AND DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING THE PROPER AND SUF FICIENT OPPORTUNITY TO THE ASSESSEE. 27. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED WHILE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL P URPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 22 SEPTEMBER, 2017. SD/- SD/- (AMIT SHUKLA) (P.K.BANSAL) JUDICIAL MEMBER VICE PRESIDENT DATE:- 22.09.2017 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSI STANT REGISTRAR ITAT, DELHI