I P RINGS LTD, KANCHEEPURAM V. DCIT, CORP CIT-2(2), CHENNAI

ITA 3502/CHNY/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6129 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 26-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: VIJAYARAGHAVAN
• Keywords: Depreciation; Additional depreciation; Question of law; Revenue expenditure; Capital expenditure
• Section: 32(1)(iia); 250; 32

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C BENCH, CHENNAI [ , , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ I.T.A.NOS.3539 & 3540/CHNY/2018 ( [ [ / ASSESSMENT YEARS:2013-14 & 2014-15) THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 2(2), CHENNAI. VS M/S. I.P. RINGS P. LTD., NO.D11/D12, INDUSTRIAL ESTATE, MARAIMALAI NAGAR, KANCHIPURAM 603 209. PAN: AAACI0908C ( /APPELLANT) ( /RESPONDENT) & ./ I.T.A.NOS.3501 & 3502/CHNY/2018 ( [ [ / ASSESSMENT YEARS:2013-14 & 2014-15) M/S. I.P. RINGS P. LTD., NO.D11/D12, INDUSTRIAL ESTATE, MARAIMALAI NAGAR, KANCHIPURAM 603 209. VS THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 2(2), CHENNAI. PAN: AAACI0908C ( /APPELLANT) ( /RESPONDENT) /REVENUE BY : SHRI CLEMENT RAMESH KUMAR, ADDL.CIT [ /ASSESSEE BY : SHRI VIJAYARAGHAVAN, ADVOCATE /DATE OF HEARING : 06.08.2019 /DATE OF PRONOUNCEMENT : 06.08.2019 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER: ITA NO.3539 OF 2018 IS AN APPEAL FILED BY THE REVENUE AND ITA NO.3501 OF 2018 IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE 2 ITA NOS. 3539, 3540, 3501 & 3502/CHNY/2018 ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-6, CHENNAI IN ITA NO.103/CIT(A)-6/2016-17 DATED 28.09.2018 FOR THE ASSESSMENT YEAR 2013-14. ITA NO.3540 OF 2018 IS AN APPEAL FILED BY THE REVENUE AND ITA NO.3502 OF 2018 IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-6, CHENNAI IN ITA NO.359/CIT(A)-6/2016-17 DATED 28.09.2018 FOR THE ASSESSMENT YEAR 2014-15. AS THE FOUR APPEALS RELATE TO THE SAME ASSESSEE AND HAVE CONNECTED ISSUES, ALL THE FOUR APPEALS ARE DISPOSED OF BY THIS COMMON ORDER. 2. SHRI R. VIJAYARAGHAVAN, REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI CLEMENT RAMESH KUMAR, REPRESENTED ON BEHALF OF THE REVENUE. 3. IN RESPECT OF THE REVENUES APPEAL IN GROUND NOS.2.1 TO 2.3 FOR THE ASSESSMENT YEAR 2013-14 AND 2.1 TO 2.3 FOR THE ASSESSMENT YEAR 2014-15, AS ALSO GROUND NOS.2 TO 2.3 OF THE ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2013-14 AND GROUND NOS. 2 TO 2.3 OF THE ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2014-15, IT WAS SUBMITTED BY THE LD.AR THAT IN THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER HAD DISALLOWED ROYALTY PAID BY THE ASSESSEE TO 3 ITA NOS. 3539, 3540, 3501 & 3502/CHNY/2018 M/S. NIPPON PISTON RING CO. LTD., JAPAN. IT WAS THE SUBMISSION THAT THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 1999-00, 2003-04 TO 2005-06 AND 2010-11 & 2011-12, HAD FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SOUTHERN SWITCHGEAR LTD., REPORTED IN 232 ITR 359 (SC), HELD THAT 75% OF THE ROYALTY PAYMENT WAS TO BE TREATED AS REVENUE EXPENDITURE AND 25% OF THE ROYALTY PAYMENT WAS TO BE TREATED AS CAPITAL EXPENDITURE AND APPROPRIATE DEPRECIATION LIABLE TO BE ALLOWED. THE FINDING OF THE CO-ORDINATE BENCH IS AS FOLLOWS:- 7. WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MATERIAL ON RECORD AS WELL AS CASE LAW DISCUSSED BY THE LD. CIT(A) IN HIS ORDER AND CITED BY THE RIVAL SIDES IN THE LIGHT OF RELEVANT CLAUSES OF AGREEMENT AND FIND THAT THE LD. CIT(A), WHILE RELYING UPON THE DECISION OF THE HONBLE SUPREME COURTS DECISION IN THE CASE OF SOUTHERN SWITCHGEAR LTD. (SUPRA) (ORDER DATED 11.12.1997), HAS DIRECTED THE ASSESSING OFFICER TO TREAT 25% OF THE ROYALTY PAYMENT AS CAPITAL EXPENDITURE AND THE BALANCE 75% AS REVENUE EXPENDITURE AND THE ASSESSING OFFICER HAS FURTHER BEEN DIRECTED TO ALLOW APPROPRIATE DEPRECIATION ON THE 25% CAPITAL EXPENDITURE IN ACCORDANCE WITH LAW AND WHILE DOING SO, THE LD. CIT(A) HAS PREFERRED TO FOLLOW THE ABOVE DECISION, WHICH WAS PRONOUNCED LATER TO THAT OF CIT V. IAEC (PUMPS) LTD. 232 ITR 316 (SC) ( ORDER DATED 03.04.1997), WHICH ACCORDING TO HIM WOULD PREVAIL. 7.1 WE HAVE CONSIDERED THE ARGUMENTS OF RIVAL SIDES AND MATERIALS ON RECORD IN THE LIGHT OF PRECEDENT RELIED UPON. WE HAVE ALSO CONSIDERED THE BASIS AND REASONING AS GIVEN BY THE LD. CIT(A) IN GIVING PART RELIEF TO THE ASSESSEE. SO FAR AS THE FACTS OF THE CASE IN HAND AND POINT AT ISSUE DECIDED BY THE HONBLE MADRAS HIGH COURT IN THE CASE OF SOUTHERN 4 ITA NOS. 3539, 3540, 3501 & 3502/CHNY/2018 SWITCHGEARS LTD. (SUPRA) IS CONCERNED, IT IS ALMOST IDENTICAL AND SUCH DECISION OF THE HONBLE MADRAS HIGH COURT HAS FURTHER BEEN AFFIRMED BY THE HONBLE SUPREME COURT IN THE SAID CASE OF SOUTHERN SWITCHGEARS LTD. (SUPRA) AND THE LD. CIT(A) HAS FOLLOWED SUCH DECISION TO GIVE PART RELIEF TO THE ASSESSEE AND NO DISTINGUISHING FEATURE HAS BEEN POINTED BY THE LD. DR IN THIS REGARD. THEREFORE, WHILE CONCURRING WITH THE FINDING AND THE CONCLUSION OF THE LD. CIT(A) IN THIS REGARD, WE UPHOLD HIS ACTION AND DISMISS THIS GROUND IN ALL THE APPEALS OF THE REVENUE AS WELL AS OF ASSESSEE. 3.1 THE LD.CIT(A) FOR THE TWO RELEVANT ASSESSMENT YEARS HAD FOLLOWED THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE REFERRED TO, SUPRA AND HAD GIVEN IDENTICAL DIRECTIONS. AGAINST THE ACTION OF THE LD.CIT(A) IN HOLDING 25% AS LIABLE TO BE TREATED AS CAPITAL EXPENDITURE, THE ASSESSEE IS IN APPEAL AND AGAINST THE ACTION OF THE LD.CIT(A) IN DIRECTING 75% OF THE ROYALTY PAYMENT TO BE TREATED AS REVENUE EXPENDITURE IN NATURE, THE REVENUE IS IN APPEAL. IT WAS THE SUBMISSION THAT THESE ISSUES ARE NOW SQUARELY COVERED BY THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE ASSESSEES OWN CASE, REFERRED TO, SUPRA. 4. IN REPLY, THE LD.DR SUPPORTED THE ORDER OF THE ASSESSING OFFICER. IT WAS THE SUBMISSION THAT THE ENTIRE ROYALTY PAYMENT IS LIABLE TO BE TREATED AS CAPITAL EXPENDITURE. 5 ITA NOS. 3539, 3540, 3501 & 3502/CHNY/2018 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS NOTICED THAT THE ISSUE AS TO APPORTIONMENT OF THE ROYALTY PAID BY THE ASSESSEE TO M/S. NIPPON PISTON RING CO. LTD., HAS ALREADY BEEN ADJUDICATED BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL, IN THE ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEARS AND THE LD.CIT(A) HAS FOLLOWED JUDICIAL DISCIPLINE IN FOLLOWING THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEARS, WE FIND NO REASON TO INTERFERE IN THE ORDER OF THE LD.CIT(A). CONSEQUENTLY, THE SAME HAS BEEN UPHELD. 6. IN THE RESULT, GROUND NOS.2.1 TO 2.3 OF THE REVENUES APPEAL IN ITA NO.3539 & 3540/CHNY/2018 FOR THE ASSESSMENT YEARS 2013-14 & 2014-15 RESPECTIVELY AND GROUND NOS. 2 TO 2.3 OF THE ASSESSEES APPEAL IN ITA NO.3501 & 3502/CHNY2018 FOR THE ASSESSMENT YEARS 2013-14 & 2014-15 RESPECTIVELY, STANDS DISMISSED. 7. IN RESPECT OF GROUND NOS.3.1 AND 3.2 OF REVENUES APPEAL FOR THE ASSESSMENT YEAR 2013-14 AND THE IDENTICAL GROUNDS 3.1 AND 3.2 OF REVENUES APPEAL FOR THE ASSESSMENT YEAR 2014-15, IT WAS SUBMITTED BY THE LD.DR THAT THE ISSUE WAS AGAINST THE ACTION OF THE 6 ITA NOS. 3539, 3540, 3501 & 3502/CHNY/2018 LD.CIT(A) IN ALLOWING THE BALANCE OF THE ADDITIONAL DEPRECIATION CARRIED FORWARD FROM THE EARLIER ASSESSMENT YEAR. IT WAS FAIRLY AGREED BY BOTH THE SIDES THAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE IN ITA NO.2667 OF 2016 DATED 28.07.2017 FOR THE ASSESSMENT YEAR 2010-11, WHEREIN IN PARA NO.3.5 TO 3.8, IT HAS BEEN HELD AS FOLLOWS:- 3.5 WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IN THIS CASE, WITH REGARD TO THE CLAIM OF BALANCE ADDITIONAL DEPRECIATION, BY RELYING ON THE DECISION IN THE CASE OF LAKSHMI TECHNOLOGY AND ENGINEERING INDUSTRIES LTD. V. DCIT IN I.T.A. NO. 492/MDS/20 15 DATED 26.04.2016, THE ID. CIT(A) HAS DELETED THE DISALLOWANCE MADE ON THIS COUNT. IN THE CASE OF LAKSHMI TECHNOLOGY AND ENGINEERING INDUSTRIES LTD. V. DCIT (SUPRA), THE COORDINATE BENCHES OF THE TRIBUNAL FOLLOWED ITS OWN DECISION IN THE CASE OF AUTOMOTIVE COACHES & COMPONENTS LTD. V. OCIT IN I.T.A. NO. 1789/MDS/2014 FOR THE ASSESSMENT YEAR 2008-09 VIDE ORDER DATED 12.02.2016, WHEREIN, THE DECISIONS OF THE COCHIN BENCHES OF THE TRIBUNAL IN THE CASE OF APOLLO TYRES LTD. V. ACIT (SUPRA) OR THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT V. RITTAL INDIA PVT. LTD. (SUPRA) WERE FOLLOWED BY THE CHENNAI BENCHES OF THE TRIBUNAL TO ARRIVE AT A CONCLUSION THAT THE ASSESSEE IS ENTITLED TO CLAIM 50% OF ADDITIONAL DEPRECIATION IN THE SUCCEEDING YEAR WHEN THE PLANT AND MACHINERY WAS PUT IN USE FOR LESS THAN 180 DAYS IN THE PRECEDING PREVIOUS YEAR. 3.6 WITH REGARD TO THE RELIANCE PLACED BY THE ID. OR IN THE CASE OF MM FORGINGS LTD. (SUPRA), BY CONSIDERING SECTION 32(1) AS WELL AS 32(1)(IIA) OF THE ACT, THE HON'BLE JURISDICTIONAL HIGH COURT HAS HELD AS UNDER: '3. THE ASSESSING AUTHORITY BY APPLYING THE SECOND PROVISO TO SECTION 32 (1) OF THE ACT, RESTRICTED THE ALLOWABILITY OF THE 7 ITA NOS. 3539, 3540, 3501 & 3502/CHNY/2018 DEPRECIATION TO 50 PER CENT OF THE AMOUNT PERMISSIBLE UNDER SECTION 32(L)(IIA) OF THE ACT. ACCORDING TO THE APPELLANT, WHEN IT SATISFIED ALL THE CONDITIONS STIPULATED UNDER THE PROVISOS TO SECTION 32(L)(IIA) OF THE ACT, THE ASSESSING AUTHORITY OUGHT NOT TO HAVE RESTRICTED THE DEPRECIATION PERMISSIBLE UNDER THE SAID SECTION BY RESORTING TO THE SECOND PROVISO TO SECTION OF THE ACT. THE LEARNED COUNSEL HOWEVER FAIRLY POINTED OUT BEFORE US THAT IN THE SECOND PROVISO TO SECTION 32(1) OF THE ACT, THAT VERY CLAUSE (IIA) ITSELF WAS INSERTED BY FINANCE ACT, 2002 WITH EFFECT FROM 01.04.2003. THEREFORE, IT WAS IMPERATIVE THAT ON AND AFTER 01.04.2003, THE CLAIM OF THE ASSESSEE MADE UNDER SECTION 32(1)(IIA) OF THE ACT, HAD TO BE NECESSARILY ASSESSED BY APPLYING THE SECOND PROVISO TO SECTION 32(1) OF THE ACT. THEREFORE, WHEN THERE WAS STATUTORY STIPULATION PROVIDING FOR RESTRICTION TO 50 PER CENT OF THE AMOUNT ALLOWABLE UNDER SECTION 32(1) (IIA) OF THE ACT, NO FAULT CAN BE FOUND WITH THE CONCLUSION OF THE ASSESSING AUTHORITY AS WELL AS THAT OF THE APPELLATE AUTHORITY AND THE TRIBUNAL IN HAVING AFFIRMED THE ACTION OF THE ASSESSING AUTHORITY. WE, THEREFORE, DO NOT FIND ANY SCOPE TO ENTERTAIN THE SAID QUESTION OF LAW. 3.7 BY CONSIDERING THE PROVISIONS OF SECTIONS 32(1) AND 32(1)(IIA) OF THE ACT, THE HON'BLE JURISDICTIONAL HIGH COURT HAS HELD THAT WHEN THERE WAS STATUTORY STIPULATION PROVIDING FOR RESTRICTION TO 50% OF THE AMOUNT ALLOWABLE UNDER SECTION 32(1)(IIA) OF THE ACT, WHERE THE PLANT AND MACHINERIES WERE PUT TO USE LESS THAN 180 DAYS IN THAT PARTICULAR YEAR AND DID NOT SPEAK ANYTHING ABOUT THE ALLOWANCE OF BALANCE 50% OF THE ADDITIONAL- DEPRECIATION. 3.8 IN THE CASE OF CIT V. RITTAL INDIA PVT. LTD. (SUPRA), THE HON'BLE KARNATAKA HIGH COURT, AFTER EXTRACTING THE PROVISIONS OF SECTION 32(1)(IIA) OF THE ACT, FOUND THAT BENEFICIAL LEGISLATION HAS TO BE INTERPRETED LIBERALLY SO AS TO BENEFIT THE ASSESSEE, THE HON'BLE KARNATAKA HIGH COURT HAS ALSO FOUND THAT THE INTENTION OF THE LEGISLATION IS TO ALLOW ADDITIONAL BENEFIT. THE KARNATAKA HIGH COURT OPINED THAT THE PROVISO WOULD NOT RESTRAIN THE ASSESSEE FROM CLAIMING THE BALANCE OF THE BENEFIT OF ADDITIONAL DEPRECIATION IN THE SUBSEQUENT ASSESSMENT YEAR. IN VIEW OF THE ABOVE RATIO LAID DOWN BY HONBLE KARNATAKA HIGH COURT, THE 8 ITA NOS. 3539, 3540, 3501 & 3502/CHNY/2018 DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF M.M. FORGINGS LTD. (SUPRA), RELIED ON BY THE LD. DR CANNOT BE APPLIED BECAUSE, BY RESPECTFULLY AGREEING WITH THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT V. RITTAL INDIA (P.) LTD., IN A RECENT JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF BRAKES INDIA LTD. V. DCIT IN T.C.A. NO. 551 OF 2013 DATED 14.03.2017 DECIDED SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING THAT THE DIVISION BENCH OF HON'BLE MADRAS HIGH COURT IN THE CASE OF M.M. FORGINGS LTD. V ADDL. CIT (SUPRA) WAS NOT CONCERNED WITH THE ISSUE. THUS, WE ARE OF THE CONSIDERED OPINION THAT THE ID. CIT(A) HAS RIGHTLY FOLLOWED THE' DECISION OF THE TRIBUNAL IN THE CASE OF LAKSHMI TECHNOLOGY AND ENGINEERING INDUSTRIES LTD. V. DC IT (SUPRA) AND DIRECTED THE ASSESSING OFFICER TO ALLOW THE ADDITIONAL DEPRECIATION AS CLAIMED BY THE ASSESSEE. HENCE, THE GROUND RAISED BY THE REVENUE FOR BOTH THE ASSESSMENT YEARS IS DISMISSED. AND THE ASSESSING OFFICER HAD BEEN DIRECTED TO ALLOW THE ADDITIONAL DEPRECIATION AS CLAIMED BY THE ASSESSEE. THIS WAS ALSO BY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF BRAKES INDIA LTD., IN T.C.A. NO.551 OF 2013 DATED 14.03.2017. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS NOTICED THAT THE LD.CIT(A) HAS FOLLOWED THE JUDICIAL DISCIPLINE IN FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF BRAKES INDIA LTD., SUPRA AND IT IS ALSO NOTICED THAT THE ISSUE IS NOW SQUARELY COVERED BY THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE. IN THIS CIRCUMSTANCES, WE 9 ITA NOS. 3539, 3540, 3501 & 3502/CHNY/2018 FIND NO REASON TO INTERFERE IN THE ORDER OF THE LD.CIT(A) AND THE SAME STANDS UPHELD. CONSEQUENTLY, GROUND NOS. 3.1 TO 3.2 OF REVENUES APPEAL FOR THE ASSESSMENT YEARS 2013-14 & 2014-15 STANDS DISMISSED. IN THE RESULT THE APPEALS OF THE REVENUE STANDS DISMISSED. 9. IN RESPECT OF GROUND NO.3 OF THE ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2013-14 AND 2014-15, IT WAS SUBMITTED THAT THE SAME WAS AGAINST THE ACTION OF LD.CIT(A) IN CONFIRMING THE DISALLOWANCE OF THE DEDUCTION U/S.35(2AB). IT WAS THE SUBMISSION THAT THE R&D FACILITIES IN THE CASE OF THE ASSESSEE HAVE BEEN APPLIED BY THE DSIR FOR THE PURPOSE OF THE SECTION 35(2AB) AND SINCE THE EXPENDITURE INCURRED TOWARDS THE RESEARCH IS IN RESPECT OF THE APPROVED PROJECT, THE EXPENDITURE WAS LIABLE TO BE ALLOWED IN FULL. IT WAS THE SUBMISSION THAT EVEN ASSUMING THAT THE CLAIM IS FOUND INADMISSIBLE U/S.35(2AB) OF THE ACT, STILL THE ASSESSEE WOULD BE ENTITLED TO THE BENEFIT OF THE DEDUCTION U/S.35(1)(IV) OF THE ACT. IT WAS THE SUBMISSION THAT IN THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER HAD REJECTED THE CLAIM OF THE ASSESSEE U/S.35(2AB) OF THE ACT FOR WANT OF APPROVAL FROM DSIR IN FORM 3CL. IT WAS THE SUBMISSION THAT THE ASSESSING OFFICER NOR THE 10 ITA NOS. 3539, 3540, 3501 & 3502/CHNY/2018 LD.CIT(A) HAD CONSIDERED THE ASSESSEES CLAIM FOR ALLOWANCE U/S.35(1)(IV) OF THE ACT. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD NO OBJECTION IF THE ISSUE WAS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION AND RE-ADJUDICATION OF ISSUE IN LINE WITH THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. TUBE INVESTMENTS OF INDIA REPORTED IN 250 ITR 94 (MADRAS). IN REPLY, THE LD.DR DID NOT RAISE ANY SERIOUS OBJECTIONS. 10. CONSIDERING THE SUBMISSION OF THE LD.AR AND ALSO CONSIDERING THE FACT THAT THE ASSESSING OFFICER HAS NOT CONSIDERED THE APPLICABILITY OF THE PROVISIONS OF SECTION 35(1)(IV) OF THE ACT, IN RESPECT OF DISALLOWANCE MADE BY DENYING THE BENEFIT OF THE EXEMPTION U/S.35(2AB) OF THE ACT, THE ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR RE-ADJUDICATION IN LINE WITH THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. TUBE INVESTMENTS OF INDIA, REFERRED TO, SUPRA. CONSEQUENTLY GROUND NO.3 FOR BOTH OF THE ASSESSEES APPEAL FOR THE ASSESSMENT YEARS 2013-14 AND 2014-15 STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 11 ITA NOS. 3539, 3540, 3501 & 3502/CHNY/2018 11. TO SUM UP, THE APPEALS OF THE REVENUE IN ITA NOS. 3539 & 3540 OF 2018 ARE DISMISSED AND THE APPEALS OF THE ASSESSEE IN ITA NOS.3501 & 3502 OF 2018 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE 6 TH AUGUST, 2019 AT CHENNAI. SD/- SD/- /CHENNAI, /DATED 6 TH AUGUST, 2019 RSR /COPY TO: 1. [ /ASSESSEE 2. /REVENUE 3. ( )/CIT(A) 4. /CIT 5. /DR 6. [ /GF ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) /JUDICIAL MEMBER