ACIT - 9(3), MUMBAI V. M/s. WALL STREET FINANCE LTD., MUMBAI

ITA 360/MUM/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7300 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2010
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 08-03-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 12-01-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Depreciation; Retrospective amendment; Bad and doubtful debts; Reason to believe
• Section: 80HHC; 115JB; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI. BEFORE SHRI J. SUDHAKAR REDDY, A.M. AND SHRI R.S. PADVEKAR, J.M. I.T.A.NO. 360 & 385/ MUM/2007. ASSESSMENT YEARS :2000- 01 & 2003-04. ASSTT. COMMISSIONER OF M/S WALL STREE FINANCE LTD. INCOME TAX-9(3), MUMBAI. VS. UNIT NO. 101-112, 1 ST FLOOR, CHINTAMANI PLAZA, ANDHERI-KURLA ROAD,CHAKLA, ANDHERI (E), MUMBAI 400 099. PAN : AAACW1258. APPELLANT. RESPONDENT. I.T.A. NO. 1373/MUM /2007 ASSESSMENT YEAR : 2 003-04. M/S WALL STREET FINANCE LTD., ASSTT. COMMISSIONER OF MUMBAI. VS. INCOME TAX-9(3), MUMBAI. APPELLANT RESPONDENT C.O.NOS. 86 & 87/MU M/2007 ASSESSMENT YEAR : 2000-0 1 & 2003-04. WALL STREET FINANCE LTD., ASSTT. COMMISSIONER OF MUMBAI. VS. INCOME TAX-9(3), MUMBAI. CROSS OBJECTOR. RESPONDENT. DEPARTMENT BY : SHRI MOHD. USMAN. ASSESSEE B Y : SHRI MILIND KOTHARI. O R D E R PER J. SUDHAKAR REDDY, A.M. ALL THESE APPEALS AND CROSS OBJECTIONS PERTAIN TO T HE ASSESSMENT YEARS 2000-01 AND 2003-04. AS THE ISSUES ARISING IN THESE 2 APPEALS ARE SIMILAR, FOR THE SAKE OF CONVENIENCE, T HEY ARE HEARD TOGETHER AND DISPOSED BY WAY OF THIS COMMON ORDER. 2. FACTS IN BRIEF : THE ASSESSEE IS A COMPANY AND IS IN THE BUSINESS OF LEASING, HIRE PURCHASE, MONEY CHANGING, MERCHANT BANKING, BA CK OFFICE OPERATION, SOFTWARE DEVELOPMENT AND CONSULTANCY. THE ISSUES TH AT ARISE IN THESE APPEALS PERTAIN TO ADDITIONS MADE UNDER REGULAR ASS ESSMENT ON ACCOUNT OF LEASE EQUALISATION RESERVE, BY THE AO AND WHICH IS DELETED BY THE FIRST APPELLATE AUTHORITY, ALLOWABILITY OF DEDUCTION U/S 80HHC ON SALES OF FOREIGN EXCHANGE, COMPUTATION OF BOOK PROFITS VIS- -VIS LEASE EQUALISATION RESERVE, ALLOWABILITY OF DEDUCTION OF PROVISIONS MA DE FOR NON PERFORMING ASSETS BOTH UNDER REGULAR ASSESSMENT AS WELL AS FOR DETERMINATION OF BOOK PROFIT U/S 115JB. THE ISSUES RELATING TO REOPENING AS WELL AS LEVY OF INTEREST ALSO ARE TAKEN BOTH IN THE APPEALS AS WELL AS IN THE CROSS OBJECTIONS. 3. WE HAVE HEARD MR. MOHD. USMAN, LEARNED DR AND M R. MILIND KOTHARI, LEARNED COUNSEL FOR THE ASSESSEE. 4. WE FIRST TAKE UP ITA NO. 360/MUM/2007 ALONG WIT H C.O. NO.86/MUM/2007. THERE ARE THREE GROUNDS THAT ARE T AKEN BY THE REVENUE IN THIS APPEAL. THE FIRST GROUND PERTAINS TO DELETI ON BY THE CIT(APPEALS) OF THE DISALLOWANCE MADE BY THE AO, ON THE GROUND T HAT AN EXCESS CLAIM FOR DEPRECIATION HAS BEEN MADE. THE ASSESSEE IN THI S CASE CLAIMED THAT THE AO HAS NOT UNDERSTOOD THE ACCOUNTING ENTRIES PASSED AND HAS MADE THE ABOVE ADDITION. THE CIT(APPEALS) AT PARA 3.3 AT PAG E 4 OF HIS ORDER HELD AS FOLLOWS : 3 3.3 THE APPELLANT HAS REITERATED ITS ARGUMENTS AS WAS OFFERED FOR DISALLOWANCE OF SUCH SUM UNDER NORMAL PROVISIONS UN DER THE ACT. SINCE I HAVE ALREADY ACCEPTED THE VIEW TAKEN BY THE AO IN RESPECT OF DISALLOWANCE OF SUCH AMOUNT IN NORMAL PROVISIONS OF THE ACT I AM ALSO INCLINED TO ACCEDE TO THE AOS ACTION IN TH IS REGARD AS WELL AND THEREFORE AOS ACTION IN THIS REGARD IS ALSO CO NFIRMED. HOWEVER IN RESPECT OF ADDITION MADE TO BOOK PROFIT IN RESPECT OF LEASE EQUALIZATION PROVISION I AM IN AGREEMENT WITH THE APPELLANT THAT SUCH RESERVE IS A PART OF BOOK ENTRY PASSED IN ACCOUNTS HAVING EFFECTS ON BOTH THE SIDE OF THE PROFIT AND LOSS ACC OUNTS ONE IN RESPECT OF LEASE INCOME AND OTHER FOR PROVIDING FOR EQUIVALENT AMOUNT OF DEPRECIATION AND THEREFORE AO IS DIRECTED TO LOOK INTO THE ARGUMENT OF THE APPELLANT AND REDUCE THE BOOK P ROFIT TO SUCH EXTENT WHERE SUCH LEASE EQUALIZATION RESERVE IS COR RESPONDINGLY COMPENSATED BY SIMILAR ENTRY. THIS GROUND OF APPEAL IS PARTLY ALLOWED. 4. AFTER A PLAIN READING OF PARA 3.3, WE ARE OF TH E CONSIDERED OPINION THAT THE AO SHOULD NOT PRIMA FACIE HAVE ANY GRIEVANCE IN THE MATTER. ANYHOW, BEFORE US THE ASSESSEE HAS NOT FIL ED THE ENTIRE SET OF ACCOUNTS, SO AS TO ENABLE US TO GET SATISFIED THAT THIS AMOUNT OF RS.1,90,69,000/- IS MERELY A CONTRA ENTRY, WHICH RE ALLY DOES NOT EFFECT THE COMPUTATION OF TAXABLE INCOME OF THE ASSESSEE. THE AO IN THE CONSEQUENTIAL ORDER, HAS NOT DISCUSSED AS TO WHETHE R HE IS SATISFIED, IN TERMS OF THE DIRECTIONS OF THE FIRST APPELLATE AUTH ORITY. 5. UNDER THESE CIRCUMSTANCES, AS NOTHING IS CLEAR FROM THE RECORD OR THE PAPERS SUBMITTED BEFORE US BY THE ASS ESSEES COUNSEL, WE ARE OF THE CONSIDERED OPINION THAT THIS ISSUE SHOULD BE SET ASIDE TO THE FILE OF THE AO FOR FRESH ADJUDICATION. THE AO SHALL TREAT T HE ENTIRE LEASE RENTS AS INCOME AND THE DEPRECIATION ALLOWABLE UNDER THE I.T . ACT SHALL BE ALLOWED AS A DEDUCTION. IN CASE HE FINDS, THAT THE ASSESSEE HAS ULTIMATELY RECOGNIZED THE ENTIRE AMOUNT OF LEASE RENTALS AS IT S INCOME AND IF THE ASSESSEE HAS NOT CLAIMED LEASE EQUALISATION RESERVE AS A CHARGE ON PROFIT, THEN THE AO MAY ACCEPT THE CLAIM OF THE ASSESSEE AS CORRECT. HE IS 4 REQUIRED TO ALLOW DEPRECIATION AS PER THE INCOME TA X ACT. IF THE AO HAS ALREADY DONE A DETAILED EXERCISE ON THIS VERY ISSUE , WHILE PASSING THE CONSEQUENTIAL ORDER ON THE ORDER OF THE CIT(APPEALS )-IX, MUMBAI DATED 18-10-2006, THEN NO FURTHER EXERCISE NEED BE CARRIE D OUT. WITH THESE OBSERVATIONS, WE SET ASIDE THIS GROUND NO.1 OF THE REVENUES APPEAL TO THE FILE OF THE AO. 6. IN THE RESULT, GROUND NO. 1 IS ALLOWED FOR STAT ISTICAL PURPOSES. 7. COMING TO GROUND NO.2, THE ISSUE IS WHETHER THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 80HHC ON SALE OF FOREIGN CURRENCY. THE MOOT POINT IS WHETHER SALE OF FOREIGN CURRENCY IS TO BE CONSIDERED AS SALE OF GOODS. THIS ISSUE IS COVERED IN FAVOUR OF THE ASSES SEE BY THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF KIRLOSK AR ASEA LTD. VS. CIT 117 ITR 82. FURTHER, THE DECISION OF MUMBAI BENCH OF ITAT IN THE CASE OF P.F. MEHTA & CO. IN ITA NO. 1873 & 3016/MOM/1986 IS IN FAVOUR OF THE ASSESSEE. SIMILARLY, THE ISSUE IS ALSO COVERED IN FAVOUR OF THE ASSESSEE BY A DECISION OF THE CALCUTTA D-BENCH OF THE TRIBUN AL IN THE CASE OF R.R.SEN AND BROTHERS VS. JCIT REPORTED IN 95 TTJ 39 8. RESPECTFULLY FOLLOWING THE SAME, WE UPHOLD THE ORDER OF THE CIT( APPEALS) AND DISMISS GROUND NO. 2 OF THE REVENUE. 8. GROUND NO. 3 IS ON THE ISSUE OF LEVY OF INTERES T U/S 234D FOR THE ASSESSMENT YEAR 2000-01. THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. EKATA PROMOTER S 113 ITD 719 (DEL.)(S.B.) WHEREIN IT IS HELD THAT LEVY OF INTERE ST U/S 234D IS RETROSPECTIVE. RESPECTFULLY FOLLOWING THE SAME, WE UPHOLD THE ORDER OF THE CIT(APPEALS) AND DISMISS THIS GROUND OF THE REV ENUE. 5 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALL OWED IN PART. 10. WE NOW TAKE UP CROSS OBJECTIONS. THE CROSS OBJ ECTIONS HAVE BEEN DRAFTED IN AN ARGUMENTATIVE MANNER AND IN VIOL ATION OF RULE 8 OF THE ITAT RULES. WHEN THIS WAS BROUGHT TO THE NOTICE OF THE LEARNED COUNSEL, MR. KOTHARI SUBMITTED THAT GROUND NO. 1 O F THE CROSS OBJECTION MAY BE CONSIDERED AND THAT ALL OTHER GROUNDS I.E. G ROUND NOS. 2 TO 6 MAY BE HELD AS NOT PRESSED. THUS WE CONSIDER ONLY GROUN D NO. 1 WHICH IS ON THE ISSUE OF REOPENING. 11. IN THIS CASE THE ASSESSEE FILED ITS ORIGINAL R ETURN OF INCOME ON 20-11-2000, WHEREIN IT DECLARED A LOSS OF RS.1,39,8 6,166/-. THE SAME WAS ACCEPTED U/S 143(1) ON 12-03-2002. THEREAFTER THE A SSESSMENT WAS REOPENED U/S 147 AND A NOTICE WAS GIVEN U/S 148 ON 18-02-2005. THE REASONS OF REOPENING ARE BROUGHT OUT IN PARA 2 OF T HE ASSESSMENT ORDER WHICH IS EXTRACTED FOR READY REFERENCE: 2. THE REASONS FOR REOPENING THE ASSESSMENT WERE R ECORDED VIDE ORDER SHEET ENTRY DATED 18.02.2005 AS UNDER: AS PER THE DETAILS FILED ALONGWITH THE RETURN OF I NCOME, THE COMPANY IS ENGAGED IN THE BUSINESS OF FINANCIAL LEA SING, SHARE PURCHASE, BILL DISCOUNTING, MONEY CHANGING ETC. DUR ING THE YEAR, THE ASSESSEE HAS CLAIMED DEDUCTION U/S 80HHC OF RS. 99,71,067/- IN RESPECT OF MONEY CHANGING BUSINESS. AS PER THE PROVISION OF SECTION 80HHC, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION DEPENDING UPON THE TWO FACTORS, NAMEL6, E XPORTING OF GOODS FOR MERCHANDISE AND REALISATION OF FOREIGN CO NVERTIBLE EXCHANGE. IN THE INSTANT CASE, THESE TWO FACTORS AR E NOT SATISFIED AND THEREFORE, I AM OF THE OPINION THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 80HHC AMOUNTING TO RS.99,71,067/-. AS PER THE INFORMATION AVAILABLE ON RECORD, IT IS S EEN THAT THE ASSESSEE HAS CLAIMED THE DEDUCTION U/S 80HHC IN RES PECT OF EXPORTING FOREIGN CURRENCY. FROM CONSULTING THE REC ORD OF EARLIER 6 YEARS, IT IS SEEN THAT THE ASSESSEE HAS RECEIVED IN ADVANCE, REMITTANCE FROM OVERSEAS THROUGH BANKING CHANNELS. THE DETAILS OF THIS ADVANCE REMITTANCES CO-RELATING TO THE SO-CALL ED EXPORT OF FOREIGN CURRENCY, HAVE NEITHER BEEN PRODUCED BEFORE THE AO NOR THE AO INQUIRED INTO THIS WHILE PASSING THE ORDER U /S 143(3). THE ASSUMPTION OF THE AO THAT THE ASSESSEE HAS FULFILLE D THE REQUIREMENTS OF SECTION 80HHC WAS WITHOUT ANY BASIS AS NO DETAILS WERE FILED BY THE ASSESSEE COMPANY IN THIS REGARD. FROM THE DETAILS SUBMITTED ALONGWITH THE RETURN OF INCOME AND TAX AUDIT REPORT, IT IS SEEN THAT THE ASSESSEE COMPANY HAS DEBITED AN AMOUNT OF RS.3,06,59,000/- TOWARDS DEPRECIATION AS PER THE BOOKS OF ACCOUNTS. HOWEVER, IN COMPUTATION OF THE INCOME, WHILE ADDING THE ITEMS DISALLOWABLE, TO THE PROFIT AS PER THE PR OFIT AND LOSS ACCOUNT, AN AMOUNT OF RS.1,09,69,000/- ON ACCOUNT O F LEASE EQUALISATION RESERVE WAS DEDUCTED FROM RS.3,06,59,0 00/-, THE AMOUNT OF DEPRECIATION AND NET AMOUNT OF RS.1,15,90 ,000/- WAS ADDED BACK. THIS IS NOT IN ORDER. THE AMOUNT TO BE ADDED BACK WAS RS.3,06,59,000/- DEBITED TO THE PROFIT AND LOSS ACC OUNT AS A PRINCIPLE OF ACCOUNTING STANDARD. THIS LEADS TO UND ER ASSESSMENT OF RS.1,09,69,000/-. IN VIEW OF THE PARA (I) & (II) ABOVE, I HAVE REASON TO BELIEVE THAT AN INCOME OF RS.1,39,86,166/- (THIS IS A TYPOGRAPHICAL ERROR, THE AMOUNT OF INCOME ESCAPED THE ASSESSMENT SHOULD HAVE BEEN RS.2,09,40,067/-) CHARGEABLE TO TAX HAS ESCAPED THE ASSESSMENT BY REASON OF FAILURE ON THE PART OF THE ASSESSEE TO DI SCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ITS ASSESSME NT WITHIN THE MEANING OF PROVISO TO SECTION 147 OF THE I.T. ACT, 1961. 12. AFTER HEARING RIVAL CONTENTIONS AND PERUSING THE PAPERS ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW, WE ARE OF THE CONSIDERED OPINION THAT THE REOPENING IN QUESTION IS VALID IN LAW. THE REOPENING IS MADE WITHIN A PERIOD OF FOUR YEARS AND EARLIER NO A SSESSMENT WAS FRAMED U/S 143(3). EXPLANATION 2 TO SECTION 147, SUB-CLAUS E (B) AND (C) SPECIFY CERTAIN CIRCUMSTANCES UNDER WHICH IT CAN BE DEEMED TO BE A CASE WHERE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. WHEN THE AO RECORDS REASONS FOR REOPENING, HE SHOULD TAKE A REASONABLE VIEW, WHETHER IN HIS OPINION THERE IS ESCAPEMENT OF INCOME OR NOT. IN TH IS CASE THE AO WAS OF 7 THE OPINION THAT THE CLAIM OF DEDUCTION U/S 80HHC O N SALE OF CURRENCY AND ALSO THE ASSESSEE BY NOT REDUCING THE ENTIRE AM OUNT OF DEPRECIATION FROM THE PROFIT & LOSS ACCOUNT, COULD HAVE CLAIMED EXCESS DEPRECIATION, IS IN OUR HUMBLE OPINION, A REASONABLE GROUND ON WH ICH THE REOPENING IS MADE. BY NOW IT IS WELL SETTLED THAT AT THE TIME OF RECORDING REASONS, THE AO NEED NOT DEMONSTRATE THAT THE LEGAL POSITION WAR RANTS THE SAID ADDITION. WHEN HE IS RECORDING THE REASONS FOR RE-O PENING, A PRIMA FACIE VIEW THAT THE INCOME HAS ESCAPED ASSESSMENT IS SUFF ICIENT. IN THIS CASE, IN OUR HUMBLE OPINION, THE AO HAS RIGHTLY FORMED A PRI MA FACIE VIEW. THUS WE UPHOLD THE ORDER OF THE FIRST APPELLATE AUTHORIT Y AND DISMISS THIS CROSS OBJECTION. 13. IN THE RESULT, THE CROSS OBJECTION IS DISMISSE D. 14. WE NOW TAKE UP THE ASSESSEES APPEAL IN ITA NO . 1373/MUM/2007 FOR THE ASSESSMENT YEAR 2003-04. 15. THERE IS A DELAY OF 34 DAYS IN FILING OF THE A PPEAL. THE ASSESSEE HAD FILED AN AFFIDAVIT EXPLAINING THE DELA Y. ITS SUBMISSION IS THAT THE PREVIOUS ADVOCATE HAD COLLECTED A COPY OF THE O RDER OF THE CIT(APPEALS) PERSONALLY AND THE SAME WAS NOT HANDED OVER TO THE COMPANY NOR WAS ANY ACTION TAKEN. IT WAS FURTHER SU BMITTED THAT THERE WAS A CHANGE IN THE MANAGEMENT OF THE ASSESSEE COMP ANY AS WELL AS A CHANGE IN THE ADVOCATES AND UNDER THESE CIRCUMSTANC ES, A DELAY HAD OCCURRED IN FILING OF THE APPEAL. THE LEARNED DR OP POSED THE CONDONATION OF DELAY. 16. AFTER HEARING RIVAL CONTENTIONS, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE WAS PREVENTED BY A REASON ABLE CAUSE FOR FILING THE APPEAL IN TIME. THUS WE CONDONE THE DELAY AND A DMIT THE APPEAL. 8 17. AS IN THE CASE OF OTHER CROSS OBJECTIONS, THE GROUNDS OF APPEAL FILED BY THE ASSESSEE ARE IN VIOLATION OF RU LE 8 OF THE ITAT RULES. THE ASSESSEE HAS QUOTED A NUMBER OF CASE LAWS IN TH E GROUNDS OF APPEAL WHICH IS AGAINST THE RULES. WHEN THIS WAS BROUGHT T O THE NOTICE OF MR.KOTHRI, HE SUBMITTED THAT ONLY GROUND NO. 1 AND 2 MAY BE CONSIDERED AND THE OTHER GROUNDS BE DISMISSED AS NOT PRESSED. 18. GROUND NO. 1 PERTAIN TO DISALLOWANCE OF A CLAI M BEING A PROVISION FOR NON PERFORMING ASSETS AS PER RBI GUI DE LINES. THIS ISSUE STANDS CONCLUDED BY THE DECISION OF THE HONBLE SUP REME COURT IN THE CASE OF M/S SOUTHERN TECHNOLOGIES LTD. VS. JCIT IN CIVIL APPEAL NO. 1337 OF 2003 ORDER DATED 11 TH JAN., 2010. IN THIS JUDGMENT THE HONBLE SUPREME COURT HELD THAT A PROVISION FOR NPA IS A NO TIONAL EXPENSE AND THAT THE PRUDENTIAL NORMS OF THE RBI HAS NOTHING TO DO WITH THE COMPUTATION OR TAXABILITY UNDER THE INCOME TAX ACT. THE HONBLE SUPREME COURT HAS IMPLIEDLY UPHELD THE JUDGMENT OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF NEW INDIA INDUSTRIES 112 TTJ (DEL.) 917. RESPECTFULLY FOLLOWING THE SAME, WE UPHOLD THE ORDE R OF THE CIT(APPEALS) AND DISMISS THIS GROUND OF APPEAL. 19. COMING TO THE ADJUSTMENT TO BE MADE U/S 115JB OF THE ACT WHILE COMPUTING BOOK PROFITS, WITH RESPECT TO PROVI SION FOR NON PERFORMING ASSETS, WE FIND THAT EXPLANATION 1 SUB-C LAUSE (I) HAS BEEN INTRODUCED TO SECTION 115JB OF THE FINANCE ACT RETR OSPECTIVELY WITH EFFECT FROM 01-04-2001. THE SUB-CLAUSE READ AS FOLLOWS : (I) THE AMOUNT OR AMOUNT SET ASIDE AS PROVISION F OR DIMINUTION IN THE VALUE OF ANY ASSET. 9 IN VIEW OF THE ABOVE, WE UPHOLD THE ORDER OF THE CI T(APPEALS), THOUGH FOR DIFFERENT REASONS AND DISMISS THIS GROUND OF TH E ASSESSEE. IN FACT THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. HCL CO MNET SYSTEMS AND SERVICES LTD. 305 ITR 409 HAD HELD THAT PROVISION FOR BAD AND DOUBTFUL DEBTS CANNOT BE ADDED AS BOOK PROFIT FOR THE PURPOS E OF SECTION 115JA BECAUSE THEY MERELY REPRESENT THE DIMINUTION IN TH E VALUE OF ASSETS. IN THIS DECISION THE HONBLE SUPREME COURT HAD UPHELD THE JUDGMENT OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF USHA M ARTINE 104 ITD 249 (CAL.) (S.B.) AND THE JUDGMENT OF THE BOMBAY HIGH C OURT IN THE CASE OF ECHJAY FORGINGS 251 ITR 50. IN ANY EVENT, IN VIEW O F THE RETROSPECTIVE AMENDMENT, WE DECIDE THE ISSUE AGAINST THE ASSESSEE . 20. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS D ISMISSED. 21. THIS BRINGS US TO THE REVENUES APPEAL NO. 385 /MUM/2007. THERE IS ONLY ONE GROUND IN THIS APPEAL AND IT IS S IMILAR TO THE GROUND RAISED IN REVENUES APPEAL NO. 360/MUM/2007. CONSIS TENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE MATTER TO THE FILE OF THE AO FOR FRESH ADJUDICATION IN LINE WITH OUR OBSERVATIONS IN GROUN D NO. 1 IN ITA NO. 360/MUM/2007. 22. IN THE RESULT, THE APPEAL OF THE REVENUE IS AL LOWED FOR STATISTICAL PURPOSES. 23. NOW WE COME TO C.O. NO. 87/MUM/2007 IN ITA NO.385/MUM/2007. THE CROSS OBJECTION IS ONLY IN SUP PORT OF THE ORDER OF THE CIT(APPEALS) ON THE ISSUE OF ADDITION PERTAININ G TO LEASE EQUALISATION RESERVE AND IT IS THE IMPACT OF BOOK PROFITS. IN VI EW OF OUR DECISION IN BOTH THE ASSESSEES AND THE REVENUES APPEAL, THIS CROSS OBJECTION NEED NOT BE SEPARATELY ADJUDICATED. HENCE THE SAME IS DI SPOSED OF ACCORDINGLY. 10 24. ACCORDINGLY, THE APPEAL AND CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED AND THE REVENUES APPEAL IS ALLOWED F OR STATISTICAL PURPOSES. 25. IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO . 360/MUM/2007 IS ALLOWED IN PART, IN ITA NO. 385/MUM /2007 IS ALLOWED FOR STATISTICAL PURPOSES, APPEAL OF THE ASSESSEE IN ITA NO. 1373/MUM/2007 IS DISMISSED, AND CROSS OBJECTIONS O F THE ASSESSEE I.E. C.O. NOS.86/MUM/2007 AND 87/MUM/2007 ARE DISMISSED ORDER PRONOUNCED ON THIS 25 TH DAY OF MARCH, 2010. SD/- SD/- (R.S.PADVEKAR) (J. SUDHAKAR REDDY) JUDICIAL MEMBER. ACCOUNTANT MEMBER. MUMBAI, DATED : 25 TH MARCH, 2010. WAKODE COPY FORWARDED TO : 1. APPELLANT. 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, A-BENCH. (TRUE COPY) BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI BENCHES, MUMBAI.