Rasiklal M. Dhariwal (HUF), Pune V. Addl.CIT, Range-2, Pune, Pune

ITA 367/PUN/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93826 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 22-02-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 01-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Keywords: Depreciation; Earning of tax free income; Capital receipt
• Section: 14A; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE: SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO . 366 /PN/201 1 ASSESSMENT YEAR : 20 0 5 - 06 RASIKLAL M. DHARIWAL (HUF), MANIKCHAND HOUSE, PLOT NO. 100-101, D. KENNEDY ROAD, BEHIND HOTEL LE-MERIDIEN, PUNE-411001, MAHARASHTRA VS. JOINT COMMISSIONER OF INCOME TAX, CIRCLE 2, PUNE (APPELLANT) (RESPONDENT) PAN NO. AABHD5583L ITA NOS. 367 & 555/PN/2011 ASSESSMENT YEAR S : 20 0 6 - 07 & 2007 - 08 RASIKLAL M. DHARIWAL (HUF), MANIKCHAND HOUSE, PLOT NO. 100-101, D. KENNEDY ROAD, BEHIND HOTEL LE-MERIDIEN, PUNE-411001, MAHARASHTRA VS. ADDL. COMMISSIONER OF INCOME TAX, RANGE-2, PUNE (APPELLANT) (RESPONDENT) PAN NO. AABHD5583L REVENUE BY: SHRI B.C. MALAKAR ASSESSEE BY: SHRI KISHOR PHADKE DATE OF HEARING : 05-06-2015 DATE OF PRONOUNCEMENT : 19-06-2015 ORDER PER VIKAS AWASTHY, JM:- THESE THREE APPEALS HAVE BEEN FILED BY THE ASSESSEE IMP UGNING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-II, PUNE FOR ASSESSMENT YEARS 2005-06, 2006-07 AND 2007-08. THE IMPUGNED ORD ER FOR ASSESSMENT YEAR 2005-06 AND 2006-07 ARE DATED 24-01 -2011 AND FOR ASSESSMENT YEAR 2007-08 IS DATED 23-02-2011. SINCE, T HE FACTS AND THE 2 ITA NOS. 366, 367 & 555/PN/2011, A.YS. 2005-06, 200 6-07 & 2007-08 ISSUES RAISED IN THE APPEALS ARE SIMILAR, THE APPEALS ARE T AKEN UP TOGETHER FOR ADJUDICATION. ITA NO. 366/PN/2011 (ASSESSMENT YEAR 2005-06) 2. THE ASSESSEE IN APPEAL FOR ASSESSMENT YEAR 2005-06 HAS RAISED ONLY ONE ISSUE I.E. ADDITION OF RS.68,84,235/- ON ACCOUNT OF S ALES TAX INCENTIVE RECEIVED UNDER THE SALES TAX INCENTIVE SCHEME IN MAHARASHTRA. THE ASSESSEE TREATED THE SAID BENEFIT AS CAPITAL IN NATURE. THE REVENUE HELD THE SAME TO BE REVENUE RECEIPT. THE ASSESSEE HAS RAISED AN ADDITIONAL GROUND IN AN ALTERN ATE AND WITHOUT PREJUDICE TO THE MAIN SUBMISSION THAT THE SALES TAX INCENTIVE SHOULD QUALIFY FOR DEDUCTION U/S. 80-IA OF THE ACT. 3. SHRI KISHOR PHADKE APPEARING ON BEHALF OF THE ASSESSEE FAIRLY CONCEDED AT THE OUTSET, THAT SIMILAR ISSUE WAS RAISED IN THE CASE OF ASSESSEES GROUP COMPANY DHARIWAL INDUSTRIES LTD. VS. ADDL. COMMISSIONER OF INCOME TAX IN ITA NOS. 489, 1559 & 1560/ PN/2007 FOR ASSESSMENT YEARS 2003-04, 2004-05 AND 2005-06. THE C O-ORDINATE BENCH OF THE TRIBUNAL VIDE ORDER DATED 29-05-2015 HAS DECIDED T HE ISSUE IN FAVOUR OF THE REVENUE. 4. ON THE OTHER HAND SHRI B.C. MALAKAR REPRESENTING THE DEPARTMENT AFFIRMED THE STATEMENT MADE BY THE LD. AR. A COPY OF THE ORDER OF TRIBUNAL IN ITA NOS. 489, 1559 & 1560/PN/2007 (SUPRA) WAS PLACED ON RECORD. 5. WE HAVE EXAMINED THE ISSUE RAISED IN THE APPEAL AND T HE ORDER OF THE CO-ORDINATE BENCH WHICH HAS BEEN REFERRED TO. WE F IND THAT THE ISSUE IN APPEAL HAS BEEN ADJUDICATED BY THE CO-ORDINATE BENCH IN THE 3 ITA NOS. 366, 367 & 555/PN/2011, A.YS. 2005-06, 200 6-07 & 2007-08 CASE OF DHARIWAL INDUSTRIES LTD. VS. ADDL. CIT (SUPRA) IN FAV OUR OF THE REVENUE. ACCORDINGLY, THIS GROUND OF THE APPEAL RAISED BY THE ASSESSEE IS DISMISSED. THE ASSESSEE HAS RAISED ADDITIONAL GROUND WH ICH IS AN OFF SHOOT OF THE SOLE GROUND RAISED IN THE APPEAL. SINCE, THE MAIN GROUND RAISED IN THE APPEAL HAS BEEN DECIDED AGAINST THE ASSESS EE, THE LD. AR HAS NOT PRESSED THE ADDITIONAL GROUND. ACCORDINGLY, ADDIT IONAL GROUND RAISED IN THE APPEAL IS DISMISSED AS NOT PRESSED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO. 366/PN/2011 FOR ASSESS MENT YEAR 2005-06 IS DISMISSED. ITA NO. 367/PN/2011 (ASSESSMENT YEAR 2006-07) 6. IN THE APPEAL FOR ASSESSMENT YEAR 2006-07 THE ASS ESSEE HAS RAISED FOLLOWING SEVEN GROUNDS: 1. THE LEARNED CIT(A)-II, PUNE, ERRED IN LAW AND ON FACTS I N SUSTAINING DISALLOWANCE OF RS.10,30,500/- OUT OF TOTAL DISALLOWANCE OF RS.20,61,095/- MADE BY THE LEARNED AO U/S 14A OF THE ITA, 1961. 2. THE LEARNED CIT(A)-II, PUNE, ERRED IN LAW AND ON FACTS I N CONFIRMING AD-HOC DEPRECIATION DISALLOWANCE AMOUNTING TO RS.10,18,13 2/- MADE BY THE LEARNED AO ON VEHICLES BLOCK ON ACCOUNT O F ALLEGED POSSIBILITY OF PERSONAL USE OF VEHICLES. 3. THE LEARNED CIT(A)-II, PUNE, ERRED IN LAW AND ON FACTS I N CONFIRMING THE AD-HOC DISALLOWANCE OF RS.50,000/-, MADE BY THE LEARNE D AO, OUT OF DIESEL, PETROL, ADVT. & TRAVELLING EXPENSES ON AC COUNT OF ALLEGED POSSIBILITY OF PERSONAL USE OF VEHICLES. 4. THE LEARNED CIT(A)-II ERRED IN LAW AND ON FACTS IN CON FIRMING DISALLOWANCE OF RS.14,368/- MADE BY THE LEARNED AO FOR D ELAY IN DEPOSITION OF EMPLOYEES PROVIDENT FUND DUES U/S 36(1 )(VA) WITHOUT APPRECIATING THE SMALLNESS OF THE DELAY. 5. THE LEARNED CIT(A)-II, PUNE, ERRED IN LAW AND ON FACTS I N CONFIRMING THE ADDITION OF RS.69,69,230/- MADE BY THE LEARNED AO FOR RECEI PT OF 4 ITA NOS. 366, 367 & 555/PN/2011, A.YS. 2005-06, 200 6-07 & 2007-08 PROCEEDS BY THE APPELLANT ON ACCOUNT OF TRANSFER OF SALES TAX ENTITLEMENT, UNDER THE SALES TAX INCENTIVE SCHEME IN MA HARASHTRA. BOTH THE AUTHORITIES ERRED IN LAW AND ON FACTS IN NO T APPRECIATING THAT THE SAID RECEIPT WAS A CAPITAL RECEIPT AND HENCE , NOT TAXABLE UNDER THE ITA, 1961. 6. THE LEARNED CIT(A)-II, PUNE ERRED IN LAW AND ON FACTS IN SUSTAINING DISALLOWANCE OF DEDUCTION U/S 80-G WITH RESPECT TO DON ATION OF RS.1,10,00,000/- TO M/S RASIKLAL MANIKLCHAND DHARIWAL FOUNDATION. 7. THE APPELLANT CRAVES LEAVE TO ADD / MODIFY / DELETE / AMEND ALL / ANY OF THE GROUNDS OF APPEAL. 7. THE FIRST GROUND OF APPEAL RELATES TO DISALLOWANCE MADE U /S. 14A R.W. RULE 8D. THE LD. AR OF THE ASSESSEE SUBMITTED THAT T HE ASSESSING OFFICER HAS MADE DISALLOWANCE OF RS.20,61,095/- BY APPLYING TH E PROVISIONS OF RULE 8D. IN THE IMPUGNED ASSESSMENT YEAR, T HE PROVISIONS OF RULE 8D WERE NOT APPLICABLE. IN SUPPORT OF HIS SUBMISSION S THE LD. AR PLACED RELIANCE ON THE DECISION OF HON'BLE BOMBAY HIGH COUR T IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD. VS. DCIT & ANR. REPO RTED AS 328 ITR 81 (BOM). THE LD.AR FURTHER SUBMITTED THAT THE DISALLOW ANCE IS NOT WARRANTED U/S. 14A AS THE ASSESSEE HAD MADE INVESTMEN T FROM OWN CAPITAL WHICH IS MUCH MORE THAN THE INVESTMENT MADE DURIN G THE YEAR. TO BUTTRESS HIS SUBMISSIONS THE LD. AR REFERRED TO THE JU DGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. HDF C BANK LTD. REPORTED AS 366 ITR 505 (BOM). 8. ON THE OTHER HAND THE LD. DR PLACED RELIANCE ON THE OR DER OF COMMISSIONER OF INCOME TAX (APPEALS). 9. UNDISPUTEDLY THE ASSESSEE HAS EARNED DIVIDEND INCOME OF RS.5,82,95,703/- DURING THE IMPUGNED ASSESSMENT YEAR. THE ASSESSEE HAS CLAIMED THE SAID INCOME AS EXEMPT FROM TAX. NO DISA LLOWANCE WAS 5 ITA NOS. 366, 367 & 555/PN/2011, A.YS. 2005-06, 200 6-07 & 2007-08 MADE IN RESPECT OF TAX FREE INCOME EARNED BY THE ASSESS EE. THE ASSESSING OFFICER DISALLOWED A SUM OF RS.20,61,095/- BY APPLY ING THE PROVISIONS OF SECTION 14A R.W. RULE 8D. IN APPEAL THE COMM ISSIONER OF INCOME TAX (APPEALS) REDUCED THE DISALLOWANCE TO 50%. T HE SOLE CONTENTION OF THE ASSESSEE IS, THAT THE ASSESSEE HAS NO T UTILIZED INTEREST BEARING FUNDS FOR INVESTMENT PURPOSES. THE REVENUE HAS NOT BEEN ABLE TO CONTROVERT THESE ASSERTIONS OF THE ASSESSEE. BE THAT AS IT MAY, THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD. (SUPRA) HAS HELD THAT THE P ROVISIONS OF RULE 8D SHALL BE APPLICABLE W.E.F. ASSESSMENT YEAR 2008-09. IT IS A FACT THAT THE ASSESSEE HAS MADE HUGE INVESTMENT ON WHICH DIVIDEND OF RS.5,82,95,703/- HAS BEEN EARNED. THE ASSESSEE MUST HAV E UTILIZED SOME OF ITS SOURCE FOR MAKING INVESTMENT AND MAINTAINING INV ESTMENT PORTFOLIO. A REASONABLE DISALLOWANCE IS REQUIRED TO BE MADE T OWARDS EARNING TAX FREE INCOME AMOUNTING TO RS.5,82,95,703/-. IN O UR CONSIDERED OPINION, IN THE FACTS OF THE CASE, RS.5,00,000/- IS A JUST AND REASONABLE DISALLOWANCE U/S. 14A FOR EARNING TAX FREE INCOME . ACCORDINGLY, THIS GROUND OF APPEAL OF THE ASSESSEE IS PART LY ALLOWED IN THE AFORESAID TERMS. 10. THE SECOND GROUND IN THE APPEAL OF THE ASSESSEE IS AD-HOC DISALLOWANCE OF DEPRECIATION AMOUNTING TO RS.10,18,132/- ON V EHICLES ALLEGEDLY USED FOR PERSONAL USE OF DIRECTOR OF THE ASSESSE E COMPANY. THE LD. AR SUBMITTED THAT THE REVENUE HAS MADE DISALLOWANCE O F 10% ON THE TOTAL DEPRECIATION OF RS.1,01,81,321/- CLAIMED U/S. 38(2) OF THE ACT DURING THE RELEVANT PERIOD. THE ASSESSING OFFICER DISALLOWED 10% DEPRECIATION I.E. RS.10,18,132/- ON ACCOUNT OF PERSONAL USE OF VEHICLES. 11. THE LD. AR OF THE ASSESSEE SUBMITTED THAT SHRI PRAK ASH RASIKLAL DHARIWAL IN HIS RETURN OF NET WEALTH FOR ASSESSMENT YEARS 2006-07 AND 6 ITA NOS. 366, 367 & 555/PN/2011, A.YS. 2005-06, 200 6-07 & 2007-08 2007-08 HAS DISCLOSED 8 VEHICLES, WHICH INCLUDE PREMIUM VE HICLES AS WELL. SIMILARLY, SHRI RASIKLAL MANIKCHAND DHARIWAL IN HIS RETURN OF WEALTH FOR THE ASSESSMENT YEARS 2006-07 AND 2007-08 H AS DISCLOSED THE LIST OF VEHICLES OWNED BY HIM. SINCE, BOTH THE MEMBERS OF HU F OWN NUMBER OF VEHICLES IN THEIR RESPECTIVE NAMES INCLUDING PREMIU M VEHICLES THERE IS NO QUESTION OF USING VEHICLES OF THE ASSESSEE FOR THEIR PERSONAL USE. THE LD. AR FURTHER SUBMITTED THAT THE DISALLOWANCE U /S. 38(2) CANNOT BE MADE IN RESPECT OF MOTOR VEHICLES. ON THE OTHER HAND LD. DR VEHEMENTLY SUPPORTED THE FIND INGS OF THE ASSESSING OFFICER AND THE COMMISSIONER OF INCOME TAX (APPEA LS) ON THIS ISSUE. 12. BOTH SIDES WERE HEARD. A PERUSAL OF THE IMPUGNED OR DER SHOWS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS CONFIRMED DISALLOWANCE MERELY ON ASSUMPTION THAT THERE IS POSSIBILITY OF PERSONAL USE OF 7 PREMIUM VEHICLES. IN VIEW OF THE FACT THAT THE ME MBERS OF HUF ARE MAINTAINING THEIR PERSONAL FLEET OF CARS WHICH INCLUDE SO ME PREMIUM VEHICLES, DRAWING PRESUMPTION THAT THEY WOULD BE USING VEH ICLES OF THE ASSESSEE FOR PERSONAL USE WOULD BE UNREASONABLE. ESPECIA LLY, WHEN THERE IS NO CONCRETE EVIDENCE TO BACK SUCH OBSERVATION . ACCORDINGLY, WE ACCEPT THE SUBMISSIONS OF THE ASSESSEE AND DELETE THE D ISALLOWANCE OF DEPRECIATION. THIS GROUND OF APPEAL OF THE ASSESSEE IS ACCEPTED. 13. THE THIRD GROUND OF APPEAL RELATES TO AD-HOC DISALLOWA NCE OF RS.50,000/- ON FUEL, ADVERTISING AND TRAVELLING EXPENSES. TH E LD. AR OF THE ASSESSEE HAS NOT PRESSED THIS GROUND. ACCORDINGLY , THE SAME IS DISMISSED AS NOT PRESSED. 14. THE FOURTH GROUND OF APPEAL RELATES TO DISALLOWANCE OF R S.14,368/- FOR DELAY IN DEPOSIT OF EMPLOYEES SHARE OF PROVIDENT FUND 7 ITA NOS. 366, 367 & 555/PN/2011, A.YS. 2005-06, 200 6-07 & 2007-08 DUES U/S. 36(1)(VA). THE LD. AR SUBMITTED THAT THERE WAS DELAY OF ONLY ONE DAY IN DEPOSITING OF THE EMPLOYEES SHARE OF CONTRIBUT ION. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GHATGE PATIL TRANSP ORT LTD. REPORTED AS 368 ITR 749 (BOM) HAS HELD THAT EVEN E MPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUND IS COVERED UNDER AME NDMENT TO SECTION 43B. 15. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GHATGE PA TIL TRANSPORT LTD. (SUPRA) AND THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. ALOM EXTRUSIONS LTD. REPORTED AS 319 ITR 306 (SC), HAS HELD, WHERE THE EMPLOYEES CONTRIBUTION TOWARDS PROVIDEN T FUND IS DEPOSITED AFTER THE DUE DATE, AS PRESCRIBED UNDER THE RELEVANT ACT BUT BEFORE THE DATE OF FILING OF RETURN OF INCOME, NO DISALLOWANCE IS WARRANTED. IN THE INSTANT CASE, IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS PAID EMPLOYEES SHARE OF CONTRIBUTION TOWAR DS PROVIDENT FUND BEFORE THE DUE DATE OF FILING OF THE RETURN ACCORDING LY, DISALLOWANCE OF RS.14,368/- FOR DELAY IN DEPOSIT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND IS DELETED. 16. THE FIFTH GROUND OF APPEAL OF THE ASSESSEE IS WITH REGA RD TO ADDITION OF RS.69,69,230/- IN RESPECT OF SALES TAX INCENTIVE RECEIVED UNDER THE SALES TAX INCENTIVE SCHEME IN MAHARASHTRA. THIS ISSUE HAS BEEN DECIDED AGAINST THE ASSESSEE IN ITA NO. 366/PN/20 11 FOR ASSESSMENT YEAR 2005-06 IN PARA NOS. 2 TO 5 HEREINABO VE. SINCE, THE ISSUE IN PRESENT APPEAL IS IDENTICAL, THE SAME IS DISMISSED FO R THE AFORESAID REASONS. 17. THE LAST AND SIXTH GROUND IN THE APPEAL OF ASSESSEE FOR ASSESSMENT YEAR 2006-07 IS DISALLOWANCE OF DEDUCTION U/S. 80-G WITH RE SPECT TO DONATION OF RS.1,10,00,000/- TO M/S. RASIKLAL MANIKCHAND DHARI WAL FOUNDATION. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS C ONFIRMED 8 ITA NOS. 366, 367 & 555/PN/2011, A.YS. 2005-06, 200 6-07 & 2007-08 THE FINDINGS OF ASSESSING OFFICER ON THE GROUND THAT THE AP PROVAL GRANTED BY COMMISSIONER OF INCOME TAX VIDE ORDER DATED 14-01-2 008 DID NOT COVER THE PERIOD RELEVANT PERIOD TO ASSESSMENT YEAR 20 06-07. THE FOUNDATION HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL A GAINST THE ORDER OF COMMISSIONER OF INCOME TAX, WHICH IS STILL PENDING FOR FINAL ADJUDICATION. 18. THE LD. AR OF THE ASSESSEE SUBMITTED THAT APPROVAL HAS BEEN GRANTED FOR ASSESSMENT YEAR 2006-07, THEREFORE, THIS ISSU E CAN BE REMITTED BACK TO THE ASSESSING OFFICER FOR FRESH ADJUDICATIO N. THE LD. DR HAS ALSO NOT SERIOUSLY OBJECTED FOR AFRESH CONSIDERATION OF THE ISSUE IN THE LIGHT OF SUBSEQUENT APPROVAL. WE ARE OF THE CONSIDERED VIEW, THAT IN THE INTEREST OF JUS TICE IT WOULD BE APPROPRIATE TO REMIT THIS ISSUE BACK TO THE ASS ESSING OFFICER TO DECIDE THE ISSUE AFRESH IN LIGHT OF THE ORDER OF TRIBUNAL IN T HE CASE OF RASIKLAL MANIKCHAND DHARIWAL FOUNDATION IN RESPECT OF GRANT OF REGISTRATION U/S. 80G. ACCORDINGLY, THIS GROUND OF APPEAL O F THE ASSESSEE IS ALLOWED FOR THE STATISTICAL PURPOSE. 19. IN THE RESULT, THE APPEAL OF THE ASSESSEE FOR ASSESS MENT YEAR 2006-07 IS PARTLY ALLOWED IN THE AFORESAID TERMS. ITA NO. 555/PN/2011 (ASSESSMENT YEAR 2007-08) 20. IN THE APPEAL FOR THE ASSESSMENT YEAR 2007-08 THE ASSESSEE HAS RAISED 5 GROUNDS. THE FIRST GROUND IN THE APPEAL OF THE A SSESSEE RELATES TO DISALLOWANCE OF RS.11,52,000/- MADE U/S. 14A OF THE ACT. THE ASSESSEE HAS EARNED DIVIDEND INCOME OF RS.62,129,230/- AND LONG TERM CAPITAL GAIN OF RS.27,092,710/-. THESE AMOUNTS HAVE BEEN CLAIMED EXEMPT INCOME U/S. 10(34) AND 10(38) RESPECTIVELY BY THE ASSESSEE. THE 9 ITA NOS. 366, 367 & 555/PN/2011, A.YS. 2005-06, 200 6-07 & 2007-08 ASSESSEE HAS NOT MADE ANY DISALLOWANCE IN RESPECT OF EX PENSES INCURRED FOR EARNING ABOVE TAX FREE INCOME. THE ASSESSING OFFICER DU RING THE COURSE OF SCRUTINY ASSESSMENT MADE DISALLOWANCE OF RS.18,44 ,749/- U/S. 14A R.W. RULE 8D OF THE INCOME TAX RULES. IN FIRST APPEAL THE COMMISSIONER OF INCOME TAX (APPEALS) RESTRICTED THE DISALLOW ANCE TO RS.11,52,000/- BY FOLLOWING THE REASONING GIVEN BY HIM IN HIS ORDER FOR ASSESSMENT YEAR 2006-07. 21. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS EAR NED DIVIDEND INCOME OF RS.62,129,230/-. WE HAVE ALREADY ADJUDICATED THIS ISSUE IN THE APPEAL OF ASSESSEE FOR ASSESSMENT YEAR 2006-07 IN P ARA NO. 9 HERE- IN-ABOVE. FOR THE SIMILAR REASONS STATED THEREIN, WE REST RICT THE DISALLOWANCE U/S. 14A TO RS.6,00,000/- IN THE ASSESSMENT Y EAR 2007-08. ACCORDINGLY, THIS GROUND OF APPEAL OF THE ASSESS EE IS PARTLY ACCEPTED. 22. THE SECOND GROUND IN THE APPEAL IS WITH REGARD TO AD -HOC DISALLOWANCE OF DEPRECIATION TO THE TUNE OF RS.9,35,095/-. TH E IDENTICAL GROUND WAS RAISED BY THE ASSESSEE IN APPEAL FOR THE AS SESSMENT YEAR 2006-07. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS MAD E DISALLOWANCE IN ASSESSMENT YEAR 2007-08 FOR SIMILAR REASONS . WE HAVE DELETED THE DISALLOWANCE OF DEPRECIATION IN ASSESSMENT YEAR 2006-07. THE FINDINGS ARE GIVEN IN PARA NO. 12 ABOVE. FOR THE REA SONS STATED THEREIN, WE ACCEPT THIS GROUND OF APPEAL OF THE ASSESSEE AND DELETE DISALLOWANCE OF DEPRECIATION. 23. THE THIRD GROUND IN THE APPEAL OF THE ASSESSEE RELATE S TO AD-HOC DISALLOWANCE OF RS.1,00,000/- ON FUEL EXPENSES. THE LD. AR MADE STATEMENT AT THE BAR THAT HE IS NOT PRESSING THIS GROU ND. ACCORDINGLY, THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED AS NOT PRESSED. 10 ITA NOS. 366, 367 & 555/PN/2011, A.YS. 2005-06, 200 6-07 & 2007-08 24. THE FOURTH GROUND IN THE APPEAL OF THE ASSESSEE IS W ITH RESPECT TO ADDITION OF RS.59,49,338/- ON SALES TAX INCENTIVE RECEIVED BY THE ASSESSEE UNDER THE SALES TAX INCENTIVE SCHEME, MAHARAS HTRA. THIS ISSUE HAS BEEN DECIDED AGAINST THE ASSESSEE IN ITA NO. 3 66/PN/2011 FOR THE ASSESSMENT YEAR 2005-06 (SUPRA). FOR THE REASONS RECORDED IN PARA NOS. 2 TO 5 THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 25. THE FIFTH GROUND OF APPEAL IS GENERAL IN NATURE, THERE FORE, IT REQUIRES NO ADJUDICATION. 26. IN THE RESULT, THE APPEAL OF THE ASSESSEE FOR THE ASS ESSMENT YEAR 2007-08 IS PARTLY ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 19 TH DAY OF JUNE, 2015 AT PUNE SD/- SD/- (R.K. PANDA) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 19 TH JUNE, 2015 RK/PS COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) - II, PUNE 4 THE CIT - II, PUNE 5 6 THE DR, ITAT, B BENCH, PUNE. GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE