DCIT, CHENNAI V. M/s TTK Health Care Limited, CHENNAI

ITA 369/CHNY/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 4443 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2010
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 05-07-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 20-03-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P B SEKARAN
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Depreciation; Rectification of order; Retrospective amendment; Scheme of amalgamation; Unabsorbed depreciation
• Section: 143(3); 14A; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI (BEFORE SHRI PRADEEP PARIKH, VICE-PRESIDENT AND SHRI GEORGE MATHAN, JUDICIAL MEMBER) .. I.T.A. NO.369/MDS/2009 ASSESSMENT YEAR : 2000-01 THE DY. COMMISSIONER OF INCOME- TAX, COMPANY CIRCLE-III(4), CHENNAI. (APPELLANT) V. M/S. TTK HEALTH CARE LTD., 6, CATHEDRAL ROAD, CHENNAI-600 006. PAN : AABCT3312J (RESPONDENT) APPELLANT BY : SHRI P. B. SEKARAN RESPONDENT BY : SHRI R. VIJAYARAGHAVAN O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(APPEALS)-III, CHENNAI IN APPEAL NO. 546/07-08/A -III DATED 25-11-2008 FOR THE ASSESSMENT YEAR 2000-01. 2. SHRI P.B. SEKARAN, LEARNED CIT(DR) REPRESEN TED ON BEHALF OF THE REVENUE AND SHRI R. VIJAYARAGHAVAN, ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE. 3. AT THE OUTSET IT WAS SUBMITTED BY THE LEARN ED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT THE ASSESSEE HAS FILED A PETITION UNDER RULE 27 OF THE ITAT RULES WHEREIN AS A RESPONDENT THE ASSESSEE PROPOSED TO SUPPORT THE ORDER OF THE LEARNED CIT(A) ON THE GROUND THAT THE RE-OPENIN G IS WITHOUT JURISDICTION. IT WAS THE SUBMISSION THAT THE ISSUE OF RE-OPENING HAS BEEN RAISED BEFORE THE ITA NO.369(/MDS/2009 2 LEARNED CIT(A) AND THE SAME HAS BEEN HELD AGAINST T HE ASSESSEE. HOWEVER, ON MERITS THE ADDITIONS MADE HAVE BEEN DELETED. IT WA S THE SUBMISSION THAT AGAINST THE DELETION OF THE ADDITIONS ON MERITS THE REVENUE HAS FILED THE APPEAL. IT WAS THE SUBMISSION THAT AS THE ISSUE OF RE-OPENI NG GOES TO THE ROOT OF THE ASSESSMENT, THE SAME MAY BE HEARD. 4. IN REPLY THE LEARNED DR DID NOT RAISE ANY SERIOU S OBJECTION. IN THE CIRCUMSTANCES THE PETITION FILED UNDER RULE 27 OF T HE ITAT RULES IS ADMITTED AND THE ISSUE OF REOPENING IS ALSO PERMITTED TO BE RAIS ED BY THE ASSESSEE. 5. IT WAS SUBMITTED BY THE LEARNED AUTHORIZED REPRE SENTATIVE THAT THE ASSESSEE HAD ORIGINALLY FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2000- 01 ON 30.11.2000 ADMITTING THE TOTAL INCOME AS NIL . THE ASSESSMENT HAD ORIGINALLY BEEN COMPLETED U/S 143(3) OF THE INCOME- TAX ACT, 1961 ON 18.3.2003 WHEREIN THE TOTAL INCOME ASSESSED AT NEARLY RS. 8 C RORES. IT WAS THE SUBMISSION THAT CERTAIN ADDITIONS IN THE FORM OF NON-COMPETE F EE RECEIVED FROM LONDON INTERNATIONAL GROUP PLC (LIG) HAD BEEN DISALLOWED. SIMILARLY, DEFERRED ADVERTISEMENT EXPENDITURE HAD BEEN DISALLOWED. UNP AID BONUS HAD BEEN DISALLOWED. DISALLOWANCE WAS ALSO MADE UNDER SECTI ON 14A IN RESPECT OF THE EXPENDITURE FOR GENERATING THE DIVIDEND INCOME. IT WAS THE SUBMISSION THAT SUBSEQUENTLY ON 29.3.2007, I.E. MUCH AFTER THE 4 YE AR PERIOD, NOTICE U/S. 148 HAD BEEN ISSUED AND THE ASSESSMENT ORDER UNDER SEC. 143(3) READ WITH SECTION 147 HAD BEEN PASSED ON 31.12.2007 WHEREIN VARIOUS A DDITIONS HAD BEEN MADE ITA NO.369(/MDS/2009 3 REPRESENTING DIFFERENCE IN OPENING STOCK, EXCESS GR ANT OF DEPRECIATION AND SUBSIDY RECEIVED BY THE COMPANY. IT WAS THE SUBMI SSION THAT THE SET OFF OF BUSINESS LOSS IN RESPECT OF M/S. TTK BIOMED LTD. HA D ALSO NOT BEEN ALLOWED. THE LEARNED AUTHORIZED REPRESENTATIVE DREW OUR ATTENTIO N TO PAGE 2 OF THE ASSESSMENT ORDER DATED 31-12-2007 WHICH HE SAID WER E THE REASONS FOR REOPENING THE ASSESSMENT. THE SAME IS AS FOLLOWS : M/S. TTK HEALTH CARE LTD. TOOK OVER THE BUSINESS OF TTK BIOMED LIMITED UNDER THE SCHEME OF AMALGAMATION AND THE APPOINTED DATE WAS 1.7.1999. WHILE EXAMINING THE RE CORDS FOR THIS ASSESSMENT YEAR THE FOLLOWING POINTS HAVE BEEN IDENTIFIED: 1. THE COMPANY ADOPTED THE OPENING STOCK OF TTK BIO MED LIMITED AS ON 1.4.1999 INSTEAD OF THE STOCK AS ON 1 .7.1999 (THE DATE ON WHICH M/S. TTK BIOMED LIMITED GOT AMALGAMATION WITH THE ASSESSEE COMPANY) RESULTING I N UNDER ASSESSMENT OF RS. 6,91,58,608/-. 2. EXCESS GRANT OF DEPRECIATION ON PLANT AND MACHINE RY TRANSFERRED BY TTK BIOMED LIMITED TO THE ASSESSEE C OMPANY IS TO THE EXTENT OF RS. 5,51,303/-. 3. SUBSIDY RECEIVED BY THE COMPANY BEING RS. 1,52, 760/- WAS NOT ASSESSED TO TAX. THE AMALGAMATING COMPANY TTK BIOMED WAS MANUFACTURI NG MEDICAL DEVICES, CONDOMS AND LATEX GLOVES. TTK BIO MED TRANSFERRED THE BUSINESS OF MANUFACTURE OF MEDICAL DEVICES ON 30-9-1996 TO TTK MAERSK LIMITED FOR RS. 21 CRORE S. AS PART OF THE BUSINESS HAS ALREADY BEEN SOLD, THE UNA BSORBED ITA NO.369(/MDS/2009 4 BUSINESS LOSS AND DEPRECIATION RELATING TO THE BUSI NESS OF TTK BIOMED CANNOT BE CARRIED FORWARD AND SET OFF IN THE CASE OF THE ASSESSEE M/S. TTK HEALTH CARE SERVICES LIMITED. 6. IN RESPECT OF THE FIRST ISSUE OF REOPENING BEING THAT THE COMPANY HAD ADOPTED THE OPENING STOCK OF TTK BIOMED LTD. AS ON 1.4.1999 INSTEAD OF THE STOCK AS ON 1.7.1999 BEING THE DATE ON WHICH TTK BI OMED LTD. GOT AMALGAMATED WITH THE ASSESSEE COMPANY, THE LEARNED AUTHORIZED R EPRESENTATIVE DREW OUR ATTENTION TO PAGE 77 OF THE PAPER BOOK FILED BY THE ASSESSEE WHICH WAS THE COPY OF THE SCHEDULE 7 TO THE BALANCE SHEET OF TTK BIOME D LTD. FOR THE PERIOD ENDED 30-06-1999 WHEREIN THE CURRENT ASSETS, MORE SPECIFI CALLY THE INVENTORIES HAVE BEEN VALUED AT RS. 6,91,58,608/-. IT WAS THE SUBMI SSION THAT THIS WAS THE FIGURE WHICH WAS ADOPTED BY THE ASSESSEE AS ON 1.7.1999 AN D THERE WAS NO ERROR IN THE ADOPTION OF THE OPENING STOCK OF TTK BIOMED LTD. AF TER AMALGAMATION. HE FURTHER DREW OUR ATTENTION TO PAGE 4 OF THE ASSESSM ENT ORDER DATED 31.12.2007 TO SHOW THAT THE AO HAD ERRONEOUSLY TAKEN THE FIGUR E OF RS. 6,91,58,608/- AS ON 1.4.1999 WHEREAS THE FIGURE AS ON 30.6.1999 WAS RS. 6,91,58,608/-. IT WAS THE SUBMISSION THAT THE LEARNED CIT(A) HAD ALSO CONSIDE RED THE SUBMISSIONS AND HAD DELETED THE ADDITION IN PAGE 9, PARA 7.5 OF HIS ORD ER. IT WAS ALSO THE SUBMISSION THAT ALL THE PARTICULARS HAVE ALSO BEEN DISCLOSED I N THE RETURN FILED AND AS THE AO HAD NOT SHOWN THAT THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ITA NO.369(/MDS/2009 5 FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR TH E ASSESSMENT, THE REOPENING AFTER THE EXPIRY OF 4 YEARS WAS BAD IN LAW. 7. IN RESPECT OF THE SECOND REASON WHICH WAS THE EX CESS GRANT OF DEPRECIATION, IT WAS THE SUBMISSION THAT THE AO HAD FAILED TO APPRECIATE THAT THE DEPRECIATION HAD BEEN CALCULATED BY APPLYING THE FI FTH PROVISO TO SECTION 32(1) AND CONSEQUENTLY AS PER THE SAID PROVISO THE DEPREC IATION RELATABLE TO TTK BIOMED LTD. FOR THE 3 MONTHS PERIOD WAS APPORTIONED TO THE ACCOUNTS OF TTK BIOMED AND ONLY THE BALANCE HAD BEEN CLAIMED BY THE ASSESSEE. HE DREW OUR ATTENTION TO THE ORDER OF THE LEARNED CIT(A) IN PAG E 11 WHEREIN THE WORKING OF THE DEPRECIATION HAD ALSO BEEN QUANTIFIED AND SHOWN . IT WAS THE SUBMISSION THAT THE REASON AS RECORDED BY THE AO ON THIS COUNT WAS ALSO WRONG. 8. IN RESPECT OF THE THIRD REASON BEING THE SUBSIDY RECEIVED TO AN EXTENT OF RS. 19,52,760/- IT WAS THE SUBMISSION THAT THE ASSE SSEE HAD NOT RECEIVED ANY SUBSIDY AND THE SUBSIDY WHICH WAS BEING TALKED ABOU T WAS THE SUBSIDY RECEIVED DURING 1982-83, 1990-91 AND 1991-92 BY M/S. TTK BIO MED LTD. AND WHICH WAS RECORDED IN THE BALANCE SHEET OF TTK BIOMED LTD. AS SUBSIDY. IT WAS THE SUBMISSION THAT AFTER THE AMALGAMATION THE BALANCE SHEET OF TTK BIOMED LTD. THE CAPITAL RESERVES LYING IN THE BALANCE SHEET OF TTK BIOMED LTD. HAVE BEEN TAKEN OVER BY THE ASSESSEE AND SHOWN UNDER THE HEAD CAPITAL RESERVES. IT WAS THE SUBMISSION THAT THE LEARNED CIT(A) HAD ALSO VER IFIED THE SAME AND HAD GIVEN ITA NO.369(/MDS/2009 6 A FINDING IN PAGE 13 PARA 9.7 OF HIS ORDER AND CONS EQUENTLY THIS REASON FOR REOPENING THE ASSESSMENT WAS ALSO INVALID. 9. IN RESPECT OF THE FOURTH REASON BEING THE CARRIE D FORWARD OF DEPRECIATION AND BUSINESS LOSS OF TTK BIOMED LTD. IT WAS THE SUB MISSION THAT AS PER SECTION 72 AMENDED WITH EFFECT FROM 1.4.2000 THE CONTINUATI ON OF THE SAME BUSINESS HAD BEEN OMITTED WITH EFFECT FROM 1.4.2000 AND CONS EQUENTLY THE CARRIED FORWARD UNABSORBED DEPRECIATION AND BUSINESS LOSS W AS LIABLE TO BE ALLOWED IN THE HANDS OF THE ASSESSEE. IT WAS THE SUBMISSION T HAT THE PROVISIONS OF SECTION 72A HAD NOT BEEN INVOKED BY THE AO FOR THE PURPOSE OF REOPENING AND CONSEQUENTLY THE PROVISIONS OF SECTION 72A COULD NO T BE CONSIDERED. IT WAS THE FURTHER SUBMISSION THAT IN VIEW OF THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT V. A.V. THOMAS EXPORTS LTD. REPOR TED IN 296 ITR 603 (MAD) WHEREIN THE HONBLE HIGH COURT HAD HELD THAT SINCE THERE WAS NO FINDING BY THE AO THAT THERE WAS ANY FAILURE ON THE PART OF THE AS SESSEE RESULTING IN THE ESCAPEMENT OF INCOME, THE REOPENING WAS LIABLE TO B E QUASHED. IT WAS THE SUBMISSION THAT SIMILAR WAS THE VIEW OF THE HONBLE DELHI HIGH COURT UIN THE CASE OF HARYANA ACRYLIC MANUFACTURING CO. V. CIT & ANOTH ER REPORTED IN 220 CTR 450 (DEL). IT WAS THE SUBMISSION THAT IN THE SAID DECI SION IT WAS HELD THAT THERE WAS NO WHISPER IN THE REASONS SUPPLIED TO THE ASSESSEE THAT INCOME ESCAPED ASSESSMENT BY REASONS OF THE ASSESSEES FAILURE TO MAKE A FULL AND TRUE DISCLOSURE OF ALL MATERIAL FACTS NECESSARY FOR ASSE SSMENT AND CONSEQUENTLY, THE ITA NO.369(/MDS/2009 7 NOTICE ISSUED U/S. 148 BEYOND THE 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR WAS BARRED BY LIMITATION AND HENCE WITHOUT JURISDICTION. THUS IT WAS THE SUBMISSION THAT THERE WAS NO MENTION IN THE REASONS RECORDED FOR REOPENING THAT THE ASSESSEE HAD NOT MADE A TRUE AND FULL DISCLOSURE THE REOPENING WAS LIABLE TO BE QUASHED. IT WAS THE FUR THER SUBMISSION THAT IN THE ORIGINAL ASSESSMENT PASSED ON 18.03.2003 THE ISSUE OF BROUGHT FORWARD LOSSES OF AMALGAMATING COMPANY TTK BIOMED LTD. HAD BEEN CONSI DERED AND AS THE DETAILS OF THE BROUGHT FORWARD LOSSES WERE NOT AVAILABLE TH E SAME HAD BEEN DISALLOWED SUBJECT TO VERIFICATION. IT WAS THE FURTHER SUBMIS SION THAT THE SAME HAD ALSO BEEN VERIFIED AND AN ORDER U/S. 154 WAS PASSED ON 1 3.08.2003 GRANTING THE ASSESSEE SET OFF OF UNABSORBED DEPRECIATION AND BUS INESS LOSS OF M/S. TTK BIOMED LTD., THE AMALGAMATING COMPANY. IT WAS THUS SUBMITTED THAT ALL NECESSARY MATERIALS FOR COMPLETING THE ASSESSMENT H AD BEEN PLACED BEFORE THE AO AT THE TIME OF ORIGINAL ASSESSMENT ITSELF AND TH ERE BEING NO ALLEGATION OF NON- DISCLOSURE OF TRUE AND MATERIAL FACTS BY THE ASSESS EE FOR THE COMPLETION OF THE ASSESSMENT, THE REOPENING BY ISSUE OF NOTICE UNDER SECTION 148 ON 29.3.2007 WAS LIABLE TO BE QUASHED. 10. IN REPLY, THE LEARNED DR SUBMITTED THAT THE DET AILS WERE NOT PROPERLY DISCLOSED. IT WAS THE SUBMISSION THAT THE FACT THA T IN THE COURSE OF ORIGINAL ASSESSMENT THE AO HAD MENTIONED THAT THE BROUGHT FO RWARD LOSSES OF THE AMALGAMATING COMPANY TTK BIOMED LTD. WAS DISALLOWED AND WOULD BE ITA NO.369(/MDS/2009 8 CONSIDERED AFTER GETTING THE RECORDS FROM THE ERSTW HILE AO OF TTK BIOMED LTD. SHOWED THAT ALL THE NECESSARY MATERIAL FACTS WERE N OT BEFORE THE AO WHILE COMPLETING THE ORIGINAL ASSESSMENT. IT WAS THE FURT HER SUBMISSION THAT THE RECTIFICATION ORDER PASSED ITSELF SHOWED THAT THE N ECESSARY MATERIAL HAD TO COME FROM THE AO OF TTK BIOMED, MUMBAI AND THE ASSESSEE WAS UNABLE TO PRODUCE ALL THE DETAILS NECESSARY. IT WAS THE FURTHER SUBMISSI ON THAT THE PROVISIONS OF SECTION 72 WAS CONTROLLED BY THE PROVISIONS OF SEC. 72A AND INSOFAR AS SEC. 72A RELATES TO THE CARRIED FORWARD AND SET OFF OF ACCUM ULATED LOSSES AND UNABSORBED DEPRECIATION ALLOWANCES ON AMALGAMATIONS OR DE-MERG ERS AND HAD CONTAINED THE NON OBSTANTE CLAUSE NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT. IT WAS THE SUBMISSION THAT THE REOPE NING WAS VALID AT LEAST IN RESPECT OF THE FOURTH ISSUE BEING THE CARRIED FORWA RD OF DEPRECIATION AND BUSINESS LOSS. 11. IN REPLY THE AUTHORIZED REPRESENTATIVE SUBMITTE D THAT THE REASON RECORDED DID NOT SHOW THAT SECTION 72A WAS BEING INVOKED. 12. IN RESPECT OF THE DEPARTMENTAL APPEAL THE REVEN UE HAS RAISED THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LEARNED CIT(A) IS CONTRARY TO LAW AND FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO.369(/MDS/2009 9 2.1 THE LEARNED CIT(A) ERRED IN DIRECTING THE ASSES SING OFFICER TO ALLOW THE SET OFF OF LOSSES/UNABSORBED DEPRECIATION OF M/S. TTK BIOMED LTD. 2.2 THE LEARNED CIT(A) FAILED TO CONSIDER THE ORDER OF THE CENTRAL BOARD OF DIRECT TAXES IN F.NO. SA/2005A AND PAC-I DATED 28.5.2007 BY WHICH THE ASSESSEE IS NOT ENTITLED FOR THE SET OFF OF LOSS/DEPRECIATION O F M/S. TTK BIOMED LTD. SINCE THE ASSESSEE HAS NOT COMPLIED WITH THE PROVISIONS OF SECTION 72A. 3.1 THE LEARNED CIT(A) ERRED IN DIRECTING THE ASSES SING OFFICER TO ALLOW DEDUCTION OF OPENING STOCK OF RS. 6,91,58,608/- ALLEGEDLY WITH M/S. TTK BIOMED LTD. A S ON 1.7.1999. 3.2 THE LEARNED CIT(A) ERRED IN ACCEPTING EXISTENCE OF STOCK MERELY ON THE BASIS OF ACCOUNT STATEMENT FURNISHED BY ITO, MUMBAI WITHOUT ALLOWING THE OFFIC ER TO EXAMINE THE RECORD OF THE AMALGAMATING COMPANY. 3.3 THE LEARNED CIT(A) ERRED OUGHT TO HAVE SEEN TH AT THE TTK BIOMED LTD. HAD BEFORE ITS MERGER SOLD THE MANUFACTURE OF MEDICAL DEVICES TO TTK MAERSK MEDICA L LTD. TO RS.21 CRORES BY AGREEMENT DATED 30.9.1996 A ND ONLY PART OF THE ASSETS WERE TAKEN OVER BY THE ASSESSEE. SUBSEQUENTLY THE ASSESSEE ALSO ENTERED I NTO AGREEMENT WITH LONDON INTERNATION GROUP FOR TRANSFE R OF CONDOM MANUFACTURING BUSINESS AND RECEIVED RS. 3.44 CRORES AS NON COMPETE FEE. THE LEARNED CIT(A) OUGHT TO HAVE COME TO A DECISION ONLY ON EXAMINATIO N OF THOSE AGREEMENTS. ITA NO.369(/MDS/2009 10 4. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE LEARNED CIT(A)M MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. IT WAS SUBMITTED BY THE LEARNED DR THAT IN RESPECT OF GROUNDS NO. 2.1 AND 2.2. BEING AGAINST THE ORDER OF THE LEARNED CIT(A) IN DIRECTING THE AO TO ALLOW THE SET OFF OF THE LOSSES/UNABSORBED DEPRECIA TION OF M/S. TTK BIOMED LTD., THE ASSESSEE HAD MADE AN APPLICATION T O THE CBDT FOR THE RELAXATION OF THE CONDITIONS OF SECTION 72A(2)(B)(I II) OF THE INCOME-TAX ACT, 1961 READ WITH RULE 9C(A) OF THE INCOME-TAX RULES, 1962 ON 29-03-2005. IT WAS THE SUBMISSION THAT THE SAID PETITION OF THE ASSESSEE HAD ALSO BEEN REJECTED. IT WAS THE SUBMISSION THAT AS PER SECTIO N 72A THE BUSINESS OF THE AMALGAMATING COMPANY SHOULD CONTINUE AND AS PER RULE 9C THE ASSESSEE SHOULD MANUFACTURE OR PRODUCE THE ARTICLES TO THE EXTENT OF AT LEAST 50% OF THE INSTALLED CAPACITY. THE LEARNED D R DREW OUR ATTENTION TO THE CHART AT PAGE 18 OF THE ORDER OF THE LEARNED CI T(A) IN RESPECT OF THE PRODUCTION DETAILS TO SHOW THAT OUT OF 5 YEARS AFT ER TAKE OVER THE ASSESSEE HAD NOT COMPLIED WITH THE PROVISIONS OF RU LE 9C AND AFTER AMALGAMATION THE ASSESSEE COMPANY HAD NOT MAINTAINE D THE 50% LEVEL PRODUCTION OF THE INSTALLED CAPACITY. IT WAS THE S UBMISSION THAT AS THERE ITA NO.369(/MDS/2009 11 WAS VIOLATION OF THE PROVISIONS OF RULE 9C THE ASSE SSEE WAS NOT ENTITLED TO THE SET OFF OF THE CARRIED FORWARD LOSSES AND UNABS ORBED DEPRECIATION. 13. IN REPLY THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE DISALLOWANCE OF THE CARRIED FORWARD OF THE UNABSORB ED DEPRECIATION AND BUSINESS LOSSES, IF ANY, ON ACCOUNT OF THE VIOLATIO N OF RULE 9C WOULD HAVE BEEN DONE ONLY AT THE END OF THE 5 YEARS FROM THE D ATE OF AMALGAMATION. IT WAS THE SUBMISSION THAT THE SET OFF SHOULD HAVE BEEN PERMITTED FOR THE FIRST YEAR AND THE DISALLOWANCE, IF ANY, COULD HAVE BEEN CONSIDERED ONLY IN THE FIFTH YEAR. FOR THIS PROPOSITION HE RELIED UPO N THE DECISION OF THE MADRAS HIGH COURT IN THE CASE OF CIT V. KUMUDAM ENDO WMENTS (242 ITR 159) WHEREIN IN RESPECT OF EXEMPTIONS IN RESPECT OF CHARITABLE AND RELIGIOUS TRUSTS IT HAD BEEN HELD BY THE HONBLE HI GH COURT THAT THE TIME LIMIT FOR DISINVESTMENT IN SHARES BY CHARITABLE TR UST HAD BEEN ALLOWED TILL 31-3-1993 EVEN THOUGH THE AMENDMENT HAD BEEN DONE B Y THE FINANCE ACT, 1992 TO HAVE RETROSPECTIVE EFFECT FROM 1.4.198 3. THE HONBLE HIGH COURT HAD HELD THAT FOR THE ASSESSMENT YEAR 1986-87 THOUGH THE ASSESSEE WAS HOLDING THE INVESTMENTS CONTRARY TO SECTION 11( 5), TILL SUCH TIME FOR DISINVESTMENT WAS AVAILABLE UPTO 31.3.1993 THE EXEM PTION COULD BE DENIED. IT WAS THE SUBMISSION THAT THE ASSESSEE HA D ATTAINED MANUFACTURING AT 50% OF THE INSTALLED CAPACITY DURI NG THE THIRD AND FOURTH YEAR AND CONSEQUENTLY THE CARRIED FORWARD AND SET O FF OF THE UNABSORBED ITA NO.369(/MDS/2009 12 DEPRECIATION AND BUSINESS LOSS IN RESPECT OF THE AM ALGAMATING COMPANY, TTK BIOMED LTD. WAS LIABLE TO BE ALLOWED. IT WAS T HE ALTERNATE SUBMISSION THAT IF THE UNABSORBED DEPRECIATION AND BUSINESS LO SS WAS NOT ALLOWABLE, THEN IN VIEW OF THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT V. SILICAL METALLURGIC LTD. (324 ITR 29 (MA D) THE UNABSORBED DEPRECIATION WAS LIABLE TO BE ADDED TO THE WRITTEN DOWN VALUE AND DEPRECIATION GRANTED THEREON. 14. IN RESPECT OF GROUNDS NO. 3.1 AND 3.2 THE LEARN ED DR VEHEMENTLY SUPPORTED THE ORDER OF THE AO. IT WAS THE SUBMISSI ON THAT THE OPENING STOCK OF TTK BIOMED LTD. AS ON 1.7.1999 SHOULD ONLY BE CONSIDERED. 15. IN REPLY THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE AMOUNT OF RS. 6,91,58,608/- WAS THE VALUE OF THE OP ENING STOCK IN THE HANDS OF TTK BIOMED LTD. AS ON 1.7.1999 AS HAD BEEN DISCLOSED IN THE BALANCE SHEET. HE VEHEMENTLY SUPPORTED THE ORDER O F THE LEARNED CIT(A). 16. IN RESPECT OF GROUND NO.3.3 IT WAS SUBMITTED TH AT THAT M/S. TTK BIOMED LTD. HAD SOLD THE BUSINESS OF MANUFACTURING OF MEDICAL DEVICES TO M/S. TTK MAERSK MEDICAL LTD. BEFORE THE MERGER AND CONSEQUENTLY ONLY PART OF THE ASSETS WERE TAKEN OVER BY THE ASSESSEE COMPANY ON ACCOUNT OF AMALGAMATION. IT WAS THE FURTHER SUBMISSION THA T SUBSEQUENT TO THE AMALGAMATION THE ASSESSEE COMPANY HAD ALSO ENTERED INTO AN AGREEMENT WITH M/S LONDON INTERNATIONAL GROUP (LIG) FOR THE T RANSFER OF THE CONDOM ITA NO.369(/MDS/2009 13 MANUFACTURING BUSINESS AND HAD RECEIVED RS. 3.44 CR ORES AS NON-COMPETE FEE WHICH SHOWED THAT AT THE TIME OF THE AMALGAMATI ON ITSELF THE ASSESSEE HAD NO INTENTION TO CONTINUE WITH THE BUSINESS OF M /S. TTK BIOMED LTD. THE LEARNED DR DREW OUR ATTENTION TO PAGE 3 OF THE DEPARTMENTAL PAPER BOOK WHICH WAS THE COPY OF THE AGREEMENT ENTERED IN TO BETWEEN LIG AND TTK BIOMED LTD. AND THE ASSESSEE IN RESPECT OF THE NON-COMPETE FEE FOR NOT COMPETING IN THE RUBBER CONTRACEPTIVES MANUFACT URED BY M/S. TTK BIOMED LTD. IN 2000. IT WAS THE SUBMISSION THAT AS PER SECTION 72A, AFTER THE AMALGAMATION THE ASSESSEE SHOULD TAKE OVER AND ALSO CONTINUE THE BUSINESS OF THE AMALGAMATING COMPANY WHEREAS THE FA CT THAT NON COMPETE AGREEMENTS HAVE BEEN ENTERED INTO SHOWS THA T THERE WAS A TOTAL INTENTION TO DISCONTINUE THE BUSINESS AND CONSEQUEN TLY THE CARRIED FORWARD AND SET OFF OF THE UNABSORBED DEPRECIATION AND BUSI NESS LOSSES WAS NOT PERMISSIBLE. 17. IN REPLY THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE NON-COMPETE FEE WAS PAYABLE TO THE AMALGAMATING COM PANY AND CONSEQUENTLY THE SAME COULD NOT BE HELD AGAINST THE ASSESSEE. HE VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED CIT(A ). 18. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT T HE OUTSET IT MAY BE MENTIONED HERE THAT THE REASONS RECORDED FOR REOPEN ING THE ASSESSMENT ARE NOT PLACED BEFORE US. THE PARAGRAPHS REFERRED TO IN THE ASSESSMENT ITA NO.369(/MDS/2009 14 ORDER WHICH HAVE BEEN EXTRACTED ABOVE ARE NOT MENTI ONED BY THE AO AS REASONS RECORDED FOR RE-OPENING THE ASSESSMENT. TH EY HAVE BEEN RECORDED AS THE ISSUES WHICH WERE NOTED AND DUE TO WHICH INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. IN THESE CIRCUMSTANCES THE SUBMISSION THAT THERE IS NO FINDING OF THE AO IN TH E REASONS RECORDED THAT THE ASSESSEE HAS NOT TRULY AND FULLY DISCLOSED ALL MATERIAL FACTS FOR THE PURPOSE OF ITS ASSESSMENT, THE GROUND TAKEN NO MORE SURVIVES AND THE SAME IS REJECTED. HERE WE MAY ALSO MENTION THAT IT IS NOT THE CLAIM OF THE ASSESSEE THAT THE REASONS RECORDED HAVE NOT BEEN PR OVIDED TO THE ASSESSEE. 19. NOW WE WILL CONSIDER EACH OF THE ISSUES WHICH H AVE BEEN RAISED BY THE AO, THE FIRST BEING THAT THE COMPANY HAS ADOPTE D THE OPENING STOCK OF TTK BIOMED LTD. AS ON 1.4.1999 INSTEAD OF THE STOCK AS ON 1.7.1999 RESULTING IN UNDER ASSESSMENT OF RS. 6,91,58,608/-. A PERUSAL OF THE BALANCE SHEET AND SCHEDULE 7 THERETO OF TTK BIOMED LTD. AS ON 30.6.1999 CLEARLY SHOWS THAT THE CLOSING BALANCE SH OWN IS AS ON 30.6.1999 AT RS. 6,91,58,608/-. THUS THE OPENING STOCK AS ON 1.7.1999 WOULD BE AT RS. 6,91,58,608/-. IN THE CIRCUMSTANCE S WE ARE OF THE VIEW THAT THE ASSESSEE HAS ADOPTED THE OPENING STOCK OF TTK BIOMED LTD. AS ON 1.7.1999 AT RS. 6,91,58,608/- AND SUCH FIGURE IS NOT THE OPENING STOCK AS ON 1.4.1999. THEREFORE THE ISSUE AS NOTED IN TH E ASSESSMENT ORDER ITA NO.369(/MDS/2009 15 BEING THE FIRST ISSUE IS HELD AGAINST THE REVENUE. CONSEQUENTLY, GROUNDS NO. 3.1 AND 3.2 OF THE REVENUES APPEAL STAND DISMI SSED. 20. COMING TO THE SECOND ISSUE BEING EXCESS GRANT O F DEPRECIATION ON PLANT AND MACHINERY TRANSFERRED BY TTK BIOMED LTD. TO THE ASSESSEE COMPANY TO THE EXTENT OF RS. 5,51,303/- IT IS NOTIC ED THAT THE ASSESSEE HAS COMPLIED WITH THE 5 TH PROVISO TO SECTION 32. IT IS ALSO NOTICED THAT TH E LEARNED CIT(A) HAS BROUGHT OUT THE WORKING OF THE D EPRECIATION IN PAGE 11 IN PARA 8.8 OF HIS ORDER. THIS WORKING HAS ALSO NO T BEEN DISPUTED BY THE REVENUE. IN THE CIRCUMSTANCES, IT CANNOT BE SAID T HAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT ON ACCOUNT OF THE EXC ESS GRANT OF DEPRECIATION ON THE PLANT AND MACHINERY TRANSFERRED BY TTK BIOMED LTD TO THE ASSESSEE COMPANY. WE MAY ALSO MENTION HERE THA T THE LEARNED CIT(A) HAS DELETED THE ADDITION MADE ON THIS COUNT AND THE REVENUE HAS NOT PREFERRED ANY GROUND AGAINST SUCH DELETION. 21. COMING TO THE THIRD ISSUE BEING THE SUBSIDY REC EIVED BY THE ASSESSEE COMPANY OF RS. 19,52,760/- IT IS NOTICED T HAT THE SAID SUBSIDY HAS BEEN RECEIVED BY TTK BIOMED LTD. DURING THE YEA RS 1982 AND 1991 AND THE ASSESSEE HAS ONLY AFTER AMALGAMATION SHOWN THE SAME UNDER CAPITAL RESERVES. IN THE CIRCUMSTANCES AS THE SUBS IDY RECEIVED ARE NOT THE INCOME OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEAR THE FINDING OF THE LEARNED CIT(A) IN DELETING THE SAME IS FOUND TO BE CORRECT AND ALSO THE ITA NO.369(/MDS/2009 16 SAME DOES NOT RESULT IN ESCAPEMENT OF INCOME WHICH GIVES ROOM FOR REOPENING. WE MAY ALSO MENTION HERE THAT THE ORDER OF THE LEARNED CIT(A) IN DELETING THIS ADDITION HAS ALSO BEEN ACCE PTED BY THE REVENUE INSOFAR AS NO GROUND HAS BEEN RAISED AGAINST SUCH D ELETION. 22. COMING TO THE FOURTH ISSUE BEING AGAINST THE SE T OFF OF THE UNABSORBED BUSINESS LOSS AND CARRY FORWARD OF DEPRE CIATION RELATING TO THE BUSINESS OF TTK BIOMED LTD. IT IS NOTICED THAT THE ASSESSEE HAS CHALLENGED THAT SECTION 72 HAS BEEN CONSIDERED AND SECTION72A HAS NOT BEEN INVOKED BY THE AO. A PERUSAL OF THE ISSUES RAISED BY THE A O DOES NOT SHOW THAT THE AO HAS CONSIDERED ONLY SECTION 72 AND NOT 72A. HOWEVER, WHEN DECIDING THE ISSUE IN PAGE 6 THE AO HAS CONSIDERED ONLY SECTION 72. FURTHER THE CIT(A) HAS CONSIDERED SECTION72A. UNDI SPUTABLY, THE AMALGAMATION OF TTK BIOMED LTD. WITH THE ASSESSEE C OMPANY HAS TAKEN PLACE ON 1.7.1999. IN 2000 THE ASSESSEE ALONG WITH M/S. TTK BIOMED AND LONDON INTERNATIONAL GROUP (LIG) HAS ENTERED INTO N ON-COMPETE AGREEMENT WHEREBY BOTH TTK BIOMED LTD. AND THE ASSE SSEE HAS AGREED TO DISCONTINUE THE BUSINESS OF MANUFACTURE AND MARK ETING OF RUBBER CONTRACEPTIVES. THIS INFORMATION HAS NOT BEEN BROU GHT TO THE ATTENTION OF THE AO WHILE FILING ITS RETURNS. IN THESE CIRCUMSTA NCES CAN IT BE SAID THAT THE ASSESSEE HAS TRULY AND FULLY DISCLOSED ALL MATE RIAL FACTS NECESSARY FOR ITS ASSESSMENT? THE ANSWER WOULD AN EMPHATIC NO. ENTERING INTO AN ITA NO.369(/MDS/2009 17 AGREEMENT FOR NON-COMPETE BUSINESS IS IN THE REALM OF KNOWLEDGE OF THE ASSESSEE. THE ASSESSEE VERY WELL KNEW THAT AFTER A MALGAMATION THE ASSESSEE WOULD NOT BE CONTINUING THE BUSINESS OF TT K BIOMED LTD. THAT IS BEING TAKEN OVER. THE INTENTION OF THE ASSESSEE TO DISCONTINUE THE BUSINESS OF MANUFACTURE OF RUBBER CONTRACEPTIVES WH ICH WAS BEING DONE BY TTK BIOMED IS VERY CLEAR FROM THE AGREEMENT ITSE LF. THUS AT THE TIME OF AMALGAMATION ITSELF THE ASSESSEE KNEW THAT IT WO ULD BE VIOLATING THE PROVISIONS OF RULE 9C OF THE INCOME-TAX RULES, 1962 WHICH WOULD DISENTITLE THE ASSESSEE FOR THE CARRIED FORWARD AND SET OFF OF THE BUSINESS LOSS IN RESPECT OF TTKL BIOMED LTD. DUE TO THE APPL ICABILITY OF SECTION 72A. THE ASSESSEE ALSO VERY WELL KNEW THAT IT HAS VIOLAT ED THE PROVISIONS OF RULE 9C OF THE I.T. RULES INSOFAR AS ON 29-03-2005 THE ASSESSEE HAS APPROACHED THE CBDT WITH THE REQUEST FOR WAIVER OF THE CONDITIONS UNDER RULE 9C OF THE I.T.RULES/72A OF THE I.T.ACT AND THI S WAS ALSO REJECTED BY THE CBDT. AFTER THE ISSUE OF NOTICE U/S.148 ON 29.3 .2007 THE ASSESSEE HAD REQUESTED THAT THE RETURN ORIGINALLY FILED MAY BE C ONSIDERED AS THE RETURN IN RESPONSE TO THE 148 NOTICE AFTER KNOWING FULLY W ELL THAT IT HAD MADE THE REQUEST TO THE CBDT FOR THE WAIVER OF THE CONDITION IMPOSED UNDER RULE 9C OF THE I.T. RULES READ WITH SECTION 72A OF THE I .T.ACT. THE FACT THAT THE ASSESSEE HAS MADE THE APPLICATION TO THE CBDT F OR THE WAIVER CLEARLY SHOWS THAT ALL THE MATERIAL FACTS NECESSARY FOR THE ASSESSMENT WERE NOT ITA NO.369(/MDS/2009 18 TRULY AND FULLY PLACED BEFORE THE AO IN THE COURSE OF ORIGINAL ASSESSMENT OR IN THE RETURN ORIGINALLY FILED. IN THE CIRCUMST ANCES, THE REOPENING ON THIS COUNT WOULD BE VALID EVEN THOUGH 4 YEAR PERIOD HAS EXPIRED ON ACCOUNT OF THE APPLICABILITY OF THE PROVISO TO SECT ION147. A PERUSAL OF THE CHART AS EXTRACTED IN THE ORDER OF THE LEARNED CIT( A) IN PAGE 18 SHOWS AS UNDER : _________________________________________________ PRODUCTION DETAILS SURGEONS GLOVES: PERIOD INSTALLED CAPACITY ACTUAL PRO DN. CAPACITY IN MILLION PCS IN MI LLION PCS JULY-99 TO JUNE-00 30.00 10.14 JULY-00 TO JUNE-01 30,00 14.87 JULY-01 TO JUNE-02 30.00 17.85 JULY-02 TO JUNE-03 30.00 19.96 JULY-03 TO JUNE-04 30.00 2.54 _________________________________________________ A PERUSAL OF THE PROVISIONS OF SECTION 72A READ WIT H RULE 9C CLEARLY SHOWS THAT THE 5 YEARS FROM THE DATE OF AMALGAMATION AS MENTI ONED IN SECTION 72A(2)(III) IS THE ASSESSMENT YEARS. THIS IS BECAUSE RULE 9C(B) S PECIFIES THAT THE AMALGAMATED COMPANY SHALL FURNISH TO THE AO A CERTI FICATE IN FORM NO. 62 DULY VERIFIED BY AN ACCOUNTANT WITH REFERENCE TO THE BOO KS OF ACCOUNTS AND OTHER DOCUMENTS SHOWING PARTICULARS OF PRODUCTION ALONG W ITH THE RETURN OF INCOME FOR THE ASSESSMENT YEARS RELEVANT TO THE PREVIOUS YEARS DURING WHICH THE PRESCRIBED ITA NO.369(/MDS/2009 19 LEVEL OF PRODUCTION IS ACHIEVED AND FOR SUBSEQUENT ASSESSMENT YEARS RELEVANT TO THE PREVIOUS YEARS FALLING WITHIN 5 YEARS FROM THE DATE OF AMALGAMATION. THUS THE CHART AS PRODUCED BEFORE THE CIT(A) ITSELF IS N OT CORRECT. EVEN ACCORDING TO THE CHART AS PRODUCED BEFORE THE LEARNED CIT(A) IN THE YEARS 1,2 AND 5 THE ASSESSEE HAS FAILED TO ATTAIN THE NECESSARY 50% LEV EL OF PRODUCTION AND ONLY FOR THE YEARS 3 AND 4 THE ASSESSEE HAS ATTAINED SUCH LE VEL OF PRODUCTION. HOWEVER, IF THE CHART IS PREPARED CONSIDERING EACH OF THE AS SESSMENT YEARS AS PROVIDED IN RULE 9C THERE WOULD BE A FAILURE IN ALL 5 YEARS. C OMING TO THE ARGUMENT THAT THE SET OFF SHOULD BE ALLOWED IN THE FIRST YEAR AND ONL Y IF THERE IS A FAILURE AT THE END OF THE 5 YEARS, THE SET OFF SHOULD BE REVERSED, WE FEEL THAT SUCH A VIEW IS NOT POSSIBLE INSOFAR AS THE ACT HAS NOT PROVIDED THAT T HE 50% PRODUCTION IS TO BE ATTAINED WITHIN 5 YEARS. IT PROVIDES THAT IT SHOUL D HAVE ATTAINED THE 50% MINIMUM PRODUCTION FOR EVERY YEAR FOR 5 YEARS. IN ANY CASE, THIS NEED NOT BE LOOKED AT HERE IN THIS CASE INSOFAR AS, AS MENTIONE D EARLIER, THE ASSESSEE HAS EXPRESSED ITS INTENTION TO DISCONTINUE THE BUSINESS CONDUCTED BY TTK BIOMED LTD. IN THE INITIAL YEARS ITSELF BY ENTERING INTO T HE AGREEMENT WITH LIG. FURTHER IT IS IN ANY CASE NOTICED THAT IN THE FIRST YEAR THE ASSESSEE HAS FAILED TO ATTAIN THE REQUISITE 50% PRODUCTION AND THE ASSESSEE HAS FAILE D TO COMPLY WITH THE PROVISIONS OF SECTION 72A OF THE I.T.ACT READ WITH RULE 9C OF THE I.T. RULES AND CONSEQUENTLY THE ASSESSEE WOULD NOT BE ENTITLED TO THE CARRIED FORWARD AND SET OFF OF THE DEPRECIATION AND BUSINESS LOSSES. IN TH E CIRCUMSTANCES, THE FINDING OF ITA NO.369(/MDS/2009 20 THE LEARNED CIT(A) ON THIS ISSUE STANDS REVERSED AN D THAT OF THE AO RESTORED. THUS GROUND NOS. 2.1, 2.2 AND 3.3 OF THE REVENUES APPEAL STAND ALLOWED. 23. IN REGARD TO THE SUBMISSION THAT THE UNABSO RBED DEPRECIATION WAS LIABLE TO BE ADDED TO THE WRITTEN DOWN VALUE AND DEPRECIATION GRANTED THEREON BY FOLLOWING THE DECISION OF THE MADRAS HIGH COURT IN THE CASE OF CIT V. SILICAL METALLURGIC LTD., REFERRED TO SUPRA, IT IS NOTICE D FROM THE AGREEMENT ENTERED INTO BY THE ASSESSEE WITH LONDON INTERNATIONAL GROU P (LIG) THAT THE ASSESSEE HAS AGREED IN PARA 6 OF THE SAID AGREEMENT THAT THE EQUIPMENT RELATING TO THE MANUFACTURE OF THE RUBBER CONTRACEPTIVES LYING WITH TTK BIOMED LTD. SHALL BE DISMANTLED AND RENDERED UNSUABLE FOR MANUFACTURE OF RUBBER CONTRACEPTIVES AND AT THE OPTION OF LIG THE EQUIPMENT MAY BE SOLD/TRAN SFERRED TO LIG OR ANY OF THEIR ASSOCIATES AT THE VALUATION WHICH WILL NOT EXCEED I NTER COMPANY DEBT BETWEEN TTK-LIG AND BIOMED AT THE DATE OF THE AGREEMENT AND WHICH DEBT SHALL BE EXTINGUISHED TO THAT EXTENT. THUS THE ASSESSEE HAS NOT USED ANY OF THE EQUIPMENT IN RESPECT OF THE RUBBER CONTRACEPTIVES M ANUFACTURING PROCESS OF TTK BIOMED LTD. THE ASSESSEE HAS ALSO NOT PLACED BEFOR E US ANY EVIDENCE TO SHOW THAT SUCH MACHINERY HAD CONTINUED TO BE USED IN RES PECT OF THE MANUFACTURE OF RUBBER CONTRACEPTIVES. HERE IT MAY ALSO BE MENTION ED THAT THE CHART, WHICH HAS BEEN REFERRED TO EARLIER AND WHICH HAS BEEN EXTRACT ED FROM THE ORDER OF THE LEARNED CIT(A) FROM PAGE 18 OF HIS ORDER, IS IN RES PECT OF THE PRODUCTION DETAILS OF SURGEONS GLOVES AND NOT IN RESPECT OF RUBBER CON TRACEPTIVES. THUS THE ITA NO.369(/MDS/2009 21 ASSESSEE HAS PRACTICALLY STOPPED THE PRODUCTION OF RUBBER CONTRACEPTIVES AND HAS FAILED TO ATTAIN THE REQUISITE MINIMUM PRODUCTION O F SURGEONS GLOVES ALSO. IN THESE CIRCUMSTANCES IT IS FOUND THAT THE SAID DECIS ION WOULD NOT BE APPLICABLE. 24. GROUNDS NO.1 AND 4 OF THE REVENUES APPEAL ARE GENERAL IN NATURE AND AS NO SERIOUS SUBMISSIONS WERE RAISED, THEY ARE DISMIS SED AS NOT CONTESTED. IN THE CIRCUMSTANCES, THE APPEAL OF THE REVENUE IS PARTLY ALLOWED AND THE APPLICATION UNDER RULE 27 OF THE ITAT RULES RAISED BY THE ASSES SEE IS ADMITTED FOR ADJUDICATION AND DISMISSED ON MERITS. CONSEQUENTLY THE REOPENING OF THE ASSESSMENT IS UPHELD AND THE REVENUES APPEAL STAND S PARTLY ALLOWED. 25. THE ORDER WAS PRONOUNCED IN THE COURT ON 16-07- 2010. SD/- SD/- (PRADEEP PARIKH) (GEORGE MATHAN) VICE PRESIDENT JUDICIAL MEMBER CHENNAI, DATED THE 16 TH JULY, 2010. H. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A) (4) CIT (5) D.R. (6) GUARD FILE ITA NO.369(/MDS/2009 22