M/s Jaypee Greens Ltd., Noida V. DCIT, New Delhi

ITA 3778/DEL/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5580 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 04-03-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 04-09-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRADEEP MEHROTRA; ANUSHA KHURANNA
• Assessee Lawyers: PRAKASH NARAIN
• Keywords: Depreciation; Competent authority
• Section: 43B; 143(3); 32

Judgement Text

ITA NOS. 3545,3546,3547,3777,3778&3779/DEL/2009 A.YRS. 2002-03, 2003-04 & 2005-06 1 IN THE INCOMETAX APPELATE TRIBUNAL DELHI BENCH I: NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER & SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NOS. 3545, 3546 & 3547/DEL/2009 A.YRS. : 2002-03, 2003-04 & 2005-06 DCIT, VS. M/S JAYPEE GREENS LTD. CIRCLE-4(1), NEW DELHI G-BLOCK, SURAJ PUR KASNA ROAD, GREATER NOIDA (UP) [PAN : AAACJ8716D] AND ITA NOS. 3777, 3778 & 3779/DEL/2009 A.YRS. : 2002-03, 2003-04 & 2005-06 M/S JAYPEE GREENS LTD. VS. DCIT, CIRCLE -4(1) G-BLOCK, SURAJ PUR KASNA ROAD, NEW DELHI GREATER NOIDA (UP) [PAN : AAACJ8716D] (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. PRAKASH NARAIN, ADV. DEPARTMENT BY : MS. ANUSHA KHURANNA & PRADEEP MEHROTRA, DR O R D E R PER BENCH THESE CROSS APPEALS BY THE REVENUE AND ASSESSEE E MANATE OUT OF COMMON ORDER OF THE LD. CIT(A) FOR THE ASSESSMEN T YEARS 2002-03, 2003-04 & 2005-06. ITA NOS. 3545,3546,3547,3777,3778&3779/DEL/2009 A.YRS. 2002-03, 2003-04 & 2005-06 2 REVENUES APPEALS 2. THE COMMON RAISED IS THAT THE LD. CIT(A) ERRED IN ALLOWING THE DEPRECIATION OF GOLF COURSE INFRASTRUCTURE @25%. 2.1 THE ASSESSEE IN THIS CASE IS ENGAGED IN THE BUS INESS OF RUNNING AND OPERATING 18 HOLE GOLF COURSE IN GREATE R NOIDA ALONGWITH RESORT AND OTHER RELATED HOSPITALITY SERV ICES. DURING THE COURSE OF ASSESSMENT AO NOTED THAT ASSESSEE HAS CL AIMED DEPRECATION @25% ON THE GOLF COURSE. AO WANTED EX PLANATION REGARDING THE DEPRECIATION OF GOLF COURSES. ASSESE E EXPLAINED AS UNDER:- THE GOLF COURSE IS JUST NOT A PIECE OF LAND, BUT T HE SAME IS A SPECIALIZED STRUCTURE CONSTRUCTED ON THE LAND, WITH THE REQUIRED LEVELS OF UNDULATION AND OTHER TECHNIC AL REQUIREMENTS AS PER THE RULES OF THE GAME OF GOLF. IT IS A SPECIALIZED PROFESSIONAL ASSIGNMENT, WHICH ONLY A F EW IN INDIA ARE CAPABLE OF. FOR THIS PURPOSE, THE COMPAN Y HAD HIRED THE BEST IN THE WORLD OF GOLF I.E. GREG NORMA N TO PROVIDE THE SPECIALIZED INPUTS. EVEN THE GRASS ON T HE COURSE IS IMPORTED AND THE COURSE HAS AN ELABORATE NETWORK OF PIPES AND CHANNELS FOR THE PURPOSES OF N OT ONLY IRRIGATING THE PLACE BUT ALSO EFFICIENT REMOV AL OF EXCESS WATER, WHICH IS CONTROLLED THROUGH COMPUTERS . THUS, GOLF COURSE CONSTITUTES PLANT AND ELIGIBLE FOR DEPRECIATION @25% AS HAS BEEN ALLOWED TO THE ASSESSMENT. 2.2 AO DID NOT AGREE WITH THE ABOVE PROPOSITION. HE REFERRED TO THE CASE LAWS OF LAKE PALACE HOTELS AND MOTELS P LT D. (1997) 226 ITR 561; ANAND THEATRES (2000) 244 ITR 192; GWARIOR RAYONE SILK MFG. CO. (1992) 196 ITR 149(SC). AO CONCLUDED THA T STRUCTURE ITA NOS. 3545,3546,3547,3777,3778&3779/DEL/2009 A.YRS. 2002-03, 2003-04 & 2005-06 3 BUILT UP FOR GOLF COURSES AND ALSO HOSPITALITY SERV ICES IS NOT COVERED IN THE BLOCK OF ASSESSMENT PLANT, BUT IT IS COVER ED IN THE ASSET BUILDING WHICH IS USED BY THE HOTELS FOR HOSPITAL ITY SERVICES ON WHICH THE DEPRECIATION @20% IS ALLOWABLE. HENCE A O REJECTED THE ASSESSEES CLAIM OF DEPRECIATION @25% FOR ASSESSMEN T YEAR 2002-03 AND 2003-04 AND SUBSTITUTED IT FOR 20%. FOR ASSES SMENT YEAR 2005-06 THE AO ALLOWED DEPRECIATION APPLICABLE FOR THE COST OF BUILDING @10% AND REJECTED THE CLAIM OF @25%. 2.3 UPON ASSESSEES APPEAL LD. CIT(A) HELD AS UNDER :- RIVAL CONTENTIONS HAVE CAREFULLY BEEN CONSIDERED. AFTER CONSIDERING THE RIVAL SUBMISSIONS I FIND A SUBSTANT IAL SUPPORT IN THE CONTENTION OF THE LD. A.RS OF THE AP PELLANT. IT IS A FACT THAT THE ASSESSING OFFICER HAS MISCONC EIVED THE FACTS OF THE CASE. THE GOLF COURSE CONSIST O F THE OPEN LAND WITH SO MANY LEVELS AND OTHER TECHNICAL REQUIREMENTS AS REQUIRED TO PLAY THE GAME GOLF. IN ADDITION TO THAT IT HAS GOT MANY SUPERSTRUCTURE ON THAT, SUCH AS, HEALTH CLUB, GYM, RESTAURANT, BAR, BANQUET AND CONFERENCE HALL ETC. IT IS NOT UNDERSTOOD THAT HOW THE ASSESSING OFFICER GATHERED THE IMPRESSION THAT THE ASSESSEE COMPANY HAS CLAIMED THE DEPRECIATION NOT O NLY ON THE COST OF THE GOLF COURSE PLAY GROUND BUT ALSO ON THE SUPERSTRUCTURE LOCATED ON IT. IN FACT, THE APPE LLANT HAS CLAIMED THE DEPRECIATION @20% ONLY ON THE SUPERSTRUCTURES WHICH ARE PROVIDING VARIOUS HOSPIT ALITY SERVICES. THEREFORE, THE DEPRECIATION DISALLOWED O N THESE SUPERSTRUCTURES IS GROSSLY INCORRECT AS SAME HAS BE EN DONE UNDER MIS-APPRECIATION OF THE FACT. THE SECOND QUESTION ARISES IS IF THE GOLF COURSE IN ITSELF CAN BE TREATED AS A PLANT OR NOT. IN THIS REGARD I AGRE E WITH THE LD. AR OF THE APPELLANT THAT THE GOLF COURSE IS A SPECIALIZED SUPERSTRUCTURE CONSTRUCTED ON THE LAND WITH VARIOUS LEVELS OF UNDULATION, HOTELS, SMALL PONDS, ETC. ITA NOS. 3545,3546,3547,3777,3778&3779/DEL/2009 A.YRS. 2002-03, 2003-04 & 2005-06 4 WHICH HAVE BEEN CREATED AS PER THE RULES OF THE GAM E OF THE GOLF. IT IS CERTAINLY A SPECIALIZED PROFESSIONA L REQUIREMENT FOR PLAYING THE GOLF ON THE PIECE OF LA ND. THEREFORE, COST OF CREATING SUCH TECHNICAL REQUIREM ENT WILL CERTAINLY MAKE THE FIELD OF GOLF COURSE AS A PLANT ONLY. ALTHOUGH THE VARIOUS COURTS CITATIONS RELIED UPON BY THE LD. ARS OF THE APPELLANT ARE NOT DIRECTLY APPLI CABLE TO THE FACTS OF THE CASE BUT THERE IS AN OBLIQUE REFER ENCE FOR CONSIDERING THE GOLF COURSE AS A PLANT ONLY. IT IS ALSO APPRECIATED THAT THE GOLF COURSE IN THE APPELLANTS OWN CASE HAS BEEN TREATED AS A PLANT IN THE ASSESSMEN T YEAR 2001-02 ALSO BY THE ASSESSING OFFICER HIMSELF. IT HAS ALSO COME TO MY NOTICE THAT THE ISSUE OF TREATING T HE GOLF COURSE AS A PLANT HAS NOT BEEN DISPUTED IN MOST O F THE CASES WHICH ARE DOING THE BUSINESS OF RUNNING THE G OLF COURSE. AS FAR AS THE RELIANCE ON THE VARIOUS COUR TS CITATIONS MADE BY THE ASSESSING OFFICER IS CONCERNE D, I FIND THAT THEY ARE NOT APPLICABLE BECAUSE OF MESSED UP FACTS OF THE CASE. IN TOTALITY OF ALL THE FACTS AND CIRCUMSTANCES I AM OF THE VIEW THAT THE CLAIM OF TH E APPELLANT FOR PROVIDING THE DEPRECIATION @25% ON TH E GOLF COURSE IS IN ORDER. APPELLANTS SUCCEED ON TH IS GROUND OF APPEAL. 2.4 AGAINST THE ABOVE ORDER THE REVENUE IS IN APP EAL BEFORE US. 2.5 WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. THE AO IN THIS CASE HAS TREATED THE GOLF COURSE AKI N TO HOTEL BUILDING AND ALLOWED 20% DEPRECIATION FOR A.Y. 2002 -03 AND 2003- 04. FOR A.Y. 2005-06 HE HAS ALLOWED DEPRECIATION A S APPLICABLE TO BUILDING @10%. IT IS SETTLED LAW THAT TRIBUNAL CANN OT TAKE AWAY THE RELIEF THAT AO HAS GIVEN. NOW FURTHER WE FIND THAT ON THE SAME SET OF FACTS IN ASSESSEES OWN CASE, THE IMPUGNED ASSET WA S TREATED AS PLANT FOR A.Y. 2001-02 BY THE AO HIMSELF AND DEPREC IATION @25% WAS ALLOWED. THE ASSESSMENT WAS DONE U/S 143(3) OF THE IT ACT. ITA NOS. 3545,3546,3547,3777,3778&3779/DEL/2009 A.YRS. 2002-03, 2003-04 & 2005-06 5 IN THE PRESENT CASE, WE DO NOT FIND ANY CHANGE IN T HE CIRCUMSTANCES OF THE CASE FACTS OR LAW. UNDER THE CIRCUMSTANCE S, WE REFER TO HONBLE JURISDICTIONAL HIGH COURT DECISION IN THE C ASE CIT VS. DALMIA PROMOTERS DEVELOPERS (P) LTD. 281 ITR 346 WH EREIN IT WAS HELD THAT WHEN THERE IS ABSENCE OF ANY MATERIAL CHA NGE IN THE FACTS AND LAW, THE VIEW TAKEN FOR EARLIER YEAR CANNOT BE DISTURBED. IN THE PRESENT CASE WE FIND THAT NO SUCH MATERIAL CHANGE HAS BEEN BROUGHT OUT BEFORE US. SINCE THE DEPRECIATION @25 % ON THE SAID ASSET HAS BEEN ALLOWED FOR A.Y. 2001-02, WE DO NOT SEE ANY REASON TO DISTURB THE RATE TO 20% AS APPLIED BY THE AO. A CCORDINGLY, WE UPHOLD THE ORDER OF THE LD. CIT(A) TO ALLOW THE DEP RECIATION @25%. 2.6 IN THE RESULT, ALL THE REVENUES APPEALS ARE DISMISSED. ASSESSEES APPEALS:- (A.YRS. 2002-03 AND 2003-04) 3. THE COMMON GROUND FOR THE A.Y. 2002-03 AND 2003 -04 RAISED READS AS UNDER:- THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLO WANCE OF DEPRECATION CLAIMED @100% ON PURELY TEMPORARY ERECT IONS CONSISTING OF ADMINISTRATIVE OFFICE, GUEST HOUSE, S TAFF MESS, WORKSHOP, MOTOR ROOM, SUBSTATION FOR DG SETS, STORE , DHOBIGHAT, LABOUR COLONY, SECURITY BARRACKS AND SEC URITY POSTS FOR TEMPORARY PERIOD. HE FURTHER ERRED IN ALLOWIN G DEPRECATION ON THE ABOVE ASSETS ONLY @10% THEREBY T HE CONFIRMING THE DISALLOWANCE. 3.1 IN THIS CASE, DURING THE COURSE OF ASSESSMENT P ROCEEDINGS IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE ASSES SEE COMPANY HAD CLAIMED 100% DEPRECIATION ON VARIOUS CONSTRUCTI ON AMOUNTING TO ITA NOS. 3545,3546,3547,3777,3778&3779/DEL/2009 A.YRS. 2002-03, 2003-04 & 2005-06 6 RS. 2,22,74,699/- IN THE ASSESSMENT YEAR 2002-03 A ND OF RS. 1,00,84,466/- IN THE ASSESSMENT YEAR 2003-04. IN T HE ENQUIRY MADE BY THE ASSESSING OFFICER IN THE CLAIM MADE BY THE ASSESSEE COMPANY, IT WAS NOTICED THAT THE SO CALLED TEMPORAR Y CONSTRUCTION CONSISTED OF ADMINISTRATIVE OFFICE, GUEST HOUSES FO R SENIOR OFFICERS, STAFF MESS, WORKSHOP, METER ROOM, SUB-STATIONS FOR DG SETS, STORE, DHOBI GHAT, LABOUR COLONY, SECURITY BARRACKS AND SE CURITY POSTS SAID TO BE FOR TEMPORARY PERIOD. IT WAS ALSO ASCERTAINE D BY THE ASSESSING OFFICER THAT ALL THESE STRUCTURES WERE CONCRETE BU ILT UP STRUCTURE WHICH WERE USED REGULARLY BY THE ASSESSEE. THE ASSE SSING OFFICER WAS ALSO OF THE VIEW THAT SINCE THE ASSESSEE COMPAN Y SHALL BE REQUIRING ALL THE SUPPORTING STAFF TO BE USED IN TH ESE STRUCTURES FOR MAINTENANCE OF THE GOLF COURSE EVEN AFTER ITS CREA TION AND COMPLETION AND THEREFORE, THESE STRUCTURES CAN NOT BE CONSIDERED AS PURELY TEMPORARY ERECTION. IN VIEW OF THESE FACT S THE ASSESSING OFFICER ALLOWED DEPRECIATION @10% ON THE CONCRETE B UILT UP SURFACE BEING USED FOR OFFICE AND OTHER ACTIVITY AND DISAL LOWED 90% OF THE DEPRECIATION WHICH WORKED OUT AT RS. 2,00,47,230/- IN THE ASSESSMENT YEAR 2002-03 AND RS. 1,00,84,466/- IN TH E ASSESSMENT YEAR 2003-04. 3.2 UPON ASSESSEES APPEAL LD. CIT(A) HELD AS UNDER :- RIVAL CONTENTIONS HAVE CAREFULLY BEEN CONSIDERED. AFTER CONSIDERING THE RIVAL SUBMISSIONS I AM OF THE VIEW THAT THE NATURE OF THE BUILDINGS AND SUPERSTRUCTURES, SUCH A S, GUEST HOUSE, ADMINISTRATIVE OFFICE, OFFICERS MESS, SUB-S TATIONS FOR ITA NOS. 3545,3546,3547,3777,3778&3779/DEL/2009 A.YRS. 2002-03, 2003-04 & 2005-06 7 DG SETS, METER ROOM, WORKSHOP, ETC., CANNOT BE CONS IDERED AS TEMPORARY CONSTRUCTION. ALL THESE BUILDINGS ARE FIT TED WITH ALL FURNITURE AND FIXTURE. THEY ARE MADE OF CONCRETE A ND FRESHLY PURCHASED RAW-MATERIAL. IT HAS ALSO BEEN OBSERVED THAT THE LESSOR COMPETENT AUTHORITY HAS ALLOWED THE EXISTENC E OF CONTINUANCE OF THESE BUILDINGS NOT ONLY FOR FIVE Y EARS IN FIRST INSTANCE BUT HAD EXTENDED FOR FURTHER PERIOD AT THE REQUEST OF THE APPELLANT. ALTHOUGH THE FIRST SANCTIONED LETT ER ISSUED BY THE COMPETENT AUTHORITY WAS DATED 08.6.2000 BUT EV EN AFTER LAPSE OF NINE YEARS, ALL THE BUILDINGS ARE STILL IN EXISTENCE. THESE FACTS IN ITSELF SHOW THAT THESE STRUCTURE CAN NOT BE CONSIDERED TEMPORARY CONSTRUCTION EVEN BY STRETCH O F IMAGINATION. SINCE THE EXISTENCE OF THESE ASSETS IS FOR MORE THAN FIVE YEARS AS PER THE SANCTIONED LETTER OF TH E COMPETENT AUTHORITY WHICH IS FURTHER EXTENDABLE AS PER THE RE QUEST OF THE APPELLANT AND ALL THE ASSETS WERE CONCRETE STRUCTUR ES FITTED WITH ALL FURNITURE AND FIXTURES WHICH WERE USED AS FULLY FUNCTIONAL AND OPERATIVE FOR THE MENT PURPOSES, I A GREE WITH THE ASSESSING OFFICER THAT THEY CANNOT BE CONSIDERE D AS TEMPORARY STRUCTURE. THEREFORE, I SUBSCRIBE TO THE FINDINGS OF THE ASSESSING OFFICER THAT THEY ARE ELIGIBLE FOR DE PRECATION @10% ONLY. THE VARIOUS COURTS CITATIONS RELIED U PON BY THE LD. AR OF THE APPELLANT ARE NOT APPLICABLE TO THE F ACTS OF ITS CASE AT ALL. THE DISALLOWANCE OF DEPRECIATION MADE BY THE ASSESSING OFFICER FOR RS. 2,00,47,230/- IN THE ASSE SSMENT YEAR ITA NOS. 3545,3546,3547,3777,3778&3779/DEL/2009 A.YRS. 2002-03, 2003-04 & 2005-06 8 2002-03 AND OF RS. 1,00,84,466/- FOR THE ASSESSMENT YEAR 2003-04 STAND CONFIRMED. 3.3 AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL B EFORE US. 3.4 WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. LD. COUNSEL OF THE ASSESSEE RELIED UPON A LETTER IS SUED BY THE GREATER NOIDA INDUSTRIAL DEVELOPMENT AUTHROITY IN WHICH INTER-ALIA FOLLOWING WAS MENTIONED:- THE VALIDITY OF THIS SANCTION IS 5 YRS FROM THE DA TE OF LEASE I.E. UPTO 8.6.2005. APPLICANT SHALL BE REQUIRED TO REMOVE ALL TEMP STR UCTURES BEFORE APPLYING FOR OCCUPANCY CERTIFICATE OF THE DA TE OF SANCTION OF THE DRAWING ENCLOSED HEREWITH. 3.5 ON THE BASIS OF THE ABOVE SUBMISSIONS AND PLACI NG RELIANCE UPON DECISION OF THE ITAT, DELHI BENCH IN THE CA SE OF ITO VS. INDIA EXPORT HOUSE PVT LTD. REPORTED IN 9 TTJ 315 L D. COUNSEL CLAIMED THAT SINCE THE CONSTRUCTION WAS ON LEASE L AND FOR A SHORT PERIOD, THEY SHOULD BE TREATED AS TEMPORARY STRUCTU RES. 3.6 WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. WE FIND THAT RELIANCE BY THE LD. COUN SEL ON THE AFORESAID LETTER AND ITAT CASE LAW IS NOT APPLICAB LE TO THE PRESENT CASE AND THE SAME DO NOT HELP THE CASE OF THE ASSES SEE. THE SAID LETTER INTER-ALIA STATES THAT THE VALIDITY OF THE SANCTION WAS 5 YEARS AND THE APPLICANT SHALL BE REQUIRED TO REMOVE ALL T EMPORARY STRUCTURES BEFORE APPLYING FOR OCCUPANCY CERTIFICAT E. IN OUR ITA NOS. 3545,3546,3547,3777,3778&3779/DEL/2009 A.YRS. 2002-03, 2003-04 & 2005-06 9 CONSIDERED OPINION, THESE FACTS DO NOT IPSO-FACTOR PROVE THAT THE CONSTRUCTION WERE TEMPORARY. AS POINTED OUT BY LD. CIT(A) THE SAID STRUCTURES HAVE REMAINED SO EVEN AFTER THE EXPIRY O F 9 YEARS. IT IS A CATEGORICAL FINDING OF AUTHORITIES BELOW, LD. COUNS EL HAS HIMSELF AGREED THAT THE CONSTRUCTION WAS IN CEMENT AND THE SAME WAS PAKKA CONSTRUCTION. WE FIND THAT ASSESSEES RELIAN CE ON SHORT PERIOD OF THE LEASE TO TREAT THE PAKKA CONSTRUCTION AS TEMPORARY CONSTRUCTION IS ALSO NOT IN ACCORDANCE WITH THE MA NDATE OF THE LAW. EXPLANATION (1) OF SECTION 32 EVEN PROVIDES T HAT CONSTRUCTION OF STRUCTURE IN LEASE HOLD PREMISES ALSO SHOULD BE TREATED AS IF THE BUILDING WAS OWNED BY THE ASSESSEE. HENCE WE FIND THAT THERE IS NO INFIRMITY IN THE ORDERS OF THE AUTHORITIES BELOW ON THIS ISSUE AND ACCORDINGLY WE CONFIRM THE ORDER OF THE LD. CIT(A). 3.7 IN THE RESULT THE ASSESSEES APPEAL FOR THE ASS ESSMENT YEAR 2002-03 AND 2003-04 ARE DISMISSED. ASSESSMENT YEAR 2005-06 3.8 THE ISSUE RAISED IS THAT THE LD. CIT(A) ERRED I N OMITTING THE ADJUDICATION GROUNDS NOS. 1(II) AND 4 TAKEN IN GROU NDS OF APPEAL:- ITA NOS. 3545,3546,3547,3777,3778&3779/DEL/2009 A.YRS. 2002-03, 2003-04 & 2005-06 10 1(II) RS. 1,03,10,776/- DISALLOWED ON ACCOUNT OF I NTEREST PAID ON LOANS FROM FINANCIAL INSTITUTIONS. 4(I) THE LD. AO HAS ERRED ON FACTS AND IN LAW IN DI SALLOWING RS. 1,03,10,776/- OUT OF INTEREST PAID TO FINANCIAL INSTITUTIONS IN THE CURRENT YEAR. (II) THE SAID AMOUNT OF RS. 1,03,10,776/- FOR INTE REST PAID TO FINANCIAL INSTITUTIONS COMPRISES RS. 21,44,110/- FO R A.Y. 2002-03 AND RS. 81,66,666/- FOR A.Y. 2003-04. THE S AME WERE DULY ADDED BACK IN COMPUTATION OF TOTAL INCOME FOR A.Y. 2002-03 AND A.Y. 2003-04 RESPECTIVELY AS THE S AID AMOUNTS WERE NOT PAID DURING THOSE YEARS AND HENCE WERE GOVERNED BY THE PROVISIONS OF SECTION 43B OF T HE IT ACT. (III) THE AMOUNT OF RS. 1,03,10,776/- HAS RIGHTLY B EEN CLAIMED AS DEDUCTION IN THIS YEAR ON ACTUAL PAYMENT BASIS AS PER PROVISIONS OF SECTION 43B OF THE IT AC T. (IV) THE OBSERVATION OF LD. AO THAT INTEREST IS N OT COVERED UNDER THE PROVISION OF SECTION 43-B OF THE IT ACT A ND CANNOT BE CLAIMED ON THE BASIS OF PAYMENT IS CONTRA RY TO THE PROVISION OF CLAUSE (D) OF SECTION 43-B OF THE IT ACT. 3.9 WE HAVE HEARD BOTH THE COUNSELS AND PERUSED TH E RECORDS. BOTH THE COUNSELS FAIRLY AGREED THAT SINCE THE ABO VE GROUND TAKEN BY THE ASSESSEE BEFORE THE CIT(A) HAS NOT BEEN ADJU DICATED BY THE LD. CIT(A, IT WILL BE APPROPRIATE THAT THE ISSUE IS REMITTED TO THE FILES OF THE LD. CIT(A) TO CONSIDER THE ISSUE AND GIVE A FINDING THEREON. ACCORDINGLY, WE REMIT THIS ISSUE TO THE FILES OF T HE LD. CIT(A) TO CONSIDER THE SAME AND GIVE A FINDING. NEEDLESS TO A DD THAT THE ASSESSEE SHOULD BE GIVEN ADEQUATE OPPORTUNITY OF B EING HEARD. ITA NOS. 3545,3546,3547,3777,3778&3779/DEL/2009 A.YRS. 2002-03, 2003-04 & 2005-06 11 HENCE, THIS APPEAL FILED FOR THE ASSESSMENT YEAR 20 05-06 BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 4. IN THE RESULT, ALL THE APPEALS FILED BY THE REVENUE ARE DISMISSED AND APPEALS FILED BY THE ASSESSEE FOR THE A.Y. 2002-03 AND 2003-04 ARE DISMISSED AND FOR THE A.Y. 2005-06 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 09/03/2010 UP ON CONCLUSION OF THE HEARING. SD/- SD/- [C.L. SETHI] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 09/03/ 2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES