Thiru Arooran Sugars Ltd., CHENNAI V. ACIT, CHENNAI

ITA 382/CHNY/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5662 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 17-07-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 19-02-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAILENDRA MAMIDI
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Earning of tax free income; Capital expenditure
• Section: 14A; 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , , # BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER /. I.T.A. NOS. 286/MDS/2016 & 382/MDS/2015 / ASSESSMENT YEARS : 2005-06 & 2006-07 M/S. THIRUAROORAN SUGARS LTD., ELDORADO, V FLOOR, 112, MAHATMA GANDHI ROAD, NUNGAMBAKKAM, CHENNAI 34. [PAN: AAACT 2382B] VS. THE ASST COMMISSIONER OF INCOME TAX, COMPANY CIRCLE III(2), CHENNAI 600 034. ( / APPELLANT) ( / RESPONDENT) %& / APPELLANT BY : SHRI. R. VIJAYARAGHAVAN )*%& / RESPONDENT BY : SHRI. SAILENDRA MAMIDI, ADVOCATE & /DATE OF HEARING : 14.09.2017 & /DATE OF PRONOUNCEMENT : 08.12.2017 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE ASSESSEE FILED THESE APPEALS AGAINST THE ORDER S OF THE COMMISSIONER OF INCOME TAX 11, CHENNAI AND COMMISSIONER OF INC OME TAX-III, CHENNAI IN NEW ITA NO. 60/13-14/CIT(A)-11 DATED 30.11.2015 AND ITA NO. 866/13- 14/CIT(A)-3 DATED 31.10.2014 FOR ASSESSMENT YEARS 2 005-06 AND 2006-07, RESPECTIVELY. :-2-: ITA NOS. 286/MDS/2016& 382/MDS/2015 2. M/S. THIRUAROORAN SUGARS LTD., THE ASSESSEE, A M ANUFACTURER OF SUGAR, PURCHASES CANE FROM THE FARMERS. IN THE ASSESSMENT MADE FOR ASSESSMENT YEAR 2005-06, THE AO FOUND THAT THE ASSESSEE HAS DEBITED DIFFERENTIAL CANE COST FOR TIRUMANDANKUDI UNIT AT RS. 37,00,369/- AND A. CHIT TUR UNIT AT RS. 77,43,876/- AND CLAIMED THEM AS A DEDUCTION IN THE ASSESSMENT YEAR 2005-06. THE AO TOOK A VIEW THAT SINCE THE LIABILITY HAS NOT CRYSTALIZED IN THE PREVIOUS YEAR RELATING TO THE ASSESSMENT YEAR 2005-06, THE DEDUCTION CANNOT B E ALLOWED FOR ASSESSMENT YEAR 2005-06. WHILE, THE AO WAS FRAMING THE ASSESS MENT FOR ASSESSMENT YEAR 2006-07, THE ASSESSEE CLAIMED THE SAID SUM AS A LIA BILITY ON THE BASIS OF ACTUAL PAYMENT MADE TO THE FARMERS ON NOVEMBER, 2005, PLEA DING THAT THE EXPENDITURE HAS BECOME ACTUAL AND FINAL IN NOVEMBER, 2005 AND R EQUESTED THE AO TO ALLOW IT IN ASSESSMENT YEAR 2006-07. THE AO HELD THAT THE A DDITIONAL CANE PRICE RELATES TO SUGAR SEASON 2002-03 IE RELEVANT TO THE ASSESSM ENT YEAR 2003-04 AND THE LIABILITY HAVE BEEN APPROVED IN THE PREVIOUS YEAR R ELEVANT TO A Y 2003-04. THE AO HELD THAT SINCE THE ASSESSEE IS FOLLOWING MERCAN TILE SYSTEM , ITS CLAIM THAT SUCH PAYMENTS WERE MADE ON CASH BASIS DURING THE AS SESSMENT YEAR 2006-07 CANNOT BE ACCEDED TO AND OBSERVED THAT FOR ALLOWING THIS EXPENDITURE THE ASSESSEE MAY MOVE THE APPROPRIATE FORUM FOR MAKING THE CLAIM IN THE ASSESSMENT YEAR 2003-04. 2.1. FURTHER, IN THE ASSESSMENT YEAR 2005-06, THE ASSESSEE MADE THE PROVISION UNDER CLAUSE 5A OF THE SUGARCANE (CONTROL ) ORDER , 1966 WHICH IS THE ADDITIONAL PURCHASE CONSIDERATION FOR SUGARCANE PAY ABLE TO FARMERS. THE AO :-3-: ITA NOS. 286/MDS/2016& 382/MDS/2015 HELD IN THE ASSESSMENT ORDER FOR AY 2005-06 THAT S INCE IT IS ONLY A PROVISION, MEANT FOR 2004-05 SUGAR SEASON, NOT ACTUALLY PAID E VEN IN THE SUBSEQUENT YEARS AND HENCE SUCH CLAIM WAS NOT ALLOWABLE. WHILE, TH E AO WAS MAKING ASSESSMENT FOR ASSESSMENT YEAR 2006-07, THE ASSESSE E HAS STATED THAT THIS WAS A TENTATIVE CANE ADDITIONAL PRICE ENVISAGED FOR THE PAYMENT DURING MARCH, 2005 ACCOUNTS FINALISATION. BUT, SUBSEQUENTLY IN SEPTEMB ER, 2005, IT WAS WITHDRAWN AS NOT NECESSARY. THE ASSESSEE SUBMITTED THAT THE PROVISION ENTRY WAS A DEBIT IN THE ASSESSMENT YEAR 2005-06 , HOWEVER, THIS CLAI M WAS NOT ALLOWED BY THE AO WHILE MAKING THE ASSESSMENT FOR AY 2005-06. HENCE, IN AY 2006-07, THE DEBIT ENTRY MADE IN AY 2005-06 WAS REVERSED BY A CRED IT ENTRY AND HENCE IT SHOULD NOT BE TAKEN AS AN INCOME IN AY 2006-07 . THE AO H ELD THAT A PERUSAL OF THE PROFIT AND LOSS ACCOUNT SHOWS THAT THERE IS NO CRED IT ENTRY RELATABLE TO THE WITHDRAWAL OF THE PROVISION OF RS. 1,48,35,532/- AN D HENCE REJECTED THE ASSESSEES CLAIM IN AY 2006-07. 2.2 APART FROM THE ABOVE TWO ISSUES, IN ASSESSMENT YEAR 2006-07, THE ASSESSEE CLAIMED RAW SUGAR EXPENSES AT RS. 8,11,47, 809/- ON WHICH THE AO FOUND THAT TDS HAS NOT BEEN PAID WITHIN THE DUE DAT E BUT IT WAS PAID IN THE FINANCIAL YEAR 2007-08 ONLY. HENCE, HE DISALLOWED IT U/S. 40(A)(IA). THE ASSESSEE CLAIMED SHARE ISSUE EXPENSES AT RS. 4,65,649/- U/S. 35D. THE ASSESSING OFFICER DISALLOWED IT AS A CAPITAL EXPENDITURE RELYING ON T HE DECISION OF BROOKE BOND INDIA LTD [225 ITR 795]. FURTHER, THE ASSESSEE HAS RECEIVED DIVIDEND OF RS. 31,840/- AND CLAIMED SAME AS EXEMPT INCOME U/S. 10( 34). RELYING ON THE :-4-: ITA NOS. 286/MDS/2016& 382/MDS/2015 DECISION OF THE ITAT, MUMBAI IN THE CASE OF ITO VS. DAGA CAPITAL MANAGEMENT, MAX INVESTMENT LTD ETC., AND THE AO DISALLOWED RS. 32,673/- UNDER RULE 8D. AGGRIEVED, THE ASSESSEE FILED APPEALS BEFORE THE C IT(A) AGAINST THE ASSESSMENT ORDERS FOR AYS 2005-06 & 2006-07. 2.3. FOR AY 2005-06 , THE CIT(A) UPHELD THE DISALLO WANCE OF DIFFERENTIAL COST MADE BY THE AO AND ON THE ISSUE OF PROVISION FOR 5A PRICE ALSO THE CIT(A) UPHELD AOS DISALLOWANCE HOLDING THAT THE PROVISION HAS NO BASIS, IT IS AN UNASCERTAINED LIABILITY WHICH WAS NEVER MET BY THE ASSESSEE AND HENCE HE AGREES WITH THE AOS DECISION . FOR THE AY 2006-07, ON THE ISSUE OF DISALLOWANCE OF PROVISION FOR ADDITIONAL 5A CANE PRICE THE CIT(A) HELD THAT THERE WAS NO ADDITION MADE ON THIS ACCOUNT . SINCE, THE AO HIMSE LF HAS MENTIONED THAT THE APPELLANT CAN MAKEA CLAIM IN ASSESSMENT YEAR 2003- 04, THE CIT(A) HELD THAT ANY ADJUDICATION ON THE ASSESSEES GROUNDS ARE ON LY ACADEMIC IN NATURE AND HENCE, TREATED THEM AS DISMISSED, UPHELD THE DISALL OWANCES; MADE U/S. 40(A)(IA) AND U/S 35D, RELYING ON THE BOMBAY HIGH COURT DECI SION IN GODREJ & BOYCE MFG CO REPORTED IN 328 ITR 81 DELETED THE ADDITION MADE UNDER RULE 8D AND RELYING ON JURISDICTIONAL ITAT DECISION IN THE CASE CELEBRI TY FASHIONS LTD., IN ITA NO. 1318 & 1319/MDS/2011 DATED 30.03.2012 HELD THAT 5% OF DIVIDEND INCOME WOULD BE REASONABLE EXPENDITURE TO EARN THE DIVIDEN D INCOME. AGGRIEVED ON THESE APPEAL ORDERS OF THE CIT(A), THE ASSESSEE FI LED THESE APPEALS. :-5-: ITA NOS. 286/MDS/2016& 382/MDS/2015 3. FOR ASSESSMENT YEAR 2006-07, THE ASSESSEE FIL ED ADDITIONAL GROUNDS AND THE AR SUBMITTED THAT THE ASSESSEE HAD PROVIDED ADDITIONAL CANE PRICE AT RS. 2,14,44,515/- FOR AY 2005-06 AND HAD CLAIMED I T AS DEDUCTION . THIS HAS BEEN DISALLOWED AND THE ISSUE IS BEFORE THE INCOME TAX APPELLATE TRIBUNAL. FURTHER, THIS ADDITIONAL CANE PRICE HAD ACTUALLY BE EN PAID IN NOVEMBER,2005 RELEVANT TO THE ASSESSMENT YEAR 2006-07. IT IS SUBM ITTED THAT IN CASE, THE AMOUNT OF PROVISION IS DISALLOWED IN THE ASSESSMEN T YEAR 2005-06 ON THE GROUND THAT IT WAS ONLY A PROVISION, THE SAME MAY B E ALLOWED FOR THE ASSESSMENT YEAR 2006-07 IN WHICH THE PAYMENT WAS MA DE. FURTHER, THE AR SUBMITTED THAT THE ASSESSEE ESTIMATED THE ADDITIONA L CANE PRICE PAYABLE TO BE AT RS.1,48,35,532/ - AND CLAIMED IT AS A DEDUCTION IN ASSESSMENT YEAR 2005- 06. SUBSEQUENTLY, WHEN THE SUGAR YEAR WAS OVER, IT FOUND THAT THE ABOVE AMOUNT WAS EXCESS PROVISION AND THEREFORE THE ENTIR E AMOUNT OF RS.1,48,35,532/ - WAS REVERSED TO THE CREDIT OF THE PROFIT AND LOSS ACCOUNT AND BALANCE SHEET AS ON 31.03.2006. THIS WAS ASSESS ED AS INCOME FOR THE ASSESSMENT YEAR 2006-07. IT IS THE CONTENTION OF TH E ASSESSEE THAT IF THIS PROVISION IS NOT ALLOWED AS A DEDUCTION IN THE ASS ESSMENT YEAR 2005-06, THE SAME SHOULD NOT BE ASSESSED AS INCOME ON ITS REVERS AL IN THE ASSESSMENT YEAR 2006-07. THESE ADDITIONAL GROUNDS ARISE ON ACC OUNT OF AND CONSEQUENT TO THE DECISION TO BE TAKEN FOR THE ASSESSMENT YEAR 2005-06. AS IT IS MERELY A CONSEQUENTIAL TO THE DECISION FOR ASST YEAR 2005-06 AND ALL THE FACTS ARE AVAILABLE ON RECORD, IT IS PRAYED THAT THESE ADDITI ONAL GROUNDS MAY BE :-6-: ITA NOS. 286/MDS/2016& 382/MDS/2015 ADMITTED AND DECIDED ON MERITS FOR THE ASSESSMENT Y EAR 2006-07 AND RELIED ON THE FOLLOWING CASES. CIT VSM.K.YASHWANT SINGH (231 ITR 145 (DEL) NATIONAL THERMAL POWER CO LTD (229 ITR 383 (SC) 3.1 THE ADDITIONAL GROUNDS OF APPEAL ARE EXTRACTED AS UNDER: 1. THE DIFFERENTIAL AND ADDITIONAL CANE PRICE NOTI FIED BY THE GOVERNMENT ON 09.01.2003 AMOUNTING TO RS.21444515 S HOULD BE ALLOWED AS A DEDUCTION IN THE CURRENT YEAR OF PAYME NT IF THE SAME IS NOT ALLOWED FOR THE ASSESSMENT YEAR 2005-06 ON THE BASI S OF THE PROVISION MADE. 2 ESTIMATED STATUTORY MINIMUM PRICE OF RS.1,48,35,5 32/- REVERSED DURING THE YEAR SHOULD NOT BE TAXED AS INC OME IF THE SAME AMOUNT IS NOT ALLOWED AS A DEDUCTION FOR THE ASSESS MENT YEAR 2005-06 WHEN THE PROVISION HAS BEEN MADE AND CLAIMED AS A D EDUCTION. 3. THE APPELLANT CRAVES LEAVE TO FILE ADDITIONAL GR OUNDS AT THE TIME OF HEARING. 3.2 WE HEARD THE RIVAL CONTENTIONS ON THE ADDITIONA L GROUNDS AND ADMIT THEM ON THE MERITS CANVASSED ABOVE. 4. THE AR SUBMITTED THAT THE ASSESSEE IS A MANUFACT URER OF SUGARS AND IT PURCHASES CANE FROM THE FARMERS. THE PRICE PAYABLE TO THE FARMERS IS FIXED BY THE CENTRAL GOVERNMENT AS STATUTORY MINIMUM PRICE ( SMP) LINKED TO THE RECOVERY OF SUGAR. ON 12.12.2002, THE GOVERNMENT OF INDIA NOTIFIED SMP FOR 2002-03 SUGAR SEASON I.E. 1 ST OCTOBER TO 30TH SEPTEMBER @ RS.64.50 PER QUINTAL. ON 9.1.2003, THE GOVERNMENT OF INDIA ENHAN CED THE STATUTORY :-7-: ITA NOS. 286/MDS/2016& 382/MDS/2015 MINIMUM PRICE TO RS.69.50 PER QUINTAL. ALL THE SUGA R MANUFACTURERS THROUGH OUT INDIA APPROACHED THE HIGH COURT THROUGH THEIR A SSOCIATION CHALLENGING THE NOTIFICATION AND TO HOLD THAT THE INCREASE IS INVAL ID. AS THE GOVERNMENT AGREED NOT TO TAKE COERCIVE STEPS NO STAY WAS GRANTED. SUB SEQUENTLY, ALL THE WRIT PETITIONS WERE TRANSFERRED TO THE SUPREME COURT IN JUNE 2004. HOWEVER, THE GOVERNMENT CALLED UPON ALL THE SUGAR MANUFACTURER A SSOCIATIONS (ISMA) AND DIRECTED THEM TO PAY EVEN THE ADDITIONAL CANE PRICE WITHOUT PURSUING THE WRIT PETITION. THE SUGAR MANUFACTURERS HAD TO AGREE TO T HE SPECIFIC DIRECTIONS OF GOVERNMENT OF INDIA DURING THE PERIOD RELEVANT TO A Y 2005-06 AND ACCORDINGLY THE ASSESSEE CLAIMED THIS ADDITIONAL PRICE AT RS. 2,14,44,515/- IN AY 2005-06 . OVER AND ABOVE THE STATUTORY MINIMUM PRICE (SMP), THE ASSESSEE HAS TO SHARE THE ADDITIONAL PROFIT THAT MAY ARISE BECAUSE OF THE HIGHER REALIZATION OF THE SUGAR CANE WITH THE FARMERS ON THE BASIS OF THE FORMULA UNDER SECTION 5A OF THE SUGAR CANE CONTROL 1966. FOR THE YEAR ENDED 31.3.2005, THE COMPANY ESTIMATED THE ADDITIONAL PRICE PAYABLE UNDER SECTIO N CLAUSE 5A OF THE SUGAR CANE CONTROL 1966 AT RS.1 ,48,35,532/- AND CLAIMED IT AS DEDUCTION. 4.1 WITH REGARD TO THE ACCOUNTING TREATMENTS , THE A R SUBMITTED THAT THE ASSESSEE FOLLOWED THE SUGAR SEASON I.E. 1 ST OCTOBER TO 30TH SEPTEMBER IN ITS BOOKS OF ACCOUNTS. HOWEVER, FOR THE PURPOSE OF INCOME- TAX , THEY PREPARED THE PROFIT & LOSS ACCOUNT AND BALANCE SHEE T AS ON 31.3.2005 AND PROVIDED FOR THE ADDITIONAL PRICE AT RS.2,14,44,51 5/- WHICH ACCRUED ONLY :-8-: ITA NOS. 286/MDS/2016& 382/MDS/2015 WHEN THE COMPANY AGREED TO PAY THE AMOUNT AND NO T TO GO ON WITH THE (WRIT) LITIGATION, WHICH HAPPENED DURING THE ASSES SMENT YEAR 2005-06. HOWEVER, THE ACTUAL PAYMENT WAS MADE WHEN ITS CASH POSITION IMPROVED I.E. IN NOVEMBER 2005 ONLY WHICH IS IN THE ASSESSMENT Y EAR 2006-07. THEREFORE , THE AR SUBMITTED THAT THIS EXPENDITURE (IE THE AD DITIONAL PRICE AT RS.2,14,44,515/-) PAYABLE TO THE CANE GROWERS SHOU LD BE ALLOWED EITHER ON ACCRUAL BASIS IN THE ASSESSMENT YEAR 2005-06 OR ON THE BASIS OF ACTUAL PAYMENTS IN THE ASSESSMENT YEAR 2006-07. WITH REGA RD TO THE ADDITIONAL PRICE PAYABLE UNDER SECTION CLAUSE 5A OF THE SUGARCANE CO NTROL 1966, AT RS.1,48,35, 532/-, THE A R SUBMITTED THAT THE COM PANY ESTIMATED THE ADDITIONAL PRICE PAYABLE AT RS.1,48,35,532/- AND CL AIMED IT AS A DEDUCTION. SUBSEQUENTLY, WHEN THE SUGAR YEAR WAS COMPLETED ,TH E ASSESSEE FOUND THAT THE PROFIT DID NOT EXIST AND , THEREFORE , THE PROV ISION FOR ADDITIONAL PRICE NEED NOT BE PAID TO THE FARMERS. THIS IS PRIMARILY BECAU SE OF THE FLUCTUATION IN THE SALE PRICE OF SUGAR PREVAILING AS ON 31 ST MARCH AND THE ACTUAL PRICE REALIZED AT THE TIME OF SALE. THEREFORE, THE PROVISION MADE OF RS. 1,48,35,532/- WAS REVERSED IN THE PROFIT & LOSS ACCOUNT AND BALANCE S HEET PREPARED FOR 31.3.2006 AND WAS OFFERED AS INCOME FOR THE ASSESSMENT YEAR 2 006-07. THEREFORE, THE PROVISION MADE IN THE ASSESSMENT YEAR 2005-06 SHO ULD BE ALLOWED AS A DEDUCTION AS IT WAS BASED ON THE ESTIMATED LIABILIT Y. ALTERNATIVELY, IF THAT PROVISION IS NOT ALLOWED, THE INCOME OFFERED BY RE VERSAL OF THIS PROVISION IN THE ASSESSMENT YEAR 2006-07 SHOULD NOT BE ASSESSED AS INCOME. :-9-: ITA NOS. 286/MDS/2016& 382/MDS/2015 5. PER CONTRA, THE D R EXTENSIVELY RELYING ON THE ORDER OF THE CIT(A) SUBMITTED THAT THE ORDER FOR THE REVISED ADDITIONAL STATUTORY MINI MUM PRICE (SMP) DECLARED BY THE CENTRAL GOVERNMENT FOR THE SE ASON PERTAINING TO 2002-03 WAS PASSED ON 09.01.2003 AND IT WAS CHALLENGED IN T HE MADRAS HIGH COURT. THE CIT(A) AFTER PERUSING CERTAIN CORRESPONDENCES REL ATED TO THE LITIGATION, RECORDED IN PARA 6.9 OF HIS ORDER AS UNDER: DURING THE PROCEEDINGS BEFORE THE HON'BLE HIGH CO URT, THE GOVT. OF INDIA HAD INFORMED THE SENIOR CENTRAL GOVT. STANDING COUNSEL IN FEBRUARY, 2003 STATING THAT THE CENTRAL GOVT. MADE AN ASSURANCE BEFORE THE HON'BLECOURT THAT NO COERCIVE STEPS WOULD BE TAKEN AGAINST THE SUGAR MIL LS PENDING DISPOSAL OF WRIT PETITION. THE SAME HAS BEEN CONVEYED BY THE STANDIN G COUNSEL FOR THE ASSOCIATION OF SUGARCANE COMPANIES TO THE SUGAR MIL LS ASSOCIATION OF TAMILNADU. THIS GOES TO PROVE THAT THERE WAS NEVER AN OBLIGATION FOR THE APPELLANT COMPANY TO PAY THE ENHANCED SMP . 5.1 FURTHER, THE D R SUBMITTED THAT THE HON'BLE MADRAS HIGH COURT BY ITS ORDER DATED 03.02.2004 GAVE AN INTERIM STAY AGAINST THE CENTRAL GOVT.'S ORDER THIS INTERIM STAY WAS EXTENDED UNTIL FURTHER ORDERS AS PER THE HON'BLE HIGH COURT'S ORDER DATED 16.02.2004. THERE WAS NO FURTHE R COURT ORDER IN THIS MATTER. THEREFORE, THERE IS NO CASE FOR THE ASSESSEE TO MAKE ANY PROVISION IN A Y 2005-06 AS THERE WAS NO STAY ORDER AFTER 16.02.20 04 (IE AFTER THE PERIOD RELEVANT TO AY 2004-05). 5.2 WITH REGARD TO THE ASSESSEES ADDITIONAL GR OUND SEEKING THE ADDITIONAL PRICE PAID AT RS.2,14,44,515/- IN NOV 2005, TO B E ALLOWED IN THE ASSESSMENT YEAR 2006-07 ON THE BASIS OF ACTUAL PAYMENTS, THE D R SUBMITTED THE AO HAS :-10-: ITA NOS. 286/MDS/2016& 382/MDS/2015 CORRECTLY HELD THAT SINCE THE ASSESSEE IS FOLLOWING MERC ANTILE SYSTEM , ITS CLAIM THAT SUCH PAYMENTS WERE MADE ON CASH BASIS DU RING THE ASSESSMENT YEAR 2006-07 CANNOT BE ACCEDED TO . THE D R ALSO SOUGH T OUR ATTENTION TO THE AOS OBSERVATION THAT FOR ALLOWING THIS EXPENDITURE T HE ASSESSEE MAY MOVE THE APPROPRIATE FORUM FOR MAKING THE CLAIM IN THE ASSES SMENT YEAR 2003-04. 6. WE HEARD THE RIVAL CONTENTIONS, GONE THROUGH RELEVANT ORDERS AND MATERIAL. THE CENTRAL GOVT. FIXES THE SUGARCANE PR ICE AS PER SUGARCANE CONTROL ORDER, 1966 , IN TWO STAGES, WHICH ARE STATUTORILY PAYABLE BY SUGAR MILLS. FIRST AT THE COMMENCEMENT OF SUGAR SEASON, IT ISSUES THE S TATUTORY MINIMUM PRICE (SMP) AS PER CLAUSE 3A OF THE SUGARCANE CONTROL ORD ER AND SUBSEQUENTLY AFTER THE CLOSURE OF THE SEASON, AFTER COLLECTING THE SUGAR S ALE REALIZATION DATA FOR THE SEASON, THE ADDITIONAL PRICE PAYABLE IS ANNOUNCED A S PER CLAUSE 5A. THE SUGAR SEASON IS BETWEEN OCTOBER & SEPTEMBER. THE R EVISED ADDITIONAL STATUTORY MINIMUM PRICE (SMP) DECLARED BY THE CENTRAL GOVERNM ENT FOR THE SEASON PERTAININGTO 2002-03 WAS PASSED ON 09.01.2003 AND IT WAS CHALLENGED IN THE MADRAS HIGH COURT. WE UNDERSTAND FROM THE CIT (A ) ORDER THAT DURING THE PROCEEDINGS BEFORE THE HON'BLE HIGH COURT, THE GOVT . OF INDIA HAD INFORMED THROUGH THE SENIOR CENTRAL GOVT. STANDING COUNSEL I N FEBRUARY, 2003 THAT NO COERCIVE STEPS WOULD BE TAKEN AGAINST THE SUGAR MIL LS PENDING DISPOSAL OF WRIT PETITION. THE SAME HAS BEEN CONVEYED BY THE STANDIN G COUNSEL FOR THE ASSOCIATION OF SUGARCANE COMPANIES TO THE SUGAR MIL LS ASSOCIATION OF TAMILNADU. IN THE APPELLANT'S CASE, THE HON'BLE MADRAS HIGH CO URT GAVE AN INTERIM STAY :-11-: ITA NOS. 286/MDS/2016& 382/MDS/2015 AGAINST THE CENTRAL GOVT.'S ORDER TO ENHANCE THE SM P BY AN ORDER DATED 03.02.2004. THIS INTERIM STAY WAS FURTHER EXTENDED UNTIL FURTHER ORDERS AS PER THE HON'BLE HIGH COURT'S ORDER DATED 16.02.2004. THERE WAS NO FURTHER COURT ORDER ON THIS MATTER. THE COPIES OF THE RELEVANT ORDERS A ND CORRESPONDENCES ARE NOT FILED BEFORE US. THUS, APPARENTLY, FOR THE PERIOD BETWEEN 09.01.2003 AND 03.02.2004, (IE THE DATE ON WHICH THE REVISED ADD ITIONAL STATUTORY MINIMUM PRICE (SMP) DECLARED BY THE CENTRAL GOVERNMENT FOR THE SEASON PERTAINING TO 2002-03 ) AND (THE DATE ON WHICH THE HON'BLE MAD RAS HIGH COURT GAVE AN INTERIM STAY AGAINST THE CENTRAL GOVT.'S ORDER PERT AINING TO THE SEASON 2002-03), THE STATUTORY ACCRUAL FOR THE SEASON 2002-03 AR OSE AND ACCORDINGLY IT SHOULD HAVE BEEN PROVIDED BY THE ASSESSEE IN ITS BO OKS RELATED TO THE PERIOD RELEVANT TO AY 2003-04 ITSELF, WHICH ENDED AS ON 3 1.3.2003 ITSELF AS PER ASSESSEES METHOD OF ACCOUNTING. BUT, SUCH AN O BSERVATION IS BASED ON THE ABOVE INCOMPLETE DATA. IN THE ABOVE FACTS AND CIR CUMSTANCES, THIS ISSUE IS REMITTED BACK TO THE A O , WHO SHALL VERIFY THE R ELEVANT ORDERS AND CORRESPONDENCES AND AFTER PROVIDING ADEQUATE OPP ORTUNITY TO THE ASSESSEE, SHALL DECIDE AS TO WHEN THE STATUTORY ACCRUAL F OR THE ADDITIONAL PRICE AROSE AND IF IT AROSE IN THE PREVIOUS YEAR WHICH HAPPENS TO BE THE YEAR RELEVANT TO AY 2005-06, THE AO SHALL ALLOW THE ASSESSE ES CLAIM IN AY 2005-06. THE ASSESSEES ADDITIONAL GROUND THAT THE ADDITIONAL PRICE AT RS.2,14,44,515/- IS PAID IN NOV 2005 AND IT SHOULD BE ALLOWED IN THE ASSESSMENT YEAR 2006-07 ON THE BASIS OF ACTUAL PAYM ENTS, CANNOT BE ACCEDED :-12-: ITA NOS. 286/MDS/2016& 382/MDS/2015 TO AS IT IS FOLLOWING MERCANTILE SYSTEM. THUS, THIS ISSUE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 7. WITH REGARD TO THE ADDITIONAL PRICE PAYABLE FO R THE SUGAR SEASON UNDER CLAUSE 5A OF THE SUGARCANE CONTROL ORDER, 1966, TH E AR SUBMITTED THAT IS KNOWN ONLY AFTER CLOSURE IN SEPT, 2005 WHICH FALLS AFTER MAR., 2005 WHICH IS THE CUT OFF PERIOD FOR ACCOUNTS OF A Y 2005-06. SO, IT IS PLEA DED THAT IT MADE A PROVISION FOR SUCH ADDITIONAL CANE PRICE AS A LIABILITY IN ITS MA R., 2005 ACCOUNTS TO PRESENT A FAIR VIEW OF ACCOUNTS COVERING ALL EXPECTED LIABILITIES AS ON MAR., 2005. HOWEVER, THE PROVISION ENTRY WAS LATER REVERSED IN SEPT., 2005 O N ACCOUNT OF NON-PAYMENT OF THE SAME AND ACCORDINGLY GOT OFFERED AS INCOME IN SUBSEQUENT F Y 2005-06. THE AO DISALLOWED IT HOLDING THAT THE PROVISION HAS NO BASIS, IT IS AN UNASCERTAINED LIABILITY WHICH WAS NEVER MET BY THE ASSESSEE AND THE CIT(A) HELD THAT THE APPELLANT COMPANY HAS DEBITED ONLY THE PROVISION FOR 5A PRICE FOR WHICH THERE WAS NO BASIS. THE SAID PROVISION FOR 5A PRICE WAS NEVER PAID SUBSEQUENTLY. THEREFORE, THE SAID PROVISION REMAINE D ONLY AS AN UNASCERTAINED LIABILITY WHICH WAS NEVER MET BY THE APPELLANT COMP ANY. THEREFORE, I AGREE THAT AO'S DISALLOWANCE OF PROVISION FOR 5A PRICE WHICH I S UPHELD AND THE GROUNDSARE DISMISSED. 7. \ WE HEARD THE RIVAL CONTENTIONS AND FIND THE ORDER O F THE CIT (A) DOES NOT REQUIRE ANY INTERFERENCE AND HENCE WE DISMISS T HE ASSESSEES PLEA FOR AY 2005-06. :-13-: ITA NOS. 286/MDS/2016& 382/MDS/2015 7.1. WITH REGARD TO THE ASSESSEES ADDITIONAL GROUND THAT IF THE PROVISION MADE IN THE ASSESSMENT YEAR 2005-06 IS NOT ALLOWED , THE INCOME OFFERED BY REVERSAL OF THIS PROVISION IN THE ASSESSMENT YEAR 2 006-07 SHOULD NOT BE ASSESSED AS INCOME, THE DR SUBMITTED THAT T HE AO HELD THAT A PERUSAL OF THE PROFIT AND LOSS ACCOUNT SHOWS THAT THERE IS NO CRED IT ENTRY RELATABLE TO THE WITHDRAWAL OF THE PROVISION OF RS. 1,48,35,532/- AN D HENCE THE AO RIGHTLY REJECTED THE ASSESSEES CLAIM IN AY 2006-07. WE HAVE CONSIDERED THE ASSESSEES ADDITIONA L GROUND, THE RIVAL CONTENTIONS ON IT AND RELEVANT MATERIAL. ASSESSEE PLEADS THAT IF THE PROVISION MADE IN THE ASSESSMENT YEAR 2005-06 IS NOT ALLOWED , THE INCOME OFFERED BY REVERSAL OF THIS PROVISION IN THE ASSESSMENT YEAR 2 006-07 SHOULD NOT BE ASSESSED AS INCOME. THE DR SUBMITTED THAT T HE AO HELD THAT A PERUSAL OF THE PROFIT AND LOSS ACCOUNT SHOWS THAT THERE IS NO CRED IT ENTRY RELATABLE TO THE WITHDRAWAL OF THE PROVISION OF RS. 1,48,35,532/- A ND HENCE THE AOS REJECTION DOES NOT REQUIRE ANY INTERFERENCE. IN THE FACT S AND CIRCUMSTANCES, THIS ISSUE IS REMITTED BACK TO THE A O , WHO SHALL RE-EXAMINE THIS ISSUE , AFRESH , AND IF THE PROVISION MADEIN THE ASSESSMENT YEAR 2005-06, IN T HIS REGARD, IS REVERSED IN THE ACCOUNTS RELATED TO THE ASSESSMENT YEAR 2006-07 AND OFFERED AS AN INCOME, THEN SUCH INCOME SHOULD NOT BE ASSESSED AS INCOME IN AY 2006-07. THE AO AFTER PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE, SHALL DECIDE THIS ISSUE ACCORDINGLY. TO THIS EXTENT , THE ASSESSEES ADDITIONAL GROUND IS TREATED AS ALLOWED. :-14-: ITA NOS. 286/MDS/2016& 382/MDS/2015 8. THE ASSESSEES GROUNDS OF APPEAL FOR AY 2006-0 7 IS EXTRACTED AS UNDER : 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (AP PEALS) IS CONTRARY TO LAW FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED I N CONFIRMING THE DISALLOWANCE OF RAW SUGAR EXPENSES AMOUNTING TO RS. 8,11,47,809/- U/S.40(A)(IA) SINCE NO TDS WAS MADE. 2.1 THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE APPRECIATED THAT THE APPELLANT HAS PAID THE TDS IN THE ASSESSME NT YEAR 2008-09 AND CLAIMED THE DEDUCTION. HOWEVER THE ASSESSING OFFICE R FOR THE ASSESSMENT YEAR 2008-09 HAS RECTIFIED THE ORDER U/S 154 DATED - 19.03.2012 DISALLOWING THE CLAIM OF THE APPELLANT ON THE PRETEXT THAT THE APPEAL MEMO OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2006-07 HAS TAKEN THIS GROUND ON THE CAPTION ISSUE. 2.2 THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE DIRECTED THE AO TO ALLOW THE CLAIM OF THE APPELLANT AS PER PROVI SO TO SECTION 40(A)(IA), IN THE ASSESSMENT YEAR(2008-09) WHEN THE CONNECTED TDS OBLIGATION HAS BEEN FULLY DISCHARGED. 3. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE OF THE SHARE ISSUE EXPENDITURE AMOUNTI NG TO RS.4,65,649/- 3.1 THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE APPRECIATED THAT THE APPELLANT HAS INCURRED SHARE ISSUE EXPENSE S OF RS.46, 56,491/- IN THE ASSESSMENT YEAR 1997-98 IN CONNECTION WITH RIGH T ISSUE OF 21,50,.405/- EQUITY SHARES @ PRICE OF RS. 90/- PER SHARE. AS THE SHARE ISSUE EXPENSES ARE NOT ALLOWABLE AS REVENUE EXPENSES THE APPELLANT HAS NOT CLAIMED THE SAME AS DEDUCTION IN ITS COMPUTATION OF INCOME. IN BOOKS THE APPELLANT HAS TREATED THIS AS DEFERRED REVENUE EXPENSES. 3.2 THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE APPRECIATED THAT AS PER SECTION 35D THE APPELLANT HAS BEEN CLAI MING DEDUCTION OF AN AMOUNT EQUAL TO ONE-TENTH OF THE AFORESAID EXPENDIT URE OF RS.46, 56,491/- FOR EACH OF THE ASSESSMENT YEAR BEGINNING WITH THE ASSESSMENT YEAR 1997- 98. THE CIT(A) FOR THE EARLIER YEARS HAS ALLOWED TH E CLAIM OF THE APPELLANT. HENCE TO BE ALLOWED U/S 35D. :-15-: ITA NOS. 286/MDS/2016& 382/MDS/2015 4. THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN CONFIRMING THE DISALLOWANCE OF EXPENDITURE @ 5% OF THE DIVIDEND IN COME TO EARN THE EXEMPT INCOME U/S 14A. 4.1 THE COMMISSIONER OF INCOME TAX (APPEAL) OUGHT T O HAVE APPRECIATED THAT FOR ATTRACTING SECTION 14A, THERE HAS TO BE A PROXIMATE CAUSE FOR DISALLOWANCE, WHICH IS ITS RELATIONSHIP WITH THE TA X EXEMPT INCOME. THE APPELLANT HAS NOT INCURRED ANY EXPENDITURE FOR EARN ING THE DIVIDEND INCOME AND HENCE NO NOTIONAL INCOME COULD BE DEDUCTED FROM THE SAID INCOME. 4.2 THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE APPRECIATED THAT HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE C ASE OF HERO CYCLES REPORTED IN 323 ITR 518 AND THE DELHI TRIBUNAL IN T HE CASE OF ACIT VS SUN INVESTMENTS REPORTED IN 8 ITR (TRI) 33 HAVE HELD TH AT UNLESS THE ASSESSING OFFICER ESTABLISHED THAT SPECIFIC EXPENDITURE HAS B EEN INCURRED BY THE APPELLANT FOR EARNING EXEMPT INCOME THERE CAN BE NO DISALLOWANCE UNDER SECTION 14A. 4.3 IN ANY EVENT THE DISALLOWANCE OF 5% IS HIGH AND ARBITRARY AND THE CIT (APPEALS) OUGHT TO HAVE FOLLOWED THE DECISION OF TH E MADRAS HIGH COURT IN THE CASE OF SIMPSON & CO LTD V. DC IT, IN TC(A) NO. 2621 OF 2006 AND RESTRICTED THE DISALLOWANCE TO 2% OF THE DIVIDEND I NCOME. 5. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED I N HOLDING THAT ADJUDICATION OF THE ISSUE REGARDING ADDITIONAL CANE PRICE OF RS.2, 14,44,515/- PAID BY THE APPELLANT RELATES TO ASSESS MENT YEAR 2003-04 IS ONLY ACADEMIC IN NATURE AND THE SAME ARE TREATED AS DISMISSED FOR STATISTICAL PURPOSE. 5.1 THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE APPRECIATED THAT THIS AMOUNT REPRESENTS ADDITIONAL CANE PRICE P AID BY THE APPELLANT IN NOVEMBER, 2005 RELATING TO ASSESSMENT YEAR 2003-04. 5.2 THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE APPRECIATED THAT FOR THE SUGAR- SEASON 2002-03 THE CENTRAL GOVE RNMENT FIXED THE STATUTORY MINIMUM PRICE (SMP) AT RS.698.20 PER TON AND THIS WAS ENHANCED TO RS.752.40 PER TON WITHIN SHORT SPAN OF TIME. THI S REVISION WAS CHALLENGED BEFORE THE HON'BLE HIGH COURT AND STAY WAS GRANTED IN FEBRUARY 2003. THE APPELLANT DID NOT PROVIDE FOR ADDITIONAL LIABILITY IN THE ASSESSMENT YEAR :-16-: ITA NOS. 286/MDS/2016& 382/MDS/2015 2003-04. SUBSEQUENTLY THE CENTRAL GOVERNMENT ASSURE D THAT IT WILL NOT TAKE ANY COERCIVE MEASURE FOR ENFORCING COMPLIANCE WITH THE REVISED G.O. A PROVISION WAS MADE IN THE YEAR 2004-05 AND CLAIMED AS DEDUCTION IN THE ASSESSMENT YEAR 2005-06 BUT WAS DISALLOWED AS NOT C RYSTALLIZED IN THAT YEAR. THE APPELLANT CLAIMED THE LIABILITY ON ACTUAL BASIS IN NOVEMBER 2005. 5.3 THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE APPRECIATED THAT SINCE THE PROVISION WAS DISALLOWED IN THE ASSE SSMENT FOR THE ASSESSMENT YEAR 2005- 06, THE SAME CANNOT BE TAXED IN THIS ASSESSMENT YEAR. 6. THE APPELLANT CRAVES LEAVE TO FILE ADDITIONAL GR OUNDS AT THE TIME OF HEARING. 9. THE A R SUBMITTED THAT THE COMMISSIONER OF INC OME TAX (APPEAL) ERRED IN CONFIRMING THE DISALLOWANCE WITHOUT APPREC IATING THE FACTS. THE ASSESSEE HAS PAID RS.8,11,47,809/- TO M/S SHREE AMB IKA SUGARS LTD TOWARDS RAW SUGAR PROCESSING CHARGES ON WHICH TDS HAS NOT B EEN PAID WITHIN THE DUE AND IT WAS PAID IN THE AY 2008-09. SINCE TDS HAS NO T BEEN PAID IN AY 2006-07, THE AO DISALLOWED IT U/S 40(A)(IA) IN THE ASSESSMEN T MADE FOR AY 2006-07. IN THE AY 2008-09 , THE ASSESSEE HAS PAID THE TDS ON RS.8,11,47,809/- PAID TO M/S SHREE AMBIKA SUGARS LTD AND CLAIMED IT AS A D EDUCTION AND ACCORDINGLY DECLARED THE TOTAL LOSS OF RS.28,95,07,118/- IN I TS RETURN FILED FOR THE AY 2008-09. THEREAFTER , IN THE ASSESSMENT MADE FOR AY 2006-07 , THE AO DISALLOWED RS.8,11,47,809/- U/S 40(A)(IA) AS THE TD S HAS NOT BEEN PAID IN AY 2006-07. IN VIEW OF THAT , THE ASSESSEE FILED A REV ISED RETURN FOR AY 2008-09, REVISING THE TOTAL LOSS AT RS 37,06,54,927/- ADDING THE IMPUGNED RS.8,11,47,809/- TO THE ALREADY DECLARED THE TOTAL LOSS OF RS.28,95,07,118/. :-17-: ITA NOS. 286/MDS/2016& 382/MDS/2015 IN THE ASSESSMENT MADE FOR AY 2008-09 U/S 143 (3), THE AO ALLOWED SUCH DEDUCTION ALSO. THEREAFTER, THE AO TAKING THE COGNI ZANCE OF THE APPEAL GROUNDS FILED BEFORE THE CIT (A) FOR AY 2006-07 , RECTIFIED THE ASSESSMENT ORDER OF AY 2008-08 ASSESSING THE LOSS AT RS.22,07, 83,905/-. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, THE AR PLEADED THAT THE AO MAY BE DIRECTED TO ALLOW RS.8,11,47,809/- IN AY 2008-09. WE HEARD THE RIVAL CONTENTIONS AND FIND MERIT IN TH E ARS CONTENTION. THE AO IS DIRECTED EXAMINE THE FACTS, AFTER AFFORDI NG THE OPPORTUNITY TO THE ASSESSEE IF THE ABOVE SUBMISSIONS ARE FOUND CORRECT , HE SHALL ALLOW THE DEDUCTION IN AY 2008-09. 10. THE NEXT ISSUE IS DISALLOWANCE OF THE SHARE ISS UE EXPENDITURE AT RS.4,65,649/-. IN THIS REGARD, THE AR SUBMITTED THA T THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN CONFIRMING THE DISALLO WANCE WITHOUT APPRECIATING THE FACTS. THE ASSESSEE HAS INCURRED SHARE ISSUE E XPENSES OF RS.46, 56,491/- IN THE ASSESSMENT YEAR 1997-98 IN CONNECTION WITH R IGHT ISSUE OF 21,50,.405/- EQUITY SHARES @ PRICE OF RS. 90/- PER SHARE. AS THE SHARE ISSUE EXPENSES ARE NOT ALLOWABLE AS REVENUE EXPENSES, IT HAS NOT CLAI MED THE SAME AS DEDUCTION IN ITS COMPUTATION OF INCOME. IN BOOKS, IT HAS TREA TED THIS AS DEFERRED REVENUE EXPENSES. AS PER SECTION 35D, IT HAS BEEN C LAIMING DEDUCTION OF AN AMOUNT EQUAL TO ONE-TENTH OF THE AFORESAID EXPENDIT URE OF RS.46,56,491/- FOR :-18-: ITA NOS. 286/MDS/2016& 382/MDS/2015 EACH OF THE ASSESSMENT YEAR BEGINNING WITH THE ASSE SSMENT YEAR 1997-98. THE CIT(A) HAS ALLOWED IT IN THE EARLIER YEARS ALS O AND HENCE PLEADED THAT THIS CLAIM MAY BE ALLOWED. WE HEARD THE RIVAL CONTENTIONS AND FIND MERIT IN TH E ARS CONTENTION. THE AO IS DIRECTED EXAMINE THE FACTS, AFTER AFFORDI NG THE OPPORTUNITY TO THE ASSESSEE, IF THE ABOVE SUBMISSIONS ARE FOUND CORREC T, HE SHALL ALLOW THE DEDUCTION. 11. THE NEXT ISSUE IS DISALLOWANCE OF EXPENDITURE @ 5% OF THE DIVIDEND INCOME TO EARN THE EXEMPT INCOME U/S 14A. IN THIS REGARD, THE AR SUBMITTED THAT THECOMMISSIONER OF INCOME TAX (APPE AL) ERRED IN CONFIRMING THE DISALLOWANCE OF EXPENDITURE @ 5% OF THE DIVIDEN D INCOME TO EARN THE EXEMPT INCOME U/S 14A AND ARGUED ON THE LINES OF A PPEAL GROUNDS 4 TO 4.3 EXTRACTED, SUPRA, AND SUBMITTED THAT IN ANY EVENT T HE DISALLOWANCE OF 5% IS HIGH AND ARBITRARY AND THE CIT (APPEALS) OUGHT TO H AVE FOLLOWED THE DECISION OF THE MADRAS HIGH COURT IN THE CASE OF SIMPSON &CO LTD V. DC IT, IN TC(A) NO. 2621 OF 2006 AND RESTRICTED THE DISALLOWANCE TO 2% OF THE DIVIDEND INCOME. WE HEARD THE RIVAL CONTENTIONS AND FIND MERIT IN TH E ARS CONTENTION. THE AO IS DIRECTED TO RESTRICT THE DISALLOWANCE TO 2% OF THE DIVIDEND INCOME AS PER THE JURISDICTIONAL HIGH COURTS DECISION. :-19-: ITA NOS. 286/MDS/2016& 382/MDS/2015 12. THE NEXT ISSUE IS REGARDING ADDITIONAL CANE PRI CE OF RS.2, 14,44,515/- PAID BY THE APPELLANT RELATES TO ASSESS MENT YEAR 2003-04 VIDE THE APPEAL GROUNDS5 TO 5.3 EXTRACTED, SUPRA . THIS IS D EALT IN PARA 4 TO 6, SUPRA. 13. IN THE RESULT, THE ASSESSEES APPEALS FOR AY 20 05-06 & 2006-07 ARE TREATED AS PARTLY ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 08 TH DAY OF DECEMBER, 2017 AT CHENNAI. SD/- ( . . . ) (N.R.S. GANESAN) !' /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) ' /ACCOUNTANT MEMBER /CHENNAI, 0 /DATED: 08 TH DECEMBER, 2017 JPV & )12 32 /COPY TO: 1. %/ APPELLANT 2. )*% /RESPONDENT 3. 4 ) (/CIT(A) 4. 4 /CIT 5. 2) /DR 6. 7 /GF