The ACIT, Circle-1(1), Baroda V. Gujarat Fluorochemicals Ltd., Baroda

ITA 4/AHD/2007

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63246 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-11-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 02-01-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHELLEY JINDAL
• Keywords: Capital asset; Business expenditure; Cost of acquisition; Revenue expenditure; Capital expenditure
• Section: 143(3); 80HHC; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE SHRI D.K. TYAGI, JM AND SHRI A. MOHAN ALANK AMONY, AM) ITA NO.4/AHD/2007 AY: 2003-04 THE A. C. I. T., CIRCLE-1(1), AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA VS GUJARAT FLUOROCHEMICALS LTD., 2 ND FLOOR, ABS TOWER, OLD PADRA ROAD, BARODA P. A. NO. AAACG 6725 H (APPELLANT) (RESPONDENT) ITA NO.33/AHD/2007 AY: 2003-04 GUJARAT FLUOROCHEMICALS LTD., 2 ND FLOOR, ABS TOWER, OLD PADRA ROAD, BARODA P. A. NO. AAACG 6725 H VS THE A. C. I. T., CIRCLE-1(1), AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA (APPELLANT) (RESPONDENT) DEPARTMENT BY SHRI SHELLEY JINDAL, CIT DR ASSESSEE BY SHRI S. N. SOPARKAR WITH MS. URVSHI SHODHAN, AR DATE OF HEARING: 07-11-2012 DATE OF PRONOUNCEMENT:14-12-2012 ORDER PER A. MOHAN ALANKAMONY : THESE TWO CROSS APPEALS ONE BY THE REVENUE AND THE OTHER BY THE ASSESSEE AR E FILED AGGRIEVED BY THE COMMON ORDER OF THE LEARNED CIT(A)-I, BARODA DATED 06-10- 2006 IN APPEAL NO.CAB/I-43/06-07, FOR ASSESSMENT YE AR 2003-04 PASSED U/S 250 READ WITH SECTION 143(3) OF THE IT A CT. BOTH THE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER. ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 2 ITA NO.4/AHD/2007 (REVENUES APPEAL FOR AY: 2003-04) 2. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINES S OF MANUFACTURING REFRIGERANT GASES FILED ITS RETURN OF INCOME ON 10 TH OCTOBER, 2003 FOR THE ASSESSMENT YEAR 2003-04 DECLA RING NET TAXABLE INCOME OF RS.32,14,22,050/- ALONG WITH REPORT U/S 4 4AB OF THE ACT AND AUDITORS REPORT FOR CLAIMING DEDUCTION U/S 80 H HC OF THE ACT. INITIALLY, THE RETURN WAS PROCESSED U/S 143(1) OF T HE ACT AND SUBSEQUENTLY THE ASSESSMENT WAS COMPLETED U/S 143(3 ) OF THE ACT ON 24-03-2006 WHEREIN VARIOUS ADDITIONS WERE MADE BY T HE LEARNED AO BY DISALLOWING CERTAIN CLAIMS. ON APPEAL BY THE ASS ESSEE, THE LEARNED CIT(A) PARTLY ALLOWED THE APPEAL BY DELETING CERTAI N DISALLOWANCES/ADDITIONS MADE BY THE LEARNED AO. AGG RIEVED, THE REVENUE AND THE ASSESSEE ARE IN APPEAL BEFORE US AG AINST THE ORDER OF THE LEARNED CIT(A). 3. THE REVENUE HAS RAISED FIVE ELABORATE GROUNDS IN ITS APPEAL WHEREIN GROUNDS NO. 5 IS GENERAL IN NATURE AND DO N OT SURVIVE FOR ADJUDICATION. SURVIVING FOUR GROUNDS ARE BRIEFLY ST ATED AS UNDER: 1. THE LEARNED CIT(A) ERRED BY DELETING DISALLOWAN CE OF VILLAGE DEVELOPMENT EXPENSES OF RS.7,41,376/- THOUGH THEY W ERE NOT EXPENDED FOR THE PURPOSE OF BUSINESS. 2. THE LEARNED CIT(A) ERRED BY DELETING THE DISALLO WANCE FOR THE CONTRIBUTION MADE TO REGMA AMOUNTING TO RS.20,96,13 7/- THOUGH THE EXPENSE WAS NOT WHOLLY INCURRED FOR THE PURPOSE OF BUSINESS. 3. THE LEARNED CIT(A) ERRED IN DIRECTING THE AO TO EXCLUDE SALES TAX OF RS.1,96,37,874/- AND EXCISE DUTY OF RS.5,42,20,184/ - FROM THE TOTAL TURNOVER FOR COMPUTING DEDUCTION U/S 80 HHC. ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 3 4. THE LEARNED CIT(A) ERRED BY DIRECTING THE AO NOT TO EXCLUDE RS.20,85,582/- FOR THE DEBIT NOTE ISSUED BY THE CUS TOMERS ON ITS EXPORT TURNOVER FROM THE EXPORT TURNOVER AND TOTAL TURNOVER FOR COMPUTING DEDUCTION U/S 80 HHC OF THE ACT. 4. GROUND NO.1:- DELETING THE DISALLOWANCE OF VILLAGE DEVELOPMENT EXPENSES FOR RS.7,41,376/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE LEARNED AO NOTICED THAT THE ASSESSEE HAD CLAIMED RS.7,41,376/- IN ITS PROFIT & LOSS ACCO UNT AGAINST VILLAGE DEVELOPMENT EXPENSES, BUT ON PERUSAL OF THE DETAILS IT WAS REVEALED THAT ALMOST THE ENTIRE EXPENSES WERE IN THE NATURE OF GRATUITOUS PAYMENT INCURRED ON ACCOUNT OF CONSTRUCTION/REPAIR OF VILLAGE ROADS, ASSISTANCE TO SCHOOLS AND CONTRIBUTIONS TOWARDS LOC AL FESTIVALS AND OTHER RELATED ACTIVITIES OF THE SURROUNDING VILLAG ES OF THE ASSESSEES FACTORY SITUATED AT HALOL, DIST. PANCHMAHAL. WHEN T HE LEARNED AO REQUIRED THE ASSESSEE TO SUBSTANTIATE ITS CLAIM, TH E ASSESSEE EXPLAINED AS UNDER: OUR FACTORY IS LOCATED IN THE REMOTE VILLAGE. BEIN G WE ARE IN MANUFACTURE OF THE INDUSTRIAL CHEMICALS IT IS NE CESSARY TO MAINTAIN CORDIAL RELATIONSHIP WITH THE VILLAGERS FO R SMOOTH RUNNING OF THE BUSINESS, TO DISCHARGE SOCIAL AND EN VIRONMENTAL RESPONSIBILITY. WE HAVE TO UNDERTAKE VARIOUS WELFAR E MEASURES. WE HAVE CLAIMED IN PROFIT & LOS ACCOUNT, THE VILLA GE DEVELOPMENT EXPENSE AMOUNTING TO RS.7,41,386/-. WE SUBMIT THAT THESE EXPENSES WERE INCURRED FOR THE WELFARE M EASURES IN SURROUNDING VILLAGE AND OTHER TYPE OF WORKS OF SIMI LAR NATURE. SUCH EXPENSES, ALTHOUGH DISALLOWED IN ASSESSMENT OR DER IN EARLIER YEARS, WERE ALLOWED LATTER IN APPEAL STA GE AND AS WELL AS AT THE APPELLATE TRIBUNAL. THE LEARNED AO DID NOT FIND THE EXPLANATION OF THE ASSESSEE TO BE TENABLE SINCE THE ASSESSEE WAS NOT UNDER COMPULSION TO INCUR SUCH ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 4 EXPENDITURE IN THE NATURE OF DONATION OR GRATUITOUS PAYMENTS AND DISALLOWED THE CLAIM OF THE ASSESSEE AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 5. ON APPEAL BY THE ASSESSEE, THE LEARNED CIT(A) DE LETED THE ADDITION BY OBSERVING IN PARA 12 AND 13 OF HIS ORDE R AS UNDER: 12. THE THIRD GROUND OF APPEAL IS REGARDING THE EX PENDITURE INCURRED UNDER THE HEAD VILLAGE DEVELOPMENT EXPENS ES OF RS.7,41,376/-. THIS ISSUE IS COVERED, ON THE BASIS OF IDENTICAL FA CTS, BY THE ORDER OF THE ITAT IN THE APPELLANTS OWN CASE F OR THE ASSESSMENT YEAR 1993-94 WHICH HAS BEEN FOLLOWED BY THE CIT(A) FOR ASSESSMENT YEAR 1994-95 AND 2001-02. THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE APPELLANT A ND THE ENTIRE EXPENDITURE HAS BEEN ALLOWED. 13. IN VIEW OF THE ABOVE, AND FOLLOWING THE EARLIER ORDERS THIS DISALLOWANCE OF RS.7,41,376/- IS CANCELLED AND THE ADDITION SO MADE IS DELETED. AGGRIEVED BY THE AFORESAID FINDINGS OF THE LEARNED CIT(A), THE REVENUE IS NOW IN APPEAL BEFORE US. 6. AT THE TIME OF HEARING THE LEARNED DR SUPPORTED THE ORDER OF THE LEARNED AO. ON THE OTHER HAND, THE LEARNED AR R ELIED ON THE ORDER OF LEARNED CIT(A) AND SUBMITTED THAT THE ISSU E IN APPEAL IS COVERED BY THE VARIOUS DECISIONS OF THE ITAT AHMEDA BAD BENCHES IN ASSESSEES ON CASE IN EARLIER INSTANCES AND HENCE, THE SAME MAY BE DECIDED IN FAVOUR OF THE ASSESSEE. THE LEARNED DR C OULD NOT CONTROVERT TO THE SUBMISSION OF THE ASSESSEE BY ANY COGENT MATERIAL EVIDENCE. ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 5 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND ALSO CAREFULLY CONSIDERED THE MATERIALS ON RECORD ALONG WITH THE PAPER BOOK SUBMITTED BY THE A SSESSEE. ON PERUSAL OF THE PAPER BOOK, IT IS APPARENT THAT THIS ISSUE HAS BEEN DECIDED BY THE ITAT AHMEDABAD A BENCH IN DEPARTME NTAL APPEAL IN ITA NO.3748/AHD/2003 FOR AY 2000-01 IN ASSESSEES O N CASE IN ITS FAVOUR VIDE ORDER DATED 17-02-2012 (PAPER BOOK PAGE 22 AND 23). THE RELEVANT PORTION OF THE SAID ORDER IS REPRODUCE D HEREUNDER: 25. AS REGARDS GROUND NO.3 OF THE REVENUE, THE BR IEF FACTS ARE THAT THE ASSESSING OFFICER HAS STATED IN THE OR DER THAT THIS EXPENDITURE WAS IN THE NATURE OF GRATUITOUS PAYMENT INCURRED ON ACCOUNT OF REPAIR OF VILLAGE ROADS, ASSISTANCE T O SCHOOLS, CONTRIBUTIONS TO LOCAL FESTIVALS AND OTHER VILLAGE ACTIVITIES. IN THE VARIOUS VILLAGES SURROUNDING THE ASSESSEES FACTORY AT HALOL, THE ASSESSEE STATED THAT THIS WAS INCURRED TO MAINTAIN CORDIAL RELATIONS WITH THE VILLAGERS AS WELL AS TO PROTECT THEIR CROPS FROM POLLUTION. THE EXPENDITURE WAS INCURRED FOR BUSINES S EXPEDIENCY. THE ASSESSING OFFICER, HOWEVER, HELD TH AT THESE ARE GRATUITOUS PAYMENT FOR WHICH THERE WAS NO COMPU LSION. SIMILAR ADDITIONS WERE DELETED BY THE ITAT FOR A. Y . 1993-94 AND BY LD. CIT(A) IN A. Y. 1994-95 ONWARDS. AS THE DEPARTMENT HAS NOT ACCEPTED THESE DECISIONS, THE EX PENSES ARE DISALLOWED THIS YEAR ALSO. THE LD. CIT(A) ALLOW ED THE RELIEF TO THE ASSESSEE FOLLOWING HIS ORDER IN THE PRECEDIN G YEAR AND THE RATIO OF THE DECISION BY THE TRIBUNAL. 26. LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON TH E DECISION OF ITAT D BENCH AHMEDABAD DATED 30-11-11 IN THE CASE OF GUJARAT ENVIRON PROTECTION AND INFRASTRUCTU RE LTD. V. ITO IN ITA NO.151/AHD/2007 WHERE THE ITAT ALLOWED THE CLAIM OF THE ASSESSEE. THE LEARNED COUNSEL FOR THE ASSESS EE ALSO RELIED UPON THE DECISION OF HONBLE MADRAS HIGH COU RT IN THE CASE OF CIT V. MADRAS REFINERIES LTD. (2004) AS REP ORTED IN 266 ITR 170 (MAD). ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 6 27. LD. CIT DR ON THE OTHER HAND, RELIED UPON THE O RDER OF THE ASSESSING OFFICER. 28. ON PERUSAL OF THE FACTS AND ARGUMENTS BY BOTH T HE PARTIES, WE ARE OF THE VIEW THAT REPAIR OF THE VILL AGE ROADS, ASSISTANCE TO SCHOOLS, CONTRIBUTIONS TO LOCAL FESTI VALS AND OTHER VILLAGE ACTIVITIES SURROUNDING THE FACTORY OF THE A SSESSEE IS MEANT TO INCLUDE WITHIN ITS FOLD TO CRATE EXPRESSIO N OF CARE AND CONCERN FOR THE SOCIETY AT LARGE AND THE PEOPLE OF THE LOCALITY IN WHICH THE BUSINESS OF THE ASSESSEE IS LOCATED IN PA RTICULAR, THEREOF CREATING AN ATMOSPHERE IN WHICH THE BUSINES S CAN SUCCEED IN A GREATER MEASURE WITH THE AID OF SUCH G OODWILL. THEREFORE, THE SAID EXPENDITURE IN VIEW OF THE DECI SION OF HONBLE MADRAS HIGH COURT IN THE CASE OF MADRAS REF INERIES LTD.(SUPRA) AND THE FACTS OF THE PRESENT CASE, CANN OT BE SAID TO BE OUTSIDE THE AMBIT OF BUSINESS OF THE ASSESSEE. T HEREFORE WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT(A). THUS, GROUND NO.3 OF THE REVENUE IS DISMISSED. 7.1 IN THE ASSESSMENT YEAR 2001-02 ALSO, AHMEDABAD A BENCH IN DEPARTMENTAL APPEAL IN ITA NO.2460/AHD/2004 VIDE OR DER DATED 06 TH JULY, 2012 IN ASSESSEES OWN CASE HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY FOLLOWING T HE AFORESAID ORDER OF THE TRIBUNAL CITED SUPRA FOR AY 2000-01 DA TED 17-02-2012. THE RELEVANT PORTION OF THE ABOVE ORDER IS EXTRACTE D HEREIN UNDER: 9. AS PER GROUND NO.3, THE DISPUTE IS REGARDING DI RECTION OF LD. CIT(A) TO REDUCE VILLAGE DEVELOPMENT EXPENSES F ROM THE TOTAL INCOME. THIS ISSUE IS ALSO DECIDED IN FAVOUR OF THE ASSESSEE IN THE SAME TRIBUNAL ORDER IN ASSESSEES O WN CASE FOR ASSESSMENT YEAR 2000-01 AND THE RELEVANT PARAS ARE 25-28 OF THE TRIBUNAL ORDER. SINCE NO DIFFERENCE IN FACTS CO ULD BE POINTED OUT BY THE LD. D.R. IN THE PRESENT YEAR, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT(A) ON T HIS ISSUE ALSO. THEREFORE, THIS GROUND OF REVENUE IS ALSO REJECTED. ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 7 7.2 CONSIDERING THE FACTS OF THE CASE, SUBMISSIONS OF THE LEARNED AR, DECISION OF THE HONBLE MADRAS HIGH COURT AND T HE AFORESAID ORDERS OF OUR CO-ORDINATE BENCHES CITED SUPRA, WE H EREBY HOLD THAT THE EXPENDITURE INCURRED ON ACCOUNT OF VILLAGE DEVE LOPMENT EXPENSE OF RS.7,41,376/- IS AN ALLOWABLE DEDUCTION. ACCORDI NGLY, ORDER OF THE LEARNED CIT(A) ON THIS ISSUE IS SUSTAINED. THEREFOR E, WE HEREBY DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 8. GROUND NO. 2:- DELETING THE DISALLOWANCE OF THE CONTRIBUTION AMOUNTING TO RS.20,96,137/- MADE TO REFRIGERANT GAS MANUFACTURER ASSOCIATION (REGMA). THE ASSESSEE HAD DEBITED RS.20,96,137/- IN ITS PROFIT & LOSS ACCOUNT AS CONT RIBUTION TO REGMA. THE LEARNED AO ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE SAME SHOULD NOT BE DISALLOWED AS IT WAS NOT INCURRED FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. THE ASSESSEE VIDE ITS LET TER DATED 27-02- 2006 SUBMITTED AS UNDER: (I) THE ASSESSEE MAINLY MANUFACTURES REFRIGERANT GA SES AND IS MONITORED BY OZONE CELL. COMPANIES ENGAGED IN SIMILAR BUSINESS FORMED ASSOCIATION TO SOLVE COMMON BUSINESS PROBLEM AND BETTER COMPLIANCE. (II) THE ASSOCIATION WAS ENGAGED IN ACTIVITIES BENE FICIAL TO ITS MEMBERS INCLUDING THE GFL. (III) ASSOCIATION COLLECTS CONTRIBUTION FROM ITS ME MBERS INCLUDING THE ASSESSEE TO MEET ITS EXPENSES. THE ASSESSEE CONTRIBUTED RS.20,96,137/- TO THE ASSOCIAT ION. (IV) THIS IS RECURRING CONTRIBUTION AND IT HAS RESU LTED IN CREATION OF ANY ASSET NEITHER FOR THE ASSOCIATION N OR FOR THE ASSESSEE. ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 8 (V) EARLIER THOUGH THIS EXPENSES WERE DISALLOWED AT ASSESSMENT STAGE, BUT THE SAME WERE ALLOWED AT THE APPELLATE STAGE. HENCE, THE SAME MAY BE ALLOWED IN THE PRESENT YEAR ALSO. THE LEARNED AO HOWEVER, DID NOT ACCEPT THE EXPLANAT ION OF THE ASSESSEE AND ADDED RS.20,96,137/- TO THE INCOME OF THE ASSESSEE BY DISALLOWING ITS CLAIM FOR EXPENSES INCURRED ON A CCOUNT OF CONTRIBUTION TO REGMA. WHEN THE MATTER WAS CARRIED BEFORE THE LEARNED CIT(A), HE CONSIDERING THE SUBMISSION OF TH E ASSESSEE AND THE DECISION OF HIS PREDECESSOR IN THE EARLIER YEAR S AND DELETED THE ADDITION MADE BY THE AO. NOW, THE REVENUE IS IN APP EAL BEFORE US AGAINST THE ORDER OF THE LEARNED CIT(A). 9. THE LEARNED DR RELIED ON THE ORDER OF THE LEARNE D AO. ON THE OTHER HAND THE LEARNED AR SUPPORTED THE ORDER OF T HE LEARNED CIT(A). REITERATING THE SUBMISSIONS MADE BEFORE THE AUTHORI TIES BELOW, THE LEARNED AR FURTHER STATED THAT IN ASSESSMENT YEAR 2 001-02 THE LEARNED CIT(A) ALLOWED THIS ISSUE ON THE GROUND THA T THE AMOUNT COLLECTED FROM THE MEMBERS OF THE ASSOCIATION WAS U SED FOR THE PURPOSE OF DEFRAYING EXPENSES OF THE ASSOCIATION AN D THE ASSESSEE HAD NO RIGHT OVER THE AMOUNT SO COLLECTED AND NO CA PITAL ASSET HAD BEEN BUILD UP BY THE ASSOCIATION. IT WAS FURTHER SU BMITTED BY THE LEARNED AR THAT AGAINST THE ORDER OF THE LEARNED C IT(A) THE REVENUE WENT IN APPEAL BEFORE THE TRIBUNAL AND THE ITAT AHM EDABAD A BENCH WHILE DISPOSING OFF THE THEIR APPEAL IN ITA N O.2460/AHD/2004 FOR AY 2001-02 HELD THIS ISSUE IN FAVOUR OF THE AS SESSEE AND AGAINST THE REVENUE. ACCORDINGLY, THE ASSESSEE PRAYED THAT THE ISSUE MAY BE DECIDED IN ITS FAVOUR IN THE PRESENT YEAR ALSO. ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 9 10. WE HAVE HEARD THE RIVAL SUBMISSIONS, CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND CONSIDERED THE MATERIALS ON RECORD BEFORE US ALONG WITH THE PAPER BOOK SUBMITTE D BY THE ASSESSEE. ON PERUSAL OF THE RECORDS, IT IS APPARENT THAT THIS ISSUE HAS BEEN DECIDED BY ITAT AHMEDABAD A BENCH WHILE ADJU DICATING REVENUES APPEAL IN ITA NO.3748/AHD/2003 IN ASSESSE ES CASE FOR AY 2000-01 CITED SUPRA IN FAVOUR OF THE ASSESSEE AND A GAINST THE REVENUE VIDE ORDER DATED 17-02-2012 WHERE IN THE TR IBUNAL IN PARA 31 OF THE ORDER HAS HELD AS UNDER: 31. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE FACTS OF THE CASE. WE CONCUR WITH THE VIEW OF THE L D. CIT(A) FOR THE REASONS THAT THE PAYMENT IS NOT A ONE-TIME CONT RIBUTION BUT A RECURRING ONE AND SUCH CONTRIBUTIONS HAVE NOT RES ULTED IN CREATION OF ANY ASSET FOR THE ASSESSEE NOR EVEN FOR THE ASSOCIATION. THERE ARE VERY FEW MEMBERS AS ONLY FEW COMPANIES ARE MANUFACTURING REFRIGERANT GASES. HENC E, THE PRO RATA EXPENDITURE IS LARGE. THEY HAVE ENCLOSED BALAN CE-SHEET AND INCOME EXPENDITURE ACCOUNT OF THE ASSOCIATION T O SHOW THAT THERE HAS BEEN NO CREATION OF ANY CAPITAL ASSET. ON GOING THROUGH THE INCOME AND EXPENDITURE ACCOUNT AND BALA NCE- SHEET OF REGMA, THE ASSETS ARE MAINLY KEPT IN THE B ANK ACCOUNT AND THE EXPENSES ARE FOR ADVERTISEMENT INVE STIGATION CHARGES, TRAVELING ETC., THERE IS A POSITIVE BALANC E LEFT OVER WHICH IS KEPT IN THE BANK ACCOUNT. THE OTHER MEMBER S BESIDES THE ASSESSEE ARE SRF LTD. OF DELHI, M/S. CHEMPLAST SANMAR LTD. OF CHENNAI, NAVEEN FLOUORINE INDUSTRIES IN MUM BAI. IN SHORT, IT IS AN ASSOCIATION ON THE LINES OF TRADE A SSOCIATION WHICH LOOK AFTER THE WELFARE OF ITS MEMBERS AND TAKES UP THE ISSUES RELATING TO THEIR ACTIVITIES. THEY CALL FOR CONTRIB UTIONS THE BASIS OF PROJECTED EXPENSE. FOR THIS, ALSO CORRESPONDENCE WA S FILED BEFORE THE LD. CIT(A) TO SHOW THAT THESE AMOUNTS AR E REQUESTED BY CIRCULAR LETTERS AFTER TAKING A DECISI ON DURING REGMA MEETINGS. THE AMOUNTS ARE DULY PAID BY CHEQUE S TO ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 10 THE ASSOCIATION WHICH IS BASED IN NEW DELHI. THE DE TAILS IN THESE CORRESPONDENCES SHOW THAT THE ASSOCIATION WHI CH IS A NEW ONE HAS PUT AWAY RS.5 LAKHS WHICH IS IN A CORPU S FUND AND THE BALANCE HAS BEEN KEPT FOR MEETING EARLIER EXPEN SES BACK- LOG AND CURRENT AND PROJECTED EXPENSES. IN SHORT, T HE ASSOCIATION KEEPS MAKING A COLLECTION AND CALLING I T A CORPUS FROM WHICH IT INCURS THE EXPENDITURE. IN OUR VIEW, WHATEVER NAME CALLED THE AMOUNT IS COLLECTED FOR THE PURPOSE OF DEFRAYING EXPENSE OF THE ASSOCIATION. THE ASSESSEE HAS NO RIGHT TO ANY OF THE SUMS. NO CAPITAL ASSET IS BEING BUILD UP IN THE ASSOCIATION FROM WHICH THE ASSESSEE CAN DERIVE ANY BENEFIT. THEREFORE, SUCH PAYMENT HAS TO BE TREATED AS EXPENDITURE IN THE LINE OF BUSINESS AND DEDUCTIBLE U/S. 37(1). IT IS NOT THE AOS CONTENTION THAT RELEVANT SERVICES W ERE NOT RENDERED OR THAT THERE WAS ANY OTHER MOTIVE FOR MAK ING SUCH PAYMENT. IN THE CIRCUMSTANCES AND FACTS, WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT(A). THUS GROUND NO.4 OF THE RE VENUE IS DISMISSED. 10.1 SINCE THE FACTS OF THE PRESENT CASE ON THIS IS SUE ARE SIMILAR AND IDENTICAL AS IN THE ASSESSMENT YEARS 2000-01 AND 20 01-02, FOLLOWING THE DECISION OF OUR CO-ORDINATE BENCH IN AY 2000-01 AND 2001-02 CITED SUPRA, WE UPHOLD THE ORDER OF THE LEARNED CIT (A) AND DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 11. GROUND NO.3:- EXCLUSION OF SALES TAX OF RS.1,96,37,874/- AND EXCISE DUTY OF RS.5,42,20,184/- FROM TOTAL TURNOVER FOR COMPUTING DEDUCTION U/S. 80 HHC. FOR COMPUTING DEDUCTION U/S 80 HHC OF THE INCOME TAX ACT, 1961 THE ASSESSEE HAD EXCLUDED EXCI SE DUTY AND SALES TAX FROM THE TOTAL TURNOVER SINCE THESE ITEMS DO NOT FORM PART OF TURNOVER. THE EXCISE DUTY AND SALES TAX SO EXCLUDED BY THE ASSESSEE AMOUNTED TO RS.5,42,20,184/- AND RS.1,96,37,874/- R ESPECTIVELY. HOWEVER, THE LEARNED AO REJECTED THE CONTENTION OF THE ASSESSEE ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 11 RELYING ON VARIOUS CASE LAWS AND ACCORDINGLY GROSS TURNOVER OF THE BUSINESS WAS TAKEN BY INCLUDING THE ELEMENTS OF EXC ISE DUTY AND SALES TAX FOR THE WORKING OF DEDUCTION U/S 80 HHC O F THE ACT. WHEN THE MATTER CROPPED UP BEFORE THE LEARNED CIT(A), TH E LEARNED CIT(A) HELD THAT THE ADDITIONS SO MADE ON ACCOUNT OF SALES TAX AND EXCISE DUTY BEING ADDED TO THE TOTAL TURNOVER FOR THE PURP OSE OF COMPUTING DEDUCTION U/S 80 HHC OF THE ACT IS DELETED. THE LEA RNED CIT(A) ARRIVED AT THE ABOVE CONCLUSION FOLLOWING THE ORDER OF HIS PREDECESSOR FOR THE ASSESSMENT YEAR 2001-02 WHO IN TURN HAD REL IED ON THE DECISION OF THE SPECIAL BENCH OF THE ITAT CALCUTTA BENCH IN THE CASE OF IFB AGRO INDUSTRIES LTD. 12. THE LEARNED DR SUPPORTED THE ORDER OF THE LEARN ED AO AND ON THE OTHER HAND, THE LEARNED AR RELIED ON THE ORDER OF THE LEARNED CIT(A). HE FURTHER SUBMITTED THAT THE ITAT AHMEDABA D B BENCH IN THE ASSESSEES OWN CASE IN DEPARTMENTAL APPEAL IN I TA NO.1694/AHD/2001 FOR AY 1998-99 RELYING ON THE DECI SION OF THE HONBLE APEX COURT IN THE CASE OF CIT VS. LAXAMI MA CHINE WORKS, 290 ITR 667 (SC) HAS DECIDED THIS ISSUE IN FAVOUR O F THE ASSESSEE BY DISMISSING THE REVENUES APPEAL. IT WAS FURTHER SUB MITTED THAT THE SAME ISSUE WAS DECIDED BY ITAT AHMEDABAD B BENCH IN ASSESSEES OWN CASE FOR AY 1999-2000 IN ITA NO.3039 /AHD/2002 ORDER DATED 29-01-2010 IN ITS FAVOUR. THE LEARNED D R COULD NOT CONTROVERT TO THE SUBMISSIONS OF THE LEARNED AR WIT H ANY COGENT MATERIAL EVIDENCES. ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 12 12.1 ON PERUSAL OF THE MATERIALS ON RECORD, IT IS A PPARENT THAT AS CONTENDED BY THE LEARNED AR, ITAT AHMEDABAD B BEN CH IN THE ASSESSEES OWN CASE IN DEPARTMENTAL APPEAL IN ITA NO.1694/AHD/2001 FOR AY 1998-99 RELYING ON THE DECI SION OF THE HONBLE APEX COURT IN THE CASE OF CIT VS. LAXAMI MA CHINE WORKS, 290 ITR 667 (SC) CITED SUPRA HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE BY DISMISSING THE REVENUES APPEAL BY HOLD ING IN PARA 11 OF THE SAID ORDER (PAPER BOOK PAGE 8 DATED 02-11-200 9) AS UNDER: 11. THE SECOND ISSUE RELATES TO THE EXCLUSION OF T HE EXCISE DUTY AND SALES TAX COLLECTED FROM THE CUSTOMERS AS A PART OF TOTAL TURNOVER FOR THE PURPOSE OF COMPUTING DEDUCTI ON U/S. 80 HHC OF THE ACT. AT THE TIME OF HEARING, IT WAS AGRE ED HAT THE MATTER SANDS SETTLED BY THE DECISION BY THE APEX CO URT IN THE CASE OF CIT VS. LAXAMI MACHINE WORKS, 290 ITR 667 ( SC), SO THAT THE SAME ADMITS OF NO ARGUMENT, OR DISCUSSION AT OUR END. THE REVENUES GROUND, THEREFORE, STANDS DISMISSED. 12.2 FURTHER, ITAT AHMEDABAD B BENCH IN ASSESSEE S OWN CASE IN ITA NO.3039/AHD/2002 FOR AY 1999-2000 HAS DECIDED T HIS ISSUE IN ITS FAVOUR BY FOLLOWING THE AFORESAID DECISION OF THE H ONBLE SUPREME COURT CITED SUPRA. THE RELEVANT PORTION OF THE ORDE R IS REPRODUCED HEREIN UNDER FOR REFERENCE: 5. GROUND NO.2 RELATES TO ISSUE WHETHER SALES TAX AND EXCISE DUTY FORM PART OF TOTAL TURNOVER FOR CLAIMIN G DEDUCTION UNDER SECTION 80 HHC. THE ISSUE IS NOW COVERED IN F AVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. LAKSHMI MACHINE WORKS 290 ITR 6 67 (SC), WHEREIN IT IS HELD AS UNDER: (HEAD NOTES) SECTION 80HHC OF THE INCOME-TAX ACT, 1961 IS A BENEFICIAL SECTION: IT WAS INTENDED TO PROVIDE INCE NTIVE TO PROMOTE EXPORTS. THE INTENTION WAS TO EXEMPT PROFIT S ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 13 RELATABLE TO EXPORTS. JUST AS COMMISSION RECEIVED B Y THE ASSESSEE IS RELATABLE TO EXPORTS AND YET IT CANNOT FORM PART OF TURNOVER FOR THE PURPOSE OF SECTION 80HHC , EXCISE DUTY AND SALES TAX ALSO CANNOT FORM PART OF TURNOVER. JUST AS INTEREST, COMMISSION, ETC., DO NOT EMANATE FROM THE TURNOVER SO ALSO EXCISE DUTY AND SALES TAX DO NOT EMANATE FROM SUCH TURNOVER. SINCE EXCISE DUTY AND SALES TAX DID NOT INVOLVE ANY SUCH TURNOVER SUCH TAXES HAD TO BE EXCLUDED. COMMISSION, INTEREST, RENT ETC., DO YIELD PROFITS, BUT THEY DO NOT PARTAKE OF THE CHARACTER OF TURNOVER AND THEREFORE THEY ARE NOT INCLUDIBLE IN THE TOTAL TURNOVER. IF SO, EXCISE D UTY AND SALES TAX ALSO CANNOT FORM PART OF THE TOTAL TURNO VER UNDER SECTION 80HHC (3). ONE CANNOT INTERPRET THE WORDS TOTAL TURNOVER WIT H REFERENCE TO THE DEFINITION OF THE WORD TURNOVER IN OTHER LAWS LIKE THE CENTRAL SALES TAX OR AS DEFINED IN AC COUNTING PRINCIPLES. EXCISE DUTY AND ALES TAX ARE INDIRECT TAXES. THEY A RE RECOVERED BY THE ASSESSEE ON BEHALF OF THE GOVERNME NT. BY THE COURT: THE PRINCIPAL REASON FOR ENACTING A FORMULA IN SECTION 80HHC OF THE INCOME-TAX ACT, 1961, IS TO DISALLOW A PART OF THE CONCESSION THEREUNDER WHEN T HE ENTIRE DEDUCTION CLAIMED CANNOT BE REGARDED AS RELA TING TO EXPORTS. THEREFORE, WHILE INTERPRETING THE WORDS TOTAL TURNOVER IN THE FORMULA IN SECTION 80 HHC ONE HAS TO GIVE A SCHEMATIC INTERPRETATION. THE VARIOUS AMENDM ENTS MADE THEREIN SHOW THAT RECEIPTS BY WAY OF BROKERAGE , COMMISSION, INTEREST, RENT, ETC., D NOT FORM PART O F BUSINESS PROFITS AS THEY HAVE NO NEXUS WITH THE ACT IVITY OF EXPORT. THE AMENDMENTS MADE FROM TIME TO TIME INDIC ATE THAT THEY BECAME NECESSARY IN ORDER TO MAKE THE FOR MULA WORKABLE. IF SO, EXCISE DUTY AND SALES TAX ALSO CAN NOT FORM PART OF THE TOTAL TURNOVER UNDER SECTION 80 HHC(3): OTHERWISE THE FORMULA BECOMES UNWORKABLE. 5. ACCORDINGLY, THIS GROUND OF THE ASSESSEE IS ALL OWED. ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 14 12.3 CONSIDERING THE ABOVE DISCUSSIONS AND IN VIEW OF THE ABOVE DECISIONS OF THE HONBLE SUPREME COURT CITED SUPRA AND THE ORDERS OF THE TRIBUNAL (SUPRA), WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LEARNED CIT(A). WE HEREBY CONFIRM H IS ORDER AND DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 13. GROUND NO.4:- NEGATING THE REDUCTION OF RS.20,85,582/- FROM THE EXPORT TURNOVER AS WELL A TOTAL TURNOVER I N THE COMPUTATION OF DEDUCTION U/S 80 HHC . THE ASSESSEE DID NOT REDUCE THE EXPORT SHORTAGE CLAIM OF RS.20,85,582/- FROM EXPORT TURNOVER AND TOTAL TURNOVER. SINCE THE ASSESSEE HAD REFUNDED THIS AMOUNT TOWARDS SHORTAGE CLAIMS BY WAY OF CREDIT NOT ES TO ITS FOREIGN BUYERS, THE LEARNED AO REDUCED THE SAID AMOUNT FROM THE TOTAL TURNOVER AS WELL AS EXPORT TURNOVER OF THE ASSESSEE CONSIDERING IT TO BE REDUCTION OF EXPORT TURNOVER. THE LEARNED CIT(A) FOLLOWING THE ORDER OF HIS PREDECESSOR FOR AY 2001-02 ON THIS ISS UE, DIRECTED THE LEARNED AO NOT TO REDUCE THE AMOUNT OF RS.20,85,582 /- FOR THE PURPOSE OF COMPUTATION OF DEDUCTION U/S 80 HHC. THE REVENUE HAS COME IN APPEAL BEFORE US AGAINST THE ORDER OF THE L EARNED CIT(A). 14. THE LEARNED DR SUPPORTED THE ORDER OF THE LEARN ED AO AND ON THE OTHER HAND, THE LEARNED AR RELIED ON THE ORDER OF THE LEARNED CIT(A). THE LEARNED AR FURTHER SUBMITTED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE ITAT AHM EDABAD A BENCH IN DEPARTMENTAL APPEAL IN ITA NO.2460/AHD/200 4 FOR THE ASSESSMENT YEAR 2001-02 DATED 06-07-2012. THE LEARN ED DR FAIRLY CONCEDED TO THE SUBMISSION OF THE LEARNED DR. ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 15 15. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY PERUSED THE ORDERS OF THE AUTHORITIES BELOW ALONG WITH THE MATE RIALS BEFORE US. AS CONTEND BY THE LEARNED AR WE FIND THAT THE ITAT AHM EDABAD A BENCH HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSES SEE WHILE DISPOSING OFF THE REVENUES APPEAL FOR AY 2000-01 I N THE CASE OF THE ASSESSEE IN ITA NO.3748/AHD/2003 ORDER DATED 17-02- 2012 CITED SUPRA IN ITS FAVOUR AND AGAINST THE REVENUE. RELEVA NT PARA 24 OF THE ABOVE ORDER ARE REPRODUCED HEREUNDER FOR REFERENCE: 24. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE FACTS OF THE CASE. WE CONCUR WITH THE VIEW OF LD. C IT(A) THAT THE EXPORT TURNOVER REMAINS RS.80.40 CRORES AND THIS FI GURE IS VERIFIABLE FROM THE REPORT IN FORM NO.10CCAC (ANNEX URE A) WHEN THE ADJUSTED EXPORT TURNOVER WHICH IS THE MANU FACTURING TURNOVER IS CLEARLY SHOWN AT RS.80.4 CRORES. THE AS SESSEE HAS ALSO PROVIDED INVOICE-WISE FOB VALUE REALIZED FOR T HE WHOLE YEAR AND THE SAME TOTALS UP TO 80.10 CRORES. THIS P ROVES THAT THE CLAIM OF SHORTAGE OF RS.87.51 IS FURTHER PAID A S COMPENSATION WHICH MAKES THE COST OF EXPORTS HIGHER , BUT ACTUALLY DOES NOT REDUCE THE EXPORT TURNOVER. IN FA CT, THIS IS A NORMAL BUSINESS PRACTICE IN ALL TRADES WHERE SHORTA GE IN HANDLING IS COMPENSATED BY PAYMENT, BUT DOES NOT ME AN THAT GOODS WERE NOT CLEARED OR PAYMENT NOT RECEIVED FOR THE FULL AMOUNT OF EXPORT TURNOVER. THEREFORE, IN THE CIRCUM STANCES AND FACTS OF THE CASE RS.87.51 LAKH SHOULD NOT BE REDUC ED FROM THE TOTAL TURNOVER. THUS, GROUND NO.2 OF THE REVENUE IS DISMISSED. 15.1 CONSIDERING THE ABOVE DISCUSSIONS AND THE ORDE RS OF OUR CO- ORDINATE BENCH ON THE ISSUE, WHEN THE FACTS OF THE PRESENT CASE IS SIMILAR AND IDENTICAL TO THE FACTS OF AY 2000-01, W E FEEL NO REASON TO INTERFERE WITH THE ORDER OF THE LEARNED CIT(A). ACC ORDINGLY, WE SUSTAIN HIS ORDER ON THIS ISSUE AND DISMISS GROUND NO.4 OF THE APPEAL OF THE REVENUE. ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 16 16. IN THE RESULT, REVENUES APPEAL IN ITA NO.4/AHD /2007 FOR AY 2003-04 IS DISMISSED. ITA NO.33/AHD/2007 (ASSESSEES APPEAL FOR AY 2003-04) 17. THE ASSESSEE IN ITS APPEAL HAS RAISED THE FOLLO WING GROUNDS: IN FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING VARIOUS DISALLOWANCES AN D OBSERVATIONS RELATING THERETO AS UNDER: 1. IN CONFIRMING THE DISALLOWANCE OF RS.60,00,000/- OUT OF EXPENDITURE ON PROFESSIONAL FEES AND CONFIRMING THAT THE SAME I S NOT ALLOWABLE UNDER ANY HEAD OF INCOME. YOUR APPELLANT SUBMITS THAT THE DISALLOWANCE IS NOT JUSTIFIED AND PRAYS THAT THE SAME BE DELETED. 2. IN CONFIRMING THE DISALLOWANCE OF RS.81,653/- BE ING PROFESSIONAL FEE PAID FOR PORTFOLIO MANAGEMENT SERVICES FOR SECU RITIES ON THE GROUND THAT SUCH EXPENSES ARE NOT ALLOWABLE. YOUR APPELLANT SUBMITS THAT THE DISALLOWANCE IS NOT JUSTIFIED AND PRAYS THAT THE SAME BE DELETED. 3. IN CONFIRMING THE DISALLOWANCE OF RS.9,60,000/- BEING CHARGES FOR EXTENSION OF TIME FOR CONSTRUCTION OF BUILDING AT N OIDA BY CONFIRMING THAT THE PAYMENT WAS MADE TO PROTECT THE TITLE OF T HE LAND AND HENCE CLEARLY CAPITAL EXPENDITURE. YOUR APPELLANT SUBMITS THAT THE DISALLOWANCE IS NOT JUSTIFIED AND PRAYS THAT THE SAME BE DELETED. 4. IN CONFIRMING THE DISALLOWANCE TO THE EXTENT OF 3% OF THE DIVIDEND EARNED FOR THE PURPOSE OF COMPUTING DEDUCTION UNDER SECTION 80 M ON NET AMOUNT (GROSS DIVIDEND EARNED MINUS EXPENSES RELATING TO THE DIVIDEND INCOME EARNED). YOUR APPELLANT SUBMITS THAT THE DISALLOWANCE IS NOT JUSTIFIED AND PRAYS THAT THE SAME BE DELETED. ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 17 18. GROUND NO.1:- D ISALLOWANCE OF RS.60,00,000/- OUT OF EXPENDITURE ON PROFESSIONAL FEES. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE LEARNED AO OBSERVED THAT THE ASSESSEE HAD PAID AN AMOUNT OF RS.60 LACS TO M/S. KRISHNADEE P HOUSING DEVELOPMENT PVT. LTD. ON BEING ENQUIRED THE ASSESSE E REPLIED THAT THIS PAYMENT WAS MADE TOWARDS MANAGEMENT CONSULTANC Y SERVICES RENDERED BY THE RECIPIENT. IT WAS FURTHER EXPLAINED THAT THE ASSESSEE COMPANY HAD HUGE FUNDS AND THEY HAD TO BE MANAGED I N SUCH A MANNER WHICH IS MOST BENEFICIAL TO THE INTEREST OF THE COMPANY AND, THEREFORE, SERVICES FROM SPECIALIZED CONSULTANTS HA D TO BE ENGAGED. HOWEVER, THE LEARNED AO DISALLOWED THIS AMOUNT OF R S.60 LACS FOR THE FOLLOWING REASONS: (I) AS PER THE MEMORANDUM/ARTICLES OF ASSOCIATION O F THE COMPANY THE ASSESSEE IS IN THE BUSINESS OF MANUFACT URING AND SALE OF REFRIGERANT GASES, THEREFORE, THIS EXPENDIT URE IS PRIMA FACIE NOT EXPENDITURE INCURRED FOR THE PURPOSE OF T HE BUSINESS. (II) THE ACTIVITY OF INVESTMENT WOULD RESULT IN INC OME CHARGEABLE TO TAX UNDER THE HEAD CAPITAL GAINS OR UNDER THE HEAD INCOME FROM OTHER SOURCE. THEREFORE, THE EXP ENDITURE INCURRED FOR THE PURPOSE OF INVESTMENT CANNOT BE WR ITTEN OFF AS BUSINESS EXPENDITURE. THE SAME HAS TO BE INCLUDED I N THE COST OF ACQUISITION OF THE ASSET OR TREATED AS AN ALLOWA BLE DEDUCTION AS PER THE PROVISIONS CONTAINED UNDER THE HEAD INC OME FROM OTHER SOURCE, AS THE CASE MAY BE. 19. THIS ISSUE WAS BROUGHT UP BEFORE THE LEARNED CI T(A). THE LEARNED CIT(A) CONFIRMED THE ORDER OF THE LEARNED A O WITH THE FOLLOWING REMARKS: (I) THE FINDINGS OF THE LEARNED AO ARE IN ORDER AND , THEREFORE, UPHELD. ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 18 (II) FURTHER, THE ASSESSEE HAD FAILED TO SHOW AS TO HOW AND IN WHAT WAY ANY PARTICULAR PART OF THE EXPENDITURE OF RS.60 LACS IS INEXTRICABLY LINKED WITH THE EARNING OF INCOME UNDE R THE HEAD CAPITAL GAIN AND INCURRED IN CONNECTION WITH THE TRANSFER OF ANY PARTICULAR CAPITAL ASSET. (III) SIMILARLY, THE ASSESSEE HAD FAILED TO SHOW AS TO HOW AND IN WHAT WAY THE EXPENDITURE HAS BEEN INCURRED WHOLL Y AND EXCLUSIVELY FOR THE PURPOSE OF EARNING INCOME UNDER THE HEAD INCOME FROM OTHER SOURCE IN ORDER TO CLAIM DEDUCT ION U/S 57 (3) OF THE ACT. 20. THE LEARNED CIT(A) FURTHER DISTINGUISHED THE OR DER OF THE LEARNED CIT(A) FOR THE ASSESSMENT YEAR 2001-02 AND BASED ON THE ABOVE REASONING CONFIRMED THE ORDER OF THE LEARNED AO BY DISALLOWING RS.60 LACS AS DEDUCTIBLE EXPENDITURE. 21. BEFORE US, THE LEARNED AR REITERATED HIS SUBMIS SIONS MADE BEFORE THE AUTHORITIES BELOW AND PRAYED THAT THE DI SALLOWANCE MAY BE ALLOWED. ON THE OTHER HAND, THE LEARNED DR SUPPORTE D THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ISSUE HAS BEEN DECIDED BY THE ITAT AHMEDABAD A BENCH IN THE CASE OF THE ASSESSEE FOR AY 2001-02 IN REVENUES APPEAL IN ITA NO.2460/AHD/2 004 ORDER DATED 06-07-2012 AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE AND FURTHER SUBMITTED THAT THE SAME MAY BE FOLLOWED IN THIS YEAR ALSO. 22. WE HAVE HEARD THE RIVAL SUBMISSION AND CAREFULL Y GONE THROUGH THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT AS SUBMITTED BY THE LEARNED DR, ITAT AHMEDABAD A BENCH HAS DECIDED TH IS ISSUE IN AY 2001-02 IN REVENUES APPEAL IN THE CASE OF THE A SSESSEE CITED ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 19 SUPRA IN FAVOUR OF THE REVENUE. THE RELEVANT PORTIO N OF THE SAID ORDER DATED 06-07-2012 IS REPRODUCED HEREIN BELOW FOR REF ERENCE: 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERU SED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT INITIALLY, THE DISA LLOWANCE WAS MADE BY THE A. O. OF RS.46.10 LACS OUT OF PAYMENT O F PROFESSIONAL FEES. THE SAME INCLUDED THE AMOUNT OF RS.1.10 LACS AS PAYMENT OF PROFESSIONAL FEE TO SHRI ARUN MO HAN AND THIS DISALLOWANCE WAS UPHELD BY LD. CIT(A). THE REM AINING AMOUNT OF RS.45 LACS WAS PAID AS CONSULTANCY FEES T O KRIISHNADEEP HOUSING DEVELOPMENT PVT. LTD. AND ASCO N MAANGEMENT FOR INVESTMENT ADVISORY SERVICES. IT WAS THE SUBMISSION OF THE ASSESSEE BEFORE LD. CIT(A) THAT F IRSTLY, THE ASSESSEE COMPANY HAS INVESTED IN FIXED ASSETS, DEBE NTURES, ADVANCES, ICD AND BANK DEPOSITS, IMMOVABLE PROPERTY AND SHARES AND MUTUAL FUNDS ETC. AND THEREFORE, IT CANN OT BE SAID THAT THE SERVICES RENDERED BY THESE TWO PERSONS IS IN RESPECT OF INVESTMENT IN SHARES. LD. CIT(A) HAS CONFIRMED THE DISALLOWANCE OF RS.2,63,972/- BEING 10% OF THE DIVI DEND INCOME AND DELETED THE BALANCE DISALLOWANCE. FROM T HE ASSESSMENT ORDER, WE FIND THAT THE ASSESSEE HAS EAR NED DIVIDEND INCOME OF RS.27,23,178/- AND INTEREST ON T AX FREE BONDS OF RS.10.50 LACS TOTALING TO RS.37.73 LACS. I N ADDITION TO THIS, NO INCOME IS REPORTED BY THE ASSESSEE UNDER T HE HEAD INCOME FROM OTHER SOURCES, BEING ON ACCOUNT OF INV ESTMENT OTHER THAN INVESTMENT IN SHARES FOR WHICH THIS PAYM ENT OF PROFESSIONAL FEE OF RS.45 LACS WAS SAID TO HAVE BEE N PAID BY THE ASSESSEE. LD. CIT(A) HAS BASED HIS FINDINGS ON THIS BASIS THAT THE ASSESSEE HAS DECLARED CAPITAL GAIN OF RS.1 .09 CRORES. THE PAYMENT OF PROFESSIONAL FEE IS NOT ALLOWABLE FO R COMPUTING CAPITAL GAIN BECAUSE IT IS NEITHER THE COST OF ACQU ISITION NOR THE COST OF IMPROVEMENT OF CAPITAL ASSET OR COST OF TRA NSFER AND, THEREFORE, THE ENTIRE PAYMENT OF PROFESSIONAL FEE H AS TO BE CONSIDERED TOWARDS EARNING OF DIVIDEND INCOME IN TH E ABSENCE OF ANY OTHER INCOME FROM ANY OTHER INVESTMENT BEING SHOWN BY THE ASSESSEE. EVEN THIS IS NOT SHOWN THAT ANY SUCH OTHER INVESTMENT WAS MADE BUT NO INCOME WAS EARNED. WE, THEREFORE, REVERSE THE ORDER OF THE LD. CIT(A) ON T HIS ISSUE AND ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 20 RESTORE THAT OF THE A. O. THIS ADDITIONAL GROUND OF THE REVENUE IS ALLOWED. 22.1 CONSIDERING THE FACTS AND ISSUE OF THE PRESENT CASE BEFORE US, WE FIND THAT THEY ARE IDENTICAL TO THE FACTS AND IS SUES IN THE CASE FOR THE AY 2001-02, CITED SUPRA. WE, THEREFORE, ARE BOU ND BY THE DECISION OF OUR CO-ORDINATE BENCH CITED SUPRA, AND, THEREFORE, FIND NO REASON TO INTERFERE IN THE ORDER OF THE LEARNED CIT (A) AND THE LEARNED AO. ACCORDINGLY, THIS GROUND RAISED BY THE ASSESSEE IS DISMISSED. 23. GROUND NO.2:- DISALLOWANCE OF RS.81,653/- BEING PROFESSIONAL FEES PAID FOR PORTFOLIO MANAGEMENT SER VICES FOR SECURITIES :- THE LEARNED AO NOTICED FROM THE DETAILS OF LEGAL AN D PROFESSIONAL CHARGES FILED BY THE ASSESSEE THAT THE ASSESSEE PAID RS.81,653/- TO PN VIJAY ON ACCOUNT OF MANAGEMENT PO RTFOLIO SERVICES FOR PURCHASE AND SALE OF SECURITIES. THE ASSESSEE O FFERED THE INCOME FROM PURCHASE AND SALE OF SECURITIES UNDER THE HEAD CAPITAL GAIN. THE LEARNED AO DID NOT ACCEPT THIS EXPENDITURE AS INCUR RED FOR THE PURPOSE OF ASSESSEES BUSINESS AND DISALLOWED THE C LAIM OF THE ASSESSEE. THE LEARNED CIT(A), FOR THE SAME REASONI NG GIVEN IN RESPECT OF THE PAYMENT OF PROFESSIONAL FEES FOR RS .60 LACS MADE TO M/S. KRISHNADEEP HOUSING DEVELOPMENT SOCIETY PVT. L TD., CITED SUPRA, CONFIRMED THE ORDER OF THE LEARNED AO. 24. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY PERUSED THE MATERIALS ON RECORD. FROM THE ORDERS OF THE AUTHORI TIES BELOW, IT IS APPARENT THAT THE ASSESSEE HAD PAID RS.81,653/- TO SHRI P. N. VIJAY FOR OBTAINING MANAGEMENT PORTFOLIO SERVICES IN RESP ECT OF PURCHASE ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 21 AND SALE OF SECURITIES. THIS ISSUE IS IDENTICAL TO THE ISSUE DECIDED BY OUR CO-ORDINATE BENCH FOR THE ASSESSMENT YEAR 2001- 02 BASED ON WHICH A SIMILAR DISALLOWANCE IS CONFIRMED BY US FOR AN AMOUNT OF RS.60 LACS PAID TO M/S. KRISHNADEEP HOUSING DEVELOP MENT SOCIETY PVT. LTD. HEREINABOVE. THEREFORE, FOLLOWING THE SAM E DECISION, WE HEREBY CONFIRM THE ORDERS OF THE REVENUE AND ACCORD INGLY THIS GROUND RAISED BY THE ASSESSEE IS DISMISSED. 25. GROUND NO.3:- DISALLOWANCE OF RS.9,60,000/- BEING CHARGES FOR EXTENSION OF TIME FOR CONSTRUCTION OF BUILDING AT NOIDA:- DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE LEA RNED AO NOTICED THAT THE ASSESSEE CLAIMED RS.9,60,000/- AGAINST CHA RGES PAID FOR EXTENSION OF TIME FOR CONSTRUCTION IN NOIDA. THE A SSESSEE WAS REQUIRED TO FURNISH THE NATURE AND DETAILS OF EXPEN DITURE AND THE REASON FOR ALLOWABILITY. THE ASSESSEE VIDE ITS LETT ER DATED 26-02-2006 SUBMITTED THAT THE PAYMENT WAS MADE BY THE ASSESSEE COMPANY FOR EXTENSION OF TIME LIMIT DUE TO DEFERMENT OF THE CON STRUCTION PLAN AND HENCE IT CAN BE TREATED AS ANNUAL MAINTENANCE CHARG ES AFTER ACQUISITION OF THE CAPITAL ASSET. HENCE, THIS EXPEN DITURE IS REVENUE IN NATURE AND ALLOWABLE AS BUSINESS EXPENDITURE. THE L EARNED AO REJECTED THE SUBMISSION OF THE ASSESSEE AS THE PAYM ENT WAS MADE TO PROTECT TITLE OF THE LAND AND, THEREFORE, TREATED T HE SAME AS CAPITAL IN NATURE. THE LEARNED AO ALSO HELD THAT THE PAYMENT W AS MADE AS PENALTY DUE TO BREACH OF CONTRACT. ACCORDINGLY, THE LEARNED AO DISALLOWED THE CLAIM OF THE ASSESSEE AND ADDED THE SAME TO ITS INCOME. THE LEARNED CIT(A) CONFIRMED THE DISALLOWAN CE MADE BY THE LEARNED AO BY HOLDING IN PARA 19 OF HIS ORDER AS UN DER: ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 22 19. I HAVE GIVEN A CAREFUL CONSIDERATION TO THE RI VAL SUBMISSIONS. IT IS CLEAR THAT THE PAYMENT IS NOT OF A REGULAR NATURE IN THE FORM OF ANY ANNUAL MAINTENANCE CHARGE S AFTER THE ACQUISITION OF THE CAPITAL ASSETS. IT HAS BEEN PAID TO PROTECT THE CAPITAL ASSET ON WHICH NO CONSTRUCTION HAS YET TAKE N PLACE. IT HAS BROUGHT BENEFIT OF ENDURING NATURE. IT IS CLEAR LY IN THE NATURE OF CAPITAL EXPENDITURE AND HAS BEEN CORRECTLY SO HE LD BY THE ASSESSING OFFICER. THE ADDITION MADE OF RS.9,60,000 /- IS CONFIRMED. 26. THE LEARNED DR REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. ON THE OTHER HAND, THE LEARNED A R SUBMITTED THAT THE EXPENDITURE WAS INCURRED IS IN THE NATURE OF MA INTENANCE EXPENSES ON ITS ASSETS AND HENCE THE SAME MAY BE TR EATED AS REVENUE EXPENDITURE. 27. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY PERUSED THE MATERIALS ON RECORD. IT IS APPARENT FROM THE ABOVE THAT THE PAYMENT OF RS.9,60,000/- IS MADE BY THE ASSESSEE FOR SEEKING E XTENSION OF TIME FOR CONSTRUCTION OF BUILDING AT NOIDA. THE DEFERMEN T OF THE CONSTRUCTION PLAN WAS FOR VARIOUS COMMERCIAL REASON S. IT IS ALSO EVIDENT THAT IF THIS REQUISITE FEE IS NOT PAID THE ALLOTMENT OF THE LAND MAY STAND CANCELLED. THIS CLEARLY ESTABLISHES THAT THIS AMOUNT IS PAID FOR RETAINING THE TITLE OF THE LAND OR EITHER TO PR OTECT THE TITLE OF THE LAND. IN THESE CIRCUMSTANCES, THE AMOUNT OF RS.9,60,000/- PAID TO THE AUTHORITIES IS CAPITAL EXPENDITURE AND ACCORDINGLY, IT HAS TO BE CAPITALIZED WITH THE COST OF THE ASSET. THUS, WE A RE IN CONFORMITY WITH THE ORDERS OF THE REVENUE AUTHORITIES AND DISMISS T HIS GROUND RAISED BY THE ASSESSEE. ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 23 28. GROUND NO.4:- DISALLOWANCE TO THE EXTENT OF 3% OF THE DIVIDEND EARNED FOR THE PURPOSE OF COMPUTING DEDUCT ION UNDER SECTION 80 M. THE LEARNED AO NOTICED THAT THE ASSESSEE HAD DECLARED RS.1,43,87,123/- AS DIVIDEND INCOME AND IN THE COMPUTATION OF INCOME THE SAME AMOUNT HAD BEEN CLAIMED AS INCOM E DISTRIBUTED FOR DEDUCTION U/S 80 M OF THE ACT. THE ASSESSEE WA S ASKED TO FURNISH THE DETAILS OF DIVIDEND INCOME, DIVIDEND DISTRIBUTE D AND DETAILS OF EXPENSES INCURRED FOR EARNING THE DIVIDEND INCOME. THE ASSESSEE WAS ALSO REQUIRED TO EXPLAIN AS TO HOW DEDUCTION U/ S 80 M SHOULD BE GRANTED ON THE ENTIRE GROSS DIVIDEND AMOUNT AND WHY EXPENSES INCURRED FOR EARNING SUCH DIVIDEND SHOULD NOT BE CO NSIDERED FOR CALCULATING DEDUCTION U/S 80 M OF THE ACT. IT WAS SUBMITTED BY THE ASSESSEE THAT IT HAD EARNED RS.1,43,87,123/- AND AS PER U/S 80 M OF THE ACT DIVIDEND PAID BY THE ASSESSEE AMOUNTING TO RS.3,47,34,000/- WAS DEDUCTIBLE IN THE AY 2003-04. IT WAS FURTHER SU BMITTED BY THE ASSESSEE THAT TDS ON DIVIDEND WAS DEDUCTED AND MORE THAN 95% OF THE DIVIDEND WAS RECEIVED FROM SINGLE COMPANY ON PR EFERENCE SHARES FOR WHICH INVESTMENTS WERE MADE FROM INTERNAL ACCRU ALS OF THE ASSESSEE COMPANY AND HENCE, NO SPECIFIC EXPENDITURE WAS INCURRED TO EARN SUCH DIVIDEND. THE LEARNED AO WAS OF THE OP INION THAT THE ASSESSEE HAD CLAIMED THE INVESTMENT IN THE SHARES A S STOCK IN TRADE AND CLAIMED THE SAME AS BUSINESS EXPENDITURE. THE A SSESSEE HAD ALSO NOT MADE ANY SUBMISSION REGARDING ANY EXPENSES RELATED TO EARNING OF DIVIDEND. ACCORDINGLY, THE LEARNED AO RE LYING ON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF C IT VS UNITED GENERAL TRUST PVT. LTD. REPORTED IN 200 ITR 488 (SC ) TREATED 10% OF THE DIVIDEND AMOUNT AS EXPENSES FOR EARNING SUCH IN COME AND ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 24 DISALLOWED AN AMOUNT OF RS.14,38,712/- AND ADDED TH E SAME TO THE INCOME OF THE ASSESSEE. THE LEARNED CIT(A) CONSIDER ING THE SUBMISSIONS MADE BEFORE HIM AND THE FACT THAT ASSES SEE HAD EARNED MORE THAN 95% OF THE DIVIDEND INCOME FROM ITS SISTE R CONCERN, HELD THAT 10% DISALLOWANCE OF DIVIDEND INCOME IS NOT JUS TIFIABLE AND REDUCED THE DISALLOWANCE TO 3% AMOUNTING TO RS.3,31 ,617/-. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE ORD ER OF THE LEARNED CIT(A). 29. THE LEARNED AR REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND ARGUED THAT NO DISALLOWANCE C AN BE MADE ON AD HOC BASIS AND, THEREFORE, THE DISALLOWANCE MAY B E DELETED. ON THE OTHER HAND, THE LEARNED DR SUPPORTED THE ORDER OF T HE LEARNED CIT(A) AND PLEADED THAT HIS ORDER MAY BE SUSTAINED. 30. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND CONSIDERED THE MATERIALS ON RECORD ALONG WITH THE PAPER BOOK FILED BY THE ASSESSEE. IT WAS S UBMITTED BY THE LEARNED AR THAT THIS ISSUE HAS BEEN DECIDED IN FAVO UR OF THE ASSESSEE BY ITAT AHMEDABAD C BENCH IN THE CASE OF SAGAR DRUGS & PHARMACEUTICALS (P) LTD. IN ITA NO.3179/AHD/2009 IN AY 2006-07 VIDE ORDER DATED 03-06-2011. THE RELEVANT PORTION O F THE FINDINGS OF THE TRIBUNAL IN PARA 6 OF THE ORDER ARE REPRODUCED HEREIN BELOW: 6. WE HAVE HEARD THE RIVAL PARTIES. IN OUR CONSIDE RED VIEW THE POSITION OF LAW IN RELATION TO DISALLOWANCE OF ADMINISTRATIVE EXPENSES IS NOW CLEAR. SUCH DISALLOWANCE CANNOT BE MADE PRIOR TO ASST. YEAR 2007-08 UNLESS THERE IS A DIREC T NEXUS ESTABLISHED BY THE AO. IT HAS HELD THAT RULE 8D IS NOT ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 25 RETROSPECTIVE AND WOULD BE APPLICABLE FOR AND FROM ASST. YEAR 2007-08 AND, THEREFORE, IT CANNOT BE APPLIED IN ASS T. YEAR 2006- 07WHICH IS BEFORE US AND, THEREFORE, CALCULATION AS PER RULE 8 D CANNOT BE DONE FOR DISALLOWANCE OF ADMINISTRATIVE E XPENSES, UNLESS OF COURSE A DIRECT NEXUS IS ESTABLISHED WHIC H HAS NOT BEEN DONE IN THE PRESENT CASE. ACCORDINGLY, THE ADD ITION MADE BY THE AO AND ENHANCED BY THE LD. CIT(A) IS DELETED AND THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 30.1 THE FACTS OF THE CASE CITED ABOVE BY THE ASSES SEE ARE QUITE DIFFERENT FROM THE FACTS OF THE PRESENT CASE. OUR C O-ORDINATE BENCH IN ITA NO.3179/AHD/2009 FOR THE ASSESSMENT YEAR 2006-0 7 HAVE RENDERED THE AFORESAID DECISION WITH RESPECT TO ADD ITION U/S 14A OF THE ACT AND RULE 8D OF THE INCOME TAX RULES, WHILE AS THE CASE BEFORE US FALLS UNDER DIFFERENT PROVISIONS OF THE A CT. ALLOCATION OF EXPENSES TO AN ACTIVITY IS A PRIMARY PRINCIPLE TO D ETERMINE THE CORRECT INCOME OF THE ASSESSEE WHICH MAY BE SOMETIMES CUMBE RSOME, HOWEVER, INEVITABLE. THE ASSESSEE OUGHT TO HAVE ALL OCATED ITS EXPENSES FOR EARNING THE DIVIDEND INCOME WHICH IT F AILED TO DO SO. THEREFORE, THE REVENUE HAD NO OTHER OPTION BUT TO M AKE AN ADDITION ON ESTIMATE BASIS. THE LEARNED CIT(A) WAS GRACIOUS TO REDUCE THE DISALLOWANCE FROM 10% OF THE DIVIDEND EARNED TO 3%. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTE REST OF JUSTICE AND EQUITY, WE ARE OF THE OPINION THAT SUCH DISALLOWANC E OF 1% ON THE DIVIDEND EARNED WILL SUFFICE. ACCORDINGLY, THIS GRO UND RAISED BY THE ASSESSEE IS PARTLY ALLOWED. ITA NO.4 AND 33/AHD/2007 (AY- 2003-04) GUJARAT FLUROCHEMICALS LTD. 26 IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED AND THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14-12-2012. SD/- SD/- (D. K. TYAGI) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT LAKSHMIKANT LAKSHMIKANT LAKSHMIKANTA AA A DEKA/ DEKA/ DEKA/ DEKA/- -- - COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 02-11-12/07-11-12/05-12-12-1 2 (DIRECT ON COMPUTER) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 05-12-12 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: