M/S. ACC LTD ( FORMERLY KNOWN AS THE ASSOCIATED CEMENT COMPANIES LTD ), V. THE JCIT (OSD) RG 1(1),

ITA 4242/MUM/2007

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4278 (ITAT-MUMBAI)
• Duration Of Justice: 11 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 08-09-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 05-06-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Depreciation; Opportunity of being heard; Cost of acquisition; Fair market value; Bad and doubtful debts; Capital receipt; Revised return; Unabsorbed depreciation; Revenue expenditure; Capital expenditure; Set aside; Capital Gains
• Section: 43B; 142(1); 234B; 115JB; 143(1); 201; 251; 143(2); 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI G. S. PANNU , VP AND SHRI AMARJIT SINGH, JM / I .T.A. NO. 4242/MUM/2007 ( / ASSESSMENT YEAR: 2003 - 04 ) ACC LIMITED (FORMERLY KNOWN AS THE ASSOCIA TED CEMENT COMPANIES LTD.) CEMENT HOUSE 121, M.K. ROAD, MUMBAI. / VS. JOINT COMMISSIONER OF INCOME TAX (OSD), RANGE - 1(1) MUMBAI. / I .T.A. NO. 4988/MUM/2007 ( / ASSESSMENT YEAR: 2003 - 04 ) JOINT COMMISSIONER OF INCOME TAX (OSD), R ANGE - 1(1) MUMBAI . / VS. ACC LIMITED (FORMERLY KNOWN AS THE ASSOCIATED CEMENT COMPANIES LTD.) CEMENT HOUSE 121, M.K. ROAD, MUMBAI . ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 21.12.2018 / DATE OF PRONOUNCEMENT : 13.03 .2019 / O R D E R PER AMARJIT SINGH, J M: THE ASSESSEE AS WELL AS REVENUE HAVE FILED THE ABOVE MENTIONED APPEALS AGAINST THE ORDER DATED 11.05.2007 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 1 , MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 2003 - 04 . REVENUE BY: SHRI HIMANSHU SHARMA ASSESSEE BY : SHRI YOGESH A THAR & SHRI CHAITANYA D. JOSHI ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 2 ITA. NO.4242/M/ 2007 :- 2 . THE ASSESSEE HAS FILED THE PRESENT A PPEAL AGAINST THE ORDER DATED 11 . 05 .20 07 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 1 , MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 2003 - 04 . 3. THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS: - 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (APPEALS) FIRED IN CONFIRMING THE ADDITION OF INTEREST RECEIVED ON DEPOSIT WITH ARV SOCIETY AND MSEB OF RS.85,479/ - AND RS.5,250/ - RESPECTIVELY IN THE COMPUTATION OF B OOK PROFIT U/S 115JB. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD, CIT (APPEALS) ERRED IN CONFIRMING THE ADDITION OF CORPORATE TAX PAID AT SAUDI ARABIA AMOUNTING LO RS.2,05,75,346/ - IN THE COMPUTATION OF BOOK PROFIT U/S 135JB. 3. TH AT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (APPEALS) ERRED IN CONFIRMING THE ADDITION OF DEFERRED TAX LIABILITY OF RS,4,71,00,000/ - IN THE COMPUTATION OF BOOK PROFIT U/S 115JB. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (APPEALS) ERRED IN CONFIRMING THE ADDITION OF DIVIDEND DISTRIBUTION TAX OF RS.5,48,00,000/ - IN COMPUTING BOOK PROFIT U/S 115JB. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (APPEALS) ERRED IN NOT ALLOWING EX CLUSION OF PROVISION FOR EMPLOYEES INCENTIVE WRITTEN BACK AMOUNTING TO RS.46,00,000/ - IN THE COMPUTATION OF BOOK PROFIT U/5115JB. 6. THAT ON DIE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT (APPEALS) ERRED CONFIRMING THE ADDITION OF EXPENDI TURE ON COMPUTER SOFTWARE OF RS.39,00,000/ - IN THE COMPUTATION OF BOOK PROFIT U/S 115JB. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT (APPEALS) ERRED IN NOT EXCLUDING PROFIT ON SALE OF ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 3 INVESTMENTS OF RS.50,33,66,545/ - IN COMPUT ATION OF BOOK PROFIT U/S H5JR 8. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(APPEALS) GROSSLY ERRED IN INVOKING THE PROVISIONS OF SECTION 115JB, WHILE TAX PAYABLE UNDER NORMAL PROVISION OF THE ACT IS NIL. 9. THAT ON THE (ACTS AN D IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT (APPEALS) ERRED IN CONFIRMING DISALLOWANCE OF RAILWAYS/INSURANCE CLAIMS WRITTEN OFF IN THE PROFIT & LOSS ACCOUNT OF RS.4,66,389/ - . 10. THAT ON THE (ACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT (A PPEALS) ERRED IN CONFIRMING SETTING OFF OF UNABSORBED DEPRECIATION OF THE CURRENT PREVIOUS YEAR WITH LONG TERM CAPITAL GAIN OF THE CURRENT PREVIOUS YEAR INSTEAD OF SETTING IT OFF WITH LONG TERM CAPITAL LOSS BROUGHT FORWARD FROM EARLIER YEARS. 11. THAT ON THE (ACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT (APPEALS) ERRED IN CONFIRMING SETTING OFF OF UNABSORBED DEPRECIATION OF THE CURRENT PREVIOUS YEAR WITH SHORT TERM CAPITA] GAIN OF THE CURRENT PREVIOUS YEAR INSTEAD OF ALLOWING DEDUCTION UND ER CHAPTER VIA AGAINST SHORT TERM CAPITAL GAIN 12. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS) ERRED IN TREATING INTEREST ON INCOME TAX REFUND OF RS.4,26,95,068/ - AS INCOME FROM OTHER SOURCES INSTEAD OF PROFIT AND GAIN S OF BUSINESS OR PROFESSION. 13. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (APPEALS) ERRED IN DISALLOWING THE DIVIDEND CHARGED TO THE PROFIT AND LOSS ACCOUNT OF 42,73,24,860/ - IN COMPUTING TOTAL INCOME UNDE R NORMAL PROVISIONS OF THE ACT. 14. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO AMEND, MODIFY, RESCIND, SUPPLEMENT OR ALTER ANY OF THE GROUNDS STATED HERE - IN - ABOVE, EITHER BEFORE OR AT THE TIME OF HEARING OF THIS APPEAL. 4 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 27.11.2003 DECLARING TOTAL LOSS TO THE TUNE OF RS.41,17,54,834/ - . ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 4 THE PROFITS TAXABLE FOR THE PURPOSE OF SECTION 115JB OF THE ACT WAS DECLARED TO THE TUNE OF RS.106,88,60,674/ - . THE RETURN WAS ACCOMP ANIED BY TAX AUDIT REPORT U/S 44AB OF THE ACT AND PRINTED COPY OF ANNUAL ACCOUNT REPORT ETC. THE RETURN WAS PROCESSED U/S 143(1) OF THE I.T. ACT, 1961 ON 11.03.2004 WITHOUT MAKING ANY CHANGE IN THE INCOME AND REFUND OF RS.2,30,81,123/ - WAS ISSUED ON 31.03. 2004. T HE ASSESSEE FILED THE REVISED RETURN OF INCOME ON 31.03.2005 AND OFFERED INTEREST ON INCOME TAX REFUND OF RS.4,26,95,068/ - AND SUM OF RS.12,50,000/ - BEING SUBSIDY RECEIVED WHICH WAS NOT OFFERED AS INCOME AND OFFERED CERTAIN ADJUSTMENTS. THEREAFTER, THE NOTICE U/S 143(2) & 142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE. THEREAFTER, THE ASSESSMENT OF THE ASSESSEE WAS COMPLETED BY ASSESSING THE LOSS TO THE TUNE OF RS.65,84,52,848/ - AND BOOK PROFIT U/S 115JB OF THE ACT TO THE TUNE OF RS.1,89, 56,60,483/ - AND TAX @ 7.5% OF THE BOOK PROFITS AND SURCHARGE @ 5% TOTAL TO THE TUNE OF RS.14,92,83,263/ - WAS ASSESSED. FEELING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO PARTLY ALLOWED THE CLAIM OF THE ASSESSEE BUT THE ASSESSEE WAS NOT S ATISFIED ON THE GROUNDS MENTIONED ABOVE, THEREFORE , THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. ISSUE NO. 1 : - 5 . AT THE TIME OF ARGUMENT, THIS ISSUE HAS NOT BEEN PRESSED B Y THE ASSESSEE, THEREFORE, THIS ISSUE IS BEING DECIDED IN FAVOUR OF THE REVE NUE AGAINST THE ASSESSEE BEING NOT PRESSED . ISSUE NO. 2: - ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 5 6. UNDER THESE ISSUE S THE ASSESSEE HAS CHALLENGED THE CONFIRMATION OF THE ADDITION OF CORPORATE TAX PAID AT SAUDI ARABIA IN COMPUTING BOOK PROFIT U/S 115JB OF THE ACT TO THE TUNE OF RS.2,05,75,346/ - . THE LD. REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE CORPORATE TAX PAID AT SAUDI ARABIA HAS NOT BEEN COVERED ANY ADJUSTMENT SPECIFIED IN EXPLANATION TO SECTION 115JB(2) OF THE ACT SO CANNOT BE ADDED BACK IN COMPUTING BOOK PROFIT U/S 115JB OF THE AC T. IN SUPPORT OF THIS CONTENTION THE LD. REPRESENTATIVE OF THE ASSESSEE HAS PLACED RELIANCE UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF APOLLO TYRES LTD. VS. CIT (2002) ITR 273 (SC) AND NATIONAL HYDROELECTRIC POWER CORPORATION LTD. VS. CI T (2010) 187 TAXMAN 193 (SC). HOWEVER, ON THE OTHER HAND, THE LD. REPRESENTATIVE OF THE DEPARTMENT HAS REFUTED THE SAID CONTENTION. ON APPRAISAL OF THE ORDER PASSED BY THE CIT(A) ON RECORD AND ALSO GOING THROUGH THE MATERIAL PLACED BEFORE US, WE NOTICED TH AT THE CLAIM OF THE CORPORATE TAX PAID AT SAUDI ARABIA TO THE TUNE OF RS. 2,05,75,346/ - IN COMPUTING THE TOTAL INCOME UNDER THE NORMAL PROVISION OF THE ACT HAS BEEN ALLOWED. HOWEVER, THE CLAIM U/S 115JB OF THE ACT IN CONNECTION WITH THIS AMOUNT HAS BEEN DIS ALLOWED. BEFORE DECLINING OF CLAIM OF THE ASSESSEE NO DOUBT IT IS REQUIRED TO BE SEEN WHETHER THE CLAIM RAISED BY ASSESSEE COMES WITHIN THE AMBIT OF SECTION 115JB OF THE ACT OR NOT. ACCORDING TO THE PROVISION US/ 115JB OF THE ACT, THE AO WHILE COMPUTING TH E INCOME U/S 115JB OF THE ACT HAS ONLY THE POWER OF THE EXAMINING WHETHER THE BOOKS OF ACCOUNT ARE CERTIFIED BY THE AUTHORITY UNDER THE COMPANIES ACT AND HAVING THE PROPERLY MANUFACTURED IN ACCORDANCE WITH COMPANIES ACT. THE AO HAS LIMITED POWER OF REVENUE INCREASES AND DEDUCTION AND HAS NO JURISDICTION TO GO BEHIND THE PROFIT AND LOSS ACCOUNT ACCEPT TO THE PROFIT OF EXPLANATION TO ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 6 SECTION 115JB OF THE ACT. SINCE THE A MOUNT OF AAD HAS B EEN REDUCED AND THERE IS NO DEBIT IN PROFIT AND LOSS ACCOUNT, THEREFORE, THE AMOUNT DID NOT ENTER THE STREAM OF THE INCOME FOR THE PURPOSE OF DETERMINING OF NET PROFIT AT ALL AND, THEREFORE, CLAUSE (B) OF EXPLANATION 1 IS NOT APPLICABLE TO THE PRESENT CASE. IN THIS REGARD, WE ALSO FIND SUPPORT OF LAW SETTLED IN APOLLO TYRES LT D. VS. CIT (2002) ITR 273 (SC) AND NATIONAL HYDROELECTRIC POWER CORPORATION LTD. VS. CIT (2010) 187 TAXMAN 193 (SC). SINCE NO ADDITION CAN BE RAISED EXCEPT THIS ACCORDING TO SPECIAL PROVISION MENTIONED IN THE PROVISION U/S 115JB OF THE ACT, THEREFORE, THE FINDING OF THE CIT(A) IS NOT JUSTIFIABLE, HENCE, BY RELYI NG UPON THE LAW MENTIONED ABOVE I.E., APOLLO TYRES LTD. VS. CIT (2002) ITR 273 (SC) AND NATIONAL HYDROELECTRIC POWER CORPORATION LTD. VS. CIT (2010) 187 TAXMAN 193 (SC), WE SET ASIDE THE FINDING OF T HE CIT(A) ON THIS ISSUE AND ALLOWED THE CLAIM OF THE ASSESSEE. ISSUE NOS. 3,4, & 5: - 7 . AT THE TIME OF ARGUMENT, ISSUE NOS. 3, 4, & 5 HAVE NOT BEEN PRESSED BY THE ASSESSEE, THEREFORE, THESE ISSUES ARE BEING DECIDED IN FAVOUR OF THE REVENUE AGAINST THE ASSE SSEE BEING NOT PRESSED . ISSUE NO. 6: - 8 . UNDER THIS ISSUE , THE ASSESSEE HAS RAISED THE ADDITION IN COMPUTING BOOK PROFIT U/S 115JB OF THE ACT IN RESPECT OF EXPENDITURE ON COMPUTER SOFTWARE IN SUM OF RS.39,00,000/ - . ON THIS ISSUE THE ASSESSEE HAS RAISED THE SIMILAR CONTENTION WHICH HE RAISED WHILE ARGUING THE ISSUE NO. 2 AND ALSO RELYING UPON THE CASE TITLED AS APOLLO TYRES LTD. VS. CIT (2002) ITR 273 ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 7 (SC) AND NATIONAL HYDROELECTRIC POWER CORPORATION LTD. VS. CIT (2010) 187 TAXMAN 193 (SC). SINCE THE CLAIM O F THE ASSESSEE NOWHERE FALLS WITHIN THE PURVIEW OF THE EXPLANATION OF 115JB OF THE ACT, THEREFORE, THE ADDITION IS NOT LIABLE TO BE SUSTAINABLE IN THE EYES OF LAW. ACCODINGLY, WE SET ASIDE THE FINDING OF THE CIT(A) ON THIS ISSUE AND ALLOWED THE CLAIM OF TH E ASSESSEE. ISSUE NO. 7: - 9 . UNDER THIS ISSUE THE ASSESSEE HAS CHALLENGED THE NON - EXCLUSION OF PROFIT ON SALE OF INVESTMENTS IN COMPUTATION OF BOOK PROFIT U/S 115JB OF THE ACT OF RS.50,33,66,545/ - . AT THE TIME OF ARGUMENT, THE LD. REPRESENTATIVE OF THE ASS ESSEE HAS ARGUED THAT THIS ISSUE HAS BEEN DECIDED AGAINST THE ASSESSEE BY HONBLE ITAT IN THE ASSESSEES OWN CASE FOR THE A.Y. 2002 - 03 IN ITA. NO.4241/M/2007 DATED 29.07.2015 . SINCE , THIS ISSUE HAS BEEN DECIDED AGAINST THE ASSESSEE WHILE DECIDING THE ISSUE IN QUESTION IN THE ASSESSEES OWN CASE FOR THE A.Y. 2002 - 03 IN ITA. NO. 4241/M/2007 DATED 29.07.2015 , THEREFORE, THE PRESENT ISSUE IS HEREBY DECIDED AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE. ISSUE NO. 8: - 10. AT THE TIME OF ARGUMENT, THIS ISSUE H AS NOT BEEN PRESSED BY THE ASSESSEE, THEREFORE, THIS ISSUE IS BEING DECIDED IN FAVOUR OF THE REVENUE AGAINST THE ASSESSEE BEING NOT PRESSED. ISSUE NO. 9: - ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 8 11. UNDER THIS ISSUE THE ASSESSEE HAS CHALLENGED THE DISALLOWANCE OF RAILWAYS/ INSURANCE CLAIMS WRITTE N OFF IN SUM OF RS.4,66,389/ - . ON APPRAISAL OF THE ORDER PASSED BY THE CIT(A) AND RELEVANT RECORD ON THE FILE, WE NOTICED THAT THIS ISSUE HAS BEEN RESTORED TO THE AO WHILE DECIDING THE ISSUE IN QUESTION IN THE ASSESSEES OWN CASE FOR THE A.Y. 2002 - 03 IN IT A. NO.4987/M/2007 DATED 29.05.2015. ACCORDINGLY, WE SET ASIDE THE FINDING OF THE CIT(A) ON THIS ISSUE AND RESTORED THE MATTER BEFORE THE AO TO DECIDE THE MATTER OF CONTROVERSY AFRESH ON SIMILAR LINES WHICH HAS BEEN DIRECTED BY HONBLE ITAT IN THE ASSESSEE S OWN CASE RELEVANT TO THE A.Y. 2002 - 03 IN ITA. NO. 4987/M/2007 DATED 29.05.2015. NEEDLESS TO SAY THAT AN OPPORTUNITY OF BEING HEARD IS REQUIRED TO BE GIVEN TO THE ASSESSEE IN ACCORDANCE WITH LAW. A CCORDINGLY, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSE E AGAINST THE REVENUE. ISSUE NO. 10: - 12 . UNDER THIS ISSUE THE ASSESSEE HAS CHALLENGED THE CONFIRMATION OF SETTING OFF OF UNABSORBED DEPRECIATION OF THE CURRENT PREVIOUS YEAR WITH LONG TERM CAPITAL GAIN OF THE CURRENT PREVIOUS YEAR INSTEAD OF SETTING IT OF F WITH LONG TERM CAPITAL LOSS BROUGHT FORWARD FROM EARLIER YEARS. THE ASSESSEE WANTED TO SET OFF IN FUTURE BUT THE ASSESSING OFFICER DECLINED THE CLAIM OF THE ASSESSEE ON ACCOUNT OF THIS FACT THAT THE CLAIM IS AGAINST PROVISION OF INCOME TAX. THE CIT(A) HA S ALSO DECLINED THE CLAIM OF THE ASSESSEE ON THE BASIS OF THIS FACT THAT SECTION 71 DEALS WITH INTER HEAD ADJUSTMENT AND HAVE PRECEDENCE OVER SECTION 74 OF THE ACT. NOTHING SEEMS TO CONTRARY TO THE LAW . N O LAW IN SUPPORT OF THE CLAIM OF ASSESSEE HAS BEEN P RODUCED BEFORE US, THEREFORE, TAKING INTO ACCOUNT, ALL THE FACTS AND CIRCUMSTANCES, WE ARE OF ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 9 THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ISSUE N O. 11: - 13 . AT THE TIME OF ARGUMENT, THIS ISSUE HAS NO T BEEN PRESSED BY THE ASSESSEE, THEREFORE, THIS ISSUE IS BEING DECIDED IN FAVOUR OF THE REVENUE AGAINST THE ASSESSEE BEING NOT PRESSED. ISSUE NO. 12: - 14 . UNDER THIS ISSUE THE ASSESSEE HAS CHALLENGED TH E TREATMENT OF INTEREST ON TAX REFUND AS INCOME FROM OTHER SOURCES. THE LD. REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE INTEREST RECEIVED ON THE INCOME TAX REFUND IS LIABLE TO BE TREATED AS INCOME FROM BUSINESS OR PROFESSION IN VIEW OF THE LAW SETTL ED IN DONNALD MIRADA (1961) 42 ITR 166 (SC). HOWEVER, ON THE OTHER HAND, THE LD. REPRESENTATIVE OF THE DEPARTMENT HAS REFUTED THE SAID CONTENTION. THE DISPUTE IS IN CONNECTION WITH THE INTEREST INCOME RECEIVED FROM INCOME TAX REFUND. IT IS NOT RELATED TO T HE BUSINESS OF THE ASSESSEE. THE LAW RELIED BY THE LD. REPRESENTATIVE OF THE ASSESSEE SPEAKS SOME OTHER FACTS. THE INCOME RECEIVED AS INTEREST ON INCOME TAX REFUND IS LIABLE TO BE TREATED AS INCOME FROM OTHER SOURCES, THEREFORE, IN THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ACCORDINGLY, WE DECIDE THIS ISSUE IN FAVOUR OF THE REVENUE AGAINST THE ASSESSEE. ISSUE NO. 13: - ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 10 15 . AT THE TIME OF ARGUMENT, THIS ISSUE HAS NOT BEEN PRESSED BY THE ASSESSEE, THEREFORE, THIS ISSUE IS BEING DECIDED IN FAVOUR OF THE REVENUE AGAINST THE ASSESSEE BEING NOT PRESSED. ITA . NO. 4988 /M/20 07 : - 16 . THE REVENUE HAS FILED THE PRESENT APPEAL A GAINST THE ORDER DATED 11.05.2007 PASSED BY THE COMMISS IONER OF INCOME TAX (APPEALS) - 1 , MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 2003 - 04 . 17 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS . : - 1. 'ON THE FACTS AND IN THE CIRCUMST ANCES OF THE CASE AND IN LAW, THE LD. CIT|A) ERRED IN DELETING THE ADDITION MADE U/S 43B OF RS. 10,42,169/ - IN RESPECT OF DELAY IN PAYMENT OF PF AND LABOUR WELFARE FUND.' 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRE D IN DELETING THE DISALLOWANCE MADE ON ACCOUNT OF CAPITAL INVESTMENT SUBSIDY OF RS.27,03,565/ - RECEIVED FROM THE GOVT. OF WEST BENGAL.' 3. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION IN RESP ECT OF CORPORATION TAX PAID AT SAUDI ARABIA OF RS. 2,05,75 , 346/ - .' 4. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A} ERRED IN DELETING THE ADDITION IN RESPECT OF EXPENDITURE ON JUKEHI ROAD AT KYMORE OF RS.39,00,000; - ,' 5. 'ON THE FACTS AND ID THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE SALES TAX SUBSIDY IS NOT TAXABLE IN COMPUTING THE TOTAL INCOME UNDER NORMAL PROVISIONS AS WELL AS IN COMPUTING THE TOTAL INCOME UNDER NORMAL PROVISIONS AS WELL AS IN COMPUTING BOOK PROFIT U/S 115JB OF THE ACT, THEREBY ALLOWING ASSESSEE'S CLAIM OF SALES TAX EXEMPTION OF RS.92,50,44,848/ - ,' 6. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING ASSESSEE'S CLAIM OF LONG TERM ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 11 CAPITAL GAIN IN RESPECT OF SALES OF LAND AT KAZA MINES AND NIMABUR AT KAZA SOUTH,' 7. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE ADDITION MADE IN RESPECT OF PROVISION FOR BAD AND DOUBTF UL DEBTS AT RS.8,64,03,258/ - IN COMPUTATION OF BOOK PROFIT U/S 115JB OF THE I T ACT/' 8. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE IN RESPECT OF PROVISION FOR DIRECTOR'S RETIREMENT BE NEFIT AT RS.46,27,200/ - IN COMPUTATION OF BOOK PROFIT U/S 115JB OF THE ACT.' 9. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE IN RESPECT OF EXPENSES ON VRS PERTAINING TO EARLIER YEARS OF R S.18,69,64 ,996/ - IN COMPUTATION OF BOOK PROFIT U/S 115JB OF THE I T ACT.' 10 - 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE IN RESPECT OF EXPENSES CAPITAL EXPENDITURE DEBITED TO P FIT L ACCOUNT OF RS. 15,02,74,405/ - IN COMPUTATION OF BOOK PROFIT U/S 115JB OF THE I T ACT.' 11 - 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION IN RESPECT OF EXPENDITURE ON JUKEHI ROAT AT KYMORE OF RS. 39,00,000/ - IN COMPUTATION OF BOOK PROFIT U/S 115JB OF THE ACT.' 12. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION IN RESPECT OF DEFERRED REVENUE EXPENDITURES OF EARLIER YEARS AMOUNTING T O RS.2,16,46,865/ - 13. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE IN RESPECT OF REVENUE GENERATED FROM TRIAL RUN PRODUCTION AT RS.15,71,82,196/ - IN COMPUTATION OF BOOK PROFIT U/S 115JB O F THE I T ACT,' 14. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.1,21,47,047/ - IN COMPUTATION OF BOOK PROFIT U/S 115JB OF THE I T ACT.' 15.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION IN RESPECT OF PROVISION FOR WEALTH - TAX AT RS80,00,000/ - IN COMPUTATION OF BOOK PROFIT U/S 115JB OF THE I.T ACT.' 16. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING THE ASSESSES CLAIM OF PROVISION ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 12 FOR ADDITIONAL GRATUITY AMOUNTING TO RS.1,21,90,817/ - IN COMPUTATION OF BOOK PROFIT U/S 115JB OF THE IT ACT,' 17. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW. THE LD CIT(A) ERRED IN ALLOWI NG THE ASSESSEE'S CLAIM OF EXCLUSION OF WRITE BACK OF EXCESS PROVISION MADE IN THE EARLIER YEARS IN COMPUTATION OF BOOK PROFIT U/S 115JB OF THE I T ACT.' 18. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDIT ION MADE ON ACCOUNT OF THE AMOUNT WITHDRAWN FROM SHARE PREMIUM ACCOUNT IN COMPUTATION OF BOOK PROFIT U/S 111JB OF THE I T ACT,' 19. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MAD E IN RESPECT OF PROFIT ON SALE OF FIXED ASSETS OF RS.5,19,20,846/ - IN COMPUTATION OF BOOK PROFIT U/S 115JB OF THE ACT.' 20.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION ON ACCOUNT OF PROVISION FOR CONTINGENCIES OF RS.3,75,00,000/ - IN COMPUTATION OF BOOK PROFIT U/S 115JB OF THE IT ACT.' 21. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE LEVIED U/S 234D OF THE I T ACT.' 22. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING THE ASSESSEE'S CLAIM OF ADDITIONAL GRATUITY AMOUNTING TO RS.1,21,90,817/ - .' 23. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE MADE IN RESPECT OF PROVISION FOR DIRECTOR'S RETIREMENT BENEFIT AT RS.46,27,200/ - .' 24. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW. THE LD. CIT(A) ERRED IN DELETING THE I NTEREST LEVIED U/S 234B OF THE IT ACT,' 18 . THE FACTS OF THE PRESENT CASE ARE THAT QUITE SIMILAR TO THE FACTS OF THE CASE AS NARRATED ABOVE IN ITA. NO.4242 /M/20 07 . HOWEVER, THE FIGURE IS DIFFERENT, THEREFORE, THERE IS NO NEED TO REPEAT THE SAME . ISSUE NO. 1: - 19 . UNDER THIS ISSUE THE REVENUE HAS CHALLEN GED THE DELETION OF ADDITION OF PF AND LABOUR WELFARE FUND MADE U/S 43B OF THE ACT AN AMOUNTING TO ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 13 RS.10,42,169/ - . BEFORE GOING FURTHER, WE DEEMED IT NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RECORD.: - 12. I HAVE CONSIDERED THE FACTS AND SUBMISSIO N MADE ON BEHALF OF THE APPELLANT. IN MY VIEW THE EMPLOYERS CONTRIBUTION TO PROVIDENT FUND AND LABOUR WELFARE FUND IS SQUARELY COVERED BY THE DECISION IN THE CASE OF DEVIDAYAL (SALES) P. LTD. (SUPRA) AND A.P.L. (INDIA) P. LTD. (SUPRA). WITH THE DELETION O F SECOND PROVISO TO SECTION 43B AND AMENDMENT TO THE FIRST PROVISO, AL PAYMENTS MADE BEFORE DUE DATE FOR FILING THE RETURN OF INCOME ARE TO BE ALLOWED. IN THE LIGHT OF THE AFORESAID DECISIONS, AS WELL AS MY OWN ORD E R IN APPEAL NO. CIT(A) - 1/IT/87/04 - 05 AND CIT(A) - I/IT/07/05 - 06 FOR A.Y. 2001 - 02 AND 2002 - 03 RESPECTIVELY, THE DISALLOWANCE MADE BY THE AO IN RESPECT OF EMPLOYERS CONTRIBUTION TO PROVIDENT FUND AND LABOUR WELFARE FUND AGGREGATING TO RS.10,42,169/ - IS DELETED. HENCE THIS GROUND OF APPEAL IS ALLOWED . 20 . ON APPRAISAL OF THE ABOVE MENTIONED FINDING, WE NOTICED THAT THE ASSESSEE HAS PAID ALL THE RELEVANT PAYMENT BEFORE DUE DATE FOR FILING RETURN OF INCOME. THE CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE IN VIEW OF THE DECISION OF HONBLE ITAT IN THE CASE OF TITLED AS JCIT VS. DEVIDAYAL (SALES) PVT. LTD. (2004) 3 SOT 814 (MUM) AND A.P.L (INDIA) P. LTD. VS. DCIT (2005) 97 TTJ 187 (MUM) . FURTHER, WE ALSO NOTICED THAT THE ISSUE HAS BEEN DULY BEEN COVERED BY THE DECISION OF ITAT IN FAVOUR OF THE ASSESSEE I N THE ASSESSEES OWN CASE FOR THE A.Y. 2002 - 03 IN ITA. NO. 4987/M/2009 . I N VIEW OF THE ABOVE MENTIONED DISCUSSION AND CONSIDERING THIS FACT THAT THIS ISSUE HAS BEEN SQUARELY COVERED IN FAVOUR OF THE ASSESSEE IN THE ASSESSEES OWN CASE FOR THE A.Y. 2002 - 03 I N ITA. NO.4987/M/2009 , THEREFORE, IN THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 14 ACCORDINGLY, THIS ISSUE IS BEI NG DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ISSUE NO. 2: - 21 . UNDER T HIS ISSUE THE REVENUE HAS CHALLENGED THE DELETION OF DISALLOWANCE OF CAPITAL INVESTMENT SUBSIDY RECEIVED FROM GOVERNMENT OF WEST BENGAL AMOUNTING OF RS.27,0,565/ - . BEFORE DI SCUSSI NG FURTHER, WE DEEMED IT NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RECORD.: - 13.3 I HAVE CONSIDERED THE SUBMISSION MADE BY THE ARS OF THE APPELLANT AND HAVE CAREFULLY GONE THROUGH THE CASE LAWS CITED HEREIN ABOVE. IN MY CONSIDERED VIEW, THE SUBSIDY SO RECEIVED IS ON CAPITAL ACCOUNT AND IS AN INCENTIVE FOR INDUSTRIALIZATION. THE SAID CONTENTION IS ALSO SUPPORTED BY THE DECISION IN THE CASE OF P.J. CHEMICAL (SUPRA), RELIANCE INDUSTRIES LTD. (SUPRA) AND M/S. AMBUJA CEMENT EASTERN LTD. (SUPRA). F URTHER, SIMILAR ISSUE HAS BEEN ALLOWED IN FAVOUR OF THE APPELLANT BYMY OWN ORDER IN APPEAL NO. CIT(A) - 1/IT/87/04 - 05 FOR AY 2001 - 02 AND IN APPEAL NO. CIT(A) - 1/IT/07/05 - 06 FOR AY 2002 - 03. HENCE THE ADDITION MADE BY THE AO IS DELETED AND THIS GROUND OF APPEAL IS ALLOWED. 22 . ON APPRAISAL OF THE ABOVE MENTIONED FINDING, WE NOTICED THAT THE CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE ON THE BASIS OF THE DECISION IN THE CASE OF CIT VS. PJ CHEMICALS LTD. (1994) 210 ITR 830 (SC) AND DCIT VS. RELIANCE INDUSTRIES L TD. (2004) 88 ITD 273 (MUM). AT THE TIME OF ARGUMENT, THE LD. REPRESENTATIVE OF THE ASSESSEE HAS ALSO PLACED RELIANCE UPON THE DECISION OF CIT VS. SHREE BALAJI ALLOYS (2011) 335 (J&K HIGH COURT) IN WHICH SUCH TYPE OF INCENTIVE HELD AS CAPITAL RECEIPT IN TH E HANDS OF INDUSTRIAL UNIT . N O DOUBT , THE ISSUE HAS BEEN REMANDED IN THE ASSESSEES OWN CASE FOR THE A.Y. 2001 - 02 IN ITA. NO.4562/M/2007 AND A.Y 2002 - 03 IN ITA. NO.4240/M/2007 DATED 29.07.2015, BUT , THERE IS NO ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 15 NEED TO REMAND THE CASE BEING THIS ISSUE HAS BEEN SETTLED. TAKING INTO ACCOUNT OF ALL THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO RELYIN G UPON THE LAW DISCUSSION ABOVE, WE ARE OF THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE I NTERFERE WITH AT THIS APPELLATE STAGE. ISSUE NO. 3: - 23 . UNDER THIS ISSUE THE REVENUE HAS CHALLENGED THE DELETION OF ADDITION IN RESPECT OF CORPORATION TAX PAID AT SAUDI ARABIA IN SUM OF RS.2,05,75,346/ - . THIS ISSUE HAS ALREADY BEEN ADJUDICATED WHILE DECID ING THE APPEAL OF THE ASSESSEE IN ITA. NO. 4242/M/2007, THEREFORE, THE FINDING IN CONNECTION WITH THIS ISSUE IS QUITE APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AS MUTATIS AND MUTANDIS. ACCORDINGLY, THIS ISSUE IS BEING DECIDED IN FAVOUR O F THE ASSESSEE AGAINST THE REVENUE. ISSUE NO. 4: - 24 . UNDER THIS ISSUE THE REVENUE HAS CHALLENGED THE DELETION OF ADDITION IN RESPECT OF EXPENDITURE ON JUKEHI ROAD AT KYMORE IN COMPUTING TOTAL INCOME UNDER NORMAL PROVISION OF THE ACT IN SUM OF RS.39,00,000 / - . THE ASSESSEE CONSTRUCTED THE ROAD AT JUKEHI UPON THE LAND BELONGING TO THE GOVERNMENT OF MADHYA PRADESH. THE ASSESSEE CLAIMED THE EXPENSES IN SUM OF RS.39,00,000/ - . THE CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE ON THE BASIS OF THE DECISION OF HONBL E SUPREME COURT IN THE ASSESSEES OWN CASE FOR THE A.Y. 1994 - 95 TO A.Y. 1998 - 99. THE FOLLOWING FINDING HAS BEEN GIVEN BY CIT(A).: - ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 16 18.3 I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE ARS OF THE APPELLANT. IN MY VIEW THE IMPUGNED EXPENDITURE DID NOT RESULT IN CREATION OF ANY ASSET OF ENDURING NATURE TO THE APPELLANT SINCE THE OWNERSHIP VESTS WITH THE GOVERNMENT OF MADHYA PRADESH. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF HONBLE APEX COURT IN THE CASE OF ASSOCIATED CEMENT COMPANIES LTD. (SUPRA) AND T HE ORDERS OF MY PREDECESSOR FROM A.Y. 1994 - 95 TO AY 1998 - 99 AS WELL AS MY OWN ORDER FOR A.Y. 2001 - 02, THE ADDITION MADE BY AO IS DELETED AND AO IS DIRECTED TO WITHDRAW DEPRECIATION ALLOWED @ 5% IN THE ASSESSMENT ORDER. HENCE THIS GROUND OF APPEAL IS ALLOWE D. 25 . ON APPRAISAL OF THE ABOVE MENTIONED FINDING ,WE FIND THAT THE CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE ON THE BASIS OF HIS OWN DECISION FOR THE A.Y. 1994 - 95 TO 1998 - 99. AT THE TIME OF ARGUMENT, THE LD. REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE ISSUE HAS BEEN COVERED IN FAVOUR OF THE ASSESSEE IN THE ASSESSEES OWN CASE REPORTED IN CIT VS. ASSOCIATED CEMENT COMPANIES LTD. (1988) 172 ITR 257 (SC). THE FACTS ARE NOT DISTINGUISHABLE AT THIS STAGE ALSO. SINCE THE MATTER OF CONTROVERSY HAS DUL Y BEEN COVERED AND DECIDED IN FAVOUR OF THE ASSESSEE IN THE ASSESSEES OWN CASE AND L.H. SUGAR FACTORY AND OIL MILLS (P) LTD. V CIT (1980) 125 ITR 293 (SC), THEREFORE, IN THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ACCORDINGLY, THIS ISSUE IS BEING DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ISSUE NO. 5: - 26 . UNDER THIS ISSUE THE REVENUE HAS CHALLENGED TH E DELETION OF SALES TAX SUBSIDY IN COMPUTATION OF BOOK PROFIT U/S 115JB AS WELL AS IN COMPUTING ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 17 TOTAL INCOME UNDER NORMAL PROVISIONS OF THE ACT. THE REVENUE HAS ALSO RAISED THE ADDITIONAL GROUND NOS. 2 & 3 IN THIS REGARD. THE LD. REPRESENTATIVE OF THE REVE NUE HAS ARGUED THAT THE CLAIM OF THE ASSESSEE HAS WRONGLY BEEN ALLOWED BY THE CIT(A), THEREFORE, THE FINDING OF THE CIT(A) IS NOT LIABLE TO BE SUSTAINABLE IN THE EYES OF LAW AND IS LIABLE TO BE SET ASIDE. HOWEVER, ON THE OTHER HAND, THE LD. REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE ISSUE IN QUESTION HAS DULY BEEN COVERED BY ASSEESSEES OWN CASE IN ITA. NO.1999 - 2000 IN ITA. NO.7594/M/2004, FOR THE A.Y. 1998 - 99 IN ITA. NO.6289/M/2003, FOR THE A.Y. 1996 - 97 IN ITA. NO.3783/M/2000 & FOR THE A.Y. 1997 - 98 IN ITA. NO.3298/M/2001. IT IS ALSO SPECIFICALLY HELD THAT THE ISSUE HAS BEEN COVERED BY THE DECISION OF THE SHREE BALAJI ALLOYS VS. CIT (2011) 333 ITR 335 (J&K HIGH COURT) & CIT VS. SHREE BALAJI ALLOYS (CIVIL APPEAL NO. 10061 OF 2011 (SC), THEREFORE, THE ISSUE IS RIGHTLY BEING DECIDED BY CIT(A) IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. BEFORE GOING FURTHER, WE DEEMED IT NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RECORD.: - 19.9 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE BY THE APPELLANT. IN MY VIEW, SALES TAX SUBSIDY AVAILED BY VARIOUS UNITS OF THE APPELLANT CONSTITUTES CAPITAL RECEIPT IN THE HANDS OF THE APPELLANT. ACCORDINGLY, RESPECTFULLY FOLLOWING THE DECISION IN THE CASE OF RELIANCE INDUSTRIES LTD. (SUPRA) AND FRIGSALES (INDIA) LTD. SUPRA AS WELL AS MY OWN ORDERS FOR A.Y. 2001 - 02 IN APPEAL NO. CIT(A) - I/IT/87/2004 - 05 AND FOR A.Y.2002 - 03 IN APPEAL NO. CIT(A) - I/IT/07/05 - 06 DISALLOWANCE MADE BY THE AO IS DELETED. HENCE, THIS GROUND OF APPEAL IS ALLOWED. 27 . ON APPRAISAL OF THE ABOVE SAID FINDING, WE NOTICED THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY ON THE BASIS OF DECISION IN THE CASE OF DCIT VS. RELIANCE INDUSTRIES LTD. (2004) 88 ITD 273 (MUM) SPECIAL ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 18 BENCH AND ITO VS. FRIGSALES (INDIA) LTD. (2005) 4 SOT 376 (MUM). THE CIT(A) HAS ALSO TOOK THE SUPPORT OF HIS OWN ORDER FOR THE A.Y. 2001 - 02 . F URTHER, THE MATTER OF CONTROVERSY HAS BEEN ADJUDICATED BY THE HONBLE ITAT IN THE ASSESSEES OWN CASE (SUPRA) IN FAVOUR OF ASSESSEE . MOREOVER, IN THE CASE OF SHREE BALAJI ALLOYS VS. CIT (20 11) 333 ITR 335 (J&K HIGH COURT) & CIT VS. SHREE BALAJI ALLOYS (CIVIL APPEAL NO. 10061 OF 2011 (SC) , IT HAS SPECIFICALLY BEEN HELD THAT THE OBJECTIVES OF ALL THE SCHEME SPECIFIES ECONOMIC DEVELOPMENTS , REGIONAL DEVELOPMENT, DEVELOPMENT OF BACKWARD AREA ET C., AND HENCE IT IS CAPITAL RECEIPT AND IS NOT CHARGEABLE TO TAX. ACCORDINGLY, WE ARE OF THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFE RE WITH AT THIS APPELLATE STAGE ALSO. IT ALSO COVERED THE MAT PROVISION. ACCORDINGLY, TAKING INTO ACCOUNT ALL THE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAG E. ACCORDINGLY, THIS ISSUE IS BEING DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE . ISSUE NO. 6: - 28 . UNDER THIS ISSUE THE REVENUE HAS CHALLENGED THE ALLOWANCE OF CLAIM OF LONG TERM CAPITAL GAIN IN RESPECT OF SALES OF LAND AT KAZA MINES AND NIMABUR AT KAZA SOUTH. BEFORE GOING FURTHER, WE DEEMED IT NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RECORD.: - 21.3 I HAVE CONSIDERED THE SUBMISSIONS MADE ON BEHALF OF THE APPELLANT. IN MY VIEW, AS PER PROVISIONS OF SECTION 55(2)(B) OF THE ACT, THE APPELLA NT HAS AN OPTION TO CONSIDER FAIR MARKET VALUE OF ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 19 THE LAND AS ON 1.4.1981 AS THE COST OF ACQUISITION FOR THE PURPOSE OF COMPUTING LONG TERM CAPITAL GAIN. FURTHER, THE APPELLANT IS ALSO ENTITLED TO REDUCE INDEXED COST OF IMPROVEMENT AS PER PROVISIONS OF SEC OND PROVISO TO SECTION 48 OF THE ACT IN COMPUTING LONG TERM CAPITAL GAIN. THUS, IN THE LIGHT OF THE AFORESAID DISCUSSIONS THE AO IS DIRECTED TO RECOMPUTE THE LONG TERM CAPITAL GAIN ON SALE OF LAND BY CONSIDERING THE FAIR MARKET VALUE AS ON 1.4.1981 AS WELL AS THE INDEXED COST OF IMPROVEMENT AS SUBMITTED BY THE APPELLANT AFTER VERIFICATION OF CORRECTNESS OF THE FACTS AS WELL AS THE REGISTERED VALUERS REPORT. HENCE, THESE GROUNDS OF APPEAL ARE ALLOWED. 29 . ON APPRAISAL OF THE ABOVE MENTIONED FINDING, WE NOT ICED THAT THE CIT(A) HAS OBSERVED THAT THE ASSESSEE HAS AN OPTION TO CONSIDER FAIR MARKET VALUE AS ON 01.04.1981 AS THE COST OF ACQUISITION FOR THE PURPOSE OF COMPUTING CAPITAL GAINS AND IN VIEW OF THE PROVISION OF SECTION 55(2)(B) OF THE ACT. THE ASSESSEE WAS ALSO ENTITLED TO REDUCE INDEXED COST OF IMPROVEMENT AS PER PROVISIONS OF SECOND PROVISO TO SECTION 48 OF THE ACT. ACCORDINGLY, THE CIT(A) HAS DIRECTED TO ASSESS THE LONG TERM CAPITAL GAIN IN ACCORDANCE WITH LAW. NO AMBIGUITY SEEMS APPARENT ON RECORD. THE CIT(A) HAS SPECIFICALLY DIRECTED TO APPLY THE PROVISION MENTIONED IN THE ACT. THE FACTS ARE NOT DISTINGUISHABLE AT THIS STAGE ALSO. ON APPRAISAL OF THE ABOVE SAID FINDING, WE ARE OF THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY JUDICIO USLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ACCORDINGLY, THIS ISSUE IS BEING DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE . ISSUE NO. 7: - 30 . UNDER THIS ISSUE THE REVENUE HAS CHALLENGED THE DELETION OF ADDIT ION IN RESPECT OF PROVISION FOR BAD AND DOUBTFUL DEBTS IN COMPUTING B OOK PROFIT ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 20 U/S 115JB OF THE ACT IN SUM OF RS.8,64,03,258/ - . BEFORE GOING FURTHER, WE DEEMED IT NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RECORD.: - 25.3 I FIND CONSIDERABLE MERIT IN THE SUBMISSION MADE BY THE APPELLANT, SICNE PROVISION FOR BAD AND DOUBTFUL DEBT IS DIMINUTION IN THE VALUE OF ASSETS AND NOT LIABILITY. FURTHER, IN MY VIEW ADDITION MADE IN COMPUTING TOTAL INCOME UNDER NORMAL PROVISIONS OF THE ACT IS NOT RELEVANT FOR TH E PURPOSE OF BOOK PROFIT COMPUTATION U/S 115JB. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF SPECIAL BENCH OF KOLKATA TRIBUNAL IN THE CASE OF USHA MARTIN INDUSTRIES LTD. (SUPRA) THE DECISION OF MUMBAI HIGH COURT IN THE CASE OF ECHJAY FORGINGS LTD. (SU PRA) AS WELL AS MY WON ORDER IN APPEAL NO. CIT(A) - I/IT/7/5 - 6 FOR AY 2002 - 03 STATED HEREIN ABOVE THE ADDITION MADE BY THE AO IN COMPUTING BOOK PROFIT U/S 115JB IS DELETED AND THIS GROUND OF APPEAL IS ALLOWED. 31 . ON APPRAISAL OF THE ABOVE SAID FINDING, WE NOTICED THAT THE CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE ON THE BASIS OF DECISION CIT VS. USHA MARTIN INDUSTRIES LTD. (2007) 288 (AT) ITR 63 (KOL) (SB) AND CIT VS. ECHJAY FORGINGS P. LTD. (2001) 251 ITR 15 (BOM). THE ADDITION CAN ONLY BE RAISED IN VIE W OF THE PROVISION U/S 115JB OF THE ACT AND IN EXPLANATION TO SUB SECTION 2. THE CASE OF THE ASSESSEE NOWHERE FALL WITHIN THE AMBIT OF THE SAID SECTION, THEREFORE, IN THE SAID CIRCUMSTANCES, THE CIT(A) HAS RIGHTLY DELETED THE SAID ADDITION , HENCE, ALLOWED THE CLAIM OF THE ASSESSEE. THE FACTS ARE NOT DISTINGUISHABLE AT THIS STAGE ALSO. NO CONTRARY LAW TO THE LAW RELIED BY THE ASSESSEE HAS BEEN PRODUCED BEFORE US. THEREFORE, IN THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ACCORDINGLY, THIS ISSUE IS BEING DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE . ISSUE NO. 8: - ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 21 32 . UNDER THIS ISSUE THE REVENUE HAS CHALLENGED THE DELETION OF ADDITION IN RESPECT OF PROVISION FOR DIRECTORS RETIREMENT BENEFIT IN COMPUTING BOOK PROFIT U/S 115JB OF THE ACT AMOUNTING TO RS.46,27,200/ - . BEFORE GOING FURTHER, WE DEEMED IT NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RECORD.: - 2 6.5 ON CONSIDERATION OF THE SUBMISSION MADE BY THE ARS OF THE APPELLANT, I FIND THAT PROVISION FOR DIRECTORS RETIREMENT BENEFIT CANNOT BE CONSIDERED AS UNASCERTAINED LIABILITY SINCE THE SAME HAS BEEN CALCULATED ON THE BASIS OF ACTUARIAL VALUATION AND IS S QUARELY COVERED BY THE DECISION OF HONBLE APEX COURT IN THE CASE OF BHARAT EARTH MOVERS (SUPRA). THEREFORE, PROVISION FOR DIRECTORS RETIREMENT IS AN ALLOWABLE DEDUCTION IN COMPUTING PROFITS AND GAINS OF BUSINESS OR PROFESSION. FURTHER, IN MY VIEW ADDITIO NS MADE IN COMPUTING BOOK PROFIT U/S 115JB ON THE GROUND THAT THE SAME HAS BEEN ADDED BACK IN THE COMPUTING TOTAL INCOME UNDER NORMAL PROVISIONS OF THE ACT IS NOT TENABLE. THUS, RESPECTFULLY FOLLOWING THE DECISION OF MUMBAI HIGH COURT IN THE CASE OF ECHJAY FORGINGS LTD. (SUPRA) AND THE DECISION OF HONBLE TRIBUNAL IN THE APPELLANT OWN CASE FOR AY 1990 - 91 AS WELL AS MY OWN ORDERS FOR AY 1998 - 99 AND FOR AY 2002 - 03 AS DISCUSSED HEREIN ABOVE THE ADDITION MADE BY THE AO IS DELETED AND THIS GROUND OF APPEAL IS AL LOWED. 33 . SINCE THE CASE OF THE ASSESSEE HAS DULY BEEN COVERED BY THE ASSESSEES OWN CASE FOR THE A.Y. 2002 - 03 IN ITA. NO. 4987/M/2007, FOR THE A.Y. 1990 - 91 IN ITA. NO. 2361/M/1995 , T HEREFORE, IN THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ACCORDINGLY, THIS ISSUE IS BEING DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ISSUE NO. 9: - ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 22 34 . UNDER THIS ISSUE TH E REVENUE HAS CHALLENGED THE DELETION OF ADDITION MADE IN RESPECT OF VRS EXPENDITURE PERTAINING TO EARLIER YEARS IN COMPUTING BOOK PROFIT U/S 115JB OF THE ACT IN SUM OF RS.18,69,64,996/ - . THE RELEVANT FINDING HAS BEEN GIVEN IN CIT(A) IN PARA NO. 27.4. ON A PPRAISAL OF THE ABOVE SAID FINDING, WE ARE OF THE VIEW THAT THE CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE ON THE BASIS OF DECISION OF THE CASE TITLED AS APOLLA TYRES LTD. CIT (2002) 255 ITR 273 (SC). WE ALSO NOTICED THAT THE ISSUE HAS ALREADY BEEN COVER ED IN FAVOUR OF THE ASSESSEE IN THE ASSESSEES OWN CASE FOR THE A.Y. 2002 - 03 IN ITA. NO.4987/M/2007. THE FACTS ARE NOT DISTINGUISHABLE AT THIS STAGE ALSO. TAKING INTO ACCOUNT ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE CIT(A) H AS ALLOWED THE CLAIM OF THE ASSESSEE RIGHTLY , HENCE, THE FINDING OF THE CIT(A) IS NOT LIABLE TO BE DISTURBED AT THIS STAGE. ACCORDINGLY, THIS ISSUE IS BEING DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ISSUE NO. 10: - 35 . UNDER THIS ISSUE THE REVE NUE HAS CHALLENGED THE DELETION OF THE ADDITION MADE IN RESPECT OF CAPITAL EXPENDITURE DEBITED TO P&L ACCOUNT IN COMPUTING BOOK PROFIT U/S 115JB OF THE ACT IN SUM OF RS.15,02,74,405/ - . BEFORE GOING FURTHER, WE DEEMED IT NECESSARY TO ADVERT THE FINDING OF T HE CIT(A) ON RECORD.: - 28.2 I HAVE CONSIDERED THE SUBMISSION MADE ON BEHALF OF THE APPELLANT. IN MY VIEW ADDITIONS MADE IN COMPUTING TOTAL INCOME UNDER NORMAL PROVISIONS OF THE ACT HAS NOTHING TO DO WITH COMPUTATION OF BOOK PROFIT U/S 115JB AND RESPECTFU LLY FOLLOWING THE DECISIONS OF HON BLE APEX COURT IN THE CASE OF APOLLO TYRES LTD. (SUPRA), MAX WELL DYES & CHEMICALS P. LTD. (SUPRA) AS WELL AS MY OWN ORDER FOR AY 1998 - 99 AND 2002 - 03 IN APPEAL NO ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 23 CIT(A) - I/IT/232/4 - 5 AND CIT(A) - I/IT/7/5 - 6 RESPECTIVELY DIS CUSSED HEREIN ABOVE AND FOR THE REASONS STATED THEREIN THE ADDITION MADE BY THE AO IS DELETED. HENCE THE GROUND OF APPEAL IS ALLOWED. 36 . ON APPRAISAL OF THE ABOVE SAID FINDING, WE NOTICED THAT THE CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE ON THE BASIS OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF APOLLO TYRES LTD. VS. CIT (2002) 255 ITR 273 (SC). MOREOVER, WE ALSO NOTICED THAT THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE HONBLE ITAT IN THE ASSESSEES OWN CASE FOR THE A.Y.2 002 - 03 IN ITA. NO.4987/M/2007. NO DISTINGUISHABLE MATERIAL HAS BEEN PLACED ON RECORD. SINCE THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE IN THE ASSESSEES OWN CASE FOR THE A.Y. 2002 - 03 (SUPRA) , THEREFORE , WE ARE OF THE VIEW THAT THE CIT(A) HAS DEC IDED THE MATTER OF CONTROVERSY JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ACCORDINGLY, THIS ISSUE IS BEING DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE . ISSUE NO. 11: - 37 . UNDER THIS ISSUE THE REVEN UE HAS CHALLENGED THE DELETION OF ADDITION IN RESPECT OF EXPENDITURE ON JUKEHI ROAD AT KYMORE IN COMPUTING BOOK PROFIT U/S 115JB OF THE ACT IN SUM OF RS. 39,00,000/ - . THIS ISSUE HAS BEEN CHALLENGED BY REVENUE WHICH HAS ALREADY BEEN ADJUDICATED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE WHILE DECIDING THE ISSUE NO. 4 ABOVE. THE FINDING OF THE ISSUE NO. 4 IS APPLICABLE IN THIS ISSUE AS MUTATIS AND MUTANDIS. IN THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY J UDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 24 INTERFERE WITH AT THIS APPELLATE STAGE. ACCORDINGLY, THIS ISSUE IS BEING DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ISSUE NO. 12 - 38 . UNDER THIS ISSUE THE REVENUE HAS CHALLENGED THE DELETION IN RESPECT OF DEFERRED REVENUE EXPENDITURE OF EARLIER YEARS IN COMPUTING BOOK PROFIT U/S 115JB OF THE ACT IN SUM OF RS. 2,16,46,865/ - . BEFORE GOING FURTHER, WE DEEMED IT NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RECORD.: - 30.3 I HAVE CONSIDERED THE S UBMISSION MADE BY THE ARS OF THE APPELLANT. IN MY VIEW ADDITIONS MADE IN COMPUTING TOTAL INCOME UNDER NORMAL PROVISIONS OF THE ACT HAS NOTHING TO DO WITH COMPUTATION OF BOOK PROFIT U/S 115JB WHICH IS A SELF - CONTAINED CODE AND IT IS SUBJECT TO ONLY THOSE AD JUSTMENTS WHICH ARE SPECIFIED IN THE EXPLANATION TO SECTION 115JB(2). HENCE, RESPECTFULLY FOLLOWING THE PRINCIPLES LAID DOWN BY THE HONBLE A PEX COURT IN THE CASE OF APOLLO TYRES LTD. (SUPRA) AS WELL AS OTHER DECISIONS CITED HERE - IN - ABOVE, THE ADDITION MAD E BY THE AO IS DELETED AND THIS GROUND OF APPEAL IS ALLOWED. 39 . ON APPRAISAL OF THE ABOVE SAID FINDING, WE NOTICED THAT THE CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE ON THE BASIS OF THE DECISION OF APEX COURT IN THE CASE OF APOLLO TYRES LTD. VS. CIT ( 2002) 255 ITR 273 (SC). IT IS SPECIFICALLY HELD THAT THE COMPUTATION OF INCOME UNDER THE NORMAL PROVISION OF THE ACT HAS NOTHI NG TO DO WITH COMPUTATION OF BOOK PROFIT U/S 115JB OF THE ACT IN WHICH SPECIFICALLY ADJUSTMENT HAS BEEN GIVEN IN EXPLANATION TO SE CTION 115JB(2) OF THE ACT. NO DOUBT, THE ADDITION WHICH NOWHERE FALL WITHIN THE PROVISION OF SECTION 115JB OF THE ACT AND EXPLANATION (2) OF THE ACT IS NOT REQUIRED TO BE ADDED TO THE INCOME OF ASSESSEE , THEREFORE, IN THE SAID CIRCUMSTANCES, THE SAME IS N OT REQUIRED TO BE ADDED WHILE COMPUTING THE BOOK PROFIT U/S 115JB OF THE ACT. SINCE THE ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 25 MATTER OF CONTROVERSY HAS BEEN ADJUDICATED BY THE CIT(A) JUDICIOUSLY AND CORRECTLY, THEREFORE, THE FINDING OF THE CIT(A) IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPE LLATE STAGE. ACCORDINGLY, THIS ISSUE IS BEING DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ISSUE NO. 13: - 40 . UNDER THIS ISSUE THE REVENUE HAS CHALLENGED THE DELETION OF ADDITION MADE IN RESPECT OF REVENUE GENERATED FROM TRIAL RUN PRODUCTION IN C OMPUTING OF BOOK PROFIT U/S 115JB OF THE ACT IN SUM OF RS.15,71,82,196/ - . BEFORE GOING FURTHER, WE DEEMED IT NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RECORD.: - 31.5 I HAVE CONSIDERED THE SUBMISSION MADE ON BEHALF OF THE APPELLANT AND FIND THAT TH E TREATMENT IN THE ACCOUNTS, IN RESPECT OF REVENUE GENERATED DURING CONSTRUCTION PERIOD, IS IN ACCORDANCE WITH THE GUIDANCE NOTE ON EXPENDITURE INCURRED DURING THE CONSTRUCTION PERIOD WHICH IS ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANT OF INDIA, WHI CH IS AN AUTHORITATIVE BODY IN THE MATTER OF LAYING DOWN THE ACCOUNTING STANDARD. THAT BEING SO ADDITION MADE BY THE AO ON THE GROUND THAT THE SAME HAS BEEN ADDED BACK IN COMPUTING INCOME UNDER NORMAL PROVISIONS OF THE ACT AND THE SAID AMOUNT SHOULD HAVE B EEN CREDITED IN THE PROFIT AND LOSS ACCOUNT IS NEITHER JUSTIFIED NOR TENABLE IN VIEW OF THE DECISION OF APEX COURT IN THE CASE OF CIT V BIPIN CHANDRA MAGAN LAL (1961 41 ITR 290 SC) WHEREIN IT HAS BEEN HELD THAT THERE IS A DISTINGUISHABLE RELATIONSHIP BETWE EN THE ASSESSABLE INCOME AND THE PROFITS OF BUSINESS CONCERN IN A COMMERCIAL SENSE. HENCE, THIS GROUND OF APPEAL IS ALLOWED. 41 . ON APPRAISAL OF THE ABOVE SAID FINDING, WE NOTICED THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY ON THE BASIS OF DECIS ION IN THE CASE OF CIT VS. BIPIN CHANDRA MAGAN LAL (1961) 41 ITR 290 (SC). MOREOVER, WE ALSO NOTICED THAT THIS ISSUE HAS BEEN COVERED IN FAVOUR OF THE ASSESSEE IN ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 26 THE ASSESSEES OWN CASE FOR THE A.Y. 2002 - 03 IN ITA. NO.7987/M/2007. BY HONORING THE ORDER PA SSED BY THE HONBLE ITAT IN THE ASSESSEES OWN CASE (SUPRA) , WE ARE OF THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ACCORDINGLY, THIS ISSUE IS BEI NG DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ISSUE NO. 14: - 42 . UNDER THIS ISSUE THE REVENUE HAS CHALLENGED THE DELETION OF ADDITION OF RS.1,21,47,047/ - IN COMPUTATION OF BOOK PROFIT U/S 115JB OF THE ACT. BEFORE GOING FURTHER, WE DEEMED IT NEC ESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RECORD.: - 32.4 I HAVE CONSIDERED THE SUBMISSION MADE ON BEHALF OF THE APPELLANT 1 FIND THAT, FOREIGN EXCHANGE GAIN OF RS.37,07,480/ - AND CAPITAL SUBSIDY RECEIVED TOWARDS PURCHASE OF ASSETS OF RS.1,13,605/ - HA VE ALREADY BEEN ADJUSTED AGAINST THE COST OF THE FIXED ASSETS IN TERMS OF THE PROVISION OF SECTION 43A AND EXPLANATION 10 TO SECTION 43(1) RESPECTIVELY. THUS THE SAME CANNOT BE ADDED BACK IN COMPUTING BOOK PROFIT. FURTHER, STATE CAPITAL INVESTMENT SUBSIDY RECEIVED FROM WBIDC OF RS.26,90,000/ - CONSTITUTE CAPITAL RECEIPT IN THE HANDS OF THE APPELLANT AND HENCE NOT TAXABLE, AS DECIDED IN GROUND NO. 7(A) HERE - IN - ABOVE AND THUS CANNOT BE ADDED BACK IN COMPUTING BOOK PROFIT U/S 115JB. AS REGARDS, REFUND OF SALES TAX OF RS.54,88,396/ - IS CONCERNED, AS DISCUSSED IN GROUND NO, 8(A) & 8(B) HERE - IN - ABOVE, THE SAID AMOUNT NEEDS TO BE ADDED BACK TO THE PROFIT AND LOSS ACCOUNT AND AT THE SAME TIME A CORRESPONDING DEDUCTION FOR EQUIVALENT AMOUNT HAS TO BE GRANTED SINCE THE SAID REFUND HAS BEEN ADJUSTED AGAINST SALES TAX DEMAND FOR THE PERIOD 01 - 04 - 1994 TO 31 - 03 - 1995 AS REGARDS, INTEREST RECEIVED ON DEPOSIT WITH ARV SOCIETY AND MSEB OF RS.85,479/ - AND RS.5,250/ - RESPECTIVELY, IS CONCERNED, SINCE THE SAID RECEIPT CONSTITUTE I NCOME IN THE HANDS OF THE APPELLANT, THE ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 27 SAME NEEDS TO BE ADDED BACK IN COMPUTING BOOK PROFIT U/S 115JB, THUS, THE GROUND OF APPEAL IS PARTLY ALLOWED. 43 . ON APPRAISAL OF THE ABOVE SAID FINDING, WE NOTICED THAT THE CIT(A) HAS CATEGORIZED THE CLAIM WHICH N OWHERE FALL UNDER THE PROVISION U/S 115JB OF THE ACT. THE FOREIGN EXCHANGE GAIN OF RS.37,07,480/ - AND CAPITAL SUBSIDY RECEIVED TOWARDS PURCHASE OF ASSETS OF RS.1,13,605/ - HAVE BEEN ADJUSTED AGAINST THE COST OF THE FIXED ASSETS IN VIEW OF THE PROVISIONS OF SECTION 43A AND EXPLANATION 10 TO SECTION 43(1) RESPECTIVELY . THEREFORE, THE SAME CANNOT BE ADDED BACK IN COMPUTING THE BOOK PROFIT. FURTHER, STATE CAPITAL INVESTMENT SUBSIDY RECEIVED FROM WBIDC OF RS.26,90,000/ - CONSTITUTE CAPITAL RECEIPT IN THE HANDS OF THE APPELLANT, HENCE, NO N TAXABLE AS DISCUSSED WHILE DECIDING THE ISSUE ABOVE. HENCE, THE SAME IS NOT ADDED BACK IN COMPUTING BOOK PROFIT U/S 115JB OF THE ACT. SO FAR AS THE REFUND OF SALES TAX OF RS.54,88,396/ - IS CONCERNED , THE SAME HAS BEEN ADDED TO THE PROFIT AND LOSS ACCOUNT AND ACCORDINGLY, THE DEDUCTION WAS GIVEN. THE INTEREST INCOME IN SUM OF RS.85,479/ - IN CONNECTION WITH DEPOSIT WITH ARV SOCIETY AND IN SUM OF RS.54,88,396/ - DEPOSITED WITH MSEB HAS BEEN DISALLOWED BEING INCOME OF THE ASSESSEE. THE CLAIM OF THE ASSESSEE WAS PARTLY ALLOWED. THE FACTS ARE NOT DISTINGUISHABLE AT THIS STAGE ALSO, THEREFORE, IT IS QUITE CLEAR THAT THE FINDING OF THE CIT(A) IS QUITE JUSTIFIABLE WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ACCORDINGLY, WE AFFIRMED THE FINDING OF THE CIT(A) ON THIS ISSUE AND DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ISSUE NO. 15: - ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 28 44 . ISSUE NO. 15 IS IN CONNECTION WITH THE DELETION OF ADDITION IN RESPECT OF PROVISION OF WEALTH TAX IN COMPUTING BOOK PROFIT U/S 115JB OF THE ACT IN SUM OF RS.80,00,000/ - . BEFORE GOING FURTHER, WE DEEMED IT NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RECORD.: - 37.3 I HAVE CONSIDERED THE SUBMISSIONS MADE ON BEHALF OF THE APPELLANT. RESPECTFULLY FOLLOWING THE DECISIO N OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF ECHJYAY FORGINGS LTD. (SUPRA) AND THE HONBLE SPECIAL BENCH OF KOLKATA TRIBUNAL IN THE CASE OF USHA MARTIN INDUSTRIES LTD. (SUPRA) AS WELL AS MY OWN ORDER IN APPEAL NO. CIT(A) - I/IT/232/04 - 05 FOR AY 1998 - 99 STATED HEREIN ABOVE, THE ADDITION MADE BY THE AO IS DELETED AND THIS GROUND OF APPEAL IS ALLOWED. 45 . ON APPRAISAL OF THE SAID FINDING, WE NOTICED THAT THE CLAIM OF THE ASSESSEE HAS BEEN ALLOWED IN VIEW OF THE DECISION OF BOMBAY HIGH COURT IN THE CASE OF CIT VS. ECHJAY FORGINGS (P) LTD. (2001) 251 ITR 15 (BOM) AND JCIT VS. USHA MARTIN INDUSTRIES LTD. (2007) 104 ITD 249 (KOLKATA TRIBUNAL) SB. WE ALSO NOTICED THAT THE MATTER OF CONTROVERSY HAS BEEN ADJUDICATED BY CIT(A) FOR THE A.Y. 1998 - 99 ALSO AND AGAINST THE SAID DECISION , THE REVENUE IS NOT IN APPEAL. IT IS REITERATED THAT THE ADJUSTMENT CAN ONLY BE MADE IN VIEW OF SECTION 115JB OF THE ACT WHICH HAS BEEN SPECIFIED IN EXPLANATION TO SECTION 115JB OF THE ACT. IN VIEW OF THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ACCORDINGLY, THIS ISSUE IS BEING DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ISSUE NO. 16: - ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 29 4 6 . UNDER THIS ISSUE THE REVENUE HAS CHALLENGED THE ALLOWANCE OF CLAIM OF PROVISION FOR ADDITIONAL GRATUITY IN COMPUTING BOOK PROFIT U/S 115JB OF THE ACT AMOUNTING TO RS.1,21,90,817/ - . THE PROPOSITION IS THE SAME WHICH HAS BEEN DISCUSSED ABOVE WHILE DECIDIN G THE ISSUE NO. 15. THE FINDING OF THE CIT(A) IN THIS REGARD IS HEREBY REPRODUCED AS UNDER.: - 38.2 I HAVE CONSIDERED THE SUBMISSION MADE ON BEHALF OF THE APPELLANT. RESPECTFULLY FOLLOWING THE ORDER OF HONBLE TRIBUNAL FOR THE A.Y. 1990 - 91 AS WELL AS MY O WN ORDERS FOR AY 1998 - 99 IN APPEAL NO. CIT(A) - I/IT/232/04 - 05 THE ADDITION MADE BY THE AO IS DELETED AND THE GROUND STANDS ALLOWED IN FAVOUR OF THE APPELLANT. 47 . ON APPRAISAL OF THE SAID FINDING, WE NOTICED THAT THIS ISSUE HAS BEEN COVERED BY DECISION OF HONBLE ITAT IN THE ASSESEES OWN CASE FOR THE A.Y. 1990 - 91 IN ITA. NO.2361/M/1995 & IN THE A.Y. 2002 - 03 IN ITA. NO.4987/M/2007 . T HERE IS NOTHING ON RECORD TO WHICH IT CAN BE ASSUMED THAT THE ORDER HAS BEEN VARIED OR CHANGED IN APPELLATE PROCEEDING. SINCE THIS ISSUE HAS BEEN DULY ADJUDICATED IN FAVOUR OF THE ASSESSEE BY ABOVE MENTIONED DECISION OF THE HONBLE ITAT, WE ARE OF THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERE WITH AT T HIS APPELLATE STAGE. ACCORDINGLY, THIS ISSUE IS BEING DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE . ISSUE NO. 17: - 48 . UNDER THIS ISSUE THE REVENUE HAS CHALLENGED THE ALLOWANCE OF CLAIM OF EXCLUSION OF WRITE BACK OF EXCESS PROVISION MADE IN EARLIE R YEARS IN COMPUTING BOOK PROFIT U/S 115JB OF THE ACT. BEFORE GOING FURTHER, WE DEEMED IT NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RECORD.: - ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 30 39.3 I HAVE CONSIDERED THE FACTS AND SUBMISSION MADE ON BEHALF OF THE APPELLANT AND FIND THAT MINERAL RIG HT TAX AND CESS ON COAL AND LIMESTONE WRITTEN BACK IN THE ASSESSMENT YEAR WAS CREATED PRIOR TO 1.4.1997 AND HENCE FALLS UNDER THE PROVISION OF CLAUSE (I) OF EXPLANATION OF SECTION 115JB(20. HOWEVER, IN RESPECT OF WRITE BACK OF PROVISION FOR EMPLOYEES INCE NTIVE, THE APPELLANT COULD NOT SATISFY THE PROVISIONS OF PROVISO TO CLAUSE (I) OF EXPLANATION TO SECTION 115JB(2) AND HENCE CANNOT BE DEDUCTED IN COMPUTING BOOK PROFIT U/S 115JB(2). IN THE LIGHT OF THE AFORESAID FINDING, MINERAL RIGHT TAX AND CESS ON COAL LIMESTONE WRITTEN BACK IS ALLOW3ED AS DEDUCTION AND THE ADDITION MADE BY THE AO TO THE EXTENT OF RS.46 LACS IS CONFIRMED. HENCE THIS GROUND OF APPEAL IS PARTLY ALLOWED. 49 . ON APPRAISAL OF THE ABOVE SAID FINDING, WE NOTICED THAT THE MINERAL RIGHT TAX AND CES S ON COAL AND LIMESTONE WRITTEN BACK IN THE ASSESSMENT YEAR WAS CREATED PRIOR TO 01.04.1997, THEREFORE, FALLS UNDER THE PROVISION OF CLAUSE (I) OF EXPLANATION TO SECTION 115JB(2) OF THE ACT. SO FAR AS THE PROVISION FOR EMPLOYEES INCENTIVE IS CONCERNED , THE SAME IS NOT REQUIRED TO BE DEDUCTED IN COMPUTING BOOK PROFIT U/S 115JB(2) OF THE ACT. ACCORDINGLY, THE DEDUCTION WAS PARTLY ALLOWED. THE CIT(A) HAS ALSO RELIED UPON THE CASE CITED AS HITKARI FIBRES LTD. VS. JCIT (2004) 90 ITD 654 (MUM) . THE FACTS ARE N OT DISTINGUISHABLE AT THIS STAGE ALSO. WE NOWHERE FOUND ANY IRREGULARITY AND INFIRMITY IN THE ORDER, WE UPHOLD THE FINDING OF THE CIT(A) ON THIS ISSUE AND DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ISSUE NO. 18: - 50 . UNDER THIS ISSUE THE REVENUE HAS CHALLENGED THE DELETION OF ADDITION MADE IN RESPECT OF AMOUNT WITHDRAWN FROM SHARE PREMIUM ACCOUNT IN COMPUTATION OF BOOK PROFIT U/S 115JB OF THE ACT. BEFORE GOING FURTHER, WE DEEMED IT NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RECO RD.: - ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 31 40.3 I HAVE CONSIDERED THE SUBMISSIONS MADE ON BEHALF OF THE APPELLANT. IN MY VIEW WRITE BACK OF SHARE PREMIUM ACCOUNT IS AN ALLOWABLE DEDUCTION IN VIEW OF CLAUSE (I) OF EXPLANATION TO SECTION 115JB(2). THEREFORE, RESPECTFULLY FOLLOWING THE DECISIO N OF THE HONBLE ITAT FOR A.Y. 1990 - 91 AS WELL AS THE ORDERS OF MY PREDECESSOR FOR A.Y. 1997 - 98 AND A.Y. 1998 - 99 THE ADDITION MADE BY THE AO OF RS.76,63,200/ - IS DELETED. HENCE THIS GROUND OF APPEAL IS ALLOWED. 51 . ON APPRAISAL OF THE ABOVE SAID FINDING, WE NOTICED THAT THE CLAIM OF THE REVENUE IS IN CONNECTION WITH THE DELETION OF ADDITION MADE IN RESPECT OF AMOUNT WITHDRAWN FROM SHARE PREMIUM ACCOUNT IN COMPUTATION OF BOOK PROFIT U/S 115JB OF THE ACT . THE CLAIM WAS ALLOWED IN VIEW OF THE DECISION OF HON BLE ITAT MUMBAI IN THE ASSESSEES OWN CASE FOR THE A.Y. 1990 - 91 IN ITA. NO.2361/M/1995 . F URTHER THE MATTER HAS BEEN ADJUDICATED BY HONBLE ITAT IN THE ASSESSEES OWN CASE FOR THE A.Y. 1998 - 99 IN ITA. NO.6320/M/2003. SINCE THE CASE OF THE ASSESSEE HAS SQUAR ELY COVERED BY DECISION OF THE HONBLE ITAT IN THE ASSESSEES OWN CASE, THEREFORE, WE ARE OF THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ACCORDIN GLY, THIS ISSUE IS BEING DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ISSUE NO. 19: - 52 . UNDER THIS ISSUE THE REVENUE HAS CHALLENGED THE DELETION OF THE ADDITION OF PROFIT ON SALE OF FIXED ASSETS IN COMPUTATION OF BOOK PROFIT U/S 115JB OF THE ACT IN SUM OF RS.5,19,20,846/ - . AT THE TIME OF ARGUMENT, THE LD. REPRESENTATIVE OF THE ASSESSEE HAS DISCLOSED THIS FACT THAT THIS ISSUE HAS BEEN DECIDED AGAINST THE ASSESSEE IN THE ASSESSEES OWN CASE FOR THE ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 32 A.Y.2002 - 03 IN ITA. NO.4241/M/2007 DATED 29.07.20 15. SINCE THIS ISSUE HAS BEEN DECIDED AGAINST THE ASSESSEE IN THE ASSESSEES OWN CASE (SUPRA ),THEREFORE, T HE FINDING OF THE CIT(A) ON THIS ISSUE IS HEREBY ORDERED TO BE SET ASIDE AND WE ALLOWED THE CLAIM OF THE REVENUE FOR THE ADDITION OF SAID AMOUNT WHILE COMPUTING THE BOOK PROFIT U/S 115JB OF THE ACT. ACCORDINGLY, THIS ISSUE IS DECIDED IN FAVOUR OF THE REVENUE AGAINST THE ASSESSEE. ISSUE NO. 20: - 53 . UNDER THIS ISSUE THE REVENUE HAS CHALLENGED THE ALLOWANCE OF THE CLAIM IN CONNECTION WITH THE PROVISION FO R CONTINGENCIES IN COMPUTATION OF BOOK PROFIT U/S 115JB OF THE AC IN SUM OF RS.3,75,00,000/ - . W HILE ARGUING THE CASE THE LD. REPRESENTATIVE OF THE ASSESSEE HAS ADMITTED THAT THIS FACT THAT THIS ISSUE HAS BEEN COVERED AGAINST THE ASSESSEE DUE TO INSERTION O F CLAUSE (I) TO EXPLANATION 1 TO SECTION 115JB VIDE FINANCE NO. 2 ACT, 2009 W. .E.F 01.04.2001 AND ALSO IN ACCORDANCE WITH LAW SETTLED IN THE ASSESSEES OWN CASE IN ITA. NO.4241/M/2007 DATED 29.07.2015 . ACCORDINGLY, WE SET ASIDE THE FINDING OF THE CIT(A) O N THIS ISSUE AND RESTORED THE ISSUE BEFORE THE AO TO DECIDE THE ISSUE AFRESH BY GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH LAW . ACCORDINGLY, WE DECIDE THIS ISSUE IN FAVOUR OF THE REVENUE AGAINST THE ASSESSEE. ISSUE NO. 21: - 5 4 . ISSUE NO. 21 IS IN CONNECTION WITH THE INTEREST LEVIED U/S 234D OF THE ACT WHICH IS CONSEQUENT IN NATURE AND NOWHERE REQUIRED FOR ANY SPECIFIC DIRECTION . ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 33 ISSUE NO. 22: - 55 . UNDER THIS ISSUE THE REVENUE HAS CHALLENGED THE ALLOWANCE OF CLAIM ADDITIONAL G RATUITY ON PROVISION AL BASIS UNDER NORMAL PROVISIONS IN SUM OF RS. 1,21,90,817/ - . BEFORE GOING FURTHER, WE DEEMED IT NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RECORD.: - 52.3 I HAVE CONSIDERED THE SUBMISSION MADE ON BEHALF OF THE APPELLANT. RESPECT FULLY, FOLLOWING THE DECISION OF HONBLE TRIBUNAL IN THE APPELLANTS OWN CASE IN A.Y. 1990 - 91 IN ITA. NO. 2361/M/1995 VIDE ORDER DATED 18.1.2007 AS WELL AS MY OWN ORDER FOR A.Y. 2001 - 02 AND A.Y. 2002 - 03 IN APPEAL NO. CIT(A) - I/IT/87/2004 - 05 AND CIT(A) - I/IT/0 7/2005 - 06, RESPECTIVELY, DISCUSSED HERE IN ABOVE, THIS GROUND OF APPEAL IS ALLOWED. 56 . ON APPRAISAL OF THE ABOVE SAID FINDING, WE NOTICED THAT THE CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE IN VIEW OF THE FINDING OF THE HONBLE ITAT IN THE ASSESSEES O WN CASE FOR THE A.Y.2002 - 3 IN ITA. NO.2361/M/1995 DATED 18.01.2007. SINCE THIS ISSUE HAS SQUARELY BEEN COVERED BY THE DECISION OF THE HONBLE ITAT IN THE ASSESSEES OWN CASE (SUPRA), THEREFORE, WE ARE OF THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ACCORDINGLY, THIS ISSUE IS BEING DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ISSUE NO. 23 : - 57 . UNDER THIS ISSUE THE REVENUE HAS CHALLENGED T HE DELETION OF ADDITION IN RESPECT OF PROVISION FOR DIRECTORS RETIREMENT BENEFIT IN COMPUTING INCOME UNDER NORMAL PROVISIONS OF THE ACT IN SUM OF RS. 46,27,200/ - . ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 34 BEFORE GOING FURTHER, WE DEEMED IT NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RECORD.: - 53.1 THIS GROUND OF APPEAL IS SIMILAR TO GROUND NO. 17 DISCUSSED HERE IN ABOVE EXCEPT THAT THIS GROUND IS IN RELATION TO COMPUTATION OF TOTAL INCOME UNDER THE PROVISIONS OF ACT OTHER THAN SECTION 115JB. FACTS BEING SIMILAR, I FOLLOW THE DECISION RENDERED ABOVE ON GROUND NO. 17 AND HENCE THIS GROUND OF APPEAL IS ALLOWED. 58 . THE CIT(A) HAS DECIDED THIS ISSUE ON THE BASIS OF DECISION ON THE ISSUE NO. 17 IN HIS APPEAL. THE FINDING OF THE CIT(A) HAS GIVEN IN PARA NO. 26.5 WHICH IS HEREBY REPRODUCED AS UNDER. : - 26.5 ON CONSIDERATION OF THE SUBMISSION MADE BY THE ARS OF THE APPELLANT, I FIND THAT PROVISION FOR DIRECTORS RETIREMENT BENEFIT CANNOT BE CONSIDERED AS UNASCERTAINED LIABILITY SINCE THE SAME HAS BEEN CALCULATED ON THE BASIS OF ACTUARIAL VALUATION AN D IS SQUARELY COVERED BY THE DECISION OF HONBLE APEX COURT IN THE CASE OF BHARAT EARTH MOVERS (SUPRA). THEREFORE, PROVISION FOR DIRECTORS RETIREMENT IS AN ALLOWABLE DEDUCTION IN COMPUTING PROFITS AND GAINS OF BUSINESS OR PROFESSION. FURTHER, IN MY VIEW A DDITIONS MADE IN COMPUTING BOOK PROFIT U/S 115JB ON THE GROUND THAT THE SAME HAS BEEN ADDED BACK IN THE COMPUTING TOTAL INCOME UNDER NORMAL PROVISIONS OF THE ACT IS NOT TENABLE. THUS RESPECTFULLY FOLLOWING THE DECISION OF MUMBAI HIGH COURT IN THE CASE OF E CHJAY FORGINGS LTD AND THE DECISION OF HONBLE TRIBUNAL IN THE APPELLANTS OWN CASE FOR A.Y. 1990 - 91 AS WELL AS MY OWN ORDERS FOR A.Y. 1998 - 99 AND FOR A.Y. 2002 - 03 AS DISCUSSED HERE - IN - ABOVE, THE ADDITION MADE BY THE AO IS DELETED AND THIS GROUND OF APPEAL IS ALLOWED. 59 . ON APPRAISAL OF THE ABOVE SAID FINDING , WE FIND THAT CIT(A) HAS DECIDED THE ISSUE ON THE BASIS OF THE DECISION OF THE CASE TITLED AS BHARAT EARTH MOVERS AND ECHJAY FORGINGS P. LTD. (SUPRA). FURTHERMORE, WE NOTICED THAT THE ISSUE HAS BEE N SQUARELY COVERED BY ASSESSEES OWN CASE IN ITA. NO.4987/M/2007 .THE RELEVANT FINDING HAS BEEN GIVEN IN PARA NO. 19 WHICH IS HEREBY REPRODUCED AS UNDER.: - ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 35 19.DELETION OF ADDITION IN RESPECT OF PROVISION FOR DIRECTOR'S RETIREMENT BENEFIT IN COMPUTING IN COME UNDER NORMAL PROVISIONS OF THE ACT OF RS.2,84,53,850/ IS THE SUBJECT MATTER OF THE NEXT GROUND.DURING THE ASSESSMENT PROCEEDINGS,THE AO FOUND THAT THE ASSESSEE HAD CREATED PROVISION FOR DIRECTOR'S RETIREMENT BENEFIT ON THE BASIS OF ACTUARIAL VALUATIO N AND IT WAS ADDED IN COMPUTING TOTAL INCOME.SUBSEQUENTLY,EXCLUSION WAS CLAIMED BEFORE THE FAA. AS THE SIMILAR ADDITION WAS DELETED IN MAT COMPUTATION,SO,HE ALLOWED THE CLAIM MADE BY THE ASSESSEE. 19.1.BEFORE US,THE DR ARGUED THAT THE FAA ALLOWED THE CLAIM THAT WAS NOT BEFORE THE AO. THE DR CONTENDED THAT PROVISION MADE FOR DIRECTOR'S RETIREMENT BENEFIT WAS MADE ON THE BASIS OF ACTUARIAL VALUATION,THAT IT REPRESENTED A LIABILITY IN PRAESENTI THAT WAS TO BE DISCHARGED AT FUTURE DATE.HE REFERRED TO THE CASE O F BHARAT EARTH MOVERS(245ITR428).HE ALSO STATED THAT SIMILAR CLAIM WAS ALLOWED BY THE TRIBUNAL WHILE DECIDING THE APPEAL FOR THE AY.1990 - 91. 19.2.WE FIND THAT THE ISSUE OF A CERTAIN BUSINESS LIABILITY WAS DELIBERATED UPON AND ADJUDICATED BY THE HONBLE APE X COURT IN THE CASE OF BHARAT EARTH MOVERS AND IT WAS HELD THAT IF A BUSINESS LIABILITY HAD DEFINITELY ARISEN IN THE ACCOUNTING YEAR AND WAS CAPABLE OF BEING ESTIMATED WITH REASONABLE CERTAINTY, THE DEDUCTION SHOULD BE ALLOWED ALTHOUGH THE LIABILITY MAY HA VE TO BE QUANTIFIED AND DISCHARGED AT A FUTURE DATE. FOLLOWING THE PRINCIPLE LAID DOWN BY THE APEX COURT IN THE ABOVE CASE AND THE DECISION OF THE TRIBUNAL DELIVERED FOR THE AY.1990 - 91,WE DECIDE GROUND NO.18 AGAINST THE AO. 60 . IN VIEW OF THE SAID FINDING , WE ARE OF THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. SINCE , THE ISSUE HAS DULY BEEN COVERED BY ASSESSEES OWN CASE FOR THE A.Y. 2002 - 03 IN ITA . NO. 4987/M/2007, THEREFORE, IN THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ACCORDINGLY, THIS ISSUE IS BEING D ECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ISSUE NO. 24: - ITA. NO.4242 / M /20 07 & 4988/ M/20 07 A.Y. 2003 - 04 36 61 . ISSUE NO. 24 IS IN CONNECTION WITH THE INTEREST LEVIED U/S 234B OF THE ACT, WHICH IS CONSEQUENT IN NATURE WHICH NOWHERE REQUIRED FOR ANY ADJUDICATION. 62 . IN THE RESULT, APPEAL FILED BY THE REVENUE AND THE APPEAL FILED BY THE ASSESSEE IS HEREBY ORDERED TO BE PARTLY ALLOWED . ORDER PRONOUNCE D IN THE OPEN COURT ON 13.03 .201 9 . SD/ - SD/ - ( G. S. PANNU ) (AMARJIT SINGH) VICE PRESIDENT JUDICIAL MEMBER MUMBA I DATED : 13.03. 201 9 VIJAY / CO PY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI