Orient Paper & Industries Limited, Kolkata V. J.C.I.T Range - 6,kolkata, Kolkata

ITA 430/KOL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4676 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 14-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 01-03-2013
• Court: TRIBUNAL
• Department Lawyers: NIRAJ KUMAR CIT LD
• Assessee Lawyers: ASIM CHAUDHURY LD
• Keywords: Depreciation; Opportunity of being heard; Rule of consistency; Retrospective amendment; Capital receipt
• Section: 143(3); 14A; 201(1); 139

Judgement Text

1 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, K OLKATA BEFORE : SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A NOS. 430/KOL/2013 A.Y. 2009-10 ORIENT PAPER & INDUSTRIES LIMITED VS. THE J.C.I .T, PAN: AAACO3279J RANGE-6, KOLKATA (APPELLANT) (RESPON DENT) I.T.A NOS. 648/KOL/2013 A.Y. 2009-10 D.C.I.T, CIR-6, VS ORIENT PAPER & I NDUSTRIES LIMITED KOLKATA PAN: AAACO3279J (APPELLANT) (RESPO NDENT) FOR ASSESSEE : SHRI ASIM CHAUDHURY, LD.AR FOR REVENUE : SHRI NIRAJ KUMAR, CIT, LD.SR.DR DATE OF HEARING: 14-06-2016 DATE OF PRONOUNCEMENT: 10 -08-20 16 ORDER SHRI S.S. VISWANETHRA RAVI, JM BOTH THESE APPEALS IN I.T.A NOS. 430/KOL/2013 BY THE ASSESSEE AND I.T.A NOS. 648/KOL/2013 BY THE REVENUE ARE DIRECTED AGAINST COMMON ORDER DT : 18-12-2012 PASSED BY THE CIT(A)- VI, KOLKATA FOR THE ASSESSMEN T YEAR 2009-10. 2 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED 2. SINCE THE IMPUGNED ORDER OF THE CIT-A IN CHALLE NGING BEFORE US IS COMMON, BOTH THE APPEALS, THEREFORE, HEARD TOGETHER WITH THE CON SENT OF THE BOTH PARTIES AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE. 3. FIRST WE TAKE UP THE APPEAL IN I.T.A NOS. 430/KOL/2013 BY THE ASSESSEE AND RAISED GROUND NO-1 AS HEREUNDER: 1. (A) THE COMMISSIONER OF INCOME TAX (APPEAL) (C IT(A) ERRED ON THE FACTS OF THE CASE AND IN LAW IN CONFIRMING A LLOCATION OF INTEREST OF RS.2,71,644/- MADE BY THE ASSESSING OFFICER (AO) AGAINST EXEMPT DIVIDEND INCOME UNDER SECTION 14A OF THE INCOME- TA X ACT (ACT) READ WITH RULE 8D OF THE INCOME -TAX RULES (RULES) (B) THE CIT-(A) ERRED ON THE FACTS OF THE CASE AND IN LAW IN CONFIRMING ALLOCATION OF INTEREST RELATED TO/INCURR ED FOR/ ATTRIBUTABLE TO BUSINESS AS EXPENSES INCURRED IN RELATION TO DIV IDEND INCOME. 4. THE LEARNED AR SUBMITS THAT THE GROUND NO-1 AS R AISED ABOVE IS COVERED BY THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2 008 2009 PASSED BY THE A BENCH OF KOLKATA IN ITA 170/KOL/2012 AND PLACED ON RECORD COPY OF SUCH ORDER. THE LEARNED DR RELIED ON THE ORDER OF AO. 5. HEARD THE RIVAL SUBMISSIONS AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE COPY OF ORDER AS SUBMITTED BY THE LEARNED AR GO ES TO SHOW THAT THE A BENCH OF KOLKATA IN ITA 170/KOL/2012 DECIDED SIMILAR ISS UE RAISED BY THE ASSESSEE IN THE APPEAL THEREIN TAKING INTO CONSIDERATION THE DECISI ON RENDERED IN THE CASE OF HINDUSTAN MOTORS LIMITED, THE RELEVANT PORTION OF W HICH IS REPRODUCED HEREIN BELOW: 3 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED 2. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES A ND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS SUBMITTED BY THE LD. REPRESENTATIVES OF BOTH THE SI DES, A SIMILAR ISSUE AS INVOLVED IN GROUND NO. 1 RELATING TO THE TRANSACTIONS ON ACCOUNT OF INTEREST UNDER SECTION 1 4A READ WITH RULE 8D OF THE INCOME TAX RULES WAS ALSO INVOL VED IN THE CASE OF HINDUSTAN MOTORS LIMITED IN THE IDENTICAL F ACTS AND CIRCUMSTANCES AND THE SAME HAS ALREADY BEEN DECIDED BY THIS TRIBUNAL VIDE ITS ORDER DATED 20.11.2015 PASSED IN ITA NO. 171/KOL/2012. A COPY OF THE SAID ORDER IS ALSO PLAC ED ON RECORD BEFORE US AND PERUSAL OF THE SAME SHOWS THAT A SIMILAR ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE VIDE PARAGRAPH NOS. 10 & 11 OF ITS ORDER, WHICH READ AS UNDER:- 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON REC ORD. IT IS OBSERVED THAT THE INVESTMENT IN SHARES ON WHI CH THE EXEMPT DIVIDEND INCOME IS EARNED BY THE ASSESSE E DURING THE YEAR UNDER CONSIDERATION WAS ACTUALLY MA DE IN THE EARLIER YEARS AND IN THE ASSESSMENT COMPLETE D FOR ASSESSMENT YEAR 2006-07 UNDER SECTION 143(3), NO DISALLOWANCE ON ACCOUNT OF INTEREST WAS MADE BY THE ASSESSING OFFICER UNDER SECTION 14A AFTER RECORDING A FINDING THAT THE BORROWED FUNDS WERE ENTIRELY UTILI ZED BY THE ASSESSEE FOR THE PURPOSE OF BUSINESS AND THE SAME WERE NOT USED FOR MAKING ANY INVESTMENT IN SHARES. EVEN IN THE ASSESSMENT COMPLETED FOR A.Y. 2007-08 UNDER SECTION 143(3), NO DISALLOWANCE UNDER SECTION 14A ON ACCOUNT OF INTEREST WAS MADE BY THE ASSESSING OFFICER THEREBY ACCEPTING THAT THE INVEST MENT IN SHARES WAS MADE BY THE ASSESSEE OUT OF ITS OWN F UNDS AND THERE WAS NO UTILIZATION OF INTEREST BEARING BORROWED FUNDS FOR MAKING SUCH INVESTMENT. AS POINT ED OUT BY THE LD. COUNSEL FOR THE ASSESESE FROM THE RELEVANT DOCUMENTARY EVIDENCE, THE INVESTMENT MADE IN SHARES BY THE ASSESSEE-COMPANY IN THE EARLIER YEARS HAS CONTINUED SUBSTANTIALLY IN THE YEAR UNDER CONSIDERA TION AND THERE BEING NO FRESH INVESTMENT MADE BY THE ASSESSEE IN SHARES, IT FOLLOWS THAT INVESTMENT IN S HARES 4 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED IS ENTIRELY MADE BY THE ASSESSEE OUT OF ITS OWN FUN DS AND THERE WAS NO UTILIZATION OF BORROWED FUNDS FOR MAKING SUCH INVESTMENT AS FOUND BY THE ASSESSING OFFICER HIMSELF WHILE COMPLETING THE ASSESSMENTS FO R THE EARLIER YEARS. IN THIS REGARD, LD. D.R. HAS CON TENDED THAT RULE 8D HAVING BEEN MADE APPLICABLE FOR THE YE AR UNDER CONSIDERATION FOR THE FIRST TIME, THE ISSUE H AS TO BE LOOKED INTO FROM DIFFERENT ANGLE AND THE VIEW TA KEN BY THE ASSESSING OFFICER IN THE EARLIER YEARS HAS N O RELEVANCE. WE ARE UNABLE TO ACCEPT THIS CONTENTION OF THE LD. D.R. ONCE IT IS FOUND THAT THE INVESTMENT I N SHARES IS MADE BY THE ASSESSEE OUT OF ITS OWN FUNDS AND THERE IS NO UTILIZATION OF BORROWED FUNDS FOR MAKIN G SUCH INVESTMENT, WE ARE OF THE VIEW THAT NO DISALLOWANCE ON ACCOUNT OF INTEREST UNDER SECTION 1 4A CAN BE MADE EVEN BY APPLYING RULE 8D AS THE SAID RU LE 8D WILL HAVE APPLICATION ONLY IN SUCH CASES WHERE T HERE IS ANY NEXUS BETWEEN THE INTEREST BEARING BORROWED FUNDS AND INVESTMENT MADE IN SHARES. EVEN A PERUSAL OF THE BALANCE-SHEET OF THE ASSESSEE-COMPANY AS ON 31.03.2008 SHOWS THAT SUFFICIENT OWN FUNDS TO THE E XTENT OF ABOUT RS.132 CRORES WERE AVAILABLE WITH THE ASSESSEE-COMPANY AT THE RELEVANT TIME AND THE SAME BEING MORE THAN THE INVESTMENT OF ABOUT RS.72 CRORE S MADE IN SHARES, WE ARE OF THE VIEW THAT THERE WAS N O CASE FOR MAKING DISALLOWANCE ON ACCOUNT OF INTEREST UNDER SECTION 14A EVEN BY APPLYING RULE 8D AS THE ASSESSEE HAD SUFFICIENT OWN FUND TO MAKE INVESTMENT IN SHARES AND THE INTEREST BEARING BORROWED FUNDS WERE NOT UTILIZED FOR MAKING SUCH INVESTMENT. 11. IT IS ALSO OBSERVED THAT IN THE COMPUTATION OF TOTAL INCOME, DISALLOWANCE OF RS.2,47,79,104/- WAS OFFERE D BY THE ASSESSEE UNDER SECTION 14A IN RELATION TO TH E EXPENDITURE INCURRED IN RELATION TO EARNING OF EXEM PT INCOME AND THERE WAS NO REASON GIVEN BY THE ASSESSI NG OFFICER, HAVING REGARD TO THE ACCOUNTS OF THE ASSES SEE, TO SHOW HIS DISSATISFACTION WITH THE CORRECTNESS OF QUANTUM OF EXPENDITURE DISALLOWED BY THE ASSESSEE 5 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED UNDER SECTION 14A. IN THE CASE OF REI AGRO LIMITED (SUPRA) CITED BY THE LD. COUNSEL FOR THE ASSESSEE, IT WAS HELD BY THE COORDINATE BENCH OF THIS TRIBUNAL THAT WHERE THE ASSESSEE MAKES A CLAIM THAT ONLY A PARTIC ULAR AMOUNT IS TO BE DISALLOWED UNDER SECTION 14A AND IF THE ASSESSING OFFICER PROPOSES TO INVOKE SECTION 14A, H E HAS TO RECORD THE SATISFACTION AS TO HOW THE CLAIM OF THE ASSESSEE IS NOT CORRECT HAVING REGARD TO THE ACCOUN TS OF THE ASSESSEE. IT WAS HELD THAT IF THERE IS NO SUCH SATISFACTION RECORDED BY THE ASSESSING OFFICER, NO DISALLOWANCE COULD BE MADE BY HIM BY INVOKING THE PROVISIONS OF SECTION 14A. KEEPING IN VIEW THIS DEC ISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CAS E OF REI AGRO LIMITED, WHICH HAS BEEN AFFIRMED BY THE HONBLE CALCUTTA HIGH COURT, WE HOLD THAT IN THE ABSENCE OF REQUISITE SATISFACTION RECORDED BY THE ASSESSING OFFICER SHOWING HOW THE DISALLOWANCE OFFE RED BY THE ASSESSEE UNDER SECTION 14A WAS NOT CORRECT HAVING REGARD TO ITS BOOKS OF ACCOUNT, IT WAS NOT PERMISSIBLE TO THE ASSESSING OFFICER IN LAW TO INVO KE SECTION 14A AND MAKE A FURTHER DISALLOWANCE. AS SUC H, CONSIDERING ALL THE FACTS OF THE CASE, WE ARE OF TH E VIEW THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) UNDER SECTION 14A READ WITH RULE 8D IS NOT SUSTAINABLE EITHER IN LAW OR ON THE FACTS OF THE CASE AND DELETING THE SAME, WE ALLOW GROUND NO. 1 OF THE ASSESSEES APPEAL. AS THE ISSUE INVOLVED IN THE PRESENT CASE AS WELL A S ALL THE MATERIAL FACTS RELEVANT THERETO ARE ADMITTEDLY SIMI LAR TO THE CASE OF M/S. HINDUSTAN MOTORS LIMITED (SUPRA), WE F OLLOW THE DECISION RENDERED IN THE SAID CASE AND DELETE THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONF IRMED BY THE LD. CIT(APPEALS) UNDER SECTION 14A OF THE ACT R EAD WITH RULE 8D. GROUND NO. 1 IS ACCORDINGLY ALLOWED. 6 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED 6. HEARD RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE ISSUE ON HAND IS COVERED BY THE ORDER OF K OLKATA TRIBUNAL SUPRA AND FOLLOWING THE SAME, WE CONFIRM THE ORDER OF CIT-A A ND DELETE THE DISALLOWANCE MADE BY THE AO, ACCORDINGLY GROUND NO-1 IS ALLOWED. 7. GROUND NO- 2 RAISED BY THE ASSESSEE IS AS REPRO DUCED AS BELOW: 2. THE CIT(A) ERRED ON THE FACTS OF THE CASE AND IN LAW IN DISALLOWING UNDER SECTION 40 (A)(IA) OF THE ACT, TH E SUM OF RS.14,61,956/- BEING THE INSTALLMENT OF LEASE PA YMENT IN RESPECT OF ASSET TAKEN ON LEASE. ON PROPER APPRECIATION OF THE FACTS OF THE CASE AND CORRECT CONSTRUCTION OF LAW, THE CIT(A) SHOULD NOT HAVE HEL D THAT TAX IS DEDUCTIBLE AT SOURCE UNDER SECTION 194I OF THE ACT FROM INSTALLMENTS AND SHOULD HAVE ALLOWED RS.14,61,956 BEING THE INSTALLMENT OF LEASE PAYMENT . 8. THE BRIEF FACTS INVOLVING GROUND NO-2, THE AO FO UND THAT THE ASSESSEE DEBITING AN AMOUNT OF RS.14,61,956/- UNDER THE HEAD LESS ITEM NO-6 AND PAID SUCH AMOUNT TO XL SOFTECK SYSTEMS LIMITED IN HYDERABAD, ACCORDING TO ASSESSING OFFICER THE ASSESSEE REPLIED THAT NO TDS WAS DEDUCT ED FROM SAID LEASE PAYMENT AND THE AO FOR NOT DEDUCTING TDS UNDER SECTION 194I OF THE ACT AND ADDED SUCH AMOUNT FOR VIOLATION OF SECTION 40(A)(IA) OF THE AC T. THE ASSESSEE CONTENDED THAT THE IMPUGNED ADDITION WAS THE PAYMENT TOWARDS COST OF COMPUTERS WHICH WAS MADE IN INSTALLMENTS AS PER FINANCE LEASE AGREEMENT AND WHICH WAS ALSO NOT DEBITED TO THE PROFIT AND LOSS ACCOUNT AND NO TDS I S DEDUCTIBLE ON PAYMENTS WHICH WERE TOWARDS COST OF COMPUTERS BEFORE THE CIT-A. AF TER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE THE CIT-A OPINED AS UND ER:- 7 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED 18. I HAVE CAREFULLY CONSIDERED THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AND SUBMISSIONS OF THE APPELLANT. THE APPELLANT HAS CLAIMED THE EXPENDITURE AS LEASE RENT IN THE COMPUTATION WHEREAS IN THE BOOKS OF ACCOUNTS THE S AME HAS BEEN TREATED AS REPAYMENTS OF INSTALMENT. THE APPELLANT HAS CLAIMED TDS IS NOT DEDUCTIBLE ON REPAYMENT OF INSTALMENT IN A FINANCE LEASE. THE ASSESSEE HAS CLAIMED THAT THE AMOUNT OF SUCH INSTA LMENT WAS NOT DEBITED TO P&L A/C. HOWEVER, THE ASSESSEES CLAIM IS NOT TENABLE AS THE APPELLANT ITSELF HAS CLAIMED THE INSTALMENT REP AYMENTS AS ALLOWABLE LEASE RENTAL EXPENSES. ONCE THE EXPENSE IS CLAIMED AS ALLOWABLE LEASE RENT THEN SECTION 194I GETS TRIGGER ED OFF AND TAX IS DEDUCTIBLE THEREON. SINCE THE APPELLANT HAS NOT DED UCTED TAX AT SOURCE ON SUCH EXPENSES DURING THE YEAR, THE SAME A RE NOT ALLOWABLE U/S. 40A(IA) BUT WILL BE ALLOWED IN THE YEAR IN WHI CH TDS IS DEPOSITED THEREON. THE APPELLANT HAS DEPOSITED THE TDS ON 13. 03.2012 AND HAS MADE A PRAYER THAT THE SAID AMOUNT SHOULD BE ALLOWE D IN ASSESSMENT YEAR 2012-13. I DIRECT THAT THE ASSESSING OFFICER S HOULD ALLOW THE AMOUNT OF RS.14,61,956/- AFTER DUE VERIFICATION DUR ING THE ASSESSMENT PROCEEDINGS OF THE RELEVANT YEAR IN WHIC H THE DEPOSIT OF TDS THEREON WAS DONE. THIS GROUND IS PARTLY ALLOWED . 9. THE LEARNED AR SUBMITS THAT THE IMPUGNED ADDITIO N MAY BE CONSIDERED IN VIEW OF THE 2 ND PROVISO TO SECTION 40(A)(IA) OF THE ACT AND THE L EARNED DR RELIED ON REFERRING TO PARAGRAPH-18 OF ORDER OF CIT-A AND SUB MITS THAT FINDING OF CIT-A IS BASED ON RECORD. 10. HEARD RIVAL SUBMISSIONS AND PERUSED THE RELEVAN T MATERIAL ON RECORD. THE HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT-1 VS. ANSAL LAND MARK TOWNSHIP( P) LTD WHILE DEALING WITH THE CASE ON HAND, HAD AN OCCASION TO R EAD DOWN THE DECISION OF AGRA BENCH OF TRIBUNAL IN ITA 337/AGRA/2013 AS IT W AS RELIED ON, AND HELD AND AGREED WITH THE VIEW OF AGRA BENCH OF TRIBUNAL REASONING AND CONCLUSION TO THE INSERTION OF SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT BY T HE LEGISLATURE. THE RELEVANT PORTION FROM PARAS 11 TO 14 ARE REPRODUCED HERE IN BELOW: 8 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED 11. THE FIRST PROVISO TO SECTION 210 (1) OF THE ACT HAS BEEN INSERTED TO BENEFIT THE ASSESSEE. IT ALSO STATES THAT WHERE A P ERSON FAILS TO DEDUCT TAX AT SOURCE ON THE SUM PAID TO A RESIDENT OR ON THE S UM CREDITED TO THE ACCOUNT OF A RESIDENT SUCH PERSON SHALL NOT BE DEEM ED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF SUCH TAX IF SUCH RESIDENT HAS FURNIS HED HIS RETURN OF INCOME UNDER SECTION 139 OF THE ACT . NO DOUBT, THERE IS A MANDATORY REQUIREMENT UNDER SECTION 201 TO DEDUCT TAX AT SOUR CE UNDER CERTAIN CONTINGENCIES, BUT THE INTENTION OF THE LEGISLATURE IS NOT TO TREAT THE ASSESSEE AS A PERSON IN DEFAULT SUBJECT TO THE FULF ILLMENT OF THE CONDITIONS AS STIPULATED IN THE FIRST PROVISO TO SECTION 201(1 ) . THE INSERTION OF THE SECOND PROVISO TO SECTION 40(A) (IA) ALSO REQUIRES TO BE VIEWED IN THE SAME MANNER. THIS AGAIN IS A PROVISO INTENDED TO BE NEFIT THE ASSESSEE . THE EFFECT OF THE LEGAL FICTION CREATED THEREBY IS TO TREAT THE ASSESSEE AS A PERSON NOT IN DEFAULT OF DEDUCTING TAX AT SOURCE UN DER CERTAIN CONTINGENCIES. 12. RELEVANT TO THE CASE IN HAND, WHAT IS COMMON TO BOTH THE PROVISOS TO SECTION 40 (A) (IA) AND SECTION 210 (1) OF THE ACT IS THAT THE AS LONG AS THE PAYEE/RESIDENT (WHICH IN THIS CASE IS ALIP) HAS FIL ED ITS RETURN OF INCOME DISCLOSING THE PAYMENT RECEIVED BY AND IN WHICH THE INCOME EARNED BY IT IS EMBEDDED AND HAS ALSO PAID TAX ON SUCH INCOME, T HE ASSESSEE WOULD NOT BE TREATED AS A PERSON IN DEFAULT. AS FAR AS TH E PRESENT CASE IS CONCERNED, IT IS NOT DISPUTED BY THE REVENUE THAT T HE PAYEE HAS FILED RETURNS AND OFFERED THE SUM RECEIVED TO TAX. 13. TURNING TO THE DECISION OF THE AGRA BENCH OF IT A T IN RAJIV KUMAR AGARWAL V. A CIT (SUPRA ) , THE COURT FINDS THAT IT HAS UNDERTAKEN A THOROUGH ANALYSIS OF THE SECOND PROVISO TO SECTION 40 (A)(IA) OF THE ACT AND ALSO SOUGHT TO EXPLAIN THE RATIONALE BEHIND ITS INSERTION. IN PARTICULAR, THE COURT WOULD LIKE TO REFER TO PARA 9 OF THE SAID ORDER WHICH READS AS UNDER: 'ON A CONCEPTUAL NOTE, PRIMARY JUSTIFICATION FOR SU CH A DISALLOWANCE IS THAT SUCH A DENIAL OF DEDUCTION IS TO COMPENSATE FO R THE LOSS OF REVENUE BY CORRESPONDING INCOME NOT BEING TAKEN INTO ACCOUNT I N COMPUTATION OF TAXABLE INCOME IN THE HANDS OF THE RECIPIENTS OF TH E PAYMENTS. SUCH A POLICY MOTIVATED DEDUCTION RESTRICTIONS SHOULD, THE REFORE, NOT COME INTO 9 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED PLAY WHEN AN ASSESSEE IS ABLE TO ESTABLISH THAT THE RE IS NO ACTUAL LOSS OF REVENUE. THIS DISALLOWANCE DOES DEINCENTIVIZE NOT D EDUCTING TAX AT SOURCE, WHEN SUCH TAX DEDUCTIONS ARE DUE, BUT, SO F AR AS THE LEGAL FRAMEWORK IS CONCERNED, THIS PROVISION IS NOT FOR T HE PURPOSE OF PENALIZING FOR THE TAX DEDUCTION AT SOURCE LAPSES. THERE ARE SEPARATE PENAL PROVISIONS TO THAT EFFECT. DEINCENTIVIZING A LAPSE AND PUNISHING A LAPSE ARE TWO DIFFERENT THINGS AND HAVE DISTINCTLY DIFFERENT, AND SOMETIMES MUTUALLY EXCLUSIVE, CONNOTATIONS. WHEN WE APPRECIAT E THE OBJECT OF SCHEME OF SECTION 40(A)(IA), AS ON THE STATUTE, AND TO EXAMINE WHETHER OR NOT, ON A 'FAIR, JUST AND EQUITABLE' INTERPRETATION OF LAW- AS IS THE GUIDANCE FROM HON'BLE DELHI HIGH COURT ON INTERPRET ATION OF THIS LEGAL PROVISION, IN OUR HUMBLE UNDERSTANDING, IT COULD NO T BE AN 'INTENDED CONSEQUENCE' TO DISALLOW THE EXPENDITURE, DUE TO NO N DEDUCTION OF TAX AT SOURCE, EVEN IN .A SITUATION IN WHICH CORRESPONDING INCOME IS BROUGHT TO TAX IN THE HANDS OF THE RECIPIENT. THE SCHEME OF SE CTION 40(A)(IA), AS WE SEE IT, IS AIMED AT ENSURING THAT AN EXPENDITURE SH OULD NOT BE ALLOWED AS DEDUCTION IN THE HANDS OF AN ASSESSEE IN A SITUATIO N IN WHICH INCOME EMBEDDED IN SUCH EXPENDITURE HAS REMAINED UNTAXED DUE TO TAX WITHHOLDING LAPSES BY THE ASSESSEE. IT IS NOT, IN O UR CONSIDERED VIEW, A PENALTY FOR TAX WITHHOLDING LAPSE BUT IT IS A SORT OF COMPENSATORY DEDUCTION RESTRICTION FOR AN INCOME GOING UNTAXED D UE TO TAX WITHHOLDING LAPSE. THE PENALTY FOR TAX WITHHOLDING LAPSE PER SE IS SEPARATELY PROVIDED FOR IN SECTION 271 C, AND, SECTION 40(A)(IA) DOES N OT ADD TO THE SAME. THE PROVISIONS OF SECTION 40 A)(IA1 AS THEY' EXISTED PR IOR TO INSERTION OF SECOND PROVISO THERETO, WENT MUCH BEYOND THE OBVIOUS INTEN TIONS OF THE LAWMAKERS AND CREATED UNDUE HARDSHIPS EVEN IN CASES IN WHICH THE ASSESSEE'S TAX WITHHOLDING LAPSES DID NOT RESULT IN ANY LOSS TO THE EXCHEQUER. NOW THAT THE LEGISLATURE HAS BEEN COMPAS SIONATE ENOUGH TO CURE THESE SHORTCOMINGS OF PROVISION, AND THUS OBVI ATE THE UNINTENDED HARDSHIPS, SUCH AN AMENDMENT IN LAW, IN VIEW OF THE WELL SETTLED LEGAL POSITION TO THE EFFECT THAT A CURATIVE AMENDMENT TO AVOID UNINTENDED CONSEQUENCES IS TO BE TREATED IN NATURE EVEN THOUG H IT MAY NOT STATE SO SPECIFICALLY, THE INSERTION OF SECOND PROVISO MUST BE GIVEN RETROSPECTIVE EFFECT FROM THE POINT OF TIME WHEN THE RELATED LEG AL PROVISION WAS INTRODUCED. IN VIEW OF THESE DISCUSSIONS, AS ALSO F OR THE DETAILED REASONS SET OUT EARLIER, WE CANNOT SUBSCRIBE TO THE VIEW TH AT IT COULD HAVE BEEN AN 'INTENDED CONSEQUENCE' TO PUNISH THE ASSESSEES FOR NON DEDUCTION OF TAX AT SOURCE BY DECLINING THE DEDUCTION IN RESPECT OF RELATED PAYMENTS, EVEN WHEN THE CORRESPONDING INCOME IS DULY BROUGHT TO TA X. THAT WILL BE GOING 10 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED MUCH BEYOND THE OBVIOUS INTENTION OF THE SECTION. A CCORDINGLY, WE HOLD THAT THE INSERTION OF SECOND PROVISO TO SECTION 40( A)(IA) IS DECLARATORY AND CURATIVE IN NATURE AND IT HAS RETROSPECTIVE EFFECT FROM 1ST APRIL, 2005, BEING THE DATE FROM WHICH SUB CLAUSE (IA) OF SECTIO N 40(A) WAS INSERTED BY THE FINANCE (NO. 2) ACT, 2004.' 14. THE COURT IS OF THE VIEW THAT THE ABOVE REASONI NG OF THE AGRA BENCH OF IT AT AS REGARDS THE RATIONALE BEHIND THE INSERTIO N OF THE SECOND PROVISO TO SECTION 40(A) (IA) OF THE ACT AND ITS CONCLUSION THAT THE SAID PROVISO IS DECLARATORY AND CURATIVE AND HAS RETROSPECTIVE EFFE CT FROM 1 ST APRIL 2005, MERITS ACCEPTANCE. 11. THE HONBLE HIGH COURT SUPRA FOUND THAT THERE IS A MANDATORY REQUIREMENT U/S. 201 TO DEDUCT AT SOURCE, BUT, HOWEVER, OPINED, THE ASSESSEE CANNOT BE VIEWED AS A PERSON IN DEFAULT IN VIEW OF THE FIRST PROVISO TO SECTION 201(1) OF THE ACT AND FURTHER THAT THE INSERTION OF SECOND PROVISO TO SECTION 40 (A)(IA) OF THE ACT WAS INTENDED TO BENEFIT THE ASSESSEE AND IT SHALL BE VIEWED AS I N THE SAME MANNER AS THAT OF FIRST PROVISO TO SECTION 201(1) OF THE ACT. 12. IN THE PRESENT CASE, THE CASE OF THE ASSESSEE W AS THAT THE SAID PAYMENT TO XL SOFTECH SYSTEMS LIMITED ON ACCOUNT OF REPAYMENT OF COST OF COMPUTERS AND NOT DEBITED TO THE P/L ACCOUNT AND DID NOT DEDUCT THE T AX U/SEC 194I OF THE ACT ON SUCH EXPENSES DURING THE YEAR UNDER CONSIDERATION. THE C IT-A HAS GIVEN A CATEGORICAL FINDING THAT THE ASSESSE HAS DEPOSITED TDS ON SUCH PAYMENTS ON 13-03-12 AND DIRECTED THE AO TO VERIFY THE SAME AND ALLOW THE SAME IN A.Y 2012-13. THESE FACTS ARE NOT DISPUTED BY THE BOTH THE PARTIES AS IT CAN BE SEEN FROM THE RECORD. THEREFORE, KEEPING IN VIEW OF THE PRINCIPLE ENUNCIATED BY THE HONBLE HIG H COURT OF DELHI SUPRA, WE ARE OF THE VIEW THAT THE ASSESSEE CANNOT BE TREATED AS A D EFAULTER IN VIEW OF THE FIRST PROVISO TO SECTION 201(1) R/W SECOND PROVISO TO SECTION 40( A)(IA) OF THE ACT IF THE CONCERNED 11 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED PAYEE HAS TAKEN INTO ACCOUNT THE RELEVANT SUM FOR COMPUTING INCOME IN HIS RETURN OF INCOME FURNISHED U/S. 139 AND HAS PAID TAX DUE ON T HE INCOME DECLARED IN SUCH RETURN FOR THE YEAR UNDER CONSIDERATION. WE, THEREFORE, S ET ASIDE THE IMPUGNED ORDER OF LD. CIT(A) IN CONFIRMING THE DISALLOWANCE MADE BY THE AO U/S. 40(A)(IA) AND RESTORE THE MATTER TO THE FILE OF THE AO FOR DECIDING THE SAME AFRESH IN THE LIGHT OF FIRST PROVISO TO SECTION 201(1) R/W SECOND PROVISO TO SECTION 40(A)( IA) WHICH ARE HELD TO BE APPLICABLE TO THE YEAR UNDER CONSIDERATION BEING RETROSPECTIVE IN EFFECT. IF THE DISALLOWANCE U/S. 40(A)(IA) IS FOUND TO BE NOT SUSTAINABLE BY THE AO IN THE YEAR UNDER CONSIDERATION. THE QUESTION OF ALLOWING DEDUCTION FOR A.Y 2012-13 AS DIRECTED BY CIT-A WOULD NOT ARISE. GROUND NO. 2 RAISED BY THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. 13. THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS THAT AN AMOUNT OF RS.767 CRORES TOWARDS CERTIFIED EMISSION IS A CAPITAL RECEIPT AND NOT LIABLE FOR TAX. THE ASSESSEE SUBMITS THAT THE SAID AMOUNT HAS BEEN ACCOUNTED AS OTHER INCOME IN THE ANNUAL REPORT FOR F.Y 2008 2009 AND RELIED ON THE ORDER IN ASSE SSEES OWN CASE IN ITA 170/KOL/ 12 PASSED BY THE A BENCH OF KOLKATA TRIBUNAL. 14. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIA L ON RECORD. A PERUSAL OF THE ORDER OF THE TRIBUNAL ABOVE WHEREIN THE BENCH OBSER VED THAT A COORDINATE BENCH WHILE DEALING THE CASE IN THE CASE OF ULTRA TECH CE MENT LTD ALLOWED THE ADDITIONAL GROUND RAISED BY IT BEFORE THE TRIBUNAL FOR THE FIR ST TIME CLAIMING RECEIPT OF CARBON CREDIT AS CAPITAL RECEIPT BY TAKING SUPPORT FROM T HE DECISION OF HONOURABLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO LTD VS CIT REPORTED IN 229 ITR 383, THE RELEVANT PORTION IS REPRODUCED HEREIN BELOW: 12 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED 5. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFO RE THE TRIBUNAL, THE ASSESSEE HAS RAISED THE FOLLOWING GRO UND AS ADDITIONAL GROUND WITH AN APPLICATION SEEKING ADMIS SION THEREOF:- FOR THAT THE SUM OF RS.10.36 CRORES REALIZED ON SA LE OF 1,07,353 UNITS OF CERS ARE CAPITAL RECEIPT NOT LIAB LE TO TAX AND THE SAME SUM BE DELETED FROM THE ASSESSED INCOME. 6. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES ON THE APPLICATION OF THE ASSESSEE FOR ADMISSION OF THE AB OVE ADDITIONAL GROUND. THE LD. COUNSEL FOR THE ASSESSEE HAS CONTEN DED THAT ALTHOUGH THE AMOUNT IN QUESTION RECEIVED AS COMPENS ATION BY THE ASSESSEE BY WAY OF CARBON CREDIT IN RESPECT OF ITS CEMENT DIVISION WAS OFFERED TO TAX IN THE RETURN OF INCOME AND THE ISSUE RELATING TO ITS EXEMPTION BEING CAPITAL RECEIPT WAS NOT RAISED EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE L D. CIT(APPEALS), THE SAME IS BEING RAISED BEFORE THE T RIBUNAL FOR THE FIRST TIME BY WAY OF AN ADDITIONAL GROUND ON TH E BASIS OF VARIOUS JUDICIAL PRONOUNCEMENTS COMING TO THE NOTIC E OF THE ASSESSEE AFTERWARDS, WHEREIN THE SIMILAR RECEIPT HA S BEEN HELD TO BE A CAPITAL RECEIPT NOT CHARGEABLE TO TAX. HE HAS CONTENDED THAT THE ISSUE RAISED IN THE ADDITIONAL GROUND IS PURELY A LEGAL ONE AND SINCE ALL THE MATERIAL FACTS RELEVANT TO DECIDE THE SAME ARE ALREADY ON THE RECORD, THE SAME IS DESERVED TO BE A DMITTED. ALTHOUGH THE LD. D.R. HAS CONTENDED THAT THE ADJUDI CATION OF THE ISSUE RAISED BY THE ASSESSEE IN THE ADDITIONAL GROU ND MAY REQUIRE INVESTIGATION INTO NEW FACTS, HE HAS NOT BEEN ABLE TO POINT OUT SPECIFICALLY SUCH FACTS, WHICH ARE NOT AVAILABLE ON RECORD. MOREOVER, AS RIGHTLY CONTENDED BY THE LD. COUNSEL F OR THE ASSESSEE, THE QUESTION INVOLVED IN THE ADDITIONAL G ROUND IS WHETHER THE RECEIPTS FROM CARBON CREDIT ARE IN THE NATURE OF CAPITAL OR REVENUE RECEIPT AND WHATEVER LIMITED FAC TS, WHICH ARE REQUIRED TO BE CONSIDERED/EXAMINED TO DECIDE THE SA ME, ARE ALREADY AVAILABLE ON RECORD IN THE ANNUAL REPORT IT SELF FILED BY THE ASSESSEE-COMPANY. 13 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED 7. WHILE OBJECTING TO THE ADMISSION OF ADDITIONAL G ROUND FILED BY THE ASSESSEE, THE LD. D.R. IN SUPPORT OF T HE REVENUES CASE HAS RELIED ON THE DECISION OF THE HONBLE SUPR EME COURT IN THE CASE OF CIT VS.- STEPWELL INDUSTRIES LIMITED & OTHERS REPORTED IN 228 ITR 171 AND POINTED OUT THAT THE DE CISION OF THE TRIBUNAL IN THE SAID CASE TO ALLOW CERTAIN CLAIM MA DE BY THE ASSESSEE FOR THE FIRST TIME BEFORE THE TRIBUNAL WAS NOT UPHELD BY THE HONBLE APEX COURT. IT IS, HOWEVER, OBSERVED TH AT NEW CLAIM MADE BY THE ASSESSEE FOR THE FIRST TIME BEFORE THE TRIBUNAL IN THE SAID CASE WAS ALLOWED BY IT AND SINCE THE SAME WAS ALLOWED BY THE TRIBUNAL ON ASSUMPTION OF CERTAIN FACTS WITHOUT VERIFICATION OF THE RELEVANT DETAILS OR PARTICULARS, THE ACTION OF THE TRIBUNAL WAS NOT UPHELD BY THE HONBLE SUPREME COURT. THE PO WER OF THE TRIBUNAL TO ENTERTAIN THE NEW CLAIM RAISED FOR THE FIRST TIME BEFORE IT WAS NOT UNDER CHALLENGED IN THE SAID CASE AND AS IS EVIDENT FROM THE QUESTION REFERRED TO THE HONBLE S UPREME COURT, THE DECISION OF THE TRIBUNAL ALLOWING THE CLAIM OF THE ASSESSEE FOR WEIGHTED DEDUCTION UNDER SECTION 35B OF THE ACT , WAS CHALLENGED ON MERIT. ON THE OTHER HAND, IN THE CASE OF CIT VS.- PRUTHVI BROKERS & SHAREHOLDERS PVT. LTD. REPORTED I N 349 ITR 336 (BOM.), THE ISSUE SPECIFICALLY RAISED BEFORE TH E HONBLE BOMBAY HIGH COURT WAS REGARDING THE POWER OF THE AP PELLATE AUTHORITIES TO ENTERTAIN AND CONSIDER NEW CLAIM NOT MADE IN THE RETURN AND IT WAS HELD BY THE HONBLE BOMBAY HIGH C OURT THAT THE APPELLATE AUTHORITIES HAVE POWER TO CONSIDER CL AIM NOT MADE IN THE RETURN OF INCOME. IT IS ALSO OBSERVED THAT I N THE CASE OF ULTRA TECH CEMENT LIMITED (ITA NO. 1348/MUM/2012 DA TED 28.02.2014), A SIMILAR ISSUE CLAIMING RECEIPT FROM CARBON CREDIT AS CAPITAL RECEIPT NOT CHARGEABLE TO TAX WAS RAISED BY THE ASSESSEE FOR THE FIRST TIME BEFORE THE TRIBUNAL BY WAY OF ADDITIONAL GROUND AND THE SAME WAS ADMITTED BY THE COORDINATE BENCH OF THIS TRIBUNAL BY RELYING ON THE DECISION O F THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LIMITED VS.- CIT REPORTED IN 229 ITR 383. KEEPING IN VIEW THE SAID DECISION OF THE COORDINATE BENCH OF THIS TRIBU NAL AS WELL AS HAVING REGARD TO ALL THE RELEVANT ASPECTS OF THE CA SE AS DISCUSSED ABOVE, WE ADMIT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE AND RESTORE THE ISSUE RAISED THEREIN TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE SAME ON MERIT AFTER VERIFY ING ALL THE 14 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED RELEVANT FACTS OF THE CASE FROM RECORD AND AFTER GI VING THE ASSESSEE PROPER AND SUFFICIENT OPPORTUNITY OF BEING HEARD. 15. WE FIND THAT THE ADDITIONAL GROUND RAISED BY TH E ASSESSEE BEFORE THIS TRIBUNAL FOR THE FIRST TIME BUT HOWEVER IN VIEW OF THE FINDING O F A BENCH OF TRIBUNAL IN ASSESSEES OWN CASE, WERE OF THE OPINION WE SHALL ADMIT ADDIT IONAL GROUND AND REMAND THE ISSUE TO THE AO FOR VERIFICATION OF ALL RELEVANT DETAILS INVOLVING THE SAID ADDITIONAL GROUND WITH THE LIBERTY TO ASSESSEE TO PRODUCE DETAILS COV ERING THE SAID ISSUE AND AO SHALL ACCORD SUFFICIENT OPPORTUNITY TO THE ASSESSEE, ACCO RDINGLY ADDITIONAL GROUND IS ALLOWED AS INDICATED ABOVE. ITA 648/KOL/2013 OF REVENUE 16. THIS APPEAL BY THE REVENUE FILED WITH THE DELAY OF 10 DAYS AND SAME HAS BEEN EXPLAINED AS OWING TO ADMINISTRATIVE REASONS. THE A O HAS FILED AN AFFIDAVIT IN THIS REGARD AND AFTER PERUSAL OF THE SAME AND HEARING OF BOTH PARTIES, WERE OF THE VIEW OF THE DELAY OF 10 DAYS IN FILING THE APPEAL WAS DUE T O REASONABLE AND SUFFICIENT CAUSE. THEREFORE THE DELAY OF 10 DAYS ARE CONDONED. 17. THE REVENUE RAISED GROUND NO-1 AS UNDER: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, LD. CIT-A ERRED IN LAW IN HOLDING THAT PF CONTRIBUTION OF RS.1,88,075/- DEPOSITED AFTER DUE DATE AND GRACE PERIOD. 18. THE BRIEF FACTS RELATING TO GROUND NO-1 ARE TH AT THE ASSESSEE IS A COMPANY. IT IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND SAL E OF CEMENT, PAPER AND ELECTRICAL GOODS. IN THE COURSE OF ASSESSMENT PROCE EDINGS THE ASSESSEE CLAIMED DEDUCTION OF SUMS WHICH WERE PAID TO PF AND ESI AUT HORITIES AS EMPLOYEES SHARE 15 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED OF CONTRIBUTION BELATEDLY. THE ASSESSEE CLAIMED BEF ORE AO THAT THOUGH THE AFORESAID CONTRIBUTION WERE PAID BELATEDLY TO THE C ONCERNED AUTHORITIES THEY WERE ALLOWABLE AS DEDUCTION BECAUSE THE CONTRIBUTION HAD BEEN PAID ON OR BEFORE THE DUE DATE FOR FILING THE RETURN OF INCOME U/S 139(1) OF THE ACT. THE AO HOWEVER WAS OF THE VIEW THAT U/S 36(1)(VA) OF THE ACT ANY CONTRIBU TION OF EMPLOYEES SHARES TO ESI AND PF CANNOT BE ALLOWED AS DEDUCTION IF THE CONTRI BUTION IS PAID ON OR BEFORE THE DUE DATE PRESCRIBED UNDER THE RELEVANT PF AND ESI L AWS. ON APPEAL BY THE ASSESSEE CIT(A) HELD THAT PAYMENTS MADE ON OR BEFORE THE GRACE PER IOD ALLOWED UNDER THE RESPECTIVE LAWS GOVERNING PAYMENT OF PF A ND ESI SHOULD BE ALLOWED AS DEDUCTION. THE REVENUE HAS CHALLENGED THE ORDER OF THE CIT(A) IN SO FAR AS IT RELATES TO PAYMENT OF RS.1,88,075/- WHICH IS THE DU E FOR THE MONTH OF AUGUST, 2008 WHICH WAS PAID BY THE ASSESSEE ON 21.9.2008. IT IS THE CASE OF THE REVENUE THAT THE PAYMENT FOR THE MONTH OF AUGUST, 2008 OF PF WAS PAI D BEYOND THE GRACE PERIOD AND THEREFORE THE SAME OUGHT TO HAVE BEEN DISALLOWE D BY THE CIT(A). 19. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE REVEN UE IS RELYING SOLELY ON THE PROVISIONS OF SEC. 36(6)(VA) OF THE I.T. ACT. BUT T HIS PROVISION HAS TO BE READ ALONG WITH THE PROVISIONS SEC.2(24)(X) AND SEC.43B OF THE I.T. ACT. AFTER EXAMINING THESE PROVISIONS, THE HON'BLE SUPREME COURT AND HIG H COURT HAVE HELD THAT IF THE CONTRIBUTION IS DEPOSITED BY THE APPELLANT BEFORE T HE DUE DATE OF SUBMISSION OF ITS RETURN, IT WILL BE ENTITLED TO DEDUCTION - VIDE THE APEX COURT DECISION IN CIT VS VINAY CEMENT LTD. (213-CTR-268) AND CIT VS ALOM EXT RUSIONS LTD. (319-ITR- 306), DELHI HIGH COURT DECISIONS IN THE CASES OF CI T VS P. M. ELECTRONICS LTD. (313-ITR-161) AND CIT VS DHARMENDRA SHARMA (297-ITR -320). KEEPING IN VIEW THE JUDICIAL DECISIONS REFERRED TO ABOVE, WE ARE OF THE VIEW THAT THE PAYMENT FOR THE MONTH OF AUGUST, 2008 PAID ON 21.9.2008 IS A PAYMEN T MADE ON OR BEFORE THE DUE 16 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED DATE OF FILING THE RETURN U/S.139(1) OF THE ACT FOR AY 2009-10 AND THEREFORE THE ORDER OF THE CIT(A) IS JUSTIFIED, ACCORDINGLY GROUN D NO-1 IS DISMISSED. 20. GROUND NO-2 RAISED BY THE REVENUE IS REPRODUCED AS UNDER: 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, LD. CIT(A) ERRED IN LAW IN HOLDING THAT THE ASSESSEE IS THE OW NER OF RAILWAY SIDING EVEN THE AGREEMENT SHOW THAT IT IS NOT THE O WNER OR THE EXCLUSIVE BENEFICIAL OWNER. 21. THE BRIEF FACTS RELEVANT TO THE ISSUE ON HAND I S THAT THE ASSESSEE CLAIMED DEPRECIATION ON RAILWAY SIDING TO THE EXTENT OF RS. 10,29,796/-. DURING THE COURSE OF SCRUTINY PROCEEDINGS THE ASSESSEE SUBMITTED THAT THE RAILWAY SIDING IS A PRIVATE SIDING LAID BY THE RAILWAY ADMINISTRATION AT CEMENT UNIT OF THE ASSESSEE SITUATED AT NASHIRABAD. THE SIDING WAS CONSTRUCTED BOTH ON LAND BELONGING TO THE RAILWAY ADMINISTRATION AND LAND OCCUPIED AND USED BY THE AS SESSE AND COSTS OF SUCH SIDING WAS INCURRED BY THE ASSESSEE AS PER THE AGREEMENT, THEREFORE, ACCORDING TO THE ASSESSEE IT IS A PRIVATE SIDING HAVING ENJOYED AN E XCLUSIVE RIGHT ON THE SAME AND CLAIMED DEPRECIATION AS AN OWNER OF SUCH RAILWAY SI DING. THE ASSESSING OFFICER EXAMINED THE SPECIFIC CLAUSES IN AGREEMENT SUCH AS I.E. PERMISSION TO USE OF THE SIDING BY OTHERS, CONVERSION OF THE SIDING, NO TRAN SFER, POWER TO TERMINATE THE AGREEMENT AND POWER TO STOP TRAFFIC AND CAME TO A C ONCLUSION THAT THE ASSESSEE IS NOT THE OWNER OR THE BENEFICIAL OWNER OF THE RAILWA Y SIDING AND DENIED DEPRECIATION AS CLAIMED BY THE ASSESSEE. 22. IN FIRST APPEAL BEFORE THE CIT-A, THE ASSESSEE HAS SUBMITTED THAT ONE OF THE UNITS LOCATED AT JALGAON IN MAHARASTRA IS MANUFACTU RING CEMENT. THE ASSESSEE APPROACHED THE RAILWAY AUTHORITIES FOR THE EXTENSIO N OF LOADING FACILITY TO ITS FACTORY 17 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED AT JALGAON AND INCURRED AN EXPENDITURE TO LAY THE F ACILITY EXTENDED TO ITS FACTORY. IT IS ALSO SUBMITTED THAT THE ASSESSEE IS THE OWNER OF SU CH FACILITY USING THE SAME FOR ITS BUSINESS FOR HOWEVER STATED AS PER THE AGREEMENT TH E RAILWAY DEPARTMENT IS IN CHARGE OF RUNNING SAID RAILWAY SIDING. FURTHER SUBM ITTED THAT THE SIDING WAS LAID BEFORE THE COMMENCEMENT OF PRODUCTION OF CEMENT AT JALGAON FACTORY AND THE SAID EXPENDITURE HAS BEEN CAPITALISED AND THE ASSESSEE E NTITLED TO CLAIM DEPRECIATION ON THE SAME. THE CIT-A ALLOWED DEPRECIATION AS CLAIMED BY THE ASSESSEE BY RELYING ON THE ORDER OF KOLKATA TRIBUNAL IN THE CASE OF ITO VS MUKTI PROPERTIES (P) LIMITED. 10. I HAVE CAREFULLY CONSIDERED THE OBSERVATIONS O F THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AND SUBMISSION THE APPELLAN T. THE ASSESSING OFFICER MADE AN ADDITION OF RS.10,29,796/- ON RAILWAY SIDIN G. THE APPELLANT HAS FILED THE COPY OF AGREEMENT WITH CENTRAL RAILWAY AD MINISTRATION OF GOVT. OF INDIA IN WHICH IT HAS BEEN MADE CLEAR AS GIVEN IN T HE SUBMISSIONS OF THE APPELLANT (SUPRA) THAT RAILWAY SIDING IS OWNED BY M /S. ORIENT CEMENT PROP. ORIENT PAPERS & INDUSTRIES LTD. SINCE THE ASSET IS OWNED BY THE APPELLANT, THEREFORE, IT HAS SUBMITTED IT IS ENTITLED FOR DEPR ECIATION. RECORDS ALSO REVEAL THAT THE DEPRECIATION IS BEING ALLOWED TO THE APPEL LANT SINCE PAST SEVERAL YEARS AND IT HAS BEEN ALLOWED CONSISTENTLY BY THE A SSESSING OFFICER AFTER DUE VERIFICATION IN THE ASSESSMENT ORDER PASSED U/S. 14 3(3) OF THE INCOME-TAX ACT, 1961. THEREFORE, THE APPELLANT HAS STATED RU LE OF CONSISTENCY DOES APPLY IN THE CASE OF THE APPELLANT. IT HAS RELIED U PON THE CASE OF JURISDICTIONAL HONBLE ITAT IN THE CASE OF THE ITO VS. MUKTI PROPERTIES (P) LTD IN ITA NO.1243/KOL/2008 DATED 23.03.2012 IN WHI CH IT HAS BEEN OBSERVED AS FOLLOWS:- 6. THE LEARNED DR RELIED ON THE ASSESSMENT ORDER. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE WOULD SUBMIT T HAT THE INTEREST CLAIMED IN THE SUBSEQUENT AY 2003-04 NEVER DISALLOW ED AND IN THE SAME WAY THIS ISSUE FOR THE AY 1998-99 WAS FULLY ALLOWED AS PER THE DECISION/ORDER DATED 21-12-2010 [ IN INCOME TAX APP EAL NO. 95 OF 2009 IN ASSESSEES OWN CASE] OF THE HONBLE JURISDICTIO NAL KOLKATA HIGH COURT [ AVAILABLE IN ASSESSEES PAPER BOOK PAGES 40-57, A T PAGES 56]. THE HONBLE KOLKATA HIGH COURT DECIDED THE ISSUE BY ACC EPTING THE PLEA OF THE ASSESSEE. HENCE, THIS ISSUE IS NOW SETTLED THA T THE SAME WAS ALLOWED 18 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED PARTLY UNDER THE HEAD BUSINESS AND PARTLY UNDER T HE HEAD INCOME FROM HOUSE PROPERTY. SUBSEQUENTLY, THE INTEREST WAS FUL LY ALLOWED UNDER THE HEAD INCOME FROM HOUSE PROPERTY FOR AYS 2004-05 A ND 2005-06. THE COMPUTATION OF INCOME FOR THE A.YS. 2004-05 & 2005- 06 WAS FILED BEFORE THE AO, WHICH HE ALREADY ACCEPTED. THAT BEING THE POSITION, THE CONSISTENCY HAS TO BE FOLLOWED. THERE IS NOT APPLIC ATION OF RES JUDICATA AND PRINCIPLE OF CONSISTENCY HAS TO BE FOLLOWED, EVEN THAT UNLESS THERE IS CHANGE IN FACTS. HENCE, WE CONFIRM THE IMPUGNED OR DER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS), WHO HAS RIGHT LY DISALLOWED THE INTEREST ON BORROWED FUND. 11. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, IT IS HELD THAT THE APPELLANT IS THE OWNER OF THE RAILWAY SIDI NG AND IS ENTITLE FOR DEPRECIATION. THE ADDITION OF RS.10,29,796/- IS HER EBY DELETED. THIS GROUND OF APPEAL IS ALLOWED. 23. THE LEARNED DR SUBMITS THAT THE ASSESSING OFFIC ER FOUND ON AN EXAMINATION OF THE AGREEMENT BETWEEN ASSESSEE AND RAILWAY DEPARTME NT THAT THE LAND, CONSTRUCTION AND RIGHT DOES NOT BELONG TO ASSESSEE AND EVEN SIDI NG WAS MADE BY THE RAILWAY AND THE ASSESSEE HAS PAID ONLY COST OF SUCH SIDING. THE LEARNED DR ALSO RAISED A QUESTION THAT IF IT ALL LAND BELONGS TO ASSESSEE WHY ASSESSE E REQUIRES PERMISSION TO USE SUCH SIDING FOR THE REASON THAT THE ASSESSEE DOES NOT HA VE ANY EXCLUSIVE RIGHT ON SUCH SIDING AND IT IS NOT ENTITLED TO CLAIM DEPRECIATION AND RELIED ON THE ORDER OF AO. 24. THE LEARNED AR DREW OUR ATTENTION TO THE PAGE N O-4 OF PAPER BOOK TO THE DEFINITION OF WORK AND ALSO REFERRED TO PAGE NO- 6 PARTICULARLY AT POINT NO-2 AND ALSO THE PLAGE NO- 9 TO THE DEFINITION OF CAPITAL C OST OF NEW SIDING. THE LEARNED AR SUPPORTED THE ORDER OF CIT-A AND ARGUED THE CIT-A G RANTED RELIEF AND HELD THAT THE RAILWAY SIDING WAS OWNED BY ASSESSEE AND THE AS SESSEE CLAIMING SUCH A DEPRECIATION FOR THE PAST SEVERAL YEARS AND THE SAI D DEPRECIATION HAS BEEN ALLOWED 19 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED BY THE REVENUE AND CONSISTENTLY PASSING ORDERS UNDE R SECTION 143(3) OF THE ACT AND PRAYED TO UPHOLD THE ORDER OF CIT-A. 25. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIA L AVAILABLE ON RECORD. WE FIND THAT THE APPELLANT REVENUE CONSISTENTLY ALLOWI NG SUCH DEPRECIATION FOR THE LAST SEVERAL YEARS I.E. FROM 2004 2005 ONWARDS AND THE ASSESSMENT ORDERS WERE PASSED UNDER SECTION 143 (3) AFTER DUE VERIFICATION OF ALL RELEVANT DETAILS. WE ALSO NOTICED THAT THE ASSESSEE INCURRED EXPENDITURE AND LAID SUC H SIDING BEFORE THE COMMENCEMENT OF CEMENT PRODUCTION AT JALGAON FACTOR Y, IN OUR OPINION IT HAS TO BE REGARDED AS FIXED ASSET BEING IN THE NATURE OF CAPI TAL. WITH REFERENCE TO THE DEFINITION OF WORK AT PAGE NO-4 OF PAPER BOOK AS REFERRED BY THE LEARNED AR REVEALS THAT WHEREVER THE ASSESSEE CONDUCTS ITS BUSINESS OPERATI ON IN PURSUANCE OF THE AGREEMENT SUCH PREMISES HAS TO BE CONSIDERED AS WORK AND SU CH PREMISES BELONGS TO ASSESSEE WHETHER IT IS OCCUPIED BY OR USED BY ASSESSE. IN PR ESENT CASE THE FACT REMAINS UNDISPUTED THAT THE ASSESSEE APPROACHED THE RAILWAY ADMINISTRATION TO EXTEND THE FACILITY OF SIDING TO ITS FACTORY JALGAON AND INCUR RED EXPENDITURE IN LAYING THE SAID SIDING ON LAND PARTLY BELONGING TO THE RAILWAY ADMI NISTRATION AND TO ASSESSE WHICH IS CLEARLY MENTIONED IN PAGE NO-6 OF PAPER BOOK. IT IS ALSO CLEAR FROM PAGE NO-9 OF PAPER BOOK THE SIDING OWNER SHALL BEAR THE CAPITAL COST OF THE SIDING. THEREFORE TAKING INTO CONSIDERATION ALL THE CLAUSES AS DISCUS SED ABOVE REFLECTING IN THE PAPER BOOK AMPLY SHOW THAT THE ASSESSEE HAS EXCLUSIVE RIG HT OVER THE SAID RAILWAY SIDING FOR THE REASON THE TERM WORK MEANS A PREMISES WHE RE THE ASSESSE CONDUCTS ITS BUSINESS AND PART OF SUCH PREMISES IS BELONGING TO ASSESSEE AND THE CAPITAL COST OF SUCH SIDING WAS BORNE BY THE ASSESSEE THEREFORE WE HOLD THAT THE ASSESSEE IS AN OWNER OF SUCH SIDING BEING EXCLUSIVELY USED FOR ITS BUSINESS PURPOSE AND THE ASSESSE IS ENTITLED TO CLAIM DEPRECIATION ON SUCH RAILWAY S IDING AND WE FIND NO INFIRMITY IN 20 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED THE ORDER OF CIT-A AND IT IS JUSTIFIED, ACCORDINGLY GROUND NO- 2 RAISED BY THE REVENUE IS DISMISSED. 26. GROUND NO- 3 RAISED BY THE REVENUE IS AS FOLLOW S: 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, LD. CIT-A HOWEVER, ERRED IN LAW IN HOLDING THAT THE ASSESSEE IS THE OWNER OF HT LINES EVEN THE AGREEMENT SHOW THAT IT IS NOT THE OW NER. 27. THE BRIEF FACTS INVOLVING GROUND NO-3, ARE THAT ASSESSEE CLAIMED DEPRECIATION ON HT LINES AND FEEDER BAY AMOUNTING TO RS.3,85,736 /-ON THE GROUND THAT THE EXPENDITURE INCURRED BY LAYING HT LINES AND FEEDER BAY WERE CAPITALIZED AS THE OPERATIVE EXPENSES PRIOR TO THE COMMENCEMENT OF COM MERCIAL PRODUCTION AT JALGAON UNIT. THE ASSESSING OFFICER OF THE VIEW THAT, THE A SSESSEE IS NOT THE OWNER OF HT LINES AND FEEDER BAY, THEREBY DENIED THE DEPRECIATION AND ADDED SUCH AMOUNT TO THE TOTAL INCOME OF THE ASSESSE. BEFORE THE CIT-A THE ASSESSE E CONTENDED THAT IT INCURRED EXPENDITURE IN LAYING HT LINES AND FEEDER BAY FROM A DESIGNATED POINT UP TO THE FACTORY AND THE SAID EXPENDITURE WAS INCURRED DURIN G THE ESTABLISHMENT OF THE PLANT AND I.E. BEFORE THE COMMENCEMENT OF COMMERCIAL BUSI NESS AND THE SAID EXPENDITURE HAS BEEN CAPITALISED BASING ON WHICH THE CIT-A ALLO WED THE DEPRECIATION TO THE ASSESSEE. 28. AS AGGRIEVED BY THE ORDER OF CIT-A THE REVENUE BEFORE US IN THIS APPEAL AND SUPPORTING GROUND NO-3 THE LEARNED DR ADOPTED THE A RGUMENTS ADVANCED FOR GROUND NO-2 AND PRAYED TO ALLOW GROUND NO-3 AND RELIED ON THE ORDER OF AO. THE LEARNED AR REITERATED THE SUBMISSIONS MADE BEFORE THE CIT-A AND PRAYED TO UPHOLD THE ORDER OF CIT-A. 21 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED 29. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIA L ON RECORD. WE FIND THAT THE ASSESSEE ADMITTED THAT THE ASSESSE IS NOT THE OWNER OF HT LINES AND FEEDER BAY BEFORE THE ASSESSING OFFICER AND FIRST APPELLATE AUTHORITY AND THE ASSESSEE AND HANDED OVER HT LINES AND FEEDER BAY TO ELECTRICITY BOARD BUT HO WEVER THAT ASSESSEE DRAWING ELECTRICITY THROUGH SAID HT LINES AND FEEDER BAY FO R ITS BUSINESS PURPOSES. WE ALSO FIND THE SAME KIND OF THE DEPRECIATION HAS BEEN ALL OWED BY THE RESPONDENT REVENUE TO THE ASSESSEE FROM A.Y. 2001 2002 AFTER DUE VER IFICATION OF ALL THE RELEVANT EVIDENCE BY THE ASSESSING OFFICER RESULTING TO AN A SSESSMENT ORDER UNDER SECTION 143(3) OF THE ACT. THEREFORE, WERE OF THE OPINION THAT THE ASSESSEES ENTITLED TO CLAIM DEPRECIATION HT LINES AND FEEDER BAY AND FIND NO MERIT IN GROUND NO-3 RAISED BY THE REVENUE, ACCORDINGLY IT IS DISMISSED. 30. GROUND NO- 4 RAISED BY THE REVENUE IS AS UNDER: 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, LD. CIT-A ERRED IN LAW IN DELETING THE ADDITION MADE TO THE C OMMISSION PAID TO VARIOUS PARTIES EVEN THE AO FOUND MANY DISCREPANCIE S OF THE RATE OF COMMISSION. 31 . DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO FOUND THAT THERE IS NO UNIFORMITY IN THE RATE OF COMMISSION AND SUCH COMMI SSION HAS NO RELATION TO THE SALES AFFECTED BY THE SAID RECEIVING PARTIES. ACCOR DING TO AO THE ASSESSEE COULD NOT BRING ON RECORD WITH ANY OBJECTIVE REASONS OF SUCH COMMISSION PAYMENTS, THEREBY CALCULATED AT 3.08% FOR MAXIMUM JUSTIFIED COMMISSIO N UNDER PAPER DIVISION AND AT 6.26% FOR FANS DIVISION, ACCORDINGLY, ADDED RS.15,9 0,523/-TO THE TOTAL INCOME OF THE ASSESSE. BEFORE THE CIT-A, THE ASSESSEE CONTENDED T HAT THE COMMISSION IS BEING PAID TO VARIOUS PARTIES DEPENDING UPON SALE OF PRODUCTS OF ASSESSEE AND ALL THE DETAILS HAVE BEEN PROVIDED TO THE ASSESSING OFFICER. FURTHE R SUBMITTED THAT THE AO DID NOT 22 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED GIVE SPECIFIC REASONS AS TO HOW HE CONCLUDED ON MAX IMUM JUSTIFIED COMMISSION THEREIN FOR BOTH THE DIVISIONS, BUT HOWEVER, THE AO ACCEPTED THAT THE SAID PARTIES RENDERED SERVICE TO THE ASSESSEE AND RECEIVED COMMI SSION. CONSIDERING ALL ASPECTS AS SUBMITTED BY THE ASSESSEE THE CIT-A DELETED THE SAID ADDITION. 32. IN 2 ND APPEAL BEFORE US , THE LEARNED DR ARGUED THAT THE COMMISSION PAID IN TWO DIVISIONS I.E. FOR PAPER DIVISION AND FANS DIV ISION AND RAISED A QUESTION WHY 1.8% TO ONE PARTY AND 6.3% TO ANOTHER PARTY AND THE DISTRIBUTION OF SUCH DIFFERENCE HAS TO BE EXPLAINED AND REFERRED TO PARAGRAPH 7.3 AND DREW OUR ATTENTION TO SHOW THAT NO UNIFORMITY IN PAYMENT OF COMMISSION AND SUB MITTED THAT THE ASSESSEE FAILED TO BRING ON RECORD ANY OBJECTIVE EXPLANATION. FURTH ER, THE LEARNED DR SUBMITTED THAT THE ASSESSEE DID NOT DO ANY REASONING WHY THE COMMI SSION WAS PAID BASED ON QUANTITY OR BUSINESS EXPEDIENCY REFERRING TO 1.3% T O NEPAL, 3.89% TO CHENNAI, 5.68% TO GWALIOR AND 1.16% TO KOLKATA. THE LEARNED DR FURTHER ARGUED THAT THERE IS A WIDE DIFFERENCE OF COMMISSION PAYMENT BETWEEN SAU DI ARABIA AND KOLKATA AT 3.03% AND 6.78% RESPECTIVELY. THE LEARNED DR ARGUED REFERRING TO PARA-22 OF OBSERVATION OF CIT-A THAT THE COMMISSION PAID ON THE BASIS OF QUANTITY I.E. METRIC TONNE WAS NOT BEFORE THE AO AND THE ASSESSEE MADE S UCH SUBMISSIONS FOR THE FIRST TIME BEFORE THE CIT-A AND IN SUCH CIRCUMSTANCES THE ISSUE GO TO THE AO FOR DENOVO ASSESSMENT. 33. IN REPLY, THE LEARNED AR SUBMITS THAT THE VARIA NCE OF DIFFERENCE WAS OWING TO QUANTITY OF PAPER PRODUCT AND THE DEPARTMENT IS NOT ON RULE 46A IN THIS APPEAL AND THE ARGUMENT OF SENDING THE ISSUE TO THE FILE OF AO IS NOT MAINTAINABLE BUT HOWEVER AGREED TO SEND THE ISSUE TO THE FILE OF AO. 23 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED 34. HEARD RIVAL SUBMISSIONS AND PERUSED THE RELEVAN T MATERIAL ON RECORD. IT IS NOTICED FROM THE ORDER OF CIT-A THAT HE SPECIFICALL Y OBSERVED THAT THE COMMISSION WAS PAID DEPENDING ON THE QUANTITY, TYPE OF PAPER A ND TYPE OF BUYERS. THE CIT-A SPECIFICALLY HELD THAT THE RATE OF COMMISSION HAS N O RELEVANCE ON VALUE OF SALE. REGARDING COMMISSION PAID IN RESPECT OF FANS DIVISI ON WHEREIN THE CIT-A FOUND THAT IT OF COMMISSION VARIED WITH THE TYPE OF BUYER IN RESPECT OF BULK BUYER AND CANTEEN SOURCE DEPARTMENT AND FOUND FURTHER THAT TH E RATE OF COMMISSION HAS BEEN ACCEPTED BY THE REVENUE IN THE EARLIER YEARS. COMIN G TO THE SUBMISSIONS OF THE LEARNED DR IN RESPECT OF WIDE DIFFERENCE OF COMMISS ION PAID TO VARIOUS PARTIES THAT WERE OF THE OPINION THAT THE AO CANNOT DECIDE HOW MUCH OF COMMISSION IS TO BE PAID IN THE COURSE OF BUSINESS AND THAT THE PAYMEN T OF COMMISSION IS AN EXCLUSIVE PREROGATIVE OR DISCRETION OF THE ASSESSEE IN THE CO URSE OF ITS BUSINESS EXPEDIENCY. WE FIND THAT THE SAID DIFFERENCES AS RAISED BY THE LEARNED DR WAS PAID TO VARIOUS ENTITIES LOCATED IN INDIA AND ABROAD AND WE DO NOT SEE ANY OF THE PARTIES ARE RELATED TO THE ASSESSEE. IT IS PERTINENT TO NOTE THAT THE A SSESSING OFFICER HAS ACCEPTED THE SERVICES RENDERED BY THE PARTIES WHO RECEIVED COMMI SSION AND PAYMENT OF COMMISSION THEREON AS CAN BE SEEN FROM THE ASSESSME NT ORDER WHERE HE APPLIED 3.08% AND 6.26% TO THE PAPER AND FAN DIVISION RESPE CTIVELY. WE FIND ALL THE DETAILS RELATING TO COMMISSION PAYMENTS WERE AVAILABLE BEFO RE THE AO AND THE CIT-A EXAMINED THE SAID DETAILS AND FOUND THAT PAYMENT OF COMMISSION WAS MADE ON THE BASIS OF QUANTITY OF PAPER AND ON THE SALE PRICE OF BULK BUYER IN RESPECT OF FAN DIVISION, THEREFORE, THE ARGUMENTS OF THE LEARNED D R IS REJECTED IN RESPECT OF REMANDING THE ISSUE TO THE FILE OF AO IS CONCERNED. THUS, THE ORDER OF CIT-A IS CONFIRMED AND GROUND NO-4 RAISED BY THE REVENUE IS DISMISSED. 24 ITA NOS.430,648/KOL/2013 M/ S. ORIENT PAPER & INDUSTRIES LIMITED 35. IN THE RESULT, THE APPEAL IN ITA 430/KOL/2013 OF ASSESSEE IS PARTLY ALLOWED AND APPEAL IN ITA 648/KOL/2013 OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH AUGUST, 2016 SD/- SD/- P.M. JAGTAP S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10.08.2016 **PP/SPS COPIES OF ORDER FORWARDED TO :- (1) ORIENT PAPER & INDUSTRIES LIMITED, 9/1, R.N. MUKHERJEE ROAD, 13 TH FLOOR, KOLKATA-700 001 (2) JOINT/DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-6, KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (3) COMMISSIONER OF INCOME-TAX (APPEALS)-VI, KOLKAT A (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA