Hynoup Food & Oil Indus.Ltd., Ahmedabad V. The Income tax Officer,Ward-4(3), Ahmedabad

ITA 465/AHD/2008

• Counselvise Citation: 46520514 RSA 2008
• Duration Of Justice: 4 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 03-04-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 08-02-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K GUPTA
• Assessee Lawyers: S V AGARWAL
• Keywords: Gross profit estimation; Rejection of books of accounts; Business income; Depreciation; Retrospective amendment; Question of law; Corroborative evidences; Commercial expediency; Onus to prove; Unabsorbed depreciation
• Section: 40A(3); 234B; 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI, A.K.GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.465 & 587/AHD/2008 ASSESSMENT YEAR:2003-04 HYNOUP FOOD & OIL INDS. LTD. MARUTI HOUSE, OPP. AIR INDIA, ASHRAM ROAD, AHMEDABAD PAN NO.AAACH5534M INCOME TAX OFFICER, WARD-4(3), AHMEDABAD V/S . V/S . INCOME TAX OFFICER, WARD-4(3), AHMEDABAD HYNOUP FOOD AND OIL INDS. LTD. MARUTI HOUSE, OPP. AIR INDIA, ASHRAM ROAD, AHMEDABAD (APPELLANT) .. (RESPONDENT) ITA NO.466 & 588/AHD/2008 ASSESSMENT YEAR:2004-05 HYNOUP FOOD & OIL INDS. LTD. MARUTI HOUSE, OPP. AIR INDIA, ASHRAM ROAD, AHMEDABAD INCOME TAX OFFICER, WARD-4(3), AHMEDABAD V/S . V/S . INCOME TAX OFFICER, WARD-4(3), AHMEDABAD HYNOUP FOOD AND OIL INDS. LTD. MARUTI HOUSE, OPP. AIR INDIA, ASHRAM ROAD, AHMEDABAD (APPELLANT) .. (RESPONDENT) ITA NO.465-66, 587-88/AHD/08, 2366/A/09 &CO 56/A/12 A.YS.03-04 TO 05-06 HYNOUP FOOD AND OIL INDS. LTD. V. ITO WD-4(3) ABD PAGE 2 ITA NO.2366/AHD/2009 & C.O. NO.56/AHD/2012 (ARISING OUT ITA NO.2366/AHD/2009) ASSESSMENT YEAR:2005-06 INCOME TAX OFFICER, WARD-4(3), ROOM NO.106, 1 ST FLOOR, NAVJIVAN TRUST BUILDING, AHMEDABAD HYNOUP FOOD AND OIL INDS. LTD. MARUTI HOUSE, OPP. AIR INDIA, ASHRAM ROAD, AHMEDABAD V/S . V/S . HYNOUP FOOD AND OIL INDS. LTD. MARUTI HOUSE, OPP. AIR INDIA, ASHRAM ROAD, AHMEDABAD INCOME TAX OFFICER, WARD-4(3), ROOM NO.106, 1 ST FLOOR NAVJIVAN TRUST BUILDING, AHMEDABAD (APPELLANT) .. (RESPONDENT) /BY ASSESSEE SHRI S.V. AGARWAL, AR /BY REVENUE SHRI S.K.GUPTA, CIT-DR /DATE OF HEARING 03-04-2012 /DATE OF PRONOUNCEMENT 31-05-2012 O R D E R PER KUL BHARAT, JUDICIAL MEMBER:- THESE ARE TWO SET OF CROSS-APPEALS AND AN APPEAL & CROSS OBJECTION (CO) FILED BY THE ASSESSEE AND REVENUE ARE AGAINST THE DIFFERENT ORDERS OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-VIII, AHMEDABA D VIDE DATED 27-11- 2007 AND 28-03-2009 FOR THE ASSESSMENT YEARS 2003-0 4 TO 2005-06 RESPECTIVELY. THE FACTS AND ISSUES ARE SIMILAR, TH EREFORE TAKEN TOGETHER AND HEARD TOGETHER ARE BEING DISPOSED OF BY A CONSOLIDA TE ORDER. FIRST WE TAKE UP ASSESSEES APPEAL IN ITA NO.465/AH D/2008 & REVENUES APPEAL IN ITA NO.587/AHD/2008 FOR A.Y. 2003-04. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- ITA NO.465-66, 587-88/AHD/08, 2366/A/09 &CO 56/A/12 A.YS.03-04 TO 05-06 HYNOUP FOOD AND OIL INDS. LTD. V. ITO WD-4(3) ABD PAGE 3 1. THE LEARNED COMMISSIONER OF I. TAX (APPEALS)-VI II, ABAD [CALLED CIT(A)] HAS ERRED PARTLY IN CONFIRMING DISALLOWANCE MADE BY A.O IN RESPECT OF INTEREST OF RS.12,70,692/- U/S 36(1)(III ) [RELATED TO HYTAISUN MAGNETICS LTD. & NEELU INVESTMENT PVT. LTD.] OUT OF TOTAL FINANCIAL CHARGES OF RS.62,53,530/- ON THE GROUND THAT INTERE ST BEARING FUNDS WERE USED FOR INTEREST FREE ADVANCES. IN AS MUCH AS FINANCIAL CHARGES PAID IS NOT INTEREST PAID ON INTEREST BEARING FUNDS BUT IT IS MAINLY DRAFT COMMISSION PAID TO SHROFFS FOR PURCHASE OF DRAFTS I N FAVOUR OF SUPPLIER OF RAW MATERIALS. 2. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THAT MAT CHARGED BY A.O. AND IN NOT ALLOWING DEDUCTION OF PROFIT U/S. 1 15JB(1) [EXPLANATION VII OF I.T. ACT). THE CO. IS SICK UNIT DECLARED BY BIFR 2.1 THE LEARNED CIT(A) HAS ERRED IN DIRECTING THE A .O TO ALLOW LOWER OF THE B/F BUSINESS LOSS AND DEPRECIATION INSTEAD OF A LLOWING THE EXEMPTION AVAILABLE TO SICK UNIT UNDER SICK INDUSTRIAL COMPAN IES ACT, 1985, WHILE COMPUTING BOOK PROFIT. 3. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING DISAL LOWANCE OF DEFERRED TAX OF RS.1,25,32,281/- FOR WORKING OUT BOOK PROFIT U/S. 115JB IN AS MUCH AS IT IS NOT TAX PAID OR PAYABLE, HENCE DO NOT QUALIFIED FOR DISALLOWANCE. 4. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING INTER EST CHARGED U/S. 234B/C IN AS MUCH AS ASSESSEE DID NOT EXPECT THAT F OR WORKING BOOK PROFIT U/S. 115JB DEDUCTION OF PROFIT OF SICK INDUS TRIAL COMPANY WILL NOT BE ALLOWED TO IT. 3. THE FACTS IN BRIEF ARE THAT ASSESSEE A LIMITED C OMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURE AND TRADING OF EDIBLE OILS SUCH AS COTTON SEEDS OIL, GROUNDNUT OIL, SUNFLOWER OIL AND SOYBEAN OIL. DURIN G THE YEAR UNDER CONSIDERATION THE TOTAL SALES AMOUNTED TO RS.165.44 CRORES WAS MADE AFTER DEDUCTING THE EXPENSES, THE PROFIT BEFORE TAX AS PE R THE PROFIT AND LOSS ACCOUNT WORKED OUT TO RS.3.76 CRORES. AFTER MAKING THE ADJUSTMENT, THE TOTAL INCOME WAS COMPUTED AT RS.3,59,72,212/- AND THIS WA S SET OFF AGAINST THE BROUGHT FORWARD BUSINESS LOSS. THE RETURN OF INCOME WAS NIL. SUBSEQUENTLY, THE CASE WAS TAKEN UP FOR SCRUTINY ASSESSMENT. THE ASSESSING OFFICER AFTER VERIFYING THE DETAILS FURNISHED BY THE ASSESSEE IN SUPPORT OF THE AUDITED ACCOUNTS FILED ALONG WITH RETURN OF INCOME MADE DIS ALLOWANCE OF ITA NO.465-66, 587-88/AHD/08, 2366/A/09 &CO 56/A/12 A.YS.03-04 TO 05-06 HYNOUP FOOD AND OIL INDS. LTD. V. ITO WD-4(3) ABD PAGE 4 RS.1,58,67,033/- ON ACCOUNT OF PROCESS LOSS AND RS .12,70,692/- OUT OF FINANCIAL EXPENDITURE. THUS, TOTAL DISALLOWANCE OF RS.1,71,37,725/- WAS ADDED BACK TO THE INCOME OF THE ASSESSEE. AGAINST THE ASS ESSMENT ORDER, THE ASSESSEE FILED APPEAL BEFORE LD. CIT(A), LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF LD. AUTHORIZED REPRESENTATIVE FOR TH E ASSESSEE OBSERVED THAT AS PROCESS LOSS HAS BEEN ALLOWED @ 2% BY THE AO IN A.YS. 1996-97 TO 1998- 99 AND HAS BEEN ALLOWED IN FULL BY ITAT AS CLAIMED BY THE ASSESSEE FOR THE A.Y. 1987-88 TO 1995-96. THE PROCESS LOSS CLAIMED B Y THE ASSESSEE AT 1.61% WAS FOUND TO BE WITHIN REASONABLE LIMIT. THUS, THE GROUND OF ASSESSEES APPEAL AGAINST THE DISALLOWANCE OF THE PROCESS LOSS WAS ALLOWED BY LD. CIT(A). THE OTHER GROUND RAISED BY ASSESSEE WAS AGA INST THE DISALLOWANCE OF RS.12,70,692/- U/S 36(1)(III) OF THE INCOME-TAX ACT , 1961 (HEREINAFTER REFERRED TO AS THE ACT). HOWEVER, AFTER THE CONSIDERING TH E SUBMISSIONS OF LD. AUTHORIZED REPRESENTATIVE, THIS ADDITION WAS SUSTAI NED. 4. ANOTHER GROUND RAISED BEFORE LD. CIT(A) WAS AGAI NST THE WORKING OUT BOOK PROFIT U/S. 115JB OF THE ACT AT RS.5,34,78,337 /-. THE SUBMISSION OF LD. AUTHORIZED REPRESENTATIVE BEFORE LD. CIT(A) WAS THA T THE ASSESSEE-COMPANY WAS REGISTERED AS A SICK UNIT ON 11-04-2000 AND 17- 03-2002 WITH THE BIFR. HOWEVER, LD. CIT(A) AFTER CONSIDERING THE SUBMISSIO N OF THE LD. AR DISMISSED THIS GROUND OF ASSESSEES APPEAL. HOWEVER, LD. CIT( A) DIRECTED THE ASSESSING OFFICER TO WORK OUT THE BOOK PROFIT AS PER SEC. 115 JB OF THE ACT AFTER ALLOWING MINIMUM OF UNABSORBED BUSINESS LOSS AND UNABSORBED DEPRECIATION FOR EACH YEAR WHILE WORKING OUT THE BOOK PROFIT AS PER U/S.1 15JB OF THE ACT. THE LAST GROUND RAISED BEFORE LD. CIT(A) WAS ABOUT CHARGING OF INTEREST U/S.234B OF THE ACT ON MAT WORKED OUT BY THE ASSESSING OFFICER. THIS GROUND OF ASSESSEES APPEAL WAS DISMISSED BY THE LD. CIT(A) A ND GROUND RAISED AGAINST INITIATION OF PENALTY U/S. 271(1)(C) OF TH E ACT WAS NOT ADJUDICATED AND TREATING THE SAME AS PREMATURE. THUS, APPEAL BEFORE LD. CIT(A) WAS PARTLY ALLOWED AGAINST THE ORDER OF LD. CIT(A). BOTH REVEN UE AS WELL AS ASSESSEE HAVE FILED APPEAL BEFORE THE TRIBUNAL. ITA NO.465-66, 587-88/AHD/08, 2366/A/09 &CO 56/A/12 A.YS.03-04 TO 05-06 HYNOUP FOOD AND OIL INDS. LTD. V. ITO WD-4(3) ABD PAGE 5 5. GROUND NO.1 IS WITH REGARD TO DISALLOWANCE U/S. 36(1)(III) OF THE ACT. LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTE D THAT LD. CIT(A) ERRED IN LAW IN PARTLY CONFIRMING THE DISALLOWANCE MADE BY A SSESSING OFFICER FOR INTEREST OF RS.12,70,692/- U/S. 36(1)(III) RELATED TO HYTAISUN MAGNETICS LTD. AND NILU INVESTMENT PVT. LTD. LD. AR SUBMITTED THAT THE ADVANCES WERE GIVEN TO PROTECT THE INVESTMENT OF THE COMPANY AS WELL AS DI RECTORS. THE SHARES OF THE SAID COMPANY HYTAISUN MAGNETICS LTD. WAS A 100% EXP ORT ORIENTED UNIT AND DUE TO DELAY OF APPROVAL BY THE CENTRAL GOVT. THE P ROJECT COST WAS OVERRUN. LD. AR PLACED RELIANCE ON THE JUDGMENT OF HONBLE SUPRE ME COURT IN THE CASE OF S.A. BUILDERS V. CIT (2007) 288 ITR 1 (SC). LD. AR SUBMITTED THAT IT WA S DEMONSTRATED THAT THE LOAN ADVANCED WAS FOR PROTECT ION OF THE BUSINESS AND INVESTMENT OF THE ASSESSEE-COMPANY LD. CIT(A) FAILE D TO APPRECIATE THIS FACT. FURTHER, LD. AR SUBMITTED THAT THE ADVANCES WERE ES SENTIAL FOR THE BUSINESS PURPOSES. 6. ON THE CONTRARY, LD. CIT-DR SUBMITTED THAT THE A SSESSEE HAS FAILED TO ESTABLISH THAT THE ADVANCES WERE GIVEN OUT OF INTER EST FREE FUNDS AVAILABLE. 7. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND THE JUDGMENTS CITED BY THE RESPECTIVE PA RTIES. WE FIND THAT LD. CIT(A) HAS GIVEN HIS FINDING ON THIS ISSUE IN PARA-3.2 OF HIS ORDER, SAME IS REPRODUCED AS UNDER:- 3.2 I HAVE CONSIDERED THE SUBMISSIONS OF THE A.R C AREFULLY. AS THE ADVANCE HAS BEEN GIVEN TO METAL FORM INDUSTRIES FOR BUSINESS CONSIDERATION THE INTEREST RELATING TO ADVANCE TO T HIS PARTY IS DIRECTED TO BE ALLOWED. AS REGARDS ADVANCE TO HYTAISUN MAGNETIC S LTD AND NILU INVESTMENT PVT. LTD., THE SAME HAVE BEEN GIVEN NOT FOR COMMERCIAL EXPEDIENCY AND NOT FOR THE PURPOSE OF BUSINESS OF T HE APPELLANT. HENCE THE DECISION CITED BY THE LD. A.R OF S.A. BUILDERS WOULD NOT BE APPLICABLE. RELIANCE IS MADE ON THE FOLLOWING DECIS IONS TO SUSTAIN THE DISALLOWANCE OF INTEREST RELATING TO THE SAID ADVAN CE:- (1) TRIVENI ENGG. WORK LTD. 167 ITR 742 (ALL) (2) PHALATON SUGAR WORK LTD. VS. CIT 208 ITR 989 (BOM) (3) HIGHWAY CONSTRUCTION PVT. LTD. 199 ITR 702 (G AUHATI) ITA NO.465-66, 587-88/AHD/08, 2366/A/09 &CO 56/A/12 A.YS.03-04 TO 05-06 HYNOUP FOOD AND OIL INDS. LTD. V. ITO WD-4(3) ABD PAGE 6 (4) HR SUGAR FACTORY 187 ITR 363 (ALL) EARLIER YEAR DEPOSIT CAN ALSO BE CONSIDERED FOR DISALLOWANCE OF INTEREST (5) K.SOMASUNDARAM & BROS. -238 ITR 939 (MAD) WHERE IN IT HAS BEEN HELD THAT BURDEN OF PROOF IS ON THE ASSESSEE TO PRO VE THAT BORROWED FUNDS WERE UTILIZED FOR BUSINESS PURPOSE AND LIQUID ITY OF FUNDS IS TO BE SEEN ON THE DATE OF GIVING INTEREST FREE LOANS & ADVANCE. (6) CIT VS. ABHISHEK INDUSTRIES LTD. 286 ITR 1 (P&H ) LOANS ADVANCED INTEREST FREE TO SISTER CONCERNS WHI LE PAYMENT OUTSTANDING ON BORROWINGS BY COMPANY INFERENCE TH AT ADVANCES WERE FROM BORROWED FUNDS AND FOR NON BUSINESS PURPO SE ONUS IS ON THE ASSESSEE TO SHOW BORROWINGS WERE USED FOR BU SINESS PURPOSES. SIMILAR FINDING HAD BEEN GIVEN BY THE ASSESSING OFF ICER AND THE CIT(APPEALS) FOR A.Y. 98-99 AND DISALLOWANCE OF INT EREST WAS SUSTAINED BY THE CIT(APPEALS). THE FACTS ARE DIFFER ENT TILL A.Y. 1996- 97 AS THE APPELLANT WAS CHARGING INTEREST FROM THE SAID PARTIES. IN THE ITAT ORDER REFERRED TO BY THE LD. A.R FOR A.Y. 96-97 ADDITION 97- 98 IT WAS PART DISALLOWANCE OF INTEREST WHICH HAS B EEN DELETED BY THE ITAT. IN VIEW OF THE ABOVE FACTS AS THE ADVANCE S TO THE SISTER CONCERNS HYTAISUN MAGNETICS LTD AND NILU INVESTMENT PVT. LTD. HAVE BEEN GIVEN NOT FOR THE PURPOSE OF BUSINESS OF THE A PPELLANT AND FOLLOWING THE ORDER OF THE CIT(APPEALS) FOR A.Y. 19 98-99 AND THE RATIO LAID DOWN IN THE ABOVE CASES, DISALLOWANCE OF INTEREST RELATING TO ADVANCES TO THE ABOVE PARTIES IS SUSTAINED. THIS GROUND IS PARTLY ALLOWED. AS PER THE BALANCE-SHEET AVAILABLE ON PAGES 59-60 O F PAPER BOOK, AGAINST SHAREHOLDERS FUNDS OF RS.872.96 LAKH, LOSSES IS OF RS.4492.25 LAKHS. HENCE, NO INTEREST FREE FOUND IS AVAILABLE WITH THE ASSESS EE-COMPANY. SO INTEREST BEARING BORROWED FUNDS WERE USED FOR GIVING INTERES T FREE ADVANCE. THEREFORE, WE DO NOT FIND ANY INFIRMITY INTO THE ORDER PASSED BY LD. CIT(A) AS THE EXPLANATION OFFERED BY THE ASSESSEE WITH REGARD TO ADVANCE IS NOT CONVINCING. RATHER, IT IS SEEN THAT ADVANCES WERE GIVEN OUT OF THE INTEREST BEARING BORROWED FUNDS AND WHAT WAS THE COMMERCIAL EXPEDIEN CY FOR MAKING SUCH ADVANCES, WHEN THE ASSESSEE, ITSELF HAS TO PAY INTE REST ON THE BORROWED CAPITAL. THIS GROUND OF ASSESSEES APPEAL IS DISMIS SED IN VIEW OF THE FACT THAT THE ASSESSEE FAILED TO ESTABLISH THAT LOAN AND ADVA NCES GIVEN TO SISTER ITA NO.465-66, 587-88/AHD/08, 2366/A/09 &CO 56/A/12 A.YS.03-04 TO 05-06 HYNOUP FOOD AND OIL INDS. LTD. V. ITO WD-4(3) ABD PAGE 7 CONCERN WERE FOR BUSINESS PURPOSES. SINCE THE SAME WERE GIVEN OUT OF INTEREST BEARING BORROWED FUND. 8. NEXT GROUND RELATES WITH REGARD TO CHARGING OF M INIMUM ALTERNATE TAX (MAT IN SHORT) AND NOT ALLOWING DEDUCTION OF ENTIRE PROFIT U/S. 115JB OF THE ACT BY HOLDING THAT THE ASSESSEE-COMPANY IS SICK DECLAR ED BY THE BIFR. LD. AR SUBMITTED THAT ASSESSEE IS NOT LIABLE TO MAT AS IT HAS BEEN DECLARED BIFR. LD. AR SUBMITTED THAT EFFECTIVE DATE WOULD BE CONSTRUED AS DATE WHEN APPLICATION WAS REGISTERED BEFORE BIFR BUT NOT THE DATE WHEN TH E ORDER DATED 04-01-2006 WAS PASSED BY BIFR. 9. ON THE CONTRARY, LD. CIT-DR SUBMITTED THAT THE O RDERS OF AUTHORITIES BELOW IS QUITE JUSTIFIED AND ASSESSEE HAS FAILED TO DEMONSTRATE THAT IN THIS YEAR, IT IS DECLARED SICK BY BIFR. 10. WE HAVE HERD THE RIVAL CONTENTIONS, PERUSED THE MATERIALS ON RECORD. WE FIND THAT LD. CIT(A) HAS DISCUSSED THIS ISSUE IN PARA-4 TO 4.2 OF HIS ORDER, SAME ARE REPRODUCED FOR THE SAKE OF CLARITY:- 4. THE THIRD GROUND OF APPELLANT IS THAT THE A.O H AS ERRED IN WORKING OUT BOOK PROFIT U/S. 115JB AT RS.5,34,78,337/- AS AGAIN ST NIL BOOK PROFIT SHOWN BY THE APPELLANT. THE A.O HAS DISCUSSED THE S AME IN PARA 7 AT PAGE 11 TO 16 OF THE ASSESSMENT ORDER. THE APPELLAN T HAD CONTENDED BEFORE THE A.O THAT THE APPELLANT WAS NOT LIABLE TO MAT AS IT HAS BEEN DECLARED SICK BY THE BIFR. THE A.O OBSERVED THAT TH E BIFR ORDER HAS BEEN PASSED ON 4.1.2002, SO IT CAN NOT RELATE TO TH E YEAR UNDER CONSIDERATION, HENCE THE APPELLANT WAS LIABLE TO PA Y TAX AS PER THE PROVISIONS OF SECTION 115JB OF THE I.T. ACT. THE A. O HAS OBSERVE IN PARA 7.4 OF THE ASSESSMENT ORDER THAT NO UNABSORBED DEPR ECIATION HAS BEEN CARRIED FORWARD TO THE BALANCE SHEET AND THE SEGREG ATION OF DEPRECIATION FROM NET BUSINESS LOSS SHOWN IN THE P & L ACCOUNT A ND BALANCE SHEET IS NOT PERMISSIBLE IN VIEW OF THE DECISION OF SUPREME COURT IN THE CASE OF APPOLY TYRES LTD. THEREFORE, HE TOOK THE BOOK PROFI T AT RS.5,34,78,337/- AND DID NOT DEDUCT ANY UNABSORBED BUSINESS LOSS OR DEPRECIATION AS THE LESSER OF THE TWO WAS NIL. THEREFORE HE COMPUTED LI ABILITY UNDER MAT. 4.1 BEFORE ME THE A.R SUBMITTED THAT THE BOOKS OF A CCOUNTS OF THE APPELLANT HAVE BEEN PREPARED IN ACCORDANCE WITH PAR T-II & III OF ITA NO.465-66, 587-88/AHD/08, 2366/A/09 &CO 56/A/12 A.YS.03-04 TO 05-06 HYNOUP FOOD AND OIL INDS. LTD. V. ITO WD-4(3) ABD PAGE 8 SCHEDULE VI OF COMPANIES ACT, 1956 WHICH IS ALSO RE QUIREMENT OF SECTION 115JB(2) OF THE I.T. ACT. AS PER SCHEDULE V I, PART-II(3)(IV), THE COMPANY IS REQUIRED TO DEBIT EXPENDITURE OF DEPRECI ATION IN PROFIT AND LOSS ACCOUNT. IN PART-II & III OF SCHEDULE VI THERE IS NO PROVISION OF CARRY FORWARD OF DEPRECIATION SEPARATELY LIKE BUSINESS LO SS. THE A.R SUBMITTED THAT DEPRECIATION IS TO BE SET OFF AGAINS T GROSS PROFIT AND IF THERE IS LOSS AND IF DEPRECIATION IS NOT COVERED BY GROSS PROFIT THERE WILL BE BOTH UNABSORBED DEPRECIATION AND BUSINESS LOSS W HICH CAN BE CARRIED FORWARD TO NEXT YEAR. SECTION 115JB(2)(II) PROVIDES FOR WORKING OUT BOOK PROFITS, BROUGHT FORWARD BUSINESS LOSS OR UNABSORBED DEPRECIATION IS TO BE REDUCED AND SUB-CLAUSE (A) PR OVIDES THAT BUSINESS LOSS SHALL NOT INCLUDE DEPRECIATION. THEREFORE, A.O S HOLDING THAT SINCE THERE IS SEPARATE CARRY FORWARD OF UNABSORBED DEPRE CIATION, UNABSORBED DEPRECIATION IS NIL IS WRONG IN LAW AS WELL AS ON FACTS. THE A.O HAS ERRED IN APPLYING DECISION OF SUPREME COURT IN THE CASE OF APPOLLO TYRES 255 ITR 273 (SC)BECAUSE THERE IS NO QUESTION OF RECOMPUTING PROFITS IN THE P & L ACCOUNT BY EXCLUDING DEPRECIAT ION. IT WAS SUBMITTED THAT THE COMPANY HAS BEEN DECLARED AS SICK UNIT BY BIFR AND THEREFORE, THE PROFIT OF THE COMPANY IS NOT LIABLE TO TAX U/S. 115JB(1) EXPLANATION (VII) OF THE I.T. ACT. THE APPLICATION FOR SICK UNI T WAS REGISTERED ON 11-4- 2000 AND 17-3-2002. THE COMPANY HAS BEEN DECLARED S ICK BY BIFR BY ORDER DATED 4-1-2006 AND ON DECLARATION NO OF SICK COMPANY IT RELATES BACK TO THE DATE OF REGISTRATION WHICH FALLS IN A.Y . 2003-04. THE SAME ISSUE IS COVERED BY THE DECISION OF CIT(A) FOR A.Y. 2002-03 WHICH HAS BEEN DECIDED IN FAVOUR OF THE APPELLANT. 4.2 I HAVE CONSIDERED THE SUB MISSIONS OF THE A.R C AREFULLY. THE A.O HAS CONSIDERED THAT BIFR ORDER WAS PASSED ON 4-1-20 06 SO IT CAN NOT RELATE TO THE YEAR UNDER CONSIDERATION WHEREAS ACCO RDING TO THE AR THE APPLICATION OF THE APPELLANT FOR SICK UNIT WAS REGI STERED ON 11-4-2000 AND 17-3-2002 AND ON DECLARATION OF THE APPELLANT A S SICK COMPANY BAY THE BIFR THOUGH THE SAME WAS MADE ON 4-1-2006, IT W OULD RELATE BACK TO THE DATE OF REGISTRATION WHICH FALLS IN A.Y. 200 3-04. I FIND FROM, THE DETAILS FILED BY THE A.R AT PAGE 207 OF THE PAPER B OOK FOR A.Y. 2004-05, WHEREIN SUMMARY RECORD OF THE PROCEEDINGS ON 4.1.20 06 BEFORE BIFR HAVE BEEN RECORDED. AS MENTIONED THEREIN, THE APPEL LANT FILED A REFERENCE WITH BIFR UNDER SECTION 15(1) OF THE SICK INDUSTRIAL COMPANIES ACT, 1985 (SICA) ON 11-4-2000 AND THE DEC ISION TO FILE THE REFERENCE WAS TAKEN IN COMPANYS BOARD OF DIRECTORS MEETING HELD ON 17-2-2000. IT HAS BEEN ALSO MENTIONED THEREIN THAT THE FIRST REFERENCE OF THE COMPANY WAS DISMISSED AS TIME BARRED BY THE BOA RD VIDE ORDER DT. 26-11-2002. VIDE ORDER DATED 8.11.2005 AAIFR REMAND ED THE CASE BACK TO BIFR TO CONSIDER THE CASE OF THE APPELLANT. THEREAFTER THE APPELLANT FILED ANOTHER REFERENCE ON 17.3.2003 IN T HE BIFR. TIN THE ORDER OF BIFR DATED 4.1.2006, IT WAS HELD THAT THE COMPANY HAD BECOME A SICK COMPANY. THE EFFECTIVE DATE FROM WHIC H THE COMPANY ITA NO.465-66, 587-88/AHD/08, 2366/A/09 &CO 56/A/12 A.YS.03-04 TO 05-06 HYNOUP FOOD AND OIL INDS. LTD. V. ITO WD-4(3) ABD PAGE 9 HAS BEEN DECLARED AS SICK HAS NOT BEEN MENTIONED. A S PER EXPLANATION (VII) TO SECTION 115JB OF THE I.T. ACT, THE BOOK PR OFIT SHALL BE REDUCED BY THE AMOUNT OF PROFITS OF THE SICK INDUSTRIAL COMPAN Y FOR THE ASSESSMENT YEAR COMMENCING ON AND FROM THE A.Y RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SAID COMPANY HAS BECOME A SICK INDUSTRIAL COMPANY UNDER SUB SECTION (1) OF SEC. 17 OF THE SICK INDUSTRIAL C OMPANIES ACT, 1985 AND ENDING WITH THE ASSESSMENT YEAR DURING WHICH TH E ENTIRE NET WORTH OF SUCH COMPANY BECOMES EQUAL TO OR EXCEEDS THE ACC UMULATED LOSSES. QUESTION TO BE DECIDED WHETHER FOR THE ASSESSMENT Y EAR RELEVANT TO THE YEAR UNDER CONSIDERATION THE SAID COMPANY HAS BECOM E A SICK INDUSTRIAL COMPANY U/S. 17(1) OF SICA. THE ORDER OF BIFR IS NOT CLEAR AS TO THE DATE AS TO WHEN THE APPELLANT HAS BECOME A S ICK COMPANY. IN VIEW OF NO CLEAR CUT REFERENCE TO THE EFFECTIVE DAT E AND THE ORDER OF BIFR BEING 4.1.2006, AND THE FACT THAT THE REFERENC E OF THE APPELLANT TO BIFR DATED 11.4.2000 WAS REJECTED BY THE BIFR ON 26 .11.2002 AND THE APPELLANT HAS NOT FURNISHED ORDER U/S.17(1) OF SICA BY BIFR AND THE APPELLANT HAS NOT BEEN DECLARED AS A SICK COMPANY U /S. 17(1) OF SICA BY BIFR FOR THE RELEVANT YEAR IN APPEAL, THE A.OS ACTION OF REJECTING THE CLAIM OF THE APPELLANT FOR BENEFIT UNDER CLAUSE (VI I) OF THE EXPLANATION TO SECTION 115JB IS CONFIRMED THIS GROUND IS DISMISSED . LD. CIT(A) HAS RECORDED THAT THE APPLICATION FOR SI CK UNIT WAS REGISTERED ON 11- 04-2000 AND 17-03-2002. THE ASSESSEE-COMPANY HAS BE EN DECLARED SICK BY BIFR BY ORDER DATED 04-01-2006. THE LD. CIT(A) HAS RECORDED THAT IN THE ORDER OF BIFR DATED 04-01-2006, THE EFFECTIVE DATE FROM WHICH THE ASSESSEE- COMPANY HAS BEEN DECLARED AS SICK HAS NOT BEEN MENT IONED. IN THIS VIEW OF THE MATTER AND IN THE INTEREST OF JUSTICE, THIS GRO UND OF ASSESSEES APPEAL IS REMITTED BACK TO THE FILE OF LD. CIT(A) AND ASSESSE E IS DIRECTED TO ESTABLISH THE EFFECTIVE DATE WHEN IT BECAME SICK AS PER THE ORDER OF BIFR DATED 04-01-2006, BECAUSE IT CAN NOT BE DECIDED AS TO WHAT DATE SHALL BE TAKEN AS THE EFFECTIVE DATE FOR THE PURPOSE OF CONSIDERING THE ASSESSEE AS A SICK COMPANY UNDER THE SAME IS SPECIFIED BY BIFR. LD. CIT(A) IS DIRECTED T O DECIDE THIS ISSUE AFRESH AFTER GIVING OPPORTUNITY OF HEARING TO THE ASSESSEE . WE WOULD LIKE TO OBSERVE THAT THE VIEW OF ASSESSING OFFICER AND LD. CIT(A) T HAT EFFECTIVE DATE SHOULD BE 04-01.2006 DOES NOT APPEAR TO BE CONVINCING BECAUSE IN THE PRESENT YEAR AND THE SUBSEQUENT YEARS, WHICH ARE BEFORE US, THE ASSE SSEE COMPLY HAD EARNED HUGE BOOK PROFIT IN EACH YEAR. THEN WHY, A COMPANY WILL BE DECLARED SICK AFTER 2-3 YEARS OF EARNING SUBSTANTIAL BOOK PROFIT. WE FE EL THAT CLARIFICATION SHOULD BE ITA NO.465-66, 587-88/AHD/08, 2366/A/09 &CO 56/A/12 A.YS.03-04 TO 05-06 HYNOUP FOOD AND OIL INDS. LTD. V. ITO WD-4(3) ABD PAGE 10 OBTAINED FROM BIFR ABOUT EFFECTIVE DATE FROM WHICH THE ASSESSEE-COMPANY IS DECLARED SICK BY BIFR. 11. NEXT GROUND IS WITH REGARDS TO ADDITION OF DEFE RRED TAX OF RS.1,25,32,281/- FOR WORKING OUT BOOK PROFIT U/S. 1 15JB OF THE ACT. SINCE THERE IS RETROSPECTIVE AMENDMENT IN THIS REGARD, THIS ISS UE IS DECIDED AGAINST THE ASSESSEE. 12. THE LAST GROUND IS WITH REGARD TO CHARGING OF I NTEREST U/S 234B AND 234C OF THE ACT. THIS ISSUE IS CONSEQUENTIAL. HELD ACCOR DINGLY. 13. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED FOR STATISTICAL PURPOSES. COMING TO REVENUES APPEAL IN ITA NO.587/AHD/2008 ( A.Y.03-04). 14. THE FACTS ARE IDENTICAL AS IN ASSESSEES APPEAL IN ITA NO.465/AHD/2008. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1. THE LD. CIT(A) ERRED IN LAW AND ON THE FACTS OF THE CASE IN DELETING THE ADDITION OF RS.1,58,67,033/- MADE ON ACCOUNT OF EXCESS CLAIM OF PROCESS LOSS. 2. THE LD. CIT(A) ERRED IN LAW AND ON THE FACTS OF THE CASE IN DELETING THE DISALLOWANCE OF INTEREST EXPENSES U/S. 36(1)(II I), PERTAINING TO THE ADVANCE GIVEN TO METAL FORM INDUSTRIES, A SISTER CO NCERN OF THE ASSESSEE. 3. THE LD. CIT(A) ERRED IN LAW AND ON THE FACTS OF THE CASE IN DIRECTING THE ASSESSING OFFICER TO ALLOW SET OFF OF MINIMUM O F BROUGHT FORWARD BUSINESS LOSS OR UNABSORBED DEPRECIATION FOR THE PU RPOSE OF WORKING MAT LIABILITY U/S 115JB. MORE SO, WHEN THE ASSESSEE , IN THE PRINTED ANNUAL ACCOUNTS CARRIED FORWARD ONLY THE BUSINESS L OSS WHEREAS THE DEPRECIATION WAS CLAIMED AS AN EXPENDITURE AND SET OFF AGAINST SALES AND OTHER INCOME. THUS, ONLY UNABSORBED BUSINESS LO SS WAS CARRIED FORWARD WHILE THEE WAS NO UNABSORBED DEPRECIATION. THE SEGREGATION OF DEPRECIATION FROM NET BUSINESS LOSS SHOWN IN THE P& L ACCOUNT AND BALANCE SHEET IS NOT PERMISSIBLE IN VIEW OF THE DEC ISION OF HONBLE SUPREME COURT IN THE CASE OF APOLLO TYRES LTD. 255 ITR 273. AS SUCH, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE STAND OF TH E A.O. ITA NO.465-66, 587-88/AHD/08, 2366/A/09 &CO 56/A/12 A.YS.03-04 TO 05-06 HYNOUP FOOD AND OIL INDS. LTD. V. ITO WD-4(3) ABD PAGE 11 15. FIRST GROUND RELATES TO CLAIM OF PROCESS LOSS. LD. CIT-DR SUBMITTED THAT LD. CIT(A) ERRED IN ALLOWING THE CLAIM OF THE ASSES SEE. 16. ON THE CONTRARY, LD. AR RELIED UPON THE ORDER O F LD CIT(A) AND SUBMITTED THAT PROCESS LOSS HAS BEEN ALLOWED IN EAR LIER YEARS AND HE RELIED UPON THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH CO URT IN ASSESSEES OWN CASE IN TAX APPEAL NO.8 OF 2001 FOR A.Y. 90-91. 17. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIALS AVAILABLE ON RECORD AND THE JUDICIAL PRONOUNCEMENT AS RELIED UPO N BY LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE. LD. CIT(A) HAS DEA LT THIS ISSUE IN PARA-2.1 AND 2.2 OF HIS ORDER, WHICH IS REPRODUCED FOR THE S AKE OF CLARITY:- 2.1 BEFORE ME THE A.R SUBMITTED THAT THE ISSUE OF PROCESS LOSS IS COVERED BY THE DECISIONS OF ITAT, AHMEDABAD IN THE APPELLANTS OWN CASE FOR A.Y. 1987-88 TO 1995-96 AND THE HONBLE IT AT HAS ALLOWED FULL PROCESS LOSS AS CLAIMED BY THE APPELLANT. IT WAS SU BMITTED THAT THE APPELLANT HAS PRODUCED THE STOCK REGISTERS SHOWN DA Y TO DAY PURCHASE, CONSUMPTION, PRODUCTION, OPENING AND CLOSING STOCK DULY CERTIFIED BY THE CIVIL & SUPPLY DEPARTMENT ALONG WITH BOOKS OF ACCOU NTS AND NO DEFECTS HAVE BEEN POINTED OUT BY THE AO. A SURVEY WAS CONDU CTED AT THE FACTORY OF THE APPELLANT IN A.Y. 1994-95 AND STOCK WAS FOUND TO TALLY WITH THE STOCK RECORDS OF THE PENALTY PROCEEDINGS. IN TH E ASSESSMENTS OF A.Y. 1996-97 TO 1998-99 THE A.O HAS ACCEPTED PROCES S LOSS AT 2% ON THE SAME SET OF FACTS. 2.2 I HAVE CONSIDERED THE SUBMISSIONS OF THE AR CAR EFULLY. AS PROCESS LOSS HAS BEEN ALLOWED UPTO 2% BY THE A.O IN A.Y. 19 96-97 TO 1998-99 AND HAS BEEN ALLOWED IN FULL AS CLAIMED BY THE APPE LLANT BY THE ITAT FOR A.Y. 1987-88 TO 1995-96, THE PROCESS LOSS CLAIMED B Y THE APPELLANT AT 1.61% IS FOUND TO BE WITHIN THE REASONABLE LIMIT. T HEREFORE, THE SAME IS ALLOWED AND THE CONSEQUENT ADDITION MADE BY THE A.O IS DELETED. IT IS TRANSPIRED FROM THE RECORD THAT THE ASSESSING OFFICER OBSERVED AS BELOW:- IT IS SEEN FROM THE RECORDS THAT THE TAX APPEAL S FOR A.YRS. 1990-91, 1991-92 AND 1992-93 BEING TAX APPEAL NOS. 8 OF 2001 , 11 OF 2001 AND 13 OF 2001 ARE PENDING BEFORE THE HONBLE HIGH COUR T. ALSO REFERENCE APPLICATION U/S. 256(2) FOR A.YR. 1987-88 HAS BEEN FILED BEFORE THE HONBLE HIGH COURT WHICH IS ALSO PENDING. THE CONTE NTION OF THE ASSESSEE THAT THE PROCESS LOSS FOR A.Y. 1996-97, 19 97-98 AND 1998-99 ITA NO.465-66, 587-88/AHD/08, 2366/A/09 &CO 56/A/12 A.YS.03-04 TO 05-06 HYNOUP FOOD AND OIL INDS. LTD. V. ITO WD-4(3) ABD PAGE 12 HAVE BEEN ACCEPTED @ 2% AND AS SUCH THE PROCESS LOS S SHOULD NOT BE RESTRICTED TO 0.66% CANNOT BE ACCEPTED AS AT THE RE LEVANT TIME, THE APPEALS BEFORE THE HONBLE HIGH COURT AS DISCUSSED ABOVE, WERE NOT FILED AND MAY BE FOR THIS REASON THE AO TOOK HIS OW N VIEW FOR DECIDING THE PROCESS LOSS. AS ON DATE, SINCE THE APPEALS ON THE ISSUE OF PROCESS LOSS ARE PENDING BEFORE THE HONBLE HIGH COURT, IT CANNOT BE SAID THAT THE ISSUE REGARDING PROCESS LOSS HAS BEEN SETTLED I N FAVOUR OF THE ASSESSEE. THE FACT THAT THE HONBLE HIGH COURT HAS ADMITTED THE TAX APPEAL AND ALSO FRAMED THE SUBSTANTIAL QUESTION OF LAW IMPLIES THAT MATTER IS YET TO SETTLE FINALLY. UNDER THE CIRCUMST ANCES, FOR THE YEAR UNDER CONSIDERATION ALSO THE PROCESS LOSS IS RESTRI CTED TO 0.66% AS AGAINST 1.61% CLAIMED BY THE ASSESSEE. NOW, THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF ASSES SEE BY HONBLE JURISDICTIONAL HIGH COURT IN TAX APPEAL NO. 8 OF 20 01 ((SUPRA) FOR A.Y. 1990- 91; TAX APPEAL NO. 11 OF 2001 FOR A.Y. 1991-92 AND TAX APPEAL NO. 13 OF 2001 FOR A.Y. 1992-93. IN THIS VIEW OF THE MATTER, WE DO NOT FIND ANY MERIT INTO THE CONTENTION OF LD. CIT-DR. THIS GROUND OF REVENU ES APPEAL IS DISMISSED. 18. NEXT GROUND IS WITH REGARDS TO DELETION OF DI SALLOWANCE OF INTEREST EXPENSES U/S. 36()(III) OF THE ACT PERTAINING TO AD VANCE TO METAL FORM INDUSTRIES SISTER CONCERN OF THE ASSESSEE. LD. CIT- DR FOR THE REVENUE SUBMITTED THAT LD. CIT(A) HAD ERRED IN DELETING THE DISALLOWANCE AS THE ADVANCES WERE GIVEN FROM THE BORROWED FUNDS OF THE ASSESSEE COULD NOT BE ESTABLISH THAT SUCH FUNDS WERE FOR THE COMMERCIAL E XPEDIENCY AND BUSINESS PURPOSES. 19. ON THE CONTRARY, LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE RELIED UPON THE ORDER OF LD. CIT(A) AND SUBMITTED THAT THE RE IS NO ERROR INTO THE ORDER OF LD. CIT(A). 20. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIALS AVAILABLE ON RECORD. WE FIND THAT LD. CIT(A) IN HIS ORDER HAS OB SERVED THAT THE FRESH ADVANCE HAS BEEN GIVEN TO METAL FORM INDUSTRIES FOR BUSINESS CONSIDERATION AS THE ASSESSEE WAS PURCHASING TINS FROM THE SAID C ONCERN FOR FILLING OIL. ITA NO.465-66, 587-88/AHD/08, 2366/A/09 &CO 56/A/12 A.YS.03-04 TO 05-06 HYNOUP FOOD AND OIL INDS. LTD. V. ITO WD-4(3) ABD PAGE 13 THEREFORE THE ASSESSEE HAS MADE PAYMENT TO THE SAID PARTY FOR PURCHASE OF TIN AS WELL AS ADVANCE TO BUY TIN PLATES TO MANUFAC TURE TINS. THE LD. CIT(A) HAS RETURNED A CATEGORICALLY FINDING THAT THE ADVAN CE HAS BEEN GIVEN TO METAL FORM INDUSTRIES FOR BUSINESS CONSIDERATION. IN VIEW OF THIS MATTER, WE DO FIND ANY INFIRMITY INTO THE ORDER PASSED BY LD. CIT(A) A ND SAME IS UPHELD. THIS GROUND OF REVENUES APPEAL IS DISMISSED. 21. NEXT GROUND IS WITH REGARDS TO ALLOWING SET OFF OF MINIMUM BROUGHT FORWARD OR UNABSORBED DEPRECIATION FOR THE PURPOSE OF MAT U/S. 115JB OF THE ACT. 22. IN VIEW OF CLAUSE (III) OF EXPLANATION-1 TO SEC TION 115JB OF THE ACT, NO INTERFERENCE IS CALLED FOR IN THE ORDER OF LD. CIT( A) ON THIS ISSUE. THIS GROUND OF REVENUES APPEAL IS REJECTED. 23. NEXT GROUNDS NO.4 & 5 ARE GENERAL IN NATURE THE REFORE DO NOT REQUIRE ANY ADJUDICATION. 24. IN THE RESULT, REVENUES APPEAL IS DISMISSED. COMING TO ASSESSEES APPEAL IN ITA NO.466/AHD/2008 25. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL:- 1. THE LEARNED COMMISSIONER OF I. TAX (APPEALS)-VI II, ABAD [CALLED CIT(A)] HAS ERRED IN CONFIRMING PARTLY OUT OF DISAL LOWANCE MADE BY A.O OF THE TOTAL INTEREST OF RS.15,55,427/- DEBITED TO PROFIT & LOSS A/C. U/S. 36(1)(III) [RELATED TO (1) M.B. STOCK HOLDINGS PVT. LTD. (2, MRUBHEE STOCK HOLDINGS PVT. LTD.(3) SNEHBHAR STOCK HOLDINGS PVT. LTD., (4) HYSAFE INVESTMENTS PVT. LTD.(5) MARUTI FIN-CA PVT. LTD. (6 ) HYTAISUN MAGNETICS LD. & (7) NEELU INVESTMENT PVT. LTD.] ON THE GROUND THAT INTEREST BEARING FUNDS WEE USED FOR INTEREST FREE ADVANCES. 2. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING LUMPS UM DISALLOWANCE OF VARIOUS EXPENSES AT RS.10 LAKHS ON ESTIMATED BASIS AGAINST RS.75 LAKHS DISALLOWED BY A.O IN AS MUCH AS BOOKS OF COMP ANY ARE AUDITED ITA NO.465-66, 587-88/AHD/08, 2366/A/09 &CO 56/A/12 A.YS.03-04 TO 05-06 HYNOUP FOOD AND OIL INDS. LTD. V. ITO WD-4(3) ABD PAGE 14 AND ALL VOUCHERS OF EXPS. ARE VERIFIED BY AUDIT AND NO DEFECTS IN VOUCHERS AND BOOKS ARE POINTED OUT BY THEM. 3. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE M AT CHARGES BY AO AND IN NOT ALLOWING DEDUCTION OF PROFIT U/S.115JB(1 ) [EXPLANATION VII OF I.T. ACCT). THE CO. IS SICK UNIT DECLARED BY BIFR . 3.1 THE LEARNED CIT(A) HAS ERRED IN DIRECTING THE A O TO ALLOW LOWER OF THE B/F BUSINESS LOSS AND DEPRECIATION INSTEAD OF A LLOWING THE EXEMPTION AVAILABLE TO SICK UNIT UNDER SICK INDUSTRIAL COMPAN IES ACT, 1985, WHILE COMPUTING BOOK PROFIT. 4. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING WRITT EN BACK OF DEFERRED TAX LIABILITY OF RS.1,25,32,281/- FOR WORKING OUT B OOK PROFIT U/S. 115JB IN AS MUCH AS IT IS NOT LIABILITY FOR TAX PAID OR PAYA BLE, HENCE DO NOT QUALIFY FOR DISALLOWANCE. 5. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING INTER EST CHARGED U/S. 234B & 234C IN AS MUCH AS ASSESSEE DID NOT EXPECT H AT FOR WORKING BOOK PROFIT U/S. 115JB DEDUCTION OF PROFIT OF SICK INDUSTRIAL COMPANY WILL NOT BE ALLOWED TO IT. 26. THE FACTS IN BRIEF ARE THAT CASE WAS TAKEN UP F OR SCRUTINY ASSESSMENT. IT WAS REPORTED BY THE ASSESSING OFFICER THAT ASSESSEE -COMPANY HAD NOT FILED AUDITED REPORT SO A PENALTY OF RS.1 LAKH WAS LEVIED U/S. 271B OF THE ACT ON 14- 09-2005 BY HIM. SUBSEQUENTLY, ASSESSEE FILED REVISE D RETURN ON 04-12-2006 ALONG WITH AUDITED ACCOUNTS I.E. PROFIT AND LOSS AC COUNT AND BALANCE-SHEET BUT NO AUDIT REPORT AS ENVISAGED U/S/ 44AB OF THE ACT W AS FILED. IT WAS OBSERVED BY AO THAT ASSESSEE WAS NOT ABLE TO FILE AUDIT REPO RT EVEN AT THE TIME OF COMPLETION OF ASSESSMENT PROCEEDINGS. THE AO REJECT ED THE BOOKS OF ACCOUNT OF THE ASSESSEE CITING VARIOUS REASONS AND PROCEEDE D TO ESTIMATE INCOME OF THE ASSESSEE U/S. 144 OF THE ACT. THE AO ADDED VARI OUS ADDITIONS TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF SUPPRESSED GP, DISALLOWANCE OF INTEREST EXPENDITURE, DISALLOWANCE OUT OF VARIOUS E XPENSES CLAIMED BY ASSESSEE, DISALLOWANCE OF PROCESS LOSS AND PROCEEDE D TO CHARGE MAT. 27. AGAINST THIS ORDER, ASSESSEE FILED APPEAL BEFOR E LD. CIT(A) WHO AFTER CONSIDERING THE SUBMISSION OF ASSESSEE PARTLY ALLOW ED THE APPEAL. THE ITA NO.465-66, 587-88/AHD/08, 2366/A/09 &CO 56/A/12 A.YS.03-04 TO 05-06 HYNOUP FOOD AND OIL INDS. LTD. V. ITO WD-4(3) ABD PAGE 15 ASSESSEE BEING NOT SATISFIED WITH THE ORDER OF LD. CIT(A) HAS NOW FILED PRESENT APPEAL BEFORE US. 28. THE FIRST GROUND IN THIS APPEAL IS AGAINST THE CONFIRMING PARTLY OUT OF DISALLOWANCE MADE BY ASSESSING OFFICER ON ACCOUNT O F INTEREST EXPENDITURE. LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBM ITTED THAT LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT ADVANCES SO GIVE N TO THE PARTIES IN QUESTION WERE FOR THE BUSINESS PURPOSES. 29. ON THE CONTRARY, LD. CIT-DR SUBMITTED THAT THER E IS A CATEGORICAL FINDING OF LD. CIT(A) THAT ADVANCES IN RESPECT OF M.B. STOC K HOLDING PVT. LTD., MRUBHEE HOLDING PVT. LTD., SNEHBHAR HOLDING PVT. LT D., HYSAFE INVEST PVT. LTD., AND MARUTI FIN CAP IND. WERE NOT FOR BUSINESS PURPOSES. 30. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIALS AVAILABLE ON RECORD. WE FIND THAT LD. CIT(A) HAS RECORDED THE SU BMISSION OF ASSESSEE THAT ADVANCES TO M.B. STOCK HOLDING PVT. LTD., MRUBHEE H OLDING PVT. LTD., SNEHBHAR HOLDING PVT. LTD., HYSAFE INVEST PVT. LTD. , AND MARUTI FIN CAP IND. ARE SISTER-CONCERN OF ASSESSEE AND ALSO FINANCE COM PANY. THE LOANS HAD BEEN GIVEN TO THESE COMPANIES TO INVEST IN SHARES A ND SECURITIES AND FOR GIVING LOANS TO OTHER GROUP COMPANIES WHERE FINANCE WAS REQUIRED TO RUN THE BUSINESS. THE LAW IS WELL SETTLED THAT FOR THE ALLO WANCE OF THE INTEREST EXPENDITURE IN CASE WHERE THE ASSESSEE HAS GIVEN IN TEREST FREE LOAN TO SISTER CONCERN OUT OF BORROWED CAPITAL THE ASSESSEE IS REQ UIRED TO ESTABLISH COMMERCIAL EXPEDIENCY AND THAT SUCH ADVANCES WERE G IVEN FOR THE BUSINESS PURPOSE. THE LD. CIT(A) IN THIS CASE HAS GIVEN A FI NDING OF FACT THAT THE ADVANCE GIVEN TO THE SAID PARTIES WERE NOT FOR COMM ERCIAL EXPEDIENCY AND NOT FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. EVEN B EFORE US LD. AR COULD NOT ESTABLISH THE COMMERCIAL EXPEDIENCY WITH REGARD TO THE ADVANCE GIVEN TO THE AFOREMENTIONED PARTIES. IN THIS VIEW OF THE MATTER, WE DO NOT FIND ANY INFIRMITY ITA NO.465-66, 587-88/AHD/08, 2366/A/09 &CO 56/A/12 A.YS.03-04 TO 05-06 HYNOUP FOOD AND OIL INDS. LTD. V. ITO WD-4(3) ABD PAGE 16 INTO THE ORDER PASSED BY LD. CIT(A). THIS GROUND OF ASSESSEES APPEAL IS DISMISSED. 31. NEXT GROUND IS WITH REGARD TO CONFIRMATION OF D ISALLOWANCE OF VARIOUS EXPENSES AT RS. 10 LAKH ON ESTIMATE BASIS AGAINST R S.70 LAKH DISALLOWED BY ASSESSING OFFICER. 32. LD. AR SUBMITTED THAT THE ACCOUNT OF THE ASSESS EE WAS AUDITED, VOUCHERS ARE FILED AND NO DEFECTS ARE POINTED OUT B Y THE ASSESSING OFFICER. IN SUCH A SITUATION, NO ADDITION WAS CALLED FOR. ON TH E CONTRARY, LD. CIT-DR SUBMITTED THAT THE THERE WAS SPECIFIC DEFECTS POINT ED OUT BY THE AUDITORS THEMSELVES AND THE REVENUE HAS CHALLENGED THE REDUC TION OF DISALLOWANCE IN ITA NO.588/AHD/2008 . 33. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD. IT IS TRANSPIRED FROM THE RECORD THAT ASSES SING OFFICER AS WELL AS LD. CIT(A) HAS MADE THIS ADDITION MERELY ON THE BASIS O F ESTIMATION. IN THIS VIEW OF THIS MATTER, THIS GROUND OF ASSESSEES APPEAL IS REMITTED BACK TO THE FILE OF ASSESSING OFFICER TO VERIFY THE CLAIM OF THE ASSESS EE AND ASSESSEE IS DIRECTED TO PRODUCE ALL THE SUPPORTING EVIDENCES IN SUPPORT OF ITS CLAIM. THIS GROUND OF ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOS E. 34. NEXT GROUND IS WITH REGARD TO CHARGING OF MAT. THE FACTS ARE ALSO IDENTICAL AS IN ITA NO.465/AHD/2008 WITH REGARD TO THIS ISSUE. SINCE THIS ISSUE OF ASSESSEE IS REMITTED BACK TO THE FILE OF LD. CIT (A) IN TERMS OF PARA-10 OF THIS ORDER. WE REMIT BACK THIS ISSUE TO THE FILE OF LD. CIT(A) TO DECIDE AFRESH WITH SIMILAR DIRECTIONS AFTER PROVIDED REASONABLE O PPORTUNITY OF BEING HEARD TO ASSESSEE. THIS GROUND OF ASSESSEES APPEAL IS ALLOW ED FOR STATISTICAL PURPOSES. ITA NO.465-66, 587-88/AHD/08, 2366/A/09 &CO 56/A/12 A.YS.03-04 TO 05-06 HYNOUP FOOD AND OIL INDS. LTD. V. ITO WD-4(3) ABD PAGE 17 34.1 NEXT GROUND IS WITH REGARDS TO ADDITION OF DEF ERRED TAX OF RS.1,25,32,281/- FOR WORKING OUT BOOK PROFIT U/S. 1 55JB OF THE ACT. SINCE THERE IS RETROSPECTIVE AMENDMENT IN THIS REGARD, THIS ISS UE IS DECIDED AGAINST THE ASSESSEE. 35. IN THE RESULT, ASSESSEES APPEAL PARTLY ALLOWED FOR STATISTICAL PURPOSES. COMING TO REVENUES APPEAL ITA NO.588/AHD/2008 A.Y. 04-05. 36. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LD. CIT(A) ERRED IN LAW AND ON THE FACTS OF THE CASE IN DELETING THE ADDITION OF RS.2,54,43,878/- MADE ON ACCOUNT OF LOW G.P 2. THE LD. CIT(A) ERRED IN LAW AND ON THE FACTS OF THE CASE IN DELETING THE DISALLOWANCE OF INTEREST EXPENSES U/S. 36(1)(II I), PERTAINING TO THE ADVANCES GIVEN TO M/S DIAMOND OIL INDUSTRIES PVT. L TD., METAL FORM INDUSTRIES, MARUTI NUTRITIOUS FOOD PVT. LTD AND POL YREE PROCESSORS PVT. LTD. 3. THE LD. CIT(A) ERRED IN LAW AND ON THE FACTS OF THE CASE IN REDUCING THE DISALLOWANCE OF RS.75,00,000/- MADE UNDER VARIO US SECTIONS LIKE 43B, 40A(2)(B) AND 40A(3) TO RS.10,00,000/-. 4. THE LD. CIT(A) ERRED IN LAW AND ON THE FACTS OF THE CASE IN DELETING THE ADDITION OF RS.1,69,12,584/- MADE ON ACCOUNT OF EXCESS CLAIM OF PROCESS LOSS. 5. THE LD. CIT(A) ERRED IN LAW AND ON THE FACTS OF THE CASE IN DIRECTING THE ASSESSING OFFICER TO ALLOW SET OFF OF MINIMUM O F BROUGHT FORWARD BUSINESS LOSS OR UNABSORBED DEPRECIATION FOR THE PU RPOSE OF WORKING MAT LIABILITY U/S. 115JB. MORE SO, WHEN THE ASSESSE E, IN THE PRINTED ANNUAL ACCOUNTS CARRIED FORWARD ONLY THE BUSINESS L OSS WHEREAS THE DEPRECIATION WAS CLAIMED AS AN EXPENDITURE AND SET OFF AGAINST SALES AND OTHER INCOME. THUS, ONLY UNABSORBED BUSINESS LO SS WAS CARRIED FORWARD WHILE THERE WAS NO UNABSORBED DEPRECIATION. THE SEGREGATION OF DEPRECIATION FROM NET BUSINESS LOSS SHOWN IN THE P&L ACCOUNT AND BALANCE SHEET IS NOT PERMISSIBLE IN VIEW OF THEE DE CISION OF HONBLE SUPREME COURT IN THE CASE OF APLLO TYRES LTD. 255 I TR 273. AS SUCH, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE STAND OF TH E A.O. 37. THE FIRST GROUND IS WITH REGARDS TO DELETION ON ACCOUNT OF LOW GP. AT THE OUTSET, IT IS NOTICED THAT REVENUE HAS NOT RAISED A NY GROUND WITH REGARD TO ITA NO.465-66, 587-88/AHD/08, 2366/A/09 &CO 56/A/12 A.YS.03-04 TO 05-06 HYNOUP FOOD AND OIL INDS. LTD. V. ITO WD-4(3) ABD PAGE 18 REJECTION OF BOOKS OF ACCOUNT NOR ANY ADDITIONAL GR OUND HAS BEEN TAKEN IN THIS REGARD AND THEREFORE THIS GROUND OF REVENUES APPEA L IS DISMISSED BECAUSE IF REJECTION OF BOOKS ARE NOT JUSTIFIED AND THIS FINDI NGS OF LD. CIT(A) IS NOT DISALLOWED, NO GP ADDITION CAN BE SUSTAINED. 38. NEXT GROUND OF REVENUES APPEAL REGARDING DELET ION OF INTEREST EXPENSES U/S. 36(1)(III) OF THE ACT. THE FACTS ARE IDENTICAL IN REVENUES APPEAL IN ITA NO.587/AHD/2008. IN TERMS OF PARA-19 OF THIS ORDER THIS GROUND OF REVENUES APPEAL WAS DISMISSED. HENCE, IN THE PRESE NT YEAR ALSO, THIS ISSUE IS DECIDED AS SIMILAR LINE AND THIS GROUND OF REVEN UES APPEAL IS DISMISSED. 39. NEXT GROUND IS WITH REGARDS TO REDUCTION OF DIS ALLOWANCE FROM RS.75 LAKH TO RS.10 LAKH. THIS ISSUE WAS DECIDED BY US AB OVE IN ITA NO.466/AHD/2008 OF ASSESSEES APPEAL WHEREIN THIS ISSUE HAS BEEN R EMITTED BACK TO THE FILE OF ASSESSING OFFICER FOR FRESH DEC ISION. IN THIS VIEW OF THE MATTER, THIS GROUND OF REVENUES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 40. NEXT GROUND IS WITH REGARDS TO DELETING THE ADD ITION MADE ON ACCOUNT OF EXCESS CLAIM OF PROCESS LOSS. 41. THE FACTS ARE IDENTICAL AS IN ITA NO.587/AHD/2008 OF REVENUES APPEAL AND HAS BEEN DEALT IN PARA-15, 16 OF THIS ORDER. HE NCE, RELYING ON OUR DECISION IN ITA NO.587/AHD/2008, THIS GROUND OF REVENUES APPEAL IS REJECTED. 42. NEXT GROUND IS WITH REGARDS TO DIRECTION TO THE ASSESSING OFFICER TO ALLOW SET OFF OF MINIMUM OF BROUGHT FORWARD BUSINESS LOSS OR UNABSORBED DEPRECIATION FOR THE PURPOSE OF WORKING MAT. THE FA CTS ARE IDENTICAL IN ITA NO.587/AHD.2008 OF REVENUES APPEAL WHEREAS IN TERMS OF PARA-22 OF THIS ORDER, THIS GROUND OF REVENUES APPEAL IS REJECTED. 43. IN THE RESULT, REVENUES APPEAL IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. ITA NO.465-66, 587-88/AHD/08, 2366/A/09 &CO 56/A/12 A.YS.03-04 TO 05-06 HYNOUP FOOD AND OIL INDS. LTD. V. ITO WD-4(3) ABD PAGE 19 COMING TO REVENUES APPEAL IN ITA NO.2366/AHD/2009 A.Y.05-06. 44. THE REVENUE HAS RAISED ONLY EFFECTIVE GROUND OF APPEAL:- 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACT S IN DELETING THE ADDITION MADE ON ACCOUNT OF LOSS AND THEREBY ALLOWI NG THE ASSESSEE TO CLAIM PROCESS LOSS AT 1.39%. 45. LD. CIT-DR SUPPORTED THE ORDERS PASSED BY AUTHO RITIES BELOW. ON THE CONTRARY LD. AUTHORIZED REPRESENTATIVE FOR THE ASSE SSEE POINTED OUT THAT THE ASSESSING OFFICER HAS RESTRICTED THE PROCESS LOSS A T 0.66% WHICH HAVE BEEN ALLOWED IN EARLIER YEARS. LD. AR SUBMITTED THAT HON BLE JURISDICTIONAL HIGH COURT HAS DECIDED THIS ISSUE IN ASSESSEES FAVOUR, 46. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL ON RECORD AND JUDGMENT CITED BY THE PARTY. WE HAVE DECIDED TH IS ISSUE IN FAVOUR OF ASSESSEE IN ITA NO.587/AHD/2008 IN RESPECT OF A.Y. 2003-04 OF THE REVENUES APPEAL. THIS ISSUE HAS BEEN DECIDED IN FA VOUR OF ASSESSEE AND AGAINST THE REVENUE IN TERMS OF TAX APPEAL NO. 8 OF 2001 (SUPRA) FOR A.Y. 1990-91; TAX APPEAL NO.11 OF 2001 FOR A.Y. 1991-92 AND TAX APPEAL NO. 13 OF 2001 FOR A.Y. 1992-93 OF HONBLE JURISDICTIONAL HIGH COURT. IN THIS VIEW OF THE MATTER, WE DO NOT FIND ANY MERIT INTO THE CONTE NTION OF THE LD. CIT-DR. THIS GROUND OF REVENUES APPEAL IS DISMISSED. 47. IN THE RESULT, REVENUES APPEAL IS DISMISSED. COMING TO ASSESSEES CO NO.56/AHD/2010 A.Y. 05-06. 48. THE ASSESSEE HAS RAISED THE GROUNDS OF CO AS UN DER:- 1. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF A.O FOR REJECTION OF BOOKS OF ACCOUNTS. 2. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING ACTIO N OF A.O IN REJECTING THE G.P DISCLOSED BY ASSESSEE AND CONFIRMING DISALL OWANCE OF RS.4,19,62,987/- ON ACCOUNT OF LOW G.P. ITA NO.465-66, 587-88/AHD/08, 2366/A/09 &CO 56/A/12 A.YS.03-04 TO 05-06 HYNOUP FOOD AND OIL INDS. LTD. V. ITO WD-4(3) ABD PAGE 20 49. GROUND NO.1 IS WITH REGARD TO REJECTION OF BOOK S OF ACCOUNT. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL O N RECORD. IT HAS BEEN RECORDED BY THE LD. CIT(A) THAT ASSESSEES TURNOVER WAS TO THE TUNE OF RS.122,34,10,701/-. DESPITE THIS TURNOVER, THE ASSE SSEE FAILED TO GET ITS ACCOUNT AUDITED U/S 44AB OF THE ACT AND EXPLANATION OFFERED BY THE LD. AR IS NOT CONVINCING. IT WAS INCUMBENT UPON THE ASSESSEE TO GET THE BOOKS OF ACCOUNT AUDITED. SINCE THE ACCOUNTS WERE NOT AUDITE D, WE DO NOT FIND ANY INFIRMITY INTO THE ORDER PASSED BY LD. CIT(A) CONFI RMING THE ACTION OF ASSESSING OFFICER IN RESPECT OF REJECTION OF BOOKS OF ACCOUNT OF THE ASSESSEE. THIS GROUND OF ASSESSEES CO IS DISMISSED. 50. NEXT GROUND IS WITH REGARD TO CONFIRMING THE DI SALLOWANCE OF RS.4,19,62,987/- ON ACCOUNT OF LOW GP. LD. AUTHORIZ ED REPRESENTATIVE VEHEMENTLY ARGUED THAT AUTHORITIES BELOW HAVE ERRED IN TAKING THE GP AT 4.44% THE AVERAGE RATE OF GP FOR THE LAST 3 YEARS. LD. AR SUBMITTED THAT THERE IS NO BASIS OF TAKING SUCH AN ARBITRARY RATE OF GP. ON THE CONTRARY, LD. CIT-DR SUPPORTED THE ORDERS OF AUTHORITIES BELOW AND VEHEM ENTLY ARGUED THAT ACTION OF AUTHORITIES BELOW ARE JUSTIFIED AND THERE WAS SU FFICIENT BASIS FOR ESTIMATING THE GP DURING THE YEAR UNDER CONSIDERATION AND THER E IS A STEEP FALL IN THE GP AS DECLARED BY THE ASSESSEE. 51. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIALS AVAILABLE ON RECORD. ADMITTEDLY, THERE IS A STEEP FALL INTO THE GP OF THE ASSESSEE. IT HAS TRANSPIRED FROM THE RECORDS THAT DURING THE ASSESSM ENT PROCEEDINGS A.Y. 2001-02 GP WAS AT 5.83%; A.Y. 2002-03 GP WAS 3.46%, A.Y. 2003-04 GP WAS 4.04% AND A.Y. 2004-05 GP WAS 3.17% AND DURING THE YEAR UNDER CONSIDERATION A.Y. 2005-06 GP IS TAKEN AS 1.01%. IT IS UNDISPUTED FACTS THAT THE ACCOUNTS WERE NOT AUDITED. IT HAS BEEN RECORDED BY THE ASSESSING OFFICER THAT DURING THE ASSESSMENT PROCEEDINGS, ASSESSEE HA S NOT ANNEXED COPY OF BALANCE-SHEET ETC. ALONG WITH RETURN OF INCOME AND SAME WAS NOT FURNISHED TILL FINALIZATION OF THE ASSESSMENT. IN THE ABSENCE OF A UDITED BOOKS OF ACCOUNT, IT ITA NO.465-66, 587-88/AHD/08, 2366/A/09 &CO 56/A/12 A.YS.03-04 TO 05-06 HYNOUP FOOD AND OIL INDS. LTD. V. ITO WD-4(3) ABD PAGE 21 WAS NOT POSSIBLE TO DEDUCE A CORRECT FIGURE OF THE PROFIT EARNED BY THE ASSESSEE. IT IS ALSO UNDISPUTED FACT THAT THE GP DU RING THE YEAR UNDER CONSIDERATION IS LEAST IN LAST 5 YEARS. WE ARE NOT CONVINCED WITH THE ARGUMENT OF LD. AR AND HE COULD NOT POINT OUT THE REASONS TH AT PREVENTED THE ASSESSEE- COMPANY TO GET ITS ACCOUNT AUDITED. IN THIS VIEW OF THE FACT, WE DO NOT FIND ANY INFIRMITY INTO THE ORDER PASSED BY LD. CIT(A). THIS GROUND OF ASSESSEES CO IS DISMISSED. 52. IN THE RESULT, ASSESSEES CO IS DISMISSED. 53. IN COMBINED RESULT, ASSESSEES APPEALS IN ITA NO.465-466/AHD/2008 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. REVENU ES APPEALS IN ITA NO.587-588/AHD/2008 & ITA NO.2366/AHD/2009 AND THAT OF ASSESSEES CO 56/AHD/2012 ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE. SD/- SD/- (A.K.GARODIA) (KUL BHARAT) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, *DKP - 31/05/2012 '#$ % & ' ' ' ' ())*+, ())*+, ())*+, ())*+, '-+ '-+ '-+ '-+ / COPY OF ORDER FORWARDED TO:- 1. ',/* 01 / APPELLANT 2. (2301 / RESPONDENT 3. %)4 3 35 / CONCERNED CIT 4. 3 35- ',/* / CIT (A) 5. +7 8/3 ()))4, 3 ',/*/3 ')4, '#$ % / DR, ITAT, AHMEDABAD 6. 8 ;< = >* / GUARD FILE. BY ORDER/ ' , /TRUE COPY/ ?,/# 3 , / 3 ',/*/3 ')4, '#$ % & ITA NO.465-66, 587-88/AHD/08, 2366/A/09 &CO 56/A/12 A.YS.03-04 TO 05-06 HYNOUP FOOD AND OIL INDS. LTD. V. ITO WD-4(3) ABD PAGE 22 STRENGTHEN PREPARATION & DELIVERY OF ORDE RS IN THE ITAT 1) DATE OF TAKING DICTATION 22/05 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE NO 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 23/05, 24/05 4) DATE OF CORRECTION 24/05, 5) DATE OF FURTHER CORRECTION 29/05 6) DATE OF INITIAL SIGN BY MEMBERS 30/05 7) ORDER UPLOADED ON 31/05 8) ORIGINAL DICTATION PAD-PART HAS BEEN ENCLOSED IN THE FILE YES 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 31/05