M/s Dhansar Engg.Co Pvt Ltd, Kolkata V. D.C.I.T CC - XX,kolkata, Kolkata

ITA 467/KOL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4264 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 24-10-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 08-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NIRAJ KUMAR
• Assessee Lawyers: A K TULSYAN; AMIT KUMAR
• Keywords: Depreciation; Search and seizure; Document seized; Additional depreciation; Validity of assessment; Documents seized
• Section: 133A; 153A; 14A; 32; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI K.NARSIMHA CHARY, JUDICIAL MEMBER ITA NO.920-923/KOL/2013 & C.O. NO.04-06/KOL/2016 (A/O ITA NO.920-922/KOL/2013) ASSESSMENT YEARS:2007-08 TO 2010-11 DCIT, CENTRAL CIRCLE-XX, 110, SHANTIPALLI, AAYAKAR BHAVAN POORVA, 5 TH FLOOR, KOLKATA-107 M/S DHANSAR ENGG. CO. PVT. LTD., 46B, R.A.K ROAD, 2 ND FLOOR, KOLKATA-16 [ PAN NO.AABCD 5271 E ] / V/S . / V/S . M/S DHANSAR ENGG. CO. PVT. LTD. 46B, R.A.K. ROAD, 2 ND FLOOR, KOLKATA-16 DCIT, CENTRAL CIRCLE-XX, 110, SHANTIPALLI, AAYAKAR BHAVAN, POORVA, 5 TH FLOOR, KOLKATA-107 /APPELLANT .. /RESPONDENT ITA NO.467-468/KOL/2013 ASSESSMENT YEAR: 2009-10 TO 2010-11 M/S DHANSAR ENGG. CO. PVT. LTD., 46B, R.A.K ROAD, 2 ND FLOOR, KOLKATA-16 [ PAN NO.AABCD 5271 E ] / V/S . DCIT, CENTRAL CIRCLE-XX, 110, SHANTIPALLI, AAYAKAR BHAVAN, POORVA, 5 TH FLOOR, KOLKATA-107 /APPELLANT .. /RESPONDENT /BY ASSESSEE SHRI A.K. TULSYAN, CA & SHRI AMIT KUMAR, FCA /BY REVENUE SHRI NIRAJ KUMAR, CIT-DR /DATE OF HEARING 24-10-2016 /DATE OF PRONOUNCEMENT 09-11-2016 ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 2 /O R D E R PER BENCH:- OUT OF THESE SIX APPEALS FOUR BY REVENUE AND TWO CROSS APPEAL TOGETHER WITH THREE CROSS OBJECTION (CO) FILED BY ASSESSEE ARE DI RECTED AGAINST THE DIFFERENT ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)-CENTRAL-III , KOLKATA ( CIT(A) FOR SHORT ) DATED 26.12.2012 & 27.12.2012. ASSESSMENTS WERE FRA MED BY JCIT(OSD)-CC-XX, KOLKATA U/S 143(3)/153C OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDERS DATED 29.12.2011 FOR ASSESSME NT YEARS 2007-08 TO 2010-11 RESPECTIVELY. SHRI NIRAJ KUMR, LD. DEPARTMENTAL REPRESENTATIVE AP PEARED ON BEHALF OF REVENUE AND SHRI A.K.TULSYAN AND SHRI AMIT KUMAR, LD. AUTHORIZE D REPRESENTATIVES APPEARED ON BEHALF OF ASSESSEE. 2. AS FAR AS CROSS OBJECTIONS (CO) FILED BY ASSESSE E CONCERNED, THE FIRST ASPECT TO BE CONSIDERED IS THE CONDONATION OF 1036 DAYS DELAY IN FILING THE ABOVE COS WHICH ARE EXPLAINED AS OWING TO INADVERTENTLY DELAY ON THE PA RT OF ACCOUNTANT OF THE ASSESSEE CONCERN WHO WAS LOOKING AFTER THE INCOME TAX MATTER S OF ASSESSEE. LD. DR RAISED NO OBJECTION. CONSIDERING THE REASONS EXPLAINED IN AFF IDAVITS FILED BY ASSESSEE, WE DEEM IT FIT TO CONDONE THE DELAY IN FILING THE ABOVE COS . WE ADMIT ASSESSEES COS. FIRST WE TAKE UP ASSESSEES CO NO.06/KOL/2016 FOR A .Y.09-10 AND REVENUES APPEAL IN ITA NO.922/KOL/2013 . 3. ASSESSEE IN ITS CO HAS RAISED FOLLOWING GROUND:- 1(I) THAT THE LD. CIT(A) ERRED IN UPHOLDING THE PR OCEEDINGS U/S. 153C OF THE ACT WHICH WAS INITIATED WITHOUT RECORDING OF SATISF ACTION WHICH ARE INCRIMINATING DOCUMENTS. RECORDING OF SATISFACTION IS A PRE-REQUISITE FOR INITIATING PROCEEDINGS U/S. 153C OF THE ACT AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. CALCUTTA KNITWEARS. HE NCE THE INSTANT APPEAL IS LIABLE TO BE DISMISSED ON THIS GROUND. (II) THAT THE LD. CIT(A) ERRED IN NOT CONSIDERING T HE FACT THAT NO INCRIMINATING DOCUMENTS OF ANY NATURE BELONGING TO THE ASSESSEE W AS FOUND FROM THE PREMISES OF THE PARTY SEARCHED I.E. NARESH KUMAR GR OUP. THE ASSESSEE HAS ONLY BUSINESS TRANSACTION WITH SUCH GROUP WHICH ARE RECORDED IN THE BOOKS OF ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 3 NARESH KUMAR GROUP. THIS FACT IS ADMITTED BY THE LD . CIT(A) IN HIS ORDER. HENCE PROCEEDINGS TAKEN U/S. 153C IS BAD IN LAW AND NEED TO BE ANNULLED. (III) THAT THE ACTION OF THE LD. CIT(A) IS NOT IN C ONFORMITY WITH THE CIRCULAR NO. 24/2015 DT. 31.12.2015 ISSUED BY THE CBDT, WHICH SP ECIFICALLY MANDATES FOR RECORDING OF SATISFACTION BEFORE INITIATING PROCEED INGS U/S. 153C OF THE ACT. 2. THAT THE APPEAL IN THE INSTANT CASE IS LIABLE TO BE TREATED AS WITHDRAWN AS PER PARA NO-5 OF THE CBDT CIRCULAR NO. 24/2015 DT. 31.1 2.2015. 4. NECESSARY FACTS OF THE CASE ARE THAT A SEARCH AN D SEIZURE OPERATION WAS CONDUCTED U/S. 132 OF THE ACT ON 13.01.2010 AND SUB SEQUENT DATES AT THE PREMISES OF NARESH KUMAR GROUP (NKG FOR SHORT). THE ASSESSEE WA S CLOSELY ASSOCIATED WITH THE NKG. THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND ENGAGED IN THE BUSINESS OF MINING CONTRACTS. THEREFORE A SURVEY U/S. 133A OF T HE ACT CONDUCTED ON ASSESSEE. DURING THE SEARCH AND SEIZURE OPERATION, VARIOUS DO CUMENTS WERE SEIZED FROM THE PREMISES OF NKG BELONGING TO ASSESSEE. ACCORDINGLY, ASSESSEES CASE WAS COVERED U/S.153C OF THE ACT, AND THEREFORE NOTICE U/S. 143( 2)/143(1) OF THE ACT. THE ASSESSMENT IN THE PRESENT CASE WAS MADE U/S. 153C O F THE ACT ON THE GROUND THAT DOCUMENTS SEIZED FROM THE PREMISES OF NKG WERE BELO NGING TO ASSESSEE. DURING THE APPELLATE PROCEEDINGS, ASSESSEE HAS CHALLENGED THE ASSESSMENT PROCEEDINGS MADE U/S. 153C OF THE ACT ON THE FOLLOWING POINTS:- 1) ASSESSEE SUBMITTED THAT DOCUMENTS FOUND AT THE T IME OF SEARCH FROM THE PREMISES OF NKG ARE NOTHING BUT SOME KIND OF ESTIMA TION MADE BY THE NKG. THIS ESTIMATION WAS MADE BY NKG WITH REGARD TO ITS NORMAL COURSE OF BUSINESS WITH ASSESSEE. THE FIGURES MADE BY NKG WERE VERY MU CH REFLECTING IN THE BOOKS OF ASSESSEE WHICH WAS PRODUCED BEFORE AO FOR VERIFICATION. THEREFORE THE PAPERS SEIZED AT THE TIME OF SEARCH CANNOT BE B ASIS FOR THE INITIATION OF PROCEEDINGS UNDER SECTION 153C OF THE ACT. 2) ASSESSEE FURTHER SUBMITTED THAT AO FAILED TO REC ORD SATISFACTION BEFORE THE INITIATION OF PROCEEDINGS U/S 153C OF THE ACT. ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 4 ASSESSEE WITHOUT PREJUDICE TO THE ABOVE FURTHER SUB MITTED THAT THE COMPLETED ASSESSMENT CANNOT BE REOPENED U/S. 153C OF THE ACT WITHOUT FINDING ANY INCRIMINATING EVIDENCE IN RELATION TO THOSE ASSESSMENTS. AS SUCH, NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH OPERATION IN THE CASE OF NKG. HOWEVER, LD. CIT(A) REJECTED THE PLEA OF ASSESSEE BY OBSERVING AS UNDER :- SINCE, THE AO HAS GIVEN SPECIFIC FINDING OF TH OSE DOCUMENTS BELONGING TO THE APPELLANT AND DURING THE APPELLATE PROCEEDINGS THE APPELLANT HAS NOT BEEN ABLE TO PROVE THAT THOSE DOCUMENTS DID NOT BELONG T O IT, THE OBJECTION TO THE INITIATION OF PROCEEDINGS U/S. 153C IS DISMISSED. THE ASSESSEE HAS OBJECTED TO VALIDITY OF INITIATION OF PROCEEDINGS U/S. 153C ON THE GROUND THAT NO REASONS WERE REVEALED BY THE AO FOR INITIATION OF SUCH PROCEEDINGS. I HAVE CHECKED UP THE ASSESSMENT RECOR DS AND FOUND THAT THE REASONS FOR INITIATING PROCEEDINGS U/S. 153C IN THE INSTANT CASE WERE DULY RECORDED BY THE AO. HENCE THIS OBJECTION OF THE APP ELLANT IS ALSO DISMISSED. THE APPELLANT HAS ALSO OBJECTED TO INITIATION OF PR OCEEDINGS U/S. 153C CONTENDING THAT PROVISIONS OF THAT SECTION CAN BE R ESORTED TO FOR ASSESSMENT OF UNDISCLOSED INCOME ONLY IN SEARCH CASES. THE SUBMIS SIONS OF THE APPELLANT IN THIS REGARD HAVE ALREADY BEEN REPRODUCED EARLIER IN THE ORDER. IN THIS REGARD REFERENCE MAY BE MADE TO THE DECISIO N OF HON'BLE DELHI HIGH COURT IN THE CASE OF SSP AVIATION LTD. VS. CIT (WPC NO.309/2011) WHERE THE HON'BLE COURT HAS HELD THAT AT THE TIME WHEN THE AS SESSING OFFICER HAVING JURISDICTION OVER THE SEARCHED PERSON REACHES THE S ATISFACTION THAT THE DOCUMENT BELONGS TO A PERSON OTHER THAN THE SEARCHE D PERSON, IT IS NOT NECESSARY FROM HIM TO ALSO REACH A FIRM CONCLUSION / OPINION THAT THE DOCUMENT SHOWS UNDISCLOSED INCOME BELONGING TO SUCH OTHER PE RSON AND THAT IT IS A MATTER OF ENQUIRY, WHICH IS TO BE CONDUCTED IN THE MANNER PRESCRIBED U/S. 153C. FROM THE DECISION OF HON'BLE DELHI HIGH COURT IT IS CLEAR THAT THE FACT OF CONCEALMENT OR UNDISCLOSED INCOME NEED NOT BE FIRML Y CONCLUDED BEFORE INITIATION OF PROCEEDINGS US. 153C. HENCE THIS OBJE CTION OF THE APPELLANT AGAINST INITIATION OF PROCEEDINGS U/S. 153C IS ALSO DISMISSED. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) ASSESSE E FILED CO BEFORE US. 5. BEFORE US LD. AR SUBMITTED THAT INFORMATION EXTR ACTED BY THE AO FROM THE SEIZED DOCUMENTS ARE THE RELEVANT TRANSACTIONS OF T HE ASSESSEE WITH NRESH KUMAR GROUP (NKG FOR SHORT) AND ALL THESE TRANSACTIONS WE RE DULY RECORDED IN THE BOOKS OF ASSESSEE. THE SEIZED MATERIAL WAS ALSO CONTAINING T HE NAME OF OTHER PARTIES HAVING OTHER TRANSACTIONS WITH NKG. THE AO DID NOT MAKE AN Y ADDITION ON THOSE ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 5 TRANSACTIONS. THIS SHOWS THAT THE SEIZED DOCUMENTS WERE NOT BELONGING TO ASSESSEE. IT WAS THE WORKING PAPERS OF NKG FOR ITS INTERNAL USE WHICH HAS NOTHING TO DO WITH THE ASSESSEE. THEREFORE, THE CASE OF ASSESSEE CANNOT BE RE-OPENED U/S 153C OF THE ACT ON THE BASIS OF THOSE SEIZED DOCUMENTS. LD. AR DREW OU R ATTENTION ON THE SEIZED PAPERS WHICH ARE PLACED ON PAGES 1 TO 13 OF THE PAPER BOOK . HE FURTHER SUBMITTED THAT ALL THE TRANSACTIONS AS OBSERVED FROM THE SEIZED DOCUMENTS WERE DULY DISCLOSED IN THE NORMAL COURSE OF ASSESSEES BUSINESS. LD. AR IN SUPPORT OF ASSESSEES CLAIM HAS DRAWN OUR ATTENTION ON PAGES 111 TO 119 OF THE PAPER BOOK WHE RE THE LEDGER COPY OF NKG AND THE BILLS RAISED BY ASSESSEE TO NKG ARE PLACED. HE REQUESTED THE BENCH TO QUASH THE ORDER OF LD. CIT(A). ON THE OTHER HAND, LD. DR SUBMITTED THAT THE NAME O F ASSESSEE IS VERY MUCH APPEARING ON THE SEIZED DOCUMENTS. HE REQUESTED THE BENCH TO CONFIRM THE ORDER OF LD. CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE SIDE AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE WE FIND TH AT THE MATTER OF THE ASSESSEE WAS PICKED UP UNDER THE PROCEEDINGS OF SECTION 153C OF THE ACT AS THE DOCUMENTS BELONGING TO THE ASSESSEE WERE FOUND DURING THE SEA RCH. FROM THE PERUSAL OF THOSE DOCUMENTS PLACED IN THE PAPER BOOK WE FIND THAT THE SE WERE THE WORKING PAPERS OF NKG. THE NAMES OF OTHER PARTIES WERE ALSO APPEARING IN THOSE PAPERS. THE TRANSACTIONS RECORDED IN THOSE PAPERS WERE DULY REC ORDED IN THE REGULAR BOOKS OF ACCOUNTS. THE LD. DR HAS NOT BROUGHT ANYTHING CONTR ARY TO THE ARGUMENTS OF THE LD. AR. IN OUR CONSIDERED VIEW THE PROVISIONS OF SECTIO N 153C OF THE ACT PROVIDES THAT WHERE THE AO IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNTS OR SEIZED DOCUMENTS B ELONGED TO PERSON OTHER THAN THE PERSON SEARCHED. THEN THE AO SHALL PROCEED AGAINST SUCH OTHER PERSON BY ISSUING NOTICE AND ASSESS OR RE-ASSESS THE INCOME OF SUCH O THER PERSON. AT THIS JUNCTURE WE FIND IMPORTANT TO REPRODUCE THE PROVISIONS OF SECTI ON 153C OF THE ACT WHICH READS AS UNDER:- ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 6 153C .[(1)] [NOTWITHSTANDING ANYTHING CONTAINED IN SECTI ON 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 1 53, WHERE THE ASSESSING OFFICER IS SATISFIED THAT- (A) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ART ICLE OR THING, SEIZED OR REQUISITIONED, BELONGS TO; OR (B) ANY BOOKS OF ACCOUNT OR DOCUMENTS, SEIZED OR REQUIS ITIONED, PERTAINS OR PERTAIN TO, OR ANY INFORMATION CONTAINED THEREIN, R ELATES TO, A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTI ON 153A,M, THEN THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS, SEIZED OR REQUISITI ONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON] [AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH O THER PERSON AND ISSUE NOTICE AND ASSESS OR REASSESS THE INCOME OF THE OTH ER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A, IF, THAT ASSES SING OFFICER IS SATISFIED THAT THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED HAVE A BEARING ON THE DETERMINATION OF THE TOTAL INCOME OF SUCH OTHER PERSON FOR THE RELEVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN SU B-SECTION (1) OF SECTION 153A]:] [ PROVIDED THAT IN CASE OF SUCH OTHER PERSON, THE REFERENCE T O THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKIN G OF REQUISITION UNDER SECTION 132A IN THE SECOND PROVISO TO [SUB-SECTION (1) OF] SECTION 153A SHALL BE CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON:] [ PROVIDED FURTHER THAT THE CENTRAL GOVERNMENT MAY BE RULES MADE BY I T AND PUBLISHED IN THE OFFICIAL GAZETTE, SPECIFY THE CLAS S OR CLASSES OF CASES IN RESPECT OF SUCH OTHER PERSON, IN WHICH THE ASSESSING OFFICE R SHALL NOT BE REQUIRED TO ISSUE NOTICE FOR ASSESSING OR REASSESSING THE TOTAL INCOME FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR REL EVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED OR REQUISITION IS MADE EXCEPT IN CASES WHERE ANY ASSESSMENT OR REASSESSMENT HAS ABATED.] [(2) WHERE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED AS REFERRED TO IN SUB-SECTION (1) HAS OR HAVE BEEN REC EIVED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AFTER THE DUE DATE FOR FURNISHING THE RETURN OF INCOME FOR THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED UNDER SECTION 132 OR REQUISITION IS MADE UNDER SECTION 132A AND I RESPECT OF SUCH ASSESSMENT YEAR- (A) NO RETURN OF INCOME HAS BEEN FURNISHED BY SUCH OTHER PERSON AND NO NOTICE UNDER SUB-SECTION (1) OF SECTION 142 HAS BEEN ISSUE D TO HIM, OR ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 7 (B) A RETURN OF INCOME HAS BEEN FURNISHED BY SUCH O THER PERSON BUT NO NOTICE UNDER SUB-SECTION (2) OF SECTION 143 HAS BEEN SERVE D AND LIMITATION OF SERVING THE NOTICE UNDER SUB-SECTION (2) OF SECTION 143 HAS EXPIRED, OR (C) ASSESSMENT OR REASSESSMENT, IF ANY, HAS BEEN MA DE, BEFORE THE DATE OR RECEIVING THE BOOKS OF ACCOUNT O R DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JU RISDICTION OVER SUCH OTHER PERSON, SUCH ASSESSING OFFICER SHALL ISSUE THE NOTI CE AND ASSESS OR REASSESS TOTAL INCOME OF SUCH OTHER PERSON OF SUCH ASSESSMEN T YEAR IN THE MANNER PROVIDED IN SECTION 153A.] FROM A PLAIN READING OF THE PROVISIONS OF SEC.153C, IT IS CRYSTAL CLEAR THAT THE CONDITION PRECEDENT FOR ISSUE OF NOTICE U/S 153C IS THAT MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENT SEIZED OR REQUISITIONED SHOULD BELONG TO SUCH PERSON. IF THIS REQUIREMENT I S NOT SATISFIED, RECOURSE CANNOT BE HAD TO THE PROVISIONS OF SECTION 153C OF THE ACT. T HE VERY SAME PROVISIONS HAD COME FOR INTERPRETATION BEFORE THE HON'BLE DELHI HIGH CO URT IN THE CASE OF PEPSI FOODS P. LTD. VS. ASST.CIT (367 ITR 112) WHEREIN THE HON'BLE DELHI HIGH COURT OBSERVED AT PAGE 117 AS FOLLOWS: 'ON A PLAIN READING OF SECTION 153C , IT IS EVIDENT THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON MUST BE 'SATISFIED' THAT INTER ALIA ANY DOCUMENT SEIZED OR REQUISITIONED 'BELONGS TO' A PERSON OTHER THAN THE SEARCHED PERSON. IT IS ONLY THEN THAT THE ASSESSING OFFICER OF THE SEARCHED PER SON CAN HANDOVER SUCH DOCUMENT TO THE ASSESSING OFFICER HAVING JURISDICTI ON OVER SUCH OTHER PERSON (OTHER THAN THE SEARCHED PERSON). FURTHERMORE, IT I S ONLY AFTER SUCH HANDING OVER THAT THE ASSESSING OFFICER OF SUCH OTHER PERSO N CAN ISSUE A NOTICE TO THAT PERSON AND ASSESS OR RE- ASSESS HIS INCOME IN ACCOR DANCE WITH THE PROVISIONS OF SECTION 153A . THEREFORE, BEFORE A NOTICE UNDER SECTION 153C CAN BE ISSUED TWO STEPS HAVE TO BE TAKEN. THE FIRST STEP IS THAT THE ASSESSING OFFICER OF THE PERSON WHO IS SEARCHED MUST ARRIVE AT A CLEAR SATIS FACTION THAT A DOCUMENT SEIZED FROM HIM DOES ITA NOS.1475 TO 1481/BANG/2013 NOT BELONG TO HIM BUT TO SOME OTHER PERSON. THE SECOND STEP IS - AFTER SU CH SATISFACTION IS ARRIVED AT - THAT THE DOCUMENT IS HANDED OVER TO THE ASSESSING O FFICER OF THE PERSON TO WHOM THE SAID DOCUMENT 'BELONGS'. IN THE PRESENT CA SES IT HAS BEEN URGED ON BEHALF OF THE PETITIONER THAT THE FIRST STEP ITSELF HAS NOT BEEN FULFILLED. FOR THIS PURPOSE IT WOULD BE NECESSARY TO EXAMINE THE PROVIS IONS OF PRESUMPTIONS AS INDICATED ABOVE. SECTION 132(4A)(I) CLEARLY STIPULATES THAT WHEN INTER ALIA ANY DOCUMENT IS FOUND IN THE POSSESSION OR CONTROL OF A NY PERSON IN THE COURSE OF A SEARCH IT MAY BE PRESUMED THAT SUCH DOCUMENT BELONG S TO SUCH PERSON. IT IS SIMILARLY PROVIDED IN SECTION 292C(1)(I) . IN OTHER WORDS, WHENEVER A DOCUMENT ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 8 IS FOUND FROM A PERSON WHO IS BEING SEARCHED THE NO RMAL PRESUMPTION IS THAT THE SAID DOCUMENT BELONGS TO THAT PERSON. IT IS FOR THE ASSESSING OFFICER TO REBUT THAT PRESUMPTION AND COME TO A CONCLUSION OR 'SATISFACTION' THAT THE DOCUMENT IN FACT BELONGS TO SOMEBODY ELSE. THERE MU ST BE SOME COGENT MATERIAL AVAILABLE WITH THE ASSESSING OFFICER BEFOR E HE/SHE ARRIVES AT THE SATISFACTION THAT THE SEIZED DOCUMENT DOES NOT BELO NG TO THE SEARCHED PERSON BUT TO SOMEBODY ELSE. SURMISE AND CONJECTURE CANNOT TAKE THE PLACE OF ' SATISFACTION ' . . . 'IT IS EVIDENT FROM THE ABOVE SATISFACTION NOTE THA T APART FROM SAYING THAT THE DOCUMENTS BELONGED TO THE PETITIONER AND THAT THE A SSESSING OFFICER IS SATISFIED THAT IT IS A FIT CASE FOR ISSUANCE OF A NOTICE UNDE R SECTION 153C , THERE IS NOTHING WHICH WOULD INDICATE AS TO HOW THE PRESUMPTIONS WHI CH ARE TO BE NORMALLY RAISED AS INDICATED ABOVE, HAVE BEEN REBUTTED BY TH E ASSESSING OFFICER. MERE USE OR MENTION OF THE WORD ' SATISFACTION ' OR THE WORDS 'I AM SATISFIED' IN THE ORDER OR THE NOTE WOULD NOT MEET THE REQUIREMENT OF THE CONCEPT OF SATISFACTION AS USED IN SECTION 153C OF THE SAID ACT. THE SATISFACTION NOTE ITSELF MUST DISPLAY THE REASONS OR BASIS FOR THE CONCLUSION THAT THE AS SESSING OFFICER OF THE SEARCHED PERSON IS SATISFIED THAT THE SEIZED DOCUME NTS BELONG TO A PERSON OTHER THAN THE SEARCHED PERSON. WE ARE AFRAID, THAT GOING THROUGH THE CONTENTS OF THE SATISFACTION NOTE, WE ARE UNABLE TO DISCERN ANY ' SATISFACTION ' OF THE KIND REQUIRED UNDER SECTION 153C OF THE SAID ACT.' 6.1 FURTHER, THE TERM BELONGING TO HAS BEEN INTERPR ETED BY THE HON'BLE SUPREME COURT IN THE CASE OF CWT VS. BISHWANATH CHATTERJEE ORS . 103 ITR 536 AND LATE NAWAB SIR MIR OSMAN ALI KHAN (162 ITR 888) WHEREIN THE HON'BLE SUPREME COURT HELD AS UNDER: 'THE EXPRESSION ' BELONG ' HAS BEEN DEFINED AS FOLLOWS IN THE OXFORD ENGLISH DICTIONARY :--' TO BE THE PROPERTY OR RIGHTFUL POSSESSION OF .' SO IT IS THE PROPERTY OF A PERSON, OR THAT WHICH IS IN HIS POSSE SSION AS OF RIGHT, WHICH IS LIABLE TO WEALTH-TAX. IN OTHER WORDS, THE LIABILITY TO WEALTH- TAX ARISES OUT OF OWNERSHIP OF THE ASSET, AND NOT OTHERWISE. MERE POS SESSION, OR JOINT POSSESSION, UNACCOMPANIED BY THE RIGHT TO, OR OWNER SHIP OF PROPERTY WOULD THEREFORE NOT BRING THE PROPERTY WITHIN THE DEFINIT ION OF 'NET WEALTH' FOR IT WOULD NOT THEN BE AN ASSET 'BELONGING' TO THE ASSESSEE.' THE APEX COURT IN THE CASE OF (LATE) NAWAB SIR MIR OSMAN ALL KHAN [1986] 162 ITR 888 HAS OBSERVED (PAGE 899): 'IN ALL THESE CASES, AS WAS REITERATED BY THE CALCU TTA HIGH COURT IN S. B. (HOUSE AND LAND) P. LTD. V. CIT [1979] 119 ITR 785 THE QUESTION OF OWNERSHIP HAD TO BE CONSIDERED ONLY IN THE LIGHT OF THE PARTI CULAR FACTS OF A CASE. THE PATNA HIGH COURT IN ADDL. CIT V. SAHAY PROPERTIES A ND INVESTMENT CO. P. LTD . [1983] 144 JTR 357 WAS CONCERNED WITH THE CONSTRUCT ION OF THE EXPRESSION ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 9 ' OWNER ' IN SECTION 22 OF THE INCOME-TAX ACT, 1961. THERE, THE ASSESSEE H AD PAID THE CONSIDERATION IN FULL AND HAD BEEN IN EXCLUSIVE AND ABSOLUTE POSSESSION OF THE PROPERTY, AND HAD BEEN EMPOWERED TO DISPOSE OF OR EVEN ALIENATE THE PROPERTY. THE ASSESSEE HAD THE RIGHT TO GET THE CON VEYANCE DULY REGISTERED AND EXECUTED IN ITS FAVOUR, BUT HAD NOT EXERCISED THAT OPTION. THE ASSESSEE WAS NOT ENTITLED TO SAY THAT BECAUSE OF ITS OWN DEFAULT IN HAVING A DEED REGISTERED IN ITS NAME, THE ASSESSEE WAS NOT THE OWNER OF THE PROPERT Y. IN THE CIRCUMSTANCES, IT WAS HELD THAT THE ASSESSEE MUST BE DEEMED TO BE THE OWNER OF THE PROPERTY WITHIN THE MEANING OF SECTION 22 OF THE INCOME-TAX ACT, 1961, AND WAS ASSESSABLE AS SUCH ON THE INCOME FROM THE PROPERTY. ' AGAIN, THE HON'BLE DELHI HIGH COURT IN THE CASE OF PEPSICO INDIA HOLDINGS P. LTD. VS. ACIT (370 ITR 295) FOLLOWING ITS EARLIER DECISION I N THE CASE OF PEPSI FOODS P. LTD (SUPRA) HELD THAT UNLESS IT IS ESTABLISHED THAT THE DOCUMENTS IN QUESTION DO NOT BELONG TO THE SEARCHED PERSON, THE QUESTION OF INVOKING TH E PROVISIONS OF SEC.153C OF THE ACT DOES NOT ARISE. IT WAS ALSO HELD THAT UNLESS SEARCH ED PERSON DISCLAIMS THE DOCUMENTS AS BELONGING TO HIM, PROVISIONS OF SEC.153C DO NOT GET ATTRACTED. IT IS ALSO FURTHER LAID DOWN THAT IN THE SATISFACTION NOTE THERE SHOULD BE SOMETHING TO INDICATE THAT THE SEIZED DOCUMENT DO NOT BELONG TO THE SEARCHED PERSON. THE HON'BLE DELHI HIGH COURT HELD AS FOLLOWS: 'HAVING SET OUT THE POSITION IN LAW IN THE DECISION OF THIS COURT IN THE CASE OF PEPSI FOODS PVT. LTD. (SUPRA), IT MUST BE SEEN AS T O WHETHER THE ASSESSING OFFICER OF THE SEARCHED PERSON (THE JAIPURIA GROUP) COULD BE SAID TO HAVE ARRIVED AT A SATISFACTION THAT THE DOCUMENTS MENTIO NED ABOVE BELONGED TO THE PETITIONERS. FIRST OF ALL WE MAY POINT OUT, ONCE AGAIN, THAT IT IS NOBODY'S CASE THAT THE JAIPURIA GROUP HAD DISCLAIMED THESE DOCUMENTS AS BE LONGING TO THEM. UNLESS AND UNTIL IT IS ESTABLISHED THAT THE DOCUMENTS DO N OT BELONG TO THE SEARCHED PERSON, THE PROVISIONS OF SECTION 153C OF THE SAID ACT DO NOT GET ATTRACTED BECAUSE THE VERY EXPRESSION USED IN SECTION 153C OF THE SAID ACT IS THAT ' WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER T HAN THE PERSON REFERRED TO IN SECTION 153A .... ' IN VIEW OF THIS PHRASE, IT IS NECESSARY THAT BEFO RE THE PROVISIONS OF SECTION 153C OF THE SAID ACT CAN BE INVOKED, THE ASSESSING OFFICER OF THE SEARCHED PERSON MUST BE SATISFIED TH AT THE SEIZED MATERIAL (WHICH INCLUDES DOCUMENTS) DOES NOT BELONG TO THE PERSON R EFERRED ITA NOS.1475 TO 1481/BANG/2013 TO IN SECTION 153A (I.E., THE SEARCHED PERSON). IN THE SATISFACTION NOTE, WHICH IS THE SUBJECT MATTER OF T HESE WRIT PETITIONS, THERE IS NOTHING THEREIN TO INDICATE THAT THE SEIZED DOCUMEN TS DO NOT BELONG TO THE JAIPURIA GROUP. THIS IS EVEN APART FROM THE FACT TH AT, AS WE HAVE NOTED ABOVE, ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 10 THERE IS NO DISCLAIMER ON THE PART OF THE JAIPURIA GROUP INSOFAR AS THESE DOCUMENTS ARE CONCERNED. SECONDLY, WE MAY ALSO OBSERVE THAT THE FINDING OF P HOTOCOPIES IN THE POSSESSION OF A SEARCHED PERSON DOES NOT NECESSARILY MEAN AND IMPLY THAT THEY BELONG TO THE PERSON WHO HOLDS THE ORIGINALS. POSSESSION O F DOCUMENTS AND POSSESSION OF PHOTOCOPIES OF DOCUMENTS ARE TWO SEPARATE THINGS . WHILE THE JAIPURIA GROUP MAY BE THE OWNER OF THE PHOTOCOPIES OF THE DOCUMENT S IT IS QUITE POSSIBLE THAT THE ORIGINALS MAY BE OWNED BY SOME OTHER PERSON. UN LESS IT IS ESTABLISHED THAT THE DOCUMENTS IN QUESTION, WHETHER THEY BE PHOTOCOP IES OR ORIGINALS, DO NOT BELONG TO THE SEARCHED PERSON, THE QUESTION OF INVO KING SECTION 153C OF THE SAID ACT DOES NOT ARISE. THIRDLY, WE WOULD ALSO LIKE TO MAKE IT CLEAR THAT T HE ASSESSING OFFICERS SHOULD NOT CONFUSE THE EXPRESSION ' BELONGS TO WITH THE EXPRESSIONS ' RELATES TO OR ' REFERS TO . A REGISTERED SALE DEED, FOR EXAMPLE, ' BELONGS TO THE PURCHASER OF THE PROPERTY ALTHOUGH IT OBVIOUSLY ' RELATES TO OR ' REFERS TO THE VENDOR. IN THIS EXAMPLE IF THE PURCHASERS PREMISES ARE SEARCHE D AND THE REGISTERED SALE DEED IS SEIZED, IT CANNOT BE SAID THAT IT ' BELONGS TO THE VENDOR JUST BECAUSE HIS NAME IS MENTIONED IN THE DOCUMENT. IN THE CONVERSE CASE IF THE VENDOR'S PREMISES ARE SEARCHED AND A COPY OF THE SALE DEED I S SEIZED, IT CANNOT BE SAID THAT THE SAID COPY ' BELONGS TO THE PURCHASER JUST BECAUSE IT REFERS TO HIM AND HE (THE PURCHASER) HOLDS THE ORIGINAL SALE DEED. IN THIS LIGHT, IT IS OBVIOUS THAT NONE OF THE THREE SETS OF DOCUMENTS - COPIES OF PRE FERENCE SHARES, UNSIGNED LEAVES OF CHEQUE BOOKS AND THE COPY OF THE SUPPLY A ND LOAN AGREEMENT - CAN BE SAID TO 'BELONG TO THE PETITIONER. IN VIEW OF THE FOREGOING DISCUSSION, WE DO NOT FIND THAT THE INGREDIENTS OF SECTION 153C OF THE SAID ACT HAVE BEEN SATISFIED IN THIS CASE. CONSEQUENTLY ALL PROCEEDINGS PURSUANT THERETO STAND QUASHED.' SIMILARLY, THE HON'BLE GUJARAT HIGH COURT IN THE CA SE OF VIJAYBHAI N.CHANDRANI VS. ACIT (333 ITR 436) HELD THAT EVEN IF THERE IS A REF ERENCE TO THE ASSESSEE IN THE SEIZED DOCUMENTS, IT DOES NOT MEAN THAT THE ASSESSEE IS TH E OWNER OF THOSE DOCUMENTS UNLESS THE REVENUE PROVES CONCLUSIVELY THAT THE ASSESSEE I S THE OWNER OF THOSE DOCUMENTS. THE HON'BLE GUJARAT HIGH COURT HELD AS FOLLOWS: 'THUS A CONDITION PRECEDENT FOR ISSUING NOTICE UNDE R S. 153C AND ASSESSING OR REASSESSING INCOME OF SUCH OTHER PERSON, IS THAT TH E MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCO UNT OR DOCUMENTS SEIZED OR REQUISITIONED SHOULD BELONG TO SUCH PERSON. IF THE SAID REQUIREMENT IS NOT SATISFIED, RESORT CANNOT BE HAD TO THE PROVISIONS O F S. 153C OF THE ACT. EXAMINING THE FACTS OF THE PRESENT CASE IN THE LIGH T OF THE AFORESAID STATUTORY SCHEME, IT IS AN ADMITTED POSITION AS EMERGING FROM THE RECORD OF THE CASE, THAT ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 11 THE DOCUMENTS IN QUESTION, NAMELY THE THREE LOOSE P APERS RECOVERED DURING THE SEARCH PROCEEDINGS DO NOT BELONG TO THE PETITIONER. IT MAY BE THAT THERE IS A REFERENCE TO THE PETITIONER IN AS MUCH AS HIS NAME IS REFLECTED IN THE LIST UNDER THE HEADING ' SAMUTKARSH MEMBERS DETAILS ' AND CERTAIN DETAILS ARE GIVEN UNDER DIFFERENT COLUMNS AGAINST THE NAME OF THE PETITIONE R ALONG WITH OTHER MEMBERS, HOWEVER, IT IS NOBODY'S CASE THAT THE SAID DOCUMENT S BELONG TO THE PETITIONER. IT IS NOT EVEN THE CASE OF REVENUE THAT THE SAID THREE DOCUMENTS ARE IN THE HANDWRITING OF THE PETITIONER. IN THE CIRCUMSTANCES , WHEN THE CONDITION PRECEDENT FOR ISSUANCE OF NOTICE IS NOT FULFILLED A NY ACTION TAKEN UNDER S. 153C OF THE ACT STANDS VITIATED. ' THE RATIO THAT CAN BE CULLED OUT FROM THE ABOVE DEC ISIONS IS THAT UNLESS REVENUE ESTABLISHES THAT THE ASSESSEE IS THE OWNER OF THE S EIZED DOCUMENTS, PROVISIONS OF SEC.153C CANNOT BE INVOKED. 6.2 EVEN THE HON'BLE DELHI HIGH COURT AS WELL AS TH E HON'BLE GUJARAT HIGH COURTS HELD THAT MERELY BECAUSE THERE IS A REFERENCE TO TH E NAME OF THE ASSESSEE IN THE SEIZED DOCUMENTS, IT DOES NOT MEAN THAT THE ASSESSEE IS TH E OWNER OF THOSE DOCUMENTS. IN THE SATISFACTORY NOTE RECORDED BY THE AO THERE SHOULD B E SOMETHING TO INDICATE THAT THE SEARCHED PERSON HAD DISCLAIMED THOSE DOCUMENTS AND THEREFORE, AO OF THE SEARCHED PERSON REACHED A CONCLUSION OR SATISFACTION THAT TH E DOCUMENTS DO NOT BELONG TO THE SEARCHED PERSON BUT OTHER THIRD PERSON. THE HON'BLE HIGH COURTS, EVEN WENT TO THE EXTENT OF HOLDING THAT POSSESSION OF DOCUMENTS AND POSSESSION OF PHOTO COPIES OF DOCUMENTS ARE TWO SEPARATE THINGS. IT MAY BE QUITE POSSIBLE THAT PHOTO COPIES MAY BE BELONGING TO THE SEARCHED PERSON AND WHEREAS THE OR IGINAL MAY BE OWNED BY SOME OTHER PERSON. APPLYING THE ABOVE LEGAL POSITION TO THE FACTS OF T HE PRESENT CASE, SATISFACTION NOTE RECORDED BY THE AO READS AS UNDER: 'M/S DHANSAR ENGINEERING CO. PVT. LTD. PAN : AABCD 5271E A.Y 2004-05 TO 09-10 06.07.2011 A SEARCH WAS CONDUCTED U/S. 132 OF THE I NCOME TAX ACT 1961 ON 13.01.2010 IN THE BUSINESS PREMISES OF M/S NARESH K UMAR GROUP OF 9B, WOOD STREET, 5 TH FLOOR, KOLKATA. IN COURSE OF THE SAID SEARCH, CERT AIN INCRIMINATING DOCUMENTS INCLUDING BILLS, VOUCHERS RELATING TO M/S DHANSAR ENGG. CO. (P) LIMITED WERE FOUND AND SEIZED. ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 12 LATER, AT THE TIME OF VERIFICATION OF SUCH DOCUMENT S, IT WAS ASCERTAINED THAT FOLLOWING DOCUMENTS, MARKED AS AVR-2; PAGE 39 & AVR -5; PAGES 8-13 BELONG TO M/S DHANSAR ENGG. CO. PVT. LTD. OF 46B, R AFI AHMED KIDWAI ROAD, KOLKATA-700 016 SO AS PER PROVISION LAID DOWN U/S. 153C OF IT ACT, 1961 READ WITH SECTION 153A OF IT ACT, I AM SATISFIED THAT IT IS A FIT CAS E FOR ISSUE OF NOTICE U/S. 153C OF IT ACT AND TO ASSESS THE ASSESSEES INCOME IN AC CORDANCE WITH THE PROVISION U/S. 153C OF THE IT ACT 1961. THEREFORE, IN ACCORDANCE WITH THE PROVISION SECTION 153C, THE ASSESSEE IS LIABLE TO PREPARE A TRUE AND CORRECT RETURN OF HIS INCOME AND FILE THE SAME TO THIS END TO ENABLE THE UNDERSIGNED TO MAKE AN ASSESSMENT OF ASSESSEES INCOME. AS PER CIT (CENTRAL)-I, KOLKATAS ORDER NO.02/2011- 12 DATED 07.04.2011, THE CASE HAS SINCE BEEN TRANSFERRED TO THIS CIRCLE. ISSUE NOTICE U/S. 153C FOR THE AY 2004-05 TO 2009-1 0. ' 7. FROM THE MATERIAL SEIZED, THOUGH THERE WAS A REF ERENCE TO THE NAME OF THE ASSESSEE-FIRM, EQUALLY THERE ARE NAMES OF OTHER PAR TIES ON THE SAME DOCUMENTS. THERE IS NOTHING TO INDICATE THAT THESE DOCUMENTS WERE DI SCLAIMED BY NKG IN WHOSE CASE SEARCH WAS CONDUCTED. THE AO HAS NOT REFERRED TO AN Y MATERIAL TO INDICATE THAT THE ASSESSEE IS THE OWNER OF THOSE SEIZED DOCUMENTS. TH EREFORE, WE HOLD THAT THE AO WAS NOT JUSTIFIED IN EXERCISING JURISDICTION U/S 153C O F THE ACT. HENCE, THE ASSESSMENTS MADE PURSUANT TO ISSUE OF NOTICE U/S 153C ARE HEREB Y CANCELLED. SINCE WE HAVE HELD THAT THE ASSESSMENTS ARE BAD IN LAW, WE DO NOT FIND IT NECESSARY TO ADJUDICATE OTHER GROUNDS OF APPEALS ON THE MERITS. 8. IN THE RESULT, ASSESSEES CO IS ALLOWED. COMING TO REVENUES APPEAL IN ITA NO.922/KOL/2013 F OR A.Y.09-10 . 9. AT THE OUTSET, ASSESSEES CO NO.06/KOL/2016 WHERE CHALLENGING THE VALIDITY OF ASSESSMENT PROCEEDINGS U/S. 153C OF THE ACT HAS BEE N DECIDED IN FAVOUR OF ASSESSEE AS PROCEEDINGS U/S. 153C HAS BEEN HELD AS INVALID, THEREFORE, GROUNDS RAISED BY REVENUE IN THIS APPEAL DO NOT REQUIRE ANY SEPARATE ADJUDICATION. THEREFORE, GROUNDS OF APPEAL ARE DISMISSED AS NOT MAINTAINABLE. 10. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 13 COMING TO ASSESSEES APPEAL IN ITA NO.467/KOL/2013 FOR A.Y.09-10 . 11. AT THE OUTSET, ASSESSEES CO NO.06/KOL/2016 WHE RE CHALLENGING THE VALIDITY OF ASSESSMENT PROCEEDINGS U/S. 153C OF THE ACT HAS BEE N DECIDED IN FAVOUR OF ASSESSEE AS PROCEEDINGS U/S. 153C HAS BEEN HELD AS INVALID, THEREFORE, GROUNDS RAISED BY ASSESSEE IN THIS APPEAL DO NOT REQUIRE ANY SEPARATE ADJUDICATION. THEREFORE, GROUNDS OF APPEAL ARE DISMISSED AS NOT MAINTAINABLE. 12. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. COMING TO ASSESSEES CO NO.05/KOL/2016 FOR A.Y.08-0 9 AND REVENUES APPEAL IN ITA NO. 921/KOL/2013 FOR A.Y 08-09 . 13. AT THE OUTSET, WE HAVE ALREADY HELD THAT THE AS SESSMENT IS BAD IN LAW IN ASSESSEES CO NO.06/KOL/2016. THE FACTS OF THIS ASS ESSEES CO IS IDENTICAL TO THE CO NO.06/KOL/2016 WHICH WE HAVE ALLOWED IN FAVOUR OF ASSESSEE VIDE P ARA NO.6, 6, 1 6.2 & 7 OF THIS ORDER. FOLLOWING THE SAME, WE ALLOW THI S CO OF THE ASSESSEE IN ITS FAVOUR. 14. COMING TO REVENUES APPEAL IN ITA NO.921/KOL/20 13. AT THE OUTSET, ASSESSEES CO NO.05/KOL/2016 WHERE CHALLENGING THE VALIDITY OF ASSESSMENT PROCEEDINGS U/S. 153C OF THE ACT HAS BEEN DECIDED I N FAVOUR OF ASSESSEE AS PROCEEDINGS U/S. 153C HAS BEEN HELD AS INVALID, THE REFORE, GROUNDS RAISED BY REVENUE IN THIS APPEAL DO NOT REQUIRE ANY SEPARATE ADJUDICA TION. THEREFORE, GROUNDS OF APPEAL ARE DISMISSED AS NOT MAINTAINABLE. 15. IN THE RESULT, ASSESSEES CO IS ALLOWED AND REV ENUES APPEAL IS DISMISSED. COMING TO ASSESSEES CO NO. 04/KOL/2016 FOR A.Y.07- 08 AND REVENUES APPEAL IN ITA NO.920/KOL/2013 16. AT THE OUTSET, WE FIND THAT WE HAVE ALREADY HEL D THAT THE ASSESSMENTS ARE BAD IN LAW IN ASSESSEES CO NO.06/KOL/2016. THE FACTS OF THIS ASSESSEES CO IS IDENTICAL TO THE CO NO.06/KOL/2016 WHICH WE HAVE ALLOWED IN FAVO UR OF ASSESSEE VIDE PARA NO.6, 6.1, 6.2 & 7 OF THIS ORDER. FOLLOWING THE SAME, WE ALLOW THIS CO OF THE ASSESSEE IN ITS FAVOUR. ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 14 17. COMING TO REVENUES APPEAL IN ITA NO.920/KOL/20 13. AT THE OUTSET, ASSESSEES CO NO.04/KOL/2016 WHERE CHALLENGING THE VALIDITY OF ASSESSMENT PROCEEDINGS U/S. 153C OF THE ACT HAS BEEN DECIDED I N FAVOUR OF ASSESSEE AS PROCEEDINGS U/S. 153C HAS BEEN HELD AS INVALID, THE REFORE, GROUNDS RAISED BY REVENUE IN THIS APPEAL DO NOT REQUIRE ANY SEPARATE ADJUDICA TION. THEREFORE, GROUNDS OF APPEAL ARE DISMISSED AS NOT MAINTAINABLE. 18. IN THE RESULT, ASSESSEES CO IS ALLOWED AND THA T OF REVENUES APPEAL IS DISMISSED. COMING TO REVENUES APPEAL IN ITA NO.923/KOL/2013 F OR A.Y.10-11 19. FIRST ISSUE RAISED BY REVENUE IN THIS APPEAL IS THAT LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 6,93,39,027/- ON ACCOUNT OF AD DITIONAL DEPRECIATION U/S. 32(1)(IIA) OF THE ACT WITHOUT APPRECIATING THE FACT THAT THE A SSESSEE IS NOT ENGAGED IN MANUFACTURING OR PRODUCTION OF COAL. THE GROUNDS OF APPEAL RAISED BY REVENUE IN THIS APPEAL ARE REPRODUCED BELOW:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.6,93,39,027/- ON ACCOUNT OF ADDITIO NAL DEPRECIATION U/S. 32(1)(IIA) OF THE ACT, WITHOUT APPRECIATING THE FAC T THAT THE ASSESSEE IS NOT ENGAGED IN MANUFACTURING OR PRODUCTION OF COAL. 1.1 ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) ERRED IN GRANTING RELIEF TO THE ASSESSEE WITHOUT CONSIDERING AND APPR ECIATING THE FACT THAT THE ACTIVITY OF EXTRACTION OF COAL BY THE ASSESSEE ON C ONTRACT BASIS CANNOT BE LABELED AS THE MANUFACTURING OR PRODUCTION OF COAL. 1.2 ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) ERRED IN GRANTING RELIEF OF RS.6,93,39,027/- ON ACCOUNT OF ADDITIONA L DEPRECIATION FOLLOWING THE DECISIONS GIVEN IN THE CONTEXT OF INVESTMENT ALLOWA NCE U/S. 32A(2)(B)(III) OF THE ACT. 20. NECESSARY FACTS OF THE CASE ARE THAT A SEARCH A ND SEIZURE OPERATION WAS CONDUCTED U/S. 132 OF THE ACT ON 13.01.2010 AND SUB SEQUENT DATES AT THE PREMISES OF NKG. THE ASSESSEE WAS CLOSELY ASSOCIATED WITH THE N KG. THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND ENGAGED IN THE BUSINESS OF MINI NG CONTRACTS. THEREFORE A SURVEY U/S. 133A OF THE ACT CONDUCTED ON ASSESSEE. DURING THE SEARCH AND SEIZURE OPERATION, VARIOUS DOCUMENTS WERE SEIZED FROM THE P REMISES OF NKG BELONGING TO ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 15 ASSESSEE. ACCORDINGLY, ASSESSEES CASE WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTICE U/S. 143(2)/143(1) OF THE ACT WAS ISSUED. 21. THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, HAS CLAIMED ADDITIONAL DEPRECIATION ON THE PLANT AND MACHINERY U/S. 32(1)( IIA) ON THE GROUND THAT IT IS ENGAGED IN THE BUSINESS OF MINING AND TRANSPORTATION OF CO AL WHICH IS PRODUCTION ACTIVITY. THUS THE ASSESSEE IS ENTITLED FOR ADDITIONAL DEPREC IATION IN PURSUANCE TO THE PROVISIONS OF SECTION 32(1)(IIA) OF THE ACT. THE ASSESSEE ALSO SUBMITTED THAT HEAVY EARTH MOVING MACHINERIES SUCH AS EXCAVATORS, DOZERS, LOADERS, GR ADERS, DRILLS ETC. WERE USED FOR THE EXTRACTION OF COAL. THUS MINING OF COAL IS A PRODUC TION ACTIVITY AND THEREFORE THE ASSESSEE IS ENTITLED FOR ADDITIONAL DEPRECIATION UN DER SECTION 32(1)(IIA) OF THE ACT. HOWEVER, AO DISREGARDED THE CONTENTION OF THE ASSES SEE THAT IT INVOLVES ANY PRODUCTION ACTIVITY AND THEREFORE ASSESSEE IS NOT E NTITLED FOR ANY ADDITIONAL DEPRECIATION. THE REASONS CITED BY ASSESSING OFFICE R ARE AS FOLLOWS:- 1) COAL IS NATURALLY AVAILABLE WHICH IS EXTRACTED FROM MINES AND TRANSPORTED TO THE OWNERS OF THE MINE. THEREFORE THE ASSESSEE IS MEREL Y ACTING AS A CONTRACTOR EMPLOYED BY THE OWNERS OF THE MINES. THE AO ALSO REVIEWED TH E CONTRACT OF M/S BCCL WHICH SAYS THAT COAL AS AVAILABLE IN ITS EXISTING FORM HA D TO BE EXTRACTED BY REMOVAL OF TOP SOIL ROCK ETC. THEREFORE, THERE IS NO PROCESSING IN VOLVED WHICH COULD BE TERMED AS MANUFACTURING PROCESS . 2) THE ASSESSEE WAS NOT ONLY ENGAGED IN THE MINING ACTIVITIES BUT ALSO PERFORMING WORK OF DIFFERENT NATURE AT DAM SITE, TRANSPORTATIO N SITE, PONDS EVACUATION ETC. THE RECEIPTS FROM DIFFERENT KINDS OF WORK CONTRACTS WER E SUBSTANTIAL TO THE ACTIVITIES OF MINING OF COAL. IN VIEW OF THE ABOVE, AO HELD THAT ASSESSEE IS NOT ENGAGED IN ANY PRODUCTION / MANUFACTURING ACTIVITY AND THEREFORE THE ADDITIONAL DEPRECIATION IS NOT AVAILABLE FOR THE DEDUCTION U/S 32(1)(IIA) OF THE ACT. ACCORDINGL Y, ADDITIONAL DEPRECIATION OF 6,93,39,027/- WAS DISALLOWED AND ADDED TO THE TOTAL INCOME OF ASSESSEE. 22. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A) WHEREAS ASSESSEE SUBMITTED THAT IT IS INVOLVED IN THE MINING AND TRA NSPORTATION OF COAL ACTIVITIES WHICH ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 16 REQUIRES EXTRACTION OF COAL AND OTHER INCIDENTAL PR OCESS. TO ACCOMPLISH THE TASK FOR THE EXTRACTION OF COAL HEAVY EARTH MOVING MACHINERIES W ERE USED AND THE ADDITIONAL DEPRECIATION WAS CLAIMED ONLY ON THOSE PLANT AND MA CHINERIES DIRECTLY INVOLVED IN THE EXTRACTION OF COAL. THE ASSESSEE BEFORE LD. CIT(A) FURTHER SUBMITTED THAT THE ACTIVITY OF MINING OF COAL IS PRODUCTION ACTIVITY AND CENTRA L EXCISE DUTY IS CHARGEABLE ON PRODUCTION OF GOODS. THE COAL IS ONE OF THE EXCISAB LE GOODS AS PER CENTRAL EXCISE ACT, 1985 UNDER CHAPTER-27, HEADING 2701 WHICH IS SUBJEC T TO EXCISE DUTY @ 6% AD VALOREM UNDER THE PROVISION OF EXCISE ACT. THE DUTY CAN BE COLLECTED ON EXCISABLE GOODS BUT EXCLUDING GOODS PRODUCED OR MANUFACTURED IN SPECIAL ECONOMIC ZONE. THE ASSESSEE FURTHER SUBMITTED BEFORE LD. CIT(A) THAT T HE COAL IS BURIED BELOW SEVERAL LAYERS OF SOIL AND ROCK FORMATION AND THE SAME CANN OT BE SOLD OR UTILIZED AS SUCH. FOR MAKING THE COAL MARKETABLE AND SALEABLE IT HAS TO B E PRODUCED FROM THE COAL MINES BY APPLYING SERIES OF MINES ACTIVITIES. LD. CIT(A) AFT ER CONSIDERING THE SUBMISSION OF ASSESSEE HAS DELETED THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER:- THE AO'S POINT OF VIEW IS THAT THE APPELLANT WAS, PRIMA FACIE, A CONTRACTOR AND WAS NOT ENGAGED IN THE PROCESS OF MANUFACTURING OR PRODUCTIONS OF ANY ARTICLE OR THING. SIMILAR ISSUE HAD COME UP FOR CON SIDERATION OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF KHALSA BROTHERS V. CIT (SUPRA), THOUGH IN CONTEXT OF ALLOWANCE OF INVESTMENT ALLOWANCE U/S 32 A(2)(B)(III) OF THE ACT. SECTION 32A(2)(B)(III) PROVIDES FOR ALLOWANCE OF TW ENTY-FIVE PER CENT OF THE COST OF INTER-ALIA, THE MACHINERY OR PLANT TO THE ASSESS EE WHERE THE PLANT OR MACHINERY IS INSTALLED IN AN INDUSTRIAL UNDERTAKING FOR THE PURPOSES OF BUSINESS OF CONSTRUCTION, MANUFACTURE OR PRODUCTION OF ANY A RTICLE OR THING. THEREFORE, THE PREMISE OF ALLOWANCE OF ADDITIONAL DEPRECIATION US/S 32(1)(IIA) AND OF INVESTMENT ALLOWANCE U/S. 32A(2)(B)(III) IS SIMILAR . BOTH THE SECTIONS PROVIDE FOR ALLOWANCE WHERE THE PLANT OR MACHINERY IS INSTA LLED, INTER-ALIA, FOR THE PURPOSE OF BUSINESS OF MANUFACTURE OR PRODUCTION OF ANY ARTICLE OR THING. IN KHALSA BROTHERS V. CIT (SUPRA) THE ASSESSEE WAS ENGAGED IN REMOVING OVERBURDENS AND RAISING OF COAL IN A COLLIERY UNDER THE EASTERN COALFIELDS LTD. UNDER CONTRACT WITH THAT PARTY. THE ASSESSEE IN THA T CASE, CLAIMED THAT IT WAS AN INDUSTRIAL UNDERTAKING INVOLVED IN PRODUCTION OF CO AL THEREFORE, ELIGIBLE FOR INVESTMENT ALLOWANCE U/S.32A OF THE ACT. AS PER THE LETTER OF INTENT IN THAT CASE THE ASSESSEE WAS TO BE PAID AT CERTAIN RATE AS HIRI NG CHARGES OF HEAVY EARTH MOVING MACHINERY AND THE TDS CERTIFICATE ISSUED BY THE COLLIERY SHOWED THAT THE PAYMENTS WERE MADE AGAINST THE CONTRACT FOR HIR ING OF THE MACHINERY. IN THAT CASE THE HON'BLE JURISDICTIONAL HIGH COURT OBS ERVED THAT THE ASSESSEE HAD PURCHASED MACHINERY AND USED IT ITSELF IN ITS WORK AND DID NOT GIVE IT ON HIRE. THE MONEY RECEIVED WAS NOT THE HIRING CHARGES BUT F OR THE WORK DONE UTILIZING ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 17 THE MACHINERY WITH ITS OWN STAFF. OBSERVING THESE F ACTS THE HON'BLE JURISDICTIONAL HIGH COURT HELD THAT THE ASSESSEE WA S ENGAGED FOR THE PURPOSE OF MINING OF COAL AND / OR EXTRACTION OF COAL ON BEHAL F OF THE COLLERIES CONCERNED AND THAT THE ASSESSEE WAS ENGAGED IN PRODUCING COAL . SIMILAR ISSUE WAS CONSIDERED BY THE HON'BLE JURISDI CTIONAL HIGH COURT IN ANOTHER CASE ALSO, VIZ., CIT V. MERCANTILE CONSTRUC TION CO.(1994) 74 TAXMAN 41 (CAL). IN THAT CASE ALSO THE ASSESSEE WAS ENGAGE D IN THE BUSINESS OF INTER- ALIA, RAISING OF COAL IN THE COLLIERIES BELONGING T O EASTERN COALFIELDS LTD. UNDER A CONTRACT WITH EASTERN COALFIELDS LTD. THE ASSESSE E WAS PAID FOR VARIOUS JOBS AT THE RATES STIPULATED IN THE CONTRACT. THE ASSESS EE CLAIMED BEFORE THE AA.O THAT NEW MACHINERY WAS PURCHASED AND USED FOR THE M INING JOB AND IT WAS ENTITLED TO INVESTMENT ALLOWANCE U/S. 32A OF THE AC T. THE AO DISALLOWED THE ASSESSEES CLAIM ON THE GROUND THAT THE ASSESSEE WA S NOT AN INDUSTRIAL UNDERTAKING SINCE IT WAS MERELY LETTING THE MACHINE RY ON HIRE. THE HON'BLE CURT IN THAT CASE HELD THAT RAISING OF COAL AMOUNTS TO PRODUCTION OF THE COAL, THEREFORE, IT WAS NOT CORRECT TO SAY THAT COAL WAS NOT PRODUCED BY THE ASSESSEE AND IT WAS IMMATERIAL WHETHER THE ASSESSEE WAS NOT THE OWNER OF THE MINERAL. FROM PERUSAL OF THE CONTRACT AWARDED BY BCCL TO THE APPELLANT IT IS OBSERVED THAT THE APPELLANT WAS ENGAGED IN EXCAVATION OF BEN CHES IN THE MINES BY USING MECHANICAL MEANS, REMOVING OVERBURDENS, WINNING EXT RACTION OF COAL USING ITS OWN MACHINERY AND MANPOWER AND TRANSPORTATION OF SA ME UNDER A CONTRACT FROM BHARAT COKING COAL LTD. SINCE, IN THE INSTANT CASE ALSO THE APPELLANT WAS E NGAGED IN REMOVING OVERBURDENS, WINNING EXTRACTION OF COAL USING ITS O WN MACHINERY AND MANPOWER AND TRANSPORTATION OF SAME, RESPECTFULLY F OLLOWING THE DECISIONS OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASES OF KHALSA BROTHERS V. CIT (SUPRA) AND CIT V. MERCANTILE CONSTRUCTION CO. (SUP RA) IT IS HELD THAT THE APPELLANT WAS ENGAGED IN PRODUCING COAL, THEREFORE, IS ENTITLED TO ADDITIONAL DEPRECIATION U/S. 32(1)(IIA). THESE GROUNDS RE, HEN CE, ALLOWED. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) REVENUE IS IN APPEAL BEFORE US. 23. BEFORE US LD. DR SUBMITTED THAT ASSESSEE ENGAGE D IN THE EXTRACTION OF COAL AND ITS TRANSPORTATION. THE ASSESSEE CARRIED NO PROCESS ING ON THE COAL AMOUNTING TO MANUFACTURE / PRODUCTION. THE ASSESSEE IS MERELY AC TING AS A SUB-CONTRACTOR. HE FURTHER SUBMITTED THAT THE MACHINERIES WERE UTILIZE D FOR THE ACTIVITIES OTHER THAN MINING OF COAL. LD. DR RELIED ON THE ORDER OF AO AN D PRAYED BEFORE THE BENCH TO CONFIRM THE SAME. ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 18 ON THE OTHER HAND, LD. AR BEFORE US FILED PAPER BOO K WHICH IS RUNNING FROM PAGES 1 TO 395 AND COPY OF AGREEMENT WHICH IS KEPT WITH THE RECORD. HE SUBMITTED THAT MACHINES WHICH WERE USED EXCLUSIVELY FOR THE PURPOS E OF EXTRACTION THE COAL FROM MINES WERE ONLY MADE SUBJECT TO ADDITIONAL DEPRECIA TION U/S. 32(1)(IIA) OF THE ACT. HE IN SUPPORT OF ASSESSEES CLAIM HAS SUBMITTED THAT T HE DEPRECIATION CHART WHICH IS PLACED ON PAGES 344 OF THE PAPER BOOK. THE LD. AR F URTHER SUBMITTED THAT IT IS EXTRACTING COAL WHICH IS BURIED UNDER THE SEVERAL L AYERS OF SOIL AFTER REMOVING THE OVERBURDEN. THIS ACTIVITY CERTAINLY AMOUNTS TO PROD UCTION OF COAL. THEREFORE, THE ASSESSEE IS VERY MUCH ENTITLED FOR ADDITIONAL DEPRE CIATION. LD. AR RELIED ON THE ORDER OF LD. CIT(A). 24. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FOREGOING DISCUSSION, WE FIND THAT THE CRUX OF THE ISSUE BEFORE US ARISE SO AS TO WHETHER THE ACTIVITY OF EXTRACTION O F COAL AMOUNTS TO THE PRODUCTION. IF YES THEN THE ASSESSEE IS ENTITLED FOR ADDITIONAL DE PRECIATION. WE FIND THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF THE JURISDICTIO NAL HIGH COURT IN THE CASE OF CIT VS. G.S. ATWAL & COMPANY IN 254 ITR 592 WHEREIN IT WAS HELD AS UNDER : FOLLOWING AN OLD AND LONGSTANDING DECISION GIVEN B Y CHAKRAVARTTI, C.J. IN 1949, WHICH WAS LATER APPROVED BY THE SUPREME COURT THE DIVISION BENCH OPINED THAT THE WINNING OF COAL IS NO DOUBT PRODUCT ION. AT PARA. 12 OF THE JUDGMENT IT SAID THAT AFTER WINNING COAL SOMETHING THAT WAS NOT THERE COMES UP, AND IT IS, THEREFORE, A PRODUCTION OF COAL. THE DIV ISION BENCH FOLLOWED ITS OWN DECISION IN THE LATER CASE OF KHALSA BROTHERS VS. C IT (1996) 131 CTR (CAL) 380 : (1996) 217 ITR 185 (CAL) : TC S28.2903. MR. BAJOR IA ALSO RELIED ON THE INTERESTING CASE OF CIT VS. SHAAN FINANCE (P) LTD. & ORS. (1998) 146 CTR (SC) 110 : (1998) 231 ITR 308 (SC) : TC S28.2876, W HERE THE SUPREME COURT OPINED THAT A FINANCIER OWNING MACHINERY MIGHT STIL L BE ENTITLED TO INVESTMENT ALLOWANCE EVEN IF THE MACHINERY IS ACTUALLY USED BY ITS LESSEE FOR THE PURPOSE OF PRODUCTION. GOING ON THE LANGUAGE OF SUB-SS. (1) AN D (2) OF THE SAID SECTION, THE SUPREME COURT FOUND OUT ON AN ACCURATE ASSESSMENT O F THE LANGUAGE (WE SAY THIS WITH THE GREATEST OF RESPECT), THAT THE LANGUA GE DOES NOT DISENTITLE THE FINANCIER FOR INVESTMENT ALLOWANCE IN THE ABOVE CIR CUMSTANCES. 6. EVEN CONSIDERING THE LATER SUPREME COURT DECISION GIVEN BY MR. AGARWAL, WE ARE STILL OF THE OPINION THAT THE VIEW TAKEN BY OUR DIVISION BENCH AS TO WINNING OF COAL BEING PRODUCTION IS, WITH DUE RESPE CT, PERFECTLY SOUND AND CONSISTENT WITH COMMONSENSE. WE HAVE ABSOLUTELY NO REASON TO DIFFER FROM THE ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 19 REASONING GIVEN IN THE MERCANTILE CONSTRUCTION CASE (SUPRA) AND WE RESPECTFULLY ADOPT THE SAME. 7. THE POINT THAT THE ASSESSEE IS STILL NOT AN INDUST RIAL UNDERTAKING EVEN THOUGH IT MIGHT BE ENGAGED IN PRODUCTION OF COAL IS, IN OU R OPINION, ALSO TO BE DECIDED AGAINST THE REVENUE. UNDER THE DEFINITION OF AN IND USTRIAL UNDERTAKING GIVEN UNDER S. 33B, EXPLANATION MINING ACTIVITY WOULD BRI NG IN THE ASSESSEE WITHIN THE DEFINITION OF AN INDUSTRIAL UNDERTAKING. BUT WE NEED NOT IMPORT THE DEFINITION OF ANOTHER SECTION TO THE PRESENT ONE, A LTHOUGH ORDINARILY THE DEFINITION GIVEN IN ONE SECTION IN AN ACT CAN BE US ED FOR THE PURPOSES OF ANOTHER SECTION UNLESS THE CONTEXT INDICATES OTHERW ISE. 8. SO FAR AS THE ASSESSEE IS CONCERNED, AN UNDERTAKIN G IT CERTAINLY IS. WE HAVE FOUND NO FACTS FROM WHICH WE CAN OPINE THAT THE ASS ESSEE IS NOT AN INDUSTRIAL UNDERTAKING. ORDINARILY SPEAKING IF A MANUFACTURING ACTIVITY OR AN ARTICLE PRODUCING ACTIVITY IS CARRIED ON, AN UNDERTAKING CA RRYING ON SUCH ACTIVITY IS TO BE CLASSED AS AN INDUSTRIAL ONE. IT MIGHT BE SMALL SCALE OR LARGE SCALE, THAT DOES NOT MATTER MUCH. EVEN IF AN UNDERTAKING IS MANUFACT URING OR PRODUCING ARTICLES, BUT IS STILL NOT TO BE CLASSED AS AN INDU STRIAL ONE FOR THIS, CLEAR INDICATIONS HAVE TO BE GIVEN AS TO WHY THIS DIFFERE NCE SHOULD BE MADE IN CASE OF THE UNDERTAKING IN QUESTION, SO THAT IT STANDS OUT FROM THE GENERAL CATEGORY. WE WERE NOT SHOWN ANY SUCH PARTICULAR DIFFERENCE EXCEP TING THAT THE ASSESSEE WAS ALSO SAID TO CARRY ON TRANSPORT BUSINESS. IT SUFFICES IN THIS REGARD TO MENTION THAT ON THE P RINCIPLE OF SHAAN FINANCE (SUPRA) IF THE ASSESSEE OWNS THE MACHINERY FOR WHIC H INVESTMENT ALLOWANCE IS CLAIMED, AND SUCH MACHINERY IS USED FOR PRODUCTION THEN THE SECTION APPLIES; IT DOES NOT MATTER IF THE USE FOR PRODUCTION IS MADE B Y THE LESSEE OR ONLY IN ONE INDUSTRIAL PART OF THE ASSESSEES BUSINESS UNDERTAK ING. ACCORDINGLY, THE TRANSPORT BUSINESS OF THE ASSESSEE DOES NOT TILT TH E QUESTION ONE WAY OR THE OTHER. THE FACTS OF THE CASE LAWS CITED BY THE AO ARE DIFF ERENT WITH THE FACTS OF THE CASE BEFORE US. THOSE CASE LAWS WERE BASED ON THE DIAMO ND PROCESSING, GRANITES PROCESSING, MARBLE PROCESSING AND ALSO ON THE DEFIN ITION OF THE GOODS ETC. THE ABOVE JUDGMENT BEING OF HONBLE JURISDICTIONAL HIGH COURT AND DIRECT ON THE ISSUE IS BINDING ON US. RESPECTFULLY FOLLOWING THE AFORESAID DECISIO N OF HONBLE CALCUTTA HIGH COURT, WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT(A) IN THIS REGARD. ACCORDINGLY, THE GROUND RAISED BY REVENUE IN THIS REGARD IS DISMISSED. ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 20 25. NEXT ISSUE RAISED BY REVENUE IN THIS APPEAL IS THAT LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY AO FOR 16,69,148/- ON ACCOUNT OF EXCESS DEPRECIATION CLAI M. THE GROUND OF APPEAL RAISED BY REVENUE IN THIS APPE AL IS REPRODUCED BELOW:- 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAD ERRED BOTH IN FACTS AS WELL AS IN LAW IN ALLOWING APPEAL OF THE A SSESSEE BY DELETING THE ADDITION OF RS.16,69,148/- ON ACCOUNT OF EXCESS DE PRECIATION CLAIM, WITHOUT APPRECIATING THE TOTALITY OF FACTS OF THE CASE AND MATERIAL BROUGHT ON RECORD DURING THE CURE OF ASSESSMENT TO CONCLUDE THAT THE RELATED MACHINERY WAS NOT PUT TO USE FOR 180 DAYS OR MORE. THE AO, DURING THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT THE EXCAVATOR WAS PURCHASED DURING THE OF RS.2,22,55,301/- AND PUT TO USE ON 02.10.2009. THEREFORE, AO OPINED THAT THE MACHINE HAS BEEN USED IN THE YEAR U NDER CONSIDERATION FOR LESS THAN 180 DAYS, IT IS THEREFORE, ASSESSEE IS ENTITLED DEP RECIATION @ 7.5% (50% OF 15%). 26. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A) WHEREAS ASSESSEE SUBMITTED THAT SAID MACHINE WAS COMMISSIONED ON 01. 10.2009 AS EVIDENT FROM THE DELIVERY INSPECTION REPORT AND SERVICE REPORT ISSUE D BY VOLVO INDIA P. LTD. AND DELAY REPORT OF HEAVY EARTH MOVING MACHINE. ACCORDINGLY, LD. CIT(A) DELETED THE ADDITION MADE BY AO BY OBSERVING AS UNDER:- FROM THE FACTS DISCUSSED ABOVE IT IS CLEAR THAT TH E EXCAVATOR MACHINE PURCHASED BY THE APPELLANT DURING THE YEAR WAS COMM ISSIONED ON 01.10.2009 AND ACTUALLY USED BY IT ON AND FROM 02.10.2009. EVE N IN THE ASSESSMENT ORDER THE AO HAS NOTED THAT AS THE MACHINE WAS PUT TO USE ON AND FROM 02.10.2009 BUT HE DID NOT ACCEPT THAT FACT CONTENDING THAT NO THIRD PARTY CONFIRMATION IN THAT REGARD HAD BEEN PRODUCED BY THE APPELLANT. I A GREE WITH THE APPELLANTS CONTENTION THAT THE DELIVERY INSPECTION REPORT AND THE SERVICE REPORT WERE THIRD PARTY EVIDENCE WHICH ADEQUATELY PROVED THAT T HE MACHINE WAS COMMISSIONED ON 01.10.2009. AS HAS BEEN HELD IN ACI T V. ASHIMA SYNTEX LTD. (SUPRA), CAPITAL BUS SERVICE (P) LTD. V. CIT (SUPRA ) 123 ITR 404 (DELHI), FOREST INDUSTRIES TRAVENCORE LTD. V. CIT (SUPRA) 51 ITR 329 (KER), CIT V. SHAHBAD CO-OPERATIVE SUGAR MILL LTD. (SUPRA) 56 DTR 414 (P&H) AND CIT V. PREMIER INDUST5RIES (INDIA) LTD. (SUPRA) 170 TAXMAN 407 (MP) EVEN COMMENCEMENT OF TRIAL RUN OF A MACHINERY OR MACHINE KEPT READY TO USE IS TO BE DEEMED TO HAVE BEEN USED WITHIN THE MEANING OF S ECTION 32. THEREFORE, THE SAID EXTRACTOR MACHINE IS HELD TO HAVE BEEN PUT TO USE ON 01.10.2009 BY THE APPELLANT. ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 21 IN LIGHT OF THE ABOVE DISCUSSION, IT IS HELD THAT A PPELLANT IS ENTITLED TO ALLOWANCE OF DEPRECIATION ON THE NEW EXTRACTOR MACHINE AT FUL L RATES SINCE THE SAME WAS PUT TO USE FOR 180 DAYS OR MORE. THIS GROUND OF APP EAL IS, HENCE DECIDED IN FAVOUR OF THE APPELLANT. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) REVENUE IS IN APPEAL BEFORE US. 27. BOTH PARTIES RELIED ON THE ORDER OF AUTHORITIES BELOW AS FAVOURABLE TO THEM. 28. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AT THE OUTSET, WE FIND THAT THE MACHINE WAS PUT TO USE WITH EFFECT FROM 02.10.2009 AS EVIDENT FROM THE DELIVERY INSPECTION REPORT, THE SE RVICE REPORT OF VOLVO INDIA PVT. LTD. AND ALSO FROM THE REPORT OF HEAVY EARTH MOVING MACHINE WHICH ARE PLACED ON PAGES 120 TO 125 OF THE PAPER BOOK. IN THE BACKGROU ND OF THE ABOVE DISCUSSION AND PRECEDENT WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A) AND ACCORDING WE UPHOLD THE SAME. THIS GROUND OF REVENUE IS DISMISSE D. 29. LAST ISSUE RAISED BY REVENUE IN THIS APPEAL IS THAT LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY AO FOR 22,34,617/- ON ACCOUNT OF FESTIVAL CELEBRATION EXP ENSE. THE GROUND OF APPEAL RAISED BY REVENUE IN THIS APPE AL IS REPRODUCED BELOW:- 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAD ERRED BOTH IN FACTS AS WELL AS IN LAW IN ALLOWING APPEAL OF THE A SSESSEE BY DELETING THE ADDITION OF RS.22,34,617/- ON ACCOUNT OF FESTIVAL CELEBRATION EXPENSES, WITHOUT APPRECIATING THE FACT THE ASSESSEE COMPANY HAD LONG PASSED ITS 50 YEARS OF EXISTENCE AND THE ASSESSEE COMPANY HAD MIS -REPRESENTED FACTS TO CLAIM UNJUSTIFIED EXPENDITURE. 30. DURING THE YEAR UNDER CONSIDERATION, ASSESSEE H AS CLAIMED FESTIVAL CELEBRATION EXPENSE FOR 44,69,233/- ON ITS COMPLETION OF 50 YEARS OF EXISTE NCE. HOWEVER, AO, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, PERUSE D ITS OFFICIAL WEBSITE AND FOUND THAT THE ASSESSEE IN THE YEAR UNDER CONSIDERATION H AS NOT COMPLETED 50 YEARS OF ITS EXISTENCE. FURTHER, ON PERUSAL OF MEMORANDUM OF ART ICLE OF ASSOCIATION OF THE COMPANY ASSESSEE WAS INCORPORATED IN THE YEAR 1955 WHICH SHOWS THAT THE 50 YEARS OF ITS EXISTENCE HAS ALREADY PASSED. ACCORDINGLY, AO D ISALLOWED 50% OF FESTIVAL EXPENSES BY OBSERVING THAT ASSESSEE IN THE LAST YEA R CLAIMED OF EXPENSE OF ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 22 20,16,308/- ON ACCOUNT OF FESTIVAL CELEBRATION EXP ENSE. ACCORDINGLY, AO DISALLOWED A SUM OF RS.22,34,617/- AND ADDED TO THE TOTAL INCO ME OF ASSESSEE. 31. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A) WHEREAS ASSESSEE SUBMITTED THAT AO HAS DISALLOWED 50% OF ITS FESTIVA L CELEBRATION EXPENSE ON AD HOC BASIS. THE ASSESSEE CELEBRATED ITS GOLDEN JUBILEE I N MAYSORE WHERE ALL THE STOCKHOLDER OF THE ASSESSEE-COMPANY, SUCH AS PRINCIPALS, FOUNDE RS, SUPPLIERS, BANNERS, EMPLOYEES WERE ALSO INVITED. LD. AR FURTHER SUBMITTED THAT TH E GOLDEN JUBILEE FESTIVAL WAS CELEBRATED ON THE COMPLETION OF ITS FLAGSHIP RAVI U DYOG IT CAME INTO EXISTENCE IN 1972 TO 1973 AND THE FLAGSHIP COMPANY WAS THE STRATEGIC PARTNERS OF THE ASSESSEE-COMPANY. THE EXPENSES WERE INCURRED WHOLLY AND EXCLUSIVELY F OR THE PURPOSE OF BUSINESS OF ASSESSEE. ACCORDINGLY, LD. CIT(A) DELETED THE ADDIT ION MADE BY AO BY OBSERVING AS UNDER:- FROM THE ABOVE IT IS OBSERVED THAT THE DISALLOWANC E OF 50% OF THE EXPENSES DEBITED UNDER THE HEAD FESTIVAL CELEBRATION EXPENS ES ONLY ON ESTIMATE BASIS CONSIDERING THAT THE EXPENDITURE CLAIMED BY T HE APPELLANT WAS EXCESSIVE AND UNREASONABLE AS COMPARED TO THE PRECEDING YEAR. THE APPELLANT SUBMITTED DURING THE APPELLATE PROCEEDINGS THAT THE ENTIRE EX PENDITURE WAS INCURRED FOR CELEBRATING THE ANNIVERSARY OF THE APPELLANT COMPAN Y AND THAT THE ENTIRE EXPENDITURE WAS DULY SUPPORTED BY PROPER BILLS AND VOUCHERS, THEREFORE, NO DISALLOWANCE OUT OF SUCH EXPENSES IS WARRANTED. I AGREE WITH THE SUBMISSION OF THE APPELLANT IN THI S REGARD. THERE IS NO DENIAL THAT EXPENDITURE WAS INCURRED BY THE APPELLANT. THE AO HAS BROUGHT NO EVIDENCE ON RECORD TO SHOW THAT ANY PART OF THE EXP ENDITURE UNDER CONSIDERATION WAS BOGUS OR OF CAPITAL NATURE OR INC URRED FOR THE PURPOSE OTHER THAN WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF THE BUSINESS OF THE APPELLANT. UNDER THE CIRCUMSTANCES I DO NOT FIND ANY JUSTIFICA TION IN THE DISALLOWANCE MADE BY THE AO ESPECIALLY, WHEN THE EXPENDITURE WAS SUPPORTED BY BILLS AND VOUCHERS. THEREFORE, THE DISALLOWANCE OF RS.22,34,6 17/ MADE BY THE AO IS DELETED. THIS GROUND OF APPEAL IS, HENCE, ALLOWED. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) REVENUE IS IN APPEAL BEFORE US. 32. BEFORE US BOTH THE PARTIES RELIED ON THE ORDER OF AUTHORITIES BELOW AS FAVOURABLE TO THEM. ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 23 33. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AT THE OUTSET, WE F IND THAT AO IN THE INSTANT CASE HAS DISALLOWED THE EXPENSE ON ESTIMATED BASIS BY HOLDIN G THAT ASSESSEE HAS NOT COMPLETED ITS 50 YEARS OF EXISTENCE. HOWEVER, WE FIND THAT OR DER OF AO IS SILENT ABOUT THE NATURE OF EXPENSE. IN OUR CONSIDERED VIEW, WHILE AO MAKING THE DISALLOWANCE HAS TO ESTABLISH WHETHER SUCH EXPENSES ARE NOT SUPPORTED W ITH THE EVIDENCE ONCE ASSESSEE HAS INCURRED THE EXPENSE UNDER THE HEAD FESTIVAL EXPEN SE THEN THE SAME CANNOT BE DISALLOWED ON THE BASIS OF NOMENCLATURE OF THE EXPE NSE. IN THIS POINT OF VIEW, AO WAS TO VERIFY WHETHER SUCH EXPENSES WERE INCURRED IN TH E COURSE OF BUSINESS OR NOT, AS THE ORDER OF THE AO HAS NOT BROUGHT OUT THE NATURE OF E XPENSE CLAIMED BY ASSESSEE. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE W ITH THE ORDER OF LD. CIT(A). WE HOLD ACCORDINGLY. THIS GROUND OF REVENUE IS DISMISS ED. 34. IN THE RESULT, REVENUES APPEAL IS DISMISSED. COMING TO ASSESSEES APPEAL IN ITA NO.468/KOL/2013 FOR A.Y 10-11 . 35. SOLE GROUND RAISED BY ASSESSEE READS AS UNDER:- 1. THAT THE LD. CIT(A) ERRED IN CONFIRMING ADDITIO N OF RS.5,97,332/- U/S 14A READ WITH RULE-8D, INVESTMENTS WERE MADE IN THE CLO SELY HELD COMPANIES AND SUCH INVESTMENTS DONT REQUIRE ANY EXPENDITURE. FUR THER, THE ASSESSEE HAD SUFFICIENT OWN FUND FOR THE PURPOSE OF INVESTMENT. HENCE, THE DISALLOWANCE MADE BY THE AO & CONFIRMED BY THE CIT(A) IS WRONG A ND NEEDS TO BE DELETED. 36. THE ASSESSEE HAS SHOWN THE INVESTMENT OF 104,0,504/- THE INCOME FROM THE INVESTMENT WILL NOT FORMING PART OF TAXABLE INCOME OF ASSESSEE. THE AO OBSERVED THAT ASSESSEE HAS INCURRED INTEREST EXPENSE OF 18,80,53,784/- BUT NO DISALLOWANCE ON ACCOUNT OF INTEREST WAS MADE IN THE BOOKS OF ASSES SEE AND THEREFORE AO INVOKING THE PROVISION OF SEC.14A R.W.S. 8D OF THE IT RULES, 196 2 AND DISALLOWED THE INTEREST EXPENSE FOR 5,97,332/- AND ADDED TO THE TOTAL INCOME OF ASSESSE E. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A) WHO HAS CONFIRMED THE ORDER OF AO. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) ASSESSE E CAME IN SECOND APPEAL BEFORE US. ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 24 37. BEFORE US LD. AR SUBMITTED THAT INVESTMENT WAS MADE IN THE GROUP COMPANIES OF ASSESSEE AND THEREFORE NO SUCH DISALLOWANCE IS W ARRANTED. LD. AR IN SUPPORT OF ASSESSEES CLAIM DREW OUR ATTENTION ON PAGES 367 OF THE PAPER BOOK WHERE THE LIST OF INVESTMENT IS PLACED. ON THE OTHER HAND, LD. DR VEHEMENTLY RELIED ON THE ORDER OF AUTHORITIES BELOW. 38. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PAR TIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT VARIOUS TRIBUNALS HAVE HELD THAT THERE SHOULD NOT BE ANY DISALLOWANCE U/S. 14A OF THE ACT IN RELATION TO INVESTMENT HELD BY ASSESSEE AS STRATEGIC INVESTMENT. THEREFORE, WE ARE INCLINED TO REVERSE THE ORDER OF AUTHORITIES BELOW IN RELATION TO INVESTMENT IN EQUITY SHARE WHI CH IS STRATEGIC INVESTMENT MADE BY ASSESSEE. IN THIS CONNECTION, WE RELY IN THE ORDER OF HONBLE LUCKNOW TRIBUNAL IN THE CASE OF U.P. ELECTRONICS CORPORATION LTD. VS. DCIT (2015) 43 CCH 0068. THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED BELOW. INCOMEEXPENDITURE INCURRED IN RELATION TO INCOME NOT INCLUDIBLE IN TOTAL INCOMEAO MADE ADDITION OF RS.40,31,477/- U/S 14A R /W/R 8D HAVING NOTICED THAT ASSESSEE HAD SHOWN DIVIDEND INCOME OF RS.7,52, 120/- WHICH WERE EXEMPTED FROM TAXAO COMPUTED CORRESPONDING EXPENDI TURE AS PER RULE 8D (III) AT RS.40,31,477/- AND MADE ADDITION OF SAMEC IT(A) CONFIRMED DISALLOWANCEHELD, OUT OF TOTAL INVESTMENTS OF RS.8 2,16,45,416/-, INVESTMENT IN SUBSIDIARY COMPANIES WERE OF RS.60,90,10,559/- A S PER BALANCE SHEET OF ASSESSEE COMPANYASSESSEE HAS RAISED SPECIFIC DISPU TE WITH REGARD TO INVOCATION OF PROVISIONS OF RULE 8D WITH CONTENTION THAT BEFORE INVOKING PROVISIONS OF RULE 8D, AO HAS TO RECORD OBJECTIVE S ATISFACTION WITH REGARD TO CORRECTNESS OF ACCOUNTS RELATING TO PROVISIONS OF S ECTION 14ARECORDING OF OBJECTIVE SATISFACTION BY AO WITH REGARD TO CORRECT NESS OF CLAIM OF ASSESSEE IS MANDATORILY REQUIRED IN TERMS OF SECTION 14A(2)MOR EOVER, INVESTMENT WAS MADE IN CASE OF SUBSIDIARY COMPANIES, THEREFORE, IN THOSE CASES DISALLOWANCE UNDER SECTION 1A(2) OF ACT CANNOT BE WORKED OUT UNL ESS AND UNTIL IT IS ESTABLISHED THAT CERTAIN EXPENDITURES ARE INCURRED BY ASSESSEE IN THESE INVESTMENTSKEEPING IN VIEW TOTALITY OF FACTS AND C IRCUMSTANCES OF CASE INVOCATION OF RULE 8D WITHOUT RECORDING OBJECTIVE S ATISFACTION BY AO IS NOT PROPERASSESSEES APPEAL ALLOWED ITA NO.920-923/K/13, 467-468/K/13 & CO 04-06/K/16 A.YS, 07-08 TO 11-12 DCIT CC-XX KOL. VS. M/S DHA NSAR ENGG. CO. PVT. LTD. PAGE 25 IN VIEW OF ABOVE, THE INVESTMENT MADE IN THE GROUP COMPANIES SHALL NOT TO BE CONSIDERED WHILE APPLYING THE PROVISION OF SEC. 14A OF THE ACT. THE AO IS DIRECTED ACCORDINGLY. THE GROUND OF THE APPEAL OF THE ASSESS EE IS ALLOWED IN TERMS OF ABOVE. 39. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. 40. IN COMBINED RESULT, REVENUES APPEALS ITA NO. 920-9 23/KOL/2013 ARE DISMISSED; ASSESSEES APPEALS ITA NO.467 DISMIS SED AS NOT MAINTAINABLE AND ITA 468/KOL/2013 IS ALLOWED; ASSES SEES CO NO.04- 06/KOL/2016 ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 09/11/2016 SD/- SD/- (K.NARSIMHA CHARY) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP, SR.P.S '#$ - 09/11/2016 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-M/S DHANSAR ENGG.CO.PVT. LTD., 46B, RAK R OAD, 2 ND FL, KOL-16 2. /REVENUE-DCIT CC-XX, 110, SHANTIPALLI,AAYAKARBHAVAN ,POORVA, 5 TH KOL-107 3. ##%& ' / CONCERNED CIT 4. ' - / CIT (A) 5. ()* ++%& , %& / DR, ITAT, KOLKATA 6. *,- / GUARD FILE. BY ORDER/ , /TRUE COPY/ / # %&,