ACIT CIR 6(1), MUMBAI V. AARTI DRUGS LTD, MUMBAI

ITA 4816/MUM/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7784 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 02-03-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 20-08-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Capital asset; Depreciation; Double taxation relief; Additional depreciation
• Section: 43B

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI RAJENDRA SINGH(AM) AND SHRI V.D.RAO (JM) ITA NO.4818/M/2009 ASSESSMENT YEAR 2005-06 M/S. AARTI DRUGS LIMITED THE ADDL.CIT RANGE 6(1) , 109-D, MAHENDRA INDL. ESTATE AAYAKAR BHAVAN, M.K .ROAD ROAD NO.29, SION (EAST) MUMBAI 400 020. MUMBAI 400 022. PAN : AAACA 4410 D APPELLANT RESPONDENT ITA NO.4816/M/2009 ASSESSMENT YEAR 2005-06 THE ADDLCIT RANGE 6(1), MUMBAI M/S. AARTI DRUGS L TD. APPELLANT RESPONDENT ASSESSEE BY : SHRI VIJAY MEHTA REVENUE BY : SHRI PAWAN VED O R D E R PER RAJENDRA SINGH (AM) THESE CROSS APPEALS ARE DIRECTED AGAINST THE ORDER DATED 29.5.2009 OF CIT(A) FOR THE ASSESSMENT YEAR 2005-06. THESE ARE B EING DISPOSED OFF BY A SINGLE CONSOLIDATED ORDER FOR THE SAKE OF CONVENIEN CE. 2. WE FIRST TAKE THE APPEAL OF THE ASSESSEE IN ITA NO.4818/M/2009 . IN THIS APPEAL THE ASSESSEE HAS RAISED DISPUTES ON EIG HT DIFFERENT GROUNDS. 2 2.1 THE FIRST DISPUTE IS REGARDING ADDITION OF RS.5 ,90,03,145/- UNDER SECTION 41(1) OF THE INCOME-TAX ACT ON ACCOUNT OF CESSATION OF DEFERRED SALES TAX LIABILITY. THE AO DURING THE ASSESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE UNDER INCENTIVE SCHEMES OF 1988 & 1993 OF THE MAHAR ASHTRA GOVERNMENT HAD TOTAL DEFERRED SALES TAX LIABILITY AT RS.8,43,20,20 3/- WHICH WAS SETTLED DURING THE YEAR ON PAYMENT OF RS.2,94,28,878/- BEING THE N ET PRESENT VALUE OF THE FUTURE SALES TAX LIABILITY. THE ASSESSEE THUS GOT T HE BENEFIT OF RS.5,90,03,145/- UNDER THE MAHARASHTRA GOVERNMENT SCHEME DATED 12.12 .2002 AS PER WHICH THE ASSESSEE WAS ENTITLED TO SETTLE FUTURE DEFERRED SAL ES TAX LIABILITY ON PAYMENT OF NET PRESENT VALUE. THE AO THEREFORE ASKED THE ASSES SEE TO EXPLAIN AS TO WHY THE BENEFIT OF RS.5,90,03,145/- SHOULD NOT BE ASSES SED UNDER SECTION 41(1) AS CESSATION OF LIABILITY. THE ASSESSEE EXPLAINED THAT UNDER THE MAHARASHTRA PACKAGE SCHEME OF INCENTIVES THE ASSESSEE HAD OPTED FOR DEFERRED LOAN SCHEME WHICH WERE PAYABLE AFTER 10 YEARS. IT WAS ALSO SUBM ITTED THAT AS PER THE THIRD PROVISIO TO SECTION 38(4)(A) OF THE MAHARASHTRA SAL ES TAX ACT EFFECTIVE FROM 21.4.87 WHERE A LOAN LIABILITY HAD BEEN RAISED BY S ICOM OR THE DIRECTORATE OF INDUSTRIES OR THE RELEVANT REGIONAL DEVELOPMENT COR PORATION OR THE DIRECTOR OF INDUSTRIES THEN SUCH TAX WOULD BE DEEMED TO HAVE BE EN PAID IN PUBLIC INTEREST. FURTHER AS PER THE 4 TH PROVISO TO SECTION 48(4)(A) INTRODUCED BY THE AMEN DMENT ACT 2002 AND APPLICABLE FROM 1.5.2003 THE ASSESSEE AT ITS OPTION COULD PREMATURELY PAY THE NET PRESENT VALUE OF THE DEFERR ED SALES TAX AND ON MAKING SUCH PAYMENTS THE DEFERRED SALES TAX WOULD BE DEEME D TO HAVE BEEN PAID. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAS OPTED F OR THE DEFERRED LOAN SCHEME AND HAD ACCORDINGLY RECEIVED THE ELIGIBILITY CERTIFICATE IN RESPECT OF THE VARIOUS PRODUCTS MANUFACTURED BY IT. THE SALES TAX DEFERRED LOAN WAS REFLECTED UNDER THE HEAD UNSECURED LOANS IN THE ANNUAL ACCO UNTS OF THE ASSESSEE. THE ASSESSEE ALSO REFERRED TO THE CBDT CIRCULAR NO.496 DATED 25.09.1987 WHICH 3 PROVIDED THAT WHERE A STATE GOVERNMENT MADE AN AMEN DMENT TO THE SALES TAX ACT TO THE EFFECT THAT SALES TAX DEFERRED SHALL BE TREATED AS PAID SALES TAX DEFERRED SHALL BE TREATED AS ACTUALLY PAID AND DEDU CTION WOULD BE ALLOWED UNDER SECTION 43B AS THE STATUTORY LIABILITY SHALL BE TRE ATED AS DISCHARGED THE ASSESSEE ARGUED THAT IT HAD ONLY PAID THE NET PRESE NT VALUE OF THE FUTURE LIABILITY AND THERE WAS NO BENEFIT TO THE ASSESSEE WHICH COULD BE TAXED. THE AO HOWEVER DID NOT ACCEPT THE CONTENTION RAISED AND AS SESSED THE SUM OF RS.5,90,03,143/- AS INCOME OF THE ASSESSEE UNDER SE CTION 41(1) OF THE INCOME- TAX ACT AS CESSATION OF SALES TAX LIABILITY. IN APP EAL THE ASSESSEE SUBMITTED THAT THERE WAS NO CESSATION OR REMISSION OF LIABILITY AN D THEREFORE PROVISIONS OF SECTION 41(1) WOULD NOT APPLY. THE ASSESSEE HAD TRE ATED THE DEFERRED SALES TAX AS LOAN UNDER THE SCHEME OF THE GOVERNMENT AND THE SAME HAD BEEN SHOWN IN THE BOOKS OF ACCOUNT. CIT(A) HOWEVER DID NOT ACCEPT THE EXPLANATION. HE AGREED WITH THE AO THAT SALES TAX INCENTIVE AVAILED BY WAY OF DEFERRAL WAS NEVER CONVERTED INTO INTEREST FREE UNSECURED LOANS. HE THEREFORE CONFIRMED THE ORDER OF THE AO AGGRIEVED BY WHICH THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 2.1.1 BEFORE US THE LEARNED AR FOR THE ASSESSEE AT THE VERY OUTSET SUBMITTED THAT THE ISSUE WAS COVERED BY THE DECISION OF THE S PECIAL BENCH OF THE TRIBUNAL IN CASE OF SULZER INDIA (45 SOT 457). IN THAT CASE ALSO THE SALES TAX PAYABLE BY THE ASSESSEE HAD BEEN TREATED AS LOAN LIABILITY PAY ABLE AFTER 12 YEARS UNDER THE SCHEME FORMULATED BY THE GOVERNMENT AND SUBSEQUENTL Y IN TERMS OF THE 4 TH PROVISO TO SECTION 38(4) OF THE SALES TAX ACT, THE ASSESSEE WAS ALLOWED TO DISCHARGE THE LOAN LIABILITY ON PAYMENT OF NET PRES ENT VALUE. THE DIFFERENCE HAD BEEN TAXED BY THE AO UNDER SECTION 41(1) OF THE INC OME-TAX ACT WHICH WAS NOT UPHELD BY THE SPECIAL BENCH. THE FACTS IN THE PRESE NT CASE ARE IDENTICAL AND 4 THEREFORE FOLLOWING THE DECISION OF THE SPECIAL BEN CH (SUPRA) THE ADDITION MADE SHOULD BE DELETED. THE LEARNED DR ON THE OTHER HAND SUBMITTED THAT CERTAIN ASPECTS HAD NOT BEEN CONSIDERED BY THE SPECIAL BENC H SUCH AS TAXABILITY OF THE INCOME UNDER SECTION 28(1)(IV) OR AS INTEREST INCOM E UNDER SECTION 2(28A) IT WAS ALSO SUBMITTED THAT RIGHT TO PAY THE SALES TAX AFTER 10 YEARS WAS A CAPITAL ASSET IN THE HANDS OF THE ASSESSEE AND THEREFORE EX CHANGE OF SUCH RIGHT BY PRE- PAYMENT WOULD GIVE RISE TO CAPITAL GAIN WHICH WAS T AXABLE. SINCE THESE ASPECTS WERE NOT CONSIDERED BY THE SPECIAL BENCH IT WAS REQ UESTED THE SAME SHOULD BE CONSIDERED AND IF FOUND ACCEPTABLE THE BENCH COULD DEVIATE FROM THE DECISION OF THE SPECIAL BENCH. 2.1.2 IN REPLY THE LEARNED AR FOR THE ASSESSEE STAT ED THAT SIMILAR ARGUMENT HAD BEEN ADVANCED BY THE LEARNED DR IN CASE OF M/S. GRINDWELL NORTON LTD. VS ADDL.CIT IN ITA NO.1603/M/2010 BUT THE TRIBUNAL DID NOT ACCEPT THE CONTENTIONS RAISED. THE TRIBUNAL OBSERVED THAT THERE WAS SPECIF IC ISSUE RAISED BEFORE THE TRIBUNAL AS TO THE TAXABILITY UNDER SECTION 41(1) A ND THEREFORE TAXABILITY UNDER OTHER PROVISIONS COULD NOT BE CONSIDERED. THE ISSUE RAISED WAS IDENTICAL TO THE ISSUE RAISED IN CASE OF SULZER INDIA LTD. (SUPRA) A ND THEREFORE THE ISSUE WAS COVERED BY THE DECISION OF THE TRIBUNAL. ACCORDINGL Y THE TRIBUNAL IN THE ORDER DATED 19.01.11 REJECTED THE ADDITIONAL PLEAS RAISED BY THE LEARNED DR AND DECIDED BY THE APPEAL AS COVERED BY THE DECISION OF THE SPECIAL BENCH (SUPRA). THE LEARNED AR ALSO SUBMITTED THAT THE PLEA OF THE LEARNED DR THAT DEFERRED SALES TAX LIABILITY WAS A CREDIT FACILITY ENJOYED B Y THE ASSESSEE AND THEREFORE GAIN ARISING SHOULD BE TAXED AS INTEREST UNDER SECT ION 2(28A) WAS NOT LEGALLY TENABLE. THE DEFINITION OF INTEREST UNDER SECTION 2 (28A) PROVIDES THAT INTEREST PAYABLE IN ANY MANNER INCLUDING THE INTEREST IN RES PECT OF ANY CREDIT FACILITY WHICH HAD NOT BEEN UTILIZED. THUS THE SAID PROVISIO N WOULD APPLY TO A CASE 5 WHERE THE ASSESSEE HAD OBTAINED A CREDIT FACILITY W HICH HAD NOT BEEN UTILIZED BUT IT HAD TO PAY THE INTEREST FOR OBTAINING THE CR EDIT FACILITY. THE ASSESSEE IN THIS CASE HAD NOT OBTAINED ANY CREDIT FACILITY AND MORE OVER IT HAD NOT MADE ANY PAYMENT TO THE GOVERNMENT FOR GETTING DEFERRED SALES TAX FACILITY. THEREFORE THERE WAS NO QUESTION OF APPLICATION OF P ROVISIONS OF SECTION 2(28A). AS REGARDS THE ARGUMENT OF LEARNED DR THAT THE DEFE RRED SALES TAX LIABILITY WAS A CAPITAL ASSET IN CASE OF THE ASSESSEE IT WAS SUBM ITTED THAT THESE WERE BUSINESS TRANSACTIONS OF THE ASSESSEE AND THEREFORE THERE COULD NOT BE ANY QUESTION OF CHARGING ANY CAPITAL GAIN. 2.1.3 WE HAVE PERUSED THE RECORDS AND CONSIDERED TH E RIVAL CONTENTIONS CAREFULLY. A SPECIFIC DISPUTE HAS BEEN RAISED BEFOR E US AS TO WHETHER THE DIFFERENCE BETWEEN THE DEFERRED SALES TAX PAYABLE B Y THE ASSESSEE AND THE NET PRESENT VALUE PAID COULD BE CHARGED AS INCOME UNDER SECTION 41(1). THE IDENTICAL ISSUE HAD BEEN CONSIDERED BY THE SPECIAL BENCH OF THE TRIBUNAL IN CASE OF SULZER INDIA LTD. (SUPRA) AND THEREFORE IN OUR V IEW THE ISSUE IS FULLY COVERED BY THE SAID DECISION. WE AGREE WITH THE LEARNED AR THAT PROVISIONS OF SECTION 2(28A) ARE NOT APPLICABLE AS THE ASSESSEE IN THIS C ASE HAD NOT PAID ANY INTEREST FOR OBTAINING ANY CREDIT FACILITY. WE ALSO SEE NO C ASE FOR ANY CAPITAL GAIN ARISING BECAUSE THE ASSESSEE HAD PAID ONLY THE PRESENT EQUI VALENT VALUE OF THE FUTURE TAX LIABILITY AND THEREFORE THERE IS NO GAIN. AS RE GARDS THE VARIOUS ASPECTS RELATING TO TAXABILITY OF INCOME UNDER SECTION 41(1 ), THE SPECIAL BENCH HAD DULY CONSIDERED THE SAME AND DECIDED THAT THE AMOUNT COU LD NOT BE TAXED UNDER SECTION 41(1). THE SPECIAL BENCH IN THE SAID CASE H ELD THAT THE BENEFIT OF DEDUCTION ON ACCOUNT OF DEFERRED SALES TAX LIABILIT Y WAS ONLY FOR THE PURPOSE OF SECTION 43B AND NOT UNDER ANY OTHER PROVISIONS OF T HE ACT AS THE CBDT CIRCULAR DATED 25.9.87 CLEARLY PROVIDED THAT THE STATUTORY L IABILITY WAS TREATED AS 6 DISCHARGED FOR THE PURPOSE OF SECTION 43B. THE SPEC IAL BENCH THEREFORE HELD THAT THE FIRST CONDITION OF CHARGEABILITY UNDER SEC TION 41(1) THAT AN ALLOWANCE OR DEDUCTION SHOULD HAVE BEEN MADE IN RESPECT OF ANY L OSS, EXPENDITURE OR TRADING LIABILITY WAS THEREFORE NOT FULFILLED. THE SPECIAL BENCH ALSO HELD THAT THE ASSESSEE HAD PAID ONLY THE PRESENT VALUE OF FUTURE DEFERRED SALES TAX LIABILITY AND THEREFORE THERE WAS NO GAIN TO THE ASSESSEE AND ACCORDINGLY PROVISIONS OF SECTION 41(1) WERE NOT APPLICABLE. IN OUR VIEW THE ISSUE RAISED BEFORE US IS IDENTICAL TO THAT IN CASE OF SULZER INDIA LTD. (SUP RA) WHICH HAS ALREADY BEEN DECIDED BY A LARGER BENCH. WE THEREFORE RESPECTFULL Y FOLLOWING THE DECISION OF THE SPECIAL BENCH IN CASE OF SULZER INDIA LTD (SUPR A) SET ASIDE THE ORDER OF CIT(A) AND ALLOWED THE CLAIM OF THE ASSESSEE. 2.2 THE SECOND DISPUTE IS REGARDING DISALLOWANCE OF PRIOR PERIOD EXPENSES OF RS.39,686/-. THE AO NOTED FROM THE AUDIT REPORT THA T A SUM OF RS.39,686/- RELATING TO STORES AND SPARES AND COOLIE, CARTAGE A ND TRANSPORT CLAIMED BY THE ASSESSEE RELATED TO THE EARLIER YEAR. THE AO THEREF ORE DISALLOWED THE CLAIM. IN APPEAL THE ASSESSEE SUBMITTED THAT THE EXPENDITURE RELATED TO MARCH 2004 FOR WHICH THE LIABILITY HAD CRYSTALLIZED DURING THE YEA R AND THEREFORE THE CLAIM HAD TO BE ALLOWED IN THE MERCANTILE SYSTEM. CIT(A) HOWE VER OBSERVED THAT THERE WAS NO EVIDENCE THAT THE LIABILITY HAD CRYSTALLIZED DURING THIS YEAR. ACCORDINGLY HE CONFIRMED THE DISALLOWANCE AGGRIEVED BY WHICH TH E ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 2.2.1 BEFORE US THE LEARNED AR FOR THE ASSESSEE SUB MITTED THAT THE EXPENDITURE RELATED TO LAST MONTH OF THE PREVIOUS Y EAR BILL FOR WHICH HAD CAME DURING THIS YEAR AND ACCORDINGLY THE CLAIM SHOULD B E ALLOWED. IT WAS ALSO SUBMITTED THAT THE AMOUNT INVOLVED WAS PETTY AND TH EREFORE THE ISSUE WAS NOT 7 WORTH SETTING ASIDE TO THE FILE OF AO. THE LEARNED DR PLACED RELIANCE ON THE ORDER OF CIT(A). 2.2.2 WE HAVE PERUSED THE RECORDS AND CONSIDERED TH E MATTER CAREFULLY. THE DISPUTE IS REGARDING ALLOWABILITY OF EXPENDITURE OF RS.39,686/- RELATING TO STORES AND SPARES, COOLIE, CARTAGE ETC. THE EXPENDITURE WA S INCURRED IN THE LAST MONTH OF PREVIOUS YEAR. THE CLAIM OF THE ASSESSEE IS THAT BILL WAS RECEIVED DURING THE YEAR AND ACCORDINGLY THE LIABILITY CRYSTALLIZED DUR ING THE YEAR. WE HAVE CONSIDERED THE MATTER. IT IS QUITE NORMAL BUSINESS PRACTICE THAT BILLS OF THE PRECEDING MONTH ARE RECEIVED IN SUBSEQUENT MONTH. A MOUNT INVOLVED IS ALSO SMALL. THERE IS NO DISPUTE ABOUT ALLOWABILITY OF TH E CLAIM. IF NOT ALLOWED THIS YEAR IT HAS TO BE ALLOWED IN THE PRECEDING YEAR. WE THEREFORE SEE NO USEFUL PURPOSE BEING SERVED IN DISALLOWING THE CLAIM THIS YEAR AND THEN ALLOWING IN THE IMMEDIATE PRECEDING YEAR. THE ORDER OF CIT(A) IS TH EREFORE SET ASIDE ON THIS POINT AND THE CLAIM OF THE ASSESSEE IS ALLOWED. 2.3 THE THIRD DISPUTE IS REGARDING DISALLOWANCE OF RS.37,25,108/- BEING THE FOREIGN CURRENCY EXPENDITURE SHOWN UNDER THE HEAD OTHER WHICH RELATED TO ADVERTISEMENT SAMPLE CHARGES, PROFESSIONAL FEES ON ACCOUNT OF FCCB, FREIGHT/ DEMURRAGES, SUBSCRIPTION OF MAGAZINE, MARKET SURVEY ETC. WHICH AS PER THE ASSESSEE WAS INCURRED IN THE NORMAL COURSE OF BUSIN ESS. THE AO OBSERVED THAT THE ASSESSEE HAD NOT DEDUCTED TDS UNDER SECTION 40( A)(I) AND THE CLAIM WAS ALSO NOT SUPPORTED BY DOCUMENTARY EVIDENCE. HE THER EFORE DISALLOWED THE CLAIM. IN APPEAL THE ASSESSEE SUBMITTED THAT NO TAX WAS REQUIRED TO BE DEDUCTED EITHER UNDER SECTION 195 OF THE INCOME-TAX ACT OR UNDER THE PROVISIONS OF DOUBLE TAXATION AVOIDANCE AGREEMENT ( DTAA) IT WAS ALSO SUBMITTED THAT THE ASSESSEE HAD OBTAINED CERTIFICAT E FROM CA AS REQUIRED UNDER 8 SECTION 195. HE REFERRED TO THE CIRCULAR NO.759 ISS UED BY THE CBDT WHICH HAD DISPENSED WITH REQUIREMENT OF OBTAINING NO OBJECTIO N CERTIFICATE FROM THE DEPARTMENT AND IN TURN PRESCRIBED THAT CERTIFICATE FROM CA SHOULD BE ACCOMPANIED BY REMITTANCES TO THE NON RESIDENTS. TH E ASSESSEE HAD OBTAINED CERTIFICATE FROM THE CA PRIOR TO MAKING THE PAYMENT . FURTHER IT WAS ALSO POINTED OUT THAT UNDER SECTION 44AB, AUDITOR WAS ALSO REQUI RED TO CERTIFY AMOUNT DISALLOWABLE UNDER SECTION 40(A) WHICH HAD BEEN COM PLIED WITH. THERE WAS THUS NO REQUIREMENT OF TAX DEDUCTION AT SOURCE. CIT(A) H OWEVER DID NOT ACCEPT THE CONTENTIONS RAISED AND OBSERVED THAT THE TDS WAS RE QUIRED TO BE MADE WHEN THERE WAS PROFIT ELEMENT INVOLVED. IT WAS ALSO OBSE RVED BY HIM THAT THE ASSESSEE COULD NOT SHOW UNDER WHICH PROVISIONS OF D TAA TAX WAS NOT REQUIRED TO BE DEDUCTED. HE THEREFORE CONFIRMED THE DISALLOW ANCE AGGRIEVED BY WHICH THE ASSESSEE IS IN APPEAL. 2.3.1 BEFORE US THE LEARNED AR FOR THE ASSESSEE SUB MITTED THAT THE ASSESSEE HAD MADE A DETAILED SUBMISSION BEFORE CIT(A) MAKING OUT A CASE AS TO HOW THE AMOUNTS INVOLVED WAS NOT TAXABLE IN THE HANDS OF TH E FOREIGN PARTY UNDER THE PROVISIONS OF DTAA BUT THE SAME WERE NOT EXAMINED B Y CIT(A). COPIES OF THE DETAILED SUBMISSIONS HAVE BEEN PLACED ON RECORD. IT WAS ACCORDINGLY REQUESTED THAT THE MATTER MAY BE RESTORED TO THE AO FOR CONSI DERING THE VARIOUS SUBMISSIONS WHICH HAVE NOT BEEN EXAMINED. THE LEARN ED DR PLACED RELIANCE ON THE ORDER OF AUTHORITIES BELOW. 2.3.2 WE HAVE PERUSED THE RECORDS AND CONSIDERED TH E MATTER CAREFULLY. THE DISPUTE IS REGARDING DISALLOWANCE OF CERTAIN EXPEND ITURE INCURRED IN FOREIGN CURRENCY UNDER THE PROVISIONS OF SECTION 40(A)(I). THE CASE OF THE ASSESSEE IS THAT NO TAX WAS REQUIRED TO BE DEDUCTED UNDER SECTI ON 195 OF THE I.T.ACT OR 9 UNDER THE PROVISIONS OF DTAA. THE ASSESSEE HAD MADE A DETAILED SUBMISSION BEFORE CIT(A) AS TO HOW THE CORRESPONDING INCOME IN THE HANDS OF THE FOREIGN PARTY WAS NOT TAXABLE AND THEREFORE NO TAX WAS REQU IRED TO BE DEDUCTED. IT APPEARS THAT THE CIT(A) HAS SUMMARILY DISMISSED THE CLAIM OF THE ASSESSEE WITHOUT ANY EXAMINATION. WE THEREFORE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE ISSUE BACK TO HIM FOR PASSING A REASONE D AND SPEAKING ORDER AFTER CONSIDERING THE VARIOUS SUBMISSIONS MADE BY THE ASS ESSEE ON THIS ISSUE AND AFTER ALLOWING OPPORTUNITY OF HEARING. 2.4 THE FOURTH DISPUTE IS REGARDING DISALLOWANCE OF ADDITIONAL DEPRECIATION AMOUNTING TO RS.36,97,797/-. THE ASSESSEE HAD CLAIM ED ADDITIONAL DEPRECIATION OF RS.36,97,797/- FOR EXPANSION OF THE PLANTS VIZ N -198 AND K-40. THE AO OBSERVED THAT ADDITIONAL DEPRECIATION ON CAPACITY E XPANSION WAS ALLOWABLE IF EXPANSION IN CAPACITY DURING THE YEAR OF AN EXISTIN G UNIT EXCEEDED 10% OF ITS CAPACITY AS ON 31.3.2002. IN THIS CASE THE AO NOTED THAT CAPACITY ADDITION IN CASE OF N-198 AND K-40 WAS LESS THAN 10% AND THEREF ORE HE DID NOT ALLOW ADDITIONAL DEPRECIATION. IN APPEAL THE ASSESSEE SUB MITTED THAT IT WAS A MANUFACTURER OF BULK DRUGS AND THERE WERE MANY VARI ATIONS OF THE PRODUCTS BEING MANUFACTURED BY IT. THE VARIOUS PRODUCTS THA T WERE BEING MANUFACTURED WERE USING THE SAME PROCESSES WITH SOME VARIATION I N THE MANUFACTURING PROCESS. THE MANUFACTURING PROCESS FOR THESE PRODUC TS WAS ALSO INTER CHANGEABLE. THE PRODUCTS MANUFACTURING IN PLANT N-1 98 WERE IMI, 2 MNI ETC. THE ASSESSEE IN FINANCIAL YEAR 2003-04 HAD DIVERTED THE MANUFACTURING CAPACITY IN IMI FOR 4 MONTHS TO MANUFACTURE 2 MNI. IT WAS POINTED OUT THAT FOR OVER 1 MT OF PRODUCTION CAPACITY THAT WAS DIVERTED FROM IMI, THE INSTALLED CAPACITY FOR THE PRODUCT 2 MNI INCREASED BY 2 MT. A CCORDINGLY THE ADJUSTED CAPACITY IN F.Y.2003-04 WAS 3036. ASSESSEE GAVE DET AILED COMPUTATION OF THE 10 SAME BEFORE THE CIT(A). IT WAS POINTED OUT THAT INS TALLED CAPACITY IN PLANT N- 198 AS ON 31.3.2002 WAS 2420 AND ADJUSTED CAPACITY IN F.Y.2003-04 WAS 3036 AND THE CAPACITY AS ON 31.3.2005 WAS 3300. THE ASSE SSEE WAS REQUIRED TO ADD 242 MT BEING 10% OF THE CAPACITY AS ON 31.3.2002 OV ER THE PREVIOUS YEAR I.E. 2003-04 BUT IN THIS CASE ACTUAL ADDITION WAS 264 (3 300 -3036). THE REQUIREMENT WAS THEREFORE MADE. IN CASE OF PLANT K- 40, THE INSTALLED CAPACITY AS ON 31.3.2002 WAS 480 AND IT WAS 585 AS ON 31.3.2 003 AND THE SAME CAPACITY CONTINUED IN F.Y.2004-05 ALSO. ADMITTEDLY THERE WAS NO CAPACITY ADDITION DURING THE YEAR BUT THERE WERE CERTAIN BAL ANCING EQUIPMENTS AND CHANGES IN THE PRODUCTION PROCESS WHICH WERE CARRIE D OUT AS PART OF THE CAPACITY ADDITION. IN THE PROCESS THE ASSESSEE HAD MADE ADDITIONS TO PLANT AND MACHINERY OF 7682233. THE CLAIM OF DEPRECIATION WAS THEREFORE ALLOWABLE. CIT(A) HOWEVER OBSERVED THAT DIVERSION OF CAPACITY FROM ONE DEPARTMENT TO ANOTHER DEPARTMENT COULD NOT INCREASE THE INSTALLED CAPACITY AND THAT THERE WAS NO INDEPENDENT AUTHORITY TO CERTIFY THAT INSTAL LED CAPACITY HAD BEEN INCREASED. HE THEREFORE CONFIRMED THE DISALLOWANCE AGGRIEVED BY WHICH THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 2.4.1 BEFORE US THE LEARNED AR FOR THE ASSESSEE SUB MITTED THAT THE ASSESSEE HAD MADE DETAILED SUBMISSIONS BEFORE CIT(A) WHICH H AD BEEN REPRODUCED IN THE ORDER BUT THE SAME HAD NOT BEEN EXAMINED AND HA D BEEN SUMMARILY REJECTED. THE ORDER OF THE CIT(A) WAS THEREFORE NOT IN ORDER. THE LEARNED DR PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BE LOW. 2.4.2 WE HAVE PERUSED THE RECORDS AND CONSIDERED TH E MATTER CAREFULLY. THE DISPUTE IS REGARDING ALLOWABILITY OF ADDITIONAL DEP RECIATION IN CASE OF CAPACITY EXPANSION. AS PER RULES ADDITIONAL DEPRECIATION CAN BE ALLOWED ON CAPACITY 11 EXPANSION IF CAPACITY EXPANSION DURING THE YEAR UND ER THE EXISTING UNIT EXCEEDS 10% OF THE CAPACITY AS ON 31.3.2002. THE ASSESSEE H AD GIVEN DETAILED SUBMISSIONS BEFORE CIT(A) POINTING OUT THAT THE MAN UFACTURING PROCESS WAS FLEXIBLE AND THE CAPACITY OF ONE PRODUCT COULD BE D IVERTED TO THE OTHER PRODUCT. THE ASSESSEE HAD ALSO GIVEN CALCULATION OF ADJUSTED CAPACITY TO DEMONSTRATE THAT THE CAPACITY DURING THE YEAR HAD INCREASED BY MORE THAN 10%. THE ASSESSEE HAD ALSO SUBMITTED THAT IN ONE OF THE PLAN TS THERE WERE CERTAIN BALANCING EQUIPMENTS AND CHANGES IN THE PRODUCTION PROCESS REQUIRING SUBSTANTIAL ADDITIONS TO PLANT AND MACHINERY IN RES PECT OF WHICH THE ASSESSEE WAS ENTITLED FOR ADDITIONAL DEPRECIATION. THE VARIO US SUBMISSIONS MADE BY THE ASSESSEE HAVE NOT BEEN EXAMINED BY THE CIT(A) IN DE TAIL AND THE SAME WERE REJECTED SUMMARILY WITHOUT MAKING ANY ENQUIRIES. TH E CLAIM OF THE ASSESSEE WAS REQUIRED TO BE EXAMINED IF NECESSARY WITH THE H ELP OF TECHNICAL EXPERTS WHICH HAS NOT BEEN DONE. THE ORDER OF CIT(A) WHICH IS NOT REASONED AND SPEAKING CANNOT BE SUSTAINED. WE THEREFORE SET ASID E THE SAME AND RESTORE THE MATTER BACK TO HIM FOR PASSING A REASONED AND SPEAK ING ORDER AFTER EXAMINING ALL THE SUBMISSIONS OF THE ASSESSEE AND IF NECESSAR Y AFTER GETTING NECESSARY ENQUIRIES MADE AND AFTER ALLOWING OPPORTUNITY OF HE ARING TO THE ASSESSEE. 2.5 THE FIFTH DISPUTE IS REGARDING DISALLOWANCE OF DEPRECIATION ON INSURANCE CLAIM OF RS.8,64,440/-. THE AO DURING THE ASSESSMEN T PROCEEDINGS NOTED THAT THE ASSESSEE HAD RECEIVED TOTAL INSURANCE CLAIM OF RS.83,43,811/- WHICH INCLUDED A SUM OF RS.69,94,341/- FOR THE F.Y.2003-0 4. HOWEVER, THE ASSESSEE HAS REDUCED ONLY A SUM OF RS.78,12,470/- ON ACCOUNT OF INSURANCE CLAIM FROM THE BLOCK OF ASSETS AGAINST RS.83,43,811/-. THE AO ALSO NOTED THAT IN THE BOOKS OF ACCOUNT THE ASSESSEE HAD MADE TOTAL PROVISIONS O F RS.95,89,201/-. HE THEREFORE ALLOCATED THE PROVISIONS AND NOT THE ACTU AL PAYMENTS TOWARDS 12 RESPECTIVE ASSETS RESULTING INTO EXCESS REDUCTION F ROM THE BLOCK OF ASSETS AS A RESULT OF WHICH DEPRECIATION WAS REDUCED BY RS.8,46 ,440/-. IN APPEAL THE ASSESSEE SUBMITTED THAT UNDER THE PROVISIONS OF SEC TION 43(6)(C) ANY MONEY PAYABLE IN RESPECT OF ANY ASSETS WHICH IS SOLD OR D ISCARDED OR DEMOLISHED OR DESTROYED DURING THAT PREVIOUS YEAR TOGETHER WITH A MOUNT OF SCRAP VALUE IF ANY WILL BE REDUCED FROM THE BLOCK OF ASSETS SO HOWEVER THAT REDUCTION DOES NOT EXCEED THE WRITTEN DOWN VALUE OF THE BLOCK OF ASSET S. IT WAS SUBMITTED THAT THE ONLY MONEY PAYABLE IN RESPECT OF ASSETS SOLD/ DISCA RDED/ DEMOLISHED/ DESTROYED IS REQUIRED TO BE REDUCED AND NOT THE PRO VISION MADE IN THE BOOKS. THE ASSESSEE HAD RECEIVED TOTAL INSURANCE CLAIM OF RS.83,43,811/- AGAINST THE PROVISION OF RS.95,89,201/-. THEREFORE REDUCTION O F DEPRECIATION BY THE AO WAS NOT CORRECT. CIT(A) HOWEVER DID NOT ACCEPT THE CLAI M OF THE ASSESSEE AND CONFIRMED THE DISALLOWANCE MADE BY THE AO AGGRIEVED BY WHICH THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 2.5.1 BEFORE US THE LEARNED AR FOR THE ASSESSEE SUB MITTED THAT ONLY THE INSURANCE CLAIM WHICH HAS BECOME PAYABLE DURING THE YEAR COULD BE REDUCED AND NOT THE PROVISION. THE INSURANCE CLAIM DOES NOT BECOME PAYABLE ONLY ON LODGING THE CLAIM WITH THE COMPANY. THE CLAIM BECOM ES PAYABLE ONLY ON PASSING OF THE ORDER BY THE INSURANCE COMPANY. IN T HIS CASE THE ASSESSEE HAD MADE ADDITIONAL CLAIM PROVISIONS FOR WHICH HAD BEEN MADE IN THE BOOKS BUT THE SAME HAD BEEN RECEIVED IN THE SUBSEQUENT YEAR AND R EDUCED FROM THE BLOCK OF THAT YEAR. THERE WAS THUS NO MISTAKE IN THE COMPUTA TION OF DEPRECIATION. THE LEARNED DR ON THE OTHER HAND PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 13 2.5.2 WE HAVE PERUSED THE RECORDS AND CONSIDERED TH E MATTER CAREFULLY. THE DISPUTE IS REGARDING REDUCTION OF INSURANCE CLAIM F ROM THE BLOCK OF ASSETS WHILE COMPUTING THE DEPRECIATION. UNDER THE PROVISIONS OF SECTION 43(6)(C) ANY MONEY PAYABLE IN RESPECT OF ANY ASSETS WHICH IS SOL D/ DISCARDED/ DEMOLISHED/ DESTROYED DURING THE PREVIOUS YEAR IS REQUIRED TO B E REDUCED FROM THE BLOCK OF THE YEAR. IT IS THUS CLEAR THAT ONLY THE MONEY WHIC H HAS BECOME PAYABLE CAN BE REDUCED AND NOT ANY PROVISIONS MADE IN THE BOOKS OF ACCOUNT. IN THIS CASE THE ASSESSEE HAD MADE CERTAIN PROVISIONS IN RESPECT OF INSURANCE CLAIM IN THE BLOCK OF ASSETS WHICH HAS BEEN REDUCED AGAINST THE ACTUAL AMOUNT PAID/ PAYABLE AS CLAIMED BY THE ASSESSEE. IN OUR VIEW THE APPROACH O F THE AO CANNOT BE APPLIED. THE INSURANCE CLAIM BECOMES PAYABLE ON THE DATE OF PASSING OF THE CLAIM BY THE INSURANCE AND NOT ON THE BASIS OF PROVISIONS MA DE IN THE BOOKS. IN THIS CASE THE LEARNED AR HAS ALSO SUBMITTED THAT THE ADD ITIONAL CLAIM MADE BY THE ASSESSEE WAS REDUCED IN THE SUBSEQUENT YEAR WHICH W AS REDUCED FROM THE BLOCK OF ASSET IN THAT YEAR. THE MATTER REQUIRES VE RIFICATION. ONLY THE CLAIM RECEIVED OR WHICH HAS BECOME RECEIVABLE DURING THE YEAR CAN BE ALLOWED AS DEDUCTION. WE THEREFORE RESTORE THIS ISSUE TO THE F ILE OF AO FOR PASSING A FRESH ORDER AFTER NECESSARY EXAMINATION IN THE LIGHT OF O BSERVATIONS MADE ABOVE AND AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESS EE. 2.6 THE SIXTH DISPUTE IS REGARDING ADJUSTMENT TO TH E CLOSING STOCK ON ACCOUNT OF UNUTILIZED MODVAT CREDIT UNDER SECTION 145A OF T HE INCOME-TAX ACT. THE AO NOTED THAT THE ASSESSEE WAS FOLLOWING EXCLUSIVE SYS TEM OF ACCOUNTING AND HAD VALUED THE INVENTORY AS ON 31.3.2005 EXCLUSIVE OF T AXES DUTIES ETC. PAID OR INCURRED IN RELATION TO SUCH CLOSING STOCK. THOUGH UNDER THE PROVISIONS OF SECTION 145A THE CLOSING STOCK HAS TO BE VALUED AFT ER INCLUDING EXCISE DUTY, SALES TAX ETC. THE AO THEREFORE MADE ADDITION OF RS .3,71,54,596/- TO THE 14 CLOSING STOCK ON THIS ACCOUNT. THE AO ALSO OBSERVED THAT IN THE PREVIOUS YEAR NO ADJUSTMENT TO CLOSING STOCK HAD BEEN MADE ON THI S ACCOUNT AND THEREFORE HE DID NOT MAKE ANY SIMILAR ADJUSTMENT TO THE OPENI NG STOCK OF THIS YEAR. 2.6.1 IN APPEAL CIT(A) OBSERVED THAT IN CASES WHERE EXCLUSIVE METHOD HAD BEEN FOLLOWED, THE MODVAT ELEMENT WHICH IS REQUIRED TO BE ADDED IN THE CLOSING STOCK IS THE SAME AS THE MODVAT CREDIT IS TO BE ALL OWED ON ACCOUNT OF PURCHASES SHOWN IN THE BALANCE SHEET AND THEREFORE NO ADDITIO N ON THIS ACCOUNT UNDER SECTION 145A WAS REQUIRED TO BE MADE. HOWEVER CIT(A ) FURTHER OBSERVED THAT IF THE MODVAT ELEMENT TO BE INCLUDED IN THE CLOSING ST OCK IS MORE THAN THE MODVAT BALANCE AVAILABLE IN THE MODVAT CREDIT ACCOU NT OCCURRING ON THE ASSET SIDE OF THE BALANCE SHEET, THE BALANCE WAS REQUIRED TO BE ADDED. AGGRIEVED BY THE SAID DECISION BOTH THE PARTIES ARE IN APPEAL. T HE ASSESSEE HAS CHALLENGED THE DECISION OF THE CIT(A) ON THE GROUND THAT NO AD JUSTMENT UNDER SECTION 145A WAS REQUIRED TO BE MADE WHEREAS THE DEPARTMENT IS AGGRIEVED WITH THE DECISION OF CIT(A) REDUCING THE ADDITION MADE. 2.6 BEFORE US THE LEARNED AR FOR THE ASSESSEE SUBM ITTED THAT AO WAS NOT CORRECT IN STATING THAT NO ADJUSTMENT UNDER SECTION 145A WAS MADE TO THE CLOSING STOCK AS ON 31.3.04. IT WAS ALSO SUBMITTED THAT THE ADJUSTMENT UNDER SECTION 145A WAS ALSO REQUIRED TO BE MADE TO THE OP ENING STOCK IN VIEW OF THE JUDGMENT OF HONBLE HIGH COURT OF DELHI IN CASE OF CIT VS MAHAVIR ALUMINUM LTD. (297 ITR 77). THE LEARNED AR ALSO POINTED OUT THAT THE SAME ISSUE HAD ARISEN IN CASE OF THE ASSESSEE IN A.Y.2004-05 AND T HE TRIBUNAL IN THE ORDER DATED 21.10.2009 IN ITA NO.7543/M/2007 HAD RESTORED THE ISSUE TO THE FILE OF AO FOR PASSING A FRESH ORDER AFTER MAKING ADJUSTMEN T TO THE OPENING STOCK AND 15 AFTER CONSIDERING WHETHER THE PROVISIONS OF SECTION 43B WERE APPLICABLE. THE LEARNED DR PLACED RELIANCE ON THE ORDER OF AO. 2.6.2 WE HAVE PERUSED THE RECORDS AND CONSIDERED TH E RIVAL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING ADJUSTMENT ON A CCOUNT OF TAX, DUTY ETC. TO THE CLOSING STOCK UNDER SECTION 145A OF THE I.T.ACT . THE AO HAD MADE ADJUSTMENTS ONLY ON ACCOUNT OF CLOSING STOCK AND NO ADJUSTMENT WAS MADE TO THE OPENING STOCK. THE CIT(A) HAS DIRECTED THE AO T O MAKE ADDITION ONLY IF THERE WAS DIFFERENCE BETWEEN THE MODVAT BALANCE AVA ILABLE IN THE MODVAT CREDIT ACCOUNT AND THE MODVAT ELEMENT TO BE INCLUD ED IN THE CLOSING STOCK. WE FIND THAT THE SAME ISSUE HAS BEEN CONSIDERED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN A.Y.2004-05 IN ITA NO.7543/M/2007 AND THE T RIBUNAL HAS RESTORED THE ISSUE TO THE FILE OF AO FOR PASSING FRESH ORDER AFT ER MAKING ADJUSTMENT ON ACCOUNT OF OPENING STOCK ALSO AND AFTER CONSIDERING THE APPLICABILITY OF PROVISIONS OF SECTION 43B ETC. FACTS THIS YEAR ARE IDENTICAL. WE THEREFORE RESPECTFULLY FOLLOWING THE DECISION OF TRIBUNAL (SU PRA) RESTORE THE ISSUE TO THE FILE OF AO FOR PASSING A FRESH ORDER AFTER NECESSAR Y EXAMINATION AND AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. 2.7 THE SEVENTH DISPUTE IS REGARDING ADDITION OF RS .22,848/- ON ACCOUNT OF NON RECONCILIATION OF INCOME AS PER AIR DATA OF TDS . THE AO HAD RECEIVED AIR DATA OF INCOME RECEIVED BY THE ASSESSEE AS PER TDS MADE BY THE BUYERS AND THE SAME WAS PROVIDED TO THE ASSESSEE FOR RECONCILI ATION. AS PER THE AO THE ASSESSEE COULD NOT RECONCILE THE INCOME RECEIVED OF RS.235/- FROM UNIMARK REMEDIES AND RS.22,613/- FROM AMOLI ORGANICS LTD. H E THEREFORE ADDED THE SAME AS INCOME OF THE ASSESSEE. IN APPEAL CIT(A) R EMANDED THE MATTER TO THE 16 AO BUT THE ASSESSEE COULD NOT RECONCILE DIFFERENCE. HE THEREFORE CONFIRMED THE ADDITION AGGRIEVED BY WHICH THE ASSESSEE IS IN APPE AL BEFORE THE TRIBUNAL. 2.7.1 BEFORE US THE LEARNED AR FOR THE ASSESSEE SUB MITTED THAT NO ADDITION COULD BE MADE ON THE BASIS OF AIR DATA. THESE WERE SMALL AMOUNTS AND IT WAS DIFFICULT TO RECONCILE AND MAY BE THESE WERE TAXED IN THE NEXT YEAR. HE ALSO PLACED RELIANCE ON THE DECISION OF THE TRIBUNAL IN CASE OF S.GANESH VS ACIT IN ITA NO.527/M/2010 IN WHICH SIMILAR ADDITION HAD BEE N DELETED. THE LEARNED DR PLACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. 2.7.2. WE HAVE PERUSED THE RECORDS AND CONSIDERED T HE RIVAL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING ADDITION ON THE BASIS OF AIR DATA WHICH WERE NOT RECONCILED BY THE ASSESSEE. THE TDS DATA RECEI VED IN RESPECT OF TAX DEDUCTED BY BUYERS OF INCOME TO THE ASSESSEE SHOWED THAT INCOME RECEIVED OF RS.235 FROM UNIMARK REMEDY LTD AND RS.22,613/- FROM AMOLI ORGANICS LTD. WAS NOT RECONCILED BY THE ASSESSEE AND THE ADDITION S HAD ACCORDINGLY BE MADE. IN OUR VIEW ONCE THERE IS SPECIFIC DATA SHOWING THA T INCOME HAD BEEN RECEIVED BY THE ASSESSEE GIVING THE NAME OF THE PARTY ALSO F ROM WHOM THE INCOME HAD BEEN RECEIVED, IT IS FOR THE ASSESSEE TO SHOW HOW T HE INCOME HAS BEEN ACCOUNTED. IN THIS CASE THE ASSESSEE HAS FAILED TO DO. THEREFORE IN OUR VIEW THE ADDITION IS JUSTIFIED. THE DECISION OF TRIBUNAL IN CASE OF SHRI S.GANESH VS ACIT (SUPRA) IS DISTINGUISHABLE. IN THAT CASE THE TRIBUN AL NOTED THAT THERE WAS NO MATERIAL ON RECORD PLACED BY THE REVENUE AUTHORITIE S TO SHOW THAT THE ASSESSEE HAD RECEIVED PROFESSIONAL FEES MORE THAN THE AMOUNT DECLARED. MOREOVER THE TRIBUNAL IN THAT CASE ALSO NOTED THAT THE PROFESSIO NAL FEES DECLARED BY THE ASSESSEE WAS MORE THAN THE PROFESSIONAL FEES AS PER THE AIR INFORMATION. IT WAS FOR THESE REASONS THAT THE ADDITIONS MADE HAVE DELETED. THE POSITION IN 17 CASE OF ASSESSEE IS DIFFERENT. WE THEREFORE SEE NO INFIRMITY IN THE ORDER OF CIT(A) UPHOLDING THE ADDITION AND THE SAME IS UPHEL D. 2.8 THE EIGHTH DISPUTE IS REGARDING LEVY OF INTERES T UNDER SECTION 234C AND 234D. THE LEARNED AR FOR THE ASSESSEE SUBMITTED THA T THE ISSUE WAS ONLY CONSEQUENTIAL. WE THEREFORE DIRECT THE AO TO RECOMP UTE THE INTEREST AT THE TIME OF GIVING EFFECT TO THIS ORDER. 3. THE APPEAL OF THE REVENUE IN ITA NO.4816/M/2009 . THE ONLY DISPUTE RAISED BY THE REVENUE IS IN RELATION TO ORDER OF CI T(A) REGARDING ADDITION ON ACCOUNT OF ADJUSTMENT UNDER SECTION 145A. THIS ISSU E WE HAVE ALREADY CONSIDERED WHILE DEALING WITH THE GROUND NO.6 OF TH E APPEAL OF THE ASSESSEE AND IN VIEW OF OUR ORDER VIDE PARA 2.6.2 OF THIS OR DER THE ISSUE IS RESTORED TO THE FILE OF AO FOR PASSING A FRESH ORDER AFTER NECE SSARY EXAMINATION AND AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. 4. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY A LLOWED WHEREAS THAT BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. 5. ORDER WAS PRONOUNCED IN THE OPEN COURT 31.03.201 1. SD/- SD/- ( V. D. RAO ) (RAJEND RA SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE : 31.03.2011 AT :MUMBAI COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A), MUMBAI CONCERNED 18 4. THE CIT, MUMBAI CITY CONCERNED 5. THE DR G BENCH, ITAT, MUMBAI // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ALK