ADDL CIT 3(1), MUMBAI V. GATEWAY DISTRIPARKS LTD, NAVI MUMBAI

ITA 5371/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2735 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Department
• Bench Allotted: G
• Next Hearing Date: 27-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 24-08-2012
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SHUKLA
• Keywords: Reopening of assessment; Capital asset; Competent authority
• Section: 143(3); 147; 148; 263; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO. 5371/MUM./2012 ( ASSESSMENT YEAR : 20 09 1 0 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 3(1), AAYAKAR BHAWAN 1 01, M.K. ROAD, MUMBAI 400 020 PAN AAACG3245C .. APPELLANT V/S M/S. GATEWAY DISTRIPARKS LTD. SECTOR 6, DRONAGIRI, TALUKA URAN DISTRICT RAIGAD, NAVI MUMBAI 400 707 PAN AAACG3245C .... RESPONDENT ITA NO.3654 /MUM./2012 ( ASSESSMENT YEAR : 20 08 09 ) DY . COMMISSIONER OF INCOME TAX CIRCLE 3(1), AAYAKAR BHAWAN 101, M.K. ROAD, MUMBAI 400 020 PAN AAACG3245C .. APPELLANT V/S M/S. GATEWAY DISTRIPARKS LTD. SECTOR 6, DRONAGIRI, TALUKA URAN DISTRICT RAIGAD, NAVI MUMBAI 400 707 PAN AA ACG3245C .... RESPONDENT ASSESSEE BY : SHRI S.E. DASTUR A/W SHRI MADHUR AGARWAL REVENUE BY : S MT. ANUPAMA SHUKLA DATE OF HEARING 29 . 10 .2015 DATE OF ORDER 20.11.2015 O R D E R M/S. GATEWAY DISTRIPARKS LTD. 2 PER SAKTIJIT DEY , J.M. THE AFORESAI D APPEALS BY THE REVENUE ARE AGAINST SEPARATE ORDERS PASSED BY THE LEARNED COMMISSIONER (APPEALS) 7, MUMBAI, FOR THE ASSESSMENT YEAR 2008 09 AND 2009 10 . SINCE THE ISSUE RAISED IN BOTH THE APPEAL S ARE MORE OR LESS COMMON, THEY HAVE BEEN CLUBBED TOGETHER AN D ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED OR DER FOR THE SAKE OF CONVENIENCE. ITA NO.3654/MUM./2012 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL RELATES TO THE DIRECTION OF THE LEARNED COMMISSIONER (APPEALS) IN ALLOWING ASSESSEES CLAIM UNDER SECTION 80IA(4) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ). 3. BRIEFLY STATED THE FACTS ARE, THE ASSESSEE, A COMPANY, IS ENGAGED IN THE BUSINESS OF DE VELOPING OPERATING AND MAINTAINING A CONTAINER FREIGHT STATION (CFS) AT NHAVA SHEVA, MUMBAI, WHICH IS ALSO A PPROVED BY THE MINISTRIES OF REVENUE, COMMERCE AND SHIPPING, AS WELL AS CUSTOMS DEPARTMENT, GOVERNMENT OF INDIA. AS STATED BY THE ASSESSEE, IT HAS SET UP THE CFS IN THE FINANCIAL YEAR 1998 99 AFTER DULY ENTERING INTO AN AGREEMENT WITH CIDCO. AS PER THE TER MS OF AGREEMENT, CIDCO ALLOWED THE ASSESSEE TO SET UP AND OPERATE THE CFS FOR A PERIOD OF 60 M/S. GATEWAY DISTRIPARKS LTD. 3 YEARS. FOR THE ASSESSMENT YEAR 2008 09, THE ASSESSEE FILED ITS RETURN OF INCOME ON 29 TH SEPTEMBER 2008, DECLARING TOTAL INCOME OF ` 17,23,16,060. SUBSEQUENTLY, REV ISED RETURN WAS FILED BY THE ASSESSEE ON 13 TH JUNE 2009, DECLARING TOTAL INCOME OF ` 17,23,16,060. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER, ON EXAMINING THE AUDIT ED FINANCIAL STATEMENTS SUBMITTED BY THE ASSESSEE, FOUND THAT IT HAS CLAIMED DEDUCTION UNDER SECTION 80IA(4) FOR AN AMOUNT OF ` 66,11,00,325. THE ASSESSING OFFICER, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND PERUSING THE AGREEMENT WITH CIDCO WAS OF THE VIEW THAT THE SAID AGREEMENT IS NOT A BOT / BOLT AGREEMENT. HE, THERE FORE, ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE FOR EXPLAINING WHY THE DEDUCTION CLAIMED UNDER SECTION 80IA(4) SHOULD NOT BE DISALLOWED AS THE CONDITIONS OF THE SAID PROVISION ARE NOT FULFILLED. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED THAT THE CFS SET UP BY THE ASSESSEE IS AN INLAND PORT, HENCE, IS AN INFRASTRUCTURE FACILITY AS PER SECTION 80IA(4). IN THIS CONTEXT, THE ASSESSEE RELIED UPON CIRCULARS ISSUED BY THE FINANCE MINISTRY AND MINISTRY OF SHIPPING, MINISTRY OF COMMERCE AND INDUS TRY. IT WAS ALSO SUBMITTED THAT THE ASSESSEE HAS ENTERED INTO AN AGREEMENT WITH THE CIDCO WHICH IS A STATUTORY BODY FOR CONSTRUCTION AND OPERATION OF CFS FACILITY. THUS, IT WAS SUBMITTED BY THE ASSESSEE THAT IT FULFILLED ALL THE M/S. GATEWAY DISTRIPARKS LTD. 4 CONDITIONS OF SECTION 80IA (4). THE ASSESSING OFFICER, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, OBSERVED THAT AS PER THE PROVISIONS OF SECTION 80IA(12)(CA), CFS IS NOT AN INFRASTRUCTURE FACILITY AND NOT SUCH EVEN WITHIN THE MEANING OF SECTION 80IA(4). HE ALSO OBSERVED THAT CIRCULAR NO.793 DATED 23 RD JUNE 2000 ISSUED BY THE CBDT DOES NOT MENTION CFS TO BE AN INFRASTRUCTURE FACILITY. HE FURTHER OBSERVED THAT AS PER THE SAID CIRCULAR, THE ASSESSEE HAS TO OBTAIN A CERTIFICATE FROM THE COMPETENT AUTHORITY IF IT SEEKS TO CLAIM DE DUCTION UNDER SECTION 80IA(4). HOWEVER, THE ASSESSEE HAS NOT OBTAINED ANY SUCH CERTIFICATE FOR ASSESSMENT YEAR 1998 99. THEREFORE, THE ASSESSEE DOE S NOT QUALIFY FOR THE DEFINITION OF PORT AS AMENDED BY THE FINANCE ACT, 1998. HE FURTHER OBSERVED THAT SECT ION 80IA(4) IS FURTHER AMENDED BY FINANCE ACT, 2007, W.E.F. 1 ST APRIL 2008 AS PER WHICH INLAND PORT WAS INCLUDED AS INFRASTRUCTURE FACILIT Y . HOWEVER, SUCH AMENDMENT BEING EFFECTIVE FROM 1 ST APRIL 2008, INLAND PORT WHICH COMMENCED OPERATION ON / OR AFTE R 1 ST APRIL 2008, WILL QUALIFY FOR DEDUCTION UNDER SECTION 80IA(4). FURTHER, IT WAS OBSERVED BY THE ASSESSING OFFICER , IN RESPONSE TO A LETTER WRITTEN BY HIM TO CIDCO, IT WAS INFORMED BY THE SAID AUTHORITY THAT PERMISSION GIVEN TO THE ASSESSEE WAS FOR CONS TRUCTION OF WAREHOUSE AND NOT FOR CFS. HENCE, THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA(4). FINALLY, THE ASSESSING OFFICER OPINED M/S. GATEWAY DISTRIPARKS LTD. 5 THAT THE AGREEMENT ENTERED INTO WITH CIDCO BY THE ASSESSEE IS A LEASE DEED UNDER WHICH THE ASSESSEE WAS AL LOWED A PIECE OF LAND FOR COMMERCIAL PURPOSE. HOWEVER, IT CANNOT BE CONSIDERED TO BE AN AGREEMENT WITH THE GOVERNMENT AS PRESCRIBED UNDER SECTION 80IA(4). HE ALSO OBSERVED THAT AS PER INFORMATION OBTAINED FROM CIDCO, THE ASSESSEE HAS NOT ENTERED INTO BOT / BOLT AGREEMENT, THEREFORE, THE CONDITIONS OF SECTION 80IA(4) ARE NOT COMPLIED. ON THE AFORESAID PREMISE, THE ASSESSING OFFICER FINALLY DISALLOWED ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IA(4). BEING AGGRIEVED OF SUCH DISALLOWANCE, THE ASSESSEE PREFE RRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4. IN THE COURSE OF HEARING OF APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, THE ASSESSEE MADE DETAIL SUBMISSIONS CONTESTING EACH OF THE FINDINGS OF THE ASSESSING OFFICER WHILE DISALLOWING ASSESSEES CLAIM OF DEDUCTION. THE LEARNED COMMISSIONER (APPEALS), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE LIGHT OF FACTS AND MATERIAL ONRECORD AS WELL AS THE DECISIONS RELIED UPON BY THE ASSESSEE, FOUND THAT THE ASSESSEE HAS COMMENCED ITS BUSINESS OF CFS IN THE ASSESSMENT YEAR 1999 2000. HE ALSO FOUND THAT THE ASSESSEE HAS ENTERED INTO A CONTRACT WITH CIDCO ON BOT / BOLT BASIS FOR CONSTRUCTION OF CFS VIDE AGREEMENT DATED 28 TH JUNE 1997. HE OBSERVED THAT THE ASSESSEE HAD M/S. GATEWAY DISTRIPARKS LTD. 6 CLAIMED DEDUCTION UNDER SECTION 80IA(4) FOR THE CFS FOR THE FIRST TIME IN THE ASSESSMENT YEAR 2002 03 AND THE SAME WAS ALLOWED BY THE DEPARTMENT VIDE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) AND THE IMPUGNED ASSESSMENT YEAR IS THE 7 TH YEAR OF CLAIM OF DEDUCTION BY THE ASSESSEE. HE, THEREFOR E, WAS OF THE VIEW THAT WHEN THE DEDUCTION IS ALLOWED TO THE ASSESSEE CONTINUOUSLY IN THE PRECEDING ASSESSMENT YEARS , THE ASSESSING OFFICER CANNOT WITHDRAW THE DEDUCTION WHEN THE FACTS AND CIRCUMSTANCES REMAINED THE SAME. IN THIS CONTEXT, HE RELIED UPON TH E DECISION OF THE HON'BLE SUPREME COURT IN BHARAT SANCHAR NIGAM LTD. V/S UNION OF INDIA, [2006] 282 ITR 273 (SC) AND THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT V/S PAUL BROTHERS, [ 1995 ] 216 ITR 548 (BOM.). HE, THEREFORE, HELD THAT DISALLO WANCE OF DEDUCTION BY THE ASSESSING OFFICER IN THE IMPUGNED ASSESSMENT YEAR CANNOT BE SUSTAINED. HAVING HELD SO, HE NOTICED THAT AS PER THE DEFINITION OF INFRASTRUCTURE FACILITIES UNDER SECTION 80IA(4), IT INCLUDES ANY PUBLIC FACILITY AS NOTIFIED BY THE BO ARD IN THE OFFICIAL GAZETTE. HE FURTHER OBSERVED , GOVERNMENT OF INDIA, VIDE NOTIFICATION S.O. 744E DATED 1 ST SEPTEMBER 1998, AS AMENDED BY S.O. 391E DATED 28 TH MAY 1999, HAS CLARIFIED THAT INLAND CONTAINER DEPOT O R CFS ARE INFRASTRUCTURE FACILITY IN TERMS WITH SECTION 80IA(12)(CA) OF THE ACT. THE LEARNED COMMISSIONER (APPEALS), AFTER ANALYSING THE AGREEMENT M/S. GATEWAY DISTRIPARKS LTD. 7 WITH CIDCO, FOUND THAT IT IS A VALID AGREEMENT BETWEEN THE ASSESSEE AND THE GOVERNMENT WHICH HAS ALSO BEEN APPROVED BY CBDT AS WELL AS COMMERCE MINISTRY . HE ALSO FOUND THAT THE MINISTRY OF SHIPPING HAS ALL O WED THE FACILITY TO BE USED AS PORT FOR ALL PRACTICAL PURPOSES. HE ALSO NOTICED THAT AS PER THE TERMS OF AGREEMENT, AFTER EXPIRY OF 60 YEARS, THE AREA ALLOTTED ALONG WITH ALL FACILITIES WILL REVERT BACK TO THE LOCAL AUTHORITY. HE, THEREFORE, WAS OF THE OPINION THAT ALL CONDITIONS OF SECTION 80IA(4) WAS SATISFIED. THUS, ON THE AFORESAID BASIS, THE LEARNED COMMISSIONER (APPEALS) DIRECTED THE ASSESSING OFFICER TO ALLOW ASSESSEES CLAIM OF DEDUCTION UNDER SE CTION 80IA(4). 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE, SMT. ANUPAMA SHUKLA, THOUGH AGREED THAT ASSESSEE HAD BEEN CLAIMING THE DEDUCTION UNDER SECTION 80IA(4), FROM THE ASSESSMENT YEAR 2002 03 AND IT HAS ALSO BEEN ALLOWED TO THE ASSESSEE BY THE DEPARTMENT BUT SHE SUBMITTED THAT IN THE IMPUGNED ASSESSMENT YEAR, CERTAIN ADDITIONAL FACTS / INFORMATION CAME TO THE POSSESSION OF THE ASSESSING OFFICER WHICH REVEALED THAT ASSESSEE HAS NOT FULFILLED THE CONDITION OF SECTION 80IA(4). THE LEARNED DEPARTMENTAL REPRES ENTATIVE SUBMITTED, EACH ASSESSMENT YEAR BEING AN INDEPENDENT UNIT , IRRESPECTIVE OF FACT WHETHER DEDUCTION WAS ALLOWED IN THE EARLIER ASSESSMENT YEAR STILL THE ASSESSING OFFICER CAN FORM AN INDEPENDENT OPINION ON THE BASIS OF M/S. GATEWAY DISTRIPARKS LTD. 8 INFORMATION OBTAINED IN A S UBSEQUENT ASSESSMENT YEAR WITH REGARD TO THE DEDUCTION CLAIMED BY THE ASSESSEE. SHE, THEREFORE, SUBMITTED , THE ASSESSING OFFICER HAVING FOUND THAT ASSESSEE HAS NOT FULFILLED ALL THE CONDITIONS OF SECTION 80IA(4) WAS COMPETENT TO DISALLOW ASSESSEES CLAIM O F DEDUCTION. FURTHER, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED ON THE BASIS OF THE ASSESSMENT MADE FOR THE ASSESSMENT YEAR 2008 09, ASSESSMENTS FOR PRECEDING YEARS HAVE BEEN RE OPENED UNDER SECTION 147. SHE, THEREFORE, SUBMITTED THAT THE LEARNED C OMMISSIONER (APPEALS) WAS NOT JUSTIFIED IN ALLOWING ASSESSEES CLAIM. 6. THE LEARNED SENIOR COUNSEL FOR THE ASSESSEE , SHRI S.E. DASTUR, SUBMITTED BEFORE US , IN THE ASSESSMENT YEAR 2002 03, THE ASSESSEE FOR THE FIRST TIME CLAIMED DEDUCTION UNDER SECTION 80IA( 4) IN RESPECT OF CFS. IT WAS SUBMITTED, THE DEPARTMENT ALSO ACCEPTED ASSESSEES CLAIM IN AN ASSESSMENT ORDER PASSED UNDER SECTION 143(3). IT WAS SUBMITTED UP TO THE ASSESSMENT YEAR 2007 08, DEDUCTION UNDER SECTION 80IA(4) WAS ALLOWED IN ASSESSMENT S COMPLET ED UNDER SECTION 143(3). HE SUBMITTED, WHEN A PARTICULAR DEDUCTION IS FOR A SPECIFIC PERIOD , IF SUCH DEDUCTION IS ALLOWED IN THE INITIAL / FIRST YEAR OF CLAIM, THE SAME CANNOT BE WITHDRAWN IN ANY SUBSEQUENT ASSESSMENT YEAR. IT WAS SUBMITTED BY THE LEARNED COUNSEL , WHERE THE PROVISIONS RELATING TO DEDUCTION IS GENERAL IN NATURE WITHOUT SPECIFYING THE PERIOD, THEN THE ASSESSING M/S. GATEWAY DISTRIPARKS LTD. 9 OFFICER CAN DECIDE ALLOWABILITY OF DEDUCTION INDEPENDENTLY IN A PARTICULAR ASSESSMENT YEAR WHICH IS NOT THE CASE WHEN THE DEDUCTION I S FOR SPECIFIC PERIOD. IN THIS CONTEXT, HE RELIED UPON THE FOLLOWING DECISION S : I) CIT V/S WESTER N OUTDOOR INTERACTIVE PVT. LTD., [ 2012 ] 349 ITR 309; II) CIT V/S PAUL BROS., [1995] 79 TAXMAN 378. 7. THE LEARNED COUNSEL SUBMITTED, THE FACT THAT THE ASSES SMENT S FOR SOME OF PREVIOUS YEARS HAVE BEEN RE OPENED ON THE BASIS OF ASSESSMENT ORDER PASSED FOR THE ASSESSMENT YEAR 2008 09 CANNOT HAVE ANY IMPACT ON ASSESSEES CLAIM OF DEDUCTION AS THE FACTS EXISTING ON THE DATE OF ASSESSMENT FOR THE ASSESSMENT YEAR 20 08 09 HAS TO BE CONSIDERED . IT WAS SUBMITTED , EVEN THE RE OPENING OF ASSESSMENT WAS UP TO THE ASSESSMENT YEAR S 2004 05. THEREFORE, THE DEDUCTION ALLOWED TO THE ASSESSEE FOR THE INITIAL TWO ASSESSMENT YEAR S 2002 03 AND 2003 04 REMAIN UNALTERED. THEREFORE, D EDUCTION HAVING ALREADY ALLOWED TO THE ASSESSEE IN THE FIRST TWO ASSESSMENT YEARS, IT CANNOT BE WITHDRAWN IN THE SUBSEQUENT ASSESSMENT YEAR. THE LEARNED COUNSEL SUBMITTED , THE ASSESSING OFFICER ALSO TOTALLY MISREAD THE PROVISIONS OF THE ACT WHILE INFERRING THAT ASSESSEE IS NOT A INFRASTRUCTURE FACILITY BY REFERRING TO THE AMENDMENT BROUGHT BY FINANCE ACT, 2007, W.E.F. 1 ST M/S. GATEWAY DISTRIPARKS LTD. 10 APRIL 2008. THE LEARNED COUNSEL SUBMITTED, INLAND PORT WAS ALREADY INCLUDED AS AN INFRASTRUCTURE FACILITY UNDER EXPLANATION TO SECTION 80IA(4) SINCE 1 ST APRIL 2002, AND IN FINANCE ACT, 2007, FOR THE EXPRESSION OR INLAND PORT THE FOLLOWING WORDS WERE SUBSTITUTED INLAND PORT OR NAVIGATIONAL CHANNEL IN THE SEA . THUS, IT WAS SUBMITTED BY THE LEARNED COUNSEL ON MERITS ALSO, CFS BEING AN INLAND PORT IS AN INFRASTRUCTURE FACILITY IN TERMS WITH SECTION 80IA(4), HENCE, IS ELIGIBL E FOR DEDUCTION. FOR SUCH PROPOSITION, HE RELIED UPON THE DECISION OF THE TRIBUNAL IN ANOTHER GROUP COMPANY I.E., GATEWAY EAST INDIA PVT. LTD. V/S ACIT, ITA NO.15/ VIZAG./2015, ORDER DATED 29 TH APRIL 2015. AS FAR AS THE CONTENTION OF THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT EACH ASSESSMENT YEAR BEING SEPARATE AND INDEPENDENT UNIT, THE ASSESSING OFFICER CAN FORM AN INDEPENDENT OPINION ON A PARTICULAR ISSUE IF ADDI TIONAL INFORMATION COM E TO HIS POSSESSION, T HE LEARNED COUNSEL STRONGLY CONTESTING SUCH SUBMISSIONS SUBMITTED , ONLY IN A CASE WHERE THERE IS CHANGE IN FACTS WHICH EXISTED IN EARLIER ASSESSMENT YEAR , THE ASSESSING OFFICER CAN TAKE AN INDEPENDENT VIEW. HOWEV ER, WHEN THE FACTS ARE IDENTICAL, THE ASSESSING OFFICER ON THE BASIS OF INFORMATION OBTAINED AS A RESULT OF ENQUIRY CONDUCTED BY HIM, CANNOT TAKE AN INDEPENDENT VIEW , MORE SO , WHEN THE DEDUCTION PROVIDED UNDER THE STATUTE IS FOR A SPECIFIC PERIOD M/S. GATEWAY DISTRIPARKS LTD. 11 AND SUCH DEDUCTION IS ALLOWED TO THE ASSESSEE IN THE INITIAL ASSESSMENT YEAR. HE SUBMITTED , THE AGREEMENT WITH C ICDO AND ALL OTHER RELEVANT MATERIALS WERE ALREADY BEFORE THE ASSESSING OFFICER IN THE INITIAL ASSESSMENT YEAR AND THERE IS NO CHANGE IN THESE FACTS. HE SUBMITTED , EVEN THE ENQUIRY CONDUCTED AND INFORMATION OBTAINED IS WHOLLY IRRELEVANT AS THE CONDITION REQUIRING TRANSFER OF INFRASTRUCTURE FACILITY TO THE CENTRAL GOVERNMENT, STATE GOVERNMENT, LOCAL AUTHORITY OR STATUTORY BODY WAS REMOVED FROM STATUTE BY FI NANCE ACT, 2001 W.E.F. 1 ST APRIL 2002. IN THIS CONTEXT, HE DREW THE ATTENTION T O THE PROVISIONS CONTAINED IN SECTION 80IA(4)(I)(B). THUS, IT WAS SUBMITTED BY THE LEARNED COUNSEL , THE INFERENCE DRAWN BY THE ASSESSING OFFICER CANNOT BE ACCEPTED. FINALLY, THE LEARNED COUNSEL INVITING THE ATTENTION OF THE BENCH TO THE GROUNDS RAISED BY THE DEPARTMENT SUBMITTED , IN NONE OF THE GROUNDS THE DEPARTMENT HAS CHALLENGED THE FINDING OF THE FIRST APPELLATE AUTHORITY THAT THE ASSESSEE IS AN INFRASTRUCTURE FACILITY. HE, T HEREFORE, SUBMITTED , THERE IS NO REASON TO DISTURB THE FINDINGS OF THE FIRST APPELLATE AUTHORITY. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE MATERIAL AVAILABLE ON RECORD. UNDISPUTEDLY, THE ASSESSEE ENTERED INTO AN AGREEMENT WITH A STATUTORY BODY I.E., C IDCO FOR DEVELOPMENT, OPERATION AND M/S. GATEWAY DISTRIPARKS LTD. 12 MAINTENANCE OF CFS. IT IS ALSO NOT DISPUTED THAT THE SAME IS ALSO AP PROVED AND NOTIFIED BY CBDT. THEREFORE, THE FIRST ISSUE WHICH ARISES FOR CONSIDERATI ON IS WHETHER CFS IS AN INFRASTRUCTURE FACILITY UNDER SECTION 80IA(4). THE ASSESSING OFFICER HAS HELD THAT CFS IS NOT AN INFRASTRUCTURE FACILITY AND FURTHER SINCE THE AGREEMENT WITH C IDCO IS NOT BOT / BOLT, THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION UNDER SECTION 80IA. AT THE OUTSET, IT NEEDS TO BE OBSERVED THAT AS PER EXPLANATION TO SECTION 80IA(4), AS IT EXISTED PRIOR TO ITS SUBSTITUTION BY FINANCE ACT, 2007 W.E.F. 1 ST APRIL 2008, READ AS UNDER: EXPLANATION FOR THE PURPOSE OF THIS CLAUSE, INFRASTRUCT URE FACILITIES MEANS A) XXX B) XXX C) XXX D) A PORT, AIRPORT, INLAND WATER WAY OR INLAND PORT. BY FINANCE ACT 2007 IN PLACE OF INLAND PORT , THE FOLLOWING WORDS WERE SUBSTITUTED. INLAND PORT OR NAVIGATIONAL CHANNEL IN THE SEA 9. THUS, AS CAN BE SEEN FROM THE AF ORESAID READING OF THE PROVISIONS, INLAND PORT WAS A INFRASTRUCTURE FACILITY FROM THE ASSESSMENT YEAR 2002 03 ONWARDS. THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT V/S CONTINENTAL WAREHOUSING CORPORATION LTD., ITA M/S. GATEWAY DISTRIPARKS LTD. 13 NO.523/2013 AND ITA NO.1969/2013, HAS HE LD THAT CFS FOR THE PURPOSE OF SECTION 80IA(4) IS TO BE CONSIDERED AS AN INLAND PORT. IN FACT, THE TRIBUNAL, VIZAG BENCH, IN GATEWAY EAST INDIA PVT. LTD. (SUPRA), FOLLOWING THE DECISION OF THE HON'BLE DELHI HIGH COURT IN CONTAINER CORPORATION OF INDIA LTD. V/S CIT, HELD THAT CFS BEING AN INLAND PORT IS AN INFRASTRUCTURE FACILITY FOR THE PURPOSE OF SECTION 80IA(4). IN VIEW OF THE AFORESAID, WE HAVE NO HESITATION IN HOLDING THAT ASSESSEE HAVING DEVELOPED, OPERATED AND MAINTAINED A CFS IS ELIGIBLE FOR DEDUCTIO N UNDER SECTION 80IA(4). 10. T HE SECOND AR GUMENT OF THE DEPARTMENT IS THE AGREEMENT WITH C IDCO IS NOT BOT / BOLT BY VIRTUE OF WHICH INFRASTRUCTURE FACILITY DEVELOPED BY THE ASSESSEE WOULD REVERT BACK TO THE GOVERNMENT AFTER A SPECIFIED PERIOD , IT IS NOT ELIG IBLE FOR DEDUCTION . HOWEVER, ON A READING OF THE PROVISIONS OF SECTION 80IA(4)(I)(B), AS IT EXISTED FROM 1 ST APRIL 2002, IT IS CLEAR THAT THE CONDITION THAT SUCH INFRASTRUCTURE FACILITY SHALL BE TRANSFERRED TO THE GOVERNMENT, LOCAL AUTHORITY OR STATUTORY B ODY HAS BEEN DONE AWAY WITH BY FINANCE ACT, 2001 W.E.F. 1 ST APRIL 2002. THEREFORE, THE REASONING OF THE ASSESSING OFFICER THAT THE ASSESSEE WOULD NOT GET DEDUCTION UNDER SECTION 80IA(4) AGREEMENT BOT / BOLT STIPULATING HANDING OVER THE INFRASTRUCTURE FACIL ITY TO THE GOVERNMENT IS WHOLLY WITHOUT BASIS. EVEN ASSUMING FOR THE ARGUMENT M/S. GATEWAY DISTRIPARKS LTD. 14 SAKE THAT SUCH CONDITION IS APPLICABLE FOR THE IMPUGNED ASSESSMENT YEAR , STILL IN OUR VIEW, THE STAND OF THE DEPARTMENT IS WHOLLY MISCONCEIVED AS THE FIRST APPELLATE AUTHORITY AF TER PERUSING THE AGREEMENT WITH CIDCO HAS GIVEN A CATEGORICAL FINDING THAT CFS DEVELOP ED, OPERATED AND MAINTAINED BY THE ASSESSEE WOULD REVER T BACK TO THE STATUTORY BODY AFTER EXPIRY OF LEASE PERIOD OF 60 YEARS. THIS FINDING OF FACT RECORDED BY THE FIRST A PPELLATE AUTHORITY HAS NOT AT ALL BEEN CONTROVERTED BY THE DEPARTMENT. THUS, BOTH THE ARGUMENTS OF THE ASSESSING OFFICER FOR DENYING ASSESSEES CLAIM OF DEDUCTION WOULD FAIL. 11. HAVING HELD SO, WE PROCEED TO EXAMINE THE ISSUE, DEDUCTION UNDER SECTION 80IA(4 ) HAVING ALREADY BEEN ALLOWED TO THE ASSESSEE IN THE INITIAL ASSESSMENT YEAR S, WHETHER THE SAME CAN BE DISALLOWED IN ANY SUBSEQUENT ASSESSMENT YEAR. AS CAN BE SEEN FROM THE MATERIAL PLACED BEFORE US, THE FIRST YEAR OF CLAIM OF DEDUCTION BY ASSESSEE UNDER SECTION 80IA(4) IN RESPECT OF CFS WAS ASSESSMENT YEAR 2002 - 03. THE ASSESSING OFFICER, WHILE COMPLETING THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT ACCEPTED ASSESSEES CLAIM. THEREAFTER, FROM THE ASSESSMENT YEAR 2003 04 TO 2007 08, CLAIM OF DEDUCTION UND ER SECTION 80IA(4) IN RESPECT OF CFS WAS CONTINUOUSLY ALLOWED BY THE ASSESSING OFFICER IN ORDERS PASSED UNDER SECTION 143(3). O N A READING M/S. GATEWAY DISTRIPARKS LTD. 15 OF SUB SECTION (2) OF SECTION 80IA, IT IS VERY MUCH CLEAR THAT AN ASSESSEE WOULD BE ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 80IA, AT HIS OWN OPTION , FOR ANY 10 CONSECUTIVE ASSESSMENT YEAR S OUT OF 15 YEARS BEGINNING FROM THE YEAR IN WHICH THE UNDERTAKING DEVELOPS AND OPERATES THE INFRASTRUCTURE FACILITY. AS IS APPARENT FROM THE FACTS ON RECORD , IN CASE OF THE PRESENT AS SESSEE, IT HAS OPTED FOR AVAILING DEDUCTION UNDER SECTION 80IA(4) FROM THE ASSESSMENT YEAR 2 0 02 03. THUS, ONCE THE CLAIM OF DEDUCTION HAS BEEN ALLOWED BY THE DEPARTMENT BY EXAMINING RELEVANT FACTS AND MATERIALS IN THE FIRST ASSESSMENT YEAR S , IT CANNOT BE W ITHDRAWN IN ANY SUBSEQUENT YEARS WHEN THERE IS NO MATERIAL CHANGE IN THE RELEVANT FACTS. IN THE PRESENT CASE, IT IS PATENT AND OBVIOUS THAT THERE IS NO MATERIAL DIFFERENCE IN THE FACTS INVOLV ED IN THE ASSESSMENT YEAR 2002 03 AND THE IMPUGNED ASSESSMENT YE AR , AS THE AGREEMENT WITH CIDCO AND ALL OTHER RELATED FACTS REMAIN SAME. THAT BEING THE CASE, IN OUR VIEW, WHEN DEDUCTION IS ALLOWED TO THE ASSESSEE IN THE FIRST YEAR OF CLAIM IT CANNOT BE WITHDRAW N IN ANY SUBSEQUENT YEAR. THE ARGUMENT BY THE DEPARTMENT TH AT THE ASSESSMENT IN THE CASE OF SOME OF THE PRECEDING ASSESSMENT YEARS HA S BEEN RE OPENED UNDER SECTION 147 CANNOT IMPROVE THE SITUATION OF THE DEPARTMENT AS THE POSITION ON THE DATE OF ASSESSMENT FOR THE ASSESSMENT YEAR 2008 09 HAS TO BE TAKEN INTO ACCOU NT. IF THAT M/S. GATEWAY DISTRIPARKS LTD. 16 IS THE CASE, IT IS VERY MUCH CLEAR THAT ON THE DATE, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT FOR ASSESSMENT YEAR 2008 09 THE UNCONTROVERTED POSITION WAS ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IA(4) IN RESPECT OF CFS WAS ALLOWED FR OM THE ASSESSMENT YEAR 2002 03 TO 2007 08 , THAT TOO , IN ASSESSMENTS COMPLETED UNDER SECTION 143(3) OF THE ACT. THEREFORE, THE DEPARTMENT HAVING ALLOWED ASSESSEES CLAIM OF DEDUCTION IN THE FIRST ASSESSMENT YEAR IT CANNOT WITHDRAW SUCH CLAI M IN THE IMPUGNED ASSESSMENT YEAR. IN THIS CONTEXT, WE REFER TO THE DECISION S OF THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT V/S WESTERN OUTDOOR INT E RACTI VE PVT. LTD., [ 2012 ] 349 ITR 309 (BOM.) AND CIT V/S PAUL BROTHERS, [1995] 79 TAXMAN 378 ( BOM. ). THUS, THERE BEING NO CHANGE IN FACTS BETWEEN THE EARLIER AND THE IMPUGNED ASSESSMENT YEAR, THE ASSESSING OFFICER CANNOT WITHDRAW ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IA(4). MOREOVER, REOPENING OF ASSESSMENT FOR PRECEDING YEARS IS NOT AN ISSUE BEFORE US. ON THE BASIS OF FACTS OBTAINING IN THE IMPUGNED ASSESSMENT YEAR, WE HAVE TO DECIDE ASSESSEES ELIGIBILITY UNDER SECTION 80IA(4). EVEN OTHERWISE ALSO, WE HAVE ALREADY NEGATED ASSESSING OFFICERS ARGUMENT IN RESPECT OF CFS NOT BEING AN INFRASTRUCTURE FACIL ITY AND N ON FULFILLMENT OF BOT / BOLT CONDITION. BEFORE CONCLUDING, WE MUST OBSERVE THAT THE LEARNED SENIOR C OUNSEL FOR THE ASSESSEE HAS RIGHTLY POINTED OUT AT THE TIME OF HEARING M/S. GATEWAY DISTRIPARKS LTD. 17 THAT THE DEPARTMENT HAS NOT RAISED ANY GROUND CHALLENGING FACTUAL FINDINGS OF THE FIRST APPELLATE AUTHORITY THAT THE ASSESSEE IS AN INFRASTRUCTURE FACILITY. EVEN IN THE COURSE OF HEARING, THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS NOT BROUGHT ANY MATERIAL BEFORE US TO DISPEL THE FACTUAL FINDINGS OF THE FIRST APPELLATE AUTHORITY EI THER WITH REGARD TO THE ISSUE TH AT CFS IS AN INFRASTRUCTURE FACILITY UNDER SECTION 80IA(4) OR THE FACT THAT THE ASSESSEE HAS FULFILLED ALL CONDITIONS OF SECTION 80IA(4) INCLUDING THE FACT THAT IT HAS DEVELOPED, OPERATED AND MAINTAINED AN INFRASTRUCTURE FAC ILITY WHICH IS SUPPOSED TO REVER T BACK TO GOVERNMENT AFTER SPECIFIED PERIOD. IN VIEW OF THE AFORESAID, WE DO NOT FIND ANY REASON TO DISTURB THE FINDINGS OF THE FIRST APPELLATE AUTHORITY ON THE ISSUE. ACCORDINGLY, WE DISMISS THE GROUND RAISED BY THE REVENUE . 12. IN THE RESULT, REVENUES APPEAL IS DISMISSED. WE NOW TAKE UP REVENUES APPEAL IN ITA NO.537 1 /MUM./2012 , FOR THE ASSESSMENT YEAR 2009 10 . GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. WHETHER THE LEARNED CIT(A) WAS JUSTIFIED IN RELYING ON THE DECISI ON 01 HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PAUL BROTHERS (216 ITR 548), IS AS MUCH AS SAID DECISION WAS RESTRICTED TO THE POWER OF CIT U/S 263 AND NO DECISION WAS RENDERED VIS A VIS WITHDRAWAL OF DEDUCTION IF THE SAME WAS GRANTED IN EARLIER YEA RS? M/S. GATEWAY DISTRIPARKS LTD. 18 2. HON'BLE SUPREME COURT IN THE CASE OF BHARAT SANCHAR NIGAM LIMITED VS. UNION OF INDIA (282 ITR 273), IN AS MUCH AS THE SAID DECISION WAS IN THE CONTEXT OF WHETHER MOBILE PHONE CONNECTION IS IN THE NATURE OF SALE OR SERVICE OR BOTH RESTRICTED TO THE POWER OF CIT U/S 263 AND NO DECISION WAS RENDERED VIS A VIS WITHDRAWAL OF DEDUCTION? 3. WHETHER THE LD.CIT (A) WAS JUSTIFIED IN RELYING ON THE DECISION OF THE HON'BLE SC IN THE CASE OF RADHASOAMI SATSANG VS. COMMISSIONER OF INCOME TAX (193 ITR 321) IN AS MUCH AS A. THE HON'BLE SC HAS ENDORSED THE VIEW THAT RES JUDICATA DOES NOT APPLY TO INCOME TAX PROCEEDINGS. B. THE REVENUE IS JUSTIFIED IN TAKING CONTRARY VIEW WHERE THERE IS A MATERIAL CHANGE TO ADOPT A DIFFERENT STANCE. C. THE HON'BLE SC ITSELF HAS ACCEPTED T HAT ITS DECISION IN THE CASE OF RADHASOAMI SATSANG IS SPECIFIC TO THE FACTS OF THE CASE AND CANNOT BE TAKEN AS HAVING GENERAL APPLICATION.' 4. WHETHER THE LD.CIT(A) WAS JUSTIFIED IN HOLDING THAT IT IS NOT OPEN FOR THE AO TO DISALLOW THE DEDUCTION GRANTED IN EARLIER YEARS, WITHOUT APPRECIATING THAT THE PROVISIONS OF 5.143(3) WOULD BECOME REDUNDANT FOR SUBSEQUENT YEARS, AND WHICH IS NOT WHAT IS PROVIDED FOR IN THE LAW? 5. WHETHER THE LD.CIT(A) WAS JUSTIFIED IN HOLDING THAT IT IS NOT OPEN FOR THE AO TO DISAL LOW THE DEDUCTION GRANTED IN EARLIER YEARS, WITHOUT APPRECIATING THAT THE AO HAD ALREADY INITIATED REMEDIAL MEASURES U/ S. 148 OF THE I - T ACT, IN RESPECT OF EARLIER YEARS? 6. WHETHER THE LD.CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.70,32,644/ - M ADE ON ACCOUNT OF DISALLOWANCE OF INTEREST EXPENSE CLAIMED U/S.36(1)(III) BY HOLDING THAT THE ASSESSEE HAD SUFFICIENT FUNDS FOR INVESTMENT IN ITS SUBSIDIARIES AND NO BORROWED FUNDS ARE DIVERTED FOR THE PURPOSE OF SUCH INVESTMENT, WITHOUT APPRECIATING THE F ACT THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, DESPITE THE OPPORTUNITY PROVIDED TO IT, THE ASSESSEE HAS FAILED TO FURNISH ANY EVIDENCE TO PROVE THE NEXUS BETWEEN THE INTEREST FREE FUNDS AVAILABLE AND INVESTMENTS MADE. 7. WHETHER THE LD.CIT(A) WAS JUSTI FIED IN DELETING THE ADDITION OF RS.70,32,644/ - MADE ON ACCOUNT OF DISALLOWANCE OF INTEREST M/S. GATEWAY DISTRIPARKS LTD. 19 EXPENSE CLAIMED U/S.36(1)(III) BY FOLLOWING THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF RELIANCE UTILITIES AND POWER LTD [20091 (313 ITR 340) WHEREIN T HE HON'BLE COURT HAS HELD THAT IT IS FOR ASSESSEE TO SHOW BY PRODUCTION OF MATERIALS THAT SHARES WERE ACQUIRED FROM FUNDS AVAILABLE IN ITS HAND WITHOUT TAKING BENEFIT OF ANY LOAN, WITHOUT APPRECIATING THAT THE FACTS OF THE CASE RELIED UPON ARE DISTINGUISHA BLE FROM THE FACTS OF THE ASSESSEES CASE. 13. GROUNDS NO.1 TO 5, RELATE TO THE ISSUE OF ALLOWANCE OF DEDUCTION UNDER SECTION 80IA(4) IN RESPECT OF CFS. 14. THE AFORESAID ISSUE RAISED BY THE REVENUE IN THIS APPEAL IS IDENTICAL TO THE ISSUE RAISED BY THE REVENUE IN ITA NO. 3654/MUM./ 2012 . THE FACTS BEING IDENTICAL, FOLLOWING OUR DECISION IN PARA 8 TO 1 1 , WHEREIN , WE HAVE UPHELD THE DECISION OF THE LEARNED COMMISSIONER (APPEALS), THE AFORESAID GROUNDS NO.1 TO 5, RAISED BY THE REVENUE ARE ALSO DISMISSED. 15. THE ADDITIONAL ISSUE RAISED BY THE REVENUE IN GROUNDS NO.6 AND 7 RELATES TO THE DECISION OF THE LEARNED COMMISSIONER (APPEALS) IN DELETING THE ADDITION OF ` 70,32,644, MADE ON ACCOUNT OF DISALLOWANCE OF INTEREST EXPENDITURE CLAIMED UNDER SECTION 36(1)(III). 16. BRIEFLY STA TED THE FACTS ARE, DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICING THAT THE ASSESSEE HAS CLAIMED INTEREST EXPENDITURE OF ` 70,32,644, ON TERM LOAN TAKEN FROM HDFC BANK CALLED UPON THE ASSESSEE TO JUSTIFY SUCH CLAIM , CONSIDERING THE FACT T HAT THE M/S. GATEWAY DISTRIPARKS LTD. 20 ASSESSEE HAS INVESTED A HUGE AMOUNT IN EQUITY SHARES OF ITS SUBSIDIARY COMPANIES. IN RESPONSE TO THE QUERY RAISED BY THE ASSESSING OFFICER, IT WAS SUBMITTED BY THE ASSESSEE THAT THE TERM LOAN WAS USED ENTIRELY FOR THE PURPOSE OF PURCHASING CAPITAL ASSET REQUIRED FOR EXPANSION O F ITS BUSINESS. TO PROVE SUCH CLAIM, THE ASSESSEE ALSO SUBMITTED LOAN AGREEMENT WITH THE BANK FOR OBTAINING TERM LOAN OF ` 25 CRORE. THE ASSESSING OFFICER NOT BEING CONVINCED WITH THE EXPLANATION OF THE ASSESSEE AND FURTHER AL LEGING THAT THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE FOR UTILISATION OF LOAN FUND OBSERVED THAT THE ASSESSEES INVESTMENT IN EQUITY SHARES OF SUBSIDIARY AS ON 31 ST MARCH 2008, STOOD AT ` 167.79 CRORE WHICH INCREASED TO ` 253.65 CRORE AS ON 31ST MARCH 20 09. THUS, THE ASSESSING OFFICER ALLEGING THAT THE ASSESSEE HAS FAILED TO ESTABLISH THE FACT THAT BORROWED FUNDS WERE NOT UTILISED FOR INVESTMENT IN SUBSIDIAR IES DISALLOWED ASSESSEES CLAIM OF EXPENDITURE TOWARDS PAYMENT OF INTEREST. WHILE DOING SO, THE ASS ESSING OFFICER ALSO OBSERVED THAT AS ENTIRE MONEY IN A BUSINESS ENTITY COMES TO A COMMON KITTY SHARE CAPITAL, TERM LOAN, WORKING CAPITAL, LOAN, SALE PROCEEDS, ETC., THEY HAVE THE SAME COLOUR. BEING AGGRIEVED OF THE DISALLOWANCE MADE BY THE ASSESSING OFFICE R THE ASSESSEE CHALLENGED THE SAME BEFORE THE FIRST APPELLATE AUTHORITY. M/S. GATEWAY DISTRIPARKS LTD. 21 17. BEFORE THE FIRST APPELLATE AUTHORITY, ASSESSEE REITERATED THE STAND TAKEN BEFORE THE ASSESSING OFFICER. THE LEARNED COMMISSIONER (APPEALS) AFTER CONSIDERING THE SUBMISSIONS O F THE AS SESSEE IN THE CONTEXT OF FACTS AND MATERIAL ON RECORD, F INDING THE ASSESSEES CLAIM THAT THERE IS NO NEXUS BETWEEN THE BORROWED FUNDS AND THE INVESTMENT MADE IN THE SUBSIDIARY TO BE CORRECT DELETED THE ADD I TION. WHILE DOING SO, HE OBSERVED THAT ASSESSEE HA D SUFFICIENT INTEREST FREE FUNDS AVAILABLE WITH HIM TO M AKE INVESTMENT IN THE SUBSIDIARIES . FOR THIS PURPOSE, HE RELIED UPON THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT V/S RELIANCE UTILITIES AND POWER LTD., [2009] 313 ITR 340 (BOM.) . 18. THE LEARNED DEPARTMENTAL REPRESENTATIVE REFERRING TO THE OBSERVATIONS MADE BY THE ASSESSING OFFICER SUBMITTED , AS THE ASSESSEE DID NOT DISCHARGE THE ONUS OF ESTABLISHING THE NEXUS BETWEEN INTEREST FREE FUNDS AND INVESTMENT MADE IN THE SUBSIDIARY ADDITION MADE BY THE ASSESSING OFFICER WAS JUSTIFIED. 19. THE LEARNED SENIOR COUNSEL FOR THE ASSESSEE , ON THE OTHER HAND, STRONGLY SUPPORTING THE ORDER OF THE FIRST APPELLATE AUTHORITY SUBMITTED , THE LOAN FROM BANK WAS TAKEN FOR A SPECIFIC PURPOSE AND AS PER THE TERMS OF THE LOA N AGREEMENT, THE BANK IS EMPOWER ED TO MAKE M/S. GATEWAY DISTRIPARKS LTD. 22 INSPECTION FOR ENSURING UTILISATION OF LOAN FOR THE PURPOSE FOR WHICH IT WAS TAKEN. THUS, IT WAS SUBMITTED BY THE LEARNED COUNSEL UNDER NO CIRCUMSTANCES, THE ASSESSEE COULD HAVE DIVERTED THE BORROWED FUNDS FOR SOM E OTHER PURPOSE. FURTHER, THE LEARNED COUNSEL SUBMITTED , WHEN THE ASSESSEE IS HAVING SUFFICIENT INTEREST FREE FUNDS AVAILABLE WITH HIM T O MAKE THE INVESTMENT, NO DISALLOWANCE OUT OF INTEREST EXPENDITURE CAN BE MADE IN VIEW OF THE DECISION OF THE HON'BLE JU RISDICTIONAL HIGH COURT IN CIT V/S RELIANCE UTILITIES AND POWER LTD. (SUPRA). 20. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AS IT APPEARS FROM THE ASSESSMENT ORDER , THE ASSESSING OFFICER HAS DISALLOWED INT EREST EXPENDITURE ONLY ON THE ALLEGATION THAT ASSESSEE HAS FAILED TO PROVE THE FACT THAT BORROWED FUNDS WERE NOT DIVERTED FOR INVESTING IN SHARE CAPITAL OF THE SUBSIDIARY. HOWEVER, ON A PERUSAL OF THE FACTS AND MATERIALS PLACED ON RECORD, IT IS SEEN THAT A S AG A INST THE INVESTMENT MADE IN THE SUBSIDIARY DURING THE RELEVANT PREVIOUS YEAR AMOUNTING TO ` 85.86 CRORE, THE ASSESSEE HAD OWN INTEREST FREE FUNDS ON ACCOUNT OF SHARE CAPITAL AND RESERVES TO THE TUNE OF ` 633 CRORE. THIS FACT HAS NOT BEEN CONTROVERTED BY THE DEPARTMENT. THEREFORE, WHEN BOTH BORROWED FUNDS AND INTEREST FREE FUNDS ARE AVAILABLE TO THE ASSESSEE , AS PER THE PRINCIPLES LAID DOWN BY THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT V/S M/S. GATEWAY DISTRIPARKS LTD. 23 RELIANCE UTILITIES AND POWER LTD. (SUPRA), THE PRESUMPTION WOUL D BE , INVESTMENT IN SUBSIDIARY IS FROM OWN INTEREST FREE FUNDS. IN THAT VIEW OF THE MATTER, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE FIRST APPELLATE AUTHORITY. MOREOVER, ON A PERUSAL OF THE LOAN AGREEMENT WITH THE BANK, IT IS VERY MUCH EVIDENT THAT THERE IS STIPULATION IN THE AGREEMENT THAT FROM TIME TO TIME THE BANK WILL MAKE INSPECTION FOR ENSURING UTILISATION OF FUNDS FOR THE PURPOSE FOR WHICH IT WAS TAKEN. THEREFORE, WHEN THERE IS NO ALLEGATION BY THE BANK THAT BORROWED FUNDS WERE NO T UTILISED FOR THE SPECIFIC PURPOSE FOR WHICH IT WAS GIVEN, THE ASSESSING OFFICER CANNOT ASSUME OR PRESUME THAT BORROWED FUNDS WERE UTILISED FOR MAKING INVESTMENT IN THE SUBSIDIARY. FOR THE AFORESAID REASONS, WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) BY DISMISSING THE GROUNDS RAISED BY THE REVENUE. 21. IN THE RESULT, REVENUES APPEAL IS DISMISSED. 22. TO SUM UP, BOTH THE APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20.11.2015 SD/ - ASHWANI TAEAJA ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED : 20.11.2015 M/S. GATEWAY DISTRIPARKS LTD. 24 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVA TE SECRETARY (DY./ASSTT. REGISTRAR) ITAT, MUMBAI