BOMBAY GOWRAKSHAK MANDALI, MUMBAI V. ITO (E) 1(1), MUMBAI

ITA 5508/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88227 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 23-12-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 01-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S PADMAJA
• Assessee Lawyers: J D MISTRY
• Keywords: Capital asset; Business income; Depreciation; Charitable institution; Benefit of exemption
• Section: 12A; 28; 2; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F, MUMBAI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO. : 5508/MUM/2014 (ASSESSMENT YEAR: 2010-2011) BOMBAY GOWRAKSHAK MANDALI, 1415-B, DALMAL TOWER, 211, NARIMAN POINT, FREE PRESS MARG, MUMBAI - 400 021 .: PAN: AAATB 3280 B VS THE INCOME TAX OFFICER(EXEMPTION)-1(1), MUMBAI PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI -400 020 (APPELLANT) !' (RESPONDENT) APPELLANT BY : SHRI J D MISTRY & SHRI NIRAJ SETH RESPONDENT BY : MS S PADMAJA /DATE OF HEARING : 24-12-2014 /DATE OF PRONOUNCEMENT : 06-02-2015 O R D E R , , , , PER VIVEK VARMA, JM: THE APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), MUMBAI, DATED 24.07.2014, WHEREIN THE FOLLOWING GROUNDS HAVE BEEN TAKEN: 1: 0 RE.: DENIAL OF EXEMPTION UNDER SECTION. 11 OF THE INCOME-TAX ACT, 1961 1:1 THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERR ED IN HOLDING THAT THE APPELLANT IS NOT ENTITLED TO THE EXEMPTION UNDER SECTION. 11 OF THE INCOME-TAX ACT, 1961. 1:2 THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS ER RED IN HOLDING THAT THE PROVISO TO SECTION 2 (15) OF THE INCOME-TA X ACT, 1961 APPLIED TO THE CASE OF THE APPELLANT. HE FURTHER ER RED IN HOLDING THAT THE APPELLANT WAS CARRYING ON BUSINESS. 1:3 THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN HOLDING THAT THE APPELLANT TRUST WAS A REVOCABLE TRUST AND IN HO LDING THAT THE ALIENATION OF THE PROPERTY WOULD AMOUNT TO THE APPE LLANT BEING EXTINCT. HE FURTHER ERRED IN HOLDING THAT THE DEVELOPMENT OF LAND WAS BEYOND THE OBJECTS OF THE APPELLANT. 1:4 THE APPELLANT SUBMITS THAT CONSIDERING THE FACT S AND CIRCUMSTANCES OF ITS CASE AND THE LAW PREVAILING ON THE SUBJECT, IT IS BOMBAY GOWRAKSHAK MANDALI ITA 5508/MUM/2014 2 ENTITLED TO THE EXEMPTION UNDER SECTION. 11 OF THE INCOME-TAX ACT, 1961 AND THE ACTION OF THE COMMISSIONER OF INCOME-T AX(APPEALS) IN DIRECTING THE ASSESSING OFFICER TO RECOMPUTE THE AP PELLANTS TOTAL INCOME WITHOUT CONSIDERING THE PROVISIONS OF SECTION 11 OF THE INCOME-TAX ACT, 1961 IS MISCONCEIVED, ERRONEOUS, INCORRECT AND ILLEGAL. 1:5 THE APPELLANT SUBMITS THAT THE ASSESSING OFFICE R BE DIRECTED TO GRANT THE APPELLANT THE EXEMPTION UNDER SECTION. 11 OF THE INCOME-TAX ACT, 1961 AND TO RE-COMPUTE ITS INCOME A CCORDINGLY. 2:0 RE.: ENHANCEMENT OF INCOME B Y THE COMMISSIONER OF INCOME-TAX (APPEALS): 2:1 THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS ER RED IN ENHANCING THE APPELLANT'S TOTAL INCOME FOR THE YEAR UNDER CONSIDERATION WITHOUT COMPLYING WITH THE MANDATORY PROVISIONS OF SECTION 251 (2) OF THE INCOME-TAX ACT, 1961. 2:2 THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS ER RED IN ALLEGING THAT AN OPPORTUNITY NN AS GIVEN TO THE APP ELLANT TO FURNISH COMMENTS AS TO WHY THE ACTIVITY IN QUESTION DOES NOT VITIATE ITS CHARITABLE STATUS IN TERMS OF THE PROVI SO TO SECTION 2 (15) OF THE INCOME-TAX ACT, 1961. 2:3 THE APPELLANT SUBMITS THAT CONSIDERING THE FACT S AND CIRCUMSTANCES OF ITS CASE AND THE LAW PREVAILING ON THE SUBJECT THE ENHANCEMENT MADE BY THE COMMISSIONER OF INCOME- TAX (APPEALS) UNDER SECTION. 251 OF THE INCOME-TAX ACT, 1961 IS MISCONCEIVED INCORRECT AND ILLEGAL. 2:4 THE APPELLANT SUBMITS THAT THE ENHANCEMENT MADE BY THE COMMISSIONER OF INCOME-TAX (APPEALS) BE STRUCK DOWN AS AB-INITIO VOID. WITHOUT PREJUDICE TO THE ABOVE: 3:0 RE.: ADDITION OF RS.32,50,00,000/- BEING THE AD VANCE RECEIVED FROM LOKHANDWALA CONSTRUCTION INDUSTRIES LTD. {ICIL ] AGAINST SALE OF PROPERTY BY APPLYING THE PROVISIONS OF SECTION 4 1(1) OF THE INCOME-TAX ACT,1961: 3:1 THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS ER RED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN M AKING AN ADDITION OF RS.32,50,00,000/- BEING THE ADVANCE RECEIVED AGA INST SALE OF PROPERTY RECEIVED FROM LCIL BY APPLYING THE PROVISI ONS OF SECTION 41 (1) OF THE INCOME-TAX ACT, 1961. 3:2 THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS ER RED IN REJECTING THE CLAIM OF THE APPELLANT THAT SECTION 41(1) OF THE IN COME-TAX ACT, 1961 DOES NOT APPLY, WITHOUT ANY DISCUSSION WHATSOEVER. HE FAILED TO APPRECIATE THAT THE APPLICABILITY OF SECTION 41(1) OF THE INCOME-TAX ACT, 1961 WOULD HAVE TO BE DETERMINED INDEPENDENTLY IRRESPECTIVE OF WHETHER OR NOT THE PROVISIONS OF SECTION 11 WAS APPLICABLE. 3:3 THE APPELLANT SUBMITS THAT CONSIDERING THE FACT S AND CIRCUMSTANCES OF ITS CASE AND THE LAW PREVAILING ON THE SUBJECT THE PROVISIONS OF SECTION 41(1) OF THE INCOME-TAX ACT,1 961 ARE NEITHER ATTRACTED/ NOR APPLICABLE AND THE STAND TAKEN BY TH E ASSESSING OFFICER IN THIS REGARD IS MISCONCEIVED, INCORRECT, ERRONEOUS AND ILLEGAL AND THE COMMISSIONER OF INCOME-TAX (APPEALS ) OUGHT TO HAVE HELD AS SUCH. 3 : 3 THE APPELLANT SUBMITS THAT THE ASSESSING OFFI CER BE DIRECTED TO DELETE THE ADDITION SO MADE BY HIM AND TO RE-COM PUTE ITS TOTAL INCOME ACCORDINGLY. 4:0 RE.: DISALLOWANCE OF RS. 2,26,836/- BEING DEPRE CIATION CLAIMED ON FIXED ASSETS ( ERRONEOUSLY CONSIDERED BY THE ASSESSING' OFFICER AS RS. 2,69,133/-): BOMBAY GOWRAKSHAK MANDALI ITA 5508/MUM/2014 3 4: 1 THE COMMISSIONER OF INCOME-TAX (APPEALS) IN CO NSEQUENCE OF DENYING THE BENEFIT OF SECTION 11 HAS ERRED IN DISA LLOWING A SUM OF RS. 2,26,836/- BEING THE DEPRECIATION FOR THE YEAR UNDER CONSIDERATION. 4:2 THE APPELLANT SUBMITS THAT CONSIDERING THE FACT S AND CIRCUMSTANCES OF ITS CASE AND THE LAW PREVAILING ON THE SUBJECT IT IS ENTITLED TO DEPRECIATION ON THE ASSETS HELD BY I T AND THE STAND TAKEN BY THE ASSESSING OFFICER IN THIS REGARD IN MI SCONCEIVED, INCORRECT, ERRONEOUS AND ILLEGAL AND THE COMMISSION ER OF INCOME- TAX (APPEALS) OUGHT TO HAVE HELD AS SUCH. 4:3 THE APPELLANT SUBMITS THAT THE ASSESSING OFFICE R BE DIRECTED TO DELETE THE DISALLOWANCE SO MADE BY HIM AND TO RE -COMPUTE ITS TOTAL INCOME ACCORDINGLY. 5:0 RE.: NON SETTING OFF OF THE BROUGHT FORWARD DEF ICIT:- 5: 1 THE COMMISSIONER OF INCOME-TAX (APPEALS) IN CONSE QUENCE OF DENYING THE BENEFIT OF SECTION 11 ERRED IN NOT PERM ITTING SETOFF OF THE UNABSORBED BROUGHT FORWARD DEFICIT OF THE EARLI ER YEARS WHILE DETERMINING THE INCOME OF THE APPELLANT FOR THE YEA R UNDER CONSIDERATION. 5: 2 THE APPELLANT SUBMITS THAT CONSIDERING THE FACTS AND CIRCUMSTANCES OF ITS CASE AND THE LAW PREVAILING ON THE SUBJECT THE UNABSORBED DEFICIT OF THE EARLIER YEARS OUGHT TO BE PERMITTED TO BE SET-OFF AGAINST ITS SURPLUS FOR THE YEAR UNDER CONS IDERATION IN COMPUTING ITS INCOME LIABLE TO TAX AND THE STAND TA KEN BY THE ASSESSING OFFICER IN THIS REGARD IS MISCONCEIVED, I NCORRECT, ERRONEOUS AND ILLEGAL AND THE COMMISSIONER OF INCOM E-TAX (APPEALS) OUGHT TO HAVE HELD AS SUCH. 5:3 THE APPELLANT SUBMITS THAT THE ASSESSING OFFICE R BE DIRECTED TO RE-COMPUTE ITS SURPLUS FOR THE YEAR AFTER SETTIN G OFF THE BROUGHT FORWARD DEFICIT. 6:0 RE.: NOT ALLOWING AND QUANTIFYING THE DEFICIT O F EARLIER YEARS TO BE CARRIED FORWARD FOR SET-OFF IN SUBSEQUENT YEARS: - 6: 1 THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS E RRED IN NOT ALLOWING THE SET OFF OF THE BROUGHT FORWARD UNABSOR BED DEFICIT AND IN NOT QUANTIFYING THE UNABSORBED DEFICIT OF THE EA RLIER YEARS TO BE CARRIED FORWARD FOR SET OFF IN THE SUBSEQUENT ASSES SMENT YEARS. 6:2 THE APPELLANT SUBMITS THAT CONSIDERING THE FACT S AND CIRCUMSTANCES OF ITS CASE AND THE LAW PREVAILING ON THE SUBJECT IT IS ENTITLED TO CARRY FORWARD THE UNABSORBED DEFICIT OF THE EARLIER YEARS TO THE SUBSEQUENT YEARS AND THE STAND TAKEN B Y THE ASSESSING OFFICER IN THIS REGARD IS INCORRECT AND E RRONEOUS AND THE COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE HELD AS SUCH. 6:3 THE APPELLANT SUBMITS THAT THE ASSESSING OFFICE R BE DIRECTED TO QUANTIFY AND ALLOW THE DEFICIT OF THE EARLIER YE ARS WHICH IS TO BE CARRIED FORWARD TO SUBSEQUENT ASSESSMENT YEARS FOR SETTING OFF AGAINST SURPLUS OF THOSE YEARS. 7:0 RE.: GENERAL 7:1 THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND/OR SUBSTITUTE ALL OR ANY OF THE FOREGOING GROUNDS OF A PPEAL AT OR BEFORE THE HEARING OF THE APPEAL. 2. THE ASSESSEE BOMBAY GOWRAKSHAK MANDALI WAS ESTABLISHED IN 1887 AND WAS REGISTERED UNDER SOCIETIES AC T (XXI) OF 1860 ON 27.04.1899 AND ALSO UNDER BOMBAY PUBLIC TRUST ACT, 1950 UNDER REGISTRATION NO. FS ON 29.12.1952. THE AIMS AND BOMBAY GOWRAKSHAK MANDALI ITA 5508/MUM/2014 4 OBJECTS OF THE TRUST ARE, AMONGST OTHER THINGS, PROTECT ION AND PRESERVATION OF HORNED CATTLE SUCH AS, COWS, OXEN, BUFFALOE S ETC., WHICH ARE USEFUL FOR AGRICULTURAL PROSPERITY OF INDIA AND THE WELFARE OF THE INDIAN PEOPLE. IN ORDER TO PROTECT AND PRESE RVE AND ACHIEVE ITS OBJECTS, THE TRUST ESTABLISHED TWO FARMS, ONE AT KANDIVALI IN MUMBAI IN 1890, ACQUIRING NEARLY THE WHOLE OF AKURLI VILLAGE AND AT BETEGAON NEAR BOISAR IN PALGHAR DISTRICT. 3. THE TRUST HAS BEEN ALLOTTED THE STATUS OF CHARITABLE ORGANIZATION WITH DIT(E), MUMBAI UNDER SECTION 12A IN 1975 AND AS PER F5 BY THE CHARITY COMMISSIONER, MUMBAI. 4. FROM THE INCEPTION, TILL DATE, THE OBJECTS OF THE TRUST HAVE REMAINED THE SAME. 5. IN THE ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAS SHOWN LIABILITY OF RS. 32,50,00,000/- IN THE BALANCE SHEET AND PUT A NOTE, MANDALI HAD RECEIVED RS 32,50,00,000/-( RUPEES THI RTY TWO CRORES FIFTY LACS IF) FROM M/S LOKHANDWALA CONSTRUCTION INDUSTRY LTD. IN CONSIDERATION OF DEVELOPMENT AGREEMENT DATED. 13TH DECEMBER, 1984 ENTERED INTO BY THE MANDALI WITH M/S LOKHANDWALA CONSTRUCTION INDUSTRIES LTD. AS PER THE TERMS OF TH E AGREEMENT TOTAL CONSIDERATION IS RS. 11,00,00,000/- (RUPEES ELEVEN CRORE ONLY) OR RS 50/- PER SQ FEET O R AVAILABLE FSI WHICHEVER IS HIGHER. TILL DATE MANDAL I AND THE DEVELOPERS HAVE NOT BEEN ABLE TO ARRIVE AT THE QUANTUM OF AVAILABLE FSI, AGREEABLE TO BOTH THE PAR TIES. AS A CONSEQUENCE THE TOTAL AMOUNT PAYABLE BY THE DEVELOPERS COULD NOT BE ASCERTAINED SO FAR. HENCE, THE AMOUNT OF RS. 32.50 CRORE RECEIVED IS SHOWN AS ADVA NCE, PENDING NEGOTIATIONS. 6. THIS NOTE HAS BEEN APPEARING OVER THE YEARS, BECAUS E A DISPUTE AROSE BETWEEN THE ASSESSEE AND LOKHANDWALA CONSTRUCTION INDUSTRIES LTD. (LCIL) OVER THE EXACT FSI, WHICH WAS AVAILABLE TO BE TRANSFERRED TO LCIL. SINCE THE ASSES SEE RECEIVED THIS AGGREGATE MONEY OVER THE YEARS, STARTING FROM 13.12.1984, I.E. 26 YEARS AGO, THE AMOUNT WAS BEING SHOWN A S AN ADVANCE. HOWEVER, THE AO CALLED FOR AN EXPLANATION, AS TO BOMBAY GOWRAKSHAK MANDALI ITA 5508/MUM/2014 5 WHY HELD IT SHOULD NOT BE TREATED AS A CASE OF CESSATION OF LIABILITY AND WHY THE SAME SHOULD NOT BE ADDED AS THE INCO ME OF THE ASSESSEE UNDER SECTION 41(1) OF THE INCOME TAX ACT, 1961. THE ASSESSEE EXPLAINED THAT THE SUM, SHOWN AS ADVANCE WAS STILL A LIABILITY, BECAUSE OF THE DISPUTE AROSE PERTAINING TO TRANSFERABLE FSI. THIS STALLED THE ENTIRE DEVELOPMENT PROJ ECT, HENCE THE AMOUNT WAS BEING SHOWN AS PAYABLE TO LCIL. A S A CONSEQUENCE, THE ASSESSEE AND LCIL ENTERED INTO LONG DRAWN CORRESPONDENCE WHICH RESULTED INTO A LEGAL DISPUTE. THIS DISPUTE ULTIMATELY WAS CULMINATED, WITH TERMINATION OF AGREEMENT AN D REVOKED THE POA GIVEN TO LCIL. ACCORDING TO THE AO, TH E ASSESSEE FAILED TO PROVIDE COPIES OF CORRESPONDENCE WITH L CIL. THE AO, THEREFORE, ADDED BACK THE SUM OF RS. 32.50 CRORES , RECEIVED AS ADVANCE AS INCOME OF THE ASSESSEE AS PER T HE PROVISIONS OF SECTION 41(1). 7. THE AO, ON THE ONE SIDE ADDED THE SUM OF RS. 32.50 CRORES AS INCOME OF THE ASSESSEE, BUT ON THE OTHER HAND ACCEP TED THE STATUS OF THE TRUST AS CHARITABLE TRUST, ALLOWED THE CLAIM OF EXEMPTION UNDER SECTION 11 OF THE ACT. 8. THE ASSESSEE APPROACHED THE CIT(A) ON THE ADDITION O F RS. 32.50 CRORES AND PRIMARILY BASED ITS ARGUMENTS ON THE FACT THAT AT NO POINT OF TIME, THE ASSESSEE HAD CLAIMED ANY DEDUC TION, NOR HAS CLAIMED IT AS A LIABILITY, LOSS, EXPENDITURE OR A TRADING LIABILITY. IT HAD ALWAYS SHOWN THE AMOUNT AS AN ADVANCE FR OM LCIL. THE AO, THEREFORE, ERRED IN MAKING THE ADDITION UNDE R SECTION 41(1), HOLDING IT TO BE CESSATION OF THE LIABILITY. 9. THE CIT(A), AFTER A DETAILED DISCUSSION SUSTAINED THE ADDITION MADE BY THE AO UNDER SECTION 41(1). HE HOWEVER W ENT A STEP FURTHER TO REVOKE THE EXEMPTION UNDER SECTION 11 OF THE ACT, ON THE GROUND THAT PROVISO TO SECTION 2(15) BECAME APPLIC ABLE, ON THE EVENT OF ALIENATION OF LAND, AS THE PROPERTY OF THE TRUST GOT BOMBAY GOWRAKSHAK MANDALI ITA 5508/MUM/2014 6 ERODED, WHICH RENDERED THE EXTINCTION OF TRUST PROPERTY. THIS TRANSACTION OF ALIENATION OF TRUST PROPERTY WAS BEYOND TH E AIMS AND OBJECTS OF THE TRUST, RESULTING IN AN EXTRANEOUS AC TIVITY, WHICH BECAME RESPONSIBLE TO EXCLUDE THE TRUST FROM ITS CHARITABLE OBJECTS. 10. AGAINST THIS ORDER OF THE CIT(A), THE ASSESSEE IS BEFOR E THE ITAT. 11. BEFORE US, THE AR SUBMITTED (A) THAT DENIAL OF EXEMPTION UNDER SECTION 11 OF THE INCOME TAX ACT, 1961 BY THE CIT(A) WAS WRONG, AS IT WAS NOT T HE SUBJECT MATTER OF APPEAL BEFORE HIM (B) IF AT ALL THE CIT(A) WANTED TO TOUCH UPON THE ISSU E WHICH IS NOT UNDER APPEAL BEFORE HIM, IT WOULD AMOUNT TO ENLARGING THE SCOPE OF THE APPEAL, WHICH IS NOT PERMITTED (C) THE CIT(A) HAS THE POWER TO ENHANCEMENT, BUT TO DE LVE INTO THAT, HE HAD FIRST TO COMPLY WITH THE PROVISIONS OF SECTION 251(2) AND THEN PROCEED WITH THE ENHANCEMENT PROCEEDINGS, AND (D) THAT THE REVENUE AUTHORITIES WERE WRONG TO INVOKE THE PROVISIONS OF SECTION 41(1) OF THE ACT. 12. THE AR SUBMITTED THAT DENIAL OF EXEMPTION UNDER SECT ION 11 BY THE CIT(A), WHICH HAD BEEN ALLOWED BY THE AO, IS A C ASE OF ENHANCEMENT, THE ACT HAS PROVIDED CERTAIN GUIDELINES, AS PROVIDED UNDER SECTION 251(2), WHEREIN THE ACT SAYS THE COMMISSIONER (APPEALS) SHALL NOT ENHANCE AN ASSESSMENT OR A PENALTY OR REDUCE THE AMOUNT OF REFUND UNLESS THE AP PELLANT HAS HAD A REASONABLE OPPORTUNITY OF SHOWING CAUSE AGAINST SUCH ENHANCEMENT OR REDUCTION . THE AR POINTED OUT THAT IN SO FAR AS THE ISSUE OF SECTION 11 WAS CONCERNED, IT WAS NOT THE SU BJECT MATTER OF APPEAL. IF AT ALL THE CIT(A) WANTED THE ISSUE TO BE CONSIDERED AND ADJUDICATED UPON, THE CIT(A) SHOULD HAVE S HOW BOMBAY GOWRAKSHAK MANDALI ITA 5508/MUM/2014 7 CAUSED THE ASSESSEE AS PER THE PROVISIONS OF SECTION 25 1(2), WHICH WAS MANDATORY AND WITHOUT WHICH, THE CIT(A) COULD NO T HAVE PROCEEDED ON A NON-ISSUE. THE AR SUBMITTED THAT E VEN THE ORDER SHEET SHOWING THE PROCEEDING BEFORE THE CIT(A), DID NOT REFER OR MENTION ANYTHING WITH REGARD TO ENHANCEMENT, WH ICH (AS PER THE ORDER SHEET COPY) READ AS, A.R. SH. CHHAPGAR WITH I.T. SINGH C.A. FOR DISCUSSION ON THE ISSUE OF OBJECTIVE OF THE TRUST A ND THE ACTIVITY AND ASSIGNMENT OF TRUST PROPERTY. HEARD CONCLUDED SD/- SD/- 27.07.2014 24.7.14 LETTER/SUBMISSION IS CONSIDERED. ORDER DICTATED. SD/- 13. THE AR PLACED RELIANCE ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS SARDARILAL AND CO., REPORT ED IN 251/864 (DEL-FB), WHEREIN IT WAS HELD, THE COURT OBSERVED THAT THERE WAS NO DOUBT THAT TH IS VIEW WAS ALSO POSSIBLE, BUT HAVING REGARD TO THE PROVISIONS OF SECTIONS 34 AND 33B, WHICH MADE PROVI SION FOR ASSESSMENT OF ESCAPED INCOME FROM NEW SOURCES, THE INTERPRETATION SUGGESTED ON BEHALF OF THE REVENUE W OULD BE AGAINST THE VIEW WHICH HAD HELD THE FIELD FOR NE ARLY 37 YEARS. (EMPHASIS, HERE ITALICISED IN PRINT, SUP PLIED). THIS DECISION BY THE HONBLE DELHI HIGH COURT, TOOK SUPPORT OF THE DECISION OF CIT VS SHAPOORJI PALLONJI MISTRY, REPORTED IN 44 ITR 891 (SC), AND THE DECISION OF CIT V RAI BAHADUR HARDUT ROY MOTILAL CHAMARIA REPORTED IN 66 ITR 443(SC). 14. THE AR SUBMITTED THAT ONCE THE AO HAS DECIDED ON AN ISSUE AND NO APPEAL HAD BEEN FILED, THE CIT(A) IS NOT ALLOWED TO SIT OVER THE ISSUE & MAKE AN ENHANCEMENT. BOMBAY GOWRAKSHAK MANDALI ITA 5508/MUM/2014 8 15. THE AR, THEREFORE, SUBMITTED THAT SINCE THE CIT(A) HAS MADE AN ENHANCEMENT THE APPEAL PROCEEDINGS FELL IN ERROR AND THEREFORE, ARE ILLEGAL. 16. WITH REGARD TO ADDITION UNDER SECTION 41(1) IS CONCERNE D, THE AR SUBMITTED THAT TILL THE PRECEDING YEAR, THE ASSESS EE HAD BEEN ALLOWED REGISTRATION FOR NOT HAVING ACTIVITIES WHICH ARE NOT IN THE OBJECTS OF THE TRUST DEED. TILL THE PRECEDING YEAR THE ADVANCE RECEIVED FROM LCIL, BEING TREATED AS ADVANCE WA S ACCEPTED AS SUCH BY THE REVENUE AUTHORITIES. THE AR SU BMITTED THAT IF AT ALL TRANSACTION WITH LICL WAS TO BE CONSIDERED OUTSIDE THE OBJECTS OF THE TRUST, IT WOULD DEEMED TO HAVE HAPP ENED IN 1984, WHEN THE AGREEMENT FOR DEVELOPMENT WITH LICL WAS SIGNED AND NOT IN 2009-10. BUT SINCE 1984 TO 2009-10 IT HAS CONSISTENTLY BEEN ACCEPTED, THAN THERE WAS NO VIOLATION OF OBJECTS. IT SQUARELY MEANS THAT THERE WAS NO SCOPE O F DENIAL OF BENEFIT UNDER SECTION 11, AND ON THE OTHER HAND, ADVANCE , WHICH HAS NEITHER BEEN TREATED AS AN EXPENSE OR LOSS IN ANY EARLIER YEAR, THE PROVISIONS OF SECTION 41(1) CANNOT GET TRIGGERED. 17. THE AR ALSO SUBMITTED THAT THE ADVANCE SO RECEIVED BY THE ASSESSEE WAS NEVER TREATED AS AN ALLOWANCE OR A DEDUC TION, WHICH COULD TRIGGER EITHER THE PROVISION OF SECTION 41(1) OR ON A WORST CASE SCENARIO TRIGGER THE DENIAL OF SECTION 11, AS T HERE WAS NO CHANGE IN THE FACTS OF THE TRANSACTION WITH LICL, WHICH WAS ALWAYS THERE. 18. THE AR PLACED RELIANCE ON THE DECISION OF ITO VS M/S VEEYENES SHIPPING SERVICES (P) LTD, ITA NO. 6468/MUM/2010, WHEREIN, IT WAS HELD, IT IS SETTLED PROPOSITION OF LAW THAT UNTIL AND UN LESS IT IS APPARENT THAT THE LIABILITY IS CEASED TO EXIST OR T HE ASSESSEE TAKES A DECISION TO TREAT THE LIABILITY AS NON EXISTENCE, PROVISIONS OF SEC. 41(1) CANNOT BE INVOK ED. SO LONG AS THE ASSESSEE IS ACCEPTING THE LIABILITY AND SHOWING THE SAME IN THE BOOKS OF ACCOUNT, IT CANNOT BE BOMBAY GOWRAKSHAK MANDALI ITA 5508/MUM/2014 9 TREATED AS CESSATION OF LIABILITY UNLESS IT IS PROV ED BY SOME MATERIAL THAT THE LIABILITY ACTUALLY CEASED TO EXIST. 5. IN THE CASE IN HAND, THE ASSESSING OFFICER HAS N OT BROUGHT OUT A CASE BY INVESTIGATION OR ANY MATERIAL TO ESTABLISH THAT THE LIABILITY IS NO LONGER IN EXISTE NCE. THE ONLY GROUND OF INVOKING THE PROVISIONS OF SEC. 41(1 ) IS NO FILING OF CONFIRMATION OF CREDITORS AND NO CHANGE I N THE OPENING AND CLOSING STOCK OF THE CREDITORS ACCOUNT . THE ASSESSEE HAS SUBMITTED THAT SOME LITIGATION IS GOIN G ON BETWEEN THE ASSESSEE AND THE CREDITORS; THEREFORE, THE ASSESSEE HAS NOT MADE THE PAYMENT TO CREDITORS. IN THESE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NO T FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) ON THIS ISSUE. IN THIS CASE ALSO THE AO PROCEEDED TO INVOKE THE PROV ISIONS OF SECTION 41(1) BECAUSE THE ASSESSEE WAS UNABLE TO PRODUC E CONFIRMATIONS. IN THE INSTANT CASE, THE REVENUE AUTHORITIE S INVOKED THE PROVISIONS BECAUSE THE ASSESSEE COULD NOT FILE DETAILS. IT IS A FACT THAT THERE WERE DEEP DIFFERENCES CONT INUING OVER THE YEARS, BETWEEN THE PARTIES TO THE AGREEMENT, BECAUSE OF THAT REASON, THE ASSESSEE COULD NOT FILE DETAILS. IN SUCH C ASE, THE AR SUBMITTED THAT THE ASSESSEE COULD NOT FILE AS MANY DETAILS, AS ASKED FOR. 19. THE AR ALSO PLACED RELIANCE ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF MAHINDRA & MAHINDRA LTD VS CIT, REPORTED IN 261 ITR 501 (BOM), WHEREIN IT WAS HELD, AS REGARDS APPLICABILITY OF SECTION 28(IV), TWO IM PORTANT FACTS WERE 'OVERLOOKED BY THE ASSESSING OFFICER. FI RSTLY, THE ASSESSEE HAD CONTINUED TO PAY INTEREST AT 6 PER CENT FOR A PERIOD OF 10 YEARS ON THE LOAN AMOUNT. THE ASSESSING OFFICER HAD NOT GONE BEHIND THE LOAN AGREEMENT. THE AGREEMENT FOR PURCHASE OF TOOLINGS W AS ENTERED INTO, MUCH PRIOR TO THE APPROVAL OF LOAN ARRANGEMENT GIVEN BY THE RBI. THEREFORE, THE LOAN AGREEMENT, IN ITS ENTIRETY, WAS NOT OBLITERATED BY SUCH WAIVER. SECONDLY, THE PURCHASE CONSIDERATION RELATE D TO THE CAPITAL ASSETS. THE TOOLINGS WERE IN THE NATURE OF DIES WHICH WERE REQUIRED BY THE ASSESSEE FOR EXPANS ION OF MANUFACTURING OF HEAVY VEHICLES. THEREFORE, THE IMPORT WAS THAT OF PLANT AND MACHINERY. THE CONSIDERATION PAID WAS FOR SUCH IMPORT. IN THE CIRCUMSTANCES, SECTION 28 (IV) WAS NOT ATTRACTED. LASTLY, AMC AGREED TO FOREGO THE PRINCIPAL AMOUNT OF LOAN AS A PART OF TAKEOVER ARRANGEMENT WITH KJC TO WHICH THE ASSESSEE WAS NOT A PARTY. THE WAIVER OF THE PRINCIPAL AMOUNT WAS UNEXPECTED IN THE CIRCUMSTANCES, SUCH WAIVER WOULD NOT CONSTITUTE BUSINESS INCOME. [PARA 7] BOMBAY GOWRAKSHAK MANDALI ITA 5508/MUM/2014 10 SO FAR AS APPLICABILITY OF SECTION 41(1) IS CONCERN ED, ONE OF THE REQUIREMENTS IS THAT THE ASSESSEE SHOULD HAV E OBTAINED A DEDUCTION IN THE ASSESSMENT FOR ANY YEAR IN RESPECT OF LOSS, EXPENDITURE OR TRADING LIABILITY I NCURRED BY THE ASSESSEE. IN THE INSTANT CASE, THE ASSESSEE HAD NOT OBTAINED SUCH ALLOWANCE OR DEDUCTION IN RESPECT OF EXPENDITURE OR TRADING LIABILITY IN THE EARLIER YEA RS. IT WAS NOT DISPUTED THAT THE ASSESSEE HAD PAID INTERES T AT 6 PER CENT OVER A PERIOD OF 10 YEARS TO KJC. IN RES PECT OF THAT INTEREST, THE ASSESSEE NEVER GOT DEDUCTION UND ER SECTION 36(1)(III) OR SECTION 37. FURTHER, TOOLINGS CONSTITUTED CAPITAL ASSET AND NOT STOCK-IN-TRADE. THEREFORE, SECTION 41(1) WAS NOT APPLICABLE. SECOND LY, ASSUMING FOR THE SAKE OF ARGUMENT THAT THE ASSESSEE HAD GOT DEDUCTION ON ALLOWANCE, EVEN THEN SECTION 4 1(1) WAS NOT APPLICABLE BECAUSE SUCH DEDUCTION WAS NOT I N RESPECT OF LOSS, EXPENDITURE OR TRADING LIABILITY. 20. THE AR THEREFORE SUBMITTED THAT THE REVENUE AUTHOR ITIES FELL IN ERROR BY INVOKING THE PROVISIONS OF SECTION 41(1). 21. THE AR, THEREFORE, PLEADED THAT THE ADDITION SO MADE B E DELETED. 22. ON THE OTHER HAND, THE DR SUBMITTED THAT THE CIT(A) HAVING COTERMINOUS POWERS CAN DO WHAT THE AO FAILED/FORGO T TO DO. THE DR PLACED RELIANCE ON THE DECISION OF HONBLE SUPRE ME COURT IN THE CASE OF CIT VS NIRBHERAM DELURAM, REPORTED IN 91 TAXMAN 181 AND ALSO THE DECISION OF ADDL CIT VS GURJARGR AVURES PVT. LTD. REPORTED IN 111 ITR 1 (SC), WHEREIN, THE HONBLE SUPREME COURT HELD, IF, AS HELD IN THIS CASE, AN ITEM OF INCOME NOTICE D BY THE INCOME-TAX OFFICER BUT NOT EXAMINED BY HIM FROM THE POINT OF VIEW OF ITS TAXABILITY OR NON-TAXABILITY CANNOT BE SAID TO HAVE BEEN CONSIDERED BY HIM, IT IS NOT POSSIBLE TO HOLD THAT THE INCOME-TAX OFFICER EXAMINING A PORTION OF THE PROFI TS FROM THE POINT OF VIEW OF ITS TAXABILITY ONLY, SHOULD BE DEE MED TO HAVE ALSO CONSIDERED THE QUESTION OF ITS NON-TAXABILITY. AS WE HAVE POINTED OUT EARLIER, THE STATEMENT OF CASE DRAWN UP BY THE TRIBUNAL DOES NOT MENTION THAT THERE WAS ANY MATERI AL ON RECORD TO SUSTAIN THE CLAIM FOR EXEMPTION WHICH WAS MADE F OR THE FIRST TIME BEFORE THE APPELLATE ASSISTANT COMMISSIONER. W E ARE NOT HERE CALLED UPON TO CONSIDER A CASE WHERE THE ASSES SEE FAILED TO MAKE A CLAIM THOUGH THERE WAS EVIDENCE ON RECORD TO SUPPORT IT, OR A CASE WHERE A CLAIM WAS MADE BUT NO EVIDENCE OR INSUFFICIENT EVIDENCE WAS ADDUCED IN SUPPORT. IN TH E PRESENT CASE NEITHER ANY CLAIM WAS MADE BEFORE THE INCOME-T AX OFFICER, NOR WAS THERE ANY MATERIAL ON RECORD SUPPORTING SUC H A CLAIM. WE, THEREFORE, HOLD THAT, ON THE FACTS OF THIS CASE , THE QUESTION BOMBAY GOWRAKSHAK MANDALI ITA 5508/MUM/2014 11 REFERRED TO THE HIGH COURT SHOULD HAVE BEEN ANSWERE D IN THE NEGATIVE. THE DR ALSO PLACED RELIANCE ON THE DECISION OF CIT VS K S DATTAREYA, REPORTED IN 197 TAXMAN 151 (KAR). 23. THE DR, WHILE REFERRING TO THE VARIOUS PARAS OF THE OR DER OF CIT(A), SUBMITTED THAT THERE WAS NO INFIRMITY IN THE ORDER O F THE CIT(A) ON THE ENHANCEMENT. 24. THE DR PLACED HEAVY RELIANCE ON THE ORDERS OF THE R EVENUE AUTHORITIES. 25. THE AR IN THE REJOINDER, SUBMITTED THAT THE RELIANCE PLACED BY THE DR ON THE CASES ARE MISPLACED, BECAUSE THE ISSUE BEFORE THE HONBLE SUPREME COURT WAS WHETHER THE ASSESSING O FFICER EXAMINED THE ISSUE OF TAXABILITY, WHEN THE ISSUE WAS NOT BE FORE HIM. BUT IN THE INSTANT CASE, THE ISSUE OF ADDITION UNDER SE CTION 41(1) WAS EXAMINED BY THE AO ALONG WITH THE ALLOWANCE OF BENEFIT OF EXEMPTION UNDER SECTION 11. 26. WE HAVE HEARD THE ARGUMENTS AND HAVE PURSUED THE ORDERS OF THE REVENUE AUTHORITIES, EVIDENCES AND CASE LAW S CITED BEFORE US. 27. THE FACT THAT THE ASSESSEE HAD ENTERED INTO A DEVE LOPMENT AGREEMENT IN 1984 WITH LICL AND RECEIVED ADVANCE THER EFROM IS NOT DISPUTED. 28. THE FACT THAT TILL PRECEDING YEAR, THE ADVANCE SO RECE IVED IN 1984, WAS TREATED AS ADVANCE AND ACCEPTED BY THE REV ENUE AUTHORITIES IS ALSO NOT DISPUTED. 29. THE FACT THAT FROM 1984 TILL DATE THERE HAS BEEN NO C HANGE IN THE STATUS OF THE TRANSACTION, WHICH IS STANDING STILL, AN D NECK DEEP IN LITIGATION, IS ALSO NOT DISPUTED. BOMBAY GOWRAKSHAK MANDALI ITA 5508/MUM/2014 12 30. THE FACT THAT THE REVENUE AUTHORITIES HAD BEEN ACCE PTING THE STATUS FROM 1984, TILL DATE, AND ALLOWING EXEMPTION UNDER SECTION 11 IS ALSO NOT DISPUTED. 31. THE ISSUE BEFORE US HAS BECOME TWO FOLD, I.E. FIRSTLY, INVOCATION OF SECTION 41(1) BY THE AO AND SUSTAINING THEREO F BY THE CIT(A) AND SECONDLY, REVOCATION AND DENIAL OF EXEMPTION UNDER SECTION 11, SUO MOTO TAKEN UP BY THE CIT(A). 32. TAKING UP THE ISSUE OF ADDITION MADE UNDER SECTION 41 (1). FOR THE AMOUNT TO BE ADDED BACK UNDER SECTION 41(1) SH OULD BEAR THE CHARACTER OF INCOME. BUT NOWHERE FROM THE ORDE RS OF THE REVENUE AUTHORITIES DO WE FIND THAT IN THE YEAR UNDE R CONSIDERATION SOMETHING NEW HAPPENED, WHICH CONVERTED TH E ADVANCE INTO A REMISSION AND THE LIABILITY BECAME UN PAYAB LE, TO BE TREATED AS INCOME. 33. IN SUCH A SITUATION, THE INVOCATION OF PROVISIONS OF SEC TION 41(1) IN OUR OPINION IS NOT CALLED FOR AND THEREFORE, DESERVES TO BE DELETED ON THE FACTS AS WELL AS AFTER CONSIDERING THE R ATIOS LAID DOWN BY THE DECISIONS AS REFERRED TO ABOVE. 34. IN SO FAR AS DENIAL/REVOCATION OF EXEMPTION UNDER SECT ION 11 IS CONCERNED, WE FIND THAT THE AO ALLOWED THE SAME, BU T THE CIT(A) TOOK UP THE ISSUE SUO MOTO , WITHOUT SHOWING CAUSE THE ASSESSEE ABOUT HIS INTENTION OF ENCROACHING ON THE NON IS SUE AND CONTEMPLATING ENHANCEMENT. 35. THE CIT(A) HELD THAT PROVISO TO SECTION 2(15) BECAME APPLICABLE, BECAUSE THE TRANSACTION ENTERED INTO BY THE A SSESSEE WAS OUTSIDE THE SCOPE AND OBJECT OF THE TRUST AS IT BE CAME PROFIT MOTIVE. HOLDING SO, THE CIT(A) DID NOT GIVE ANY REASON, THAT HOW IN THE CURRENT YEAR, THE OBJECTS WERE ALIENATED. IF AT ALL SOME JUGGLE WAS DONE WITH THE OBJECTS, IT WAS DONE IN 1984 AN D NOT IN THE YEAR UNDER CONSIDERATION. BOMBAY GOWRAKSHAK MANDALI ITA 5508/MUM/2014 13 36. WE FEEL THAT TO GAIN SOME BROWNIE POINTS, THE CIT(A) WEN T BEYOND AND IN COMPLETE DISREGARD TO THE PROVISIONS OF SEC TION 251(2), BY NOT ALLOWING THE ASSESSEE TO EVEN KNOW ABOUT T HE ENHANCEMENT BEING CONTEMPLATED BY HIM. THIS, IN OUR OPINION MADE THE ADDITION, CONSEQUENCE OF ENHANCEMENT, BY WAY O F DENYING THE EXEMPTION UNDER SECTION 11, FALLACIOUS. EVEN IF WE ACCEPT THE ARGUMENTS OF THE DR THAT THE CIT(A) WAS EXE RCISING HIS COTERMINOUS POWERS ON THE ISSUE OF ALLOWANCE OF EXEMP TION UNDER SECTION 11, EVEN THEN THE ARGUMENT OF THE DR DES ERVES TO BE REJECTED, BECAUSE, THE STATUTE ITSELF HAS GIVEN THE SA FE GUARD UNDER SECTION 251(2), AS MENTIONED EARLIER. IN SUCH A CASE , ACCEPTING OR SUSTAINING THE ORDER OF THE CIT(A) IN DENYING THE EXEMPTION UNDER SECTION 11, WOULD AMOUNT TO INJUSTICE TO THE ASSESSEE. 37. IN THESE CIRCUMSTANCES, WE SET ASIDE THE ORDER OF CI T(A) AND RESTORE THE ORDER OF AO, ALLOWING THE EXEMPTION UNDE R SECTION 11. 38. IN SO FAR AS ADDITION ON ACCOUNT OF SECTION 41(1) IS CONCERNED, WE SET ASIDE THE ORDER OF CIT(A) AND DIRECT TH E AO TO DELETE THE ADDITION MADE UNDER SECTION 41(1). 39. GROUNDS NO. 1, 2 & 3 ARE THEREFORE ALLOWED. 40. GROUND NO. 4 PERTAINS TO DISALLOWANCE OF RS. 2,26,836/-, BEING DEPRECIATION FOR THE YEAR. 41. AT THE TIME OF HEARING, THE AR SUBMITTED THAT THE ISS UE IS COVERED BY THE DECISIONS OF HONBLE BOMBAY HIGH COURT IN THE CASE OF DIT (EX) VS FRAMJEE CAWASJEE INSTITUTE, REPORTED IN 109 CTR 463 (BOM), WHEREIN IT HAS BEEN HELD, DEPRECIATION O DEPRECIABLE ASSETS HAD TO BE TAKEN INTO ACCOUNT IN COMPUTING INCOME OF TRUST ALTHOUGH THE AMOUNT SPENT ON ACQUIRING SUCH ASSETS HAD BEEN TREA TED BOMBAY GOWRAKSHAK MANDALI ITA 5508/MUM/2014 14 AS APPLICATION OF INCOME OF TRUST IN THE YEAR IN WH ICH ASSETS WERE ACQUIRED; ANSWER BEING SELF-EVIDENT, REFERENCE DECLINED. AND IN THE CASE OF CIT VS INSTITUTE OF BANKING PERSONNEL SELECTION REPORTED IN 264 ITR 110 (BOM), WHEREIN IT HAS BEE N HELD, IN VIEW OF THE DECISION IN CIT V. MUNISUVRAT JAIN 1994 TAX LR 1084, IT WAS HELD THAT THE TRIBUNAL WAS RIGH T IN LAW IN DIRECTING THE ASSESSING OFFICER TO ALLOW DEPRECIATION ON THE ASSETS THE COST OF WHICH HAD BE EN FULLY ALLOWED AS APPLICATION OF INCOME UNDER SECTIO N 1] IN THE PAST YEARS. IN VIEW OF THE DECISION IN DIRECTOR OF INCOME-TAX (EXEMPTION) V. FRAMJEE CAWASJEE INSTITUTE [1993] 10 9 CTR 463 (BORN.), IT WAS TO BE HELD THAT THE TRIBUNA L WAS JUSTIFIED IN LAW IN DIRECTING THE ASSESSING OFFICER TO ALLOW DEPRECIATION ON ASSETS RECEIVED ON TRANSFER, WHEN T HE ASSESSEE HAD NOT INCURRED THE COST OF ACQUIRING THE ASSETS. INCOME DERIVED FROM THE TRUST PROPERTY HAS ALSO GOT TO BE COMPUTED ON COMMERCIAL PRINCIPLES AND IF COMMERCIAL PRINCIPLES ARE APPLIED, THEN ADJUSTMENT OF EXPENSES INCURRED BY THE TRUST FOR CHARITABLE AND RELIGIOUS PURPOSES IN THE EARLIER YEARS AGAINST THE INCOME EARNED BY THE TRUST IN THE SUBSEQUENT YEAR WILL HAV E TO BE REGARDED AS APPLICATION OF INCOME OF THE TRUST F OR CHARITABLE AND RELIGIOUS PURPOSES IN THE SUBSEQUENT YEAR IN WHICH ADJUSTMENT HAS BEEN MADE HAVING REGARD TO THE BENEVOLENT PROVISIONS CONTAINED IN SECTION 11 A ND SUCH ADJUSTMENT WILL HAVE TO BE EXCLUDED FROM THE INCOME OF THE TRUST UNDER SECTION 11(1)(A). ACCORDI NGLY, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE INSTAN T CASE, THE TRIBUNAL WAS JUSTIFIED IN LAW IN ALLOWING CARRY ING FORWARD OF THE DEFICIT OF EARLIER YEAR AND SET IT O FF AGAINST THE SURPLUS OF SUBSEQUENT YEAR. 42. THE AR, THEREFORE, PLEADED THAT DEPRECIATION MUST BE ALLOWED. 43. THE DR PLACED RELIANCE ON THE DECISION OF REVENUE AUTHORITIES. 44. WE HAVE HEARD THE ARGUMENTS AND HAVE GONE THROUG H THE CASES CITED, WHICH CLEARLY SAYS THAT DEPRECIATION CANNOT BE DENIED. RESPECTFULLY, THEREFORE, FOLLOWING THE DECISIONS OF HONB LE BOMBAY HIGH COURT, WE SET ASIDE THE ORDER OF THE CIT(A) A ND DIRECT THE AO TO ALLOW THE RIGHTFUL CLAIM OF DEPRECIATION. BOMBAY GOWRAKSHAK MANDALI ITA 5508/MUM/2014 15 45. GROUND NO. 5 & 6 PERTAIN TO ALLOWANCE OF BROUGHT FORWA RD DEFICIT & TO BE CARRIED FORWARD. 46. APPLYING THE SAME ANALOGY AS IN GROUND NO. 4, WE SET ASIDE THE ORDER OF CIT(A) AND DIRECT THE AO TO ALLOW THE BROUGHT FORWARD DEFICIT AND IF THE DEFICIT STILL REMAINS, ALLOW IT TO BE CARRIED FORWARD. 47. GROUNDS NO. 4, 5 & 6 ARE THEREFORE, ALLOWED. 48. IN THE RESULT, THE APPEAL AS FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH FEBRUARY, 2015. SD/- SD/- ( ) ( ) (N.K. BILLAIYA) ( VIVEK VARMA ) ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATE: 6 TH FEBRUARY, 2015 !%/ COPY TO:- 1) / THE APPELLANT. 2) !' / THE RESPONDENT. 3) THE CIT(A) -I, MUMBAI. 4) THE DIT (EXEM), MUMBAI. 5) '()* !%+ , , / THE D.R. F BENCH, MUMBAI. 6) *,- . COPY TO GUARD FILE. /0+ / BY ORDER / / TRUE COPY / / 1 / 2 3 , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN, SR.PS