Dholu Construction & Projects Ltd., Ahmedabad V. The DCIT, (OSD), Range-1, Ahmedabad

ITA 552/AHD/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8893 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 15-03-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 21-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Depreciation; Additional depreciation; Proportionate interest
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 32(1)(iia); 80IA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.551 & 552/AHD/2014 (ASSESSMENT YEARS: 2009-10 & 2010-11) DHOLU CONSTRUCTION & PROJECTS LTD. 401, GALA ARGOS, B/H. HARIKRUPA TOWER, GUJARAT COLLEGE, ELLISBRIDGE, AHMEDABAD 380006 APPELLANT VS. ACIT, RANGE-1, AHMEDABAD RESPONDENT PAN: AABCD5760E /BY ASSESSEE : SHRI S. N. SOPARKAR, A.R. /BY REVENUE : SHRI PRASOON KABRA, SR. D.R. /DATE OF HEARING : 15.03.2017 /DATE OF PRONOUNCEMENT : 20.03.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THESE TWO ASSESSEES APPEALS FOR ASSESSMENT YEARS 2 009-10 & 2010-11 ARISE AGAINST THE CIT(A)-VI, AHMADABADS SEPARATE O RDERS DATED 05.12.2013 AND 06.12.2013, IN APPEAL NOS. CIT(A)-VI/ADDL.CIT/R .1/227/11-12 & ITA NOS. 551 & 552/AHD/2014 (DHOLU CONSTRUCTION & P ROJECTS LTD. VS. ACIT) A.YS. 2009-10 & 2010-11 - 2 - CIT(A)-VI/DC(OSD)/R.1/195/12-13; RESPECTIVELY, IN P ROCEEDINGS U/S.143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. WE COME TO ASSESSEES PLEADINGS IN BOTH APPEALS. IT RAISES TWO SUBSTANTIVE GROUNDS IN FIRST ASSESSMENT YEAR INTER ALIA CHALLENGING ADDITIONAL DEPRECIATION DISALLOWANCE OF RS.67,20,175/- CLAIMED U/S. 32(1)(IIA) OF THE ACT AND ALLOCATION OF EXPENSES TO WINDMILL AND MINING BUSINESSES RESULTING IN CORRESPONDING DISALLOWANCE/ADDITION OF RS.47,17,803 /-; MADE BY THE ASSESSING OFFICER IN ASSESSMENT ORDER DATED 21.12.2 011 AND AFFIRMED IN THE LOWER APPELLATE PROCEEDINGS. THE ASSESSEES LATTER APPEAL RAISES A SOLE SUBSTANTIVE GROUND ARISING FROM SIMILAR ALLOCATION OF EXPENDITURE RESULTING IN DISALLOWANCE OF RS.60,05,017/- MADE BY BOTH THE LOW ER AUTHORITIES IN ASSESSMENT YEAR 2010-11. 3. WE COME TO ASSESSEES FIRST SUBSTANTIVE GROUND R AISING THE ISSUE OF ADDITIONAL DEPRECIATION. THIS ASSESSEE IS A EXCAVA TION WORK CONTRACTOR. IT CLAIMED ADDITIONAL DEPRECIATION AMOUNT IN QUESTION OF RS.67,20,175/- ON NEW PLANT AND MACHINERY ADDED DURING THE RELEVANT PREVI OUS YEAR AS DEPLOYED AT THE GUJARAT MINERAL DEVELOPMENT CORPORATION (GMDC) AND RAJASTHANS STATE MINES AND MINERALS (RSMM), LIGNITE MINES AT T ADKESHWAR AND BARMER ; RESPECTIVELY. THE ASSESSEES CASE WAS TH AT IT WAS MANUFACTURING /PRODUCING AN ARTICLE OR THING AS CONTEMPLATED UNDE R THE ABOVE DEDUCTION PROVISION. THE ASSESSING OFFICER OBSERVED IN ASSES SMENT ORDER DATED 21.12.2011 THAT THE ASSESSES ROLE IN MINING IS BAS ICALLY THAT OF A CONTRACTOR EXECUTING CONTRACT WORK OF REMOVAL OF OVER BURDEN A ND EXTRACTION OF LIGNITE FROM THE ABOVE TWO CORPORATIONS MINES. HE APPEARS TO HAVE FURTHER REJECTED ASSESSEES CONTENTION BASED ON HONBLE APEX COURTS DECISION IN CIT VS. SESA GOA LTD. [2005] 271 ITR 331 THAT SIMILAR MINERAL OR PROCESSING / EXCAVATION AMOUNTS TO PRODUCTION FOR THE PURPOSE OF INVESTMENT ALLOWANCE U/S. 32A OF ITA NOS. 551 & 552/AHD/2014 (DHOLU CONSTRUCTION & P ROJECTS LTD. VS. ACIT) A.YS. 2009-10 & 2010-11 - 3 - THE ACT BY OBSERVING THAT THE SAID APPELLANT WAS A FIRST OF ALL A MINING COMPANY WHICH WAS PRODUCING THE ORE FROM THE MINE I N QUESTION. HE THEN REFERRED TO SECTION 2(29BA) IN THE ACT DEFINING MA NUFACTURE AS RESULTING IN TRANSFORMATION OF AN OBJECT TO A NEW AND DISTINCT O NE. THE ASSESSING AUTHORITY WAS ACCORDINGLY OF THE VIEW THAT THE ASSE SSEE NEITHER WAS A MANUFACTURER NOR PRODUCER OF THE LIGNITE IN QUESTIO N SO AS TO BE HELD ELIGIBLE FOR IMPUGNED ADDITIONAL DEPRECIATION IN QUESTION SI NCE IT WAS MAINLY PARTICIPATING IN DEPLOYING EXCAVATORS AND DUMPERS T O DELIVER LIGNITE ORE TO THE ABOVE TWO CORPORATIONS. ALL THIS RESULTED IN THE I MPUGNED DISALLOWANCE OF RS.67,20,175/-. 4. WE NOW ADVERT TO THE LOWER APPELLATE ORDER UNDER CHALLENGE TO NOTICE THAT THE CIT(A) HAS ALSO AFFIRMED ASSESSING OFFICER S ACTION IN THE ORDER UNDER CHALLENGE. HIS FINDINGS ARE REPRODUCED AS FO LLOWS: 3.3. IN THE ASSESSMENT ORDER A.O. OBSERVED THAT TH E APPELLANT HAD CLAIMED ADDITIONAL DEPRECIATION OF RS.67,20,175/- ON THE NE W PLANT AND MACHINERY ADDED DURING THE YEAR; APPELLANT WAS A CONTRACTOR ENGAGED IN THE EXTRACTION AND DELIVERY OF THE LIGNITE FROM THE MINES OWNED BY GUJART MINER AL DEVELOPMENT CORPORATION (GMDC) AND RAJASTHAN STATE MINES & METALS (RSMM); A PPELLANT WAS NOT OWNER OF THE MINES; IT WAS NOT OWNING OR SAILING ORE EXTR ACTED OUT OF THE MINES; IT WAS EARNING INCOME FROM THE JOB WORK OF EXTRACTION; THE REFORE APPELLANT COULD NOT BE SAID TO BE ENGAGED IN THE BUSINESS OF MANUFACTURE O R PRODUCTION OF AN ARTICLE OR THING; IN THE CASE OF CIT VS. SESA GOA LTD. (27 ITR 331) (2005) (RELIED ON BY THE LD.AR), THE ASSESSEE WAS OWNING THE MINES AND IT WA S ALSO PROCESSING ORE AND THEREFORE THE SAID CASE LAW IS NOT APPLICABLE TO TH E FACTS OF THE CASE; APPELLANT DEPLOYED ONLY EXCAVATORS AND DUMPERS TO EXCAVATE TH E ORE AND DELIVER IT TO THE MINING COMPANIES; APPELLANT WAS MERELY CONTRACTOR F OR JOB WORK AND THEREFORE IT COULD NOT BE SAID TO HAVE BEEN ENGAGED IN MANUFACTU RE OR PRODUCTION. ACCORDINGLY HE DISALLOWED THE CLAIM OF ADDITIONAL DEPRECIATION. 3.4. THE CONTENTION OF THE LD.AR IS THAT IN THE LIG HT OF THE GUJARAT HIGH COURT DECISION IN THE CASE OF CIT VS. GENERAL CONTRACT CO . (287 ITR 416) THE ACTIVITY OF MINING AND EXCAVATION WAS ONE OF PRODUCTION AND THE REFORE ENTITLED TO ADDITIONAL DEPRECIATION. 3.5. I HAVE CONSIDERED THE FACTS OF THE MATTER. IT IS SEEN THAT THE DECISION OF THE GUJARAT HIGH COURT RELIED ON BY THE LD. A.R. WAS RE VERSED BY THE HON'BLE SUPREME COURT. THE SUPREME COURT IN THE, CASE OF CIT VS. M/ S.GENERAL CONTRACT CO. IN ITS ORDER DTD. 11.09.2012 IN CIVIL APPEAL NO.3207 OF 20 07 HELD AS UNDER:- ITA NOS. 551 & 552/AHD/2014 (DHOLU CONSTRUCTION & P ROJECTS LTD. VS. ACIT) A.YS. 2009-10 & 2010-11 - 4 - 'A SHORT QUESTION 'WHICH ARISES FOR DETERMINATION I N THIS CIVIL APPEAL IS, WHETHER THE ASSESSEE WAS ENTITLED TO INVESTMENT ALL OWANCE UNDER SECTION 32A (2) (B) OF THE INCOME TAX ACT, 1961 ? SECTION 32A(2)(B) OF INCOME TAX ACT, 1961, AS IT ST OOD AT THE RELEVANT TIME, HAS BEEN EXTENSIVELY QUOTED IN THE ORDER OF THE ASS ESSING OFFICER (SEE PAGE 37 OF THE PAPER BOOK). THE ASSESSING OFFICER CAME T O THE CONCLUSION THAT THE ASSESSEE CLAIMED TO BE IN THE BUSINESS OF MININ G; THE ONLY ACTIVITY UNDERTAKEN BY IT WAS REMOVAL OF OVERBURDEN/EARTH EX CAVATION WORK CARRIED OUT FOR FACILITATING MINING AT LIGNITE PROJECT SITE AT RAJPARDI AND PANDHRO; AND THAT THE ASSESSEE WAS MERELY A LABOUR CONTRACTO R. THESE FINDINGS OF FACT HAVE BEEN UP HELD BY THE INCOME TAX APPELLATE TRIBUNAL AND THEY HAVE NOT EVEN BEEN DISCUSSED IN THE IMPUGNED JUDGMENT OF THE HIGH COURT. FOR THE AFORE-SAID REASONS, THE CIVIL APPEAL FILED BY THE DEPARTMENT IS ALLOWED WITH NO ORDER AS TO COSTS. ' KEEPING IN VIEW THE OBSERVATIONS OF THE A.O. IN THE ASSESSMENT ORDER AND THE SUPREME COURT DECISION REFERRED TO ABOVE, I HOLD TH AT APPELLANT'S ACTIVITY IS NOT ONE OF MANUFACTURE OR PRODUCTION AND ACCORDINGLY IT IS NOT ENTITLED TO ADDITIONAL DEPRECIATION. IMPUGNED DISALLOWANCE OF ADDITIONAL D EPRECIATION OF RS.67,20,175/- IS UPHELD. THIS GROUND OF APPEAL IS DISMISSED. 5. HEARD BOTH SIDES STRONGLY REITERATING THEIR RESP ECTIVE STANDS AGAINST AND IN SUPPORT OF THE IMPUGNED DISALLOWANCE. WE FIRST COME TO THE STATUTORY PROVISION ITSELF. SECTION 32(1)(IIA) ADMITTEDLY IS A DEDUCTION PROVISION IN THE NATURE OF ADDITIONAL DEPRECIATION ADMISSIBLE TO AN ASSESSEE ENGAGED IN THE BUSINESS OF MANUFACTURE OR PRODUCTION OF ANY ARTICL E OR A THING. THE ASSESSEE UNDISPUTEDLY DOES NOT SEEK TO TREAT ITSELF AS A MAN UFACTURER OF THE LIGNITE ORE. ITS CASE IS THAT IT IS A PRODUCER OF THE SAID MINE RAL ORE. WE FURTHER FIND THAT HONBLE APEX COURTS DECISION IN SESA GOA CASE (SUP RA) HELD THAT SUCH AN ACTIVITY OF MINING OF A MINERAL ORE AMOUNTS TO PROD UCTION FOR THE PURPOSE OF INVESTMENT ALLOWANCE U/S.32(A) OF THE ACT. BOTH TH E LEARNED REPRESENTATIVES ARE FAIR ENOUGH IN AGREEING THAT THE SAID INVESTMEN T ALLOWANCE PROVISION IS PARA MATERIA TO THAT OF THE INSTANT ADDITIONAL DEPR ECIATION PROVISION. THE DISPUTE HOWEVER BETWEEN THE LEARNED REPRESENTATIVES IS THAT THE ASSESSEE CANNOT BE HELD TO BE A PRODUCER SINCE IT IS NOT OWNER OF THE LIGNI TE MINES AS IT IS PERFORMING A CONTRACTORS JOB IN LABOUR AND EXCAVATION. WE WISH TO OBSERVE FIRST OF ALL THAT WE ARE DEALING WITH A DEDUCTION PROVISION; AND THAT TOO IN THE NATURE OF ITA NOS. 551 & 552/AHD/2014 (DHOLU CONSTRUCTION & P ROJECTS LTD. VS. ACIT) A.YS. 2009-10 & 2010-11 - 5 - ADDITIONAL DEDUCTION RELIEF OVER AND ABOVE THE NORM AL ONE WHICH IS TO BE LIBERALLY CONSTRUED. A PERUSAL OF SECTION 32(1)(II A) MAKES IT CLEAR THAT THERE IS NO CONCEPT OF OWNERSHIP POSTULATED THEREIN AS A PRE-CONDITION SO AS TO CLAIM THE IMPUGNED ADDITIONAL DEPRECIATION AS THE T HRUST OF THE SOVEREIGN IS TO GRANT THE IMPUGNED RELIEF TO AN ASSESSEE MANUFACTUR ING OR PRODUCING AN ARTICLE OR THING THEREIN. WE FURTHER REPEAT THAT M INING ACTIVITY IN ITSELF STANDS HELD AS PRODUCTION (SUPRA). THE QUESTION THEREFORE THAT ARISES FOR OUR APT ADJUDICATION IS AS TO WHETHER THE ASSESSEE IS ENGAG ED IN MINING ITSELF OR NOT. 6. WE PROCEED FURTHER TO ADJUDICATE THE ABOVE FRAME D QUESTION AND NOTICE FIRST OF ALL THAT THE ASSESSEE HAS UNDISPUTEDLY EMP LOYED VARIOUS HEAVY DUTY MACHINERIES OF MOTOR GRADING, DOZING, EXCAVATION ET C. IN THE RELEVANT PREVIOUS YEARS. PAGES 1 TO 32 OF THE PAPER BOOK CO NTAIN ASSESSEES AGREEMENTS ENTERED WITH THE ABOVE TWO MINING CORPOR ATIONS. FIRST ONE IS ASSESSEES AGREEMENT WITH THE GUJARAT MINERAL DEVEL OPMENT CORPORATION. PAGE 2 SPECIFICALLY STATES THAT ASSESSEES SCOPE OF WORK INCLUDES MINING OF LIGNITE AND LOADING OF CONSUMER TRUCKS THERE WITH A FTER EMPLOYING HYDROLIC EXCAVATOR AND OTHER EQUIPMENTS. IT IS FURTHER SUPP OSED TO REMOVE OVER BURDEN ARISING FROM THE SAID ACTIVITY. THE ASSESSE E ADMITTEDLY IS REIMBURSED ON TONNAGE BASIS. THE FACT HOWEVER REMAINS THAT TH IS PAYMENT STRUCTURE IS NOT RELEVANT S WE ARE DEALING WITH NATURE OF ASSESSEES ACTIVITY. THIS FORMER AGREEMENT MAKES IT CLEAR THAT THE ASSESSEE ITSELF I S ENGAGED IN MINING ACTIVITY SO AS TO BE CALLED A PRODUCER OF THE ORE IN QUESTIO N. IT IS FURTHER REVEALED FROM ASSESSEES LATTER AGREEMENT WITH THE RAJASTHAN MINE S & MINERALS THAT THE SITUATION IS NO DIFFERENT SINCE THE ASSESSEE HAS TO EXCAVATE LIGNITE ORE AFTER DEPLOYING ALL OF ITS MACHINERY. WE THEREFORE TAKE INTO ACCOUNT ALL THESE CONTRACTUAL TERMS TO OBSERVE THAT THE ASSESSEE IS I TSELF ENGAGED IN MINING ACTIVITY RATHER THAN TO BE A LABOUR CONTRACTOR OR A MERE MACHINES PROVIDER. ITA NOS. 551 & 552/AHD/2014 (DHOLU CONSTRUCTION & P ROJECTS LTD. VS. ACIT) A.YS. 2009-10 & 2010-11 - 6 - 7. LEARNED DEPARTMENTAL REPRESENTATIVE FILES BEFORE US HONBLE APEX COURTS DECISION IN GENERAL CONTRACTS COMPANY (SUPR A) DISALLOWING INVESTMENT ALLOWANCE TO THE SAID ASSESSEE REMOVING OVER BURDEN / EARTH EXCAVATION WORK CARRIED OUT FOR FACILITATING MINING BY WAY OF UNDERTAKING LABOUR CONTRACT ACTIVITY. THE SAME HOWEVER DOES NO T APPLY TO FACTS OF THE INSTANT CASE WHEREIN THE INSTANT ASSESSEE IS ITSELF ENGAGED IN MINING ACTIVITY. WE THUS ACCEPT ASSESSEES FORMER SUBSTANTIVE GROUND TO DELETE THE IMPUGNED DISALLOWANCE OF ADDITIONAL DEPRECIATION CLAIM OF RS .67,20,175/- IN QUESTION. 8. WE NOW ADVERT TO ASSESSEES LATTER SUBSTANTIVE G ROUND CHALLENGING ADHOC ALLOCATION OF EXPENSES BETWEEN WINDMILL AND M INING BUSINESS RESULTING IN DISALLOWANCE OF RS.47,17,803/-. THERE IS NO DIS PUTE THAT THIS ASSESSEE HAS INSTALLED A WINDMILL UNITS IN TIRUNALVELI (TAMILNAD U) FOR GENERATING WIND POWER. ITS INCOME DERIVED THEREFROM IS ADMITTEDLY ENTITLED FOR SECTION 80IA DEDUCTION. THE RELEVANT FIGURE PERTAINING TO THIS D EDUCTION IN THE IMPUGNED ASSESSMENT YEAR READS A FIGURE OF RS.59.76LACS. TH E ASSESSING OFFICER SOUGHT TO ALLOCATE ITS EXPENSES BETWEEN THE TWO BUSINESSES . THESE EXPENSES ARE IN THE NATURE OF AUDIT FEE, BANK COMMISSION, BOOKS, IN TERNET, STATIONARY AND PRINTING, TRAVELLING, PROFESSIONAL FEE, TELEPHONE E XPENSES, DIRECTORS REMUNERATION, DEPRECIATION AND INTEREST ETC. THE A SSESSING OFFICER WENT BY PRORATE FIGURES OF THE TWO BUSINESSES TURNOVER TO A LLOCATE ITS ABOVE DIRECT/INDIRECT EXPENDITURE RESULTING IN ADDITION O F RS.47.70LACS IN QUESTION TO BE PERTAINING TO THE WIND POWER BUSINESS HEREIABOVE . 9. THE CIT(A) UPHOLDS ASSESSING OFFICERS FINDINGS AS UNDER: 4.2. IN THE ASSESSMENT ORDER A.O. OBSERVED THAT APP ELLANT HAD CLAIMED DEDUCTION U/S.80IA ON THE INCOME FROM THE WIND MILL. AS SEEN FROM THE PROFIT & LOSS ACCOUNT THE PROFIT FROM THE ACTIVITY WAS ONLY RS.24,04,044/ -; WHEREAS AS PER FORM 10CCB THE DEDUCTION CLAIMED WAS RS,59,76,775/-; AS PER SE CTION 80IA THE PROFITS AND GAINS DERIVED WERE TO BE COMPUTED AS IF THE ELIGIBL E BUSINESS WAS ONLY SOURCE OF INCOME OF THE ASSESSEE DURING THE YEAR; THEREFORE T HE, DEPRECIATION AND ITA NOS. 551 & 552/AHD/2014 (DHOLU CONSTRUCTION & P ROJECTS LTD. VS. ACIT) A.YS. 2009-10 & 2010-11 - 7 - PROPORTIONATE INTEREST AND COMMON ADMINISTRATION EX PENSES WERE TO BE REDUCED FROM THE INCOME; APPELLANT HAD REDUCED ONLY AMC CHA RGES OF RS.12,30,966/- WHILE COMPUTING THE DEDUCTION; HOWEVER, THE DEPRECIATION AS PER I.T. ACT, INTEREST AND COMMON EXPENSES WERE NOT DEDUCTED; THE EXPENSES NAR RATED AT PARA-4.4 OF THE ASSESSMENT ORDER WERE COMMON EXPENSES NOT ATTRIBUTA BLE FULLY TO ANY PARTICULAR ACTIVITY OF THE ASSESSEE; THE TURNOVER OF THE APPEL LANT FROM MINING CONTRACTS WAS RS.4283.10 LACS AND THE TURNOVER OF THE WIND MILL W AS RS.72.08 LACS ACCORDINGLY 1.655% OF THE COMMON EXPENSES OF RS.78,28,687/- WHI CH WORKED OUT TO RS. 1,29,565/- WAS BEING ALLOCATED TO THE WIND MILL; SI MILARLY APPELLANT HAD PAID INTEREST OF RS.1,07,53,349/- ON THE AMOUNTS BORROWE D FOR THE WIND MILLS AND FOR OTHER BUSINESS ACTIVITIES; SINCE THE APPELLANT FAIL ED TO GIVE NECESSARY PARTICULARS, THE LOAN TAKEN FOR THE WIND MILL WAS TAKEN AT RS.5 CRORES (OUT OF THE TOTAL SECURED LOANS OF RS.15,31,33,038/- AS ON 31.03.2009); ACCOR DINGLY, 32.6% OF THE INTEREST PAID WHICH WORKED OUT TO RS.35,05,591/- WAS BEING A LLOCATED TO THE WIND MILL ACTIVITY AND A THE SUM OF RS.47,17,803/- BEING DEPRECIATION (RS.10 ,82,646/-), COMMON EXPENSES (RS.1,29,565/-) AND INTEREST EXPEND ITURE (RS.35,05,591/-) WAS BEING REDUCED FROM THE DEDUCTION CLAIMED U/S.80IA. 4.3. THE CONTENTIONS OF THE LD. A.R. ARE THAT THE S ECURED LOANS WERE AVAILED TOWARDS PURCHASE OF PLANT AND MACHINERY NOT PERTAINING TO T HE ACTIVITY OF THE WIND MILLS AND THEREFORE NO PROPORTIONATE ALLOCATION OF THE IN TEREST EXPENSES WAS CALLED FOR; AS REGARDS THE COMMON EXPENSES THE BANK COMMISSION, BOOKS AND TRAVELLING COULD NOT BE TREATED AS COMMON SINCE THEY HAD NO NEXUS WI TH THE WIND MILL PROJECT AND THEREFORE REDUCTION OF PROPORTIONATE INTEREST AND C OMMON EXPENSES WAS NOT WARRANTED. 4.4. I HAVE CONSIDERED THE FACTS OF THE MATTER. AS SEEN FROM THE WRITTEN SUBMISSION REPRODUCED ABOVE, APPELLANT HAD NOT CONTESTED THE R EDUCTION OF DEPRECIATION OF RS. 10,82,646/- WHILE COMPUTING THE DEDUCTION CLAIMED U /S.80IA. FURTHER AS SEEN FROM APPELLANT'S REPLY REPRODUCED AT PARA-4.3 OF THE ASS ESSMENT ORDER, APPELLANT STATED THAT THE DEPRECIATION AS PER THE I.T. ACT MAY BE RE DUCED. THEREFORE, DISALLOWANCE OF THE SAID SUM IS UPHELD. OUT OF THE REDUCTION OF COMMON EXPENDITURE, IN THE WRITTEN SUBMISSION PROPORTIONATE REDUCTION OF ONLY THE BANK COMMISSION (RS.1,81,210/-), BOOKS (RS. 12,630/-) AND TRAVELLIN G (RS.7,63,676/-) OUT OF THE TOTAL COMMON EXPENDITURE ENUMERATED BY THE A.O. AT PARA.4 .4 OF THE ASSESSMENT ORDER OF RS.78,28,687/- WAS CONTESTED. EVEN THESE ITEMS W ERE SUMMARILY STATED NOT TO HAVE HAD ANY NEXUS WITH THE WIND MILL PROJECTS. NO EVIDENCE IN SUPPORT OF THIS CONTENTION WAS FURNISHED. THEREFORE, THE REDUCTION OF PROPORTIONATE COMMON EXPENDITURE OF RS. 1,29,565/- WHILE COMPUTING THE D EDUCTION U/S.80IA IS UPHELD. COMING TO THE PROPORTIONATE ALLOCATION OF THE INTER EST EXPENSES, IT IS SEEN THAT THE A.O. HAD ASSUMED THE LOAN TAKEN FOR WIND MILL TO BE AT RS.5 CRORES (BY OBSERVING AT PARA 4.6 OF THE ASSESSMENT ORDER THAT 'THE LOAN RELATING TO WEG AS ON 31.03.2011 IS TAKEN AT RS.5.00 CRORE AS THE ASSESSE E HAS NOT GIVEN ANY DETAILS, THEN THE PERCENTAGE OF WEG LOAN WORKS OUT TO 32.6%). THE CONTENTION OF THE LD. A.R. IS THAT AS MAY BE SEEN FROM THE INVOICES, BANK ADVICE ETC. FURNISHED TO THE A.O. NONE OF THE SECURED LOANS WAS UTILIZED FOR PURCHASE OF P LANT AND MACHINERY PERTAINING TO THE WIND MILLS. A.O. IS DIRECTED TO VERIFY THE CONT ENTION AND MODIFY THE DISALLOWANCE OF PROPORTIONATE INTEREST EXPENDITURE ACCORDINGLY. ITA NOS. 551 & 552/AHD/2014 (DHOLU CONSTRUCTION & P ROJECTS LTD. VS. ACIT) A.YS. 2009-10 & 2010-11 - 8 - 4.5. TO SUM-UP, DISALLOWANCE OF RS.10,82,646/- AND RS.1,29,565/- ARE UPHELD. DISALLOWANCE OF RS.35,05,591/- IS DIRECTED TO BE RE -WORKED AFTER VERIFICATION. THESE GROUNDS OF APPEAL ARE TREATED AS; PARTLY ALLO WED. 10. WE HAVE HEARD RIVAL SUBMISSIONS. SHRI SOPARKAR STATES AT THE OUTSET THAT THE ASSESSEE IN ANY CASE IS NOT RAISING THE IS SUES OF INTEREST AND DEPRECIATION (SUPRA). WE PROCEED IN THIS BACKDROP TO NOTICE THAT THE ASSESSEE HAS BEEN MAINTAINING SEPARATE BOOKS OF ITS TWO BUSI NESSES THROUGHOUT AS DULY AUDITED AS PER THIS STATUTORY PROVISIONS. IT HAS F URTHER ENTERED INTO ANNUAL MAINTENANCE CONTRACT WITH THE WINDMILL INSTALLMENT COMPANIES SO FAR AS ITS FORMER BUSINESS IS CONCERNED. THERE IS NO EVIDENCE IN THE CASE FILE INDICATING THAT THE ASSESSEE HAS EITHER WAY DIVERTED EXPENDITU RE OF ONE BUSINESS TOWARDS THE OTHER ONE I.E. FROM WINDMILL TO MINING AND VICE VERSA. THE ASSESSING OFFICER RATHER APPEARS TO HAVE ADOPTED PRORATE TURN OVER FIGURES TO ARRIVE AT THE IMPUGNED ALLOCATION. WE NOTICE THAT SUCH A COURSE OF ACTION ALREADY STANDS REVERSED BY VARIOUS TRIBUNALS DECISIONS. FOR INST ANCE, [2012] 23 TAXMANN.COM 301 (JODHPUR-TRIBUNAL) ACIT VS. P I IND USTRIES DELETING SIMILAR ALLOCATION / APPORTIONMENT OF EXPENSES MADE BY THE ASSESSING OFFICER IN CASE OF AN ENTITY HAVING TWO BUSINESSES AND ONE OF THEM ELIGIBLE FOR SECTION 80IA DEDUCTION. WE ADOPT THE SAME REASONING HEREIN AS W ELL TO REVERSE THE IMPUGNED ALLOCATION IN ABSENCE OF ANY SPECIFIC MATE RIAL. THE IMPUGNED DISALLOWANCE/ADDITION OF RS.47,70,803/- IS PARTLY D ELETED. IT IS MADE CLEAR THAT WE HAVE NOT DEALT WITH THE TWO ISSUES OF DEPRE CIATION AND INTEREST EXPENDITURE (SUPRA). ASSESSEES FORMER APPEAL ITA NO.551/AHD/2014 IS PARTLY ACCEPTED. 11. THIS LEAVES US WITH ASSESSEES LATTER APPEAL IT A NO.552/AHD/2014 SEEKING TO RAISE A SIMILAR SOLE SUBSTANTIVE GROUND CHALLENGING CORRECTNESS OF ALLOCATION OF EXPENSES RESULTING IN DISALLOWANCE/AD DITION OF RS.60,05,017/-. BOTH THE LEARNED REPRESENTATIVES STATE VERY FAIRLY THAT OUR FINDINGS IN ITA NOS. 551 & 552/AHD/2014 (DHOLU CONSTRUCTION & P ROJECTS LTD. VS. ACIT) A.YS. 2009-10 & 2010-11 - 9 - PRECEDING PARAGRAPH DEALING WITH THE VERY ISSUE IN FORMER ASSESSMENT YEAR APPLY MUTATIS MUNTANDIS HEREIN AS WELL. WE ACCEPT THIS SUBSTANTIVE GROUND IN SAME TERMS. THIS APPEAL PARTLY SUCCEEDS. 12. THESE TWO ASSESSEES APPEALS ARE PARTLY ALLOWED . [PRONOUNCED IN THE OPEN COURT ON THIS THE 20 TH DAY OF MARCH, 2017.] SD/- SD/- ( MANISH BORAD ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 20/03/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0