Paharpur Cooling Towers Limited, Kolkata V. ACIT, Central Circle - II, Kolkata, Kolkata

ITA 555/KOL/2007

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9247 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 17-03-2011
• Assessment Year: 1990-1991
• Appeal Filed On: 08-03-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMANT SINHA
• Assessee Lawyers: S ADAK V SHAH AN D N VERMA
• Keywords: Capital asset; Business income; Depreciation; Business expenditure; Advance ruling; Revenue expenditure; Capital expenditure
• Section: 43B; 80HHC; 14A; 37(1); 43(5); 32; 2

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH-A: KO LKATA ( ) . . , , . . , ! ! ! ! ,) [BEFORE HONBLE SHRI B.R. MITTAL, J.M. & HONBLE SH RI C.D. RAO, A.M] ' ' ' ' /I.T.A. NO. 555/KOL./2007 #$ #$ #$ #$ %& %& %& %& /ASSESSMENT YEAR : 1990-1991 PAHARPUR COOLING TOWERS LTD., KOLKATA -VS.- ASS ISTANT COMMISSIONER OF INCOME TAX, (PAN : AABCP 8017 C) CENTRAL CIRCLE-II, KOLKATA (APPELLANT) (RESPONDENT) APPELLANT BY : S/ SHRI S. ADAK, V. SHAH AN D N. VERMA, A.R. RESPONDENT BY : SHRI SUMANT SINHA, D.R. ' ' ' ' /O R D E R PER SHRI B. R. MITTAL, JUDICIAL MEMBER / . . , : THE ASSESSEE HAS FILED THIS APPEAL FOR THE ASSESSM ENT YEAR 1990-91 AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-X, KOLKATA DATED 14.11.2006 DISPUTING THE CONFIRMATION OF THE ADDITIONS/ DISALLOWANCES MADE B Y THE ASSESSING OFFICER. 2. GROUND NO. 1 OF THE APPEAL IS AS UNDER :- (A) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, LD. CIT(APPEALS) WAS NOT JUSTIFIED AND ERRED IN UPHOLDI NG DISALLOWANCE OF RS.50,05,249/- ON ACCOUNT OF INTEREST PAID ON LOAN TO PURCHASE TAX FREE SECURITIES. (B) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND WITHOUT PREJUDICE TO THE GROUND 1(A) THE LD. CIT(APPEALS) W AS NOT JUSTIFIED AND ERRED IN UPHOLDING THE COMPUTATION MADE BY THE ASSE SSING OFFICER. 3. BEFORE WE TAKE UP THIS GROUND OF APPEAL FOR OUR CONSIDERATION, IT IS RELEVANT TO STATE THAT THE ASSESSEE FILED RETURN FOR THE ASSESSMENT YEAR U NDER CONSIDERATION ON 27.02.1991 ALONGWITH THE AUDITORS REPORT. THE ASSESSING OFFICER HAS STA TED THAT THE NOTICE WAS ISSUED TO THE ASSESSEE ITA NO. 555/KOL.2007 2 UNDER SECTION 143(2) DATED 26.03.1991, BUT THE ASSE SSEE FAILED TO COMPLY THE DATE OF HEARING FIXED FOR. IT IS STATED THAT THE ASSESESE BEGAN FIL ING DETAILS ON 15.06.1992 AND THE LATEST LETTER FILED BY THE ASSESSEE CONTAINING RELEVANT INFORMATI ON IN CONNECTION WITH THE ASSESSMENT PROCEEDINGS IS DATED 29.03.1993. THE ASSESSING OFFI CER HAS STATED THAT THE ASSESSEE FILED PARTICULARS LITERALLY TILL THE END OF THE TIME THE PROCEEDING WAS GOING TO BE BARRED BY LIMITATION. 4. NOW COMING TO THE GROUND OF APPEAL UNDER CONSIDE RATION, VIZ. GROUND NO. 1, THE ASSESSING OFFICER HAS STATED THAT FROM THE PROFIT & LOSS A/C. OF THE ASSESSEE, IT IS OBSERVED THAT ON SALE OF RS.7,697.05 LACS, NET PROFIT ARRIVED AT IS RS.973.61 LACS. HE HAS STATED THAT THESE FIGURES, PRIMA FACIE, DO NOT REVEAL THE EXACT STATE OF AFFAIRS. HE HAS STATED THAT THERE IS SALE OF BONDS OF PUBLIC SECTOR UNDERTAKINGS AND UNITS OF U. T.I., WHICH AMOUNTED TO RS.7,025.51 LACS AND IT RESULTED IN LOSS OF RS.438.29 LACS. THUS THE NET PROFIT OF RS.973.61 LACS IS THE RESULT OF THE TOTAL SALE OF RS.14,722.56 LACS AND IT INCLUDES TAX -FREE INTEREST OF RS.205.90 LACS, THUS REDUCING THE TAXABLE NET PROFIT TO RS.767.71 LACS. 5. THE ASSESSING OFFICER AT PAGES 3 TO 6 HAS GIVEN THE DETAILS OF THE PURCHASE AND SALE OF BONDS BY THE ASSESSEE AND THEREAFTER AT PAGES 9 & 1 0 HAS GIVEN THE DETAILS OF THE LOANS TAKEN BY THE ASSESSEE, INTEREST PAID BY THE ASSESSEE IN RESP ECT OF PURCHASE OF TAX-FREE BONDS AND INTER- CORPORATE DEPOSITS RECEIVED. THE ASSESSING OFFICER HAS STATED THAT TOTAL INTEREST PAID BY THE ASSESSEE TO EARN TAX-FREE INTEREST ON BONDS, BESIDE S THE LOSS, AMOUNTS TO RS.33,40,493.14 AND RS.16,64,746.68, AGGREGATING TO RS.50,05,239.82. TH E ASSESSING OFFICER HAS STATED THAT THE ASSESSEE STATED THAT THE INTEREST PAID TO PEERLESS GENERAL FINANCE & INVESTMENT CO. LTD. IS OF RS.27,38,627/- ONLY AND WHEREAS THE INTEREST CALCUL ATED BY THE ASSESSING OFFICER IS OF RS.33,40,493.14. HOWEVER, THE ASSESSING OFFICER MAD E DISALLOWANCE OF INTEREST PAID ON LOANS TO EARN INCOME NOT CHARGEABLE TO TAX IS OF RS.50,05 ,239.82. BEING AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(APPEALS). 6. ON BEHALF OF THE ASSESSEE, IT WAS CONTENDED THAT THE COMPUTATION OF INTEREST MADE BY THE ASSESSING OFFICER IS ERRONEOUS. THE LD. CIT(APPEALS ) HAS STATED THAT THE ASSESSEE HAS NOT FURNISHED ANY ALTERNATIVE COMPUTATION OR STATED IN DETAIL ANY ERROR IN THE COMPUTATION MADE BY THE ASSESSING OFFICER. HENCE, THE LD. CIT(APPEALS) HAS STATED THAT IN THE ABSENCE OF ANY DETAILS, THE ASSESSEES CONTENTION REGARDING ERRONEOUS COMPU TATION OF DISALLOWANCE OF INTEREST IS ITA NO. 555/KOL.2007 3 UNSUBSTANTIATED AND CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. THEREFORE, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 7. AT THE TIME OF HEARING, THE LD. AUTHORIZED REPRE SENTATIVE OF THE ASSESSEE REFERRED PAGES 81 TO 85 OF THE PAPER BOOK, WHICH IS A COPY OF THE LETTER DATED 11.03.1993 STATED TO BE FILED BEFORE THE ASSESSING OFFICER AND SUBMITTED THAT IT CONTAINS THE DETAILS OF THE LOANS TAKEN AND INVESTMENT MADE BY THE ASSESSEE. HE FURTHER SUBMIT TED THAT THE DETAILS OF UNITS AND SHARES PURCHASED BY THE ASSESSEE ARE ALSO CONTAINED AT PAG E 9 OF THE ASSESSMENT ORDER. THE LD. A.R. FURTHER REFERRED TO PAGES 92 & 93 OF THE PAPER BOOK , WHICH IS AN ANNEXURE TO THE LETTER DATED 18.03.1993 STATED TO BE FILED BEFORE THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT PROCEEDINGS AND SUBMITTED THAT IT CONTAINS THE DETAILS OF INTER EST PAID AND/ OR ACCRUED DURING THE RELEVANT FINANCIAL YEAR. THE LD. A.R. SUBMITTED THAT THE INT EREST PAID TO PEERLESS GENERAL FINANCE & INVESTMENT CO. LTD. COMES TO RS.27,38,627/- AND WHE REAS THE ASSESSING OFFICER HAS CALCULATED THE INTEREST OF RS.33,40,493.14. HE SUBMITTED THAT EVEN IF THE DISALLOWANCE OF INTEREST PAID IS TO BE DISALLOWED, IT COULD NOT EXCEED MORE THAN RS.27, 38,627/-. 7.1. THE LD. A.R. FURTHER SUBMITTED THAT INVESTMENT MADE BY THE ASSESSEE IN PURCHASE OF UNITS AND SHARES IS ONE OF THE BUSINESSES OF THE AS SESSEE AND THE SAME WERE SHOWN AS STOCK-IN- TRADE AND ALSO OFFERED TO TAX AS BUSINESS INCOME. H E SUBMITTED THAT THE INVESTMENT ACTIVITY CARRIED ON BY THE ASSESSEE IS FOR EARNING BOTH TAXA BLE AS WELL AS EXEMPTED INCOME. HOWEVER, THE ASSESSING OFFICER LINKED UP DATES OF INVESTMENT MADE IN TAX-FREE BOND WITH THE DATES OF WORKING CAPITAL LOAN TAKEN FROM PEERLESS GENERAL FI NANCE & INVESTMENT CO. LTD. AND CASH CREDIT FACILITY AVAILED FROM BANKS. HE SUBMITTED TH AT THE ABOVE BASIS IS NOT CORRECT BECAUSE BOTH INVESTMENT AS WELL AS AVAILMENT OF CREDIT IS AN ON- GOING AND DAY-TO-DAY ACTIVITY, WHICH CANNOT BE LINKED WITH EACH OTHER. THE LD. A.R. FURTHER SU BMITTED THAT THE WORKING CAPITAL AVAILABLE BY THE ASSESSEE ON ITS OWN FUND IS MUCH HIGHER THAN TH E INVESTMENT MADE IN TAX-FREE BOND. THE LD. A.R. RELYING ON THE DECISION OF THE HONBLE APEX CO URT IN THE CASE OF MUNJAL SALES CORPORATION VS.- CIT & ANOTHER [298 ITR 298], DECISION OF HONBLE ITAT, KOLKATA BENCH I N THE CASE OF DCIT VS.- CHLORIDE INDUSTRIES LIMITED [76 ITD 1], DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS.- RELIANCE UTILIT IES AND POWER LIMITED [313 ITR 340] AND ALSO THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS.- HOTEL SAVERA [239 ITR 795] SUBMITTED THAT IF THE ASSESSEE HAS SUFFICI ENT OWN FUNDS AND PROFITS TO PROVIDE INTEREST- ITA NO. 555/KOL.2007 4 FREE LOANS, THE SUBMISSION THAT LOANS TO SISTER CON CERNS AND/ OR THE INVESTMENTS MADE OUT OF THE INTEREST-FREE FUNDS GENERATED HAVE TO BE ACCEPTED A ND NO DISALLOWANCE COULD BE MADE. THE LD. A.R. FURTHER SUBMITTED THAT IF ONE OF THE BUSINESSE S OF THE ASSESSEE IS OF PURCHASE AND SALE OF SHARES, THE INTEREST IS ALLOWABLE UNDER SECTION 36( 1)(III) OF THE ACT AND PLACED RELIANCE ON THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS.- BRITANNIA INDUSTRIES LIMITED [280 ITR 525]. THE LD. A.R. FURTHER SUBMITT ED THAT IF THE ADVANCES ARE ALSO GIVEN FROM MIXED ACCOUNTS, THE INTEREST ON BORROWED FUND CANNO T BE DENIED. THE ASSESSEE ALSO PLACED RELIANCE ON THE DECISION OF THE HONBLE ITAT, MUMBA I BENCH IN THE CASE OF ACIT VS.- CLARIDGES INVESTMENTS & FINANCE (PVT.) LTD. [18 SOT 390] AND ALSO THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF RAJASTHAN STATE WAREHOUSI NG CORPORATION VS.- CIT [242 ITR 450]. 7.2. THE LD. A.R. SUBMITTED THAT THE DISALLOWANCE M ADE BY THE ASSESSING OFFICER IS NOT JUSTIFIED. 8. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESEN TATIVE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. HE SUBMITTED THAT THE ASSESSEE D ID NOT FILE DETAILS INSPITE OF GIVING VARIOUS OPPORTUNITIES AND FILED THE DETAILS DURING THE ASSE SSMENT PROCEEDINGS ONLY WHEN THE CASE WAS BECOMING TIME BARRED. THE LD. D.R. SUBMITTED THAT T HE ASSESSING OFFICER HAS MADE DETAILED ANALYSIS IN THE ASSESSMENT ORDER AT PAGES 3 TO 10 I N RESPECT OF THE LOAN RAISED AND ITS UTILIZATION AND ALSO THE CREDIT FACILITY AVAILED FROM BANK AND THEREAFTER COMPUTED THE INTEREST PAID BY THE ASSESSEE IN RESPECT OF INCOME NOT CHARGEABLE TO TAX . THE LD. D.R. ALSO REFERRED TO PAGE 2 OF THE ORDER OF THE LD. CIT(APPEALS) AND SUBMITTED THAT TH E LD. CIT(APPEALS) HAS STATED THAT THE ASSESSEE DID NOT FILE ANY ALTERNATIVE CALCULATION T O POINT OUT THAT THE CALCULATION MADE BY THE ASSESSING OFFICER IS ERRONEOUS. THE LD. D.R. FURTHE R SUBMITTED THAT THE DEALING IN SECURITIES IS NOT CORE BUSINESS OF THE ASSESSEE AND HENCE, THE CO NTENTION OF THE LD. A.R. THAT THE INTEREST TAKEN BY THE ASSESSEE FOR INVESTMENT IN SHARES, UNITS, BO NDS IS ALLOWABLE UNDER SECTION 36(1)(III) OF THE ACT IS NOT FACTUALLY CORRECT. HE SUBMITTED THAT THE LD. CIT(APPEALS) HAS RIGHTLY CONFIRMED THE ACTION OF THE ASSESSING OFFICER TO DISALLOW THE INTEREST IN VIEW OF SECTION 14A OF THE INCOME TAX ACT. 9. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. REPRESENTATIVES OF THE PARTIES, THE ORDERS OF THE AUTHORITIES BELOW AND THE CASES R ELIED UPON (SUPRA). ITA NO. 555/KOL.2007 5 10. AS FAR AS THE CONTENTION OF THE LD. A.R. THAT T HE INVESTMENT IN SHARES, PURCHASE OF SECURITIES AND BONDS IS ONE OF THE CORE-BUSINESSES OF THE ASSESSEE, WE, ON PERUSAL OF THE OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION OF THE ASSE SSEE AND ALSO CONSIDERING THE ORDER OF THE TRIBUNAL DATED 29.08.2003 FOR THE ASSESSMENT YEAR 1 996-97, COPY OF WHICH IS PLACED AT PAGES 124 TO 127 OF THE PAPER BOOK INCOMPLETE COPY, OB SERVE THAT IN PARA 11.8 OF THE TRIBUNALS ORDER, THE ASSESSEE SUBMITTED BEFORE THE TRIBUNAL THAT THE BUSINESS OF THE ASSESSEE IS OF THE DESIGNING, MANUFACTURING, SALE AND ERECTION OF COOL ING TOWERS IN INDIA AND ABROAD; THAT THE MANUFACTURE, SALE AND ERECTION OF COOLING TOWERS CO NSTITUTES ASSESSEES CORE BUSINESS AND, THEREFORE, ERECTION CHARGES RECEIVED BY THE ASSESSE E IS FROM ITS CORE BUSINESS AND IS ENTITLED FOR DEDUCTION UNDER SECTION 80HHC OF THE INCOME TAX ACT . CONSIDERING THE ABOVE FACT AND IN THE ABSENCE OF ANY FACTS ON RECORD TO CONTROVERT THE AB OVE SUBMISSION OF THE ASSESSEE MADE BEFORE THE TRIBUNAL, WE DO NOT FIND MERIT IN THE CONTENTIO N OF THE LD. A.R. THAT THE DEALING IN SHARES, STOCKS AND INVESTMENT IN BONDS IS THE PRIMARY BUSIN ESS OF THE ASSESSEE. FURTHER, THE ASSESSING OFFICER HAS ALSO STATED THAT THE ASSESSEE IN THE PR OFIT & LOSS A/C. HAS SHOWN SALE OF RS.7,697.05 LACS AND ARRIVED AT NET PROFIT AT RS.973.61 LACS. THE ASSESSING OFFICER IN PARA 3 OF THE ASSESSMENT ORDER HAS ALSO STATED THAT THE ASSESSEE IN ITS WRITE - UP DATED 15.06.1992 HAS STATED THE NATURE OF BUSINESS AS UNDER :- (1) THE COMPANY DESIGNS, MANUFACTURES, SUPPLIES, EX PORTS, ERECTS, INSTALLS AND COMMISSIONS A WIDE RANGE OF COOLING TOWERS AND AIR COOLED FINNED TUBE HEAT EXCHANGER FOR USE IN POWER GENERATION, PE TROLEUM REFINING, CHEMICAL PROCESSING, STEEL, CEMENT, SUGAR, AIR COND ITIONING, REFRIGERATION INDUSTRIES, AMONG OTHERS. (2) THE COMPANY MANUFACTURERS, SUPPLIES, AND EXPORT S HIGH DENSITY POLY- PROPELENE WOVEN BAGS FOR USE IN PACKING OF FERTILIZ ERS, CEMENT, CHEMICALS, GRAINS, ETC. (3) THE COMPANY LEASES AND RENTS PLANT AND MACHINER Y TO VARIOUS PARTIES FOR USE AND INVESTS ITS MONEYS, NOT IMMEDIATELY REQUIRE D IN STOCKS OF SECURITIES FROM TIME TO TIME. 10.1. ON PERUSAL OF THE ABOVE, IT IS A FACT THAT TH E ASSESSEE IS NOT IN THE PRIMARY BUSINESS OF DEALING IN SHARES AND MAKING INVESTMENT IN BONDS/ U NITS. BE THAT AS IT MAY, THE HONBLE ITAT, SPECIAL BENCH, DELHI IN THE CASE OF CHEM INVEST LIM ITED VS.- ITO [121 ITD 318 (SB)] WHILE CONSIDERING THE ISSUE OF DEDUCTION OF INTEREST IN R ESPECT OF INVESTMENT IN SHARES, VIS--VIS, ITA NO. 555/KOL.2007 6 APPLICABILITY OF SECTION 14A OF THE INCOME TAX ACT HAS HELD THAT INTEREST EXPENDITURE INCURRED BY ASSESSEE FOR BORROWING MONEY USED FOR THE PURPOS ES OF INVESTMENT IN SHARES FOR TRADING AS WELL AS INVESTMENT PURPOSES HAS TO SUFFER THE DISAL LOWANCE BECAUSE OF OVERRIDING EFFECT OF SECTION 14A OF THE ACT IRRESPECTIVE OF THE FACT THA T THE INTEREST IS CONSIDERED UNDER SECTION 36(1)(III) OR UNDER SECTION 57 OF THE ACT. HENCE, I F THE INTEREST HAS BEEN PAID BY THE ASSESSEE IN RESPECT OF THE AMOUNT BORROWED FOR INVESTMENT IN SH ARES/ BONDS/ UNITS, INCOME FROM WHICH IS NOT CHARGEABLE TO TAX, THE SAID INTEREST IS DISALLO WABLE AS PER SECTION 14A OF THE INCOME TAX ACT. 11. THE LD. A.R. HAS SUBMITTED THAT ITS OWN FUND IS MUCH HIGHER THAN THE INVESTMENT MADE IN TAX-FREE BONDS AND RELYING ON THE DECISIONS (CIT ED SUPRA) SUBMITTED THAT NO DISALLOWANCE OF INTEREST IS TO BE MADE. WE HAVE PERUSED THE SAID CA SES (CITED SUPRA) AND OBSERVED THAT IN THOSE CASES, THE ASSESSEE COULD ESTABLISH THAT IT HAD THE SUFFICIENT FUNDS TO PROVIDE INTEREST-FREE LOANS AND/ OR THE INTEREST-FREE LOAN WAS GIVEN FOR BUSINE SS PURPOSES AND HENCE, IT WAS HELD THAT CONSIDERING THE FACTS NO DISALLOWANCE OF INTEREST W AS TO BE MADE. IN THE CASE BEFORE US, IT IS A FACT THAT THE ASSESSEE MADE INVESTMENT OUT OF THE B ORROWED FUNDS, THE DETAILS OF WHICH ARE GIVEN BY THE ASSESSING OFFICER AT PAGES 3 TO 9 OF THE ASS ESSMENT ORDER THAT THE ASSESSEE UTILIZED BORROWED FUNDS/ CASH CREDIT FACILITIES FOR THE PURP OSE OF INVESTMENT IN SHARES, BONDS AND UNITS, THE INCOME OF WHICH IS NOT CHARGEABLE TO TAX UNDER THE ACT AND, THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THERE IS NO INFIRMITY IN THE O RDERS OF THE AUTHORITIES BELOW TO APPLY PROVISIONS OF SECTION 14A OF THE INCOME TAX ACT TO MAKE DISALLOWANCE OF THE INTEREST PAID BY THE ASSESSEE ON THE LOANS AND / OR CASH CREDIT FACI LITY AVAILED FROM BANK. 12. NOW THE QUESTION COMES AS TO WHETHER THE DISALL OWANCE OF RS.50,05,239.82 MADE BY THE ASSESSING OFFICER, WHICH INCLUDES THE INTEREST OF RS.33,40,493.14 STATED TO HAVE BEEN PAID FOR BORROWING FROM PEERLESS GENERAL FINANCE & INVES TMENT CO. LTD. AS AGAINST THE SUM OF RS.27,38,627/- STATED TO BE ONLY PAID BY THE ASSESS EE TO M/S. PEERLESS GENERAL FINANCE & INVESTMENT CO. LTD., WE FIND SUBSTANCE IN THE SUBMI SSION OF THE ASSESSEE AND HOLD THAT THE DISALLOWANCE CANNOT EXCEED THE AMOUNT OF INTEREST P AID BY THE ASSESSEE. IN VIEW OF THE ABOVE, WE HOLD THAT THE DISALLOWANCE SHOULD BE OF RS.44,03 ,373.68 (RS.27,38,627/- PLUS RS.16,64,746.68) AS AGAINST RS.50,05,239.82 MADE BY THE AUTHORITIES BELOW. ACCORDINGLY, ITA NO. 555/KOL.2007 7 GROUND NO. 1 OF THE APPEAL TAKEN BY THE ASSESSEE IS ALLOWED IN PART BY RESTRICTING THE DISALLOWANCE OF RS.44,03,373.68. 13. GROUND NO. 2 OF THE APPEAL IS AS UNDER :- 2(A) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS) WAS NOT JUSTIFIED IN UPHOLDING DISALLO WANCE ON ACCOUNT OF INVESTMENT ALLOWANCE UNDER SECTION. 32AB AMOUNTING TO RS.17,77,269/- ON FOREIGN EXCHANGE FLUCTUATION IN RESPECT OF LOAN TAKEN FOR THE PURCHASE OF PLANT & MACHINERY. 2(B) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS) ERRED IN HOLDING THAT NO CLAIM HAS BEE N MADE BEFORE THE ASSESSING OFFICER FOR INVESTMENT ALLOWANCE UNDER SE CTION. 32AB. 14. DURING THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE DEBITED IN THE PROFIT & LOSS A/C. UNDER THE HEAD MISCELLANEOUS EXPENSES A SUM OF RS.17,77,269/- ON ACCOUNT OF LOSS ON FLUCTUATION OF EXCHANGE RATE ON THE AMOUNT OF LO AN PAYABLE TO ICICI LIMITED. THE SAID LOAN WAS TAKEN FOR PURCHASE OF MACHINERY. THE ASSESSING OFFICER STATED THAT THE SAID LIABILITY OF THE ASSESSEE DEBITED BY THE ASSESSEE AS REVENUE EXPENDI TURE IS DISALLOWED AS THE LOAN WAS TAKEN TO ACQUIRE CAPITAL ASSET. THE ASSESSING OFFICER STATED THAT THE ASSESSEE WILL BE ENTITLED TO DEPRECIATION ALLOWANCE. IN THE RETURN FILED BY THE ASSESSEE, THE ASSESSEE DID NOT CLAIM INVESTMENT ALLOWANCE AS PER SECTION 32AB OF THE ACT AS THE ASSESSEE CLAIMED THE SAID LOSS UNDER THE HEAD REVENUE EXPENDITURE. THE ASSESSEE CONTENDED THAT IF THE SAID LOSS IS CONSIDERED AS CAPITAL LOSS AND THE ASSESSING OFFICE R WAS ALLOWING DEPRECIATION THEREON, THE ASSESSEE SHOULD BE ENTITLED FOR INVESTMENT ALLOWANC E UNDER SECTION 32AB OF THE ACT. IT IS A FACT THAT THE SAID PLEA WAS NOT TAKEN BY THE ASSESSEE BE FORE THE ASSESSING OFFICER AS THE ASSESSEE CLAIMED THE SAID LOSS UNDER THE HEAD REVENUE EXPEN DITURE, BUT THE ASSESEE CLAIMED THE SAME BEFORE THE LD. CIT(APPEALS). 15. THE LD. CIT(APPEALS) REJECTED THE CLAIM OF THE ASSESSEE UNDER SECTION 32AB OF THE ACT ON THE GROUND THAT NO CLAIM WAS MADE BY THE ASSESSE E BEFORE THE ASSESSING OFFICER REGARDING ANY ALLOWANCE UNDER SECTION 32AB OF THE ACT. IT IS RELEVANT TO STATE THAT THE LD. CIT(APPEALS) HAS CONFIRMED THE ACTION OF THE ASSESSING OFFICER T HAT THE SAID LOSS ON ACCOUNT OF EXCHANGE RATE FLUCTUATION IS A CAPITAL EXPENDITURE AND NOT THE RE VENUE EXPENDITURE AS CLAIMED BY THE ASSESSEE. HENCE, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. ITA NO. 555/KOL.2007 8 16. DURING THE COURSE OF HEARING, THE LD. A.R. SUBM ITTED THAT THE ABOVE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F THE HONBLE KOLKATA HIGH COURT IN THE CASE OF CENTURY ENKA LIMITED VS.- ACIT [323 ITR 86], W HEREIN IT WAS HELD THAT ADDITIONAL LIABILITY DUE TO EXCHANGE RATE FLUCTUATION TO PAY FOREIGN CUR RENCY LOAN TAKEN FOR PURCHASE OF PLANT AND MACHINERY IS A CAPITAL LOSS AND THE ASSESSEE IS ENT ITLED TO DEPRECIATION AND INVESTMENT ALLOWANCE ON THE INCREASED COST OF THE PLANT AND MACHINERY RE SULTING FROM INCREASE IN THE LIABILITY TO REPAY THE FOREIGN CURRENCY LOAN INCURRED. THE LD. D.R. CO ULD NOT DISPUTE THE FACTS OF THE CASE AND THE FACT THAT THE ABOVE ISSUE IS COVERED IN FAVOUR OF T HE ASSESSEE BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT. 17. IN VIEW OF THE ABOVE FACTS AND THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CENTURY ENKA LIMITED (SUPRA), WE ALLOW THE GROUND NO. 2 OF THE APPEAL TAKEN BY THE ASSESSEE ON THE FACT THAT THE ASSESSEE IS ENTIT LED FOR INVESTMENT ALLOWANCE UNDER SECTION 32AB OF THE ACT ON THE INCREASED LIABILITY DUE TO E XCHANGE RATE FLUCTUATION. HOWEVER, THE ASSESSING OFFICER WHILE GIVING EFFECT TO OUR ABOVE ORDER WILL SEE THAT THE ASSESSEE HAS COMPLIED WITH THE CONDITIONS LAID DOWN UNDER SECTION 32AB OF THE ACT TO ALLOW INVESTMENT ALLOWANCE TO THE ASSESSEE. THE GROUND NO. 2 OF THE APPEAL TAKEN BY THE ASSESSEE IS ALLOWED AS MENTIONED ABOVE. 18. GROUND NO. 3 OF THE APPEAL IS AS UNDER :- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS) ERRED IN UPHOLDING ADDITION ON ACCOUNT OF PROFIT ON SALE OF FIXED ASSETS AMOUNTING TO RS.30,22,361/- TO THE BUS INESS INCOME OF THE APPELLANT. 19. THE ASSESSING OFFICER WHILE COMPUTING THE INCOM E OF THE ASSESSEE EXCLUDED PROFIT ON SALE OF FIXED ASSETS AMOUNTING TO RS.30,22,361/-. B EING AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(APPEALS). 20. THE LD. CIT(APPEALS) VIDE PARA 3 OF THE IMPUGNE D ORDER CONFIRMED THE ACTION OF THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE H AS NOT FURNISHED EVIDENCE REGARDING THE ADJUSTMENT OF THE PROFIT ON SALE OF FIXED ASSETS IN THE DEPRECIATION SCHEDULE. HENCE, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. ITA NO. 555/KOL.2007 9 21. DURING THE COURSE OF HEARING, THE LD. A.R. REFE RRED PAGES 107 & 108 OF THE PAPER BOOK, WHICH IS A COPY OF THE LETTER DATED 29.03.1993 ADDR ESSED TO THE ASSESSING OFFICER AND SUBMITTED THAT THE ASSESSEE SOLD CERTAIN ASSETS IN THE ASSESS MENT YEAR UNDER CONSIDERATION AT AN AGGREGATE CONSIDERATION OF RS.56,96,272.35 AND SUBMITTED THAT THE SAID SUM WAS EXCLUDED FROM THE BLOCK WHILE CONSIDERING DEPRECIATION ALLOWABLE UNDER THE INCOME TAX ACT IN VIEW OF SECTION 32 READ WITH SECTION 43(6) OF THE INCOME TAX ACT. TO SUBSTA NTIATE HIS SUBMISSION, THE LD. A.R. REFERRED TO PAGE 60 OF THE PAPER BOOK, WHICH IS A COPY OF TH E SCHEDULE OF DEPRECIATION. THE LD. A.R. SUBMITTED THAT THE ASSESSING OFFICER HAS MADE DOUBL E DISALLOWANCE ON ACCOUNT OF NON- EXCLUSION OF THE SAID PROFIT OF RS.30,22,361/-. 22. ON THE OTHER HAND, THE LD. D.R. RELIED ON THE O RDER OF THE LD. CIT(APPEALS) AND SUBMITTED THAT THE ASSESSEE COULD NOT FURNISH THE D ETAILS BEFORE THE AUTHORITIES BELOW. 23. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. R EPRESENTATIVES OF THE PARTIES AND PAGE 60 OF THE PAPER BOOK, WHICH IS A COPY OF THE CHART OF DEPRECIATION. WE OBSERVE THAT NEITHER THE ASSESSING OFFICER NOR CIT(APPEALS) HAVE DISCUSSED T HE FACTS OF THE CASE AS STATED BY THE ASSESSEE BEFORE US. WE ARE OF THE CONSIDERED VIEW T HAT THIS ISSUE BE RESTORED TO THE ASSESSING OFFICER WITH A DIRECTION TO RE-DECIDE THE SAME AFTE R GIVING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE AND CONSIDERING SUCH DETAILS, AS MAY BE FI LED BY THE ASSESSEE BEFORE HIM. HENCE, GROUND NO. 3 OF THE APPEAL TAKEN BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 24. THE GROUND NO. 4 OF THE APPEAL IS AS UNDER :- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS) WAS WHOLLY UNJUSTIFIED AND ERRED IN UP HOLDING DISALLOWANCE AMOUNTING TO RS.1,00,000/- AS INITIAL CONTRIBUTION TO APPROVED PENSION FUND. 25. THE ASSESSING OFFICER WHILE COMPUTING TOTAL INC OME OF THE ASSESSEE HAS NOT EXCLUDED THE SAID CLAIM OF THE ASSESSEE STATED TO BE INITIAL CONTRIBUTION TO APPROVED PENSION FUND OF RS.1,00,000/-. IT IS RELEVANT TO STATE THAT THERE I S NO DISCUSSION ON THIS ISSUE IN THE ASSESSMENT ORDER. THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT (APPEALS). THE LD. CIT(APPEALS) VIDE PARA 4 OF THE IMPUGNED ORDER HAS CONFIRMED THE ACTION OF T HE ASSESSING OFFICER ON THE GROUND THAT THE ITA NO. 555/KOL.2007 10 ASSESSEE HAS FAILED TO GIVE PARTICULARS OF THE DISA LLOWANCE. HENCE, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 26. DURING THE COURSE OF HEARING, THE ASSESSEE SUBM ITTED THAT THE ASSESSEE MADE INITIAL CONTRIBUTION OF RS.1,00,000/- TO THE PENSION FUND A ND THE SAID PENSION FUND IS AN APPROVED ONE. HOWEVER, THE LD. A.R. AT THE TIME OF HEARING F ILED A COPY OF LETTER DATED 26.05.1989 OF LD. CIT ACCORDING APPROVAL OF EXECUTIVE STAFF PENSION F UND CONSTITUTED UNDER THE TRUST DEED DATED 06.01.1987. 27. CONSIDERING THE FACT THAT THE ASSESSEE COULD NO T PRODUCE THE SAID LETTER BEFORE THE AUTHORITIES BELOW BUT HAS PLACED COPY OF THE SAME B EFORE US AT THE TIME OF HEARING, WE IN THE INTEREST OF JUSTICE, CONSIDER IT PRUDENT TO RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER AFTER SETTING ASIDE THE ORDERS OF THE AUTHORITIES B ELOW. THE ASSESSING OFFICER WILL CONSIDER THE CLAIM OF THE ASSESSEE IN ACCORDANCE WITH LAW AFTER GIVING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. HENCE, GROUND NO. 4 OF THE APPEAL TAKEN B Y THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 28. GROUND NO. 5 OF THE APPEAL IS AS UNDER :- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS) GROSSLY ERRED IN NOT DIRECTING THE LD. ASSESSING OFFICER TO RECOMPUTE THE CLAIM FOR DEPRECIATION AS A RESULT OF APPEAL ORDERS OF EARLIE R YEARS, AND OTHER ADJUSTMENTS. 29. IN THE RETURN FILED, THE ASSESSEE CLAIMED DEPRE CIATION OF RS.1,76,92,195 /- AND REFERRED PAGE 2 OF THE PAPER BOOK. THE ASSESSEE REFERRED LET TER DATED 15.09.1992, A COPY OF WHICH IS PLACED AT PAGES 57 TO 59 OF THE PAPER BOOK AND SUBM ITTED THAT THE ASSESSEE FILED THE REVISED DEPRECIATION COMPUTATION CHART BY ENHANCING THE DEP RECIATION BY RS.75,970/- ON ACCOUNT OF CONSEQUENT CHANGES IN THE DEPRECIATION ALLOWANCE FR OM ASSESSMENT YEARS 1983-84 TO 1989-90 FOLLOWING THE APPEAL EFFECTS OF VARIOUS PROCEEDINGS AND RELATED MATTERS. THE ASSESSING OFFICER DID NOT CONSIDER THE SAME. IN THE FIRST APPEAL, THE LD. CIT(APPEALS) HAS CONFIRMED THE ACTION OF THE ASSESSING OFFICER ON THE GROUND THAT IN THE ABS ENCE OF DETAILS FURNISHED, THE CLAIM OF THE ASSESSEE IS UNSUBSTANTIATED. HENCE, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 30. DURING THE COURSE OF HEARING, THE LD. A.R. MADE HIS SUBMISSIONS BY REFERRING TO THE LETTER DATED 15.09.1992 ADDRESSED TO THE ASSESSING OFFICER AND SUBMITTED THAT THE ASSESSING OFFICER WITHOUT GIVING ANY REASON ALLOWED ONLY THE ORIGINAL CLAIM OF DEPRECIATION AND NOT CONSIDERED THE REVISED CLAIM, WHICH RESULTED DUE TO GIVING APPEAL EFFECTS OF VARIOUS PROCEEDINGS FROM ASSESSMENT YEARS 1983-84 TO 1989-9 0. HE SUBMITTED THAT THE ENHANCED COMPENSATION CLAIMED BY THE ASSESSEE IS ALLOWABLE. ITA NO. 555/KOL.2007 11 31. ON THE OTHER HAND, THE LD. D.R. RELIED ON THE O RDER OF LD. CIT(APPEALS). 32. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. R EPRESENTATIVES OF THE PARTIES AND THE ORDERS OF THE AUTHORITIES BELOW. ON PERUSAL OF LETT ER DATED 15.09.1992 PLACED AT PAGES 57 TO 59 OF THE PAPER BOOK, WE FIND MERITS IN THE CONTENTION OF THE LD. A.R. THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED NOT TO CONSIDER THE CLAIM OF ENHA NCED DEPRECIATION OF THE ASSESSEE, WHICH HAD ARISEN ON ACCOUNT OF GIVING EFFECT TO APPEAL PROCEE DINGS AND RELATED MATTERS FROM PRECEDING ASSESSMENT YEARS 1983-84 TO 1989-90. THE SAID ACTIO N OF THE AUTHORITIES BELOW IS NOT JUSTIFIED. HENCE, WE DIRECT THAT THE ASSESSING OFFICER WHILE G IVING APPEAL EFFECT TO OUR ORDER WILL CONSIDER THE REVISED CLAIM OF THE ASSESSEE ON THE B ASIS OF THE DOCUMENTS AS MAY BE FURNISHED BY THE ASSESSEE BEFORE HIM AND GIVE DUE OPPORTUNITY OF HEARING. HENCE, GROUND NO. 5 OF THE APPEAL TAKEN BY THE ASSESSEE IS ALLOWED FOR STATIST ICAL PURPOSES BY RESTORING THE ISSUE TO THE ASSESSING OFFICER. 33. THE GROUND NO. 6 OF THE APPEAL IS AS UNDER :- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS) WAS NOT JUSTIFIED IN UPHOLDING THE DIS ALLOWANCE OF LOSS ON PURCHASE AND SALE OF UNITS OF UTI AMOUNTING TO RS.1 4,80,880/-. 34. THE ASSESSING OFFICER HAS DISCUSSED THE DETAILS OF PURCHASE AND SALE OF UNITS OF U.T.I. AT PAGES 5 TO 8 OF THE ASSESSMENT ORDER. THE ASSESS ING OFFICER HAS STATED THAT THERE IS NO EVIDENCE REGARDING THE IDENTITY OF THE UNITS TRADED . HE HAS STATED THAT THE TRANSACTIONS RESULTED INTO LOSS ON UNITS AS CLAIMED BY THE ASSESSEE APPEA RED TO BE TAINTED AND THUS DISALLOWED THE LOSS CLAIMED BY THE ASSESSEE. BEING AGGRIEVED, THE ASSES SEE FILED APPEAL BEFORE THE LD. CIT(APPEALS). 35. ON BEHALF OF THE ASSESSEE, IT WAS CONTENDED THA T THE LOSS WAS INCURRED IN THE TRANSACTIONS OF PURCHASE AND SALE OF UNITS ON THE SAME DAY. SINC E THE TRANSACTIONS HAVING BEEN ENTERED ON THE SAME DAY, THE TRANSACTIONS WERE COMPLETED WITHO UT TAKING DELIVERY OF THE UNITS. THE LD. CIT(APPEALS) HAS HELD THAT SUCH TRANSACTIONS ARE CO VERED BY THE DEFINITION OF THE SPECULATION TRANSACTIONS WITHIN THE MEANING OF SECTION 43(5) OF THE ACT. HENCE, THE LD. CIT(APPEALS) HAS STATED THAT THE ASSESSING OFFICER IS CORRECT AS PER LAW IN NOT ALLOWING THE LOSS FROM THE ITA NO. 555/KOL.2007 12 TRANSACTIONS OF THESE UNITS IN COMPUTING THE BUSINE SS INCOME OF THE ASSESSEE AND HENCE, COULD NOT BE ALLOWED. HENCE, THE ASSESSEE IS IN FURTHER A PPEAL BEFORE THE TRIBUNAL. 36. THE LD. A.R. REFERRED TO PAGES 68 TO 77 OF THE PAPER BOOK AND SUBMITTED THAT IT CONTAINS THE DETAILS OF THE UNITS PURCHASED AND SOLD BY THE ASSESSEE, IN WHICH THE ASSESSEE INCURRED LOSS OF RS.14,80,880/-. THE LD. A.R. RELYING ON THE DEC ISION OF THE ITAT, BANGALORE BENCH IN THE CASE OF ACIT VS.- M/S. STANDARD CHARTERED FINANCE LEASING CO. DATED 30.01.2009 (2009 - TIOL 117-ITAT-BANGALORE), A COPY OF WHICH IS PLACED AT PAGES 159 TO 166 OF THE PAPER BOOK, SUBMITTED THAT UNITS OF U.T.I. IS NEITHER COMMODITY NOR STOCK AND SHARES AND HENCE, PROVISIONS OF SECTION 43(5) ARE NOT APPLICABLE. FURTHER, THE L D. A.R. SUBMITTED THAT IN RESPECT OF TRANSACTIONS SHOWN AT SL. NO. 11 & 12 AND 13 & 14, THE DETAILS OF WHICH ARE PLACED AT PAGE 74 OF THE PAPER BOOK, UNITS WERE PURCHASED FROM VCK SH ARE & STOCK BROKING SERVICES (PVT.) LTD. AND WERE SOLD TO AMEX BANK BY ACTUAL DELIVERY ONLY. HENCE, AT LEAST TO THESE TRANSACTIONS THE PROVISIONS OF SECTION 43(5) ARE NOT APPLICABLE. THE LD. A.R. SUBMITTED THAT THE ACTION OF THE ASSESSING OFFICER TO DISALLOW THE LOSS IS NOT JUSTI FIED. HE SUBMITTED THAT THE LD. CIT(APPEALS) TO HOLD THAT THE SAID LOSS IS SPECULATIVE IN NATURE IS CONTRARY TO THE DECISION OF ITAT (SUPRA). 37. ON THE OTHER HAND, THE LD. D.R. SUPPORTED THE O RDER OF LD. CIT(APPEALS) ON THE GROUND THAT THE ASSESSEE COULD NOT FILE DETAILS OF THE PUR CHASES AND SALES OF UNITS. HE REFERRED PARA 2 AT PAGE 5 OF THE ORDER OF THE LD. CIT(APPEALS) AND SUB MITTED THAT THE ASSESSEE ITSELF CONTENDED BEFORE THE LD. CIT(APPEALS) THAT LOSS WAS INCURRED IN RESPECT OF THE TRANSACTIONS OF PURCHASE AND SALE OF UNITS ON THE SAME DAY. HE SUBMITTED THAT TH E ORDER OF THE LD. CIT(APPEALS) BE CONFIRMED. 38. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. REPRESENTATIVES OF THE PARTIES AND THE ORDERS OF THE AUTHORITIES BELOW. IT IS A FA CT THAT THE UNITS ARE NEITHER SHARES NOR STOCK NOR COMMODITY. HENCE, WE AGREE WITH THE LD. A.R. THAT T HE PROVISIONS OF SECTION 43(5) OF THE INCOME TAX ACT ARE NOT APPLICABLE IN RESPECT OF TRA NSACTIONS OF UNITS OF U.T.I. IN THIS REGARD, WE ARE SUPPORTED BY THE DECISION OF THE ITAT, BANGA LORE BENCH, WHICH WAS DECIDED BY FOLLOWING THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF APOLLO TYRES LTD. VS.- CIT [255 ITR 273], WHEREIN IT WAS HELD THAT UNITS ARE N EITHER STOCKS NOR SHARES NOR COMMODITIES AS CONTEMPLATED UNDER SECTION 43(5) OF THE ACT. FURTH ER THE LD. D.R. ALSO COULD NOT CONTRADICT THE SUBMISSION OF THE LD. A.R. THAT THE TRANSACTIONS SH OWN IN SL. NOS. 11 & 12 AND 13 & 14 AT PAGE ITA NO. 555/KOL.2007 13 74 OF THE PAPER BOOK WERE ON ACCOUNT OF PURCHASE FR OM VCK SHARE & STOCK BROKING SERIVICE (P) LTD. AND SALE TO AMAX BANK. IT COULD BE EFFECTI VE BY ACTUAL DELIVERY OF UNITS. WE OBSERVE THAT THE ASSESSING OFFICER HAD DISALLOWED THE CLAIM OF LOSS BY DOUBTING THE GENUINENESS OF THE TRANSACTIONS AND WHEREAS THE LD. CIT(APPEALS) HAS D ENIED THE CLAIM OF THE ASSESSEE BY CONSIDERING THE LOSS AS SPECULATIVE IN NATURE. WE A RE OF THE CONSIDERED VIEW THAT THIS ISSUE BE RESTORED TO THE ASSESSING OFFICER WITH A DIRECTION TO RE-DECIDE THE SAME AFTER GIVING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE AND CONSIDER ING SUCH DETAILS AS MAY BE FILED BY THE ASSESSEE. HENCE, GROUND NO. 6 OF THE APPEAL IS ALLO WED FOR STATISTICAL PURPOSES BY RESTORING THE ISSUE TO THE ASSESSING OFFICER. 39. IN GROUND NO. 7 OF THE APPEAL, THE ASSESSEE HAS DISPUTED THE ORDER OF LD. CIT(APPEALS) IN UPHOLDING THE DISALLOWANCE OF EX-GRATIA PAYMENT AMOUNTING TO RS.5,11,293/-. 40. THE ASSESSING OFFICER WHILE COMPUTING THE INCOM E OF THE ASSESSEE ADDED A SUM OF RS.5,11,293/- WHICH WAS CLAIMED BY THE ASSESSEE AS EX-GRATIA PAYMENT. IT IS RELEVANT TO STATE THAT THERE IS NO REASON/ DISCUSSION OF THE ASSESSIN G OFFICER WHILE MAKING THE ABOVE ADDITION. IN THE FIRST APPEAL, THE LD. CIT(APPEALS) HAS CONFIRME D THE ACTION OF THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE HAS NOT FURNISHED ANY EVID ENCE TO SUBSTANTIATE THE CONTENTION THAT THE EX-GRATIA PAYMENT IS A BUSINESS EXPENDITURE AND IS ALLOWABLE UNDER SECTION 37(1) OF THE ACT. THE LD. CIT(APPEALS) HAS STATED THAT IN THE ABSENCE OF SATISFACTORY EVIDENCE, THE APPELLANTS CONTENTION IS UNSUBSTANTIATED. HENCE, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 41. DURING THE COURSE OF HEARING, THE LD. A.R. SUBM ITTED THAT THE ABOVE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT, KOL KATA IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 1985-86 IN ITA NO. 3248/CAL./1988. HOWEVER, TH E LD. D.R. SUBMITTED THAT NO DETAILS HAVE BEEN FILED BY THE ASSESSEE BEFORE THE AUTHORITIES B ELOW. IN REPLY TO A QUERY FROM THE BENCH, THE LD. A.R. CONCEDED THAT THERE ARE NO DETAILS FILED B Y THE ASSESSEE. FURTHER, HE CONCEDED THAT NO DETAILS IN RESPECT OF THE ABOVE PAYMENT ARE ALSO PL ACED IN THE PAPER BOOK FILED BEFORE THE TRIBUNAL. 42. CONSIDERING THE ABOVE FACTS THAT THERE IS NO DE TAILS FILED BEFORE US NOR THE DETAILS WAS FILED BEFORE THE AUTHORITIES BELOW, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(APPEALS) IRRESPECTIVE OF THE FACT THAT THE SAID ISSUE IS ALREADY COVERED IN FAVOUR OF THE ITA NO. 555/KOL.2007 14 ASSESSEE BY THE ORDER OF THE TRIBUNAL DATED 09.11.1 992 IN ITA NO. 3248/CAL./1998 FOR ASSESSMENT YEAR 1985-86, COPY OF WHICH IS PLACED AT PAGES 116 TO 120 OF THE PAPER BOOK. AS WE OBSERVE THAT IN THAT ASSESSMENT YEAR, THE ASSESEE F ILED THE DETAILS, UNLIKE IN THE ASSESSMENT YEAR UNDER CONSIDERATION. HENCE, IN VIEW OF THE ABOVE FA CTS, WE REJECT THE GROUND NO. 7 OF THE APPEAL TAKEN BY THE ASSESSEE. 43. GROUND NO. 8 OF THE APPEAL IS AS UNDER :- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS) WAS NOT JUSTIFIED AND RATHER GROSSLY E RRED IN UPHOLDING DISALLOWANCE UNDER RULE 6B AMOUNTING TO RS.44,005/- . 44. THE ASSESSING OFFICER WHILE COMPUTING THE INCOM E OF THE ASSESSEE DISALLOWED RS.44,005/- ON THE GROUND THAT ARTICLES PRESENTED A ND THE VALUE OF WHICH ARTICLES EXCEEDED RS.50/-. IN THE FIRST APPEAL, THE LD. CIT(APPEALS) HAS CONFIRMED THE ACTION OF THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE COULD NOT L EAD ANY EVIDENCE DURING THE ASSESSMENT PROCEEDINGS OR DURING APPEAL PROCEEDINGS THAT THE A RTICLES DID NOT HAVE ADVERTISEMENT VALUE AND IS ALLOWABLE AS A DEDUCTION. HENCE, THE ASSESESEE I S IN FURTHER APPEAL BEFORE THE TRIBUNAL. 45. AT THE TIME OF HEARING, THE LD. A.R. REITERATED THE ABOVE SUBMISSION AS MADE BEFORE THE LD. CIT(APPEALS). FURTHER, HE CONTENDED THAT THE SI MILAR ISSUE WAS CONSIDERED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 1996-97 IN ITA NOS. 787 & 813/CAL./2000, COPY OF WHICH PLACED AT PAGES 124 TO 127 OF THE PAPER BOOK (INCOMPLETE COPY). HOWEVER, IN REPLY TO A QUERY FROM THE BENCH, THE ASSESSEE CONCEDED THAT TH E DETAILS OF THE ARTICLES AND THE EXPENDITURE INCURRED ON EACH OF THE ITEM COULD NOT BE FURNISHED BEFORE THE AUTHORITIES BELOW TO SUBSTANTIATE THAT THE ARTICLES DID NOT HAVE ANY ADVERTISEMENT VA LUE AND, THEREFORE, THE SAID EXPENDITURE DOES NOT FALL UNDER THE PURVIEW OF RULE 6B. 46. CONSIDERING THE ABOVE FACTS, WE ARE OF THE CONS IDERED VIEW THAT THE RELIANCE PLACED BY THE LD. A.R. ON THE EARLIER ORDER OF THE TRIBUNAL D ATED 29.08.2003 TO WHICH ONE OF US IS A PARTY, (JUDICIAL MEMBER), WE DO NOT FIND ANY REASON TO INT ERFERE WITH THE ORDER OF LD. CIT(APPEALS). THE ASSESSEE WAS REQUIRED TO GIVE THE DETAILS OF TH E EXPENDITURE TO SUBSTANTIATE THAT THE ARTICLES PRESENTED DID NOT HAVE ANY ADVERTISEMENT VALUE AND THESE ARE OUTSIDE THE PURVIEW OF RULE 6B OF THE INCOME TAX RULES. HENCE, WE UPHOLD THE ORDER OF THE LD. CIT(APPEALS) AND REJECT THE GROUND NO. 8 OF THE APPEAL TAKEN BY THE ASSESSEE. ITA NO. 555/KOL.2007 15 47. GROUND NO. 9 OF THE APPEAL IS AS UNDER :- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(APPEALS) WAS NOT JUSTIFIED IN UPHOLDING DISALLO WANCE OF PAYMENTS MADE TO CLUBS AMOUNTING TO RS.46,675/-. 48. THE ASSESSING OFFICER WHILE COMPUTING THE INCOM E OF THE ASSESSEE ADDED A SUM OF RS.46,675/- ON ACCOUNT OF PAYMENT TO CLUBS. IN THE FIRST APPEAL, THE LD. CIT(APPEALS) HAS CONFIRMED THE ACTION OF THE ASSESSING OFFICER ON TH E GROUND THAT THE PAYMENT IS IN THE NATURE OF PERSONAL EXPENSES OF THE PERSONS, WHO ENJOY THE FAC ILITIES OF THE CLUBS. HENCE, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 49. DURING THE COURSE OF HEARING, THE LD. A.R. SUBM ITTED THAT SIMILAR DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER IN ASSESSMENT YEAR 1989-90 BUT THE FIRST APPELLATE AUTHORITY ALLOWED THE CLAIM OF THE ASSESSEE AND REFERRED PAGES 112 TO 115 OF THE PAPER BOOK. HE SUBMITTED THAT NO FURTHER APPEAL WAS FILED BY THE REVENUE. HE FURTHER SUBMITTED THAT THE EXPENDITURE WAS INCURRED WHOLLY AND NECESSARILY IN CONNECTION WITH THE BUSIN ESS OF THE ASSESSEE. IN REPLY TO A QUERY FROM THE BENCH AS TO WHETHER THE DETAILS ARE PLACED ON R ECORD OF THE SAID EXPENDITURE OF RS.46,675/- CLAIMED BY THE ASSESSEE TOWARDS PAYMENT TO THE CLUB S, THE LD. A.R. CONCEDED THAT NO DETAILS ARE AVAILABLE ON RECORD. 50. CONSIDERING THE ABOVE SUBMISSION OF THE LD. A.R . AND THE ORDERS OF THE AUTHORITIES BELOW, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(APPEALS) IRRESPECTIVE OF THE FACT THAT THE SIMILAR DISALLOWANCE MADE BY T HE ASSESSING OFFICER IN ASSESSMENT YEAR 1989-90 WAS ALLOWED BY THE LD. CIT(APPEALS) AND NO APPEAL EVEN THOUGH PREFERRED BY THE DEPARTMENT BEFORE THE TRIBUNAL. THE ASSESSEE IS RE QUIRED TO GIVE THE DETAILS TO ESTABLISH THAT THE SAID EXPENDITURE WAS INCURRED WHOLLY AND NECESS ARILY FOR THE BUSINESS OF THE ASSESSEE. HENCE, THE GROUND NO. 9 OF THE APPEAL TAKEN BY THE ASSESSEE IS REJECTED. 51. IN GROUND NO. 10 OF THE APPEAL, THE ASSESSEE HA S DISPUTED THE ORDER OF LD. CIT(APPEALS) IN UPHOLDING THE DISALLOWANCE OF PRIOR PERIOD EXPEN SES AMOUNTING TO RS.1,86,917/-. 52. THE ASSESSING OFFICER WHILE MAKING THE ASSESSME NT OBSERVED THAT THE ASSESSEE DEBITED TO THE PROFIT & LOSS A/C. A SUM OF RS.2,88,904/- TO WARDS EARLIER YEARS EXPENSES AND DISALLOWED THE SAME. BEING AGGRIEVED, THE ASSESSEE FILED APPEA L BEFORE THE FIRST APPELLATE AUTHORITY. ITA NO. 555/KOL.2007 16 53. THE LD. CIT(APPEALS) CONSIDERED THAT THE SAID S UM OF RS.2,88,904/- INCLUDES THE SUM OF RS.1,01,987/- RELATING TO BONUS OF EARLIER YEARS PA ID DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. THE LD. CIT(AP PEALS) HAS STATED THAT THE SAID EXPENDITURE IS ALLOWABLE AS PER SECTION 43B OF THE ACT IN THE A SSESSMENT YEAR UNDER CONSIDERATION. IN RESPECT OF THE BALANCE AMOUNT OF RS.1,86,917/-, THE LD. CIT(APPEALS) HAS STATED THAT NO EVIDENCE HAS BEEN LED TO PROVE THAT THE SAID EXPEND ITURE HAS CRYSTALLIZED IN THE ASSESSMENT YEAR UNDER CONSIDERATION. THE LD. CIT(APPEALS) HAS STATE D THAT IN THE ABSENCE OF SATISFACTORY EVIDENCE, THE ASSESSING OFFICER IS CORRECT TO DISAL LOW THE SUM AS NOT RELATING TO THIS ASSESSMENT YEAR UNDER CONSIDERATION. HENCE, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 54. DURING THE COURSE OF HEARING, THE LD. A.R. SUBM ITTED THAT THE SAID EXPENDITURE OF RS.1,86,917/- HAS BEEN CRYSTALLIZED DURING THE ASSE SSMENT YEAR BUT IN REPLY TO A QUERY FROM THE BENCH, THE LD. A.R. SUBMITTED THAT THERE ARE NO DET AILS TO SUBSTANTIATE THAT THE SAID LIABILITY OF EXPENSES OF EARLIER YEARS WAS CRYSTALLIZED IN THE A SSESSMENT YEAR UNDER CONSIDERATION. 55. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(APPEALS). HENCE, WE REJECT THE GROUND NO. 10 OF THE APPEAL TAKEN BY THE ASSESSEE. 56. IN GROUND NO. 11 OF THE APPEAL, THE ASSESSEE HA S DISPUTED THE DISALLOWANCE OF INTEREST CHARGED BY AMERICAN EXPRESS BANK OF RS.7,232/- ON C ANCELLATION OF PURCHASE TRANSACTION OF UNITS OF U.T.I. 57. AT THE TIME OF HEARING, THE LD. A.R. CONCEDED T HAT NO DETAILS OF THIS SPECIFIC TRANSACTION IN RESPECT OF THE ABOVE INTEREST CHARGED BY THE AME RICAN EXPRESS BANK ARE AVAILABLE ON RECORD. 58. CONSIDERING THE ABOVE FACTS, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(APPEALS). HENCE, GROUND NO. 11 OF THE APPEA L TAKEN BY THE ASSESSEE IS REJECTED. 59. GROUND NO. 12 OF THE APPEAL IS AS UNDER :- (A) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS) ERRED IN UPHOLDING DEDUCTION OF INTERE ST OF RS.41,03,833/- ITA NO. 555/KOL.2007 17 FROM DIVIDEND INCOME WHICH RESULTED IN DENIAL OF DE DUCTION UNDER SECTION. 80M BY RS.24,62,300/-. (B) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, AND WITHOUT PREJUDICE TO THE GROUND 12(A) THE LD. CIT(APPEALS) ERRED IN UPHOLDING THAT THE CALCULATION OF AFORESAID INTEREST WAS CORR ECT. 60. DURING THE COURSE OF HEARING, THE LD. A.R. CONC EDED THAT THE GROUND NO. 12 OF THE APPEAL IS CONNECTED WITH GROUND NO. 1 OF THE APPEAL . HE SUBMITTED THAT IF THE INTEREST EXPENDITURE INCURRED BY THE ASSESSEE IS CONSIDERED LINKED WITH THE INVESTMENT IN SHARES/ UNITS/ BONDS, IT BE DISALLOWED UNDER SECTION 14A OF THE IN COME TAX ACT BY CONFIRMING THE ORDER OF THE LD. CIT(APPEALS), THE SAID GROUND IS CONSEQUENT IAL AND IN THAT CASE, THE INTEREST IS TO BE DEDUCTED OUT OF THE DIVIDEND INCOME WHILE COMPUTING DEDUCTION ALLOWABLE UNDER SECTION 80M OF THE ACT. 61. SINCE WE HAVE ALREADY DECIDED GROUND NO. 1 OF T HE APPEAL AGAINST THE ASSESSEE, THE GROUND NO. 12 OF THE APPEAL TAKEN BY THE ASSESSEE I S CONSEQUENTIAL AND ACCORDINGLY THE ORDER OF THE LD. CIT(APPEALS) IS CONFIRMED BY REJECTING T HE GROUND NO. 12 TAKEN BY THE ASSESSEE. WE MAY STATE THAT WHILE DEDUCTING THE INTEREST INCOME, AS MENTIONED WHILE DECIDING GROUND NO. 1 OF THE APPEAL, ASSESSING OFFICER WILL COMPUTE THE C ORRECT INTEREST PAID BY THE ASSESSEE AND ACCORDINGLY CONSIDER THE CLAIM OF DEDUCTION UNDER S ECTION 80M OF THE ACT. 62. GROUND NO. 13 OF THE APPEAL IS AS UNDER :- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS) ERRED IN UPHOLDING THAT INTEREST ON DE POSITS, INTEREST ON FIXED DEPOSITS AND SPECULATION INCOME AS INCOME FRO M OTHER SOURCES AND EXCLUDING THEM FROM THE PROFITS OF THE BUSINESS, RE SULTING IN REDUCED DEDUCTION CLAIMED UNDER SECTION. 80HHC. 63. IN THE RETURN OF INCOME FILED, THE ASSESSEE TRE ATED THE INTEREST ON DEPOSIT OF RS.19,10,397/-, INTEREST ON FIXED DEPOSITS OF RS.6, 98,198/- AND SPECULATIVE INCOME OF RS.2,98,900/- AS BUSINESS INCOME AND ACCORDINGLY CL AIMED DEDUCTION UNDER SECTION 80HHC OF THE ACT. THE ASSESSING OFFICER CONSIDERED THE ABOVE INCOMES OF THE ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES AND ACCORDINGLY ALLOWED DEDUCTION UNDER SECTION 80HHC OF THE ACT BY REDUCING THE ABOVE AMOUNTS. BEING AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. ITA NO. 555/KOL.2007 18 64. THE LD. CIT(APPEALS) CONFIRMED THE ACTION OF TH E ASSESSING OFFICER IN EXCLUDING INTEREST ON FIXED DEPOSIT AND SPECULATION INCOME WH ILE COMPUTING THE PROFITS OF THE BUSINESS FOR THE PURPOSE OF SECTION 80HHC OF THE ACT. HENCE, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 65. DURING THE COURSE OF HEARING, THE LD. A.R. RELI ED ON THE DECISION OF ITAT IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1989-90 IN ITA NO. 1121/KOL./2004 AND SUBMITTED THAT THE INTEREST INCOME IS TO BE REGARDED AS BUSINESS INCOM E WHILE COMPUTING DEDUCTION UNDER SECTION 80HHC OF THE ACT. 66. ON THE OTHER HAND, THE LD. D.R. SUPPORTED THE O RDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE INTEREST INCOME IS TO BE CONSIDE RED AS INCOME FROM OTHER SOURCES AND NOT BUSINESS INCOME. 67. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. REPRESENTATIVES OF THE PARTIES AND THE ORDERS OF THE AUTHORITIES BELOW. WE ARE OF THE CONSIDERED VIEW THAT THE ABOVE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE HONBLE ITA T, AHMEDABAD BENCH IN THE CASE OF BIO PHARMA VS.- DCIT [85 ITD 575] AND ALSO THE AUTHORI TY FOR ADVANCE RULINGS IN SHAMS TABREZ VANTI, IN RE [273 ITR 299], WHEREIN IT WAS HELD THA T INTEREST ACCRUED ON THE FDRS HAVE NO DIRECT NEXUS WITH THE EXPORT BUSINESS AND SUCH INTE REST INCOME IS TO BE ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES. IT WAS FURTHER HELD TH AT EVEN IF THE INTEREST ON FIXED DEPOSIT IS TO BE TREATED AS BUSINESS INCOME, IT WILL NOT AUTOMATI CALLY ESTABLISH THAT THE INTEREST INCOME IS DERIVED FROM INDUSTRIAL UNDERTAKING. IT WAS FURTHER HELD THAT EVEN IF THE FIXED DEPOSIT HAS BEEN USED BY WAY OF SECURITIES BY THE ASSESSEE, IT WOULD NOT ALTER THE POSITION. 68. CONSIDERING THE ABOVE DECISIONS (SUPRA), WE CON FIRM THE ACTION OF THE AUTHORITIES BELOW AND REJECT THE GROUND NO. 13 OF THE APPEAL TAKEN BY THE ASSESSEE. 69. IN GROUND NO. 14 OF THE APPEAL, THE ASSESSEE HA S DISPUTED THE ORDER OF LD. CIT(APPEALS) IN UPHOLDING THE DISALLOWANCE AMOUNTING TO RS.2,50, 405/- UNDER SECTION 40A(9) OF THE ACT. ITA NO. 555/KOL.2007 19 70. THE ASSESSING OFFICER MADE THE DISALLOWANCE OF RS.2,50,405/- AS PER SECTION 40A(9) OF THE ACT. BEING AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY AND CONTENDED THAT THE SAID CONTRIBUTION WAS MADE TO TH E APPROVED PENSION FUND AND REFERRED PAGE 28 OF THE PAPER BOOK, WHICH IS A COPY OF FORM NO. 3 CD. HOWEVER, DURING THE COURSE OF HEARING, THE LD. A.R. SUBMITTED THAT A LETTER HAS B EEN RECEIVED BY THE ASSESSEE APPROVING THE FUND BUT THE SAME COULD NOT BE FILED BY THE ASSESSE E BEFORE THE AUTHORITIES BELOW. THE LD. D.R. SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND S UBMITTED THAT THE ASSESSEE HAS NOT PLACED ANY SUCH DOCUMENT ON RECORD APPROVING THE ABOVE FUND. H OWEVER, AT THE TIME OF HEARING, THE LD. A.R. FILED A COPY OF THE LETTER DATED 26.05.1989 GI VING THE APPROVAL BY LD. COMMISSIONER OF INCOME TAX OF PENSION FUND TO THE ASSESSEE. 71. IT IS A FACT AND THE LD. A.R. CONCEDED THAT THE SAID COPY OF THE ORDER OF LD. CIT GIVING APPROVAL TO THE EXECUTIVE STAFF, PENSION FUND, WAS NOT FILED BEFORE THE AUTHORITIES BELOW AND HAS BEEN FILED FOR THE FIRST TIME BEFORE US IRRESPE CTIVE OF THE FACT THAT THE SAID LETTER IS DATED 26.05.1989, WE, HOWEVER, IN THE INTEREST OF JUSTICE , RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER AND DIRECT THAT THE ABOVE CLAIM OF THE ASSE SSEE BE CONSIDERED AFRESH AFTER GIVING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE AND CONSIDER ING SUCH DETAILS AS MAY BE REQUIRED BY HIM. HENCE, GROUND NO. 14 OF THE APPEAL TAKEN BY THE ASS ESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 72. THE GROUND NO. 15 OF THE APPEAL IS AS UNDER :- THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE , THE LD. CIT(APPEALS) ERRED IN UPHOLDING IMPOSITION OF INTEREST UNDER SEC TION. 234A, 234C & 201(1A). 73. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE HOLD THAT IN RESPECT OF INTER EST UNDER SECTION 234A AND 234C, THE SAME IS CONSEQUENTIAL AND NO SPECIFIC ADJUDICATION IS CALLE D FOR. 73.1. HOWEVER, IN RESPECT OF INTEREST CHARGEABLE UN DER SECTION 201(1A) OF THE ACT, A SEPARATE ORDER IS REQUIRED TO BE PASSED BY THE AUTHORITIES B ELOW AND ACCORDINGLY SEPARATE APPEAL IS TO BE FILED BY THE ASSESSEE. HENCE, THE SAID GROUND IS NO T CONSIDERED BY US IN THE ABSENCE OF ANY ITA NO. 555/KOL.2007 20 DETAILS AND DISCUSSIONS IN THE ORDERS OF THE AUTHOR ITIES BELOW. ACCORDINGLY, GROUND NO. 15 OF THE APPEAL TAKEN BY THE ASSESSEE IS REJECTED. 74. IN THE RESULT, THE APPEAL OF THE ASSESEE IS ALL OWED IN PART AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 25.03. 2011. SD/- SD/- [C. D. RAO ( . . )] [ B.R . MITTAL / . . ] ACCOUNTANT MEMBER/ ! ! ! ! JUDICIAL MEMBER/ ] DATED : 25/ 03/ 2011 COPY OF THE ORDER FORWARDED TO: 1. M/S. PAHARPUR COOLING TOWERS LIMITED, 8/1/B, DIAMON D HARBOUR ROAD, KOLKATA-27. 2 ACIT, CENTRAL CIRCLE-II, KOLKATA, PODDAR COURT, 18, RABINDRA SARANI, KOLKATA-1. 3. CIT(A)- ,KOLKATA 4. CIT- , KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA (TRUE COPY) BY ORDER ASSISTANT REGISTRAR I.T.A.T., KOLKATA. LAHA, SR. P.S.