DCIT, Circle - 5, Kolkata, Kolkata V. M/s. Essel Mining & Industries Ltd., Kolkata

ITA 589/KOL/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4791 (ITAT-KOLKATA)
• Duration Of Justice: 5 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2016
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 17-05-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 13-04-2011
• Court: TRIBUNAL
• Department Lawyers: RAJAT SUBHRA BISWAS
• Assessee Lawyers: D S DAMLE
• Keywords: Capital asset; Depreciation; Business expenditure; Earning of tax free income; Assessment record; Capital receipt; Revised return; Revenue expenditure; Capital expenditure
• Section: 143(3); 14A; 37(1); 12

Judgement Text

1 ITA NO.352/KOL/2011 & ITA NO.589/KOL/2011-ESSEL MIN ING & INDS.LTD A.Y.2007-08 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A KOL KATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & SHRI M.B ALAGANESH, AM ] ITA NO.352/KOL/2011 ASSESSMENT YEAR : 2007-08 ESSEL MINING & INDUSTRIES LTD. -VERSUS- ADDL. C.I. T., RANGE-5, KOLKATA KOLKATA (PAN:AAACE6607L) (APPELLANT) (RESPONDENT) ITA NO.589/KOL/2011 ASSESSMENT YEAR : 2007-08 D.C.I.T., CIRCLE-5, -VERSUS- ESSEL MINING & INDU STRIES LTD. KOLKATA KOLKATA (PAN:AAACE6607L) (APPELLANT) (RESPONDENT) FOR THE ASSESSEE: SHRI D.S.DAMLE, FCA FOR THE DEPARTMENT : SHRI RAJAT SUBHRA BISWAS, CIT (DR) DATE OF HEARING : 17.05.2016. DATE OF PRONOUNCEMENT :20.05.2016. ORDER PER N.V.VASUDEVAN, JM ITA NO.352/KOL/2011 IS AN APPEAL BY THE ASSESSEE WH ILE ITA NO.589/KOL/2011 IS AN APPEAL BY THE REVENUE. BOTH T HESE APPEALS ARE DIRECTED AGAINST THE ORDER DATED 10.01.2011 OF CIT(A)-VI, KO LKATA, RELATING TO AY 2007-08. ITA NO.352/KOL/2011 (ASSESSEES APPEAL) 2. GROUND NO.1 WAS NOT PRESSED AND THE SAME IS DISM ISSED AS NOT PRESSED. 3. GROUND NOS. 2 AND 3 RAISED BY THE ASSESSEE READ AS FOLLOWS :- 2. THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) W AS WRONG IN DISMISSING THE APPELLANT'S GROUND OF APPEAL IN RELATION TO THE APP ELLANT'S CLAIM FOR TREATMENT OF FOREIGN EXCHANGE FLUCTUATION GAIN TO THE EXTENT OF RS.5,79,10,208/- AS A CAPITAL RECEIPT IN THE HANDS OF THE APPELLANT. 2 ITA NO.352/KOL/2011 & ITA NO.589/KOL/2011-ESSEL MIN ING & INDS.LTD A.Y.2007-08 3. THAT WITHOUT PREJUDICE TO THE CONTENTION RAISED IN GROUND NO.2 ABOVE, THE COMMISSIONER OF INCOME-TAX (APPEALS) FAILED TO APPR ECIATE THAT THE SUPREME COURT DECISION IN THE CASE OF GOETZ (INDIA) LTD. WAS RELE VANT ONLY IN RELATION TO THE ASSESSING OFFICER'S POWER AND NOT IN RESPECT OF THE POWER OF AN APPELLATE AUTHORITY AND THUS HE ERRED IN APPLYING THE SAID DECISION IN RELATION TO THE CLAIM MADE BY THE APPELLANT AT THE APPEAL STAGE. 4. THE ASSESSEE IS A COMPANY. IT IS ENGAGED IN T HE BUSINESS OF RAISING OF ORE AND MANUFACTURE OF FERRO ALLOYS. THE ASSESSEE IS ALSO E NGAGED IN TRADING OF IRON ORE AND MINING ORE. FOR A.Y.2006-07 THE ASSESSEE FILED RETU RN OF INCOME DECLARING TOTAL INCOME OF RS.797,24,64,400/-. ASSESSMENT WAS COMPLE TED BY THE AO DETERMINING THE TOTAL INCOME OF RS.821,98,42,178/- BY ORDER DATED 3 0.12.2009 PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (ACT). IT IS NOT IN DISPUTE TH AT IN ARRIVING AT THE TOTAL INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME TH E ASSESSEE HAD INCLUDED FOREIGN EXCHANGE FLUCTUATION GAIN OF RS.10,89,43,668/-. THE ASSESSEE NOTICED THAT THE AFORESAID FOREIGN EXCHANGE FLUCTUATION GAIN INCLUDE D A SUM OF RS.5,79,10,208/- WHICH PERTAIN TO FOREIGN CURRENCY LOAN AVAILED BY THE ASS ESSEE FOR PURCHASE OF INDIGENOUS MACHINERY IN THE ASSESSEES WIND POWER UNIT. IT WAS THE PLEA OF THE ASSESSEE BEFORE CIT(A) THAT SIMILAR GAIN OR LOSS ON FOREIGN EXCHANG E FLUCTUATION AGAINST FOREIGN CURRENCY LOAN UTILISED FOR PURCHASE OF INDIGENOUS M ACHINERY HAD NOT BEEN INCLUDED IN THE TOTAL INCOME AND OFFERED TO TAX WHEN THERE WAS A GAIN ON THE GROUND THAT IT WAS A CAPITAL RECEIPT NOT CHARGEABLE TO TAX. NOR WAS IT EXCLUDED FROM THE TOTAL INCOME WHEN THERE WAS A LOSS ON THE GROUND THAT IT WAS A CAPITA L LOSS WHICH WILL NOT GO TO REDUCE THE TAXABLE TOTAL INCOME. THE DETAILS IN THIS REGARD HA VE BEEN GIVEN BY THE ASSESSEE AS FOLLOWS :- TREATMENT OF EXCHANGE FLUCTUATION GAIN/LOSS- WIND P OWER UNITS A.Y. AMOUNT IN RS. GAIN / (LOSS) TREATMENT 2007-08 57,910,208 CLAIMED AS CAPITAL RECE IPT BEFORE THE CIT(A). CLAIM NOT ALLOWED. APPEAL PENDING BEFORE ITA T 2008-09 19,65,08,245 CLAIMED AS CAPITAL RECEIPT IN THE COMPUTATION OF TO TAL INCOME. THE CLAIM ALLOWED IN THE ORDER U/S 143(3) A S WELL AS IN THE ORDER U/S 1471143(3) 2009-10 (41,33,87,127) ADDED BACK IN THE CO MPUTATION OF TOTAL INCOME BEING CAPITAL LOSS. ASSESSED AS SUCH I.E. LOSS DISALLOWED IN THE 3 ITA NO.352/KOL/2011 & ITA NO.589/KOL/2011-ESSEL MIN ING & INDS.LTD A.Y.2007-08 ORDER U/S 143(3) 2010-11 13,84,44,458 CLAIMED AS CAPITAL REC EIPT IN THE COMPUTATION OF TOTAL INCOME. THE CLAIM ALLOWED IN THE ORDER U/S 143(3) 2011-12 (50,94,002) ADDED BACK IN THE COMPU TATION OF TOTAL INCOME BEING CAPITAL LOSS. ASSESSED AS SUCH I.E. LOSS DISALLOWED IN THE ORDER U/S 143(3) 2012-13 (2,14,23,575) ADDED BACK IN THE COM PUTATION OF TOTAL INCOME BEING CAPITAL LOSS. ASSESSED AS SUCH I.E. LOSS DISALLOWED IN THE ORDER U/S 143(3) 5. THE ASSESSEE RAISED GROUND NO.13 BEFORE CIT(A) SEEKING TO EXCLUDE FROM THE TOTAL INCOME, THE GAIN ON FOREIGN EXCHANGE FLUCTUATION ON LOANS AVAILED FOR PURCHASE OF INDIGENOUS MACHINERIES, WHICH READ AS FOLLOWS :- 13. THAT THE ASSESSING OFFICER SHOULD HAVE TREATED A SUM OF RS.5,79,10,208/- OUT OF RS.10,89,43,668/- BEING THE GAIN ON FOREIGN EXCHANG E FLUCTUATION, AS CAPITAL RECEIPT IN THE APPELLANTS HANDS AND SO THE SAID SUM OF RS. 5,79,10,208/- SHOULD HAVE BEEN REDUCED FROM THE APPELLANTS TAXABLE INCOME. 6. THE ASSESSEE SUBMITTED BEFORE CIT(A) THAT SIN CE THE FOREIGN CURRENCY LOAN IN QUESTION HAD BEEN AVAILED AND UTILISED FOR PURCHASE OF INDIGENOUS FIXED ASSETS, THE GAIN THERE FROM SHOULD BE CONSIDERED AS BEING ON CA PITAL ACCOUNT AND CONSEQUENTLY THE SAID SUM WAS REQUIRED TO BE REDUCED FROM THE ASSESS EES TOTAL INCOME. THE ASSESSEE POINTED OUT BEFORE CIT(A) THAT THE AO OUGHT TO HAVE EXCLUDED THE SAME FROM THE TOTAL INCOME. THE ASSESSEE RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SUTLEJ COTTON MILLS LTD. VS. CIT 116 ITR 1 (SC) WHEREIN THE HONBLE SUPREME COURT HELD THAT PROFIT OR LOSS THAT ARISES TO AN AS SESSEE ON ACCOUNT OF APPRECIATION OR DEPRECIATION IN THE VALUE OF FOREIGN CURRENCY HELD BY IT, ON CONVERSION INTO ANOTHER CURRENCY, SUCH PROFIT OR LOSS WOULD ORDINARILY BE T RADING PROFIT OR LOSS IF THE FOREIGN CURRENCY IS HELD BY THE ASSESSEE ON REVENUE ACCOUNT OR AS A TRADING ASSET OR AS PART OF CIRCULATING CAPITAL EMBARKED IN THE BUSINESS. BUT, IF ON THE OTHER HAND, THE FOREIGN CURRENCY IS HELD AS CAPITAL ASSET OR AS FIXED CAPIT AL, SUCH PROFIT OR LOSS WOULD BE OF CAPITAL NATURE. 7. CIT(A) HOWEVER DID NOT AGREE WITH THE AFORESAID SUBMISSIONS OF THE ASSESSEE FOR THE REASONS THAT THE ASSESSEE DID NOT MAKE ANY CLAI M FOR EXCLUSION OF THE AFORESAID GAIN FROM THE TOTAL INCOME BEFORE THE AO BY FILING A REVISED RETURN OF INCOME. 4 ITA NO.352/KOL/2011 & ITA NO.589/KOL/2011-ESSEL MIN ING & INDS.LTD A.Y.2007-08 ACCORDING TO THE CIT(A) THE ASSESSEE FOR A.Y.2007-0 8 COULD HAVE FILED A REVISED RETURN ON 31.03.2009 AND SINCE THE ASSESSEE HAD FA ILED TO DO SO, IT CANNOT BE PERMITTED TO RECTIFY THE ABOVE OMISSION AFTER 31.03.2009. IN THIS REGARD THE CIT(A) REFERRED TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CA SE OF GOETZE (INDIA) LTD. VS CIT 284 ITR 323 (SC) WHEREIN THE HONBLE SUPREME COURT HELD THAT AFTER FILING THE RETURN OF INCOME, AN ASSESSEE CAN MAKE FURTHER NEW CLAIM O NLY BY FILING A REVISED RETURN OF INCOME IN TIME. THE CIT(A) THEREFORE HELD THAT THE CLAIM MADE BY THE ASSESSEE IN THIS REGARD CANNOT BE ENTERTAINED. 8. AGGRIEVED BY THE ORDER OF CIT(A) THE ASSESSEE HAS RAISED GROUND NOS 2 AND 3 BEFORE THE TRIBUNAL. 9. WE HAVE HEARD THE SUBMISSIONS OF THE LD. COU NSEL FOR THE ASSESSEE AND THE LEARNED DR. THE LD. COUNSEL FOR THE ASSESSEE BROUGH T TO OUR NOTICE THAT THE HONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD VS CIT (SUPRA) HELD THAT THE AO CANNOT ENTERTAIN ANY CLAIM BY AN ASSESSEE WHICH IS NOT MADE IN A RETURN OF INCOME, WITHOUT FILING A REVISED RETURN OF INCOME. IN THE AFORESAID DECISION, THE HONBLE SUPREME COURT ALSO MADE REFERENCE TO THE DECISION O F THE HONBLE SUPREME COURT IN THE CASE OF NTPC LTD. 229 ITR 383 (SC), WHEREIN IT WAS LAID DOWN THAT IT WAS OPEN TO THE ASSESSEE TO RAISE ANY POINT OF LAW EVEN BEFORE THE APPELLATE TRIBUNAL. THE LD COUNSEL FURTHER BROUGHT TO OUR NOTICE THAT THE HON BLE SUPREME COURT IN THE CASE OF GOETZE INDIA LTD FURTHER OBSERVED THAT IN PARA 4 OF ITS DECISION THAT ITS DECISION WILL NOT HAVE ANY IMPACT ON THE POWER OF THE TRIBUNAL U/ S 254 TO ENTERTAIN FOR THE FIRST TIME A POINT OF LAW, PROVIDED THE FACT ON THE BASIS OF W HICH THE ISSUE OF LAW CAN BE ADJUDICATED ARE ALREADY AVAILABLE ON RECORD. THE HO NBLE SUPREME COURT MADE IT CLEAR THAT ITS DECISION WAS LIMITED IN THE POWER OF THE A O. THE LD.COUNSEL SUBMITTED THAT IN THE DECISION RENDERED BY THE HONBLE SUPREME COURT IN THE CASE OF NTPC LTD. VS CIT (SUPRA) THE HONBLE SUPREME COURT HAD PLACED RELIAN CE ON ITS OWN DECISION IN THE CASE OF JUTE CORPORATION OF INDIA VS CIT 1991 AIR 241 (S C). IN THE SAID DECISION THE HONBLE SUPREME COURT, DEALT WITH THE POWER OF THE FIRST APPELLATE AUTHORITY TO ENTERTAIN A CLAIM THAT WAS NOT MADE IN THE RETURN O F INCOME OR BEFORE THE AO. THE NEW PLEA IN THE APPEAL BEFORE IT WITH A RIDER THAT THE APPELLATE AUTHORITY MUST BE SATISFIED 5 ITA NO.352/KOL/2011 & ITA NO.589/KOL/2011-ESSEL MIN ING & INDS.LTD A.Y.2007-08 THAT THE GROUND RAISED WAS BONA FIDE AND THE SAME C WAS NOT RAISED EARLIER FOR GOOD REASONS. THE LD. COUNSEL SUBMITTED THAT THE RATIO L AID DOWN IN THE CASE OF GOETZE INDIA LTD., REGARDING THE POWER OF THE TRIBUNAL TO ENTERT AIN A NEW PLEA SHOULD BE CONSTRUED AS APPLICABLE TO THE FIRST APPELLATE AUTHORITY ALSO IN VIEW OF THE DECISION IN THE CASE OF JUTE CORPORATION OF INDIA (SUPRA). THE LD. DR RELIE D ON THE ORDER OF THE AO. 10. WE HAVE GIVEN A VERY CAREFUL CONSIDERATION T O THE RIVAL SUBMISSIONS AND ARE OF THE VIEW THAT THE STAND TAKEN BY THE LD. COUNSEL FO R THE ASSESSEE DESERVES TO BE ACCEPTED. AS RIGHTLY CONTENDED BY HIM THE FACTS WIT H REGARD TO THE FOREIGN EXCHANGE FLUCTUATION GAIN AND THE PURPOSE FOR WHICH THE FORE IGN CURRENCY LOAN HAD BEEN AVAILED VIZ., TO PURCHASE INDIGENOUS MACHINERIES ARE NOT IN DISPUTE. THE PAST ASSESSMENT RECORDS ALSO SHOW THAT THE ASSESSEE HAS BEEN CONSIS TENTLY EXCLUDING SIMILAR FOREIGN EXCHANGE FLUCTUATION GAIN FROM THE COMPUTATION OF T OTAL INCOME. IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE VIEW THAT T HE FIRST APPELLATE AUTHORITY OUGHT TO COULD HAVE ENTERTAINED THE CLAIM OF THE ASSESSEE AN D EXAMINED THE SAME ON MERITS RATHER THAN REFUSING TO ENTERTAIN THE CLAIM BY RELY ING ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZE INDIA LTD . WE HOLD ACCORDINGLY. 11. THE NEXT ARGUMENT RAISED BY THE LD. COUNSEL FOR THE ASSESSEE WAS THAT THE ISSUE CAN BE ADJUDICATED BY THE TRIBUNAL RATHER THAN REMA ND THE ISSUE TO THE CIT(A) FOR FRESH CONSIDERATION. IN THIS REGARD THE LD. COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE DECISION OF THE HONBLE MUMBAI HIGH COURT IN TH E CASE OF KANSAI NEROLAC PAINTS LTD. 364 ITR 634(BOM) WHEREIN THE HONBLE BOMBAY HI GH COURT HELD THAT THE TRIBUNAL WAS NOT PREVENTED IN ANY MANNER AND IN LAW FROM CONSIDERING PURELY LEGAL ISSUE FOR THE FIRST TIME ESPECIALLY WHEN THIS LEGAL ISSUE WENT TO THE ROOT OF THE MATTER. THE HONBLE COURT HELD THAT THE TRIBUNAL IN SUCH A SITUATION SHOULD ANSWER THE ISSUE AND OUGHT NOT TO REMAND THE ISSUE TO THE AO. THE LD . COUNSEL FURTHER DREW OUR ATTENTION TO THE DECISION OF THE HONBLE ITAT AHMED EBAD A BENCH IN THE CASE OF ACIT VS GHCL LIMITED VIDE ITA NOS.830 & 2508/AHD/20 08 ORDER DATED 30.09.2015 WHEREIN IDENTICAL QUESTION WHETHER FOREIGN EXCHANGE FLUCTUATION GAIN ON FOREIGN CURRENCY LOAN AVAILED FOR PURCHASE OF INDIGENOUS MA CHINERY HAD TO BE EXCLUDED FROM THE TOTAL INCOME AS CAPITAL RECEIPT NOT CHARGEABLE TO TAX, HAD COME UP FOR CONSIDERATION 6 ITA NO.352/KOL/2011 & ITA NO.589/KOL/2011-ESSEL MIN ING & INDS.LTD A.Y.2007-08 THE QUESTION BEFORE THE HONBLE AHMEDABAD BENCH ALS O DEALT WITH THE QUESTION REGARDING THE APPLICABILITY OF THE PROVISIONS OF S ECTION 43A OF THE ACT, WHERE THE FOREIGN EXCHANGE FLUCTUATION GAIN WAS ON FOREIGN CU RRENCY LOAN BORROWED TO ACQUIRE INDIGENOUS PLANT AND MACHINERY. THE AO IN THAT CASE REDUCED THE VALUE OF PLANT OF MACHINERY BY THE FOREIGN EXCHANGE FLUCTUATION GAIN AND ALLOWED DEPRECIATION ON THE REMAINDER. THIS ACTION WAS IN QUESTION BEFORE THE HONBLE TRIBUNAL. THE HONBLE TRIBUNAL HELD AS FOLLOWS :- 12. SO FAR AS THIS GROUND OF APPEAL IS CONCERNED, SOME MATERIAL FACTS WILL HAVE TO BE TAKEN NOTE OF. DURING THE COURSE OF ASSESSMENT PROC EEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS EARNED FOREIGN EXCHANGE FLUCT UATION GAIN OF RS.1,79,20,653/- ONFOREIGN EXCHANGE LOAN BORROWED TO ACQUIRE INDIGE NOUS PLANT AND MACHINERY BUT HAS NOT REDUCED THE SAME FROM WRITTEN DOWN VALUE OF THE PLANT AND MACHINERY, AS,ACCORDING TO THE ASSESSING OFFICER, WAS THE REQU IREMENT OF SECTION 43A OF THE INCOME TAX ACT. IT WAS IN THIS BACKGROUND THAT THE ASSESSI NG OFFICER DISALLOWED DEPRECIATION, BEING 25% AS APPLICABLE ON THE RELATED PLANT AND MA CHINERY, IN RESPECT OF THIS AMOUNT OFRS.1,79,20,653/-. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO DELETED THIS DISALLOWANCE BY OBSERVING A S FOLLOWS :- I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE A ND THE DECISIONS CITED BY THE LD. A.R. AND THE OBSERVATIONS OF THE A.O. IN TH E ASSESSMENT ORDER. THE APPELLANT HAS AVAILED FOREIGN CURRENCY LOAN FROM ID BI AND EXPORT IMPORT BANK OF INDIA FOR ACQUISITION OF INDIGENOUS PLANT A ND MACHINERY. THE APPELLANT HAS RECEIVED EXCHANGE FLUCTUATION GAIN OF RS.1,79,20,653/- DURING THE RELEVANT YEAR. RELYING ON THE DECISION OF S.C. IN SUTLEJ COTTON MILLS LTD. CITED SUPRA, AS THE GAIN WAS IN RESPECT OF A CAPITA L ASSET IT IS CONSIDERED AS A CAPITAL RECEIPT. AS THE LOAN WAS USED FOR ACQUISITI ON OF CAPITAL ASSET, THE SAID TRANSACTION WAS CLEARLY ON CAPITAL ACCOUNT. IT BEIN G A CAPITAL RECEIPT IT IS NOT TAXABLE. THE ASSESSING OFFICER HAS NOT OBJECTED TO THE TREATMENT OF THE EXCHANGE FLUCTUATION GAIN AS A CAPITAL RECEIPT, BUT HE HAS REDACTED THE EXCHANGE FLUCTUATION GAIN FROM THE COST OF FIXED AS SET AND REDUCED THE DEPRECIATION CLAIM APPLYING PROVISIONS OF SEC. 43A OF THE I.T. ACT. AS PLANT AND MACHINERY WAS NOT PURCHASED FROM A COUNTRY OUTS IDE INDIA, THE LD. A.R. HAS STRONGLY CONTENDED THAT PROVISIONS OF SEC. 43A ARE NOT APPLICABLE IN THE CASE OF THE APPELLANT. THE ACT IS SILENT AS TO HOW THE ADJUSTMENTS WILL HAVE TO BE DONE WHEN ASSET IS BROUGHT FROM INDIA, AS THERE IS NO PROVISION SIMILAR TO PROVISION OF SEC. 43A. ONCE THE ASSET IS PURCHASED AND ACTUAL COST IS DETERMINED, ANY SUBSEQUENT CHANGE IN VALUE OF LOAN CANNOT ALTER THE COST OF ASSET AS HELD BY HONBLE SUPREME COURT IN CASE OF C IT V. TATA IRON AND STEEL CO. LTD. (1998) 231 ITR 285, WHEREIN IT WAS HELD TH AT AT THE TIME OF REPAYMENT OF LOAN, WHEN THERE WAS A FLUCTUATION IN THE RATE O F FOREIGN EXCHANGE AS A RESULT OF WHICH, THE ASSESSEE HAD TO REPAY A MUCH L ESSER AMOUNT THAN HE WOULD HAVE OTHERWISE PAID, THIS WAS NOT A FACTOR, WHICH C OULD ALTER THE COST INCURRED BY THE ASSESSEE FOR PURCHASE OF THE ASSET. THE ASSE SSEE MIGHT HAVE RAISED THE FUNDS TO PURCHASE THE ASSET BY BORROWING BUT WHAT T HE ASSESSEE HAD PAID FOR IT WAS THE PRICE OF THE ASSET. THE MANNER OR MODE OF R EPAYMENT OF THE LOAN HAD 7 ITA NO.352/KOL/2011 & ITA NO.589/KOL/2011-ESSEL MIN ING & INDS.LTD A.Y.2007-08 NOTHING TO DO WITH THE COST OF AN ASSET ACQUIRED BY THE ASSESSEE FOR THE PURCHASE OF HIS BUSINESS. OF COURSE THE DECISION OF SC IN TISCO 231 ITR 285 (SC) IS SUBJECT TO PROVISIONS OF SEC. 43A. BUT WHEN THE ASSET IS PURCHASED FROM INDIA AND NOT FROM ABROAD, THE PROVISIONS OF SECTIO N 43A CANNOT BE APPLIED. IT CANNOT BE ALSO SAID THAT PART OF COST IS MET BY SOM EBODY ELSE, SO COST SHALL BE REDUCED AS PER SECTION 43(1) AS AT THE TIME OF PURC HASE OF ASSET THE COST WAS THE LOAN AMOUNT. THOUGH THE APPELLANT HAS REDUCED T HE COST OF CAPITAL ASSET IN BOOKS OF ACCOUNTS, COURTS HAVE HELD THAT ACCOUNTING TREATMENT BY ASSESSEE WILL NOT DETERMINE TAX TREATMENT OF ANY RECEIPT OR EXPEN DITURE. FOR THIS THE LD. A.R. HAS RELIED ON THE DECISIONS IN THE CASE OF TUTICORI N ALKALI CHEMICALS & FERTILIZERS LIMITED 227 ITR 172 (SC), DCIT V. CORE HEALTHCARE LTD. (251 ITR 61) (GUJ.). THOUGH SEC. 43(1) HAS 12 EXPLANATIONS, THE SECTION DOES NOT SPECIFY A CASE LIKE THAT OF THE APPELLANT I.E. CASE OF GAIN ON FOREIGN CURRENCY LOAN ACQUIRED FOR PURCHASE OF INDIGENOUS ASSETS. PR OVISIONS OF SEC. 41(1)WILL NOT APPLY AS CONTENDED BY THE A.R. AS NO DEDUCTION HAS BEEN ALLOWED TO THE APPELLANT IN EARLIER YEARS. THE FOREIGN EXCHANGE FLUCTUATION GAIN IN THE CASE OF THE APPELLANT IS DEFINITELY A CAPITAL RECEIPT AS IT WAS UTILISED FOR PURCHASE OF ASSET AND FURTHER IT CANNOT BE REDUCED FROM THE COS T OF FIXED ASSETS FOR COMPUTATION OF DEPRECIATION AS THE PROVISIONS OF SE CTION 43A ARE NOT APPLICABLE AS THE ASSETS HAVE BEEN PURCHASED FROM I NDIA AND NOT ABROAD. ACCORDINGLY THE A.O. IS DIRECTED NOT TO REDUCE THE COST OF FIXED ASSETS FOR DEPRECIATION PURPOSE. THIS GROUND IS THUS ALLOWED. 13. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE AP PLICABLE LEGAL POSITION. 14. AS LEARNED CIT(A) HAS RIGHTLY HELD, THE PROVISI ONS OF SECTION 43A OF THE ACT COME INTO PLAY ONLY WHEN THE ASSET IN QUESTION IS ACQUIR ED FROM OUTSIDE INDIA WHEREAS, AS IS THE UNDISPUTED POSITION ON THE FACTS OF THIS CASE, THE RELATED PLANT AND MACHINERY WAS INDIGENOUS. THERE IS A CATEGORICAL FINDING TO THA T EFFECT BY THE ASSESSING OFFICER HIMSELF. AS SUCH, THE PROVISIONS OF SECTION 43A OF THE ACT DO NOT COME INTO PLAY AT ALL. LEARNED DEPARTMENTAL REPRESENTATIVE COULD NOT POINT OUT ANY OTHER STATUTORY PROVISION UNDER WHICH IMPUGNED ADJUSTMENT COULD HAVE BEEN MAD E. IN VIEW OF THESE DISCUSSIONS, WE SEE NO REASONS TO DISTURB THE RELIEF GRANTED BY THE LD. CIT(A). WE APPROVE THE SAME AND DECLINE TO INTERFERE IN THE MATTER. 12. IN THE LIGHT OF THE AFORESAID DECISION THE LD . COUNSEL PRAYED THAT THE CLAIM AS MADE BY THE ASSESSEE IN GROUND NOS. 2 AND 3 SHOULD BE ALLOWED. THE LD. DR PLACED RELIANCE ON THE ORDER OF CIT(A). 13. WE HAVE GIVEN A VERY CAREFUL CONSIDERATION T O THE RIVAL SUBMISSIONS. THE FOREIGN EXCHANGE FLUCTUATION GAIN TO THE EXTENT IT RELATES TO FOREIGN CURRENCY LOANS UTILISED FOR PURCHASE OF INDIGENOUS PLANT AND MACHINERY IN THE A SSESSEES WIND POWER UNITS DID NOT ATTRACT THE PROVISION OF SECTION 43A OF THE ACT . SECTION 43A OF THE ACT ONLY MAKES A REFERENCE TO ACQUISITION OF ASSET FROM A COUNTRY OUTSIDE INDIA AND IN CONSEQUENCE OF 8 ITA NO.352/KOL/2011 & ITA NO.589/KOL/2011-ESSEL MIN ING & INDS.LTD A.Y.2007-08 THE CHANGE IN THE RATE OF EXCHANGE AFTER THE ACQUIS ITION THERE IS AN INCREASE OF REDUCTION IN THE LIABILITY OF THE ASSESSEE AS EXPRE SSED IN INDIAN CURRENCY AT THE TIME OF MAKING PAYMENT AND COMPARED TO THE LIABILITY EXISTI NG AT THE TIME OF ACQUISITION OF THE ASSET. THE SECTION IS NOT ATTRACTED WHERE THE A SSET IS NOT ACQUIRED FROM A COUNTRY OUTSIDE INDIA. THIS ASPECT HAS BEEN CONSIDERED AND ACCEPTED BY THE HONBLE AHMEDABAD BENCH IN THE DECISION REFERRED TO BY THE LD. COUNSEL FOR THE ASSESSEE. BESIDES THE ABOVE AS IS CLEAR FROM THE CHART GIVEN IN THE EARLIER PART OF THE ORDER SUCH GAIN OR LOSS HAS BEEN CONSISTENTLY NEITHER OFFERED TO TAX NOR CLAIMED AS DEDUCTION BY THE ASSESSEE WHILE COMPUTING THE TOTAL INCOME. IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES STATED ABOVE, WE ARE OF THE VIEW THAT THE CLAIM MADE BY THE ASSESSEE DESERVES TO BE ACCEPTED. GROUND NOS. 2 AND 3 RAISED BY THE ASSESSEE ARE ALLOWED. AO IS DIRECTED TO EXCLUDE THE FOREIGN EXCHANGE FLUCTUA TION GAIN TO THE EXTENT OF RS.5,79,10,209/- FROM THE TOTAL INCOME OF THE ASSES SEE AS IT IS A CAPITAL RECEIPT NOT CHARGEABLE TO TAX. 14. GROUND NOS. 4 AND 5 RAISED BY THE ASSESSEE R EAD AS FOLLOWS :- 4. THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) W AS WRONG IN NOT ADMITTING THE APPELLANT'S ADDITIONAL GROUND OF APPEAL RELATING TO THE DEDUCTION OF THE DEMAND OF RS.1 00, 14,22,200/- RAISED BY THE RAILWAY AUTHORITIES T OWARDS WHARFAGE/STACKING CHARGES. 5. THAT WITHOUT PREJUDICE TO THE CONTENTION RAISED IN GROUND NO.4 ABOVE, THE COMMISSIONER OF INCOME-TAX (APPEALS) FAILED TO APPR ECIATE THAT THE DEMAND RAISED BY THE RAILWAYS WAS REQUIRED TO BE CONSIDERED FOR ALLO WING DEDUCTION ON MERCANTILE BASIS AND THUS HE ERRED IN NOT ADMITTING THE ADDITIONAL G ROUND OF APPEAL RAISED BY THE APPELLANT. 15. AT THE TIME OF HEARING OF THE APPEAL IT WAS NOTICED THAT THE CLAIM AS CONTAINED IN GROUND NO.4 WAS NOT MADE BY THE ASSESSEE BEFORE THE AO. THIS CLAIM WAS MADE BY HIM IN THE FORM OF ADDITIONAL GROUNDS OF APPEAL BEF ORE CIT(A). THE SAME WAS NOT ADMITTED BY THE CIT(A) FOR ADJUDICATION FOR THE REA SON THAT THE AFORESAID CLAIM WAS NOT THE SUBJECT MATTER OF THE ASSESSMENT ORDER AGAI NST WHICH THE ASSESSEE HAS FILED ITS APPEAL. 16. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE FACTS WHICH WERE NECESSARY FOR ADJUDICATING THE ISSUE RAISED IN GROUND NO.4 AR E NOT AVAILABLE ON RECORD EITHER BEFORE AO OR CIT(A) AND IN THESE CIRCUMSTANCES THE PRINCIPLE LAID DOWN BY THE 9 ITA NO.352/KOL/2011 & ITA NO.589/KOL/2011-ESSEL MIN ING & INDS.LTD A.Y.2007-08 HONBLE SUPREME COURT IN THE CASE OF JUTE CORPORATI ON OF INDIA AS WELL AS NTPC (SUPRA) CANNOT BE APPLIED AND THE CLAIM OF THE ASSE SSEE CANNOT BE ENTERTAINED BY THE FIRST APPELLATE AUTHORITY. TAKING INTO CONSIDERATIO N THE ABOVE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE, WE DISMISS GROUND NOS. 4 AND 5 RAISED BY THE ASSESSEE. 17. IN THE RESULT THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. ITA NO.589/KOL/2011 (REVENUES APPEAL) 18. GROUND NO.1 RAISED BY THE REVENUE READS AS F OLLOWS :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , LD. CIT(A)-VI, KOLKATA HAS ERRED IN LAW AS WELL AS ON FACTS OF THE CASE BY DELETING THE DISALLOWANCE OF 'NET PRESENT VALUE' (NPV) OF~7,11,50,400/-, ALTHOUGH IT IS CAPITAL IN N ATURE AND HENCE CANNOT BE ALLOWED U/S.37(1) OF THE LT. ACT, 1961, MORE SO AS THE HON' BLE SUPREME COURT HAS HELD THAT THE COMPENSATION PAID BY THE MINE OWNERS TO THE FOREST DEPARTMENT FOR USE OF FOREST LAND FOR MINING ARE THE FEES / COMPENSATION FOR EARLIER YEARS DURING WHICH THEY HAVE TAKEN OUT 'ORES' FROM 'MOTHER EARTH. 19. IN THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOTICED THAT THE ASSESSEE HAD CLAIMED DEDUCTION OF A SUM OF RS.7,11,50,400/- TOW ARDS NET PRESENT VALUE OF BROKEN AREA (NPV). THE NATURE OF THIS PAYMENT WAS THAT THE ASSESSEE, AS WE HAVE ALREADY SEEN, IS ENGAGED IN THE BUSINESS OF MINING OF ORE. THE ASSESSEE FOR CONTINUATION OF MINING ON FOREST AREAS/LAND HAD BEEN REQUIRED TO PA Y RS.7,11,50,400/- TOWARDS NET PRESENT VALUE OF BROKEN AREA(NPV). THE SAID PAYMENT HAD BEEN MADE TO THE DIVISIONAL FOREST OFFICER IN PURSUANCE OF THE FORES T (CONSERVATION) ACT, 1980 AND AS PER DEMAND NOTICE DATED 24.11.05 FROM THE DIVISIONA L FOREST OFFICER AND AS PER ORDER DATED 14-16.02.2005 ISSUED BY MINISTRY OF ENV IRONMENT & FORESTS (F. C. DIVISION), GOVERNMENT OF INDIA. FOR THE PURPOSES OF OBTAINING TEMPORARY WORKING PERMISSION FOR MINING THE ABOVE-MENTIONED PAYMENT W AS A PRE-CONDITION. AS PER .THE SUPREME COURT ORDER IN WRIT PETITION (CIVIL) NO. 20 2 OF 1995, NPV WAS TO BE DEPOSITED BY THE USER AGENCY WITH THE STATE FOREST DEPARTMENT AND THE STATE FOREST DEPARTMENT WAS TO MAINTAIN A FUND IN ACCORDANCE WIT H THE GUIDELINES ISSUED UNDER THE FOREST (CONSERVATION) ACT, 1980. ACCORDING TO T HE ASSESSEE, THE PAYMENT OF NPV WAS AN ESSENTIAL PAYMENT REQUIRED TO BE MADE BY THE ASSESSEE FOR CONTINUING ITS EXISTING MINING OPERATION IN KEONJHOR DIVISION OF O RISSA. THE NON-PAYMENT OF NPV WOULD HAVE RESULTED IN ADVERSE CONSEQUENCES INCLUDI NG THE STOPPAGE OF DAY TO DAY 10 ITA NO.352/KOL/2011 & ITA NO.589/KOL/2011-ESSEL MIN ING & INDS.LTD A.Y.2007-08 MINING OPERATIONS AND THUS FOR THE PURPOSE OF CARRY ING ON ITS MINING BUSINESS THE ASSESSEE WAS COMPULSORILY REQUIRED TO INCUR THE EXP ENDITURE TOWARDS PAYMENT OF NPV. 20. THE NPV REPRESENTED A LEVY TOWARDS COMPENSATION FOR DIVERSION OF THE FOREST LAND INTO MINING ACTIVITIES AND THE LAND IN RESPECT OF WHICH THE PAYMENT WAS MADE, WAS OWNED BY THE FOREST DEPARTMENT. BY MAKING THE P AYMENT OF NVP, NO TANGIBLE ASSET CAME INTO EXISTENCE. THE ASSESSEE ALSO SUBM ITTED THAT THE PAYMENT OF NPV WAS NOT A VOLUNTARY PAYMENT AND IT WAS A PAYMENT ON TH E BASIS OF THE DIRECTION GIVEN BY THE DIVISIONAL FOREST OFFICER, KEONJHOR WORKING UND ER THE MINISTRY OF ENVIRONMENT AND FOREST, GOVERNMENT OF INDIA. IT WAS FURTHER SUB MITTED BY THE ASSESSEE THAT WHENEVER AN UNDERTAKING WAS UNDER AN OBLIGATION TO MAKE CERTAIN PAYMENTS AS PER THE DIRECTIONS OF THE GOVERNMENT, THE CONCERNED UNDERTA KING WOULD BE COMPULSORILY REQUIRED TO MAKE SUCH PAYMENT IN ITS OWN BUSINESS I NTEREST AND, ACCORDINGLY, THE ASSESSEE HAD TO FOLLOW THE SAME. THE ASSESSEE FURTH ER CLARIFIED THAT THE PAYMENT OF NPV BEING A STATUTORY REQUIREMENT WHICH HAD TO BE C OMPLIED WITH BY THE ASSESSEE WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF CARRYING ON OF ITS BUSINESS, THE INCURRING OF SUCH EXPENDITURE SHOULD BE CONSIDERED AS HAVING DIR ECT NEXUS WITH THE BUSINESS ACTIVITIES OF THE ASSESSEE. THE ASSESSEE THUS SUBM ITTED THAT BEFORE THE AO THAT THE PAYMENT OF NPV SHOULD BE CONSIDERED AS AN ALLOWABLE REVENUE EXPENDITURE. 21. THE AO WAS HOWEVER OF THE VIEW THAT THE PAYMENT IN QUESTION WAS A ONETIME PAYMENT. HE HELD THAT IN VARIOUS JUDICIAL PRONOUNCE MENTS GENERAL PRINCIPLE TO DECIDE WHEN EXPENDITURE CAN BE CONSIDERED AS CAPITAL OR RE VENUE HAVE BEEN LAID DOWN. THREE MAJOR CONDITIONS SO LAID DOWN WAS TO SEE AS TO WHET HER (A) THE BENEFIT OF THE EXPENDITURE INCURRED IS FOR SEVERAL YEARS OR FOR O NE YEAR; (B) WHETHER THE EXPENDITURE IS NONRECURRING OUTLAY OR RECURRING OUTLAY; (C) WHE THER IT IS LUMP SUM PAYMENT OR PERIODIC PAYMENT. ACCORDING TO THE AO THE EXPENDITU RE IN QUESTION SATISFIED ALL THE CONDITIONS FOR BEING TREATED AS A CAPITAL EXPENDITU RE. HE THEREFORE DISALLOWED THE CLAIM OF ASSESSEE FOR DEDUCTION FOR THE AFORESAID S UM AS REVENUE EXPENDITURE. 11 ITA NO.352/KOL/2011 & ITA NO.589/KOL/2011-ESSEL MIN ING & INDS.LTD A.Y.2007-08 22. ON APPEAL BY THE ASSESSEE CIT(A) HELD THAT THE EXPENDITURE WAS REVENUE EXPENDITURE AND HAD TO BE ALLOWED AS DEDUCTION. 23. AGGRIEVED BY THE ORDER OF CIT(A) THE REVENUE H AS PREFERRED THE PRESENT GROUND OF APPEAL BEFORE THE TRIBUNAL. 24. AT THE TIME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE BROUGHT TO OUR NOTICE A DECISION OF THE HONBLE ITAT, KOLKATA BENCH IN TH E CASE OF ACIT VS M/S. GHANASHYAM MISHRA IN ITA NO.122/KOL/2009 AND ITA NO .1521/KOL/2009 FOR A.Y.2005-06 AND 2006-07 ORDER DATED 27.01.2014 WHER EIN IN RESPECT OF AN IDENTICAL PAYMENT MADE BY AN ASSESSEE ENGAGED IN THE BUSINESS OF MINING THIS TRIBUNAL HAD ALLOWED THE DEDUCTION HOLDING THAT THE SAME AS REVE NUE EXPENDITURE. THE FOLLOWING WERE THE OBSERVATIONS OF THE TRIBUNAL. THE QUESTION THAT WAS CONSIDERED BY THE TRIBUNAL IN THE AFORESAID DECISION WAS AS FOLLOWS : - ITA NO.122/KOL/09 1) THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAD ERRED IN LAW AS WELL ON FACTS BY NOT CONSIDERING THAT NET PRESENT VALUE IS A COMPENSATION, PAID BY THE ASSESSEE TO THE FOREST DEPTT., FOR UTILIZATION OF F OREST LAND FOR NON-FOREST PURPOSE. HONBLE SUPREME COURT HAS CATEGORIZED SUCH PAYMENTS AS FEES TO BE PAID BY THE MINE OWNERS TO THE FOREST DEPTT., QUANTIFIED ON THE BASI S OF THE PERIOD FOR WHICH THE MINE OWNERS TAKING OUT DIFFERENT ORES, FROM THE MOTHER E ARTH. THEREFORE THE NV IS DIRECTLY LINKED TO THE EARLIER PREVIOUS YEARS WHICH IS NOT A LLOWABLE AS THE BUSINESS EXPENDITURE OF THE CURRENT FINANCIAL YEAR U/S.37(1). ITA NO.1521/KOL/2009 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN CONCLUDING(VIDE HIS ORDER, PAGE-14) THAT THE ASSESSEE DID NOT GET ANY FRESH RIGHT TO MINING BY MAKING PAYMENT OF RS.1,45,00,000 /-. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN NOT CONSIDERING THE ORDER OF THE MIN ISTRY OF ENVIRONMENT & FORESTS (F.C. DIVISION), DATED 10.12.2005, CIRCULATED VIDE F.NO.8 -41/2003-FC, BY VIRTUE OF WHICH THE ASSESSEE GOT RIGHT OF MINING OVER AN ADDITIONAL 25 HECTOR OF BROKEN UP FOREST AREA., 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN NOT CONSIDERING THE FACT THAT THE AS SESSEE PAID RS.1,45,00,000/- FOR GETTING THE RIGHT OF MINING OVER AN ADDITIONAL 25 HECTOR OF BROKEN UP FOREST AREA, WHICH IS EVIDENT FROM THE LETTER OF THE DFO, RAIRANGPUR DIVI SION VIDE MEMO NO.5114 DATED 28.11.2005 AND ADDRESSED TO THE CH. CONSERVATOR OF FOREST, BHUBANESWAR, ORISSA. 12 ITA NO.352/KOL/2011 & ITA NO.589/KOL/2011-ESSEL MIN ING & INDS.LTD A.Y.2007-08 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN NOT CONSIDERING THE FACT THAT EXPENS ES MADE TO ACQUIRE ANY RIGHT OF BUSINESS IS A CAPITAL EXPENDITURE AND HENCE, NOT AL LOWABLE. 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN APPLYING THE RATIO OF THE CASE OF BI KANER GYPSUMS LTD.[(1991) 187 ITR 39, 49 (SC)] IN THE CASE OF THE ASSESSEE, WHICH IS NOT AT ALL APPLICABLE. IN THAT CASE THE EXPENSE OF SHIFTING OF RAILWAY TRACK WAS INCURRED B Y THE ASSESSEE FOR THE SMOOTH OPERATION OF THEIR BUSINESS. 24.1. THE TRIBUNAL ON THE ABOVE ISSUE HELD AS FOLLO WS :- 4. LD. COUNSEL FOR THE ASSESSEE FURTHER STATED THAT ISSUE IS COVERED IN FAVOUR OF ASSESSEE BY THE TRIBUNALS DECISION OF CO-ORDINATE BENCH IN THE CASE OF ACIT V. RUNGTA SONS (P) LTD. IN ITA NO.933/KOL/2009 DATED 05-08-2011, WHEREIN THE ISSUE IS DISCUSSED IN PARA-12 TO 15 AS UNDER:- 12, THE QUESTION BEFORE US IS AS TO WHETHER THE PA YMENT BEING NPV MADE BY THE ASSESSEE FOR OBTAINING FOREST CLEARANCE FOR MIN ING ON THE FOREST AREA / LAND UNDER THE FOREST (CONSERVATION) ACT, 1980 IS ALLOWA BLE AS REV EXPENDITURE OR NOT. IT IS RELEVANT TO STATE THAT HONBLE APEX COUR T IN THE CASE OF T.N. GODAVARAM THIRUMALPAD (SUPRA) HAS OBSERVED THAT FOR ESTS ARE VITAL COMPONENTS TO SUSTAIN LIFE SUPPORT SYSTEM ON THE EA RTH. THEREFORE, THEE IS AN ABSOLUTE NEED TO TAKE ALL PRECAUTIONARY MEASURES WH EN FOREST LANDS ARE SOUGHT TO BE DIRECTED FOR NON-FOREST USE. HONBLE APEX COU RT STATED THAT WHEN FOREST LAND IS USED / DIVERTED FOR NON-FOREST PURPOSES AND THERE IS CONSEQUENTIAL LOSS OF BENEFITS ACCRUING FROM THE FORESTS, THE USER AGE NCY OF SUCH LAND BE REQUIRED TO COMPENSATE FOR THE DIVERSION. HONBLE APEX COURT OBSERVED THAT THE USER AGENCY BE REQUIRED TO MAKE PAYMENT OF NET PRESENT V ALUE (NPV) OF SUCH DIVERTED LAND SO AS TO UTILIZE THE AMOUNTS SO RECEI VED FOR GETTING BACK IN LONG RUN THE BENEFITS WHICH ARE LOST BY SUCH DIVERSION. HONBLE APEX COURT VIDE ITS GUIDELINES FOR DETERMINATION OF NPV DIRECTED THE MI NISTRY OF ENVIRONMENT AND FORESTS TO FORMULATE A SCHEME PROVIDING THAT WHENEV ER ANY PERMISSION IS GRANTED FOR CHANGE OF USE OF FOREST LAND FOR NON-FO REST PURPOSES, AND ONE OF THE CONDITIONS OF THE PERMISSION SHOULD BE THAT THE RE SHOULD BE COMPENSATORY AFFORESTATION, THEN THE RESPONSIBILITY OF THE SAME SHOULD BE THAT OF USER AGENCY. HONBLE APEX COURT OBSERVED THAT THE MONEY SO RECEI VED TOWARDS NPV SHOULD BE USED FOR NATURAL ASSISTED RE-GENERATION, FOREST MANAGEMENT, PROTECTION, INFRASTRUCTURE DEVELOPMENT, WILDLIFE PROTECTION AND MANAGEMENT, SUPPLY OF WOOD AND OTHER FOREST PRODUCE SAVING DEVICES AND OT HER ALLIED ACTIVITIES. IN THE CONTEXT, HONBLE APEX COURT OBSERVED THAT NPV W ILL NOT FALL UNDER ARTICLE 110 OR 199 OR 195 OF THE CONSTITUTION. IT WAS OBSER VED THAT SUCH PAYMENTS WERE LEVIED FOR RENDERING SERVICE WHICH THE STATE C ONSIDERS BENEFICIAL IN PUBLIC 13 ITA NO.352/KOL/2011 & ITA NO.589/KOL/2011-ESSEL MIN ING & INDS.LTD A.Y.2007-08 INTEREST. IT IS A FEE WHICH FALLS IN ENTRIES 47 OF LIST-III OF 7 TH SCHEDULE OF THE CONSTITUTION. THE FUND SET UP IS A PART OF ECONOMIC AND SOCIAL PLANNING WHICH COMES WITHIN ENTRY 23 OF LIST III AND THE CHARGE WH ICH IS LEVIED FOR THAT PURPOSE WOULD COME UNDER ENTRY 47 OF LIST III. IN T HAT CONTEXT, IT WAS HELD BY THEIR LORDSHIPS THAT LEVY OF NPV IS A FEE THAT MEAN S EVERY MINING AGENCY USING AND CONVERTING FOREST LAND TO NON-FOREST PURP OSE HAS TO PAY A FEE FOR CONTINUING CARRYING ON OF THE BUSINESS. WE AGREE WI TH LD. AR THAT NON- PAYMENT OF THIS NPV COULD LEAD TO CONSEQUENCES, INT ER ALIA, TO THE STOPPAGE OF THE BUSINESS. THE HONBLE APEX COURT HA HELD IN THE CASE OF BIKANER GYPSUMS LTD.-VS.- CIT (SUPRA) AT PAGE 49 AS UNDER:- WHERE THE ASSESSEE HAS AN EXISTING RIGHT TO CARRY ON A BUSINESS, ANY EXPENDITURE MADE BY IT DURING COURSE OF BUSINESS FO R THE PURPOSE OF REMOVAL OF ANY RESTRICTION OR OBSTRUCTION OR DISABI LITY WOULD BE ON REVENUE ACCOUNT, PROVIDED THE EXPENDITURE DOES NOT ACQUIRE ANY CAPITAL ASSET. PAYMENTS MADE FOR REMOVAL OF RESTRIC TION, OBSTRUCTION OR DISABILITY MAY RESULT IN ACQUIRING BENEFITS TO THE BUSINESS BUT THAT BY ITSELF WOULD NOT ACQUIRE ANY CAPITAL ASSET. 13. WE OBSERVE THAT BY MAKING THIS PAYMENT OF NPV, NO TANGIBLE ASSET COME INTO EXISTENCE. FURTHER THE SAID PAYMENT IS A PRE-C ONDITION TO ENABLE THE ASSESSEE TO CARRY ON ITS MINING ACTIVITIES AND AS S UCH IT IS NOT A VOLUNTARY ONE THAT PAYMENT WAS MADE ON THE BASIS OF DIRECTION GIV EN BY THE DIVISIONAL FOREST OFFICER WORKING IN THE MINISTRY OF ENVIRONME NT AND FORESTS, GOVERNMENT OF INDIA. SINCE THE SAID PAYMENT OF NPV BEING A STATUTORY REQUIREMENT AND HAS TO BE PAID BY THE ASSESSEE TO C ONTINUE TO CARRY ON ITS MINING ACTIVITIES, WE ARE OF THE CONSIDERED VIEW TH AT THE SAID PAYMENT IS WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF CARRYING ON ITS BUSINESS. HENCE, INCURRING OF SUCH EXPENSES SHOULD BE CONSIDERED AS HAVING DIRECT NEXUS WITH THE BUSINESS ACTIVITIES OF THE ASSESSEE. BY MAKING THIS PAYMENT OF NPV, THE ASSESSEE HAS NOT GOT ANY FRESH RIGHT TO MINING, BUT THE SAID PAYMENT HAS BEEN MADE TO OVERCOME ANY RESTRICTION OR OBSTRUCTION OR DISABILITY THAT HAS ARISEN IN CONTINUING OF MINING BUSINESS. WE ARE OF THE CON SIDERED VIEW THAT SINCE IT IS A ONE-TIME PAYMENT, IT COULD NOT BE CONSIDERED AS C APITAL IN NATURE. HONBLE APEX COURT HAS HELD IN EMPIRE JU9TE COMPANY LTD. V S-CIT [ 124 ITR 1 ] THAT THERE MAY BE CASES WHERE EXPENDITURE, EVEN IF INCUR RED FOR OBTAINING AN ADVANTAGE OF ANY ENDURING BENEFIT, MAY, NONETHELESS , BE ON REVENUE ACCOUNT AND THE TEST OF ENDURING BENEFIT MAY BREAK DOWN. HO NBLE APEX COURT OBSERVED THAT IF THE ADVANTAGE CONSISTED OF MERELY IN FACILITATING THE CONCERNED ASSESSEES TRADING OPERATIONS OR ENABLING THE MANAGEMENT AND CONDUCT OF THE ASSESSEES BUSINESS TO BE CARRIED ON MORE EFFICIENTLY OR MORE PROFITABLY WHILE LEAVING THE FIXED CAPITAL UNTOUCHE D, EXPENDITURE WOULD BE ON 14 ITA NO.352/KOL/2011 & ITA NO.589/KOL/2011-ESSEL MIN ING & INDS.LTD A.Y.2007-08 REVENUE ACCOUNT, EVEN THOUGH THE ADVANTAGE MAY BE E NDURED FOR AN INDEFINITE FUTURE. 14. WE OBSERVE THAT IN THE CASE BEFORE US, ASSESSEE HAS GOT RIGHT TO CARRY ON MINING OPERATIONS IN 1982 AND 1985, I.E. LONG TIME AGO BEFORE THE ASSESSEE WAS ASKED TO PAY NPV AS PER DIRECTION OF HONBLE HI GH COURT AND CONSEQUENTLY ASSESSEE WAS COMPELLED TO MAKE THE PAY MENT TO FACILITATE TO CONTINUE ITS MINING BUSINESS. THEREFORE, THE ABOVE DECISION OF HONBLE APEX COURT IN THE CASE OF BIKANER GYPSUMS LIMITED (SUPRA ) SQUARELY APPLIES TO THE CASE OF ASSESSEE AND IT COULD NOT BE CAPITAL IN NAT URE. 14.1 A SIMILAR ISSUE ALSO CAME BEFORE HONBLE KARNA TAKA BENCH OF ITAT IN THE CASE OF NATIONAL ALUMINIUM CO. LTD.-VS.-DCIT [ 101 TTJ (CTK) 949 ]. IN THE SAID CASE, ASSESSEE-COMPANY DEBITED AN AMOUNT O F RS.6.20 CRORES TOWARDS CONTRIBUTION TO MINERALS EXPLORATION FUND SET UP BY GOVERNMENT OF INDIA. THE SAID PAYMENT WAS REQUIRED ON THE DIRECTION OF STATE POLLUTION CONTROL BOARD AND MINISTRY OF ENVIRONMENT AND FORESTS AS A CONDIT ION TO RENEW ASSESSEES CLEARANCE CERTIFICATE. THE FUND WAS SET UP FOR PERI PHERAL DEVELOPMENT WORKS. IT WAS HELD THAT THE SAID PAYMENT IS NOT A VOLUNTAR Y ONE AND IT IS A PAYMENT ON THE BASIS OF THE DIRECTION GIVEN BY THE GOVERNMENT OF INDIA, MINISTRY OF MINES, UNDER WHICH THE ASSESSEE-COMPANY COMES. WHEN A PAYM ENT IS MADE AS PER SPECIFIC DIRECTION OF GOVERNMENT OF INDIA, IT CANNO T BUT BE IN THE BUSINESS INTEREST OF THE ASSESSEE-COMPANY TO ABIDE BY SUCH D IRECTIONS OF THE GOVERNMENT OF INDIA. ACCORDINGLY, THIS PAYMENT IS A STATUTORY REQUIREMENT AND THE EXPENDITURE HAS BEEN CONSIDERED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND HAS GOT A DIRECT CONNECTION WITH THE BUSINESS ACTIVITY OF THE COMPANY. IT WAS HELD THAT SINCE THE ASSESSEE -COMPANY WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING AND THE PROVISIONS HAD BEEN MADE ON THE BASIS OF OFFICE ORDER, THE SAME WAS RIGHTLY ACCOUNT ED FOR IN THE CONCERNED YEA O ACCRUING OF THE LIABILITY AND IT WAS HELD THAT TH E SAME WAS ALLOWABLE AS BUSINESS EXPENDITURE UNDER SECTION 37(1) OF THE ACT . SPECIAL BENCH, ITAT, KOLKATA IN PEERLESS SECURITIES LIMITED VS- JOINT C OMMISSIONER OF INCOME TAX [ 93 TTJ 325 (SB)] HELD THAT IF THE ADVANTAGE CONSISTS OF MEREL Y IN FACILITATING THE ASSESSEES TRADING OPERATIONS OR ENABLING THE M ANAGEMENT AND CONDUCT OF ASSESSEES BUSINESS TO BE CARRIED ON MORE EFFICIENT LY OR MORE PROFITABILITY WHILE LEAVING THE FIXED CAPITAL UNTOUCHED, EXPENDIT URE WOULD BE ON REVENUE ACCOUNT, EVEN THOUGH THE ADVANTAGE MAY ENDURE FOR A N INDEFINITE FUTURE. AHMEDABAD BENCH, ITAT IN JOINT COMMISSIONER OF INCO ME TAX VS.- DEWERSON INDUSTRIES LIMITED [2005 TIOL 236 (AHD.)] HELD THAT PAYMENTS OF SIMILAR NATURE TO MINISTRY OF FOREST AND ENVIRONMEN T, GOVERNMENT OF GUJARAT WERE ALLOWABLE AS BUSINESS EXPENDITURE. ITAT, MUMBA I BENCH IN INDUSTRIAL DEVELOPMENT BANK OF INDIA VS.- DEPUTY COMMISSIONER OF INCOME TAX [ 91 ITD 34 ] HELD THAT EXPENDITURE BY ASSESSEE IN ACCORDANCE W ITH STATUTORY 15 ITA NO.352/KOL/2011 & ITA NO.589/KOL/2011-ESSEL MIN ING & INDS.LTD A.Y.2007-08 GUIDELINES IS ALLOWABLE BUSINESS EXPENDITURE. HONB LE CALCUTTA HIGH COURT IN CIT VS.- RUNGTA MINES PVT. LT. [ 205 ITR 335 ] HELD THAT WHERE A TRADER, IN HIS CAPACITY AS A TRADER, BY COMPULSION OF STATUTORY OB LIGATION, HAS TO INCUR AN EXPENDITURE AS A COMPELLING REQUISITE FOR CARRYING ON HIS TRADE, THE EXPENDITURE RESULTING IN A CAPITAL ASSET IN THE HAN DS OF A THIRD PARTY, IS TO BE TAKEN AS REVENUE EXPENDITURE BECAUSE NO ASSET ARISE S TO THE TRADER BY REASON OF SUCH EXPENDITURE. IT WAS FURTHER HELD THAT WHERE LAW IMPOSES ON THE ASSESSEE, AN OBLIGATION TO INCUR EXPENSES FOR BEING PERMITTED TO PURSUE ITS TRADING ACTIVITY, THE EXPENDITURE WOULD BE AN OUTGO ING FROM THE PROFITS OF THE TRADE. 15. IN VIEW OF THE ABOVE DECISION AND THE FACTS OF THE CASE BEFORE US, WE HOLD THAT LD. CIT(APPEALS) HAS RIGHTLY HELD THAT THE AB OVE EXPENDITURE OF RS.3,95,56,500/- PAID BY THE ASSESSEE AS NPV TO EN ABLE THE ASSESSEE TO CARRY ON ITS MINING BUSINESS IS REVENUE IN NATURE, WHICH IS ALLOWABLE AS BUSINESS EXPENDITURE UNDER SECTION 37(1) OF THE ACT. THEREFO RE, WE UPHOLD THE ORDER OF LD. CIT(APPEALS) BY REJECTING GROUND NO.1 OF THE AP PEAL TAKEN BY THE DEPARTMENT. HENCE, GROUND NO.1 IS REJECTED. SIMILARLY, THIS ISSUE IS ALSO COVERED BY THE CO-ORD INATE BENCH DECISION IN THE CASE OF ACIT V. FREEGRADE & CO. LTD. IN ITA NO. 934 /KOL/2009 DATED 05-08- 2011. 5. ON THE OTHER HAND, LD. SR-DR HAS NOT DENIED THAT THE CO-ORDINATE BENCH DECISION IS NOT APPLICABLE TO THE PRESENT FACTS OF THE CASE BUT HE RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF T.N. GODAVA RMAN THIRUMULPAD V. UNION OF INDIA AND OTHERS (2006) 1 SCC DATED 26-09-2005.ACCO RDING TO LD. SR-DR THE NPV IS CONSIDERED AS FEE. WE FIND THAT THIS ISSUE HAS BEEN CONSIDERED BY THIS CO-ORDINATE BENCH DECISION OF NPV PAID BY ASSESSEE IS HELD TO B E REVENUE EXPENDITURE, THIS LIABLE U/S 37(1) OF THE ACT. ONCE, THIS THE POSITION ISSUE IS SQUARELY COVERED IN FAVOUR OF ASSESSEE AND WE FIND NO REASON TO INTERFERE WITH TH E ORDER OF CIT(A), HENCE, BOTH THE APPEALS OF REVENUE ARE DISMISSED. 24.2. THE AFORESAID RULING WAS FOLLOWED IN ASSESSEE S OWN CASE IN ITA NO. 56/KOL/2010 FOR AY 2006-07 ORDER DATED 2.3.2016 ON IDENTICAL ISSUE. RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL, IN ASSESSEE S OWN CASE, WE UPHOLD THAT ORDER OF CIT(A) AND DISMISS GROUND NO.1 RAISED BY THE REV ENUE. 25. GROUND NO.2 RAISED BY THE REVENUE READ AS FO LLOWS :- 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , LD. CIT(A)-VJ, KOLKATA HAS ERRED IN LAW AS WELL AS ON FACTS OF THE CASE BY DELETING THE DISALLOWANCE U/S.14A OF RS.,94,14,773/- AND COMPUTING DISALLOWANCE U/S.14A AT RS.3,99,203/-, @1% OF EXEMPT INCOME I.E., RS.3,99,20,387/- WITHOUT ANY BASIS AND LOGIC, WHICH IS MORE SO AS IN THE 16 ITA NO.352/KOL/2011 & ITA NO.589/KOL/2011-ESSEL MIN ING & INDS.LTD A.Y.2007-08 CASE OF CIT VS. HERO CYCLES, NOVEMBER 4, 2009 (P&H) IT WAS HELD THAT EVEN IF THE FUNDS ARE MERGED IN COMMON KITTY, THE DISALLOWANCE U/S.L4 A IS JUSTIFIED AND IN THE CASE OF GODREJ & BOYCE MANUFACTURING CO. LTD. CERTAIN PRINC IPLES HAVE BEEN LAID DOWN TO COMPUTE DISALLOWANCE U/S.14A. 26. THE ASSESSEE EARNED DIVIDEND INCOME OF RS.3,9 9,20,387/- THE AO INVOKED THE PROVISION OF SECTION 14A WITH RULE 8DD(2)(II) AND (III) OF THE RULES AND DISALLOWED A SUM OF RS.5,94,14,773/- AS EXPENDITURE INCURRED TO EARN EXEMPT DIVIDEND INCOME. 27. ON APPEAL BY THE ASSESSEE THE CIT(A) HELD TH AT RULE 8D OF THE RULES IS NOT APPLICABLE FOR A.Y. PRIOR TO A.Y.2008-09 AS HELD BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE AND MANUFACTURING CO. LTD. VS DCIT (2010)328 ITR 81 (BOM) AND FURTHER HELD THAT IN RESPECT OF A.Y. P RIOR TO A.Y.2008-09, DISALLOWANCE U/S 14A OF THE ACT SHOULD ESTIMATED ON A REASONABLE BASIS. THE CIT(A) THEREAFTER HELD THAT NO INTEREST EXPENSES CAN BE DISALLOWED AS THE ASSESSEE HAD SUFFICIENT OWN FUNDS. WITH REFERENCE TO THE DISALLOWANCE OF OTHER EXPENSE S THE CIT(A) HELD THAT DISALLOWANCE OF 1% OF THE EXEMPT INCOME WOULD BE RE ASONABLE AND IN THIS REGARD PLACED RELIANCE ON THE DECISION OF THE HONBLE ITAT , KOLKATA BENCH. THE FOLLOWING WERE THE RELEVANT OBSERVATIONS OF THE CIT(A) IN TH IS REGARD :- IN THE ABOVE DECISION HON'BLE BOMBAY HIGH COURT HA S SAID THAT THOUGH RULE 8D WILL NOT APPLY TO ASSESSMENT YEARS PRIOR TO ASSESSMENT Y EAR 2008-09 BUT FOR EARLIER YEARS THE DISALLOWANCE U/S. 14A SHOULD BE ESTIMATED ON A REAS ONABLE BASIS. IN THE CASE OF THE ASSESSEE WE FIND THAT AS ON 31.03.2007 THE TOTAL IN VESTMENT ARE ABOUT RS.295.9 CRORE BUT AS AGAINST THIS THE SHARE CAPITAL AND RESERVES AND SURPLUS ARE ABOUT RS.1734 CRORE. THEREFORE, IT CAN BE ASSUMED THAT THE SURPLUS FUNDS OF THE ASSESSEE ON WHICH IT IS NOT REQUIRED TO PAY INTEREST ARE DEPLOYED IN THE INVEST MENTS FROM WHICH EXEMPT INCOME IS EARNED. SINCE BORROWED FUNDS PRIMA-FACIE DO NOT APP EAR TO BE INVESTED IN THE INVESTMENTS THEREFORE NO DISALLOWANCE CAN BE MADE U /S.14A OUT OF THE INTEREST EXPENSES. AS REGARDS THE ADMINISTRATIVE AND OTHER EXPENSES WH ICH CAN BE ASCRIBED TO THE EXEMPT INCOME IT IS SEEN THAT IN RECENT JUDGMENT HON'BE IT AT, KOLKATA HAS DECIDED THAT ONE PERCENT OF THE EXEMPT INCOME CAN BE TAKEN AS RELATE D TO ADMINISTRATIVE EXPENSES. THE ASSESSEE HAS ALREADY DISALLOWED ONE PERCENT OF THE DIVIDEND INCOME AMOUNTING TO RS.3,99,203/- IN ITS COMPUTATION OF INCOME. THEREFO RE, NO FURTHER DISALLOWANCE IS REQUIRED TO BE MADE U/S 14A. HENCE I DELETE THE DIS ALLOWANCE OF RS.5,94,14,773/- MADE BY THE A.O. ON THIS GROUND. AGGRIEVED BY THE ORDER OF CIT(A) REVENUE HAS PREFER RED GROUND NO.2 BEFORE THE TRIBUNAL. 17 ITA NO.352/KOL/2011 & ITA NO.589/KOL/2011-ESSEL MIN ING & INDS.LTD A.Y.2007-08 28. WE HAVE HEARD THE SUBMISSIONS OF THE LD. COU NSEL FOR THE ASSESSEE AND LD. DR. THE LD. DR RELIED ON THE ORDER OF AO WHILE THE LD. COUNSEL SUBMITTED THAT ITAT, KOLKATA BENCH HAS BEEN TAKING A CONSISTENT VIEW THA T 1% OF THE EXEMPT INCOME WOULD BE APPROPRIATE AND DISALLOWANCE OF OTHER EXPENSES P RIOR TO A.Y.2008-09 AND THIS VIEW HAS ALSO BEEN HELD BY THE DECISION OF HONBLE CALCU TTA HIGH COURT. THE FOLLOWING DECISIONS WERE REFERRED TO IN THIS REGARD : 1. HIMTAJ CONSULTANTS PVT. LTD. VS. I.T.O. (ITA NO. 721/KO1L2007- AY. 2004-05) ORDER DATED 27.04.2007. 2. CHNHS ASSOCIATION VS. ACIT(ITA NO.74/KOI/2008-AY .2004-05) ORDER DATED 19.02.2008. 3. I.T.O. VS. M/S S.P.S. SECURITIES (P) LTD. (ITA N O.123/KOI/2010- AY.2000-01 ORDER DATED 19.08.2010 HE FURTHER POINTED OUT THAT THE HONBLE CALCUTTA HI GH COURT IN THE CASE OF CIT VS. M/S.R.R.SEN & BROTHERS PVT.LTD. IN GA NO.30 19 OF 2012 IN ITA NO.243 OF 2012 DATED 4.1.2013 HELD THAT COMPUTATION OF 1% OF EXEMPT INCOME AS DISALLOWANCE U/S.14A OF THE ACT WAS PROPER. THE LEARNED DR RELI ED ON THE ORDER OF THE CIT(A) AND SUBMITTED THAT THE DISALLOWANCE IN ANY CASE HAS TO BE 1% OF THE EXEMPT INCOME. 29. WE HAVE GIVEN A VERY CAREFUL CONSIDERATION T O THE RIVAL SUBMISSIONS AND WE ARE OF THE VIEW THAT IN THE LIGHT OF THE DECISIONS REFE RRED TO BY THE LD. COUNSEL FOR THE ASSESSEE THE ORDER OF CIT(A) IS JUST AND PROPER AND CALLS FOR NO INTERFERENCE. ACCORDINGLY GROUND NO.2 RAISED BY THE REVENUE IS DI SMISSED. 30. IN THE RESULT THE APPEAL OF THE REVENUE IS DI SMISSED. 31. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED WHILE THE APPEAL OF THE REVENUE IS DISMISSED. O RDER PRONOUNCED IN THE COURT ON 20.05.2016. SD/- SD/- [M.BALAGANESH ] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 20.05.2016. [RG PS] 18 ITA NO.352/KOL/2011 & ITA NO.589/KOL/2011-ESSEL MIN ING & INDS.LTD A.Y.2007-08 COPY OF THE ORDER FORWARDED TO: 1.ESSEL MINING & INDUSTRIES LTD., INDUSTRY HOUSE, 1 8 TH FLOOR, 10, CAMAC STREET, KOLKATA-700017. 2.ADDL.CIT, RANGE-5, KOLKATA 3. CIT(A)-VI, KOLKATA 4. CIT-II, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY B Y ORDER, ASST. REGISTRAR, ITAT, KOLKATA BENCHES KOLKATA BENCHES