DCIT, Ludhiana V. M/s IOL Chemicals & Pharmaceuticals Ltd., Ludhiana

ITA 62/CHANDI/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 3727 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Next Hearing Date: 24-07-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 06-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANKUR ALYA
• Keywords: Capital asset; Business income; Depreciation; Rule of consistency; Proportionate interest; Bad and doubtful debts; Non passing of speaking order; Capital receipt; Revised return; Revenue expenditure; Capital expenditure; Set aside
• Section: 43B; 115JB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH A , CHANDIGARH !'# , $ !% ' & ' ( ) * , !% BEFORE SMT.DIVA SINGH, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO.241/CHD/2017 / ASSESSMENT YEAR : 2004-05 M/S IOL CHEMICALS & PHARMACEUTICALS LTD., 85, INDUSTRIAL AREA-A, LUDHIANA. THE A.C.I.T. CIRCLE-1, LUDHIANA. ./PAN NO: AABCI1842A ./ ITA NO.1145/CHD/2016 / ASSESSMENT YEARS : 2007-08 M/S IOL CHEMICALS & PHARMACEUTICALS LTD., 85, INDUSTRIAL AREA-A, LUDHIANA. THE ADDL.C.I.T., RANGE -1, LUDHIANA. ./PAN NO: AABCI1842A /APPELLANT /RESPONDENT ./ ITA NO.1146/CHD/2016 / ASSESSMENT YEAR : 2008-09 M/S IOL CHEMICALS & PHARMACEUTICALS LTD., 85, INDUSTRIAL AREA-A, LUDHIANA. THE A.C.I.T. CIRCLE-1, LUDHIANA. ./PAN NO: AABCI1842A ./ ITA NO.1147/CHD/2016 / ASSESSMENT YEAR : 2009-10 ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 2 M/S IOL CHEMICALS & PHARMACEUTICALS LTD., 85, INDUSTRIAL AREA-A, LUDHIANA. THE ADDL.C.I.T. RANGE -1, LUDHIANA. ./PAN NO: AABCI1842A ./ ITA NO.1148/CHD/2016 / ASSESSMENT YEAR : 2012-13 M/S IOL CHEMICALS & PHARMACEUTICALS LTD., 85, INDUSTRIAL AREA-A, LUDHIANA. THE J.C.I.T. RANGE -7, LUDHIANA. ./PAN NO: AABCI1842A & ./ ITA NO.62/CHD/2017 / ASSESSMENT YEAR : 2010-11 THE D.C.I.T. CIRCLE-6, LUDHIANA. M/S IOL CHEMICALS & PHARMACEUTICALS LTD., 85, INDUSTRIAL AREA-A, LUDHIANA. ./PAN NO: AABCI1842A /ASSESSEE BY: SHRI ASHWANI KUMAR, CA ! / REVENUE BY: SHRI CHANDRAJIT SINGH, CIT(DR) & SHRI ANKUR ALYA, SR.DR ' # $ /DATE OF HEARING : 24.07.2019 %&'( $ /DATE OF PRONOUNCEMENT: 30.08.2019 /ORDER PER BENCH : ALL THE ABOVE APPEALS RELATE TO THE SAME ASSESSEE. THE APPEALS IN ITA NO.241/CHD/2017, ITA NO.1145/CHD/201 6, ITA NO.1146/CHD/2016, ITA NO.1147/CHD/2016 & ITA ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 3 NO.1148/CHD/2016 HAVE BEEN PREFERRED BY THE ASSESSE E AGAINST THE SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-4 LUDHIANA, [(IN SHORT CIT(A)] DATE D 22.11.2016, 19.9.2016, 23.9.2016, 28.9.2016 & 9.9.2 016 RELATING TO ASSESSMENT YEARS 2004-05, 2007-08, 2008 -09, 2009-10 & 2012-13 RESPECTIVELY, PASSED U/S 250(6) O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS A CT). THE APPEAL OF THE REVENUE IN ITA NO.62/CHD/2017 HAS BEE N PREFERRED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-4, LUDHIANA, [(IN SHORT CIT(A)] DAT ED 20.10.2016, AND RELATES TO ASSESSMENT YEAR 2010-11. 2. IT WAS COMMON GROUND BETWEEN THE PARTIES THAT IDENTICAL ISSUES WERE INVOLVED IN ALL THE APPEALS . THEREFORE, ALL THE APPEALS WERE HEARD TOGETHER AND ARE BEING D ISPOSED OFF BY THIS COMMON CONSOLIDATED ORDER. WE SHALL FIRST BE DEALING WITH THE APPEAL OF THE ASSESSEE IN ITA NO.214/CHD/2017. ITA NO.214/CHD/2017(A.Y. 2004-05): 3. GROUND NO.1 RAISED BY THE ASSESSEE READS AS UNDER: (1) THAT ORDER PASSED U/S 250(6) OF THE INCOME TAX ACT, 1961 BY THE LD. COMMISSIONER OF INCOME TAX ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 4 (APPEALS)~4, LUDHIANA IS AGAINST LAW AND FACTS ON T HE FILE IN AS MUCH HE WAS NOT JUSTIFIED TO UPHOLD THE ACTION OF THE LD. ASSESSING OFFICER IN TREATING THE AMOUNT OF SALES TAX SUBSIDY AMOUNTING TO RS.2,29,48,622/- AS A REVENUE RECEIPT WHEREAS IT ACTUALLY REPRESENTED CAPITAL RECEIPT. 4. THE ISSUE INVOLVED IN THE ABOVE GROUND RELATES T O THE NATURE OF SALES TAX SUBSIDY RECEIVED BY THE ASSESSEE WHETHER CAPITAL OR REVENUE . THE ASSESSEE HAD TREATED THE SAME AS CAPITAL IN NATURE, WHILE TH E AO HAD HELD THE SAME TO BE REVENUE IN NATURE FOLLOWING THE DECISION OF THE HON'BLE JURISDICTIONA L HIGH COURT IN CASE OF THE ASSESSEE ITSELF FOR ASSESSMENT YEAR 1998-99 AND ALSO THE DECISION OF TH E HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. ABHISHEK INDUSTRIES LTD., REPORTED IN 286 ITR 1 . 5. THE LD.CIT(A) UPHELD THE ORDER OF THE AO. 6. BEFORE US THE LD.COUNSEL FOR THE ASSESSEE STATED THAT IDENTICAL ISSUE HAD ARISEN IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEARS 1995-96 TO 1997-1998 & 1999-2000, WHEN THE ASSESSEE WAS KNOWN BY THE NAME M/S TRIDENT ALCO-CHEM LTD., AND THE MATTER HAD TRAVELLED UP TO THE HIGH COURT WITH THE ASSESSEE FI LING AN APPEAL TO THE HON'BLE HIGH COURT AGAINST THE ORD ER OF THE I.T.A.T. TREATING THE SALES TAX SUBSIDY AS ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 5 REVENUE IN NATURE RELYING UPON THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF ABHISHEK INDUSTRIES LTD. (SUPRA). IT WAS POINTED OU T THAT THE HON'BLE HIGH COURT HAD RESTORED THE APPEA L TO THE TRIBUNAL TO BE RECONSIDERED IN THE LIGHT OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF C IT VS. PONNI SUGARS & CHEMICALS LTD., 306 ITR 392 WHEREIN IT WAS LAID DOWN THAT THE NATURE OF THE REC EIPT WOULD DEPEND UPON THE PURPOSE FOR WHICH SUBSIDY WAS GIVEN. THAT ON RESTORATION OF APPEAL TO THE TRIBUNAL THE MATTER WAS DECIDED IN FAVOUR OF THE ASSESSEE BY RELYING UPON THE DECISION OF THE TRIBUN AL IN THE CASE OF VARDHMAN TEXTILES LIMITED AND OTHERS IN ITA NO.392/CHD/2007 & OTHERS DATED 21-10-15.IT WAS POINTED OUT THAT THE HON'BLE I.T.A.T. HAD STATE D THAT THE SCHEME OF PUNJAB GOVERNMENT BY VIRTUE OF WHICH SALES TAX SUBSIDY HAD BEEN RECEIVED, WAS CONSIDERED IN DETAIL IN THE CASE OF VARDHMAN TEXTILES(SUPRA)AND THEREAFTER IT HAD BEEN HELD THAT THE SALES TAX SUBSIDY WAS CAPITAL IN NATURE. OUR ATTENT ION WAS DRAWN TO PARAS 4 TO 8 OF THE I.T.A.T. ORDER BRINGING OUT THE ABOVE FACTS AS UNDER: ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 6 4. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE I.T.A.T., WHEREBY THE APPEAL OF THE ASSESSEE WAS DISMISSED, MAINLY RELYING ON THE JUDGMENT OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. ABHISHEK INDUSTRIES LTD., 286 ITR 1 (P&H). THE HON'BLE HIGH COURT BY ITS ORDER IN APPEAL NO.421 OF 2007 DATED 14..5.2014 RESTORED THE APPEAL TO THE TRIBUNAL. THIS WAS BASICALLY BASED ON THE FACTS THAT THOUGH THE I.T.A.T. HAD DISMISSED THE APPEAL OF THE ASSESSEE ON THE BASIS OF ABHISHEK INDUSTRIES LTD. (SUPRA), HOWEVER IN THE CASE OF CIT VS. PONNY SUGARS & CHEMICALS LTD., 306 ITR 39 (SC), THE HON'BLE APEX COURT HAS HELD THAT WHETHER THE SUBSIDY IS A REVENUE OR CAPITAL RECEIPT WOULD DEPEND UPON THE NATURE AND PURPOSE OF THE SUBSIDY. IN THIS VIEW, THE APPEALS ARE RESTORED TO THE TRIBUNAL TO ADJUDICATE THE NATURE AND PURPOSE OF SALES TAX SUBSIDY AND, THEREAFTER RECORD THEIR OPINION WHETHER IT IS A CAPITAL OR REVENUE EXPENDITURE AFTER TAKING INTO CONSIDERATION THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF PONNY SUGARS & CHEMICALS LTD. (SUPRA). 5. NOW, THE ONLY ISSUE TO BE DECIDED BY US IS WHETHER THE SALES TAX SUBSIDY RECEIVED BY THE ASSESSEE FROM THE PUNJAB GOVERNMENT IS CAPITAL OR REVENUE IN NATURE. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET MENTIONED THAT THESE WERE A BUNCH OF APPEALS BEFORE THE HON'BLE PUNJAB & HARYANA HIGH COURT TOGETHER WITH THE APPEAL OF THE ASSESSEE, OUT OF WHICH THERE WAS A CASE OF BHUSHAN LIMITED, WHICH WAS ALSO SIMILARLY RESTORED TO THE FILE OF THE TRIBUNAL TO DECIDE THE SAME AFRESH. THE ORDER OF THE CHANDIGARH BENCH OF THE I.T.A.T. IN THE CASE OF BHUSHAN LIMITED IN ITA NO.744/CHD/2006 & OTHERS DATED 16.6.2015 HAS BEEN DELIVERED, WHEREBY AFTER DELIBERATING THE ISSUE ON THE NATURE OF SALES TAX SUBSIDY, THE SAME HAS BEEN HELD TO BE REVENUE IN NATURE. 6. THE LEARNED D.R. DID NOT CONTROVERT THE SAID SUBMISSIONS MADE BY THE LEARNED COUNSEL FOR THE ASSESSEE. ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 7 7. WE OBSERVE THAT THE SIMILAR ISSUE HAS BEEN DECIDED BY US IN ITA NO.392/CHD/2007 (VARDHMAN TEXTILES LIMITED), ITA NO.592/CHD/2007, ITA NO.824/CHD/2007, ITA NO.773/CHD/2012, ITA NO.283/CHD/2014, ITA NO.911/CHD/2013 (VARDHMAN ACRYLIC LIMITED), ITA NO.987/CHD/2006, ITA NO.341/CBHD./2007, ITA NO.756/CHD/2011 (M/S STEEL STRIPS WHEELS LIMITED) AND ITA NO.896/CHD/2006 (M/S INDIAN ACRYLICS LIMITED) VIDE CONSOLIDATED ORDER DATED 21.10.2015, WHEREBY THE ISSUE RELATED TO SALES TAX SUBSIDY RECEIVED FROM THE PUNJAB GOVERNMENT WAS DECIDED IN FAVOUR OF THE ASSESSEE, RELYING ON THE ORDER IN THE CASE OF BHUSHAN LIMITED (SUPRA). RELEVANT FINDINGS ARE AS UNDER : 7. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECORD. WE HAVE CAREFULLY PERUSED THE ORDER OF I.T.A.T. IN THE CASE OF BHUSHAN LIMITED (SUPRA) AND COME TO A CONCLUSION THAT THIS IS ONE OF THE CASES WHICH WAS BEFORE THE HON'BLE HIGH COURT ON THE SAME ISSUE OF SALES TAX SUBSIDY. HOWEVER, THE ONLY DIFFERENCE IN THE FACTS OF THE CASE OF BHUSHAN LIMITED (SUPRA) AND THE CURRENT ASSESSEE IS THAT IN THE CASE OF BHUSHAN LIMITED (SUPRA), THE SALES TAX SUBSIDY WAS RECEIVED FROM THE GOVERNMENT OF WEST BENGAL UNDER WEST BENGAL INCENTIVE SCHEME 1999, WHILE IN THE CASE OF THE ASSESSEE IN QUESTION, THE SUBSIDY HAS BEEN RECEIVED FROM THE GOVERNMENT OF GUJARAT UNDER THE NEW INCENTIVE POLICY-CAPITAL INVESTMENT INCENTIVE TO PREMIER/PRESTIGIOUS UNIT SCHEME 1995-2000. THEREFORE, IN ORDER TO COMPARE THE POLICIES OF TWO DIFFERENT STATES, WE HAVE VERY CAREFULLY GONE THROUGH THE SCHEMES OF BOTH THE GOVERNMENTS PRODUCED BEFORE US. SINCE AS PER THE DIRECTIONS OF THE HON'BLE HIGH COURT, WE HAVE TO JUDGE THE NATURE AND ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 8 PURPOSE OF THE SALES TAX SUBSIDY RECEIVED BY THE ASSESSEE. WE SEE THAT THE SCHEME OF THE GUJARAT GOVERNMENT HAS AIMED TO TRIGGER OFF ACCELERATED INDUSTRIAL DEVELOPMENT AND ECONOMIC GROWTH. FOR THIS PURPOSE, TO PROVIDE SPECIAL PACKAGE TO CERTAIN TYPES OF INDUSTRIES, THE SCHEME WAS FORMULATED. TO BE ELIGIBLE TO GET THE BENEFIT OF THIS SCHEME MAINLY THE CRITERIA HAS BEEN LAID DOWN WITH REGARD TO THE FIXED CAPITAL INVESTMENT, PROJECT RELATED INFRASTRUCTURAL INVESTMENT, SOCIAL INFRASTRUCTURAL INVESTMENT AND COMMON AND PUBLIC PURPOSE INFRASTRUCTURE. ALL THESE REQUIREMENTS ARE TOWARDS CAPITAL INVESTMENTS. FURTHER A CLOSER LOOK AT THE CLAUSE RELATING TO INELIGIBLE INVESTMENT SHOWS THAT SHORT TERM INVESTMENT OR INVESTMENT OF REVENUE NATURE ARE NOT ELIGIBLE FOR THIS SCHEME. A CERTIFICATE OF BEING DECLARED AS PERMANENT PRESTIGIOUS UNIT HAS BEEN GIVEN TO THE ASSESSEE DATED 18.5.2002, WHEREBY THE DETAILS OF INVESTMENT OF THE PROJECT AND EMPLOYMENT ARE GIVEN. WE HAVE ALSO GONE THROUGH THE SCHEME OF THE BENGAL GOVERNMENT WHICH WAS IN QUESTION BEFORE THE CHANDIGARH BENCH OF THE I.T.A.T. IN THE CASE OF BHUSHAN LIMITED (SUPRA). THOUGH BOTH THE SCHEMES OF GUJARAT GOVERNMENT AND WEST BENGAL GOVERNMENT ARE NOT VERBATIM, THE SUM AND SUBSTANCE OF BOTH THE SCHEMES ARE SAME. AS DIRECTED BY THE HON'BLE HIGH COURT ON THE BASIS OF JUDGMENT IN THE CASE OF PONNY SUGARS & CHEMICALS LTD. (SUPRA), THE NATURE OF THE SALES TAX SUBSIDY IS TO BE DECIDED ON THE BASIS OF CHARACTER OF THE RECEIPT IN THE HANDS OF THE ASSESSEE. WE SEE THAT THE SALES TAX SUBSIDY RECEIVED BY THE ASSESSEE IS CAPITAL IN NATURE AND IS NOT SUBJECTED TO TAX. IN ARRIVING AT THIS CONCLUSION, WE ARE GUIDED BY THE ORDER OF THE I.T.A.T. IN THE ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 9 CASE OF BHUSHAN LIMITED (SUPRA), IN WHICH THE COORDINATE BENCH OF THE I.T.A.T. IN THE SAME SET OF FACTS AND CIRCUMSTANCES HAS HELD AS UNDER: 24. THE HON'BLE SUPREME COURT IN THE CASE OF PONNI SUGARS & CHEMICALS LTD. (SUPRA) CONSIDERING ITS EARLIER DECISION IN THE CASE OF SAHNEY STEELS & PRESS WORKS LTD.(SUPRA) DIRECTED THAT THE TEST IS THAT THE CHARACTER OF THE RECEIPT IN THE HANDS OF ASSESSEE HAS TO BE DETERMINED WITH RESPECT TO THE PURPOSE FOR WHICH SUBSIDY IS GIVEN. IN OTHER WORDS, IN SUCH CASES, ONE HAS TO APPLY THE PURPOSE TEST. THE POINT OF TIME AT WHICH SUBSIDY IS PAID, IS NOT RELEVANT. THE SOURCE IS IMMATERIAL. THE FORM OF SUBSIDY IS IMMATERIAL. 25. CONSIDERING THE FACTS OF THE CASE AND THE WEST BENGAL INCENTIVE SCHEME, 1999 IN THE LIGHT OF THE JUDGEMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF PONNI SUGARS & CHEMICALS LTD. (SUPRA), IT IS CLEAR THAT THE UNIT OF ASSESSEE WAS SET UP AS PER SCHEME FORMULATED BY GOVERNMENT OF WEST BENGAL AND ASSESSEE HAS BEEN ALLOWED REMISSION OF SALES TAX FOR 12 YEARS UPTO 100% OF GROSS FIXED CAPITAL INVESTMENT/ASSET OF THE APPROVED PROJECT. THE INCENTIVE SCHEME WAS AVAILABLE FOR LOCATION OF THE UNIT. NO INCENTIVE IS AVAILABLE TO UNITS LOCATED IN GROUP A. THE UNIT OF ASSESSEE IS LOCATED IN GROUP B (HOOGHLY). THE SUBSIDY WOULD HELP THE GROWTH OF INDUSTRY AND NOT TO SUPPLEMENT PROFIT. SUBSIDY IS DETERMINED WITH REFERENCE TO THE FIXED CAPITAL INVESTMENT/ASSET AND NOT PROFIT. NO WORKING CAPITAL IS CONSIDERED IN THE SCHEME. THE LD. DR SAYS THAT THE SUBSIDY IS GIVEN FOR 12 YEARS AFTER PRODUCTION AND AS SUCH IT IS REVENUE IN NATURE. THE ARGUMENTS OF LD. DR CANNOT BE ACCEPTED IN VIEW OF THE ABOVE FACTS BECAUSE THE SCHEME IS MADE TO ENCOURAGE THE PROMOTION OF ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 10 INDUSTRIES/SETTING UP IN THE STATE OF WEST BENGAL. THE INCENTIVES ARE PROVIDED TO APPROVED PROJECTS ONLY. THE PURPOSE OF GIVING SUBSIDY IS THUS, TO PROMOTE AND SET UP INDUSTRIES IN STATE OF WEST BENGAL. THE ELIGIBILITY CERTIFICATE WAS ISSUED BEFORE COMMENCEMENT OF PRODUCTION, THEREFORE SUBSIDY BASED ON FIXED CAPITAL INVESTMENT. THE TIME OF 12 YEARS AFTER COMMENCEMENT OF THE PRODUCTION IS NOT RELEVANT. THE SOURCE OF SUBSIDY OUT OF SALES TAX IS IMMATERIAL. THE FORM OF SUBSIDY IS ALSO NOT RELEVANT. THE OBJECT/PURPOSE OF ASSISTANCE UNDER THE SUBSIDY SCHEME WAS TO ENABLE THE ASSESSEE TO SET UP NEW UNIT IN STATE OF WEST BENGAL. THEREFORE, THE RECEIPT OF THE SALES TAX SUBSIDY IN THE HANDS OF ASSESSEE WAS CAPITAL IN NATURE. THE DECISIONS RELIED ON BY LD. DR WOULD NOT SUPPORT THE CASE OF THE REVENUE. THE DECISION CITED BY LD. COUNSEL FOR THE ASSESSEE CLEARLY SUPPORT THE SUBMISSION OF LD. COUNSEL FOR THE ASSESSEE THAT THE SALES TAX SUBSIDY RECEIVED BY THE ASSESSEE ARE CAPITAL IN NATURE. WE MAY ALSO NOTE HERE THAT THE SAME SCHEME UNDER WEST BENGAL INCENTIVE SCHEME, 1999 UNDER REFERENCE WAS SUBJECT MATTER OF CONSIDERATION BEFORE ITAT KOLKATTA BENCH IN THE CASE OF KEVENTER AGRO LTD. (SUPRA) AND THE TRIBUNAL ALSO DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE HOLDING THAT THE WEST BENGAL INCENTIVE SCHEME, 1999 CATEGORICALLY ENCOURAGE THE PROMOTION OF INDUSTRIES IN THE STATE OF WEST BENGAL. 26. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE LIGHT OF DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF PONNI SUGARS & CHEMICALS LTD. (SUPRA) AND CONSIDERING THE ABOVE DISCUSSION, WE ARE OF THE VIEW THAT SALES TAX SUBSIDY RECEIVED BY THE ASSESSEE IS CAPITAL RECEIPT IN NATURE AND ARE NOT SUBJECTED TO TAX. THE ADDITIONS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF RECEIPT OF ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 11 SALES TAX SUBSIDY ARE ACCORDINGLY DELETED IN ALL THE ASSESSMENT YEARS IN APPEALS. THE ISSUE REMANDED TO THE TRIBUNAL IS THUS, DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE IN ALL THE APPEALS UNDER REFERENCE. 8. RESPECTFULLY FOLLOWING THE ORDER OF THE COORDINATE BENCH OF THE TRIBUNAL, WE HEREBY HOLD THAT THE SALES TAX SUBSIDY RECEIVED BY THE ASSESSEE IS CAPITAL IN NATURE AND, THEREFORE, NOT TAXABLE. 9. THE APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO.392/CHD/2007 : ITA NO.592/CHD/2007 : ITA NO.824/CHD/2007 : ITA NO.283/CHD/2014 : ITA NO.911/CHD/2013 : 10. IT IS RELEVANT TO OBSERVE HERE THAT THE FACTS AND CIRCUMSTANCES OF THESE CASES ARE SIMILAR TO THAT OF VARDHMAN ACRYLICS LIMITED IN ITA NO.773/CHD/2012 AND THE FINDINGS GIVEN IN ITA NO.773/CHD/2012 SHALL APPLY TO THESE CASES ALSO WITH EQUAL FORCE. ITA NO.897/CHD/2006 : ITA NO.341/CHD/2007 : ITA NO.756/CHD/2011 : (M/S STEEL STRIPS WHEELS LIMITED,) & ITA NO.896/CHD/2006 : (M/S INDIAN ACRYLICS LIMITED) 9. THE APPEAL OF THE ASSESSEE IS ALLOWED. 11. IN THESE CASES, THE ASSESSES HAVE RECEIVED SALES TAX SUBSIDY FROM PUNJAB GOVERNMENT UNDER THE SCHEME NAMED, INDUSTRIAL POLICY & INCENTIVE CODE, 1996. WE HAVE GONE THROUGH THE SAID POLICY AND FOUND THAT THE SCHEME THOUGH NOT VERBATIM AS THAT OF ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 12 WEST BENGAL OR GUJARAT SCHEMES, BUT THE SUM AND SUBSTANCE OF ALL THESE SCHEMES ARE THE SAME, THEREFORE, RELYING ON OUR FINDING GIVEN IN ITA NO.773/CHD/2012, WE HOLD THAT THE SALES TAX SUBSIDY RECEIVED BY THE ASSESSEE IS CAPITAL IN NATURE. 8. DURING THE COURSE OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE PREFERRED NOT TO PRESS ANY OTHER GROUND RAISED BY THE ASSESSEE IN THE GROUND OF APPEAL. 7. THE LD.COUNSEL FOR THE ASSESSEE, THEREFORE, STAT ED THAT THE ISSUE HAVING BEEN DECIDED BY THE I.T.A.T. IN FAVOUR OF THE ASSESSEE SUBSEQUENT TO RESTORATION OF APPEAL BY THE HON'BLE HIGH COURT IN THE CASE OF THE ASSESSEE ITSELF, THERE WAS NO QUESTION OF DECIDING THE ISSUE AGAINST THE ASSESSEE FOLLOWING THE DECISION O F THE HON'BLE HIGH COURT IN AN EARLIER ASSESSMENT YEA R IN THE CASE OF THE ASSESSEE. 8. THE LD. DR FAIRLY CONCEDED TO THE ABOVE FACTS THOUGH HE RELIED UPON THE ORDER OF THE LD.CIT(A). 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. W E FIND MERIT IN THE CONTENTION OF THE ASSESSEE. UNDISPUTEDLY THE ISSUE OF TREATMENT OF SALES TAX SUBSIDY WHETHER THE CAPITAL OR REVENUE, HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AS BEING CAPITAL IN NATURE BY THE DECISION OF THE I.T.A.T. IN THE CASE OF ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 13 M/S TRIDENT ALCO-CHEM LTD. , THE EARLIER NAME OF TH E ASSESSEE, FOR ASSESSMENT YEARS 1995-96 TO 1997-1998 & 1999-2000 (SUPRA). WE HAVE GONE THROUGH THE JUDGMENT OF THE I.T.A.T. IN THE SAID CASE AND WE FI ND THAT AS RIGHTLY POINTED OUT BY THE LD.COUNSEL FOR T HE ASSESSEE, THIS ISSUE HAD BEEN RESTORED TO THE I.T.A .T. BY THE HON'BLE HIGH COURT FOR RECONSIDERATION AFTER TAKING NOTE OF THE PROPOSITION LAID DOWN BY THE HON'BLE APEX COURT IN THE CASE OF PONNI SUGARS & CHEMICALS LTD. (SUPRA) FOR DETERMINING OF THE NATUR E OF THE SUBSIDY RECEIVED. THAT ON RECONSIDERATION TH E I.T.A.T. HAD FOLLOWED THE DECISION OF THE ITAT CHANDIGARH BENCH IN THE CASE OF VARDHMAN TEXTILES(SUPRA) WHEREIN THE SCHEME OF PUNJAB GOVERNMENT GRANTING THE SUBSIDY HAD BEEN CONSIDERED AT LENGTH AND THEREAFTER IT WAS HELD THAT THE PURPO SE OF THE SUBSIDY BEING PROMOTION OF INDUSTRIES THE NATURE OF THE SUBSIDY WAS CAPITAL IN NATURE. IN VIE W OF THE SAME, WE HAVE NO HESITATION IN HOLDING THAT THE SALES TAX SUBSIDY RECEIVED BY THE ASSESSEE IS CAPIT AL IN NATURE. THE ORDER OF LD.CIT(A) STATING THAT THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 1998-9 9 ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 14 WILL APPLY, WE HOLD IS INCORRECT SINCE SUBSEQUENTLY WE FIND THAT THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF OTHER YEARS RELATING TO THE ASSESSEE HAD RESTORED THE MATTER TO THE I.T.A.T., WHO IN TURN HA D DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. IT FOL LOWS THAT SUBSEQUENT VIEW OF THE HON'BLE HIGH COURT AND THE CONSEQUENTIAL DECISION OF THE I.T.A.T. WOULD PREVAIL, FOLLOWING WHICH WE HOLD THAT THE SALES TAX SUBSIDY RECEIVED IS CAPITAL IN NATURE. THE GROUND O F APPEAL NO.1 STANDS ALLOWED. 10. GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE READS AS UNDER: 2. THAT THE LD. CIT(A) WAS NOT JUSTIFIED TO UPHOLD THE ACTION OF THE LD. ASSESSING OFFICER IN MAKING A DISALLOWANCE OF DEFERRED REVENUE EXPENDITURE I.E. L OAN PROCESSING FEE OF RS. 4,00,000/- AND INTEREST DIFFERENTIAL OF RS. 18,92,200/-. 11. THE ISSUE RELATES TO THE DISALLOWANCE OF CLAIM OF LOAN PROCESSING FEE AND INTEREST DIFFERENTIAL AS DEFERRED REVENUE EXPENDITURE. THE FACTS RELATING TO THE CASE ARE THAT THE ASSESSEE HAD CLAIMED LOAN PROCESSING FEES OF RS.4 LACS AND INTEREST DIFFERENT IAL OF RS.18,92,200/- U/S 35D OF THE ACT AS PRELIMINARY EXPENSES ,BEING 1/5 TH OF THE TOTAL EXPENDITURE ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 15 INCURRED ON THESE AMOUNTS. THE AO DISALLOWED THE SAID CLAIM HOLDING THAT THE SAID EXPENDITURE DO NOT QUALIFY FOR DEDUCTION U/S 35D OF THE ACT AND FURTHE R THAT THE SAID EXPENDITURE DO NOT RELATE TO THE YEAR UNDER CONSIDERATION. THE LD.CIT(A) UPHELD THE ORDER OF THE AO. 12. BEFORE US THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT THE INTEREST DIFFERENTIAL OF RS.94.6 1 LACS AROSE DURING THE IMPUGNED YEAR ON ACCOUNT OF THE RESTRUCTURING OF THE TERM LIABILITIES RAISED FR OM IDBI BANK VIDE LETTER DATED 8.8.2003 OF THE IDBI BANK. IT WAS ADMITTED BY THE LD.COUNSEL FOR THE ASSESSEE THAT THE SAID INTEREST DIFFERENTIAL DID NO T QUALIFY AS PRELIMINARY EXPENSES FOR THE PURPOSE OF CLAIMING DEDUCTION U/S 35D OF THE ACT BUT AT THE SA ME TIME, IT WAS CONTENDED THAT THE ASSESSEE WAS ELIGIB LE TO CLAIM THE SAID EXPENSES ON PAYMENT BASIS AS PER THE PROVISIONS OF SECTION 43B OF THE ACT. IT WAS FU RTHER CONTENDED THAT THIS CLAIM OF THE ASSESSEE HAD BEEN ALLOWED FOR ALL YEARS EXCEPT A.Y 2007-08 AND 2008-0 9. AS FAR THE LOAN PROCESSING FEES, IT WAS POINTED OUT THAT THE SAME ALSO RELATED TO THE RESTRUCTURING OF THE ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 16 EXISTING LOAN OF THE IDBI AND IT WAS ADMITTED THAT THE SAME ALSO DID NOT QUALIFY AS PRELIMINARY EXPENSES F OR CLAIMING DEDUCTION U/S 35D OF THE ACT BUT AT THE SA ME TIME, IT WAS CONTENDED THAT THE EXPENDITURE ON THIS ACCOUNT HAD ALREADY BEEN ALLOWED IN PRECEDING YEARS AND SUBSEQUENT TWO YEARS I.E. IN ASSESSMENT YEARS 2002-03, 2003-04,2005-06 AND 2006-07. IT WAS, THEREFORE, CONTENDED THAT KEEPING THE PRINCIPLE OF CONSISTENCY THE SAME OUGHT TO BE ALLOWED. 13. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE CIT(A) STATING THAT NEITHER OF THE TWO EXPENSES RELATED TO THE IMPUGNED YEAR AND ADMITTEDL Y THE CLAIM DID NOT QUALIFY FOR DEDUCTION U/S 35D OF THE ACT AND, THEREFORE, THE DISALLOWANCE HAD BEEN RIGHT LY UPHELD BY THE AUTHORITIES BELOW. 14. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE ISSUE RELA TES TO CLAIM OF INTEREST DIFFERENTIAL AND LOAN PROCESSI NG FEES WHICH AROSE ON ACCOUNT OF RESTRUCTURING OF EXISTING LOAN TAKEN BY THE ASSESSEE FROM IDBI BANK. THE AFORESAID FACTS ARE NOT IN DISPUTE. ALSO IT IS NOT THE CASE OF THE REVENUE THAT THE IMPUGNED EXPENSES ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 17 DID NOT RELATE TO THE BUSINESS OF THE ASSESSEE. THE ASSESSEE ADMITTEDLY HAD CLAIMED DEDUCTION U/S 35D O F THE ACT, WHICH IT HAD ADMITTED BEFORE US, IT WAS NO T ELIGIBLE FOR THE SAME. THEREFORE, AS FAR AS THE DISALLOWANCE BEING MADE AND UPHELD ON ACCOUNT OF TH E ASSESSEE BEING INELIGIBLE TO CLAIM THE SAME U/S 35D OF THE ACT IS CONCERNED, ADMITTEDLY THERE IS NO INFIRM ITY IN THE SAME. BUT ALTERNATIVELY THE ASSESSEE HAD CONTENDED THAT THE FACT THAT THE EXPENSES RELATED T O THE BUSINESS OF THE ASSESSEE NOT BEING DENIED, IT W AS ELIGIBLE TO CLAIM THE SAID EXPENSES ON PAYMENT BASI S U/S 43B OF THE ACT ON ACCOUNT OF THE INTEREST DIFFERENTIAL AND ALSO ON THE PRINCIPLE OF CONSISTEN CY, HAVING BEEN ALLOWED THE CLAIM IN THE PRECEDING AND SUCCEEDING YEARS. CONSIDERING THIS CONTENTION OF TH E LD.COUNSEL FOR THE ASSESSEE WE ARE OF THE VIEW THAT THE CLAIM BE ALLOWED IN THE IMPUGNED YEAR SINCE OTHERWISE IT WOULD HAVE MULTIPLE RAMIFICATIONS WITH THE ASSESSEE STAKING ITS CLAIM IN THE YEAR IN WHICH IT ACCRUED AND CONSIDERING THAT THE REVENUE AUTHORITIE S HAVE ALREADY ALLOWED THE CLAIM IN PRECEDING AND SUCCEEDING YEARS, IT WOULD LEAD TO MULTIPLE LITIGAT ION AND ADJUSTMENTS REQUIRING TO BE MADE. BY ALLOWING ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 18 THE CLAIM IN THE IMPUGNED YEAR, THE ISSUE, ONCE AND FOR ALL WILL BE SETTLED IN RELATION TO THESE FACTS. WE MAY ADD THAT THIS SHOULD NOT BE TAKEN TO SETTING A PRECEDENT ON SUCH ISSUES . THIS GROUND OF APPEAL NO .2 IS, THEREFORE ALLOWED. 15. GROUND OF APPEAL NO.3 RAISED BY THE ASSESSEE READS AS UNDER: 3. THAT HE WAS NOT JUSTIFIED TO UPHOLD THE ACTION OF THE LD. ASSESSING OFFICER IN DISALLOWING AN AMOUNT OF RS. 6 ,14,677/- ON ACCOUNT OF PROPORTIONATE INTEREST ON MACHINERY P UT TO USE AND CLOSING BALANCE OF CAPITAL-WORK-IN-PROGRESS BY TREATING THE SAME AS CAPITAL EXPENDITURE. 16. THE ISSUE RELATES TO DISALLOWANCE OF PROPORTION ATE INTEREST RELATING TO MACHINERY NOT PUT TO USE AND T O CAPITAL WORK IN PROGRESS BY APPLYING THE PROVISIONS OF SECTION 36(1)(III) OF THE ACT. THE AO FOUND THAT TH E ASSESSEE HAD DURING THE YEAR PURCHASED AND PUT TO USE NEW MACHINERY AS UNDER: BEFORE 30.9.03 RS.46,47,362/- AFTER 30.9.03 RS.68,27,157/- CAPITAL WORK IN PROGRESS RS.23,93,332/- 17. THE AO NOTED THAT AS PER THE PROVISIONS OF THE ACT INTEREST RELATABLE TO THE PERIOD PRIOR TO THE ACQUI SITION OF ASSET WAS TO BE ADDED TO THE COST OF THE ASSET A ND ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 19 CAPITALIZED. HE FURTHER RELIED UPON THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. ABHISHEK INDUSTRIES LTD., 286 ITR 1 FOR THE PROPOSITION THAT THE ENTIRE FUNDS IN A BUSINESS BEI NG IN A COMMON KITTY, INTEREST EXPENDITURE INCURRED ON FUNDS INVESTED IN PURCHASE OF MACHINERY AND CAPITAL WORK IN PROGRESS IS INCURRED. ACCORDINGLY, HE CALCULATED THE INTEREST EXPENDITURE PERTAINING TO T HE PERIOD PRIOR TO THE ASSET BEING PUT TO USE AND INTE REST EXPENDITURE INCURRED IN RELATION TO THE CAPITAL WOR K IN PROGRESS AND APPORTIONING THE SAME IN THE RATIO OF BORROWED FUNDS TO TOTAL FUNDS, CALCULATED THE INTER EST EXPENDITURE TO BE CAPITALIZED ON ACCOUNT OF FIXED A SSET AND CAPITAL WORK IN PROGRESS AS AMOUNTING TO RS.7,12,043/-.THEREAFTER ALLOWING DEPRECIATION ON THE SAME @ 25%, THE AO WORKED OUT THE DISALLOWANCE OF INTEREST U/S 36(1)(III) OF THE ACT TO RS.6,14,677/- . THE LD.CIT(A) UPHELD THE ORDER OF THE AO. 18. BEFORE US THE ONLY PLEA RAISED BY THE LD.COUNSE L FOR THE ASSESSEE WAS THAT DIRECTION BE GIVEN TO AL LOW DEPRECIATION ON THE SAME. ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 20 SINCE WE HAVE NOTED FROM THE ORDER OF THE CIT(A) THAT THE DEPRECIATION HAS ALREADY BEEN ALLOWED ON T HE SAME, WE DO NOT FIND ANY MERIT IN THIS PLEA OF THE ASSESSEE. IN ANY CASE, NO ARGUMENTS HAVE BEEN MADE ON THE MERITS OF THE CASE. THE GROUND OF APPEAL NO. 3 RAISED BY THE ASSESSEE IS, THEREFORE, DISMISSED. 19. GROUND OF APPEAL NO.4 RAISED BY THE ASSESSEE READS AS UNDER: 4. THAT HE FURTHER GRAVELY ERRED IN UPHOLDING THE ADDITION OF RS. 2,61,743/-MADE BY THE LD. ASSESSING OFFICE ON ACCOUNT OF PREVIOUS YEAR EXPENSES. 20. BRIEF FACTS RELATING TO THE CASE ARE THAT THE A O NOTED THAT THE ASSESSEE HAD DEBITED PREVIOUS YEAR EXPENSES AMOUNTING TO RS.2,61,743/-. ON BEING CONFRONTED WITH THE SAME, THE ASSESSEE CONTENDED TH AT THE BILLS RELATING TO THESE EXPENSES HAD BEEN RAISE D DURING THE YEAR AND, THEREFORE, LIABLE TO BE ACCRUE D DURING THE YEAR ITSELF. THE AO REJECTED THE EXPLANA TION OF THE ASSESSEE AND DISALLOWED THE EXPENSES HOLDING THE SAME NOT RELATABLE TO THE YEAR. THE CIT(A) UPHE LD THE SAME. 21. BEFORE US THE LD.COUNSEL FOR THE ASSESSEE REITERATED THE CONTENTIONS MADE BEFORE THE CIT(A) T HAT ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 21 ALL BILLS REGARDING THE EXPENSES HAD BEEN FILED TO THE AO. IT WAS ALSO POINTED OUT THAT THE BILLS RELATING TO THESE EXPENSES HAD BEEN RECEIVED DURING THIS YEAR AND, THEREFORE, LIABLE TO BE ACCRUED DURING THE YEA R AND THAT EVEN THE TAX AUDITORS HAD NOTED THE FACT T HAT THE EXPENDITURE RELATED TO THE PRECEDING YEARS, NO DISALLOWANCE WAS TO BE MADE SINCE THE LIABILITY HAS ARISEN DURING THE IMPUGNED YEAR ONLY. IT WAS FURTHE R POINTED OUT THAT IDENTICAL DISALLOWANCE MADE IN ASSESSMENT YEAR 2003-04 HAD BEEN ALLOWED BY THE CIT(A). THE COPY OF THE ORDER WAS PLACED BEFORE US AT PAPER BOOK PAGE NOS.24 TO 27. THE LD. DR, ON THE OTHER HAND RELIED UPON THE ORDERS OF AUTHORITIES BELOW. 22. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E ORDERS OF THE AUTHORITIES BELOW. WE FIND MERIT IN T HE CONTENTIONS OF THE ASSESSEE. THE ASSESSEE HAS TIME AND AGAIN CONTENDED THAT THOUGH THE EXPENSES RELATE D TO THE PRECEDING YEARS, THE BILLS WERE RAISED IN TH E IMPUGNED YEAR. THIS HAS NOT BEEN CONTROVERTED BY TH E REVENUE. THEREFORE, WE AGREE WITH THE LD.COUNSEL FO R THE ASSESSEE THAT SINCE THE BILLS WERE RAISED OF TH ESE ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 22 EXPENSES IN THE IMPUGNED YEARS, THE LIABILITY FOR T HESE EXPENSES CRYSTALLIZED IN THE IMPUGNED YEAR ONLY AND FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING THE ASSESSEE HAD, THEREFORE, RIGHTLY CLAIMED THE SAID EXPENSES IN THE IMPUGNED YEAR. EVEN OTHERWISE FOLLOWING THE SAME LOGIC AND REASONING, WE HAVE NOT ED, THAT THE LD.CIT(A) HAD ALLOWED IDENTICAL EXPENSES CLAIMED BY THE ASSESSEE IN ASSESSMENT YEAR 2003-04 WHICH WERE DISALLOWED BY THE AO FOR IDENTICAL REASO NS TREATING THEM AS PREVIOUS YEAR EXPENSES. IN VIEW OF THE ABOVE, GROUND OF APPEAL NO.4 RAISED BY THE ASSESSEE IS ALLOWED. IN EFFECT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. WE SHALL NOW TAKE UP THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2007-08 IN ITA NO.1145/CHD/2016. ITA NO.1145/CHD/2016: 23. GROUND NO.1(A) & (B) RAISED BY THE ASSESSEE REA DS AS UNDER: ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 23 1(A) THAT ORDER PASSED U/S 250(6) OF THE INCOME TA X ACT, 1961 BY THE LD. COMMISSIONER .OF INCOME TAX (APPEAL S)- 4, LUDHIANA IS AGAINST LAW AND FACTS, ON THE FILE I N AS MUCH AS HE WAS NOT JUSTIFIED IN ARBITRARILY UPHOLDI NG ACTION OF THE LD. ASSESSING OFFICER IN TREATING A S UM OF RS. 8,24,54,110/- RECEIVED BY THE APPELLANT AS SALES TA X SUBSIDY AS A REVENUE RECEIPT WHEREAS THE SAME WAS ACTUALLY A CAPITAL RECEIPT. (B) THAT THE LD. CIT(A) GRAVELY ERRED IN NOT APPR ECIATING THE DECISION OF THE HON'BLE BENCH OF ITAT, CHANDIGARH I N THE CASE OF THE APPELLANT FOR A/YS 1995-96 TO 1997-98 A ND 1999-2000 IN COMING TO THIS CONCLUSION. 24. IT WAS COMMON GROUND THAT THE ISSUE RAISED IN THE IMPUGNED GROUND WAS IDENTICAL TO THAT RAISED GROUND NO.1 OF ASSESSEES APPEAL PERTAINING TO A.Y 2004-05 IN ITA NO.241/CHD/2017. OUR DECISION RENDERED THEREIN AT PARA 9 OF OUR ORDER ABOVE, WIL L APPLY MUTATIS MUTANDIS TO THIS GROUND ALSO. ACCORDINGLY WE HOLD THAT THE SALES TAX SUBSIDY RECEIVED BY THE ASSESSEE WAS CAPITAL IN NATURE AND HENCE NOT TAXABLE . GROUND OF APPEAL NO.1 IS THEREFORE ALLOWED 25. GROUND NO.2 RAISED BY THE ASSESSEE READS AS UNDER: 2. THAT THE LD. CIT(A) WAS FURTHER NOT JUSTIFIED T O UPHOLD ACTION OF THE LD. ASSESSING OFFICER IN DISALLOWING A SUM OF RS.22,42,200/- ON ACCOUNT OF DEFERRED REVENUE EXPENDITURE RS.3,50,000/- ON ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 24 ACCOUNT OF LOAN PROCESSING FEES AND RS.18,92,200/- ON ACCOUNT OF INTEREST DIFFERENTIAL. 26. IT WAS COMMON GROUND THAT THE ISSUE RAISED IN THE PRESENT GROUND WAS IDENTICAL TO THAT RAISED IN GROUND NO.2 OF ASSESSES APPEAL FOR A.Y 2004-05, IN ITA NO.241/CHD/2017.OUR DECISION RENDERED THEREIN AT PARA 14 OF OUR ORDER ABOVE WILL APPLY WITH EQU AL FORCE TO THIS GROUND ALSO. ACCORDINGLY THE CLAIM O F THE ASSESSEE OF LOAN PROCESSING FEES AND INTEREST DIFFERENTIAL IS ALLOWED. GROUND OF APPEAL NO.2 IS THEREFORE ALLOWED. 27. GROUND NO.3 OF THE APPEAL RAISED BY THE ASSESSE E READS AS UNDER: 3. THAT HE FURTHER GRAVELY ERRED IN UPHOLDING ACTI ON OF THE LD. ASSESSING OFFICER IN DISALLOWING A SUM OF RS.52,778/- ON ACCOUNT OF EXCHANGE FLUCTUATION LOSS . 28. THE ABOVE GROUND WAS NOT PRESSED BY THE LD.COUNSEL FOR THE ASSESSEE BEFORE US. THE SAME IS THEREFORE DISMISSED AS NOT PRESSED. 29. GROUND NO.4 RAISED BY THE ASSESSEE READS AS UNDER: 4. THAT THE LD. CIT(A) FURTHER GRAVELY ERRED IN UP HOLDING ACTION OF THE LD. ASSESSING OFFICER IN ARBITRARILY TREATING A SUM OF RS. 13,94,628/- AS INCOME FROM ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 25 OTHER SOURCES AS AGAINST INCOME DECLARED UNDER THE HEAD BUSINESS INCOME. 30. THE ABOVE GROUND CHALLENGES THE ACTION OF THE LD.CIT(A) IN UPHOLDING THE ORDER OF THE AO IN TREAT ING THE AMOUNT OF RS.13,94,628/- RETURNED BY THE ASSESSEE AS BUSINESS INCOME, AS INCOME FROM OTHER SOURCES. THESE RECEIPTS WERE REFLECTED BY THE ASSES SEE AS OTHER INCOME AND WERE OF THE FOLLOWING NATURE: INTEREST RECEIVED = RS.12,29,570/- MISCELLANEOUS INCOME = RS.1,65,058/- 31. BEFORE THE LD.CIT(A) THE ASSESSEE CONTENDED THA T THE ABOVE INCOME HAD DIRECT RELATION WITH THE BUSIN ESS OF THE ASSESSEE COMPANY AS THE INTEREST WAS RECEIVE D ON ACCOUNT OF FIXED DEPOSITS RETAINED ON ACCOUNT OF A MARGIN MONEY ON ACCOUNT OF NON FUND BASED LIMITS WITH THE BANK AND THAT MISCELLANEOUS INCOME WAS IN THE NATURE OF FINE AND PENALTIES CHARGED FROM CONTRACTORS FOR NOT COMPLYING WITH THE TERMS OF THE COMPANY. THE LD.CIT(A) REJECTED THE SUBMISSIONS OF THE ASSESSEE AND UPHELD THE ORDER OF THE AO TREATIN G THE IMPUGNED INCOME AS INCOME FROM OTHER SOURCES. 32. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE REITERATED THE CONTENTIONS MADE BEFORE THE LOWER ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 26 AUTHORITIES THAT BOTH THE INTEREST INCOME AND MISCELLANEOUS INCOME HAD DIRECT CONNECTION WITH THE BUSINESS OF THE ASSESSEE AND, THEREFORE, WERE IN TH E NATURE OF BUSINESS INCOME OF THE ASSESSEE .THAT THEREFORE, THEY HAD BEEN INCORRECTLY TREATED AS INC OME FROM OTHER SOURCES. THE LD.COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE SUBMISSIONS MADE BEFORE T HE LD.CIT(A) IN THIS REGARD, REPRODUCED AT PARA 9.1 OF HIS ORDER AS UNDER: GROUND NO.5 I.E. GROUND NO.3:- INCOME FROM OTHER SOURCES: THE ASSESSING OFFICER IS NOT JUSTIFIED IN CONSIDERI NG INTEREST INCOME AMOUNTING TO RS. 12,29,570 AND MISC . INCOME AMOUNTING TO RS. 1,65,058 AS INCOME FROM OTHER SOUR CES AS THIS IS DIRECTLY RELATED TO BUSINESS OF THE ASSESSEE COM PANY AS INTEREST RECEIVED IS ON ACCOUNT OF FIXED DEPOSIT WH ICH IS BEING RETAINED ON ACCOUNT OF MARGIN MONEY ON ACCOUNT OF N ON-FUND BASED LIMITS WITH THE BANK AND MISCELLANEOUS INCOME IS ON ACCOUNT OF PENALTY OR FINES CHARGED FROM CONTRACTOR S ON ACCOUNT OF NOT COMPLYING -WITH THE TERMS OF THE COM PANY. 33. THE LD.COUNSEL FOR THE ASSESSEE STATED THAT DESPITE POINTING THE DIRECT NEXUS OF THE SAID INCOM ES WITH THE BUSINESS OF THE ASSESSEE, THE LD.CIT(A) HA D SUMMARILY REJECTED THE CONTENTIONS OF THE ASSESSEE WITHOUT GIVING ANY REASONS FOR THE SAME AND WITHOUT EVEN DISCUSSING THE FACTS STATED BY THE ASSESSEE RELATING TO THE SAID INCOMES. HE DREW OUR ATTENTION TO ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 27 THE FINDINGS OF THE LD.CIT(A) ON THE ISSUE AT PARA 9.3 OF THE ORDER AS UNDER: 9.3 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASS ESSING OFFICER AS MADE BY HIM IN THE ASSESSMENT ORDER WHIL E TREATING BUSINESS INCOME AS INCOME FROM OTHER SOURC ES. I HAVE ALSO CONSIDERED WRITTEN SUBMISSIONS FILED BY T HE ASSESSEE COMPANY VIDE LETTER DATED 31.10.2014 ON TH E ISSUE UNDER REFERENCE. I HAVE FURTHER CONSIDERED TH E OTHER MATERIAL PLACED BY THE ASSESSEE COMPANY ON RECORD. ON CAREFUL CONSIDERATION OF THE ASSESSMENT ORDER, IT H AS BEEN NOTICED THAT THE ASSESSING OFFICER HAS TREATED BUSI NESS INCOME AS INCOME FROM OTHER SOURCES AS IN HIS OPINI ON THE INTEREST INCOME ON FDRS AND MISCELLANEOUS INCOM E SHOWN BY THE ASSESSEE COMPANY CAN ONLY BE ASSESSED UNDER THE HEAD 'INCOME FROM OTHER SOURCES' AND NOT UNDER THE HEAD 'BUSINESS INCOME'. ON THE OTHER HAND, THE LD. ARS OF THE ASSESSEE COMPANY HAVE SUBMITTED THAT THE INC OME IS ASSESSABLE AS INCOME FROM BUSINESS AS THE INCOME HA S DIRECT RELATION WITH THE BUSINESS OF THE ASSESSEE COMPANY. ON CAREFUL CONSIDERATION OF THE RIVAL CONTENTIONS, I AM OF THE OPINION THAT THERE IS NO FORCE HI THE ARGUMENTS OF THE ASSESSEE COMPANY ON THE ISSUE UNDER REFERENCE AS TH E FDR INTEREST AND MISCELLANEOUS INCOME SHOWN BY THE ASSE SSEE COMPANY HAS NO RELATION WITH THE BUSINESS OF THE AS SESSEE COMPANY. MOREOVER, THE INCOME SHOWN BY THE ASSESSEE IS TO BE SHOWN UNDER CORRECT HEAD WHICH HAS ALREADY BEEN DON E BY THE ASSESSING OFFICER. UNDER SUCH CIRCUMSTANCES, TH E ACTION OF THE ASSESSING OFFICER HI TREATING INCOME OF RS.13,9 4,628/- AS INCOME FROM OTHER SOURCES CANNOT BE SAID TO BE UNJU STIFIED. 34. THE LD.COUNSEL FOR THE ASSESSEE, THEREFORE, CONTENDED THAT IN VIEW OF THE SAME, THE IMPUGNED INCOMES WERE TO BE TREATED AS BUSINESS INCOME OF TH E ASSESSEE ONLY AS RETURNED BY IT. 35. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE CIT(A). ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 28 36. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND AL SO PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE ISSUE RELATES TO THE TREATMENT OF INTEREST INCOME A ND MISCELLANEOUS INCOME EARNED BY THE ASSESSEE AS INCOME FROM OTHER SOURCES. THE ASSESSEE ON THE CONTRARY HAD CLAIMED THE SAID INCOMES TO BE IN THE NATURE OF BUSINESS INCOME. WE FIND THAT THE ASSESSE E HAD EXPLAINED THE REASONS FOR TREATING SO, STATING THAT THE INTEREST INCOME WAS EARNED ON FDRS WHICH WERE RETAINED BY THE BANKS AS MARGIN MONEY FOR RELEASING NON FUND BASED LIMITS TO THE ASSESSEE. AS FOR THE MISCELLANEOUS INCOME, THE ASSESSEE HAD CONTENDED THAT THESE WERE IN THE NATURE OF FINES AND PENALTIE S CHARGED FROM CONTRACTORS FOR NON-COMPLYING THE TERM S OF THE CONTRACT. WE HAVE GONE THROUGH THE ORDER OF THE LD.CIT(A) AND WE FIND THAT HE HAS SUMMARILY DISMISSED THE CONTENTION OF THE ASSESSEE WITHOUT GIVING ANY REASONS FOR THE SAME BY SIMPLY STATING T HAT HE DOES NOT AGREE WITH THE CONTENTION OF THE ASSESS EE. IN VIEW OF THE SPECIFIC SUBMISSIONS MADE BY THE ASSESSEE, IT WAS INCUMBENT FOR THE LD.CIT(A) TO DEA L WITH THE SAME AND DISMISS IT ONLY AFTER GIVING SUIT ABLE REASONS. CLEARLY THE ORDER PASSED BY THE LD.CIT(A) ON ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 29 THE ISSUE IS A NON SPEAKING ORDER. WE, THEREFORE, CONSIDER IT FIT TO RESTORE THE MATTER BACK TO THE LD.CIT(A) TO DEAL WITH THE ISSUE AFRESH. THE LD.CIT (A) IS DIRECTED TO PASS A SPEAKING ORDER AFTER DEALING WITH THE SPECIFIC CONTENTIONS MADE BY THE ASSESSEE. NEEDLESS TO ADD THAT THE ASSESSEE BE GIVEN REASONAB LE OPPORTUNITY OF HEARING. IN VIEW OF THE ABOVE, THE GROUND OF APPEAL NO.4 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. WE SHALL NOW TAKE UP THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2008-09 IN ITA NO.1146/CHD/2016. ITA NO.1146/CHD/2016: A.Y 2008-09 37. GROUND NO.1(A) & (B) RAISED BY THE ASSESSEE REA DS AS UNDER: 1.(A) THAT ORDER PASSED U/S 250(6) OF THE INCOME T AX ACT, 1961 BY THE LD COMMISSIONER OF INCOME TAX (APPEALS) - 4. LUDHIANA IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH AS HE WAS NOT JUSTIFIED IN ARBITRARILY UPHOLDI NG ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 30 ACTION OF THE LD ASSESSING OFFICER IN TREATING A SU M OF RS. 9,51,10,349/- RECEIVED BY THE APPELLANT AS SALE S TAX SUBSIDY AS A REVENUE RECEIPT WHEREAS THE SAME WAS ACTUALLY A CAPITAL RECEIPT. (B) THAT THE LD. CIT(A) GRAVELY ERRED IN NOT APP RECIATING THE DECISION OF THE HON'BLE BENCH OF ITAT, CHANDIGARH IN THE CASE OF THE APPELLANT FOR A/YS 1995-96 TO 1997-98 AND 1999-2000 IN COMING TO THIS CONCLUSION. 38. IT WAS COMMON GROUND THAT THE ISSUE RAISED IN THE IMPUGNED GROUND WAS IDENTICAL TO THAT RAISED GROUND NO.1 OF ASSESSEES APPEAL PERTAINING TO A.Y 2004-05 IN ITA NO.241/CHD/2017. OUR DECISION RENDERED THEREIN AT PARA 9 OF OUR ORDER ABOVE WIL L APPLY MUTATIS MUTANDIS TO THIS GROUND ALSO. ACCORDINGLY WE HOLD THAT THE SALES TAX SUBSIDY RECEIVED BY THE ASSESSEE WAS CAPITAL IN NATURE AND HENCE NOT TAXABLE . GROUND OF APPEAL NO.1(A) & (B) ARE THEREFORE ALLOWED 39. GROUND NO.2 RAISED BY THE ASSESSEE READS AS UNDER: 2. THAT THE LD. CIT(A) WAS FURTHER NOT JUSTIFIED T O UPHOLD ACTION OF THE LD. ASSESSING OFFICER IN DISALLOWING A SUM OF RS. 18,92,200/- ON ACCOUNT OF DEFERRED REVENUE EXPENDITURE. ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 31 40. IT WAS COMMON GROUND THAT THE ISSUE RAISED IN THE PRESENT GROUND WAS IDENTICAL TO THAT RAISED IN GROUND NO.2 OF ASSESSES APPEAL FOR A.Y 2004-05, IN ITA NO.241/CHD/2017.OUR DECISION RENDERED THEREIN AT PARA 14 OF OUR ORDER ABOVE WILL APPLY WITH EQUA L FORCE TO THIS GROUND ALSO. ACCORDINGLY THE CLAIM O F THE ASSESSEE OF LOAN PROCESSING FEES AND INTEREST DIFFERENTIAL IS ALLOWED. GROUND OF APPEAL NO.2 IS THEREFORE ALLOWED. 41. GROUND NO.3 RAISED BY THE ASSESSEE READS AS UNDER: 3. THAT HE WAS FURTHER NOT JUSTIFIED TO ARBITRARIL Y UPHOLD ACTION OF THE LD ASSESSING OFFICER IN DISALLOWING A SUM OF RS. 59,27,182/- OUT OF INTEREST ACCOUNT ON CAPIT AL ADVANCES. 42. THE ISSUE IN THIS GROUND RELATES TO CAPITALIZAT ION OF INTEREST TO THE EXTENT OF RS.59,27,182/- U/S 36(1)(III) OF THE ACT WHICH WAS CLAIMED BY THE ASSE SSEE AS REVENUE EXPENSES. THE FACTS RELATING TO THE ISSU E ARE THAT DURING ASSESSMENT PROCEEDINGS THE AO NOTED THAT THE ASSESSEE HAD GIVEN CAPITAL ADVANCES ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 32 AMOUNTING TO RS.9,75,86,774/- FOR THE PURCHASE OF CAPITAL ASSET BUT HAD NOT CAPITALIZED ANY INTEREST ON THEM. HE FURTHER NOTED THAT THE PERCENTAGE OF BORROWED FUNDS TO THE TOTAL FUNDS OF THE ASSESSEE W AS AROUND 54%. RELYING UPON THE PROVISIONS OF SECTION 36(1)(III) OF THE ACT WHICH PROVIDED THAT ANY AMOUN T OF INTEREST PAID IN RESPECT OF CAPITAL BORROWED FOR ACQUISITION OF AN ASSET FOR ANY PERIOD PRIOR TO THE DATE ON WHICH SUCH ASSET IS PUT TO USE IS TO CAPITALIZE D, THE AO CALCULATED THE AMOUNT OF INTEREST DISALLOWAB LE BY TREATING THE FUNDS AVAILABLE WITH THE ASSESSEE A S COMMON KITTY AND ACCORDINGLY CALCULATING THE INTERE ST PERTAINING TO FUNDS USED FOR MAKING THESE ADVANCES IN THE RATIO OF BORROWED FUNDS TO TOTAL FUNDS AVAILABL E WITH THE ASSESSEE, WORKED OUT THE DISALLOWANCE TO RS.59,27,182/-. 43. BEFORE THE LD.CIT(A) THE ASSESSEE CONTENDED THA T IT HAD A POLICY TO CAPITALIZE INTEREST TILL THE DAT E THE ASSET WAS PUT TO USE ,WHICH FINDS MENTION IN THE NO TES TO THE ACCOUNTS GIVEN IN THE AUDITED ANNUAL REPORT AND THAT THE ASSESSEE HAD CAPITALIZED INTEREST OF RS.2,42,26,881/- AS PER THE SAID POLICY. IT WAS FUR THER ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 33 POINTED OUT THAT VIS--VIS THE CAPITAL ADVANCES MAD E AMOUNTING TO RS.9,75,96,774/- THE ASSESSEE HAD MADE PAYMENTS AGGREGATING TO RS.4,83,39,701/- OUT OF BORROWED FUNDS AND THE INTEREST ON THE SAME HAD BEE N CAPITALIZED. THE LD.CIT(A) REJECTED THE CONTENTION OF THE ASSESSEE AND UPHELD THE DISALLOWANCE/CAPITALIZATION OF INTEREST MADE BY THE AO. 44. BEFORE US THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT IT HAD MADE SPECIFIC SUBMISSIONS BOT H TO THE AO AND THE LD.CIT(A) THAT THE INTEREST PERTAINING TO BORROWED FUNDS USED FOR MAKING THE IMPUGNED CAPITAL ADVANCES HAD ALREADY BEEN CAPITALIZED BY IT AND, THEREFORE, THERE WAS NO NEED FOR MAKING ANY FURTHER CAPITALIZATION/DISALLOWANCE OF INTEREST. OUR ATTENTION WAS DRAWN TO THE SUBMISSION S MADE BY THE ASSESSEE IN THIS REGARD BEFORE THE LD.CIT(A), REPRODUCED AT PARA 8.1 OF THE ORDER AS UNDER: 8.1 IN SUPPORT OF GROUND NO. 2(C) OF APPEAL, THE A SSESSEE COMPANY HAS FILED WRITTEN SUBMISSION'S THROUGH ITS LD. ARS VIDE LETTER DATED 28.09.2016, THE RELEVANT PARA S OF WHICH READ AS UNDER:- ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 34 THE APPELLANT COMPANY HAS THE POLICY TO CAPITALIZE THE INTEREST TILL THE DATE THE ASSET IS PUT TO USE AND THE SAME IS ALSO EVIDENCED BY THE BELOW MENTIONED NOTES TO THE ACCOUNTS GIVEN IN THE AUDITED ANNUAL REPORT :- (A) BORROWED COSTS BORROWING COSTS THAT ARE ATTRIBUTABLE TO ACQUISITIO N OR CONSTRUCTION OF A QUALIFYING ASSET ARE CAPITALIZED AS PART OF COST OF SUCH ASSETS. QUALIFYING ASSET IS ON E THAT NECESSARILY TAKES SUBSTANTIAL PERIOD OF TIME T O GET READY FOR ITS INTENDED USE. ALL OTHER BORROWING COS TS ARE RECOGNIZED AS EXPENSES IN THE PERIOD IN WHICH T HEY ARE INCURRED. (B) FIXED ASSETS FIXED ASSETS ARE STATED AT HISTORICAL COST LESS ACCUMULATED DEPRECIATION. THE COST OF FIXED ASSETS COMPRISES OF ITS PURCHASE V PRICE AND ANY ATTRIBUTABLE EXPENDITURE (DIRECTLY OR INDIRECTLY) FOR BRINGING T HE ASSETS TO ITS WORKING CONDITION FOR ITS INTENDED US E. FURTHER FOR THE YEAR UNDER CONSIDERATION, THE INTER EST OF RS.2,42,26,881/-- WAS DULY CAPITALIZED (DETAIL ENCLOSED). THE DETAIL OF CAPITAL WORK-IN-PROGRESS I S SHOWN UNDER SCHEDULE-8 OF THE BALANCE SHEET OF THE ASSESSEE COMPANY AND DETAIL OF INTEREST CAPITALIZED IS INCLUDED UNDER THE HEAD 'PROJECT AND PRE- OPERATIVE EXPENSES. FURTHER THE COPY OF ACCOUNT OF PROJECT DEVELOPMENT IS ENCLOSED FOR YOUR KIND REFER ENCE WHICH CLEARLY SHOWS THAT THE INTEREST HAS BEEN DULY CAPITALIZED AMOUNTING TO RS. 2,42,26,881/-. THIS FA CT WAS DULY STATED BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE LD. ASSESSING OFFICER. THE LD. ASSESSING OFFICER HAS MADE DISALLOWANCE ON ACCOUNT OF INTEREST ON CAPITAL ADVANCES AMOUNTING TO RS. 9,75,96,774/- WHEREAS OUT OF THIS AMOUNT OF RS. 9,75,96,774/-, THE APPELLANT HAS MADE PAYMENTS AGGREGATING TO RS. 4,83,39,701/- OUT OF THE BORROWED FUNDS/TERM LOANS/SALE PROCEEDS (DETAILS ENCLOSED) AND INTEREST OF WHICH HAS BEEN CAPITALIZED AS MENTIONED ABOVE. HOWEVER, WHILE FRAMING ASSESSMENT, THE LD. ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 35 ASSESSING OFFICER PROCEEDED TO MAKE DISALLOWANCE OF INTEREST RS. 59,27,182/- ON THE TOTAL CAPITAL ADVAN CES. THUS IN VIEW OF THE SUBMISSIONS MADE ABOVE, THE DISALLOWANCE OF INTEREST MADE BY THE LD. ASSESSING OFFICER AS PER THE PROVISO OF SECTION 36(L)(III) DE SERVES TO BE DELETED. 45. THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT DESPITE SPECIFIC SUBMISSIONS MADE THE LD.CIT(A) HAD UPHELD THE DISALLOWANCE MADE BY THE AO WITHOUT GIVING ANY REASONS FOR REJECTING THE CONTENTION OF THE ASSESSEE AND IN A GENERAL MANNER. OUR ATTENTION WAS DRAWN TO THE FINDINGS OF THE LD.CIT(A) AT PARA 8.2 OF HIS ORDER AS UNDER: 8.2 1 HAVE CONSIDERED THE OBSERVATIONS OF THE ASSE SSING OFFICER AS MADE BY HIM IN THE ASSESSMENT ORDER WHIL E MAKING IMPUGNED ADDITION/DISALLOWANCE. I HAVE ALSO CONSIDE RED WRITTEN SUBMISSIONS FILED BY THE ASSESSEE COMPANY VIDE LETT ER DATED 28.09.2016 ON THE ISSUE UNDER REFERENCE. 1 HAVE FUR THER CONSIDERED THE OTHER MATERIAL PLACED BY THE ASSESSE E COMPANY ON RECORD. ON CAREFUL CONSIDERATION OF THE ASSESSMENT ORDER, IT HAS BEEN NOTICED THAT THE ASSESSING OFFICER HAS MADE TH E IMPUGNED ADDITION AS THE ASSESSEE COMPANY HAS NOT FURNISHED ANY REPLY TO THE PROPOSED DISALLOWANCE ON CAPITAL ADVANCES. O N THE OTHER HAND, THE LD. ARS OF THE ASSESSEE COMPANY DURING AP PELLATE PROCEEDINGS HAVE SUBMITTED THAT INTEREST ON CAPITAL ADVANCES OF RS.5,33,67,250/- OUT OF TOTAL CAPITAL ADVANCES OF RS.9,75,66,774/- SHOWN IN THE YEAR UNDER CONSIDERATION HAS ALREADY BEEN CAPITALIZED AS THE AMOUNT TO THIS EXTE NT WAS PAID OUT OF BORROWED FUNDS/TERM LOAN. ON CAREFUL CONSIDE RATION OF THE RIVAL CONTENTIONS, I AM OF THE OPINION THAT THE RE IS NO FORCE IN THE ARGUMENTS OF THE ASSESSEE COMPANY ON THE ISSUE UNDER REFERENCE AS NO REPLY HAS BEEN FURNISHED IN THIS RE GARD DURING ASSESSMENT PROCEEDINGS. MOREOVER, THE ASSESSEE COMP ANY COULD NOT GIVE THE BIFURCATION OF INTEREST CAPITALIZED ON CAPITAL ADVANCES SHOWN IN THE BALANCE SHEET. UNDER SUCH ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 36 CIRCUMSTANCES, THE ACTION OF THE ASSESSING OFFICER IN MAKING AN ADDITION OF RS.59,27,182/- IN THIS CASE ON ACCOUNT OF CAPITALIZATION OF INTEREST ON CAPITAL ADVANCES CANN OT BE SAID TO BE UNJUSTIFIED. 46. THE LD.COUNSEL FOR THE ASSESSEE, THEREFORE, CONTENDED THAT THE DISALLOWANCE OF INTEREST MADE BY THE AO NEEDED TO BE DELETED. 47. THE LD. DR RELIED UPON THE ORDER OF THE AO. 48. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND AL SO PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE FI ND MERIT IN THE CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE THAT THE LD.CIT(A) HAS PASSED A NON SPEAKI NG ORDER ON THE ISSUE WITHOUT DEALING WITH THE SUBMISSIONS MADE BY THE ASSESSEE. AS RIGHTLY POINTE D OUT ,THE ASSESSEE WE FIND, HAD MADE SUBMISSIONS ON FACTS TO THE EFFECT THAT INTEREST PERTAINING TO TH E CAPITAL ADVANCES HAD NOT BEEN CLAIMED AS REVENUE EXPENSES. BUT THE LD.CIT(A), WE FIND,WENT ON TO UPHOLD THE DISALLOWANCE WITHOUT DEALING WITH THE SPECIFIC FACTUAL CONTENTIONS OF THE ASSESSEE.IN VIE W OF THE SPECIFIC SUBMISSIONS MADE BY THE ASSESSEE, IT W AS INCUMBENT FOR THE LD.CIT(A) TO DEAL WITH THE SAME A ND DISMISS IT ONLY AFTER GIVING SUITABLE REASONS. CLEA RLY ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 37 THE ORDER PASSED BY THE LD.CIT(A) ON THE ISSUE IS A NON SPEAKING ORDER. WE, THEREFORE, CONSIDER IT FIT TO RESTORE THE MATTER BACK TO THE LD.CIT(A) TO DEAL WI TH THE ISSUE AFRESH. THE LD.CIT(A) IS DIRECTED TO PASS A SPEAKING ORDER DEALING WITH THE SPECIFIC CONTENTION MADE BY THE ASSESSEE AFTER VERIFYING THE FACTS S TATED BY THE ASSESSEE. NEEDLESS TO ADD THAT THE ASSESSEE BE GIVEN REASONABLE OPPORTUNITY OF HEARING. IN VIEW OF THE ABOVE, THE GROUND OF APPEAL NO.3 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 49. GROUND NO.4 RAISED BY THE ASSESSEE READS AS UNDER: 4. THAT HE FURTHER GRAVELY ERRED IN UPHOLDING ACTI ON OF THE LD. ASSESSING OFFICER IN TREATING A SUM OF RS. 26,50,767/- AS INTEREST ON FDR AS A RECEIPT AND NOT ELIGIBLE TO BE REDUCED FROM CAPITALIZATION OF INTER EST 50. THE ISSUE IN CHALLENGE IN THE ABOVE GROUND IS T HE TREATMENT OF INTEREST EARNED ON FDRS AMOUNTING TO RS.26,50,767/- AS REVENUE RECEIPT BY THE DEPARTMENT AS AGAINST CAPITAL TREATED BY THE ASSESSEE. THE ASSESSEE HAD EXPLAINED THAT THE FDRS ON WHICH INTEREST INCOME HAD BEEN EARNED HAD BEEN MADE OUT O F ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 38 FULLY CONVERTIBLE DEBENTURES ISSUED DURING THE YEAR WHICH HAD BEEN ISSUED FOR PROJECT DEVELOPMENT AND THEREFORE HAD BEEN RIGHTLY CAPITALIZED. THE AO HELD THE FDRS INTEREST TO BE REVENUE IN NATURE. 51. BEFORE THE LD.CIT(A) THE ASSESSEE REITERATED TH E CONTENTIONS MADE BEFORE THE AO .THE LD.CIT(A) DISMISSED THE CONTENTION OF THE ASSESSEE AND UPHELD THE ORDER OF THE AO TREATING THE INTEREST INCOME RECEIVED ON FDRS AS REVENUE RECEIPT OF THE ASSESSEE . 52. BEFORE US THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT DESPITE SPECIFIC SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES THAT THE INTEREST INCO ME EARNED WAS FROM FUNDS WHICH WERE TO BE UTILIZED FOR INVESTMENT IN PROJECT, THE LD.CIT(A) HAD FAILED TO ADDRESS THE SPECIFIC CONTENTION OF THE ASSESSEE AND UPHELD THE ORDER OF THE AO WITHOUT POINTING ANY SPECIFIC REASONS. OUR ATTENTION WAS DRAWN TO THE CONTENTION MADE BEFORE THE LD.CIT(A) AS REPRODUCED AT PARA 9.1 OF THE ORDER POINTING OUT SPECIFIC CONTENT ION OF THE ASSESSEE THAT THE INTEREST INCOME RELATED TO AND WAS EARNED ON FUNDS WHICH WERE RAISED FOR INVESTMEN T IN A PROJECT AS UNDER: ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 39 9.1 IN SUPPORT OF GROUND NO. 3 OF APPEAL, THE ASSE SSEE COMPANY HAS FILED WRITTEN SUBMISSIONS THROUGH ITS L D. ARS VIDE LETTER DATED 28.09.2016, THE RELEVANT PARAS OF WHICH READ AS UNDER:- REGARDING THE ISSUE OF INTEREST ON FDRS , WHY THE INTEREST OF RS. 26,50,767/- RECEIVED ON F.D.R. MADE OUT OF PROCEEDS OF FULLY CONVERTIBLE DEBENTURES ISSUED DUR ING THE YEAR SHOULD NOT BE TREATED AS INCOME INSTEAD OF REDUCING FROM INTEREST CAPITALIZED UNDER PROJECT DEVELOPMENT, IT IS SUBMITTED THAT THE INTEREST PAID ON FULLY CONVERTIBLE DEBENTURES AMOUNTING TO RS. 78,13,664/- WAS CAPITALIZED AND INTEREST RECEIVED O N FDR MADE OUT OF FULLY CONVERTIBLE DEBENTURE PROCEED S HAS BEEN REDUCED FROM THE INTEREST CAPITALIZED, AS THE FUNDS RAISED AGAINST FULLY CONVERTIBLE DEBENTURES T ILL THE TIME NOT USED FOR CAPITAL INVESTMENT, THE SAME REMA INED DEPOSITED IN FDR. AS SUCH, INTEREST ON THE SAME HAS BEEN REDUCED FROM INTEREST CAPITALIZED. THIS REPLY HAS A LSO BEEN REPRODUCED AS SUBMITTED BEFORE THE LD. ASSESSI NG OFFICER, WHICH IS MENTIONED IN THE ORDER OF LD. ASS ESSING OFFICER AT PAGE NO. 11. 53. THE LD.COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE FINDINGS OF THE LD.CIT(A) POINTING THAT IT WAS A NON SPEAKING ORDER AS UNDER: 9.2 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSE SSING OFFICER AS MADE BY HIM IN THE ASSESSMENT ORDER WHIL E TREATING BUSINESS INCOME AS INCOME FROM OTHER SOURCES. I HAV E ALSO CONSIDERED WRITTEN SUBMISSIONS FILED BY THE ASSESSE E COMPANY VIDE LETTER DATED 28.09.2016 ON THE ISSUE U NDER REFERENCE. I HAVE FURTHER CONSIDERED THE OTHER MATE RIAL PLACED BY THE ASSESSEE COMPANY ON RECORD. ON CAREFU L CONSIDERATION OF THE ASSESSMENT ORDER, IT HAS BEEN NOTICED THAT THE ASSESSING OFFICER HAS TREATED INTEREST INC OME RECEIVED BY THE ASSESSEE COMPANY ON FDRS AS REVENUE RECEIPT AS AGAINST TREATED BY THE ASSESSEE COMPANY AS CAPITAL RECEIPT. THE ASSESSING OFFICER HAS FURTHER OBSERVED THAT THE ASSESSEE COMPANY IS NOT JUSTIFIED IN REDUC ING INTEREST AMOUNT RECEIVED BY IT ON FDRS FROM THE INT EREST EXPENSES WHICH ARE REQUIRED TO BE CAPITALIZED AS TH E FDRS ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 40 INTEREST HAS TO BE TREATED AS REVENUE RECEIPT AND C ANNOT BE CAPITALIZED. ON THE OTHER HAND, THE LD. ARS OF THE ASSESSEE COMPANY HAVE SUBMITTED THAT THE ASSESSEE COMPANY HA S CORRECTLY TREATED INTEREST INCOME AS CAPITAL RECEIP T. ON CAREFUL CONSIDERATION OF THE RIVAL CONTENTIONS, I A M OF THE OPINION THAT THERE IS NO FORCE IN THE ARGUMENTS OF THE ASSESSEE COMPANY ON THE ISSUE UNDER REFERENCE AS TH E FDR INTEREST HAS TO BE TREATED AS REVENUE RECEIPT AND C ANNOT BE TREATED AS CAPITAL RECEIPT. UNDER SUCH CIRCUMSTANCE S, THE ACTION OF THE ASSESSING OFFICER IN MAKING AN ADDITI ON OF RS.26,50,767/- BY TREATING FDR INTEREST AS REVENUE RECEIPT AS AGAINST TREATED BY THE ASSESSEE COMPANY AS CAPIT AL RECEIPT CANNOT BE SAID TO BE UNJUSTIFIED. 54. THE LD.COUNSEL FOR THE ASSESSEE, THEREFORE, CONTENDED THAT THE ADDITION SO MADE BE DELETED. THE LD. DR RELIED UPON THE ORDER OF THE CIT(A). 55. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND AL SO PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE FI ND MERIT IN THE CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE THAT THE LD.CIT(A) HAS PASSED A NON SPEAKI NG ORDER ON THE ISSUE WITHOUT DEALING WITH THE SUBMISSIONS MADE BY THE ASSESSEE. AS RIGHTLY POINTE D OUT, THE ASSESSEE WE FIND, HAD STATED THAT THE INTEREST INCOME HAD BEEN EARNED ON FUNDS RAISED FOR CAPITAL PURPOSES, I.E PROJECT DEVELOPMENT. BUT THE LD.CIT(A), WE FIND, WENT ON TO UPHOLD THE TREATMENT OF THE SAME AS BEING REVENUE IN NATURE, WITHOUT DEALIN G WITH THE SPECIFIC CONTENTIONS OF THE ASSESSEE. IN V IEW ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 41 OF THE SPECIFIC SUBMISSIONS MADE BY THE ASSESSEE, I T WAS INCUMBENT FOR THE LD.CIT(A) TO DEAL WITH THE SA ME AND DISMISS IT ONLY AFTER GIVING SUITABLE REASONS. CLEARLY THE ORDER PASSED BY THE LD.CIT(A) ON THE IS SUE IS A NON SPEAKING ORDER. WE, THEREFORE, CONSIDER IT FIT TO RESTORE THE MATTER BACK TO THE LD.CIT(A) TO DEAL WITH THE ISSUE AFRESH. THE LD.CIT(A) IS DIRECTED TO PASS A SPEAKING ORDER AFTER DEALING WITH THE SPECIF IC CONTENTION MADE BY THE ASSESSEE AFTER VERIFYING T HE FACTS STATED BY THE ASSESSEE. NEEDLESS TO ADD THAT THE ASSESSEE BE GIVEN REASONABLE OPPORTUNITY OF HEARING . IN VIEW OF THE ABOVE, THE GROUND OF APPEAL NO.4 RAI SED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . 56. GROUND OF APPEAL NO.5 RAISED BY THE ASSESSEE READS AS UNDER: 5. THAT THE CIT(A) WAS FURTHER NOT JUSTIFIED TO TR EAT A SUM OF RS.34,37,504/- RECEIVED AS MISC. INCOME AND INTEREST AS INCOME FROM OTHER SOURCES AND NOT A PAR T OF BUSINESS INCOME. 57. IT WAS COMMON GROUND THAT THE ISSUE RAISED IN THE PRESENT GROUND WAS IDENTICAL TO THAT RAISED I N GROUND NO.4 OF ASSESSES APPEAL PERTAINING TO A.Y 2007-08 IN ITA NO.1145/CHD/2016. OUR DECISION ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 42 RENDERED THEREIN AT PARA 36 WILL APPLY WITH EQUAL F ORCE TO THIS GROUND ALSO. ACCORDINGLY THE ISSUE IS RESTO RED BACK TO THE LD.CIT(A) AND HE IS DIRECTED TO ADJUDIC ATE THE SAME AFRESH IN ACCORDANCE WITH THE DIRECTIONS GIVEN IN GROUND NO. 4 OF ASSESSES APPEAL PERTAININ G TO A.Y 2007-08 IN ITA NO.1145/CHD/2016,DEALT WITH US ABOVE. GROUND OF APPEAL NO.5 IS ALLOWED FOR STATISTICAL PURPOSES. IN EFFECT THE APPEAL OF THE ASSESSEE IS ALLOWED F OR STATISTICAL PURPOSES. WE SHALL NOW TAKE UP THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2009-10 IN ITA NO.1147/CHD/2016. ITA NO.1147/CHD/2016: GROUND NO.1 RAISED BY THE ASSESSEE READS AS UNDER: 1. THAT ORDER PASSED U/S 250(6) OF THE INCOME TAX ACT, 1961 BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-4, LUDHIANA IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH AS HE WAS NOT JUSTIFIED TO ARBITRARILY UPHOLD ACTION OF THE LD. ASSESSING ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 43 OFFICER IN DISALLOWING A SUM OF RS. 73,95,429/- OUT OF INTEREST ACCOUNT ON ACCOUNT OF CAPITAL ADVANCES. 58. IT WAS COMMON GROUND THAT THE ISSUE RAISED IN THE IMPUGNED GROUND WAS IDENTICAL TO THAT RAISED GROUND NO.3 OF ASSESSEES APPEAL PERTAINING TO A.Y 2008-09 IN ITA NO.1146/CHD/2016. OUR DECISION RENDERED THEREIN AT PARA 48 WILL APPLY MUTATIS MUTANDIS TO THIS GROUND ALSO. ACCORDINGLY THE ISSUE IS RESTORED BACK TO THE LD.CIT(A) AND HE IS DIRECTED T O ADJUDICATE THE SAME AFRESH IN ACCORDANCE WITH THE DIRECTIONS GIVEN IN GROUND NO. 3 OF ASSESSES APPEA L PERTAINING TO A.Y 2008-09 IN ITA NO.1146/CHD/2016,DEALT WITH US ABOVE. THE GROUND OF APPEAL NO.1 IS ALLOWED FOR STATISTICAL PURPOSES. 59. GROUND NO.2 RAISED BY THE ASSESSEE READS AS UNDER: 2. THAT HE FURTHER GRAVELY ERRED IN UPHOLDING THE ACTION OF THE LD. ASSESSING OFFICER IN TREATING A S UM OF RS. 20,65,393/- RECEIVED AS MISC. INCOME AND RS. 64,82,547/- RECEIVED AS INTEREST AS INCOME FROM OTH ER SOURCES AND NOT AS INCOME FROM BUSINESS. ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 44 60. IT WAS COMMON GROUND THAT THE ISSUE RAISED IN THE PRESENT GROUND WAS IDENTICAL TO THAT RAISED I N GROUND NO.4 OF ASSESSES APPEAL PERTAINING TO A.Y 2007-08 IN ITA NO.1145/CHD/2016. OUR DECISION RENDERED THEREIN AT PARA 36 WILL APPLY WITH EQUAL F ORCE TO THIS GROUND ALSO. ACCORDINGLY THE ISSUE IS RESTO RED BACK TO THE LD.CIT(A) AND HE IS DIRECTED TO ADJUDIC ATE THE SAME AFRESH IN ACCORDANCE WITH THE DIRECTIONS GIVEN IN GROUND NO. 4 OF ASSESSES APPEAL PERTAININ G TO A.Y 2007-08 IN ITA NO.1145/CHD/2016,DEALT WITH US ABOVE. GROUND OF APPEAL NO.2 IS ALLOWED FOR STATISTICAL PURPOSES. IN EFFECT THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 61. WE SHALL NOW TAKE UP THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2012-13 IN ITA NO.1148/CHD/2016. ITA NO.1148/CHD/2016: ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 45 62. GROUND OF APPEAL NO.1 RAISED BY THE ASSESSEE READS AS UNDER: 1. THAT ORDER PASSED U/S 250(6) OF THE INCOME TAX ACT, 1961 BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-4, LUDHIANA IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH AS HE WAS NOT JUSTIFIED TO ARBITRARILY UPHOLD ACTION OF THE LD. ASSESSING OFFICER IN DISALLOWING A SUM OF RS.18,04,865/- OUT OF INTEREST ACCOUNT ON ACCOUNT OF CAPITAL ADVANCES. 63. IT WAS COMMON GROUND THAT THE ISSUE RAISED IN THE IMPUGNED GROUND WAS IDENTICAL TO THAT RAISED GROUND NO.3 OF ASSESSEES APPEAL PERTAINING TO A.Y 2008-09 IN ITA NO.1146/CHD/2016. OUR DECISION RENDERED THEREIN AT PARA 48 WILL APPLY MUTATIS MUTANDIS TO THIS GROUND ALSO. ACCORDINGLY THE ISSUE IS RESTORED BACK TO THE LD.CIT(A) AND HE IS DIRECTED T O ADJUDICATE THE SAME AFRESH IN ACCORDANCE WITH THE DIRECTIONS GIVEN IN GROUND NO. 3 OF ASSESSES APPEA L PERTAINING TO A.Y 2008-09 IN ITA NO.1146/CHD/2016,DEALT WITH US ABOVE. THE GROUND OF APPEAL NO.1 IS ALLOWED FOR STATISTICAL PURPOSES. 64. GROUND NO.2 RAISED BY THE ASSESSEE READS AS UNDER: ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 46 2. THAT HE WAS FURTHER NOT JUSTIFIED TO UPHOLD AC TION OF THE LD. ASSESSING OFFICER IN MAKING AN ADDITION OF RS.62,305/- ON ACCOUNT OF PROVISIONS FOR DOUBTFUL DEBTS FOR THE PURPOSE OF CALCULATION OF BOOK PROFITS U/S 115JB. 65. THE ABOVE GROUND WAS NOT PRESSED BY THE LD.COUNSEL FOR THE ASSESSEE. THE SAME IS THEREFORE DISMISSED AS NOT PRESSED. IN EFFECT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. WE SHALL NOW TAKE UP THE APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2010-11IN ITA NO.62/CHD/2017. ITA NO.62/CHD/2017: 66. GROUND OF APPEAL NO.1 RAISED BY THE ASSESSEE READS AS UNDER: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS RIGHTLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER OF RS.5,84,745/- (579664+5081) ON ACCOUNT O F DELAYED PAYMENT OF EPF AND PUNJAB WELFARE FUND RESPECTIVELY ESPECIALLY WHEN AS PER SECTION 36 (1) (VA) OF THE ACT, SUCH PAYMENTS SHOULD BE MADE ON OR BEFORE THE DUE DATE OF PAYMENT AND MEANING OF DUE DATE HAS BEEN MADE TO UNDERSTAND BY WAY OF EXPLANATION GIVEN BELOW THE SECTION 36(1) (VA) OF T HE I.T. ACT. 1961. 67. THE ABOVE GROUND RELATES TO THE ISSUE OF DISALLOWANCE MADE BY THE AO ON ACCOUNT OF DELAYED ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 47 PAYMENT OF EPF, AS PER SECTION 36(1)(VA) OF THE ACT , WHICH WAS DELETED BY THE LD.CIT(A). DURING ASSESSMENT PROCEEDINGS, THE AO NOTED THAT THE ASSESSEE HAD DELAYED THE DEPOSIT OF PAYMENT OF EMPLOYEES CONTRIBUTION TO EPF AMOUNTING IN TO RS.5,84,745/- REFERRING TO THE PROVISIONS OF SECTIO N 36(1)(VA) OF THE ACT, WHICH MANDATED THE PAYMENT OF THE SAME TO BE MADE BEFORE THE DUE DATE, FOR ALLOWANCE OF SAID CONTRIBUTION, THE AO MADE DISALLOWANCE OF THE SAID CONTRIBUTION. THE LD.CIT( A) ALLOWED THE CLAIM OF THE ASSESSEE RELYING UPON THE DECISION OF THE I.T.A.T. IN THE CASE OF THE ASSESSE E ITSELF FOR ASSESSMENT YEAR 2002-03. THE LD. CIT(A) NOTED THAT WHILE GIVING THIS DECISION THE I.T.A.T. HAD FOLLOWED THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. M/S RAI AGRO INDUSTRIES LTD., 334 ITR 122 (P&H). ACCORDINGLY HE DELETED THE DISALLOWANCE MADE BY THE AO. THE RELEVA NT FINDINGS OF THE LD.CIT(A) AT PARA 7.2 OF HIS ORDER ARE AS UNDER: 7.2 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSE SSING OFFICER AS MADE BY HIM IN THE ASSESSMENT ORDER WHIL E MAKING IMPUGNED ADDITION/DISALLOWANCE. I HAVE ALSO CONSIDE RED WRITTEN SUBMISSIONS FILED BY THE ASSESSEE COMPANY VIDE LETT ER DATED ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 48 20.10.2016 ON THE ISSUE UNDER REFERENCE. I HAVE FUR THER CONSIDERED VARIOUS JUDICIAL PRONOUNCEMENTS RELIED U PON BY THE ASSESSEE AS WELL AS THE OTHER MATERIAL PLACED BY TH E ASSESSEE COMPANY ON RECORD. ON CAREFUL CONSIDERATION OF THE ASSESSMENT ORDER, IT HAS BEEN NOTICED THAT THE ASSESSING OFFIC ER HAS MADE THE IMPUGNED ADDITION AS THE PAYMENTS IN RESPECT OF EMPLOYEE'S CONTRIBUTION TO EPF AND OTHER WELFARE FU NDS HAVE NOT BEEN MADE BY THE ASSESSEE COMPANY WITHIN DUE DATE. ON THE OTHER HAND, THE LD. AR OF THE ASSESSEE HAS SUBMITTE D THAT AN IDENTICAL ISSUE HAS BEEN DECIDED BY THE HONOURABLE JURISDICTIONAL ITAT IN FAVOUR OF THE ASSESSEE VIDE ITS ORDER IN IT A NO. 915/CHD/2009 DATED 20.01.2014 [A.Y. 2002-03] IN THE CASE OF THE ASSESSEE COMPANY ITSELF. IT HAS ALSO BEEN SUBMI TTED THAT WHILE GIVING DECISION IN FAVOUR OF THE ASSESSEE COM PANY, THE HONOURABLE JURISDICTION ITAT HAS FOLLOWED THE DECIS ION OF THE HONOURABLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. M/S RAI AGRO INDUSTRIES LTD. 334 ITR 122 (P&H). IT HAS FURTHER BEEN SUBMITTED THAT THE ISSUE UNDER REFEREN CE IS SQUARELY COVERED BY THE DECISION OF THE HONOURABLE PUNJAB & HARYANA HIGH COURT IN THE CASE REPORTED AT 334 ITR 122 (P&H). ON CAREFUL CONSIDERATION OF THE RIVAL CONTENTIONS, I AM OF THE OPINION THAT THERE IS A LOT OF FORCE IN THE ARGUMEN TS OF THE LD. AR ASSESSEE COMPANY ON THE ISSUE UNDER REFERENCE. AS A N IDENTICAL ISSUE STANDS DECIDED IN FAVOUR OF THE ASS ESSEE COMPANY IN ITS OWN CASE FOR THE A.Y. 2002-03 BY THE HONORABLE JURISDICTION ITAT FOLLOWING THE DECISION OF HONOURABLE JURISDICTIONAL HIGH COURT, I AM HAVING N O HESITATION IN HOLDING THAT THE ACTION OF THE ASSESS ING OFFICER IN MAKING AN ADDITION OF RS.5,84,745/- IN THIS CASE ON ACCOUNT OF DELAYED PAYMENTS IN RESPECT OF EMPLOYEE'S CONTRI BUTION TO EPF AND OTHER WELFARE FUNDS CANNOT BE SAID TO BE J USTIFIED. 68. BEFORE US THE LD. DR RELIED UPON THE ORDER OF T HE AO, WHILE THE LD.COUNSEL FOR THE ASSESSEE RELIED UP ON THE ORDER OF THE LD.CIT(A). 69. WE HAVE HEARD BOTH THE PARTIES. WE HAVE ALSO GONE THROUGH THE ORDER OF THE LD.CIT(A). WE HAVE NOTED THAT THE LD.CIT(A) DELETED THE DISALLOWANCE ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 49 MADE BY THE AO OF DELAYED PAYMENT OF EMPLOYEES CONTRIBUTION TO EPF, FOLLOWING THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT ON IDENTICAL ISSU E IN THE CASE OF M/S RAI AGRO INDUSTRIES LTD. (SUPRA) , WHICH IN TURN WAS FOLLOWED BY THE I.T.A.T. IN THE C ASE OF THE ASSESSEE ALSO FOR ASSESSMENT YEAR 2002-03 IN ITA NO.915/CHD/2009 DATED 20.1.2014. THE LD. DR HAS BEEN UNABLE TO POINT OUT ANY DISTINGUISHING FAC T IN THE PRESENT CASE FROM THE SAID DECISION RELIED U PON BY THE LD.CIT(A), NOR HAS HE BEEN ABLE TO BRING TO OUR KNOWLEDGE ANY SUBSEQUENT DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT OR HON'BLE APEX COURT DECIDING THE ISSUE AGAINST THE ASSESSEE. WE, THEREF ORE, HAVE NO HESITATION IN UPHOLDING THE ORDER OF THE CIT(A) IN DELETING THE DISALLOWANCE MADE OF THE EMPLOYEES CONTRIBUTION TO EPF AMOUNTING TO RS.5,84,745/-. THE GROUND OF APPEAL NO.1 RAISED BY THE REVENUE IS, THEREFORE, DISMISSED. 70. GROUND OF APPEAL NOS.2 & 3 RAISED BY THE REVENU E READS AS UNDER: II. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO VERIFY ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 50 AND ALLOW THE CLAIM OF THE ASSESSEE UNDER SECTION 4 3B OF THE ACT FOR RS.77,70,917/- AND THEREBY TREATING THE ASSESSEE'S APPEAL ALLOWED FOR STATISTICAL PURPOSE. III. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS JUSTIFIED IN NOT DECIDING THE ISSUE OF CLAIM UNDER SECTION 43B OF THE I.T. ACT. 1961 AT RS.77,70,917/- ON MERITS. 71. THE ABOVE GROUNDS, IT WAS CONTENDED, RELATE TO THE SAME ISSUE OF DISALLOWANCE MADE OF RS.77,70,917/- U/S 43B OF THE ACT. THE AO DURING TH E ASSESSMENT PROCEEDINGS HAD NOTED THAT THE ASSESSEE FILED A REVISED RETURN FOR THE YEAR AND CLAIMED THE REIN INTEREST OF EARLIER YEAR TO THE EXTENT OF RS.77,70, 917/- ON BEING ASKED TO JUSTIFY HIS CLAIM, THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT THE SAID INTEREST H AD BEEN PAID TO BANK AND CLAIMED ON PAYMENT BASIS AS PER THE PROVISIONS OF SECTION 43B OF THE ACT. THE A O FOUND THAT NO EVIDENCE HAD BEEN FILED BY THE ASSESS EE TO SUBSTANTIATE ITS CLAIM AND ACCORDINGLY HE DISALLOWED THE CLAIM OF INTEREST SO MADE BY THE ASSESSEE. 72. BEFORE THE LD.CIT(A) THE ASSESSEE CONTENDED THA T THE IMPUGNED INTEREST EXPENSES HAD BEEN DISALLOWED IN EARLIER YEARS AND THAT THE ASSESSEE HAD BEEN ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 51 CLAIMING INTEREST EXPENSES ON PAYMENT BASIS SINCE ASSESSMENT YEAR 2006-07 AND HAD BEEN ALLOWED THE SAME EVEN IN ASSESSMENT YEAR 2011-12. THE LD.CIT(A) ON CONSIDERING THE CONTENTION OF THE ASSESSEE RESTO RED THE ISSUE TO THE AO TO VERIFY THE CLAIM. THE RELEVA NT FINDINGS OF THE CIT(A) AT PARA 8.2 OF HIS ORDER ARE AS UNDER: 8.2 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSE SSING OFFICER AS MADE BY HIM IN THE ASSESSMENT ORDER WHIL E TREATING BUSINESS INCOME AS INCOME FROM OTHER SOURCES. I HAV E ALSO CONSIDERED WRITTEN SUBMISSIONS FILED BY THE ASSESSE E COMPANY VIDE LETTER DATED 20.10.2014 ON THE ISSUE U NDER REFERENCE. I HAVE FURTHER CONSIDERED THE OTHER MATE RIAL PLACED BY THE ASSESSEE COMPANY ON RECORD. ON CAREFUL CONSI DERATION OF THE ASSESSMENT ORDER, IT HAS BEEN NOTICED THAT T HE ASSESSING OFFICER HAS MADE THE IMPUGNED ADDITION FOR WANT OF EVIDENCE AS THE ASSESSEE COMPANY COULD NOT SUBSTANTIATE ITS CLAIM MADE BY IT UNDER SECTION 43B OF THE ACT. ON THE OTH ER HAND, IT HAS BEEN SUBMITTED THAT THE CLAIM HAS BEEN MADE ON PAYMENT BASIS AS THE AMOUNT WAS DISALLOWED IN EARLIER YEARS AS PER PROVISIONS OF SECTION 43B OF THE ACT. IT HAS ALSO B EEN SUBMITTED THAT THE CLAIM OF THE ASSESSEE COMPANY IN RESPECT OF SIMILAR EXPENSES STANDS ALLOWED IN A.Y. 2011-12 UNDER SIMILAR FACTS AND IN THE CIRCUMSTANCES OF THE CASE. IN SUPPORT OF ITS CLAIM, COPY OF ASSESSMENT ORDER FOR THE A.Y. 2011-12 HAS BEEN FILED WHICH HAS ALSO BEEN PLACED ON RECORD . ON CAREFUL CONSIDERATION OF THE RIVAL CONTENTIONS, I A M OF THE CONSIDERED OPINION THAT AS THE DISALLOWANCE HAS BEE N MADE FOR WANT OF EVIDENCE, THE ASSESSING OFFICER NEEDS O PPORTUNITY TO VERIFY THE CLAIM OF THE ASSESSEE COMPANY. THE AS SESSING OFFICER IS, THEREFORE, DIRECTED TO VERIFY THE CLAIM OF THE ASSESSEE COMPANY AND ALLOW THE SAME AFTER SATISFYING HIMSELF THAT NO SUCH CLAIM HAS BEEN MADE IN EARLIER YEARS EITHER ON PAYMENT OR ON ACCRUAL BASIS. THE ASSESSEE COMPANY IS ALSO D IRECTED TO PLACE THE NECESSARY EVIDENCE BEFORE THE ASSESSING O FFICER AS AND WHEN ASKED. IN THE RESULT, GROUND NO. 3 OF APPE AL TAKEN ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 52 BY THE ASSESSEE COMPANY IS TREATED AS ALLOWED FOR S TATISTICAL PURPOSES. 73. WE HAVE GONE THROUGH THE ORDER OF THE CIT(A) AN D DO NOT FIND ANY INFIRMITY IN THE SAME. AS RIGHTLY N OTED BY THE CIT(A) THE AO HAD DISALLOWED THE CLAIM FOR W ANT OF EVIDENCE. SINCE NECESSARY EVIDENCE HAD BEEN FILE D BEFORE THE CIT(A), THE CIT(A) HAD RIGHTLY RESTORED THE MATTER TO THE AO TO VERIFY THE CLAIM OF THE ASSESSE E. WE SEE NO REASON TO INTERFERE IN THE ORDER OF THE CIT(A). THE GROUND OF APPEAL NOS.2 AND 3 RAISED BY THE REVENUE ARE DISMISSED. 74. GROUND NO.4 RAISED BY THE REVENUE READS AS UNDE R: IV. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO ON MERITS THE LD. COMMISSIONER OF INCOME T AX (APPEALS) WAS JUSTIFIED IN DELETING THE ADDITION TO BOOK PROFITS U/S 115.IB OF THE I.T. ACT ON ACCOUNT OF PROVISIONS FOR GRATUITY MADE BY THE ASSESSING OFFIC ER AT RS.29,01,546/-. 75. BRIEFLY STATED, THE AO, WHILE CALCULATING THE B OOK PROFITS OF THE ASSESSEE FOR THE PURPOSE OF PAYING T HE MINIMUM ALTERNATE TAX (MAT) AS PER THE PROVISIONS O F SECTION 115JB OF THE ACT, HAD ADDED BACK THE PROVIS ION MADE FOR GRATUITY AMOUNTING TO RS.29,01,546/- TO TH E BOOK PROFITS OF THE ASSESSEE. THE ASSESSEE CHALLENGED TH E SAME BEFORE THE LD.CIT(A), WHO HELD THAT THE ISSUE WAS S QUARELY ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 53 COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF DCIT VS. INOX LEISURE LTD, REPORTED IN 352 ITR 314. ACCORDINGLY, THE ADJUSTMENT MADE BY THE AO OF PROVISION FOR GRATUITY WAS SET ASIDE BY THE CIT(A). 76. BEFORE US THE LD. DR WAS UNABLE TO POINT OUT A NY INFIRMITY IN THE ORDER OF THE LD.CIT(A) . THE LD. D R WAS UNABLE TO DISTINGUISH THE FACTS OF THE PRESENT CASE WITH THAT OF THE HON'BLE GUJARAT HIGH COURT RELIED UPON BY TH E LD.CIT(A) WHILE ALLOWING ASSESSEES CLAIM. FURTHER NO DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT O R OF THE HON'BLE APEX COURT WAS CITED BEFORE US UPHOLDING TH E REVENUES STAND THAT THE PROVISION FOR GRATUITY WAS TO BE ADDED BACK TO THE NET PROFIT FOR CALCULATING BOOK P ROFITS OF THE ASSESSEE U/S 115JB OF THE ACT. IN VIEW OF THE A BOVE, GROUND OF APPEAL NO.4 RAISED BY THE REVENUE IS DISM ISSED. IN EFFECT, THE APPEAL OF THE REVENUE IS DISMISSED. 77. IN THE RESULT; I) THE APPEAL OF THE ASSESSEE IN ITA NO.241/CHD/2017 IS PARTLY ALLOWED. II) THE APPEALS OF THE ASSESSEE IN ITA NO.1145/CHD/2017 AND ITA NO.1148/CHD/2017 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.214/CHD/2017 A. Y. 2004-05 ITA NOS.1145 TO 1148/CHD/2016 A.YS. 2007-08 TO 200 9-10 & 2012-13 ITA NO.62/CHD/2017 A.Y. 2010-11 54 III) THE APPEALS OF THE ASSESSEE IN ITA NO.1146/CHD/2017 AND ITA NO.1147/CHD/2017 ARE ALLOWED FOR STATISTICAL PURPOSES. IV) THE APPEAL OF THE REVENUE IN ITA NO.62/CHD/2016 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- !'# & ' ( ) * (DIVA SINGH) (ANNAPURNA GUPTA) $ !% /JUDICIAL MEMBER +, !% /ACCOUNTANT MEMBER &' /DATED: 30 TH AUGUST, 2019 * * &) *+,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' - / CIT 4. ' - ( )/ THE CIT(A) 5. +./ 0 , $0 , 123/4 / DR, ITAT, CHANDIGARH 6. /35# / GUARD FILE &) ' / BY ORDER, / ASSISTANT REGISTRAR