Eveready Industries India Ltd., Kolkata V. DCIT, Circle - 11(1), Kolkata, Kolkata

ITA 655/KOL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4714 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 10-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: D S DAMLE
• Keywords: Capital asset; Depreciation; Additional depreciation; Corroborative evidences; Competent authority; Assessment record; TDS
• Section: 37; 263; 143(3); 14A; 115JB; 40(a)(ia)

Judgement Text

ITA NO. 655/KOL/2018 A.Y. 2012-2013 EVEREADY INDUSTRIES INDIA LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 655/KOL/2018 ASSESSMENT YEAR: 2012-2013 EVEREADY INDUSTRIES INDIA LIMITED,................. ...............................APPELLANT 1, MIDDLETON STREET, KOLKATA-700 071 [PAN: AAACE 5778 N] -VS.- DEPUTY COMMISSIONER OF INCOME TAX,................. ..........................RESPONDENT CIRCLE-11(1), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 APPEARANCES BY: SHRI D.S. DAMLE, FCA, FOR THE APPELLANT SHRI DEVI SHARAN SINGH, CIT, D.R. , FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : NOVEMBER 26, 2018 DATE OF PRONOUNCING THE ORDER : FEBRUARY 13, 2019 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ):- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. PRINCIPAL COMMISSIONER OF INCOME TAX, KOLKATA-4, KO LKATA DATED 29.03.2018 PASSED UNDER SECTION 263 OF THE INCOME T AX ACT, 1961. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF DRY CELL BA TTERIES, FLASH-LIGHTS, ETC. AND ALSO IN THE MANUFACTURE AND SALE OF TEA. T HE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 29. 09.2012 DECLARING A LOSS OF RS.8,29,07,711/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR ITA NO. 655/KOL/2018 A.Y. 2012-2013 EVEREADY INDUSTRIES INDIA LIMITED 2 SCRUTINY AND IN THE ASSESSMENT COMPLETED UNDER SECT ION 143(3) READ WITH SECTION 144C(3) OF THE ACT VIDE AN ORDER DATED 15.0 3.2016, THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE ASSESS ING OFFICER AT A LOSS OF RS.6,27,68,848/- AFTER MAKING THE FOLLOWING ADDI TIONS:- (I) T.P. ADJUSTMENT RS.1,96,77,739/ - (II) DISALLOWANCE U/S 40(A)(IA) RS. 3,00,000/ - (III) DISALLOWANCE U/S. 40A(9) RS. 1,61,124/ - THE RECORD OF THE ASSESSMENT COMPLETED BY THE ASSES SING OFFICER UNDER SECTION 143(3) READ WITH SECTION 144C(3) OF THE ACT WAS EXAMINED BY THE LD. PRINCIPAL CIT, KOLKATA-4, KOLKATA. ON SUCH EXAM INATION, HE WAS OF THE VIEW THAT THERE WERE FOLLOWING ERRORS IN THE SAID A SSESSMENT, WHICH WERE PREJUDICIAL TO THE INTEREST OF THE REVENUE:- (I) IT IS NOTICED THAT THE DETAILS OF MISCELLANEOU S EXPENSES (NOTE 23 OF P&L ACCOUNT) ASSESSEE COMPANY ARE GIVEN , WHICH INDICATE 'SHARE ISSUE EXPENSES 'AND 'STAMP FEE/REGI STRATION'. BOTH BEING CAPITAL IN NATURE (REF. PUNJAB STATE IND USTRIAL DEVELOPMENT CORPN. LTD., [1997) 93 TAXMAN 5 (SC), B ERGER PAINTS INDIA LTD., [2017/ 79 TAXMAN.COM 450 (SC), G RUH- FINANCE LTD.. [2016} 72 TAXMAN.COM 48 (AHMEDABAD - TRIB.) ETC.) SHOULD HAVE BEEN ADDED BACK. (II) THE DETAILS OF LIABILITIES & PROVISIONS NO LON GER REQUIRED. APART FROM PROVISION FOR DISPUTED TAX OF RS.3.22 CR S, NONE OF THE OTHER ITEMS WAS ADDED BACK, ENQUIRE & EXAMINATI ON IN THIS REGARD IS TO BE NEEDED. (III) AGAIN NO DISALLOWANCE U/S 14A OF THE ACT WAS MADE AS THE NO DIVIDEND WAS RECEIVED, WHICH VIOLATES DEPARTMENT AL CIRCULAR NO. 5/2014 [F. NO. 225/182/2013-ITA-II]. F URTHER, FRESH SHARES WERE PURCHASED AS APPARENT FROM NOTE 1 2 OF BALANCE SHEET. (IV) THE 'EXCEPTIONAL ITEM' OF RS.1.84 CRS AT NOTE- 24 OF P&L ACCOUNT. AS VRS PAYMENT AS REFERRED HAS ALREADY BEE N ALLOWED U/S.35DDA OF THE ACT, ADDITIONAL CLAIM UNDER THIS H EAD APPEARS TO BE IRREGULAR. IF SUCH PAYMENT IS TERMED AS PAYMENT OF SUPERANNUATION, IT IS COVERED U/S. 36(1)(IV) OF THE ACT AND AVAILED BY ASSESSEE. ANY SUPPLEMENTARY CLAIM IN THI S REGARD IS NOT ALLOWABLE EVEN U/S 37 OF THE ACT AS THE SAID SE CTION STARTS WITH NON OBSTANTE CLAUSE 'ANY EXPENDITURE OF THE NA TURE DESCRIBED IN SECTION 30 TO 36 '. ITA NO. 655/KOL/2018 A.Y. 2012-2013 EVEREADY INDUSTRIES INDIA LIMITED 3 (V) TAR AT CLAUSE 13(D)(III) REFERS TO CREATION FOR EIGN TRANSLATION RESERVE. NOTE 4(F) OF BALANCE SHEET CON FIRMS IT. SOURCE OF CREATION OF SUCH RESERVE NOT ENQUIRED INT O. FURTHER, AS PER (B) OF EXPLANATION 1 OF SECTION 115JB OF THE ACT ANY SUCH CLAIM IS SUPPOSED TO BE ADDED BACK. (VI) TAR AT CLAUSE 15(A) INDICATES THAT ON ACCOUNT OF SCIENTIFIC RESEARCH, RELATED REVENUE EXPENSES WERE CLAIMED IN THE P&L ACCOUNT TWICE, ONCE RS.2.57 CRS. AS SUCH AND AGAIN RS.1.73 CRS U/S 35(J)(I) OF THE ACT. PROPER VERIFICATION WAS NO T DONE. (VII) TAR AT CLAUSE 15(A) INDICATES THAT U/S. 35(2A B) OF THE ACT RS.1.68 CRS WAS CLAIMED IN THE P&L ACCOUNT. SAM E CLAIM WAS MADE AGAIN IN THE COMPUTATION OF INCOME AND PRO FIT WAS REDUCED. (VIII)TAR AT CLAUSE 15(A) AND COMPUTATION OF INCOME INDICATES THAT SIMILAR CLAIMS U/S 35DD AND 35DDA OF THE ACT W ERE MADE TWICE BY THE ASSESSEE. (IX) NOTE 23 OF P&L ACCOUNTS INDICATE PROVISION FOR INDIRECT TAXES CLAIM OF RS.1.25 CRS. ASCERTAIN ABILITY OF TH IS PROVISION WAS NOT QUESTIONED. (X) INTEREST FREE LOANS TO SUBSIDIARY (DOUBTFUL ADV ANCES) WERE GIVEN AS PER NOTE 9(III), 13, 25.3 AND 25.15B. NO RATIONALE BEHIND SUCH AN ACTION WAS QUESTIONED. (XI) FOREIGN CURRENCY TRANSACTION LOSS NOTE 22(C) & 23 NOT VERIFIED AS PER PROVISION OF SECTION 43 OF THE ACT. (XII) RECEIPTS PER FROM 26AS VIS-A-VIS THOSE DISCLO SED IN THE ACCOUNTS WERE ALSO NOT CHECKED. THE LD. PRINCIPAL CIT ACCORDINGLY ISSUED A NOTICE U NDER SECTION 163 TO THE ASSESSEE ON 15.12.2017 REQUIRING IT TO SHOW-CAUSE A S TO WHY THE ASSESSMENT MADE BY THE ASSESSING OFFICER UNDER SECT ION 143(3) READ WITH SECTION 144C(3) DATED 15.03.2016 SHOULD NOT BE REVI SED ON THE POINTS RAISED BY HIM. IN REPLY, WRITTEN SUBMISSION WAS FIL ED BY THE ASSESSEE OFFERING ITS EXPLANATION ON EACH AND EVERY POINT RA ISED BY THE LD. PRINCIPAL CIT IN THE NOTICE ISSUED UNDER SECTION 26 3. THE SAID EXPLANATION OFFERED BY THE ASSESSEE WAS FOUND ACCEPTABLE BY THE LD. PRINCIPAL CIT IN RESPECT OF ERRORS NO. (I), (IV), (VI), (VIII), (IX) AND (X). AS REGARDS THE EXPLANATION OFFERED BY THE ASSESSEE IN RESPECT OF O THER ERRORS POINTED OUT ITA NO. 655/KOL/2018 A.Y. 2012-2013 EVEREADY INDUSTRIES INDIA LIMITED 4 BY HIM IN THE NOTICE ISSUED UNDER SECTION 263, THE LD. PRINCIPAL CIT DID NOT FIND THE SAME TO BE ACCEPTABLE FOR THE REASONS GIVEN IN HIS IMPUGNED ORDER. ACCORDING TO HIM, THE SAID ISSUES POINTED OU T BY HIM IN THE SHOW- CAUSE NOTICE ISSUED UNDER SECTION 263 REQUIRED FURT HER ENQUIRY AND VERIFICATION, WHICH THE ASSESSING OFFICER HAD FAILE D TO DO. HE ACCORDINGLY HELD THE ORDER PASSED BY THE ASSESSING OFFICER UNDE R SECTION 143(3) READ WITH SECTION 144C(3) ON THE SAID POINTS AS ERRONEOU S AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE AS PER E XPLANATION 2(C) BELOW SECTION 263(1) OF THE ACT AND SETTING ASIDE THE ORD ER OF THE ASSESSING OFFICER ON THE SAID POINTS, HE DIRECTED THE ASSESSI NG OFFICER TO MAKE THE ASSESSMENT AFRESH AFTER PROVIDING REASONABLE OPPORT UNITY TO THE ASSESSEE-COMPANY OF BEING HEARD. AGGRIEVED BY THE O RDER OF THE LD. PRINCIPAL CIT PASSED UNDER SECTION 263, THE ASSESSE E HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 3. GROUND NO. 1 RAISED BY THE ASSESSEE IN THIS APPE AL IS GENERAL WHILE GROUNDS NO. 2 & 3 READ AS UNDER:- (2) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE ASSESSMENT OF THE APPELLANT HAVING BEEN SELECTED FOR SCRUTINY UNDER CASS THE CIT COULD NOT CONSIDER THE ASSESSMENT ORDER TO BE ERRON EOUS IN SO FAR AS IT WAS PREJUDICIAL TO THE INTEREST OF THE REVENUE WITH REF ERENCE TO THE ISSUES FOR WHICH THE APPELLANT'S CASE WAS NOT SELECTED UNDER C ASS PARAMETERS. (3) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE AO HAVING CONDUCTED IN-DEPTH ENQUIRY WITH REFERENCE TO THE CASS SELECTION REASONS THE CIT WAS UNJUSTIFIED IN LAW AND ON FACTS IN EXERCISING HIS REVISIONARY JURISDICTION WITH REFERENCE TO ISSUES N OT COMING WITHIN THE AMBIT OF CASS. 4. IN SUPPORT OF THE ASSESSEES CASE ON THE ISSUE R AISED IN GROUNDS NO. 2 & 3, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AS PER CASS SELE CTION AND THE SCOPE OF THE SAID ASSESSMENT, THEREFORE, WAS LIMITED. HE INV ITED OUR ATTENTION TO PAGE NO. 131 OF THE PAPER BOOK TO POINT OUT THAT TH E REASONS GIVEN FOR SELECTION OF THE ASSESSEES CASE UNDER CASS WERE AS UNDER: CASS REASONS ITA NO. 655/KOL/2018 A.Y. 2012-2013 EVEREADY INDUSTRIES INDIA LIMITED 5 1. DEPRECIATION CLAIMED AT HIGHER RATES / HIGHER ADDIT IONAL DEPRECIATION 2. LOW INCOME SHOWN BY LARGE CONTRACTORS 3. LARGE REFUND CLAIM OF ADVANCE TAX 4. LARGE DEDUCTION U/S 35, 35{2AA), 35 (2AB) 5. HIGHER RATIO OF REFUND TO TDS 6. LARGE AMOUNT OF SUNDRY CREDITORS 7. LOW NET PROFIT OR LOSS SHOWN FROM LARGE GROSS RE CEIPTS REFERENCE OF OUR REPLY MADE DURING SCRUTINY ASSESSM ENT U/S 143(3) ON REASON FOR CASS AS ABOVE: CASS REASONS REFERENCE OF REPLY PAGE NO . OF PAPER BOOK 1.DEPRECIATION CLAIMED AT HIGHER RATES/ HIGHER ADDITIONAL DEPRECIATION POINT NO. 1 OF OUR LETTER DTD.18.11.15 AND POINT NO. 3 OF LETTER DTD.08.03.16 136 137 2.LOW INCOME SHOWN BY THE CONTRACTOR NOT APPLICABLE FOR EIIL 3.LARGE REFUND CLAIMED OF ADVANCE TAX POINT NO. 3 OF OUR LETTER 140 DTD.21.12.15 140 4.LARGE DEDUCTION U/S 35, 35(2AA) & 35(2AB) . POINT NO. 2 OF OUR LETTER DTD.18.11.15 AND POINT NO. 2 OF 08.03.16 136 & 137 5.HIGH RATIO OF REFUND TO TDS POINT NO. 6 OF OUR LETTER DATED 08.03.2016 138 6.LARGE AMOUNT OF SUNDRY CREDITORS POINT NO. 5 OF OUR LETTER DATED 08.03.2016 138 7.LOW NET PROFIT OR LOSS SHOWN FROM LARGE GROSS RECEIPTS POINT NO. 3 & 5 OF OUR LETTER DTD.21.12.15 AND POINT NO.4 OF LETTER DTD.08.03.16 138 & 140 HE CONTENDED THAT ALL THESE SEVEN ISSUES WERE DULY CONSIDERED AND EXAMINED BY THE ASSESSING OFFICER, BUT THE LD. PRIN CIPAL CIT RAISED ALTOGETHER NEW TWELVE ISSUES IN THE NOTICE ISSUED U NDER SECTION 263, WHICH IS NOT PERMISSIBLE. HE CONTENDED THAT OUT OF THE SAID TWELVE ISSUES RAISED BY THE LD. PRINCIPAL CIT, ONLY ONE ISSUE WAS OF CASS SELECTION WHILE OTHER ISSUES WERE NOT COVERED BY CASS. HE INVITED O UR ATTENTION TO THE LETTER DATED 04.11.2015 ISSUED BY THE ASSESSING OFF ICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO POINT OUT THAT SPECIFI C QUERIES WERE RAISED ITA NO. 655/KOL/2018 A.Y. 2012-2013 EVEREADY INDUSTRIES INDIA LIMITED 6 BY THE ASSESSING OFFICER, WHICH WERE DULY CLARIFIED BY THE ASSESSEE BY FILING A WRITTEN SUBMISSION. RELYING ON THE DECISIO N OF THE TRIBUNAL IN THE CASE OF SANJIV KUMAR KHEMKA VS.- PCIT-15 (ITA NO. 1361/KOL/2016 DATED 02.06.2017) HE CONTENDED THAT THE LD. PRINCIP AL CIT CANNOT GO BEYOND THE CASS POINTS AND REVISE THE ASSESSMENT UN DER SECTION 263 ON THE POINTS, WHICH WERE BEYOND CASS. 5. THE LD. D.R., ON THE OTHER HAND, SUBMITTED THAT ALL CASES ARE SELECTED FOR SCRUTINY UNDER CASS, SOME FOR LIMITED SCRUTINY AND OTHERS FOR REGULAR ASSESSMENT. HE CONTENDED THAT THERE IS NOTHING IN T HE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3 ) READ WITH SECTION 144C(5) TO INDICATE THAT THE CASE OF THE ASSESSEE W AS SELECTED FOR LIMITED SCRUTINY. HE INVITED OUR ATTENTION TO THE LETTER D ATED 04.11.2015 ISSUED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSES SMENT PROCEEDINGS (COPY AT PAGE NO. 133 OF THE PAPER BOOK) TO SHOW TH AT QUERIES WERE RAISED BY THE ASSESSING OFFICER ON VARIOUS ISSUES OVER AND ABOVE THE SEVEN ISSUES STATED TO BE RAISED FOR LIMITED SCRUTINY UND ER CASS. HE CONTENDED THAT THESE QUERIES RAISED BY THE ASSESSING OFFICER CLEARLY SHOW THAT THE CASE OF THE ASSESSEE WAS NOT SELECTED FOR LIMITED S CRUTINY AND IT WAS A CASE OF REGULAR ASSESSMENT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ALTHOUGH THE LD. COUNSEL FOR THE ASSESSEE BY RELYING ON THE CASS REASONS GIVEN ON PA GE NO. 131 HAS CONTENDED THAT THE CASE OF THE ASSESSEE WAS SELECTE D FOR LIMITED SCRUTINY, THE LETTER DATED 04.11.2015 ISSUED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS CLEARLY SHOWS THAT QUERIES WERE RAISED BY HIM ON VARIOUS ISSUES OVER AND ABOVE THE SAID SE VEN ISSUES. AS RIGHTLY CONTENDED BY THE LD. D.R., THERE IS NOTHING IN THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) READ WITH SECTION 144C(5) TO INDICATE THAT THE CASE OF THE ASSESSEE WAS SELEC TED FOR LIMITED SCRUTINY. ON THE OTHER HAND, THE FACT THAT THE ADDITIONS WERE MADE BY THE ASSESSING ITA NO. 655/KOL/2018 A.Y. 2012-2013 EVEREADY INDUSTRIES INDIA LIMITED 7 OFFICER IN THE SAID ASSESSMENT ON ACCOUNT OF T.P. A DJUSTMENT, DISALLOWANCE UNDER SECTION 40(A)(IA) AND DISALLOWANCE UNDER SECT ION 40A(9) CLEARLY SHOWS THAT THE CASE OF THE ASSESSEE WAS NOT SELECTE D FOR A LIMITED SCRUTINY AND IT WAS A CASE OF REGULAR ASSESSMENT. WE, THEREF ORE, FIND NO MERIT IN THE CASE OF THE ASSESSEE ON THIS ISSUE AND REJECTIN G THE SAME, WE DISMISS GROUNDS NO. 2 & 3. 7. GROUNDS NO. 4 & 5 RAISED BY THE ASSESSEE IN THIS APPEAL READ AS UNDER:- (4) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, AND WITHOUT PREJUDICE TO THE PRECEDING GROUNDS THE CIT WAS UNJU STIFIED IN LAW IN PASSING THE IMPUGNED ORDER U/S 263 SETTING ASIDE TH E ASSESSMENT WITH REFERENCE TO 6 SPECIFIC ISSUES FOR CONDUCTING ENQUI RY AFRESH WITHOUT ESTABLISHING AS TO HOW THE ASSESSMENT ORDER WAS ERR ONEOUS EVEN THOUGH THE APPELLANT HAD FURNISHED SPECIFIC REPLIES AND FA CTS TO SUBSTANTIATE THAT THE ASSESSMENT ORDER WAS NOT ERRONEOUS. (5) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE CIT HAVING ISSUED THE SHOW CAUSE NOTICE POINTING OUT SPECIFIC INSTANCES OF ERRORS COMMITTED BY THE AO AND THEREAFTER THE APPELLANT HA VING FURNISHED HIS EXPLANATIONS TO PROVE THAT NO ERROR WAS COMMITTED B Y THE AO, CIT WAS UNJUSTIFIED IN SETTING ASIDE THE ASSESSMENT REQUIRI NG THE AO TO RE-VERIFY THE FACTS WITHOUT POINTING OUT ANY SPECIFIC INFIRMITY E ITHER IN THE EXPLANATIONS FURNISHED OR THE AO'S ORDER. 8. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES ON THE ISSUE RAISED IN GROUNDS NO. 4 & 5 AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LIMITED CONTENTION RAISED BY THE LD. CO UNSEL FOR THE ASSESSEE ON THIS ISSUE IS THAT THE LD. PRINCIPAL CIT HAS NOT GIVEN ANY REASON OR BASIS FOR NOT ACCEPTING THE EXPLANATION OF THE ASSESSEE B EFORE HOLDING THE ORDER OF THE ASSESSING OFFICER TO BE ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. AS RIGHTLY CONTENDED BY TH E LD. D.R. IN THIS REGARD, TOTAL TWELVE POINTS WERE RAISED BY THE LD. PRINCIPA L CIT IN THE NOTICE ISSUED UNDER SECTION 263 AND THE EXPLANATION OF THE ASSESSEE ON SIX POINTS WAS ACCEPTED BY HIM. AS REGARDS THE REMAININ G SIX POINTS, THE ITA NO. 655/KOL/2018 A.Y. 2012-2013 EVEREADY INDUSTRIES INDIA LIMITED 8 EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTED BY THE LD. PRINCIPAL CIT AND THAT TOO FOR THE REASONS GIVEN IN HIS IMPUGNED ORDE R. WE, THEREFORE, FIND NO MERIT IN GROUNDS NO. 4 & 5 RAISED BY THE ASSESSE E AND DISMISS THE SAME. 9. THE GROUNDS NO. 6 & 7 RAISED BY THE ASSESSEE IN THIS APPEAL READ AS UNDER:- (6) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT WAS UNJUSTIFIED IN CONSIDERING THE ASSESSMENT TO BE ERR ONEOUS ON ACCOUNT OF LACK OF ENQUIRY IN RELATION TO PROVISION FOR LIABIL ITY WRITTEN BACK EVEN THOUGH IT WAS ESTABLISHED BEFORE HIM THAT NONE OF T HE LIABILITIES WRITTEN BACK AND CREDITED IN THE PROFIT & LOSS A/C WERE EXC LUDED FROM THE AMBIT OF THE ASSESSED TOTAL INCOME BY THE AO. (7) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT WAS UNJUSTIFIED IN HOLDING THE ASSESSMENT TO BE ERRONEO US FOR NON FURNISHING OF ALLEGED RECONCILIATION EVEN THOUGH IT WAS APPARENT FROM THE AUDITED ACCOUNTS THAT NONE OF THE PROVISIONS WRITTEN BACK I N THE PROFIT & LOSS A/C WERE EXCLUDED BY THE AO FROM THE AMBIT OF ASSESSED TOTAL INCOME. 10. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SECOND ISSUE RAISED BY THE LD. PRINCIPAL CIT IN THE NOTICE UNDER SECTION 263 WAS THAT THE DETAILS OF LIABILITIES AND PROVISIONS NO LONGER REQUIRED WERE NOT PROPERLY EXAMINED BY THE ASSESSING OFFICER AND APAR T FROM PROVISIONS FOR DISPUTED TAX OF RS.3.22 CRORES, NONE OF THE OTHER I TEMS WAS ADDED BACK. HE INVITED OUR ATTENTION TO THE LETTER DATED 04.11. 2015 ISSUED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS TO SHOW THAT SPECIFIC QUERY WAS RAISED BY THE ASSESSING OFF ICER ASKING THE ASSESSEE TO RECONCILE THE DIFFERENCE BETWEEN THE AM OUNT CREDITED TO THE PROFIT & LOSS ACCOUNT AS PROVISION NO LONGER REQUIR ED WRITTEN BACK AND THE CORRESPONDING AMOUNT REFLECTED IN THE TAX AUDIT REPORT. HE ALSO INVITED OUR ATTENTION TO THE REPLY FILED BY THE ASS ESSEE BEFORE THE ASSESSING OFFICER, WHEREIN FOLLOWING EXPLANATION WA S OFFERED BY THE ASSESSEE:- (1) LIABILITY NO LONGER REQUIRED WRITTEN BACK AND CREDITED TO THE STATEMENT OF PROFIT AND LOSS = RS.1,78,88,98 7/- ITA NO. 655/KOL/2018 A.Y. 2012-2013 EVEREADY INDUSTRIES INDIA LIMITED 9 (2) PROVISION NO LONGER REQUIRED WRITTEN BACK AND C REDITED TO THE STATEMENT OF PROFIT AND LOSS RS.5,86,12,638/ -. OUT OF THE SAID AMOUNT RS.2,99,40,465/- WAS DEBITED TO REVALUATION RESERVE IN ACCORDANCE WITH THE SCHEME O F ARRANGEMENT DATED 17.01.2005 SANCTIONED BY THE HON BLE HIGH COURT AT KOLKATA WITH EFFECT FROM 01.04.2004 A ND WAS NOT DEBITED TO THE STATEMENT OF PROFIT AND LOSS IN F.Y. 2004-05. HE ALSO INVITED OUR ATTENTION TO THE RELEVANT DETAI LS FURNISHED BY THE ASSESSEE DURING THE COURSE OF REVISION PROCEEDINGS BEFORE THE LD. PRINCIPAL CIT PLACED AT PAGE NO. 160 AND CONTENDED THAT BOTH THE FIGURES OF LIABILITY NO LONGER REQUIRED WRITTEN BACK AND PR OVISION NO LONGER WRITTEN BACK WERE SEPARATE AND THERE WAS NO NEED FO R ANY RECONCILIATION. HE CONTENDED THAT THIS EXPLANATION OFFERED BY THE A SSESSEE, HOWEVER, WAS NOT ACCEPTED BY THE LD. PRINCIPAL CIT WITHOUT GIVIN G ANY REASON AND THE ORDER OF THE ASSESSING OFFICER WAS WRONGLY TREATED BY HIM ON THIS ISSUE AS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST O F THE REVENUE. 11. THE LD. D.R., ON THE OTHER HAND, INVITED OUR AT TENTION TO THE RELEVANT PORTION OF THE IMPUGNED ORDER OF THE LD. PRINCIPAL CIT AND RELIED ON THE REASONS GIVEN BY THE LD. PRINCIPAL CIT IN SUPPORT O F THE REVENUES CASE FOR NOT ACCEPTING THE EXPLANATION OF THE ASSESSEE AS UN DER:- FROM THE PERUSAL OF PROFIT & LOSS ACCOUNTS IT IS N OTICED THAT AN AMOUNT OF RS.3.22 CRORE HAS BEEN WRITTEN BACK FROM THE PROVISION NO LONGER REQUIRED. MOREOVER, AS PER PARA 20 OF NOTE TO TAR THE FIGURE OF PROVISION NO LONGER REQUIRED I S SHOWN AT 5,86,12,638/-. THE RECONCILIATION OF THE TWO FIGURE S HAVE NOT BEEN PROVIDED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDING. FURTHER, RECONCILIATION OF BREAK-UP OF THE LIABILITY NO LONGER REQUIRED WRITTEN BACK AMOUNTING TO RS.1,7 8,88,987/- WAS ALSO NOT FURNISHED BY THE ASSESSEE DURING THE A SSESSMENT PROCEEDING. IN FACT, IN THE SUBMISSION DATED 04-03- 2016 BEFORE THE A.O, THE ASSESSEE HAS ONLY SHOWN BREAKUP OF LIA BILITY & PROVISIONS NO LONGER REQUIRED. THE ASSESSEE IN HIS LETTER DATED 04-03-2016 BEFORE THE A.O STATED '..... PLEASE NOTE THAT THE AUDITORS AFTER THOROUGH CHECKING AND VERIFICATION O F DETAILS AND DOCUMENTS HAVE CERTIFIED THAT BOTH THE ITEMS HA VE BEEN CREDITED TO THE PROFIT & LOSS ACCOUNT AND HAVE BEEN OFFERED TO TAX.' HOWEVER CLOSER EXAMINATION OF RELEVANT MATERI AL FACT ON RECORD, IT IS SEEN THAT THE STATISTICAL SUBMISSION OF THE ASSESSEE AND THE STATEMENT REFERRED TO ABOVE DO NOT ADDRESS THE ITA NO. 655/KOL/2018 A.Y. 2012-2013 EVEREADY INDUSTRIES INDIA LIMITED 10 QUESTION OF RECONCILIATION. MOREOVER, NEITHER ANY F URTHER RECONCILIATION HAS BEEN CALLED FOR BY THE A.O NOR A NY EXPLANATION HAS BEEN FURNISHED BY THE ASSESSEE. THE A.O HAS IN FACT FAILED TO ENQUIRE AND BRING ON RECORD THE REQU IRED RECONCILIATION AND TAKE THE ISSUE TO LOGICAL END. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AL SO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS WAS CAL LED UPON BY THE ASSESSING OFFICER TO RECONCILE THE DIFFERENCE BETWE EN THE AMOUNT OF RS.1,78,88,987/- INDICATED IN THE TAX AUDIT REPORT AS PROVISION FOR LIABILITY NO LONGER REQUIRED WRITTEN BACK AND THE A MOUNT OF RS.5,86,12,638/- CREDITED IN THE PROFIT & LOSS ACCO UNT. IN REPLY FILED IN WRITING BEFORE THE ASSESSING OFFICER, IT WAS POINTE D OUT BY THE ASSESSEE THAT THE AMOUNT OF RS.1,78,88,987/- REPRESENTED LIA BILITY NO LONGER REQUIRED WRITTEN BACK WHILE THE AMOUNT OF RS.5,86,1 2,638/- REPRESENTED PROVISION NO LONGER REQUIRED WRITTEN BACK. EVEN DUR ING THE COURSE OF PROCEEDINGS UNDER SECTION 263, THE DETAILS OF THESE TWO AMOUNTS CREDITED TO THE PROFIT & LOSS ACCOUNT WERE FURNISHED BY THE ASSESSEE TO POINT OUT THAT THEY WERE SEPARATE FIGURES REPRESENTING LIABIL ITY NO LONGER REQUIRED WRITTEN BACK AND PROVISION NO LONGER REQUIRED WRITT EN BACK AND THERE WAS NO NEED TO RECONCILE THE SAME. IT APPEARS THAT THE LD. PRINCIPAL CIT, HOWEVER, FAILED TO APPRECIATE THIS POSITION CLEARLY EVIDENT FROM THE DETAILS FURNISHED BY THE ASSESSEE AND HELD THE ORDE R OF THE ASSESSING OFFICER ERRONEOUS ON THIS ISSUE ON THE GROUND THAT THERE WAS FAILURE ON THE PART OF THE ASSESSING OFFICER TO MAKE NECESSARY ENQUIRY. AS ALREADY NOTED BY US, A SPECIFIC QUERY WAS RAISED BY THE ASS ESSING OFFICER ON THIS ISSUE DURING THE COURSE OF ASSESSMENT PROCEEDINGS A ND THE SAME WAS DULY CLARIFIED BY THE ASSESSEE BY FURNISHING THE RELEVAN T FACTS AND FIGURES. IN OUR OPINION, THERE WAS THUS NO ERROR IN THE ORDER O F THE ASSESSING OFFICER ON THIS ISSUE AS ALLEGED BY THE LD. PRINCIPAL CIT C ALLING FOR ANY REVISION UNDER SECTION 263. GROUNDS NO. 6 & 7 OF THE ASSESSE ES APPEAL ARE ACCORDINGLY ALLOWED. ITA NO. 655/KOL/2018 A.Y. 2012-2013 EVEREADY INDUSTRIES INDIA LIMITED 11 13. GROUNDS NO. 8 TO 10 RAISED BY THE ASSESSEE IN T HIS APPEAL READ AS UNDER:- (8) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT WAS UNJUSTIFIED IN LAW AND ON FACTS IN SETTING ASID E ASSESSMENT ON THE GROUND OF NON-ENQUIRY RELATING TO SOURCES OF INVEST MENTS IN SHARES EVEN THOUGH IT WAS APPARENT FROM RECORDS THAT DURING THE RELEVANT YEAR THE APPELLANT HAD NOT EARNED ANY DIVIDEND INCOME FROM T HE INVESTMENTS AND IN THAT VIEW OF THE MATTER CIT WAS UNJUSTIFIED IN T REATING THE ORDER TO BE ERRONEOUS FOR NON-DISALLOWANCE U/S 14A. (9) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE REASONS FOR WHICH THE CIT REVISED THE AO'S ORDER ON ACCOUNT OF NON DISALLOWANCE U/S 14A BEING DIFFERENT FROM THE REASO NS SET OUT FROM THE SHOW CAUSE NOTICE THE CIT'S ORDER ON THIS ISSUE DES ERVES TO BE VACATED. (10) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE AO'S ORDER MAKING NO DISALLOWANCE U/S 14A READ WITH RULE 8D ON ACCOUNT OF NON EARNING OF TAX-FREE DIVIDEND, BEING IN CONSONAN CE WITH THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF REI AGRO LIMITED THE CIT WAS UNJUSTIFIED IN CONSIDERING THE ASSESSMENT ORDER TO BE ERRONEOUS FOR NOT MAKING DISALLOWANCE U/S 14A. 14. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO DISALLOWANCE UNDER SECTION 14A WAS MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) READ WITH SECTION 14 4C(5) AS THERE WAS NO EXEMPT DIVIDEND INCOME ACTUALLY EARNED BY THE AS SESSEE DURING THE YEAR UNDER CONSIDERATION. HE POINTED OUT THAT A SPE CIFIC QUERY WAS RAISED BY THE ASSESSING OFFICER IN HIS LETTER DATED 04.11. 2015 AND AFTER HAVING NOTICED THAT THERE WAS NO DIVIDEND INCOME ACTUALLY EARNED BY THE ASSESSEE, NO DISALLOWANCE UNDER SECTION 14A WAS MAD E BY HIM. HE CONTENDED THAT THE LD. PRINCIPAL CIT ACCEPTED THE F ACT THAT THERE WAS NO DIVIDEND INCOME ACTUALLY EARNED BY THE ASSESSEE DUR ING THE YEAR UNDER CONSIDERATION BUT STILL HELD THE ORDER OF THE ASSES SING OFFICER TO BE ERRONEOUS ON THIS ISSUE WHICH IS NO JUSTIFIED. ITA NO. 655/KOL/2018 A.Y. 2012-2013 EVEREADY INDUSTRIES INDIA LIMITED 12 15. THE LD. D.R., ON THE OTHER HAND, RELIED ON THE FOLLOWING REASONS GIVEN BY THE LD. PRINCIPAL CIT FOR REJECTING THE EX PLANATION OF THE ASSESSEE ON THIS ISSUE AND HOLDING THE ORDER OF THE ASSESSIN G OFFICER AS ERRONEOUS:- AS REGARDS ISSUE IN PARA 2(III) ABOVE THE REPLY OF THE ASSESSEE IN RESPECT OF DISALLOWANCE U/S 14A OF THE ACT SO FAR RELATED TO SHARES OF FOREIGN COMPANY APPEARS TO BE ONLY PARTIALLY CORRECT. THE SOURCES OF SUCH PURCHASES OF FRESH DOMESTIC SHARES REQUIRES FURTHER ENQUIRY SINCE THE A.O HAS MERELY ACCEPTED THE SUBMISSION OF THE ASSESSEE ON T HIS POINT WITHOUT MAKING ENQUIRY REGARDING THE SOURCE T HEREOF. IT IS ALSO RELEVANT TO OBSERVE THAT DURING THE ASSE SSMENT PROCEEDING, THE ASSESSEE HAD SUBMITTED THAT THE SAI D INVESTMENT IS IN THE EQUITY OF SUBSIDIARY COMPANY. IN THIS REGARD IT IS OBSERVED THAT THE REPLY OF THE ASSESSE E ON THIS POINT HAS BEEN GENERAL AND NEITHER THE A.O HAS CALL ED FOR SPECIFIC DETAILS REGARDING THE FRESH INVESTMENT NOR THE ASSESSEE HAS FURNISHED SPECIFIC DETAILS REGARDING F RESH INVESTMENTS. THUS MERE SUBMISSION OF GENERAL REPLY ON THE PART OF THE ASSESSEE AND MERE ACCEPTANCE ON THE PAR T OF THE A.O INDICATE THAT THE ISSUE REMAINED UNEXAMINED AND UN-ENQUIRED. THUS THERE IS A PRIMA FACIE FAILURE ON THE PART OF THE A.O TO JUDICIALLY ADJUDICATE THE ISSUE AFTER MAKING ENQUIRY AND BRING ON RECORD MATERIAL EVIDENCES/DETA ILS. ACCORDINGLY, THIS ORDER IS HELD TO BE ERRONEOUS SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE AND HENCE CO MES UNDER THE REVISIONARY AMBIT OF PROVISION U/S 263 OF THE INCOME TAX ACT, 1961. THIS ISSUE HAS ALSO BEEN STRE SSED UPON IN THE CASE OF DBANUKA & SONS (2011) 12 TAXMAN N.COM 227 (CALCUTTA) AS WELL IN MAXOPP INVESTMENT LTD. [2 018] 91 TAXMANN.COM 154 (SC) (PARA 41). ASSESSEE'S THEORY O F STRATEGIC INVESTMENT CANNOT COME TO ITS HELP AS PER ORDER OF THE HON'BLE APEX COURT IN THE CASE OF MAXOPP INVEST MENT LTD. (SUPRA). 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AL SO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS RIGHTLY S UBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE, IF THERE WAS NO EXEMPT IN COME IN THE FORM OF DIVIDEND WAS ACTUALLY EARNED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION, THE QUESTION OF DISALLOWANCE UNDER S ECTION 14A WOULD NOT ARISE AND, THEREFORE, NO SUCH DISALLOWANCE UNDER SE CTION 14A READ WITH RULE 8D WAS MADE BY THE ASSESSING OFFICER IN THE AS SESSMENT COMPLETED UNDER SECTION 143(3) READ WITH SECTION 144C(5) TAKI NG A POSSIBLE VIEW. IT APPEARS THAT THE LD. PRINCIPAL CIT, HOWEVER, OVERLO OKED THIS VITAL ASPECT WHILE HOLDING THE ORDER OF THE ASSESSING OFFICER ON THIS ISSUE AS ITA NO. 655/KOL/2018 A.Y. 2012-2013 EVEREADY INDUSTRIES INDIA LIMITED 13 ERRONEOUS. AS RIGHTLY CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE, THERE WAS NO ERROR IN THE ORDER OF THE ASSESSING OFFICER ON THIS ISSUE AND THE LD. PRINCIPAL CIT WAS NOT JUSTIFIED IN REVISING THE SAM E UNDER SECTION 263. GROUNDS NO. 8 TO 10 OF THE ASSESSEES APPEAL ARE AC CORDINGLY ALLOWED. 17. GROUNDS NO. 11 TO 13 RAISED BY THE ASSESSEE IN THIS APPEAL READ AS UNDER:- (11) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT WAS GROSSLY UNJUSTIFIED IN TREATING THE ORDER TO BE ERRONEOUS FOR NOT CONSIDERING FOREIGN CURRENCY TRANSLATION RESERVE AS INCOME WITHOUT PROPERLY UNDERSTANDING THE EXPLANATIONS FURNISHED. (12) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT WAS GROSSLY UNJUSTIFIED IN HOLDING THAT FOREIGN CUR RENCY TRANSLATION RESERVE WAS CREATED AS A RESULT OF GAIN IN LOAN REP AYMENT DUE TO RUPEE DEVALUATION EVEN THOUGH SUCH RESERVE HAD NO CONNECT ION WHATSOEVER WITH THE APPELLANT'S LIABILITY TO REPAY FOREIGN CUR RENCY LOANS. (13) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT WAS UNJUSTIFIED IN SETTING ASIDE ASSESSMENT EVEN TH OUGH DETAILED EXPLANATIONS & FACTS WERE FURNISHED BEFORE HIM TO P ROVE THAT FOREIGN CURRENCY TRANSLATION RESERVE WAS ON ACCOUNT OF APPE LLANT'S FOREIGN CURRENCY TRANSACTION ON CAPITAL ACCOUNT AND WITHOUT SHOWING ANY FACTUAL AND LEGAL INFIRMITY THE CIT WAS UNJUSTIFIED IN HOLDING THE AO'S ORDER TO BE ERRONEOUS ON INCORRECT UNDERSTANDING OF MATERIAL FACTS AND APPLICABLE LEGAL PROVISIONS. 18. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE NATURE OF FOREIGN CURRENCY TRANSLATION RESERVE WAS DULY EXPLA INED BY THE ASSESSEE DURING THE COURSE OF PROCEEDINGS UNDER SECTION 263 BEFORE THE LD. PRINCIPAL CIT. HE CONTENDED THAT THE LD. PRINCIPAL CIT, HOWEVER, FAILED TO APPRECIATE THE SAME AND TREATED THE ORDER OF THE AS SESSING OFFICER ON THIS ISSUE AS ERRONEOUS. 19. THE LD. D.R., ON THE OTHER HAND, SUBMITTED THAT THE DETAILS FILED BY THE ASSESSEE IN RESPECT OF FOREIGN CURRENCY TRANSLA TION RESERVE DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE ASS ESSING OFFICER WERE NOT SUFFICIENT AND IT WAS DIFFICULT TO ASCERTAIN TH E NATURE OF THE SAID ITA NO. 655/KOL/2018 A.Y. 2012-2013 EVEREADY INDUSTRIES INDIA LIMITED 14 TRANSACTIONS ON THE BASIS OF THE DETAILS FURNISHED BY THE ASSESSEE. HE CONTENDED THAT THE ASSESSING OFFICER, HOWEVER, DID NOT MAKE ANY FURTHER ENQUIRY TO FIND OUT THE EXACT NATURE OF THE FOREIGN CURRENCY TRANSLATION RESERVE AND ACCEPTED THE CLAIM OF THE ASSESSEE. HE CONTENDED THAT THERE WAS THUS AN ERROR IN THE ORDER OF THE ASSESSING OFF ICER ON THIS ISSUE AND THE LD. PRINCIPAL CIT WAS FULLY JUSTIFIED IN REVISI NG THE SAME UNDER SECTION 263. 20. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AL SO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT THE EXPLANATION OF THE ASSESSEE ON THIS ISSUE WAS NOT ACCEPTED BY T HE LD. PRINCIPAL CIT FOR THE FOLLOWING REASONS GIVEN IN HIS IMPUGNED ORDER:- ON THE ISSUE POINTED OUT IN PARA 2(V) ABOVE US REG ARDS FOREIGN CURRENCY TRANSLATION RESERVE REPLY OF THE A SSESSEE CLEARLY INDICATES GAIN IN LOAN REPAYMENT DUE TO RUP EE DEVALUATION. IN THE PRESENT CASE, THE PURPOSE OF TH E LOAN AS STATED WAS NOT FOR THE FINANCING OF FIXED ASSET. AC CORDINGLY, PROVISION OF SECTION 43A OF THE ACT AND AMENDMENT T HEREIN W.E.F. A.Y. 2003-04 WILL NOT BE ATTRACTED. ACCORDIN GLY, ANY GAIN OR LOSS ON ACCOUNT OF FOREIGN EXCHANGE FLUCTUA TION TO BE TREATED AS REVENUE IN NATURE. AS PER AS-II, THE OUT STANDING FOREIGN CURRENCY LOAN IS REQUIRED TO HE TRANSLATED INTO INDIAN CURRENCY BY APPLYING RATE OF EXCHANGE ON THE DAY OF CLOSING OF THE REPORTING PERIOD AND NET EXCHANGE DI FFERENCE AS A RESULT OF SUCH CONVERSION IS TO BE RECOGNIZED AS INCOME OR EXPENDITURE IN THE RESPECTIVE FINANCIAL YEAR. FO REIGN EXCHANGE FLUCTUATION GAIN OR LOSS HAS A DIRECT NEXU S WITH THE INTEREST COSTS AND NO NEW CAPITAL ASSET WAS BROUGHT INTO EXISTENCE. THEREFORE, GAIN IN LOAN REPAYMENT DUE TO RUPEE DEVALUATION IS REVENUE IN NATURE AND SHOULD HAVE BE EN PRIMA FACIE OFFERED TO TAXATION. THE REPLY OF THE ASSESSE E ON THIS POINT STATES THAT THE ISSUE WAS RAISED BY A.O DURIN G THE ASSESSMENT PROCEEDING AND THE RELEVANT DETAILS WERE FURNISHED VIDE HIS REPLY DATED 21-12-2015 BEFORE TH E ASSESSING OFFICER. HOWEVER ON PERUSAL OF THE SAID R EPLY OF THE ASSESSEE BEFORE THE A.O., IT IS SEEN THAT THOUGH VA RIOUS BREAK UPS OF LOSS ON FOREIGN CURRENCY TRANSACTION AND TRA NSLATION HAS BEEN FURNISHED. HOWEVER, AGAIN THE SAID REPLY O F THE ASSESSEE IS NOT CLEARLY INDICATIVE OF THE NATURE OF TRANSACTION AND HENCE MERE ACCEPTANCE OF SUCH REPLY WITHOUT CAL LING FOR DETAILS OF THE NATURE OF SUCH TRANSACTION MAKES THE ORDER ERRONEOUS SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE. ITA NO. 655/KOL/2018 A.Y. 2012-2013 EVEREADY INDUSTRIES INDIA LIMITED 15 21. A PERUSAL OF THE REASONS GIVEN BY THE LD. PRINC IPAL CIT CLEARLY SHOWS THAT THE DETAILS FURNISHED BY THE ASSESSEE DURING T HE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER WERE NOT S UFFICIENT TO ASCERTAIN THE EXACT NATURE OF THE RELEVANT TRANSACTIONS AND T HERE WAS THUS AN ERROR IN THE ORDER OF THE ASSESSING OFFICER ACCEPTING THE CLAIM OF THE ASSESSEE WITHOUT MAKING ANY FURTHER ENQUIRY TO FIND OUT THE EXACT NATURE OF THE RELEVANT TRANSACTIONS. IN OUR OPINION, THERE WAS TH US AN ERROR IN THE ORDER OF THE ASSESSING OFFICER ON THIS ISSUE AND THE LD. PRINCIPAL CIT WAS FULLY JUSTIFIED IN SETTING ASIDE THE SAME ON THIS ISSUE W ITH A DIRECTION TO THE ASSESSING OFFICER TO CONSIDER IT AFRESH AFTER MAKIN G THE NECESSARY ENQUIRY. GROUNDS NO. 11 TO 13 OF THE ASSESSEES APP EAL ARE ACCORDINGLY DISMISSED. 22. GROUND NO. 14 RAISED BY THE ASSESSEE IN THIS AP PEAL READS AS UNDER:- (14) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE, THE CIT WAS GROSSLY UNJUSTIFIED IN CONSIDERING THE ORDER TO BE ERRONEOUS FOR ALLOWING DEDUCTION U/S 35(2AB) EVEN THOUGH THE APPE LLANT HAD FURNISHED BEFORE THE AO CERTIFICATE IN FORM-3CL ISS UED BY THE D.S.I.R. BEING THE COMPETENT AUTHORITY ENTRUSTED BY THE LEGI SLATURE TO CERTIFY THE ALLOWABILITY OF EXPENSES FOR THE PURPOSE OF GRA NT OF DEDUCTION U/S 35(2AB) OF THE ACT. 23. THE LD. COUNSEL FOR THE ASSESSEE INVITED OUR AT TENTION TO THE LETTER DATED 04.11.2015 ISSUED BY THE ASSESSING OFFICER DU RING THE COURSE OF ASSESSMENT PROCEEDINGS TO POINT OUT THAT THE ASSESS EE WAS REQUIRED BY THE ASSESSING OFFICER TO FURNISH THE DETAILS OF DED UCTION CLAIMED UNDER SECTION 35(2AB) WITH SUPPORTING EVIDENCES/DOCUMENTS . HE ALSO POINTED OUT FROM THE REPLY DATED 18.11.2015 FILED BY THE AS SESSEE BEFORE THE ASSESSING OFFICER THAT THE COPY OF APPROVAL RECEIVE D FROM DSIR, GOVERNMENT OF INDIA IN FORM 3CL FOR THE AMOUNT OF D EDUCTION UNDER SECTION 35(2AB) WAS FILED BY THE ASSESSEE. HE ALSO INVITED OUR ATTENTION TO THE COMPUTATION OF TOTAL INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION PLACED AT PAGE NO. 155 OF THE PAPER B OOK TO SHOW AS TO HOW THE CLAIM UNDER SECTION 35(2AB) WAS MADE BY THE ASS ESSEE. HE CONTENDED THAT THE CLAIM OF THE ASSESSEE FOR THE DEDUCTION UN DER SECTION 35(2AB) ITA NO. 655/KOL/2018 A.Y. 2012-2013 EVEREADY INDUSTRIES INDIA LIMITED 16 THUS WAS ALLOWED BY THE ASSESSING OFFICER AFTER MAK ING THE NECESSARY ENQUIRY AND THERE WAS NO ERROR IN THE ORDER OF THE ASSESSING OFFICER ON THIS ISSUE CALLING FOR ANY REVISION UNDER SECTION 2 63. 24. THE LD. D.R., ON THE OTHER HAND, RELIED ON THE FOLLOWING REASONS GIVEN BY THE LD. PRINCIPAL CIT IN HIS IMPUGNED ORDE R WHILE NOT ACCEPTING THE EXPLANATION OF THE ASSESSEE ON THIS ISSUE AND H OLDING THE ORDER OF THE ASSESSING OFFICER TO BE ERRONEOUS:- ON THE ISSUE POINTED OUT IN PARA 2(V) ABOVE US REG ARDS FOREIGN CURRENCY TRANSLATION RESERVE REPLY OF THE A SSESSEE CLEARLY INDICATES GAIN IN LOAN REPAYMENT DUE TO RUP EE DEVALUATION. IN THE PRESENT CASE, THE PURPOSE OF TH E LOAN AS STATED WAS NOT FOR THE FINANCING OF FIXED ASSET. AC CORDINGLY, PROVISION OF SECTION 43A OF THE ACT AND AMENDMENT T HEREIN W.E.F. A.Y. 2003-04 WILL NOT BE ATTRACTED. ACCORDIN GLY, ANY GAIN OR LOSS ON ACCOUNT OF FOREIGN EXCHANGE FLUCTUA TION TO BE TREATED AS REVENUE IN NATURE. AS PER AS-II, THE OUT STANDING FOREIGN CURRENCY LOAN IS REQUIRED TO HE TRANSLATED INTO INDIAN CURRENCY BY APPLYING RATE OF EXCHANGE ON THE DAY OF CLOSING OF THE REPORTING PERIOD AND NET EXCHANGE DI FFERENCE AS A RESULT OF SUCH CONVERSION IS TO BE RECOGNIZED AS INCOME OR EXPENDITURE IN THE RESPECTIVE FINANCIAL YEAR. FO REIGN EXCHANGE FLUCTUATION GAIN OR LOSS HAS A DIRECT NEXU S WITH THE INTEREST COSTS AND NO NEW CAPITAL ASSET WAS BROUGHT INTO EXISTENCE. THEREFORE, GAIN IN LOAN REPAYMENT DUE TO RUPEE DEVALUATION IS REVENUE IN NATURE AND SHOULD HAVE BE EN PRIMA FACIE OFFERED TO TAXATION. THE REPLY OF THE ASSESSE E ON THIS POINT STATES THAT THE ISSUE WAS RAISED BY A.O DURIN G THE ASSESSMENT PROCEEDING AND THE RELEVANT DETAILS WERE FURNISHED VIDE HIS REPLY DATED 21-12-2015 BEFORE TH E ASSESSING OFFICER. HOWEVER ON PERUSAL OF THE SAID R EPLY OF THE ASSESSEE BEFORE THE A.O., IT IS SEEN THAT THOUGH VA RIOUS BREAK UPS OF LOSS ON FOREIGN CURRENCY TRANSACTION AND TRA NSLATION HAS BEEN FURNISHED. HOWEVER, AGAIN THE SAID REPLY O F THE ASSESSEE IS NOT CLEARLY INDICATIVE OF THE NATURE OF TRANSACTION AND HENCE MERE ACCEPTANCE OF SUCH REPLY WITHOUT CAL LING FOR DETAILS OF THE NATURE OF SUCH TRANSACTION MAKES THE ORDER ERRONEOUS SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE. 25. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PER USING THE RELEVANT MATERIAL AVAILABLE ON RECORD, WE FIND OURSELVES IN AGREEMENT WITH THE LD. PRINCIPAL CIT ON THIS ISSUE. ALTHOUGH SOME ENQUIRY WAS MADE BY THE ASSESSING OFFICER ON THE ISSUE OF ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 35(2AB) AS POINTED OUT BY THE LD. COUNSEL F OR THE ASSESSEE, THE ITA NO. 655/KOL/2018 A.Y. 2012-2013 EVEREADY INDUSTRIES INDIA LIMITED 17 SAME WAS NOT SUFFICIENT AS SPECIFICALLY MADE OUT BY THE LD. PRINCIPAL CIT IN HIS IMPUGNED ORDER. THE INSUFFICIENCY OF ENQUIRY MA DE BY THE ASSESSING OFFICER WAS ESTABLISHED BY HIM BY POINTING OUT SPEC IFICALLY THE PROPER AND SUFFICIENT ENQUIRY THAT SHOULD HAVE BEEN MADE BY TH E ASSESSING OFFICER IN THE FACTS AND CIRCUMSTANCES OF THE CASE BEFORE ALLO WING THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 35(2AB), WHICH THE ASSESSING OFFICER HAD CLEARLY FAILED TO DO. IN OUR OPINION, T HE ORDER OF THE ASSESSING OFFICER ON THIS ISSUE, THEREFORE, WAS ERRONEOUS AND THE LD. PRINCIPAL CIT WAS FULLY JUSTIFIED IN REVISING THE SAME UNDER SECT ION 263 WITH A DIRECTION TO THE ASSESSING OFFICER TO MAKE THE ASSESSMENT AFR ESH AFTER MAKING PROPER AND SUFFICIENT ENQUIRY ON THIS ISSUE. GROUND NO. 14 IS ACCORDINGLY DISMISSED. 26. GROUNDS NO. 15 & 16 RAISED BY THE ASSESSEE IN T HIS APPEAL READ AS UNDER:- (15) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT WAS UNJUSTIFIED IN LAW AND ON FACTS IN HOLDING THAT FOR EIGN CURRENCY TRANSACTION LOSS WAS ALLOWED BY THE AO WITHOUT CARRYING OUT NEC ESSARY EXAMINATION EVEN THOUGH FULL PARTICULARS OF SUCH LOSS WERE FURN ISHED BEFORE THE AO PRIOR TO COMPLETION OF ASSESSMENT. (16) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, A FOREIGN CURRENCY TRANSACTION LOSS HAVING BEEN ARISEN ENTIRE LY OUT OF APPELLANT'S TRADING TRANSACTIONS THE CIT WAS GROSSLY UNJUSTIFIE D IN LAW IN TREATING THE ASSESSMENT ORDER TO BE ERRONEOUS FOR LACK OF ENQUIR Y. 27. THE LD. COUNSEL FOR THE ASSESSEE INVITED OUR AT TENTION TO THE LETTER DATED 04.11.2015 ISSUED BY THE ASSESSING OFFICER DU RING THE COURSE OF ASSESSMENT PROCEEDINGS TO POINT OUT THAT THE ASSESS EE WAS REQUIRED BY THE ASSESSING OFFICER TO FURNISH THE DETAILS OF LOS S ON FOREIGN CURRENCY TRANSACTION AND TRANSLATION OF RS.299.43 LAKHS, WHI CH HAD BEEN CONSIDERED AS FINANCE LOSS. HE ALSO POINTED OUT THA T THE ASSESSEE WAS ALSO REQUIRED BY THE ASSESSING OFFICER TO FURNISH THE DE TAILS OF LOSS ON FOREIGN CURRENCY TRANSACTION AND TRANSLATION OF RS.168.06 L AKHS (OTHER THAN ITA NO. 655/KOL/2018 A.Y. 2012-2013 EVEREADY INDUSTRIES INDIA LIMITED 18 CONSIDERED AS FINANCE COST). HE SUBMITTED THAT THES E DETAILS REQUIRED BY THE ASSESSING OFFICER WERE DULY FURNISHED BY THE AS SESSEE VIDE LETTER DATED 28.12.2015 AND THE EXPLANATION OF THE ASSESSE E ON THIS ISSUE WAS ALSO OFFERED DURING THE COURSE OF PROCEEDINGS UNDER SECTION 263 BEFORE THE LD. PRINCIPAL CIT. HE CONTENDED THAT THE LD. PR INCIPAL CIT, HOWEVER, DID NOT REBUT THE EXPLANATION OFFERED BY THE ASSESS EE AND PROCEEDED TO HOLD THE ORDER OF THE ASSESSMENT MADE BY THE ASSESS ING OFFICE AS EVIDENCE ON THIS ISSUE, WHICH IS NOT JUSTIFIED. 28. THE LD. D.R., ON THE OTHER HAND, RELIED ON THE FOLLOWING REASONS GIVEN BY THE LD. PRINCIPAL CIT IN HIS IMPUGNED ORDE R FOR TREATING THE ORDER OF ASSESSMENT MADE BY THE ASSESSING OFFICER ON THIS ISSUE AS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE: - AS REGARDS ISSUE POINTED OUT IN PARA 2(VII) SUPRA IT IS OBSERVED THAT EXPLANATION GIVEN BY THE ASSESSEE IN RESPECT O F SCIENTIFIC RESEARCH APPEARS TO BE ONLY PARTIALLY CORRECT. ON E XAMINATION OF DETAILS IN RESPECT OF EXPENDITURE ON ACCOUNT OF SCIENTIFIC RESEARCH IT IS SEEN THAT THE A.O DURING THE ASSESSM ENT PROCEEDING HAS NOT SPECIFICALLY ENQUIRED ABOUT THE DETAILS OF RESEARCH & DEVELOPMENT FACILITY ON WHICH THE CLAIM U/S 35(2AB) OF THE INCOME TAX ACT, 1961 HAS BEEN MADE B Y THE ASSESSEE AND ALLOWED BY THE A.O. THE A.O. WAS REQUI RED TO CALL FOR COPY OF APPROVAL IN FORM NO. 3CM. IN THIS REGAR D IT IS RELEVANT TO OBSERVE THAT THOUGH THE ASSESSEE HAS FU RNISHED COPY OF FORM NO. 3CL WHICH CONVEYS APPROVAL OF DEPARTMEN T OF SCIENTIFIC AND INDUSTRIAL RESEARCH BUT THE A.O HAS NOT EXAMINED THE ISSUE BY CALLING FOR FORM NO. 3CM WHICH SPECIFI CALLY CONTAINS THE LOCATION OF SUCH R&D FACILITY. FURTHER , NO ENQUIRY HAS BEEN MADE TO VERIFY THE GENUINENESS OF THE CLAI M OF THE ASSESSEE MAKING THE ORDER ERRONEOUS SO FAR AS PREJU DICIAL TO THE INTEREST OF REVENUE. AS REGARDS ISSUE POINTED OUT IN PARA 2(XI) REGARDI NG FOREIGN CURRENCY TRANSACTION LOSS THE ASSESSEE HAS STATED T HAT IN RELATION TO ITS TRADING LIABILITIES OR TRADING TRAN SACTIONS INVOLVING PAYMENTS AND RECEIPTS IN FOREIGN CURRENCY , THE LOSSES AND GAINS WERE INCURRED/EARNED DUE TO EXCHANGE RATE FLUCTUATIONS, SUCH LOSSES BEING RELATED TO ORDINARY WORKING OF THE COMPANY'S BUSINESS: THE SAME WERE ALLOWABLE AS REVENUE DEDUCTION. THE PLEA OF THE ASSESSEE CONSIDERED. HOW EVER. ON PERUSAL OF ASSESSMENT RECORD IT IS NOTICED THAT UND ER HEAD OF 'FINANCE COSTS' AT SCH 22C(C) OF P&L ACCOUNT RS. 2. 99 CRS WAS DEBITED AS FOREIGN CURRENCY TRANSACTION & TRANSLATI ON LOSSES. INDEED THE ASSESSEE HAD GIVEN A BREAK UP OF SUCH CL AIM BUT THE ITA NO. 655/KOL/2018 A.Y. 2012-2013 EVEREADY INDUSTRIES INDIA LIMITED 19 AO HAS NOT EXAMINED AND ENQUIRED INTO NATURE OF TRA NSACTION. IN SHORT THE ELIGIBILITY OF THESE CLAIMS WERE NOT E XAMINED IN THE LIGHT OF AUDITOR'S COMMENT GIVEN AT NOTE 25.4(1) AT PAGE 47 OF THE ANNUAL REPORT WHEREIN IT IS MENTIONED THAT :- .. 25.4. DETAILS OF DERIVATIVES INSTRUMENTS AND UNH EDGED FOREIGN CURRENCY EXPOSURES I. THE FOLLOWING DERIVATIVE POSITIONS ARE OPEN AS A T MARCH 31,2012. THESE TRANSACTIONS HAVE BEEN UNDERTAKEN TO ACT AS ECONOMIC HEDGES FOR THE COMPANY'S EXPOSURES TO VARI OUS RISKS IN FOREIGN EXCHANGE MARKETS AND MAY/MAY NOT QUALIFY OR BE DESIGNATED AS HEDGING INSTRUMENTS. (A) FORWARD EXCHANGE CONTRACTS AND OPTIONS [BEING D ERIVATIVE INSTRUMENTS}, WHICH ARE NOT INTENDED FOR TRADING OR SPECULATIVE PURPOSES BUT FOR HEDGE PURPOSES TO ESTABLISH THE AM OUNT OF REPORTING CURRENCY REQUIRED OR AVAILABLE AT THE SET TLEMENT DATE OF CERIA IN PAYABLES AND RECEIVABLES. (I) OUTSTANDING FORWARD EXCHANGE CONTRACTS ENTERED INTO BY THE COMPANY AS ON MARCH 31,2012 CURRENCY RS. IN LAKHS BUY/SELL CROSS CURRENCY USD 66.11 (16.96) BUY BUY RUPEES RUPEES EURO 5.60 - BUY - RUPEES - USD 5.58 (1.82) SELL SELL RUPEES RUPEES JPY 3.36 - BUY - RUPEES - FROM ABOVE COMMENTS PRIMA FACIE IT APPEARS THAT A P ART OF FOREIGN CURRENCY TRANSACTION WAS HEDGED. THUS, IF T HE ASSESSEE HAD ENTERED INTO FORWARD CONTRACTS AT PREDETERMINED EXCHANGE RATE OF FOREIGN CURRENCY TO SAFEGUARD ITS PAYABLE/R ECEIVABLES FROM ANY FLUCTUATION IN FOREIGN EXCHANGE, THE ASSES SEE HAD ALREADY HEDGED ITS RECEIVABLES AND IMMUNE ITSELF FR OM EFFECT OF ANY CHANGE IN EXCHANGE RATE OF FOREIGN CURRENCY. TH E ISSUE THUS REQUIRES FURTHER ENQUIRY TO DETERMINE IT TAX TREATM ENT. WITH AFORESAID OBSERVATION, ON THIS ISSUE ALSO THE ORDER SUFFERS FROM INFIRMITY OF LACK OF ENQUIRY AND HENCE COMES WITH T HE AMBIT OF REVISIONARY PROVISIONS U/S 263 OF THE INCOME TAX AC T, 1961. THE PLEA OF THE ASSESSEE COULD BE JUDICIALLY EXAMINED O NLY AFTER EXAMINATION/VERIFICATION OF RELEVANT MATERIAL FACTS . WITHOUT MAKING ENQUIRY AND ASCERTAINING FULL FACTS THE ISSU E CANNOT BE JUDICIALLY ADJUDICATED. 29. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON THI S ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERVED THAT EVEN THOUGH SOME OF THE DETAILS RELATING TO THE ASS ESSEES CLAIM ON THIS ISSUE WERE CALLED FOR BY THE ASSESSING OFFICER, THE RE WAS NO DISCUSSION ITA NO. 655/KOL/2018 A.Y. 2012-2013 EVEREADY INDUSTRIES INDIA LIMITED 20 WHATSOEVER MADE BY HIM IN THE ASSESSMENT ORDER ON T HIS ISSUE GIVING ANY REASON FOR ACCEPTING THE CLAIM OF THE ASSESSEE. MOR EOVER, AS SPECIFICALLY POINTED OUT BY THE LD. PRINCIPAL CIT IN HIS IMPUGNE D ORDER, PROPER AND SUFFICIENT ENQUIRY WAS NOT MADE BY THE ASSESSING OF FICER BEFORE ALLOWING THE CLAIM OF THE ASSESSEE ON THIS ISSUE AND SUCH EN QUIRIES WHICH THE ASSESSING OFFICER OUGHT TO HAVE MADE BUT FAILED TO DO WAS ALSO SPECIFICALLY POINTED OUT BY HIM. WE, THEREFORE, FIND NO INFIRMIT Y IN THE IMPUGNED ORDER OF THE LD. PRINCIPAL CIT HOLDING THE ORDER OF ASSESSMENT MADE BY THE ASSESSING OFFICER ON THIS ISSUE TO BE ERRONEOUS AND REVISING THE SAME WITH A DIRECTION TO THE ASSESSING OFFICER TO CONSID ER AND DECIDE THIS ISSUE AFRESH AFTER MAKING PROPER AND SUFFICIENT ENQUIRY. GROUNDS NO. 15 & 16 OF THE ASSESSEES APPEAL ARE ACCORDINGLY DISMISSED. 30. GROUND NO. 17 RAISED BY THE ASSESSEE IN THIS AP PEAL READS AS UNDER:- (17) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT WAS UNJUSTIFIED IN CONSIDERING THE ORDER TO BE ERRO NEOUS FOR THE ALLEGED FAILURE TO CROSS VERIFY PARTY-WISE PARTICULARS OF R ECEIPTS AS PER FORM- 26AS VIS-A-VIS THE ACCOUNTS EVEN THOUGH THE AO HAD CARRIED OUT THE RECONCILIATION OF INCOME AS REFLECTED IN THE BOOKS WITH INCOME REFLECTED IN FORM-26AS. 31. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PER USING THE RELEVANT MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE CLAI M OF THE ASSESSEE FOR TDS WAS ALLOWED BY THE ASSESSING OFFICER AFTER MAKI NG PROPER AND SUFFICIENT ENQUIRY AS POINTED OUT BY THE LD. COUNSE L FOR THE ASSESSEE FROM THE LETTERS DATED 02.03.2015 AND 08.03.2016 SUBMITT ED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ALLEGATION OF THE LD . PRINCIPAL CIT THAT THE CLAIM OF THE ASSESSEE FOR SUCH CREDIT ON ACCOUNT OF TDS WAS ACCEPTED BY THE ASSESSING OFFICER WITHOUT MAKING PROPER AND SUF FICIENT ENQUIRY THUS WAS FACTUALLY INCORRECT AND WE DO NOT SUBSCRIBE TO THE VIEW OF THE LD. PRINCIPAL CIT THAT THERE WAS ANY ERROR IN THE ORDER OF THE ASSESSING OFFICER ON THIS ISSUE CALLING FOR REVISION UNDER SE CTION 263. GROUND NO. 17 OF THE ASSESSEES APPEAL IS ACCORDINGLY ALLOWED. ITA NO. 655/KOL/2018 A.Y. 2012-2013 EVEREADY INDUSTRIES INDIA LIMITED 21 32. KEEPING IN VIEW OUR DECISION RENDERED ABOVE ON EACH AND EVERY ISSUE RAISED IN THIS APPEAL OF THE ASSESSEE, WE MOD IFY THE IMPUGNED ORDER PASSED BY THE LD. PRINCIPAL CIT UNDER SECTION 263 A ND ALLOW PARTLY THIS APPEAL OF THE ASSESSEE. 33. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON FEBRUARY 13, 2019. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER VICE -PRESIDENT (KZ) KOLKATA, THE 13 TH DAY OF FEBRUARY, 2019 COPIES TO : (1) EVEREADY INDUSTRIES INDIA LIMITED, 1, MIDDLETON STREET, KOLKATA-700 071 (2) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-11(1), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (3) PRINCIPAL COMMISSIONER OF INCOME TAX, KOLKA TA-4, KOLKATA, (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.