Nabros Pharma Limited, Ahmedabad V. The ACIT.,Circle-5, Ahmedabad

ITA 719/AHD/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4224 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 23-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Earning of tax free income; Proportionate interest; Notional interest
• Section: 143(3); 80HHC; 10B

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SMT. MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NOS. 719 & 720/AHD/2016 ( ASSESSMENT YEARS : 2008-09 & 2011-12) M/S. NABROS PHARMA LTD. 3 RD FLOOR, NABROS HOUSE, B/H. BRITISH LIBRARY, LAW GARDEN, ELLISBRIDGE, AHMEDABAD - 380009 / VS. ACIT CIRCLE-5, AHMEDABAD & ADDL. CIT RANGE-5, AHMEDABAD ./ ./ PAN/GIR NO. : AAACN7886N ( APPELLANT ) .. ( / RESPONDENT ) & ./ I.T.A. NOS. 788 & 789/AHD/2016 ( ASSESSMENT YEARS : 2008-09 & 2011-12) ACIT CIRCLE-5, AHMEDABAD & ADDL. CIT RANGE-5, AHMEDABAD / VS. M/S. NABROS PHARMA LTD. 3 RD FLOOR, NABROS HOUSE, B/H. BRITISH LIBRARY, LAW GARDEN, ELLISBRIDGE, AHMEDABAD - 380009 ( APPELLANT ) .. ( / RESPONDENT ) / REVENUE BY : SHRI MUDIT NAGPAL, SR. D.R. / ASSESSEE BY : SHRI S. N. SOPARKAR & SHRI PARIN SHAH, A.R. DATE OF HEARING 18/09/2018 !'# / DATE OF PRONOUNCEMENT 01/11/2018 ITA NOS. 788, 789, 719 & 720/AHD/16 [M/S. NABROS PH ARMA LTD.] A.YS. 2008-09 & 2011-12 - 2 - / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED CROSS APPEALS HAVE BEEN FILED AT THE INSTANCE OF THE ASSESSEE AND REVENUE FOR A.YS. 2008-09 & 2011-1 2 AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)- 9, AHMEDABAD (CIT(A) IN SHORT), DATED 11.01.2016 IN BOTH ASSES SMENT YEARS ARISING IN THE ASSESSMENT ORDERS DATED 31.03.2014 & 29.03.2 014 PASSED BY THE ASSESSING OFFICER (AO) UNDER S. 143(3) R.W.S. 147 A ND UNDER S.143(3) OF THE INCOME TAX ACT, 1961 (THE ACT); RESPECTIVELY . 2. WE FIRST TAKE UP THE CROSS APPEALS OF THE ASSESS EE AND REVENUE CONCERNING AY 2008-09. ITA NO. 719/AHD/2016 - AY 2008-09 - ASSESSEES APPE AL 3. AS PER THE GROUNDS OF APPEAL, THE ASSESSEE HAS A GITATED THE ACTION OF THE CIT(A) ON TWO GROUNDS; FIRSTLY, THE R E-ASSESSMENT PROCEEDINGS UNDER S.147 OF THE ACT IS MARRED WITH I LLEGALITY AND THEREFORE, THE ACTION OF THE AO IS WITHOUT AUTHORIT Y OF LAW AND SECONDLY, RE-WORKING OF EXEMPTION CLAIMED UNDER S.1 0B OF THE ACT BY ARTIFICIALLY REDUCING THE PROFITS OF THE ELIGIBLE P ROFIT BY AN AMOUNT OF RS.41,54,153/- WITH REFERENCE TO PROVISIONS OF SECT ION 10B(7) R.W.S. 80IA(10) OF THE ACT. 4. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEAR NED AR FOR THE ASSESSEE INSISTED THAT THE ACTION OF THE REVENUE IS NEITHER SUSTAINABLE ON THE JURISDICTIONAL POINT NOR ON MERITS OF THE AD DITION. THE LEARNED AR SIMULTANEOUSLY SUBMITTED THAT WHERE THE TRIBUNAL IS CONVINCED WITH THE SUBSTANTIVE ISSUE ON MERITS, THE ADJUDICAT ION ON LEGAL GROUND MAY NOT BE NECESSARY. ADDRESSING THE ISSUE ON MERI TS, THE LEARNED AR ITA NOS. 788, 789, 719 & 720/AHD/16 [M/S. NABROS PH ARMA LTD.] A.YS. 2008-09 & 2011-12 - 3 - POINTED OUT THAT THE ASSESSEE IS A MANUFACTURER OF PHARMACEUTICAL PRODUCTS AND HAS DERIVED INCOME FROM 100% EXPORT OR IENTED UNIT WHICH IS ELIGIBLE FOR DEDUCTION UNDER S.10B OF THE ACT. THE ASSESSEE ALSO DERIVES INCOME FROM OTHER NON-ELIGIBLE UNIT AS WELL. MAKING REFERENCE TO THE ASSESSMENT ORDER AS WELL AS THE FI RST APPELLATE ORDER, THE LEARNED AR SUBMITTED THAT IT IS THE CASE OF THE REVENUE THAT THE DIRECTORS/SHAREHOLDERS OF THE ASSESSEE COMPANY HAVE ADVANCED HUGE AMOUNT OF INTEREST FREE FUNDS TO THE ASSESSEE COMPA NY RUNNING INTO CRORES DURING THE PERIOD OF EXEMPTION/DEDUCTION CLA IMED BY THE ASSESSEE COMPANY UNDER S.10B OF THE ACT IN RESPECT OF ELIGIBLE UNIT. IT WAS SUBMITTED THAT IT IS THE CASE OF THE REVENUE TH AT BY PROVIDING INTEREST FREE FUNDS TO THE ASSESSEE COMPANY AND BY NOT CHARGING INTEREST THEREON, THE PROFITS OF THE ELIGIBLE UNIT UNDER S.10B OF THE ACT HAS BEEN ARTIFICIALLY JACKED UP. THE LEARNED AR TH US POINTED OUT THAT PROVISIONS OF SECTION 10B(7) R.W.S. 80IA(10) OF THE ACT WAS APPLIED AND THE AO TOOK A VIEW THAT THE AVAILABILITY OF INT EREST FREE FUNDS OF LARGE AMOUNTS TO THE ASSESSEE COMPANY BY THE DIRECT OR/SHAREHOLDER WAS AN ARRANGEMENT TO SHOW MORE THAN ORDINARY PROFI TS BY THE ASSESSEE COMPANY TO ENABLE THE ASSESSEE COMPANY TO CLAIM DED UCTION ON LARGE PROFITS UNDER S.10B OF THE ACT. THE AO ACCORDINGLY COMPUTED NOTIONAL COSTS TOWARDS INTEREST ON SUCH INTEREST FR EE FUNDS MADE AVAILABLE BY THE DIRECTORS/SHAREHOLDERS TO THE COMP ANY AND ASSUMED THAT TO BE AN ORDINARY EXPENDITURE FOR THE PURPOSES OF DETERMINATION OF ORDINARY PROFITS IN TERMS OF SECTION 10B(7) R.W.S. 80IA(10) OF THE ACT. THE NOTIONAL INTEREST EXPENDITURE ATTRIBUTABLE TO E LIGIBLE UNIT AMOUNTING TO RS.41,54,153/- WAS ACCORDINGLY REDUCED FROM THE DEDUCTION AVAILABLE TO THE ASSESSEE COMPANY AND AS A COROLLARY, THE TAXABLE INCOME OF THE ASSESSEE COMPANY WAS INCREASE D TO THIS EXTENT. IN THIS BACKGROUND, THE LEARNED AR REFERRED TO THE FINANCIAL STATEMENT AS ANNEXED IN THE PAPER BOOK AND SUBMITTED THAT WHI LE THE DEDUCTION UNDER S.10B OF THE ACT WAS CLAIMED FROM AY 2007-08, THE ITA NOS. 788, 789, 719 & 720/AHD/16 [M/S. NABROS PH ARMA LTD.] A.YS. 2008-09 & 2011-12 - 4 - DIRECTORS/SHAREHOLDERS OF THE ASSESSEE COMPANY HAD PROVIDED INTEREST FREE FUNDS OF SIMILAR TYPE IN THE EARLIER FINANCIAL YEARS AS WELL. THE FUNDS OF THE DIRECTORS/SHAREHOLDERS WERE ALSO FOUND TO BE THEIR OWN AND WERE NOT BORROWED BY THEM TO, IN TURN, PROVIDE INTEREST FREE LENDING TO THE COMPANY. THE LEARNED AR SUBMITTED T HAT 80IA(10) OF THE ACT DOES NOT CONTEMPLATE PROVIDING FOR EXPENSES ON NOTIONAL BASIS WHICH HAS NOT BEEN INCURRED BY THE ASSESSEE COMPANY AT ALL. THE LAW DOES NOT OBLIGE THE ASSESSEE TO INCUR EXPENSES. TH E LEARNED AR ALSO POINTED OUT THAT THE ISSUE IS NO LONGER RES INTEGRA AND COVERED BY THE DECISION OF THE CO-ORDINATE BENCH OF TRIBUNAL IN TH E CASE OF ITO VS. GILVERT ISPAT ITA NO. 345/CHD/2011. 5. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON T HE OBSERVATIONS MADE BY THE CIT(A) CONCLUDING THE ISSUE AGAINST THE ASSESSEE. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE CENTRAL ISSUE INVOLVED IN THE CAPTIONED APPEAL IS WHETHER A N ARRANGEMENT OF BUSINESS TRANSACTED BETWEEN THE ASSESSE AND ITS DIR ECTORS/SHAREHOLDERS CAN BE INFERRED WHEREBY THE ASSESSEE EARNED MORE TH AN ORDINARY PROFITS AS CONTEMPLATED UNDER S. 10B(7) R.W.S. 80IA (10) OF THE ACT. AN INTEGRAL QUESTION WOULD ALSO ARISE AS TO WHETHER THE CHARGE OF INTEREST ON MONEY LENT BY THE DIRECTORS/SHAREHOLDER S CAN BE SAID TO BE AN ACTIVITY FALLING WITHIN THE SCOPE OF THE EXPRESS ION BUSINESS TRANSACTED BETWEEN THEM AS CODIFIED IN SECTION 80I A(10) OF THE ACT. 6.1 SECTION 10B OF THE ACT ESSENTIALLY PROVIDES FOR TAX INCENTIVE IN THE FORM OF DEDUCTION OF PROFITS AND GAINS DERIVED FROM EXPORT OF ARTICLES OR THINGS ETC. BY VIRTUE OF SUB-SECTION 7 OF SECTION 10B OF THE ACT, FETTERS IMPOSED UNDER S.80IA (10) OF THE ACT A RE APPLICABLE WHILE DETERMINING DEDUCTION UNDER S.10B OF THE ACT. SECT ION 80IA(10), IN TURN, SEEKS TO NEGATE AN ARTIFICIAL INFLATION IN PR OFITS DUE TO SOME ITA NOS. 788, 789, 719 & 720/AHD/16 [M/S. NABROS PH ARMA LTD.] A.YS. 2008-09 & 2011-12 - 5 - BUSINESS ARRANGEMENTS WITH AN OBJECT TO CLAIM HIGHE R DEDUCTION. SECTION 80IA(10) ENABLES THE AO TO SUBSTITUTE THE O RDINARY AND REASONABLE PROFITS FOR THE PURPOSES OF DEDUCTION UN DER S.10B OF THE ACT IN CERTAIN CIRCUMSTANCES. 6.2 AS POINTED OUT ON BEHALF OF THE ASSESSEE AND AS BORNE OUT FROM THE ORDERS OF THE AUTHORITIES BELOW, IT IS APPARENT THAT THE ASSESSEE HAD PROVIDED INTEREST FREE FUNDS OF SUBSTANTIAL AMOUNTS EVEN PRIOR TO FINANCIAL YEAR 2006-07 (AY 2007-08) WHEN THE DEDUCT ION UNDER PROVISIONS OF SECTION 10B OF THE ACT WAS FIRST AVAI LED. SECONDLY, DIRECTORS/SHAREHOLDERS HAVE UTILIZED THEIR OWN FUND S FOR LENDING TO THE ASSESSEE COMPANY ALBEIT INTEREST FREE. NEEDLESS TO SAY, THE CORPORATE VEIL EXISTS BETWEEN THE SHAREHOLDERS AND THE COMPAN Y. THE EXTRA PROFIT ALLEGEDLY EARNED BY THE CORPORATE COMPANY OW ING TO SUCH INTEREST FREE FUNDS CANNOT BE RETURNED TO THE COFFE RS OF ITS SHAREHOLDERS WITHOUT INCURRING DIVIDEND TAX ETC. EVEN UNDER INCO ME TAX LAWS. BESIDES, WE FIND IT MANIFEST THAT THE CHARGING OF I NTEREST OR OTHERWISE ON FUNDS PROVIDED BY THE DIRECTORS/SHAREHOLDERS TO THE ASSESSEE COMPANY CANNOT FALL WITHIN THE SWEEP OF EXPRESSION BUSINESS TRANSACTED BETWEEN THEM AS CONTEMPLATED UNDER S.80 IA(10) OF THE ACT. THE AFORESAID EXPRESSION IMPLIEDLY INDICATES TRANSACTION IN THE COURSE OF BUSINESS ACTIVITY. A MERE DIVERSION OF FUNDS IN THE FORM OF INTEREST FREE LENDING BY SHAREHOLDERS TO ITS COM PANY DO NOT PARTAKE THE CHARACTER OF A BUSINESS TRANSACTION. WE ARE AL IVE TO THE FACT THAT WHILE ALLEGING ARRANGEMENT, THE AO HAS NARRATED C IRCUMSTANCES LIKE WITHDRAWAL OF INTEREST FREE FUNDS IMMEDIATELY ON TH E COMPLETION OF ELIGIBLE PERIOD FOR AVAILING BENEFIT UNDER S.10B OF THE ACT. NO DOUBT, SUCH CIRCUMSTANCES BRING SOME DISQUIET. HOWEVER, S UCH CIRCUMSTANCES CANNOT BE REGARDED AS OVERWHELMING FOR THE PURPOSES OF GRAVE ALLEGATION OF ARRANGEMENT CONTEMPLATED UNDER S. 80I A(10) OF THE ACT. WE THUS FIND THAT THE REVENUE HAS MIS-DIRECTED ITSE LF IN LAW AS WELL AS ITA NOS. 788, 789, 719 & 720/AHD/16 [M/S. NABROS PH ARMA LTD.] A.YS. 2008-09 & 2011-12 - 6 - ON FACTS IN ARTIFICIALLY COMPUTING THE NON-EXISTENT INTEREST COSTS AND THUS DENYING THE DEDUCTION UNDER S.10B OF THE ACT E LIGIBLE TO THE ASSESSEE. THE ACTION OF THE REVENUE IS WHOLLY UNSU STAINABLE IN LAW AND DESERVES TO BE SET ASIDE AND CANCELLED. WHILE DOING SO, WE ALSO NOTE THAT SIMILAR ISSUE HAD CROPPED UP IN THE CASE OF GILVERT ISPAT (SUPRA) ALSO WHICH WAS ANSWERED IN FAVOUR OF THE AS SESSEE. CONSEQUENTLY, THE ORDER OF THE CIT(A) ON THE AFORES AID ISSUE IS SET ASIDE AND THE AO IS DIRECTED TO EXCLUDE THE AFORESA ID ADJUSTMENT FOR THE PURPOSES OF DETERMINATION OF PROFITS OF THE ASS ESSEE COMPANY UNDER S.10B OF THE ACT. 7. RESULTANTLY, APPEAL OF THE ASSESSEE IS ALLOWED O N MERITS ON THIS SCORE. 8. IN VIEW OF THE GRIEVANCE OF THE ASSESSEE METED O UT AS ABOVE, WE DO NOT SEEK TO DELINEATE ON OTHER GROUNDS RAISED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. 10. WE SHALL NOW ADVERT TO THE REVENUES APPEAL ITA NO.788/AHD/2016. 11. THE REVENUE IN ITS APPEAL HAS CHALLENGED THE DI SALLOWANCE OF RS.81,06,518/- MADE ON ACCOUNT OF REDUCTION IN PROF IT ELIGIBLE FOR DEDUCTION UNDER S.10B OF THE ACT. FROM THE PERUSAL OF THE ORDER OF THE AO, IT APPEARS THAT THE AO HAS EXCLUDED AN AMOUNT O F RS.1,51,68,756/- TOWARDS FREIGHT AND INSURANCE EXPE NSES FROM THE EXPORT TURNOVER . HOWEVER, SIMILAR EXCLUSION WAS NOT MADE FROM TOTAL TURNOVER FOR THE PURPOSES OF COMPUTATION OF DEDUCTION UNDER S.10B OF THE ACT. THIS RESULTED IN THE AFORESAID R EDUCTION OF ELIGIBLE PROFITS FOR THE PURPOSES OF DEDUCTION UNDER S.10B O F THE ACT. ITA NOS. 788, 789, 719 & 720/AHD/16 [M/S. NABROS PH ARMA LTD.] A.YS. 2008-09 & 2011-12 - 7 - 12. THE FIRST APPELLATE AUTHORITY HOWEVER AFTER TAK ING NOTE OF SEVERAL DECISIONS GOVERNING THE ISSUE HAS DELETED THE DISAL LOWANCE. THE RELEVANT OPERATIVE PARA OF THE ORDER OF THE CIT(A) READS AS UNDER: 6.2 I HAVE CAREFULLY CONSIDERED THE OBSERVATION OF THE A,0, CONTENTIONS OF THE APPELLANT AS WELL AS THE CASE TA WS RELIED UPON BY THE APPELLANT. THE A.O HAS REWORKED THE EXEMPTION U /S.10B OF THE ACT WHEREBY IT HAS RECALCULATED THE QUANTUM OF EXPORT T URNOVER BY EXCLUDING THE AMOUNT OF FREIGHT AND INSURANCE TOTAL ING TO RS. 151,68,756/-. AS PER SEC. 10B, EXPLANATION-2, THE D EFINITION OF EXPORT TURNOVER HAS BEEN GIVEN WHEREIN IT HAS BEEN CATEGOR ICALLY STATED THAT THE EXPORT TURNOVER DOES NOT INCLUDE FREIGHT, TELEC OMMUNICATION CHARGES OR INSURANCE ATTRIBUTABLE TO THE DELIVERY O F ARTICLES OR THINGS INCURRED IN FOREIGN EXCHANGE IN PROVIDING THE TECHN ICAL SERVICES OUTSIDE INDIA, HOWEVER, SEC.10B, EXPLANATION-2 HAS NOT GIVEN THE DEFINITION OF TOTAL TURNOVER BASED ON THIS, THE A.O AT PARA-7 OF THE ORDER OF REASSESSMENT HAS PROCEEDED TO EXCLUDE THE COST OF FREIGHT AND INSURANCE FROM THE EXPORT TURNOVER WHEREAS THE A.O HAS NOT DEDUCTED/REDUCED THE SAME QUANTUM FROM THE AMOUNT O F TOTAL TURNOVER. I DO NOT AGREE WITH THE APPROACH OF THE A .O. IF THE QUANTUM OF COST OF FREIGHT AND INSURANCE IS BEING REDUCED F ROM THE EXPORT TURNOVER, THEN IT HAS TO BE REDUCED FROM THE QUANTU M OF TOTAL TURNOVER, THE FORMULA FOR COMPUTATION OF DEDUCTION U/S.10B IS AS FOLLOWS :- DEDUCTION U/S.10B = PROFIT OF THE BUSINESS X EXPORT TURNOVER TOTAL TURNOVER THE FORMULA HELPS IN APPORTIONMENT OF PROFITS ON TH E BASIS OF TURNOVER. THE EXPORT TURNOVER WOULD BE A COMPONENT OR PART OR SUB SET OF A DENOMINATOR I.E. THE TOTAL TURNOVER. IN SU CH A SCENARIO, IF THE QUANTUM OF EXPORT TURNOVER AS A PART OF TOTAL TURNO VER HAS TO BE ARRIVED AT AFTER EXCLUDING CERTAIN EXPENSES, THEN T HE SAME SHOULD ALSO BE EXCLUDED IN COMPUTING THE TOTAL TURNOVER IN THE DENOMINATOR. THEREFORE, I DISAGREE WITH THE STEPS TAKEN BY THE A .O IN REDUCING THE QUANTUM OF INSURANCE AND FREIGHT ONLY FROM THE EXPO RT TURNOVER AND NOT FROM THE TOTAL TURNOVER, THE APPELLANT HAS RELI ED ON THE JUDGMENTS OF HON'BLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT VS TATA ELXI LTD.349 ITR 98 AND THE RATIO OF ITAT CHEN NAI IN THE CASE OF ITO VS SAK SOFT LTD, 30 SOT 55 CHENNAI(S.B). REL YING ON THE ABOVE REFERRED JUDGMENTS AS WELL AS THE FACTS AND C IRCUMSTANCES OF THE CASE, THE A.O IS DIRECTED TO EXCLUDE THE QUANTU M OF INSURANCE AND FREIGHT AMOUNTING TO RS.1,51,68,756/- ALSO FROM THE TOTAL TURNOVER IN ORDER TO COME TO THE RIGHT QUANTUM OF DEDUCTION U/S .10B. THEREFORE, THIS GROUND OF APPEAL IS ALLOWED. ITA NOS. 788, 789, 719 & 720/AHD/16 [M/S. NABROS PH ARMA LTD.] A.YS. 2008-09 & 2011-12 - 8 - 13. WITH THE ASSISTANCE OF THE LEARNED AR FOR THE A SSESSEE, WE FIND THAT APART FROM THE SEVERAL JUDICIAL PRECEDENTS, TH E CONTROVERSY IS SETTLED IN FAVOUR OF THE ASSESSEE ALSO BY CBDT CIRC ULAR NO.4/2018 DATED 14.08.2018. AS PER THE CBDT CIRCULAR, THE EX PENDITURE INCURRED OF SUCH NATURE ARE REQUIRED TO BE EXCLUDED FROM BOT H EXPORT TURNOVER AS WELL AS TOTAL TURNOVER WHILE COMPUTING DEDUCTI ON ADMISSIBLE UNDER S.10A OF THE ACT. IN PARITY, WE DO NOT SEE A NY ERROR IN THE ORDER OF THE CIT(A). 14. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. 15. WE SHALL NOW ADVERT TO THE APPEAL OF THE ASSESS EE IN ITA NO.720/AHD/2016 CONCERNING AY 2011-12. 16. THE SUBSTANTIVE GROUNDS OF APPEAL RAISED BY THE ASSESSEE READ AS UNDER: 1. LD. CIT (A) ERRED IN LAW AND ON FACTS IN CONFIR MING ACTION OF AO REDUCING PROFIT OF THE ELIGIBLE UNIT BY AN AMOUN T OF RS. 51, 17,782/- WITH RESPECT TO LATE REALIZATION OF EXPORT PROCEEDS. LD. CIT (A) OUGHT TO HAVE ALLOWED THE DEDUCTION OF EXPORT PROCEEDS ACTUALLY REALIZED. IT BE SO HELD NOW. 2. LD. CIT (A) GRAVELY ERRED IN LAW AND ON FACTS I N CONFIRMING REWORKING OF EXEMPTION U/S 10B BY AO REDUCING PROFI T OF ELIGIBLE UNIT BY AN AMOUNT OF RS. 1,20,58,254/- INV OKING PROVISION OF SEC. 10B(7) R.W.S. 80IA(10) OF THE ACT . LD. CIT (A) OUGHT NOT TO HAVE CONFIRMED REWORKING OF ELIGIBLE P ROFITS BY FALLACIOUS APPLICATION OF PROVISIONS OF SEC. 10B (7 ) WITHOUT PROVING ANY ARRANGEMENT TO SHOW MORE THAN ORDINARY PROFITS BY APPELLANT. 3. LD. CIT (A) ERRED LAW AND ON FACTS IN CONFIRMIN G SUCH NOTIONAL REDUCTION OF ELIGIBLE PROFIT BY AO WHEN NO INTEREST WAS EVER PAID EVEN BEFORE CLAIM OF DEDUCTION U/S 10B STARTED . LD. CIT (A) OUGHT NOT TO HAVE CONFIRMED SUCH ADJUSTMENT MAD E BY AO AGAINST LEGAL PRINCIPLES IN THE ABSENCE OF INTEREST EXPENSES BEING INCURRED AND NOT CHARGED TO THE ELIGIBLE UNIT . ITA NOS. 788, 789, 719 & 720/AHD/16 [M/S. NABROS PH ARMA LTD.] A.YS. 2008-09 & 2011-12 - 9 - 17. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEA RNED AR FOR THE ASSESSEE POINTED OUT THAT GROUND NO.1 CONCERNS ELIG IBILITY OF DEDUCTION OF EXPORT PROCEEDS REALIZED LATE FOR THE PURPOSES OF DEDUCTION UNDER S.10B OF THE ACT. WITH THE ASSISTA NCE OF THE LEARNED AR FOR THE ASSESSEE, WE FIND THAT THE CONTROVERSY I S COVERED IN FAVOUR OF THE ASSESSEE IN TERMS OF SECTION 155(11A) OF THE ACT. ACCORDINGLY, THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE ON F IRST PRINCIPLES. HOWEVER, THE FACTUAL ASPECTS IN THIS REGARD MAY BE EXAMINED BY THE AO WHILE DETERMINING THE QUANTUM OF RELIEF. THE IS SUE IS ACCORDINGLY SET ASIDE TO THE FILE OF THE AO FOR DECISION IN THE LIGHT OF PROVISIONS OF SECTION 155(11A) OF THE ACT. 18. IN THE RESULT, GROUND NO.1 OF THE ASSESSEES AP PEAL IS ALLOWED FOR STATISTICAL PURPOSES. 19. GROUND NOS. 2 & 3 CONCERN ARTIFICIAL REDUCTION OF PROFIT OF ELIGIBLE UNIT UNDER S.10B WITH REFERENCE TO PROVISI ONS OF SECTION 10B (7) R.W.S. 80IA OF THE ACT. THE ELIGIBLE PROFITS U NDER S.10B OF THE ACT IS SOUGHT TO BE REDUCED TOWARDS NOTIONAL INTEREST O N INTEREST FREE FUNDS. AN IDENTICAL ISSUE HAS ALREADY BEEN EXAMINE D IN THE CASE OF ASSESSEE CONCERNING AY 2008-09 IN THE PRECEDING PAR AGRAPHS. IN PARITY AND FOR SIMILARITY OF REASONS, THE ACTION OF THE REVENUE TOWARDS REDUCING THE DEDUCTION ELIGIBLE UNDER S.10B OF THE ACT IS NOT SUSTAINABLE IN LAW IN THE ABSENCE OF ANY PERCEPTIBL E ARRANGEMENT CONTEMPLATED UNDER S.80IA(10) OF THE ACT. 20. GROUND NOS. 2 & 3 OF THE ASSESSEES APPEAL ARE ALLOWED. 21. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ITA NOS. 788, 789, 719 & 720/AHD/16 [M/S. NABROS PH ARMA LTD.] A.YS. 2008-09 & 2011-12 - 10 - 22. WE SHALL NOW ADVERT TO THE REVENUES APPEAL IN ITA NO.789/AHD/2016 CONCERNING AY 2011-12. 23. THE SUBSTANTIVE GROUNDS OF APPEAL RAISED BY REV ENUE READ AS UNDER: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1,83,21,375/- MADE ON ACCOUNT OF RED UCTION IN PROFIT ELIGIBLE FOR DEDUCTION U/S.10B OF THE ACT. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS BY NOT APPRECIATING THAT THE GAIN DERIVED ON CONVERSION OF FUNDS FROM EEFC ACCOUNT INTO INDIAN RUPEE, ACCOUNT DOES NOT HAVE ANY PROXIMATE OR DIRECT NEXUS WITH EXPORT TRANS ACTIONS AND, THEREFORE, WILL NOT BE ELIGIBLE FOR DEDUCTION U/S 1 0B OF THE ACT. 3. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.3,12,111/- MADE ON ACCOUNT OF DISALL OWANCE U/S.14A OF THE ACT. 4. THE LD. CIT(A) HAS FURTHER ERRED IN LAW AND ON F ACTS BY NOT APPRECIATING THAT THE ASSESSEE COULD NOT ESTABLISH THAT THE INVESTMENT IN ASSETS YIELDING EXEMPT INCOME WAS CLE ARLY MADE OUT OF INTEREST FREE FUNDS AVAILABLE. 24. GROUND NOS.1 & 2 CONCERN ADDITION OF RS.1,83,21 ,375/- MADE ON ACCOUNT OF REDUCTION IN PROFIT ELIGIBLE FOR DEDUCTI ON UNDER S.10B OF THE ACT IN RESPECT OF CURRENCY RATE DIFFERENCE INCOME D UE TO FOREIGN CURRENCY RATE FLUCTUATION. 25. IN THIS REGARD, WE FIND THAT THE FIRST APPELLAT E AUTHORITY HAS EXAMINED THE FACTS OF THE CASE IN PERSPECTIVE IN TH E LIGHT OF LAW INTERPRETED BY THE HONBLE HIGH COURT IN THE CASE O F CIT VS. MOTOROLA INDIA ELECTRONICS PVT. LTD. [2014] 225 TAXMAN 11 (K ARNATAKA). 26. THE RELEVANT PARAS OF THE ORDER OF THE CIT(A) D EALING WITH THE ISSUE ARE REPRODUCED HEREUNDER FOR THE SAKE OF READ Y REFERENCE: ITA NOS. 788, 789, 719 & 720/AHD/16 [M/S. NABROS PH ARMA LTD.] A.YS. 2008-09 & 2011-12 - 11 - 5. VIDE GROUND NO.2, THE APPELLANT HAS CHALLENGED THE REDUCTION OF DEDUCTION U/S.106 OF THE I.T.ACT BY RS. 1,83,21, 375/-. THE A.O DEALT WITH THIS ISSUE VIDE PARA-4.3 TO 4.3.3 OF THE ASSESSMENT ORDER. THE OBSERVATION OF THE A.O IS REPRODUCED AS UNDER : - '4.3 CURRENCY CONVERSION INCOME OF RS. 1,83,21 ,375/-:- 4.3.1 A PERUSAL OF THE COLUMNAR PROFIT AND LOSS ACC OUNT OF THE ASSESSES SHOWS THAT THE ASSESSEE HAS SHOWN OTHER IN COME OF RS. 1,99,96,688/- UNDER THE SUBHEAD 'CURRENCY CONVERSIO N INCOME'. THE BIFURCATION PROVIDED BY THE ASSESSEE BETWEEN EL IGIBLE AND NON-ELIGIBLE UNIT IS AT RS. 1,83,21,375/- AND RS. 1 6,75,313/- RESPECTIVELY. A CAREFUL PERUSAL SHOWS THAT THE ASSE SSEE HAS CLAIMED 10B ON 'CURRENCY CONVERSION INCOME' OF RS. 1,83,21,375/- IN EOU UNIT ALSO. ON BEING ASKED TO J USTIFY THE CLAIM ON THIS SUM U/S. 10B, THE ASSESSEE COULD NOT FURNISH ANY COGENT REASON. THE ASSESSEE SUBMITTED DURING THE AS SESSMENT PROCEEDINGS THAT THE ASSESSEE MAINTAINS TWO ACCOUNT S. THE ENTIRE EXPORT PROCEEDS ON REALIZATION ARE CREDITED TO EEFC ACCOUNT MAINTAINED IN FOREIGN CURRENCY ITSELF. ANY GAIN ON SUCH FOREIGN CURRENCY FLUCTUATION IS ACCOUNTED FOR UNDER THE HEA D 'FOREIGN CURRENCY FLUCTUATION GAIN' ACCOUNTS. THE ASSESSEE A LSO SUBMITTED THAT WHENEVER ASSESSEE REQUIRES FUND THEN THE FUND IS TRANSFERRED FROM EEFC ACCOUNT TO BANK ACCOUNT MAINT AINED IN INDIAN RUPEE. AND WHATEVER PROFIT/LOSS ARISES OUT O F SUCH CONVERSION OF FUNDS FROM EEFC ACCOUNT INTO INDIAN R UPEE ACCOUNT, SUCH GAIN/LOSS IS SHOWN AS INCOME/LOSS UND ER 'CURRENCY CONVERSION INCOME' ACCOUNT. THE CLAIM OF THE ASSESS EE ON THIS SUM IS NOT PROPER. HON'BLE ITAT CHENNAI BENCH IN TH E CASE OF ASTRON DOCUMENT MANAGEMENT (P) LTD. 16 TAXMANN.COM 33 (2011) HAS HELD THAT:- 'GAINS DERIVED BY AN ASSESSEE ON CONVERSION OF FUND S FROM EEFC ACCOUNT INTO INDIAN RUPEE ACCOUNT, DOES NOT HA VE ANY PROXIMATE OR DIRECT NEXUS WITH EXPORT TRANSACTION A ND, THEREFORE, WILL NOT BE ELIGIBLE FOR DEDUCTION UNDER SECTION 70 6.' 4.3.2 RELIANCE FOR THIS RATIO IS ALSO PLACED ON THE ORDER OF HON'BLE ITAT IN THE CASE OF TRICOM INDIA LTD 36 SOT 302 (MUM) (2010). 4.3.3 IN VIEW OF THE ABOVE, THE ASSESSEE'S ELIGIBLE EXEMPTION/DEDUCTION U/S 10B IS REQUIRED TO BE REDUC ED BY RS. 7,83,27,375/-.' 5.1 ON THIS ISSUE THE APPELLANT VIDE ITS SUBMISSION DATED 10/9/2015 SUBMITTED AS UNDER :- 'THE LD AO ALSO ERRED IN LAW AND ON FACTS IN REDUCI NG THE DEDUCTION UNDER SECTION 10B OF THE INCOME TAX ACT, 1961 BY REDUCING THE PROFIT OF ELIGIBLE UNIT BY AN AMOUNT O F RS.7,83,27,375/- IN RESPECT OF CURRENCY RATE DIFFER ENCE INCOME ITA NOS. 788, 789, 719 & 720/AHD/16 [M/S. NABROS PH ARMA LTD.] A.YS. 2008-09 & 2011-12 - 12 - DUE TO FOREIGN CURRENCY RATE FLUCTUATION IGNORING T HE SUBMISSIONS REGARDING THE PURPOSE OF KEEPING THE AMOUNT IN THE EFCC ACCOUNT FOR BUSINESS OF THE APPELLANT AND NOT AS NO RMAL INVESTMENT. SINCE THE MONEY WAS KEPT FOR MEETING WI TH APPELLANT'S BUSINESS OBLIGATIONS, THE GAIN IS PART OF ELIGIBLE PROFIT OF THE UNDERTAKING / UNIT AND ENTITLED TO DE DUCTION U/S. 10B. IT BE SO HELD NOW AND DEDUCTION BE ALLOWED WIT H REFERENCE TO THIS INCOME AS CLAIMED IN THIS REGARD YOUR APPELLANT DRAWS YOUR HONOUR'S K IND ATTENTION TO THE PROVISIONS OF SECTION 10B(4) WHICH READS AS UNDER: ' S . 10B(4) FOR THE PURPOSES OF SUB-SECTION (1), T HE PROFITS DERIVED FROM EXPORT OF ARTICLES OR THINGS OR COMPUT ER SOFTWARE SHALL BE THE AMOUNT WHICH BEARS TO THE PROFITS OF T HE BUSINESS OF THE UNDERTAKING, THE SAME PROPORTION AS THE EXPORT TURNOVER IN RESPECT OF SUCH ARTICLES OR THINGS OR COMPUTER SOFT WARE BEARS TO THE TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY TH E UNDERTAKING.' IT IS THUS CLEAR AFTER THE ABOVE AMENDMENT IN SECTI ON 706 IN SUB- SECTION (4), THAT WHAT IS EXEMPT U/S 706 AFTER 1.04 .2001 IS NOT MERELY THE PROFITS AND GAINS FROM EXPORT OF ARTICLE S BUT ALSO THE INCOME FROM BUSINESS OF UNDERTAKING. THEREFORE THE PROFIT ELIGIBLE FOR DEDUCTION U/S 706 IS THE PROFIT OF THE BUSINESS OF THE UNDERTAKING. NOW AS ALREADY EXP LAINED TO THE AO, THE EXPORT REALISATION IN FOREIGN CURRENCY IS K EPT IN THE EEFC ACCOUNT. WHEN THERE IS GAIN ON CONVERSION OF T HE SAID FOREIGN CURRENCY BALANCE, THE SAME IS ACCOUNTED FOR AS CURRENCY CONVERSION INCOME. THIS INCOME IS INCOME OR PROFIT OF THE BUSINESS OF THE UNDERTAKING. AS NOTED BY AO IN PARA 4.3.1 OF THE ASSESSMENT ORDER , RS.1,83,21,375/- PERTAINED TO SU CH INCOME OF EOU UNIT. THE LD AO ERRED IN OBSERVING THAT THIS SU M IS NOT ELIGIBLE FOR DEDUCTION U/S 10B . YOUR APPELLANT DRAWS YOUR HONOUR'S KIND ATTENTION T O THE JUDGMENT OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS MOTOROLA INDIA ELECTRONICS P LTD (2014) 225 TAXM AN 11 (KAR) COPY ATTACHED EXHIBIT-A . THE HON'BLE HIGH COURT HA S CONSIDERED THE SPECIFIC PROVISIONS OF SECTION 10B A ND SUB-SECTION 10B(4) AND HELD THAT EVEN INTEREST INCOME EARNED FR OM INTER- CORPORATE LOANS AND DEPOSITS LYING IN EEFC ACCOUNT IS ELIGIBLE TO DEDUCTION U/S 10B DUE TO THE FACT THAT THE PROVISIO NS AFTER AMENDMENT IN SUB-SECTION (4) OF SECTION 706 (REPROD UCED ABOVE) THE PROFIT DERIVED FROM EXPORT MEANS PROFIT OF THE BUSINESS OF THE UNDERTAKING AND HOT THE PROFITS AND GAINS FROM EXPO RT OF ARTICLES . THE HIGH COURT HAS CONSIDERED ALL THE RELEVANT JUDG MENTS AND CLEARLY HELD THAT SIMILAR PROVISIONS RE NOT THERE I N SECTION 80HHC WHILE S. 80HHB SPECIFICALLY EXCLUDES SUCH INC OME. THUS THE ABOVE INCOME BEING PART OF THE PROFIT OF THE BU SINESS OF THE ITA NOS. 788, 789, 719 & 720/AHD/16 [M/S. NABROS PH ARMA LTD.] A.YS. 2008-09 & 2011-12 - 13 - UNDERTAKING WHICH FACT IS NOT DISPUTED, THE LD AO E RRED IN EXCLUDING THE SAME FROM THE PROFIT ELIGIBLE FOR DED UCTION U/S 10B. THE SAID JUDGMENT OF THE KARNATAKA HIGH COURT IS AL SO FOLLOWED BY THE JURISDICTIONAL AHMEDABAD ITAT IN THE CASE OF M/S KARP MFG. CO VS ADDL CIT ITA NO: 374 & 766/AHD/2011 COPY ATTACHED EXHIBIT-B. THE JURISDICTIONAL TRIBUNAL VIDE PARA 11 OF THE ORDER HAS HELD THAT AS PER THE SAID JUDGMENT OF KAR NATAKA HIGH COURT WHICH HAS TAKEN IN TO ACCOUNT ALL JUDGMENTS O N THE POINT AT ISSUE IT HAS HELD THAT, DUE TO SUB-SECTION (4) OF S ECTION 706, WHAT IS EXEMPT IS NOT MERELY PROFITS AND GAINS FROM EXPO RT OF GOODS BUT ALSO THE INCOME FROM THE ENTIRE BUSINESS OF THE UNDERTAKING. IN VIEW OF ABOVE BINDING JUDGMENTS AND THE DECISION OF THE SPECIAL BENCH IN THE CASE OF M/S MARAL OVERSEAS BY INDORE BENCH, THE DISALLOWANCE MADE BY THE ID AO IS UNJUST IFIED. IT BE SO HELD NOW AND DISALLOWANCE ON RS.7,83,27,376/- BE DELETED. AS FAR AS THE TRIBUNAL DECISIONS OF CHENNAI BENCH A ND MUMBAI ITAT RELIED ON BY AO, THE SAME ARE NOT APPLICABLE S INCE THEY HOLD THAT SECTION 10B IS SIMILAR TO SECTION 80HHC W HICH IS FAIRLY AND CLEARLY DEALT WITH BY THE KARNATAKA HIGH COURT AND AHMEDABAD TRIBUNAL IN ABOVE CASES TO BE QUITE DIFFE RENT. ALSO SINCE THE DECISION OF AHMEDABAD TRIBUNAL BEING OF JURISDICTIONAL ITAT AND THE JUDGMENT OF THE HIGH CO URT BEING BINDING ON APPELLATE AUTHORITY , WHICH HAS THOROUGH LY DEALT WITH AND DISTINGUISHED VARIOUS OTHER DECISIONS THE DISAL LOWANCE MADE BY AO ON DECISIONS WHICH ARE NOT APPLICABLE DESERVE S TO BE DELETED. THIS GROUND NEEDS TO BE ALLOWED. IT BE ALL OWED NOW.' 5.2 I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF THE APPELLANT, THE OBSESRVATION OF THE A.O. CASE RELIED UPON BY TH E A.O AND THE APPELLANT. THE A.O HAS REDUCED THE DEDUCTION CLAIME D U/S.10B OF THE ACT BY RS. 1,83,21,375/- FOR THE REASON THAT THE AP PELLANT HAD CREDITED THE EXPORT PROCEEDS REALIZATION TO THE EEF C ACCOUNT. THE A.O HAS RELIED ON THE HON'BLE ITAT CHENNAI BENCH OR DER IN THE CASE OF ASTRON DOCUMENT MANAGEMENT PVT. LTD. 16 TAMAN.CO M 33 (2011) AS WELL AS ON THE RATIO OF HON'BLE ITAT MUMBAI IN T HE CASE OF TRICOM INDIA LTD. 36 SOT 302 (2010). THE APPELLANT ON THE OTHER HAND HAS RELIED ON THE PROVISIONS OF (SEC.10B94) WHEREIN THE APPELLANT IS EMPHASIZING ON THE WORDS 'PROFITS OF THE BUSINESS O F THE UNDERTAKING.' ACCORDING TO THE APPELLANT THE PROFIT ELIGIBLE FOR DEDUCTION U/S.10B IS THE PROFIT OF THE BUSINESS OF THE UNDERTAKING. TH E EXPORT REALIZATION IN FOREIGN CURRENCY KEPT IN EEFC ACCOUNT RELATES TO THE BUSINESS OF UNDERTAKING. THE APPELLANT HAS RELIED ON THE RATIO OF HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS MOTOROLA INDIA ELECTRONICS PVT. LTD. (2014) 225 TAXMAN 11 (KAR). I N THE SAID RATIO THE HON'BLE HIGH COURT HAD CONSIDERED THESE SPECIFI C PROVISIONS OF SEC. 10B AND SUB-SECTION 10B(4) AND HELD THAT INTER EST INCOME EARNED FROM INTER-CORPORATE LOANS AND DEPOSITS LYING IN EE FC ACCOUNTS ARE ELIGIBLE FOR DEDUCTION U/S.10B FOR THE REASON THAT AS PER THE AMENDED SECTION 10B(4), THE PROFIT DERIVED FROM EXPORT MEAN S PROFIT OF THE ITA NOS. 788, 789, 719 & 720/AHD/16 [M/S. NABROS PH ARMA LTD.] A.YS. 2008-09 & 2011-12 - 14 - BUSINESS OF THE UNDERTAKING AND NOT JUST THE PROFIT S AND GAINS FROM EXPORT OF ARTICLES. THE SAID JUDGMENT OF KARNATAKA HIGH COURT IS ALSO FOLLOWED BY JURISDICTIONAL ITAT AHMEDABAD, IN THE CASE OF M/S. KARP MANUFACTURING CO. VS ADDL. CIT ITA .374&766/AH D/2011. I AGREE WITH THE VIEWS EXPRESSED BY THE APPELLANT A S WELL AS THE CASE LAWS RELIED UPON BY THE APPELLANT. SINCE T HE EXPORT PROFITS KEPT IN THE EEFC ACCOUNT RELATE TO THE BUSINESS OF THE UNDERTAKING ON WHICH THE APPELLANT IS CLAIMING EXEMPTION U/S.10 B OF THE ACT, I HEREBY DIRECT THE A.O TO DELETE THE REDUCTION OF DE DUCTION U/S.10B FOR RS.1,83,21,375/-. THUS, THIS GROUND OF APPEAL IS AL LOWED. 27. WE FIND THAT THE ACTION OF THE CIT(A) IS WELL S UPPORTED IN LAW AND DOES NOT CALL FOR ANY INTERFERENCE. THE REVENU E HAS NOT OFFERED ANY COGENT CASE FOR DISLODGING THE ORDER OF THE CIT (A). THUS, WE DECLINE TO INTERFERE. 28. IN THE RESULT, GROUND NOS. 1 & 2 OF THE REVENUE S APPEAL ARE DISMISSED. 29. GROUND NOS. 3 & 4 CONCERN DISALLOWANCE OF RS.3, 12,111/- UNDER S.14A OF THE ACT. THE AFORESAID DISALLOWANCE COMPR ISES OF DISALLOWANCE OF RS.1,23,439/- TOWARDS PROPORTIONATE RULE8D(2)(II) AND RS.1,88,672/- TOWARDS ADMINISTRATIVE EXPENDITURE P RESUMED TO BE ATTRIBUTABLE FOR EARNING TAX FREE INCOME UNDER S.8D (2)(III) OF THE RULES. 30. ON PERUSAL OF THE ORDER OF THE CIT(A), WE FIND THAT AFORESAID DISALLOWANCE COMPUTED BY THE AO UNDER RULE8D IS PAR TLY JUSTIFIED TO THE EXTENT OF PROPORTIONATE INTEREST AMOUNTING TO R S.1,23,435/- IN VIEW OF AVAILABILITY OF INTEREST FREE FUNDS IN EXCESS OF CORRESPONDING INVESTMENTS YIELDING TAX FREE INCOME. THEREFORE, T HE ACTION OF THE CIT(A) TO THIS EXTENT IS APPROVED. HOWEVER, THE DI SALLOWANCE OF RS.1,88,372/- IN TERMS OF RULE 8D(2)(III) COULD NOT HAVE BEEN ASSAILED BY THE CIT(A) IN VIEW OF THE STATUTORY PRESUMPTION AVAILABLE TO THE AO UNDER THE RULE. IN THE ABSENCE OF ANY ASSERTION MADE ON BEHALF OF ITA NOS. 788, 789, 719 & 720/AHD/16 [M/S. NABROS PH ARMA LTD.] A.YS. 2008-09 & 2011-12 - 15 - THE ASSESSEE TO CONTROVERT THE DISALLOWANCE, WE REV ERSE THE ACTION OF THE CIT(A) TO THIS EXTENT AND ENDORSE THE ACTION OF THE AO. THEREFORE, THE DISALLOWANCE MADE BY THE AO TO THE EXTENT OF RS .1,88,372/- IS SUSTAINED. 31. IN THE RESULT, GROUND NOS. 3 & 4 ARE ALLOWED IN PART. 32. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY ALLOWED. 33. IN THE COMBINED RESULT, ASSESSEES BOTH APPEALS ARE ALLOWED, WHEREAS REVENUES APPEAL IN AY 2008-09 IS DISMISSED AND IN AY 2011-12 IS PARTLY ALLOWED. SD/- SD/- (MADHUMITA ROY) (PRADIP K UMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 01/11/2018 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 01/11/20 18