ACIT, CHENNAI V. Virgo Properties Pvt Ltd., CHENNAI

ITA 741/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3941 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 15-05-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 24-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANATH KUMAR RAHA JT
• Assessee Lawyers: K BALASUBR AMANIAN
• Keywords: Capital asset; Business expenditure; Earning of tax free income
• Section: 143(3); 14A; 115JB; 28

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B, CHENNAI , ! ' ! # . $% , & '( ) BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ITA NO.741/MDS/2016 & * +* / ASSESSMENT YEAR : 2012-13 ASST. COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 3(2), CHENNAI 600 034. VS. VIRGO PROPERTIES PVT. LTD. NO.5, THIRUMURTHY STREET, T.NAGAR, CHENNAI 600 017. [PAN: AABCV 9182A] ( /APPELLANT ) ( / RESPONDENT ) ,- / 0 / APPELLANT BY : SHRI SANATH KUMAR RAHA, JT. CIT 12,- / 0 / RESPONDENT BY : SHRI K.BALASUBRAMANIAN, ADVOCATE ! / 3 / DATE OF HEARING : 16.05.2017 4+ / 3 / DATE OF PRONOUNCEMENT : 31.07.2017 /O R D E R PER SANJAY ARORA, AM : THIS IS AN APPEAL BY THE REVENUE AGITATING THE ORD ER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-11, CHENNAI (CIT(A) FOR S HORT) DATED 28.12.2015, ALLOWING THE ASSESSEES APPEAL CONTESTING ITS ASSES SMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) DATED 19.03.2015 FOR ASSESSMENT YEAR (AY) 2012-13. 2. THE APPEAL RAISES TWO ISSUES, WHICH WE SHALL TAK E UP IN SERIATIM. THE FIRST ISSUE, RAISED PER GDS. 2.1 AND 2.2 GD. NO.1 BEING GENERAL IN NATURE WARRANTING 2 ITA NO. 741/MDS/2016 (AY 2012-13) ASST. CIT V. VIRGO PROPERTIES PVT. LTD. NO ADJUDICATION, CHALLENGES THE DELETION OF DISALLO WANCE U/S. 14A, EFFECTED IN THE SUM OF . 33,11,256/-. THE DELETION IS FOR THE REASON OF NO DIVIDEND INCOME, I.E., INCOME NOT FORMING PART OF THE TOTAL INCOME, FROM I NVESTMENT IN SHARES, FOLLOWING THE DECISION IN CHEMINVEST LTD. V. CIT [2015] 378 ITR 33 (DEL). THE MATTER, EVEN AS POINTED BY THE LD. AUTHORIZED REPRE SENTATIVE (AR) DURING HEARING, IS NO LONGER IS RES INTEGRA AS FAR AS THE CHENNAI BENCHES OF THE APPELLATE TRIBUNAL ARE CONCERNED IN VIEW OF THE DEC ISION BY THE HON'BLE JURISDICTIONAL HIGH COURT IN REDINGTON (INDIA) LTD. V. ADDL. CIT [2017] 77 TAXMANN.COM 257 (MAD) (COPY ON RECORD). THE HON'BLE COURT HAS CLARIFIED THAT ABSENCE OF TAX EXEMPT INCOME SHALL PRECLUDE INVOCAT ION OF S. 14A. AT THE SAME TIME, HOWEVER, THE EXPENDITURE, IF ANY, INCURRED IN RELATION TO THE INVESTMENT IN SHARES, IN-AS-MUCH AS THERE HAS BEEN ACTIVITY BY WA Y OF ACQUISITION AND DISPOSAL OF SHARES DURING THE YEAR, WOULD NOT BE ALLOWABLE A S BUSINESS EXPENDITURE. THIS IS AS INVESTMENT IN SHARES IS NOT A BUSINESS OF THE ASSESSEE-COMPANY, WHICH IS DEVELOPMENT OF REAL ESTATE, AS BY WAY OF CONSTRUCTI ON OF FLATS AND COMMERCIAL COMPLEXES. THE SAME WOULD THEREFORE STAND TO BE DIS ALLOWED UNDER THE APPLICABLE PROVISIONS IN THE COMPUTATION OF BUSINES S INCOME U/S. 28 OF THE ACT. IN THIS REGARD, THE LD. CIT(A) HAS GIVEN A DEFINITE FINDING TO THE EFFECT THAT NO INTEREST ON BORROWINGS, WHICH ARE SHORT TERM BORROW INGS, IS RELATABLE TO THE INVESTMENT IN SHARES, AND WHICH FINDING, BASED ON T HE UTILIZATION OF THE BORROWED FUNDS, HAS NOT BEEN DISPUTED BY THE REVENU E. ACCORDINGLY, NO DISALLOWANCE U/S. 36(1)(III), I.E., IN RELATION TO THE FINANCING COST OF THE INVESTMENTS, WOULD STAND TO ARISE. THE ADMINISTRATI VE COST, DISALLOWED BY THE ASSESSING OFFICER (AO) AT . 15,58,038/- (@ 0.5% OF THE AVERAGE INVESTMENT) U/S. 14A, WOULD STAND TO BE DISALLOWED U/S. 37(1). THIS IS AS IT IS INCONCEIVABLE THAT INVESTMENTS COULD BE MADE, WHICH INVOLVE DECIS ION MAKING, INCLUDING AS TO THEIR QUANTUM AND, FURTHER, HELD, INVOLVING PERIODI C REVIEW, OR EVEN SOLD AS A RESULT, BY A COMPANY WITHOUT INCURRING ANY ADMINIST RATIVE COST. EVEN AS THE TOTAL 3 ITA NO. 741/MDS/2016 (AY 2012-13) ASST. CIT V. VIRGO PROPERTIES PVT. LTD. INVESTMENT AS AT THE YEAR-END ( .29.26 CRORES) IN THE PRESENT CASE IS LOWER THAN THAT OBTAINING AS AT ITS BEGINNING ( . 33.06 CR.), THERE MAY BE, BESIDES DISPOSAL, ACQUISITION OF SHARES AS WELL DURING THE YEAR, SIGN IFYING, IN EITHER CASE, ACTIVITY. WHY, AS INDICATED, EVEN THE DECISION AS TO THE HOLD ING AN INVESTMENT MAY REQUIRE ITS REVIEW AND, THUS, INCURRING CORRESPOND ING COST. THE INCURRING OF EXPENDITURE IS PRINCIPALLY A MATTER OF FACT . AGAIN, WHAT WOULD BE RELEVANT IN THE MATTER OF DETERMINING THIS EXPENDITURE IS THE EXTEN T TO WHICH THE ASSESSEES RECORDS DETAIL THE RELEVANT EXPENDITURE. THIS IS AS THE ACCOUNTS MAY NOT BEAR THE PRECISE FUNCTION OR PURPOSE FOR WHICH AN ADMINISTRA TIVE COST IS INCURRED. FOR EXAMPLE, A TELEPHONE OR TRAVELLING EXPENSE ACCOUNT MAY INDICATE ONLY THE BROAD NATURE OF THE EXPENDITURE, AND ONLY ITS FURTHER EXA MINATION WOULD REVEAL THE PURPOSE FOR WHICH IT HAS BEEN INCURRED. LIKE-WISE, FOR THE PERSONNEL COST. HOWEVER, WHETHER FOR THE PURPOSE OF S. 14A OR FOR A LLOWANCE U/S. 37(1), IT IS THIS FUNCTIONAL INFORMATION THAT IS REQUIRED. WE OBSERVE NO FINDING BY THE LD. CIT(A) WITH REGARD TO ADMINISTRATIVE EXPENDITURE, EVEN AS THE AO HAS APPLIED THE RATIO AS PRESCRIBED U/R. 8D(2)(III) OF THE ACT, I.E., FOR ESTIMATING THE RELEVANT EXPENDITURE FOR DISALLOWANCE U/S. 14A WHERE THE ASS ESSEES ACCOUNTS DO NOT EXHIBIT OR ARE NOT AMENABLE TO DETERMINATION OF SUC H EXPENDITURE. AGAIN, THE BULK OF THE INVESTMENT IN SHARES IS, AS SUBMITTED, IN SUBSIDIARY COMPANIES, AND WHICH, WHERE SO, WOULD AGAIN HAVE A BEARING ON THE QUANTUM OF THE EXPENDITURE IN-AS-MUCH AS THE SAME MAY BE MADE IN PURSUANCE OF POLICY DECISIONS. THE MATTER, ACCORDINGLY, IN OUR CONSIDERED VIEW, WOULD REQUIRE RE-EXAMINATION AT THE END OF THE AO, FOR WHICH PURPOSE THE SAME IS RESTOR ED TO HIS FILE FOR DETERMINATION PER A SPEAKING ORDER AFTER ALLOWING T HE ASSESSEE A REASONABLE OPPORTUNITY TO STATE AND PRESENT ITS CASE. IN THE ABSENCE OF THE ASSESSEE FURNISHING THE RELEVANT DETAILS OR INFORMATION, THE AO SHALL BE AT LIBERTY TO DRAW INFERENCE/S CONSISTENT WITH THE INFORMATION AND THE MATERIAL ON RECORD. WE DECIDE ACCORDINGLY, AND THE ASSESSEE SUCCEEDS IN PA RT. THE DISALLOWANCE THAT 4 ITA NO. 741/MDS/2016 (AY 2012-13) ASST. CIT V. VIRGO PROPERTIES PVT. LTD. MAY FINALLY SUSTAIN, WE CLARIFY, SHALL BE U/S. 37(1 ) AND NOT U/S. 14A. WE DECIDE ACCORDINGLY. 3. THE NEXT ISSUE, RAISED PER GDS. 3.1 AND 3.2, IS IN RESPECT OF THE INCLUSION OR OTHERWISE OF THE CAPITAL GAIN ARISING TO THE ASS ESSEE ON THE TRANSFER OF A CAPITAL ASSET/S DURING THE YEAR (AT . 404.88 LACS), AND WHICH STANDS CREDITED IN ITS ACCOUNTS DIRECTLY TO THE GENERAL RESERVE ACCOUNT, S O THAT IT DOES NOT FORM PART OF THE PROFIT AND LOSS ACCOUNT AND, THUS, THE BOOK PRO FIT SUBJECT TO TAX U/S. 115JB. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE PRE SENTED A CALCULATION (COPY ON RECORD), WHEREBY THE TAX ON REGULAR INCOME ( . 490.45 LACS), I.E., UPON DELETING THE DISALLOWANCE U/S. 14A, HAVING BEEN ALLOWED BY T HE LD. CIT(A), WORKS TO A FIGURE ( . 159.13 LACS) EXCEEDING THAT ( . 157.76 LACS) ON THE BOOK PROFIT, I.E., ADJUSTED FOR THE DISALLOWANCE U/S. 14A, SINCE DELET ED. ON THAT BASIS IT WAS SUBMITTED BY HIM THAT THE ISSUE BECOMES UNFRUCTUOUS . WE HAVE CONFIRMED THE DELETION OF THE DISALLOWANCE U/S. 14A IN FULL. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) RAISED NO OBJECTION TO THE CALC ULATION BY THE LD. AR, WHICH IS APPARENTLY IN ORDER. THE AO, WHILE GIVING APPEAL EFFECT TO THIS ORDER, SHALL IN ANY CASE VERIFY THE RELEVANT CALCULATIONS IN-AS-MUC H AS THE ASSESSEES TAX LIABILITY IS ONLY THE HIGHER OF THE TAX ON THE REGU LAR INCOME, AS FINALLY OBTAINS, AND THAT ON BOOK PROFIT. COMING TO THE MERITS OF THE ADJUSTMENT MADE, ON WHI CH WE ARE REQUIRED TO IN ANY CASE ADJUDICATE, IT IS WELL SETTLED THAT S. 115-JB IS A SELF CONTAINED CODE, AND ONLY THE ADJUSTMENTS DELINEATED UNDER EXPLANATION-1 TO S. 115JB COULD BE MADE TO THE NET PROFIT AS DISCLOSED BY THE PROFIT A ND LOSS ACCOUNT ADOPTED BY THE COMPANY (IN ITS ANNUAL GENERAL MEETING) TO ARRIVE AT THE BOOK PROFIT U/S. 115JB. REFERENCE FOR THIS MAY BE MADE TO THE DECISIONS IN APOLLO TYRES LTD. V. CIT [2002] 255 ITR 273 (SC) AND AJANTA PHARMA LTD. V. CIT [2010] 327 ITR 305 (SC). WHAT, THEREFORE, NEEDS TO BE SEEN IN THIS REG ARD IS IF THE REVENUE, IN 5 ITA NO. 741/MDS/2016 (AY 2012-13) ASST. CIT V. VIRGO PROPERTIES PVT. LTD. INCREASING THE PROFIT ON THE REDEMPTION OF SHARES, HAS FOLLOWED ANY OF THE SPECIFIED ADJUSTMENTS UNDER EXPLANATION 1 BELOW S. 115JB (2). CLAUSE (B) OF THE SAID EXPLANATION PRESCRIBES AN ADJUSTMENT BY WAY OF AN INCREASE (IN THE NET PROFIT AS PER THE PROFIT & LOSS A/C) FOR ANY AMOUNT CARRIED TO ANY RESERVE (OTHER THAN THAT SPECIFIED U/S. 33AC). THE LD. CIT(A) HAS FAILED TO NOTE THIS CLAUSE. IN FACT, THAT CAPITAL GAIN THOUGH NON-RECURRING AND EXCEPTIONAL IN NATURE, FORMS PART OF THE PROFIT AND LOSS ACCOUNT AND, THUS, BOOK PROFIT, IS WELL ACCEPTED. REFERENCE FOR THIS MAY BE MADE TO THE DECISIONS IN SRI HARIRAM HOTELS (P.) LTD. V. CIT [2016] 237 TAXMAN 564 (KAR) (REFER PARAS 14 TO 16) , PLACED BY THE LD. AR ON FILE, AND CIT V. VEEKAYAL INVESTMENT CO. (P.) LTD . [2001] 249 ITR 597 (BOM), RELIED UPON BY THE AO, HOLDING THE SAME TO B E IN CONSONANCE WITH PART II OF SCHEDULE VI TO THE COMPANIES ACT, 1956 AND, F URTHER, MANDATED BY THE ACCOUNTING STANDARD SPECIFIED U/S. 211(3C) OF THE S AID ACT, BEING THE GOVERNING LAW FOR COMPANIES. PARA 34 OF THE ACCOUNTING STANDA RD (AS) 13, ISSUED BY ICAI, WHICH SHALL PREVAIL, AS EXPLAINED IN SRI HARIRAM HOTELS (P.) LTD. (SUPRA) WITH REFERENCE TO SS. 211(3A) TO (3C) OF THE COMPAN IES ACT, PRESCRIBES THAT ON THE DISPOSAL OF AN INVESTMENT, THE DIFFERENCE BETWE EN THE CARRYING AMOUNT AND NET DISPOSAL PROCEEDS SHOULD BE CHARGED OR CREDITED TO THE PROFIT AND LOSS ACCOUNT. FURTHER STILL, CAPITAL GAINS ON TRANSACTIO NS IN SECURITIES HAS BEEN SPECIFIED FOR REDUCTION (FROM THE NET PROFIT) ONLY IN THE CASE OF A FOREIGN COMPANY (CL. (IID) TO EXPLANATION 1 , INSERTED W.E.F. 01/4/2016). THE SAME BY ITSELF IMPLIES, I.E., IF THERE WERE TO BE ANY DOUBT IN THE MATTER, THAT THE CAPITAL GAIN IN THE CASE OF AN ASSESSEE WHICH IS NOT A FORE IGN COMPANY, BEING NOT SPECIFICALLY PROVIDED, IS NOT TO BE REDUCED (FROM T HE NET PROFIT) IN ARRIVING AT THE BOOK PROFIT, I.E., WHERE, AS REQUIRED BY LAW, THE S AME STANDS CREDITED TO THE PROFIT AND LOSS ACCOUNT. CONTINUING FURTHER, AS A READING OF S. 115-JB(2) WOULD SHOW, T HE PROFIT AND LOSS ACCOUNT, WHICH IS THE STARTING POINT FOR M AKING ANY ADJUSTMENT UNDER 6 ITA NO. 741/MDS/2016 (AY 2012-13) ASST. CIT V. VIRGO PROPERTIES PVT. LTD. EXPLANATION 1 BELOW S. 115-JB(2), HAS TO BE IN ACCORDANCE WITH P ARTS II & III OF SCHEDULE VI TO THE SAID ACT. TO SAY, THEREFORE, AS DOES THE HONBLE COURT IN SRI HARIRAM HOTELS (P.) LTD. (VIDE PARA 13), DISAGREEING THUS WITH VEEKAYAL INVESTMENT CO. (P.) LTD . (SUPRA), THAT THE SAID CLAUSE (B) CANNOT BE GIVEN EFFECT TO, IN OUR HUMBLE VIEW, MAY NOT BE CORRECT INASMUCH AS IT OPERATES TO DEFEAT THE CLEAR INTENT AND PRESCRIPTION OF LAW PER S. 115-JB( 2). THE ADJUSTMENT PER CL. (B) OF EXPLANATION 1 , IT NEEDS TO BE APPRECIATED, PRESUMES, IN VIEW OF S. 115-JB(2), THE PROFIT AND LOSS ACCOUNT TO BE PREPARED IN ACCOR DANCE WITH THE LAW . IT CANNOT BUT BE OTHERWISE ONCE THE LAW POSTULATES SO PER S. 115-JB(2). WHERE NOT SO PREPARED, IT IS HARDLY POSSIBLE FOR AN ASSESSEE TO CONTEND THAT CL. (B) OF EXPLANATION 1 CANNOT THEREFORE BE APPLIED. THIS IS AS A DIRECT C REDIT TO THE RESERVE ACCOUNT ONLY IMPLIES A DEBIT TO THE PROFIT AND LOSS ACCOUNT PREPARED IN ACCORDANCE WITH PARTS II & III OF SCH. VI TO THE CO MPANIES ACT, 1956, I.E., BEARING A CREDIT IN RESPECT OF THE GAIN, NEUTRALIZI NG THE SAID CREDIT. IT IS THIS DEBIT, WHICH THE LAW, PER ADJUSTMENT U/CL. (B), SEEKS TO I N EFFECT ELIMINATE. THAT IS, THE PURPOSE OF THE DEBIT TO THE PROFIT AND LOSS ACCOUNT IS ACHIEVED BY NON-CREDITING THE SAID ACCOUNT, I.E., KEEPING THE CREDIT OUTSIDE IT. NOT SO READING THE PROVISION, I.E., PURPOSEFULLY, WOULD AMOUNT TO NOT APPLYING TH E CLEAR LAW INASMUCH AS THE PROFIT AND LOSS ACCOUNT IS NOT PREPARED IN ACCORDAN CE WITH THE COMPANIES ACT, AS REQUIRED U/S. 115-JB(2) AND, FURTHER, AS EXPLAIN ED, RESULTS IN A SHEER VIOLATION OF THE CLEAR INTENT OF LAW, WHICH IS TO FORM THE FO UNDATION FOR ANY INTERPRETATIVE EXERCISE ( CIT V. BABY MARINE EXPORTS [2007] 290 ITR 323 (SC)). AS CLARIFIED BY THE APEX COURT IN CBI VS. KESHUB MAHINDRA & OTHERS [IN CURATIVE PETITION NOS. 39-42 OF 2010 IN CRIMINAL APPEAL NOS. 1672-1675 OF 1996], THAT , NO COURT, INCLUDING ITSELF, CAN PLACE AN INTERPRETATION ON A PROVISION OF LAW SO AS TO DEFEAT THE SAME. IN ITS WORDS: NO DECISION BY ANY COURT, THIS COURT NOT EXCLUDED, CAN BE READ IN THE MANNER AS TO NULLIFY THE EXPRESS PROVISIONS OF AN A CT OR THE CODE AND THE 1996 JUDGMENT NEVER INTENDED TO DO SO . 7 ITA NO. 741/MDS/2016 (AY 2012-13) ASST. CIT V. VIRGO PROPERTIES PVT. LTD. THOUGH, NO DOUBT, THE HONBLE COURT REFERS TO INTER PRETING A DECISION BY ANY COURT, THE PREMISE OF THE SAME IS THAT NO COURT COULD POSSIBLY READ A PROVISION OF LAW IN A MANNER SO AS TO DEFEAT IT. A RESERVE, IN FACT, BY DEFINITION, IS AN APPROPRIAT ION OF PROFITS, AND NOT A CHARGE THEREON, SO THAT ALL THAT CL. (B) SEEKS TO E NSURE IS THAT THE PROFIT AS PER THE PROFIT AND LOSS ACCOUNT IS IN CONSONANCE WITH THE A CCOUNTING PRINCIPLES AND STANDARDS, SINCE STATUTORILY MANDATED, OUSTING THE POSSIBILITY OF ANY RESERVE BEING CLAIMED AS A DEDUCTION FROM THE PROFIT AND, T HUS, IN COMPUTING THE BOOK PROFIT U/S. 115-JB. THIS, THEREFORE, CANNOT TO BE A LLOWED TO BE DEFEATED BY PREPARING THE PROFIT AND LOSS NOT IN ACCORDANCE WIT H PARTS II & III OF SCH. VI TO THE COMPANIES ACT, 1956 BY CREDITING THE PROFIT ON THE DISPOSAL OF AN INVESTMENT DIRECTLY TO A RESERVE ACCOUNT. ALL THAT IN THAT CASE, I.E., TO EVADE BOOK PROFIT TAX, WOULD BE REQUIRED IS TO CREDIT ANY INCO ME, INSTEAD OF TO THE PROFIT AND LOSS ACCOUNT, DIRECTLY TO THE RESERVE ACCOUNT. THE DECISION IN SRI HARIRAM HOTELS (P.) LTD. (SUPRA), THUS, PRESENTS A DICHOTOMY, WHICH IT DOES NOT ANSWER. THAT THERE IS NO ANSWER IN LAW WHERE THE PROFIT AND LOSS ACCOUNT IS NOT PREPARED IN ACCORDANCE WITH PARTS II & III OF SCHEDULE VI TO TH E COMPANIES ACT, 1956, VIOLATING THE EXPRESS PROVISION OF LAW (S. 115-JB(2 )), A PROPOSITION THAT IT SEEMS TO SUGGEST OR ADVANCE, CANNOT BE COUNTENANCED. THUS, EVEN WHERE THE SHARES REDEEMED ARE HELD AS A CAPITAL ASSET, SO THAT THE SURPLUS ON THEIR TRANSFER THUS IS A CAPITAL GAI N TO THE ASSESSEE-COMPANY, THE SAID GAIN/PROFIT IS TO BE INCLUDED IN ITS NET PROFI T, AND WHERE NOT CREDITED TO THE PROFIT AND LOSS ACCOUNT, AS IN THE INSTANT CASE, IS TO BE INCREASED UNDER CL. (B) TO EXPLANATION 1 TO S. 115-JB. THE SAME, AS EXPLAINED, IS EQUIVALEN T TO NEUTRALIZING THE DEBIT ON ITS ACCOUNT TO THE PROFIT AND LOSS ACC OUNT PREPARED IN ACCORDANCE WITH LAW, WHICH IS THE PURPORT OF THE ADJUSTMENT BY WAY OF SAID CLAUSE. THUS, NOTWITHSTANDING THE GAIN BEING CREDITED DIRECTLY TO THE RESERVE ACCOUNT, I.E., WITHOUT BEING ROUTED THROUGH THE PROFIT & LOSS ACCO UNT, AN ADJUSTMENT IN ITS 8 ITA NO. 741/MDS/2016 (AY 2012-13) ASST. CIT V. VIRGO PROPERTIES PVT. LTD. RESPECT UNDER CL. (B) TO EXPLANATION 1 BELOW S. 115-JB(2) SHALL ENSUE. THAT A DECISION BY A NON-JURISDICTIONAL HIGH COURT IS NOT A BINDING PRECEDENT FOR THE TRIBUNAL, IS WELL SETTLED (REFER: SURESH DESAI & ASS. V. CIT [1998] 230 ITR 912 (DEL); GEOFFERY MANNERS & CO. LTD. V. CIT [1996] 221 ITR 695 (BOM); CIT V . THANE ELECTRICITY SUPPLY LTD. [1994] 206 ITR 797 (BOM); PATIL VIJAYAKUMAR V. UNION OF INDIA [1985] 151 ITR 48 (KAR)). THE DECISION IN VEEKAYAL INVESTMENT CO. (P.) LTD . (SUPRA), IN OUR VIEW, WITH RESPECT, LAYS DOWN THE CORRECT PROPOSITION IN LAW. WE DECIDE ACCORDINGLY. 4. IN THE RESULT, THE REVENUES APPEAL IS PARTLY AL LOWED. ORDER PRONOUNCED ON JULY 31, 2017 AT CHENNAI . SD/- SD/- ( ! ' ! # . $% ) (DUVVURU RL REDDY) & /JUDICIAL MEMBER ( ) (SANJAY ARORA) /ACCOUNTANT MEMBER /CHENNAI, 5 /DATED, JULY 31, 2017. EDN 6 / 1&378 98+3 /COPY TO: 1. ,- /APPELLANT 2. 12,- /RESPONDENT 3. ! :3 ( )/CIT(A) 4. ! :3 /CIT 5. 8 ;< 1&3& /DR 6. <%* = /GF