Banco Products (India) Ltd., Baroda V. The Dy.CIT., Circle-1(1), Baroda

ITA 75/AHD/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6318 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 21-02-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 11-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH MEENA
• Assessee Lawyers: MILAN MEHTA
• Keywords: Earning of tax free income; Question of law; Cost of acquisition
• Section: 143(3); 234B; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER BANCO PRODUCTS PVT. (INDIA) LTD. BILL, NEAR BHAILI RAILWAY STATION, PADRA ROAD, BARODA - 391410, PAN: AAACB8629B (APPELLANT) VS THE DCIT, CIRCLE - 1(1), AAYKAR BHAVAN, RACE COURSE, VADODARA (RESPONDENT) REVENUE BY : S H RI OM PRAKASH MEENA , SR. D . R. ASSESSEE BY: S H RI MILAN MEHTA , A.R. DATE OF HEARING : 21 - 02 - 2 017 DATE OF PRONOUNCEMENT : 06 - 04 - 2 017 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2008 - 09 , AR I SES FROM ORDER O F THE CIT(A) - I, BARODA DATED 29 - 11 - 2011 IN APPEAL NO. CAB / I/40 /10 - 11 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 75 / A HD/20 12 A SSESSME NT YEAR 200 8 - 09 I.T.A NO. 75 /AHD/2012 A.Y. 2008 - 09 PAGE NO BANCO PRODUCTS (INDIA) LTD. VS. DCIT 2 2. THE ASSESSE E HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF AO IN MAKING A DISALLOWANCE OF RS. 3,19,784/ - INVOKING PROVISION OF SECTION 14A OF THE INCOME TAX ACT, 196 1. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF AO IN NOT ALLOWING DEDUCTION U/S. 80IA OF THE ACT AMOUNTING TO RS. 36,80,863/ - BY RE - COMPUTING THE PROFITS OF THE UNDERTAKING BY ADJUSTING T HE SALES VALUE OF THE POWER PRODUCED AND SUPPLIED BY THE COMPANY. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF AO IN DISALLOWING WEIGHTED DEDUCTION U/S 35(2AB) OF THE ACT AMOUNTING TO RS. 1,26,2 3,818/ - . 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF AO IN CHARGING INTEREST U/S. 234B OF THE INCOME TAX ACT, 1961. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FACT AND IN LA W IN CONFIRMING THE ACTION OF AO IN CHARGING INTEREST U/S. 234D OF THE INCOME TAX ACT, 1961. 6. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FACT AND IN LAW IN INITIATING PENALTY PROCEEDINGS U/S. 271(1)(C). GROUND NO. 1 (DISALLOWANCE OF RS. 3 , 19 , 784/ - ) 3. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAD RECEIVED DIVIDEND INCOME OF RS. 20,43,722/ - AND LONG TERM CAPITAL GAIN ON THE SALE OF EQUITY SHARES WHICH WAS EXEMPT UNDER THE IT. ACT. THE ASSESSE E WAS ASKED TO SHOW CAUSE AS WHY EXPENDITURE IN RESPECT OF EXEMPT INCOME CLAIMED SHOULD NOT BE CALCULATED AS PER NEW PROVISIONS OF SEC. 14A(2) R.W. RULE 8D. THE ASSESSEE HAS OBJECTED TO SUCH DISALLOWANCE ON THE I.T.A NO. 75 /AHD/2012 A.Y. 2008 - 09 PAGE NO BANCO PRODUCTS (INDIA) LTD. VS. DCIT 3 GROUND THAT THERE HAS BEEN SUBSTANTIAL ACCR UALS WHICH WERE UTILIZED WHILE MAKING THE INVESTMENT. THE ASSESSING OFFICER COULD NOT SATISFY WITH THE EXPLANATION OF THE ASSESSEE AND DISALLOWED AN AMOUNT OF RS. 3,19,784/ - AFTER WORKING OUT THE DISALLOWANCE AS PER RULE 8D OF THE INCOME TAX RULES . AGGRIEVED AGAINST THE DECISION OF THE ASSESSING OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER BY OBSERVING AS UNDER: - 3.2. I HAVE CONSIDERED FACTS OF THE CASE AND APP ELLANT'S SUBMISSIONS. IT IS NOT THE APPELLANT'S CASE THAT NO PART OF INTEREST BEARING FUNDS WERE USED FOR ACQUIRING SHARES ETC. WHICH YIELDED TAX FREE INCOME. BUSINESS FUNDS ARE MIXED UP AND IT CANNOT BE ACCEPTED THAT FUNDS DEPLOYED FOR EARNING TAX FREE IN COME WERE ENTIRELY OUT OF INTEREST FREE FUNDS AND ENTIRE INTEREST COST IS TO BE LOADED ON TO ACTIVITIES RESULTING IN TAXABLE INCOME. SINCE APPELLANT DID NOT ALLOCATE ANY INTEREST TOWARDS EXEMPT INCOME, IT IS A CASE FAILING UNDER SECTION 14A(2), I.E. A CASE WHERE CORRECTNESS OF APPELLANT'S CLAIM IN RESPECT OF EXPENDITURE DISALLOWABLE UNDER SECTION 14A IS DOUBTFUL. MOREOVER, APPELLANT DID NOT MAINTAIN SEPARATE ACCOUNTS FOR SOURCES OF FUNDS UTILIZED FOR SUCH INVESTMENTS. AS HELD BY HON'BLE KERALA HIGH COURT IN THE CASE OF CIT V. DHANALAKSHMY BANK LTD. (2011) 10 TAXMAN.COM 213 (KER), IF APPELLANT HAD A CASE THAT SEPARATE FUNDS AVAILABLE OR FUNDS SOURCED OTHER THAN THROUGH BORROWING ONLY WERE UTILIZED FOR INVESTING IN SECURITIES, BONDS AND SHARES WHICH YIELD TAX FREE INCOME, THEY COULD HAVE MAINTAINED SUCH ACCOUNTS AND PRODUCED BEFORE AO WHEN PROPORTIONATE DISALLOWANCE WAS PROPOSED. THE COURT FURTHER HELD THAT BY SUBSEQUENT AMENDMENT THROUGH SUB - SECTION (2) OF SECTION 14A AND BY PRESCRIBING RULE 8D, WHAT IS ACHIEV ED IS PRESCRIBING SPECIFIED GUIDELINES FOR DISALLOWANCE IN CASES WHERE SEPARATE ACCOUNTS ARE NOT AVAILABLE ON EXPENDITURE INCURRED FOR EARNING TAX FREE INCOME. IN THE CASE OF DHANUKA & SONS V. CIT CENTRAL - I, HON'BLE CALCUTTA HIGH COURT (2011) 12 TAXMANN.CO M 227 (CAL) HAS ALSO HELD THAT IN THE ABSENCE OF ANY MATERIAL DISCLOSING THE SOURCE OF ACQUISITION OF SHARES WHICH WAS WITHIN THE SPECIFIED KNOWLEDGE OF ASSESSEE, DISALLOWANCE OF EXPENSES ON PROPORTIONATE BASIS U/S. 14A WAS JUSTIFIED. WHERE TAX FREE INCOM E EARNING ACTIVITIES AND TAXABLE INCOME EARNING ACTIVITIES I.T.A NO. 75 /AHD/2012 A.Y. 2008 - 09 PAGE NO BANCO PRODUCTS (INDIA) LTD. VS. DCIT 4 ARE BOTH CARRIED OUT USING THE COMMON KITTY OF FUNDS, IT WOULD BE REASONABLE TO APPORTION THE INTEREST BURDEN BETWEEN THE TWO ACTIVITIES SINCE IT IS A CASE FALLING U/S. 14A(2). FROM AY 2008 - 09 ONWA RDS, RULE 8D PROVIDES SUCH MECHANISM OF ATTRIBUTING INTEREST AND OTHER - EXPENSES FOR THE PURPOSE OF SECTION 14A(2). FURTHER, IT CANNOT BE ACCEPTED THAT EXPENDITURE OF ADMINISTRATIVE OR MANAGERIAL NATURE WAS NOT AT ALL INCURRED TO EARN TAX F REE INCOME FROM INVESTMENT IN TAX FREE INCOME YIELDING SECURITIES. INVESTMENT DECISIONS ARE STRATEGIC DECISIONS REQUIRING TIME AND EFFORT ON PART OF TOP MANAGEMENT AND OTHER EMPLOYEES. ATTRIBUTION OF PART OF EMPLOYEE COSTS TOWARDS INVESTMENT ACTIVITIES IS THEREFORE JUSTIFIED. ONCE INCURRING OF EXPENDITURE TOWARDS MANAGERIAL AND ADMINISTRATIVE PURPOSES FOR EARNING INVESTMENT INCOME CANNOT BE RULED OUT, IT IS A CASE FALLING UNDER SUB - SECTION (2) OF SECTION 14A, I.E. APPELLANT'S CLAIM THAT NO EXPENDITURE WAS I NCURRED FOR EARNING TAX FREE INCOME IS INCORRECT. THE EXPENDITURE ATTRIBUTABLE TO EARNING OF TAX FREE INCOME IS THEN TO BE DETERMINED AS PER RULE - 80, WHICH WOULD ALSO INCLUDE ATTRIBUTION OF INTEREST EXPENDITURE. DISALLOWANCE U/S.14A R.W. RULE 8D OF RS.3,19 ,784/ - IS CONFIRMED. 4. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE LD. COUNSEL CONTENDED THAT THE ASSESSING OFFICER HAS INCORRECTLY INVOKED THE PROVISION OF SECTION 14A ON THE PRESUMPTION THAT THE ASSESSEE WOULD HAVE UTILIZED INTEREST BEARING FUNDS FOR MAKING INVESTMENT IN YIELDING TAX FREE INCOME. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. 5. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. WE HAVE ALSO GONE THRO UGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE JUDGMENT RELIED UPON BY THE LD. COUNSEL. WE FIND THAT ASSESSEE HAS NOT GIVEN DETAILS AS TO WHEN SHARES WERE ACQUIRED AND WHAT WAS THE SOURCE OF FINANCING COST OF ACQUISITION OF SHARES IN THE EARLIER YEAR AND IN THE CURRENT YEAR. WE OBSERVED THAT IT IS ALSO I.T.A NO. 75 /AHD/2012 A.Y. 2008 - 09 PAGE NO BANCO PRODUCTS (INDIA) LTD. VS. DCIT 5 NOT DISPUTED THAT THE ASS E SSEE HAS EARNED EXEMPT INCOME BECAUSE OF WHICH THE EXPENDITURE RELATED TO EARNING OF S UCH INCOME WOULD BE DISALLOWABLE IN TERMS OF THE PROVISIONS OF SEC . 14A OF THE ACT. AFTER CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE ABOUT AVAILABILITY OF SUFFICIENT OWN FUNDS , WE EXCLUDE INTEREST COMPONENTS OF RS. 88 , 991/ - OUT OF THE TOTAL DISALLOWANCE OF RS. 3,19,784/ - AND RESTRICT THE DISALLOWANCE TO RS. 2 , 30 , 793/ - . THEREFORE , THIS GROUND OF THE ASSESSEE IS PARTLY ALLOWED. GROUND NO. 2 (NOT ALLOWING DEDUCTION U/S. 80IA OF THE ACT AMOUNTING TO RS. 36,86,863 / - ) 6. THE LD. COUNSEL OF THE ASSESSEE HAS CONTENDED THAT THIS ISSUE IN QUESTION WAS COVERED IN FAVOUR OF THE ASSESSEE B Y THE DECISION OF THE ITAT, AHMEDABAD IN THE CASE OF ALEMBIC LTD AND THE HON BLE HIGH COURT OF GUJARAT ISSUE IN THE CASE OF ALEMBIC LTD IN TAX APPEAL NO. 471 OF 2009. IN THIS CONNECTION, WE HAVE NOTICED THAT CO - ORDINATED BENCH OF ITAT AHMEDABAD VIDE ITA N O. 1912/AHD/2012 DATED 09 - 12 - 2016 IN THE CASE OF ALEMBIC LTD ON THE SIMILAR ISSUE HAS DECIDED AS UNDER: - 17.1 LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT THE ISSUE IN QUESTION STANDS COVERED IN FAVOUR OF THE ASSESSEE IN ITS OWN CASE BY THE JUDGMENT OF HON BLE GUJARAT HIGH COURT VIDE A CONSOLIDATED ORDER DATED 20.07.2016 IN TAX APPEAL NO. 471 TO 474 OF 2009, IN TAX APPEAL NO. 471 AND 473, THE COMMON QUESTION OF LAW REFERRED TO BY THE REVENUE IS AS UNDER: - WHETHER THE APPELLATE TRIBUNAL WAS RIGHT IN LAW A ND ON FACTS IN NOT APPRECIATING THAT DEDUCTION U/S 80IA(4) IS NOT ALLOWABLE I.T.A NO. 75 /AHD/2012 A.Y. 2008 - 09 PAGE NO BANCO PRODUCTS (INDIA) LTD. VS. DCIT 6 TO THE ASSESSEE FOR GENERATING POWER FOR CAPTIVE CONSUMPTION? 17.2 THE ITAT ALLOWED THE ASSESSEE S CLAIM U/S 80IA(4) AT THE RATE OF SELLING PRICE CHARGED BY GUJARAT STATE ELECTRI CITY BOARD AND OTHER DISTRIBUTING COMPANIES FROM ITS CAPTIVE POWER PLANT. AGAINST THE ORDER OF THE TRIBUNAL, THE REVENUE PREFERRED THE APPEAL BEFORE THE HON BLE GUJARAT HIGH COURT AND THE ABOVE QUESTION OF LAW WAS FRAMED. THE HON BLE GUJARAT HIGH COURT WHILE HOLDING IN FAVOUR OF ASSESSEE, RELIED ON A HOST OF JUDGMENTS INCLUDING ACIT, BHARUCH CIRCLE, BHARUCH VS. PRAGATI GLASS WORKS PVT LTD DECIDED ON 25.09.2012 AND CIT VS. SHAH ALLOYS LTD, DECIDED ON 22.11.2011 IN TAX APPEAL NO.2092 OF 2010. THE HON BLE GUJARAT HIGH COURT FURTHER RELIED ON THE JUDGMENT OF CALCUTTA HIGH COURT IN THE CASE OF CIT VS. KANORIA CHEMICALS & INDUSTREIS LTD, [2013] 35 TAXMANN.COM 566 (CALCUTTA), WHEREIN THE COURT HAS HELD AS UNDER: - IT IS PRICE AT WHICH ASSESSEE TRANSFERRED ELE CTRICITY GENERATED BY IT ELIGIBLE BUSINESS TO ITS OTHER BUSINESS WHICH WOULD BE CONSIDERED FOR PURPOSE OF COMPUTATION OF PROFITS AND GAINS OF ELIGIBLE BUSINESS IN TERMS OF SECTION 80 - IA(8) AND NOT LESSER PRICE AT WHICH SURPLUS ELECTRICITY WAS SOLD TO ELECT RICITY BOARD. 17.3 RELYING ON ALL THESE JUDGMENTS, BY DETAILED OBSERVATIONS, THE HON BLE GUJARAT HIGH COURT UPHELD THE CLAIM OF THE ASSESSEE AND DISMISSED THE REVENUE S GROUND IN THIS BEHALF BY FOLLOWING OBSERVATIONS: - 11. WE HAVE CONSIDERED THE SUBMIS SIONS MADE BY THE LEARNED COUNSEL FOR THE PARTIES. WE HAVE ALSO CONSIDERED THE CASE LAWS CITED BY THE LEARNED COUNSEL FOR THE ASSESSEE. TAKING INTO CONSIDERATION THE JUDEMENTS OF THIS COURT AND OTHER HIGH COURTS, CITED ABOVE, WE ARE OF THE OPINION THAT THE TRIBUNAL HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE. IN THAT VIEW OF THE MATTER, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE TRIBUNAL. THEREFORE, WE ANSWER QUESTION (C) AND (D) IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 17.4 THE LD. DEPA RTMENTAL REPRESENTATIVE, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE AUTHORITIES BELOW. 18. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IN VIEW OF THE HON BLE GU JARAT HIGH COURT JUDGMENT ON THE I.T.A NO. 75 /AHD/2012 A.Y. 2008 - 09 PAGE NO BANCO PRODUCTS (INDIA) LTD. VS. DCIT 7 SAME ISSUE IN ASSESSEE S OWN CASE, THE ISSUE IN QUESTION THAT THE ASSESSEE IS ELIGIBLE FOR COMPUTATION OF DEDUCTION U/S 80IA(4) ON THE RATES CHARGED BY IT AT SELLING PRICE IS NO MORE RES INTEGRA. RESPECTFULLY FOLLOWING THE HON BLE GUJARAT HIGH COURT JUDGMENT IN ASSESSEE S OWN CASE (SUPRA), THIS GROUND OF THE ASSESSEE IS ALLOWED. 6.1 WE HAVE ALREADY DECIDED THE SIMILAR MATTER IN FAVOUR OF ASSESSEE IN THE A.Y.2008 - 09 IN THE CASE OF BANCO ALUMINIUM LTD. . IN VIEW OF THE ABOVE STATED FACTS AND LEGAL FINDINGS, RESPECTFULLY FOLLOWING THE HON BLE GUJARAT HIGH COURT IN THE CASE OF ALEMBIC LTD. AS SUPRA WE ALLOW THIS GROUND OF THE ASSESSEE . GROUND NO. 3 (DISALLOWANCE OF DEDUCTION U/S. 35(2AB) 7 . THE ASSESSEE HAS CLAIMED WEIGH TED DEDUCTION U/S. 35(2AB) OF THE ACT IN RESPECT OF EXPENDITURE ON SCIENTIFIC RESEARCH ON IN - HOUSE RESEARCH AND DEVELOPM ENT FACILITIES. THE ASSESSING OFFICER HAS REJECTED T HE CLAIM OF DEDUCTION OF THE AS SESSEE U/S. 35 (2AB) FOR THE PERIOD PRIOR TO 01 - 04 - 2008 TO 31 - 03 - 2 010 ON THE GROUND THAT IN THE F OR M NO. 3CM DATED 22/10/2008 GIVING APPROVAL U/S. 35(2AB) IT WAS SPECIFICALLY MENTIONED THAT T HE RESEARCH A N D DEVELOPMENT FACILITIES WAS APPROVED FOR THE PURPOSE OF SECTION 35(2AB) WITH EFFECT FROM 01 - 04 - 2008 TO 31 - 03 - 2010. AGGRIEVED AGAINST THE ORDER OF T HE ASSESSING OFFICER , THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS SUSTAINED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER BY OBSERVING AS UNDER: - 5.2. I HAVE CONSIDERED THE MATTER. APPELLANT MADE APPLICATION IN FORM NO. 3CK TO THE PRESCRIBED AUTHORITY FOR THE PURPOSE OF SECTION I.T.A NO. 75 /AHD/2012 A.Y. 2008 - 09 PAGE NO BANCO PRODUCTS (INDIA) LTD. VS. DCIT 8 35(2AB), I.E. DEPARTMENT OF SCIENTIFIC &. INDUSTRIAL RESEARCH (DSIR) ON 26.6.2008, I.E. AFTER THE FINANCIAL YEAR PERTAINING TO A.Y.2008 - 09 WAS ALREADY OVER. THE DSIR GRANTED APPROVAL ON 22.10.2008 SPECIFI CALLY MENTIONING AS UNDER IN ITS APPROVAL LETTER: - 'THE RESEARCH & DEVELOPMENT FACILITY IS APPROVED FOR THE PURPOSE OF SECTION 35(2AB) FROM 1.4.2008 TO 31.3.2010, SUBJECT TO CONDITIONS UNDERLINED THEREIN. IN THE CASE OF CLARIS LIFE SCIENCES LTD. (2008) 17 4 TAXMAN 113 (GUJARAT) RELIED UPON BY THE APPELLANT, HON'BLE GUJARAT HIGH COURT DECIDED THE MATTER IN FAVOUR OF THE ASSESSEE AS PER PARA - 8 OF THE DECISION ON THE GROUND THAT THE APPROVAL WAS GRANTED DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR IN Q UESTION IN THAT CASE. BASED ON THIS FACT, THE HIGH COURT HAD HELD THAT ASSESSEE WAS ENTITLED TO CLAIM WEIGHTED DEDUCTION U/S.35(2AB) IN RESPECT OF ENTIRE EXPENDITURE INCURRED DURING THE PREVIOUS YEAR. IN APPELLANT'S CASE, FACTS ARE DIFFERENT IN AS MUCH AS THE APPROVAL WAS RECEIVED IN F.Y.2008 - 09 I.E. AFTER F.Y.2007 - 08 WAS ALREADY OVER AND EVEN THE APPLICATION SEEKING APPROVAL WAS MADE IN F. Y. 2008 - 09. DECISION IN THE CASE OF CLARIS LIFE SCIENCES LTD. IS THEREFORE DISTINGUISHABLE AND NOT APPLICABLE TO APPEL LANT'S CASE. IT IS HELD THAT THE ASSESSING OFFICER WAS JUSTIFIED IN NOT ALLOWING WEIGHTED DEDUCTION U/S.35(2AB) AGGREGATING TO RS.1,26,23,818/ - . THIS GROUND OF APPEAL IS DISMISSED. 8 . DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, LD. COUNSEL CONT ENDED THAT THE ISSUE IS COVERED BY THE DECISION OF THE GUJARAT HIGH COURT IN THE CASE OF CIT VS. CLARIS LIFE SCIENCES LD. (2008) 174 TAXMANN 113. HE ALSO REFERRED TO CIT VS. SANDAN VIKAS (INDIA) LTD. (2010) 335 ITR 117 (DELHI). ON THE OTHER HAND, LD. D EPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF THE LOWER AUTHORITIES. 9 . WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD . W E HAVE NOTICED THAT THE LD. CIT(A) REPORTED IN HIS DECISION THAT THE CASE OF CLARIS LIFE SCIENCES LTD. WAS DIS TINGUISHABLE FROM THE I.T.A NO. 75 /AHD/2012 A.Y. 2008 - 09 PAGE NO BANCO PRODUCTS (INDIA) LTD. VS. DCIT 9 CASE OF THE ASSESSEE AS THE FA C TS ARE DIFFERENT IN AS MUCH AS IN TH E CASE OF THE ASSESSEE THE APPROVAL WAS RE CEIVED IN F.Y. 2008 - 09 I.E. AFTER F.Y. 2 007 - 08 WAS ALREADY OVER .HE HAS ALSO REPORTED THAT EVEN TH E APPLICATION SEEKING THE A PPROVAL WAS MADE BY THE ASSESSEE IN THE F.Y. 2008 - 09. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US THE ASSESSEE HAS FURNISHED PAPER BOOKS. WE HAVE PERUSED THE PAPER BOOK FURNISHED BY THE ASSESSEE AND FIND THAT AS PER PAGE NO. 146 OF THIS PAPER BO OK THE ASSESSEE CLAIM THAT APPLICATION FOR APPROVAL OF IN - HOUSE RESEARCH AND DEVELOPMENT WAS MADE ON 22 - 12 - 2006. IN ORDER TO VERIFY T HE SAME WE HAVE GONE THROUGH T H E PAGES OF PAPER BOOK A ND FIND THAT AS PER PARA 43 OF PAGE NO. 235 I T WAS S TATED THAT AP PLICATION TO THE PRESCRIBED AUTHORITY WAS MADE ON 26 - 06 - 2008. WE HAVE FURTHER VERIFIED FROM PAGE NO. 162 IN THE PAPER BOOK THAT A LETTER DATED 24 - 10 - 2008 WAS ADDRESSED TO THE ASSESSEE FROM THE MINISTRY OF SCIENCE AND TECHNOLOGY DEPARTMENT OF SCIENTIFIC AND INDUSTRIAL RESEARCH TRAINING PROVID ING REFERENCE OF THE APPLICATION OF THE ASSESSEE DATED 26.06.2008. THE CLAIM OF THE ASSESSEE THAT IT HAD APPLIED ON DEC 22, 2006 COULD NOT BE SUBSTANTIATED IN VIEW OF SUPPORTING MATERIAL INDICATING THAT ASSESSEE HAD APPLIED ON 26/06/2008. WE OBSERVED THAT ABOVE F INDINGS THROW LIGHTS ON THE CONTENTIONS THAT THE FACTS OF THE CASE OF THE ASSESSEE ARE DISTINGUISHED FROM THE DECISION OF THE CASE OF CLARIS LIFE SCIENCES LTD., IN VIEW OF CONTRADICTORY FACTS AND SUPPORTING EVIDENTIAL MATERIAL FOUND TO BE EXISTING AS ELABORATED SUPRA , WE CONSIDERED IT WILL BE MORE APPROPRIATE TO RESTORE TH E ISSUE OF APPLICABILITY OF THE DECISION I.T.A NO. 75 /AHD/2012 A.Y. 2008 - 09 PAGE NO BANCO PRODUCTS (INDIA) LTD. VS. DCIT 10 IN THE CASE OF THE CLARIS LIFE SCIENCES LTD TO THE FILE OF THE ASSESSING OFFICER TO DECIDE A FR ESH AFTER REQUISITE VERIFICATION AND EXAMINATION OF MATERIALS AS STATED SUPRA AFTER PROVIDING DUE OPPORTUNITIES TO THE ASSESSEE. 10 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 06 - 04 - 201 7 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 06 /04 /2017 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CI T 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,