The DCIT, Circle-1, Ahmedabad V. Adani Gas Ltd, Ahmedabad

ITA 775/AHD/2014

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 8991 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 08-08-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 14-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Maximum Marginal Rate; Proportionate interest; Initiation of penalty proceedings; Tax effect
• Section: 143(3); 14A; 80G

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR ./ I.T.A. NOS. 775/AHD/2014, 2346 & 2797/AHD/2015, 277 5 & 2776/AHD/2016 ( ASSESSMENT YEARS : 2009-10, 2010-11, 2011-12, 2012- 13 & 2013-14) DCIT, CIRCLE-1/CIRCLE-1(1)(1), AHMEDABAD-380015 / VS. M/S. ADANI GAS LTD., 1, ADANI HOUSE, NAVRANGPURA, AHMEDABAD - 380009 ( APPELLANT ) .. ( / RESPONDENT ) & ./ I.T.A. NO. 2273/AHD/2015, 2693 & 2694/AHD/2016 & CO NO. 171/AHD/2014 & 202/AHD/2015 (IN ITA NO. 775/AHD/2014 & 2797/AHD/2015) ( ASSESSMENT YEARS: 2009-10, 2010-11, 2011-12, 2012-1 3 & 2013-14) M/S. ADANI GAS LTD., ADANI HOUSE, NR. MITHAKHALI SIX ROADS, NAVRANGPURA, AHMEDABAD - 380009 / VS. DCIT, CIRCLE-1, AHMEDABAD- 380015 ./ ./ PAN/GIR NO. : AAFCA3788D ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI S. K. DAVE, SR. D.R. WITH SMT. APARNA AGARWAL, CIT. D.R. / RESPONDENT BY : SHRI S. N. SOPARKAR WITH SHRI VARTIK CHOKSI, A.R. ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 2 - DATE OF HEARING 27/07/2018 & 02.08.2018 !'# / DATE OF PRONOUNCEMENT 17/ 10/2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED BUNCH OF APPEALS CONCERNING AYS 2009- 10 & 2010-11 HAS BEEN FILED BY THE REVENUE AGAINST THE O RDER OF THE CIT(A)-III, AHMEDABAD (CIT(A) IN SHORT), DATED 13 .12.2013 ARISING IN THE ASSESSMENT ORDER DATED 28.12.2011 PASSED BY THE ASSESSING OFFICER (AO) UNDER S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT). THE ASSESSEE HAS ALSO MOVED CROSS OBJECTION CAPTION ED ABOVE IN THE REVENUES APPEAL. LIKEWISE, THE ASSESSEE AS WELL A S THE REVENUE HAVE FILED CROSS APPEALS AGAINST THE ORDER OF THE CIT(A) -1, AHMEDABAD DATED 15.05.2015 ARISING IN THE ASSESSMENT ORDER DA TED 30.03.2013 PASSED BY THE AO UNDER S.143(3) OF THE ACT CONCERNI NG AY 2010-11. 2. THE CAPTIONED APPEALS WERE HEARD ON TWO DIFFEREN T DATES I.E. 27.07.2018 AND 02.08.2018. SINCE, ALL THESE APPEAL S PERTAIN TO SAME ASSESSE AND ON ALMOST SIMILAR ISSUES, HENCE THEY AR E BEING DISPOSED OF BY COMMON ORDER FOR THE SAKE OF CONVENIENCE. 3. WE SHALL FIRST TAKE UP THE APPEAL OF THE REVENUE AND CROSS OBJECTION OF THE ASSESSEE THEREON CONCERNING AY 200 9-10 FOR ADJUDICATION PURPOSES. ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 3 - ITA NO. 775/AHD/2014-AY 2009-10-REVENUES APPEAL 4. THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN THE CAPTIONED APPEAL CONCERNING AY 2009-10 READS AS UNDER:- 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION OF RS.5.04 CRORES BEING UNDERVALUATION OF CLOSING STOCK DESPIT E THE FACT THAT THE ASSESSEE HAD FOLLOWED EXCLUSIVE METHOD OF ACCOUNTIN G IN CONTRAVENTION OF THE PROVISIONS OF SECTION 145A WHICH MANDATES INCLU SIVE METHOD FOR VALUATION OF INVENTORY. 2. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELE TING THE ADDITION OF RS.2.57 LACS U/S 40(A)(IA) OVERLOOKING THE FACT THAT DURING ASSESSMENT PROCEEDINGS THE SAME WAS CLAIMED AS PAID TO ADANI POWER LTD. WI THOUT FURNISHING ANY REASON FOR NON DEDUCTION OF TDS. 3. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELE TING THE ADDITION OF RS.39.77 LACS BEING DISALLOWANCE OF AMORTIZATION OF LEASE HOLD LAND DESPITE THE FACT THAT THERE IS NO PROVISION IN THE INCOME T AX ACT UNDER WHICH SUCH DEDUCTION CAN BE CLAIMED. 5. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEAR NED AR FOR THE ASSESSEE IN REVENUES APPEAL SUBMITTED AT THE OUTSE T THAT CONTROVERSY AS PER THE GROUND NO.1 OF THE REVENUES APPEAL REVO LVES AROUND APPLICABILITY OF SECTION 145A OF THE ACT TOWARDS AL LEGED UNDER VALUATION OF CLOSING STOCK. THE LEARNED AR SUBMITT ED THAT THE ASSESSEE HAS FOLLOWED EXCLUSIVE METHOD OF ACCOUNTIN G AND THEREFORE, THE CLOSING STOCK HAS NOT BEEN LOADED WITH THE TAXE S AND DUES AS CONTEMPLATED UNDER S.145A OF THE ACT. THE LEARNED AR SUBMITTED THAT IN VIEW OF THE EXCLUSIVE METHOD OF ACCOUNTING CONSI STENTLY FOLLOWED, THE ACTION OF THE ASSESSEE IS REVENUE NEUTRAL. THE LEARNED AR SUBMITTED THAT THE EXCLUSIVE METHOD OF ACCOUNTING P OSTULATES EXCLUSION OF TAX, DUES ETC. EMBEDDED IN PURCHASES O F RAW MATERIAL AS WELL AS IN CORRESPONDING SALE. SUCH TAXES ARE ACCO UNTED FOR SEPARATELY FOR THE PURPOSES OF DISCHARGING LIABILITIES. THE EF FECT OF SUCH ACCOUNTING DOES NOT ULTIMATELY HAVE ANY IMPACT ON T HE ULTIMATE ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 4 - PROFITABILITY WHEN FOLLOWED YEAR AFTER YEAR. THE L EARNED AR SUBMITTED THAT THE ISSUE IS NO LONGER RES INTEGRA AND COVERE D IN FAVOUR OF THE ASSESSEE BY LONG LINE OF JUDICIAL PRECEDENTS, VIZ., CIT VS. BELL GRANITO CEREMICA LTD. (GUJ.) TAX APPEAL NO.436-437 OF 2011, JUDGMENT DATED 13.06.2011; NARMADA CHEMATUR PETROCHEMICALS LTD. (2 010) 327 ITR 369 (GUJ.) AND GENERAL MOTORS INDIA (P.) LTD. V. DE PUTY COMMISSIONER OF INCOME-TAX [2013] 37 TAXMANN.COM 4 03 (AHMEDABAD) TO NAME A FEW. THE LEARNED AR, THEREAF TER, ON FACTS, REFERRED TO THE TABULATED STATEMENT AT THE BEGINNIN G OF PARA NO.2 OF THE ASSESSMENT ORDER AND POINTED OUT THAT AS AGAINST RS .5.04 CRORE UNUTILIZED CENVAT CREDITS IN CONTROVERSY MERELY RS. 9.19 LAKHS CONCERNS RAW MATERIAL ETC. AND THE REMAINING AMOUNT OF CENVAT CREDIT IS ATTRIBUTABLE TO CAPITAL GOODS ITEM AND IN PUT SERVICE WHICH DO NOT ATTRACT THE PROVISIONS OF SECTION 145A OF THE A CT IN ANY EVENT. THE LEARNED AR ACCORDINGLY SUBMITTED THAT THE LEARN ED CIT(A) HAS RIGHTLY CONCLUDED THE ISSUE IN FAVOUR OF THE ASSESS EE AFTER DETAILED ANALYSIS OF FACTS AND LAW PREVAILING IN THIS REGARD AND INTERFERENCE THEREOF IS NOT CALLED FOR. 6. THE LEARNED DR FOR THE REVENUE, ON THE OTHER HAN D, RELIED UPON THE ORDER OF THE AO. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS ON THE ISSUE TOWARDS APPLICABILITY OF SECTION 145A OF THE ACT AS WELL AS PERUSED THE ORDER OF THE LOWER AUTHORITIES. WHILE IT IS A CASE OF THE REVENUE THAT THE ELEMENT OF EXCISE DUTY/CENVAT ETC. WOULD R EPRESENT PART OF THE CLOSING STOCK OF THE ASSESSEE IN TERMS OF SECTI ON 145A OF THE ACT, IT IS THE CASE OF THE ASSESSEE ON THE OTHER HAND TH AT SECTION 145A OF THE ACT HAS NO APPLICATION TO THE FACTS OF THE CASE . IT IS FURTHER CASE OF THE ASSESSEE THAT ASSESSEE FOLLOWS EXCLUSIVE METHOD OF ACCOUNTING FOR VALUATION OF INVENTORY AND THEREFORE, ENTIRE EXERCI SE WOULD BE TAX ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 5 - NEUTRAL. THE CIT(A) HAS EXAMINED THE ISSUE ON FACT S AND BINDING JUDICIAL PRECEDENTS AND CONCLUDED THE ISSUE IN FAVO UR OF THE ASSESSEE. IN THE ABSENCE OF ANY IMPACT ON THE PROFITABILITY O F THE ASSESSEE PER SE DUE TO METHOD OF ACCOUNTING FOLLOWED, WE DO NOT SEE ANY ERROR IN THE CONCLUSION DRAWN BY THE CIT(A). IN PARITY WITH JUD ICIAL PRECEDENTS CITED, WE DECLINE TO INTERFERE WITH THE ORDER OF TH E CIT(A) ON THE ISSUE. 8. IN THE RESULT, GROUND NO.1 OF THE REVENUES APPE AL IS DISMISSED. 9. THE GROUND NO.2 CONCERNS ADDITION OF RS.2.57 LAK HS UNDER S. 40(A)(IA) OF THE ACT ON ACCOUNT OF NON DEDUCTION OF TDS. AS POINTED OUT ON BEHALF OF THE ASSESSEE, THE AFORESAID PAYMEN T MADE TO ADANI POWER LTD. WAS ON ACCOUNT OF RE-IMBURSEMENT OF ACTU AL EXPENSES, THE DETAILS OF WHICH ARE PROVIDED AT PAGE NO.226 OF THE PAPER BOOK. IN THE ABSENCE OF ANY INCOME ELEMENT IN THE PAYMENT MADE, THE OBLIGATION TO DEDUCT TAX AT SOURCE ON SUCH PAYMENT DO NOT ARISE A ND CONSEQUENTLY, PROVISIONS OF SECTION 40(A)(IA) OF THE ACT DO NOT C OME INTO PLAY IN VIEW OF THE DECISION OF THE HONBLE GUJARAT HIGH CO URT IN THE CASE OF CIT VS. GUJARAT NARMADA VALLEY FERTILIZERS CO. LTD. [2013] 35 TAXMANN.COM 638 (GUJ). THE LAW THAT A MERE REIMBUR SEMENT DOES NOT REQUIRE TO DEDUCTION WAS ALSO FOLLOWED IN CIT VS. I TD CEM INDIA JV (2018) 405 ITR 533 (BOM) IN RESPECT OF REIMBURSEMEN T OF ADMINISTRATIVE EXPENSES TO A JOINT VENTURE PARTNER. THEREFORE, WE DO NOT FIND ANY ERROR IN THE ORDER OF THE CIT(A) AND C ONSEQUENTLY DECLINE TO INTERFERE. 10. IN THE RESULT, GROUND NO.2 IS DISMISSED. 11. GROUND NO.3 OF REVENUES APPEAL CONCERNS ADDITI ON OF RS.39.77 LAKHS TOWARDS AMORTIZATION OF LEASE HOLD LAND. IN THE SCRUTINY ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 6 - ASSESSMENT, IT WAS OBSERVED BY THE AO THAT THE ASSE SSEE HAS AMORTIZED AN AMOUNT OF RS.39,77,765/- ON ACCOUNT OF LEASE HOL D LAND. IT WAS SUBMITTED ON BEHALF OF THE ASSESSEE THAT LEASE HOLD LAND OF LONGER PERIOD (GENERALLY TENURE OF LEASE IS 99 YEARS) IS R EQUIRED TO CONSTRUCT CNG STATIONS THE EXPENSES OF WHICH ARE REQUIRED TO BE AMORTIZED. THE CLAIM OF THE ASSESSEE WAS NOT ACCEPTED BY THE AO ON THE GROUND THAT THERE IS NO PROVISION OF CLAIM OF THE AMOUNT WRITTE N OFF/AMORTIZED AGAINST THE LEASE HOLD LAND IN THE INCOME TAX ACT. 12. AMORTIZATION IS AN ACCOUNTING TERM THAT REFERS TO THE PROCESS OF ALLOCATING THE COST OF AN ASSET OVER A PERIOD OF TI ME AND HENCE IT IS NOTHING ELSE THAN DEPRECIATION. THE ALLOWABILITY O F COSTS TOWARDS AMORTIZATION OF LEASE HOLD LAND IS IN QUESTION. HA VING HEARD THE RIVAL SUBMISSIONS ON THE ISSUE, WE FIND THAT THE CIT(A) H AS RIGHTLY APPRECIATED THE FACTS IN PERSPECTIVE AND CONCLUDING THE ISSUE IN FAVOUR OF THE ASSESSEE IN THE LIGHT OF DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF DCIT VS. SUN PHARMACEUTICALS INDUSTR IES LTD. [2009] 227 CTR 206 (GUJ). WE DO NOT SEE ANY INFIRMITY IN THE REASONING GIVEN BY THE CIT(A) WHILE DELETING THE AFORESAID DI SALLOWANCE OF AMORTIZATION OF LEASE HOLD LANDS. WE THUS DECLINE TO INTERFERE. 13. IN THE RESULT, GROUND NO.3 OF THE REVENUES APP EAL IS DISMISSED. 14. IN THE RESULT, APPEAL OF REVENUE IN ITA NO.775/ AHD/2014 FOR AY 2009-10 IS DISMISSED. CO NO. 171/AHD/2014-AY 2009-10-ASSESSEES APPEAL 15. THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN THE CAPTIONED CROSS OBJECTION CONCERNING AY 2009-10 READS AS UNDE R:- ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 7 - 1. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF T HE RESPONDENT'S CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN UPHOLDING DISAL LOWANCE OF THE RESPONDENT'S CLAIM FOR DEDUCTION OF RS.3,71,271 UND ER SECTION 80G MERELY BECAUSE THE RECEIPT FOR THE DONATION IN QUESTION WA S IN THE NAME OF ADANI ENERGY LTD. WHOSE DIVISION WHICH HAD PAID THE DONAT ION HAD BEEN MERGED (UNDER A SCHEME OF DEMERGER) WITH THE RESPONDENT AN D FOR WHICH REASON THE DONATION HAD BEEN ACCOUNTED IN THE APPELLANT'S PROFIT AND LOSS ACCOUNT ALONG WITH OTHER EXPENDITURE AND THAT THEREFORE, TH E SAID ADANI ENERGY LTD. HAD NOT CLAIMED DEDUCTION FOR THE SAME. 2. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE RESPONDENT'S CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN DISMISSING GROU ND NO. 14 OF THE RESPONDENT'S APPEAL BEFORE HIM CHALLENGING INITIATI ON OF PENALTY PROCEEDINGS U/S. 271(1)(C) ON THE GROUND THAT NO AP PEAL LAY AGAINST INITIATION OF PENALTY PROCEEDINGS. HE OUGHT TO HAVE APPRECIATED, INTER ALIA, THAT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE RESPONDENT'S CASE, THERE BEING ABSOLUTELY NO WARRANT/JUSTIFICATION FOR INITI ATING THE PENALTY PROCEEDINGS, HE OUGHT TO HAVE ORDERED FOR THEIR BEI NG DROPPED, THEREBY SAVING BOTH THE RESPONDENT AND THE DEPARTMENT FROM LONG DRAWN UNNECESSARY LITIGATION. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF PRELIMINARY EXPENSES AMOUNTING TO RS.10,28,028/- CLAIMED U/S.35D OF THE INCOME TAX AC T, 1961, MADE BY THE ASSESSING OFFICER. ADDITIONAL GROUND 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE RE SPONDENTS CASE, AND IN VIEW OF LD. ASSESSING OFFICERS OWN CONTENTION WHILE PAS SING ASSESSMENT ORDER U/S 143(3) FOR A.Y. 2012-13, THAT DEPRECIATION ON G OODWILL ARISING ON DEMERGER OUGHT TO HAVE BEEN CLAIMED BY RESPONDENT F ROM APPOINTED DATE 01.01.2007 I.E. A.Y. 2007-08 AS AGAINST EFFECTIVE D ATE I.E. A.Y. 2010-11 (YEAR IN WHICH RESPONDENT HAS CLAIMED DEPRECIATION) , AND IN VIEW OF THE FACT THAT DEPRECIATION FOR SUBSEQUENT YEARS HAS BEEN GRA NTED AFTER COMPUTING NOTIONAL DEPRECIATION FOR A.Y.2007-08, 2008-09 AND 2009-10, RESPONDENT IS ENTITLED TO DEPRECIATION OF RS.5,57,63,315/- WHILE COMPUTING TAXABLE INCOME OF CURRENT YEAR. 16. GROUND NO.1 OF THE CROSS OBJECTION RELATES TO D ENIAL OF DEDUCTION OF RS.3,71,271/- UNDER S.80G OF THE ACT. IN SUPPORT OF THE AFORESAID GROUND, IT IS THE CASE ON BEHALF OF THE A SSESSEE THAT RECEIPT FOR THE DONATION IN QUESTION WAS IN THE NAME OF ADA NI ENERGY LTD. WHOSE DIVISION HAD PAID DONATION PRIOR TO ITS MERGE R WITH THE ASSESSEE UNDER A SCHEME OF DEMERGER. IT IS THUS THE CASE OF THE ASSESSEE THAT IT ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 8 - IS RIGHTLY ENTITLED TO CLAIM DEDUCTIONS UNDER S.80G OF THE ACT FOR PAYMENTS BY THE OTHER COMPANY ULTIMATELY MERGED WIT H IT. ON PERUSAL OF THE ORDERS OF THE AO AND CIT(A), IT IS NOTICED T HAT THE REVENUE HAS DENIED THE DEDUCTION ON THE GROUND THAT ONLY ONE OF THE DIVISION OF ADANI ENGERY LTD. GOT MERGED WITH THE ASSESSEE COMP ANY. THE ADANI ENERGY LTD. CONTINUED TO EXIST AS A SEPARATE ENTITY . WE DO NOT SEE ANY RATIONAL IN SUCH LINE OF REASONING. WHERE DONATIO N HAS BEEN PAID BY A DIVISION WHICH WAS DEMERGED FROM THE OTHER COMPANY AND MERGED WITH ASSESSEES COMPANY, THERE IS NO WARRANT TO DEN Y THE DEDUCTION IN THE HANDS OF THE RESULTING COMPANY (ASSESSEE). IT SHALL HOWEVER BE OPEN TO THE AO TO VERIFY AS TO WHETHER THE DEMERGED COMPANY (ADANI ENERGY LTD.) HAS ALREADY CLAIMED DEDUCTION OR NOT. WHERE THE ASSESSEE PROVES TO THE SATISFACTION OF THE AO THAT NO DEDUCTION HAS BEEN CLAIMED UNDER S.80G OF THE ACT BY THE DEMERGED COMPANY TOWARDS THE AMOUNT IN QUESTION, THE AO SHALL ALLOW THE DEDUCTION IN THE HANDS OF THE ASSESSEE COMPANY AFTER VERIFYING T HE RECEIPTS ETC. IN ACCORDANCE WITH LAW. 17. IN THE RESULT, GROUND NO.1 OF ASSESSEES CROSS OBJECTION IS ALLOWED FOR STATISTICAL PURPOSES. 18. THE GROUND NO.2 OF THE ASSESSEES CROSS OBJECTI ON IS NOT PRESSED AND ACCORDINGLY DISMISSED. 19. THE GROUND NO.3 CONCERNS DISALLOWANCES OF PRELI MINARY EXPENSES AMOUNTING TO RS.10,28,028/- CLAIMED UNDER S.35D OF THE ACT. IT WAS POINTED OUT THAT SIMILAR CLAIM WAS MADE IN T HE EARLIER YEAR AND SIMILAR CONTROVERSY AROSE IN THE EARLIER YEAR AND A DJUDICATED IN FAVOUR OF THE ASSESSEE. FOR THIS PURPOSE, THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL CONCERNING AY 2008-09 IN ASSE SSEES OWN CASE IN ITA NOS. 2241 & 2516/AHD/2011 ORDER DATED 18.01 .2016 WAS ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 9 - REFERRED. IN VIEW OF THE ISSUE BEING COVERED IN FA VOUR OF THE ASSESSEE BY THE ORDER OF THE CO-ORDINATE BENCH FOR EARLIER Y EAR, WE FIND MERIT IN THE CLAIM OF THE AFORESAID AMOUNT UNDER S.35D OF TH E ACT. THE ASSESSMENT ORDER IS THUS DIRECTED TO BE MODIFIED IN RESPECT OF THE AFORESAID ISSUE. 20. GROUND NO.3 OF THE ASSESSEES CROSS OBJECTION I S ALLOWED. 21. WE SHALL NOW ADVERT TO THE ADDITIONAL GROUND RA ISED BY ASSESSEE AS ADJUNCT TO ITS CROSS OBJECTION. THE LEARNED AR SUBMITTED THAT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IN ITS CRO SS OBJECTION CONCERNS ELIGIBILITY OF DEPRECIATION OF GOODWILL AR ISING ON DEMERGER. THE LEARNED AR SUBMITTED THAT ADDITIONAL GROUND CON CERNING THE ISSUE DOES NOT REQUIRE ANY FRESH INVESTIGATION OF FACTS A ND THEREFORE URGED FOR ADMISSION OF THE SAME IN THE LIGHT OF THE DECIS ION OF HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER COMPANY LTD. VS. CIT (1998) 229 ITR 383 (SC): CIT VS. SINHGAD TE CHNICAL EDUCATION SOCIETY [2017] 84 TAXMANN.COM 290 (SC). ELABORATING FURTHER, THE LEARNED AR REFERRED PARA 7 OF PAGE NO. 33 TO THE ASSESSMENT ORDER PASSED UNDER S. 143(3) OF THE ACT CONCERNING AY 2012-13 AND SUBMITTED THAT THE CONTROVERSY HAS ARISEN BECAUSE T HE SCHEME OF THE DEMERGER WAS SANCTIONED BY THE ORDER OF THE HONBLE GUJARAT HIGH COURT VIDE ITS ORDER DATED 09.12.2009 W.E.F. THE AP POINTED DATE OF 01.01.2007 AS MENTIONED IN THE DRAFT SCHEME OF DEME RGER. THE SANCTION WAS ACCORDED BY THE HONBLE HIGH COURT IN FY 2009-10 I.E. AY 2010-11. THE ASSESSEE CLAIMED DEPRECIATION ON T HE GOODWILL ARISING ON THE DEMERGER IN THE AY 2010-11 AS THE OR DER WAS RECEIVED IN FY 2009-10 RELEVANT TO AY 2010-11, THE AO HOWEVE R COMPLIED DEPRECIATION ON GOODWILL GENERATED AS A RESULT OF T HE DEMERGER (RS.33.98 CRORE) W.E.F. FY 2006-07 I.E. AY 2007-08 AND CONSEQUENTLY, CALCULATED THE WDV OF THE GOODWILL GE NERATED ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 10 - NOTIONALLY AFTER REDUCING THE DEPRECIATION OF THE E ACH YEAR STARTING FROM AY 2006-07. THUS, WHEREAS THE ASSESSEE HAS CL AIMED DEPRECIATION FOR THE FIRST TIME IN FY 2009-10 RELEV ANT TO AY 2010-11 ON THE AMOUNT OF GOODWILL GENERATED, THE AO ALLOWED THE DEPRECIATION AFTER REDUCING THE DEPRECIATION FOR AY 2006-07 AND 2007-08. CONSEQUENTLY, THE DEPRECIATION ON GOODWILL WAS ALLO WED AT RS.5,57,63,315/- AS AGAINST CLAIM OF DEPRECIATION O F RS.8,80,01,481/- CLAIMED BY THE ASSESSEE, THE AO THEREBY DISALLOWED THE REMAINING CLAIM OF GOODWILL AMOUNT OF RS.3,22,38,166/- BY REV ISING THE AMOUNT OF GOODWILL CARRIED FORWARD OWING TO NOTIONAL DEPRE CIATION IN AY 2006-07 AND 2007-08. THE LEARNED AR REFERRED TO TH E TABULATED STATEMENT WORKED OUT BY THE AO AS REPRODUCED IN THE ASSESSMENT ORDER CONCERNING AY 2012-13 WHICH IS REPRODUCED HEREUNDER FOR EASY REFERENCE AND UNDERSTANDING OF THE SUBJECT: PARTICULARS FY 2006 -07 FY 2007 -08 FY 2008 -09 FY 2009 -10 FY 2010 -11 FY 2011 -12 GOODWILL GENERATED 339,890,680 297,404,345 223,053,259 167,289,944 125,467,458 94,100,594 DEPRECIATION 42,486,335 74,351,086 55,763,315 41,822,486 31,366,865 23,525,148 CLOSING WDV 297,404,345 223,053,259 167,289,944 125,467,458 94,100,594 7 0,575,445 21.1 AS STATED ON BEHALF OF THE ASSESSEE, THE ASSES SEE COMPANY WAS FORMED AS A RESULTANT COMPANY OUT OF THE DEMERGER O F ADANI ENERGY LTD. THE ORDER UNDER S.394 OF THE COMPANIES ACT, 1 956 WAS PASSED BY THE HONBLE GUJARAT HIGH COURT ON DECEMBER 9, 2009 WHILE THE APPOINTED DATE WAS FIXED AT 01.01.2007 AS PER THE D RAFT SCHEME OF DEMERGER. AS A RESULT OF DEMERGER, THE ASSESSEE CO MPANY HAS PAID CERTAIN EXCESS CONSIDERATION TO THE DEMERGED COMPAN Y OVER AND ABOVE THE ASSETS ACQUIRED. SUCH EXCESS CONSIDERATION AMOU NTING TO RS.33,98,90,680/- WAS TREATED IN THE NATURE OF GOOD WILL BY THE ASSESSEE AS A CAPITAL RIGHT. THE ASSESSEE CLAIMED DEPRECIATION THEREON FOR THE FIRST TIME IN AY 2010-11 BEING THE YEAR IN WHICH THE ORDER OF THE HONBLE GUJARAT HIGH COURT WAS RECEIVED. CONSEQ UENTLY, THE ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 11 - DEPRECIATION OF RS.4,24,86,335/- (BEING 12.5% OF TH E VALUE OF GOODWILL AND DEMERGER OF RS.33.98 CRORE) WAS CLAIME D IN AY 2010-11. IN THE COURSE OF SCRUTINY ASSESSMENT, HOW EVER, THE AO TOOK A VIEW THAT DEPRECIATION WAS ALLOWABLE TO THE ASSES SEE ON SUCH GOODWILL FROM THE DATE OF SANCTION OF THE DEMERGER SCHEME FALLING IN AY 2007-08. THE AO ACCORDINGLY RE-DETERMINED THE G ROSS BLOCK AND WDV PERTAINING TO DEPRECIATION OF GOODWILL AS A RES ULT THE DEPRECIATION FOR AY 2007-08, 2008-09 AND 2009-10 WA S ARTIFICIALLY APPLIED WHICH WAS NOT CLAIMED BY THE ASSESSEE AT AL L IN THESE YEARS. THE AO ACCORDINGLY RE-WORKED THE WDV OF THE VARIOUS FYS AS TABULATED ABOVE. 21.2 WE ARE CONCERNED WITH AY 2009-10 IN QUESTION. THE AO HAS ASSUMED DEPRECIATION OF RS.5,57,63,315/- PERTAINING TO THE AFORESAID ASSESSMENT YEAR WHILE RE-DETERMINING THE QUANTUM OF ELIGIBLE DEPRECIATION IN AYS 2010-11, 2011-12. 2012-13 & 201 3-14. AS A RESULT OF SUCH RE-DETERMINATION OF QUANTUM OF GOODW ILL, THE FOLLOWING POSITION EMERGES: ASSESSMENT YEAR DEPRECIATION CLAIMED BY RESPONDENT DEPRECIATION COMPUTED BY AO 2007-08 4,24,86,335/- (BEING 12.5% OF VALUE OF GOODWILL ON DEMERGER I.E. RS.33,98,90,680/-) 2008-09 - 7,43,51,086/- 2009-10 - 5,57,63,315/- 2010-11 4,24,86,335/- (BEING 12.5% OF VALUE OF GOODWILL ON DEMERGER I.E. RS.33,98,90,680/-) 4,18,22,486/- 2011-12 7,43,51,086/- 3,13,66,865/- 2012-13 5,57,63,315/- 2,35,25,148/- 2013-14 4,18,22,486/- 1,76,43,861/- ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 12 - 21.3 THE ASSESSEE IN THE CAPTIONED AY 2009-10 SEEKS CLAIM OF DEPRECIATION ON GOODWILL AMOUNTING TO RS.5,57,63,31 5/- BASED ON THE WORKING OF THE AO ALTHOUGH NOT MADE ANY CLAIM TOWAR DS SUCH DEPRECIATION ON GOODWILL IN THIS YEAR. IT IS THE C ASE OF THE ASSESSEE BY WAY OF ADDITIONAL GROUND THAT THE ELIGIBILITY OF DE PRECIATION ON GOODWILL IS NOT IN DISPUTE. THE AO HAS SIMPLY DISP UTED THE QUANTIFICATION OF ELIGIBLE DEPRECIATION SPANNING OV ER VARIOUS FINANCIAL YEARS ON THE GROUND THAT DEPRECIATION IS ELIGIBLE F ROM THE APPOINTED DATE AS SANCTIONED BY THE HONBLE GUJARAT HIGH COUR T. THUS, ON ACCOUNT OF SUCH RE-WORKING, THE ASSESSEE HAS PRESEN TED A NEW CLAIM TOWARDS DEPRECIATION ON GOODWILL IN THE IMPUGNED AY 2009-10 ON THE GROUND THAT ALL THE RELEVANT FACTS ARE AVAILABLE ON RECORD WHICH ARE DULY ADMITTED BY THE REVENUE. THEREFORE, THE ASSES SEE CANNOT BE DEPRIVED OF THE ELIGIBLE DEPRECIATION AS COMPUTED B Y THE AO HIMSELF CONCERNING AY 2009-10. 21.4 A LEGAL ISSUE ALSO CROPPED UP IN THE COURSE OF HEARING AS TO WHETHER ADDITIONAL GROUND COULD BE RAISED IN A CROS S OBJECTION FILED BY THE ASSESSEE UNDER S.253(4) OF THE ACT. ON BEING E NQUIRED ON THIS ASPECT OF THE MATTER, IT WAS SUBMITTED ON BEHALF OF THE ASSESSEE THAT THERE IS NO PERCEPTIBLE DISTINCTION BETWEEN THE POS ITION OF LAW QUA CROSS OBJECTION IN THE MATTER OF FILING ADDITIONAL GROUND. IT WAS SUBMITTED THAT A CROSS OBJECTION HAS ALL THE TRAPPI NGS OF A REGULAR APPEAL MORE SO IN THE LIGHT OF LANGUAGE EMPLOYED UN DER S.253(4) OF THE ACT. 21.5 WE FIND OURSELVES IN AGREEMENT WITH THE PROPOS ITIONS MADE ON BEHALF OF THE ASSESSEE THAT IN A CROSS OBJECTION, T HERE IS NO BAR TO RAISE LEGAL ISSUES FOR THE FIRST TIME BEFORE ITAT. A CRO SS OBJECTION IS LIKE AN APPEAL. IT HAS ALL THE TRAPPINGS OF AN APPEAL. IT IS FILED IN THE FORM OF MEMORANDUM AND IT IS REQUIRED TO BE DISPOSED IN SAME MANNER AS AN ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 13 - APPEAL. EVEN WHERE THE APPEAL IS WITHDRAWN OR DISM ISSED FOR DEFAULT, CROSS OBJECTION MAY NEVERTHELESS BE HEARD AND DETER MINED. CROSS OBJECTION IS NOTHING BUT AN APPEAL, A CROSS APPEAL AT THAT. THIS APART, RAISING OF ADDITIONAL GROUND WOULD ONLY ENABLE THE AUTHORITY CONCERN TO CORRECTLY ASSESS THE TAX LIABILITY OF THE ASSESS EE. SIMILAR VIEW HAS BEEN EXPRESSED BY THE CO-ORDINATE BENCH IN THE CASE OF ITO VS. JASJIT SINGH (DEL) IN CROSS OBJECTION NOS. 138 TO 142/DEL/ 2014 INTERIM ORDER DATED 23.09.2014. WE THUS DO NOT SEE ANY IMPEDIMEN T IN ENTERTAINING THE ADDITIONAL GROUNDS. THE RELEVANT FACTS ARE AVAI LABLE ON RECORD. 21.6 IN SO FAR AS THE MERITS OF THE CLAIM MADE IN A DDITIONAL GROUND IS CONCERNED, WE OBSERVE THAT WHERE THE AO HAS READJUS TED THE QUANTUM OF DEPRECIATION IN THE SUBSEQUENT ASSESSMENT YEAR, THE ASSESSEE IS WITHIN ITS LEGITIMATE RIGHTS TO BE GRANTED DEPRECIA TION IN AY 2009-10 AS PER THE FIGURES WORKED BY THE AO HIMSELF. WE DO NOT SEE ANY PERCEPTIBLE REASON FOR NOT ADMITTING SUCH CLAIM OF THE ASSESSEE. WE ALSO FIND BONAFIDES IN THE PLEA OF THE ASSESSEE FOR RAISING NEW CLAIM ON ACCOUNT OF DEPRECIATION BY WAY OF ADDITIONAL GROUND AT THIS BELATED STAGE. THE ORDER FOR THE AY 2012-13 WAS PASSED ON 29.03.2015. BY VIRTUE OF THIS ORDER, THE ASSESSEE CAME TO KNOW ABO UT THE REVISION IN THE CLAIM OF DEPRECIATION CONCERNING AY 2012-13. B Y THAT TIME, THE ORDER OF THE CIT(A) DATED 13.12.2013 WAS ALREADY PA SSED. THEREFORE, THE ASSESSEE WAS INCAPACITATED TO PUT FORWARD SUCH NEW CLAIM TOWARDS DEPRECIATION ON GOODWILL AMOUNTING TO RS.5,57,63,31 5/- FOR WHICH RELEVANT FACTS ARE DULY AVAILABLE ON RECORD IN THE LIGHT OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF GOETZE (IND IA) LTD. VS. CIT [2006] 284 ITR 323 (SC) & NTPC VS. CIT 229 ITR 383 (SC). 22. IN THE RESULT, ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ALLOWED. ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 14 - 23. IN THE RESULT, ASSESSEES CROSS OBJECTION IS PA RTLY ALLOWED. 24. WE SHALL NOW ADVERT TO CROSS APPEALS OF ASSESSE E AND REVENUE CONCERNING AY 2010-11. ITA NO. 2273/AHD/2015-AY 2010-11-ASSESSEES APPEAL 25. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE I N THE CAPTIONED APPEAL CONCERNING AY 2010-11 READS AS UNDER:- 1. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF TH E APPELLANT'S CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN REJECTING ADDITIONAL CL AIM MADE BY THE APPELLANT FOR CLAIMING DEPRECIATION ON GOODWILL ARI SING ON DEMERGER OF ADANI ENERGY LTD FROM ADANI GAS LTD. TO THE TUNE OF RS.4,24,86,335/- ON THE GROUND THAT SAME WAS NOT CLAIMED THROUGH REVISE D RETURN OF INCOME BUT CLAIMED DURING THE COURSE OF ASSESSMENT PROCEEDINGS . 2. IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE APP ELLANTS CASE, THE LD. CIT(A) HAS GROSSLY ERRED BY REJECTING THE ADDITIONA L CLAIM OF DEPRECIATION ON GOODWILL CONTENDING THAT THE SAID CLAIM IS NOT D ULY SUPPORTED BY TAX AUDITORS REPORT BUT HAS FAILED TO APPRECIATE THE F ACT THAT SUCH CLAIM IS DULY COVERED BY DECISION OF HONBLE SUPREME COURT IN CAS E OF CIT V/S SMIFS SECURITIES LIMITED (2012) 24 TAXMAN.COM222 AND IDEN TICAL CLAIM IS ALREADY ALLOWED BY ASSESSING OFFICER WHILE PASSING THE ASSE SSMENT ORDER. 1.2 IN LAW AND IN FACTS AND CIRCUMSTANCES OF TH E APPELLANT'S CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN DENYING ADDITIONAL CLAIM OF DE PRECIATION BY CONTENDING THAT THE APPELLANT OUGHT TO HAVE CLAIMED DEPRECIATI ON ON GOODWILL FROM APPOINTED DATE I.E. 01.01.2007 AS AGAINST EFFECTIVE DATE I.E. AY 2010-11 WITHOUT APPRECIATING THE FACT THAT APPELLANT COMPAN Y IS BEING ASSESSED AT MAXIMUM MARGINAL RATE AND THEREFORE THE ENTIRE EXER CISE OF DISALLOWANCE/REJECTION OF CLAIM OF DEPRECIATION ON GOODWILL IS TAX NEUTRAL AND HENCE, UNCALLED FOR. 1.3 IN LAW AND FACTS AND CIRCUMSTANCES OF THE A PPELLANT'S CASE, THE LD, CIT(A) OUGHT TO HAVE APPRECIATED THAT EVEN AS PER HIS OWN CONTENTION OF ALLOWING DEPRECIATION ON GOODWILL FROM APPOINTED DATE THAT I S 1.1.2007 AS AGAINST THE EFFECTIVE DATE, HE OUGHT TO HAVE ALLOWED DEPREC IATION ON REVISED WDV COMPUTED AFTER CONSIDERING THE CAPITALISATION SINCE AY.2007-2008. 2 IN LAW AND IN FACTS AND CIRCUMSTANCES OF T HE APPELLANT'S CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING DISALLOWANCE U/S 35D FOR RS 10,02,818 WHEN NO SUCH DISALLOWANCE IS CALLED FOR. IT MAY BE DELET ED. ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 15 - 26. GROUND NO.1 CONCERNS CLAIM ON ACCOUNT OF DEPREC IATION ON GOODWILL ARISING ON DEMERGER OF ADANI ENERGY LTD. AS STATED, THE ASSESSEE DID NOT CLAIM THE DEPRECIATION ON GOODWILL IN ITS RETURN OF INCOME FOR THE AY 2010-11. HOWEVER, THE ELIGIBILIT Y OF CLAIM WAS BROUGHT TO THE NOTICE OF THE AO IN THE COURSE OF TH E ASSESSMENT PROCEEDINGS IN THE LIGHT OF THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF CIT VS. SMIFS SECURITIES LTD. (2012) 24 TAXMANN.COM 222 (SC). IT IS A CASE OF THE ASSESSEE THAT THE AO DID NOT ENTERTAIN THE AFORESAID CLAIM AT ALL. THE CLAIM WAS AGAIN ASSERT ED BEFORE THE CIT(A). THE CIT(A) HOWEVER ALSO DECLINED TO GRANT ANY RELIEF ON THIS SCORE. 27. AGGRIEVED, THE ASSESSEE HAS RAISED THE ISSUE BE FORE US. IN THE LIGHT OF DECISION OF HONBLE SUPREME COURT IN THE C ASE OF GOETZE (INDIA) LTD. (SUPRA) FOLLOWED IN PRUTHVI BROKERS & SHAREHOLDERS (SUPRA), IT IS WELL SETTLED THAT THE ADDITIONAL CLA IM OF SUCH NATURE CAN BE RAISED BEFORE THE APPELLATE AUTHORITIES DESPITE NOT HAVING INCLUDED THE SAME IN THE RETURN OF INCOME. AS A COROLLARY, THE CLAIM OF THE ASSESSEE ON ACCOUNT OF DEPRECIATION ON GOODWILL IS REQUIRED TO BE ALLOWED IN ACCORDANCE WITH LAW IN PARITY WITH THE C ONCLUSION DRAWN IN FAVOUR OF THE ASSESSEE RELEVANT TO AY 2009-10 AS PE R PARA NOS.21 & 22 OF THIS ORDER. 28 IN THE RESULT, GROUND NO.1 OF THE ASSESSEES APP EAL IS ALLOWED. 29. GROUND NO.2 OF THE ASSESSEES APPEAL CONCERNS D ISALLOWANCE OF PRELIMINARY EXPENSES UNDER S.35D OF THE ACT AMOUNTI NG TO RS.10,02,818/-. THE IDENTICAL ISSUE AROSE IN AY 20 09-10 AND ADJUDICATED IN FAVOUR OF THE ASSESSEE AS PER PARA N O.19 OF THIS ORDER. IN CONSONANCE THEREOF, THE ASSESSEE WOULD BE ENTITL ED TO BENEFIT UNDER S.35D OF THE ACT FOR THE AFORESAID AMOUNT. ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 16 - 30. IN THE RESULT, GROUND NO.2 OF THE ASSESSEES AP PEAL IS ALLOWED. 31. IN THE RESULT, APPEAL OF THE ASSESSEE FOR AY 20 10-11 IS ALLOWED. ITA NO. 2346/AHD/2015-AY 2010-11-REVENUES APPEAL 32. NOW, WE ADVERT TO THE REVENUES APPEAL CONCERNI NG AY 2010-11. 33. THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN THE CAPTIONED APPEAL CONCERNING AY 2010-11 READS AS UNDER:- 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION MADE OF RS.2,66,56,242/- ON ACCOUNT OF UNUTILIZED CENVAT CR EDIT U/S.145A OF THE ACT. 2. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELE TING THE DISALLOWANCE OF RS.38,30,834/- BEING AMORTIZATION OF LEASE CHARGES. 34. GROUND NO.1 CONCERNS ADDITION OF RS.2,66,56,242 /- ON ACCOUNT OF UNUTILIZED CENVAT CREDIT UNDER S.145A OF THE ACT . THERE BEING NO CHANGE IN THE FACTS POINTED OUT ON BEHALF OF THE REVENUE, THE ADDITION MADE UNDER S.145A IS NOT SUSTAINABLE IN VI EW OF THE EXCLUSIVE METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE RESUL TING IN TAX NEUTRALITY AS HELD IN APPEAL CONCERNING AY 2009-10 AS PER PARA NOS. 4- 8 OF THIS ORDER. WE, THUS, DECLINE TO INTERFERE WI TH THE ORDER OF THE CIT(A). 35. IN THE RESULT, GROUND NO.1 OF THE REVENUES APP EAL IS DISMISSED. 36. GROUND NO.2 CONCERNS DISALLOWANCE OF AMORTIZATI ON OF LEASE CHARGES. IDENTICAL ISSUE HAS BEEN DEALT WITH IN AY 2009-10 AND ANSWERED IN FAVOUR OF THE ASSESSEE AS PER PARA NOS. 11-13 OF THIS ORDER. WE, THUS, DECLINE TO INTERFERE WITH THE ORDER OF TH E CIT(A). ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 17 - 37. IN THE RESULT, GROUND NO.2 OF THE REVENUES APP EAL IS DISMISSED. 38. IN THE RESULT, APPEAL OF REVENUE FOR AY 2010-11 IS DISMISSED. ITA NO. 2797/AHD/2015-AY 2011-12-REVENUES APPEAL 39. THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN THE CAPTIONED APPEAL CONCERNING AY 2011-12 READS AS UNDER:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE MADE ON ACCOUNT OF LEASEHOLD LAND AMORTIZATION/DEPR ECIATION OF RS.45,60,365/-. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE APPEAL OF THE ASSESSEE AGAINST THE ACTION OF THE AO IN EXCLUDING RS.51,00,000/- FORM THE CLOSING WDV AND CONSEQUENTIAL DISALLOWANCE OF DEPRE CIATION OF RS.51,00,000/- (CORRECT FIGURE IS RS.5,10,000/-). 40. AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE LD.AR FOR THE ASSESSEE THAT THE APPEAL FILED BY THE REVENUE IS HI T BY RECENTLY ISSUED CBDT CIRCULAR NO.3 OF 2018 DATED 11/07/2018 REVISIN G THE PREVIOUS THRESHOLDS PERTAINING TO TAX EFFECTS. AS PER AFORE SAID CIRCULAR, ALL PENDING APPEALS FILED BY REVENUE ARE LIABLE TO BE D ISMISSED AS A MEASURE FOR REDUCING LITIGATION WHERE THE TAX EFFEC T DOES NOT EXCEED THE PRESCRIBED MONETARY LIMIT WHICH IS NOW REVISED AT RS.20 LAKHS. IN THE INSTANT CASE, THE TAX EFFECT ON THE DISPUTED IS SUES RAISED BY THE REVENUE IS STATED TO BE NOT EXCEEDING RS.20 LAKHS A ND THEREFORE APPEAL OF THE REVENUE IS REQUIRED TO BE DISMISSED IN LIMINE . 41. THE LEARNED DR FOR THE REVENUE FAIRLY ADMITTED THE APPLICABILITY OF THE CBDT CIRCULAR NO. 3 OF 2018. A CCORDINGLY, APPEAL OF THE REVENUE IS DISMISSED AS NOT MAINTAINABLE. H OWEVER, IT WILL BE ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 18 - OPEN TO THE REVENUE TO SEEK RESTORATION OF ITS APPE AL ON SHOWING INAPPLICABILITY OF THE AFORESAID CBDT CIRCULAR IN A NY MANNER. 42. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ASSESSEES CROSS OBJECTION NO. 202/AHD/2015-AY 2011 -12 43. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE I N THE CAPTIONED CROSS OBJECTION CONCERNING AY 2011-12 READS AS UNDE R:- 1. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF TH E RESPONDENT'S CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN NOT ADJUDICATIN G UPON GROUND NO. 1 OF THE RESPONDENT'S APPEAL CHALLENGING THE VALIDITY OF THE ASSESSMENT ORDER IMPUGNED BEFORE HIM, ON THE GROUND THAT IT WAS GENE RAL IN NATURE. 2. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE RESPONDENT'S CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE D ISALLOWANCE OF THE RESPONDENT'S CLAIM FOR DEDUCTION FOR PRELIMINARY EX PENSES OF RS.5,02,818 U/S. 35D AFTER FOLLOWING HIS PREDECESSORS UPHOLDING SIMILAR DISALLOWANCES IN EARLIER ASSESSMENT YEARS. HE OUGHT TO HAVE APPRE CIATED, INTER ALIA, THAT THE DECISIONS OF THE SUPREME COURT IN BROOKE BOND I NDIA LIMITED (225 ITR 798 AND OF THE GUJARAT HIGH COURT IN VARELI TEXTILE S LIMITED (284 ITR 238) HOLDING THAT SHARE ISSUE EXPENSES WERE CAPITAL IN N ATURE AND, THEREFORE, NOT DEDUCTIBLE AS REVENUE EXPENSES AS CLAIMED BY THE AS SESSES IN THOSE CASES, WERE NOT RELEVANT ON THE ISSUE OF THEIR DEDUCTIBILI TY U/S.35D (WHICH MADE PROVISION FOR DEDUCTION OF EXPENSES ON AMORTIZATION BASIS EVEN IF THEY BE CAPITAL IN NATURE) WHICH WAS REQUIRED TO BE DECIDED IN THE RESPONDENT'S PRESENT CASE AND THAT THE DECISION OF THE RAJASTHAN HIGH COURT IN CIT V. MULTI METALS LTD. (188 ITR 151) ON WHICH THE RESPON DENT HAD RELIED WAS DIRECTLY ON THE ISSUE AND IN FAVOUR OF THE ASSESSEE . HE OUGHT, ACCORDINGLY, TO HAVE ORDERED FOR THE DELETION OF THE DISALLOWANCE F OLLOWING THE SAID DECISION OF THE RAJASTHAN HIGH COURT. 3. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE RESPONDENT'S CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE D ISALLOWANCE OF RS 4,442 IN RESPECT OF EMPLOYEES' CONTRIBUTION TO PROVIDENT FUND. 44. GROUND NO.1 IS GENERAL IN NATURE DOES NOT REQUI RE SEPARATE ADJUDICATION. 45. GROUND NO.2 OF THE CO IS COVERED IN FAVOUR OF T HE ASSESSEE IN ASSESSEES OWN CASE IN AY 2008-09 IN ITA NO. 2516/A HD/2011. ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 19 - SIMILARLY, THE MATTER HAS BEEN ADJUDICATED IN FAVOU R OF THE ASSESSEE IN CONCERNING AY 2010-11 ALSO AS PER PARA NO.29 OF THI S ORDER. IN PARITY, A DEDUCTION FOR PRELIMINARY EXPENSES OF RS.5,02,818 /- UNDER S.35D OF THE ACT IS ALLOWED. 46. IN THE RESULT, GROUND NO.2 OF THE CROSS OBJECTI ON FILED BY THE ASSESSEE IS ALLOWED. 47. GROUND NO.3 OF THE CO CONCERNS DISALLOWANCE IN RESPECT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND. IN VIEW OF THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F CIT VS. GSRTC [2014] 366 ITR 170 (GUJ.), THE ISSUE IS DECIDED AGA INST THE ASSESSEE. 48. IN THE RESULT, CROSS OBJECTION OF THE ASSESSEE CONCERNING AY 2011-12 IS PARTLY ALLOWED. ITA NO. 2693/AHD/2016-AY 2012-13-ASSESSEES APPEAL 49. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE I N THE CAPTIONED APPEAL CONCERNING AY 2012-13 READS AS UNDER:- 1. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE AP PELLANTS CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING DISALLOWANCE U/S 35D FOR RS. 5,02,818/- WHEN NO SUCH DISALLOWANCE IS CALLED FOR. IT MAY KINDLY BE DELETED. 2. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APP ELLANTS CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING DISALLOWANCE FOR RS.6,770/- BEING EMPLOYEES CONTRIBUTION TO ESI, WHEN NO SUCH DISALL OWANCE IS CALLED FOR. IT MAY KINDLY BE DELETED. 3. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APP ELLANTS CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING DISALLOWANCE OF RS.3,22,38,166/- ON ACCOUNT OF DEPRECIATION ON GOODWILL ARISING ON DEME RGER OF ADANI ENERGY LTD FROM APPELLANT ON THE GROUND THAT SINCE AS PER ORDER OF HONBLE GUJARAT HIGH COURT DATED 09.12.2009, APPOINTED DATE OF DEMERGER IS 01.01.2007, DEPRECIATION ON GOODWILL OUGHT TO HAVE BEEN CLAIMED FROM APPOINTED DATE I.E. A.Y. 2007-08 AND NOT FROM EFFEC TIVE DATE I.E. 2010-11. ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 20 - THE LD. ASSESSING OFFICER MAY BE DIRECTED TO ALLOW FULL DEPRECIATION ON GOODWILL AMOUNTING TO RS.5,57,63,315/- AS CLAIMED I N RETURN OF INCOME. 3.1 IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE AP PELLANTS CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE DISALLOWA NCE OF DEPRECIATION ON GOODWILL WITHOUT APPRECIATING THE FACT THAT APPELLA NT COMPANY IS BEING ASSESSED AT MAXIMUM MARGINAL RATE AND EVEN IF IT IS HELD THAT APPELLANT IS ENTITLED FOR DEPRECIATION FROM A.Y. 2007-08 AND NOT A.Y. 2010-11, ENTIRE EXERCISE OF DISALLOWANCE OF DEPRECIATION ON GOODWIL L IS TAX NEUTRAL AND HENCE, UNCALLED FOR. 50. GROUND NO.1 CONCERNS DISALLOWANCE OF PRELIMINAR Y EXPENSES UNDER S.35D OF THE ACT. THE ISSUE IS SQUARELY COVE RED IN FAVOUR OF THE ASSESSEE BY EARLIER AYS 2009-10, 2010-11 & 2011-12 AS PER PARA 19 OF THIS ORDER. ACCORDINGLY, THE DISALLOWANCE MADE ON THIS SCORE IS DELETED. 51. IN THE RESULT, GROUND NO.1 OF THE ASSESSEES AP PEAL IS ALLOWED. 52. GROUND NO.2 CONCERNS DISALLOWANCE OF EMPLOYEES CONTRIBUTION TO ESI. THE ISSUE IS COVERED AGAINST THE ASSESSEE BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F CIT VS. GSRTC (SUPRA) AS DISCUSSED IN PARA 47 OF THIS ORDER. 53. IN THE RESULT, GROUND NO.2 OF THE ASSESSEES AP PEAL IS DISMISSED. 54. GROUND NO.3 CONCERNS DISALLOWANCE OF RS.3,22,38 ,166/- ON ACCOUNT OF DEPRECIATION ON GOODWILL ARISING ON DEME RGER. THE ISSUE HAS BEEN DISCUSSED IN LENGTH IN CO NO.171/AHD/2014 FILED BY THE ASSESSEE (SUPRA). AS PER DISCUSSION IN PARA NOS. 1 6-23 OF THIS ORDER, THE ISSUE REQUIRES TO BE DECIDED IN FAVOUR OF THE A SSESSEE ON FIRST PRINCIPLES. THEREFORE, THE ASSESSEE WILL BE ENTITL ED TO DEPRECIATION ON GOODWILL WHICH IS WORKED OUT TO RS.2,35,25,148/- ON LY AS THE CLAIM OF THE DEPRECIATION OF THE ASSESSEE FOR THE EARLIER YE ARS IN APPEAL HAS BEEN ACCEPTED. THEREFORE, GROUND NO.3 OF THE ASSES SEES APPEAL ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 21 - WHICH REPRESENTS EXCESS DIFFERENCE IN THE DEPRECIAT ION COMPUTED BY THE ASSESSEE ON PREMISE OF ALLOWABILITY OF DEPRECIA TION FROM THE YEAR OF ACTUAL SANCTION ACCORDED BY THE HONBLE GUJARAT HIGH COURT BECOMES INFRUCTUOUS. 55. IN THE RESULT, GROUND NO.3 OF THE ASSESSEES AP PEAL IS ACCORDINGLY DISMISSED. 56. IN THE RESULT, APPEAL OF THE ASSESSEE CONCERNIN G AY 2012-13 IS PARTLY ALLOWED. ITA NO. 2775/AHD/2016-AY 2012-13-REVENUES APPEAL 57. THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN THE CAPTIONED APPEAL CONCERNING AY 2012-13 READS AS UNDER:- 1. THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS I N DELETING THE ADDITION OF RS.46,75,548/- MADE ON ACCOUNT OF DISALLOWANCE OF AMORTIZATION/DEPRECIATION OF LEASE HOLD LAND. 2 THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1,55,814/- MADE U/S 41(1) OF THE ACT BEING CESSA TION OF LIABILITY. 3. THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.83,82,631/- MADE ON ACCOUNT OF DISALLOWANCE U/S 145A OF THE ACT BEING UNUTILIZED CENVAT CREDIT. 58. GROUND NO.1 CONCERNS AMORTIZATION OF LEASE CHA RGES OF LEASEHOLD LAND. THE ISSUE HAS BEEN ANSWERED IN FAV OUR OF THE ASSESSEE IN THE PRECEDING ASSESSMENT YEARS AS PER PARA NOS.1 1-13 OF THIS ORDER. THEREFORE, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A). IN CONSONANCE THEREWITH GROUND NO.1 OF THE REVENUES A PPEAL IS DISMISSED. ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 22 - 59. GROUND NO.2 CONCERNS ADDITION OF RS.1,55,814/- MADE UNDER S.41(1) OF THE ACT TOWARDS CESSATION OF LIABILITY. IN THE ABSENCE OF ONUS DISCHARGED BY THE REVENUE TOWARDS CESSATION OF LIABILITY, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) ON THIS SCO RE. GROUND NO.2 OF THE REVENUES APPEAL IS THUS DISMISSED. 60. GROUND NO.3 CONCERNS ENHANCEMENT OF CLOSING STO CK UNDER S.145A OF THE ACT TOWARDS UNUTILIZED CENVAT CREDIT AND CONSEQUENT INCREASE IN THE ASSESSED INCOME TO THIS EXTENT. TH E ISSUE HAS BEEN DELIBERATED IN LENGTH IN ITA NO.775/AHD/2014 RELEVA NT TO AY 2009-10 AS PER PARA NOS. 4-8 OF THIS ORDER. THUS, WE ARE O F THE VIEW THAT CIT(A) HAS APPRECIATED THE FACTS IN PERSPECTIVE AND DELETED THE ADDITION MADE UNDER S.145A OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THUS, WE DECLINE TO INTERFERE WITH TH E ORDER OF THE CIT(A). 61. THUS, GROUND NO.3 OF THE REVENUES APPEAL IS DI SMISSED. 62. IN THE RESULT, REVENUES APPEAL FOR AY 2012-13 IS DISMISSED. ITA NO. 2694/AHD/2016-AY 2013-14-ASSESSEES APPEAL 63. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE I N THE CAPTIONED APPEAL CONCERNING AY 2013-14 READS AS UNDER:- 1. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE AP PELLANTS CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING DISALLOWANCE U/S 35D FOR RS. 5,02,818/- WHEN NO SUCH DISALLOWANCE IS CALLED FOR. IT MAY KINDLY BE DELETED. 2. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APP ELLANTS CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING DISALLOWANCE FOR RS.7,994/- BEING EMPLOYEES CONTRIBUTION TO ESI, WHEN NO SUCH DISALL OWANCE IS CALLED FOR. IT MAY KINDLY BE DELETED. ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 23 - 3. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APP ELLANTS CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING DISALLOWANCE OF RS.2,41,78,625/- ON ACCOUNT OF DEPRECIATION ON GOODWILL ARISING ON DEME RGER OF ADANI ENERGY LTD FROM APPELLANT ON THE GROUND THAT SINCE AS PER ORDER OF HONBLE GUJARAT HIGH COURT DATED 09.12.2009, APPOINTED DATE OF DEMERGER IS 01.01.2007, DEPRECIATION ON GOODWILL OUGHT TO HAVE BEEN CLAIMED FROM APPOINTED DATE I.E. A.Y. 2007-08 AND NOT FROM EFFEC TIVE DATE I.E. 2010-11. THE LD. ASSESSING OFFICER MAY BE DIRECTED TO ALLOW FULL DEPRECIATION ON GOODWILL AMOUNTING TO RS.4,18,22,486/- AS CLAIMED I N RETURN OF INCOME. 3.1 IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE AP PELLANTS CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE DISALLOWA NCE OF DEPRECIATION ON GOODWILL WITHOUT APPRECIATING THE FACT THAT APPELLA NT COMPANY IS BEING ASSESSED AT MAXIMUM MARGINAL RATE AND EVEN IF IT IS HELD THAT APPELLANT IS ENTITLED FOR DEPRECIATION FROM A.Y. 2007-08 AND NOT A.Y. 2010-11, ENTIRE EXERCISE OF DISALLOWANCE OF DEPRECIATION ON GOODWIL L IS TAX NEUTRAL AND HENCE, UNCALLED FOR. 4. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APP ELLANTS CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING DISALLOWANCE U/S 14A R.W.R. 8D TO THE TUNE OF RS.70,125/- WHEN NO SUCH DISALLOWANCE IS CA LLED FOR. THE SAME MAY KINDLY BE DELETED. 64. GROUND NO.1 CONCERNS DISALLOWANCE OF PRELIMINAR Y EXPENSES UNDER S.35D OF THE ACT. THE ISSUE IS SQUARELY COVE RED IN FAVOUR OF THE ASSESSEE BY EARLIER AYS 2009-10, 2010-11, 2011-12 & 2012-13 AS PER PARA 19 OF THIS ORDER. ACCORDINGLY, THE DISALLOWAN CE MADE ON THIS SCORE IS DELETED. 65. IN THE RESULT, GROUND NO.1 OF THE ASSESSEES AP PEAL IS ALLOWED. 66. GROUND NO.2 CONCERNS DISALLOWANCE OF EMPLOYEES CONTRIBUTION TO ESI. THE ISSUE IS COVERED AGAINST THE ASSESSEE BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F CIT VS. GSRTC (SUPRA) AS DISCUSSED IN PARA 47 OF THIS ORDER. 67. IN THE RESULT, GROUND NO.2 OF THE ASSESSEES AP PEAL IS DISMISSED. ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 24 - 68. GROUND NO.3 BEING CONSEQUENTIAL HAVING REGARD T O THE DECISION IN THE EARLIER YEARS IS RENDERED INFRUCTUOUS OWING TO RELIEF GRANTED IN THE EARLIER YEARS AS CLAIMED. ACCORDINGLY, GROUND NO.3 OF THE ASSESSEES APPEAL IS DISMISSED. 69. GROUND NO.4 CONCERNS DISALLOWANCE MADE UNDER S. 14A R.W.R. 8D FOR RS.70,125/-. THE ASSESSEE HAS EARNED EXEMPT IN COME BY WAY OF DIVIDEND INCOME AMOUNTING TO RS.91,04,212/- ON INVE STMENT TO THE TUNE OF RS.10,00,50,000/-. THE AO INVOKED SECTION 14A OF THE ACT AND COMPUTED DISALLOWANCE AS PER STATUTORY FORMULA PROVIDED IN THE RULE 8D WHEREBY DISALLOWANCE OF RS.16,75,809/- WAS COMPUTED BY THE AO. AFTER TAKING INTO ACCOUNT, THE SUO MOTU DISALLOWANCE OF RS.1,80,000/- ON THIS COUNT, THE AO DISALLOWED THE REMAINING AMOUNT OF RS.14,95,809/- AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 70. IN THE FIRST APPEAL, THE CIT(A) DELETED THE DIS ALLOWANCE OF RS.14,25,684/- MADE TOWARDS PROPORTIONATE INTEREST EXPENDITURE AS PER RULE 8D(2)(II) OF THE ACT AND UPHELD THE DISALLOWAN CE OF RS.70,125/- TOWARDS ADMINISTRATIVE EXPENDITURE AS PER STATUTORY FORMULA OVER AND ABOVE THE DISALLOWANCE MADE BY THE ASSESSEE IN TERM S OF RULE 8D(2)(III) OF THE RULES. 71. BEFORE US, THE ASSESSEE HAS AGITATED THE DISALL OWANCE OF ADMINISTRATIVE EXPENSES OF RS.70,125/- CONFIRMED BY THE CIT(A) WHEREAS REVENUE HAS CHALLENGED THE ACTION OF THE CI T(A) FOR DELETING DISALLOWANCE OF RS.14,25,684/- MADE ON ACCOUNT OF P ROPORTIONATE INTEREST EXPENDITURE IN TERMS OF RULE 8D(2)(II) OF THE RULES. 72. AFTER PERUSAL OF THE ORDER OF THE CIT(A), WE FI ND THAT THE CIT(A) HAS DELETED THE DISALLOWANCE OF INTEREST EXPENDITUR E AFTER TAKING ACCOUNT THE INTEREST FREE CAPITAL AVAILABLE AT THE DISPOSAL OF THE ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 25 - ASSESSEE BY WAY OF OWN FUNDS AS WELL AS SET OFF AVA ILABLE ON ACCOUNT OF INTEREST INCOME AVAILABLE AT THE DISPOSAL OF THE ASSESSEE. WE FIND THAT THE ACTION OF THE CIT(A) IS ON SOUND FOOTING I N TUNE WITH BINDING JUDICIAL PRECEDENTS INCLUDING THE DECISION OF THE H ONBLE GUJARAT HIGH COURT RENDERED IN NIRMA CREDIT CAPITAL PVT. LTD. 85 TAXMANN.COM 72 (GUJ.). THUS, THE ACTION OF THE CIT(A) CANNOT BE A SSAILED ON THIS SCORE. THE CIT(A) ON THE OTHER HAND UPHELD THE DIS ALLOWANCE OF ADMINISTRATIVE EXPENDITURE AS QUANTIFIED IN TERMS O F RULE 8D(2)(III) OF THE RULES. THE ASSESSEE HAS FAILED TO PROVIDE ANY JUSTIFICATION FOR INTERFERENCE WITH THE ORDER OF THE CIT(A). THUS, G ROUND NO.2 OF THE REVENUES APPEAL AS WELL AS GROUND NO.4 OF THE ASSE SSEES APPEAL ON THIS COUNT REQUIRES TO BE DISMISSED. 73. IN THE RESULT, GROUND NO.4 OF THE ASSESSEES AP PEAL IS DISMISSED. 74. IN THE RESULT, APPEAL OF THE ASSESSEE CONCERNIN G AY 2012-13 IS PARTLY ALLOWED. ITA NO. 2776/AHD/2016-AY 2013-14-REVENUES APPEAL 75. THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN THE CAPTIONED APPEAL CONCERNING AY 2013-14 READS AS UNDER:- 1. THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS I N DELETING THE ADDITION OF RS.48,09,250/- MADE ON ACCOUNT OF DISALLOWANCE OF A MORTIZATION /DEPRECIATION OF LEASE HOLD LAND. 2 THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.14,25,684/- MADE U/S 14A R.W.R 8D OF THE ACT. 76. GROUND NO.1 CONCERNS AMORTIZATION OF LEASE CHA RGES OF LEASEHOLD LAND. THE ISSUE HAS BEEN ANSWERED IN FAV OUR OF THE ASSESSEE IN THE PRECEDING ASSESSMENT YEARS AS PER PARA NOS.1 1-13 OF THIS ORDER. ITA NO.775/AHD/14 & 9 ORS. [ADANI GAS LTD.] A.Y. 2009-10 TO 2013-14 - 26 - THEREFORE, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A). IN CONSONANCE THEREWITH GROUND NO.1 OF THE REVENUES A PPEAL IS DISMISSED. 77. GROUND NO.2 OF REVENUES APPEAL HAS BEEN DISCUS SED IN ASSESSEES APPEAL FOR AY 2013-14 IN PARA NOS. 69-72 OF THIS ORDER. 78. IN THE RESULT, GROUND NO.2 OF THE REVENUES APP EAL IS DISMISSED. 79. IN THE RESULT, REVENUES APPEAL FOR AY 2013-14 IS DISMISSED. 80. IN THE COMBINED RESULT, ALL FIVE REVENUES APPE ALS ARE DISMISSED WHEREAS ASSESSEES CROSS OBJECTIONS IN AY 2009-10 & 2011-12 AND APPEALS IN AY 2012-13 & 2013-14 ARE PARTLY ALLOWED AND APPEAL IN AY 2010-11 IS ALLOWED. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 17/10/2018 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 17/10/201 8