Advik Hi-Tech Pvt. Ltd., Pune V. Deputy Commissioner of Income-tax,

ITA 83/PUN/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7433 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 14-09-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 19-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA
• Keywords: Business income; Depreciation; Earning of tax free income; Question of law; Unabsorbed depreciation
• Section: 80IB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.83/PUN/2015 / ASSESSMENT YEAR : 2010-11 ADVIK HI-TECH PVT. LTD., GAT NO.357, PLOT NO.99A, CHAKAN TALEGAON ROAD, DIST. PUNE 410 501 PAN : AACCA3106E . /APPELLANT VS. DCIT, CIRCLE-8, PUNE . / RESPONDENT . / ITA NO.96/PUN/2015 / ASSESSMENT YEAR : 2010-11 DCIT, CIRCLE-8, PUNE . /APPELLANT VS. ADVIK HI-TECH PVT. LTD., GAT NO.357, PLOT NO.99A, CHAKAN TALEGAON ROAD, DIST. PUNE 410 501 PAN : AACCA3106E . / RESPONDENT / APPELLANT BY : SHRI SHARAD SHAH / RESPONDENT BY : SHRI MUKESH JHA, JCIT DATE OF HEARING : 14.09.2017 / DATE OF PRONOUNCEMENT: 22.09.2017 / ORDER PER D. KARUNAKARA RAO, AM : THESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE A ND THE REVENUE AGAINST THE ORDER OF CIT(A)-V, PUNE DATED 07-10-2014 FOR TH E ASSESSMENT YEAR 2010-11. ITA NOS.83 & 96/PUN/2015 ADVIK HI-TECH PVT. LTD., 2 ITA NO.83/PUN/2015 BY ASSESSEE : 2. GROUNDS RAISED BY THE ASSESSEE READ AS UNDER : 1. THE LEARNED AO ERRED IN DISALLOWING (AND LD.CIT -A ERRED IN UPHOLDING) THE CLAIM OF DEDUCTION U/S.80IB(3)(II) AMOUNTING TO RS. 4,46,49,436/-. 2. THE LEARNED AO ERRED IN TREATING (AND LD.CIT-A E RRED IN UPHOLDING) SHORT TERM CAPITAL GAIN OF RS.25,13,751/- AS BUSINESS INC OME. 3. (I) THE LEARNED AO ERRED IN DISALLOWING (AND LD. CIT-A ERRED IN UPHOLDING) AN AMOUNT OF EXPENSES AMOUNTING TO RS.2, 10,501/- U/S.14A R.W. RULE 8D. (II) THE LD. AO (AND LD.CIT-A ERRED IN DISREGARDIN G THE FACT THAT THE INVESTMENT WAS MADE IN GROWTH FUND AND NO EXEMPT IN COME IS EARNED ON THESE INVESTMENTS. 3. THE BASIC FACTS RELEVANT FOR ADJUDICATION OF THE SE APPEALS INCLUDE THAT THE ASSESSEE WAS A SMALL SCALE INDUSTRY (SSI) STARTING FROM A.Y. 2003-04 ONWARDS. THE SAID CLAIM OF SSI UNIT WAS ALLOWED TO THE ASSES SEE IN A.Y. 2003-04 AND A.Y. 2004-05. IN THE EARLIER A.Y. 2005-06, THE CLAIM OF THE ASSESSEE WAS TO BE RE- EXAMINED BY WAY OF RE-ASSESSMENT U/S.148 OF THE ACT QUA THE SSI STATUS. THE ITAT, PUNE QUASHED THE SAID NOTICE U/S.148 ON TECHN ICAL GROUNDS. IN EFFECT, THE CLAIM OF THE ASSESSEE WAS ALLOWED IN THIS YEAR ALSO . ASSESSEE DISCONTINUED TO CLAIM THE SSI STATUS FOR A.YRS. 2006-07 AND 2007-08 FOR C LAIMING OF DEDUCTION U/S.80IB(3)(II) OF THE ACT. HOWEVER, ASSESSEE RENE WED THE CLAIM OF SSI STATUS IN THE A.YRS. 2008-09 AND 2009-10. FOLLOWING THE DECIS ION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF M/S.SAMRUDDHI INDUSTRIES LT D. VS. JCIT IN ITA NO.1002/PN/2009 ORDER DATED 31-03-2011, THE CLAIM O F SSI STATUS OF THE ASSESSEE QUA THE DEDUCTION U/S.80IB(3)(II) WAS DENIED. ASSE SSEE FILED AN APPEAL BEFORE THE HONBLE HIGH COURT AND THE SAME IS PENDING FOR ADMI SSION. 4. IN THE BACKGROUND OF THE ABOVE FACTS, LD. COUNSE L FOR THE ASSESSEE SUBMITTED THAT DEDUCTION U/S.80IB(3)(II) OF THE ACT WAS CLAIMED IN THE PRESENT A.Y. 2010-11. AO DENIED THE SAID SSI STATUS AND THEREFO RE, THE CLAIM OF SAID DEDUCTION ITA NOS.83 & 96/PUN/2015 ADVIK HI-TECH PVT. LTD., 3 TOO. CIT(A) CONFIRMED THE ORDER OF THE AO RELYING ON THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE SAID EARLIER YEARS FOR THE A.YRS. 2008-09 AND 2009-10 WHICH IS NOW PENDING BEFORE THE HONBLE HIGH COURT FOR ADMISSION. CIT(A) REFERRED TO THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF M/S. ACE MULTI AXES SYSTEMS LTD. VS. DCIT 367 ITR 0266 WHICH WAS DECIDE D IN FAVOUR OF THE ASSESSEE ON SIMILAR FACTS. IN PARA 8, THE CIT(A) EXTRACTED THE RELEVANT PORTIONS FROM HIS ORDER FOR THE EARLIER A.Y. 2008-09. HE ALSO MADE A REFERENCE TO THE SAID HONBLE KARNATAKA HIGH COURT JUDGMENT IN PARA 9 OF HIS ORDE R BEFORE UPHOLDING THE BINDING NATURE OF THE DECISION OF THE JURISDICTIONAL TRIBUN AL IN THE ASSESSEES OWN CASE AND IN THE CASE OF M/S.SAMRUDDHI INDUSTRIES LTD. (SUPRA ). EVENTUALLY, CIT(A) IGNORED THE SAID JUDGMENT OF KARNATAKA HIGH COURT, THE SOLI TARY JUDGMENT AVAILABLE ON THE SUBJECT. FOR THE SAKE OF COMPLETENESS, WE PROCEED TO EXTRACT THE OPERATIONAL PARA NO. 9 AS UNDER : 9. SINCE, FACTS ARE THE SAME, THERE IS NO REASON T O TAKE A DIFFERENT VIEW. ACCORDINGLY, FOLLOWING MY ORDER FOR A.Y. 2008-09, TH E ACTION OF THE ASSESSING OFFICER IS UPHELD AND THE GROUND TAKEN BY THE APPELLANT IS DISMISSED. THE APPELLANT HAS RELIED UPON THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF MULTI AXES SYSTEMS LTD. VS. DCIT, ITA NO.477 OF 2013. THE REL IANCE OF THE APPELLANT WILL NOT HELP THE APPELLANT AS THE SAME PERTAINS TO NON-JURI SDICTIONAL HIGH COURT. TILL THE DECISION OF APPEAL BEFORE HONBLE BOMBAY HIGH COURT IN THE CASE OF SAMURUDHI INDUSTRIES LTD. WHICH HAS BEEN ADMITTED ON 27.02.20 13, THE DECISION OF JURISDICTIONAL TRIBUNAL IS REQUIRED TO BE FOLLOWED. THUS, THE CIT(A) IGNORED THE EXISTING JUDGMENT OF H ONBLE KARNATAKA HIGH COURT AND RELIED ON THE COORDINATE BENCH DECISION OF THE TRIBUNAL. 5. AGGRIEVED WITH THE ORDER OF CIT(A), ASSESSEE IS IN APPEAL BEFORE US WITH THE GROUNDS EXTRACTED ABOVE. 6. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT PUNE BENCH OF THE TRIBUNAL FOLLOWED THE DECISION OF THE ITAT IN THE C ASE OF M/S. SAMRUDDHI INDUSTRIES LTD. IN ITA NO.1002/PN/2009 WHILE DENYING THE SSI STATUS LINKED DEDUCTION U/S.80IB(3)(II) OF THE ACT TO THE ASSESSEE FOR THE A.YRS. 2008-09 AND 2009-10. THE ITA NOS.83 & 96/PUN/2015 ADVIK HI-TECH PVT. LTD., 4 APPEALS AGAINST THE SAID ORDERS OF THE TRIBUNAL IN ASSESSEES OWN CASE ARE PENDING FOR ADMISSION BEFORE THE JURISDICTIONAL HIGH COURT. THEREFORE, ACCORDING TO THE LD. AR, THE TRIBUNAL DECIDED THE ISSUE BOTH IN THE CASE OF (1) M/S. SAMRUDDHI INDUSTRIES LTD. AS WELL AS (2) IN ASSESSEE OWN CAS E FOR A.YRS. 2008-09 AND 2009-10, AGAINST THE ASSESSEES WHEN THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT IS NOT IN EXISTENCE ON THE ISSUE UNDER CONSIDERATION. THE IS SUE RELATES TO IF THE SSI- ASSESSEE CAN CONTINUE TO CLAIM DEDUCTION U/S.80IB(3 )(II) OF THE ACT EVEN WHEN THE SAID ASSESSEE GROWS BEYOND THE SSI DEFINITION. 7. ON THIS ISSUE, LD. COUNSEL FOR THE ASSESSEE BROU GHT OUR ATTENTION TO THE SAID JUDGMENT OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF ACE MULTI AXES SYSTEMS LTD. (367 ITR 0266), WHICH WAS THE ONLY FA VOURABLE ONE AND UNFORTUNATELY NOT AVAILABLE WHEN THE CASE OF M/S. SAMRUDDHI INDUS TRIES LTD. WAS DECIDED BY THE TRIBUNAL AGAINST THAT ASSESSEE. SIMILARLY, THIS JU DGMENT WAS ALSO NOT AVAILABLE WHEN THE ASSESSEES SAID APPEALS WERE DECIDED AGAIN ST THE PRESENT ASSESSEE. FURTHER, REFERRING TO THE FINDING OF CIT(A) IN PARA 9 ABOVE, LD. AR DEMONSTRATED THAT THE CIT(A) FAILED TO FOLLOW THE SAID PRINCIPLE S OF JUDICIAL DISCIPLINE WHICH DICTATES THAT IN THE ABSENCE OF JUDGMENT OF JURISDI CTIONAL HIGH COURT THE JUDGMENT OF OTHER HIGH COURTS HAS TO BE FOLLOWED IN PREFEREN CE TO THE COORDINATE BENCHES OF THE TRIBUNAL. IT IS NOT THE CASE OF THE CIT(A) THA T THE SAID JUDGMENT IS IN APPLICABLE TO THE FACTS OF THE PRESENT CASE. FOR THIS PROPOSI TION, HE RELIED ON THE JUDGMENT OF JURISDICTIONAL HIGH COURT IN THE CASE OF THANA ELEC TRICITY SUPPLY COMPANY REPORTED IN 206 ITR 0727 (BOM) AND ALSO THE SAID JUDGMENT OF HONBLE KARNATAKA HIGH COURT. LD. COUNSEL FOR THE ASSESSEE FILED WRITTEN SUBMISSION IN THIS REGARD GIVING THE FOLLOWING FACT AND VARIOUS LEGAL PROPOSITIONS. 8. FOR THE SAKE OF COMPLETENESS, WE PROCEED TO THE EXTRACT THE SAME IN THIS ORDER AS UNDER : ITA NOS.83 & 96/PUN/2015 ADVIK HI-TECH PVT. LTD., 5 THE KARNATAKA HIGH COURT DECISION IN CASE OF A 'AC E MULTI AXES SYSTEMS LTD'- 367 ITR 0266 - (PAGE 49 OF STATUTE COMPILATIO N BOOK) WAS NOT AVAILABLE WHEN THE CASE OF SAMRUDDHI INDUSTRIES LTD (SUPRA) HAS DECIDED THE ISSUE IN FAVOR OF REVENUE. SO ALSO, WHEN THE DE CISION OF ADVIK HI-TECH PVT LTD (OUR OWN CASE) WAS DELIVERED. THE ISSUE INVOLVED IN THE CASE OF KARNATAKA HC CASE IS SIMILAR TO OUR CASE. RELEVANT PORTION OF THE DECISION IS REPRODUCED HERE IN BELOW FOR YOUR HONOR'S READY REFERENCE. 4. SEC.80IB IS AN INCENTIVE PROVISION. IT PROVIDES DEDUCTION IN RESPECT OF PROFITS AND GAINS FROM CERTAIN INDUSTRIAL UNDERTAKI NGS OTHER THAN INFRASTRUCTURE DEVELOPMENT UNDERTAKINGS. FOR AN IND USTRIAL UNDERTAKING TO BE ELIGIBLE FOR THE SAID DEDUCTION, IT HAS TO FULFILL ALL THE CONDITIONS MENTIONED UNDER SUB-SEC.(2) OF SEC. 80IB. THE FOUR CONDITIONS WHICH ARE STIPULATED THEREIN ARE, FIRSTLY, THE INDUSTRIAL UNDERTAKING MU ST NOT HAVE BEEN FORMED BY SPLITTING UP OR RECONSTRUCTION OF A BUSINESS ALREAD Y IN EXISTENCE. THE SECOND CONDITION IS, SUCH AN UNDERTAKING IS NOT FORMED BY TRANSFER OF MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE. THE THIRD CO NDITION IS THAT THE INDUSTRIAL UNDERTAKING MANUFACTURES OR PRODUCES ANY ARTICLE OR THING NOT BEING ANY ARTICLE OR THING SPECIFIED IN THE LIST IN ELEVENTH SCHEDULE. HOWEVER, IN RESPECT OF A SMALL SCALE INDUSTRY UNDERTAKING, E VEN THAT CONDITION IS WAIVED. IN OTHER WORDS, A SMALL SCALE INDUSTRY MANU FACTURING OR PRODUCING ANY ARTICLE OR THING SPECIFIED IN THE LIST IN THE E LEVENTH SCHEDULE, IS ALSO ENTITLED TO THE AFORESAID DEDUCTION. THE FOURTH CON DITION IS, THE SAID INDUSTRIAL UNDERTAKING EMPLOYS 10 OR MORE WORKERS I N A MANUFACTURING PROCESS CARRIED ON WITH THE AID OF POWER OR EMPLOYS 20 OR MORE WORKERS IN A MANUFACTURING PROCESS CARRIED ON WITHOUT THE AID OF POWER. ONCE THESE FOUR CONDITIONS ARE FULFILLED, THE ASSESSEE IS ENTITLED TO THE BENEFIT UNDER SEC. BOIB OF THE ACT. SUB-SEC.(3) OF SEE. 80IB PROVIDES THE EXTENT OF DEDUCTION ELIGIBLE UNDER SEC. 80IB AND ALSO THE NUMBER OF YEA RS SUCH A DEDUCTION IS AVAILABLE TO SUCH AN UNDERTAKING. SUB-SEE. (3) MAND ATES THAT THE INDUSTRIAL UNDERTAKING SHALL BE ELIGIBLE FOR THE SAID DEDUCTIO N FOR A PERIOD OF 10 CONSECUTIVE YEARS, BEGINNING WITH THE INITIAL ASSES SMENT YEAR. HOWEVER, IT IS SUBJECT TO TWO CONDITIONS AS STIPULATED THEREIN. TH E SECOND CONDITION IS WHAT IS APPLICABLE TO THE CASE ON HAND WHICH PROVIDES, I F THE INDUSTRIAL UNDERTAKING IS A SMALL SCALE INDUSTRY UNDERTAKING, IT HAS TO BEGIN MANUFACTURE OR PRODUCE ARTICLES OR THINGS AT ANY TI ME DURING THE PERIOD BEGINNING ON THE 1ST DAY OF APRIL 1995 AND END ON T HE 31ST DAY OF MARCH 2002. THIS IS A CONDITION WHICH A SMALL SCALE INDUS TRY HAS TO FULFILL IN ADDITION TO THE CONDITIONS MENTIONED IN SUB-SEC.(2) OF SEC. 80IB. ONCE ALL THESE CONDITIONS ARE FULFILLED, A SMALL SCALE INDUSTRY IS ENTITLED TO THE BENEFIT OF DEDUCTION FOR A PERIOD OF 10 CONSECUTIVE YEARS BEGI NNING WITH THE INITIAL ASSESSMENT YEAR. 5. IN THE ENTIRE PROVISION, THERE IS NO INDICATION THAT THESE CONDITIONS HAD TO BE FULFILLED BY THE ASSESSEE ALL THE 10 YEARS. WHEN ONCE THE BENEFIT OF 10 YEARS, COMMENCING FROM THE INITIAL YEAR, IS GRANTED , IF THE UNDERTAKING SATISFY ALL THESE CONDITIONS INITIALLY, THE UNDERTAKING IS ENTITLED TO THE BENEFIT OF 10 CONSECUTIVE YEARS. THE ARGUMENT THAT, IN THE COURSE OF 10 YEARS, IF THE GROWTH OF THE INDUSTRY IS FAST AND IT ACQUIRES MACH INERY AND THE TOTAL VALUE OF THE MACHINERY EXCEEDS RS. 1 CRORE, IT CEASES TO HAVE THE SAID BENEFIT, DO NOT FOLLOW FROM ANY OF THE PROVISIONS. IT IS TRUE T HAT THERE IS NO EXPRESS PROVISION INDICATING EITHER WAY, WHAT WOULD BE THE POSITION IF THE SMALL SCALE INDUSTRY CEASES TO BE A SMALL SCALE INDUSTRY DURING THE SAID PERIOD OF 10 YEARS. BECAUSE OF THAT AMBIGUITY., A NEED FOR INTER PRETATION ARISES. IF WE KEEP IN MIND THE OBJECT OF THE LEGISLATURE PROVIDIN G FOR THESE INCENTIVES AND WHEN A PERIOD OF 10 YEARS IS PRESCRIBED, THAT IS TH E PERIOD, PROBABLY, WHICH IS REQUIRED FOR ANY INDUSTRY TO STABILIZE ITSELF. D URING THAT PERIOD THE INDUSTRY ITA NOS.83 & 96/PUN/2015 ADVIK HI-TECH PVT. LTD., 6 NOT ONLY MANUFACTURES PRODUCTS, IT GENERATES EMPLOY MENT AND IT ADDS TO THE WEALTH OF THE COUNTRY. MERELY BECAUSE AN INDUSTRY S TABILIZES EARLY, MAKES PROFITS, MAKES FUTURE INVESTMENT IN THE SAID BUSINE SS, AND IT GOES OUT OF THE DEFINITION OF THE SMALL SCALE INDUSTRY, THE BENEFIT UNDER SEC.80IB CANNOT BE DENIED. IF SUCH A LITERAL INTERPRETATION IS PLACED ON THE SAID PROVISION, IT WOULD RUN COUNTER TO THE VERY OBJECT OF GRANTING IN CENTIVES. IT WOULD KILL THE INDUSTRY. THEREFORE KEEPING IN MIND THE OBJECT WITH WHICH THESE PROVISIONS ARE ENACTED, KEEPING IN MIND THE INDUSTRIAL GROWTH WHICH IS REQUIRED TO BE ACHIEVED, IF TWO INTERPRETATIONS ARE POSSIBLE, THE COURTS HAVE TO LEAN IN FAVOUR OF EXTENDING THE BENEFIT OF DEDUCTION TO AN ASSESSEE WHO HAS AVAILED THE OPPORTUNITY GIVEN TO HIM UNDER LAW AND HAS GROW N IN HIS BUSINESS. THEREFORE WE ARE OF THE VIEW, IF A SMALL SCALE INDU STRY, IN THE COURSE, OF 10 YEARS, STABILIZES EARLY, MAKES FURTHER INVESTMENTS IN THE BUSINESS AND IT RESULTS IN IT'S GOING OUTSIDE THE PURVIEW OF THE DE FINITION OF A SMALL SCALE INDUSTRY, THAT SHOULD NOT COME IN THE WAY OF ITS CL AIMING BENEFIT UNDER SEC. 80IB FOR 10 CONSECUTIVE YEARS, FROM THE INITIAL ASS ESSMENT YEAR. THEREFORE THE APPROACH OF THE AUTHORITIES RUNS COUNTER TO THE SCHEME AND THE INTENT OF THE LEGISLATURE. THEREBY THEY HAVE DENIED THE LEGIT IMATE BENEFIT, AN INCENTIVE GRANTED TO THE ASSESSEE. BOTH THE SAID OR DERS CANNOT BE SUSTAINED. THEREFORE THE SUBSTANTIAL QUESTION OF LAW IS ANSWER ED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. HENCE WE PASS THE FOLLOWING: AT THIS STAGE, WE MAY ALSO REFER TO THE DECISION IN CASE OF PRAVIN SONI 333 ITR 0324 - DELHI HE (RELIED UPON BY THE REVENUE DR) . THIS DECISION DOES NOT HELP REVENUE IN A CASE WHERE CONDITIONS WERE PR OVED IN THE INITIAL YEAR. THE DECISION QUOTED BY THE LD. DR IS IN RESPECT OF SITUATION WHERE THE CONDITIONS WHEN THE ASSESSEE FIRST TIME PUT UP ITS CLAIM REQUIRED TO BE FULFILLED. THEREFORE, WE PRAY YOUR HONOR TO FOLLOW JUDICIAL PR ECEDENT (I.E. FOLLOW KARNATAKA HC DECISION) AS THE BINDING PRECEDENT. TH IS JUDICIAL PRECEDENT IS AS PER BORN HC DECISION IN CASE OF M/S VALSON DYEIN G BLEACHING & PRINTING WORKS - BOM HC - CENTRAL EXCISE APPEAL NO. 58 OF 20 09 - COPY OF THE DECISION IS AT PAGE 1 OF STATUTE COMPILATION BOOK 1 - RELEVANT PARA OF THE DECISION IS REPRODUCED HERE BELOW - PARA 13 (PAGE 85 OF STATUTE COMPILATION B OOK) UNTIL CONTRARY DECISION IS GIVEN BY ANY OTHER COMPE TENT HIGH COURT, WHICH IS BINDING ON A TRIBUNAL IN THE STATE OF BOMBAY, IT HA S TO PROCEED ON THE FOOTING THAT THE LAW DECLARED BY THE HIGH COURT, TH OUGH OF ANOTHER STATE, IS THE FINAL LAW OF THE LAND. WHEN THE TRIBUNAL SET AS IDE THE ORDER OF PENALTY IT DID NOT GO INTO THE QUESTION OF INTRA VIRES OR ULTR A VIRES. IT DID NOT GO INTO THE QUESTION OF CONSTITUTIONALITY OF SECTION 140(3). TH AT SECTION WAS ALREADY DECLARED ULTRA VIRES BY A COMPETENT HIGH COURT IN T HE COUNTRY AND AN AUTHORITY LIKE AN INCOME-TAX TRIBUNAL ACTING ANYWHE RE IN THE COUNTRY HAS TO RESPECT THE LAW LAID DOWN BY THE HIGH COURT, THOUGH OF DIFFERENT STATE, SO LONG AS THERE IS NO CONTRARY DECISION OF ANY OTHER HIGH COURT ON THAT QUESTION. IT IS ADMITTED BEFORE US THAT THE TIME WH EN THE TRIBUNAL DECIDED THE QUESTION, NO OTHER HIGH COURT IN THE COUNTRY HA D TAKEN A CONTRARY VIEW ON THE QUESTION OF CONSTITUTIONALITY OF SECTION 140 (3). THAT BEING THE POSITION, IT IS NOT POSSIBLE FOR US TO TAKE THE VIE W THAT THE TRIBUNAL IN BOMBAY, WHEN IT SET ASIDE THE ORDER OF PENALTY, WEN T INTO THE QUESTION OF CONSTITUTIONALITY OF THAT SECTION AND GIVEN A FINDI NG THAT IT IS ULTRA VIRES FOLLOWING THE DECISION OF THE MADRAS HIGH COURT. WH AT THE TRIBUNAL REALLY DID WAS THAT IN VIEW OF THE PRONOUNCED BY THE MADRAS HI GH COURT IT PROCEEDED ON THE FOOTING THAT SECTION 140(3) WAS NON-EXISTENT AND SO THE ORDER OF PENALTY PASSED THEREUNDER CANNOT BE SUSTAINED. ITA NOS.83 & 96/PUN/2015 ADVIK HI-TECH PVT. LTD., 7 THE QUESTION INVOLVED IN THE PRESENT CASE IS: WHETH ER THE TRIBUNAL WAS JUSTIFIED IN FOLLOWING THE JUDGMENT OF THE MADRAS H IGH COURT IN THE CASE OF BEAUTY DYERS(SUPRA). THE TRIBUNAL IN THE IMPUGNED O RDER DID NOT EXAMINE ISSUE RELATING TO THE VALIDITY OF THE NOTIFICATION NO.42\98 BECAUSE THE TRIBUNAL HAD NO JURISDICTION TO EXAMINE THE SUBJECT ISSUE. O N ITS INDEPENDENT CONSIDERATION, IT DID NOT COME TO AN INDEPENDENT CO NCLUSION THAT THE SAID NOTIFICATION IS ULTRA VIRES THE PROVISIONS OF THE A CT. THE TRIBUNAL HAS MERELY FOLLOWED THE JUDGEMENT OF THE MADRAS HIGH COURT WHI CH WAS BINDING ON THE TRIBUNAL IN VIEW OF THE LAW LAID DOWN BY THE DOWN B Y THE LEARNED DIVISION BENCH OF THIS COURT IN THE CASE OF SMT. GODAVARIDEV I SARAF (SUPRA). IN OUR CONSIDERED VIEW, THE TRIBUNAL HAD NO OPTION BUT TO FOLLOW THE JUDGEMENT OF THE MADRAS HIGH COURT. FURTHER, THE DECISION IN CASE OF SMT. GODAVARIDEVI SARAF - HIGH COURT OF BOMBAY - 113 ITR 0589 ALSO SUPPORTS OUR CONTENTION - APPEAL (TRIBUNAL)-JURISDICTION OF TRIBUNAL-CONSTITU TIONALITY OF PROVISION VIS- A- VIS FOLLOWING HIGH COURT DECISION-IT ACT IS ALL-IND IA STATUTE AND IF THE TRIBUNAL IN MADRAS, IN VIEW OF THE DECISION OF THE MADRAS HIGH COURT, HAS TO PROCEED ON THE FOOTING THAT S. 140A(3) WAS NON-EXIS TENT, THE ORDER OF PENALTY THEREUNDER CANNOT BE IMPOSED BY THE AUTHORI TY UNDER THE ACT-UNTIL A CONTRARY DECISION IS GIVEN BY ANY OTHER COMPETENT H IGH COURT, WHICH IS BINDING ON A TRIBUNAL IN THE STATE OF BOMBAY, IT HA S TO PROCEED ON THE FOOTING THAT THE LAW DECLARED BY THE HIGH COURT, TH OUGH OF ANOTHER STATE, IS THE FINAL LAW OF THE LAND-IT IS NOT POSSIBLE TO TAK E THE VIEW THAT THE TRIBUNAL IN BOMBAY, WHEN IT SET ASIDE THE ORDER OF PENALTY, WENT INTO THE QUESTION OF THE CONSTITUTIONALITY OF THAT SECTION AND GAVE A FI NDING THAT IT IS ULTRA VIRES FOLLOWING THE DECISION OF THE MADRAS HIGH COURT- WH AT THE TRIBUNAL REALLY DID WAS THAT IN VIEW OF THE LAW PRONOUNCED BY THE MADRA S HIGH COURT IT PROCEEDED ON THE FOOTING THAT S. 140A(3) WAS NON-EX ISTENT AND SO THE ORDER OF PENALTY PASSED THEREUNDER CANNOT BE SUSTAINED. WE ALSO STATE THAT, THE LD. REVENUE DR HAS RELIED U PON DECISION IN CASE OF THANA ELECTRICITY - BOM HC - 206 ITR 727. HOWEVE R, THAT DECISION IS DISTINGUISHABLE ON FACTS AND HON. PUNE ITAT IN 'LAP FINANCE & CONSULTANCY PVT LTD. - ITA NO. 1716 TO 1718/PN/22012 (PAGE 87 O F STATUTE COMPILATION BOOK 1) HAS DISTINGUISHED THE SAME BY RELYING UPON DECISION OF SMT. GODAVARIDEVI SARAF. RELEVANT PARA OF THE DECISION I S AS UNDER - PARA 6. SECONDLY, EVEN OTHERWISE WE FIND THAT THE CIT(A) HA S NOT CORRECTLY APPRECIATED THE LEGAL POSITION IN COMING TO CONCLUD E THAT THE VIEW EXPRESSED BY THE SPECIAL BENCH OF THE TRIBUNAL IS TO BE PREFE RRED THAN THAT EXPRESSED BY THE HON'BLE MADRAS HIGH COURT. ACCORDING TO THE CIT(A), THE DECISION OF THE MADRAS HIGH COURT IS OF A NON-JURISDICTIONAL HI GH COURT AND ON THE BASIS OF THE PRINCIPLE OF STARE-DECISIS EXPLAINED IN THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. THANA ELEC TRICITY SUPPLY LTD., (1994) 206 ITR 727 (BOM), THE DECISION OF THE HON'B LE MADRAS HIGH COURT IS NOT A BINDING PRECEDENT ON THE PUNE BENCH OF THE TR IBUNAL. HOWEVER, IT CANNOT BE LOST SIGHT, THAT IN THE SAME JUDGMENT HON 'BLE BOMBAY HIGH COURT HAS OBSERVED THAT THE JUDGMENT OF A HIGH COURT OUTS IDE ITS TERRITORIAL JURISDICTION WOULD HAVE A PERSUASIVE EFFECT. NOW, F OR THE SAKE OF ARGUMENT EVEN IF WE SAIL ALONG WITH THE STAND OF THE CIT(A) TO THE EFFECT THAT THE JUDGMENT OF THE HON'BLE MADRAS HIGH COURT IS NOT A BINDING PRECEDENT ON THE PUNE BENCH OF THE TRIBUNAL, THE MOOT QUESTION T HAT ARISES IS WHETHER THE PUNE BENCH OF THE TRIBUNAL IN SERUM'S CASE (SUPRA) ERRED IN APPLYING THE ITA NOS.83 & 96/PUN/2015 ADVIK HI-TECH PVT. LTD., 8 JUDGMENT OF THE HON'BLE MADRAS HIGH COURT IN THE CA SE OF VELAYUDHASWAMY SPINNING MILLS (P) LTD. (SUPRA) IN PREFERENCE TO TH E CONTRARY DECISIONS OF THE TRIBUNAL? IN OUR CONSIDERED OPINION, THE ANSWER IS AN EMPHATIC 'NO', BECAUSE FOR A TRIBUNAL THE DECISION OF A HIGH COURT THOUGH OF A NON- JURISDICTIONAL HIGH COURT, HAS A HIGHER PERSUASIVE EFFECT THAN THE DECISIONS OF OTHER TRIBUNALS, AS A TRIBUNAL STANDS ON A LOWER PE DESTAL THAN A HIGH COURT. IN ANY CASE, IN THE PRESENT CASE, UNDISPUTEDLY, THE JUDGMENT OF THE HON'BLE MADRAS HIGH COURT IS THE SOLITARY JUDGMENT OF A HIG H COURT AND THEREFORE, FOLLOWING THE RATIO LAID DOWN IN THE CASE OF GODAVA RIDEVI SARAF (SUPRA), THE TRIBUNAL IN THE CASE OF SERUM INTERNATIONAL LTD. (S UPRA) MADE NO MISTAKE IN DECIDING THE ISSUE IN ACCORDANCE WITH THE JUDGMENT OF THE HON'BLE MADRAS HIGH COURT. THEREFORE, IN OUR VIEW, THERE IS NO JUS TIFICATION ON THE PART OF THE CIT(A) FOR NOT FOLLOWING THE DECISION OF THE TRIBUN AL IN THE CASE OF SERUM INTERNATIONAL LTD. (SUPRA). THEREFORE, IN VIEW OF ALL THE ABOVE, WE PRAY YOUR H ONOR ALLOW CLAIM U/S 80IB(3)(II) CONSIDERING DECISION OF KARNATAKA HC & DELHI HC. 9. LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE RELIED HEAVILY ON THE ORDER OF THE AO, CIT(A) AND THE COORDINATE BENCH ORDERS O F THE TRIBUNAL IN THE CASE OF M/S. SAMRUDDHI INDUSTRIES LTD.(SUPRA) AS WELL AS TH E ORDER IN ASSESSEE OWN CASE FOR A.YRS. 2008-09 AND 2009-10 (SUPRA). LD. DR SUB MITTED THAT THE DECISION OF THE CIT(A) SHOULD BE CONFIRMED AS THE JUDGMENT OF HONB LE KARNATAKA HIGH COURT IN THE CASE OF ACE MULTI AXES SYSTEMS LTD. (SUPRA) CONSTIT UTES THE ONE FROM THE NON- JURISDICTIONAL HIGH COURT. LD. DR MERELY RELIED ON THE ORDER OF THE AO/CIT(A), WHEN THE BENCH MENTIONED ABOUT THE PRINCIPLE OF JUDICIAL DISCIPLINE AND THE REQUIREMENT OF FOLLOWING THE JUDGMENT OF ANY HIGH COURT WHEN TH E JUDGMENT FROM JURISDICTIONAL HIGH COURT IS NOT AVAILABLE ON THE SUBJECT. 10. WE HEARD BOTH THE PARTIES AND PERUSED THE ORDER S/JUDGMENTS CITED BY THE PARTIES ON THE SUBJECT. WE FIND THAT THERE IS NO DI SPUTE ON THE FACT OF SSI STATUS WHEN THE ASSESSEE WAS INCORPORATED AND WHEN IT FIRS T CLAIMED DEDUCTION U/S.80IB(3)(II) OF THE ACT IN THE A.Y. 2003-04. UN DER THE SAID PROVISIONS, ASSESSEE IS ENTITLED FOR DEDUCTION FOR THE PERIOD OF 10 YEAR S. RELEVANT PROVISIONS IN THIS REGARD READ AS UNDER : ITA NOS.83 & 96/PUN/2015 ADVIK HI-TECH PVT. LTD., 9 80IB(1) . . . . . . . (2) . . . . . . . . . . . (3) THE AMOUNT OF DEDUCTION IN THE CASE OF AN INDUS TRIAL UNDERTAKING SHALL BE TWENTY-FIVE PER CENT (OR THIRTY PER CENT WHERE THE ASSESSEE IS A COMPANY), OF THE PROFITS AND GAINS DERIVED FROM SUCH INDUSTRIAL UNDE RTAKING FOR A PERIOD OF TEN CONSECUTIVE ASSESSMENT YEARS (OR TWELVE CONSECUTIVE ASSESSMENT YEARS WHERE THE ASSESSEE IS A CO-OPERATIVE SOCIETY) BEGINNING WITH THE INITIAL ASSESSMENT YEAR SUBJECT TO THE FULFILMENT OF THE FOLLOWING CONDITIO NS, NAMELY : 11. THE SUB-SECTION (3) REFERS TO THE ANY PARTICUL AR UNDERTAKING NOTIFIED IN THE OFFICIAL GAZETTE AND THE UNDERTAKING REFERS TO TH E SMALL SCALE INDUSTRIES. THE DEDUCTION IS AVAILABLE FOR 10 CONSECUTIVE YEARS BEG INNING WITH THE INITIAL ASSESSMENT YEAR SUBJECTED TO THE FULFILLMENT OF TH E CONDITIONS MENTIONED IN CLAUSE (I) & (II) OF SUB-SECTION (3) OF SECTION 80IB OF TH E ACT. THE SAID CLAUSES READ AS UNDER : (I) IT BEGINS TO MANUFACTURE OR PRODUCE, ARTICLES O R THINGS OR TO OPERATE SUCH PLANT OR PLANTS AT ANY TIME DURING THE PERIOD BEGINNING FROM THE 1ST DAY OF APRIL, 1991 AND ENDING ON THE 31ST DAY OF MARCH, 1995 OR SUCH FURTH ER PERIOD AS THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZ ETTE, SPECIFY WITH REFERENCE TO ANY PARTICULAR UNDERTAKING; (II) WHERE IT IS AN INDUSTRIAL UNDERTAKING BEING A SMALL SCALE INDUSTRIAL UNDERTAKING, IT BEGINS TO MANUFACTURE OR PRODUCE ARTICLES OR THINGS OR TO OPERATE ITS COLD STORAGE PLANT [NOT SPECIFIED IN SUB-SECTION (4) OR SUB-SECT ION (5)] AT ANY TIME DURING THE PERIOD BEGINNING ON THE 1ST DAY OF APRIL, 1995 AND ENDING ON THE 31ST DAY OF MARCH, [2002]. 12. NOW, WE HAVE TO DECIDE WHETHER ASSESSEE WILL LO SE THE BENEFIT OF SAID DEDUCTION WHEN IT GROWS INTO A LARGER INDUSTRY OUTS IDE THE DEFINITION OF SSI UNIT. THE ISSUE ADJUDICATED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF ACE MULTI AXES SYSTEMS LTD. (SUPRA) IS THE SAME PRECISELY. W E PROCEED TO EXTRACT THE HELD PORTION FROM THE SAID JUDGMENT : HELD : IN THE ENTIRE PROVISION, THERE WAS NO INDIC ATION THAT THESE CONDITIONS HAD TO BE FULFILLED BY THE ASSESSEE ALL THE 10 YEARS . WHEN ONCE THE BENEFIT OF 10 YEARS, COMMENCING FROM THE INITIA L YEAR, WAS GRANTED, IF THE UNDERTAKING SATISFY ALL THESE CONDITIONS INIT I ALLY , THE UNDERTAKING WAS ENTITLED TO THE BENEFIT OF 10 CONSECUTIVE YEARS . THE ARGUMENT THAT , I N T HE COURSE OF 1 0 Y EARS , I F THE GROWTH OF THE INDUSTRY WAS FAST AND IT ACQUIRES MACHINERY AND THE TOTAL VALUE OF THE MACHINERY EXCE EDS RS. 1 CRORE, IT CEASES TO HAVE THE SAID BENEFIT, DO NOT FOLLOW FROM ANY OF THE PROVISIONS . ITA NOS.83 & 96/PUN/2015 ADVIK HI-TECH PVT. LTD., 10 IT WAS TRUE THAT THERE WAS NO EXPRESS PROVISION IND ICATING EITHER WAY , WHAT WOULD BE THE POSITION IF THE SMALL SCALE INDUS TRY CEASES TO BE A SMALL SCALE INDUSTRY DURING THE SAID PER I OD OF 10 YEARS . BECAUSE OF THAT AMBIGUITY . , A NEED FOR INTERPRETATION ARISES. IF WE KEEP IN M IND THE OBJECT OF THE LEGISLATURE PROVIDING FOR THESE INCENTIVES A ND WHEN A PERIOD OF 10 YEARS WAS PRESCRIBED, THAT WAS THE PERIOD, PROBABLY , WHICH WAS REQUIRED FOR ANY INDUSTRY TO STABILIZE ITSELF . DURING THAT PERIOD THE INDUSTRY NOT ONLY MANUFACTURES PRODUCTS, IT GENERATES EMPLOYMENT AND IT ADDS TO THE WEALTH OF THE COUNTRY. MERELY BECAUSE AN INDUSTRY STABILIZES EARLY, MAKES PROFITS, MAKES FUTURE INVESTMENT IN THE SAID BUSINESS, AND I T GOES OUT OF THE DEFINITION OF THE SMALL SCALE INDUSTRY , THE BENEFIT UNDE R SEC . 80IB CANNOT BE DENIED. IF SUCH A LITERAL INTERPRETATION WAS PLACED ON THE SAID PRO VISION, IT WOULD RUN COUNTER TO THE VERY OBJECT OF GRANTING INCENTIVES. IT WOULD KILL THE INDUSTRY . THEREFORE KEEPING IN MIND THE OBJECT WITH WHICH THE SE PROVISIONS ARE ENACTED, KEEPING IN MIND THE INDUSTRIA L GROWTH WHICH WAS REQUIRED TO BE ACHIEVED, IF TWO INTERPRETATIONS ARE POSSIBLE, THE COURTS HAD TO LEAN I N FAVOUR OF EXTENDING THE BENEFIT OF DEDUCTION TO AN ASSESSEE WHO HAD AVAILED THE OPPORTUNITY GIVEN TO HIM UNDER LAW AND HAS GROWN IN HIS BUSINESS. THEREFORE IT WAS VIEWED THAT IF A SMALL S CALE INDUSTRY, IN THE COURSE OF 10 YEARS, STABILIZES EARLY, MAKES FURTHER INVESTMENTS IN THE BUSINESS AND IT RESULTS IN IT'S GOING OUTSIDE THE P URVIEW OF THE DEFINITION OF A SMALL SCALE INDUSTRY, THAT SHOULD NOT COME IN THE WAY OF ITS CLAIMING BENEFIT UNDER SEC . 80IB FOR 10 CONSECUTIVE YEARS , FROM THE INITIAL ASSESSMENT YEAR . 13. FROM THE ABOVE, IT IS EVIDENT THAT THE HONBLE HIGH COURT CONSIDERED THE ARGUMENT THAT, IN THE COURSE OF 10 YEARS, IF THE GR OWTH OF THE INDUSTRY WAS FAST AND IT ACQUIRES MACHINERY AND TOTAL VALUE OF THE MACHINERY EXCEEDING RS.1 CRORE, IT CEASES TO HAVE THE SAID BE NEFIT, DO NOT FOLLOW FROM ANY OF THE PROVISIONS . THE HONBLE HIGH COURT ALSO OBSERVED THAT THERE ARE NO EXPRESS PROVISIONS INDICATING EITHER WAY, WH AT WOULD BE THE POSITION IF THE SSI CEASES TO BE A SSI DURING THE S AID PERIOD OF 10 YEARS . BECAUSE OF THE AMBIGUITY, THE NEED FOR INTERPRETATI ON ARISES. THE HONBLE HIGH COURT IS OF THE VIEW THAT IF AN SSI IN THE COURSE O F 10 YEARS STABILIZES EARLY, MAKES PROFITS, MAKES FURTHER INVESTMENTS IN THE BUSINESS THE SAID GROWTH SHOULD NOT COME IN THE WAY OF ITS CLAIMING BENEFIT U/S.80IB(3)(II) FOR 10 CONSECUTIVE YEARS FROM THE INITIAL ASSESSMENT YEAR. IN OUR VIEW, THE FACTS OF THE PRESENT CASE ARE IN SINK WITH THAT OF THE FACTS OF THE CASE OF ACE MULTI AXES SYS TEMS LTD. (SUPRA). THIS JUDGMENT BEING DATED 28-07-2014 WAS NOT AVAILABLE TO THE AO OR TO THE TRIBUNAL WHEN THE ITA NOS.83 & 96/PUN/2015 ADVIK HI-TECH PVT. LTD., 11 ASSESSMENT ORDERS FOR A.YRS. 2008-09 AND 2009-10 WE RE FINALIZED. THE SAID JUDGMENT WAS ALSO NOT AVAILABLE TO THE TRIBUNAL WHI CH DECIDED THE APPEAL IN THE CASE OF M/S. SAMRUDDHI INDUSTRIES LTD. ON 31-03-201 1. FURTHER, THE SAID JUDGMENT SINCE DECIDED WITHIN THE SAME WEEK, I.E. 28-07-2014 (ONLY A GAP OF 2 DAYS) BEFORE THE TRIBUNALS ORDER IN THE ASSESSEES OWN CASE WAS PASSED ON 30-07-2014. ALTHOUGH THE SAID JUDGMENT WAS RELIED ON BY THE ASS ESSEE DURING THE APPELLATE PROCEEDINGS (AT PARA NO.9) EXTRACTED ABOVE, THE CIT (A) MERELY IGNORED THE SAID RATIO IN THE CASE OF ACE MULTI AXES SYSTEMS LTD. (S UPRA). CIT(A) DID NOT ADJUDICATE THE FACTS BEFORE DECIDING THE ISSUE AGAINST THE ASS ESSEE. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE RATIO LAID DOWN BY THE HON BLE KARNATAKA HIGH COURT, IN THE ABSENCE OF ANY OTHER CONTRARY JUDGMENTS FROM AN Y OTHER HIGH COURTS, IS BINDING FOR THIS TRIBUNAL FOR THE YEAR UNDER CONSIDERATION. PRINCIPLES OF JUDICIAL DISCIPLINE DEMANDS THAT SUCH JUDGMENT OF HONBLE KARNATAKA HIG H COURT HAS BINDING EFFECT IN SUPERCESSION OF THE EXISTING ORDERS OF THE COORDINA TE BENCH DECISIONS OF THE TRIBUNAL. GROUND NO.1 RAISED BY THE ASSESSEE IS AL LOWED. 14. GROUND NO. 2 RELATES TO THE GAINS EARNED BY THE ASSESSEE ON SALE OF SHARES CONSTITUTES SHORT TERM CAPITAL GAIN OR BUSINESS INC OME. ASSESSEE CLAIMED IT AS CAPITAL GAINS. THE WRITTEN SUBMISSIONS SUBMITTED B Y THE ASSESSEE ARE EXTRACTED AS UNDER : WE ARE CONTINUOUSLY OFFERING INVESTMENT INCOME ARI SING OUT OF 'INVESTMENT HELD AS INVESTMENT' AS A SHORT-TERM CAP ITAL GAIN/LONG TERM CAPITAL GAIN. (AS THE CASE MAY BE). INCOME FROM INVESTMENTS WHICH ARE HELD AS 'INVENTOR Y' IS DULY OFFERED FOR TAX AS BUSINESS INCOME. IN THE PAST ALSO THE LD. AO TREATED CAPITAL GAIN IN COME AS BUSINESS INCOME, CIT(A) UPHELD THE CONTENTION OF THE AO, UPON TO APPEAL TO ITAT, HON. ITAT SET ASIDE THE MATTER FOR FRESH ADJUDICATION. IN SET ASIDE MATTER, THE CIT(A) HAS AGAIN DECIDED T HE ISSUE AGAINST THE ASSESSEE AND WE HAVE FILED 2 ND APPEAL BEFORE HON. ITAT. COPY OF CIT(A) ORDER (2 ND ORDER) IS SUBMITTED DURING THE COURSE OF HEARING. IN VIEW OF THE ABOVE, WE PRAY YOUR HONOR TO DECIDE THE ISSUE ON MERITS. ITA NOS.83 & 96/PUN/2015 ADVIK HI-TECH PVT. LTD., 12 THE BRIEF FACTS OF THE CASE ARE AS UNDER WE HAVE UNDERTAKEN ALL THE ACTIVITY THROUGH DMAT AC COUNT. PHYSICAL DELIVERY OF SHARE WAS TOOK PLACE (EXCEPT IN CASE WHERE THE TRAN SACTION HOLDING PERIOD WAS OF ONLY 1 DAYS). DURING THE YEAR, WE HAVE UNDERTAKEN VERY LESS TRANS ACTIONS. THE DETAILS OF SHARE TRANSACTION CARRIED OUT BY US DURING THE YEAR IS EN CLOSED AS ANNEXURE 1 TO THIS NOTE. PARTICULARS INFORMATION NO . OF TRANSACTIONS (PURCHASES & SALES) 58 AMOUNT INVOLVED (SALES + PURCHASES) 83.67 LAKHS TOTAL INVESTMENT (AS ON 31/03/2010) 324.97 LAKHS TOTAL PURCHASES RS. (MAINLY OF MUTUAL FUND) 1282.60 LAKHS TOTAL SALES - RS. 1198.93 LAKHS INVESTMENT HOLDING PERIOD - MINIMUM - DAYS 1 INVESTMENT HOLDING PERIOD - MAXIMUM- DAYS 879 INVESTMENT HOLDING PERIOD - AVERAGE - DAYS 153 BORROWED MONEY FOR INVESTMENT NIL MANUFACTURING REGULAR BUSINESS AUT OMOBILE PARTS NO. OF PERSONS I NVOLVED IN MANUFACTURING INDUSTRY AVERAGE WHETHER ANY FULL TIME PERSON EMPLOYED FOR THE INVES TMENT ACTIVITIES. NO WHETHER THE INVESTMENT IS SHOWN AS STOCK IN TRADE. NO EARLIER THERE WAS A DRAFT CBDT INSTRUCTION. DT. 16 TH MAY 2006, WE HAVE SUBMITTED BEFORE THE CIT(A) THAT HOW WE FULFILL EACH OF THE C ONDITIONS LAID DOWN IN THE SAID INSTRUCTION. THE SAME IS AS UNDER SITUATION AS PER DRAFT INSTRUCTION WHETHER SATISFIED REMARK PURCHASE AND SALE OF SECURITIES IS USUAL TRADE NO MAIN BUSINESS IS AUTO COMPONENT MANUFACTURING PURCHASE IS MADE SOLELY FOR SALE NO FROM THE PERIOD OF HOLDING THIS CAN BE ESTABLISHED HIGH SCALE OF ACTIVITY IN THE INVESTMENT NO THE CAPITAL EMPLOYED IN MANUFACTURING ACTIVITY IS MUCH HIGHER THAN INVESTMENTS IN SHARES CONTINUITY IN INVESTMENT ACTIVITIES. NO NUMBER OF TRANSACTION PROVES. BORROWED FUNDS NO SUFFICIENT OWN FUNDS. OBJECT OF IN MA AN AA NO MAIN OBJECT RELATES TO MANUFACTURING TYPICAL HOLDING PERIOD VERY SMALL NO THE FIGURES ARE GIVEN IN THE EARLIER TABLE RATIO OF SALES TO PURCHASE IS HIGH NO THE FIGURES ARE GIVEN IN THE EARLIER TABLE HIGH TIME DEVOTED TO THIS ACTIVITY NO THE SCALE OF PRODUCTION ACTIVITY AND INVESTMENT ACTIVITY PROVES THIS TREATMENT IN BOOKS AS STOCK NO BALANCE SHE ET SHOWS THIS AS INVESTMENT WHETHER LISTED SHARES YES NATURALLY AS THE INVESTMENT SHOULD BE SALEABLE ITA NOS.83 & 96/PUN/2015 ADVIK HI-TECH PVT. LTD., 13 INVESTMENT IN SISTER CONCERN NO WHETHER TRANSACTIONS ARE BY PROMOTERS YES THIS IS ONLY BECAUSE IT IS PRIVATE COMPANY HIGH NUMBER OF STOCK DEALT WITH NO THE FIGURES ARE GIVEN IN THE EARLIER TABLE INVESTMENT BY BOOK ENTRY NO NO CONSIDERING ALL THE ABOVE, IT MAY NOT BE OUT OF PLA CE TO STATE THAT THE INVESTMENT ACTIVITY OF ADVIK DOES NOT FALL INTO BUSINESS ACTIV ITY AND THEREFORE INCOME FROM INVESTMENT WHICH ARE HELD AS INVESTMENT MAY PLEASE BE TREATED AS CAPITAL GAIN ONLY. HE RELIED ON FOLLOWING DECISIONS : 1. CIT VS. GOPAL PUROHIT 34 DTR 52 (BOM.) 2. JCIT VS. SHRI CHHATARMAL GOKULCHAND CHHAJER ITA N O.699/PN/12 (PUNE-TRIBUNAL 3. ITO VS. SHREE PANCHAGANGA AGRO IMPEX PVT. LTD. IT A NO.956/PN/09 (PUNE TRIBUNAL) 4. LD. COUNSEL FURTHER ALSO RELYING ON THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SURESH BABULAL SHAH (HUF) 161 ITD 0514 HAS REPRODUCED THE PARA NOS. 9 TO 13 OF THE SAID ORDER. 15. FROM THE ABOVE, IT IS EVIDENT THAT THE ASSESSEE MAINTAINS TWO SEPARATE ACCOUNTS, I.E., INVESTMENT ACCOUNT AND STOCK IN TRA DE. IN THE PAST ALSO, SIMILAR DISPUTE EXISTS AS THE AO TREATED THE SHORT TERM CAP ITAL GAINS INCOME AS THE BUSINESS INCOME OF THE ASSESSEE. 16. ON HEARING BOTH THE PARTIES AND CONSIDERING THE FACTS, WE FIND THAT THE NEED OF HONOURING THE ENTRIES IN THE BOOKS OF ACCOUNT. NO CASE IS MADE OUT FOR DISTURBING THE CLAIM OF THE ASSESSEE. THIS IS THE CASE WHERE ONLY 55 TRANSACTIONS ARE INVOLVED AND SEPARATE ACCOUNT FOR INVESTMENT IS MAINTAINED. THEREFORE, THERE IS A CASE FOR APPLYING THE APEX COURTS JUDGEMENT IN T HE CASE OF GOPAL PUROHIT (SUPRA). THEREFORE, IN OUR VIEW, THE ORDER OF THE CIT(A) IS REQUIRED TO BE REVERSED ON THIS ISSUE AND IN FAVOUR OF THE ASSESSEE. ACCOR DINGLY, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. ITA NOS.83 & 96/PUN/2015 ADVIK HI-TECH PVT. LTD., 14 17. FACTS RELATING TO GROUND NO.3 INCLUDE THAT THE ASSESSEE REPORTED EXEMPT INCOME OF RS.1,37,806/- WHICH FORMED PART OF THE TO TAL INCOME. ASSESSEE, SUO MOTO DISALLOWED AN AMOUNT OF RS.24,508/- U/S.14A OF THE ACT. EVENTUALLY, THE AO APPLYING THE PROVISIONS OF RULE 8D QUANTIFIED THE G ROSS DISALLOWANCE AT RS.2,35,010/-. AO MADE NET DISALLOWANCE OF RS.2,10 ,501/-. AS PER THE ASSESSEE, THIS FIGURE NEEDS TO BE SUBSTITUTED BY RS.2,00,593/ -. CIT(A) CONFIRMED THE SAME. 18. ON THIS ISSUE, LD. COUNSEL FOR THE ASSESSEE IS OF THE OPINION THAT THE DISALLOWANCE SHOULD NOT EXCEED TOTAL EXEMPT INCOME WHICH FORMED PART OF THE TOTAL INCOME ,I.E. RS.1,37,806/- IN THIS CASE. FOR THIS PROPOSITION, HE RELIED ON VARIOUS DECISIONS IN FAVOUR OF THE ASSESSEE. 19. ON HEARING BOTH THE PARTIES, WE ARE OF THE OPIN ION THAT IT IS SETTLED LEGAL PROPOSITION THAT THE DISALLOWANCE U/S.14A READ WITH RULE 8D SHOULD NOT EXCEED THE EXEMPT INCOME. THEREFORE, WE DIRECT THE AO TO REST RICT THE DISALLOWANCE TO THE EXEMPT INCOME OF RS.1,37,806/- AFTER NETTING THE SUO MOTO DISALLOWANCE OF RS.24,508/- DISCUSSED ABOVE. WITH THESE DIRECTIONS , GROUND NO.3 RAISED BY THE ASSESSEE IS PARTLY ALLOWED. 20. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO.96/PUN/2015 BY REVENUE : 21. GROUNDS RAISED BY THE REVENUE ARE AS UNDER : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD.CIT(A) WAS JUSTIFIED TO INTERPRET THE OPERATION OF SECTION 80IA(5) ONLY FROM THE YEAR OF FIRST CLAIM OF DEDUCTION U/S.80IA(1) EVEN W HEN THE ELIGIBLE BUSINESS HAD COMMENCED IN EARLIER YEARS. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) WAS CORRECT TO TREAT THE JUDGMENT OF NON- JURISDICTIONAL HIGH COURT AS THE BINDING PRECEDENT THAT MUST BE FOLLOWED IN DISREGAR D TO THE PRINCIPLE LAID DOWN ON THIS ISSUE BY THE DIVISION BENCH OF THE HONBLE BOM BAY HIGH COURT IN THE CASE OF CIT VS. THANA ELECTRICITY SUPPLY LTD. REPORTED IN 2 06 ITR 727? 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) WAS JUSTIFIED ALLOWING DEDUCTION U/S.80IA (4) BY CONSIDERING THE INITIAL ASSESSMENT YEAR FOR THE PURPOSE OF CLAIMING DEDUCTI ON U/S.80IA(4) OF THE ACT, WAS ITA NOS.83 & 96/PUN/2015 ADVIK HI-TECH PVT. LTD., 15 THE FIRST YEAR IN WHICH THE ASSESSEE MADE SUCH CLAI M AFTER EXERCISING THE OPTION, FOR IGNORING THE OPERATION OF SEC.80IA(5) OF THE I.T. A CT, 1961 AND PROVISIONS OF SECTION 80IA(2) ACCORDING TO WHICH THE FIRST YEAR WAS THE Y EAR IN WHICH THE ASSESSEE STARTED GENERATING ELECTRICITY? 22. BRIEFLY STATED RELEVANT FACTS ARE THAT THE ASSE SSEE HAS ONE WINDMILL UNIT, I.E. ELIGIBLE AND INELIGIBLE UNITS AND CLAIM EXEMPT INCO ME U/S.80IA(4) OF THE ACT AMOUNTING TO RS.92,81,877/-. AO IGNORED THE DECISI ON OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF POONAWALA FINVEST AGRO PVT. LTD. REPORTED IN 118 TTJ 68 AND HELD THE INITIAL ASSESSMENT YEAR IN THE ASSESSE ES OWN CASE IS THE ONE IN THE POWER GENERATION COMMENCED IN THE YEAR IN WHICH ASS ESSEE CHOSE TO MAKE CLAIM FOR DEDUCTION FOR THE FIRST TIME. AS PER THE AO, T HERE IS NO OPTION GIVEN TO THE ASSESSEE TO CHOOSE THE INITIAL ASSESSMENT YEAR. HO WEVER, IN THE FIRST APPELLATE PROCEEDINGS THE CIT(A) RELIED ON HIS OWN ORDER FOR THE A.Y. 2008-09 AND ALLOWED THE APPEAL OF THE ASSESSEE ON THIS ISSUE. IN THE P ROCESS, THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF VELAYUDHASWAMY SPI NNING MILLS P. LTD. V. ACIT REPORTED IN 38 DTR 57 WAS RELIED UPON. IN THIS YEA R ALSO, THE CIT(A) ALLOWED THIS GROUND IN FAVOUR OF THE ASSESSEE. THEREFORE, THE R EVENUE IS IN APPEAL BEFORE US. 23. BRINGING OUR ATTENTION TO THE TRIBUNALS ORDER IN THE ASSESSEES OWN CASE FOR THE A.YRS. 2008-09 AND 2009-10 (ITA NOS. 1743 AND 1744/PUN/2012, ITA NOS.1706 & 2041/PUN/2012 ORDER DATED 30-07-2014 HE DREW OUR ATTENTION TO PARA NOS. 9 TO 9.3 WHERE THE ISSUE WAS DISCUSSED AND DEC IDED IN FAVOUR OF THE ASSESSEE. 24. WE HEARD BOTH THE SIDES. WE FIND THE ISSUE UND ER CONSIDERATION WAS THE SUBJECT MATTER BEFORE THE TRIBUNAL IN THE ASSESSEE S OWN CASE FOR THE A.YRS. 2008- 09 AND 2009-10 (SUPRA). THE RELEVANT OPERATIONAL P ARAGRAPHS ARE EXTRACTED AS UNDER FOR THE SAKE OF COMPLETENESS : 9. THE ASSESSING OFFICER HAD DISALLOWED THE CLAIM OF DEDUCTION U/S.80IA(4)(IV)(A) OF THE I.T. ACT AMOUNTING TO RS. 43,93,235/-. THE ASSESSING OFFICER ALSO TREATED SANGLI AND DHULE UNITS AS SING LE ONE HAVING SAME ELIGIBLE BUSINESS. THE CLAIM WAS MADE IN RESPECT OF WIND M ILL LOCATED AT SANGLI. THE ISSUE ITA NOS.83 & 96/PUN/2015 ADVIK HI-TECH PVT. LTD., 16 PERTAINS TO LOSSES OF THE UNDERTAKING BEFORE THE IN ITIAL YEAR ALREADY ADJUSTED AGAINST OTHER INCOME. DURING THE COURSE OF THE ASSESSMENT P ROCEEDINGS, THE ASSESSEE RELIED UPON VARIOUS DECISIONS INCLUDING PUNE TRIBUNAL'S DE CISION IN THE CASE OF POONAWALA FINVEST & AGRO (P) LTD. VS. ASST. COMMISSIONER OF I NCOME-TAX REPORTED IN (2008) 118 TTJ (PUNE) 68. THE ASSESSING OFFICER HOWEVER RELYING UPON SPECIAL BENCH DECISION OF AHMEDABAD TRIBUNAL REPORTED IN THE CASE OF ACIT VS. GOLDMINE SHARES & FINANCE (P) LTD. REPORTED IN 116 TTJ (AHMEDABAD) 705, DISALLOWED THE CLAIM OF THE ASSESSEE. WHILE DOING SO, THE ASSESSING OFFICE R ALSO HELD THAT INITIAL ASSESSMENT YEAR HAS TO BE CONSIDERED AS THE YEAR IN WHICH POWE R GENERATION COMMENCES AND NOT THE YEAR IN WHICH IT CHOOSES TO MAKE CLAIM FOR DEDUCTION FOR THE FIRST TIME. THE ASSESSING OFFICER HELD THAT IN THE CURRENT SECTION 80IA(5), THERE IS NO OPTION GIVEN TO THE ASSESSEE TO CHOOSE INITIAL ASSESSMENT YEAR. 9.1 THE MATTER WAS CARRIED BEFORE FIRST APPELLATE A UTHORITY, WHEREIN THE VARIOUS FACTUAL AND LEGAL CONTENTIONS WERE RAISED ON BEHALF OF ASSESSEE AND HAVING CONSIDERED THE SAME, THE CIT(A) HAD ALLOWED THE CLA IM OF THE ASSESSEE ON BOTH ACCOUNTS. THE SAME HAS BEEN OPPOSED BEFORE US ON B EHALF OF REVENUE, INTER ALIA, SUBMITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN HOLD ING THAT FOR THE PURPOSE OF SECTION 80IA THE YEAR IN WHICH THE ASSESSEE CHOOSES TO CLAIM DEDUCTION HAS TO BE TREATED AS INITIAL ASSESSMENT YEAR. THE CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT PROFIT OF THE ELIGIBLE BUSINESS HAS TO BE COMPUTED WITHOUT DEDUCTING THEREFROM BROUGHT FORWARD LOSSES OR UNABSORBED DEPRECIATION P RIOR TO THE INITIAL YEAR OF CLAIM DE HORS THE PROVISION U/S. 80IA(5) OF THE ACT. THE CIT(A) ERRED IN IGNORING THAT THE ASSESSEE WAS IN POWER GENERATION BUSINESS AND HOLDI NG THAT EACH WINDMILL HAS TO BE TAKEN AS INDEPENDENT ELIGIBLE BUSINESS. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN HOLDING THAT EACH WINDMIL L UNIT HAS TO BE TREATED ON STANDALONE BASIS DE HORS THE SPECIFIC STIPULATION I N SECTION 80IA(5) OF THE ACT THAT 'PROFIT AND GAINS OF ELIGIBLE BUSINESS' BEING POWER GENERATION BUSINESS HAVE TO BE TAKEN. ACCORDINGLY, THE ORDER OF CIT(A) BE SET ASI DE AND THAT OF ASSESSING OFFICER BE RESTORED. ON THE OTHER HAND, THE LEARNED AUTHOR IZED REPRESENTATIVE HAS SUPPORTED THE ORDER OF CIT(A) ON THE ISSUE. 9.2 AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND MATERIAL ON RECORD, WE FIND THAT AS PER SEC. 80IA(2) OF THE IT. ACT, THE A SSESSEE HAS OPTION TO EXERCISE THE CHOOSING OF INITIAL ASSESSMENT YEAR OUT OF FIFTEEN YEARS BEGINNING WITH THE YEAR IN WHICH THE UNDERTAKING STARTS PRODUCTION. THE ASSES SING OFFICER WAS NOT CORRECT IN ASSERTING THAT THERE WAS NO OPTION TO THE ASSESSING OFFICER TO EXERCISE OPTION IN CHOOSING THE INITIAL ASSESSMENT YEAR. AS REGARDS TH E ISSUE OF LOSSES AND UNABSORBED DEPRECATION OF THE UNDERTAKING ALREADY ADJUSTED AGA INST THE OTHER INCOME IT WAS FOUND THAT THE SAME IS COVERED BY THE DECISION OF P UNE TRIBUNAL IN CASE OF POONAWALA FINVEST (SUPRA) IN FAVOUR OF THE ASSESSEE . THE ASSESSING OFFICER HAS RELIED UPON SPECIAL BENCH DECISION OF AHMEDABAD TRI BUNAL IN THE CASE OF ACIT VS. GOLDMINE SHARES & FINANCE (P) LTD. REPORTED IN 116 TTJ (AHMEDABAD) 705. HOWEVER, THE SAME COULD NOT BE FOLLOWED IN VIEW OF THE HON'BLE MADRAS HIGH COURT JUDGMENT IN CASE OF VELAYUDHASWAMY SPINNING MILLS ( P) LTD. VS. ACIT REPORTED IN 38 DTR 57. ITAT, BANGALORE BENCH IN THE CASE OF AN IL H LAD VS. DCIT DID NOT FOLLOW THE SPECIAL BENCH DECISION OF THE AHMEDABAD BENCH TRIBUNAL IN VIEW OF ABOVE JUDGMENT OF MADRAS HIGH COURT. RELEVANT PORT ION OF THE ORDER IS REPRODUCED FOR THE SAKE OF CLARITY: 'FROM READING OF THE ABOVE, IT IS CLEAR THAT THE EL IGIBLE BUSINESS WERE THE ONLY SOURCE OF INCOME, DURING THE PREVIOUS YEAR REL EVANT TO INITIAL ASSESSMENT YEAR AND EVERY SUBSEQUENT ASSESSMENT YEA RS. WHEN THE ASSESSEE EXERCISE OPTION, THE ONLY LOSSES OF THE YE ARS BEGINNING FROM INITIAL A.Y. ALONE ARE TO BE BROUGHT FORWARD AND NO LOSSES O F EARLIER YEARS WHICH WERE ALREADY SET OFF AGAINST THE INCOME OF THE ASSE SSEE. LOOKING FORWARD TO A PERIOD OF TEN YEARS FROM THE INITIAL ASSESSMENT I S CONTEMPLATED. IT DOES NOT ALLOW THE REVENUE TO LOOK BACKWARD AND FIND OUT IF THERE IS ANY LOSS OF ITA NOS.83 & 96/PUN/2015 ADVIK HI-TECH PVT. LTD., 17 EARLIER YEARS AND BRING FORWARD NOTIONALLY EVEN THO UGH THE SAME WERE SET OFF AGAINST OTHER INCOME OF THE ASSESSEE AND THE SET OF F AGAINST THE CURRENT INCOME OF THE ELIGIBLE BUSINESS. ONCE THE SET OFF I S TAKEN PLACE IN EARLIER YEAR AGAINST THE OTHER INCOME OF THE ASSESSEE, THE REVEN UE CANNOT REWORK THE SET OFF AMOUNT AND BRING IT NOTIONALLY. FICTION IS CREATED ONLY FOR THE LIMITED PURPOSE AND THE SAME CANNOT BE EXTENDED BEYOND THE PURPOSE FOR WHICH IT IS CREATED.' 27. THUS, THE HON'BLE MADRAS HIGH COURT HAS CLEARLY HELD THAT WHERE THE DEPRECIATION AND LOSS OF EARLIER ASSESSMENT YEARS H AVE ALREADY BEEN SET OFF AGAINST OTHER BUSINESS INCOME OF THOSE ASSESSMENT Y EARS, THERE IS NO NEED FOR NOTIONALLY CARRYING FORWARD AND SETTING OFF OF THE SAME DEPRECIATION AND LOSS IN COMPUTING THE QUANTUM OF DEDUCTION AVAILABL E U/S.80I. THE HON'BLE COURT HAS HELD FURTHER THAT THE YEAR OF COMMENCEMEN T ALONE NEED NOT BE THE 'INITIAL YEAR', BUT DEPENDING UPON THE FACTS OF THE CASE AND THE OPTION EXERCISED BY THE ASSESSEE, THE YEAR OF CLAIM ALSO C AN BE CONSIDERED AS 'INITIAL ASSESSMENT YEAR'. THE COURT HAS ALSO EXAMI NED THE ISSUE FROM A DIFFERENT LEGAL ANGLE AND HELD THAT THE PROPOSITION ARGUED BY THE REVENUE IS NOT COMPATIBLE WITH THE SCHEME OF GROSS TOTAL INCOM E CONCEPTUALIZED IN THE IT ACT ESPECIALLY IN THE LIGHT OF SECTION 80AB WHIC H ARE ALL RELEVANT WHILE CONSIDERING THE DEDUCTION U/S.80IA WHICH IS FALLING UNDER CHAPTER VIA OF THE I.T. ACT, 1961. WHERE THE EARLIER DEPRECIATION AND LOSSES HAVE ALREADY BEEN SET OFF, THOSE LOSS AND DEPRECIATION DO NOT GO TO R EDUCE THE GROSS TOTAL INCOME OF AN ASSESSEE WITHIN THE MEANING OF SEC.80A B AND THEREFORE, BRINGING THE NOTIONAL CONCEPT OF CARRYING FORWARD A ND SET OFF WILL BE CONTRARY TO THE SCHEME OF SEC.80AB AND CONCEPT OF GROSS TOTA L INCOME. 28. NOW, IT IS CLEAR AS WE FIND THAT THIS ISSUE IS SQUARELY COVERED BY THE ABOVE DISCUSSED JUDGEMENT OF THE HON'BLE MADRAS HIG H COURT IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS P. LTD. VS. ACIT (38 DTR 57). WHERE SUCH AN OVERRIDING JUDGEMENT OF THE CONSTITUTIONAL COURT IS GOVERNING THE ISSUE, WE ARE NOT PERMITTED TO RELY ON THE DECISION OF THE SPECIAL BENCH OF THE AHMEDABAD TRIBUNAL. 29. THEREFORE, FOLLOWING THE ABOVE JUDGEMENT OF THE HON'BLE HIGH COURT OF MADRAS, WE ACCEPT THE CONTENTION OF THE ASSESSEE AN D REVERSE THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A) ON THIS POINT AN DIRECT THE ASSESSING AUTHORITY TO GRANT DEDUCTION TO THE ASSESSEE U/S.80 IA FOR THE QUANTUM CLAIMED BY THE ASSESSEE WITHOUT DILUTING THE SAME B Y THE NOTIONAL DEDUCTION OF EARLIER LOSS AND DEPRECIATION'. 9.3 IN VIEW OF ABOVE, THE CIT(A) WAS JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE DEDUCTION U/S.80IA(4)(IV)(A) O F THE ACT WITHOUT DEDUCTING BROUGHT FORWARD LOSS OR UNABSORBED DEPRECIATION PRI OR TO INITIAL YEAR ON NOTIONAL BASIS. THIS REASONED FACTUAL AND LEGAL FINDING OF CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 25. FROM THE ABOVE, IT IS EVIDENT THAT THE TRIBUNAL HAS TAKEN A VIEW ON THIS ISSUE AND DECIDED IN FAVOUR OF THE ASSESSEE FOLLOWING VAR IOUS DECISIONS DISCUSSED IN PARA 9.2 ABOVE. CONSIDERING THE SAME AND IN THE ABSENCE OF ANY SUSTAINABLE DECISIONS IN FAOVUR OF THE REVENUE, WE ARE OF THE OPINION THA T THE ORDER OF THE CIT(A) IS FAIR ITA NOS.83 & 96/PUN/2015 ADVIK HI-TECH PVT. LTD., 18 AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFE RENCE. ALL THE 3 GROUNDS RAISED BY THE REVENUE ARE ACCORDINGLY DISMISSED. 26. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. 27. TO SUM UP, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF SEPTEMBER, 2017. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 22 ND SEPTEMBER, 2017. / COPY OF THE ORDER FORWARDED TO : BY ORDER // TRUE COPY // //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE THE APPELLANT THE RESPONDENT THE CIT(A) - V , PUNE CIT - V , PUNE , , A BENCH PUNE; / GUARD FILE.