M/S. CADBURY INDIA LTD., Mumbai V. THE ACIT RG.5(1), Mumbai

ITA 8486/MUM/2004

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48783 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 28-12-2010
• Assessment Year: 1999-2000
• Appeal Filed On: 25-11-2004
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KHUSUM IN GLE
• Keywords: Business income; Depreciation; Opportunity of being heard; Bad and doubtful debts
• Section: 143(3); 244A; 80HHC; 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, B, MUMBAI BEFORE S/SHRI D.K.AGARWAL (JM) AND T.R.SOOD(A.M ) ITA NO. 8486 AND 8487/MUM/2004 (ASSESSMENT YEARS: 1999-2000 AND 2000-2001) CADBURY INDIA LIMITED, 19, BHULABHAI DESAI ROAD, MUMBAI-400026. PAN: AAACC0460H ASSISTANT COMMISSIONER OF INCOME TAX, RANGE 5(1), AAYAKAR BHAVAN M K ROAD, MUMBAI-400020. APPELLANT V/S RESPONDENT APPELLANT BY : SHRI J P B AIRAGRA RESPONDENT BY : SMT.KHUSUM IN GLE. O R D E R PER D.K.AGARWAL (JM) THESE TWO APPEALS PREFERRED BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDERS BOTH DATED 1.0 9.2004 PASSED BY THE LEARNED CIT(A)-V, MUMBAI FOR THE ASSE SSMENT YEARS 1999-2000 AND 2000-01. SINCE FACTS ARE IDENT ICAL AND ISSUES INVOLVED ARE COMMON, BOTH THESE APPEALS ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 8486/MUM/2004 (AY 1999-00) 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE A SSESSEE- COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF CHOCOLATES, BOURNVITA AND OTHER SUCH PRODUCTS. IT FILED RETURN ITA NO. 8486 AND 8487/MUM/2004 (AYS: 1999-2000 AND 2000-2001) 2 DECLARING TOTAL IN COME AT RS.33,65,75,480/- WHICH WAS REVISED AT AN INCOME OF RS.33,61,43,791/- ON ACCOU NT OF CLAIM OF DEPRECIATION AND DEDUCTION U/S 80HHC. HOW EVER, ASSESSMENT WAS COMPLETED AT AN INCOME OF RS.35,47,26,291/- VIDE ORDER DATED 14.03.2002 PASS ED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961, IN SHOR T THE ACT. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX ( A) PARTLY ALLOWED THE APPEAL. 3. BEING AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (A), THE ASSESSEE IS IN APPEAL BEFORE US. 4. GROUND NO.1 IS AGAINST THE SUSTENANCE OF DISALL OWANCE OF EXPENDITURE OF RURAL DEVELOPMENT RS.1,09,270/ -. 5. IT WAS DISALLOWED BY THE AO ON THE GROUND THAT THE EXPENDITURE HAS NO NEXUS WITH THE BUSINESS CARRIED OUT BY THE ASSESSEE. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX (A) WHILE OBSERVING THAT THIS IS AN OLD ISSUE AND WAS DECIDED AGAINST THE ASSESSEE BY THE TRIBUNAL I N ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1989-9 0 VIDE ORDER DATED 18.10.2001, UPHELD THE DISALLOWANCE MAD E BY THE AO. ITA NO. 8486 AND 8487/MUM/2004 (AYS: 1999-2000 AND 2000-2001) 3 6. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT SINCE THE TRIBUNAL HAS DEC IDED THE ISSUE AGAINST THE ASSESSEE AND IN FAVOUR OF THE REV ENUE, THEREFORE THE ISSUE MAY BE DECIDED ACCORDINGLY. 7. ON THE OTHER HAND, THE LEARNED DR SUPPORTS THE O RDER OF THE AO AND LEARNED COMMISSIONER OF INCOME TAX (A ). 8. HAVING CAREFULLY HEARD SUBMISSIONS OF THE RIVAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THERE IS NO DISPUTE THAT THE IMPUGNED ISSUE HAS BEE N DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE AGAINST T HE ASSESSEE AND IN FAVOUR OF THE REVENUE IN CADBURY INDIA LIMITED V/S JCIT IN ITA NO.1669/MUM/2001(AY 1992-9 3), ITA NO.45/MUM/2003 (AY-1992-93), ITA NO.5692/MUM/2000(AY 1993-94), ITA NO.60/MUM/2003(AY - 1993-94), ITA NO.4866/MUM/2000(AY 1994-95) ITA NO.282/MUM/2000 (AY 1994-95) AND ITA NO.4677/MUM/20 00 (AY-1994-95) ORDER DATED 30.6.2010 WHEREIN THE TRIB UNAL IN PARAGRAPH 8 OF THE ORDER FOLLOWING THE EARLIER ORDE R OF THE TRIBUNAL FOR THE ASSESSMENT YEARS 1990-91 TO 1993- 94 UPHELD THE DISALLOWANCE MADE BY THE AO. RESPECTF ULLY FOLLOWING THE CONSISTENT VIEW OF THE TRIBUNAL WE D ECLINE TO INTERFERE WITH THE ORDER PASSED BY THE LEARNED COMM ISSIONER OF INCOME TAX (A) IN CONFIRMING THE DISALLOWANCE M ADE BY ITA NO. 8486 AND 8487/MUM/2004 (AYS: 1999-2000 AND 2000-2001) 4 THE AO. THE GROUND NO.1 TAKEN BY THE ASSESSEE IS TH EREFORE REJECTED. 9. GROUND NO.2 IS AGAINST THE SUSTENANCE OF DISALLOWANCE OF PROVISIONS FOR CONTRACTUAL LIABILI TY TOWARDS THE THIRD PARTY CONVERTERS. 10. IT WAS CLAIMED BY THE ASSESSEE THAT THE AMOUNT OF RS.1,78,035/- RELATES TO LIABILITY RETAINED IN T HE BOOKS OF ACCOUNT IN RESPECT OF CONTRACTUAL OBLIGATION TO THE THIRD PARTY MANUFACTURERS/CONVERTERS. HOWEVER, THE AO DISALLO WED THE SAME ON THE GROUND THAT THE SAID LIABILITY IS IN TH E NATURE OF CONTINGENT LIABILITY AND HENCE NO DEDUCTION IS A LLOWABLE. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX (A) FOLLOWING THE APPELLATE ORDER FOR THE ASSESSMENT YE ARS 1992- 93, 1993-94, 1994-95 AND 1996-97 TO 1998-99 CONFI RMED THE DISALLOWANCE MADE BY THE AO. 11. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT THE TRIBUNAL IN ASSESSEES OW N CASE HAS DECIDED THE ISSUE AGAINST THE ASSESSEE AND IN F AVOUR OF THE REVENUE, THEREFORE, THE ISSUE MAY BE DECIDED ACCORDINGLY. ITA NO. 8486 AND 8487/MUM/2004 (AYS: 1999-2000 AND 2000-2001) 5 12. ON THE OTHER HAND, THE LEARNED DR SUPPORTS THE ORDER OF THE AO, LEARNED COMMISSIONER OF INCOME TAX (A) FOR THE ASSESSMENT YEARS 1992-93 TO 1994-95 AND 1996-97 TO 1998- 99. 13. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE R IVAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RE CORD, WE FIND THAT THE TRIBUNAL IN ASSESSEES OWN CASE HAS DISCUSSED THE SIMILAR ISSUE AT LENGTH AND HELD VIDE PARAGRAP H 49 OF ITS ORDER DATED 30.6.2010 (SUPRA) THAT THE SAID LIABILI TY WAS A CONTINGENT LIABILITY AND IT WAS NOT DEDUCTIBLE WHIL E COMPUTING THE INCOME OF THE ASSESSEE AND ACCORDINGLY CONFIRM ED THE DISALLOWANCE MADE BY THE AO. RESPECTFULLY FOLLOWIN G THE SAID ORDER OF THE TRIBUNAL (SUPRA) WE ARE INCLINE D TO UPHOLD THE ORDER PASSED BY THE LEARNED COMMISSIONER OF IN COME TAX (A) IN CONFIRMING THE DISALLOWANCE MADE BY THE AO. THE GROUND TAKEN BY THE ASSESSEE IS THEREFORE, REJECTED . 14. GROUND NO.3 IS AGAINST SUSTENANCE OF DISALLOWA NCE OF BAD DEBTS OF RS.5,33,452/-. 15. THE AO OBSERVED THAT THE ASSESSEE HAS MADE CLA IM OF DOUBTFUL BAD DEBTS AMOUNTING TO RS.5,33,452/-. TH E ASSESSEE WAS ASKED TO FURNISH THE DETAILS. HOWEVE R, THE ASSESSEE NEITHER PRODUCED THE DETAILS NOR FILED DO CUMENTARY ITA NO. 8486 AND 8487/MUM/2004 (AYS: 1999-2000 AND 2000-2001) 6 EVIDENCE TO SHOW THAT THE DEBTS BECOME BAD INCLUD ING THE CORRESPONDENCE MADE FOR RECOVERY OF DEBTS. IN TH E ABSENCE THEREOF, THE AO MADE A DISALLOWANCE OF BAD DEBTS O F RS.5,33,452/-. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX (A), IN THE ABSENCE OF ANY SUPPORTING MATERIAL UPHELD THE DISALLOWANCE MADE BY THE AO. 16. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT THE TRIBUNAL IN THE ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 1998-99 IN ITA NO.3450/MUM/2004 DATED 8.10.2010 FOLLOWING THE DECI SION OF THE HON. SUPREME COURT IN THE CASE OF T.R.F.LTD V/ S CIT REPORTED IN (2010) 323 ITR 397 (SC) DELETED THE DISALLOWANCE OF BAD DEBTS MADE BY THE AO, THEREFOR E FOLLOWING THE SAME THE DISALLOWANCE MADE BY THE AO AND SUSTAINED BY THE LEARNED COMMISSIONER OF INCOME TA X (A) BE DELETED. HE ALSO PLACED ON RECORD A COPY OF T HE ORDER OF THE TRIBUNAL. 17. ON THE OTHER HAND, THE LEARNED DR SUPPORTS THE ORDER OF THE AO AND LEARNED COMMISSIONER OF INCOME TAX (A). 18. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE O N RECORD. WE FIND THAT THERE IS NO DISPUTE THAT THE ASSESSEE HAS NOT ITA NO. 8486 AND 8487/MUM/2004 (AYS: 1999-2000 AND 2000-2001) 7 FURNISHED THE DETAILS OF DOUBTFUL BAD DEBTS EITHER BEFORE THE AO OR BEFORE THE LEARNED COMMISSIONER OF INCOME TA X (A). IN THE CASE OF T.R.F.LTD V/S CIT (SUPRA), THE HON.S UPREME COURT HELD AS UNDER (HEADNOTES) : AFTER AMENDMENT OF SECTION 36(1)(VII) OF THE INCOM E TAX ACT, WITH EFFECT FROM APRIL, 1989, IN ORDER TO OBTA IN A DEDUCTION IN RELATION TO BAD DEBTS, IT IS NOT NECE SSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DEBTS, IN FA CT, HAS BECOME IRRECOVERABLE: IT IS ENOUGH IF THE BAD DEBT IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNT OF THE ASSESSEE THE SUPREME COURT ACCORDINGLY REMANDED THE MATTER T O THE AO TO EXAMINE, SOLELY TO THE EXTENT OF WRITE O FF, WHETHER THE DEBT OR PART THEREOF WAS WRITTEN OFF I N THE ACCOUNTS OF THE ASSESSEE. SINCE IN THE PRESENT CASE, THE AO, IN ABSENCE OF A NY RELEVANT DETAILS, HAS NOT EXAMINED THE ISSUE, THE REFORE, WE RESPECTFULLY FOLLOWING THE DECISION OF THE HON. SU PREME COURT (SUPRA) CONSIDER IT FAIR AND REASONABLE THA T THE MATTER SHOULD GO BACK TO THE FILE OF THE AO AND ACCORDINGL Y, WE SET ASIDE THE ORDERS PASSED BY THE REVENUE AUTHORITIES ON THIS ACCOUNT AND SEND BACK THE MATTER TO THE FILE OF TH E AO TO EXAMINE THE SAME AFRESH IN THE LIGHT OF THE DECISI ON OF THE HONBLE SUPREME COURT (SUPRA) AND ACCORDING TO LAW AFTER PROVIDING THE REASONABLE OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE. THE GROUND TAKEN BY THE ASSESSEE IS THER EFORE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 8486 AND 8487/MUM/2004 (AYS: 1999-2000 AND 2000-2001) 8 19. GROUND NO.4 IS AGAINST SUSTENANCE OF ADDITION OF UNRECORDED SALES AMOUNTING TO RS.41,50,000/-. 20. BRIEF FACTS OF THE ISSUE ARE THAT THE SURVEY U/ S 133A WAS UNDERTAKEN AGAINST THE ONE OF THE SISTER CONCE RN SUBSIDIARY COMPANY OF THE ASSESSEE COMPANY VIZ. IND URY FARM LIMITED, WHICH WAS ENGAGED IN PURCHASE OF MILK FROM OUTSIDE PARTIES AND WAS SELLING IT MAINLY TO THE AS SESSEE COMPANY. FROM THE VERIFICATION OF THE RECORDS OF THE ASSESSEE COMPANY AT INDURY, IT WAS FOUND THAT THE PRODUCTION LOG SHEET OF FAT MAINTAINED AT THE FACTO RY COMPARED WITH THE FIGURES SHOWN IN THE BOOKS OF ACCOUNTS/EXCISE REGISTER SHOWED A DIFFERENCE OF 52,826 KGS. THE ASSESSEE WAS ASKED TO EXPLAIN THESE DISCR EPANCIES IN RESPONSE TO WHICH IT WAS SUBMITTED THAT THE QUAN TITY AS PER PRODUCTION LOG SHEET WAS NOT CORRECT AND THAT THE A CTUAL RECORDING WAS MADE IN FINISHED STOCK TRANSFER NO TE, WHICH WAS MATCHING WITH THE EXCISE RECORDS. FURTHER IT WA S ALSO SUBMITTED THAT MILK FAT SOLD BY TRANSFER THROUGH TH E STORAGE TANK WAS MENTIONED IN FINISHED STOCK TRANSFER NOT E AND NOT IN PRODUCTION LOG SHEET. HOWEVER, IT WAS NOTICE D THAT THE FINISHED STOCK TRANSFER NOTE FIGURES WERE NOT AV AILABLE FOR THE ENTIRE YEAR AND THAT THE QUANTITIES MENTIONED I N THE EXCISE REGISTERS HAD ALSO DIFFERENCE WITH REFERENCE TO LOG SHEET ON DAILY BASIS AND THERE WERE NOTING SOMETIME S AFTER A ITA NO. 8486 AND 8487/MUM/2004 (AYS: 1999-2000 AND 2000-2001) 9 GAP OF 3-4 DAYS. THUS CONSIDERING THIS DISCREPANCI ES THE AO CALCULATED THE AMOUNT OF FAT AND EXCESS PRODUCT ION MENTIONED ABOVE AS RESULTING INTO EXCESS SALES AND ON THE BASIS OF SUCH CALCULATION THE AO ESTIMATED THE SUPP RESSED SALES RECEIPTS AT RS.43,84,558/- IN AY 1998-99 AND IN VIEW OF THE FACTS THAT THE ENTIRE PURCHASE BEING ALLOWED AS EXPENSES THE ENTIRE AMOUNT WAS ADDED TO THE INCOME OF THE ASSESSEE. ON SIMILAR WORKING ADDITION OF RS.41,50,0 00/- HAS BEEN MADE DURING THE YEAR ALSO. ON APPEAL, THE L EARNED COMMISSIONER OF INCOME TAX (A) FOLLOWING THE APPELL ATE ORDER FOR THE ASSESSMENT YEAR 1998-99 DATED 27.2.20 04 FOR THE SAME REASONS CONFIRMED THE DISALLOWANCE MADE BY THE AO. 21. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT THE TRIBUNAL IN ASSESSEES O WN CASE IN ITA NO.3450/MUM/2004 FOR THE ASSESSMENT YEAR 199 8-99 VIDE ORDER DATED 8.10.2010 HAS DELETED THE ADDITION MADE BY THE AO. THEREFORE, FOLLOWING THE SAME, THE ADDITI ON MADE BY THE AO AND SUSTAINED BY THE LEARNED COMMISSION ER OF INCOME TAX (A) BE DELETED 22. ON THE OTHER HAND, THE LEARNED DR SUPPORTS THE ORDER OF THE AO AND THE LEARNED COMMISSIONER OF INCOME TAX (A). ITA NO. 8486 AND 8487/MUM/2004 (AYS: 1999-2000 AND 2000-2001) 10 23. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. WE FIND THAT THERE IS NO DISPUTE THAT ON THE SIMILAR FACTS, THE AO HAS MADE THE ADDITION FOR THE ASSESSMENT YEAR 1998 -99. WE FURTHER FIND THAT THE TRIBUNAL AFTER CONSIDERING ALL THE MATERIAL FACTS HAS DELETED THE ADDITION OF RS.43,8 4,558/- VIDE FINDING RECORDED IN PARAGRAPHS 71 AND 72 OF T HE ORDER DATED 8.10.2010 WHICH ARE REPRODUCED AS UNDER : 71. WE FIND FORCE IN THE ARGUMENTS OF THE LD. COUNSEL. ADMITTEDLY, NOTHING IS FOUND DURING THE CO URSE OF SURVEY TO SHOW THAT THE ASSESSEE HAS MADE A SALE OUT OF THE BOOKS OF ACCOUNT. THE MILK FAT IS SUBJECT MA TTER OF EXCISE REGULATIONS AND ASSESSEE IS SHOWING THE SAME TO THE EXCISE AUTHORITIES AND THE SAID RECORD. I.E. EX CISE REGISTER ETC SUPPORTS THE CASE OF THE ASSESSEE THAT WHATEVER THE PRODUCTION OF THE MILK FAT IS SHOWN IS CORRECT. MOREOVER, AS PER THE STATEMENT FILED BY TH E ASSESSEE, THE ASSESSEE HAS GIVEN THE DETAILED BREAK -UP OF THE CANS. THERE IS ALSO SOME FORCE IN THE ARGUME NT OF LD. COUNSEL THAT THE WEIGHT OF EACH AND EVERY FILED -IN CAN IS NOT TAKEN. THERE IS SOME VARIATION AND IT CA NNOT BE PRESUMED THAT IN EACH AND EVERY CAN THE WEIGHT O F THE MILK FAT IS 50 KGS. EVEN PRESUMING THAT EACH A ND EVERY CAN IS HAVING THE MILK FAT OF 50 KGS. THEN O N THE BASIS OF THE PRODUCTION LOG-SHEET, THE TOTAL FAT PR ODUCED DURING THE YEAR COME TO 4,17,476 KGS. ONLY AND WH ILE AS PER THE EXCISE REGISTER THE TOTAL MILK FAT PRODU CTION IS DECLARED AT 4,70,674 KGS. IN OUR OPINION, PRODUCTIO N LOG- SHEET (PLS) WHICH WAS FOUND DURING THE COURSE OF SU RVEY ACTION CANNOT BE SAID TO BE CONCLUSIVE AS EVEN AS PER THE AO IT IS NORMALLY 50KGS. IT IS ALSO SEEN THAT THE LD. CIT(A) RAISED CERTAIN QUERIES IN RESPECT OF CERTAIN DATES VIZ 9 TH APRIL, 11 TH APRIL AND 13 TH APRIL ETC AS SOME DISCREPANCY WAS FOUND IN THE PRODUCTION LOG-SHEET. IT IS SEEN THAT ON THOSE DAYS THERE IS NO MENTION OF MILK FAT CANS PRODUCED IN THE PRODUCTION LOG-SHEET. THE OBSERVATION OF THE LD. CIT(A) IT APPEARS TO BE CON TRARY TO THE RECORD OF THE ASSESSEE. ITA NO. 8486 AND 8487/MUM/2004 (AYS: 1999-2000 AND 2000-2001) 11 72. AFTER CONSIDERING THE TOTALITY OF THE FACTS, WE ARE OF THE OPINION THAT THERE IS NO JUSTIFICATION TO SU PPORT THE ADDITION MADE BY THE AO. WE, ACCORDINGLY, DELETE THE ADDITION MADE BY THE AO FOR ALLEGED SALES OF THE M ILK FATS OUT OF THE BOOKS OF ACCOUNT. ACCORDINGLY, GROU ND NO.5 IS ALLOWED IN THE ABSENCE OF ANY DISTINGUISHING FEATURES BROU GHT ON RECORD BY THE REVENUE, WE RESPECTFULLY FOLLOWING TH E ORDER OF THE TRIBUNAL (SUPRA) HOLD THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONE R OF INCOME TAX (A) WAS NOT JUSTIFIED IN SUSTAINING TH E ADDITION MADE BY THE AO ON ACCOUNT OF ALLEGED SALES OF MILK FAT TREATED AS OUT OF BOOKS OF ACCOUNT AND ACCORDINGLY, WE DELETE THE SAME. THE GROUND TAKEN BY THE ASSESSEE, IS THE REFORE, ALLOWED. 24. GROUND NO.5(A) READS AS UNDER : THE CIT(A) ERRED IN HOLDING THAT THE AO WAS JUSTIF IED IN CONSIDERING MISCELLANEOUS INCOME AMOUNTING TO RS.70,02,380/- AS A PART OF TOTAL TURNOVER FOR THE PURPOSE OF COMPUTING DEDUCTION UNDER SECTION 80HHC OF THE A CT 25. THE ASSESSING OFFICER WHILE CALCULATING THE DED UCTION U/S 80HHC TREATED THE MISCELLANEOUS INCOME WHICH I NCLUDES SALE OF VARIOUS WASTE PRODUCTS, SCRAP SALE, COCOAS HELL ETC IN THE TOTAL TURNOVER. ACCORDING TO HIM ALL THESE IT EMS WERE OF THE NATURE OF SALES. HE FURTHER OBSERVED THAT IT HAS ALSO BEEN CONFIRMED BY THE LEARNED COMMISSIONER OF INCO ME TAX (A) FOR THE ASSESSMENT YEAR 1994-95. ON APPEAL, TH E LEARNED ITA NO. 8486 AND 8487/MUM/2004 (AYS: 1999-2000 AND 2000-2001) 12 COMMISSIONER OF INCOME TAX (A) FOLLOWING THE APPELL ATE ORDER FOR THE ASSESSMENT YEARS 1993-94 TO 1998-99 UPHELD THE VIEW OF THE AO. 26. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT THIS ISSUE IS COVERED AGAINST THE ASSESSEE AND IN FAVOUR OF THE DEPARTMENT BY THE O RDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSES SMENT YEAR 1995-96 IN ITA NO.1641/MUM/2003, DATED 8.10.2 010, WHEREIN IT HAS BEEN HELD THAT THE MISCELLANEOUS I NCOME SHOWN BY THE ASSESSEE SHOULD BE INCLUDED IN THE TOT AL TURNOVER AND NOT TO REDUCE 90% OF THE SAID INCOME WHILE COMPUTING THE PROFIT OF THE BUSINESS BY APPLYING EX PLANATION (BAA) TO THE SECTION 80HHC OF THE ACT. HE THEREFO RE SUBMITS THAT THE ISSUE MAY BE DECIDED ACCORDINGLY. 27. ON THE OTHER HAND, THE LEARNED DR SUPPORTS THE ORDER OF THE AO AND THE LEARNED COMMISSIONER OF INCOME T AX (A) 28. AFTER HEARING SUBMISSIONS OF THE RIVAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD, WE FIN D THAT THE FACTS ARE NOT IN DISPUTE. WE FURTHER FIND THAT THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.2298/MUM/2000 FOR THE ASSESSMENT YEAR 1995-96, VIDE ORDER DATED 8.10.2010 IN PARAGRAPH 11 OF THE ORDER HAS HELD AS UNDER : ITA NO. 8486 AND 8487/MUM/2004 (AYS: 1999-2000 AND 2000-2001) 13 11SO FAR AS THE ISSUE OF MISCELLANEOUS INCOME IS CONCERNED, THIS INCOME HAS DIRECT NEXUS WITH TH E MANUFACTURING ACTIVITY OF THE ASSESSEE AND THIS IN COME IS GENERATED FROM THE COCOA SEEDS WHICH IS THE RAW MATERIAL OF THE ASSESSEE. IN OUR OPINION, THE MISCELLANEOUS INCOME IS TO BE INCLUDED IN THE TOTAL TURNOVER. AT THE SAME TIME, EXPLANATION (BAA) TO SE CTION 80HHC IS NOT APPLICABLE TO THIS INCOME AS IT IS AN OPERATIONAL INCOME AND AS WELL AS IT IS NOT IN THE NATURE OF INTEREST, COMMISSION OR BROKERAGE ETC AS CONTEMPLATED IN THE EXPLANATION (BAA). WE, THEREF ORE, DIRECT THE AO THAT THE MISCELLANEOUS INCOME SHOWN BY THE ASSESSEE SHOULD BE INCLUDED IN THE TOTAL TURNO VER AND NOT TO REDUCE 90% OF THE SAID INCOME WHILE COMPUTING THE PROFITS OF THE BUSINESS BY APPLYING EXPLANATION (BAA). ACCORDINGLY, GROUND NO.4 IS PART LY ALLOWED IN THE ABSENCE OF ANY DISTINGUISHING FEATURES BROUG HT ON RECORD BY THE LEARNED COUNSEL FOR THE ASSESSEE, WE RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL DI RECT THE AO THAT THE MISCELLANEOUS INCOME SHOWN BY THE ASSESSE E SHOULD BE INCLUDED IN THE TOTAL TURNOVER. HOWEVER, WITH REGARD TO THE EXCLUSION OF 90% OF THE SAID INCOME W HILE COMPUTING THE PROFITS OF THE BUSINESS, WE RESPECTFU LLY FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN CIT V/S K.RAVINDRANATHAN NAIR [2007] 295 ITR 228 (SC) HOLD THAT THE SAME SHOULD ALSO BE REDUCED FROM THE BUSINESS PROFITS FOR THE PURPOSE OF CLAUSE (BAA) OF EXPLANATION TO SECTION 80HHC OF THE ACT. ACCORDINGLY, GROUND TAKEN BY THE ASSESSEE IS REJECTED. 29. IN GROUND NO.5(B), THE ASSESSEE HAS CHALLENGED THAT THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ERRE D IN HOLDING THAT THE AO WAS JUSTIFIED IN EXCLUDING (I) CLAIM RECEIVED FROM INSURANCE AMOUNTING TO RS.52,384, IN TEREST RS.1,46,02,007/-, OTHER INCOME RS.39,51,857/- AND OCTROI ITA NO. 8486 AND 8487/MUM/2004 (AYS: 1999-2000 AND 2000-2001) 14 REFUND OF RS.22,569/- FROM THE PROFIT OF THE BUSI NESS FOR THE PURPOSE OF COMPUTING THE DEDUCTION U/S 80HHC OF THE ACT. 30. THE AO WHILE COMPUTING THE PROFIT OF THE BUSINE SS FOR THE PURPOSE OF DEDUCTION U/S 80HHC HAS EXCLUDED 90% OF THE AFORESAID RECEIPTS AS PER EXPLANATION (BAA) TO 80HHC OF THE ACT. ON APPEAL, THE LEARNED COMMISSIONER OF INC OME TAX(A) WHILE OBSERVING THAT NO DETAILS OF INSURAN CE CLAIM RECEIPT ETC WAS PRODUCED EVEN DURING THE COURSE OF APPELLATE PROCEEDINGS, THEREFORE LOOKING TO THE NATURE OF THE RECEIPTS AND IN THE ABSENCE OF FULL PARTICULARS, UPHELD THE VIEW OF THE AO. 31. AT THE TIME OF HEARING, THE LEARNED COUNSEL OF THE ASSESSEE SUBMITS THAT THIS ISSUE IS COVERED AGAINS T THE ASSESSEE AND IN FAVOUR OF THE DEPARTMENT BY THE O RDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE IN ITA NO.4135/MUM/2003 FOR THE ASSESSMENT YEAR 1997-98, ORDER DATED 8.10.2010, THEREFORE, THE ISSUE MAY BE DECIDE D ACCORDINGLY. 32. ON THE OTHER HAND, THE LEARNED DR SUPPORTS THE ORDER OF THE AO AND THE LEARNED COMMISSIONER OF INCOME TAX(A). ITA NO. 8486 AND 8487/MUM/2004 (AYS: 1999-2000 AND 2000-2001) 15 33. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE, FIND THAT THE FACTS ARE NOT IN DISPUTE. WE FURTHER FIND MERITS TH AT THE ISSUE IS COVERED BY THE ORDER OF THE TRIBUNAL IN ASSESSEE S OWN CASE (SUPRA), WHEREIN THE TRIBUNAL HAS OBSERVED AND HELD THE SIMILAR ISSUE IN PARAGRAPHS 43 AND 44 OF THE OR DER DATED 8.10.2010 AS UNDER : 43. SO FAR AS GROUND 6(B) IS CONCERNED, THE GRIEVA NCE OF THE ASSESSEE IS THAT WHILE COMPUTING THE DEDUCTI ON U/S 80HHC, THE AO EXCLUDED 90% OF THE FOLLOWING AMOUNT BY APPLYING EXPLANATION (BAA) TO SEC.80HHC AND IN CONSEQUENCE PROFITS OF THE BUSINESS WAS REDUCED . (I) INSURANCE CLAIM : RS.16,41,826/- (II) DISCOUNT : RS. 63,127/- (III) LEAVE AND LICENSE FEES RS.1350 0/- 44. WE HAVE HEARD THE PARTIES. THE ARGUMENT OF THE LD. COUNSEL IS THAT THE ABOVE ITEMS ARE NOT ALIKE O R ANALOGOUS TO THE ITEMS MENTIONED IN EXPLANATION (B AA) BELOW SECTION 80HHC, HENCE, 90% EXCLUSION IS NOT CORRECT. SO FAR AS THE LEAVE AND LICENSE FEE OF RS.13,500/- IS CONCERNED, IN OUR OPINION, IT IS LIK E A RENT ONLY AND IT IS AN INDEPENDENT INCOME HAVING NO NEXU S WITH THE EXPORT OF THE ASSESSEE. HENCE, THE AO HAS RIGHTLY EXCLUDED 90% OF THE SAME. SO FAR AS DISCOU NT IS CONCERNED, NOTHING IS PLACED BEFORE US TO SHOW THAT IT HAS GOT SOME NEXUS WITH THE EXPORT OF THE ASSESS EE. WE, THEREFORE, CONFIRMED THE ORDER OF THE AO DUE TO LACK OF EVIDENCE BEFORE US, AS OTHERWISE, IT PARTAK ES THE CHARACTER OF THE INDEPENDENT INCOME. SO FAR AS THE AMOUNT OF THE INSURANCE CLAIM IS CONCERNED, IN OUR OPINION THIS ISSUE NEEDS TO GO BACK TO THE AO AS T HE NATURE OF THE INSURANCE CLAIM IS NOT CLEAR. IF THE INSURANCE CLAIM IS IN RESPECT OF TRADING OR EXPORT GOODS THEN IT CANNOT BE REDUCED BY APPLYING EXPLANATION (BAA) TO SECTION 80HHC. WE, THEREFORE, DIRECT THE AO TO V ERIFY THE NATURE OF THE INSURANCE CLAIM AND DECIDE THE I SSUE IN THE LIGHT OF OUR ABOVE OBSERVATION. ACCORDINGLY , GROUND NO.6(B) IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 8486 AND 8487/MUM/2004 (AYS: 1999-2000 AND 2000-2001) 16 IN THE ABSENCE OF ANY DISTINGUISHING FEATURES BROUG HT ON RECORD BY THE PARTIES AND KEEPING IN VIEW THAT THE ASSESSEE HAS FAILED TO SHOW THAT THE RECEIPT OF INTEREST, O THER INCOME AND OCTROI REFUND HAS NEXUS WITH THE EXPORT OF THE ASSESSEE, WE RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL (SUPRA) HOLD THAT THE AO WAS JUSTIFIED IN EXCLUDING 90% OF THE RECEIPT OF INTEREST OF RS.1,46,02,007/-, OTHER INC OME OF RS. 39,51,857/- AND OCTROI REFUND OF RS.22,569/- IN VI EW OF THE EXPLANATION (BAA) TO SECTION 80HHC OF THE ACT. WITH REGARD TO THE AMOUNT OF INSURANCE CLAIM, IN THE ABSENCE OF ANY DETAILS WE KEEPING IN VIEW OF THE FINDINGS RECORDED BY THE TRIBUNAL (SUPRA) SET ASIDE THE ISSUE TO THE FILE O F THE AO TO VERIFY THE SAME AND DECIDE THE ISSUE AFRESH IN TH E LIGHT OF THE DECISION OF THE HON. JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V/S PFIZER LTD. (2011) 330 ITR 62 ( BOM .) AND AFTER ALLOWING THE PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUND TAKEN BY THE ASSESSEE IS THER EFORE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 34. GROUND NO.6 IS IN RESPECT OF NON DETERMINATION OF CAPITAL LOSS OF RS.96,00,000/- 35. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT HE DOES NOT WANT TO PRESS THE ABOVE GROUND WHICH WAS NOT OBJECTED TO BY THE LEARNED DR . 36. THAT BEING SO AND IN THE ABSENCE OF ANY SUPPORT ING MATERIAL PLACED ON RECORD BY THE LEARNED COUNSEL F OR THE ASSESSEE, THE GROUND TAKEN BY THE ASSESSEE IS THER EFORE REJECTED BEING NOT PRESSED. ITA NO. 8486 AND 8487/MUM/2004 (AYS: 1999-2000 AND 2000-2001) 17 ITA NO. 8487/MUM/2004 (AY-2000-01) 37. GROUNDS OF APPEAL NO.1 TO 5(B) ARE AS UNDER : 1. THE COMMISSIONER OF INCOME TAX (APPEALS)-V, MUMBAI (HEREINAFTER REFERRED TO AS THE CIT(A), ERR ED IN UPHOLDING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER (AO) OF A SUM OF RS.1,17,185/- BEING THE EXPENDITURE INCURRED ON RURAL DEVELOPMENT. YOUR APPELLANTS SUBMIT THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) SHOULD H AVE HELD THAT THE EXPENDITURE IS ALLOWABLE AS REVENUE DEDUCTION. YOUR APPELLANTS PRAY THAT THE AO BE DIRECTED ACCORDINGLY. 2. THE CIT(A) ERRED IN HOLDING THAT THE AO WAS JUSTIFIED IN NOT GRANTING A DEDUCTION OF RS.29,52,9 68/- TO YOUR APPELLANTS REPRESENTING THEIR CONTRACTUAL LIAB ILITY TO THE THIRD PARTY CONVERTERS YOUR APPELLANTS SUBMIT THAT HAVING REGARD TO THE F ACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) OUGHT TO HAVE DIRECTED THE AO TO GRANT THEM A DEDUCTION OF RS.29,52,968/-. YOUR APPELLANT PRAY THAT THE AO BE DIRECTED ACCORDINGLY. 3. THE CIT(A) ERRED IN HOLDING THAT THE AO WAS JUSTIFIED IN NOT GRANTING A DEDUCTION OF RS.1,39,75 3/- BEING BAD DEBTS WRITTEN OFF DURING THE YEAR. YOUR APPELLANTS SUBMIT THAT HAVING REGARD TO THE FA CTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISIONS OF LAW, THE CIT(A) OUGHT TO HAVE DIRECTED THE AO TO GRANT YOUR APPELLANTS THE DEDUCTION OF RS.1,39,753 IN COMPUTI NG THEIR BUSINESS INCOME. YOUR APPELLANT PRAY THAT THE AO BE DIRECTED ACCORDINGLY. 4. THE CIT(A) ERRED IN HOLDING THAT THE AO WAS JUSTIFIED IN ADDING AN AMOUNT OF RS.12,32,500/- AS SALES NOT RECORDED IN THE BOOKS OF ACCOUNTS ITA NO. 8486 AND 8487/MUM/2004 (AYS: 1999-2000 AND 2000-2001) 18 YOUR APPELLANTS SUBMITS THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) OUGHT TO HAVE DIRECTED THE AO TO DELETE THE ADDITION OF RS.12,32 ,500/-. YOUR APPELLANTS PRAY THAT AO BE DIRECTED ACCORDINGL Y. 5(A) THE CIT(A) ERRED IN HOLDING THAT THE AO WAS JUSTIFIED IN CONSIDERING MISCELLANEOUS INCOME AMOUNTING TO RS.1,03,01,709/- AS A PART OF TOTAL TURNOVER FOR THE PURPOSE OF COMPUTING DEDUCTION U NDER SECTION 80HHC OF THE ACT. YOUR APPELLANTS SUBMIT THAT ON A PROPER INTERPRETAT ION OF THE PROVISIONS OF SECTION 80HHC OF THE ACT, THE CIT(A) OUGHT TO HAVE DIRECTED THE AO TO EXCLUDE MISCELLA NEOUS INCOME FROM TOTAL TURNOVER IN COMPUTING THE DEDUCTI ON UNDER SECTION 80HHC OF THE ACT. YOUR APPELLANTS PRAY THAT AO BE DIRECTED ACCORDINGL Y. 5(B) THE CIT(A) ERRED IN HOLDING THAT THE AO WAS JUSTIFIED IN EXCLUDING; 1) CLAIM RECEIVED FROM INSURANCE AMOUNTING TO RS.1,03,36,440/- 2) INTEREST RS.1,63,01,564/- 3) OTHER INCOME RS.23,85,267/- FROM THE PROFITS OF THE BUSINESS FOR THE PURPOSE OF COMPUTING DEDUCTION UNDER SECTION 80HHC OF THE ACT . YOUR APPELLANTS SUBMIT THAT ON A PROPER INTERPRETAT ION OF THE PROVISIONS OF SECTION 80HHC(4A) OF THE ACT, T HE CIT(A) OUGHT TO HAVE HELD THAT NONE OF ABOVE ITE MS FALL WITHIN THE AMBIT OF EXPLANATIONS (BAA) TO SECTION 80HHC(4A) YOUR APPELLANTS PRAY THAT THE AO BE DIRECTED TO RECOMPUTE THE DEDUCTION UNDER SECTION 80HHC OF THE ACT ACCORDINGLY. WITHOUT PREJUDICE TO THE ABOVE, IN ANY EVENT THE CIT(A) OUGHT TO HAVE HELD THAT ONLY NET INTEREST SHOULD BE EXCLUDED FROM THE PROFITS OF THE BUSINESS AND PRAY THAT THE AO BE DIRECTED ACCORDINGLY. ITA NO. 8486 AND 8487/MUM/2004 (AYS: 1999-2000 AND 2000-2001) 19 38. AT THE TIME OF HEARING, BOTH PARTIES HAVE AG REED THAT THE FACTS OF THE ABOVE ISSUES ARE SIMILAR TO THE FACTS OF THE CASE FOR THE ASSESSMENT YEAR 1999-2000, THEREFORE, THE PLEA TAKEN BY THEM IN THE APPEAL FOR THE SAID ASSESSMENT YEAR MAY BE CONSIDERED WHILE DECIDING THE ABOVE GROUNDS OF APPEAL. 39. THAT BEING SO AND IN THE ABSENCE OF ANY DISTING UISHING FEATURES BROUGHT ON RECORD BY THE PARTIES, WE FOR THE REASONS AS MENTIONED IN PARAGRAPHS 8 AND 13 REJECT THE GR OUNDS NO. 1 AND 2 RESPECTIVELY TAKEN BY THE ASSESSEE. 40. WITH REGARD TO THE CLAIM OF BAD DEBTS IN GROUND NO.3, WE FOR THE REASONS AS MENTIONED IN PARAGRAPHS 18 O F THIS ORDER SET ASIDE THE ISSUE TO THE FILE OF THE AO T O FOLLOW OUR DIRECTION MENTIONED THEREIN AND ACCORDINGLY GROUND NO.3 TAKEN BY THE ASSESSEE IS PARTLY ALLOWED FOR STATIST ICAL PURPOSES. 41. WITH REGARD TO GROUND NO.4, WE FOR THE REASONS AS MENTIONED IN PARAGRAPH 23 OF THIS ORDER DELETE THE ADDITION MADE BY THE AO AND ACCORDINGLY ALLOW THE GROUND T AKEN BY THE ASSESSEE. 42. WITH REGARD TO GROUND NO.5(A), WE FOR THE REASO NS AS MENTIONED IN PARAGRAPH 28 OF THIS ORDER REJECT THE GROUND NO.5(A) TAKEN BY THE ASSESSEE. ITA NO. 8486 AND 8487/MUM/2004 (AYS: 1999-2000 AND 2000-2001) 20 43. WITH REGARD TO GROUND NO.5(B), WE FOR THE REASO NS AS MENTIONED IN PARAGRAPH 33 OF THIS ORDER HOLD THAT T HE AO WAS JUSTIFIED IN EXCLUDING 90% OF THE RECEIPT OF INTEREST OF INTEREST RS.1,63,01,564/- AND OTHER INCOME OF RS.23,85,267/- IN VIEW OF THE EXPLANATION (BAA) TO SECTION 80HHC OF THE ACT. HOWEVER, THE ISSUE OF INSURANC E CLAIM, FOR THE REASONS AS MENTIONED IN PARAGRAPH 33 OF THI S ORDER SET ASIDE THE ISSUE TO THE FILE OF THE AO TO FOLLO W OUR DIRECTION MENTIONED THEREIN AND HENCE THE GROUND T AKEN BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURP OSE. 44. GROUND NO.6 IS AGAINST THE COMPUTATION OF CAPIT AL GAIN ON SALE OF LAND AT THANE. 45. AT THE TIME OF HEARING, THE LEARNED COUNSEL FO R THE ASSESSEE SUBMITS THAT HE DOES NOT WANT TO PRESS THE ABOVE GROUND WHICH WAS NOT OBJECTED TO BY THE LEARNED DR. 46. THAT BEING SO AND IN THE ABSENCE OF ANY SUPPOR TING MATERIAL PLACED ON RECORD BY THE LEARNED COUNSEL FOR THE ASSESSEE, THE GROUND TAKEN BY THE ASSESSEE, IS THER EFORE, REJECTED. 47. GROUND NO.7 IS AGAINST THE NETTING OFF INTEREST RECEIVED FROM THE INCOME TAX DEPARTMENT AND PAID TO THE DEPA RTMENT. ITA NO. 8486 AND 8487/MUM/2004 (AYS: 1999-2000 AND 2000-2001) 21 48. THE BRIEF FACTS OF THE ABOVE ISSUE ARE THAT TH E AO NOTED THAT THE ASSESSEE HAS RECEIVED INTEREST FROM THE DEPARTMENT AGGREGATING TO RS.41,42,376/- AND PAID I NTEREST TO THE DEPARTMENT AGGREGATING TO RS.52,21,038/-. BO TH THESE AMOUNTS HAVE NOT BEEN DEBITED OR CREDITED TO THE P ROFIT AND LOSS ACCOUNT. THE AO AFTER CONSIDERING THE ASSESSE ES REPLY DATED 26.11.2002 OBSERVED THAT THE INTEREST OF RS.22,85,758/- PAID TO THE ASSESSEE VIDE INTIMATION DATED 28.11.1997 FOR THE ASSESSMENT YEAR 1997-98 WAS SUBSEQUENTLY WITHDRAWN WHILE PASSING THE ORDER U/S 143(3) AND INTEREST OF RS.19,88,372/- WAS GRANTED. THE ADDITION OF RS.22,85,758/- WAS MADE TO THE TOTAL INCOME UND ER THE HEAD INCOME FROM OTHER SOURCES FOR THE ASSESSMENT YEAR 1998-99, THE ASSESSEE IS ENTITLED FOR THE DEDUCTION OF RS.2,97,786/- (2285758-1988372). HOWEVER, THE INT EREST RECEIVED FOR THE ASSESSMENT YEAR 1994-95 RS.21,54,0 04/- IS LIABLE TO BE ASSESSED AS INCOME FOR THE YEAR UNDER CONSIDERATION AS INCOME FROM OTHER SOURCES AND HE NCE HE MADE AN ADDITION OF RS.18,56,618/-. (2154004 COR RECT FIGURE OF RS.2,97,386 IN PLACE OF RS.2,97,786 ME NTIONED IN THE ASSESSMENT ORDER). ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX (A) HELD THAT INTEREST P AID U/S 220(2) OF THE ACT IS NOT ALLOWABLE EXPENDITURE, IT CANNOT BE ALLOWED BY NETTING IT OFF AGAINST THE INTEREST REC EIVED U/S 244A AND HENCE REJECTED THE GROUND RAISED BY THE AS SESSEE. ITA NO. 8486 AND 8487/MUM/2004 (AYS: 1999-2000 AND 2000-2001) 22 49. AT THE TIME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITS THAT THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS NOT DEALT WITH THE ABOVE ISSUE WHILE DECIDING THE APPEAL OF THE ASSESS EE. HE FURTHER SUBMITS THAT THE TRIBUNAL IN THE ASSESSEES OWN CASE IN ITA NO.282/MUM/2000 FOR THE ASSESSMENT YEAR 19 94-95, ORDER DATED 30.6.2010 HAS DELETED THE ADDITION MADE BY THE AO. 50. ON THE OTHER HAND, THE LEARNED DR SUPPORTS THE ORDERS OF THE AO AND THE LEARNED COMMISSIONER OF INCOME T AX (A). 51. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE R IVAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON REC ORD, WE FIND THAT THE TRIBUNAL VIDE PARAGRAPH 30 OF ITS OR DER (SUPRA) AFTER FOLLOWING CERTAIN DECISIONS IN GRASIM INDUST RIES LTD IN ITA NO.8221/BOM/1989, SANDVIK ASIA LTD REPORTED IN 82 ITD 330, AND THE DECISION OF DELHI BENCH OF ITAT IN THE CASE OF N AGARWAL V. ITO-1 SOT 361, DIRECTED THE AO TO TA X ONLY THE NET INTEREST INCOME IN THE HANDS OF THE ASSESSE E. HOWEVER, IN THE YEAR UNDER CONSIDERATION, IN THE ABSENCE OF SECTION-WISE DETAILS OF INTEREST PAID OR RECEIV ED BY THE ASSESSEE AND KEEPING IN VIEW THE PLEA OF THE LEARNE D COUNSEL FOR THE ASSESSEE THAT THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS NOT DEALT WITH THE ISSUE, WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE THE MATTER SHOULD GO BA CK TO THE FILE ITA NO. 8486 AND 8487/MUM/2004 (AYS: 1999-2000 AND 2000-2001) 23 OF THE LEARNED COMMISSIONER OF INCOME TAX(A) AND ACCORDINGLY, WE SET AIDE THE ORDER PASSED BY THE LE ARNED COMMISSIONER OF INCOME TAX (A) ON THIS ACCOUNT AND SEND THE MATTER BACK HIS FILE TO DECIDE THE ISSUE AFRE SH IN THE LIGHT OF OUR OBSERVATIONS HEREINABOVE AND ACCORDI NG TO LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HE ARD TO THE ASSESSEE. GROUND TAKEN BY THE ASSESSEE IS THEREFOR E, PARTLY ALLOWED FOR STATISTICAL PURPOSES. 52. IN THE RESULT, THE ASSESSEES APPEALS STAND PAR TLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 11TH MAY ,2011. SD SD (T.R.SOOD) (D.K.AGARWAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 11 TH MAY 2011 SRL:27411 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. LEARNED CIT(A) CONCERNED 5. DR CONCERNED BENCH 6. GUARD FILED. BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI