M/s Beas Valley Power Corporation Ltd., Mandi V. ACIT, Shimla

ITA 857/CHANDI/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81109 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 24-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 16-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Depreciation; Capital receipt
• Section: 56; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 857/CHD/2012 ASSESSMENT YEAR: 2009-10 M/S BEAS VALLEY POWER, V THE ACIT, CORPORATION LTD, CIRCLE, TEHSIL JOGINDER NAGAR, SHIMLA. DISTT. MANDI (H.P.). PAN: AABHC1161P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VISHAL MOHAN RESPONDENT BY : SHRI S.K.MITTAL DATE OF HEARING : 24.12.2014 DATE OF PRONOUNCEMENT : 31.12.2014 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. CIT(APPEALS) SHIMLA DATED 06.06.2012 FOR ASSESS MENT YEAR 2009-10 ON THE FOLLOWING GROUNDS : 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(APPEALS) IS NOT JUSTIFIED IN SUSTAINING AN ADDITION OF RS. 83,06,897/- ASSESSED UNDER THE HEAD INCOME FROM OTHER INCOME ASSESSED BY THE ASSESSING OFFICER. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(APPEALS) IS NOT JUSTIFIED IN UPHOLDING THE TAXING OF THE INTEREST AS THE BUSINESS OF THE ASSESSEE HAD NOT BEEN COMMENCED AND WAS IN THE PRE-OPERATION STAGE. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE CORPORATION IS A GOVT. COMPANY PROMOTED BY HIMACHA L 2 PRADESH STATE ELECTRICITY BOARD LTD., TO EXECUTE TH E 100 MW UHI STAGE-ILL IN TEHSIL JOGINDERNAGAR, DISTT. MANDI . THE COMPANY WAS INCORPORATED ON 25/3/2003, BUT THE COMP ANY HAD NOT STARTED COMMERCIAL OPERATION EVEN DURING TH E ASSESSMENT YEAR 2009-10. THEREFORE, NO PROFIT AND L OSS ACCOUNT WAS PREPARED BY THE ASSESSEE CORPORATION, A ND INSTEAD A STATEMENT SHOWING INCIDENTAL EXPENDITURE DURING CONSTRUCTION (PENDING ALLOCATION) WAS PREPARED BY T HE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDIN GS, THE A.O. OBSERVED THAT THE ASSESSEE COMPANY WAS STILL I N THE PRE-OPERATIVE STAGE AND HAD NOT STARTED ANY COMMERC IAL PRODUCTION. HE, THEREFORE, HELD THAT THE INTEREST E ARNED ON BANK DEPOSITS TO THE TUNE OF RS.1,19,32,956/- BY TH E ASSESSEE CORPORATION WAS TAXABLE, AS THE SAID INTER EST WAS EARNED ON SURPLUS FUNDS. DISMISSING THE CLAIM OF TH E ASSESSEE COMPANY THAT THE PURPOSE OF KEEPING THE FU NDS IN SAVINGS/SHORT TERM DEPOSITS INSTEAD OF CURRENT ACCO UNT WAS NOT TO GENERATE ANY INCOME BUT TO EFFICIENTLY AND E FFECTIVELY USE THE FUNDS SO AS TO REDUCE THE TOTAL OUTLAY ON T HE PROJECT, THE A.O. RELIED ON THE JUDGMENT OF THE HON'BLE SUPR EME COURT IN THE CASE OF TUTICORIN ALKALINE CHEMICALS & FERTILIZERS LTD. VS. CIT (1997) 227 ITR 172 AND HEL D THAT THE GROSS INTEREST EARNED BY THE ASSESSEE CORPORATION W AS ASSESSABLE IN ITS HAND AS INCOME FROM OTHER SOURCES . 3. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(APPEALS) AND IT WAS SUBMITTED THAT THE CORPORAT ION HAD TO KEEP SOME AMOUNT IN SHORT TERM DEPOSITS IN THE B ANK OUT OF THE AMOUNT RECEIVED AGAINST POWER FINANCE COMPAN Y LOAN 3 TO MEET OUT THE URGENT REQUIREMENTS AGAINST WORKS O N BECOMING DUE, AND THE INTEREST SO RECEIVED ON SHORT TERM DEPOSITS DURING THE YEAR WAS SET OFF AGAINST THE IN TEREST PAYABLE ON PFC LOAN SO AS TO REDUCE THE COST OF THE PROJECT. 4. IT WAS CONTENDED THAT ALL THE EXPENSES INCL UDING INTEREST ON LOAN INCURRED DURING CONSTRUCTION STAGE ARE ELIGIBLE FOR CAPITALIZATION I. E. TO BE A PART OF T HE ASSET CREATED AND ARE ELIGIBLE FOR DEPRECIATION. THIS WOU LD MEAN THAT IN THE CONVERSE CASE, WHERE INTEREST IS EARNED , IT SHOULD BE AN ABATEMENT OF CAPITAL COST SO AS TO REDUCE THE CAPITAL BASE FOR DEPRECIATION PURPOSE. 5. THE APPELLANT PLACED RELIANCE ON THE CASE OF INDIAN OIL PANIPAT POWER CONSORTIUM LTD., VS ITO (2009) 315 I TR 255 (DELHI) AND THE APEX COURT JUDGMENT IN THE CASE OF BOKARO STEEL LTD. IT WAS ARGUED THAT THE ABOVE VIEW WAS AL SO CONFIRMED IN THE CASE OF CIT VS JAYPEE DSC VENTURE S BY DELHI HIGH COURT IN ITS DECISION DATED 11/03/201 1. 6. IT WAS ARGUED THAT DURING THE EXECUTION OF HYDROELECTRIC PROJECTS, FOR MEETING OUT THE CONSTR UCTION COST, THERE IS ALWAYS A TIME LAG BETWEEN THE RECEIP T OF FUNDS AND ITS UTILIZATION IN THE CONSTRUCTION OF THE PROJ ECT GIVING RISE TO TEMPORARY SURPLUS FUNDS, AND TO ENSURE THE EFFECTIVE FUND MANAGEMENT, THESE TEMPORARY SURPLUS FUNDS ARE KEPT IN SHORT TERM BANK DEPOSITS. HERE ALSO, THE INCOME SO EARNED WAS UTILIZED FOR CONSTRUCTION OF TUNNEL, INT AKE ETC., AND FOR PAYING INTEREST ON LOAN TAKEN FROM PFC. AS SUCH JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE O F TUTICORIN ALKALI CHEMICALS & FERTILIZERS LTD., IS N OT 4 APPLICABLE AS THERE WERE NO SURPLUS FUNDS WITH THE COMPANY AND SHORT TERM DEPOSITS WITH BANK WERE MADE ONLY WI TH A PURPOSE TO EFFICIENTLY MAKE USE OF THE FUNDS AND TO AVOID OVERRUN OF PROJECT COSTS. FURTHER THE ASSESSEE WAS NOT CARRYING OUT ANY OTHER ACTIVITIES AND THE CORPORATI ON WAS SOLELY INCORPORATED WITH A PURPOSE TO EXECUTE ONE P ROJECT ONLY I.E. UHI HYDROELECTRIC PROJECT. 7. PLACING RELIANCE ON THE DECISION OF THE HON' BLE APEX COURT IN THE CASE OF KARNAL CO-OPERATIVE SUGAR MIII S LTD., (2000) 243 ITR 2 (SC), IT WAS CONTENDED THAT BHARAT HEAVY ELECTRICAL LIMITED (BHEL) IS THE MAIN SUPPLIER FOR SUPPLY AND INSTALLATION SERVICES OF HYDRO GENERATING EQUIP MENTS AND ITS ASSOCIATED AUXILIARIES, TRANSFORMERS AND E. O.T. CRANES FOR UHL STAGE-ILL, HEP AND HAVE ENTERED INTO AGREEMENT WITH BEAS VALLEY POWER CORPORATION THROUG H H.P. STATE ELECTRICITY BOARD WORK AWARDED TO THE BHEL ON 15/02/2007. AS PER CLAUSE 5.0 OF THE TERMS AND PROC EDURES OF PAYMENTS LAID IN THE AGREEMENT BETWEEN THE PARTI ES, THE PURCHASER I. E. BEAS VALLEY POWER CORPORATION WILL ESTABLISH AN IRREVOCABLE LETTER OF CREDIT (L/C) PAYABLE AT SI TE IN FAVOUR OF THE CONTRACTOR THROUGH THE PURCHASER BANK FOR PA YMENT DUE, ON DISPATCH OF EQUIPMENT. THE VALUE OF L/C WIL L BE AS PER PAYMENT SCHEDULE FOR EACH QUARTER AND WILL BE V ALID FOR ONE QUARTER ONLY. IT WILL BE THE RESPONSIBILITY OF THE CONTRACTOR TO UTILIZE THE L/C FOR CONCERNED QUARTER TO FULLEST EXTENT ETC. FOR THE FINANCIAL YEAR 2008-09, BHEL HA D GIVEN A FUND REQUIREMENT OF 13.80 CRORES THROUGH LETTER OF CREDIT (L/C) AND 10.72 CRORE AS DIRECT PAYMENT. AS PER THE BOOKS 5 OF ACCOUNTS, DURING THE FINANCIAL YEAR 2008-09, TOT AL PAYMENT OF RS.29.11 CRORE WAS MADE TO BHEL, BY THE APPELLANT CORPORATION. FOR COMPLYING WITH THE REQUI REMENT OF OPENING LETTER OF CREDIT WITH THE BANK, THE SBI JOGINDER NAGAR, THE COMPANY HAD OPENED THE L/C WITH 6 CRORES , I.E. RS.6.00 CRORES HAD TO BE MAINTAINED AT ALL TIME AS SECURITY. PAYMENT TO THE BHEL HAD TO BE MADE @ 3.80 CRORES PE R CONSIGNMENT. AS SUCH REVOLVING FUND OF RS.3.80 CROR ES WAS TO BE MAINTAINED AS PER THE AGREEMENT, UNLESS THE D ISPATCH FROM BHEL SHOULD BE LESS THAN FOR RS.3.80 CRORES. A GAINST THE TOTAL INTEREST AMOUNTING TO RS. 1,19,32,956/-, ASSESSED AS INCOME FROM OTHER SOURCES, ASSESSEE HAD EARNED RS.76,82,346/- FROM SBI AND RS.41,42,448/- FROM PNB . REGARDING THE DEPOSIT WITH PNB, IT WAS ARGUED THAT THESE FUNDS WERE ALSO KEPT IN SHORT TERM DEPOSITS FOR MEE TING CONTRACTOR LIABILITY, 8. IT WAS FURTHER MENTIONED THAT WORK AT UHL PR OJECT SITE REMAINED SUSPENDED FOR ALMOST 6 MONTHS DUE TO RESCI NDING OF HRT AND INTAKE WORKS WHICH RESULTED IN AVAILABIL ITY OF SHORT TERM FUNDS, AND FOR ENSURING EFFECTIVE MANAGE MENT OF FUNDS THE SAME WERE KEPT IN SHORT TERM DEPOSITS. 9. THE APPELLANT ALSO SUBMITTED THE COPIES OF TH E SUPPORTING DOCUMENTS IN THE FORM OF TERMS & PROCEDU RE OF PAYMENTS EXECUTED BETWEEN THE H.P.S.E.B. AND BHEL, THE CORRESPONDENCE OF M/S BHEL ON THE ISSUE OF FUND REQUIREMENT AND PAYMENT AGAINST DISPATCHES, THE CORRESPONDENCE OF STATE BANK OF INDIA, JOGINDER NAG AR REGARDING THE ISSUE OF THE LETTER OF CREDIT IN FAVO UR OF M/S 6 BHEL AND THE CERTIFICATE OF THE SBI, JOGINDER NAGAR REGARDING THE INTEREST ACCRUED ON THE CAPTIONED FDR S. 10. THE LD. CIT(APPEALS), CONSIDERING THE EXPLANATI ON OF THE ASSESSEE, DELETED PART ADDITION OF RS. 36,26,063/-, HOWEVER MAINTAINED THE REST OF THE ADDITION. THE FINDINGS OF THE LD. CIT(APPEALS) IN PARAS 4 TO 4.5 ARE REPRODUCED AS UN DER : 4. THE RIVAL SUBMISSIONS HAVE BEEN CAREFULLY CONSIDERED WITH REFERENCE TO THE FACTS OF THE CASE AND THE CASE LAWS RELIED UPON. IT IS NOTED THAT THE AWARD OF CONTRACT FOR SUPPLY AND INSTALLATION SERVICES OF HYDRO-GENERATING EQUIPMENT, ITS ASSOCIATED AUXILLIARIES, TRANSFORMERS AND EOT CRANE FOR UHJ STATE-ILL HEP WAS GIVEN TO M/S BHARAT HEAVY ELECTRIC LTD. BY HIMACHAL PRADESH STATE ELECTRICITY BOARD. AS PER THE TERMS AND CONDITIONS SETTLED BY T HE HPSEB VIDE LETTER DATED 15/02/2007, THE PURCHASER (APPELLANT CORPORATION) WAS REQUIRED TO ESTABLISH A N IRREVOCABLE LETTER OF CREDIT (L/C) PAYABLE AT SITE IN FAVOUR OF THE CONTRACTOR (BHEL) THROUGH THE PURCHASER BANK FOR THE PAYMENTS DUE, AS PER TERMS AND PROCEDURES OF PAYMENT. AS PER LETTER DATED 24/10/2008, THE BHEL HAD GIVEN A TOTAL FUND REQUIREMENT OF PAYMENT THROUGH L/C FOR THE F. Y. 2008-09 AT RS. 1380.00 LAKHS, AND SBI, JOGINDER NAGAR VIDE LETTER DATED 04/11/2008 HAD ISSUED THE UC OF RS.3.80 CRORES IN FAVOUR OF M/S BHEL ON BEHALF OF THE APPELLANT CORPORATION. IT HAS BEEN CERTIFIED BY THE BRANCH MANAGER, SBI, JOGINDER NAGAR THAT AN FDR BEARING NO.950158 AMOUNTING TO RS.6.00 CORES IN THE NAME OF M. D. B. V. P. C.L WAS PLEDGED IN LIEU OF SECURITY CREATED AGAINST L/C OPENED IN FAVOUR OF M/S BHEL ON BEHALF OF BVPCL AND THE INTEREST EARNED/ACCRUED UPTO 31/3/2009 AGAINST THE CAPTIONED FDR WAS TO THE TUNE OF RS.36,26,063/-. THUS IT IS CLEAR THAT THE ASSESSES CORPORATION HAD DEPOSITED FUNDS IN THE FORM OF AN FDR TO THE TUNE OF RS.6 CRORES TO OPEN A LETTER OF CREDIT FOR THE PURCHASE OF THE MACHINERY REQUIRED F OR SETTING UP ITS PLANT IN TERMS OF THE ASSESSEE'S AGREEMENT WITH THE SUPPLIER (BHEL). IT WAS ON THE MONEY SO DEPOSITED THAT INTEREST OF RS.36,26,063/- WAS EARNED. THEREFORE, IT CANNOT BE SAID THAT THE INTEREST EARNED TO THIS EXTENT WAS ON ACCOUNT OF SURPLUS FUNDS LYING IDLE, WHICH WERE DEPOSITED IN T HE BANK FOR THE PURPOSE OF EARNING INTEREST. THE FACTS OF THE APPELLANT'S CASE IN THIS REGARD SQUARELY MATCH WITH THE FACTS OF THE CASE OF KARNAL CO-OP. SUGAR MILLS LTD. SUPRA AND, THEREFORE, THE DECISION OF TH E 7 HON'BLE SUPREME COURT RENDERED IN THE SAID CASE IS FULLY APPLICABLE TO THE CASE OF THE APPELLANT CORPORATION. ACCORDINGLY IT IS HELD THAT THE INTERE ST OF RS.36,26,063/- EARNED BY THE APPELLANT CORPORATION IS INCIDENTAL TO THE ACQUISITION OF ASSET FOR THE S ETTING UP OF THE PLANT AND MACHINERY. THE ADDITION OF INTEREST INCOME TO THE EXTENT OF RS.36,26,063/- IS, THEREFORE, DIRECTED TO BE DELETED. 4.1 THE APPELLANT HAS ARGUED THAT THE INTEREST INCOME IS NOT ASSESSABLE TO TAX U/S 56 OF THE ACT A S INCOME FROM OTHER SOURCES BECAUSE THE FUNDS AVAILABLE WERE INEXTRICABLY LINKED TO THE SETTING U P OF THE POWER PROJECT AND, THEREFORE, THE DECISION OF T HE HON'BLE DELHI HIGH COURT IN THE CASE OF INDIAN OIL PANIPAT CONSORTIUM LTD. (SUPRA) WAS SQUARELY APPLICABLE TO ITS CASE. HOWEVER, THE SAID ARGUMENT OF THE APPELLANT IS NOT FOUND TO BE CONVINCING. A CLOS E READING OF THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT SUPRA MAKES IT CLEAR THAT THE HON'BLE COURT H AS HEAVILY RELIED UPON THE CASE OF CIT VS. BOKARO STEE L LTD. 236 ITR 315JSC). WITH DUE RESPECT TO THE HON'B LE COURT, IT IS OBSERVED THAT THE FACTS OF THE CASE OF BOKARO STEEL LTD. HAVE NOT BEEN APPRECIATED IN THE RIGHT PERSPECTIVE. IN THE CASE OF BOKARO STEEL LTD. , THE PROCESS OF CONSTRUCTING AND ERECTING THE PLANT HAD LONG BEEN INITIATED AND WAS IN FULL SWING. IT WAS DURING THE COURSE OF THE ONGOING CONSTRUCTION ACTIVITIES THAT BOKARO STEEL LTD. HAD EARNED SOME INTEREST INCOME ON ACCOUNT OF ADVANCES GIVEN TO THE CONTRACTORS, RENTAL INCOME ON ACCOUNT OF RESIDENTIA L UNITS GIVEN TO THE STAFF AND WORKERS OF THE CONTRACTORS, HIRE CHARGES FROM PLANT & MACHINERY GIVEN ON RENT TO THE CONTRACTOR AND ROYALTY INCOME FOR EXCAVATION AND USE OF THE STONES FROM THE ASSESSEE' S LAND FOR THE CONSTRUCTION WORK BY THE CONTRACTORS. THUS ALL THE RECEIPTS BY BOKARO STEEL LTD. WERE EARNED DURING THE COURSE OF CONSTRUCTION ACTIVITY, AND THE ULTIMATE EFFECT OF THE SAID RECEIPTS WAS TO RED UCE THE COST OF CONSTRUCTION FOR THE ASSESSEE. HAD THE ASSESSES NOT EXTENDED THE SAID FACILITIES TO THE CONTRACTORS, ALBEIT ON PAYMENTS, THE CONTRACTORS WOULD HAVE ADDED THE SAID COST IN THEIR BILLS SEPARATELY AND THE ASSESSEE WOULD HAVE BEEN UNDER AN OBLIGATION TO PAY THE SAME. BY EARNING THE GIVEN INCOME, THE ASSESSEE ONLY SUCCEEDED IN GETTING THE SAID INCOME ADJUSTED AGAINST THE BILLS RAISED BY TH E CONTRACTORS. IT WAS IN THIS CONTEXT THAT IT WAS HEL D BY THE APEX COURT THAT WAS REQUIRED TO ESTABLISH AN IRREVOCABLE LETTER OF CREDIT (L/C) PAYABLE AT SITE IN FAVOUR OF THE CONTRACTOR (BHEL) THROUGH THE PURCHAS ER BANK FOR THE PAYMENTS DUE, AS PER TERMS AND PROCEDURES OF PAYMENT. AS PER LETTER DATED 24/10/2008, THE BHEL HAD GIVEN A TOTAL FUND REQUIREMENT OF PAYMENT THROUGH L/C FOR THE F. Y. 2008-09 AT RS. 1380.00 LAKHS, AND SB I, JOGINDER NAGAR VIDE LETTER DATED 04/11/2008 HAD ISSUED THE 8 L/C OF RS.3.80 CRORES IN FAVOUR OF M/S BHEL ON BEHALF OF THE APPELLANT CORPORATION. IT HAS BEEN CERTIFIED BY THE BRANCH MANAGER, SB I, JOGINDER NAGAR THAT AN FDR BEARING NO. 950158 AMOUNTING TO RS.6.00 CORES IN THE NAME OF M. D. B. V. P. C.L WAS PLEDGED IN LIEU OF SECURITY CREATED AGAINST L/C OPENED IN FAVOUR OF M/S BHEL ON BEHALF OF BVPCL AND THE INTEREST EARNED/ACCRUED UPTO 31/3/2009 AGAINST THE CAPTIONED FDR WAS TO THE TUNE OF RS.36,26,063/-. THUS IT IS CLEAR THAT THE ASSESSEE CORPORATION HAD DEPOSITED FUNDS IN THE FORM OF AN FDR TO THE TUNE OF RS.6 CRORES JO OPEN A LETTER OF CREDIT FOR THE PURCHASE OF THE MACHINERY REQUIRED F OR SETTING UP ITS PLANT IN TERMS OF THE ASSESSEE'S AGREEMENT WITH THE SUPPLIER (BHEL). IT WAS ON THE MONEY SO DEPOSITED THAT INTEREST OF RS.36,26,063/- WAS EARNED. THEREFORE, IT CANNOT BE SAID THAT THE INTEREST EARNED TO THIS EXTENT WAS ON ACCOUNT OF SURPLUS FUNDS LYING IDLE, WHICH WERE DEPOSITED IN T HE BANK FOR THE PURPOSE OF EARNING INTEREST. THE FACTS OF THE APPELLANT'S CASE IN THIS REGARD SQUARELY MATCH WITH THE FACTS OF THE CASE OF KARNAL CO-OP. SUGAR MILLS LTD. SUPRA AND, THEREFORE, THE DECISION OF TH E HON'BLE SUPREME COURT RENDERED IN THE SAID CASE IS FULLY APPLICABLE TO THE CASE OF THE APPELLANT CORPORATION. ACCORDINGLY IT IS HELD THAT THE INTERE ST OF RS.36,26,063/- EARNED BY THE APPELLANT CORPORATION IS INCIDENTAL TO THE ACQUISITION OF ASSET FOR THE S ETTING UP OF THE PLANT AND MACHINERY. THE ADDITION OF INTEREST INCOME TO THE EXTENT OF RS.36,26,063/- IS, THEREFORE, DIRECTED TO BE DELETED. 4.1 THE APPELLANT HAS ARGUED THAT THE INTEREST INCOME IS NOT ASSESSABLE TO TAX U/S 56 OF THE ACT A S INCOME FROM OTHER SOURCES BECAUSE THE FUNDS AVAILABLE WERE INEXTRICABLY LINKED TO THE SETTING U P OF THE POWER PROJECT AND, THEREFORE, THE DECISION OF T HE HON'BLE DELHI HIGH COURT IN THE CASE OF INDIAN OIL PANIPAT CONSORTIUM LTD. (SUPRA) WAS SQUARELY APPLICABLE TO ITS CASE. HOWEVER, THE SAID ARGUMENT OF THE APPELLANT IS NOT FOUND TO BE CONVINCING. A CLOS E READING OF THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT SUPRA MAKES IT CLEAR THAT THE HON'BLE COURT H AS HEAVILY RELIED UPON THE CASE OF CIT VS. BOKARO STEE L LTD. 236 ITR 315 (SC). WITH DUE RESPECT TO THE HON'BLE COURT, IT IS OBSERVED THAT THE FACTS OF THE CASE OF BOKARO STEEL LTD. HAVE NOT BEEN APPRECIATED IN T HE RIGHT PERSPECTIVE. IN THE CASE OF BOKARO STEEL LTD. , THE PROCESS OF CONSTRUCTING AND ERECTING THE PLANT HAD LONG BEEN INITIATED AND WAS IN FULL SWING. IT WAS DURING THE COURSE OF THE ONGOING CONSTRUCTION ACTIVITIES THAT BOKARO STEEL LTD. HAD EARNED SOME INTEREST INCOME ON ACCOUNT OF ADVANCES GIVEN TO THE CONTRACTORS, RENTAL INCOME ON ACCOUNT OF RESIDENTIA L UNITS GIVEN TO THE STAFF AND WORKERS OF THE 9 CONTRACTORS, HIRE CHARGES FROM PLANT & MACHINERY GIVEN ON RENT TO THE CONTRACTOR AND ROYALTY INCOME FOR EXCAVATION AND USE OF THE STONES FROM THE ASSESSEE' S LAND FOR THE CONSTRUCTION WORK BY THE CONTRACTORS. THUS ALL THE RECEIPTS BY BOKARO STEEL LTD. WERE EARNED DURING THE COURSE OF CONSTRUCTION ACTIVITY, AND THE ULTIMATE EFFECT OF THE SAID RECEIPTS WAS TO RED UCE THE COST OF CONSTRUCTION FOR THE ASSESSEE. HAD THE ASSESSES NOT EXTENDED THE SAID FACILITIES TO THE CONTRACTORS, ALBEIT ON PAYMENTS, THE CONTRACTORS WOULD HAVE ADDED THE SAID COST IN THEIR BILLS SEPARATELY AND THE ASSESSEE WOULD HAVE BEEN UNDER AN OBLIGATION TO PAY THE SAME. BY EARNING THE GIVEN INCOME, THE ASSESSEE ONLY SUCCEEDED IN GETTING THE SAID INCOME ADJUSTED AGAINST THE BILLS RAISED BY TH E CONTRACTORS. IT WAS IN THIS CONTEXT THAT IT WAS H ELD BY THE APEX COURT THAT THE GIVEN RECEIPTS WERE DIRECTLY CONNECTED WITH THE WORK OF CONSTRUCTION OF ITS PLANT UNDERTAKEN BY THE ASSESSEE AND THAT THE ARRANGEMENTS BETWEEN THE ASSESSEE COMPANY AND THE CONTRACTORS WERE INTRINSICALLY CONNECTED WITH THE CONSTRUCTION OF ITS STEEL PLANT. THEREFORE, THE SAI D RECEIPTS HAD RIGHTLY BEEN HELD AS CAPITAL RECEIPTS AND NOT THE INCOME OF THE ASSESSEE FROM ANY INDEPENDENT SOURCE. ON THE GIVEN FACTS OF THE CASE OF BOKARO ST EEL LTD., THE HON'BLE SUPREME COURT HAD RIGHTLY DISTINGUISHED ITS OWN DECISION RENDERED IN THE CASE OF TUTICORIN ALKALI CHEMICALS AND FERTILIZERS LTD. VS. CIT 227 ITR 172 (SC). THEREFORE, FINDING SIMILARITY BETWEEN THE CASE OF INDIAN OIL PANIPAT CONSORTIUM LTD. AND BOKARO STEEL LTD. BY THE HON'BLE DELHI HIG H COURT DOES NOT APPEAR TO BE BASED ON THE CORRECT APPRECIATION OF FACTS. 4.2 THE APPELLANT'S RELIANCE ON THE CASE OF CIT V. JAYPEE DSC VENTURES SUPRA IS ALSO MISPLACED. IN THIS CASE THE INTEREST WAS EARNED BY THE COMPANY ON A FIXED DEPOSIT GIVEN IN THE FORM OF A BANK GUARANT EE WHICH WAS FURNISHED AS A CONDITION PRECEDENT TO ENTERING INTO THE CONTRACT. THE INVESTMENT WAS NO T MADE BY THE ASSESSEE COMPANY OF ITS OWN VOLITION, BUT THE SAME WAS MADE UNDER COMPULSION AND WAS, THEREFORE, INEXTRICABLY LINKED WITH ITS PROJECT OF CONSTRUCTION. ACCORDINGLY THE HON'BLE COURT HAD H ELD THAT THE INTEREST EARNED ON SUCH A FIXED DEPOSIT HAD TO GO TO REDUCE THE PRE-PRODUCTION EXPENSES AND W AS NOT ASSESSABLE AS INCOME FROM OTHER SOURCES. 4.3 THE FACTS OF THE APPELLANT'S CASE NEED TO BE EXAMINED IN THE LIGHT OF THE DECISION OF THE HON'BL E SUPREME COURT IN THE CASE OF TUTICORIN ALKALI CHEMICALS AND FERTILIZERS LTD. SUPRA, AS HAS RIGH TLY BEEN DONE BY THE LD. ASSESSING OFFICER. IT IS AN ESTABLISHED PRINCIPLE THAT INCOME TAX IS ATTRACTED AT THE POINT WHEN THE INCOME IS EARNED. THE TOTAL INCO ME OF THE APPELLANT COMPANY IS CHARGEABLE TO TAX U/S 4 10 OF THE I. T.ACT. SINCE THE APPELLANT COMPANY HAD NO T COMMENCED ANY BUSINESS, THERE WAS NO QUESTION OF ASSESSMENT OF ITS PROFITS AND GAINS OF BUSINESS. BU T THE CAPITAL OF THE COMPANY WAS FRUITFULLY UTILIZED BY THE APPELLANT INSTEAD OF KEEPING IT IDLE. THEREFORE THE INCOME GENERATED IN THE FORM OF INTEREST IS DISTINC TLY OF A REVENUE NATURE. THE AMOUNT OF INTEREST RECEIVE D BY THE APPELLANT COMPANY HAS FLOWN FROM ITS INVESTMENT AND IS, THEREFORE, IN THE NATURE OF INCO ME. IT IS IMMATERIAL IF THE SAID INTEREST HAS BEEN EARN ED BY DEPOSITING THE FUNDS RECEIVED FROM THE PFC. THIS CERTAINLY CANNOT BE A GROUND FOR EXEMPTION OF INTER EST EARNED BY THE APPELLANT FROM TAXATION. AS IN THE CA SE OF TUTICORIN ALKALI CHEMICALS AND FERTILIZERS LTD., THE FUNDS AVAILABLE WITH THE APPELLANT WERE NOT IMMEDIATELY REQUIRED BY THE COMPANY FOR SETTING UP THE POWER PLANT AND WERE, THEREFORE, INVESTED IN FI XED DEPOSITS. IT IS FURTHER NOTED THAT THE APPELLANT DI D NOT EVEN HAVE TO INCUR ANY EXTRA COST IN ORDER TO EARN THIS INCOME. THE INCOME EARNED IN THE FORM OF INTEREST W AS PURE AND SIMPLE REVENUE RECEIPT IN THE HANDS OF THE APPELLANT COMPANY WITHOUT ANY CORRESPONDING LIABILITY IN THE FORM OF ANY INCIDENTAL EXPENSES. MERELY BECAUSE THE APPELLANT, AT SOME TIME IN FUTUR E, WOULD BE UTILIZING THE FUNDS FOR THE SETTING UP OF POWER PLANT DOES NOT MEAN THAT THE INCOME EARNED BY THE APPELLANT ON THE SAID FUNDS TODAY FALLS OUTSIDE THE CHARGE OF SECTION 4 OF THE I. T.ACT. IT IS WELL SETTLED THAT INCOME ATTRACTS TAX AS SOON AS IT ACCR UES. IT IS ALSO WELL SETTLED THAT INTEREST INCOME IS ALW AYS OF A REVENUE NATURE UNLESS IT IS RECEIVED BY WAY OF DAMAGES OR COMPENSATION. THE ULTIMATE OBJECTIVE/DESTINATION OF THE FUNDS TODAY AVAILABLE TO THE APPELLANT FOR INVESTMENT HAS GOT NOTHING TO DO WITH THE TAXABILITY OF THE INCOME EARNED THEREON AT THIS POINT OF TIME. 4.4 AS REGARDS THE APPELLANT'S ARGUMENT THAT THE INTEREST RECEIVED ON SHORT TERM DEPOSITS WAS SET OF F AGAINST THE INTEREST PAYABLE ON PFC JOAN, IT WILL B E WORTHWHILE TO REPRODUCE SOME OF THE RELEVANT PARTS OF THE JUDGMENT IN THE CASE OF TUTICORIN ALKALI AS FOLLOWS:- 'IN OTHER WORDS, IF THE CAPITAL OF A COMPANY IS FRUITFULLY UTILISED INSTEAD OF KEEPING IT IDLE, THE INCOME THUS GENERATED WILL BE OF REVENUE NATURE AND NOT AN ACCRETION TO CAPITAL. WHETHER THE COMPANY RAISED THE CAPITAL BY ISSUE OF SHARES OR DEBENTURES OR BY BORROWING, WILL NOT MAKE ANY DIFFERENCE TO THIS PRINCIPLE. IF BORROWED CAPITAL I S USED FOR THE PURPOSE OF EARNING INCOME, THAT INCOME WILL HAVE TO BE TAXED IN ACCORDANCE WITH LAW. INCOME IS SOMETHING WHICH FLOWS FROM THE PROPERTY. SOMETHING RECEIVED IN PLACE OF THE 11 PROPERTY WILL BE CAPITAL RECEIPT. THE AMOUNT OF INTEREST RECEIVED BY THE COMPANY FLOWS FROM ITS INVESTMENTS AND IS ITS INCOME AND IS CLEARLY TAXABLE EVEN THOUGH THE INTEREST AMOUNT IS EARNED BY UTILISING BORROWED CAPITAL. IT IS TRUE THAT THE COMPANY WILL HAVE TO PAY INTEREST ON THE MONEY BORROWED BY IT. BUT THAT CANNOT BE A GROUND FOR EXEMPTION OF INTEREST EARNED BY THE COMPANY BY UTILIZING THE BORROWED FUNDS AS ITS INCOME. IT WAS RIGHTLY POINTED OUT IN THE CASE OF KEDAR NARAIN SINGH V. CIT [1938] 6 ITR 157 (ALL) THAT 'ANYTHING WHICH CAN PROPERLY BE DESCRIBED AS INCOME IS TAXABLE UNDER THE ACT UNLESS EXPRESSLY EXEMPTED'. THE INTEREST EARNED BY THE ASSESSEE IS CLEARLY ITS INCOME AND UNLESS IT CAN BE SHOWN THAT ANY PROVISION LIKE SECTION 10 HAS EXEMPTED IT FROM TAX, IT WILL BE TAXABLE. THE FACT THAT SOURCE OF INCOME WAS BORROWED MONEY DOES NOT DETRACT FROM THE REVENUE CHARACTER OF THE RECEIPT. THE QUESTION OF ADJUSTMENT OF INTEREST PAYABLE BY THE COMPANY AGAINST THE INTEREST EARNED BY IT WILL DEPEND UPON THE PROVISIONS OF THE ACT. THE EXPENDITURE WOULD HAVE BEEN DEDUCTIBLE AS INCURRED FOR THE PURPOSE OF BUSINESS IF THE ASSESSEE'S BUSINESS HAD COMMENCED. BUT THAT IS NOT THE CASE HERE. THE ASSESSEE MAY BE ENTITLED TO CAPITALISE THE INTEREST PAYABLE BY IT. BUT WHAT THE ASSESSEE CANNOT CLAIM IS ADJUSTMENT OF THIS EXPENDITURE AGAINST INTEREST ASSESSABLE UNDER SECTION 56.SECTION 57 OF THE ACT SETS OUT IN ITS CLAUSES (I ) TO (III) THE EXPENDITURES WHICH ARE ALLOWABLE AS DEDUCTION FROM INCOME ASSESSABLE UNDER SECTION 56. IT IS NOT THE CASE OF THE ASSESSEE THAT THE INTEREST PAYABLE BY IT ON TERM LOANS IS ALLOWABLE AS DEDUCTION UNDER SECTION 57 OF THE ACT.' 4.5 IN VIEW OF ABOVE THE LD, A.O. HAS RIGHTLY RELIED UPON AND QUOTED FROM THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF TUTICORIN ALKALI CHEMICALS AND FERTILIZERS LTD. WHILE CONCLUDING THAT THE INTEREST INCOME EARNED BY THE APPELLANT IS CHARGEABLE U/S 56 OF THE ACT. NO INTERFERENCE IS, THEREFORE, CALLED FOR WITH THE ACTION OF THE LD. A.O.IN RESPECT OF THE REMAINING INTEREST INCOME OF RS.83,06,897/- ( RS. 1,19,32,960/- -RS.36,26,063/-) . AS FAR AS THE APPELLANT'S CLAIM FOR PAYMENT OF INTEREST ON THE BORROWED CAPITAL IS CONCERNED, THE APPELLANT IS FREE TO CAPITALIZE THE SAME AS PER THE PROVISIONS OF LAW AND ACCOUNTING PRACTICES IN THE PRE- COMMENCEMENT PERIOD. 12 11. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH TH E PARTIES AND PERUSED THE FINDINGS OF AUTHORITIES BELOW. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND SUBMITTED THAT THERE W ERE NO SURPLUS FUNDS AVAILABLE WITH THE ASSESSEE SO THE DE CISION IN THE CASE OF TUTICORIN ALKALI CHEMICALS AND FERTILIZ ERS LTD. VS. CIT (SUPRA) RELIED UPON BY ASSESSING OFFICER IS NOT APPLICABLE TO THE FACTS OF THE CASE. HE HAS SUBMIT TED THAT FUNDS WERE KEPT IN SHORT TERM DEPOSIT FOR THE PURPO SE OF COMPLETION OF THE PROJECT AND NOT TO EARN ANY INTER EST. HE HAS SUBMITTED THAT EVEN THE INTEREST SO RECEIVED WA S UTILIZED FOR CONSTRUCTION OF THE PROJECT AND FOR PAYING INTE REST ON LOANS TAKEN FROM POWER FINANCE COMPANY. HE HAS REF ERRED TO ANNUAL REPORT OF THE ASSESSEE (PB-15) T6O SHOW T HAT THERE WERE NO SURPLUS FUNDS AVAILABLE WITH THE ASSESSEE A ND THE INTEREST PAID ON THE LOAN ENDING 31.03.2009 WAS RS. 3652.44 LACS AND THE INTEREST RECEIVED FROM THE BAN K WAS RS. 625.95 LACS. HE HAS, THEREFORE, SUBMITTED THAT THE ASSESSEE RECEIVED LESSER INTEREST AS AGAINST MORE I NTEREST PAID TO THE FINANCIAL INSTITUTION. THEREFORE, THER E WAS NO INTENTION ON THE PART OF THE ASSESSEE TO EARN ANY I NTEREST ON SHORT TERM DEPOSITS. 12. ON THE OTHER HAND, LD. DR RELIED UPON ORDERS OF THE AUTHORITIES BELOW. 12(I) ON CONSIDERATION OF THE ABOVE FACTS AND MATER IAL ON RECORD, WE DO NOT FIND ANY JUSTIFICATION TO SUSTAIN THE FINDINGS OF THE AUTHORITIES BELOW. IT IS NOT IN DI SPUTE THAT ASSESSEE CORPORATION IS A GOVERNMENT COMPANY PROMOT ED BY 13 H.P. STATE ELECTRICITY BOARD LTD. THE ASSESSEE HAS ADMITTEDLY NOT STARTED COMMERCIAL OPERATION IN THE YEAR UNDER CONSIDERATION AND WAS STILL IN THE PRE-OPERAT IVE STAGE. THE ASSESSEE CLAIMED THAT IT HAS NO SURPLUS FUNDS B UT THE FINDING OF THE AUTHORITIES BELOW WAS THAT ASSESSEE EARNED INTEREST ON SURPLUS FUNDS. THE ACCOUNTS OF THE ASS ESSEE PLACED ON RECORD CLEARLY SUPPORT THE SUBMISSION OF THE ASSESSEE THAT THERE WERE NO SURPLUS FUNDS AVAILABLE WITH THE ASSESSEE. THE ASSESSEE ALSO CLAIMED THAT ITS FUNDS WERE TEMPORARILY EMPLOYED FOR SHORT TERM DEPOSITS FOR EF FICIENTLY AND EFFECTIVELY USE OF ITS FUNDS SO AS TO REDUCE TH E TOTAL COST OF THE PROJECT. THE LD. CIT(APPEALS) ALSO PARTLY A GREED WITH THE SUBMISSION OF THE ASSESSEE THAT PART FUNDS WERE INVESTED FOR SETTING UP OF THE PLANT & MACHINERY. THE ASSESSEE'S COUNSEL HAS REFERRED TO THE ACCOUNTS OF THE ASSESSEE AT PAGE 15 OF THE PAPER BOOK TO SHOW THAT ASSESSEE RECEIVED LESSER INTEREST OF RS. 625.97 LACS AND PAI D INTEREST ON LOAN AT RS. 3652.44 LACS IN THE YEAR UNDER CONSI DERATION WOULD SHOW THAT ASSESSEE HAS TO PAY MORE INTEREST A S AGAINST THE SMALL INTEREST RECEIVED BY ASSESSEE. T HEREFORE, IF ANY ADJUSTMENT IS MADE AGAINST INTEREST PAID, ST ILL THERE IS A LIABILITY OF THE ASSESSEE TO PAY INTEREST ON THE LOANS. THE ASSESSEE ALSO EXPLAINED THAT FOR EFFECTIVE FUNDS MA NAGEMENT, THE TEMPORARY SURPLUS FUNDS WERE KEPT IN SHORT TERM BANK DEPOSITS AND THEREAFTER, INTEREST WAS EARNED AND SO WAS ALSO USED FOR CONSTRUCTION OF THE PROJECT AND FOR PAYIN G INTEREST TO THE POWER FINANCE COMPANY WHICH HAVE NOT BEEN AD VERSELY COMMENTED UPON BY THE AUTHORITIES BELOW. THEREFORE , THE 14 RELIANCE OF THE ASSESSING OFFICER ON THE DECISION I N THE CASE OF TUTICORIN ALKALI CHEMICALS AND FERTILIZERS LTD. VS. CIT (SUPRA) WAS TOTALLY MISPLACED. THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS BOKARO STEEL LTD. HELD AS UND ER : HELD, DISMISSING THE APPEAL, THAT THE FIRST THREE HEAD S OF INCOME WERE (I) THE RENT CHARGED BY THE ASSESSEE TO ITS CONTRACTORS FOR HOUSING WORKERS AND STAFF EMPLOYED B Y THE CONTRACTOR FOR THE CONSTRUCTION WORK OF THE ASSESSEE INCLUDING CERTAIN AMENITIES GRANTED TO THE STAFF BY THE ASSES SEE, (II) HIRE CHARGES FOR PLANT AND MACHINERY WHICH WAS GIVEN T O THE CONTRACTORS BY THE ASSESSEE FOR USE IN THE CONSTRUC TION WORK OF THE ASSESSEE, AND (II) INTEREST FROM ADVANCES MADE TO THE CONTRACTORS BY THE ASSESSEE FOR THE PURPOSE OF FACI LITATING THE WORK OF CONSTRUCTION. THE ACTIVITIES OF THE ASSESSEE I N CONNECTION WITH ALL THESE THREE RECEIPTS WERE DIRECT LY CONNECTED WITH OR INCIDENTAL TO THE WORK OF CONSTRUCTION OF ITS PLANT UNDERTAKEN BY THE ASSESSEE. THE ADVANCES WHICH THE A SSESSEE MADE TO THE CONTRACTORS TO FACILITATE THE CONSTRUCTI ON ACTIVITY OF PUTTING TOGETHER A VERY LARGE PROJECT WAS AS MUCH TO ENSURE THAT THE WORK OF THE CONTRACTORS PROCEEDED WITHOUT ANY FINANCIAL HITCH AS TO HELP THE CONTRACTORS. THE ARRANG EMENTS WHICH WERE MADE BETWEEN THE ASSESSEE-COMPANY AND THE CONTRACTORS PERTAINING TO THESE THREE RECEIPTS WERE ARRANGEMENTS WHICH WERE INTRINSICALLY CONNECTED WITH THE CONSTRUCTION OF ITS STEEL PLANT. THE RECEIPTS HAD BEEN ADJUSTED AGAINST THE CHARGES PAYABLE TO THE CONTRACTORS AND HAD GONE TO REDUCE THE COST OF CONSTRUCTION. THEY HAD, THEREFORE, BEEN RIGHTLY HELD AS CAPITAL RECEIPTS AND NOT INCOME OF THE ASSESSEE ANY INDEPENDENT SOURCE. 12(II) THE HON'BLE DELHI HIGH COURT IN THE CASE OF INDIAN OIL PANIPAT POWER CONSORTIUM LTD. V ITO 315 ITR 255 (DE LHI) HELD AS UNDER : THE ASSESSEE-COMPANY WAS INCORPORATED IN PURSUANCE O F A JOINT VENTURE ENTERED INTO BETWEEN INDIAN OIL CORPORA TION AND M OF JAPAN TO SET UP A POWER PROJECT. IN ORDER TO EF FECTUATE THE PURPOSE FOR WHICH THE JOINT VENTURE WAS CONCEIVED, SHARE CAPITAL WAS CONTRIBUTED BY THESE TWO CORPORATIONS WHICH INC LUDED RS. 20 CRORES BY WAY OF ADDITIONAL SHARE CAPITAL. THE ASSE SSING OFFICER TREATED THE INTEREST EARNED ON MONIES RECEIV ED AS SHARE CAPITAL BY THE ASSESSEE TEMPORARILY PLACED IN A FIXE D DEPOSIT AWAITING ACQUISITION OF LAND WHICH HAD RUN INTO LEGAL ENTANGLEMENTS ON ACCOUNT OF TITLE AS 'INCOME FROM OTH ER SOURCES'. THE COMMISSIONER (APPEALS) ACCEPTED THE S TAND OF THE ASSES- SEE THAT THE INTEREST WAS IN THE NATURE OF A CAPITAL RECEIPT WHICH WAS LIABLE TO BE SET OFF AGAINST PRE-OPERATIVE EXPENSES. THE TRIBUNAL REVERSED THIS ORDER. ON APPEAL : 15 HELD, ALLOWING THE APPEALS, THAT THE FUNDS IN THE F ORM OF SHARE CAPITAL WERE INFUSED FOR THE SPECIFIC PURPOSE OF AC QUIRING LAND AND THE DEVELOPMENT OF INFRASTRUCTURE. THEREFORE THE INTE REST EARNED ON FUNDS PRIMARILY BROUGHT FOR IN THE BUSINESS COULD NOT BE CLASSIFIED AS 'INCOME FROM OTHER SOURCES. SINCE T HE INCOME WAS EARNED IN A PERIOD PRIOR TO COMMENCEMENT OF BUS INESS IT WAS IN THE NATURE OF A CAPITAL RECEIPT AND WAS REQU IRED TO BE SET OFF AGAINST PRE-OPERATIVE EXPENSES. 13. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF THE ABOVE DECISIONS, IT IS CLEAR THAT THE FUNDS WITH TH E ASSESSEE, EVEN IF TEMPORARILY USED FOR SAVINGS/SHORT TERM DEP OSITS, BUT THE EARNING OF THE INTEREST WERE DIRECTLY CONNECTED WITH WORK OF CONSTRUCTION OF THE PROJECT EMPLOYED BY THE ASSE SSEE. THEREFORE, THE EARNING OF INTEREST COULD NOT BE TRE ATED AS INCOME FROM OTHER SOURCES, SINCE THE INCOME WAS EAR NED IN THE PERIOD PRIOR TO COMMENCEMENT OF THE BUSINESS AN D IT WAS THE NATURE OF CAPITAL RECEIPT AND WAS REQUIRED TO B E SET OFF AGAINST PRE-OPERATIVE EXPENSES. WE, THEREFORE, SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DELETE THE ADDITION OF RS. 83,06,897/-. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST DECEMBER,2014. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31 ST DECEMBER,2014. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH