Riddhi Siddhi Gluco Biols Ltd., Ahmedabad V. The ACIT, Circle-5, Ahmedabad

ITA 913/AHD/2004

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9875 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 15-09-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 24-03-2004
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR SRAR
• Keywords: Capital asset; Depreciation; Additional depreciation; Difference of opinion; Revenue expenditure; Capital expenditure
• Section: 234B; 115JB; 32; 37; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD B BENCH BEFORE SHRI G.D. AGARWAL, VICE-PRESIDENT (AZ) AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER ITA NO.913/AHD/2004 &783/AHD/2006 [ASSTT.YEAR: 2001-02] RIDDHI SIDDHI GLUCO BIOLS LTD. VS- ACIT, CIRCLE -5, MEHTA LODHA & CO. CHARTERED AHMEDABAD ACCOUNTANTS, 105, SAKAR-I, ASHRAM ROAD, AHMEDABAD PAN NO.AABCR3417Q ACIT, CIRCLE-5, -VS- RIDDHI SIDDHI GLUCO BIO LS LTD. AHMEDABAD 701, SAKAR-I, OPP.GANDHIGRAM RLY. STATION, AHMEDABAD ITA NO.2482/AHD/2005 [ASSTT. YEAR:2002-03] A.C.I.T., CIRCEL-5, -VS- RIDDHI SIDDHI GLUCO BIOLS LTD. AHMEDABAD 701, SAKAR-I, OPP. GANDHIGRAM RAILWAY STATION, AHMEDABAD (APPELLANT) (RESPONDENT) REVENUE BY : SHRI ALOK JOHRI, DR SHRI K. MADHUSUDAN, SR-DR ASSESSEE BY: SHRI S.N.SO PARKAR, SR-AR & SMT. URVASHI SHODHAN, AR O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER:- OUT OF THESE THREE APPEALS ONE BY ASSESSEE AND T WO BY REVENUE ARE ARISING OUT OF THE ORDER OF COMMISSIONER OF INC OME-TAX (APPEALS)-XI/53, 138-139/2003-04/2005-06 BY DIFFERENT DATES I.E. 11- 11-2003, 09-01-2006 & 29-09-2005. THE ASSESSMENTS WERE FRAMED BY ACIT, CI RCLE-5, AHMEDABAD ITA NO.913/A/04,783/A/06 & 2482/A/05 A.YS 01-02 & 02-03 RIDDHI SIDDHI GLUCO BIOLS LTD. V. ACIT CIR-3, ABD PAGE 2 U/S.143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDERS OF DIFFERENT DATES 28-03-2003 AND 1 8-03-2005 FOR THE ASSESSMENT YEARS 2001-02 AND 2002-03 RESPECTIVELY. THE PENALTY U/S 271(1)(C) OF THE ACT WAS LEVIED BY ACIT, CIRCLE-3, AHMEDABAD VIDE HIS ORDER DATED 28-03-2003. FIRST WE WILL TAKE UP ASSESSEES APPEAL IN ITA NO.9 13/AHD/2004. 2. THE FIRST ISSUE IN THIS APPEAL OF ASSESSEE IS AG AINST THE ORDER OF CIT(A) CONFIRMING THE DISALLOWANCE OF DEPRECIATION. 3. AT THE OUTSET LD. SR-COUNSEL FOR THE ASSESSEE, S HRI S.N.SOPARKAR STATED THAT HE HAS INSTRUCTIONS FROM THE ASSESSEE N OT TO PRESS THIS ISSUE AND ACCORDINGLY HE IS NOT PRESSING THE SAME. AS THI S ISSUE IS NOT PRESSED BY THE ASSESSEE, THE SAME IS DISMISSED AS NOT PRESSED. 4. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) IN MAKING ADJUSTMENTS IN THE BOOK PROFIT DET ERMINED U/S.115JB OF THE ACT ON THE BASIS OF FORM NO.29B OF THE I.T. RUL ES, 1962. FOR THIS, ASSESSEE HAS RAISED THE FOLLOWING GROUND NO.2 :- 2. THAT THE LEARNED AO HAS ERRED DIN LAW AND FACTS BY MAKING ADJUSTMENT IN THE BOOK PROFIT DETERMINED U/S.115JB OF THE AO. IT SHOULD BE CORRECTLY DETERMINED ON THE BASIS OF FORM NO.29B OF THE INCOME TAX RULES, 1962. 5. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE T HAT THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE-COMPANY HAS WORKED OUT BOOK PROFIT AT RS.9 1,85,102/- U/S.115JB OF THE ACT, AFTER CLAIMING ADDITIONAL DEPRECIATION OF RS.162.35 LAKHS. ACCORDING TO AO, THE ASSESSEE HAS SHOWN LESS BOOK P ROFITS BY THIS AMOUNT OF ADDITIONAL DEPRECIATION RS.1,62,75,755/- AND RED UCED THE VALUE OF ASSETS. THE AO REJECTED THE CLAIM OF THE ASSESSEE AND CIT(A ) ALSO CONFIRMED THE ACTION OF AO IN VIEW OF THE PROVISION OF SECTION 11 5JB EXPLANATION (1)(I), AS INTRODUCED BY THE FINANCE ACT, 2002 W.R.E.F 1-4-200 1. WE FIND THAT WITH THE ITA NO.913/A/04,783/A/06 & 2482/A/05 A.YS 01-02 & 02-03 RIDDHI SIDDHI GLUCO BIOLS LTD. V. ACIT CIR-3, ABD PAGE 3 SUBSTITUTION OF CLAUSE(1) TO EXPLANATION (1) BY FIN ANCE ACT, 2002 W.R.E.F. 1- 4-2001, THERE IS CHANGE IN THE POSITION OF LAW TO T HE EFFECT THAT FOR THE PURPOSE OF COMPUTATION OF BOOK PROFIT THE NET PRO FIT AS SHOWN IN THE PROFIT AND LOSS ACCOUNT FOR THE RELEVANT PREVIOUS YEAR PRE PARED UNDER SUB- SECTION-(2) AS INCREASED BY THE AMOUNT MENTIONED IN CLAUSE(A) TO (I) AND IF ANY AMOUNT REFERRED TO IN CLAUSE (A) TO (I) IS DEBI TED TO PROFIT AND LOSS ACCOUNT AND AS REDUCED BY THE AMOUNT WITHDRAWN FROM RESERVE OR PROVISION, IF ANY SUCH AMOUNT IS CREDITED TO THE PR OFIT AND LOSS ACCOUNT. IT ALSO PROVIDES THAT THE AMOUNTS WITHDRAWN FROM RESER VES IN THE NATURE OF REVALUATION RESERVES, IF CREDITED TO THE PROFIT AND LOSS ACCOUNT, SHALL NOT BE REDUCED FROM THE BOOK PROFIT. IT ALSO PROVIDES THAT ANY AMOUNT WITHDRAWN FROM A RESERVE OR PROVISION CREATED ON OR AFTER 1 ST DAY OF APRIL, 1997, AND THE PROFIT AND LOSS ACCOUNT SHALL NOT REDUCED FROM THE BOOK PROFIT, UNLESS THE BOOK PROFIT IN THE YEAR OF CREATION OF SUCH RESERVE S OR PROVISIONS WERE INCREASED BY THE AMOUNT TRANSFERRED TO SUCH RESERVE S OR PROVISIONS AT THAT TIME. THE RELEVANT SUB-CLAUSE (I) TO EXPLANATION-I OF SECTION 115JB READS AS UNDER:- [(I) THE AMOUNT WITHDRAWN FROM ANY RESERVE OR PROVI SION (EXCLUDING A RESERVE CREATED BEFORE THE 1 ST DAY OF APRIL, 1997 OTHERWISE THAN BY WAY OF A DEBIT TO THE PROFIT AND LOSS ACCOUNT), IF ANY SUCH AMOUNTS CREDITED TO THE PROFIT AND LOSS ACCOUNT: PROVIDED THAT WHERE THIS SECTION IS APPLICABLE TO AN ASSESS EE IN ANY PREVIOUS YEAR, THE AMOUNT WITHDRAWN FROM RESERVES C REATED OR PROVISIONS MADE IN A PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING ON OR AFTER THE 1 ST DAY OF APRIL, 1997 SHALL NOT BE REDUCED FROM THE BOOK PROFIT UNLESS THE BOOK PROFIT OF SUCH YEAR HAS BEEN INCREASED BY THOSE RESERVES OR PROVISIONS (OUT OF WHICH THE SAID AMOUNT WAS WITHDRAWN) UNDER THIS EXPLANATION OR EXP LANATION BELOW THE SECOND PROVISO TO SECTION 115JA, AS THE CASE MA Y BE; OR] IN VIEW OF THE ABOVE CLEAR PROVISION, WE ARE OF THE VIEW THAT THE RESERVE WAS CREDITED AFTER 1-4-1997 AND BOOK PROFIT WAS NOT INC REASED FOR THE YEAR OF CREATION, SO THE AMOUNT CANNOT BE REDUCED FROM THE BOOK PROFIT IN THE YEAR UNDER CONSIDERATION. HENCE, BOTH THE LOWER AUTHORIT IES HAVE RIGHTLY MADE ITA NO.913/A/04,783/A/06 & 2482/A/05 A.YS 01-02 & 02-03 RIDDHI SIDDHI GLUCO BIOLS LTD. V. ACIT CIR-3, ABD PAGE 4 ADDITION OF ADDITIONAL DEPRECIATION CLAIMED BY THE ASSESSEE IN THE BOOK PROFIT FOR COMPUTATION OF INCOME U/S. 115JB OF THE ACT. ACCORDINGLY, THIS ISSUE OF THE ASSESSEES APPEAL IS DISMISSED. 6. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) IN NOT ALLOWING THE SET OFF OF CARRY FORWARD LOSS/DEPRECIATION OF M/S.K.G. GLUCO BOILS LTD. FOR THIS, ASSESSEE HAS RA ISED THE FOLLOWING GROUND NO.3 :- 3. THAT SET OFF OF CARRIED FORWARD LOSS/DEPRECIATI ON OF M/S.K.G. GLUCO BIOLS LIMITED AND OF THE APPELLANT COMPANY SHALL GI VEN. 7. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE STATE D THAT THIS ISSUE IS COVERED BY THE TRIBUNALS DECISION IN ASSESSEES OW N CASE FOR ASSESSMENT YEAR 1997-98 IN ITA NO.404/AHD/2002 , WHEREIN THE TRIBUNAL VIDE PARA-63 AT PAGE-22 HAS SET ASIDE THE ISSUE TO THE FILE OF A SSESSING OFFICER, WITH THE DIRECTION REPRODUCED AS UNDER:- 63. IN PARAGRAPH 13 OF THIS ORDER, WE HAVE UPHOLD THE IMPUGNED ORDER OF THE LEARNED CIT(A) THAT THE RS.620 LAKHS O F ADDITION TO PLANT AND MACHINERY ARE THE NATURE OF SELF GENERATED ASSE TS. FOR ALLOWANCE OF DEPRECIATION ON THE SEGREGATED ASSETS, ASSESSEE IS REQUIRED TO FULFILL THE CONDITIONS LAID DOWN AND SECTION 32 OF THE I.T. ACT. ONE OF THE CONDITIONS IS THAT THE ASSET SHOULD BE US FOR T HE PURPOSE OF BUSINESS OR PROFESSION. WE ACCORDINGLY RESTORE THIS ISSUE TO THE FILE OF AO WITH THE DIRECTION THAT THE AO WILL EXAMINE THE SAME KEEPING IN VIEW PROVISIONS CONTAINED IN SECTION 32 OF THE IT A CT AND ALLOW THE DEPRECIATION IN ACCORDANCE WITH THE LAW. THE LD. DR HAS NOT OBJECTED THE SETTING ASIDE OF TH IS ISSUE. IN VIEW OF THE TRIBUNALS DECISION IN ASSESSEES OWN CASES (SUPRA) , WE FIND THAT EVEN THE CIT(A) HAS SET ASIDE THIS ISSUE TO THE FILE OF ASSE SSING OFFICER VIDE PARA-6.1 OF HIS APPELLATE ORDER AS UNDER:- 6.1 HAVING CONSIDERED THE FACTS OF THE CASE AND SU BMISSION OF THE A.R., THE ASSESSING OFFICER IS DIRECTED TO VERIFY F ROM THE CASE RECORDS AND ALLOW CORRECT SET OFF OF UNABSORBED CARRY FORWA RD LOSSES/DEPRECIATION AS PER PROVISIONS OF THE I.T. A CT, WHILE GIVING EFFECT TO THIS ORDER. ITA NO.913/A/04,783/A/06 & 2482/A/05 A.YS 01-02 & 02-03 RIDDHI SIDDHI GLUCO BIOLS LTD. V. ACIT CIR-3, ABD PAGE 5 WE FURTHER DIRECT THE ASSESSING OFFICER TO DECIDE T HIS ISSUE IN TERMS OF TRIBUNALS DECISION AS REFERRED TO ABOVE IN ASSESSE ES OWN CASE. ACCORDINGLY, THIS ISSUE OF THE ASSESSEES APPEAL IS SET ASIDE TO THE FILE OF ASSESSING OFFICER AND ALLOWED FOR STATISTICAL PURPO SES. 8. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) IN CONFIRMING THE CHARGING OF INTEREST U/S.2 34B AND 234C ON THE BOOK PROFIT COMPUTED U/S.115JB OF THE ACT. FOR THIS , ASSESSEE HAS RAISED THE FOLLOWING GROUND NO.4 :- 4. THAT THERE IS TAXATION ON THE BOOK PROFIT U/S.1 15JB OF THE ACT AND THEREFORE INTEREST UNDER SECTION 234B AND 234C SHAL L NOT LEVIED AND IT SHOULD BE DELETED IN FULL. 9. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE FAIRL Y CONCEDED THAT THIS ISSUE IS COVERED IN FAVOUR OF REVENUE AND AGAINST T HE ASSESSEE IN ASSESSEES OWN CASE IN ITA NO.440/AHD/2002 IN PARA-15 AS UNDER:- 15. IT IS PERTINENT TO NOTE THAT THE ISSUE WHETHER SHORT PAYMENT OF ADVANCE TAX WHEN INCOME IS COMPUTED TAX UNDER SECTI ON 115JA OF THE I.T. ACT IS LIABLE FOR PAYMENT OF INTEREST UNDE R U/S.234B AND 234C IS SUBJECT-MATTER OF CONFLICTING INTERPRETATIONS BY VARIOUS HIGH COURTS. THOUGH THE JUDGMENT OF HONBLE GUJARAT HIGH COURT I N FAVOUR OF ASSESSEE IS AVAILABLE WHEN INCOME IS COMPUTED UNDER SECTION 115J OF THE INCOME-TAX ACT, BUT NO DECISION OF GUJARAT H IGH COURT IS AVAILABLE WHEN INCOME IS COMPUTED U/S.115JA OF THE I.T. ACT. HONBLE BOMBAY HIGH COURT RECENTLY IN THE CASE OF SNOWCHEM INDIA LTD. VS. DCIT (2009) 221 CTR (BOM) 591 TOOK THE VIEW THAT INTERES T U/S.234B AND C IS NOT LEVIABLE WHEN INCOME IS COMPUTED UNDER SECTION 115JA OF THE I.T. ACT. 1961. ITAT PUNE BENCH IN THE CASE OF ASSTT. CIT VS. AAURANGABAD HOLIDAY RESORTS (P) AFTER CONSIDERING J UDGMENT OF HONABLE BOMBAY HIGH COURT IN THE CASE OF GODAVARI DEVI SARAFS 113 ITR 589 (BOM) AND THANA ELECTRICITY CO. LTDS 206 I TR 727 (BOM) IN PARA 14 ON PAGE 6 OF THE REPORT OBSERVED THAT ONE CANNOT B E OBLIVIOUS TO THE FACT THAT AN INTERPRETATION IS IND EED POSSIBLE TO THE EFFECT THAT EVEN NON-JURISDICTIONAL HIGH COURT JUDG MENT IS BINDING ON TRIBUNAL. THE NON-JURISDICTIONAL HIGH COURT JUDGMEN T IN FAVOUR OF THE ASSESSEE SHOULD BE FOLLOWED FOLLOWING THE SUPREME C OURT JUDGMENT IN THE CASE OF CASE OF CIT VS. VEGETABLE PRODUCTS L TD. 88 ITR 192, WHEN TWO INTERPRETATION WAS POSSIBLE, ONE IN FAVOUR OF THE ASSESSEE MUST BE ADOPTED. BE THAT AS IT MAY, RECENTLY IN THE CASE OF M/S KENEL OIL & EXPORTS IND. LTD IN ITA NO.2667/A/2002 FOR THE ASSESSMENT ITA NO.913/A/04,783/A/06 & 2482/A/05 A.YS 01-02 & 02-03 RIDDHI SIDDHI GLUCO BIOLS LTD. V. ACIT CIR-3, ABD PAGE 6 YEAR 1998-99 ON ACCOUNT OF DIFFERENCE OF OPINION AM ONGST US REGARDING LEVY OF INTEREST WHEN INCOME IS COMPUTED UNDER SECTION 234B AND 234C WHEN INCOME IS COMPUTED UNDER SECTION 115JA OF THE ACT, THE MATTER IS REFERRED UNDER SECTION 255(4 ) OF THE I.T. ACT TO HONBLE PRESIDENT AND THE OPINION OF 3 RD MEMBER IS AWAITED. THEREFORE, IN ORDER, AVOID MULTIPLICITY OF THE PROC EEDINGS, WE SET ASIDE THE IMPUGNED ORDER OF THE LEARNED CIT(A) DELETING T HE INTEREST AND RESTORE THIS ISSUE TO THE INTEREST AND RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE SAME AFRESH AFTER T HE DECISION/OPINION OF 3 RD MEMBER IN THE ABOVE REFERRED CASE OR THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT, IF A NY, AVAILABLE AT THE RELEVANT TIME. ACCORDINGLY, THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSE ONLY. AS THE ISSUE IS SQUARELY COVERED IN FAVOUR OF REVEN UE AND AGAINST THE ASSESSEE, WE DISMISS THIS ISSUE OF ASSESSEES APPEA L. COMING TO REVENUES APPEAL IN ITA NO.783/AHD/2006. 10. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) IN DELETING THE PENALTY LEVIED BY ASSESSING OFFICER U/S.271(1)(C) OF THE ACT. FOR THIS, REVENUE HAS RAISED THE EFFECTIVE GROUND NO.1 :- 1. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XI , AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENAL TY OF RS.62,50,765/- LEVIED U/S.271(1) OF THE I.T. ACT. 11. AS THE FACTS ARE ALREADY MENTIONED IN QUANTUM A PPEAL IN ITA NO.913/AHD/2004 , THE FACTS IN BRIEF ARE AGAIN NARRATED FOR THE SAK E OF CLARITY. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE-COMPANY HAS WORKED OUT BOOK PROFIT AT RS.91,85,102/- U/S.115JB OF THE ACT, AFTER CLAIMING ADDITIONAL DEPRECIATION OF RS.162.35 LAKHS. ACCORDING TO AO, THE ASSESSEE H AS SHOWN LESS BOOK PROFITS BY THIS AMOUNT OF ADDITIONAL DEPRECIATION R S.1,62,75,755/- AND REDUCED THE VALUE OF ASSETS. THE AO REJECTED THE CL AIM OF THE ASSESSEE AND CIT(A) ALSO CONFIRMED THE ACTION OF AO IN VIEW OF T HE PROVISION OF SECTION 115JB EXPLANATION (1)(I), AS INTRODUCED BY THE FINANCE ACT, 2002 W.R .E.F 1- 4-2001.THE ASSESSING OFFICER ON THE DISALLOWANCE OF RS.1,62,35,755/- ON ACCOUNT OF AMOUNT WITHDRAWN BY THE ASSESSEE FROM G ENERAL RESERVE FOR ITA NO.913/A/04,783/A/06 & 2482/A/05 A.YS 01-02 & 02-03 RIDDHI SIDDHI GLUCO BIOLS LTD. V. ACIT CIR-3, ABD PAGE 7 ARRIVING AT BOOK PROFIT, LEVIED PENALTY U/S.271(1) . THE AO LEVIED THE PENALTY AND ASSESSEE CONTENDED BEFORE CIT(A) THAT ADJUSTMEN T MADE IN THE BOOK PROFIT IS NOT CONCEALMENT OF INCOME AS THE BOOK PRO FIT HAS BEEN DETERMINED ON THE BASIS OF FORM NO.29B ISSUED BY CHARTERED ACC OUNTANT (CA IN SHORT) AND ON THAT BASIS THE ASSESSEE-COMPANY HAS PAID MAT TAX. ACCORDING TO ASSESSEE, IT IS A BONA FIDE MISTAKE, WHICH DOES NOT ATTRACT PENALTY U/S.271(1)(C) OF THE ACT. ACCORDING TO ASSESSEE, TH ERE IS NO CONCEALMENT OF ANY PARTICULARS OF INCOME AND THE ISSUE UNDER CONSI DERATION IS DEBATABLE ONE, FOR WHICH NO PENALTY U/S.271(1)(C) OF THE ACT IS TO BE LEVIED. THE CIT(A) DELETED THE PENALTY THAT ASSESSEE HAS FILED FULL PA RTICULARS REGARDING REDUCTION OF GENERAL RESERVE AT RS.1,62,35,755/- AN D THERE IS NO INTENTION ON THE PART OF ASSESSEE TO WITHHOLD ANY INFORMATION OR TO CONCEAL THE PARTICULARS OF INCOME. ACCORDING TO CIT(A), ASSESSE E HAS DISCLOSED ALL THE NECESSARY FACTS FOR THE ASSESSMENT IN THE RETURN OF INCOME, WHICH IS SUPPORTED BY THE AUDITED ACCOUNTS. ACCORDINGLY, HE DELETED THE PENALTY. AGGRIEVED, REVENUE CAME IN APPEAL BEFORE TRIBUNAL. 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE TH ROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT ASSESSING O FFICER HAS LEVIED THE PENALTY ON THE REDUCTION OF BOOK PROFIT BY THE AMOU NT OF GENERAL RESERVE FOR ARRIVING AT REDUCE BOOK PROFIT BY THE AMOUNT OF RS. 1,62,35,755/-. LD. SR-DR STATED THAT THERE IS NO QUESTION OF ANY MENS REA IN THE LEVY OF PENALTY AS HELD BY CIT(A). WE FIND FROM THE ORDER OF CIT(A) TH AT THE PENALTY IS DELETED FIRST ON THE BASIS THAT THE ADJUSTMENT MADE IN THE BOOK PROFIT IS NOT A CONCEALMENT OF INCOME AS THE BOOK PROFIT HAS BEEN D ETERMINED ON THE BASIS OF A REPORT FROM CA IN FORM NO.29B WHICH CONTAINS D ETAILS. THE ASSESSEE HAS DISCLOSED COMPLETE PARTICULARS AND NOT PAYING M AT TAX ON THE RESERVE AMOUNT WITHDRAWN BY ASSESSEE IS ON THE BASIS OF CER TIFICATE ISSUED BY THE CA FOR MAT COMPUTATION U/S.115JB OF THE ACT. WE FIN D THAT THE EXPLANATION OF THE ASSESSEE IS A BONA FIDE EXPLANATION AS THE A SSESSEE WAS ACTING ON THE ADVISE OF CA AND MOREOVER, ASSESSEE HAS FILED C OMPLETE DETAILS FOR ITA NO.913/A/04,783/A/06 & 2482/A/05 A.YS 01-02 & 02-03 RIDDHI SIDDHI GLUCO BIOLS LTD. V. ACIT CIR-3, ABD PAGE 8 COMPUTATION OF ITS BOOK PROFIT IN FORM NO.29B. LD. COUNSEL FOR ASSESSEE PLACED RELIANCE ON THE CASE LAW OF HONBLE APEX COU RT IN THE CASE OF CIT V. RELIANCE PETROPRODUCTS PVT. LTD. (2010) 322 ITR 174 (SC), WHEREIN THE HONBLE APEX COURT HAS HELD :- WE ARE NOT CONCERNED IN THE PRESENT CASE WITH THE MENS REA. HOWEVER, WE HAVE TO ONLY SEE AS TO WHETHER IN THIS CASE, AS A M ATTER OF FACT, THE ASSESSEE HAS GIVEN INACCURATE PARTICULARS. IN WEBSTERS DICTIONARY, THE WORD INACCURATE HAS BEEN DEFINED AS: NOT ACCURATE, NOT EXACT OR CORRECT ; NOT ACCORDING TO TRUTH ERRONEOUS AS AN INACCURATE STATEMENT, COPY OR TRA NSCRIPT. WE HAVE ALREADY SEEN THE MEANING OF THE WORD PARTI CULARS IN THE EARLIER PART OF THIS JUDGMENT. READING THE WORDS IN CONJUNC TION, THEY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT A CCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. WE MU ST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT ANY DET AILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT O R ERRONEOUS OR FALSE. SUCH NOT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. A MERE MAKING O F THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO F URNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. S UCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. 13. WE FIND FROM THE ABOVE FACTS THAT THE ASSESSEE HAS FILED COMPUTATION OF INCOME ON THE BASIS OF AUDITORS CERTIFICATE IN FOR M NO.29B UNDER IT RULES, 1962 COMPUTING BOOK PROFIT UNDER SECTION 115JB OF THE ACT. BEFORE US, THE REVENUE COULD NOT SHOW THAT THE MISTAKE BY THE CA WAS NOT B ONA FIDE AND MERE FACT THAT CERTIFICATE ISSUED BY THE CA WAS NOT IN ACCORDANCE WITH FORM NO.29B OF THE IT RULES, 62, WHICH IS NOT ENOUGH TO HOLD THAT THE MIS TAKE WAS NOT BONA FIDE. IN OUR VIEW, AS FAR AS THE ASSESSEES CONCERNED, NO MALA F IDE CAN BE ATTRIBUTED TO TREAT AND CLAIM OF DEDUCTION OF ADDITIONAL DEPRECIATION W AS BASED ON CERTIFICATED ISSUED BY CA WITH WHOM NO COLLUSION OF THE ASSESSEE WAS ES TABLISHED. ACCORDINGLY, THE FINDING RECORDED BY CIT(A) DID NOT LACK BONA FIDES AND HIS ORDER CANCELING THE PENALTY WAS CLEARLY JUSTIFIED. ACCORDINGLY, WE CONF IRM THE ORDER OF CIT(A) DELETING THE PENALTY AND THIS ISSUE OF REVENUES APPEAL IS D ISMISSED. ITA NO.913/A/04,783/A/06 & 2482/A/05 A.YS 01-02 & 02-03 RIDDHI SIDDHI GLUCO BIOLS LTD. V. ACIT CIR-3, ABD PAGE 9 COMING TO REVENUES APPEAL IN ITA NO.2482/AHD/2005. 14. THE ISSUE NO.1 AND 2 IN THIS APPEAL OF REVENUE IS AGAINST THE ORDER OF CIT(A) IN DELETING THE ADDITIONS MADE ON ACCOUNT OF PRE-OPERATIVE INTEREST TREATED AS CAPITAL IN NATURE. FOR THIS, RE VENUE HAS RAISED THE FOLLOWING GROUND NO.1 AND 2 :- 1. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XI , AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDIT ION OF MADE BY THE A.O OF RS.3,21,34,149/- ON PRE-OP INTEREST BEING TR EATED AS CAPITAL EXPENDITURE. 2. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XI, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING, THE ADDI TION OF RS.1,68,72,943/- ON ACCOUNT OF PRE-OP EXPENSES BEI NG TREATED AS CAPITAL EXPENSES AND DIRECTED THE A.O TO ALLOW THE SAME AS REVENUE EXPENSES. 15. THE BRIEF FACTS LEADING TO THE ABOVE TWO ISSUES ARE THAT THE ASSESSEE HAS CLAIMED EXPENSES AT RS.3,21,34,149/- AND A SUM OF RS.1,68,72,943/- AS PRE-OPERATIVE EXPENSES AS UNDER:- I) TRAVELING EXPENSES II) BANK CHARGES III) ADMINISTRATIVE EXPENSES IV) INAUGURATION EXPENSES V) ERECTION & COMMISSIONING VI) INSPECTION CHARGES VII) POSTAGES VIII) UP FRONT FEES IX) INSURANCE X) LEGAL & PROFESSIONAL CHARGES XI) STORES & CONSUMABLES XII) DESIGN CHARGES XIII) TRANSPORTATION CHARGES 16 THE ASSESSING OFFICER HAS MADE ABOVE ADDITIONS R ELYING ON THE EARLIER YEARS ORDER FOR AND FROM ASSESSMENT YEARS 1 997-98 TO 2000-01 AS THE LD. COUNSEL FOR THE ASSESSEE BEFORE US STATED T HAT ON BOTH ISSUES, TRIBUNAL IN ITA NO.440/AHD/2002 FOR ASSESSMENT YEAR 1997-98 HAS ALLOWED THE CLAIM OF ASSESSEE VIDE PARA NO.7 & 8 AS UNDER:- 7. BRIEFLY STATED THE FACT ARE THAT ASSESSEE HAD C LAIMED IN THE STATEMENT OF INCOME, EXPENDITURE OF RS.7679481/- WH ICH WAS TREATED ITA NO.913/A/04,783/A/06 & 2482/A/05 A.YS 01-02 & 02-03 RIDDHI SIDDHI GLUCO BIOLS LTD. V. ACIT CIR-3, ABD PAGE 10 AS CAPITAL EXPENDITURE AND ADDED IN THE COST OF ASS ETS BY THE ASSESSEE ITSELF. THE DETAILS OF THE FOLLOWING REVEN UE EXPENDITURE CLAIMED IN THE STATEMENT OF INCOME WERE SUBMITTED B Y THE ASSESSEE VIDE ITS SUBMISSION DATED 8.2.2000 AS UNDER: CONSUMABLES STORES AND SPARES 696442 SALARY AND WAGES 1023339 TRAVELING EXPENSES 84332 TELEPHONE AND POSTAGE 140056 INTEREST 5507312 PROFESSIONAL FEES 228000 7679481 THE ASSESSEE CLAIMED THE INTEREST EXPENDITURE TO BE REVENUE IN NATURE UNDER SECTION 36(1)(III) OF THE ACT, WHEREAS THE AO TREATED THE SAME TO BE OF CREDIT EXPENDITURE AND ACCORDINGLY AD DITION OF RS.7679481. ON APPEAL, IN THE IMPUGNED ORDER, THE L EARNED CIT(A) RELYING ON THE DECISION OF HONBLE GUJARAT HIGH COU RT IN THE CASE OF CIT V. CORE HEALTH CARE LIMITED [251 ITR 61 (GUJ)] (AFFIRMED BY HONBLE SUPREME COURT REPORTED IN 298 ITR 194 (SC)] HELD THE PRE- OPERATIVE INTEREST IS ALLOWABLE AS REVENUE EXPENDIT URE UNDER SECTION 36(1)(III) OF THE ACT. FURTHER RELYING ON THE DECIS ION OF ITAT, AHMEDABAD THE CASE OF UNITED PHOSPHOROUS LIMITED VS JCIT REPORTED IN 73 TTJ (AHMEDABAD) 404 (2001), HELD THA T THAT TRAVELING AND SALARY & WAGES EXPENSES PERTAINING NEW UNITS/PR OJECTS WERE ALLOWED AS REVENUE EXPENDITURE. ACCORDINGLY, THE LE ARNED CIT(A) HELD THAT INTEREST EXPENSE OF RS.5507312, SALARY AND WAG E EXPENSES OF RS.1023339 AND TRAVELING EXPENSES OF RS.84332 ARE A LLOWABLE REVENUE EXPENDITURE AND ACCORDINGLY HE DIRECTED THE ASSESSING OFFICER TO ALLOW RS.6614983 AS REVENUE EXPENDITURE. THE BALANCE AMOUNT OF RS.1148830/- RELATING TO EXPENDITURE ON C ONSUMABLE STORES AND SPARES, TELEPHONE & POSTAGE AND PROFESSI ONAL FEES WAS TREATED AS CAPITAL AND ACTION OF ASSESSING OFFICER FOR THE DISALLOWANCE MADE FOR THE BALANCE WAS CONFIRMED. THE AO WAS ALSO DIRECTED TO WITHDRAW ANY DEPRECIATION ALLOWED ON RS.6614983 AND CALCULATE AND ALLOW DEPRECIATION ON RS.1148830, IF NOT ALLOWED. 8. HAVING HEARD BOTH SIDES, WE ARE FULL AGREEMENT W ITH THE VIEW TAKEN BY THE LEARNED CIT(A) IN THIS REGARD BY FOLLOWING THE JUDICIAL PRONOUNCEMENTS AS REFERRED TO IN THE APPELLATE ORDE R. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE IMPUGNED ORDER OF THE LEARNED CIT(A) IN ALLOWING THE EXPENDITURES ON INTEREST, SALARY AN D WAGES, TRAVELING AND AS SUCH, WE UPHOLD THE SAME AND DISMISS GROUND NOS. II AND III OF THE REVENUE. ITA NO.913/A/04,783/A/06 & 2482/A/05 A.YS 01-02 & 02-03 RIDDHI SIDDHI GLUCO BIOLS LTD. V. ACIT CIR-3, ABD PAGE 11 17. AND AS REGARDS INTEREST THE TRIBUNAL HAS ALLOWE D THE ISSUE IN PARA-54 AS UNDER:- 54. HEARD BOTH PARTIES AND PERUSED THE RECORD. THE RE IS NO DISPUTE OF THE FACT THAT THE ASSESSEE COMPANY HAD DEBITED P RE-OPERATIVE INTEREST EXPENSES OF RS.80,00,000/- FOR EXPANSION O F BUSINESS FOR THE YEAR AND IT HAD BEEN TREATED AS REVENUE EXPENSES IN THE ACCOUNT SPECIFICALLY PREPARED FOR SEC. 115JA OF THE ACT. IT IS PERTINENT TO NOTE THAT WE HAVE ALREADY DECIDED SIMILAR ISSUE IN PARAG RAPHS 7 AND 8 OF THIS ORDER IN FAVOUR OF THE ASSESSEE FOLLOWING THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT V. CORE HEALTH CARE LIMITED [251 ITR 61 (GUJ)] [(AFFIRMED BY HONBLE SUPREME CO URT REPORTED IN 298 ITR 194 (SC)] HELD THAT PRE-OPERATIVE INTEREST IS ALLOWABLE AS REVENUE EXPENDITURE UNDER SECTION 36(1)(III) OF THE ACT. WE, THEREFORE, UPHOLD THE IMPUGNED ORDER OF THE LEARNED CIT(A) AND DISMISS GROUND NO.1 OF THE REVENUE. LD. CIT-DR REFERRED TO THE DECISION OF HONBLE APEX COURT IN THE CASE OF CIT V. SRI MANGAYARKARASI MILLS P. LTD. (2009) 315 ITR 114 (SC) AND PARTICULARLY REFERRED TO THE FINDINGS OF HONBLE APEX COURT IN PAGE-124 AS UNDER:- IT IS CLEAR ON RECORD THAT THE ASSESSEE HAS SOUGHT TO TREAT THE SAID EXPENDITURE DIFFERENTLY FOR THE PURPOSES OF COMPUTI NG ITS PROFIT AND FOR THE PURPOSE OF PAYMENT OF INCOME-TAX. THE SAID EXPE NDITURE HAS BEEN TREATED AS AND TO THE EXISTING ASSETS IN THE F ORMER AND AS REVENUE EXPENDITURE IN THE LATTER. THOUGH ACCOUNTIN G PRACTICES MAY NOT BE THE BEST GUIDE IN DETERMINING THE NATURE OF EXPENDITURE, IN THIS CASE THEY ARE INDICATIVE OF WHAT THE ASSESSEE ITSEL F THOUGHT OF THE EXPENDITURE IT MADE ON REPLACEMENT OF MACHINERY AND THAT THE CLAIM FOR DEDUCTION UNDER THE ACT WAS MADE MERELY TO DIMI NISH THE TAX BURDEN, AND NOT UNDER THE BELIEF THAT IT WAS ACTUAL LY REVENUE EXPENDITURE. LD. CIT-DR FURTHER STATED THAT ASSESSING OFFICER HA S RIGHTLY DISALLOWED THE PRE-OPERATIVE EXPENSES ON ACCOUNT OF VARIOUS ITEMS INCLUDING INTEREST. ON THE OTHER HAND, LD. COUNSEL FOR ASSESSEE, SHRI SOPA RKAR STATED THAT THE ISSUE HAS BEEN DELIBERATELY CONSIDERED BY HONBLE S UPREME COURT IN THE CASE OF DCIT V. CORE HEALTH CARE LTD. (2008) 298 ITR 194 (SC) WHEREIN IT IS HELD AS UNDER:- INTEREST ON MONEYS BORROWED FOR THE PURPOSES OF BU SINESS IS A NECESSARY ITEM OF EXPENDITURE IN A BUSINESS. FOR ALLOWANCE O F A CLAIM FOR DEDUCTION OF INTEREST UNDER THE SAID SECTION, ALL THAT IS NECESS ARY IS THAT, FIRSTLY, THE MONEY, I.E., CAPITAL, MUST HAVE BEEN BORROWED BY TH E ASSESSEE ; SECONDLY, ITA NO.913/A/04,783/A/06 & 2482/A/05 A.YS 01-02 & 02-03 RIDDHI SIDDHI GLUCO BIOLS LTD. V. ACIT CIR-3, ABD PAGE 12 IT MUST HAVE BEEN BORROWED FOR THE PURPOSE OF BUSIN ESS ; AND, THIRDLY, THE ASSESSEE MUST HAVE PAID INTEREST ON THE BORROWED AM OUNT (SEE CALICO DYEING AND PRINTING WORKS V. CIT [1958] 34 ITR 265 (BOM). ALL THAT IS GERMANE IS : WHETHER THE BORROWING WAS, OR WAS NOT, FOR THE PURPOSE OF BUSINESS. THE EXPRESSION FOR THE PURPOSE OF BUSINE SS OCCURRING IN SECTION 36(1)(III) INDICATES THAT ONCE THE TEST OF FOR THE PURPOSE OF BUSINESS IS SATISFIED IN RESPECT OF THE CAPITAL BORROWED, THE A SSESSEE WOULD BE ENTITLED TO DEDUCTION UNDER SECTION 36(1)(III) OF THE ACT. THIS PROVISION MAKES NO DISTINCTION BETWEEN MONEY BORROWED TO ACQUIRE A CAP ITAL ASSET OR A REVENUE ASSET. ALL THAT THE SECTION REQUIRES IS THAT THE ASSESSEE MUST BORROW CAPITAL AND THE PURPOSE OF THE BORROWING MUST BE FOR BUSINESS WHICH IS CARRIED ON BY THE ASSESSEE IN THE YEAR OF ACCOUNT. WHAT CLAUSE (III) EMPHASIZES IS THE USER OF THE CAPITAL AND NOT THE USER OF THE ASSET WHICH COM ES INTO EXISTENCE AS A RESULT OF THE BORROWED CAPITAL UNLIKE SECTION 37 WH ICH EXPRESSLY EXCLUDES AN EXPENSE OF A CAPITAL NATURE. THE LEGISLATURE HA S, THERE4FORE, MADE NO DISTINCTION IN SECTION 36(1)(III) BETWEEN CAPITAL BORROWED FOR A REVENUE PURPOSE AND CAPITAL BORROWED FOR A CAPITAL PURPOS E. AN ASSESSEE IS ENTITLED TO CLAIM INTEREST PAID ON BORROWED CAPITAL PROVIDED THAT CAPITAL IS USED FOR BUSINESS PURPOSE IRRESPECTIVE OF WHAT MAY BE THE RESULT OF USING THE CAPITAL WHICH THE ASSESSEE HAS BORROWED. FURTH ER, THE WORDS ACTUAL COST DO NOT FIND PLACE IN SECTION 36(1)(III) OF TH E 1961 ACT WHICH OTHERWISE FIND PLACE IN SECTIONS 32, 32A, ETC., OF THE 1961 A CT. THE EXPRESSION ACTUAL COST IS DEFINED IN SECTION 43(1) OF THE 1961 ACT W HICH IS ESSENTIALLY A DEFINITION SECTION WHICH IS SUBJECT TO THE CONTEXT TO THE CONTRARY. 18. AND HE ALSO REFERRED TO THE CASE LAWS IN THE CA SE OF TUTICORIN ALKALI CHEMICALS AND FERTILIZERS LTD. V. CIT (1997) 227 ITR 172 (SC); IN THE CASE OF CIT V. ALEMBIC GLASS INDUSTRIES LTD. (1976) 103 ITR 715 (GUJ),WHEREIN HONBLE JURISDICTIONAL HIGH COURT HAS HELD AS UNDER:- SECTION 36(1)(III) OF THE INCOME-TAX ACT, 1961, HA S TO BE READ ON ITS OWN TERMS; IT IS A CODE BY ITSELF. IT MAKES NO DISTINCT ION BETWEEN MONEY BORROWED TO ACQUIRE A CAPITAL ASSET OR A REVENUE AS SET. ALL THAT THE SECTION REQUIRES IS THAT THE ASSESSEE MUST BORROW CAPITAL A ND THE PURPOSE OF THE BORROWING MUST BE FOR BUSINESS WHICH IS CARRIED ON BY THE ASSESSEE IN THE YEAR OF ACCOUNT. UNLIKE SECTION 37 WHICH EXPRESSLY EXCLUDES AN EXPENSE OF A CAPITAL NATURE, SECTION 36(1)(III) EMPHASIZES THE USER OF THE CAPITAL AND NOT THE USER OF THE ASSET WHICH COMES INTO EXISTENC E AS A RESULT OF THE BORROWED CAPITAL. THE LEGISLATURE HAS, THEREFORE, M ADE NO DISTINCTION IN SECTION 36(1)((III) BETWEEN CAPITAL BORROWED FOR A REVENUE PURPOSE AND CAPITAL BORROWED FOR A CAPITAL PURPOSE:. AN ASSES SEE IS ENTITLED TO CLAIM INTEREST PAID ON BORROWED CAPITAL PROVIDED THAT THE CAPITAL IS USED FOR BUSINESS PURPOSE IRRESPECTIVE OF WHAT MAY BE THE RE SULT OF USING THE CAPITAL WHICH THE ASSESSEE HAS BORROWED. ACTUAL COST OF AN ASSET HAS NO RELEVANCY IN RELATION TO SECTION 36(1)(III). ITA NO.913/A/04,783/A/06 & 2482/A/05 A.YS 01-02 & 02-03 RIDDHI SIDDHI GLUCO BIOLS LTD. V. ACIT CIR-3, ABD PAGE 13 THE PROVISO INSERTED IN SECTION 36(1)(IIII) BY THE FINANCE ACT, 2003, WITH EFFECT FROM APRIL 1,2004, WILL OPERATE PROSPECTIVEL Y. 19. WE FIND THAT THIS ISSUE OF PRE-OPERATIVE EXPENS ES ON ACCOUNT OF INTEREST AND OTHER EXPENSES IS FULLY COVERED BY THE HONBLE APEX COURTS JUDGMENT AND ALSO IN ASSESSEES OWN CASE BY TRIBUNALS ORDER IN ASSESSEE S EARLIER YEARS CITED (SUPRA) AS THE ISSUE IS COVERED BY THE HONBLE APEX COURTS DECISION IN THE CASE OF CORE HEALTH CARE LTD. (SUPRA). RESPECTFULLY FOLLOWING THE JUDGMENT OF H ONBLE APEX COURT, WE UPHOLD THE ORDER OF CIT(A) AND THIS ISSUE OF THE REVENUES APPEAL IS DISMISSED. 20. THE NEXT ISSUE IN THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) IN DIRECTING THE ASSESSING OFFICER NOT TO IN CLUDE THE PRE-OPERATIVE EXPENSES OF BOOK PROFIT U/S.115JB OF THE ACT. FOR T HIS, REVENUE HAS RAISED THE FOLLOWING GROUND NO.3 :- 3. THE LD. CIT(A) ABAD HAS ERRED IN LAW AND ON FA CTS IN DIRECTING THE A.O NOT TO INCLUDE THE ABOVE SAID PRE-OP EXPENSES W HILE RE- COMPUTING THE BOOK PROFIT U/S.155JB OF THE ACT. 21. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE STAT ED THAT THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF HONBLE APEX CO URT IN THE CASE OF APOLLO TYRES LTD. V CIT (2002) 255 ITR 273 (SC) AND FURTHER STATED THAT TH E CIT(A) ALLOWED THE CLAIM OF ASSESSEE IN EARLIER YEARS BY G IVING FOLLOWING FINDINGS IN PARA-7.1 OF HIS APPELLATE ORDER:- 7.1 I HAVE PERUSED THE SUBMISSIONS AND THE DECISIO N RELIED UPON BY THE A.R. OF THE APPELLANT CAREFULLY. I HAVE ALSO GO NE THROUGH THE DECISION OF MY PREDECESSOR IN THE APPELLANTS OWN C ASE FOR EARLIER YEARS AND THE OBSERVATION OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. HAVING CONSIDERED THE FACTS OF THE CASE AND RESPECTFULLY FOLLOWING THE RATIO OF THE DECISION OF SUPREME COUR T, RELIED UPON BY THE A.R AND THE ORDERS OF MY PREDECESSOR IN THE APP ELLANTS OWN CASE FOR A.YS 1998-99, 1999-2000 AND 2000-01, THE A SSESSING OFFICER IS DIRECTED NOT TO INCLUDE THE ABOVE SAID ADDITIONS WHILE RE-COMPUTING THE BOOK PROFIT U/S.115JB OF THE ACT. 22. WE FIND THAT THE JUDGMENT OF HONBLE APEX COURT IN THE CASE OF APOLLO TYRES LTD. (SUPRA) IS APPLICABLE, WHEREIN IT IS HELD THAT FOR COMPUTATION OF ITA NO.913/A/04,783/A/06 & 2482/A/05 A.YS 01-02 & 02-03 RIDDHI SIDDHI GLUCO BIOLS LTD. V. ACIT CIR-3, ABD PAGE 14 INCOME U/S.115JB, THE PROFIT AND LOSS ACCOUNT PREPA RED BY ASSESSEE- COMPANY AS APPROVED IN THE ANNUAL GENERAL MEETING A ND CERTIFIED BY AUDITOR IN ACCORDANCE WITH THE REQUIREMENT OF PART- II AND III OF SCHEDULE-IV OF THE COMPANIES ACT, CANNOT BE EXAMINED BY THE ASS ESSING OFFICER. FURTHER FOR THE PURPOSE OF INCOME IN VIEW OF THE TE RM BOOK PROFIT, AS PER SECTION 115JB OF THE ACT, ONLY THOSE ADJUSTMENTS, W HICH ARE SPECIFIED IN THE EXPLANATION TO SECTION 115JB CAN BE MADE FROM THE BOOK PROFITS AND DEPRECIATION NOT BEING ONE OF THEM AND FURTHER THE ACCOUNTS OF THE ASSESSEE-COMPANY HAVING BEEN PREPARED IN ACCORDANCE WITH SCHEDULE-VI TO THE COMPANIES ACT, 1956. THE ASSESSING OFFICER W AS IN ERROR IN DISALLOWING THE DEPRECIATION AS CLAIMED BY THE ASSE SSEE-COMPANY. IN VIEW OF THE ABOVE, WE CONFIRM THE ORDER OR CIT(A) AND TH IS ISSUE OF REVENUES APPEAL IS DISMISSED. 23. THE NEXT ISSUE IN THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) ALLOWING THE CLAIM OF THE ASSESSEE NOT TO LE VY INTEREST U/S.234B AND 234C OF THE ACT WHILE COMPUTING INCOME U/S.115JB OF THE ACT. 24. THIS ISSUE WE HAVE ALREADY DEALT WITH IN ASSESS EES APPEAL IN ITA NO.913/AHD/2004 IN THIS VERY ORDER IN PARA-8 & 9 , WHEREIN WE HAVE DISMISSED THE ASSESSEES GROUND AND THIS ISSUE IS D ECIDED IN FAVOUR OF REVENUE. RESPECTFULLY FOLLOWING THE SAME, WE ALLOW THE CLAIM OF REVENUE. 25. IN THE RESULT, ASSESSEES APPEAL IN ITA NO.913/AHD/2004 AND THAT OR REVENUES APPEAL IN ITA NO.2482/AHD/2006 ARE PARTLY ALLOWED AND REVENUES APPEAL IN ITA NO.783/AHD/2006 IS DISMISSED. ORDER PRONOUNCED ON THIS DAY OF 1 ST OCT,2010 SD/- SD/- ( G.D.AGARWAL ) ( MAHAVIR SINGH ) (VICE PRESIDENT) (JUDICIAL MEMBER) AHMEDABAD, DATED : 01/10/2010 ITA NO.913/A/04,783/A/06 & 2482/A/05 A.YS 01-02 & 02-03 RIDDHI SIDDHI GLUCO BIOLS LTD. V. ACIT CIR-3, ABD PAGE 15 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD