DCIT, Circle-1(1), Hyderabad V. M/s Andhra Pradesh Handicrafts Development Corporation Ltd., Hyderabad

ITA 916/HYD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91705 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 29-01-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 12-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR
• Keywords: Business expenditure; Revenue expenditure
• Section: 43B; 37(1); 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA.NO.915 & 916/HYD/2014 ASSESSMENT YEARS 2005-2006 & 2006-2007 THE DCIT, CIRCLE 1(1) HYDERABAD. VS. M/S. ANDHRA PRADESH HANDICRAFTS DEVELOPMENT CORPORATION LTD., HYDERABAD. PAN AABCA7350D (APPELLANT) (RESPONDENT) FOR REVENUE : MR. R. CLEMENT RAMESH KUMAR FOR ASSESSEE : MR. HARI AGARWAL DATE OF HEARING : 28.05.2015 DATE OF PRONOUNCEMENT : 29.05.2015 ORDER PER SMT. ASHA VIJAYARAGHAVAN, J.M. THESE TWO APPEALS ARE FILED BY THE REVENUE AGAINS T THE COMMON ORDER OF THE LD. CIT(A)-VI, HYDERABAD FO R THE A.YS. 2005-06 AND 2006-07. SINCE COMMON ISSUES ARE INVOLVED IN THESE APPEALS, THE APPEALS ARE HEARD TOGETHER AN D ARE BEING DISPOSED OF BY A SINGLE CONSOLIDATED ORDER. 2. BRIEFLY STATED, THE ASSESSEE, A PUBLIC SECTOR UNDERTAKING OF STATE GOVERNMENT OF ANDHRA PRADESH, SHOWN TO HAVE BEEN ENGAGED IN THE BUSINESS OF PROMOTION AND DEVELOPMENT OF HANDICRAFTS, MAINLY FOR UPLIFTMENT O F RURAL AND TRIBAL ARTISANS IN ANDHRA PRADESH AND FOR THE YEARS UNDER REFERENCE I.E., A.YS. 2005-06 AND 2006-07 THE ASSES SEE CLAIMED AMOUNTS OF RS.30,00,000 AND RS.35,00,000 AS EXPENSE S BEING 2 ITA.NO.915 & 916/HYD/2014 M/S. A.P. HANDICRAFTS DEVELOPMENT CORPN. LTD., THE AMOUNTS PAID AS PREMIA TO THE LIC, TOWARDS THE LEAVE ENCASHMENT SCHEME AND THE SAME WERE ALLOWED IN THE ORIGINAL ASSESSMENTS. WHILE REOPENING THE ASSESSMENTS U/S.14 7, THE A.O. HAS COMPUTED THE TOTAL INCOME BY DISALLOWING T HE SAID AMOUNTS BY APPLYING THE PROVISIONS OF SEC.40A(9) AN D 43B(F) OF I.T. ACT, AFTER NETTING OF THE SAME WITH THE ACTUAL AMOUNTS OF LEAVE ENCASHMENT PAID BY LIC TO THE EMPLOYEES, THRO UGH THE ASSESSEE. THE INCOMES OF THE ASSESSEE HAVE BEEN ASS ESSED AT RS.60,45,960 AND RS.64,61,390, AS AGAINST THE RETUR NED TOTAL INCOME OF RS.30,45,960 AND RS.30,86,102 FOR A.YS. 2 005-06 AND 2006-07 RESPECTIVELY BY DCIT, CIRCLE 1(1). THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A) AGAINST THE SAID DISALLOWANCES AS WELL AS ON THE ISSUE OF REOPENING THE ASSESSMENTS WITHOUT CHANGE IN FACTS. DURING THE PRO CEEDINGS BEFORE THE LD. CIT(A) THE ASSESSEE DID NOT PRESS TH E GROUND WITH REFERENCE TO SECTION 147. 3. IT WAS OBSERVED BY THE ASSESSING OFFICER THAT T HE ASSESSEE HAD DEBITED AN AMOUNT OF RS. 30 LAKHS AND RS. 35 LAKHS RESPECTIVELY FOR THE ASST. YEARS 2005-06 AND 2006-07, TOWARDS CONTRIBUTION TO LEAVE FUND'. THE ASSESSING OFFICER OBSERVED THAT THE SAME IS HIT BY THE PROVISIONS OF SEC. 43B(F) OF INCOME-TAX ACT. WITH REFERENCE TO THE APPLICATION B Y THE ASSESSEE BEFORE THE ADDL, CIT U/S. 144A, THE ADDL. CIT DIRECTED THE ASSESSING OFFICER TO VERIFY THE ACTUAL PAYMENTS TO EMPLOYEES ON ACCOUNT OF LEAVE ENCASHMENT AND ALLOW ONLY THOSE AMOUNTS, FOR BOTH THE ASSESSMENT YEARS. THE A SSESSEE BEFORE THE ASSESSING OFFICER CLARIFIED THAT FOR THE A.Y. 2005-06, NO PAYMENT WAS MADE TO THE EMPLOYEES TOWARDS LEAVE ENCASHMENT AND HENCE, THE CLAIM WAS DISALLOWED U/S. 43B OF THE INCOME-TAX ACT. AS FAR AS ASSESSMENT YEAR 2006- 07 IS CONCERNED, THE ASSESSEE CLARIFIED BEFORE THE ASSESS ING OFFICER 3 ITA.NO.915 & 916/HYD/2014 M/S. A.P. HANDICRAFTS DEVELOPMENT CORPN. LTD., THAT THE ASSESSEE HAD PAID RS.L,24,712 TOWARDS LEAV E ENCASHMENT OUT OF RECEIPTS FROM LIC, BUT DEBITED RS . 35,00,000 TO PROFIT & LOSS ACCOUNT. HENCE, THE A.O. HAD DISALLOWED A SUM OF RS. 33,75,288 U/S.43B (RS.35,00 ,000 RS.1,24,712). 4. BEFORE THE LD. CIT(A), IT WAS FURTHER STATED BY THE ASSESSEE THAT THE DISPUTE IS REGARDING THE ALLOWABILITY OF LEAVE ENCASHMENT OF RS. 30,00,000 FOR THE AY 2005-0 6 AND RS.35,00,000 FOR THE AY 2006-07, WHICH IS A LIABILITY ASCERTAINED AND NOT A PROVISION. IT WAS CONTENDED THAT THE SAID AMOUNTS WERE PAID IN ORDER TO CONTAIN FRUGALITY IN THE EXPENDITURE AND TO LOOK AF TER THE EMPLOYEES WELFARE AND TO ASSURE THEM THAT THEIR DUE BENEFITS ARE ENSURED. IT WAS STATED THAT AS PER DECISION OF THE APPELLANT BOARD ON 14.10.2004, THAT GROUP LEAVE ENCASHMENT SCHEME WITH LIC OF INDIA WAS TAKEN FOR THE BENEFIT OF THE EMPLOYEES, AND DUE TO THE NEGOTIATIONS WITH THE LIC 1 THEY HAVE CALCULATED THE LIABILITY ON ACTUARIAL BASIS AND THE AMOUNT PAYABLE BY THE CORPORATION IS PAID AND LIC HAS TAKEN OVER THE LIAB ILITY OF PAYING THE LEAVE ENCASHMENT AMOUNTS TO EMPLOYEES, ACCORDINGLY LIC IS PAYING THE AMOUNT TO EMPLOYEES O F APPELLANT COMPANY. IT WAS STATED THAT THE AMOUNT PA ID TO LIC IS DEBITABLE TO PROFIT & LOSS ACCOUNT, AS IT WA S AN EXPENDITURE, TO ARRIVE AT THE CORRECT PROFITS OF TH E BUSINESS OF THAT YEAR, AND THAT THE AMOUNT OF LEAVE ENCASHME NT AS AND WHEN PAID BY LIC, IS NOT CLAIMED AS EXPENDITURE BY THE APPELLANT AGAIN. IT WAS STATED THAT WHATEVER IN TEREST IS ACCRUED ON PREMIUM PAID TO LIC IS ADDED TO THE CORP US OF THE FUND AND IS AGAIN FOR THE WELFARE OF THE EMPLOYEES AND 4 ITA.NO.915 & 916/HYD/2014 M/S. A.P. HANDICRAFTS DEVELOPMENT CORPN. LTD., THE SAME IS NOT THE INCOME TO THE ASSESSEE AND DUE TO T HIS PRACTICE THE LIABILITY OF THE COMPANY GETTING REDUC ED IN THE COMING YEARS. IT WAS AVERRED THAT IF THE ASSESSEE F AILS TO MAKE THE PAYMENT TO LIC ON BEHALF OF THE EMPLOYEES, THE LIC'S ASSURANCE FOR LEAVE ENCASHMENT GETS LAPSED, W HICH IS DETRIMENTAL TO THE WELFARE OF THE EMPLOYEES. IT WAS STATED THAT THE AMOUNT WAS CLAIMED ON ACTUAL PAYMENT MADE TO LIC AND NOT ON PROVISIONAL BASIS, SINCE THE AMOUNT PAYABLE TO LIC IS ASCERTAINED LIABILITY AND IT IS A CTUALLY PARTED WITH IT AND IS AN ALLOWABLE EXPENDITURE U/S.36(1)(VA) ALTERNATIVELY UNDER SEC. 37(1), AS IT IS FOR THE BUSINESS OF THE ASSESSEE. FOR THE PROPOSITION THAT THE PAYMENT IS AN ALLOWABLE DEDUCTION U/S.37 THE ASSESS EE RELIED ON THE DECISION OF THE HON'BLE HIGH COURT OF KERALA AT ERNAKULAM IN M/S. HINDUSTAN LATEX LTD, FOR THE PROPOSITION THAT THE PAYMENT OF PREMIUM OF LIC FOR THE POLICY UNDER GROUP LEAVE ENCASHMENT SCHEME IS ELIGI BLE U/S.37, WHEREIN THE HIGH COURT HAVE HELD THAT THE C LAIM IS ALLOWABLE TREATING THE SAME AS AN EXPENDITURE EXCLU SIVELY INCURRED FOR THE PURPOSE OF BUSINESS. THE ASSESSEE FURTHER STATED THAT THE CLAIM WAS NOT A PROVISION FOR FUTUR E LIABILITY WHICH WAS CLAIMED AS A DEDUCTION. THE ASSESSEE FURT HER ENCLOSED COPY OF THE GO IN MS.NO.232 DT. 16.09.2005 , ISSUED BY THE GOVERNMENT OF ANDHRA PRADESH IN RESPE CT OF LEAVE ENCASHMENT WHEREIN IT WAS CLEARLY REFLECTED T HAT THE STATUTORY DUTY OF CORPORATION TO ENSURE PROPER PAYM ENT OF LEAVE ENCASHMENT TO ALL THE EMPLOYEES ON THEIR RETI REMENT OR RESIGNATION IRRESPECTIVE OF THE LIQUIDITY OR FIN ANCIAL POSITION OF THE CORPORATION. THE ASSESSEE STATED TH AT AS A PRECAUTION AND TO FULFIL THE REQUEST AND SATISFACTI ON OF 5 ITA.NO.915 & 916/HYD/2014 M/S. A.P. HANDICRAFTS DEVELOPMENT CORPN. LTD., UNION FOR SMOOTH AND PEACEFUL FUNCTION OF CORPORATI ON, AND THAT THE CORPORATION IS FORCED TO TAKE THE INSU RANCE POLICY TO AVOID ANY UNCERTAINTY IN FUTURE PAYMENTS AND REFLECT TRUE SURPLUS OF REVENUE OVER EXPENDITURE. I T WAS CLARIFIED THAT THE POLICY WAS TAKEN ON REGULAR YEAR LY PREMIUM PAYMENTS BASIS AND HENCE, IT IS AN ALLOWABL E EXPENDITURE ACCORDING TO SEC. 37(1) OF INCOME TAX A CT, 1961. THE LD. CIT(A) ELABORATELY DISCUSSED AT PARAS 5.3 TO 5.5 OF HIS ORDER AND CONCLUDED AS FOLLOWS : .. THE EXPENSES WHICH ARE RELATED TO BUSINESS AND WHICH WERE NOT PROHIBITED BY THE ACT ARE, ALLOWABLE AS EXPENSES FOR COMPUTING THE PROFITS OF BUSINESS AND PROFESSION. THUS, THE PREMIA PAID TO LIC ARE ELIGIB LE TO BE CLAIMED AS BUSINESS EXPENSES U/S.37(1) OF THE I.T. ACT AND THE DECISION OF KERALA HIGH COURT ON SIMILAR FA CTS UPHELD THE ALLOWANCE OF PREMIUM PAID TO LIC FOR LEAVE ENCASHMENT SCHEME, IN THE CASE OF CIT VS. HINDUSTHAN LATEX LTD. [209 TAXMAN 0042 (2012)], WHEREIN THE HON'BLE HIGH COURT HELD AS UNDER: 'THE OBJECT OF SECTION 438 WAS TO PREVENT ASSESSEE FROM MAKING PROVISION FOR STATUTORY LIABILITIES, WITHOUT ACTUALLY DISCHARGING THE SAME. LEAVE ENCASHMENT IS NOT A STATUTORY LIABILITY AND EVEN IN THE CASE OF PROVISIONS BEING MADE, THE DEDUCTION WAS ALLOWED AS BUSINESS EXPENDITURE, WHEN THE LIABILITY WAS NOT ACTUALLY INCURRED IN THE PREVIOUS YEAR. IT WAS NOT A PROVISION WHICH WAS DISALLOWED BUT AN ACTUAL LIABILITY TOWARDS PREMIUM PAID ON INSURANCE POLICY AND THE LIABILITY WAS ALLOWABLE AS -, DEDUCTION U/S. 37, BEING AN EXPENDITURE INCURRED FOR THE PURPOSE OF BUSINESS .... ' FOLLOWING THE RATIO OF THE DECISION OF KERALA HIGH COURT, ON THE SIMILARITY OF FACTS, I AM OF THE CONSIDERED OPINION THAT THE AMOUNTS PAID BY APPELLANT COMPANY AS PREMIA TO THE LIC, TOWARDS THE ENCASHMENT OF SCHEME FOR AY 2005-06 AND 2006-07 ARE THE EXPENSES ALLOWABLE U/S. 37(1) OF I.T. ACT. ACCORDINGLY, THE ADDITIONS OF RS.30,00,000/- FOR AY 2005-06 AND RS. 6 ITA.NO.915 & 916/HYD/2014 M/S. A.P. HANDICRAFTS DEVELOPMENT CORPN. LTD., 33,78,285/FOR AY 2006-07 ARE NOT SUSTAINABLE, ACCORDINGLY, THE GROUNDS OF APPEALS ARE ALLOWED. 5. WE HAVE HEARD BOTH THE PARTIES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ISSUE IS COVERED BY THE DECISION OF COORDINATE BENC H OF THIS TRIBUNAL IN THE CASE OF DCIT, CIRCLE 1(1), HYDERABA D VS. M/S. ANDHRA BANK, HYDERABAD IN ITA.NO.167, 168 & 169/HYD /2014 AND ITA.NO.244,245 & 246/HYD/2014 DATED 18 TH JULY, 2014, IN WHICH ONE OF US WAS THE PARTY. THE RELEVANT PORT ION OF THE ORDER IS REPRODUCED HEREUNDER : 29. THE NEXT EFFECTIVE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO DISALLOWANCE OF PREMIUM OF RS.148,36,49,516 PAID TO LIFE INSURANCE CORPORATION OF INDIA TOWARDS LEAVE ENCASHMENT POLIC Y TAKEN BY THE ASSESSEE FOR ITS EMPLOYEES. 30. FACTS OF THE CASE IN BRIEF RELATING TO THIS ISSUE ARE THAT THE ASSESSEE CLAIMED DEDUCTION IN TH E COMPUTATION OF INCOME OF RS.124.82 CRORES TOWARDS PAYMENT MADE TO LIC GROUP LEAVE ENCASHMENT SCHEME. DURING THE COURSE OF ASSESSMENT, THE CLAIM WAS REVI SED TO RS.148.36 CRORES, AS THE CLAIM FOR DEDUCTION OF RS.10.576 CRORES FOR ASSESSMENT YEAR 2006-07 AND RS.12.97 CRORES FOR ASSESSMENT YEAR 2007-08 WERE NO T ALLOWED BY THE ASSESSING OFFICER IN THOSE RESPECTIV E ASSESSMENT YEARS . THE ENTIRE AMOUNT OF RS.148.36 CRORES WAS SAID TO HAVE BEEN PAID DURING THE RELEVA NT PREVIOUS YEAR. THE ASSESSING OFFICER DID NOT ALLOW THE DEDUCTION CLAIMED BY THE ASSESSEE FOR THE FOLLOWING REASONS- A) THE PAYMENT WAS NOT MADE DIRECTLY BY THE ASSESSEE, RATHER THE PAYMENT WAS MADE TO LIC GROUP LEAVE ENCASHMENT SCHEME AND THEREFORE, SUCH PAYMENT IS NO T ALLOWABLE UNDER S.43B(F) OF THE ACT. B) THE PAYMENT MADE IS NOT DEBITED TO PROFIT & LOSS ACCOUNT, BUT WAS MADE OUT OF GENERAL RESERVES 7 ITA.NO.915 & 916/HYD/2014 M/S. A.P. HANDICRAFTS DEVELOPMENT CORPN. LTD., C) THE LIC GROUP LEAVE ENCASHMENT SCHEME IS NOT RECOGNIZED/APPROVED AS PER S.36(1)(VI)/(V) OF THE A CT, AND THEREFORE, IT IS IN VIOLATION OF PROVISIONS OF S.40A(9) OF THE ACT. 31. ON APPEAL, THE CIT(A) SUSTAINED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. HENCE, ASSESSEE IS IN SECOND APPEAL ON THIS ISSUE. 32. WE HEARD BOTH SIDES AND PERUSED THE IMPUGNED ORDERS OF THE REVENUE AUTHORITIES AND OTHE R MATERIAL AVAILABLE ON RECORD. WE FIND THAT ON THIS ISSUE, THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2006-07, VIZ. IN ITA NOS.95 TO 97 & 218/HYD/2013 DATED 4.4.2013, IS IN AGAINST THE ASSESSEE, AND THE IMPUGNED ORDER OF THE CIT(A) ON T HIS ISSUE IS IN CONSONANCE WITH THE SAID ORDER OF THE T RIBUNAL FOR THE ASSESSMENT YEARS 2006-07. HOWEVER, THE RECENT DECISIONS OF THE UTTARAKHAND HIGH COURT IN T HE CASE OF CIT V/S. NAINITAL BANK LTD. (2014)8 TAX CORP(DT)56471; AND OF THE KERALA HIGH COURT IN THE CASE OF CIT V/S. HINDUSTAN LATEX LTD. (2012)22 TAXMANN.COM 332, RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE BEFORE US, DULY FURNISHING COPIES THEREOF IN THE PAPER-BOOK, ARE IN FAVOUR OF THE ASS ESSEE. IT HAS BEEN HELD BY THE UTTARAKHAND HIGH COURT IN T HE CASE OF NAINITAL BANK LTD. (SUPRA) AS FOLLOWS- 4.IT IS NOT IN DISPUTE THAT THE PAYMENT OF THE PRE MIUM IN QUESTION IS NOT AN EXPENDITURE OF THE NATURE DES CRIBED IN SECTIONS 30 TO 36. IN ORDER TO SHOW THAT THE EXPENDITURE WAS NOT IN THE NATURE OF CAPITAL EXPEND ITURE OR PERSONAL EXPENSES OF THE ASSESSEE AND HAD BEEN SPENT WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUS INESS OR PROFESSION, REFERENCE WAS DRAWN TO SECTION 43B(F ) OF THE ACT. INASMUCH AS, SECTION 43B CONTAINS NON- OBSTANTE PROVISION AND THERE IN CLAUSE (F) PAYMENT BY THE ASSESSEE AS EMPLOYER IN LIEU OF ANY LEAVE TO TH E CREDIT OF ITS EMPLOYEES HAS BEEN RECOGNIZED AS A REVENUE EXPENDITURE AND HAS BEEN CERTIFIED AS AN EXPENDITURE NOT FOR PERSONAL EXPENSES OF THE ASSESS EE AND THAT THE SAME IS WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OR PROFESSION OF THE ASSESSEE. A 8 ITA.NO.915 & 916/HYD/2014 M/S. A.P. HANDICRAFTS DEVELOPMENT CORPN. LTD., COVER OBTAINED TO DISCHARGE SUCH RECOGNIZED OBLIGAT ION WILL NOT COME UNDER SECTION 37 OF THE ACT IS NOT ACCEPTED. 33. IN THE CASE OF HINDUSTAN LATEX LTD. (SUPRA), WHICH IN FACT WAS IN THE CONTEXT OF ORDER OF THE COMMISSIONER PASSED UNDER S.263 OF THE ACT, DEALING WITH ELIGIBILITY OF DEDUCTION IN RESPECT OF PREMIA PAID TOWARDS INSURANCE COVER, THE KERALA HIGH COURT HAS HELD THAT WHAT IS INTENDED BY CLAUSE (F) OF S.43B WAS TO DENY DEDUCTION FOR LIABILITIES NOT ACTUALLY INCURRED AND TO EXCLUDE PROVISIONS MADE AGAINST FUTURE LIABILITIES FROM BEING GRANTED AS DEDUCTION. IN THE CASE OF INSURANC E PREMIA PAID, IT WAS OBSERVED, THE SAME WAS NOT A PROVISION FOR FUTURE LIABILITY WHICH WAS CLAIMED AS A DEDUCTION. THE ASSESSEE HAD INSURED ITSELF AGAINST THE LIABILITIES THAT MAY ARISE ON ACCOUNT OF THE CLAIMS MADE BY THE EMPLOYEES TOWARDS LEAVE ENCASHMENT. THE ASSESSEE BEING COVERED BY A VALID INSURANCE POLICY AND PREMIUM BEING REGULARLY PAID, INCURS NO LIABILITY T OWARDS LEAVE ENCASHMENT . THE LIABILITY BEING COVERED BY A VALID INSURANCE POLICY, IS SOLELY THAT OF THE INSURER. T HEREFORE, IT WAS HELD THAT EVEN IF 43B (F) STANDS, IN THE CAS E OF THE ASSESSEE, WHERE THE LIABILITY IS BORNE BY THE INSUR ER, THERE CAN BE NO SITUATION WHEREIN ASSESSEE COULD MA KE A VALID CLAIM FOR DEDUCTION U/S 43B(F) SINCE THE ACTU AL LIABILITY IS NOT INCURRED IN ANY OF THE YEARS. THE PREMIUM PAID TOWARDS THE RENEWAL AND CONTINUED VALIDITY OF THE INSURANCE POLICY NECESSARILY BECOMES BUSINESS EXPENDITURE WHOLLY AND EXCLUSIVELY INCURRED FOR THE BUSINESS PURPOSE AND ALLOWABLE AS A DEDUCTION U/S 3 7. 34. IN VIEW OF THE ABOVE, RESPECTFULLY FOLLOWING THE RECENT DECISIONS OF THE UTTARAKHAND HIGH COURT IN THE CASE OF CIT V/S. NAINITAL BANK LTD. (SUPRA); AND OF THE KERALA HIGH COURT IN THE CASE OF CIT V/S. HINDUSTAN LATEX LTD. (SUPRA), IN PREFERENCE TO THE EARLIER DE CISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSME NT YEAR 2006-07, WE ACCEPT THE CONTENTIONS OF THE ASSESSEE ON THIS ISSUE, AND DELETE THE ADDITION MAD E BY THE ASSESSING OFFICER IN THIS BEHALF. ASSESSEES GROUNDS ON THIS ISSUE ARE ALLOWED. 9 ITA.NO.915 & 916/HYD/2014 M/S. A.P. HANDICRAFTS DEVELOPMENT CORPN. LTD., 6. WE FIND THAT THE ISSUE IS COVERED BY THE AFORESAID DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S. ANDHRA BANK, HYDERABAD (SUPRA) AND RESPECTFULLY FOLLOWING THE SAME, WE UPHOLD THE ORDE R OF THE LD. CIT(A) FOR BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION AND DISMISS THE APPEALS OF THE REVENU E. 7. IN THE RESULT, APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.05.2015. SD/- SD/- (INTURI RAMA RAO) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 29 TH MAY, 2015 VBP/- COPY TO 1. THE DCIT, CIRCLE 1(1), 4 TH FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 2. M/S. ANDHRA PRADESH HANDICRAFTS DEVELOPMENT CORPORATION LTD., HASTHAKALA BHAWAN, OPP. TELEPHONE EXCHANGE, MUSHEERABAD, HYDERABAD 500 020. 3. CIT(A)-VI, HYDERABAD. 4. CIT-I, HYDERABAD 5. D.R. I.T.A.T. B BENCH, HYDERABAD. 6. GUARD FILE