M/s. Bhagyanagar India Ltd., Secunderabad V. Addl.CIT, Range-1, Hyderabad

ITA 99/HYD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2772 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 25-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Assessee Lawyers: K C DEVADAS
• Keywords: Capital asset; Revenue expenditure; Capital expenditure
• Section: 14A; 80IB; 37(1); 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NOS. 99 & 1435/HYD/2012 ASSESSMENT YEARS: 2008-09 & 2009-10 M/S BHAGYANAGAR INDIA LTD., APPELLANT SECUNDERABAD. (PAN AAACB8963C) VS. DY. COMMISSIONER OF INCOME-TAX, RESPONDENT CIRCLE 1(3), HYDERABAD. APPELLANT BY : SHRI K.C. DEVADAS RESPONDENT BY : SMT. AMISHA S. GUPT DATE OF HEARING : 20/03/2013 DATE OF PRONOUNCEMENT : 10/05/ 2013 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: BOTH THESE APPEALS PREFERRED BY THE ASSESSEE ARE D IRECTED AGAINST SEPARATE ORDERS OF CIT(A)-II, HYDERABAD FOR THE ASSESSMENT YEARS 2008-09 AND 2009-10. SINCE COMMON ISSUES ARE INVOLVED IN THESE APPEALS, THEY WERE CLUBBED AN D HEARD TOGETHER, THEREFORE, A COMMON ORDER IS PASSED FOR THE SAKE OF CONVENIENCE. 2 ITA NOS. 99 & 1435/HYD/2012 M/S BHAGYANAGAR INDIA LTD. ITA NO. 99/HYD/2012 FOR AY 2008-09 2. GROUND NO. 1 IS GENERAL IN NATURE AND THEREFORE NO ADJUDICATION IS REQUIRED BY US. 3. GROUND NO. 2 IS REGARDING DISALLOWANCE OF RS.63, 32,210/- BEING AMORTIZATION OF EXPENSES U/S.35D IN RELATION TO EXPENDITURE INCURRED ON ISSUE OF FCCB BONDS. THE A SSESSEE HAD CLAIMED RS.63,32,210/- UNDER SECTION 35D AS AMO RTIZATION OF EXPENDITURE ON ISSUE OF FCCB BONDS. THE ASSESSI NG OFFICER DISALLOWED ON THE FOLLOWING GROUNDS:- A) FCCB IS NOT AN ISSUE FOR PUBLIC SUBSCRIPTION. ONLY 150 FCCBS WERE ISSUED BY THE ASSESSEE TO OVERSEAS INSTITUTIONAL INVESTORS. HENCE, THE REQUIREMENT LA ID DOWN IN CLAUSE (C) OF SUB-SECTION (2) OF SECTION 35 D IS NOT MET. WITHOUT PREJUDICE TO THIS : B) WHETHER THE EXPENSES OF RS.3,16,63,058/- INCURRED F OR ISSUE OF FCCBS AND ADJUSTED FROM SHARE PREMIUM ACCOUNT DURING F.Y 06-07 ARE INCURRED FOR THE ITEMS SPECIFIED IN 35D(2)(C) IS NOT KNOWN. C) THE CAPITAL IS NOT RAISED AGAINST SETTING UP OR EXPANSION OF ANY SPECIFIC UNDERTAKING, D) THE INVESTMENT IN INFRASTRUCTURE OR AMOUNTS LYING I N BANK CANNOT BE TREATED AS EXPENDITURE MET ON ANY PROJECT. E) AS COST OF THE PROJECTS IS NOT SPECIFIED, IT IS DIF FICULT TO DETERMINE THE CAP SPECIFIED IN SECTION 35D(3). 3 ITA NOS. 99 & 1435/HYD/2012 M/S BHAGYANAGAR INDIA LTD. 4. THE ASSESSEE HAS CLAIMED THAT IN THE ALTERNATIVE , THE ENTIRE EXPENDITURE SHOULD BE ALLOWED UNDER SECTION 37, IF THE CLAIM UNDER SECTION 35D IS NOT ALLOWED. THE AO REJ ECTED BOTH THE CONTENTIONS AND DISALLOWED THE SUM OF RS.63,32, 210/- BEING 1/5 TH OF THE TOTAL EXPENDITURE OF RS.3,16,63,058/- INCURRED BY THE ASSESSEE ON ISSUE OF FCCB CLAIMED B Y THE ASSESSEE. 5. AGGRIEVED, THE ASSESSEE HAS COME UP ON APPEAL B EFORE CIT(A). BEFORE CIT(A), THE ASSESSEE SUBMITTED THAT OFFERING CIRCULAR KNOWN AS PROSPECTUS IN INDIA CLEARLY SPEC IFIED THAT THE FCCB WAS RAISED TO FUND THE COST OF EXPANSION. REIMBURSEMENT OF EXPENSES INCURRED FOR WIND POWER P ROJECT AND MODERNIZATION OF THE COMPANYS FACILITIES. IT I S ALSO OBSERVED THAT CAPITAL IS NOT RAISED AGAINST SETTING UP OR EXPANSION OF ANY SPECIFIC UNDERTAKING, INVESTMENT I N INFRASTRUCTURE OR AMOUNTS LYING IN BANK CANNOT BE T REATED AS EXPENDITURE MET ON ANY PROJECT. AS THE COST OF THE PROJECT IS NOT SPECIFIED, IT IS DIFFICULT TO DETERMINE THE CAP SPECIFIED IN SECTION 35D(3). THE CIT(A) CONFIRMED THE ORDER OF T HE AO HOLDING THAT CONDITIONS SPECIFIED IN 35D ARE NOT SA TISFIED IN THE APPELLANTS CASE AND HENCE CONFIRMED THE DISALLOWAN CE OF CLAIM UNDER SECTION 35D. 6. AS REGARDS THE CLAIM UNDER SECTION 37(1) THE CIT (A) HELD THAT IT IS OPEN TO THE ASSESSEE TO CLAIM THE EXPEND ITURE IN THE YEAR IN WHICH IT WAS INCURRED BUT IT WAS A CONSCIOU S ACT ON THE PART OF THE ASSESSEE NOT TO CLAIM SUCH EXPENDITURE IN THE YEAR 4 ITA NOS. 99 & 1435/HYD/2012 M/S BHAGYANAGAR INDIA LTD. IN WHICH IT WAS INCURRED. THE EXPENDITURE WAS NOT DEBITED TO THE PROFIT AND LOSS ACCOUNT BUT MET OUT OF THE SHAR E PREMIUM ACCOUNT. IT IS A FACT THAT EXPENDITURE WAS NOT DEB ITED TO THE PROFIT AND LOSS ACCOUNT AND THEREFORE CANNOT BE ALL OWED UNDER SECTION 37(1). THE CIT(A) CONFIRMED THE ORDER OF TH E AO AND DISALLOWED THE CLAIM OF DEDUCTION OF RS.6332210/-. 7. AGGRIEVED THE ASSESSEE IS ON APPEAL BEFORE US. BEFORE US THE ASSESSEE FURNISHED THE DETAILS OF THE EXPENDITU RE INCURRED IN RELATION TO THE FCCB BONDS (PAGE 8 OF THE PAPER BOOK) WE FIND THAT THE ENTIRE EXPENDITURE WAS INCURRED IN TH E PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR IN APPEAL VIZ. , 2008-09. THE ASSESSEE HAD GIVEN PARTICULARS OF THE FIXED ASS ETS ACQUIRED FOR VARIOUS PROJECTS AND COMPUTED PERMISSIBLE LIMIT OF 2.5% OF THE TOTAL CAPITAL EMPLOYED AT 316.93 LAKHS. IT IS THEREFORE THE CONTENTION OF THE ASSESSEE THAT TOTAL EXPENDITURE I NCURRED AT RS.316.93 LAKHS WAS WELL WITHIN THE LIMIT PRESCRIBE D UNDER SECTION 35D AND THEREFORE SHOULD BE ALLOWED TO BE A MORTIZED UNDER THAT SECTION . THE ASSESSEE HAD CLAIMED 1/5 TH OF THE EXPENDITURE UNDER THE IMPRESSION THAT THEY WILL BE ENTITLED TO DEDUCTION U/S.35D. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORD. THERE APPEARS TO BE BASIC DOUBT IN THE MIND OF THE AO WHETHER FCCB WAS IN FACT OBTAINED BY THE ASSESSEE IN RESPEC T OF EXPENDITURE ON EXPANSION OF ANY SPECIFIC UNDERTAKIN G. PROSPECTUS ON ISSUE ON FCCB BOND HAS NOT BEEN PROVI DED TO US AND HENCE WE ARE NOT IN A POSITION TO DECIDE WHETHE R THE 5 ITA NOS. 99 & 1435/HYD/2012 M/S BHAGYANAGAR INDIA LTD. BONDS WERE ISSUED FOR FUNDING EXPANSION OF ANY UNDE RTAKING AS CONTEMPLATED UNDER SECTION 35D. 9. HOWEVER, WE FIND THAT ALTERNATE CLAIM OF THE ASS ESSEE REGARDING THE CLAIM OF ENTIRE EXPENDITURE UNDER SEC TION 37 MERITS CONSIDERATION. IF THE EXPENDITURE HAS BEEN I NCURRED FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE AND IF IT I S NOT IN THE NATURE OF CAPITAL EXPENDITURE OR PERSONAL EXPENDITU RE, THE SAME IS ALLOWABLE UNDER SECTION 37. MERELY BECAUSE IN THE ACCOUNTS THE ASSESSEE HAS SET OFF ALL THESE EXPENDI TURE AGAINST THE SHARE PREMIUM OR ASSESSEE HAS NOT DEBITED ANY A MOUNT IN ITS PROFIT AND LOSS WILL NOT PREVENT THE ASSESSEE T O CLAIM EXPENDITURE WHICH IS OTHERWISE ALLOWABLE UNDER THE INCOMETAX ACT. 10. WE FIND THAT EVEN IF SECTION 35D IS APPLICABLE TO THE INSTANT CASE, EXPENDITURE ON ISSUE OF DEBENTURES W HICH IS OTHERWISE ALLOWABLE U/S 37, WILL BE ALLOWABLE IN FU LL AND THE EXPENDITURE NEED NOT BE AMORTISED. THE CALCUTTA HIG H COURT IN CIT VS EAST INDIA HOTEL REPORTED IN 252 ITR 860 AND THE DELHI HIGH COURT IN THE CASE OF CIT VS THIRANI CHEMICALS LTD REPORTED IN 290 ITR 196 (DEL) HAVE HELD THAT EXPENDITURE ON ISSUE OF BONDS ALLOWABLE UNDER SECTION 37 BY APPLYING THE RA TIO OF THE SUPREME COURT IN THE CASE OF INDIA CEMENTS LTD REPO RTED IN 60 ITR 52, EVEN IN CASES WHERE DEBENTURES WERE ISSUED FOR FUNDING EXPANSION OF AN UNDERTAKING AND HENCE THE EXPENDITURE ATTRACTED PROVISIONS OF SEC 35D. IN TH ESE DECISIONS THEY HAVE REFERRED TO CLARIFICATION ISSUE D BY THE BOARD IN ITS CIRCULAR NO.56 DATED 19.03.1971 WHEREI N THEY 6 ITA NOS. 99 & 1435/HYD/2012 M/S BHAGYANAGAR INDIA LTD. HAVE CLARIFIED THAT PROVISIONS FOR AMORTIZATION IS NOT INTENDED TO SUPERSEDE ANY OTHER PROVISIONS OF THE INCOME TAX LAW WELL UNDER WHICH SUCH EXPENDITURE IS ADMISSIBLE AS A DE DUCTION OR A DEDUCTION IS ALLOWABLE BY THE VIRTUE OF THE DECIS ION OF THE SUPREME COURT IN THE CASE OF INDIA CEMENTS LIMITED. EXPENDITURE ON ISSUE OF DEBENTURES AND CONVERTIBLE BONDS HAVE BEEN HELD TO BE REVENUE EXPENDITURE IN THE FOLLOWIN G CASES. 1. CIT VS SECURE METERS 321 ITR 611 (RAJ) (CONFIRMED IN CIT VS M/S SECURE METERS LTD 2009-TIO L- 93-SC-IT) 2. ITC HOTELS LTD., 334 ITR 109 KER. 3. SOUTH INDIA CORPORATION (AGENCIES),290 ITR 217 MAD. 11. RESPECTFULLY FOLLOWING THE SAID DECISIONS, WE A CCEPT THE ALTERNATE PLEA OF THE ASSESSEE THAT THE ENTIRE EXPE NDITURE OF RS.316.93 LAKHS INCURRED IN ISSUE ON DEBENTURE IS A N ALLOWABLE DEDUCTION. WE SET ASIDE THE MATTER TO THE FILE OF T HE AO FOR THE LIMITED PURPOSE TO VERIFY WHETHER THE EXPENDITURE I NCURRED BY THE ASSESSEE WAS RELATABLE TO THE ISSUE OF DEBENTUR ES AND THE EXPENDITURE ACCRUED THIS YEAR. IF IT IS SO, THE EXP ENDITURE IS TO BE ALLOWED U/S 37 OF THE IT ACT. THIS ISSUE IS CONS IDERED AS ALLOWED FOR STATISTICAL PURPOSES. 12. GROUND NO. 3 IS REGARDING DISALLOWANCE OF LOSS ARISING ON ACCOUNT OF FOREIGN EXCHANGE FLUCTUATION OF RS.10,46 ,176. THE CIT(A) HAS FOUND IT AS A FACT THAT EXCHANGE FLUCTUA TION HAS ARISEN ON ACCOUNT OF REDEMPTION OF FUNDS KEPT ABROA D IN FIXED DEPOSITS. AS A RESULT OF THE SAME THE LIABILITY ON THE LOANS GOT ENHANCED, BY RS.10,46,176/- ON ACCOUNT OF EXCHANGE FLUCTUATION. THE CIT(A) HAS ALSO OBSERVED FACTUALL Y THAT 7 ITA NOS. 99 & 1435/HYD/2012 M/S BHAGYANAGAR INDIA LTD. FLUCTUATION HAS BEEN ARISEN IN CONNECTION WITH LOAN S UTILISED FOR THE PURPOSE OF INVESTMENT IN FIXED ASSETS AND HENCE LOSS ARISING ON ACCOUNT OF FOREIGN EXCHANGE FLUCTUATION IS A CAPITAL EXPENDITURE. 13. AGGRIEVED THE ASSESSEE IS ON APPEAL BEFORE US. 14. WE HAVE HEARD THE PARTIES AND PERUSED THE RECOR D. PROFIT AND LOSS ARISING ON EXCHANGE FLUCTUATION IN RESPECT OF LOAN TAKEN WILL CONSTITUTE CAPITAL OR REVENUE EXPENDITUR E DEPENDING ON THE PURPOSE FOR WHICH THE LOAN HAS BEEN UTILIZED . AS HELD BY THE SUPREME COURT IN THE CASE OF ONGC VS CIT REP ORTED IN 322 ITR 180 HAS HELD THAT LOSS ON EXCHANGE FLUCTUAT ION IN RESPECT OF LOANS ACQUIRED FOR REVENUE PURPOSE IS AN ALLOWABLE DEDUCTION. 15. HOWEVER IF THE LOANS ARE UTILIZED FOR ACQUIRIN G CAPITAL ASSETS, THE LOSS WILL BE CAPITAL EXPENDITURE, SUBJE CT TO APPLICATION UNDER SECTION 43A IN RESPECT OF IMPORTE D ASSETS IN WHICH CASE THE VALUE OF THE ASSET WILL GET ENHANCED BY THE INCREASE IN LOAN LIABILITY ON ACCOUNT OF EXCHANGE F LUCTUATION. AS THIS MATTER HAS NOT BEEN LOOKED INTO, WE REMIT THE MATTER BACK TO THE FILE OF AO TO VERIFY THE PURPOSE FOR WHICH T HESE LOANS WERE UTILIZED AND ACCORDINGLY TREAT THE LOSS ON FOR EIGN EXCHANGE AS CAPITAL OR REVENUE AS THE CASE MAY IN L INE WITH THE DECISIONS OF THE APEX COURT IN THE CASE OF ONGC LIMITED VS 322 ITR 180 AND WOODWARD GOVERNOR INDIA LIMITED R EPORTED IN 312 ITR 254. THEREFORE THIS ISSUE OF THE ASSESS EES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. 8 ITA NOS. 99 & 1435/HYD/2012 M/S BHAGYANAGAR INDIA LTD. 16. GROUND NO. 4 IS REGARDING EXCLUSION OF ANNUAL MAINTENANCE CHARGES OF RS.20,28,125/ RECEIVED BY TH E ASSESSEE, IN COMPUTING RELIEF UNDER SECTION 80IB. THE ASSESSEE HAD SUPPLIED CDMA PHONES TO BSNL AND THE A NNUAL MAINTENANCE CHARGES IS PART AND PARCEL OF THE PURCH ASE ORDER ENTERED INTO BY THE BSNL. 17. IT IS THE CONTENTION OF THE ASSESSEE THAT ANNUA L MAINTENANCE CHARGES ARE INEXTRICABLY CONNECTED WITH THE MANUFACTURE AND SALE OF CMDA PHONES AND SHOULD BE CONSIDERED AS PART OF THE INCOME ENTITLED TO RELIEF UNDER SECTION 80IB. THE AO AND THE CIT(A) HAS HELD THAT AMC IS A SEPARATE STREAM OF INCOME AND IS NOT CONNECTED TO T HE MAIN ACTIVITIES OF MANUFACTURE AND SALE OF GOODS BY THE ASSESSEE. THIS SERVICE IS RENDERED AFTER THE SALE OF GOODS HA S BEEN COMPLETED. THE AMC SERVICES CAN BE PROVIDED INDEPEN DENT OF THE SALES ALSO. HENCE PROVIDING ANNUAL MAINTENANCE SERVICES CANNOT BE CONSIDERED AS CONNECTED IN THE FIRST DEGR EE WITH THE ACTIVITY OF MANUFACTURE AND SALE OF GOODS. SECTION 80IB IS AVAILABLE ONLY FOR PROFIT DERIVED FROM BUSINESS OF MANUFACTURE OF GOODS AND THEREFORE IT IS NOT APPLICABLE TO INCO ME DERIVED FROM ANY ANCILLARY ACTIVITIES/ SERVICES. 18. IN THE CIRCUMSTANCES WE ARE OF THE OPINION THAT AO AND CIT(A) HAVE RIGHTLY CONCLUDED THAT AMC CHARGES OF RS.20,28,125 SHOULD BE EXCLUDED FOR THE PURPOSE OF COMPUTING 9 ITA NOS. 99 & 1435/HYD/2012 M/S BHAGYANAGAR INDIA LTD. RELIEF UNDER SECTION 80IB.THE APPEAL OF THE ASSESSE E ON THIS ISSUE IS DISMISSED. 19. GROUND NO. 5 IS REGARDING DISALLOWANCE UNDER S ECTION 14A. IN THE ASSESSMENT YEAR UNDER APPEAL RULE 8D I S APPLICABLE. HOWEVER, THE AO HAS HIMSELF ACCEPTED T HAT THERE IS NO DIRECT INTEREST OR OTHER EXPENDITURE INCURRED FO R EARNING THE EXEMPTED INCOME. HE HAS ONLY DISALLOWED INDIRECT IN TEREST EXPENDITURE OF RS. 27,23,654/- IN PROPORTION OF INV ESTMENT TO TOTAL ASSETS AND 0.5% OF ADMINISTRATIVE EXPENSES. 20. AS REGARDS INDIRECT INTEREST EXPENDITURE, IF IT CAN BE PROVED THAT THE ENTIRE BORROWALS, ON WHICH INTEREST EXPENDITURE HAS BEEN INCURRED DURING THE YEAR, HAS BEEN APPLIED FOR THE PURPOSE OF THE BUSINESS, THEN NO PART OF THE BORROW ALS CAN BE TAKEN TO BE INDIRECTLY APPLIED FOR INVESTMENTS. THE REFORE IF THE ENTIRETY OF BORROWALS CAN BE ESTABLISHED TO HAVE BE EN UTILISED FOR THE PURPOSE OF BUSINESS AND THEREFORE COULD NOT HAVE BEEN USED FOR THE PURPOSE OF INVESTMENT, THEN THERE CAN BE DISALLOWANCE EVEN IN RESPECT OF INDIRECT INTEREST E XPENDITURE. THIS POINT HAS NOT BEEN EXAMINED BY THE LOWER AUTHO RITIES. 21. WE THEREFORE SET ASIDE THIS ISSUE TO THE FILES OF THE AO TO REWORK THE DISALLOWANCE UNDER SECTION 14A AFTER EXA MINING WHETHER THE BORROWALS ON WHICH INTEREST PAYABLE IN THE CURRENT YEAR, HAS BEEN UTILIZED ONLY FOR THE PURPOSE OF BUS INESS OR COULD ANY PART OF IT HAVE BEEN UTILIZED FOR FRESH I NVESTMENTS DURING THE YEAR. THEREAFTER THE AO MAY REWORK THE DISALLOWANCE OF INDIRECT EXPENDITURE INTEREST THAT MAY HAVE 10 ITA NOS. 99 & 1435/HYD/2012 M/S BHAGYANAGAR INDIA LTD. BEEN UTILISED FOR MAKING INVESTMENTS WHICH EARNS IN TEREST FREE INCOME IN ACCORDANCE WITH LAW AFTER GIVING REASONAB LE OPPORTUNITY TO THE ASSESSEE. IN THE CIRCUMSTANCES T HIS GROUND OF APPEAL REGARDING DISALLOWANCE U/S.14A IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 22. IN THE RESULT, THE APPEAL OF THE ASSESSEE BEING ITA NO. 99/HYD/2012 IS PARTLY ALLOWED FOR STATISTICAL PURPO SES. ITA NO. 1435/HYD/2012 FOR AY 2009-10 23. GROUND NO. 1 IS GENERAL IN NATURE. 24. GROUND NO. 2 REGARDING SUSTAINING ADDITION OF R S. 63,32,610/- BEING AMORTIZATION OF EXPENSES U/S 35DF OF THE IT ACT, 1961 IN RELATION TO EXPENDITURE INCURRED OF FC CB BONDS, HAS NOT BEEN PRESSED BY THE LEARNED COUNSEL AT THE TIME OF HEARING BEFORE US, THEREFORE, THIS GROUND IS DISMIS SED AS NOT PRESSED. 25. GROUND NO. 3 IS DIRECTED AGAINST THE ACTION OF THE CIT(A) IN CONFIRMING THE DISALLOWANCE U/S 14A OF THE ACT A T RS. 39,42,577/-. 26. SIMILAR ISSUE HAS BEEN DECIDED BY US IN ITA NO. 99/HYD/2012 VIDE PARAS 19 TO 21 WHEREIN WE HAVE SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONSIDERATION. RESPECTFULLY FOLLOWING THE CONCLUSIO NS DRAWN 11 ITA NOS. 99 & 1435/HYD/2012 M/S BHAGYANAGAR INDIA LTD. THEREIN, WE REMIT THIS ISSUE ALSO TO THE FILE OF TH E ASSESSING OFFICER WITH IDENTICAL DIRECTIONS. 27. IN THE RESULT, THIS APPEAL BEING ITA NO. 1435/H YD/2012 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 28. TO SUM UP BOTH THE APPEALS UNDER CONSIDERATION ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 10/05/2013. SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGHAVA N) ACCOUNTANT MEMBER JUDICIAL MEMBE R HYDERABAD, DATED: 10 TH MAY, 2013. KV COPY TO:- 1) M/S BHAGYANAGAR INDIA LTD., C/O M/S SEKHAR & CO., 133/4, R.P. ROAD, SECUNDERABAD. 2) DCIT, CIRCLE 1(3), AAYAKAR BHAVAN, BASHEERBAGH HYDERABAD. 3) THE CIT (A)-II, HYDERABAD 4) THE CIT-I, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. S.NO DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 12 ITA NOS. 99 & 1435/HYD/2012 M/S BHAGYANAGAR INDIA LTD. 6. KEPT FOR PRONOUNCEMENT ON SR. P. S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER