The DCIT, Central Circle-2(2), Ahmedabad V. Ankur Protein Industries Ltd., Ahmedabad

ITSSA 110/AHD/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9062 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-12-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 01-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P SHARMA
• Assessee Lawyers: J P SHAH
• Keywords: Business income; Depreciation; Business expenditure; Question of law; Unabsorbed depreciation; Revenue expenditure
• Section: 143(3); 153A; 37; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE DCIT, CENTRAL CIRCLE - 2(2), AHMEDABAD (APPELLANT) VS ANKUR PROTEIN INDUSTRIES LTD. PANCHRATNA ESTATE, CHANGODAR, AHMEDABAD - 382213 PAN: AABCM0541N (RESPONDENT) REVENUE BY : S H RI O.P. SH ARMA , CIT - D . R. ASSESSEE BY: SHRI J.P. SHAH, A.R. DATE OF HEARING : 06 - 12 - 2 018 DATE OF PRONOUNCEMENT : 13 - 12 - 2 018 / ORDER P ER BENCH : - THESE SEVEN APPEALS FILED B Y REVENUE FOR A. Y. 2006 - 07 TO 2012 - 13 , ARI SE FROM ORDER OF THE CIT(A) - 12 , AHMEDABAD DATED 21 - 11 - 2 015 , IN PROCEEDINGS UNDER SECTION 153A R.W.S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. AS THE FACTS AND ISSUES IN ALL THE SEVEN APPEALS ARE SIMILAR, SO, WE TAKE FACTS OF GROUND NO S . 1 & 2 OF IT(SS)A NO. 110/AHD/2016 AS THE LEAD CASE AND ITS FINDINGS WILL BE APPLICABLE IN ALL THE REMAINING SEVEN APPEALS I.E. IT(SS)A NOS. 111 TO 115 & 816/AHD/2016 OF THE REVENUE FOR THE SAKE OF CONVENIENCE. 3 . THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - IT(SS) A NO. 110/AHD/2016 I T (SS) A NO S . 110 TO 115 & 816 / A HD/20 16 A SSESSMENT YEAR S 200 6 - 07 TO 2012 - 13 I .T(SS) . A NO S . 110 TO 115 & 816 /AHD/20 1 6 A.Y. 2006 - 07 TO 2012 - 13 PAGE NO D CIT VS. ANKUR PROTEIN INDUSTRIES LTD. 2 1. 'ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND/OR ON FACTS IN CARRY FORWARD OF UNABSORBED DEPRECIATION OF RS.3,74,81,609/ - THOU GH CIRCULAR NO.14 OF 2001 HAD CLARIFIED THAT THE AMENDMENT TO THE FINANCE ACT WAS PROSPECTIVE, WHICH HAD BEEN REJECTED BY THE AO.' 2. 'ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND/OR ON FACTS IN FRESH CLAIM OF BUS INESS EXPENSES OF RS.62,11,877/ - THOUGH IT WAS NOT TENABLE IN LAW AS THE ASSESSEE HAD NOT FILED SUCH CLAIM IN THE RETURN OF INCOME.' 4. BRIEF FACT OF THE CASE IS THAT A SEARCH ACTION U/S. 132 OF THE ACT WAS C ARRIED OUT IN THE GROUP CASES OF ANKUR DALAL GR OUP ON 2 8 TH MARCH, 2012 . THEREAFTER IN ACCORDANCE WITH THE PROVISION OF SECTION 153A OF THE ACT , A NOTICE WAS ISSUED ON 5 TH DECEMBER, 2012 AND IN RESPONSE THE ASSESSEE HAS FILED ITS RETURN OF INCOME ON 28 TH JAN, 2013 DECLARING TOTAL INCOME AT NIL. SUBSEQ UENTLY, THE NOTICE U/S. 143(2) OF THE ACT WAS ISSUED ON 11 TH JUNE, 2013. FURTHER FACT S OF THE CASE ARE DISCUSSED UNDER THE RESPECTIVE GROUND OF APPEAL FILED BY THE REVENUE. FIRST GROUND OF APPEAL: CARRY FORWARD OF UNABSORBED DEPRECIATION OF RS. 3,74,81,6 09/ - 5 . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS CLAIMED UNABSORBED DEPRECIATION DURING THE YEAR UNDER CONSIDERATION. HE HAS FURTHER NOTICED THAT AS PER RETURN OF INCOME , THE ASSESSEE HAS BUSINESS LOS S AND UNABSORBED DEPRECIATION OF PREVIOUS YEARS AND SET OFF HAS BEEN CLAIMED BY THE ASSESSEE FOR THE LOSSES ON ACCOUNT OF DEPRECIATION INCURRED BY IT IN ASSESSMENT YEAR 1995 - 96 & 1996 - 97 . HE FURTHER NOTICED THAT THE ASSESSEE HAS S HOWN BUSINESS INCOME OF R S. 22 , 26 , 622/ - AND CLAIMED SET OFF FOR BUSINESS LOSSES FOR ASSESSMENT YEAR 1998 - 99. HE HAS OBSERVE D THAT THE ASSESSEE HAS CARRIED FORWARD THE ENTIRE DEPRECIATION LOSS OF RS. 6 , 32 , 30 , 622/ - TO THE NEXT ASSESSMENT YEAR. THE ASSESSING OFFICER WAS OF THE VIEW THAT UN - ABSORBED DEPRECIATION PRIOR TO ASSESSMENT YEAR 2003 - 04 WAS ALLOWED TO BE CARRIED FORWARD AS NORMAL BUSINESS LOSS T HEREFORE, THE ASSESSEE CANNOT CLAIM BENEFIT OF UNABSORBED DEPRECIATION ONCE 8 YEARS ARE LAPSED. I .T(SS) . A NO S . 110 TO 115 & 816 /AHD/20 1 6 A.Y. 2006 - 07 TO 2012 - 13 PAGE NO D CIT VS. ANKUR PROTEIN INDUSTRIES LTD. 3 CONSEQUENTLY, THE ASSESSING OFFICER HAD DETERMINED THE UNABSORBED DEPRECIATION TO BE CARRIED OUT FOR ASSESSMENT YEAR 2007 - 08 TO THE AMOUNT OF RS. 2 , 57 , 49 , 0 13/ - AGAINST THE AFORESAID CLAIM OF THE ASSESSEE. 6 . AGAINST THE DECISION OF ASSESSING OFFICER, THE ASSESSEE HAS PREFERRED APPEAL BEF ORE THE LD. CIT(A). THE LD. CIT(A) HAS AL LOWED THE CLAIM OF THE ASSESSEE . RELEVANT PART OF DECISION OF LD. CIT(A) IS REPRODUCED AS UNDER: - 4.4 I HAVE GIVEN A CAREFUL AND THOUGHTFUL CONSIDERATION TO THE RIVAL CONTENTIONS. AS IS CLEAR, THE CONTROVERSY PER TAINS TO THE CLAIM OF SET - OFF OF CARRIED FORWARD DEPRECIATION, BROUGHT FORWARD FROM AY 95 - 96 TO AY 2001 - 2002. THERE IS NO CONTROVERSY WITH REGARD TO THE FACT THAT DURING THE RELEVANT PERIOD THE CLAIM OF DEPRECIATION WAS MADE AND ALLOWED - TO BE CARRIED FORWA RD AS TABULATED BY THE AO ON PAGE 2 OF THE ASSESSMENT ORDER. THE LD. AO'S ONLY OBJECTION, AS NARRATED BY HIM IN TABLE AVAILABLE IN THE ASSESSMENT ORDER, IS THAT THE AMENDMENT TO S. 32(2) BROUGHT IN BY FINANCE ACT, 2001, IS EFFECTIVE FROM 1/4/2002 FOR AND F ROM AY 2002 - 03, AND THEREFORE, THE CLAIM OF DEPRECIATION FOR AYS PRIOR TO AY 2002 - 03 CANNOT SURVIVE FOR MORE THAN 8 SUBSEQUENT ASSESSMENT. IN OTHER WORDS, THE AO IS OF THE OPINION THAT FOR THE CLAIMS OF SET OFF EVEN FOR THE AY AFTER AY 2002 - 03 AND THEREAFT ER, THOUGH S. 32(2) AS AMENDED PROVIDES FOR COMPLETE IDENTITY AND MERGER OF CARRIED FORWARD AND CURRENT DEPRECIATION (AND AN 'UNLIMITED LIFE' FOR SET - OFF), THE CARRIED FORWARD DEPRECIATION FOR AYS PRIOR TO AY 02 - 03 WOULD STILL RETAIN THE ORIGINAL IDENTITY AND LIMITED LIFE' (OF EIGHT YEARS) AS PRESCRIBED UNDER PRE - AMENDMENT 32(2). AS AGAINST THIS, THE LD. AR HAS RELIED ON BOARD CIRCULAR AND VARIOUS AUTHORITIES AS NARRATED BY THE AO AND ALSO REITERATED BEFORE ME, TO CONTEND THAT THE AO'S UNDERSTANDING OF S. 3 2(2) IS ERRONEOUS. FURTHER, IT IS SUBMITTED THAT THE LESS THAN EIGHT YEAR OLD CARRIED FORWARD DEPRECIATION STILL SURVIVING AS ON 1/4/2002 WOULD GET A FRESH AND 'UNLIMITED LIFE' ON ACCOUNT OF REPLACEMENT OF S. 32(2) WITH EFFECT FROM 1/4/2002, AND OLD PROVIS ION OF LIMITED LIFE, WOULD NOT AND CANNOT CONTINUE TO GOVERN THE 'SURVIVING' CARRY FORWARD AFTER 1/4/2002. AFTER GIVING A CAREFUL CONSIDERATION AND AFTER MINUTELY PERUSING THE PROVISIONS BOTH PRE AND POST - AMENDMENT, AND AFTER ALSO PERUSING THE AUTHORITIES CAREFULLY, I FIND THAT THE QUESTION OF LAW IN CONTROVERSY IS CLEARLY COVERED BY THE DECISION OF THE JURISDICTION HC IN GUJARAT THEMIS BIOSYN LTD. (SUPRA) AS ALSO BY GENERAL MOTORS (SUPRA), IN FAVOUR OF THE APPELLANT, AS IT HAS CLEARLY BEEN HELD THEREIN THA T IN VIEW OF CIRCULAR NO. 14 OF 2001, THE UNABSORBED DEPRECIATION FOR THE INTERVENING PERIOD OF AND FROM AY 95 - 96 TO AY 2001 - 02 GOT CARRIED FORWARD TO AY 02 - 03 AND THEREAFTER GOT MERGED THEREWITH AND BECAME PART THEREOF, THUS ELIGIBLE FOR FURTHER AND UNRES TRICTED CARRY FORWARD. THUS, AND THEREFORE, THE APPELLANT IS HELD ELIGIBLE FOR UNLIMITED CARRY FORWARD AND SET - OFF OF DEPRECIATION AS CLAIMED, SUBJECT HOWEVER, TO THE CORRECT QUANTUM AND QUANTIFICATION OF SUCH CARRY FORWARD ON THE BASIS OF SUCH CLAIMS MADE AND ALLOWED IN RESPECTIVE RETURNS OF INCOME FILED FOR AY 95 - 96 TO 2001 - 02 TO BE PROPERLY VERIFIED BY THE AO. 7. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD CAREFULLY. THE ISSUE IS PERTAINED TO THE CLAIM OF SET - OFF OF CARRIED FORWARD DEPRECIATION, BROUGHT FORWARD FROM AY 95 - 96 TO AY 2001 - 2002.WE CONSIDER THAT THE IMPUGNED ISSUE IN APPEAL IS CLEARLY COVERED BY THE DECISION OF THE JURISDICTION HC IN I .T(SS) . A NO S . 110 TO 115 & 816 /AHD/20 1 6 A.Y. 2006 - 07 TO 2012 - 13 PAGE NO D CIT VS. ANKUR PROTEIN INDUSTRIES LTD. 4 GUJARAT THEMIS BIOSYN LTD. AND BY GENERAL MOTORS , IN FAVOUR OF THE ASSESSEE, AS IT HA S CLEARLY BEEN HELD THEREIN THAT IN VIEW OF CIRCULAR NO. 14 OF 2001, THE UNABSORBED DEPRECIATION FOR THE INTERVENING PERIOD OF AND FROM AY 95 - 96 TO AY 2001 - 02 GOT CARRIED FORWARD TO AY 02 - 03 AND THEREAFTER GOT MERGED THEREWITH AND BECAME PART THEREOF, THUS ELIGIBLE FOR FURTHER AND UNRESTRICTED CARRY FORWARD . WE HAVE NOTICED THAT THE CO - ORDINATE BENCH OF ITAT AHMEDABAD VIDE ITA NO. 2393/AHD/2013 DATED 03 - 05 - 2017 IN THE CASE OF GUJARAT LEASE FINANCE LTD HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF ASSESS EE. THE PART OF THE JUDICIAL FINDINGS AND THE PRINCIPLES LAID DOWN BY THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF GENERAL MOTORS INDIA(P) LTD ARE REPRODUCED HERE AS UNDER : - WE ARE OF THE CONSIDERED OPINION THAT ANY UNABSORBED DEPRECIATION AVAIL ABLE TO AN ASSESSEE ON 1ST DAY OF APRIL 2002 (A.Y. 2002 - 03) WILL BE DEALT WITH IN ACCORDANCE WITH THE PROVISIONS OF SECTION 32(2) AS AMENDED BY FINANCE ACT, 2001. AND ONCE THE CIRCULAR NO. 14 OF 2001 CLARIFIED THAT THE RESTRICTION OF 8 YEARS FOR CARRY FORW ARD AND SET OFF OF UNABSORBED DEPRECIATION HAD BEEN DISPENSED WITH, THE UNABSORBED DEPRECIATION FROM A.Y. 1997 - 98 UPTO THE A.Y. 2001 - 02 GOT CARRIED FORWARD TO THE ASSESSMENT YEAR 2002 - 03 AND BECAME PART THEREOF, IT CAME TO BE GOVERNED BY THE PROVISIONS OF SECTION 32(2) AS AMENDED BY FINANCE ACT, 2001 AND WERE AVAILABLE FOR CARRY FORWARD AND SET OFF AGAINST THE PROFITS AND GAINS OF SUBSEQUENT YEARS, WITHOUT ANY LIMIT WHATSOEVER. T HE HON BLE HIGH COURT OF GUJARAT IN THE CASE OF CIT VS. GUJARAT THEMIS BIO L TD. (2014) 44 TAXMAN HAS FOLLOWED THE JUDICIAL FINDINGS LAID DOWN IN THE DECISION OF THE GENERAL MOTORS (P) LTD. 6. WE HAVE HEARD THE RIVAL CONTENTIONS. WE HAVE ALSO PERUSED THE JUDICIAL PRONOUNCEMENT DELIVERED BY THE HON BLE HIGH COURT OF GUJARAT IN TH E CASE OF GENERAL MOTORS INDIA (P.) LTD VS. DCIT (2012) 25 TAXMANN.COM WHICH WAS ELABORATED IN DETAIL BY THE LD. CIT(A) IN HIS ORDER AS SUPRA IN THIS ORDER. WE HAVE ALSO PERUSED THE JUDICIAL PRONOUNCEMENT OF HON BLE GUJARAT HIGH COURT IN THE CASE OF CIT V S. GUJARAT THEMIS BIOSYN LTD. [2014] 44 TAXMANN. COM 204 (GUJARAT) IN WHICH AFTER CONSIDERING THE JUDGMENT GIVEN IN GENERAL MOTORS INDIA (P) LTD, IT WAS HELD THAT CARRY FORWARD OF UNABSORBED DEPRECIATION CONCERNING IMPUGNED ASSESSMENT YEARS COULD BE SET OF F IN SUBSEQUENT YEARS WITHOUT ANY SET TIME LIMIT. IN VIEW OF THE ABOVE JUDICIAL PRONOUNCEMENT ON THE ISSUE AND THE ELABORATE FINDINGS OF THE LD. CIT(A), WE DO NOT FIND ANY REASON TO INTERFERE IN THE DECISION OF THE LD. CIT(A). RESPECTFULLY FOLLOWING THE DECISION OF THE HON BLE HIGH COURT OF GUJARAT AND THE CO - ORDINATE BENCH AS SUPRA, WE DO NOT FIND ANY ERROR IN THE FINDING OF LD. CIT(A) HOLDING THAT THE ASSESSEE IS HELD ELIGIBLE FOR UNLIMITED CARRY FORWARD AND I .T(SS) . A NO S . 110 TO 115 & 816 /AHD/20 1 6 A.Y. 2006 - 07 TO 2012 - 13 PAGE NO D CIT VS. ANKUR PROTEIN INDUSTRIES LTD. 5 SET - OFF OF DEPRECIATION AS CLAIMED, SUBJECT HOWEVER, TO THE CORRECT QUANTUM AND QUANTIFICATION OF SUCH CARRY FORWARD ON THE BASIS OF SUCH CLAIMS MADE AND ALLOWED IN RESPECTIVE RETURNS OF INCOME FILED FOR AY 19 95 - 96 TO 2001 - 02 TO BE PROPERLY VERIFIED BY THE AO. T HEREFORE, THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. SECOND GROUND OF APPEAL: FRESH CLAIM OF BUSINESS EXPENSES OF RS. 621187 7 / - 8 . DURING THE COURSE O F APPELLATE PROCEEDINGS BEFORE LD. CIT(A), IT WAS SUBMITTED THAT ASSESSEE HAS INCURRED CERTAIN REVENUE EXPENSES DURING THE YEAR W HICH HAD BEEN CAPITALIZED AS DEFERRED REVENUE EXPENDITURE AND 1/10 OF THE SAME WERE CLAIMED AS EXPENSES FROM ASSESSMENT YEAR 200 8 - 09 AND T HE ASSESSING OFFICER HAS DISALLOWED THIS EXPENDITURE ON THE GROUND THAT T HE SAME WERE PRIOR PERIOD EXPENSES . ACCORDIN GLY, THE ASSESSEE HAS MADE A FRESH CLAIM OF EXPENDITURE OF RS.63 , 31 , 089/ - INCURRED DURING THE YEAR UNDER CONSIDERATION . HOWEVER, THE ASSESSING OFFICER HAS REJECTED THE CLAIM ON THE GROUND THAT A FRESH CLAIM OF EXPENSES CANNOT BE ADMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S. 153A AND THE A SSESSEE HAD THE RIGHT TO CLAIM EXPENSES ONLY AT THE TIME OF FILING OF ORIGINAL RETURN OF INCOME U/S. 139. IT IS UNDISPUTED FACT THAT TOTAL EXPENDITURE OF RS. 1 , 88 , 23 , 262 WAS INCURRED IN THE ASSESSMENT YEAR 20 05 - 06, 2006 - 07 AND 2007 - 08 . ALL THESE EXPENSES WERE OF REVENUE NATURE BUT BECAUSE OF NATURE OF EXPENDITURE THEY WERE CLAIMED AS DEFERRED REVENUE EXPENDITURE AND THEY WERE NOT CLAIMED AS EXPENSES IN THE YEAR IN WHICH THEY WERE INCURRED AT THE TIME OF FILING OF RETURN OF INCOME . FROM THE ASSESSMENT YEAR 2008 - 09 AND ONWARDS 1/10 TH OF DEFERRED REVENUE EXPENDITURE W ERE WRITTEN OFF AND CLAIMED AS EXPENSES WHILE FILING OF RETURN OF INCOME. HOWEVER, THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF DEFERRED REVEN UE EXPENDITURE IN ASSESSMENT YEAR 2008 - 09 AND ONWARDS, THEREFORE, TH E ASSESSEE HAS CLAIMED TOTAL EXPENSES OF RS.63 , 31 , 089/ - WHICH WERE INCURRED DURING THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER HAS NOT ALLOWED THE CLAIM ON THE REASON AS STATED AB OVE IN THIS ORDER. I .T(SS) . A NO S . 110 TO 115 & 816 /AHD/20 1 6 A.Y. 2006 - 07 TO 2012 - 13 PAGE NO D CIT VS. ANKUR PROTEIN INDUSTRIES LTD. 6 9. THE LD. CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE. THE RELEVANT PART OF THE DECISION OF LD. CIT(A) IS REPRODUCED AS UNDER : - 5.5 I HAVE GIVEN CAREFUL CONSIDERATION TO THE FACTS AND RIVAL C ONTENTIONS AS AVAILABLE. I FIND THAT THE AO DISALLOWED THE CLAIM IN AND FROM AY 08 - 09 ON THE GROUND OF EXPENSES BEING PERTAINING TO PRIOR PERIOD. ADDITIONALLY, THE AO ALSO LOOSELY, BUT WITHOUT NARRATING THE BASIS, OBSERVED THAT THE EXPENSES ARE OF CAPITAL NATURE. AO ALSO, IMPLIEDLY, IT SEEMS, IN VIEW OF THE FACT THAT APPELLANT, OBVIOUSLY, HAD NOT MADE THE CLAIM IN RESPECTIVE AY (AY 06 - 07 AND 07 - 08) WHEN THE EXPENDITURE WAS ACTUALLY INCURRED, ALSO DISALLOWED THE ALTERNATE CLAIM OF ALLOWING THE SAME IN THE YEAR OF INCURRING ON THE GROUND THAT THE AL TERNATE CLAIM IS A FRESH CLAIM WHICH CANNOT BE ENTERTAINED U/S 153A. AFTER CAREFULLY CONSIDERING THE RELEVANT FACTS AND CONTENTIONS, I FIND THAT THE APPELLANT HAS, FOR RAISING THE TRESH' CLAIM OF ALLOWANCE, DRAWN SUPPORT ONLY FROM THE OBSERVATIONS, FINDING S AND CONSEQUENT DISALLOWANCE OF THE CLA IMS OF 1/10 DEFERRED REVENUE EXPENDITURE IN SUBSEQUENT YEARS (ALSO UNDER APPEAL WITH ME) WHEREIN FOR THOSE YEARS THE DISALLOWANCES HAVE NOT BEEN MADE PRECISELY FOR THE REASON THAT THE EXPENDITURE PERTAINS TO PREVIOUS PERIOD. THE LD. AO HAS NEITHER DOUBTED, NOR BROUGHT ANY ADVERSE MATERIAL ON RECORD TO QUESTION THE BASIC ALLOWABILITY OF CLAIM U/S 37. THUS, THE CLAIM MADE FOR THE FIRST TIME IN RETURN U/S 153A IS ARISING OUT OF THE AO'S OWN ACTION OF DISALLOWANCE IN SUBS EQUENT YEARS AND IS THUS BONA - FIDE AND RIGHTLY MADE AND CLEARLY ALLOWABLE IN THE FACTS AND CIRCUMSTANCES. THE DETAILS OF THE CLAIM AS TABULATED ABOVE AND AS SUBMITTED BEFORE ME ALSO CLEARLY INDICATE THE ALLOWABILITY U/S 37 AS REVENUE EXPENSES EXCEPTING A S MALL AMOUNT OF ROC FEES AND LISTING EXPENSES OF RS. L,19,212/ - WHICH CLEARLY ARE CAPITAL IN NATURE. THE APPELLANT ALSO SUBMITTED THAT THERE IS NO MATERIAL TAX - EFFECT IF THE EXPENSE IS ALLOWED IN THE YEAR OF INCURRING AS AGAINST THE YEAR OF CLAIM AS DEFERRED REVENUE EXPENSE. I AM PERSUADED BY THE CONTENTIONS RAISED ON BEHALF OF THE APPELLANT. ONLY IF THE OUTGO IS CAPITAL IN NATURE, OR IS INCURRED NOT WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF OF BUSINESS, CAN THE CLAIM BE REJECTED. NOT ONLY AO HAS NOT GIVEN A NY BASIS FOR HIS OBSERVATION THAT THE EXPENDITURE IS CAPITAL IN NATURE, EVEN THE TABLE OF EXPENSES AS ABOVE AND THE ANNUAL ACCOUNTS FILED BEFORE ME ESTABLISH THAT THE EXPENSES (EXCEPT ROC AND LISTING FEES TOTALLING TO RS. 1,19,212/ - ) ARE ALLOWABLE U/S 37(1 ). MOREOVER, THE TRESH CLAIM' MADE BY THE APPELLANT EMANATES FROM DISALLOWANCE OF DEFERRED REVENUE EXPENDITURE IN SUBSEQUENT YEARS, AND THEREFORE, I AGREE WITH THE AR THAT THE ALTERNATE CLAIM COULD NOT HAVE BEEN REJECTED BY THE AO AT THE THRESHOLD ON THE G ROUND OF SAME HAVING BEEN RAISED FOR THE FIRST TIME UNDER 153A PROCEEDINGS. THE NOMENCLATURE OR ACCOUNTING ENTRY IN ITSELF CANNOT DECIDE THE ALLOWABILITY OR OTHERWISE OF A CLAIM. THE CLAIM IS AK;O NOT THE TRESH CLAIM' AS MADE OUT BY THE AO, BUT IS ESSENTIA LLY A NEWER VERSION OF AN OLD CLAIM IN CONSEQUENCE OF AO'S OWN ACTION OF DISALLOWING THE ORIGINAL CLAIM OF DEFERRED EXPENSES IN SUBSEQUENT YEAR. THEREFORE, IT IS MY CONSIDERED OPINION THAT THE CLAIM AS ABOVE (LESS RS. 1,19,212) FOR THE YEAR UNDER REFERENC E IS WRONGLY REJECTED BY THE AO, AS THE SAME REPRESENTS REVENUE EXPENSES INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF APPELLANT'S BUSINESS DURING THE AR UNDER REFERENCE. MY CONCLUSION IS ALSO FORTIFIED BY THE RATIO OF ASHIMASYNTEX (SUPRA) LAYING DOW N THE PROPOSITION THAT EVEN WHEN ACCOUNTING ENTRY FOR DEFERRED REVENUE EXPENSE IS PASSED IN THE BOOKS, CORRECT ALLOWANCE BASED ON THE NATURE OF EXPENSES MUST, BE ALLOWED. ACCORDINGLY, THE AO WAS NOT JUSTIFIED IN REJECTING THE CLAIM. THE CLAIM IS THUS HELD ADMISSIBLE AND ALLOWABLE. THE GROUND NO.2 ALSO THUS SUCCEEDS. AS A PASSING REFERENCE, IT IS OBSERVED HERE FOR THE SAKE OF COMPLETENESS THAT THE APPELLANT'S RELATED GROUND IN SUBSEQUENT YEARS WHEN THE DEFERRED REVENUE EXPENSES ARE CLAIMED ARE BEING REJECTED AS OBSERVED IN THE RELEVANT APPELLATE ORDERS. I .T(SS) . A NO S . 110 TO 115 & 816 /AHD/20 1 6 A.Y. 2006 - 07 TO 2012 - 13 PAGE NO D CIT VS. ANKUR PROTEIN INDUSTRIES LTD. 7 10 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD CAREFULLY. IT IS NOTICED THAT ALL THESE EXPENSES WERE OF REVENUE NATURE AND HAD BEEN INCURRED FOR THE PURPOSE OF BUSINESS. THE A SSESSING OFFICER HAS NOT ALLOWED THE CLAIM WHEN THE ASSESSEE HAS CLAIMED THESE EXPENSES AS DEFERRED REVENUE EXPENDITURE AS 1/10 OF SUCH EXPENSES. THE ASSESSEE HAS MADE THIS AL TERNATIVE CLAIM OF EXPENSES AFTER THE ASSESSING OFF ICER HAS DISALLOWED ITS CLAIM OF DEFERRED REVENUE EXPENDITURE WITHOUT ANY PROPER REASON. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE LD. COUNSEL HAS ALSO PLACED RELIANCE IN THE CASE OF CIT VS. B.G. SHI R KA CONSTRUCTION TECHNOLOGY PVT. LTD. (2017) 395 ITR 371. VIDE ABOVE REFERRE D JUDGMENT , THE HON BLE HIGH COURT OF BOMBAY HAS HELD T HAT THE ASSEEEE IS REQUIRED TO FURNISH FRESH RETURN OF INCOME FOR EACH OF THE SIX ASSESSMENT YEARS IN REGARD TO WHICH A NOTICE HAS BEEN ISSUED U/S. 153A(1) O F THE ACT. SECTION 153A(1) ITSELF PROVIDES THAT ON FILING OF THE RETURN CONSEQUENT TO NOTICE THE PROVISION OF THE ACT WILL APPLY TO THE RETURN OF INCOME SO FILED. CONSEQUENTLY, THE RETURN FILED U/S. 153A(1) OF THE ACT IS A RETURN FURNISHED IN 139 OF THE ACT. THEREFORE, THE PROVISIONS OF THE ACT WHICH WOULD BE OTHERWISE APPLICABLE IN THE CASE OF AN RETURN FILED IN THE REGULAR COURSE U/S. 139(1) OF THE ACT WOULD ALSO CONTINUE TO APPLY IN THE CASE OF A RETURN FILED U/S. 153A OF THE ACT. WE ARE FULLY INCLINED WITH THE FINDINGS OF THE LD.CIT(A) THAT T HE CLAIM MADE FOR THE FIRST TIME IN RETURN U/S 153A IS ARISING OUT OF THE AO'S OWN ACTION OF DISALLOWANCE IN SUBSEQUENT YEARS AND IS THUS BONA - FIDE AND RIGHTLY MADE AND CLEARLY ALLOWABLE IN THE FACTS AND CIRCUMSTANCES. THE DETAILS OF SUCH EXPENDITURE OF RS . 63 , 31 , 089/ - IS GIVEN AS UNDER: - PARTICULARS AMOUNT ADVERTISEMENT EXPENSE RS. 4,57,522 LISTING FEES RS.65,050 FINANCE CHARGES RS.4,43,105 INTEREST TERM LOAN RS.2,50,837 INTEREST OTHER RS.48,33,814 I .T(SS) . A NO S . 110 TO 115 & 816 /AHD/20 1 6 A.Y. 2006 - 07 TO 2012 - 13 PAGE NO D CIT VS. ANKUR PROTEIN INDUSTRIES LTD. 8 RENT RATES, AND TAXES RS. 1,35,504 EXC ISE DUTY RS.91,095 ROC EXPENSES RS.54,162 TOTAL EXPENSE RS.63,31,089 IT IS DEMONSTRATED FROM THE DETAIL OF EXPENSES THAT EXCEPT ROC FEES AND LISTING EXPENSES OF RS. L,19,212/ - THE EXPENSES ARE REVENUE IN NATURE AND AO HAS NOT GIVEN ANY BASIS T HAT THE EXPENDITURE IS CAPITAL IN NATURE. AFTER CONSIDERING THE ABOVE JUDICIAL FINDING AND THE FACT WE ARE INCLINED WITH THE LD.CIT(A) THAT BECAUSE OF DISALLOWING THE ORIGINAL CLAIM OF DEFERRED REVENUE EXPENSES THE ASSESSEE HAS RIGHTLY RAISED THE ALTERNATE CLAIM OF EXPENSES INCURRED DURING THE YEAR UNDER CONSIDERATION FOR THE FIRST TIME UNDER 153A PROCEEDINGS. IN THE LIGHT OF THE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY ERROR IN THE DECISION OF LD. CIT(A), THEREFORE, T HE SAME IS DISMISSED. 11. IN THE RESULT, APPEAL IT(SS)A 110/AHD2016 OF THE REVENUE IS DISMISSED. 12. IN THE COMBINED RESULT, ALL THE SEVEN APPEAL IT(SS)A NOS. 110 TO 115 & 816 /AHD2016 OF THE REVENUE ARE DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 13 - 12 - 201 8 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 13 /12 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. I .T(SS) . A NO S . 110 TO 115 & 816 /AHD/20 1 6 A.Y. 2006 - 07 TO 2012 - 13 PAGE NO D CIT VS. ANKUR PROTEIN INDUSTRIES LTD. 9 BY ORDER/ , / ,