The DCIT.(OSD)Circle-8,, Ahmedabad v. M/s. Steelco Gujarat Ltd., Ahmedabad

1 IN THE INCOME TAX APPELLATE TRIBUNAL A-BENCH AHMEDABAD. BEFORE: SHRI G.D. AGARWAL VICE PRESIDENT AND SHRI BHAVNESH SAINI JUDICIAL MEMBER ITA NO.178 AND 349/AHD/2007 (ASSESSMENT YEAR 2003-2004) DY. COMMISSIONER OF INCOME-TAX (OSD) CIRCLE-8 AHMEDABAD. VERSUS M/S. STEELCO GUJARAT LTD. 101 1 ST FLOOR H.K. HOUSE ASHRAM ROAD AHMEDABAD. STEELCO GUJARAT LTD. 101 1 ST FLOOR H.K. HOUSE ASHRAM ROAD AHMEDABAD. ITO WARD 8(2) AHMEDABAD. (APPELLANT) (RESPONDENT) PAN:AADCS 0880 L FOR THE ASSESSEE: SHRI RAJEEV AGARWAL CIT DR FOR THE REVENUE: SHRI. S.N. SOPARKAR SR. AD. ORDER PER G.D. AGARWAL VICE-PRESIDENT: THESE ARE TWO APPEALS ONE FILED BY THE REVENUE AND THE OTHER FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX(APPEALS)-XI V AHMEDABAD DATED 16-11-2006. 2. THE ONLY GROUND RAISED IN THE APPEAL BY THE REVE NUE READS AS UNDER: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE A.O. TO ALLOW THE BENEFIT OF CARRIED FORWARD DEPREC IATION OF RS.6 00 23 859/- WHILE CALCULATING THE INCOME U/S. 115JB OF THE I.T. ACT. 3. WHILE GROUND NOS. 1 TO 4 OF THE ASSESSEES APPEA L READS AS UNDER: 2 ITA NO.178 AND 349/AHD/2007 (ASSESSMENT YEAR 2003-2004) 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. AO IN APPLYING THE PRO VISIONS OF S. 115JB OF THE ACT ON THE APPELLANT A SICK COMPANY R EGISTERED WITH BIFR. 2. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF AO IN ADJUSTING EXTRA-ORDI NARY ITEMS OF REDUCTION OF CAPITAL AGAINST UNABSORBED DEPRECATION AND BROUGHT FORWARD BUSINESS LOSS PURSUANT TO BIFR RESTRICTING SCHEME. THESE ITEMS OF CREDITS ARE NOT ITEMS OF REVENUE NATURE AN D THEREFORE REQUIRED TO BE IGNORED WHILE CALCULATING BOOK PROFI TS FOR MAT PURPOSES U/S 115JB OF THE ACT. 3. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. AO IN NOT ALLOWING SET OFF OF LOWER OF THE BROUGHT FORWARD BOOK LOSS AND UNABSORBED DEPREC IATION AS PER THE BOOKS OF ACCOUNTS MAINTAINED BY THE APPELLANT A GAINST THE BOOK PROFIT DETERMINED BY HIM. 4. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. AO IN QUANTIFYING THE BOOK PROFIT AT RS.6 00 23 889/- WHILE WORKING OUT MAT U/S 115JB OF THE ACT. SINCE ALL THE ABOVE GROUNDS ARE INTERRELATED THEY ARE BEING DISPOSED OF TOGETHER FOR THE SAKE OF CONVENIENCE. 4. AT THE TIME OF HEARING BEFORE US IT WAS POINTED OUT BY THE LEARNED COUNSEL THAT AS PER SECTION 115JB EXPLANATION 1(VII ) THE PROFIT OF SICK INDUSTRIAL COMPANY IS TO BE EXCLUDED WHILE COMPUTIN G THE BOOK PROFIT. HE STATED THAT THE EXEMPTION BEGINS FROM THE ASSESS MENT YEAR IN WHICH THE COMPANY BECOMES A SICK INDUSTRIAL UNDERTAKING A ND IS AVAILABLE UPTO THE ASSESSMENT YEAR DURING WHICH THE NET WORTH OF S UCH COMPANY BECOMES EQUAL TO OR EXCEEDS ACCUMULATED LOSSES. IT IS NOT IN DISPUTE THAT 3 ITA NO.178 AND 349/AHD/2007 (ASSESSMENT YEAR 2003-2004) DURING THE ACCOUNTING YEAR RELEVANT TO ASSESSMENT Y EAR UNDER CONSIDERATION THE NET WORTH OF THE ASSESSEE COMPANY EXCEEDS THE ACCUMULATED LOSSES. THUS THE EXEMPTION AS PROVIDE D UNDER EXPLANATION 1(VII) WOULD BE AVAILABLE UPTO THE YEAR UNDER CONSIDERATION. FROM NEXT YEAR THE PROFIT OF THE COMPANY WOULD BE CHARGE ABLE TO BOOK PROFIT UNDER SECTION 115JB. 5. THE LEARNED DR ON THE OTHER HAND RELIED UPON THE ORDER OF THE AUTHORITIES BELOW AND HE STATED THAT AS PER EXPLANA TION RELIED UPON BY THE LEARNED COUNSEL THE EXEMPTION WOULD END FROM YEAR IN WHICH THE NET WORTH OF THE COMPANY EXCEEDS THE ACCUMULATED LOSSES . IT IS NOT IN DISPUTE THAT DURING THE ACCOUNT YEAR RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION THE NET WORTH OF THE ASSESSEE COMPANY EXCEEDED ACCUMULATED LOSSES AND THEREFORE EXEMPTION WOULD NO T BE AVAILABLE IN THE YEAR UNDER CONSIDERATION. 6. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. THE RELEVAN T FACTUAL FINDING RECORDED BY THE ASSESSING OFFICER AT PAGE-2 OF THE ASSESSMENT ORDER READS AS UNDER: AS AT MARCH 31 2003 AFTER GIVING THE EFFECT OF TH E REDUCTION IN SHARE CAPITAL AND OTHER VARIOUS CONCESSIONS AND REL IEF THE NET WORTH OF THE COMPANY BECOMES POSITIVE DURING THE YE AR. PAID UP SHARE CAPITAL RS.425495570 RESERVES AND SURPLUS RS. 48968373 RS.474463943 ACCUMULATED LOSSES AS PER BALANCE SHEET AS AT MARCH 31 2003 RS.327035482 TOTAL NET WORTH RS.147428461 ========= THE ASSESSEE COMPANY CONTINUES TO BE REGISTERED WIT H BIFR DURING PREVIOUS YEAR AS A SICK INDUSTRIAL COMPANY. 4 ITA NO.178 AND 349/AHD/2007 (ASSESSMENT YEAR 2003-2004) 7. THAT FROM THE ABOVE IT IS EVIDENT THAT AS ON 31- 03-2003 THE NET WORTH OF THE ASSESSEE COMPANY EXCEEDED THE ACCUMULA TED LOSSES. AS PER EXPLANATION-1 CLAUSE (VII) WHILE COMPUTING THE BOO K PROFIT FOLLOWING AMOUNT IS TO BE REDUCED. (VII) THE AMOUNT OF PROFITS OF SICK INDUSTRIAL COMP ANY FOR THE ASSESSMENT YEAR COMMENCING ON AND FROM THE ASSESSME NT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SAID COM PANY HAS BECOME A SICK INDUSTRIAL COMPANY UNDER SUB-SECTION (1) OF SECTION 17 OF THE SICK INDUSTRIAL COMPANIES (SPECIAL PROVIS ION) ACT 1985 (1 TO 1986) AND ENDING WITH THE ASSESSMENT YEAR DUR ING WHICH THE ENTIRE NET WORTH OF SUCH COMPANY BECOMES EQUAL TO O R EXCEEDS THE ACCUMULATED LOSSES. 8. FROM THE ABOVE IT IS EVIDENT THAT THE AMOUNT OF PROFIT OF THE SICK INDUSTRIAL UNDERTAKING IS TO BE REDUCED WHILE COMPU TING BOOK PROFIT. THE REDUCTION IS TO BE ALLOWED FROM THE YEAR IN WHICH T HE SAID COMPANY BECOMES A SICK INDUSTRIAL COMPANY AND SUCH EXEMPTIO N WILL END WITH THE ASSESSMENT YEAR IN WHICH THE NET WORTH OF THE COMPA NY EXCEEDS THE ACCUMULATED LOSSES. IT MEANS EXEMPTION WOULD BE AV AILABLE UPTO THE YEAR IN WHICH THE NET WORTH EXCEEDS THE ACCUMULATED LOSS ES BUT WILL NOT BE AVAILABLE FOR SUBSEQUENT YEARS. THUS THE YEAR IN WHICH THE NET WORTH EXCEEDS THE ACCUMULATED LOSSES WILL BE LAST YEAR O F EXEMPTION UNDER CLAUSE (VII). 9. IN VIEW OF ABOVE WE HOLD THAT FOR THE YEAR UNDE R CONSIDERATION THE AMOUNT OF PROFIT OF SICK INDUSTRIAL UNDERTAKING IS TO BE EXCLUDED FROM THE BOOK PROFIT. IT IS NOT IN DISPUTE THAT ENTIRE PROF IT OF THE ASSESSEE COMPANY IS FROM SICK INDUSTRIAL UNDERTAKING. WE ACCORDING LY ALLOW GROUND NO.1 OF THE ASSESSEES APPEAL. ONCE IT IS HELD THAT THE PROFIT OF THE SICK INDUSTRIAL UNDERTAKING IS NOT CHARGEABLE TO TAX U/S 115(JB) THE BOOK PROFIT 5 ITA NO.178 AND 349/AHD/2007 (ASSESSMENT YEAR 2003-2004) OF THE ASSESSEE COMPANY WOULD BE NIL BECAUSE THE AS SESSEE COMPANY IS HAVING ONLY ONE INDUSTRIAL UNDERTAKING WHICH IS A S ICK UNIT. IN VIEW OF THE ABOVE GROUND RAISED IN REVENUES APPEAL AS WEL L AS GROUND NOS.2 3 AND 4 OF THE ASSESSEES APPEAL WHICH ARE WITH REGA RD TO THE COMPUTATION OF THE BOOK PROFIT OF THE ASSESSEE HAVE BECOME INF RUCTUOUS ACCORDINGLY REJECTED. 10. GROUND NO.5 TO 7 OF THE ASSESSEES APPEAL READS AS UNDER: 5. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN DISALLOWING BUSI NESS LOSS OF RS.32 88 507/- ON ACCOUNT OF WRITE OFF OF ADVANCE G IVEN FOR BUSINESS PURPOSES. 6. ALTERNATIVE AND WITHOUT PREJUDICE THE LD. CIT(A ) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF AO IN NOT ALLOWING THE SAID LOSS OF RS.32 88 507/- AS TRADING/BUSINESS LOSS U/S 28 OF THE ACT. 7. ALTERNATIVE AND WITHOUT PREJUDICE THE LD. CIT(A ) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF AO IN NOT ALLOWING THE SAID LOSS OF RS.32 88 507/- AS BAD DEBT U/S 36( 1)(VII) OF THE ACT. 11. THE FACTS OF THE CASE ARE THAT DURING THE ACCOU NTING YEAR RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION THE ASSESSEE H AS CLAIMED THE DEDUCTION OF RS.52 18 507/- AS BAD DEBT DETAIL OF WHICH IS AS UNDER: 1 GANPATI CAPITAL LTD RS.18 50 000 2 STEEL AUTHORITY OF INDIA LTD. RS.19 30 259 3 GUJARAT NIPPON BIMETALS PVT. LTD. RS.14 38 507 12. THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSEE WITH THE FOLLOWING FINDINGS: 6 ITA NO.178 AND 349/AHD/2007 (ASSESSMENT YEAR 2003-2004) 4.3 THE CLAIM MADE BY THE ASSESSEE IS NOT TENABLE. BAD DEBT IS ALLOWABLY ONLY U/S. 36(2) WHICH CLEARLY STATE THAT NO SUCH DEDUCTION SHALL BE ALLOWED UNLESS SUCH DEBT OR PART THEREOF HAS BEEN TAKEN INTO ACCOUNT IN COMPUTING THE INCOME OF THE ASSESSEE OR REPRESENT MONEY LENT IN ORDINARY COURSE OF BUSINESS OF BANKING OR MONEY LENDING. THE ASSESSEE IS NOT IN THE BUSINESS OF BANKING OR MONEY LENDING. THE BAD DEBT CLAIMED BY ASSESSEE IS ALSO NOT SHOWN AS INCOME IN PRECEDING YEARS. THUS THE MAIN CONDITIONS LAID DOWN IN THE ACT ARE NOT SATISFIED SO FAR AS TH E CLAIM OF THE ASSESSEE IS CONCERNED. THE AMOUNT CLAIMED AS BAD D EBT THE AMOUNT OF ADVANCE GIVEN FOR VARIOUS PURPOSE. THE C LAIM OF THE ASSESSEE IS THEREFORE NOT TENABLE U/S. 36(2) OF THE ACT. THERE IS A SPECIFIC SECTION FOR ALLOWING CLAIM OF BAD DEBTS WH ICH IS SECTION 36(2). WHEN THE SPECIFIC CLAIMED IS NOT ALLOWABLE UNDER ACT UNDER A SPECIFIC SECTION DEALING WITH THAT ITEMS THE SAME CANNOT BE ALLOWED UNDER ANY OTHER SECTION OF THE ACT. EVEN S ECTION 37 SAYS ANY EXPENDITURE NOT BEING THE EXPENDITURE OF THE N ATURE DESCRIBED U/S. 32 TO 36 SHALL BE ALLOWED U/S. 37. THUS ACT IS VERY CLEAR THAT THE BAD DEBTS ARE ALLOWABLE U/S. 36(2) ONLY AND NOT IN ANY OTHER SECTION INCLUDING SECTION 37. SINCE CONDITIONS LA ID DOWN TO ALLOW THE CLAIMED U/S. 36(2) ARE NOT FULFILLED THE DEDUC TION CLAIMED BY THE ASSESSEE IS NOT ALLOWED. 13. BEFORE THE LD. COMMISSIONER OF INCOME TAX(APPEA LS) THE ASSESSEE CLAIMED THAT THE ADVANCE WAS GIVEN AS A TRADE ADVAN CE AND IF THE ADVANCE GIVEN WAS NOT RECOVERED THE SAME SHOULD NOT BE ALL OWED AS A BUSINESS LOSS. THE LD. COMMISSIONER OF INCOME TAX(APPEALS) ACCEPTED THE ASSESSEES CLAIM WITH REGARD TO AMOUNT RECOVERABLE FROM THE STEEL 7 ITA NO.178 AND 349/AHD/2007 (ASSESSMENT YEAR 2003-2004) AUTHORITY OF INDIA LIMITED. THE RELEVANT FINDING O F THE LD. COMMISSIONER OF INCOME TAX(APPEALS) IN THIS REGARD READS AS UNDER: 5.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE AND THE SUBMISSION AS ADVANCED BY THE APPELLANT. AS THE AP PELLANT WAS NOT ENGAGED IN THE BANKING BUSINESS OR MONEY LENDING BU SINESS THE CLAIM CANNOT BE ALLOWED AS BAD DEBT U/S. 36(2) OF T HE ACT. HOWEVER THE APPELLANTS ALTERNATIVE CLAIM THAT IT SHOULD BE ALLOWED U/S. 37 HAS TO BE CONSIDERED SEPARATELY. T HE ADVANCE GIVEN TO STEEL AUTHORITY OF INDIA WAS FOR THE PURCH ASE OF RAW MATERIAL AND HENCE WHEN THIS AMOUNT WAS NOT RECOVER ED IT IS ALLOWABLE AS TRADING LOSS U/S. 37 AND HENCE THE AMO UNT OF RS.19 30 259/- GIVEN TO THIS CONCERN IS HELD TO BE ALLOWABLE. HOWEVER FOR THE OTHER TWO ADVANCES GIVEN THE MATTE R IS QUITE DIFFERENT. THE ADVANCE GIVEN TO GANPATI CAPITAL LT D. WAS NOT FOR PURCHASING THE RAW MATERIAL AS THE APPELLANT WAS N OT PURCHASING ANY RAW MATERIAL FROM THIS CONCERN. THE AMOUNT GIV EN FOR OPENING L.C. IS NOT SUPPORTED BY ANY BY ANY EVIDENCE WHETH ER IT WAS FOR PURCHASE OF RAW MATERIAL OR FOR PURCHASE OF CAPITAL GOODS. SIMILARLY THE ADVANCE GIVEN TO GUJARAT NIPPON BIMET ALS PVT. LTD. WAS FOR DEVELOPMENT OF MARKET FOR THE APPELLANT COM PANYS PRODUCT AND IT WAS IN THE NATURE OF CAPITAL EXPENDI TURE. HENCE WHEN THE AMOUNT WAS NOT RECOVERED IT RESULTED INTO CAPITAL LOSS AND NOT A TRADING LOSS. HENCE THE CLAIM IN RESPEC T OF THESE TWO ITEMS ARE NOT ALLOWABLE AS TRADING LOSS U/S. 37 OF THE ACT. 14. FROM THE ABOVE IT IS EVIDENT THAT THE LD. COMM ISSIONER OF INCOME TAX(APPEALS) HAS RECORDED THE FINDING THAT THE AMOU NT GIVEN TO GANPATI CAPITALS LIMITED WAS FOR OPENING L.C. AND IT IS NOT CLEAR WHETHER THE L.C. WAS FOR PURCHASE OF RAW MATERIAL OR FOR PURCHASE OF CAPITAL GOODS. IN THE CASE OF GUJARAT NIPPON BIMETALS PVT. LTD. ALSO HE RECORDED THE FINDING IT 8 ITA NO.178 AND 349/AHD/2007 (ASSESSMENT YEAR 2003-2004) WAS FOR DEVELOPMENT OF MARKET AND THEREFORE WAS IN THE NATURE OF CAPITAL EXPENDITURE. HE THEREFORE DISALLOWED THE LOSS ON THE GROUND THAT IT WAS A CAPITAL LOSS NOT A TRADING LOSS. AT THE TIME OF HEARING BEFORE US IT WAS REITERATED BY THE LEARNED COUNSEL THAT THE LOSS WAS A REVENUE LOSS AND NOT A CAPITAL LOSS. HE STATED THAT L.C. WAS OPEN NOT FOR THE PURCHASE OF CAPITAL GOODS BUT FOR RAW-MATERIAL. SIMILARLY IT WAS CON TENDED THAT THE EXPENDITURE FOR THE DEVELOPMENT OF THE MARKET OF TH E GOODS WHICH IS BEING MANUFACTURED BY THE ASSESSEE CANNOT BE CAPITA L LOSS. HOWEVER THE COMPLETE FACTS IN THIS REGARD IS NOT PLACED BEFORE US. WE ALSO FIND THAT NO SUCH CLAIM WAS MADE BEFORE THE ASSESSING OFFICER AN D THEREFORE HE HAS ALSO NOT EXAMINED THE FACTS RELATING TO ADVANCE GIV EN TO GANPATI CAPITALS LIMITED AS WELL AS GUJARAT NIPPON BIMETALS PVT. LTD. 15. IN VIEW OF THE ABOVE WE DEEM IT PROPER TO SET ASIDE THE ORDER OF THE AUTHORITIES BELOW ON THIS POINT AND RESTORE THE MAT TER BACK TO THE FILE OF THE ASSESSING OFFICER. WE DIRECT HIM TO EXAMINE TH E FACTS OF THE CASE AND THEREAFTER RE-ADJUDICATE THE ISSUE IN ACCORDANCE WI TH LAW. 16. GROUND NO.8 OF THE ASSESSEES APPEAL READS AS U NDER: 8. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF AO IN DISALLOWING DEPRECIATION AMOUNT ING TO RS.16 12 886/-. 17. WITH REGARD TO GROUND NO.8 IT IS STATED BY THE LEARNED COUNSEL THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE ITAT IN ASSESSEES OWN CASE WHEREIN THE ITAT HELD THAT ON ACCOUNT OF WAIVER OF OUTSTANDING PRINCIPLE AMOUNT OF LOAN THE COST OF THE FIXED ASSET CANNOT BE REDUCED. WE FIND THAT THE ITAT HAS CONSIDERED T HIS ISSUE IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2002-2003 VIDE ITA NO. 1050/AHD/2006. IN THIS ORDER THE ITAT HELD AS UNDER: 9 ITA NO.178 AND 349/AHD/2007 (ASSESSMENT YEAR 2003-2004) WHEN WE APPLY THE ABOVE PRINCIPLES TO THE FACTS OF THE PRESENT CASE WE NOTICE THAT WIPRO FINANCE LTD IS OF THE EN TION TO RECOVER THE LOAN FROM THE ASSESSEE. IT WAS NOT GIVEN AS TO MEET OUT THE COST OF ANY PLANT AND MACHINERY PARTLY FULLY DIRECTLY O R INDIRECTLY. AS PER PAGE 4922 OF ADV. LAW LEXICON WAIVER WOULD M EAN VOLUNTARY RELINQUISHMENT OF A LEGAL RIGHT OR ADVANT AGE BENEFIT CLAIM OR PRIVILEGE. THUS ACT OF WAIVER WOULD COME POSTERIOR WHEREAS GRANT AND SUBSIDY ARE ENTERIOR OF THE TRANS ACTION I.E. PURCHASES OF PLANT AND MACHINERY IN THE PRESENT CAS E. THE REIMBURSEMENT IS ALWAYS POSTERIOR TO THE TRANSACTIO N (OF PURCHASE OF PLANT AND MACHINERY. THEREFORE THE WAIVER OF L OAN IS ALSO NOT EQUIVALENT TO REIMBURSEMENT AND THEREFORE WILL NOT FALL UNDER THE CATEGORY OF REIMBURSEMENT. WAIVER IS ALSO NOT EQUI VALENT TO GRANT OR SUBSIDY. THUS THE WAIVER DOES NOT FALL INTO EITHER OF THE THREE TERMS USED IN EXPLANATION 10 OR PROVISO T HEREOF. FURTHER THERE HAS TO BE DIRECT NEXUS OF LOAN WITH PURCHASE OF PLANT AND MACHINERY. IN THE PRESENT CASE PLANT AND MACHINER Y ARE ALREADY COSTING PRIOR TO TAKING THE LOAN. THEREFORE GRANT OF LOAN BY WIPRO FINANCE LTD. CANNOT BE RELATED TO THE PURCHASE OF PLANT AND MACHINERY. THEREFORE IT CANNOT BE INFERRED THAT I T WAS GIVEN TO MEET THE COST OF PLANT AND MACHINERY. ONCE THE SU M OF RS.86 02 061/- WAIVED BY WIPRO FINANCE LTD AS OTS CANNOT BE RELATED TO PURCHASE OF PLANT AND MACHINERY IT CANN OT BE REDUCED FROM THE COST FOR THE PURPOSES OF REDUCING ALLOWABL E DEPRECIATION. 18. THAT IN THE YEAR UNDER CONSIDERATION THE ASSES SING OFFICER HAS TO ALLOW THE DEPRECIATION ON THE W.D.V AS BROUGHT FORW ARD FROM THE EARLIER YEAR. WE THEREFORE DIRECT HIM TO ALLOW THE DEPRECI ATION ON W.D.V AS 10 ITA NO.178 AND 349/AHD/2007 (ASSESSMENT YEAR 2003-2004) WORKED OUT AFTER GIVING EFFECT TO THE ABOVE ORDER O F ITAT IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2002-03 . 19. THE NEXT GROUND OF APPEAL IS AGAINST CHARGING O F INTEREST UNDER SECTION 234B & 234C. AT THE TIME OF HEARING BEFORE US THE LEARNED COUNSEL FAIRLY ADMITTED THE CHARGING OF INTEREST IS CONSEQUENTIAL. WE THEREFORE DIRECT THE ASSESSING OFFICER TO RECOMPUT E THE INTEREST-IF ANY AFTER DETERMINATION OF INCOME AS PER OUR ORDER. 20. IN THE RESULT ASSESSEES APPEAL IS PARTLY ALLOW ED WHILE REVENUES APPEAL IS DISMISSED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON 14 TH MAY 2010. SD/- SD/- (BHAVNESH SAINI) (G.D. AGARWAL) JUDICIAL MEMBER VIC E PRESIDENT AHMEDABAD; DATED: 14/05/2010 ANKIT* COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CONCERNED 4. THE CIT 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER ASSTT. REGISTRAR/ DEPUTY REGISTRAR ITAT AHMEDABAD BENCHES AHMEDABAD.