Gujarat Growth Centres Devlopment Corporation Ltd.,, Gandhinagar v. The Income tax Officer, Ward-2,, Gandhinagar

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD - AHMEDABAD B BENCH (BEFORE DR.O.K. NARAYANAN VICE-PRESIDENT AND SHRI MAHAVIR SINGH JUDICIAL MEMBER) ITA NO.2143/AHD/2008 [ASSTT.YEAR : 2004-2005] GUJARAT GROWTH CENTERS DEVELOPMENT CORPORATION LTD. BLOCK NO.5 4 TH FLOOR UDYOG BAHVAN GANDHINAGAR. VS. ITO WARD-2 GANDHINAGAR. ASSESSEE BY : SHRI ASHWIN C. SHAH REVENUE BY : SMT. NEETA SHAH DATE OF ORDER RESERVED : 21-01-2010 O R D E R PER DR. O.K. NARAYANAN VICE-PRESIDENT : THIS APPEAL IS FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEA R IS 2004-2005. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE CIT(A) GANDHINAGAR DATED 31- 3-2008. THE APPEAL ARISES OUT OF THE ASSESSMENT CO MPLETED UNDER SECTION 143(3) READ WITH SECTION 115JA OF THE INCOME TAX AC T 1961. 2. THE ASSESSEE M/S.GUJARAT GROWTH CENTERS DEVELOP MENT CORPORATION LIMITED IS A FULLY GOVERNMENT OWNED CO RPORATION. THE CENTRAL GOVERNMENT HAS SUBSCRIBED 70% OF THE SHARE CAPITAL OF THE CORPORATION AND THE STATE GOVERNMENT HAS SUBSCRIBED THE BALANCE 30%. THE CORPORATION HAS BEEN INCORPORATED BY THE STATE GOVERNMENT FOR THE PURPOSE OF PROMOTING INDUSTRIAL DEVELOPMENT IN THE LIGHT OF THE DEVELOPMENT POLICY FORMULATED BY THE GOVERNMENT OF INDIA IN THE MINISTRY OF INDUSTRY DEPARTMENT OF INDUSTRIAL DEVE LOPMENT. THE CENTRAL GOVERNMENT HAS ISSUED GUIDELINES FOR PREPAR ING PROJECT REPORTS PAGE - 2 ITA NO.2143/AHD/2008 -2- FOR ESTABLISHING GROWTH CENTRES IN DIFFERENT PARTS OF THE COUNTRY UNDER THE AEGIS OF THE RESPECTIVE STATE GOVERNMENTS. IN FURT HERANCE OF THE CENTRAL GOVERNMENT POLICY AND GUIDELINES STATE OF GUJARAT ALSO INCORPORATED THE ASSESSEE-CORPORATION FOR THE PURPOSE OF UNDERTAKING WHAT IS CALLED GROWTH CENTRES. THESE GROWTH CENTRES ARE SET UP ON LAND OWNED BY THE STATE GOVERNMENT. 3. THE CORPORATION DEVELOPS VARIOUS SITES IN DIFFER ENT PARTS OF THE STATE OF GUJARAT AS GROWTH CENTRES AND ALLOT SPACES TO WILLING ALLOTTEES FOR SETTING UP OF INDUSTRY. THE ASSESSEE-CORPORATION I S THUS PERFORMING THE ROLE OF A STATE AGENCY IN DEVELOPING INFRASTRUCTURA L FACILITIES FOR THE INDUSTRIAL GROWTH OF THE STATE OF GUJARAT. 4. THE ASSESSEE CORPORATION HAS BEEN FILING RETURNS OF INCOME REGULARLY AND THE AO WAS ADOPTING A VIEW TILL THE A SSESSMENT YEAR 2003- 2004 THAT THE ASSESSEE-CORPORATION HAS NOT COMMENCE D ITS BUSINESS AND THEREFORE EXPENSES CLAIMED AS REVENUE EXPENSES COU LD NOT BE ALLOWED AS DEDUCTION IN COMPUTING THE TAXABLE INCOME. THE AO HAS ALSO HELD THE VIEW THAT THE INTEREST INCOME RECEIVED BY THE ASSES SEE-CORPORATION ON BANK DEPOSITS SHOULD BE TREATED AS INDEPENDENT TAXA BLE INCOME IN THE LIGHT OF THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF TUTICORIN ALKALIES CHEMICALS AND FERTILISERS LTD. V S. CIT (227 ITR 172). 5. THE ABOVE PATTERN OF ASSESSMENT FOLLOWED BY THE ASSESSING AUTHORITY TILL THE ASSESSMENT YEAR 2003-2004 WAS AG AIN FOLLOWED FOR THE IMPUGNED ASSESSMENT YEAR 2004-2005. THE ASSESSEE H AD EARNED INCOME BY WAY OF INTEREST FROM BANK DEPOSITS AND ALLOTTEES OF THE INDUSTRIAL PLOTS WHO PAID INTEREST ALONG WITH PAYMENTS OF LEASE INST ALMENTS. THE AO HELD PAGE - 3 ITA NO.2143/AHD/2008 -3- THAT THE ASSESSEE-CORPORATION HAVING NOT COMMENCED ITS BUSINESS OPERATIONS EXPENSES HAVE TO BE CAPITALIZED AND THE INTEREST INCOME HAS TO BE BROUGHT TO TAX. ACCORDINGLY HE DISALLOWED THE CLAIM OF EXPENSES MADE BY THE ASSESSEE-CORPORATION AND BROUGHT THE IN TEREST AMOUNT TO TAX. 6. WHEN THE MATTER WAS TAKEN IN FIRST APPEAL THE C IT(A) HAS ACCEPTED THE CONTENTION OF THE ASSESSEE THAT THE ASSESSEE-CO RPORATION HAS COMMENCED ITS BUSINESS OPERATIONS IN THE PREVIOUS Y EAR RELEVANT TO THE IMPUGNED ASSESSMENT YEAR 2004-2205. THE REVENUE HA S NOT FILED ANY APPEAL AGAINST THE ABOVE FINDING OF THE CIT(A). TH EREFORE IT HAS BECOME A FINAL FINDING THAT THE ASSESSEE-CORPORATION HAS C OMMENCED ITS BUSINESS OPERATION IN THE PREVIOUS YEAR RELEVANT TO THE IMPU GNED ASSESSMENT YEAR 2004-2005. 7. BUT THE CIT(A) WENT FURTHER WHILE ADJUDICATING T HE APPEAL PLACED BEFORE HIM. HE HELD THAT THE LUMPSUM AMOUNT RECEIV ED BY THE ASSESSEE FROM THE ALLOTTEES AT 30% OF THE TOTAL LEASE AMOUNT IS IN THE NATURE OF THE INCOME OF THE ASSESSEE. THE MODUS OPERANDI OF ALLOTMENT OF INDUSTRIAL PLOTS TO VARIOUS ALLOTTEES IS FORMULATED BY THE ASS ESSEE-CORPORATION IN THE LIGHT OF THE POLICY GUIDELINES ISSUED BY THE GOVERN MENT OF INDIA. AN APPLICANT IS ALLOTTED AN INDUSTRIAL PLOT ON LONG LE ASE OF 99 YEARS. THE ALLOTTEE HAS TO PAY PRICE FOR THAT. THAT PRICE IS IN FACT THE PREMIUM OF THE PLOT. 30% OF THAT PRICE HAS TO BE PAID TO THE ASSE SSEE-CORPORATION ON ALLOTMENT. THE BALANCE 70% OF THE PRICE HAS TO BE PAID IN INSTALMENTS OVER A PERIOD OF 10 YEARS. THE ALLOTTEES HAVE TO P AY INTEREST AS WELL ALONG WITH INSTALMENTS. AS PER THE GUIDELINES OF T HE GOVERNMENT THE CORPORATION IS WORKING OUT THE PRICE OF THE PLOT ON THE BASIS OF THE COST INCURRED BY IT IN DEVELOPING THE PLOTS. THE ASSESS EE-CORPORATION IS PAGE - 4 ITA NO.2143/AHD/2008 -4- DEVELOPING PLOTS BY PROVIDING INFRASTRUCTURAL FACIL ITIES AND THE PLOTS ARE ALLOTTED TO THE APPLICANTS ON NO PROFIT NO LOSS B ASIS. IN FACT THE ASSESSEE-CORPORATION IS ALLOTTING PLOTS ON COST/EXP ENSES REALIZATION METHOD. NO INCOME ELEMENT IS CONTEMPLATED IN THE A LLOTMENT OF INDUSTRIAL PLOTS TO VARIOUS ENTREPRENEURS. 8. THE INCOME EARNED BY THE ASSESSEE-CORPORATION IS INTEREST PAID BY THE ALLOTTEES ALONG WITH INSTALMENTS AS WELL AS INT EREST EARNED BY THE ASSESSEE-CORPORATION FROM ITS VARIOUS BANK DEPOSITS . 9. THE ACCOUNTS OF THE ASSESSEE HAVE BEEN PREPARED IN THE ABOVE SCENARIO. BUT THE CIT(A) HELD THAT THE GROSS COLL ECTIONS RECEIVED BY THE ASSESSEE-CORPORATION BY WAY OF INITIAL LUMP-SUM AMO UNT AS WELL AS INSTALMENT AMOUNTS AS WELL AS INTEREST RECEIPTS AL L CONSTITUTED INCOME OF THE ASSESSEE. HE ACCORDINGLY ENHANCED THE ASSESSME NT AND PASSED THE APPELLATE ORDER. 10. THE ASSESSEE-CORPORATION IS HIGHLY AGGRIEVED AN D THEREFORE THE SECOND APPEAL BEFORE US. 11. THE FIRST SET OF GROUNDS RAISED BY THE ASSESSEE -CORPORATION IS THAT THE CIT(A) DOES NOT HAVE ANY UNIVERSAL POWER TO ENH ANCE THE ASSESSMENT. THE CONTENTION OF THE ASSESSEE IS THAT THE POWER OF THE CIT(A) TO ENHANCE ASSESSMENT IS LIMITED TO THE SOURCE OF INCOME AND I SSUES CONSIDERED BY THE ASSESSING AUTHORITY IN THE ASSESSMENT ORDER. I T IS THE CASE OF THE ASSESSEE-CORPORATION THAT THE CIT(A) CANNOT EXERCIS E THE POWER OF ENHANCEMENT TO FIND OUT NEW SOURCE OF INCOME BY CON SIDERING THOSE ASPECTS WHICH WERE NOT BEFORE THE ASSESSING AUTHORI TY. PAGE - 5 ITA NO.2143/AHD/2008 -5- 12. SHRI A.C.SHAH THE LEARNED CHARTERED ACCOUNTANT ARGUED AT LENGTH ON THIS LEGAL PROPOSITION. THE LEARNED CA RELIED O N THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SHAPOO RJI PALLONJI MISTRY 44 ITR 391 (SC) WHERE THE COURT HAS HELD THAT THE A PPELLATE COMMISSIONER HAS NO POWER TO ENHANCE ASSESSMENT BY DISCOVERING NEW SOURCES OF INCOME NOT MENTIONED IN THE RETURN OF AS SESSEE OR CONSIDERED BY THE ITO IN THE ORDER APPEALED AGAINST. THE LEAR NED CA FURTHER RELIED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RAI BAHADUR HARDUTROY MOTILAL CHAMARIA 66 ITR 443 (SC) WHEREIN THE COURT HAS HELD THAT IT IS NOT OPEN TO THE APPELLATE COMMISSIONER TO TRAVEL OUTSIDE THE RETURN MADE BY THE ASSESSEE OR THE ASSE SSMENT ORDER OF THE ITO WITH A VIEW TO FINDING OUT NEW SOURCES OF INCOM E AND THE POWER OF ENHANCEMENT IS RESTRICTED TO THE SOURCES OF INCOME WHICH HAVE BEEN THE SUBJECT MATTER OF CONSIDERATION BY THE ITO FROM THE POINT OF VIEW OF TAXABILITY. THE LEARNED CA HAS EXPLAINED THAT THE ABOVE DECISIONS WERE RENDERED IN THE LIGHT OF THE OLD LAW BUT THE VIEWS ARE EQUALLY VALID EVEN IN THE LIGHT OF THE ENABLING PROVISIONS CONTAINED I N THE PRESENT INCOME TAX ACT. HE MADE A REFERENCE TO THE FULL BENCH DEC ISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SARDARI LAL AND CO. 66 ITR 864 WHERE THE COURT HAS HELD THAT THE VIEW EXPRESSED IN CIT VS. RAI BAHADUR HARDUTROY MOTILAL CHAMARIA STILL HOLDS GOOD. 13. THE SECOND SET OF GROUNDS RAISED BY THE ASSESSE E IS ON THE MERIT OF THE ISSUE. THE LEARNED CA ARGUED THAT THE ASSESSEE -CORPORATION WAS ALLOTTING INDUSTRIAL PLOTS TO ENTREPRENEURS IN CONF ORMITY WITH THE GUIDELINES ISSUED BY THE CENTRAL GOVERNMENT ON NO PROFIT NO LOSS BASIS. THE CORPORATION IS NOT AUTHORIZED TO MAKE ANY PROFI T ON ALLOTMENT OF INDUSTRIAL PLOTS TO ENTREPRENEURS. THE ACTIVITY OF THE ASSESSEE-CORPORATION PAGE - 6 ITA NO.2143/AHD/2008 -6- IS NOT TO MAKE ANY PROFIT ON SUCH TRANSACTIONS OF L AND BUT TO PROVIDE INFRASTRUCTURAL FACILITY SO THAT INDUSTRIAL ACTIVIT IES ARE BOOSTED. THE LEARNED CA EXPLAINED THAT THE AMOUNT PAID BY THE AL LOTTEES BY WAY OF COST IS NOTHING BUT THE REIMBURSEMENT OF EXPENSES INCURR ED BY THE ASSESSEE- CORPORATION IN DEVELOPING GOVERNMENT LANDS INTO SUI TABLE INDUSTRIAL PLOTS. THE LEARNED CA EXPLAINED THAT THE INCOME EARNED BY THE ASSESSEE IN ITS OPERATIONAL ACTIVITIES IS INTEREST AMOUNT COLLECTED FROM THE ALLOTTEES ALONG WITH INSTALMENT PAYMENTS AND ALSO THE INTEREST EARN ED BY IT ON THE DEPOSITS MADE WITH THE BANKS. HE RELIED ON THE CH ARTER OF INCORPORATION OF THE ASSESSEE GUIDELINES ISSUED BY THE GOVERNMEN T OF INDIA AND ITS ANNUAL STATEMENTS OF ACCOUNTS AND REPORTS. 14. SMT.NEETA SHAH THE LEARNED ADDITIONAL COMMISSI ONER OF INCOME- TAX APPEARING FOR THE REVENUE ON THE OTHER HAND V EHEMENTLY ARGUED IN SUPPORT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS). THE LEARNED ADDL. COMMISSIONER EXPLAINE D THAT SHE FULLY AGREED WITH THE ARGUMENTS OF THE LEARNED CA ON THE LEGAL PROPOSITION ON THE SCOPE OF THE POWER CONFERRED ON THE CIT(A) TO E NHANCE ASSESSMENT. BUT HER CASE IS THAT IN THE PRESENT CASE THE CIT(A ) HAS NOT CROSSED THE LIMIT DICTATED BY THE STATUTE IN THE MATTER OF ENHA NCEMENT OF THE ASSESSMENT. SHE INVITED OUR ATTENTION TO THE AUDIT ORS REPORT OF THE ASSESSEE-CORPORATION AND ARGUED THAT THE QUESTION O F CONSIDERING THE NATURE OF PRICE COLLECTED BY THE ASSESSEE-CORPORATI ON FROM THE ALLOTTEES HAVE ALREADY BEEN FORMED PART OF THE ACCOUNTS OF TH E ASSESSEE AND THEREFORE IT IS NOT POSSIBLE TO HOLD A VIEW THAT TH E CIT(A) WAS EXPLORING NEW SOURCES OF INCOME AGAINST THE ASSESSEE. THE L EARNED ADDL. COMMISSIONER CONTENDED THAT THE ARGUMENT OF THE LEA RNED CA ON THAT POINT IS MISLEADING. THE CIT(A) HAS NOT RELIED ON ANY MATERIALS OTHER PAGE - 7 ITA NO.2143/AHD/2008 -7- THAN THE MATERIALS AVAILABLE BEFORE THE ASSESSING A UTHORITY. THE CIT(A) HAS NOT INVENTED ANY NEW SOURCES OF INCOME IN THE H ANDS OF THE ASSESSEE. THE PRICE PAID BY THE ALLOTTEES OF THE INDUSTRIAL P LOTS WERE ACTUALLY RECEIVED BY THE ASSESSEE-CORPORATION AND ACCOUNTED IN ITS BOOKS. WHAT THE CIT(A) HAS IN FACT DONE WAS ONLY TO EXAMINE THE NATURE OF THE SUCH RECEIPTS. THE RECEIPTS OF PRICE FROM VARIOUS ALLOT TEES WERE VERY MUCH BEFORE THE ASSESSING AUTHORITY HIMSELF AND IT IS NO T AT ALL A NEW ISSUE COMING FOR THE FIRST TIME BEFORE THE CIT(A). IT IS TO BE UNDERSTOOD THAT THE AUTHORITY OF THE CIT(A) IS CO-TERMINUS WITH THE AUTHORITY OF THE ASSESSING AUTHORITY AND HE CAN EXAMINE ALL THE ASPE CTS OF AN ASSESSMENT IN THE LIGHT OF RECORDS AVAILABLE WITH THE ASSESSING A UTHORITY. 15. THE LEARNED ADDL. COMMISSIONER THEREFORE ARGUED THAT IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE THE LEGAL PR OPOSITION ARGUED BY THE LEARNED CA ARE NOT APPLICABLE AS THE CIT(A) HAS MAD E HIS FINDINGS EXACTLY ON THE BASIS OF THE MATERIALS AND ACCOUNTS AVAILABLE BEFORE THE ASSESSING AUTHORITY. 16. THE LEARNED ADDL. COMMISSIONER FURTHER ARGUED O N THE MERITS OF THE CASE. SHE SUBMITTED THAT THE AMOUNTS COLLECTED BY THE ASSESSEE- CORPORATION ARE IN THE NATURE OF LEASE RENT AND THE RE IS NO DENIAL OF THE FACT THAT THE ASSESSEE-CORPORATION IS EARNING INCOME AND THERE ARE NO EVIDENCES TO CONFIRM THE COMPATIBILITY OF DEVELOPME NT EXPENDITURE INCURRED BY THE ASSESSEE-CORPORATION AND THE MONEY COLLECTED FROM VARIOUS ALLOTTEES. SHE THEREFORE SUBMITTED THAT TH E ENHANCEMENT ORDERED BY THE CIT(A) IS JUSTIFIED BOTH IN LAW AND ON FACTS . 17. WE HEARD BOTH SIDES IN DETAIL AND CONSIDERED TH E MATTER CAREFULLY. PAGE - 8 ITA NO.2143/AHD/2008 -8- 18. THERE IS NO DISPUTE REGARDING THE CONSTITUTION AND NATURE OF THE ASSESSEE-CORPORATION. IT IS A GOVERNMENT CORPORATI ON OWNED BOTH BY THE CENTRAL GOVERNMENT AND STATE GOVERNMENT. IN FACT I T IS A SPECIAL PURPOSE VEHICLE (SPV) INCORPORATED BY THE STATE G OVERNMENT IN PURSUANCE OF THE POLICY AND GUIDELINES ISSUED BY TH E CENTRAL GOVERNMENT TO PROMOTE INDUSTRIAL GROWTH IN THE STATE BY PROVID ING INFRASTRUCTURAL FACILITY TO WILLING ENTREPRENEURS. THERE IS NO QUE STION OF THE ASSESSEE- CORPORATION SELLING ANY LAND TO THE ALLOTTEES AND M AKING PROFITS OUT OF IT FOR THE REASON THAT THE LANDS BELONGED TO THE STATE . THE ASSESSEE- CORPORATION IS ONLY A FACILITATOR. EVEN THE LAND I S LEASED OUT TO THE ALLOTTEES ON BEHALF OF THE STATE GOVERNMENT. NEITH ER THE GOVERNMENT NOR THE ASSESSEE-CORPORATION HAS COLLECTED ANY LEASE RE NT AS SUCH FROM THE ALLOTTEES. THERE IS NO SUCH STIPULATION IN THE AGR EEMENT ENTERED INTO BETWEEN THE CORPORATION AND THE ALLOTTEES. THE ASS ESSEE-CORPORATION HAS INCURRED EXPENDITURE IN DEVELOPING THE LAND AS INDU STRIAL ESTATES. THOSE EXPENSES ARE COLLECTED FROM THE ALLOTTEES BY WAY OF COST RECOVERY. THEREFORE IN THE PROCESS OF DEVELOPING THE LANDS A LLOTTED TO THE ENTREPRENEURS THE ASSESSEE-CORPORATION IS NOT EARN ING ANY INCOME. IN FACT THEY ARE ONLY RECOUPING THE COST BUILT-IN MADE U P OF EXPENSES INCURRED IN DEVELOPING THE LAND AND PROVIDING OTHER INFRASTR UCTURAL FACILITIES. AS THE ASSESSEE-CORPORATION IS AN SPV ACTING AS AN INSTRUMENTALITY OF THE STATE WE CANNOT IMPUTE A CASE OF INCOME IN THE HAN DS OF THE ASSESSEE AS IN THE CASE OF A REALTOR. THE ASSESSEE-CORPORATION IS A DESIGNATED-AGENT OF THE GOVERNMENT. 19. AS RIGHTLY EXPLAINED BY THE LEARNED CA THE ONL Y POSSIBLE SOURCE OF INCOME OF THE ASSESSEE-CORPORATION IS THE INTEREST AMOUNT EARNED UNDER PAGE - 9 ITA NO.2143/AHD/2008 -9- DIFFERENT ACCOUNTS. THE ALLOTTEES OF THE INDUSTRIA L PLOTS HAVE TO PAY INTEREST TO THE ASSESSEE-CORPORATION ALONG WITH PAY MENTS OF ANNUAL INSTALMENTS. THE ASSESSEE IS TREATING THE SAID INT EREST AMOUNTS AS ITS INCOME. LIKEWISE THE SURPLUS CASH AVAILABLE IN TH E HANDS OF THE ASSESSEE- CORPORATION IS DEPOSITED IN VARIOUS BANKS AS FIXED DEPOSITS. THE ASSESSEE- CORPORATION EARNS INCOME FROM THESE FIXED DEPOSITS. THEY ARE ALSO TREATED AS INCOME OF THE ASSESSEE. THEREFORE WE ARE INCLI NED TO ACCEPT THE CONTENTION OF THE ASSESSEE THAT ONLY THE INTEREST A MOUNTS ARE THE INCOME ENJOYED BY THE ASSESSEE-CORPORATION IN ITS ENDEAVOU R. 20. IN THE LIGHT OF THE ABOVE FINDING WE SET ASIDE THE ORDER OF THE CIT(A) SO FAR AS THE MATTER OF ENHANCEMENT IS CONCE RNED. 21. THE CASE DOES NOT END HERE. ONCE WE SET ASIDE THE CIT(A)S ORDER ON THE QUESTION OF ENHANCEMENT WE HAVE TO AGAIN LO OK INTO HIS FINDING ON THE FIRST QUESTION OF COMMENCEMENT OF THE BUSINESS OF THE ASSESSEE- CORPORATION. THE CIT(A) HAS HELD THAT THE ASSESSEE -CORPORATION HAS COMMENCED ITS BUSINESS OPERATIONS IN THE PREVIOUS Y EAR RELEVANT TO THE ASSESSMENT UNDER APPEAL. THAT FINDING HAS TO BE CA RRIED TO ITS LOGICAL CONCLUSION. WHEN IT IS DONE SO THE EXPENSES CLAIM ED BY THE ASSESSEE HAVE TO BE ALLOWED AGAINST THE INTEREST INCOME DISC LOSED BY THE ASSESSEE. IN OTHER WORDS THE FINDING OF THE ASSESSING AUTHOR ITY RELYING ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE O F TUTICURIN ALKALIES (SUPRA) IS NOT APPLICABLE. 22. TO MAKE THINGS PROPER WE DIRECT THE ASSESSING AUTHORITY TO RE-DO THE ASSESSMENT AFTER DEDUCTING THE EXPENDITURE CLAI MED BY THE ASSESSEE AGAINST THE INTEREST INCOME EARNED BY IT. THE ASSE SSMENT SHALL BE RE-DONE PAGE - 10 ITA NO.2143/AHD/2008 -10- IN THE LIGHT OF THE ABOVE DIRECTION AFTER GIVING RE ASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 23. IN RESULT THIS APPEAL FILED BY THE ASSESSE IS ALLOWED. ORDER PRONOUNCED ON FRIDAY THIS 22 ND DAY OF JANUARY 2010. SD/- SD/- (MAHAVIR SINGH) JUDICIAL MEMBER (DR.O.K. NARAYANAN) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 22-01-2010 COPY OF THE ORDER FORWARDED TO: 1) : ASSESSEE 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR ITAT. BY ORDER DR ITAT AHMEDABAD