SHRI ADHIKARI TELEVISION BROTHERS, v. THE ACIT CIR 11(1),

ITA 3175/MUM/2004 | 2000-2001
Pronouncement Date: 22-09-2010 | Result: Partly Allowed

Appeal Details

RSA Number 317519914 RSA 2004
Assessee PAN AAACS7546Q
Bench Mumbai
Appeal Number ITA 3175/MUM/2004
Duration Of Justice 6 year(s) 4 month(s) 23 day(s)
Appellant SHRI ADHIKARI TELEVISION BROTHERS,
Respondent THE ACIT CIR 11(1),
Appeal Type Income Tax Appeal
Pronouncement Date 22-09-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted D
Tribunal Order Date 22-09-2010
Date Of Final Hearing 07-04-2010
Next Hearing Date 07-04-2010
Assessment Year 2000-2001
Appeal Filed On 29-04-2004
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI BEFORE SHRI R.S.SYAL AM AND SHRI R.S.PADVEKAR JM ITA NO.3175/MUM/2004 : ASST.YEAR 20000-2001 SRI ADHIKARI BROTHERS TELEVISION NETWORKS LIMITED ADHIKARI CHAMBERS 6 TH FLOOR OBEROI COMPLEX NEW LINK ROAD ANDHERI (WEST) MUMBAI 400 053. PA NO.AAACS7546Q. VS. THE ASSTT.COMMISSIONER OF INCOME-TAX CIRCLE 11(1) MUMBAI. (APPELLANT) (RESPONDENT) ITA NO.3932/MUM/2004 : ASST.YEAR 20000-2001 THE ASSTT.COMMISSIONER OF INCOME-TAX CIRCLE 11(1) MUMBAI. VS. SRI ADHIKARI BROTHERS TELEVISION NETWORKS LIMITED ADHIKARI CHAMBERS 6 TH FLOOR OBEROI COMPLEX NEW LINK ROAD ANDHERI (WEST) MUMBAI 400 053. (APPELLANT) (RESPONDENT) REVENUE BY : DR. B.SENTHIL ASSESSEE BY : SHRI MURLIDHAR O R D E R PER R.S.SYAL (AM) : THESE TWO CROSS APPEALS ONE BY THE ASSESSEE AND T HE OTHER BY THE REVENUE EMANATE FROM THE ORDER PASSED BY THE COMMISSIONER O F INCOME-TAX (APPEALS) ON 05.03.2004 IN RELATION TO THE ASSESSMENT YEAR 2000- 2001. 2. FIRST THREE GROUNDS OF THE REVENUES APPEAL AND FIRST GROUND OF THE ASSESSEES APPEAL RELATE TO THE COMPUTATION OF DEDUCTION U/S.8 0HHF. BRIEFLY STATED THE FACTS CONCERNING THESE GROUNDS ARE THAT THE ASSESSEE IS E NGAGED IN THE BUSINESS OF MAKING TELEVISION SOFTWARE AND TELECAST ON DOORDARSHAN AND OTHER CHANNELS. IT CLAIMED DEDUCTION U/S.80HHF AMOUNTING TO RS.11 53 05 267 AS EXPORT PROFITS. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD SH OWN TOTAL TURNOVER AS EQUAL TO EXPORT TURNOVER AND THUS CLAIMED DEDUCTION OF ENTIR E EXPORT PROFIT. IT WAS SEEN FROM THE PROFIT AND LOSS ACCOUNT THAT THE FIGURE OF TOTA L TURNOVER OF THE BUSINESS WAS ITA NOS.3175 & 3932/MUM/2004 SRI ADHIKARI BROTHERS TELEVISION. 2 DEPICTED AT RS. 40 01 27 763. ON BEING CALLED UPON TO EXPLAIN SUCH VARIATION IN THE FIGURE OF TOTAL TURNOVER AS PER PROFIT AND LOSS ACCOUNT AND THAT FOR THE PURPOSES OF COMPUTING DEDUCTION U/S 80HHF THE ASSESSEE PUT FORTH THAT IT EXPORTED PROGRAMME RIGHTS OF ITS VARIOUS SERIALS WHICH VES TED WITH IT TO DIFFERENT CLIENTS ALL OVER THE WORLD AT THE RATE SPECIFIED IN THE STA TEMENT. IT WAS ALSO STATED THAT SEPARATE BOOKS OF ACCOUNT WERE MAINTAINED AND CONSE QUENTLY A DISTINCT PROFIT AND LOSS ACCOUNT WAS PREPARED IN RESPECT OF EXPORT BUS INESS AS PER WHICH THE AMOUNT OF EXPORT TURNOVER IN RESPECT OF TELECASTING RIGHTS WAS RS.11 56 27 047. AFTER REDUCING SOME EXPENSES FROM THIS AMOUNT THE PROFIT DERIVED FROM EXPORT WAS SHOWN AT RS.11 53 05 267 WHICH WAS CLAIMED AS DED UCTION U/S.80HHF IN ENTIRETY. INITIALLY THE ASSESSING OFFICER PROPOSED THAT DEDU CTION U/S.80HHF WAS TO BE RESTRICTED TO RS.3.33 CRORES BY MULTIPLYING EXPORT PROFIT OF RS.11.53 CRORES WITH THE EXPORT TURNOVER OF RS.11.56 CRORES AS DIVIDED BY T HE TOTAL BUSINESS TURNOVER AT RS.40.01 CRORES. THE ASSESSEE OPPOSED THIS CALCULAT ION BY EXPLAINING THAT THE BUSINESS OF EXPORT OF SOFTWARE / SOFTWARE RIGHTS CO NSTITUTED SEPARATE INDEPENDENT AND DISTINCT ACTIVITY DE HORS THE OTHER STREAMS OF REVENUE AS THE ASSESSEE HAD MAINTAINED SEPARATE BOOKS OF ACCOUNT FOR THIS SOURC E OF INCOME. IT WAS CLAIMED THAT THE ENTIRE AMOUNT WAS ELIGIBLE FOR DEDUCTION. IT WA S FURTHER POINTED OUT THAT THE PROVISIONS OF SECTION 80HHF(3) WOULD NOT BE ATTRACT ED IN THIS CASE AS PROFITS RELATABLE TO EXPORT OF SOFTWARE/ SOFTWARE RIGHTS CO ULD BE ASCERTAINED AND ESTABLISHED BY MEANS OF SEPARATE AND INDEPENDENT BOOKS OF ACCOU NT. IN SUPPORT OF ITS CLAIM FOR DEDUCTION U/S.80HHF AT 100% OF THE PROFITS DERIVED FROM EXPORT OF SOFTWARE / SOFTWARE RIGHTS THE ASSESSEE RELIED ON THE JUDGEME NT OF THE HONBLE MADRAS HIGH COURT IN CIT VS. RATHORE BROTHERS [(2002) 254 ITR 656 (MAD.) ] AND CERTAIN OTHER JUDGMENTS LAYING DOWN THE SAME PROPOSITION. THE AS SESSING OFFICER WAS NOT CONVINCED WITH THESE SUBMISSIONS AND CAME TO HOLD T HAT THE COMPUTATION OF DEDUCTION U/S.80HHF WAS REQUIRED TO BE MADE IN TERM S OF SUB-SECTION (3) OF SECTION 80HHF AND THERE WAS NO OTHER WAY TO CALCULA TE DEDUCTION EXCEPT ON PROPORTIONATE BASIS AS HE HAD PROPOSED INITIALLY. HE FURTHER NOTED THAT THE ITA NOS.3175 & 3932/MUM/2004 SRI ADHIKARI BROTHERS TELEVISION. 3 JUDGMENTS RELIED ON BY THE ASSESSEE WERE IN THE CON TEXT OF SECTION 80HHC(3) THE MANDATE OF WHICH WAS DIFFERENT FROM THAT OF SECTION 80HHF. THE ASSESSING OFFICER FURTHER NOTED THAT THE ASSESSEE HAD OFFERED `OTHER INCOME COMPRISING OF INTEREST DIVIDEND INCENTIVE ON MUTUAL FUNDS AMOUNTING TO RS .4.02 CRORES 90% OF WHICH WAS REQUIRED TO BE DEDUCTED BEFORE COMPUTING THE P ROFITS OF THE BUSINESS AS EXPLAINED IN EXPLANATION (F) BELOW SECTION 80HHF(6). IT WAS STILL FURTHER SEEN THAT THERE WERE EXPORT DEBTORS REALIZABLE AMOUNTING TO R S.4 45 66 915 IN RESPECT OF WHICH THE ASSESSEE HAD NOT FURNISHED ANY CERTIFICAT E FROM RBI SEEKING PERMISSION FOR REALIZATION BEYOND THE STIPULATED PERIOD OF SIX MONTHS FROM THE CLOSE OF THE YEAR. HE HELD THAT THE SAID AMOUNT WARRANTED EXCL USION FROM THE FIGURES OF TOTAL TURNOVER AS WELL AS EXPORT TURNOVER. EVENTUALLY HE WORKED OUT THE AMOUNT OF DEDUCTION U/S.80HHF AS UNDER: - PROFIT OF THE BUSINESS 17 95 66 406 LESS : 90% OF OTHER INCOME OF RS.4 02 54 534 3 62 29 080 ----------------- PROFIT OF BUSINESS FOR DEDUCTION 14 33 37 325 EXPORT TURNOVER AS DISCUSSED ABOVE 7 10 60 13 2 (11 56 27 047 4 45 66 915) TOTAL TURNOVER AS DISCUSSED ABOVE 35 55 60 848 (40 01 27 763 4 45 66 915) DEDUCTION = EXPORT TURNOVER X PROFITS OF BUSINESS TOTAL TURNOVER = 7 10 60 132 X 14 33 37 325 35 55 60 848 = 2 86 46 487 IN THIS WAY THE CLAIM OF DEDUCTION U/S.80HHF AS MA DE BY THE ASSESSEE AMOUNTING TO RS.11.53 CRORES WAS CONDENSED BY THE A .O. TO RS.2.86 CRORES. ITA NOS.3175 & 3932/MUM/2004 SRI ADHIKARI BROTHERS TELEVISION. 4 3. THE ASSESSEE AGITATED THE REDUCTION IN THE QUANTUM OF DEDUCTION MADE BY THE AO IN THE FIRST APPEAL. THE SUBMISSIONS MADE AT THE ASSESSMENT STAGE WERE REITERATED BEFORE THE LD. FIRST APPELLATE AUTHORITY ADVOCATING JUSTIFICATION FOR THE DEDUCTION OF EXPORTS PROFITS DE HORS THE DOMESTIC BUSINESS. THE LD. CIT(A) NOTED THAT THE DEFINITION OF TOTAL TURNOVER GIVEN IN SE CTION 80HHF WAS NOT EXHAUSTIVE. AS THE ASSESSEE HAD MAINTAINED SEPARATE BOOKS OF AC COUNT IN RESPECT OF EXPORT BUSINESS AND IN THE ABSENCE OF ANY JUDGEMENT DELIVE RED BY THE HONBLE HIGH COURT OR ANY BENCH OF THE TRIBUNAL IN THE CONTEXT OF SECT ION 80HHF THE LD. CIT(A) HELD THAT THE MANDATE OF THE JUDGEMENT GIVEN BY THE HON BLE MADRAS HIGH COURT IN RATHORE BROTHERS (SUPRA) IN THE CONTEXT OF SECTION 80HHC WOULD APPLY MUTATIS MUTANDIS TO THE PROVISIONS OF SECTION 80HHF ALSO. IN THIS W AY IT WAS HELD THAT THE TOTAL TURNOVER FOR THE PURPOSES OF DEDUCTION UNDER THIS SECTION WOULD NOT INCLUDE TURNOVER FROM DOMESTIC ACTIVITY INCLUDING THE SALE OF FREE COMMERCIAL TIME AND AS SUCH THE EXPORT ACTIVITY SHOULD BE TREATED AS INDEP ENDENT BUSINESS. DURING THE FIRST APPELLATE PROCEEDINGS THE ASSESSEE ALSO FILED EVI DENCE IN SUPPORT OF REALIZATION OF RS.4.42 CRORES ALONG WITH THE APPROVAL FROM RBI. T HESE DOCUMENTS WERE SENT TO THE A.O. FOR HIS COMMENTS WHO APART FROM POINTING OUT CERTAIN INCONSISTENCIES ALSO STATED THAT THE RBIS APPROVEL WAS NOT FILED B Y THE ASSESSEE. CONSIDERING THE FACTS THE LEARNED CIT(A) OBSERVED THAT THE ASSESS EE HAD BEEN ABLE TO REALIZE A SUM OF RS.4.41 CRORES AND THE REMAINING AMOUNT OF RS.3 83 618 WAS NOT YET REALIZED. IN HIS OPINION THE REALIZATION AMOUNTING TO RS.4.41 C RORES CALLED FOR CONSIDERATION IN THE DEDUCTION U/S.80HHF. THE LD. FIRST APPELLATE A UTHORITY ALSO NOTICED THAT THE ASSESSEE HAD SHOWN PROFIT FROM EXPORT PROFIT AT RS. 11.53 CRORES AGAINST THE EXPORT TURNOVER OF RS.11.56 CRORES IMPLYING THAT ONLY EXPE NSES TO THE TUNE OF RS.3 21 780 WERE INCURRED. THE ASSESSEE CONCEDED BEFORE HIM THA T THE INDIRECT EXPENSES AMOUNTING TO RS7 62 917 MAY ALSO BE CONSIDERED AGAINST THE EXPO RT EARNINGS. HOWEVER THE LEARNED CIT(A) ON THE PERUSAL OF PROF IT AND LOSS ACCOUNT OF THE ASSESSEE NOTICED THAT ONLY CERTAIN EXPENSES TO TH E TUNE OF RS.89.75 LAKHS WOULD NOT ATTRIBUTE TO THE EXPORT ACTIVITY AND THE REMAIN ING EXPENSES OF RS.6.67 CRORES ITA NOS.3175 & 3932/MUM/2004 SRI ADHIKARI BROTHERS TELEVISION. 5 WOULD INDIRECTLY CONTRIBUTE TO THE EARNING OF THE EXPORT INCOME. HE HELD THAT 15% OF SUCH EXPENSES ROUNDED TO RS.1 CRORE COULD BE REA SONABLY ALLOCATED FOR EARNING THE EXPORT INCOME. HE THUS COMPUTED THE DEDUCTION U /S.80HHF AT RS.10.52 CRORES AS UNDER:- TOTAL TURNOVER RS.11 56 27 047 LESS : TURNOVER NOT REALIZED RS. 3 81 610 ---------------------- RS.11 52 43 429 LESS : DIRECT EXPENSES 3 21 780 INDIRECT EXPENSES1 00 00 000 RS 1 03 21 780 --------------------- RS10 52 43 429 ============ BOTH THE SIDES ARE IN APPEAL AGAINST THEIR RESPECT IVE STANDS. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AT LENGTH AN D PERUSED THE RELEVANT MATERIAL ON RECORD IN THE LIGHT OF THE PRECEDENTS C ITED BY BOTH SIDES. THE UNDISPUTED FACTS OF THIS CASE AS REITERATED BY THE LD. AR BEF ORE US ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PRODUCTION OF T.V. SERIA LS ETC. AND ALSO PURCHASING SUCH RIGHTS. DURING THE YEAR IT EXPORTED SUCH SOFTWARE O R SOFTWARE RIGHTS FOR THE CONSIDERATION OF RS.11.56 CRORES. APART FROM THAT IT ALSO TIED UP WITH DOORDARSHAN FOR THE TELECASTING OF ITS TV PROGRAMMES. AS PER TH E ANNUAL REPORT OF THE COMPANY PLACED ON RECORD BY THE LEARNED A.R. IT IS SEEN F ROM PAGE 17 THAT THE ASSESSEE HAD ITS OWN CHANNEL CALLED SABE TV. IN LIEU OF ALLOWI NG DOORDARSHAN OR OTHER CHANNELS TO TELECAST ITS PROGRAMME THE ASSESSEE WA S GETTING SOME FREE COMMERCIAL TIME DURING WHICH ADVERTISEMENTS WERE FLASHED AND THE RESULTANT REVENUE FELL TO THE ASSESSEES KITTY. AS REGARDS ITS OWN CHANNEL SA BE TV THE REVENUE FROM TELECASTING OF TV SERIALS WAS DIRECTLY COMING TO IT S POOL. ON A SPECIFIC QUERY THE LEARNED A.R. HAS EXPLAINED THAT THE OVERALL BUSINES S ACTIVITY OF THE ASSESSEE WAS TO ITA NOS.3175 & 3932/MUM/2004 SRI ADHIKARI BROTHERS TELEVISION. 6 PURCHASE OR PRODUCE TV SERIALS AND THEN EXPLOIT THE SAME BY EITHER EXPORTING OR USING IN THE INDIAN MARKET THROUGH DOORDARSHAN OR O THER CHANNELS. THUS IT CAN BE SEEN THAT THE COST IN PURCHASING OR PRODUCING THE TV SERIALS IS COMMON AND THE REVENUE IS ARISING FROM EXPORT OF SUCH PROGRAMMES O R THEIR TELECASTING IN INDIA. IT IS NOBODYS CASE THAT THE EXPORTING OF SUCH TELEVISION SOFTWARE INCLUDING TELECAST RIGHTS ARE OTHERWISE NOT ELIGIBLE FOR DEDUCTION U/S .80HHF. THE CONTROVERSY REVOLVES AROUND THE COMPUTATION OF DEDUCTION ONLY. THE CASE OF THE ASSESSEE IS THAT THE PROFITS DERIVED FROM EXPORT SHOULD BE COMPUTED BY REDUCING THE COSTS FROM THE EXPORT REALIZATION AND IN THIS PROCESS ITS DOMESTI C BUSINESS BE TOTALLY IGNORED AS THE EXPORT BUSINESS IS SEPARATE AND DISTINCT. IN ORDER TO BUTTRESS THIS CLAIM IT HAS BEEN ARGUED THAT SEPARATE BOOKS OF ACCOUNT HAVE BEEN MAI NTAINED IN RESPECT OF SUCH EXPORT BUSINESS AND HENCE THE ENTIRE PROFIT DERIVED FROM SUCH EXPORT BUSINESS IS SEPARATELY IDENTIFIABLE. ON THE CONTRARY THE ASSESS ING OFFICER HAS OPINED THAT THE BUSINESS OF EXPORT OF SOFTWARE/SOFTWARE RIGHTS IS N OT SEPARATE FROM ITS DOMESTIC BUSINESS AND HENCE DEDUCTION WAS TO BE COMPUTED AS PER SUB-SECTION (3) WHICH PROVIDES THAT THE PROFITS DERIVED FROM THE BUSINESS SHALL BE THE AMOUNT WHICH BEARS TO THE PROFITS OF THE BUSINESS THE SAME PROPORTION AS THE EXPORT TURNOVER BEARS TO THE TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY TH E ASSESSEE. 5. THE LEARNED A.R. VEHEMENTLY ARGUED THAT SU B-SECTION (1) OF SECTION 80HHF REFERS TO THE BUSINESS OF EXPORT AND AS SUCH THE EXPORT BUSINESS HAS TO BE SEEN AS SEPARATE AND DISTINCT FROM THE DOMESTIC BUSINESS FO R THE PURPOSE OF DEDUCTION UNDER THIS SECTION. HE CLAIMED THAT SINCE THE ASSESSEE WA S MAINTAINING SEPARATE BOOKS OF ACCOUNT IN RESPECT OF THE BUSINESS OF EXPORT HENCE THE AMOUNT OF DEDUCTION CLAIMED BY IT SHOULD NOT BE TINKERED WITH. IN SUPPORT OF HI S SUBMISSION HE RELIED ON THE JUDGEMENT OF RATHORE BROTHERS (SUPRA) IN WHICH THE ASSESSEE MAINTAINED SEPARATE ACCOUNTS FOR EXPORT AS WELL AS DOMESTIC SALES AND T HE HONBLE HIGH COURT HELD THAT CLAUSE (B) OF SUB-SECTION (3) OF SECTION 80HHC COUL D NOT BE INVOKED AND THE ASSESSEE WAS ENTITLED TO RELIEF U/S.80HHC IN RESPEC T OF ENTIRE EXPORT NET PROFITS. HE ITA NOS.3175 & 3932/MUM/2004 SRI ADHIKARI BROTHERS TELEVISION. 7 ALSO RELIED ON THE ORDER PASSED BY MUMBAI BENCH OF THE TRIBUNAL IN DATAMATICS LTD. VS. ACIT [(2007) 111 TTJ (MUMBAI) 55] IN WHICH IT HAS BEEN HELD THAT FOR CALCULATING DEDUCTION U/S.80HHE ONLY THE TURNOVER OF SEEPZ UNIT IS TO BE CONSIDERED AND NOT THE TOTAL TURNOVER OF ALL THE U NITS. FOR THE SAME PROPOSITION HE RELIED ON THE ORDER PASSED BY THE BANGALORE BENCH O F THE TRIBUNAL IN WIPRO GE MEDICAL SYSTEMS LTD. VS. DCIT [(2003) 81 TTJ (BANG) 455] . 6. AT THIS STAGE IT WOULD BE RELEVANT TO NOTE THAT THE FINANCE ACT 1999 INSERTED SECTION 80HHF WITH EFFECT FROM 1.4.2000 PROVIDING D EDUCTION IN RESPECT OF PROFITS AND GAINS FROM EXPORT OR TRANSFER OF FILM SOFTWARE ETC. SUB-SECTION (1) OF SECTION 80HHF PROVIDES THAT WHERE AN ASSESSEE IS ENGAGED IN THE BUSINESS OF SOFTWARE OR SOFTWARE RIGHTS THERE SHALL IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION BE ALLOWED DEDUCTION TO THE EXTENT OF THE PROFITS REFERRED TO IN SUB-SECTION (1A) DERIVED BY THE ASSESSEE FROM SUCH BUSINESS. S UB-SECTION (3) GIVES MEANING TO THE EXPRESSION PROFITS DERIVED FROM THE BUSINESS AS REFERRED TO SUB-SECTION (1) TO MEAN THE AMOUNT WHICH BEARS TO THE ` PROFITS OF THE BUSINESS THE SAME PROPORTION AS THE EXPORT TURNOVER BEARS TO THE TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY THE ASSESSEE. EXPLANATION BELOW SUB-SECTION (6) CONTAINS THE MEANING OF CERT AIN EXPRESSIONS FOR THE PURPOSE OF SECTION 80HHF. CLAUS E (F) OF EXPLANATION DEFINES ` PROFITS OF THE BUSINESS TO MEAN THE PROFITS OF THE BUSINESS AS COMPUTED UN DER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION AS REDUCED BY (A) NINETY PER CENT OF ANY RECEIPTS BY WAY OF BROKERAGE COMMISSIO N INTEREST RENT CHARGES OR ANY OTHER RECEIPT OF A SIMILAR NATURE INCLUDED IN SUCH PROFITS; AND (B) THE PROFITS OF ANY BRANCH OFFICE WAREHOUSE OR ANY OTHER ESTABLISHMEN T OF THE ASSESSEE SITUATED OUTSIDE INDIA;. CLAUSE (C) OF THE EXPLANATION DEFINES `EXPORT TURNOVER TO MEAN CONSIDERATION IN RESPECT OF SOFTWARE OR SOFTWARE RI GHTS RECEIVED IN OR BROUGHT INTO INDIA IN CONVERTIBLE FOREIGN EXCHANGE IN ACCORDANCE WITH SUB-SECTION (2). SUB- SECTION (2) OF SECTION 80HHF IN TURN PROVIDES TH AT THE DEDUCTION UNDER SUB- SECTION (1) SHALL BE ALLOWED ONLY IF THE CONSIDERAT ION IN RESPECT OF THE SOFTWARE OR ITA NOS.3175 & 3932/MUM/2004 SRI ADHIKARI BROTHERS TELEVISION. 8 SOFTWARE RIGHTS IS RECEIVED IN OR BROUGHT INTO INDI A BY THE ASSESSEE IN CONVERTIBLE FOREIGN EXCHANGE WITHIN THE PERIOD OF SIX MONTHS FR OM THE END OF THE PREVIOUS YEAR OR WITHIN SUCH FURTHER PERIOD AS THE COMPETENT AUTH ORITY MAY ALLOW IN THIS BEHALF. TOTAL TURNOVER HAS BEEN DEFINED IN CLAUSE (J) OF EXPLANATION AS UNDER:- (J) TOTAL TURNOVER SHALL NOT INCLUDE (A) ANY SUM REFERRED TO IN CLAUSES (IIIA) (IIIB) AND (IIIC) OF SECTION 28; (B) ANY FREIGHT TELECOMMUNICATION CHARGES OR INSU RANCE ATTRIBUTABLE TO THE DELIVERY OF THE FILM SOFTWARE MUSIC SOFTWAR E TELECAST RIGHTS TELEVISION NEWS SOFTWARE OR TELEVISION SOFTWARE AS DEFINED IN CLAUSE (D) (E) (G) (H) OR (I) AS THE CASE MAY BE OUTS IDE INDIA; (C) EXPENSES IF ANY INCURRED IN FOREIGN EXCHANG E IN PROVIDING THE TECHNICAL SERVICES OUTSIDE INDIA. 7. ON GOING THROUGH THE MATERIAL PARTS OF SE CTION 80HHF IT IS NOTED THAT THE DEDUCTION IS AVAILABLE IN RESPECT OF `PROFITS DERIV ED FROM THE ELIGIBLE BUSINESS WHICH SHALL BE THE AMOUNT WHICH BEARS TO THE `PROFI TS OF THE BUSINESS THE SAME PROPORTION AS THE `EXPORT TURNOVER BEARS TO THE ` TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY THE ASSESSEE. THE EXPRESSION `PROFITS DERIVED FROM ELIGIBLE BUSINESS WHICH IS THE SUBJECT MATTER OF DEDUCTION TO THE EXT ENT MENTIONED IN SUB-SECTION (1A) HAS BEEN GIVEN A PARTICULAR MEANING IN THIS SECTION. THIS EXPRESSION HAS NOT BEEN LEFT OPEN FOR DETERMINATION IN THE COMMERCIAL SENSE. RATHER IT HAS BEEN DEFINED TO MEAN THE PROFITS OF THE BUSINESS COMPUTE D UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION AS REDUCED BY THE AMOUNTS REFERRED TO IN SUB- CLAUSES (A) AND (B). IT IS THIS AMOUNT WHICH WHEN MULTIPLIED WITH THE EXPORT TURNOVER AND THEN DIVIDED BY THE TOTAL TURNOVER O F THE BUSINESS GIVES THE PROFITS DERIVED FROM THE EXPORT BUSINESS OF ELIGIBLE SOFTWA RE OR SOFTWARE RIGHTS AS MENTIONED IN SUB-SECTION (1). ITA NOS.3175 & 3932/MUM/2004 SRI ADHIKARI BROTHERS TELEVISION. 9 8. THE CLAIM OF THE ASSESSEE IS THAT THE MEAN ING OF TOTAL TURNOVER IN CLAUSE (J) OF EXPLANATION TO SECTION 80HHF SHOULD BE RESTRICTED ONLY TO THE EXPORT TURNOVER OF THE BUSINESS OF EXPORTS AND NOT THE ENTIRE BUSINESS . A GREAT DEAL OF EMPHASIS WAS LAID ON THE WORDS OF BUSINESS WHICH IN THE OPINIO N OF THE LEARNED A.R. REFERRED TO ONLY THE EXPORT BUSINESS. THE WHOLE CASE OF THE ASS ESSEE IS THAT EXPORT OF ELIGIBLE SOFTWARE/SOFTWARE RIGHTS IS A SEPARATE BUSINESS. T HE EXPRESSION `THE BUSINESS AS USED IN SECTION 80HHF AS PER THE LD. AR REFERS TO THE EXPORT BUSINESS ONLY AND ONCE THE INCOME OF SUCH EXPORT BUSINESS IS IDENTIFI ABLE THEN THE DEDUCTION HAS TO FOLLOW AS REPRESENTING THE INCOME FROM EXPORTS BUS INESS IN DISREGARD TO THE OTHER BUSINESS INCOME. THIS INTERPRETATION OF THE EXPRES SION `THE BUSINESS IN OUR CONSIDERED OPINION IS DEVOID OF ANY MERIT. `THE BU SINESS REFERS TO THE CARRYING ON OF ONE BUSINESS WHICH IN THE PRESENT CASE IS THE E XPLOITATION OF ELIGIBLE SOFTWARE/SOFTWARE RIGHTS. SO FAR AS INCOME FLOWS F ROM SUCH BUSINESS IT SHALL CONTINUE TO ASSUME THE CHARACTER OF INCOME OF THAT BUSINESS. SUCH EXPLOITATION OF SOFTWARE/SOFTWARE RIGHTS MAY BE IN DOMESTIC OR FORE IGN MARKET. EXPLOITING SUCH RIGHTS IN FOREIGN MARKET CAN NOT BE CONSIDERED AS S EPARATE BUSINESS DISTINCT FROM THAT OF SUCH EXPLOITATION DONE IN THE INDIAN MARKET . SO LONG AS THE PRODUCT OFFERED BY THE ASSESSEE IS SIMILAR IN NATURE AND CHARACTER IT CONSTITUTES THE SAME BUSINESS NOTWITHSTANDING THE FACT THAT ITS CONSUMPTION IS IN DOMESTIC OR FOREIGN MARKET. THE SITUATION WOULD HAVE BEEN DIFFERENT IF THE ASSESSEE HAD BEEN EARNING INCOME FROM THE COMMERCIAL EXPLOITATION OF SUCH ELIGIBLE SOFTWA RE/SOFTWARE RIGHTS IN THE FOREIGN MARKET AND DOING SOME DIFFERENT BUSINESS UNRELATE D TO FILM SOFTWARE OR TELEVISION SOFTWARE ETC. IN THE INDIAN MARKET. IN THAT CASE BOTH THE INDIAN AND FOREIGN BUSINESSES WOULD HAVE CONSTITUTED SEPARATE BUSINESS . BUT WHERE THE PRODUCTS OFFERED IN THE INDIAN AND FOREIGN MARKETS IS OF THE SAME NATURE THEN IT CANNOT BE SAID THAT EXPORT ACTIVITY IS A SEPARATE BUSINESS DI STINCT FROM THE DOMESTIC ACTIVITY. COMING BACK TO THE FACTS OF THE INSTANT CASE WE FI ND THAT THE ASSESSEE IS ENGAGED ONLY IN ONE BUSINESS WHICH IS THAT OF PURCHASING O R PRODUCING TELEVISION SOFTWARE ITA NOS.3175 & 3932/MUM/2004 SRI ADHIKARI BROTHERS TELEVISION. 10 WHICH ARE EXPLOITED IN THE INDIAN AS WELL AS FOREIG N MARKETS. IT IS ONE COMPOSITE BUSINESS AND ONLY THE PROFITS DERIVED FROM THE EXPO RT OF SUCH ELIGIBLE SOFTWARE OR SOFTWARE RIGHTS QUALIFY FOR DEDUCTION UNDER THIS SECTION. IT IS WHOLLY IMPROPER TO DISINTEGRATE THIS SINGLE BUSINESS INTO TWO BUSINESSES ON THE BASIS OF MARKET COVERED. BUSINESS IS IDENTIFIED WITH THE NATURE OF PRODUCT DEALT IN AND NOT THE SPHERE OF ACTIVITY. IF WE ACCEPT THE AS SESSEES CONTENTION THAT THOUGH THE NATURE OF PRODUCT IN THE DOMESTIC AND FOREIGN MARKET IS SAME BUT THE EXPORT BUSINESS BE HELD AS SEPARATE BUSINESS O N THE BASIS OF GEOGRAPHICAL CONSIDERATIONS THEN THE DOMESTIC MARKET WOULD ALS O REQUIRE SPLITTING INTO VARIOUS BUSINESSES ON THE BASIS OF STATES OR DISTRI CTS OR CITIES OR EVEN THE VILLAGES COVERED. THIS IS AN ABSURD PROPOSITION. AS WE HAVE SEEN THAT THE ONLY BUSINESS OF THE ASSESSEE IS TO PRODUCE OR PURC HASE TV SERIALS WHICH ARE THEREAFTER EXPORTED OR TELECAST IN INDIA THROUGH DI FFERENT CHANNELS HOW AND UNDER WHICH CIRCUMSTANCES THIS ONE INDIVISIBLE BUSI NESS CAN BE SEGREGATED INTO TWO BUSINESSES IS BEYOND OUR COMPREHENSION. TH ERE IS ONE COMPOSITE BUSINESS OF PURCHASING AND PRODUCING TV SERIALS. IT IS NOT AS IF SOME BUSINESS ALIEN TO THAT OF PRODUCTION AND PURCHASE OF TV SERI AL IS CARRIED ON BY THE ASSESSEE IN THE DOMESTIC MARKET THE PROFIT AND TUR NOVER OF WHICH ARE SOUGHT TO BE CLUBBED BY THE REVENUE FOR THE PURPOSES OF DE DUCTION U/S.80HHF. IF THE VIEW POINT OF THE LEARNED A.R. IS TAKEN TO A LOGICA L CONCLUSION THAT THE EXPORT COMPONENT BE CONSIDERED AS SEPARATE BUSINESS THEN T HE WHOLE MODUS OPERANDI AS ENSHRINED IN SUB-SECTION (3) OF SECTION 80HHF WO ULD BECOME OTIOSE INASMUCH AS THERE WILL REMAIN NO NEED TO DIV IDE THE PROFITS OF THE BUSINESS WITH TOTAL TURNOVER AND THEN MULTIPLIED WI TH THE EXPORT TURNOVER AS BOTH THESE FIGURES WOULD BE CONSTANT. THE CORRECT INTERPRETATION IN OUR CONSIDERED OPINION IS TO VIEW `THE BUSINESS OF PR ODUCTION AND PURCHASE OF ITA NOS.3175 & 3932/MUM/2004 SRI ADHIKARI BROTHERS TELEVISION. 11 TV SERIAL AS ONE IRRESPECTIVE OF THE FACT THAT THE INCOME FROM THEIR EXPLOITATION IS FLOWING IN FROM INDIAN OR FOREIGN M ARKETS. 9. IT HAS ALSO BEEN ARGUED BY THE LEARNED A.R . THAT THE DEFINITION OF TOTAL TURNOVER GIVEN IN CLAUSE (J) OF EXPLANATION SHOULD BE RESTRICTED ONLY TO THAT OF EXPORT BUSINESS AND THAT OF THE DOMESTIC BUSINESS S HOULD BE EXCLUDED. WE FIND THAT THE LD. CIT(A) WAS SWAYED BY THE ARGUMENT THAT TH IS DEFINITION IS NOT EXHAUSTIVE AS IT SIMPLY SPECIFIES ITEMS WHICH WOULD NOT BE INC LUDED IN THE TOTAL TURNOVER. THIS CONTENTION IN OUR CONSIDERED OPINION IS BEREFT OF ANY FORCE FOR THE REASON THAT THERE ARE CERTAIN EXCLUSIONS PROVIDED FOR IN THIS D EFINITION WHICH SHALL GO TO REDUCE THE AMOUNT OF TOTAL TURNOVER. WHEN WE GO BACK TO SU B-SECTION (3) IT IS SEEN THAT THE WORDS TOTAL TURNOVER ARE JOINED BY THE EXPRESSION OF THE BUSINESS CARRIED ON BY THE ASSESSEE. IT THEREFORE BECOMES EXPLICITLY CL EAR THAT IT IS TOTAL TURNOVER OF THE BUSINESS AS A WHOLE WHICH IS CARRIED ON BY THE ASSE SSEE I.E. REFERRED TO IN SUB- SECTION (3) OF SECTION 80HHF. WE HAVE NOTED SUPRA THAT THE PHRASE `THE BUSINESS AS USED IN THIS SECTION REFERS TO THE BUSINESS AS A WHOLE AND NOT AS DIVIDED ON GEOGRAPHICAL CONSIDERATIONS SO LONG AS NATURE OF P RODUCTS DEALT WITH CONTINUES TO REMAIN SAME. THUS IT FOLLOWS THAT THE DEFINITION O F TOTAL TURNOVER IN THIS SECTION CANNOT BE CABINED TO EXPORT TURNOVER ONLY. RATHER I T WOULD ENCOMPASS BOTH THE DOMESTIC AND EXPORT TURNOVER OF THE COMPOSITE BUSI NESS. 10. THE NEXT LEG OF THE LD. ARS SUBMISSION WHICH FOUND FAVOUR WITH THE LD. CIT(A) IS QUA THE COMPUTATION OF DEDUCTION U/S 80HHF WITH RESPE CT TO THE PROFITS DERIVED FROM EXPORT ACTIVITY ONLY WHEN SEPARATE BOO KS OF ACCOUNTS HAVE BEEN MAINTAINED. RELIANCE HAS BEEN PLACED BY THE LEARNED A.R. ON CERTAIN JUDGEMENTS / TRIBUNAL ORDERS IN WHICH IT HAS BEEN HELD THAT WHER E THE ASSESSEE HAS MAINTAINED SEPARATE BOOKS OF ACCOUNT THEN CLAUSE (B) OF SUB-S ECTION (3) OF SECTION 80HHC SHOULD NOT BE INVOKED AND THE RELIEF BE ALLOWED U/S .80HHC IN RESPECT OF ENTIRE EXPORT NET PROFITS. MOST OF THE DECISIONS REFERRED TO BY THE LEARNED A.R. ARE IN THE ITA NOS.3175 & 3932/MUM/2004 SRI ADHIKARI BROTHERS TELEVISION. 12 CONTEXT OF SECTION 80HHC. SUB-SECTION (3) OF SECTIO N 80HHC HAS THREE CLAUSES NAMELY (A) (B) AND (C). AS PER CLAUSE (A) THE PRO FIT DERIVED FROM EXPORT HAS BEEN DEFINED TO MEAN THE PROFITS OF THE BUSINESS THE SAM E PROPORTION AS EXPORT TURNOVER IN RESPECT OF SUCH GOODS BEARS TO THE TOTAL TURNOVE R OF THE BUSINESS CARRIED ON BY THE ASSESSEE. THE LANGUAGE OF CLAUSE (A) OF SECTION 80H HC(3) IS ALMOST SIMILAR TO SUB- SECTION (3) OF SECTION 80HHF AND THE AO HAS ADOPTED THIS METHOD IN THE PRESENT CASE. THEN THERE IS CLAUSE (B) AS PER WHICH WHERE T HE EXPORT IS OF TRADING GOODS THE PROFITS DERIVED FROM SUCH EXPORT SHALL BE THE EXPOR T TURNOVER IN RESPECT OF SUCH TRADING GOODS AS REDUCED BY THE DIRECT COST AND IND IRECT COST ATTRIBUTABLE TO SUCH EXPORT. THIS IS THE METHOD WHICH HAS BEEN FOLLOWED BY THE ASSESSEE AND APPROVED IN THE FIRST APPEAL. LASTLY CLAUSE (C) OF SUB-SECT ION (3) OF SECTION 80HHC IS HYBRID OF CLAUSES (A) AND (B) WHICH DEALS WITH THE MECHANI SM OF WORKING OUT PROFITS OF BUSINESS DERIVED FROM SUCH EXPORT IN RESPECT OF GOO DS OR MERCHANDISE MANUFACTURED OR PROCESSED BY THE ASSESSEE AS WELL A S THAT OF THE TRADING GOODS. 11. IN THE CASE OF RATHORE BROTHERS (SUPRA) AND OTHERS RELIED ON BY THE LEARNED A.R. IT HAS BEEN HELD THAT WHERE SEPARATE BOOKS OF ACCOUNT ARE MAINTAINED THEN CLAUSE (A) OF SECTION 80HHC(3) SHOULD NOT BE A PPLIED AND THE DEDUCTION BE ALLOWED IN RESPECT OF THE ENTIRE EXPORT NET PROFITS . ALL THESE DECISIONS HAVE BEEN MAINLY RENDERED IN THE CONTEXT OF SECTION 80HHC IN WHICH THE MECHANISM FOR WORKING OUT THE PROFITS DERIVED FROM EXPORT HAS BE EN GIVEN IN THREE DIFFERENT SITUATIONS DEPENDING UPON THE FULFILLMENT OF THE REQUISITE REQUIREMENTS. BUT WHEN WE TURN TO SECTION 80HHF(3) IT IS MANIFESTED THAT ONLY ONE METHOD HAS BEEN PROVIDED FOR IN THE PROVISION TO COMPUTE THE PROFIT S DERIVED FROM EXPORTS ON THE BASIS OF PROPORTION. THERE IS NO PROVISION SIMILA R TO CLAUSE (B) OF SECTION 80HHC(3) PROVIDING FOR DETERMINING THE PROFITS D ERIVED FROM SUCH EXPORTS BY REDUCING DIRECT AND INDIRECT COSTS FROM THE EXPORT TURNOVER. WE ARE UNABLE TO ENDORSE THE VIEW OF THE LD. FIRST APPELLATE AUTHORI TY THAT IN THE ABSENCE OF ANY DIRECT ITA NOS.3175 & 3932/MUM/2004 SRI ADHIKARI BROTHERS TELEVISION. 13 DECISION IN THE CONTEXT OF SEC. 80HHF THE RATIO DECIDENDI AS LAID DOWN IN SOME OF THE CASES IN SEC. 80HHC COULD BE FOLLOWED. 12. WE HAVE NOTED ABOVE THAT SUB-SECTION (1) OF SECTION 80HHF REFERS TO DEDUCTION TO THE EXTENT OF PROFITS DERIVED BY THE A SSESSEE FROM SUCH BUSINESS IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF TH IS SECTION . IT IMPLIES THAT WHATEVER MAY BE THE MODE OF COMPUTING OTHER DEDUCTI ONS UNDER CHAPTER VI-A THE MODE OF COMPUTING THE DEDUCTION U/S 80HHF HAS TO BE IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION. SUB-SECT ION (3) IS AN INTEGRAL PART OF SECTION 80HHF. WHEN THIS SUB-SECTION CLEARLY SETS OUT THE METHOD FOR DETERMINING THE PROFITS DERIVED FROM THE EXPORT BUSINESS IT IS WHOLLY ILLOGICAL AND UNNECESSARY FOR ANYONE TO REFER TO THE SCHEME OF ANY OTHER SECT ION OF CHAPTER VI-A OR FOR THAT MATTER SECTION 80HHC AND GET GUIDED BY THE DECISION S REFERRED TO IN THAT SECTION. WHEN WE CONCENTRATE ON SUB-SECTION (3) OF SECTION 8 0HHF IT IS CLEARLY DEDUCIBLE THAT THERE IS ONLY ONE METHOD FOR COMPUTING THE PRO FITS DERIVED FROM EXPORT IRRESPECTIVE OF THE WAY IN WHICH THE BOOKS OF ACCOU NT OF THE ASSESSEE HAVE BEEN MAINTAINED WHICH HAS BEEN RIGHTLY FOLLOWED BY THE AO. THERE IS NO MANDATE FOR COMPUTING PROFITS DERIVED FROM EXPORT BY REDUCING D IRECT AND INDIRECT COSTS FROM EXPORT TURNOVER OF SOFTWARE OR SOFTWARE RIGHTS A C OURSE WHICH IS AVAILABLE IN SECTION 80HHC SUBJECT TO FULFILLMENT OF CERTAIN CO NDITIONS. 13. THE CASE OF DATAMATICS LTD.(SUPRA) RELIED ON BY THE LD. AR IN SUPPORT OF HIS CASE DEALS WITH THE COMPUTATION OF DEDUCTION U /S.80HHE. IN THAT CASE THE ASSESSEE-COMPANY WAS EXPORTING COMPUTER SOFTWARE MA NUFACTURED IN SEEPZ UNIT AND KEEPING SEPARATE ACCOUNT BOOKS. THE A.O. HELD T HAT TOTAL TURNOVER OF ENTIRE BUSINESS WAS TO BE CONSIDERED INSTEAD OF TURNOVER O F ONLY THE UNIT LOCATED AT SEEPZ. BEFORE THE TRIBUNAL IT WAS PLEADED ON BEHAL F OF THE ASSESSEE THAT : WHERE THE TWO SEPARATE BUSINESS OF AN ASSESSEE ARE PROPER LY DEMARCATED IN TERMS OF LOCATION OPERATIONS AND ALSO WHERE SEPARATE BOOKS OF ACCOUNT ARE MAINTAINED FOR ITA NOS.3175 & 3932/MUM/2004 SRI ADHIKARI BROTHERS TELEVISION. 14 DIFFERENT UNITS IT SHOULD BE CONSIDERED AS SEPARAT E ENTITY AND ONLY TURNOVER OF SEEPZ UNIT SHOULD HAVE BEEN CONSIDERED WHILE CALCUL ATING DEDUCTION U/S.80HHE. IT WAS IN THIS BACKDROP OF FACTS THAT THE TRIBUNAL HELD THAT ONLY TURNOVER OF SEEPZ UNIT WAS TO BE CONSIDERED WHILE CALCULATING DEDUCTI ON U/S.80HHE. THIS DECISION DOES NOT SUPPORT THE ASSESSEES CASE FOR TWO REASO NS. FIRSTLY IT WAS IN THE CONTEXT OF SECTION 80HHE AND WE ARE DEALING WITH SEC. 80HHF. SECONDLY TWO SEPARATE BUSINESS OF THE ASSESSEE WERE PROPERLY DEMARCATED I N TERMS OF LOCATION AND OPERATIONS. ON THE OTHER HAND WE ARE DEALING WITH A CASE IN WHICH THERE IS ONLY ONE BUSINESS THAT OF PRODUCING OR PURCHASING THE TV SER IAL RIGHTS. 14. THE OTHER CASE OF WIPRO GE MEDICAL SYSTEMS LTD. (SUPRA) PRESSED BY THE LD. AR IN SUPPORT OF HIS VIEW POINT ALSO DOES NOT SUPPORT HIS CASE FOR THE REASON THAT PRIMARILY IT IS BASED ON SECTION 80HHE AND S ECONDLY IN THAT CASE IT HAS BEEN HELD THAT THE INCLUSION OF OTHER TURNOVER OF THE AS SESSEE NOT CONNECTED WITH THE COMPUTER SOFTWARE BUSINESS WAS NOT JUSTIFIED. IN RE ACHING THIS CONCLUSION THE TRIBUNAL NOTED THAT : THE TOTAL TURNOVER FOR THE PURPOSE OF SECTION 80HHE CAN ONLY MEAN THE TOTAL TURNOVER OF THE COMPUTER SOFTWARE BOTH IN INDIA AND OUTSIDE INDIA . UNDER THE SCHEME OF THE SAID SECTION IT IS NOT COR RECT TO INCLUDE ANY OTHER TURNOVER NOT CONNECTED WITH THE COMPUTER SOFTWARE BUSINESS. THUS THE RATIO OF THIS DECISION IS THAT THE TURNOVER OF COMPUTER SOFTWARE BOTH FROM FOREIGN AND DOMESTIC MARKET BE CONSIDERED AND IF THE ASSESSEE IS HAVING OTHER TURNOVER NOT CONNECTED WITH THE COMPUTER SOFTWARE BUSINESS THEN THAT SHOU LD NOT BE CONSIDERED. THIS CASE RATHER SUPPORTS THE REVENUES CONTENTION AND NOT TH AT OF THE ASSESSEE BECAUSE THE ONLY BUSINESS OF THE ASSESSEE IS THAT OF PRODUCING TV SERIALS WHETHER IT IS CARRIED ON IN OR OUTSIDE INDIA. 15. THE LEARNED DEPARTMENTAL REPRESENTATIV E HAS BROUGHT TO OUR NOTICE A DIRECT DECISION RENDERED BY THE MUMBAI BENCH OF THE TRIBUNAL IN THE CONTEXT OF SECTION 80HHF IN ACIT VS. STAR INDIA (P.) LTD. [(2009) 117 ITD 319 ( MUM.)] . IN ITA NOS.3175 & 3932/MUM/2004 SRI ADHIKARI BROTHERS TELEVISION. 15 THAT CASE THE TRIBUNAL HELD THAT SUB-SECTION (3) PR OVIDES A FORMULA FOR DETERMINING SUCH PROFITS ON THE BASIS OF RATIO OF EXPORT TURNOV ER TO TOTAL TURNOVER. THE FORMULA ITSELF SHOWS THAT PROFITS COMPUTED UNDER THE HEAD ` PROFITS AND GAINS OF BUSINESS OR PROFESSION WOULD INCLUDE NOT ONLY THE PROFIT FROM THE BUSINESS REFERRED TO IN SUB- SECTION (1) BUT WOULD ALSO INCLUDE THE PROFIT FROM OTHER BUSINESS ACTIVITIES. THUS OUR VIEW GETS SUPPORT FROM THE ORDER OF THE CO-ORDI NATE BENCH OF THE TRIBUNAL. 16. THEREFORE IN PRINCIPLE WE UPHOLD THE ME THOD ADOPTED BY THE ASSESSING OFFICER FOR THE COMPUTATION OF DEDUCTION U/S.80HHF THEREBY SETTING ASIDE THE VIEW TAKEN BY THE LEARNED CIT(A). IT IS CLARIFIED THAT T HE PROFITS DERIVED FROM SUCH BUSINESS U/S 80HHF ARE TO BE CALCULATED BY MULTIPLY ING `EXPORT TURNOVER WITH THE `PROFITS OF THE BUSINESS AS DIVIDED BY THE `TOTAL TURNOVER OF THE BUSINESS . `THE BUSINESS IN THE PRESENT CONTEXT MEANS THE COMP OSITE BUSINESS OF THE ASSESSEE OF PRODUCING AND PURCHASING TV SERIALS AND THEN EARNIN G INCOME BY WAY OF THEIR COMMERCIAL EXPLOITATION WHETHER FROM EXPORT OR DOM ESTIC MARKET INTER ALIA INCLUDING THAT FROM SLOT CHARGES. 17. IN VIEW OF OUR ABOVE CONCLUSION THE DIS CUSSION OF THE LD. CIT(A) IN DIRECTING TO REDUCE INDIRECT EXPENSES OF RS.1 CRO RE FROM THE EXPORT TURNOVER HAS BECOME ACADEMIC. ACCORDINGLY GROUND NO.4 RAISED BY THE REVENUE CHALLENGING THE ALLOCATION OF DIRECT AND INDIRECT EXPENSES AS HELD BY THE LEARNED CIT(A) TO BE REASONABLE AT RS.1.03 CRORE AND GROUND NO.1 OF THE ASSESSEES APPEAL ASSAILING THAT THE ESTIMATE OF RS.1 CRORE TOWARDS INDIRECT EXPENSE S AS MADE BY THE LEARNED CIT(A) WAS HIGHER ARE DISMISSED AS HAVING BECOME INFRUCTU OUS. 18. THERE IS ONE MORE ASPECT OF THIS ISSUE WHICH REQUIRES ADJUDICATION. THE ASSESSING OFFICER WHILE COMPUTING DEDUCTION U/S.80H HF REDUCED THE SUM OF RS.4.45 CRORES FROM EXPORT TURNOVER AS WELL AS TOTA L TURNOVER REPRESENTING THE AMOUNT UNREALIZED BY THE ASSESSEE IN CONVERTIBLE F OREIGN EXCHANGE FROM EXPORT ITA NOS.3175 & 3932/MUM/2004 SRI ADHIKARI BROTHERS TELEVISION. 16 AND FURTHER IN RESPECT OF WHICH NO CERTIFICATE FROM RBI SEEKING PERMISSION FOR THE EXTENSION OF TIME FOR REALIZATION WAS FILED. WHEN THIS MATTER CAME UP BEFORE THE LEARNED CIT(A) THE ASSESSEE FILED ADDITIONAL EVIDEN CE TOWARDS REALIZATION OF RS.4.42 CRORES ALONG WITH THE APPROVAL OF RBI AS A GAINST EXPORT DEBTORS TO THE TUNE OF RS.4.45 CRORES. WHEN THESE DOCUMENTS WERE REFERR ED BACK BY THE LEARNED CIT(A) THE A.O. POINTED OUT THAT RBI APPROVAL FOR US$ 7 05 300 WAS NOT FILED AND FURTHER THE RBIS LETTER POINTED OUT REALIZATIO N ON 17.10.2000 AT US$ 10 15 300 AGAINST THE AMOUNT OF US$ 10 13 881 MENTIONED IN TH E CERTIFICATE ISSUED BY THE DEVELOPMENT CREDIT BANK LIMITED. THE ASSESSEE CLARI FIED TO THE LEARNED CIT(A) THAT THE DOCUMENTS FOR US$ 7 05 300 DID NOT PERTAIN TO THIS YEAR AND THE PERMISSION FROM RBI WAS OBTAINED FOR REMITTANCE OF US$10 15 30 0 PERTAINING TO THIS YEAR WHICH WAS EQUIVALENT TO THE VALUE OF RS.4.42 CRORES . ON THE BASIS OF THESE FACTS THE LEARNED CIT(A) HELD THAT THE ASSESSEE WAS ABLE TO R EALIZE ONLY US$ 10 13 881 WHICH ON PRO-RATA BASIS MEANT THE REALIZATION OF RS.4.41 CRORES THEREBY STILL LEAVING A GAP OF RS.3.83 LAKHS WHICH WAS NOT YET REALIZED. SO HE INCLUDED RS.4.41 CRORES IN THE TOTAL TURNOVER. 19. WE HAVE UPHELD IN PRINCIPLE THE MANN ER OF COMPUTATION OF DEDUCTION U/S.80HHF AS ADOPTED BY THE ASSESSING OFFICER. THE FIGURES OF EXPORT TURNOVER AND TOTAL TURNOVER PLAY PIVOTAL ROLE IN SUCH CALCULATIO N. THE ASSESSING OFFICER REDUCED RS.4.45 CRORES FROM BOTH THE FIGURES ON THE GROUND THAT THE AMOUNT WAS NOT REALIZED WITHIN THE STIPULATED PERIOD OF SIX MONTHS AND FURT HER THERE WAS NO EVIDENCE OF THE ASSESSEE HAVING APPLIED TO RBI SEEKING EXTENSION OF TIME. THE LEARNED CIT(A) CONSIDERED SOME DOCUMENTS AND HELD THAT THE AMOUNT OF REALIZATION OF RS.4.41 CRORES WAS INCLUDIBLE IN THE FIGURE OF TOTAL TURNOV ER. THESE DETAILS HAVE NOT BEEN PLACED BEFORE US. THE ASSESSEE DID NOT FURNISH THE DOCUMENTS SHOWING RBIS APPROVAL IN RESPECT OF AMOUNT IN DISPUTE TO THE ASS ESSING OFFICER AND FURTHER WHEN THE LEARNED CIT(A) SENT SUCH DOCUMENTS TO HIM FOR C OMMENTS CERTAIN OBJECTIONS WERE RAISED AS TO THE VARIATION IN THE AMOUNT. IN OUR OPINION IT WOULD BE JUST AND ITA NOS.3175 & 3932/MUM/2004 SRI ADHIKARI BROTHERS TELEVISION. 17 FAIR IF THE IMPUGNED ORDER IS SET ASIDE ON THIS ISS UE AND THE MATTER IS SENT BACK TO THE A.O. FOR DECIDING THE AMOUNT INCLUDIBLE IN THE FIGU RES OF TOTAL AND EXPORT TURNOVER OUT OF THE EXPORT DEBTORS AS AT THE END OF THE YEAR AS PER LAW. THERE AFTER THE AO WILL RE-COMPUTE THE AMOUNT OF RELIEF U/S 80HHF IN A CCORDANCE WITH OUR ABOVE DIRECTIONS AFTER ALLOWING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 20. GROUND NO.5 OF THE REVENUES APPEAL AND GROUND NO.2 OF THE ASSESSEES APPEAL ARE TOWARDS ALLOWING OF DEPRECIATION ON OFFI CE PREMISES. THE FACTS OF THESE GROUNDS ARE THAT THE ASSESSEE MADE PAYMENT TO M/S.W ESTWIND REALTORS PRIVATE LIMITED (WRPL FOR SHORT) TOWARDS PURCHASE OF SHAR ES AMOUNTING TO RS.2 76 92 000 AND CONSTRUCTION CONTRIBUTION (WRONG LY MENTIONED BY THE A.O. AS SECURITY DEPOSIT) AMOUNTING TO RS.1 67 55 000 TOTAL ING TO RS.4 44 47 000. DEPRECIATION WAS CLAIMED ON SUCH AMOUNT. ON BEING C ALLED UPON TO JUSTIFY THE CLAIM OF DEPRECIATION THE ASSESSEE STATED THAT SUC H SHARES WERE PURCHASED WITH A VIEW TO BECOME OWNER OF FLOOR AREA BASEMENT PARKIN G AND TERRACE OF BUILDING CALLED OBEROI CHAMBERS FROM WRPL. COPIES OF AGREEME NT MEMORANDUM AND ARTICLES OF ASSOCIATION OF WRPL WERE ALSO FILED BEF ORE THE A.O. THE A.O. NOTED THAT AS PER COPIES OF THE AGREEMENT THE ASSESSEE HA D PURCHASED ONLY SHARES IN THE POSSESSION OF SOME SHARE HOLDERS. IT WAS FURTHER NOTED THAT BUSINESS OF WRPL WAS TAKEN OVER BY THE ASSESSEE AND NOT THE BUILDING ALO NE. SINCE THE BUILDING WAS STOCK- IN-TRADE IN THE HANDS OF WRPL THE ASSESSING OFFICE R HELD THAT THE SAME COULD NOT FORM PART OF BLOCK OF ASSESSEES ASSETS. HE THEREF ORE DISALLOWED DEPRECIATION TO THE TUNE OF RS.42 17 350 CLAIMED BY THE ASSESSEE ON THE PREMISES ACQUIRED IN OBEROI CHAMBERS. THE ASSESSEE ARGUED BEFORE THE LEA RNED CIT(A) THAT IN THE REGULAR ASSESSMENT OF WRPL THE ACQUISITION OF SHAR ES BY THE ASSESSEE HAD BEEN TREATED AS SALE OF THE PREMISES BY WRPL AND IN ITS SUPPORT THE BALANCE SHEET OF WRPL AS ON 31.3.2000 WAS ALSO FILED. THE LEARNED CI T(A) NOTED THAT SUM OF RS.1.67 CRORE WAS PAID BY THE ASSESSEE TOWARDS NON- REFUNDABLE CONSTRUCTION CONTRIBUTION AND THE REMAINING SUM OF RS.2.76 CRORE S WAS TOWARDS CONSIDERATION ITA NOS.3175 & 3932/MUM/2004 SRI ADHIKARI BROTHERS TELEVISION. 18 OF SHARES. IT WAS HELD THAT THE PAYMENT OF RS.2.76 CRORE COULD NOT BE CONSIDERED AS PART PAYMENT FOR ACQUISITION OF PREMISES. HE THERE FORE GRANTED DEPRECIATION ON RS.1.67 CRORE REPRESENTING CONTRIBUTION TOWARDS CON STRUCTION. SUCH DEPRECIATION WAS ALLOWED AT RS.16 00 500. BOTH THE SIDES ARE IN APPEAL AGAINST THEIR RESPECTIVE STANDS. 21. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PE RUSING THE RELEVANT MATERIAL ON RECORD WE FIND THAT WRPL IS A COMPANY WHICH IS ENGA GED IN THE BUSINESS AS BUILDERS. THE ASSESSEE PURCHASED CERTAIN SHARES IN THIS COMPANY FOR TOTAL CONSIDERATION OF RS.2.76 CRORE AND IN ADDITION TO T HAT IT PAID CONSTRUCTION CONTRIBUTION WHICH IS NON-REFUNDABLE TO THE TUNE OF RS.1.67 CRORE THEREBY MAKING TOTAL INVESTMENT OF RS.4.44 CRORE. THE ASSESSING OF FICER HAD NOT CONSIDERED THE FACTS PROPERLY WHEN HE HELD THAT THE ASSESSEE TOOK OVER THE BUSINESS OF WRPL BY PURCHASING CERTAIN SHARES AND THE ASSETS OF THAT CO MPANY CONTINUED TO REMAIN WITH IT AS SUCH. THE POSITION IS DIFFERENT HERE. THE ASS ESSEE PURCHASED SHARES WITH A VIEW TO OBTAIN USE AND OCCUPY SOME PART OF THE PREMISES IN THE BUILDING CALLED OBEROI CHAMBERS. WE HAVE PERUSED THE ARTICLES OF ASSOCIATI ON OF THIS COMPANY A COPY OF WHICH IS AVAILABLE ON RECORD. AS PER THE ARTICLES OF ASSOCIATION READ IN THE LIGHT OF APPENDIX-I OF WRPL IT IS SEEN THAT ANY PERSON CAN BECOME MEMBER BY PURCHASING SHARES IN THE COMPANY AND ALSO CONTRIBUTING TOWARDS CONSTRUCTION WHICH IS NON- REFUNDABLE. THERE IS A DEFINITE SCHEME FLOATED BY T HE COMPANY UNDER WHICH PREMISES HAVE BEEN DIVIDED INTO VARIOUS CLASSES SUC H AS CLASS A CLASS B CLASS C OR CLASS D OR CLASS E. IN ORDER TO BE ELIGIBLE FOR OBT AINING OCCUPYING AND USING THE PROPERTY IN A SPECIFIC CLASS IT IS INCUMBENT UPON THE MEMBER TO PURCHASE REQUISITE NUMBER OF SHARES AND ALSO DEPOSIT NON-REFUNDABLE CO NSTRUCTION CONTRIBUTION AGAIN OF THE REQUISITE AMOUNT. FOR EXAMPLE FOR OBTAINING RIGHTS IN CLASS A PROPERTY A PERSON IS REQUIRED TO HOLD 1 05 000 SHARES FOR TOTA L CONSIDERATION OF RS.73 50 000 AND ALSO PAY NON-REFUNDABLE CONSTRUCTION CONTRIBUTI ON OF RS.50 00 000. FOR OBTAINING SUCH RIGHTS IN TERRACE A PERSON REQUIRED TO HOLD 50 000 SHARES FOR A ITA NOS.3175 & 3932/MUM/2004 SRI ADHIKARI BROTHERS TELEVISION. 19 CONSIDERATION OF RS.35 00 000 AND NON-REFUNDABLE CO NSTRUCTION CONTRIBUTION AT RS.15 00 000. SIMILAR IS THE POSITION REGARDING PAR KING AREA FOR WHICH REQUIRED SHARES ARE 30 600 FOR A CONSIDERATION OF RS.21 40 0 00 AND CONSTRUCTION CONTRIBUTION OF RS.2 50 000. UNLESS THE REQUISITE SHARES ARE ACQ UIRED BY A MEMBER AND CONSTRUCTION CONTRIBUTION IS MADE NO PERSON CAN OBTAIN THE RIGHT TO USE AND OCCUPY THE PREMISES OF SPECIFIC CLASS IN OBEROI CHA MBERS. IN THE INSTANT CASE THE ASSESSEE ACQUIRED THREE PREMISES IN CLASS A WITH TE RRACE AND PARKING AREA BY ACQUIRING 3 95 600 SHARES WORTH RS.2.76 CRORES ALO NG WITH THE MAKING OF NON- REFUNDABLE CONSTRUCTION CONTRIBUTION OF RS.1.67 CRO RE THEREBY MAKING TOTAL INVESTMENT AT RS.4.44 CRORE. BY MAKING THIS INVESTM ENT THE ASSESSEE OBTAINED THE RIGHT TO USE AND OCCUPY THESE PREMISES. COMING BAC K TO THE ARTICLES OF ASSOCIATION OF WRPL WE FIND THAT CLAUSE 5 IS RELEVANT WHICH REA DS AS UNDER:- ANY MEMBER WHO HOLDS/OWNS THE REQUIRED NUMBER OF F ULLY PAID UP EQUITY SHARES OF THE COMPANY AND WHO SHALL CONTRIBU TE THE REQUIRED SUMS TOWARDS INTEREST FREE NON-REFUNDABLE CONSTRUCT ION CONTRIBUTION SHALL AT HIS OPTION BE ENTITLED TO USE AND OCCUPY ONE OF THE CLASS A OR CLASS B OR CLASS C OR CLASS D OR CLASS E PREMISE S AS THE CASE MAY BE SUBJECT TO AND IN ACCORDANCE WITH THESE ART ICLES OF ASSOCIATION AND THE APPENDIX I ANNEXED HERETO. CLASS 9(A) DEFINES A `MEMBER TO MEAN AND INCLUDE A MEMBER WHO HAS BECOME ENTITLED TO THE OCCUPANCY RIGHT IN RESPECT O F THE PREMISES. SUB-CLAUSE (B) OF CLAUSE 9 OF ARTICLES OF ASSOCIATION DEFINES SHARES AS UNDER:- `SHARES SHALL MEAN THE MINIMUM NUMBER OF FULLY PA ID UP EQUITY SHARES OF THE COMPANY REQUIRED TO BE HELD/OWNED BY A MEMBER TO USE AND OCCUPY THE CLASS A OR CLASS B OR CLASS C OR CLASS D OR CLASS E PREMISES IN THE COMPANYS BUILDING . WHEN WE PERUSE CLAUSE 10 OF THE ARTICLES OF ASSOCI ATION IT COMES OUT THAT NO MEMBER SHALL BE ENTITLED OR ALLOWED TO TRANSFER HIS SHARES UNLESS THE BOARD APPROVES ITA NOS.3175 & 3932/MUM/2004 SRI ADHIKARI BROTHERS TELEVISION. 20 SUCH TRANSFER. CLASS 15 OF ARTICLES OF ASSOCIATION WHICH IS MATERIAL FOR OUR PURPOSE IS AS UNDER:- ON TRANSFER OF THE SHARES BY THE COMPANY IN FAVOUR OF THE TRANSFEREE ALL THE RIGHTS AND BENEFITS OF THE TRAN SFEREE INCLUDING THE AMOUNTS OF THE MEMBER LYING IN THE INTEREST FREE NO N REFUNDABLE CONSTRUCTION CONTRIBUTION SHALL STAND TRANSFERRED I N FAVOUR OF THE TRANSFEREE. 22. ON GOING THROUGH THESE CLAUSES IT BECOMES APPARENT THAT ON BECOMING MEMBER BY PURCHASING REQUISITE NUMBER OF SHARES AND MAKING NON-REFUNDABLE CONSTRUCTION CONTRIBUTION THE MEMBER BECOMES ENTIT LED TO HOLD USE AND OCCUPY THE DEFINITE PREMISES. FURTHER SUCH SHARES ARE TRANSFER ABLE AND WHEN THERE IS TRANSFER OF SHARES THE RIGHTS AND BENEFITS OF THE TRANSFEROR STAND TRANSFERRED IN FAVOUR OF THE TRANSFEREE. STILL FURTHER `SHARES HAVE BEEN DEFIN ED TO MEAN THE MINIMUM NUMBER OF FULLY PAID UP EQUITY SHARES REQUIRED TO BE HELD/ OWNED BY A MEMBER TO USE AND OCCUPY THE PREMISES. THESE CLAUSES INDICATE THAT ON BECOMING MEMBER BY PURCHASING REQUISITE NUMBER OF SHARES AND PAYING TH E SPECIFIED NON-REFUNDABLE CONSTRUCTION CONTRIBUTION THE ASSESSEE BECAME ENTI TLED TO HOLD USE AND OCCUPY THE SAID PREMISES. SECTION 32 PROVIDES THAT DEPREC IATION SHALL BE ALLOWED WHEN AN ASSET IS OWNED BY THE ASSESSEE WHICH IS USED FOR TH E PURPOSE OF ITS BUSINESS. THE ASSESSING OFFICER IN THE INSTANT CASE HAS NOT DISPU TED THAT THE PREMISES TAKEN BY THE ASSESSEE FROM WRPL WERE NOT USED FOR THE PURPOSE OF ITS BUSINESS. INSOFAR AS THE SECOND ASPECT OF BEING THE OWNER OF THE PROPERTY IS CONCERNED WE FIND THAT BY HOLDING THE REQUISITE NUMBER OF SHARES AND GIVING CONSTRUCTION CONTRIBUTION THE ASSESSEE GOT THE RIGHT TO OBTAIN USE AND OCCUPY TH E PREMISES. THE SITUATION IS SOMEWHAT AKIN TO THAT OF A CO-OPERATIVE HOUSING SOC IETY WHICH IS LEGAL OWNER OF BUILDING AND THE MEMBERS GET RIGHT TO USE AND OCCUP Y THE PREMISES BY VIRTUE OF THEIR SHAREHOLDING IN THE SOCIETY. IT CAN BE NOTICE D THAT THE OWNERSHIP OVER THE PREMISES IS ATTACHED WITH THE ACQUISITION AND HOLDI NG OF REQUISITE SHARES AND ITA NOS.3175 & 3932/MUM/2004 SRI ADHIKARI BROTHERS TELEVISION. 21 CONTRIBUTING TOWARDS CONSTRUCTION. FURTHER ON THE T RANSFER OF SUCH SHARES THE OWNERSHIP OF THE FLAT AUTOMATICALLY GETS TRANSFERRE D TO THE TRANSFEREE. EVEN THOUGH THE ASSESSEE IS NOT A REGISTERED OWNER OF THE PREMI SES BUT IT HAS GOT ALL SUCH RIGHTS WHICH ENABLE OTHERS TO BE EXCLUDED FROM THE OWNERSH IP OF THE PROPERTY. THE ASSESSEE HAS RIGHT TO USE AND OCCUPY THE PROPERTY I N ITS OWN RIGHT. WHEN WE SEE THIS FACT IN JUXTAPOSITION TO THE OTHER FACT THAT THE RE QUISITE PAYMENT WAS MADE FOR ACQUIRING THESE PREMISES THERE REMAINS NO DOUBT T HAT THE ASSESSEE BECOME THE OWNER OF THE PROPERTY. THE HONBLE SUPREME COURT IN MYSORE MINERALS LTD. VS. CIT [(1999) 239 ITR 775 (SC)] HAS HELD THAT ANYONE IN POSSESSION OF PROPERTY IN HIS OWN TITLE EXERCISING SUCH DOMINION OVER THE PRO PERTY AS WOULD ENABLE OTHERS BEING EXCLUDED THEREFROM AND HAVING RIGHT TO USE AN D OCCUPY THE PROPERTY AND / OR TO ENJOY ITS USUFRUCT IN HIS OWN RIGHT WOULD BE T HE OWNER OF THE BUILDINGS AS PER SECTION 32(1) THOUGH A FORMAL DEED OF TITLE MAY NOT HAVE BEEN EXECUTED AND REGISTERED AS SUCH HE WOULD BE ENTITLED TO DEPRECIA TION THEREON. OUR VIEW IS SUPPORTED BY THE ORDER PASSED BY THE MUMBAI BENCH I N THE CASE OF DEPAK FERTILISERS & PETROCHEMICALS CORP. LTD. VS. DCIT (2 009) 116 ITD 372 (MUM). IT IS IMPERATIVE TO NOTE THAT WRPL IS ENGAGED IN TH E BUSINESS OF DEVELOPERS. THUS THE PREMISES CONSTRUCTED BY IT IN OBEROI CHAMBERS A RE ITS STOCK-IN-TRADE. THE SAID COMPANY TREATED THE ACQUISITION OF SHARES BY THE AS SESSEE AND OTHER MEMBERS AS SALE CONSIDERATION OF ITS PREMISES. THE BALANCE SHE ET OF WRPL WAS FILED BEFORE THE AUTHORITIES BELOW. THE EFFECT OF WRPL TREATING ACQUISITION OF SHARES BY THE ASSESSEE AS SALE OF ITS PREMISES IS THAT IT LOOSES ITS RIGHT TO TREAT THE PREMISES AS ITS OWN CAPITAL ASSET. IN SUCH CIRCUMSTANCES THE DEVELO PER COMPANY CANNOT CLAIM DEPRECIATION AS HAS BEEN HELD BY THE BANGALORE BENC H OF THE TRIBUNAL IN CENTURY GALAXY DEVELOPERS LIMITED VS. ACIT [(2009) 27 SOT 1 62 (BANGALORE)] . 23. REVERTING TO THE FACTS OF THE INSTANT C ASE IT IS NOTICED THAT THE ASSESSEE MADE TOTAL PAYMENT OF RS.4.44 CRORES TO WRPL WHICH HAS BEEN DIVIDED INTO TWO PARTS VIZ. CONSIDERATION FOR SHARES AT RS.2.76 CROR ES AND NON-REFUNDABLE ITA NOS.3175 & 3932/MUM/2004 SRI ADHIKARI BROTHERS TELEVISION. 22 CONSTRUCTION CONTRIBUTION OF RS.1.67 CRORE. BOTH TH ESE PAYMENTS ARE AIMED AT ACQUIRING USING AND OCCUPYING THE PROPERTY. BUT FO R THE PURCHASE OF SHARES IT IS NOT PERMISSIBLE TO BECOME MEMBER. IN THE LIKE MANNER PA YING CONSTRUCTION CONTRIBUTION IS ALSO A PRE-REQUISITE FOR BECOMING T HE MEMBER OF WRPL. UNLESS ANY PERSON DESIROUS OF OBTAINING USING AND OCCUPYING T HE PROPERTY PURCHASES SHARES AND MAKES CONTRIBUTION TOWARDS CONSTRUCTION HE CAN NOT BECOME THE MEMBER OF THE COMPANY. BOTH THE PAYMENTS ARE DIRECTED TOWARDS ACQ UIRING ONE COMPOSITE RIGHT. AS SUCH IT IS NOT POSSIBLE TO VIEW THESE TWO PAYMEN TS SEPARATELY AND CONSIDER THE CONSTRUCTION CONTRIBUTION AS PART OF BLOCK OF ASSET LEAVING ASIDE THE CONSIDERATION FOR SHARES. WE THEREFORE HOLD THAT BY MAKING TOTA L PAYMENT OF RS.4.44 CRORES THE ASSESSEE BECAME ENTITLED TO OBTAIN USE AND OCCUPY T HE REQUISITE PREMISES AND HENCE BECAME OWNER OF THE PREMISES FOR THE PURPOSE OF S ECTION 32(1). WE THEREFORE SET ASIDE THE IMPUGNED ORDER ON THIS ISSUE TO THE EXTEN T OF NOT GRANTING DEPRECIATION ON RS.2.76 CRORES. THE GROUND RAISED BY THE ASSESSEE I S ACCEPTED INASMUCH AS THE ASSESSEE IS ENTITLED TO DEPRECIATION ON RS.4.44 CRO RES AND RESULTANTLY THE GROUND RAISED BY THE REVENUE IS DISMISSED. 24. LAST GROUND TAKEN BY THE ASSESSEE IN ITS APPEAL AGAINST THE CHARGING OF INTEREST U/S.234B AND 234C IS CONSEQUENTIAL AND DIS POSED OFF ACCORDINGLY. 25. IN THE RESULT ASSESSEES APPEAL IS PARTLY ALLO WED AND REVENUES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 22 ND DAY OF SEPTEMBER 2010. SD/- SD/- ( R.S.PADVEKAR ) ( R.S.SYAL ) JUDICIAL MEMBER ACC OUNTANT MEMBER MUMBAI : 22 ND SEPTEMBER 2010. DEVDAS* ITA NOS.3175 & 3932/MUM/2004 SRI ADHIKARI BROTHERS TELEVISION. 23 COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) XI MUMBAI. 5. THE DR/ITAT MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI.