Indian Renewable Energy Development Agency Ltd.,, v. JCIT, Spl. Range-26,,

ITA 3742/DEL/2001 | 1998-1999
Pronouncement Date: 21-11-2014 | Result: Allowed

Appeal Details

RSA Number 374220114 RSA 2001
Bench Delhi
Appeal Number ITA 3742/DEL/2001
Duration Of Justice 13 year(s) 2 month(s) 8 day(s)
Appellant Indian Renewable Energy Development Agency Ltd.,,
Respondent JCIT, Spl. Range-26,,
Appeal Type Income Tax Appeal
Pronouncement Date 21-11-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 21-11-2014
Date Of Final Hearing 20-11-2014
Next Hearing Date 20-11-2014
Assessment Year 1998-1999
Appeal Filed On 12-09-2001
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : C : NEW DELHI BEFORE SHRI R.S. SYAL AM AND SHRI C.M. GARG JM ITA NO. 3 742/DEL/2001 INDIAN RENEWABLE ENERGY DEVELOPMENT AGENCY LTD. NEW DELHI VS. JCIT SR-26 NEW DELHI AY :1998 - 99 ITA NO.4167/DEL/2002 ITA NO.3556/DEL/2003 ITA NO.2630/DEL/2005 ITA NO.988/DEL/2008 ITA NO.987/DEL/2008 INDIAN RENEWABLE ENERGY DEVELOPMENT AGENCY LTD. NEW DELHI. VS. DCIT CIRCLE 11(1) NEW DELHI AYS : 1999-2000 2000-01 2001- 02 2004-05 & 2003-04 ITA NO.780/DEL/2006 INDIAN RENEWABLE ENERGY DEVELOPMENT AGENCY LTD. NEW DELHI. VS. ADDL. CIT RANGE II NEW DELHI AY :2002 - 03 ITA NO.4685/DEL/2012 ITA NO.4724/DEL/2010 INDIAN RENEWABLE ENERGY DEVELOPMENT AGENCY LTD. NEW DELHI. VS. ACIT LTU NEW DELHI AYS: 2008-09 & 2006-07 ITA NO.689/DEL/2006 ITA NO.551/DEL/2008 A CIT CIRCLE 11(1) NEW DELHI VS. INDIAN RENEWABLE ENERGY DEVELOPMENT AGENCY LTD. NEW DELHI. AY S : 2002 - 03 & 2003-04 ITA NO.552/DEL/2008 DCIT CIRCLE 11(1) NEW DELHI V S. INDIAN RENEWABLE ENERGY DEVELOPMENT AGENCY LTD. NEW DELHI. AY : 2004-05 ITA NO.4672/DEL/2012 ITA NO.4671/DEL/2012 ITA NO.1333/DEL/2011 ITA NO.4747/DEL/2010 ITA NO.465/DEL/2011 ACIT LTU NEW DELHI VS. INDIAN RENEWABLE ENERGY DEVELOPMENT AGENCY LTD. NEW DELHI. AYS : 2009 - 10 2008-09 2007- 08 2006-07 & 2005-06 (APPELLANTS) (RESPONDENTS) ASSESSEE BY : SHRI S. KRISHNAN ADVOCATE & SHRI V. RAJA KUMAR ADVOCATE DEPARTMENT BY : S HRI R.S. GILL CIT DR ITA NOS. 3742/DEL/2001 4167/DEL/2002 3556/DEL/2003 2630/DEL/2005 689&780/DEL/2006 4747&4724/DEL/2010 987 988 551&552/DEL/2008 4671 4672&4685/DEL/2012 1333&465/DEL/2011 2 ORDER PER BENCH: THIS BATCH OF 17 APPEALS COMPRISES 9 APPEALS BY TH E ASSESSEE AND 8 APPEALS BY THE REVENUE IN RELATION T O THE ASSESSMENT YEARS COVERED IN 1998-99 TO 2009-10. SIN CE SOME OF THE ISSUES RAISED IN THESE APPEALS ARE COMMON WE A RE THEREFORE PROCEEDING TO DISPOSE THEM OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. AYS 1998-99 TO 2002-03 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS A PUBLIC FINANCIAL INSTITUTION SET UP WITH A VIEW OF PROPER DEVELOPMENT OF RENEWABLE ENERGY SOURCES BY EXTENDIN G FINANCIAL SUPPORT TO MANUFACTURERS AND USERS TO ACT AS A FIN ANCIAL INTERMEDIARY AND ASSISTING IN COMMERCIALIZATION OF THE USER OF RENEWABLE ENERGY SOURCES. THE ASSESSEE HAS RECEIVE D FINANCIAL SUPPORT FROM GOVERNMENT OF INDIA WORLD BANK GLOBA L ENVIRONMENT FACILITY DANISH INTERNATIONAL AGENCY SWISS DEVELOPMENT CORPORATION AND ADB. THE ASSESSEE RECE IVED ITA NOS. 3742/DEL/2001 4167/DEL/2002 3556/DEL/2003 2630/DEL/2005 689&780/DEL/2006 4747&4724/DEL/2010 987 988 551&552/DEL/2008 4671 4672&4685/DEL/2012 1333&465/DEL/2011 3 CERTAIN AMOUNT OF INCOME WHICH WAS CLAIMED AS EXEMP T U/S 10(23G) OF THE INCOME-TAX ACT 1961 (HEREINAFTER CA LLED THE ACT). THE AO SEGREGATED THE ASSESSEES INCOMES INTO TWO P ARTS VIZ. FROM CORE ACTIVITY AND NON-CORE ACTIVITY. AS REGAR DS THE INCOME FROM CORE ACTIVITY THE AO ALLOWED EXEMPTION U/S 10 (23G). AS REGARDS THE INCOME FROM OTHER ACTIVITY CONSISTING O F INTEREST ON DEPOSIT INTEREST ON STAFF LOAN INTEREST ON GOVERN MENT SECURITIES SERVICE CHARGES FOR HANDLING UNDP PROGRAMME MISCEL LANEOUS INCOME PROFIT ON SALE OF FIXED ASSETS DIFFERENCE IN EXCHANGE COMMITMENT FEE APPLICATION FEE MNES SERVICE CHARG ES THE AO TREATED IT AS INCOME FROM OTHER SOURCES AND HENC E DID NOT ALLOW THE BENEFIT OF EXEMPTION U/S 10(23G). WHEN T HE MATTER FINALLY CAME UP BEFORE THE TRIBUNAL IT WAS HELD TH AT SUCH ITEMS OF INCOME WERE IN THE NATURE OF BUSINESS INCOME AND HENCE COULD NOT BE CONSIDERED AS INCOME FROM OTHER SOURCES. CONSEQUENTLY THE BENEFIT OF EXEMPTION U/S 10(23G) WAS ALLOWED BY THE TRIBUNAL. THE REVENUE CHALLENGED THE ORDER OF THE TRIBUNAL BE FORE THE HONBLE HIGH COURT FOR THESE ASSESSMENT YEARS. THE HONBLE JURISDICTIONAL HIGH COURT VIDE ITS JUDGMENT DATED 2 1.10.2011 ITA NOS. 3742/DEL/2001 4167/DEL/2002 3556/DEL/2003 2630/DEL/2005 689&780/DEL/2006 4747&4724/DEL/2010 987 988 551&552/DEL/2008 4671 4672&4685/DEL/2012 1333&465/DEL/2011 4 OBSERVED THAT THE TRIBUNAL DID NOT DISCUSS THE FACT UAL MATRIX PERTAINING TO EACH ITEM OF THE INCOME AS DISCUSSED ABOVE WITH REFERENCE TO ITS SOURCE THE PURPOSE AND OBJECT IN MAKING THE INVESTMENTS FROM WHICH SUCH INCOME RESULTED. CONSE QUENTLY THE ORDER OF THE TRIBUNAL WAS SET ASIDE WITH THE DI RECTION TO DECIDE THE NATURE OF INCOME AFRESH. AS REGARDS THE OTHER ISSUE OF ALLOWING EXEMPTION BY THE TRIBUNAL U/S 10(23G) IN R ESPECT OF THE ABOVE ITEMS OF INCOME THE HONBLE HIGH COURT RESTO RED THIS MATTER ALSO TO THE FILE OF THE TRIBUNAL. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE FIRST QUESTION FO R OUR DETERMINATION IS TO FIND OUT THE EXACT NATURE OF IN TEREST ON DEPOSIT INTEREST ON STAFF LOAN INTEREST ON GOVERN MENT SECURITIES SERVICE CHARGES FOR HANDLING UNDP PROGR AMME MISCELLANEOUS INCOME PROFIT ON SALE OF FIXED ASSET S DIFFERENCE IN EXCHANGE COMMITMENT FEE APPLICATION FEE MNES SER VICE CHARGES. AS AGAINST THE ASSESSEES CLAIM OF SUCH ITEMS OF INCOME BEING IN THE NATURE OF BUSINESS INCOME TH E AO HELD ITA NOS. 3742/DEL/2001 4167/DEL/2002 3556/DEL/2003 2630/DEL/2005 689&780/DEL/2006 4747&4724/DEL/2010 987 988 551&552/DEL/2008 4671 4672&4685/DEL/2012 1333&465/DEL/2011 5 THESE TO BE FALLING UNDER THE HEAD INCOME FROM OTH ER SOURCES. IN ORDER TO DECIDE THE NATURE AND SOURCE OF INCOME TH E PURPOSE AND OBJECT IN MAKING THE SAID INVESTMENT AND THE MANNER IN WHICH SUCH INCOME HAD ARISEN THERE IS NEED TO GO THROUGH THE FACTUAL MATRIX IN RESPECT OF EACH OF THE ABOVE ITEMS OF INC OME. UNFORTUNATELY WE FIND FROM THE ASSESSMENT ORDER TH AT THERE IS NO DISCUSSION WORTH THE NAME IN RESPECT OF THESE ITEMS OF INCOME. THE AO SIMPLY PUT THE AMOUNT AGAINST THE RESPECTIVE SUB-HEADS SUCH AS INTEREST ON DEPOSIT INTEREST ON STAFF LOA N AND INTEREST ON GOVERNMENT SECURITIES ETC. WITHOUT DISCUSSING MU CH LESS CONSIDERING THE TRUE NATURE OF SUCH INCOME. THE P OSITION IS NO DIFFERENT IN SO FAR AS THE ORDER PASSED BY THE LD. CIT(A) IS CONCERNED. THE LD. AR HAS TRIED TO HIGHLIGHT THE N ATURE OF INCOME BUT WE CANNOT ACCEPT SUCH NOTE ON ITS FACE VALUE. T HE CORRECT NATURE OF THE ABOVE ITEMS OF INCOME AS TO WHETHER FALLING UNDER THE HEAD INCOME FROM OTHER SOURCES OR PROFIT AND GAINS OF BUSINESS OR PROFESSION CANNOT BE DETERMINED AT OU R END IN THE LIGHT OF THE NON-SPEAKING ORDER PASSED BY THE AUTHO RITIES BELOW ON THE EXACT NATURE OF SUCH INCOME. THE TRIBUNAL CAN ADJUDICATE ITA NOS. 3742/DEL/2001 4167/DEL/2002 3556/DEL/2003 2630/DEL/2005 689&780/DEL/2006 4747&4724/DEL/2010 987 988 551&552/DEL/2008 4671 4672&4685/DEL/2012 1333&465/DEL/2011 6 WHEN SOME FINDING IS RETURNED EITHER WAY BY THE A UTHORITIES BELOW IN RESPECT OF SUCH ITEMS OF INCOME. IN THE AB SENCE OF ANY SUCH FINDING WE ARE HANDICAPPED TO ADJUDICATE THEI R NATURE. IN OUR CONSIDERED OPINION THE ENDS OF JUSTICE WOULD M EET ADEQUATELY IF THE MATTER IS SENT BACK TO THE AO FOR ELABORATING CONSIDERING AND THEN DECIDING THE TRUE NATURE OF IN COME OF THE ABOVE DISCUSSED ITEMS IN THE LIGHT OF THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT BY MEANS OF A SPEAKING OR DER. 4. THE SECOND ISSUE REMITTED BY THE HONBLE HIGH COURT TO THE TRIBUNAL IS ABOUT THE GRANTING OR NON-GRANTING OF E XEMPTION U/S 10(23G) OF THE ACT IN RESPECT OF THE ABOVE REFERRED ITEMS OF INCOME. IN OUR CONSIDERED OPINION THE SECOND QUES TION IS CONSEQUENTIAL TO THE FIRST QUESTION. ONLY WHEN THE CORRECT NATURE OF INCOME IS DETERMINED AS TO WHETHER IT IS INCOME FROM OTHER SOURCES OR BUSINESS INCOME THAT THE POSITION RE GARDING THE ALLOWABILITY OR OTHERWISE OF EXEMPTION U/S 10(23G) CAN BE ASCERTAINED. WE THEREFORE DIRECT THE AO TO DECID E THE QUESTION OF EXEMPTION U/S 10(23G) IN RESPECT OF THE ABOVE IT EMS OF ITA NOS. 3742/DEL/2001 4167/DEL/2002 3556/DEL/2003 2630/DEL/2005 689&780/DEL/2006 4747&4724/DEL/2010 987 988 551&552/DEL/2008 4671 4672&4685/DEL/2012 1333&465/DEL/2011 7 INCOME AFTER FIRST ASCERTAINING THE CORRECT NATURE OF INCOME AS DISCUSSED ABOVE. 5. IN THE RESULT THESE APPEALS ARE ALLOWED FOR ST ATISTICAL PURPOSES TO THE ABOVE EXTENT. AY : 2003-04 6. THERE ARE TWO CROSS APPEALS ONE BY THE ASSESSE E AND THE OTHER BY THE REVENUE WHICH ARISE OUT OF THE ORDER PASSED BY THE CIT(A) ON 14.12.2007. THE ONLY EFFECTIVE GROUND IN THE REVENUES APPEAL IS AGAINST THE DIRECTION OF THE LD. CIT(A) T O THE AO FOR CALCULATING THE DISALLOWANCE OF EXPENSES RELATING T O EARNING OF EXEMPT INCOME U/S 10(23G) AMOUNTING TO `14 37 64 14 8/-. FIRST GROUND OF THE ASSESSEES APPEAL IS AGAINST THE DIRE CTION OF THE LD. CIT(A) IN TREATING SUCH ITEMS OF INCOME AS FALLING UNDER THE HEAD INCOME FROM OTHER SOURCES AS AGAINST THE BUSINES S INCOME CLAIMED BY THE ASSESSEE. THE OTHER ISSUE IS CONSEQ UENTIAL ABOUT THE GRANT OF EXEMPTION U/S 10(23G) ON THE ABOVE ITE MS OF INCOME. ITA NOS. 3742/DEL/2001 4167/DEL/2002 3556/DEL/2003 2630/DEL/2005 689&780/DEL/2006 4747&4724/DEL/2010 987 988 551&552/DEL/2008 4671 4672&4685/DEL/2012 1333&465/DEL/2011 8 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD WE FIND THAT MOST OF T HE ITEMS OF INCOME WHICH HAVE BEEN TREATED BY THE AO AS FALLING UNDER THE HEAD INCOME FROM OTHER SOURCES FOR THE YEAR IN QU ESTION ARE SIMILAR TO THOSE FOR THE EARLIER YEARS WHICH HAVE B EEN DISCUSSED ABOVE. THERE ARE SOME OTHER NEW ITEMS ALSO WHICH AGAIN HAVE NOT BEEN DISCUSSED BY THE AO. FOLLOWING THE VIEW TA KEN HEREINABOVE WE SET ASIDE THE IMPUGNED ORDER AND RE MIT THE MATTER TO THE FILE OF THE AO FOR DECIDING THE NATUR E OF INCOME AFRESH IN CONFORMITY WITH OUR DECISION RENDERED IN RESPECT OF APPEALS FROM 1998-99 TO 2002-03. 8. ONLY IF THE ABOVE ITEMS OF INCOME ARE FOUND TO B E IN THE NATURE OF BUSINESS INCOME THAT THE QUESTION OF A LLOWING EXEMPTION U/S 10(23G) CAN ARISE. THIS ISSUE CAN BE DECIDED BY THE AO AFTER RENDERING DECISION ON THE FIRST QUEST ION ABOUT THE DETERMINATION OF THE NATURE OF INCOME. THE LAST IS SUE IN THIS BATCH OF APPEALS WHICH FORMS THE CONTENT OF THE RE VENUES APPEAL IS ABOUT THE CALCULATION OF DISALLOWANCE OF EXPENSES ITA NOS. 3742/DEL/2001 4167/DEL/2002 3556/DEL/2003 2630/DEL/2005 689&780/DEL/2006 4747&4724/DEL/2010 987 988 551&552/DEL/2008 4671 4672&4685/DEL/2012 1333&465/DEL/2011 9 RELATING TO THE EARNING OF EXEMPT INCOME U/S 10(23G ). THIS ISSUE IS ALSO CONSEQUENTIAL TO THE GRANTING OF EXEMPTION U/S 10(23G). ONLY IF THE EXEMPTION IS ALLOWED THAT THE QUESTION OF FINDING OUT THE DISALLOWABLE EXPENSES INCURRED IN RELATION TO T HE EARNING OF SUCH INCOME CAN BE TAKEN UP FOR CONSIDERATION. WE THEREFORE DIRECT THE AO TO DECIDE THIS ISSUE AFTER RENDERING DECISION ON THE QUESTION OF EXEMPTION U/S 10(23G) IN RESPECT OF THE ABOVE ITEMS OF INCOME. 9. IN THE RESULT BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES TO THE ABOVE EXTENT. AY: 2004-05 10. THERE ARE TWO CROSS APPEALS ONE BY THE ASSESS EE AND THE OTHER BY THE REVENUE WHICH ARISE OUT OF THE ORDER PASSED BY THE CIT(A) ON 14.12.2007. FIRST GROUND RAISED BY THE R EVENUE IS AGAINST THE DIRECTION GIVEN TO THE AO FOR CALCULATI NG DISALLOWANCE OF EXPENSES RELATING TO EARNING OF EXEMPT INCOME. SECOND GROUND OF THE REVENUES APPEAL IS AGAINST THE DELET ION OF DISALLOWANCE OF DEDUCTION U/S 36(1)(VIII) AMOUNTING TO ITA NOS. 3742/DEL/2001 4167/DEL/2002 3556/DEL/2003 2630/DEL/2005 689&780/DEL/2006 4747&4724/DEL/2010 987 988 551&552/DEL/2008 4671 4672&4685/DEL/2012 1333&465/DEL/2011 10 `19 13 03 000/-. THE ASSESSEE IS AGGRIEVED AGAINST THE TREATMENT OF DIFFERENT ITEMS OF INCOME AS DISCUSSED ABOVE BEI NG CONSIDERED AS INCOME FROM OTHER SOURCES AS AGAINST ITS CLAIM OF PROFIT AND GAINS OF BUSINESS OR PROFESSION. THE NEST ISSUE IS AGAINST THE GRANTING OF EXEMPTION U/S 10(23G) AND THE LAST ISSU E IS ABOUT THE COMPUTATION OF DEDUCTION U/S 36(1)(VIIA)(C). THE F IRST GROUND ABOUT THE FILING OF REVISED RETURN NOT BEARING ANY ACKNOWLEDGEMENT OF DEPARTMENT WAS NOT PRESSED BY T HE LD. AR. 11. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PER USING THE RELEVANT MATERIAL ON RECORD WE FIND THAT THE AUTHO RITIES BELOW HAVE FOLLOWED THE VIEW TAKEN BY THEM ON THIS ISSUE IN EARLIER YEARS WITHOUT ANY ELABORATE DISCUSSION ABOUT THE NA TURE OF ITEMS OF INCOME CONSIDERED AS INCOME FROM OTHER SOURCES AS AGAINST THE ASSESSEES CLAIM OF BUSINESS INCOME. FOLLOWI NG THE VIEW TAKEN FOR THE ABOVE EARLIER YEARS WE SET ASIDE THE IMPUGNED ORDER AND REMIT THE MATTER TO THE FILE OF AO FOR TA KING DECISION AS REGARDS EACH OF THE ABOVE ITEMS OF INCOME FALLING U NDER THE HEAD INCOME FROM OTHER SOURCES OR PROFITS AND GAINS O F BUSINESS OR ITA NOS. 3742/DEL/2001 4167/DEL/2002 3556/DEL/2003 2630/DEL/2005 689&780/DEL/2006 4747&4724/DEL/2010 987 988 551&552/DEL/2008 4671 4672&4685/DEL/2012 1333&465/DEL/2011 11 PROFESSION. IT IS ONLY THEREAFTER THAT THE QUESTI ON OF EXEMPTION U/S 10(23G) CAN BE DECIDED AND THE QUESTION OF DISA LLOWANCE OF EXPENSES INCURRED IN RELATION TO THE EXEMPT INCOME. THE DECISION ABOUT THE DEDUCTION U/S 36(1)(VIII) AND 36(1)(VIIA) (C) IS AGAIN DEPENDENT ON THE NATURE OF THE ITEMS OF INCOME AS D ISCUSSED ABOVE. THIS MATTER IS THEREFORE SENT BACK TO THE AO FOR TAKING A DECISION AS PER LAW AFTER ALLOWING A REASONABLE OP PORTUNITY OF BEING HEARD TO THE ASSESSEE. 12. IN THE RESULT BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES TO THE ABOVE EXTENT. AY: 2005-06 13. THERE IS THE ONLY APPEAL FILED BY THE REVENUE A RISING OUT OF THE ORDER PASSED BY THE CIT(A) ON 12.10.2010. GROU ND NO.1 IS AGAINST THE TREATMENT OF VARIOUS ITEMS OF INCOME AS INCOME FROM OTHER SOURCES AS AGAINST THE BUSINESS INCOME DEC LARED BY THE ASSESSEE. GROUND NO.2 IS ABOUT THE ALLOWING OF DED UCTION U/S 10(23G) IN RESPECT OF THE ABOVE INCOME AND GROUND N O.3 IS ABOUT THE ALLOWING OF DEDUCTION U/S 36(1)(VIII). THESE I SSUES ARE SIMILAR ITA NOS. 3742/DEL/2001 4167/DEL/2002 3556/DEL/2003 2630/DEL/2005 689&780/DEL/2006 4747&4724/DEL/2010 987 988 551&552/DEL/2008 4671 4672&4685/DEL/2012 1333&465/DEL/2011 12 TO THOSE DISCUSSED IN THE APPEALS FOR THE EARLIER Y EARS. HERE AGAIN WE FIND THAT THE AUTHORITIES BELOW HAVE FOLL OWED THEIR RESPECTIVE EARLIER ORDERS WITHOUT MAKING ANY ELABOR ATE DISCUSSION ABOUT THE TRUE NATURE AND PURPORT OF THE ITEMS OF I NCOME. FOLLOWING THE VIEW TAKEN HEREINABOVE WE SET ASIDE THE IMPUGNED ORDER AND REMIT THE MATTER TO THE FILE OF AO FOR TA KING A FRESH DECISION IN THIS REGARD AS PER LAW AFTER ALLOWING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 14. THE ONLY OTHER GROUND IS AGAINST THE DIRECTION GIVEN BY THE LD. CIT(A) FOR ALLOWING DEPRECIATION AMOUNTING TO ` 11 29 023/-. BRIEFLY STATED THE FACTS APROPOS THIS GROUND ARE T HAT THE ASSESSEE CLAIMED DEPRECIATION OF `10 04 990/- AND `1 24 033 /- ON OFFICE BUILDING AND RESIDENTIAL BUILDING @ 10% AND 5% RESP ECTIVELY. AS PER NOTE NO.5 APPENDED WITH THE RETURN OF INCOME C ONVEYANCE DEEDS IN RESPECT OF THESE LEASEHOLD BUILDINGS WERE YET TO BE EXECUTED IN FAVOUR OF THE COMPANY. THE ASSESSEE WA S CALLED UPON TO EXPLAIN AS TO HOW THE DEPRECIATION COULD BE ALLOWED ON THE COST OF BUILDING WITHOUT ANY CONVEYANCE DEED. THE AO ALSO ITA NOS. 3742/DEL/2001 4167/DEL/2002 3556/DEL/2003 2630/DEL/2005 689&780/DEL/2006 4747&4724/DEL/2010 987 988 551&552/DEL/2008 4671 4672&4685/DEL/2012 1333&465/DEL/2011 13 OBSERVED THAT THE COST OF LAND WAS ALSO EMBEDDED IN THE TOTAL COST ON WHICH DEPRECIATION WAS CLAIMED. IN THE ABS ENCE OF ANY REGISTERED SALE DEEDS REGISTERING THESE PROPERTIES IN THE NAME OF THE ASSESSEE THE AO DISALLOWED DEPRECIATION. THE LD. CIT(A) ACCEPTED THE ASSESSEES CONTENTION RELYING ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF MYSORE MINERALS LTD. VS. CIT (1999) 239 ITR 775 (SC) . THE REVENUE IS AGGRIEVED BEFORE US. 15. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS NOTICED THAT THE AO DENIE D DEPRECIATION ALLOWANCE FOR TWO REASONS VIZ. THE REGISTERED SAL E DEEDS WERE NOT EXECUTED IN ASSESSEES FAVOUR AND THAT THE COST OF LAND WAS ALSO SUBJECTED TO DEPRECIATION. IN SO FAR AS THE FIRST ISSUE IS CONCERNED WE FIND THAT THE JUDGMENT OF THE HONBLE SUPREME COURT IN MYSORE MINERALS (SUPRA) CLEARLY PROVIDES THAT ANYONE IN POSSESSION OF PROPERTY IN HIS OWN TITLE EXERCISING SUCH DOMINION OVER THE PROPERTY AS WOULD ENABLE OTHERS BEING EXCL UDED THEREFROM AND HAVING RIGHT TO USE AND OCCUPY THE PR OPERTY IN HIS OWN RIGHT WOULD BE THE OWNER OF BUILDING FOR THE P URPOSE OF S. ITA NOS. 3742/DEL/2001 4167/DEL/2002 3556/DEL/2003 2630/DEL/2005 689&780/DEL/2006 4747&4724/DEL/2010 987 988 551&552/DEL/2008 4671 4672&4685/DEL/2012 1333&465/DEL/2011 14 32(1) THOUGH A FORMAL DEED OF TITLE MAY NOT HAVE BE EN EXECUTED AND REGISTERED AND HE WOULD BE ENTITLED TO DEPRECI ATION THEREON. THE AOS OBJECTION ABOUT NON-EXECUTION OF REGISTERE D SALE DEED AS A REASON FOR DENIAL OF DEPRECIATION ALLOWANCE T HEREFORE DOES NOT STAND. IT HAS NOT BEEN DENIED BY THE AO THAT T HE ASSESSEE EXERCISED DOMINION OVER SUCH PROPERTY HAVING RIGHT TO OCCUPY AND USE THE SAME. IN SUCH CIRCUMSTANCES THE ASSESSEE SHALL BE TREATED AS THE OWNER OF SUCH PROPERTIES ENTITLED TO CLAIM OF DEPRECIATION. IN SO FAR AS THE SECOND OBJECTION OF THE AO ABOUT THE CLAIMING OF DEPRECIATION ON THE COST OF LAND IS CON CERNED WE AGREE IN PRINCIPLE THAT THERE CAN BE NO QUESTION O F ALLOWING DEPRECIATION ON THE COST OF LAND. THE LD. AR CONTEN DED THAT THE VALUE OF THE ASSET UNDER THIS BLOCK DOES NOT INCLUD E THE COST OF LAND. IN OUR CONSIDERED OPINION IT WOULD BE IN THE FITNESS OF THINGS IF THE IMPUGNED ORDER ON THIS ISSUE IS SET ASIDE AND THE MATTER IS SENT BACK TO THE AO FOR IDENTIFYING THE C OST OF LAND IF ANY INCLUDED IN THE AMOUNT ON THE WHICH DEPRECIATI ON HAS BEEN CLAIMED. WE ORDER ACCORDINGLY AND DIRECT THE AO TO REFUSE DEPRECIATION ON THE COST OF LAND IF ANY INCLUDED IN SUCH GROSS ITA NOS. 3742/DEL/2001 4167/DEL/2002 3556/DEL/2003 2630/DEL/2005 689&780/DEL/2006 4747&4724/DEL/2010 987 988 551&552/DEL/2008 4671 4672&4685/DEL/2012 1333&465/DEL/2011 15 VALUE ON WHICH DEPRECIATION WAS CLAIMED BY THE ASSE SSEE. NEEDLESS TO SAY THE ASSESSEE WILL BE ALLOWED A REA SONABLE OPPORTUNITY OF HEARING IN THIS REGARD. 16. IN THE RESULT THE APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES TO THE ABOVE EXTENT. AY : 2006-07 17. THERE ARE TWO CROSS APPEALS ONE BY THE ASSESS EE AND THE OTHER BY THE REVENUE WHICH ARISE OUT OF THE ORDER PASSED BY THE CIT(A) ON 31.8.2010. THE ONLY ISSUE RAISED BY THE ASSESSEE IN ITS APPEAL IS AGAINST THE DECREASE IN DEDUCTION U/S 36( 1)(VIIA)(C). THE REVENUE IS AGGRIEVED AGAINST THE TREATMENT OF VARIO US ITEMS OF INCOME AS BUSINESS INCOME AS AGAINST THE AOS OP INION OF INCOME FROM OTHER SOURCES. THE SECOND GROUND IS ABOUT THE ALLOWING OF EXEMPTION U/S 10(23G) AND THE THIRD GRO UND IS ABOUT ALLOWING OF DEDUCTION U/S 36(1)(VIII) OF THE ACT. 18. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE RELEVANT RECORD WE FIND THAT THERE IS NO DISCUSSIO N IN THE ITA NOS. 3742/DEL/2001 4167/DEL/2002 3556/DEL/2003 2630/DEL/2005 689&780/DEL/2006 4747&4724/DEL/2010 987 988 551&552/DEL/2008 4671 4672&4685/DEL/2012 1333&465/DEL/2011 16 ASSESSMENT ORDER ABOUT THE NATURE OF EACH ITEM OF I NCOME. THE AUTHORITIES BELOW HAVE APPLIED THEIR RESPECTIVE EAR LIER VIEWS WITHOUT DISCUSSING IN DETAIL THE NATURE OF INCOME. FOLLOWING THE VIEW TAKEN HEREINABOVE WE SET ASIDE THE IMPUGNED O RDER AND REMIT THE MATTER TO THE AO FOR FIRSTLY DETERMINING THE CORRECT NATURE OF THESE ITEMS OF INCOME AND THEREAFTER DE CIDING THE QUESTION OF ALLOWING EXEMPTION U/S 10(23G) AND DEDU CTION U/S 36(1)(VIII) AND 36(1)(VIIA)(C). 19. THE ONLY OTHER GROUND IN THIS APPEAL IS AGAINST THE DIRECTION OF LD. CIT(A) IN ALLOWING DEPRECIATION OF `10 22 32 2/- WHICH WAS DISALLOWED BY THE AO FOR THE REASONS AS GIVEN FOR T HE EARLIER YEAR. 20. HERE AGAIN WE FIND THAT THE FACTS AND CIRCU MSTANCES OF THIS GROUND ARE MUTATIS MUTANDIS SIMILAR TO THOSE OF THE PRECEDING YEAR. FOLLOWING THE VIEW TAKEN HEREINABOVE WE DIR ECT THE AO TO DECIDE THIS ISSUE IN CONFORMITY WITH OUR DECISION G IVEN ON THIS ISSUE FOR THE IMMEDIATELY PRECEDING YEAR. 21. IN THE RESULT BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES TO THE ABOVE EXTENT. ITA NOS. 3742/DEL/2001 4167/DEL/2002 3556/DEL/2003 2630/DEL/2005 689&780/DEL/2006 4747&4724/DEL/2010 987 988 551&552/DEL/2008 4671 4672&4685/DEL/2012 1333&465/DEL/2011 17 AY: 2007-08 22. THIS APPEAL OF THE REVENUE ARISES OUT OF THE OR DER PASSED BY THE LD. CIT(A) ON 7.1.2011. HERE AGAIN WE FIND TH AT THE GROUNDS ARE ABOUT THE TREATMENT OF VARIOUS ITEMS OF INCOME AS BUSINESS INCOME AS AGAINST THE INCOME FROM OTHER SOURCES AS HELD BY THE AO. THE SECOND GROUND IS ABOUT GRANTING OF DEDUCTI ON U/S 36(1)(VIII) AND THE LAST GROUND IS ABOUT THE ALLOWI NG OF DEPRECIATION. 23. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PER USING THE RELEVANT RECORD WE FIND THAT THESE THREE GROUNDS A RE SIMILAR TO THOSE TAKEN AND DISCUSSED SUPRA FOR THE EARLIER YEA RS. FOLLOWING THE SAME VIEW WE SET ASIDE THE IMPUGNED ORDER AND REMIT THE MATTER TO THE FILE OF AO FOR TAKING A DECISION IN C ONFORMITY WITH OUR VIEW RENDERED ABOVE AFTER ALLOWING A REASONABL E OPPORTUNITY OF HEARING TO THE ASSESSEE. 24. IN THE RESULT THE APPEAL IS ALLOWED FOR STA TISTICAL PURPOSES TO THIS EXTENT. ITA NOS. 3742/DEL/2001 4167/DEL/2002 3556/DEL/2003 2630/DEL/2005 689&780/DEL/2006 4747&4724/DEL/2010 987 988 551&552/DEL/2008 4671 4672&4685/DEL/2012 1333&465/DEL/2011 18 AY: 2008-09 25. THERE ARE TWO CROSS APPEALS FILED ONE BY THE A SSESSEE AND THE OTHER BY THE REVENUE WHICH ARISE OUT OF THE OR DER PASSED BY THE LD. CIT(A) ON 02.07.2012. THE ONLY GROUND TAKE N BY THE ASSESSEE IS ABOUT THE DECREASE IN DEDUCTION U/S 36( 1)(VIIA)(C). THE REVENUE IS AGGRIEVED AGAINST THE TREATMENT OF VARIO US ITEMS OF INCOME AS BUSINESS INCOME INSTEAD OF INCOME FROM OTHER SOURCES AS HELD BY THE AO; ENTITLEMENT OF DEDUCTIO N U/S 36(1)(VIII); AND GRANTING OF DEPRECIATION ON OFFICE PREMISES AS WELL AS RESIDENTIAL FLAT. 26. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND P ERUSING THE RELEVANT RECORD WE FIND THAT THE ISSUES RAISED IN THESE APPEALS ARE SIMILAR TO THOSE TAKEN UP AND DECIDED FOR THE E ARLIER YEARS. FOLLOWING THE SAME VIEW WE SET ASIDE THE IMPUGNED ORDER AND SEND THE MATTER BACK TO THE FILE OF AO FOR DECIDING THEM IN CONFORMITY WITH OUR DECISION GIVEN IN THE EARLIER P ARAS AFTER ALLOWING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. ITA NOS. 3742/DEL/2001 4167/DEL/2002 3556/DEL/2003 2630/DEL/2005 689&780/DEL/2006 4747&4724/DEL/2010 987 988 551&552/DEL/2008 4671 4672&4685/DEL/2012 1333&465/DEL/2011 19 27. IN THE RESULT THE APPEALS ARE ALLOWED FOR S TATISTICAL PURPOSES TO EXTENT INDICATED ABOVE. AY: 2009-10 28. THE REVENUE HAS PREFERRED THIS APPEAL AGAINS T THE ORDER PASSED BY THE LD. CIT(A) ON 02.07.2012. 29. HERE AGAIN WE FIND THAT THE FIRST GROUND IS ABOUT THE TREATMENT OF VARIOUS ITEMS OF INCOME ACCEPTED AS B USINESS INCOME AS AGAINST THE INCOME FROM OTHER SOURCES AS HELD BY THE AO; THE SECOND GROUND IS ABOUT THE DEDUCTION U/S 36 (1)(VIII); AND THE LAST GROUND IS ABOUT ENTITLEMENT OF DEPRECIATIO N OF OFFICE PREMISES AS WELL AS THE RESIDENTIAL FLAT. 30. BOTH THE SIDES ARE IN AGREEMENT THAT THE FACTS AND CIRCUMSTANCES OF THESE GROUNDS ARE SIMILAR TO THOSE DISCUSSED ABOVE FOR EARLIER YEARS. FOLLOWING THE VIEW TAKEN H EREINABOVE WE SET ASIDE THE IMPUGNED ORDER AND REMIT THE MATTER T O THE FILE OF THE AO FOR DECIDING THESE ISSUES AFRESH IN CONFORMI TY WITH OUR ITA NOS. 3742/DEL/2001 4167/DEL/2002 3556/DEL/2003 2630/DEL/2005 689&780/DEL/2006 4747&4724/DEL/2010 987 988 551&552/DEL/2008 4671 4672&4685/DEL/2012 1333&465/DEL/2011 20 DIRECTIONS GIVEN ABOVE AFTER ALLOWING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 31. IN THE RESULT THE APPEAL IS ALLOWED FOR STATIS TICAL PURPOSES AS INDICATED ABOVE. THE ORDER PRONOUNCED IN THE OPEN COURT ON 21.11.2 014. SD/- SD/- [ C.M. GARG ] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED 21 ST NOVEMBER 2014. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT AR ITAT NEW DELHI.