DCIT, New Delhi v. M/s NTPC Salil Power Supply Co. Ltd., New Delhi

ITA 4669/DEL/2010 | 2003-2004
Pronouncement Date: 25-03-2011 | Result: Dismissed

Appeal Details

RSA Number 466920114 RSA 2010
Assessee PAN AABCN5467A
Bench Delhi
Appeal Number ITA 4669/DEL/2010
Duration Of Justice 4 month(s) 30 day(s)
Appellant DCIT, New Delhi
Respondent M/s NTPC Salil Power Supply Co. Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 25-03-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 25-03-2011
Date Of Final Hearing 14-03-2011
Next Hearing Date 14-03-2011
Assessment Year 2003-2004
Appeal Filed On 26-10-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI B.C. MEENA ACCOUNTANT MEMBER ITA NOS.4668 TO 4673/DEL./2010 (ASSESSMENT YEARS : 2002-03 TO 2007-08) DCIT CIRCLE 13 (1) VS. M/S. NTPC SAIL POWER SUP PLY CO. LTD. NEW DELHI. 4 TH FLOOR NBCC TOWER BHIKAJI CAMA PLACE NEW DELHI. (PAN : AABCN5467A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI M.P. RASTOGI ADVOCATE & SHRI P. N. SHASTRY CA REVENUE BY : SMT. SANGEETA GUPTA CIT DR ORDER PER BENCH : ALL THESE SIX APPEALS FILED BY THE REVENUE ARISE OU T OF THE ORDER OF CIT (APPEALS)-XVIII NEW DELHI DATED 19.07.2010. THE GROUNDS OF APPEAL IN ITA NOS.4668 TO 4672/DEL/2010 READ AS UNDER :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING THE DEPRECIAT ION ON THE POWER PLANTS AS PER THE COST OF ACQUISITION OF THE ASSETS LESS DEPRECIATION WHICH WAS ACTUALLY ALLOWED TILL THE AS SESSMENT YEAR 2001-02 IN TERMS OF THE PROVISIONS OF SECTION 32 R.W.S. 43 OF THE IT ACT 1961. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN IGNORING THE FACT THAT THE PROVISIONS OF SECTION 47(IV) R.W.S. 43 AND EXPLANATION 3 TO SE CTION 43( 1) ITA NOS.4668 TO 4673/DEL/2010 2 OF THE IT ACT 1961 AND THE COST OF THE POWER PLANT S ACQUIRED BY THE APPELLANT WERE TAKEN AT THE WDV IN THE BOOKS OF THE TRANSFEROR NAMELY STEEL AUTHORITY OF INDIA (SAIL) I NSTEAD OF THE COST AT WHICH THE ASSESSEE HAD ACQUIRED THE ABOVE A SSETS ON THE BASIS OF VALUATION BY MECON. 3. THE APPELLANT CRAVES TO BE ALLOWED TO ADD ANY FR ESH GROUNDS OF APPEAL AND/OR DELETE OR AMEND ANY OF THE GROUNDS OF APPEAL. THE GROUNDS OF APPEAL IN ITA NO.4673/DEL/2010 READ AS UNDER :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING THE DEPRECIAT ION ON THE POWER PLANTS AS PER THE COST OF ACQUISITION OF THE ASSETS LESS DEPRECIATION WHICH WAS ACTUALLY ALLOWED TILL THE AS SESSMENT YEAR 200102 IN TERMS OF THE PROVISIONS OF SECTION 32 R.W.S. 43 OF THE IT ACT 1961. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN IGNORING THE FACT THAT THE PROVISIONS OF SECTION 47(IV) R.W.S. 43 AND EXPLANATION 3 TO SE CTION 43(1) OF THE I.T. ACT 1961 AND THE COST OF THE POWER PLA NTS ACQUIRED BY THE APPELLANT WERE TAKEN AT THE WDV IN THE BOOKS OF THE TRANSFEROR NAMELY STEEL AUTHORITY OF INDIA (SAIL) I NSTEAD OF THE COST AT WHICH THE ASSESSEE HAD ACQUIRED THE ABOVE A SSETS ON THE BASIS OF VALUATION BY MECON. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION O F RS.3 31 58 000/- ONLY BY HOLDING THAT THE ADDITION OF INTEREST EARNED AT RS.3 31 58 000/- ON DEPOSITS AND ADVANCES MADE FOR THE NEW UNIT BEING ESTABLISHED INSTEAD OF BEING SET OFF/NETTED OFF AGAINST THE INTEREST ON BORROWED SUMS UTILIZED FOR THE NEW UNIT AND CAPITALIZED CAN NOT BE SUSTAINED RELYING ON TH E JUDGMENT IN THE CASE OF CIT VS KAMAL COOPERATIVE SUGAR MILLS LT D. [2000] 243 ITR. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN IGNORING THE FACT THAT THE ASSESSEE WAS EXPANDING ITS EXISTING BUSINESS AND INTEREST EX PENSE DURING CONSTRUCTION PERIOD WAS NOT AN ALLOWABLE REVENUE EX PENDITURE ITA NOS.4668 TO 4673/DEL/2010 3 AND THAT CASE RATIO OF TUTICORIN AKALI CHEMICALS FE RTILIZERS LTD. VS.CIT 227 ITR 172 (SC) WAS CLEARLY APPLICABLE. 5. THE APPELLANT CRAVES TO BE ALLOWED TO ADD ANY FR ESH GROUNDS OF APPEAL AND/OR DELETE OR AMEND ANY OF THE GROUNDS OF APPEAL. 2. THUS THE GROUNDS OF APPEAL ARE COMMON IN ITA NO S.4668 TO 4672/DEL/2010 AND THE GROUND NOS.1 & 2 ARE ALSO COM MON IN ITA NO.4673/DEL/2010. 3. IN THE GROUND NOS.1 & 2 IN ALL THE APPEALS THE ISSUE INVOLVED IS REGARDING THE DEPRECIATION ON THE POWER PLANTS AS P ER THE COST OF ACQUISITION OF THE ASSETS. 4. THE ASSESSEE COMPANY WAS INCORPORATED ON 8.2.199 9 WITH THE PAID UP CAPITAL OF RS.1000/- ONLY CONSISTING OF 100 SHARES OF RS.10/- EACH. OUT OF 100 SHARES 98 SHARES WERE SUBSCRIBED BY M/S. STEEL AUT HORITY OF INDIA LIMITED (HEREINAFTER REFERRED TO AS SAIL) AND 1 SHARE EACH BY SHRI S.C.K. PATNE AND SHRI RANJIT CHAKRABARTY BOTH EMPLOYEES OF SAIL. T HE SAIL OWNED AND OPERATED CAPTIVE POWER PLANTS AT DURGAPUR AND ROURK ELA WHICH WERE NECESSARY FOR THE CONTINUOUS OPERATION OF CRITICAL AREAS OF PLANT. AS PER THE DECISION OF GOVERNMENT OF INDIA THE PUBLIC SECTOR UNDERTAKINGS WERE TO REMAIN IN THEIR CORE ACTIVITIES ONLY. THE CORE ACT IVITY OF THE SAIL IS STEEL PRODUCTION AND CONSEQUENT TO THE DECISION OF GOVERN MENT OF INDIA POWER PLANTS WERE TO BE SHIFTED TO NTPC WHICH IS AGAIN A PUBLIC SECTOR UNDERTAKING ITA NOS.4668 TO 4673/DEL/2010 4 INDULGED IN THE CORE ACTIVITY OF POWER PRODUCTION. THE CAPTIVE POWER PLANTS WERE TRANSFERRED TO THE ASSESSEE WHICH BECOMES JOI NT VENTURE COMPANY OWNED EQUALLY BY SAIL AND NTPC. THIS TRANSFER WAS MADE ON THE BASIS OF VALUATION DONE BY MECON LIMITED. THE AGREEMENT WAS ENTERED INTO BETWEEN SAIL AND NTPC REGARDING THE OWNERSHIP MANA GEMENT AND POWER PURCHASE AGREEMENT ETC. WHICH WERE SUBSEQUENTLY APP ROVED BY THE BOARD OF DIRECTORS. CONSEQUENT UPON THE APPROVAL BY THE BOA RD OF DIRECTORS OF THE ASSESSEE COMPANY THE SHAREHOLDERS AGREEMENT WAS EX ECUTED ON 16.3.2001. THE TRANSFER OF SHARES FROM SAIL TO NTPC WAS COMPLE TED ON 22.3.2001 BY STOCK HOLDING CORPORATION OF INDIA LIMITED WHICH IS ALSO PUBLIC SECTOR UNDERTAKING. THE ASSESSEE COMPANY CLAIMED THE DEPR ECIATION IN THE ASSESSMENT YEAR 2001-02 OF THE VALUE OF THE POWER P LANTS AT WHICH THEY WERE ACQUIRED BY THE ASSESSEE. THE DEPRECIATION WAS DEN IED BY THE ASSESSING OFFICER ON THE BASIS THAT THIS COMPANY WAS A WHOLLY OWNED COMPANY OF SAIL AND THAT THE PROVISIONS OF SECTION 47(IV) OF THE IN COME-TAX ACT WERE ATTRACTED. THE FACT THAT THE SAIL ADMITTED THAT THE CAPITAL GA IN TAX ON THE SLUMP SALE IN TERMS OF SECTION 50B OF THE INCOME-TAX ACT OF THESE TWO CAPTIVE POWER PLANTS WAS IGNORED. THE ASSESSEE HAS CLAIMED THAT FIRSTLY IT WAS NOT 100% OWNED SUBSIDIARY OF SAIL AND SECONDLY THE CAPITAL GAIN TAX HAS BEEN ADMITTED BY THE TRANSFEROR. ITA NOS.4668 TO 4673/DEL/2010 5 5. AT THE TIME OF HEARING THE LEARNED DR AS WELL A S LEARNED AR SUBMITTED THAT THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF THE A SSESSEE BY THE DECISION OF ITAT BENCH E NEW DELHI IN ITA NO.03/DEL/2005 IN THE ASSESSMENT YEAR 2001-02 ORDER DATED 19.3.2010 WHERE THE ITAT HAS DE CIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. 6. AFTER HEARING BOTH THE SIDES WE FIND THAT GROUN D NOS.1 & 2 ARE COVERED BY THE DECISION OF ITAT DELHI BENCH E IN ITS ORD ER DATED 19.3.2010 IN ITA NO.03/DEL/2005 AND THE ITAT HAS DECIDED THE ISSUE A S UNDER :- 6. WE HAVE HEARD THE PARTIES AT LENGTH AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AS REGARDS THE FIRST CONTENTION WE CONCUR WITH THE VIEWS OF LD. CIT (A) THAT MERELY TW O SHARES ISSUED IN THE NAMES OF TWO EMPLOYEES OF SAIL CANNOT BE SAID THAT THE ASSESSEE WAS NOT A WHOLLY OWNED SUBSIDIARY OF SAIL. IT IS NOT THE CASE THAT THE EMPLOYEES BECAME THE SH ARE HOLDERS FROM THE PUBLIC ISSUE. MOREOVER IT IS NOT A CASE W HERE THE PRIVATIZATION OF PORTION OF SAIL IS BEING DONE BY S AIL BY INCORPORATING THE ASSESSEE COMPANY. SINCE NO SCHEM E FOR PRIVATIZATION HAS BEEN PLACED ON RECORD AND FROM TH E MATERIAL AVAILABLE ON RECORD THE TWO EMPLOYEES SHARE HOLDER S APPEAR TO BE NOMINEE SHARE HOLDERS OF SAIL. NOTHING HAS BEEN PLACED ON RECORD THAT THE SAID EMPLOYEES HAVE BEEN TAKEN AS P ARTNERS OF TWO PERSONS OF GOVERNMENT FOR COMMERCIAL PURPOSES. WE CONCUR WITH THE VIEWS OF LD. CIT (A) THAT NO COMPAN Y CAN EVER BE HELD AS WHOLLY OWNED SUBSIDIARY AS FOR REGISTRATION/INCORPORATION OF A PRIVATE LIMITED COM PANY MINIMUM TWO SHARE HOLDERS ARE REQUIRED AND IF THE C ONTENTION OF THE ASSESSEE IS ACCEPTED THEN THERE CAN NEVER B E A 100% HOLDING-SUBSIDIARY COMPANY CONCEPT. THEREFORE FOR ALL PURPOSES WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT (A) FOR CONFIRMING THE ACTION OF THE A.O. TREATING SAIL AS 100% HOLDING COMPANY SINCE THE DATE OF INCORPORATION AND ON 07.03.2001 WHEN THE ASSESSEE COMPANY TOOK OVER TWO CAPTIVE POWER PLANTS I.E. DURGAPUR STEEL PLANT AND ROURKELA STEEL PLANT. THE A.O. VIDE PAGE 7 TO 9 OF HIS ORDER HAS POINTED OUT CLAUSES ITA NOS.4668 TO 4673/DEL/2010 6 7 8 9 AND 10 OF ARTICLES OF ASSOCIATION AND OTHER FINDINGS THAT THE SHARES OF SH. S.C.K. PATNE AND MR. RANJIT CHAKR ABARTY ARE NON TRANSFERABLE AND NOTHING HAS BEEN BROUGHT ON RE CORD WHERE THE SHARES HELD BY THESE TWO PERSONS ARE IN THEIR I NDIVIDUAL CAPACITIES OR AS NOMINEE OF SAIL. IN THE CHAIRMAN S SPEECH FOR THE YEAR ENDING 31.03.2001 IT HAS BEEN MENTIONED A BOUT THE INCORPORATION OF 100% WHOLLY ON SUBSIDIARY OF SAIL. THEREFORE ON THIS CONTENTION OF THE ASSESSEE THE CASE OF THE ASSESSEE IS COVERED U/S 47(IV) OF THE ACT AND THERE FORE THE TRANSFER OF CAPTIVE POWER PLANT CANNOT BE TREATED A S TRANSFER TO THE ASSESSEE COMPANY. AS REGARDS THE ACTUAL COST O F THE TRANSFERRED CAPITAL ASSETS TO THE TRANSFEREE COMPAN Y I.E. THE ASSESSEE IT SHALL BE THE SAME AS WOULD HAVE BEEN I F THE TRANSFEROR HAD CONTINUED TO HOLD CAPITAL ASSETS FOR THE PURPOSE OF ITS BUSINESS. THEREFORE THE SECOND CONTENTION O F THE ASSESSEE WITH REGARD TO SLUMP SALE U/S 50B WILL NOT HELP THE ASSESSEE IN VIEW OF EXPLANATION 6 TO SECTION 43 AND SECTION 47( IV) OF THE ACT. 7. AS REGARDS THE THIRD CONTENTION OF THE ASSESSEE THAT IT BECAME A JOINT VENTURE COMPANY WITH EQUAL SHARES OF SAIL AND NTPC AND THEREFORE THE ASSESSEE COMPANY IS NOT WHOL LY OWNED SUBSIDIARY AS AT 31.03.2001. THE VIEWS OF THE LD. CIT (A) IN THIS REGARD ARE THAT A CHANGE IN THE CONSTITUTION O F THE COMPANY I.E. IN THE SHAREHOLDING BEFORE THE CLOSE OF THE RE LEVANT PERIOD WILL NOT MAKE THE APPLICATION OF THE ABOVE PROVISIO NS INEFFECTIVE AS THE RELEVANT DATE FOR CONSIDERATION IS THE DATE OF TRANSFER OF THE UNITS AND ON SUCH DATE THE ASSESSEE WAS A WHOLLY OWNED SUBSIDIARY. IT WAS ARGUED BEFORE THE LD. CIT (A) AS WELL AS BEFORE US THAT SECTION 5 OF INCOME-TAX ACT DEFIN ES THE SCOPE OF TOTAL INCOME AND IT IS SPECIFIED UNDER SUB CLAUS E THAT TAXABILITY IS ON ALL INCOMES WHICH ACCRUES OR ARISE S OR IS DEEMED TO BE ACCRUE OR ARISE IN INDIA DURING SUCH YEAR. I T HAS BEEN HELD IN CIT VS. BANGALORE TRANSPORT CO. LTD. 66 ITR 373 (SC) THAT PROFITABILITY OR LIABILITY FOR ANY PREVIOUS YEAR AC CRUE AT THE END OF YEAR AND NOT DURING THE YEAR. FURTHER IN THE CA SE OF E.E. SASSON & CO. LTD. VS. CIT IT HAS BEEN DECIDED THAT LIABILITY TO TAX DOES NOT ACCRUE ON DAY TO DAY BASIS. HENCE IN THE LIGHT OF ABOVE STATED CASES THE HOLDING OF STEEL AUTHORITY O F INDIA LTD. AS AT THE END OF THE PREVIOUS YEAR IS TO BE CONSIDE RED AND NOT THE POSITIONS DURING THE YEAR. HENCE EXPLANATION 6 OF SECTION 43(1) IS NOT APPLICABLE IN THIS PARTICULAR CASE AS AT THE END OF PREVIOUS ITA NOS.4668 TO 4673/DEL/2010 7 YEAR SAIL POWER SUPPLY COMPANY PVT. LTD. WAS JOINT VENTURE COMPANY OF NTPC AND STEEL AUTHORITY OF INDIA LTD. THERE ARE A NUMBER OF ENCLOSURES BY WAY OF LETTERS AND APPROV ALS BY VARIOUS GOVERNMENT OF INDIA MINISTRIES AND BODIES T O SHOW THAT THE COMPANY WAS ALWAYS CONVERTED AS A JOINT VENTURE BETWEEN SAIL AND NTPC EVEN BEFORE THE TRANSFER OF FIXED ASS ETS. THE LD. COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO THE DECISION OF ITAT MUMBAI BENCH IN THE CASE OF ESSAR OIL LTD. VS. DCIT REPORTED IN (2007) 13 SOT 691 ON THE IDENTICAL ISSU E. THE HEAD NOTES OF THE SAID DECISION FOR THE SAKE OF CLARITY ARE REPRODUCED AS UNDER :- (I) SECTION 49 READ WITH SECTIONS 47 47A AND 32 OF THE INCOME-TAX ACT 1961-CAPITAL GAINS-COST WITH REFERENCE TO CERTAIN MODES OF ACQUISITION-ASSESSMEN T YEAR 1993-94-WHETHER PROVISIONS OF SECTION 47 ARE WITHDR AWN ON OCCURRENCE OF EVENTS MENTIONED UNDER SECTION 47A AND TRANSACTION HAS TO BE TREATED AS A TRANSFER UND ER SECTION 2(47)(V)(VI) AS CASE MAY BE AND TRANSFERO R- COMPANY IS LIABILITY TO PAY CAPITAL GAINS TAX-HELD YES- WHETHER IN HANDS OF TRANSFEREE VALUATION/COST OF A SSET REGARDING WHICH EXEMPTION GRANTED UNDER SECTION 47( IV) HAS BEEN WITHDRAWN UNDER SECTION 47A SHALL BE COST FOR WHICH SUCH ASSET WAS ACQUIRED BY IT HELD YES ASSESSEE COMPANY WHICH WAS A WHOLLY OWNED SUBSIDIARY OF HOLDING COMPANY E HAD TAKEN OVER A DIVISION OF EG WITH EFFECT FROM 31.5.1992 AS A GO ING CONCERN ASSESSEE CLAIMED DEPRECIATION ON FIXED AS SETS AND FOR THAT PURPOSE HAD TAKEN WDV OF FIXED ASSETS AT RS.130.52 CRORE-ASSESSEE CEASED TO BE WHOLLY OWNED SUBSIDIARY OF TRANSFEROR-COMPANY EG ON 30.09.1994 BUT ASSESSING OFFICER REJECTED THIS FACT ON GROUND THAT SUBSEQUENT EVENTS WOULD NOT HAVE ANY MATERIAL CHANG E WITH RESPECT TO CHANGING OF COST OF ACQUISITION OF CAPITAL ASSETS ACQUIRED FROM HOLDING COMPANY-ASSESSING OFFI CER HELD THAT ASSESSEE SATISFIED ALL CONDITIONS LAID DO WN IN SECTION 47(IV) READ WITH EXPLANATION 6 TO SECTION 43(1) AND ACCORDINGLY TOOK WDV OF ASSETS IN BOOKS OF E G AT RS.203.89 CRORE AS COST OF ACQUISITION OF ASSETS BY ASSESSEE FOR COMPUTATION OF DEPRECIATION WHETHER SINCE ASSESSEE-COMPANY CEASED TO BE A SUBSIDIARY OF TRANS FEROR- COMPANY PROVISIONS OF SECTION 47(IV) WOULD NOT APP LY ITA NOS.4668 TO 4673/DEL/2010 8 AND THEREFORE TRANSACTION WAS TO BE TREATED AS T RANSFER- HELD YES-WHETHER COST FOR WHICH ASSESSEE HAD ACQUI RED ASSET SHOULD BE COST OF ACQUISITION FOR PURPOSE OF COMPUTATION OF DEPRECIATION AND THEREFORE ASSESSE E WAS ENTITLED TO DEPRECIATION ON COST OF ASSETS AS RS.13 0.52 CRORE-HELD YES. 8. THE ARGUMENTS ADVANCED BY THE LD. COUNSEL FOR TH E ASSESSEE BEFORE THE LD. CIT (A) AND BEFORE US INCLU DING THE CITATION OF DECISION IN THE CASE OF ESSAR OIL LTD. (SUPRA) READING THE PROVISIONS OF SECTION 47 47A SECTION 2(47)(V) OR (VI) AND SECTION 32 WE ARE OF THE VIEW THAT TRANSACTION IN THE PRESENT CASE HAS TO BE TREATED AS TRANSFER AND THE TRANSFER OR COMPANY IS LIABILITY TO PAY CAPITAL GAINS TAX. IN THE HANDS O F THE TRANSFEREE THE COST OF ASSET REGARDING EXEMPTION U/S 47(IV) CA NNOT BE GIVEN AND THE SAME HAS TO BE TREATED AS WITHDRAWN U/S 47A OF THE ACT AND THE COST OF ASSETS IN THE HANDS OF THE TRANSFER EE SHALL BE COST FOR WHICH THE ASSESSEE COMPANY ACQUIRED. SINCE THE ASSESSEE COMPANY SEIZED TO BE A SUBSIDIARY OF TRANSFEROR COM PANY PROVISIONS OF SECTION 47(IV) WILL NOT APPLY AND THE REFORE THE TRANSACTION IN THE HANDS OF THE ASSESSEE COMPANY HA S TO BE TREATED AS TRANSFER AT THE COST AT WHICH IT HAD ACQ UIRED THE ASSET. THE A.O. IS DIRECTED TO ACT AS DIRECTED ABOVE. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. THUS GROUND NO.1 OF THE A SSESSEE IS ALLOWED. THE FACTS REMAIN THE SAME AND RESPECTFULLY FOLLOWIN G THE SAME WE DISMISS GROUND NOS.1 & 2 IN ALL THE APPEALS. 7. GROUND NO.3 IN ITA NOS.4668 TO 4672/DEL/2010 IS GENERAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION. 8. GROUND NOS.3 & 4 IN ITA NO.4673/DEL/2010 ARE REL ATED TO THE DELETION OF ADDITION OF RS.3 31 58 000/- ON ACCOUNT OF INTER EST EARNED ON THE DEPOSITS AND ADVANCES. 9. BRIEF FACTS OF THE ISSUE ARE AS UNDER :- ITA NOS.4668 TO 4673/DEL/2010 9 THE ASSESSEE COMPANY WAS IN THE PROCESSION OF EXPA NSION OF ITS BUSINESS BY SETTING UP NEW UNITS AT BHILAI FOR GENE RATION OF POWER. SEPARATE BOOKS OF ACCOUNT AND RECORDS WERE MAINTAINED FOR TH E NEW UNITS BEING SET UP UNDER EXPANSION PROGRAMME. FOR FINANCING THE EXPAN SION PLANS THE ASSESSEE COMPANY HAS RAISED THE ADDITIONAL CAPITAL OF RS.45 000 LAKHS DURING THE YEAR. THE OUTSTANDING OF BORROWED TERM LOANS AS ON 31.3.2 007 WAS AS UNDER :- TERM LOAN UNION BANK OF INDIA RS.51 646 LAKHS TERM LOAN CENTRAL BANK OF INDIA RS. 1 500 LAK HS TERM LOAN FINANCIAL INSTITUTIONS RS.21 500 LAK HS TOTAL TERM LOANS RS.74 646 LAKHS THE TOTAL INTEREST/FINANCIAL EXPENSES INCURRED DURI NG THE YEAR WERE RS.4 499.96 LAKHS. OUT OF THIS RS.3 148.27 LAKHS WERE RELATED TO THE BORROWING UTILIZED FOR EXPANSION PURPOSES. THE ASS ESSEE COMPANY EARNED TOTAL INTEREST RECEIPTS OF RS.616.73 LAKHS DURING T HE YEAR. THE INTEREST EARNED ON TEMPORARILY DEPOSITS MADE OUT OF SURPLUS FUNDS A ND ON THE DEPOSITS MADE WITH BANK BY WAY OF MARGIN OR GIVING ADVANCES ETC. FOR THE PURPOSE OF EXPANSION. SUCH INTEREST EARNED WAS OF RS.331.58 L AKHS. THE BALANCE/DIFFERENCE OF INTEREST OF RS.285.15 LAKHS W AS NOT RELATED TO THE EXPANSION WORK WHICH HAD BEEN ADMITTED AS A NORMAL INCOME. THE INTEREST EARNED ON THE SURPLUS FUND AND ADVANCES BY WAY OF M ARGINS OR ADVANCES ETC. FOR THE PURPOSE OF EXPANSION WAS ADJUSTED TO THE IN CIDENTAL EXPENSES DURING CONSTRUCTION (IEDC FOR SHORT). THE INTEREST WAS A DJUSTED ON ACCOUNT OF ITA NOS.4668 TO 4673/DEL/2010 10 MATCHING PRINCIPLE AS THE INTEREST EARNED ON DEPOSI TS KEPT IN RELATION TO THE EXPANSION WERE CREDITED TO/REDUCED FROM IEDC. 10. THE LEARNED DR RELIED ON THE ORDER OF ASSESSING OFFICER AND ALSO SUBMITTED THAT THE INTEREST EARNED ON THE FDR IS TO BE ASSESSED AS INCOME FROM OTHER SOURCES IN VIEW OF THE DECISION OF HON'B LE SUPREME COURT IN THE CASE OF TUTICORIN ALKALIES CHEMICALS FERTILIZERS LT D. VS. CIT 227 ITR 172 (SC). THE LEARNED DR ALSO SUBMITTED THAT AS PER TH E AMENDED PROVISION IN SECTION 36(1)(III) BY THE FINANCE ACT 2004 THE IN TEREST PAID IN RESPECT OF CAPITAL BORROWED FOR ACQUISITION OF AN ASSET FOR EX TENSION OF EXISTING BUSINESS OR PROFESSION (WHETHER CAPITLISED IN THE BOOKS OF A CCOUNT OR NOT) FOR ANY PERIOD BEGINNING FROM THE DATE ON WHICH THE CAPITAL WAS BORROWED FOR ACQUISITION OF THE ASSET TILL THE DATE ON WHICH SUC H ASSET WAS FIRST PUT TO USE SHALL NOT BE ALLOWED AS DEDUCTION. FURTHER THE INT EREST EARNED ON THE BANK DEPOSITS ARE TO BE TAXED AS INCOME FROM OTHER SOURC ES IN VIEW OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF TUTICORIN A LKALIES CHEMICALS & FERTILISERS LIMITED VS. CIT 227 ITR 172. SHE SUBMI TTED THAT THE PRINCIPLE OF NETTING OF INTEREST SHALL NOT BE APPLICABLE TO THE FACTS OF THE ASSESSEES CASE AND THE ORDER OF CIT (A) DESERVES TO BE SET ASIDE. 11. ON THE OTHER HAND THE LEARNED AR RELIED ON THE ORDER OF CIT (A) AND ALSO ON THE CASE LAWS RELIED THEREUPON. 12. AFTER HEARING BOTH THE SIDES WE HOLD AS UNDER. ITA NOS.4668 TO 4673/DEL/2010 11 PRIOR TO THE INSERTING OF PROVISO TO SECTION 36(1) (III) THE INTEREST PAID ON CAPITAL BORROWED FOR THE PURPOSE OF EXTENSION OF EX ISTING BUSINESS OR PROFESSION WAS BEING ALLOWED AS DEDUCTION U/S 36(1) (III) OF THE INCOME-TAX ACT AS REVENUE EXPENDITURE. BY INSERTING PROVISO T O THIS SECTION W.E.F. 1.4.2004 BY THE FINANCE ACT 2004 THE AMOUNT OF IN TEREST PAID IN RESPECT OF CAPITAL BORROWED FOR ACQUISITION OF AN ASSET FOR EX TENSION OF EXISTING BUSINESS OR PROFESSION WHETHER CAPITLISED IN THE BOOKS OF AC COUNT OR NOT FOR ANY PERIOD BEGINNING FROM THE DATE ON WHICH THE CAPITAL WAS BO RROWED FOR ACQUISITION OF THE ASSET TILL THE DATE ON WHICH SUCH ASSET WAS FIR ST PUT TO USE SHALL NOT BE ALLOWED AS DEDUCTION. THE ASSESSEE COMPANY WAS RUN NING TWO POWER PLANTS. THEREAFTER A NEW POWER PLANT WAS TO BE SET UP AT BH ILAI FOR GENERATION OF POWER. COMPANY RAISED TERM LOAN FOR SETTING UP THI S NEW PLANT. THE SEPARATE BOOKS OF ACCOUNT WERE MAINTAINED FOR THIS NEW UNIT. THE ASSESSEE HAS WORKED OUT THE AMOUNT OF INTEREST PAYABLE OR PAID RELATING TO THE BORROWINGS UTILIZED FOR EXPANSION PURPOSES. SIMILARLY THE ASSESSEE AL SO WORKED THE EARNING OF INTEREST ON THE FDRS OF SURPLUS FUND AND INTEREST O N MARGINS/ADVANCES MADE FOR THE PURPOSE OF EXPANSION. THE ASSESSEE HAS ADJ USTED THE INTEREST INCOME TOWARDS THE IEDC (INCIDENTAL EXPENSES DURING CONSTR UCTION) BY ADOPTING THE MATCHING PRINCIPLE IN RESPECT OF THE INTEREST EARNE D ON THE FDRS OF SURPLUS FUND AND MARGINS AND ADVANCES MADE FOR THE PURPOSE OF EXPANSION. ADMITTEDLY THESE INCIDENTAL EXPENSES WERE INCURRED DURING CONSTRUCTION ITA NOS.4668 TO 4673/DEL/2010 12 PERIOD OF SETTING UP NEW UNIT AT BHILAI AND WHATEVE R NOT RELATED TO THIS EXPANSION WORK WAS CLAIMED AS REVENUE EXPENDITURE I N THE BOOKS WHICH HAD BEEN ALLOWED. THE CIT (A) GRANTED THE RELIEF BY FO LLOWING THE JUDGEMENT OF HON'BLE SUPREME COURT IN THE CASE OF BONGAIGAON REF INERY & PETROCHEMICALS LTD. VS. CIT 251 ITR 329 WHERE THE DECISION OF TUTI CORIN ALKALIES CHEMICALS & FERTILISERS LTD. VS. CIT 227 ITR 172 WAS ALSO REF ERRED. WE WOULD LIKE TO STATE THAT IN THE DECISION OF BONGAIGAON REFINERY & PETROCHEMICALS LIMITED HON'BLE SUPREME COURT HAS HELD AS UNDER :- THE HIGH COURT HAS ALREADY HELD THAT THE INTEREST INCOME DERIVED BY THE ASSESSEE DURING ITS FORMATIVE PERIOD WAS TAXABLE. WHAT REMAINS FOR CONSIDERATION IS THE INCOME WHICH THE ASSESSEE DERIVED FROM HOUSE PROPERTY ITS GUEST HOU SE CHARGES FOR EQUIPMENT AND RECOVERIES FROM THE CONTRACTORS O N ACCOUNT OF WATER AND ELECTRICITY SUPPLY. THESE ITEMS ARE C OVERED BY THE DECISION IN BOKARO STEEL LTD.S CASE [1999] 236 ITR 315 (SC). TO THE EXTENT THAT IT RELATES TO THESE ITEMS I.E. ITEMS EXCLUDING INTEREST THE QUESTION MUST BE ANSWERED IN THE AFFI RMATIVE AND IN FAVOUR OF THE ASSESSEE. THE ORDER UNDER CHALLENGE WILL STAND MODIFIED TO THAT EXTENT. HON'BLE APEX COURT HAS NOT DELIBERATED ON INTEREST INCOME BUT THE INTEREST INCOME DURING THE FORMATIVE STATE WAS HELD TO BE TA XABLE. THE ISSUES ON WHICH APEX COURT DELIBERATED WERE RELATED ONLY TO T HE INCOME DERIVED FROM HOUSE PROPERTIES GUEST HOUSE CHARGES FOR EQUIPMEN T AND RECOVERIES FROM THE CONTRACTOR ON ACCOUNT OF WATER AND ELECTRICITY SUPP LY. THEREFORE THE RATIO DECIDED BY HON'BLE SUPREME COURT DOES NOT COVER THE INTEREST INCOME. IN THE DECISION OF CIT VS. BOKARO STEEL LIMITED 236 ITR 31 5 (SC) THE HON'BLE ITA NOS.4668 TO 4673/DEL/2010 13 SUPREME COURT HAS HELD THAT THE INTEREST EARNED WAS INEXTRICABLY LINKED WITH THE PROCESS OF SETTING UP ITS PLANT AND MACHINERY SUCH RECEIPTS WILL GO TO REDUCE THE COST OF ASSETS AND THESE ARE RECEIPTS OF CAPITAL NATURE. HOWEVER THE DECISION OF HON'BLE SUPREME COURT IN THE CASE O F CIT VS. BOKARO STEEL LIMITED WAS DELIVERED IN DECEMBER 1998 AND THEREA FTER A PROVISO HAS BEEN ADDED TO SECTION 36(1)(III) OF INCOME-TAX ACT W.E.F . 1.4.2004. BY INSERTING THIS PROVISO TO SECTION 36(1)(III) THE INTEREST PA ID ON CAPITAL BORROWED FOR ACQUISITION OF AN ASSET FOR EXTENSION OF EXISTING B USINESS OR PROFESSION FOR ANY PERIOD BEGINNING FROM THE DATE ON WHICH THE CAPITAL WAS BORROWED FOR ACQUISITION OF THE ASSET TILL THE DATE ON WHICH SUC H ASSET WAS FIRST PUT TO USE SHALL NOT BE ALLOWED AS DEDUCTION. THE ASSESSEE HA S CLAIMED THE ADJUSTMENT OF INTEREST AGAINST THE INCIDENTAL EXPENSES DURING CONSTRUCTION ON THE BASIS OF MATCHING PRINCIPLE IS ALSO NOT AS PER LAW. AS WE HAVE STATED ABOVE THE INTEREST EARNED ON FDRS MADE FROM SURPLUS FUND AND INTEREST EARNED ON MARGINS AND ADVANCES MADE FOR EXPANSION WORK SHALL BE ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES. THE SET OFF CLAI MED AGAINST THE INCIDENTAL EXPENSES DURING THE CONSTRUCTION OF NEW PLANT OF WH ICH MAIN COMPONENT OF THIS EXPENSE IS INTEREST PAID ON BORROWED CAPITAL. THE NETTING OF INTEREST IN THE CASE OF CIT VS. SHRI RAM HONDA POWER EQUIP 289 ITR 475 (DELHI) WAS ALLOWED ONLY FOR THE PURPOSE OF DEDUCTION U/S 80HHC IN VIEW OF PROVISIONS OF SECTION 80HHC (3)(BAA). IN THE DECISION ALSO THE HON'BLE DELHI HIGH COURT ITA NOS.4668 TO 4673/DEL/2010 14 HAS CLEARLY HELD THAT SURPLUS FUNDS PARKED WITH THE BANK AND INTEREST IS EARNED THEREON CAN ONLY BE CATEGORIZED AS INCOME FROM OTHE R SOURCES AND SUCH RECEIPTS MERITS SEPARATE TREATMENT UNDER SECTION 56 OF THE INCOME-TAX ACT. THEREFORE THE PRINCIPLE OF NETTING CANNOT BE ADOPT ED IN THE ASSESSEES CASE. THE HON'BLE DELHI HIGH COURT IN THE CASE OF SHRI RA M HONDA POWER EQUIP (SUPRA) HAS HELD AS UNDER :- TO SUMMARISE THE CONCLUSIONS: (I) IN COMPUTING WH AT THE PROFITS DERIVED FROM EXPORTS FOR THE PURPOSES OF SE CTION 80HHC(1) READ WITH SECTION 80HHC(3) ARE THE NEXUS TEST HAS TO BE APPLIED TO EXCLUDE THAT WHICH DOES NOT PARTAK E OF PROFITS THAT CAN BE SAID TO HAVE BEEN DERIVED FROM THE BUSI NESS OF EXPORTS. (II) IN THE SPECIFIC CONTEXT OF CLAUSE (BA A) OF THE EXPLANATION TO SECTION 80HHC WHILE DETERMINING THE 'PROFITS OF THE BUSINESS' THE ASSESSING OFFICER HAS TO UNDE RTAKE A TWO- STEP EXERCISE IN THE FOLLOWING SEQUENCE. HE HAS TO FIRST 'COMPUTE' THE PROFITS OF THE BUSINESS UNDER THE HEA D 'PROFITS AND GAINS OF BUSINESS OR PROFESSION.' IN OTHER WORD S HE WILL HAVE TO COMPUTE BUSINESS PROFITS IN TERMS OF THE A CT BY APPLYING THE PROVISIONS OF SECTIONS 28 TO 44 THEREO F (III) IN ARRIVING AT THE PROFITS OF THE BUSINESS BY THE ABOV E METHOD THE ASSESSING OFFICER WILL EXCLUDE ALL SUCH INCOMES WHI CH PARTAKE OF THE CHARACTER OF 'INCOME FROM OTHER SOURCES' WHI CH IN ANY EVENT ARE TREATED UNDER SECTIONS 56 AND 57 OF THE A CT AND ARE THEREFORE NOT TO BE RECKONED FOR THE PURPOSES OF SE CTION 80HHC. (IV) WHERE SURPLUS FUNDS ARE PARKED WITH THE BANK AND INTEREST IS EARNED THEREON IT CAN ONLY BE CATEGORIS ED AS INCOME FROM OTHER SOURCES. THIS RECEIPT MERITS SEPARATE TR EATMENT UNDER SECTION 56 OF THE ACT WHICH IS OUTSIDE THE RING OF PROFITS AND GAINS FROM BUSINESS AND PROFESSION. IT GOES ENTIREL Y OUT OF THE RECKONING FOR THE PURPOSES OF SECTION 80HHC. (V) IN TEREST EARNED ON FIXED DEPOSITS FOR THE PURPOSES OF AVAILI NG OF CREDIT FACILITIES FROM THE BANK DOES NOT HAVE AN IMMEDIAT E NEXUS WITH THE EXPORT BUSINESS AND THEREFORE HAS TO NECESSARIL Y BE TREATED AS INCOME FROM OTHER SOURCES AND NOT BUSINESS INCOM E. (VI) ONCE BUSINESS INCOME HAS BEEN DETERMINED BY APPLYIN G ACCOUNTING STANDARDS AS WELL AS THE PROVISIONS CONT AINED IN THE ITA NOS.4668 TO 4673/DEL/2010 15 ACT THE ASSESSEE WOULD BE PERMITTED IN TERMS OF S ECTION 37 OF THE ACT TO CLAIM AS DEDUCTION EXPENDITURE LAID OU T FOR THE PURPOSES OF EARNING SUCH BUSINESS INCOME. (VII) IN THE SECOND STAGE THE ASSESSING OFFICER WILL DEDUCT FROM THE P ROFITS OF THE BUSINESS COMPUTED UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION' THE FOLLOWING SUMS IN ORDER TO ARRIVE AT THE 'PROFITS OF THE BUSINESS' FOR THE PURPOSES OF S ECTION 80HHC(3) : (A) 90 PER CENT. OF ANY SUM REFERRED TO IN CLAUSES (IIIA) (IIIB) AND (IIIC) OF SECTION 28 I.E. EXPO RT INCENTIVES; (B) 90 PER CENT. OF ANY RECEIPTS BY WAY OF BROKERAGE C OMMISSION INTEREST RENT CHARGES OR ANY OTHER RECEIPT OF A S IMILAR NATURE INCLUDED IN SUCH PROFITS; AND (C) PROFITS OF ANY BR ANCH OFFICE WAREHOUSE OR ANY OTHER ESTABLISHMENT OF THE ASSESSE E SITUATE OUTSIDE INDIA. (VIII) THE WORD 'INTEREST' IN CLAUSE (BAA) OF THE EXPLANATION CONNOTES 'NET INTEREST' AND NOT 'GROSS INTEREST. THEREFORE IN DEDUCTING SUCH INTEREST THE ASSESSIN G OFFICER WILL TAKE INTO ACCOUNT THE NET INTEREST I.E. GROSS INT EREST AS REDUCED BY EXPENDITURE INCURRED FOR EARNING SUCH INTEREST. (IX) WHERE AS A RESULT OF THE COMPUTATION OF PROFITS AND GAINS OF BUSINESS AND PROFESSION THE ASSESSING OFFICER TREATS THE INTERE ST RECEIPT AS BUSINESS INCOME THEN DEDUCTION SHOULD BE PERMISSIB LE IN TERMS OF EXPLANATION (BAA) OF THE NET INTEREST I.E. THE GROSS INTEREST LESS THE EXPENDITURE INCURRED FOR THE PURPOSES OF E ARNING SUCH INTEREST. THE NEXUS BETWEEN OBTAINING THE LOAN AND PAYING INTEREST THEREON (LAYING OUT THE EXPENDITURE BY WAY OF INTEREST) FOR THE PURPOSE OF EARNING THE INTEREST ON THE FIXE D DEPOSIT TO DRAW AN ANALOGY FROM SECTION 37 WILL REQUIRE TO BE SHOWN BY THE ASSESSEE FOR APPLICATION OF THE NETTING PRINCIP LE. THE INTEREST EARNED ON SURPLUS FUND PARKED INTO FDR S AND ON MARGIN/ADVANCES MADE FOR EXPENSE ON WORK CAN BE CAT EGORIZED ONLY AS INCOME FROM OTHER SOURCES. FURTHER AS PER THE PROVISO TO SECTION 36(III) THE WHOLE OF INTEREST AS THE BORROWED CAPITAL HAVE TO BE CAPITLISED FOR THE PERIOD TILL THE ASSET FIRST PUT TO USE. ADMITTEDLY THE ASSETS WERE NOT PUT TO THE ITA NOS.4668 TO 4673/DEL/2010 16 USE IN THE FINANCIAL YEAR RELEVANT TO ASSESSMENT YE AR UNDER CONSIDERATION. HENCE IT HAS TO BE CAPITALISED. FURTHER THE DEDUCTION OF INTEREST OR OTHER EXPENDI TURE UNDER SECTION 57 CAN BE ALLOWED ONLY WHEN IT HAS BEEN BORROWED FOR T HE PURPOSE OF EARNING OF SUCH INCOME. HERE THE LOAN WAS TAKEN FOR EXPANSION . DEDUCTION U/S 57(III) OF THE INCOME-TAX ACT IS ALLOWABLE WHEN ANY EXPENDITUR E NOT BEING IN THE NATURE OF CAPITAL EXPENDITURE LAID OUT OR EXPANDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF MAKING OR EARNING SUCH INCOME. THUS TH E EXPENDITURE TO BE DEDUCTIBLE U/S 57(III) MUST BE LAID OUT OR EXPANDED WHOLLY OR EXCLUSIVELY FOR THE PURPOSE OF MAKING OR EARNING SUCH INCOME. UNLE SS THE EXPENDITURE SOUGHT TO BE DEDUCTED RESULTED IN MAKING OR EARNING INCOME IT COULD NOT BE SAID TO BE LAID OUT OR EXPANDED FOR THE PURPOSE OF MAKING SUCH INCOME. THE WORDING OF SECTION 57(III) ARE NARROW THAN THE LANG UAGE OF SECTIONS 36 AND 37 OF INCOME-TAX ACT. HON'BLE SUPREME COURT IN THE CA SE OF SMT. PADMAVATI JAIKRISHNA VS. ADDL. CIT 166 ITR 176 HAS HELD THAT WHEN THE DOMINANT PURPOSE FOR PAYING ANNUITY DEPOSIT WAS NOT TO EARN INCOME BUT TO MEET THE STATUTORY LIABILITY OF MAKING THE DEPOSIT THEN THE EXPENDITURE WAS NOT WHOLLY OR EXCLUSIVELY FOR THE PURPOSE OF EARNING SUCH INCO ME. THE INTEREST EXPENDITURE PAID IN RESPECT OF CAPITA L BORROWED FOR ACQUISITION OF AN ASSET FOR EXTENSION OF THE EXISTI NG BUSINESS OR PROFESSION WAS ALLOWABLE AS REVENUE EXPENDITURE BUT BY THE PROVISO INSERTED W.E.F. 1.4.2004 ITA NOS.4668 TO 4673/DEL/2010 17 BY THE FINANCE ACT 2003 SUCH INTEREST PAID IN RES PECT OF CAPITAL BORROWED FOR ACQUISITION OF ASSET FOR THE EXTENSION OF EXISTING BUSINESS OR PROFESSION SHALL NOT BE ALLOWABLE FOR ANY PERIOD BEGINNING FROM THE DATE ON WHICH CAPITAL WAS BORROWED FOR ACQUISITION OF THE ASSET TILL THE DATE ON WHICH SUCH ASSET WAS FIRST PUT TO USE. IT HAS ALSO BEEN MADE CLEAR BY THE AME NDMENT THAT WHETHER THE INTEREST AMOUNT HAS BEEN CAPITALISED IN THE BOOKS O F ACCOUNT OR NOT IT WILL NOT MAKE ANY DIFFERENCE IN THE ALLOWABILITY OF THE DEDU CTION. ADMITTEDLY THE DOMINANT PURPOSE FOR THE LOAN TAKEN WAS FOR THE EXT ENSION OF THE EXISTING BUSINESS BY WAY OF SETTING UP A NEW POWER GENERATIO N PLANT AT BHILAI. SINCE ASSESSEE HAD BEEN DENIED THE BENEFIT BY INSERTING A SPECIFIC PROVISO TO SECTION 36(1)(III) THEREFORE MATCHING PRINCIPLE SHALL HEL P ASSESSEE. WHATEVER CANNOT BE ACHIEVED DIRECTLY IT CAN ALSO NOT BE ACHIEVED I NDIRECTLY. IN VIEW OF THE ABOVE FACTS WE SET ASIDE THE ORDER OF THE CIT (A) ON THIS ISSUE AND RESTORE THE ORDER OF THE ASSESSING OFFICE R. 13. IN THE RESULT THE APPEAL OF THE REVENUE IN ITA NOS.4668 TO 4672/DEL/2010 ARE DISMISSED AND APPEAL OF REVENUE I N ITA NO.4673/DEL/2010 IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 25 TH DAY OF MARCH 2011. SD/- SD/- (RAJPAL YADAV) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 25 TH DAY OF MARCH 2011/TS ITA NOS.4668 TO 4673/DEL/2010 18 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT (A)-XVIII NEW DELHI. 5.CIT(ITAT) NEW DELHI. AR ITAT NEW DELHI.