Atul Limited, Ahmedabad v. The ACIT.,(OSD)Range-1,, Ahmedabad

ITA 8/AHD/2013 | 2008-2009
Pronouncement Date: 11-10-2013 | Result: Partly Allowed

Appeal Details

RSA Number 820514 RSA 2013
Assessee PAN AABCA2390M
Bench Ahmedabad
Appeal Number ITA 8/AHD/2013
Duration Of Justice 9 month(s) 9 day(s)
Appellant Atul Limited, Ahmedabad
Respondent The ACIT.,(OSD)Range-1,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 11-10-2013
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted D
Tribunal Order Date 11-10-2013
Date Of Final Hearing 03-09-2013
Next Hearing Date 03-09-2013
Assessment Year 2008-2009
Appeal Filed On 02-01-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMADABAD BEFORE SHRI G.C.GUPTA VICE PRESIDENT AND SHRI T.R. MEENA ACCOUNTANT MEMBER ITA NO. 8/AHD/2013 ASSESSMENT YEAR :2008-09 ATUL LIMITED 3 RD FLOOR ASHOKA CHAMBERS RASALA MARG ELIS BRIDGE AHMEDABAD-380 009 V/S. A.C.I.T(OSD) RANGE-I AHMEDABAD PAN NO. AABCA2390M (APPELLANT) .. (RESPONDENT) ITA NO. 385/AHD/2013 ASSESSMENT YEAR :2008-09 A.C.I.T(OSD) RANGE-I AHMEDABAD V/S. ATUL LIMITED 3 RD FLOOR ASHOKA CHAMBERS RASALA MARG ELIS BRIDGE AHMEDABAD-380 009 (APPELLANT) .. (RESPONDENT) BY REVENUE SHRI VIMALENDU VERMA CIT. D.R. /BY ASSESSEE SHRI S. N. SOPARKAR A.R. /DATE OF HEARING 0 3 .0 9 .201 3 /DATE OF PRONOUNCEMENT 11.10.2013 O R D E R PER : SHRI T.R.MEENA ACCOUNTANT MEMBER THESE TWO APPEALS ARE CROSS APPEALS FILED BY THE AS SESSEE AS WELL AS REVENUE. THESE APPEALS ARE EMANATED FROM THE ORDER OF THE LD. CIT(APPEALS)- VI AHMEDABAD ORDER DATED 16.11.2012 FOR A.Y. 2008 -09. BOTH APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. THE SUBSTANTIVE GROUNDS OF AP PEAL OF THE ASSESSEE AND REVENUE ARE REPRODUCED BELOW: ITA NO. 8 & 385/AHD/2013 A.Y. 08-09 PAGE 2 1. LD. CIT(A) ERRED IN LAW AND ON FACTS IN DIRECT ING THE AO IN RELATION TO GROUND NOS.9 10 AND 11 BEFORE HIM TO MODIFY T HE ASSESSMENT ORDER IN LIGHT OF THE DECISION OF THE T RIBUNAL (FOR A.Y.2006/07) ON THIS ISSUE VIZ IN RELATION TO DISA LLOWANCE OF DEDUCTION U/S. 80IA OF THE ACT MADE BY AO OF RS.3 5 9 34 477/- FOR CAPTIVE POWER PLANT AND RS.2 03 68 535/- FOR CO-GEN ERATION PLANT BY INVOKING THE PROVISIONS OF SUBSECTION (8) OF SEC TION 80IA OF THE ACT. LD. CIT(A) COMPLETELY ERRED IN NOT APPRECIATIN G THE FACT THAT THE HONBLE TRIBUNAL IN A.Y.2006/07ADJUDICATED GROU ND AGAINST DISALLOWANCE OF DEDUCTION CLAIMED U/S. 80IA IN CASE OF NEW POWER PLANT ONLY (COVERED BEFORE HIM VIDE GROUND NO.8) WH EREAS DEDUCTION DENIED IN RESPECT OF CAPTIVE POWER PLANT AS WELL AS CO- GENERATION PLANT THROUGH OVERSIGHT IS NOT AT ALL DI SCUSSED IN THE SAID ORDER OF THE HONBLE TRIBUNAL. LD. CIT(A) OUGH T TO HAVE INDEPENDENTLY ADJUDICATED THESE ISSUES INSTEAD OF S ETTING THEM ASIDE TO AO TO FOLLOW ORDER OF THE EARLIER YEAR. 2. LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMI NG ACTION OF AO IN MAKING ADDITION OF IRRECOVERABLE BALANCES WRITTEN O FF OF RS.89 000/- FOLLOWING ORDER OF THE HONBLE TRIBUNAL FOR A.Y.2006/07. LD. CIT(A) FAILED TO APPRECIATE THAT T HE AMOUNT WRITTEN OFF DURING THE YEAR WAS ON ACCOUNT OF OLD B ALANCE OF CALL & ALLOTMENT MONEY RECEIVABLE WHEREAS IN A.Y. 2006/07 WRITE OFF WAS IN RESPECT OF ADVANCES GIVEN AGAINST PURCHASE GROUN D ON MERITS INSTEAD OF FOLLOWING TRIBUNAL ORDER OF EARLIER YEAR BASED ON ENTIRELY DIFFERENT SET OF FACTS. 3. LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMI NG DISALLOWANCE OF CLAIM OF DEPRECIATION OF RS.94 94 341/- MADE BY AO REDUCING THE DEPRECIATION CLAIMED FOR THE YEAR UNDER CONSIDERATI ON BY ENHANCING DEPRECIATION FOR A.Y.2001/02 WHEN APPELLA NT HAD ITA NO. 8 & 385/AHD/2013 A.Y. 08-09 PAGE 3 OPTED NOT TO CLAIM ANY DEPRECIATION FOR A.Y. 2001/0 2. LD. CIT(A) CONFIRMED THE DISALLOWANCE ON THE BASIS OF THE DECI SION OF THE HONBLE ITAT FOR A.Y. 2006/07. LD. CIT(A) OUGHT TO HAVE DELETED THE DISALLOWANCE MADE BY A.O. THE REVENUE GROUNDS OF APPEAL ARE AS UNDER : 1. THE CIT(A) HAS ERRED IN LAW AND ON FACT IN DI RECTING THE AO TO MODIFY THE ASSESSMENT ORDER WITH REGARD TO PRIOR PE RIOD EXPENDITURE OF RS. 1 18 06 240/- DISALLOWANCE U/S. 14A OF RS.3 25 92 000/- AND DISALLOWANCE OF DEDUCTION U/S .80IA OF RS. 20 44 35 61/-. THE CIT(A) HAS THUS ACTED BEYOND JUR ISDICTION BY SENDING THE ISSUE BACK TO THE FILE OF THE AO. 2. THE CIT(A) HAS ERRED IN LAW AND ON FACT IN DELET ING THE POSITIVE ADJUSTMENT OF RS.3 25 92 000/- TO BOOK PROFIT U/S. 115JB DUE TO DISALLOWANCE U/S.14A. ITA NO.: 8/AHD/2013 (ASSESSEES APPEAL) A.Y.2008-0 9 2. THE FIRST GROUND OF APPEAL OF THE ASSESSEE IS AG AINST THE DISALLOWANCE OF DEDUCTION U/S. 80IA OF THE I.T. ACT MADE BY THE LD. A.O. OF RS.3 59 34 477/- FOR CAPTIVE POWER PLANT AND RS.2 03 68 535/- FOR CO -GENERATION PLANT BY INVOKING THE PROVISIONS OF SUBSECTION (8) OF SECTIO N 8IA OF THE I.T. ACT. THE LD. A.O. OBSERVED THAT THE ASSESSEE HAD CLAIMED DEDUCTI ON U/S. 80IA AT RS.27 02 15 067/- FOR ITS 3 PLANTS. CERTIFICATE IN FORM 10CCB ARE DULY FILED. THE DETAILS ARE AS UNDER : - NEW POWER PLANT RS. 14 81 32 639/- CAPTIVE POWER PLANT RS. 10 17 13 893/- CO-GENERATION PLANT RS. 2 03 68 535/- ITA NO. 8 & 385/AHD/2013 A.Y. 08-09 PAGE 4 NEW POWER PLANT THE LD. A.O OBSERVED THAT SINCE A.Y. 2001-02THE DE PARTMENT HAS CONSISTENTLY HELD THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S. 80IA OF THE ACT FOR THE NEW POWER PLANT. THIS DENIAL OF DEDUCTI ON HAS NOW BEEN UPHELD BY THE HON. ITAT AHMEDABAD. RESPECTFULLY FOLLOWING THAT DECISION THE CLAIM OF DEDUCTION U/S. 80IA OF RS.14 81 35639/- IS DENIE D. CAPTIVE POWER PLANT AS REGARDS THE CAPTIVE POWER PLANTS CLAIM FOR DED UCTION U/S. 80IA THE MATERIAL FACT OF CLAIM AND THE DEDUCTION ALLOWED AR E AS PER THE DETAILED REASONING GIVEN IN THE ORDER FOR A.Y. 2005-06. THE MATERIAL PART OF THE COMPUTATION FOR DEDUCTION FOR THIS YEAR IS AS UNDER :- CREDIT FOR INTERNAL CONSUMPTION -STEAM GENERATION 2 58 14 @ 564.903/TE 14 58 28 557/- -ELECTRICITY 2 35 33 028 @ 5.835/UNIT 1 3 73 05 315/- _____________ 28 31 33 872/- LESS: ACTUAL COST OF GENERATION OF STEAM & ELECTRIC ITY 18 14 19 979/- GAIN/LOSS AS PER BOOKS BEFORE DEPN & LEASE RENT : 10 17 13 893/- ========== THE LD. A.O. HAS CALCULATED THE GAIN AT 35.70%. THE SAME SEEMED INORDINATELY HIGH AND THE A.O GIVEN THE REASONABLE OPPORTUNITY OF BEING HEARD ON THIS ISSUE WHICH WAS RESPONDED BY THE APPELLANT BEFORE HIM. AFTER ANALYZING THE ASSESSEES REPLY AND AUDITORS CERTIF ICATE IT WAS FOUND TO THE A.O. THAT THE CREDIT FOR STEAM HAS BEEN TAKEN AT RA TE OF RS. 564.903 WHICH WAS THE ACTUAL COST OF GENERATION OF STEAM. HENCE NO P ROFIT IS ACCOUNTED FOR ON THE GENERATION OF STEAM. AS SUCH THE ENTIRE PROFIT ARI SES FROM THE CREDIT FOR ITA NO. 8 & 385/AHD/2013 A.Y. 08-09 PAGE 5 ELECTRICITY WHICH WAS 74.08% AS PER THE AUDITORS C ERTIFICATE. SINCE THE LD. A.O. FOUND HIGH RATE OF PROFIT THEREFORE HE APPLI ED TO ASCERTAIN THE METHODOLOGY. THE RATE OF CREDIT FOR ELECTRICITY WAS TAKEN AT RS.5.835 AND THE BASIS FOR THE SAME WAS CALLED FOR. IT WAS SUBMITTED BEFORE THE LD. A.O. THAT THE SAME WAS THE GUJARAT ELECTRICITY BOARD RATE WHICH W AS ADOPTED FOR TAKING CREDIT. THE LD. A.O. HAD NOT FOUND RATE CHARGED BY THE G.E.B COMPARABLE BECAUSE OF DIFFERENT FUNCTIONS AND SIZE OF THE ELEC TRICITY BOARD AND IT WAS NOT POSSIBLE TO GENERATE PROFIT AT RATE 74.08%. AND EV EN ELECTRICITY BOARD HAD MONOPOLY IN THE STATE. HE FURTHER HELD THAT THE RAT E OF RS.5.835 BORROWED FROM THE G.E.B HAD NOTHING TO DO WITH THE INTERNAL EXPEN DITURE + REASONABLE MARGIN TO THE ASSESSEE. CONSIDERING THE ASSESSEES OWN COM PUTATION AS PER THE AUDITORS CERTIFICATE DEDUCTION U/S. 80IA OF THE A CT WAS COMPUTED AS UNDER :- PARTICULARS QTY. RATE AMOUNT COST PROFIT CREDIT FOR STEAM 258148 564.903 145828557 145828557 NIL CREDIT FOR ELECTRICITY 23533028 5.835 137305315 36236260 101069055 TOTAL 101069055 ADD: DEPRECIATION AS CLAIMED 854743 LESS: DEPRECIATION ON LEASE RENT AS CLAIMED 209905 101713893 THE PROFIT CLAIMED AT 35.70% FROM THIS UNIT WAS IT SELF EXCESSIVE. HOWEVER THE PROFIT FROM ELECTRICITY AT RATE OF 74. 08% WAS VERY QUESTIONABLE. THE RATE ADOPTED FOR CREDIT OF ELECTRICITY CAN NEVE R REFLECT THE TRUE INTERNAL PROFIT OF THE UNIT. THE TRUE PROFIT CAN BE DEDUCED EITHER REDUCING THE RATE OF ITA NO. 8 & 385/AHD/2013 A.Y. 08-09 PAGE 6 CREDIT I.E. RS.5.835 OR BY REDUCING THE RATE OF PRO FIT REFLECTED I.E. 74.08%. THE PROFITS OF ELIGIBLE UNIT WAS COMPUTED BY THE A.O. B Y BOTH THE METHODS DISCUSSED ABOVE : - (A) REDUCING THE NOTIONAL RATE OF CREDIT FROM RS.5. 835 TO RS. 4.335 STEAM 258148 X 564.903 14 58 28 557/- ELECTRICITY 23533028 X 4.335 10 20 15 676/- 24 78 44 233/- LESS COST OF GENERATION 18 20 64 817/- 6 57 79 416/- (B) REDUCING THE PROFIT RE-COMPUTED AT 74.08% TO 35 .70% ELECTRICITY AS CLAIMED 23533028 X 5.835 13 73 0 5 315/- PROFIT @ 33.94% 4 90 13 275/- THE LD. A.O. RESTRICTED THE DEDUCTION UNDER S UBSECTION (8) OF SECTION 80IA FOR CAPTIVE POWER PLANT AT RS.6 57 79 416/-. CO-GENERATION PLANT AS REGARDS THE CO-GENERATION PLANT THE LD. A.O. H AD ALSO APPLIED THE SAME METHODOLOGY ADOPTED FOR CAPTIVE POWER PLANT ON THE BASIS OF FINDINGS GIVEN IN A.Y. 2005-06. THE MATERIAL PART OF THE COM PUTATION OF DEDUCTION IS AS UNDER :- CREDIT FOR INTERNAL CONSUMPTION - STEAM GENERATION 10050 @ 564.9/TE 53 09 608 - ELECTRICITY 16380000 @ 5.594/UNIT 9 16 29 720 9 69 39 328 LESS: ACTUAL COST OF GENERATION OF STEAM & ELECTRIC ITY 7 65 70 793 GAIN/LOSS AS PER BOOKS BEFORE DEPN: 2 03 68 535 ITA NO. 8 & 385/AHD/2013 A.Y. 08-09 PAGE 7 THUS THE GAIN ARISES AT 17.20%. ON THE SAME RATIO NALE AS IN CASE OF CAPTIVE POWER PLANT DISCUSSED ABOVE IT IS SEEN THA T THE ENTIRE PROFIT ARISES FROM THE CREDIT FOR ELECTRICITY WHICH WAS 22.23% AS PER THE AUDITORS CERTIFICATE. CONSIDERING THE ASSESSEES OWN COMPUTA TION AS PER THE AUDITORS CERTIFICATE THE DEDUCTION U/S. 80IA WAS COMPUTED B Y THE LD. A.O. AS UNDER :- PARTICULARS QTY. RATE AMOUNT COST PROFIT CREDIT FOR STEAM 9.399 564.9 5309608 5309608 NIL CREDIT FOR ELECTRICITY 16380000 5.594 91629720 74958580 16671140 TOTAL 16671140 ADD: DEPRECIATION AS CLAIMED 413327 4 LESS: DEPRECIATION ON LEASE RENT AS CLAIMED 435879 20368535 THE LD. A.O HAS APPLIED BOTH THE METHODS ON CO-GEN ERATION PLANT WHICH IS REPRODUCED AS UNDER :- (A) REDUCING THE NOTIONAL RATE OF CREDIT FROM RS.5. 835 TO RS. 4.335 STEAM 9399 X 559.224 53 09 668/- ELECTRICITY 16380000 X 4.335 7 10 07 300/- 7 63 16 908/- LESS COST OF GENERATION 8 02 68188/- (-) 39 51 280/- (B) REDUCING THE PROFIT RE-COMPUTED AT 22.23% TO 17 .20% ELECTRICITY AS CLAIMED 16380000 X 5.594 9 16 29 720/- PROFIT @ 17.20% 1 57 58 020/- THE LD. A.O. HAS CALCULATED THE DEDUCTION U/S. 80I A(8) FOR CO- GENERATION PLANT AT RS.NIL. THUS THE TOTAL DISALLO WANCE IS RS. 20 44 35 651/-. ITA NO. 8 & 385/AHD/2013 A.Y. 08-09 PAGE 8 3. BEING AGGRIEVED BY THE ORDER OF THE LD. A.O THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(APPEALS) WHICH WAS DECIDE D BY HIM ON THE BASIS OF ITAT DECISION FOR A.Y.2006-07. THE OPERATIVE PORTIO N IS REPRODUCED AS UNDER:- 6.2 AS CONTENDED BY THE LEARNED A.R. IDENTICAL I SSUE CAME FOR THE CONSIDERATION OF THE TRIBUNAL IN APPELLANTS OWN CA SE FOR THE A.Y. 2006-07. TRIBUNAL PASSED ORDER DATED 13.07.2012 IN ITA NO.3118/AHD/2010. RESPECTFULLY FOLLOWING THE SAID O RDER THE A.O IS DIRECTED TO MODIFY THE ASSESSMENT ORDER IN THE LIGH T OF THE DECISION OF THE TRIBUNAL ON THE ISSUE. THESE GROUNDS OF APPEAL ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES ONLY. 4. NOW THE ASSESSEE IS BEFORE US. THE LD. CONSUL FO R THE APPELLANT CONTENDED THAT THIS GROUND OF APPEAL IS IDENTICAL W ITH GROUND TAKEN IN A.Y.2006-07 WHICH HAS BEEN SET ASIDE BY THE HON. IT AT IN ITA NO.3118/AHD/2010 AT PARA -16/17 PAGE-57-59. THE LD. CITDR FAIRLY ACCEPTED THE ASSESSEES ARGUMENTS AND REQUESTED TO SET ASIDE THE ISSUE TO THE A.O. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE LD. A.O. DISALLOWED THE FULL DEDUCTION U/S.80IA ON NEW POWER PLANT AND CO-GENERATION POWER PLANT AND PARTLY ALLO WED DEDUCTION U/S. 80IA ON CAPTIVE POWER PLANT. IN A.Y.2001-02AS NOTED BY T HE CO-ORDINATED BENCH ITAT AHMEDABAD IN ITA NO. 3118/AHD/2010 FOR A.Y. 2 006-07AT PAGE NO-58 AT PARA-17 THAT THE HON. ITAT VIDE ORDER DATED 16.0 5.2008 FOR A.Y. 2001-02 IN ASSESSEES OWN CASE IN ITA NO.3528/A/2004 HELD THAT IN RESPECT OF NEW POWER PLANT THE SAME WAS MERELY AN EXPANSION OF TH E EXISTING UNDERTAKING. ACCORDING TO THE TRIBUNAL THERE WAS AN EXISTING UN IT WHEREIN A NEW DEADLINE WAS ADDED AND SUCH A UNIT COULD NOT BE REGARDED TO BE AS AN ESTABLISHMENT OF ITA NO. 8 & 385/AHD/2013 A.Y. 08-09 PAGE 9 A NEW UNDERTAKING FOR QUALIFYING THE DEDUCTION U/S. 80IA OF THE ACT. BUT THIS ORDER OF THE HON. ITAT HAD BEEN RECALLED IN M.A. NO .324/AHD/2008 ORDER DATED 11.05.2012 BY CONSIDERING THE HON. GUJARAT HI GH COURT DECISION IN CASE OF GUJARAT ALKALIES & CHEMICALS 249 ITR 82 (GUJ.). THEREFORE THE HON. ITAT D BENCH HAD ALSO SET ASIDE THE ENTIRE ISSUE BACK TO THE STAGE OF A.O. TO BE DECIDED DE NOVO IN THE LIGHT OF THE VERDICT OF THE HIGH COURT. AS ENTIRE GROUNDS OF APPEAL REVOLVING AROUND DEDUCTION U/S. 80IA AND MATTER HAD BEEN SENT BACK TO THE A.O. IN A.Y.2006-07 THE IDENTICAL ISSUE IS INVOLVED IN THE YEAR UNDER CONSIDERATION THEREFORE WE ARE RESTORING BACK THI S ENTIRE ISSUE TO THE LD. A.O. FOR DE NOVO . THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSE ON LY. 6. GROUND NO.2 IS AGAINST CONFIRMING THE ADDITION O N ACCOUNT OF IRRECOVERABLE BALANCE WRITTEN OFF OF RS.89 0000/- FOLLOWING THE ORDER OF THE HON. ITAT IN A.Y.2006-07 BY THE LD. CIT(APPEALS). T HE LD. A.O. FOUND THAT THE ASSESSEE HAD WRITTEN OFF OF RS.89 0000/- IRRECO VERABLE AGAINST OLD BALANCE OF ALLOTMENT AND CALL MONEY. THE LD. A.O. GIVEN THE REASONABLE OPPORTUNITY OF BEING HEARD AND THE ASSESSEE ADMITTED BEFORE THE LD . A.O ITS CAPITAL EXPENDITURE WHICH WAS NOT FOUND SATISFACTORY TO THE A.O. HE MADE THE ADDITION OF RS.89 000/- 7. THE LD. CIT(APPEAL) CONFIRMED THE ADDITION BY OB SERVING THAT THE SIMILAR ADDITION MADE IN A.Y. 2006-07 HAS BEEN DISMISSED BY THE ITAT VIDE ORDER DATED 13.07.2012 IN ITA NO.3118/AHD/2010. THE LD. C ONSUL FAIRLY ACCEPTED THAT THE DECISION OF THE HON. ITAT IS AGAINST THE A SSESSEE WHICH WAS CONFIRMED BY THE LD. A.R. IN A.Y. 2006-07 THE AMOUN T GIVEN TO M/S. SANDO ITA NO. 8 & 385/AHD/2013 A.Y. 08-09 PAGE 10 INDUSTRIES AS AN ADVANCE FOR PURCHASE OF EQUIPMENT. THE ADVANCE WAS GIVEN FOR ACQUIRING THE CAPITAL ASSET. HOWEVER IN THE YE AR UNDER CONSIDERATION THE APPELLANT HAD WRITTEN OFF IRRECOVERABLE BALANCE OF ALLOTMENT AND CALL MONEY WHICH IS NEITHER CAPITAL EXPENDITURE NOR REVENUE EX PENDITURE OF THE APPELLANT. THEREFORE WE CONFIRM THE ADDITION OF THE CIT(APPEA L). THIS GROUND OF APPEAL IS DISMISSED. 8. GROUND NO.3 IS AGAINST THE DISALLOWANCE OF CLAIM OF DEPRECIATION OF RS.94 94 341/- MADE BY THE LD. A.O AND CONFIRMED BY THE CIT(APPEAL) ON THE BASIS OF THE A.Y.2006-07. THE APPELLANT HAD NOT CLA IMED THE DEPRECIATION IN A.Y. 2001-02. THUS HE HAD CLAIMED ENHANCE DEPRECIA TION IN THE YEAR UNDER CONSIDERATION. THE REVISED COMPUTATION OF DEPRECIAT ION WAS SUBMITTED BY THE ASSESSEE BEFORE THE LD. A.O. ON THAT BASIS HE MADE THE ADDITION OF RS. 94 94 341/- . 9. THE LD. CIT (APPEAL) CONFIRMED THE ADDITION ON T HE BASIS OF FINDINGS GIVEN BY THE ITAT IN A.Y.2006-07. THE LD. CONSUL FO R THE APPELLANT SUBMITTED THAT THIS ISSUE HAS BEEN DECIDED BY THE ITAT AGAINS T THE ASSESSEE WHICH WAS CONFIRMED BY THE LD. CIT DR. RESPECTFULLY FOLLOWIN G THE DECISION OF CO- ORDINATE D BENCH IN A.Y.2006-07 WE CONFIRM THE A CTION OF THE CIT(APPEAL). THIS GROUND OF APPEAL IS DISMISSED. ITA NO. 385/AHD/2013 (REVENUES APPEAL) A.Y.2008-0 9 10. THE FIRST GROUND OF REVENUE IS AGAINST DIRECTIN G THE LD. A.O. TO MODIFY ASSESSMENT ORDER WITH REGARD TO PRIOR PERIOD EXPEND ITURE OF RS.1 18 06 240/- ITA NO. 8 & 385/AHD/2013 A.Y. 08-09 PAGE 11 DISALLOWANCE U/S. 14A OF RS.3 25 92 000/- AND DISA LLOWANCE OF DEDUCTION U/S.80IA OF RS.20 44 35 651/-. THE ASSESSEE HAD INC URRED EXPENDITURE RELATING TO THE PRIOR PERIOD TO THE TUNE OF RS.1 18 06 240/- . THE ASSESSEE ALSO HAD SHOWN THE PRIOR PERIOD INCOME AT RS.2 52 37 240/- . THE LD. A.O. HAS OBSERVED THAT NO EVIDENCES OF PRIOR PERIOD EXPENDIT URE HAD BEEN SUBMITTED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEE DINGS FOR THE CRYSTALLIZATION OF EXPENDITURE DURING THE YEAR. THU S HE MADE ADDITION OF RS.1 81 06 240/-. THE LD. CIT(APPEAL) HAD DIRECTED THE LD. A.O. TO FOLLOW THE HON. ITAT ORDER FOR A.Y. 2006-07. NOW THE REVENUE IS BEFORE US. THE LD. CIT DR SUBMITTED THAT THIS ISSUE IS IDENTICAL WITH PRI OR PERIOD EXPENDITURE CLAIMED IN A.Y. 2006-07 WHICH HAS BEEN SET ASIDE BY THE HON . ITAT. SIMILARLY THE LD. A.O MADE THE ADDITION U/S. 14A OF THE ACT AT RS. 3 25 92 000/- BY FOLLOWING THE CO-ORDINATE BENCH DECISION IN CASE OF DAGA CAPITAL MANAGEMENT PVT. LTD VIDE ITA NO.805/MUM/2003 FOR A.Y. 2001-02 SB DECIS ION OF HON. ITAT AND HON. BOMBAY HIGH COURT IN CASE OF M/S. GODREJ & BOY CE MANUFACTURING LTD. AND ALSO SB DECISION OF ITAT DELHI BENCH IN CASE OF CHEMINVEST LTD. THE LD. A.O. CALCULATED THE DISALLOWANCE ON THE BASIS OF RU LE-8D. THE LD. CIT(APPEAL) HAD FOLLOWED THE ITAT ORDER ON THIS ISS UE FOR A.Y. 2006-07 AND LD. A.O. WAS DIRECTED TO DECIDE THE CASE AS PER THE ORDER OF THE ITAT IN A.Y.2006-07. 11. THE LD. CIT(APPEAL) HAD FOLLOWED THE ITAT ORDER ON THIS ISSUE AND LD. A.O. WAS DIRECTED TO DECIDE THE CASE ON THE BASIS O F ITAT DECISION IN A.Y.2006-07 AS DISCUSSED ABOVE. BOTH THE SIDES HAS AGREED THAT THIS ISSUE IS ITA NO. 8 & 385/AHD/2013 A.Y. 08-09 PAGE 12 IDENTICAL WITH A.Y.2006-07 AND MAY BE SENT BACK TO THE LD. A.O. RESPECTFULLY FOLLOWING THE DECISION OF A.Y. 2006-07 OF COORDINAT E D BENCH BEING THE IDENTICAL ISSUE INVOLVED UNDER THE YEAR UNDER CONSI DERATION THEREFORE WE SET ASIDE THE ISSUE TO THE LD. A.O. FOR DE NOVO. THIS GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 12. THE SECOND GROUND OF APPEAL OF REVENUE IS AGAIN ST DELETING THE POSITIVE ADJUSTMENT OF RS.3 25 92 000/- TO BOOK PROFIT U/S. 115JB. THE LD. A.O. OBSERVED THAT THERE WAS A DISALLOWANCE U/S. 14A WHI CH WAS ADJUSTED IN MAT INCOME COMPUTED U/S. 115JB AND INCOME DETERMINED IN MAT BY INCREASING DISALLOWANCE MADE U/S. 14A AT RS.36 41 54 090/-. TH E LD. CIT(APPEAL) DELETED THE ADDITION BY FOLLOWING THE HON. ITAT AH MEDABAD BENCH DECISION IN CASE OF RELIANCE PETRO PRODUCTS PVT. LTD VS. ACI T ORDER DATED 13.07.2012 IN ITA NO. 2324/AHD/2009 WHEREIN THE ISSUE WAS DECI DED BY FOLLOWING THE APEX COURT ORDER IN CASE OF APOLLO TYRES LTD. VS. C IT 255 ITR 273 (SC) 2005. THE LD. CIT DR RELIED UPON THE ORDER OF THE LD. A.O . AT THE OUTSET LD. CONSUL RELIED UPON THE ORDER OF THE HON. ITAT BENCH IN CAS E OF RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA) AND REQUESTED TO UPHELD THE ORDER OF THE CIT(APPEAL). THE COORDINATE BENCH DECIDED THE IDENT ICAL ISSUE IN CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE HON. HIGH COURT IN CASE OF APOLLO T YRES LTD. RESPECTFULLY FOLLOWING THE DECISION OF APEX COURT ON THIS ISSUE WE UPHELD THE ORDER OF THE CIT (APPEALS) AND DISMISSED THE APPEAL OF THE REVEN UE. ITA NO. 8 & 385/AHD/2013 A.Y. 08-09 PAGE 13 13. THE ASSESSEES APPEAL ON GROUND NO.1 AND REVENU ES APPEAL ON GROUND NO. 1 IS SET ASIDE. THE ASSESSEES APPEAL ON GROUND NO. 2 AND 3 AND REVENUES APPEAL ON GROUND NO 2 ARE DECIDED AGAINS T THE ASSESSEE AND REVENUE. 14. BOTH THE APPEAL ALLOWED PARTLY. THIS ORDER PRONOUNCED IN OPEN COURT ON 11.10.2013 SD/- SD/- (G.C.GUPTA) (T.R. MEENA) VICE PRESIDENT ACCOUNTANT MEMBER TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. $%$& ' '( / CONCERNED CIT 4. ' '(- + / CIT (A) 5. -.+' & ' ++' & 01 % / DR ITAT AHMEDABAD 6. .34 56 / GUARD FILE. BY ORDER/ 7/0' $+ ' ++' & 01 % 9