TaxTMI 
TaxTMI 
2013 (9) TMI 434
X X X X Extracts X X X X
X X X X Extracts X X X X
.... grounds and submissions of the assessee in respect of each of the grounds is submitted by the learned AR of the assessee and it was agreed by both the sides that this appeal may be decided on the basis of the chart after considering the submissions of the learned DR of the Revenue. Hence, we proceed to decide this appeal of the assessee as per this chart. Ground No.1 is general as per this chart. 3. Ground No. 2 is as under: "2. The Ld. CIT(A) has erred in confirming the disallowance of claim made u/s. 80-I & 80-IA on the ground that activity of your appellant cannot be held as manufacture or production of article or thing. Your appellant submits that it is engaged in manufacturing and/or producing articles not specified in ninth schedule fulfills the required condition for eligibility of deduction u/s. 80I & 80IA of the Act and hence deduction ought to have been granted to it." 4. It was submitted by the assessee in the chart that this issue is covered in favour of the assessee by the Tribunal decision in assessee's own case for assessment years 1993-94 and 1994-95 to 1998-1999 and 2000-01. He also submitted that the Tribunal decisions are available on pages....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ew in the present year. Accordingly, this ground is also allowed. 9. Ground No.4 is as under: "4. The ld. CIT(A) has erred in confirming the disallowance of Rs.10,72,29,866/- being interest on borrowings made for Hazira - Ankleshwar Pipeline Project (HAPi). Hazira to Ankleshwar Pipeline Project is simply an extension of the existing business of Natural Gas distribution through pipelines started since 1989. The assessee company has already got a 930 km long pipe line network in place starting from Ankleshwar and Bharuch. The same is admissible as deduction u/ 36(1) (iii) of the I. T. Act. It be so held now. 4.1 Without prejudice, your appellant submits that if it is held that the interest on borrowings made for Hazira -Ankleshwar Pipe Project is not admissible u/s. 36(1)(iii) of the I. T. Act, then it is entitled to depreciation on the amount of interest which has been capitalized in the books of account, but no depreciation has been claimed when the project started production in subsequent assessment year. Your appellant submits that the appropriate direction be given to grant depreciation on the amount of interest claimed as deduction u/s 36 (1) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o allowed. 15. Ground No.6 is as under: "6. The ld. CIT (A) has erred in confirming the disallowance of Rs.16,25,518/- being expenditure on Gas day and Diwali festival treating it as non-business expenditure. Your appellant submits that it is business expenditure represents the expenditure incurred on sweets distribute to the staff members on the occassioin of Diwali Festival and the expenditure incurred on GAS DAY - 5th September - every year when pooja was done followed by lunch to the employees. It be so held now." 16. It is submitted by the learned AR in the chart that this issue is also covered by the Tribunal decision in favour of the assessee for the assessment years 1993-94 and 2000-01. He has also submitted that the relevant pages of the paper book are 63 and 86. The learned DR supported the order of the learned CIT(A). 17. We have considered the rival submissions. We find that in the assessment year 2000-01, this issue was decided by the Tribunal in favour of the Assessee by following earlier Tribunal decision in assessee's own case for the assessment year 1993-94. Respectfully following the precedence, this issue is decided in favour of the asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....age 44 of the Tribunal decision, we find that in that year, a Joint Venture Agreement was signed by assessee and Bharat Petroleum Corporation Ltd. (BPCL) for forming a Joint Venture Company in the name of Petroleum Infrastructure Ltd. (PIL). It is also noted that each of the participating company took up 50% of initial paid up equity capital of Rs.1500 lacs. In addition to this, the assessee has given Rs.290 lacs to PIL for the purpose of doing business and also Rs.14,40,547/- to meet the expenditure of the business. That company i.e. PIL also gone into winding up and this amount of Rs.290 lacs and Rs.14.40 lacs given by the assessee to PIL was written off and this issue was decided by the Tribunal in favour of the assessee. This goes to show that the issue involved in that year was not regarding diminution in the value of investment in equity shares of PIL because that amount is separate being 50% of initial paid up capital of Rs.1500 lacs. The amount in dispute in that year of Rs.290 lacs and Rs.14.40 lacs is not on account of investment in shares and, therefore, this Tribunal decision is not applicable in the present year because in the present year, dispute is regarding writing....
X X X X Extracts X X X X
X X X X Extracts X X X X
....has been offered to tax in the relevant year or in an earlier year. He also submitted that in earlier year, provision of bad debts was made but the same was not allowed in the earlier year. He further submitted that the matter may be restored back to the file of the AO for fresh decision after examining the factual aspects. The learned DR supported the order of the learned CIT(A). 24. We have considered the rival submissions. We feel it proper that this issue should go back to the file of the AO for fresh decision after examining the factual aspects as to whether the debt in question was actually written off by the assessee or not in the present year in its books of accounts. The AO should also examine the claim of the assessee that the conditions of section 36(2) of the Act are being complied with by the assessee. Then, he should decide the issue in the light of the judgment of the Hon'ble Supreme Court rendered in the case of T.R.F. Ltd. Vs CIT 323 ITR 397 (SC) after providing reasonable opportunity of being heard to the assessee. This ground is allowed for statistical purposes. 25. Ground No.9 is as under: "9. The ld. CIT(A) erred in confirming the order of....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... sale cum lease back agreement and it was found in that case by the Hon'ble Rajasthan High Court that the Tribunal has rightly appreciated the facts and correctly found the transaction to be genuine. It is also noted by the Hon'ble Gujarat High Court in that judgment that the lease rental paid by RSEB which has been found by the Hon'ble Rajasthan High Court as allowable deduction because the transaction was found to be genuine and correspondingly, in the hands of this assessee, the said lease rental has been taxed as business income and the same has not been disputed by the AO in spite of initiating proceedings u/s 147 of the Act for treating the transaction as a non-genuine transaction. Under these facts, it was held by the Hon'ble Gujarat High Court that the decision of the Tribunal for allowing depreciation on such assets is on proper appreciation of evidences on record and no substantial question of law has arisen. In the present year also, the dispute is regarding depreciation in respect of assets leased to RSEB and no difference in facts could be pointed out by the learned DR and hence, by respectfully following the decision of the Hon'ble Jurisdictional Gujarat High Court re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that the liability in question has crystallized in the present year and, therefore, the same should be allowed in the present year. Therefore, this ground is also allowed. 31. Ground No.11 is as under: "11. The ld. CIT (A) erred in confirming the order of AO as regards disallowance of provision made for rent payable to GIDC at Rs.1,70,368/-. Your appellant submits that rent was not fixed by GIDC Authority and therefore, your appellant has made a provision on the basis of payment made to GIDC in other locations. Your appellant further submits that in subsequent assessment year 2001-02, the excess provision made has been credited and offered for tax. Therefore, the ld. CIT(A) is not justified in confirming the disallowance made by the Assessing Officer. It is submitted that it be so held now." 32. It is submitted by the learned AR that the details are available on page 156 of the paper book which includes some amounts related to the present year also being Rs.43,87,752/- and Rs.1,03,272/-. At this juncture, it was pointed out by the Bench that on page 148 and 149 of the paper book is a letter issued by Shri B. Digar to Shri Jagdish Mehta, Company Secretary in re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....this issue was decided by the learned CIT(A) in Para 5 and 6 of his order in the penalty proceedings and for the sake of ready reference, the same are reproduced below: "5. Now I shall advert to the legal aspects put forth by the learned counsel for the appellant. It was vehemently argued that a hard penalty u/s 271 (1) (c) cannot be levied in their case as the matters under consideration were fully disclosed in the statement of income. The learned counsel was at pains to draw my attention to the decisions of Hon'ble Gujarat High Court in the case of CIT v. Jalaram Oil Mills (253 ITR 192 (Guj) and National Textiles v. CIT 249 ITR 125 (Guj) to the effect that there must be a material to prove that the appellant had concealed particulars which represented income in the first instance and that it was not enough for the purpose of penalty that the amount has been assessed as income. Also there must be "animus" i.e. conscious concealment or an act of furnishing inaccurate particulars on the part of the appellant. The appellant also relied on the decision of Mumbai ITAT in the case of Vidyut Metals Ltd. reported at 116 Taxman 275 (Mumbai), holding that the disallowance ma....