TaxTMI 
TaxTMI 
2020 (10) TMI 1125
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.... 1.1 That on facts and circumstances of the case and in law, the CIT(A) erred in holding that the activities undertaken by the appellant at its customer terminals did not constitute "manufacture or production of any article or thing", so as to be eligible for deduction under sections 801 and 80IA of the Act. 1.2 That on the facts and circumstances of the case and in law, the CIT (A) erred in not appreciating that the various activities/ processes undertaken by the appellant, including removal of impurities, condensate and moisture and for regulating temperature and pressure at various customer terminals, as part of mandatory contractual obligations, in order to render lean gas in usable state and tradable condition, constituted "manufacture"/ "production" of processed "Lean Gas". 1.3 That on the facts and circumstances of the case and in law, the CIT(A) erred in holding that the aforesaid activities undertaken by the appellant at customer terminals were merely "a cleansing process", which could not be regarded as "manufacture or production of any article or thing". 2. That on the facts and circumstances of the case and in law, the CIT (A) erred in holdi....
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.... customer outstanding is eligible for benefits of section 80I/80IA and 80HH. 4. On the facts and in the circumstances of the case and in law, the Ld CIT(A) has erred in allowing the claim of horticulture expenses of Rs. 85,21,221/- holding the same to be a business requirement and revenue expenditure. 5. On the facts and in the circumstances of the case in law, the Ld CIT(A) has erred in allowing the claim of deferred revenue expenditure of Rs. 72,000/- holding the same to be a revenue expenditure. 6. The appellant crave leave to add to, alter, amend or vary from the above grounds of appeal at or before the time of hearing." 3. The assessee is engaged in business of production/processing transmission and distribution of various gases. The assessee set up and operates gas pipeline (around 2702 Kms) running/located in north western India, known as 'HBJ' pipeline which runs from Hazira through Vijaipur (MP) to Jagdishpur. The assessee acquires rich natural gas at Hazira which is transmitted to its 2 LPG plants located at Vaghodia (Gujarat) and Vijaipur (MP) and various customer terminals. The assessee claimed deduction under Sections 80HH, 80I and 80IA of....
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....h natural gas is transmitted to the LPG plants and the Customer Stations, where "rich natural gas" undergoes change in chemical composition, resulting in the production of two gases, viz. "LPG gas" and "lean gas", both of which are commercially known as separate and distinct gas, different from the natural gas. As part of its business model, following two products are manufactured/ produced: Liquefied petroleum gas (LPG) is manufactured/ produced at Vaghodia and Vijaipur, which is capable of being commercially used in the form in which it is emitted out of the production plants and is therefore sold directly to the oil marketing companies. "Lean gas" is manufactured/ produced and delivered to the customers at various Customer Terminals (14 No. during the relevant year) located along the HBJ gas pipeline. The Ld. AR pointed out that "Lean Gas" is produced only when the natural gas undergoes various intricate scientific processes before it can be commercially used. Apart from the above, the Ld. AR further pointed out that processed rich natural gas, after processing from its crude form, is also transmitted through the HBJ pipeline and other pipelines to some of the customer terminals....
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....n is admissible for specified years, as a consequence of the order of the CIT(A), deduction in respect of profits derived from processed Lean Gas shall be considered from the year of setting up of the LPG Plant and not the relevant customer terminal at which such processed Lean Gas is supplied to the customer. The Ld. AR submitted that various Activities amounts to "production or manufacture of article or thing". In this regard, the Ld. AR submitted that 'Natural Gas' is a mixture of gaseous hydrocarbons with accompanying condensate and varying quantities of non- hydrocarbons, commonly known as impurities. Natural gas is composed mainly of Methane (Cl), Ethane (C2), Propane (C3), Butane (C4) and Pentane (C5). The natural gas is processed at various Compression Stations, the LPG plants at Vijaipur and Vaghodia and also at various Customer Terminals. The final product that is produced is in the form of the following two gases, have chemical composition different from rich natural gas, as under: a) Liquefied petroleum gas (LPG) which consists primarily of propane (C3) and butane (C4); and, b) Lean gas which is constituted primarily of methane (Cl) and ethane (C2)....
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....lean gas is required by the customer is precisely spelt out. The Ld. AR submitted that "'typical analysis of natural gas", which is the composition in terms of the mole percentage of different elements therein varies from customer to customer. A comparison of Annexure 2 of the Gas Supply Contract between the assessee and National Thermal Powers Corporation Ltd. - Kawas and Annexure-2 of the Gas Supply Contract between assessee and NTPC - Auraiya supports the submission. The Ld. AR submitted that Lean Gas, as received from the LPG Plant is required to be further processed, as per the specification of the customers, in order to deliver the same in it fit to use form. Thus, the Ld. AR submitted that the assessee is required to undertake various scientific processes/ activities in order to produce and render the "Lean Gas" in a marketable form, i.e. in a form and state in which such gas would be accepted by the end customers and therefore, the contention of the CIT(A) that production of Lean Gas takes place at the LPG plant is erroneous. Apart from the aforesaid, the Ld. AR submitted that at certain customer terminals, processed natural gas, after being received in crude form from ....
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....ct the pipeline) but to fulfill the contractual obligations undertaken by the assessee so as to deliver gas in a marketable / exploitable state and form to the customers. The Ld. AR further submitted that though in para 7 and 8 of the CIT(A)'s order, the CIT(A) accepted the aforesaid substantial activities undertaken and also agreed that the activities are necessary to commercially sale lean gas, the CIT(A), however, still concluded that input and output at customer terminal continues to be lean gas and consequently, the process does not bring into existence new commercial product. The fallacy in the conclusion of the CIT(A) that deduction is available only at the stage of LPG plant, despite accepting that the "Lean Gas" is manufactured/ produced from "Natural Gas", is, it is submitted that there are certain customer terminals, which are not routed through the LPG Plants. These are customer terminals which draw "Natural Gas" from other gas-fields, processes the same so as to make it marketable and usable and sells the "processed Gas" manufactured from "Natural Gas" to the customers. Also there is a customer terminal located prior to the LPG plant i.e., HBJ terminal (source point), ....
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....: 204 ITR 412 (SC) Aspinwall & Co. Ltd. V. CIT: 251 ITR 323 (SC) CST vs. Jagannnath Cotton Company: 99 STC 83, 86 (SC) CIT vs. Sesa Goa Ltd.: 279 ITR 331 (SC) India Cine Agency v. CIT: 308 ITR 98 (SC) ITO v. Arihant Tiles and Marbles (P) Ltd.: 320 ITR 79 (SC) Ship Scrap Traders v. CIT: 251 ITR 806 (Bom) Orient Longman Ltd V. ITO: 130 ITR 477 (Del.) CIT V. Ajay Printery (P) Ltd: 58 ITR 811 (Guj.) Applying the aforesaid principle in the assessee's case, the Ld. AR submitted that the assessee could not have commercially sold "Lean gas" and Processed Natural Gas, without carrying out the above mentioned activities at various stages, including but not limited to at the Customer Terminals. 11. The Ld. AR further submitted that deduction allowed in earlier years cannot be denied in subsequent years. The Ld. AR further submitted that since deduction under section 80IA of the Act w.r.t. profit derived from eligible units has been allowed by Revenue till assessment year 1995-96, the same cannot be denied subsequently. The Ld. AR made reference to the decision of the CIT(A) in the assessee's own case for the assessm....
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.... of the Assessing Officer and the findings of the CIT(A) in original appeal order and proceeded to arrive at different conclusion on the same set of facts without giving any reason in the order for the difference from earlier order of the earlier CIT(A). Therefore, the order of the CIT(A) is perverse on facts as well as on law. 14. As regards to deduction claimed under Sections 80IA/80I/80HH on transportation of natural gas, the Ld. DR submitted that prior to the year 1990-91, natural gas was produced, marketed and transported by ONGC. Subsequently, gas marketing functions were transferred from ONGC to GAIL as per MOU dated 27.12.1991 entered into between ONGC and GAIL. In 1992, GAIL took over the on-shore pipeline system from ONGC for supply of gas in Gujarat region. This consisted of the pipelines and the terminal stations. The gas to this system was being supplied from the on-shore gas fields of ONGC. Along with the pipelines, the existing customers of ONGC were also transferred to GAIL. The Ld. DR relied upon the MOU between ONGC and GAIL. 15. The Ld. DR submitted that the assessee took over only the gas marketing function from ONGC. It was never intended to enter into ga....
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....e charged separately in the bill. Essentially, what remained with the assessee was only 'transportation charges' in respect of supply of gas to customers. It is mentioned by the Assessing Officer in the last para on page 8 of the assessment order that - "Even in the sale contract entered into by GAIL with its buyers, the calculation of transportation charges are separately given. For example, in the contract between GAIL and IOC dated 12.04.1996, following are mentioned in para 4.3 - "The buyer, in addition to the price of gas mentioned in Article 10, shall pay the seller (GAIL) monthly transportation/service charges and taxes thereon for spur line and facilities provided from tap off." The Assessing Officer relied on the order of the Hon'ble Supreme Court in the case of Cambay Electric Supply Industrial Company Ltd. (113 ITR 84 (SC)) in respect of meaning of 'derived'. In fact, the assessee was subjected to TDS @ 2% u/s 194C also over the transportation charges by its customers. In this regards, reference is invited to page no. 1 to 5 of Revenue's paper book submitted on 03.05.2019 which are copy of TDS certificates issued by GVK Industries Ltd. and Indian Oil....
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....a) Gas Sweetening b) Gas Dehydration c) Gas Chilling The schematic diagram of natural gas, after processing by ONGC at its Hazira Complex is supplied to GAIL. The said sweetened and purified gas is fit for use by the customers of GAIL and that was the requirement as per the agreements entered into between GAIL and its customers. Further, Sh. S. P. Rao, Director(Projects), GAIL has also accepted this fact in his sworn statement recorded under section 131 on 21.12.1999. Sh. S. P. Rao in response to question no. 7 answered that sulphur content would not only corrode the gas pipeline and associated equipment but would also corrode the plant & machinery of the downstream buyers of the gas. In this context, the Ld. DR submitted that sulphur is removed from natural gas by ONGC before supplying it to GAIL. This sweetening is done by ONGC and not by GAIL. This sweetening gas is fit for use by the customers of the assessee. In fact, the same 'sweetening gas' was being supplied by ONGC to the existing customers, which subsequently became customers of the assessee subsequently. In the case of the assessee, what its customers require is 'natural gas' as produced in its natu....
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....ed out that the customer requires composition of main gas methane not less than 75%. As per the analysis of natural gas before gas sweetening given by the ONGC, in the said analysis compositions of methane is ranging from 79.76% to 80.90%. From the analysis of natural gas supplied by ONGC to GAIL, it can be seen that composition of methane (C1) is ranging from 81.30 to 81.94%. Therefore, the gas supplied by ONGC was having volume of methane much higher than the volume of methane of 75% required by the customers of the assessee. In respect of other hydrocarbons, total sulphur content and non-cumbustible gases other than hydrocarbons including Nitrogen Carbon-dioxide also, the gas supplied by ONGC to GAIL was meeting all the specifications of the customers, as evidenced from the paper book filed by the Revenue. Similar specification of composition of natural gas is there in other agreements also. The said fact was also accepted by the assessee. The Ld. DR pointed out that LPG plants of the assessee are at Vaghodia in Gujarat and Vijaypur in M.P. Further, gas is supplied to downstream customers, and that gas is the 'sweetened gas' received from ONGC, before the gas reaches at Vaghodia....
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.... different chemical properties, the Assessing Officer has rightly allowed the claim of deduction u/s 80IA to the assessee on LPG Plants. The finding of the CIT(A) that deduction u/s 80IA has to be given at the point of manufacture of 'lean gas' is incorrect. In fact, what is happening at Vaghodia and Vijaypur LPG plants is manufacturing of LPG. The assessee as a user of natural gas, receives sweetened natural gas from ONGC and extracts C3-C4 (Propane - Butane) to produce LPG. First, LPG is produced at Vahodia, Gujarat after gas reaches its terminal from Hazira. After extraction of C3-C4, the remaining gas flows back to HBJ pipeline. It is imperative to appreciate that the assessee manufactures LPG and after extraction of C3-C4 from the natural gas, the residue natural gas is termed as 'lean gas'. The LPG plant of the assessee is not meant for manufacture of lean gas. The lean gas is not required for the customers also. The residue natural gas, which still meets the requirement of specific composition of natural gas of the customers, flows back to the pipeline and is supplied to downstream customers. Again at Vijaypur, remaining C3-C4 present in natural gas is extracted to manufactu....
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....assessee during the remand/appellate proceeding and the assessee has not been able to explain this fact satisfactorily and continued to distort the fact. The assessee is using the 'natural gas' at its LPG Plants, and composite revenue/profit has been shown in P & L account, the Assessing Officer has estimated 40% of its profits towards manufacture of LPG in which deduction u/s 80IA has been allowed by the Assessing Officer. The Assessing Officer has estimated 60% of its profits towards transportation business on which 80IA is not admissible. 17. The Ld. DR further submitted that as regards the claim of deduction in respect of customer terminals, the natural gas, after sweetening, removal of sulphur and chilling at Hazira by ONGC, is received by GAIL and the said gas is supplied by the assessee to its customers. Most of the customers were existing Customers of ONGC. The natural gas to be supplied by GAIL to its customers was required to be containing 75% of methane by volume including hydrocarbons, impurities which is there in the natural gas received by GAIL from ONGC. Further, the price of the gas received by GAIL is to be transmitted to ONGC. Hence, there was no requirement of....
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....ransmitted through the pipeline for supplying to down-stream consumers. Once the natural gas is pressurized, its temperature rises. So, the compressor stations are the requirement of the gas transportation business of the assessee and is not related to any production or manufacturing. During the transportation of gas through the pipeline, the gas may be cooled due to low sub-soil temperature which may result in the formation of hydrocarbon condensate and water. Moreover, the pipeline systems at some sections after compressing may still contain dirt, dust etc. Therefore, pigging, pig launcher & receiver, scrubber, filtration instruments are installed to remove the condensate, dirt etc. which is caused due to transportation for a long distance. Reduction in pressure of natural gas is associated with a drop in the temperature and this drop-in temperature would take gas temperature below its deep point which would lead to formation of condensate. In order to avoid the same, the gas is heated before pressure reduction takes place so that no condensate is formed. Therefore, gas heaters are required in the gas transportation system. In order to regulate gas pressure, a pressure control va....
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....arious points compressor stations have been located and LPG and Propane Pantene extracting plants have also been located. At the point at which natural gas is supplied to the assessee's clients, terminal stations have been located. The assessee has broken up the pipeline system into various unit such as IPCI, GSFC, IOC, GGCI etc. The break up has been made on the basis of tap off from the main HBJ pipeline to the various clients. There are some clients which are situated on the main HBJ pipeline. For clients who are situated off the main HBJ pipeline, tap-off have been made. These tap-offs are simply off shoots from the main HBJ pipeline. It is these tap-offs which the assessee is claiming as separate units. In the computation of income, the assessee has computed the profits unitwise. This computation has been made by taking the gross sales, client/tap-off vice, and then reducing the expenses relevant to each tap-off, and the depreciation, of the plant & machinery capitalized, for each tap-off. However, bulk of the expenses and depreciation are debited to the HBJ unit. The question which now arises is, would any of the units be in a position to function without the main HBJ pipelin....
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....e for deduction u/s 80IA/80HH. Same way a transporter has to unload goods from a big lorry to small lorry depending on the area of approach road. The loading and unloading are part of the work of transporter. The assessee is transporter of gas and in the process of transportation it has installed terminal stations and compressor stations for smooth transportation of gas at the delivery points. Considering the above facts, the claim of deduction u/s 80HH/80I/80IA in respect of compressor units and terminal stations is not admissible. 18. The Ld. DR relied upon the following case laws: i) ARB Inc. vs. JCIT (2005) 93 ITD 520 (Del Tri) ii) Idandas vs. Anant Ramcharanara Phadke AIR 1982 SC 127 iii) CIT vs. Sri Meenakshi Asphalt (2004) 266 ITR 630 (Mad.) iv) CIT vs. Gem India Manufacturing Co. (2001) 249 ITR 308 (SC) v) CIT vs. Gitwako Farms (I) P. Ltd. 332 ITR 471 (Del) vi) Dy. CST (Law) vs. Pio Foods Pacure (1980) 46 STC 63 (SC) vii) CIT vs. S.K. Transformers (P) Ltd. (2014) 45 taxmann.com 171(Allh.) viii) CIT vs. Sterling Foods (1999) 104 taxman 204 (SC) ix) Indian Hotels Co. Ltd. vs. ITO 112 Taxman 46....
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.... In fact, till A.Y. 1992-93, no claim of deduction was made due to inadequacy of eligible profits. The CIT(A) noted that the Assessing Officer re- opened the assessments of A.Ys. 1992-93 and 1993-94 under Section 147 of the Act disallowing the claim of deduction holding that the assessee was not engaged in manufacturing. The said reopening was set aside by the Tribunal with specific directions. Further, in A.Y. 1994-95 and 1995-96, deduction u/s 80HH, 80I & 80IA was disallowed on the ground that after adjustment of brought forward losses, the assessee was not having any taxable income. In the said two Assessment Years dispute was with respect to set off of losses from eligible units u/s 80IA vis-à-vis profits from eligible units. In view of the provisions of Sec. 80AB, the said deductions were disallowed. The department filed the appeal before the Tribunal, fate of which was not yet known. In view of the above, the claim of the assessee regarding allowing deduction in earlier years by the Revenue is not based on correct facts. The issue has been raised by the Revenue in earlier years and deduction u/s 80HH/80I/80IA was disallowed. In the instant case, allowability of deducti....
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....e and not applicable in the instant case. The decision of CIT vs. Escort Ltd. 338 ITR was distinguished by the Hon'ble Delhi High Court in the case of Thomoson Press (India) Ltd. (2015) 379 ITR 222 (Del). The decision in the case of CIT vs. Tata Communication Ltd. 251 CTR 290 (Del) was in respect of splitting up or reconstruction of business and the facts are not relevant in this case. In the case of CIT vs. Gitwako Farma (I) Ltd. 332 ITR 471 (Del), the Hon'ble Delhi High Court considered the case of Radha Soami Satsang vs. CIT (1992) 193 ITR 321 (SC). The Hon'ble Court held that since each year assessment is independent of the previous year, there was no bar against the revenue to examine the case of the assessee from the legal perspective. In the instant case also, the matter is not confined to the factual matrix but on the legal issues concerning the claim made u/s 80IA/80I/80HH. The Ld. DR also tried to distinguish the following decisions: i) Samrudhi India Ltd. vs. JCIT (2011) 12 taxamnn.com 231 (Pune) ii) Krishak Bharati Corporation Ltd. vs. DCIT (2012) 23 taxmann.com 265 iii) Rohitasava Chand vs. CIT (2008) 306 ITR 242 (Del) iv) Anup Sharm....
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.... any substantial reasons or evidence on record. Thus, the claim of deduction made by the assessee under section 80I/80IA/ 80HH are genuine in this year as well. Ground No. Ground No. 1 and 2 of the assessee's appeal are allowed and Ground No. 1 and 2 of revenue's appeal are dismissed. 22. As regards to Ground No. 3 of assessee's appeal and revenue's appeal relating to interest income eligible for deduction under Section 80IA, 80I and 80HH, the Ld. AR submitted that interest income of Rs. 18711.37 lacs comprised of following components: i. Interest on fixed deposits, bonds and inter-corporate deposits ii. Interest on employees loans and advances iii. Interest on customer outstanding Miscellaneous Income of Rs. 926.70 lacs is derived from eligible undertaking as it comprises of income from sale of scrap, recovery from employees for electricity and water charges, other miscellaneous recoveries from contractors, etc. The CIT(A) held that deduction is admissible in respect of interest on customer outstanding. In respect of interest on fixed deposits, the Ld. AR submitted that the Assessing Officer should be directed to allow deduction in respect of inter....
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....essee by following decisions of High Court: i. CIT vs. Jacksons Engineering 341 ITR 518 (Del HC) ii. CIT vs. Advance Detergents Ltd. & Bharat Rasayan Ltd. 339 ITR 81 (Del) iii. CIT vs. Vidyut Corpn. 324 ITR 221 (Bom.) As regards to miscellaneous income, the Ld. AR submitted that miscellaneous income were inextricably linked to and have first degree nexus with the profits and gains of the eligible undertaking and the same were eligible for deduction. The Ld. AR relied upon the following decisions: i. CIT vs. Sadhu Forging Ltd. 336 ITR 444 (Del HC) ii. CIT vs. Arvind Constructions 172 Taxman 5 (Del) iii. Fenner (India) Ltd. vs. CIT 241 ITR 803 (Mad) iv. CIT vs. Meghalaya Steels Ltd. 383 ITR 217 (SC) v. CIT vs. Indo Swiss Jewels Ltd. 284 ITR 389 (Bom) vi. DLF Power Limited in ITA No. 1195/Del/2002 (Del) vii. Asia Investments Ltd. vs. DCIT 90 ITD 630 (Mum) - Sale of scrap viii. ACIT vs. Maxcare Laboratories Ltd. 92 ITD 11 (Cuttack) Sale of scrap ix. ACIT vs. Biotech Medicals (P) Ltd. 310 ITR (AT) 47 (Hyd) Sale of scrap x. ITO vs. Kiran Enterprises 92 TTJ 104 (Chd.) ....
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....009) 317 ITR 218 (SC) ii. CIT vs. Ritesh Industries Ltd. (2005) 142 Taxman 551 (Del.) iii. CIT vs. Sterling Foods (1999) 104 Taxman 204 (SC) iv. Cambay Electrical Supply In. Co. Ltd. vs. CIT 113 ITR 673 (SC) v. India Commet International vs. ITO (2013) 354 ITR 673 (SC) vi. CIT vs. Menon Impex (P.) Ltd. 259 ITR 403 (Madras) vii. CIT vs. Nagesh Knitware Ltd. (2012) 345 ITR 135 (Del.) viii. Essar Power Ltd. vs. Addl. CIT (2013) 32 taxmann.com 346 (Mum. Tri.) 17. As regards to Interest on employee loans and advances, the Ld. DR submitted that the first degree of source of interest income is from loans given to employees and is not derived from industrial undertaking. Hence, the ratio of Liberty India (supra) read with Sterling Foods (supra) is squarely applicable. Further, reliance is placed on the decision of Essar Power Ltd. vs. Addl. CIT (2013) 32 taxmann.com 346 (Mum. Tri.) wherein it has been held by the Tribunal that the assessee is not entitled to the deduction u/s 80IA of the Act on the interest on employees loan and advances, interest on margin money and interest income dues towards income tax refund adjustment ....
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....zed and balance interest income of Rs. 18690.31 lacs and balance miscellaneous income of Rs. 756.69 lacs was credited to the P&L account. The aforesaid issue of capitalization has been decided in favour of the assessee by the Tribunal in assessee's own case vide order dated 22.01.2010 for the A.Y. 1997-98. The Tribunal followed the decision of the Hon'ble Supreme Court in case of CIT vs. Bokaro Steel 236 ITR 315 and Karnal Cooperative Sugar Mills 243 ITR 2. The Ld. AR further submitted that the CIT(A) should have directed the Assessing Officer to reduce the aforesaid interest and miscellaneous income capitalized while excluding the same from the eligible profits. 19. The Ld. DR relied upon the Assessment Order and the order of the CIT(A). 20. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that out of interest income of Rs. 18711.37 lacs and miscellaneous income of Rs. 926.70 lacs, interest of 21.06 lacs and miscellaneous income of Rs. 170.01 lacs are reduced from income and transferred to IEDC a/c and capitalized and balance interest income of Rs. 18690.31 lacs and balance miscellaneous income of Rs. 756.69 la....
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....t such business activities, the assessee requires various regulatory approvals including environmental clearances. Further, being a Government company, the assessee is bound to follow policies which are floated by the Government from time to time. In terms of the applicable pollution control laws, it is mandatory for the assessee company to expend certain amount each year on horticulture, i.e., plantation of trees and other activities in order to minimize environmental hazards, before the relevant authorities accord various environmental clearances to the assessee. The Ld. AR further pointed out that unless the assessee has, in fact, incurred expenditure on horticulture, the assessee would not be able to obtain the expenditure is a pre-condition for carrying on of business and is thus expenditure incurred wholly and exclusively for the purposes of the business. The Ld. AR made reference of the approvals granted by various regulatory authorities as follows: a) Officer Memorandum dated 30.03.1992 issued by Ministry of Environment and Forests for setting up of UP Petroleum Complex b) Letter dated 29.04.1992 written by the Assistant Inspector General of Forests to the....
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.... liable to deduction under Section 37(1) of the Act. The Ld. AR relied upon the following decisions: i. Sri Venkata Satyanarayana Rice Mill vs. CIT 223 ITR 101 (SC) ii. CIT vs. D.T.T.D.C. Ltd. 350 ITR 1 (Del.) iii. CIT vs. Madras Refineries Ltd. 266 ITR 170 (Mad.) iv. CIT vs. India Radiator Ltd. 236 ITR 719 (Mad.) v. Gujarat Guardian Ltd. vs. DCIT ITA No. 3214/Del/2013 (Del. ITAT) vi. Airport Authority of India vs. CIT 340 ITR 407 (Del HC) 26. We have heard both the parties and perused all the relevant material available on record. The horticulture expenses on planting of trees, maintenance of lawns and areas in the close vicinity of the offices/ plants of the assessee in accordance with the mandate of the Government and the assessee has to comply with the government regulations for environmental cause. Thus, the CIT(A) has given a categorical finding while allowing these expenses. Ground No. 4 of Revenue's appeal is dismissed. 27. As regards to Ground No. 5 of the revenue's appeal relating to deferred revenue expenditure, the Ld. DR submitted that the CIT(A) erred in allowing the said expenditure. 28. The Ld. AR submit....