TaxTMI 
TaxTMI 
2012 (3) TMI 658
X X X X Extracts X X X X
X X X X Extracts X X X X
....Ground of Appeal No. 1 reads as under: 1. On the facts and in the circumstances of the case, and n law the ld CIT(A) erred in: a. On facts and in the circumstances of the case and in law, the learned CIT(A) erred in upholding the action the AO in denying the set-off of loss of the amalgamating company viz. Finoram Sheets Ltd. (FSL) for the assessment year 1998-99 against the taxable income of the appellant company for the very same assessment year under appeal. b. Further, on the facts and in the circumstances of the case and in law, the learned CIT(A) erred is not recognizing and respecting the sanctity of theorder passed by the Hon. Bombay High court approving the amalgamation of FSL with the appellant company and further concluding that, fixing the date of amalgamation with effect from 1.4.1997 was merely a colorable device disregarding the fact that the entire scheme of amalgamation was approved by the High Court in terms of section 391 and 394 of the Companies Act, 1956, which provisions enjoin the Court to take into account, among others, public interest before the Scheme of Amalgamation is sanctioned." The dispute in Ground No. 1 revolves around....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ders of the assessee company on 18.1.1999. Subsequently, on 23.2.1999 a petition for sanction of the scheme was filed by FSL before the Hon'ble Bombay High Court. Similarly, on 23.2.1999 petition of the assessee company was also made before the Hon'ble Bombay High Court for sanction of the proposed scheme of amalgamation of FSL with the assessee company. The Hon'ble Bombay High Court vide its order dated 11.1.2000 sanctioned the arrangement in the scheme of amalgamation whereby FSL amalgamated with the assessee company with effect from 1.4.1997. In terms of the said order the entire undertaking and business of FSL stood transferred and vested in the assessee company pursuant to the provisions of 394 of the Companies Act, 1956. Subsequent to the said sanction by the Hon'ble High Court the assessee filed revised returns for the assessment years 1998-99 and 19992000 incorporating therein the losses of FSL which were hitherto declared by FSL in its respective returns of income. This claim of set-off of losses has been denied by the Assessing Officer for the following reasons- that the claim for the losses is based on the fact that the amalgamation is with effect from 1.4.1997 (i.e. the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y High Court in terms of sections 391 to 394 of the Companies Act, 1956. In this connection, the case of the Revenue is that it is entitled to do so in terms of the judgment of the Hon'ble Supreme Court the case of Marshal Sons & Co. (India) Ltd 326 ITR 809 (SC) and keeping in mind the ratio of the judgment of the Hon'ble Supreme Court in the case of Mc Dowell & Co. (supra). 6. Before we proceed to address the aforesaid controversy, we may briefly touch upon the relevant provisions of the Companies Act, 1956 in terms of which the impugned amalgamation scheme has been carried out. Sections 391 to 394 of the Companies Act, 1956 provide the mode and manner of facilitating the schemes of arrangement, reconstruction and amalgamation of companies. Every application for the sanction of a compromise or arrangement proposed between a Company and any other person (including a scheme of amalgamation of any two or more companies), is to be made to the court in terms of section 391 of the Companies Act, 1956. Sub-section (1) of Section 394, inter alia, prescribes that where, inter alia, a Scheme of Amalgamation of any two or more companies involve that the whole or any part of the undertakin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rger has two crucial dates which are invariably stated and defined in the scheme of amalgamation, namely, 'Appointed date' and 'Effective date'. Whereas the former denotes the date on which the amalgamation takes place or in other words the property, assets and liabilities of the transferor company vests in and are transferred to the transferee company, the latter denotes the date on which the amalgamation/merger is completed in all respects after having gone through the formalities involved and the transferor company having been dissolved by the Registrar of Companies. The aforesaid two dates are critical in many respects and in so far as we are concerned, their relevance is to the assessment of income of the two companies involved in amalgamation. For the purposes of Income-tax, the 'Appointed date' is the relevant date and for the period falling after that date the two companies are liable to be assessed to income-tax as a single assessee and not as two assessees. The Hon'ble Bombay High Court in the case of CIT v Swastik Rubber Products Ltd. 140 ITR 304 (Bom) has held that the date of amalgamation for income-tax assessment purposes shall be the appointed date mentioned in the o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....proceedings are pending before the Court, both the amalgamating units, i.e. the transferor company and the transferee company may carry on business, as has happened in this case but normally provision is made for this aspect also in the scheme of amalgamation. In the scheme before us, cl. 6(b) does expressly provide that with effect from the transfer date, the transferor company (subsidiary company) shall be deemed to have carried on the business for and on behalf of the transferee company (holding company) with all attendant consequences. It is equally relevant to notice that the Courts have not only sanctioned the scheme in this case but have also not specified any other date as the date of transfer/amalgamation. In such a situation, it would not be reasonable to say that the scheme of amalgamation takes effect on and from the date of the order sanctioning the scheme. We are, therefore, of the opinion that the notices issued y the ITO (impugned in the writ petition) were not warranted in law. The business carried on by the transferor company (subsidiary company) should be deemed to have been carried on for and on behalf of the transferee company. This is the necessary and the log....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mbay who also submits to the Orders of the Court....................................THIS COURT DOTH HEREBY SANCTION the arrangement embodied in the scheme of Amalgamation of Finoram Sheets Limited, the Transferor Company with Finolex Cables Limited, the Transferee Company as set forth in Exhibit "A" to the Petition and also in the Schedule hereto AND THIS COURT DOTH HEREBY DECLARE the same to be binding on all the members of the Petitioner Company and the Transferee Company AND THIS COURT DOTH ORDER that with effect from the 1st day of April, 1997 (hereinafter called "the Appointed Date") the entire Undertaking and business of Finoram Sheets Limited including all the properties, assets, investments, claims, powers, authorities, allotments, approvals and consents, licences, registrations, contracts, engagements, arrangements, rights, title, interests, benefits, and advantages of whatsoever nature and where so ever situate belonging to or in the ownership power or possession and in the control of or vested in or granted in favour of or enjoyed by the Transferor Company...............................................all other interests arising to the Transferor Company (hereinafter ref....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he provisions of section 70 of the Act which speak of set- off of losses from one source against income from other sources under the same head of income. 8. In so far as the determination of the Appointed date or in other words, date of amalgamation/date of transfer as 1.4.1997 is concerned, there is no dispute that it corresponds to the scheme of amalgamation as approved by the Hon'ble High Court of Bombay. So, however, the claim of set off of loss of FSL made by the assessee in its revised return has been denied by the Assessing Officer, primarily for the reason that the specification of the date of amalgamation/date of transfer as 1.4.1997 in the scheme was a device to evade payment of tax. As per the Revenue, on considering such date, assessee company becomes entitled to set off of the losses for assessment years 1998-99 and 1999-2000 incurred by the transferor company, i.e. FSL against the positive income of the assessee company. As per the Revenue, the appointed date has been so fixed so as to enable the assessee company to take the benefit of set off of such losses of FSL, in terms of section 70 of the Act. The claim of the Revenue is that the process of amalgamation star....
X X X X Extracts X X X X
X X X X Extracts X X X X
....raordinary general meeting, creditors, Regional Director of Company Affairs representing Government of India and passing the test of 'public interest' as contained in section 394 of the Companies Act, 1956 and finally being approved by the Hon'ble High Court, could ever be construed as a colourable device for evasion of taxes. On this aspect, it has been vehemently contended by the assessee that the Assessing Officer was not empowered to raise the question of tax avoidance because the scheme of amalgamation has since been approved and sanctioned by the Hon'ble High Court in terms of Sections 391 to 394 of the Companies Act, 1956. It has been argued on behalf of the assessee that the provisions of the Companies Act, 1956 require giving notice of every application made by the parties under section 391 or 394 of the Companies Act 1956 to the Central Government and in this case also, the requisite notices have been issued to the Central Government. The Hon'ble High Court has taken note of the representations made by the Central Government and it is only after taking into consideration the same, the scheme of amalgamation has been sanctioned. Therefore, it is too late in the day for the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion was founded on commercial / economic considerations of business and that benefit of taxes, if any, was only incidental. In the subsequent paragraphs, we, therefore, proceed to examine the aforesaid proposition canvassed by the assessee. 12. In this connection, it is pointed out that FSL was promoted as a joint venture between the assessee company and M/s Paltough Ltd. Israel. FSL started commercial production in January, 1997 and for the financial years ending 31.3.1997, 31.3.1998 and 31.3.1999, it had incurred losses. FSL, as it emerges from the Directors' report for the Financial Year 1997-98 placed at page 110 of the Paper Book, did not get any further shareholding from the foreign collaborator, but instead the shareholding of the foreign collaborator was sold to the assessee company. It is pointed out that as on 31.3.1997, FSL became a fully owned subsidiary of the assessee company. It has been sought to be pointed out on behalf of the assessee that the majority of the losses suffered by FSL were indeed funded by the assessee, being its holding company, either in terms of shareholding or by way of unsecured loans and in this regard, reference was invited to the audited F....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ger would have two crucial dates, namely, the 'Appointed date' and 'Effective date'. Their import and relevance in the income-tax proceedings have already being discussed by us in the earlier paragraphs and same are nor being repeated for the sake of brevity. At this point it may only be appreciated that the 'Appointed date' can be understood as a date anterior to the formulation and presentation of amalgamation scheme to the Court as this is the date on which the transfer of the undertaking of the transferor company to the transferee company is stated to take place. The latter is a future date and is generally a date subsequent to the final order of the Court sanctioning the scheme of amalgamation and if one may refer to section 394(3) of the Companies Act, such date can be understood to be the date on which copy of the High Court's order sanctioning the amalgamation is filed with the Registrar of Companies. The difference between the two dates has indeed been also appreciated by the Hon'ble Supreme Court in the case of Marshal Sons & Co (India) Ltd (supra). The Hon'ble Supreme Court has noticed that even before applying to the Court under section 391(1) of the Companies Act, 1956....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t. Ltd. v Official Liquidator, Govt. of Karnataka (1992) 74 Comp. Cases 290 (Kar.). The Hon'ble Karnataka High Court was dealing with an application seeking sanction of a scheme of amalgamation and merger of the petitioner company with another company. In response to the notices issued under section 394A of the Companies Act, 1956, the Official Liquidator submitted in its report that there was a likelihood breach of the transferee company reducing its tax liability upon amalgamation and, therefore, affairs of the transferor company were said to be carried out in a manner prejudicial to its members or to the public interest and in this connection, reliance was placed on the decision of the Hon'ble Supreme Court in the case of McDowell & Co. (supra). On the aforesaid basis, the sanction of the scheme by the Hon'ble High Court was opposed by the Official Liquidator. In the background of such arguments, the Hon'ble High Court formulated thee tests which the Court would ordinarily pose to itself while sanctioning a scheme of amalgamation, in the following words: "When a scheme of compromise and/or arrangement is submitted to the court for its sanction, the court would ordina....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the date of amalgamation/date of transfer for the purposes of assessment of income. Thus, on this aspect we uphold the plea of the assessee to claim set off of loss of FSL for assessment year 1998-99 against the income of the assessee company because the two entities are liable to be assessed as a single unit from 1.4.1997 onwards. Therefore, on the basis of above discussion, we set aside the order of the commissioner of Income-tax 9Appeals) and direct the Assessing Officer to allow the claim of the assessee for set off of loss of FSL as claimed in its revised return filed on 31.3.2000. Thus, on this Ground, the assessee succeeds as above. 16. Ground No. 2 reads as follows: "2. a. The learned CIT(A) further erred in upholding the action of AO in assessing a sum of Rs. 72,81,912/- earned on sale of premises as income from business as against Appellant's contention that the same is properly chargeable to tax under the head "Capital Gains". b. Without the prejudice, the learned CIT(A) failed to take note of the appellant's contention in the alternative that the appellant converted capital asset or treated the capital asset as Stock-in-trade at the time of s....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., CIT V. British India Corporation 142 ITR 563 (All), V. Ramanathn V. CIT 51 ITR 640 (Mad), Raje J. Rameshwar Rao V. CIT 42 ITR 179 (SC), the Assessing Officer inferred that the activity of the assessee in dividing the land into plots and not selling in a single unit went to establish that assessee was carrying on business in real property and it was a business venture. As per the Assessing Officer the assessee had acquired a big chunk of land in up-market area where large amount of commercial and residential complexes were being built by various builders and soon after acquiring the land, it started constructing large number of flats and sold most of them in less than three years at an exorbitant price, which indicated high quality of construction and thus it earned huge profit on selling these flats. In the view of the Assessing Officer, the activity of the assessee was characteristic of a person carrying on the business of builder and developer of land. The Assessing Officer thus held that the surplus received on sale of flats was the trading income and taxable as profits and gains of business and not capital gains. The Assessing Officer did not accept the contention of the asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... "3.3. The submissions have been considered. To decide the issue, whether the receipt of surplus on sale of flats, one has to go behind what may appear to be obvious. For determining the true nature of transactions, the totality of the circumstances and facts of the case needs to be taken into consideration. The appellant acquired a large chunk of land in a prime upcoming area of Pune in auction made by It department in July 1994 for a sum of Rs. 69,42,746/- In a short period, the appellant engaged a contractor for construction of high costing flats meant for upper and rich strata people which is evident from the sale price of the flats. The very fact that in a very short period, the appellant went for construction of flats shows that the intention was not keeping the land as investments and selling it in the same for subsequently. There is not much merit in the contention that since the piece of land was large and not easily marketable according to cash needs of the company, it went for constructions of the apartments. It is not a case where a large plot of land was sold in smaller pieces. The company planned and went ahead in the same fashion as a builder in making flats. Merely....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tions. Therefore, considering all the facts and the totality of the case, I am in agreement with the conclusion of the AO that the surplus of Rs. 72,81,912/- arising from sale of flats is trading receipt of the appellant and assessable under the head profits and gains business. The appeal fails on this ground." Aggrieved with the decision of the Commissioner of Income-tax (Appeals), the assessee is in further appeal before us. 19. Before us, the learned Counsel for the assessee has reiterated the submissions raised before the lower authorities, which we have already adverted to, in the earlier part of this order. The only other argument raised before us is that the Commissioner of Income-tax (Appeals) has not properly appreciated the factual aspect of the matter for which our attention was invited to page 50 of the Paper Book. As per the learned Counsel, out of 20 flats constructed, 4 flats have been retained for assessee's own use and 9 flats have been sold to the outsiders during the year under consideration and further 2 flats have been sold in the subsequent year and 5 flats are remaining unsold. It was pointed out that certain flats have been retained by the assessee com....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ats constructed and even with regard to the balance of 5 flats which remain, there is no assertion that the same are kept for use for assessee's own purposes. We, therefore, are inclined to uphold the case made out by the lower authorities that assessee has worked upon the said piece of land and developed and constructed flats and sold them as a business activity and, therefore, profits thereon are liable to be assessed as business income and not as capital gains claimed by the assessee. Thus, on his Ground, assessee has to fail. 22. At the time of hearing before us, the learned Counsel for the assessee did not press Ground No. 2(b) and, therefore, the same is dismissed as not pressed. Resultantly, the Ground No. 2 is dismissed. 23. Ground No. 3 reads as follows: "3. The learned CIT(A) has further erred in upholding the disallowance of pro rata provision made for premium payable redemption of debentures in the amount of Rs. 3,71,08,236/-" The issue involved in this Ground relates to disallowance of provision made towards premium on redemption of debentures. The brief facts are that during the course of assessment proceedings, the Assessing Officer found that asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot possible to ascertain whether the entire expenditure had been incurred wholly and exclusively for the purpose of business. In this view of the matter, the Assessing Officer disallowed 50% of the amount debited for gifts etc. which resulted in disallowance of Rs. 12,28,150/-. In appeal before the Commissioner of Income-tax (Appeals), it was contended by the assessee that all such expenses were wholly and exclusively laid out for the purpose of business. The Commissioner of Income-tax (Appeals) noticed that similar disallowance was considered for the assessment year 1996-97 wherein the disallowance was restricted by his predecessor to Rs. 75,000/- and for the assessment year 1997-98 out of total expenditure of Rs. 17,84,515/- disallowance was restricted to Rs. 75,000/-. In view of this factual position, the Commissioner of Income-tax (Appeals) restricted the disallowance for the year under consideration to Rs. 1,00,000/-. Still not satisfied, assessee has come up in further appeal before us. 27. Before us, the learned Counsel submitted that the issue stands decided in favour of the assessee and against the Revenue by the decision of our coordinate Bench dated 30.3.2010 (supra) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g electrical and telephone cables and was not in the business of banking or money lending; the money was advanced as loans and non- receipt of the same was a capital loss, therefore it was not allowed as deduction under section 36(1)(vii) of the Act or as business expenditure. 30. In appeal, it was contended before the Commissioner of Income-tax (Appeals) that a part of the amount advanced to the very same concern was written off in assessment year 1997-98, which was not disallowed by the Assessing Officer. It was contended that the volume and the frequency of the total activity of investment of surplus funds of business in inter-corporate deposits were such that this activity had all the indicia of a business. Deposits had been placed to the order of Rs. 70 crores in assessment year 1995-96, Rs. 63 crores in assessment year 1996-97, Rs. 126 crores in assessment year 1997-98 and Rs. 200 crores in assessment year 1998-99. According to the assessee, the fact that these deposits were kept with various corporate entities instead of Banks was indicative of the risk associated with this activity. It was sought to be highlighted as to how the deposits were kept at frequent intervals fr....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and advances in the Balance Sheet of the assessee and not as stock-in-trade. The assessee does not maintain any separate books for loans given as ICDs nor there was any separate personnel to attend to the so called different businesses of the assessee. On the basis of the above facts, the Commissioner of Income-tax (Appeals) affirmed the action of the Assessing Officer and concluded as follows: "Therefore it is held that :- a. the applicant is not in the business of money lending. b. the loss of money lent was a capital loss. c. the loans given was not in the ordinary course of business of money lending d. the money lent was not a stock in trade of the appellant. It is held that the write off of bad debts of Rs. 1,98,74,921/- is not allowable as business loss u/s 28 or under sec. 36(1)(vii) r.w.s. 36(2) of the IT Act. The addition of Rs. 1,98,74,921/- is therefore confirmed." Against this order of the Commissioner of Income-tax (Appeals), assessee is in further appeal before us. 32. Before us, the learned Counsel for the assessee pointed out that both the authorities below have declined the claim of the assessee for....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ve, appearing for the Revenue, has defended the disallowance made by the Assessing Officer by placing reliance on the orders of the authorities below. The reasoning taken by the lower authorities have been reiterated before us which have already been adverted to by us in earlier part of this order and is not being repeated for the sake of brevity. 34. We have carefully considered the rival submissions. The dispute relates to an amount of Rs. 1,98,74,291/- written off by the assessee as irrecoverable from M/s Bangur Finance Ltd. Initially, assessee had advanced an ICD to Bangur Finance Ltd. on 5.8.1995 for a period of 6 months carrying an interest of 18% per annum. As a security against the advancing of ICD, assessee obtained advance cheques and pledge of certain shares belonging to the borrowing group. The assessee company accounted for interest on the said ICD and offered it for taxation in the assessment year 1996-97, which has been assessed as business income. It transpires that when the assessee deposited cheques of Principal and interest, the same were dis-honoured and thereafter, the company initiated steps to recover the monies outstanding. In the year under consideration....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the assessee-company that Clauses ancillary to the main Object empower the company to deal with monies not immediately required in the manner as deemed fit. In the present case, the case made out is on the basis of factual matrix of the past years that ICDs were given by the assessee to earn interest income thereon in a systematic and organized manner so as to be construed as an activity of business. Therefore, under these circumstances, we are in agreement with the assessee to say that ICDs have been given by the assessee in the course of its money lending activities which constitute business and, therefore, the stipulation of section 36(2)(i) of the Act that the amount of debt should have been offered as income is not applicable. In so-far-as irrecoverability of the impugned amount is concerned, it is quite evident from the material on record that the assessee has made out its case, and considering the entirety of facts, we, therefore, find it appropriate to allow the claim of the assessee for write-off of the impugned irrecoverable amount of ICDs as a deduction within the meaning of section 36(1)(vii) of the Act. 37. Before parting, we may deal with the objection of the low....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es 45,72,914 CIT(A) confirmed excess allocation to the extent of Rs. 5 lacs. IV Payment and provision for employees 30,00,000 CIT(A) confirmed excess allocation to the extent of Rs. 10 lacs. *Excess allocation by the AO. b. confirming excess allocation of personnel to the extent of Rs. 5 lacs while working relief u/s 80-IA for Pimpri Unit - II. c. Upholding the action of AO holding that income by way of interest of Rs. 20,71,51,909/- on deferred sales to DOT cannot be considered to be profit derived by the industrial undertaking in the content of allowing relief u/s 80IA". 41. Before us, the learned Counsel for the assessee submitted that similar issue was subject-matter of consideration before the Tribunal in assessee's own case for the assessment year 1997-98, and vide order dated 30.3.2010 (supra), our co-ordinate Bench has set aside the issues to the file of the Assessing Officer with certain directions. The learned Departmental Representative did not controvert the factual matrix. 42. In these circumstances, we follow the parity of reasoning given in the order of the Tribunal dated 30.3.2010 (supra) and set asid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sing Officer found that the loss on exchange fluctuation included net loss of Rs. 82,554/- on account of cancellation of power contracts for purchase of foreign exchange. The assessee was asked why the loss be not held as speculation loss in terms of section 43(5) of the Act. The assessee submitted that the entire loss was incurred for the purpose of business and it should be allowed as a business expenditure. The Assessing Officer observed that the same issue was also involved in assessment year 1996-97 and 1997-98 where it was held that the loss on cancellation (foreclosing) of foreign exchange contracts was speculation loss in terms of section 43(5) of the Act and the appeal of the assessee on this issue was dismissed by the Commissioner of Income-tax (Appeals). Against this view of the Assessing Officer, assessee filed appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) following the order of his predecessor for the 1996-97 held that the loss on account of cancellation of foreign exchange contracts was speculative loss and accordingly, the order of the AO disallowing the sum of Rs. 82,554/- was confirmed. Further aggrieved, assessee ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the Assessing Officer by holding as follows: "14.3 The submission have been considered. The AO has referred to Board Circular 621 dt. 19..2.1991 where the Board has clarified the amendment and provisions of Expln. (baa) and where it has been noted that the existing formula u/s 80HHC gave distorted figure of export profits when receipts by way of brokerage, commission, interest etc. which did not have element of turnover were included in the P&L account. Therefore Board clarified that 'profit of business ' for the purpose of sec 80HHC would not include receipts by way of brokerage commission interest rent charges or any other receipt of similar nature. Explanation (baa) provides an adhoc 10% concession in general for the reason that the part of common expenses might have been incurred on earning these incomes. The deduction u/s 80HHC is allowable out of business profit in the same proportion as export turnover is to the total turnover. These sums which have been considered buy the AO under Expln (baa) to sec. 80HHC are not appearing as part of the total turnover however they are part of the business profit. If these sums are included in the business profit but not in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tances of the case and in law, the ld CIT(A) erred in restricting disallowance of Rs. 1,00,000/- as against addition made of Rs. 11,28,150/-." This Ground is connected with Ground No. 4 of assessee's appeal vide ITA No.961/PN/02, wherein vide para 28 above, we have discussed and decided the issue in favour of the assessee and against the Revenue by following our co-ordinate Bench's decision dated 30.3.2010 in ITA No 1014PN2000. In view of this, this Ground of appeal of the Revenue is dismissed. 57. Ground Nos. 2 & 3 read as under: "2. On the facts and in the circumstances of the case and in law, the ld CIT(A) erred in directing to allow depreciation on leased asset of Rs. 16,81,087/- and in not appreciating the fact that the said claim was made not in the interest of commercial expediency but an attempt to unduly reduce tax liability. 3. On the facts and in the circumstances of the case and in law, the ld CIT(A) erred in allowing interest of Rs. 20,01,578/- for purchase of leased asset and not appreciating the fact that the transaction of leasing was not a bona fide but a device of tax avoidance. It is not allowable in view of the ratio of Supreme Court in t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....epartmental Representative has not disputed the above fact-situation. 61. Since the issue in this Ground has been a subject-matter of dispute in earlier year, and the same has been decided by the Tribunal in favour of the assessee since assessment year 1993-94 onwards, as noted in the order of the Tribunal dated 30.3.2010 (supra), following the precedent, we hereby affirm the order of the Commissioner of Income-tax (Appeals) and the Ground of appeal raised by the Revenue is dismissed. 62. Ground No. 5 reads as follows: "5. On the facts and in the circumstances of the case, and in law the ld CIT (A) erred in directing the AO to exclude sales tax and excise duty from the total turnover for the purpose of deduction u/s 80HHC." The issue involved in this Ground is with regard to treatment of Salestax and Excise duty as a part of total turnover for the purpose of calculating deduction u/s 80HHC of the Act. In view of the decision of the Hon'ble Bombay High Court in the case of Sudarshan Chemical Industries Ltd. 245 ITR 769 (Bom), the Commissioner of Income-tax (Appeals) directed the Assessing Officer to exclude Sales-tax and Excise duty collected from the figure ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessee is liable to succeed herein also. We, therefore, set aside the order of the Commissioner of Income-tax (Appeals) and direct the Assessing Officer to rework the loss of FSL pertaining to the assessment year 1999-2000 to be set off against taxable income of the assessee for the year under consideration. Thus, on this Ground assessee succeeds. 67. Ground No. 2 reads as follows: "2 On the facts & in the circumstances of the case and in law, the ld CIT(A) erred in: a. in treating the profit on sale of property Rs. 13,60,887/- under the head 'income from business' instead of 'capital gains' as claimed by the appellant". b. not appreciating and thereby ignoring that in appellant's case it was not its business to develop property and an isolated transaction could not form part of the trade or business on the basis of established principles of law." So far as Ground No. 2 is concerned, we have exhaustively dealt with a similar issue by way of Ground No.2 in assessee's appeal for the assessment year 1998-99 and held that the lower authorities were justified in treating the impugned income as business income. Following the parity of reasoning con....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s a deduction in the assessment year 1998-99. The Assessing Officer disallowed the claim on the ground that it was a capital loss. As per the Assessing Officer, the deduction claimed in the assessement year 1998-99 on account irrecoverable amount of Bangur Finance Ltd. was also disallowed at the time of assessment proceedings for the reason that it was in the nature of a capital loss. Therefore, according to the Assessing Officer the finding on this aspect recorded in the assessment order for the assessment year 1998-99 would also be applicable while considering the impugned claim of loss on account devaluation of an investment. In this manner, the Assessing Officer held the assessee ineligible for claim of deduction for loss on account of devaluation of investment. The CIT(A) has also upheld the stand of the Assessing Officer, against which the assessee is in appeal before us. 71. Before us, the learned Counsel for the assessee submitted that the issue is linked to the Ground raised by the assessee in the assessment year 1997-98 relating to its claim for deduction under section 36(1)(vii) of the Act on account of the amount written as irrecoverable from Bangur Finance Ltd. It i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mount has been held eligible as a deduction under section 36(1)(vii) read with section 36(2) of the Act. In this background of the matter, we set-aside the order of the Commissioner of Income-tax (Appeals) and direct the Assessing Officer to consider the same and allow the impugned claim of the assessee as per law. Thus, on this Ground, assessee succeeds. 74. Ground No. 6 reads as follows: "On the facts & in the circumstances of the case and in law, the ld CIT(A) erred in reducing the claim of 'Tax Free Interest' & 'Tax Free Dividend' by Rs. 50,000/- on the assumption that, part of the administration/office/personnel cost is attributable to such income." The issue involved in this Ground is whether the Commissioner of Income-tax (Appeals) is justified in reducing the claim of 'Tax free interest' and 'Tax free dividend' by Rs. 50,000/- on the assumption that, part of the administration/office/personnel cost is attributable to such income. According to the Assessing Officer, the assessee had received interest of Rs. 4,70,77,397/- and Dividend of Rs. 24,61,835/-, which was claimed as exempted incomes. It was noticed by the Assessing Officer that the assessee had not cla....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... authorities below have estimated certain amount of expenditure as being relatable to the exempted incomes, namely, interest and dividend incomes, earned by the assessee. Quite clearly, the said approach of the lower authorities is not in line with the subsequent pronouncement of the Hon'ble Bombay High Court in the case of Godrej & Boyce Ltd. (supra) and in this view of the matter, we find ample force in the plea of the assessee that the issue deserves to be reexamined by the Revenue authorities in the light of the said judgment. Therefore, we set-aside the order of the Commissioner of income-tax (Appeals) and restore the matter back to the file of the Assessing Officer to be adjudicated afresh in light of the judgment of Hon'ble Bombay High court in the case of Godrej & Boyce Ltd (supra). Needless to say, the Assessing Officer shall carry out the aforesaid exercise after allowing the assessee a reasonable opportunity of being heard. The Assessing officer shall consider the submissions put-forth by the assessee and thereafter decide in accordance with law. Thus, on this Ground assessee succeeds for statistical purposes. 78. Ground No. 7 reads as follows: "On the facts ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the issue in favour of the assessee and against the Revenue by following our co-ordinate Bench's decision dated 30.3.2010 in ITA No 1014/PN/2000. In view of this, this Ground of appeal of the Revenue is dismissed. 83. Ground Nos. 3 reads as under: "On the facts and in the circumstances of the case and in law, the ld CIT(A) erred in allowing interest taken for purchase of leased asset and not appreciating the fact that the transaction of leasing was not a bona fide but a device of tax avoidance, in view of the ratio of Supreme Court in the case of Mcdowel & Co. v. CIT (14 ITR 148 (SC)." This Ground is similar to Ground No. 3 of Revenue's appeal for assessment year 1998-99, wherein the order of the Commissioner of Incometax (Appeals) has been set-aside and the matter restored to the file of the Assessing Officer to be adjudicated afresh in the light of the directions given by the Tribunal in its order dated 30.3.2010 (supra). Following the precedents, in the instant year also, the order of the Commissioner of Income-tax (Appeals) is set-aside and the matter restored to the file of the Assessing Officer to decide the issue afresh in accordance with the directions....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the facts & in the circumstances of the case and in law, the ld CIT(A) erred in disallowing Rs. 14,78,844/- representing actual payment of leave encashment." The facts, in brief, are that during the course of assessment proceedings, by way of its letter dated 17.1.2003, assessee raised the claim regarding actual payment of leave encashment of Rs. 14,78,844/-. However, the Assessing Officer failed to take into account the said claim of the assessee. In appeal before the Commissioner of Income-tax (Appeals), assessee submitted that the claim represented actual payment of leave encashment to the employees during the previous year relevant to assessment year 2000-01 on account of accumulated leave of the employees of the earlier years. The Commissioner of Income-tax (Appeals) also rejected the claim of the assessee by observing as follows: "5.3 The submissions have been considered. The appellant's consistent stand has been to claim the leave encashment on provision basis, which has been allowed in AY 99-00. Even though in the earlier years such claim has been disallowed by the AO and the matter is before the ITAT, in view of the decision in Bharat Earth Movers the assessee'....
X X X X Extracts X X X X
X X X X Extracts X X X X
....allowing of pro rata provision made for premium payable on redemption of debentures in the amount of Rs. 1,02,191/-." This issue is similar to Ground No. 3 of assessee's appeal for assessment year 1998-99, wherein we have decided the same in favour of the assessee and against the Revenue by following the decision of our coordinate Bench in assessee's case for assessment year 1997-98 vide order dated 30.3.2010 in ITA No 1014/PN/2000. Accordingly, following the precedents, in this year also the issue is decided in favour of the assessee and accordingly, the Ground is allowed. 94. Ground No. 4 reads as follows: "On the facts & in the circumstances of the case and in law, the ld CIT(A) erred in disallowing Rs. 68,23,425/- representing loss incurred on cancellation of Forward Foreign Currency Contract." This issue is similar to Ground No. 9 of assessee's appeal for assessment year 1998-99, wherein we have decided the same in favour of the assessee and against the Revenue by following the decision of our coordinate Bench in assessee's case for assessment year 2001-02 dated 24.6.2011 (supra). Accordingly, we follow the reasoning given therein and decide the issue in favo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the case of CIT v. M/s Raychem RPG Ltd., vide ITA No 4176 of 2009 dated 4.7.2011, a copy of which is placed on record. On the other hand, the learned Departmental Representative supported the orders of the authorities below. 98. We have carefully considered the submissions of rival parties. In this case, the assessee claimed deduction for an amount of Rs. 74,64,140/- on account of software and consultancy charges. It was noticed by the Assessing Officer that in the account books the assessee had claimed it as a capital cost whereas for the purposes of income-tax, the said expenditure was claimed as revenue expenditure. The expenditure related to implementation of an Enterprises Resources Planning (ERP package). The assessee justified its claim for revenue expenditure on the ground that the software was intended to improve the quality and efficiency of the information systems. The Assessing Officer faulted the claim of the assessee on two grounds. Firstly, according to him, the capitalization of such cost in the account books by the assessee himself did not justify the claim of revenue expenditure for the purposes of income-tax. Secondly, according to the Assessing Officer, the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....revenue expenditure. Therefore, on this Ground assessee succeeds. 102. Ground No. 6(b) was not pressed by the assessee and, therefore, it stands dismissed as such. 103. Ground No. 7 reads as follows: "On the facts & in the circumstances of the case and in law, the ld CIT(A) erred in disallowing Rs. 1,47,636/- being 5% of gross 'Miscellaneous Expenses' i.e. Rs. 29,52,686/- on the ground that it is a non-business expenditure u/s 37(1)." At the time of hearing, this Ground was not pressed by the learned Counsel for the assessee and, therefore, the same stands dismissed as not pressed. 104. Ground No. 8 reads as follows: "On the facts & in the circumstances of the case and in law, the ld CIT(A) erred in disallowing Rs. 1,00,000/- on ad hoc basis on account of gift expenses incurred by the appellant (out of Rs. 30,81,009/-)." This Ground is similar to Ground No. 4 in assessee's appeal for assessment year 1998-99 vide ITA No 961/PN/02, wherein following the reasoning given in the earlier order of the Tribunal dated 30.3.2010 (supra), we have decided the issue in favour of the assessee. Accordingly, we decide this issue in favour of the assessee and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....We shall now take up Revenue's cross appeal vide ITA No 1331/PN/03 for assessment year 2000-01. 110. Ground No. 1 of the appeal is as follows: "On the facts & in the circumstances of the case and in law, the ld CIT (A) erred in directing to allow claim of deduction of Rs. 42,50,000/- on account of premium on redemption of debentures, when no such claim was made by the assessee in its original return of income filed u/s 139(1)" The claim of the assessee for deduction of premium of Rs. 42,50,000/- was rejected by the Assessing Officer on the ground that such a claim was made only during the assessment proceedings and neither it was made in the original return of income filed under section 139(1) and nor any revised return of income was filed under section 139(5) of the Act. However, the Commissioner of Income-tax (Appeals) held that this technical objection of the Assessing Officer is not sustainable and proceeded to consider the issue on merits. The Commissioner of Income-tax (Appeals) directed the Assessing Officer to allow the claim of deduction of Rs. 42,50,000/- on account of premium on redemption of debentures on payment basis. The Commissioner of Income-ta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r of Income-tax (Appeals) on this aspect and the Revenue has to fail. 113. In so far as the merits is concerned, the Commissioner of Income-tax (Appeals) directed the Assessing Officer to add back the sum of Rs. 1,02,191/- debited to the profit & Loss account as a provision and instead allow the deduction for Rs. 42,50,000/- on actual payment basis. The Commissioner of Income-tax (Appeals) further observed that in case the Tribunal were to allow the assessee's plea for deduction on the basis of the provisions made, then his direction allowing deduction on payment basis would stand reversed. On this aspect, the learned CIT-Departmental Representative pointed out that in the past years the Tribunal has allowed assessee's claim on the basis of the provision and, therefore, the direction of the Commissioner of Income-tax (Appeals) to allow the claim on payment basis should be reversed. In our view, the order of the Commissioner of Income-tax (Appeals) itself is quite speaking on this aspect to the effect that deduction on payment basis is to be allowed only in case the assessee's claim for allowance on the basis of a provision is not upheld. As a result, we therefore affirm the orde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing Officer treating the expenditure as a capital expenditure. In the result, order of the Commissioner of Income-tax (Appeals) is hereby affirmed and the Ground of appeal raised by the Revenue is dismissed. 117. Ground No. 3 reads as follows: "On the facts & in the circumstances of the case and in law, the ld CIT(A) erred in directing to restrict the expenses incurred or earning tax free income to Rs. 50,000/- without appreciating the fact that assessee has not maintained any separate account in order to earn such tax free income." This Ground is similar to Ground No. 5 of assessee's appeal in ITA No 1305/PN/03 for the assessment year 2000-01, wherein we have set aside the orders of the authorities below on the point and remitted the matter back to the file of the Assessing Officer to adjudicate the issue afresh in accordance with the guidelines given by the Hon'ble Bombay High Court in the case of Godrej and Boyce (supra). We hold accordingly here also and remit the matter back to the file of the Assessing Officer with similar directions. This Ground is disposed of accordingly. 118. Ground No. 4 reads as follows: "On the facts & in the circumstances of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....round is accordingly dismissed. 123. Ground No. 7 reads as follows: "On the facts & in the circumstances of the case and in law, the ld CIT(A) erred in deleting the interest charged u/s 115P of Rs. 8,49,862/-." The facts as emerging from the assessment order are that in the course of assessment proceedings, the Assessing Officer found that during the Annual General Meeting, assessee company declared interim dividend of Rs. 25,75,34,018/- @ Rs. 7.50 per equity share which was distributed by the company in May 2000 on which tax @ 10% under section 115-0 of the Act was payable by the assessee. According to the Assessing Officer, assessee failed to pay the tax within the prescribed time and, therefore, by virtue of section 115-P of the Act, interest became chargeable. He accordingly charged interest of Rs. 8,59,862/- under section 115-P of the Act. 124. In appeal before the Commissioner of Income-tax (Appeals), it was contended by the assessee that primarily the event of declaration and distribution of dividend took place after the close of previous year relevant to the assessment year under consideration, which was evident from the facts discussed by the Assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....-and sales tax of Rs. 28,42,38,297/- from the total turnover for the purpose of deduction u/s 80HHC." This Ground is similar to Ground No. 5 of Revenue's appeal vide ITA No 976/PN/02 for assessment year 1998-99 wherein by following the decision of our co-ordinate Bench in assessee's case for assessment year 1997-98 order dated 30.3.2010 (supra), we have decided against the Revenue and in favour of the assessee. Accordingly, following the parity of reasoning given in the order of the Tribunal dated 30.3.2010 (supra), we decide the issue in favour of the assessee and the Ground of the Revenue is accordingly dismissed. 128. In the result, Revenue's appeal in ITA No 1331/PN/03 is partly allowed. 129. We now take up assessee's appeal for assessment year 2003-04, vide ITA No 1157/PN/07. 130. Ground No. 1 reads as follows: "On the facts & in the circumstances of the case and in law, the ld CIT(A) erred in disallowing Rs. 33,65,663/- towards liquidated damages being the amount representing short recovery from the customers. Among others, the CIT(A) erred in observing that the appropriate evidence was not filed in the course of proceedings." The facts, in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....certain bills the amounts had been short recovered and the same have been debited to the account head 'liquidated damages' and such liquidated damages have been claimed as a debit in the Profit & Loss account. In this connection, our attention has been invited to Schedule 13 to the Profit & Loss account which contains the account head 'liquidated damages', copies of which have been placed on record. It was, therefore, contended that the assessee satisfies all the conditions prescribed under section 36(1)(vii) read with section 36(2) of the Act inasmuch as the impugned amount reflects short recoveries on various sale invoices raised and the amounts had actually been written-off in the books of account by debiting to the head 'liquidated damages'. The learned Counsel for the assessee placed reliance on the judgment of the Hon'ble Supreme Court in the case of TRF Ltd. (supra) in support of the claim. 132. On the other hand, the learned CIT-Departmental Representative has pointed out that debiting of the expense head liquidated damages to the Profit & Loss account does not amount to write-off as contemplated under section 36(1)(vii) of the Act and therefore the claim of the assessee....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he judgment of the Hon'ble Supreme Court in the case off TRF Ltd (supra). For all the above reasons we uphold the plea of the assessee and the Ground is accordingly allowed. 134. Ground No. 2 is as follows: "On the facts & in the circumstances of the case and in law, the ld CIT(A) erred in disallowing Rs. 16,36,787/- representing 'Buy-back' expenses." During the course of assessment proceedings, the Assessing Officer made disallowance of the expenditure claimed by the assessee of Rs. 16,36,787/- representing buy-back expenses on the ground that it was classified as 'capital expenditure' in the report of Tax auditor, even though assessee had claimed this expenditure on revenue account in the return of income. 135. In appeal before the Commissioner of Income-tax (Appeals), it was contended by the assessee that since the expenditure was incurred not for augmentation or expansion of the capital base of the company, the expenditure incurred was on revenue account. Reliance was placed on the judgment of the Hon'ble Supreme Court in the case of Punjab State industrial Development Corporation Ltd 225 ITR 792 (SC). The Commissioner of Income-tax (Appeals) did not fin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....buyback, benefit or addition of enduring nature would not rise as capital employed had, in fact, gone down. The expenditure incurred had not resulted into bringing into existence any asset. Therefore, it was rightly held to be an expense of revenue nature. The contention of learned counsel for the Revenue that with lesser capital dividend in future payable shall be less and, therefore, it shall be treated as a benefit of enduring nature cannot be accepted. We further find that in these circumstances the Tribunal rightly held that such an expenditure was allowed under section 37 of the Act as expense incurred for business purpose in the following manner: "15. Once we decide that the impugned expenditure is not capital in nature, we have to see its allowability under section 37. In this regard, we find that the expenses were incurred by the assessee company for compliance of SEBI guidelines with regard to buyback of shares. The buyback of shares is stated to be for the purpose of providing an existing opportunity to the existing shareholders who so desire. This Tribunal is taking a consistent view that expenditure incurred with regard to AGM is business expenditure.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lar issue was subject-matter of consideration by our co-ordinate Bench in assessee's case for assessment year 2002-03 and the Tribunal vide its order dated 15.7.2011 in ITA No 102/PN/07 decided the issue in favour of the assessee by following the judgment of the Hon'ble Bombay High Court in the case of Otis Elevators (I) Ltd. 195 ITR 682 (Bom). The learned Departmental Representative did not dispute the above factual aspects. Therefore, by following the parity of reasoning given by the Tribunal in its order dated 15.7.2011 (supra), we reverse the finding of the Commissioner of Income-tax (Appeals) and delete the impugned disallowance. The assessee succeeds on this Ground. 144. Ground No. 5 reads as follows: "On the facts and in the circumstances of the case and in law, the ld CIT (A) erred in disallowing Rs. 2,05,945/- being 10% of gross 'Miscellaneous Expenses' i.e. Rs. 20,59,446/- on the ground that it is a non-business expenditure u/s 37(1)." While scrutinizing the details of 'Miscellaneous Expenses' debited to the Profit & Loss account at Rs. 8,72,15,989/-, the Assessing Officer observed that it contained another head of miscellaneous expenses to the extent....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or the assessment year 2002-03 the Tribunal in appeal No 102/PN/07 dated 15.7.2011 has dismissed the Ground raised. It is claimed that the same has been done by mistake as in-fact the Tribunal has referred to its earlier orders in ITA Nos 10141038/PN/00 for assessment year 1997-98 wherein similar issue was decided in favour of the assessee. It was therefore contended that the issue is liable to be decided in favour of the assessee in view of the past history. 149. The learned Departmental Representative has not disputed the factual matrix concerning the precedents as made out by the learned Counsel for the assessee. 150. On this aspect, we find that the Assessing Officer disallowed 50% of the expenses on gift and presentations, which resulted in an addition of Rs. 5,77,930/- and the level of such disallowance corresponded to the action of the Assessing Officer in earlier year. The Commissioner of Income-tax (Appeals) noticed that in the earlier year he had restricted the disallowance to Rs. 4,50,000/- out of the disallowance of Rs. 12,73,925/ made by the Assessing Officer. Following his own decision of the earlier year, the Commissioner of Income-tax (Appeals) restricted the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s as follows: "On the facts & in the circumstances of the case and in law, the ld CIT(A) erred in disallowing Rs. 11,33,536/- out of total expenses on repairs and maintenance on the ground that they are non-business expenditure." The Assessing Officer made disallowance of Rs. 11,33,536/- out of total expenses on repairs and maintenance for the reason that the expenditure was incurred for non-business purposes. In appeal, the Commissioner of Incometax (Appeals) confirmed the disallowance made by the Assessing Officer following his order for earlier year 2002-03 in assessee's case. 155. After considering the submissions of rival parties, we find that similar issue came up for consideration before our co-ordinate Bench in assessee's case for earlier assessment year 2002-03, wherein the Tribunal has set-aside the issue and restored the matter to the file of the Assessing Officer, vide order dated 15.7.2011 in ITA No 102/PN/07. Therefore, following the precedent, we set-aside the order of the Commissioner of Income-tax (Appeals) and restore the issue to the file of the Assessing Officer to be decided afresh in accordance with the directions and findings given by the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t II which would result in ad hoc allocation of expenses unrelated to the activities of this undertaking." It was a common point between the parties that similar issue came up for consideration before our co-ordinate Bench in assessee's case for earlier assessment years and for the assessment year 2002-03, the Tribunal has set-aside the issue and restored the matter to the file of the Assessing Officer, vide order dated 15.7.2011 in ITA No 102/PN/07. Therefore, following the precedent, we set-aside the order of the Commissioner of Income-tax (Appeals) and restore the issue to the file of the Assessing Officer to be decided afresh in accordance with the directions and findings given by the Tribunal for assessment year 2002-03. The assessee succeeds on this Ground. 160. Ground No. 12 reads as follows: "On the facts and in th circumstances of the case and in law, the ld CIT(A) erred in directing the AO to follow the guidelines as contained in the appellate order for AY 2001-02 in the matter of allocation of expenses for determination of profits u/s 80IA in respect of Urs Unit II which would result in ad hoc allocation of expenses unrelated to the activities of this unde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....peal of the Revenue is dismissed. 164. Ground No. 2 reads as follows: "On the facts & in the circumstances of the case and in law, the ld CIT(A) erred in allowing deduction u/s 80IA and in directing to allocate common expenses." It has been asserted before us that similar issue came up for consideration before our co-ordinate Bench in assessee's case for earlier assessment years and for the assessment year 2002-03 the Tribunal has setaside the issue and restored the matter to the file of the Assessing Officer, vide order dated 15.7.2011 in Revenue's appeal in ITA No 105/PN/07. Therefore, following the precedent, we set-aside the order of the Commissioner of Income-tax (Appeals) and restore the issue to the file of the Assessing Officer to be decided afresh in accordance with the directions and findings given by the Tribunal for assessment year 2002-03. The Revenue succeeds on this Ground for statistical purposes. 165. Ground No. 3 is as under: "On the facts & in the circumstances of the case and in law, the ld CIT(A) erred in allowing deduction u/s 80IA on interest received/receivable in respect of sales on deferred payment terms." It was a common poin....