TaxTMI 
TaxTMI 
2026 (2) TMI 863
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....igible for credit under section 90/91 of the Act should be allowed as business expenses under section 37 of the Act. 3.1 The assessee, in the application for admission of additional ground of appeal, argued that the issues raised may not arise from the appellate order but the same are fundamental and necessary to correctly assessee the tax liability to the resolution of the case. Consequently, the assessee's learned AR requested that the additional ground be admitted for adjudication. 4. On the other hand, the learned (DR) opposed the admission of the additional ground of appeal, arguing that these grounds had not been raised before the lower authorities. 5. We have heard the rival submissions of both the parties and perused the materials available on record. The Hon'ble Supreme Court in the case of National Thermal Power Co. Limited vs. CIT reported in 229 ITR 383 has held as under: "Under section 254 of the Income-tax Act, 1961, the Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The power of the Tribunal in dealing with appeals is thus expressed in the widest possi....
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....s use. The licences for the use of such software were for limited periods and thereafter required payment of renewal fees. Hence, upon payment of the licence fees, it secured only a limited right to use the software without acquiring the source code, title, or ownership. The assessee further claimed that it was prohibited from modifying, duplicating, decompiling, or disassembling the impugned software and reiterated that it was only allowed to use such software for its business in a limited manner. Hence, the same were only application software license for limited period up to 2 years. The assessee to substantiate furnished supporting documents vide annexure 21, through its reply dated 16th February 2021 which included copy of purchase order, copy of invoice and a table showing the breakup, description of software and period or duration of software license. Accordingly, the assessee claimed that the payment made for securing licences of such software cannot be classified as a capital asset and is therefore allowable as revenue expenditure. In support of its contention, the assessee placed reliance on the judgment of the Hon'ble jurisdictional High Court of Karnataka in the case of ....
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....nditure on software license as capital expenditure. The Ld. CIT(A) referred the case law relied upon by the assessee in the case of IBM India Ltd (supra) and accordingly held that if the software licenses are on the nature of application software and enduring long lasting benefit to the assessee, then such expenditure incurred on such software will be classified as revenue expenditure and vice versa. 13. In view of the above observation, the Ld. CIT(A) remitted the issue back to the file of the AO with the direction for fresh assessment after carefully examining documents thoroughly and considering the judgment of Hon'ble High Court as discussed above. It was also directed to the AO that if the lifespan of the software license is longer than 2 years then it is necessary to consider same as capital expenditure eligible for depreciation. 13.1 Regarding the alternative claim of the assessee i.e. allowances of depreciation at 60%, the learned CIT(A) noted identical issue has been decided by tribunal in the case of holding company of the assessee and other group companies where rate of depreciation on software license has been allowed at 60%. Hence, the learned CIT(A) directed the....
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....e expenditure should not be allowed as a revenue expense. 18. We have heard the rival contentions of both the parties and perused the materials available on record. The issue before us relates to the allowability of software licence expenditure claimed as revenue expenditure and the correctness of the action of the learned CIT(A) in remanding the matter to the file of the Assessing Officer for fresh adjudication 18.1 From the records, it is evident that the assessee incurred expenditure towards application software licences which were used in the regular course of its business. The licences were for limited periods, mostly up to two years, and required renewal thereafter. The assessee did not acquire ownership, source code, or any proprietary rights in the software. It was merely granted a restricted right to use the software, without any right to modify, duplicate, or transfer the same. The supporting documents such as purchase orders, invoices, and detailed break up of software with licence period were furnished before the Assessing Officer during the assessment proceedings. These facts clearly show that the expenditure was incurred to facilitate efficient conduct of busine....
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....erial is already available on record. It is also pertinent note that vide Finance Act 2024 a proviso inserted below to section 251(1)(a) of the Act confirming power to commissioner/joint commissioner of appeal in respect of setting aside the assessment and refer back the case to the AO for fresh assessment, but such power can only be exercised when the assessment made under section 144B of the Act. 18.5 In the present case, the assessment year involved is A.Y. 2017- 18, much after the withdrawal of remand powers. The assessee had already furnished complete details regarding the nature and duration of software licences before the Assessing Officer. Therefore, there was no legal justification for the learned CIT(A) to remand the issue back to the Assessing Officer for fresh adjudication. The learned CIT(A) ought to have decided the issue conclusively on merits based on the materials available on record. 18.6 On merits, considering the nature of the software, the limited licence period, the absence of any enduring benefit, and the binding judicial precedents of the Hon'ble jurisdictional High Court, we hold that the software licence expenditure incurred by the assessee is allowa....
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....2 412,05,36,132 103,01,34,033 309,04,02,099 2016-17 309,04,02,099 3035,54,78,480 3344,58,80,579 836,14,70,145 2508,44,10,434 2017-18 2508,44,10,434 - 2508,44,10,434 627,11,02,609 1881,33,07,825 21.1 Thus, during the year under consideration, the assessee claimed depreciation on the WDV of the intangible assets for Rs. 627,11,02,609/- only. 22. During the assessment proceedings, the AO observed that the valuation assigned to technology, business contracts and goodwill appeared artificial and unjustified. According to the AO, the Finacle and Edge-services business was primarily dependent on employees who were transferred along with the business, and the skills, technical know-how and experience resided with such employees rather than in separately identifiable intangible assets. Therefore, assigning large standalone values to technology and business contracts was held to be prima facie unreasonable and done only with the intention of inflating the cost of assets to claim higher depreciation and thereby reduce taxable income. 22.1 The AO further held that technology and business contracts do not qualify as "intangible assets" withi....
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.... under section 10AA of the Act on account of increased profits was also rejected for want of direct nexus. 23. The aggrieved assessee preferred an appeal before the learned CIT(A). 24. Before the learned CIT(A), the assessee submitted that during the relevant assessment year, the Finacle and Edgeservices businesses were transferred by Infosys Limited to the appellant pursuant to a duly executed Business Transfer Agreement. The transfer was carried out on a going concern basis for a lump-sum consideration, and the appellant acquired all assets, liabilities, rights, and obligations relating to the said businesses. As part of this transfer, identifiable intangible assets such as developed technology, trademarks, business/customer contracts and goodwill were acquired and duly recorded in the books of accounts at fair value based on an independent valuation report. 24.1 The appellant claimed depreciation on such intangible assets under section 32(1)(ii) of the Act. However, the AO/NFAC disallowed the depreciation primarily on the ground that the said assets do not qualify as "intangible assets" under section 32(1)(ii), that the valuation was artificial, and that the transaction....
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....tory requirements under the Companies Act. The assignment of fair value by an independent valuer cannot be brushed aside merely on suspicion. Once fair value is determined in accordance with accounting standards, the same constitutes the "actual cost" for the purposes of section 32 of the Act. The lower authorities have erred in holding that compliance with accounting standards does not entitle the assessee to depreciation under the Income-tax Act. On the contrary, accounting recognition of assets is a necessary foundation for claiming depreciation. 24.8 The assessee submitted that developed technology acquired from Infosys Limited represents a valuable bundle of rights, embedded knowledge, source codes, system architecture, product design, functional capabilities and technical documentation. Without acquisition of such technology, the assessee would have been required to redevelop the same from scratch, involving huge time, cost and risk. The finding of the AO that technology resides only in employees is factually incorrect. No separate payment was made to employees, and employees are not assets owned by the assessee. Further, in the software industry, employee turnover is high....
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....lationships, brand value and future earning potential. The Hon'ble Supreme Court in Smifs Securities Ltd (surpa) has categorically held that goodwill falls within the expression "any other business or commercial rights of similar nature" and is eligible for depreciation under section 32(1)(ii) of the Act. The AO's attempt to distinguish goodwill from trademark or to allege inflation of value is contrary to settled law. Further, the amendment made by Finance Act, 2021 denying depreciation on goodwill is prospectively and therefore, it establishes that depreciation on goodwill was allowable for all earlier years. 24.13 The assessee also submitted that the lower authorities have wrongly invoked the 5th proviso to section 32 of the Act relating to succession. The proviso applies only where depreciation is allowable to both the predecessor and successor. In the present case, the intangible assets were recognized for the first time by the assessee upon acquisition. Infosys Limited had not claimed depreciation on such assets as they were self-generated and not recorded in its books. Therefore, the 5th proviso to section 32(1) of the Act has no application, and thus, the claim of deprec....
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....g Officer that technology resides only in employees was not accepted. The learned CIT(A) observed that employees are not assets of the company, and technology continues to exist independently even if employees leave the organisation. The assessee acquired technology for valuable consideration, and such technology is clearly an intangible asset. 25.5 The learned CIT(A) further observed that expenditure incurred on research and development after acquisition does not negate the existence or value of already developed technology. Research and development are meant to enhance or innovate new solutions and does not diminish the value of the acquired technology. Therefore, technology falls within the expression "business or commercial rights of similar nature" under section 32(1)(ii) of the Act, and depreciation on technology is allowable on merits. Regarding Trademarks 25.6 The learned CIT(A) noted that trademarks are specifically mentioned in section 32(1)(ii) of the Act and are expressly eligible for depreciation. There is no dispute regarding ownership or use of trademarks by the assessee. Therefore, on merits, depreciation on trademarks is allowable, and the Assessing Office....
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..... Proviso to Section 32 of the Act 26. The most crucial issue considered by the learned CIT(A) was the applicability of the sixth proviso to section 32 of the Act. It was held that acquisition of Finacle and Edge-services businesses under the BTA amounts to succession within the meaning of section 170 of the Act. 26.1 Relying on decisions of the Hon'ble Jurisdictional Tribunal in United Breweries Ltd., the Hon'ble Mumbai Tribunal in Archroma India Pvt. Ltd. in ITA No 306/Mum/2019, and other judicial precedents, the learned CIT(A) held that the sixth proviso to section 32 applies to cases of business acquisition through slump sale or business transfer agreement. 26.2 The proviso mandates that depreciation allowable to the successor cannot exceed the depreciation that would have been allowable had the succession not taken place. Since Infosys Ltd, the predecessor, had not claimed depreciation on these intangible assets, the allowable depreciation in the hands of the appellant is effectively restricted to nil. 27. The learned CIT(A) further held that the sixth proviso applies not only in the year of acquisition but also in subsequent years, including the year under appe....
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....ly where depreciation is allowable to both the predecessor and the successor and where there is an aggregate claim of depreciation in the same year. In the present case, the intangible assets were never recorded in the books of the transferor, and no depreciation was ever claimed by the transferor. Since there was no depreciation claimed by the predecessor, there is no question of aggregate deduction, and therefore the sixth proviso to section 32(1) of the Act is not attracted at all. 30.3 The learned AR further submitted that even otherwise, the essential condition for invoking section 170 of the Act, namely succession to a business as a whole, is not satisfied in the present case. Succession implies that the transferor goes out of business and the transferee takes over the entire business as a whole, with continuity of identity. In the present case, only specific product divisions and service divisions were transferred over different years under separate agreements. The software development business as a whole continued to remain with the transferor, and even after the transfer, the transferor continued to develop and launch several other software products. Therefore, the tran....
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....Appeals) has also recorded a finding that there is no issue with valuation or cost allocation of intangible assets. Once valuation and cost are accepted, and once the assets are held to be eligible intangible assets, depreciation cannot be denied by invoking an inapplicable proviso. 31. In view of the above facts and legal position, the learned AR submitted that the invocation of the sixth proviso to section 32(1) of the Act is wholly incorrect, both on facts and in law. There is no succession of business under section 170 of the Act, there is no aggregate claim of depreciation, and the year under consideration is not the year of succession. Accordingly, the learned AR prayed that the Hon'ble Tribunal may allow the claim of depreciation on intangible assets as claimed by the assessee and grant appropriate relief. 32. Per contra, the ld. DR submitted that the ld. Commissioner (Appeals) was correct in restricting the depreciation claim by applying the sixth proviso to section 32(1) of the Act. According to the DR, the Appellant had taken over running business divisions of the transferor, along with all the related assets, customers, contracts, and technology. Such a transfer, i....
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....sue before us is whether the assessee is entitled to depreciation under section 32(1)(ii) of the Act on intangible assets such as technology, business contracts, trademarks and goodwill acquired under Business Transfer Agreements entered into with its holding company, and whether such claim is barred by the sixth proviso to section 32(1) read with section 170 of the Act. 36.1 At the outset, we note that the learned CIT(A) has given a clear and categorical finding that the assets acquired by the assessee, namely technology, business contracts, trademarks and goodwill, are "intangible assets" within the meaning of section 32(1)(ii) of the Act and are otherwise eligible for depreciation on merits. This finding has not been disturbed by the Revenue, and in fact, the learned CIT(A) has accepted the assessee's contentions on the nature and eligibility of these assets. Therefore, the foundational objection of the Assessing Officer that these assets do not qualify as intangible assets does not survive. Once the assets are held to be eligible intangible assets under section 32(1)(ii) of the Act, depreciation becomes a statutory allowance and can be denied only if there is a clear legal p....
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.... in the books of the transferor, and no depreciation was ever claimed or allowable to Infosys Limited on such assets, as they were self-generated. The assets were recognised for the first time in the hands of the assessee upon acquisition and valuation. Since, there was no depreciation claimed or allowable in the hands of the predecessor, there is no question of any aggregate deduction of depreciation in the same year. In the absence of aggregate deduction, the sixth proviso to section 32(1) of the Act does not get triggered at all. 36.7 We also find merit in the alternative submission of the learned AR that even assuming, without admitting, that the transaction amounted to succession, the restriction under the sixth proviso to section 32(1) can apply only in the year of succession and not in subsequent years. The assessment year under consideration before us is not the year of alleged succession. Judicial precedents have consistently held that the proviso restricts only the overall quantum of depreciation in the year of succession and has no role to play in later years. Therefore, on this ground also, the application of the proviso by the lower authorities is legally unsustaina....
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....he learned CIT(A) himself has recorded that section 43 is not attracted in the present case. Once valuation is supported by an independent valuer and is not disturbed in accordance with law, depreciation cannot be denied merely on suspicion or conjecture. 36.9 We further find that the principle of consistency strongly supports the case of the assessee. Depreciation on similar intangible assets acquired under an earlier Business Transfer Agreement was allowed in scrutiny assessments under section 143(3) for earlier years. For assessment year 2015-16, the claim was allowed, and reassessment proceedings initiated thereafter have been stayed by the Hon'ble High Court. For assessment years 2016-17 to 2018-19, depreciation was allowed and no reassessment proceedings were initiated. Thus, the Revenue has accepted the allowability of depreciation on identical assets created based on identical business transfer agreement in earlier years. In the absence of any change in facts or law, the Revenue cannot take a contradictory stand in the year under consideration. The settled principle that the Revenue cannot blow hot and cold at the same time squarely applies. 36.10 In view of the above....
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.... 38.4 In support of this contention, reliance was placed on judicial precedents, including the decision of the ITAT Ahmedabad Bench in Mastek Ltd. v. DCIT and the judgment of the Hon'ble Bombay High Court in Reliance Infrastructure Ltd., wherein it was held that foreign taxes, which are not eligible for relief under section 90 of the Act and do not fall within the definition of "tax" under section 2(43) read with section 40(a)(ii) of the Act, are allowable as business expenditure. 39. On the contrary, the learned DR before us opposed the contention of the assessee and supported the orders of the lower authorities. He submitted that the foreign taxes paid by the assessee are in the nature of income tax and are directly linked to the profits earned abroad. Such taxes, according to the learned DR, represent application of income and not an expenditure incurred for the purpose of carrying on business. Therefore, they are not allowable as a deduction under section 37(1) of the Act. The learned DR sought to distinguish the judicial precedents relied upon by the assessee by submitting that those decisions were rendered on their own facts and cannot be applied mechanically to the prese....
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....e reasonable opportunity of being heard to the assessee and thereafter grant appropriate relief in accordance with law, if the claim is found to be admissible. With these directions, the additional ground of appeal raised by the assessee is allowed for statistical purposes. 41. In the result, the appeal of the assessee is partly allowed for statistical purposes. Coming to ITA No. 291/Bang/2025 pertaining to A.Y. 2018-19 42. The Ground Nos. 1 and 6 of the assessee's appeal are general Grounds which do not require any separate adjudication. Hence, we dismiss the same as infructuous. 43. The Ground No. 2 of the assessee's appeal pertains to deductibility of software expenses as revenue expenses. 44. At the outset, we note that the issue raised by the assessee in its grounds of appeal for the AY 2018-19 is identical to the issue raised by the assessee in ITA No. 290/Bang/2025 for the assessment year 2017-18. Therefore, the findings given in ITA No. 290/Bang/2025 shall also be applicable for the assessment year 2018-19. The ground of appeal of the assessee for the A.Y. 2017-18 has been decided by us vide paragraph No. 19 of this order favouring assessee. The learned AR an....
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....l of Income Tax. The assessee also relied on certain judicial precedents to support this contention. 48.3 However, the AO did not accept the submissions of the assessee. The AO held that as per Rule 6(7A)(b) of Income Tax Rules, the submission of Form 3CL issued by DSIR is mandatory for allowing weighted deduction under section 35(2AB) of the Act. Since the assessee failed to furnish Form 3CL for the relevant year, the AO concluded that the assessee was not eligible for weighted deduction at 150%. Accordingly, the AO disallowed the excess weighted deduction claimed under section 35(2AB) amounting to Rs.62,79,78,889/-, being the difference between the weighted deduction claimed and the actual expenditure incurred (Rs.1,88,39,36,665 minus Rs.1,25,59,57,776). The AO restricted the deduction under section 35(2AB) of the Act to 100% of the actual expenditure incurred on scientific research and denied the additional weighted portion solely on account of non-furnishing of Form 3CL issued by DSIR. 49. The aggrieved assessee preferred an appeal before the learned CIT(A). 50. Before the learned CIT(A), the assessee reiterated that it had incurred revenue expenditure of Rs.1,25,59,57....
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....ions, the assessee pleaded that the weighted deduction under section 35(2AB) of the Act be allowed in full and the disallowance made by the AO be deleted. 51. However, the learned CIT(A) observed that after the amendment to Rule 6(7A) with effect from 01.07.2016, the grant of weighted deduction under section 35(2AB) of the Act is not automatic merely on approval of the in-house R&D facility by DSIR. According to the learned CIT(A), the amended provisions mandate that the prescribed authority, i.e. DSIR, must not only approve the facility but also quantify the eligible expenditure, and such quantification is required to be communicated to the Income-tax Department through Form 3CL. In the absence of such quantified approval, the assessee cannot claim weighted deduction under section 35(2AB) of the Act. 51.1 The learned CIT(A) further observed that Form 3CL is not a mere procedural requirement but a substantive and mandatory condition for allowing weighted deduction under section 35(2AB) of the Act. It was held that the Assessing Officer was justified in disallowing the weighted deduction during the assessment proceedings since Form 3CL was not furnished before the AO at that s....
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.... the extent of expenditure approved and quantified by DSIR in Form 3CL. 52. Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us. 53. The learned AR before us pointed out that the AO disallowed the weighted deduction only on the ground that Form No. 3CL was not furnished during the assessment proceedings. It was argued that the denial of deduction was purely technical and procedural in nature, without doubting either the incurrence of expenditure or the eligibility of the R&D facility. The learned AR submitted that the assessee had complied with all substantive conditions under section 35(2AB) of the Act, including maintaining separate books of account, getting the accounts audited, and furnishing the audit report to DSIR in Form 3CLA. 53.1 It was further submitted that during the appellate proceedings, the assessee furnished Form No. 3CL issued by DSIR, wherein the expenditure eligible for weighted deduction was duly quantified. The learned AR argued that once Form 3CL is available on record, even if it is produced at the appellate stage, the benefit of weighted deduction cannot be denied. The learned AR emphasized that appellate proceed....
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....bove submissions, the learned AR prayed that the weighted deduction under section 35(2AB) of the Act should be allowed on the entire eligible expenditure incurred by the assessee for both the assessment years. Alternatively, it was prayed that the expenditure not approved or quantified by DSIR be allowed under section 35(1)(i) or section 37(1) of the Act, and the disallowance made by the lower authorities be deleted. 54. Per contra, the learned DR supported the action of the Assessing Officer and the lower authorities in denying the weighted deduction under section 35(2AB) of the Act. He argued that furnishing of Form No. 3CL, duly issued by DSIR, is a mandatory requirement for claiming weighted deduction. Since the assessee did not submit Form 3CL during the assessment proceedings, the AO was justified in disallowing the claim. 54.1 The ld. DR contended that section 35(2AB) read with Rule 6(7A) clearly envisages a role for DSIR not only in approving the R&D facility but also in quantifying the eligible expenditure. According to him, the weighted deduction can be allowed only to the extent of expenditure approved and certified by DSIR in Form 3CL. If DSIR has approved or quan....
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....ssessee incurred revenue expenditure of Rs.1,25,59,57,776 on in-house R&D activities. The R&D facility was duly approved by the DSIR. The assessee claimed weighted deduction at 150% under section 35(2AB) of the Act. The Assessing Officer restricted the deduction to 100% of the actual expenditure and disallowed the weighted portion solely on the ground that Form No. 3CL was not furnished during the assessment proceedings. Subsequently, during appellate proceedings, Form No. 3CL was produced, wherein the DSIR quantified and approved expenditure of Rs.1,23,43,57,000, leaving a balance amount of Rs.2,16,00,776 not quantified. 55.2 At the outset, we observe that the approval of the in-house R&D facility by the DSIR is an undisputed fact. The Assessing Officer has not questioned the genuineness of the expenditure, the nature of the expenditure, or the nexus of such expenditure with the assessee's business. The sole reason for disallowance of the weighted deduction is the non-furnishing of Form No. 3CL during the assessment proceedings and the partial quantification of expenditure by DSIR. 55.3 We now examine the legal position. Section 35(2AB) of the Act grants weighted deduction o....
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.....2,16,00,776 which was not quantified by DSIR, we are of the considered view that mere non-quantification by DSIR cannot automatically render such expenditure ineligible for weighted deduction under section 35(2AB) of the Act, when the facility itself is approved and the expenditure is otherwise found to be incurred on in-house R&D activities. There is nothing on record to show that this expenditure falls outside the scope of approved R&D activities or is of a nature specifically excluded under the Act. 55.8 At the same time, we find merit in the alternative contention of the assessee that even if, for any reason, weighted deduction under section 35(2AB) is not granted on the unquantified portion, such expenditure is otherwise eligible for deduction under section 35(1)(i) of the Act, subject to verification, as it represents expenditure on scientific research related to the business of the assessee. The learned CIT(A) erred in holding that such alternative claim cannot be examined merely because it was not raised before the Assessing Officer. The powers of the appellate authority are co-terminus with that of the Assessing Officer, and a legitimate claim supported by facts and la....
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....g/2025, pertaining to A.Y. 2019-20 64. The Ground Nos. 1 and 6 of the assessee's appeal are general Grounds and the same do not require any separate adjudication. Hence, these grounds are dismissed as infructuous. 64.1 The Ground No. 2 of the assessee's appeal pertains to the deductibility of software expenses as revenue expenses. 65. At the outset, we note that the issue raised by the assessee in its grounds of appeal for the AY 2019-20 is identical to the issue raised by the assessee in ITA No. 290/Bang/2025 for the assessment year 2017- 18. Therefore, the findings given in ITA No. 290/Bang/2025 shall also be applicable for the assessment years 2019-20. The appeal of the assessee for the A.Y. 2017-18 has been decided by us vide paragraph No. 19 of this order favouring assessee. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2017-18 shall also be applied for the assessment year 2019-20. Hence, the ground of appeal filed by the assessee is hereby allowed. 66. The next issue raised by the assessee through Ground No. 3 of the appeal pertains to disallowance of depreciation on intangible assets. 67. At the outset, we not....
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....ses. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2017-18 shall also be applied for the assessment year 2019-20. Hence, the ground of appeal filed by the assessee is hereby allowed for statistical purposes. 73. In the result, the appeal of the assessee is partly allowed for statistical purposes. Coming to ITA No. 293 & 294/Bang/2025, pertaining to A.Y. 2020-21 and 2021-22 74. The Ground No. 1 and 5 of the assessee's appeals are general Ground which do not require any separate adjudication. Hence, the same are dismissed as infructuous. 75. The Ground No. 2 of the assessee's appeal pertains to deductibility of software expenses as revenue expenses. 76. At the outset, we note that the issues raised by the assessee in its grounds of appeals for the AYs 2020-21 & 2021-22 are identical to the issue raised by the assessee in ITA No. 290/Bang/2025 for the assessment year 2017-18. Therefore, the findings given in ITA No. 290/Bang/2025 shall also be applicable for the assessment years 2020- 21 2021-22. The appeal of the assessee for the A.Y. 2017-18 has been decided by us vide paragraph No. 19 of this order favouring assessee....