Inara Housing Finance Ltd.,, Surat v. The Income tax Officer, Ward-1(2),, Surat

ITA 1785/AHD/2007 | 2003-2004
Pronouncement Date: 26-02-2010 | Result: Dismissed

Appeal Details

RSA Number 178520514 RSA 2007
Assessee PAN AAACI7694B
Bench Ahmedabad
Appeal Number ITA 1785/AHD/2007
Duration Of Justice 2 year(s) 9 month(s) 26 day(s)
Appellant Inara Housing Finance Ltd.,, Surat
Respondent The Income tax Officer, Ward-1(2),, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 26-02-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 26-02-2010
Date Of Final Hearing 23-02-2010
Next Hearing Date 23-02-2010
Assessment Year 2003-2004
Appeal Filed On 30-04-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE SHRI BHAVNESH SAINI JM & SHRI A.N. PAHUJA A M I.T.A. NO.618& 1785/AHD/2007 (ASSESSMENT YEARS 2002-03 & 2003-04) INARA HOUSING FINANCE LTD VS ITO WARD-1(2) 301 HASSANAND COMPLEX SURAT GODHA STREET NANPURA SURAT [PAN : AAACI7694B] (APPELLANT) (RESPONDENT) I.T.A. NO.2014/AHD/2007 (ASSESSMENT YEAR 2003-04) ITO WARD-1(2) VS INARA HOUSING FINANCE LTD SURAT SURAT (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RK MALPANI AR REVENUE BY : SMT. NEETA SHAH DR O R D E R A.N. PAHUJA : THESE THREE APPEALS ARE DIRECTED AGAINST TWO SEPA RATE ORDERS DATED D 20-12-2006 AND 7-03-2007 OF THE CIT(A)-I S URAT. THE TWO APPEALS BY THE ASSESSEE FOR THE AYS 2002-03 & 2003-04 RAISE COMMON GROUNDS OF APPEALS WHILE THE APPEAL OF THE REVENUE FOR THE AY 2003-04 RELATES TO ADDITION U/S 68 OF THE INCOME-TAX ACT 1961[HEREINAFTER REFERRED TO AS THE ACT] .SINCE THESE APPEALS PERTAINED TO THE SAME ASSESSEE WHILE ISSUE S ARE COMMON THESE WERE HEARD TOGETHER FOR THE SAKE OF CONVENIENCE AND ARE BEING DISPOSED OF THROUGH THIS COMMON ORDER. I.T.A. NO.618& 1785/AHD/2007 2. ADVERTING FIRST TO GROUND NO.1 IN THE TWO APPEAL S OF THE ASSESSEE FACTS IN BRIEF AS PER RELEVANT ORDERS ARE THAT RETURN DEC LARING INCOME OF RS.4 65 460/- FOR THE AY 2002-03 & RS.5 30 620/- FOR THE 2003-04 FILED BY THE ASSESSEE ON 9.10.2002 & 10.11.2003 RESPECTIVELY WERE PROCESSED ON 29.1.2003 & 3.12.2003. THEREAFTER THE AO REOPENED THE ASSESSMENTS FOR T HESE TWO ASSESSMENT YEARS I.T.A. NO.618 1785& 2014/AHD/2007 2 AFTER RECORDING REASONS WITH THE ISSUE OF NOTICE DA TED U/S 148 OF THE ACT. IN THEIR WRITTEN SUBMISSIONS THE ASSESSEE SUBMITTED THAT TH E REASONS RECORDED FOR REOPENING THESE ASSESSMENTS WERE NOT PROVIDED TO TH E ASSESSEE AND THE ASSESSEE RELIED ON THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD VS ITO (2003) 259 ITR 19 (S C). SIMILAR CONTENTION WAS RAISED BEFORE THE LD. CIT(A) WHO OBSERVED IN PARA GRAPH 2.4 & 2.3 OF HIS ORDER FOR THESE TWO ASSESSMENT YEARS THAT IT IS SEEN FR OM THE ASSESSMENT RECORDS THAT REASONS RECORDED FOR REOPENING HAVE BEEN SHOWN TO THE AUTHORIZED REPRESENTATIVE MR. AADIL AIBDA C.A.. HIS SIGNATURES ARE THERE ON THE COPY OF REASONS RECORDED. IN THESE CIRCUMSTANCES ESPECIAL LY WHEN RETURN WAS MERELY PROCESSED U./S 143(1) OF THE ACT THE LD. CIT(A) R EJECTED THE GROUNDS OF THE ASSESSEE IN THESE TWO ASSESSMENT YEARS. THE LD. AR APPEARING BEFORE US DID NOT ARGUE ON THIS ASPECT ANY FURTHER. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE T HROUGH THE FACTS OF THE CASE. ADMITTEDLY IN THIS CASE AFTER PROCESSING OF RETURNS U/S 143(1)(A) OF THE ACT ON 29.1.2003 FOR THE AY 2002-03 & ON 3.12.2003 FOR TH E AY 2003-04 THE AO REOPENED THE ASSESSMENT AFTER RECORDING THE FOLLOWI NG REASONS. AY 2002-03 THE ASSESSEE HAS FILED THE RETURN OF INCOME DECL ARING TOTAL INCOME OF RS.4 65 460/- FOR THE AY 2002-03 ON 9.10.2002 . THE ASSESSEE COMPANY IS ENGAGED IN BUSINESS OF LONG TERM FINANCING FOR H OUSING PURPOSE. ON PERUSAL OF THE P&L ACCOUNT ATTACHED WITH RETURN OF INCOME IT IS NOTICED THAT THE ASSESSEE HAS DEBITED THE AMOUNT FOR PROVIS ION OF N.P.A. OF RS.2 33 825/- WHICH IS NOT FOR OUTSTANDING / PAYABL E EXPENSES. 2. IT IS FURTHER OBSERVED FROM P&L A/C THAT THE ASS ESSEE HAD REFLECTED INCOME OF RS.7 49 617/- FROM OTHER SOURCES IN AD DITION TO OPERATING INCOME. THE ASSESSEE HAS CLAIMED DEDUCTION U/S 36( 1)(VIII)OF THE I.T. ACT I.E. 40% OF THE PROFITABILITY DERIVED FROM HOUSE FI NANCE BUSINESS. THE ASSESSEE HAS CLAIMED DEDUCTION OF RS.3 39 490/- ON INCLUSIVE ABOVE MENTION INCOME I.E. INCOME FROM OTHER SOURCES. THE ASSESSEE COMPANY IS NOT ENTITLED TO DEDUCTION ON ABOVE INCOME UNDER THE CIRCUMSTANCE EXCESSIVE DEDUCTION HAS BEEN CLAIMED U/S 36(1)(VIII ). 3. CONSIDERING THE FACTS I HAVE THE REASON TO BELI EVE THAT THE INCOME OF RS.2 33 825/- AND AMOUNT OF EXCESS CLAIMED DEDUC TION CHARGEABLE TO I.T.A. NO.618 1785& 2014/AHD/2007 3 TAX HAS ESCAPED ASSESSMENT FOR A.Y. 2002-03 THEREFO RE NOTICE U/S.148 OF THE I.T. ACT IS ISSUED IN THIS CASE. A.Y. 2003-04 THE ASSESSEE HAS FILED THE RETURN OF INCOME DECLA RING TOTAL INCOME OF RS.5 30 620/- ON 10.11.03. THE RETURN OF INCOME WAS PROCESSED U/S 143(1) OF THE ACT ON 3.12.03 ON THE RETURNED INCOM E. THE ASSESSEE COMPANY IS ENGAGED IN BUSINESS OF LONG TERM FINANCI NG FOR HOUSING PURPOSE. ON PERUSAL OF THE P&L ACCOUNT ATTACHED WI TH RETURN OF INCOME IT IS NOTICED THAT THE ASSESSEE HAS DEBITED THE AMOUNT FOR PROVISION FOR NPA.. OF RS.2 93 218/- WHICH IS MERELY A PROVISION AND NOT AN ASCERTAINED LIABILITY. 2. IT IS FURTHER OBSERVED FROM P&L A/C THAT THE ASS ESSEE HAD REFLECTED INCOME OF RS.4 65 637/- FROM OTHER SOURCES IN AD DITION TO OPERATING INCOME. THE ASSESSEE HAS CLAIMED DEDUCTION U/S 36( 1)(VIII) OF THE I.T. ACT I.E. 40% OF THE PROFITABLITY DERIVED FROM HOUSING F INANCE BUSINESS. THE ASSESSEE HAS CLAIMED DEDUCTION OF RS.3 48 142/- ON INCLUSIVE ABOVE MENTIONED INCOME I.E. INCOME FROM OTHER SOURCES. T HE ASSESSEE COMPANY IS NOT ENTITLED TO DEDUCTION ON ABOVE INCOM E UNDER THE CIRCUMSTANCES EXCESSIVE DEDUCTION HAS BEEN CLAIMED U/S 36(1)(VIII) OF THE ACT. 3. CONSIDERING THE ABOVE FACTS I HAVE THE REASON T O BELIEVE THAT THE INCOME OF RS.2 93 218/- AND AMOUNT OF EXCESS CLAIME D DEDUCTION CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR A.Y. 2 003-04. ISSUE NOTICE U/S 148 OF THE IT ACT 1961 FOR AY 2003 -04. 4. AS IS APPARENT FROM THE AFORESAID REASONS THE A O REOPENED THESE ASSESSMENTS ON THE GROUND THAT PROVISION FOR NPA W AS NOT ADMISSIBLE WHILE THE DEDUCTION U/S 36(1)(VIII) OF THE ACT WAS NOT ALLOWA BLE ON INCOME FROM OTHER SOURCES AND THUS THE ASSESSEE CLAIMED EXCESSIVE DE DUCTION. WE FIND THAT HONBLE SUPREME COURT IN THEIR DECISION DATED 11.1. 2010 THE CASE OF M/S SOUTHERN TECHNOLOGIES LTD. VERSUS JOINT COMMNR. OF INCOME TAX COIMBATORE IN CIVIL APPEAL NO.1337 OF 2003 HELD THAT PROVISION FO R NPA IS NOT DEDUCTIBLE. THUS THIS ISSUE IS NOW SETTLED. AS REGARD NON-SUPPLY OF REASONS BY THE AO PLEADED IN THE WRITTEN SUBMISSION WE FIND FROM COPY OF THE RE ASONS PLACED IN PAPER BOOKS THAT REASONS WERE AVAILABLE WITH THE ASSESSEE AND I N ANY CASE IN THE LIGHT OF FINDINGS OF THE LD. CIT(A) NO FURTHER SUBMISSIONS WERE MADE BEFORE US ON THIS I.T.A. NO.618 1785& 2014/AHD/2007 4 ASPECT BY THE LD. AR ON BEHALF OF THE ASSESSEE .IN THESE CIRCUMSTANCES W E DO NOT FIND ANY INFIRMITY IN REOPENING THE ASSESSMENT ON THAT GROUND SO LONG AS INGREDIENTS OF PROVISION OF SECTION 147/148 ARE FUL FILLED. HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF METAL PRODUCTS OF INDIA VS. CIT 293 ITR 618 HELD THAT ONCE THE RETURNS WERE PROCESSED UNDER SECTION 143(1) OF THE ACT PROCEEDINGS UNDER SECTION 148 OF THE ACT COULD BE INITIATED. IF THE INGREDIENTS OF SECTION 148 OF THE ACT ARE SATISFIED THERE IS NO B AR TO INITIATION OF PROCEEDINGS UNDER SECTION 148 OF THE ACT. IN THIS CONNECTION HONBLE SUPREME COURT HELD IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS P VT. LTD. 291 ITR 500(SC) HELD THE SCOPE AND EFFECT OF SECTION 147 AS SUBSTITUTED WITH EFFECT FROM APRIL 1 1989 AS ALSO SECTIONS 148 TO 152 ARE SUBSTANTIALLY DIFFE RENT FROM THE PROVISIONS AS THEY STOOD PRIOR TO SUCH SUBSTITUTION. UNDER THE OLD PRO VISIONS OF SECTION 147 SEPARATE CLAUSES (A) AND (B) LAID DOWN THE CIRCUMSTANCES UND ER WHICH INCOME ESCAPING ASSESSMENT FOR THE PAST ASSESSMENT YEARS COULD BE A SSESSED OR REASSESSED. TO CONFER JURISDICTION UNDER SECTION 147(A) TWO CONDIT IONS WERE REQUIRED TO BE SATISFIED: FIRSTLY THE ASSESSING OFFICER MUST HAVE REASON TO BELIEVE THAT INCOME PROFITS OR GAINS CHARGEABLE TO INCOME TAX HAVE ESCA PED ASSESSMENT AND SECONDLY HE MUST ALSO HAVE REASON TO BELIEVE THAT S UCH ESCAPEMENT HAS OCCURRED BY REASON OF EITHER OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY OR TRULY ALL MATERIAL FACTS NECESSAR Y FOR HIS ASSESSMENT OF THAT YEAR. BOTH THESE CONDITIONS WERE CONDITIONS PRECEDENT TO BE SATISFIED BEFORE THE ASSESSING OFFICER COULD HAVE JURISDICTION TO ISSUE NOTICE UNDER SECTION 148 READ WITH SECTION 147(A). BUT UNDER THE SUBSTITUTED SECT ION 147 EXISTENCE OF ONLY THE FIRST CONDITION SUFFICES. IN OTHER WORDS IF THE ASS ESSING OFFICER FOR WHATEVER REASON HAS REASON TO BELIEVE THAT INCOME HAS ESCAPE D ASSESSMENT IT CONFERS JURISDICTION TO REOPEN THE ASSESSMENT. IT IS HOWEV ER TO BE NOTED THAT BOTH THE CONDITIONS MUST BE FULFILLED IF THE CASE FALLS WITH IN THE AMBIT OF THE PROVISO TO SECTION 147. THE CASE AT HAND IS COVERED BY THE MAI N PROVISION AND NOT THE PROVISO. SO LONG AS THE INGREDIENTS OF SECTION 147 ARE FULFI LLED THE ASSESSING OFFICER IS FREE TO INITIATE PROCEEDING UNDER SECTION 147 AND F AILURE TO TAKE STEPS UNDER SECTION 143(3) WILL NOT RENDER THE ASSESSING OFFICE R POWERLESS TO INITIATE REASSESSMENT PROCEEDINGS EVEN WHEN INTIMATION UNDER SECTION 143(1) HAD BEEN ISSUED. I.T.A. NO.618 1785& 2014/AHD/2007 5 4.1 EVEN THE JURISDICTIONAL HIGH COURT IN THE CASE OF BHARAT V PATEL VS. UNION OF INDIA 268 ITR 116 FOLLOWING THE DECISION IN THE CASE OF PRAFUL CHUNILAL PATEL 236 ITR 832(GUJ) HELD: THUS IN THE LIBERALISED AND SIMPLIFIED TAX COLLEC TION REGIME MERE ACCEPTANCE AND ACKNOWLEDGMENT OF RETURN AND ISSUANCE OF REFUND CANNOT BE ELEVATED TO THE STATUS OF REGULAR ASSESSMENT AND FORMATION OF OPINI ON ABOUT THE INCIDENCE OF TAX ON A PARTICULAR CLAIM OR ITEM MENTIONED IN THE RETU RN OF INCOME. AND IN THE ABSENCE OF ANY FORMATION OF OPINION ABOUT THE TAXAB ILITY OF THE NON-COMPETE FEES IN THE FACTS OF THE PRESENT CASE THERE CAN BE NO Q UESTION OF CHANGE OF OPINION. ON THE OTHER HAND THE DEEMING FICTION PROVIDED BY EXPLANATION 2 TO SECTION 147 OF THE ACT IMPARTS AN ADDED OBLIGATION IN THE MATTE R OF BELIEVING ESCAPEMENT OF INCOME. ACCORDING TO THE AFORESAID EXPLANATION (CLA USE (C)) EVEN WHERE AN ASSESSMENT IS MADE BUT INCOME CHARGEABLE TO TAX HA S BEEN UNDER-ASSESSED IT HAS TO BE DEEMED THAT SUCH INCOME HAS ESCAPED ASSES SMENT AND AFTER NOTICING THAT INCOME CHARGEABLE TO TAX WAS UNDER ASSESSED AN D APPLYING THE DEEMING FICTION AND THE RATIO OF THE AFORESAID JUDGMENT IN PRAFUL CHUNILAL PATEL [1999] 236 ITR 832 (GUJ) THE ASSESSING OFFICER CAN HARDLY HAVE REASO N NOT TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT . 4.2 IN THE LIGHT OF AFORESAID DECISIONS OF HONB LE SUPREME COURT AND JURISDICTIONAL HIGH COURT S INCE THE AO HAS REOPENED THESE ASSESSMENTS AFTER DULY RECORDING THE REASONS AND THE LD. AUTHORISED R EPRESENTATIVE COULD NOT POINT OUT ANY INFIRMITY EITHER IN THE REASONS OR IN THE F INDINGS OF LD.CIT(A) WE HAVE NO HESITATION IN UPHOLDING THE REOPENING OF THE ASSES SMENTS FOR THESE TWO ASSESSMENT YEARS. IT IS SETTLED LAW THAT ONCE PRO CEEDINGS U/S 147 ARE TAKEN TO BE VALIDLY INITIATED THE JURISDICTION OF THE AO CA N NOT BE CONFINED ONLY TO THAT PORTION OF INCOME WHICH IS MENTIONED IN THE REASONS BUT TO ENTIRE INCOME THAT HAD ESCAPED ASSESSMENT DURING THE YEAR. THEREFORE GROU ND NO.1 IN BOTH THESE APPEALS IS DISMISSED. 5. GROUND NO.2 IN BOTH THESE APPEALS OF THE ASSESSE E RELATES TO UPHOLDING OF DISALLOWANCE OF NPA PROVISIONS AS PER PRUDENTIAL NORMS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE AY 2002-03 THE AO N OTICED THAT THE ASSESSEE CLAIMED DEDUCTION FOR AN AMOUNT OF RS. 2 33 825/- ON ACCOUNT OF PROVISION FOR NPA.LIKEWISE AN AMOUNT OF RS. 2 93 218/- WAS CLAIM ED IN THE AY 2003-04. TO A I.T.A. NO.618 1785& 2014/AHD/2007 6 QUERY BY THE AO THE ASSESSEE REPLIED THAT THE SAID AMOUNT WAS CLAIMED AS DEDUCTION U/S 36(1)(VIIA) OF THE ACT THE PROVISION BEING MANDATORY IN TERMS OF THE DIRECTIONS OF NATIONAL HOUSING BANK (NHB) DELH I. AS PER NHB GUIDELINES ALL HOUSING FINANCE COMPANIES HAVE TO PROVIDE FOR B AD AND DOUBTFUL DEBTS I.E. WHERE INSTALLMENTS ARE DELAYED BEYOND 6 MONTHS ON C ONTINUOUS BASIS THE ASSESSEE POINTED OUT. HOWEVER THE AO DID NOT ACCE PT THESE SUBMISSIONS OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE WAS NEITH ER A SCHEDULED BANK NOR A NON SCHEDULED BANK OR A PUBLIC FINANCIAL INSTITUTIO N IN TERMS OF PROVISIONS OF SEC. 36(1)(VIIA) OF THE ACT .SINCE THE ASSESSEE INTER A LIA DID NOT REPLY TO A SHOWCAUSE NOTICE ISSUED BY THE AO CLAIM FOR DEDUCTION WAS DI SALLOWED . 6. ON APPEAL THE ASSESSEE CONTENDED THAT THE AMOUN T IN QUESTION IS ALLOWABLE U/S 37 OF THE ACT IF NOT ALLOWABLE U/S 3 6(1)(VIIA) OF THE ACT AS THIS EXPENDITURE / LOSS HAD BEEN INCURRED WHOLLY DURING THE COURSE OF BUSINESS BY THE ASSESSEE. SINCE THE ASSESSEE IS CARRYING ON THE SA ME BUSINESS AS ANY OTHER BANK THE PROVISIONS OF SECTION 36(1)(VIIA) ARE AP PLICABLE THE ASSESSEE COMPANY BEING A NON-SCHEDULED BANK. INTER ALIA THE ASSESSE E RELIED ON A JUDGMENT OF THE DELHI HIGH COURT IN THE CASE OF CIT VS EICHER LTD 2 05 CTR 469 (DEL) WHEREIN IT IS HELD THAT THE PROVISION FOR NPA IS AN ASCERTAINED B USINESS LOSS / EXPENDITURE. HOWEVER IT WAS CONCEDED BEFORE THE LD. CIT(A) THAT THE DECISION WAS RENDERED IN THE CONTEXT OF PROVISIONS OF SECTION 115J / 115JA O F THE ACT. IN THE LIGHT OF THESE SUBMISSIONS THE LD CIT(A) UPHELD THE FINDINGS OF T HE AO IN THE FOLLOWING TERMS IN THE AY 2002-03: 3.3 I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE APPELLANT AND OBSERVATIONS OF THE AO. IT IS VERY CLEAR THAT THE ASSESSEE DOES NOT FALL WITHIN THE PROVISIONS OF SECTION 36(1)(VII A) WHICH APPLIES TO THE SCHEDULED BANK OR A NON-SCHEDULED BANK. AS CLA IMED BY THE ASSESSEE IT IS NOT COVERED BY THE DEFINITION OF NON -SCHEDULED BANK AS DEFINED IN CLAUSE (I) OF EXPLANATION BELOW CLAUS E (VIIA) OF SECTION 36(1). HENCE THE CLAIM IS NOT ALLOWABLE UNDER THE SE PROVISIONS. THE AMOUNT IS ALSO NOT ALLOWABLE U/S 37(1) BECAUSE THE PROVISION FOR NPA IS NOT AN ASCERTAINED LIABILITY AT ALL FOR THE PURPOSE OF SECTION 37(1). THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE I.T.A. NO.618 1785& 2014/AHD/2007 7 OF CIT V. EICHER LTD (SUPRA) WAS IN THE CONTEXT OF BOOK PROFIT U/S 115J / 115JA AND THEREFORE IT CANNOT BE SAID THAT THE NPA CAN BE TREATED AS ASCERTAINED LIABILITY WITHIN THE MEANING OF SECTION 37(1). IF THE NPA COULD BE CONSIDERED AS ALLOWABLE LIABILI TY U/S 37(1) THEN THERE WOULD HAVE BEEN NO NEED FOR THE PROVISIONS OF SECTION 361)(VIIA) IN THE INCOME TAX ACT EVEN FOR THE NORMA L BANKS. THEREFORE THE DISALLOWANCE MADE BY THE AO IS CONFI RMED AND THIS GROUND OF APPEAL IS DISMISSED. 6.1 LIKEWISE IN THE APPEAL FOR THE AY 2003-04 THE LD. CIT(A) UPHELD THE DISALLOWANCE. 7. AGGRIEVED THE ASSESSEE IS NOW IN APPEAL BE FORE US. AT THE OUTSET BOTH THE PARTIES AGREED THAT ISSUE HAS BEEN SETTLED BY THE H ONBLE SUPREME COURT IN THEIR DECISION DATED 11.1.2010 THE CASE OF M/S SOUTHERN T ECHNOLOGIES LTD.VERSUS JOINT COMMNR. OF INCOME TAX COIMBATORE IN CIVIL AP PEAL NO.1337 OF 2003. 8. WE HAVE HEARD BOTH THE PARTIES AND GONE THRO UGH THE FACTS OF THE CASE UNDISPUTEDLY THE ASSESSEE COMPANY IS NOT COVERED B Y THE DEFINITION OF NON- SCHEDULED BANK AS DEFINED IN CLAUSE (I) OR A PUBLI C FINANCIAL INSTITUTION AS DEFINED IN CLAUSE(III) OF THE EXPLANATION BELOW CLAUSE (VII A) OF SECTION 36(1) OF THE ACT. THEREFORE THE CLAIM FOR DEDUCTION U/S 36(1)(VIIA) OF THE ACT IS APPARENTLY NOT TENABLE. IN THE AFORESAID DECISION IN M/S SOUTHERN TECHNOLOGIES LTD.(SUPRA) HONBLE SUPREME COURT HELD THAT THOUGH THE RBI DI RECTIONS DEVIATE FROM THE ACCOUNTING PRACTICE AS PROVIDED IN THE COMPANIES AC T THEY DO NOT OVERRIDE THE PROVISIONS OF THE IT ACT . THE RBI DIRECTIONS 1998 AND THE IT ACT OPERATE IN DIFFERENT FIELDS. IT WAS FURTHER HELD THAT THE PR OVISION FOR NPA MADE IN TERMS OF THE RBI DIRECTIONS DOES NOT CONSTITUTE EXPENSE FOR PURPOSES OF S. 36(1)(VII). THE SAID PROVISION IS FOR PRESENTATION PURPOSES AND IN THAT SENSE IT IS NOTIONAL. A PROVISION FOR NPA IS ONLY A NOTIONAL EXPENSE . FURTHER UNDER THE EXPL TO S. 36(1)(VII) A PROVISION FOR DOUBTFUL DEBT IS NOT ALL OWABLE. FOR THE SAME REASON DEDUCTION CAN ALSO NOT BE CLAIMED U/S 37 (1)OF THE ACT SINCE SECTION 37 APPLIES ONLY TO ITEMS WHICH DO NOT FALL IN SECTIONS 30 TO 3 6 OF THE ACT. IN THE LIGHT OF THIS VIEW TAKEN BY THE HONBLE APEX COURT WE HAVE NO AL TERNATIVE BUT TO UPHOLD THE I.T.A. NO.618 1785& 2014/AHD/2007 8 FINDINGS OF THE LD. CIT(A). THEREFORE GROUND NO.2 IN BOTH THESE APPEALS OF THE ASSESSEE IS DISMISSED. 9. NEXT GROUND NO.3 IN THESE TWO APPEALS THE ASSESS EE RELATES TO CONFIRMATION OF DISALLOWANCE OF CLAIM U/S 36(1)(VII I) OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO ASKED THE ASSESSE E TO FURNISH DETAILS AND DOCUMENTARY EVIDENCE OF EACH OF THE PROPERTY PURCH ASED / CONSTRUCTED FROM THE ADVANCES GIVEN BY IT ALONG WITH APPLICATIONS MADE BY THE BORROWERS SEEKING ADVANCE FOR THIS PURPOSE. HOWEVER THE ASSESSEE DI D NOT FURNISH THE REQUIRED DETAILS PROPERLY. IN RESPONSE TO A NOTICE U/S 133( 6) OF THE ACT THE FOLLOWING PARTIES CONFIRMED THAT THEY DID NOT PURCHASE ANY RE SIDENTIAL PROPERTY WITH THE LOAN RECEIVED FROM THE ASSESSEE: M/S LAXMI HARI PRINTS (P) LTD RS. 1 20 000/- M/S ANKIT SIZERS (P) LTD RS. 2 80 000/- M/S HITECH WEAVES (P) LTD RS. 2 80 000/- ACCORDINGLY THE AO WAS OF THE VIEW THAT THE LOA NS WERE NOT USED FOR PURCHASING AND CONSTRUCTION OF ANY RESIDENTIAL HOUS E AND THEREFORE THE ASSESSEE IS NOT ELIGIBLE FOR MAKING CLAIM AS IT DI D NOT FULFILL THE CONDITIONS STIPULATED U/S 36(1)(VIII) OF THE ACT VIZ. THAT TH E LOANS / FINANCE SHOULD BE UTILIZED FOR PURCHASE / CONSTRUCTION OF RESIDENTIAL HOUSES. WHEN CONFRONTED THE ASSESSEE REPLIED AS FOLLOWS: OUR COMPANY HAS BEEN ESTABLISHED AS A HOUSING FIN ANCE COMPANY. MAIN OBJECT OF THE COMPANY IS GIVING LONG TERM HOUSING FINANCE. IN OUR COUNTRY HOUSING FINANCE COMPANIES ARE REQUIRED TO BE REGISTERED WITH NATIONAL HOUSING BANK DELHI. UR COMPANY IS REGISTERED ACCORDINGLY. WE ENCLOSE HEREWITH COPY O F REGISTRATION CERTIFICATE WITH NATIONAL HOUSING BANK. THE SOLE E VIDENCE PROVE BEYOND DOUBT THE FACT THAT WE ARE A HOUSING FINAN CE COMPANY. WE HAVE RECEIVED LOAN APPLICATION FORM FROM ALL TH E BORROWERS. IT IS CLEARLY EVIDENT FROM SUCH APPLICA TION FORMS THAT ALL THE LOANS DISBURSED BY US ARE ONLY LONG TERM HOUSIN G LOANS. THE I.T.A. NO.618 1785& 2014/AHD/2007 9 LOANS GRANTED IN EARLIER YEARS ARE ALSO HOUSING LOA NS ONLY. IN FEW CASES BECAUSE OF LACK OF CLEAR LEGAL TITLES OF THE HOUSING PROPERTY THE OTHER ASSET WERE TAKEN IN SECURITY. THIS WAS A BUSINESS PRUDENCE TO SECURE OUR ADVANCES FULLY AND PERFECTLY . BUT THE PURPOSE OF LOAN IS HOUSING FINANCE ONLY. IN SOME CASES THE END-USE COULD NOT BE MONITORED DOES NOT MEAN THAT THE MAIN OBJECT OF OUR COMPANY IS NOT HO USING FINANCE. THE PURPOSE DECLARED IN ALL THESE LOANS WERE FOR HO USING ONLY. IN VIEW OF THE ABOVE WE CLEARLY FALL IN THE CATEG ORY OF SECTION 36(1)(VIII) I.E. PUBLIC COMPANY ESTABLISHED WITH MA IN OBJECT OF HOUSING FINANCE. HENCE WE ARE CLEARLY ELIGIBLE FO R DEDUCTION U/S 36(1)(VIII) OF THE ACT. 9.1 HOWEVER THE AO DID NOT ACCEPT THE AFORESAI D EXPLANATION OF THE ASSESSEE ON THE GROUND THAT THE ONUS IS ON THE ASSESSEE TO P ROVE THAT THE LOANS GRANTED BY IT FOR HOUSING PURPOSES WERE IN FACT USED FOR HOUSI NG PURPOSE. SINCE THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE OR DOCUMENT WHICH COULD ESTABLISH THAT THE LOAN GIVEN BY IT HAD BEEN USED FOR PURCHASING OR CONSTRUCTION OF A RESIDENTIAL HOUSE WHILE THE AFORESAID THREE PARTIES ADMITTED TH AT THE LOANS TAKEN BY THEM WERE NOT FOR HOUSING PURPOSES BUT WERE GENERAL LOAN S THE AO DISALLOWED CLAIM FOR DEDUCTION OF RS.3 39 490/- IN THE AY 2002-03 & RS.3 48 142/- IN THE AY 2003-04 U/S 36(1)(VIII) OF THE ACT. 10. ON APPEAL THE ASSESSEE WHILE REITERATING THEIR CONTENTIONS BEFORE THE AO SUBMITTED THAT THE ASSESSEE A HOUSING COMPANY REG ISTERED WITH NHB AND WAS FORMED WITH THE MAIN OBJECT OF CARRYING ON THE BUSI NESS OF PROVIDING LONG TERM FINANCE FOR CONSTRUCTION OR PURCHASE OF HOUSES IN I NDIA FOR RESIDENTIAL PURPOSES. ON THE BACK SIDE OF THE APPLICATIONS OF THE BORROW ERS PRODUCED BEFORE THE AO COMPLETE DETAILS OF THE HOUSE PROPERTY FOR WHICH LO ANS HAD BEEN GRANTED WERE MENTIONED. THE TOTAL NUMBERS OF BORROWERS AT THE END OF THE YEAR UNDER APPEAL WERE 194 AND MERELY ON THE BASIS OF REPLY OF THREE PARTIES THE AO CANNOT CONCLUDE THAT THE LOANS WERE NOT GIVEN FOR HOUSING PURPOSES. SINCE THE ASSESSEE COMPANY WAS PROVIDING HOUSING FINANCE TO THE BACKWA RD CLASS AND POOR PEOPLE WHO DID NOT MAINTAIN ACCOUNTS IT CANNOT BE SAID T HAT THE FUNDS WERE NOT USED FOR I.T.A. NO.618 1785& 2014/AHD/2007 10 PURCHASING / CONSTRUCTION OF HOUSES. IT WAS FURTHE R ARGUED THAT SINCE THE COMPANY IS FORMED AND REGISTERED WITH NHB FOR THE P URPOSE OF CARRYING BUSINESS OF PROVIDING LONG TERM FINANCE FOR CONSTRUCTION / P URCHASES OF HOUSES FOR RESIDENTIAL PURPOSES THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S 36(1)(VIII) OF THE ACT. HOWEVER THE LD. CIT(A) DID NOT ACCEPT THE PLE A OF THE ASSESSEE HOLDING AS UNDER: 4.5 I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE APPELLANT AND OBSERVATIONS OF THE A.O. IT IS NOT DENIED THAT THE APPELLANT COMPANY IS FORMED AND REGISTERED FOR THE PURPOSE OF PROVIDING LONG TERM FINANCE FOR CONSTRUCTION AND PURCHASE OF HOUSE S FOR RESIDENTIAL PURPOSE. HOWEVER FROM THE SIMPLE PERUSAL OF APPLI CATION FORMS AND THE MODUS OF DISBURSEMENT OF FINANCE TO THE BOR ROWERS IT IS SEEN THAT HE APPELLANT COMPANY HAS NOT BOTHERED TO GO BEYOND THE FORM AND SEE IF THE MONEY BEING DISBURSED WAS BEING USED FOR THE PURPOSE OF CONSTRUCTION OR PURCHASE OF RESIDENTIAL HOUSES OR NOT. THE APPELLANT COMPANY HAS SIMPLY FILED THE APPLICAT ION WHERE IT IS MENTIONED THAT THE LOAN IS REQUIRED FOR PURCHASING OR CONSTRUCTION A PARTICULAR RESIDENTIAL HOUSE AND IT HAS SIMPLY ISSU ED THE CHEQUE TO THE BORROWER IN THE NAME OF THE BORROWER ONLY. THE APPELLANT COMPANY HAS NOT CREATED OR ESTABLISHED ANY SYSTEMS TO CHECK OR VERIFY WHETHER THE FINANCE PROVIDED BY IT OR USED F OR THE PURPOSE FOR WHICH IT WAS GIVEN OR IT WAS USED FOR SOME OTHER PU RPOSE. THE APPELLANT COMPANY WAS HAPPY AS LONG AS IT CONTINUED TO RECEIVE THE INSTALLMENTS AGAINST THE LOANS GIVEN. IT IS ELEMEN TARY THAT ANY HOUSING FINANCE COMPANY OR ANY BANK WHICH IS PROVID ING FINANCE FOR CONSTRUCTION OR PURCHASE OF RESIDENTIAL HOUSES ENSU RES THAT THE FOLLOWING REQUIREMENTS ARE COMPLETED EITHER BY THE BORROWER OR BY ITS OWN STAFF:- THE APPLICATION IS OBTAINED FROM THE BORROWER MENTI ONING THE PROPERTY PROPOSED TO BE PURCHASED OR CONSTRUCTED WI TH THE DETAILS OF NOT ONLY PROPERTY BUT THE SELLER OR THE BUILDER. THE BORROWER IS ASKED TO SUBMIT ALLOTMENT LETTER OR AN AGREEMENT COPY IN RESPECT OF THE PROPERTY PROPOSED TO BE PURCHASED/CONSTRUCTED. THE BORROWER IS REQUIRED TO SUBMIT VALUATION REPORT FROM A REGISTERED VALUER. THE HOUSING FINANCE COMPANY OR THE BANK PROVIDING F INANCE FOR THE HOUSES APPRAISES THE PROPERTY BEING PURCHAS ED OR CONSTRUCTED THROUGH ITS OWN TECHNICAL STAFF. 4.6 FROM THE PERUSAL OF RECORDS OF ALL THE BORROWER S IT IS SEEN THAT THE APPELLANT HAS NOT ENSURED THAT ABOVE CONDI TIONS ARE I.T.A. NO.618 1785& 2014/AHD/2007 11 FULFILLED. AFTER ENSURING THE ABOVE REQUIREMENTS T HE HOUSING FINANCE COMPANY / BANKS PROVIDING HOUSING FINANCE ISSUE THE CHEQUE / DRAFT IN THE NAME OF THE BUILDER OR THE SELLER OF THE PRO PERTY. THIS CONDITION IS MOST IMPORTANT BECAUSE IT ENSURES THAT THE FUNDS ARE DISBURSED TO THE SELLER OF THE PROPERTY AND NOT TO THE BORROWER OF THE LOAN. THIS ENSURES THAT THE FUNDS ARE USED FOR THE PURPOSE OF PURCHASING OR CONSTRUCTING A HOUSE FOR RESIDENTIAL PURPOSE. SINCE THE APPELLANT COMPANY HAS NOT BOTHERED ABOUT ANY OF THESE CONDITIONS IT CANNOT BE SAID THAT IT HAS PROVIDED THE LOANS / FINANCES FOR THE PURPOSES WHICH ARE ENVISAGED IN SECTION 36( 1)(VIII). 4.7 AS REGARDS ITS ARGUMENTS THAT AS PER THE PROVIS IONS OF 36(1)(VIII) ALL THAT IS REQUIRED IS THAT THE ASSESS EE COMPANY SHOULD ONLY BE FORMED AND REGISTERED WITH THE MAIN OBJECT OF CARRYING ON BUSINESS OF PROVIDING LONG TERM FINANCE FOR CONSTRU CTION / PURCHASE OF RESIDENTIAL HOUSES IS NOT ACCEPTABLE BECAUSE IT CANNOT BE SAID THAT THE ACT ONLY WANTED THAT THE COMPANY SHOULD BE FORMED AND REGISTERED FOR THE PURPOSE BUT IT NEED NOT ADHERE T O THOSE PURPOSES. ALL THAT THIS PROVISION QUOTED BY THE APPELLANT MEA NS THAT WHILE THE MAIN PURPOSE SHOULD BE PROVIDING FINANCE FOR CONSTR UCTION OR PURCHASE OF RESIDENTIAL HOUSES IT CAN CARRY ON SOM E OTHER BUSINESS TO SOME EXTENT ALSO. IN VIEW OF THE ABOVE THE DIS ALLOWANCE MADE BY THE A.O. IS CONFIRMED AND THIS GROUND OF APPEAL IS DISMISSED. 10.1 SIMILAR FINDINGS WERE RECORDED BY THE LD. C IT(A) IN HIS ORDER FOR THE AY 2003-04. 11. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A). THE LD. AR ON BEHALF OF THE ASSE SSEE WHILE REITERATING THEIR SUBMISSIONS BEFORE THE LD. CIT(A) CONTENDED THAT TH E ASSESSEE HAD PRODUCED ALL THE RELEVANT DOCUMENTS KEPT AS SECURITY FOR ADVANCI NG THE LOAN BEFORE THE AO AND MERELY ON THE BASIS OF ENQUIRIES IN THREE CASE S DEDUCTION CAN NOT BE DISALLOWED SINCE ASSESSEE WAS IN THE BUSINESS OF PR OVIDING HOUSING FINANCE AND ALL THE DETAILS WERE MENTIONED ON THE BACK SIDE OF THE APPLICATION FORMS. ON THE OTHER HAND THE LD. DR SUPPORTED THE FINDINGS OF TH E LD. CIT(A) 12. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE FACTS OF THE CASE. IT IS WELL SETTLED THAT THE ONUS IS ON THE ASSESSEE C LAIMING DEDUCTION U/S 36(1)(VIII) OF THE ACT TO ESTABLISH THAT IT FULFILLED THE COND ITIONS STIPULATED IN THE SAID SECTION. I.T.A. NO.618 1785& 2014/AHD/2007 12 THE RELEVANT PROVISIONS OF S. 36(1)(VIII) READ WIT H THE NOTES AND THE MEMORANDUM FOR NOTES AND CLAUSES IN THE FINANCE BIL L 1995 WE FIND THAT THE PURPOSE OF AMENDING THE S. 36(1)(VIII) WAS TO RESTR ICT THE DEDUCTION AVAILABLE TO THE ASSESSEE IN RESPECT OF ANY SPECIAL RESERVES CRE ATED NOT EXCEEDING 40 PER CENT OF THE PROFITS DERIVED FROM THE BUSINESS OF PR OVIDING LONG-TERM FINANCE FOR CONSTRUCTION OR PURCHASE OF HOUSES IN INDIA. THEREF ORE THE IMMEDIATE SOURCE OF INCOME WHICH IS ELIGIBLE FOR DEDUCTION UNDER S. 36( 1)(VIII) MUST BE THE BUSINESS OF PROVIDING LONG-TERM FINANCE FOR CONSTRUCTION OR PUR CHASE OF HOUSES IN INDIA FOR RESIDENTIAL PURPOSES . DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO ASKED THE ASSESSEE TO FURNISH DETAILS AND DOCUMENTA RY EVIDENCE OF EACH OF THE PROPERTY PURCHASED / CONSTRUCTED FROM THE ADVANCES GIVEN BY IT ALONG WITH APPLICATIONS MADE BY THE BORROWERS SEEKING ADVANCE FOR THIS PURPOSE. HOWEVER THE ASSESSEE DID NOT FURNISH THE REQUIRED DETAILS PROPERLY. ON THE BASIS OF ENQUIRIES MADE FROM AFORESAID THREE PARTIE S AND THE ASSESSEE HAVING NOT DISCHARGED THE ONUS THAT LOANS GIVEN BY IT WE RE INDEED USED FOR PURCHASING AND CONSTRUCTION OF ANY RESIDENTIAL HOUSE THE AO DENIED THE CLAIM FOR DEDUCTION U/S 36(1)(VIII) OF THE ACT IN THESE TWO ASSESSMENT YEARS. EVEN BEFORE THE LD. CIT(A) THE ASSESSEE COULD NOT ESTABLISH THAT THE MONEY DISBURSED BY IT WAS USED FOR THE PURPOSE OF CONSTRUCTION OR PURCHASE OF RESIDENTIAL HOUSES. ACCORDINGLY THE LD. CIT(A) CONCLUDED THAT THE ASS ESSEE HAVING FAILED TO ESTABLISH THAT IT HAS PROVIDED THE LOANS / FINANCES FOR THE PURPOSES ENVISAGED IN SECTION 36(1)(VIII) DEDUCTION WAS NOT ADMISSIBLE. THE COPIES OF APPLICATION FOR ADVANCES BY VARIOUS BORROWERS PLACED IN PAPERBOOK O N PAGE 41 TO 90 SUBMITTED BEFORE US AND REFERRED TO BY THE LD. AR ARE IN GUJ RATI . THE LD. AR CONTENDED THAT THE VARIOUS BORROWERS REQUESTED FOR ADVANCE FOR PU RCHASE AND CONSTRUCTION OF HOUSES. APART FROM COPIES OF THESE APPLICATIONS NO EVIDENCE HAS BEEN REFERRED TO BEFORE US SUGGESTING THAT ADVANCES GIVEN BY THE ASSESSEE WERE INDEED UTILIZED FOR PURCHASE OR CONSTRUCTION OF RESIDENTI AL HOUSES. IF AN ASSESSEE CLAIMED THE BENEFIT OF DEDUCTION U/S 36(1)(VIII) O F THE ACT THE ONUS SQUARELY RESTED UPON THEM TO SATISFY THE REVENUE AUTHORITIE S THAT THEY FULFILLED THE CONDITIONS STIPULATED UNDER THE SAID PROVISION I.E THE ADVANCES GIVEN BY IT WERE I.T.A. NO.618 1785& 2014/AHD/2007 13 USED ONLY FOR THE PURPOSE OF PURCHASE OR CONSTRUCT ION OF RESIDENTIAL HOUSES. IN THE CASE UNDER CONSIDERATION THE ASSSESSEE DID NOT ESTABLISH THEIR CLAIM NOR SUBMITTED THE RELEVANT EVIDENCE BEFORE THE AO OR TH E LD. CIT(A) THAT THE ADVANCES GIVEN BY IT WERE INDEED FOR PURCHASE OR C ONSTRUCTION OF RESIDENTIAL HOUSES. EVEN BEFORE US SITUATION IS NO BETTER. IN THESE CIRCUMSTANCES ESPECIALLY WHEN THERE IS NO MATERIAL BEFORE US TO TAKE A DIFFERENT VIEW IN THE MATTER WE ARE NOT INCLINED TO INTEREFERE WITH THE FINDINGS OF THE LD. CIT(A). THEREFORE GROUND NO.3 IN THESE TWO APPEALS OF THE ASSESSEE IS DISMISSED. 13. GROUND NO. 4 IN BOTH THE APPEALS OF THE ASSES SEE RELATE TO LEVY OF INTEREST U/S 234B OF THE ACT. THE LEVY OF INTEREST U/S 234B OF THE ACT BEING MANDATORY [COMMISSIONER OF INCOME TAX.VS ANJUM M. H . GHASWALA AND OTHERS 252 ITR 1(SC) AFFIRMED BY HON'BLE APEX COUR T IN THE CASE OF CIT V. HINDUSTAN BULK CARRIERS [2003] 259 ITR 449 (SC) AND IN THE CASE OF CIT V. SANT RAM MANGAT RAM JEWELLERS [2003] 264 ITR 564 (SC) ] WHILE NO SUBMISSIONS HAVING BEEN MADE BEFORE US BY THE LD. AR ON BEHALF OF THE ASSESSEE THESE GROUNDS ARE DISMISSED.. 14. NO ADDITIONAL GROUND HAVING BEEN RAISED IN TE RMS OF RESIDUARY GROUND NO. 5 IN THE TWO APPEALS OF THE ASSESSEE ACCORDINGLY TH IS GROUND IS ALSO DISMISSED. I.T.A. NO.2014/AHD/2007 15. ADVERTING NOW TO THE APPEAL OF THE REVENUE FOR THE AY 2003-04 THE FOLLOWING ARE THE EFFECTIVE GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITI ON OF RS.5 LACS ON ACCOUNT OF THE SHARE APPLICATION MONEY TREA TED AS UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME-TAX AC T. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW LEARNED CIT(A)-I SURAT OUGHT TO HAVE UPHELD THE OR DER OF THE ASSESSING OFFICER TO THAT EXTENT. I.T.A. NO.618 1785& 2014/AHD/2007 14 16. AT THE OUTSET THE LD AR ON BEHALF OF THE ASS ESSEE BROUGHT TO OUR NOTICE THAT TAX EFFECT IN THIS CASE IS BELOW THE LIMITS PRESCRI BED BY THE CBDT FOR FILING APPEALS AND TAX EFFECT DOES NOT INCLUDE INTEREST AS PER INS TRUCTION NO. 5 OF 2007 DATED 16.7.2007 . IN THIS CASE TAX EFFECT ON THE ADDITIO N OF RS.5 LAKHS DISPUED BY THE REVENUE IN THEIR GROUND OF APPEAL IS ONLY RS.1 83 7 50. THE LD. DR DID PLACE ANY MATERIAL BEFORE US DISPUTING THE AFORESAID WORKING OF TAX EFFECT IN TERMS OF THE CBDT INSTRUCTIONS NOR THE LD. DR COULD POINT OUT T HAT THE CASE FALLS WITHIN ANY OF THE EXCEPTIONS IN CBDT INSTRUCTION NO .279/MISC.- 64/05-ITJ DATED 24.10.2005 OR EARLIER INSTRUCTION N O. 1979 DATED 27.3.2000 AS CLARIFIED VIDE SUBSEQUENT INSTRUCTION NO. 1985 DATED 29.6.2000. 17. IN VIEW OF THE FOREGOING AND IN THE LIGHT OF AFORES AID INSTRUCTION DATED 24.10.2005 OF THE CBDT AND DECISION DATED 5.8.2008 OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. CONCORD PHAMACEUT ICALS IN TAX APPEAL NOS. 1402 TO 1405 OF 2007 AS ALSO CONSISTENT VIEW TAK EN BY VARIOUS HIGH COURTS IN THE CASE OF CIT VS. CHHAJER PACKAGING AN D PLASTICS P.LTD. 300 ITR 180(BOM.) CIT VS. CAMCO COLOUR CO 2 54 ITR 565(BOM.) & CIT VS. ZOEB Y TOPIWALA 284 ITR 379(BO M) CIT VS. S.ANNAMALAI 258 ITR 675(MADRAS) AND HONBLE DELHI H IGH COURT IN THEIR ORDER DATED 1.8.2007 IN ITA NO. 683/2007 IN T HE CASE OF CIT VS. MANISH BHAMBRI THIS APPEAL CAN NOT BE ENTERTA INED. 18. RESPECTFULLY FOLLOWING THE AFORESAID DECISIONS OF THE HON'BLE JURISDICTIONAL HIGH COURT AND OTHER HIGH COURTS THIS APPEAL BY T HE REVENUE IS DISMISSED IN LIMINE. I.T.A. NO.618 1785& 2014/AHD/2007 15 19. IN THE RESULT ALL THE THREE APPEALS A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26TH D AY OF FEBRUARY 2010. SD/- SD/- (BHAVNESH SAINI) (A.N. PAHUJA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD DATED : 26TH FEBRUARY 2010 PK/- COPY TO: 1. THE ASSESSEE 2. ITO WARD-1 SURAT 3. CIT(A)-I SURAT 4. CIT CONCERNED BY ORDER 5. DR B BENCH DEPUTY REGISTRAR ITAT AHMEDABAD