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TMI Blog2011 (12) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... ODIA, JJ. Jay Rajkumar for the Appellant. P.F. Jain for the Respondent. ORDER A.K. Garodia, Accountant Member This appeal by the revenue has been directed against the order of Ld. CIT(A) XVI, Ahmedabad dated 15.01.2009 for the assessment year 2004-05. Ground No. 1 and 2 raised by the revenue are reproduced as under: "(1) The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 2,06,49,280/- made on account of Deduction u/s 80IB, though A.O. has given a clear findings that the assessee is not eligible for the deduction. (2) The Ld. CIT(A) has erred in deleting addition toward salary wages of Rs. 1,50,000/- each disallowed by A.O." 2. Regarding grounds No.1 2, Ld. D.R. relied on the order of the A.O. whereas it is submitted by the Ld. A.R. of the assessee that these issues are covered in favour of the assessee by the Tribunal decision in assessee's own case in assessment year 2003-04 and 2006-07 in ITA Nos.2061/Ahd/2007 and 1942/Ahd/2009 dated 12.08.2011. He submitted that the copy of this Tribunal order is available on pages 1 to 9 of the paper book. 3. We have considered rival submissions, perused the material on record and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accordingly, we do not find any reason to interfere in the finding recorded by the CIT (A) thereby treating the assessee as illegible for claim of deduction u/s. 80IB on the basis of number of workers employed in its Industrial Undertaking. 8. The next ground of the Revenue relates to deleting the disallowance of salary expenses incurred on the workers. In view of the finding that assessee was employing more than 10 workers, the actual salary paid to them was held to be allowable by the CIT (A). Accordingly, on the same reasoning as given in ground No.l of the department's appeal, we do not find any infirmity in the order of the CIT (A) for allowing claim of deduction on account of salary expenses of the employees. Accordingly ground taken by the Revenue in both the years on account of salary expenses are dismissed." 4. Since, the facts are identical in the present year, we do not find any reason to take a contrary view in the present year and hence, respectfully following the precedent, we decline to interfere in the order of Ld. CIT(A) on these two issues and ground No.1 2 are rejected. 5. The third ground has raised by Revenue is as under:- "(3) The Ld. CIT(A) has erre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal's order rendered in the case of Maanaraj Trading (P.) Ltd. v. DCIT [IT Appeal No.6695(M) of 2004, dated 27-05-2005.] Now, the Revenue is in appeal before us. 8. Ld. DR of the Revenue supported the assessment order, whereas Ld. AR of the assessee submitted the order of Ld. CIT(A). He also placed reliance on the Tribunal decision rendered in the case of Maanaraj Trading (P.) Ltd. (supra) and submitted that the copy of Tribunal's decision is available on pages 10-21 of the paper book and he also submitted that this decision was followed by Ld CIT(A) and there is no contrary decision available on this issue and therefore, the issue should be decided in favour of assessee by following the Tribunal's decision. 9. We have considered the rival submissions, perused the materials on record and gone through the orders of authorities below and also gone through the commentary in the book "Law of Income Tax" written by Shri A.C. Sampath Iyengar as revised by Shri S. Rajaratnam, 10th Edition, Volume-3, pages 4330-4332 which contains the discussion regarding indexation benefits for bonds and debentures. The relevant portion of this commentary being para-28 is reproduced below:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money to another; and (c) any instrument so attested, whereby a person obliges himself to deliver grain or other agricultural produce to another - Indian Stamp Act,1899, section 2(5)" (2) Securities. - Securities are defined in the same book as under: A security, speaking generally, is anything that makes the money more assured in its payment or more readily recoverable, as distinguished from, e.g. a mere I.O.U, which is only evidence of a debt - Stroud's Judicial Dictionary, 2nd ed." No doubt securities are widely defined under Securities Contracts (Regulation) Act, 1956 to include even shares and scrips besides stocks, bonds, debentures or other marketable securities apart from what is generally understood by the securities to mean Government securities. Stock will include either stock of shares or debenture stock or stocks given as securities for a specified sum demanded and not by way of any standard denomjnation. Since the proviso does not use the word "stocks", the stock of bonds or debentures will not be eligible for indexation. Hence, securities, when they are acquired as stock will not be so eligible, though stock of shares will be so eligible, the test being th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of a like nature in or of any incorporated company or other body corporate; (ia) derivative; (ib) units or any other instrument issued by any collective investment scheme to the investors in such schemes; (ic) security receipt as defined in clause (zg) of section 2 of the Securitisation and Reconstruction of financial Assets and Enforcement of Security Interest Act, 2002; (i) Government securities; (iia) such other instruments as may be decided by the Central Government to be securities; and (ii) rights or interest in securities". The above definition is an exclusive one even as indicated in section 2(42A) s confined to short term capital gains. The provisos to section 48, it may be pointed out, clearly makes a distinction between shares by a company (as in first proviso) and the security and debentures (in third proviso). The word "security" occurs in different contexts as in Explanation to sections 115AA, 194H, etc. but meaning has to be understood with reference to the context in each case. In the context of third proviso to section 48, bonds and debentures are those which are repayable in terms of money, so that there need be no doubt whatsoever, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch month and to pay back the investment/capital amount after the lapse of full term of 5 years. However, in case of premature with drawal by the assessee, there is no guarantee of protection of capital and the same will be repaid as per NAV. This is similar to FD NSC because in case of FD NSC, if there is premature withdrawal, penalty is levied rate of interest is also varied being applicable to the actual period of holding and in case interest is already paid, such deduction in interest penalty for premature withdrawal is deducted from capital. Merely for this reason, it cannot be said that repayment is not of a specified sum. Hence, in our considered opinion, UTI, MIP-99 is also a bond as per this definition of bond. 12. Since, the Tribunal in the case of Maanaraj Trading (P.) Ltd. (supra) has not decided this aspect as to whether UTI-MIP is bond or not, for deciding this aspect, there is no order of Tribunal to guide us and hence, we decide this aspect on the basis of above discussion and hold that UTI-MIP is a bond. Once, we hold so, the Tribunal order cited by Ld. AR of the assessee is not applicable in the present case because in that case, the Tribunal has proceede ..... 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