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TMI Blog2024 (6) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer (DVO) rather he was having the power under section 50A of the Act to refer the case to the valuation officer in case the valuation adopted by the assessee was lower than the fair market value. But at the same time section 50A of the Act inserted by Finance Act, 2012 is prospective in nature as has been held by Hon ble Jurisdictional High Court in case of CIT vs. Pooja Print [ 2014 (1) TMI 764 - BOMBAY HIGH COURT] So in view of the matter, we are of the considered view that the AO has no power to replace the valuer s opinion which is based upon facts and data available in public domain, with its own opinion, hence addition made by the AO and confirmed by the Ld. CIT(A) is ordered to be deleted. Disallowance of payments made to Piramal Enterprises Ltd (PEL) u/s 40A(2)(b) - disallowance on account of royalty and professional/management services on the ground that these payments are unreasonable, excessive and services are general in nature - AO has disallowed the royalty @ 0.2% of the turnover and 25% of the other fees paid on ad-hoc basis - HELD THAT:- These payments have been made by the assessee in accordance with the agreement which is continuing since 1995. Services rende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -ordinate Bench of the Tribunal restored the issue back to AO as held approval by the competent authority in Form no.3CM is mandatory for claiming deduction under section 35(2AB) of the Act. The same view has also been expressed in Vivimed Labs Ltd [ 2016 (2) TMI 418 - ITAT HYDERABAD] However, considering the contention of the learned Sr. Counsel that the assessee has applied for approval in Form no.3CM which is still pending, we are inclined to restore the issue to the Assessing Officer for providing an opportunity to the assessee to furnish the approval of the competent authority in the prescribed manner for claiming deduction under section 35(2AB) of the Act. Thus ground is allowed for statistical purposes. Disallowance of depreciation on capital expenses of R D unit - depreciation claimed by the assessee on opening WDV of computer software - HELD THAT:- Since the AO has followed his finding returned on this issue of A.Y. 2004-05 which has been overturned by the Tribunal by directing the AO to consider software and computer as one block the issue is remitted back to the AO to decide within six months from the receipt of copy of order as per findings returned by the Tribunal in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital gain on sale of RP house is to be taxed over four years. So in view of the matter ground has become infructuous. Correct head of income - Treating Rental Income from RPIL House as Income from other sources or income from house property - HELD THAT:- Accordingly following the order passed by the co-ordinate Bench of the Tribunal on the identical issue in for A.Y. 2003-04 [ 2021 (10) TMI 505 - ITAT MUMBAI] 2004-05 [ 2022 (6) TMI 1460 - ITAT MUMBAI] .AO is directed to assess the rental income of let out portion of RP house as income from house property. This ground is decided in favour of the assessee. Taxability of gain on repayment of Sales Tax Deferral Loan - AO has not considered the claim made by the assessee that gain on repayment of sale tax differential loan as capital receipt on the ground that no fresh claim can be made by the assessee except by filing revised return - HELD THAT:- Where the assessee has made premature payment of deferred sales tax at present value of certain amount against the total liability as in the instant case, and credited balance amount to its capital reserve account, the said credited amount was a capital receipt. In view of the matter the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and ought to have held that the compensation is paid to the Appellant for settlement due to termination of right to carry on the business of distribution of RDG's products and the right lost by the Appellant company vide agreement dated 20.10.2004 is a capital asset covered under the head Capital gains u/s 45(1) of the Act. 3. Therefore, the Appellant, prays that the aforesaid receipt of compensation be treated as Capital Gain. Ground II: Addition on account of recalculation of capital gain on sale of Flat at Malbar Hill: Rs. 2,98,680/- 1. On the facts and in the circumstances of the case and in law, the CIT (A) erred in confirming the action of the AO of not allowing the fair market value of the flat as on 1.4.1981, based on the valuation report, wherein the fair market value given is Rs. 1,600/-, for arriving at the cost of acquisition for the purpose of computing Long Term Capital Gains on sale of flat at Malbar Hill and thereby confirming an addition of Rs. 2,98,680/-. 2. He failed to appreciate and ought to have held that the Appellant had taken into consideration the correct market value of the flat based on valuation report from a registered Valuer. 3. The Appellant, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... promotion expenses. Ground VI: Disallowance of deduction u/s 35(2AB) and u/s 35(1)(iv) in respect of Chennai unit: Rs. 3,19,78,297/- 1. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the action of the AO of disallowing deduction u/s 35(2AB) and u/s 35(1)(iv) in respect of R D (Revenue and Capital) expenses related to Chennai unit amounting to Rs. 3,19,78,297/- as excess deduction claimed on the alleged ground that appellant can claim the deduction only after date of approval i.e. 23.2.2005. 2. In doing so, the CIT(A) has directed the AO to verify the actual figures and recompute the disallowance. 3. He failed to appreciate and ought to have held that the Appellant was entitled to claim deduction from the starting date of the Chennai Unit in accordance with the period mentioned in the application. Since recognition was accorded till 31.3.2007 as per appellant's application it is therefore allowed for the period mentioned in the application and the deduction is to be allowed for the relevant financial year. 4. The Appellant prays that the A.O. be directed to allow aforesaid expenses u/s 35(2AB)/35(1)(iv) of the Act. 5. Without prejudice, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd hence the purchases are wholly and exclusively related to use of the computers and hence are correctly shown as additions under the head computers and depreciation @ 60% is allowable on the same. 3. The Appellant therefore prays that, depreciation on computer software be allowed @ 60% as correctly claimed by the Appellant. GROUND X: Addition on account of increase in the value of closing stock: Rs. 2,07,14,000/- 1. On the facts and circumstances of the case and in law, the CIT(A) erred in directing the AO as regard to the recomputation of closing stock by not only adding back closing balance of unutilised MODVAT credit but by also including the element of MODVAT credit on purchases and sales. 2. In doing so, the CIT(A) has further erred in holding that no adjustment in the opening stock is possible by relying on the decision in case of Melmould Corporation v. CIT (202 ITR 789) and observing that decision of Mahavir Aluminium (297 ITR 77) shall not apply. 3. He failed to appreciate and ought to have held that he has no powers to set aside the issue to the AO for verification instead he should have deleted the disallowance on the basis of submissions made by the Appellant. Further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) erred in upholding the action of the A.O of treating the Rental Income from RP House as Income from Other Sources instead of Income from House Property as offered by the Appellant on the alleged ground that the Appellant is not the owner of the property. 2. He failed to appreciate and ought to have held that the Appellant was the owner of the property for the year under consideration. 3. The Appellant, therefore, prays that the A.O be directed to treat the Rental Income from above property as Income from House Property GROUND XV: Taxability of gain on repayment of Sales Tax Deferral Loan: Rs. 8.23 crores 1. On the facts and circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO of not considering the claim for gain on repayment of Sale Tax Deferral Loan as capital receipt on the alleged ground that no fresh claim can be made except by filing a revised return. 2. In doing so, he further erred in holding that the aforesaid amount is a trading receipt/business income relying on the decision of Chowrighee Sales Bureau p. Ltd. (87 ITR 542). 3. He failed to appreciate and ought to have held that as per legal position of law the said gain is not a r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration and adjudication of the issues at hand are : the assessee company being into manufacturing and sale of pharmaceuticals deals in both prescription and DTC products as well as bulk drugs, chemicals and skincare products, filed its return of income for the year under consideration which was subjected to scrutiny. The assessee by filing the aforesaid appeal raised multiple grounds numbering 15 challenging the impugned order passed by the Ld. CIT(A). Our findings on the aforesaid grounds are as under: Assessee s appeal bearing ITA No. 3706/M/2010 Ground No.1 4. During the year under consideration as has been noticed from the computation of income assessee company is shown to have received an amount of Rs. 92,76,62,688/- from Roche Diagnostics Gmbh (RDG) of Germany under a settlement agreement towards termination of agency, distribution and manufacturing rights granted to it by RDG vide agreement dated 30.06.1997 which has been offered by the assessee to tax under the head capital gains instead of showing the same as business income. However, declining the contentions raised by the assessee the Assessing Officer (AO) proceeded to hold that the proceeds received by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd No.1 the assessee has also raised additional ground No.1(a) that compensation received on termination of agreement to the tune of Rs. 92,76,62,688/- is a capital receipt. 8. Additional ground raised by the assessee is allowed being legal ground which does not require any investigation by the Revenue Authorities as the same can be raised at any stage of the proceedings. 9. However, on the other hand, the Ld. D.R. for the Revenue in order to repel the arguments addressed by the Ld. A.R. for the assessee relied upon the order passed by the Ld. CIT(A) and contended that since the amount received by the assessee is an income from settlement made outside the court in United Kingdom (UK) the Revenue has rightly treated it as business income. It is further contended by the Ld. D.R. for the Revenue that when the assessee company and RDG have entered into an agreement to do business any settlement amount arisen out of it is the business income. 10. Before proceeding further we would like to bring on record some undisputed facts pertaining to the issue in question inter-alia that the assessee, earlier known as Nicholas Piramal India Ltd. (NPIL) had entered into an Agreement for Distributio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement to RDG or its subsidiary, associated or related company. Thus, clearly, reference it to transfer of business. - Article 3.5 NPIL shall sell its entire stock/inventory as on 01st January 2005 to RDG at landed cost. - Article 6.1 of the settlement agreement specifies that NPIL shall ensure a smooth transfer of entire business relating to the products of RDG. - Article 8 - Employees of NPIL to be transferred to RDG. - Article 6.8 - RDG to help assist NPIL to collect outstanding payments due to NPIL from its customers and distributors indicates all future dealings with the customers and distributors would be with RDG. 13. The Ld. A.R. for the assessee while referring to the aforesaid provisions of settlement agreement contended that since it has transferred entire business and its rights under the agreement (supra) has been terminated thus the amount received in consideration thereof is assessable as capital gain. It is further contended by the Ld. A.R. for the assessee that rights under the agreement are capital assets and relied upon the decision rendered by Hon ble Bombay High Court in case of CIT vs. Tata Services Ltd. (1979) (1 Taxman 427) 14. However, on the other hand, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee on various bulk products of biochemical was agreed upon as under: (viii) that as per article 9.1 of the ADMA agreement (supra) ordering procedure has been laid down containing therein that in order to enable BM to arrange for purchasing, planning and order processing, NPIL shall provide BM with return estimates of the local sales, the purchase requirements and firm orders of product in quantity and value according to BM forecast. 15. It is also agreed upon regarding order procedure for specific products if so requested by BM the parties agree upon specific ordering procedures for specific products with respect to raw materials, the parties agree that the order lead time shall be approximately three months. 16. In article 10.2 delivery of terms as to the delivery of products are agreed upon by stating therein that BM shall affect delivery of products ordered by NPIL in accordance with agreed upon ordering procedures as quickly as reasonably possible. 17. In the backdrop of the aforesaid terms and conditions the first question arises to be determined by the Bench is: As to whether compensation received by the assessee from RDG on account of termination of agency and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gin of 40% on the net sales of laboratory diagnostics. Similarly in case of Patient Care Diagnostics parties to the agreement agreed that the assessee shall as a general rule receive a weighted overall margin of 40% on the net sales such diagnostics and BM shall have a weighted average contribution of level (ii) of 40%. 24. It is also agreed upon between the parties as per clause 11.1.2.3.2 as a general rule the assessee shall receive a margin of 25% on instruments of the net sales and the BM shall have a level (ii) contribution of 40%. Terms for bio-chemicals as per clause 11.1.2.4 have also been settled between the parties for making payment of commissions on various bulk products viz. Fine Chemicals, Biocatalyst, Bulk Diagnostics. 25. So in view of the matter, we are of the considered view that when the assessee company by virtue of the agreement (supra) got non transferable, non assignable license to manufacture, market, distribute and sell products otherwise owned by the BM for a satisfied commission as agent of the assessee in the face of the fact that the entire intellectual property qua distribution and manufacturing of the product will remain with BM and the assessee shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red by the assessee. 30. So the contention raised by the Ld. A.R. for the assessee is that the compensation received by it from RDG is for transfer of business which is a capital asset and thus chargeable as capital gains is not sustainable. 31. The Ld. CIT(A) at page 12 has thrashed the facts in the light of the decision rendered by the Hon ble Supreme Court in case of Kettlewell Bullen and Co. Ltd. vs. CIT [53 ITR 261 (SC)], CIT vs. Rai Bahadur Jairam Valji 35 ITR 148 (SC), CIT vs. Chari and Chari Ltd. 57 ITR 400 (SC) Oberoi Hotel Pvt. Ltd. vs. CIT 236 ITR 903 and the decision rendered by Hon ble Madras High Court in case of Indo Foreign Traders (P) Ltd. vs. CIT (1987) 166 ITR 308 (Mad.) and Chemplant Engineers (P) Ltd. vs. CIT (234 ITR 23). 32. Hon ble Supreme Court in case of Kettlewell Bullen and Co. Ltd. (supra) held that where payment is made to compensate a person from cancellation of contract, as in the instant case qua agency distribution agreement dated 03.06.1997 terminated vide settlement agreement dated 20.10.2004 and such cancellation has left the assessee free to carry on his trade the receipt is revenue receipt. 33. Similarly, Hon ble Supreme Court in case of CIT v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion business the compensation is in respect of business loss and employment. Rather in the preceding para it is discussed that after termination of the agency and distribution assessee s business has been increased considerably. 37. Moreover, when the assessee and the RDG were entered into agreement to do business and any settlement arrived at between them for termination of the business would be business income. The assessee has also raised one additional ground to supplement ground No.1 to the effect that compensation received on termination of agreement is a capital receipt. When it is nowhere case of the assessee that it has lost its livelihood on account of termination of the business agreement compensation received by it by virtue of the termination agreement is business income. 38. So in view of what has been discussed above, we are of the considered view that answer to questions framed in para 11 17 of the order is compensation received by the assessee from RDG to the tune of Rs. 92,76,62,688/- in out of court settlement is a business income and not an income assessed to capital gains as claimed by the assessee and as such provisions contained under section 28(ii)(c) read w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registered valuer's comments that the value of the Assessee's flat should be increased by 5 to 10% more than the normal rates published without any differentiating facts are not maintainable. 41. When the assessee has calculated the cost of acquisition on the basis of fair market value determined by the government valuer the AO has no right to replace the government approved valuer s opinion on his own. 42. Admittedly for the year under consideration the AO did not have the power to refer the matter for valuation to the Department Valuation Officer (DVO) rather he was having the power under section 50A of the Act to refer the case to the valuation officer in case the valuation adopted by the assessee was lower than the fair market value. But at the same time section 50A of the Act inserted by Finance Act, 2012 is prospective in nature as has been held by Hon ble Jurisdictional High Court in case of CIT vs. Pooja Prints (2014) 43 taxmann.com 247 (Bombay) by returning following findings: 8. The contention of the revenue that in view of the amendment to Section 55A(a) of the Act in 2012 by which the words is less then the fair market value is substituted by the words is at va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods manufacture and traded. Thus, it is evident that the payment made of `822 crore to PEL constitutes both reimbursement of expenses and royalty. This fact is also clear from the working of reimbursement of expenses and royalty at Page 237 of the paper book, which indicates that an amount of ` 6.75 crore was for reimbursement of expenses and '1.47 crore towards royalty. From the assessment order, prima facie, it appears that the Assessing Officer while concluding that PEL has charged more to the assessee towards reimbursement of expenses than what is contemplated in the agreement is under a misconception of fact. However, in the order giving effect to the direction of the Commissioner (Appeals), the Assessing Officer has allowed the payment made towards expenditure fully and disallowed the amount of' 1.47 crore towards royalty. When the terms of the agreement specifically provide for payment of royalty and royalty was paid in compliance to such term, there is no justification for disallowance of royalty payment. Disallowance made is deleted. 47. So by following the order passed by the co-ordinate Bench of the Tribunal (supra) issue as to the payment of royalty is decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned, the AO has been directed to verify the facts and maintenance charges claimed by the assessee are concerned, the AO has been directed to verify and allow the same being in the nature of revenue expenses. In these circumstances we direct the AO to decide the maintenance charges claimed by the assessee after due verification as per directions given by the Ld. CIT(A) within six months from the date of receipt of the order. So ground No.4 is also partly decided in favour of the assessee. Ground No.5 53. Ground No.5 is not pressed by the assessee, hence the same is dismissed as not pressed. Ground Nos.6 7 54. The assessee has claimed research and development expenses incurred during the year under consideration for Mulund unit, Mumbai and Ennore unit, Chennai as under: (in Lakhs) i) R D - revenue exp. u/s 0.35(2AB) Rs. 4140.62 ii) R D - capital exp. (building) u/s 0.35(1)(iv) Rs. 3196.96 iii) R D - capital exp. (Plant machinery, computers, etc) u/s 0.35(1)(iv) Rs. 2350.13 Rs. 9687.71 55. We have perused the impugned order passed by the Ld. CIT(A) who has directed the AO to verify the actual figures/expenses to work out the disallowance by returning following findings: * The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... competent authority in Form no.3CM is mandatory for claiming deduction under section 35(2AB) of the Act. The same view has also been expressed in Vivimed Labs Ltd. (supra). However, considering the contention of the learned Sr. Counsel that the assessee has applied for approval in Form no.3CM which is still pending, we are inclined to restore the issue to the Assessing Officer for providing an opportunity to the assessee to furnish the approval of the competent authority in the prescribed manner for claiming deduction under section 35(2AB) of the Act. This ground is allowed for statistical purposes. 58. Since the issue is identical the same is restored to the AO to decide after providing opportunity of being heard to the assessee in view of the directions given by the Tribunal extracted above. Consequently ground No.6 is allowed for statistical purposes. 59. Ground No.7 is interconnected with ground No.6 being claim of depreciation on capital expenses and it is to be decided by the AO accordingly in the light of the findings returned on issue in ground No.6. Ground Nos.8 9 60. The AO has disallowed the depreciation claimed by the assessee on opening WDV of computer software by foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e. Rs. 86.56 lakhs should be allowed as part of the opening stock in A.Y.2002-03. This claim of the assessee was allowed by the ld. AO by increasing the opening stock to the extent of Rs. 86.56 lakhs and the net addition on account of unutilised MODVAT credit was made by the ld. AO at Rs. 66,27,443/-. This action of the ld. AO was upheld by the ld. CIT(A). We find that this issue was the subject matter of adjudication by this Tribunal in assessee‟s own case for A.Y.2009-10 in ITA Nos.1257/Mum/2014 1486/Mum/2014 dated 07/05/2019 wherein it was held as under:- Adjustment of Inventory as per Sec. 145A : Rs. 1,16,08,088 21. We shall now advert to the contention of the ld. A.R that the A.O/DRP had erred in re-computing the value of the closing stock‟ at Rs. 15,982.73 lacs as against Rs. 14,834 lacs and opening stock‟ at Rs. 14,367.65 lacs as against Rs. 13,335 lacs, on the ground that the assessee is following exclusive method of accounting for MODVAT with regards to its inventory. It is the claim of the ld. A.R that irrespective of whether the assessee follows Inclusive or Exclusive method of valuation of stock, the amount of unutilized MODVAT shall have no bearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee that the deviation on the profit of the year on account of method of valuation prescribed under Sec. 145A is Rs. Nil, which formed part of the tax audit report as Annexure B‟. 22. We have deliberated at length on the issue under consideration and find that the assessee for the purpose of its statutory accounts had followed the AS-2 on Valuation of Inventories, and the Guidance Note on Accounting Treatment of MODVAT/CENVAT issued by the ICAI. Accordingly, the assessee had followed the exclusive method for accounting purposes. However, for the purposes of income-tax it had worked out the impact of grossing up of tax, duty, cess etc. by restating the values of purchases and inventories by including inter alia the CENVAT credit. The adjustment required u/s 145A of the I.T Act was reflected in Clause 12(b) of the tax audit report of the assessee. As per Clause 12(b) the adjustment u/s 145A worked out at Nil. It is the claim of the assessee that the amount reflected in Clause 12(b) of the tax Audit report shall be treated as the adjustment required u/s 145A, and in support thereof had relied on the order of the ITAT, Mumbai in the case of Hawkins Cookers Ltd. Vs. ITO (20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and as revenue receipt. During the course of argument the assessee was called upon to produce the evidence regarding loss incurred by it due to accidental fire which the assessee has not brought on record. Moreover all the four policies purchased by the assessee was for plant machinery. The Ld. A.R.s for the parties to the appeals unanimously contended that the issue be remitted back to the AO to decide afresh on verifying the actual loss incurred by the assessee due to accidental fire. In view of the matter for cause of substantive justice the issue is remitted back to the AO to decide afresh within six months from the date of receipt of the order on filing actual loss suffered due to accidental fire. So ground No.11 is decided in favour of the assessee for statistical purposes. Ground No.12 66. The AO made an addition of Rs. 3,49,90,566/- on account of capital gain on sale of RP house by the assessee on protective basis. The Ld. A.R. for the assessee contended that the assessee has transferred house property namely RP house over a period of four years and offered the capital gain to tax over the respective period whereas the AO has assessed the entire amount in A.Y. 2002-03. 67. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he directed the Ld.AO to treat the rental income as income from other house property and grant statutary deduction in terms of section 24(a) of the Act. Against the direction, the revenue is not in appeal before us. We find that the ownership of the RPIL House Vests with the assessee for four years and hence assessee continued to be the owner of the part premises of RPIL House and hence, the rental income thereon should be assessed only under the head Income From House Property and the assessee would be entitled for statutary deduction @30% u/sec. 24(a) of the Act for the same. Accordingly, the ground NoIX raised by the assessee is allowed. 44. The Ld.AR submitted that the assessee continues to be the owner of the part premises of RP house, therefore rental income has to be assessed under the head Income From House Property and supported the submissions with the decision of the Honble Tribunal for A.Y.2003-04. The Ld.DR fairly accepts the ITAT decision and accordingly, we direct the A.O. to assessed the rental income under the income from house property and allow deduction u/sec. 24(a) of the Act and we allow the ground of appeal in favour of the assessee. 72. Accordingly following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereof. As rightly noted by the Tribunal, the sales tax collected by the assessee during the relevant year was treated by the State Government as loan liability payable after 12 years in 6 annual/equal instalments. Subsequently and pursuant to the amendment made to the 4th proviso to section 38 of the Bombay Sales Tax Act, 1959, the assessee accepted the offer of SICOM, the implementing agency of the State Government, paid certain amount to SICOM, which, according to the assessee, represented the NPV of the future sum as determined and prescribed by the SICOM. In other words, what the assessee was required to pay after 12 years in 6 equal instalments was paid by the assessee prematurely in terms of the NPV of the same. That the state may have received a higher sum after the period of 12 years and in instalments. However, the statutory arrangement and Vide section 38, 4th proviso does not amount to remission or cessation of the assessee's liability assuming the same to be a trading one. Rather that obtains a payment to the State prematurely and in terms of the correct value of the debt due to it. There is no evidence to show that there has been any remission or cessation of the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of assets of BMIL. In the case of PHL the said concern had not claimed depreciation for AY 1996-97. The depreciation was thrust upon the AO. My learned predecessor had held that the AO was not justified to thrust upon the depreciation. In view of this decision of my learned predecessors in the case of the appellant itself for AYrs 1997-98,1998-99,1999- 2000,2000-01, 2001-02, 2002-03 and 2003-04, and 2004-2005 the AO is directed that the depreciation not claimed by BMIL and M/s PHL should not be considered for the purpose of working out the WDV and consequently allowing depreciation thereon. 9.5. In the result this ground of appeal is allowed. 77. It is brought to the notice of the Bench by the Ld. A.R. for the assessee that the findings returned by the Ld. CIT(A) in favour of the assessee have been upheld by the Tribunal in assessee s own case for A.Y. 2004-05 in ITA No.769/M/2008 decided on 20.06.2022. This legal position has not been controverted by the Ld. D.R. So the ground raised by the Revenue is hereby dismissed. Ground No.2 78. The assessee company has offered receipt of its rental income from the property located in centre point to tax under the head income fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al on the issue of allowability of claim under section 35A of the Act. Therefore, considering the fact that in the preceding assessment years assessee's claim of deduction under section 35A of the Act has been allowed, applying the rule of consistency also assessee's claim of deduction in the impugned assessment year cannot be disallowed. Therefore, we uphold the decision of the learned Commissioner (Appeals) on this issue by dismissing the ground raised by the Revenue. (Underlined for Emphasis). 83. So in view of the matter we are of the considered view that the Ld. CIT(A) has rightly allowed the claim of deduction made by the assessee under section 35A of the Act. Accordingly, ground Nos.3 4 are decided against the Revenue. Ground No.5 84. The Revenue by raising ground No.5 challenged the findings returned by the Ld. CIT(A) qua deduction under section 80HHC for the purpose of section 115JB to be worked out on the basis of adjusted book profit following the decision of Special Bench of the Tribunal in case of DCIT vs. Syncom Formulations (I) Ltd. 106 ITD 193. Special Bench of the Tribunal in the case (supra) while allowing the deduction under section 115JB held that deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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