Income Tax Appellate Tribunal - Ahmedabad
Vimlachal Print & Pack Pvt.Ltd., ... vs Assessee on 11 February, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "C" BENCH AHMADABAD
आयकर अपील य अ
धकरण, अहमदाबाद यायपीठ 'सी'
Before: Shri Rajpal Yadav, Judicial Member
Shri Manish Borad, Accountant Member
ITA Nos. 2651/Ahd 2013 &
847/Ahd/2012
Assessment Years : 2003-04& 2004-05
Vimalachal Print & Pack Pvt. Ltd. Vs. Addl. C.I.T.,
5, Saket Industrial Estate, 437, Range-8, Ahmedabad
Moraiya, Bavla National Highway,
Nr. Changodar, Tal: Sanand, Dist:
Ahmedabad
&
Vimalachal Print & Pack Pvt. Ltd. Dy.C.I.T.,
st
1A, Upnishad Complex, 1 Floor, Circle-8, Ahmedabad
Nr. Railway Crossing, Ambawadi,
Ahmedabad - 382213
PAN No. AAACV7000Q
(Appellant) .. (Respondent)
आवेदक क ओर से/By Assessee Shri N. C. Amin, A.R.
राज व क ओर से /By Revenue Mrs. Anita Hardasani, Sr. D.R.
सन
ु वाई क तार ख/Date of Hearing 16.12.2015
घोषणा क तार ख/Date of 11.02.2016
Pronouncement
ORDER
PER : Rajpal Yadav, Judicial Member
The present two appeals are directed at the instance of assessee against the orders of ld. CIT(A) -III, Ahmedabad dated 20.09.2013 & ld. CIT(A)-XIV, Ahmedabad dated 19.03.2012 passed for A.Ys. 2003-04 & 2004-05 I T A N o s . 8 4 7 / A h d / 1 2 & 2 6 5 1 / A h d / 1 3 A . Y. 0 4 - 0 5 & 0 3 - 0 4 (Vimalachal Print & Pack Pvt. Ltd.) Page 2 respectively. Since, common issue are involved in both the appeals, therefore, we heard them together and it may be appropriate to dispose of them by this common order. The grounds of appeal taken by the assessee in both the years are not in consonance with Rule 8 of ITAT Rules, 1963. They are descriptive and argumentative in nature.
2. In brief, the grievance of the assessee in both the years relates to two folds, namely, (a) ld. CIT(A) has erred in confirming the reopening, & (b) ld. CIT(A) has erred in confirming the action of the Assessing Officer for excluding interest amount to Rs.23,60,073/- and Rs.50,96,774/- in A.Y. 2003- 04 & 2004-05 from the eligible profit computed for grant of deduction u/s.80IB of the Income Tax Act.
3. As far as A.Y. 2004-05 is concerned, ld. counsel for the assessee did not press the ground challenging the reopening of assessment. Therefore, in A.Y. 2004-05, this ground of appeal is rejected.
4. Now, we take first fold of grievance in A.Y. 2003-04. The brief facts of the case are that assessee has filed its return of income for A.Y. 2003-04 on 20.10.2003 declaring total income of Rs.1,24,71,980/-. The assessment order was passed u/s.143(3) of the Income Tax Act on 23.03.2006 determining the total income at Rs.1,30,65,240/-. Assessee is eligible for grant of deduction u/s.80IB of the Act. This deduction was granted to the assessee, however, subsequently, without there being any fresh information, ld. A.O. harbored a belief that in the eligible profit computed for the purpose of granting deduction of interest amounting to Rs.23,06,073/- was also included. Therefore, he recorded the reasons and issued notice u/s.148 of the Act. The reasons recorded by the A.O. are reproduced on page 2 of the impugned order. It is pertinent to take note of these reasons. They read as under:
"Deduction u/s.80IB is allowable to certain industrial undertaking from such profit and gains as derived from the eligible business of an amount equal to such percentage I T A N o s . 8 4 7 / A h d / 1 2 & 2 6 5 1 / A h d / 1 3 A . Y. 0 4 - 0 5 & 0 3 - 0 4 (Vimalachal Print & Pack Pvt. Ltd.) Page 3 and for which number of years as specified in this section, subject to the fulfillment of certain condition there under:
It was judicially held by the Hon'ble Supreme Court in the following cases:
1. Sterling Food Ltd. Vs. CIT 237 ITR 579
2. Hindustan Lever ltd. Vs. CIT 239 ITR 217
3. Pandian Chemicals Ltd. Vs CIT 262 ITR 278 That the words "derived from Industrial undertaking should have direct nexus between profit of business and income derived from undertaking. Thus, income derived from other than industrial undertaking is required to be excluded while allowing the deduction u/s. 80IA/80IB.
Further, as per the following decisions "interest income earned does not have direct nexus with income derived from industrial undertaking and required to be excluded while allowing the deduction u/s. 80IA/80IB.
1. Pandian Chemicals Ltd Vs. CIT262 ITR 278 (SC)
2. CIT Vs. Standard Motors Products of India Ltd 46 ITR 814 (Mad)
3. Nahar Exports Vs. CIT 156 Taxman 305 (2006) (P&H)
4. Inductotherm (India) Ltd Vs. DCIT 75 TTJ 728 (Ahd)
5. Bio Pharam Vs. DCIT 85ITD 575 (Ahd) ITAT: Ahmedabad Bench 'A ' in the case of Neptune Steel Vs. ACIT, Circle -2 Baroda (ITA No. 131/Ahd/2004) and Auto Stamping Pvt. Ltd Vs. DCIT, Cir-2, Baroda (ITA No. 132/Ahd/2004) following the decisions of Hon'ble High court of Punjab & Haryana in the case of Rani Paliwal Vs. CIT (2003) [185 CTR 333] (P&H) held that the decision of special Bench of IT AT, Delhi directing to consider the net interest for the purpose of section 80IA no more holds goods and it is now settled that the deduction u/s. 80IA is to be allowed by excluding the gross interest.
The assessments of the company engaged in the business of manufacturing of printed and laminated papers was completed on 23/03/2006 for the A.Y. 2003-04. The deduction u/s. 80IB(3) was allowed at Rs. 442993/-for the A.Y. 2003-04.
During the A. Y. 2003-04, the assessee company has received the other interest income of Rs. 2360073/- which were not against interest payment and debited to P&L A/c. The details of which is as under [as per separate P & L A/c. of Changodar Unit (eligible unit) A.Y. Interest received Interest Paid Net debited to P&L A/c 2003-04 Rs.2360073 Rs.4389296 Rs.2029223 The said interest income of Rs.2360073/- being other income was required to be excluded from eligible profit of the business before granting the deduction u/s. 80IB as decided in various judicial decisions cited above.
I T A N o s . 8 4 7 / A h d / 1 2 & 2 6 5 1 / A h d / 1 3 A . Y. 0 4 - 0 5 & 0 3 - 0 4 (Vimalachal Print & Pack Pvt. Ltd.) Page 4
5. Dissatisfied with the reopening of assessment, assessee carried the matter before the ld. CIT(A) but could not get any relief and ld. CIT(A) has upheld the reopening of the assessment.
6. Ld. counsel for the assessee while impugning the orders of revenue authorities below contended that the notice u/s.148 of the Act has been issued upon the assessee on 17th March, 2009, meaning thereby, it was issued after expiry of four years from the end of this assessment year. As per the proviso appended to the Section 147 of the Income Tax Act, where an assessment has been made u/s.143(3) of the Act and four years expired from the end of the relevant assessment year, then the A.O. cannot issue notice u/s.148 of the Act, unless the income chargeable to tax has escaped assessment on account of the failure of the assessee to disclose all material facts fully and truly. Ld. counsel for the assessee took us through the reasons and pointed out that A.O. nowhere alleged which particular information was not disclosed by the assessee which is relatable to assessement of its income. The ld. A.O. has made reference to the decisions of Hon'ble Supreme Court which were also there when original assessment order was passed. Thus, according to the ld. counsel for the assessee, the re-assessment order is not sustainable.
7. On the other hand, ld. D.R. relied upon the orders of the A.O.
8. We have duly considered rival contentions and gone through the record carefully. We find that on the strength of authoritative pronouncement at the end of the Hon'ble High Courts as well as of the Hon'ble Supreme Court, the ITAT in the case of Neptune Textile Mills Pvt. Ltd. Vs. ACIT ITA No.2195/Ahd/2009 made a lucid enunciation of the scope of section 147. We cannot do better than extracting the discussion made by the Tribunal in this regard. It reads as under:
"7. We have considered the rival submissions and perused the material on record. In our considered view the reopening of the assessment is bad in law. For the sake of convenience we reproduce section 147 and proviso thereto:- 147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped I T A N o s . 8 4 7 / A h d / 1 2 & 2 6 5 1 / A h d / 1 3 A . Y. 0 4 - 0 5 & 0 3 - 0 4 (Vimalachal Print & Pack Pvt. Ltd.) Page 5 assessment for any assessment year, he may subject to the provisions of sections 148 to 153 assess or re-assess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year):
Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year;
[Provided further that the AO may assess or reassess such income other than the income involving matters which are the subject matters of any appeal, reference or revision which is chargeable to tax and has escaped assessment].
The requirements of the section are as under :-
(1) The AO has reason to believe;
(2) That an income chargeable to tax has escaped assessment; (3) If four years have expired from the end of the relevant Asst. Year then such escapement was due to failure on the part of the assessee-
(i) to file a return u/s 139;
(ii) to file a return in response to notice u/s 142(1) or section 148;
(iii) to disclose fully and truly all material facts necessary for the assessment.
All these aspects must come in the reasonings recorded by the AO. The reasons recorded by the AO should reflect -
(i) assessee in respect of whom assessment is sought to be reopened;
(ii) assessment year as sought to be reopened;
(iii) amount of income which has escaped assessment;
(iv) how the original assessment has been done whether u/s 143(1) or u/s
143(3) or sec.147/148;
(v) what is the reason of escapement of assessment;
(vi) whether there is any failure as mentioned in the proviso if assessment is
sought to be reopened after four years from the end of the relevant Asst. Year;
(vii) in particular, whether there is any the failure of the assessee to disclose material facts fully and truly necessary for the assessment for that assessment year.
(viii) if assessment is done u/s 143(1), then whether the provision of section 149 are applicable.
8. If reasons recorded did not reflect these ingredients then reopening cannot be sustained. On the aspect of necessity to mention the failure of the assessee to disclose truly and fully all material facts necessary for assessment Hon. Allahabad High Court I T A N o s . 8 4 7 / A h d / 1 2 & 2 6 5 1 / A h d / 1 3 A . Y. 0 4 - 0 5 & 0 3 - 0 4 (Vimalachal Print & Pack Pvt. Ltd.) Page 6 in CIT vs. Pradeshiya Industrial and Investment Corporation of Uttar Pradesh Ltd (2011) 332 ITR 324(All) has observed as under :-
"Admittedly, notice under section 148 of the Act was issued after the expiry of four years. The notice under the proviso of section 147 of the Act can be issued after the expiry of four years only in case where income chargeable to tax has escaped assessment by reason of the failure on the par! of the assesses to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment for that assessment year. From the perusal of the reason recorded it is apparent that no case has been made out that the assesses had failed to disclose fully and truly all material facts necessary for his assessment and no observation has been made in this regard, On the basis of the same material which was available on record, the assessing authority was of the view that the deduction had been wrongly allowed under section 36(1)(viii) of the Act. The Tribunal observed that the assessee had furnished the requisite details in respect of leasing income and upfront fee as received in the assessment year under consideration and the same was duly disclosed in the audited profit and loss account, as is evident from pages 4 and 5 of the paper book read with page 23 of the paper book and also computation of income filed along with return, a copy of which is placed at pages 33 to 35 of the paper book. This finding of the Tribunal has not been disputed by raising any question and during the course of the argument by the learned counsel for the appellant. Therefore, we are of the view that on the facts and circumstances, no substantial question of law arises for consideration by this court.
Learned counsel for the appellant cited a decision of the Bombay High Court in the ease of Dr. Amin's Pathology Laboratory v. P. M. Prosad, Joint CIT [2001] 252 ITR 673 ; [2002] 172 CTR 696. We have gone through the decision of the Bombay High Court. We are of the view that the said decision is not applicable to the facts of the present case. In the said case, the Bombay High Court has held that the assessing authority has overlooked the disputed item which he has noticed subsequently and at the time of passing the original order of assessment, he could not be said to have opined on the above item. Therefore, there was no change of opinion. While in the present case, complete details were furnished along with the return and during the course of the assessment proceedings and after an application of mind, the deduction under section 36(1)(viii) of the Act was allowed. In the reason recorded no case has been made out that there was failure to disclose any material particular on the part of the assessee. Therefore, limitation beyond the period of four years was not available to the assessing authority. Admittedly, the notice was issued after four years, therefore, the proceeding was barred by time and the Tribunal has rightly held so.
For the reasons stated above, the appeal fails and is dismissed."
Hon. Bombay High Court, in the case of Bhavesh Developers vs. A.O. & Others (2010) 329 ITR 249 (Bom), noted that the recorded reasons did not show finding that there was a failure to disclose necessary facts. In that case assessee has claimed deduction u/s 80IB(10) for Rs.3.85 crores which was allowed by the AO vide order u/s 143(3) and assessment was sought to be reopened after expiry of four years on the ground that the claim of deduction u/s 80IB(10) included ineligible items of other income such as society deposits, street parking charges, sundry balances, etc. Hon. Bombay High Court in the case of Bhavesh Developers vs. A.O. & Others (supra) observed as under :-
I T A N o s . 8 4 7 / A h d / 1 2 & 2 6 5 1 / A h d / 1 3 A . Y. 0 4 - 0 5 & 0 3 - 0 4 (Vimalachal Print & Pack Pvt. Ltd.) Page 7 "Held, allowing the petition, that ex facie, the reasons which had been disclosed to the assessee would show that the inference that the income had escaped assessment was based on the disclosure made by the assessee itself. The reasons showed that the finding was based on the details filed by the assessee and from the profits and loss account. Therefore, it was impossible for the Assessing Officer to even draw the inference that there was a failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for assessment year 2002-03. Significantly, the reasons that had been disclosed to the assessee did not contain a finding to the effect that there was a failure to fully and truly disclose all necessary facts, necessary for the purpose of assessment. In these circumstances, the condition precedent to a valid exercise of the power to reopen the assessment, after a lapse of four years from the relevant assessment year, was absent in the present case. The notice was not valid and was liable to be quashed."
Hon. Supreme Court in the case of ITO vs. Lakhmani Mewal Das (1976) 103 ITR 437 (SC) held that where assessment is sought to be reopened after expiry of four years reasons for belief must show live link between the material and belief. There should be a rational connection or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the ITO and the formation of the belief that there is an escapement of income of the assessee for that particular year because of his failure to disclose fully and truly all material facts. Even though Court cannot go into sufficiency or adequacy of the material and substitute its own opinion for that of the ITO on the point as to whether action should be initiated for reopening of the assessment, but at the same time we have to bear in mind that it is not any and every material, howsoever vague and indefinite or distant, remote and far fetched, which would warrant the formation of the belief relating to escapement of the income of the assessee from assessment.
Hon. Supreme Court in the case of CIT vs. Kelvinator India Ltd. (2010) 320 ITR 561(SC), while dismissing the legislation of section 147, held that expression "reasons to believe" needs to be given schematic interpretation in order to ensure against an arbitrary exercise of power by the AO. The power to reopen the assessment is not akin to power to review the assessment and mere change of opinion would not justify the course of action u/s 147. Unless the AO has tangible material fact to reopen the assessment, power u/s 147 cannot be validly exercised.
9. In the present case there is a clear case of change of opinion. Even though reliance has been placed on the decision of Hon. Supreme Court in Ballimal Navalkishore and others vs. CIT (supra), that judgment existed at the time when the AO took the decision u/s 143(3) and held the expenditure as current repairs allowable in the profit and loss account under section 143(3). Without there being material on record and an allegation of failure on the part of the assessee to disclose any material which could have made the AO to believe that expenditure so incurred was capital in nature, new view so taken for reopening of assessment would be only a change of opinion. Earlier same expenditure was held as revenue in nature and now considered as capital would be akin to reviewing his own decision on the subject. Hon. Bombay High Court in the case of ICICI Prudencial Life Insurance Co. Ltd. vs. ACIT (2010) 325 ITR 471 (Bom) also held that when there is no material on record and without there being any allegation of failure of the assessee to disclose such material fact, assessment cannot be reopened after four years. Hon. Gujarat High Court in Inducto Ispat Alloys Ltd. vs. I T A N o s . 8 4 7 / A h d / 1 2 & 2 6 5 1 / A h d / 1 3 A . Y. 0 4 - 0 5 & 0 3 - 0 4 (Vimalachal Print & Pack Pvt. Ltd.) Page 8 ACIT (2010) 320 ITR 458 (Guj) and Nikhil K. Kotak vs. Mahesh Kumar (2009) 319 ITR 445 (Guj) also held that where the period of four years has expired from the end of relevant Asst. Year the proviso to section 147 would come into play. It stipulates three conditions and one of those conditions is showing omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. When we go through the reasons recorded and as mentioned above we do not find any reference to such failure on the part of the assessee to disclose any material fact necessary for assessment and in fact narration given in the reasons do not show any such failure which could be inferred even if not so mentioned specifically in the reasons. In our considered view when neither there is any allegation of failure nor the AO has brought any material on record to suggest escapement of income then it is only a change of opinion and therefore assessment cannot be reopened after expiry of four years."
9. In the light of above, let us examine the facts of present case. On page no.5 of the paper book, the ld. counsel has placed on record a copy of questionnaire issued by the A.O. At Sl. Nos. 2 and 18 of questionnaire, ld. A.O. has called for specific details with regard to the computation of Section 80IB. The questions asked by the A.O. in the questionnaire on these Sl. Nos. read as under:
"Sub: Requisition of information u/s.142(1) in connection with the assessment proceedings for A.Y. 2003-04 ******************** Please refer to the above.
2. In this connection you are requested to produce the following details/clarifications/documents:
...........................................................................................
2. File the computation of profit unit wise to justify the deduction u/s.80IB(3)(i). Give description of production activity in each unit and a list of final products along with inputs.
........................................................................................... ...........................................................................................
18. Please give a proper break-up of the deduction claimed u/s.80IB with name and address of the unit and evidence regarding commencement of business of the same."
10. In the light of above, if we perused the reasons recorded by the A.O., then it would reveal that ld. A.O. has failed to lay his hand at any information which can indicate that assessee has not disclosed all material facts fully and truly with regard to the assessment of its income in this year. Ld. A.O. has re-appreciated the details already available on record. Therefore, the re-assessment order is not sustainable in the eyes of law. We allow this appeal and quash the assessment I T A N o s . 8 4 7 / A h d / 1 2 & 2 6 5 1 / A h d / 1 3 A . Y. 0 4 - 0 5 & 0 3 - 0 4 (Vimalachal Print & Pack Pvt. Ltd.) Page 9 order. Since, we have quashed the assessment order in this appeal, therefore, we do not deem it necessary to deal with the issue on merits.
Now, we take ITA No.847/Ahd/2012 (A.Y. 2004-05)
11. Ld. counsel for the assessee did not press the ground nos.1 & 2 vide which reopening of assessment has been challenged. Therefore, these grounds are rejected.
12. Next grievance of the assessee is that ld. A.O. has erred in excluding the sum of Rs.50,96,774/- from the eligible profit of the business before granting a deduction u/s.80IB.
13. The brief facts of the case are that assessee has claimed deduction u/s.80IB of the Act. As far as admissibility of the deduction is concerned, the ld. A.O. accepted the stand of assessee but observed that in the eligible profit assessee has included interest income also. According to the A.O., the interest income was not derived from eligible business. Therefore, it does not qualify for grant of deduction u/s.80IB of the Act. The ld. A.O. has excluded a sum of Rs.50,96,774/- from the eligible profit. The A.O. has made a very brief discussion on this issue in paragraph 8 of the assessment order which read as under:
8. The reliance of the assessee upon the judgement of the Hon'ble Apex Court in the case Appolo Tyres is misplaced. The Judgement of the Court was with respect to the powers of the Assessing Officer in making adjustments to the book profit under the provisions of M.A.T. The decision of the Hon'ble Court has no relevance to the instant case. The section 80IB(1) provides for deduction of profit and gains derived from eligible business. The word derived must be understood as something which has direct or immediate nexus with the assessee's industrial undertaking. The derivation of interest from fixed deposits and advances cannot be said to flow directly from the industrial undertaking itself. Therefore, the interest earned by the industrial undertaking does not qualify for relief u/s. 80IB. Reliance in this regard is placed upon the following decisions :
1. Sterling Food Ltd. Vs. CIT 237 ITR 579
2. Hindustan Lever ltd. Vs. CIT 239 ITR 217
3. Pandian Chemicals Ltd Vs. CIT 262 ITR 278 (SC) :
I T A N o s . 8 4 7 / A h d / 1 2 & 2 6 5 1 / A h d / 1 3 A . Y. 0 4 - 0 5 & 0 3 - 0 4 (Vimalachal Print & Pack Pvt. Ltd.) Page 10
4. CIT Vs. Standard Motors Products of India Ltd 46 ITR 814 (Mad)
5. Nahar Exports Vs. CIT 156 Taxman 305 (2006) (P&H)
6. Inductotherm (India) Ltd Vs. DCIT 75 TTJ 728 (Ahd)
7. Bio Pharam Vs. DCIT 85ITD 575 (Ahd) ;
9. The decisions of the Hon'ble Supreme Court in the case of Pandian Chemicals Ltd Vs. CIT 262 ITR 278 (SC) was delivered on 24-04-2003, which is amongst the latter judgements on this issue. There were hosts of other judgements which stated that interest income has to be excluded for the purpose of claiming deduction u/s.
80IB. The return of Income was filed by the assessee only on 25-10-2004. The assessee could not have been unaware of these binding and landmarks judgements.
10. In view of the above facts and circumstances of the case and various judicial decision referred to the above a sum of Rs.5096774/- is excluded from the eligible profit of the business before granting a deduction u/s. 80IB. As the assessee has furnished inaccurate particulars of income in spite of the provision of the law and various binding juridical decision penalty proceeding u/s. 271(1)(c) is being initiated.
11. Subject to the above, the total income of the assessee is computed as under:
Total Income of the assessee Rs.22025250/-
As per the return
Add: Depreciation on Good will as per
ITAT order ITA No.2568/Ahd/2007
Dated 28-12-2007 Rs. 444949/-
-------------------
Gross Total Income Rs.22470199/-
Less:
Deduction available u/s.80IB Rs. 4338896/-
--------------------
Net taxable Income Rs.18231303/-
============
14. The ld. counsel for the assessee, at the very outset, contended that interest income has not been assessed by the A.O. as 'income from other sources'. Therefore, the expenditure attributable to such interest income ought to be debited before excluding the interest income from eligible profit. In other words, only net interest income is to be excluded from eligible profit of the business before granting deduction u/s.80IB of the Act. He relied upon the judgment of Hon'ble Gujarat High Court in case of Nirma Industries Ltd. vs. DCIT 283 ITR 402 (Guj.). He prayed that this issue be set aside to the file of A.O. for re-examination because ld. A.O. has not examined the issue with the I T A N o s . 8 4 7 / A h d / 1 2 & 2 6 5 1 / A h d / 1 3 A . Y. 0 4 - 0 5 & 0 3 - 0 4 (Vimalachal Print & Pack Pvt. Ltd.) Page 11 angle that only net interest income is to be included. The ld. D.R. was unable to controvert this contention of the ld. counsel for the assessee.
15. On due consideration of the facts and circumstances, we are of the view that A.O. has mainly deliberated upon the issue of reopening. He has not examined the controversy with the angle whether the net interest income is to be excluded from the eligible profit or gross interest income. The ld. A.O. has not assessed the interest income as income from other sources. Therefore, we set aside this issue to the file of A.O. for fresh re-adjudication in the light of decision of Hon'ble Gujarat High Court in case of Nirma Industries Ltd. vs. DCIT (supra). No other issue was pressed. Therefore, appeal of the assessee is partly allowed for statistical purposes.
16. In the result, the appeal for A.Y. 2003-04 is allowed whereas appeal for A.Y. 2004-05 is partly allowed.
This Order pronounced in open Court on 11/02/2016
Sd/- Sd/-
(Manish Borad) (Rajpal Yadav)
Accountant Member Judicial Member
Ahmedabad: Dated 11/02/2016
True Copy
S.K.Sinha
आदे श क त ल प अ े षत / Copy of Order Forwarded to:-
1. अपीलाथ / Appellant
2. यथ / Respondent
3. संब$ं धत आयकर आय&
ु त / Concerned CIT
4. आयकर आय&
ु त- अपील / CIT (A)
5. 'वभागीय *त*न$ध, आयकर अपील य अ$धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड. फाइल / Guard file.
By order/आदे श से, उप/सहायक पंजीकार आयकर अपील य अ$धकरण, अहमदाबाद ।