Income Tax Appellate Tribunal - Kolkata
Assam Carbon Products Ltd. vs Assistant Commissioner Of Income Tax on 23 December, 2005
Equivalent citations: (2006)100TTJ(KOL)224
ORDER
M.V. Nayar, A.M.
1. The assessee is in appeal against the order of the learned CIT(A)-2, Guwahati, vide appeal No. GUWA-4/2003-04, dt. 24th Nov., 2003.
2. The grounds of appeal by the assessee are as under :
(1)(a) That neither the learned AO was justified in disallowing the appellant's claim under Section 80-IB of the IT Act, 1961, to the extent of Rs. 1,82,10,073 nor the learned CIT(A) was justified in confirming the disallowance.
(b) That there is no basis for the observation made by the learned CIT(A) that the appellant adopted colourable device for claiming exemption.
(c) That the learned CIT(A) was not justified in not admitting the documents produced before him.
(d) That the learned CIT(A), on a proper consideration of the relevant material and basis, ought to have held that the appellant was entitled for full deduction under Section 80-IB of the IT Act, 1961, as claimed by it.
2. That neither the learned AO was justified in making a disallowance of Rs. 25,000 under the head subscription nor the learned CIT(A) was justified in confirming the disallowance.
3. That the appellant craves leave to submit any other ground(s) on or before the hearing of the appeal,
3. The assessee is a public -limited company having its registered office at Birkuchi, Guwahati (Assam). It is engaged in the business of manufacture of electrical carbon and mechanical products. For the year under appeal, the assessee-company filed its return of income on 30th Nov., 2000 showing a total income of Rs. 28,19,760. The assessment was completed by the AO under Section 143(3) after making the following additions :
_________________________________________________________________ Sl. No. Particulars of addition made Amount (Rs.) _________________________________________________________________
1. Disallowance of generator subsidy 48,281
2. Disallowance of subscription 25,000
3. Disallowance of advertisement and publicity expenses 40,000
4. Disallowance of expenses debited under the head 'postage, telephone & fax' 25,000
5. Disallowance under Section 43B 5,279
6. Disallowance of claim under Section 80-IB (Rs. 2,13,30,870 - 31,20,797) 1,82,10,073 _________________________________________________________________ Total disallowance/addition to total income 1,83,53,633 _________________________________________________________________
4. The learned CIT(A) confirmed the disallowance under Section 80-IB of Rs. 1,82,10,073 and also disallowance of subscription to the tune of Rs. 25,000.
5. Against this, the assessee is in appeal before us.
6. The facts of the case are that the appellant-company manufactures electrical carbon and mechanical carbon products. NH coke is an important intermediary raw material used by the company for manufacture of electrographitized carbon blocks. The company has two units at Guwahati (hereinafter referred to as Unit-I and Unit-II) and one industrial unit at Patancheru in Andhra Pradesh (hereinafter referred to as Unit-Ill). Unit-I and Unit-II are set up in the same premises. Unit-II was set up in the year 1971 for manufacture of carbon brushes, carbon blocks and mechanical carbon blanks, Unit-I was set up in technical collaboration with Morgan Crucible Company Pic, U.K., in the financial year 1993-94 for manufacturing intermediary product (semi-finished product) i.e., NH coke.
6.1 The product of Unit-I, i.e., NH coke is mainly used for captive consumption at Unit-II. Further, as stipulated by the Government of India, a part of the produce of Unit-I viz., NH coke was compulsorily exported at predetermined price to group company in the United Kingdom. From the very inception, i.e., from the year 1975, the company had been importing this material from its collaborators in the UK at substantial cost of foreign exchange. The reason for importing the said material was that the company did. not possess the expertise and technical know-how for producing the same. This resulted in high input cost resulting in insignificant profits and even losses upto the asst. yr. 1992-93. Later on, after prolonged discussions and negotiations with its foreign collaborators, the company finally obtained the expertise and know-how for in-house production of NH coke in 1993 and then accordingly set up Unit 4 for manufacture of NH coke. The project started commercial production during the financial year 1993-94. This led to substantial reduction in costs and the company was transformed into a profit-making concern from the very first year of commercial production, i.e., 1993-94. This is clearly evident from the details of profit/loss of the company for financial years 1983-84 to 1998-99 :
Financial year Profit/Loss
(Rs. in lakhs)
1983-84 (4.49)
1984-85 30.40
1985-86 37.11
1986-87 48.20
1987-88 59.32
1988-89 16.43
1989-90 (22.08)
1990-91 30.89
1991-92 (19.97)
1992-93 (88.14)
1993-94 149.41
1994-95 205.19
1995-96 210.38
1996-97 220.02
1997-98 382.07
1998-99 234.01
6.2 Unit-I, being a new industrial unit set up in the financial year 1993-94 for manufacture of intermediary product viz., NH coke, qualified for deduction under the erstwhile Section 80-IA. Accordingly, the company claimed deduction under Section 80-IA for 6 years upto financial year 1998-99 (relevant to asst. yr. 1999-2000). Sec. 80-IA was, however, substituted by Sections 80-IA and 80-IB by Finance Act, 1999, w.e.f. 1st April, 2000. Consequently, the company claimed deduction under corresponding Section 80-IB for 4 years w.e.f. asst. yr. 2000-01 ending with asst. yr. 2003-04. While claiming deduction under Section 80-IB, the transfer value of products used for captive consumption by other unit was valued at Rs. 357.32 per kg., being the notional imported cost (i.e., the landed cost). The said price was higher than the price at which the said product had been exported to group concern as per export stipulations laid down by the Government of India, viz., Rs. 137.45 per kg. The appellant-company claimed that since NH coke was an import substitute, the same had to be valued at the landed cost. The landed cost was determined on the basis of proforma invoice dt. 17th Jan., 2000 received from Morganite Electrical Carbon Ltd. of UK from whom the company used to import NH coke prior to set up of Unit-I. Copy of the said proforma invoice is enclosed at p. 90 of the paper book. Accordingly, the appellant claimed deduction under Section 80-IB for asst. yr. 1999-2000 as under :
Deduction under Section 80-IB (being profit of Unit-I) Amount (Rs.) Sales (export) 1,00,63,741 Value of captive consumption (82,822 kgs. x 357.32) 2,95,93,957 ___________ 3,96,57,698 Less : Expenses of Unit-I 1,83,26,828 ___________ Allowable deduction 2,13,30,870 ___________ The P&L a/c for the year ended 31st Jan., 2000 of the NH coke unit is enclosed at p. 55 of the paper book.
6.3 The claim of the assessee for earlier years under Section 80-IA was allowed in full. However, in respect of asst. yr. 2000-01, an identical claim under Section 80-IB was disallowed to a substantial extent by the AO. While dealing with the impugned issue, the AO accepted the following contentions of the assessee :
(i) That the assessee was eligible for 100 per cent deduction under Section 80-IB in respect of profits derived from Unit-I i.e., the NH coke unit.
(ii) That the production of NH coke was in effect an import substitute which in fact was a backward linkage to its existing products manufactured by Unit-II i.e., carbon blocks and brushes.
6.4 However, the AO opined that since the assessee had actually exported NH coke to sister concern at Rs. 137.45 per kg., the said price should have been taken for the purpose of claiming deduction under Section 80-IB of the Act. He alleged that the assessee had used a colourable device to show a major part of its total profits as coming from NH coke unit (i.e., Unit-I) so as to evade taxes and that the assessee had failed to produce any document of sale/production that had taken place in the country in support of the price claimed for deduction under Section 80-IB. He further observed that the proforma invoice from Morganite Electrical Carbonite Ltd. carried the name of the assessee as the consignee but no such sale had taken place and that the assessee had asked the said company to give invoice to support the price shown in the accounts. Further, since the proforma invoice did not carry any signature from Morganite Electrical Carbonite Ltd., no reliance could be placed on such paper by the assessee in support of its claim. The AO further observed that since the proforma invoice was dt. 17th Jan., 2000, the same could not be used to determine the value of goods transferred to finishing unit on various dates throughout the financial year. Accordingly, the profits derived from Unit-I and consequent deduction under Section 80-IB was recomputed by the AO as under :
Deduction under Section 80-IB Amount (Rs.) Sales (export) 1,00,63,741 ___________ Value of captive consumption (82,822 kgs. x 137.45) 1,13,83,884 ___________ 2,14,47,625 Less : Expenses claimed 1,83,26,828 ___________ Allowable deduction 31,20,797 ___________
7. Shri S.K. Tulsiyan, learned Authorised Representative, appeared for the assessee. His submissions are as under:
7.1 The fact that the assessee is entitled to 100 per cent deduction in respect of profits derived from Unit-II [being situated in North Eastern Region as provided under second proviso to Section 80-IB(4)] is undisputed. Further, the fact that goods held for the purposes of eligible business (viz., Unit-I) have been transferred to other business carried on by the assessee (viz., Unit-II) is also undisputed. Again, the AO also agrees that for the purpose of computing the deduction allowable under Section 80-IB, as per express mandate of Section 80-IA(8), applicable for computing the quantum of deduction by virtue of Section 80-IB(13), the 'market value' of such goods as on the date of transfer has to be determined. For the said purpose, 'market value' has been defined to mean the price which the impugned goods would ordinarily fetch on sale in the open market. Under the facts and circumstances of the case, as narrated above, the primary area of dispute boils down to :
(i) Whether, taking into consideration the fact that the impugned goods are import substitute and no other unit manufactures NH coke in India, the landed cost (import value) thereof would be indicative of the market value in terms of the Explanation appended to Section 80-IA(8) for the purpose of deduction under Section 80-IB; or
(ii) Whether, the price at which the goods (have) actually been exported to sister concern out of compulsion as per stipulations of the Government of India could be termed as 'market value' in terms of the said Explanation.
7.2 In regard to the above, it is submitted that the grade of NH coke produced by the assessee company is the raw material used for making Morgan grade carbon materials and, Morgan grade materials are only produced in the world by associate or subsidiary companies of the Morgan Crucible Company Pic, UK. Neither the assessee nor any other Morgan group companies sell this material to companies outside the group in order to ensure that their grade of materials are not produced by any other company. In order to have a complete picture of the assessee's case, it will be relevant to peruse the production history of the assessee company.
7.3 The assessee-company was incorporated under the Companies Act, 1956. In the year 1973, Morgan Crucible Company Pic, UK (hereinafter referred to as MCCP) entered into a joint venture agreement with the assessee-company and provided the technology to manufacture the Morgan grades of electrographite (EG) and resin bonded (RB) materials in return for a 30 per cent share of equity capital of the assessee-company. The technology specifically excluded the process for the manufacture of NH coke, the core base material for EG grades. The assessee imported NH cokes from. Morgan Electrical Carbon Ltd. (hereinafter referred to as MECL), subsidiary of MCCP upto financial year 1992-93. This resulted in significant cost of production and low profitability, The assessee-company, however, had no other option since no other unit was manufacturing NH coke in India and as such, anybody who wanted to purchase NH coke from the open market had to import it from the Morgan group. The landed cost of NH coke imported from MECL for financial year 1992-93 was Rs. 298.70 per kg. Break-up of the said cost along with the invoice dt. 1st March, 1993 received from MECL are enclosed at pp. 161-163 of the paper book.
7.4 On 21st Sept., 1991, MCCP and the assessee-company signed a memorandum of understanding to the effect that subject to the approval of the Government of India, MCCP would subscribe for additional shares sufficient to bring their overall share capital in the assessee-company to 51 per cent at the prevailing market price, MCCP would thereafter inter alia, transfer new technologies to the assessee-company in order to substitute imports of NH cokes by producing NH cokes within the assessee-company and progressively using indigenous raw materials. Copy of foreign collaboration agreement dt. 11th March, 1992 between the assessee-company and MCCP is enclosed at pp. 127-135 of the paper book.
7.5 The aforesaid agreement was, however, subject to the stipulations laid down by the Government of India and the permission from RBI. The Government of India vide letter No. FC-II, 69(91), dt. 13th Dec, 1991 (copy enclosed at pp. 122- 126 of the paper book) laid down the following conditions for grant of approval to the aforesaid foreign collaboration proposal :
(iv) This approval is further subject to the condition that the collaborators have undertaken to buy-back 55 per cent of the annual production over a period of 5 years.
(v) The outflow of foreign exchange on account of dividend payments will be balanced by export earnings on the following basis :
(a) The balancing of dividend would be over a period of 7 years from commencement of production. Balancing will not be required beyond this period.
(b) Remittance of dividends should be covered by earnings of the company from export of items covered by foreign collaboration agreement. You are also permitted to cover remittance of dividends from earnings through export of items not covered in the list of agreement provided they are covered in the list of industries in Annex. III. The amount of dividend payments may be covered by export earnings of such items recorded in years prior to the payment of dividends or in the year of payment of dividends.
(c) Dividend balancing will be on the entire foreign equity holding.
7.6 Further, the RBI vide letter No. EC.CO.FITT.1539/A-g/91/92, dt. 2nd Jan., 1992 (enclosed at pp. 120-121 of the paper book) inter alia, stipulated as under:
6. The outflow of foreign exchange on account of dividend should be covered by your export earnings during a period of seven years from the date of commencement of commercial production. The amount of dividend should be covered by export earnings of items included in Annex. III, either manufactured by you or procured from third parties in years prior to remittance of dividend or in the year of dividend. For remittance of dividend, you may approach Calcutta Regional Office of the Exchange Control Department.
7.7 The export of impugned goods viz., NH coke at a price of Rs. 137.45 per kg. to MCCP, UK, took place in the aforesaid backdrop. The said price was not determined by the law of demand and supply but was imposed and dictated by MCCP. As stated above, for the purpose of computing the deduction allowable under Section 80-IB in case of captive consumption of goods, Section 80-IA(8) provides that the market value of such goods as on the date of transfer has to be determined. The Explanation appended to Section 80-IA(8) defines 'market value1 as under :
'market value', in relation to any goods, means the price that such goods would ordinarily fetch on sale in the open market.
7.8 The term 'open market' has been defined in the Advanced Law Lexicon by P. Ramanatha Aiyar, 3rd Edition, 2005 (Book 3) at page No. 3349 as under :
Open market-Market in which goods are available to be brought and sold by any one who cares to. Prices on an open market are determined by the laws of supply and demand (Investment: International Accounting, Banking).
If the transactions of sale and purchases are effected under conditions enabling every person desirous of purchasing the goods to place orders with such manufacturing unit and obtain supplies, they will constitute purchases from the open market.- Ahura Chemicals Products (P) Ltd. v. Union of India .
7.9 In the instant case, the price at which the assessee-company exported goods (NH coke) to MCCP cannot be termed as the open market value. As stated above, the assessee-company was earning marginal profits and even incurring losses prior to entering into collaboration with MCCP for in-house production of NH coke. MCCP agreed to impart the necessary technical know- how to the assessee-company, but only after acquiring at least 51 per cent of the equity share capital of the assessee-company. The said arrangement would however, result in outflow of foreign exchange on account of payment of dividend to MCCP. As such in order to save the foreign exchange reserves of the country, the Government of India and the RBI stipulated that the foreign collaborator would have to necessarily buy-back 55 per cent of the annual production of the impugned goods over a period of 5 years and that the outflow of foreign exchange on account of dividend should be covered by export earnings of the assessee-company during a period of 7 years from the date of commencement of commercial production.
7.10 Taking into consideration the fact that MCCP was itself producing NH coke at substantially low cost of production, the said company could not be compelled to buy-back NH coke from the assessee-company at the prevailing market price which was inevitably high due to forces of demand and supply. Even the assessee-company agreed to export NH coke to MCCP at the price dictated by the latter out of compulsion and in order to fulfil the conditions laid down by the Government of India, which was the only available option for acquiring impugned technical know-how for production of NH coke. The said price was undisputedly much lower than the prevailing market value. Nevertheless, since the said substantial part of the fixed cost, the assessee- company agreed to export NH coke to MCCP below the prevailing market prices. However, it should be kept in mind that the assessee-company would never sell Morgan grade NH coke outside the group to any other concern at the said price.
7.11 As such taking into consideration the totality of the facts and circumstances of the assessee's case, the price at which it actually exported goods to MCCP can in no way be termed as indicative 'market value' in terms of the Explanation to Section 80-IA(8). The price at which the goods were actually exported to MCCP was dictated/imposed by the latter. It is not the price which the impugned product would ordinarily fetch on sale in the 'open market' between a willing buyer and a willing seller. The impugned export transactions were not effected under conditions enabling every person desirous of purchasing the goods to place orders with the manufacturing unit and obtain supplies. As such, the impugned export did not constitute open market transaction. If the said price is taken to be the 'market value' in terms of Explanation to Section 80-IA(8), the whole purpose of enacting the said section i.e., to value goods in case of captive consumption at the 'open market value', will be rendered nugatory. Reliance.in this connection is placed on the ratio of judgment of the Hon'ble Calcutta High Court in the case of Commr. of Agrl. IT v. Manmatha Nath Mukherjee , wherein it was held as under:
that a market connoted freedom of bargain and when the agents of the State seized paddy under the authority of some law and paid for it at some rate fixed by themselves they did not create a regulated market; they created no market at all; therefore, the Tribunal erred in taking into account the procurement rate.
7.12 Now, looking at the case from the other angle, if for any reason, the assessee stopped producing NH coke, the only available option would be to meet its requirement through imports. In fact, since the Morgan grade NH coke was not produced by any other unit in India, any person willing to procure the same would have to import it from the Morgan group. Prior to setting up of Unit- I, even the assessee had been importing the said intermediary product from Morgan Electrical Carbon Ltd. As such, taking into consideration the fact that the impugned product was an import substitute, the only way to arrive at the representative market value was to take the notional landed cost of import. The term 'open market value' has been defined in the Advanced Law Lexicon (supra) at p. 3349 as under:
Open market value (OMV). The price which would be paid by a willing buyer to a willing seller at the port of landing, is the open market value of the goods. Byrne v. Low (1972) 3 All ER 526, 529 (QBD).
7.13 In view of the above, the assessee was completely justified in valuing the internal transfer for captive consumption of NH coke (i.e., transfer of NH coke to Unit-II) at the landed cost. For arriving at such price, the sole way out was to obtain the quotation from the company's erstwhile foreign supplier viz., Morgan Electrical Carbon Ltd. As regards the AO's allegation that the proforma invoice from Morganite Electrical Carbomte Ltd, carried the name of the assessee as the consignee but no such sale had taken place, it is submitted that the assessee had followed the established system of obtaining quotation from the foreign supplier in the form of a proforma and calculated the landed cost therefrom. It was submitted before the learned CIT(A) that no commercial establishment would import an. item only for the sake of ascertaining the landed cost. Further, as regards the objection of the AO that the invoice was not signed, it was submitted that computerized quotations and enquiries are generally not signed. The appellant, however, produced before the learned. CIT(A) an authenticated copy of the proforma invoice in original. The learned CIT(A) refused to take the same into consideration on the pretext that the said document was not produced before the AO. In this regard, it is submitted that the AO never required the assessee to produce authenticated and signed copy of protorma invoice at the time of assessment proceedings. As such, the assessment order was passed without allowing sufficient opportunity to the assessee to adduce the impugned evidence. Thus, the learned CIT(A) should have admitted the additional evidence under Rule 46A(1)(d). Copy of the authenticated and signed copy of proforma invoice dt. 17th Jan., 2000 is enclosed at p. 140 of the paper book.
7.14 Furthermore, regarding the objection of the AO as to how the assessee relied on the proforma invoice of one date while speaking of the value of transfer of goods to its finishing unit on various dates, it was submitted before the learned CIT(A) that for all bulk purchases,, the assessee contracted a price for the entire year and the delivery was obtained in phases. This was done to avoid any price fluctuation with concomitant effect on profit projections. The learned CIT(A) failed to dislodge the said explanation of the assessee. He erred in blindly following the order of the AO without giving his own independent findings on the matter.
7.15 It is pertinent to note that the assessee had claimed a similar deduction under Section 80-IA in the asst. yr. 1994-95 wherein the AO accepted the assessee's claim under the said section but disagreed with the method of calculation of profit. Aggrieved by the said order, the assessee-company preferred an appeal before the learned GIT(A). After verifying all the relevant facts and records, the learned CIT(A) vide order dt. 17th Dec, 1997 directed the AO to allow the claim of the assessee. Copy of assessment order for asst. yr. 1994-95 is enclosed at pp. 1-6 of the paper book-II. Further, copy of order of learned CIT(A) for the said year allowing the claim of the assessee is enclosed at pp. 7-15 of the paper book-II. It may be noted that even for asst. yr. 1999-2000, the assessee-company had valued the NH coke transferred to Unit-II at landed cost in order to ascertain the deduction under Section 80-IA. The same was allowed by the Department. The assessee had also exported NH coke in earlier years at prices lower than the landed cost and the Department had accepted said formula. As such, there is no reason why the AO should not allow a similar claim of the assessee for the year under consideration i.e., asst. yr. 2000-01. Since the method of valuation of internal transfers of NH coke at landed cost was accepted in earlier assessment years, it was not open for the AO to take a different view in the matter in the assessment year under consideration in the absence of any fresh material being placed before him. Reliance in this connection is being placed on the ratio of judgment of the Hon'ble Punjab & Haryana High Court in the case of CIT v. Gitish Mohan Ganenwala . Held (at para 2 of the order) as under :
It is not in dispute that the Department in the previous assessment year had treated such transactions in the hands of the assessee as his income from capital gains. The findings in the previous years, no doubt, do not operate as res judicata but that does not mean that in every subsequent year it is open for the AO to take a different view in the matter. Of course, he can take a different view if some fresh material is placed before him. The CIT(A) and also the Tribunal have found that no fresh material is placed before the AO.
7.16 Similar view was taken by the Hon'ble Delhi High Court in the case of CIT v. Neo Poly Pack (P) Ltd. wherein it was held as under :
the doctrine of res judicata does not apply to income-tax proceedings since each assessment year is independent of the other but where an issue had been decided consistently in a particular manner for earlier assessment years, for the sake of consistency the same view should continue to prevail for subsequent years unless there is material change in the facts. Since in the instant case there was no single distinguishing feature prompting a different view, the income was liable to be assessed as business income.
7.17 The aforesaid view is further fortified by the direct authority of the Hon'ble Supreme Court in the case of Radhasoami Satsang v. CIT . Held as under :
We are aware of the fact that, strictly speaking, res judicata does not apply to income-tax proceedings. Again, each assessment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year.
On these reasonings, in the absence of any material change justifying the Revenue to take a different view of the matter and, if there was no change, it was in support of the assessee, we do not think the question should have been reopened and contrary to what had been decided by the CIT in the earlier proceedings, a different and contradictory stand should have been taken.
7.18 In view of the above, it is submitted that the assessee's action of valuing the goods transferred from Unit-I to Unit-II for captive consumption at the notional landed cost for the purpose of claiming deduction under Section 80-IB is perfectly within the four corners of law. The AO's allegation that the assessee used a colourable device so as to evade taxes, is misplaced and unsubstantiated. Accordingly, judgment of the Hon'ble Supreme Court in the case of McDowell & Co. Ltd v. CTO (1985) 47 CTR (SC) 126 referred to by the Revenue authorities, is not applicable to the assessee's case. As such, it is prayed most respectfully that the claim of deduction under Section 80-IB be allowed in full to the assessee-company.
8. Shri A. Raju, learned Departmental Representative appeared for the Revenue. He relied on the orders of the AO and the learned CIT(A).
9. We have examined the rival submissions. We find that the assessee's claim under Section 80-I was allowed by the Department upto financial year 1998-99 i.e., relevant to the asst. yr. 1999-2000. The assessee had entered into a technical collaboration with the Government for getting approval. As a result of this collaboration, the assessee had to export NH coke in order to pay dividends. The export was made to the company from whom technical collaboration was made. As a result thereof, the assessee-company earned profits whereas previously they had incurred losses. We are of the view that whatever was done by the assessee was based on commercial expediency subject to the Government regulation. We also agree with the view of the learned Authorised Representative of the assessee that the open market price would be that price the assessee could obtain NH coke in the open market. We also note that the Revenue has accepted the orders of the learned CIT(A) and did not come to the Tribunal, when similar matters were decided upon in earlier years. After considering all the circumstances and the principles of consistency, we decide the appeal in favour of the assessee on the first ground. The AO is directed to allow the assessee's claim under Section 80-IB. The order of the learned CIT(A) is set aside and the claim of the assessee is allowed on the first ground.
10. The assessee has also raised the second ground against the order of the learned CIT(A) in confirming a disallowance of Rs. 25,000 as made by the AO.
11. We find no merit in this ground of assessee's appeal. The order of the learned CIT(A) is confirmed and the appeal of the assessee on the second ground is dismissed.
12. The third ground of appeal is general in nature and does not require any adjudication.
13. In the result, the assessee's appeal is partly allowed.