ACIT CIRCLE-2(1)(1), MUMBAI vs. M/S BOMBAY DYEING & MANUFACTURING CO. LTD. , MUMBAI

PER OM PRAKASH KANT, AM PER OM PRAKASH KANT, AM

These cross appeals by the assessee and Revenue are directed cross appeals by the assessee and Revenue are directed cross appeals by the assessee and Revenue are directed against two separate orders, both dated 09 against two separate orders, both dated 09th April, 2019 passed by April, 2019 passed by the Commissioner of Income the Commissioner of Income-tax (Appeals)-4, Mumbai [in short, ‘the 4, Mumbai [in short, ‘the Ld. Ld. CIT(A)] CIT(A)] for for Assessment Assessment Years Years 2014-15 2014 15 and and 2015-16, 2015 respectively.

3.1 The grounds raised by the assessee are reproduced as under: The grounds raised by the assessee are reproduced as under: The grounds raised by the assessee are reproduced as under:- “GROUND NO. 1: ADDITION OF INCREMENTAL LONG TE GROUND NO. 1: ADDITION OF INCREMENTAL LONG TERM CAPITAL GAINS RM CAPITAL GAINS OF RS. 3630,53,2577- ON CONVERSION OF LAND, BEING CAPITAL ASSET, INTO ON CONVERSION OF LAND, BEING CAPITAL ASSET, INTO ON CONVERSION OF LAND, BEING CAPITAL ASSET, INTO STOCK-IN-TRADE BY CONSIDERING COST INFLATION INDEX CCIT) OF THE TRADE BY CONSIDERING COST INFLATION INDEX CCIT) OF THE TRADE BY CONSIDERING COST INFLATION INDEX CCIT) OF THE YEAR OF CONVERSION INSTEAD OF CII OF YEAR OF SALE OF FLATS; YEAR OF CONVERSION INSTEAD OF CII OF YEAR OF SALE OF FLATS; YEAR OF CONVERSION INSTEAD OF CII OF YEAR OF SALE OF FLATS; On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the On the facts and circumstances of the case an d in law, the CIT(A) erred in confirming the action of the AO in taxing the incremental long term capital gains on account of conversion action of the AO in taxing the incremental long term capital gains on account of conversion action of the AO in taxing the incremental long term capital gains on account of conversion of land being capital asset into stock in trade by considering the CII of the year of of land being capital asset into stock in trade by considering the CII of the year of of land being capital asset into stock in trade by considering the CII of the year of conversion instead of CII of the year of actual sale of flats by the Appellant. conversion instead of CII of the year of actual sale of flats by the Appellant. The Appellant prays that the impugned addition of incremental long term capital gains of Rs. The Appellant prays that the impugned addition of incremental long term capital gains of Rs. The Appellant prays that the impugned addition of incremental long term capital gains of Rs. 36,30,53,2577- be deleted. be deleted. ROUND NO. 2 - ADDITION OF RS. ADDITION OF RS. 27.97,9357- TO BOOK PROFITS U/S. 115JB IN TO BOOK PROFITS U/S. 115JB IN RESPECT OF EXPENDITURE INCURRED IN RELATION TO EXEMPT INCOME F EXPENDITURE INCURRED IN RELATION TO EXEMPT INCOME F EXPENDITURE INCURRED IN RELATION TO EXEMPT INCOME U/S. 14A RWR 8D: On the facts and the circumstances of the case and in law, CIT (Appeal) On the facts and the circumstances of the case and in law, CIT (Appeal) On the facts and the circumstances of the case and in law, CIT (Appeal) has erred by not v / holding that addition to book profit under section 115JB of the Act cannot be made with holding that addition to book profit under section 115JB of the Act cannot be made with holding that addition to book profit under section 115JB of the Act cannot be made with reference to provisions of section 14A of the Act read with Rule 8D of the Income-tax Rules, reference to provisions of section 14A of the Act read with Rule 8D of the Income reference to provisions of section 14A of the Act read with Rule 8D of the Income 1962 ("the Rules").

M/s Bombay Dyeing & Manufacturing Co. Ltd. M/s Bombay Dyeing & Manufacturing Co. Ltd. 3 ITA Nos. 4484, 4485, 4291 & 4293/M/2019 ITA Nos. 4484, 4485, 4291 & 4293/M/2019

GROUND NO. 3 - SHORT CREDIT OF TDS; Rs. 1,44,21,9757 SHORT CREDIT OF TDS; Rs. 1,44,21,9757-: 1. On the facts and the circumstances of the case and in law, the ClT'(Appeal) erred in 1. On the facts and the circumstances of the case and in law, the ClT'(Appeal) erred 1. On the facts and the circumstances of the case and in law, the ClT'(Appeal) erred not adjudicating the ground of short credit of TDS amounting to Rs. 1,44,21,975/-. adjudicating the ground of short credit of TDS amounting to Rs. 1,44,21,975/ adjudicating the ground of short credit of TDS amounting to Rs. 1,44,21,975/ 2. Without prejudice to above, the Appellant prays that the.AQ.be directed to grant the 2. Without prejudice to above, the Appellant prays that the.AQ.be directed to grant the 2. Without prejudice to above, the Appellant prays that the.AQ.be directed to grant the credit of TDS of Rs. 1,44^1,975/- as per law.” credit of TDS of Rs. 1,44^1,975/ 3.2 The grounds raised by the The grounds raised by the Revenue are reproduced as under:- - 1. "Whether on the facts and in the circumstances of the case and in law, the Ld. 1. "Whether on the facts and in the circumstances of the case and in law, the Ld. 1. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the receipt of Rs.26,07,02,254/- as subsidy from the CIT(A) erred in holding that the receipt of Rs.26,07,02,254/ as subsidy from the Government of Maharashtra under ‘The Package Scheme, of Incentive Government of Maharashtra under ‘The Package Scheme, of Incentive ('PSI’) 2007' Government of Maharashtra under ‘The Package Scheme, of Incentive as 'capital receipt' where as there is no obligation cast receipt' where as there is no obligation cast on the assessee as to applying the subsidy for any particular purpose?" on the assessee as to applying the subsidy for any particular purpose?" on the assessee as to applying the subsidy for any particular purpose?" 2. "Whether on the facts and in the circumstances of the case and in law, the Ld. 2. "Whether on the facts and in the circumstances of the case and in law, the Ld. 2. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that no disallowance can be made if there is no exempt CIT(A) erred in holding that no disallowance can be made if there is no exempt income while CBDT circular no. 5/2014 dtd 11.02.2014 clearly specified that even if income while CBDT circular no. 5/2014 dtd 11.02.2014 clearly specified that even if income while CBDT circular no. 5/2014 dtd 11.02.2014 clearly specified that even if no exempt income is earned on the investments for the purpose of calculation of no exempt income is earned on the investments for the purpose of calculation of no exempt income is earned on the investments for the purpose of calculation of disallowance u/s 14A r.w.r. 8D, these are to be included?" disallowance u/s 14A r.w.r. 8D, these are to be included?" 3. "Whether on the facts and in the circumstances of the case and in law, the Ld. "Whether on the facts and in the circumstances of the case and in law, the Ld. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the whole of Capital Gains on conversion of land to CIT(A) erred in holding that the whole of Capital Gains on conversion of land to CIT(A) erred in holding that the whole of Capital Gains on conversion of land to stock in trades cannot be brought to tax in the year in which only part sale of stock in stock in trades cannot be brought to tax in the year in which only part sale of stock in stock in trades cannot be brought to tax in the year in which only part sale of stock in trade is effected without appreciating the fact that the time of chargeability of income s effected without appreciating the fact that the time of chargeability of income s effected without appreciating the fact that the time of chargeability of income tax for capital gain arising from conversion of capital asset to stock in trade should tax for capital gain arising from conversion of capital asset to stock in trade should tax for capital gain arising from conversion of capital asset to stock in trade should be the point when the stock in trade is sold or otherwise transferred?" be the point when the stock in trade is sold or otherwise transferred?" be the point when the stock in trade is sold or otherwise transferred?" 4. "Whether on the facts and in the circumstances of the case and in law, the n the facts and in the circumstances of the case and in law, the n the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in excluding the sales tax subsidy for computing book profit u/sl Ld. CIT(A) erred in excluding the sales tax subsidy for computing book profit u/sl Ld. CIT(A) erred in excluding the sales tax subsidy for computing book profit u/sl 15JB of the IT Act, when the same is not provided for in section 115JB of the Act and 15JB of the IT Act, when the same is not provided for in section 115JB of the Act and 15JB of the IT Act, when the same is not provided for in section 115JB of the Act and is therefore in contravention to the law laid down by HonTDle Supreme Court in the vention to the law laid down by HonTDle Supreme Court in the vention to the law laid down by HonTDle Supreme Court in the case of Apollo Tyres Ltd. vs CIT(255 ITR 273)?" case of Apollo Tyres Ltd. vs CIT(255 ITR 273)?" 4. Briefly stated, facts of the case are that the assessee during facts of the case are that the assessee during facts of the case are that the assessee during the year under consideration was engaged in the business of the year under consideration was engaged in the business of the year under consideration was engaged in the business of manufacturing and tra manufacturing and trading of textile polyester staple ding of textile polyester staple fiber and was also engaged in development of real estate. For the year under also engaged in development of real estate. For the year under also engaged in development of real estate. For the year under consideration, the assessee filed its return of income electronically consideration, the assessee filed its return of income electronically consideration, the assessee filed its return of income electronically

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on 29/11/2014 declaring total income at Nil under the normal on 29/11/2014 declaring total income at Nil under the normal on 29/11/2014 declaring total income at Nil under the normal provisions of the Income the Income-tax Act, 1961 (in short, ‘the Act’) and book tax Act, 1961 (in short, ‘the Act’) and book profit of ₹44,41,08,237/ 44,41,08,237/- under section 115JB of the Act. The under section 115JB of the Act. The return of income filed by the assessee was selected for scrutiny return of income filed by the assessee was selected for scrutiny return of income filed by the assessee was selected for scrutiny assessment and statutory assessment and statutory notices under the Act were issued and notices under the Act were issued and complied with. In the assessment completed under section 143(3) with. In the assessment completed under section 143(3) with. In the assessment completed under section 143(3) of the Act, the Assessing Officer made certain additions / of the Act, the Assessing Officer made certain additions / of the Act, the Assessing Officer made certain additions / disallowances and assessed total income under normal provisions disallowances and assessed total income under normal provisions disallowances and assessed total income under normal provisions of the Act at ₹354,42,01,379/ 354,42,01,379/- and computed book profit of ₹40,69,06,175/-. As the income determined under section 115JB . As the income determined under section 115JB . As the income determined under section 115JB was of the Act was was of the Act was less than the income computed under the than the income computed under the normal provisions of the Act, the Assessing Officer took the total normal provisions of the Act, the Assessing Officer took the total normal provisions of the Act, the Assessing Officer took the total income at ₹354,42,01,379/ 354,42,01,379/-.On appeal, the Ld.CIT(A) allowed part .On appeal, the Ld.CIT(A) allowed part relief. Aggrieved, both the assessee and the Income ef. Aggrieved, both the assessee and the Income- -tax Department are in appeals before the ITAT are in appeals before the ITAT, raising the grounds as reproduced raising the grounds as reproduced above.

5.1 The brief facts qua the issue in dispute are that the assessee The brief facts qua the issue in dispute are that the assessee The brief facts qua the issue in dispute are that the assessee in the process of real estate development of its land parcel, which real estate development of its land parcel, which real estate development of its land parcel, which

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were appearing in its books of accounts as Capital asset , converted were appearing in its books of accounts as Capital asset , converted were appearing in its books of accounts as Capital asset , converted one such capital asset into stock one such capital asset into stock-in-trade of real esate business in trade of real esate business in year earlier to present assessment year. The section 45(2) of the Act year earlier to present assessment year. The section 45(2) of the Ac year earlier to present assessment year. The section 45(2) of the Ac prescribes for offer of capital gain tax on such conversion in the prescribes for offer of capital gain tax on such conversion in the prescribes for offer of capital gain tax on such conversion in the year of sale of stock in trade. year of sale of stock in trade. The two issues are involved in this The two issues are involved in this transaction. Firstly, the point of time when the capital gain was to the point of time when the capital gain was to be declared for income be declared for income-tax Act purpose, ( i.e the issue which has issue which has been raised in the Ground No. 3 of the appeal of the Revenue) . The been raised in the Ground No. 3 of the appeal of the Revenue) . been raised in the Ground No. 3 of the appeal of the Revenue) . assessee was following percentage completion method for declaring assessee was following percentage completion method for declaring assessee was following percentage completion method for declaring business profit from such real estate project. The assessee business profit from such real estate project. The assessee business profit from such real estate project. The assessee accordingly also offered long term capital ga offered long term capital gain on conversion of in on conversion of ‘capital asset’ into ‘stock in trade’ amounting to ‘capital asset’ into ‘stock in trade’ amounting to ₹206,09,36,801/ 206,09,36,801/- in the year under consideration in the year under consideration based on ‘percentage completion percentage completion method’. Whereas, according to the Revenue the capital gain should Whereas, according to the Revenue the capital gain should Whereas, according to the Revenue the capital gain should have declared in the year of sale of stock in trade as per provisions have declared in the year of sale of stock in trade as per provisions have declared in the year of sale of stock in trade as per provisions of section 45(2) of the Act. The of section 45(2) of the Act. The second issue is regarding issue is regarding computation of quantum of long computation of quantum of long-term capital gain, which has been term capital gain, which has been agitated by the assessee in ground no. 1 of its appeal. ated by the assessee in ground no. 1 of its appeal. While ated by the assessee in ground no. 1 of its appeal. working out the long long-term capital gain, the assessee capital gain, the assessee took the fair market value (FMV) of the capital asset as on the date of conversion market value (FMV) of the capital asset as on the date of conversion market value (FMV) of the capital asset as on the date of conversion of capital asset into stock in trade. However, while reducing the of capital asset into stock in trade. However, while reducin of capital asset into stock in trade. However, while reducin indexed cost of the acquisition of the capital asset, the indexation indexed cost of the acquisition of the capital asset, the index indexed cost of the acquisition of the capital asset, the index was applied upto the year in which the stock was applied upto the year in which the stock-in-trade was sold or trade was sold or transferred as against the claim of Revenue that indexation of cost as against the claim of Revenue that indexation of cost as against the claim of Revenue that indexation of cost

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of acquisition should be allowed up to the year of acquisition should be allowed up to the year in which the capital in which the capital stock was converted into stock stock was converted into stock-in-trade. The contention he contentions of the assessee on both the issues i.e. on both the issues i.e. offer of capital gain as per the offer of capital gain as per the percentage completion method and indexed cost of acquisition of percentage completion method and indexed cost of acquisition of percentage completion method and indexed cost of acquisition of the capital asset in the year of the sal the capital asset in the year of the sale of stock- -in-trade , were rejected by the Assessing Officer observing as under:- rejected by the Assessing Officer observing as under: rejected by the Assessing Officer observing as under:

The claim of the assessee cannot be accepted because capital gain accrues in the The claim of the assessee cannot be accepted because capital gain accrues in the The claim of the assessee cannot be accepted because capital gain accrues in the financial year in which the capital asset is converted into stock in trade. However the financial year in which the capital asset is converted into stock in trade. However the financial year in which the capital asset is converted into stock in trade. However the timing of the taxation of the capital gain is differed to the point of sale. Thus g of the taxation of the capital gain is differed to the point of sale. Thus g of the taxation of the capital gain is differed to the point of sale. Thus whenever the sale of flat occurs during the relevant assessment year the long term whenever the sale of flat occurs during the relevant assessment year the long term whenever the sale of flat occurs during the relevant assessment year the long term capital gain corresponding to the area sold will have to be offered for tax in the very capital gain corresponding to the area sold will have to be offered for tax in the very capital gain corresponding to the area sold will have to be offered for tax in the very same assessment year. Accordingly the contention of the assessee that the long essment year. Accordingly the contention of the assessee that the long essment year. Accordingly the contention of the assessee that the long term capital gain are to be taxed based on percentage of completion method cannot term capital gain are to be taxed based on percentage of completion method cannot term capital gain are to be taxed based on percentage of completion method cannot be accepted and the differential long term capital gain as worked out below is be accepted and the differential long term capital gain as worked out below is be accepted and the differential long term capital gain as worked out below is required to be brought to tax. required to be brought t FMV@ Index Indexed Conversion LTCG %com Capital gain 1981(cost) 1981(cost) pletio already n offered FY Desc Area sold @Rs.92/sq.f @Rs.92/sq.f facto cost Price rip t. r 2013- One 169,178 15,64,376 15,64,376 939 146,149,491 2,188,772,167 2,042,622.677 2,042,622.677 43.26 883638569.9 14 ICC % (As Two 198.799 18,289,508 18,289,508 939 171,738,480 2,610,218,660 2,438,480.180 2,438,480.180 per ICC ROI

367,977.00 33,853,884 33,853,884 317,887,971 4,798,990,828 4,481,102,857 4,481,102,857 2,060,936.801 2013- One 143,038 13,159,496 13,159,496 785 103,302.044 2,585,123,073 2,481,821,029 2,481,821,029 14 ICC- Scal 143, 038 (As Two 49,337 4,539,004 4,539,004 711 32,373,318 677,189,263 644,916.945 644,916.945 per ICC- new Scal worki ng) Two 143,220 13,176,782 13,176,782 785 103,437,739 1,965,888.396 1,862,450.658 1,862,450.658 ICC- Scal

M/s Bombay Dyeing & Manufacturing Co. Ltd. M/s Bombay Dyeing & Manufacturing Co. Ltd. 7 ITA Nos. 4484, 4485, 4291 & 4293/M/2019 ITA Nos. 4484, 4485, 4291 & 4293/M/2019

Onc 15,684 1,442,928 1,442,928 785 11,326,985 2,83,46,636 272,129,651 272,129,651 e ICC Two 3,516 323,472 785 2,539,255 48,259,875 46,720 ICC Total of 2013-14 5,307,038,903 Capital gain offered in ROI 2,060,938,801 Differential Capital Gain 3,245,102,102

As it is apparent that from the above details that LTCG of Rs. 206, As it is apparent that from the above details that LTCG of Rs. 6,09,36,801/- was offered by the assessee applying percentage completion method and taking offered by the assessee applying percentage completion method and taking offered by the assessee applying percentage completion method and taking indexation till the year of sale. But as per the provisions of the Income Tax Act, 1961 indexation till the year of sale. But as per the provisions of the Income Tax Act, 1961 indexation till the year of sale. But as per the provisions of the Income Tax Act, 1961 both the claims of the assessee are not a claims of the assessee are not allowable. Single flat is the one unit for the llowable. Single flat is the one unit for the purpose purpose purpose of of of 'transfer' 'transfer' 'transfer' within within within the the the definition definition definition of of of Capital Capital Capital Gain Gain Gain Working. Working. Working. Percentagecompletion method can't be applied because it doesn't follow the Percentagecompletion method can't be applied because it doesn't follow the Percentagecompletion method can't be applied because it doesn't follow the 'unitconcept of the transfer. When one single flat is sold it can't 'unitconcept of the transfer. When one single flat is sold it can't bepresumed that only part of the same has been transferred. The conceptof transfer bepresumed that only part of the same has been transferred. The conceptof transfer bepresumed that only part of the same has been transferred. The conceptof transfer recognizes the ownership transfer and not the concept of part completion. Part recognizes the ownership transfer and not the concept of part completion. Part recognizes the ownership transfer and not the concept of part completion. Part completion is applicable for the income under Income"from Business and Profession' completion is applicable for the income under Income"from Business and Profession' in form of Percentage Completion Method where it has been recognized under in form of Percentage Completion Method where it has been recognized under in form of Percentage Completion Method where it has been recognized under accounting standards and Income Tax Act also. For example if a person converts his accounting standards and Income Tax Act also For example if a person converts his investment in land into stock in trade and manages to construct 10 flats out of it. investment in land into stock in trade and manages to c onstruct 10 flats out of it. Afterwards he offers 50% under percentage completion method. In this situation his Afterwards he offers 50% under percentage completion method. In this situation his Afterwards he offers 50% under percentage completion method. In this situation his offer is acceptable for the income offered under the head Income from Business and offer is acceptable for the income offered under the head Income from Business and offer is acceptable for the income offered under the head Income from Business and Profession' but for the purpose of Long Term‘Capital Gain it will not work. It is Profession' but for the purpose of Long Term will not work. It is important for Long Term Capital Gain that how many flats were sold and not how important for Long Term Capital Gain that how many flats were sold and not how important for Long Term Capital Gain that how many flats were sold and not how much construction is £ted. The Capital Gain will be worked out on the basis of unit £ted. The Capital Gain will be worked out on the basis of unit £ted. The Capital Gain will be worked out on the basis of unit wisesale of the flats. Accordingly, both the claim of the assessee, sale of the flats. Accordingly, both the claim of the assessee, i.e., Long Term sale of the flats. Accordingly, both the claim of the assessee, Capital Gain as per the working under percentage completion method and Capital Gain as per the working under percentage completion method and Capital Gain as per the working under percentage completion method and indexation till the year of sale are hereby rejected. So as per the provisions of the indexation till the year of sale are hereby rejected. So as per the provisions of the indexation till the year of sale are hereby rejected. So as per the provisions of the Income Tax Act, 1961 the Long Term Capital Gain works out at Rs. 530,70,38,903/~ Income Tax Act, 1961 the Long Term Capital Gain works out at Rs. 530,70,38,903/~ after removing the wrong claim of indexation and rejecting percentage completion ter removing the wrong claim of indexation and rejecting percentage completion ter removing the wrong claim of indexation and rejecting percentage completion method for the working of LTCG. Since the assessee has already offered Rs. method for the working of LTCG. Since the assessee has already offered Rs. method for the working of LTCG. Since the assessee has already offered Rs. 206,09,36,801/-under the head LTCG, the amount of under the head LTCG, the amount of Rs.3,246,102,102/ Rs.3,246,102,102/-, being differential amount in the capital gain offered, is added to the income ofthe differential amount in the capital gain offered, is added to the income ofthe assessee. Penalty proceedings u/s 271(l)(c) of the Act is initiated separately. proceedings u/s 271(l)(c) of the Act is initiated separately. proceedings u/s 271(l)(c) of the Act is initiated separately.” 5.2 On appeal, the Ld.CIT(A) on the first issue of taxing entire On appeal, the Ld.CIT(A) on the first issue of taxing entire On appeal, the Ld.CIT(A) on the first issue of taxing entire capital gain on account of conversion of capital asset being land capital gain on account of conversion of capital asset being land capital gain on account of conversion of capital asset being land

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into stock in trade in the year in which it was converted into stock into stock in trade in the year in which it was converted into stock in trade in the year in which it was converted in trade by the Assessing officer by the Assessing officer and not as per percentage and not as per percentage completion method, followed the finding of the ITAT for the A.Y. followed the finding of the ITAT for the A.Y. 2012-13 and directed to tax the capital gain following the 13 and directed to tax the capital gain following the 13 and directed to tax the capital gain following the percentage completion method. percentage completion method.

5.3 On the second issue of applying cost of indexa On the second issue of applying cost of indexa On the second issue of applying cost of indexation on the cost of acquisition, the assessee refe of acquisition, the assessee referred to the decision of the Hon’ble rred to the decision of the Hon’ble Karnataka High Court in the case of CIT vs Rudra Industrial CIT vs Rudra Industrial Karnataka High Court in the case of Corporation 244 CTR 304 (Kar) Corporation 244 CTR 304 (Kar) and submitted that for indexation and submitted that for indexation for the cost of asset, the capital gain index for the year of the sale for the cost of asset, the capital gain index for the year of the sale for the cost of asset, the capital gain index for the year of the sale should be applied. The Ld.CIT(A), however, in view of the clear d.CIT(A), however, in view of the clear provisions of section 45(2) of the Act for indexed cost of the provisions of section 45(2) of the Act for index provisions of section 45(2) of the Act for index acquisition in the year in which asset was converted, rejected the acquisition in the year in which asset was converted, rejected the acquisition in the year in which asset was converted, rejected the request of the assessee following CIT vs Rudra Industrial request of the assessee following CIT vs Rudra Industrial request of the assessee following CIT vs Rudra Industrial Corporation (supra). The re Corporation (supra). The relevant finding of the Ld.CIT(A) is levant finding of the Ld.CIT(A) is reproduced as under: reproduced as under:- “8.6 From perusal of Para 9 of the judgement of Hon'bie Karnataka High Court, it is evident From perusal of Para 9 of the judgement of Hon'bie Karnataka High Court, it is evident From perusal of Para 9 of the judgement of Hon'bie Karnataka High Court, it is evident that facts of the Appellant are different from the facts decided by the Hon'bie Karnataka that facts of the Appellant are different from the facts decided by the Hon'bie Karnataka that facts of the Appellant are different from the facts decided by the Hon'bie Karnataka High Court in the case of C case of CIT V/s Rudra Industrial Commercial Corporation.I ndustrial Commercial Corporation.In the case considered by Hon'bie Court, although theimmovable property owned by the assessee was considered by Hon'bie Court, although theimmovable property owned by the assessee was considered by Hon'bie Court, although theimmovable property owned by the assessee was converted into stock-in-trade in the year 1987 trade in the year 1987-88 and the assessee entered into an 88 and the assessee entered into an agreement dated 16.03.1988 with M/s Unitech Ltd, but, in the year 1988 .03.1988 with M/s Unitech Ltd, but, in the year 1988 .03.1988 with M/s Unitech Ltd, but, in the year 1988-89, when the agreement was entered into, the Revenue did not treat it as a transfer. Rather the Revenue, agreement was entered into, the Revenue did not treat it as a transfer. Rather the Revenue, agreement was entered into, the Revenue did not treat it as a transfer. Rather the Revenue, called upon the assessee to pay taxes in subsequent year. The claim for capital gain was called upon the assessee to pay taxes in subsequent year. The claim for capital gain was called upon the assessee to pay taxes in subsequent year. The claim for capital gain was made by assessee only when the assessee executed registered sale deed in favour of the ssessee only when the assessee executed registered sale deed in favour of the ssessee only when the assessee executed registered sale deed in favour of the purchaser of the fiats in the F.Yr. 1992-93. The facts of the Appellant are different. The purchaser of the fiats in the F.Yr. 1992 93. The facts of the Appellant are different. The AO has taxed the capita! gain in the year in which assets were converted to stock-in-trade, has taxed the capita! gain in the year in which assets were converted to stock has taxed the capita! gain in the year in which assets were converted to stock therefore, the case, cited by theAppellant is not applicable in its case. The Hon'bie Delhi High therefore, the case, cited by theAppellant is not applicable in its case. The Hon'bie Delhi High therefore, the case, cited by theAppellant is not applicable in its case. The Hon'bie Delhi High Court in the case of Arun Shoonglu Trust v/s CIT(supra) has observed that benefit of index of Court in the case of Arun Shoong u Trust v/s CIT(supra) has observed that benefit of index of

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cost of inflation is given to ensure that tax payer pays the capital gain tax on the real or cost of inflation is given to ensure that tax payer pays th e capital gain tax on the real or actual gain and not on the increase in the capital value of the property due to inflation, The actual gain and not on the increase in the capital value of the property due to inflation, The actual gain and not on the increase in the capital value of the property due to inflation, The principle determined by the Hon'bie Court has been duly considered by the Ld. A.O while principle determined by the Hon'bie Court has been duly considered by the Ld. A.O while principle determined by the Hon'bie Court has been duly considered by the Ld. A.O while granting indexation cost in the year in cost in the year in which asset was converted into stock which asset was converted into stock-in- trade. On the other hand, Sec 45(2) very clearly defines that profit or gain arising from the transfer is the other hand, Sec 45(2) very clearly defines that profit or gain arising from the transfer is the other hand, Sec 45(2) very clearly defines that profit or gain arising from the transfer is to be taxed in the year in which asset is converted into stock-in-trade. For proper to be taxed in the year in which asset is converted into stock trade. For proper appreciation of facts, Sec 45(2) is reproduced as under: Sec 45(2) is reproduced as under:- "Notwithstanding anything contained in sub-section (1), the profits or gains arising from the transfer by "Notwithstanding anything contained in sub section (1), the profits or gains arising from the transfer by way of conversion by the owner of a capita! asset into, or its treatment by him as stock way of conversion by the owner of capita! asset into, or its treatment by him as stock-in-trade of abusiness carried on by him shall be chargeable to ried on by him shall be chargeable to income-tax. as his income of the previous his income of the previous year inwhich such stock-in-trade is sold otherwise transferred by him and, for the purposes of Sec otherwise transferred by him and, for the purposes of Sec 48, the fair market otherwise transferred by him and, for the purposes of Sec value of the asset on the date of such conversion or on the date of such conversion or treatment shall be deemed to be the fullval treatment shall be deemed to be the fullvalue of the consideration received or accruing as a result of the transfer of the capital asset]". consideration received or accruing 8.7 From perusal of the Section, it is evident that transfer taken place in the year in which From perusal of the Section, it is evident that transfer taken place in the year in which From perusal of the Section, it is evident that transfer taken place in the year in which asset is converted into stock to stock-in-trade and law is very clear about indexation cost is to be trade and law is very clear about indexation cost is to be applied for the year in which transfer has taken place. In view of the above discussion, the applied for the year in which transfer has taken place. In view of the above discussion, the applied for the year in which transfer has taken place. In view of the above discussion, the ground raised by the Appellant on this regard is, dismissed.” ground raised by the Appellant on this regard is, 6. Before us, the assessee has Before us, the assessee has filed a paper book containing filed a paper book containing pages 1 to 249 and also a supplementary paper book containing pages 1 to 249 and also a supplementary paper book containing pages 1 to 249 and also a supplementary paper book containing pages 250 to 256.

“54. In accordance with the aforesaid policies, in the year in which the company 54. In accordance with the aforesaid policies, in the year in which the company 54. In accordance with the aforesaid policies, in the year in which the company converts Fixed Assets being Land to Stock-in-trade the unrealized appreciation converts Fixed Assets being Land to Stock trade the unrealized appreciation

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i.e. the difference between the market value of land on the date of conversion into e between the market value of land on the date of conversion into e between the market value of land on the date of conversion into stock in trade and the cost of the said land in books of the company is credited to stock in trade and the cost of the said land in books of the company is credited to stock in trade and the cost of the said land in books of the company is credited to revaluation reserve. Based on Percentage Completion Method of accounting, the revaluation reserve. Based on Percentage Completion Method of accounting, the revaluation reserve. Based on Percentage Completion Method of accounting, the appropriate amount is released from Revaluation Reserve to statement of Profit & appropriate amount is releas ed from Revaluation Reserve to statement of Profit & loss in proportion of revenue recognized. In other words, the revenue comprising of loss in proportion of revenue recognized. In other words, the revenue comprising of loss in proportion of revenue recognized. In other words, the revenue comprising of Capital Gains and Business Profits is accounted on the same basis each year, as Capital Gains and Business Profits is accounted on the same basis each year, as Capital Gains and Business Profits is accounted on the same basis each year, as contemplated in the provisions^ the act. Accordingly, each year income from Real contemplated in the provisions^ the act . Accordingly, each year income from Real Estate Activity is offered to Tax under the head Long Term Capital Gains (pertaining Estate Activity is offered to Tax under the head Long Term Capital Gains (pertaining Estate Activity is offered to Tax under the head Long Term Capital Gains (pertaining to gains on conversion of Fixed Assets to Stock in Trade) & Business income to gains on conversion of Fixed Assets to Stock in Trade) & Business income to gains on conversion of Fixed Assets to Stock in Trade) & Business income (pertaining to revenue accruing thereafter). (pertaining to revenue accruing thereafter). 55. Our attention was drawn towards Our attention was drawn towards-the provision of section 2(47)(iv) of the the provision of section 2(47)(iv) of the income Tax Act, 1961 ("the Act") income Tax Act, 1961 ("the Act") "transfer, in relation to a capital asset, Includes, - "transfer, in relation to a capital asset, Includes, ………. ……… "(iv) In a case where the asset is converted by the owner thereof into, or is "(iv) In a case where the asset is converted by the owner thereof into, or is "(iv) In a case where the asset is converted by the owner thereof into, or is treated by him as, stock by him as, stock-in-trade of a business carried on by him, such trade of a business carried on by him, such conversion or treatment". conversion or treatment". Hence, under section 45 of the Act, profits & gains arising from such transfer Hence, under section 45 of the Act, profits & gains arising from such transfer Hence, under section 45 of the Act, profits & gains arising from such transfer (conversion to stock in trade) is chargeable to tax in the year of transfer. However (conversion to stock in trade) is chargeable to tax in the year of transfer. However as (conversion to stock in trade) is chargeable to tax in the year of transfer. However per non obstante provision contained in sub section (2) of section 45, the capital per non obstante provision contained in s b section (2) of section 45, the capital gains shall be chargeable to income tax as incomeof the previous year in which such gains shall be chargeable to income tax as incomeof ear in which such stock in trade is sold or otherwise transferred by him. Since the sale of Stock in Tra stock in trade is sold or otherwise transferred by him. Since the sale of Stock in Trade stock in trade is sold or otherwise transferred by him. Since the sale of Stock in Tra would actually happen when the flats are completed and ownership transferred, a would actually happen when the flats are completed and ownership transferred, a would actually happen when the flats are completed and ownership transferred, a strict interpretation of section 45(2) would suggest that the capital gains rising on strict interpretation of section 45(2) would suggest that the capital gains rising on strict interpretation of section 45(2) would suggest that the capital gains rising on conversion of stock in trade would be chargeable to tax when; conversion of stock in trade would be chargeable to tax when; -(project is conversion of stock in trade would be chargeable to tax when; completed. However, it would be inconsistent to say that the business profits arising owever, it would be inconsistent to say that the business profits arising owever, it would be inconsistent to say that the business profits arising from real estate activity would be chargeable to tax on percentage completion from real estate activity would be chargeable to tax on percentage completion from real estate activity would be chargeable to tax on percentage completion method each year during the construction activity and thecapital gains portion of method each year during the construction activity and hecapital gains portion of there is chargeable to tax in a different year i.e. when the project is completed. A tax in a different year i.e. when the project is completed. A tax in a different year i.e. when the project is completed. A reading down of. section 45(2) of the Act would therefore mean that the capital reading down of. section 45(2) of the Act would therefore mean that the capital reading down of. section 45(2) of the Act would therefore mean that the capital gains on conversionshould be charged to tax in the same year in which gains on conversionshoul tax in the same year in which thecorresponding business income is offered corresponding business income is offered to tax, on the same basis i.e. to tax, on the same basis i.e. percentage completion method which the company is following. Further, the ompletion method which the company is following. Further, the ompletion method which the company is following. Further, the assessee has made disclosure by way of a note at serial no. 31 in Notes to Financial assessee has made disclosure by way of a note at serial no. 31 in Notes to Financial assessee has made disclosure by way of a note at serial no. 31 in Notes to Financial Statement in relation to the Revaluation Reserve andamount releas Statement in relation to the Revaluation Reserve and amount released from the revaluation reserve on credited to profit and loss account and which is read as revaluation reserve on credited to profit and loss account and which is read as revaluation reserve on credited to profit and loss account and which is read as under:

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"31. The Company has during the year ended March 31, 2012 converted "31. The Company has during the year ended March 31, 2012 converted "31. The Company has during the year ended March 31, 2012 converted a part of the freehold land under real estate development from Fixed Assets to Stock of the freehold land under real estate development from Fixed Assets to Stock of the freehold land under real estate development from Fixed Assets to Stock in trade at market value and the difference between the market value and cost trade at market value and the difference between the market value and cost trade at market value and the difference between the market value and cost amounting to Rs. 764.30 crores (2010 amounting to Rs. 764.30 crores (2010-11 Rs. 853.96 crores) has been credited 11 Rs. 853.96 crores) has been credited to Revaluation Reserve. An amount of Rs. 165.27 crores (2010 to Revaluation Reserve. An amount of Rs. 165.27 crores (2010-11 Rs. 70.57 11 Rs. 70.57 crores) has been ' released fr crores) has been ' released from revaluation reserve to Statement of Profit and om revaluation reserve to Statement of Profit and Loss in proportion of revenue recognized on the area sold in accordance with Loss in proportion of revenue recognized on the area sold in accordance with Loss in proportion of revenue recognized on the area sold in accordance with the accounting Policy." the accounting Policy." 56. We find from records that lower authorities proceeded on total misreading of 56. We find from records that lower authorities proceeded on total misreading of 56. We find from records that lower authorities proceeded on total misreading of the relevant provision of the Act and have brought to tax on of the Act and have brought to tax the whole of t whole of the capital gain on the conversion of the land (fixed asset) to stock intrade in t gain on the conversion of the land (fixed asset) to stock n the year in which only part sale of stock in trade is t sale of stock in trade iseffected and assessee has offered the effected and assessee has offered theproportionate capital gain in the year under consideration. We, in view of the above facts and capital gain in the year under consideration. We, in view of the above facts and capital gain in the year under consideration. We, in view of the above facts and circumstances, direct the AO to verify the sale of stock in trade effected and offered circumstances, direct the AO to verify the sale of stock in trade effected and offered circumstances, direct the AO to verify the sale of stock in trade effected and offered the proportionate capital gains in the relevant years and the same should be taxed the proportionate capital gains in the relevant years and the same should be taxed the proportionate capital gains in the relevant years and the same should be taxed accordingly. This issue of assessee's appeal is set aside for verification purpose only rdingly. This issue of assessee's appeal is set aside for verification purpose only rdingly. This issue of assessee's appeal is set aside for verification purpose only with the above directions.” with the above directions 8. Respectfully following the finding of the Tribunal (supra), the spectfully following the finding of the Tribunal (supra), the spectfully following the finding of the Tribunal (supra), the ground No. 3 of appeal of the Revenue is accordingly dismissed. of appeal of the Revenue is accordingly dismissed. of appeal of the Revenue is accordingly dismissed.

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this asset had been converted into stock this asset had been converted into stock-in-trade on 16th March, 1988 which was not trade on 16th March, 1988 which was not considered by the appellate authoriti considered by the appellate authorities in the proper perspective and consequently es in the proper perspective and consequently recorded a perverse finding ? recorded a perverse finding ?

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cost of acquisition was 223 on the date of transfer in the year ending 1993 and the cost of acquisition was 223 on the date of transfer in t e year ending 1993 and the-index cost of acquisition on the date of conversion is 161. Therefore, the AO committed a cost of acquisition on the date of conversion is 161. Therefore, the AO committed a cost of acquisition on the date of conversion is 161. Therefore, the AO committed a serious error in taking 161 as the index. The appellate authorities have rightly interfered serious error in taking 161 as the i ndex. The appellate authorities have rightly interfered with the said assessment and have taken 223 as correct index cost of acquisition. with the said assessment and have taken 223 as correct index cost of acquisition. with the said assessment and have taken 223 as correct index cost of acquisition. Therefore, when the impugned order passed by the appellate authorities is in accordance Therefore, when the impugned order passed by the appellate authorities is in accordance Therefore, when the impugned order passed by the appellate authorities is in accordance with the aforesaid statutory provisions, the said substantial questions of law have to be with the aforesaid statutory p rovisions, the said substantial questions of law have to be answered in favour of the assessee and against the Revenue.” answered in favour of the assessee and against the Revenue.” 11. We find that Hon’ble High Court has directed to adopt both We find that Hon’ble High Court has directed to adopt both We find that Hon’ble High Court has directed to adopt both, firstly, the market value of the capital asset the market value of the capital asset as on the date of the on the date of the in-trade and secondly, for indexed cost of transfer of stock-in for indexed cost of acquisition also on the date of sale or transfer of the stock in trade. acquisition also on the date of sale or transfer of the stock in trade. acquisition also on the date of sale or transfer of the stock in trade. But before us, the assessee is seeking only application of part of the But before us, the assessee is seeking only application of part of the But before us, the assessee is seeking only application of part of the ratio of the decision for indexa ratio of the decision for indexation of the cost of acquisition only tion of the cost of acquisition only and not for the purpose of sale consideration of the capital asset. and not for the purpose of sale consideration of the capital asset. and not for the purpose of sale consideration of the capital asset. In our opinion, the assessee cannot choose part of the decision In our opinion, the assessee cannot choose part of the decision In our opinion, the assessee cannot choose part of the decision which is in its favour ignoring the other part of the decision of the which is in its favour ignoring the other part of the decision of the which is in its favour ignoring the other part of the decision of the Hon’ble High Court. Though the provis rt. Though the provisions of section 45(2) ions of section 45(2) prescribe for taking fair market value of the asset for taking fair market value of the asset as as on the date of such conversion for the purpose of full value of the consideration such conversion for the purpose of full value of the consideration such conversion for the purpose of full value of the consideration received or acquiring as a result of transfer of the capital asset and received or acquiring as a result of transfer of the capital asset and received or acquiring as a result of transfer of the capital asset and also cost of acquisition to be indexed till the date of such ost of acquisition to be indexed till the date of such ost of acquisition to be indexed till the date of such conversion, however, in view of the decision of the Hon’ble conversion, however, in view of the decision of the Hon’ble conversion, however, in view of the decision of the Hon’ble Karnataka High Court in the case of Karnataka High Court in the case of CIT vs Rudra Industrial CIT vs Rudra Industrial Corporation (supra), we feel it appropriate to restore this issue to Corporation (supra), we feel it appropriate to restore this issue to Corporation (supra), we feel it appropriate to restore this issue to the file of the Ld.AO for computing the long term capital gain on the Ld.AO for computing the long term capital gain on the Ld.AO for computing the long term capital gain on conversion of capital asset into stock in trade in accordance with conversion of capital asset into stock in trade in accordance with conversion of capital asset into stock in trade in accordance with

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law. The ground No.1 of the appeal of the assessee is accordingly law. The ground No.1 of the appeal of the assessee is accordingly law. The ground No.1 of the appeal of the assessee is accordingly allowed for statistical purpose. allowed for statistical purpose.

“57. The next issue in this appeal of assess 57. The next issue in this appeal of assessee is against the order of DRP ee is against the order of DRP confirming the action of the AO / TPO making addition of disallowance confirming the action of the AO / TPO making addition of disallowance confirming the action of the AO / TPO making addition of disallowance under section 14A of the Act r.w.r 8 under section 14A of the Act r.w.r 8D of the Rules, while computing book of the Rules, while computing book profit under section 115JB of the Act. For this assessee has raised following profit under section 115JB of the Act. For this assessee has raised following profit under section 115JB of the Act. For this assessee has raised following grounds: - GROUND NO: 9: ADDITION OF RS. 2,73,960/- GROUND NO: 9: ADDITION OF RS. 2,73,960/ BEING AMOUNT DISALLOWED U/S 14A OF BEING AMOUNT DISALLOWED U/S 14A OF THE ACT THE ACT WHILE WHILE COMPUTING BOOK PROFITS U/S.115JBOFTHEACT PROFITS U/S.115JBOFTHEACT •On the facts and in the circumstances of the case and in law the I A. AO, On the facts and in the circumstances of the case and in law the I A. AO, On the facts and in the circumstances of the case and in law the I A. AO, pursuant to the directions of the l.d. DRP. erred in adding the disallowance made pursuant to the directions of the l.d. DRP. erred in adding the disallowance made pursuant to the directions of the l.d. DRP. erred in adding the disallowance made

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u/s NA to the book profits on the alleged ground that expenditure pertains to u/s NA to the book profits on the alleged ground that expenditure pertains to u/s NA to the book profits on the alleged ground that expenditure pertains to me. earning exempt income. 58. At the outset, the learned Counsel for the assessee stated that this issue At the outset, the learned Counsel for the assessee stated that this issue At the outset, the learned Counsel for the assessee stated that this issue is covered in favour of assessee and against Revenue by the decision of is covered in favour of assessee and against Revenue by the decision of is covered in favour of assessee and against Revenue by the decision of Special Bench of this Tribunal in the .case of ACIT vs. Vireet Investments Special Bench of this Tribunal in the .case of ACIT vs. Vireet Investments Special Bench of this Tribunal in the .case of ACIT vs. Vireet Investments (P.) Ltd. [2017] 58 ITR (AT) 313 (Delhi - Trib.) (SB) wherein the Tribunal has (P.) Ltd. [2017] 58 ITR (AT) 313 ( Trib.) (SB) wherein the Tribunal has clearly held that no disallowance under section 14A of the Act r.w.r 8D of the clearly held that no disallowance under section 14A of the Act r.w.r 8D of the clearly held that no disallowance under section 14A of the Act r.w.r 8D of the Rules can be made while computing book profit under section 115JB of the Rules can be made while computing book profit under section 115JB of the Rules can be made while computing book profit under section 115JB of the Act. The learned CIT Departmental Representative could not Act. The learned CIT Departmental Representative could not controvert the Act. The learned CIT Departmental Representative could not above proposition. Accordingly, we are of the view that this issue is covered above proposition. Accordingly, we are of the view that this issue is covered above proposition. Accordingly, we are of the view that this issue is covered by the special benfch decision of this Tribunal in the case of by the special benfch decision of this Tribunal in the case of Vireet by the special benfch decision of this Tribunal in the case of Investments (P.) Ltd. (supra), respectfully following the same, we delete the Investments (P.) Ltd. respectfully following the same, we delete the d allow this issue of assessee's appeal.” disallowance and allow this issue of assessee's appeal.” 14. Respectfully following the finding of the Tribunal, Respectfully following the finding of the Tribunal, Respectfully following the finding of the Tribunal, we restore this issue to the file of the Assessing Officer with the direction to this issue to the file of the Assessing Officer with the direction to this issue to the file of the Assessing Officer with the direction to follow the finding of the Tribunal in earlier and in accorence of law. follow the finding of the Tribunal in earlier and in accorence of law. follow the finding of the Tribunal in earlier and in accorence of law. The ground No.2 of the appeal of the assessee is accordingly ound No.2 of the appeal of the assessee is accordingly ound No.2 of the appeal of the assessee is accordingly allowed for statistical purpose for statistical purpose.

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for deciding in accordance to law . for deciding in accordance to law . The ground No.3 is allowed for The ground No.3 is allowed for statistical purpose.

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of Mumbai Tribunal Reliance Industries Limited (supra), wherein the Tribunal has, of Mumbai Tribunal Reliance Industries Limited (supra), wherein the Tribunal has, of Mumbai Tribunal Reliance Industries Limited (supra), wherein the Tribunal has, after considering the decision of the Supreme Court in Sahney Steels ( after considering the decision of the Supreme Court in Sahney Steels (supra), held after considering the decision of the Supreme Court in Sahney Steels ( that if a subsidy Is received for development of industries in backward areas, it that if a subsidy Is received for development of industries in backward areas, it that if a subsidy Is received for development of industries in backward areas, it constitutes 'capital' receipt regardless of the fact that it has been received only after 'capital' receipt regardless of the fact that it has been received only after 'capital' receipt regardless of the fact that it has been received only after the commencement of production, as it is the 'purpose' of the scheme wh the commencement of production, as it is the 'purpose' of the scheme which is of the commencement of production, as it is the 'purpose' of the scheme wh e subsidy as 'revenue1 or fundamental importance in determining the nature of the subsidy as 'revenue fundamental importance in determining the nature of 'capital1. This decision'of the Special Bench has been upheld by Hon'ble Bombay . This decision'of the Special Bench has been upheld by Hon'ble Bombay . This decision'of the Special Bench has been upheld by Hon'ble Bombay High Court in CIT v. Reliance Industries Limited [2011] 339 ITR 632 (Bom.). High Court in CIT v. Reliance Industries Limited [2011] 339 ITR 632 (Bom.). High Court in CIT v. Reliance Industries Limited [2011] 339 ITR 632 (Bom.). 29. Further, the Hon'ble Supreme Court has held in Ponni Sugars and Chemicals rther, the Hon'ble Supreme Court has held in Ponni Sugars and Chemicals rther, the Hon'ble Supreme Court has held in Ponni Sugars and Chemicals Ltd. (supra), after considering the decision in Sahney Steel (supra) held that the after considering the decision in Sahney Steel (supra) held that the after considering the decision in Sahney Steel (supra) held that the character of the receipt of a subsidy in the hands of the assessee under a scheme character of the receipt of a subsidy in the hands of the assessee under a scheme character of the receipt of a subsidy in the hands of the assessee under a scheme has to be determined with respect to the 'purpose' for which the subsidy is granted d with respect to the 'purpose' for which the subsidy is granted d with respect to the 'purpose' for which the subsidy is granted and that if the purpose of a subsidy is to enable the assessee to run the business and that if the purpose of a subsidy is to enable the assessee to run the business and that if the purpose of a subsidy is to enable the assessee to run the business more profitably then the receipt is on 'revenue' account but if the object of the more profitably then the receipt is on 'revenue' account but if the object of the more profitably then the receipt is on 'revenue' account but if the object of the assistance under the subsidy scheme is to enable the assessee to set up a new unit assistance under the subsi dy scheme is to enable the assessee to set up a new unit (or to expand the existing unit then the receipt would be on 'capital' account. (or to expand the existing unit then the receipt would be on 'capital' account. (or to expand the existing unit then the receipt would be on 'capital' account. Further, it was held that the point of time at which the subsidy is >aid is not Further, it was held that the point of time at which the subsidy is >aid is not Further, it was held that the point of time at which the subsidy is >aid is not relevant, the source is irrelevant and the form of subsidy is irrelevant. Attention is relevant, the source is irrelevant and the form of subsidy is irrelevant. Attention is also invited to a recent decision of the Hon'ble Jammu & Kashmir High Court in Shri also invited to a recent decision of the Hon'ble Jam u & Kashmir High Court in Shri Balaji Alloys vs. CIT (2011) 333 ITR 385 (J&K), wherein, considering Ponni Sugar Balaji Alloys vs. CIT (2011) 333 ITR 385 (J&K), wherein, considering Ponni Sugar Balaji Alloys vs. CIT (2011) 333 ITR 385 (J&K), wherein, considering Ponni Sugar (supra) and Sahney Steel (supra) it is held that the excise duty refund, interest (supra) and Sahney Steel (supra) it is held that the excise duty refund, interest subsidy and insurance subsidy received under a State Scheme are of 'capita!' in subsidy and insurance subsidy received under a State Scheme are of 'capita!' in subsidy and insurance subsidy received under a State Scheme are of 'capita!' in nature. In arriving at its decision, the High Court noted that the foregoing incentives nature. In arriving at its decision, the High Court noted that the foregoing incentives nature. In arriving at its decision, the High Court noted that the foregoing incentives were given to achieve dual objectives, viz. acceleration of industrial development were given to achieve dual objectives, viz. accel eration of industrial development and generation of employment in the State and that such incentives designed to and generation of employment in the State and that such incentives designed to and generation of employment in the State and that such incentives designed to achieve a public purpose, could not- be construed as production or operational achieve a public purpose, could not be construed as production or operational incentives for the benefit of the assessee alone. Similarly, the Hon'ble Calcutta High incentives for the benefit of the assessee alone. Similarly, the Hon'ble Calcutta High Court in CIT v. Rasoi Limited (201.1) 335 ITR 438 (Cal), following the ratio of in CIT v. Rasoi Limited (201.1) 335 ITR 438 (Cal), following the ratio of in CIT v. Rasoi Limited (201.1) 335 ITR 438 (Cal), following the ratio of SupremeCourt in Ponni Sugar (supra) has held the subsidy SupremeCourt in Ponni Sugar (supra) has held th received from Government of West Bengal under scheme of industrial promotion for expansion of Government of West Bengal under scheme of industrial promotion for expansion of Government of West Bengal under scheme of industrial promotion for expansion of its capacities, modernization and improving its marketing capabilities would be its capacities, modernization and improving its marketing capabilities would be its capacities, modernization and improving its marketing capabilities would be 'capital' receipt. 30. Further, the Central Board of Direct Taxes ('CBDT) has issued Circul 30. Further, the Central Board of Direct Taxes ('CBDT) has issued Circular No. 142 30. Further, the Central Board of Direct Taxes ('CBDT) has issued Circul dated 01-08-1974 wherein it has clarified that where the subsidy is primarily given 1974 wherein it has clarified that where the subsidy is primarily given 1974 wherein it has clarified that where the subsidy is primarily given for helping the growth of industries and not for supplementing their profits, such for helping the growth of industries and not for supplementing their profits, such for helping the growth of industries and not for supplementing their profits, such subsidy can be regarded as 'capital' receipt in the hands of the recipient. Fu subsidy can be regarded as 'capital' receipt in the hands of the recipient. Further, it subsidy can be regarded as 'capital' receipt in the hands of the recipient. Fu has been time and again held by various Courts that Circulars issued by CBDT are has been time and again held by various Courts that Circulars issued by CBDT are has been time and again held by various Courts that Circulars issued by CBDT are binding on Revenue and it is not open to the Revenue even to raise a contention binding on Revenue and it is not open to the Revenue even to raise a contention binding on Revenue and it is not open to the Revenue even to raise a contention contrary to the binding circular. Therefore, it is the purpose' under the Scheme contrary to the binding circular. Therefore, it is the purpose' under the Scheme contrary to the binding circular. Therefore, it is the purpose' under the Scheme

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h is relevant to decide whether the incentives are 'capital' or 'revenue1 receipt which is relevant to decide whether the incentives are 'capital' or 'revenue h is relevant to decide whether the incentives are 'capital' or 'revenue and other factors like the point of time when incentive is received, the form, etc are and other factors like the point of time when incentive is received, the form, etc are and other factors like the point of time when incentive is received, the form, etc are irrelevant considerations. For the same reasons, nomenclature given to any irrelevant considerations. For the same reasons, nomenclature given to any irrelevant considerations. For the same reasons, nomenclature given to any incentive/component of an incentive will not be decisive for determining the mponent of an incentive will not be decisive for determining the mponent of an incentive will not be decisive for determining the 'revenue1 or 'capital' nature of such benefits. Thus, considering that the purpose of or 'capital' nature of such benefits. Thus, considering that the purpose of or 'capital' nature of such benefits. Thus, considering that the purpose of PSI is to enable the Company to set up a hew unit or to expand an existing unit to PSI is to enable the Company to set up a hew unit or to expand an existing unit to PSI is to enable the Company to set up a hew unit or to expand an existing unit to encourage industrial development in the State, the subsidy / incentives received is evelopment in the State, the subsidy / incentives received is evelopment in the State, the subsidy / incentives received is on capital account in the present case of the assessee and hence, not chargeable to on capital account in the present case of the assessee and hence, not chargeable to on capital account in the present case of the assessee and hence, not chargeable to tax. Accordingly, this issue of the assessee's appeal is allowed. " tax. Accordingly, this issue of the assessee's appeal is allowed. " 18. Respectfully following the earlier ord Respectfully following the earlier order of the Tribunal (supra), er of the Tribunal (supra), the finding of the Ld. the finding of the Ld. CIT(A) on the issue in dispute in deleting CIT(A) on the issue in dispute in deleting addition on account of subsidy under Package Scheme of Incentives addition on account of subsidy under Package Scheme of Incentives addition on account of subsidy under Package Scheme of Incentives (PSI), 2007 is upheld. Ground No.1 of the appeal of the Re venue is (PSI), 2007 is upheld. Ground No.1 of the appeal of the Re venue is (PSI), 2007 is upheld. Ground No.1 of the appeal of the Re venue is accordingly dismissed. accordingly dismissed.

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ground of short credit of TDS amounting to ground of short credit of TDS amounting to ground of short credit of TDS amounting to ₹5,12,579/ 5,12,579/-. 2. Without prejudice to the above, the appellants, Without prejudice to the above, the appellants, Without prejudice to the above, the appellants, prays that the AO be directed to grant the credit of prays that the AO be directed to grant the credit of prays that the AO be directed to grant the credit of TDS of TDS of Rs.5,12,579/- as per law. 26.1 The grounds raised by the Revenue are reproduced as The grounds raised by the Revenue are reproduced as The grounds raised by the Revenue are reproduced as under:

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not reached to its finality as the Hon'ble Delhi High not reached to its finality as the Hon'ble Delhi High not reached to its finality as the Hon'ble Delhi High Court in its decision in the case of Goetz India Ltd., Court in its decision in the case of Goetz India Ltd., Court in its decision in the case of Goetz India Ltd., reported in 361 IT 505 held that while computing Book reported in 361 IT 505 held that while computing Book reported in 361 IT 505 held that while computing Book Profit disallowance us 14A is required to be made. Profit disallowance us 14A is required to be made. Profit disallowance us 14A is required to be made. However, in its later judgment the Hon'bl However, in its later judgment the Hon'ble Delhi High e Delhi High Court in the case of Bhushan Steel Ltd. (ITA No. 593 & Court in the case of Bhushan Steel Ltd. (ITA No. 593 & Court in the case of Bhushan Steel Ltd. (ITA No. 593 & 594/2015) has taken a contrary view". 594/2015) has taken a contrary view". 4. Whether on the facts and in the circumstances of the Whether on the facts and in the circumstances of the Whether on the facts and in the circumstances of the case and in law, the Id. CIT erred in deleting the case and in law, the Id. CIT erred in deleting the case and in law, the Id. CIT erred in deleting the addition addition of of Rs. Rs. 112,67,62,506/- on 112,67,62,506/ on account account of of revaluation reserve created for revaluation of land revaluation reserve created for revaluation of land revaluation reserve created for revaluation of land being fixed assets converted into stock in trades, in being fixed assets converted into stock in trades, in being fixed assets converted into stock in trades, in violation of provisions of section 115JB of the Income violation of provisions of section 115JB of the Income violation of provisions of section 115JB of the Income Tax Act, 1961?" Tax Act, 1961?" 5. Whether on the facts and in the circumstances of the Whether on the facts and in the circumstances of the Whether on the facts and in the circumstances of the case and in law, the Ld. C case and in law, the Ld. CIT(A) erred in excluding the IT(A) erred in excluding the sales tax subsidy for computing book profit u/s115JB sales tax subsidy for computing book profit u/s115JB sales tax subsidy for computing book profit u/s115JB of the IT Act, when the same is not provided for in of the IT Act, when the same is not provided for in of the IT Act, when the same is not provided for in section 115JB of the Act and is therefore in section 115JB of the Act and is therefore in section 115JB of the Act and is therefore in contravention to the law laid down by Hon'ble Supreme contravention to the law laid down by Hon'ble Supreme contravention to the law laid down by Hon'ble Supreme Court in the case of Ap Court in the case of Apollo Tyres Ltd. vs CIT(255 ITR ollo Tyres Ltd. vs CIT(255 ITR 273)?"

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the Act. Accordingly, this ground in the year under consideration is Accordingly, this ground in the year under consideration is Accordingly, this ground in the year under consideration is also restored to the file of the A.O. also restored to the file of the A.O.

“10, Ground Mo, 5 : Vide this ground, Appellant has agitated against addition : Vide this ground, Appellant has agitated against addition : Vide this ground, Appellant has agitated against addition to Book Profit u/s 115JB towards alleged creation of revaluation reserve by to Book Profit u/s 115JB towards alleged creation of revalua tion reserve by debiting P & L Account for an amount of ₹ 112,67,62,5067-. Appellant stated debiting P & L Account for an amount of . Appellant stated that similar addition was made in assessee's own case in A.Yr 2012 that similar addition was made in assessee's own case in A.Yr 2012-13. that similar addition was made in assessee's own case in A.Yr 2012 During the year A.Yr 2012-13 assessee filed an appeal against the During the year A.Yr 2012 assessee filed an appeal against the assessment order passed u/s 143(3) r.w.s. 144 C(13) before Hon'ble ITAT. assessment order passed u/s 143(3) r.w.s. 144 C(13) before Hon'ble ITAT. The Hon'bie ITAT had decided the appeal of the assessee for A.Yr 2012 The Hon'bie ITAT had decided the appeal of the assessee for A.Yr 2012-13. The Hon'bie ITAT had decided the appeal of the assessee for A.Yr 2012 Relevant para of Hon'ble ITAT order is reproduced as under: Relevant para of Hon'ble ITAT order is reproduced as under: "41. After hearing rival contentions, we find that facts that the Assessee "41. After hearing rival contentions, we find that facts that the Assessee in its business of real estate, had in its business of real estate, had during the year under consideration converted certain portion of land lying in the fixed asset into stock-in during the year under consideration converted certain portion of land lying in the fixed asset into stock during the year under consideration converted certain portion of land lying in the fixed asset into stock trade. Such conversion was done at the market value of the land. Consequently, certain Revaluation trade. Such conversion was done at the market value of the land. Consequently, certain Revaluation trade. Such conversion was done at the market value of the land. Consequently, certain Revaluation Reserve got created in its books, being the excess of the market value of the Land over the carrying costs created in its books, being the excess of the market value of the Land over the carrying costs created in its books, being the excess of the market value of the Land over the carrying costs in the books of account. In computing the "book profits'" for the purposes of section 115JB of the Act, the in the books of account. In computing the "book profits'" for the purposes of section 115JB of the Act, the in the books of account. In computing the "book profits'" for the purposes of section 115JB of the Act, the AO has added the entire amount of Revaluation Reserve AO has added the entire amount of Revaluation Reserve created during the year to its audited profits created during the year to its audited profits applying the provisions of Clause (b) of Explanation I to section 115JB(2) of the Act. Before us assessee applying the provisions of Clause (b) of Explanation I to section 115JB(2) of the Act. Before us assessee applying the provisions of Clause (b) of Explanation I to section 115JB(2) of the Act. Before us assessee explained that in its segmental P&L account, the Assessee has disclosed results of the following explained that in its segmental P&L account, the Assessee has disclosed results of the following explained that in its segmental P&L account, the Assessee has disclosed results of the following segments: a. Textile Division b. Polyster Division

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c. Real Estate Division In respect of the Real Estate Segment, as at the beginning of the relevant year- the assessee carried In respect of the Real Estate Segment, as at the beginning of the relevant year In respect of the Real Estate Segment, as at the beginning of the relevant year opening stock of certain work-in in-progress relating to two residential projects und progress relating to two residential projects under construction, namely, 2 Project The Opening W1P of the two Projects was as follows: ICC-I Project and ICC-2 Project The Opening W1P of the two Projects was as follows: 2 Project The Opening W1P of the two Projects was as follows: 1 Project: Rs.384,34,95,000/- (a) For ICC-1 Project: Rs.384,34,95,000/ 2 Project: Rs.398,54,27,000/- (b) For 1CC-2 Project: Rs.398,54,27,000/ During the year under consideration, for the purpose of these During the year under consideration, for the purpose of these two projects, the assessee converted two projects, the assessee converted further pieces of land, hitherto held by it as fixed assets, into Stock further pieces of land, hitherto held by it as fixed assets, into Stock-in-trade. For this purpose, consistent trade. For this purpose, consistent with the requirement of the provision of section 45(2) of the Act, the assessee got the market value of the with the requirement of the provision of section 45(2) of the Act, the assessee got the market value of the with the requirement of the provision of section 45(2) of the Act, the assessee got the market value of the land determined by approved valuer as per valuation report dated 10.03.2011. This report is filed by land determined by approved valuer as per valuation report dated 10.03.2011. This report is filed by land determined by approved valuer as per valuation report dated 10.03.2011. This report is filed by assessee in its Paper Book before us. The entries for conversion were passed in the books of account at assessee in its Paper Book before us. The entries for conversion were passed in the books of account at assessee in its Paper Book before us. The entries for conversion were passed in the books of account at such market value. Thus, for these two transaction such market value. Thus, for these two transactions.viz. (i) revaluation of fixed asset; and (ii) its s.viz. (i) revaluation of fixed asset; and (ii) its trade, assessee has passed one consolidated accounting entry as under: - conversion into stock-in-trade, assessee has passed one consolidated accounting entry as under: trade, assessee has passed one consolidated accounting entry as under: For ICC Project 1: Accoun tCode Grouped as Entry Debit Credit Credit

377,85,47,25 0 13270 Current Stock-in trade A/c Assets, Loans Assets, Loans Advance s and Advance s

11105 Fixed Assets To Land A/c. 4,03,630 4,03,630

1,88,04,439 11521, 11525, Capital work in Capital work in To capitalized 1,88,04,439 11510 Costs A/c. Progress (under Progress (under Fixed Assets)

Reserve To

22210 Surplus 375,95,30,18 2 s & Surplus Revaluatio n Reserve For ICC Project 2:

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Accoun tCode Grouped as Entry Debit Credit

Current Assets, Loans and Stock-in 13270 Advance s trade A/c 390,32,79,00 0

Fixed To Land 11105 Assets A/c. 4,16,954 Capital work in Capital work in 1,94,25,403 11521, 11525, Progress (under Progress (under To capitalized 11510 Fixed Assets) Costs A/c.

Reserve To

22210 s & Surplus Revaluatio n 388,34,36,64 3 s & Surplus Reserve It is evident from the Account Codes and the relevant Groupings mentioned in the above entries that the is evident from the Account Codes and the relevant Groupings mentioned in the above entries that the is evident from the Account Codes and the relevant Groupings mentioned in the above entries that the credit to the Revaluation Reserve account has been created with a corresponding debit to the 'Current credit to the Revaluation Reserve account has been created with a corresponding debit to the 'Current credit to the Revaluation Reserve account has been created with a corresponding debit to the 'Current Assets, Loans and Advances.' It is evident that this Assets, Loans and Advances.' It is evident that this is not a case where the Revaluation Reserve is is not a case where the Revaluation Reserve is created out of profits for the year. Having recorded the stock created out of profits for the year. Having recorded the stock-in-trade at its fair value at the time of trade at its fair value at the time of conversion, the entire value of such stock in trade becomes tha cost for the real estate division. conversion, the entire value of such stock in trade becomes tha cost for the real estate division. conversion, the entire value of such stock in trade becomes tha cost for the real estate division. Consequently, this entire cost amounting to Rs. 768.18 Crs (i.e.Rs. 377.85 Crs + 390.33 Crs) is recorded equently, this entire cost amounting to Rs. 768.18 Crs (i.e.Rs. 377.85 Crs + 390.33 Crs) is recorded equently, this entire cost amounting to Rs. 768.18 Crs (i.e.Rs. 377.85 Crs + 390.33 Crs) is recorded as 'Land cost on conversion off free hold land from fixed assets to stock in trade' under the head as 'Land cost on conversion off free hold land from fixed assets to stock in trade' under the head as 'Land cost on conversion off free hold land from fixed assets to stock in trade' under the head 'Construction Expenses' as an item of debit to P&L accou 'Construction Expenses' as an item of debit to P&L account. Needless to say, to the extent the land is nt. Needless to say, to the extent the land is lying in 'Stock-in-Trade' of construction business, it is once again recognised as part of closing inventory Trade' of construction business, it is once again recognised as part of closing inventory Trade' of construction business, it is once again recognised as part of closing inventory by crediting the P&L account and debiting Asset Account. From this it is clear that this debit ofRs. 768.18 by crediting the P&L account and debiting Asset Account. From this it is clear that this debit ofRs. by crediting the P&L account and debiting Asset Account. From this it is clear that this debit ofRs. Trade to the real estate business and Crs. to the Profit and Loss Account reflects the cost of the Stock Crs. to the Profit and Loss Account reflects the cost of the Stock-in-Trade to the real estate business and that it does not reflect any amount carried to reserves. that it does not reflect any amount carried to reserves. 42. During the year, the Assessee incurred certain further expenses towards these t 42. During the year, the Assessee incurred certain further expenses towards these two 42. During the year, the Assessee incurred certain further expenses towards these t projects which were debited directly to the P&L account and in computing the profits of the projects which were debited directly to the P&L account and in computing the profits of the projects which were debited directly to the P&L account and in computing the profits of the real estate segment, these have been duty considered separately. It was claimed by the real estate segment, these have been duty considered separately. It was claimed by the real estate segment, these have been duty considered separately. It was claimed by the assessee before us that the Revenues from the said construction business i assessee before us that the Revenues from the said construction business is recognized on assessee before us that the Revenues from the said construction business i the basis of 'percentage completion method1. See note 31on page 1 & the basis of 'percentage completion method . See note 31on page 1 & 2 of the Annual Accounts as part of the notes on Significant Accounting Policies. Accordingly, the Assessee Accounts as part of the notes on Significant Accounting Policies. Accordingly, the Assessee Accounts as part of the notes on Significant Accounting Policies. Accordingly, the Assessee has recognized revenue of Rs.258,62,49,100/- in respect of 1CC-1 Project and revenue has recognized revenue of Rs.258,62,49,100/ 1 Project and revenue

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ofRs.260,78,49,630/-for ICC for ICC-2 Project, aggregating to Rs. 519,40,98 730/ 40,98 730/-,Working of the Real Estate Projects based on the percentage completion method. Having recognized the Real Estate Projects based on the percentage completion method. Having recognized the Real Estate Projects based on the percentage completion method. Having recognized the revenues as above, the portion of the Revaluation revenues as above, the portion of the Revaluation Reserve which relates to the sale recognized as per percentage completion method needs to be Reserve which relates to the sale recognized as per percentage completion method needs to be Reserve which relates to the sale recognized as per percentage completion method needs to be released to the P&L account. Thus, to that extent, the proportionate par released to the P&L account. Thus, to that extent, the proportionate part of the 'Revaluation Reserve' i t of the 'Revaluation Reserve' is withdrawn and credited to the Profit and Loss Account (Amount Rs. 165.27 Crs,). withdrawn and credited to the Profit and Loss Account (Amount Rs. 165.27 Crs,). Entries passed for release from Revaluation Reserve Entries passed for release from Revaluation Reserve (a) For 1CC-1 Project Revaluation Reserve...........,Dr. 81,69,56,453 Revaluation Reserve...........,Dr. 81,69,56,453 To Profit and Loss Account... Cr. 81,69,56,453 To Profit and Loss Account... Cr. 81,69,56,453 (b) For 1CC-2 Project: Revaluation Reserve........... Dr. 83,57,27,418 Revaluation Reserve........... Dr. 83,57,27,418 To Profit and Loss Account.. .Cr. 83,57127,418 To Profit and Loss Account.. .Cr. 83,57127,418 This is given by the assessee in its This is given by the assessee in its paper book at page 82 note no. 31 to 32, the audited accounts paper book at page 82 note no. 31 to 32, the audited accounts explaining this Position. 43. Having recognized the revenues as above, the assessee claimed that it is now left with Closing stock- 43. Having recognized the revenues as above, the assessee claimed that it is now left with Closing stock 43. Having recognized the revenues as above, the assessee claimed that it is now left with Closing stock in-trade and its valuation. As the revalued amount of land is i trade and its valuation. As the revalued amount of land is included in the cost of the project, to the ncluded in the cost of the project, to the extent of the revenues from the project are not yet recognize the revalued amount is carried forward as extent of the revenues from the project are not yet recognize the revalued amount is carried forward as extent of the revenues from the project are not yet recognize the revalued amount is carried forward as part of work-in-progress by crediting theP&L account and carrying forward the dosing WIP to the Balance progress by crediting theP&L account and carrying forward the dosing WIP to the Balance progress by crediting theP&L account and carrying forward the dosing WIP to the Balance . This is reflected in the following accounting treatment: Sheet. This is reflected in the following accounting treatment: (a) For ICC-i Project: trade (Balance Sheet).. .Dr. 582,43,61,125 Stock-in-trade (Balance Sheet).. .Dr. 582,43,61,125 To Profit and Loss A/c..,.....,.....Cr, 582,43,61,125 To Profit and Loss A/c..,.....,.....Cr, 582,43,61,125 (b) For ICC-2 Project: trade (Balance Sheet).. .Dr. 605,67,27,668 Stock-in-trade (Balance Sheet).. .Dr. 605,67, To Profit and Loss A/c............. Cr. 605067,27,668 To Profit and Loss A/c............. Cr. 605067,27,668 From the above, we find that Revaluation Reserve was created on transfer of land from Fixed Asset to From the above, we find that Revaluation Reserve was created on transfer of land from Fixed Asset to From the above, we find that Revaluation Reserve was created on transfer of land from Fixed Asset to Stock-in-trade. Thus, Revaluation Resen/e was not created by debiting the P&L account as assum trade. Thus, Revaluation Resen/e was not created by debiting the P&L account as assum trade. Thus, Revaluation Resen/e was not created by debiting the P&L account as assumed by the AO. The amount of Revaluation Reserve embedded in the value of the stock-in-trade transferred to the AO. The amount of Revaluation Reserve embedded in the value of the stock the AO. The amount of Revaluation Reserve embedded in the value of the stock the P&L account (Debit side) is, at the end of the year, based on the matching principles, either the P&L account (Debit side) is, at the end of the year, based on the matching principles, either the P&L account (Debit side) is, at the end of the year, based on the matching principles, either recognized as revenue corresponding to the revenues recognized as revenue corresponding to the revenues recognized based on percentage completion recognized based on percentage completion method (Credit side or reflected as part of the Closing work method (Credit side or reflected as part of the Closing work-in-progress (debit side) carried forward to progress (debit side) carried forward to Balance Sheet. The profits of the assessee as shown in its P&L account duly considers the profits based Balance Sheet. The profits of the assessee as shown in its P&L account duly considers the profits based Balance Sheet. The profits of the assessee as shown in its P&L account duly considers the profits based on Percentage Completion Method on the portions sold during the year and hence there is no warrant for ercentage Completion Method on the portions sold during the year and hence there is no warrant for ercentage Completion Method on the portions sold during the year and hence there is no warrant for again adding the revaluation. Reser\fe to such declared profits. The addition, made by the AO leads to not again adding the revaluation. Reser e to such declared profits. The addition, made by the AO leads to not merely double accounting of the book profits actua merely double accounting of the book profits actually earned by the assessee but also leads to lly earned by the assessee but also leads to accounting for profits not yet earned by the assessee in respect of the portion of the project not yet accounting for profits not yet earned by the assessee in respect of the portion of the project not yet accounting for profits not yet earned by the assessee in respect of the portion of the project not yet in-progress. ' completed and not yet sold and which is carried forward as part of closing work completed and not yet sold and which is carried forward as part of closing work-in 44. We have gone through the provision of Clause (b) of Explanation to section 115JB(2) of the Act, one through the provision of Clause (b) of Explanation to section 115JB(2) of the Act, one through the provision of Clause (b) of Explanation to section 115JB(2) of the Act, which applies only in case of Appropriation of profits which applies only in case of Appropriation of profitsJ. Clause (b) of Explanation I to section 115JB(2) . Clause (b) of Explanation I to section 115JB(2) requires the bookprofits to be increased by "the amounts carried to any reserves by whatever name requires the bookprofits to be increased by "the amounts carried to any reserves by whatever name requires the bookprofits to be increased by "the amounts carried to any reserves by whatever name called. The underlined words imply a transfer of the relevant amounts, from the Profit and Loss Account called. The underlined words imply a transfer of the relevant amounts, from the Profit and Loss Account called. The underlined words imply a transfer of the relevant amounts, from the Profit and Loss Account to the Reserve Account. Indeed, this is duly supported by not only the dictionary meaning of the word he Reserve Account. Indeed, this is duly supported by not only the dictionary meaning of the word he Reserve Account. Indeed, this is duly supported by not only the dictionary meaning of the word 'carry" as we shall shortly see, but, also by the use of the words 'if any amount' referred to in clauses 'carry" as we shall shortly see, but, also by the use of the words 'if any amount' referred to in clauses 'carry" as we shall shortly see, but, also by the use of the words 'if any amount' referred to in clauses !(a)(i) debited to the profit and loss account in th (a)(i) debited to the profit and loss account in the text of Explanation 1 itself. The word 'earn/ has several e text of Explanation 1 itself. The word 'earn/ has several shades of meaning as would be evident from the extracts from the Webster's dictionary and the Oxford shades of meaning as would be evident from the extracts from the Webster's dictionary and the Oxford shades of meaning as would be evident from the extracts from the Webster's dictionary and the Oxford dictionary. However, in the context in which the words 'earned to' are used, in clause (c ) of Explanation dictionary. However, in the context in which the words 'earned to' are used, in clause (c ) of dictionary. However, in the context in which the words 'earned to' are used, in clause (c ) of 1, it appears that the following shades ,of meaning are relevant in the present context; viz.;- 1, it appears that the following shades ,of meaning are relevant in the present context; viz.; 1, it appears that the following shades ,of meaning are relevant in the present context; viz.;

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In Merriam Webster’s Collegiate Dictionary: In Merriam Webster’s Collegiate Dictionary: , a number in adding)' '6: to transfer from one place (as a column) to another ( '6: to transfer from one place (as a column) to another (—, a number in adding)' transferred in addition from one number place to the adjacent one of higher '4: a quantity that is transferred in addition from one number place to the adjacent one of higher transferred in addition from one number place to the adjacent one of higher place value'. In. the Oxford English Reference Dictionary: In. the Oxford English Reference Dictionary: (in reckoning) transfer (a figure) to a column of a higher value' (in reckoning) transfer (a figure) to a column of a higher value' It is apparent from the plain reading of the phrase 'am It is apparent from the plain reading of the phrase 'amounts carried to' in clause (b) of Explanation 1 ounts carried to' in clause (b) of Explanation 1 read with the above referred shades of meanings of the word 'carry' that the amounts contemplated read with the above referred shades of meanings of the word 'carry' that the amounts contemplated read with the above referred shades of meanings of the word 'carry' that the amounts contemplated to bein creased in computing the book profits are the amounts that are transferred from the Profit to bein creased in computing the book profits are the amounts that are transferred from the Profit to bein creased in computing the book profits are the amounts that are transferred from the Profit and Loss Account to the Reserves Account. As claimed by id Counsel Sh. Thar in the present case, ccount to the Reserves Account. As claimed by id Counsel Sh. Thar in the present case, ccount to the Reserves Account. As claimed by id Counsel Sh. Thar in the present case, there is no transfer of amounts from the Profit and Loss Account to the Reserves Account Indeed, there is no transfer of amounts from the Profit and Loss Account to the Reserves Account Indeed, there is no transfer of amounts from the Profit and Loss Account to the Reserves Account Indeed, the reserves in the present case are created by way of revaluation of la the reserves in the present case are created by way of revaluation of land which means that the nd which means that the reserves do not reflect the above, it is evident that the AO has misread the provisions of the law and reserves do not reflect the above, it is evident that the AO has misread the provisions of the law and reserves do not reflect the above, it is evident that the AO has misread the provisions of the law and misdirected himself in making the addition to the book profits in this behalf. misdirected himself in making the addition to the book profits in this behalf. 45. We have gone through the case law relied on by 45. We have gone through the case law relied on by the Counsel for assessee of the Hon'ble the Counsel for assessee of the Hon'ble Supreme Court in the case of National Hydroelectric Power Corporation v 'CIT (320 ITR 374)(SC). In Supreme Court in the case of National Hydroelectric Power Corporation v 'CIT (320 ITR 374)(SC). In Supreme Court in the case of National Hydroelectric Power Corporation v 'CIT (320 ITR 374)(SC). In this case, the question before the Hon'ble Supreme Court was as to whether advance against this case, the question before the Hon'ble Supreme Court was as to whether advance against this case, the question before the Hon'ble Supreme Court was as to whether advance against depreciation (AAD) could be regarded as amountcarried to reserves within the meaning of clause (b) be regarded as amountcarried to reserves within the meaning of clause (b) be regarded as amountcarried to reserves within the meaning of clause (b) of Explanation 1 to section 115JB or not. In this context, the Supreme Court has explained the true of Explanation 1 to section 115JB or not. In this context, the Supreme Court has explained the true of Explanation 1 to section 115JB or not. In this context, the Supreme Court has explained the true interpretation ofclause(b) on page 376, 377 in the following words: interpretation ofclause(b) on page 376, 377 in the following words: te herein below Explanation I tosection 115JB of the 1961 Act which reads asunder: "....9. We quote herein below Explanation I tosection 115JB of the 1961 Act which reads asunder: te herein below Explanation I tosection 115JB of the 1961 Act which reads asunder: "Explanation I. For the purposes of this section, 'book profit' means the net profit as shown in the "Explanation I. For the purposes of this section, 'book profit' means the net profit as shown in the "Explanation I. For the purposes of this section, 'book profit' means the net profit as shown in the profit and loss account for the relevant previous yearprepared under sub profit and loss account for the relevant previous yearprepared under subsection ('2), as increased section ('2), as increased by,) * (a/***** * (a/***** * (a/***** -• (b) the amounts carried to any reserves, by whatever name called, other than a reserve specified under amounts carried to any reserves, by whatever name called, other than a reserve amounts carried to any reserves, by whatever name called, other than a reserve section 33A C; or if any, amount referred to in clauses (a) to (li) is debited to the profit and loss section 33A C; or if any, amount referred to in clauses (a) to (li) is debited to the profit and loss section 33A C; or if any, amount referred to in clauses (a) to (li) is debited to the profit and loss account, and as reduced by.." 10. We find merit in this civil appeal. On reading explanation L quoted above, it is clear that to make 10. We find merit in this civil appeal. On reading explanation L quoted above, it is clear that to make 10. We find merit in this civil appeal. On reading explanation L quoted above, it is clear that to make addition under clause (b) two conditions must be jointly satisfied: an addition under clause (b) two conditions must be jointly satisfied: (a) There must be a debit of the amount to the profit and loss account. (a) There must be a debit of the amount to the profit and loss account. (b) The amount so debited must be carried to the reserve. (b) The amount so debited must be carried to the reserve. Since the amount of AAD is reduced from sales, there is no Since the amount of AAD is reduced from sales, there is no debit in the profit and loss account The debit in the profit and loss account The amount did not enter the stream of income for the purposes of determination of net profit at all, amount did not enter the stream of income for the purposes of determination of net profit at all, amount did not enter the stream of income for the purposes of determination of net profit at all, hence clause b) of Explanation I 'was not applicable. Further, "reserve" as contemplated by clause hence clause b) of Explanation I 'was not applicable. Further, "reserve" as contemplated by clause hence clause b) of Explanation I 'was not applicable. Further, "reserve" as contemplated by clause (b) of the Explanation Ito section 1 15JB of the 1961 Act is required to be carried through the profit ation Ito section 1 15JB of the 1961 Act is required to be carried through the profit ation Ito section 1 15JB of the 1961 Act is required to be carried through the profit and loss account. At this stage it may be stated that there are broadly, two types of reserves, viz., and loss account. At this stage it may be stated that there are broadly, two types of reserves, viz., and loss account. At this stage it may be stated that there are broadly, two types of reserves, viz., those that are routed through profit and loss account and those whic those that are routed through profit and loss account and those which are not carried via profit and h are not carried via profit and loss account, for example, a Capita! Resen/e such as Share Premium Account. AAD is not a loss account, for example, a Capita! Resen/e such as Share Premium Account. AAD is not a loss account, for example, a Capita! Resen/e such as Share Premium Account. AAD is not a reserve. It is not appropriation of profits...." reserve. It is not appropriation of profits...." The term 'Appropriation of profits' is explained in the Guidance Note on Terms used in The term 'Appropriation of profits' is explained in the Guidance Note on Terms used i The term 'Appropriation of profits' is explained in the Guidance Note on Terms used i Financial -Statements' issued by the Institute of Chartered Accountants of India in the Statements' issued by the Institute of Chartered Accountants of India in the Statements' issued by the Institute of Chartered Accountants of India in the following words: "An account sometimes included as a separate section of "An account sometimes included as a separate section of-the- profit and loss statement showing profit and loss statement showing application of profits towards dividends, reserves etc." application of profits towards dividends, reserves etc

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It is evident on the given facts that the revaluation reserve is not created by 'Application of profits'. It is evident on the given facts that the revaluation reserve is not created by 'Application of profits'. It is evident on the given facts that the revaluation reserve is not created by 'Application of profits'. Indeed, the debit to the Profit and Loss Account indicates the cost of land to the real estate division Indeed, the debit to the Profit and Loss Account indicates the cost of land to the real estate division Indeed, the debit to the Profit and Loss Account indicates the cost of land to the real estate division and not 'Application of profits". 46. Therefore, we are of the view that in the light of the decision of Supreme Court in National refore, we are of the view that in the light of the decision of Supreme Court in National refore, we are of the view that in the light of the decision of Supreme Court in National Hydroelectric Power Corporation Ltd. (supra),the addition made by invoking the provisions of clause Hydroelectric Power Corporation Ltd. (supra),the addition made by invoking the provisions of clause Hydroelectric Power Corporation Ltd. (supra),the addition made by invoking the provisions of clause 1 to section 115JB(2) cannot be sustained. (b) of the Explanation-1 to section 115JB(2) cannot be sustained. 47. The assessee claimed that disclosure under section 217 of the Companies Act 1956 is made 47. The assessee claimed that disclosure under section 217 of the Companies Act 1956 is made 47. The assessee claimed that disclosure under section 217 of the Companies Act 1956 is made and as per Clause (b) of section 217(1) of the Companies Act, 1956, requires disclosure in the report and as per Clause (b) of section 217(1) of the Companies Act, 1956, requires disclosure in the report and as per Clause (b) of section 217(1) of the Companies Act, 1956, requires disclosure in the report by the Board of directors in respect of the amounts which th by the Board of directors in respect of the amounts which the company proposes to carry to any e company proposes to carry to any reserves. The text of said section is set to out as annexure es. The text of said section is set to out as annexure-5.The disclosures pursuant to section 5.The disclosures pursuant to section 217 are given in the Directors' Report starting from page 32 of the audited accounts. It is apparent 217 are given in the Directors' Report starting from page 32 of the audited accounts. It is apparent 217 are given in the Directors' Report starting from page 32 of the audited accounts. It is apparent from para I of the Directors Report that various appropriations out of profits are disclosed and one rectors Report that various appropriations out of profits are disclosed and one rectors Report that various appropriations out of profits are disclosed and one such appropriation is that of profits "transferred to General Reserve".. The assessee claimed that the such appropriation is that of profits "transferred to General Reserve".. The assessee claimed that the such appropriation is that of profits "transferred to General Reserve".. The assessee claimed that the Revaluation Reserve is not considered as 'appropriation for the purposes of disclosures in the Revaluation Reserve is not considered as 'appropriation for the purposes Revaluation Reserve is not considered as 'appropriation for the purposes Directors Report pursuant to section 217 of the companies act 1956 and the said Directors Report is Directors Report pursuant to section 217 of the companies act 1956 and the said Directors Report is Directors Report pursuant to section 217 of the companies act 1956 and the said Directors Report is duly filed with the Registrar of Companies and no objections have been raised whatsoever of date duly filed with the Registrar of Companies and no objections have been raised whatsoever of date duly filed with the Registrar of Companies and no objections have been raised whatsoever of date which indicates that the provisions o which indicates that the provisions of section 217 have been duly complied with. Indeed, the phrase f section 217 have been duly complied with. Indeed, the phrase 'amounts carried to reserves' as understood under the Act inthe context of section 115JB cannot be 'amounts carried to reserves' as understood under the Act inthe context of section 115JB cannot be 'amounts carried to reserves' as understood under the Act inthe context of section 115JB cannot be different from its interpretation under the Companies Act. In view of the above, the application of different from its interpretation under the Companies Act. In view of the above, the applicati different from its interpretation under the Companies Act. In view of the above, the applicati clause (b) of the Explanation I to section 115JB (2) is evidently inappropriate. clause (b) of the Explanation I to section 115JB (2) is evidently inappropriate. 48. Disclosures requirement under Revised Schedule VI to the Companies Act 1956 in terms of para 48. Disclosures requirement under Revised Schedule VI to the Companies Act 1956 in terms of para 48. Disclosures requirement under Revised Schedule VI to the Companies Act 1956 in terms of para 6 (B)(i)(h) of the general instructions for preparation of Balance Shee 6 (B)(i)(h) of the general instructions for preparation of Balance Sheet under Revised Schedule VI to t under Revised Schedule VI to the Companies Act, 1956, the appropriations by of transfer to / from reserves needs to be disclosed the Companies Act, 1956, the appropriations by of transfer to / from reserves needs to be disclosed the Companies Act, 1956, the appropriations by of transfer to / from reserves needs to be disclosed under the caption 'Reserves and Surplus'. Annexure under the caption 'Reserves and Surplus'. Annexure -6 sets out a copy of the relevant portions of the 6 sets out a copy of the relevant portions of the format of Revised Schedule VI. Ld Counsel explained that in compliance with the above ule VI. Ld Counsel explained that in compliance with the above ule VI. Ld Counsel explained that in compliance with the above requirements, the amounts transferred to General Reserve have been disclosed at page 69 of the requirements, the amounts transferred to General Reserve have been disclosed at page 69 of the requirements, the amounts transferred to General Reserve have been disclosed at page 69 of the audited annual accounts under the caption 'Appropriations' and the list of 'Appropriations' so audited annual accounts under the caption 'Appropriations' and the list of 'Appropriations' so audited annual accounts under the caption 'Appropriations' and the list of 'Appropriations' so disclosed does not include any amount transferred to 'Revaluation Reserve'. The accounts have closed does not include any amount transferred to 'Revaluation Reserve'. The accounts have closed does not include any amount transferred to 'Revaluation Reserve'. The accounts have been duly audited by the statutory auditors of the company, approved by the shareholders of the been duly audited by the statutory auditors of the company, approved by the shareholders of the been duly audited by the statutory auditors of the company, approved by the shareholders of the company and filed with the Registrar of Companies. None of the three company and filed with the Registrar of Companies. None of the three authorities have alleged that authorities have alleged that the accounts are not in accordance with the Revised Schedule and hence, this conclusively proves the accounts are not in accordance with the Revised Schedule and hence, this conclusively proves the accounts are not in accordance with the Revised Schedule and hence, this conclusively proves that Revaluation Reserve is not created out of the profits of the company. These reserves are not in that Revaluation Reserve is not created out of the profits of the company. These reserves are not in that Revaluation Reserve is not created out of the profits of the company. These reserves are not in the nature of appropriation of profit and therefore, the question of adding the same to the book of profit and therefore, the question of adding the same to the book of profit and therefore, the question of adding the same to the book profits by invoking clause (b) of Explanation f (I) to section 115JB (2) does not arise. profits by invoking clause (b) of Explanation f (I) to section 115JB (2) does not arise. profits by invoking clause (b) of Explanation f (I) to section 115JB (2) does not arise. 49. We are of the view that the action of the AO is contrary to the scheme of the provisions of MAT - 49. We are of the view that the action of the AO is contrary to the scheme of the provisions of M 49. We are of the view that the action of the AO is contrary to the scheme of the provisions of M clause (1) of the Explanation I to section 115J8 (2) of the Act. Clause (j) of the Explanation 1 clause (1) of the Explanation I to section 115J8 (2) of the Act. Clause (j) of the Explanation 1 clause (1) of the Explanation I to section 115J8 (2) of the Act. Clause (j) of the Explanation 1 requires that the book profits shown in the profit and loss account for a given year should be requires that the book profits shown in the profit and loss account for a given year should be requires that the book profits shown in the profit and loss account for a given year should be increased by - 'the amount standing in revaluation reserve 'the amount standing in revaluation reserve relating to revalued asset on the relating to revalued asset on the retirement or disposal of such asset 'The said clause was introduced by Finance Act, 2012. The retirement or disposal of such asset 'The said clause was introduced by Finance Act, 2012. The retirement or disposal of such asset 'The said clause was introduced by Finance Act, 2012. The Memorandum explaining the provisions of Finance Bill, 201.2 has explained the rationale in the Memorandum explaining the provisions of Finance Bill, 201.2 has explained the rationale in the Memorandum explaining the provisions of Finance Bill, 201.2 has explained the rationale in the following words. "It is noted that in certain cases, the amount landing in the revaluation reserve is taken "It is noted that in certain cases, the amount landing in the revaluation reserve is taken "It is noted that in certain cases, the amount landing in the revaluation reserve is taken directly to the general reserve on disposal of revalued asset. Thus, the gain attributable directly to the general reserve on disposal of revalued asset. Thus, the gain attributable directly to the general reserve on disposal of revalued asset. Thus, the gain attributable

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to revaluation of the asset is not subject to MAT liability. It is, therefore, proposed to to revaluation of the asset is not subject to MAT liability. It is, theref to revaluation of the asset is not subject to MAT liability. It is, theref amend section II5JB to provide that the book profit of the purpose of section 115JB shall amend section II5JB to provide that the book profit of the purpose of section 115JB shall amend section II5JB to provide that the book profit of the purpose of section 115JB shall be increased in the amount standing in the revaluation reserve relating to the revalued be increased in the amount standing in the revaluation reserve relating to the revalued be increased in the amount standing in the revaluation reserve relating to the revalued asset which has been retired or asset which has been retired or disposed, the same is not credited to the profit and Loss account" Relevant Extracts from the credited to the profit and Loss account" Relevant Extracts from the credited to the profit and Loss account" Relevant Extracts from the Explanatory memorandum to the Finance Bill, 2012are set out at Annexure 7." Explanatory memorandum to the Finance Bill, 2012are set out at Annexure 7." Explanatory memorandum to the Finance Bill, 2012are set out at Annexure 7." Para II of the relevant portion of Explanatory Memorandum clearly indicates that the amount Para II of the relevant portion of Explanatory Memorandum clearly indicates that the amount Para II of the relevant portion of Explanatory Memorandum clearly indicates that the amount standing to the Revaluation Reserve should be treated as part of taxable Book Profits only in the aluation Reserve should be treated as part of taxable Book Profits only in the aluation Reserve should be treated as part of taxable Book Profits only in the year in which the relevant asset is retired or disposed. In view of the above, we are of the view that year in which the relevant asset is retired or disposed. In view of the above, we are of the view that year in which the relevant asset is retired or disposed. In view of the above, we are of the view that valuation of inventory is essentially a part of the process of determining valuation of inventory is essentially a part of the process of determining the trading results and that the trading results and that valuation of inventories does not give rise to any profits [see an early decision of the Hon'ble valuation of inventories does not give rise to any profits [see an early decision of the Hon'ble valuation of inventories does not give rise to any profits [see an early decision of the Hon'ble Supreme Court in the case of Chainrup Sampatram V. CIT (24 FIR 481). The Hon'ble Supreme Supreme Court in the case of Chainrup Sampatram V. CIT (24 FIR 481). The Hon'ble Supreme Supreme Court in the case of Chainrup Sampatram V. CIT (24 FIR 481). The Hon'ble Supreme Court has explained at Page 485, the pur Court has explained at Page 485, the purpose of crediting the value of unsold stock in the Profit and pose of crediting the value of unsold stock in the Profit and Loss Account in the following words: Loss Account in the following words: "The true purpose of crediting the value of, unsold stock is to balance the cost of those goods "The true purpose of crediting the value of, unsold stock is to balance the cost of those goods "The true purpose of crediting the value of, unsold stock is to balance the cost of those goods entered on the other side of the account at the time of thei entered on the other side of the account at the time of their purchase, so that the cancelling out of r purchase, so that the cancelling out of the entries relating to the same stock from both sides of the account would leave only the the entries relating to the same stock from both sides of the account would leave only the the entries relating to the same stock from both sides of the account would leave only the transactions on which there have been actual sales in the course of the year showing the profit or transactions on which there have been actual sales in the course of the year showing the profit or transactions on which there have been actual sales in the course of the year showing the profit or n the year's trading." loss actually realised on the year's trading." In any case, this is not a case of revaluation of stocks. The Indian Accounting Standards (AS-2) In any case, this is not a case of revaluation of stocks. The Indian Accounting Standards (AS In any case, this is not a case of revaluation of stocks. The Indian Accounting Standards (AS does not permit upward revaluation of stock does not permit upward revaluation of stock-in-trade. This is, a case of transfer of Fixed Asset to trade. This is, a case of transfer of Fixed Asset to Stock-in-trade at a revalued amount trade at a revalued amount. Indeed, in the year of creation of Revaluation Reserve, there is . Indeed, in the year of creation of Revaluation Reserve, there is no commercial profit earned by the Assesses Company by virtue of revaluation. The entire purpose no commercial profit earned by the Assesses Company by virtue of revaluation. The entire purpose no commercial profit earned by the Assesses Company by virtue of revaluation. The entire purpose of introduction of MAT was that certain companies were declaring significant book profits, paying of introduction of MAT was that certain companies were declaring significant book profits, p of introduction of MAT was that certain companies were declaring significant book profits, p dividends to its shareholders but not paying any tax because of various tax shields like investment dividends to its shareholders but not paying any tax because of various tax shields like investment dividends to its shareholders but not paying any tax because of various tax shields like investment allowance, depreciation etc. Accordingly, we delete the addition made by AO of the entire amount of allowance, depreciation etc. Accordingly, we delete the addition made by AO of the entire amount of allowance, depreciation etc. Accordingly, we delete the addition made by AO of the entire amount of revaluation reserve created during the year to its revaluation reserve created during the year to its audited profit applying the provisions of section audited profit applying the provisions of section clause (b) of explanation (1) to section 115JB (2) of the Act. However, the AO will verify whether the clause (b) of explanation (1) to section 115JB (2) of the Act. However, the AO will verify whether the clause (b) of explanation (1) to section 115JB (2) of the Act. However, the AO will verify whether the assesses has released a sum of Rs. 165,26,83,871/ has released a sum of Rs. 165,26,83,871/-from revaluation reserve and credited to the from revaluation reserve and credited to the profit and loss account, in that case this is not to be added as income under section 115JB of the Act and loss account, in that case this is not to be added as income under section 115JB of the Act and loss account, in that case this is not to be added as income under section 115JB of the Act This issue of assessee's appeal is partly allowed..." This issue of assessee's appeal is partly allowed..." 10.1 Neither there is any factual change nor any legal change during the year under 10.1 Neither there is any factual change nor any legal change during the year under 10.1 Neither there is any factual change nor any legal change during the year under consideration, therefore, respectfully following the judgement of Hon'ble ITAT in ore, respectfully following the judgement of Hon'ble ITAT in ore, respectfully following the judgement of Hon'ble ITAT in Appellant's own case for A.Yr.,2012 Appellant's own case for A.Yr.,2012-13, appeal of the assessee on this ground is 13, appeal of the assessee on this ground is allowed.”

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do not find any error in the order of the Ld.CIT(A) and accordingly, do not find any error in the order of the Ld.CIT(A) and accordingly, do not find any error in the order of the Ld.CIT(A) and accordingly, we uphold the same. we uphold the same. Ground No.4 of the appeal of the Revenue is Ground No.4 of the appeal of the Revenue is accordingly dismissed accordingly dismissed.

Order pronounced under Rule 34(4) of the ITAT Rules, Order pronounced under Rule 34(4) of the ITAT Rules, Order pronounced under Rule 34(4) of the ITAT Rules, 1963 on 24/01/2023. 01/2023. Sd/- Sd/ Sd/- (ABY T VARKEY ABY T VARKEY) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 24/01/2023 Pavanan, Sr. P.S (on contract)

Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, BY ORDER, //True Copy// (Sr. Private Secretary) Secretary) ITAT, Mumbai ITAT, Mumbai