GANESH HOUSING CORPN.LTD.,,AHMEDABAD vs. THE DY.CIT., CIRCLE-4,, AHMEDABAD

आदेश/O R D E R

PER PRADIP KUMAR KEDIA - AM:

The captioned appeals have been preferred by the assessee named above for different assessment years tabulated herein:

Sl. IT(SS)A No. AY CIT(A) Assessment order No. order dated passed under s.143 (3) & 143(3) r.w.s. 147 of the Income Tax Act, 1961 (‘the Act’) dated 1 2122/Ahd/2011 2008-09 30.06.2011 29.10.2010 2 2898/Ahd/2013 2007-08 30.09.2013 16.12.2011 3 452/Ahd/2014 2009-10 25.11.2013 15.12.2011 4 3011/Ahd/2014 2010-11 05.08.2014 28.03.2013 5 3084/Ahd/2015 2011-12 20.08.2015 26.03.2014 6 3085/Ahd/2015 2012-13 21.08.2015 29.12.2014

ITA No. 2122/Ahd/2011 A.Y. 2008-09 (Revenue’s appeal)

“1. The Ld. CIT(A) has erred in law and on facts in directing the assessing officer to treat the amount of sale consideration as advance money and give appropriate effect to the same in the A.Y. 2012-13 as per law, without appreciating the fact that

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sale of land transaction is completed and the amount payable for the same is shown by the purchaser as current liability. 2. The Ld. CIT(A) has erred in law and on facts in deleting the disallowance of Rs.17,15,66,503/- made by the AO on account of deduction u/s 80IB(10), without appreciating fact that with proper evidences A.O. has established that the assessee does not fulfill the condition for claiming deduction u/s 80IB. 3. The Ld. CIT(A) has erred in law and on facts in deleting the disallowance made by the A.O. on account of proportionate interest expenditure of Rs.1,31,00,000/- without appreciating fact the assessee company had incurred substantial interest expenditure while giving interest free loans.”

5.1 Briefly stated, the assessee company is engaged in the ongoing business of Real Estate Development & Construction Activities. For the AY 2008-09, the assessee filed return of income at Rs. Nil inter alia after claiming deduction of Rs.97,72,11,000/- under s.80IAB of the Act and deduction of Rs.17,15,66,503/- under s.80IB(10) of the Act. The assessee company also declared a book profit of Rs.1,38,21,919/- under s.115JB of the Act. The return was subjected to scrutiny assessment. The AO observed that assessee company has claimed deduction of Rs.97.72 Crores under s.80IAB in respect of profits of the undertaking engaged in the business of development of Special Economic Zone (SEZ) in the name of ‘Million Minds IT SEZ’ at Village Chharodi, Tragad, Ahmedabad. The AO noted that the

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assessee has given a portion of land notified as SEZ to a concern named AIPL based at Ahmedabad on perpetual lease. The AO treated this transaction as ‘sale of land’ instead of lease transaction. It was observed that the assessee company was trading the SEZ land as stock in trade. The assessee company sold 86574 sq.mtr. for an agreed consideration of Rs.1,04,23,58,400/- @ 12040 sq. mtr. Likewise the company to which the land has been sold i.e. AIPL is also showing the land purchased as fixed assets in his balance sheet. The AO observed that a physical inspection of the SEZ site as well as the details furnished by the assessee reveals that no development activity has been carried out. The uneven and widely vegetated land is lying vacant and it is not even covered by boundary walls. The SEZ proposal of the assessee company was stated to be approved by the Ministry of Commerce vide letter dated 20th December, 2006 subject to certain conditions as prescribed. For the profits declared by the assessee to be derived for SEZ business, the AO inquired into the eligibility of claim of deduction of Rs.97.72 Crores claimed under s.80IAB of the Act by issue of show cause notice. In response, the assessee provided a tabulated statement giving details about the various stages of compliance of the general conditions associated to proposed SEZ project as reproduced by the AO in para 5.5 of the assessment order.

5.2 The AO made further inquiries with the Development Commissioner of the SEZ and gathered various information and explanation from the assessee and found that no undertaking as on date has been allowed to set up business in the IT SEZ and concluded that the gains arising on alleged sale of land to AIPL does not emanate from business of developing a SEZ within the sphere of Section 80IAB of the Act. While holding so, the AO also took note of the information received from the Development Commissioner that no

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other person including AIPL has been approved as ‘co-developer’ of the IT SEZ in terms of sub-section 11 & 12 of Section 3 of SEZ. It was thus observed that as on the date, there was no co-developer for the project. The AO thus took a view that no development work has taken place on the land designated for the SEZ. The AO also noted that the assessee company has merely acquired the land and has got the same notified for its proposed SEZ. It has sold a part of the land as stated above and has shown huge profits therefrom and claimed the same to be eligible for deduction under s.80IAB of the Act. The purchasing company is showing the assets purchased as fixed assets and the amount payable to the assessee company as current liability. The agreement between the assessee company and AIPL shows that the assessee company has agreed to get approval of the co-developer status for the proposed lease from the competent authority i.e. Board of Approval. However, it was found that no person including AIPL has been appointed to become co-developer of the SEZ project till date as pointed out by Development Commissioner. It was noted by the AO that the plots can be transferred only to an approved unit as per the SEZ regulations. The AO thus noted that AIPL to whom the land has been sold in the proposed SEZ by way of perpetual lease did not have any approved undertaking to be set up in the ITSEZ as on 31.03.2008 nor was it a co-developer of the project.

5.3 The AO thus found that there were no approved units in SEZ as on 31.03.2008 and the company to which the land has been sold accordingly was not entitled to purchase land in SEZ. The assessee company has also not followed any of the regulations stipulated in SEZ Act as stated above. The AO thus opined that income declared by the assessee in terms of perpetual lease agreement did not arise from SEZ business purpose. The AO accordingly proceeded to disallow the

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deduction of Rs.97,72,11,000/- claimed by the assessee under s. 80IAB of the Act.

6.1 Before the CIT(A), the assessee however repositioned itself and challenged the action of the AO on two grounds; (i) the disallowance of claim of deduction under s.80IAB of the Act amounting to Rs.97,72,11,000/- is not justified at all in the facts of the case and (ii) in the alternative to the first contention, it was also contended before the CIT(A) that the amount received from AIPL in pursuance of lease agreement is merely an ‘advance receipt’ which cannot be subjected to tax at all as it cannot be treated as ‘accrued income’ of the assessee in the peculiar factual matrix of the case at all during the relevant assessment year.

6.2 To support the first contention regarding claim of deduction under s.80IAB, the assessee reiterated various submissions made before the AO as noted by the CIT(A) in length and contended that the AO has wrongly appreciated the facts of the case and has wrongly observed that the assessee has not developed SEZ and merely sold notified vacant land without any development as contemplated under s.80IAB of the Act. It was contended that the AO has wrongly treated the concept of development of a SEZ provided in Section 80IAb of the Act as construction activity simplicitor whereas the development of a SEZ includes various stages of execution of the project of SEZ such as acquiring minimum area of land on which SEZ is required to be developed, obtaining approval from the Ministry of Commerce – Government of India for development of SEZ etc. In the process of development of SEZ, the developer has to obtain various permissions

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and clearance under different laws and civil construction work for the SEZ can commence only thereafter. The assessee put forth various other contentions to support its claim for eligibility of deduction as reproduced by the CIT(A) in para 4.2.3 – page no.37 of the CIT(A)’s order. The CIT(A) however did not find merit in the first plea of the assessee towards eligibility of deduction under s.80IAB of the Act. The relevant operative para of the order of the CIT(A) in this regard is reproduced hereunder:

“4.3 I have gone through the above referred facts of the case, DCIT’s observations about disallowance of claim u/s 80IAB, written submissions of Ld.AR and legal citations quoted in the reply. The DCIT has observed in para – 5.20 & 5.21 at pages 16 & 17 of the assessment order that “The assessee company has merely transferred land to a company which does not have an approved undertaking in the SEZ. Even if the said company becomes a co-developer, it would not entitle the assessee company to claim deduction u/s 80IAB as in the present facts and circumstances of the case, the assessee cannot be said to have developed SEZ. In view of the above facts and circumstances, the assessee's claim of deduction 80IAB is not allowable due to the following reasons: 1. The assessee has not developed SEZ during the year. Vacant land without any development has been sold by the assessee company. 2. The assessee has claimed exemption u/s 80IAB from the simple sale of land. The same is not allowable as per SEZ Act and Rules. Plots in the SEZ can be sold only to the undertakings approved by the Development Commissioner. Hence, the sale of land to an unapproved undertaking cannot be eligible for deduction u/s 801AB, 3. The assessee has not carried out any single operation which it was authorized to carry out till the end of the relevant financial year. 4. Even the bond cum legal undertaking required to be executed with the Development Commissioner was executed after the end of the relevant assessment year, 5. The assessee company in its various compliance reports to the development commissioner, in its Directors; Reports etc. has admitted that no development has been made at the proposed site of SEZ." 4.3.1 The A.O has discussed this issue elaborately in the assessment order, and reached to the logical conclusion that the land in SEZ can be leased out either to the approved undertaking by the Development Commissioner, or to the Co developer of SEZ , if that Codeveloper has been approved by the administrative ministry of the Central Govt. It is an admitted fact that impugned land has been leased out to M/s Abir Investments Pvt Ltd. which is neither an approved undertaking by the Development Commissioner nor it has Co developer status approved by

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the respective ministry of the Central Govt. The A O further mentioned that even if M/s Abir Investment is granted the status of Co developer by the Central Govt., still the impugned receipt would not be entitled for deduction u/s 801 AB in the hands of the appellant. On the other hand, the Ld. A.R filed voluminous submissions, stating that for leasing out the land in SEZ, the development of SEZ, and construction activities are not mandatory. But nowhere in his entire submissions filed any satisfactory reply that in the absence of the status of approved industry/undertaking from the development commissioner, or the status of Co-developer from the Central Govt., in what manner the impugned lease receipts can be treated as exempted u/s 80IAB of the .IT. Act,1961. 4.3.2. In view of the detailed and logical discussion in the assessment order and facts summarized in the aforesaid points, I am of the considered opinion that the claim of deduction of the assessee u/s 801AB is correctly disallowed by the A.O. I therefore held that the A.O was fully justified in rejecting the claim of the appellant u/s 801AB of the Act.”

6.3 Having discarded the plea of the assessee towards eligibility of claim under s.80IAB of the Act, the CIT(A) however found merit in the alternative plea of the assessee for excluding the income arising from lease consideration recorded in the books for transaction with AIPL on the ground that the nature of receipt from AIPL is merely an advance in respect of proposed lease of land in the notified and approved SEZ. The CIT(A) took note of the plea of the assessee that such advance receipt is not susceptible to tax as it cannot be treated as an accrued income in the case of assessee company for the reason that the said lease agreement in the nature of MOU is subject to fulfillment of several obligations by the assessee company and the lessee (AIPL) and the transaction specified in the lease agreement is totally contingent upon the major condition i.e. approval of AIPL as a ‘co- developer’ by the appropriate authority of Government of India. On reappraisal of the evidences placed to corroborate the second and alternative plea, the CIT(A) found substantial merit therein. The CIT(A) dealt with alternative plea in para 6 of its order and agreed with the contentions of the assessee that profit of so called sale transaction is prematurely booked in the books of accounts by the assessee which have not accrued in the hands of the assessee at all.

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The sale consideration arising from the proposed long term lease agreement of 99 years was found to be highly conditional and subject to fulfillment of several conditions which have not been met. The CIT(A) accordingly found merit in the plea of the assessee that the lease has not come into force and consequently income from such additional lease agreement cannot be said to have accrued to the assessee and crystalized during the year notwithstanding such sale/lease consideration has been treated as revenue receipt in the books of accounts of the assessee. The CIT(A) having taken note of the facts of the case and having regard to the long line of judicial precedents, directed the AO to treat the amount arising from the proposed lease agreement as ‘advance receipt’ being contingent in nature on account of non-fulfillment of prescribed conditions of the lease agreement qua rules and regulations of SEZ. The CIT(A) accordingly granted relief to the assessee in respect of alternative conditions to advance.

6.4 It will be appropriate to reproduce the deliberations made by the CIT(A) while dealing with the alternative contentions for the sake of proper reference:

"4.3.3. Now I take up the alternative ground taken by the appellant on this issue mentioning that the amount paid by M/s Abir Investments (Pvt ) Ltd is in the nature of advance receipt in respect of lease of land in the notified and approved SEZ, since impugned receipts were charged with several obligations at the part of the lessor visa vis lessee. 4.3.4. The reply of Ld. AR echoes the reasoning in para-6 of submission dated 06/06/2011 that ''without prejudice to above and alternatively, the Appellant submits that the consideration received from the said transaction is not taxable at all. For that matter, the Appellant would like to draw Your Honours attention to the Clause 2 - Conditions Precedent and Obligations of the Parties of the Agreement entered into with M/s Abir Investment Pvt. Ltd. (Copy of said agreement is enclosed herewith marked as “Annexure – J”). Sub-clause 2.1(a)/(c) and (e) of the said agreement provides that agreement would be terminated if M/s Abir Investment Pvt. Ltd. fails to get approval from the Central Government about Co-developer of the SEZ and in turn the Appellant would be required to pay back the amount received from M/s Abir Investment Pvt.

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Ltd. Therefore, the Appellant submits that under the circumstance, st the most the amount received by the Appellant from M/s Abir Investment Pvt. Ltd. can be treated as advances receipt towards conditional lease transaction wherein certain conditions are yet to be fulfilled. It is submitted that when a transaction is a conditional or contingent upon certain obligations to be fulfilled by the parties to the agreement, the agreement comes into effect and can be recognized only when all the conditions are fulfilled. In the facts of the present case since regulatory approvals and formalities are pending, the lease agreement cannot be given effect to and no part of the receipt can be treated as income for the year under consideration. The whole of the receipt partake the character of income only in the year of fulfillment of the terms and conditions stipulated in the lease agreement. Admitted conditions are yet to be fulfilled and therefore the amount so received by the appellant viz Rs.97,72,11,000/- has to be treated as advance only.” 4.3.5 The Ld. A.R. further submitted that alternatively and without prejudice to above justifying the claim of deduction U/s. 80IAB of the I .T. Act, by the appellant, the appellant company has already taken an alternative ground in the grounds of appeal filed with Form No. 35 in Para 7,8 & 9 while taking the contention that the amount received from M/s. Abir Investments Pvt. Ltd., in pursuance of the lease agreement is an advance receipt not subject to tax as it cannot be treated as an accrued income in the case of the appellant company for the reason that the said lease agreement is subject to fulfillment of obligations of the appellant company and lessee M/s. Abir Investments Pvt.Ltd., and contingent upon the approval of M/s. Abir Investments Pvt.Ltd., as a co-developer by the Appropriate Authority of Government of India.

6.1. The appellant company invite your honour's attention to the lease agreement entered into between the appellant company and M/s. Abir Investments Pvt.Ltd., which has been compiled at Page No. 672 to 731 of Paper Book No. 111. From the perusal of the said lease agreement, in Para 2 the title given is " conditions precedent and obligations of the Parties " and in Para 2.1 it has been stated that " The obligations of the proposed Lessee to complete the proposed transaction and execute the Lease Deed with the Developer shall be conditional upon fulfillment of the each of the following conditions ( in each case to the satisfaction of the Proposed Lessee) and thereafter in Para (a) to (i) , the conditions to be fulfilled by the Developer (Appellant Company) have been stated.

In Para 2.2 of the Lease Agreement, it has been provided that :- "The developer hereby agrees and acknowledges that, all the Conditions precedent (other than completion of the Due Diligence exercise, but including furnishing of necessary documents for carrying out Due Diligence and resolution of issues raised pursuant to the Due Diligence) are within the reasonable control of the Developer and any failure by it to satisfy or cause satisfaction of such Conditions Precedent within the period specified above, will constitute a material breach of this Agreement and in such case the Proposed Lessee shall be entitled to terminate this agreement”. (emphasis supplied).

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Further, your honour is requested to refer Para 3.1, 3.2 and 3.4 of the Lease Agreement which reads as under:-

"3.1. Subject to no adverse findings resulting from the Due Diligence exercise undertaken by the Proposed Lessee, the Proposed Lessee has agreed that the selling price payable to the Developer for the Scheduled Land for the entire Term under the Lease Deed shall be an amount of IKR 14400/- per Sq.Mtr (Rupees Fourteen Thousand Four Hundred Only per sq. meter) (the "Rent")". 3.2. On the date of execution of this Agreement:-

(a) The Proposed Lessee shall pay an amount of Rs. 1,00,00,000( Rs One Crore only) to the Developer (the "Earnest Money'") which shall be adjustable and deducted from the Selling price within 6 months from the date of this agreement 3.4. If this Agreement is terminated, the Developer shall, within 7 working days of receiving the written notice of termination from the Proposed Lessee, return the Earnest Money, together with interest at the rate of ( 6%) per cent per annum payable from the date on which the Advance Amount is paid by the Proposed Lessee till the repayment of the Earnest Money by the Developer"

In Para 4 of the Lease Agreement, the term of the Lease Deed has been stated to be Ninety Nine (99) years.

In Para 5.1 in Clause (O) it has been stated as under :- "(O) The Developer undertakes to procure the Co-developer's status for and on behalf of the Proposed Lessee. Official expenses to obtain co-developer status shall be borne by he Proposed Lessee".

From the perusal of the aforesaid terms and conditions of the Lease Agreement, it is crystal clear that it is not a formal Lease Deed assigning the leasehold rights of the land of the SEZ Project in favour of M/s. Abir Investments Pvt.Ltd. as it is an understanding between the appellant company and M/s. Abir Investments Pvt. Ltd. to execute formal lease deed on fulfillment of the conditions laid down in the so-called Lease Agreement wherein the obligations of both the parties have been specified. The appellant company invites your honour's attention to Para 2.1 as referred herein above The appellant company has entered into the lease agreement with M/s. Abir Investments Pvt Ltd., simplicitor on a 100 rupees stamp paper as it is not a formal Lease Deed and the same has not been registered with the Registrar. The said land of Notified SEZ Project of the appellant is still standing in the name of appellant company in the Land Revenue Records and as stated above, the so-called lease agreement is not registered with Registrar even the leasehold rights in the Said Land has not been created in favour of M/s. Abir Investments Pvt. Ltd on the Land Revenue Records of the Government and therefore, under no circumstances, it can be treated as sale of land as observed by the Ld. A.O in the assessment order. It is further submitted that Abir Investments Pvt. Ltd has also not given the enjoyment of said land of Notified SEZ Project of the appellant company and therefore, even as per provisions of Section 2(47) of the Act, the so-called lease agreement which is

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unregistered does not transfer of land /sale of land. As stipulated in Para 3.4 of the Lease Agreement referred hereinabove, the appellant company is required to refund the advance receipt (advance amount) paid by the Proposed Lessee together with interest @ 6% per annum payable from the date on which the advance amount is paid by the Proposed Lessee till the repayment of Earnest Money (Advance Receipt) by the developer in a situation the Lease Agreement get terminated.

6.2. The advance receipts from M/s. Abir Investments Pvt. Ltd., in respect of development of SEZ in pursuance of so-called lease agreement with the appellant company and M/s. Abir Investments Pvt.Ltd., could not be treated as accrued income assessable to tax during the year under consideration, since such advance receipt was charged with several obligations which the appellant was to discharge and M/s. Abir Investments Pvt. Ltd., was also required to be discharged as a proposed co-developer before execution of the final lease deed. The appellant company relies upon the decision of Hon'ble Supreme Court in the case of Calcutta Co. Ltd. Vs. CIT 37 ITR 1 and the decision of Hon'ble ITAT, Hyderabad ‘A’ Bench in the case of DCIT vs. Shapoorji Pallonji Biotech Park (P) Ltd. 138 TTJ 62 (Xerox copy of the said judgment is attached herewith as per Annexure - I) wherein it has been held that" The A.O was not justified in assessing the income in respect of sale deeds executed as it would not give rise to any income assessable to tax during the year under consideration since the said income was charged with several obligations which the assessee was to discharge before the delivery or plots to the buyers in terms of the sale deeds itself. The assessee was obliged to carry on various developmental works not only within the sold plots but also to provide the common facilities for the entire park, and then only deliver the possession of the plots sold to the parties". The Hon'ble ITAT Hyd., in the case cited supra has also followed the principles laid down by the Apex Court in the case of Calcutta Co. Ltd. Vs. CIT 37 ITR 1.

6.3. The contention of the Ld. A.O to the effect that in the books of account, the Appellant has treated the transaction of lease as a transaction of sale of land and therefore there is a violation of provisions of SEZ. Act and hence income earned out of such activity cannot quality for deduction u/s. 80IAB of the Act. The Appellant most respectfully submits that the objection raised by the Ld. A.O is without any substance both on facts as well as in law in as much as treatment given in the books of accounts is a matter of no consequence when it comes to deciding a particular character of an income under the IT. Act. The Appellant submits that a transaction of lease for the user of land in any case is outside the purview of Accounting Standard - 19 issued by the ICAI of India. The appellant further submits that it is very settled law that accounting entries made in the books of accounts of the assessee is not the decisive factor to determine whether the income is chargeable to tax or whether the expenditure is allowable or not to the assessee.

The Hon'ble Supreme Court in number of cases already held that mere book keeping entry cannot be termed as income unless income has actually resulted. The appellant company rely upon the decision of Hon'ble Supreme Court in the case of State Bank of India vs. CIT 157 ITR 67 wherein it has been held asunder:-

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"It is well settled that the way in which entries are made by the assessee in its books of account is not determinative of the question whether the assessee has earned any profit or suffered any loss. The assessee might, by making entries which were not in conformity with proper principles of accountancy, have concealed profit or showed loss and the entries made by him cannot, therefore, be regarded as conclusive one wav or the other".

Further, reliance is also placed on the decision of Hon'ble Supreme Court in the case of CIT vs. India Discount Co. Ltd. 75 ITR 191 (SC) wherein it has been held as under :-

“That the receipt being one which in law could not be regarded as income, it could not become vie merely because the respondent erroneously credited it to the profit and loss account". Reliance is also placed on the decision of Hon'ble Supreme Court in the case of CIT vs. Messrs Shoorji Vallabhdas and Co. 46 IT 144, wherein it has been held as under :-

"Income tax is a levy on income. Though the Income-tax Act takes into account two points of time at which the liability to tax is attracted, viz.. the accrual of the income or its receipt, yet the substance of the matter is the income. If income does not result at all, there cannot be a tax., even though in book-keeping, an entry is made about a "hypothetical income'" which does not materialize. Where income has in fact, been received and is subsequently given up in such circumstances that it remains the income of the recipient, even though given up the tax may be payable. Where, however, the income can be said not to have resulted at all, there is obviously neither accrual nor receipt of income, even though an entry to that effect might, m certain circumstances, have been made in the books of account"

The reliance is also placed on the decision of Hon'ble Supreme Court in the case of Sutlej Cotton Mills Ltd. Vs. CIT, West Bengal 116 ITR 1 wherein it has been held as under :-

"It is now well settled that the way in which entries are made by an assesses in his books of account is not determinative of the question whether the assessee has earned any profit or suffered any loss. The assessee may. by making entries which are not in conformity with the proper principles of accountancy, conceal profit or show loss and the entries made by him cannot, therefore, be regarded as conclusive one way or the other. What is necessary to be considered is the true nature of the transaction and whether in fact it has resulted in profit or loss to the assessee".

6.4. On the other hand, the absence of an entry in the books is also not fatal to a claim for deduction. It has been held that in a case where the mercantile system is adopted, for deduction can be made even in the absence of entries in the books. This was a case where no entries were passed in the books of account towards a disputed sales tax liability. However, the Supreme Court held that if under the law, a deduction must be allowed by the Assessing Officer, the assessee will not lose the right of claiming or will not be denied the deduction. The entitlement to a

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particular deduction or not will depend on the provision of law relating thereto and the existence or absence of entries in the books of account will not be decisive or conclusive in the matter - Kedarnath Jute Mfg. Co. Ltd. vs. CIT (1971) 82 ITR 363 (SC). The same principle will apply where no credit entry is made for any income that had accrued and has become receivable - CIT v. Chunilal V. Mehta & Sons (P) Ltd. (1971) 82 ITR 54 (SC). This is so because laws is more important than accounting entries or practice.

Therefore, the appellant submits that under the circumstances, at the most the amount received by the Appellant from M/s. Abir Investments Pvt. Ltd., can be treated as advances receipt towards conditional lease transaction wherein certain conditions are yet to be fulfilled. It is submitted that when a transaction is a conditional or contingent upon certain obligations to be fulfilled by the parties to the agreement, the agreement come into effect and can be recognized only when all the conditions are fulfilled. In the facts of the present case since regulatory approvals and formalities are pending, the lease agreement cannot be given effect to and no part of the receipt can be treated as income for the year under consideration. The whole of the receipt partake the character of income only in the year of fulfillment of the terms and conditions stipulated in the lease agreement, Admitted conditions are yet to be fulfilled and therefore the amount so received by the appellant viz. Rs. 1,00,00,000/- from Abir Investments Pvt. Ltd., has to be treated as advance only not subject to tax. 6.5. The various High Courts have ruled that the authorities under the Act are under an obligation to act in accordance with law. Tax can be collected only as provided under the Act. If any assessee, under a mistake, misconceptions or on not being properly instructed is over assessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected. In support of the same contention, the appellant company rely upon the decision of jurisdictional Hon'ble Gujarat High Court in the case of S.R. Kosti v. CIT (Guj) (2005) 276 ITR 165 and the judgment of the other High Courts The case of Yoosuf v. I.T.O. (1970) 77 ITR 237, CITv. Bharat General Reinsurance Co. Ltd. (1971), 81 ITR 303, CIT v. Archana R. Dhanwate (1982) 136 ITR 355 (Bom). If particular levy is not permitted under the Act, tax cannot be levied applying the doctrine of estoppel. (See Dy. Commissioner of Sales Tax vs. Sreeni Printers (1987) 67 SC 279. The Court in the case of Mirmala L. Mehta v. A. .Balasubramanian, C.l.T. (2004) 269 ITR 1 has held that there cannot be any estoppel against the statute. Article 265 of the Constitution of India in unmistakable terms provides that no tax shall be levied or collected except by authority of law. Acquiescence cannot take away from a party the relief that he is entitled to where the tax is levied or collected without authority of law. In the case on hand, it was obligatory on the part of the Assessing Officer to apply him mind to the facts disclosed in the return and assess the assessee keeping in mind the law holding the field. From the principle and ratio laid down in the afore stated judgments of the various High Courts, the appellant company has to submit that the

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advance receipt from Abir Investments Pvt. Ltd. in pursuance of so-called lease agreement in respect of which income was not accrued to the appellant company during the year under consideration even though the same has been considered by the appellant company in the return of income, the same cannot be subjected to tax and the appellate authorities has to find out whether a particular income was assessable or not. Merely because the assessee wrongly included the income in its return of income it cannot be conferred the income in that year as has been held in the decision of Delhi High Court in the case of Bharat General Reinsurance Co.Ltd. (1971) 81 ITR 303. In view of the aforesaid factual and legal submissions, alternatively the advance receipts from Abhir Investments Pvt. Ltd. Is required to be treated as Advance Receipt not subject to tax.

4.3.6 From the above facts it is observed that the appellant company is the approved developer of the SEZ. The specific land has been earmarked for the development of the SEZ and has been notified by the Central Govt. accordingly. As per the SEZ, rules and regulations, the notified land can not be sold to any one but can be leased out only either to the approved undertaking by the Development Commissioner or can be leased out to Co- developer of the SEZ approved by the Central Govt. The appellant company entered in to a lease agreement with M/s Abir Investment Pvt Ltd( AIPL) in the F.Y. 2007-08 , for giving certain area of notified land to AIPL subject to one major condition that M/s AIPL is granted approval of "Co developer" by the Central Govt., otherwise the agreement would stand terminated, and the appellant company has to return back the amount received from M/s AIPL with interest @ 6%. From Para 5.16 of the assessment order, it is also noticed that the major amount of the consideration of lease agreement has been shown as outstanding in the books of account of the appellant and as current liabilities in the books of account of the lessee.

4.3.7 The total consideration determined is Rs.1042358400/- and after reducing the cost of leased out land of Rs.65147400/- the appellant company entered the gain of Rs.977211000/- in its books of account and claimed the same as deduction u/s 80IAB of the Act in the Return of Income. The claim of 80IAB was disallowed by the A.O and the same has been confirmed by me in the earlier paras of the appellate order.

4.3.8 Now the question arises whether the impugned conditional lease transaction is crystallized and income has been accrued, which is liable for taxation.

It is an admitted fact that impugned lease agreement is conditional subject to approval of Central Govt. as Co developer to M/s AIPL. As per the submission of the appellant the impugned lease agreement .with M/s Abir Investment Pvt Ltd is on stamp paper of Rs. 1 DO/- and it is not a formal lease deed and the same has not been registered with the Registrar. The said land of Notified SEZ of the appellant is still standing in the name of the appellant in Land Revenue Records, and as such lease hold rights in the impugned land has not been created in favour of M/s AIPL. As per provisions of S.2 (47) of the Act, the so called lease agreement which is unregistered does not amount to lease of land/ sale of

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land. The AIPL has not been approved as Codeveloper by the Central Govt. till the time of writing this appellate order. As per letter No. F.2/494/2006-EPZ dated 26/11/2010 the Central Govt. has approved the extension to the appellant to develop the SEZ till 19.12.2011. Therefore, it is must for the survived of the lease agreement either to get the approval of Central Govt. as Co developer for AIPL before 19.12.2011 or to terminate the lease agreement and to refund the amount received from AIPL accordingly.

4.3.9 The Ld. A.R also drew my attention towards the Board Resolution passed in the Board Meeting dated 20 June, 2011, . The contains of the Board Resolution are as under :-

CERTIFIED TURE COPY OF THE EXTRACT OF MINUTES OF THE MEETING OF BOARD OF DIRECTORS OF GANESH HOUSING CORPORATION LIMITED AT THEIR MEETING HELD ON 20T H JUNE, 2011 AT THE REGISTERED OFFICE OF THE COMPANY AT GANESH CORPORATE HOUSE, 100 FT. HEBATPUR-THALTEJ ROD, NR. SOLA BRIDGE. OFF. S.G. HIGHWAY, AHMEDABAD- 380 054.

===============================================

Ref: TERMINATION OF AGREEMENTS WITH ABIR INVESTMENT PRIVATE LTD

The Managing Director of the Company informed the members of the Board that erstwhile Ganesh Infrastructure Private Limited (GtPL) has merged with our Company pursuant to the orders passed by the Hon'ble High Court of Gujarat The said GIPL had entered into three agreements dated 26/6/2007, 26/9/2007 and 8/11 /2007 with Abir Investment Private Limited (AlPL) whereby it was agreed to give on lease various pieces of land admeasuring 25437 sq. mtrs, 9000 sq. mtrs and 29237 sq. mtrs respectively situated in the notified area of Special Economic Zone on contiguous land situated at Vill : Chharodi, Dist Ahmedabad. On 21/3/2008 our company also entered into similar agreement with GtPL, for giving on lease 8712 sq. mtrs of land situated at the aforesaid place. In all aforesaid agreements, it was one of the conditions to give the land for a long term lease period 99 years. It was also further agreed between the parties to execute a definitive lease deed confirming all the legal requirements of IT SEZ Rules and Regulations. Further Managing Director also informed the board that during financial year 2007-08 the company had booked income of Rs. 97.72 crores as income from perpetual lease of land situated in SEZ. In the return of income this income was claimed as exempt u/s 80IAB. In the scrutiny assessment the claim of exemption was denied by the DCIT. Thereafter, the matter was referred for appeal before CIT-Appeals. During the course of hearing, various opinions from tax consultants and advisors were obtained OH the subject matter, it was opined that in the absence of any crystallization of accrual of income, the amount received for perpetual lease is to be considered as advance and to be accounted as current liability. The income could not be booked for the reason that the terms and conditions of co-developer under the provisions of the SEZ Scheme as laid down in the agreements between the company and Abir Investment Pvt Ltd., are not fulfilled as on the date relevant to F.Y. 2007-08. It was also opined that the income can be

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booked as income from the development of SEZ and within the meaning of provisions contained u/s 80IAB of the Act, 1961.

With the above referred background the matter was discussed at length and it was decided to reverse the income of Rs. 97.72 crores as income from perpetual lease of land situated in SEZ by cancelling the agreements entered with Abir Investment Pvt ltd. This reversal of income and accounting the same as advance for the perpetual lease is to be made by the company before the end of F.Y. 2011-12.

The members of the Board held detailed discussion involving various facts of the proposal. After the prolonged discussions, the members of the Board passed the following resolutions Unanimously.

RESOLVED THAT four agreements for proposed lease entered into with ABIR Investment Private Limited (AIPL) on 26-06-2007, 26-09-2007, 08- 11-2007 and 21-03-2008 for leasing various pieces of land situated in the notified area of Special Economic Zone for Information Technology (IT SEZ) Vill: Chharodi and Vill: Tragad, Dist: Ahmedabad be terminated in view of the failure on the part of AIPL to fulfill certain conditions of agreements.

FURTHER RESOLVED THAT it is hereby decided that in the absence of any crystallization of accrual of income, the amount received from ABIR Investment Private (AIPL) be treated as Current Liability. FURTHER RESOLVED THAT the lease income of Rs. 97.72 Crores be reversed before the end of Financial Year 2011-2012.

FURTHER RESOLVED THAT Mr. Kipakkumar G. Patel, Chairman and Mr. Shekhar G. Patel, Managing Director of the Company be and ate hereby jointly/severally authorized to do all acts, deeds, matters and things incidental or ancillary thereto.

FURTHER RESOLVED THAT a copy of the aforesaid resolution be furnished to any authority for their respective perusal."

From the Board Resolution it is absolutely clear that the impugned tease agreement would stand terminated and necessary entry would be passed in the books of account of the appellant company in F.Y. 2011-12 itself, accordingly.

The above Board Resolution suggests that the impugned lease agreement is conditional and has not reached to the finality and therefore Board decided to terminate the lease agreement accordingly.

4.3.10 The advance receipts from M/s. Abir Investments Pvt. Ltd. in pursuance of so-called lease agreement with the appellant company and M/s. Abir Investments Pvt. Ltd., could not be treated as accrued income assessable to tax during the year under consideration, since such advance receipt was charged with several obligations which the appellant was to discharge and M/s. Abir Investments Pvt. Ltd.. was also required to be discharged as a proposed co-developer before execution of the final lease deed. The appellant company relied upon the decision of Hon'ble Supreme Court in the case of Calcutta Co. Ltd. Vs. CIT 37 ITR 1 and the decision

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of Hon'ble ITAT, Hyderabad 'A' Bench in the case of DCIT vs. Shapoorji Pallonji Biotech Park (P) Ltd. 138 TTO'62, wherein it has been held that " The A.O was not justified in assessing the income in respect of sale deeds executed as it would not give rise to any income assessable to tax during the year under consideration since the said income was charged with several obligations which the assessee was to discharge before the delivery of plots to the buyers in terms of the sale deeds itself. The assessee was obliged to carry on various developmental works not only within the sold plots but also to provide the common facilities for the entire park, and then only deliver the possession of the plots sold to the parties”. The Hon'ble ITAT Hyd., in the case cited supra has also followed the principles laid down by the Apex Cu7ourt in the case of Calcutta Co. Ltd. Vs. C1T 37 1TR 1.

4.11 Now the next question arises whether simply for the reason that the appellant company has booked the gain in prematurity in its books of account, whether the income can be taxed. It is a settled legal position that such income cannot be taxed, as held by Hon'ble Supreme Court in the case of CIT Vs. Shoorji Vallabhdas and held as under:-

"Income tax is a levy on income. Though the Income-tax Act takes into account two points of time at which the liability to tax is attracted, viz.. the accrual of the income or its receipt, yet the substance of the matter is the income. It income does not result at all, there cannot be a tax, even though in book-keeping, an entry is made about a "hypothetical income" which does not materialize. Where income has, in fact, been received and is subsequently given up in such circumstances that-it remains the income of the recipient, even though given up, the tax may be payable. Where, however, the income can be said not to have resulted at all, there is obviously neither accrual nor receipt of income, even though an entry to that effect might, in certain circumstances, have been made in the books of account'1.

4.3.12 However, for taking care of such book profit the provisions u/s 115JB are there under I.T Act, 1961. All such incomes whether" accrued "or" not accrued" but booked in the books of account are liable for tax u/s 115JB of the Act and accordingly I held that the appellant company is also liable to tax on such book profit u/s 115JB of the Act.

4.3.13. It is an undisputed fact that the appellant company has during the year given the land on lease for a period of 99 years to Abir Investment Pvt. Ltd. and not sold the land. Further, the conditions about obtaining various statutory permissions have not been fulfilled. The profit on so- called "sales transactions" is prematurely booked in the books of account which is away from the actual facts of the case. The receipts made by appellant company from Abir Investment Pvt. Ltd. partakes the nature of advance receipts towards conditional lease transactions rather than to be considered in the nature of revenue receipts, because most of the conditions of developer and co-developer are yet to be fulfilled. The receipts by appellant company have not at the juncture of accounting in the books of account, has crystallized in the nature of receipt or accrual of income. The books of account of the company are maintained on mercantile basis and the same are mandatory as envisaged u/s 210 of Companies Act, 1955. Even the Tax Audit Report and notes forming part of account as stated in the Balance Sheet clearly states that the books of

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account by the appellant company are maintained by following mercantile system of accounting. A premature entry of booking the profit in the books of account cannot be a basis of being treated as "income accrued or receipt" and therefore, consequently also it cannot be a valid basis for claiming deduction u/s 80IAB. The reliance of the appellant on various judicial pronouncements by various courts including that of Appex Court as referred supra , fully supports the alternative contention of the appellant. In view of the above referred clear cut facts, discussions and finding, I direct the AO to treat this amount as advance receipt being contingent in nature on account of non-fuifillment of prescribed conditions of the lease agreement visa vis rules and regulation of SEZ and accordingly the same cannot be eligible for deduction u/s 80IAB, also.”

6.5 The CIT(A) in conclusion held that the AO was fully justified in rejecting the claim of the assessee under s.80IAB of the Act and consequently confirmed the action of the AO toward such disallowance of claim. The CIT(A) however accepted the alternative plea took by the assessee before it and directed the AO to treat the revenue declared from SEZ project as mere advance receipt not susceptible to taxation in the year under consideration on account of non-fulfillment of the major conditions of the lease agreement qua SEZ regulations. The CIT(A) consequently held that notwithstanding revenue income declared by the assessee in its books of accounts such income had not really accrued and crystalized during the year in the light of facts and the judicial precedents available in this regard. The taxable income of the assessee was thus reduced to the extent of revenue income arising from SEZ project as claimed by the assessee before it. The CIT(A) also directed the AO to re-compute the book profit under s.115JB of the Act in consequence of the above directions.

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does not warrant any exception as claimed. It was thus contended that no reasons exist to deviate from the declared intentions (as revenue income) of the assessee in this regard. The learned CITDR accordingly submitted that the sale consideration (subject to deduction of cost of land and expenses) requires to be taxed as ordinary profits of the assessee during the year as claimed in its annual accounts after rightful denial of deduction under s.80IAB of the Act wrongly claimed by the assessee. As regards re-computation of book profit under s.115JB of the Act, the learned CITDR observed that the assessee itself has considered the advance receipt as part of statement of profit and loss and therefore no adjustments to book profit on account of the advance receipt is plausible as claimed in the cross appeal of the assessee on the issue. The CITDR accordingly relied upon the order of AO.

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co-developer AIPL for the development of SEZ project of the assessee company pending approval of the AIPL as co-developer by the Government of India as per the SEZ policy.

10.1 The learned AR submitted that the AO wrongly treated the proposed lease deed agreement (on a 100 rupees stamp paper) entered into between the assessee company and proposed co-developer AIPL as sale of vacant land to AIPL which was only in the nature of proposed lease. The Memorandum of Understanding (MOU) in this regard sought to lay down broad terms and conditions of the obligations and rights of the assessee company as also of proposed co- developer AIPL for approval of lessee (AIPL) as a co-developer of the SEZ project of the assessee company. It was understood between the assessee (lessor) and AIPL (lessee) that if the approval of AIPL is not obtained from the Government of India as a ‘co-developer’ for the SEZ project, assessee company always remained under sacrosanct and binding obligation to refund the amount of advance received from AIPL. It was thus contended that the so called lease agreement (MOU) was squarely contingent upon the event namely approval of leasee as ‘co-developer’ and in the absence of sanction from GOI, the contract was to be repudiated.

10.2 The learned AR for the assessee therefore adverted to the provisions of Section 80IAB of the Act in justification of eligibility of its claim and contended that the assessee requires to be a developer engaged in the business of developing SEZ and the deduction as per sub-section (2) of s.80IAB of the Act is eligible at the option of the assessee beginning from the year in which SEZ has been notified by the Central Government. Delineating further, the learned AR canvassed that the gross total income of the assessee developer should include profit and gains derived from any business of developing SEZ

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and such SEZ should have been notified on or after first April, 2005 under SEZ Act, 2005. The learned AR thus strongly harped that beginning from the year in which the SEZ project is notified, the assessee is entitled to deduction under s.80IAB of the Act computing its income for ten consecutive assessment years. In this context, the learned AR submitted that the assessee has obtained formal approval for 10.38 hectares from the Government of India on 20th December, 2006 and formal approval for another 21.11 hectares was received on 22.06.2007 from the Government of India for developing IT/ITES SEZ. The learned AR thus submitted that land in MOU was duly notified as SEZ by the Government of India which is one of the required conditions under s.80IAB of the Act. Adverting to the second limb of contention, the learned AR pointed out that requirement envisaged is that profit and gain should be derived by an undertaking from any business of developing SEZ in terms of Section 80IAB of the Act. In this context, the learned AR submitted that it is not the requirement of the provision that to enable claim of deduction under s.80IAB of the Act, the SEZ should be developed full-fledged and to become functional at its fullest capacity. The assessee would be entitled to avail benefit of Section 80IAB of the Act even while development of SEZ is in progress where the assessee is able to demonstrate the business connection of the income earned in the process of developing SEZ. The leaned AR contended that intention to grant deduction to an undertaking which develops the SEZ is paramount and therefore any income arising in the course of development of SEZ is entitled to weight and is eligible for deduction.

10.3 The learned AR further marshaled a plea with reference to Section 80IAB of the Act that it provides for ‘any profits and gains derived by an undertaking from any business of developing SEZ’ in contrast to expression ‘derived from industrial undertaking’ which has

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been used by the statute in other provision granting deduction such as 80I etc.

10.4 The learned AR submitted that a narrower or restricted meaning cannot be given to any profit and gains attributable to developing a SEZ. The learned AR submitted that the stage of developing the SEZ had begun with the notification of land in question as SEZ by Government of India (GOI). The learned AR thus submitted that in view of 80IAB(2) of the Act, the assessee is fully entitled for deduction once SEZ has been notified and beginning of operation in SEZ has been per se is not required. The learned AR thus contended that sale of vacant land notified as SEZ is thus profit and gains arising from developing SEZ as contemplated under s.80IAB of the Act. The learned AR thus submitted that both lower authorities were not justified in denying the deduction rightfully claimed by the assessee.

10.5 The learned AR further found fault with one of the objection raised on behalf of the Revenue that the land leased out to AIPL was not approved by the Development Commissioner and therefore, the assessee was not entitled to deduction on sale of such land. In this context, the learned AR submitted that the assessee has not sold the land as wrongly inferred on behalf of the Revenue. The notified land has only been proposed to be leased out to AIPL vide MOU/agreement dated 26th June, 2007. The learned AR contended that as per SEZ Act, 2005 and Rules thereunder, it was permissible for the assessee to lease out the undivided land to the proposed co-developer who intend to create infrastructure facilities in the zone without prior approval of Development Commissioner. The application was made to the Central Government for addition of AIPL as a co-developer of SEZ project. The learned AR thus submitted that in the light of subsection (2) of Section 80IAB of the Act, the assessee is sufficiently entitled for

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claim of deduction on profit and gains as soon as the SEZ is notified even while the development process has not completed. The learned AR canvassed that the important difference between the language employed under s.80IAB of the Act and other deduction provisions requires to be noted in the light of Section 80IAB(2) of the Act in terms of which the assessee is entitled to claim deduction for specified number of years beginning from year in which an SEZ has been ‘notified’ by the Central Government. Thus, where the assessee in the instant case has demonstrated that land in question has been notified for the purposes of SEZ, the assessee fulfills its entitlement to deduction under s.80IAB of the Act notwithstanding continuation of other processes for development of SEZ, there was no justification to deny the deduction so claimed.

10.6 With reference to non-compliance of SEZ Rules alleged on behalf of Revenue, the learned AR contended that the AO has wrongly interpreted and compared the action of proposed leasing out the land as a sale of the land. It was contended that the assessee has not sold the land but has only proposed to lease out the notified land to AIPL subject to conditions MOU/agreement dated 26th June, 2007. The learned AR referred to the SEZ Act and Rules and submitted that it is true that it is not permissible to sale a part of notified land to AIPL and it is only permissible to sale the land to the undertaking approved by the Development Commissioner. The assessee submitted that it is however very well permissible within the four corners of SEZ Act to lease out notified land to a proposed co-developer who intends to create infrastructure facilities. It was submitted that as per Rule 10(8) of the SEZ Rules, 2006, the assessee developer was entitled to allot the land in processing area on lease basis to a person desiring to create infrastructure facilities for use by prospective unit which is what has been done by the assessee. The learned AR thus submitted that while

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an entrepreneur wanting to set up a unit in SEZ then as per the SEZ Rules 10(6)/(7), permissions of Development Commissioner would have been required but however, the lessee AIPL is only a proposed co-developer and not a prospective undertaking. No conditions of SEZ Act and Rules thereunder is thus violated. In the circumstances, the gains arising from the leasing out of land in notified SEZ is without any breach of Rules and thus is eligible for deduction under s.80IAB of the Act without any fetters. The learned AR also pointed out that a bond-cum-legal undertaking required to be executed with the Development Commissioner is only procedural in nature. Such bonds had been duly executed on 28.11.2008. It was further submitted that Section 80IAB of the Act does not require the compulsory execution of all formalities for the purposes of carrying on the development work. The learned AR reiterated that benefit of Section 80IAB would commence at the option of the assessee immediately from the beginning of the year in which SEZ has been notified and thus, no strings are attached for claim of deduction. In essence, the learned AR submitted that it is not the requirement of the scheme of the Act that development work should be completed but on the contrary, the benefit of Section 80IAB is dependent upon notification of SEZ alone.

10.7 The learned AR thereafter adverted to another observation of the AO to the effect that in the books of accounts, the assessee has treated the transaction of lease as a transaction of sale of land which sale is without permission of Development Officer SEZ is a violation of provision of SEZ Act and hence, income earned out of such activity cannot be qualified for deduction under s.80IAB of the Act. In rebuttal of the aforesaid objection of the AO, the assessee pointed out that it is well settled law that treatment given in the books of accounts is not decisive for determining a particular character of income. The

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transaction was intended for lease of land in substance with a view to induct the lessee as co-developer subject to necessary approvals from competent authority. It was further observed that a transaction of lease for the user of land is outside the purview of AS-19 issued by Accounting body ICAI. The learned AR thus contended that no fault could be found with the primary claim of deduction under Section 80IAB advanced by the assessee.

11.1 Nudging the alternative but a significant contention, the learned AR for the assessee marshaled that the advance received from AIPL in pursuance of lease agreement is merely an advance receipt at this stage and not susceptible to tax. Such advance cannot be regarded as accrued income or any earned income till the time, substantive conditions MOU are fulfilled. It was once again reiterated that the said part of SEZ land to be given to AIPL on lease as co-developer was subject to an approval of the GOI. It was underscored that the lease deed with AIPL was conditional and existential upon fulfillment of substantive conditions. The lease deed could be effected on fulfillment of obligations which is essentially dependent upon the approval of the proposed co-developer AIPL by the competent

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authority of the GOI. It was further pointed out that the proposed lessee was to pay advance to the assessee as agreed upon but it was simultaneously also agreed that the assessee developer shall return the earnest money so received with interest if the agreement is terminated owing to non-fulfillment of obligations and where the approval of AIPL is not granted as co-developer by the competent authority under SEZ Act, 2005. It was an obligation of the assessee to procure the approval of the co-developer for and on behalf of the proposed lessee. It was thus contended that on a holistic reading of terms and conditions of the lease agreement, it would be crystal clear that it is not formal lease deed whereby the leasehold rights of the part of the land of SEZ project stood assigned in favour of AIPL and the execution of formal lease deed was to follow on fulfillment of the substantive conditions laid down in the so called lease agreement wherein the obligation of both parties have been specified.

11.2 It was also pointed out that the impugned lease deed relied upon by the AO for the purposes of chargeability of income are not registered and the terms have been simply put on 100 rupees stamp paper. The said land of the notified SEZ project of the assessee continues to stand in the name of the assessee in the land revenue records. As pointed out to the revenue authorities in the assessment and appellate proceedings, the leasehold rights in the said land has not been created in the name of AIPL on the land revenue records of the Government nor has the full payment been received as agreed upon and therefore, under no circumstances, it could be treated as sale of land as labeled by the AO. It was also pointed out that the possession or enjoyment of the said land has not been parted to AIPL either and therefore, in terms of Section 2(47) of the Act, the so called unregistered lease agreement cannot cause any transfer/sale of the land for the purposes of chargeability under the Income Tax Act.

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11.3 It is thus contended that when the transaction of lease itself is conditional and contingent upon stark obligations to be fulfilled for agreement to come into effect, the income therefrom could be recognized in law only when the conditions of the agreement are fulfilled. It was submitted that where in the facts of the present case, the regulatory approvals and formalities were admittedly pending, the proposed lease agreement could not be given effect to and no part of the receipt could be treated as certain or real income of the assessee for the year under consideration. The whole of receipts arising from such agreement would partake the character of ‘income’ only in the year of fulfillment of terms and conditions as stipulated in the lease agreement. It was thus submitted that refundable advance of Rs.1,04,23,58,400/- recognized by the assessee as sale revenue and consequent gain of Rs.97,72,11,000/- from SEZ project is intrinsically an unaccrued income with a corresponding liability for return of the same and thus could not be taxed in the year under consideration.

11.4 The learned AR thereafter submitted a tabulated statement of amount received over a period of time beginning from 03.10.2007 to 25.02.2011 aggregating to Rs.148 Crore from AIPL. The learned AR submitted that only a fractional amount of Rs.1Crore was received by the assessee with reference to the aforesaid proposed lease during the AY 2008-09 in question. The learned AR submitted on facts that while the Revenue from the proposed lease was recognized as income from SEZ project, the assessee has also recognized corresponding receivable from AIPL to the tune of Rs.103.23Crores during the year.

11.5 The learned AR thereafter referred to another tabulated statement of re-payment of advance to AIPL in FY 2014-15 to the tune of Rs.147 Crores in aggregate as called for by the Tribunal in the course of hearing. Placing reliance on the subsequent happenings of

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the money received and eventually returned, the learned AR justified its case that the amount received was merely on advance which was ultimately refunded to AIPL owing to no headway in the approval of the proposed lease and consequent induction of AIPL as co-developer in the SEZ project.

11.6 The learned AR thereafter referred to the decision of Hon’ble Gujarat High Court in the case of CIT vs. Shivalik Buildwell (P.) Ltd. [2013] 40 taxmann.com 219 (Guj) & Paras Buildtech India (P.) Ltd. Vs. CIT [2016] 382 ITR 630 (Delhi) for the proposition that receipt of advance or booking amount per se could not be treated as trading receipt of the year under consideration where the project never took place and part of advance was returned in the ensuing financial year. It was thus submitted that the amount of advance without its becoming legally due to assessee could not be taxed as accrued income in the hands of the assessee in view of express judicial fiat enunciating the position of law.

11.7 The learned AR for the assessee thus essentially submitted that the MOU executed for proposed lease is contingent on a substantial condition i.e. approval from the GOI for inclusion of the proposed lease as a co-developer for the part of the land of the proposed SEZ project as per SEZ Act, 2005, the assessee is under obligation to return the advance money together with interest in case the substantive condition alongwith other crucial conditions are not made and the MOU do not culminate into formal lease agreement. The learned AR thus emphatically claimed that receipt of amount by way of advance in respect of development of SEZ in pursuance of so called lease agreement cannot be treated as ‘accrued income’ in these facts and thus cannot be assessed to tax for the year under consideration as explained above notwithstanding book entries made in disregard of

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real income theory. As pointed out, mere entry in the books of accounts cannot be relied upon to determine whether income has, in fact, resulted or materialized in favour of the assessee when viewed in the background of commercial and business realities. The unrealistic and illusory income recognized by the assessee is contrary to the well established concept of real income and thus cannot brought to tax as right to receive money stipulated in the lease agreement did not accrue in favour of the assessee. It was pointed out with reference to the decision of the Hon’ble Supreme Court in CIT vs. Shoorji Vallabhdas & Co. [1962] 46 ITR 144 (SC) & Kedarnath Jute Mfg. Co. Ltd. [1971] 82 ITR 363 (SC) that acknowledgement of income in the books of accounts are not conclusive and what is to be taxed is only the real income.

11.8 Summarizing the factual position, the learned AR for the assessee thus submitted that in the advance received from AIPL in pursuance of MOU is merely an advance receipt and is not accrued in the hands of the assessee as an earned income for the reason that the approval of the said company as co-developer could not be received from GOI. With reference to the MOU/lease agreement, the learned AR for the assessee sought to point out that the said land of the notified SEZ project of the assessee is still standing in the name of the assessee in the land revenue records for which supporting evidences were placed before the lower authorities. The so called lease agreement is not registered and the leasehold rights in the said land has not been created in the name of AIPL on the land revenue records and therefore the transaction cannot be treated as sale of land as mis- appreciated by the AO in the assessment order. It was also sought to explain that the enjoyment of the said land of the notified SEZ was also not given to AIPL and therefore, no transfer/sale of land can be envisaged as per the provisions of the Act. In essence, the learned AR

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attempted to claim that advance received by the assessee which is contingent and conditional upon fulfillment of obligations associated to the agreement cannot be taxed as income notwithstanding its incorrect recognition as income in the books. The learned AR adverted to factual aspects to say that the assessee has merely received Rs.1 Crore during the year only whereas the sale consideration was recognized at staggering amount of Rs.1,04,23,58,400/-. As a corollary, the assessee has shown outstanding receivable of Rs.1,03,23,58,400/-. The net income from SEZ project was recognized at Rs.97,72,11,000/- without the actual receipt of amount and without fulfillment of obligations and conditions of substantial lease has neither accrued nor received by the assessee and therefore cannot be taxed as income. Besides, as contended, the advance received over years in pursuance of the MOU was ultimately returned owing to non-fulfillment of substantive conditions associated to the MOU which further fortifies its claim of receipt being contingent in nature.

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12.1 The assessee in the instant case as entered into an MOU/lease agreement with a lessee AIPL in FY 2007-08 for leasing out certain area of notified land to AIPL subject to one of the major conditions that AIPL would be granted approval as co-developer by the Central Government. It was understood that in the event of not getting the approval from the GOI for any reason, the agreement would stand terminated and the assessee company shall return the advance amount received from AIPL alongwith interest @ 6% p.a. The assessee has received only a token amount of Rs.1 Crore during the year against the total consideration determined at Rs.1,04,23,58,400/- and thus the majority of the amount remains outstanding in the books of account of the assessee as a debt receivable from lessee and similar outstanding has been recorded as current liabilities in the corresponding books of accounts of lessee AIPL payable to assessee.

12.2 The assessee has proceeded to declare income from SEZ project to the tune of Rs.97,72,11,000/- after reducing the cost of land in lease amounting to Rs.6,51,47,400/- from the said consideration determined based on such tentative and conditional lease agreement noted above. The assessee has claimed deduction under s.80IAB of the Act of the aforesaid amount of Rs.97.72 Crores on the premise that the deduction of profits arising from business of developing SEZ is available to the assessee beginning from the year in which SEZ has been notified by the Central Government. It is the case of the assessee that the assessee has fulfilled the aforesaid condition stipulated in sub-section2 of Section 80IAB of the Act and it is not necessary that profit should arise only after the SEZ development is fully completed. It is the case of the assessee that the profit and gain should arise from business of developing SEZ which is notified by the Central Government and it is therefore contended on behalf of the assessee that assessee can claim deduction from the year of its

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beginning of operation and the assessee is entitled to deduction at its option from the first year of notifying of SEZ. The assessee has extensibly relied upon the provisions of the SEZ Act and contended that approval of the Development Commissioner of SEZ need not be taken where the land is simply proposed to be leased out but not sold. It is also contended that the consideration received/receivable on fulfillment of condition of lease agreement is inextricably related to the carrying on of the business of development of SEZ for the purposes of claim of deduction under s.80IAB of the Act and falls within the expression ‘any profits and gains derived by the assessee from any business of developing SEZ’. The assessee accordingly has justified its action of claim of deduction under s.80IAB of the Act. The AO however has declined to grant the claim of deduction under s.80IAB of the Act. The CIT(A) also did not find merit in the claim of deduction.

12.3 The Revenue however is aggrieved by the endorsement of alternative contention of the assessee raised before the CIT(A) that the consideration agreed between the assessee and proposed lessee (AIPL) for intended lease of a portion of land by assessee in notified SEZ is not an accrued income at all and therefore, not liable to be taxed. In support of alternative ground, it is the case of the assessee that no income can be said to have accrued from a tentative agreement of ephemeral nature in the shape of MOU. It is essentially the case of the assessee that income would arise and become absolute and conceivable and absolute only on fulfillment of major and substantive conditions associated to the aforesaid agreement including approval of the proposed lessee as co-developer from the Central Government which did not sail through. It is essentially the case of the assessee that the agreement was executed for set purposes and could be put into motion only on fulfillment of the aforesaid condition and therefore,

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the income to be deduced from lease transaction was highly contingent and neither accrued nor crystalized during the year. It is also the case of the assessee that although the consideration agreed with the assessee has been wrongly recognized in the books of accounts as income from SEZ project, it has never actually accrued in the hands of the assessee at all on mere receipt of an insignificant advance in the context and without fulfillment of key obligations associated with agreement. On these broad facts and having regard to the tenets of MOU, we find that CIT(A) has concluded that the MOU/lease agreement cannot be given effect to and no part of receipt can be treated as income of the assessee. The overriding conditions were not found to be fulfilled and therefore, the CIT(A) found significant merits in the alternative contention of the assessee for its non- taxability on the ground that mere book keeping entry in a particular manner cannot make assessee liable to pay tax in the absence of wake of demonstrable facts towards actual accrual of the income. The CIT(A) has referred to several judicial pronouncements to buttress its view. The deliberations made by the CIT(A) is already reproduced in the earlier para of this order for the sake of convenience.

12.4 To begin with, it would be expedient to take a look at the first principles for taxability of income on the grounds of its accrual and doctrine of real income theory. It is well settled that income tax cannot be levied on hypothetical income unless the statute provides otherwise and only real income actually accrued to an assessee is chargeable to tax in ordinary course. The income accrues when it becomes due and must also be accompanied by a corresponding liability of the other party to pay the amount and only then it can be said for the purposes of taxability that the income is not hypothetical and it has really accrued to the assessee. Useful reference in this regard can be made to the decision of the Supreme Court in Morvi

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Industries Ltd. vs. CIT(Central) [1971] 82 ITR 835 (SC). As observed by the Hon’ble Supreme Court in Shoorji Vallabhdas (supra), if the income does not result at all, there cannot be a tax even though in book keeping, an entry was made about a hypothetical income which did not materialize. Similar proposition has been recognized in Godhra Electricity Co. Ltd. vs. CIT [1997] 225 ITR 746 (SC), wherein it was observed that the assessee is obliged to pay tax only when the profit became actually due and that income could not be said to have accrued when it is based on a mere claim not backed by any legal or contractual right to receive the amount at a subsequent date. The real accrual of income and not hypothetical accrual of income is required to be taken into consideration as held by the Hon’ble Supreme Court in CIT vs. Birla Gwalior (P) Ltd. (1973) 89 ITR 266 (SC). The Hon’ble Supreme Court in State Bank of Travencore vs. CIT 158 ITR 102 has observed that one has to look at thing from practical point of view. What has really accrued to the assessee has to be found out and what has accrued must be considered from the point of view of real income taking cognizance of the probability or improbability of realization in a realistic manner. In essence, income tax cannot be levied on hypothetical income. The income accrues when it becomes due and a corresponding liability arises to the other party in law to pay the amount. Only in such a situation, can it be said that for the purposes of taxability the income is not hypothetical and it has really accrued to the assessee.

12.5 The Hon’ble Calcutta High Court in Modern Malleables Ltd. vs. CIT (2011) 11 taxmann.com 131 (Cal.) once again reiterated the settled principle of law that if a particular income is not taxable under the Act, it cannot be taxed on the basis of estoppel or in other equitable doctrine. The Hon’ble High Court further observed that merely because an assessee has made wrong or even fictitious entry in

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account, such act cannot be a ground for accepting such wrong or fictitious entry. The Hon’ble High Court observed that since nature of original entry in the accounts, on the face of it, was not in conformity with law of accountancy, it was duty of Revenue to call for explanation from assessee and to come to a definite conclusion as regards real nature of transaction. The assessing authority cannot enforce apparent wrong entry against the assessee simply because by such alleged wrong entry, assessee had shown higher amount of income. It is thus open to the assessee who made a book entry to show that it is incorrect.

12.6 Hon’ble Bombay High Court in Nirmala L. Mehta vs. Ac. Balasubramaniam (2004) 269 ITR 1 (Bom.) held that there cannot be any estoppel against the statute. Article 265 of the Constitution of India in unmistakable terms provides that no tax shall be levied or collected except by authority of law. Acquiescence cannot take away from a party the relief that he is entitled to where the tax is levied or collected without authority of law.

12.7 When the first principles noted above are applied, we straight away concur with the conclusion drawn by the CIT(A) for non- taxability of consideration from the impugned lease agreement in the absence of accrual thereof and in the absence of any liability of the lessee to pay the same to the assessee as successfully demonstrated on behalf of the assessee. An income from the MOU/lease agreement cannot be said to have accrued or arisen or become legally due to assessee till the time the underlying integral conditions of MOU are fulfilled. We also take note of the crucial fact that the advance received from the lessee was ultimately returned to them owing to continued non-fulfillment of terms and the conditions of the proposed lease. This subsequent conduct of overwhelming significance also

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vindicates the contingent nature in the possibility of accrual of income. Contextually, it may be noted here that Section 209 of the Companies Act was amended w.e.f. 15.06.1988 making it obligatory for all limited companies to maintain their accounts on accrual method of accounting. Likewise, Section 145 of the Act also recognizes only accrual or cash method of accounting. Therefore, the corporate body is required to maintain its account on accrual method. As per the accrual basis of accounting, the income should belong to the period in which it accrues. Therefore, the facts and circumstances of the case clearly justified the alternative case of the assessee that the assessee was merely a custodian of the advances received till the key features of MOU are met and consequently income from lease agreement had never factually accrued or arose in the hands of the assessee. Needless to say, determination of the income of an assessee is not a mechanical task. The surrounding facts and circumstances cannot be brushed aside while entrusted with this task. Book entries may, at times, are only subservient to actual facts. We thus do not see any infirmity in the action of the CIT(A) for non-chargeability of the fictional and unaccrued income in the hands of the assessee. The case sought to be propounded on behalf of the Revenue for taxability of income from proposed lease merely based on book entries de hors its accrual in favour of assessee is not sustainable in law when tested on the touchstone of realistic parameters and well established judicial principles. We thus decline to interfere with the action of the CIT(A).

12.8 Ground No.1 of the Revenue’s appeal is accordingly dismissed.

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13.1 The AO in the course of the scrutiny assessment observed that the assessee is not entitled to deduction under s.80IB(10) of the Act for the following reasons:

“(1) The assessee is not the owner of the lands on which projects have been erected. The same is established from the fact that the assessee company had to enter into development agreement for construction of the hosing projects. Had the assessee enjoyed unobstructed rights in land, the same would not have been necessary. (2) The layout plans of the project has been approved by the local authority in the name of the owners of the lands. (3) As discussed in great detail in para 6.6 to 6.8 above, the assessee company cannot be termed as both developer and the builder of the projects and no development is possible without land. If the assessee fits into both the roles, then the role of the owner of the land would not come in picture. But it is seen above that the local authority has approved the plans in the name of the owners of land and the final approval ( BU certificate) will also be issued in the name of the same person. (4) Without prejudice to above points, it is also seen that the built up area of the residential units is also beyond the prescribed limit of 1500 Sq. Feet. (5) Without prejudice to above reasons, it has been seen in the discussion regarding individual projects that alongwith built up area the assessee company has also sold open land with the independent residential units. The profit derived from the sale of the same would not qualify for the deduction u/s. 80IB(10).

The AO thus claimed that the assessee has not fulfilled the conditions stipulated for claiming deduction under s.80IB(10) of the Act and consequently disallowed the deduction claimed amounting to Rs.17,55,66,503/-.

13.2 Aggrieved by the denial of relief by the AO, the assessee preferred the appeal before the CIT(A). In the first appeal, the CIT(A) on appraisal of facts and law enunciated in this regard, found merit in the claim of assessee and thus adjudicated the issue in favour of the assessee in following terms:

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“5.3.4 I have carefully considered the submission of the Ld. Counsel as well as the finding of the Assessing Officer recorded in the assessment order on this issue. I have also considered the main clauses of the development agreements, various approvals granted by the Municipal Corporation for the relevant projects. The appellant during the course of assessment proceedings had furnished all the details relating to all the projects and specifically clarified that the appellant is fulfilling all the conditions prescribed us/ 8018(10) of the Act. It was also submitted that "the dominion over the ownership of land is passed on to the assessee company with all the risk and liabilities and all the profits or loss in relation to the land is vested in the assessee and therefore, in terms of the decision of the Jurisdictional Tribunal in the case of M/s. Radhe Developers in IT A No. 2482/Ahd./2006 for 2003-04 {now reported at 113 TTJ (Ahd) 300}, it is sufficiently established that in the case of the appellant on acquiring dominion over the property, the assessee has developed and constructed the housing projects at its own cost and risks and therefore, the assessee is deemed to be the owner of the property on which the project is done." 5.3.5. The relevant finding of the aforesaid decision of M/s. Radhe Developers & Ors. Vs. I.T.O. & Ors. (supra) is reproduced hereunder for the same of convenience:

"A bare reading of the provisions of S. 80-IB(10) as they stood in the years under consideration, shows that the requirements for claiming deduction for housing projects are that (i) there must be an undertaking for developing and building housing project; (ii) such housing project is approved by the local authority' (iii) the development and construction of housing project has commenced on or after 1 day of October, 1998; (iv) the housing project is on -a size of plot of land which has a minimum area of one acre; and (v) the residential unit developed and built has a built up area of 1,000 sq.ft. if it is situated in Delhi and Mumbai or within 25 kms. of Municipal limit of these cities and 1 ,500 sq.ft. at any other places. There is no other condition, which is to be complied by an assessee for claiming the deduction on profits of the housing project. The contention of the Revenue authorities that to claim deduction u/s 8016(10), there is condition precedent that the assessee must be owner of the land on which housing project is constructed has no force. There is no such condition as appearing in the provisions of the section. It might be true that the land belongs to the person who has entered into an agreement with the assessee to develop and build housing project but on a perusal of the agreement it is evident that the development and building work has been carried out by the assessee in pursuance to tripartite agreement and it is not by the landowners. Therefore, the mere fact that the landowner and the undertaking developing and building housing project, are two different entities would not make any difference. The deduction would be eligible to the person who is developing and building housing project and not to the mere owner thereof. Having entered into agreements with landowners for development and building the housing project, assessee was obviously a contractor but it does not derogate the assessee for being a developer, as well. The term 'contractor1 is not essentially contradictory to the term 'developer'. The assessee is a 'developer' and not a 'contractor' as held by the

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lower authorities. The developer is not working on remuneration for the landowners, but developer is working for himself in order to exploit the potential of its business in his own interest and, therefore, opted for all business risks associated with the business of development of real estate including developing and building of housing project,"

5.3.6 The above principle laid down in the case of Radhe Developers (supra) was also endorsed by the Hon'ble Ahmedabad Tribunal in the unreported case of ITO & Ors. Vs. Shakti Corporation & Ors, vide order dated 07-11 -2008 in ITA NO. 1503/A/2008. The relevant finding of the aforesaid decision of Shati Corporation & Ors. (supra) is reproduced hereunder for the sake of convenience:

"The facts involved in the case of the assessee are similar to the facts in the -case of Radhe Developers (supra) and accordingly, we are of the view that the assessee has acquired the dominance over the land and has developed the housing project by incurring all expenses and taking all the risks involved therein. We may mention here that, in our opinion, the decision in the case of Radhe Developers (supra) will not apply in a case where the assessee has entered into the agreement for a fixed remuneration merely as a contractor to construct or develop the housing project on behalf of the landowner. The agreement entered into in that case will not entitle the Developer to have the dominant control over the project and all the risks involved therein will vest with the landowner only. The interest of the Developer will be restricted only for the fixed remuneration for which he would be rendering the services. The decision in the case of Radhe developers (supra) has not dealt with such " situation. The proposition of law laid down in the case of Radhe Developers cannot be applied universally without looking into the development agreement entered into by the Developer with the landowner. In the case of Shakti Corporation since the assessee has filed copy of the development agreement and developed the housing project at its own, therefore, we are of the view that the assessee will be entitled for the deduction u/s 80IB(10). The decision of the Hon'ble Supreme Court in Fakir Chand Gulati (Civil Appeal No. 3302 of 2005) will not assist the Revenue, as the agreement is not sharing of constructed area."

5.3.7. I have carefully gone through the relevant clauses of the development agreements and other documents filed before the Assessing Officer as well as before me. On consideration of the relevant documents, I came to the conclusion that the appellant had acquired the dominance over the land and the land is under the possession of the appellant company. The appellant company was the de-facto landowner for all practical purposes and had developed the housing project by incurring all the expenses and taking all the risks involved therein. The land owners were eligible to get only price of land fixed by the development agreements and not to get any share in the development profits of the project.

5.3.8. The Ld. A.R also filed before me the copy of plans, various sanctions and certificate of Govt. approved Engineer alongwith detail of

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each unit of the scheme. The certificate clearly indicates that build up area of each unit is below 1500 Sq.Ft. 5.3.9 Looking to the above referred submissions of Ld AR, facts of the case, findings of the DCIT and various legal citations submitted along with the facts of earlier years assessment in which the deduction u/s 80IB(10) has been allowed by the department on the same projects which are similar to this year, I direct the AO to allow the claim of the appellant company u/s 80IB(10) of Rs.17,15,66,503/-.”

13.3 The Revenue has knocked the door of the Tribunal against the relief granted by the CIT(A) towards deduction claimed under s.80IB(10) of the Act.

13.4 When the matter was called for hearing, the learned DR for the Revenue relied upon the order of the AO.

13.5 The learned AR for the assessee, on the other hand, submitted that the development agreement entered into between the assessee and land owners for acquiring the rights and ownership of the land from various land owners and the copy of the ledger account showing consideration paid for acquiring the rights in the land and also copies of income tax return of the transferors would show that the transferor companies have offered taxes (LTCG) in their respective returns recognizing the transfer of land in favour of the assessee. It was contended that the assessee has the intrinsic right and ownership in the land as per the development agreement entered into with the land owner companies for which the consideration has been duly paid to the land owners. Thus, the assessee has acquired dominant control over the land on which construction and development of the residential housing project was carried out. The assessee incurred all the expenses of the development, construction and administrative expenses and took all risks and liabilities. As a sequel thereto, all the profits or loss in relation to the development of the residential house project stood vested in the assessee. The learned AR contended that

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all the terms and conditions laid down in Section 80IB (10) of the Act were fulfilled and is supported by relevant evidences as placed before the lower authorities. The learned AR next submitted that the ratio of the decision of the Hon’ble Gujarat High Court in CIT vs. Radhey Developers & Ors. (2012) 341 ITR 403 (Guj) squarely covers the case of the assessee. The learned AR also relied upon the decision of the Hon’ble Gujarat High Court in case of CIT vs. Vishal Developer (2014) 52 taxmann.com 514 and CIT vs. Swastik Associates 46 taxmann.com 53 for eligibility of deduction under s.80IB(10) of the Act.

13.6 We have carefully considered the rival submissions on the issue concerning deduction under s.80IB(10) of the Act. On appraisal of the development agreements, various approvals granted by the Municipal Corporation for the relevant projects, the CIT(A) came to a justifiable conclusion that the assessee has exercised dominant control over the ownership of the land and has carried out construction and development at its own risks and liabilities. The CIT(A) has taken into account the detailed submissions made on behalf of the assessee while adjudicating the issue in favour of the assessee applying the judicial interpretations available in this regard. The objection towards excessive built up area has also been addressed by the CIT(A) based on documentary evidences. Documentary evidences revealed that built up area was within the permissible limit. The Revenue before us could not point out any deficiency in the order of the CIT(A). We also take note of the significant plea on behalf of the assessee that the claim of deduction under s.80IB(10) of the Act was duly allowed by the AO in subsequent year 2010-11 and 2011-12 in the assessment framed under s.143(3) of the Act. Also, in the absence of rebuttal of observations made by the CIT(A), we do not see any justification to interfere with the order of the CIT(A). We thus express our

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concurrence with the conclusion drawn by the CIT(A) and hence decline to interfere.

15.1 In the course of the assessment, the AO inter alia observed that the assessee company has advanced an amount of Rs.2,59,00,22,720/- to related companies under the same management and consequently, worked out disallowance of proportionate interest expenditure of Rs.1.31 Crores in the ratio of borrowed funds (Rs.81.24 Crore) vis-à- vis total own funds of (Rs.385.17 Crores).

15.2 Aggrieved by the disallowance of proportionate interest expenditure, the assessee preferred the appeal before the CIT(A). It was contended before the CIT(A) that while the assessee has incurred interest expenditure of Rs.6.21Crores, the assessee has also simultaneously earned interest income of Rs.12.62Crores and resultantly, there is a net interest income of Rs.6.41 Crores in the hands of the assessee company. This fact was overlooked by the AO. It was further contended that the assessee company holds own capital by way of share capital and free reserves to the tune of Rs.417.83 Crores whereas the corresponding advance of Rs.259 Crores were given interest free. It was contended that advances have been made for business purposes as pointed out to AO. It was further contended that in view of the own funds (interest free) at the disposal of the assessee in excess of the advance made, the issue is covered by the judgment of the Hon’ble Bombay High Court in CIT vs. Reliance

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Utilities and Power Ltd. (2009) 313 ITR 340(Bom HC). The assessee also brought out to the notice of the CIT(A) that in the earlier assessment years concerning AYs. 2004-05, 2005-06 & 2006-07, the assessment was completed without any such disallowance in the realm of similar facts.

15.3 The CIT(A) re-visited the facts pointed out on behalf of the assessee as noted above and agreed with the plea of the assessee for allowability of interest expenditure as claimed. The relevant operative part of the order of the CIT(A) in this regard is reproduced hereunder:

“6.3 I have gone through the facts of the case, finding of the DCIT and also submission made along with various judicial pronouncements. It is also observed that the appellant has Share capital of Rs.32.65 Crores and Reserves and Surplus to the tune of Rs,385.17 Crores as against business advances of Rs.259,00 Crores aggregating to Rs. 417.82 crores. It is also further observed that Rs. 66.28 crores have been outstanding on 01/04/2007 in Ganesh Plantations Ltd. and Rs. 11.79 crores have been advanced to 100% subsidiary company. It is further submitted that advances are given to a subsidiary company and other companies so that the agricultural land can be bought by them and after converting the same to N.A., the same can be sold/transferred to the appellant company. This practice is done for the basic fact that the appellant company cannot buy agricultural land in its own name. Further, the Reliance was placed on the judgement of CIT v/s Reliance Utilities and Power Ltd. 313 ITR 340 (Bombay), Torrent Financiers (73 TTJ 624 (Ahmedabad) wherein it was held that "Tribunal having recorded a clear finding that the assessee possessed sufficient interest free funds of its own which were generated in the course of me relevant financial year, apart from substantial shareholders' funds, presumption stands established that the investments in sister concerns were made by the assessee out of interest free funds and therefore, no part of interest on borrowings can be disallowed on the basis that the investments were made out of interest bearing funds. It was further submitted that major borrowings have been taken from Banks and Financial Institutions which monitor the application of the borrowed funds also and therefore also borrowed funds could not been used for any other purpose. In view of above referred facts and legal position of the law, I direct the AO to delete the disallowance made of interest amounting to Rs, 1,31,00,000/-,

15.4 Aggrieved by the relief granted by the CIT(A), the Revenue preferred appeal before the Tribunal.

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15.5 The learned DR for the Revenue relied upon the order of the AO.

15.6 The learned AR for the assessee, on the other hand, reiterated various submissions made before the CIT(A) and submitted that law is well settled in this regard. It was further pointed out that for the AY 2014-15 where the assessee is placed in the similar circumstances, no disallowance has been made by the AO himself of correct appreciation of fact. The learned AR for the assessee accordingly submitted that there is no warrant for any interference with the order of the CIT(A).

15.7 We have heard rival submissions. The maintainability of disallowance of interest expenditure under s.36(1)(iii) of the Act is in question. As noted by the CIT(A), the assessee has clearly demonstrated its own funds to be in excess of corresponding interest free advances. Secondly, the assessee has earned substantial interest netting of which has not been given by the AO at all. The CIT(A) further noted that the AO has adopted inconsistent stand and disallowed the interest expenditure on proportionate basis in this year whereas accepted the interest claim in the earlier years. Before us, the Revenue could not support the case of the AO for disallowance. The issue in the context of the facts is no longer res integra and covered in favour of the assessee by several judicial precedents as rightly recorded by the CIT(A). In these circumstances, we are of the view that the CIT(A) has approached the issue in proper perspective and reversed the wrongful disallowance made by the AO. We thus see no perceptible reason to interfere with the order of the CIT(A).

15.8 Ground No.3 of the Revenue’s appeal is dismissed.

15.9 In the result, appeal of the Revenue in ITA No. 2122/Ahd/2011 for AY 2008-09 is dismissed.

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ITA No. 2179/Ahd/2011 A.Y. 2008-09 (Assessee’s appeal)

“I. TAXING THE ADVANCE RECEIPT BEING CONTINGENT IN NATURE UNDER THE PROVISIONS OF SECTION 115JB OF THE ACT – RS. 97,72,11,000/- 1. The Ld. CIT(A) has erred in law and on facts while holding that the appellant company is liable to tax on advance receipt which is contingent in nature as Book Profit u/s.115JB of the Act. 2. The Ld. CIT(A) has erred in law and on facts while giving contradictory findings in respect of amount received from Abir Investments Pvt. Ltd., while treating the said amount as advance receipt being contingent in nature on account non-fulfillment of prescribed conditions of the lease agreement vis-à-vis rules and regulations of SEZ on one hand and holding that the appellant company is liable to tax on such receipt as book profit u/s.115JB of the Act on the other hand. 3. The Ld. CIT(A) has erred in law and on facts in giving the direction to the A.O. to re-compute the book profit u/s.115JB of the Act.”

16.1 The assessee’s appeal as per grounds noted above seeks to challenge the taxability of advance receipts in pursuance of MOU /Lease agreement wrongly recognized in the books of accounts as ‘income from SEZ project’ for the purposes of determination of book profit under s.115JB of the Act. It is the case of the assessee that as demonstrated in the Revenue’s appeal in ITA No. 2122/Ahd/2011 (supra), the agreed consideration recognized on the basis of MOU has neither accrued nor received and the income from such MOU is completely contingent and conditioned upon fulfillment of various obligations integral to the proposed agreement including approval of the Government for putting the proposed agreement into motion. In essence, it is further contended that assessee has received only a token amount of Rs.1 Crore during the year and remaining advance received in subsequent years were ultimately returned due to lack of approval of the lessee as a co-developer in SEZ project from the Central Government. It is contended on behalf of the assessee that when the CIT(A) has observed on facts that the consideration agreed upon as per the lease agreement is highly contingent and liable to be returned

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on non-fulfillment of prescribed conditions, there was no warrant for the CIT(A) to reckon the same consideration (recognized in the books owing to such agreement) for the purposes of determination of book profit. As noticed earlier, it is also the contention of the assessee that there is no sale of land to AIPL per se and the right, title and interest has not been relinquished in favour of the proposed lessee at all. The assessee has neither received the consideration nor the possession of the land has been given. The lease deed is not registered in the land revenue records. Therefore, some hypothetical income recorded in the books of accounts with corresponding liability of the lessee to pay the aforesaid amount to the assessee subject to fulfillment of pivotal conditions and obligations would not partake character of income/profits even by applying rudimentary principles of accountancy. On facts, the assessee has demonstrated that the income recorded in the books was illusory and was ultimately refunded to the proposed lessee in the subsequent year 2014-15 as the approval of the Central Government could not be approved. It is further case of the assessee that where such proposed income from proposed lease is outside the sweep of ‘income’ in Section 2(24) of the Act and does not enter into computation under normal provisions of the Act, the same cannot be subjected to tax under the said provisions of Section 115JB of the Act in view of saving clause provided in sub-section 5 thereof. A reference was to the decision of the Hon’ble Supreme court in Indo Rama Synthetics (I) Ltd. vs. CIT (2011) 330 ITR 363 (SC) to submit that the object of MAT provision is to bring out the true working result of the companies. It was contended that where the income not accrued or arising to the company at all, the inclusion thereof in the P&L account would not be in accordance with Part II & III of Schedule VI of the Companies Act. Further a reference was made to another decision of the Hon’ble Supreme Court in the case of Padmaraje R. Kadambande Vs. CIT (1992) 195 ITR 877 (SC) wherein

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it has been held by the Apex court that the capital receipts are not income within the definition of Section 2(24) of the Act and hence are not at all chargeable under the IT Act. A receipt which is neither profit nor income and which does not have any element of income embedded therein, cannot be part of profit as per P&L account prepared in terms of Part II of Schedule VI to the Companies Act. It was next pointed out that the genesis of Section 115J, thereafter Section 115JA and now Section 115JB of the Act was to ensure that the assessee by making profit from operations should not enjoy tax free status due to many deductions available under the Income Tax Act. It was contended that there was never any intention of the legislature to tax what is not income at all. It was submitted that inclusion of such a refundable advance receipts of intrinsically contingent nature (which is parallely a liability of the company) in the computation of MAT would defeat both the fundamental principles namely (i) it would tantamount to levy to tax on receipt which is not in the nature of income and (ii) it would give rise to misleading working results of the company instead of real working result. It was submitted that in order to arrive at the correct working result, the consideration agreed by way of MOU and recognized in the books despite its highly contingent and dependent on various unforeseen and uncontrollable factors requires to be excluded unless the right to receive the consideration accrues and crystalizes in favour of the assessee. It was further contended that the principles laid down by the Hon’ble Supreme Court in a case of Apollo Tyres Ltd. vs. CIT (2002) 255 ITR 273 (SC) is limited to the aspect whether the AO is entitled to recast audited accounts prepared in accordance with Part II & Part III of the Schedule VI of the Companies Act. It was thus submitted that where the P&L account is not prepared in accordance with Part II & III of Schedule VI of the companies Act at the first place, the said decision cannot be applied and does not prohibit

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needful adjustment to bring it in tune with Schedule VI to the Companies Act. The learned AR for the assessee referred to the Special bench in case of Rain Commodities Ltd. vs. DCIT 41 DTR 449 (Hyderabad) (SB) to support the aforesaid position of law. It was submitted that the special bench has also held that if the P&L account is not in accordance with Part II & Part III of Schedule VI to the Companies Act, it would be permissible to alter the net profit so as to make it compliant with the same which is the starting point for computation of book profit in terms of Section 115JB of the Act. In the said judgment, inclusion of sales tax subsidy in P&L account was not found to be in accordance with Schedule VI – Pat II & III. It was held that needful adjustment to exclude the same is not only permissible but is mandatory so as to making P&L account sync with the basic requirement of Section 115JB of the Act. The reliance was placed on yet another decision of the co-ordinate bench of the Tribunal in DCIT vs. Bombay Diamond Company Ltd. (2010) 33 DTR 59 (Mumbai) and that of Bangalore Tribunal in the case of Syndicate Bank vs. ACIT (2006) 7 SOT 51 (Bang.) where the adjustments were permitted to the P&L account drawn by the assessee so as to comply with Schedule VI Part II & Part III of the Companies Act, which is pre-requisite for Section 115JB of the Act. The learned AR thereafter submitted that there are large number of judicial pronouncements to the effect that tax liability under s.115JB of the Act cannot be applied where it has been demonstrated on facts that the consideration arising from the lease agreement is highly contingent and hypothetical income with corresponding liability of the company stood created notwithstanding erroneous entries made in the books of accounts in this regard. It was submitted in conclusion that what is not chargeable to tax at all under charging Section 4 & 5 of the Act cannot be charged to tax under deeming provisions of s.115JB of the Act. The receipt/receivable on account of lease agreement in this year is

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returnable in subsequent year and thus does not bear the character of income in the absence of legal right to receive such money created in favour of the assessee and thus cannot form part of the ‘book profit’ for the purposes of Section 115JB of the Act.

16.2 Learned DR, on the other hand, submitted that the assessee itself has recognized the consideration from lease agreement as the revenue income and therefore, there is no reason for the AO to travel beyond what has been accepted by the assessee itself and therefore, no adjustment for determination of book profit is required.

16.3 We have carefully considered the rival submissions and the facts of the case and perused the order of the lower authorities. The pertinent question involved is whether the consideration arising from the MOU/lease deed with AIPL recognized as revenue income despite it being a contingent liability and admittedly not accrued or earned by the assessee is liable for taxation under s.115JB of the Act or not.

16.4 It may be pertinent here to re-capitulate that Section 115JB of the Act requires that the account of the company should be prepared in compliance with Schedule VI of Companies Act and following the same accounting policies, accounting standards and depreciation policy as in the accounts prepared in the Companies Act. Therefore, while determining the book profit for the purposes of Section 115JB of the Act accounts are to be drawn in accordance with Part II & III of Schedule VI of Companies Act. This will include compliance with accounting standards. The pivotal argument of the assessee is that the lease consideration recognized in the P&L account being highly contingent and illusory would fall outside the definition of income under s.2(24) of the Act and cannot be brought to tax under s.115JB of the Act. We find merit in the plea of the assessee that what is not

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income at all cannot be taxed under s.115JB of the Act in view of sub- section 5 thereof. Such consideration receivable on happening of certain events is not chargeable to tax under s. 4 r.w.s. 5 of the Act.

16.5 The issue is no longer res integra and examined by the Hon’ble Supreme Court in Indo Rama Synthetics (supra). We also take note of the decision of the co-ordinate bench in JSW Steel Ltd. (2017) 82 taxmann.com 210 (Mum); Shivalik Venture Pvt. Ltd. vs. DCIT (2015) 60 taxmann.com 314 (Mum); ACIT vs. Shree Cement Ltd. (2015) 52 ITD 561 (Jaipur) and other decisions relied upon on behalf of the assessee for the proposition that book profit can be suitably adjusted where the P&L account is not drawn in accordance with Part II and Part III of the Schedule VI to the Companies Act, 1956. In view of the peculiar facts of the case and in the light of long line of judicial precedents available in this regard, we have no hesitation to hold that the consideration recognized as revenue income in connection with MOU/lease agreement with AIPL, which is only hypothetical at present and neither accrued nor earned income of the assessee is outside the purview of income under s.2(24) of the Act and consequently, such consideration is outside the ambit of section 4 of the Act and in turn s.115JB of the Act notwithstanding the amount having been credited in the P&L account as revenue income of the assessee. The CIT(A) having arrived at a finding that the receipt from AIPL are contingent in nature and liable to be returned in the event of non fulfillment of conditions of the agreement, could not have arrived at a finding adverse to the assessee for the purposes of determination of book profit under s.115JB of the Act merely because of it being recognized in the P&L account by the assessee. We are thus of the considered view that unaccrued income from SEZ project amounting to Rs.97,72,11,000/- cannot be taken into account for the purposes of determination of book profit under s.115JB of the Act and tax liability

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cannot be fastened on the assessee on this score. Therefore, we find merit in the appeal of the assessee. The obscure and unintelligible order of the CIT(A) is consequently set aside and the AO is directed to exclude the aforesaid income for the purposes of determination of book profits.

16.6 In the result, appeal of the assessee in ITA No. 2179/Ahd/2011 for AY 2008-09 is allowed.

CO No. 237/Ahd/2011 A.Y. 2008-09 (in ITA No.2122/Ahd/2011)

“1. The Ld. CIT (A)- VIII, Ahmedabad after going through the details and submissions made by the Respondent as well as after duly considering the various facts of the case as well as various case laws has rightly given the direction to the A.O to treat the amount received from M/s. Abir Investment Pvt. Ltd., as advance receipt in A.Y. 2012-13as per the provisions of law. 2. The Ld. CIT(A) - VIII, Ahmedabad after considering the facts of the case, submission of the Respondent has rightly held in law and on facts that "Looking to the submission of the Ld. AR, facts of the case and various legal citations, directed the A.O to allow the claim of the Respondent u/s. 80IB(10) of the Act amounting to Rs. 17,15,66,503/-". 3. The Ld. CIT(A) - VIII, Ahmedabad after carefully considering the facts of the case, submission of the Respondent as well as the various case laws relied upon by the Respondent has rightly given the direction to the A.O to delete the disallowance of interest amounting to Rs. 1,31,00,000/-.”

17.1 The cross objection filed by the assessee in Revenue’s appeal merely supports the order of the CIT(A). As per Section 253(4) of the Act, the assessee is entitled to file cross objection against any part of the order of the Commissioner (Appeals). In the absence of any objection to the order of the CIT(A) on issues raised in the Revenue’s appeal, the cross objection is hollow and a damp squib. This apart, the Revenue’s appeal is dismissed and consequently, the cross objection is rendered infructuous.

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17.2 In the result, cross objection of the assessee dismissed as infructuous.

ITA No. 2898/Ahd/2013 A.Y. 2007-08 (Revenue’s appeal)

“1. The ld. CIT(A) has erred in law and on facts in deleting the disallowance of Rs.23,11,02,617/- made u/s. 80IB(10) of the Act relying on the decision in the case of Radhe Developers for A.Y. 2003-04 without properly appreciating the facts of the case that the assessee did not satisfy the conditions as laid down in the said Section. 2. The ld. CIT(A), however, failed to appreciate the fact that the assessee company did not satisfy the condition with regard to built up area as the Assessing Officer established that the built up area of each unit in case of assessee exceeded 1500 sq.ft.

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evidences. We thus decline to interfere with the order of the CIT(A). Ground No.2 of the Revenue’s appeal is dismissed.

CO No. 67/Ahd/2014 A.Y. 2007-08 (in ITA No.2898/Ahd/2013)

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given the direction to the A.O to delete the disallowance of interest amounting to Rs. 7,97,90,760/-.”

ITA No. 452/Ahd/2014 A.Y. 2009-10 (Revenue’s appeal)

“1. The Ld. CIT(A) has erred in law and on facts in deleting the disallowance of Rs.71,99,242/- made u/s. 80IB(10) of the Act relying on the appellate order of the predecessor in the case of assessee for A.Y. 2008-09 in which reliance was placed on the decision in the case of Radhe Developers in ITA No. 2842/Ahd/2006, without properly appreciating the facts of the case and material brought on record. 2. The Ld. CIT(A), however, failed to appreciate the fact that the assessee company did not satisfy the condition with regard to built up area as the Assessing Officer established that the built up area of each unit in case of assessee exceeded 1500 sq.ft. 3. The Ld. CIT(A) has further erred in law and on facts in deleting the disallowance of interest of Rs.8,67,12,000/- made u/s.36(1)(iii) of the Act, without properly appreciating the facts of the case and the material brought on record.”

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ITA No. 298/Ahd/2014 A.Y. 2009-10 (Assessee’s appeal)

“I. TAXING THE ADVANCE RECEIPT BEING CONTINGENT IN NATURE UNDER THE PROVISIONS OF SECTION 115JB OF THE ACT – RS. 50,30,13,540/- 1. The Ld. CIT(A) has erred in law and on facts while holding that the appellant company is liable to tax on advance receipt which is contingent in nature as Book Profit u/s.115JB of the Act. 2. The Ld. CIT(A) has erred in law and on facts while giving contradictory findings in respect of amount received from Abir Investments Pvt. Ltd., while treating the said amount as advance receipt being contingent in nature on account non-fulfillment of prescribed conditions of the lease agreement vis-à-vis rules and regulations of SEZ on one hand and holding that the appellant company is liable to tax on such receipt as book profit u/s.115JB of the Act on the other hand. 3. The Ld. CIT(A) has erred in law and on facts in giving the direction to the A.O. to re-compute the book profit u/s.115JB of the Act by following the appellate order passed for A.Y. 2008-09.”

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drawn concerning AY 2008-09 shall have the same effect for AY 2009-10.

CO No. 129/Ahd/2014 A.Y. 2009-10 (in ITA No.452/Ahd/2014)

“1. The Ld. CIT(A) after considering the facts of the case, submission of the Respondent as well as relying on the appellate order passed by the predecessor in the case of the appellant company for A.Y. 2008-09 has rightly held in law and on facts that "since a clear finding has been given in the above referred order it would be judicially prudent to follow the same. As observed by the AO in the order, the facts of the current year are identical, projects for which the deduction is claimed are also the same and the AO has also relied upon the finding given in the assessment year 2008-09. Therefore, respectfully following the decision of my predecessor the claim of the appellant is allowed for this year as well" and the Ld. CIT (A) has rightly directed the AO to delete the disallowance u/s. 80IB(10) of the Act amounting to Rs.71,99,242/-. 2. The Ld. CIT (A) after considering the submission of the respondent observed in his order that the copy of plan, various sanctions and certificate of Government approved Engineer alongwith the details of each units of the scheme and the certificate clearly indicates that the built up area of each unit is below 1500 Sq.ft.. 3. The Ld. CIT(A) - VIII, Ahmedabad after carefully considering the facts of the case, submission of the Respondent as well as the various case laws relied upon by the Respondent has rightly given the direction to the A.O to delete the disallowance u/s. 36(1)(iii)of the Act Rs. 8,67,12,000/-.”

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ITA No. 3011/Ahd/2014 A.Y. 2010-11 (Revenue’s appeal)

“1. The Ld. CIT(A) has further erred in law and on facts in deleting the disallowance of Rs.8,67,06,000/- made u/s.36(1)(iii) of the Act, without properly appreciating the facts of the case and the material brought on record.”

CO No. 322/Ahd/2014 A.Y. 2010-11 (in ITA No.3011/Ahd/2014)

“1. The Ld. CIT(A) - VIII, Ahmedabad after carefully considering the facts of the case, submission of the Respondent as well as the various case laws relied upon by the Respondent and following the appellate order for A.Y. 2008-09 & 2009-10, has rightly given the direction to the A.O to delete the disallowance u/s. 36(1)(iii)of the Act Rs. 8,67,06,000/- as the issue being a covered matter in appellant’s own case for A.Y. 2008-09 & A.Y. 2009-10.”

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ITA No. 3084/Ahd/2015 A.Y. 2011-12 (Revenue’s appeal)

CO No. 217/Ahd/2015 A.Y. 2011-12 (in ITA No.3084/Ahd/2015)

“1. The Ld. CIT(A) - 2, Ahmedabad after carefully considering the facts of the case, submission of the Respondent, various judicial pronouncements relied upon by the Respondent including of the Hon’ble jurisdictional Gujarat High Court, Jurisdictional I.T.A.T. as well as the decision given by the Predecessor of Ld. CIT(A)’s in Respondent company’s own case for A.Y. 2008-09, 2009-10 & 2010-11 has correctly deleted the disallowance of interest made by the Assessing Officer of Rs.8,50,02,920/- u/s. 36(1)(iii) of the Act.”

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ITA No. 3085/Ahd/2015 A.Y. 2012-13 (Revenue’s appeal)

“1. The Ld. CIT(A) has further erred in law and on facts in deleting the disallowance of interest expenses of Rs.8,36,975/- made u/s.36(1)(iii) of the Act, without properly appreciating the facts of the case and the material brought on record.” 2. The Ld. CIT(A) has erred in law and on facts in deleting the disallowance of Rs.6,96,18,668/- made u/s.14A of the Act, without properly appreciating the facts of the case and the material brought on record.”

52.1 In first appeal, however, the CIT(A) sustained the addition to book profits under s.115JB to the extent of suo motu disallowance of Rs.68.65 Lakhs made by assessee.

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52.2 Aggrieved by the deletion of disallowance of Rs.6,96,18,668/- towards interest under Rule 8(D)(ii) of I. T. Rules r.w.s. 14A of the Act, the Revenue is in appeal before ITAT.

52.3 With the assistance of the learned representatives of the Revenue and assessee, we observe that the assessee has not declared any exempt income and consequently the provisions of Section 14A is not attracted in view of CIT vs. Corrtech Energy (P.) Ltd. (2014) 45 taxmann.com 116 (Guj) and other several decisions in this regard. Secondly, the CIT(A) has also recorded a finding to the effect that interest free funds available at the disposal of assessee is in excess of amount of investments which give rise to potential exempt income. Thus disallowance of proportionate interest is not permissible in such circumstances. Hence, we do not see any infirmity in the action of CIT(A) in deleting the disallowance of interest expenditure for the purposes of section 14A of the Act. Hence, we decline to interfere.

52.4 Ground No.2 of the Revenue’s appeal is dismissed.

CO No. 218/Ahd/2015 A.Y. 2011-12 (in ITA No.3085/Ahd/2015)

“1. The Ld. CIT(A) - 2, Ahmedabad after carefully considering the facts of the case, submission of the Respondent, various judicial pronouncements relied upon by the Respondent including of the Hon’ble jurisdictional Gujarat High Court, Jurisdictional I.T.A.T. as well as the decision given by the Predecessor of Ld. CIT(A)’s in Respondent company’s own case for A.Y. 2008-09 to 2011-12, has correctly deleted the disallowance of interest made by the Assessing Officer u/s. 36(1)(iii) of the Act of Rs.8,36,975/-. 2. The Ld. CIT(A) - 2, Ahmedabad after carefully considering the facts of the case, submission of the Respondent, various judicial pronouncements relied upon by the

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Respondent has rightly deleted disallowance of Rs.6,96,18,668/- made u/s.14A of the Act by the A.O.”

This Order pronounced in Open Court on 15/ 05 /2019

Sd/- Sd/- (MAHAVIR PRASAD) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad: Dated 15/05/2019 S. K. SINHA/TC Nair आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A)- 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।