THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-4(1)(1),, AHMEDABAD vs. SHANTI EXPORTS PVT. LTD.,, AHMEDABAD

आदेश/O R D E R

PER WASEEM AHMED, ACCOUNTANT MEMBER:

The captioned appeal has been filed at the instance of the Revenue against the order of the Learned Commissioner of Income Tax (Appeals)-8, Ahmedabad, dated 19/03/2019 arising in the matter of assessment order passed under s. 143(3) of the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2016-2017.

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4.1 At the same time, the table space on the 5th floor was also rented out to four group companies against the rent of ₹24,000 per annum aggregating to ₹96,000 only which was duly offered to tax in the income tax return.

4.2 The assessee during the assessment proceedings also submitted that the 6th floor was completed in the February 2016 and therefore no notional rent can be charged with respect to such building for the entire year.

4.3 However, the AO found that the assessee has shown rent with respect to basement, ground floor and the 1st floor at the fair market value and therefore no addition was made.

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The AO with respect to 2nd, 3rd and 4th floor found that the assessee has 4.4 shown the rent which was less than the fair rental value leading to the difference of Rs. 2,02,972.00 and 3,29,942.00 respectively aggregating to Rs. 5,32,914.00 and accordingly, the addition was made to the total income of the assessee.

4.5 The AO also rejected the contention of the assessee that the 5th floor was used by it ( the assessee) for its own business purposes in the absence of necessary evidence. Thus, the AO determined the fair value of the rent of 5th floor at ₹ 14,01,105.00 (area 4898.97 X Rs. 286.00 per square feet) and subtracted the sum of ₹ 96,000 shown by the assessee as rental income from the impugned fair market value. Thus, the AO made the addition of the balance amount of ₹ 13,05,105.00 and added to the total income of the assessee.

4.6 The AO with respect to the 6th floor has calculated the fair market rent of ₹ 1 lakh per month. According to the AO, the assessee has calculated the depreciation on the 6th floor for half of the year. Thus the AO determined the rent for the 6th floor for half of the year at ₹ 6 Lacs only and added the same to the total income of the assessee.

(i) Finding of the learned CIT-A with respect to 2nd, 3rd and 4th floor of the Property 5.1 Appellant has brought to my notice the order of Hon’ble IT AT in ITA No.640/Ahd/2017 dated 07.01.2019 in their own case on the very same issue pertaining to A.Y.2013-14. In this order Hon'ble ITAT have directed the AO to ascertain the fair rental value of the property in the very same facts on the basis of any of the four methods as prescribed by the relevant taw. The relevant part of the order is reproduced as under:

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10.3. "A plain reading of the above provisions reveals that the rent should be decided on the basis of the sum which can be reasonably expected from the letting out the property during the year or the actual rent received/receivable, whichever is higher. 10.4. In the instant case, the Revenue alleges that the actual rent received/receivable is less than the reasonable expected rent. Thus the controversy revolves what should be the reasonable expected rent. The law to determine the reasonable expected rent provides a certain basis as detailed under: i) Actual rent received or receivable:- Actual rent received/receivable is an important factor in determining the annual value of a property. ii) Municipal Value:- This is the value as determined by the Municipal authorities for levying Municipal taxes on house property. Municipal authorities normally charge,' house tax/Municipal faxes on the basis of annual letting value of such house property. iii) Fair rent of f/ie property:- Fair rent is the rent which a similar property can fetch in the same or similar locality if it is let out for a year. The DVO can also find out such value. iv) Standard Rent:- The standard rent is fixed under the Rent Control Act. If the standard rent has been fixed for any property under the Rent Control Act. 10.5. Now coming to the facts of the case on hand, we note that the learned CIT (A) has determined the fair rent of the property at Rs. 248/- per Square feet on the basis of the rent received by the assessee from the bank of Baroda in the assessment year 2011-12 as increased by 5% p.a. There is no dispute that the bank vacated the property on 30lfl June 2010. However, the assessee claimed that the fair rent for the property under consideration is of the same amount received by it from its associated enterprises. 10.6. In our considered view, once the assessee has disputed the fair rent, then the lower authorities are under the obligation to reject the contention of the assessee with cogent reasons. As such the authorities below were under the obligation to determine the fair rent of the property in the manner as discussed above. But the authorities below have not determined the fair rent without considering the procedures prescribed under the law. 10.7. The rent charged by the assessee from the bank of Baroda cannot be the basis for determining the fair rent of the properties due to the following reasons: 10.8. The property was rented out by the assessee to the bank of Baroda in the year 1998, and in every rental agreement, there is an escalation clause for enhancing the amount of rent. Thus the rent charged by the assessee from the bank was based on the agreement which was made in the year 1998. As such the rent charged by the assessee from the bank in the year, 2010 was not based on the fair market rent. 10.9. There is a time gap of 1 year & 9 months when the assessee received the last rent from the bank of Baroda and the year of consideration. As such there can be certain factors which can affect the fair market rate in any manner which have not been considered while determining the fair market rent. 10.10. In view of the above, we are of the considered opinion, the issue on hand needs to be examined in the manner as discussed above and as per the provisions of law. Accordingly, the other arguments raised by the Seamed AR for the assessee do not require separate adjudication at this moment. Hence, we are inclined to restore this Issue to the file of AO as stipulated above. Thus, the ground of appeal of the assessee is allowed for statistical purposes."

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5.2 As the rent has been determined by the AO by invoking the provisions of section 40A(2)(b) on the basis of same facts as in the A.Y.2013-14, infact AO has just followed the earlier orders including the orders of A.Y.2013-14, therefore, the directions of the Hon'ble ITAT are also applicable to the year under appeal, accordingly, AO is directed to determine the fare rent as per the directions of the Hon'ble ITAT contained on their order in the case of appellant pertaining to A.Y.2013-14 reproduced hereinabove and add the difference if any in the actual rent received.

(ii) Finding of the learned CIT-A with respect to 5th Floor of the Property 5.3.1 In the course of appellate proceedings appellant contended that the area which is not rented on the 5th floor is used by the direction of the appellant company for carrying out the business operations. However, AO has noted on page 4 of the impugned Assessment Order that on spot verification on 13.08.2018 by the Inspector of Income Tax (ITI) it was found that appellant has not occupied any part of the building and computed the fare rental value of the remaining portion of 5th floor for the entire year. Per contra appellant has vehemently argued that the company is having a turnover of more than 7 crore including the rental! income from various premises which are subject matter of this! assessment and to carry out such business activity and offices required and which is at the 5th floor of this building wherein the directors are carrying out the day to day business. In fact in the ROI and in the impugned Assessment Order the same building is mentioned as office. I find that AO on page No.4 & 5 of the impugned assessment order has mentioned the details of inquiries conducted by the ITI, however, the same is silent as regards the 5th floor. The ITI has detailed the offices located on 1st floor but have not mentioned anything about 5th floor, the operative para of the impugned assessment order i.e. in para 3.121 and 3.12.1 also AO has not mentioned specifically the result of inquiry! as regards the 5lh floor. There cannot be any dispute on the fact that! appellant requires an office where from the directors can carry out the business. It is for them to choose a place of business and in the case at hand statedly as per records the same building is mentioned as office of the appellant. It is also a fact that no other office building is occupied by the appellant. Part of the 5th floor is give on rent and all the other floors are either rented out or a canteen is constructed (6lh floor). In the ROI appellant has mentioned the address as 2nd floor whereas the same is contended to be at 5lh floor, on the query regarding these discrepancy appellant submitted that earlier the directors were functioning from the 2lld floor but after the entire 2nd floor was rented out they have shifted to the 5th floor, however, the address in the APN database remained to be changed. As per the AO also the entire 2nd floor is rented out to Chiripal Industries Ltd. for a yearly rent of Rs.10,56,000/. In view of these facts, and in view of absence of any specific rebuttal of the appellant's assertion that the vacant portion of 5th floor is used by the directors in the spot inquiries I am inclined to agree with the appellant's contention. Accordingly, it is held that the vacant portion of 5lh floor since occupied by the appellant for its own business purpose cannot be subjected to fair rental value as per section 22 of the Act and the additions made by the AO towards the same amounting to Rs. 13,05,105/- is deleted. AO is directed to delete the same.

(iii) Finding of the learned CIT-A with respect to 6th floor of the Property 5.4 Appellant has constructed a canteen on the 6th floor which, as per the appellant was completed in the month of February, 2016. AO has determined fare rental value of Rs. 1,00,0007- per month for 6 months on the same totalling to Rs.6,00,000/- and added the same to the total income. Before the AO, appellant submitted that they have not let out the canteen which was completed in the month of February , 2016 and it was used by the appellant. AO was not convinced and noted that appellant did not have any staff and hence, the same was used by the tenants including the associate concerns and determined the fare

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rental value thereon. Since, appellant does not have any staff and have not been able to demonstrate before the AO as well in the appellate proceedings that the canteen was used by it, AO has rightly determined the Fair Rental Value u/s.25 of the I. T. Act. However, since, the canteen was completed in the month of February which is also evident from the fact that only half depreciation has been claimed i.e. as the same was used for less than half of the year, the FMV has to be computed only for the month of March 2016 i.e only for one month as per the method directed by the Hon’ble ITAT in the appellant’s case as noted in para 5.2 hereinabove. AO is directed to re-compute the same accordingly.

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10.6. In our considered view, once the assessee has disputed the fair rent, then the lower authorities are under the obligation to reject the contention of the assessee with cogent reasons. As such the authorities below were under the obligation to determine the fair rent of the property in the manner as discussed above. But the authorities below have not determined the fair rent without considering the procedures prescribed under the law. 10.7. The rent charged by the assessee from the bank of Baroda cannot be the basis for determining the fair rent of the properties due to the following reasons: i. The property was rented out by the assessee to the bank of Baroda in the year 1998, and in every rental agreement, there is an escalation clause for enhancing the amount of rent. Thus the rent charged by the assessee from the bank was based on the agreement which was made in the year 1998. As such the rent charged by the assessee from the bank in the year, 2010 was not based on the fair market rent. ii. There is a time gap of 1 year & 9 months when the assessee received the last rent from the bank of Baroda and the year of consideration. As such there can be certain factors which can affect the fair market rate in any manner which have not been considered while determining the fair market rent. 10.8. In view of the above, we are of the considered opinion, the issue on hand needs to be examined in the manner as discussed above and as per the provisions of law. Accordingly, the other arguments raised by the learned AR for the assessee do not require separate adjudication at this moment. Hence, we are inclined to restore this issue to the file of AO as stipulated above. Thus, the ground of appeal of the assessee is allowed for statistical purposes.

8.1 Respectfully following the order of the ITAT in the own case of the assessee, the impugned issue as discussed above with respect to 2nd, 3rd and 4th floor is set aside to the AO for fresh adjudication as per the provisions of law.

8.2 With respect to 5th floor, we note that the learned CIT-A has given detailed and reasoned finding that the impugned floor was being used by the assessee for its commercial purposes besides renting out the table spaces to the group companies on the annual rent of ₹ 24,000.00 per table space aggregating to Rs. 96,000.00 only. There is no dispute to the fact that the property which is used for the purpose of the business, the same cannot be made subject to tax under the head house property by virtue of the provisions of section 22 of the Act. At the time of hearing the learned DR has not brought anything on record suggesting that the 5th floor was not used by the assessee for its business purposes. Thus in the absence of any contrary arguments by the learned DR, we do not find any infirmity in the

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finding of the learned CIT-A. Before parting, it is significant to note that the table spaces were rented out by the assessee to 4 group concerns on the annual rent of ₹24,000 per sister concern aggregating to Rs. 96,000. Only. The question arises whether the rent charged from the sister concern at ₹24,000 per annum represents the fair rental value. As far as the determination of the fair rental value is concern with respect to the table space rented out to the group companies, the same has to be decided in the light of the finding of the ITAT reproduced hereinabove.

8.3 With respect to the 6 floor, the issue remains to be resolved whether the rental income has to be calculated for the 6 months or for 1 month. The learned CIT-A has given a finding that the building was completed in the month of February 2016 and therefore the rent of 1 month pertaining to March 2016 can only be taken as addition under the provisions of section 22 of the Act. This fact finding of the learned CIT-A was not disputed by the learned DR at the time of hearing. Accordingly, in the absence of any contrary information, we do not find any infirmity in the finding of the learned CIT-A. Thus, we direct the AO to take the rent of ₹ 1 lakh with respect to the 6 floor for the purpose of the addition to the total income of the assessee. In view of the above and after considering the facts in totality, the ground of appeal of the revenue is partly allowed for the statistical purposes.

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treated the income arising to it from the sale of plots as income under the head capital gain.

11.1 On question by the AO, the assessee contended that it had no experience of real estate business and furthermore it failed to find out any single buyer for the impugned factory. Therefore, the assessee decided to sale the land in parts from the financial year 2012-13 and the income thereon was offered under the head capital gain which was accepted by the Revenue.

11.2 However, the AO rejected the contention of the assessee by observing that the assessee has developed several plots in a systematic manner. Each plot was developed with all the necessary common amenities. Likewise, the assessee in the earlier year has accepted the land as business asset and therefore, it did not pay any wealth tax thereon. Thus, the AO concluded that the assessee is carrying on the business of developing the plots. Therefore, the income thereon should be taxed as income under the head business and profession.

11.3 The AO further found that the assessee has not furnished any details about the cost of improvement and therefore the same cannot be allowed. Besides the cost of improvement, the AO also found that the assessee has not furnished the cost incurred by it in the acquisition of the impugned factory viz a viz the amount realized on the sale of factory shed, plant and machineries etc. Thus, the AO in the absence of necessary information, presumed that the assessee has already

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recovered the cost of land against the sale of factory shed, plant and machineries. Thus, the assessee cannot be allowed as deduction the cost against the sale consideration of the plots of ₹ 3,41,51,700 and added the same as business income of the assessee.

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reproduced herein above as a part of assessment order. Appellant also relied upon various case laws in support of its contention. 5.1.1 On facts I find that the following facts are not disputed by the AO: that the land was a part of the composite mill purchased in running condition; appellant was and is engaged in the business of manufacturing and trading of gray, cloths and textiles- the appellant actually ran the mil! for a couple of years before deciding to sell it of- this the entire mill including the land was shown in the books of accounts as business asset and on the plant and machinery and factory build,ng even depreciation was claimed and allowed, appellant has not ventured mto any other transaction of purchase and sell of land. Further, except for the provision for roads no other amenity is created by the appellant on the land; this as per appellant was -bare necessity to demarcate the plots otherwise there would to have been any buyer of these plots. Another very important aspect ignored by the AO is that in the earlier year the appellant tried to sale the entire land to one person namely M/s. Golden Infra P. LTd. but the deal did not materialised and the advance of Rs.2 crore was returned back by the appellant. Hence, appellant was left with no option but to divide the land into smaller plots and sell tho'same. Also appellant had sold more number of plots in the earlier year i.e. in A.Y.2012-13, 2013-14 & 2014-15 and treated the resultant gain as LTCG which was a//owed by the AO in scrutiny assessment framed u/s. 143(3). This fact was also not disputed. 5.1.2 On going through the judgments relied upon by the AO it is observed that: (a) in the case of Smt. Indramani Bal vs. Add/. CIT (supra) assesses had purchased a piece of land for a sum of Rs. 10,620/- and shortly after purchasing the same divided it into four plots and sold that plots individually. The assesses were two wives of two brothers who were partners in a firm. They purchased the land by raising money out of sale of silver to the partnership firm of their husbands. It was held that the intention of the assesses while selling the land immediately after purchase was not holding the same as investment but selling it for a profit. In the case at hand appellant has purchased a running mill which was run for more then two years. Appellant is already engaged in the business of getting the cloth manufactured on outsource basis, the intention was to minimize the cost of manufacturing by running its own mill. Further, it was not the case of purchase of land as the mil! was purchased on the going concern basis along v/ith plant and machinery et al. These facts clearly distinguish the facts of the case at hand from the case of Smt. Indramani Bal (supra). (b) in the case of G. Venkateshwara Naidu & Co., relied upon by the AO the assesses firm had purchased four contiguous plots individually under four different sale leads adjoining the mills of the managed company. One plot was in the name of relative of the mill owner which was termed as benami property. No activity whatsoever was carried out on these plots between purchase and sale. Further, after purchase of the plots the same were sold immediately to the mill. It was held that the purpose of purchase of this land was to sell the same to the mill. In the case at hand appellant has purchased a running mill which was run by it for more than two years and hence the facts of both cases are different. (c) AO has further relied upon the case of Raja J. Rameshwar Rao, in this case Shri Rao who was a jagirdar in the former state of Hydrabad acquired 217 acres of land and "Makhta" of the village. On the acquired land he constructed a Ganj and Shops. On the balance land he laid out plots and sold the same. Assessee claimed expenses on the same as revenue expenditure treating the activity as one of "trade" which was allowed.In the case at hand there was no development on the mill land and the only activity carried out by the appellant was providing the roads which was an absolute necessity to demarcate the plots, hence, in the ratio of the judgment cannot be applied to the facts of this case.

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(d) AO has further relied upon the case of Premji Gopalbhai wherein the Hon'ble High Court of Gujarat held as under: "It is, therefore, clear that the burden of proving that the particular transaction was an adventure in the nature of trade is on the revenue. Of course, that burden can be discharged by pointing to circumstances which lead to the conclusion that the transaction is an adventure in the nature of trade However even if land which is not a commercial commodity is purchased and it can be shown that the purchase of the land was made solely and exclusively with an intention to resell it at a profit, it would be a strong factor that the transaction would be an adventure in the nature of trade. In the instant case no such strong factor emerges from the facts of the. case. It is not possible for us to hold that the assessee before us was a dealer in land or was treating land as his stock-in-trade. It may be pointed out that when the assessee sold different plots out of Survey No. 335 in the past, that is, prior to 1968-69, the profit realised by the assessee from those sales were treated as capital gains. It may also be emphasised that, as pointed out by the Tribunal, it was strongly urged before the Tribunal that even the sales out of the original holdings subsequent to the sales in question in 1968 and 1969 had been treated as realisation of capital asset resulting in capital gains and, hence, it is obvious that unlike Virani in D. S. Virani's case [1_973J 90 ITR 255 (Guj) this particular assessee before us was not a dealer in land. That is a strong circumstance in his favour and even in respect of subsequent sales he was not treated as a dealer in land. As regards the other circumstances to which Mr Patel for the assessee drew our attention they are the facts that the land of Survey No. 335 was an ancestral agricultural land of the assessee and it was in 1957-58 that the assessee converted this ancestral agricultural land into non-agricultural land and sub-divided the land into plots which he started gradually selling to different persons. The very fact that he repurchased plots out of original Survey No. 335 is a factor which goes in his favour. It was urged before the Tribunal and there seems to be considerable substance in that factor that the assessee was not a dealer in the past and was only disposing of his capital asset in the land and apart from this solitary instance of purchase and sale no other repurchase had been made by the assessee. The land was repurchased, according to the assessee, because it was adjacent to the land in which the existing building of the assessee stood. In any event, it seems to us that the revenue has not discharged the burden of establishing that the repurchase and sale of these two plots out of Survey No. 335 was an adventure in the nature of trade: it cannot be said in view of the totality of the circumstances of the case that this was the sole intention of the assessee at the time when he repurchased the land in 1964 to sell the two plots at a profit. Under these circumstances, the conclusion reached by the Tribunal that the amount of Rs. 23,627 should be treated as capital gains and assessed as such and not as profits is correct. Under these circumstances, the question referred to us is answered in the affirmative, that is, in favour of the assessee and against the revenue. The Commissioner will pay the costs of this reference to the assessee." In the above case assessee inherited agriculture land which was converted into nan agriculture land and divided into plots. A few plots were sold and repurchased by the assessee for the purpose of construction of the building but no construction took place and plots were .sold for certain gain. This was treated by the AO as business profits but the Hon'ble /TAT held the same to be capital gains which view was upheld by the Hon'ble High Court of Gujarat. the judgment in this case does not support the view of the AO.

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(e) AO has further relied upon the case of Khan Bahadur Ahmed Altadin & Sons vs. CIT. in this case the Hon'ble Andhra Pradesh High Court observed that appellant firm sold the factory within three months o purchase, also no evidence was adduced to prove that the factory was purchased for the purpose of establishing a cycle factory. In the case at hand appellant ran the mill for more than two years and shown the transaction of purchase as business transaction right from inception as all the assets were reflected in the respective block of assets. Further in the case of Khan Bahadur Ahmed Alladin & Sons the Hon'ble Supreme Court held as under: " (II) The question whether the transaction is an adventure in the nature if trade must be decided on a consideration of all the relevant facts and circumstances which are proved in the particular case. The answer to the question does not depend on the application of any abstract rule, principle or formula but must depend the total impression and effect of all the relevant facts and circumstances established in the particular case [442 H]." 5.1.3 it is contended that appellant has never entered into any of the transaction of purchase or sale of land/plots/houses etc., appellant was engaged in the business of textiles and is still continuing with that business. Accordingly, it is contended that a single instance of sale of mill land after dividing the same into plots for the aforesaid reasons cannot be construed as adventure in the business of real estate. Appellant vehemently argued that it was necessary for them to divide the land into smaller plots as they waited for the buyer of the entire plot for a considerable period since the appellant was not able to make any. profits due to labour problem had to dispose of the mill. Furthermore, the sale of part mill land in the earlier year i.e. in A.Y.2012-& 2013-14 was not treated as adventure in trade by the AO in the assessment framed u/s.143(3) of the Act. Appellant also relied on the following judgment in this reward: (a) Judgment of Hon'ble Delhi High Court in the case of CIT vs. Datmia Promoters Developers P. Ltd. 281 ITR 346 (Del). In this case, interest income was assessed as business income for earlier years and there was no material change in the facts in subsequent years. It was held ^ by the Hon'ble High Court that the view taken by the Departmenf for earlier ^O^ years should continue on principles of consistency. Similar view has been reiterated by the Hon'ble Delhi High Court in the case of CIT vs. Allied Finance Pvt. Ltd. 289 ITR 348. The relevant part of the ratio of this case is reproduced from the head note: "Even though the doctrine of res judicata is not applicable to tax proceedings, where an issue has been considered and decided consistently in a number of earlier assessment years in a particular manner, then for the sake of consistency, the same view should continue to prevail in subsequent years unless there is some material change in the facts" 5.1.4 AO has stated that the appellant Company has not furnished any supporting evidences and details in respect of cost of improvement claim by the appellant company. In this regard it is submitted by the appellant that the cost of improvement has already been accepted by the department in the AY 2013-14 and Ay 2014-15 both the assessment were completed u/s. 143(3) of the Act after detailed scrutiny and the part of this very land was sold and the resultant income was declared under the head LTCG. There is no cost of improvement claimed during this year which is matter of fact verifiable form the records of AO. AO has not given any specific details of cost of improvement claimed during the year under appeal but has simply taken the entire sale consideration as income. The cost of land has already been accepted by the department in the previous years while allowing the claim of appellant Company for Income from Capital gains, this is duly reflected in the Balance sheet since last so many years. Without considering the same the AO has presumed that the appellant Company has already recovered the cost of land and claimed all expenditure in respect of the same.

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5.1.5 In the case of Asst. Commissioner of Income Tax, Circle 2, Rajkot v/s Narendra J Bhimani [2018] 90 taxmann.com 329 (Rajkot - Trib) Hon'ble ITAT decided the similar issue in favour of the assesses. In that case the assesses purchased agriculture land in 1960. With passage of time and rapid urbanization, the said land being in residential area become non agricultural land. As a small size plots were required by end users in this area. Assessee divided the said land into small size plots to get market price. He solds plot of land, sale consideration was not plugged back in land investment and gain on sale on this plot was treated as Capital Gains and not an adventure in nature of trade. Facts of the case at hand are similar to the facts of this case. No cost of improvement has been claimed during the year. Moreover, appellant has sold many plots in the A.Y.2012-13, 2013-14 & 014-15 wherein cost of improvement is claimed and allowed in the assessment u/s. 143(3). The income from sale was also treated as LTCG by the AO. In view of the above facts and relying upon the judgments discussed above it is held that appellant is not engaged in the business of real estate and the income earned on sale of land during the year is rightly offered as income under the head Long Term Capital Gains. The cost of improvement claimed in the earlier years and allowed by the department has to be allowed for the purpose of indexation. The appeal on this ground is allowed." Facts of the case continue to be same without the transaction pertain to part of the same land, hence, I do not find any reason to deviate from my earlier findings and the income earned by the appellant from sale of the plots is directed to be treated as capital gains and the resultant capital gains is to be computed by as per law. In view of the above facts and relying upon the judgments discussed above it is held that appellant is not engaged in the business of real estate and the income earned on sale of land during the year is rightly offered as income under the head Long Term Capital Gains. The cost of improvement claimed in the earlier years and allowed by the department has to be allowed for the purpose of indexation. The appeal on this ground is allowed. In the result, appeal is partly allowed.

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Order pronounced in the Court on 22/06/2022 at Ahmedabad.

Sd/- Sd/- (MADHUMITA ROY) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER

(True Copy) Ahmedabad; Dated 22/06/2022 Manish