M/S SHREE GAVI SIDDESHWARA MINERALS ,BANGALORE vs. THE COMMISSIONE OF INCOME TAX (CENTRAL) , BANGALORE

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER

Assessment Appeal No. Appellant Respondent Year ITA No. M/s. Shree Gavi Siddeshwara The Deputy 2011-12 511/Bang/2019 Minerals, Commissioner of Income 101, Pride Elite, 10, Museum Tax, ITA No. Road, Central Circle – 1 (2), 2012-13 512/Bang/2019 Bangalore – 560 001. Bangalore. PAN: ABKFS3764L ITA No. M/s. Shree Gavi Siddeshwara The Assistant 2012-13 513/Bang/2019 Minerals, Commissioner of Income 101, Pride Elite, 10, Museum Tax, ITA No. Road, Central Circle – 1 (2), 2014-15 514/Bang/2019 Bangalore – 560 001. Bangalore. PAN: ABKFS3764L M/s. Shree Gavi Siddeshwara Minerals, The Commissioner of ITA No. 101, Pride Elite, 10, Museum Income Tax (Central), 2012-13 863/Bang/2017 Road, Bangalore. Bangalore – 560 001. PAN: ABKFS3764L : Shri K.R. Pradeep and Ms. Girija .G.P, Assessee by Advocates : Shri Pradeep Kumar, CIT (DR) & Revenue by Shri M. Rajasekhar, Addl. CIT (DR) Date of hearing : 18.07.2019 Date of Pronouncement : 20.09.2019

O R D E R Per Shri A.K. Garodia, Accountant Member Out of this bunch of five appeals, there is one appeal filed by the assessee for Assessment Year 2011-12. This appeal is filed by the assessee against the order of ld. CIT(A)-11, Bangalore dated 17.01.2019. Out of the remaining four appeals, three appeals are filed by the assessee for Assessment Year 2012-13, one appeal directed against the order of Pr.CIT (Central) dated 28.03.2017 passed by her u/s. 263 of the IT Act and these two appeals are directed against the combined order of ld. CIT(A)-11, Bangalore dated 17.01.2019 which are arising out of ITA No. 70/CIT(A)-11/BNG/2015-16 and ITA No. 391/CIT(A)-11/BNG/2017-18. Out of these two appeals filed before ld. CIT(A), one appeal i.e. ITA No. 391/CIT(A)- 11/BNG/2017-18 was filed on 16.10.2017 before ld. CIT(A) and this appeal was

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 2 of 25 directed against the order passed by the AO u/s. 143(3) r.w.s. 263 of the IT Act and the remaining one appeal is filed before ld. CIT(A) in ITA No. 70/CIT(A)- 11/BNG/2015-16 on 23.04.2015 against the original assessment order passed by the AO u/s. 143(3) of the IT Act. But in both the appeals filed before the Tribunal, the only issue on merit raised by assessee is regarding disallowance of depreciation amounting to Rs. 1,85,25,192/- in addition to the issue regarding charging of interest u/s. 234D of the IT Act of Rs. 11,18,296/- raised by the assessee in ITA No. 513/Bang/2019. The remaining one appeal i.e. ITA No. 514/Bang/2019 is for Assessment Year 2014-15 and the same is directed against the order of ld. CIT(A)- 11, Bangalore dated 17.01.2019. 2. The grounds raised by the assessee in ITA No. 511/Bang/2019 are as under. “1. That the order of the authorities below in so far as it is against the assessee is opposed to law, facts, circumstances, natural justice, equity all other known principles of law. 2. That the total income computed and the total tax computed is hereby disputed. 3. The authorities below erred in not providing sufficient and adequate opportunity to the appellant as required under law, thereby violating the principles of natural justice, hence the order requires to be cancelled. 4. That the notice, initiation and all subsequent proceedings u/s 148 is bad in law, is without jurisdiction, barred by limitation and requires to be cancelled. 5. The notice u/s 148 and service thereof is bad in law and the reassessment requires to be cancelled. 6. The conditions precedent to justify the reopening of the assessment u/s 147 of the Act being absent, the reopening of the assessment is bad in law and the reassessment requires to be cancelled. 7. That the order u/s 143(3) r.w.s.147 of the Act is bad in law, 8 the appellant had disclosed the material facts fully and truly necessary for assessment and there is no new or fresh information or evidence warranting reopening of the assessment. 8. That the entire reassessment proceedings violate the procedure prescribed by the Supreme Court in 259 ITR 19 for 148 proceedings. 9. The order is based on surmise, suspicion and conjuncture and is in

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 3 of 25 blatant disregard to the evidence on record, law, fact, and judicial pronouncement of higher authorities and courts, requires to be cancelled. 10. The authorities below has made no addition in respect of the issue for which notice u/s 148 was issued, thus the reassessment order passed is invalid and without jurisdiction as he had no jurisdiction to assess any other income. 11. The authorities below erred in disallowing depreciation amounting to Rs.2,47,00,256/-. 12. The appellant denies the liabilities of interest u/s 234B & 234C of the Act. Further prays that the interest if any should be levied only on returned income. 13. No opportunity has been given before levy of interest u/s 234B and 234C of the Act. 14. Without prejudice to the appellant's right of seeking waiver before appropriate authority, the appellant begs for consequential relief in the levy of interest u/s 234B and 234C of the Act. 15. For the above and other grounds and reasons which may be submitted during the course of hearing of the appeal, the assessee requests that the appeal be allowed as prayed and justice be rendered.” 3. The grounds raised by the assessee in ITA No. 512/Bang/2019 are as under. “1. That the order of the authorities below in so far as it is against the assessee is opposed to law, facts, circumstances, natural justice, equity all other known principles of law. 2. That the total income computed and the total tax computed is hereby disputed. 3. The order is based on surmise, suspicion and conjuncture and is in blatant disregard to the evidence on record, law, fact, and judicial pronouncement of higher authorities and courts, hence requires to be cancelled. 4. The authorities below erred in disallowing depreciation amounting to Rs.1,85,25,192/-. 5. For the above and other grounds and reasons which may be submitted during the course of hearing of the appeal, the assessee requests that the appeal be allowed as prayed and justice be rendered.” 4. The grounds raised by the assessee in ITA No. 513/Bang/2019 are as under. “1. That the order of the authorities below in so far as it is against the assessee is opposed to law, facts, circumstances, natural justice, equity

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 4 of 25 all other known principles of law. 2. That the total income computed and the total tax computed is hereby disputed. 3. The order is based on surmise, suspicion and conjuncture and is in blatant disregard to the evidence on record, law, fact, and judicial pronouncement of higher authorities and courts, hence requires to be cancelled. 4. The authorities below erred in disallowing depreciation amounting to Rs.1,85,25,192/-. 5. The authorities below erred in charging interest u/s 234D of the Act of Rs.11,18,296/-. 6. For the above and other grounds and reasons which may be submitted during the course of hearing of the appeal, the assessee requests that the appeal be allowed as prayed and justice be rendered.” 5. The grounds raised by the assessee in ITA No. 514/Bang/2019 are as under. “1. That the order of the authorities below in so far as it is against the assessee is opposed to law, facts, circumstances, natural justice, equity all other known principles of law. 2. That the total income computed and the total tax computed is hereby disputed. 3. The order is based on surmise, suspicion and conjuncture and is in blatant disregard to the evidence on record, law, fact, and judicial pronouncement of higher authorities and courts, hence requires to be cancelled. 4. The authorities below erred in disallowing depreciation amounting to Rs.1,04,20,420/-. 5. For the above and other grounds and reasons which may be submitted during the course of hearing of the appeal, the assessee requests that the appeal be allowed as prayed and justice be rendered.” 6. The grounds raised by the assessee in ITA No. 863/Bang/2017 are as under. “1. That the above order of the Commissioner of Income Tax in so far it is against the assessee is against the law, facts, circumstances, natural justice, equity and all other known principles of law. 2. The Learned CIT erred in assuming jurisdiction u/s 263 without first satisfying that the assessment order dated 24.03.2015 is erroneous and prejudicial to interest of revenue. 3. The Learned CIT erred in issuing notice u/s 263 when there was no

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 5 of 25 error prejudicial to the interest of revenue attracting proceedings u/s 263. 4. The Learned CIT erred in holding that order of assessment was erroneous and prejudicial to the interests of revenue. 5. The Learned CIT erred in assuming jurisdiction u/s 263 of the IT Act by issue of notice dt.10.05.2016 when the issue was a subject matter of appeal before the CIT-Appeals. 6. The order u/s 263 passed by the Learned CIT dt 28.03.2017 is against the law having regard to the facts, circumstances and law on the issue and hence liable to be cancelled as admittedly there were two views on the issue and when valid discretion is exercised no such order can be made. 7. The Learned CIT erred in issuing direction to the assessing officer to modify the assessment by withdrawing the deduction allowed u/s 35D of the Act. 8. The Learned CIT erred in issuing direction to the assessing officer to charge the interest leviable u/s 234D of the Act. 9. For the above and other grounds and reasons which may be submitted during the course of hearing of this appeal, the assessee requests that the appeal be allowed as prayed and justice be rendered.” 7. The ld. AR of assessee has filed the written submissions which are reproduced hereinbelow for ready reference. “With reference to the above mentioned case heard on 18.07.2019, the appellant submits this written submission as directed by the Hon'ble Bench: I)In ITA 511/B/19 for the AY 2011-12 on the issue of assessment being completed invoking the provisions of section 147 of the Act, the assessment made by the AO is not sustainable for the reasons below: - the reasons recorded by the AO for issue of notice u/s 148 ceased to survive as there was no material supporting escapement of income - when the foundation based on which the AO issued the notice u/s 148 became invalid, he could not assess any other subject matter to tax independently which had no connection with the reasons recorded -the disallowance of depreciation is a change of opinion and not part of reasons originally recorded. This being a new issue ought not to have been added. In this case, it is the view of the AO in the reasons recorded (PBI- I page 3) that as a result of under invoicing there is escapement of income by sale of iron ore by the assessee. Such a view was as a result of the agreement for raising and processing of iron ore dated

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 6 of 25 01.01.2008 between Sri.M.Srinivasulu/Shree Gavi Siddeshwara Minerals and Smt.Snehalatha Singhi. The said agreement was not acted upon and no extraction of iron ore took place as the assessee did not have any mining licence in its name. Please refer the assessee's objections to proceedings dt.10.03.2014 before the AO (PBI - I page 5, relevant page 7) and also assessee's submissions dt.14.03.2014 before the AO (PBI - I page 53). Upon considering the same no addition has been made by the AO in the assessment order dt.28.03.2014 on the issue of under invoicing as there was no escapement of income. Hence the notice issued u/s 148 of the Act became invalid. However, the AO chose to make addition on a completely new issue i.e., depreciation on Mining Lease and licence which did not have any live connection with the reasons recorded. Such an addition was made without issuing a fresh notice as per law. On this issue the assessee has relied on the decision of the Bombay High Court in the case of CIT vs Jet Airways (I) Ltd - 331 ITR 236 (PBI - I page 78, relevant page 86) wherein the Court has held as under: "21…….However, if after issuing a notice under s. 148, he accepted the contention of the assessee and holds that the income which he has initially formed a reason to believe had escaped assessment, has as a matter of fact not escaped assessment, it is not open to him independently to assess some other income. If he intends to do so, a fresh notice under s. 148 would be necessary, the legality of which would be tested in the event of a challenge by the assessee." The assessee has relied on the decision of the Delhi High Court in the case of Ranbaxy Laboratories Ltd vs CIT - 336 ITR 136 (PBI - I page 87, relevant page 95) wherein the Court concurring with the Jet Airways cited supra has held as under: " 21. In view of our above discussions, the Tribunal was right in holding that the AO had the jurisdiction to reassess issues other than the issues in respect of which proceedings are initiated but he was not so justified when the reasons for the initiation of those proceedings ceased to survive." The decisions of the Jet Airways & Ranbaxy Laboratories cited supra came up for consideration by the jurisdictional High Court in the case of N.Govindaraju vs ITO - 377 ITR 243 (PBI - 2 page 199, relevant page 211) and also relied on by the DR wherein the Court has observed as under: " 40. It is true that if the foundation goes, then the structure cannot remain. Meaning thereby, if notice has no sufficient reason or is invalid, no proceedings can be initiated. But the same can be checked at the initial stage by challenging the notice. If the notice is challenged and found to be valid, or where the notice is not at all

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 7 of 25 challenged, then in either case it cannot be said that notice is invalid. As such, if the notice is valid, then the foundation remains and the proceedings on the basis of such notice can go on. We may only reiterate here that once the proceedings have been initiated on a valid notice, it becomes the duty of the Assessing Officer to levy tax on the entire income (including 'any other income') which may have escaped assessment and comes to his notice during the course of the proceedings initiated under section 147 of the Act." The Hon'ble ITAT Bangalore in the case of Simplex Solutions P Ltd vs ITO - ITA 1339/B/18 (PBI-2 page 187, relevant page 197) after considering the above mentioned decisions of Jet Airways, Ranbaxy Laboratories & N. Govindaraju has observed as under: "10…...We are in agreement with the Ld. AR that if the foundation (reasons to believe/grounds referred therein ) on which the whole structure of additions were made is itself not sustainable in the eyes of law or it (reasons to believe/ grounds referred therein ) does not have any live connection with the additions made, in that eventuality no such additions is sustainable." The decision of the Bangalore ITAT clinches the issue in favour of the assessee. After considering the above decisions, since in this case the very foundation based on which the notice was issued is unsustainable in law, the assessment requires to be quashed in the interest of justice. II)On merits, the addition is made towards disallowance of depreciation on Mining lease and licence. The view of the AO is that since the assessee is not the owner of the mining lease, the expenditure incurred cannot be classified as intangible asset. Also since the mining lease is for a period of 20years the AO is of the view that the expenditure incurred has to be amortized and allowed at the rate of 1/20th. The AO for the AY 2012-13 however took a different view and invoked section 35D and amortised at the rate of 1/10th. The CIT-A similarly held the view of the AO that since the assessee is not the owner of the mines, depreciation is not allowable. The view of the AO & CIT-A is incorrect as the assessee has acquired the mining lease and licence rights for extraction of iron ore vide Mining Lease and Licence No.2552 granted by the Government of Karnataka. The Government by way of granting the mining lease and licence has given the assessee the right to extract iron ore in the Donimalai Range. Thus the assessee has become the owner of such right. The mining lease and licence acquired by the assessee for extraction of iron ore is in the nature of business or commercial right falling under the category of intangible asset eligible for depreciation u/s 32(1)(ii) of the Act.

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 8 of 25 Thus the Mining lease and licence is a capital asset which enables the assessee to do its business of Mining. On this issue the assessee has relied on the decision of the ITAT Delhi in the case of ONGC Videsh Ltd vs DCIT - 127 TTJ 497 (PBI - I page 100, relevant page 109,110) wherein the Tribunal in paras 14 & 14A has held as under: " 14…….If it is an asset being the right then it is obvious that same is commercial right, therefore in the nature of asset in the form of license. This right had been granted to the assessee by way of license and the assessee became owner of such right i.e., license to have an access and to carry on of business of exploration and development of mineral oil. Accordingly, as per our considered view such an asset falls within the category of asset falling under s. 32(1)(ii) of the Act. Accordingly, we are inclined to agree with the learned senior counsel that the assessee had acquired business and commercial right and license by making payment of Rs. 1,559.10 crores, which is in the nature of intangible assets entitled to claim of depreciation under s. 32(1)(ii) of the IT Act. 14A. In view of the above discussion assessee's claim for allowing deduction of entire expenditure of Rs. 1,559.10 crores is declined. The stand of CIT(A) in treating the alleged expenditure as deferred revenue expenditure and directing the AO to allow 1/19th of the expenditure during the year is also declined, since there is no concept of deferred revenue expenditure under IT Act. As we have treated the expenditure as capital in nature the same is eligible for claim of depreciation at the rates prescribed for the assets falling under s. 32(1)(ii) of the Act. We direct accordingly."

The assessee has relied on the decision of the Supreme Court in the case of Techno Shares & Stocks Ltd vs CIT - 327 ITR 323 (PBI - 2 page 227) wherein the Court has held as under: " ..... In view of Expin. 3 to s. 32(1)(ii) a commercial or business right which is similar to a "licence" or "franchise" is to be treated as an intangible asset—As per r. 5 of BSE Rules, membership is a personal permission from the Exchange which is nothing but a "licence" which enables the member to exercise rights and privileges attached thereto—It is this licence which enables the member to access the market—Therefore, the right of membership which includes right of nomination is a "licence" or akin to licence which is one of the items falling in s. 32(1)(ii)—Hence, depreciation is allowable on the cost of the Membership Card" The decision of the Supreme Court stated supra has also been relied upon by the Delhi Tribunal in the case of Container Corporation of India Ltd vs DCIT in ITA 5098 & 5101/De1/2014

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 9 of 25 dt. 31.05.2018 (PBI - 2 page 238, relevant page 244 & 245) wherein the tribunal on a similar issue has allowed depreciation. In this case the assessee had claimed depreciation on intangible asset of licence granted to the assessee for running container trains on Indian Railways Network for twenty years and the AO had observed that it was deferred revenue expenditure to be amortized over a period of 20 years. The Tribunal in para 7 paper book page 245 has held as under: "7…...It is observed that this Tribunal while deciding identical issue on similar facts held that license fee paid by assessee was to acquire a commercial right to operate trains on Indian Railway track for 20 years which was transferable. It is also observed that such right is significant to the business of assessee and without the license assessee could not have run its container on railway track. This Tribunal for A.Y. 200809 in assessee's own case vide order dated 18/01/2017 held that, commercial right acquired by assessee by way of this license for earning enduring benefit for a period of 20 years would amount to capital asset. It is also observed that this view of Tribunal derives support from decision of Hon'ble Delhi High Court in the case of Areva T&D India Ltd. vs. DCIT reported in 345 ITR 421. Under such circumstances respectfully following the same view, we hold that the intangible asset acquired by assessee is eligible for depreciation @ 25% u/s 32(1)(ii) of the Act." The Learned DR has relied on the decision of Hon'ble ITAT Cuttak Bench in the case of Mahanadi Coalfields Ltd vs DCIT in ITA 325 & 377/Ctk/2013 dt.19,03.2018 wherein the Bench has relied on the Bombay High Court decision in the case of Techno Shares & Stocks Ltd - 225 CTR 337 to deny depreciation. The said decision of the Bombay High Court has been reversed by the Hon'ble Supreme Court in 327 ITR 323 extracted supra. Hence the caselaw cited by the DR is not applicable and cannot be relied upon. The latest decision of Delhi ITAT in Container Corporation of India Ltd dt.31.05.2018 which relies on the decision of the Supreme Court in Techno Shares & Stocks Ltd represents the correct position of law and may be reckoned. Further the assessee has shown the said Intangible asset in the in the books of the appellant (PBI - 1 page 120) at a cost of Rs. 9,88,01,025/- and claimed depreciation at 25%. The breakup of the cost is as under: Particulars Amount (Rs.) Remarks Paid to Government of Karnataka 8,65,00,000 Refer Annexure D

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 10 of 25 72,62,800 Refer Annexure B Paid to Government of Karnataka & C Stamp duty and Registration charges paid to Sub-registrar of 1,05,690 Sandur for forest agreement registration Mining Lease Registration charges and Stamp duty paid to Sub- 49,32,533 Refer Annexure A registrar, Sandur Total 9,88,01,025 The depreciation was originally allowed in intimation u/s 143(1) dt.27.01.2012 for AY 201112 (PBI - 2 page 153). In support of the above, briefly the facts are as below: Shri.M.Srinivasulu was the holder of Mining Lease and Licence No.2552 granted by the Government of Karnataka - Department of Mines and Geology for a period of 20 years with effect from 03.07.2007 containing an area of 134 hectares in Donimalai Range, Sandur Taluk, Bellary for extraction of iron ore (copy of the mining lease is enclosed as Annexure A). An expenditure of Rs.9,96,43,470/- has been incurred towards acquisition of the said lease and licence, the break-up of which is available at Annexure A to the assessment order. This lease has been obtained upon fulfilment of the conditions outlined by the Government of India Ministry of Environment and Forests dt.13.09.2006 (copy of the letter enclosed as Annexure B) towards which an expenditure of Rs.9,43,51,400/- has been incurred. The letter of Sri.M.Srinivasulu dt.31.10.2006 to the Deputy Conservator of Forests, Bellary stating the fulfilment of conditions and requesting for grant of mining lease is enclosed as Annexure C for ready reference (copy of the letter is also enclosed to the assessment order). [Condition 1 - user agency shall transfer the cost of compensatory afforestation to the state forest department - Paid Rs.72,62,800/- towards the same. Condition 2 - fencing, protection and regeneration of the safety zone area shall be done Paid Rs.5,88,573/- towards the same. Condition 6 - state government shall charge the Net present value of the dead rent on area made available on lease under this proposal from the user agency as per orders of Supreme court - Paid Rs.8,65,00,000/- towards the same as per demand notice raised by the Conservator of Forests, Bellary (copy of demand notice enclosed as Annexure D).] It is upon fulfilment of such conditions, the Principal Chief Conservator of Forests vide letter dt.21.11.2006 moved the matter with the Government of India to . accord clearance under Forest Act towards making available 134 hectares of forest range on Lease in favour of M.Srinivasulu for extraction of iron ore (Annexure E). The Government notification dt.24.05.2007 sanctioning the lease in favour of Srinivasulu is at PBI — 2 page 157. Subsequently the

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 11 of 25 Mining lease was granted w.e.f 03.07.2007 (Annexure A). Apart from the above a sum of Rs.1.,05,690/- has been incurred towards Stamp duty and Registration charges paid to Sub-registrar of Sandur for forest agreement registration & A sum of Rs.49,32,535/- has been incurred towards Mining Lease Registration charges and Stamp duty paid to Sub-registrar, Sandur (Annexure A). Thus from the above it is evident that by complying with the conditions and incurring such cost as necessary, the Mining lease no.2552 for extraction of iron ore has been obtained. Sri.M.Srinivasulu a partner in Shree Gavi Siddeshwara Minerals transferred the said lease to the partnership firm Shree Gavi Siddeshwara Minerals vide Government order dt.15.01.2010 (PBI - 2 page 166) sanctioning the assignment on 27.01.2010. Enclosed as Annexure F for ready reference (Copy of the Transfer order is enclosed as Annexure D to assessment order & also available at PBI — 1 page 96). Upon transfer of Mining lease and licence to the appellant, the same has been considered as an intangible asset in the books of accounts. On the basis of the above details the AO has allowed 1/20th of Rs.9,88,01,025/- which is the same cost on which the assessee has claimed the depreciation. Thus the cost of acquisition is not an issue in dispute. In view of the above, it is requested that the assessee's claim of depreciation be allowed in the interest of justice and oblige. In summary all the assessee's appeals for various assessment years are as below: Appeal Appeal No. against Action of the AO Assessee's Prayer and AY order u/s The reassessment order AO disallowed ITA 143(3) being bad in law requires Depreciation and 511/B/19- rws to be quashed/Depreciation allowed amortisation AY 2011-12 147 may be allowed on the at 1/20th. Intangible asset. AO disallowed ITA Depreciation and Depreciation may be 512/B/19 143(3) allowed amortisation allowed on the Intangible AY 2012-13 as per section 35D at asset on WDV basis 1/10th

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 12 of 25

Since three views are possible (i.e., depreciation at 25%/ amortization at 1/20th/ application of section 35D and amortization at 1/10th) CIT directed AO to the order u/s 263 is not ITA withdraw amortisation maintainable. Reliance is 863/B/17 263 allowed u/s 35D at placed on the decisions of AY 2012-13 1/10th SC in Malabar Industrial and levy 234D interest Co Ltd (PBI - 2 page 253) and Karnataka High court in Sasken Communication Technologies Ltd (FBI - 2 page 259)

AO disallowed Depreciation may be ITA 143(3) Depreciation and allowed on 513/B/19 rws allowed the Intangible asset on AY 2012-13 263 amortisation at 1/20th WDV basis AO disallowed ITA Depreciation may be Depreciation and 514/B/19 143(3) allowed on the Intangible allowed amortisation AY 2014-15 asset on WDV basis at 1/20th 8. The ld. DR of revenue supported the orders of authorities below. It is also submitted that the reasons recorded by the AO for reopening is not relevant and, in this regard, he placed reliance on the judgment of Hon'ble Karnataka High Court rendered in the case of Shri N. Govindaraju Vs. ITO & Anr. as reported in (2015) 377 ITR 0243 (Karn), copy available on pages 199 to 213 of the paper book. In particular, he drawn our attention to para no. 44 of this judgment. 9. We have considered the rival submissions. First of all, we decide the appeal of the assessee for Assessment Year 2011-12 in ITA No. 511/Bang/2019. As per ground nos. 1 to 10 of this appeal, the issue in dispute is regarding validity of reassessment proceedings. We have already reproduced the written submissions filed by the assessee. First two pages of the written submissions are regarding validity of reassessment proceedings and the remaining pages

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 13 of 25 are regarding the issue on merit. As per page no. 2 of the written submissions as reproduced above, reliance was placed on the Tribunal order rendered in the case of Simplex Solutions P Ltd. Vs. ITO in ITA 1339/Bang/2018 copy available on pages 187 to 198 of the paper book. In the written submissions filed by the assessee as reproduced above, the ld. AR of assessee has reproduced only a part of para 10 of this Tribunal order. But we feel it proper to reproduce the entire para no. 10 of this Tribunal order from page 197 of the paper book. This para reads as under. “10. We have heard the rival contentions and perused the record. Without commenting upon the legal proposition canvassed before us with respect to the scope and ambit of reassessment proceedings u/s.148 of the Act, we deem it appropriate to remand the matter to the file of the CIT (A), as the CIT(A) had not decided these issues, with a direction to decide the ground no.1 and 2 raised before him on the basis of the legal proposition mentioned hereinabove by the assessee as well as the Revenue, as also any other judgment 'which comes to his notice and decide the issue in accordance with law. Needless to say it is for the assessee to establish that there is no live connection with the reasons for reopen and with the additions made by the AO. We are in agreement with the Ld. AR that if the foundation (reasons to believe/ grounds referred therein) on which the whole structure of additions were made is itself not sustainable in the eyes of law or it (reasons to believe/ grounds referred therein ) does not have any live connection with the additions made, in that eventuality no such additions is sustainable. However if the CIT (A) comes to the conclusion that there is a live connection and the reasons to reopen is interdependent and interwoven with the addition made then said additions are sustainable in the eyes of law.” 10. From above para, it comes out that in that case, the issue regarding validity of reopening of the assessment was restored back by the Tribunal to the file of ld. CIT(A) because earlier this issue was not decided by ld. CIT(A) and hence, in our considered opinion, this Tribunal order is not relevant for deciding the issue in the present case regarding the validity of reassessment proceedings. In addition to that, various other judgments are cited by ld. AR of assessee including that of Hon’ble Bombay High Court rendered in the case of CIT Vs. Jet Airways (I) Ltd. as reported in 331 ITR 236 and of Hon’ble Delhi High Court rendered in the case of Ranbaxy Laboratories Ltd. Vs. CIT as reported in 336 ITR 136 but the judgment of Hon'ble Karnataka High Court rendered in the case of Shri N. Govindaraju Vs. ITO & Anr. (supra) is available

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 14 of 25 before us and as per this judgment, it was held that reopening is valid. In that case also, it was noted in para 1 of the judgment that if the reasons for reopening are (a) and (b) and during fresh assessment proceedings u/s. 147 of the Act, income is found to have escaped from assessment for some other reason say (c) and (d), then, if reasons (a) and (b) do not survive and no addition can be made for such reasons, can additions be made on the basis of reasons or grounds (c) and (d). In the present case also, this is the objection of the assessee before us that reasons were recorded in respect of under invoicing and no addition has been made on that account and therefore, the reopening itself is not valid. In our considered opinion, the facts of present case are similar to the facts in the case of Shri N. Govindaraju Vs. ITO & Anr. (supra) and hence, respectfully following this judgment of Hon'ble Karnataka High Court, we decide this issue against the assessee and hold that the reopening is valid in the present case and accordingly ground nos. 1 to 10 are rejected. 11. As per ground no. 11 of this appeal, the issue in dispute is regarding disallowance of depreciation amounting to Rs. 2,47,00,256/-. The issue on merit is discussed and decided by ld. CIT(A) as per para nos. 18 to 22 of his order and these paras are reproduced hereinbelow for ready reference. “18. AO erred in treating expenditure incurred towards acquisition for mining lease as deferred revenue expenditure & AO erred in disallowing depreciation- It may be noted that one Mr. M. Srinivasulu was the original allottee of 134 hectares for extracting iron ore from Donimali Iron Ore Mines in Sandur Taluk, Bellary District of Karnataka. It is also noted that an amount of Rs. 9.93 crores was transferred to Sh. M. Srinivasulu by M/s Bharath Mines & Minerals through UTI Bank, Bellary. The amount was transferred from the account of M/s Bharath Mines & Minerals to M/s Bharat Mines & Minerals (spat Ltd (M/s BMMIL)on 31/12/2007 by a journal entry. This amount was shown as capital of M/s BMM (spat Ltd in the appellant's books being one of its partners. The said amcunt was shown as pre- operative and preliminary expense. 19. During assessment proceedings, AO held that the same cannot be classified as pre-operative and preliminary expenditure as appellant did not incur the said amount and that appellant was not owner of the said mine. It is noted that appellant had classified the said amount as intangible asset in its balance sheet as mining lease and licence and claimed depreciation @ 25 %.

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 15 of 25

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 16 of 25 amount of Rs. 49,32,535/- was paid for mining registration charges and stamp duty to Sub Registrar, Sandur. It is also noted by ld. CIT(A) that the AO has stated that the assessee has not shown that how the said expenditure can be classified as an intangible asset whereon depreciation can be claimed. He further noted that the amount was paid to Forest department for it to acquire compensatory afforestation and also as a Net Present Value. In course of hearing, the bench wanted to note regarding the nature and basis of this payment and in reply, it was submitted by ld. AR of assessee that the amount of Rs. 865 Lakhs was paid against demand notice dated 26.10.2006 as per which this amount was claimed towards net present value of the forest area diverted to the user agency as per the orders of Hon’ble Supreme Court dated 03.10.2002 and 01.08.2003 in IA No. 566 in WP (C) No. 202/1995 and as per the guidelines issued by the Ministry vide letter No. 5-1/1998-FC (Pt. II) dated 18.09.2003 and 22.09.2003 in this regard. He submitted that along with the written submissions filed by him, he will submit the relevant letter from Government of India, Ministry of Environment & Forests dated 13.09.2006 and also letter dated 31.10.2006 submitted by Shri M. Srinivasulu to the Deputy Conservator of Forests, Bellary Circle, Bellary and the demand notice dated 26.10.2006 as per which a demand of Rs. 865 Lakhs has been raised. Along with the written submissions filed by ld. AR of assessee, these documents have been submitted and from the same, it is seen that Rs. 865 Lakhs has been recovered from the assessee on account of net present value of the forest area of 134 ha. Diverted to the assessee for mining purpose and this net present value has been fixed as per Government order dated 17.01.2004 at different rates for different types of forest area as per the details given in demand notice dated 26.10.2006 and for ready reference, we reproduce the contents of this demand notice as under. “ DEMAND NOTICE Sub:- Diversion of 134 ha. of forest land in favour of M/s M.Srinivasulu for extraction of Iron Ore Mining in Donimalai Reserve Forest, Sandur taluk, Bellary Recovery of Net Present Value. Ref:- 1) Letter No.F No.8-672006-FC dated 13-09-2006 of Government of India, MOEF New Delhi.

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 17 of 25 2) Letter No FEE-72. FFM-2006 dated 19-9-2006 of Government of Karnataka 3) Letter No A5(1)MNG-CR-39/2006 dated 26-9-2006 of Principal Chief Conservator of Forests, Bangalore. 4) This office letter of even No. dated:27-9-2006 5) Letter No. M2-MNG-MS-NPV/2006-07 Dated 25-10-2006 of the Deputy Conservator of Forests Bellary Division. Bellary Referring to the above and as per the directions issued by the Principal Chief Conservator of Forests, Bangalore under reference (3) cited above, the Deputy Conservator of Forests, Bellary division, Bellary was instructed to submit the compliance report on the conditions as imposed by the Government of India in their letter 1 referred above. 2) Accordingly the Deputy Conservator of Forests, Bellary division, Bellary has inspected the said forest area in question on 18-10-2006 and reported the extent of different categories of forest land over an extent of 134 ha as approved under section 2 of the Forest (Conservation) Act. 1980 by the Government of India. Based on the report submitted by the Deputy Conservator of Forests. Bellary in his letter dated 25-10-2006 the Net Present Value to be paid for the said area is assessed arid shown, in the table below: Table showing the Calculation of Net Present Value Amount NPV fixed to be Extent in as per Sl.No. Particulars recovered Ha. G.O. dt: Rs. (in 17-1-2004 lakhs) Rocky area without 1 31.50 5.80 182.70 vegetation Grassy blanks in 2 dry zone with some 46.00 6.20 285.20 ground cover Dry scrub and Dry 3 thorn forest with 35.00 6.80 238.00 density below 0.1 Dry deciduous 4 forest with density 21.50 7.40 159.10 0.1 and above Total 134.00 865.00 3) Therefore, you are hereby requested to pay a sum of Rs 865.00 (Rupees Eight crores sixty five lakhs) only being the Net Present Value of the forest land of 134 ha. under different categories as prescribed by the Government of Karnataka in their Notification No:FEE-247-FGL- 2002 dated: 17-1-2004. The above amount of Net Present value should

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 18 of 25 be paid in the form of Demand Draft drawn in favour of the Principal Chief Conservator of Forests. Bangalore at any Nationalized Banks. within 15 days from the date of receipt of this demand notice.” 13. As per the letter dated 13.09.2006 issued by the Government of India, Ministry of Environment and Forests (F.C. Division), it is stated that this land of 134 ha. of forest land was diverted in favour of M/s. M. Srinivasulu Iron Ore Mining in Donimalai RF, Sandur Taluk, in Bellary district of Karnataka subject to various conditions and one such condition is this that the User Agency shall transfer the cost of Compensatory Afforestation to the State Forest Department. As per para 6 of this letter it is specified that the State Government shall charge the Net Present Value of the forest area diverted under this proposal from the User Agency as per the orders of the Hon’ble Supreme Court of India dated 30.10.2002 and 01.08.2003. Hence, it is seen that the payment in question is on account of net present value of the cost of Compensatory Afforestation to be incurred by the State Forest Department. In our considered opinion, this is not an acquisition of any intangible assets by the assessee. In our considered opinion, as per this mining license granted by the Government of India along with the Government of Karnataka, the payment in question is for cost of Compensatory Afforestation to the State Forest Department and not for acquiring any intangible asset. For ready reference, we reproduce the contents of this letter dated 13.09.2006 and the same are as under. “ F. No. 8-67/2006-FC Government of India Ministry of Environment and Forests (F.C. Division) Paryavaran Bhawan, CGO Complex, Lodhi Road, New Delhi - 110003. Dated: 13th September 2006. To Principal Secretary to Government, Forest, Ecology and Environment Department, Karnataka Government Secretariat, M.S. Building, Bangalore. Sub: Diversion of 134.00 ha of forest land in favour of M/s M.

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 19 of 25 Srinivasulu iron Ore Mining in Donimalai RF, Sandur Taluk, in Bellary district of Karnataka. Sir, I am directed to refer to the State Government's letter No. FEE 72 FFM 2006 on the subject mentioned above seeking prior approval of the Central Government under Section-2 of the Forest (Conservation) Act, 1980, and to say that the proposal has been examined by the Forest Advisory Committee constituted by the Central Government under Section-3 of the said Act. After careful examination of the proposal of the State Government, and on the basis of the recommendations of the Forest Advisory Committee, in-principle approval of the Central Government is hereby granted for diversion of 134.00 ha of forest land in favour of Mis M. Srinivasulu Iron Ore Mining in Donimalai RF. Sandur Taluk, in Bellary district of Karnataka subject to fulfilment of the following conditions: 1. (i) The User Agency shall identify and acquire equal extent of non- forest land for Compensatory Afforestation, which shall be mutated in favour of the State Forest Department. (ii) The land identified for the purpose of CA shall be clearly depicted on a Survey of India toposheet of 1:50,000 scale. (iii) The User Agency shall transfer the cost of Compensatory Afforestation to the State Forest Department. (iv) The non-forest land identified for raising Compensatory Afforestation shall be notified by the State Government as RF under Section-4 or PF under Section-29 of the Indian Forest Act, 1927 or under the relevant Section(s) of the local Forest Act. as the case may be, within a period of six months. The Nodal Officer (Forest Conservation) shall report compliance in this regard. (v) CA scheme shall be prepared with proper earmarking of fund for planting, and maintenance for at least five years. 2. Fencing, protection and regeneration of the safety zone area (7.5 metre strip all along the outer boundary of the mining lease area) shall be done at the project cost. Besides this. afforestation on degraded forest land, to be selected elsewhere, measuring one and a half times the area under safety zone, shall also be done at the project cost. 3. Following activities shall be undertaken by the State Forest Department at the project cost: (i) Proper mitigation measures to minimize soil erosion and choking of streams shall be prepared. (ii) Planting up of all vacant land and clumps with suitably. species to

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 20 of 25 arrest soil erosion and its protection. (iii) Construction of a series of check dams and toe walls along the contour on the hill slopes to avoid rolling down of the excavated material. 4. Wherever possible and technically feasible, the User Agency shall in collaboration with the local community undertake afforestation measures in the blanks within the lease area, as well as along the roads outside the lease area diverted under this approval, in consultation with the State Forest Department at the project cost. 5. The period of diversion under this approval shall be twenty (20) years subject to possession of valid lease by the User Agency under the MMDR Act, 1957. 6. The State Government shall charge the Net Present Value of the forest area diverted under this proposal from the User Agency as per the Orders of the Hon'ble Supreme Court or India dated 30.10.2002 and 01.08.2003 in IA No. 566 ill WP (C) No. 202/1995 and as per the guidelines issued by this Ministry vide letters No. 5-1/1 998-FC (Pt. II) dated 18.09.2003 and 22,09,2003 in this regard. 7. Additional amount of the Net Present value (NPV) of the diverted forest land, if any, becoming due after finalisation of the same by the Hon`ble Supreme Court of India on receipt of the report from the Expert Committee, shall be charted by the State Government from the User Agency. The User Agency shall furnish an undertaking to this effect. 8. All the funds received from the User Agency under the project shall be transferred to Ad-hoc CAMPA in account number CA 1582 of Corporation Bank, Block-11, CGO Complex. Phase-1, Lodhi Road, New Delhi - 110 003. 9. After receipt of the compliance report on fulfilment of the conditions mentioned above, the proposal shall be considered for final approval under Section-2 of the Forest (Conservation) Act, 1980. 10. Transfer of forest land shall not be effected till final approval is granted by the Central Government in this regard.” 14. As per the above letter, it is seen that diversion of 134 ha. of forest land in favour of the assessee was subject to certain conditions and one of the condition was that the User Agency i.e. the assessee shall identify and acquire equal extent of non-forest land for Compensatory Afforestation, which shall be mutated in favour of the State Forest Department. This was the second condition that the land identified for the purpose of Compensatory

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 21 of 25 Afforestation shall be clearly depicted on a Survey of India toposheet of 1:50,000 scale and the third condition is this that the User Agency shall transfer the cost of Compensatory Afforestation to the State Forest Department. As per condition no. 6, this was the condition that the State Government shall charge the Net Present Value of the forest area diverted under the proposal from the User Agency as per the Orders of the Hon’ble Supreme Court of India dated 30.10.2002 and 01.08.2003. As per letter dated 31.10.2006 which is submitted by assessee to the Deputy Conservator of Forests, Bellary Circle, Bellary, it is stated that the assessee has made cost of Compensatory Afforestation to the State Forest Department for 134 Ha. @ Rs. 54,200/ha and total amount of Rs. 72,62,800/- was paid by way of Demand Draft No. 8065 drawn at UTI Bank, Bellary Branch, Karnataka in favour of Principal Chief Conservator of Forests, Bangalore. The demand notice dated 20.10.2006 was raised raising demand of Rs. 865 Lakhs being the net present value of forest land of 134 ha. under different categories as prescribed by Government of Karnataka in Notification No. FEE-247-FGL- 2002 dated 17.01.2004. Hence, in our considered opinion, this payment of Rs. 865 Lakhs and Rs. 72,62,800/- is not for acquiring any intangible assets by assessee but the net present value of the Compensatory Afforestation to be incurred by the State Government later on. Deduction of this amount is already allowed by the AO to the extent of 1/20 of this expenditure incurred by the assessee although the assessee’s claim is this that this is an intangible asset on which depreciation should be allowed. This stand of the AO is supported by the judgment of the Hon’ble Apex Court rendered in the case of Madras Industrial Investment Corporation Ltd. Vs. CIT as reported in 225 ITR 802 in which it was held that discount on debenture is revenue expenditure allowable proportionately over the life of debentures. In the present case, the issue is not regarding discount on debentures but the cost of Compensatory Afforestation of 134 ha. of forest land for which the assessee has got mining right for 20 years and therefore, in our considered opinion, no intangible asset has been acquired by the assessee on which depreciation can be allowed and the stand of the AO to allow this expenditure to the extent of 1/20 in in line with this judgment of Hon’ble Apex Court. Hence in our

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 22 of 25 considered opinion, no interference is called for in the order of ld. CIT(A) on this issue. 15. Before parting, we would like to deal with the written submissions of ld. AR of assessee on merit. The first contention raised in the written submission is this that the assessee has acquired the mining lease and license for extraction of Iron Ore and license no. 2552 was granted by the Government of Karnataka. This is true that mining lease has been obtained by the assessee but the impugned payment of Rs. 9,43,51,400/- paid to Chief Conservator of Forests was not on account of acquiring mining lease and right for extraction of iron ore by mining lease. This payment is on account of Compensatory Afforestation in future for which present net value has been paid by assessee to State Forest department and hence, this argument has no merit. Reliance has been placed on a Tribunal order rendered in the case of ONGC Videsh Ltd. Vs. DCIT as reported in (2010) 37 SOT 0097, copy available on pages 100 to 111 of the paper book. In that case, as per the facts noted by the Tribunal in para 2 of this Tribunal order, it is noted that the consortium members commenced hydrocarbons operations in the Sakhalin Block and they held 40% interest in the hydrocarbon project. Later on, the assignment agreement dated 10.02.2001 was entered into and as per this agreement, 50% of their share in the Sakhalin PSA and in a joint operating agreement to OVI for a consideration of Rs. 15,590.96 million. Consequent to the acquisition of such rights and licenses, the assessee became a consortium member and the assignors were relieved from obligation under the Sakhalin PSA to that extent. The dispute in that case was regarding this that the rights and licenses acquired by that assessee, it was claimed that it is intangible asset and on it, depreciation @ 25% should be allowed. This claim was rejected by the AO and also by ld. CIT(A). The Tribunal decided the issue in favour of the assessee on this basis that the assessee has acquired business/commercial rights of similar measure. In the present case, we have seen that the impugned expenditure is not for acquiring any intangible asset but the payment of net present value of Compensatory Afforestation in future for which deduction is allowed by the AO to the extent of 1/20 in the present year because the assessee is eligible for carrying on

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 23 of 25 mining activities for 20 years. Hence, in our considered opinion, this Tribunal order does not help the assessee in the present case. Various other Tribunal orders are also cited by ld. AR of assessee. In our considered opinion, these Tribunal orders are also not applicable in the present case because the facts are different. 16. In the result, the appeal filed by the assessee for Assessment Year 2011-12 in ITA No. 511/Bang/2019 is dismissed. 17. Now we take up the appeals for A. Y. 2012 – 13. For this year, one appeal in ITA No. 863/B/2017 is directed against the order passed by CIT u/s 263. Regarding this appeal, as per the written submissions filed by the learned AR of the assessee as reproduced above, this is the contention raised that three views are possible being (1) Depreciation @ 25%, (2) Amortisation @ 1/20 and (3) Application of section 35D and amortisation @ 1/10 and therefore, the order of CIT u/s 263 is bad in law. Reliance was placed on a judgment of Hon’ble apex court rendered in the case of Malabar Industrial Co. Ltd., 243 ITR 83 and on a judgment of Hon’ble Karnataka High Court rendered in the case of CIT vs. Sasken Communication Technologies Ltd. As reported in 231 Taxmann 47. Learned DR of the revenue supported the order of CIT. 18. We have considered the rival submissions. We find that as per Para 8 of his order, it is noted by CIT that the AO has categorically held that the expenditure incurred by the assessee for obtaining the mining lease licence cannot be categorised as preliminary and preoperative expenditure. The objection of CIT is this that having held so, the AO erred in allowing the expenditure to be amortised as per the provisions of section 35D because this section relates to amortisation of preliminary expenditure and hence, the AO has failed to apply the law correctly. This finding of CIT could not be controverted by the learned AR of the assessee and hence, we find no infirmity in the order of CIT. The judgments cited by the learned AR of the assessee do not render any help to the assessee in the present case. In fact, Para 5 of the judgment of Hon’ble apex court in the case cited above supports the case of the revenue. In this para, it was held that an incorrect assumption of facts or incorrect application of law will satisfy the requirement of the order being erroneous. In the present case, once the AO held that the expenditure

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 24 of 25 incurred by the assessee for obtaining the mining lease licence cannot be categorised as preliminary and preoperative expenditure and thereafter, allowing amortisation u/s 35 D is nothing but incorrect application of law. In the case of CIT vs. Sasken Communication Technologies Ltd. (Supra), it is noted by Hon’ble Karnataka High Court that at the relevant point of time, two views were existing on the word “profit” in section 80HHC and this section was amended eleven times and there was a great complication and hence, two views were inherently possible and hence, subsequent amendment in the year 2005 even though retrospective would not attract the provisions of section 263. In the present case, the facts are entirely different and therefore, in our considered opinion, this judgment also does not render any help to the assessee in the present case. 19. In view of the above discussion, we find no infirmity in the order of CIT u/s 263. 20. In the result, the appeal of the assessee for A. Y. 2012 – 13 in ITA No. 863/Bang/2017 is also dismissed. 21. For A. Y. 2012 – 13, two more appeals are filed by the assessee. In these appeals, the issue raised is about disallowance of Rs. 185,25,192/- claimed by the assessee as depreciation. Second issue raised is about interest charged u/s 234 D of Rs. 11,18,296/-. But in the written submissions filed by the learned AR of the assessee as reproduced above, there is no argument or prayer about charging of interest u/s 234 D of Rs. 11,18,296/-. Hence, we infer that this issue about interest u/s 234D is not pressed. Otherwise also, this issue is consequential. The issue about disallowance of depreciation is already decided by us while deciding the appeal of the assessee for A. Y. 2011 – 12 and since, there is no difference in facts, on the same line, in the present year also, this issue is decided against the assessee. 22. In the result, both these appeals of the assessee for A. Y. 2012 – 13 in ITA No. 512 & 513/Bang/2019 are also dismissed. 23. Now, we are left with one appeal of the assessee for A. Y. 2014 – 15 in ITA No. 514/Bang/2019. In this year, there is only one issue about disallowance of Rs. 104,20,420/- claimed by the assessee as depreciation. The issue about disallowance of depreciation is already decided by us while deciding the

ITA Nos. 511 to 514/Bang/2019 & 863/Bang/2017 Page 25 of 25 appeals of the assessee for A. Y. 2011 – 12 & 2012 – 13 and since, there is no difference in facts, on the same line, in the present year also, this issue is decided against the assessee. 24. In the result, the appeal of the assessee for A. Y. 2014 – 15 in ITA No. 514/Bang/2019 is also dismissed. 25. In the combined result, all these five appeals filed by the assessee are dismissed. Order pronounced in the open court on the date mentioned on the caption page.

Sd/- Sd/- (PAVAN KUMAR GADALE) (ARUN KUMAR GARODIA) Judicial Member Accountant Member Bangalore, Dated, the 20th September, 2019. /MS/ Copy to: 1. Appellant 4. CIT(A) 2. Respondent 5. DR, ITAT, Bangalore 3. CIT 6. Guard file By order

Assistant Registrar, Income Tax Appellate Tribunal, Bangalore.