DCIT, CIRCLE - 11, KOLKATA, KOLKATA vs. M/S. I M C LTD, KOLKATA

आदेश /O R D E R

PER Waseem Ahmed, Accountant Member:-

These Cross-appeals ITA No.813 & 781/Kol/2009 are filed by the assessee and Revenue against the order of Commissioner of Income Tax

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 2 (Appeals)-XI, [CIT(A) for short] Kolkata dated 27.02.2009 and remaining two appeals filed by the Revenue against the order of Ld. CIT(A)-XIX, Kolkata dated 26.12.2011. Assessments were framed by DCIT, Circle-11, Kolkata u/s 143(3)/115JB of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide their orders dated 31.12.2007, 31.12.2008 and 31.12.2009 for assessment years 2005-06, 2006-07 & 2007-08 respectively.

Shri J.P. Khaitan, Ld. Authorized Representative appeared on behalf of assessee and Shri G.Mallikarjuna & Shri Rajat Kumar Kureel, Ld. Departmental Representatives appeared on behalf of Revenue.

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 3

5(a) That on the facts and the circumstances of the case, the CIT(Appeals) erred in confirming the decision of the AO in charging interest under Section 234B of the Act. 5(b) That the CIT(Appeals)erred in not appreciating that the interest under section 234B is not chargeable if the assessee pays taxes under MAT provisions. 6. That the appellant craves leave to add to and/or alter, amend, modify or rescind the grounds hereinabove before or at the hearing of this appeal.”

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 4 Being aggrieved by this, assessee has come up in appeal before us.

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 5 directed to restrict the disallowance under section 14A of the Act to 1% of the exempt income for normal computation of income as well under section 115JB of the Act. The disallowance under section 14A would be added in the book profit under section 115JB of the Act in terms of the clause (f) to explanation 1 of section 115JB of the Act as decided by the Hon’ble Mumbai ITAT Benches in the case of DCIT Vs. Viraj Profiles Limited ITA No. 4439/Mum/2013 Assessment year 2008-09 vide order dated 21.10.2015. The relevant extract of the order is reproduced below :

“We have observed that Section 115JB of the Act starts with non-obstante clause 'Notwithstanding anything contained in any other provision in this act..." meaning thereby that the Section 115JBshall be applicable notwithstanding anything contained in any other provision of the Act and shall have over-riding effect upon other provisions of the Act. The Section 115JB stipulates payment of Minimum Alternate tax based upon the book profit computed as per provisions of Section 115JB(2) of the Act. Book Profit shall be computed as per Section 115JB(2) of the Act which stipulate that Book Profit means net profit as shown in Profit and Loss Account prepared for financial year in accordance with Part II and III of Schedule VI to the Companies Act,1956 , also complying with other conditions as stipulated in Section 115JB(2) of the Act . Such book profit has to be increased by item Nos. (a) to (k) of the said Explanation 1 to Section 115JB of the Act if they are debited to the Profit and Loss Account and from such profit item Nos. (i) to (viii) of the Explanation are to be reduced. The figure arrived at after the above exercise is the book profit of the assessee for the relevant previous years.

The explanation 1 clause (f) to Section 115JB(2) of the Act stipulate that amount of expenditure relatable to any exempt income, other than Section 10(38) of the Act, is liable to be added back to net profit shown in Profit and Loss Account if the amount referred to therein is debited to Profit and Loss Account.

Now, we refer to Section 14A of the Act which reads as under: "Expenditure incurred in relation to income not includible in total income

For the purposes of computing the total income under this Chapter, no deduction shall be allowed in respect of expenditure incurred by assessee in relation to income which does not form part of the total income under this Act.] The Assessing Officer shall determine the amount of expenditure incurred in relation to such income which does not form part of the total income under this Act in accordance with such method as may be prescribed90, if the Assessing Officer, having regard to the accounts of the assessee, is not satisfied with the correctness of the claim of the assessee in respect of such

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 6 expenditure in relation to income which does not form part of the total income under this Act.

(3) The provisions of sub-section (2) shall also apply in relation to a case where an assessee claims that no expenditure has been incurred by him in relation to income which does not form part of the total income under this Act Provided that nothing contained in this section shall empower the Assessing Officer either to reassess under section 147 or pass an order enhancing the assessment or reducing a refund already made or otherwise increasing the liability of the assessee under section 154, for any assessment year beginning on or before the 1st day of April, 2001.]"

Perusal of Section 14A of the Act provides that it mandates disallowance of expenditure 'in relation' to the income which does not form part of the total income under the Act while clause (f) in explanation1 to Section 115JB (2) of the Act mandates disallowance of expenditure 'relatable' to the income to which Section 10 (other than Section 10(38) of the Act) or Section 11 or Section 12of the Act applies . The close perusal of the both the above provisions reveals that more or less similar language is used in both the afore- stated provisions. The dividend income is declared on the share investment which is exempt u/s 10(33) of the Act (not Section 10(38) of the Act) . We also note that the clause (f) to explanation 1 to Section 115JB(2) of the Act requires expenditure relatable to the exempt income to be disallowed provided the same is debited to Profit and Loss Account while Section14A(2) of the Act mandates that if the AO is not satisfied with the correctness of the claim of the assessee with regard to the expenditure incurred by the assessee in relation to the income which does not form part of the total income , then disallowance shall be computed in accordance with the prescribed method. Rule 8D of Income Tax Rules, 1962 prescribes the method for computing disallowance of expenditure in relation to earning of exempt income . The said Rule 8D of Income Tax Act,1961 is a machinery provision to compute disallowance of expenditure u/s 14 A of the Act in relation to the income which does not form part of the total income and is held to be applicable w.e.f. assessment year 2008-09 as held by Hon'ble Bombay High Court in Godrej and Boyce Manufacturing Limited(supra) decision . The impugned assessment year under appeal in present case is also assessment year 2008- 09 and hence Section 14A of the Act read with Rule 8D of Income Tax Rules,1962 is applicable. It is axiomatic to assume that the amount computed under Section 14A of the Act read with Rule 8D of Income Tax Rules, 1962 shall have no reference to the amount debited to the Profit and Loss Account and there cannot be any disallowance u/s 14A of the Act unless the expenditure is debited to Profit and Loss Account and hence disallowance u/s 14A is always a part of expenditure debited to the Profit and Loss Account. In the instant case under appeal, the AO has disallowed the expenditure of Rs.73,07,018 computed u/s 14A of the Act read with Rule 8D of Income Tax Rules , 1962 for computing normal taxable income which is upheld by the CIT(A) in the first appeal and the same amount of expenditure of Rs.73,07,018/- is added to compute book profit u/s 115JB of the Act which is computed u/s 14A of the Act read with Rule 8D of Income Tax Rules,1962.”

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 7 Respectfully following the proposition laid down by the Hon’ble Tribunal we direct the AO to make the addition of the amount of disallowance under section 14A of the Act read with rule 8D of Income Tax Rules 1962 to the total income of the assessee under the normal provisions and under the provisions of the MAT as specified under section 115JB of the Act. Hence this ground of appeal of the assessee is partly allowed.

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 8 the FTZ authority there. Subsequently, it dropped the idea of the JV and the amount was written off. Even if the JV had taken off, such a payment would not be revenue expenditure. When the JV did not take off and the amount was written off, there is no way it can be allowed as a deduction. It was a capital loss. Similarly, the other advances are also prima-facie not on revenue account and, hence, deduction for the same cannot be allowed. In view of the foregoing discussion, the addition related to loans and advances written off is confirmed. As a result, the amount of addition under this item is reduced to Rs.5,60,337.-.”

Aggrieved by this, assessee has come up in appeal before us.

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 9 Therefore all the losses were in the nature of capital losses which are not allowable as deduction under the Act. However on perusal of the advances given by the assessee the details of which are placed on page 23 of the paper book, we find that most of the advances were given in the course of the business of the assessee. However out of the said amount one major amount was of Rs.4,41,089.00 which was incurred in connection with the establishment of a joint venture company in Dubai. The said amount represents the fees paid to FTZ authority, Dubai for obtaining some regulatory permission. But subsequently the idea of JV was dropped and accordingly the fee paid to FTZ was claimed as deduction. From the perusal of record we find that the assessee wanted to establish a joint venture company in Dubai with UTC which is already based in Dubai. For this purpose a memorandum of understanding (for short MOU) was made dated 24/2/2004. The activity of this JV was identical as of the assessee as evident from the MOU which is placed on pages 72-76 of the paper book which reads as under:- “WHEREAS UTC, a company incorporated in Dubai trading in industrial and water treatment chemicals fertilizers, agrochemicals and plastic raw materials, desires to have a common-user bulk liquid storage terminal facility at Hamriyah Free Zone (HEZ), located in Hamriyah Port Dubai for receipt storage and distribution of liquid products (hereinafter referred to as the “Project”. IMC, the leading independent bulk liquid/gas storage company in India having vast experience in construction and management of third party bulk liquid storage tank terminals, is interested to construct and mange the proposed bulk liquid storage terminal at HFZ IMC & UTC will have a JV setup to build and operate a common bulk chemicals storage facility as mentioned below. UTC and IMC have expressed their desire to form a Joint Venture Company (JVC) for setting up the Project and expressed their willingness to co-operate and carry out their respective roles in the project. NOW therefore, UTC and IMC hereby enter into a Memorandum of Understanding JVC thereafter referred to as MoU and agree to the following terms.”

Thus from the above it is clear that the assessee wanted to expand its existing business by establishing the joint venture company with UTC in Dubai. In view

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 10 of the above it can be inferred that the loss was incurred by the assessee in the course of the business. In holding so we take the guidance and support from the judgment of Hon’ble Calcutta High Court in the case CIT Vs. ITC Limited reported in 63 taxmann.com 176 wherein it was held as under : “7. In so far as the question no.4 is concerned, reference may be made to the views expressed by the CIT (Appeal) which include, inter alia, as follows:— "The appellant company during the course of appellate proceedings has contended that the claim is off revenue nature and was allowable u/s.28/37 (1) of the Income Tax Act 1961. The appellant has strongly relied upon the decision of the Hon'ble I.T.A.T. for the assessment year 1991-92 in the appellant's own case wherein the Ld. ITAT relying upon the judgement of the Hon'ble Supreme Court in the case of CIT v. Mysore Sugar Co. Ltd.(46 ITR 649 ) held that the write off of trade advances were allowable deduction u/s.28 of the Income Tax Act 1961 since such expenses were incurred in the normal course of business. The details of amount written off have been examined and it is observed that all the advances (now) written off by the appellant company were incidental to the business of the appellant and any loss due to non recovery should be allowable as deduction for the computation of profits and gains of business. Accordingly, the disallowance/addition of Rs.25,26,811/- made by the Assessing Officer is deleted. This ground of appeal is allowed. " 8. The learned Tribunal approved the findings without any independent discussions on the subject. Therefore, the finding of fact that the advances written off were incidental to the business of the appellant has remained unshaken. 9. The C.I.T (A) in allowing the claim for deduction of the amount which had been written off, relied on a judgment in the case of CIT v. Mysore Sugar Co. Ltd. [1962] 46 ITR 649 (SC) wherein their Lordships held that:— " ……but the general scheme of the section is that profits or gains must be calculated after deducting outgoings reasonably attributable as business expenditure but so as not to deduct any portion of an expenditure of a capital nature. If an expenditure comes within any of the enumerated classes of allowances, the case can be considered under the appropriate class; but there may be an expenditure which, though not exactly covered by any of the enumerated classes, may have to be considered in finding out the true assessable profits or gains. This was laid down by the Privy Council in Commissioner of Income-tax v. Chitnavis, and has been accepted by this court. In other words, section 10(2) does not deal exhaustively with the deductions, which must be made to arrive at the true profits and gains. To find out whether an expenditure is on the capital account or on revenue, one must consider the expenditure in relation to the business. Since all payments reduce capital in the ultimate analysis, one is apt to consider a loss as amounting to a loss of capital. But this is not true of all losses, because losses in the running of the business cannot be said to be of capital. The questions to consider in this connection are: for what was the money laid out? Was it to acquire an asset of an enduring nature for the benefit of the business, or was it

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 11 an outgoing in the doing of the business? If money be lost in the first circumstance, it is a loss of capital, but if lost in the second circumstance, it is a revenue loss. In the first, it bears the character of an investment, but in the second, to use a commonly understood phrase, it bears the character of current expenses." 10. Therefore, the question for consideration was, whether the money advanced by the assessee which was written off was or had the character of the revenue expenditure or a capital expenditure? If it had a character of the capital expenditure, then the writing off of the same would not entitle the assessee to claim any deduction. If, on the contrary, it had the character of a revenue expenditure the writing off certainly shall entitle the assessee to claim the deduction. 11. Mr. Bandhyopadhya, learned advocate, appearing for the revenue submitted that the judgment in the case of Mysore Sugar Co. Ltd.(supra) has no manner of application because the money in that case was advanced for the purpose of purchasing raw material but in the case before us the advances were not for the purpose of purchasing raw material. The fact that the advances were made for purchasing the raw material made it an expenditure of a revenue character and, therefore, that was deductible. In the case before us the finding of fact is that the expenditure was incidental to the business. Therefore, the expenditure partook the character of revenue expenditure which is allowable deduction. 12. The question is, therefore answered in the negative and against the revenue.” Similarly we also relied in the case of Benani Cement Ltd vs. CIT reported in 380 ITR 116 where the Hon’ble Calcutta High Court has held as under :

“Expenditure made for construction/acquisition of new facility subsequently abandoned at the work-in- progress stage was allowable as incurred wholly or exclusively for the purpose of assessee’s business as covered by the decision in Graphite India Ltd. The issue whether such expenditure could be allowed in the relevant assessment year was however yet to be resolved.

Following the judgment in the case of Gajapathi Naidu the question to be asked was when did the expenditure claimed by way of deduction arise? There would have been no occasion to claim the deduction if the work-in- progress had completed its course. Because the project was abandoned the work-in-progress did not proceed any further. The decision to abandon the project was the cause for claiming the deduction. The decision was taken in the relevant year. It can therefore be safely concluded that the expenditure arose in the relevant year.

Reference in this regard may be made to the decision in the case of CIT Vs. Indian Mica Supply Co. P. Ltd. reported in (1970) 77 ITR 20 (SC) wherein the Supreme Court in considering a claim for deduction on arrear lease rents,

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 12 ascertained subsequently consequent to a compromise arrived in the suit and paid in the relevant assessment year. Expenditure made for construction/acquisition of new facility subsequently abandoned at the work-in-progress stage is allowable as incurred wholly or exclusively for the purpose of assessee’s business.

Similarly we also find support & guidance from the judgment of Hon’ble Calcutta High Court in the case of CIT Vs. woodcrafts products Limited reported in 217 ITR 862 wherein it was held as under : “In the case before us, the expenditure is also for the expansion of the existing business, though the object of manufacture, in contemplation of which the expenditure was incurred, did not materialize. May be, the expenditure is abortive but its character as a revenue expenditure incurred for the purpose of the expansion of the existing business is not disputable and has not been disputed either. In the premises, the second question is answered in the affirmative and in favour of the assessee”

13.1 The proposition laid down by the Hon’ble Courts as discussed above is squarely applicable to the facts of the case before us. In the case before us the assessee also incurred cost on the joint venture project which was not materialized and accordingly the same was dropped. Admittedly the impugned Joint venture project was identical to the activities of the assessee and therefore it can be inferred that the project was for the expansion of the existing business of the assessee. In view of above the loss incurred by the assessee was in connection and in the course of the business and hence allowable for deduction. The ground raised by the assessee is allowed.

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 13 closing stock has been under stated by Rs. 2,75,64,496/- in the balance sheet of the assessee. On question by AO for undervaluation of closing stock the assessee submitted that the molasses is not freely traded in the market and same was sold in subsequent year at a price of Rs.16,61,30,422/-. Therefore, the market value of the molasses as on 31.03.2005 is at Rs.16,61,30,422/-. However, AO disregarded the claim of assessee by observing that as per the Accounting Standard 2 “valuation of inventories” issued by the ICAI closing stock should be valued either at a cost or market value as on the date of balance sheet i.e. 31.03.2005. The assessee cannot take the future sale price of the product to determine the value of closing stock as on the balance sheet. The AO further observed that as per Accounting Standard-2 the cost incurred in relation to the purchase of the goods such as insurance storage etc., should also be included in the valuation of closing stock. Accordingly, the AO estimated Rs.60 lacs towards freight, insurance and storage and handling expenses which was added to the closing stock of the assessee. Accordingly the closing stock of the assessee was enhanced by a sum of Rs.3,35,64,496/- to the total income of assessee.

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 14 commodity and accordingly quality and market rate of the same came down. The assessee also challenged the addition of Rs. 60 lacs on the ground that no material was brought on record for such addition. However, Ld. CIT(A) disregarded the plea of assessee and confirmed the order of AO by observing as under:- “4.6 If it is the case of the assessee that the market price of molasses had declined after the end of the previous year, it is incumbent upon the assessee to show that the conditions of downward fluctuation existed at the balance sheet date and the trend was directly related to and was confirmed by the events occurring after the balance sheet date. That has also not been done. In this situation, the benefit of telescoping of the sale price of the subsequent year and its substitution for the market price at the end of the previous year cannot be given to the assessee. Needless to say, such benefit, in any case, can be given only in exceptional cases. Otherwise, the principle of valuing the inventory at cost or market price at the end of the previous year, whichever is less, will be totally diluted. 4.7 Regarding the addition of Rs. 60,00,000/- on account of freight, insurance, storage and handling expenses (which should have been factored into the cost of goods but had not been done by the assessee), the A.D. has made a prima-facie case for addition. The fact that such expenses had been incurred by the assessee was admitted by the assessee also. That being so, it was incumbent on the assessee to furnish the exact figure of such expenditure, because the relevant documents are in its possession only. Instead of doing so, it has merely questioned the estimate by saying that it was done without bringing any material on record. If the assessee does not furnish the details, there is hardly another material which can be brought on record by the Assessing Officer independently. He can only make a reasonable estimate and that has been done. The figure of Rs 60,00,000/- was arrived at on the basis of total expenses as a percentage of total sales and by apply the said percentage to the value of closing stock. In the absence of specific details which have not been furnished by the assessee even before the undersigned, the method applied by the Assessing Officer was the best and cannot be faulted. There should be no doubt that the expenses incurred till the stage of bringing the goods to the point of sale are part of the cost of the goods and the same have to be factored in the valuation of the stock. That obviously has not been done by the assessee. According to the details submitted by the assessee, it is noted that the assessee incurred expenditure incurred of Rs.1.41 crores on handling expenses, Rs.4.75 crores on freight expenses and Rs.8.43 crores on insurance. A sample of high-sea sales contract, furnished by the assessee, sows that the purchaser had to bear entire clearing expenses. Since the sales were effected on the high-sea, the assessee should not normally be required to incur any significant expenditure by way of handling, freight etc., in respect of the goods sold. In other word, it appear that the expenditure related mainly to the stock for which delivery was taken by the assessee. Of course, the assessee did non-trading business also during the previous year, apart from trading in molasses, and would have incurred

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 15 expenditure in connection therewith. In the ultimate analysis, since the assessee ha not furnished the relevant figures, it is a question of estimate and, since the estimate of the Assessing Officer cannot be faulted, the addition has to be confirmed. 4.8 The assessee has claimed that the depreciation of the INR vis-a-vis USD at the end of the previous year as compared to the time the stock had been purchased should be factored into the valuation of closing stock. According to the AS-Il, on which reliance has been placed by the assessee, the exchange rate prevailing at 31.03.2005 would apply only if the stock was denominated in foreign currency. No doubt, molasses were imported into India. But, they were sold to Indian parties. The closing stock was taken into assessee's own inventory and the value thereof had to be shown only in Indian . rupees. What happened to value of the INR vis-a-vis the USD subsequent to the date of purchase is .immaterial, simply because the closing stock was not denominated in foreign currency. Hence, 'this contention of the assessee is rejected. 4.9. As regards the assessee’s contention that, in case the value of the closing stock is enhanced for the previous year under consideration, the value of the opening stock should be correspondingly enhanced for the next previous year, the same is an axiomatic proposition. But, this is not a grievance of the assessee which can be said to be arising from the assessee order in question. The Assessing Officer enhanced the value of the closing stock for the previous year under consideration. If he has not enhanced the value of the opening stock for the next previous year, the assessee may have a grievance there and may seek appropriate remedy under the Income-tax Act for the present purposes, the assessee’s contention is rejected.”

Being aggrieved by this, assessee has come up an appeal before us.

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 16 but subsequently the party canceled the deal. The cancellation letter of the party is placed on page 68 of the paper book. The ld. AR also submitted that there was no market available to determine the value for the closing stock. Moreover there is controlled market in India for the molasses and which are governed by the State Governments. Therefore the assessee chose to sale the same in the foreign market.

17.1 On the other hand, Ld. DR submitted that molasses are used in sugar industry and the market value can be easily ascertained from such sugar industry. The molasses are used by different industries for additives and also by country liquor. He further submitted that the molasses can be stored about 20 years and therefore the argument placed by Ld. AR that molasses is a perishable item is not tenable. Besides, the assessee was well equipped with the storage facilities where the molasses could have been easily stored. As per Sec. 145A of the Act the cost incurred in relation to purchase of the goods such as freight, insurance etc., should be added in the value of closing stock. The cancellation letter has no meaning as it is just piece of paper and there is no agreement with the party. Lastly, he vehemently relied on the order of Authorities Below.

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 17 the assessee for its closing stock is correct valuation in the aforesaid facts and circumstances. The provisions of section 145A deals with the valuation of closing stock which reads as under:- “[Method of accounting in certain cases, 145A. Notwithstanding anything to the contrary contained in section 145,- (a) the valuation of purchase and sale of goods and inventory for the purposes of determining the income chargeable under the head “profit and gains of business or profession” shall be- (i) in accordance with the method of accounting regularly employed by the assessee; and (ii) further adjusted to include the amount of any tax, duty, cess or fee (by whatever name called) actually paid or incurred by the assessee to bring the goods to the place of its location and condition as on the date of valuation. Explanation,- For the purposes of this section, any tax, duty, cess or fee (by whatever name called) under any law or the time being in force, shall include all such payment notwithstanding any right arising as a consequence to such payment; (b) interest received by an assessee on compensation or on enhanced compensation, as the case may be, shall be deemed to be the income of the year in which it is received.]

From the above we find that the assessee has to adopt the method for the valuation of closing stock on regular basis. The assessee cannot change the method of valuation of closing stock as per his requirement. The method of valuation once adopted then the same should be regularly employed by the assessee. 18.1 Similarly we also find that the accounting standard 2 issued by the ICAI also requires determination of the net realizable value of the closing stock on the balance sheet date. The relevant extract of the AS 2 reads as under : “23. Estimates of net realisable value also take into consideration the purpose for which the inventory is held. For example, the net realisable value of the quantity of inventory held to satisfy firm sales or service contracts is based on the contract price. If the sales contracts are for less than the inventory quantities held, the net realisable value of the excess inventory is based on general selling prices. Contingent losses on firm sales contracts in excess of inventory quantities held and contingent losses on firm purchase contracts are dealt with in accordance with the principles enunciated in Accounting Valuation of Inventories 15 Standard (AS) 4, Contingencies and Events Occurring After the Balance Sheet Date. 24. Materials and other supplies held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. However, when there has been a decline in the price of materials and it is estimated that the cost of

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 18 the finished products will exceed net realisable value, the materials are written down to net realisable value. In such circumstances, the replacement cost of the materials may be the best available measure of their net realisable value. 25. An assessment is made of net realisable value as at each balance sheet date.”

18.2 In view of above we are inclined to concur with the view taken by the lower authorities for the valuation of the closing stock. In this connection we are also putting our reliance in the principles laid down by the Hon’ble Supreme Court in the case of Chanrup Sampatram vs. CIT reported in 24 ITR 481 wherein it was held as under :

“Accounts—Valuation of stock—In order to determine trading results of an accounting period, valuation of unsold stock at the close of that period is a necessary part of process—While anticipated loss is taken into account, anticipated profit in the shape of appreciated value of stock is not brought into account—Increased profits are not shown before actual realisation—This is the theory underlying the rule that closing stock is to be valued at cost or market price, whichever is lower.” In view of above, we find that the closing stock needs to be determined as per the method regularly employed by the assessee. The market price prevailing as on the date of balance sheet date should be taken into account while determining the closing stock. The future price of the closing stock cannot form the basis for the valuation of closing stock as on the balance sheet date. Accordingly we hold that the closing stock valued by the revenue is the correct valuation of the closing stock. However it is pertinent to note that the closing stock determined for the year under consideration will become the opening stock for the subsequent financial year. Accordingly the AO is directed to take appropriate measure as per law for the subsequent financial year. This ground of appeal of the assessee is dismissed in terms of above.

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 19 20. At the time of hearing Ld. AR for the assessee has not pressed this issue. Hence, same is dismissed as not pressed.

21.1 At the outset we find that interest under section 234B is consequential in nature and will be levied under both normal & MAT computation of Income. However if the liability to pay the advance tax arises due to the amendment in the Act retrospectively, then there would be no interest u/s 234B & 234C of the Act. In this connection we are putting our reliance in the case of Emami Limited Vs. CIT reported in 337 ITR 470 wherein it was observed as under :

“A mere reading of relevant provisions leaves no doubt that the advance tax is an amount payable in advance during any financial year in accordance with the provisions of the Act in respect of the total income of the assessee which would be chargeable to tax for the assessment year immediately following that financial year. Thus, in order to hold an assessee liable for payment of advance tax, the liability to pay such tax must exist on the last date of payment of advance tax as provided under the Act or at least on the last date of the financial year preceding the assessment year in question. If such liability arises subsequently when the last date of payment of advance tax or even the last date of the financial year preceding the assessment year is over, it is inappropriate to suggest that still the assessee had the liability to pay "advance tax" within the meaning of the Act. In the instant case , the last date of the relevant financial year was 31st March, 2001 and on that day, admittedly, the appellant had no liability to pay any amount of advance tax in accordance with the then law prevailing in the country. Consequently, the appellant paid no advance tax and submitted its regular return on 31st Oct., 2001 within the time fixed by law wherein it declared its total income and the book profit both as nil. However, consequent to the amendment of the provisions contained in s. 115JB by virtue of Finance Act, 2002 which was published in the Official Gazette on 11th May, 2002 giving retrospective effect to the amendment from 1st April, 2001, the appellant first voluntarily paid a sum of Rs. 1,55,62,511 on account of the tax payable on book profit as provided in amended provision of s. 115JB and then filed its revised return of 31st March, 2003 declaring its business income as nil but the book profit under s. 115JB as Rs. 20,63,65,711. The AO accepted such return of income but imposed interest under ss. 234B and 234C amounting to Rs. 44,00,937 and Rs. 11,78,960 respectively. The amended provision of s. 115JB having come into force w.e.f. 1st April, 2001, the appellant cannot be held defaulter of

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 20 payment of advance tax. As pointed out earlier, on the last date of the financial year preceding the relevant assessment year, as the book profit of the appellant in accordance with the then provision of law was nil, one cannot conceive of any "advance tax" which in essence is payable within the last day of the financial year preceding the relevant assessment year as provided in ss. 207 and 208 or within the dates indicated in s. 211 which inevitably falls within the last date of financial year preceding the relevant assessment year. Consequently, the assessee cannot be branded as a defaulter in payment of advance tax. It appears that the Tribunal has not at all considered the aforesaid aspect as to the liability of the assessee to make payment of the advance tax on the last day of the financial year i.e. 31st March, 2001 when its book profit was nil according to the then law of the land. In a case like the present one where on the last date of the financial year preceding the relevant assessment year, the assessee had no liability to pay advance tax, he could not be asked to pay interest in terms of s. 234B and s. 234C for default in making payment of tax in advance which was physically impossible.—Star India (P) Ltd. vs. CCE (2006) 201 CTR (SC) 63 : (2006) 280 ITR 321 (SC) applied; Jt. CIT vs. Rolta India Ltd. (2011) 237 CTR (SC) 329 : (2011) 49 DTR (SC) 346 : (2011) 330 ITR 470 (SC) distinguished.” Respectfully following the above ratio laid down by the Hon’ble High Court, we are inclined to allow the grounds raised by the assessee in terms of above.

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 21 25. Aggrieved, assessee preferred an appeal before Ld. CIT(A) whereas assessee submitted that shares were always shown as investment in the balance-sheet and not as stock-in-trade. The assessee inadvertently has shown the income under the head “business” from the sale-purchase of shares. However the income of the assessee from the AY 2003-04 has been shown under the head “capital gains” and the same has been accepted Ld. CIT(A) and accordingly he reversed the order of AO by observing as under:- “5.2 There is nothing on record to show that the assessee was holding the shares as stock-in-trade or was otherwise doing business in shares. The shares have been shown as “investment” in the balance sheet (in which sufficient amount of reserves are available). So, it can be inferred that the surplus funds were invested by the assessee into shares and securities and the gains on transactions of the same should be taxed as ‘Capital Gains’. In the part, the assessee might have shown such profits as art of the business but, even then, they were denominated as ‘Capital Gains’ only and, according to the assessee, that was due to on oversight and that it was unnecessarily paying higher amount of tax on such gains. With effect from the assessment year 2003-04, this practice was corrected and gains are being shown under the corrected and the same are also being assessee as such. In this situation, there is no justification to change the head of income and to assess it as profits of business. The Assessing Officer is directed to treat the amount as ‘Capital Gains’.”

Being aggrieved by this, Revenue has come up in appeal before us.

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 22 27. We have heard the rival contentions of both the parties and perused the materials available on record. The crux of the issue in the instant case is that AO has treated the income of the assessee shown under the head capital gain as income under the head of Business & profession on the reasoning that the Hon’ble ITAT in the own case of the assessee in ITA No. 868/Kol/2006 for assessment year 2001-02 dated 28.02.2007 directed to treat the income on purchase and sale of share as business income. However on perusal of Hon’ble ITAT order we find that the assessee in that year has claimed the loss on the sale of investment as business transaction which was accepted by the AO. But subsequently the ld. CIT treated the order of the AO as erroneous on this count. The appeal was filed by the assessee against the order passed by the ld. CIT u/s 263 of the Act wherein it was held that the AO has taken one of the possible views. Therefore the order of the AO cannot be held as erroneous. As we find that no ratio was laid down by the Hon’ble ITAT in that case by holding that the loss on sale of investment was to be computed under the head as business income or capital gain. Therefore the order of the Hon’ble ITAT in the own case of the assessee cannot form the basis for holding the capital gain loss as business loss. We also find that basis adopted by the AO for treating the capital gain income as business income is not appropriate. We also find that the assessee claimed the capital gain income in the revised return of income which is within the provisions of the law. As such the AO has not brought any defect in the books of accounts and in the revised return. The assessee has been showing investments in the audited financial statements. The ld. DR has also not brought anything on record to controvert the findings of ld. CIT(A) and the arguments advanced by the ld. AR. Hence this ground of appeal of the Revenue is dismissed.

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 23 29. Assessee in the year under consideration has created provision in respect of doubtful debt and advances for Rs.24,15,907/-. During the course of assessment proceedings, AO disallowed the said provision and added back to the book profit computed u/s.115JB of the Act.

Being aggrieved by this, Revenue has come up in appeal before us.

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 24 (i) The amount or amounts set aside as provision for diminution in view of value of any asset;

In the light of the amended provisions of section 115JB of the Act we reverse the order of ld. CIT(A) and this ground of appeal of Revenue is allowed.

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 25 IV. No sufficient reason has been brought on record to justify a departure from the past,

It is held that the income in question is assessable under the head profits and gains of business of the assessee. The Assessing Officer is directed to re- compute the income accordingly.”

Being aggrieved by this, Revenue has come up in appeal before us.

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 26 from interest on income tax refund is income from other sources in terms of the provisions of section 56(2) of the Act. We also find that interest on income tax refund cannot be said to be derived from the business activity. Hence the same should be taxable under the head income from other sources. Now coming to the issue of interest income on the FDR, the ld. AR claimed that the interest income was intrinsically link with the business of the assessee. The same should be treated as income from business and profession as it was earned on the deposit of margin money for availing the bank guarantee from the bank in order to participate in the tender. Therefore the interest income is directly linked with the business of the assessee. Accordingly the Ld CIT(A) allowed the appeal of the assessee. Now the crux of the controversy before us is as to whether this interest income is a business income or not. In the case on hand we find that the assessee has made fixed deposit with the bank as margin money for the purpose of availing bank guarantee and interest income was earned thereon. Therefore we find that there is direct nexus of the interest income with the business of the assessee. The ld. DR has relied in the judgment of Hon’ble Apex Court in the case of Pandian Chemical Ltd. Vs. CIT reported in 262 ITR 278 in supporting the order of AO. However the Hon’ble High Court of Karnataka in the case of CIT & ANR Vs. Motorala India Electronics Pvt. reported in ITR 265 CTR 0094 has decided the identical issue in favour of assessee considering the Pandian Chemical Ltd. (supra) in favour of the assessee. The relevant extract of the order is reproduced below:- “In instant case, assessee was a 100% EOU, which had exported software and earned income. A portion of that income was included in EEFC account. Yet another portion of amount was invested within country by way of fixed deposits, another portion of amount was invested by way of loan to sister concern which was deriving interest or consideration received from sale of import entitlement, which was permissible in law. There was a direct nexus between this income and income of business of undertaking. Though it does not par take character of a profit and gains from sale of an article, it was income which was derived from consideration realized by export of articles. In view of definition of ‘Income from Profits and Gains’ incorporated in Subsection (4), assessee was entitled to benefit of exemption of said amount as contemplated u/s 10B of Act. Therefore, Tribunal was justified in extending benefit to aforesaid amounts also. We do not find any merit in these appeals.

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 27 Therefore, first substantial question of law raised in ITA No.428/2007 was answered in favour of revenue and against assessee and first substantial question of law in ITA No.447/2007 was answered in favour of assessee and against revenue. While computing eligible deduction u/s 10B/10A of Act entire profits including interest earned from business of undertaking was to be considered.”

37.1 We also rely in the case of CIT Vs. Triputi Wollen Mills Limited reported in 193 ITR 0252 where the Hon’ble High Court of Kolkata has held as under :

“From the narration of facts, it will be evident that the finding of the Tribunal that the assessee in fact was carrying on business has not been challenged by the Revenue. That apart, the fact remains that although the income was earned by way of interest from the fixed deposits, the ITO allowed the expenditure incurred by the assessee to the extent of the interest income which would go to show that the ITO must consider the expenditure in connection with carrying on business, otherwise, he would have allowed only the expenditure which was incurred in connection with earning of the interest income. Thirdly, the Tribunal found as a fact that earning of the interest income arose from the utilisation of commercial assets. The Tribunal found that the funds utilised in making the fixed deposits with the bank were the business funds temporarily lying in surplus with the assessee. On these facts, the income derived from the utilisation of the commercial assets would be income from business. Where the assessee carrying on business, invests surplus cash lying with him temporarily in bank deposits, the interest earned on such deposits is out of the commercial assets of his business and, therefore, is assessable as business income and not as income from other sources.”

Similarly we also relied on the judgment of Hon’ble High Court of Bombay in the case of CIT Vs. Arts & Craft Exports reported in 246 CTR 0463. The relevant extract of the order is reproduced below :

“Exemption under s. 10BA—Profits derived from export of eligible goods— DEPB—Tribunal was justified in holding DEPB as a profit derived from export business for the purpose of computing deduction under s. 10BA—No question of law arises—Liberty India vs. CIT (2009) 225 CTR (SC) 233 : (2009) 28 DTR (SC) 73 : (2009) 317 ITR 218 (SC) distinguished; Arts & Crafts Exports vs. ITO (2012) 66 DTR (Mumbai)(Trib) 69 affirmed Tribunal was justified in holding DEPB as a profit derived from export business for the purpose of computing deduction under s. 10BA; no question of law arises.”

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 28 37.2 Similarly we also rely on the judgment of Hon’ble High Court of Karnataka in the case of CIT & ANR Vs. Chinna Nachimuthu Constructions reported in 297 ITR 070. The relevant extract of the order is reproduced below:

“Business income—Vis-a-vis income from other sources—Interest on fixed deposits made for securing bank guarantee to obtain contract—Investment of amount in fixed deposits by the assessee being only to secure a bank guarantee to be offered to KPTCL in order to acquire a contract work, interest on such fixed deposits cannot be treated as an income from other sources and has to be treated as business income—CIT vs. Govinda Choudhury & Sons (1994) 116 CTR (SC) 61 : (1993) 203 ITR 881 (SC) relied on” In this connection we also find guidance and support from the judgment of Hon’ble Supreme Court of India in the case of CIT Vs. Govinda Choudhury & Sons reported in 203 ITR 881. The relevant extract of the order is reproduced below :

“The assessee is a contractor. His business is to enter into contracts. In the course of the execution of these contracts he has also to face disputes with the State Government and he has also to reckon with delays in payment of amounts that are due to him. If the amounts are not paid at the proper time and interest is awarded or paid for such delay, such interest is only an accretion to the assessee's receipts from the contracts. It is obviously attributable and incidental to the business carried on by him. It would not be correct, as the Tribunal has held, to say that this interest is totally de hors the contract business carried on by the assessee. It is well -settled that interest can be assessed under the head `income from other sources' only if it cannot be brought within one or the other of the specific heads of charge. It is difficult to comprehend how the interest receipts by the assessee can be treated as receipts which flow to him de hors the business which is carried on by him. The interest payable to him certainly partakes of the same character as the receipts for the payment of which he was otherwise entitled under the contract and which payment has been delayed as a result of certain disputes between the parties. It cannot be separated from the other amounts granted to the assessee under the awards and treated as "income from other sources". We also find guidance and support from the judgment of Hon’ble Supreme Court of India in the case of Shyam Bihari Vs. CIT & ANR reported in 345 ITR 283. The relevant extract of the order is reproduced below:-

“The Karnataka High Court in Commissioner of Income Tax Vs. Chinna Nachimuthu Construction 297 ITR 70 noticed that the investment of amount in

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 29 fixed deposits by the assessee was only to provide a bank guarantee to the contractee in order to acquire the contract work. On such facts it held that the interest income could not be treated as income from other sources and had to be treated as business income only. In view of law laid down in clear terms in the judgment of Karnataka High Court noticed, the Tribunal as well as the subordinate revenue authorities erred in holding that interest accrued on security deposits to the extent used for the purpose of securing the contract work would also be assessable as income from "other sources". — Commissioner of Income Tax Vs. Chinna Nachimuthu Construction 297 ITR 70 relied. Interest earned by the assessee on the investment of amount in fixed deposits which was only to provide a bank guarantee to the contractee in order to acquire the contract work, could not be treated as income from other sources and had to be treated as business income only.”

In the present case the assessee has also earned income from the interest on the margin money deposited with the bank in order to avail the bank guarantee in order to participate in tenders. There is a direct nexus between interest income and the income of the business of the undertaking. Indeed the interest income does not par take the character of a profit and gains from the activity of assessee, but it is the income which is derived in the course of the business. Hence the ground raised by the Revenue is allowed partly.

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 30 41. In respect of issue No.2 raised by Revenue is that Ld. CIT(A) erred in deleting the addition made by AO on account of leave encashment for provision of Explanation (1)(c) to Sec. 115JB of the Act.

Being aggrieved by this, Revenue has come up in appeal before us.

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 31 has been crystallized in the year under consideration. The learned CIT(A) has not referred to any actuarial valuation report in order to ascertain the provision for leave encashment. The learned DR requested the bench to restore the issue to the file of AO for fresh adjudication. The ld. DR vehemently supported the order of AO. On the other hand the learned A are before us submitted that all the documents along with computation of income and financial statements were made available to the assessee learned CIT a at the time of appellate stage and accordingly the lease was granted by the learned CIT the learned AR also submitted that on similar issue for the assessment year 2005 6 the learned CIT a allowed the relief to the assessee The learned DR in rejoinder submitted that the legal position with regard to the provision for leave encashment is clear but the same should be based on valid documents and those documents have not been verified by the AO.

“If a business liability has definitely arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date. What should be certain is the incurring of the liability. It should also be capable of being estimated with reasonable certainty though the actual quantification may not be possible. If these requirements are satisfied the liability is not a contingent one. The liability is in praesenti though it will be discharged at a future date. It does not make any difference if

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 32 the future date on which the liability shall have to be discharged is not certain.—Metal Box Co. of India Ltd. vs. Their Workmen (1969) 73 ITR 53 (SC) and Calcutta Co. Ltd. vs. CIT (1959) 37 ITR 1 (SC) : TC 16R.197 applied. Provision made by the appellant company for meeting the liability incurred by it under the leave encashment scheme proportionate with the entitlement earned by employees of the company, inclusive of the officers and the staff, subject to the ceiling on accumulation as applicable on the relevant date, is entitled to deduction out of the gross receipts for the accounting year during which the provision is made for the liability. The liability is not a contingent liability. The High Court was not right in taking the view to the contrary.—CIT vs. Bharat Earth Movers Ltd. (1995) 123 CTR (Kar) 276 : (1995) 211 ITR 515 (Kar) : TC S16.1759 set aside. Under s. 258 the High Court or the Supreme Court have been empowered to call for supplementary statement of case when they find the one already before it not satisfactory. Art. 144 of the Constitution obliges all authorities, civil and judicial, in the territory of India to act in aid of Supreme Court. Failure to comply with the directions of this Court by the Tribunal has to be deplored. The Tribunal is expected to be more responsive and more sensitive to the directions of this Court.

Liability incurred by assessee under the leave encashment scheme applicable to its employees proportionate to the entitlement earned by the employees subject to ceiling on accumulation not being a contingent liability, provision made therefore is deductible.”

45.1 Similarly we also find support and guidance from the judgment of Hon’ble Himachal Pradesh High Court in the case of CIT Vs. H.P. Tourism Corporation Limited reported in 35 taxmann.com 450 wherein it was observed as under :

“Section 115JB of the Income-tax Act, 1961 - Minimum alternate tax [Leave encashment provision] - Assessing Officer treated provision made by assessee towards leave encashment of employees as in respect of unascertained liability and added same in book profit for purpose of levy of MAT - Tribunal deleted addition and held that provision made was in respect of ascertained and definite liability - Whether since issue was already stand answered by decision of Apex Court in Bharat Earth Movers v. CIT [2000] 112 Taxman 61, appeal filed by revenue was to be dismissed - Held, yes [Para 3] [In favour of assessee]”

From the above judgment of the Hon’ble Supreme Court, the provisions for the leave encashment is ascertained liability and therefore the same cannot be disallowed under the provisions of MAT u/s 115JB of the Act. However

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 33 from the order of AO we find that necessary details were not furnished at the time of assessment therefore the same was added back. We also find that the remand report was not called by the learned CIT(A) during the hearing of appellate stage. In view of above we’re inclined to restore the issue to the file of AO for fresh adjudication as per law with the direction to verify whether the provision for leave encashment has been crystallized. Hence the ground of appeal of the Revenue is allowed for the statistical purposes.

From the plain reading of the section, we find that the provision does not require the addition of wealth tax. Thus we are of the view to uphold the order of ld. CIT(A). Hence the ground raised by the Revenue is dismissed. Coming to Revenue’s appeal in ITA No. 371/Kol/2012 for A.Y. 07-08. 48. First ground raised by Revenue in this appeal is that Ld. CIT(A) erred in treating the interest from bank & interest of Rs.56,873/- on IT refund as business income.

ITA No.813,781/K/09 & 370-71/K/12 A.Ys.05-06 to 07-08 M/s IMC Ltd. vs. DCIT, Cir-11, Ko. Page 34 50. Next ground raised by Revenue is that Ld. CIT(A) erred in deleting the addition on account of provision of Wealth Tax in the book profit. We have already discussed the issue in para 47 of this order. Hence, this ground of Revenue’s appeal is dismissed. 51. We summarize the results as under:- a) assessee’s appeal (ITA No.813/Kol/2009) is partly allowed. b) Revenue’s appeals (ITA No.781/Kol/2009,371/Kol/2012 are partly allowed. c) Revenue’s appeal ITA No.370/Kol/2012 is partly allowed for statistical purpose. Order pronounced in the open court 18/01/2017 Sd/- Sd/- (�या�यक सद�य) (लेखा सद�य) (N.V.Vasudevan) (Waseem Ahmed) (Judicial Member) (Accountant Member) Kolkata, *Dkp, Sr.P.S �दनांकः- 18/01/2017 कोलकाता । आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. आवेदक/Assessee-M/s IMC Ltd., 232/A A.J.C. Bose Road, Kolkata-20 2. राज�व/Revenue-DCIT, Circle-11, P-7, Chowringhee Square, Aayakar Bhawan, Kol-69 3. संबं�धत आयकर आयु�त / Concerned CIT Kolkata 4. आयकर आयु�त- अपील / CIT (A) Kolkata 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, कोलकाता / DR, ITAT, Kolkata 6. गाड� फाइल / Guard file. By order/आदेश से, /True Copy/ उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, कोलकाता ।