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Income Tax Appellate Tribunal, DELHI BENCH ‘E’ : NEW DELHI
Before: SHRI A.T. VARKEY & SHRI O.P. KANT
(PAN : AABCN3209L) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri V.K. Tulsiyan, CA REVENUE BY : Shri P. Dam Kanunjna, Senior DR Date of Hearing : 02.09.2015 Date of Pronouncement : 18.11.2015 O R D E R PER A.T. VARKEY, JUDICIAL MEMBER :
This appeal, at the instance of the assessee, is directed against the order of the Commissioner of Income-tax (Appeals)-XVI, New Delhi dated 20.03.2009 for the assessment year 2005-06.
2. The assessee company is engaged in the manufacturing and selling of Sponge Iron, Billets which are used for making steel at its works at Raigharh in the State of Chhattisgarh. During the year, the assessee company also started operation of power at its plant for captive consumption of power. The return of income was filed on 21.10.2005 declaring an income of Rs.4,51,27,183/- under the normal provisions of the Income-tax Act, 1961 (hereinafter ‘the Act’) and book profit of Rs.82,97,30,572/- u/s 115JB of the Act. The case was processed u/s 143(1) of the Act. The assessee’s case was selected for scrutiny and notice u/s 143(2) was issued on 07.08.2006. Subsequently, notice u/s 142(1) of the Act along with questionnaire was also issued on 06.07.2007. In response to these notices, the assessee filed the requisite details / information. The assessment was completed u/s 143(3) of the Act at a total taxable income at Rs.10,16,78,149/- by making two disallowances i.e. disallowance of additional depreciation of Rs.5,64,30,426/- and disallowance u/s 14A of the Act of Rs.1,20,540/-.
3. Aggrieved, the assessee preferred an appeal to the first appellate authority. The CIT (A) upheld the disallowance of additional depreciation made by the AO and also while upholding the disallowance u/s 14A made by the AO, he increased the disallowance to Rs.2,26,000/- (i.e.
Rs.1,20,540/- made by AO + Rs.1,05,460/- enhanced by the CIT (A) = Rs.2,26,000/-).
4. The assessee, being aggrieved, is in appeal before us by taking the following effective grounds of appeal :-
“1. That the Learned Commissioner of Income Tax (Appeals)-XVI, New Delhi has grossly erred on facts and in the circumstances of the case and in law in rejecting statutory claim for deduction of additional depreciation u/s 32(1)(iia) of Rs.5,64,30,426/- on power turbines employed for generation of power for captive consumption in the business of manufacturing of steel and iron products.
That the Learned Commissioner of Income Tax (Appeals)-XVI, New Delhi has grossly erred on facts and in the circumstances of the case and in law in not appreciating the fact of increase in installed capacity of sponge iron and billets by 676121 MT during the previous year as per statement of installed capacity of turbine generator.
3. That the Learned Commissioner of Income-tax (Appeals) -XVI, New Delhi has grossly erred on facts and in the circumstances of the case and in law in re-computing disallowance u/s 14A as per rule 80 formula at the enhanced sum Rs.2,26,000/- on the basis of decision of Mumbai Tribunal in ITO v. Daga Capital Management (P.) Ltd. (2008) 2650T603 where facts of the case are entirely different from the facts in the appellant company's case.
Ground Nos.1 & 2 is against the disallowance of statutory claim for deduction of additional depreciation u/s 32(1)(iia) of Rs.5,64,30,426/- on power turbines employed for generation of power for captive consumption in the business of manufacturing of steel and iron products.
Brief facts relating to Ground No.1 are that the company had set up a two units lower plants of 8MW each which commenced the generation of power on 27.05.2004 and 1st August, 2004 and for this purpose, the purchased equipments of Rs.37,86,62,841/- and claimed additional depreciation on the same. The AO observed that in view of the provisions of section 32(1)(iia), since the assessee was engaged in generation of power, the same was not eligible for claim of additional depreciation. The AO asked the assessee to justify the claim of additional depreciation.
The assessee company filed its reply vide letters dated 20.11.2007 and 28.11.2007. The AO considered the submissions of the assessee wherein assessee had claimed that activity of generation of power and activity of manufacturing/producing of article or thing is same. The AO observed that assessee had ignored the fact that on one hand all the articles or things were tangible, could be handled/touched and could be stored but the electricity or energy being intangible was not capable of being subjected to physical handling or storage, hence by no means energy could be considered as article or thing . He observed that this distinction between the manufacturing undertaking and undertakings engaged in generational power was maintained throughout in the income tax legislation. According to AO, this fact become further evident if one went through the various deductions/exemptions granted to the power sector in the history of Income tax legislation. And,the activity of manufacturing or production of article or thing was always treated differently from the other activities like construction, mining, hotel business, generation of power and other infrastructure projects. After observing few sections where benefit was intended to the sector of manufacturing or production of article or thing and also other industrial undertakings as well as the decision of the ITAT Chennai Bench in the case of Tamilnadu Chlorates vs. JCIT (2006) 98 ITD 1 (Chennai), the AO held that the benefit of additional depreciation was not available to the undertakings engaged in generation of power and made the aforesaid disallowance.
6.1 The assessee filed an appeal before the CIT (A) on this issue and the CIT (A), after discussing the provisions of section 32(1)(iia) and the case laws relied upon by the assessee, upheld the order of the AO.
6.2 The assessee, being aggrieved, came up in appeal before us on this issue.
7. On merits, the ld. Counsel for the assessee reiterated the submissions made before the Income-tax authorities. He further submitted that this issue is decided by the Hon’ble jurisdictional High Court in the case of NTPC Limited vs. CIT – V in dated 16th April, 2014 in favour of the assessee and pleaded to set aside the orders of the income-tax authorities on this issue.
Ld. DR, on the other hand, relied on the orders of the authorities below.
We have heard both the sides on the issue and perused the material available on record. We find that the AO and CIT (A) disallowed the additional depreciation claimed by the assessee with a finding that the assessee was engaged in generation of power and the same was not eligible for claim of additional depreciation in view of the express provisions of section 32(1)(iia) of the Act. Our attention has been taken to the decision of the Tribunal in NTPC Limited vs. DCIT in for AY 2005-06 dated 30.04.2012 wherein the Tribunal while adjudicating an appeal preferred by the assessee against the Commissioner of Income-tax- V order under section 263 disallowing additional depreciation by noting that NTPC generates power and that section 32(1)(iia) of the Act provided additional depreciation to undertakings engaged in manufacture or production of any article or thing. So, in that case according to the Commissioner, generation of power cannot be equated with the production of article or thing because article or thing in common parlance is known as something tangible and moveable etc. The Commissioner was of the view that wherever a deduction is granted for power generation undertaking, a separate mechanism has been provided under the Act. He noted that section 32(1)(vi) (as stood prior to 01.04.1998) provided for additional depreciation but that it categorically specified both businesses i.e. generation of power and manufacture of production or an article or thing.
Thus, the Commissioner held that additional depreciation was inadmissible to NTPC and he held that AO incorrectly allowed additional depreciation and, therefore, he set aside AO’s order and directed the latter to withdraw the additional depreciation of Rs.187,55,71,000/-. The other issue on which the Commissioner found fault with the AO to exercise his revisional power under section 263 was with regard to the tariff of electricity wherein the Commissioner observed that CERC was tasked by law to regulate the tariff of electricity generating companies owned or controlled by the Central Government. NPTC has issued total sales bills of Rs.23,066.30 crores to its customers in terms of CERC’s existing norms. CERC’s final norm fixation order was not made during the year. Yet NTPC revised the sales downwards to Rs.22,128 crores and did not take into account a sum of Rs.938.30 crores. According to the Commissioner, AO permitted this without any inquiry. On the aforesaid score, the Commissioner set aside the assessment order and remitted this issue to the AO for fresh examination. NTPC thereafter approached the Tribunal. The Tribunal allowed the assessee’s appeal in respect to the additional depreciation, however, upheld the action of the Commissioner in respect to the tariff, thereby partly allowed the appeal. The impugned order of the Tribunal was challenged before the Hon’ble jurisdictional High Court who vide order dated 16.04.2014 in ITA 507/2013 set aside the orders of the authorities below and restored the order of the AO. Thus, the additional depreciation granted by the AO stood restored. In the light of the aforesaid facts of the matter and that too for assessment year 2005-06, which is relevant assessment year before us, we concur with the view that has been taken by the Tribunal while upholding the claim of the assessee in respect to the additional depreciation in the field of power generation. The Coordinate Bench of the Tribunal’s decision in NTPC Limited (supra) is reproduced below :-
“17. The next question for our adjudication is whether Learned Commissioner has rightly withdrew the additional depreciation claimed by the assessee and granted by the Assessing Officer? As discussed earlier, the assessee has claimed additional depreciation for the first time amounting to Rs.187,55,71,000. Learned Commissioner withdrew this additional depreciation on the ground that Assessing Officer has not conducted inquiry before allowing this depreciation. On merit, Ld. Commissioner has observed that assessee is engaged in the activity of generation of power. Section 32(1)(iia) of the Act provides additional depreciation to those undertaking which are engaged in the business of manufacture or production of any article or thing. According to the Learned Commissioner, other businesses are not eligible to claim the benefit. He observed that generation of power cannot be equated with the production of article or thing because article or thing in common parlance is known something tangible and moveable etc. Generation of power is giving energy as output and, therefore, this activity is 25 nowhere similar to production of article or thing because an article or thing is always associated with the concept of weight, mass and volume. The power or electricity does not have any of these attributes. It has no volume and it does not occupy any space, no weight or no mass can be attributed to it. The learned counsel for the assessee in order to appraise us the meaning of expression ‘manufacture and production made reference to the decision of Hon'ble Supreme Court in the case of Sesa Goa Ltd. and India Cine Agency (supra)
In the case of India Cine Agency, Hon'ble Supreme Court has considered the judgment rendered in the case of Sesa Goa (supra) and all other decisions on the point which contemplate the meaning of expression “manufacture” as well as “production”. The relevant discussion made by the Hon’ble Court reads as under:
“2. As noted above, the core issue is whether activity undertaken was manufacture or production.
In Black’s Law Dictionary (5th Edition), the word "manufacture’ has been defined as, "the process or operation of making goods or any material produced by hand, by machinery or by other agency; by the hand, by machinery, or by art. The production of articles for use from raw or prepared materials by giving such materials new forms, qualities, properties or combinations, whether by hand labour or machine". Thus by process of manufacture something is produced and brought into existence which is different from that, out of which it is 26 made in the sense that the thing produced is by itself a commercial commodity capable of being sold or supplied. The material from which the thing or product is manufactured may necessarily lose its identity or may become transformed into the basic or essential properties. (See Dy. CST (Law), Board of Revenue (Taxes) Coco Fibres [1992] Supp. 1 SCC 290).
Manufacture implies a change but every change is not manufacture, yet every change of an article is the result of treatment, labour and manipulation. Naturally, manufacture is the end result of one or more processes through which the original commodities are made to pass. The nature and extent of processing may vary from one class to another. There may be several stages of processing, a different kind of processing at each stage. With each process suffered, the original commodity experiences a change. Whenever a commodity undergoes a change as a result of some operation performed on it or in regard to it, such operation would amount to processing of the commodity. But it is only when the change or a series of changes takes the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognized as a new and distinct article that a manufacture can be said to take place. Process in manufacture or in relation to manufacture implies not only the production but also various stages through which the raw material is subjected to change by different operations. It is the cumulative effect of the various processes to which the raw material is subjected to that the manufactured product emerges. Therefore, each step towards such production would be a process in relation to the manufacture. Where any particular process is so integrally connected with the ultimate production of goods that but for that process processing of goods would be impossible or commercially inexpedient, that process is one in relation to the manufacture. (See Collector of Central Excise v. Rajasthan State Chemical Works [1991] 4 SCC 473).
x x x x x x x x x x x x x x x x x x x x x x
To put it differently, the test to determine whether a particular activity amounts to "manufacture’ or not is: Does a new and different good emerge having distinctive name, use and character. The moment there is transformation into a new commodity commercially known as a distinct and separate commodity having its own character, use and name, whether be it the result of one process or several processes ‘manufacture’ takes place and liability to duty is attracted. Etymologically the word ‘manufacture’ properly construed would doubtless cover the transformation. It is the transformation of a matter into something else and that something else is a question of degree, whether that something else is a different commercial commodity having its distinct character, use and name and commercially known as such from that point of view, is a question depending upon the facts and circumstances of the case. (See Empire Industries Ltd. v. Union of India [1985] 3 SCC 314).
x x x x x x x x x x x x x x x x x x x x x x”
In this case, assessee was carrying on business of conversion of Jumbo Rolls of photographic films into small flats and rolls in desired sizes. It claimed deduction under sec. 80-HH and 80-I as well as investment allowance under sec. 32AB. The controversy arose whether conversion of jumbo rolls into small sizes amounts to manufacture or production, eligible for deduction under sec. 32AB or deduction under sections 80- HH and 80-I 28 of the Income-tax Act, 1961/ Hon'ble Supreme Court has held that this activity amounts to manufacture or production. Thus, we think it is not necessary to recapitulate and recite all the decision on the construction expression “manufacture”. But suffice to say that core of all the decisions of the Hon'ble Supreme Court or Hon'ble High Court is to the effect that broadly manufacture is a transformation of an article, which is commercially different from the one which is converted. It is a change of one object to another for the purpose of marketability. It brings something into existence, which is different from that, which originally existed. The new product is a different commodity physically as well as commercially. The Hon’ble Court also explained broader test to determine whether manufacture is there or not, it is propounded that when a change or series of changes are brought out by application of processes
which take the commodity to the point where, commercially, it cannot be regarded as the original commodity but is, instead recognized as a distinct and new article that has emerged as a result of the process.
As observed earlier, Learned Commissioner withdrew the additional depreciation primarily on the ground that power/electricity generated by the assessee cannot be equated with an article or thing which is being 29 manufactured in an industrial undertaking. The learned counsel for the assessee in order to buttress his arguments, power/electricity generated by the assessee is an article or goods, made reference to the decision of Hon'ble Supreme Court in the case of CST Vs. MP Electricity Power. In this case, the MPEST Board sold, supplied and distributed electric energy to various consumers. It also sold coal-ash, a waste product and supplied stream to Nepa Mills of Burhanpur. The sale of electricity is exempt from sales-tax. However, for the purpose of determining the gross turn over, the sale of electric energy is to be taken into account. The first question which arose before the Honble Court was;
“On the facts and circumstances of the case whether or not the Madhya Pradesh Electricity Board is a dealer within the meaning of Section 2(c) of the C.P. and Bare Sales-tax Act, and section 2(d) of the Madhya Pradesh General Sales-tax Act, 1958, in respect of its activity of generation, distribution, sale and supply of electric energy?”
20.1 In order to decide whether Madhya Pradesh Electricity Board is a dealer or not, Hon’ble Court took into consideration the definition of “dealer” as given in the two acts referred in the question and observed that the definition contemplates that any person who carries on the business of buying, selling, supplying or distributing the goods as a “dealer”. The 30 expression “goods” are defined by section 2(d) of the Act, 1947 according to which all kinds of moveable properties other than actionable claim…………. and include material articles and commodities whether or not to be used in the construction, fitting out, improvement or repair of immoveable property. According to the Hon’ble Court, the definition of expression “goods” contained in section 2(g) of the Act No. 11 of 1959 has almost similar. In the light of these definitions, Hon’ble Court has examined whether electricity can be termed as a goods. The discussion made by the Hon’ble Court in the judgment reads as under:
“The reasoning which prevailed with the High Court was that a well defined distinction existed between the sale or purchase of “goods” and consumption or sale of electricity; otherwise there was no necessity of having Entry No.53. But under Entry 53 taxes can be levied not only on sale of electricity to derive much assistance from the aforesaid entries. What has essentially to be seen is whether electric energy is “goods” within the meaning of the relevant provisions of the two Acts. The definition in terms is very wide according to which ‘goods’ mean all kinds of movable property. Then, certain items are specifically excluded or included in electric energy or electricity is, not one of them. The term “moveable property” when considered with reference to “goods” as defined for the purposes of sales tax cannot be taken in a narrow sense and merely because electric energy is not tangible or cannot be moved or touched like, for instance, a piece of wood or a book it cannot be cease to be movable 31 property when it has all the attributes of such property. It is needless to repeat that it is capable of abstraction, consumption and use which, if done dishonestly, would attract punishment under sec. 39 of the Indian Electricity Act, 1910. It can be transmitted, transferred, delivered stored, possessed etc. in the same way as any other movable property. Even in Banjamin on Sale, 8th Edn., reference has been made at page 171 to Country of Durham Electrical, etc., Co. v. Inland Revenue(1) in which electric energy was assumed to be “goods”. If there can be sale and purchase of electric energy like any other moveable object we see no difficulty in holding that electric energy was intended to be covered by the definition of “goods” in the two Acts. If that had not been the case there was no necessity of specifically exempting sale of electric energy from the payment of sales tax by making a provision for it in the Schedules to the two Acts. It cannot be denied that the Electricity Board carried on principally the business of selling, supplying or distributing electric energy. It would therefore clearly fall within the meaning of the expression “dealer” in the two Acts”.
20.2 This question again fallen for the consideration of the Hon'ble Supreme Court in the case of State of Andhra Pradesh
Vs. NTPC. The dispute in this case was that respondent NTPC had a thermal power station at Ramagundam within the State of Andhra Pradesh and sold the electricity to the Board of Karnataka, Kerala, Tamilnadu and the State of Goa in pursuance of contract of sales occasioning interstate movement of electricity. The Andhra Pradesh Government wanted to levy of duty on 32 certain sales of electric energy. According to the understanding of Andhra Pradesh Government, section 3 of their Sales-tax Act provides that every distributor of electric energy and every producer shall subject to certain exceptions pay every month to the State Government a duty calculated at the rates specified in the table appended thereto on the units of electric energy sold or supplied to a consumer or consumed by himself for his own purpose or for the purpose of his township or colony during the preceding months. Similar steps were taken by the Madhya Pradesh Government for the plants situated in its territorial jurisdiction. The question arose whether electricity sold to other states would be amenable to duties. The Hon’ble Court in that context considered, what is an electric energy and made following observations:
“Before we deal with the constitutional aspects let us first state what electricity is, as understood in law, and what are its relevant characteristics. It is settled with the pronouncement of this Court in Commissioner of Sales-tax, Madhya Pradesh, Indore Vs. Madhya Pradesh Electricity Board, Jabalpur- 1969 (2) SCR 939 that electricity is goods. The definition of goods as given in Article 366(12) of the Constitution was considered by this Court and it was held that the definition in terms is very wide according to which “goods” means all kinds of moveable property. The term “moveable property” when considered with reference to “goods” as defined for the purpose of sales-tax cannot be taken in a narrow sense and merely because 33 electricity energy is not tangible or cannot be moved or touched like, for instance, a piece of wood or a book it cannot be cease to be moveable property when it has all the attributes of such property. It is capable of abstraction, consumption and use which if done dishonestly is punishable under sec. 39 of the Indian Electricity Act, 1910. If there can be sale and purchase of electrical energy like any other moveable object, this Court held that there was no difficulty in holding that electric energy was intended to be covered by the definition of “goods”. However, A.N. Grover, J. speaking for three-Judge Bench of this Court went on to observe that electric energy “can be transmitted, transferred, delivered, stored, possessed etc. in the same way as any other moveable property”. In this observation we agree with Grover, J. on all other characteristics of electric energy except that it can be ‘stored’ and to the extent that electric energy can be ‘stored’, the observation must be held to be erroneous or by oversight. The science and technology till this day have not been able to evolve any methodology by which electric energy can be preserved or stored.
Another significant characteristic of electric energy is that its generation or production coincides almost instantaneously with its consumption. To quote from Aiyar’s Law Lexicon (Second Addition, 2000)__ ‘Electricity in physics is “the name given to the cause of a series of phenomena exhibited by various substances, and also to the phenomena themselves.” Its true nature is not understood. Imperial Dict. (quoted in Spensley v. Lancashire Ins. Co., 54 Wis. 433, 442, 11 NW 894, where the court, quoting from the same authority, said, “We 34 are totally ignoran of the nature of this cause whether it be a material agent or merely a property of matter. But as some hypothesis is necessary for explaining the phenomena observed, it has been assumed to be a highly subtle, imponderable fluid, identical with lightning, which pervades the pores of all bodies, and is capable of motion from one body to another.’ This characteristic quality of electric energy was judicially noticed in Indian Aluminium Co. etc. etc. Vs. State of Kerala & Ors (1996) 7 SCC 637. Vide para 25 this court has noted, “Continuity of supply and consumption starts from the moment the electrical energy passes through the meters and sale simultaneously takes place as soon as meter reading is recorded. All the three steps or phases (i.e. sale, supply and consumption) take place without any hiatus. It is true that from the place of generating electricity, the electricity is supplied to the sub- station installed at the units of the consumers through electrical higher-tension transformers and from there electricity is supplied to the meter. But the moment electricity is supplied through the meter, consumption and sale simultaneously take place. “as soon as the electrical energy is supplied to the consumers and is transmitted through the meter, consumption takes place simultaneously with the supply. There is no hiatus in its operation. Simultaneously sale also takes place.” These properties of electricity as goods are of immense relevance as we would state hereafter”.
On due consideration of these two decisions, it is implicitly clear that the Hon'ble Supreme Court has explained the meaning of electricity, the 35 Hon’ble Court has considered the definition of goods as given in Article 366(12) of the Constitution of India. It also took into consideration the Sales tax Act of the State of Andhra Pradesh as well as Madhya Pradesh and also considered the dictionary meaning. Thereafter Hon’ble Court has observed that goods means, all kind of moveable properties. The terms moveable property when considered with reference to goods as defined for the purpose of sales-tax cannot be taken in a narrow sense and merely because electric energy is not a tangible or cannot be moved or touched like, for instance, a piece of wood or a book it cannot cease to be moveable property when it has all the attributes of such properties. It is capable of abstraction, consumption and use of which if done dishonestly is punishable under sec. 39 of the Indian Electricity Act. If there can be sales and purchase of electric energy like any moveable object than there was no difficulty in holding that electric energy was intended to be covered by the definition of goods.
The expression “article, thing or goods” are not defined in the Income-tax Act, 1961. Learned Commissioner while treating the electricity as not an article or thing has not made reference to any provisions of the Income-tax Act, 1961, he simply construed the meaning of electricity as not article or thing on the basis of his own inference drawn from the nature of 36 this item but if we evaluate the conclusion drawn by the Learned Commissioner in the light of the decision of the Hon'ble Supreme Court given in the case of Indian Cine Agency, CST Vs. M.P. Electricity Board and State of Madhya Pradesh Vs. NTPC then it would suggest that electric energy has all trapping of an article or goods. The process of its generation is also akin to manufacture or production of an article or thing. It is being generated in huge plants though scientifically one may say it is transformation of one source of energy into the other. But all these aspects have been considered in these three judgments of the Hon'ble Supreme Court wherein Hon’ble Court has explained what is manufacture or production and what is electricity. Learned DR at the time of hearing, had made reference to the order of the ITAT, Chennai and the judgment of the Hon'ble Supreme Court in the case of NC Budhiraja. As far as the judgment of the Hon'ble Supreme Court in the case of N.C. Budhiraja is concerned that has been considered by the Hon'ble Supreme Court itself in the case of Indian Cine Agency (supra). The ITAT in the case of Tamilnadu Chlorates has considered the admissibility of deduction under section 80-HH and in that test held that electricity is not an article. The ITAT has not dealt with these two judgments extensively rather simply observed that decision in the case of Madhya Pradesh Electricity Board was given in the context of the 37 language of a particular statute. The only discussion made by the ITAT with regard to these two judgments of the Hon'ble Supreme Court reads as under:
“6. Reference was made to the decisions of Apex Court rendered in the case of M.P. Electricity Board 35 STC 188 (sic). In this case it was held that electricity is goods within the meaning of section 2(3) of Central Province and Virar Sales-tax Act. This decision was rendered in the context of the language of a particular statute. As such this meaning cannot be extended to the facts of the present case”.
Thus, taking into consideration all these aspects, we are of the view that admissibility of additional depreciation cannot be denied to the assessee merely on the ground that electricity is not an article or thing. The order of the Learned CIT(Appeals) is reversed to this extent and the disallowance is deleted.
In the result, the appeal of the assessee is partly allowed.”
Respectfully following the aforesaid decision of the Coordinate Bench of the Tribunal and the Hon’ble jurisdictional High Court, we set aside the orders of the lower authorities on this issue and allow grounds no.1 & 2 of the assessee’s appeal.
Ground No.3 relates to re-computing of disallowance u/s 14A as per Rule 8D formula at the enhanced sum of Rs.2,26,000/-. Looking at the smallness of the addition, on a query from the Bench, the ld. AR says that he would not press this ground, however urged before us that by conceding this ground should not be treated as a precedent for subsequent years. In the light of the said submission, we dismiss this ground for this assessment year and observe that by not-pressing this ground in this AY, shall not be treated as a precedent for any other assessment years.
In the result, the appeal of the assessee is partly allowed.
Order pronounced in open court on this 18th day of November, 2015.