TMI Blog2012 (4) TMI 373X X X X Extracts X X X X X X X X Extracts X X X X ..... t (i) it is the decision of the revenue to treat the said 'non-compete fee' as the 'capital expenditure' and to grant 'depreciation' on the same for the AY 2000-01 and in effect it already entered the 'block of assets' in the AY 2000-01 by virtue of the thrusting by the AO - if the capital expenditure by way of 'non compete fee' in question is an 'intangible asset' and if the same is depreciable asset for the benefits u/s 32 of the Act - ITAT in the case of Asstt. CIT v. Real Image Tech (P) Ltd [2008 -TMI - 69913 - ITAT MADRAS-B] - Decided in favor of the assessee. Reduction of Sales tax refund from business profits while computing deduction U/s. 80HHC - held that:- AO shall grant relief in this regard Reducing interest income from business profits while computing deduction u/s.80HHC - held that:- matter remanded to AO for fresh decision. Regarding deduction u/s. 80HHC - the profit of the EOU unit u/s. 10B forms part of the 'profits of the business' as defined in Explanation (baa) to section 80HHC of the Act for the purpose of determining the allowable deduction under the said section and consequently, the export and total turnover of the said EOU unit are required to be i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furniture and fixtures) instead of allowing the same @ 25%(applicable to Plant Machinery) 4. In connection with the above ground the assessee submitted that the assessee engaged in the manufacture of the chemicals and vaccines and for this, the assessee has laboratories. Assessee purchased Stools, Tables, Stainless Steel racks, SS cupboards, SS trolleys, SS trays etc as part of the Plant and Machinery amounting to ₹ 19,43,791/- and claimed depreciation as per the rates applicable to the Plant and Machinery. During the assessment proceedings, AO held that they are not plant and Machinery and considered them as 'furniture' and granted the depreciation as per the rates applicable to the 'furniture. The CIT(A) confirmed the view point of the AO. Aggrieved with the same the assessee is in appeal before us. During the proceedings, the assessee filed the following written submission in the form of a written note and the same reads as follows. The assessee relies on the decision of Mumbai High Court in case of CIT v. Parke Davis 214 TTR 587 (page no. 9-11 of paper book no.20) wherein it is held that plant means includes apparatus (fan) used by a businessman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the orders on the details of the said test. In our opinion, the functional test implies if the said items are necessary for the production of the product in the laboratory premises. In other words, if the Stools, Tables, Stainless Steel racks, SS cupboards, SS trolleys, SS trays etc are required for the laboratory purpose i.e. for the purpose of production or processing of the chemical tests in the laboratory premises leading to the production of the stocks, they must be categorized as plant and machinery. The impugned items like the case of 'fan' held as plant and machinery by the Jurisdictional High Court in the case of Park Davis (India) Ltd. ( supra ) have both factory and office functions depending on the place of use and the employees using them. If the scientist or lab technicians have used the impugned chairs or stools or racks or trays as part of the production of the vaccines in the factory premises, they must be construed as 'plant' as held in the case of Park Davis (India) Ltd. case ( supra ) on the dispute relating to 'fan' and the applicable rate of depreciation. As argued by the Ld DR, the special design is an irrelevant factor as the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said amount was held by the revenue as a 'capital expenditure' and depreciation @ 30% was allowed on the said capital asset. The matter reached finality on this issue as stated by the Ld counsel at Bar before us. This issue is relevant for the AY 2000-01 and the assessee acquired by way of amalgamation, the said TCL Company for the year under consideration i.e. AY 2001-02 as a going concern with the revenue's stand that the impugned non compete fee of ₹ 2.1 cr (non compete fee of ₹ 2.4 cr - ₹ 30 lakhs of depreciation claim thereon for that year) is the depreciable intangible asset. 10. In the factual matrix of the above, the parties in the litigation made various submissions. The then CIT DR filed written submission dated 30.7.2008 with the limited objection that the 'non compete fee' is not eligible for depreciation vide para 4 to 7 of the note. The summary is given in para 7 of the note and the same read as under: 7. Therefore, the CIT(A) was correct in holding that there is no provision in the Act and Rules for allowing depreciation on Capital expenditure incurred on non-compete Fees. (Para 8.3, page 8-9 of CIT(A)'s order). I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (B) for the purposes of computing written down value, exist from a block of assets happens only when an asset is sold, discarded or demolished. For our said view we rely on the decision of Swati synthetics v. ITO 38 SOT 208 (MUM). Neither of this has happened in the present case so as to deny depreciation. Explanation 2 to section 43(6) provides for the manner of computing written down value of a block in case where the block is transferred by the amalgamating company to the amalgamated company. It provides that the written down value of the block in the case of the amalgamating company will be the written down value in the case of the amalgamated company. Here again there is no scope for existing from the block of assets transferred by the amalgamating company (TVL) to the amalgamated company Serum). Without prejudice to the factual position that the AO has not held the payment to be in the nature of non compete fees, we would like to refer to the decision of the Madras Bench of the Tribunal in the case of Real Image Tech (P.) Ltd. (120 TTJ 983) where it has been held that payment made under a non-compete agreement was capital expenditure and entitled to depreciation as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a part of the building, furniture and plant and machinery. There is no provision in the Income tax Act and Income tax Rules for allowing depreciation on capital expenditure incurred on non-compete fees. The claim of the appellant is therefore rejected. 12. Thus, as cab be seen from above, the CIT(A) has merely mentioned that the 'non compete fee is a capital expenditure and not that type of building, furniture and plant and machinery. CIT(A) is simply ignorant of the law that that the depreciation is allowable on the capital assets of intangible nature too with effect from 1.4.1999 and the AY under consideration is AY 2001-02. It is not known as to why the cited decision of the Chennai Bench, ITAT in the case of Asstt. CIT v. Real Image Tech (P) Ltd [2009] 177 Taxman 80 (Mag.). We find the said undisturbed decision is straight on the issue under consideration and it is relevant for the proposition that payment made under a non-compete agreement was capital expenditure and entitled to depreciation as in intangible asset. It is not case of the revenue there exists any other decision contrary to that of Real Image Tech (P) Ltd ( supra ). 13. Therefore, the limited di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assets mentioned are knowhow, patents, copyrights, trademarks, licenses, franchises, etc. In all these cases no physical asset comes into possession of the assessee. What comes in is only a right to carry on the business smoothly and successfully and therefore even the right obtained by way of non-compete commercial rights of similar nature because after obtaining non-compete right, the assessee can develop and run his business without bothering about the competition. The right acquired by payment of non-compete fee is definitely intangible asset. Moreover, this right (asset) will evaporate over a period of time of five years in this case because after that the protection of non-competition will not be available to the assessee. This means, this right is subject to wear and tear by the passage of time, in the sense, that after the lapse of a definite period of five years, this asset will not be available to the assessee and, therefore, this asset must be held to be subject to depreciation. Assessee would be entitled to depreciation in respect of non-compete fee which is in the nature of intangible asset. 14. From the above, it is vivid that the, by payment of non compete fee t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x set off. This set off is in respect of purchase tax paid on purchases and thus reduces the incidence of such purchase tax, which tax forms part of the purchase price of raw materials etc. and has therefore gone to reduce the business profits in the first place. Recoupment of part of the purchase cost should form part of the profits of the business for the purpose of section 80HHC. Further, it was submitted that the issue under consideration was already adjudicated by this Tribunal in the assessee's own case for the earlier AYs. On the other hand, Ld DR for the revenue relied on the orders of the revenue, which were decided based on the judgment in the cases of CIT v. K K Doshi Co [2000] 245 ITR 849/112 Taxman 503 (Bom.) for the proposition that the 'profits of business' should be those receipts which had direct nexus to the export activities. 17. We have heard the parties and find the issue under consideration has reached finality at the level of the Tribunal and the issue of exclusion of excise duty and sales tax collected has been allowed by the learned CIT(A) and Department's appeal against the said decision of the CIT(A) has been dismissed by the ITAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20. Ground 5(d) relates to reducing from the Profit eligible for deduction u/s. 80-HHC a sum of ₹ 6,40,80,683/- being deduction u/s.80-HHC of the Act a sum of ₹ 6,40,80,683/- being deduction u/s. 80-IA of the Act. During the proceedings before us, referring to the additional ground, Ld counsel mentioned that the said additional ground inter alia raises two related issues viz. (i) that the deduction claimed by the assessee under Section 80 IA ₹ 6,44,91,533/- be not excluded from the profits of the business at the time of applying the formula and computing deduction under Section 80 HHC in the light of the judgment of jurisdictional Bombay High Court in the case of Associated Capsules (P.) Ltd. v. Dy. CIT [2011] 332 ITR 42/197 Taxman 84/9 taxmann.com 63. This issue is covered in favour of the assessee in the light of the jurisdictional Bombay High Court decision cited ( supra ) and (ii) that Excise Duty collected ₹ 1,01,800/-and Sales Tax collected ₹ 1,77,85,482/- be excluded from the total turnover of the business of the assessee for the purpose of computing deduction u/s 80 HHC. This issue is also covered by the judgment of Hon'ble Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Ltd. v. Dy. CIT [2010] 325 ITR 102/191 Taxman 119 (Bom.) which declared that the provisions of section 10B of the Act are deduction provisions and not of exemption. 22. For the first time vide letter dated 26/02/2009, assessee modified the said ground no.5(e) (renumbered as 6 in the said letter) and the modified ground with reference of 'inclusion of the export sales of EOU unit' reads as under CIT(A) ought to have held on facts before him that the export sales of EOU should have been included in the export turnover of the assessee company while computing the deduction u/s.80HHC. 23. Subsequently, the said additional ground was further modified vide letter dated 30/04/2011 with special reference to the 'inclusion of profit of the EOU unit' and the said ground read as under: on the facts and circumstances of the case and in law, for the purposes of Explanation (baa) to 80HHC, profits of the business should include profits derived by the 100% EOU notwithstanding the fact that such profits are to be deducted from the total income of the assessee in terms of section 10B of the act 24. However, this ground is subsequently and orally given up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal along with the additional ground and the figures that appeared in the revised Form are mere consolidation of the figures of both EOU and DTI units of the assessee. Referring to the reasons for not raised in the ground before the authorities below the assessee mentioned that the assessee was under bona fide belief that the provisions of section u/s.10B of the Act are exemption provisions in nature and in such case, the profits of the EOU unit shall not enter the computation of income at all. However, there is now finality on the nature of the provisions of section 10B of the Act vide the binding judgment of jurisdictional High court of Bombay in the case of Hindustan Unilever Ltd. ( supra ) for the proposition that after the amendment by the Finance Act, 2000 and with effect from 1.4.2001, notwithstanding the fact that it continues to be located in Chapter III and not located in Chapter VIA of the Income Tax Act, 1961, section 10B of the Act is 'deduction' provisions and they are no longer the exemption provisions for A.Y.2001-02 onwards. These provisions of section 10B provide for 100% deduction of profits of the EOU unit, and after the said judgment, the relevant p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for investigation into the facts of this issue. Therefore, cited decision relied by assessee are inapplicable. 27. We heard both the parties on this preliminary issue of the admission of this additional ground as discussed in the preceding paragraphs. We have examined the orders and the paper available before us. Further, we have examined the binding decision of the said cited decision in the case of Hindustan Unilever Ltd. ( supra ) and find that there is clarity now after the said judgment dated 1/04/11 that Sec 10B is no longer an exempt provision at least for the computation in general and in matters relating to set off of loss of allowable units against the profit of the business in particular. Therefore, the assessee's timing for raising of the additional ground before us cannot be faulted for. So far as the legal nature of additional ground is concerned, we find that the said issue was already adjudicated by Hon'ble High Court thereby the legal nature of the additional ground cannot be questioned too. Finally, the other objection of the revenue relates the requirement of investigation into the facts relating to the said additional ground. In this regard, we h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was limited to the power of assessing authority to entertain claim for deduction otherwise than by revised return, and did not impinge on the power of Tribunal 30. In view of the above judgment of the Apex court, it is evident that the filing of the revised return is not mandatory when an additional ground is made before the ITAT and the same is sprung from the binding jurisdictional High court's judgment in the case of Hindustan Unilever Ltd. ( supra ). Therefore, we admit said grounds of the assessee. Adjudication of the Additional Ground on its merits: 31. The issue raised in ground no.6 erstwhile 5(e) relates to inclusion of export turnover of EOU unit in the export turnover of the assessee for the purpose of computing the allowable deduction u/s. 80HHC of the Act. In the preceding paragraphs, we have already discussed that the said issue raised is admittedly linked to the ratio of the jurisdictional High Court judgment in the case of Hindustan Unilever Ltd. ( supra ), thereby, the Section 10B, though placed in chapter III of the Income Tax Act, is interpreted by the jurisdictional High court as a deduction provision like the ones already existing in chapte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has to be computed separately in accordance with the provisions of the Act but should thereafter be all put together and aggregated to arrive at the profits and gains taxable under the head profits and gains of business. e. Therefore, S 10B income will have to be computed under the head 'profits and gains of business' relevant provisions for which are contained in sections 30 to 43D. f. S 10B is an undertaking/unit specific deduction - Hindustan Unilever Ltd (supra) and Special Bench in the case of Scientific Atlanta 129 TTJ 273 (Chennai) g. S 80HHC is assessee specific. It does not distinguish between exports by an assessee and exports by a unit of the assessee. h. The only satisfying condition u/s 80HHC(1) is that the assessee should be engaged in the business of export of goods. i. In terms of s 80HHC(2) the section applies to export of all goods except those prohibited u/s 80HH(2)(b). j. It is not a pre-condition of the section that the exports should in fact result in profits. The export profits are merely derived or notional profits and not actual profits. The only requirement is a positive income under the head ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the profits and gains from business, they would have to be included as such under Explanation (baa) to s 80HHC y. S 80HHC(3) provides for computation of profits derived from export of goods to which this section applies; z. Since 10B profits would form part of profits of business in terms of Explanation baa as explained above, such profits would also qualify for deduction u/s 80HHC(1) aa. Since such profits qualify u/s 80HHC(1) the corresponding export turnover also qualifies for being included in the figure of ET under Explanation b to s 80HHC bb. Thus profits derived from export of 10B unit and DTA unit would both form part of the profits of business from export of goods referred to in S 80HHC(1). Correspondingly, since computation of deduction u/s 80HHC is to be done for the assessee as a whole, export turnover of the assessee as a whole needs to be taken as numerator. 12. Thus the claims raised by the Appellant vide modified Ground No. 6 and the Additional Ground find support in the scheme of s 10B as emerges on a reading of the decision of the Bombay High Court in the case of Hindustan Unilever Ltd. 32. The above essentially advocates for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose of computation u/s 80HHC of the Income tax Act: ( i ) Profits of EOU will not be included in the profits for computation of deduction u/s80HHC... ( ii ) Export turnover of EOU will not be included in the export turnover for computation of deduction u/s 80HHC... ( iii ) Total turnover of EOU will be included in the total turnover for computation of deduction u/s80HHC ...as it denotes total turnover of the business and not only such export. For this proposition reliance is placed on the decision.... in the case of Tata BP Solar India Ltd...(139 TTJ 289) (dated 20.10.2010) . 34. In the later paragraphs of his written submissions, Ld DR went on to mention that the in that case, the assessee did not include the profit of the EOU unit, Export and Total turnovers in the numerator and denominator of the formula devised for computation of deduction u/s 80HHC and the assessment was completed accordingly. CIT reviewed the same u/s 263 of the Act and directed the AO to include the export turnover of the EOU unit in the total turnover (denominator) of the formula. In the second appellate proceedings, Hon'ble ITAT confirmed the above view of the CIT under the circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal in the case of Mahavir Spinning Mills (110 ITD 211) relied upon by the learned DR relates to AY 1998-99 when the section was an exemption section and not a deduction section. There the assessee had admitted that profits of the 10B unit had not been included in the profits to claim deduction u/s 80HHC since s 10B was an exemption section. This is contrary the scheme of the new s 10B as interpreted by the decision in the case of HUL. Second Part: Our Submissions: Decision in the case of Tata BP Solar distinguished 1. The appeal before the Honourable Tribunal had arisen out of order passed u/s 263 wherein the issue raised was confined only to the inclusion of Turnover of EOU enjoying deduction u/s 10 B in the total turnover of the assessee as a whole. The contentions of the assessee to also include profit and export turnover of the EOU enjoying deduction u/s 10 B on grounds of parity and weightage to the three variables in the prescribed formula were objected to by the DR in that case. 2. The decision has been driven by the erroneous assumption that Section 10 B was an exemption section and not deduction even after the amendment w.e.f. 1st April, 2001. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l in the case of Symantec Software India (P.) Ltd. Vide ITA No. 787/PN/09 and ITA No. 805/PN/09 in support of the said 'parity principle'. Para 29 to 31 of the said judgment of the High court of Karnataka in the case of Tata Elxsi Ltd ( supra ) are relevant in this regard. At the end, Learned Counsel for the assessee summed up by stating that the - (1) The export turnover definition explanation given in Section 80HHC is broad enough to cover the export sales of EOU undertakings as it refers to the expressions of any goods or merchandise to which this Section applies. (2) The restrictions mentioned in clause (b) of Section 2 of 80HHC are not applicable to the assessee's case. Therefore, the sub-section 2(a) supports the inclusion of export sales of EOU unit for computing deduction u/s.80HHC in which assessee's unit. (3) Inclusion of export sales EOU turnover is become the logical requirement for applying formula as profits of the EOU undertaking. (4) Ones the export sale of the EOU is included in the export turnover of the assessee in view of the principle of parity which is approved by various High Courts, Tribunal discussed above. The total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose of Section 80HHC of the Act; (2) Scope of assessee level export turnover definitions given in Section 80HHC explanation (b); and (3) The principal of parity examining the facts of the present case in the light of the above discussed scope. All these three aspects are taken up on the succeeding paragraphs. (1) Scope of the provisions relating to (a) entry of the EOU related data into the computation of total income and (b) inclusions of profits and gains of EOU units in the profits of the business of the assessee for the purpose of Section 80HHC of the Act: 42. The provisions of section 10B of the Act are amended by the Finance Act, 2000 w e f 1.4.2001 and so are the provisions of Section 80A (4) w e f 1.4.2003. These amended provisions contains adequate expressions in them to infer and interpret that the provisions of section 10B are the 'deduction' provisions and no longer the exemptions provisions. The judgment in the case of Hindustan Unilever Ltd. ( supra ) is relevant in this regard as discussed in detail in the preceding paragraphs and it provided a stamp of seal on such interpretation. It is so notwithstanding the location of the section 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d VIA respectively belong to the same genus. 44. Consequences of the said scope of the provisions are (i) that profits of the EOU unit shall form part of the head of income profits and gains of business or profession (ii) therefore, the same is includible in the profits of the business of the assessee, which is defined in Explanation (baa) to section 80HHC of the Act, which reads as follows:- (baa) profits of the business means the profits of the business as computed under the head profits and gains of business or profession as reduced by,- . 45. Once impugned profits of the EOU unit of 10B form part of the 'profits of the business', the reductions if any are to be allowed only in accordance with Clause (1) and (2) of the said Explanation (baa). That is how the profits of the EOU unit enter the formula devised for computation of allowable deduction u/s 80HHC of the Act. However, in view of the provisions of section 80IA(9) of the Act as explained by the binding judgment of Bombay High court in the case of Associated Capsules (P.) Ltd. ( supra ), the quantity of deduction shall not exceed the profits and gains of such eligible business. In the instant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Customs Act, 1962 48. From the above, the legislature has used the expressions the sale proceeds received in, or brought into, India by the assessee' and the expressions 'by the assessee' deserves emphasis as it connotes that the 'export turnover' should be of assessee level. Meaning thereby, the assessee's level 'export turnover' needs to be considered. The expression is wide enough to include the export sales of the 'EOU unit'. Further, by the use of expression 'any' before 'goods and merchandise' all the goods and merchandise is covered. However, the restriction apply to such goods and merchandise, which are listed in clause (b) of Section 80HHC (2) i.e. Mineral oil and minerals and ores (other than processed minerals and ores specified in 12th Schedule to Act. 49. The reasoning given in the order of the tribunal in the case of Tata BP Solar India Ltd. ( supra ) is required to be mutated considering the subsequent decisions/judgment of the higher judicial fora. This decision of the Tribunal i.e. inclusion in total turn is ok and not okayed the inclusion in these export turnover is not in harmony with the well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnover (excise duty and sales tax at par) u/s. 80HHC (3) (b) of the Act. Lakshmi machine Works ( supra ) and another Bombay High Court decision in the case of Gem Plus Jewellery India Ltd. ( supra ) which was delivered in the inclusion of freight insurance from the total turnover for the purpose of Section 10A, came to clear knew about principle of parity. They also discussed decision in the case of ITO v. SAK Soft Ltd. [2009] 30 SOT 55 (Chennai) (SB), before coming to the conclusion for upholding the 'principle of parity' in favour of the assessee. Para 10- 11 of the said judgment of the Karnataka High Court are relevant and the same are reproduced as under (page 59 page 63 of the judgment), - The formula for computation of the deduction under section 10A would be as under: Profits of the business Export turnover / Total turnover From the aforesaid judgments, what emerges is that, there should be uniformity in the ingredients of both the numerator and the denominator of the formula, since otherwise it would produce anomalies or absurd results. Section 10-A is a beneficial section. It is intended to provide incentives to promote section. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is excluded in computing the export turnover is included while arriving at the total turnover, when the export turnover is a component of total turnover, such an interpretation would run counter to the legislative intent and impermissible. If that were the intention of the legislature, they would have expressly stated so. If they have not chose to expressly define what the total turnover means, then, when the total turnover includes export turnover, the meaning assigned by the legislature to the export turnover is to be respected and given effect to, while interpreting the total turnover which is inclusive of the export turnover. Therefore the formula for computation of the deduction under Section 10-A, would be as under: Profits of the business Export turnover / (Export turnover + Domestic Turnover Total Turnover 11. In that view of the matter, we do not see any error committed by the Tribunal in following the judgments rendered in the context of Section 80HHC in interpreting Section 10-A when the principle underlying both these provisions is one and the same. Therefore, we do not see any merit in these appeals. The substantial question of law framed is answered in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mula discussed above. Inclusion of the export turnover in the total turnover, denominator was advocated by many decisions/judgments including the Tata BP Solar India Ltd. ( supra ). Further, considering the 'principle of parity', once a constituent is added to the total turnover, the denominator, the same has to be included to the 'export turnover', the numerator. This line of computation gets support not only from the judgment of the Karnataka High Court in the case of Tata Elxsi Ltd. ( supra ) but also by the various decisions of the Tribunal including the decision by this Pune Bench. In the case of Patni Computers Systems Ltd for the Ay 2002-03 and 2003-04, the Tribunal came across a case of exclusion of profits and turnovers of the eligible unit u/s 10A of the Act for the purpose of determining the allowable deduction u/s 80HHF of the Act and the Tribunal upheld the principle of parity and decided the case in favour of the assessee. Considering the above and for want of consistency, we are of the opinion, the principle of parity should be maintained in matters of said inclusion or exclusion, as the case may be, of the constituents of the numerator and deno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this regard, the Counsel stated that this issue is covered in favour of the assessee by the special bench decision in the case of ITO v. Ekta Promoters (P) Ltd [2008] 113 ITD 719 (Delhi) Ld counsel argued that the CIT(A) erred in concluding without discussion that the amended provisions apply to the AY 2001-02 and the refunds received after the amendment brought out by the Taxation Laws (Amendment) Act, 2003 w.e.f 1st June, 2003. The Learned DR relied on the orders of the revenue. 56. We have heard the parties and perused the orders of the revenue. The CIT(A) confirmed the levy of interest u/s 234D on the ground that the refund was granted to the assessee on 19.6.2003 i.e. after the amendment became effective on 1.6.2003. In this regard, we have also perused the said special bench decision in the case of Ekta Promoters (P) Ltd ( supra ). The perusal of the said decision revealed that the ratio of the same covers the case under consideration. In view of the importance, the conclusion part of the said order is reproduced as under. Section 234D inserted in the Income tax Act, 61, by the Taxation Laws (Amendment) Act, 2003 w.e.f 1st June, 2003, being substantive in natur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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