TMI Blog2004 (10) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... se of appellant itself for earlier years. No error has been pointed out therein. Accordingly, no interference is considered necessary. 3. In ground No. 2 the dispute relates to the amount of Rs. 13,16,39,997 which the Assessing Officer has treated as capital expenditure, but the same was directed to be allowed as revenue expenditure by the ld. CIT(A). 4. The respondent assessee before us has contended that in the appellant's own case in ITA No. 1584/JP/93 for assessment year 1992-93 dated 16-6-2000, in which one of us, the ld. Judicial Member was also a party, the issue of claim of deduction of interest has been held to be covered by the decision of the Tribunal in the case of Tata Chemicals Ltd. v. Dy. CIT [2000] 72 ITD 1 and accordingly the order of the ld. CIT(A) has been upheld. It was, therefore, prayed that the ITAT may follow its own order for assessment year 1992-93 and uphold the order of ld. CIT(A) for this year also. We, therefore, asked the ld. Authorised Representative to take us to the findings of the Tribunal in the said decision and show if the Tribunal has considered the material aspect of the issue as to whether the expenditure so incurred on account of intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the same. There is complete interconnection, inter-lacing and inter-dependence between the two units. Facts of both the years are same and the Tribunal has already allowed the deduction in assessee's own case for the earlier year. Reliance has been placed on the following decisions:- India Cements Ltd. v. CIT [1966] 60 ITR 52 (SC). CIT v. Kedarnath Jute Mfg. Co. Ltd. [1971] 82 ITR 363 (SC). Tata Chemicals Ltd.'s case. It was, therefore, urged that the appeal of the revenue needs to be dismissed. 7. The hearing in this case was completed on 30-11-2000 and the parties were directed to furnish synopsis of their arguments. From the submissions made, it was found that both the parties have furnished further information on which certain clarifications were required. The case was accordingly re-fixed for hearing and parties were directed to furnish the material placed before the ld. CIT(A) in deciding the assessee's appeal No. ITA 185/93-94 for assessment year 1992-93 and any further material for substantiating their claims. The ld. Departmental Representative has furnished a written note dated 12-12-2000, which reads as under: "During the course of hearing I was directed to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection and installation of plant and machinery for new unit which is evident from the details of interest submitted by the Assessing Officer, copy of which is also enclosed. Regarding the deduction under sections 80HH 80-I it can be submitted that in these years the assessee was in heavy losses therefore no such claim was made. However, from the copy of computation of income for assessment year 1995-96, attached to this letter, it is evident that the assessee has claimed deduction under section 80-IA right from assessment years 1995-96 to 1999-2000. All these facts were not considered by the Hon'ble ITAT while deciding the appeal for assessment year 1992-93 because these facts might have not been brought to the notice of the Hon'ble Bench at that time. In this connection, ratio of decision of Apex Court report at 155 ITR 120, 124 is applicable. In view of aforesaid discussion the assessee's claim regarding interest and depreciation deserves to be rejected and the Assessing Officer's order may kindly be restored." A further note dated 9-1-2001 has also been placed by the ld. Departmental Representative as under: "Kindly refer to my earlier submission dated 12-12-2000 submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus the existence of a new unit or separate identity of the units for the purpose of sales tax, excise duty would not make the assessee dis-entitle to claim interest on borrowed capital. Enough light has been thrown on the concept of same business for the purpose of section 36(1)(iii) in case of M/s. Tata Chemicals Limited reported at 72 ITD 1 (Mum.). In this case a number of judicial pronouncements were considered and the fertilizer unit at Babrala (UP) and the chemical manufacturing unit at Mithapur (Gujarat) as well as detergent business at Pitampur (MP) were all considered to be constituted one composite or single business. In the result interest in respect of the new unit was considered as allowable under section 36(1)(iii). For arriving at this conclusion the place of the units was considered to be irrelevant and concept of same business was decided on the basis of unity of control indicated by interlacing, interdependence on account of existence of common management, administration, etc. Need not to emphasize that in the aforesaid case decided by Mumbai Bench also the identity of the units, their sales tax registration numbers, excise registration numbers were different ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cisions considered by Mumbai Bench and Jaipur Bench are relevant for deciding the issue specially the decision of Hon'ble Supreme Court reported at 220 ITR 185 and Rajasthan High Court reported at 169 ITR 499 should be considered. The written submission of learned DR is silent upon relevant facts for deciding the issue i.e. unity of control, interlacing, interconnection etc. on the basis of which the matter was decided earlier and is being: requested to be decided now also. Therefore Hon'ble ITAT is requested to uphold the order of CIT(A) and follow its own order for assessment year 1992-93." 9. Shri Sanjay Jhanwar present on the last date of hearing on 14-2-2001 has admitted that the ld. Departmental Representative has placed the copy of whole of the material filed before the ld. CIT(A) in assessee's appeal for assessment year 1992-93 and that there is no other material available with him for deciding the issue. Accordingly the appeal was treated as heard. 10. Rival submissions have been heard in the light of material placed on record and case laws referred by both the parties. The Tribunal in ITA No. 1584/JP/93 in respondent's case for assessment year 1992-93 decided the is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on accounts for the year ended 31st March, 1993 as per Schedule 17 to the Balance Sheet, which forms an integral part thereof. Under the head "Notes on accounts" at sl. No. 9, the assessee also disclosed that additions to capital work in progress includes the following: ------------------------------------------------------------------------ Upto For the year Total upto 31st March, ended on 31st 31st March, 1992 March, 1993 1993 Rs. Rs. Rs. ------------------------------------------------------------------------ Salaries, Wages and Allowances 8,10,744 25,36,812 33,47,556 Contribution to PF Other Funds 1,01,614 2,06,222 3,07,836 Workmen Staff welfare 39,293 2,01,520 2,40,813 Travelling expenses 11,34,747 11,82,471 23,17,218 Consultancy, professional and legal charges 6,60,503 76,05,930 82,66,433 Share issue expenses 49,21,635 49,21,635 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l institutions and banks is stated to be at Rs. 13,69,87,068 which was charged to the Capital Work in Progress account and treated as capital expenditure by the assessee after reducing the receipt/income of interest earned by it from banks on fixed deposits and on loan contract etc. amounting to Rs. 53,47,072. It is pertinent to note here that the said income of interest and the income on account of rent received, material in process and misc. income etc. as per details given in the notes to accounts was not included and declared as income of the respondent assessee in the Profit and Loss account prepared by it but the same was reduced from the cost of capital work in progress which is an investment account of the respondent but reflected as Fixed Assets in the Balance Sheet prepared by it. It is this net amount of Rs. 13,16,39,997 (13,69,87,068 - 53,47,072) that has been claimed as deductible under section 36(1)(iii) of the IT Act, in the computation of income filed with the return. The assessee himself is found to have stated the payment of interest for borrowings is for the purpose of new unit, which in this case is M/s. Neer Shree Cement. The assessee did not say that the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. Mangalam Cement. We also find that no part of the expenditure incurred in the new business has been charged to the profit and loss account of the assessee's existing business. As a matter of fact, all expenses including expenses on salaries, wages and allowances, P.F. and other funds, workmen and staff welfare, travelling expenses, professional and legal charges, raw material consumed, stores and spares consumed, other manufacturing expenses, insurance, rents, rates and taxes, research and development expenses, auditors' remuneration, interests and fees paid, repairs of plant and machinery, bank charges and miscellaneous expenses etc. incurred in setting up and taking trial runs of the new business have not been reflected as expenses or assets of the existing business but charged towards investment under the head 'Capital Work in Progress' account. The assessee even did not furnish the complete balance sheet with its all schedules and annexures including Schedules 1 to 16 forming part of the Balance Sheet and Profit and Loss account. It even did not place on record, the directors report and also the report of the auditors for either of the business, though a separate audit was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fixed loans at Rs. 13,69,87,069, upfront fee and commitment charges at Rs. 92,62,000 and bank charges at Rs. 25,15,936 to the capital work in progress account and not to the profit and loss account of the existing unit, the flow of funds or management thereof cannot be said to be in common for both the businesses. The ld. CIT(A) also appears to have accepted the submission of the assessee that the setting up of a new manufacturing cement unit is at the same place which was for all practical purposes an expansion/extension of the existing business and the business organisation, fund, administration and management of both the units, and production of both the units is to be considered the production of the assessee company merely on the basis of a written note submitted by the assessee's counsel and there has been no application of mind to the correct facts for reaching to the conclusion that there is a complete interconnection, interlacing and interdependence between the two units of the assessee company. All this appears to have been done without taking any material on record by him. The assessee even did not place the administrative set up, the flow of funds or utilisation thereof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e business for holding that the disallowance of interest of Rs. 35,13,55,815 is not justified. All the activities were carried on by that assessee in the same name and style and unity of control was established beyond any doubt by noticing existence of common fund, the position with regard to administration, management and staff, which led to the satisfaction that unity of management and control was with that assessee besides accounting set up and linking of various accounts through head office account and also various aspects of the matter. But in the case before us, the assessee has failed to produce any such material from which an inference could be drawn that unity of control, interlacing, interconnection or interdependence etc. was with the respondent assessee for both the businesses or for coming to the conclusion that it was expansion of the existing business despite sufficient opportunity was given to him. The burden lay on the assessee to show that both the activities constitute a single or composite activity or it was the same business. This has not been discharged. Even if the terms to be manufactured in both the units were to be the same, it shall not be an appropriate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 36(1)(iii) as a revenue expenditure. The ld. CIT(A) appears to have erroneously allowed the deduction to the respondent assessee without appreciating correct and complete facts of the case. Accordingly the decision taken by the ld. CIT(A) is reversed and the Assessing Officer is directed to withdraw the deduction. He shall however examine the facts for allowing depreciation on this amount and give opportunity to the assessee before allowing any depreciation claim, if any, found to have been made before him. Besides this he shall also examine the income of Rs. 53,47,072 earned by the assessee from interest from banks etc. and loan contracts in the light of decision of the Supreme Court in the case of Tuticorin Alkali Chemicals Fertilizers Ltd. and bring the same to tax accordingly. 13. In the result, the appeal of the revenue is allowed partly. ORDER Per Shri Dinesh K. Agarwal, Judicial Member.- I have carefully gone through the order proposed by the learned Accountant Member, but I have not been able to pursue myself to concur with the conclusion reached in reversing the order of the CIT (Appeals), who has allowed the deduction of interest claimed under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee did not start any production upto the close of the year, the payment of interest, therefore, was to be considered as capital expenditure in view of the decision of Hon'ble Supreme Court of India in the case of Challapalli Sugars Ltd. It was also contended by the ld. D/R that the interest expenditure has been incurred for acquiring capital assets and that is why the assessee has itself rightly capitalized the amount, though subsequently claimed as allowable under section 36(1)(iii) of the Income-tax Act, therefore, the disallowance of deduction of the assessee's claim under section 36(1)(iii) should be restored. Reliance has been placed on the following decisions:- Aditya Mills' case Assam Bengal Cement Co. Ltd. Indian Molasses Co. (P.) Ltd. Tuticorin Alkali Chemicals Fertilizers Ltd. 6. On the other hand, the ld. A/R submitted that the assessee is in business since 1981. It has set up a new unit at the same place, which is adjacent to the existing unit. Management, control, funds and organizers for both the units are the same. There is complete inter-connection, inter-lacing and inter-dependence between the two units. Therefore, the facts of both the years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as decisive or conclusive in relation to determination of the question relating to taxability of an expenditure under the provisions of the Act. If on a true and correct interpretation of the relevant provisions of law, the assessee is entitled to deduction of a particular expenditure, manner and mode of making an entry in the books of account will not adversely affect the allowability thereof. The method of accounting and the manner of making a particular entry are two different things. This view finds support from the decision of Hon'ble Supreme Court of India in the case of India Cement Ltd., Kedarnath Jute Mfg. Co. Ltd. and Tuticorin Alkali Chemicals Fertilizers Ltd. in which it was held at pages 183-184 as under:- "It is true that this court has very often referred to accounting practice for ascertainment of profit made by a company or value of the assets of a company. But when the question is whether a receipt of money is taxable or not or whether certain deductions from that receipt are permissible in law or not, the question has to be decided according to the principles of law and not in accordance with accountancy practice. Accounting practice cannot override section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a theatre of its own for the purpose of exhibiting films. The assessee has borrowed monies on interest for the purpose of the construction. On these facts, the Rajasthan High Court held that it was a case of an extension of an existing business and not one of setting up a new business. The interest was directed to be allowed. In CIT v. Malwa Vanaspati Chemicals Co. Ltd. [1997] 226 ITR 253/92 Taxman 262 (MP), the company was engaged in the manufacture, processing and sale of vegetable oils and chemicals. It put up a new unit for the manufacture of H.J. and Tobias acid. For purchase of machinery for the new unit, the assessee took loan from M.P. Financial Corporation and paid interest on the same. The claim was negatived by the ITO. The CIT(A) held it was a case of expansion of existing business. The Tribunal concurred and found that : (i) the new unit was put up in accordance with the objects-clause of the company; (ii) the loan was taken for expansion of the business; (iii) the assessee manufactured chemicals and the new unit was to manufacture H.J. and Tobias acid used in the dye and intermediate industries; and (iv) the funds were common, the board of directors was the same, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsistent view of the different Benches of the Tribunal including Jaipur Bench in other cases and in the assessee's own case for the immediately preceding year, the amount of interest of Rs. 13,16,39,997 paid on borrowed capital which has been capitalised in the books of account as part of actual cost of the new machineries of the new unit of the assessee-company can be claimed as deduction under section 36(1)(iii) of the Income-tax Act." 2. We direct the registry to place the matter before the Hon'ble President, ITAT. Per Shri B.R. Jain, AM- Following questions of difference are also referred in terms of section 255(4) of the Income-lax Act, 1961 for resolving the difference of opinion:- "(i) In view of the findings and fact of the matter that material facts and documents were not placed before the Tribunal in deciding the assessee's appeal for assessment year 1992-93 and thus there being direction to argue the case on merit and finding arrived that Tribunal appears to have allowed the appeal in favour of assessee per incuriam in assessment year 1992-93, was it imperative to follow such a decision for deciding the issue for the relevant year. (ii) Whether on examination o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the new unit of the assessee company can be claimed as deduction under section 36(1)(iii) of the Income-tax Act." 2. The learned Accountant Member, on the other hand, proposed the following four questions for consideration: (i) In view of the findings and fact of the matter that material facts and documents were not placed before the Tribunal in deciding the assessee's appeal for assessment year 1992-93 and thus there being direction to argue the case on merit and finding arrived that Tribunal appears to have allowed the appeal in favour of assessee per incuriam in assessment year 1992-93, was it imperative to follow such a decision for deciding the issue for the relevant year. (ii) Whether on examination of the facts, material and merits of the case and in view of the undisputed findings recorded in the order of the Accountant Member to the effect that there was no unity of control, interlacing, interconnection and interdependence between the two units and the assessee has not made out a case of dovetailing of the business, could it be said that the assessee's case is covered by the decision of Tribunal in the case of Tata Chemicals Ltd. v. DCIT 72 ITD 1 (Mum.) so as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 36(1)(iii) of I.T. Act. 5. The Assessing Officer vide his order dated 30-12-1993 negatived the claim of the assessee with the following observations: "11. The assessee company has claimed deduction to the tune of Rs. 13,16,39,997 in respect of interest expenditure which has been capitalized in the books of account. Scrutiny of Note No. 5 of the revised return and also the note on such expenditure filed at page Nos. 13 to 15 revealed that the amount is utilized for purchase of fixed assets for the company. According to the prevalent accounting practices, this interest would form part of the cost of fixed assets, on which depreciation is allowable and, therefore, this is in the nature of capital expenditure. Further the assessee has treated the interest as capital expenditure in the books and only for computation of income, the interest has been claimed as revenue expenditure. In view of the above reasons and following my earlier findings as given in the assessment year 1992-93, the claim of the assessee company is rejected and, therefore, the amount so claimed is not allowed to be deducted from the total income." It is clear from above that he followed his order for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction, inter lacing and inter dependence between the two units of the assessee company. Therefore, the decision of the CIT(A) that new unit is extension of existing business is without any basis and not supported with good reasoning and material. The D.R. accordingly prayed that the decision of the I.T.A.T. for assessment year 1992-93 be not applied. 8. The learned authorized representative of the assessee vide his counter reply dated 18-12-2000 submitted as under: (i) That claim of interest under section 36(1)(iii) of I.T. Act is to be allowed as capital was used for the "purpose of business or profession". Therefore only thing to be proved is whether capital was borrowed for purposes of business of the assessee. It is irrelevant whether capital was utilized for setting up of a new unit or for purposes of existing unit. The different excise number would not make any difference. (ii) The assessee relied on the decision of Tata Chemicals Ltd. wherein after considering large number of judicial pronouncements, the Bench had held that all the units are part of the same composite and single business. The interest was allowed as a deduction. In arriving at above conclusion, the pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 and Notes on accounts at sl. No. 9 and took note of comparative figures with earlier two accounting years (reproduced in para 11 of his proposed order) and came to the conclusion that the assessee had made investment in new unit by raising loans and by "contributing its own margin as well". The assessee charged interest of Rs. 13,69,87,068 to capital work in progress after deducting Rs. 53,47,072 which was interest earned by the assessee. The assessee thus admitted that payment of interest for borrowing was for purposes of new unit i.e., M/s. Neer Shree Cement. It was not claimed that assessee had utilized borrowed capital for expansion of existing business or for acquiring fixed assets in such business. The learned Accountant Member then referred to two separate registration numbers allotted by the Excise department to two units. The learned Accountant Member further found that fixed assets were transferred at cost as was evident from the facts disclosed in "Significant Accounting Policy" in Schedule 17 of the Balance Sheet. The assessee thus did not consider such a transfer as part of same block of assets as held by the respondent assessee in its block but made it a separate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be in common for both the businesses. The CIT (Appeals) accepted that new unit was set up at the same place and was expansion of existing business and had common funds, administration and management merely on the basis of written note of the assessee without any application of mind to correct facts. It was done without taking material on record. The assessee did not explain administrative set up or evidence of flow of funds or utilization thereof or details of management etc. for establishing its claim nor such details were available with the learned CIT (Appeals) when issue in favour of assessee was decided for assessment year 1992-93. The learned Accountant Member further observed that assessee's submission that production of both the units was production of assessee company appear to be a gossip in view of specific information appended to the notes given in schedule 17 of the balance sheet. The finding of the learned CIT (Appeals) was held by the learned Accountant Member to be factually incorrect. The Bombay Bench of the Tribunal while deciding the issue in the case of Tata Chemicals Ltd. had considered all facts while coming to the conclusion that two units of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issions of the learned Departmental Representative that material facts were not considered by the Income-tax Appellate Tribunal in assessee's case for assessment year 1992-93 and, therefore, above decision could not be applied to the case in the year under consideration. The learned Judicial Member noted argument of Departmental Representative that principle laid down by the Hon'ble Supreme Court in the case of Challapalli Sugars Ltd. were applicable to the case. The learned Judicial Member further considered the effect of entries made by the assessee capitalizing the interest. He held that manner of making particular entry in the books of account or accounting practice was not very important and question of deduction of interest was to be decided according to principle of law. For the above proposition, learned Judicial Member drew support from decision of Hon'ble Supreme Court in the case of India Cements Ltd., Kedar Nath Jute Mfg. Co. Ltd. and the case of Tuticorin Alkali Chemicals Fertilizers Ltd. He accordingly concluded that deduction of interest claimed by the assessee could not be disallowed on account of entries made in the books of account. From the assessment order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, the assessee took loan from M.P. Financial Corporation and paid interest on the same. The claim was negatived by the ITO. The CIT(A) held it was a case of expansion of existing business. The Tribunal concurred and found that : (i) the new unit was put up in accordance with the objects-clause of the company; (ii) the loan was taken for expansion of the business; (iii) the assessee manufactured chemicals and the new unit was to manufacture H.J. and Tobias acid used in the dye and intermediate industries; and (iv) the funds were common, the board of directors was the same, the loan was borrowed in the name of the assessee; existing funds were also utilized for the new unit; expenditure incurred were reflected in the profit and loss account and balance sheet of the assessee-company. According to the Tribunal, the above facts showed that the business were one and the same. The High Court upheld the finding of the Tribunal." The learned Judicial Member held that as claim of similar deduction in assessee's own case was allowed for assessment year 1992-93, therefore, in consistent with the above view as also in the light of decision of Jaipur Bench of Income-tax Appellate Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up a factory for manufacturing of straw-boards by using the waste from the rice and dhall mill. The Hon'ble High Court held that it was only a case of expansion of business and that interest paid on monies borrowed was allowable as deduction. The Bench further relied upon and followed decision of Hon'ble Rajasthan High Court in the case of CIT v. Shah Theatres (P.) Ltd. [1988] 169 ITR 499 where assessee was engaged in the business of exhibition of motion pictures and in the year of account started construction of a theatre of its own for the purpose of exhibiting films. The assessee had borrowed money on interest for purpose of construction. On these facts, Rajasthan High Court held that it was a case of extension of an existing business and not one of setting up of a new business. Another case of Hon'ble M.P. High Court was cited to hold that in case of extension of business, interest was to be allowed. The other circumstances, for holding that new unit was part and parcel of same business, were also noted in the cited case. 16. Thus when the Bench held in the case of the assessee for the assessment year 1992-93 that the matter in the assessee's case was fully covered by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o expect that those exercising judicial functions will follow the reason or ground of the judicial decision in the earlier cases on identical matters. Classification of particular goods adopted in earlier decisions must not be lightly disregarded in subsequent decisions, lest such judicial inconsistency should shake public confidence in the administration of justice. It is, however, equally true that it is vital to the administration of justice that those exercising judicial power must have the necessary freedom to doubt the correctness of an earlier decision if and when subsequent proceedings bring to light what is perceived by them as an erroneous decision in the earlier case. In such circumstances, it is but natural and reasonable and indeed efficacious that the case is referred to a larger Bench. This is what was done by the Bench of two members who, in their reasoned order, pointed out what they perceived to be an error of law in the earlier decision and stated the points for the President to make a reference to a larger Bench." 18. Their Lordships of the Hon'ble Supreme Court has used appropriate words like disruption of judicial discipline and subversion of judicial proces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rector nor there are separate auditors. Both the units are held by the same company and, therefore, question of having separate auditors do not arise. In the Directors Report there is reference to expansion of business. Shri D.P. Maloo was the Managing Director. For obtaining loans also machinery and plant of old unit has been mortgaged. Is it the case of the revenue that there was no inter lacing or inter connection between the two units? When facts were not challenged by the Assessing Officer or other revenue authorities, could the Tribunal for the first time treat the case as unproved and put the burden on the assessee? In my humble opinion not. A mountain of a molehill is attempted to be on capitalizing of certain expenses. The learned Judicial Member has effectively met this obligation in his proposed order. Salary wages, upfront fee and some other charges were rightly capitalized and shown in work in progress. I see nothing wrong in the above approach. Much have been talked about excise numbers of old and new unit. These are as follows: "Old Unit - AABCM 6602Q-XM001/2/CH-25/JLR/92 New Unit - AABCM/6602Q-XM002/1/RII/CH-25/JLR/93 In my humble opinion, the number is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d his order in view of Tata Chemicals. of Decision of Tata Chemicals. 3. ITAT in AY 1992-93 did not say ITAT held that after examining that facts of Tata Chemicals the facts of the case, it is is identical to the fact of of opinion that assessee's case the assessee. is covered by decision of Tata Chemicals. (Refer point No. 4). 4. Assessee made investment in Neer Shree Cement is the name the business in name style given to the second plant. of Neer Shree Cement It is a unit of the assessee by raising loan and company. The loans and Capital Contributing its own margin. by way of Right issue, was raised by the company itself. 5. Income on account of rent, Such income is offered by material in process and misc. the company under the head house income etc. not included and property, income from other declared by assessee. sources and treatment explained in notes to return. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bracket since plant was under trial run and not started commercial production. 10. Expenditure on workman, Expenses on workmen, raw raw material administration material and administration of new business not reflected which directly relate as expenses of existing to installation of new plant business. has been Transferred/allocated to capital work in progress in accordance with accounting policy followed for accounting of expenditure during construction period. 11. Complete B/Sheet with Complete balance sheet with schedule to accounts not schedule to accounts filed furnished. with return. Hon'ble member never required to file the same. 12. Directors/Auditors report There is no separate director/ not placed on re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecifically mentioned that funds are common or separate. the cash book, ledger, sub-ledgers, stock register, vouchers and other details were produced and verified. The utilization of the fund has been accepted by ld. A/M as partly by raising loans and by contributing its own margin at page 10. Further from balance sheet itself it is evident that funds raised from right issue Rs. 25.53 crores, term loan of Rs. 105.23 crores internal accrual of around Rs. 10 crores were used in new plant, which shows that the funds were common. The proceeds of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly one business are incurred for investment of cement, which is carried in new business and not in out since 1981. No new business existing business or was started. At the same expansion of existing factory Premises second business. plant of 6 lakhs TPA was installed. Industrial licence specifically mentions about effecting substantial expansion. The source of raw material that is limestone mines is one, purchase of both units are common, Power connection is one, which was enhanced from 12,000 KVA to 29,000 KVA from 16-4-1993. There is no investment in new business but only an ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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