A.D. Jain, Judicial Member:
1. These are cross appeals for Assessment Year 2006-07 against the Order dated 07.10.2010 passed by the Ld. CIT (A)-VIII, New Delhi.
2. ITA No.5527/Del/2010 has been filed by the assessee whereas ITA No.5791/Del/2010 has been preferred by the department.
3. In ITA No.5527/Del/2010, the following grounds have been taken by the assessee:-
"1 (i). That on the facts and circumstances of the case, the Ld. CIT (A) having confirmed the disallowance of the claim of interest to the extent of Rs.14,82,540/- as attributable to earning of dividend income on mutual fund, there is no case of any further disallowance in terms of rule 8D as these rules are not relevant in the year under reference.
(ii) That these rules are not in conformity with provisions of sec.14A and as such these rules are illegal and invalid.
(iii) That there being no dispute or finding that there is a case of any expenses other than claim of interest to the extent of Rs.14,82,540/- relating to issue of dividend income, and as such the CIT (A) was not justified in restoring the matter back to the Assessing Officer to consider any such disallowance in terms of sec.14A or rule 8D.
2 (i) That on the facts and circumstances of the case, the lower authorities are not justified in not accepting claim of depreciation to the extent of Rs.44,80,000/- in respect of property being used for the purpose of business.
(ii) That finding of the CIT (A) that the property was not in possession and use of assessee is incorrect and without proper appreciation of facts."
4. In ITA No.5791/Del/2010, the department has raised the following grounds:-
"1. The order of the learned CIT (Appeals) is erroneous and contrary to facts and law.
2. On the facts and in the circumstances of the case and in law, the learned CIT (Appeals), New Delhi has erred in directing the A.O. to treat income of Rs.4,04,382/- as capital loss as against business loss treated by the A.O.
2.1 The Ld. CIT (A) ignored the fact that the main business of the assessee is trading in shares and securities.
3. On the facts and in the circumstances of the case and in law, the learned CIT (Appeals) has erred in deleting the addition of Rs.5,80,552/- made by the A.O. on account of written back liabilities.
3.1 The Ld. CIT (A) erred in accepting the additional evidences, when due opportunities were provided to the assessee during the course of assessment proceedings.
4. On the facts and in the circumstances of the case and in law, the learned CIT (Appeals), has erred in deleting the addition of Rs.4,91,02,321/- made by the A.O. on account of unexplained credits in the bank account of the assessee.
4.1 The Ld. CIT (A) erred in accepting the additional evidences when due opportunities were provided to the assessee during the course of assessment proceedings."
5. In the assessee's appeal, Ground No.1 states that since the Ld. CIT (A) has confirmed the disallowance of the claim of interest to the extent of ` 14,82,540/- as attributable to earning of dividend income on Mutual Fund, no further disallowance can be made in terms of Rule 8D of the IT Rules, since the said Rules are not relevant for the year under consideration.
6. The Assessing Officer made a disallowance of ` 2,37,22,905/- u/s 14A of the Act as against deduction of interest expenditure of ` 11,42,17,593/- claimed by the assessee. The Ld. CIT (A) directed the Assessing Officer to examine the sources of investment and then to decide the amount of disallowance in terms of the directions given in the first appellate order for Assessment Year 2005-06. The CIT (A) has observed as follows:-
"4.4 I have carefully considered the arguments made on behalf of the appellant company and the findings recorded by the ld. A.O. On consideration, I find that there is no merit in the argument of the ld. Counsel that no disallowance was called for u/s 14A of the IT Act, 1961. The validity of provisions of section 14A has been upheld in all the judgments available on the subject, even the Hon'ble Bombay High Court has upheld this position of law in the case of Godrej and Boyce Manufacturing Co. Ltd. Therefore, there should not be any hesitation in holding that the provisions of Section 14A of the IT Act, 1961 are attracted to the facts of the present case keeping in view the huge dividend income of Rs.11672621 claimed exempt u/s 10 (35) of the Act. There is also no dispute with respect to the disallowance of Rs.1482540, as the ld. Counsel himself admits that the same was directly and exclusively relatable to the investment activities of the appellant company. Now the issue to be decided is as to whether any disallowance is called for in relation to the borrowed funds which have been utilized by the appellant company for its regular business activities and the investment activities. The A.O. has made a detailed and elaborate discussion about the source of funds and utilization thereof and thereafter only has come to the conclusion that the borrowed funds have been mixed up and utilized for common purposes. Thus, the issue is as to how to determine and element of interest and indirect expenses which may be relating to the investment activities and earning of exempt income. According to the A.O., rule 8D provides one of the methods for determining the element relating to the investment yielding exempt income, particularly, in situations where the funds are mixed up and pooled together. In my view, this option has to be kept in view even if the provisions of rule 8D are to take effect from a future date. Further, I find that a similar situation had arisen before my ld. Predecessor while dealing with the appeal for the A.Y. 2005-06 in the assessee's own case. After detailed discussion of the relevant facts, my ld. Predecessor disposed off the issue in question in Para 6.9 of his order as under:-
"6.9 Considering that the computation is based on the facts and figures of the Balance Sheet and the PandL A/c for the year under consideration, the A.O. is directed to verify the facts and figures on all the investments the income from which shall lead to exempted income. The A.O. is directed to compute the disallowable amount under Rule 8D(2)(ii) and 8D(2)(ii). In case there is difference of opinion between the A.O. and the appellant on any item or manner of inclusion of that item under various components of Rule 8D(2), reasons for adoption of particular manner shall be given in the order giving effect to this order. Prima facie, the entire exercise shall result into enhancement of the disallowable sum u/s 14A of the Act."
4.5 In view of the above and looking to the commonality of facts and the argument of the ld. Counsel that one of the way of resolving the issue was to issue appropriate directions to the A.O. to work out the amount disallowable u/s 14A of the Act as it has been done by my predecessor in A.Y. 2005-06, the A.O. is directed to examine the sources of investment and then decide the amount of disallowance in terms of directions given by my ld. Predecessor for the A.Y. 05-06."
7. The ld. Counsel for the assessee has drawn our attention to the Tribunal Order for Assessment Year 2005-06 dated 08.12.2010. A copy thereof has been placed by the assessee at pages 49-60 of the assessee's paper book. While allowing the assessee's appeal on this issue, the Tribunal has held as follows:-
"10. We have heard the rival contentions and perused material on record. Hon'ble Bombay High Court in the case of Godrej Boyce Manufacturing Co. Ltd. has held that Rule 8D is prospective in nature. Therefore, assessee's case is not covered by Rule 8D. Hon'ble Punjab and Haryana High Court in the cased of Hero Cycles 323 ITR 518 has held that in the absence of a clear finding that unless incurring of some expenditure in respect of exempt income is demonstrated by A.O. the disallowance cannot be sustained. As already mentioned the assessee has accepted the disallowance of Rs.46,80,055/-. Ld. DR has not pointed out any defect in such working of the assessee. In view of these facts and in the light of judgement in the case of Godjrej Boyce Manu. Co. Ltd. and Hero Cycles Ltd. (supra) we see no justification to further increase the amount of disallowance u/s 14A without pointing out any valid basis for such further disallowance. In view thereof the grounds raised by the assessee's appeal is allowed."
8. Thus, the Tribunal has held Rule 8D of the IT Rules to be prospective in nature.
9. The ld. Counsel for the assessee has further pointed out that for Assessment Year 2007-08, a total disallowance of ` 1,47,34,064/- was made u/s 14A by the Assessing Officer vide assessment order dated 30.12.2009 (APB 61-62). It has been stated that vide order dated 10.01.2011 (APB 63- 65), the Ld. CIT (A) sustained the disallowance to the extent of ` 53,00,505/-. The ld. Counsel has pointed out that vide order dated 29.02.2012 (APB 66- 71), the Tribunal, for Assessment Year 2007-08, has dismissed the appeal filed by the department, observing as follows:-
"5. We have duly considered the rival contentions and gone through the record carefully. The assessee has claimed dividend of Rs.5683951/- which has been further reduced by the Assessing Officer by an amount of Rs.17,16,417 on the ground that these are short term capital gain and not dividend income. The assessee has not disputed about the disallowance of expenditure to the extent of Rs.53,00,505. The ITAT in assessment year 2005-06 has examined the activities of the assessee in detail and thereafter upheld the disallowance to the extent of Rs.46,80,055 in assessment year 2005-06. We do not find any disparity on facts. The findings of the ITAT have already been extracted by the Learned CIT (Appeals). Respectfully following the order of the Co-ordinate Bench in the assessee's own case on similar facts and circumstances, we do not find any merit in this appeal of the revenue. It is dismissed."
10. The ld. Counsel for the assessee has submitted that since the facts for the year under consideration are no different from those present before the Tribunal for Assessment Years 2005-06 and 2007-08, the said orders of the Tribunal be followed and the CIT (A) be held not justified in restoring the matter to the Assessing Officer to consider disallowance in terms of Section 14A of the Act or Rule 8D of the Rules.
11. The Ld. DR, on the other hand, has placed strong reliance on the impugned order. It has been contended that no prejudice has been caused to the assessee, since the Ld. CIT (A) has merely directed the Assessing Officer to verify the facts and figures of all the investments, the income from which shall lead to exempted income.
12. Having considered the issue in the light of the rival contentions and the material brought on record, we find that the facts for the year under consideration are exactly similar to those present for Assessment Years 2005-06 and 2007-08, i.e., the immediately preceding and the immediately succeeding Assessment Years. The Tribunal has held Rule 8D of the Income- tax Rules to be prospective in nature and the assessee's challenge of CIT (A)'s action in increasing the amount of disallowance u/s 14A of the Act without pointing out any valid basis for such further disallowance was upheld. The reliance by the assessee on 'Maxopp Investment Ltd. vs. CIT', 247 ITR 271 (Del) and 'Godrej and Boyce Manufacturing Co. Ltd vs. DCIT' 328 ITR 81 (Bom) in this regard is correct. Therefore, following the Tribunal orders (supra) for Assessment Years 2005-06 and 2007-08 in the assessee's own case, Ground No.1 raised by the assessee is accepted.
13. In Ground No.2 of its appeal, the assessee contends that the assessee's claim of depreciation of ` 44,80,000/- in respect of property being used for business purposes, was wrongly rejected by the Assessing Officer and the CIT (A) wrongly upheld the same, erroneously holding that the property was not in the possession and use of the assessee.
14. The assessee claimed the depreciation qua the property situated at 62, Friends Colony, New Delhi. As per the record, the assessee had purchased the said building for a total consideration of ` 17.90 crores, vide a written Agreement to Sell, dated 01.01.2006. The Assessing Officer found that the property had not been registered in the name of the assessee company till the end of the year under consideration and that apart from the Agreement to Sell and an affidavit filed by the vendor, there was no evidence of the assessee company having taken actual possession of the building during the year under consideration. The Assessing Officer also held that there was no evidence of the use of the building for any business purpose of the assessee company during the year under consideration. The Ld. CIT (A) confirmed the rejection of the assessee's claim, observing that no detail for payment of property tax, water and electricity charges, other incidental expenses and expenses, if any, incurred in connection with repair and maintenance so as to bring the property in a habitable position have been furnished.
15. Before us, the ld. Counsel for the assessee has contended that first of all, the assessee's ownership of the building in question has nowhere been disputed by either of the authorities below. Attention has also been drawn to the affidavit of assessee's seller, a copy whereof has been placed before us at APB 103-104 and which has been accepted as such by authorities below, though no relief has been granted to the assessee on the basis thereof. Relying on 'Mysore Minerals Ltd. vs. CIT', 239 ITR 775 (SC), it has been contended that in a case of claim of depreciation on a building, the condition precedent is the ownership of the building. It has been contended that as per 'Mysore Minerals Ltd.' (supra) a wide meaning must be given to the expression 'owner' in Section 32 of the IT Act and where the assessee is in possession of the building on even part payment of price, as per 'Mysore Minerals Ltd.' (supra) even if the building does not stand registered in the name of the assessee, the assessee is the owner thereof for the purposes of Section 32 of the Act and is entitled to depreciation thereon.
16. Further, the ld. Counsel for the assessee has sought to place reliance on 'CIT vs. Panacea Biotech Ltd.', 324 ITR 311 (Del), wherein it has been held that where a flat is fitted with amenities and is ready to use as an office, for business purposes, depreciation thereon is entitled.
17. The Ld. DR, on the other hand, has placed strong reliance on the impugned order in this regard.
18. Having considered the matter apropos the rival contentions in the light of the material on record, we deem it appropriate to remit this issue to the file of the Assessing Officer for decision afresh, before whom, the assessee has agreed to file evidence of user of the property in question.
19. Turning to the department's appeal, Ground No.1 is general.
20. As per Ground No.2 thereof, the Ld. CIT (A) has erred in directing the Assessing Officer to treat income of ` 4,04,382/- as capital loss as against business loss, as correctly treated by the Assessing Officer, ignoring the fact that the main business of the assessee was trading in shares and securities. The Assessing Officer observed that during Assessment Year 2005-06, the assessee company has changed its method of accounting, adversely affecting its profitability. The Assessing Officer observed that the assessee company had a consistent policy of trading the stock of shares as trading assets. The same had been regularly shown as stock-in-trade. However, during Assessment Year 2005-06, the stock-in-trade have been shown as investment. The Assessing Officer rejected the change, observing it to be prejudicial to the interests of the revenue. The assessment for Assessment Year 2005-06 was completed accordingly. For the year under consideration also, the Assessing Officer treated the inventory of shares as stock-in-trade.
The loss of ` 4,04,382/-, arising on sale of shares was treated as business loss as against capital loss shown by the assessee.
21. The CIT (A), following the CIT (A)'s order for Assessment Year 2005-06, directed the Assessing Officer to treat the loss as capital loss and not business loss.
22. The Ld. DR has contended that despite the fact that the main business of the assessee is trading in shares and securities, the Ld. CIT (A) has wrongly held the loss of ` 4,04,382/- to be capital loss.
23. The ld. Counsel for the assessee has stated that the Tribunal for Assessment Year 2005-06, has upheld the CIT (A)'s order for Assessment Year 2005-06 and that the facts being the same for the year under consideration, a similar order be passed.
24. For Assessment Year 2005-06, under circumstances similar to those present for the year under consideration, the Tribunal has upheld the CIT (A)'s direction for treating the loss as a capital loss. Respectfully following the said Tribunal order, in the assessee's own case for Assessment Year 2005-06, Ground No.2 raised by the department is rejected.
25. As per Ground No.3, addition of ` 5,80,552/- made on account of written back liabilities has wrongly been deleted by the CIT (A) while erroneously accepting the additional evidence filed by the assessee.
26. Apropos this Ground, it is stated by both the parties that this Ground is consequential to Ground No.4. As such, this issue will be adjudicated after the adjudication of Ground No.4.
27. Ground No.4 of the department's appeal contends that the Ld. CIT (A) has erred in deleting the addition of ` 4,91,02,321/- made on account of unexplained credits in the bank account of the assessee by wrongly accepting the additional evidence filed by the assessee.
28. Apropos Ground No.4, while examining the sources of investment made by the assessee company in Mutual Fund, shares, etc., the Assessing Officer called for the bank book and bank accounts maintained by the assessee company. The Assessing Officer found that the assessee company had received huge sums of money from certain corporate entities. Further details were called for u/s 133 (6) of the Act from the concerned parties. It was found that Shivalik Bimetal Controls Ltd. and Intel Electron Devices Ltd. had stated to have received sale proceeds through the assessee company on account of sales made to Hotline CPT Ltd. Hotline CPT Ltd., however, denied having any direct transaction with the assessee company. This led the Assessing Officer to take the view that the money received in the name of Hotline CPT Ltd. did not stand properly explained by the assessee. The assessee was asked to explain the transactions recorded in the name of Hotline CPT Ltd. The assessee's explanation did not find favour with the Assessing Officer and addition of ` 4,91,02,321/- was made observing that the assessee had failed to substantiate the receipt of money from the Hotline CPT Ltd. beyond reasonable doubt; that the statement of Hotline CPT Ltd. that they did not have any direct transaction with the assessee company during the year, was significant and raised doubts about the genuineness of the receipt from them; that the narration in the bank book furnished by the assessee mentioned receipt of money only from Hotline CPT Ltd. and not from any related party, either Shivalik Bimetal Controls Ltd. or Intel Electron Devices Ltd.; and that therefore, the deposits received by the assessee from Hotline CPT Ltd. were being unexplained and added back to the income of the assessee, as 'income from other sources.'
29. By virtue of the impugned order, the Ld. CIT (A) accepted the additional evidence filed by the assessee, holding that such filing of additional evidence was justified, since the Assessing Officer had allowed time of only three days to submit the necessary explanation, which was not adequate and sufficient opportunity. The addition made was deleted on the basis of the evidence filed.
30. The addition of ` 5,80,552/- made on account of written back liabilities was deleted as a consequence of the deletion of the addition of ` 4,91,02,321/- made on account of unexplained credits in the bank account of the assessee.
31. The Ld. DR has contended that the Ld. CIT (A) has erred in deleting both these additions while wrongly accepting the additional evidence filed by the assessee, whereas due opportunity to furnish before him was duly afforded by the Assessing Officer during the assessment proceedings.
32. The ld. Counsel for the assessee, on the other hand, has placed strong reliance on the impugned order, to the relevant portions of which our attention has been drawn. The ld. Counsel for the assessee has also taken us through the relevant portions of the paper book in this regard.
33. The Ld. CIT (A) has deleted the addition of ` 4,91,02,322/-, observing as follows:-
"8.8 Now coming to the addition of Rs 49102321, as stated earlier, the claim of the appellant company is that it is engaged in the business of lCD, bill discounting and other financial activities and also investments in shares, securities and mutual funds. During the FY 04-05 relevant to the A Y 05-06, the appellant company had provided financial assistance to M/s Hotline CPT Ltd by way of extending bill discounting facilities. As per the information submitted by the appellant company, M/s Hotline CPT Ltd had made certain purchases from M/s Shivalik Bimetals Control Ltd and International Electron Ltd and the bills issued by the aforesaid two companies were discounted by the appellant company and payments were made to them on behalf of M/s Hotline CPT Ltd. In this regard, M/s Hotline CPT Ltd had executed hundis/bills of exchange in favour of the appellant company. The income arising as a result of bill discounting charges, margin money etc was duly accounted for by the appellant company during the FY 04-05 relevant to A Y 05-06. Thereafter, during the FY 05-06 relevant to the AY under
consideration M/s Hotline CPT Ltd made payment of Rs 49102322 in satisfaction of outstanding dues pertaining to the purchases made from M/s Shivalik Bimetals Control Ltd and International Electron Ltd. Though, these payments were directly made to the appellant company, necessary entries were made in the accounts of M/s Shivalik Bimetals Control Ltd and International Electron Ltd only. In support of the aforesaid, the appellant company has filed certificate issued by HDFC Bank Ltd stating that a sum of Rs 49102322 was credited to the a/c of the appellant company on account of receipt of cheque nos. 191846, 47,48,66,67,68, 70, 71, 72 and 166736, 164578, 164875 and 164876. It is further clarified that all the cheques have been paid by M/s Hotline CPT Ltd. However, as the AO still had certain reservations about the fact that the money in question was actually received from M/s Hotline CPT Ltd, a hearing was fixed on 30-8-2010 so as to discuss this issue with him in the presence of Sh. RS Singhvi, ld. Counsel for the appellant company. After hearing both sides, it was decided that the issue could be sort out if Hotline CPT Ltd furnishes a clear certificate stating that the cheques in question were issued to the appellant company in satisfaction of outstanding dues in the accounts of M/s Shivalik Bimetals Control Ltd and International Electron Ltd. It was also directed that if felt necessary, the AO would issue summons U/S 131 of the IT Act so as to facilitate calling for of information from M/s Hotline CPT Ltd.
8.9 As per the reply submitted by the ld. Counsel for the appellant company, vide his letter dated 27-92010, M/s Hotline CPT Ltd, vide its letter dated 06-9-2010 has made a categorical statement that the amount in question was paid by them to M/s Morgan Securities and Credits (P) Ltd i.e. the appellant company in satisfaction of outstanding dues towards M/s Shivalik Bimetals Control Ltd and International Electron Ltd. For the sake of convenience, the relevant portion of letter dated 27-9-10 and the letter dated 06-9-2010 written by Hotline CPT Ltd is being extracted below:-
"Submission dated 27.9.2010:
In relation to ground relating to addition of Rs. 4,91,02,321/- received from M/s Hotline CPT Ltd. in respect of build discounting facilities provided to them, as per your direction, the Assessing Officer issued notice u/s 131 to M/s Hotline CPT Ltd. for the purpose of confirmation and verification of cheques received from M/s Hotline CPT Ltd.
We have been informed by the party that requisite confirmation has already been forwarded to the Assessing Officer and copy was also mailed to us. The factual position to this effect was verified with the Assessing Officer and same has duly been confirmed and we have also filed our submission in the context of the same along with copy of account of the concerned parties in our books of accounts
Reply dated 6.9.2010 submitted by M/s Hotline CPT Ltd:
With reference to the above summons issued by your office in the case of M/s Morgan Securities and Credits Pvt. Ltd., we would like to inform you that the company has made the payments mentioned in detail as below:
Date Cheque No. Amount 06.04.2005 191846 6,027,086.10 06.04.2005 191847 6,245,492.14 06.04.2005 191848 741,330.32 02.05.2005 191866 2,523,422.20 02.05.2005 191867 4,420,500.24 25.05.2005 191868 2,463,509.36 25.05.2005 191870 2,473,815.24 25.05.2005 191871 2,495,202.32 25.05.2005 198172 2,552,708.08 23,08,2005 166736 4,546,825.00 26.08.2005 164578 4,949,908.00 21.09.2005 164875 4,965,617.00 28.09.2005 164876 4,696,906.00 Total 49,102,322.00 Even though the payments were made to M/s Morgain Securities and credits Pvt. Ltd. the credits for dues of the same was made in the account of M/s International electron Devices and M/s Shivalik Bimetal Controls Ltd. and the payment was also shown in these accounts. MIs Morgan Securities and Credits Pvt. Ltd. was discounting the bills of the above mentioned companies only and as such the company does not have any direct account of them. However, the accounts of M/s International electron Devices and M/s Shivalik Bimetal Controls Ltd are enclosed for your reference."
8.10 In view of the above, there remains no doubt that the money in question was received by the appellant company from M/s Hotline CPT Ltd and there was no justification for treating the same as unexplained cash credit u/s 68 of the IT Act, 1961. What appears to me is that the whole confusion has been created because of the manner in which the letter/reply was submitted by M/s Hotline CPT Ltd in compliance to notice u/s 133(6) of the IT Act, 1961. Now that the position has been clarified by M/s Hotline CPT Ltd in terms of its letter dated 06-9-2010, there remains no reason for sustaining the addition in question. Accordingly, the addition of Rs 49102322 is being deleted."
34. From a perusal of the impugned order, it is clear that Hotline CPT Ltd. made certain purchases from Shivalik Bimetal Controls Ltd. and Intel Electron Devices Ltd. The bills issued by these two companies were discounted by the assessee company. Payments were made to them by the assessee by the Hotline CPT Ltd. Hotline CPT Ltd. had accepted Hundis, bills of exchange in favour of the assessee in this regard. During Assessment Year 2005-06, the assessee company duly accounted for the income arising as a result of bill discounting charges. Thereafter, during Assessment Year 2006-07, i.e., the year under consideration, Hotline CPT Ltd. paid ` 4,91,02,322/- directly to the assessee company in satisfaction of outstanding dues pertaining to the purchases made from Shivalik Bimetal Controls Ltd. and Intel Electron Devices Ltd.. Necessary entries, however, were made in the accounts of the two companies respectively. Certificate issued in this regard by HDFC Bank was duly furnished before the Assessing Officer. The Assessing Officer, however, required a further clear certificate to be issued by Hotline CPT Ltd. stating that the cheques were issued to the assessee company in satisfaction of outstanding dues in the accounts of Shivalik Bimetal Controls Ltd. and Intel Electron Devices Ltd. Hotline CPT Ltd., vide its letter dated 06.09.2010, categorically stated so. The Ld. CIT (A) has, in the above extracted portion of the impugned order, reproduced the said letter of Hotline CPT Ltd.
35. It was on the basis of the above that the Ld. CIT (A) correctly arrived at the conclusion that the amount of ` 4,91,02,322/- had been received by the assessee company from Hotline CPT Ltd. On the basis thereof, it was correctly observed that this amount could not be treated as unexplained cash credit u/s 68 of the IT Act. The department has not been able to successfully refute the well reasoned findings of fact recorded by the Ld. CIT
(A) in this regard and we hereby confirm the same. Accordingly, Ground No.4 is rejected.
36. The deletion of the addition of ` 5,80,552/-, forming the subject matter of Ground No.3 before us has been ordered by the Ld. CIT (A) as a consequence of the deletion of the addition of ` 4,91,02,321/-, comprising Ground No.4. Since Ground No.4 of the department's appeal has been rejected, there remains no force in Ground No.3 also and the same is rejected too.
37. In the result, whereas the appeal of the assessee is partly allowed, as indicated, the appeal filed by the department is dismissed.
The order pronounced in the open court on 31.01.2014.