1. These appeals by the Revenue as well as assessee arise out of separate orders of Commissioner of Income-Tax (A)-XI, Chennai. These appeals were heard together and for the sake of convenience, they are disposed off by this consolidated order.
2. The first issue for consideration which is common in Revenue's appeal for Assessment year 1992-93, 1993-94, 1994-95 and 1995-96 relates to allowance of depreciation @ of 100%. The assessee claimed 100% depreciation on service lines and street and signal lighting system. The claim of the assessee @ 100% of depreciation was disallowed on the grounds that service lines, street and signal lighting system are not to be considered as single unit. On appeal ld CIT(A), following the orders for earlier assessment years allowing claim @ 100% held that the assessee was eligible for deduction @ of 100%.
3. Before us ld DR submitted that service lines and lighting & signal system cannot be considered as an independent plant or machinery.
Therefore, 100% depreciation is not allowable. On the other hand ld AR submitted that in earlier years, the claim of assessee had been allowed and the department had not preferred any appeal against such deduction allowed by ld CIT (A).
4. We have considered the submissions made by both the parties. First proviso to Section 32 was omitted by the Finance Act, 1995, with effect from 1.04.1996. It provided that where the actual cost of any machinery or plant-does not exceed Rs. 5,000/-, the actual cost thereof shall be allowed as deduction in respect of previous years in which such machinery or plant is first put to use by the assessee for the purpose of his business or profession. In order to find out whether a particular machinery or plant can function independently, functional test has to be applied. A piecemeal approach is not permissible and the entire matter must be considered as a single unit unless of course, the component part can be treated as separate units having different purposes. It has to be seen whether service lines, street light and signal systems can function independently so as to constitute individual plant or machinery. From the order of ld CIT(A) it is not clear as to how he has identified the service lines, street light and signal system as independent machines or plant on which depreciation @ of 100% will be available. Ld Assessing Officer has also not examined the matter with reference to functional test. We, therefore, are of the view that this issue be restored to the file of Assessing Officer for all the years to decide the matter afresh. The Assessing Officer will allow depreciation @ 100% depreciation in case of each plant or machinery is capable of being functional independently. If they are part of a composite machinery or plant, their value has to be taken together and depreciation will be allowable at the rates applicable to such assets.
5. The second issue which is common in Revenue's appeals for assessment years 1992-93, 1994-95 & 1995-96 relate to excessive line loss. The assessee was engaged in the business of purchase of electricity from TNEB and selling the same to the consumers. In this process there were transmission losses, which are termed as 'line losses'. According to Assessing Officer, the line loss was excessive and therefore, he made disallowance on estimate basis. On appeal Ld CIT (A) examined the matter in detail with reference to units purchased, units sold and line loss. The percentage of line loss to purchases from assessment year 1991-92 to 1995-96 varies from 9.79% to 12.17% as against percentage of line loss of TNEB were in between 16.9% to 18.4%. Ld CIT(A) also found that the line loss is common which occurs due to various factors. Since the line loss was less than Tamilnadu Electricity Board in all the assessment years, he deleted the additions made by the Assessing Officer.
6. Before us, ld DR submitted that the transmission loss was more as compared to line loss in assessment year 1991-92 and therefore Assessing Officer was justified in making disallowance on estimate basis. On the other hand, ld AR of the assessee relied on the order of ld CIT(A) and also stated that transmission loss occurs due to several factors, which are beyond the control of the assessee.
7. We have heard both the parties. It is a fact that transmission loss occurs due to theft and other reasons. The transmission loss in the case of assessee is lower than the transmission loss in the case of Tamilnadu Electricity Board. The contention of the revenue is that the assessee being a society, the line loss should be less as compared to Tamilnadu Electricity Board, a Public Sector Company. This argument of Revenue holds no water. For making an addition sufficient material has to be brought on record. Additions cannot be made on the basis of presumptions and surmises. It is not the case of Revenue that the assessee has sold the electricity outside the books of accounts and since the Assessing Officer has not been able to bring any material on record contrary to the facts of the case, we are of the considered view that no addition under such a situation can be made. Accordingly we uphold the findings of Ld CIT (A) in this regard.
8. Next common issue for consideration in Revenue's appeals for Assessment Years 1994-95 and 1995-96 relate to amount credited to Contingency Reserve. The assessee created Contingency Reserve because of statutory provisions contained in Clause IV(1) of Electricity (Supply) Act, 1948. The assessee claimed amounts of contribution to this reserve as a charge on profit and loss account. The Assessing Officer disallowed the amount transferred to Contingency Reserve in view of decision of Hon'ble Supreme Court in the case of Associated Power Ltd. v. CIT wherein it has been held that the monies credited to Contingency Reserve Fund under the statutory provisions are monies belonging to the assessee and are not diverted by any overriding title. On appeal, the Ld CIT (A) examined the provisions of Electricity (Supply) Act, 1948 and came to the conclusion that as per Clause IV(1), the assessee is required to create the reserve from the revenue of the each year. Thus it is a charge on the profit and loss account and not appropriation of profits of the assessee. He followed the decision of Hon'ble Bombay High Court in the case of Amalgamated Electricity Co. Ltd. v. CIT to arrive at the conclusion that assessee is eligible for deduction in respect of monies credited to "Contingency Reserve.
9. Before us, Ld D.R. relied on the order of Assessing Officer while A.R. of the assessee submitted that the issue is covered by the decision of Hon'ble Madras High-Court in the case of South Madras Electric Supply Corporation Ltd. v. CIT 240 ITR 503 wherein it has been held that a provision made under the Electricity (Supply) Act, 1948 is a statutory liability and a charge on the profit of the company. He supported the order of Ld CIT (A), on this issue.
10. We have heard both the parties. Clause III, IV & V of the Electricity (Supply) Act, 1948 deal with creation of reserve and the application of funds available in the reserve account. Clause III reads as under: III. There shall be created from existing reserve or from the revenues of the undertaking a reserve to be called 'Contingencies Reserve.' IV. (1) The licenses shall appropriate to Contingencies Reserve from the revenues of each year of account a sum not less than one quarter of one per centum and not more than one-half of one per centum of the original cost of fixed assets, provided that if the said reserve exceeds or would by such appropriation, be caused to exceed five per centum of the original cost of fixed assets., no appropriation shall be made which would have the effect of increasing the reserve beyond the said maximum.
(2) The sums appropriated to the Contingencies Reserve shall be invested in securities authorised under the Indian Trusts Act, 1882, and such investment shall be made within a period of six months of the close of the year of account in which such appropriation is made.
V (1) The Contingency Reserve shall not be drawn upon during the currency of the license except to meet such charges as the State Government may approve as being: (a) Expenses or loss of profit arising out of accidents, strike or circumstances which the management could not have prevented; (b) Expenses on replacement or removal of plant or works other than expenses requisite for normal maintenance or renewal; (c) Compensation payable under any law for time being in force and for which no other provision is made.
(2) On the purchase of the undertaking, the Contingency Reserve, after deduction of amounts drawn under sub-paragraph (1), shall be handed over to the purchaser and maintained as such contingencies reserve; Provided that where the undertaking is purchased by the Board or the State Government, the amount of the reserve computed as above shall, after further deduction of the amount of compensation, if any, payable to employees of the outgoing licensee under any law for time being in force, be handed over to the Board or the State Government as the case may be.
11. From the plain reading of provisions of Clause III & IV of Electricity (Supply) Act, 1948, it is clear that Contingency Reserve is to be created either from the revenues of the year or from the reserve to the extent of 0.25% to 0.5% of the original cost of the fixed assets and will not exceed 5% of such cost. The reserve is to be created by appropriation of the revenues of the year. Further Sub-clause (2) of Clause IV requires the assessee to invest the amount so appropriated in securities specified under the Indian Trust Act-within the period of six months from the close of the year in which such appropriation was made. Thus the assessee remains in the custody of the amount credited in the "reserve". It is neither an outgo for an expenditure incurred nor diversion of income at source. Further Clause V of the Act prescribes the purpose for which the Contingency Reserve has been created. The monies lying in the contingency reserve can be utilised for meeting expenses arising due to certain contingencies, the occurrence -thereof is not certain. In the light of these facts we have to determine the nature of the contingencies reserve.
12. In the case of Vazir Sultan Tobacco Co. Ltd. v. CIT , Hon'ble Supreme Court had an occasion to distinguish between word "provision" and "reserve". The "provision" is a charge against the profits to be taken into account against gross receipts in the profit and loss account; whereas "reserve" is an appropriation of profits, the asset or assets by which it is represented being retained to form part of the capital employed in the business. If the ratio of the Hon'ble Supreme Court in the case of Vazir Sultan Tobacco Co. Ltd. v. CIT is applied to the facts of the instant case, it would appear that creation of reserve either from reserve or from the revenues of the relevant assessment year, is an appropriation of the income and not a charge on profit and loss account.
13. In the case of Associated Power Co. Ltd. v. CIT , Hon'ble Supreme Court at page 207 observed as under: The application of the doctrine of diversion of income by reason of an overriding title is quite inapposite. The doctrine applies when, by reason of overriding title or obligation, income is diverted and never reaches the person in whose hands it is sought to be assessed see CIT v. Sitaldas Tirathdas . In the present case the statute requires the electricity company to create certain reserves if its clear profit exceeds a reasonable return (Clause II, Sixth Schedule). Again, the contingencies reserve is to be created from the existing reserve or from "the revenue of the undertaking".
This clearly indicates that, the monies which have to be put into the contingencies reserve reach the electricity company and are not diverted away from it.
It is the electricity company which has to invest the sums appropriated to the contingencies reserve. The investment would be in its name and it would be the owner thereof. The restriction that the investment can be made only in securities mentioned in the Indian trust Act makes no difference to this position.
Their Lordships finally held that the amount credited to the contingencies reserve was not diverted by reason of an overriding obligation or title and, in determining the business profits of assessee it must be taken into account.
14. In Associated Power Company Limited (supra), Hon'ble Supreme Court has overruled the decision of Hon'ble Bombay High Court in the case of Amalgamated Electric Supply Company Ltd. v. CIT (supra) and distinguished the decision of Hon'ble Supreme Court in the case of Poona Electric Supply Co. Ltd. by observing that the amount paid into the Consumers Benefit Reserve has to be returned to the consumers.
Therefore, it is as if Electricity Company had not received the amount, which it was obliged to return. The amount that it was obliged to return was not a part of its income. This is altogether different from the case of monies standing to the credit of the Contingencies Reserve, which are set apart to be utilised by the Electricity Company for the purposes set out in Clause V of the Sixth Schedule. These are to meet expenses or recoup loss or profit arising out of accidents, strikes or other circumstances which the electricity company could not have prevented; to meet expenses on replacement or renewal of plants or works; and for payment of compensation required by law for which no other provision has been made. These are all expenses which the electricity company has to incur. The reservation is made so that money is always available for meeting these expenses and the supply of electricity is not interrupted. For the same reason, payments out of the contingencies reserve can be made only with the State Government's approval. It is particularly noteworthy that the electricity company can make good from out of the contingencies reserve even a loss of profit arising out of strikes, accidents and other circumstances over which it has no control. There can be no doubt, in the circumstances, that the monies in the contingencies reserve belong to the electricity company. However, Hon'ble. Supreme Court in the case of Poona Electric Supply Co. Ltd. v. CIT (1985) 57 ITR 521 (SC) held that contribution to statutory reserve under the Electricity Act, namely Consumer's Benefit Reserve Account was deductible because it was created for the benefits of consumers and there was diversion of profits.
15. Applying the ratio of Hon'ble Supreme Court in the above cited cases to the facts of the case before us, it is found that as per Clause III of the Electricity (Supply) Act, 1948, contingency reserve is to be created either from existing reserve or from the resources of the undertaking. This reserve can be utilized for specified contingencies enumerated in Clause V of the electricity (Supply) Act, 1948. Thus there is no expenditure involved when an amount is appropriated to the contingencies reserve binder the Electricity (Supply) Act, 1948; as such appropriation is setting apart to meet possible contingencies. It is not known provision for known existing liabilities. Therefore, amount paid to the reserve is an appropriation of profits and cannot be allowed as deduction. Ld CIT (A) has held that monies credited to Contingency Reserve account is a charge on Profits and Loss Account and not an appropriation of profits. We are unable to subscribe his views. The facts of the case in South Madras Electricity Supply Corporation Ltd. v. CIT (supra) are distinguishable from the facts of the case before us. In that case, Hon'ble Madras High Court held that there was diversion of profits on contribution of monies credited into consumers' rebate reserve whereas in the case before us, the reserve has been created to meet certain contingencies. There is no diversion of profits in the instant case. The money remains with the assessee and forms part of the capital. The creation of the reserve is thus, an appropriation of the profits. Respectfully following the decision of Hon'ble Supreme Court in the case of Associated Power Co.
Ltd. (supra), it is held that since there was no diversion of profits and the assessee continued to have control over contingency reserve funds for its benefits to be applied on occurrence of certain contingencies, the monies paid to the reserve account are not deductible. We, therefore, set aside the order of Ld CIT (A) for both the assessment years i.e. A.Y. 1994-95 and A.Y. 1995-96 and restore the order of the Assessing Officer.
16. The next issue for consideration in Revenue's appeal for A.Y.1993-94 which is also common in assessment year 1997-98 relates to deletion of addition on account of free electricity supplied to agriculturists and hut dwellers. As per the terms of licence granted to the society, the assessee was required to supply electricity free of cost to agriculturists and hut dwellers. The amount of electricity supplied to agriculturists and hut dwellers was at Rs. 74,56,204/- and Rs. 1,09,512/- respectively totalling to Rs. 75,65,716/-. Since the amount was not receivable, the same was not recognised as income by the assessee. Assessing Officer brought the amount of Rs. 75,65,716/- to tax. On appeal ld. CIT(A) agreed with the assessee and held that any request of the assessee to the Government for grant of subsidy for free supply of electricity was not enforceable in law and since the assessee merely quantified the cost of free supply of the electricity in the books of accounts, there was no accrual of income to the assessee.
Hence he deleted the addition.
17. We have heard both the parties. As per notification of Public Works Department in G.O.M.S. No. 1434 dated 27.08.1991 the assessee was required to supply electricity to agriculturists and hut dwellers free of charges. However, the assessee booked income in respect of such consumers in the books of accounts. The claim for subsidy on account of free supply of energy was pending with the Govt. of Tamilnadu.
Therefore, in the circumstances of the case, the issue to be decided is whether there was any accrual of income in the hands of the assessee.
As the assessee was to supply energy to entitled category of consumers at free of cost, it had no right to receive any income on this account.
Mere quantification of the income on hope that assessee may receive subsidy, would not be sufficient to hold that income had accrued. Under Income-tax Act, what is assessed to tax is real income and not hypothetical income. The Hon'ble Supreme Court in the case of CIT v.Shoorji Vallabhdas & Co. examined the concept of real income. In this case it was held as under: Income-tax is a levy on income. Though the Income-tax Act takes into account two points of time at which the liability to tax is attracted, viz., the accrual of the income or its receipt, yet the substance of the matter is the income. If income does not result at all, there cannot be a tax, even though in book-keeping, an entry is made about a "hypothetical income", which does not materialize.
Where income has, in fact, been received and is subsequently given up in such circumstances that it remains the income of recipient, even though given up, the tax may be payable. Where, however, the income can be said not to have resulted at all, there is obviously, neither accrual nor receipt of income, even though an entry to that-effect might, in certain circumstances, have been made in the books of account.CIT v. Hindustan Housing and Land Development Trust Ltd. Hon'ble Supreme CourtCIT, West Bengal-II v.Hindustan Housing and Land Development Trust Ltd. the assessee was engaged in the business of dealing in land and maintained is accounts on mercantile basis. The land was compulsorily acquired by the State Government. Additional compensation was awarded by the Arbitrators which was appealed to by the Government in higher Court.
The amount was deposited with the Court. The assessee was permitted to withdraw the additional compensation on furnishing of security. The amount so withdrawn was liable to be refunded in the event the appeal being allowed. The Court held that there was no absolute right to receive the amount at that stage. If the appeal were allowed in its entirety, right to payment of enhanced compensation would have fallen together. The Court further held as under: There is a clear distinction between the cases such as the present one, where the right to receive payment is in dispute and it is not a question of merely quantifying the amount to be received, and cases where, the right to receive payment is admitted and the quantification only of the amount payable is left to be determined in accordance with settled or accepted principles.
19. In the case of Godhra Electricity Co. Ltd. v. CIT the then Government of Bombay in 1922 had granted a licence to LSC company authorising it to generate and supply electricity to consumers in Godhra area. The assessee company was successor of LSC Company. The assessee company enhanced rate of electricity charges which was shown as income on accrual basis. The amounts were not realized due to litigation and subsequent take over of undertaking by the Government.
The Court held that the amounts due on such enhancement had not accrued and was not assessable. The Hon'ble Supreme Court held (held note) as under: Income-tax is a levy on income. No doubt, the Income-tax Act takes into account two points of time at which liability to tax is attracted, viz. the accrual of income or its receipt; but the substance of matter is the income. If the income does not result at all, there cannot be tax, event though in book peeing an entry is made about a hypothetical income, which does not materialise.
20. From judicial precedents starting from the case of Shoorji Ballabhdas & Co. and subsequent decisions, it is clear that only real income is chargeable to Income-tax and not a hypothetical income. In the case before us the assessee admitted in books of account the income on which it had no right to receive. The claim of the assessee for subsidy was not decided by the Government. The assessee had no right enforceable in the law. Therefore, there was no accrual of real income to the assessee. The quantification of the amount was thus a "hypothetical income". Merely because amount was quantified in books of account, its character would not change from "hypothetical income" to "real income". Therefore, the assessee's case is squarely covered by the decision of Hon'ble Supreme Court in the case of Shoorji Bhallabhdas and Co. and Godhra Electricity Co. Ltd. We, therefore, uphold the order of the ld. CIT(A) on this issue and reject the ground raised by the Revenue for both the assessment year.
21. The another issue in Revenue's appeal for A.Y. 1997-98 relates to deletion of bad debts. The assessee claimed deduction of Rs. 53,99,005/- as bad debts written off. ld. CIT(A) on verification found that for A.Y. 1990-91 and A.Y. 1991-92, the assessee credited income of Rs. 33,33,604/- and Rs. 20,65,401/- respectively on account of free electricity supplied under terms of licence granted to it. This amount was written off as bad debts as the assessee had no right to receive subsidy from the Govt. on account of free electricity supplied to agriculturists and hut dwellers. ld. CIT(A) allowed the claim of the assessee as all conditions of Section 36(1)(vii) were satisfied.
22. We have heard both the parties. Under terms of licence, the assessee was required to supply electricity free of cost to agriculturists and hut dwellers. Therefore, assessee had not right to receive the income. However, assessee credited the amount to Profit and Loss account by recognising the same as income. As assessee had no right to receive the income, the same would not constitute income in his hands. The assessee has also no legal right to receive subsidy in lieu of free supply and therefore, the decision to write off the same is correct. The assessee's claim of bad debts is, therefore, justified as all conditions of Section 36(1)(vii) are satisfied. Accordingly, we do not find any infirmity in the order of the ld. CIT (A) and dismiss this ground of appeal.
23. In assessee's appeals in ITA Nos. 1565/Mds/1999 (A.Y. 1992-93) and 1566/Mds/1999 (A.Y. 1993-94), the only common issue for consideration relates to deduction Under Section 80 P(2)(d) in respect of interest received from co-operative banks. The A.O allowed deduction Under Section 80P (2)(d) on net basis after deducting the expenses relating to the interest on dividend derived by the assessee from its investments in any other cooperative society. The ld. CIT (A) held that deduction under Section 80P (2)(d) is on net income and not on gross receipts.
24. We have heard both the parties. Under Section 80AB deduction is to be allowed in respect of any income included in the gross total income of the assessee. Under Section 80B(5) the term "gross income" has been defined and means the total income computed in accordance with the provisions of the Act without making any deduction under Chapter VI-A.The expression "computed in accordance with the provisions of Act" implies (i) that deduction under appropriate computation sections have already been given, (ii) that income of other persons, if includible under Section 60 to 64 has been included;(iii) intra head and/or inter head losses has been adjusted and that unabsorbed business losses etc.
have been set off. Hon'ble Supreme Court in the case of CIT v. Kotagiri Industrial Co-op Tea Factory Ltd. 224 ITR 604 held that for the purpose of making deduction under Section 80P of the Act, gross total income must be determined in accordance with the other provisions of the Act.
Therefore, for the purpose of computation of income from co-operative banks the expenses relatable to earning of the said income will be deductible. This is what the assessing officer as well as Ld CIT (A) has done. Accordingly we do not find any infirmity in the stand taken by the authorities below.
25. The first issue raised in assessee's appeal in ITA No.1259/Mds/2000 for A.Y 1997-98 relates to confirming the addition on account of provision for contingency reserve. Since we have decided the issue in favour of the Revenue in their appeals for Assessment Years 1994-95 and 1995-96, this ground raised by the Assessee in the A.Y.1997-98 for the same reasons stands dismissed.
26. The next issue, arising in the Assessee's appeal for A.Y 1997-98 relates to subsidy received by the assessee. The assessee received subsidy of Rs. 22,09,950/- under various heads. The A.O. treated the receipt of subsidy as income of the assessee. The ld. CIT(A) observed that assessee received subsidy from R.E.C. at Rs. 1,75,500/-, S.F.S.Works at Rs. 12,70,000/- and other services at Rs. 7,64,450/-, totalling to Rs. 22,09,950/-. The assessee received the amount to meet a part of the cost of extension of supply to various categories of consumers by way of laying of EHT/HT/LT lines, establishment of substations, erection of distribution transformers etc. The ld. CIT (A) considered the matter and came to the conclusion that the assessee had to incur substantial expenditure for providing electricity connection to different category of customers. Since the expenditure incurred in respect of these items was claimed as revenue expenditure, any reimbursement of sum by way of subsidy from R.E.C. and others had to be treated as revenue receipt.
27. We have heard both the parties. The subsidy received on account of capital expenditure incurred by assessee will be in the capital field whereas subsidy received on account of revenue expenditure will be assessable to tax as revenue receipt. It is not disputed by the assessee that the expenditure incurred in respect of the items against which reimbursement of subsidy from R.E.C. was received, was claimed as revenue expenditure. In the case of Sahney Steel & Press Works Ltd. and Ors. v. CIT 228 ITR 253, Hon'ble Supreme Court laid down general principles for identification as Revenue Receipt or Capital Receipt. It has been observed that the character of subsidy in the hands of recipient whether Revenue or Capital will have to be determined having regard to the purpose for which the subsidy is given? The source of the fund is quite immaterial However, if the purpose is to help the assessee to set up its business or complete a project, the monies must be treated as having been received for capital purposes. If monies are given to assessee for assisting him in carrying the business operation and the money is given only after and conditional upon commencement of production, such subsidies must be treated as assistance for the purpose of the trade. In the case before us the subsidy has been received after commencement of the business. The assessee has claimed the expenditure in respect of which subsidy was received as revenue expenditure and therefore the subsidy received will be in the revenue field. Hence, the reimbursement of expenditure by way of subsidy from R.E.C. has to be treated as revenue receipt. Accordingly we do not find any infirmity in the findings of Ld CIT (A).
28. The last issue for consideration in this appeal relates to interest accrued on R.E.C. bonds. The assessee obtained R.E.C. bonds for a sum of Rs. 1,10,40,000/- and earned interest thereon. The interest earned was not admitted as income on the ground that R.E.C. Bonds were purchased out of special funds which were created out of remittances of interest payable by the assessee. The contention of the assessee has not been accepted by the authorities below. The ld. CIT(A) held that bonds were allotted in the name of assessee by R.E.C. and hence interest on R.E.C. bonds has accrued in the hands of assessee.
29. We have considered the matter carefully. The assessee has invested Rs. 1,10,40,000/- in R.E.C. Bonds out of "Special Fund". Therefore, the ownership on the bonds vests with the assessee. The interest earned thereon therefore, will be the income of the assessee. Merely because the interest is credited in the special funds it would not amount to diversion of income at source. As per the scheme of the fund, the interest on project loans provided by REC shall be credited in a special Savings Bank Account with a Scheduled Bank or invested into bonds issued by REC. The interest on fixed deposits made out of amount so credited or paid on bonds shall be paid to the special Savings Account. The bonds have to be issued out of amount available in the Special Fund. The interest and maturity amount of the bonds shall be part of the "Special Fund". The REC shall have first charge on the entire amount in "Special Fund" in preference and priority to all other debts and liability of the society. The bonds are issued in the name of the assessee. Thus it may be noted that the monies credited to "Special Fund" whether interest on fixed deposits or bonds remain in control of the assessee. The case is in no way different from the case where interest paid on project loans is charged to profit and loss account but the same is not paid to the party and remains with assessee. The REC had first charge on monies forming part of "Special Fund". It means that after meeting the liabilities of the REC any money is left, the assessee can utilise the same for the purpose of other liabilities.
This proves that the assessee was owner of bonds issued by REC and ld.CIT (A) had rightly come to the conclusion. Accordingly we do not find any infirmity in the findings of the ld. CIT(A).
30. The issue relating to deduction under Section 80P(2)(d) does not arise out of order of Ld CIT(A) and requires no discussion. Hence the same is dismissed.
31. In the result the Revenue's appeals in ITA Nos. 1623/Mds/1999, 1624/Mds/1999, 6/Mds/1999, 7/Mds/1999 for assessment years 1992-93, 1993-94, 1994-95, 1995-96 are partly allowed and in ITA No.1279/Mds/2000 for assessment year 1997-98 is dismissed. Assessee's appeals in ITA Nos. 1565/Mds/1999, 1566/Mds /1999 & 1259/Mds/2000 for assessment years 1992-93, 1993-94 & 1997-98 are dismissed