ORDER JAYANT PATEL, J. 1. Draft amendment granted. 2. We have heard Mr. Bhatt, learned Counsel appearing for the appellant in the present appeal preferred by the Revenue. In the appeal, the Revenue, after amendment, has formulated the following questions:- “(A) Whether the Appellate tribunal has substantially erred in law in holding that the expenses incurred outside the approved R & D facility are also eligible for weighted deduction in contravention of the provisions of Section 35(2AB) whereby only the expenditure on in-house research at approved R & D facility qualifies for weighted deduction ? (B) Whether the Appellate tribunal has substantially erred in law in deleting the disallowance of interest of Rs.17.06 lac despite the fact that the Assessee had claimed interest expenses of Rs.13.33 crore and had given interest free advances of Rs.4.70 crore to M/s. Casil Health Products Limited (CHPL), sister concern of the Assessee and hence, interest expenses to that extent were not deductible u/s 36(1)(iii) ?” (C) Whether the Appellate Tribunal has substantially erred in law in deleting the disallowance of depreciation on building and plant and machinery for Rs.28,77,600/- despite the fact that the Assessee has not produced any cogent evidence regarding use of the said plant purchased on 15.2.2006 from Pfizer, during the year under consideration and whether the Appellate Tribunal has not appreciated the fact that the appellant did not discharge its onus to prove that the plant was used for the purpose of business ? (D) Whether the Appellate tribunal has substantially erred in law in deleting the addition of Rs.52,59,803/- in calculation of adjusted book profit for the purpose of MAT considered as towards provision for doubtful debt and diminution in the value of investment relying on the decision of coordinate Bench in the case of ACIT vs. Vodafone Essar Gujarat Limited ? (E) Whether the Appellate tribunal has substantially erred in law in deleting the addition of the provision for diminution in value of asset despite amended provisions of Clause (i) inserted in Explanation-I by Finance Act, 2009 w.e.f. 1.4.2001 under which the provisions for diminution in the value of any assets needs to be added back ? (F) Whether the Appellate tribunal has substantially erred in law in directing to reduce the prior period expenses of Rs.23,27,520/-for the computation of book profits u/s 115JB of the Act ? (F) Whether the Appellate tribunal has substantially erred in law in directing to reduce the prior period expenses of Rs.23,27,520/-for the computation of book profits u/s 115JB of the Act ? (G) Whether the Appellate Tribunal has substantially erred in law in deleting the addition of Rs.64,13,532/- quantified as disallowance expenditure u/s 14A, despite the specific provisions of Clause (f) of Explanation-I to Section 115JB and when the issue of disallowance u/s 14A under regular computation was restored to the CIT(A) ? 3. On question (A), discussion by the Tribunal is from paragraphs 10, 11 and 11.1, which is reproduced herein below:- 10. Ground No.5 is against the disallowance of the expenses for scientific research u/s.35(2AB) of the Act amounting to Rs.3,59,500/. The ld.counsel for the assessee submitted that the AO disallowed the expenditure on the basis that the clinical trial expenses was not within the Inhouse Research and Development Facility as approved by the prescribed Authority. The ld.CIT(A) confirmed the disallowance made by the AO on the basis that the condition allowing of weighted expenditure is that the Inhouse research should have been made. The ld.counsel for the assessee relied on the judgment of Hon'ble Gujarat High Court rendered in the case of CIT vs. Cadila Healthcare Ltd. reported at (2013) 31 taxmann.com 300 (Guj.). The ld.counsel for the assessee submitted that the issue is squarely covered by the judgment of Hon'ble High Court of Gujarat in the case of CIT vs. Cadila Healthcare Ltd. (supra). 11. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. The Hon'ble High Court of Gujarat in the case of CIT vs. Cadila Healthcare Ltd.(supra) has held as under: "11. Revenue has also suggested following question : "D. Whether the Appellate Tribunal has substantially erred in holding that the expenses incurred outside the approved R&D facility would also get weighted deduction based on the word under "on in house" interpreting contradictorily to the finding of coordinate bench in Concept Pharmaceuticals Ltd v. ACIT (ITAT, Mum) reported at 43 SOT 423?" 12. We may record that question 'E' in the appeal memo is an additional question which has an element of above noted question. We have, therefore, not separately reproduced the same in this order. We may record that question 'E' in the appeal memo is an additional question which has an element of above noted question. We have, therefore, not separately reproduced the same in this order. The issue is whether the assessee who has incurred expenditure for scientific research, which was not in the inhouse facility, could be covered for deduction under section 35(2AB) of the Income Tax Act, 1961." 11.1 The Hon'ble High Court of Gujarat after examining the entire issue came to the conclusion that the Tribunal committed no error. Respectfully following the judgment of Jurisdictional High Court in the case of CIT vs. Cadila Healthcare Ltd.(supra), we hereby direct the AO to allow the claim of the assessee. Thus, this ground of assessee's appeal is allowed. 4. The aforesaid shows that the Tribunal for allowing this particular ground/question in favour of the Assessee, has relied upon the decision of this Court in the case of CIT vs. Cadila Healthcare Limited, reported in (2013) 31 Taxmann.com 300 (Gujarat). We find that as the question is already covered by the said decision of this Court, such question “A” would not arise being substantial question of law to be considered in the present appeal, as canvassed. 5. On question (B), discussions by the Tribunal are from paragraphs 12, 12.1, 13 and 13.1, which is reproduced herein below:- 12. Ground No.6 is against the disallowance of interest amounting to Rs.17,06,566/. The ld.counsel for the assessee submitted that the AO made disallowance of interest on the basis that the interest freeloans/advances given by the assessee to its sister-concern, namely, M/s.Casil Health Products Ltd. (CHPL). The AO made addition of Rs.30,93,151/as compared to, in the same average rate of borrowing i.e.7.25% applied on the daily balances outstanding. On appeal, the ld.CIT(A) restricted the disallowance to the extent of 4% of the average cost of fund. The ld.counsel for the assessee submitted that the assessee was having sufficient interestfree funds. The ld.counsel for the assessee placed reliance on the judgment of the Hon'ble Gujarat High Court rendered in the case of CITI vs. UTI Bank Ltd. reported at (2013) 32 taxmann.com 370 (Gujarat). He also placed reliance on the judgment of the Hon'ble Gujarat High Court rendered in the case of CIT vs. Raghuvir Synthetics Ltd. reported at (2013) 354 ITR 222(Guj.) 12.1. He also placed reliance on the judgment of the Hon'ble Gujarat High Court rendered in the case of CIT vs. Raghuvir Synthetics Ltd. reported at (2013) 354 ITR 222(Guj.) 12.1. On the contrary, ld.Sr.DR supported the order of the AO and submitted that the advances were given to sister concern for commercial purposes, therefore, there is no applicability of section 36(1)(iii) of the Act. 13. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below as well as the judgments relied upon by the ld.counsel for the assessee. The AO has made addition on the basis that the outstanding balances in respect of the sister-concern, namely, M/s.Casil Health Products Ltd.(CHPL in short) has been continuing over years. The AO observed that the assessee has been getting the jobwork done from CHPL and also making purchases form CHPL, but the amount remained perpetually outstanding during the year and rejected the contention of the assessee that the advances made for the purpose of business. On appeal, the ld.CIT(A) restricted the addition to the extent of 4% of the average cost of fund on the basis that the appellant had borrowed funds on which interest was paid, therefore it cannot be said that the appellant had sufficient own funds. The ld.CIT(A) observed that the amount outstanding against associate-company is in the nature of advance since appellant has not recovered the same. It this was business advance, the same could have been recovered or adjusted by now but the fact that it remain outstanding for many years clearly shows that this is interestfree advances given out of overall business fund which included borrowed funds also. The contention of the assessee before the authorities below was two folds; firstly, advances were given for business purposes, therefore provisions of section 36(1)(iii) cannot be applied and secondly, the assessee was having sufficient interestfree funds to make advances. The judgment relied upon by the ld.counsel for the assessee in the case of CIT vs. Raghuvir Synthetics Ltd. (supra), wherein the Hon'ble High Court of Gujarat relying on the judgment of the Hon'ble Apex Court in the case of S.A. Builders Ltd. vs. CIT reported in (2007) 288 ITR 01 (SC) answered the question in favour of assessee. The judgment relied upon by the ld.counsel for the assessee in the case of CIT vs. Raghuvir Synthetics Ltd. (supra), wherein the Hon'ble High Court of Gujarat relying on the judgment of the Hon'ble Apex Court in the case of S.A. Builders Ltd. vs. CIT reported in (2007) 288 ITR 01 (SC) answered the question in favour of assessee. In the present case, both the authorities have made addition on the basis that the advances given have been continuing for a long period of time. Both the authorities have not given any finding with regard to availability of funds with the assessee for making such advances. However, the contention of the assessee is that the fact is not controverted by the authorities below that the advances have been given for business purposes since the assessee has been making purchases and getting jobwork from the associate concern. This goes to prove that advances were given for business purpose. The Hon'ble Jurisdictional High Court has decided the issue in favour of the assessee by following the judgment of the Hon'ble Apex Court rendered in the case of S.A. Builders Ltd. vs. CIT (supra), wherein it has been held that if the advances have been made for business purpose, then disallowance is not called for. The Hon'ble Supreme Court in that case has approved the judgment of Hon'ble Delhi High Court rendered in the case of CIT vs. Dalmia Cement (B.) Ltd. reported at (2002) 254 ITR 377 (Delhi), wherein the Hon'ble Delhi High Court has held that once it is established that there was nexus between the expenditure and the purpose of the business (which need not necessarily be the business of the assessee itself), the Revenue cannot justifiably claim to put itself in the armchair of the businessman or in the position of the board of directors and assume the role to decide how much is reasonable expenditure having regard to the circumstances of the case. No businessman can be compelled to maximize its profit. The incometax authorities must put themselves in the shoes of the assessee and see how a prudent businessman would act. The authorities must not look at the matter from their own view point but that of a prudent businessman. No businessman can be compelled to maximize its profit. The incometax authorities must put themselves in the shoes of the assessee and see how a prudent businessman would act. The authorities must not look at the matter from their own view point but that of a prudent businessman. As already stated above, we have to see the transfer of the borrowed funds to a sister concern from the point of view of commercial expediency and not from the point of view whether the amount was advanced for earning profits. 13.1. Therefore, respectfully following the ratio laid in the judgment of the Hon'ble Jurisdictional High Court in the case of CIT vs. Raghuvir Synthetics Ltd. (supra), we cannot uphold the action of the authorities below. Therefore, this ground of the assessee's appeal is allowed. 6. On this question also, the Tribunal has relied upon the decision of this Court in the case of CIT vs. Raghuvir Synthetics Limited, reported at (2013) 354 ITR 222 (Gujarat) and has allowed the appeal to that extent in favour of the Assessee. When the question is already covered by the above referred decision of this Court, we do not find that any substantial question would arise for consideration, as canvassed. 7. On question (C), the Tribunal has considered the said aspect at paragraphs 16, 17, 17.1, which reads as under:- 16. Ground No.8 is against confirmation of disallowance of depreciation of Rs.28,776,600/- on building and Plant & Machinery. The ld.counsel for the assessee submitted that the authorities below were not justified in disallowing the claim. He placed reliance on the judgment of Hon'ble Gujarat High Court rendered in the case of ACIT vs. Ashima Syntex Ltd. reported at 251 ITR 133. He submitted that the details were given with regard to installation of the machinery as well as the commencement of the production by producing electricity power consumption bill, registration of excise, etc. He submitted that the authorities below failed to appreciate the fact that it was not necessary that the production so made should be sold, in fact the assessee had furnished evidence of commencement of the production. He submitted that the issue is squarely covered by the judgment of Hon'ble Gujarat High Court rendered in the case of ACIT vs. Ashima Syntex Ltd.(supra). On the contrary, ld.Sr.DR supported the orders of the authorities below. He submitted that the issue is squarely covered by the judgment of Hon'ble Gujarat High Court rendered in the case of ACIT vs. Ashima Syntex Ltd.(supra). On the contrary, ld.Sr.DR supported the orders of the authorities below. He submitted that the assessee should have given the cogent evidence regarding usage of the plant purchased from Pfizer Ltd. and also production so made. 17. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below as well as the judgment relied upon by the ld.counsel for the assessee. The authorities below have not disputed the fact that the assessee has purchased the plant & machinery and installed the same. The authorities below have also not disputed the fact that the assessee has furnished the electricity bill, etc. and also the salary paid to the staff. The Hon'ble Gujarat High Court in the case of ACIT vs. Ashima Syntex Ltd.(supra) has held as under: "39. We are, therefore, of the opinion that when there is commencement of business by way of production of the articles, it can be said that the assessee is entitled to depreciation. 40. It is required to be noted that when an entrepreneur undertakes to invest huge amount for the manufacture of the product, he has to plan it properly. Installation of machinery or plant and machinery in the building itself is not sufficient to attract provisions contained in s. 32 of the Act. There must be use of plant and machinery for the purpose of business as contemplated in s. 32 of the Act. There is thus a thin line between the trial run and actual production, or many a times, the word used as "commercial production". If the machines are installed properly and it gives good result, then one need not wait for any rectification in the system. There may be some cases wherein after commencement of the production, the machine may not give proper result may be on account of failure of certain parts, may be on account of requirement of certain additional machinery, etc. In such case, the production obtained at the initial stage would be considered as trial part or machinery with a view to run the entire unit. It is not the case similar to that case where before the Bombay High Court there was no production and only tools were tested. In such case, the production obtained at the initial stage would be considered as trial part or machinery with a view to run the entire unit. It is not the case similar to that case where before the Bombay High Court there was no production and only tools were tested. The present case is not similar to that of Speciality Paper (supra) where wet press was required to be installed and even thereafter additional machinery was required to be installed. In the instant case, plant and machinery were installed and it worked smoothly. There may be certain machines, which in view of the latest technology, that require no trial run. If separate parts are fitted and the machine is brought in existence, it may require trial run, but if machinery is imported and merely it is fixed here, it does not mean that the machine would not work. Ultimately, on evidence, the Tribunal has found that 2,68,412 mtrs. of grey cloth was manufactured. Law does not require that there must be optimum production for granting the benefit. Law only required that there must be use of plant and machinery for the purpose of business. Use of such words that plant and machinery was run more extensively or was required to be used for larger production, is not to be found in the Act or Rules. Whether the plant and machinery were upto the extent of its efficiency is irrelevant for the purpose of deciding depreciation. The test is that building, plant and machinery are used for the purpose of business. It is not even necessary that in a year it must have been used for a particular number of days. If the intention of the legislature was that if the plant and machinery is used for a particular number of days, only then one is entitled to get the benefit of depreciation, legislature would have made that provision. Earlier, rules were to the aforesaid extent. Even recently, with regard to depreciation of vehicles, law is made clear. Therefore, it is for the legislature to make a provision in that regard. Unless and until that provision is made, plant, machinery and building used for the purpose of business in a particular year irrespective of number of days for which it worked, and if worked for the purpose of business, would attract the provisions of s. 32 of the Act." 17.1. Unless and until that provision is made, plant, machinery and building used for the purpose of business in a particular year irrespective of number of days for which it worked, and if worked for the purpose of business, would attract the provisions of s. 32 of the Act." 17.1. In the present case, the assessee has produced the evidence of electricity power consumption that goes to show that the Plant was running and this fact is not rebutted by placing any contrary evidence on record by the Revenue that the electricity so consumed for any other purpose. Therefore, respectfully following the ratio laid down by the Hon'ble Jurisdictional High Court in the case of ACIT vs. Ashima Syntex Ltd.(supra), we hereby delete the disallowance and direct the AO to allow the depreciation amounting to Rs.28,77,600/- as claimed by the assessee. 8. On the aforesaid question also, as the question is already covered by the decision of this Court in the case of ACIT vs. Ashima Syntex Limited, reported in 251 ITR, 133, we do not find that such question can be considered as substantial question of law, which may arise in the present appeal, as canvassed. 9. In our view questions (D), (E), (F) as well as question (G) would arise for consideration in the present appeal being substantial questions of law. 10. Hence, the present appeal is not admitted on Questions (A), (B) and (C), but the appeal is admitted only on Questions (D), (E), (F) and (G).