Dilip B. Bhosale, J.

1. These three appeals are arising from two orders passed by the Income Tax Appellate Tribunal in three appeals, filed by one and the same assessee. The assessment year in ITA 59/2007 is 1999-2000; in ITA No.488/2007:2000-2001 and in ITA No.489/2007:2001-2002. The order of the Tribunal, impugned in ITA No.59/2007, is dated 16.06.2006 whereas, the order passed by the Tribunal in the appeals, from which, ITA Nos.488/2007 and 489/2007 arise is dated 31.01.2007. The facts and circumstances involved in three appeals and the substantial questions of law raised therein are similar.

2. For the sake of convenience, we would refer to the facts in ITA No.59/2007. Before we narrate the facts, it would be necessary to reproduce the question of law that was formulated at the time of admission of the appeal for consideration, which read thus:-

"Whether the findings of the Income Tax Appellate Tribunal that the income of Rs.1,33,45,000/- received by the assessee cannot be treated as revenue receipt is perverse, arbitrary and contrary to law?

The amount reflected in the question is for the assessment year 2000-2001. Insofar as the assessment year 1999-2000 is concerned, the amount of income is Rs.21,28,40,000/- and Rs.2,95,84,556/- for the assessment year 2001-2002.

3. Before we proceed further, it would be necessary to state as to what happened when hearing of these appeals commenced. When these appeals were called out for hearing, and Mr. Aravind, learned counsel for the appellant-Revenue started addressing the Court, Mr. Malhara Rao, learned advocate appearing for the assessee, with Mr. P. Dinesh in ITA No.489/2007 requested to keep these appeals back for some time. He submitted that one Mr. Nageshwar Rao would appear on behalf of the assessee and that he was busy in some other Court. Mr. Aravind, learned counsel for the revenue submitted that he would continue and when Mr. Nageshwar Rao appears, he may be heard on behalf of the respondent-assessee, to which Mr. Malhara Rao and Mr. Vinay, Advocates, for the assessee consented. Accordingly, Mr. Aravind commenced his argument and within 10-15 minutes, when the arguments were in progress, Mr. Nageshwar Rao entered the Court. Mr. Malhara Rao and Mr. Vinay for M/s. Harish & Co., were present in the Court throughout. After the arguments of Mr. Aravind were heard for about an hour, Mr. Nageshwar Rao requested for adjournment on the ground that he had received vakalatnama on behalf of the assessee last evening and that he would file it after obtaining no objection from the advocates on record in all the three matters, and would argue on merits in the next week. We asked Mr. Nageshwar Rao, whether he had instructions to appear as a counsel in the matter on behalf of the assessee, to which, his reply was in the negative. He submitted that he would like to file his vakalat and then argue the appeals as an advocate on record. We, therefore, rejected his request for adjournment and asked Mr. Malhara Rao and Mr. Vinay for M/s. Harish & Co., the advocates on record to make submissions on merits. They both, it seems were ready to argue on merits, advanced arguments on behalf of the assessee, to which we would make reference in the later part of the judgment.

4. The assessee is a company incorporated under the provisions of the Companies Act, 1956. The assessee is engaged in the business of manufacturing Digital Electronic switching systems, computer software and also software services. They had filed return of income for the Assessment years 1999-2000, 2000-2001 and 2001-2002 declaring loss of Rs.9,05,30,417/- for the assessment year 1999-2000; Rs.7,29,68,898/- for 2000-01 and Rs.45,64,59,705/- for 2001-02. Insofar as the assessment year 1999-2000 is concerned, it was processed under Section 143(l)(a) of the Income Tax Act (for short 'the Act') on 30.03.2001 accepting the returned loss and accordingly a refund of Rs. 33,79,222/- including interest under Section 244A of Rs.7,13,155/-