M/S. ABU DHABI COMMERICAL BANK LTD, MUMBAI V. THE DDIT (IT)-1(1), MUMBAI

CO 114/MUM/2007

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7714 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 1 month(s) 27 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 03-08-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: L
• Next Hearing Date: 26-07-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 06-06-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: A V SONDE
• Keywords: Reopening of assessment; Business income; Earning of tax free income; Proportionate interest
• Section: 143(3); 244A; 14A; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL L BENCH, MUMBAI , ' #$ , .. &'( ) #$ #* BEFORE SHRI DINESH KUMAR AGARWAL, JM AND SHRI P.M. JAGTAP , AM #./ I.T.A. NO. 6530/MUM/2006 ( ' , -, ' , -, ' , -, ' , -, / / / / ASSESSMENT YEARS : 2003-04) ABU-DHABI COMMERCIAL BANK LTD., 75B REHMAT MANZIL, VEER NARIMAN ROAD, MUMBAI 400 020. VS. THE DEPUTY DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION)- 1(1), SCINDIA HOUSE, NAROTTAM MORARJEE MARG, BALLARD ESTATE, MUMBAI 400 038. $. ) #./ PAN: AAACA 4216B ( ./ / // / APPELLANT ) .. ( 01./ / RESPONDENT ) #./ I.T.A. NO. 3463/MUM/2010 ( ' , ' , ' , ' , -, -, -, -, / / / / ASSESSMENT YEARS : 2004-05) ABU-DHABI COMMERCIAL BANK LTD., 75B REHMAT MANZIL, VEER NARIMAN ROAD, MUMBAI 400 020. VS. THE DEPUTY DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION)- 1(1), SCINDIA HOUSE, NAROTTAM MORARJEE MARG, BALLARD ESTATE, MUMBAI 400 038. $. ) #./ PAN: AAACA 4216B ( ./ / // / APPELLANT ) .. ( 01./ / RESPONDENT ) ITA 6530/M/2006 ITA 3463/M/2010 ITA 581/M/2007 C.O. 114/M/2007 2 #./ I.T.A. NO. 581/MUM/2007 ( ' , -, ' , -, ' , -, ' , -, / / / / ASSESSMENT YEARS : 2003-04) THE DEPUTY DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION)-1(1), SCINDIA HOUSE, NAROTTAM MORARJEE MARG, BALLARD ESTATE, MUMBAI 400 038. VS. ABU-DHABI COMMERCIAL BANK LTD., 75B REHMAT MANZIL, VEER NARIMAN ROAD, MUMBAI 400 020. $. ) #./ PAN: AAACA 4216B ( ./ / // / APPELLANT ) .. ( 01./ / RESPONDENT ) CROSS OBJECTION / 01* NO. 114/MUM/2007 ARISING OUT OF ITA NO. 581/MUM/2007 ( ' , -, ' , -, ' , -, ' , -, / / / / ASSESSMENT YEAR : 2003-04) ABU-DHABI COMMERCIAL BANK LTD., 75B REHMAT MANZIL, VEER NARIMAN ROAD, MUMBAI 400 020. VS. THE DEPUTY DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION)- 1(1), SCINDIA HOUSE, NAROTTAM MORARJEE MARG, BALLARD ESTATE, MUMBAI 400 038. $. ) #./ PAN: AAACA 4216B CROSS OBJECTOR .. ( 01./ / RESPONDENT ) ASSESSEE BY: SHRI A.V. SONDE REVENUE BY : SHRI MAHESH KUMAR # 2 () / // / DATE OF HEARING : 26-7-2012 34- 2 () / DATE OF PRONOUNCEMENT : 03-08-2012 ITA 6530/M/2006 ITA 3463/M/2010 ITA 581/M/2007 C.O. 114/M/2007 3 / O R D E R PER DINESH KUMAR AGARWAL, J.M. THE APPEAL IN ITA NO. 6530/MUM/2006 AND 581/MUM/200 7 ARE CROSS APPEALS PREFERRED BY THE ASSESSEE AND THE REVENUE A RE DIRECTED AGAINST THE ORDER DTD. 5-9-2006 PASSED BY THE LD. CIT(A) FOR TH E A.Y. 2003-04. THE APPEAL IN ITA NO. 3463/MUM/2010 PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DTD. 18-2-2010 PASSED BY THE LD. CIT(A) FOR A.Y. 2004-05. THE ASSESSEE HAS ALSO FILED C.O. FOR THE A.Y. 2003-04. SINCE THE FACTS ARE IDENTICAL AND ISSUES INVOLVED ARE COMMON, ALL THE APPEALS AND C.O. ARE D ISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 6530/MUM/2006 (BY ASSESSEE FOR A.Y. 2003-04 ) 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE IS A COMMERCIAL BANK HAVING ITS HEAD OFFICE IN U.A.E. THE ASSESSEE HAS TWO BRANCHES IN INDIA I.E. MUMBAI AND BANGALORE. IT IS INVOLVED IN NORMAL BAN KING ACTIVITIES INCLUDING FINANCING OF FOREIGN TRADE AND FOREIGN EXCHANGE TRA NSACTIONS. DURING THE COURSE OF ASSESSMENT PROCEEDING IT WAS INTER ALIA OBSERVED BY THE A.O. THAT THE ASSESSEE HAS CLAIMED HEAD OFFICE EXPENSES OF RS. 1, 98,01,876/- BASED ON THE ACTUAL EXPENSES INCURRED BY THE HEAD OFFICE WHICH A RE ATTRIBUTABLE TO INDIAN BRANCH. HE FURTHER OBSERVED THAT THE ENTIRE EXPEND ITURE HAS BEEN CLAIMED BY WAY OF DEDUCTION ON THE GROUND THAT NO RESTRICTION SHOULD BE MADE IN VIEW OF ARTICLE 7(3) OF THE TREATY. HOWEVER, THE A.O. DID NOT AGREE WITH THE CLAIM OF THE ITA 6530/M/2006 ITA 3463/M/2010 ITA 581/M/2007 C.O. 114/M/2007 4 ASSESSEE AND HELD THAT ALL THE SAID EXPENDITURE, WH ICH ARE NOT DEBITED TO THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND ARE EXECUTIVE AND ADMINISTRATIVE IN NATURE HAVE TO BE TREATED AS HEAD OFFICE EXPENSES I N RESPECT OF WHICH DEDUCTION IS ALLOWABLE ONLY AS PER PROVISIONS OF SECTION 44-C OF THE INCOME TAX ACT, 1961 (THE ACT). ACCORDINGLY HE DISALLOWED THE SAME. ON APPEAL THE LD. CIT(A) FOLLOWING THE APPELLATE ORDER FOR THE ASSESSMENT YE ARS 1997-98, 1998-99, 1999- 2000, 2000-01 AND 2002-03 HELD THAT THE FULL CLAIM OF HEAD OFFICE ADMINISTRATION AND SUPERVISION EXPENSES ATTRIBUTABL E TO INDIAN BRANCH CANNOT BE ALLOWED AND THIS EXPENDITURE IS TO BE ALLOWED TO THE EXTENT OF LIMIT PRESCRIBED BY SECTION 44-C AND ACCORDINGLY UPHELD THE DISALLOW ANCE MADE BY THE A.O. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING THE SUSTENANCE OF DISALLOWANC E OF HEAD OFFICE EXPENSES ALLOCATED TO THE INDIAN BRANCH IS AMOUNTING TO RS. 1,98,01,876/-. 4. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE SUBMITS THAT THIS ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY T HE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NOS. I.T.A. NO.3462/M/20 10 AND OTHERS FOR ASSESSMENT YEARS 1995-96 TO 2000-01 WHEREIN THE TRI BUNAL VIDE ORDER DTD. 20- 7-2012 HAS HELD THAT THE INCOME OF THE PE OF THE AS SESSEE SHOULD BE COMPUTED AS BUSINESS INCOME AFTER ALLOWING ALL THE EXPENSES ATTRIBUTABLE TO ITS BUSINESS IN INDIA INCLUDING THE HEAD OFFICE EXPENSES. HE AL SO PLACED ON RECORD A COPY OF THE SAID ORDER OF THE TRIBUNAL. ITA 6530/M/2006 ITA 3463/M/2010 ITA 581/M/2007 C.O. 114/M/2007 5 5. ON THE OTHER HAND, THE LD. D.R. WHILE ADMITTING THAT THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE, HOWEVE R, SUPPORTS THE ORDER OF THE A.O. AND THE LD. CIT(A). 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND T HAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS IT IS ALSO NOT IN DISPUTE THAT SIMILAR DISALLOWANCE WAS MADE BY THE A.O. IN THE PRECEDING ASSESSMENT YEARS AND THE LD. CIT(A) FOLLOWING THE APPELLATE ORDER FOR THE EARLIER ASSESSMENT YEAR S HAS CONFIRMED SIMILAR DISALLOWANCE MADE BY THE A.O. WE FURTHER FIND THAT THE TRIBUNAL IN ASSESSEES OWN CASE (SUPRA) VIDE PARA 14 OF ITS ORDER HAS HELD AS UNDER:- THUS, IN VIEW OF OUR ABOVE FINDING, WE HOLD THAT, FIRSTLY , IN THE ASSESSMENT YEAR INVOLVED, LIMITATION CLAUSE OF APPLICABILITY OF INC OME-TAX ACT WILL NOT APPLY IN ARTICLE 7(3) AND CONSEQUENTLY PROVISIONS OF SECTION S 44C WILL NOT BE APPLICABLE; SECONDLY , THE AMENDMENT BROUGHT BY WAY OF PROTOCOL BY WHICH ARTICLE 7(3) HAS BEEN AMENDED AND LIMITATION CLAUSE HAS BEEN BROUGHT IN, WILL APPLY FROM 1ST APRIL, 2008 AND WILL NOT HAVE ANY RETROSPECTIVE EFF ECT; THIRDLY , THE JUDGMENT OF MASHREQBANK PSC(SUPRA) , IS NO LONGER RELEVANT IN VIEW OF THE DECISION OF THE SPECIAL BENCH IN THE CASE OF M/S SUMITOMO MITSUI BANKING CORP.(SUPRA) .AND LASTLY , FROM THE ABOVE CONCLUSIONS, IT IS HELD THAT COMPU TATION OF INCOME AND DISALLOWANCE OF EXPENSES RELATING TO HEAD OFFICE CA NNOT BE MADE BY INVOKING THE PROVISIONS OF SECTION 44C OF IT ACT. THUS, IN VIEW OF THE ABOVE CONCLUSIONS, WE HOLD THAT INCOME OF THE PE OF THE ASSESSEE SHOULD B E COMPUTED AS BUSINESS INCOME AFTER ALLOWING ALL THE EXPENSES ATTRIBUTABLE TO ITS BUSINESS IN INDIA INCLUDING THE HEAD OFFICE EXPENSES. 7. IN ABSENCE OF ANY DISTINGUISHING FEATURE BROUGHT ON RECORD BY THE REVENUE, WE RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL (SUPRA) DELETE THE ITA 6530/M/2006 ITA 3463/M/2010 ITA 581/M/2007 C.O. 114/M/2007 6 DISALLOWANCE OF RS. 1,98,01,876/- MADE BY THE A.O. AND SUSTAINED BY THE LD. CIT(A). THE GROUND TAKEN BY THE ASSESSEE IS, THERE FORE, ALLOWED. ADDITIONAL GROUND AND C.O. NO. 114/MUM/2004 (BY ASS ESSEE FOR A.Y. 2003-04) : 8. THE ASSESSEE IN THE ADDITIONAL GROUND AND IN THE C.O. HAS CHALLENGED THE A.OS ACTION FOR APPLYING THE TAX RATE OF 40% PLUS SURCHARGE TO THE ASSESSEES BUSINESS INCOME INSTEAD OF 35% PLUS SURCHARGE. 9. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE VERY FAIRLY SUBMITS THAT THIS ISSUE STANDS COVERED AGAINST THE ASSESSEE BY THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEARS 1995-96, 1996-97 AND 1997-98, THEREFORE, THE ISSUE MAY BE DECIDED ACCORDINGLY. 10. ON THE OTHER HAND, THE LD. D.R. SUPPORTS THE OR DER OF THE A.O. AND THE LD. CIT(A). 11. AFTER HEARING THE RIVAL PARTIES AND PERUSING TH E MATERIAL AVAILABLE ON RECORD WE FIND THAT THE TRIBUNAL IN ASSESSEES OWN CASE (SUPRA) AFTER FOLLOWING THE EARLIER ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 4316 & 4317/M/2000 AND OTHERS FOR ASSESSMENT YEARS 1995-96 TO 1997-98 DTD. 14-2- 2007 VIDE PARA 35 OF THE ORDER DTD. 20-7-2012 HAS D ECIDED THE ISSUE AGAINST THE ITA 6530/M/2006 ITA 3463/M/2010 ITA 581/M/2007 C.O. 114/M/2007 7 ASSESSEE. IN THE ABSENCE OF ANY DISTINGUISHING FEAT URE BROUGHT ON RECORD BY THE ASSESSEE, WE RESPECTFULLY FOLLOWING THE CONSISTENT VIEW OF THE TRIBUNAL, REJECT THE ADDITIONAL GROUND AND C.O. TAKEN BY THE ASSESSEE. ITA 581/MUM/2007 (BY REVENUE FOR A.Y. 2003-04) 12. THE GROUNDS TAKEN BY THE REVENUE READ AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT IN THE ABSENCE OF ANY NEXUS THE ASSESSING OFFICER HAS WRONGLY ATTRIBUTED INTEREST OF RS. 2,74 ,04,053/- TOWARDS THE TAX FREE BONDS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING THE APPEAL ON THIS GROUND . 13. BRIEF FACTS OF THE ABOVE ISSUE ARE THAT THE A.O . OBSERVED DURING THE YEAR THE ASSESSEE HAS EARNED INTEREST RS. 3,01,12,220/- FROM TAX FREE BONDS AND CLAIMED AS EXEMPT U/S 10(33) AND 10(15) OF THE ACT. THE A.O. FURTHER OBSERVED THAT THE POINT FOR CONSIDERATION IS WHETHER IT IS T HE GROSS RECEIPT OR THE NET INCOME EARNED OUT OF SUCH RECEIPTS, WHICH IS EXEMPT U/S 10(15) AND 10(33) OF THE ACT. THE A.O. AFTER CONSIDERING THE RELEVANT P ROVISIONS OF SECTION 10 HELD THAT THE ENTIRE INTEREST RECEIVED IS NOT EXEMPT U/S 10 AND INTEREST EXPENDITURE OF RS. 2,74,04,053/- IS ALLOCABLE TO EXEMPT INCOME BY FOLLOWING HIS REASONING THAT THE PROPORTIONATE INTEREST EXPENDITURE IN THE PROPORTION OF EXEMPT INTEREST INCOME TO TOTAL INTEREST INCOME IS ATTRIBUTABLE TO THE EXEMPT INTEREST INCOME. ON APPEAL THE LD. CIT(A) WHILE OBSERVING THAT IN TH E ABSENCE OF ANY NEXUS AND FOLLOWING THE APPELLATE ORDER FOR THE A.Y. 2002-03 HELD THAT THE A.O. HAS ITA 6530/M/2006 ITA 3463/M/2010 ITA 581/M/2007 C.O. 114/M/2007 8 WRONGLY ATTRIBUTED INTEREST OF RS. 2,74,04,053/- T OWARDS THE TAX FREE BONDS AND ACCORDINGLY DELETED THE DISALLOWANCE MADE BY THE A. O. 14. AT THE TIME OF HEARING THE LD. D.R. WHILE RELYI NG ON THE ORDER OF THE A.O. SUBMITS THAT SINCE THE A.O. HAS NOT EXAMINED THE IS SUE IN THE LIGHT OF THE PROVISIONS OF SECTION 14-A OF THE ACT, THEREFORE, T HE ISSUE MAY BE SET ASIDE TO THE FILE OF THE A.O. THE RELIANCE WAS ALSO PLACED ON T HE DECISION OF THE TRIBUNAL IN DRESDNER BANK AG VS. ADDL. CIT (2007) 108 ITD 375 ( MUM). 15. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSE SSEE SUBMITS THAT THIS ISSUE ALSO STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE (SUPRA), THEREFORE, THE GROUND TAKEN BY THE REVENUE IS LIABLE TO BE REJECTED. 16. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND M ERIT IN THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ISSUE STANDS COVE RED IN FAVOUR OF THE ASSESSEE BY THE CONSISTENT VIEW OF THE TRIBUNAL IN ASSESSES OWN CASE. RECENTLY THE TRIBUNAL IN ITA NO. 2205/MUM/2004 FOR A.Y. 1998-99 (SUPRA) AFTER FOLLOWING THE EARLIER ORDER OF THE TRIBUNAL FOR A.Y. 1997-98 HAS HELD VIDE PARA 40 TO 42 OF THE ORDER DTD. 20-7-2012 AS UNDER:- 40. IN GROUND NO.1 OF THIS APPEAL, THE DEPARTMENT HAS CHALLENGED ALLOWING OF EXEMPTION U/S 10(15) OF THE ACT, IN RESPECT OF GRO SS RECEIPTS AND NOT IN RESPECT OF THE NET INCOME ARISING TO THE ASSESSEE. ITA 6530/M/2006 ITA 3463/M/2010 ITA 581/M/2007 C.O. 114/M/2007 9 41. AT THE OUTSET, LEARNED COUNSEL SUBMITTED THAT T HIS ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL IN ASSESSEE S OWN CASE IN ASSESSMENT YEAR 1997-1998 IN ITA NO.2116/M/2001 AND CATENA OF OTHER DECISIONS PASSED BY THE ITAT, MUMBAI BENCH. AFTER GONE THROUGH THE O RDER OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 1997-1998, WE FIND THAT THIS ISSUE STANDS ALLOWED IN FAVOUR OF THE ASSESSEE AFTER OBSERVING AND HOLDING AS UNDER: WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIALS ON RECORD. WE FIND THAT IN THE CASE OF STATE BANK OF I NDI (SUPRA), THIS ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE A SSESSEE BY HOLDING THAT FOR EXEMPTION U/S 10(15), GROSS INTEREST HAS T O BE CONSIDERED. WHILE HOLDING SO, THE TRIBUNAL HAS FOLLOWED THE JUDGMENT OF HONBLE BOMBAY HIGH COURT RENDERED IN THE CASE OF CIT VS. NEW GREA T INSURANCE CO. LTD., 90 ITR 348 AND ALSO ON THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF RAJASTHAN WAREHOUSING CORPORATION, 242 ITR 450. IN THE CASE OF JCIT VS. MASHREQU BANK PSC (SUPRA), THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE TR IBUNAL JUDGMENT RENDERED IN THE CASE OF STATE BANK OF INDIA (SURPA) . IN THE CASE OF BRITISH BANK OF MIDDLE EAST (SUPRA) ALSO, THE ISSUE HAS BEE N DECIDED BY FOLLOWING THE TRIBUNAL JUDGMENT IN THE CASE OF STATE BANK OF INDIA (SUPRA ) AND IT HELD THAT PROVISIONS OF SECTION 10(15)(IV) ARE VERY CLEAR AND UNAMBIGUOUS AND WHAT IS EXEMPT UNDER THE SAID SECTION IS INTER EST PAYABLE AND NOT THE INCOME BY WAY OF THE INTEREST; AND HENCE, THE R EVENUES GRIEVANCE IS DEVOID OF ANY SUBSTANCE AND THE SAME WAS REJECTED. RESPECTFULLY FOLLOWING THE PRECEDENT, THIS ISSUE IS DECIDED IN FAVOUR OF T HE ASSESSEE AND THIS GROUND OF THE REVENUE IS REJECTED. 42. THUS, RESPECTFULLY FOLLOWING THE AFORESAID DECI SION, THIS GROUND IS DECIDED AGAINST THE DEPARTMENT AND IN FAVOUR OF THE ASSESSE E. IN THE RESULT, GROUND NO.1 IS DISMISSED. 17. AS REGARDS THE PLEA TAKEN BY THE LD. D.R. THAT THE ISSUE MAY BE SET ASIDE TO THE FILE OF THE A.O. FOR CONSIDERING THE ISSUE I N THE LIGHT OF THE PROVISIONS OF SECTION 14A OF THE ACT, WE FIND THAT EVEN AFTER INS ERTION OF SECTION 14A, INSERTED BY FINANCE ACT, 2001 W.R.E.F. 1-4-1962, THE A.O. HA S NOT INVOKED THE PROVISIONS OF SECTION 14A OF THE ACT. HOWEVER, ON APPEAL THE LD. CIT(A) WHILE EXAMINING THE APPLICABILITY OF PROVISIONS OF SECTION 14A RELIED U PON THE DECISION OF THE TRIBUNAL IN THE CASE OF MARUTI UDYOG LTD. VS. DY. C IT (2005) 92 ITD 119 (DEL.) ITA 6530/M/2006 ITA 3463/M/2010 ITA 581/M/2007 C.O. 114/M/2007 10 WHEREIN IT HAS BEEN HELD THAT EVEN AFTER DEDUCTION OF SECTION 14A, THE REVENUE HAS TO ESTABLISH THE NEXUS OF BORROWED FUND WITH TA X FREE INVESTMENT. IN THE ABSENCE THEREOF AND KEEPING IN VIEW THAT NEITHER TH E A.O. HAS INVOKED THE PROVISIONS OF SECTION 14A AND NOR SUCH GROUND HAS B EEN TAKEN BY THE REVENUE DESPITE THE FINDING GIVEN BY THE LD. CIT(A) IN THIS REGARD, WE ARE OF THE VIEW THAT THE PLEA TAKEN BY THE LD. D.R. AT THIS STAGE IS NOT MAINTAINABLE AND HENCE WE REJECT THE SAME. THIS BEING SO, WE RESPECTFULLY FO LLOWING THE CONSISTENT VIEW OF THE TRIBUNAL IN ASSESSEES OWN CASE (SUPRA) DECLINE TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT(A) IN DELETING THE DISALLOWAN CE MADE BY THE A.O. THE GROUNDS TAKEN BY THE REVENUE ARE, THEREFORE, REJECT ED. ITA NO. 3463/MUM/2010 (BY ASSESSEE FOR A.Y. 2004-05 ) 18. GROUND OF APPEAL NO. 1(A), (B) & (C) ARE ON THE VAL IDITY OF REOPENING OF ASSESSMENT U/S 147 R.W.S. 143(3) OF THE ACT. 19. THE LD. COUNSEL FOR THE ASSESSEE AFTER REFERRIN G PAGES 1 TO 11 OF THE ASSESSEES PAPER BOOK CONTAINING COPY OF NOTICE U/S 148, COPY OF REASONS RECORDED BY THE A.O. AND ASSESSEES REPLY REITERATE S THE SAME SUBMISSIONS AS SUBMITTED BEFORE THE LD. CIT(A) AND FURTHER SUBMITS THAT THE REOPENING OF THE ASSESSMENT U/S 147/148 OF THE ACT BE QUASHED. 20. THE LD. D.R., ON THE OTHER HAND, SUPPORTS THE O RDER OF THE A.O. AND THE LD. CIT(A). ITA 6530/M/2006 ITA 3463/M/2010 ITA 581/M/2007 C.O. 114/M/2007 11 21. AFTER HEARING THE RIVAL PARTIES AND PERUSING TH E MATERIAL AVAILABLE ON RECORD AND KEEPING IN VIEW THAT SINCE WE HAVE DECID ED THE ASSESSEES APPEAL FOR A.Y. 2003-4 (SUPRA) ON MERIT IN FAVOUR OF THE ASSES SEE, THEREFORE, WE DO NOT CONSIDER IT NECESSARY TO ADJUDICATE THE ISSUE ON TH E REOPENING OF THE ASSESSMENT U/S 147/148 OF THE ACT AND ACCORDINGLY T HE GROUNDS TAKEN BY THE ASSESSEE ARE REJECTED. 22. GROUND OF APPEAL NO. 2(A), (B) & (C) ARE AGAINS T THE SUSTENANCE OF DISALLOWANCE OF HEAD OFFICE EXPENSES ALLOCATED TO I NDIAN BRANCH RS. 2,04,59,104/-. 23. AT THE TIME OF HEARING BOTH THE PARTIES HAVE AG REED THAT THE FACTS OF THE ABOVE ISSUE ARE SAME AS IN THE ASSESSEES APPEAL FO R THE A.Y. 2003-04, THEREFORE, THE PLEA TAKEN BY THE PARTIES IN THE SAI D APPEAL MAY BE CONSIDERED WHILE DECIDING THE ABOVE GROUNDS OF APPEAL. 24. AFTER HEARING THE RIVAL PARTIES AND PERUSING TH E MATERIAL AVAILABLE ON RECORD AND IN THE ABSENCE OF ANY DISTINGUISHING FEA TURE BROUGHT ON RECORD BY THE REVENUE, WE, KEEPING IN VIEW OF OUR FINDING REC ORDED IN PARA 6 & 7 OF THIS ORDER DELETE THE DISALLOWANCE OF RS. 2,04,59,104/- MADE BY THE A.O. AND SUSTAINED BY THE LD. CIT(A). THE GROUNDS TAKEN BY THE ASSESSEE ARE, THEREFORE, ALLOWED. ITA 6530/M/2006 ITA 3463/M/2010 ITA 581/M/2007 C.O. 114/M/2007 12 25. GROUND NO. 3(A), (B) & (C) ARE AGAINST THE DIRE CTION OF THE LD. CIT(A) TO ALLOW INTEREST U/S 244 A OF THE ACT UP TO THE DATE OF ISSUE OF REFUND VOUCHER. 26. BRIEF FACTS OF THE ABOVE ISSUE ARE THAT THE ASS ESSEE CLAIMED THAT IT IS ENTITLED TO REFUND U/S 244A OF THE ACT FROM THE DAT E OF REGULAR ASSESSMENT TO THE DATE OF RECEIPT OF REFUND VOUCHER AND IN SUPPOR T, THE RELIANCE WAS ALSO PLACED ON VARIOUS DECISIONS APPEARING AT PAGE 10 OF THE ORDER OF THE LD. CIT(A). HOWEVER, THE LD. CIT(A) WHILE RELYING ON THE CBDT C IRCULAR NO. 20-D(XXII) OF 1968 DTD. 20-8-1968 INTER ALIA STATING THAT INTERES T SHOULD BE CALCULATED UP TO THE DATE OF REFUND VOUCHER AND KEEPING IN VIEW THAT THE WORDS USED U/S 244 AND 244A THAT THE DATE ON WHICH THE REFUND IS GRAN TED, DIRECTED THE A.O. TO GRANT INTEREST U/S 244A OF THE ACT UP TO THE DATE O F ISSUE OF REFUND VOUCHER. 27. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THIS ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY T HE ORDER OF THE TRIBUNAL (SUPRA), THEREFORE, THE ISSUE MAY BE DECIDED ACCORD INGLY. IN SUPPORT, THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO FILED THE COPY OF THE TRIBUNAL ORDER IN ASSESSEES OWN CASE IN ITA NO. 5136/MUM/2009 FOR A. Y. 1990- 91 DTD. 2-7-2010. 28. ON THE OTHER HAND, THE LD. D.R. SUPPORTS THE OR DER OF THE A.O. AND THE LD. CIT(A). 29. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND M ERIT IN THE PLEA OF THE LD. ITA 6530/M/2006 ITA 3463/M/2010 ITA 581/M/2007 C.O. 114/M/2007 13 COUNSEL FOR THE ASSESSEE THAT THE SIMILAR GROUND 2( C) WAS ALSO TAKEN BY THE ASSESSEE IN ITS APPEAL IN ITA NO. 3857/MUM/2010 FOR A.Y. 1996-97. THE TRIBUNAL WHILE RELYING ON THE EARLIER ORDER OF THE TRIBUNAL FOR A.Y. 1990-91 HAS RESTORED THE ISSUE TO THE FILE OF THE A.O. VIDE FIN DING RECORDED IN PARA 22, 23 AND 24 OF THE ORDER DTD. 20-7-2012. IN THE ABSENCE OF A NY DISTINGUISHING FEATURE BROUGHT ON RECORD BY THE REVENUE AND RESPECTFULLY F OLLOWING THE CONSISTENT VIEW OF THE TRIBUNAL, SET ASIDE THE ISSUE TO THE FILE OF THE A.O. TO DECIDE THE SAME AFRESH IN THE LIGHT OF THE DIRECTION OF THE TRIBUNA L (SUPRA) AND ACCORDING TO LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE. THE GROUNDS TAKEN BY THE ASSESSEE ARE, THEREFORE, PARTL Y ALLOWED FOR STATISTICAL PURPOSES. 30. IN THE RESULT, ASSESSEES APPEALS FOR A.Y. 2003 -04 AND 2004-05 ARE PARTLY ALLOWED AND THE REVENUES APPEAL AND ASSESSEES C.O . FOR A.Y. 2003-04 ARE DISMISSED. 5 (6 ' ,5( 2 7 7 $ ( 8 2 &( 9: , &$ 2 01* )5& 2 &( 9: ORDER PRONOUNCED IN THE OPEN COURT ON 03-08-2012. . 2 34- ) 6 03-08-2012 4 2 ' SD/- SD/- ( P.M. JAGTAP ) ( DINESH KUMAR AGARWAL ) ) #$ / ACCOUNTANT MEMBER ' #$ / JUDICIAL MEMBER MUMBAI ; DATED 3 RD AUG. 2012 ITA 6530/M/2006 ITA 3463/M/2010 ITA 581/M/2007 C.O. 114/M/2007 14 .'.#./ . R.K. , SR. PS 2 0'(7B B-( 2 0'(7B B-( 2 0'(7B B-( 2 0'(7B B-(/ COPY OF THE ORDER FORWARDED TO : 1. ./ / THE APPELLANT 2. 01./ / THE RESPONDENT. 3. C () / THE DRP- 1 MUMBAI 4. C / DIT , MUMBAI. 5. B E' 0'(' , , / DR, ITAT, MUMBAI L 6. 'F, G / GUARD FILE. # # # # / BY ORDER, #1B( 0'( //TRUE COPY// H HH H/ // /#9 & #9 & #9 & #9 & (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI