DBS BANK LTD, MUMBAI V. DDIT (IT) 1(2), MUMBAI

CO 189/MUM/2013

• Counselvise Citation: [2016] 112 COUNSELVISE.COM (IT) 4172 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 20 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 15-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: L
• Next Hearing Date: 13-04-2016
• Assessment Year: 1995-1996
• Appeal Filed On: 26-08-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J CHAUHAN
• Assessee Lawyers: P J PARDIWALLA
• Keywords: Depreciation; Opportunity of being heard; Tax effect; Condonation of delay; Set aside
• Section: 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ' L ' BENCH, MUMBAI BEFORE SHRI JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DAY , JUDICIAL MEMBER CO NO. 189 /MUM/201 3 (ARISING OUT OF ITA NO. 434/MUM/2011 (ASSESSMENT YEAR: 1995 - 96 ) M/S. DBS BANK LTD. VS. DY DIRECTOR OF INCOEM TAX 3 RD FLOOR, FORT HOUSE 221, DR. D.N. ROAD MUMBAI 400001 (INTERNATINAL TAXTION), 1(2) SCINDIA HOUSE, N.M. MARG MUMBAI 400020 PAN - AAACT4652J CROSS OBJECTOR APPELLANT IN APPEAL APPELLANT BY: SHRI P.J. PARDIWALLA & SHRI MADHUR AGARWAL RESPONDENT BY: SHRI J. CHAUHAN DATE OF HEARING: 07 .06 .2016 DATE OF PRONOUNCEMENT: 15 .0 6 .2016 O R D E R PER JASON P. BOAZ, A.M . THIS CROSS OBJECTION (CO) IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 10, MUMBAI DATED 05.10.2010 FOR A.Y. 1995 - 96. REVENUES APPEAL IN ITA 434/MUM/2011 WAS DISMISSED VIDE ORDER DATED 15.02.2006 ON ACCOUNT OF LOW TAX EFFECT (I.E. SINCE THE TAX EFFECT IN ITS APPEAL WAS BELOW ` 10 LAKHS), IN VIEW OF THE CBDTS CIRCULAR NO. 21 DATED 10.12.2015. 2 . ORDER ON THE PETITION FOR CONDONATION OF DELAY IN FILING THE CROSS OBJECTION FOR A.Y. 1995 - 96 2.1 ALONGWITH THE CO, THE ASSESSEE HAS FILED A PETITION FOR C ONDONATION OF DELAY IN FILING THE CO FOR A.Y. 1995 - 96 ACCOMPANIED BY AN AFFIDAVIT DATED 22.08.2013 SWORN TO BY THE ASSESSEES AUTHORISED SIGNATORY. FROM THE PETITION IT IS SEEN THAT THE ASSESSEE HAD ADMITTEDLY RECEIVED NOTICE OF THE DEPARTMENTS APPEAL IN ITA NO. 434/MUM/2011 ON 11.10.2012. AS PER SECTION 253(4) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') THE ASSESSEE WAS TO HAVE FILED ITS CO WITHIN 30 DAYS THEREOF, BUT FILED THE SAME ON 26.08.2013 THEREBY LEADING TO A DELAY OF 285 DAYS. CO NO. 189/MUM/2013 DBS BANK LTD. 2 2.2.1 IN THE P ETITION FOR CONDONATION OF DELAY OF 285 DAYS IN FILING THE CO FOR A.Y. 1995 - 96, THE ASSESSEE HAS PUT FORTH THE FOLLOWING REASONS FOR THE SAID DELAY: - 9. ...... THE APPELLANT S RECEIVED THE DEPARTMENTS APPEAL (ITA NO. 434/MUM/2011) ON 11 OCTOBER 2012. AS PER SECTION 253(4) OF THE ACT, THE CROSS OBJECTIONS SHOULD HAVE BEEN FILED WITHIN THIRTY DAYS FROM THE DATE OF RECEIPT OF THE DEPARTMENTS APPEAL. THUS THERE IS A DELAY OF 285 DAYS (I.E. FROM 11 NOVEMBER 2012 TO 23 AUGUST 2013). 10. THE DEPARTMENTS APPEAL (ITA NO. 434/MUM/2011) WAS FIXED FOR HEARING BEFORE THE HON'BLE MEMBERS OF THE L BENCH ON 30 JULY 2013. 11. DURING THE COURSE OF THE CONFERENCE WITH THE SENIOR COUNSEL ON 29 JULY 2013 FOR PREPARING THE MATTER, IT WAS REALIZED THAT THE APPELLANT IS ENTITLED TO CLAIM THE DEDUCTION FOR THE EXPENDITURE FROM THE DATE OF SET UP OF THE BUSINESS WHICH PRECEDES THE DATE OF COMMENCEMENT OF BUSINESS. THE APPELLANTS HAD NOT FILED ANY CRO SS OBJECTIONS AGAINST THE DEPARTMENTS APPEAL. ON REALISATION OF THIS FACT, THE APPELLANTS WISH TO FILE THE CROSS OBJECTION WITHOUT ANY FURTHER DELAY. 12. YOUR APPELLANTS SUBMIT THAT THERE IS NO MALAFIDE/DELIBERATE INTENTION TO DELAY THE FILING OF CROSS OB JECTION. 13. THE APPELLANTS SUBMIT THAT THIS IS AN INADVERTENT DELAY AND HUMBLY REQUEST THAT THE SAME BE CONDONED AS THE SAME IS BONAFIDE AND GENUINE. 2.2.2 BEFORE US, THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD NO MALAFIDE/DELIBERAT E INTENTION TO DELAY THE FILING OF THE CO. IT IS SUBMITTED THAT WHEN THE ASSESSEE WAS PREPARING TO CONTEST REVENUES APPEAL, IT REALIZED THAT THE LEARNED CIT(A) ONLY ALLOWED THE ASSESSEES EXPENDITURE FROM THE DATE OF COMMENCEMENT OF BUSINESS, I.E. W.E.F. 15.03.1995 AND NOT FROM THE DATE OF SETTING UP OF BUSINESS WHICH PRECEDES COMMENCEMENT OF BUSINESS AS PER THE DIRECTIONS IN THE ORDER OF THE ITAT IN ITA NO. 5272 TO 5274/MUM/2001 DATED 18.04.2007. ON SUCH REALIZATION THE ASSESSEE FILED THE CO AT THE EARLIE ST. IT IS PRAYED THAT SINCE THE DELAY BEING INADVERTENT, THE SAME BE CONDONED IN ACCORDANCE WITH THE PRINCIPLES LAID DOWN, INTER ALIA, BY THE HON'BLE APEX COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS. MST KATIJI & OTHERS (167 ITR 471) (SC) , GANGA SA HAI RAM SWARUP VS. ITAT (2004) 271 ITR 512 (ALL.), ETC. THE CO NO. 189/MUM/2013 DBS BANK LTD. 3 LEARNED D.R. FOR REVENUE WAS ALSO HEARD AND OPPOSED THE ASSESSEES PLEA FOR CONDONATION OF DELAY. 2.2.3 WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. ADMITTEDLY, THERE WAS A DELAY OF 285 DAYS IN FILING THE CO BEFORE THE TRIBUNAL. THE HON'BLE APEX COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS. MST KATIJI (167 ITR 471) (SC) WHILE LAYING DOWN THE PRINCIPLES FOR CONSIDERING MA TTERS OF CONDONATION OF DELAY IN FILING APPEALS HAS STATED THAT SUBSTANTIAL JUSTICE SHOULD PREVAIL OVER TECHNICAL CONSIDERATION S . THE HON'BLE COURT ALSO EXPLAINED THAT EVERYDAYS DELAY MUST OF EXPLAINED DOES NOT MEAN THAT A PEDANTIC APPROACH SHOULD BE TA KEN. THE DOCTRINE MUST BE APPLIED IN A NATURAL, COMMON SENSE AND PRAGMATIC MANNER. CONSIDERING THE AFORESAID PRINCIPLES, IT IS SEEN FROM THE DETAILS SUBMITTED IN THE AFFIDAVIT THAT WHILE HAVING A CONFERENCE WITH THE SR. COUNSEL IN PREPARATION FOR REVENUES APPEAL, IT WAS REALIZED THAT THE ASSESSEE AS PER THE ORDER OF THE ITAT IN ITA NO. 5272 TO 5274/MUM/2001 DATED 18.04.2007, THE ASSESSEE WAS ENTITLED TO CLAIM EXPENDITURE FROM THE DATE OF SETTING UP OF THE BUSINESS WHICH PRECEDES THE DATE OF COMMENCEMENT; W HEREAS AS PER THE IMPUGNED ORDER, THE LEARNED CIT(A) ALLOWED THE ASSESSEES CLAIM FOR EXPENDITURE ONLY FROM THE DATE OF COMMENCEMENT OF BUSINESS WHICH IS IN CONTRAVENTION OF THE TRIBUNALS ORDER (SUPRA) AND THE CO WAS FILED IMMEDIATELY THEREAFTER. CONSIDER ING THE AFORESAID PRINCIPLES LAID DOWN BY THE HON'BLE APEX COURT (SUPRA) AND THE FACTS OF THE CASE ON HAND WE FIND THAT THERE HAS BEEN NO MALAFIDE OR INTENTIONAL FAILURE ON THE PART OF THE ASSESSEE, WHO ON REALIZATION AND APPROPRIATE ADVICE BY THE COUNSEL HAS PROCEEDED TO FILE THE CO. IN THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED VIEW THAT IF THE DELAY OF 285 DAYS IS CONDONED THERE WILL BE NO LOSS TO REVENUE AS LEGITIMATE TAXES PAYABLE IN ACCORDANCE WITH LAW ALONE WOULD BE COLLECTED. FURTHER, IF THE DELA Y IN FILING THE CO IS NOT CONDONED, THEN THE ASSESSEE COULD BE PUT TO GREAT HARDSHIP. 2.2.4 IN VIEW OF THE DISCUSSION OF THE FACTS AND CIRCUMSTANCES OF THE CASE (SUPRA), WE ARE OF THE VIEW THAT IN THE INTEREST OF EQUITY AND JUSTICE THIS IS A FIT CASE FOR C ONDONATION OF DELAY OF 285 DAYS IN FILING THE CO FOR A.Y. 1995 - CO NO. 189/MUM/2013 DBS BANK LTD. 4 96 AND CONDONE THE SAID DELAY AND ADMIT THE CO FOR HEARING AND ADJUDICATION. 3.1 AT THE OUTSET, THE LEARNED D.R. FOR REVENUE RAISED THE OBJECTION THAT SINCE REVENUES APPEAL IN ITA NO. 434/MUM/ 2011 HAD BEEN DISMISSED BY A COORDINATE BENCH VIDE ORDER DATED 15.02.2016 THE ASSESSEES CO IS NOT MAINTAINABLE AS IT DID NOT SURVIVE AND SHOULD BE DISMISSED AS INFRUCTUOUS. 3.2 THE LEARNED SENIOR COUNSEL FOR THE ASSESSEE, REFERRING TO THE PROVISIONS OF SE CTION 253(4) OF THE ACT SUBMITTED THAT A CO IS AN APPEAL AND EVEN WHERE APPEAL OF THE OTHER PARTY IS WITHDRAWN OR DISMISSED, CO NEVERTHELESS SURVIVE S AND SHOULD BE ADJUDICATED UPON, AS PROVIDED FOR UNDER THE ACT AND RULES, SINCE IT HAS AN IDENTITY OF ITS O WN AND STANDS SEPARATE AND DISTINCT FROM THE APPEAL. IN SUPPORT OF THIS PROPORTION, THE LEARNED A.R. FOR THE ASSESSEE PLACED RELIANCE, INTER ALIA, ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: - I) SUPERINTENDENT ENGINEER VS. B. SUBBA REDDY AIR (1999) SCW 1479 II) ACIT VS. KRIPA CHEMICALS (P) LTD. (2002) 82 ITD 449 (PUNE) III) CIT VS. P URBANCHAL PARIBAHAN GOSTHI (1998) 234 ITR 663 (GAUHATI) IV) INCOME TAX OFFICER VS. FAGOOMAL LAKSHMI CHAND (1979) 118 ITR 766 (MAD.) 3.3.1 WE HAVE HEARD BOTH PARTIES AND PERUSED A ND CAREFULLY CONSIDERED THE JUDICIAL PRONOUNCEMENTS REFERRED TO (SUPRA). SECTION 253(4) OF THE ACT DEALS WITH THE FILING OF COS. RULE 22 OF THE IT(AT) RULES, 1963 ALSO LAYS DOWN THE PROCEDURE TO BE ADOPTED FOR TREATMENT OF COS. THE PROVISIONS OF SECTION 25 3(4) AND RULE 22 ARE EXTRACTED HEREUNDER: - SECTION 253(4) - THE ASSESSING OFFICER OR THE ASSESSEE, AS THE CASE MAY BE, ON RECEIPT OF NOTICE THAT AN APPEAL AGAINST THE ORDER OF THE DEPUTY COMMISSIONER (APPEALS) OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS) OR THE ASSESSING OFFICER IN PURSUANCE OF THE DIRECTIONS OF THE DISPUTE RESOLUTION PANEL HAS BEEN PREFERRED UNDER SUB - SECTION (1) OR SUB - SECTION (2) OR SUB - SECTION (2A) BY THE OTHER PARTY, MAY, NOTWITHSTANDING THAT HE MAY NOT HAVE APPEALED AGAINST SUCH ORDER OR ANY PART THEREOF; WITHIN THIRTY DAYS OF THE RECEIP T OF THE NOTICE, FILE A MEMORANDUM OF CROSS - OBJECTIONS, VERIFIED IN THE PRESCRIBED MANNER, AGAINST ANY PART OF THE ORDER OF THE ASSESSING OFFICER (IN PURSUANCE OF THE DIRECTIONS OF THE DISPUTE RESOLUTION PANEL) OR DEPUTY COMMISSIONER (APPEALS) OR, AS THE C ASE MAY BE, THE COMMISSIONER (APPEALS), AND SUCH MEMORANDUM SHALL BE DISPOSED OF CO NO. 189/MUM/2013 DBS BANK LTD. 5 BY THE APPELLATE TRIBUNAL AS IF IT WERE AN APPEAL PRESENTED WITHIN THE TIME SPECIFIED IN SUB - SECTION (3) OR SUB - SECTION (3A). RULE 22 - A MEMORANDUM OF CROSS - OBJECTIONS FILE D UNDER SUB - SECTION (4) OF SECTION 253 SHALL BE REGISTERED AND NUMBERED AS AN APPEAL AND ALL THE RULES, SO FAR AS MAY BE, SHALL APPLY TO SUCH APPEAL. 3.3.2 ON A PERUSAL OF THE PROVISIONS OF LAW AND THE CITED DECISION WE FIND THAT IN THE CASE OF KRIPA CHEM ICALS (P) LTD. (2002) 82 ITD 449 (PUNE) THE PUNE BENCH OF THE ITAT HAS OBSERVED THAT THE HON'BLE APEX COURT IN THE CASE OF B. SUBBA REDDY AIR 1999SCW 1479 HAD HELD THAT EVEN WHERE AN APPEAL IS WITHDRAWN OR IS DISMISSED FOR DEFAULT, THE CO WAS TO BE ADMITTE D AND ADJUDICATED. IT IS ALSO SEEN THAT THE HON'BLE GAUHATI HIGH COURT IN THE CASE OF CIT VS. PURBANCHAL PARIBAHAN GOSTHI (SUPRA) ON THE ISSUE OF COS REFERRING TO SECTION 253 OF THE ACT R.W. RULE 22 OF THE IT(AT) RULES, 1963 HAS HELD THAT IT CAN BE SAFELY HELD THAT THERE IS ABSOLUTELY NO DIFFERENCE BETWEEN AN APPEAL AND A CO, SAVE THAT AN APPEAL CAN BE PREFERRED WITHIN 60 DAYS OF RECEIPT OF THE ORDER WHEREAS A CO CAN BE FILED WITHIN A PERIOD OF 30 DAYS OF THE DATE OF SERVICE OF APPEAL BY THE OPPOSITE PARTY . RESPECTFULLY, FOLLOWING THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF SUPERINTENDENT ENGINEER VS. B. SUBBA REDDY (SUPRA) AND THE DECISION OF THE PUNE BENCH OF THE ITAT IN THE CASE OF KRIPA CHEMICALS (P) LTD. (SUPRA), WE HOLD THAT IN THE CASE ON H AND EVEN THOUGH REVENUES APPEAL IN ITA NO. 434/MUM/2011 FOR A.Y. 1995 - 06 WAS DISMISSED ON ACCOUNT OF LOW TAX EFFECT (I.E. TAX BEING BELOW ` 10 LAKHS), THE ASSESSEES CO IS TO BE ADMITTED AND ADJUDICATED. IN THIS VIEW OF THE MATTER, WE REJECT THE PRELIMINARY OBJECTION OF THE LEARNED D.R. FOR REVENUE IN RESPECT OF THE MAINTAINABILITY OF THE ASSESSEES CO FOR A.Y. 1995 - 96. 4.1 IN THE CO THE ASSE SSEE HAS RAISED THE FOLLOWING GROUNDS OF OBJECTIONS: - 1) THE COMMISSIONER OF INCOME - TAX (APPEALS) - 10 (HEREIN AFTER REFERRED TO AS CIT(A)) OUGHT TO HAVE HELD THAT THE EXPENSES INCURRED (INCLUDING DEPRECIATION PER SECTION 32) OF RS. 10,990,878 BE ALLOWED AS DEDUCTION, AS THE APPELLANT BEING A NON - RESIDENT BANK IS ALREADY ENGAGED IN BANKING BUSINESS AND OPENING OF FIRST BRANCH IN INDIA IS MERELY AN EXTENSION OF BANKING BUSINESS. 2) THE CIT(A) OUGHT TO HAVE ADJUDICATED ON THE DATE OF SET UP OF THE APPELLANTS ' BANKING BUSINESS IN INDIA. 3) THE CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE ASSESSING OFFICER HAD NOT FOLLOWED THE DIRECTIONS OF THE TRIBUNAL VIDE ORDER CO NO. 189/MUM/2013 DBS BANK LTD. 6 DATED 18 APRIL 2007, THEREBY NOT DETERMINING THE DATE OF SET UP OF THE BANKING BUSINESS IN I NDIA. 4) THE CIT(A) OUGHT TO HAVE HELD THAT THE EXPENDITURE INCURRED AFTER DATE OF SET UP OF THE APPELLANTS BANKING BUSINESS SHOULD BE ALLOWED AS A DEDUCTION, WHILE COMPUTING THE TOTAL TAXABLE INCOME. THE APPELLANTS PRAY THAT THE CIT(A) BE DIRECTED SUITABLY IN THE MATTER. 5) THE CIT(A) OUGHT TO HAVE HELD THAT THE BUSINESS OF BANKING IN INDIA WAS SET UP ON 8 NOVEMBER 1994, BEING THE DATE OF BANKING LICENCE OBTAINED FROM RESERVE BANK OF INDIA. 6) WITHOUT PREJUDICE TO THE ABOVE, THE CIT(A) OUGHT TO HAVE DIRECTED THE AO TO ALLOW DEDUCTION FOR DEPRECIATION ON FIXED ASSETS WHILE COMPUTING THE TOTAL TAXABLE INCOME. 4.2 AT THE OUTSET, THE LEARNED A.R. FOR THE ASSESSEE, IN SUPPORT OF THE GROUNDS RAISED (SUPRA), SUBMITTED THAT THE IMPUGNED ORDERS OF THE AU THORITIES BELOW WERE IN GROSS VIOLATION OF THE DIRECTIONS OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE IN ITA NO. 5272 TO 5274/MUM/2001 DATED 18.04.2007 WHICH HELD THAT THE ASSESSEE IS ENTITLED TO BE ALLOWED AS A DEDUCTION , THE EXPEN SES INCURRED AFTER THE DARE OF SETTING UP OF BANKING BUSINESS IN INDIA WHILE COMPUTING THE ASSESSEES TOTAL TAXABLE INCOME. THE ASSESSEE CLAIMED THAT 08.11.1994 WAS THE DATE OF SETTING UP OF BUSINESS. IT IS CONTENDED THAT EVEN THOUGH THE COORDINATE BENCH A T PARA 6 OF ITS ORDER (SUPRA) DREW UP THE DISTINCTION BETWEEN SETTING UP OF BUSINESS AND COMMENCEMENT OF BUSINESS, AND DIRECTED THE AO TO EXAMINE THE MATTER AND ALLOW EXPENDITURE INCURRED AFTER THE DATE OF SETTING UP OF THE BUSINESS, THE AO AND THE LEARNED CIT(A), WITHOUT EXAMINING THE MATTER, HELD THAT EXPENSES AFTER THE DATE OF COMMENCEMENT, I.E. 15.03.1995, ONLY WERE ALLOWABLE ; WHICH IS IN VIOLATION OF THE DIRECTIONS OF THE TRIBUNALS ORDER. IT IS PRAYED THAT THE ORDERS OF THE AUTHORITIES BELOW BE SUITAB LY MODIFIED. 4.3 PER CONTRA, THE LEARNED D.R. SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4.4.1 WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. THE GROUNDS RAISED IN THE ASSESSEES CO RELATE TO THE ASSESSEE NOT BEING ALLOWED DEDUCTION OF CO NO. 189/MUM/2013 DBS BANK LTD. 7 EXPENDITURE INCURRED AFTER SETTING UP OF THE BUSINESS, WHICH THE ASSESSEE CLAIMS IS 08.11.1994, BEING THE DATE OF THE LETTER BY WHICH RBI GRANTED IT A LICENCE TO CARRY ON BANKING BUSINESS IN INDIA. THE AUTHORITIES BELOW, HOWEVER, IT IS SEEN HAVE HELD THAT THE ASSESSEE WOULD BE ENTITLED DEDUCTION OF EXPENDITURE INCURRED AFTER THE DATE OF COMMENCEMENT OF BUSINESS, I.E. 15.03.1995. 4.4.2 IN THIS REGARD, THE COORDINATE BENCH OF THIS TRIBUNAL IN ITS ORDER IN IT NOS. 5272 TO 5274/MUM/2001 DATED 18.04.2007 IN THE ASSESSEES CASE FOR A.Y. 1995 - 96 AT PARA 6 THEREOF HAD RESTORED THE MATTER TO THE FILE OF THE AO WITH A DIRECTION TO ALLOW THE ASSESSEE EXPENDITURE INCURRED AFTER THE DATE OF SETTING UP OF BUSINESS AND NOT THE DATE OF COMMENCEMENT OF BUSINESS, AFTER EXAMINING THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER AFFORDING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD. THE RELEVANT PORTION OF THE ORDER OF THE COORDINATE BENCH AT PARA 6 THEREOF IS EXTRACTED HER EUNDER: - 6. ON A CAREFUL CONSIDERATION WE ARE OF THE VIEW THAT WHILE THERE IS A LOT OF THEORETICAL DISCUSSION IN THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS IN THE SUBMISSIONS OF THE ASSESSEE BEFORE THEM AND BEFORE US ALSO, THERE IS LITTLE EXAMINATION OF THE FACTS OF THE CASE. THERE IS NO DOUBT THAT A DISTINCTION IS REQUIRED TO BE DRAWN BETWEEN SETTING UP OF A BUSINESS AND COMMENCEMENT OF BUSINESS. WHEN A BUSINESS IS READY TO PERFORM ITS TASK IT CAN BE SAID TO BE SET UP. THERE MAY BE AN INTERREGNUM OR INTERVAL BETWEEN THE SETTING UP OF THE BUSINESS AND THE COMMENCEMENT OF THE BUSINESS [REFER WESTERN INDIA VEGETABLE PRODUCTS LTD VS CIT 26 ITR 151 (BOM); CWT VS RARNARAJU SURGICAL COTTON MILLS LTD. 63 ITR 478 (SC)]. WE THEREFORE DO NOT SEE ANY SUBSTANCE IN THE CONTENTION OF THE ASSESSING OFFICER THAT THE ASSESSEE'S BUSINESS COULD BE SAID TO HAVE BEEN COMMENCED ONLY AFTER IT WAS NOTIFIED AS A SCHEDULED BANK. THE LEARNED ASSESSING OFFICER ERRED IN NOT DISCUSSING THE ISSUE WITH THE ASSESSEE AND DRAWING HIS CON CLUSIONS WITHOUT ALLOWING THE ASSESSEE AN OPPORTUNITY TO MAKE ITS SUBMISSIONS. HOWEVER, THE FACT REMAINS THAT DURING THE COURSE OF HEARING BEFORE THE LEARNED CIT(A) AS WELL AS BEFORE US NO MATERIAL IN PARTICULAR HAS BEEN RELIED UPON BY THE ASSESSEE SO AS T O ESTABLISH THE DATE OF SETTING UP OF BUSINESS BY THE ASSESSEE IN INDIA. THE ASSESSEE HAS RELIED UPON ONLY TWO BARE FACTS AS VIZ, DATE OF GRANT OF LICENCE TO DO BANKING BUSINESS I.E. 08 - 11 - 1994; SECONDLY THE DATE OF ACQUISITION OF BUILDING PREMISES THAT IS SET TO BE ON 18 - 07 - 1994. WE ARE THEREFORE OF THE VIEW THAT THE ASSESSEE IS REQUIRED TO BRING ESSENTIAL FACTS ON RECORD SO THAT THE DATE ON WHICH THE BUSINESS WAS SET UP CAN BE DETERMINED. THEREAFTER THE PROVISIONS OF SECTION 37(1) WOULD COME INTO OPERATIO N. WE THEREFORE RESTORE THIS ISSUE TO THE FILE OF THE LEARNED CO NO. 189/MUM/2013 DBS BANK LTD. 8 ASSESS I NG OFFICER FOR DECISION AFRESH IN ACCORDANCE WITH LAW IN THE LIGHT OF OUR ORDER AFTER ALLOWING THE ASSESSEE REASONABLE OPPORTUNITY OF BEING HEARD IN THE MATTER. 4.4.2 ON A PERUSAL OF THE OPERATIVE PORTION OF THE ORDER OF THE COORDINATE BENCH (SUPRA), WE FIND , THAT AS CONTENDED BY THE LEARNED SR. COUNSEL FOR THE ASSESSEE, THE AUTHORITIES BELOW HAVE NOT ADHERED TO THE DIRECTIONS OF THE TRIBUNAL TO ALLOW THE ASSESSEE DEDUCTION OF EXPENDITURE INCURRED AFTER THE DATE OF SETTING UP OF BUSINESS AS OPPOSED TO DATE OF COMMENCEMENT OF BUSINESS, I.E. 15.03.1995. WE SET ASIDE THE IMPUGNED ORDERS OF THE LEARNED CIT(A) DATED 09.10.2010 AND THE AO DATED 08.12.2008 ON THIS ISSUE AND RESTORE THE MATTER TO T HE FILE OF THE AO FOR DE NOVO EXAMINATION AND ADJUDICATION FOR ALLOWING THE ASSESSEE DEDUCTION OF EXPENDITURE INCURRED AFTER THE DATE OF SETTING UP OF BUSINESS , AFTER AFFORDING THE ASSESSEE ADEQUATE OPPORTUNITY TO BRING ON RECORD ALL ESSENTIAL FACTS SO THAT THE DATE OF SETTING UP OF BUSINESS AND EXPENSES INCURRED CAN BE DETERMINED. IT IS ACCORDINGLY ORDERED. CONSEQUENTLY, THE ASSESSEES GROUNDS OF COS ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 5 . IN THE RESULT, THE ASSESSEES CROSS OBJECTIONS FOR A.Y. 1995 - 96 ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JUNE , 2016. SD/ - SD/ - ( SAKTIJIT DAY ) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 15 TH JUNE , 2016 COPY TO: 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE CIT(A) - 10 , MUMBAI 4 . THE D IT (INTERNATIONAL TAXATION) , MUMBAI 5 . THE DR, L BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.