CREDIT LYONNAIS (THROUGH THEIR SUCCESSORS: CALYON BANK), MUMBAI V. DDITIT)-1(2), MUMBAI

CO 205/MUM/2009

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8971 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s) 4 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Next Hearing Date: 24-09-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 26-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH; AJEET KUMAR JAIN
• Keywords: Business income; Depreciation; Transfer pricing; Double taxation relief; Maximum Marginal Rate; International transaction; Earning of tax free income; Permanent establishment; Corroborative evidences
• Section: 244A; 14A; 27; 6; 12; 28; 10; 92

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES K , MUMBAI BEFORE SHRI RAJENDRA SINGH , AM AND SHRI VIJAY PAL RAO , JM ITA NO. 1935/ MUM/ 20 0 7 ( ASSESSMENT YEAR : 200 2 - 200 3 ) M/S CREDIT LYONNAIS (THROUGH THEIR SUCCESSORS CALYONG BANK), HOECHST HOUSE, 11 TH FLOOR, NARIMAN POINT, MUMBAI - 400 021 . VS. ADIT(INTERNATIONAL TAXATION), RG. - 1, MUMBAI - 40 0 038 PAN/GIR NO. : AAA C C 1441 J ( APPELLANT ) .. ( RESPONDENT ) AND ITA NO. 2032 /MUM/200 7 ( ASSESSMENT YEAR : 200 2 - 200 3 ) D DIT (INTERNATIONAL TAXATION), RG. - 1 (2) , MUMBA I - 400 038 VS. M/S CREDIT LYONNAIS (THROUGH THEIR SUCCESSORS CALYONG BANK), HOECHST HOUSE, 11 TH FLOOR, NARIMAN POINT, MUMBAI - 400 021. PAN/GIR NO. : AAA CC 1441 J ( APPELLANT ) .. ( RESPONDENT ) AND ITA NO. 2401 /MUM/200 9 ( ASSESSMENT YEAR : 200 3 - 200 4 ) CREDIT LYONNAIS (THROUGH THEIR SUCCESSORS CALYONG BANK), HOECHST HOUSE, 11 TH FLOOR, NARIMAN POINT, MUMBAI - 400 021. VS. J DIT (OSD) (INTERNATIONAL TAXATION), RG. - 1, MUMBAI - 400 038 PAN/GIR NO. : AAA CC 1441 J ( APPELLANT ) .. ( RESPONDENT ) 2 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 AND ITA NO. 2 384 /MUM/200 9 ( ASSESSMENT YEAR : 200 3 - 200 4 ) DDIT (INTERNATIONAL TAXATION), RG. - 1(2), MUMBAI - 4 00 038 VS. M/S CREDIT LYONNAIS (THROUGH THEIR SUCCESSORS CALYONG BANK), HOECHST HOUSE, 11 TH FLOOR, NARIMAN POINT, MUMBAI - 400 021. PAN/GIR NO. : AAA CC 1441 J ( APPELLANT ) .. ( RESPONDENT ) AND C.O.NO. 205/MUM/2009 ( ITA NO.2384/MUM/2009 ) ( ASSESSMENT YEAR : 200 3 - 200 4 ) M/S CREDIT LYONNAIS (THROUGH THEIR SUCCESSORS CALYONG BANK), HOECHST HOUSE, 11 TH FLOOR, NARIMAN POINT, MUMBAI - 400 021. VS. DDIT (INTERNATIONAL TAXAT ION), RG. - 1(2), MUMBAI - 400 038 . PAN/GIR NO. : AAA CC 1441 J ( ) .. ( RESPONDENT ) /A SSESSEE BY : MR. MADHUR AGARWAL /RE VENUE BY : MR. AJEE T KUMAR JAIN & MR. NARENDRA SINGH DATE OF HEARING : 2 4 TH SEPT.201 3 DATE OF PRONOUNCEMENT : 30 TH SEPT.201 3 O R D E R PER VIJAY PAL RAO J M : THIS COMMON ORDER SHALL GOVERN THE DISPOSAL OF TWO SETS OF CROSS APPEALS AND THE CROSS OBJECTION BY THE ASSESSEE , WHICH HAVE BEEN DIRECTED AGAINST THE RESPECTIVE ORDERS OF LEARNED CIT(A) DATED 15 - 11 - 2006 & 30 - 1 - 2006 FOR THE ASSESSMENT YEARS 2002 - 03 & 2003 - 04. 3 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 2 . SINCE COMMON ISSUES ARE INVOLVED IN ALL THE CA SES, THEREFORE, FOR THE SAKE OF CONVENIENCE, ALL THE CASES HAVE BEEN HEARD TOGETHER AND DISPOSED OF BY THIS CONSOLIDATED ORDER. 3 . IN ITA NO. 1935 /MUM/200 7 , T HE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : - (1) THE COMMISSIONER OF INCOME - TAX (APPEALS) - XXXI , MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)], ERRED IN CONFIRMING THE ACTION OF THE ADDITIONAL DIRECTOR OF INCOME - TAX, (INTERNATIONAL TAXATION), RANGE 1, MUMBAI (HEREINAFTER REFERRED TO AS THE AO) IN CHARGING THE BUSINESS INCOME @ 48% BEING THE RATE AP PLICABLE TO FOREIGN COMPANIES FOR THE YEAR UNDER APPEAL. THE APPELLANTS SUBMIT THAT THEIR BUSINESS INCOME IS CHARGEABLE TO TAX AT THE RATE OF 35.70% AS APPLICABLE TO DOMESTIC COMPANIES. THE APPELLANTS PRAY THAT THE AO BE DIRECTED ACCORDINGLY. (2) THE C IT(A) ERRED IN CONFIRMING THE ACTION OF THE AO IN BRINGING TO TAX THE INTEREST OF RS.6,L 6,73,3 56 RECEIVED ON NOSTRO ACCOUNT AND OVERSEAS PLACEMENTS WITH BRANCHES OUTSIDE INDIA. THE APPELLANTS SUBMIT THAT THE AMOUNT IS NOT TAXABLE BEING RECEIVED FROM SEL F AS THE INDIAN BRANCHES AND BRANCHES OUTSIDE INDIA ARE PART OF THE SAME ORGANISATION AND THERE CAN ARISE NO PROFITS AS A RESULT OF ANY TRANSACTION BETWEEN THE TWO. THE APPELLANTS PRAY THAT THE AO BE DIRECTED ACCORDINGLY. (3) THE CIT(A) ERRED IN CONFIRMI NG THE ACTION OF THE AO IN NOT ALLOWING A DEDUCTION FOR RS.42,43,574 BEING INTEREST PAID TO HEAD OFFICE/OVERSEAS BRANCHES, CONSISTENT WITH THE DEPARTMENTS STAND OF TAXING THE INTEREST RECEIVED ON NOSTRO/OVERSEAS PLACEMENTS. (4) WITHOUT PREJUDICE, IN THE E VENT THE HIGHER AUTHORITIES REVERSE THE DECISION OF THE CIT(APPEALS) IN THE EARLIER YEARS OF ALLOWING LOSS ON VALUATION OF SECURITIES, THE AO BE DIRECTED TO RECOMPUTE THE PROFIT OR LOSS ON SECURITIES SOLD DURING THE YEAR UNDER APPEAL BY TAKING INTO ACCOUNT THE DEPRECIATION ON SECURITIES DISALLOWED IN THE EARLIER YEARS. (5) THE CJT(A) ERRED IN UPHOLDING THE ACTION OF THE AO IN LEVYING INTEREST OF RS.L,06,26,738 UNDER SECTION 234D OF THE ACT. (6) THE CIT(A) CITED IN UPHOLDING THE ACTION OF THE AO IN INVOKIN G THE PROVISIONS OF SECTION 92CA OF THE ACT WITHOUT APPRECIATING THAT THE TRANSFER PRICING PROVISIONS CANNOT BE APPLIED FOR TRANSACTIONS BETWEEN HEAD OFFICE AND PERMANENT ESTABLISHMENT AS THEY ARE ONE AND THE SAME PERSONS AND NOT SEPARATE INDEPENDENT ENTER PRISES 4 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 (7) THE CIT(A) ERRED IN UPHOLDING THE ACTION OF THE AO IN MAKING ADDITIONS OF RS. 73,47,660 MERELY ON THE BASIS OF TPOS REPORT. (8) THE CIT(A) ERRED IN UPHOLDING THE ACTION OF THE AO IN NOT APPRECIATING THAT IN VIEW OF THE PROVISIONS OF ARTICLE 7 (3) OF THE DTAA BETWEEN INDIA AND FRANCE, NO ACCOUNT IS TO BE TAKEN OF ANY FEE OR COMMISSION FOR SPECIFIC SERVICES PERFORMED IN DETERMINING PROFITS OF A PE AND IN VIEW OF THIS THE ADJUSTMENT RECOMMENDED BY THE TPO COULD NOT BE MADE. (9) THE CIT(A) ERRED I N HOLDING THAT THE TPO/AO WAS JUSTIFIED IN MAKING AN ADDITION OF 20% OF THE INTEREST AND FEE WITH REFERENCE TO FOREIGN CURRENCY LOANS GRANTED BY THE OVERSEAS BRANCHES. THE ASSESSEE HAS ALSO RAISED ADDITIONAL GROUND WHICH IS AS UNDER : - 1. THE COMMISSIONER OF INCOME - TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS. 1,51,154/ - ON ACCOUNT OF INTEREST RECEIVED BY THE ASSESSEE ON CALL PLACEMENTS WITH HEAD OFFICE/OVERSEAS BRANCHES. 3 . T HE GROUND NO.1 IN APPEAL OF THE ASSESSEE IS REGARDING RATE OF TAX APPLI CAB LE TO THE ASSESSEE, BEING FOREIGN COMPANY. 3.1 WE HAVE HEARD LEARNED AR OF THE ASSESSEE AS WELL AS LEARNED DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED AND DECIDED BY THIS TRIBUN AL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2001 - 02 VIDE ORDER DATED 22 - 5 - 2013 IN ITA NO. 9596/M/2004 IN PARA 2 AS UNDER : - 2. FIRST GROUND OF THE ASSESSEES APPEAL IS AGAINST THE DIRECTION OF THE LEARNED CIT(A) TO CHARGE BUSINESS INCOME TO TAX AT TH E RATE OF 48%, BEING THE RATE APPLICABLE TO FOREIGN COMPANIES FOR THE YEAR UNDER APPEAL. AT THE OUTSET, IT WAS ADMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT SIMILAR ISSUE HAS BEEN CONSISTENTLY DECIDED BY THE TRIBUNAL AGAINST THE ASSESSEE IN EARLIER YEARS. RESPECTFULLY FOLLOWING THE ORDERS SO PASSED BY THE TRIBUNAL, WE DISMISS THIS GROUND OF APPEAL. 5 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 AS IT IS CLEAR FROM THE ABOVE ORDER OF THE TRIBUNAL THAT THIS ISSUE HAS BEEN CONSISTENTLY DECIDED BY THIS TRIBUNAL AGAINST THE ASSESSEE IN THE EARLIE R Y EARS I .E. FOR ASSES SMENT YEARS 1998 - 99 & 2000 - 2001, H ENCE, RESPECTFULLY FOLLOWING THE EARLIER YEARS ORDER OF THE TRIBUNAL, THIS GROUND OF THE ASSESSEES APPEAL IS DISMISSED. 4. GROUNDS NO. 2 & 3 ARE IN REGARD TO BRINGING TO TAX INTEREST RECEIVED ON N OSTRO ACCOUNT AND OVERSEAS PLACEMENTS MAINTAINED WITH BRANCHES OUTSIDE INDIA AND DISALLOWANCE OF INTEREST PAID TO HEAD OFFICE/OVERSEAS BRANCHES. 4.1 THE ASSESSEE CLAIMED THAT THE INTEREST OF RS. 6.16 CRORE RECEIVED ON NOSTRO ACCOUNT AND OVERSEAS PLACEMEN TS MAINTAINED WITH THE BRANCHES OUTSIDE INDIA IS NOT TAXABLE BEING INCOME TO SELF. THE AO BROUGHT THE SAID INTEREST TO TAX AND ALSO DISALLOWED THE DEDUCTION BEING INTEREST PAID TO THE HEAD OFFICE/OVERSEAS BRANCHES. THE ACTION OF THE AO HAS BEEN CONFIRMED B Y THE CIT(A) . 4.2 BEFORE US, LEARNED AR OF THE ASSESSEE HAS STATED THAT THE ASSESSEE DOES NOT PRESS GROUND NO. 2 REGARDING THE INTEREST OF RS. 6.16,73,356/ - RECEIVED ON NOSTRO ACCOUNT AND OVERSEAS PLACEMENTS MAINTAINED WITH BRANCHES OUTSIDE INDIA. HE HAS PO INTED OUT THAT A SIMILAR ISSUE CAME BEFORE THE TRIBUNAL FOR THE ASSESSMENT YEAR 2001 - 02, WHEREIN AN IDENTICAL GROUND HAS BEEN DISMISSED AS THE ASSESSEE ACCEPTED THE TAXABILITY OF THE INTEREST INCOME FROM HEAD OFFICE/OVERSEAS 6 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 BRANCHES. AS REGARDS, THE DISA LLOWANCE OF INTERESTED PAID TO THE HEAD OFFICE/OVERSEAS BRANCHES, LEARNED AR HAS SUBMITTED THAT WHEN THE ASSESSEE HAS ACCEPTED THE TAXABILITY OF THE INTEREST RECEIVED THEN THE INTEREST PAID TO THE HEAD OFFICE/OVERSEAS BRANCHES IS ALLOWABLE DEDUCTION AS HEL D BY THE TRIBUNAL FOR THE ASSESSMENT YEAR 2001 - 02. 4.3 LEARNED DR HAS NOT RAISED ANY OBJECTION AGAINST THE GROUND NO. 2 AS NOT PRESSED BY THE ASSESSEE. 4.4 HAVING CONSIDERED THE RIVAL SUBMISSIONS AND CAREFUL PERUSAL OF THE RELEVANT RECORD, AT THE OUTSET, WE NOTE THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2001 - 02 IN PARA 4 AS UNDER : - 4. HAVING HEARD THE RIVAL SUBMISSIONS ON THIS POINT AND PERUSED THE RELEVANT MATERIAL ON RECORD, IT IS NOTIC ED THAT ALBEIT IN THE EARLIER YEARS THE GROUND OF CHARGEABILITY OF INTEREST INCOME WAS DECIDED IN FAVOUR OF THE ASSESSEE, BUT IN THE CURRENT YEAR THE ASSESSEE CHOSE NOT TO PRESS THIS GROUND BECAUSE OF AN ADDITIONAL GROUND WHICH WAS INITIALLY SOUGHT TO B E RAISED BY THE REVENUE FOR THE CONSEQUENTIAL DISALLOWANCE U/S 14A OF INCOME - TAX ACT, 1961 (HEREINAFTER ALSO CALLED AS `THE ACT) BUT SUBSEQUENTLY ABANDONED BECAUSE OF THE ASSESSEE NOT PRESSING OF THIS GROUND. IN VIEW OF THE FACT THAT THE LEARNED AR HAS AC CEPTED THE TAXABILITY OF THIS AMOUNT OF INTEREST EARNED FROM HEAD OFFICE / OVERSEAS BRANCHES, GROUND NO. 2 IS DISMISSED. THE NATURAL COROLLARY WHICH, THEREFORE, FOLLOWS IS THAT THE INTEREST PAID TO HO / OVERSEAS BRANCHES IS DEDUCTIBLE. GROUND NO. 3 IS ALLO WED. WHEN THE ASSESSEE HAS ACCEPTED THE TAXABILITY AS INTEREST RECEIVED ON NOSTRO ACCOUNT AND OVERSEAS PLACEMENTS, THEN AS DECIDED BY THIS TRIBUNAL IN ASSESSEES OWN CASE, THE NATURAL CONSEQUENTIAL EFFECT WOULD BE THE CLAIM OF ASSESSEE REGARDING INTERE ST PAID TO THE HEAD OFFICE/OVERSEAS BRANCHES, IS ALLOWABLE DEDUCTION. ACCORDINGLY, GROUND NO.2 IS DISMISSED AS NOT PRESSED AND GROUND NO. 3 IS ALLOWED. 7 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 5 . GROUND NO.4 IS IN REGARD TO DISALLOWANCE OF LOSS ON VALUATION OF SECURITIES. 5.1 THE AUTHORITIES BEL OW DISALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND OF HYPOTHETICAL LOSS AND BASED ON CONJECTURES. LEARNED AR, HOWEVER, SUBMITTED THAT SINCE THE CLAIM OF LOSS ON VALUATION WAS ALLOWED IN FULL IN THE EARLIER YEAR I.E. FOR THE ASSESSMENT YEAR 1998 - 99 , THER EFORE, THE CLAIM FOR THE ASSESSMENT YEAR HAS BECOME INFRUCTUOUS. HE HAS FURTHER SUBMITTED THAT THIS ISSUE HAS NOT ATTAINED THE FINALITY AS IT IS PENDING BEFORE THE HON BLE HIGH COURT, THEREFORE, A SUITABLE DIRECTION MAY BE GIVEN TO THE ASSESSING OFFICER. L EARNED DR HAS NOT DISPUTED THE FACT THAT IN THE EARLIER YEAR, THE CLAIM OF THE ASSESSEE WAS ALLOWED IN FULL BY THIS TRIBUNAL . WE FURTHER NOTE THAT FOR THE ASSESSMENT YEAR 2001 - 02, THE TRIBUNAL HAS CONSIDERED AN IDENTICAL ISSUE IN PARA 7 AS UNDER : - 7 . GRO UND NO.2 IS AGAINST THE CLAIM FOR LOSS OF 10,52,194 ON ACCOUNT OF VALUATION OF INVESTMENTS. THE ASSESSEE WROTE BACK PROVISION FOR REVALUATION OF INVESTMENT AMOUNTING TO 10.52 LAKH IN ITS ACCOUNT FOR THE CURRENT YEAR. THE ASSESSING OFFICER CHARGED SUCH AMO UNT TO TAX AGAINST THE ASSESSEES CONTENTION OF NON - TAXABILITY. THE LEARNED CIT(A) NOTICED IN PARA 8.2 OF THE IMPUGNED ORDER THAT IN THE EARLIER YEARS, THE LOSS ARISING ON REVALUATION OF INVESTMENT WAS HELD TO BE AN ALLOWABLE DEDUCTION AND AS SUCH : THE A BOVE CLAIM OF THE APPELLANT THAT THE A.O. OUGHT TO HAVE EXCLUDED THE WRITE BACK DOES NOT SURVIVE FOR CONSIDERATION. FROM THE ABOVE EXTRACTED PART OF THE IMPUGNED ORDER, IT IS DISCERNIBLE THAT THE LEARNED CIT(A) HAS DECIDED THIS ISSUE AGAINST THE ASSESSEE AND RESULTANTLY THERE WAS NO OCCASION FOR THE REVENUE TO CHALLENGE THE SAME. BE THAT AS IT MAY, IT IS SIMPLE AND PLAIN THAT WHEN DEDUCTION HAS BEEN ALLOWED ON ACCOUNT OF LOSS ARISING ON REVALUATION OF INVESTMENTS IN EARLIER YEARS, THE SUBSEQUENT WRITE BACK OF THE SAME AMOUNT CANNOT ESCAPE TAXATION. WE, THEREFORE, HOLD THAT THE AMOUNT IS CHARGEABLE TO TAX. HOWEVER, THE A.O. IS DIRECTED TO ENSURE THAT THE SAME AMOUNT IS NOT TAXED TWICE IN THE ASSESSMENT FOR THE CURRENT YE AR. 8 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 IN VIEW OF THE FACT THAT THE LOSS ON VALUATION OF SECURITIES WAS HELD TO BE ALLOWABLE IN THE EARLIER YEARS, THEREFORE, THE SUBSEQUENT WRITE BACK OF THE AMOUNT CANNOT BE ALLOWED AND IS CHARGEABLE TO TAX. HENCE, WE DIRECT THE AO TO ENSURE THAT THE SAME AMOUNT IS NOT TAX TWICE. 6. GROUND NO . 5 REGARDING LEVY OF INTEREST UNDER SECTION 234D. 6.1 WE HAVE HEARD LEARNED AR AS WELL AS LEARNED DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THIS ISSUE IS NOW COVERED BY THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. INDIAN OIL CORPORATION LIMITED, REPORTED IN 254 CTR 113 . SINCE THE ASSESSMENT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION HAS BEEN COMPLETED AFTER 1 - 6 - 2003, THEREFORE, IN VIEW OF THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF INDIAN O IL CORPORATION LIMITED (SUPRA), THE PROVISIONS OF SECTION 234D ARE APPLICABLE FOR LEVY OF INTEREST. ACCORDINGLY, THIS GROUND OF THE ASSESSEE IS DISMISSED. 7. GROUND NO. 6 REGARDING INVOKING THE PROVISIONS OF TRANSFER PRICING UNDER SECTION 92CA OF THE ACT. 7.1 AT THE TIME OF HEARING, LEARNED COUNSEL OF THE ASSESSEE HAS STATED THAT THE ASSESSEE DOES NOT WANT TO PRESS THIS GROUND AND THE SAME MAY BE DISMISSED AS NOT PRESSED. 9 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 7.2 LEARNED DR HAS NO OBJECTION IF THE GROUND NO. 6 IS DISMISSED AS NOT PRESSED. 7 .3 ACCORDINGLY, WE DISMISS THE GROUND NO. 6, BEING NOT PRESSED. 8. GROUNDS NO. 7 TO 9 REGARDING TRANSFER PRICING ADJUSTMENT ON ACCOUNT OF FEE OR COMMISSION FOR THE SERVICES PERFORMED TOWARDS FOREIGN CURRENCY LOANS GRANTED BY THE OVERSEAS BRANCHES. 8.1 THE ASSESSEE HAS FACILITATED FOREIGN CURRENCY LOAN TO ITS CLIENTS FROM HEAD OFFICE/OVERSEAS BRANCHES OUTSIDE INDIA BUT DID NOT SHOW ANY INCOME ON THE SAID TRANSACTION. THE TPO ASKED THE ASSESSEE TO SHOW AS TO WHETHER ANY SERVICE WITH REGARD TO STRUCTURED FINA NCE AND SYNDICATE BUSINESS LIKE FOREIGN CURRENCY DEBT SYNDICATION ETC. ARE RENDERED TO ANY CUSTOMERS OR TO THE OTHER BRANCHES OF THE BANK. THE ASSESSEE SUBMITTED BEFORE THE TPO THAT IN MOST OF THE CASES, IT IS THE SYNDICATION DESK IN HONG KONG (HK) THAT IS INVOLVED . IN MOST OF THE CASES, THEY ARE CONTACTED DIRECTLY BY THE COMPETITOR BANKS, HOWEVER, IN A FEW CASES , INDIA N B R ANCH IDENTIFIES THE TARGET AND GETS THE MANDATE PRIMARILY BECAUSE SOME OF THE PROSPECTIVE BORROWERS ARE THE ASSESSEES EXISTING CUSTOME RS IN INDIA. ALL NEGOTIATIONS, DISCUSSIONS WITH POTENTIAL CLIENTS ARE DONE BY THE SYNDICATION DESKS IN HK AND, THEREFORE, THE ASSESSEE HAS NO ROLE IN THE DECISION TO GRANT LOAN. THE LIMITED RO L E OF THE ASSESSEE IS TO PROVIDE ANALYSIS OF BORROWER, GEN ERAL MARKET CONDITIONS IN INDIA AND REGULATORY ENVIRONMENT. THE PROPOSAL IS 10 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 REVIEWED/AMENDED BY THE CREDIT TEAM IN HK OR PARIS, AS THE CASE MAY BE, BEFORE IT WAS PUT TO THE RELEVANT COMMITTEE IN HK OR PARIS. IN CASE OF THE EXISTING CLIENTS OF THE ASSESSEE, THE ANALYSIS IS ALREADY AVAILABLE WITH THE ASSESSEE BANK FOR LOCAL FACILITIES, WHICH IS FORWARDED TO THE SYNDICATE DESK TEAM. ALL OTHER ACTIVITIES AND FACILITIES LIKE LOAN DOCUMENT, LEGAL OPINION, SIGNATURE, EXECUTION OF LOAN DOCUMENT ARE DONE BY THE SYNDICATI ON DESK AND LEGAL TEAM IN HK AND THE ASSESSEE HAD NO ROLE IN SUCH ACTIVITIES. THE AGENT FEE, COMMITMENT FEE AND ARRANGEMENT FEES ARE GIVEN TO THE RESPECTIVE PARTIES. THE ASSESSEE HAD NEVER BEEN AGENT TO ANY ISSUE. SIMILARLY, THE COMMITMENT FEES IS IN RESPE CT OF THE COMMITMENT OF CL HONGKONG/SINGAPORE TO FUND THE LOAN. THE ARRANGEMENT FEE S ARE RECEIVED BY THE LEAD ARRANGERS OR CO - LEAD ARRANGERS . THUS, THE ASSESSEE HAD PERFORMED NO ROLE OR SERVICES IN RESPECT OF THE ACTIVITY AGAINST WHICH THE FEE WAS PAYABLE. 8.2 THE TPO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND COMPUTED THE ARMS LENGTH CHARGES BEING 25% OF THE TOTAL AMOUNT COMPRISING INTEREST AND FEE RECEIVED BY THE OFFSHORE BRANCHES OF THE BANK AND MADE AN ADJUSTMENT OF RS. 70,99,563/ - . 8.3 ON APPEA L, THE CIT(A) HAS OBSERVED THAT THE TPO HAS MADE THE ADJUSTMENT ON THE BASIS OF ESTIMATION WITHOUT ANY SUPPORTING EVIDENCE. ACCORDINGLY, THE CIT(A) REDUCED THE ADJUSTMENT FROM 25% TO 20% OF THE INTEREST AND FEE AMOUNT. 11 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 8.4 BEFORE US, LEARNED AR OF THE ASS ESSEE HAS SUBMITTED THAT THE FOREIGN EXCHANGE LOAN (ECB) HAS BEEN GIVEN BY THE HEADQUARTER/FOREIGN BRANCHES. HE HAS EXPLAINED THAT WHEN THE REQUIREMENT OF LOAN IS HUGE, THEN THE LOAN IS PROVIDED BY A SYNDICATE COMPRISING VARIOUS BRANCHES AND BRANCHES OUTSI DE INDIA AND IN THIS CASE, THE SYNDICATION DESK AT HK. THE SERVICES OF THE ASSESSEE WAS LIMITED ONLY TO PROVIDE ANALYSIS OF BORROWER, GENERAL MARKET CONDITIONS IN INDIA AND REGULATORY ENVIRONMENT FOR WHICH THE ASSESSEE HAS NOT RECEIVED ANY SERVICE CHARGES, COMMISSION OR FEE. THE FIRST LINE OF THE CONTENTION OF THE LEARNED AR IS AS PER THE INDO - FRANCE DTA A AND PROTOCOL, NO PROFIT CAN BE ATTRIBUTED TO A PE BY REASON OF FACILITATION OF CONCLUSION OF FOREIGN TRADE OR LOAN AGREEMENTS OR THE MERE SIGNING THEREOF. HE HAS REFERRED PARA 4 OF THE PROTOCOL BETWEEN FRANCE AND INDIA AND SUBMITTED THAT NO PROFIT CAN BE ALLOCATED UNDER ARTICLE 7(2) OF DTAA TO THE PE ON ACCOUNT OF FACILITATION OF THE LOAN AGREEMENT. LEARNED AR HAS CITED THE DICTIONARY MEANING OF THE WORD F ACILITATION AND SUBMITTED THAT THE TERM USED IN THE PROTOCOL BEING FACILITATION MEANS TO RENDER EASIER THE PERFORMANCE. THUS, THE ROLE OF THE ASSESSEE TO PROVIDE CERTAIN INFORMATION IS ONLY TO FACILITATE THE LOAN AGREEMENT AND, THEREFORE, AS PER THE P ARA 4 OF THE PROTOCOL, NO PROFIT CAN BE ATTRIBUTED TO THE ASSESSEE ON ACCOUNT OF SUCH LIMITED SERVICES. 12 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 8.5 THE ALTERNATIVE CONTENTION OF THE LEARNED AR IS THAT THE ADJUSTMENT OF 20% IN RESPECT OF INTEREST AND OTHER FEES RECEIVED BY THE FOREIGN BRANCHES IS HIGHLY ARBITRARY BECAUSE THE INTEREST CANNOT BE ATTRIBUTED TO THE ASSESSEE WHEN THE LOAN IS PROVIDED BY THE FOREIGN BRANCH AND, THEREFORE, EVEN IF A PROFIT IS ATTRIBUTED TO THE ASSESSEE, THE SAME IS LIMITED ONLY WITH RESPECT TO FEES OR SERVICE CHARGES R ECEIVED BY FOREIGN BRANCHES AND THAT TOO IN A REASONABLE PROPORTION, TO SAY 10%. THE ANOTHER ALTERNATIVE SUBMISSION OF L EARNED AR IS THAT 20% OF THE TOTAL INTEREST AND OTHER FEES RECEIVED BY THE FOREIGN BRANCHES IS UNREASONABLE AND VERY HIGH, WHICH SHOULD NOT BE MORE THAN 2 TO 5 OF THE TOTAL INCOME RECEIVED BY THE FOREIGN BRANCHES. THUS, LEARNED AR HAS SUBMITTED THAT IF SOME PART OF THE INCOME IS ATTRIBUTABLE TO THE ASSESSEE, THEN IT IS ONLY WITH RESPECT TO THE FEE AND SERVICES AND THAT TOO SHOULD NOT BE MO RE THAN 10%. LEARNED AR HAS FURTHER POINTED OUT THAT THE LOAN FACILITATED DURING THE YEAR WAS TO ITS EXISTING CLIENTS AND, THEREFORE, THERE IS NO NEW PARTY FOR WHICH THE ASSESSEE WOULD HAVE PROVIDED ANY SPECIFIC SERVICES. THE INFORMATION PROVIDED BY THE AS SESSEE WAS ALREADY WITH THE ASSESSEE FOR THE PURPOSE OF LOCAL FINANCIAL FACILITIES PROVIDED BY THE ASSESSEE TO THE CLIENTS. HE HAS REFERRED THE DETAILS AT PAGE 91 OF THE PAPER BOOK AND SUBMITTED THAT DURING THE YEAR UNDER CONSIDERATION THE FOREIGN CURRENCY LOAN WAS GIVEN TO RELIANCE PETROLEUM LIMITED AND RELIANCE INDUSTRIES LIMITED AND BOTH THESE PARTIES ARE EXISTING CLIENTS OF THE ASSESSEE. LEARNED AR 13 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 HAS SUBMITTED THAT THE TRANSACTIONS WERE COMPLETED OUTSIDE INDIA AS ALL DOCUMENTS WERE SIGNED OUTSIDE INDI A . T HEREFORE, WHEN THE ASSESSEE HAS NOT PROVIDED ANY SERVICE AS AN AGENT, ARRANGERS OR COMMITMENT, THEN THE FEE RECEIVED BY THE FOREIGN BRANCHES ON THIS ACCOUNT IS NOT ATTRIBUTABLE TO THE ASSESSEE. THE ASSESSEE HAS NO ROLE IN DISBURSEMENT OR RECOVERY OF TH E LOAN GIVEN BY THE FOREIGN BRANCHES. 8.6 PER CONTRA , LEARNED DR HAS SUBMITTED THAT AS PER PARA 4 OF THE PROTOCOL, THE ACTIVITY OF THE FACILITATION OF LOAN AGREEMENT OR MERE SIGNING THEREOF IS EXCLUDED FOR ATTRIBUTION OF THE PROFIT TO THE PE BUT NOT THE A CTIVITY OF FACILITATION OF LOAN ITSELF. HE HAS SUBMITTED THAT THE ROLE OF THE ASSESSEE IS TO FACILITATE THE LOAN TRANSACTION BY PROVIDING THE FINANCIAL ANALYSIS OF THE BORROWERS, GENERAL MARKET CONDITION AND REGULATORY ENVIRONMENT IN INDIA. IT IS NOT IN TH E NATURE OF FACILITATING THE LOAN AGREEMENT OR SIGNING OF LOAN AGREEMENT, BUT THESE ACTIVITIES ARE DIRECTLY RELATED TO THE LOAN TRANSACTION ITSELF. THUS, THE LEARNED DR HAS SUBMITTED THAT PARA 4 OF THE PROTOCOL IS NOT APPLICABLE IN THE CASE OF THE ASSESSEE . HE HAS RELIED UPON THE ORDER OF THE TPO AND SUBMITTED THAT THE TPO HAS RIGHTLY TAKEN 25% OF THE TOTAL INCOME ATTRIBUTABLE TO THE ASSESSEE. 8.7 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE ASSESSEE BEING INDIAN BRA NCH HAS HEL PE D THE FOREIGN CURRENCY LOAN SYNDICATION IN RESPECT OF TWO LOANS TO RELIANCE PETROLEUM LIMITED AND RELIANCE INDUSTRIES LIMITED TO THE TUNE OF US $ 14 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 50 MILLION AND USD$ 11 MILLION , RESPECTIVELY. THERE IS NO DISPUTE THAT FOR THESE TWO LOANS, CREDIT AGRICOLE INDOSUEZ (ASIA), SYNGAPORE WORKED AS AN AGENT AND CREDIT LYONNAIS WORKED AS LEAD ARRANGERS/CO - ARRANGERS. THE ANZ INVESTMENT BANK, BA ASIA LTD. AS WELL AS ABN AMRO BANK WERE ALSO WORKED AS CO - ARRANGERS. THE ROLE OF THE ASSESSEE IN THESE TRANSACTIO NS OF FOREIGN CURRENCY LOAN UNDER ECB WAS TO PROVIDE FINANCIAL ANALYSIS OF THE BORROWERS, GENERAL MARKET CONDITIONS AND REGULATORY ENVIRONMENT. THE LEARNED AR HAS VEHEMENTLY ARGUED THAT AS PER PARA 4 OF PROTOCOL, PROFIT CANNOT BE ATTRIBUTED TO THE PE ON AC COUNT OF FACILITATION OF CONCLUSION OF LOAN AGREEMENT OR MERE SINGING THEREOF. WE DO NOT AGREE WITH THE CONTENTION OF THE LEARNED AR OF THE ASSESSEE BECAUSE OF THE FACT THAT THE ROLE OF THE ASSESSEE IS NOT MERELY FACILITATION OF CONCLUSION OF LOAN AGREEMEN T OR SIGNING THEREOF BUT THE SERVICES PROVIDED BY THE ASSESSEE ARE THE CO RE - BASIS FOR TAKING THE DECISION OF GRANTING THE LOAN BY THE SYNDICATE. THE ASSESSEE PROVIDED THE SERVICES REGARDING CLIENTS CREDITABILITY ANALYSIS, ITS CAPACITY SO AS TO CONSIDER THE CAPACITY TO REPAY THE LOAN AND RISK INVOLVED IN THE LOAN TRANSACTION. THEREFORE, THE ROLE OF THE ASSESSEE IN PROVIDING SUCH A CRUCIAL SERVICE IS INEVITABLE FOR TAKING THE DECISION OF PROVIDING LOAN AND AS SUCH CANNOT BE SAID TO BE A MERE FACILITATION OF C ONCLUSION OF THE LOAN AGREEMENT OR SIGNING THEREOF. AT THIS STAGE, PARA 4 OF THE PROTOCOL BETWEEN THE INDIA AND FRANCE IS QUOTED FOR READY REFERENCE AS UNDER : - 15 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 4. NO PROFITS SHALL BE ATTRIBUTED TO A PERMANENT ESTABLISHMENT BY REASON OF THE MERE PURCHASE BY THAT PERMANENT ESTABLISHMENT OF GOODS OR MERCHANDISE FOR THE ENTERPRISE. THE PLAIN READING OF PARA 4, MENTIONED ABOVE, MAKES IT CLEAR THAT IF THE ROLE OF THE PE IS ONLY TO FACILITATE THE CONCLUSION OF FOREIGN TRADE OR LOAN AGREEMENT OR MERE SIGNING TH EREOF, THEN NO PROFIT SHALL BE ATTRIBUTED TO PE IN TERMS OF ARTICLE 7(2) OF THE INDO FRANCE DTAA. AS WE HAVE DISCUSSED ABOVE THAT THE ASSESSEES ROLE IN PROVIDING THE SERVICES IS THE CO RE - BASIS OF TAKING THE DECISION OF GRANTING LOAN, THEREFORE, THE NATURE OF SERVICES PROVIDED BY THE ASSESSEE DO NOT FALL UNDER THE TERMS FACILITATION OF CONCLUSION OF LOAN AGREEMENT OR SIGNING THEREOF AS STIPULATED UNDER PARA 4 OF THE PROTOCOL. 8.8 HAVING HELD THAT PARA 4 OF THE PROTOCOL DOES NOT APPLY TO THE CASE OF THE ASS ESSEE, NOW, THE QUESTION ARISES AS TO WHETHER THE ADJUSTMENT MADE BY THE AUTHORITIES BELOW IS JUSTIFIED. FOR MAKING THE ADJUSTMENT, THE AUTHORITIES BELOW HAVE TAKEN INTO CONSIDERATION, THE INCOME TOWARDS INTEREST AS WELL AS THE FEE CHARGED BY THE FOREIGN B RANCH FROM THE CLIENTS. IT IS PERTINENT TO NOTE THAT WHEN THE LOAN IS PROVIDED BY THE SYNDICATE AND THE ASSESSEE HAS NOT CONTRIBUTED TO THE LOAN AMOUNT THEN AS REGARDS THE INCOME OF INTEREST, THE SAME CANNOT BE ATTRIBUTED TO THE ASSESSEE FOR PROVIDING THE SERVICES OF THE FINANCIAL ANALYSIS OF THE BORROWERS, MARKET CONDITION AND REGULATORY ENVIRONMENT IN INDIA. SINCE THE ASSESSEE HAS PROVIDED CERTAIN SERVICES FOR THAT ARMS LENGTH CHARGES CAN BE DETERMINED AS PER THE PROVISIONS OF TRANSFER 16 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 PRICING REGULATION. THE TPO AS WELL AS CIT(A) HAS NOT BROUGHT OUT ANY COMPARABLE FOR DETERMINATION OF THE ARMS LENGTH PRICE BUT TOOK THE TOTAL INCOME COMPRISING INTEREST AS WELL AS OTHER FEES CHARGED BY THE FOREIGN BRANCHES FOR ALLOCATION/ATTRIBUTION TO THE ASSESSEE. IN THIS CASE , THE ALP HAS NOT BEEN DETERMINED BY TAKING INTO CONSIDERATION U NCONTROLLED SIMILAR TRANSACTION . I N OUR VIEW, THE INTEREST CANNOT BE TAKEN INTO ACCOUNT FOR ATTRIBUTION OF INCOME TOWARDS SERVICE CHARGES/FEES AND, THEREFORE, IN THE FACTS AN D CIRCUMSTANCES OF THE CASE ONLY THE FEE CHARGED BY THE FOREIGN BRANCHES CAN BE TAKEN INTO CONSIDERATION FOR MA KING ADJUSTMENT UNDER TRANSFER PRICING PROVISIONS. ACCORDINGLY, WE DIRECT THE AO/TPO TO MAKE ADJUSTMENT IN RESPECT OF THE SERVICES PERFORMED BY T HE ASSESSEE FOR FOREIGN CURRENCY LOAN ARRANGED FOR ITS EXISTING CLIENTS BY TAKING INTO ACCOUNT ONLY THE FEE AND OTHER CHARGES RECEIVED BY THE FOREIGN BRANCHES FROM THE BORROWERS IN QUESTION. SINCE NONE OF THE PARTIES HAVE COME OUT WITH THE SUITABLE COMPAR ABLES, THEREFORE, WE FIND THAT THE ESTIMATION MADE BY THE CIT(A) AT THE RATE OF 20% IS JUST AND PROPER , H OWEVER, THE SAME WOULD BE ONLY IN RESPECT OF THE FEE AND CHARGES OTHER THAN INTEREST RECEIVED BY THE FOREIGN BRANCHES. THUS, THESE GROUNDS OF THE ASSES SEE ARE PARTLY ALLOWED. 9 . IN THE ADDITIONAL GROUND , THE ASSESSEE HAS RAISED OBJECTION IN REGARD TO THE ADDITION ON ACCOUNT OF INTEREST RECEIVED ON CALL PLACEMENTS WITH HEAD OFFICE/OVERSEAS BRANCHES. 17 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 9.1 THIS IS NOT A FRESH PLEA OR GROUND RAISED BY THE ASSESSEE BUT IT ARISES FROM THE ORDERS OF THE AUTHORITIES BELOW, THEREFORE, WE ADMIT THE SAME FOR ADJUDICATION. 9.2 THE LIMITED GRIEVANCE OF THE ASSESSEE WITH RESPECT TO THE ADDITION MADE ON ACCOUNT OF INTEREST RECEIVED IS THAT THE AO APPLIED LIBOR FOR TH E PURPOSE OF DETERMINING THE ARMS LENGTH PRICE WHEREAS THE ACTUAL RATE OF INTEREST SHOULD HAVE BEEN APPLIED. LEARNED AR HAS CONTENDED THAT THE LABOR IS AN AVERAGE RATE AND NOT THE ACTUAL RATE PREVAILING IN THE MARKET AT THE RELEVANT TIME. ALTERNATIVELY, HE SUBMITTED THAT THE SOME ADJUSTMENT MAY BE MADE IN THE RATE ADOPTED BY THE AUTHORITIES BELOW. 9.3 ON THE OTHER HAND, LEARNED DR HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 9.4 HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD, WE NOTE THAT THE TPO HAS APPLIED LIBOR RATE AND ALSO CONSIDERED THE ARITHMETIC MEAN FOR DETERMINATION OF THE ARMS LENGTH RATE OF INTEREST. WE FURTHER NOTE THAT THE AUTHORITIES BELOW HAVE ALREADY GIVEN THE BENEFIT OF +/ - 5% AND EXCLUDED THE TRANS ACTIONS WHICH FALL WITHIN THE TOLERANCE RANGE, THEREFORE, THE LIBOR APPLIED BY THE TPO IS JUSTIFIED AND CANNOT BE INTERFERED WITH. ACCORDINGLY, WE DISMISS THE ADDITIONAL GROUND RAISED BY THE ASSESSEE. 18 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 9 . NOW, WE WILL TAKE U P THE APPEAL OF THE DEPARTMENT FOR THE ASSESSMENT YEAR 2002 - 0 3 I.E. ITA NO. 2032 /M /2007 , WHEREIN THE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) ERRED IN DELETING THE DISALLOWANCE OF RS.3,87,04,558/ - MADE BY THE ASSESSING OFFICER AS EXPENDITURE ATTRIBUTABLE TO TAX EXEMPT INCOME. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) ERRED IN ALLOWING THE CLAIM OF RS.1 ,32,36,010I - ON ACCOUNT OF LOSS ON REVALUATION OF UNMATURED FOR EX CONTRACTS AS DEDUCTION. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) ERRED IN HOLDING THAT THE DEDUCTION OF RS.2,97,50,4531 - FOR THE COMMISSION FOR TWELVE MONTHS RELATED TO ASSESSMENT YEAR 2002 - 03 AND IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE SAME ACCORDINGLY. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) ERRED IN DELETING THE ADDITION OF RS.14,19,912/ - OUT OF ADDITION OF RS.70,99,5631 - MADE ON ACCOUNT OF ARMS LENGTH PRICE ON T HE INTERNATIONAL TRANSACTION RELATING TO LENDING OF SERVICES WITH REGARD TO THE ECB LOANS DISBURSED TO THE INDIAN CUSTOMERS. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) ERRED IN RESTRICTING THE ADDITION MADE ON ACCOUNT OF DIFFERENCE IN THE RATE OF INTEREST CHARGED BY THE ASSESSEE ON FUNDS PLACED WITH HEAD OFFICE AND OVERSEAS BRANCHES TO RS.1, 51,154/ - AS AGAINST RS.2,48,097/ - MADE BY THE ASSESSING OFFICER. 10. GROUND NO.1 IN THE APPEAL OF THE DEPARTMENT IS IN REGARD TO DELETING THE DISALLOWANCE ON ACCOUNT OF EXPENDITURE ATTRIBUTABLE TO TAX EXEMPT INCOME. 10.1 WE HAVE HEARD LEARNED DR AS WELL AS LEARNED AR OF THE ASSESSEE AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT THIS ISSUE HAS BEEN CON SIDERED AND DECIDED BY THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1999 - 2000 IN PARA AS UNDER : - 19 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 20. FIRST GROUND OF THE REVENUES APPEAL IS AGAINST THE DELETION OF DISALLOWANCE OF EXPENSES IN RELATION TO INCOME U/S 10(33) AND 10(15)(IV)( H). IT IS OBSERVED THAT THE ASSESSING OFFICER MADE DISALLOWANCE OF INTEREST IN THIS YEAR UNLIKE THE DISALLOWANCE OF OTHER EXPENSES ALSO IN THE PRECEDING YEAR. THE LEARNED CIT(A) ON APPRECIATION OF THE FACTUAL POSITION, INDICATED BY THE ASSESSEE, OBSERVED T HAT THE ASSESSEE HAD SUFFICIENT INTEREST FREE FUNDS AVAILABLE WITH ITS DISPOSAL FOR MAKING INVESTMENT IN SUCH TAX FREE SECURITIES/SHARES FROM WHICH DIVIDEND INCOME WAS EARNED. THE LEARNED DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT THE FACTUAL POSITIO N RECORDED BY THE LEARNED CIT(A) IN THIS REGARD. AS THE ASSESSEE HAS MADE INVESTMENT IN SUCH SECURITIES/SHARES FROM WHICH EXEMPT INCOME WAS EARNED, OUT OF ITS OWN INTEREST FREE FUNDS, THERE CAN BE NO DISALLOWANCE UNDER SECTION 14A IN THAT CASE. THIS IS IN ACCORDANCE WITH THE VIEW TAKEN UP BY US FOR ASSESSMENT YEAR 1998 - 99 ABOVE. SINCE THE AO DID NOT MAKE ANY DISALLOWANCE ON ACCOUNT OF OTHER EXPENSES IN RELATION TO EXEMPT INCOME, THERE CANNOT BE ANY QUESTION OF SUSTAINING ANY SUCH DISALLOWANCE WHEN THE AO HI MSELF HAS NOT MADE IT. THIS GROUND IS, THEREFORE, NOT ALLOWED. THERE IS NO CHANGE IN FACTS AND CIRCUMSTANCES OF THE CASE FOR THE YEAR UNDER CONSIDERATION . THUS, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE, WE DISMISS THIS GRO UND OF THE REVENUES APPEAL. 1 1. GROUND NO. 2 IS IN REGARD TO LOSS ON REVALUATION OF UNMATURED FOREX CONTRACTS AS DEDUCTION. 11.1 WE HAVE HEARD LEARNED DR AS WELL AS LEARNED AR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. WE NOTE THAT AN IDENTICAL ISSU E HAS BEEN CONSIDERED AND DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1998 - 99 TO 2001 - 02. IN VIEW OF OUR FINDINGS GIVEN IN PARA 5.1 OF THE ASSESSEE APPEAL I.E. IN ITA NO. 1935/M/2007, THIS ISSUE STANDS DECIDED. 1 2 . GROUND NO. 3 I S IN REGARD TO DEDUCTION FOR COMMISSION . 20 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 1 2 .1 WE HAVE HEARD LEARNED DR AS WELL AS LEARNED AR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT FOR THE ASSESSMENT YEAR 2001 - 02, THE TRIBUNAL ALLOWED THE ENTIRE EXPENDITURE IN THIS RE SPECT. THEREFORE, IT CANNOT BE ALLOWED FOR THE YEAR UNDER CONSIDERATION. ACCORDINGLY, THIS GROUND OF THE REVENUE IS ALLOWED. 1 3. GROUND NO.4 IS IN REGARD TO PART RELIEF GRANTED BY THE CIT(A) ON ACCOUNT OF ARMS LENGTH PRICE ON ECB LOANS TO INDIAN CLIENTS. 13 .1 WE HAVE HEARD LEARNED DR AS WELL AS LEARNED AR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. IN VIEW OF OUR FINDINGS GIVEN IN THE ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2002 - 03 WHILING DECIDING GROUNDS NO. 7 TO 9, THIS GROUND OF THE REVENUE IS H EREBY DISMISSED. 1 4. GROUND NO.5 IS IN REGARD TO INTEREST CHARGED BY THE ASSESSEE ON FUNDS PLACED WITH HEAD OFFICE AND OVERSEAS BRANCHES. 14 .1 WE HAVE HEARD LEARNED DR AS WELL AS LEARNED AR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THIS GROUND IS C OMMON TO THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IN ITS APPEAL I.E. ITA NO. 1935/M/2007, DECIDED ABOVE. THE CIT(A) HAS GIVEN THE PART RELIEF TO THE ASSESSEE BY TAKING INTO CONSIDERATION THE ACTUAL INTEREST TO BE 21 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 ADDED AFTER GIVING CREDIT OF +/ - 5% MARG IN PROFIT UNDER SECTION 92 IN PARA 15.6 AS UNDER : - 15.6 THE APPELLANT WAS ASKED AND HAS FURNISHED CHART TO SHOW THE AMOUNT OF INTEREST LIKELY TO BE ADDED AFTER TAKING CREDIT 5% MARGIN PROVIDED BY SEC.92C. THE CHART IS UNDER : INTEREST IN INR CALLPLACE MENTS, C.L.PARIS RS.58,185. CALLPLACEMENTS, C.L.NEWYORK RS.14,049. CALLPLACEMENTS, C.L. SINGAPORE RS.49,090 . CALLPLACEMENTS, C.L. HONGKONG RS.29,830 . IT IS THEREFORE, HELD THAT THE ADDITION REQUIRED TO BE MADE IS OF RS. 1,51,154/ - AS AGAINST MADE BY T HE AO OF RS. 2,48,097/ - . ACCORDINGLY ADDITION OF RS. 1,51,154/ - IS CONFIRMED AND THE BALANCE IS DELETED. APPEAL ON THIS GROUND IS PARTLY ALLOWED. SINCE THE CORRECTED AMOUNT HAS BEEN COMPUTED AND ACCEPTED BY THE CIT(A), WHICH HAS NOT BEEN CONTROVERTED BY TH E REVENUE, THEREFORE, WE DO NOT FIND ANY SUBSTANCE IN THE GROUND RAISED BY THE DEPARTMENT. ACCORDINGLY, THE SAME IS DISMISSED. 15 . NOW, WE WILL TAKE UP APPEAL OF THE ASSESSEE FILED FOR THE ASSESSMENT YEAR 2003 - 04 I.E. ITA NO. 2401/M/ 2009 , WHEREIN THE ASS ESSEE HAS RAISED THE FOLLOWING GROUNDS : - (1) THE COMMISSIONER OF INCOME - TAX (APPEALS) - XXXI, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)J, ERRED IN CONFIRMING THE ACTION OF THE JOINT DIRECTOR OF INCOME - TAX, (OSD) (INTERNATIONAL TAXATION), RANGE 1, MUMBA I (HEREINAFTER REFERRED TO AS THE AO) IN CHARGING THE BUSINESS INCOME @ 42% BEING THE RATE APPLICABLE TO FOREIGN COMPANIES FOR THE YEAR UNDER APPEAL. THE APPELLANTS SUBMIT THAT THEIR BUSINESS INCOME IS CHARGEABLE TO TAX AT THE RATE OF 36.75% AS APPLICABLE TO DOMESTIC COMPANIES OR 22 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 31.5% BEING THE MAXIMUM MARGINAL RATE APPLICABLE TO A CO - OPERATIVE BANK. THE APPELLANTS PRAY THAT THE AO BE DIRECTED ACCORDINGLY. (2) THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE AO IN BRINGING TO TAX THE INTEREST OF RS.1,46 ,69,611 RECEIVED ON NOSTRO ACCOUNT AND OVERSEAS PLACEMENTS WITH THE APPELLANTS BRANCHES OUTSIDE INDIA. THE APPELLANTS SUBMIT THAT THE AMOUNT IS NOT TAXABLE AS IT REPRESENTS TRANSACTION BETWEEN THE INDIAN BRANCHES AND BRANCHES OUTSIDE INDIA THAT ARE PART OF THE SAME LEGAL ENTITY AND THERE CAN ARISE NO PROFITS AS A RESULT OF ANY SUCH TRANSACTION. THE APPELLANTS PRAY THAT THE AO BE DIRECTED ACCORDINGLY. (3)(A) THE CIT(A) ERRED IN APPLYING THE PROVISIONS OF SECTION 14A READ WITH RULE 8D IN COMPUTING THE AMO UNT OF EXPENDITURE INCURRED IN RELATION TO THE EARNING OF EXEMPT INCOME AND THEREBY DISALLOWING RS. 4,40,03,243 AS AGAINST RS. 3,85,11,754 DISALLOWED BY THE AO. (B) THE CIT(A) OUGHT TO HAVE APPRECIATED THAT THE PROVISIONS OF RULE 8D WHICH WERE INTRODUCED W .E.F. 24TH MARCH, 2008 WERE NOT APPLICABLE TO THE SUBJECT YEAR. (C) THE CIT(A) OUGHT TO HAVE HELD THAT AS THE INVESTMENTS WERE MADE IN THE EARLIER YEARS, WHERE IT HAS BEEN HELD THAT NO EXPENDITURE WAS INCURRED IN RELATION TO EXEMPT INCOME AS THE INVESTMEN T WERE OUT OF OWN FUNDS, NO INTEREST / ADMINISTRATIVE EXPENDITURE COULD HAVE BEEN HELD TO BE INCURRED DURING THE YEAR UNDER APPEAL IN RELATION TO SUCH EXEMPT INCOME. (D) THE CIT(A) OUGHT TO HAVE APPRECIATED THAT THE DISALLOWANCE AS COMPUTED UNDER RULE 8D CANNOT EXCEED THE DISALLOWANCE MADE BY THE AO. (4) THE CIT(A) ERRED IN HOLDING THAT THE CLAIM FOR DEDUCTION OF RS 2,97,50,453 BEING DEFERRED EXPENSES ON MOBILIZATION OF DEPOSITS UNDER INDIAN MILLENNIUM DEPOSIT SCHEME SHOULD BE ALLOWED IF IT WAS MADE DURIN G THE ASSESSMENT PROCEEDINGS. HE OUGHT TO HAVE ALLOWED THE CLAIM HAVING REGARD TO THE FINDING GIVEN BY THE CIT(A) WHILE FRAMING THE ASSESSMENT FOR THE ASSESSMENT YEAR 200 1 - 02 AND 2002 - 03. (5) THE CIT(A) OUGHT TO HAVE HELD THAT, IN THE EVENT THE HIGHER AU THORITIES REVERSE THE DECISION OF THE CIT(APPEALS) IN THE EARLIER YEARS OF ALLOWING LOSS ON VALUATION OF SECURITIES, THE AO BE DIRECTED TO RECOMPUTE THE PROFIT OR LOSS ON SECURITIES SOLD DURING THE YEAR UNDER APPEAL BY TAKING INTO ACCOUNT THE DEPRECIATION ON SECURITIES DISALLOWED IN THE EARLIER YEARS. 23 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 (6) THE CIT(A) ERRED IN UPHOLDING THE ACTION OF THE AO IN INVOKING THE PROVISIONS OF SECTION 92CA OF THE ACT WITHOUT APPRECIATING THAT THE TRANSFER PRICING PROVISIONS CANNOT BE APPLIED FOR TRANSACTIONS BETWEE N HEAD OFFICE AND PERMANENT ESTABLISHMENT AS THEY ARE ONE AND THE SAME PERSON AND NOT SEPARATE INDEPENDENT ENTERPRISES. (7) THE CIT(A) ERRED IN UPHOLDING THE ACTION OF THE AO IN MAKING ADDITIONS MERELY ON THE BASIS OF TPOS REPORT. (8) THE CIT(A) OUGHT T O HAVE HELD THAT IN VIEW OF THE PROVISIONS OF ARTICLE 7(3) OF THE DTAA BETWEEN INDIA AND FRANCE, NO ACCOUNT IS TO BE TAKEN OF ANY FEE OR COMMISSION FOR SPECIFIC SERVICES PERFORMED IN DETERMINING THE PROFITS OF A PE AND HENCE THE ADJUSTMENT RECOMMENDED BY T HE TPO COULD NOT BE MADE. (9)(I)(A)THE CIT(A) ERRED IN CONFIRMING AN ADDITION OF 20% OF THE INTEREST AND FEE WITH REFERENCE TO EXTERNAL COMMERCIAL BORROWINGS (ECB) LOANS GRANTED BY THE OVERSEAS BRANCHES AS AGAINST 25% CONSIDERED BY THE TPO / AO. (B) THE CIT(A) OUGHT TO HAVE APPRECIATED THAT SUCH INTEREST AND FEE WAS RELATABLE TO LOANS GRANTED BY OVERSEAS BRANCHES AND HAD NO CONNECTION WITH SERVICES RENDERED BY INDIAN BRANCHES AND HENCE NO SUCH ADDITION WAS CALLED FOR. (C) THE CIT(A) OUGHT TO HAVE APPRECI ATED THAT IN RESPECT OF THE OLD LOANS, THE INDIAN BRANCH HAD NO ROLE TO PLAY AND HENCE ATTRIBUTING 20% OF INTEREST AND FEES AS A SHARE OF INDIAN BRANCHES FOR THEIR EFFORTS WAS NOT JUSTIFIED AND NO TP ADJUSTMENT COULD BE MADE. (D) THE CIT(A) OUGHT TO HAVE HELD THAT THE BORROWERS WERE EXISTING CUSTOMERS OF INDIAN BRANCHES AND ACTIVITY, IF ANY, IN CONNECTION WITH THE DISBURSAL OF THESE LOANS WAS ONLY OF PROVIDING CREDIT INFORMATION ALREADY AVAILABLE ON THE RECORDS OF INDIAN BRANCHES. (9)(II) WITHOUT PREJUDIC E TO OUR CONTENTION THAT NO ADDITION IS CALLED FOR TOWARDS SUCH INTEREST AND FEES, WE SUBMIT THAT RELIEF ALLOWED BY THE CIT(A) TOWARDS SUCH INTEREST AND FEES OUGHT TO HAVE BEEN DETERMINED AT RS. 9,90,834/ - AS AGAINST RS.8,88,266/ - . (10) THE CIT(A) ERRED IN CONFIRMING THE ADDITION ON ACCOUNT OF INTEREST PAID ON CALL BORROWINGS WITH ITS HEAD OFFICE/OVERSEAS BRANCHES TO RS. 2,964/ - 15 . GROUND NO. 1 IS REGARDING THE RATE OF TAX. 15.1 THIS GROUND IS COMMON TO THE GROUND NO. 1 OF THE ASSESSEES APPEAL DECIDED FOR THE ASSESSMENT YEAR 2002 - 03. IN VIEW OF OUR 24 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 FINDINGS GIVEN IN THE ASSESSEES APPEAL I.E ITA NO. 1935/M/2007, THIS GROUND OF THE ASSESSEE IS DISMISSED. 16. GROUND S NO. 2 & 3 ARE REGARDING BRIN GING TAX TO THE INTEREST INCOME AND DISALLOWANCE OF INTEREST UNDE R SECTION 14A. 16.1 BOTH THESE GROUNDS ARE COMMON TO THE GROUNDS RAISED BY THE ASSESSEE IN ITS APPEAL DECIDED FOR THE ASSESSMENT YEAR 2002 - 03, WHEREIN THE ASSESSEE HAS NOT PRESSED GROUND NO.2. SIMILARLY, THE ASSESSEE HAS ACCEPTED THE TAXABILITY OF INTERES T INCOME . THEREFORE, GROUND NO.2 IS HEREBY DISMISSED AS NOT PRESSED AND GROUND NO.3 IS ALLOWED . 17 . GROUND NO. 4 IS REGARDING DEDUCTION ON DEFERRED EXPENSES ON MOBILIZATION OF DEPOSITS UNDER INDIAN MILLENNIUM DEPOSIT SCHEME (IMDS) . 17.1 THIS GROUND IS C OMMON TO THE GROUND RAISED BY THE ASSESSEE IN ITS APPEAL FOR THE ASSESSMENT YEAR 2002 - 03. ACCORDINGLY, IN VIEW OF OUR FINDINGS GIVEN IN THE ASSESSEES OWN APPEAL FOR THE ASSESSMENT YEAR 2002 - 03 AND CONSIDERING THE FACT THAT IN THE EARLIER YEAR, THE TRIBUNA L HAS ALLOWED THE FULL CLAIM, THEREFORE, NO DEDUCTION CAN BE ALLOWED FOR THE YEAR UNDER CONSIDERATION. ACCORDINGLY, THIS GROUND IS DECIDED AGAINST THE ASSESSEE. 18. GROUND NO.5 IS REGARDING LOSS ON VALUATION OF SECURITIES. 25 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 18.1 SIMILAR GROUND HAS BEEN RAI SED AND DECIDED IN ASSESSEES OWN APPEAL FOR THE ASSESSMENT YEAR 2002 - 03. THEREFORE, THIS GROUND OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2003 - 04 HAS BECOME INFRUCTUOUS AND IT IS HEREBY DISMISSED. 19 . GROUND S NO. 6 TO 9 ARE REGARDING TRANSFER PRICING ADJUST MENT ON A CCOUNT OF FOREIGN EXCHANGE LOAN TO THE CLIENTS OF ASSESSEE. 19.1 THESE GROUNDS ARE SIMILAR TO THE GROUNDS NO.7 TO 9 RAISED BY THE ASSESSEE IN ITS OWN APPEAL FOR THE ASSESSMENT YEAR 2002 - 03, WHEREIN WE HAVE ALLOWED THE ABOVE GROUNDS PARTLY IN FAV OUR OF THE ASSESSEE. THEREFORE, IN VIEW OF OUR FINDINGS GIVEN IN THE AFORESAID APPEAL, THESE GROUNDS OF THE ASSESSEE ARE ALSO ALLOWED PARTLY. 20 . GROUND NO. 10 IS IN REGARD TO CONFIRMING THE ADDITION ON ACCOUNT OF INTEREST PAID ON CALL BORROWINGS WITH ITS HEAD OFFICE/OVERSEAS BRANCHES. 20.1 I N VIEW OF OUR FINDINGS GIVEN WHILE DECIDING THE ADDITIONAL GROUND IN APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2002 - 03, WE DISMISS TH IS GROUND OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. 21 . NOW, WE WILL T AKE UP APPEAL OF THE DEPARTMENT FILED FOR ASSE SS MENT YEAR 2003 - 04 I.E. ITA NO. 2384/M/2009 , WHEREIN THE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT INTE REST UNDER SECTION 234D OF THE INCOME TAX ACT, 1961 CANNOT BE LEVIED PRIOR TO 01.06.2003 AND IS LEVIABLE FROM ASSESSMENT YEAR 2004 - 05 ONLY 26 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 AS THE PROVISIONS OF THIS SECTION ARE SUBSTANTIVE AND HENCE DO NOT APPLY RETROSPECTIVELY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE INTEREST AMOUNTING TO RS. 73,63,170/ - CHARGED BY THE ASSESSING OFFICER UNDER SECTION 234D OF THE INCOME TAX ACT, 1961. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE LD.CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 22 . GROUNDS NO. 1 TO 3 ARE REGARDING INTEREST UNDER SECTION 234D . 22.1 THIS GROUND IS COMMON TO THE GROUND RAISED BY THE ASSESSEE IN APPEAL FOR THE ASSESSMENT YEAR 2002 - 03, WHEREBY WE HAVE DECIDED THE GROUND AGAINST THE ASSESSEE. THEREFORE, IN VIEW OF OUR FINDINGS GIVEN IN THE AFORESAID APPEAL, WE ALLOW THIS GROUND IN FAVOUR OF THE DEPARTMENT. 23 . NOW, WE WILL TAKE UP THE CROSS OBJECTION FILED BY THE ASSESSEE FOR THE ASSESSMENT Y EAR 2003 - 04 I.E. C.O.NO. 205/M/2009 , WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : - (1) THE RESPONDENTS SUBMIT THAT IN CASE THE DEPUTY DIRECTOR OF INCOME - TAX (INTERNATIONAL TAXATION) 1(2), MUMBAIS (HEREINAFTER REFERRED TO AS THE AO) ACTION OF LEV YING INTEREST UNDER SECTION 234D IS UPHELD, THEN THE AO BE DIRECTED TO RE - COMPUTE THE INTEREST UNDER SECTION 234D BASED ON OUTCOME OF THE APPEALS PREFERRED BY THE RESPONDENTS. (2) WITHOUT PREJUDICE AND IN ANY EVENT, THE AO BE DIRECTED TO COMPUTE INTEREST UNDER SECTION 234D ON THE EXCESS OF REFUND GRANTED VIDE INTIMATION UNDER SECTION 143(1) EXCLUSIVE OF INTEREST GRANTED UNDER SECTION 244A VIDE THAT INTIMATION. 2 3.1 THOUGH ON PRINCIPLE THE LEVY OF INTEREST UNDER SECTION 234D IS DECIDED AGAINST THE ASSESSE E AS THIS ISSUE IS COMMON IN THE 27 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 ASSESSEES OWN APPEAL FOR THE ASSESSMENT YEAR 2002 - 03 AND REVENUES APPEAL FOR THE ASSESSMENT YEAR 2003 - 04, HOWEVER, LEARNED AR OF THE ASSESSEE HAS SUBMITTED THAT THE AO HAS COMPUTED THE INTEREST UNDER SECTION 234D ON THE AMOUNT INCLUDING THE AMOUNT OF INTEREST UNDER SECTION 244A AND NOT ON THE OUTSTANDING TAX ONLY . 23.2 WE HAVE HEARD LEARNED AR AS WELL AS LEARNED DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. SINCE THIS ISSUE HAS BEEN RAISED FIRST TIME BY THE ASSESSEE AND INVOLVES VERIFICATION ON FACTS, THEREFORE, THE SAME IS REMITTED BACK TO THE RECORD OF THE AO TO CONSIDER THE OBJECTION OF THE ASSESSEE AND THEN DECIDE AS PER LAW. 24 . IN THE RESULT, APPEAL S OF ASSESSEE AND DEPARTMENT ARE PARTLY ALLOWED AND T HE CROSS OBJECTION OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED ON THIS 30 TH DAY OF SEPTEMBER , 201 3 . SD/ - SD/ - ( ) (RAJENDRA SINGH) ( ) (VIJAY PAL RAO) / ACCOUNTANT M EMBER / JUDICIAL MEMBER MUMBAI ; DATED : 30/09/ 2013 . /PKM , PS 28 ITA NO S . 1935,2032 / 07 & 2401 & 2384/2009 & C.O.NO.205/2009 COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) - X, MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER, (DY./ASSTT. REGISTRAR) / ITAT, MUMBAI