SWATI SALES & SERVICES P. LTD, MUMBAI V. DCIT 10(2), MUMBAI

CO 57/MUM/2009

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 6456 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 14 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 12-08-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 23-06-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 27-02-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G P TRIVEDI AW MR B JAYA KUMAR
• Keywords: Gift; Business expenditure; Opportunity of cross examination; Rule of consistency
• Section: 143(3); 133(6); 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI D.K. AGARWAL, JUDICIAL MEMBER AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO.1297 AND 5480/MUM./2008 (ASSESSMENT YEARS : 2004-05 AND 2005-06 ) ITA NO. 1001/MUM./2010 (ASSESSMENT YEAR : 2006-07 ) DY. COMMISSIONER OF INCOME TAX CIRCLE-10(2), AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .. APPELLANT V/S M/S. SWATI ENERGY & PROJECTS P. LTD. (FORMERLY KNOWN AS M/S. SWATI SALES & SERVICES P. LTD.) 207, BHAVESHWAR COMPLEX VIDYAVIHAR (W), MUMBAI 400 086 PAN AABCS6672A .... RESPONDENT ITA NO. 550/MUM./2008 (ASSESSMENT YEAR : 2004-05 ) M/S. SWATI ENERGY & PROJECTS P. LTD. (FORMERLY KNOWN AS M/S. SWATI SALES & SERVICES P. LTD.) 207, BHAVESHWAR COMPLEX VIDYAVIHAR (W), MUMBAI 400 086 PAN AABCS6672A .. APPELLANT V/S ADDL. COMMISSIONER OF INCOME TAX RANGE-10(2), AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .... RESPONDENT M/S. SWATI ENERGY & PROJECTS P. LTD. 2 C.O. NO.57/MUM./2009 (ARISING OUT OF ITA NO. 5480/MUM./2008 ) (ASSESSMENT YEAR : 2004-05 AND 2005-06 ) M/S. SWATI ENERGY & PROJECTS P. LTD. (FORMERLY KNOWN AS M/S. SWATI SALES & SERVICES P. LTD.) 207, BHAVESHWAR COMPLEX VIDYAVIHAR (W), MUMBAI 400 086 PAN AABCS6672A .. CROSS OBJECTOR V/S ADDL. COMMISSIONER OF INCOME TAX RANGE-10(2), AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .... RESPONDENT REVENUE BY : MR. G.P. TRIVEDI A/W MR. B. JAYA KUMAR ASSESSEE BY : MR. PRADIP KAPASI DATE OF HEARING 23.6.2011 DATE OF ORDER O R D E R PER J. SUDHAKAR REDDY, A.M. CROSS APPEALS IN ITA NO.1297/MUM./2008 PREFERRED BY THE REVENUE AND ITA NO.550/MUM./2008, PREFERRED BY THE ASSESSEE , FOR ASSESSMENT YEAR 2004-05, ARE DIRECTED AGAINST THE IMPUGNED ORDER DA TED 3 RD DECEMBER 2007, PASSED BY THE COMMISSIONER (APPEALS)-X, MUMBAI. 2. APPEALS PREFERRED BY THE REVENUE IN ITA NO.5480/MUM ./2008, IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 27 TH JUNE 2008, PASSED BY THE COMMISSIONER (APPEALS)-VI, MUMBAI, FOR ASSESSMENT Y EAR 2005-06 AND ITA M/S. SWATI ENERGY & PROJECTS P. LTD. 3 NO.1001/MUM./2010, IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 26 TH NOVEMBER 2009, PASSED BY THE COMMISSIONER (APPEALS) -XXII, MUMBAI, FOR ASSESSMENT YEAR 2006-07. 3. THE ASSESSEE HAS ALSO PREFERRED CROSS OBJECTION NO. 57/MUM./2009, WHICH IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 27 TH JUNE 2008, PASSED BY THE COMMISSIONER (APPEALS)-VI, MUMBAI, IN REVENU ES APPEAL IN ITA NO.5480/MUM./2008, FOR ASSESSMENT YEAR 2005-06. 4. AS THE ISSUES ARISING IN ALL THE APPEALS ARE COMMON , FOR THE SAKE OF CONVENIENCE, THESE APPEALS AS WELL AS CROSS OBJECTI ON WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY WAY THIS CONSOLIDATED ORDER. 5. BRIEF FACTS OF THE CASE ARE THAT, THE ASSESSEE, A C OMPANY, IS IN THE BUSINESS OF BEING A DEALERS IN BEARING AND SPARES, FILED ITS RETURN OF INCOME ON 16 TH SEPTEMBER 2004, FOR ASSESSMENT YEAR 2004-05, ALONG WITH TAX AUDIT REPORT UNDER SECTION 44AB OF THE INCOME TAX ACT, 19 61 (FOR SHORT 'THE ACT' ). THE ASSESSING OFFICER COMPLETED ASSESSMENT UNDER SE CTION 143(3) OF THE ACT ON 28 TH DECEMBER 2006, INTER-ALIA, DISALLOWING A PART ON A D-HOC BASIS, SALES PROMOTION EXPENDITURE CLAIMED, DISALLOWANCE OF SALA RY TO MR. JINTENDRA S. MODI, DISALLOWANCE OF SALES COMMISSION TO MR. RAJES H S. MODI AND DISALLOWANCE OF SUB-AGENT COMMISSION PAID. AGGRIEVE D, THE ASSESSEE CARRIED THE MATTER IN APPEAL, WHEREIN THE FIRST APPELLATE A UTHORITY PARTLY ALLOWED THE APPEAL. AGGRIEVED, BOTH THE ASSESSEE AND REVENUE HA VE FILED THESE APPEALS FOR ASSESSMENT YEAR 2004-05. 6. FIRST WE TAKE UP REVENUES APPEAL IN ITA NO.1297/MU M./2008, FOR ASSESSMENT YEAR 2004-05, WHEREIN GROUNDS RAISED BY THE REVENUE, READ AS FOLLOWS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT E XPENSES OF ` 12,64,40 CLAIMED UNDER THE HEAD SALES PROMOTION WAS INCURRED FOR THE PURPOSE OF BUSINESS M/S. SWATI ENERGY & PROJECTS P. LTD. 4 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE A DDITION OF ` 20,64,000 ON ACCOUNT OF DISALLOWANCE OF SALARY AND INCENTIVE PAID TO MR. JITENDRA S. MODI WITHOUT APPRECIATING THE FACT THAT THE PAYMENTS WERE VERY HIGH AND DID NOT COMMENSURATE WITH THE SE RVICE RENDERED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT T HE AMOUNT OF ` 44,75,200 PAID TO SIX PARTIES AS COMMISSION WERE IN CURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF THE BUSINESS. 7. BEFORE US, LEARNED DEPARTMENTAL REPRESENTATIVE, MR. G.P. TRIVEDI, REFERRING TO GROUND NO.1, SUBMITS THAT THE ASSESSEE SUPPLIES CERTAIN MATERIAL TO GUJARAT ELECTRICITY BOARD (GEB) & OTHER GOVT. AG ENCIES AND, AS BROUGHT OUT AT PAGES-2 TO 4 OF THE ASSESSMENT ORDER. IT CLA IMED TO HAVE INCURRED EXPENDITURE FOR PURCHASE OF COSTLY GIFT ITEMS SUCH AS WATCHES OF SWITZER LAND, SWARNAMALA JEWELLERS, BOSS APPLIANCES, ETC. A ND GIFTED THE SAME TO THE EMPLOYEES OF PSU. HE REFERRED TO PARA-3.7 AT PA GE-8 OF THE ASSESSMENT ORDER AND SUBMITS THAT THE ASSESSEE COULD NOT SUBST ANTIATE AS TO HOW THE SALES PROMOTION EXPENSES ARE DIRECTLY LINKED TO SAL ES AND IT CANNOT BE SAID THAT THERE IS A DIRECT CO-RELATION. HE SUBMITS THAT THE ASSESSEE HAD FAILED TO GIVE NAMES AND ADDRESSES OF THE PERSONS TO WHOM SUC H GIFT ARTICLES WERE GIVEN AND THAT IT FAILED TO ESTABLISH THAT HIGH VAL UE ITEMS I.E., SINGLE PIECE OF GOLD WORTH ` 80,000 TO ` 1,20,000, AS WELL AS SILVER COINS WERE NECESSARY T O BE GIFTED FOR SWAYING BUSINESS DECISIONS IN ITS FAV OUR. HE SUBMITS THAT THERE IS A STATUTORY PROVISION AGAINST MAKING SUCH GIFTS TO GOVT. EMPLOYEES AND WHEN SUCH GIFTS ARE GIVEN, THE PROHIBITION IN EXPLA NATION TO SECTION 37(1) COMES INTO PLAY AND AS IT IS AGAINST THE PUBLIC POL ICY, EXPENDITURE WAS RIGHTLY DISALLOWED. HE REFERRED TO THE IMPUGNED ORDER PASSE D BY THE COMMISSIONER (APPEALS) ON THIS ISSUE AND SUBMITS THAT THE SAME M AY BE REVERSED. 8. ON GROUND NO.2, HE RELIED ON THE ORDER OF THE ASSES SING OFFICER AND SUBMITS THAT THE ASSESSEE COMPANY WAS PAYING A ANNU AL SALARY OF ` 1,80,000 TO MR. JITENDRA S. MODI, AND WHEREAS AN INCENTIVE O F ` 20,65,000, WAS PAID WHICH IS NOT ONLY ASTRONOMICAL BUT IS ALSO TOTALLY UNJUSTIFIED. HE SUBMITS THAT THE INCENTIVE IS TOTALLY DISPROPORTIONATE WITH THE SALARY AND THIS WAS PAID FOR M/S. SWATI ENERGY & PROJECTS P. LTD. 5 THE REASON THAT MR. JINTENDRA S. MODI, HAS PROCURED ORDERS FROM GEB, WHICH IS ALSO NOT JUSTIFIED. 9. COMING TO GROUND NO.3, LEARNED DEPARTMENTAL REPRESE NTATIVE POINTS OUT THAT THE ASSESSEE HAD PAID COMMISSION TO SIX PA RTIES AND THE COMMISSION WAS PAID IN RESPECT OF SALES TO SIX GOVT. AGENCIES I.E., WESTERN COALFIELDS LTD., MAHANADI COALFIELDS LTD., ETC. HE REFERRED TO ASSESSMENT ORDER FROM PAGE-14 ONWARDS AND SUBMITS THAT MOST OF THESE GOVT . AGENCIES WHEN QUESTIONED BY THE ASSESSING OFFICER, CLEARLY STATED THAT THEY ARE NOT AWARE OF ANY MIDDLEMAN AND THAT THE TRANSACTION WAS CARRIED OUT DIRECTLY WITH THE ASSESSEE. ON THESE FINDINGS, THE LEARNED DEPARTMENT AL REPRESENTATIVE SUBMITS THAT THE ORDER OF THE ASSESSING OFFICER SHO ULD BE UPHELD AND THAT OF THE COMMISSIONER (APPEALS) BE REVERSED. 10. LEARNED COUNSEL FOR THE ASSESSEE, MR. PRADIP KAPASI , ON THE OTHER HAND, OPPOSED THE CONTENTIONS AND SUBMITS THAT THE ASSESSEE HAD, BEFORE THE COMMISSIONER (APPEALS), FILED DETAILED EVIDENCE IN THE FORM OF ADDRESSES OF ANOTHER DESIGNATION OF THE PERSON WHO RECEIVED T HE GIFTS, ETC. WHICH WAS REMANDED TO THE ASSESSING OFFICER FOR COMMENTS. HE FILED PAPER BOOK AND DREW THE ATTENTION OF THE BENCH TO PAGES-28 TO 33, WHICH GIVES THE LIST OF PERSONS TO WHOM GIFTS GIVEN WHO ARE APPROXIMATELY 1 ,920 IN NUMBER WHICH GIVES AN AVERAGE OF ` 2,105 EACH GIFT PER PERSON. HE SUBMITS THAT GIFTS ARE TRADITIONALLY GIVEN ON FESTIVE OCCASIONS AS A PRACT ICE OF COMPANY FOR MANY YEARS AND THAT HIGH VALUE ITEMS WERE GIVEN TO THE M ANAGING DIRECTOR OF THE COMPANY FROM WHOM SUBSTANTIAL PURCHASE ORDERS ARE O BTAINED. HE SUBMITS THAT THE GIFTS WERE GIVEN TO INCREASE THE GOODWILL OF THE COMPANY AND THAT, IN ANY CASE, GIFTS ARE GIVEN ONLY TO PERSONS TO WHOM S OME SALES ARE MADE AND, HENCE, THE EXPENDITURE IS 100% BACKED BY ORDERS. HE VEHEMENTLY CONTENDED THAT THE ASSESSING OFFICER ALSO ACCEPTS THE REQUIRE MENT OF INCURRING SALES PROMOTION EXPENSES AND THAT ONLY AD-HOC PART DISALL OWANCE WAS MADE. HE RELIED ON THE FOLLOWING CASE LAWS:- NATIONAL INDUSTRIAL CORPORATION LTD. V/S CIT (2002) 258 ITR 757 (DEL.) M/S. SWATI ENERGY & PROJECTS P. LTD. 6 AVON CYCLES LTD. V/S ACIT, 59 TTJ 75 (CHD.) OSWAL WOOLEN MILLS LTD. V/S ITO, 26 TTJ 357 (P&H) 11. LEARNED COUNSEL, ON THE ISSUE OF PAYMENT OF INCENTI VES TO MR. JITENDRA S. MODI, SUBMITS THAT MR. JITENDRA S. MODI, WAS APP OINTED BY THE ASSESSEE COMPANY AS AN EMPLOYEE AND WAS PAID A FIXED MINIMUM SALARY TO MEET THE EXPENDITURE AND THAT HE PRIMARILY WORKS FOR COMMISS ION FOR BRINGING SALES ORDERS. HE SUBMITS THAT INCOME HAS BEEN SHOWN ONLY UNDER THE HEAD SALARY IN THE RETURN OF INCOME FILED BY MR. JITENDRA S. M ODI, AND THE TDS HAS BEEN DULY DEDUCTED. HE DISPUTED THE FACT THAT A COMMISSION HAS BEEN PAID FOR PURCHASES MADE BY GEB AND SUBMITTED THAT T HE INCENTIVES GIVEN WERE BASED ON THE PERFORMANCE OF THE EMPLOYEES AND THAT PERFORMANCE ARE BACKED BY NEW SALES ORDERS. COMPARATIVE CHART OF IN CENTIVES PAID FOR SEVERAL YEARS HAS BEEN FURNISHED AT PAGE-60 OF THE ASSESSEE S PAPER BOOK AND IT WAS POINTED OUT THAT SIMILAR INCENTIVES WERE PAID FOR A SSESSMENT YEARS 2005-06, 2006-07 AND 2007-08, WHICH WAS ALLOWED BY THE ASSES SING OFFICER. IT WAS POINTED OUT THAT THE ASSESSING OFFICER DOES NOT DIS PUTE THE FACT THAT THE ASSESSEE HAS RENDERED SERVICES IN THIS CASE. HE REL IED ON THE ORDER OF THE ASSESSING OFFICER. 12. COMING TO THE DISALLOWANCE OF COMMISSION, HE POINTE D OUT THAT SIMILAR COMMISSION WAS PAID TO THE VERY SAME PERSON IN THE PAST AT A SIMILAR RATE AND THIS WAS ACCEPTED BY THE ASSESSING OFFICER. HE ARGUED THAT PAYMENTS WERE MADE BY ACCOUNT PAYEE CHEQUE ONLY. TDS WAS DED UCTED AND THE AGENTS CONFIRMED THE GENUINENESS OF THE PAYMENT IN AN INQU IRY UNDER SECTION 133(6) OF THE ACT. HE SUBMITS THAT THESE PARTIES HA D RENDERED SERVICES RELATING TO TENDERING, LIAISONING WITH CLIENTS, SAL ES, COLLECTION AND ADMINISTRATIVE AND AFTER-SALES SERVICES. HE REFERRE D TO INDEX B OF THE PAPER BOOK AND SUBMITS THAT THIS IS ENOUGH PROOF TO ESTAB LISH THAT REPRESENTATIVE WAS MADE BY THE SERVICE PROVIDER BEFORE THE PUBLIC SECTOR UNDERTAKING (PSU) ON VARIOUS ISSUES. IT WAS ALSO POINTED OUT TH AT SERVICES WERE RENDERED IN REMOTE PLACES AND GAVE A LIST OF SUCH PLACES. HE REFERRED TO THE AFFIDAVIT M/S. SWATI ENERGY & PROJECTS P. LTD. 7 FILED BY SOME OF THE PARTIES AND RELIED ON THEM. HE CONTENDED THAT THE EXPENDITURE IS NOT PERSONAL IN NATURE AND WAS EXPEN DED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS. REFERRING TO J.R. SERVICES, HE POINTS OUT THAT 100% OF THE SALES VALUE WAS DEPOSITED WITH THE ASSESSEE BY THE SERVICE PROVIDER, IN ADVANCE. ON THE DENIAL OF CUST OMERS, HE SUBMITS THAT CUSTOMERS WERE THIRD PARTIES AND IT WAS ONLY IN THE CASE OF ONE OR TWO PSUS THAT TOO, BY THE ACCOUNTS DEPARTMENT THAT SUCH CLAI MS WERE MADE. THERE WAS A DENIAL OF THE EXISTENCE OF AN INTERMEDIARY BU T THAT THERE WAS NO DENIAL OF SERVICE PROVIDERS OF THE ASSESSEE HAVING DONE SE RVICES.. HE SUBMITS THAT ALL THESE ORGANISATIONS ARE LARGE & FACELESS AND TH E ASSESSEE WAS NOT PROVIDED AN OPPORTUNITY OF CROSS EXAMINATION. THOUG H THE AGENTS HAVE CONFIRMED THE FACT OF RENDERING OF SERVICES AS WELL AS FACT OF HAVING RECEIVED THE COMMISSION, THE ASSESSING OFFICER HAS NOT EXAMI NED ANY AGENT. HE VEHEMENTLY CONTENDED THAT THE PAYMENTS WERE MADE FO R SERVICES RENDERED TO THE APPELLANT AND NOT FOR SERVICES RENDERED TO T HE PSUS. COMING TO J.R. SERVICES, HE SUBMITS THAT THE PSU RECOGNISED ITS EX ISTENCE AND THERE IS OVERWHELMING EVIDENCE OF RENDERING OF SERVICES. HE POINTS OUT THAT THE ASSESSING OFFICER HAS NOT CHALLENGED THE GENUINENES S OF THE PAYMENT AS WELL AS THE EXISTENCE OF THE PAYEES. HE SUBMITS THAT THE EXPENDITURE IS TRADE RELATED EXPENDITURE AND THERE IS NO EVIDENCE OF THE MONEY HAVING FLOWN BACK TO THE ASSESSEE. HE CONTENDS THAT THE ASSESSEE DISC HARGED THE ONUS THAT LAY ON IT. HE RELIED ON THE ORDER OF THE COMMISSIONER ( APPEALS). IN SUPPORTS OF HIS ARGUMENTS, HE ALSO RELIED ON THE FOLLOWING CASE LAWS:- ANUPAM SYNTHETICS P. LTD., 104 TTJ 119 (DEL.); VIP INDUSTRIES V/S IAC, 36 ITD 70 (BOM.); SHRI SAJJAN MILLS LTD., 115 TTJ 145 (INDORE) (TM); AND CHICAGO PNEUMATIC INDIA LTD., 115 SOT 252 (MUM.) 13. ON THE RULE OF CONSISTENCY, LEARNED COUNSEL RELIED ON THE FOLLOWING CASE LAWS: ANIS AHMED & SONS, 297 ITR 441 (SC); AND RADHASOAMI SATSANG, 193 ITR 321 (SC). M/S. SWATI ENERGY & PROJECTS P. LTD. 8 14. COMING TO THE ASSESSEES APPEAL, LEARNED COUNSEL SU BMITS THAT ONLY ONE GROUND ARISES AND I.E., THE CONFIRMATION OF DIS ALLOWANCE OF SUB- COMMISSION PAID TO SUVI RUBBER P. LTD. HE SUBMITS T HAT THE ASSESSING OFFICER DISALLOWED HIS CLAIM ON THE GROUND THAT THE ASSESSE E FAILED TO ESTABLISH THAT M/S. SUVI RUBBER P. LTD. IS A SELLING AGENT AND THA T THE PAYMENTS WERE IN THE PREVIOUS YEAR. HE SUBMITS THAT THE ASSESSEE WAS ACT ING AS AN AGENT IN TRANSACTIONS WITH GEB AND THAT THE COMMISSIONER (AP PEALS) DISALLOWED THE SAME ON THE GROUND THAT THE EXPENDITURE DOES NOT RE LATE TO THIS YEAR. LEARNED COUNSEL POINTES OUT THAT THE SUB-COMMISSION WAS PAID TO THE LIAISONING AGENT UNDER AN AGREEMENT AFTER DEDUCTION OF TAX. HE POINTS OUT THAT M/S. SUVI RUBBER P. LTD. OBTAINED A CERTIFICAT E UNDER SECTION 197 OF THE ACT FOR LOWER DEDUCTION FROM THE ASSESSING OFFICER. ON THE EXPENDITURE BEING BOOKED IN THE CURRENT YEAR, LEARNED COUNSEL SUBMITS THAT THE INCOME WAS RECOGNISED IN THIS YEAR AND, HENCE, THE EXPENDITURE WAS CLAIMED ON MATCHING PRINCIPLE. HE POINTS OUT THAT M/S. SUVI RUBBER P. L TD., IN AN ENQUIRY, CONFIRMED THE FACTUM OF RECEIPT OF COMMISSION AND T HAT THE PAYMENTS WERE MADE BY CHEQUES. HE SUBMITS THAT M/S. SUVI RUBBER P . LTD., IS NOT CONNECTED WITH THE ASSESSEE IN ANY MANNER AND IT IS AN ARMS LENGTH PAYMENT. LEARNED COUNSEL POINTS OUT THAT THE COMMIS SION WAS PAID ON A SPECIFIC TRANSACTION WHICH IS A SPECILISED ORDER OF H.B. TURBINE WHICH WAS IMPORTED FROM RUSSIA AND THE EXPENDITURE WAS GENUIN E, HAS TO BE ALLOWED. 15. LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER H AND, RELIED ON PARA-6.3/PAGE-26 OF THE ASSESSMENT ORDER AND SUBMIT S THAT THE ASSESSEE COMPANY HAS FAILED TO ESTABLISH THAT M/S. SUVI RUBB ER P. LTD. IS A SELLING AGENT FOR BOOKING OF ORDERS OF L.N.Z. AND GEB WHO F OLLOW TRANSPARENT PROCEDURE AND DO NOT ENTERTAIN A ROLE OF MIDDLEMAN. HE, ACCORDINGLY, PRAYED THAT THE APPEAL OF THE ASSESSEE BE DISMISSED. 16. RIVAL CONTENTIONS HEARD. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ON PERUSAL OF THE PAP ERS ON RECORD, AS WELL AS THE CASE LAWS CITED BEFORE US, WE HOLD AS FOLLOWS:- M/S. SWATI ENERGY & PROJECTS P. LTD. 9 17. THE FIRST ISSUE IN REVENUES APPEAL IS THE AD-HOC D ISALLOWANCE OF SALES PROMOTION EXPENSES. 18. WE AGREE WITH THE FINDINGS OF THE COMMISSIONER (APP EALS) THAT THE EXPENDITURE MAY PROMOTE GOODWILL BETWEEN THE CLIENT S AND EXECUTIVES. IT IS ALSO TRUE THAT THE ASSESSEE HAS BEEN INCURRING SIMI LAR EXPENDITURE EVERY YEAR AND THE REVENUE HAS BEEN ACCEPTING THE SAME. FROM T HE ORDER OF THE ASSESSING OFFICER, IT APPEARS THAT HE IS NOT AGGRIE VED BY THE FACT THAT THE ASSESSEE IS INCURRING CERTAIN EXPENDITURE FOR SALES PROMOTION. THE OBJECTION SEEMS TO BE THAT OF QUANTUM OF EXPENDITURE. IT IS N OT THE CASE OF THE ASSESSING OFFICER THAT THE EXPENDITURE IN QUESTION WAS INCURRED FOR OTHER THAN BUSINESS PURPOSES. THE ASSESSEE ON ITS PART HA S FILED SUFFICIENT DETAILS TO DEMONSTRATE THAT THE PURCHASES OF GIFT ITEMS WER E GENUINE AND ALSO TO DEMONSTRATE THE PERSONS TO WHOM SUCH GIFTS HAVE BEE N GIVEN. AS A MATTER OF PRACTICE, THE ASSESSEE HAS BEEN GIVING GIFTS ON SPE CIAL OCCASIONS SUCH AS MAJOR FESTIVALS, REGIONAL FESTIVALS, ETC. THE GIFT ARTICLES DO NOT BEAR THE LOGO OF THE COMPANY. UNDER THESE CIRCUMSTANCES, IN PRINC IPLE, THE CLAIM OF THE ASSESSEE FOR ALLOWANCE OF SALES PROMOTION EXPENDITU RE HAS TO BE ACCEPTED. BUT AT THE SAME TIME, WE OBSERVE THAT THE ASSESSEE IS DEALING WITH GOVT. AND SEMI GOVT. ENTERPRISES AND IT DECLARED THAT IT GIVES GIFTS ON RELEASE OF SPECIFIC ORDERS OR ON THE PAYMENTS MADE FOR BILLS A ND ON DELIVERY, ETC. THE DETAILS ALSO SHOW THAT THE VALUE OF ITEMS WHICH GIV ES AS GIFTS IN SOME CASES ARE VERY HIGH. FOR E.G., ON 22 ND OCTOBER 2003, A SINGLE IDLE OF GOLD WORTH ` 1,20,000, HAS BEEN PURCHASED AND GIFTED. SIMILARLY, MANY ITEMS WHICH VALUES ABOUT ` 50,000, HAVE BEEN PURCHASED AND GIFTED. AS RIGHTLY POINTED OUT BY THE LEARNED DEPARTMENTAL REPRESENTATIVE, EXP LANATION TO SECTION 37(1) OF THE ACT, CLEARLY PROHIBITS ALLOWANCE OF AN Y EXPENDITURE INCURRED FOR ANY PURPOSE WHICH IS PROHIBITED BY LAW. WHEN A VERY COSTLY GIFT IS GIVEN TO A PERSON IN A PSU FOR THE PURPOSE OF OBTAINING AN ORD ER OR FOR THE PURPOSE OF OBTAINING A CHEQUE, ETC., IT WOULD DEFINITELY BE AN ACT WHICH IS PROHIBITED IN LAW. SUCH EXPENDITURE CANNOT BE ALLOWED. THE ASSESS ING OFFICER, IN OUR CONSIDERED OPINION, SHOULD HAVE LISTED OUT SUCH ITE MS FROM THE LIST PROVIDED M/S. SWATI ENERGY & PROJECTS P. LTD. 10 BY THE ASSESSEE AND AFTER MAKING SUITABLE VERIFICAT ION SHOULD HAVE MADE A SPECIFIC DISALLOWANCE INSTEAD OF AD-HOC DISALLOWANC E. IN OUR OPINION, THE COMMISSIONER (APPEALS) SHOULD HAVE ALSO CONSIDERED THE EXPLANATION TO SECTION 37(1) IN THE FACTUAL SCENARIO, WHEREIN THE ASSESSEE IS DEALING WITH PSU FOR GETTING ITS WORK DONE. CUSTOMARY GIFTS ON F ESTIVE OCCASION COULD BE ALLOWED. IN VIEW OF THE ABOVE DISCUSSIONS, WE RESTO RE THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER FOR DENOVO ADJUDICATION I N ACCORDANCE WITH LAW. THIS GROUND IS, THUS, ALLOWED FOR STATISTICAL PURPOSES. 19. COMING TO GROUND NO.2, WE FIND THAT MR. JITENDRA S. MODI, HAS BEEN RENDERING SERVICES TO THE COMPANY AS A EMPLOYEE AND HAS BEEN PAID FIXED AMOUNT OF SALARY AS WELL AS INCENTIVE. NOWHERE, HAS THE ASSESSING OFFICER GIVEN A FINDING THAT MR. JITENDRA S. MODI, HAS NOT RENDERED ANY SERVICES. AT PAGE-9 OF THE COMMISSIONER (APPEALS)S ORDER, A TAB LE OF THE INCENTIVES AND SALARY PAID TO MR. JITENDRA S. MODI, ON ACCOUNT OF SALE TO GEB AND COMMISSION RECEIVED FROM NSK IS GIVEN. THE ASSESSIN G OFFICER HAS ALLOWED THESE EXPENDITURE FOR THE ASSESSMENT YEARS 2005-06 AND 2006-07. SALARY CERTIFICATE HAS BEEN ISSUED BY THE ASSESSEE TO THIS EMPLOYEE AFTER DEDUCTING TAX AT SOURCE AND THE EMPLOYEE HAD FILED ITS RETURN OF INCOME. ON THESE FACTS, WE AGREE WITH THE FINDINGS OF THE COMMISSION ER (APPEALS) AT PARA-2.4, WHICH READS AS FOLLOWS:- 2.4 I HAVE GONE THROUGH THE FACTS IN THIS CASE. SH RI JITENDRA MODI, IS AN EMPLOYEE AND MARKETING DIRECTOR OF THE COMPANY. THE SALARY AND INCENTIVES PAID TO HIM ARE TAXABLE UNDER THE HEAD I NCOME FROM SALARY. TDS HAS DULY BEEN DEDUCTED FROM THE SALARY AND SHOW N BY HIM IN HIS INCOME TAX RETURN. I DO NOT SEE HOW THE A.O. CAN QU ESTION THE AMOUNT OF SALARY PAYABLE TO SHRI MODI, AS THE SAME IS A BU SINESS DECISION OF THE APPELLANT COMPANY AND HAS DULY BEEN APPROVED BY ITS BOARD. AS IS CLEAR FROM THE TABLE GIVEN ABOVE, SHRI MODI HAS REC EIVED INCENTIVES SINCE F.Y. 2003-04, IN PROPORTION TO THE SALES AND COMMISSIONS RECEIVED FROM GEB AND NSK. THE ONLY GRIEVANCE OF TH E A.O. IS THAT GEB HAS NOT BEEN ABLE TO PROVIDE A CERTIFICATE TO T HE EFFECT THAT SHRI MODI WAS ACTING AS AN INTERMEDIARY ON BEHALF OF THE APPELLANT. GEB IS A GOVT. CONCERN AND IT MAY BE HAVING ITS OWN REASON S FOR NOT GIVING SUCH A CERTIFICATE. THE A.O. HAS NOT BEEN ABLE TO P ROVE THAT SHRI MODI WAS NOT AN EMPLOYEE OF THE COMPANY. THE ONLY GRIEVA NCE OF THE A.O. IS THAT THE SALARY PAID IS HIGH AND NOT JUSTIFIED. ONCE IT HAS BEEN ACCEPTED THAT SHRI MODI IS AN EMPLOYEE OF THE COMPA NY, IT IS NOT FOR M/S. SWATI ENERGY & PROJECTS P. LTD. 11 THE ASSESSING OFFICER TO SIT ON THE JUDGMENT AS TO THE AMOUNT OF SALARY AND INCENTIVES PAYABLE TO HIM AS LONG AS THESE ARE AS PER THE TERMS OF CONTRACT OF EMPLOYMENT. IN THE INSTANT CASE, THE IN CENTIVES HAVE BEEN APPROVED BY THE BOARD OF THE COMPANY AND TO THAT EX TENT THEY ARE AS PER THE TERMS OF EMPLOYMENT OF SHRI MODI. EVEN OTHE RWISE, I FIND THAT THERE IS A CO-RELATION BETWEEN THE INCENTIVE PAID A ND THE SALES TURNOVER OF THE GEB AND NSK CLIENTS. IN THE CIRCUMS TANCES, THE A.O. IS DIRECTED TO ALLOW SALARY AND INCENTIVES, PAID TO SH RI MODI, AS A BUSINESS EXPENSES. 20. KEEPING IN VIEW THE AFORESAID FINDINGS OF THE COMMI SSIONER (APPEALS), WE UPHOLD HIS ORDER AND DISMISS THE GROUND RAISED B Y THE REVENUE. 21. COMING TO GROUND NO.3, WHICH IS DISALLOWANCE OF COM MISSION PAID TO CERTAIN CONCERNS, WE FIND THAT THE ASSESSING OFFICE R, IN THIS CASE ALSO, COULD NOT FIND ANY EVIDENCE THAT THE PARTIES HAVE NOT REN DERED ANY SERVICES TO THE ASSESSEE. THE ASSESSING OFFICERS CASE IS THAT, SOM E OF THE PSUS HAD DENIED THAT THESE PARTIES HAVE ACTED AS INTERMEDIARIES. TH E FACT IS THAT ONLY TWO PSUS DENIED THE PARTICIPATION OF THESE COMMISSION A GENTS. IT CANNOT ALSO BE DENIED THAT THESE AGENTS, ARE NOT RELATED TO THE AS SESSEE IN ANY WAY. SIMILAR PAYMENTS WERE MADE TO THE VERY SAME PERSONS IN THE PAST AT THE SAME RATES AND THIS WAS ACCEPTED BY THE ASSESSING OFFICER IN A SCRUTINY ASSESSMENT. IT IS ALSO FACT THAT THE CUSTOMERS WERE LOCATED IN REMOTE PLACES VIZ. CHANDRAPUR, YAVATMAL, TALATI, VANI IN CHANDRAPUR AND SEVERAL SU CH PLACES IN OTHER STATES. THERE IS SUBSTANCE IN THE ARGUMENT OF THE ASSESSEE THAT THE ORGANISATIONS ARE VERY LARGE AND THE REPLIES FILED BY THE DEPARTM ENT CANNOT BE TAKEN AS CONCLUSIVE AND THE ASSESSING OFFICER SHOULD HAVE PR OVIDED AN OPPORTUNITY FOR CROSS EXAMINATION, IN CASE HE WANTED TO RELY ON THE REPLIES GIVEN BY SOME OF THE INSTITUTIONS. THE ASSESSEE HAS PRODUCED CORRESP ONDENCES AND OTHER EVIDENCES TO PROVE THAT SERVICES WERE RENDERED IN R ELATION TO TENDERING, LIAISONING, SALES, ETC. THERE IS NO EVIDENCE THAT T HERE PAYMENTS ARE ILLEGAL. THE ASSESSING OFFICER ONLY PRESUMES THAT THERE IS A VIOLATION OF LAW. ON THESE FACTS, WE UPHOLD THE FINDINGS OF THE COMMISSIONER ( APPEALS) VIDE PARAS-5.14, 5.15 OF HIS ORDER. CONSEQUENTLY, THE GROUND RAISED BY THE REVENUE IS DISMISSED. M/S. SWATI ENERGY & PROJECTS P. LTD. 12 22. IN THE RESULT, REVENUES APPEAL IN ITA NO.1297/MUM. /2008, IS PARTLY ALLOWED. 23. COMING TO ASSESSEES APPEAL IN ITA NO.550/MUM./2008 , WE FIND THAT THE COMMISSIONER (APPEALS) HAS SUSTAINED DISALLOWAN CE MADE BY THE ASSESSING OFFICER ONLY ON THE GROUND THAT THE PAYME NTS PERTAINED TO EARLIER YEAR. THERE IS A WRITTEN AGREEMENT BETWEEN THE ASSE SSEE AND LNZ ENERGY LTD. AND THE ASSESSEE HAS BEEN APPOINTED AS AN AGEN T FOR SECURING ORDER FROM GEB. IT RECEIVES CERTAIN COMMISSION WHICH HAD OFFERED FOR TAXATION FOR ASSESSMENT YEAR 2004-05. THE ASSESSEE CLAIMED SUB-C OMMISSION PAYMENT TO M/S. SUVI RUBBER P. LTD. M/S. SUVI RUBBER P. LTD ., WAS PAID ` 25,50,000 ON 10 TH JULY 2002, RELEVANT TO THE ASSESSMENT YEAR 2003-04 . THE EXPENDITURE WAS SHOWN AS AN ADVANCE AND ON THE PRIN CIPLE OF MATCHING CONCEPT, IT WAS CLAIMED IN THIS YEAR. THE FACT THAT M/S. SUVI RUBBER P. LTD. IS REGULARLY ASSESSED TO TAX AND THE FACT THAT IT OBTA INS A CERTIFICATE FROM THE ASSESSING OFFICER FOR LOWER DEDUCTION OF TAX, IS NO T DENIED. THERE IS NO ADVERSE FINDING IN THE ORDER OF THE COMMISSIONER (A PPEALS) ON THE PLEA OF THE ASSESSEE THAT M/S. SUVI RUBBER P. LTD. HAS REND ERED SERVICES FOR WHICH PAYMENTS HAVE BEEN MADE BY ACCOUNT PAYEE CHEQUES. A S ALREADY STATED, THE DISALLOWANCE WAS SUSTAINED ON THE GROUND THAT THE E XPENDITURE PERTAINED TO EARLIER YEAR. WE ARE UNABLE TO APPRECIATE THE SAME. UNDER THE MATCHING CONCEPT, BOTH INCOME AND EXPENDITURE HAVE TO BE MAT CHED FOR THE PURPOSE OF ARRIVING AT THE CORRECT INCOME. AS THE INCOME HA S BEEN RECOGNISED IN THIS FINANCIAL YEAR, WE ARE OF THE OPINION THAT THE EXPE NDITURE SHOULD ALSO BE ALLOWED IN THE YEAR UNDER CONSIDERATION. CONSEQUENT LY, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE COMMISSIONER (APPEALS) AND ALLOW THE GROUND RAISED BY THE ASSESSEE. 24. IN THE RESULT, ASSESSEES APPEAL IN ITA NO.550/MUM. /2008, IS ALLOWED. 25. NOW, WE TAKE UP REVENUES APPEAL IN ITA NO.5480/MUM ./2008 AND ASSESSEES CROSS OBJECTION NO.57/MUM./2009. M/S. SWATI ENERGY & PROJECTS P. LTD. 13 26. THE APPEAL OF THE REVENUE IS ON THE ISSUE OF DELETI ON OF DISALLOWANCE OF COMMISSION PAYMENTS BY THE COMMISSIONER (APPEALS), DELETION OF DISALLOWANCE OF SALES PROMOTION EXPENSES AND DELETI ON OF ADDITION MADE UNDER SECTION 2(22)(E) OF THE ACT BY THE COMMISSION ER (APPEALS). 27. ASSESSEES CROSS OBJECTION IS ON THE ADDITION MADE UNDER SECTION 2(22)(E) OF THE ACT. 28. ON THE ISSUE OF DISALLOWANCE OF SALES COMMISSION, T HE ASSESSING OFFICER FOUND THAT THE CUSTOMERS HAVE DENIED ANY RELATIONSH IP WITH INTERMEDIARIES AND THAT THE NAMES OF THE AGENTS ARE NOT MENTIONED IN THE INVOICE. THE ASSESSING OFFICER HELD THAT THE AGENTS ARE INTER-CO NNECTED AND DEALS WITH THE CLIENTS ON DAY-TO-DAY BASIS AND, HENCE, THE CUSTOME RS SHOULD KNOW THE AGENT VERY WELL AND THE FACT THAT THE CUSTOMERS HAD DENIED KNOWLEDGE OF THE AGENTS SHOWING THAT AGENTS HAVE NOT RENDERED ANY SE RVICES. HE HELD THAT THE ASSESSEE HAS FAILED TO PROVE THAT SERVICES RENDERED BY THE AGENTS OF THE ASSESSEE. THE ASSESSING OFFICER FURTHER HELD THAT M ORE THAN 43% OF THE GROSS PROFIT IS PAID TO COMMISSION TO AGENTS AND AS THE PSUS ARE LOCATED IN THE CITY AND TENDER FORMS ARE DOWNLOADED ON-LINE, T HERE IS NO PROOF OF ANY SERVICES RENDERED BY MIDDLEMAN. THE ASSESSING OFFIC ER, ACCORDINGLY, REJECTED THE CLAIM OF THE ASSESSEE. 29. BEING AGGRIEVED BY THE STAND SO TAKEN BY THE ASSESS ING OFFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE FIRST APPELL ATE AUTHORITY, WHEREIN THE COMMISSIONER (APPEALS) ALLOWED THE CLAIM OF SALES C OMMISSION HOLDING THAT SINCE THE ASSESSEE HAS FILED CONFIRMATIONS AND THE PAYMENTS WERE MADE BY WAY OF ACCOUNT PAYEE CHEQUES, NO DISALLOWANCE IN TH IS REGARD IS CALLED FOR. AS REGARDS DELETION OF DISALLOWANCE OF SALES PROMOT ION EXPENSES, THE COMMISSIONER (APPEALS) HELD THAT ALL THE EXPENSES A RE DULY VOUCHED AND THE BOOK RESULTS HAVE NOT BEEN REJECTED BY THE ASSESSIN G OFFICER. HE HELD THAT, EVEN OTHERWISE, IN THE PREVIOUS ASSESSMENT YEAR 200 4-05, HIS PREDECESSOR HAS ALLOWED THE SALES PROMOTION EXPENSES. HE, THUS, ALLOWED THE CLAIM OF THE ASSESSEE. ON THE ISSUE OF ADDITION UNDER SECTION 2( 22)(E) OF THE ACT, THE M/S. SWATI ENERGY & PROJECTS P. LTD. 14 COMMISSIONER (APPEALS) HELD THAT SINCE THERE IS NO COMMON SHARE HOLDINGS BETWEEN THE ASSESSEE AND M/S. SUJYOTI BEARINGS (I) P. LTD., THE PROVISIONS OF SECTION 2(22)(E) IS NOT APPLICABLE. HE, THUS, DIREC TED THE ASSESSING OFFICER TO DELETE THE ADDITION. AGGRIEVED, THE REVENUE IS IN A PPEAL BEFORE THE TRIBUNAL. 30. BEFORE US, LEARNED DEPARTMENTAL REPRESENTATIVE, REL YING ON THE FINDINGS OF THE COMMISSIONER (APPEALS), SUBMITS THA T ` 4,00,00,000 HAVE BEEN PAID AS COMMISSION FOR THE GOODS SUPPLIED FOR ` 20,00,00,000, WHICH IS EXTRA-ORDINARY AND THAT TOO WHEN THE PSUS ARE INVOL VED. 31. LEARNED COUNSEL, ON THE OTHER HAND, SUBMITS THAT TH E PAYMENTS ARE MADE BY ACCOUNT PAYEE CHEQUES ONLY AFTER DEDUCTING TAX AT SOURCE. ALL THE AGENTS CONFIRMED THE GENUINENESS OF THE TRANSACTION S IN AN INQUIRY UNDER SECTION 133(6), CONDUCTED BY THE ASSESSING OFFICER, CONFIRMATION OF ACCOUNTS OF ALL THE AGENTS WERE FILED, SERVICES RELATED TO T ENDER, CONSTANT LIAISONING, ETC., AND ENOUGH PROOF TO ESTABLISH THE RENDERING O F SERVICES WAS FILED. SERVICES WERE RENDERED IN REMOTE PLACES. IN FACT, T HE SUBMISSIONS MADE IN THE ASSESSMENT YEAR 2004-05, WERE REITERATED BY BOT H THE PARTIES. 32. AFTER HEARING BOTH THE PARTIES, CONSISTANT WITH THE VIEW TAKEN BY US ON THE VERY SAME ISSUE IN EARLIER YEARS AT PQAGE-11/PA RA-21 OF THIS ORDER, WE UPHOLD THE FINDINGS OF THE COMMISSIONER (APPEALS) A ND DISMISS THIS GROUND RAISED BY THE REVENUE. 33. GROUND NO.2, IS ON THE ISSUE OF AD-HOC DISALLOWANCE OF SALES PROMOTION EXPENDITURE. 34. AFTER HEARING THE CONTENTIONS OF BOTH THE PARTIES, WE FIND THAT WE HAVE DECIDED THE IDENTICAL ISSUE IN ASSESSEES OWN CASE IN EARLIER ASSESSMENT YEAR. CONSISTENT WITH THE VIEW TAKEN IN THE EARLIER YEAR AT PAGES-8 & 9/PARA-18 OF THIS ORDER, WE RESTORE THE ISSUE BACK TO THE FILE O F ASSESSING OFFICER FOR DENOVO ADJUDICATION WITH A DIRECTION THAT THE ASSES SING OFFICER SHALL EXAMINE THE VIOLATION, IF ANY, IN TERMS OF EXPLANATION-(II) TO SECTION 37(1) OF THE ACT. M/S. SWATI ENERGY & PROJECTS P. LTD. 15 35. COMING TO GROUND NO.3, WHICH RELATES TO ADDITION UN DER SECTION 2(22)(E) OF THE ACT, BOTH THE PARTIES AGREE THAT TH E ADDITION CANNOT BE SUSTAINED FOR THE REASON THAT THE ASSESSEE IS NOT A SHAREHOLDER. 36. THE ISSUE BEFORE US IS COVERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE BY MUMBAI SPECIAL BENCH DECISION OF TH E TRIBUNAL IN BHAUMIK COLOURS P. LTD., 120 TTJ 865 (MUM.), AS WELL AS THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN CIT V/S UNIVERSAL MEDI CARE P. LTD., (2010) 324 ITR 263 (BOM.). RESPECTFULLY FOLLOWING THESE JUDICI AL PRONOUNCEMENTS, WE DISMISS THIS GROUND OF RAISED BY THE REVENUE. 37. IN THE RESULT, REVENUES APPEAL IN ITA NO.5480/MUM. /2008, IS PARTLY ALLOWED. 38. COMING TO ASSESSEES CROSS OBJECTION NO.57/MUM./200 9, THE SAME DOES NOT SURVIVE IN VIEW OF OUR DECISION ON GROUND NO.3 OF REVENUES APPEAL IN ITA NO.5480/MUM./2008. CONSEQUENTLY, THE GROUND RAISED IN THE CROSS OBJECTION IS DISMISSED. 39. IN THE RESULT, ASSESSEES CROSS OBJECTION IS DISMIS SED. 40. NOW WE TAKE UP REVENUES APPEAL IN ITA NO.1001/MUM. /2010, FOR ASSESSMENT YEAR 2006-07. 41. GROUND NO.1 IS ON THE ISSUE OF DISALLOWANCE OF SALE S COMMISSION. THE FACTS AND ARGUMENTS BEING SIMILAR TO THE FACTS AND ARGUMENTS RAISED IN GROUND IN ASSESSMENT YEAR 2004-05, WE, CONSISTENT W ITH THE VIEW TAKEN BY US, RESTORE THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER FOR DENOVO ADJUDICATION WITH A DIRECTION THAT THE ASSESSING OF FICER SHALL EXAMINE THE VIOLATION, IF ANY, IN TERMS OF EXPLANATION-(II) TO SECTION 37(1) OF THE ACT. THIS GROUND IS, THUS, ALLOWED FOR STATISTICAL PURPOSES. 42. GROUND NO.2, IS ON THE ISSUE OF DISALLOWANCE OF SAL ES PROMOTION EXPENSES. M/S. SWATI ENERGY & PROJECTS P. LTD. 16 43. WE FIND THAT THE FACTS AND ARGUMENTS BEING IDENTICA L AS IN THE EARLIER ASSESSMENT YEARS AND SINCE THE ASSESSING OFFICER AS WELL AS THE COMMISSIONER (APPEALS) FOLLOWED THEIR OWN ORDERS FO R EARLIER ASSESSMENT YEARS, WE HAVE TO TAKE A CONSISTENT VIEW AND UPHOLD THE CONTENTIONS OF THE ASSESSEE AND DISMISS THE GROUND RAISED BY THE REVEN UE. 44. IN THE RESULT, REVENUES APPEAL IN ITA NO.1001/MUM. /2010, IS PARTLY ALLOWED. 45. TO SUM UP, REVENUES APPEAL IN ITA NO.1297/MUM./200 8, IS PARTLY ALLOWED, ASSESSEES APPEAL IN ITA NO.550/MUM./2008, IS ALLOWED, REVENUES APPEAL IN ITA NO.5480/MUM./2008, IS PARTLY ALLOWED, ASSESSEES CROSS OBJECTION NO.57/MUM./2009, IS DISMISSED AND REVENUE S APPEAL IN ITA NO.1001/MUM./2010, IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12.8.2011 SD/- D.K. AGARWAL JUDICIAL MEMBER SD/- J. SUDHAKAR REDDY ACCOUNTANT MEMBER MUMBAI, DATED: 12.8.2011 COPY TO : (1) THE ASSESSEE; (2) THE RESPONDENT; (3) THE CIT(A), MUMBAI, CONCERNED; (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, E BENCH, ITAT, MUMBAI. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY ASSISTANT REGISTRAR SR. PRIVATE SECRETARY ITAT, MUMBAI BENCHES, MUMBAI