MARVEL DRUGS P. LTD, MUMBAI V. ACIT 6(3), MUMBAI

ITA 1089/MUM/2010

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1726 (ITAT-MUMBAI)
• Duration Of Justice: 9 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Assessment Year: 2004-2005
• Appeal Filed On: 10-02-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D G
• Keywords: Business expenditure; TDS; Set aside
• Section: 40(a)(ia); 143(1); 195; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO.1089/M/2010 ASSESSMENT YEAR: 2004-05 ITA NO.1167/M/2010 ASSESSMENT YEAR: 2005-06 ITA NO.5321/M/2010 ASSESSMENT YEAR: 2006-07 M/S. MARVEL DRUGS PVT. LTD., 20 NAGIN MAHAL, 82 VEER NARIMAN POINT, CHURCHGATE, MUMBAI 400 020 PAN: AAACM4655N VS. ACIT 6(3), AAYAKAR BHAVAN, MUMBAI (APPELLANT) (R ESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI NISHANT THAKKAR, A.R. SHRI HITEN CHANDE, A.R. REVENUE BY : SHRI D.G. PANSARI, D.R. DATE OF HEARING : 21.02.2019 DATE OF PRONOUNCEMENT : 20.05.2019 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE ABOVE TITLED APPEALS HAVE BEEN PREFERRED BY TH E ASSESSEE AGAINST THE ORDER DATED 16.10.2009, 18.09. 2009 & 05.01.2011 OF THE COMMISSIONER OF INCOME TAX (APPEA LS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEARS 2004-05, 2005-06 & 2006-07 RESPECTIVELY. ITA NO.1167/M/2010 FOR A.Y. 2005-06 2. THE VARIOUS GROUNDS RAISED BY THE ASSESSEE ARE A S UNDER: ITA NO.1089/M/2010 M/S. MARVEL DRUGS PVT. LTD. 2 1. THE LEARNED CIT(A) ERRED IN HOLDING THAT TRAINING E XPENSES INCURRED ON ACCOUNT OF ABHISHEK SHAH WERE PERSONAL IN NATURE AN D THEREBY CONFIRMING THE DISALLOWANCE OF RS. 24,02,435/-. 2. THE LEARNED CIT(A) ERRED IN DISTINGUISHING THE D ECISION OF THE HON'BLE BOMBAY HIGH COURT IN CASE OF SAKAL PAPER PVT. LTD. 114 ITR 256 WITHOUT APPRECIATING THAT THE FACTS IN CASE OF YOUR APPELLA NT WERE SIMILAR TO THAT OF SAKAL PAPER PVT. LTD. 3. THE LEARNED CIT(A) ERRED IN IGNORING THE CONTRIB UTION MADE BY ABHISHEK SHAH WHILE UNDERGOING TRAINING WHICH EVIDENCES THE FACT THAT THESE EXPENSES WERE IN THE NATURE OF BUSINESS EXPENDITURE. 4. THE LEARNED CIT(A) ERRED IN HOLDING THAT AS ABHI SHEK SHAH AND BHOWLI SHAH WERE NOT CONNECTED TO THE APPELLANT EITHER AS EMPLO YEE OR AS ADVISOR, THE TRAVELING EXPENSES INCURRED BY THEM WERE NOT IN THE NATURE OF BUSINESS EXPENDITURE WITHOUT CONSIDERING THE INVITATION LETTER FROM THE BUYER CA LLING UPON ABHISHEK SHAH FOR A BUSINESS MEETING AND EXPLANATION GIVEN BY YOUR APPE LLANT AS REGARDS BHOWLI SHAH. 5. THE LEARNED CIT(A) ERRED IN HOLDING THAT FOREIGN TRAVELING EXPENSES INCURRED ON ACCOUNT OF ABHISHEK SHAH REQUIRED DEDUCTION OF T AX AT SOURCE U/S 40A (I)(A) OF THE INCOME TAX ACT AND CONSIDERED THIS AS A DEFAULT FOR THE PURPOSE OF CONFIRMING THE DISALLOWANCE. 6. THE LEARNED CIT(A) ERRED IN CONFIRMING DISALLOWA NCE OF RS. 1,33,622/- ON ACCOUNT OF FOREIGN TRAVELING EXPENSES OF ABHISHEK S HAH. 7. THE LEARNED CIT(A) ERRED IN CONFIRMING DISALLOWA NCE TO THE EXTENT OF 25% OF THE TOTAL EXPENSES INCURRED ON FOREIGN TRAVEL OF NI KHIL SHAH AND BHOWLI SHAH TO USA AMOUNTING TO RS.94,653/-. 8. THE LEARNED CIT(A) FAILED TO DEAL WITH THE DOCUM ENTS SUBMITTED BEFORE HIM WHICH CLEARLY INDICATED THAT PAYMENT MADE TO OM FRE IGHT FORWARDING LTD. WERE IN THE NATURE OF REIMBURSEMENT OF THE EXPORT FREIGHT C HARGED BY BRITISH AIRWAYS AND THESE PAYMENTS BEING MADE TO FOREIGN AIRLINES, THER E WAS NO NEED TO DEDUCT TAX AT SOURCE AS THE AIRLINES IS NOT CHARGEABLE TO TAX IN INDIA AND ERRONEOUSLY CONFIRMING DISALLOWANCE OF RS.2,27,221/-. 9. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, MODIFY OR DELETE ANY OR ALL THE AFORESAID GROUNDS OF APPEAL. 3. THE ONLY ISSUE RAISED IN GROUND NO.1 TO 5 IS AG AINST THE ORDER OF LD. CIT(A) UPHOLDING THE ORDER OF AO WHERE IN THE AO HAS DISALLOWED TRAINING EXPENSES ABROAD OF RS.24,02 ,435/- OF SHRI ABHISHEK SHAH. ITA NO.1089/M/2010 M/S. MARVEL DRUGS PVT. LTD. 3 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGA GED IN MANUFACTURING OF DRUGS AND DRUGS INTERMEDIARIES ETC . THE ASSESSEE FILED THE RETURN OF INCOME ON 30.10.2005 D ECLARING THE INCOME OF RS.1,01,23,200/- WHICH WAS PROCESSED UNDE R SECTION 143(1) OF THE ACT. THEREAFTER, THE CASE OF THE ASS ESSEE WAS SELECTED UNDER SCRUTINY AND STATUTORY NOTICES WERE ISSUED AND SERVED UPON THE ASSESSEE. DURING THE COURSE OF ASS ESSMENT PROCEEDINGS, THE AO NOTICED THAT ASSESSEE HAS DEBIT ED AN AMOUNT OF RS.24,02,435/- ON ACCOUNT OF TRAINING EXP ENSES IN THE P&L ACCOUNT UNDER THE HEAD MANUFACTURING AND OTHER EXPENSES. THE AO FURTHER NOTICED FROM THE PERUSAL OF TAX AUDIT REPORT THAT TAX AUDITOR HAS STATED IN ANNEXURE 7 IN RESPECT OF CLAUSE 18 THAT THE PAYMENT WAS COVERED UNDER SECTIO N 40A(2)(B) OF THE ACT AS MADE IN CONNECTION SPECIFIED PERSON ON ACCOUNT OF TRAINING EXPENSES OF RS.24,02,435/- OF SHRI ABHIS HEK SHAH IN FOREIGN UNIVERSITY. ACCORDINGLY, THE AO CALLED UPO N THE ASSESSEE TO FILE CERTAIN DETAILS RELATING TO SHRI ABHISHEK S HAH AS UNDER: I) MR. ABHISHEK N. SHAH IS AN EMPLOYEE OF COMPANY SINC E WHEN II) WHETHER HE IS A SHAREHOLDER IN THE COMPANY IF Y ES, EXTENT OF SHAREHOLDING III) SINCE WHEN ABHISHEK N. SHAH IS WORKING FOR THE COMPANY ALONG WITH PROVE, IN FORM OF SALARY REGISTER OR APPOINTMENT LETTER. IV) WHETHER ANY NATURE OF BOND IS TAKEN FROM ABHISH EK SHAH IF YES. COPY OF THE SAME CLEARLY GIVING THE BOUNDED PERIOD FOR WHICH MR . ABHISHEK SHAH IS AT LEAST REQUIRED WORKING WITH THE COMPANY AFTER ''COM PLETION OF TRAINING. V) COPY OF BOARD RESOLUTION FOR THE BEARING OF TRAI NING EXPENSES OF MR. ABHISHEK SHAH. VI) WHY THESE TRAINING EXPENSES SHOULD NOT BE DISAL LOWED AS PERSONAL EXPENDITURE. 5. IT WAS SUBMITTED BEFORE THE AO THAT SHRI ABHISHE K SHAH WAS APPOINTED AS DIRECTOR OF THE COMPANY W.E.F. 19. 12.2002 AND IS HOLDING 10% OF THE SHARE HOLDING OF THE COMPANY AS CORROBORATED BY THE BOARD RESOLUTION. THEREAFTER, THE AO ASKED FURTHER DETAILS FROM THE ASSESSEE ABOUT TRAINING OF MR ABHISHEK ITA NO.1089/M/2010 M/S. MARVEL DRUGS PVT. LTD. 4 SHAH IN USA QUA DETAILS OF TRAINING, NAME AND ADDR ESS OF THE INSTITUTION AND OTHER DETAILS OF FEES, TRAVELLING, VISIT TO INDIA, LODGING AND BOARDING ETC. IT WAS REPLIED BY THE ASS ESSEE VIDE WRITTEN SUBMISSION DATED 19.12.2007 WHEREIN IT WAS SUBMITTED THAT AS TO HOW THE EDUCATION AND TRAINING TAKEN BY SHRI ABHISHEK SHAH IN USA BENEFITED MARVEL DRUGS PVT. LT D. IT WAS SUBMITTED THAT SHRI ABHISHEK SHAH STUDIED IN GEORGI A TECH, USA WHERE HE BECAME PRESIDENT OF A FEW ASSOCIATION S AT UNIVERSITY AND DID COURSE IN GEORGIA TECH, USA ON T IME MANAGEMENT, EFFICIENCY MANAGEMENT, SYSTEM PLANNING, DOCUMENTATION ETC. HOWEVER, THE REPLY OF THE ASSES SEE DID NOT FIND FAVOUR WITH THE AO AND HE OBSERVED THAT SHRI A BHISHEK SHAH WAS NEITHER AN EMPLOYEE NOR WORKING WITH THE C OMPANY IN ANY CAPACITY, HE WAS JUST UNDERGRADUATE OF 19 YEAR S OF AGE AND HAD GONE TO USA FOR STUDYING CHEMICAL ENGINEERING W HICH IS NOWAY RELATED TO THE BUSINESS OF THE ASSESSEE. TH E AO OBSERVED THAT THE COURSE FOR WHICH HE HAS APPLIED WAS FOR 5- 6 YEARS BUT HE RETURNED WITHIN FOUR YEARS AND NOT SUBMITTED ANY PROOF OF COMPLETION OF STUDY WHICH IN ANY WAY WHATSOEVER WAS RELATED TO THE BUSINESS OF THE ASSESSEE. THE AO FURTHER NOTED THAT THE EXPENSES INCURRED WERE IN THE NATURE OF BOARD EXPEN SES, ATHLETIC FEES, HEALTH FEES, RECREATION FACILITY FEES, STUDEN T ACTIVITY FEES, TRANSPORTATION CHARGES, TUITION FEES, BUS FUND FEES , INSURANCE AND FOOD ETC. AND HE FINALLY ADDED THE SAID EXPENSE OF RS.24,02,435/- TO THE INCOME OF THE ASSESSEE BY HOL DING THAT THE SAME CONSTITUTES PERSONAL EXPENSES OF THE DIRECTOR SHRI NIKHIL SHAH AND SHRI ABHISHEK SHAH AND CAN NOT BE ALLOWED AS BUSINESS EXPENDITURE. ITA NO.1089/M/2010 M/S. MARVEL DRUGS PVT. LTD. 5 6. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) CON FIRMED THE DISALLOWANCE BY OBSERVING AND HOLDING AS UNDER: 2.2 I HAVE CONSIDERED THE SUBMISSIONS. THE APP ELLANT IS OWNED TO THE EXTENT TO ALMOST 80% BY THE FAMILY OF SHRI ABHISHEK SHAH. BE ING THE PROMOTER OF THE COMPANY AND MAJORITY SHAREHOLDER, THE FAMILY OF SHR I SHAH ARE IN A POSITION TO CONTROL THE AFFAIRS OF THE COMPANY IN THE MANNER OF THEIR CHOICE. SHRI ABHISHEK SHAH IS THE SON OF THE HEAD OF THE COMPANY AND A MA JOR SHARE HOLDER WHO WOULD OBVIOUSLY TAKE OVER THE APPELLANT COMPANY IN FUTURE . WITH THIS OBJECT IN VIEW, SHRI ABHISHEK WAS ENCOURAGED GET FIRST HAND EXPERIENCE O F THE WORKING OF THE COMPANY. HE STUDIED THE EXISTING PROCEDURES FOLLOWED AND MAD E INNOVATIONS. THIS WOULD BE A PART OF HIS LEARNING PROCESS. IT CANNOT BE REGAR DED AS SERVICES RENDERED BY AN EXPERT CONSULTANT IN THE FIELD FOR WHICH THE COMPAN Y WOULD SPEND A LARGE SUM OF MONEY FOR A NUMBER OF YEARS. A FEW INSTANCES OF IN VOLVEMENT WOULD NOT MAKE HIS AN EXPERT CONSULTANT FOR WHICH THE COMPANY WOULD PA Y SUCH A HUGE SUM OF MONEY. 2.3 SHRI ABHISHEK SHAH IS ONLY 19 YEARS OLD AND IS AN UNDER GRADUATE STUDENT. HOWEVER, BRILLIANT HE MAY BE, AN UNDERGRADUATE STUD ENT IS STILL NOT EXPERIENCED AND EQUIPPED WITH THE NECESSARY WHEREWITHAL TO TRANSFOR M A COMPANY AS CONTENDED BY THE APPELLANT. AN IMPORTANT THING TO NOTE IS ALSO, THE SO CALLED SITUATION FROM SANOFI SYNTHELABO IS DATED 07.09.2007 WHICH IS MUCH AFTER THE RELEVANT PREVIOUS YEAR WHICH ENDED ON 31.03.2005. BY THE TIME THIS LETTER WAS ISSUED, POSSIBLY MR. SHAH WAS ABOUT TO COMPLETE HIS GRADUATION. DURING THE PREVIOUS YEAR, SHRI SHAH WAS NOT AN EMPLOYEE OF THE COMPANY. THE APPOINTMENT OF SHR I SHAH AS A DIRECTOR IN 2002 HAS BEEN CHALLENGED BY THE A.O. AS BEING AFTER THOU GHT. THE APPELLANT HAS NOT BEEN ABLE TO DISPROVE THE ALLEGATION OF THE A.O. THAT TH E RESOLUTION OF THE BOARD WAS SUBMITTED TO THE ROC ONLY AFTER THE ISSUE HAS BEEN RAISED IN THE ASSESSMENT PROCEEDINGS. 2.4 VIEWED FROM A TECHNICAL ANGLE, THE EXPENDITU RE ON SHRI SHAH CANNOT BE TREATED AS AN EXPENDITURE ON EMPLOYEE WELFARE OR SA LARY OR BENEFITS SINCE SHRI SHAH WAS NOT AN EMPLOYEE IN THE RELEVANT PERIOD. IN THA T CASE, THE PAYMENT TO SHRI SHAH CAN ONLY BE ALLOWED IF IT IS TREATED AS PAYMENT FOR SERVICES RENDERED TO THE APPELLANT. THERE IS NO AGREEMENT BETWEEN THE APPEL LANT COMPANY AND SHRI SHAH REQUIRING HIS SERVICES AS AN EXPERT IN THE FIELD FO R IMPROVEMENT OF THE PROCEDURES AND SYSTEMS FOLLOWED BY THE COMPANY. SHRI SHAH DOE S NOT POSSESS ANY SPECIAL QUALIFICATION OR EXPERIENCE TO RENDER SUCH SERVICES . IN ANY CASE, PAYMENTS FOR SUCH SERVICES WOULD BE OF A ONE TIME NATURE FOR A PARTIC ULAR PROJECT AND NOT A CONTINUOUS EXPENDITURE RUNNING OVER A PERIOD OF YEARS WITHIN A NY LIMIT PRESCRIBED. 2.5 THE FACTS AND CIRCUMSTANCES CLEARLY SHOWS THAT THE EXPENDITURE HAS BEEN INCURRED FOR PURPOSE OTHER THAN THE PURPOSE OF BUSI NESS OF THE APPELLANT COMPANY. THE DISALLOWANCE OF THE EXPENDITURE U/S.37(1) IS TH EREFORE, HELD TO BE JUSTIFIED. 2.6 THE A.O. HAS VERY APTLY DISTINGUISHED THE DECIS IONS CITED BY THE APPELLANT IN ITS FAVOUR. IN CASE OF SAKAL PAPER P. LTD., THE P ERSON WHO WAS SENT WAS AN EMPLOYEE WHO HAD EXPERIENCE OF 5 YEARS AND WAS GOI NG ABROAD TO PURSUE A DEGREE IN JOURNALISM, WHICH WAS DIRECTLY RELEVANT TO THE C OMPANY'S BUSINESS. THE KARNATAKA HIGH COURT IN THE CASE OF R.K.K.R. STEELS P. LTD. C ITED BY THE A.O. HAS ACTUALLY COME DOWN HEAVILY ON SUCH EXPENDITURE LOADED ON A FAMILY BUSINESS OBSERVING THAT ITA NO.1089/M/2010 M/S. MARVEL DRUGS PVT. LTD. 6 EXPENDITURE WHICH A FATHER INCURS OUT OF NATURAL LO VE AND AFFECTION CANNOT BECOME A BUSINESS EXPENDITURE MERELY BECAUSE THE FATHER IS THE OWNER OF THE BUSINESS. WHILE COMING TO THE DECISION THE COURT ALSO OBSERVE D THAT THE ASSESSEE DID NOT HAVE A REGULAR SCHEME OF SENDING PEOPLE ABROAD FOR TRAINING. IN VIEW OF THE ABOVE, THE DISALLOWANCE MADE BY THE A.O. ON TRAINING EXPENSE OF DIRECTOR SHRI ABHISHEK SHAH IS CONFIRMED. 7. THE LD. A.R. VEHEMENTLY SUBMITTED BEFORE US THAT SHRI ABHISHEK SHAH WAS APPOINTED AS DIRECTOR OF THE ASSE SSEE COMPANY ON 19.12.2002 AND WAS HOLDING 10% SHARE C APITAL OF THE ASSESSEE COMPANY. THE LD. A.R. DREW ATTENTION TO THE BOARD RESOLUTION AT PAGE NO.202 OF THE PAPER BOOK, FORM N O.32 FILED WITH THE ROC AT PAGE 203 AND 204 AND COMPANY MASTER DATA FROM MCA FILED AT PAGE NO.205. THE LD. A.R. SUBMIT TED THAT SHRI ABHISHEK SHAH WAS STUDYING CHEMICAL ENGINEERIN G WHICH WAS THE LINE OF THE BUSINESS OF THE ASSESSEE BY DRA WING OUR ATTENTION TO PAGE NO.55 OF THE PAPER BOOK AND SUBMI TTED THAT THE DIRECTOR OF THE COMPANY WAS SENT ABROAD FOR DOI NG TECHNICAL COURSES WHICH WERE USEFUL TO THE BUSINESS OF THE AS SESSEE AS THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF MANUFACTURI NG OF DRUG AND DRUG INTERMEDIARIES. THE LD. A.R. SUBMITTED TH AT THE CLIENTS OF THE ASSESSEE HAVE DISAPPROVED THE COMPANYS PLA NT IN 2001 AND AGAIN IN 2007 ON MULTIPLE GROUNDS AND IT WAS ON LY FOR THAT PURPOSE SHRI ABHISHEK SHAH STARTED IMPROVING THE SY STEM, DOCUMENTATIONS, EFFICIENCY IN THE PLANT BY USING TH E KNOWLEDGE GAINED THROUGH HIS TRAINING AND EDUCATION WHICH RES ULTED IN CLIENT RESUMING THE TRADE WITH THE ASSESSEE COMPANY . A CLIENT SNOFI HAVING DISAPPROVED THE ASSESSEE AGAIN STARTED DEALING WITH THE ASSESSEE AFTER APPRECIATING THE INITIATIVES TA KEN BY THE ASSESSEE THROUGH SHRI ABHISHEL SHAH STATING IT TO B E SATISFACTORY AND THEREAFTER THE SAID CUSTOMER SNOFI AGAIN STARTE D PURCHASING THE GOODS MANUFACTURED BY THE COMPANY. THE LD. A.R . ITA NO.1089/M/2010 M/S. MARVEL DRUGS PVT. LTD. 7 SUBMITTED THAT THE SAID CUSTOMER USED TO PURCHASE 70% OF THE PRODUCTION OF THE COMPANY. THE LD. A.R. ALSO SUBMI TTED THAT THE ASSESSEE RECEIVED FIRST ISO 9001-2000 CERTIFICA TION AND WAS NOW IN THE PROCESS OF OBTAINING CERTIFICATION FOR S ERVICES FOR WHO-GMP & EDMF. THE LD. A.R. ALSO BROUGHT TO OUR N OTICE THE VARIOUS DEFICIENCIES POINTED OUT BY MAIN CUSTOMER S NOFI BY REFERRING TO PAGE NO.9 OF THE PAPER BOOK WHEREIN IN THE AUDIT REPORT DATED 13.07.2001 IT WAS POINTED OUT THAT NUM EROUS FAILURES REGARDING GMP REQUIREMENTS HAVE BEEN NOTED DURING AUDIT WHICH INCLUDED MANUFACTURING QUALITY SYSTEM, LACK OF DOCUMENTATIONS AND QUALITY CONTROL ETC. IT WAS AL SO STATED THAT THIS SHOWED THAT THE ASSESSEE WAS NOT COMPLYING WI TH THE REGULATIONS AND NOT APPROVED FOR SUPPLYING DRUGS TO SNOFI. THE LD. A.R. SUBMITTED THAT AO HAS ACCEPTED THAT SHRI A BHISHEK SHAH JOINED THE ASSESSEE BACK IN AUGUST 2006 ONWARD AND CONTINUED TO WORK WITH THE ASSESSEE. IN THE ASSESS MENT PROCEEDINGS THE AO AFTER SPECIFICALLY RAISED A QUER Y ON TRAINING EXPENSES WHICH WAS REPLIED BY THE ASSESSEE AND TH E AO ALLOWED THE TRAINING EXPENSES OF RS.15.25 LAKHS INC URRED ON THE TRAINING OF SHRI ABHISHEK SHAH. THE LD. A.R. SUBMI TTED THAT ALL THESE EXPENSES WERE ALLOWABLE EXPENSES UNDER SECTIO N 37 OF THE ACT AS WHOLLY AND EXCLUSIVELY INCURRED IN CONNECTIO N WITH THE BUSINESS OF THE ASSESSEE. IN DEFENCE OF HIS ARGUME NT, THE LD. D.R., RELIED ON A SERIES OF DECISIONS AS UNDER: 1. CIT VS. KOHINOOR PAPER (1997) 92 TAXMAN 316 ( MP) 2. ASWATHANARAYANA & ESWARA VS. DCIT (2018) 97 TAXMAN.COM 572 (MAD) 3. CIT VS. RAS INFORMATION (2011) 200 TAXMAN 305 (KAR) 4. SAKAL PAPERS LTD. VS. CIT 114 ITR 256 (BOM) ITA NO.1089/M/2010 M/S. MARVEL DRUGS PVT. LTD. 8 THE LD. A.R. ALSO TRIED TO DISTINGUISH THE CASES RELIED UPON BY THE AO WHILE MAKING THE ADDITION. THE LD. A.R. FINALLY SUBMITTED BEFORE THE BENCH THAT IN VIEW OF THE FORE GOING SUBMISSIONS AND THE RATIO LAID DOWN BY THE TRIBUNAL S, HIGH COURTS, THE TRAINING EXPENSES MAY BE ALLOWED BY SET TING ASIDE THE ORDER OF LD. CIT(A). 8. THE LD. D.R., ON THE OTHER HAND, RELIED HEAVILY ON THE ORDER OF AUTHORITIES BELOW BY SUBMITTING THAT THE ASSESSE E HAS INCURRED EXPENSES ON TRAINING AND TRAVELLING ABROAD ON SHRI ABHISHEK SHAH WHO WAS A RELATED PARTY AND WHO WENT ABROAD FOR DOING CHEMICAL ENGINEERING WHICH IN NO WAY CONN ECTED TO THE BUSINESS OF THE ASSESSEE OF MANUFACTURING OF DRUGS AND DRUGS INTERMEDIARIES. THE LD. D.R. SUBMITTED THAT THE AS SESSEE HAS INCURRED ALL THESE EXPENSES WHICH ARE OF PERSONAL I N NATURE AND CHARGED THESE TO THE PROFIT & LOSS ACCOUNT ONLY TO REDUCE THE PROFITS OF THE ASSESSEE COMPANY TO AVOID TAX LIABIL ITY AND THEREFORE SAME ARE NOT ALLOWABLE AS BUSINESS EXPENS E. THE LD DR SUBMITTED THAT ORDER OF LD. CIT(A) MAY BE AFFIRMED BY DISMISSING THE APPEAL OF THE ASSESSEE FOR THE REASO NS THAT PERSONAL EXPENSES WERE CHARGED AGAINST THE BUSINESS WHICH IS NOT PERMISSIBLE. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WE OBSERVE THAT IN THIS CASE SHRI ABHISHEK SHAH WENT ABROAD WHEN HE WAS 18 YEARS OF AGE AND HE DID STUDIES IN CHEMICAL ENGINEERING. THE AL LEGATION OF THE AUTHORITIES BELOW ARE THAT THE LINE OF STUDY WH ICH HE ACCOMPLISHED ABROAD IS NOT CONNECTED WITH THE BUSIN ESS OF THE ASSESSEE AND THE EXPENSES INCURRED ON TRAINING AND TRAVELLING ITA NO.1089/M/2010 M/S. MARVEL DRUGS PVT. LTD. 9 ABROAD WERE PURELY OF PERSONAL IN NATURE. HOWEVER, WE FIND FROM THE RECORDS BEFORE US INCLUDING THE BOARD RESOLUTIO N FORM NO.32, COMPANY MASTER DATA, SNOFI REPORT WHO IS A MAJOR CU STOMER OF THE ASSESSEE AND VARIOUS OTHER DOCUMENTS THAT SHRI ABHISHEK SHAH AFTER HAVING STUDIED ABROAD AND AFTER ACCOMPL ISHING HIS TRAINING REJOINED THE ASSESSEE IN AUGUST 2006. THE REAFTER, AS RECORDS REVEALED SHRI ABHISHEK SHAH CARRIED OUT A N UMBER OF IMPROVISATIONS IN THE COMPANY AND THE CUSTOMER WHO HAVE LEFT THE COMPANY FOR VARIOUS DEFECTS AND DEFICIENCIES IN THE SYSTEM, DOCUMENTATION, AND QUALITY CONTROL STARTED PROCURIN G THE MATERIAL FROM THE COMPANY. WE FURTHER NOTE THAT I N A.Y. 2003- 04, THE AO ALLOWED SUCH EXPENSES AFTER MAKING A SPE CIFIC QUERY AND AFTER TAKING INTO ACCOUNT THE EXPLANATION OF TH E ASSESSEE. SIMILARLY, THE EXPENSES OF TRAVEL OF SHRI ABHISHEK SHAH TO UK AND INDONESIA WERE ALLOWED BY THE ASSESSEE IN THE A SSESSMENT ORDER FOR A.Y. 2003-04. WE FURTHER NOTE THAT WHILE SHRI ABHISHEK SHAH WAS STUDYING ABROAD, HE WAS ASSOCIATE D WITH THE ASSESSEE COMPANY AND ATTENDING VARIOUS BUSINESS MEE TINGS , CONFERENCES AND WAS PROCURING ORDERS FROM ABROAD AN D THEREFORE WE ARE NOT IN AGREEMENT WITH THE CONCLUSION DRAWN B Y THE LD. CIT(A) THAT EXPENSES INCURRED ON TRAINING ABROAD AR E OF PERSONAL IN NATURE. WE HAVE ALSO PERUSED THE CASE LAWS RELI ED UPON BY THE LD. A.R. AND OBSERVED THAT THE CASE OF THE ASSE SSEE IS SQUARELY COVERED UNDER THE SIMILAR FACTS IN FAVOUR OF THE ASSESSEE. IN THE CASE CIT VS KOHINOOR PAPER PRODUCT S (SUPRA ) THE MADHYA PRADESH HIGH COURT HAS AFFIRMED THE ORDE R OF THE TRIBUNAL WHEREIN THE COORDINATE BENCH HAS HELD THAT WHERE THE HIGHER EDUCATION AND EXPERIENCE GAINED BY THE PARTN ER PROVED BENEFICIAL TO THE FIRM AND THE SUBSEQUENT EVENTS ES TABLISHED THAT THE INTENTION AND PURPOSE OF SENDING ABROAD IS TO RETURN WITH ITA NO.1089/M/2010 M/S. MARVEL DRUGS PVT. LTD. 10 BETTER EDUCATION AND EXPERIENCE AND THE BUSINESS OF THE FIRMS IS BENEFITTED THEN THE EXPENSES ARE ALLOWABLE. SIMILAR RATIOS HAVE BEEN LAID IN THE OTHER DECISIONS. THE CASE LAWS AS RELIED UPON BY THE LD. A.R. HAVE BEEN DISTINGUISHED BY THE LD. A.R . AND WE OBSERVE THAT SAME ARE NOT APPLICABLE TO THE PRESENT CASE. ACCORDINGLY, WE HOLD THAT THE TRAINING EXPENSES OF MR ABHISHEK SHAH ARE ALLOWABLE EXPENSES. THE ORDER OF THE LD. CIT(A) IS SET ASIDE AND THE AO IS DIRECTED TO ALLOW THE EXPENSES. 10. THE ISSUE IN GROUND NO.6 IS AGAINST THE CONFIRM ATION OF DISALLOWANCE OF RS.1,33,622/- ON ACCOUNT OF FOREIGN TRAVELLING EXPENSES ON SHRI ABHISHEK SHAH. 11. SINCE WE HAVE ALREADY DECIDED THE ISSUE IN FAVO UR OF THE ASSESSEE BY HOLDING THAT THE EXPENSES ON TRAINING I NCURRED BY THE ASSESSEE ON SHRI ABHISHEK SHAH ABROAD IS A BUSI NESS EXPENDITURE. THEREFORE, OUR DECISION WOULD APPLY M UTATIS MUTANDIS TO THIS GROUND ALSO. ACCORDINGLY, WE DIRE CT THE AO TO ALLOW THE FOREIGN TRAVELLING EXPENSES OF RS. 1,33,6 22/- OF SHRI ABHISHEK SHAH. 12. THE ISSUE RAISED IN GROUND NO.7 IS NOT PRESSED AT THE TIME OF HEARING. THEREFORE, THE SAME IS DISMISSED AS NO T PRESSED. 13. THE ISSUE RAISED IN GROUND NO.8 IS AGAINST THE CONFIRMATION OF DISALLOWANCE BY LD. CIT(A) OF RS.2,27,221/- AS M ADE BY THE AO QUA THE EXPORT FREIGHT TO BRITISH AIRWAYS FOR NO N DEDUCTION OF TAX AT SOURCE. 14. THE FACTS IN BRIEF ARE THAT AO DURING THE COURS E OF ASSESSMENT PROCEEDINGS OBSERVED THAT ASSESSEE HAS P AID AN ITA NO.1089/M/2010 M/S. MARVEL DRUGS PVT. LTD. 11 AMOUNT OF RS.2,27,221/- FOR EXPORT CLAIM CHARGES TO M/S. OM FREIGHT FORWARDING LTD. AND NO TDS WAS DEDUCTED BY THE ASSESSEE AND ACCORDINGLY A SHOW CAUSE NOTICE WAS IS SUED AS TO WHY THE SAME SHOULD NOT BE DISALLOWED UNDER SECTION 40(A)(IA) OF THE ACT WHICH WAS NOT REPLIED BY THE ASSESSEE. THE AO AFTER CONSIDERING THE REPLY OF THE ASSESSEE DISALLOWED T HE SAID AMOUNT UNDER SECTION 40(A)(IA) OF THE ACT AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 15. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) AL SO CONFIRMED THE ORDER OF AO BY HOLDING THAT THE ASSESSEE HAS NO T SUPPLIED THE BREAK UP OF THE EXPENSES INCURRED WITH SUPPORTI NG DOCUMENTS, BILLS AND VOUCHERS AND THUS JUSTIFIED TH E ADDITIONS. 16. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT THE ASSESSEE HAS MADE PAYME NT OF FREIGHT TO M/S. OM FREIGHT FORWARDING LTD. WHO IS A N AGENT OF BRITISH AIRWAYS WHICH IS HIRED BY THE ASSESSEE TO T RANSPORT THE CARGO. WE HAVE EXAMINED THE LEDGER ACCOUNTS OPENED IN THE NAME OF M/S. OM FREIGHT FORWARDING LTD. IN THE BOOK S OF THE ASSESSEE AS THE INVOICE WAS RECEIVED FROM THE SAID PARTY, HOWEVER, THE INVOICES BACKED BY AN AIRWAYS BILL O F BRITISH AIRWAYS, COPIES OF WHICH ARE PLACED ON PAGE NO.58 & 59. WE FIND MERIT IN THE CONTENTIONS OF THE LD. A.R. THAT THIS IS JUST A PAYMENT TO THE NON RESIDENT THROUGH AGENT M/S. OM F REIGHT FORWARDING LTD. AND THEREFORE THE SAME IS NOT LIABL E FOR TDS AT SOURCE. THE CASE OF THE ASSESSEE IS SQUARELY COVER ED BY THE RATIO LAID DOWN IN THE CASE OF TAB LEATHER WORKS VS. ACIT 23 TAXMANN.COM 58 (KOL). THE OPERATIVE PART OF THE DEC ISION IS AS UNDER:- ITA NO.1089/M/2010 M/S. MARVEL DRUGS PVT. LTD. 12 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS ALSO THE A PPLICABLE LEGAL POSITION. 6. IT IS AN ADMITTED POSITION THAT SO FAR AS THE AI RFREIGHT IS CONCERNED, IT IS PAID TO THE AGENTS ON THE ACTUAL BASIS AND THAT THE BILLS AND A IRFREIGHT DOCUMENTS HAVE BEEN DIRECTLY ISSUED TO THE FOREIGN AIRLINES. PDP AND DH L, WHILE ACCEPTING PAYMENTS FOR AIRFREIGHT COMPONENTS, HAVE ACTED MERELY AS AGENTS OF THE RESPECTIVE AIRLINES AND HAVE NOT RECEIVED THE AIRFREIGHT PAYMENTS IN THEIR OWN RIGHT. IN COPIES OF AIRWAY BILLS, WHICH HAVE BEEN FILED BEFORE US IN THE PAPER BOOK, THE NAME OF THES E AGENTS IS SHOWN AS 'ISSUING CARRIER'S AGENT AND THE CITY' AS ALSO THE AGENT'S CODE IS GIVEN AS 'AGENT'S IATA CODE'. THERE IS THUS ENOUGH MATERIAL TO DEMONSTRATE THAT TH E PERSONS HAVING RECEIVED MONEY FOR THE AIRFREIGHT HA VE RECEIVED THE SAME IN THEIR CAPACITY AS 'ISSUING CARRIER'S AGENT' I.E. AGENT OF THE AIRLINE CONCERNED. THE AIRFREIGHT PAYMENT IS THUS MADE TO THE FOREIGN AIRL INES, NAMELY SIA, EMIRATES, BRITISH AIRWAY S AND LUFTHANSA - THOUGH THROUGH THE AGENT, I.E. PDP AND DHL ETC. 7. IN VIEW OF THE ABOVE DISCUSSIONS, IN OUR CONSIDE RED BVIEW , THE PAYMENTS CANNOT BE SAID TO HAVE BEEN MADE TO A RESIDENT COMPANY , A ND, ACCORDINGLY, THE PROVISIONS OF SECTION 194 C , WHICH APPLY ONLY ON THE RESIDENT RECIPIENTS, DONOT COME INTO PLAY. 8. AS FOR THE STAND THAT THE ASSESSEE SHOULD HAVE M OVED THE APPLICATION UNDER SECTION 195(2) IN CASE OF PAYMENTS TO NON RESIDENTS AND ASSESSEE' S FAILURE TO DO SO IS TO BE VISITED WITH CONSEQUE NCES FOR NON D EDUCTION AT SOURCE, THE LAW IS NOW SETTLED BY HON'BLE SUPREME COURT IN THE CASE OF GE INDIA TECHNOLOGY CENTRE PVT LTD VS CIT (327 ITR 456) WHEREIN THEIR LORDSHIP S HAVE CATEGORICALLY HELD THAT, ' WHERE A PERSON RESPONSIBLE FOR DEDUCTION IS FAIR LY CERTAIN, THEN HE CAN MAKE HIS OWN DETERMINATION AS TO WHETHER THE TAX WAS DEDUCTI BLE AT SOURCE AND, IF SO, WHAT SHOULD BE THE AMOUNT THEREOF '. THE PLEA OF THE REV ENUE AUTHORITIES TO THE EFFECT THAT WHERE THE ASSESSEE DOES NOT MOVE AN APPLICATIO N UNDER S ECTION 195(2) AND MAKES THE REMITTANCE WITHOUT DEDUCTION OF TAX AT SO URCE, THE ASSESSEE SHOULD BE VISITED WITH CONSEQUENCES FOR NON DEDUCTION OF TAX AT SOURCE, WHICH WAS ACCEPTED BY HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS SAMSUNG ELECTRONIC CO LTD ( 320 ITR 209), WAS CATEGORICALLY REJECTED BY THEIR L ORDSHIPS, AND THEIR LORDSHIPS OBSERVED AS FOLLOWS: IN OUR VIEW, SECTION 195(2) IS BASED ON THE 'PRINCIPLE OF PROPORTIONALITY'. THE SAID SUB -SECTION GETS ATTRACTED ONLY IN CASES WHERE THE PAYMENT MA DE IS A COMPOSITE PAYMENT IN WHICH A CERTAIN PROPORTIO N OF PAYMENT HAS AN ELEMENT OF 'INCOME' CHARGEABLE TO TAX IN INDIA. IT IS IN THIS CONTEXT THAT THE SUPREME COURT STATED, 'IF NO SUCH APPLICATION IS FI LED, INCOME -TAX ON SUCH SUM IS TO BE DEDUCTED AND IT IS THE STATUTORY OBLIG ATION OF THE PERSON RESPONSIBLE FOR PAYING SUCH 'SUM' TO DEDUCT TAX THE REON BEFORE MAKING PAYMENT. HE HAS TO DISCHARGE THE OBLIGATION TO TDS' . IF ONE READS THE OBSERVATION OF THE SUPREME COURT, THE WORDS 'SUCH S UM' CLEARLY INDICATE T HAT THE OBSERVATION REFERS TO A CASE OF COMPOSITE P AYMENT WHERE THE PAYER HAS A DOUBT REGARDING THE INCLUSION OF AN AMOUNT IN SUCH PAYMENT WHICH IS EXIGIBLE TO TAX IN INDIA. IN OUR VIEW, THE ABOVE OB SERVATIONS OF THIS COURT IN TRANSMISSION CORPN. OF A.P. L TD.'S CASE (SUPRA) WH ICH IS PUT IN ITALICS HAS BEEN COMPLETELY, WITH RESPECT, MISUNDERSTOOD BY THE KARNATAKA HIGH COURT ITA NO.1089/M/2010 M/S. MARVEL DRUGS PVT. LTD. 13 TO MEAN THAT IT IS NOT OPEN FOR THE PAYER TO CONTEN D THAT IF THE AMOUNT PAID BY HIM TO THE NON-RESIDENT IS NOT AT ALL 'CHARGEABL E TO TAX IN INDIA', THEN NO TAS IS REQUIRED TO BE DEDUCTED FROM SUCH PAYMENT. T HIS INTERPRETATION OF THE HIGH COURT COMPLETELY LOSES SIGHT OF THE PLAIN WORDS OF SECTION 195(1) WHICH IN CLEAR TERMS LAYS DOWN THAT TAX AT SOURCE I S DEDUCTIBLE ONLY FROM 'SUMS CHARGEAB LE' UNDER THE PROVISIONS OF THE INCOME -TAX ACT, I.E., CHARGEABLE UNDER SECTIONS 4 , 5 AND 9 OF THE INCOME -TAX ACT. 9. WE HAVE ALSO NOTED THAT IT IS NOT EVEN THE REVEN UE'S CASE THAT THE AMOUNTS PAID TO FOREIGN AIRLINES, ON ACCOUNT OF AIRFREIGHT PAYME NTS, ARE TAXABLE IN INDIA, AND QUITE RIGHTLY SO, BECAUSE, AS THE PROVISIONS OF ALL THE R ESPECTIVE TAX TREATIES CLEARLY PROVIDE , THE PROFITS FROM OPERATIONS OF SHIPS AND AIRCRAFT S IN THE INTERNATIONAL TRAFFIC ARE TAXABLE ONLY IN THE STATE IN WHICH THE RESPECTIVE E N TERPRISE ARE FISCALLY DOMICILED AND NOT IN THE SOURCE STATE. THIS RULE, HOWSOEVER D EVOID OF PARADIGM JUSTIFICATION AS IT MAY APPEAR TO MANY OF US, IS ONE OF THE FUNDAMEN TAL RULES FOLLOWED IN ALMOST ALL THE TAX TREATIES AND OUR TAX TREATIES WITH UK, UAE, SI NGAPORE AND GERMANY ARE NO EXCEPTION TO THIS GENERAL RULE. IT IS ONLY ELEMENTA RY THAT A TAX DEDUCTION AT SOURCE UNDER SECTION 195 IS ONLY A VICARIOUS LIABILITY INASMUCH AS WHEN REC IPIENT S OF INCOME, I.E. THE AIRLINES CONCERNED, HAVE NO PRIMAR Y LIABILITY TO PAY TAX, THERE CANNOT BE ANY VICARIOUS LIABILITY TO DEDUCT TAX FRO M PAYMENTS IN WHICH SUCH INCOME IS EMBEDDED. 10. IN VIEW OF THE ABOVE DISCUSSIONS AS ALSO BEARIN G IN MIND ENTIRETY OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE DID NO T HA VE ANY OBLIGATIONS TO DEDUCT TAX AT SOURCE - WHETHER UNDER SECTION 194 C OR UNDE R SECTION 195 - FROM PAYMENTS MADE TO THE FOREIGN AIRLINES FOR AIRFREIGHT. IN THI S VIEW OF THE MATTER, THE IMPUGNED DISALLOWANCES UNDER SECTION 40(A)(IA) ARE DEVOID OF ANY MERI TS, NOR CAN THESE DISALLOWANCES BE MADE UNDER SECTION 40(A)(I) EITHER - AS ALTERNATIVELY SUGGESTED BY THE AUTHORITIES BELOW. WE, ACCORDINGLY, DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED DISALLOWANCES. THE ASSESSEE GETS THE RELIE F ACCORDINGLY. 11. IN THE RESULT, THE APPEALS ARE ALLOWED IN THE T ERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT TODAY ON 31 S T DAY OF MAY 2012. THE FACTS OF THIS CASE ARE MATERIALLY SIMILAR TO ON E AS CITED ABOVE WE, THEREFORE, RESPECTFULLY FOLLOWING THE RATIO LA ID DOWN IN THE ABOVE DECISION, DIRECT THE AO TO DELETE THE DISALLO WANCE. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ITA NO.1089/M/2010 (A.Y. 2004-05) 19. THE GROUND NO.1 IS NOT PRESSED AND DISMISSED AC CORDINGLY. 20. THE SECOND GROUND WHICH IS WITHOUT PREJUDICE AN D THE ISSUE IS IDENTICAL TO ONE AS DECIDED BY US IN GROUN D NO.1 TO 5 IN ITA NO.1089/M/2010 M/S. MARVEL DRUGS PVT. LTD. 14 ITA NO.1167/M/2010. THEREFORE, OUR ABOVE DECISION IN ITA NO.1167/M/2010 WOULD, MUTATIS MUTANDIS, APPLY TO TH IS APPEAL AS WELL. ACCORDINGLY, THE AO IS DIRECTED TO ALLOW THE EXPENSES OF TRAINING EXPENSES OF RS.17,31,831/-. 21. APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO.5321/M/2011 (A.Y. 2006-07) 22. THE ISSUE RAISED IN GROUND NOS.1 TO 4 ARE IDENT ICAL TO ONE AS DECIDED BY US IN ITA NO.1167/M/2010 IN GROUND NO .1 TO 6 WHICH HAVE BEEN ALLOWED IN FAVOUR OF THE ASSESSEE. ACCORDINGLY, WE DIRECT THE AO TO ALLOW THESE EXPENSES ON TRAININ G AND TRAVELLING EXPENSES IN VIEW OF OUR OWN DECISION IN ITA NO.1167/M/2010. 23. GROUND NO.5 IS NOT PRESSED AND ACCORDINGLY THE SAME IS DISMISSED. 24. THE ISSUE RAISED IN GROUND NO.6 IS IDENTICAL TO ONE AS DECIDED BY US IN GROUND NO.2 IN ITA NO.1089/M/2010 A.Y. 2004-05 WHICH HAS BEEN ALLOWED IN FAVOUR OF THE ASS ESSEE. WE, THEREFORE, IN VIEW OF OUR OWN DECISION ON GROUND N O.2 IN ITA NO.1089/M/2010 A.Y. 2004-05 DIRECT THE AO TO DELETE THE DISALLOWANCE. 25. THE ISSUE RAISED IN GROUND NO.7 IS AGAINST THE ORDER OF LD. CIT(A) CONFIRMING THE ADDITION OF RS.4,77,961/- UPH OLDING THE ORDER OF AO WHICH WAS ON ACCOUNT OF DIFFERENCE BETW EEN THE BALANCE AS PER THE ACCOUNTS OF THE ASSESSEE AND A C IVIL CONTRACTOR JAES CONSTRUCTION AND GROUND NO.8 IS IN RESPECT OF ORDER OF LD. CIT(A) NOT DECIDING THE ISSUE RAISED I N GROUND NO.4 ITA NO.1089/M/2010 M/S. MARVEL DRUGS PVT. LTD. 15 QUA DISALLOWANCE OF RS.3,71,430/- IN RESPECT OF REP AIR AND MAINTENANCE BY CONSIDERING THE SAME AS CAPITAL EXPE NDITURE. 26. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT THE LD. CIT(A) HAS NOT DECI DED THE ISSUE RAISED IN GROUND NO.7 & 8 AND WE ARE OF THE VIEW TH AT THE SAME NEED TO BE RESTORED TO THE FILE OF THE LD. CIT(A) T O BE DECIDED AS PER FACTS AND LAW AFTER AFFORDING A REASONABLE OPPO RTUNITY OF HEARING TO THE ASSESSEE. ACCORDINGLY, WE RESTORE T HE ISSUES IN GROUND NO.7 & 8 TO THE FILE OF THE LD. CIT(A) TO DE CIDE THE SAME AFRESH. 27. IN THE RESULT, ALL THE THREE APPEALS OF THE ASS ESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20.05.2019. SD/- SD/- ( RAM LAL NEGI) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 20.05.2019. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASS TT. REGISTRAR, ITAT, MUMBAI.