Semco Electric P. Ltd, Pune V. ACIT, Pune

ITA 114/PUN/2013

• Counselvise Citation: 11424514 RSA 2013
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 11-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VERMA
• Keywords: Transfer pricing; Business expenditure; Opportunity of being heard; Commercial expediency
• Section: 14A; 37(1); 10B; 37; 10; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 114/PN/2013 (ASSESSMENT YEAR 2008-09) SEMCO ELECTRIC PVT. LTD., 154/1, 155 MAHALUNGE VILLAGE, POST CHAKAN, CHAKAN TALEGAON ROAD, CHAKAN, DIST PUNE-410501, .. APPELLANT PAN NO.AADCS9493H VS. ACIT, CIRCLE-10, PUNE .. RESPONDENT ASSESSEE BY : SHRI SHARAD SHAH REVENUE BY : SMT. M.S. VERMA DATE OF HEARING : 05-09-2014 DATE OF PRONOUNCEMENT : 12-09-2014 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER PASSED U/S.143(3) R.W.S.144C(13) OF THE I.T. ACT FO R THE ASSESSMENT YEAR 2008-09. 2. GROUND OF APPEAL NO.1 BY THE ASSESSEE READS AS U NDER : 1.1 THE DRP ERRED IN DIRECTING THE AO AND THE AO ERRED IN TREATING THE ENTIRE EXPENDITURE OF SPECIAL BONUS CLAIMED BY T HE ASSESSEE COMPANY AMOUNTING TO RS. 18,45,25,000/- AS INADMISSI BLE AS PER THE PROVISIONS OF SECTION 37(1) OF THE INCOME TAX ACT, 1961 1.2 THE DRP ERRED IN NOT CONSIDERING THE EXPENDITURE BY WAY OF SPECIAL BONUS AMOUNTING TO RS.18,45,25,000/-, THOUGH E XTRA ORDINARY IN NATURE, IS AN EXPENDITURE ALLOWABLE U/S. 37. 2 2.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SEE, SEMCO ELECTRIC PVT. LTD. WAS INCORPORATED ON 19-08-1996 AND IS ENG AGED IN THE BUSINESS OF MANUFACTURE AND SALE OF ELECTRIC WIRING ACCESSORIES OF ZINC, ALUMINIUM AND COPPER ALLOYS. SEMCO IS REGIST ERED AS A 100% EXPORT ORIENTED UNIT CLAIMING A TAX HOLIDAY U/S.10B OF THE I.T.ACT, 1961. IT HAD SOLD MORE THAN 96% OF ITS PRODUCTION TO ITS ASSOCIATED ENTERPRISE (AE) SIGMA ELECTRIC MANUFACTURING CORPOR ATION (SIGMA). SIGMA IS A TAX RESIDENT OF USA AND IS ENGAGED IN TH E BUSINESS OF DISTRIBUTION OF ELECTRICAL WIRING ACCESSORIES. IT SELLS CUSTOMIZED AND NON STANDARD PRODUCTS WHICH ARE MANUFACTURED BY SEM CO AND SOLD TO SIGMA. SIGMA SERVES CUSTOMERS IN THE AMERICAN MARK ET VIZ., USA, CANADA, SOUTH AMERICA AND MEXICO. 2.2 THE ASSESSEE FILED ITS RETURN OF INCOME ON 26-0 9-2008 DECLARING TOTAL INCOME OF RS.17,55,50,720/-. DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER OBSERV ED FROM THE DETAILS FILED BY THE ASSESSEE THAT DURING THE YEAR UNDER CONSIDERATION GOLDMAN SACHS CAPITAL PARTNER VI FUND (GSCP FUND), A PRIVATE EQUITY FUND, ACQUIRED THE MAJORITY EQUITY STAKE IN SEMCO FROM SAJJAN KUMAR AGARWAL AND OTHERS. POST ACQUISITION AND SUBS EQUENT TO THE CHANGE IN THE CORPORATE STRUCTURE, SEMCO BECAME A W HOLLY OWNED SUBSIDIARY OF MAURITIUS-BASED COMPANY SIGMA ELECTRI C HOLDING INC. (FORMERLY SEMCO HOLDING INC) MAURITIUS. THE AO NOTI CED THAT BECAUSE OF THE CHANGE IN THE STAKE HOLDERS THE COMP ANY CLAIMED TO HAVE GIVEN SPECIAL BONUS TO SOME OF ITS EMPLOYEES A MOUNTING TO RS.18,45,25,000/-. 3 2.3 TO VERIFY THE FACTS OF THE CASE THE ASSESSING O FFICER ASKED THE ASSESSEE TO FURNISH THE FOLLOWING DETAILS : I. THE BASIS OF COMPUTATION OF BONUS AND THE PAYMENT MADE. II. WHETHER IT PERTAINS TO THE YEAR UNDER CONS IDERATION, IF NOT, PLEASE FURNISH THE YEARS ALONG WITH SUPPORTING EVID ENCES. III. ALSO, EXPLAIN HOW THE ABOVE EXPENDITURE IS ALLOWABLE UNDER SECTION 37(1) OF THE INCOME TAX, ACT. 2.4 IN RESPONSE TO THE SAME THE ASSESSEE JUSTIFIED THE PAYMENT OF SPECIAL BONUS BY GIVING THE FOLLOWING REPLY WHICH H AS BEEN REPRODUCED BY THE ASSESSING OFFICER IN THE BODY OF THE ASSESSMENT ORDER AND WHICH READS AS UNDER : 'DURING THE YEAR ENDED MARCH 31, 2008 THE COMPANY H AD DECLARED AND PAID A SPECIAL BONUS OF RS. 1845.25 LACS. THIS BONUS WAS PAID IN PURSUANCE WITH THE ACQUISITION OF THE MAJORITY STAKE O F THE COMPANY BY THE GSCP FUND VI. THE BOARD RESOLUTION APPROVING THE SPECIAL BONUS PAYMENT CLEARLY SPELLS OUT THE PURPOSE FOR DECLAR ATION OF BONUS. THIS BONUS WAS PAID OVER AND ABOVE THE REGULAR BONUS WH ICH IS PAID BASED THE PERFORMANCE OF THE COMPANY AND INDIVIDUAL EMPLOYEE. THE SPECIAL BONUS WAS PAID ONLY TO THE SELECTED PEOPLE AND AMOUNT WERE DETERMINED BY THE DIRECTORS BASED ON VARIOUS CRIT ERIA VIZ. NUMBER OF YEARS SPEND BY THEM WITH COMPANY, DESIGNATIO N AND THE CURRENT ETC ETC., THE DETAILS OF THE BONUS HAS BEEN EN CLOSED IN APPENDIX A. THE SPECIAL BONUS WAS PAID IN ORDER TO RETAIN THE KEY PEOPLE WITH THE COMPANY. THE EXPENDITURE IS ALLOWABLE UNDER SECTION 37 AS IT NE ITHER IS PERSONAL NOR CAPITAL IN NATURE. FURTHER, IT IS PURELY IN THE COURSE OF BUSINESS AND FROM COMMERCIAL EXPEDIENCY. IT IS SUPPORTED BY THE SUPREME COURT DECISION OF CIT VS WALCHAND & CO. PVT. L TD 65 ITR 381 AND J L WOOLER MANUFACTURING VS CIT 72 ITR 612.' 3. HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE. ON BEING ASKED BY THE ASSESSING OFFICER THE ASSESSEE FILED THE BOARD RESOLUTION DEC LARING THE SPECIAL 4 BONUS. THE ASSESSING OFFICER OBSERVED FROM THE SAM E THAT THE RESOLUTIONS ARE PASSED ON TWO DIFFERENT DATES FOR D IFFERENT AMOUNTS (A) ONE BEFORE THE DATE OF TRANSFER OF SHARES, I.E. 14-10-2007 WHEREIN PAYMENT IS SAID TO BE IN US DOLLAR 2 MILLIONS (B) T HE SECOND RESOLUTION IS DATED 12-01-2008 WHERE THE AMOUNT IS RAISED TO US$ 4.71 MILLIONS, I.E. RS.18.50 CRORES (@39.30 PER DOL LAR) BY RESOLUTION PASSED AT THE BOARD MEETING HELD ON 02-12-2008, I.E . AFTER THE CHANGE OF THE STAKE HOLDERS PAYABLE AT ANY TIME ON OR BEFO RE 31-03-2008. THE ASSESSING OFFICER OBSERVED FROM THE ABOVE RESOL UTIONS THAT THE AMOUNTS OF THE BONUS HAS BEEN CHANGED BEFORE AND AF TER THE CHANGE OF STAKE HOLDERS. HE, THEREFORE, CONCLUDED THAT TH E BONUS IS NOT THE LIABILITY OF THE COMPANY BUT THAT OF THE SHAREHOLDE RS WHETHER OLD OR NEW OR BOTH AND THEREFORE NOT AN ALLOWABLE BUSINESS EXPENDITURE OF THE ASSESSEE COMPANY. HE, THEREFORE, AGAIN ASKED T HE ASSESSEE TO JUSTIFY THE SAME AND EXPLAIN AS TO WHY THE EXPENSE S INCURRED AS SPECIAL BONUS PAID TO EMPLOYEES SHOULD NOT BE TREAT ED AS EXPENSES OF THE SHAREHOLDERS, I.E. PAID ON BEHALF OF THE SHARE HOLDERS AND THEREFORE NOT AN ALLOWABLE EXPENDITURE U/S.37 OF TH E I.T. ACT. HE ALSO ASKED THE ASSESSEE TO SUBMIT THE COPY OF THE ENTIRE SET OF SHARE ACQUISITION AGREEMENT TITLED ACQUISITION OF SIGMA ELECTRIC GROUP BY GS CAPITAL PARTNERS VI FROM SAJJAN KUMAR AGARWAL AN D OTHERS SELLING SHAREHOLDERS. REJECTING THE VARIOUS EXPLA NATIONS GIVEN BY THE ASSESSEE AND OBSERVING THAT THE ASSESSEE DID NO T SUBMIT THE FULL COPY OF THE AGREEMENT, THE ASSESSING OFFICER DISALL OWED THE CLAIM OF THE PAYMENT OF SPECIAL BONUS HOLDING THAT THE ASSES SEE COMPANY IS 5 HIDING THE FACTS BEFORE THE TAX AUTHORITIES. IT MA Y BE PERTINENT TO NOTE THAT THE TPO HAD EARLIER REJECTED THE CONTENTIONS O F THE ASSESSEE FOR THE FOLLOWING REASONS : A) THE ASSESSEE SEEMS TO BE IN THE PREDICAMENT AS REGARD S TO THE NATURE ,OF PAYMENT OF SPECIAL BONUS. ON THE ONE HAND THE ASSESSEE CLAIMS THAT THE AMOUNT OF SPECIAL BONUS WAS NOT A LIABI LITY OF SHAREHOLDERS; WHEREAS ON THE OTHER HAND IT-SUBMITS THAT THE SPECIAL BONUS WAS GRANTED IN VIEW OF CHANGEOVER OF SHARE HOLDE RS AND ALSO STATES THAT THERE IS REFERENCE OF PAYMENT OF SPECIAL BO NUS IN THE SHAREHOLDERS AGREEMENT AS IT HAS DIRECT IMPACT ON VALU ATION OF SHARES. B) THE CONTENTION OF THE ASSESSEE THAT ABOVE BONUS WAS GI VEN TO THE EMPLOYEES TO CREATE GOODWILL IN HUMAN RESOURCES OF THE COMPANY AND TO AVOID ATTRITION AND THIS NORMALLY HAPPENS WHEN CHANGEOVER OF MANAGEMENT TAKES PLACE ALSO SUBSTANTIATES THE FACT THAT THE COST OF SPECIAL BONUS IS INCURRED BY THE ASSESSEE IN ITS COURSE OF OPERATIONS AS DIRECTED BY THE AES/SHAREHOLDERS. C) THE ASSESSEE HAS ALSO NOT PRODUCED THE ENTIRE COPY OF SHARE ACQUISITION AGREEMENT TITLED ' ACQUISITION OF SIGMA E LECTRIC GROUP BY GS CAPITAL PARTNERS VI FUNDS FROM SAJJAN KUMAR AGARWA L AND OTHER SELLING SHAREHOLDERS' - CLOSING DATE 15/10/2007 TO SUPPO RT ITS CONTENTION THAT THE PAYMENT OF BONUS WAS NOT A LIABIL ITY OF SHAREHOLDERS. E) IN VIEW OF THE ABOVE FACTS, IT CAN BE CONCLUDED T HAT THE SPECIAL BONUS WAS PAID BY THE ASSESSEE ON BEHALF OF SHAREHOLDERS [ EITHER OLD (SELLER) OR NEW (PURCHASER)] AND SUCH COST SHALL BE RECO VERED BY THE ASSESSEE FROM THESE NON-RESIDENT SHAREHOLDERS. IN THIS CASE, THE ASSESSEE HAS PAID RS.1845.25 LAKHS ON BEHALF OF AE/NON-RE SIDENT SHAREHOLDERS; HOWEVER, AS THE JURISDICTIONAL AO HAS NOT REFERRED THIS TRANSACTION FOR COMPUTATION OF ARMS LENGTH PRICE, IT S ARMS LENGTH PRICE IS NOT DETERMINED SEPARATELY. THE ASSESSEE APPROACHED THE DRP BUT WITHOUT ANY SUC CESS. THE ASSESSING OFFICER, THEREAFTER, IN THE ORDER PAS SED U/S.143(3) R.W.S. 144C (13) DISALLOWED THE CLAIM OF SPECIAL BO NUS OF RS.18,45,25,000/-. 3.1 AGGRIEVED WITH SUCH ORDER OF THE ASSESSING OFFI CER THE ASSESSEE IS IN APPEAL BEFORE US. 6 4. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE AO/TPO AND DRP. W E HAVE ALSO CONSIDERED THE SERIES OF DECISIONS CITED BY THE LD. COUNSEL FOR THE ASSESSEE. IN THE INSTANT CASE, THE PAYMENT OF SPEC IAL BONUS WAS DISALLOWED BY THE ASSESSING OFFICER ON THE GROUND T HAT THE ASSESSEE DID NOT PRODUCE THE FULL COPY OF THE SHAREHOLDERS A GREEMENT WHICH IS THE BASIC DOCUMENT FOR DETERMINING THE ALLOWABILITY OF THE PAYMENT OF SPECIAL BONUS. DESPITE BEING ASKED BY THE ASSES SING OFFICER THE ASSESSEE DID NOT PRODUCE THE SAME ON THE GROUND THA T THE SAME WAS NOT AVAILABLE AT THE TIME OF ASSESSMENT PROCEEDINGS . ON BEING QUESTIONED BY THE BENCH DURING THE COURSE OF HEARIN G OF THE IMPUGNED APPEAL, THE LD. COUNSEL FOR THE ASSESSEE S UBMITTED THAT GIVEN AN OPPORTUNITY THE ASSESSEE WILL PRODUCE THE SHAREHOLDERS AGREEMENT BEFORE THE ASSESSING OFFICER WHICH COULD NOT BE PRODUCED BEFORE THE LOWER AUTHORITIES SINCE THE SAME WAS NOT AVAILABLE AT THE RELEVANT POINT OF TIME. CONSIDERING THE TOTALITY O F THE FACTS OF THE CASE AND CONSIDERING THE FACT THAT THE SHAREHOLDERS AGREEMENT IS THE BASIC DOCUMENT FOR DETERMINING THE ALLOWABILITY OR OTHERWISE OF THE EXPENDITURE RELATING TO SPECIAL BONUS PAID, WE DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFI CER WITH A DIRECTION TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO PRO DUCE THE SAME. SINCE WE ARE RESTORING THE ISSUE ON THIS PRELIMINAR Y GROUND, THEREFORE, WE REFRAIN OURSELVES FROM TOUCHING UPON THE VARIOUS DECISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSE SSEE TO JUSTIFY THE ALLOWABILITY OF THE CLAIM. WE HOLD AND DIRECT ACCO RDINGLY. THE FIRST 7 GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWE D FOR STATISTICAL PURPOSES. 5. GROUND OF APPEAL NO.2 BY THE ASSESSEE READS AS U NDER : 2.1 THE DRP ERRED IN NOT INTERFERING WITH THE CONC LUSION BY AO AND THE AO ERRED IN REDUCING CLAIM OF DEDUCTION U/S 10B BY CONSIDERING INTEREST OF RS. 1,05,47,629/- AS AN INCOME NOT DERIVE D FROM AN ELIGIBLE BUSINESS U/S.L0 B. 2.2. WITHOUT PREJUDICE TO THE ABOVE, CONSIDERING THE INTEREST INCOME ON GROSS BASIS INSTEAD OF REAL INCOME (NET OF EXPENSES) BA SIS. 5.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE COMPANY HAS OFFERED AN AMOUNT OF RS.1,29,06,460/- A S OTHER INCOME, THE DETAILS OF WHICH ARE AS UNDER : INTEREST INCOME : RS.1,05,47,629/- SALE OF SCRAP : RS.23,58,831/- HE NOTED THAT THE ASSESSEE HAS CLAIMED EXEMPTION U/ S.10B ON THE ABOVE. ACCORDING TO THE ASSESSING OFFICER, FOR THE PURPOSE OF COMPUTING THE QUANTUM OF ELIGIBLE EXEMPTION U/S.10B , ONLY THOSE RECEIPTS WHICH ARE DIRECTLY DERIVED FROM EXPORT OF ARTICLES OR THINGS ARE TO BE INCLUDED. THE ASSESSING OFFICER, THEREFO RE, ASKED THE ASSESSEE TO EXPLAIN AS TO HOW THE ABOVE INCOME, WHI CH ARE REGULARLY DISALLOWED, SHOULD NOT BE EXCLUDED WHILE COMPUTING THE EXEMPTION U/S.10B. ALTHOUGH THE ASSESSEE SUBMITTED THE DETAIL S OF REGULAR DISALLOWANCE, HOWEVER, NO DETAILED SUBMISSION WAS M ADE JUSTIFYING THE COMPUTATION MADE. FOLLOWING THE STAND OF THE R EVENUE IN THE PRECEDING ASSESSMENT YEARS THE ASSESSING OFFICER EX CLUDED THE ABOVE 8 INCOME FOR WORKING OUT THE EXEMPTION U/S.10B. 5.2 AGGRIEVED WITH SUCH ORDER OF THE ASSESSING OFFI CER THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE COMPANY HAS ROBUST SEGMENTAL ACCOUNTING OF ASSETS, LIABILIT IES, INCOME AND EXPENDITURE. THE INTEREST IN QUESTION IS ON THE DE POSITS WHICH HAVE ARISEN ONLY FROM THE SURPLUS OF ELIGIBLE BUSINESS A ND THERE IS DIRECT NEXUS OF PROFIT OF ELIGIBLE BUSINESS. THEREFORE, T HE DEDUCTION SHOULD NOT BE DENIED IN RESPECT OF SUCH INTEREST. ALTERNA TIVELY, RELYING ON VARIOUS DECISIONS, HE SUBMITTED THAT NETTING SHOULD BE ALLOWED AND NET INTEREST INCOME SHOULD BE DISALLOWED FOR CLAIM OF DEDUCTION U/S.10B. FOR THE ABOVE PROPOSITION, HE RELIED ON T HE FOLLOWING DECISIONS : 1. CIT VS. KRISHAN KUMR AGGARAWAL 170 TAXMANN 23 (DEL HI) 2. CIT VS. ANAND KUMAR 164 TAXMANN 330 (DELHI) 3. CIT VS. GOKULDAS EXPORTS & OTHERS 333 ITR 214 (KAR. ) 4. CIT VS. HYCRON INDIA LTD. 308 ITR 251 (RAJ.) 5. M/S. MOTOROLA INDIA ELECTRONICS PVT. LTD. ITA N O.428/2007 7. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE AO. 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDER OF THE AO/TPO AND THE DRP ON THIS ISSUE AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS RELIED ON BY THE L D. COUNSEL FOR THE ASSESSEE. SINCE THE ASSESSEE HAS NOT JUSTIFIED BEF ORE THE AO THE REASONS FOR NOT EXCLUDING THE OTHER INCOME WHILE WO RKING OUT THE 9 EXEMPTION U/S.10B AND SINCE NOTHING IS COMING OUT O F THE RECORDS AS TO WHAT HAS HAPPENED FINALLY IN THE PRECEDING ASSES SMENT YEARS, THEREFORE, WE DEEM IT PROPER TO RESTORE THIS ISSUE TO THE FILE OF THE AO FOR PASSING A SPEAKING ORDER ON THIS ISSUE. IT IS NOT KNOWN WHETHER THE STAND OF THE DEPARTMENT IN THE PAST HAS BEEN AC CEPTED BY THE ASSESSEE OR NOT. IF NOT, THEN WHAT IS THE OUTCOME IN APPEAL. THE AO IS THEREFORE DIRECTED TO ADJUDICATE THE ISSUE AFRES H AND IN ACCORDANCE WITH LAW. HE IS ALSO DIRECTED TO CONSIDER THE ALTE RNATE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE FOR NETTING OFF OF INTEREST INCOME. THE AO SHALL DECIDE THE ISSUE IN ACCORDANCE WITH LA W AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. GROUND OF APPEAL NO.2 BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 9. GROUND OF APPEAL NO.3 BY THE ASSESSEE READS AS U NDER : 3. THE DRP ERRED IN NOT INTERFERING WITH THE CON CLUSION BY AO AND THE AO ERRED IN MAKING DISALLOWANCE OF RS. 1,00,750/- U/S 14A READ WITH RULE 8-D 9.1 THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS THIS GROUND DUE TO SMALLNESS OF THE AMOUNT. THE LD. DEPARTMENTAL R EPRESENTATIVE HAS NO OBJECTION FOR THE SAME. ACCORDINGLY, THIS G ROUND BY THE ASSESSEE IS DISMISSED. 10. THE ASSESSEE HAS TAKEN THE FOLLOWING ADDITIONAL GROUND : WITHOUT PREJUDICE TO OUR CLAIM OF ALLOWABILITY OF SPECIAL INCENTIVE BONUS, IF IT IS TO BE DISALLOWED, THE ASSESSING OFFICER TO BE DIRECTED TO ALLOW PROPORTIONATE ADDITIONAL DEDUCTION U/S.10B. 10 10.1 AFTER HEARING BOTH THE SIDES AND CONSIDERING T HE FACT THAT THE ABOVE GROUND IS A LEGAL ONE, THE SAME IS ADMITTED F OR ADJUDICATION. 10.2 WE FIND THE ABOVE GROUND IS CORRELATED TO THE GROUND OF APPEAL NO.1 OF THE ASSESSEE. SINCE THE SAID GROUND HAS BE EN RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATIO N IN THE LIGHT OF THE DIRECTIONS GIVEN THEREIN, THEREFORE, WE RESTORE THI S GROUND ALSO TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO A DJUDICATE THE SAME AFRESH IN ACCORDANCE WITH LAW AFTER GIVING DUE OPPO RTUNITY OF BEING HEARD TO THE ASSESSEE. WE HOLD AND DIRECT ACCORDIN GLY. THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ACCORDI NGLY ALLOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 12-09-2014. SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEM BER PUNE DATED: 12 TH SEPTEMBER, 2014 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. DY.CIT (TP-IV), PUNE 4. DRP, PUNE 5. THE D.R, A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE