Gillettee Diversified Operations Pvt. Ltd., New Delhi V. DCIT, Circle-10(1), New Delhi

ITA 1161/DEL/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 4372 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 19-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Assessee Lawyers: R K KAPOOR
• Keywords: Depreciation; Transfer pricing; International transaction; Rule of consistency; Set aside
• Section: 92B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH I-1 NEW DLEHI BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA NO. 1161/DEL/2018 ASSESSMENT YEAR: 2012-13 M/S. GILLETTE DIVERSIFIED OPERATIONS VS. DCIT, C IRCLE 10(1), PVT. LTD., P & G PLAZA, GADINALGRACIOUS NEW DELHI -110002 ROAD,.CHAKALAANDHERY(EAST), MUMBAI 99. PAN : AAACG2469C (APPELLANT/ASSESSEE) (RESPONDENT/REVENUE) ITA NO. 1698/DEL/2018 ASSESSMENT YEAR: 2012-13 ADDL. CIT, SPCL. RANGE-4, VS. M/S. GILLETTE DIVERSI FIED OPERATIONS, NEW DELHI. PVT. LTD., P & G PLAZA, GADINALGRACIOUS ROAD,.CHAKALAANDHERY(EAST), MUMBAI 99. PAN : AAACG2469C (APPELLANT/REVENUE) (RESPONDENT/ASSESSEE) REVENUE BY : SH. SURENDER PAL, SR. DR ASSESSEE BY: SH. R.K. KAPOOR, CA DATE OF HEARING: 03.02.2021 DATE OF ORDER : 03.02.2021 ORDER PER K. NARASIMHA CHARY, J.M. AGGRIEVED BY THE ORDER DATED 26/12/2017 IN APPEAL N O. 15/2016- 17/CIT (A) 44 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX 2 (APPEALS)-44, NEW DELHI (LD. CIT(A)) IN THE CASE OF M/S GILLETTE DIVERSIFIED OPERATORS PRIVATE LIMITED (THE ASSESSE E), FOR THE ASSESSMENT YEAR 2012-13, BOTH THE ASSESSEE AND THE REVENUE ARE IN THESE APPEALS. 2. BRIEF FACTS OF THE CASE AS COULD BE CULLED OUT F ROM THE RECORD ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSIN ESS OF TRADING OF WIDE RANGE OF PRODUCTS FOR PERSONAL CARE AND USE. I T IS ENGAGED IN DISTRIBUTION OF ORAL CARE PRODUCTS PRIMARILY FALLIN G UNDER HEALTH CARE SEGMENT CONSISTING OF TOOTHBRUSH, TOOTHPASTE, DENTA L FLOSS ETC. 3. FOR THE ASSESSMENT YEAR 2012-13, ASSESSEE FILED THE RETURN OF INCOME ON 5/9/2013 DECLARING A LOSS OF RS. 11, 06, 21, 0 88/-. DURING THE FINANCIAL YEAR 2011-12 RELEVANT FOR THE ASSESSMENT YEAR 2012-13, THE ASSESSEE UNDERTOOK INTERNATIONAL TRANSACTIONS WITH ITS ASSOCIATED ENTERPRISES (AES) IN THE NATURE OF EXPORT OF TRADIN G/FINISHED GOODS, AVAILING OF SUPPORT SERVICES, AND THE CASE WAS REFE RRED TO TRANSFER PRICING OFFICER (LD. TPO) FOR DETERMINATION OF ARM S LENGTH PRICE; AND THAT ALL SUCH TRANSACTION WERE HELD TO BE AT ALP BU T LD. TPO OBSERVED THAT AUDITED FINANCIALS REVEALED SUBSTANTIAL AMOUNT OF RECOVERABLE AND PROCEEDED TO MAKE AN ADJUSTMENT ON ACCOUNT OF ALLEG ED DELAY IN RECEIVING THE AMOUNT FROM AE AGAINST SALES MADE TO THEM. MAJOR TRANSACTIONS UNDERTAKEN BY THE ASSESSEE IS THE EXPO RT OF FINISHED GOODS AMOUNTING TO RS.84.49 CRORES TO ITS AES FOR WHICH T HE ASSESSEE HAD APPLIED TNMM AS THE MOST APPROPRIATE METHOD (OP/OC) . THE ASSESSEE EARNED MARGINS UNDER THE TNMM METHOD @ 12.79%BASED ON OP/OC AND THE COMPARABLES HAD EARNED A MARGIN OF 7.61%.AL L THE REPORTED INTERNATIONAL TRANSACTIONS WERE ACCEPTED AT THE ALP AND NO ADJUSTMENT HAS BEEN MADE BY THE AO/ LD. TPO IN ANY OF THE REPO RTED INTERNATIONAL TRANSACTIONS. 4. LD. TPO VIDE ORDER DATED 29.01.2016 HELD ALL THE INTERNATIONAL TRANSACTIONS TO BE AT ARMS LENGTH PRICE, BUT MADE ADJUSTMENT OF 3 RS.80,60,718/- ON ACCOUNT OF OUTSTANDING RECEIVABLE S FROM AES BEYOND ALLEGED STANDARD CREDIT PERIOD OF 60 DAYS @ INTERES T RATE OF 12.6% BASED ON BASE RATE OF STATE BANK OF INDIA ADDING AP PROPRIATE BASES POINTS TOWARDS CREDIT WORTHINESS AND RISK ASSESSMEN T. LEARNED ASSESSING OFFICER APART FROM MAKING ALP ADDITION BA SED ON LD. TPO ORDER ALSO MADE DISALLOWANCE OF DEPRECIATION OF RS. 10,03,84,485/- ON ACCOUNT OF PLANT & MACHINERY NOT USED ALLEGEDLY FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE AND INSURANCE EXPENSES ON THESE PLANT & MACHINERY OF RS.8,80,972/-. 5. AGGRIEVED BY THE ACTION OF THE LD. AO/LD. TPO AS SESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A), AND THE LD. CIT(A) VI DE ORDER DATED 26.12.2017 GAVE PARTIAL RELIEF ON ACCOUNT OF TRANSF ER PRICING ADDITION OF RS.80,60,718/-, HOWEVER, ALLOWED COMPLETE RELIEF ON THE DISALLOWANCE OF DEPRECIATION OF RS.10,03,84,485/- AND INSURANCE EXPENSE OF RS.8,80,972/- AND DELETED THE SAME. THOUGH THE LD. CIT(A) SUSTAINED THE CREDIT PERIOD OF 60 DAYS PER CHARGING INTEREST ON OVERDUE RECEIVABLES, DIRECTED THE LD. TPO TO APPLY INTEREST RATE OF LIBOR PLUS 350 BPS. BY ORDER DATED 7/12/2018 PASSED UNDER SECT ION 250/143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT), THE REVISED AMOUNT OF ADDITION AFTER CIT(A) DIRECTION IS RS.27,70,071. 6. ASSESSEE CHALLENGED THE TRANSFER PRICING ADJUSTM ENT ON ACCOUNT OF INTEREST ON OVERDUE RECEIVABLES AT LIBOR +350 BA SIC POINTS; WHEREAS REVENUE CHALLENGING THE DELETION OF THE DISALLOWANC E OF DEPRECIATION TO THE TUNE OF RS. 10, 03, 84, 485/- AND THE INSURANCE EXPENSES TO THE TUNE OF RS. 8, 80, 972/-. 4 7. INSOFAR AS THE ADJUSTMENT ON ACCOUNT OF INTEREST ON OVERDUE RECEIVABLES, LD. AR , AT THE OUTSET, SUBMITTED THAT THIS GROUND OF OVERDUE RECEIVABLES WAS CONSIDERED BY A COORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2008-09 TO A Y 2010-11, AND BY COMMON ORDER DATED 23.08.2018 IN ITA NO.5675/DEL/20 15 TO 5677/DEL/2015 FOR AY 2008-09 TO AY 2010-11 THE ISSU E WAS RESTORED TO THE FILE OF LD. AO/LD. TPO TO RE-EXAMINE WITH THE DIRECTIONS THAT IF THE MARGINS UNDER TNMM DECLARED BY THE ASSESSEE AND THO SE OF COMPARABLE TAKES CARE OF WORKING CAPITAL ADJUSTMENT IN VIEW OF JUDGMENT OF HONBLE DELHI HC IN PRINCIPAL CIT VS. K USUM HEALTH CARE PVT. LTD. 2017-TII-28-HC-DELHI TP,THEN NO ADJUSTMEN T ON ALLEGED DELAY IN RECOVERABLES SHOULD BE MADE, AND A SIMILAR DIREC TIONS WAS GIVEN BY FOR AY 2011-12 ALSO VIDE ITS ORDER IN ITA NO. 1287/ DEL/217 DATED 12.11.2020. 8. INSOFAR AS THIS SUBMISSION THAT THIS PARTICULAR ISSUE IS COVERED BY THE ORDERS OF THE TRIBUNAL FOR THE EARLIER ASSESSME NT YEARS IS CONCERNED, THERE IS NO DENIAL OF THE SAME. IN THESE DECISIONS, THE TRIBUNAL PLACED RELIANCE ON THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OFKUSUM HEALTH CARE PVT. LTD . (SUPRA), WHEREIN THE HONBLE APEX COURT HELD THAT,- THE COURT IS UNABLE TO AGREE WITH THE ABOVE SUBMISS IONS. THE INCLUSION IN THE EXPLANATION TO SECTION 92B OF THE ACT OF THE EXPRESSION RECEIVABLES DOES NOT MEAN THAT DE HORS THE CONTEX T EVERY ITEM OF RECEIVABLES APPEARING IN THE ACCOUNTS OF AN ENTIT Y, WHICH MAY HAVE DEALINGS WITH FOREIGN AES WOULD AUTOMATICALLY BE CH ARACTERIZED AS AN INTERNATIONAL TRANSACTION. THERE MAY BE A DELAY IN COLLECTION OF MONIES FOR SUPPLIES MADE, EVEN BEYOND THE AGREED LIMIT, DU E TO A VARIETY OF FACTORS WHICH WILL HAVE TO BE INVESTIGATED ON A CAS E TO CASE BASIS. IMPORTANTLY, THE IMPACT THIS WOULD HAVE ON THE WORK ING CAPITAL OF THE 5 ASSESSEE WILL HAVE TO BE STUDIED. IN OTHER WORDS, T HERE HAS TO BE A PROPER INQUIRY BY THE LD. TPO BY ANALYZING THE STA TISTICS OVER A PERIOD OF TIME TO DISCERN A PATTERN WHICH WOULD INDICATE T HAT VIS-A-VIS THE RECEIVABLES FOR THE SUPPLIES MADE TO AN AE, THE ARR ANGEMENT REFLECTS AN INTERNATIONAL TRANSACTION INTENDED TO BENEFIT TH E AE IN SOME WAY. THE COURT FINDS THAT THE ENTIRE FOCUS OF THE AO WAS ON JUST ONE AY AND THE FIGURE OF RECEIVABLES IN RELATION TO THAT AY CA N HARDLY REFLECT A PATTERN THAT WOULD JUSTIFY A LD. TPO CONCLUDING TH AT THE FIGURE OF RECEIVABLES BEYOND 180 DAYS CONSTITUTES AN INTERNAT IONAL TRANSACTION BY ITSELF. WITH THE ASSESSEE HAVING ALREADY FACTORE D IN THE IMPACT OF THE RECEIVABLES ON THE WORKING CAPITAL AND THEREBY ON ITS PRICING/PROFITABILITY VIS-A-VIS THAT OF ITS COMPARA BLES, ANY FURTHER ADJUSTMENT ONLY ON THE BASIS OF THE OUTSTANDING REC EIVABLES WOULD HAVE DISTORTED THE PICTURE AND RECHARACTERSIED THE TRANSACTION. THIS WAS CLEARLY IMPERMISSIBLE IN LAW AS EXPLAINED BY TH IS COURT IN CIT VS. EKL APPLIANCES LTD. (2012) 345 ITR 241 (DELHI) - 20 12-TII-01 -HXC-DEL- TP. 9. LD. AR, HOWEVER , SUBMITTED THAT THIS PARTICULAR ISSUE WAS RAISED BEFORE CIT(A) IN THIS YEAR; THAT IT WAS DEMONSTRATE D BEFORE LD. CIT(A) THAT ALP MARGINS OF THE ASSESSEE VS. COMPARABLE REM AIN HIGHER AFTER THE WORKING CAPITAL ADJUSTMENT; THAT THE CAPITAL AD JUSTED PLI OF THE COMPARABLE IS 6.71% AND WHEN COMPARED WITH ASSESSEE S 12.06% , NO ADJUSTMENT FOR ALLEGED DELAYED RECOVERABLE REMAIN A S PER JUDGMENT OF HONBLE DELHI HC IN KUSUM HEALTHCARE (SUPRA); THAT THE LD. CIT(A) HAS CATEGORICALLY RECORDED THE SAID FACT, BUT DID NOT D ISPUTE SUCH SUBMISSION AND SUMMARILY PASSED ORDER BY HOLDING TH AT INTEREST RATE NEED TO BE APPLIED AT LIBOR PLUS 350 BPS BY FOLLOWI NG JUDGMENT OF HONBLE DELHI HC IN COTTON NATURALS. 10. BE THAT AS IT MAY, IN ITA NO. 5736/DEL /2015 FO R THE ASSTT. YEAR: 2010-11 IN ASSESSEES OWN CASE, THE TRIBUNAL OBSERV ED THAT,- 6.2WE ARE OF THE CONSIDERED OPINION THAT THIS ASPEC T WILL HAVE TO BE NECESSARILY RE-EXAMINED BY THE AO/TPO BEFORE ANY SU CH ADJUSTMENT IS 6 MADE. IT HAS ALSO BEEN SUBMITTED BY THE LD. AR THAT THE IMPACT OF THE OUTSTANDING RECEIVABLES HAS BEEN FACTORED IN THE WO RKING CAPITAL ADJUSTMENT. THIS ASPECT ALSO REQUIRES VERIFICATION. WE ALSO NOTE THAT THE LD. CIT (A) DID NOT HAVE THE BENEFIT OF THIS JU DGMENT OF THE HONBLE DELHI HIGH COURT WHEN HE PASSED THE IMPUGNED ORDER. THEREFORE, ON AN OVERALL VIEW OF THE FACTS OF THE CASE AND RESPECTFU LLY FOLLOWING THE RATIO OF THE HONBLE DELHI HIGH COURT IN THE CASE OF PRIN CIPAL CIT VS. KUSUM HEALTH CARE PVT. LTD (SUPRA) WE RESTORE THIS ISSUE TO THE FILE OF THE AO/TPO FOR THE PURPOSE OF RE-EXAMINING AND RE-CONSI DERING THE ISSUE IN LIGHT OF THE RATIO OF THE JUDGMENT OF THE HONBL E DELHI HIGH COURT IN THE CASE OF PRINCIPAL CIT VS. KUSUM H EALTH CARE PVT. LTD (SUPRA) AND PASS A SPEAKING ORDER AS PER LAW AFTER GIVING PROPER OPPORTUNITY TO THE ASSESSEE. THE ASSESSEE SHALL BE AT LIBERTY TO TAKE ALL/ANY OF THE PLEAS RAISED BEFORE US AND SHALL ALS O BE AT LIBERTY TO FILE RELEVANT WORKINGS/COMPUTATIONS. 11. THIS VIEW IS FOLLOWED BY THE TRIBUNAL FOR THE ASSES SMENT YEAR 2011-12 ALSO. IT IS AN ADMITTED FACT THAT THE LEARN ED ASSESSING OFFICER HAD NOT CONSIDER THIS ISSUE IN THE LIGHT OF THE SUB MISSIONS NOW MADE BY THE LD. AR AND THE ASSESSMENT ORDERS FOR THE EARLIE R ASSESSMENT YEARS, AFTER REMAINED, ARE PENDING. IT IS, THEREFORE, THE SUBMISSION ON BEHALF OF THE REVENUE THAT IT WOULD BE JUST INCONVENIENT F OR THE LEARNED ASSESSING OFFICER TO TAKE A VIEW ON THIS ASPECT FOR THIS YEAR ALSO IN CONSONANCE WITH THE DIRECTIONS GIVEN BY THE TRIBUNA L IN ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEARS. 12. IN THE CIRCUMSTANCES, WHERE OF THE CONSIDERED O PINION THAT THIS ISSUE NEEDS TO BE CONSIDERED BY THE LEARNED ASSESSI NG OFFICER IN THE LIGHT OF THE SUBMISSIONS NOW MADE BY THE LD. AR IN CONSONANCE WITH THE VIEW THAT IS TO BE TAKEN ON THIS ASPECT FOR THE EARLIER ASSESSMENT YEARS ALSO. WITH THIS DIRECTION, WE SET ASIDE THE I SSUE TO THE FILE OF THE LEARNED ASSESSING OFFICER. WE ACCORDINGLY, ALLOWED THE GROUNDS OF APPEAL OF THE ASSESSEE FOR STATISTICAL PURPOSE. 7 13. INSOFAR AS THE DEPARTMENTAL APPEAL IS CONCERNED , GROUNDS NO. 1 AND 4 ARE IN GENERAL AND GROUND NO. 2 AND 3 ARE INT ERRELATED. GROUND NO. 2 IS IN RESPECT OF NON-GRANT OF DEPRECIATION ON PLANT & MACHINERY RS.10,03,84,485/-; WHEREAS GROUND NO. 3 IS RELATING TO THE DISALLOWANCE OF RS. 8,80,972/- TOWARDS INSURANCE PREMIUMOF MACHI NERY AND MOULDS. 14. ACCORDING TO THE LEARNED ASSESSING OFFICER, PLA NT & MACHINERY AND TOOLS &MOULDS ON WHICH DEPRECIATION HAS BEEN CL AIMED BY THE ASSESSEE ARE BEING USED BY M/S. RIALTO ENTERPRISES (P) LTD. WHO HAD MANUFACTURED THE GOODS FOR THE ASSESSEE COMPANY; AN D THAT DEPRECIATION ON THESE TWO ITEMS IS BEING DISALLOWED YEAR AFTER YEAR IN THE PRECEDING PREVIOUS YEARS ALSO. ASSESSEES CASE I S THAT THE ASSETS ARE OWNED BY ASSESSEE, BUT THESE ARE LOCATED AT M/S. RI ALTO ENTERPRISES (P) LTD. FACTORY IN CHENNAI, WHICH IS MANUFACTURING THE GOODS FOR THE ASSESSEE. REFERRING TO THE PRINCIPLE AGREEMENT WITH THE M/S. RIALTO ENTERPRISES (P) LTD. DATED MAY 14, 2008 BETWEEN THE ASSESSEE AND THE SAID MANUFACTURER, THE ASSESSEE SUBMITTED THAT IN C ASE OF TERMINATION OF BUSINESS AGREEMENT, IT WILL HAVE TO IMMEDIATELY REMOVE THE ASSETS AND ALL OTHER MATERIALS AND PROPERTIES OF THE ASSES SEE WHICH IS IN POSSESSION OF M/S. RIALTO ENTERPRISES (P) LTD. VARI OUS CLAUSES OF THE AGREEMENT WITH M/S. RIALTO ENTERPRISES (P) LTD. WER E REFERRED TO AS HAVE BEEN NOTED BY THE AO IN HIS ORDER. LEARNED ASS ESSING OFFICER, HOWEVER, PLACING RELIANCE ON THE DECISION IN THE CA SE OF KARAN RAGHAV EXPORTS (P) LTD. V. CIT 196 TAXMANN 504 (DELHI)COME TO THE CONCLUSION THAT THE ASSESSEE IS NOT IN THE BUSINESS OF GIVING ASSETS TO THE 8 PARTNERSHIP FIRMS AND DIDNT USE THE ASSETS FOR THE PURPOSES OF ASSESSEES BUSINESS AND DISALLOWED THE CLAIM OF DEP RECIATION. LEARNED ASSESSING OFFICER FURTHER NOTICED THAT THE LD. CIT( A) HAS ALLOWED RELIEF TO THE ASSESSEE ON THIS ISSUE IN A. Y. 2010-11 AND A. Y. 2011-12, BUT THE LEARNED ASSESSING OFFICER HAD CHOSEN NOT TO FOLLOW THESE ORDERS OF LD. CIT(A) ON THE GROUND THAT THE DEPARTMENT HAD FILED APPEAL AGAINST THESE ORDERS BEFORE ITAT, DELHI. LD. CIT(A), HOWEVE R, BY FOLLOWING THE EARLIER ORDER OF CIT(A) FOR AY 2011-12 ALLOWED THE RELIEF TO THE ASSESSEE KEEPING IN VIEW THE JUDGMENTS OF HONBLE SUPREME CO URT IN THE CASE OF ICDS LTD. V. CIT 350 ITR 527 ANDCIT V. H. B. LEASIN G & FINANCE LTD. 360 ITR 362 GRANTED RELIEF IN THE APPEAL . 15. LD. AR SUBMITTED THAT THIS ISSUE ALSO CAME UP F OR CONSIDERATION IN ASSESSEES OWN CASE FOR THE A. Y. 2010-11 BEFORE A COORDINATE BENCH OF THIS TRIBUNAL IN ITA NO. 5736/DEL/2015 FILED BY THE REVENUE AND A COORDINATE BENCH OF THIS TRIBUNAL HELD IN THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT O F HONBLE SUPREME COURT IN THE CASE OF ICDS LTD. V. CITREPORTED IN 29 TAXMANN.COM 129 (SC) ANDLIQUIDATORS OF PURSA LTD. V. CIT 25 ITR 265 TO COME TO THE CONCLUSION THAT USED FOR THE PURPOSES OF BUSINESS, PROFESSION OR VOCATION MEANS USED FOR THE PURPOSE OF ENABLING TH E OWNER TO CARRY ON THE BUSINESS AND EARN PROFITS IN THE BUSINESS. T HE TRIBUNAL, ACCORDINGLY, HELD THAT THE ASSETS GIVEN TO THE M/S. RIALTO ENTERPRISES (P) LTD. FOR PRODUCING GOODS FOR THE BUSINESS OF THE AS SESSEE ARE ELIGIBLE FOR DEPRECIATION AND DISMISSED THE APPEAL OF THE DEPART MENT FILED ON THIS ISSUE. LD. AR FURTHER SUBMITTED THAT THE REVENUE AC CEPTED THE SAME WITHOUT FILING ANY APPEAL AGAINST THE ORDER OF THE TRIBUNAL ON THIS 9 ASPECT, BEFORE THE HONBLE HIGH COURT. 16. INSOFAR AS THE INSURANCE EXPENSE IS CONCERNED, IT IS SUBMITTED THAT THE LD. AO FOR THE FIRST TIME IN THIS ASSESSME NT YEAR NOT ONLY DISALLOWED DEPRECIATION ON THE ASSETS OWNED BY THE ASSESSEE AND GIVEN TO M/S. RIALTO ENTERPRISES (P) LTD. FOR ASSESSEES BUSINESS BUT ALSO DISALLOWED THIS AMOUNT OF RS. 8,80,972/- WHICH THE ASSESSEE HAS INCURRED TOWARDS INSURANCE ON THE ASSETS LYING AT T HE MANUFACTURING UNIT OF M/S. RIALTO ENTERPRISES (P) LTD. THERE IS N O DISPUTE THAT THE ASSETS ARE OWNED BY THE ASSESSEE AND THEREFORE ASSE SSEE HAD INSURED THESE ASSETS AND PAID THE INSURANCE PREMIUM. THE RE ASONING GIVEN BY THE AO FOR MAKING THIS DISALLOWANCE IS IDENTICAL AS GIVEN FOR DISALLOWING DEPRECIATION. LD. AR SUBMITTED THAT THE INSURANCE E XPENSE HAS NEVER BEEN DISPUTED BY THE LD. AO IN THE EARLIER YEARS AN D CONSISTENTLY BEEN ALLOWED TO THE ASSESSEE AS CLAIMED IN THE RETURN OF INCOME. 17. PER CONTRA, LD. DR PLACED RELIANCE ON THE ORDER OF THE LEARNED ASSESSING OFFICER ON THIS ASPECT AND REITERATED THE STAND TAKEN BY THE LEARNED ASSESSING OFFICER FOR MAKING THIS ADDITION. HE SUBMITTED THAT ALL THESE ASPECTS HAVE NOT CONSIDERED BY THE LD. CI T(A) FOR THIS ASSESSMENT YEAR. 18. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF THE SUBMISSIONS MADE ON EITHER SIDE. THERE IS NO DENIAL OF THE FACT THAT THERE IS NO CHANGE IN FACTS AND CIRCUMSTANCES AS WELL AS LAW ON THIS ISSUE FROM THE EARLIER ASSESSMENT YEARS AND THE FACTS AND CIRCUMST ANCES REMAIN THE SAME, RULE OF CONSISTENCY DEMANDS THAT SIMILAR RELI EF AS HAS BEEN ALLOWED TO THE ASSESSEE IN A. Y. 2010-11 BY THE TRI BUNAL HAS TO BE 10 FOLLOWED AND RELIEF HAS TO BE GRANTED TO THE ASSESS EE. 19. EVEN IN RESPECT OF THE INSURANCE EXPENSES, LEAR NED ASSESSING OFFICER DOES NOT DISPUTE THE FACT OF ASSESSEE INCUR RING THE SAME AND ALSO THE FACT THAT IN THE EARLIER YEARS IT WAS NEI THER DISPUTED NOR DISALLOWED. SINCE THE ASSET BELONGS TO THE ASSESSEE , THE ASSESSEE WAS JUSTIFIED IN CLAIMING THE INSURANCE EXPENSES BECAUS E ASSETS BEING PLANT & MACHINERY AND MOULDS AND RISKS OF LOSSES, IF ANY, AGAINST WHICH INSURANCES HAD BEEN TAKEN BY THE ASSESSEE IS TO THE ACCOUNT OF ASSESSEE. WE ARE, THEREFORE, OF THE CONSIDERED OPIN ION THAT THE AMOUNT PAID TOWARDS INSURANCE EXPENSES WERE LEGALLY AND PR OPERLY ALLOWABLE TO THE ASSESSEE AS HAVING BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. ORDER OF THE L D. CIT(A) IS, ACCORDINGLY, UPHELD AND BOTH THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. 20. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER IS PRONOUNCED IN OPEN COURT IMMEDIATELY ON C ONCLUSION OF THE HEARING OF THE MATTER OVER VIRTUAL MODE, ON THI S THE 3 RD DAY OF FEBRUARY, 2021. SD/- SD/- (ANIL CHATURVEDI) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 03/02/2021 AKS