Force Motors Ltd., Pune V. Assistant Commissioner of Income-tax,

ITA 1291/PUN/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1476 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 16-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANIL CHAWARE
• Assessee Lawyers: MUKESH M PATEL; JIGAR M PATEL
• Keywords: Gift; Depreciation; Business expenditure; Earning of tax free income; Additional evidence; Corroborative evidences; Revenue expenditure; Capital expenditure
• Section: 14A; 115JB; 37(1); 37; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , . . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NO S . 1 289 TO 1 293 /PN/20 1 4 / ASSESSMENT YEAR S : 200 5 - 0 6 TO 2009 - 10 FORCE MOTORS LIMITED, MUMBAI - PUNE ROAD, AKURDI, AKURDI, PUNE 4110 3 5 . / APPELLANT PAN: AA ACB7066L VS. THE ASST. COMMISSIONER OF INCOME TAX , CIRCLE 9 , PUNE . / RESPONDENT / APPELLANT BY : S /S HRI MUKESH M. PATEL AND JIGAR M. PATEL / RESPOND ENT BY : SHRI ANIL CHAWARE / DATE OF HEARING : 0 5 .0 7 .201 6 / DATE OF PRONOUNCEMENT: 29 . 0 7 .201 6 / ORDER PER SUSHMA CHOWLA, JM: THIS BUNCH OF FIVE APPEAL S FILED BY THE SAME ASSESSEE ARE AGAINST SEPARATE ORDER S OF CIT (A) - V, PUNE , ALL DATED 04 . 0 3 .201 4 RELATING TO ASSESSMENT YEAR S 200 5 - 0 6 TO 2009 - 10 AGAINST RESPECTIVE ORDER S PASSED UNDER SECTION S 1 4 3 (3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) . ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 2 2. THIS BUNCH OF APPEALS FILED BY THE SAME ASSESSEE ON SIMILAR ISSUE S WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE O F CONVENIENCE. FIRST, WE SHALL TAKE UP THE APPEAL IN ITA NO.1289/PN/2014, RELATING TO ASSESSMENT YEAR 2005 - 06. 3 . THE ASSESSEE IN ITA NO. 1 289 /PN/201 4 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - (1) DISALLOWANCE OF AMORTIZATION OF LEASE CHARGES OF RS. 44,528/ - ( A ) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - V, PUNE [HEREINAFTER REFERRED TO AS CIT(A)] HAS LEGALLY ERRED IN UPHOLDING THE ACTION OF LEARNED ASSESSING OFFICER (A O ) THAT THE YEARLY AMORTISATION OF LEASE CHARGES OF RS.44,528 IN RESPECT OF LEAS EHOLD LAND AT PITHAMPUR IS NOT AN ALLOWABLE DEDUCTION IN COMPUTING THE TAXABLE INCOME. ( B ) IT IS PRAYED THAT THE LEARNED A O BE DIRECTED TO ALLOW THE DEDUCTION AS THE LEASE PREMIUM PAID IS IN THE NATURE OF ADVANCE RENT AND THUS ALLOWABLE AS REVENUE EXPENDITURE . (2) AD HOC DISALLOWANCE OF RS. 1,89,579 / - ON ACCOUNT OF GIFTS AND PRESENTATION ARTICLES. ( A ) THE LEARNED CIT(A) HAS LEGALLY ERRED IN UPHOLDING THE AD - HOC DISALLOWANCE OF RS.1,89,579 BEING THE 25% OF EXPENDITURE INCURRED ON GIFTS AND PRESENTATION ARTICLE AS NON BUSINESS EXPENDITURE. PRESENTATION ARTICLE AS NON BUSINESS EXPENDITURE. ( B ) IT IS PRAYED THAT THE LEARNED A O BE DIRECTED TO DELETE THE DISALLOWANCE AS THE EXPENDITURE IS INCURRED FOR THE PURPOSE OF BUSINESS AND THUS ALLOWABLE AS DEDUCTION. (3) DEDUCTION OF RS. 14,29,981/ - BEING THE EXPENDITURE FOR THE Y EAR UNDER CONSIDERA T ION BUT ACCOUNTED IN BOOKS IN SUCCEEDING YEARS: ( A ) THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTION OF THE A O FOR NOT ALLOWING THE CLAIM OF THE APPELLANT IN RESPECT OF EXPENDITURE OF RS.14,29,981 INCURRED FOR THE F.Y. 2004 - 05 RELEVANT TO A.Y. 2005 - 06 WHICH WAS NOT CLAIMED IN THE RETURN OF INCOME. ( B ) THE LEARNED CIT(A) ERRED IN NOT ALLOWING GENUINE CLAIM OF APPELLANT MADE DURING THE COURSE OF ASSESSMENT EVEN WHEN IT IS WITHIN THE POWERS OF THE CIT(A) TO ALLOW SUCH CLAIMS . ( C ) HE FURTHER OUGHT T O HAVE APPRECIATED THAT GENUINENESS OF THE CLAIM OF THE APPELLANT COMPANY HAS NOT BEEN QUESTIONED / CHALLENGED BY THE ASSESSING OFFICER AND THEREFORE CIT(A) SHOULD HAVE DECIDED THE ISSUE IN LIGHT OF THE MERITS AND LEGAL POSITION. ( D ) IT IS PRAYED THAT THE LEA RNED A O BE DIRECTED TO ALLOW THE CLAIM AS THE EXPENDITURE PERTAINS TO THE YEAR UNDER CONSIDERATION, BUT ACCOUNTED IN SUCCEEDING YEARS AS PRIOR PERIOD EXPENDITURE. (4) AD HOC DISALLOWANCE OF RS.2,50,000 ON ACCOUNT OF AIRCRAFT RUNNING AND MAINTENANCE EXPEN DITURE: ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 3 (A) THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTION OF THE A O IN MAKING AD - HOC DISALLOWANCE OF RS.2,50,000 BEING THE EXPENDITURE INCURRED ON AIRCRAFT RUNNING AND MAINTENANCE, TREATING THE SAME AS NOT INCURRED FOR THE PURPOSE OF BUSINESS. (B) I T IS PRAYED THAT THE A O BE DIRECTED TO DELETE THE DISALLOWANCE AS THE EXPENDITURE HAS BEEN INCURRED FOR THE PURPOSE OF BUSINESS AND THUS ALLOWABLE AS DEDUCTION. 4. THE GROUNDS OF APPEAL NO.1 AND 2 RAISED BY THE ASSESSEE AGAINST AMORTIZATION OF LEASE CHARG ES AND DISALLOWANCE ON ACCOUNT OF GIFTS AND PRESENTATION ARTICLES ARE NOT PRESSED BY THE ASSESSEE PURSUANT TO THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2003 - 04 AND HENCE, THE GROUNDS OF APPEAL NO.1 AND 2 ARE DISMISSED AS NOT PRESSED. 5. THE ISSUE IN GROUND OF APPEAL NO.3 RAISED BY THE ASSESSEE IS AGAINST THE DISALLOWANCE OF DEDUCTION OF RS.14,29,981/ - BEING THE EXPENDITURE FOR THE YEAR UNDER CONSIDERATION, WHICH WAS ACCOUNTED FOR IN THE BOOKS OF ACCOUNT IN SUCCEEDING YEARS. 6. BRIEF LY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS ENGAGED IN MANUFACTURE AND SALE OF LIGHT COMMERCIAL VEHICLES, UTILITY VEHICLES, THREE WHEELERS AND TRACTORS. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD FURNISHED STATEMENT STATING THAT IT HAD INCUR RED CERTAIN EXPENSES AMOUNTING TO RS. 22,25,504/ - , WHICH WAS NOT DEBITED TO PROFIT & LOSS ACCOUNT. THE CLAIM OF THE ASSESSEE IN THIS REGARD WAS THAT EXPENSES PERTAINED TO THE ACCOUNTING YEAR ENDING 31.03.2005 AND CERTIFICATE FROM CHARTERED ACCOUNTANT WAS A LSO FURNISHED CERTIFYING THAT THE EXPENSES PERTAINED TO ASSESSMENT YEAR 2005 - 06. THE ASSESSEE FURTHER SUBMITTED THAT THESE EXPENSES WERE THOUGH DEBITED IN PROFIT & LOSS ACCOUNT IN THE SUBSEQUENT YEARS, BUT WERE ELIGIBLE AS DEDUCTION IN ASSESSMENT YEAR 200 5 - 06 AS THE EXPENDITURE RELATED TO THE SAID ACCOUNTING YEAR. FURTHER, IT WAS STATED BY THE ASSESSEE THAT THE SAID EXPENSES WERE NOT CLAIMED AS DEDUCTION IN THE SUBSEQUENT YEAR AND WERE ADDED BACK. OUT OF THESE EXPENSES, SUM OF RS.7,95,523/ - WAS CLAIMED I N THE RETURN OF INCOME, WHEREAS BALANCE COULD NOT BE CLAIMED AS THESE WERE ACCOUNTED FOR SUBSEQUENTLY AFTER THE DATE OF FILING THE RETURN OF INCOME, HENCE ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 4 BALANCE SUM OF RS.14,29,981/ - WAS PLEADED TO BE ALLOWED AS DEDUCTION DURING THE YEAR. THE ASSESSING OFFICER REJECTED THE CONTENTION OF ASSESSEE, IN VIEW OF THE FACT THAT THE ASSESSEE HAD NOT DEBITED THE SAID EXPENSES TO THE PROFIT & LOSS ACCOUNT NOR IT HAD CLAIMED THE SAME IN THE RETURN OF INCOME. HE FURTHER NOTED THAT THE ASSESSEE WAS FOLLOWING MERCANT ILE SYSTEM OF ACCOUNTING AND EVEN IF CERTAIN EXPENSES WERE NOT INCURRED DURING THE YEAR, THEN THE SAME COULD HAVE BEEN CLAIMED AS PROVISION AND DEBITED TO THE PROFIT & LOSS ACCOUNT. THE ASSESSEE HAD FURNISHED THE DETAILS OF EXPENSES INCURRED YEAR - WISE, WH ICH IS IN ASSESSMENT YEAR 2006 - 07, SUM OF RS.21,24,378/ - WAS DEBITED, IN ASSESSMENT YEAR 2007 - 08, SUM OF RS.79,625/ - WAS CLAIMED AS DEDUCTION AND IN ASSESSMENT YEAR 2008 - 09 UPTO 30.09.2007, SUM OF RS.21,501/ - WAS CLAIMED I.E. TOTAL EXPENDITURE WAS RS.22,25 ,504/ - , AGAINST WHICH THE ASSESSEE HAD CLAIMED SUM OF RS. 7,95,523/ - IN THE RETURN OF INCOME. THE ADDITIONAL CLAIM WORKED OUT TO RS.14,29,981/ - , WHICH WAS DISALLOWED BY THE ASSESSING OFFICER. 7. THE CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER, IN VIEW OF SIMILAR ISSUE BEING 7. THE CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER, IN VIEW OF SIMILAR ISSUE BEING DECIDED BY THE CIT(A) IN ASSESSMENT YEAR 2003 - 04 APPLYING THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN GO E TZ (INDIA) LTD. VS. CIT REPORTED IN 284 ITR 323 (SC). 8. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 9. THE L EARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE TRIBUNAL IN ASSESSMENT YEAR 2003 - 04 HAD ADMITTED THIS GROUND OF APPEAL, BUT HAD REMANDED BACK THE ISSUE TO THE ASSESSING OFFICER FOR VERIFICATION OF PRIOR PERIOD EXPENDITURE. THE LEARN ED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE ALSO DREW OUR ATTENTION TO THE DETAILS OF EXPENSES PLACED AT PAGES 16 AND 17 OF THE PAPER BOOK. 10. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE STRONGLY OBJECTED TO THE ISSUE RAISED IN THIS GROUND OF APPEAL AND POINTED OUT THAT THE ASSESSEE THOUGH , WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING , BUT HAD NOT MADE THE PROVISION ON ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 5 ACCOUNT OF EXPENDITURE WHICH IT CLAIMS WAS RELATABLE TO THE YEAR UNDER CONSIDERATION. IN THE ABSENCE OF THE SAME, THERE IS NO MERIT IN THE CLAIM OF ASSESSEE. 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE BEFORE US IS CARRYING ON THE BUSINESS OF MANUFACTURE AND SALE OF MULTI UTILITY VEHICLES. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD DECLARED TOTAL INCOME OF RS. 2,73,94,020/ - UNDER SECTION 115JB OF THE ACT, IN THE RETURN OF INCOME. THE ASSESSEE IS ENGAGED IN THIS BUSINESS FOR THE PAST SEVERAL YEARS AND HAS HUGE SET UP FOR CARRYING ITS MANUFACTURING ACTIVITIES AND HAD ALSO EMPLOYED MAJO R WORKFORCE FOR THE SAME. THE ASSESSEE CLAIMS CERTAIN EXPENSES IN THE RETURN OF INCOME FILED FOR THE YEAR UNDER CONSIDERATION, WHICH IN TURN, WERE NOT CLAIMED IN THE PROFIT & LOSS ACCOUNT FOR THE RELEVANT PERIOD. OVER AND ABOVE SUCH A CLAIM, THE ASSESSEE FURTHER BY WAY OF LETTER BEFORE THE ASSESSING OFFICER SUBMITTED HIS STATEMENT, UNDER WHICH IT CLAIMS THAT CERTAIN EXPENDITURE WAS INCURRED BY THE ASSESSEE IN THE SUBSEQUENT YEARS, WHICH RELATED TO THE PERIOD ENDING 31.03.2005. THE LIST OF AFORESAID EXPEN SES IS PLACED AT RELATED TO THE PERIOD ENDING 31.03.2005. THE LIST OF AFORESAID EXPEN SES IS PLACED AT PAGE 17 OF THE PAPER BOOK. IN SUPPORT, THE ASSESSEE HAD FURNISHED A CERTIFICATE OF CHARTERED ACCOUNTANT, WHO HAD CERTIFIED THAT THE ASSESSEE HAD INCURRED EXPENDITURE OF RS.22,25,504/ - DURING THE YEAR 2004 - 05 RELATED TO ASSESSMENT YEAR 200 5 - 06. THE EXPENSES WHICH WERE BOOKED AND ACCOUNTED FOR DURING THE PERIOD 01.04.2005 TO 30.09.2007 UNDER THE HEAD PRIOR YEAR EXPENSES, BUT WERE CLAIMED TO BE RELATING TO THE YEAR ENDING 31.03.2005. IT WAS ALSO CERTIFIED BY THE CHARTERED ACCOUNTANT THAT THE AFORESAID EXPENDITURE AS MENTIONED IN ANNEXURE - A WAS NOT DEBITED TO THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDING 31.03.2005. THE PERUSAL OF LIST OF EXPENSES WHICH IS PLACED AT PAGE 17 OF THE PAPER BOOK REFLECTS THE ASSESSEE TO HAVE CLAIMED THE EXPENS ES WERE THOUGH INCURRED IN FINANCIAL YEAR 2005 - 06 RELATE TO THE FINANCIAL YEAR 2004 - 05 . THE FIRST EXPENDITURE IS RAW MATERIAL & COMPONENTS CONSUMED OF RS.66,590/ - , PUBLICITY & SALES PROMOTION OF RS. 3,96,874/ - , VEHICLE TRANSPORTATION EXPENSES OF RS.4,75,5 69/ - , OTHER EXPENSES DEBITED ARE LEGAL & PROFESSIONAL CHARGES OF RS.2,24,088/ - , COURIER CHARGES OF RS.14,141/ - , FREIGHT OCTROI & ENTRY TAX OF RS.19,634/ - ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 6 AND STAFF AND LABOUR WELFARE EXPENSES OF RS. 38,305/ - . THE ASSESSEE HAS ALSO CLAIMED EXHIBITION EXPENS ES OF RS.6,70,200/ - , REPAIRS AND MAINTENANCE OF RS.27,500/ - AND EMPLOYEES TRAVELLING & CONVEYANCE EXPENSES OF RS.52,312/ - , TOTAL EXPENDITURE UNDER THE SAID HEAD TOTALING RS. 21,24,378/ - . FURTHER, THE ASSESSEE CLAIMS THAT VEHICLE TRANSPORTATION EXPENSES OF RS. 79,625/ - INCURRED IN FINANCIAL YEAR 2006 - 07 AND RS. 21,501/ - INCURRED IN FINANCIAL YEAR 2007 - 08 RELATE TO THE ACCOUNTING PERIOD 2004 - 05. THE ASSESSEE HAS PLACED ON RECORD ONLY THE TABULATED DETAILS HEAD - WISE, WHICH WERE CLAIMED BY THE ASSESSEE AS DEDUCT ION BY WAY OF LETTER ITSELF BEFORE THE ASSESSING OFFICER. ADMITTEDLY, THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN GO E TZ (INDIA) LTD. VS. CIT (SUPRA) IS NOT TO BE APPLIED WHERE SIMILAR PLEA IN RELATION TO THE ADDITIONAL EVIDENCE WAS FURNISHED BEFOR E THE ASSESSING OFFICER AND ALSO BEFORE US. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS ASKED TO FILE THE COMPLETE DETAILS OF SAID EXPENSES ALONG WITH BILLS, WHICH JUSTIFY THAT THE EXPENDITURE BOOKED IN FINANCIAL YEAR 2005 - 06, IN ACTUAL FAC T RELATE TO THE FINANCIAL YEAR 2004 - 05. THE ASSESSEE WAS UNABLE TO EXPLAIN THE SAME NOR THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE UNABLE TO EXPLAIN THE SAME NOR THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS ABLE TO FURNISH THE DETAILS BILL - WISE OR JUSTIFY THE SAME. 12. THE TWO ISSUES TO BE DECIDED VIDE PRESENT APPEAL ARE WHETHER WHERE THE ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING AND HAD NOT MADE ANY PROVISION TO ACCOUNT FOR CERTAIN EXPENSES, WHICH WERE DUE TO BE INCURRED BY THE ASSESSEE, BUT WAS INCURRED IN THE SUCCEEDING YEAR WERE ALLOWABLE OR NOT . THE SECOND ISSUE TO BE DECIDED IS WHETHER WHERE THE ASSESSEE HAD NOT MADE ANY CLAIM IN THE PROFIT & LOSS ACCOUNT AND/OR IN THE RETURN OF INCOME, THEN CAN SUCH A PLEA BE RAISED BY WAY OF FILING A LETTER BEFORE THE ASSESSING OFFICER IN THIS REGARD. ADMIT TEDLY, THE ASSESSING OFFICER HAS NO SUCH POWER TO ADMIT SUCH EVIDENCE AND TO LOOK INTO THE SAME. HOWEVER, THE CIT(A) HAS POWER TO ADMIT SUCH DOCUMENT AND TO ADJUDICATE THE SAME. BUT ON PERUSAL OF TABULATED DETAILS FILED BY THE ASSESSEE AND IN THE ABSENCE OF ANY OTHER SUPPORTING EVIDENCE, WE FIND NO MERIT IN THE CLAIM OF ASSESSEE IN THIS REGARD. THE ASSESSEE HAS FAILED TO FURNISH ON RECORD THE COMPLETE DETAILS IN RESPECT OF EACH OF ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 7 THE EXPENDITURE BOOKED HEAD - WISE WHICH JUSTIFIES ITS CLAIM THAT SO CALLED EXPENDITURE IS RELATABLE TO FINANCIAL YEAR 2004 - 05. IN THE ABSENCE OF THE SAME, WE FIND NO MERIT IN THE CLAIM OF ASSESSEE AND THE SAME IS REJECTED. THE TOTAL EXPENDITURE CLAIMED BY THE ASSESSEE WAS RS. 21,24,378/ - , OUT OF WHICH SUM OF RS.7,95,523/ - WAS CL AIMED IN THE RETURN OF INCOME. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF EXPENDITURE TOTALING RS.7,95,523/ - , BUT HE WAS UNABLE TO DO SO. THE COMPLETE DETAILS OF BALANCE ITEMS TO BE ALLOWED IN THE HANDS OF ASSESSEE ARE ALSO NOT AVAILABLE AND IN THE ABSENCE OF IT BEING ESTABLISHED WHETHER THE SO CALLED EXPENDITURE RELATES TO THE FINANCIAL YEAR 2004 - 05, MERELY BECAUSE THE ASSESSEE HAS MADE SUCH A CLAIM, BY WAY OF FILING A LETTER BEFORE THE ASSESSING OFFICER, W HICH IN TURN, IS SUPPORTED BY CERTIFICATE OF CHARTERED ACCOUNTANT DOES NOT MERIT THE CLAIM TO BE ALLOWED. THE ASSESSEE HAVING FAILED TO DISCHARGE HIS ONUS OF ESTABLISHING THE MERITS OF ITS CLAIM, THE SAME IS REJECTED AND ADDITION OF RS.14,29,981/ - IS UPHE LD. THE GROUND OF APPEAL NO.3 RAISED BY THE ASSESSEE IS THUS, DISMISSED. 13. THE ISSUE IN GROUND OF APPEAL NO.4 RAISED BY THE ASSESSEE IS AGAINST THE DISALLOWANCE OF RS.2,50,000/ - OUT OF AIRCRAFT RUNNING AND MAINTENANCE EXPENDITURE. 14. BRIEFLY, THE FAC TS RELATING TO THE ISSUE ARE THAT, THE ASSESSEE HAD INCURRED EXPENDITURE OF RS.41,17,483/ - ON AIRCRAFT RUNNING AND MAINTENANCE CHARGES. THE EXPLANATION OF THE ASSESSEE VIS - - VIS ITS USE WAS THAT IT WAS MAINLY USED FOR CARRYING THE EMPLOYEES OF THE COMPANY FROM ITS AKURDI FACTORY TO PITHAMPUR FACTORY AND VICE VERSA. FURTHER, THE AIRCRAFT WAS ALSO USED FOR THE VISIT OF SENIOR EXECUTIVES TO VARIOUS LOCATIONS OF VENDORS AND DEALERS. THE EXPENSES WERE INCURRED IN THE ORDINARY COURSE OF BUSINESS, WHOLLY AND EX CLUSIVELY FOR THE BUSINESS PURPOSE. THE ASSESSING OFFICER ON THE OTHER HAND, WAS OF THE VIEW THAT IT WAS DIFFICULT TO ASCERTAIN WHETHER THE ENTIRE EXPENDITURE WAS FOR BUSINESS PURPOSES OR NOT. HE FURTHER HELD THAT THE ELEMENT OF PERSONAL USE OF THE DIREC TORS COULD NOT BE RULED OUT AND THEREFORE AN ESTIMATED ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 8 DISALLOWANCE OF RS.2,50,000/ - WAS MADE OUT OF THE SAME, WHICH WAS UPHELD BY THE CIT(A). 15. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A) BY WAY OF GROUND OF APPEAL NO.4. 16. THE LEARNED AUTH ORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT NO DISALLOWANCE OUT OF AIRCRAFT RUNNING AND MAINTENANCE EXPENSES IS MERITED FOR NON - BUSINESS PURPOSES, WHERE THE ASSESSEE WAS A COMPANY. IN THIS REGARD, RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE HONBLE GUJARAT HIGH COURT IN SAYAJI IRON & ENGG. CO. VS. CIT (2002) 121 TAXMAN 43 (GUJARAT) AND PUNE BENCH OF TRIBUNAL IN LAVRIDS KNUDSEN MASKINFABRIK (INDIA) LTD. VS. ADDL.CIT (2007) 11 SOT 3 (PUNE) . 17. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR T HE REVENUE ON THE OTHER HAND, PLACED RELIANCE ON THE ORDER OF CIT(A). PLACED RELIANCE ON THE ORDER OF CIT(A). 18. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE LIMITED ISSUE ARISING IN THE PRESENT APPEAL IS AGAINST THE DISALLOWANCE OF RS.2,50,000/ - MADE OUT OF AIRCRAFT RUNNIN G AND MAINTENANCE EXPENSES. ADMITTEDLY, THE ASSESSEE IS A LIMITED COMPANY AND HAD CLAIMED THE SAID EXPENDITURE TO BE INCURRED ON ITS EMPLOYEES AND THE DIRECTORS. THE ASSESSEE HAD TWO UNITS; ONE AT AKURDI AND ANOTHER AT PITHAMPUR AND FOR TRANSPORTATION OF EMPLOYEES FROM ONE UNIT TO ANOTHER, THE SERVICES OF AIRCRAFT WERE UTILIZED. FURTHER, THE DIRECTORS OF THE ASSESSEE COMPANY ALSO USED THE SERVICES FOR VISITING THE VENDORS, ETC. THE ASSESSING OFFICER HAD MADE THE DISALLOWANCE FOR NON - BUSINESS PURPOSES. THE ASSESSEE BEFORE US IS A LIMITED COMPANY AND THE COURTS HAVE TIME AND AGAIN HELD THAT NO DISALLOWANCE OF ANY EXPENDITURE CAN BE MADE FOR NON - BUSINESS PURPOSE FOR PERSONAL USE IN THE HANDS OF COMPANY. ACCORDINGLY, WE FIND NO MERIT IN THE ORDER OF CIT(A) IN THIS REGARD AND WE DIRECT THE ASSESSING OFFICER TO ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 9 ALLOW THE EXPENDITURE OF RS.2,50,000/ - . THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, PARTLY ALLOWED. 19. THE ASSESSEE IN ITA NO.1290/PN/2014 RELATING TO ASSESSMENT YEAR 2006 - 07 HAS RAISED T HE FOLLOWING GROUNDS OF APPEAL: - ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, (1) DISALLOWANCE OF AMORTIZATION OF LEASE CHARGES OF RS.44,528/ - (A) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - V, PUNE [HEREINAFTER REFERRED TO AS CIT(A)] HAS LEGALLY ERRED IN UPHOLDING THE ACTION OF LEARNED ASSESSING OFFICER (AO) THAT THE YEARLY AMORTISATION OF LEASE CHARGES OF RS. 44,528 IN RESPECT OF LEASEHOLD LAND AT PITHAMPUR IS NOT AN ALLOWABLE DEDUCTION IN COMPUTING THE TAXABLE INCOME. (B) IT IS PRAYED THAT THE LEARNED AO BE DIRECTED TO ALLOW THE DEDUCTION AS THE LEASE PREMIUM PAID IS IN THE NATURE OF ADVANCE RENT AND THUS ALLOWABLE AS REVENUE EXPENDITURE. (2) AD HOC DISALLOWANCE OF RS.3,24,454/ - ON ACCOUNT OF GIFTS AND PRESENTATION ARTICLES. (A) TH E LEARNED CIT(A) HAS LEGALLY ERRED IN UPHOLDING THE AD - HOC DISALLOWANCE OF RS. 3,24,454 BEING THE 25% OF EXPENDITURE INCURRED ON GIFTS AND PRESENTATION ARTICLE AS NON BUSINESS EXPENDITURE. (B) IT IS PRAYED THAT THE LEARNED AO BE DIRECTED TO DELETE THE DI SALLOWANCE AS THE EXPENDITURE IS INCURRED FOR THE PURPOSE OF BUSINESS AND THUS ALLOWABLE AS DEDUCTION. BUSINESS AND THUS ALLOWABLE AS DEDUCTION. (3) DEDUCTION OF RS.16,01,516/ - BEING THE EXPENDITURE FOR THE YEAR UNDER CONSIDERATION BUT ACCOUNTED IN BOOKS IN SUCCEEDING YEARS: (A) THE LEARNED C IT(A) ERRED IN UPHOLDING THE ACTION OF THE AO FOR NOT ALLOWING THE CLAIM OF THE APPELLANT IN RESPECT OF EXPENDITURE OF RS. 16,01,516 INCURRED FOR THE F.Y. 2005 - 06 RELEVANT TO A.Y. 2006 - 07 WHICH WAS NOT CLAIMED IN THE RETURN OF INCOME. (B) THE LEARNED CI T(A) ERRED IN NOT ALLOWING GENUINE CLAIM OF APPELLANT MADE DURING THE COURSE OF ASSESSMENT EVEN WHEN IT IS WITHIN THE POWERS OF THE CIT(A) TO ALLOW SUCH CLAIMS. (C) HE FURTHER OUGHT TO HAVE APPRECIATED THAT GENUINENESS OF THE CLAIM OF THE APPELLANT COMP ANY HAS NOT BEEN QUESTIONED / CHALLENGED BY THE ASSESSING OFFICER AND THEREFORE CIT(A) SHOULD HAVE DECIDED THE ISSUE IN LIGHT OF THE MERITS AND LEGAL POSITION. (D) IT IS PRAYED THAT THE LEARNED AO BE DIRECTED TO ALLOW THE CLAIM AS THE EXPENDITURE PERTAI NS TO THE YEAR UNDER CONSIDERATION, BUT ACCOUNTED IN SUCCEEDING YEARS AS PRIOR PERIOD EXPENDITURE. (4) AD HOC DISALLOWANCE OF RS.2,50,000 ON ACCOUNT OF AIRCRAFT RUNNING AND MAINTENANCE EXPENDITURE: (A) THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTION O F THE AO IN MAKING AD - HOC DISALLOWANCE OF RS. 2,50,000 BEING THE EXPENDITURE INCURRED ON AIRCRAFT RUNNING AND MAINTENANCE, TREATING THE SAME AS NOT INCURRED FOR THE PURPOSE OF BUSINESS. (B) IT IS PRAYED THAT THE AO BE DIRECTED TO DELETE THE DISALLOWANC E AS THE EXPENDITURE HAS BEEN INCURRED FOR THE PURPOSE OF BUSINESS AND THUS ALLOWABLE AS DEDUCTION. ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 10 20. THE GROUND OF APPEAL NO.1 RAISED BY THE ASSESSEE IS NOT PRESSED AND HENCE, THE SAME IS DISMISSED AS NOT PRESSED. 21. THE ISSUE IN GROUND OF APPEAL N O.3 RAISED BY THE ASSESSEE IS IDENTICAL TO THE ISSUE IN GROUND OF APPEAL NO.3 RAISED BY THE ASSESSEE IN ASSESSMENT YEAR 2005 - 06 . FOLLOWING THE SAME PARITY OF REASONING, THE DISALLOWANCE MADE ON ACCOUNT OF EXPENSES RELATABLE TO THE YEAR CLAIMED TO BE BOOKE D IN THE SUCCEEDING YEAR IS NOT ALLOWED AND DISMISSED. 22. NOW, COMING TO THE ISSUE IN GROUNDS OF APPEAL NO.2 AND 4 RAISED BY THE ASSESSEE. 23. THE ISSUE IN GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE IS AGAINST THE DISALLOWANCE OF RS.3,24,454/ - ON AC COUNT OF GIFTS AND PRESENTATION ARTICLES. FURTHER, DISALLOWANCE OF RS.3,24,454/ - ON AC COUNT OF GIFTS AND PRESENTATION ARTICLES. FURTHER, DISALLOWANCE OF RS.2,50,000/ - IS OUT OF AIRCRAFT RUNNING AND MAINTENANCE EXPENSES. 24. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE IN THIS REGARD POINTED OUT THAT THE ISSUE OF DISALLOWANCE OUT OF GIFT AND PRESENTATION ARTICLES WAS DECIDED AGAINST THE ASSESSEE BY THE TRIBUNAL IN ASSESSEES OWN CASE RELATING TO ASSESSMENT YEAR 2003 - 04. HOWEVER, FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS PAID FRINGE BENEFIT TAX (FBT) ON THE SAID AMOUNT OF GIFTS AND PRESENTATION ARTICLES AND HENCE, NO DISALLOWANCE COULD BE MADE OUT OF SAID EXPENDITURE. SIMILAR PLEA WAS RAISED IN RESPECT OF AIRCRAFT RUNNING AND MAINTENANCE EXPENSES BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE. OUR ATTENTION WA S DRAWN TO THE DETAILS OF FBT PAID IN RESPECT OF AIRCRAFT RUNNING AND MAINTENANCE EXPENSES AND ALSO GIFTS AND PRESENTATION ARTICLES. THE COPY OF CALCULATION OF FBT AS ON 31.03.2006 IS PLACED AT PAGES 29 AND 30 ALONG WITH COPY OF RETURN FILED FOR PAYMENT O F FBT AT PAGES 31 TO 33 OF THE PAPER BOOK. ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 11 25. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF CIT(A). 26. ON PERUSAL OF RECORD AND ISSUE ARISING VIDE PRESENT GROUNDS OF APPEAL NO.2 AND 4, WE FIND THAT THOUGH IN THE EARLIER YEARS DISALLOWANCE WAS MADE ON ACCOUNT OF GIFTS AND PRESENTATION ARTICLES, BUT THERE IS CERTAIN CHANGE IN THE FACTUAL ASPECTS IN THE YEAR UNDER APPEAL. THE ASSESSEE HAD CLAIMED THE SAID EXPENDITURE AS BUSINESS EXPENDITURE AND HAD ALSO PAID FBT ON THE SAID EXPENDITURE WHICH HAS BEEN ACCEPTED BY THE ASSESSING OFFICER. IN OTHER WORDS, THE EXPENDITURE BEING BUSINESS EXPENDITURE, HAS BEEN ACCEPTED BY ACCEPTING THE VALUE OF FBT DECLARED BY THE ASSESSEE FOR FINANCIAL YEAR 2005 - 06. FURTHER, EVEN THE AIRCRAFT RUNNING AND MAINTENANCE EXPENSES HAVE BEEN INCLUDED BY THE ASSESSEE AS PART OF THE VALUE OF EXPENDITURE, ON WHICH FBT IS TO BE PAID. SIMILARLY, AS IN THE CASE OF GIFTS AND PRESENTATION ARTICLES, EVEN ON THE VALUE OF AIRCRAFT RUNNING AND MAINTENAN CE EXPENSES, THE VALUE OF FBT HAS BEEN VALUE OF AIRCRAFT RUNNING AND MAINTENAN CE EXPENSES, THE VALUE OF FBT HAS BEEN DECLARED BY THE ASSESSEE AND NO ADDITION IN THIS REGARD HAS BEEN MADE BY THE ASSESSING OFFICER. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND MERIT IN THE CLAIM OF ASSESSEE THAT NO DI SALLOWANCE COULD BE MADE OUT OF SAID EXPENSES, HOLDING THE SAME TO BE FOR NON - BUSINESS PURPOSES. THE CBDT IN CIRCULAR NO.8/2005, DATED 29.08.2005 HAD CLARIFIED THAT WHERE ANY PART OF EXPENSES IS DISALLOWED UNDER SECTION 37 OF THE ACT, THEN THERE WOULD NOT BE AUTOMATICALLY LIABLE TO FBT. APPLYING THE SAID SIMIL E , WHERE THE ASSESSEE HAD PAID FBT ON CERTAIN ITEMS OF EXPENDITURE AND FBT HAS BEEN LEVIED ON SUCH EXPENDITURE, THEN NO PART OF EXPENDITURE COULD BE DISALLOWED UNDER SECTION 37(1) OF THE ACT. ACCORD INGLY, WE ALLOW THE CLAIM OF ASSESSEE IN THIS REGARD AND GROUNDS OF APPEAL NO.2 AND 4 ARE THUS, ALLOWED. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, PARTLY ALLOWED. 27. THE ASSESSEE IN ITA NO.1291/PN/2014 , RELATING TO ASSESSMENT YEAR 2007 - 08 H AS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 12 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, (1) DISALLOWANCE OF AMORTIZATION OF LEASE CHARGES OF RS.44,528/ - (A) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - V, PUNE [HEREINAFTER REFERRED TO AS CIT(A)] HAS LEGALLY ERRED IN UPHOLDING THE ACTION OF LEARNED ASSESSING OFFICER (AO) THAT THE YEARLY AMORTISATION OF LEASE CHARGES OF RS. 44,528 IN RESPECT OF LEASEHOLD LAND AT PITHAMPUR IS NOT AN ALLOWABLE DEDUCTION IN COMPUTING THE TAXABLE INCOME. (B) IT IS PRAYED THAT THE LEARNED AO BE DIRECTED TO ALLOW THE DEDUCTION AS THE LEASE PREMIUM PAID IS IN THE NATURE OF ADVANCE RENT AND THUS ALLOWABLE AS REVENUE EXPENDITURE. (2) AD HOC DISALLOWANCE OF RS.5,00,000 ON ACCOUNT OF AIRCRAFT RUNNING AND MAINTENAN CE EXPENDITURE: (A) THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTION OF THE AO IN MAKING AD - HOC DISALLOWANCE OF RS.5,00,000 BEING THE EXPENDITURE INCURRED ON AIRCRAFT RUNNING AND MAINTENANCE, TREATING THE SAME AS NOT INCURRED FOR THE PURPOSE OF BUSIN ESS. (B) IT IS PRAYED THAT THE AO BE DIRECTED TO DELETE THE DISALLOWANCE AS THE EXPENDITURE HAS BEEN INCURRED FOR THE PURPOSE OF BUSINESS AND THUS ALLOWABLE AS DEDUCTION. (3) DISALLOWANCE OF SPONSORSHIP EXPENSES OF RS. 14,88,700/ - (A) THE LEARNED C IT(A) ERRED IN UPHOLDING THE ACTION OF THE AO IN DISALLOWING RS.14,88,700, CONSIDERING THE EXPENDITURE ON ACCOUNT OF CORPORATE SPONSORSHIP AS DONATIONS AND NOT FOR THE PURPOSE OF BUSINESS. (B) IT IS PRAYED THAT THE AO BE DIRECTED TO DELETE THE DISALLOW ANCE AS THE EXPENDITURE HAS BEEN INCURRED FOR THE PURPOSE OF BUSINESS AND THUS ALLOWABLE AS DEDUCTION. THUS ALLOWABLE AS DEDUCTION. 28. THE GROUND OF APPEAL NO.1 RAISED BY THE ASSESSEE AS IN THE EARLIER YEARS, IS NOT PRESSED AND HENCE, THE SAME IS DISMISSED AS NOT PRESSED. 29. THE ISSUE IN GROUND OF APPEAL NO.2 IS AGAINST THE DISALLOWANCE OF RS.5,00,000/ - OUT OF AIRCRAFT RUNNING AND MAINTENANCE EXPENSES. 30. THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS PAID FRINGE BENEFIT TAX ON THE SAID EXPENDITURE AND FOLLOWING OUR DECISION WITH REGARD TO GROUNDS OF APPEAL NO.2 AND 4 RAISED IN ASSESSMENT YEAR 2006 - 07, WE ALLOW THE CLAIM OF ASSESSEE. 31. THE ISSUE IN GROUND OF APPEAL NO.3 RAISED BY THE ASSESSEE IS AGAINST THE DISALLOWANCE OF SPONSORSHIP EXPENSES OF RS.14,88,700/ - . ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 13 32. BRIEFL Y, THE FACTS RELATING TO THE ISSUE ARE THAT, FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD CLAIMED TOTAL EXPENDITURE OF RS.14,88,700/ - ON ACCOUNT OF SPONSORSHIP EXPENSES. BEFORE THE ASSESSING OFFICER, THE ASSESSEE CLAIMED THAT THE EXPENSES WERE IN TH E NATURE OF PUBLICITY AND CREATED GOODWILL FOR THE ASSESSEE COMPANY IN THE MARKET. IN THE EVENTS, THE ASSESSEE HAD DISPLAYED ITS BANNER, LOGOS WHICH IN TURN, WERE ADVERTISEMENT OF ITS PRODUCTS. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE EXPENSES WERE NOT RELATED TO THE BUSINESS OF ASSESSEE AND WERE MORE IN THE NATURE OF SOCIAL EXPENSES WHICH WERE NOT REQUIRED FOR DAY - TO - DAY RUNNING OF THE BUSINESS. ACCORDINGLY, SUM OF RS.14,88,700/ - WAS DISALLOWED BEING NON - BUSINESS EXPENDITURE. 33. THE CIT(A) UPHEL D THE ORDER OF ASSESSING OFFICER OBSERVING THAT THE SPONSORSHIP EXPENDITURE INCURRED BY THE ASSESSEE WAS DONE SINCE SUCH ORGANIZATIONS HAD APPROACHED THE ASSESSEE FOR SPONSORSHIP OR DISPLAY OF ADVERTISEMENT FOR PAYMENT. IN NONE OF THE CASES, THE BUSINESS EXIGENCY WAS SHOWN AS A FACTOR FOR CONSIDERATION. NONE OF THE CASES, THE BUSINESS EXIGENCY WAS SHOWN AS A FACTOR FOR CONSIDERATION. THE CIT(A) WAS OF THE VIEW THAT THE EXPENDITURE WAS BASICALLY IN THE NAME OF DONATION AND WHICH COULD NOT BE SAID TO HAVE INCURRED FOR THE PURPOSE OF BUSINESS. 34. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 35. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE REFERRED TO THE DETAILS OF SPONSORSHIP EXPENSES PLACED AT PAGE 5 3 OF THE PAPER BOOK AND POINTED OUT THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF MULTI UTILITY VEHICLES AND THE FIRST EXPENDITURE WAS IN RESPECT OF AWARENESS ON ENVIRONMENT AND SINCE THE ASSESSEE WAS ENGAGED IN THE PRODUCTION OF ENVIRONMENT - FRIENDLY VEHICLES, THE SPONSORSHIP PAID WAS FOR ADVERTISING ITS PRODUCTS. SIMILAR PROPOSITION WAS RAISED IN RESPECT OF OTHER EXPENSES ALSO. ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 14 36. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, PLACED RELIANCE ON THE ORDER OF CIT(A) IN THIS REGARD. 37. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. UNDER THE PROVISIONS OF SECTION 37(1) OF THE ACT, ANY EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS IS TO BE ALLOWED AS DEDUCTION IN THE HANDS OF ASSESSEE, WHILE COMPUTING THE INCOME UNDER THE HEAD PROFITS & GAINS OF BUSINESS. THE ONUS IS UPON THE ASSESSEE TO ESTABLI SH THAT THE EXPENDITURE HAS BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. HOWEVER, THE COURTS HAVE TIME AND AGAIN ALSO HELD THAT AN ADJUDICATING AUTHORITY CANNOT SIT IN THE ARMCHAIR OF BUSINESSMAN TO JUDGE WHETHER A PAR TICULAR EXPENDITURE INCURRED BY BUSINESSMAN WAS NECESSARY FOR THE PURPOSE OF BUSINESS. THE ROLE OF ADJUDICATING AUTHORITY IS TO CONSIDER THE CASE OF ASSESSEE AND ALLOW THE CLAIM IN LINE WITH THE PROVISIONS OF THE ACT. THE SPONSORSHIP EXPENSES CLAIMED BY THE ASSESSEE ARE CLAIMED TO BE IN THE NATURE OF PUBLICITY AND ADVERTISEMENT I.E. IN ORDER TO CREATE AWARENESS OF NOT ONLY THE NAME OF PUBLICITY AND ADVERTISEMENT I.E. IN ORDER TO CREATE AWARENESS OF NOT ONLY THE NAME OF ASSESSEE BUT ALSO ITS PRODUCTS. ONCE EXPENDITURE HAS BEEN INCURRED BY THE ASSESSEE IN THAT FIELD, THE SAME IS AN EXPENDIT URE INCURRED FOR THE PURPOSE OF CARRYING ON FOR THE BUSINESS AND THE SAME MERITS TO BE ALLOWED. 38. NOW, COMING TO THE DETAILS OF SPONSORSHIP EXPENSES INCURRED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION . THE FIRST SUM OF RS.3 LAKHS IS CLAIMED TO HAVE INCURRED FOR DISPLAYING THE NAME OF COMPANY DURING BALLET OF ENVIRONMENT AT SIRIPORT, NEW DELHI . THIS PROGRAMME WAS ORGANIZED ON AWARENESS OF ENVIRONMENT AND THE ASSESSEE CLAIMS THAT SINCE IT WAS ENGAGED IN THE MANUFACTURE OF ENVIRONMENT - FRIENDLY VEH ICLES AND THIS WAS RIGHT PLATFORM FOR ADVERTISEMENT. ANOTHER SUM OF RS.40,000/ - WAS PAID IN IMA NATIONAL MANAGEMENT ANNUAL CONVENTION. FURTHER ORGANIZATIONS LIKE PUNE CITY POLICE CONCERT AT RS.10,000/ - , PUNE POLICE WELFARE ASSOCIATION AT RS.25,000/ - , MUS IC VOCAL CONCERT AT PUNE AT RS. 10,000/ - AND SPONSORSHIP OF PROJECT BY RVCE MINI BAJAJ AT RS.1 LAKH AND SPONSORSHIP OF DANDIYA COMPETITION OF RS.30,000/ - . ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 15 THE AIM OF THE ASSESSEE IN SPONSORING THESE EXPENSES WAS FOR ADVERTISING ITS NAME AND FOR ITS PRODUCT S AND SINCE THE EXPENDITURE HAS BEEN INCURRED IN THE FIELD OF ADVERTISEMENT, MERELY BECAUSE IT HAS BEEN PAID TO INDIVIDUAL CONCERNS, DOES NOT MERIT ITS DISALLOWANCE IN THE HANDS OF ASSESSEE. A NOTHER EXPENDITURE CLAIMED BY THE ASSESSEE IS ON ACCOUNT OF EVE NT AT DEVI AHILYABAI MAHOTSAV AT INDORE. THE ASSESSEE HAD INCURRED SUM OF RS.5 LAKHS BY WAY OF SPONSOR ING THE SAID FUNCTION, WHEREIN THE ASSESSEE WAS ALLOWED TO PUT DISPLAY BOARDS OF ITS PRODUCTS . S UCH DISPLAY OF PRODUCTS OF THE ASSESSEE IN SUCH EVENTS C REATES AN AWARENESS ABOUT THE COMPANY AND ITS PRODUCTS AND IS CLEARLY IN THE LINE OF ADVERTISEMENT OF PRODUCTS AND HENCE, THE EXPENDITURE INCURRED IS TO BE ALLOWED AS BUSINESS EXPENDITURE UNDER SECTION 37(1) OF THE ACT. ANOTHER EXPENDITURE INCURRED BY THE ASSESSEE WAS OF RS. 4,63,700/ - IN BRANDING OF DLE CUP AT ABUDHABI . THE ASSESSEE IN THIS REGARD CLAIMED THAT IT EXPORTS VEHICLES AND SPARES TO VARIOUS GULF COUNTRIES AND AS PART OF ITS ONGOING ADVERTISEMENT SERIES, IT HAD ADVERTISED THE PRODUCTS IN THE GUL F REGION. THE ASSESSEE IN THE EXPLANATION FILED HAS FURTHER STATED THAT MATCH BETWEEN INDIA AND PAKISTAN PROVIDED EXPLANATION FILED HAS FURTHER STATED THAT MATCH BETWEEN INDIA AND PAKISTAN PROVIDED HUGE VIEWERSHIP ACROSS ASIA INCLUDING THE GULF REGION AND THUS, WAS A HUGE PLATFORM TO ADVERTISE ITS PRODUCTS. THE NAME OF THE COMPANY WAS C ONTINUOUSLY FLASHED ON ELECTRONIC BILLBOARDS ACROSS BOUNDARY AND WHICH IN TURN, WAS ADVERTISING THE PRODUCTS OF COMPANY . IN THE ENTIRETY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, WHERE THE ASSESSEE HAS INCURRED EXPENDITURE FOR THE PURPOSE OF ADVERTISEMEN T OF ITS PRODUCTS, WHICH IN TURN, WOULD PROMOTE THE BUSINESS INTEREST OF THE ASSESSEE COMPANY, WE HOLD THAT THE EXPENDITURE INCURRED BY THE ASSESSEE IS DULY ALLOWABLE UNDER SECTION 37(1) OF THE ACT. CONSEQUENTLY, THE GROUND OF APPEAL NO.3 RAISED BY THE AS SESSEE IS ALLOWED. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, PARTLY ALLOWED. 39. THE ASSESSEE IN ITA NO. 1292/PN/2014 , RELATING TO ASSESSMENT YEAR 2008 - 09 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, (1) DISALLOWANCE OF AMORTIZATION OF LEASE CHARGES OF RS.82,209/ - ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 16 (A) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - V, PUNE [HEREINAFTER REFERRED TO AS CIT(A)] HAS LEGALLY ERRED IN UPHOLDING THE ACTION OF LEARNED ASSESSING OFFICER (AO) THAT THE YEARLY AMORTISATION OF LEASE CHARGES OF RS.82,209 IN RESPECT OF LEASEHOLD LAND AT PITHAMPUR IS NOT AN ALLOWABLE DEDUCTION IN COMPUTING THE TAXABLE INCOME. (B) IT IS PRAYED THAT THE LEARNED AO BE DIRECTED TO ALLOW THE DEDUCTION AS THE LEASE PREMIU M PAID IS IN THE NATURE OF ADVANCE RENT AND THUS ALLOWABLE AS REVENUE EXPENDITURE. (2) AD HOC DISALLOWANCE OF RS.2,76,680/ - ON ACCOUNT OF GIFTS AND PRESENTATION ARTICLES. (A) THE LEARNED CIT(A) HAS LEGALLY ERRED IN UPHOLDING THE AD - HOC DISALLOWANCE O F RS.2,76,680 BEING THE 25% OF EXPENDITURE INCURRED ON GIFTS AND PRESENTATION ARTICLE AS NON BUSINESS EXPENDITURE. (B) IT IS PRAYED THAT THE LEARNED AO BE DIRECTED TO DELETE THE DISALLOWANCE AS THE EXPENDITURE IS INCURRED FOR THE PURPOSE OF BUSINESS AND THUS ALLOWABLE AS DEDUCTION. (3) DEDUCTION OF RS.12,80,726/ - BEING THE EXPENDITURE FOR THE YEAR UNDER CONSIDERATION BUT ACCOUNTED IN BOOKS IN SUCCEEDING YEARS: (A) THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTION OF THE AO FOR NOT ALLOWING THE CLAIM O F THE APPELLANT IN RESPECT OF EXPENDITURE OF RS.12,80,726 INCURRED FOR THE F.Y. 2007 - 08 RELEVANT TO A.Y. 2008 - 09 WHICH WAS NOT CLAIMED IN THE RETURN OF INCOME. (B) THE LEARNED CIT(A) ERRED IN NOT ALLOWING GENUINE CLAIM OF APPELLANT MADE DURING THE COURS E OF ASSESSMENT EVEN WHEN IT IS WITHIN THE POWERS OF THE CIT(A) TO ALLOW SUCH CLAIMS. (C) HE FURTHER OUGHT TO HAVE APPRECIATED THAT GENUINENESS OF THE CLAIM OF THE APPELLANT COMPANY HAS NOT BEEN QUESTIONED / CHALLENGED BY THE ASSESSING OFFICER AND THER EFORE CIT(A) SHOULD HAVE DECIDED THE THE ASSESSING OFFICER AND THER EFORE CIT(A) SHOULD HAVE DECIDED THE ISSUE IN LIGHT OF THE MERITS AND LEGAL POSITION. (D) IT IS PRAYED THAT THE LEARNED AO BE DIRECTED TO ALLOW THE CLAIM AS THE EXPENDITURE PERTAINS TO THE YEAR UNDER CONSIDERATION, BUT ACCOUNTED IN SUCCEEDING YEARS AS PRIOR PERIOD EXPENDITURE. (4) AD HOC DISALLOWANCE OF RS.15,00,000 ON ACCOUNT OF AIRCRAFT RUNNING AND MAINTENANCE EXPENDITURE: (A) THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTION OF THE AO IN MAKING AD - HOC DISALLOWANCE OF RS.1,500,000 BEING THE EXPENDI TURE INCURRED ON AIRCRAFT RUNNING AND MAINTENANCE, TREATING THE SAME AS NOT INCURRED FOR THE PURPOSE OF BUSINESS. (B) IT IS PRAYED THAT THE AO BE DIRECTED TO DELETE THE DISALLOWANCE AS THE EXPENDITURE HAS BEEN INCURRED FOR THE PURPOSE OF BUSINESS AND THUS ALLOWABLE AS DEDUCTION. (5) DISALLOWANCE OF SPONSORSHIP EXPENSES OF RS. 4,20,000/ - (A) THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTION OF THE AO IN DISALLOWING RS.4,20,000, CONSIDERING THE EXPENDITURE ON ACCOUNT OF CORPORATE SPONSORSHIP AS DONATIO NS AND NOT FOR THE PURPOSE OF BUSINESS. (B) IT IS PRAYED THAT THE AO BE DIRECTED TO DELETE THE DISALLOWANCE AS THE EXPENDITURE HAS BEEN INCURRED FOR THE PURPOSE OF BUSINESS AND THUS ALLOWABLE AS DEDUCTION. (6) DISALLOWANCE U/S 14A OF THE ACT: (A) THE LEARNED CIT (A) ERRED IN UPHOLDING THE ACTION OF THE AO IN DISALLOWING THE EXPENDITURE OF RS.2,18,76,609/ - UNDER SECTION 14A BY APPLYING RULE 8D WITHOUT ESTABLISHING AND RECORDING COGENT REASONS THAT EXPENDITURE HAS ACTUALLY BEEN INCURRED FOR THE PURPO SE OF ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 17 EARNING EXEMPT INCOME. (B) IT IS PRAYED THAT THE LEARNED AO BE DIRECTED TO RESTRICT THE DISALLOWANCE UNDER SECTION 14A OF THE ACT TO RS.92,609 BEING THE EXPENDITURE INCURRED BY THE APPELLANT FOR EARNING EXEMPT INCOME, (C) WITHOUT PREJUDICE TO THE A BOVE, IN AN UNLIKELY SITUATION OF UPHOLDING THE DISALLOWANCE UNDER SECTION 14A OF THE ACT READ WITH RULE 8D, IT IS PRAYED THAT THE LEARNED AO BE DIRECTED TO EXCLUDE THE FOLLOWING INVESTMENTS FOR THE PURPOSE OF COMPUTING 'AVERAGE VALUE OF INVESTMENTS' A S REQUIRED IN RULE 8D(III) OF THE RULES: INVESTMENTS ON WHICH NO DIVIDEND HAS BEEN EARNED DURING THE YEAR UNDER CONSIDERATION OR CAPABLE OF GIVING ANY DIVIDEND INCOME INVESTMENT ON WHICH TAXABLE INCOME HAS BEEN EARNED STRATEGIC INVESTMENTS IN ALLIED L INE OF BUSINESS, THE INTENTION OF INVESTMENT WHEREIN WAS NOT TO EARN DIVIDEND INCOME (D) WITHOUT PREJUDICE TO THE ABOVE, IN AN UNLIKELY SITUATION OF UPHOLDING THE DISALLOWANCE UNDER SECTION 14A, THE APPELLANT PRAYS THAT THE LEARNED AO BE DIRECTED TO R ESTRICT THE DISALLOWANCE TO 1% OR 2% OF THE DIVIDEND INCOME. (E) WITHOUT PREJUDICE TO THE ABOVE, IN AN UNLIKELY SITUATION OF UPHOLDING DISALLOWANCE UNDER SECTION 14A, THE APPELLANT PRAYS THAT THE LEARNED AO BE DIRECTED TO RESTRICT THE DISALLOWANCE TO INR 6,71,075, BEING THE EXEMPT INCOME EARNED DURING THE YEAR UNDER CONSIDERATION, AS THE DISALLOWANCE CANNOT EXCEED THE EXEMPT INCOME ITSELF. 40. THE GROUND OF APPEAL NO.1 RAISED BY THE ASSESSEE IS NOT PRESSED AND HENCE, THE SAME IS DISMISSED AS NOT PRESSED. 41. THE ISSUE IN GROUNDS OF APPEAL NO.2 AND 4 IS AGAINST THE DISALLOWANCE OF EXPENSES, ON WHICH FBT HAD BEEN PAID IS IDENTICAL TO THE ISSUE IN GROUNDS OF APPEAL NO.2 AND 4 RAISED IN ASSESSMENT YEAR 2006 - 07. FOLLOWING THE SAME PARITY OF REASONING, WE ALL OW THE CLAIM OF ASSESSEE. THE GROUNDS OF APPEAL NO.2 AND 4 ARE THUS, ALLOWED. 42. THE ISSUE IN GROUND OF APPEAL NO.3 RAISED BY THE ASSESSEE IS SIMILAR TO THE ISSUE IN GROUND OF APPEAL NO.3 RAISED IN ASSESSMENT YEAR 2006 - 07 AGAINST THE EXPENSES OF YEAR UN DER CONSIDERATION, WHICH WERE INCURRED AND PAID IN THE SUCCEEDING YEAR, BUT WAS CLAIMED DURING THE YEAR. THIS ISSUE HAS BEEN DECIDED AGAINST THE ASSESSEE IN THE PARAS HEREINABOVE. THE GROUND OF APPEAL NO.3 RAISED BY THE ASSESSEE IS THUS, DISMISSED. ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 18 43. THE ISSUE RAISED VIDE GROUND OF APPEAL NO.5 IS AGAINST THE DISALLOWANCE OF SPONSORSHIP EXPENSES, WHICH IS IDENTICAL TO THE GROUND OF APPEAL NO.3 RAISED IN ASSESSMENT YEAR 2007 - 08. FOLLOWING THE SAME PARITY OF REASONING, WE ALLOW THE CLAIM OF THE ASSESSEE AND GROUND OF APPEAL NO.5 IS THUS, ALLOWED. 44. THE ISSUE IN GROUND OF APPEAL NO.6 RAISED BY THE ASSESSEE IS AGAINST THE DISALLOWANCE MADE UNDER SECTION 14A OF THE ACT. 45. BRIEFLY, THE FACTS RELATING TO THE ISSUE ARE THAT, THE ASSESSEE HAD EARNED DIVIDE ND INCOME AND TAX - FREE INTEREST FROM UTI AMOUNTING TO RS.6,31,250/ - AND RS.39,825/ - , RESPECTIVELY. THE ASSESSEE HAD CLAIMED THE SAID INCOME AS EXEMPT UNDER SECTION 10(34) / 10(35) OF THE ACT. THE ASSESSEE HAD FURTHER ADDED BACK SUM OF RS. 92,609/ - AS EXPE NDITURE IN RELATION TO EARNING OF THE SAID EXEMPT INCOME. THE CLAIM OF THE ASSESSEE BEFORE THE ASSESSING OFFICER WAS THAT THERE WAS NO DIRECT EXPENDITURE ASSESSEE BEFORE THE ASSESSING OFFICER WAS THAT THERE WAS NO DIRECT EXPENDITURE INCURRED FOR EARNING THE EXEMPT INCOME, WHERE THE INVESTMENTS WERE MADE OUT OF ASSESSEES OWN FUNDS I N THE YEARS 1988 - 92. HOWEVER, THE DISALLOWANCE HAD BEEN WORKED OUT CONSIDERING THE RATIO OF INTEREST PAID TO THE TOTAL ASSETS AND 0.5% ON THE INVESTMENTS ON WHICH THE ASSESSEE HAD EARNED EXEMPT INCOME. IT WAS FURTHER STATED BY THE ASSESSEE BEFORE THE ASSE SSING OFFICER THAT THE OTHER INVESTMENTS IN BALANCE SHEET AS ON 31.03.2008 HAD NOT EARNED ANY INCOME WHICH WAS EXEMPT FROM TAX. THE ASSESSING OFFICER HAS TABULATED THE INVESTMENTS MADE BY THE ASSESSEE AS ON 31.03.2008 AT PAGE 12 OF THE ASSESSMENT ORDER, T OTALING RS.72,29,29,549/ - . THE ASSESSEE FURTHER POINTED OUT THAT THE INVESTMENT IN MAN FORCE TRUCKS PVT. LTD. TOTALING RS.70 CRORES WAS MADE FOR BUSINESS PURPOSES AND THE SAME WERE SOLD IN ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 AND THE INCOME ARISING FROM S UCH SALE WAS TAXABLE AND INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE IN THE RESPECTIVE YEARS, HENCE, THE SAID INVESTMENTS CANNOT BE COVERED AS TAX FREE INVESTMENTS. SIMILAR PLEA WAS RAISED IN RESPECT OF INVESTMENTS IN TEMPO FINANCE ( WEST ) PVT. LTD. OF RS .1,06,49,299/ - . THE ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 19 ASSESSING OFFICER REJECTING THE CONTENTION OF THE ASSESSEE, COMPUTED THE DISALLOWANCE UNDER SECTION 14A OF THE ACT IN ACCORDANCE WITH FORMULA GIVEN BY RULE 8D OF THE INCOME TAX RULES, 1962. THE EXPENDITURE IN RELATION TO THE EXEMPT IN COME WAS COMPUTED AT RS. 2,18,76,609/ - AND THE SAME WAS DISALLOWED UNDER SECTION 14A OF THE ACT. 46. THE CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER OBSERVING THAT WORKING OF DISALLOWANCE BY THE ASSESSEE WAS INCORRECT AS IT HAS NOT TAKEN INTO CONSIDERATIO N THE TOTAL INVESTMENT OF RS.72.29 CRORES. 47. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 48. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE BEFORE US POINTED OUT THAT THE ASSESSEE IN FINANCIAL YEAR S 2006 - 09 HAD MADE STRATEGIC INVESTM ENT IN THE JOINT VENTURE COMPANY I.E. MAN FORCE TRUCKS PVT. LTD. HE FURTHER POINTED OUT THAT THE PROFIT VENTURE COMPANY I.E. MAN FORCE TRUCKS PVT. LTD. HE FURTHER POINTED OUT THAT THE PROFIT ON SALE OF INVESTMENT IN SUBSIDIARY COMPANY WAS OFFERED TO TAX IN THE ASSESSMENT YEAR 2009 - 10 TO THE TUNE OF ABOUT RS.295 CRORES AS AGAINST INVESTMENT OF RS.290 CRORES AND SOME OF SHARES WERE SOLD AND THE SAME WERE OFFERED TO CAPITAL GAINS. FURTHER, INVESTMENT WAS MADE IN ANOTHER JV IN ASSESSMENT YEAR 2009 - 10. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE STRESSED THAT THE ASSESSING OFFICER H AD MADE THE DISALLOWANCE UNDER SECTION 14A OF THE ACT ON ACCOUNT OF INVESTMENTS WITHOUT TAKING INTO CONSIDERATION THE FACT OF BUSINESS CONSIDERATION IN MAKING THE AFORESAID INVESTMENTS. HE FURTHER POINTED OUT THAT THE CIT(A) HAD DISALLOWED THE CLAIM OF AS SESSEE I N TURN, RELYING ON THE RATIO LAID DOWN BY SPECIAL BENCH OF DELHI TRIBUNAL IN THE CASE OF CHEMINVEST LTD. VS. ITO REPORTED IN 121 ITD 318 (DELHI), WHEREAS THE SAID DECISION HAS BEEN OVERTURNED BY THE HONBLE DELHI HIGH COURT IN CHEMINVEST VS. CIT RE PORTED IN 378 ITR 33 (DEL) . HE FURTHER STATED THAT WHERE STRATEGIC INVESTMENTS HAVE BEEN MADE BUT NOT FOR EARNING ANY EXEMPT INCOME, THEN NO DISALLOWANCE IS TO BE MADE UNDER SECTION 14A OF THE ACT. IN THIS REGARD, HE PLACED RELIANCE ON THE DECISION OF ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 20 HO NBLE DELHI HIGH COURT IN CIT VS. ORIENTAL STRUCTURAL ENGINEERS REPORTED IN 216 TAXMAN 92 (DEL.) . 49. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, PLACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. 50. WE HAVE HEARD THE RIV AL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING VIDE GROUND OF APPEAL NO.6 IS IN RELATION TO THE DISALLOWANCE TO BE COMPUTED UNDER SECTION 14A OF THE ACT. THE PROVISIONS OF SECTION 14A OF THE ACT ARE ATTRACTED WHERE THE ASSESSEE HAS EARNED INCOM E WHICH DOES NOT FORM PART OF ITS TOTAL INCOME. THE SECTION THUS, PROVIDED THAT IN RESPECT OF SUCH INCOME, WHICH IS EXEMPT FROM TAX, THEN THE EXPENDITURE RELATABLE TO SUCH INCOME IS NOT BE ALLOWED AS DEDUCTION. FURTHER, RULE 8D OF INCOME TAX RULES (IN SH ORT THE RULES) PROVIDED THE FORMULA FOR WORKING OUT THE DISALLOWANCE. THE BASIS FOR COMPUTING THE DISALLOWANCE AS PER RULE 8D OF THE RULES IS THE TOTAL INVESTMENT MADE BY THE ASSESSEE IN SUCH ASSETS, ON WHICH THE INCOME ARISING THE TOTAL INVESTMENT MADE BY THE ASSESSEE IN SUCH ASSETS, ON WHICH THE INCOME ARISING IS NOT INCLUDABLE IN THE TOTAL INCOME. THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAD DECLARED DIVIDEND INCOME AND TAX FREE INTEREST INCOME FROM UTI OF RS.6,31,250/ - AND RS.39,825/ - RESPECTIVELY. THE SAID INCOME IS EXEMPT FROM TAX. IN RELATION TO THE SAID INCOME, THE ASSESSE E ON ITS OWN MOTION HAD ADDED BACK SUM OF RS.92,609/ - AS EXPENDITURE RELATABLE TO EARNING OF EXEMPT INCOME. THE ASSESSING OFFICER ON THE OTHER HAND, CONSIDERED THE TOTAL INVESTMENTS MADE BY THE ASSESSEE AS ON 31.03.2008 TOTALING RS. 72,29,29,549/ - . THE CL AIM OF THE ASSESSEE VIS - - VIS ABOVE SAID INVESTMENTS IS THAT THE STRATEGIC INVESTMENTS WERE MADE AS PART OF JVS FOR CARRYING OUT ITS BUSINESS . I N RESPECT OF INVESTMENT IN MAN FORCE TRUCKS PVT. LTD ., TOTALING OF RS.70 CRORES, THE ASSESSEE EXPLAINED THAT TH E GAIN ARISING FROM THE SAID INVESTMENT WAS DECLARED AS INCOME IN THE RESPECTIVE YEARS. THOUGH THE INVESTMENT WAS BY WAY OF SHARE CAPITAL IN JV OF MAN FORCE TRUCKS PVT. LTD., THE SAME CANNOT TAKE THE COLOUR OF INVESTMENTS, INCOME FROM WHICH IS EXEMPT FROM TAX AND HENCE, THE PROVISIONS OF SECTION 14A OF THE ACT ARE ATTRACTED. THE ASSESSEE HAD ON THE OTHER HAND, ALSO DECLARED THE HUGE PROFITS ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 21 ON SALE OF ITS INVESTMENTS IN THE SUBSIDIARY COMPANY IN THE RESPECTIVE YEARS AND ACCORDINGLY, THERE IS NO MERIT IN T HE STAND OF ASSESSING OFFICER IN INCLUDING THE SAME AS PART OF INVESTMENTS FOR WORKING OUT THE DISALLOWANCE UNDER RULE 8D OF THE RULES. THE HONBLE DELHI HIGH COURT IN CIT VS. ORIENTAL STRUCTURAL ENGINEERS (P.) LTD. (2013) 35 TAXMANN.COM 210 (DELHI) HAD H ELD THAT WHERE MAJOR INVESTMENT WAS MADE IN A SUBSIDIARY COMPANY TO FORM SPECIAL PURPOSE VEHICLE TO OBTAIN NHAI CONTRACT, THEN THE EXPENDITURE INCURRED FOR EARNING THE SAID EXEMPT INCOME COULD NOT BE DISALLOWED UNDER SECTION 14A OF THE ACT READ WITH RULE 8 D OF THE RULES. APPLYING THE SAID RATIO TO THE FACTS OF THE PRESENT CASE, WE FIND NO MERIT IN THE ORDER OF ASSESSING OFFICER IN INCLUDING THE SAID INVESTMENTS AS PART OF TOTAL INVESTMENTS FOR WORKING OUT DISALLOWANCE UNDER SECTION 14A OF THE ACT. SIMILAR LY, THE ASSESSEE HAS DURING THE YEAR MADE OTHER INVESTMENTS IN JVS WHICH ALSO ARE TO BE EXCLUDED IN THE SIMILAR LINE OF REASONING AND ACCORDINGLY, THERE IS NO MERIT IN THE DISALLOWANCE COMPUTED BY THE ASSESSING OFFICER UNDER SECTION 14A OF THE ACT. THE CI T(A) HAD PLACED RELIANCE ON THE DECISION OF SPECIAL BENCH OF DELHI TRIBUNAL IN CHEMINVEST LTD. VS. ITO (SUPRA), WHICH HAS BEEN SPECIAL BENCH OF DELHI TRIBUNAL IN CHEMINVEST LTD. VS. ITO (SUPRA), WHICH HAS BEEN OVERRULED BY THE HONBLE DELHI HIGH COURT IN CHEMINVEST VS. CIT (SUPRA) AND IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTA NCES OF THE CASE, THERE IS NO MERIT IN THE ORDERS OF AUTHORITIES BELOW IN MAKING THE AFORESAID DISALLOWANCE UNDER SECTION 14A OF THE ACT. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, PARTLY ALLOWED. 51. THE ASSESSEE IN ITA NO.1293/PN/2014 RELAT ING TO ASSESSMENT YEAR 2009 - 10 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, (1) DISALLOWANCE OF AMORTIZATION OF LEASE CHARGES OF RS.429,835 (A) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - V, PUN E [HEREINAFTER REFERRED TO AS CIT(A)] HAS LEGALLY ERRED IN UPHOLDING THE ACTION OF LEARNED ASSESSING OFFICER (AO) THAT THE YEARLY AMORTISATION OF LEASE CHARGES OF RS.429,835 IN RESPECT OF LEASEHOLD LAND AT PITHAMPUR IS NOT AN ALLOWABLE DEDUCTION IN COMPU TING THE TAXABLE INCOME. (B) IT IS PRAYED THAT THE LEARNED AO BE DIRECTED TO ALLOW THE DEDUCTION AS THE LEASE PREMIUM PAID IS IN THE NATURE OF ADVANCE RENT AND THUS ALLOWABLE AS REVENUE EXPENDITURE. (2) AD HOC DISALLOWANCE OF RS.19,014 ON ACCOUNT OF GI FTS AND PRESENTATION ARTICLES. ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 22 (A) THE LEARNED CIT(A) HAS LEGALLY ERRED IN UPHOLDING THE AD - HOC DISALLOWANCE OF RS. 19,014 BEING THE 25% OF EXPENDITURE INCURRED ON GIFTS AND PRESENTATION ARTICLE AS NON BUSINESS EXPENDITURE. (B) IT IS PRAYED THAT THE LEA RNED AO BE DIRECTED TO DELETE THE DISALLOWANCE AS THE EXPENDITURE IS INCURRED FOR THE PURPOSE OF BUSINESS AND THUS ALLOWABLE AS DEDUCTION. (3) DEDUCTION OF RS.638,821 BEING THE EXPENDITURE FOR THE YEAR UNDER CONSIDERATION BUT ACCOUNTED IN BOOKS IN SUC CEEDING YEARS: (A) THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTION OF THE AO FOR NOT ALLOWING THE CLAIM OF THE APPELLANT IN RESPECT OF EXPENDITURE OF RS. 638,821 INCURRED FOR THE F.Y. 2008 - 09 RELEVANT TO A.Y. 2009 - 10 WHICH WAS NOT CLAIMED IN THE RETUR N OF INCOME. (B) THE LEARNED CIT(A) ERRED IN NOT ALLOWING GENUINE CLAIM OF APPELLANT MADE DURING THE COURSE OF ASSESSMENT EVEN WHEN IT IS WITHIN THE POWERS OF THE CIT(A) TO ALLOW SUCH CLAIMS. (C) HE FURTHER OUGHT TO HAVE APPRECIATED THAT GENUINENESS OF T HE CLAIM OF THE APPELLANT COMPANY HAS NOT BEEN QUESTIONED / CHALLENGED BY THE ASSESSING OFFICER AND THEREFORE CIT(A) SHOULD HAVE DECIDED THE ISSUE IN LIGHT OF THE MERITS AND LEGAL POSITION. (D) IT IS PRAYED THAT THE LEARNED AO BE DIRECTED TO ALLOW THE C LAIM AS THE EXPENDITURE PERTAINS TO THE YEAR UNDER CONSIDERATION, BUT ACCOUNTED IN SUCCEEDING YEARS AS PRIOR PERIOD EXPENDITURE. (4) AD HOC DISALLOWANCE OF RS.15,00,000 ON ACCOUNT OF AIRCRAFT RUNNING AND MAINTENANCE EXPENDITURE: (A) THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTION OF THE AO IN MAKING AD - HOC DISALLOWANCE OF RS.1,500,000 BEING THE EXPENDITURE INCURRED ON AIRCRAFT RUNNING AND MAINTENANCE, TREATING THE SAME AS NOT INCURRED FOR THE PURPOSE OF BUSINESS. NOT INCURRED FOR THE PURPOSE OF BUSINESS. (B) IT IS PRAYED THAT THE AO BE DIRE CTED TO DELETE THE DISALLOWANCE AS THE EXPENDITURE HAS BEEN INCURRED FOR THE PURPOSE OF BUSINESS AND THUS ALLOWABLE AS DEDUCTION. (5) DISALLOWANCE OF SPONSORSHIP EXPENSES OF RS. 150,000 (A) THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTION OF THE AO IN DISALLOWING RS.150,000, CONSIDERING THE EXPENDITURE ON ACCOUNT OF CORPORATE SPONSORSHIP AS DONATIONS AND NOT FOR THE PURPOSE OF BUSINESS. (B) IT IS PRAYED THAT THE AO BE DIRECTED TO DELETE THE DISALLOWANCE AS THE EXPENDITURE HAS BEEN INCURRED FOR TH E PURPOSE OF BUSINESS AND THUS ALLOWABLE AS DEDUCTION. (6) REPAIRS AND MAINTENANCE WORK ON ROAD RS.1,500,000 (A) THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTION OF AO IN DISALLOWING THE EXPENDITURE OF RS.1,500,000 PAID TO NANEKARWADI KURALI ASSOCIA TION FOR THE MAINTENANCE AND REPAIR OF APPROACH ROAD TO THE BUSINESS PREMISES OF THE APPELLANT COMPANY. (B) IT IS PRAYED THAT THE AO BE DIRECTED TO DELETE THE DISALLOWANCE AS EXPENDITURE HAS BEEN INCURRED FOR THE PURPOSE OF BUSINESS SINCE THE LAND AT NANEKARWADI IS BEING USED BY THE APPELLANT COMPANY AS ITS SALES DEPOT, FROM WHERE THE PRODUCT / VEHICLES ARE SOLD. (C) HE OUGHT TO HAVE APPRECIATED THAT THE ROAD DOES NOT BELONG TO APPELLANT COMPANY AND THEREFORE THE PAYMENTS FOR MAINTENANCE AND REPAI RS OF ROAD IS REVENUE IN THE NATURE AND CANNOT BE TREATED AS CAPITAL EXPENDITURE. THE SAID EXPENDITURE IS INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS FOR THE SMOOTH FUNCTIONING AND EFFICIENT CONDUCTS OF THE BUSINESS. THE SAID EXPENDITURE SHOULD HAVE BEEN ALLOWED AS REVENUE EXPENDITURE IN COMPUTING THE INCOME OF ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 23 THE APPELLANT COMPANY. (7) DISALLOWANCE U/S 14A OF THE ACT: (A) THE LEARNED CIT (A) ERRED IN UPHOLDING THE ACTION OF THE AO IN DISALLOWING THE EXPENDITURE OF RS.2,94,77,676/ - U NDER SECTION 14A BY APPLYING RULE 8D WITHOUT ESTABLISHING AND RECORDING COGENT REASONS THAT EXPENDITURE HAS ACTUALLY BEEN INCURRED FOR THE PURPOSE OF EARNING EXEMPT INCOME. (B) IT IS PRAYED THAT THE LEARNED AO BE DIRECTED TO RESTRICT THE DISALLOWANCE U NDER SECTION 14A OF THE ACT TO RS.142,757 BEING THE EXPENDITURE INCURRED BY THE APPELLANT FOR EARNING EXEMPT INCOME, (C) WITHOUT PREJUDICE TO THE ABOVE, IN AN UNLIKELY SITUATION OF UPHOLDING THE DISALLOWANCE UNDER SECTION 14A OF THE ACT READ WITH RULE 8D , IT IS PRAYED THAT THE LEARNED AO BE DIRECTED TO EXCLUDE THE FOLLOWING INVESTMENTS FOR THE PURPOSE OF COMPUTING 'AVERAGE VALUE OF INVESTMENTS' AS REQUIRED IN RULE 8D(III) OF THE RULES: INVESTMENTS ON WHICH NO DIVIDEND HAS BEEN EARNED DURING THE YEAR UNDER CONSIDERATION OR CAPABLE OF GIVING ANY DIVIDEND INCOME INVESTMENT ON WHICH TAXABLE INCOME HAS BEEN EARNED STRATEGIC INVESTMENTS IN ALLIED LINE OF BUSINESS, THE INTENTION OF INVESTMENT WHEREIN WAS NOT TO EARN DIVIDEND INCOME (D) WITHOUT PREJUDIC E TO THE ABOVE, IN AN UNLIKELY SITUATION OF UPHOLDING THE DISALLOWANCE UNDER SECTION 14A, THE APPELLANT PRAYS THAT THE LEARNED AO BE DIRECTED TO RESTRICT THE DISALLOWANCE TO 1% OR 2% OF THE DIVIDEND INCOME. (E) WITHOUT PREJUDICE TO THE ABOVE, IN AN UNLI KELY SITUATION OF UPHOLDING DISALLOWANCE UNDER SECTION 14A, THE APPELLANT PRAYS THAT THE LEARNED AO DISALLOWANCE UNDER SECTION 14A, THE APPELLANT PRAYS THAT THE LEARNED AO BE DIRECTED TO RESTRICT THE DISALLOWANCE TO INR 714,288, BEING THE EXEMPT INCOME EARNED DURING THE YEAR UNDER CONSIDERATION, AS THE DISALLOWANCE CANNOT EXCE ED THE EXEMPT INCOME ITSELF. (8) DISALLOWANCE UNDER SECTION 14A OF THE ACT AMOUNTING TO RS.29,477,676 WHILE COMPUTING BOOK PROFITS UNDER SECTION 115JB OF THE ACT: (A) THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTION OF THE AO IN ADDING BACK TO THE COM PUTATION OF BOOK PROFIT, THE AMOUNT OF RS.29,477,676 BEING THE DISALLOWANCE COMPUTED UNDER SECTION 14A READ WITH RULE 8D . (B) IT IS PRAYED THAT THE AO BE DIRECTED TO DELETE THE ADDITION AS THE WORD 'RELATABLE' SPECIFIED IN CLAUSE (F) OF SUB SECTION 2 OF SECTION 115JB OF THE ACT CONTEMPLATES DIRECT NEXUS AS COMPARED TO ARTIFICIAL FORMULA ARRIVED U/S 14A OF THE ACT AND ONLY THE EXPENDITURE DEBITED TO THE PROFIT AND LOSS ACCOUNT WHICH IS INCURRED IN EARNING EXEMPT INCOME CAN BE ADDED BACK TO BOOK PROFIT COMPUTATION. 52. THE GROUND OF APPEAL NO.1 RAISED BY THE ASSESSEE IS NOT PRESSED AS IN THE EARLIER YEARS AND HENCE, THE SAME IS DISMISSED AS NOT PRESSED. 53. THE ISSUE IN GROUNDS OF APPEAL NO.2 AND 4 RAISED BY THE ASSESSEE IS AGAINST THE DISALLOWANCE OF EXPENSES, ON WHICH FRINGE BENEFIT TAX HAS BEEN PAID. THE SAID ISSUE IS IDENTICAL TO THE ISSUE RAISED VIDE GROUNDS OF APPEAL NO.2 AND 4 IN ASSESSMENT YEAR ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 24 2006 - 07 AND FOLLOWING THE SAME PARITY OF REASONING, THIS GROUND OF APPEAL IS DECIDED IN FAVOUR OF THE ASSESSEE. 54. THE ISSUE IN GROUND OF APPEAL NO.3 RAISED BY THE ASSESSEE I.E. WITH REGARD TO EXPENSES RELATING TO THE YEAR WHICH WERE CLAIMED TO BE INCURRED IN THE SUBSEQUENT YEAR AND IS BEING NOW CLAIMED AS DEDUCTION IS IDENTICAL TO THE ISSUE IN GROUND O F APPEAL NO.3 RAISED IN ASSESSMENT YEAR 2006 - 07 AND FOLLOWING THE SAME PARITY OF REASONING, THIS GROUND OF APPEAL IS DISMISSED. 55. THE ISSUE IN GROUNDS OF APPEAL NO.5 I.E. DEDUCTION ON ACCOUNT OF SPONSORSHIP EXPENSES IS IDENTICAL TO THE GROUND OF APPEAL NO.3 RAISED IN ASSESSMENT YEAR 2007 - 08 AND FOLLOWING THE SAME PARITY OF REASONING, THE CLAIM OF ASSESSEE IS ALLOWED. 56. THE ISSUE ARISING VIDE GROUND OF APPEAL NO.6 RAISED BY THE ASSESSEE IS AGAINST THE DISALLOWANCE OF REPAIRS AND MAINTENANCE WORK ON ROA D OF RS.15 LAKHS. 57. BRIEFLY, THE FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSEE HAD CLAIMED 57. BRIEFLY, THE FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSEE HAD CLAIMED EXPENDITURE FOR ROAD REPAIRS, IN RESPECT OF THE APPROACH ROAD TO THE FACTORY DEPOT. THE SAID ROAD WAS OWNED BY NANEKAEWADI KURULI ASSOCIATION AND THE ASSESSE E HAD CONTRIBUTED SUM OF RS.15 LAKHS TO THE SAID ASSOCIATION TOWARDS REPAIRS AND MAINTENANCE OF THE SAID ROAD. THE ASSESSEE CLAIMED THAT THE SAID EXPENDITURE WAS INCURRED FOR SMOOTH FUNCTIONING OF BUSINESS OF THE ASSESSEE AND HENCE, WAS REVENUE IN NATURE. THE ASSESSING OFFICER WAS OF THE VIEW THAT WHERE THE ASSESSEE HAD INCURRED THE EXPENDITURE ON A PIECE OF LAND ON WHICH, NO BUSINESS WAS CARRIED OUT AND ALSO BECAUSE THE EXPENDITURE ON DEVELOPMENT OF ROAD BY ASSOCIATION WAS OF CAPITAL NATURE, THE SAID EXP ENDITURE WAS NOT ALLOWABLE AS BUSINESS EXPENDITURE. FURTHER, NO DEPRECIATION WAS ALLOWED ON SUCH EXPENDITURE AS THE ELIGIBLE ASSET DOES NOT RELATE TO THE BUSINESS OF ASSESSEE COMPANY. 58. THE CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER SINCE THE APPROAC H ROAD WAS PUBLIC ROAD AND NOT OWNED BY THE ASSESSEE COMPANY. ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 25 59. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A) IN THIS REGARD. 60. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE OWNERSHIP OF SAID ROAD WAS ADMITTEDLY WITH THE ASSOCIATION, BUT THE CONTRIBUTION WAS MADE BY THE ASSESSEE ALONG WITH OTHER COMPANIES FOR REPAIRS AND MAINTENANCE OF THE SAID APPROACH ROAD. THE APPROACH ROAD WAS TO SALES DEPOT AT NANEKARWADI AND FROM WHERE THE VEHICLES MANUFACTURED BY THE ASSE SSEE ARE DELIVERED TO THE CUSTOMERS / DEALERS. BEFORE THE CIT(A), THE ASSESSEE HAD MADE A REFERENCE TO TIN NUMBER ALLOTTED BY SALES TAX DEPARTMENT, WHEREIN THE SAID PREMISES WAS SHOWN AS BUSINESS PREMISES AND THE ASSESSEE CLAIMED THAT EXPENDITURE WAS BUSI NESS EXPENDITURE. 61. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, PLACED RELIANCE ON THE ORDER OF CIT(A). 62. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE HAD CONTRIBUTED RS.15 LAKHS FOR REPAI RS AND MAINTENANCE OF ROAD WHICH LEAD TO ITS DEPOT AT CONTRIBUTED RS.15 LAKHS FOR REPAI RS AND MAINTENANCE OF ROAD WHICH LEAD TO ITS DEPOT AT NANEKARWADI. THE SAID SUM OF RS.15 LAKHS WAS CONTRIBUTED TO THE ASSOCIATION, WHICH UNDERTOOK THE REPAIRS OF ROAD APPROACHING THE SALES DEPOT OF THE ASSESSEE. THE ASSESSEE WAS KEEPING ITS STOCK IN THE SAID PREMISES , WHICH WAS DELIVERED TO THE CUSTOMERS / DEALERS FROM THE SAID DEPOT . THE EXPENDITURE INCURRED BY THE ASSESSEE WAS AKIN TO REPAIRS AND MAINTENANCE THOUGH OF ROAD WHICH IS NOT OWNED BY THE ASSESSEE. HOWEVER, THE SAID EXPENDITURE WAS NECESSARY FOR SMOOTH FUNCTIONING OF BUSINESS OF THE ASSESSEE AND HENCE, IS ALLOWABLE AS BUSINESS EXPENDITURE IN THE HANDS OF ASSESSEE. IN THIS REGARD, WE FIND SUPPORT FROM THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. CHEMAUX LTD. (1994) 74 TAXMA N 201 (BOM) , WHEREIN THE EXPENDITURE WAS INCURRED BY THE ASSESSEE ON REPAIRS OF APPROACH ROAD AND ALSO ON RESURFACING OF THE KACCHA ROADS INSIDE ITS FACTORY PREMISES, THE SAME W ERE ALLOWED BY THE HONBLE HIGH COURT AS REVENUE EXPENDITURE. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.15 LAKHS. THE GROUND OF APPEAL NO.6 RAISED BY THE ASSESSEE IS THUS, ALLOWED. ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 26 63. FURTHER, GROUND OF APPEAL NO.7 RAISED BY THE ASSESSEE IS AGAINST THE DISALLOWANCE MADE UNDER SECTION 14A OF THE ACT , WHICH IS SIMILAR TO THE ISSUE RAISED VIDE GROUND OF APPEAL NO.6 IN ASSESSMENT YEAR 2008 - 09 AND FOLLOWING THE SAME PARITY OF REASONING, WE HOLD THAT THERE IS NO MERIT IN THE ORDERS OF AUTHORITIES BELOW IN MAKING THE AFORESAID DISALLOWANCE UNDER SECTION 14 A OF THE ACT 64 . FURTHER, THE ISSUE IN GROUND OF APPEAL NO.8 IS AGAINST THE COMPUTATION OF PROFITS UNDER SECTION 115JB OF THE ACT AND AS TO WHETHER THE DISALLOWANCE MADE UNDER SECTION 14A OF THE ACT IS TO BE TAKEN INTO CONSIDERATION WHILE COMPUTING BOOK P ROFITS OF THE ASSESSEE COMPANY. 6 5. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE IN THIS REGARD PLACED RELIANCE ON THE RATIO LAID DOWN BY PUNE BENCH OF TRIBUNAL IN VARROC ENGINEERING (P.) LTD. VS. ACIT (2015) 54 TAXMANN.COM 384 (PUNE - TRIB.) . FO LLOWING THE SAME PARITY OF REASONING, WE HOLD THAT WHILE COMPUTING THE BOOK PROFITS UNDER SECTION 115JB OF THE ACT, THE DISALLOWANCE, IF ANY, MADE UNDER SECTION 14A OF THE ACT IS NOT TO BE CONSIDERED. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO RE - COM PUTE THE BOOK PROFITS UNDER SECTION 115JB OF THE ACT. THE GROUND OF APPEAL NO.8 IS THUS, ALLOWED. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, PARTLY ALLOWED. 66 . IN THE RESULT, ALL THE APPEALS OF ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 29 TH D AY OF JU LY , 201 6 . SD/ - SD/ - ( R.K. PANDA ) ( SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; D ATED : 29 TH JU LY , 201 6 . GCVSR ITA NOS. 1289 TO 1293 /PN/201 4 FORCE MOTORS LTD. 27 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLA NT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - V , PUNE ; 4. / THE CIT - V , PUNE ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE