DY CIT 1 (3)(1), MUMBAI V. M/S SUMITOMO CHEMICALS INDIA PVT LTD., MUMBAI

ITA 168/MUM/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6175 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2016-2017
• Appeal Filed On: 06-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Depreciation; Question of law; Capital Gains
• Section: 50C; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.168/M/2020 ASSESSMENT YEAR: 2016-17 DY. CIT 1(3)(1), R.NO.540, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400020 VS. M/S. SUMITOMO CHEMICALS INDIA PVT. LTD., 195, 7 TH FLOOR, MOTI MAHAL, J. TATA ROAD, CHURCHGATE, MUMBAI 400 020 PAN: AAECS 3750L (APPELLANT) (RE SPONDENT) CO NO.69/M/2021 (ARISING OUT OF ITA NO.168/M/2020) ASSESSMENT YEAR: 2016-17 M/S. SUMITOMO CHEMICALS INDIA PVT. LTD., 195, 7 TH FLOOR, MOTI MAHAL, J. TATA ROAD, CHURCHGATE, MUMBAI 400 020 PAN: AAECS 3750L VS. DY. CIT 1(3)(1), R.NO.540, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400020 (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : SHRI PARA SAVLA, A.R. REVENUE BY : SHRI VIJAY KUMAR MENON, D.R. DATE OF HEARING : 01.07.2021 DATE OF PRONOUNCEMENT : 23.07.2021 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL BY THE REVENUE AND THE CROSS OBJ ECTION BY THE ASSESSEE HAVE BEEN PREFERRED AGAINST THE ORD ER DATED 24.10.2019 OF THE COMMISSIONER OF INCOME TAX (APPEA LS) ITA NO.168/M/2020 M/S. SUMITOMO CHEMICALS INDIA PVT. LTD. 2 [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEAR 2016-17. 2. WE SHALL FIRST TAKE THE REVENUES APPEAL FOR ADJ UDICATION. THE ISSUE RAISED IN 1 ST GROUND OF APPEAL BY THE REVENUE IS AGAINST THE ORDER OF LD. CIT(A) DELETING THE DISALL OWANCE OF DEPRECIATION OF RS.11,32,485/- AS DISALLOWED BY THE AO ON ACCOUNT OF EXCESS CLAIM OF DEPRECIATION. 3. AT THE OUTSET, THE LD. COUNSEL OF THE ASSESSEE S UBMITTED BEFORE THE BENCH THAT THE ISSUE HAS BEEN DECIDED B Y LD. CIT(A) BY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.3078/M/20 18 A.Y. 2006-07 AS WELL AS SUBSEQUENT YEARS AND THEREFORE, FOLLOWING THE SAID DECISIONS OF THE COORDINATE BENCHES ,THE SAME MAY KINDLY BE ALLOWED. 4. THE LD. D.R., ON THE OTHER HAND, RELIED ON THE O RDER OF AO AND GROUNDS OF APPEAL FILED. 5. AFTER HEARING THE RIVAL PARTIES AND PERUSING THE DECISIONS OF THE COORDINATE BENCHES IN ASSESSEES OWN CASE , WE FIND THAT THE IDENTICAL ISSUE HAS BEEN DECIDED BY THE CO-ORDINATE BENCHES OF THE TRIBUNAL IN A.Y. 2006-07 IN ITA NO.3078/M/2012 AND ALSO IN SUBSEQUENT YEARS IN ASSESSEES OWN CASE WHICH HA VE BEEN FOLLOWED BY THE LD. CIT(A) WHILE ALLOWING THE APPE AL OF THE ASSESSEE. WE, THEREFORE, RESPECTFULLY FOLLOWING TH E ORDERS PASSED BY THE COORDINATE BENCHES AND PRINCIPLE OF CONSIST ENCY, DISMISS THE GROUND NO.1 RAISED BY THE REVENUE. ITA NO.168/M/2020 M/S. SUMITOMO CHEMICALS INDIA PVT. LTD. 3 6. THE ISSUE RAISED IN GROUND NO.2 BY THE REVENUE I S AGAINST THE ORDER OF LD. CIT(A) DIRECTING THE AO TO TAKE THE SALE CONSIDERATION OF STAFF QUARTERS AT RS.6,70,000/- IN PLACE OF RS.4,70,69,333/- AS HAS BEEN TAKEN BY THE AO FOR C OMPUTING SHORT TERM CAPITAL GAIN. 7. THE FACTS IN BRIEF ARE THAT DURING THE YEAR THE ASSESSEE SOLD TWO STAFF QUARTERS FOR A TOTAL CONSIDERATION OF RS. 6,70,000/- AND ACCORDINGLY OFFERED THE SAME TO TAX AS SHORT TERM CAPITAL GAIN AMOUNTING TO RS.3,68,927/- IN THE RETURN OF INCOME FILED DURING THE YEAR. THE AO DURING THE COURSE OF ASSESSMENT P ROCEEDINGS ,ON THE BASIS OF AIR INFORMATION, CAME TO CONCLUSIO N THAT ASSESSEE HAS SOLD THE STAFF QUARTERS BELOW MARKET V ALUE AND CONSEQUENTLY INVOKED THE PROVISIONS OF SECTION 50C OF THE ACT AND RECOMPUTED THE STCG AT RS.4,67,88,260/-BY TAKIN G THE SALE CONSIDERATION AT RS.4,70,69,333/-. 8. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) DEL ETED THE ADDITION BY OBSERVING AND HOLDING AS UNDER: I AGREE WITH THE ARGUMENT AND SUBMISSION OF THE AP PELLANT THAT THE SALE TRANSACTION UNDERTAKEN BY THE APPELLANT IN A.Y. 201 6-17 PERTAINS TO SALE OF TWO STAFF QUARTERS FOR AN ACTUAL AGGREGATE CONSIDERATION OF R S. 6,7Q,000/-. THIS IS EVIDENT FROM THE MEMORANDUM OF UNDERSTANDING ENTERED BETWEE N THE APPELLANT AND EACH OF THE BUYERS OF THE STAFF QUARTERS AND ALSO FROM T HE TAX AUDIT REPORT FOR A.Y. 2016- 17, WHEREIN TOTAL SALE VALUE OF RS. 6,70,000/- RELA TING TO SALE OF STAFF QUARTERS IS DEDUCTED FROM THE BLOCK OF ASSETS. THE TRANSACTION VALUE OF RS. 4,70,69,333, WHICH IS CONSIDERED BY THE AO AS THE MARKET VALUE OF THE STAFF QUARTERS, IN SUBSTANC E RELATES TO SALE OF FACTORY BUILDING AND PLANT & MACHINERY BY THE APPELLANT TO BAYER VAPI PRIVATE LIMITED WHICH WAS EFFECTED BY THE APPELLANT IN THE EARLIER YEAR IE A.Y, 2015-16. THE SAME IS EVIDENT FROM THE DEED OF CONVEYANCE DATED 30 MARCH 2015 ENTERED BETWEEN THE APPELLANT AND BAYERVAPI PRIVATE LIMITED. FURTHER, THE APPELLANT HAS PAID APPLICABLE STAMP DUTY OF RS. 41,35,000/-ON 26 MARCH 2015 AS PE R THE CERTIFICATE OF STAMP DUTYISSUED BY THE GOVERNMENT OF GUJARAT ON THE CONS IDERATION OF RS. 4,70,69,333/- WHICH PERTAINS TO SALE OF FACTORY BUILDING & PLANT AND MACHINERY, WHICH IS ALSO MENTIONED IN THE SAID CERTIFICATE. THE SUB-REGISTRA R - VAPI REGISTERED THE DEED OF ITA NO.168/M/2020 M/S. SUMITOMO CHEMICALS INDIA PVT. LTD. 4 CONVEYANCE ONLY ON 1 APRIL 2015 AS CAN BE SEEN FROM THE DEED OF CONVEYANCE. HENCE, ONLY BECAUSE THE REGISTRATION HAPPENED IN F. Y. 2015-16, THE SAID TRANSACTION WAS CAPTURED IN THE AIR DATA. FURTHER, THE APPELLAN T HAS FURNISHED EXTRACTS OF TAX AUDIT REPORT FOR A.Y. 2015-16, WHEREIN THE SALE CON SIDERATIONS OF RS. 1.85,73,547 FOR FACTORY BUILDING AND RS. 2,84,95,786 FOR PLANT & MACHINERY IS REDUCED FROM THE RESPECTIVE BLOCK OF ASSETS. IN VIEW OF THE ABOVE, IT IS EVIDENT THAT THE AO HAS NOT CONSIDERED THE FACTS OF THE CASE IN THE CORRECT PERSPECTIVE. THE ACTUAL AGGREGATE SALE CONSIDERATION OF THE TWO STAFF QUARTERS SOLD BY THE APPELLANT DURING A.Y. 2016-17 IS RS. 6,70,000. THUS, THE APPELLANT HAS CORRECTLY COMPUTED THE SHOR T TERM CAPITAL GAINS OF RS. 3,68,927 ON ACCOUNT OF SALE OF TWO STAFF QUARTERS A ND HAS OFFERED TO TAX THE SAME IN THE ROI FILED FOR A.Y. 2016-17.ACCORDINGLY, IN VIEW OF FACTS OF THE CASE, THE ACTION OF THE AO OF SUBSTITUTING THE SALE CONSIDERATION OF TW O STAFF QUARTERS TO RS. 4,70,69,333 BY INVOKING PROVISIONS OF SECTION 50C O F THE ACT AND RE-COMPUTING THE RESULTANT SHORT TERM CAPITAL GAINS ON ACCOUNT OF SA LE OF STAFF CARTERS TO RS. 4,67,68,260 IS NOT FOUND TO BE SUSTAINABLE. FURTHER, THE APPELLANT HAS RELIED ON VARIOUS JUDGEM ENTS (MENTIONED IN PARA 4.18 OF ITS SUBMISSION) WHICH HAVE HELD THAT ADDITI ONS MADE SOLELY ON BASIS OF INFORMATION CONTAINED IN AIR IS NOT SUSTAINABLE IN THE EYES OF LAW. IN THE LIGHT OF THE DECISIONS RELIED BY THE APPELLANT AND CONSIDERING T HE FACTS IN THE PRESENT CASE, THE ADDITION MADE ON THIS ACCOUNT DESERVES TO BE DELETE D. 9. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THE AO CAME TO A FALLACIOUS C ONCLUSION THAT ASSESSEE HAS SOLD TWO STAFF QUARTERS FOR A PRICE OF RS. 6,70,000/- WHICH IS BELOW THE MARKET VALUE AS SHOWN IN THE AIR INFORMATION OF RS.4,70,69,333/-. THE LD. CIT(A) HA S RECORDED A FINDING OF FACT THAT THIS TRANSACTION VALUE OF RS.4 ,70,69,333/- IS IN FACT THE SALE CONSIDERATION OF FACTORY BUILDING AND PLANT & MACHINERY SOLD BY THE ASSESSEE TO BAYER VAPI PVT. L TD. IN A.Y. 2015-16 IN TERMS OF DEED OF CONVEYANCE DATED 30.03. 2015 AND EVEN THE APPLICABLE STAMP DUTY OF RS.4,13,5000/- WA S PAID ON 26.03.2015 AS PER THE CERTIFICATE OF STAMP DUTY ISS UED BY GOVERNMENT OF GUJARAT CLEARLY STATING THAT THE AS SETS SOLD WERE PLANT & MACHINERY AND FACTORY BUILDING. THE SUB RE GISTRAR, VAPI REGISTERED THE DEED OF CONVEYANCE ON 01.04.2015 AND HENCE THE TRANSACTION WHICH HAPPENED IN F.Y. 2015-16 APPEARED IN AIR ITA NO.168/M/2020 M/S. SUMITOMO CHEMICALS INDIA PVT. LTD. 5 INFORMATION IN THE SUBSEQUENT YEAR. WE FIND THAT T HE SAID SALE CONSIDERATION HAS, IN FACT, BEEN DULY SHOWN BY THE ASSESSEE IN THE BOOKS OF ACCOUNTS. UNDER THESE CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A) AND A RE INCLINED TO UPHOLD THE SAME BY DISMISSING THE GROUND NO.2 OF TH E REVENUES APPEAL. 10. THE ISSUE RAISED IN GROUND NO.3 IS AGAINST THE ORDER OF LD. CIT(A) ALLOWING THE RELIEF TO THE ASSESSEE ON ACCOU NT OF DEPRECIATION ON GOODWILL ACQUIRED IN A.Y. 2006-07. 11. THE FACTS IN BRIEF ARE THAT THE ASSESSEE ACQUIR ED MANUFACTURING FACILITY FROM BILAG INDUSTRY PVT LT D. IN A.Y. 2006-07 I.E. BUILDING, PLANT & MACHINERY, FURNITURE , PATENT AND GOODWILL. ACCORDINGLY IN THE RETURN OF INCOME FILE D FOR A.Y. 2006- 07, THE ASSESSEE CLAIMED DEPRECIATION ON BUILDING A ND PLANT & MACHINERY, FURNITURE AND PATENT BUT DID NOT CLAIM DEPRECIATION OF GOODWILL. THE ASSESSEE FILED ADDITIONAL GROUND B EFORE THE TRIBUNAL WHEN THE MATTER REACHED THE TRIBUNAL FOR A .Y. 2006-07 AND THE CO-ORDINATE BENCH OF THE TRIBUNAL IN ITA NO.3078/M/2018 ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F CIT VS. SMIFFS SECURITIES LTD. 348 ITR 302. IN THE MEANTIM E, THE MATTER TRAVELLED TO HONBLE BOMBAY HIGH COURT AND THE HON BLE BOMBAY HIGH COURT HAS ALSO DECIDED THE ISSUE IN FAV OUR OF THE ASSESSEE. THE LD. CIT(A) BY FOLLOWING THE DECISION OF THE CO- ORDINATE BENCH OF THE TRIBUNAL AND THE HONBLE BOMB AY HIGH COURT ALLOWED THE DEPRECIATION ON GOODWILL. WE, TH EREFORE, DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A) A ND THEREFORE SAME IS UPHELD BY DISMISSING THE GROUND NO.3 OF THE REVENUE. ITA NO.168/M/2020 M/S. SUMITOMO CHEMICALS INDIA PVT. LTD. 6 CO NO.69/M/2021 (ASSESSEE) 12. THE GROUND NO.1 RAISED BY THE ASSESSEE IN THE C ROSS OBJECTION IS IN RESPECT OF DEPRECIATION ON GOODWILL , LEASEHOLD IMPROVEMENTS AND DEPRECIATION ON LEGAL AND PROFESSI ONAL FEE INCURRED IN CONNECTION WITH THE PLANT & MACHINERY. WE NOTE THAT THIS GROUND IS CONSEQUENTIAL TO GROUND NO.3 OF THE REVENUES APPEAL. WE HAVE ALREADY DISMISSED THE GR OUND NO.3 IN THE REVENUES APPEAL AND THEREFORE THE ORDER OF LD. CIT(A) IS AFFIRMED ON THIS ISSUE. CONSEQUENTLY THE GROUND NO. 1 IN THE CROSS OBJECTION IS ALLOWED. 13. THE GROUND NO.2 IN THE CROSS OBJECTION RAISED B Y THE ASSESSEE IS IN RESPECT OF ALLOWING THE DEDUCTION IN RESPECT OF EDUCATION-CESS ON INCOME TAX WHILE COMPUTING THE I NCOME OF THE ASSESSEE. 14. BY VIRTUE OF THIS GROUND THE ASSESSEE HAS PRAYE D BEFORE THE BENCH TO DIRECT THE AO TO ALLOW THE DEDUCTION OF C ESS .THE LD COUNSEL HAS RELIED ON A RECENT JUDGMENT OF THE HON BLE HIGH COURT OF BOMBAY IN THE CASE OF SESA GOA LIMITED VS. JOINT COMMISSIONER OF INCOME-TAX (2020) 107 CCH 375 (BOM) . ON BEING CONFRONTED WITH THE FACT THAT THE SAID CLAIM OF THE ASSESSEE WAS NOT RAISED BEFORE THE LOWER AUTHORITIES, IT WAS SUBMITTED BY THE LD. A.R THAT THE AFORESAID GROUND OF APPEAL WAS BEING RAISED ON THE BASIS OF THE AFORESAID RECENT JUDGMENT OF TH E HONBLE HIGH COURT OF BOMBAY IN THE CASE OF SESA GOA LIMITE D (SUPRA). THE LD. A.R SUBMITTED THAT THE HONBLE HIGH COURT I N ITS AFORESAID JUDGMENT, HAD OBSERVED, THAT IF THE LEGIS LATURE INTENDED TO PROHIBIT THE DEDUCTION OF AMOUNTS PAID BY AN ASSESSEE TOWARDS EDUCATION CESS OR ANY OTHER CES S AND ITA NO.168/M/2020 M/S. SUMITOMO CHEMICALS INDIA PVT. LTD. 7 HIGHER AND SECONDARY EDUCATION CESS, THEN, IT COU LD HAVE EASILY INCLUDED REFERENCE TO CESS IN CLAUSE (II) OF SEC. 40(A). IT WAS FURTHER SUBMITTED BY THE LD. A.R THAT THE HONB LE HIGH COURT HAD OBSERVED THAT AS THE LEGISLATURE HAD NOT INCLUDED EDUCATION CESS OR ANY OTHER CESS IN CLAUSE (II) OF SEC. 40(A), THEREFORE, IT WOULD MEAN THAT THERE WAS NO PROHIBIT ION IN CLAIMING DEDUCTION OF THE SAID AMOUNTS WHILE COMPUT ING THE INCOME OF THE ASSESSEE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION. IT WAS SUBMITTED BY THE LD . A.R THAT THE HONBLE HIGH COURT IN ITS AFORESAID ORDER HAD OBSER VED THAT WHERE THE ASSESSEE HAS RAISED A CLAIM FOR DEDUCTION OF THE AMOUNT PAID TOWARDS CESS, THEN, SAID CLAIM FOR DE DUCTION WAS BOUND TO BE CONSIDERED BY THE CIT(APPEALS) OR THE I TAT BEFORE WHOM IT WAS SPECIFICALLY RAISED. IT WAS, THUS, SUBM ITTED BY THE LD. A.R THAT THE AFORESAID CLAIM FOR DEDUCTION THOU GH RAISED BY THE ASSESSEE FOR THE VERY FIRST TIME BEFORE THE TRI BUNAL MAY ADJUDICATED AND ALLOWED. 15. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVE S FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHOR ITIES AND THE MATERIAL AVAILABLE ON RECORD, AND HAVE ALSO CONSIDE RED THE JUDICIAL PRONOUNCEMENTS THAT HAS BEEN RELIED UPON B Y THE LD AR IN CONTEXT OF THE ISSUE IN HAND. IN SO FAR THE CLAI M OF THE LD. A.R THAT UNLIKE RATES AND TAXES THE AMOUNT PAID BY AN ASSESSEE TOWARDS EDUCATION CESS OR ANY OTHER CESS VIZ. T HE SECONDARY AND HIGHER EDUCATION CESS IS NOT A DISALLOWABLE EXP ENDITURE U/S 40(A)(II) OF THE INCOME-TAX ACT, 1961, WE FIND, THAT THE SAID ISSUE IS SQUARELY COVERED BY THE RECENT ORDER OF TH E HONBLE HIGH COURT OF BOMBAY IN THE CASE OF SESA GOA LIMITED VS. JOINT COMMISSIONER OF INCOME-TAX (2020) 107 CCH 375 (BOM) . IN THE ITA NO.168/M/2020 M/S. SUMITOMO CHEMICALS INDIA PVT. LTD. 8 CASE BEFORE THE HONBLE HIGH COURT THE FOLLOWING SU BSTANTIAL QUESTION OF LAW WAS INTER ALIA RAISED: III. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE EDUCATION CESSAND HIGHER AND SECONDARY EDUCATION CE SS IS ALLOWABLE AS A DEDUCTION IN THE YEAR OF PAYMENT. THE HONBLE HIGH COURT HAD OBSERVED THAT THE LEGISL ATURE IN SEC. 40(A)(II) HAD THOUGH PROVIDED THAT ANY RATE O R TAX LEVIED ON PROFITS AND GAINS OF BUSINESS OR PROFESSION SHALL NOT BE DEDUCTED IN COMPUTING THE INCOME CHARGEABLE UNDER T HE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION, BUT THEN, THERE WAS NO REFERENCE TO ANY CESS. ALSO, THE HIGH COURT OB SERVED THAT THERE WAS NO SCOPE TO ACCEPT THAT CESS BEING IN T HE NATURE OF A TAX WAS EQUALLY NOT DEDUCTIBLE IN COMPUTING THE I NCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUS INESS OR PROFESSION. IT WAS FURTHER OBSERVED THAT IF THE LE GISLATURE WOULD HAD INTENDED TO PROHIBIT THE DEDUCTION OF AMOUNTS P AID BY AN ASSESSEE TOWARDS SAY, EDUCATION CESS OR ANY OTHER CESS, THEN, IT COULD HAVE EASILY INCLUDED A REFERENCE TO CESS IN CLAUSE (II) OF SECTION 40(A). ON THE BASIS OF ITS AFORESAID OBSERV ATIONS THE HONBLE HIGH COURT HAD CONCLUDED THAT NOW WHEN THE LEGISLATURE HAD NOT PROVIDED FOR ANY PROHIBITION ON THE DEDUCTI ON OF ANY AMOUNT PAID TOWARDS CESS IN CLAUSE (II) OF SEC. 4 0(A), THEREFORE, HOLDING TO THE CONTRARY WOULD AMOUNT TO READING SOM ETHING WHICH IS NOT TO BE FOUND IN THE TEXT OF THE PROVISI ON OF SEC. 40(A)(II). ACCORDINGLY, THE HONBLE HIGH COURT HAD CONCLUDED THAT THERE WAS NO PROHIBITION ON THE DEDUCTION OF ANY AM OUNT PAID TOWARDS CESS IN SEC. 40(A)(II) WHILE COMPUTING TH E INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUS INESS OR PROFESSION. ITA NO.168/M/2020 M/S. SUMITOMO CHEMICALS INDIA PVT. LTD. 9 16. ACCORDINGLY, RESPECTFULLY FOLLOWING THE AFORESA ID JUDGMENT OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF SESA GOA LIMITED (SUPRA), WE ARE PRINCIPALLY IN AGREEMENT WI TH THE ASSESSEES CLAIM THAT EDUCATION CESS AND THE SEC ONDARY AND HIGHER EDUCATION CESS ARE ALLOWABLE AS A DEDUCTION U/S 40(A)(II) OF THE ACT. HOWEVER, AS THE AFOREMENTIONE D CLAIM HAD BEEN RAISED BY THE ASSESSEE FOR THE VERY FIRST TIME BEFORE US, WE, THEREFORE, IN ALL FAIRNESS RESTORE THE MATTER TO TH E FILE OF THE A.O FOR CONSIDERING THE SAID CLAIM OF THE ASSESSEE IN T HE BACKDROP OF OUR OBSERVATIONS RECORDED HEREINABOVE, THOUGH, SUBJ ECT TO VERIFICATION OF THE FACTUAL POSITION AS HAD BEEN CL AIMED BY THE ASSESSEE BEFORE US. THE GROUND NO.2 OF CROSS OBJECT ION IS ALLOWED FOR STATISTICAL PURPOSES IN TERMS OF OUR O BSERVATIONS RECORDED HEREINABOVE. 17. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED AND THE CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23.07.2021. SD/- SD/- (SAKTIJIT DEY) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 23.07.2021. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ ITA NO.168/M/2020 M/S. SUMITOMO CHEMICALS INDIA PVT. LTD. 10 BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.