LAQSHYA MEDIA P.LTD, MUMBAI V. ASST CIT 10(2)(1), MUMBAI

ITA 1984/MUM/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2476 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 21-03-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AJIT PAL SINGH DAIA LD J
• Assessee Lawyers: RAJAN R VORA HEMEN CHANDARIYA; PRANAY GANDHI LD ARS
• Keywords: Business income; Transfer pricing; International transaction; Earning of tax free income; Additional evidence; Notional interest; Commercial expediency
• Section: 43B; 143(3); 92B; 14A; 115JB; 92

Judgement Text

IT [TP] A.NO.1984/MUM/2017 LAQSHYA MEDIA LIMITED ASSESSMENT YEAR-2012-13 IN THE INCOME TAX APPELLATE TRIBUNAL K BENCH, MUMBAI , , BEFORE HONBLE SHRI SAKTIJIT DEY, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./I.T [TP]. A. NO.1984/MUM/2017 ( / ASSESSMENT YEAR: 2012-13) LAQSHYA MEDIA LIMITED [EARLIER KNOWN AS LAKQSHYA MEDIA PVT LTD.] LAQSHYA HOUSE, SARASWATI BAUG SOCIETY ROAD, JOGESHWARI (E) MUMBAI-400 060 / VS. ASSISTANT COMMISSIONER OF INCOME TAX-10(2)(1) ROOM NO.509/216A AAYKAR BHAVAN, M.K. ROAD MUMBAI-400 020 !' ./ ./PAN/GIR NO. AAACL-5004-C ( '$ /APPELLANT ) : ( %&'$ / RESPONDENT ) ASSESSEE BY : RAJAN R. VORA, HEMEN CHANDARIYA & PRANAY GANDHI, LD. ARS REVENUE BY : AJIT PAL SINGH DAIA, LD. JCIT-DR / DATE OF HEARING : 29/08/2018 / DATE OF PRONOUNCEMENT : 14/11/2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1.1 AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEA R [AY] 2012-13 CONTEST THE FINAL ASSESSMENT ORDER DATED 31/01/2017 PASSED BY LD. ASSISTANT COMMISSIONER OF INCOME TAX-10(2)(1), MUMB AI U/S 143(3) READ WITH SECTION 144C(13) OF THE INCOME TAX ACT, 1 961 PURSUANT TO THE DIRECTIONS OF LD. DISPUTE RESOLUTION PANEL [DRP] . THE INCOME OF THE IT [TP] A.NO.1984/MUM/2017 LAQSHYA MEDIA LIMITED ASSESSMENT YEAR-2012-13 2 ASSESSEE HAS BEEN ASSESSED AT RS.932.42 LACS UNDER NORMAL PROVISIONS AFTER CERTAIN ADDITIONS AND DISALLOWANCE S AS AGAINST RETURNED LOSS OF RS.683.48 LACS E-FILED BY THE ASSESSEE ON 3 0/11/2012. DURING IMPUGNED AY, THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE WAS ENGAGED IN THE BUSINESS OF OUTDOOR MEDIA ADVERTISING SERVICES . 1.2 THE ASSESSEE, VIDE LETTER DATED 11/06/2018, HAS INTIMATED THAT THE NAME OF THE ASSESSEE HAS BEEN CHANGED FROM LAQSHYA MEDIA PRIVATE LIMITED TO LAQSHYA MEDIA LIMITED WITH EFFECT FROM 27/09/2017 AND ALSO FILED REVISED FORM NO. 36B REFLECTING THE AFORESAID CHANGE. FINDING THE SAME IN ORDER, WE PROCEED TO DISPOSE-OFF THE SAME A S AGITATED BEFORE US BY RESPECTIVE REPRESENTATIVES. 1.3 AS EVIDENT FROM GROUNDS OF APPEAL, THE GRIEVANC E OF THE ASSESSEE ARISES OUT OF FOLLOWING ADDITIONS:- 2.1 THE EVENTS LEADING TO THE DISPUTE ARE THAT CERT AIN INTERNATIONAL TRANSACTIONS AS REPORTED BY THE ASSESSEE IN FORM NO.3CEB WERE REFERRED U/S 92CA(1) TO LD. TRANSFER PRICING OFFICER [TPO] FOR DETERMINATION OF ARMS LENGTH PRICE [ALP]. THE LD. TPO, VIDE ORDER U/S 92CA(3) DATED 06/01/2015, HAD PROPOSED FOLLOWING AD JUSTMENTS:- SR.NO. NATURE OF TP ADJUSTMENT AMOUNT (RS.) 1 ADJUSTMENT ON CORPORATE GUARANTEE GIVEN TO LMI (MAURITIUS) 1,41,30,000 NO. NATURE AMOUNT 1. TRANSFER PRICING ADJUSTMENT ON ACCOUNT OF CORPORATE GUARANTEE 1,27,17,000/- 2. TRANSFER PRICING ADJUSTMENT ON ACCOUNT OF INTEREST ON LOAN GIVEN TO AE 12,71,07,358/- 3. DISALLOWANCE OF INTEREST U/S 36(1)(III) 4,08,16, 288/- 4. DISALLOWANCE U/S 14A 2,58,300/- 5. MISMATCH IN FORM 26AS DATA 1,02,227/- 6. SHORT GRANT OF TDS IT [TP] A.NO.1984/MUM/2017 LAQSHYA MEDIA LIMITED ASSESSMENT YEAR-2012-13 3 2 ADJUSTMENT ON LOAN GIVEN TO AE (FOR INTEREST NOT RECEIVED) 12,72,09,970 TOTAL ADJUSTMENT 14,13,39,970 INCORPORATING THE SAME, DRAFT ASSESSMENT ORDER WAS PASSED ON 16/03/2016. BESIDES THESE ADJUSTMENTS, THE DRAFT AS SESSMENT ORDER HAS PROPOSED DISALLOWANCE U/S 14A FOR RS.2.58 LACS AND INTEREST DISALLOWANCE U/S 36(1)(III) FOR RS.214.05 LACS. THE INTEREST DISALLOWANCE AS PROPOSED WAS NET OF INTEREST DISALLOWANCE OF RS. 194.10 LACS SUO- MOTO DISALLOWED BY THE ASSESSEE U/S 43B IN THE COMPUTATI ON OF INCOME. 2.2 THE ASSESSEE CONTESTED THE ADDITIONS / ADJUSTME NTS AS PROPOSED IN THE DRAFT ASSESSMENT ORDER BEFORE LD. DRP VIDE DIRE CTIONS U/S 144C(5) DATED 13/12/2016 WHEREIN THE ASSESSEE GOT MARGINAL RELIEF SINCE TRANSFER PRICING [TP] ADJUSTMENT WERE REDUCED TO RS.13.98 CRORES AS AGAINST RS.14.13 CRORES AS PROPOSED IN THE DRAFT AS SESSMENT ORDER WHEREAS THE OTHER DISALLOWANCES / ADDITIONS HAVE BE EN CONFIRMED. GIVING EFFECT TO THE AFORESAID DIRECTIONS OF LD. DRP , THE INCOME OF THE ASSESSEE HAS BEEN DETERMINED AT RS.932.42 LACS. AGG RIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 3.1 THE LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE [AR], SHRI RAJAN R.VORA DRAWING OUR ATTENTION TO THE DOCUMENTS PLACED IN T HE PAPER-BOOK AGITATED THE ADDITIONS AS SUSTAINED BY THE LOWER AU THORITIES WHICH HAVE BEEN CONTROVERTED BY LD. DEPARTMENTAL REPRESENTATIV E [DR], SHRI AJIT PAL SINGH DAIA. 3.2 WE HAVE CAREFULLY HEARD THE RIVAL CONTENTIONS, PERUSED ORDERS OF LOWER AUTHORITIES AND DOCUMENTS PLACED IN THE PAPER-BOOK INCLUDING IT [TP] A.NO.1984/MUM/2017 LAQSHYA MEDIA LIMITED ASSESSMENT YEAR-2012-13 4 JUDICIAL PRONOUNCEMENTS AS CITED BEFORE US. OUR DEC ISION ON ISSUES AS AGITATED BEFORE US IS ENUMERATED IN THE SUCCEEDING PARAGRAPHS. 4. THE FIRST ISSUE IS RELATED WITH TP ADJUSTMENT AGAINST CERTAIN BANK GUARANTEE BEING PROVIDED BY THE ASSESSEE TO ITS ASSOCIATED ENTERPRISES [AE] . THE FACTS THAT EMERGES ARE THAT THE ASSESSEE HAD PROVIDED CORPORATE GUARANTEE OF AED 53 MILLION TO ITS MAURITIUS BASED ASSOCIATED ENTERPRISES [AE] NAMELY LAQSHYA MEDIA INTERNATIONAL (MAURITIUS) [LMI] WHO IN TURN GAVE GUARANTEE TO HSBC BANK MIDDLE EAST LTD., DUBAI FOR AED 33 MILLION AND TO NATIONAL BANK OF DUBAI, DUBAI FOR AED 20 MILLION FOR DUE REPAYMENT OF TERM LOAN AVAILED BY RIGHT ANGEL MEDIA FZ, LLC , A STEP DOWN SUBSIDIARY OF THE ASSESSEE COMPANY. THE CORPORATE GUARANTEE WAS REDUCED TO 51 MILLION VIDE AMENDMENT TO DEED OF GUARANTEE DATED 04/01/2010 AND FURTHER REDUCED TO A ED 40 MILLION. THE LD. TPO HAD PROPOSED THE ADJUSTMENT OF 2.25% AGAINS T THE SAME WHICH CAME TO RS.141.30 LACS. THE SAID ADJUSTMENT, UPON C ONFIRMATION BY LD. DRP, IS UNDER APPEAL BEFORE US. THOUGH THE LD. AR U RGED THAT THE SAID TRANSACTION WAS NOT AN INTERNATIONAL TRANSACTION BU T AT THE SAME TIME, FAIRLY CONCEDED THAT THE STATED ISSUE STOOD PARTLY COVERED IN ASSESSEES FAVOR BY THE ORDER OF THIS TRIBUNAL IN ASSESSEES O WN CASE FOR AY 2010- 11 [ITA NO. 500/MUM/2015 DATED 04/01/2017] AND ALSO FOR AY 2011-12 [ITA NO. 1774/MUM/2016] WHEREIN THE ADJUSTMENT AGAINST THE SAME HAS BEEN SUSTAINED TO THE EXTENT OF 0.50% IN TERMS OF T HE JUDGMENT OF HONBLE BOMBAY HIGH COURT RENDERED IN CIT VS. EVEREST KENTO CYLINDERS LTD. [378 ITR 57]. THERE BEING NO CHANGE IN MATERIAL FACTS OR CIRCUMSTANCES, TAKING THE SAME VIEW, WE RESTRICT TH E RATE OF IMPUGNED ADDITIONS TO 0.50% AS AGAINST 2.25% TAKEN BY THE LO WER AUTHORITIES. THIS IT [TP] A.NO.1984/MUM/2017 LAQSHYA MEDIA LIMITED ASSESSMENT YEAR-2012-13 5 GROUND STAND PARTLY ALLOWED. THE LD. AO IS DIRECTED TO MODIFY THE FINAL ASSESSMENT ORDER TO THAT EXTENT. 5.1 THE SECOND ISSUE OF TP ADJUSTMENT STEM FROM THE FACT THAT THE ASSESSEE, UNDER CONTRACTUAL TERMS, HAD GRANTED CERT AIN LOAN TO ONE OF ITS ASSOCIATED ENTERPRISE [AE] NAMELY LAQSHYA MEDIA INTERNATIONAL, MAURITIUS [LMI] FOR THE PURPOSE OF FURTHER LENDING TO STEP DOWN SUBSIDIARIES AND FOR ACQUIRING THE SHARES OF OVERSE AS ENTITIES BY THE AFORESAID AE . THE AMOUNT OF LOANS GRANTED TO LMI IN EARLIER YEARS FOR THE PURPOSE OF FURTHER LENDING AGGREGATED TO RS.77.76 C RORES AND FRESH LOANS GRANTED DURING THE IMPUGNED AY AGGREGATED TO RS.1.16 CRORES. THUS THE OUTSTANDING LOANS AGAINST LMI ON THIS ACCOUNT STOOD AT RS.78.92 CRORES. THE LOAN WAS SANCTIONED VIDE BOARD RESOLUTIONS DATED 10/02/2009 & 14/04/2009 AND LOAN AGREEMENT DATED 17/06/2009 FOR THE PURPOSE OF LENDING IN VARIOUS STEP DOWN SUBSIDIARIE S AT RATE OF INTEREST OF 14% PER ANNUM. THE ABOVE LOANS WERE MAINLY USED TO PROVIDE FURTHER LOANS TO STEP DOWN SUBSIDIARY NAMELY RIGHT ANGLE MEDIA, DUBAI [RAM] THROUGH ANOTHER SUBSIDIARY NAMELY GULF MEDIA HOLDING, MAURITIUS. THE ENTITY RAM, BEING ULTIMATE USER OF THE FUND, WAS ENGAGED IN PRO VIDING OUT OF HOME MEDIA ADVERTISING SOLUTIONS . AS PER ASSESSEES SUBMISSIONS, THE SAID ENTITY I.E. RAM INCURRED HUGE LOSSES WHICH ERODED ITS ENTIRE NET WORTH WHICH CREATED MATERIAL UNCERTA INTY WITH REGARD TO RECOVERABILITY OF LOAN. ACCORDINGLY, THE ASSESSEE M ADE SUBSTANTIAL PROVISION AGAINST THE SAME IN ITS BOOKS OF ACCOUNTS AND THEREFORE, DEEM IT PRUDENT NOT TO ACCRUE ANY INTEREST AGAINST THE O UTSTANDING LOAN. 5.2 PURSUANT TO LOAN AGREEMENT DATED 16/06/2009, TH E ASSESSEE HAD GRANTED ANOTHER LOAN OF RS.13 CRORES @13% IN EARLIE R YEARS TO LMI FOR IT [TP] A.NO.1984/MUM/2017 LAQSHYA MEDIA LIMITED ASSESSMENT YEAR-2012-13 6 THE PURPOSE OF ACQUIRING THE SHARES OF AN ENTITY NA MELY APJ DIGITAL, MAURITIUS ENGAGED IN THE DIGITAL MEDIA BUSINESS WITH A VIEW TO EXPAND ITS BUSINESS. HOWEVER FINDING THE ACQUISITION UNVIABLE, THE DEAL COULD NOT BE FINALIZED WHICH MADE THE RECOVERY OF RS.13 CRORES D OUBTFUL AND THEREFORE, THE PROVISION WAS CREATED AGAINST THE SA ME IN SIMILAR MANNER BY THE ASSESSEE AND NO INTEREST WAS ACCRUED AGAINST THE OUTSTANDING LOAN IN ACCORDANCE WITH PRUDENT ACCOUNTING NORMS AN D PRACTICES. RELIANCE WAS PLACED ON CERTAIN JUDICIAL PRONOUNCEME NTS TO SUBMIT THAT NON-CHARGING OF INTEREST AGAINST THE DOUBTFUL LOAN WAS AT ARMS LENGTH PRICE [ALP] AND THEREFORE, THE TP ADJUSTMENTS AGAINST THE SAME WERE NOT JUSTIFIED UNDER THE CIRCUMSTANCES. IN THE ALTER NATIVE, IT WAS SUBMITTED THAT THE AFORESAID LOANS, BEING IN FOREIGN CURRENCY , WERE TO BE BENCHMARKED AT LIBOR RATES. HOWEVER, THE AFORESAID SUBMISSIONS COULD NOT FIND FAVOR WITH LD. TPO WHO, KEEPING IN VIEW TH E RATE OF INTEREST OF 13%-14% BEING CHARGED BY THE ASSESSEE IN EARLIER YE ARS AS PER CONTRACTUAL TERMS AND ACCEPTED BY REVENUE, BENCHMAR KED THE SAME IN SIMILAR MANNER WHICH GAVE RISE TO IMPUGNED ADJUSTME NT OF RS.12.72 CRORES IN THE HANDS OF THE ASSESSEE. 5.3 THE LD. DRP OPINED THAT GRANTING OF LOAN TO AE WAS AN INTERNATIONAL TRANSACTION WHICH WAS TO BE BENCHMARK ED APPROPRIATELY REGARDLESS OF THE FACT THAT WHETHER THE ASSESSEE CH ARGED INTEREST AGAINST THE SAME OR NOT OR WHETHER THE AE WAS IN POSITION TO REPAY THE LOAN OR NOT. ARGUMENTS OF COMMERCIAL EXPEDIENCY/ STRATEGIC INVESTMENT / REAL INCOME WERE NOT RELEVANT FOR DETERMINATION OF ALP OF THE INTERNATIONAL TRANSACTION AND NOTHING PREVENTED THE ASSESSEE TO W RITE-OFF THE INTEREST WHICH ULTIMATELY COULD NOT BE RECOVERED. THE PLEA T O BENCHMARK THE IT [TP] A.NO.1984/MUM/2017 LAQSHYA MEDIA LIMITED ASSESSMENT YEAR-2012-13 7 SAME AT LIBOR WAS ALSO REJECTED SINCE, UPON PERUSAL OF LOAN AGREEMENT, IT WAS CONCLUDED THAT THE LOAN WAS REPAY ABLE IN INDIAN CURRENCY AND THEREFORE, THE INDIAN RATE WAS TO BE A PPLIED TO BENCHMARK THE SAME. FINALLY, THE STAND OF LD. TPO GOT CONFIRM ED WHICH WAS INCORPORATED IN THE FINAL ASSESSMENT ORDER PASSED B Y LD. AO. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5.4 THE LD. AR, SUBMITTED THAT ALP OF THESE TRANSACTIONS WAS TO BE COMPUTED AS NIL SINCE THE OUTSTANDING LOANS WERE NOTHING BUT NON- PERFORMING ASSETS / STRESSED ASSETS FOR THE ASSESSE E. OUR ATTENTION IS DRAWN TO THE FACT THAT THE LOANS AS WELL AS ACCRUED INTEREST WAS FINALLY WRITTEN-OFF IN THE BOOKS IN SUBSEQUENT AY AND THERE FORE, THE ADDITIONS THEREOF IN IMPUGNED AY WAS NOT JUSTIFIED. IT WAS SU BMITTED THAT THERE WAS COMPLETE DISCLOSURE OF THE IMPUGNED TRANSACTIONS IN BOOKS OF ACCOUNTS AS WELL AS IN THE NOTES TO THE ACCOUNT AND THE ASSE SSEE MADE PROVISION OF 50% OF THE VALUE OF LOANS AND INVESTMENTS MADE I N LMI AND 100% OF INTEREST ACCRUED ON LOAN TO LMI DURING THE YEAR AND THEREFORE, CHARGING THE INTEREST IN THE BOOKS AND THEREAFTER WRITING-OF F THE SAME WOULD HAVE BEEN TAX NEUTRAL. IT WAS ALSO SUBMITTED THAT THE AF ORESAID TRANSACTIONS WERE DULY CONSIDERED IN TP STUDY CARRIED OUT BY THE ASSESSEE WHEREIN THE SAME WERE BENCHMARKED AT NIL RATE OF INTEREST KEEPING IN VIEW THE PREVAILING CIRCUMSTANCES. 5.5 THE LD. AR SUBMITTED THAT THE ASSESSEE WAIVED T HE INTEREST KEEPING IN VIEW THE OVERALL CIRCUMSTANCES AND PRINC IPLES OF COMMERCIAL EXPEDIENCY WHICH REVENUE AUTHORITIES COULD NOT QUES TION. A PLEA HAS ALSO BEEN RAISED THAT KEEPING IN VIEW THE REAL INCOME THEORY, HYPOTHETICAL INCOME WHICH COULD NEVER BE EARNED BY THE ASSESSEE COULD IT [TP] A.NO.1984/MUM/2017 LAQSHYA MEDIA LIMITED ASSESSMENT YEAR-2012-13 8 NOT BE BROUGHT TO TAX. ANOTHER PLEA WAS BASED ON TH E FACT THAT SINCE NO INCOME WAS EARNED BY THE ASSESSEE FORM IMPUGNED TRA NSACTIONS, THE SAME COULD NOT BE CONSIDERED AS AN INTERNATIONAL TR ANSACTION WITHIN THE MEANING OF SECTION 92. AN ALTERNATIVE PLEA WAS ALSO RAISED THAT SINCE THE LOANS WERE GIVEN IN FOREIGN CURRENCY, THE SAME WERE TO BE BENCHMARKED AT LIBOR RATE ONLY. 5.6 WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS A ND RELEVANT MATERIAL ON RECORD. THE UNDISPUTED FACTS ARE THAT P URSUANT TO CONTRACTUAL TERMS, THE ASSESSEE HAD ADVANCED LOANS TO ITS AE IN FURTHERANCE OF BUSINESS INTEREST I.E. FOR THE PURPOSE OF FURTHER L ENDING TO STEP DOWN SUBSIDIARY AS WELL AS TO ACQUIRE THE STAKE IN ANOTH ER ENTITY. IT IS ALSO UNDISPUTED FACT THAT AS PER THE CONTRACTUAL TERMS, THE ASSESSEE WAS ENTITLED FOR INTEREST RANGING FROM 13%-14% AND THE SAME HAS ALSO BEEN RECOGNIZED AS INCOME IN THE EARLIER YEARS. HOWEVER, FOR THE IMPUGNED AY, NO INTEREST HAS BEEN CHARGED BY THE ASSESSEE PR IMARILY IN VIEW OF THE FACT THAT THE AFORESAID LOANS BECAME DOUBTFUL D UE TO LOSSES SUSTAINED BY ITS AE. THE PRIMARY ARGUMENT OF LD. AR REST ON THE PREMISE THAT THE LOANS BEING STRESSED ASSET / NON-PERFORMIN G ASSETS AND THEREFORE, ARE TO BE BENCHMARKED AT NIL RATE OF INTEREST . HOWEVER, THE FACT REMAINS THE SAME THAT THE ASSESSEE HAS ADVANCE D LOAN PURSUANT TO LOAN AGREEMENTS / ARRANGEMENTS TO ITS AE AND WAS ENTITLED TO CERTAIN RATE OF INTEREST. THESE LOAN TRANSACTIONS AS ENTERE D INTO BY THE ASSESSEE WITH THE AE SQUARELY FALLS WITHIN THE AMBIT OF SECTION 92(1) / 92B AS AN INTERNATIONAL TRANSACTIONS AS ACCEPTED BY THE ASSES SEE IN ITS TP STUDY AND THE STATUTORY PROVISIONS MANDATES THAT THE INCO ME FROM SUCH TRANSACTIONS IS TO BE COMPUTED ON THE PRINCIPLE OF ARM'S LENGTH PRICE IT [TP] A.NO.1984/MUM/2017 LAQSHYA MEDIA LIMITED ASSESSMENT YEAR-2012-13 9 IRRESPECTIVE OF THE FACT THAT NO SUCH INCOME HAS AC TUALLY ACCRUED TO THE ASSESSEE. THIS BEING SO, THE ARGUMENT OF PRINCIPLES OF COMMERCIAL EXPEDIENCY OR NOTIONAL INCOME OR REVENUE NEUTRALITY AS RAISED BEFORE US FAILS SINCE AS LONG AS THE TRANSACTION IS AN INTERN ATIONAL TRANSACTION WITHIN THE FRAMEWORK OF LAW, THE COMPUTATION OF INCOME THERE-FROM HAS TO BE ON THE BASIS OF ARM'S LENGTH PRINCIPLE. THIS CONCLUSIO N OR OUR DRAWS STRENGTH FROM THE RATIO OF DECISION OF KOLKATA TRIBUNAL (SPECIAL BENCH) RENDERED UNDER SIMILAR CIRCUMSTANCES IN INSTRUMENTARIUM CORPORATION LIMITED VS. ADIT [71 TAMXANN.COM 193] WHEREIN HONBLE BENCH HELD AS UNDER:- 37. IN OUR CONSIDERED VIEW, THE COMMERCIAL EXPEDIENCY OF A LOAN TO SUBSIDIARY IS WHOLLY IRRELEVANT IN ASCERTAINING ARM'S LENGTH INTE REST ON SUCH A LOAN. THERE IS INDEED NO BAR ON ANYONE ADVANCING AN INTEREST FREE LOAN TO ANYONE BUT WHEN SUCH TRANSACTIONS ARE COVERED BY THE INTERNATIONAL TRANS ACTIONS BETWEEN THE ASSOCIATED ENTERPRISE, SECTION 92 OF THE ACT MANDATES THAT THE INCOME FROM SUCH TRANSACTIONS IS TO BE COMPUTED ON THE BASIS OF ARM'S LENGTH PRICE. THE JUDICIAL PRECEDENTS RELIED BY THE ASSESSEE, SUCH AS IN THE CASE OF SA BUILDERS LT D. (SUPRA), IN SUPPORT OF THE PROPOSITION THAT INTEREST FREE ADVANCE TO THE SUBSI DIARY, IN WHICH ASSESSEE HAS DEEP INTEREST, ARE JUSTIFIED ON THE GROUNDS OF COMMERCIA L EXPEDIENCY ARE IN THE CONTEXT OF THE QUESTION WHETHER SUCH A USE OF BORROWED FUNDS C AN BE SAID TO BE FOR THE PURPOSES OF BUSINESS, AND, ACCORDINGLY, WHETHER INT EREST ON BORROWINGS FOR FUNDS SO USED CAN BE ALLOWED AS A DEDUCTION IN COMPUTATION O F BUSINESS INCOME OF THE ASSESSEE. THAT IS NOT THE ISSUE HERE, AND THESE JUD ICIAL PRECEDENTS ON THE COMMERCIAL EXPEDIENCY, THEREFORE, HAVE NO RELEVANCE IN COMPUTATION OF ARM'S LENGTH PRICE OF LOAN GIVEN TO AN ASSOCIATED ENTERPRISE. SI MILARLY, LEARNED COUNSEL'S CONTENTION THAT A NOTIONAL INCOME CANNOT BE TAXED, AND RELIANCE ON SHOORJI VALLABHDAS & CO.'S CASE (SUPRA) IN THIS REGARD, IS WHOLLY MISPLACED BECAUSE THAT PROPOSITION IS IN THE CONTEXT OF TAX LAWS IN GENERA L, WHEREAS, TRANSFER PRICING PROVISIONS, BEING ANTI ABUSE PROVISIONS WITH THE SA NCTION OF THE STATUTE, COME INTO PLAY IN THE SPECIFIC SITUATION OF CERTAIN TRANSACTI ONS WITH THE ASSOCIATED ENTERPRISE. THE GENERAL PROVISIONS OF THE LAW HAVE TO GIVE WAY TO THESE SPECIFIC ANTI ABUSE PROVISIONS. WHILE A NOTIONAL INTEREST INCOME CANNOT INDEED BE BROUGHT TO TAX IN GENERAL, THE ARM'S LENGTH PRINCIPLE REQUIRES THAT I NCOME IS COMPUTED, IN CERTAIN SITUATIONS, ON THE BASIS OF CERTAIN ASSUMPTIONS WHI CH ARE INHERENTLY NOTIONAL IN NATURE. WHEN THE LEGAL PROVISIONS ARE NOT IN PARI M ATERIA, AS THE PROVISION OF NORMAL COMPUTATION OF INCOME AND THE PROVISION OF COMPUTAT ION OF INCOME IN THE CASE OF INTERNATIONAL TRANSACTIONS BETWEEN THE ASSOCIATED E NTERPRISES, WHAT IS HELD TO BE CORRECT IN THE CONTEXT OF ONE SET OF LEGAL PROVISIO NS HAS NO APPLICATION IN THE CONTEXT OF THE OTHER SET OF LEGAL PROVISIONS. IT [TP] A.NO.1984/MUM/2017 LAQSHYA MEDIA LIMITED ASSESSMENT YEAR-2012-13 10 KEEPING IN VIEW THE SAME, WE REJECT THE VARIOUS CON TENTIONS RAISED BY LD. AR, IN THIS REGARD. 5.7 NOW THE ONLY QUESTION THAT SURVIVES FOR OUR CON SIDERATION IS APPLICABLE INTEREST RATE AGAINST THE SAME. THE LD. AR HAS SUPPORTED THE ARGUMENT THAT THE SAME SHOULD BE BENCHMARKED AT LIBOR WITH THE FOLLOWING JUDICIAL PRONOUNCEMENTS:- (I) COTTON NATURALS INDIA PVT. LTD. [55 TAXMANN.COM 523 HONBLE DELHI HC] (II) TATA AUTO-COMP SYSTEMS LTD [374 ITR 516 HONBL E BOMBAY HIGH COURT] (III) TRANSPORT CORPORATION OF INDIA LTD. [ITA 117/ HYD/2016 HYDERABAD TRIBUNAL] (IV) PIRAMAL GLASS LIMITED [ITA NO. 157/MUM/2016 MU MBAI TRIBUNAL] (V) INSTRUMENTARIUM CORPORATION LTD. [ITA 1584/KOL/ 2009 KOLKATA TRIBUNAL] THE LD. AR SUBMITTED THAT THE ASSESSEE HAD ADVANCED LOANS IN FOREIGN CURRENCY I.E. US DOLLARS AND THEREFORE, THE BENCHMARKING WAS TO BE DONE AT LIBOR IN TERMS OF ABOVE JUDICIAL PRONOUNCEMENTS. TO SUPPO RT THE SAME, ADDITIONAL EVIDENCES IN THE SHAPE OF OUTWARD REMITTANCE ADVICES ISSUED BY THE BANK AND OTHER DOCUMENTS HAS BEEN PLA CED ON PAGE NUMBERS 633 TO 646 OF THE PAPER BOOK. IN CONTRAST TO THIS, LD. DRP AT PARA 3.26.1 OF ITS DIRECTIONS, UPON PERUSAL OF LOAN AGREEMENT, HAD OPINED THAT THE LOAN WAS REPAYABLE IN INDIAN CURRENCY AND THEREFORE, THE SAME WAS TO BE BENCHMARKED AS PER INDIAN RATES IN TERMS OF JUDGMENT OF HONBLE DELHI HIGH COURT RENDERED IN COTTON NATURALS INDIA PVT. LTD. [SUPRA]. SINCE ADDITIONAL EVIDENCES HAVE BEEN PLACED BEFORE US FOR THE FIRST TIME WHICH ARE GERMANE TO THE ADJUDICATION OF THE ISSUE AND THE FACT AS TO THE CURRENCY IN WHICH THE LOAN WAS GRANTED AN D THE CURRENCY IN WHICH IT WAS REPAYABLE IS NOT QUITE CERTAIN, THE IS SUE REQUIRES RE- APPRECIATION BY LOWER AUTHORITIES. FOR THE AFORESAI D LIMITED PURPOSE, THE MATTER STAND REMITTED BACK TO THE FILE OF LD. AO / TPO WITH A DIRECTION TO IT [TP] A.NO.1984/MUM/2017 LAQSHYA MEDIA LIMITED ASSESSMENT YEAR-2012-13 11 THE ASSESSEE TO PROVIDE REQUISITE DETAILS & INFORMA TION TO SUBSTANTIATE THE CLAIM. THIS GROUND STAND PARTLY ALLOWED FOR STA TISTICAL PURPOSES. 6. THE THIRD ISSUE IS RELATED WITH INTEREST DISALLO WANCE U/S 36(1)(III). FACTS REGARDING THE SAME ARE THAT DURING ASSESSMENT PROCEEDINGS, IT WAS NOTED THAT THE ASSESSEE DEBITED INTEREST EXPEND ITURE OF RS.6.05 CRORES AGAINST INTEREST BEARING LOANS OF RS.62.62 C RORES INCLUDING TERM LOAN OF RS.34.92 CRORES. AS AGAINST THIS, THE ASSES SEE ALSO ADVANCED INTEREST FREE LOANS TO ITS SUBSIDIARIES, WHICH STOO D AT RS.31.18 CRORES AS ON 31/03/2012 AS AGAINST RS.30.65 CRORES AS ON 31/0 3/2011. THE AFORESAID OBSERVATION, IN THE OPINION OF LD. AO, CA LLED FOR INTEREST DISALLOWANCE U/S 36(1)(III). ACCORDINGLY, INTEREST PAID FOR RS.214.05 LACS TOWARDS WORKING CAPITAL LOANS OBTAINED BY THE ASSES SEE WAS DISALLOWED AND ADDED BACK TO THE INCOME OF THE ASSESSEE. THE L D. DRP, RELYING UPON THE DIRECTIONS GIVEN BY ITS PREDECESSORS IN AY S 2010-11 & 2011-12 UPHELD THE SAME, AGAINST WHICH THE ASSESSEE IS UNDE R APPEAL BEFORE US. THE LD. AR SUBMITTED THAT ISSUE IN EARLIER YEARS WA S AGITATED BEFORE THIS TRIBUNAL WHEREIN THE IMPUGNED ADDITIONS WERE DELETE D UNDER IDENTICAL CIRCUMSTANCES. THE COPIES OF THE TRIBUNALS ORDER I N ASSESSEES OWN CASE FOR AYS 2010-11 & 2011-12 HAVE BEEN PLACED ON RECORD. OUR ATTENTION HAS BEEN DRAWN TO THE FINANCIAL STRUCTURE OF THE ASSESSEE DURING IMPUGNED AY TO SUBMIT THAT SIMILAR FACTS EXI ST IN THIS YEAR ALSO. UPON CAREFUL CONSIDERATION, WE FIND THAT THE ISSUE IS REPETITIVE IN NATURE AND THE SAME HAS ALREADY BEEN DEALT WITH BY THIS TR IBUNAL FOR EARLIER AY 2010-11 WHICH HAS BEEN FOLLOWED IN AY 2011-12. FOR EASE OF REFERENCE, THE RELEVANT OBSERVATION OF THE TRIBUNAL IN ITS ORD ER FOR AY 2010-11 COULD BE REPRODUCED IN THE FOLLOWING MANNER:- IT [TP] A.NO.1984/MUM/2017 LAQSHYA MEDIA LIMITED ASSESSMENT YEAR-2012-13 12 5.5 WE HAVE HEARD VARIOUS CONTENTIONS AND PERUSED R ELEVANT MATERIAL INCLUDING CITED CASE LAWS. AFTER ANALYZING THE VARIOUS JUDICIAL PRO NOUNCEMENTS, WE FIND STRENGTH IN THE VARIOUS ARGUMENTS OF LD. AR. THE PERUSAL OF NET WOR TH STATEMENTS REVEALS THAT AS ON 31/03/2010, THE ASSESSEES CAPITAL STRUCTURE STOOD AS FOLLOWS:- LIABILITIES AMOUNT (RS. IN CRORES) ASSETS AMOUNT (RS. IN CRORES) SHAREHOLDERS FUND 249.00 FIXED ASSETS 27.45 LOAN FUNDS 64.22 INVESTMENTS 12.60 LOANS & ADVANCES 143.23 NET CURRENT ASSETS 4.82 PROFIT & LOSS A/C 125.12 TOTAL 313.22 313.22 IT CAN BE OBSERVED THAT AGAINST SHARE HOLDERS FUND S OF RS.249.00 CRORES, THE LOANS & ADVANCES STOOD AT RS.143.23 CRORES OUT OF WHICH IMP UGNED INTEREST FREE LOANS ARE RS.102.02 CRORES AND HENCE OWNED FUNDS ARE SUFFICIE NT TO COVER THE SAID LOANS. IT IS WELL SETTLED BY CATENA OF JUDGMENTS THAT IN SUCH A SCENA RIO, IT IS TO BE PRESUMED THAT THE INVESTMENT MADE IN SUBSIDIARY WERE OUT OF OWN FUNDS AND NOT OUT OF BORROWED FUNDS. HONBLE JURISDICTIONAL BOMBAY HIGH COURT IN CIT VS. HDFC BANK LTD.(SUPRA) HAVE OBSERVED THAT IF ASSESSEES CAPITAL, PROFITS RESERVES AND SU RPLUS WERE HIGHER THAN THE INVESTMENT IN TAX FREE SECURITIES THEN IT WOULD HAVE TO BE PRESUM ED THAT INVESTMENT MADE BY ASSESSEE WOULD BE OUT OF INTEREST FREE FUNDS AVAILABLE WITH THE ASSESSEE. FURTHER, WE FIND THAT THE ASSESSEE AND ITS SUBSIDIARIES ARE IN THE SAME LINE OF BUSINESS AND THE SAID LOANS ARE OUT OF COMMERCIAL EXPEDIENCY. THE FUNDS ADVANCED TO SUBSID IARIES HAVE BEEN USED FOR ITS BUSINESS AND THIS FACT IS NOWHERE DISPUTED BY THE R EVENUE. THE HONBLE APEX COURT IN S.A.BUILDERS VS. CIT (SUPRA) HAS CONCLUDED THAT INT EREST ON BORROWED FUNDS CANNOT BE DISALLOWED IF THE ASSESSEE HAS ADVANCED INTEREST FR EE LOAN TO A SISTER CONCERN AS A MEASURE OF COMMERCIAL EXPEDIENCY. WHAT IS TO BE SEEN IS BUS INESS PURPOSE AND WHAT THE SISTER CONCERN DID WITH THE MONEY. THE EXPRESSION COMMERC IAL EXPEDIENCY IS AN EXPRESSION OF WIDE IMPORT AND INCLUDES SUCH EXPENDITURE AS A PRUD ENT BUSINESSMAN INCURS FOR THE PURPOSE OF BUSINESS. THE EXPENDITURE MAY NOT HAVE B EEN INCURRED UNDER ANY LEGAL OBLIGATION, BUT YET IT IS ALLOWABLE AS A BUSINESS E XPENDITURE IF IT WAS INCURRED ON GROUNDS OF COMMERCIAL EXPEDIENCY. FURTHER, THE EXPRESSION FOR THE PURPOSE OF BUSINESS IS WIDER IN SCOPE THAN THE EXPRESSION FOR THE PURPOSE OF EARNI NG PROFITS. ONCE IT IS ESTABLISHED THAT THERE WAS NEXUS BETWEEN THE EXPENDITURE AND THE PUR POSE OF THE BUSINESS WHICH NEED NOT NECESSARILY BE THE BUSINESS OF THE ASSESSEE ITSELF, THE REVENUE CANNOT JUSTIFIABLY CLAIM TO PUT ITSELF IN THE ARMCHAIR OF THE BUSINESSMAN OR IN THE POSITION OF THE BOARD OF DIRECTORS AND ASSUME THE ROLE TO DECIDE HOW MUCH IS REASONABLE EX PENDITURE HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE. NO BUSINESSMAN CAN BE CO MPELLED TO MAXIMIZE HIS PROFITS. THE IT AUTHORITIES MUST PUT THEMSELVES IN THE SHOES OF THE ASSESSEE AND SEE HOW A PRUDENT BUSINESSMAN WOULD ACT. THE AUTHORITIES MUST NOT LOO K THE MATTER FROM THEIR OWN VIEWPOINT BUT THAT OF A PRUDENT BUSINESSMAN. 5.6 KEEPING ALL THESE FACTORS IN MIND AND ON THE FA CTS AND CIRCUMSTANCES OF THE CASE, WE ARE INCLINED TO DELETE IMPUGNED ADDITIONS. THE GROU ND OF ASSESSEES APPEAL SUCCEEDS. IT [TP] A.NO.1984/MUM/2017 LAQSHYA MEDIA LIMITED ASSESSMENT YEAR-2012-13 13 THE RATIO OF THE ABOVE DECISION HAS BEEN FOLLOWED I N AY 2011-12. SIMILAR FACTS EXIST IN THE IMPUGNED AY AND THERE IS NO MATE RIAL CHANGE IN THE FACTUAL MATRIX. FURTHER, THERE IS ONLY A MARGINAL I NCREASE OF RS.0.53 CRORES IN LOANS GRANTED BY THE ASSESSEE TO ITS SUBS IDIARY DURING THE IMPUGNED AY. THEREFORE, RESPECTFULLY FOLLOWING THE CONSISTENT STAND OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR AYS 2010-11 & 2011-12, THE IMPUGNED ADDITIONS OF RS.214.05 LACS STAND DELETED. THE SUO-MOTO DISALLOWANCE OF RS.194.10 LACS AS MADE BY ASSESSEE WHILE COMPUTING ITS INCOME REMAIN INTACT SINCE THE SAME HAS BEEN AD DED BACK IN TERMS OF THE PROVISIONS OF SECTION 43B. THIS GROUND RAISED I N THIS REGARD, STAND ALLOWED TO THE EXTENT AS DISCUSSED HEREINABOVE. 7.1 THE NEXT ISSUE PERTAINS TO DISALLOWANCE U/S 14A . THE ASSESSEE HAS EARNED EXEMPT DIVIDEND INCOME OF RS.85,136/- FROM C ERTAIN MUTUAL FUNDS. THE ASSESSEES OPENING & CLOSING INVESTMENTS STOOD AT RS.12.60 CRORES & RS.22.79 CRORES RESPECTIVELY. THE LD. AO, APPLYING RULE 8D(2)(III) HAS COMPUTED DISALLOWANCE @0.5% ON AVERA GE INVESTMENTS WHICH CAME TO RS.2,58,300/-. THE SAME HAS ALSO BEEN ADDED BACK WHILE ARRIVING AT BOOK PROFIT U/S 115JB FOR THE COMPUTATI ON OF MINIMUM ALTERNATIVE TAX [MAT] . THE ADDITION, UPON CONFIRMATION BY LD. DRP, IS UNDER APPEAL BEFORE US. 7.2 THE LD. AR HAS PLEADED THAT ONLY THOSE INVESTME NTS WHICH HAS YIELDED EXEMPT INCOME DURING THE IMPUGNED AY WERE T O BE CONSIDERED FOR THE PURPOSE OF COMPUTATION OF DISALLOWANCE AND FURTHER, THE ADJUSTMENT OF THE SAME WHILE ARRIVING AT THE BOOK P ROFIT WAS NOT WARRANTED. FOR BOTH THE SUBMISSIONS, RELIANCE HAS B EEN PLACED ON THE JUDGMENT OF SPECIAL BENCH OF DELHI TRIBUNAL RENDERE D IN ACIT VS. VIREET IT [TP] A.NO.1984/MUM/2017 LAQSHYA MEDIA LIMITED ASSESSMENT YEAR-2012-13 14 INVESTMENT (P.) LTD. [82 TAXMANN.COM 415]. THE LD. DR SUPPORTED THE STAND TAKEN BY LOWER AUTHORITIES. 7.3 WE HAVE CAREFULLY HEARD THE RIVAL CONTENTIONS. THE DOCUMENTS ON RECORD REVEAL THAT THE ASSESSEE HAS EARNED DIVIDEND INCOME OF RS.85,135/- ON 23/08/2011 AGAINST BIRLA SUN LIFE MUTUAL FUND. THE DISALLOWANCE UNDER DISPUTE IS EXPENSE DISALLOWANCE AS PER RULE 8D(2)(III). AFTER PERUSAL OF DECISION OF SPECIAL BE NCH OF DELHI TRIBUNAL IN ACIT VS. VIREET INVESTMENT (P.) LTD. [SUPRA] , WE OBSERVE THAT THE SPECIAL BENCH, AFTER CONSIDERING CATENA OF JUDICIAL PRONOUN CEMENTS, HAS ARRIVED AT CONCLUSION THAT ONLY THOSE INVESTMENTS ARE TO BE CONSIDERED FOR COMPUTING AVERAGE VALUE OF INVESTMENTS WHICH YIELDE D EXEMPT INCOME DURING THE YEAR. RESPECTFULLY FOLLOWING THE SAME, W E DIRECT LD. AO TO RE- COMPUTE THE DISALLOWANCE AFTER CONSIDERING ONLY THO SE INVESTMENTS WHICH HAVE YIELDED EXEMPT INCOME DURING THE YEAR. T HE ASSESSEE IS DIRECTED TO PROVIDE REQUISITE DETAILS IN THIS REGAR D. 7.4 SO FAR AS ADJUSTMENT OF DISALLOWANCE U/S 14A IN COMPUTATION OF BOOK PROFIT U/S 115JB IS CONCERNED, WE FIND THAT TH E MATTER STOOD SQUARELY COVERED IN ASSESSEES FAVOUR BY THE SAME J UDGMENT OF DELHI TRIBUNAL (SPECIAL BENCH) RENDERED IN ACIT VS. VIREET INVESTMENT (P.) LTD. [82 TAXMANN.COM 415]. UPON PERUSAL OF THE SAME, WE FIND THAT SPECIAL BENCH, AFTER CONSIDERING TWO CONTRARY DECIS ION OF HONBLE DELHI HIGH COURT TITLED AS CIT VS. GOETZE (INDIA) LTD. [2014 361 ITR 505] & PCIT VS. BHUSHAN STEEL LTD. [ITA 593/2015 DATED 29/ 09/2015], TOOK THE VIEW FAVORABLE TO THE ASSESSEE IN TERMS OF RATIO OF DECISION OF HONBLE SUPREME COURT RENDERED IN CIT VS. VEGETABLE PRODUCTS LIMITED [1973 88 ITR 192]. THE DECISION IN PCIT VS. BHUSHAN STEEL LTD. , IN TURN, IT [TP] A.NO.1984/MUM/2017 LAQSHYA MEDIA LIMITED ASSESSMENT YEAR-2012-13 15 PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT RENDERED IN APOLLO TYRES LTD. VS. CIT [255 ITR 273] WHICH HELD THAT THE ASSESSING OFFICER DID NOT HAVE THE JURISDICTION TO GO BEHIND THE NET PROFIT SHOWN IN THE PROFIT & LOSS ACCOUNT EXCEPT TO THE EXTENT PROV IDED IN EXPLANATION TO SECTION 115J. SIMILAR VIEW HAS BEEN EXPRESSED BY OU R JURISDICTIONAL BOMBAY HIGH COURT RENDERED IN CIT VS. JSW ENERGY LIMITED [2015 60 TAXMANN.COM 303], CIT V. ESSAR TELEHOLDINGS LTD. [ITA NO. 438 OF 2012, DATED 07/08/2014] & CIT VS. BENGAL FINANCE & INVESTMENTS PVT. LIMITED [ITA NO. 337 OF 2013 DATED 10/02/2015]. THEREFORE, RESPECTFULLY FOLLOWING THE CATENA OF JUDGMENT IN ASSESSEES FAVOUR, WE HOL D THAT ADJUSTMENT OF DISALLOWANCE U/S 14A WAS NOT REQUIRED TO BE MADE IN BOOK PROFITS FOR THE PURPOSE OF SECTION 115JB. 7.5 THE GROUNDS RAISED IN THIS REGARD STAND ALLOWED IN TERMS OF OUR ABOVE ORDER. 8. THE ROOT OF NEXT ISSUE LIE IN THE FACT THAT CERT AIN INCOMES AS REFLECTED IN FORM 26AS WERE NOT FOUND TO BE CREDITED IN THE PROFIT & LOSS ACCOUNT AND THE INCOME TO THE EXTENT OF RS.1.02 LAC S COULD NOT BE RECONCILED BY THE ASSESSEE. THE LD. DRP DIRECTED LD . AO TO MAKE FURTHER ENQUIRIES FROM THE PARTIES CONFIRMED. SINCE NO RESPONSE WAS RECEIVED FROM THE CONCERNED PARTIES TILL THE DATE O F IMPUGNED ORDER, THE ADDITION THEREOF WAS MADE IN THE HANDS OF THE ASSES SEE. THE LD. AR HAS PLEADED THAT THE ADDITIONS ARE NOT WARRANTED AND RA ISED AN ALTERNATIVE PLEA THAT THE CREDIT OF TDS AGAINST THOSE PAYMENT S HOULD BE GRANTED TO THE ASSESSEE. UPON DUE CONSIDERATION OF FACTUAL MAT RIX, WE FIND THAT ONUS TO RECONCILE THE ENTRIES WAS ON ASSESSEE. SINC E IMPUGNED ORDER WAS PASSED ON 31/01/2017, LD. AO IS DIRECTED TO RE- APPRECIATE THE IT [TP] A.NO.1984/MUM/2017 LAQSHYA MEDIA LIMITED ASSESSMENT YEAR-2012-13 16 ENTRIES IN FORM 26AS AND RE-ADJUDICATE THE SAME IN THE LIGHT OF THE CONFIRMATIONS / ANY OTHER EVIDENCES RECEIVED AFTER THE DATE OF THE IMPUGNED ORDER. THIS GROUND STAND ALLOWED FOR STATI STICAL PURPOSES. 9. THE LAST ISSUE CONCERNS SHORT GRANT OF TDS CREDIT. AS PER ASSESSEES SUBMISSIONS, THERE IS SHORT GRANT OF TDS TO THE EXTENT OF RS.7.15 LACS ON ACCOUNT OF THE FACT THAT POST RETUR N FILING, SOME OF THE ASSESSEES CUSTOMERS HAVE FILED REVISED STATEMENT O F TDS. AS PER LD. ARS SUBMISSIONS, COMPLETE TDS RECONCILIATION HAS A LREADY BEEN FILED BEFORE LOWER AUTHORITIES. THEREFORE, LD. AO ID DIRE CTED TO VERIFY THE SAME AND GRANT TDS CREDIT AS PER LAW WHICH HAS ACCRUED T O THE ASSESSEE DURING IMPUGNED AY. THIS GROUND STAND ALLOWED FOR S TATISTICAL PURPOSES. 10. RESULTANTLY, THE APPEAL STAND PARTLY ALLOWED IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH NOVEMBER, 2018. SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 14/11/2018 SR.PS:- JAISY VARGHESE ! / COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT 2. %&'$ / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , -%. , . , / DR, ITAT, MUMBAI 6. - /01 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI