Aditya Medisales Limited, Vadodara V. The Deputy Commissioner of Income Tax, Circle-1(1)(1), Vadodara

ITA 1989/AHD/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9129 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 04-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K DEV; AP ARNA AGRAWAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Business expenditure; Earning of tax free income; Commercial expediency; Rule 8D; Set aside
• Section: 14A; 37

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO. 1989/AHD/2017 ( ASSESSMENT YEAR : 2013-14) ADITYA MEDISALES LIMITED 402, 4 TH FLOOR, R. K. CENTER, FATEHGUNJ, VADODARA - 390002 / VS. DEPUTY COMMISSONER OF INCOME TAX CRICLE-1(1)(1), VADODARA - 390007 ./ ./ PAN/GIR NO. : AABCA9317J ( APPELLANT ) .. ( RESPONDENT ) & ./ I.T.A. NO. 2026/AHD/2017 ( ASSESSMENT YEAR : 2013-14) THE ASST. CIT CRICLE-1(1)(1), VADODARA 1 ST FLOOR, AAYKAR BHAVAN, RACE COURSE CIRCLE, VADODARA - 390007 / VS. M/S. ADITYA MEDISALES LIMITED 402, 4 TH FLOOR, R. K. CENTER, FATEHGUNJ MAIN ROAD, FATEHGUNJ, VADODARA - 390002 ( APPELLANT ) .. ( RESPONDENT ) / ASSESSEE BY : SHRI S. N. SOPARKAR, A.R. / REVENUE BY : SMT. APARNA AGRAWAL, CITD.R. & SHRI S. K. DEV, SR.D.R. DATE OF HEARING 04/07/2019 ! / DATE OF PRONOUNCEMENT 09/07/2019 ITA NOS. 1989 & 2026/AHD/17 [ADITYA MEDISALES LTD.] A.Y.2013-14 - 2 - / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED CROSS APPEALS HAVE BEEN FILED BY THE ASSESSEE AS WELL AS BY REVENUE AGAINST THE ORDER OF THE COMMISS IONER OF INCOME TAX (APPEALS)-1, VADODARA (CIT(A) IN SHORT ), DATED 12.06.2017 EMANATING FROM THE ASSESSMENT ORDER DATE D 30.03.2016 PASSED BY THE ASSESSING OFFICER (AO) UNDER S. 143(3 ) OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING ASSESSMENT YEAR 2013-14. 2. THE GRIEVANCES RAISED BEING COMMON, BOTH THE CAS ES WERE HEARD TOGETHER AND DISPOSED OF BY THE COMMON ORDER. 3. WE SHALL FIRST TAKE UP ASSESSEES APPEAL IN ITA NO. 1989/AHD/2017 CONCERNING AY 2013-14. ITA NO. 1989/AHD/2017-AY-2013-14 (ASSESSEES APPEAL ) 4. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE RE AD AS UNDER:- 1. THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) [HEREINAFTER REFERRED TO AS 'THE LD. CIT(A)'] IS BA D IN LAW AND ON FACTS. 2. RE: DISALLOWANCE OF DISCOUNT OFFERED TO DOCTORS - R S. 17,43,519/- 2.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 17,43,519/- MADE BY THE ASSESSING OFFICER BY MERELY RELYING ON THE ORDE R OF ITS PREDECESSOR FOR AY 2012-13 WITHOUT APPRECIATING THAT THE DISCOUNTS WERE OFFERED TO MEDICAL PROFESSIONALS FOR PROMOTING THE APPELLANT'S BUSINES S AND THAT THE EXPENSES WERE WHOLLY AND EXCLUSIVELY INCURRED FOR THE PURPOS ES OF ITS BUSINESS. 2.2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) GROSSLY ERRED IN NOT APPRECIATING THAT THE SAID DIS COUNTS HAVE BEEN GIVEN TO MEDICAL PROFESSIONALS, IN TERMS OF THE APPELLANT'S UNIVERSAL DISCOUNT POLICY, FOR DISPENSING MEDICINES AND ACTING AS PHARMACISTS IN THE COURSE OF THEIR MEDICAL PRACTICE AND THEREFORE CANNOT BE PAINTED AS ILLICIT GRATITUDE PAYMENTS. ITA NOS. 1989 & 2026/AHD/17 [ADITYA MEDISALES LTD.] A.Y.2013-14 - 3 - 2.3 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THAT THE PROVISIONS OF INDIAN MEDICAL COUNCIL (PROFESSIONAL CONDUCT, ETIQUETTE AND ETHICS) REGULA TIONS, 2002, ARE NOT APPLICABLE TO THE PHARMACEUTICAL COMPANIES AND THER EFORE, ANY EXPENDITURE INCURRED ON PROVIDING DISCOUNTS TO DOCTORS OUGHT TO BE ALLOWED AS BUSINESS EXPENDITURE U/S 37(1). 2.4 THE LD. CIT(A) GROSSLY ERRED IN RELYING ON TH E CBDT CIRCULAR NO, 05/2012 DATED 1' AUGUST, 2012 WHILE DISALLOWING THE AMOUNT OF EXPENDITURE WITHOUT APPRECIATING THAT THE CBDT CIRCULARS ARE NOT BINDIN G ON THE APPELLANT. 3. RE: DISALLOWANCE U/S. 14A READ WITH TULE 8D OF RS. 7.24.182/- 3.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFI CER IN DISALLOWING ADMINISTRATIVE EXPENSES U/S 14A BY INVOKING RULE 8D WITHOUT FIRST RECORDING SATISFACTION WITH REGARD TO CORRECTNESS OF CLAIM OF THE APPELLANT AND AS TO HOW THE DISALLOWANCE CARRIED OUT BY THE APPELLANT A MOUNTING TO RS. 50,000/- WAS NOT REASONABLE. 3.2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) OUGHT TO HAVE APPRECIATED MAT ONCE IT IS UNDISPUTED THAT THE APPELLANT HAD SUFFICIENT INTEREST FREE FUNDS TO MAKE THE INVESTME NTS AND THAT THE APPELLANT HAD NOT INCURRED ANY EXPENSE TO EARN EXEMPT INCOME, DISALLOWANCE U/S 14A READ WITH RULE 8D CANNOT BE INVOKED. 3.3 WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT(A) GROSSLY ERRED IN NOT RECTIFYING THE ERRORS IN CALCULATING AMOUNT OF DISA LLOWANCE U/S 14A READ WITH RULE 8D. 4. RE: LEVY OF INTEREST U/S. 234D: 4.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) GROSSLY ERRED IN NOT DIRECTING THE ASSESSING OFFICE R TO RECTIFYING THE ERROR IN COMPUTATIONAL INTEREST U/S.234D. 5. GROUND NO.1 IS GENERAL IN NATURE. 6. GROUND NO.2 CONCERNS DISALLOWANCE OF DISCOUNT OF FERED TO DOCTORS AMOUNTING TO RS.17,43,519/-. 6.1 IDENTICAL ISSUE HAS COME UP IN ASSESSEES OWN C ASE IN 3049/AHD/2014, 2511, 3415, 2512 & 2513/AHD/2015 & O RS. ORDER DATED 29.03.2019CONCERNING AYS. 2008-09 TO 2011-12. THE RELEVANT OPERATIVE PARA CONCERNING AY 2009-10 DEALING WITH I SSUE READS AS UNDER: ITA NOS. 1989 & 2026/AHD/17 [ADITYA MEDISALES LTD.] A.Y.2013-14 - 4 - 11.9 WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMIS SIONS ON THE ISSUE. THE MAINTAINABILITY OF DISCOUNT ON SALES IS IN QUESTION. IT IS THE CASE OF THE REVENUE THAT THE ASSESSEE IS SUPPLY ING MEDICINES TO ITS C&F AGENTS FOR ITS ULTIMATE SALE IN THE MARKET FOR CONSUMPTION. THE DISCOUNTS WERE GIVEN BY THE ASSESSEE COMPANY TO THE DISTRIBUTORS, RETAILERS, DEALERS, DOCTORS ASSOCIATE D TO C&F AGENT AND WHO WERE NOT DIRECTLY DEALING WITH ASSESSEE AND THE REFORE EXPENSES INCURRED TOWARDS DISCOUNT PAYMENT BY THE ASSESSEE H AS NO NEXUS WITH THE SALES MADE BY IT TO THE C&F AGENTS. THE AO ACC ORDINGLY IS OF THE VIEW THAT SUCH INDIRECT DISCOUNTS TO THE CUSTOMERS OF ITS AGENTS ARE NOT ALLOWABLE EXPENDITURE. 11.10 WE DO NOT SEE ANY IOTA OF MERIT IN SUCH PLEA. THE DISCOUNTS GIVEN TO THE CUSTOMERS/ULTIMATE CONSUMER HAS DIRECT BEARING ON THE POTENTIAL TURNOVER OF THE COMPANY. IT IS WELL SETT LED THAT THE TEST OF THE COMMERCIAL EXPEDIENCY CANNOT BE REDUCED TO THE SHAPE OF A RITUALISTIC FORMULA NOR CAN IT BE PUT IN A WATER TI GHT COMPARTMENT. IT IS TRITE THAT THE REVENUE AUTHORITIES HAVE TO PLACE THEMSELVES IN THE POSITION OF A BUSINESS AND FIND OUT WHETHER EXPENSE S INCURRED CAN BE SAID TO HAVE BEEN LAID OUT FOR THE PURPOSES OF BUSI NESSMAN. THE COMMERCIAL EXPEDIENCY AND PRUDENCE ARE INSEPARABLE. IF THE EXPENDITURE IS INCURRED TO FACILITATE CARRYING ON O F BUSINESS OF THE ASSESSEE AND IS SUPPORTED BY THE COMMERCIAL EXPEDIE NCY, IT DOES NOT MATTER THAT THE PAYMENT IS IN VOLUNTARILY OR NOT NE CESSARY OR THAT IT ALSO ENURES TO THE BENEFIT OF A THIRD PARTY. IF TH E OBJECT IS BUSINESS PROMOTION, THE EXPENDITURE CAN BE SAID TO BE WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF THE ASSESSEES BUSINESS. THE A SSESSEE IN THE INSTANT CASE DEMONSTRATED ON FACTS THAT PAYMENT OF SUCH DISCOUNTS ARE INTEGRALLY CONNECTED TO THE SALES/TURN OVER ACH IEVED OR HAS POTENTIAL TO ACHIEVE. THE DISCOUNT EXPENSES HAVE T HUS BEEN INCURRED WITH THE OBJECT OF FURTHERING THE TRADE OR BUSINESS INTEREST OF THE ASSESSEE. THEREFORE, SUCH EXPENSE FALLS WITHIN THE EXPRESSION WHOLLY AND EXCLUSIVELY REFERRED TO IN SECTION 37 OF THE ACT. THEREFORE, WE HAVE NO HESITATION TO CONCUR WITH THE CONCLUSION DRAWN BY THE CIT(A) FOR ALLOWABILITY OF DISCOUNTS G IVEN TO STOCKIESTS/DISTRIBUTORS ETC. HOWEVER, WE ARE UNA BLE TO UNDERSTAND THE REASONING OF THE CIT(A) FOR DISCARDING THE CLAI M OF DISCOUNT EXPENDITURE PAID TO THE DOCTORS. WHEN THE TEST OF COMMERCIAL EXPEDIENCY APPLIED IN ITS NATURAL PERSPECTIVE, THER E IS NO REASON TO EXCLUDE DOCTORS PURCHASING MEDICINES FROM C&F AGENT S FOR THE PURPOSE OF ELIGIBILITY OF DISCOUNT PAYMENTS. WE TH US SET ASIDE THE ACTION OF THE CIT(A) TO THIS EXTENT AND DIRECT THE AO TO ALLOW THE TRADE DISCOUNT PAID TO ALL PARTIES INCLUDING DOCTOR S AS ORDINARY BUSINESS EXPENDITURE. THUS, GROUND NO.2 OF THE REV ENUES APPEAL IS DISMISSED. AS A COROLLARY, GROUND NO.1 OF THE ASSE SSEES APPEAL IN ITA NO. 2511/AHD/2015 STANDS ALLOWED. 6.2. IN THE LIGHT OF THE VIEW TAKEN IN THE EARLIER ASSESSMENT YEARS, THE DISALLOWANCE OF DISCOUNT OFFERED TO DOCTORS IS UNCA LLED FOR. ITA NOS. 1989 & 2026/AHD/17 [ADITYA MEDISALES LTD.] A.Y.2013-14 - 5 - 7. GROUND NO.2 OF THE ASSESSEES APPEAL IS ALLOWED. 8. GROUND NO.3 OF THE ASSESSEES APPEAL CONCERNS DI SALLOWANCE OF ADMINISTRATIVE EXPENDITURE AMOUNTING TO RS.7,24,182 /- CALCULATED IN TERMS OF RULE 8D(2)(III) R.W.S. 14A OF THE ACT. 8.1 WHEN THE MATTER WAS CALLED FOR HEARING, THE LEA RNED SENIOR COUNSEL FOR THE ASSESSEE SOUGHT LIMITED DIRECTION F OR COMPUTATION OF DISALLOWANCE OF ADMINISTRATIVE EXPENSES ONLY WITH R EFERENCE TO INVESTMENTS WHICH HAVE ACTUALLY YIELDED EXEMPT INCO ME IN TUNE WITH ACIT VS. VIREET INVESTMENTS LTD. 165 ITD 27 (SB). 8.2 IDENTICAL ISSUE HAS BEEN DEALT WITH BY THE ITAT IN 3049/AHD/2014 & ORS. CONCERNING AY 2008-09 TO 2011- 12. THE RELEVANT OPERATIVE PARA CONCERNING AY 2010-11 IN PA RA NO. 18.4 OF THE ORDER DEALING WITH THE ISSUE READS AS UNDER: 18.4 TURNING TO THE CROSS GRIEVANCE OF THE ASSESSE E DISALLOWANCE SUSTAINED UNDER S.14A OF THE ACT, WE OBSERVE THAT T HE ASSESSEE SUO MOTU HAS DISALLOWED RS.50,000/- FOR EARNING OF EXEM PT INCOME WHICH IS RIGHTLY RECKONED TO BE DIRECT EXPENDITURE UNDER RULE 8D(2)(I) OF THE RULES IN THE ABSENCE OF ANY SUPPORTING MATERIAL TO THE CONTRARY. THE REVENUE AUTHORITIES, IN OUR VIEW, HAVE ALSO RIG HTLY INVOKED FORMULA UNDER RULE 8D(2)(III) FOR DISALLOWANCE OF M ANAGEMENT AND GENERAL EXPENSES DEEMED TO BE ATTRIBUTABLE TO TAX F REE INCOME. HOWEVER, THE DISALLOWANCE IS REQUIRED TO BE COMPUTE D HAVING REGARD TO THE INVESTMENTS WHICH HAS ACTUALLY YIELDED EXEMP T INCOME INSTEAD OF GROSS INVESTMENTS IN CONSONANCE WITH THE DECISIO N OF THE SPECIAL BENCH IN VIREET INVESTMENTS (SUPRA) AS PLACED ON BE HALF OF THE ASSESSEE. THE ISSUE IS THEREFORE REMITTED BACK TO THE FILE OF THE AO FOR RE-COMPUTATION OF DISALLOWANCE UNDER RULE 8D(2) (III) OF THE RULES. IN TERMS OF THE AVERMENTS MADE ABOVE, THE G ROUND NO.3 OF THE REVENUES APPEAL IS DISMISSED WHEREAS CROSS GROUND NO.2 OF THE ASSESSEES APPEAL ON THIS SCORE IS ALLOWED IN PART. 8.3 IN THE IDENTICAL FACTS, THE ISSUE IN THE INSTAN T ASSESSMENT YEAR IS ALSO REMITTED BACK TO THE FILE OF THE AO FOR RE-COM PUTATION OF DISALLOWANCE UNDER RULE 8D(2)(III) OF THE IT RULES WITH REFERENCE TO ITA NOS. 1989 & 2026/AHD/17 [ADITYA MEDISALES LTD.] A.Y.2013-14 - 6 - THESE INVESTMENTS WHICH HAVE ACTUALLY YIELDED EXEMP T INCOME INSTEAD OF GROSS INVESTMENTS. 9. GROUND NO.3 OF THE ASSESSEES APPEAL IS PARTLY A LLOWED. 10. IN THE RESULT, APPEAL FILED BY ASSESSEE IS PART LY ALLOWED. ITA NO. 2026/AHD/2017-AY-2013-14 (REVENUES APPEAL) 11. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE R EAD AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN ALLOWING THE INTEREST OF RS. 14,98,46,433/- BY T REATING IT AS BUSINESS EXPENDITURE IGNORING THE FACT ON RECORD THAT THE TR ANSACTION BETWEEN ADITYA MEDISALES LTD. & M/S. SUN PHARMACEUTICAL INDUSTRIES LTD. IS NOT A TRANSACTION BETWEEN 2 UNRELATED PARTIES AS THE CONT ROLLING PERSON IN BOTH THE COMPANY IS SAME I.E. MR. DILIP SHANGHVI AS PER THE AUDIT REPORT U/S. 44AB IN FORM 3CD FOR A.Y.2013-14 SUBMITTED BY THE A SSESSEE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN PARTLY ALLOWING THE APPEAL ON DISALLOWANCE U/S 14A OF THE INCOME TAX ACT, 1961, WITHOUT APPRECIATING THE FACT THAT T HE DISALLOWANCE IS RIGHTLY MADE AS PER PROVISIONS OF RULE 8D BY THE AO. 12. GROUND NO.1 OF THE REVENUES APPEAL CONCERNS EL IGIBILITY OF INTEREST EXPENDITURE INCURRED BY THE ASSESSEE AS BU SINESS EXPENDITURE DELAYED PAYMENT OF TRADING LIABILITY. 12.1 THE ISSUE IS NOT LONGER RES INTEGRA CAME UP FOR ADJUDICATION IN 3049/AHD/2014 & ORS. CONCERNING AY 2008-09 TO 2011- 12. THE RELEVANT PARA IN AY 2009-10 IN PARA NO. 10.6 DEALIN G WITH ISSUE IN DISPUTE IS REPRODUCED HEREUNDER: 10.6 IN PARITY WITH THE DECISION OF THE CO-ORDINAT E BENCH, WE ARE IN AGREEMENT WITH THE PLEA OF THE ASSESSEE THAT MERELY BECAUSE THE ASSESSEE COMPANY IS PAYING HUGE INTEREST ON OUTSTAN DING CREDIT BALANCE TO SUN PHARMA WHILE NO INTEREST IS BEING C HARGED BY THE ASSESSEE FROM ITS DEBTORS CANNOT BE THE JUSTIFIABLE REASON FOR RESORTING TO THE DISALLOWANCE OF INTEREST. AS POIN TED OUT ON BEHALF OF ITA NOS. 1989 & 2026/AHD/17 [ADITYA MEDISALES LTD.] A.Y.2013-14 - 7 - THE ASSESSEE, WE ALSO NOTE THAT THE HONBLE GUJARAT HIGH COURT HAS ALSO APPROVED THE ORDER OF THE ITAT CONCERNING AYS 1997-98 IN CIT VS. ADITYA MEDISALES LTD. TAX APPEAL NO. 559 OF 200 9 JUDGMENT DATED 04.05.2010 TOWARDS DELETION OF DISALLOWANCE M ADE ON ACCOUNT OF EXCESS INTEREST PAYMENT UNDER S.40A(2)(A) OF THE ACT. THUS, THE ISSUE STANDS CONCLUDED IN FAVOUR OF THE ASSESSEE BY THE JURISDICTIONAL HIGH COURT. THE ISSUE HAVING BEEN ALREADY EXAMINED IN THE EARLIER YEARS, WE DO NOT SEE ANY REASON TO LOOK AFRESH. TH EREFORE, WE DECLINE TO INTERFERE WITH THE ORDER OF THE CIT(A) I N THIS REGARD. CONSEQUENTLY, GROUND NO.1 OF THE REVENUES APPEAL I S DISMISSED. 12.2 IN PARITY WITH THE VIEW ALREADY TAKEN IN THE I DENTICAL CIRCUMSTANCES, WE FIND NO ERROR IN DECISION RENDERE D BY THE CIT(A). WE THEREFORE DECLINE TO INTERFERE. 13. GROUND NO.1 OF REVNEUES APPEAL IS DISMISSED. 14. GROUND NO.2 OF THE REVENUES APPEAL CONCERNS PA RTIAL REVERSAL OF DISALLOWANCE UNDER S.14A OF THE ACT WITH REFEREN CE TO INTEREST EXPENDITURE DISALLOWED UNDER RULE 8D AMOUNTING TO R S.83,33,086/-. 15. WE FIND NO MERIT IN THE GRIEVANCE OF THE REVENU E IN THE LIGHT OF THE FACT THAT THE CLAIM OF THE ASSESSEE TOWARDS SUF FICIENT INTEREST FREE FUNDS TO CARRY OUT INVESTMENTS IN EXCESS OF THE COR RESPONDING INVESTMENTS NOT BEEN REBUTTED BY THE REVENUE. THE INVESTMENTS HOLDING THE POTENTIAL TO YIELD TAX FREE INCOME STAN DS AT RS.16.42 CRORES WHEREAS THE OWN INTEREST FREE FUNDS BY WAY O F SHARE CAPITAL AND RESERVES STANDS AT RS.116.50 CRORES. THEREFORE, IN SUCH A SCENARIO, NO DISALLOWANCE UNDER RULE 8D(2)(II) IS PERMISSIBLE IN THE LIGHT OF DECISION OF THE HONBLE GUJARAT HIGH COURT IN CASE OF CIT VS. UTI BANK LTD. [2013] 32 TAXMANN.COM 370 (GUJ); CIT VS. HDFC BANK LTD. 366 ITR 505 (BOM.) AND RELIANCE UTILITIES & POWER L TD. [2009] 313 ITR 340 (BOM.). HENCE, WE DECLINE TO INTERFERE WIT H THE DECISION RENDERED BY THE CIT(A) ON THIS SCORE. ITA NOS. 1989 & 2026/AHD/17 [ADITYA MEDISALES LTD.] A.Y.2013-14 - 8 - 16. GROUND NO.2 OF REVENUES APPEAL IS ACCORDINGLY DISMISSED. 17. IN THE RESULT, APPEAL FILED BY REVENUE IS DISMI SSED. 18. IN THE COMBINED RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND REVENUES APPEAL IS DISMISSED. SD/- SD/- (RAJPAL YADAV) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 09/07/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- $. / REVENUE 2. / ASSESSEE &. '() * / CONCERNED CIT 4. *- / CIT (A) -. ./0 122()3 ()!3 45' / DR, ITAT, AHMEDABAD 6. 078 9 / GUARD FILE. BY ORDER / 3 /4 ()!3 45' THIS ORDER PRONOUNCED IN OPEN COURT ON 09/07/2019 , A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO. 1989/AHD/2017 ( ASSESSMENT YEAR : 2013-14) ADITYA MEDISALES LIMITED 402, 4 TH FLOOR, R. K. CENTER, FATEHGUNJ, VADODARA - 390002 / VS. DEPUTY COMMISSONER OF INCOME TAX CRICLE-1(1)(1), VADODARA - 390007 ./ ./ PAN/GIR NO. : AABCA9317J ( APPELLANT ) .. ( RESPONDENT ) & ./ I.T.A. NO. 2026/AHD/2017 ( ASSESSMENT YEAR : 2013-14) THE ASST. CIT CRICLE-1(1)(1), VADODARA 1 ST FLOOR, AAYKAR BHAVAN, RACE COURSE CIRCLE, VADODARA - 390007 / VS. M/S. ADITYA MEDISALES LIMITED 402, 4 TH FLOOR, R. K. CENTER, FATEHGUNJ MAIN ROAD, FATEHGUNJ, VADODARA - 390002 ( APPELLANT ) .. ( RESPONDENT ) / ASSESSEE BY : SHRI S. N. SOPARKAR, A.R. / REVENUE BY : SMT. APARNA AGRAWAL, CITD.R. & SHRI S. K. DEV, SR.D.R. DATE OF HEARING 04/07/2019 ! / DATE OF PRONOUNCEMENT 09/07/2019 ITA NOS. 1989 & 2026/AHD/17 [ADITYA MEDISALES LTD.] A.Y.2013-14 - 2 - / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED CROSS APPEALS HAVE BEEN FILED BY THE ASSESSEE AS WELL AS BY REVENUE AGAINST THE ORDER OF THE COMMISS IONER OF INCOME TAX (APPEALS)-1, VADODARA (CIT(A) IN SHORT ), DATED 12.06.2017 EMANATING FROM THE ASSESSMENT ORDER DATE D 30.03.2016 PASSED BY THE ASSESSING OFFICER (AO) UNDER S. 143(3 ) OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING ASSESSMENT YEAR 2013-14. 2. THE GRIEVANCES RAISED BEING COMMON, BOTH THE CAS ES WERE HEARD TOGETHER AND DISPOSED OF BY THE COMMON ORDER. 3. WE SHALL FIRST TAKE UP ASSESSEES APPEAL IN ITA NO. 1989/AHD/2017 CONCERNING AY 2013-14. ITA NO. 1989/AHD/2017-AY-2013-14 (ASSESSEES APPEAL ) 4. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE RE AD AS UNDER:- 1. THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) [HEREINAFTER REFERRED TO AS 'THE LD. CIT(A)'] IS BA D IN LAW AND ON FACTS. 2. RE: DISALLOWANCE OF DISCOUNT OFFERED TO DOCTORS - R S. 17,43,519/- 2.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 17,43,519/- MADE BY THE ASSESSING OFFICER BY MERELY RELYING ON THE ORDE R OF ITS PREDECESSOR FOR AY 2012-13 WITHOUT APPRECIATING THAT THE DISCOUNTS WERE OFFERED TO MEDICAL PROFESSIONALS FOR PROMOTING THE APPELLANT'S BUSINES S AND THAT THE EXPENSES WERE WHOLLY AND EXCLUSIVELY INCURRED FOR THE PURPOS ES OF ITS BUSINESS. 2.2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) GROSSLY ERRED IN NOT APPRECIATING THAT THE SAID DIS COUNTS HAVE BEEN GIVEN TO MEDICAL PROFESSIONALS, IN TERMS OF THE APPELLANT'S UNIVERSAL DISCOUNT POLICY, FOR DISPENSING MEDICINES AND ACTING AS PHARMACISTS IN THE COURSE OF THEIR MEDICAL PRACTICE AND THEREFORE CANNOT BE PAINTED AS ILLICIT GRATITUDE PAYMENTS. ITA NOS. 1989 & 2026/AHD/17 [ADITYA MEDISALES LTD.] A.Y.2013-14 - 3 - 2.3 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THAT THE PROVISIONS OF INDIAN MEDICAL COUNCIL (PROFESSIONAL CONDUCT, ETIQUETTE AND ETHICS) REGULA TIONS, 2002, ARE NOT APPLICABLE TO THE PHARMACEUTICAL COMPANIES AND THER EFORE, ANY EXPENDITURE INCURRED ON PROVIDING DISCOUNTS TO DOCTORS OUGHT TO BE ALLOWED AS BUSINESS EXPENDITURE U/S 37(1). 2.4 THE LD. CIT(A) GROSSLY ERRED IN RELYING ON TH E CBDT CIRCULAR NO, 05/2012 DATED 1' AUGUST, 2012 WHILE DISALLOWING THE AMOUNT OF EXPENDITURE WITHOUT APPRECIATING THAT THE CBDT CIRCULARS ARE NOT BINDIN G ON THE APPELLANT. 3. RE: DISALLOWANCE U/S. 14A READ WITH TULE 8D OF RS. 7.24.182/- 3.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFI CER IN DISALLOWING ADMINISTRATIVE EXPENSES U/S 14A BY INVOKING RULE 8D WITHOUT FIRST RECORDING SATISFACTION WITH REGARD TO CORRECTNESS OF CLAIM OF THE APPELLANT AND AS TO HOW THE DISALLOWANCE CARRIED OUT BY THE APPELLANT A MOUNTING TO RS. 50,000/- WAS NOT REASONABLE. 3.2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) OUGHT TO HAVE APPRECIATED MAT ONCE IT IS UNDISPUTED THAT THE APPELLANT HAD SUFFICIENT INTEREST FREE FUNDS TO MAKE THE INVESTME NTS AND THAT THE APPELLANT HAD NOT INCURRED ANY EXPENSE TO EARN EXEMPT INCOME, DISALLOWANCE U/S 14A READ WITH RULE 8D CANNOT BE INVOKED. 3.3 WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT(A) GROSSLY ERRED IN NOT RECTIFYING THE ERRORS IN CALCULATING AMOUNT OF DISA LLOWANCE U/S 14A READ WITH RULE 8D. 4. RE: LEVY OF INTEREST U/S. 234D: 4.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) GROSSLY ERRED IN NOT DIRECTING THE ASSESSING OFFICE R TO RECTIFYING THE ERROR IN COMPUTATIONAL INTEREST U/S.234D. 5. GROUND NO.1 IS GENERAL IN NATURE. 6. GROUND NO.2 CONCERNS DISALLOWANCE OF DISCOUNT OF FERED TO DOCTORS AMOUNTING TO RS.17,43,519/-. 6.1 IDENTICAL ISSUE HAS COME UP IN ASSESSEES OWN C ASE IN 3049/AHD/2014, 2511, 3415, 2512 & 2513/AHD/2015 & O RS. ORDER DATED 29.03.2019CONCERNING AYS. 2008-09 TO 2011-12. THE RELEVANT OPERATIVE PARA CONCERNING AY 2009-10 DEALING WITH I SSUE READS AS UNDER: ITA NOS. 1989 & 2026/AHD/17 [ADITYA MEDISALES LTD.] A.Y.2013-14 - 4 - 11.9 WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMIS SIONS ON THE ISSUE. THE MAINTAINABILITY OF DISCOUNT ON SALES IS IN QUESTION. IT IS THE CASE OF THE REVENUE THAT THE ASSESSEE IS SUPPLY ING MEDICINES TO ITS C&F AGENTS FOR ITS ULTIMATE SALE IN THE MARKET FOR CONSUMPTION. THE DISCOUNTS WERE GIVEN BY THE ASSESSEE COMPANY TO THE DISTRIBUTORS, RETAILERS, DEALERS, DOCTORS ASSOCIATE D TO C&F AGENT AND WHO WERE NOT DIRECTLY DEALING WITH ASSESSEE AND THE REFORE EXPENSES INCURRED TOWARDS DISCOUNT PAYMENT BY THE ASSESSEE H AS NO NEXUS WITH THE SALES MADE BY IT TO THE C&F AGENTS. THE AO ACC ORDINGLY IS OF THE VIEW THAT SUCH INDIRECT DISCOUNTS TO THE CUSTOMERS OF ITS AGENTS ARE NOT ALLOWABLE EXPENDITURE. 11.10 WE DO NOT SEE ANY IOTA OF MERIT IN SUCH PLEA. THE DISCOUNTS GIVEN TO THE CUSTOMERS/ULTIMATE CONSUMER HAS DIRECT BEARING ON THE POTENTIAL TURNOVER OF THE COMPANY. IT IS WELL SETT LED THAT THE TEST OF THE COMMERCIAL EXPEDIENCY CANNOT BE REDUCED TO THE SHAPE OF A RITUALISTIC FORMULA NOR CAN IT BE PUT IN A WATER TI GHT COMPARTMENT. IT IS TRITE THAT THE REVENUE AUTHORITIES HAVE TO PLACE THEMSELVES IN THE POSITION OF A BUSINESS AND FIND OUT WHETHER EXPENSE S INCURRED CAN BE SAID TO HAVE BEEN LAID OUT FOR THE PURPOSES OF BUSI NESSMAN. THE COMMERCIAL EXPEDIENCY AND PRUDENCE ARE INSEPARABLE. IF THE EXPENDITURE IS INCURRED TO FACILITATE CARRYING ON O F BUSINESS OF THE ASSESSEE AND IS SUPPORTED BY THE COMMERCIAL EXPEDIE NCY, IT DOES NOT MATTER THAT THE PAYMENT IS IN VOLUNTARILY OR NOT NE CESSARY OR THAT IT ALSO ENURES TO THE BENEFIT OF A THIRD PARTY. IF TH E OBJECT IS BUSINESS PROMOTION, THE EXPENDITURE CAN BE SAID TO BE WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF THE ASSESSEES BUSINESS. THE A SSESSEE IN THE INSTANT CASE DEMONSTRATED ON FACTS THAT PAYMENT OF SUCH DISCOUNTS ARE INTEGRALLY CONNECTED TO THE SALES/TURN OVER ACH IEVED OR HAS POTENTIAL TO ACHIEVE. THE DISCOUNT EXPENSES HAVE T HUS BEEN INCURRED WITH THE OBJECT OF FURTHERING THE TRADE OR BUSINESS INTEREST OF THE ASSESSEE. THEREFORE, SUCH EXPENSE FALLS WITHIN THE EXPRESSION WHOLLY AND EXCLUSIVELY REFERRED TO IN SECTION 37 OF THE ACT. THEREFORE, WE HAVE NO HESITATION TO CONCUR WITH THE CONCLUSION DRAWN BY THE CIT(A) FOR ALLOWABILITY OF DISCOUNTS G IVEN TO STOCKIESTS/DISTRIBUTORS ETC. HOWEVER, WE ARE UNA BLE TO UNDERSTAND THE REASONING OF THE CIT(A) FOR DISCARDING THE CLAI M OF DISCOUNT EXPENDITURE PAID TO THE DOCTORS. WHEN THE TEST OF COMMERCIAL EXPEDIENCY APPLIED IN ITS NATURAL PERSPECTIVE, THER E IS NO REASON TO EXCLUDE DOCTORS PURCHASING MEDICINES FROM C&F AGENT S FOR THE PURPOSE OF ELIGIBILITY OF DISCOUNT PAYMENTS. WE TH US SET ASIDE THE ACTION OF THE CIT(A) TO THIS EXTENT AND DIRECT THE AO TO ALLOW THE TRADE DISCOUNT PAID TO ALL PARTIES INCLUDING DOCTOR S AS ORDINARY BUSINESS EXPENDITURE. THUS, GROUND NO.2 OF THE REV ENUES APPEAL IS DISMISSED. AS A COROLLARY, GROUND NO.1 OF THE ASSE SSEES APPEAL IN ITA NO. 2511/AHD/2015 STANDS ALLOWED. 6.2. IN THE LIGHT OF THE VIEW TAKEN IN THE EARLIER ASSESSMENT YEARS, THE DISALLOWANCE OF DISCOUNT OFFERED TO DOCTORS IS UNCA LLED FOR. ITA NOS. 1989 & 2026/AHD/17 [ADITYA MEDISALES LTD.] A.Y.2013-14 - 5 - 7. GROUND NO.2 OF THE ASSESSEES APPEAL IS ALLOWED. 8. GROUND NO.3 OF THE ASSESSEES APPEAL CONCERNS DI SALLOWANCE OF ADMINISTRATIVE EXPENDITURE AMOUNTING TO RS.7,24,182 /- CALCULATED IN TERMS OF RULE 8D(2)(III) R.W.S. 14A OF THE ACT. 8.1 WHEN THE MATTER WAS CALLED FOR HEARING, THE LEA RNED SENIOR COUNSEL FOR THE ASSESSEE SOUGHT LIMITED DIRECTION F OR COMPUTATION OF DISALLOWANCE OF ADMINISTRATIVE EXPENSES ONLY WITH R EFERENCE TO INVESTMENTS WHICH HAVE ACTUALLY YIELDED EXEMPT INCO ME IN TUNE WITH ACIT VS. VIREET INVESTMENTS LTD. 165 ITD 27 (SB). 8.2 IDENTICAL ISSUE HAS BEEN DEALT WITH BY THE ITAT IN 3049/AHD/2014 & ORS. CONCERNING AY 2008-09 TO 2011- 12. THE RELEVANT OPERATIVE PARA CONCERNING AY 2010-11 IN PA RA NO. 18.4 OF THE ORDER DEALING WITH THE ISSUE READS AS UNDER: 18.4 TURNING TO THE CROSS GRIEVANCE OF THE ASSESSE E DISALLOWANCE SUSTAINED UNDER S.14A OF THE ACT, WE OBSERVE THAT T HE ASSESSEE SUO MOTU HAS DISALLOWED RS.50,000/- FOR EARNING OF EXEM PT INCOME WHICH IS RIGHTLY RECKONED TO BE DIRECT EXPENDITURE UNDER RULE 8D(2)(I) OF THE RULES IN THE ABSENCE OF ANY SUPPORTING MATERIAL TO THE CONTRARY. THE REVENUE AUTHORITIES, IN OUR VIEW, HAVE ALSO RIG HTLY INVOKED FORMULA UNDER RULE 8D(2)(III) FOR DISALLOWANCE OF M ANAGEMENT AND GENERAL EXPENSES DEEMED TO BE ATTRIBUTABLE TO TAX F REE INCOME. HOWEVER, THE DISALLOWANCE IS REQUIRED TO BE COMPUTE D HAVING REGARD TO THE INVESTMENTS WHICH HAS ACTUALLY YIELDED EXEMP T INCOME INSTEAD OF GROSS INVESTMENTS IN CONSONANCE WITH THE DECISIO N OF THE SPECIAL BENCH IN VIREET INVESTMENTS (SUPRA) AS PLACED ON BE HALF OF THE ASSESSEE. THE ISSUE IS THEREFORE REMITTED BACK TO THE FILE OF THE AO FOR RE-COMPUTATION OF DISALLOWANCE UNDER RULE 8D(2) (III) OF THE RULES. IN TERMS OF THE AVERMENTS MADE ABOVE, THE G ROUND NO.3 OF THE REVENUES APPEAL IS DISMISSED WHEREAS CROSS GROUND NO.2 OF THE ASSESSEES APPEAL ON THIS SCORE IS ALLOWED IN PART. 8.3 IN THE IDENTICAL FACTS, THE ISSUE IN THE INSTAN T ASSESSMENT YEAR IS ALSO REMITTED BACK TO THE FILE OF THE AO FOR RE-COM PUTATION OF DISALLOWANCE UNDER RULE 8D(2)(III) OF THE IT RULES WITH REFERENCE TO ITA NOS. 1989 & 2026/AHD/17 [ADITYA MEDISALES LTD.] A.Y.2013-14 - 6 - THESE INVESTMENTS WHICH HAVE ACTUALLY YIELDED EXEMP T INCOME INSTEAD OF GROSS INVESTMENTS. 9. GROUND NO.3 OF THE ASSESSEES APPEAL IS PARTLY A LLOWED. 10. IN THE RESULT, APPEAL FILED BY ASSESSEE IS PART LY ALLOWED. ITA NO. 2026/AHD/2017-AY-2013-14 (REVENUES APPEAL) 11. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE R EAD AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN ALLOWING THE INTEREST OF RS. 14,98,46,433/- BY T REATING IT AS BUSINESS EXPENDITURE IGNORING THE FACT ON RECORD THAT THE TR ANSACTION BETWEEN ADITYA MEDISALES LTD. & M/S. SUN PHARMACEUTICAL INDUSTRIES LTD. IS NOT A TRANSACTION BETWEEN 2 UNRELATED PARTIES AS THE CONT ROLLING PERSON IN BOTH THE COMPANY IS SAME I.E. MR. DILIP SHANGHVI AS PER THE AUDIT REPORT U/S. 44AB IN FORM 3CD FOR A.Y.2013-14 SUBMITTED BY THE A SSESSEE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN PARTLY ALLOWING THE APPEAL ON DISALLOWANCE U/S 14A OF THE INCOME TAX ACT, 1961, WITHOUT APPRECIATING THE FACT THAT T HE DISALLOWANCE IS RIGHTLY MADE AS PER PROVISIONS OF RULE 8D BY THE AO. 12. GROUND NO.1 OF THE REVENUES APPEAL CONCERNS EL IGIBILITY OF INTEREST EXPENDITURE INCURRED BY THE ASSESSEE AS BU SINESS EXPENDITURE DELAYED PAYMENT OF TRADING LIABILITY. 12.1 THE ISSUE IS NOT LONGER RES INTEGRA CAME UP FOR ADJUDICATION IN 3049/AHD/2014 & ORS. CONCERNING AY 2008-09 TO 2011- 12. THE RELEVANT PARA IN AY 2009-10 IN PARA NO. 10.6 DEALIN G WITH ISSUE IN DISPUTE IS REPRODUCED HEREUNDER: 10.6 IN PARITY WITH THE DECISION OF THE CO-ORDINAT E BENCH, WE ARE IN AGREEMENT WITH THE PLEA OF THE ASSESSEE THAT MERELY BECAUSE THE ASSESSEE COMPANY IS PAYING HUGE INTEREST ON OUTSTAN DING CREDIT BALANCE TO SUN PHARMA WHILE NO INTEREST IS BEING C HARGED BY THE ASSESSEE FROM ITS DEBTORS CANNOT BE THE JUSTIFIABLE REASON FOR RESORTING TO THE DISALLOWANCE OF INTEREST. AS POIN TED OUT ON BEHALF OF ITA NOS. 1989 & 2026/AHD/17 [ADITYA MEDISALES LTD.] A.Y.2013-14 - 7 - THE ASSESSEE, WE ALSO NOTE THAT THE HONBLE GUJARAT HIGH COURT HAS ALSO APPROVED THE ORDER OF THE ITAT CONCERNING AYS 1997-98 IN CIT VS. ADITYA MEDISALES LTD. TAX APPEAL NO. 559 OF 200 9 JUDGMENT DATED 04.05.2010 TOWARDS DELETION OF DISALLOWANCE M ADE ON ACCOUNT OF EXCESS INTEREST PAYMENT UNDER S.40A(2)(A) OF THE ACT. THUS, THE ISSUE STANDS CONCLUDED IN FAVOUR OF THE ASSESSEE BY THE JURISDICTIONAL HIGH COURT. THE ISSUE HAVING BEEN ALREADY EXAMINED IN THE EARLIER YEARS, WE DO NOT SEE ANY REASON TO LOOK AFRESH. TH EREFORE, WE DECLINE TO INTERFERE WITH THE ORDER OF THE CIT(A) I N THIS REGARD. CONSEQUENTLY, GROUND NO.1 OF THE REVENUES APPEAL I S DISMISSED. 12.2 IN PARITY WITH THE VIEW ALREADY TAKEN IN THE I DENTICAL CIRCUMSTANCES, WE FIND NO ERROR IN DECISION RENDERE D BY THE CIT(A). WE THEREFORE DECLINE TO INTERFERE. 13. GROUND NO.1 OF REVNEUES APPEAL IS DISMISSED. 14. GROUND NO.2 OF THE REVENUES APPEAL CONCERNS PA RTIAL REVERSAL OF DISALLOWANCE UNDER S.14A OF THE ACT WITH REFEREN CE TO INTEREST EXPENDITURE DISALLOWED UNDER RULE 8D AMOUNTING TO R S.83,33,086/-. 15. WE FIND NO MERIT IN THE GRIEVANCE OF THE REVENU E IN THE LIGHT OF THE FACT THAT THE CLAIM OF THE ASSESSEE TOWARDS SUF FICIENT INTEREST FREE FUNDS TO CARRY OUT INVESTMENTS IN EXCESS OF THE COR RESPONDING INVESTMENTS NOT BEEN REBUTTED BY THE REVENUE. THE INVESTMENTS HOLDING THE POTENTIAL TO YIELD TAX FREE INCOME STAN DS AT RS.16.42 CRORES WHEREAS THE OWN INTEREST FREE FUNDS BY WAY O F SHARE CAPITAL AND RESERVES STANDS AT RS.116.50 CRORES. THEREFORE, IN SUCH A SCENARIO, NO DISALLOWANCE UNDER RULE 8D(2)(II) IS PERMISSIBLE IN THE LIGHT OF DECISION OF THE HONBLE GUJARAT HIGH COURT IN CASE OF CIT VS. UTI BANK LTD. [2013] 32 TAXMANN.COM 370 (GUJ); CIT VS. HDFC BANK LTD. 366 ITR 505 (BOM.) AND RELIANCE UTILITIES & POWER L TD. [2009] 313 ITR 340 (BOM.). HENCE, WE DECLINE TO INTERFERE WIT H THE DECISION RENDERED BY THE CIT(A) ON THIS SCORE. ITA NOS. 1989 & 2026/AHD/17 [ADITYA MEDISALES LTD.] A.Y.2013-14 - 8 - 16. GROUND NO.2 OF REVENUES APPEAL IS ACCORDINGLY DISMISSED. 17. IN THE RESULT, APPEAL FILED BY REVENUE IS DISMI SSED. 18. IN THE COMBINED RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND REVENUES APPEAL IS DISMISSED. SD/- SD/- (RAJPAL YADAV) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 09/07/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- $. / REVENUE 2. / ASSESSEE &. '() * / CONCERNED CIT 4. *- / CIT (A) -. ./0 122()3 ()!3 45' / DR, ITAT, AHMEDABAD 6. 078 9 / GUARD FILE. BY ORDER / 3 /4 ()!3 45' THIS ORDER PRONOUNCED IN OPEN COURT ON 09/07/2019