VFC INDUSTRIES P. LTD, MUMBAI V. ACIT 2(3), MUMBAI

ITA 2088/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75506 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 20-11-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 14-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJESH RANJAN PRASAD
• Assessee Lawyers: FAROOK IRANI
• Keywords: Opportunity of being heard; Revenue expenditure; Capital expenditure
• Section: 133(6)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F B ENCH, MUMBAI , , !' #$% , !& ! ' BEFORE SHRI VIJAY PAL RAO , JM AND SHRI N.K. BIL LAIYA, AM . I.T.A. NOS.2088 /MUM/2011 & 3371/MUM/2012 ( ( ( ( ( / ASSESSMENT YEARS : 2006-07 & 2008-09 M/S. VFC INDUSTRIES PVT. LTD., ROHIT CHAMBERS, 2 ND FLOOR, JANMABHOOMI MARG, FORT, MUMBAI-400 001 / VS. THE ACIT 2(3), AAYAKAR BHAVAN, MUMBAI ) !& ./ * ./ PAN/GIR NO. : ( )+ / APPELLANT ) .. ( ,-)+ / RESPONDENT ) )+ . ! / APPELLANT BY: SHRI FAROOK IRANI ,-)+ / . ! / RESPONDENT BY: SHRI RAJESH RANJAN PRASAD / 01& / DATE OF HEARING : 28.01.2014 23( / 01& / DATE OF PRONOUNCEMENT: 05.02.2014 !4 / O R D E R PER N.K. BILLAIYA, AM: THESE APPEALS BY THE ASSESSEE ARE PREFERRED AGAINS T THE ORDER OF THE LD. CIT(A)-6, MUMBAI PERTAINING TO A.YRS. 2006-07 AND 2008-09. AS BOTH THESE APPEALS INVOLVED COMMON ISSUES, THEY WER E HEARD TOGETHER AND DISPOSE OF BY THIS COMMON ORDER FOR THE SAKE OF CON VENIENCE AND BREVITY. ITA NO. 2088/MUM/2011- A.Y. 2006-07 M/S. VFC INDUSTRIES PVT. LTD. 2 2. THE ASSESSEE HAS RAISED 5 SUBSTANTIVE GROUNDS OF APPEAL. GROUND NO. 1 RELATES TO THE RESTRICTION THE CLAIM FOR LOS S ON ACCOUNT OF FIRE ON CURRENT ASSETS TO RS. 4,07,96,231/- AS AGAINST THE CLAIM OF LOSS OF RS. 11,27,24,620/-. 3. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PRO CEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS CLA IMED LOSS BY FIRE ON ACCOUNT OF CURRENT ASSETS AT RS. 11,27,24,620/-. T HE ASSESSEE WAS ASKED TO SUBSTANTIVE THE ALLOWABILITY OF THE CLAIM OF LOS S. THE ASSESSEE SUBMITTED THAT IT HAS GENUINELY INCURRED THE LOSS D UE TO FIRE AT ITS BUSINESS PREMISES AND IS THEREFORE ENTITLED FOR CLAIM OF LOS S. THE ASSESSING OFFICER SERVED NOTICE U/S. 133(6) ON THE NEW INDIA ASSURANCE CO. LTD. FOR ASCERTAINING THE CORRECT FACTS OF THE CASE. I N RESPONSE TO WHICH THE INSURANCE COMPANY SUBMITTED COPY OF SURVEY REPORT. ON PERUSING THE REPORT OF THE SURVEYOR, THE AO OBSERVED THAT PAYMEN T OF RS. 7,34,28,811/- WAS MADE ON ACCOUNT OF BUILDING AND PLANT AND MACHINERY LOSS IN APRIL, 2006. THE AO FURTHER OBSERVED THAT THE FINALLY SETTLED CLAIM OF THE ASSESSEE RS. 16.83 CRORES WAS INCLUSIV E OF RS. 4,07,96,231/- WHICH WAS ON ACCOUNT OF STOCK. AFTER CONSIDERING A LL THESE FACTS, THE AO FINALLY CAME TO THE CONCLUSION THAT THE LOSS CLAIME D BY THE ASSESSEE ON ACCOUNT OF CURRENT ASSETS AMOUNTING TO RS. 11,27,24 ,620/- IS CONTINGENT IN NATURE AND COULD NOT BE ALLOWED FOR THE YEAR UN DER CONSIDERATION AND ACCORDINGLY ADDED BACK THE SAME. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) AND STRONGLY CONTENDED THAT THE CLAIM OF LOSS OF STOCK ON ACCOUN T OF FIRE WAS NOT AT ALL PREMATURE DURING THE YEAR SINCE THE FIRE HAS OCCURR ED DURING THE IMPUGNED ASSESSMENT YEAR, THE LOSS OF STOCK HAS TO BE ALLOWED DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE CLAIMED THAT THE LOSS OF THE M/S. VFC INDUSTRIES PVT. LTD. 3 ASSESSEE HAD BEEN ACTUALLY SUFFERED IN THE YEAR UND ER CONSIDERATION AND THE INSURANCE CLAIM WHICH WAS NOT QUANTIFIED UNTIL THE END OF THE PREVIOUS YEAR HAD TO BE ACCOUNTED ONLY IN THE YEAR THE SAME WAS SETTLED BY THE INSURANCE COMPANY. 4.1. AFTER CONSIDERING THE FACTS AND THE SUBMISSION S OF THE ASSESSEE, THE LD. CIT(A) WAS CONVINCED THAT THE FIRE TOOK PLACE O N 7.12.2005 WHICH WAS IN THE IMPUGNED ASSESSMENT YEAR, HENCE, THE ASS ESSEE WAS PERFECTLY JUSTIFIED IN CLAIMING THE SAID LOSS DURING THE YEAR . HOWEVER, THE LD. CIT(A) QUESTIONED THE QUANTIFICATION OF THE SAID LO SS. ACCORDING TO THE LD. CIT(A), ONLY LOSS OF RS. 4,07,96,231/- COULD BE ALLOWED TO THE ASSESSEE DURING THE YEAR ON ACCOUNT OF LOSS OF STOC K AND ACCORDINGLY DIRECTED THE AO TO ALLOW THE LOSS OF RS. 4,07,96,23 1/- AS AGAINST THE CLAIM OF RS. 11,27,24,620/-. 5. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. T HE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO SCHEDULE-II TO T HE PROFIT AND LOSS ACCOUNT WHICH IS PLACED AT PAGE-24 OF THE PAPER BOO K AND POINTED OUT THE ITEMS OF INVENTORIES. THE LD. COUNSEL ALSO DRE W OUR ATTENTION TO PAGE-19 OF THE PAPER BOOK AND POINTED OUT HOW THE L OSS HAS BEEN DEALT IN THE BOOKS OF ACCOUNT UNDER THE HEAD CURRENT ASS ETS LOANS AND ADVANCES. IT IS THE SAY OF THE LD. COUNSEL THAT T HESE BOOK FIGURES HAVE NOT BEEN DOUBTED BY THE REVENUE AUTHORITIES. THE R EVENUE AUTHORITIES HAVE BEEN CARRIED AWAY BY THE SURVEYORS REPORT. IT IS THE SAY OF THE LD. COUNSEL THAT THE ASSESSEE IS CLAIMING THE LOSS ON A CCOUNT OF FIRE IN RESPECT OF ITS BOOK FIGURES AND THEREFORE IT CANNOT BE SAID TO BE A CONTINGENT IN NATURE AS OBSERVED BY THE AO AND ALSO IT CANNOT BE RESTRICTED TO THE AMOUNT OF INSURANCE CLAIM WHICH W AS RECEIVED IN M/S. VFC INDUSTRIES PVT. LTD. 4 SUBSEQUENT YEAR. THE LD. COUNSEL SUBMITTED THAT TH E LOSS AS CLAIMED BY THE ASSESSEE DESERVES TO BE ALLOWED. 6. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE FINDINGS OF THE LOWER AUTHORITIES. 7. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE LOWE R AUTHORITIES AND THE RELEVANT MATERIAL EVIDENCE BROUGHT ON RECORD IN THE FORM OF PAPER BOOK. WE HAVE ALSO CAREFULLY PERUSED THE SURVEYORS REPORT. THE LOSS ON ACCOUNT OF FIRE HAS NOT AT ALL BEEN DISPUTED BY THE REVENUE AUTHORITIES. THE BOOK FIGURES AND THE TREATMENT OF THE LOSS OF I NVENTORIES IN THE BOOKS OF ACCOUNT HAVE ALSO NOT BEEN QUESTIONED BY THE REV ENUE AUTHORITIES. A PERUSAL OF SCHEDULE-VII OF BALANCE SHEET CLEARLY SH OWS HOW THE STOCK LOSS IN FIRE HAVE BEEN ADJUSTED UNDER THE HEAD CUR RENT ASSETS LOANS AND ADVANCES. THIS HAS ALSO NOT BEEN DISPUTED BY THE R EVENUE AUTHORITIES. SINCE THE FIRE HAS TAKEN PLACE IN THE IMPUGNED YEAR ANY LOSS INCURRED BY THE ASSESSEE ON ACCOUNT OF THE SAID FIRE HAS TO BE ALLOWED IN THE IMPUGNED YEAR. IN OUR HUMBLE OPINION, THE INSURANC E CLAIM IS NOT RELEVANT FOR THE YEAR UNDER CONSIDERATION BECAUSE A S AND WHEN THE ASSESSEE RECEIVE INSURANCE CLAIM, THE SAME WILL BE DEALT AS PER PROVISIONS OF LAW. THEREFORE, IN OUR CONSIDERED VIEW, THE LOS S AS PER BOOKS CLAIMED BY THE ASSESSEE AMOUNTING TO RS. 11,27,24,620/- HAS TO BE ALLOWED DURING THE YEAR UNDER CONSIDERATION. WE, ACCORDING LY, DIRECT THE AO. TO THIS EXTENT, FINDINGS OF THE LD. CIT(A) IS MODIFIED . GROUND NO. 1 IS ACCORDINGLY ALLOWED. 8. GROUND NO. 2 RELATES TO THE DISALLOWANCE OF PRIO R PERIOD EXPENSES OF RS. 51,19,046/- WHICH COMPRISES OF REBATES AND DISCOUNTS. M/S. VFC INDUSTRIES PVT. LTD. 5 9. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, ON PERUSAL OF PROFIT AND LOSS ACCOUNT, THE AO OBSERVED THAT UNDER THE HEAD OTHER EXPENSES, THE ASSESSEE HAS CLAIMED REBATES AND DISC OUNTS ALLOWED ON SALE OF EARLIER YEARS AT RS. 51,19,046/-. THE ASSESSEE WAS ASKED TO JUSTIFY ITS CLAIM. AS NO EXPLANATION CAME FORWARD FROM THE ASS ESSEE, THE AO WAS OF THE OPINION THAT THESE EXPENSES RELATE TO PREVIO US YEARS INCOME AND SINCE THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING, THE AO DISALLOWED RS. 51,19,046/-. 10. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. 11. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE DRE W OUR ATTENTION TO PAGE-87 OF THE PAPER BOOK AND SUBMITTED THAT THIS C ONTAINS THE DETAILS OF DISCOUNTS GIVEN DURING THE IMPUGNED YEAR. IT IS TH E SAY OF THE LD. COUNSEL THAT SINCE THE ASSESSEE HAS SUFFERED HUGE L OSS ON ACCOUNT OF FIRE, IT ASKED ITS DEBTORS TO MAKE THE PAYMENT DUE TO THE ASSESSEE AND AVAIL DISCOUNT ON IMMEDIATE PAYMENT. SINCE THE LIABILITY HAS CRYSTALLIZED DURING THE YEAR UNDER CONSIDERATION, THE SAME REFER ENCE TO BE ALLOWED. 12. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE FINDINGS OF THE LOWER AUTHORITIES. 13. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE LOW ER AUTHORITIES AND THE RELEVANT MATERIAL EVIDENCE REFERRED TO. A PER USAL OF THE DETAILS OF DISCOUNT AS EXHIBITED AT PAGE-87 OF THE PAPER BOOK SHOWS THAT 13 PARTIES ABOUT 16 CRORES TO THE ASSESSEE WHICH PERTAIN TO TH E SALES MADE DURING THE YEAR 2002-03, 2003-04, 2004-05 AND 2005-06 . HA VING SUFFERED LOSSES DUE TO FIRE , THE ASSESSEE DECIDED TO GIVE REBATES/DISCOUNTS ON PROMPT PAYMENTS DURING THE YEAR UNDER CONSIDERATION . ON THIS, THE M/S. VFC INDUSTRIES PVT. LTD. 6 ASSESSEE HAS DEBITED PROFIT AND LOSS ACCOUNT AT RS. 51.19 LAKHS. IN OUR HUMBLE OPINION, SINCE THE LIABILITY HAS CRYSTALLIZE D DURING THE YEAR UNDER CONSIDERATION, THE SAME HAS TO BE ALLOWED AS REVENU E EXPENDITURE. THE AO IS ACCORDINGLY DIRECTED TO ALLOW THE CLAIM OF DI SCOUNT AND REBATES TO THE TUNE OF RS. 51,19,046/-. THIS GROUND OF THE AS SESSEE IS ALLOWED. 14. GROUND NO. 3 RELATES TO THE DISALLOWANCE OF RS. 2,59,186/- ON ACCOUNT OF BEING PRIOR PERIOD EXPENSES. 15. A PERUSAL OF THE ASSESSMENT ORDER AND THE ORDER OF THE LD. CIT(A) VIS--VIS THE STATEMENT OF FACTS APPENDED WITH FORM NO. 35 BEFORE THE LD. CIT(A) SHOWS THAT THERE IS FACTUAL ERROR WHICH HAS RESULTED INTO THIS ADDITION OF RS. 2,59,186/- WHICH HAS BEEN CONFIRMED BY THE LD. CIT(A). THE FACT IS THAT DURING THE IMPUGNED YEAR UNDER THE HEAD PRIOR PERIOD INCOME, THE ASSESSEE HAS SHOWN INCOME AT RS. 1,54,3 86/- AS CESSATION OF LIABILITY U/S. 41(2) OF THE ACT. AGAINST THIS INCO ME, THE ASSESSEE HAS CLAIMED PRIOR PERIOD EXPENSES AMOUNTING TO RS. 1,04 ,800/-. IT APPEARS THAT THE REVENUE AUTHORITIES HAVE CLUBBED THESE TW O AMOUNTS AND DISALLOWED PRIOR PERIOD EXPENSES AT RS. 2,59,186/-. THE CORRECT APPROACH SHOULD HAVE BEEN .. PRIOR PERIOD INCOME RS. 1,54,386/- LESS: PRIOR PERIOD EXPENSES RS. 1,04,800/- NET INCOME TO BE TAXED RS. 49,586/- SINCE THESE ARE FACTUAL ERRORS, WE REMIT THIS MATT ER BACK TO THE FILES OF THE AO TO DECIDE THIS ISSUE AFRESH CONSIDERING T HE CORRECT FACTS POINTED OUT HEREINABOVE. GROUND NO. 3 IS ALLOWED FOR STATI STICAL PURPOSES. M/S. VFC INDUSTRIES PVT. LTD. 7 16. GROUND NO. 4 RELATES TO THE DISALLOWANCE OF DI SCOUNTING CHARGES AMOUNTING TO RS. 21,20,187/- ON THE GROUND THAT NO TDS HAS BEEN MADE. 17. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PR OCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAS PAID RS. 21,20,197/- TOWARDS THE BILL DISCOUNTING CHARGES TO MRS. NEETA R PATEL, MS. RENU KA R. PATEL, M/S. PRANAV TRADING CO., M/S. VIJAY FIRMS, R.J. PATEL, G ANGOTRI TRADING CO. PVT. LTD AND RISHIKESH AGENCY PVT. LTD. THE ASSESS EE WAS ASKED TO JUSTIFY WHY THE DISCOUNT CHARGES BE NOT TREATED AS INTEREST WITHIN THE MEANING OF SEC. 2(28A). ON RECEIVING NO SATISFACT ORY REPLY, THE AO DISALLOWED THE CLAIM OF DISCOUNTING CHARGES U/S. 40 (A)(IA) OF THE ACT. 18. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) AND STRONGLY CONTENDED THAT THE BILL DISCOUNTING CHARGES COULD N OT BE TERMED AS INTEREST. THE ASSESSEE RELIED UPON THE CBDT CIRCUL AR NO. 65 DT. 2.9.1971. THE LD. CIT(A) WAS NOT CONVINCED WITH TH E SUBMISSION OF THE ASSESSEE AND CONFIRMED THE DISALLOWANCE. 19. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE RE ITERATED WHAT HAS BEEN SUBMITTED BEFORE THE LOWER AUTHORITIES. 20. THE LD. DR RELIED UPON THE FINDINGS OF THE LOWE R AUTHORITIES. 21. THE ENTIRE ISSUE REVOLVES AROUND WHETHER THE BI LL DISCOUNTING CHARGES CAN BE TERMED AS INTEREST U/S. 2(28A) OF TH E ACT. IN OUR UNDERSTANDING OF LAW, DISCOUNTING CHARGES ON BILLS OF EXCHANGE ARE NOT IN RESPECT OF MONIES BORROWED OR DEBT INCURRED THEREFO RE CANNOT BE TERMED AS INTEREST U/S.2(28A) OF THE ACT. HAD IT BEEN THE INTENTION OF THE LEGISLATURE IT WOULD HAVE SPECIFICALLY INCLUDED DISCOUNT IN BILLS OF EXCHANGE M/S. VFC INDUSTRIES PVT. LTD. 8 WITHIN INTEREST DEFINITION. A SIMILAR VIEW HAS B EEN TAKEN BY THE CO- ORDINATE BENCH OF THE CALCUTTA IN THE CASE OF MKJ E NTERPRISES LTD. VIDE ITS ORDER DT. 29.1.2014. THEREFORE, IN OUR HUMBLE O PINION, PROVISION OF SEC. 40(A)(IA) ARE CLEARLY NOT APPLICABLE TO THE FA CTS OF THE CASE AS THERE WAS NO LIABILITY OF TDS. GROUND NO. 4 IS ACCORDING LY ALLOWED. 22. GROUND NO. 5 READS AS UNDER: THE LD. CIT(A) ERRED IN NOT ALLOWING THE MAINTENAN CE CHARGES IN RESPECT OF MACHINERY OF RS. 39,78,235/- IN FULL BUT RESTRICTING THE SAME TO ONLY THOSE ITEMS TO PAYMENT S MADE TO THE CONTRACTORS TO CLEAN, OIL AND REPAIR MACHINERY IN T HE FACTORY AND NOT ALLOWING EXPENSES DESCRIBED AS MAN POWER SUPPLY CHARGES AND FORMATION CHARGES. YOUR APPELLANTS SUBMIT THAT THE SE TOO ARE REVENUE EXPENSES IN NATURE AND ALLOWABLE AS CLAIMED . 23. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PR OCEEDINGS, THE AO OBSERVED THAT THE ASSESSEE HAS INCURRED EXPENSES ON ACCOUNT OF MACHINE MAINTENANCE AND REPAIRS. THE ASSESSEE WAS ASKED TO EXPLAIN THE PAYMENT OF RS. 14,00,951/- TO VISHNU ENTERPRISES, RS. 5,09, 845 TO SHIVAM ENTERPRISES AND RS. 20,67,439/- TO QUICK SAFE SERVI CES. ON RECEIVING NO EXPLANATION, THE AO WENT ON TO TREAT THESE EXPENSES AS CAPITAL EXPENDITURE AND DISALLOWED THE SAME. 24. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS CONSIDERED THIS GRIEVANCE AT PARA-7 OF HIS ORDER. THE ASSESSEE FILED THE DETAILS OF SUCH EXPENDITURE ALON GWITH BILLS. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, THE LD. CIT(A) WAS CONVINCED THAT SOME OF THE EXPENSES ACTUALLY REPRESENT PAYMEN TS MADE TO THE CONTRACTORS TO CLEAN, OIL AND ALSO REPAIR A NUMBER OF MACHINES IN THE FACTORY. ACCORDING TO THE LD. CIT(A), THESE EXPENS ES CAN BE SAID TO BE MAINTENANCE EXPENSES FOR THE MACHINES. ACCORDINGLY , HE DIRECTED THE M/S. VFC INDUSTRIES PVT. LTD. 9 AO TO ALLOW THE SAID EXPENSES AS REVENUE IN NATURE . THE LD. CIT(A) FURTHER DIRECTED THE AO TO ALLOW ONLY THOSE EXPENSE S, THE VOUCHERS OF WHICH CARRY THE NARRATION OF REPAIRS AND MAINTENAN CE CHARGES AS REVENUE EXPENDITURE. 25. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY SUBMITTED THAT THE LOWER AUTH ORITIES HAVE NOT APPRECIATED THE FACTS PROPERLY. TO SUBSTANTIATE, T HE LD. COUNSEL DREW OUR ATTENTION TO EXHIBITS 92 TO 150 OF THE PAPER B OOK WHICH CONTAIN DETAILS OF REPAIRS AND MAINTENANCE EXPENSES ALONGWI TH ALL INVOICES. IT IS THE SAY OF THE LD. COUNSEL THAT IF THESE BILLS AND INVOICES WOULD HAVE BEEN APPRECIATED BY THE LOWER AUTHORITIES, THERE WO ULD NOT HAVE REMAINED ANY IOTA OF DOUBT OF THESE EXPENSES WHICH ARE REVENUE IN NATURE AND ACCORDINGLY ALLOWABLE. 26. THE LD. DR COULD NOT ADD ANYTHING TO THE FINDIN GS OF THE REVENUE AUTHORITIES. 27. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE LOW ER AUTHORITIES AND THE RELEVANT MATERIAL EVIDENCE PLACED BEFORE US. A CAREFUL PERUSAL OF THE DETAILS OF REPAIRS AND MAINTENANCE ALONGWITH SUPPOR TING INVOICES SHOW THAT AO HAS NOT UNDERSTOOD THE CONTENTS OF THESE IN VOICES WHICH APPEAR TO BE PAYMENTS ON ACCOUNT OF JOB CHARGES. THEREFOR E, IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THIS ISSUE BACK T O THE FILES OF THE AO TO DECIDE THE ISSUE AFRESH IN THE LIGHT OF THE SUPPORT ING INVOICE. THE ASSESSEE IS DIRECTED TO SUBMIT THE DETAILS OF SUCH EXPENDITURE BEFORE THE AO. THE AO IS DIRECTED TO EXAMINE THE DETAILS AND DECIDE THIS ISSUE AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. GROUND NO. 5 IS ALLOWED FOR STATISTICAL PURPOSE. M/S. VFC INDUSTRIES PVT. LTD. 10 28. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ITA NO. 3371/M/12 A.Y. 2008-09 29. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF AP PEAL: (I) THE LD CIT(A) ERRED IN NOT ADMITTING THE ADDIT IONAL GROUND OF LOSS ON ACCOUNT OF FIRE OF RS. 11,27,24,6 20/- RAISED BY YOUR APPELLANTS. YOUR APPELLANTS SUBMIT THAT TH E CLAIM FOR LOSS ON ACCOUNT OF FIRE OCCURRED DURING A.Y 200 6-07 IS ALLOWABLE IN THE CURRENT YEAR (I.E. YEAR IN WHICH I NSURANCE CLAIM IS SETTLED) IF THE SAME IS NOT ALLOWED IN THE A.Y. 2006- 07. YOUR APPELLANTS SUBMIT THAT THE ENTIRE AMOUNT OF RS. 11,27,24,620/- AS CLAIMED IS ALLOWABLE AND OUGHT TO HAVE BEEN ALLOWED. (II) THE LD. CIT(A) FAILED TO CONSIDER THE FACTS OF YOUR APPELLANTS FOR NOT CLAIMING THE LOSS ON ACCOUNT OF FIRE IN THE RETURN OF INCOME OR BEFORE AO DURING THE COURSE OF ASSESSMENT. 30. SINCE WE HAVE ALLOWED THE LOSS ON ACCOUNT OF FI RE AMOUNTING TO RS. 11,27,24,620/- IN A.Y. 2006-07 VIDE ITA NO. 2088/M/ 2011, GRIEVANCE OF THE ASSESSEE BECOMES OTIOSE AND ACCORDINGLY DISMISS ED. 31. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO. 2088/M/11 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE AND APPEAL FILED BY THE ASSESSEE IN ITA NO. 3371/M/12 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH FEBRUARY, 2014 . !4 / 3( &! 5 6 7 5.2.2014 3 / 8 SD/- SD/- (VIJAY PAL RAO ) (N.K. BILLAIYA) /JUDICIAL MEMBER !& / ACCOUNTANT MEMBER M/S. VFC INDUSTRIES PVT. LTD. 11 MUMBAI; 6 DATED 5 TH FEBRUARY, 2014 . . ./ RJ , SR. PS !4 !4 !4 !4 / // / ,0 ,0 ,0 ,0 9!(0 9!(0 9!(0 9!(0 / COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,-)+ / THE RESPONDENT. 3. : ( ) / THE CIT(A)- 4. : / CIT 5. ;8 ,0 , , / DR, ITAT, MUMBAI 6. 8< / GUARD FILE. !4 !4 !4 !4 / BY ORDER, -0 ,0 //TRUE COPY// = == = / > > > > (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI