DCIT CIR. - 6(3), MUMBAI V. M/s. METRO EXPORTERS P. LTD., MUMBAI

ITA 2094/MUM/2008

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3273 (ITAT-MUMBAI)
• Duration Of Justice: 8 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 05-05-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 27-03-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Business income; Depreciation; Rule of consistency; Source of fund; Bad and doubtful debts
• Section: 80HHC; 14A; 37(1); 37; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER A ND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 2026/MUM/2008 FOR A Y - 2002-03 M/S METRO EXPORTERS PVT. LTD. KAKAD CHAMBERS, 132, DR. A.B. ROAD, WORLI, MUMBAI-400018 PAN: AABCM0349J VS. ASST. CIT, RANGE-6(3), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 . (APPELLANT) (RESPONDENT) ITA NO. 2094/MUM/2008 A Y- 2002-03 ASST. CIT, RANGE-6(3), 5 TH FLOOR, ROOM NO. 522, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 . VS. M/S METRO EXPORTERS PVT. LTD. SHAH HOUSE, 5 TH FLOOR, SHIVSAGAR ESTATE, DR. A.B. ROAD, WORLI, MUMBAI-400018 PAN: AABCM0349J (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI Y.P. TRIVEDI, SMT. USHA (AR) REVENUE BY : SHRI ABHINAY KUMBHA R (DR) DATE OF HEARING : 06.05.2016 DATE OF PRONOUNCEMENT : 08.06.2016 O R D E R PER PAWAN SINGH, JM: 1. THESE TWO CROSS APPEAL ARE ARISING OUT OF THE ORDER OF CIT(A)-26, MUMBAI DATED 07.12.2007 FOR AY 2002-03. ITA NO. 202 6M/2008 IS FILED BY ASSESSEE AND ITA NO. 2094/M/2008 BY REVENUE. BOT H THE APPEALS ARE ARISING FROM THE SAME ORDER, HENCE BOTH THE APPEAL WERE HEARD TOGETHER AND ARE BEING DECIDED BY COMMON ORDER. 2 ITA NOS. 2026 & 2094/M/08 IN ITA NO. 2026/MUM/2008 THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. REOPENING OF ASSESSMENT ERRED IN UPHOLDING THE RE-OPENING OF ASSESSMENT U/S . 147; 2. PRIOR PERIOD EXPENDITURE ERRED IN CONFIRMING THE DISALLOWANCES OF PRIOR PERI OD EXPENSES OF RS.61, 874/- (RS.1,34,655/- LESS RS. 72,781/-). WITHOUT PREJUDICE TO THE ABOVE, ERRED IN NOT DIRECT ING THE ASSESSING OFFICER TO ALLOW THESE EXPENDITURE TO THE YEAR TO W HICH IT PERTAINS; 3. DISALLOWANCES U/S 14A136(1)(III) ERRED IN CONFIRMING THE DISALLOWANCES U/S 14A/36(1) (III) OF RS. 50,000 (ADHOC AMOUNT) FOR INTEREST AND EXPENDITURE WITH RE SPECT TO INVESTMENT WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS NOT INCURRED ANY EXPENDITURE AND WITHOUT ANY FINDING TO THE EFFECT; 4. DEPRECIATION ON CARS ERRED IN CONFIRMING DISALLOWANCES OF DEPRECIATION O N CAR PURCHASED IN THE NAME OF AN EMPLOYEE RS. 200,565/-; ERRED IN NOT ACCEPTING THE PRINCIPLE LAID DOWN BY H ON'BLE SUPREME COURT IN MYSORE MINERALS LTD. (239 ITR 775) WHEREIN IT HA S BEEN LAID DOWN THAT BENEFICIAL OWNER IS ENTITLE TO DEPRECIATION ON ASSET; 5. EXPORT TO IRAQ ERRED IN CONFIRMING DISALLOWANCES OF COMMISSION PAI D TO THE AGENT OR THEIR NOMINEE IN RESPECT OF THE EXPORTS TO IRAQ; ERRED IN APPLYING EXPLANATION TO SECTION 37(1) TO T HE FACTS OF THE CASE IN RESPECT OF COMMISSION PAID TO THE AGENT OR THEIR NO MINEE SINCE PAYMENT OF COMMISSION NEITHER AN OFFENCE NOR IT IS PROHIBIT ED BY ANY LAW ENACTED BY THE STATE OR CENTRAL GOVERNMENT OF INDIA; 6. DEDUCTION U/S 80HHC 6.1 DETERMINATION OF PROFIT OF THE BUSINESS- ERRED IN UPHOLDING THE REDUCTION THE COMMISSION DIS ALLOWED U/S. 37(1) FROM PROFIT OF THE BUSINESS FOR THE PURPOSE OF SECT ION 80HHC. 6.2 DEPB I DFRC I. ERRED IN CONFIRMING THE DENIAL OF DEDUCTION U/S. 80HHC IN RESPECT OF DEPB OF RS.3,24,52,813/-, DFRC OF RS.93,38,463/- BY APPLYING THE AMENDED PROVISIONS OF SEC.80HHC(3) OF THE ACT, WITH OUT APPRECIATING THAT AS PER THE AMENDMENT TO SEC.28, DEPB LICENSES ARE TREATED AT PAR WITH OTHER EXPORT INCENTIVES RECEIVED BY THE EXPORT ER AS PER THE EXPORT- IMPORT POLICY OF THE GOVT. 6.3 10% OF THE INDIRECT EXPENSES ERRED IN NOT ACCEPTING THE APPELLANT CLAIM FOR EXPE NSES DEEMED TO BE INCURRED FOR EARNING INCOME WHICH HAS BEEN REDUCED TO ARRIVE AT PROFIT OF THE BUSINESS @ 10%; 6.4 SUPPORTING MANUFACTURER ERRED IN REDUCING THE CLAIM FOR 80 HHC BY REDUCING THE DEDUCTION U/S 80HHC SUBSECTION 3 FOR EXPORT INCENTIVE FOR THE EXP ORT TURNOVER DECLARED IN FROM 10CCAB TO SUPPORTING MANUFACTURER WITHOUT APPRECIATING THE FACT THAT SUB SECTION 3 DOES NOT G IVE ANY AMBIGUITY FOR SUCH PROPORTIONATE EXPORT INCENTIVE. 6.5 ERRED IN NOT ADJUDICATING THE FOLLOWING GROUNDS OF APPEAL; 3 ITA NOS. 2026 & 2094/M/08 I. ERRED IN TREATING INTEREST INCOME IN OTHER SOURC ES ACCORDINGLY REDUCING THE 100% OF THE INTEREST INCOME AS AGAINST THE 90% PROVIDED IN EXPLANATION (BAA) TO SECTION 80HHC; II. ERRED IN NOT ALLOWING THE APPELLANTS CLAIM OF N ETTING OF INTEREST PAID AND INTEREST INCOME BY CONSIDERING THE INTEREST INC OME AS INCOME FROM OTHER SOURCES WITHOUT APPRECIATING THE FACT THAT TH E BOTH ARE RELATED TO EXPORT BUSINESS AND WITHOUT GIVING OPPORTUNITY OF B EING HEARD IN THIS MATTER; III. ERRED IN TREATING THE MISCELLANEOUS INCOME FRO M THE BUSINESS OF EXPORTS AS OTHER SOURCES AND ACCORDINGLY DENIED THE DEDUCTION UNDER SECTION 80HHC WITHOUT APPRECIATING THE FACT THAT TH ESE ARE FROM EXPORT BUSINESS; IV. WITHOUT PREJUDICE TO THE ABOVE, ERRED NOT APPLY ING THE RATIO ESTABLISHED BY THE LEARNED ACIT FOR SECTION 14A / 3 6 (1)(III) WITH RESPECT TO THE ABOVE INCOME; V. ERRED IN ONCE AGAIN REDUCING THE PROVISION OF DO UBTFUL DEBTS W/BACK RS. 27,23,780/- FROM THE PROFIT OF THE BUSINESS WIT HOUT APPRECIATING THE FACT THAT THE SAME WAS REDUCED WHILE COMPUTING THE BUSINESS INCOME; VI. ERRED IN REDUCING 90% OF INCOME FROM GOVERNMENT GRANT RS. 57,988/-. 6.6 WRITE BACK OFF ADVANCE FROM DEBTORS FAILED TO APPRECIATE THAT THE WRITE BACK RS.1,11,14 4/- IS OF ADVANCE FROM DEBTORS FOR EXPORT OF GOODS AND SHOULD BE CONSIDERE D AS PROFIT OF THE BUSINESS. IN ITA NO. 2094/MUM/2008 THE REVENUE RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN DIRECTING THE A.O. NOT TO EXCLUDE F OREIGN EXCHANGE GAIN OF RS. 91,16,185/- FROM TOTAL TURNOVER AND EXP ORT TURNOVER FOR THE PURPOSE OF CALCULATING DEDUCTION U/S. 80HHC OF THE INCOME TAX ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN DIRECTING THE A.O. NOT TO EXCLUDE 9 0% OF FOREIGN EXCHANGE GAIN OF RS. 91,16,185/- FROM PROFITS OF BU SINESS WITHIN THE MEANING OF CLAUSE (BAA) OF EXPLANATION TO SECTION 8 0HHC OF THE INCOME TAX ACT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN DIRECTING THE A.O. NOT TO EXCLUDE 9 0% OF SUNDRY CREDIT BALANCES WRITTEN BACK AMOUNTING TO RS.50,50, 083/- AND PROVISION FOR DOUBTFUL DEBTS WRITTEN BACK AMOUNTING TO RS. 27,23,780/- FROM PROFITS OF BUSINESS WITHIN THE MEA NING OF CLAUSE (BAA) OF EXPLANATION U/S. 80HHC OF THE INCOME TAX A CT. 4. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE R ESTORED. 5. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 4 ITA NOS. 2026 & 2094/M/08 2. FIRST WE SHALL TAKE UP THE APPEAL FILED BY THE ASSE SSEE BEING ITA NO. 2026/MUM/2008. WE HAVE HEARD LD. REPRESENTATIVES OF THE PARTIES AN D PERUSED THE MATERIAL ON RECORD. LD. AUTHORISED REPR ESENTATIVE (AR) OF THE ASSESSEE MADE THE STATEMENT THAT ASSESSEE IS NO T PRESSING THE GROUND NO.1, 3, 6.3, 6.4, 6.5(IV) AND 6.6. AS THESE GROUND S ARE NOT PRESSED BY ASSESSEE, THE SAME ARE DISMISSED AS NOT PRESSED. 3. GROUND NO.2, RAISED IN THE PRESENT APPEAL IN RESPEC T TO PRIOR PERIOD EXPENSES OF RS. 61,874/-. THE AR OF THE ASSESSEE AR GUED THAT THIS GROUND OF APPEAL IS COVERED IN FAVOUR OF ASSESSEE IN ASSES SEES OWN CASE FOR AY 2004-05. COPY OF WHICH IS FILED ON RECORD. WE HAVE PERUSED THE ORDER OF ITA NO. 2095/M/08 DATED 04.11.2010 THEREIN VIDE GRO UND NO.1, THE ASSESSEE RAISED THE IDENTICAL GROUND ABOUT THE PRIO R PERIOD EXPENDITURE DISALLOWED BY AO AND CONFIRMED BY CIT(A) AND WHILE DEALING WITH THIS GROUND, CO-ORDINATE BENCH OF THIS TRIBUNAL HELD AS UNDER: 6. WE HAVE CONSIDERED THE ISSUE. AS SEEN FROM THE ORDERS FOR A.Y. 2003- 04 THE A.O. HAS DISALLOWED ONLY THE NET CLAIM AFTER SETTING OFF THE PRIOR PERIOD INCOME. THE CIT(A) HAS CONFIRMED THE DISALLO WANCE TO THE EXTENT OF THE NET AMOUNT ONLY, WHICH WAS CONTESTED. HOWEVE R, IN THIS YEAR, WHILE ACCEPTING THE PRIOR PERIOD INCOME, THE A.O. W ITHOUT VERIFYING WHETHER THE EXPENDITURE HAS BEEN ACCRUED DURING THE YEAR OR NOT, WHETHER THE LIABILITY HAS CRYSTALLISED DURING THE YEAR OR N OT, SIMPLY DISALLOWED THE AMOUNT ON THE BASIS OF THE ACCOUNTING PRINCIPLES. E VEN THOUGH THE A.O. FOLLOWED THE DECISION OF THE ITAT IN EVEREADY INDUS TRIES INDIA LTD. 78 ITD 175 (TM) FOR THE ABOVE PRINCIPLE, IT IS NOT IN DISPUTE THAT THE ASSESSEE IS FOLLOWING THE MERCANTILE SYSTEM OF ACCO UNTING AND UNDER THAT PRINCIPLE THE EXPENDITURE RELATABLE TO EARLIER YEAR S WHEN CRYSTALLISED IN AN YEAR CANNOT BE ALLOWED AS DEDUCTION IN ANY OTHER YE AR. IN THE ABOVE REFERRED CASE THE ISSUE WAS WITH REFERENCE TO THE Y EAR OF ALLOWABILITY OF EXPENDITURE/COMPENSATION PAYABLE IN M/S. METRO EXPO RTERS PVT. LTD. THE BHOPAL GAS LEAK TRAGEDY CASE. EVEN THOUGH THE INCID ENT OF GAS LEAK OCCURRED IN 1984 THE ISSUE WAS WHETHER THE COMPENSA TION WAS TO BE ALLOWED IN 1989-90 WHEN THE AWARD WAS GRANTED OR IN THE YEAR WHEN THE ORDER REACHED FINALITY ON DISPOSAL OF WRIT PETITION IN A.Y. 1992-93. AFTER ANALYSING THE CASE LAW ON THE ISSUE THE THIRD MEMBE R HAS AGREED THAT THE LIABILITY HAS TO BE ALLOWED WHEN THE SAME WAS CRYST ALLISED IN A.Y. 1992- 5 ITA NOS. 2026 & 2094/M/08 93. THIS ALSO INDICATES THAT EVEN IN MERCANTILE SYS TEM OF ACCOUNTING, YEAR OF CRYSTALLIZATION OF LIABILITY IS IMPORTANT THAN N OMENCLATURE AS PRIOR PERIOD EXPENDITURE. THERE IS NO SUCH FINDING BY THE A.O. WITH REFERENCE TO THE NATURE OF EXPENDITURE AND THE YEAR OF CRYSTA LLIZATION. WHILE ACCEPTING THE INCOME THE A.O. NOT ONLY DISALLOWED T HE PRIOR PERIOD EXPENDITURE OF RS. 3,19,780/- BUT ALSO NET DEBIT OF RS. 12,891/- THEREBY MAKING DISALLOWANCE OF RS. 3,32,671/- MORE THAN THE AMOUNT INVOLVED, WHICH INDICATES THAT THE A.O. HAS NOT APPLIED HIS M IND WHILE CONSIDERING THE DISALLOWANCE. SINCE THE A.O. HAS DISALLOWED ONL Y THE NET AMOUNT AFTER ACCEPTING THE PRIOR PERIOD INCOME IN A.Y. 200 3-04 AND THE ASSESSEE HAS NO OBJECTION FOR SIMILAR TREATMENT IN THIS YEAR , WE DIRECT THE A.O. TO DISALLOW THE AMOUNT OF RS. 12,891/- ONLY, WHICH IS THE NET DEBIT MADE TO THE P & L ACCOUNT. WITH THIS DIRECTION THE GROUND I S CONSIDERED PARTLY ALLOWED. 4. KEEPING IN VIEW THE ORDER OF CO-ORDINATE BENCH AND PRINCIPLE OF CONSISTENCY, WE DIRECT THE AO TO ALLOW PRIOR PERIOD EXPENSES IN ACCORDANCE WITH THE ORDER OF CO-ORDINATE BENCH IN A SSESSEES CASE FOR AY 2004-05 (SUPRA), HENCE, THIS GROUND OF APPEAL IS ALLOWED. 5. GROUND NO.4 RAISED IN THE PRESENT APPEAL IS FOR OUR CONSIDERATION IS DEPRECIATION ON CARS OF RS. 2,00,565/-. AR OF THE A SSESSEE FURTHER ARGUED THAT THIS GROUND OF APPEAL IS ALSO COVERED IN FAVOU R OF ASSESSEE IN ASSESSEES OWN CASE FOR AY 2004-05 IN ITA NO. 2027/ MUM/2008 AND IN MYSORE MINERALS LTD. VS. CIT (239 ITR 775). WE HAVE SEEN THE ORDER OF CO-ORDINATE BENCH IN ASSESSEES OWN CASE FOR AY 200 4-05, THE SIMILAR GROUND WAS RAISED VIDE GROUND NO.3 IN THE SAID APPE AL ABOUT THE ISSUE OF DISALLOWANCE OF DEPRECIATION ON CARS AND CLAIMED DE PRECIATION OF RS. 6,47,794/- AND WHILE DEALING WITH THIS GROUND, THE CO-ORDINATE BENCH OF THIS TRIBUNAL HELD AS UNDER: 12. WITHOUT GOING INTO THE MERITS OF THE CONTENTIO NS WHETHER THE ASSESSEE HAS BENEFICIAL OWNERSHIP ON THE ASSETS, IT IS TO BE SEEN WHETHER THE SAID CARS HAVE BEEN PURCHASED BY THE DIRECTORS IN THEIR INDIVIDUAL CAPACITY OR AS A REPRESENTATIVE OF THE COMPANY. WHA T IS ALSO REQUIRED TO BE EXAMINED IS THE SOURCE OF FUNDS, WHETHER THE AMO UNTS ARE PAID FROM THE ACCOUNTS OF THE DIRECTORS FROM THEIR OWN SOURCE S AND LATER TRANSFERRED 6 ITA NOS. 2026 & 2094/M/08 TO THE COMPANY OR THE COMPANY PAID THE AMOUNTS AT T HE TIME OF PURCHASE EVEN THOUGH THEY ARE REGISTERED IN THE NAME OF THE INDIVIDUAL DIRECTORS. THE A.O. SIMPLY DISALLOWED THE DEPRECIATION STATING THAT THE CARS WERE REGISTERED IN THE NAMES OF THE DIRECTORS. THAT ALON E CANNOT BE A REASON FOR DISALLOWANCE UNLESS IT IS EXAMINED WHETHER THE CARS ARE PURCHASED BY THE COMPANY BUT REGISTERED IN THE NAME OF THE DIREC TOR OR IT IS DIRECTOR'S VEHICLES PURCHASED FROM THEIR SOURCE TREATED AS COM PANIES ASSETS. FURTHER THE USAGE ALSO HAS NOT BEEN EXAMINED. IT IS ALSO NO TICED THAT THE CIT (A) IN THE LATER YEAR HAS GIVEN FINDINGS THAT THAT ASSE TS HAVE BEEN PURCHASED BY THE COMPANY AND ACCORDINGLY THE DEPRECIATION IS ALLOWABLE FOLLOWING THE DECISION OF THE HON'BLE SUPREME COURT IN THE CA SE OF MYSORE MINERALS LTD. 239 ITR 775. HOWEVER, THERE IS NO FIN DING WITH REFERENCE TO THE DETAILS OF PAYMENTS AND OWNERSHIP. FOR THESE REASONS, WE ARE OF THE OPINION THAT THE ISSUE HAS TO BE RE-EXAMINED BY THE A.O. IN THE LIGHT OF THE ABOVE OBSERVATIONS FOR WHICH PURPOSE THE ISSUE IS RESTORED TO THE FILE OF THE A.O. TO RE-EXAMINE THE NATURE OF PURCHASE OF CAR, SOURCE THEREOF AND CLAIM OF EXPENDITURE, ETC. TO DECIDE WHETHER TH E ASSESSEE COMPANY IS A BENEFICIAL OWNER OR NOT. IF THE ASSESSEE HAS BENE FICIARY OWNERSHIP OF THE ASSETS THEN THE A.O. IS DIRECTED TO ALLOW THE DEPRE CIATION. THE A.O. IS TO DECIDE ACCORDINGLY AFTER GIVING PROPER OPPORTUNITY TO THE ASSESSEE. THE GROUND IS RESTORED TO THE FILE OF THE A.O. 6. HENCE, KEEPING IN VIEW THE ORDER OF CO-ORDINATE BEN CH AND PRINCIPLE OF CONSISTENCY, THIS GROUND OF APPEAL IS ALSO ALLOWED IN FAVOUR OF ASSESSEE AND WE DIRECT THE AO TO EXAMINE THIS ISSUE IN THE L IGHT OF OBSERVATION/DIRECTION GIVEN IN ASSESSEES CASE FOR AY 2004-05 IN ITA NO. 2027/M/2008. 7. GROUND NO.5 RAISED IN THE PRESENT APPEAL IS IN RESP ECT OF COMMISSION OF EXPORT TO IRAQ. AR OF ASSESSEE ARGUED THAT THIS GRO UND OF APPEAL IS ALSO COVERED IN FAVOUR OF ASSESSEE BY THE ORDER HONBLE CALCUTTA HIGH COURT IN CIT VS. RAJRANI EXPORT (AIT 2013-75- HIGH COURT) AND CO-ORDINATE BENCH OF ITAT, MUMBAI IN NSIL EXPORTS LTD. VS. DCIT [2014] 44.TAXMAN.COM. 246, AND AIR PAC EXPORTS VS. ACIT (1 52 ITD 634), MUMBAI. ON THE OTHER HAND, LD. DR FOR THE REVENUE A RGUED THAT THIS GROUND OF APPEAL IS COVERED AGAINST THE ASSESSEE BY THE ORDER OF ITAT MUMBAI VIDE ITA NO. 7285 TO 7286/M/2007 IN CASE TIT LED AS M/S CIPLA 7 ITA NOS. 2026 & 2094/M/08 LTD. VS. DCIT. WE HAVE CONSIDERED THE RIVAL CONTENTION OF AR AS WE LL AS DR OF THE PARTIES AND GONE THROUGH THE ORDER PASSED BY THE HONBLE CALCUTTA HIGH COURT AND VARIOUS TRIBUNALS ON THE IS SUE OF PAYMENT OF COMMISSION TO GOVERNMENT OF IRAQ. THE HONBLE CALCU TTA HIGH COURT WHILE DEALING WITH THE GROUNDS OF APPEAL RAISED BY REVENUE HELD AS UNDER: THE COMMISSION ON EXPORT ACTIVITY HAD BEEN FULLY D ISCLOSED IN ALL CORRESPONDENCES AND AN ACTIVITY IN RELATION TO EXPO RT, THE COMMISSION WAS PAID THROUGH BANKING CHANNEL OF RBI APPROVAL AN D IT WAS PAID PURSUANT TO AN AGREEMENT APPROVED BY GOVERNMENT OF INDIA AND UN. THE PAYMENT OF COMMISSION WAS FOR BUSINESS CONSIDERATIO N AND THERE WAS APPARENTLY NO ILLEGALITY IN MAKING PAYMENT OF COMMI SSION. BESIDES THIS, NOTHING HAS BROUGHT ON RECORD TO SHOW THAT THE TRAN SACTIONS RELATING TO PAYMENT OF COMMISSION ARE NON-GENUINE OR ARE EXCESS IVE AND UNREASONABLE. THE VOLKER COMMISSION REPORT HAD DISC USSED ABOUT THE UTILIZATION OF MONEY BY THE RECIPIENT OF THE COMMIS SION IN PARTING SOME OF THE FUND SO RECEIVED AS COMMISSION WITH THE GOVERNM ENT OF IRAQ AND SUCH PARTING OF COMMISSION WITH THE GOVERNMENT OF I RAQ WAS OBJECTED TO BY THE VOLKER COMMISSION REPORT WHICH WAS A PACT BE TWEEN THE IRAQ GOVERNMENT AND THE UN WHEREIN, AS IT APPEARS, NEITH ER THE APPELLANT COMPANY IS INVOLVED NOR GOVERNMENT OF INDIA IS INVO LVED. FURTHER, THE CO-ORDINATE BENCH OF ITAT IN NSIL EXPO RT LTD. VS. DCIT [2014] 44.TAXMANN.COM 246- MUM WHILE DEALING WITH S IMILAR GROUND OF APPEAL HELD AS UNDER: THEREFORE, UNTIL AND UNLESS IT IS OTHERWISE PROVED THAT THE PAYMENT WAS AN ILLICIT PAYMENT TO THE SADDAM HUSSAIN REGIME AND NOT TO THE PARTIES IT CANNOT BE CONCLUDED THAT THE SAID PAYMENTS ARE NOT MADE FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. THE EXPLANATION TO SEC TION 37 CANNOT BE INVOKED MERELY ON THE BASIS OF SOME DOUBT ABOUT EXP ENDITURE WHETHER MADE INFRACTION OF LAW. THERE SHOULD BE A DIRECT AN D COGENT EVIDENCE TO SHOW THAT THE PAYMENT MADE BY THE ASSESSEE IS CONTR ARY TO LAW. THE AUTHORITIES BELOW FAILED TO BRING ANYTHING ON RECOR D TO ESTABLISH THAT THE PAYMENTS IN QUESTION WERE ILLEGALLY MADE BY THE ASS ESSEE TO THE IRAQI AUTHORITIES. ON THE CONTRARY, THE ASSESSEE HAS PROD UCED THE EVIDENCE OF PAYMENT TO THE AGENT WHO IS NOT CONNECTED TO THE IR AQI AUTHORITIES. THEREFORE, IN THE ABSENCE OF SPECIFIC FINDING THAT THE PAYMENTS WERE MADE TO THE IRAQI AUTHORITIES, IT CANNOT BE HELD AS ILLE GAL PAYMENT INFRACTION OF LAW. EVEN IF THE ASSESSEE FAIL TO PROVE BEYOND DOUB T THAT THE PAYMENTS IN QUESTION INCONSONANCE TO THE SERVICE RENDERED BY TH E AGENT THE SAME CANNOT BE HELD AS ILLEGAL IN THE ABSENCE OF ANY EVI DENCE TO PROVE THAT THE ASSESSEE INTENDED TO PAY THE AMOUNT ILLEGALLY THROU GH AGENT. 8 ITA NOS. 2026 & 2094/M/08 SIMILAR VIEW WAS TAKEN BY CO-ORDINATE BENCH OF MUMB AI TRIBUNAL IN AIR PAC EXPORTS V/S ACIT [152 ITD 634]-MUM IN ITA NO. 2 981 TO 2983/M/2012 FOR AY-2001-02 TO 2002-03 VIDE ORDER DA TED 11.06.2014. WE HAVE ALSO GONE THROUGH THE ORDER OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN M/S CIPLA LTD. VS. DCIT VIDE ORDER DATE D 27.09.2009, RELIED BY LD. DR FOR REVENUE, WHEREIN THIS TRIBUNAL HAS TA KEN A CONTRARY VIEW. WE HAVE NOTICED THAT THE ORDER PASSED IN M/S CIPLA LTD. WAS DIFFERENTIATED BY COORDINATE BENCH OF THIS TRIBUNAL IN NSIL EXPORTS LTD. (SUPRA) HOLDING THAT, CIPLA WAS INVOLVED IN ILLICIT PAYMENT MADE TO IRAQ GOVERNMENT AS PER VOLKER COMMITTEE REPORT HOLDING A S UNDER: 35. IT IS SEEN THAT THE REVENUE AUTHORITIES AS WEL L AS THE DR PLACED HEAVY RELIANCE ON THE DECISION OF CIPLA LTD. VS. AC IT, ITA NO. 7284 TO 7286/MUM/2007, WHEREIN THE COORDINATE BENCH AT MUMB AI, CAME TO THE CONCLUSION THAT, CIPLA WAS INVOLVED IN ILLICIT PAYM ENT MADE TO IRAQ GOVERNMENT, AS PER VOLCKER REPORT. IT HAS BEEN HELD BY THE COORDINATE BENCH IN PARA 7.1 THAT THE ASSESSEE HAS NOT DENIED PAYMENT OF ASSF. IN PARA 3 OF THE ORDER, THE ORDER MENTIONS ABOUT THE P AYMENTS TOWARDS ASSF AND ON WHICH BASIS, THE CASES WERE REOPENED. 36. HOWEVER, IN THE INSTANT CASE, THE FACTS ARE DIF FERENT. THE DISPUTE IS WITH REGARD TO PAYMENT MADE TO DALALA & COMPANY, FR OM WHERE, THE ALLEGED ILLICIT PAYMENT MAY HAVE BEEN PAID. IN SUCH A SITUATION, WHEN THE FACTS THEMSELVES ARE AT VARIANCE, THE DECISION OF C IPLA (SUPRA) CANNOT BE RELIED UPON. THIS ARGUMENT OF THE DEPARTMENT HAS TO BE REJECTED. 8. HENCE, KEEPING IN VIEW THE ABOVE DISCUSSION AND THE LEGAL POSITION, AND KEEPING IN VIEW THE ORDER OF CALCUTTA HIGH COURT (S UPRA), THIS GROUND OF APPEAL IS COVERED IN FAVOUR OF ASSESSEE. HENCE, THI S GROUND OF APPEAL IS ALLOWED IN FAVOUR OF ASSESSEE. 9. GROUND NO.6, IS FOR DEDUCTION U/S 80HHC AND UNDER G ROUND NO. 6.1 THE DISALLOWANCE OF COMMISSION U/S. 80HHC. THIS GROUND IS SIMILAR TO THE GROUND NO.5 WHICH IS IN RESPECT OF DISALLOWANCE OF COMMISSION ON EXPORT TO IRAQ, HENCE, THIS GROUND OF APPEAL IS (CONSEQUEN TIAL OF EARLIER GROUNDS) COVERED BY THE ORDER OF GROUND NO.5. 10. GROUND NO.6.2 IS IN RESPECT OF DISALLOWANCE OF DE PB/DEFRC. AR OF THE ASSESSEE ARGUED THAT THIS GROUND OF APPEAL IS C OVERED IN FAVOUR OF 9 ITA NOS. 2026 & 2094/M/08 ASSESSEE IN ASSESSEES OWN CASE FOR AY 2003-04 & 20 04-05 BY HONBLE APEX COURT IN SLP NO. 33224 & 33803/11. WHEREIN THE HONBLE APEX COURT HAS FOLLOWED THE JUDGMENT OF TOPMAN EXPORTS V S. CIT REPORTED IN 342 ITR 49. IN TOPMAN EXPORTS, THE HONBLE APEX COU RT HELD AS UNDER: ALTHOUGH FOUR QUESTIONS ARE RAISED BY THE APPELLAN T - ASSESSEE IN APPEAL, COUNSEL FOR THE APPELLANT STATES THAT THE F IRST THREE QUESTIONS ARE COVERED AGAINST THE ASSESSEE BY THE DECISION OF THI S COURT IN THE CASE OF COMMISSIONER OF INCOME TAX V/SO KALPATARU COLOURS & CHEMICALS REPORTED IN (2010) 328 ITR 451 (BOM). ACCORDINGLY, FIRST THREE QUESTIONS CANNOT BE ENTERTAINED. AS REGARDS FOURTH QUESTION IS CONCERNED, THE INCOME TAX APPELLATE TRIBUNAL HAS DISALLOWED THE CLAIM OF THE ASSESSEE B Y FOLLOWING THE DECISION OF THIS COURT IN THE CASE OF COMMISSIONER OF INCOME TAX V/S. DRESSER RAND INDIA PRIVATE LIMITED REPORTED IN (201 0) 323 ITR 429 (BOM). THE DISPUTE IN THE PRESENT CASE RELATES TO THE BALA NCE WRITTEN BACK IN RESPECT OF THE EXPENDITURE INCURRED BY THE ASSESSEE . THE COMMISSIONER OF INCOME TAX (APPEALS) IN HIS ORDER HAS RECORDED A FINDING THAT IN THE FACTS OF THE PRESENT CASE, THE BALANCE WRITTEN BACK IN RESPECT OF THE EXPENDITURE INCURRED AMOUNTING TO RS. 6,53,961/- IS LIABLE TO BE CONSIDERED AS BUSINESS INCOME ELIGIBLE FOR DEDUCTIO N UNDER SECTION 80HHC. IN SUCH A CASE, WHETHER THE DECISION OF THIS COURT IN THE CASE OF DRESSER RAND INDIA PRIVATE LIMITED (SUPRA) WOULD AP PLY IS THE QUESTION. SINCE THIS ASPECT OF THE MATTER IS NOT CONSIDERED B Y THE INCOME TAX APPELLATE TRIBUNAL, BY CONSENT, THE ORDER OF THE IN COME TAX APPELLATE IS SET ASIDE ON THE FOURTH QUESTION AND THE SAID IS SUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONSIDERATI ON AND IN ACCORDANCE WITH LAW. WHILE PASSING FRESH ORDER, THE ASSESSING OFFICER SHALL ALSO TAKE INTO CONSIDERATION, THE DECISION OF THIS COURT IN T HE CASE OF COMMISSIONER OF INCOME TAX V/S PFIZER LIMITED REPO RTED IN (2011) 330 ITR 62 (BOM). HENCE, KEEPING IN VIEW THE JUDGMENT OF HONBLE APEX COURT, THIS GROUND OF APPEAL IS RESTORED TO THE FILE OF THE CIT(A) FOR FRESH CONSIDERATION AND TO PASS ORDER IN ACCORDANCE WITH OBSERVATION OF HON BLE APEX COURT IN TOPMAN EXPORTS (SUPRA) AND IN ACCORDANCE WITH LAW. THUS THIS GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 11. NEXT GROUND(S) FOR OUR CONSIDERATION ARE GROUND NO. 6.5(I),(II) (III) (IV) & (VI). LD AR OF THE ASSESSEE ARGUED THAT ALL THESE GROUNDS OF APPEAL WERE NOT ADJUDICATED BY CIT (A). IT IS FURTH ER ARGUED THAT FOR AY2004-05 IN ITA 2027/M/2008, THE SIMILAR GROUNDS O F APPEAL WERE 10 ITA NOS. 2026 & 2094/M/08 NOT ADJUDICATED BY CIT(A) AND THUS ALL GROUNDS WERE RESTORED TO THE FILE OF CIT(A). WE HAVE SEEN THAT THE CO-ORDINATE B ENCH OF THIS TRIBUNAL, WHILE CONSIDERING THE SIMILAR GROUNDS IN ITA NO2027/M2008, RESTORED IT TO THE FILE OF CIT(A) WIT H THE FOLLOWING ORDER: 17. IT WAS THE SUBMISSION OF THE ASSESSEE THAT THE SE ISSUES HAVE NOT BEEN ADJUDICATED BY THE CIT(A) AND ACCORDINGLY TO RESTOR E THE ISSUE BACK TO THE FILE OF THE CIT(A). SINCE THESE GROUNDS RAISED BY THE ASSES SEE IN GROUND NO. 5 SUB- GROUND (VI) WITH REFERENCE TO TREATING INTEREST, TE CHNOLOGY TRANSFER, INSURANCE CLAIM AND MISCELLANEOUS INCOME RAISED IN FORM 35 BE FORE THE CIT(A) HAS NOT BEEN ADJUDICATED, THESE ISSUES ARE RESTORED TO THE FILE OF THE CIT(A) TO CONSIDER THEM AND PASS NECESSARY ORDERS. GROUND IS CONSIDERE D ALLOWED. HENCE, KEEPING IN VIEW THE ORDER OF CO-ORDINATE BEN CH, THE SIMILAR GROUNDS WERE RAISED WHICH WAS NOT ADJUDICATED BY LD . CIT(A), SIMILARLY IN THE YEAR UNDER CONSIDERATION CIT(A) HAS NOT CONS IDERED/ADJUDICATED THE GROUNDS RAISED IN THE APPEAL. HENCE, THESE GROU NDS OF APPEAL ARE RESTORED BACK TO THE FILE OF CIT(A) TO DECIDE THE S AME ON MERIT IN ACCORDANCE WITH LAW. 12. NOW WE SHALL TAKE UP APPEAL NO. 2094/MUM/2008 FILED BY THE REVENUE. WHEREIN GROUND NO.1 & 2 RAISED BY THE REVENUE IS T HAT CIT(A) ERRED IN DIRECTING THE AO NOT TO EXCLUDE FOREIGN EXCHANGE GI VEN OF RS. 91,16,185/- FROM TOTAL TURNOVER FOR THE PURPOSE OF CALCULATING DEDUCTION U// 80HHC AND PROFIT WITHIN THE MEANING OF CLAUSE ( BAA) OF THE EXPLANATION TO SECTION 80HHC OF THE ACT. AR OF THE ASSESSEE ARGUED THAT SIMILAR ISSUE ARISE IN AY 2003-04 AND THE CO-ORDINA TE BENCH OF THIS TRIBUNAL MADE THE FOLLOWING ORDER IN ITA NO. 1285/M UM/2007 AND THE MATTER TRAVELLED UP TO ITAT WHEREIN THE CO-ORDINATE BENCH OF ITAT. 3.2 THE SECOND DISPUTE IS REGARDING EXCLUSION OF F OREIGN EXCHANGE GAIN IN RESPECT OF EXPORT PROCEEDS IN THE EXPORT TURNOVER A ND THE PROFIT OF BUSINESS WHILE COMPUTING DEDUCTION UNDER SECTION 80HHC. THE AO HAD EXCLUDED THE SAME AND TREATED THE SAME AS INCOME FROM OTHER SOUR CES. CIT(A) HAS HELD 11 ITA NOS. 2026 & 2094/M/08 THAT FOREIGN EXCHANGE GAIN IN RESPECT OF EXPORT MAD E BY THE ASSESSEE IS PART OF EXPORT BUSINESS AND THEREFORE THE SAME HAD TO BE IN CLUDED IN THE EXPORT TURNOVER WHILE COMPUTING THE PROFIT OF BUSINESS. AG GRIEVED BY THE SAID DECISION THE REVENUE IS IN APPEAL. 3.2.1 AFTER HEARING BOTH THE PARTIES WE FIND THAT T HE ISSUE RAISED IS COVERED BY THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL I N CASE OF PRAKASH L. SHAH (306 ITR (AT) PAGE-1) IN WHICH IT HAS BEEN HELD THA T EXCHANGE GAIN IN RELATION TO EXPORT PROCEEDS HAS TO BE TAKEN AS PART OF EXPORT TURNOVER AND PROFIT OF BUSINESS OF THE YEAR IN WHICH THE EXPORT WAS MADE. IN THIS CASE THE LEARNED AR SUBMITTED THAT THE FOREIGN EXCHANGE GAIN WAS IN RESPECT OF EXPORT OF RELEVANT YEAR ONLY AND SUCH CLAIM HAS NOT BEEN C ONTRAVERTED BEFORE US BY THE LEARNED DR. WE THEREFORE RESPECTFULLY FOLLOWING THE DECISION OF THE SPECIAL BENCH (SUPRA) SEE NO INFIRMITY IN THE ORDER OF CIT(A) AND THE SAME IS THEREFORE UPHELD. 3.3 THE THIRD DISPUTE IS REGARDING TREATMENT OF WRI TE BACK OF EXPENDITURE OF RS.6,53,961/- AND PURCHASES OF RS.31,491/- WHILE CO MPUTING DEDUCTION UNDER SECTION 80HHC. THE AO HAD DEDUCTED 90% OF SUCH INCO ME AS PER EXPLANATION (BAA). CIT(A) HAS HELD THAT SUCH INCOME IS VERY MUCH PART OF BUSINESS INCOME ELIGIBLE FOR DEDUCTION UNDER SECTIO N 80HHC. AGGRIEVED BY THE SAID DECISION THE REVENUE IS IN APPEAL BEFORE T HE TRIBUNAL. 3.3.1 BEFORE US THE LEARNED DR FOR THE REVENUE SUPP ORTED THE ORDER OF AO AND PLACED RELIANCE ON THE JUDGMENT OF HON'BLE HIGH COURT OF MUMBAI IN CASE OF CIT VS DRESSER RAND INDIA PVT. LTD. (320 IT R 429). THE LEARNED AR ON THE OTHER HAND SUPPORTED THE ORDER OF CIT(A). 3.3.2 WE HAVE PERUSED THE RECORDS AND CONSIDERED TH E MATTER CAREFULLY. THE DISPUTE IS WHETHER 90% OF INCOME ON ACCOUNT OF WRIT E BACK OF EXPENDITURE AND PURCHASES OF EARLIER YEAR CAN BE CONSIDERED FOR DEDUCTION AS PER EXPLANATION (BAA). WE FIND THAT THE SAME ISSUE HAD BEEN CONSIDERED BY THE HON'BLE HIGH COURT OF MUMBAI IN CASE OF M/S.DRESSER RABD INDIA PVT. LTD. (SUPRA) IN WHICH THE ISSUE WAS WHETHER 90% OF RECOV ERY OF FREIGHT, INSURANCE, PACKAGING CHARGES, SALES TAX SET OFF ETC COULD BE E XCLUDED AS PER EXPLANATION (BAA). THE HON'BLE HIGH COURT HELD THAT 90% OF THES E RECEIPTS WERE INDEPENDENT ITEMS OF INCOME AND HAD TO BE EXCLUDED AS PER EXPLANATION (BAA). RESPECTFULLY FOLLOWING THE SAID JUDGMENT WE SET ASI DE THE ORDER OF CIT(A) AND UPHOLD THE ORDER OF AO DEDUCTING 90% OF SUCH IN COME FROM PROFIT OF BUSINESS AS PER EXPLANATION (BAA). 13. AGAINST THE ABOVE REFERRED ORDER OF ITAT, THE REVE NUE FILED APPEAL BEFORE THE HONBLE HIGH COURT VIDE ITA NO. 2467/201 1 AND THE SAME WAS DISMISSED VIDE ORDER DATED 06.03.2013 WITH THE FOLLOWING OBSERVATION: 1. IN THIS APPEAL BY THE REVENUE FOR ASSESSMENT YE AR 2003-04, FOLLOWING QUESTIONS OF LAW HAVE BEEN PROPOSED FOR OUR CONSIDE RATION. 12 ITA NOS. 2026 & 2094/M/08 'A) WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL, IN LAW WAS JUSTIFIED IN SETTING ASIDE THE ISSUE OF INCLUSION OF EXCHANGE RATE GAIN ON FORWARD CONTRACT ENTERED INTO BY THE ASSESS EE, FOR THE PURPOSE OF COMPUTATION UNDER SECTION 80HHC, TO THE FILE OF THE AO WITH A DIRECTION TO FOLLOW THE JUDGMENT OF THE TRIBUNAL IN THE CASE OF CIT V/SO BADRIDAS GAURIDU (P) LIMITED (261 ITR 256) ? B) WHETHER; ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE TRIBUNAL WAS JUSTIFIED IN UPHOLDING THE ORDER OF CIT (A) IN FAVOUR OF THE ASSESSEE COMPANY, THE ISSUE OF EXCLUSION OF FOREIGN EXCHANGE GAIN IN RESPECT OF EXPORT PROFIT FROM THE EXPORT TURNOVER FOR THE PURP OSE OF COMPUTATION UNDER SECTION 80HHC OF THE ACT ?' 2. IN SO FAR QUESTION (A) IS CONCERNED, THE TRIBUNA L BY THE IMPUGNED ORDER HAS FOLLOWED THE DECISION OF THIS COURT IN THE MATTER O F COMMISSIONER OF INCOME TAX V/SO BADRIDAS GAURIDU (P) LIMITED REPORTED IN (2003 ) 261 ITR 256 (BOM) TO HOLD THAT EXCHANGE RATE GAIN ON FORWARD CONTRACT IS BUSINESS INCOME. ACCORDINGLY; THE TRIBUNAL HELD THAT THE FOREIGN EXC HANGE GAIN WOULD BE EXPORT PROFIT AND, HENCE, CANNOT BE EXCLUDED FROM EXPORT T URNOVER UNDER SECTION 80HHC OF THE INCOME TAX ACT, 1961. IN VIEW OF THE ABOVE, WE SEE NO REASON TO ENTERTAIN QUESTION (A). 3. IN SO FAR AS QUESTION (B) IS CONCERNED, COUNSEL FOR THE PARRIES STATE THAT THIS, ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE AND AGAI NST THE REVENUE BY THE DECISION OF THIS COURT IN THE MATTER OF COMMISSIONER OF INCO ME TAX V/SO GEM PLUS JEWELLERY INDIA LIMITED REPORTED IN (2011) 330 ITR 175 (SEE PAGE 183). IN THAT VIEW OF THE MATTER, WE SEE NO REASON TO ENTERTAIN Q UESTION (B) THUS, KEEPING IN VIEW THE ORDER OF JURISDICTIONAL H IGH COURT, IN ASSESSEES CASE FOR AY 2003-04, GROUNDS OF APPEAL R AISED BY REVENUE HAVE NO MERIT, HENCE, THE SAME ARE DISMISSED. 14. NEXT GROUND OF APPEAL I.E. GROUND NO.3 IS IN RESPE CT OF DEDUCTION FROM PROFIT FROM BUSINESS. (A) SUNDRY CREDIT, BALANCE OF RS. 5050083/- (B) PROVISION FOR DOUBTFUL DEBT RS.27,23780/- 15. AR OF THE ASSESSEE ARGUED THAT GROUND NO. 3(A) OF APPEAL IS COVERED IN FAVOUR OF ASSESSEE BY THE ORDER OF HONBLE JURISDIC TIONAL HIGH COURT IN ASSESSEES OWN CASE IN ITA NO. 838/11 WHEREIN HONB LE HIGH COURT FOLLOWED THE CASE OF CIT VS. PFIZER LTD. REPORTED I N 330 ITR 62 WAS FOLLOWED, HOLDING AS UNDER: THE DISPUTE IN THE PRESENT CASE RELATES TO THE BAL ANCE WRITTEN BACK IN RESPECT OF THE EXPENDITURE INCURRED BY THE ASSES SEE. THE COMMISSIONER OF INCOME TAX (APPEALS) IN HIS ORDER H AS RECORDED A FINDING THAT IN THE FACTS OF THE PRESENT CASE, THE BALANCE WRITTEN BACK 13 ITA NOS. 2026 & 2094/M/08 IN RESPECT OF THE EXPENDITURE INCURRED AMOUNTING TO RS. 6,53,961/- IS LIABLE TO BE CONSIDERED AS BUSINESS INCOME ELIGIBLE FOR DEDUCTION UNDER SECTION 80HHC. IN SUCH A CASE, WHETHER THE DE CISION OF THIS COURT IN THE CASE OF DRESSER RAND INDIA PRIVATE LIM ITED (SUPRA) WOULD APPLY IS THE QUESTION. SINCE THIS ASPECT OF THE MATTER IS NOT CONSIDERED B Y THE INCOME TAX APPELLATE TRIBUNAL, BY CONSENT, THE ORDER OF THE IN COME TAX APPELLATE IS SET ASIDE ON THE FOURTH QUESTION AND T HE SAID ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR F RESH CONSIDERATION AND IN ACCORDANCE WITH LAW. WHILE PASSING FRESH ORD ER, THE ASSESSING OFFICER SHALL ALSO TAKE INTO CONSIDERATION, THE DEC ISION OF THIS COURT IN THE CASE OF COMMISSIONER OF INCOME TAX V/S PFIZE R LIMITED REPORTED IN (2011) 330 ITR 62 (BOM). KEEPING IN VIEW OF THE DIRECTION OF THE HONBLE HIG H COURT, THIS GROUND OF APPEAL IS RESTORED TO THE FILE OF AO FOR FRESH CONSIDERATION IN ACCORDANCE DIRECTION OF HIGH COURT IN ITA NO 383/2 011 DATED 30.08.2011 AND TO PASS ORDER IN ACCORDANCE WITH LAW . FOR GROUND NO. 3(B) LD. AR FOR THE ASSESSEE ARGUED THAT THIS GROUN D DOES NOT ARISE FROM THE ORDER OF CIT(A). WE HAVE PERUSED THE ORDER OF LD CIT(A) , AND FIND THAT THERE IS NO REFERENCE AND DISCUSSION ABOUT THE PROVISION OF DOUBTFUL DEBT IN THE IMPUGNED ORDER. THUS THE REVENUE IS PRE CLUDED TO RAISE SUCH ISSUE BEFORE US AND THE SAME IS REJECTED. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED AND THE APPEAL OF REVENUE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH JUNE 2016. SD/- SD/- (B. R. BASKARAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 08/06/2016 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/