M/S HINDUSTAN LIVER LTD., V. THE ADDLCIR 1(1),

ITA 2201/MUM/2004

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2796 (ITAT-MUMBAI)
• Duration Of Justice: 17 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 01-05-2012
• Assessment Year: 1998-1999
• Appeal Filed On: 02-04-2004
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V SREEKAR
• Keywords: Capital asset; Depreciation; Share purchase agreement; Earning of tax free income; Unabsorbed depreciation; Revenue expenditure; Capital expenditure; Set aside
• Section: 43B; 80HHC; 14A; 80HH; 10(33); 10(33); 13; 22; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI S. RIFA UR RAHMAN, ACCOUNTANT MEMBER IT A NO. 2201/MUM./2004 ( ASSESSMENT YEAR : 1998 99 ) HINDUSTAN UNILEVER LTD. (FORMERLY KNOWN AS HINDUSTAN LEVER LTD.) 165/166, BACKBAY RECLAMATION MUMBAI 400 020 . APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 1(1), MUMBAI . RESPONDENT ITA NO. 2031/MUM./2004 ( ASSESSMENT YEAR : 1998 99 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 1(1), MUMBAI . APPELLANT V/S HINDUSTAN UNILEVER LTD. (FORMERLY KNOWN AS HINDUSTAN LEVER LTD.) 165/166, BACKBAY RECLAMATION MUMBAI 400 020 . RESPONDENT REVENUE BY : SHRI V. SREEKAR ASSESSEE BY : SHRI PERCY PARDIWALA A/W SHRI JASMINE AMALSADWALA DATE OF HEARING 18 . 0 3 .202 1 DATE OF ORDER 11.06.2021 2 HINDUSTAN UNILEVER LTD. O R D E R PER S. RIFAUR RAHMAN, A.M. THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AND THE R EVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX ( A PPEALS) , MUMBAI , FOR THE ASSESSMENT YEAR 1998 99. 2. AT THE OUTSET, WE WISH TO PLACE ON RECORD THAT THE ASSESSEES COUNSEL, SHRI PERCY PARDIWALA , SUBMITTED BEFORE US THAT EACH AND EVERY GROUNDS OF APPEAL RAISED FOR THE YEAR UNDER CONSIDERATION ARE COVERED BY ASSESSEES OWN CASE FOR PRECEDING ASSESSMENT YEAR WHEREIN THE CO ORDINATE BENCH HAS BEEN CONSISTENTLY DECIDING THESE ISSUES. IN SUPPORT OF THIS CONTENTION, HE FILED A CHART SHOWING EACH GROUND OF APPEAL WHICH IS COVERED BY THE DECISION OF THE TRIBUNAL IN EARLIER ASSESSMENT YE AR. HENCE, IN OUR VIEW, SINCE ALL THE ISSUES HAVE ALREADY BEEN DECIDED MULTIPLE TIMES, THEREFORE, WE DEEM IT FIT AND APPROPRIATE NOT TO REPETITIVELY DISCUSS THE FACTS OF EACH ISSUE. THE LEARNED DEPARTMENTAL AUTHORITIES HAS FAIRLY AGREED TO THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. ITA NO.2201/MUM./2004 ASSESSEES APPEAL A.Y. 1998 99 3. GROUND NO.1, RELATES TO DEDUCTION UNDER SECTION 80HH AND 80 I/ 80 IA. 3 HINDUSTAN UNILEVER LTD. 4. CONSIDERED THE SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL ON RECORD. BEFORE US , T HE LEARNED COUNSELS APPEARING FOR THE PARTIES AGREED BEFORE US THAT THE ISSUE ARISING OUT OF GROUND NO.1, 1.1, 1.2 AND 1.3, HAS BEEN DECIDED BY THE CO ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN PRECEDING ASSESSMENT YEARS I.E., A.Y. 1985 86 , 1986 87, 1987 88, 1988 89, 1989 90, 1990 91, 1991 92, 1992 93, 1993 94, 1994 95, 1995 96, 1996 97, 1997 98, 2006 07 AND IN A.Y. 2009 10, WHEREIN THE TRIBUNAL HAS PARTLY ALLOWED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE WHILE ADJUDICATING THESE APPEAL S. THE LEARNED DEPARTMENTAL AUTHORITIES HAS LEFT THE ISSUE AT THE DISCRETION OF THE BENCH. CONSEQUENTLY, IN VIEW OF THE AFORESAID, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) AND RESTORE THE ISSUE BACK TO THE FILE OF THE AS SESSING OFFICER AND DIRECT HIM TO ISSUE DENOVO AFTER CONSIDERING THE ORDERS OF THE TRIBUNAL FOR THE PRECEDING ASSESSMENT YEARS AS STATED ABOVE AND IN ACCORDANCE WITH LAW. THUS, THESE GROUNDS ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 5. GROUND NO.2, RAISED BY THE ASSESSEE IS WITHOUT PREJUDICE TO GROUND NO.1 IF COMMON EXPENSES TO BE ALLOCATED TO INDIVIDUAL UNITS THEN COMMON INCOME SHOULD ALSO BE ALLOCATED FOLLOWING THE SAME PRINCIPLE. 4 HINDUSTAN UNILEVER LTD. 6. AFTER HEARING BOTH THE PARTIES WE FIND THAT THIS ISSUE HAS BEEN DECIDED BY THE CO ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE PRECEDING ASSESSMENT YEARS I.E., 1993 94, 1996 97 AND 1997 98, WHEREIN THE TRIBUNAL RESTORED THE ISSUE TO THE AUTHORITIES BELOW FOR DENOVO ADJUDICATION. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE AUTHORITIES BELOW AND RESTORE THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR DENOVO ADJUDICATION AFTER CONSIDERING THE FINDINGS OF THE TRIBUNAL AND IN ACCORDANCE WITH LAW. ACCORDINGLY, GROUND NO.2, IS ALLOWED FOR STATISTICAL PURPOSES. 7. GROUND NO.3, IS EXTRACTED BELOW: I) DEDUCTION IN RESPECT OF CDP CHINDWARA, DETERGENTS UNDERTAKING AT DHARWAD AND FOOTWEAR PONDICHERY WITHOUT ADJUSTING BROUGHT FORWARD LOSS AND DEPRECIATION OF EARLIER YEARS WHICH WAS ALREADY SET OFF AGAINST PROFIT FROM OTHER UNDERTAKING / ACTIVITIES; II) FAILED TO APPRECIATE THAT THERE WAS NO LOSSES / UNABSORBED DEPRECIATION WHICH HAD BEEN BROUGHT FORWARD IN THE CURRENT YEAR; III) FAILED TO APPRECIATE THAT DEDUCTION TO BE ALLOWED WITH RESPECT TO THE PROFIT OF THE NEW UNDERTAKING WHICH IS INCLUDED IN THE GROSS TOTAL INCOME AND CANNOT BE REDUCED BY THE AMOUNT WHICH IS NOT CONSIDERED IN THE GROSS TOTAL INCOME. 8. CONSIDERED THE SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL ON RECORD. W E FIND THAT THE ISSUE IN THE CONTEXT OF DEDUCTION UNDER SECTION 80HH OF THE ACT ARISING OUT OF THE AFORESAID GROUNDS HAS 5 HINDUSTAN UNILEVER LTD. BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE CO ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1988 89, 1989 90, 1991 92, 1996 97 AND 1997 98. HOWEVER, WE ALSO FIND THAT THE ISSUE ARISING OUT OF THE AFORESAID GROUNDS IN THE CONTEXT OF DEDUCTION UNDER SECTION 80J, HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE HON'BLE SUPREME COURT IN AN APPEAL FILED BY T HE REVENUE IN CIT V/S PATIALA FLOUR MILLS CO. PVT. LTD., 115 ITR 640 (SC). RESPECTFULLY FOLLOWING THE AFORESAID CASE LAWS, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. THUS, TH ESE GROUNDS ARE ALLOWED. 9. GROUND NO.4, RELATES TO DEDUCTION UNDER SECTION 80HHC OF THE ACT. 10. BEFORE US, BOTH THE LEARNED COUNSELS APPEARING FOR THE PARTIES AGREED THAT THIS ISSUE HAS BEEN DECIDED BY THE CO ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN C ASE FOR THE PRECEDING ASSESSMENT YEARS I.E., 1991 92 1992 93, 1993 94, 1994 95, 1995 96 AND 1997 98 , WHEREIN THE TRIBUNAL RESTORED THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR DENOVO ADJUDICATION. CONSISTENT WITH THE VIEW TAKEN IN THE PRECEDING ASSES SMENT YEARS, WE SET ASIDE THE ORDER PASSED BY THE AUTHORITIES BELOW AND RESTORE THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER AND DIRECT HIM TO DECIDE THE ISSUE DENOVO IN VIEW OF 6 HINDUSTAN UNILEVER LTD. THE FINDINGS GIVEN BY THE TRIBUNAL IN PRECEDING ASSESSMENT YEARS AND IN ACCORDANCE WITH LAW. ACCORDINGLY, GROUND NO. 4 , IS ALLOWED FOR STATISTICAL PURPOSES. 11. GROUND NO.5, IS EXTRACTED BELOW: I) THE LEARNED CIT(A) ERRED IN HOLDING THAT PROFIT OF THE BUSINESS IS REQUIRED TO BE REDUCED BY 90% OF GROSS INTEREST RECEIVED, COMMISSION AND PROCESSING CHARGES WHILE COMPUTING THE DEDUCTION U/S 80HHC; II) THE LEARNED CIT(A) FAILED TO APPRECIATE AND OUGHT TO HAVE HELD THAT SINCE THE APPELLANT HAS INCURRED INTEREST EXPENDITURE ONLY 90% OF NET INTEREST SHOULD HAVE BEEN REDUCED FROM PROFIT OF THE BUSINESS; AND III) THE LEARNED CIT(A) FAILED TO APPRECIATE THAT PROFIT OF BUSINESS ARE NOT REQUIRED TO BE REDUCED BY 90% OF PROCESSING CHARGES FROM THE AMOUNT OF PROFITS WHILE COMPUTING THE DEDUCTION UNDER SECTION 80HHC. 12. BEFORE US, THE LEARNED COUNSEL FOR TH E ASSESSEE SUBMITTED THAT THE ISSUE ARISING OUT OF THE AFORESAID GROUNDS HAS BEEN DECIDED BY THE CO ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE PRECEDING ASSESSMENT YEARS I.E., IN A.Y., AND 1995 96, 1996 97 AND 1997 98, WHEREIN THE TRIBUN AL HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) BY ALLOWING THE GROUNDS RAISED BY THE ASSESSEE. 13. GROUND NO.6, IS EXTRACTED BELOW: 7 HINDUSTAN UNILEVER LTD. I) THE LEARNED CIT(A) ERRED IN HOLDING THAT SALES PROCEEDS NOT REALIZED TILL 30 TH SEPTEMBER 1998, WERE REQUIRED TO BE REDUCED FROM THE EXPORT TURNOVER. II) FAILED TO APPRECIATE THAT THE SALE PROCEEDS WERE NOT REALIZED DUE TO REASONS BEYOND THE CONTROL OF THE APPELLANT. 14. HAVING CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND ON A PERUSAL OF THE MATERIAL ON RECORD, WE FIND THAT THIS ISSUE HAS BEEN DECIDED BY THE CO ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE PRECEDING ASSESSMENT YEAR I.E., A.Y. 1992 93 AND 1993 94, WHEREIN THE TRIBUNAL HAS RESTORED THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR DENOVO ADJUDICATION. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) AND RESTORE THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER AND DIRECT HIM TO DECIDE THE ISSUE AFRESH IN VIEW OF THE FINDINGS OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE PRECEDING ASSESSMENT YEAR CITED SUPRA AND IN ACCORDANCE WITH LAW. THUS, THESE GROUNDS ARE ALLO WED FOR STATISTICAL PURPOSES. 15. GROUND NO.7, IS EXTRACTED BELOW: I) THE LEARNED CIT(A) ERRED IN HOLDING THAT SHARE OF LOSS ON EXPORT OF TRADED GOODS SHOULD NOT BE REDUCED FROM THE AMOUNT OF PROFITS DERIVED FROM EXPORT OF MANUFACTURED GOODS WHILE COMPUTING DEDUCTION UNDER SECTION 80HHC; II) FAILED TO APPRECIATE THAT DEDUCTION U/S 80HHC IS ALLOWED IN RESPECT OF PROFIT DERIVED FROM EXPORTS AND THEREFORE LOSSES INCURRED OUGHT TO BE IGNORED; AND 8 HINDUSTAN UNILEVER LTD. III) EXPORT OF TRADED GOODS IS DIFFERENT BUSINESS ACTIVITY AND HENCE LOSSE S OUGHT TO BE IGNORED. 16. AFTER HEARING BOTH THE PARTIES, WE FIND THAT THE ISSUE S ARISING OUT OF THE AFORESAID GROUNDS HAVE BEEN DECIDED BY THE CO ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE PRECEDING ASSESSMENT YEAR I.E., A.Y. 1995 96 AND 1997 98, WHEREIN THE TRIBUNAL HAS DECIDED THE ISSUES AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE. THEREFORE, CONSISTENT WITH THE VIEW TAKEN THEREIN, WE HAVE NO HESITATION IN UPHOLDING THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) ON THIS ISSUE. THU S, THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 17. THE ISSUE ARISING OUT OF GROUND NO.8, RELATES TO PROVISION FOR RETIREMENT PENSION PAYABLE TO THE EMPLOYEES. 18. HAVING HEARD BOTH THE PARTIES AND CONSIDERING THE MATERIAL ON RECORD, WE FIND THAT IDENTICAL ISSUE HAS BEEN DECIDED BY THE CO ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE PREVIOUS ASSESSMENT YEAR I.E., A.Y. 1993 94, 1994 95 1995 96, 1996 97 AND 1997 98, WHEREIN IDENTICAL ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINS T THE REVENUE. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) AND ALLOW THE GROUND RAISED BY THE ASSESSEE. 9 HINDUSTAN UNILEVER LTD. 19. GROUND NO.9, IS EXTRACTED BELOW: I) ERRED IN HOLDING THAT THE SALES TAX COLLECTED BY THE APPELLANT CAN BE DISALLOWED U/S 43B OF THE ACT; AND II) FAILED TO APPRECIATE THAT THE SALES TAX COLLECTION ARE CREDITED TO SEPARATE ACCOUNT WHERE THE PAYMENTS ARE ALSO DEBITED AND APPELLANT HAS NOT CLAIMED ANY DEDUCTION IN RESPECT OF SALES TA X PAYMENTS; AND III) FAILED TO APPRECIATE THAT THERE IS DIVERSION AT SOURCE AND THE APPELLANT MERELY ACTS AS A CONDUIT FOR THE PURPOSE OF COLLECTING TAX ON BEHALF OF THE GOVERNMENT. 20. CONSIDERED THE SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT IDENTICAL ISSUE HAS BEEN DECIDED BY THE CO ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE PRECEDING ASSESSMENT YEAR I.E., A.Y. 1996 97 AND 1997 98, WH EREIN THE TRIBUNAL HAS RESTORED THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER FOR DENOVO ADJUDICATION. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) AND RESTORE THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER AND DIRECT HIM TO DECIDE THE ISSUE DENOVO AFTER CONSIDERING THE FINDINGS OF THE TRIBUNAL IN PRECEDING ASSESSMENT YEARS AND IN ACCORDANCE WITH LAW. THUS, THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 21. GROUND NO.10, IS EXTRAC TED BELOW: 10 HINDUSTAN UNILEVER LTD. I) ERRED IN HOLDING THAT 5% OF DIVIDEND AND INTEREST ON TAX FREE BONDS AS EXPENDITURE ON EARNING INCOME U/S 10(33) AND 10(15) OF THE ACT; AND II) FAILED TO APPRECIATE THAT THE APPELLANT DID NOT INCUR ANY EXPENDITURE ON EARNING DIVIDEND AND TAX FREE INTEREST. 22. AFTER HEARING BOTH THE PARTIES, WE FIND THAT THE ISSUE UNDER SECTION 10(33) AND 10(15) OF THE ACT ARISING OUT OF THE AFORESAID GROUND HAS BEEN DECIDED BY THE CO ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE PRECEDING ASSESSMENT YEAR I.E., A.Y. 2006 07 AND THE ISSUE OF NOT INCURRING ANY EXPENDITURE ON EARNING DIVIDEND AND TAX FREE INTEREST HAS BEEN DECIDED BY THE TRIBUNAL IN ASSESSMENT YEAR 2009 10 WHEREIN THE TRIBUNAL HAS DECIDED THESE ISSUES IN FAVOUR OF THE ASSESSEE. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) AND ALLOW THE GROUND RAISED BY THE ASSESSEE. 23. GROUN D NO.11, IS EXTRACTED BELOW: I) ERRED IN NOT ALLOWING AMOUNT PAID / PAYABLE BY APPELLANT UNDER VOLUNTARY RETIREMENT SCHEME; II) ERRED IN HOLDING THAT THE VOLUNTARY RETIREMENT SCHEME WAS TO OPERATE ONLY IN FINANCIAL YEAR 1998 99 (A.Y. 1999 2000) ONWARDS; AND III) F URTHER DIRECTED THE A.O. TO RE EXAMINE THE CLAIM OF VRS EXPENSES EVEN THOUGH ALL THE FACTS WERE ON RECORD. 24. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ASSESSING OFFICER HAS GRANTED RELIEF VIDE HIS ORDER DATED 11 HINDUSTAN UNILEVER LTD. 27 TH APRIL 20 04, GIVING EFFECT TO THE ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS). IN THIS VIEW OF THE MATTER, THE LEARNED COUNSEL FOR THE ASSESSEE DID NOT WISH TO PRESS THIS GROUND. CONSEQUENTLY, WE DISMISS THIS GROUND AS NOT PRESSED . 25. GROUND NO.12, IS EXTRAC TED BELOW: I) ERRED IN HOLDING PAYMENT MADE TO SUPPLIER (KWALITY ICE CREAMS) FROM TERMINATION OF ARRANGEMENT FOR PURCHASE OF ICE CREAMS TO BE CAPITAL EXPENDITURE; II) FAILED TO APPRECIATE THAT THE TERMINATION OF AGREEMENT WAS IN THE INTEREST OF BUSINESS OF THE APPELLANT; III) FAILED TO APPRECIATE THAT DUE TO DE RESERVATION OF MANUFACTURE OF ICE CREAMS, THE APPELLANT COULD MANUFACTURE ICE CREAMS AT ITS OWN PLANT AND WAS NOT REQUIRED TO SOURCE ICE CREAMS UNDER THE SOURCING ARRANGEMENT WITH SUPPERS; IV) FAILED TO APPRECI ATE THAT THE APPELLANT DID NOT ACQUIRE ANY CAPITAL ASSET ON TERMINATION OF THE SOURCING AGREEMENT AND HENCE THE PAYMENT IS NOT A CAPITAL EXPENDITURE; AND V) FAILED TO APPRECIATE THAT EXPENDITURE INCURRED TO REMOVE AN OBLIGATION AND TO FACILITATE THE BUSINESS IS A REVENUE EXPENDITURE. 26. HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT IDENTICAL ISSUE HAS BEEN DECIDED BY THE CO ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE PRECEDING ASSESSMENT YEAR I.E., IN A.Y. 2006 07, WHEREIN THE TRIBUNAL HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE 12 HINDUSTAN UNILEVER LTD. LEARNED COMMISSIONER (APPEALS) AND ALLOW THE GROUND RAISED BY THE ASSESSEE . 27. GROUND NO.13, IS EXTRACTED BELOW: I) ERRED IN HOLDING THAT STAMP DUTY PAYMENT INCURRED IN CONNECTION WITH AMALGAMATION OF PONDS INDIA LTD. IS A CAPITAL EXPENDITURE II) FAILED TO APPRECIATE THAT THE AMALGAMATION WAS UNDERTAKEN FOR EFFICIENT CONDUCT OF BUSINESS AND, HENCE THE STAMP DUTY COST WAS REVENUE IN NATURE; THE STAMP DUTY COST DID NOT BRING INTO EXISTENCE ANY CAPITAL ASSET; III) WITHOUT PREJUDICE TO ABOVE, ERRED IN NOT ALLOWING STAMP DUTY IN RESPECT OF CURRENT ASSETS ; IV) FAILED TO APPRECIATE THAT STAMP DUTY PAYMENT ATTRIBUTABLE TO CURRENT ASSETS IS ADDITIONAL COST INCURRED FOR ACQUIRING STOCK IS REVENUE EXPENDITURE; AND V) WITHOUT PREJUDICE TO THE ABOVE, ERRED IN NOT ALLOWING DEPRECIATION ON THE STAMP DUTY ATTRIBUTABLE TO FIXED ASSET. 28. THE RELEVANT FACTS O F THESE GROUNDS ARE, D URING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE PAID STAMP DUTY OF ` 19,89,27,670, IN CONNECTION WITH THE AMALGAMATION OF PONDS INDIA LTD. WITH THE ASSESSEE. THE ASSESSEE CLAIMED THE ABOVE EXPENDITUR E AS REVENUE EXPENDITURE RELYING UPON THE DECISION OF THE HON'BLE SUPREME COURT IN CIT V/S BOMBAY DYING MANUFACTURING CO. LTD., THE HON'BLE SUPREME COURT HAD DEALT WITH THE ISSUE OF PROFESSIONAL CHARGES PAID TO THE FIRM OF SOLICITOR FOR GIVING THE ADVISE R EGARDING AMALGAMATION OF COMPANIES WHICH WAS HELD TO BE TREATED AS 13 HINDUSTAN UNILEVER LTD. REVENUE EXPENDITURE. HOWEVER, HE OBSERVED THAT THE ASSESSEE HAS PAID THE STAMP DUTY ON ACCOUNT OF ACQUISITION OF ON GOING BUSINESS ALONG WITH THE ASSETS AND LIABILITIES BY VIRTUE OF AMALGAM ATION OF COMPANIES WHICH WAS HELD TO BE TREATED AS REVENUE EXPENDITURE. HOWEVER, HE OBSERVED THAT THE ASSESSEE HAS PAID THE STAMP DUTY ON ACCOUNT OF ACQUISITION OF ON GOING BUSINESS ALONG WITH ALL THE ASSETS AND LIABILITIES BY VIRTUE OF AMALGAMATION. THE P AYMENT OF STAMP DUTY IS OF CAPITAL NATURE AS THIS AMALGAMATION HAS NOT ONLY BROUGHT BENEFIT OF ENDURING NATURE OF THE COMPANY, IT HAS MADE THE ADDITION TO THE ASSESSEES SCOPE OF BUSINESS VENTURE. HE FURTHER RELIED UPON SINGLO (I) TEA CO. LTD. V/S CIT, 68 TAXMAN 302 (CAL.) AND GODFERY PHILIPS V/S CIT, 206 ITR 23 (BOM.). AGGRIEVED WITH THE ABOVE ORDER, THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 29. BEFORE THE LEARNED COMMISSIONER (APPEALS), THE ASSESSEE SUBMITTED THAT THE ASSESSEE COMPA NY IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF PERSONAL PRODUCTS AND SPECIAL CHEMICALS. PONDS INDIA LTD. WAS ALSO ENGAGED IN SIMILAR TYPE OF BUSINESS. IN ORDER TO IMPROVE ITS PROFITABILITY BY CONTRIBUTING THEIR RESOURCES, THE TWO COMPANIES DECIDED TO AM ALGAMATE W.E.F. 1 ST JANUARY 1998. IN ORDER TO FACILITATE THE AMALGAMATION, THE ASSESSEE WAS REQUIRED TO PAY STAMP DUTY OF ` 19.89 CRORE. IT WAS FURTHER SUBMITTED THAT THE AMALGA MA TION WAS FOR 14 HINDUSTAN UNILEVER LTD. THE BUSINESS PURPOSE THE EXPENDITURE ON STAMP DUTY WAS INCIDENTA L TO AMALGAMATION. 30. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISION OF THE HON'BLE SUPREME COURT IN BOMBAY DYING MANUFACTURING CO. LTD. (SUPRA). IT WAS ALSO PLEADED THAT AT LEAST THE EXPENDITURE INCURRED ON STAMP DUTY ON CURRENT ASSETS SHOULD BE ALLOWED ALONG WI TH THE DEPRECIATION ON THE ELEMENTS OF STAMP DUTY ATTRIBUTABLE TO FIXED ASSETS. THE LEARNED COMMISSIONER (APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE AMALGAMATION INVOLVED IN ACQUISITION OF ASSETS ON THE TRANSFER OF ASSETS HELD BY PONDS INDIA LTD. WITH THE ASSESSEE. AS THE EXPENDITURE WAS INCURRED IN AMALGAMATION AS A GOING CONCERN WHICH A LONG TERM ENDURING BENEFIT FLOW THE TRANSFER BY WAY OF AMALGA MA TION WAS CLEARLY WITH A VIEW TO INTEGRATE THE TWO BUSINESSES. BY RELYING U PON THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN GODFERY PHILIPS (SUPRA) AND THE DECISIONS OF THE HONBLE ALLAHABAD HIGH COURT IN RAZA BULUND SUGAR V/S CIT, 122 ITR 817 (ALL.) AND RAZA BULUND SUGAR V/S CIT, 123 ITR 24 (ALL.) AND THE DECISIONS O F THE HONBLE CALCUTTA HIGH COURT IN BENGAL AND ASSAM INVESTORS LTD. V/S CIT, 142 ITR 156 (CAL.) AND SINCLE INDIA TEA CO. V/S CIT, 68 TAXMAN 302 (CAL.), THE LEARNED COMMISSIONER (APPEALS) SUSTAINED THE ADDITION MADE BY THE A.O. AGGRIEVED, THE ASSESSEE IS I N APPEAL BEFORE THE TRIBUNAL. 15 HINDUSTAN UNILEVER LTD. 31. AT THE TIME OF HEARING BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE BROUGHT TO OUR NOTICE PAGE 17 OF THE STATEMENT OF FACTS AND MADE THE SUBMISSIONS SIMILAR TO THE SUBMISSIONS WHAT WAS MADE BEFORE THE LEARNED COMMISSIONER (APPEALS). HE RELIED UPON THE CASE LAWS AT PAGE 372 AND 374 OF THE PAPER BOOK. 32. THE LEARNED DEPARTMENTAL AUTHORITIES RELIED UPON THE FINDINGS OF THE LOWER AUTHORITIES. 33. CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE NOTICE THAT THE ASSESSEE PAID STAMP DUTY IN CONNECTION WITH THE AMALGAMATION OF PONDS INDIA LTD. IT IS INCURRED ON ACCOUNT OF ACQUISITION OF ON GOING BUSINESS ALONG WITH ALL ASSETS AND LIA BILITIES BY VIRTUE OF AMALGAMATION. THE ASSETS AND LIABILITIES MAY INCLUDE LONG TERM AS WELL AS CURRENT ASSETS AND LIABILITIES. WE NOTICE THAT THE ASSESSEE CLAIMED THE ABOVE STAMP DUTY AS REVENUE EXPENDITURE BY RELYING ON THE DECISION OF THE HON'BLE SUPREM E COURT IN BOMBAY DYING MANUFACTURING CO. LTD. (SUPRA). HOWEVER, THE TAX AUTHORITIES HAVE ALREADY DISTINGUISHED THE SAME. NO DOUBT, THE EXPENDITURE INCURRED BY THE ASSESSEE ONLY DUE TO AMALGAMATION AND IT IS NECESSARY TO COMPLETE THE REGISTRATION AND OWNER SHIP TRANSFER. THE QUESTION BEFORE US US WHETHER THIS EXPENDITURE CAN BE TREATED AS CAPITAL OR REVENUE. WE NOTICE THAT IN THE SUBSEQUENT ASSESSMENT YEAR , THE LEGISLATURE HAS 16 HINDUSTAN UNILEVER LTD. INTRODUCED SECTION 35DD IN THE FINANCE ACT, 1999, W.E.F. 1 ST APRIL 2000 TO AMORTIS E THE EXPENDITURE IN CASE OF AMALGAMATION OR DEMERGER. THERE IS NO SPECIFIC EXPENDITURE, WHICH WAS DISCLOSED IN THE SECTION. HOWEVER, ANY EXPENDITURE INCURRED IN THE PROCESS OF AMALGAMATION IS INCLUDED. SINCE THERE IS NO AUTHORITY IN THIS ASSESSMENT YEAR T O CLAIM THE AMALGAMATION EXPENDITURE, IN OUR CONSIDERED VIEW, THE STAMP DUTY INC URRED IN REGISTRATION OF ASSETS CAN BE TREATED AS CAPITAL EXPENDITURE WHICH CAN BE INCLUDED IN THE RESPECTIVE ASSETS. SINCE THE ASSESSEE HAS TAKEN OVER LONG TERM AS WELL AS CUR RENT ASSETS AND FURTHER THE LONG TERM OR FIXED ASSETS CONSISTS OF DEPRECIABLE AND NON DEPRECIABLE ASSETS. AS FAR AS NON DEPRECIABLE ASSETS ARE CONCERN, THE REGISTRATION COST CAN BE INCLUDED IN THE COST OF ASSETS WHEREAS THE REGISTRATION COST ON DEPRECIABLE ASSETS, THE ASSESSEE CAN BE ALLOWED TO CLAIM ON THE BASIS OF DEPRECIATION RATES ON THE RESPECTIVE ASSETS CATEGORY. WITH REGARD TO REGISTRATION COST RELATING TO CURRENT ASSETS, SHOULD BE ALLOWED TO CLAIM AS REVENUE EXPENDITURE. THEREFORE, WE RESTORE THIS I SSUE TO THE FILE OF THE ASSESSING OFFICER TO DETERMINE THE REGISTRATION AND ALLOW THE SAME AS PER OUR DIRECTION. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. 34. GROUND NO.14, IS EXTRACTED BELOW: I) ERRED IN HOLDING THAT THE EXPENDITURE INCURRED BY THE APPELLANTS SHARE DEPARTMENT IS CAPITAL EXPENDITURE; 17 HINDUSTAN UNILEVER LTD. II) FAILED TO APPRECIATE THAT THE EXPENDITURE WAS INCURRED FOR ISSUING SHARE CERTIFICATE AND IN CONNECTION WITH EXCHANGE OF SHARES ON AMALGAMATION OF BROOKE BOND LIPTON INDIA LTD., WITH THE APPELLANT; AND III) FAILED TO APPRECIATE THAT THE APPELLANT HAD NOT RAISED ANY CAPITAL DURING THE YEAR BY ISSUE OF SHARES. 35. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ASSESSING OFFICER HAS GRANTED RELIEF VIDE H IS ORDER DATED 20 TH MARCH 2002, PASSED UNDER SECTION 154 OF THE ACT, GRANTING EFFECT TO THE ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS). IN THIS VIEW OF THE MATTER, THE LEARNED COUNSEL FOR THE ASSESSEE DID NOT WISH TO PRESS THIS GROUND. CONSEQUENTLY , WE DISMISS THIS GROUND AS NOT PRESSED . 36. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 2031 /MUM./2004 ASSESSEES APPEAL A.Y. 1998 99 37. GROUND NO.1, RELATES TO FOREIGN TRAVELLING EXPENSES OF WIVES OF SENIOR MANAGERS. 38. AFTER HEARING BOTH THE PARTIES, WE FIND THAT IDENTICAL ISSUE HAS BEEN DECIDED IN AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE BY THE CO ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE PRECEDING ASSESSMENT YEAR I.E., A.Y. 1985 86, 1986 87, 1987 88, 18 HINDUSTAN UNILEVER LTD. 1988 89, 1990 91, 1991 92, 1992 93, 1993 94, 1994 95, 1995 96, 1996 97 AND 1997 98. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) BY DISMISSING THE GROUND RAISED BY THE REVENUE. 39. GRO UND NO.2, RELATES TO DELETION OF DISALLOWANCE UNDER SECTION 40A(9) OF THE ACT I.E., EXPENSES REIMBURSED TO HINDUSTAN LEVER SPORTS CLUB AND TATA SPORTS. 40. BOTH THE PARTIES AGREE BEFORE US THAT IDENTICAL ISSUE HAS BEEN DECIDED AGAINST THE REVENUE AND IN FAVOU R OF THE ASSESSEE BY THE CO ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE PRECEDING ASSESSMENT YEAR I.E., A.Y. 1985 86, 1986 87, 1987 88, 198 8 89 , 198 9 9 0 , 1990 91, 1991 92, 1992 93, 1993 94, 1994 95, 1995 96, 1996 97 AND 1997 98. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) BY DISMISSING THE GROUND RAISED BY THE REVENUE. 41. GROUND NO.3, RELATES TO ISSUE OF EXCLUDING EXCISE DUTY AND SALES TAX COMPONENTS FROM THE TURNOVER FOR THE PUR POSE OF DEDUCTION UNDER SECTION 80HHC OF THE ACT. 42. HEARD BOTH THE PARTIES. WE FIND THAT IDENTICAL ISSUE HAS BEEN DECIDED IN AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE BY THE CO ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE 19 HINDUSTAN UNILEVER LTD. PRECEDING ASSESSMENT YEAR I.E., A.Y. 1986 87, 1987 88, 1988 89, 1989 90, 1990 91, 1991 92, 1992 93, 1993 94, 1994 95, 1995 96, 1996 97 AND 1997 98. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) BY DISMISSING THE GR OUND RAISED BY THE REVENUE. 43. GROUND NO.4, RELATES TO REDUCTION OF 90% OF ROYALTY FROM THE PROFITS AND GAINS OF BUSINESS FOR THE PURPOSE OF DEDUCTION UNDER SECTION 80HHC OF THE ACT. 44. CONSIDERED THE SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL ON RECO RD. WE FIND THAT IDENTICAL ISSUE HAS BEEN DECIDED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE BY THE CO ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE PRECEDING ASSESSMENT YEAR I.E., A.Y. 1995 96, 1996 97 AND 1997 98. CONSISTENT WITH T HE VIEW TAKEN THEREIN, WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) BY DISMISSING THE GROUND RAISED BY THE REVENUE. 45. GROUND NO.5, RELATES TO DELETION OF DISALLOWANCE OF ` 41.92 LAKH TOWARDS ADMINISTRATION AND TRAINING EXPENDITURE ON RURAL DEVE LOPMENT. 46. BOTH THE PARTIES AGREE BEFORE US THAT IDENTICAL ISSUE HAS BEEN DECIDED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE BY THE CO ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE 20 HINDUSTAN UNILEVER LTD. PRECEDING ASSESSMENT YEAR I.E., A.Y. 1989 90, 1990 91, 1991 92, 1992 93, 1993 94, 1996 97 AND 1997 98. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) BY DISMISSING THE GROUND RAISED BY THE REVENUE. 47. GROUND NO.6, RELATES TO THE DIRECTION OF THE LEARNED COMMISSIONER (APPEALS) IN RESTRICTING THE DISALLOWANCE UNDER SECTION 14A OF THE ACT TO 5% INSTEAD OF 10% MADE BY THE ASSESSING OFFICER. 48. CONSIDERED THE SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT IDENTICAL ISSUE HAS BEEN DECIDED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE BY THE CO ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE PRECEDING ASSESSMENT YEAR I.E., A.Y. 2006 07 BY RESTRICTING THE DISALLOWANCE TO 0.5% OF THE EXEMPT INCOME AND IN ASSESSMENT YEAR 2009 10, IT WAS RESTRICTED TO 0.45% WHICH WORKS OUT TO ` 19,75,103. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) FOR THE ASSESSMENT YEAR 2009 10 RESTR ICTING THE DISALLOWANCE @ 0.45% . ACCORDINGLY, THE GROUND RAISED BY THE REVENUE IS DISMISSED. 49. GROUND NO.7, RELATES TO DELETION OF DISALLOWANCE OF RENT PAID TO BOMBAY PORT TRUST. 21 HINDUSTAN UNILEVER LTD. 50. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS MADE PROVISIONS OF ` 702.78 LAKH ON ACCOUNT OF RENT PAYABLE TO BOMBAY PORT TRUST (BPT). IT WAS INFORMED VIDE LETTER DATED 23 RD OCTOBER 2000 TO THE ASSESSING OFFICER THAT THE ASSESSEE HAS MADE PROVISION FOR RENT AS PER LETTER OF BPT . HOWEVER, THE COMPANY HAS MADE PETITION TO B PT FOR REDUCTION / WAIVER IN RENT AND INTEREST. THE ISSUE UNDER CONSIDERATION IS NOT YET DECIDED BY THE BPT. THE ASSESSING OFFICER OBSERVED THAT THIS FACT ITSELF HAS SELF EXPLANATION INASMUCH AS THE LIABILITY ON ACCOUNT OF INCREASED RENT IS CONCERNED, IT I S NOT YET ASCERTAINABLE, THEREFORE, IT IS ONLY A CONTINGENT LIABILITY. ACCORDING TO THE ASSESSING OFFICER, ONLY CRYSTALLIZED AND ASCERTAINABLE LIABILITIES ARE ALLOWABLE UNDER THE INCOME TAX ACT, 1961. ACCORDINGLY, HE DISALLOWED THE SAME. AGGRIEVED, THE ASS ESSEE PREFERRED APPEAL BEFORE THE LEARNED COMMISSIONER (APPEALS). 51. BEFORE THE LEARNED COMMISSIONER (APPEALS), THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS IN OCCUPATION OF LAND BELONGING TO THE BPT UNDER LONG TERM LEASE. EVEN THOUGH THE LEASE TERM HAD EXPIR ED THE COMPANY CONTINUED TO BE IN OCCUPATION OF THE LAND. IT WAS SUBMITTED THAT BPT DEMANDED HIGHER RENTAL FOR RENEWAL OF LEASE WHICH WAS UNDER DISPUTE. SOMETIME IN THE YEAR 1993, THE HON'BLE JURISDICTIONAL HIGH COURT APPROVED THE LETTING RATES AND CONDITI ONS FOR SETTLEMENT OF PROCEEDINGS ON CERTAIN BASIS. IT WAS BROUGHT TO THE KNOWLEDGE OF THE LEARNED COMMISSIONER (APPEALS) THAT THE ASSESSEE 22 HINDUSTAN UNILEVER LTD. HAD PAID ITSELF OF ` 7.02 CRORE TO BPT. FURTHER, IT WAS SUBMITTED THAT THE ASSESSEE HAD PAID OVER ` 18 CRORE TO BPT. THE PROVISIONS MADE BY THE ASSESSEE W ERE B ASED ON THE COMPROMISED FORMULA APPROVED BY THE HONBLE HIGH COURT AND TH E PROVISION MUST BE ALLOWED AS THE ACTUAL RENEWAL OF LEASE NOT YET FINALIZED. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE LEARNED COMMISSIONER (APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE WITH THE FOLLOWING OBSERVATIONS: 20.1 I HAVE CONSIDERED ABOVE FACTS. IN 1993, THE BPT HAD ACCEPTED THE COMPROMISE FORMULA AS HAD BEEN RECOMMENDED BY THE HIGH COURT. IT IS ALSO A FACT THAT ACTUAL RENEWAL OF LEASE HAD NOT TAKEN PLACE. HOWEVER, AS THE PROVISIONS WAS BASED ON THE RENT ACCEPTABLE TO BOTH THE PARTIES THE SAME COULD NOT BE TREATED TO BE IN THE NATURE OF A PROVISION AS HAD BEEN DONE BY THE A.O. THE MANNER IN WHICH THE LEASES ACTED QUA T HE LESSOR I.E., BMC WAS SHOWED THE INTENT OF PARTIES. MOREOVER, THE DEPARTMENT TOO HAD NOT RAISE ANY DOUBT IN ANY YEAR IN THE ASSESSEES OWN CASE. AFTER CONSIDERING THE ENTIRE FACTS, I AM INCLINED TO TAKEN THE VIEW THAT THIS AMOUNT CANNOT BE TAKEN AS CONTI NGENT LIABILITY AND IT WOULD BE THEREFORE DEDUCTIBLE U/S 37(1). THIS GROUND OF APPEAL IS THEREFORE ALLOWED. 52. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE NOTICE THAT THE ASSESSEE HAS OCCUPIED THE LAND BELONGS TO BOMBAY PORT TRUST ON WHICH THE FINAL LEASE RENT WAS NOT FINALIZED. THE RENT WAS DETERMINED BASED ON THE DIRECTIONS OF THE HON'BLE JURISDICTIONAL HIGH COURT. THEREFORE, ON RECORD, WE NOTICE THAT THE BOMBAY PORT TRUST HAS NOT RAISED ANY OBJECTION AND THE ASSESSEE CREATE D THE PROVISION WITH THE EXPECTATION THAT BPT WILL ACCEPT THE PROPOSED RENT BASED ON HONBLE HIGH COURTS DIRECTION. THEREFORE, IT IS 23 HINDUSTAN UNILEVER LTD. PRESUMED THAT THE RENT IS ACCEPTABLE TO THEM AND ONLY ON RECORD IT IS NOT FINALIZED FOR OFFICIAL PURPOSE. THIS GIVES AN IM PRESSION THAT THE RENT IS ASCERTAINABLE EXPENDITURE. THEREFORE, THE PROVISION CREATED BY THE ASSESSEE IS ALLOWABLE EXPENDITURE. IN CASE, THERE IS ANY DEVIATION IN FIXING THE RENT IN THE FUTURE, THE DIFFERENTIAL RENT ALONE CAN BE ACC OUNTED FOR. THEREFORE, W E ARE INCLINED TO ACCEP T THE FINDING OF THE LEARNED CIT(A). ACCORDINGLY, GROUND RAISED BY THE REVENUE IS DISMISSED. 53. IN THE RESULT, REVENUES APPEAL IS DISMISSED. 54. TO SUM UP, ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.06.2021 SD/ - MAHAVIR SINGH VICE PRESIDENT SD/ - S. RIFAUR RAHMAN ACCOUNTANT MEMBER MUMBAI, DATED: 11.06.2021 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI