DY. CIT 7(2)(1), Mumbai V. M/S MAHENDRA CIE AUTOMOTIVE LTD. (FORMELY KNOWN AS MAHINDRA FORGINGS LTD.), Mumbai

ITA 2325/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1228 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 12-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Assessee Lawyers: H P MAHAJANI
• Keywords: Business expenditure; Fair market value; Capital receipt; Capital expenditure
• Section: 37(1); 201; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D , MUMBAI BEFORE SHRI C.N. PRAS AD, HON'BLE JUDICIAL MEMBER SHRI S. RIFAUR RAHMAN, HON'BLE ACCOUNTANT MEMBER ITA NO. 2320, 2321, 2322, 2323, 2324 & 2325 /MUM/201 9 ( A.Y. 2008 - 09, 2009 - 10, 2010 - 11, 2011 - 12, 2012 - 13 & 2013 - 14 ) DCIT CENTRAL CIRCLE 7(2)(1) ROOM N O . 126A, 1 ST FLOOR AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400 020 V. M/S. MAHINDRA CIE AUTOMOTIVE LTD., {FORMERLY KNOWN AS MAHINDRA FORGINGS LTD.,} 1 ST FLOOR, MAHINDRA TOWER P.K. KURNE CHOWK, WORLI MUMBAI 400 018 PAN: AABCM6632J ( A PPELLANT) (RESPONDENT) ASSESSEE BY : SHRI H.P. MAHAJA N I DEPARTMENT BY MS. ASHIMA GUPTA & SHRI BHARAT ANDHLE DATE OF HEARING : 25 .11.2020 DATE OF PRONOUNCEMENT : 08 .12 .2020 O R D E R PER C. N. PRASAD (JM) 1. ALL THESE APPEALS ARE FILED BY THE REVENUE AGAINST DIFFERENT ORDERS OF THE LEARNED COMMI SSIONER OF INCOME TAX (APPEALS) 13, MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] F OR THE A.Y S . 2008 - 09 TO 2013 - 14. 2 ITA NO. 2320 TO 2325 /MUM/2019 (A.Y. 2013 - 14) M/S. MAHINDRA CIE AUTOMOTIVE LTD., 2. THE ON LY COMMON GROUND FOR THE A.Y. 2008 - 09 AND A.Y: 2009 - 10 OF THE REVENUES APPEAL IS IN RESPECT OF DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFIC ER IN RESPECT OF ESOP EXPENSES. 3. REVENUE HAS RAISED FOLLOWING COMMON GROUNDS IN BOTH THESE APPEALS EXCEPT FOR THE FIGURES: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN FACT AND LAW BY ALLOWING ESOP DISCOUNT OF RS.4,62,26,300/ - AS A PERMISSIBLE EXPENSE UNDER SECTION 37(1) OF THE ACT AS THE SAID ESOP EXPENSE, WHICH IS A NOTIONAL EXPENSE, HAS BEEN INCURRED RELATION TO ISSUE OF SHARES TO EMPLOYEES, THEREFORE RESULTING IN AN INCREASE IN CAPITAL WHICH IS NOT AN ALLOWABLE DEDUCTION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED BY NOT CONS IDERING THE DECISION OF THE HON BLE SUPREME COURT IN THE CASES OF PUNJAB STATE INDUSTRIAL DEVELOPMENT CORP. LTD. (1997) 225 ITR 792 (SC) AND BROOKE BOND INDIA LTD. (1997) 225 ITR 798 (SC) WHERE THE HON BLE APEX COURT HAS HELD THAT EXPENDITURE RESULTING IN 'INCREASE IN CAPITAL' IS NOT ALLOWABLE DEDUCTION EVEN IF SUCH EXPENDITURE MAY INCIDENTALLY HELP IN BUSINESS OF THE COMPANY. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A ) HAS ERRED BY NOT APPRECIATING THAT THE INTENTION BEHIND ISSUING ESOPS IS TO ONLY GIVE A 'STAKE' TO THE EMPLOYEES IN THE ORGANIZATION AND THAT HIS DISCOUNT IS NOT INCURRED TOWARDS SATISFACTION OF ANY TRADE LIABILITY AS THE EMPLOYEES HAVE NOT GIVEN UP ANYT HING TO PROCURE SUCH ESOP AND THAT SHARE PREMIUMS OBTAINED ON ISSUE OF SHARES ARE ITEMS OF CAPITAL RECEIPT AND WHEN SUCH PREMIUM IS FORGONE, IT CANNOT BE CLAIMED AS AN 'EXPENDITURE WHOLLY AND EXCLUSIVELY LAID OUT OR EXPENDED FOR THE PURPOSES OF THE TRADE'. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED BY NOT GIVING DUE CONSIDERATION TO THE DECISION OF DELHI TRIBUNAL IN THE CASE OF RANBAXY LABORATORIES LTD VS ACIT [124 TTJ 771 (2009) (DELHI TRIBUNAL) WHERE IT HAS B EEN HELD THAT THE ISSUE OF SHARES AT BELOW MARKET PRICE DOES NOT RESULT INTO INCURRING ANY EXPENDITURE; RATHER IT RESULTS INTO SHORT RECEIPT OF SHARE PREMIUM WHICH THE ASSESSEE WAS OTHERWISE ENTITLED TO AND THE RECEIPT OF SHARE PREMIUM IS NOT TAXABLE AND H ENCE ANY SHORT RECEIPT 3 ITA NO. 2320 TO 2325 /MUM/2019 (A.Y. 2013 - 14) M/S. MAHINDRA CIE AUTOMOTIVE LTD., OF SUCH PREMIUM WILL ONLY BE A NOTIONAL LOSS AND NOT ACTUAL LOSS FOR WHICH NO LIABILITY IS INCURRED AND SUCH NOTIONAL LOSSES ARE NOT ALLOWABLE UNDER THE PROVISIONS OF THE I.T.ACT, 1961. 4. AT THE OUTSET, LEARNED COUNSEL FOR THE ASSESSE E SUBMITTED THAT THIS ISSUE IS COVERED BY THE DECISION OF THE BANGALORE SPECIAL BENCH IN THE CASE OF M/S. BIOCON LIMITED [115 TTJ 649 ] AND THE LD.CIT(A) FOLLOWING THE SPECIAL BENCH DECISION DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER TOWARDS ESOP EXPENSES. 5. LD. DR VEHEMENTLY SUPPORTED THE ORDERS OF THE ASSESSING OFFICER. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSING OFFICER W HILE COMPLETING THE ASSESSMENT DISALLOWED THE EXPENSES INCURRED BY TH E ASSESSEE TOWARDS ESOP STATING THAT THESE EXPENSES ARE ONLY NOTIONAL EXPENSES AND HAVE BEEN INCURRED IN RELATION TO ISSUE OF SHARES TO EMPLOYEES RESULTING IN INCREASE IN CAPITAL AND IS NOT AN ALLOWABLE EXPENSE . ASSESSING OFFICER PLACED RELIANCE ON THE DE CISION OF THE HON'BL E SUPREME COURT IN THE CASE OF PUNJAB STATE INDUSTRIAL DEVELOPMENT CORP LTD., [225 ITR 792] AND BROOK BOND INDIA LTD., [225 ITR 798 ]. HE ALSO PLACED RELIANC E ON THE DECISION OF THE RANBAXY LABORATORIES LTD., V. ACIT O F THE DELHI TRIBUN AL REPORTED IN [124 TTJ 771] AND OF THE OPINION THAT ISSUE OF SHARES BELOW THE MARKET PRICES 4 ITA NO. 2320 TO 2325 /MUM/2019 (A.Y. 2013 - 14) M/S. MAHINDRA CIE AUTOMOTIVE LTD., DOES NOT RESULT INTO INCURRING ANY EXPENDITUR E AND IT IS ONLY NOTIONAL LOSS. THE LD.CIT(A) ALLOWED CLAIM OF THE ASSESSEE FOLLOWING THE DECISION OF THE BANGALORE SPECIAL BENCH IN THE CASE OF BIOCON LIMITED (SUPRA) AND ALSO THE DECISION OF THE MUMBAI BENCHES IN THE CASE OF DCIT V. KOTAK MAHINDRA BANK LTD [89 TAXMANN.COM 223 (MUM)], ACCENTURE SERVICES PVT. LTD., [2010 TIOL 409 ITAT (MUM)] AND THE DEC ISION OF THE HON 'BLE MADRAS HIGH COURT IN THE CASE OF CIT V PVP VENTURES LIMITED AND DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER OBSERVING AS UNDER: - 7.2 DECISION: - I HAVE CONSIDERED THE SUBMISSION MADE BY THE APPELLANT AND THE REASONS RECORDED BY THE AO. I FIND THAT THE ISSUE IS SQUARELY IN FAVOUR OF APPELLANT BY THE DECISI ON OF THE SPECIAL BENCH OF HON' BLE ITAT BANGALORE IN THE CASE OF M/S. BIOCON LTD. VS. DCIT [2013] 155TTJ 649 IN WHICH THE HONOURABLE BENCH HAS DEALT WITH ALL THE REASONS GIVEN BY THE AO FOR MAKING THE DISALLOWANCE AND HAS HELD AS UNDER: - 'SECTION 37(1) OF THE INCOME - TAX ACT, 1961 - BUSINESS EXPENDITURE - ALLOWABILITY OF [DISCOUNT ON ESOP] - ASSESSMENT YEARS 2003 - 04 TO 2007 - 08 - ASSES SEE - COMPANY ISSUED EMPLOYEE'S STOCK OPTION PLAN (ESOP) AND CLAIMED DIFFERENCE BETWEEN MARKET PRICE AND EXERCISE PRICE AS DEDUCTION UNDER SECTION 37(1), SPREAD EQUALLY OVER VESTING PERIOD OF FOUR YEARS, ON BASIS OF SEBI GUIDELINES AND ACCOUNTING PRINCIPLES - ASSESSING OFFICER DISALLOWED SAME, HOLDING IT AS A CONTINGENT LIABILITY OR A SHORT RECEIPT OF SHARE PREMIUM - WHETHER, DISCOUNT ON PREMIUM UNDER ESOP IS SIMPLY A MODE OF COMPENSATING EMPLOYEES FOR THEIR CONTINUED SERVICES TO COMPANY AND IS A PART OF THEIR REMUNERATION, AND CANNOT BE DESCRIBED EITHER AS A SHORT CAPITAL/SHARE PREMIUM RECEIPT OR A CAPITAL EXPENDITURE - HELD, YES - WHETHER, MERE FACT THAT QUANTIFICATION IS NOT PRECISELY POSSIBLE AT TIME OF INCURRING LIABILITY WOULD NOT MAKE AN ASCERTAINED LIAB ILITY A CONTINGENT - HELD, YES - WHETHER, WHERE LIABILITY IN RESPECT OF ESOP IS INCURRED AT END 5 ITA NO. 2320 TO 2325 /MUM/2019 (A.Y. 2013 - 14) M/S. MAHINDRA CIE AUTOMOTIVE LTD., OF EACH YEAR, WHICH IS QUANTIFIED AT END OF VESTING PERIOD WHEN EMPLOYEES BECOME ENTITLED TO EXERCISE OPTIONS, DISCOUNT ON ESOP IS AN ASCERTAINED LIABILITY AND NOT A CONTINGENT LIABILITY - HELD, YES - WHETHER, DISCOUNT ON ESOP BEING A GENERAL EXPENSE, IS AN ALLOWABLE DEDUCTION UNDER SECTION 37(1) DURING YEARS OF VESTING ON BASIS OF PERCENTAGE OF VESTING DURING SUCH PERIOD, SUBJECT TO UPWARD OR DOWNWARD ADJUSTMENT AT TIME OF EXERCISE OF OPTION - HELD, YES [PARA 11.1.6] [IN FAVOUR OF ASSESSEE] FACTS 1. FOR THE ASSESSMENT YEAR 2003 - 04, THE ASSESSEE - COMPANY FLOATED ESOP, UNDER WHICH IT GRANTED OPTION OF SHARES WITH FACE VALUE OF RS. 10 AT THE SAME RATE BY CLAIMING THAT T HE MARKET PRICE OF SUCH SHARES WAS RS. 919, THEREBY CLAIMING THE TOTAL DISCOUNT PER OPTION AT RS. 909. DURING THE PREVIOUS YEAR, THE ASSESSEE - COMPANY GRANTED OPTIONS TO ITS EMPLOYEES. THE DIFFERENCE BETWEEN THE ALLEGED MARKET PRICE AND THE EXERCISE PRICE, AT RS. 909 PER OPTION WAS CLAIMED AS COMPENSATION TO THE EMPLOYEES TO BE SPREAD OVER THE VESTING PERIOD OF FOUR YEARS ON THE STRENGTH OF THE SEBI GUIDELINES AND ACCOUNTING PRINCIPLES. THE ASSESSEE CLAIMED THAT THE EMPLOYEE STOCK OPTION COMPENSATION EXPENSE WAS DEDUCTIBLE UNDER SECTION 37(1). THE AUTHORITIES BELOW DID NOT ACCEPT THE ASSESSEE'S CONTENTION OF THE SUPREMACY OF THE ACCOUNTING PRINCIPLES AND SEBI GUIDELINES FOR THE PURPOSES OF COMPUTATION OF TOTAL INCOME ON GROUND THAT IT WAS A CONTINGENT LIABILI TY. ON REFERENCE TO THE SPECIAL BENCH BY THE DIVISION BENCH, ON QUESTION OF ALLOWABILITY OF DISCOUNT ON ISSUE OF STOCK OPTION AS AN EXPENDITURE UNDER SECTION 37(1). HELD WHETHER DISCOUNT UNDER ESOP IS A SHORT CAPITAL RECEIPT THERE IS NO DOUBT THAT THE AMOUNT OF SHARE PREMIUM IS OTHERWISE A CAPITAL RECEIPT AND, HENCE, NOT CHARGEABLE TO TAX IN THE HANDS OF COMPANY, IF A COMPANY ISSUES SHARES TO THE PUBLIC OR THE EXISTING SHAREHOLDERS AT LESS THAN THE OTHERWISE PREVAILING PREMIUM DUE TO MARKET SENTIMENT OR OTHERWISE, SUCH SHORT RECEIPT OF PREMIUM WOULD BE A CASE OF A RECEIPT OF A LOWER AMOUNT ON CAPITAL ACCOUNT. IT IS SO BECAUSE THE OBJECT OF ISSUING SUCH SHARES AT A LOWER PRICE IS NOWHERE DIRECTLY CONNECTED WITH THE EARNING OF INCOME. IT IS IN SUCH LIKE SI TUATION THAT THE CONTENTION OF THE REVENUE WOULD PROPERLY FIT IN, 6 ITA NO. 2320 TO 2325 /MUM/2019 (A.Y. 2013 - 14) M/S. MAHINDRA CIE AUTOMOTIVE LTD., THEREBY DEBARRING THE COMPANY FROM CLAIMING ANY DEDUCTION TOWARDS DISCOUNTED PREMIUM. [PARA 9.2.6] IT IS QUITE BASIC THAT THE OBJECT OF ISSUING SHARES CAN NEVER BE LOST SIGHT OF. HAVING SEEN THE RATIONALE AND MODUS OPERAND! OF THE ESOP, IT BECOMES OUT - AND - OUT CLEAR THAT WHEN A COMPANY UNDERTAKES TO ISSUE SHARES TO ITS EMPLOYEES AT A DISCOUNTED PREMIUM ON A FUTURE DATE, THE PRIMARY OBJECT OF THIS EXERCISE IS NOT TO RAISE SHARE CAPITAL, BUT TO EARN PROFIT BY SECURING THE CONSISTENT AND CONCENTRATED EFFORTS OF ITS DEDICATED EMPLOYEES DURING THE VESTING PERIOD. SUCH DISCOUNT IS CONSTRUED, BOTH BY THE EMPLOYEES AND COMPANY, AS NOTHING BUT A PART OF PACKAGE OF REMUNERATION. IN OTHER WORDS, SUCH DISC OUNTED PREMIUM ON SHARES IS A SUBSTITUTE TO GIVING DIRECT INCENTIVE IN CASH FOR AVAILING THE SERVICES OF THE EMPLOYEES. THERE IS NO DIFFERENCE IN TWO SITUATIONS VIZ., ONE, WHEN THE COMPANY ISSUES SHARES TO PUBLIC AT MARKET PRICE AND A PART OF THE PREMIUM I S GIVEN TO THE EMPLOYEES IN LIEU OF THEIR SERVICES AND TWO, WHEN THE SHARES ARE DIRECTLY ISSUED TO EMPLOYEES AT A REDUCED RATE. IN BOTH THE SITUATIONS, THE EMPLOYEES STAND COMPENSATED FOR THEIR EFFORT. IT FOLLOWS THAT THE DISCOUNT ON PREMIUM UNDER ESOP IS SIMPLY ONE OF THE MODES OF COMPENSATING THE EMPLOYEES FOR THEIR SERVICES AND IS A PART OF THEIR REMUNERATION. THUS, THE CONTENTION OF THE REVENUE THAT BY ISSUING SHARES TO EMPLOYEES AT A DISCOUNTED PREMIUM, THE COMPANY GOT A LOWER CAPITAL RECEIPT, IS BEREF T OF ANY FORCE. BY NO STRETCH OF IMAGINATION, SUCH DISCOUNT CAN BE DESCRIBED AS EITHER A SHORT CAPITAL RECEIPT OR A CAPITAL EXPENDITURE. IT IS NOTHING BUT THE EMPLOYEES COST INCURRED BY THE COMPANY. [9.2.6] THE REVENUE ALSO CANVASSED A VIEW THAT AN EXPENDI TURE DENOTES 'PAYING OUT OR AWAY' AND UNLESS THE MONEY GOES OUT FROM THE ASSESSEE, THERE CAN BE NO EXPENDITURE SO AS TO QUALIFY FOR DEDUCTION UNDER SECTION 37, SECTION 37(1) PROVIDES THAT AN EXPENDITURE MUST BE LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY F OR THE PURPOSE OF BUSINESS SO AS TO BE ELIGIBLE FOR DEDUCTION. THERE IS ABSOLUTELY NO DOUBT THAT SECTION 37(1) TALKS OF GRANTING DEDUCTION FOR AN 'EXPENDITURE'. HOWEVER, IT IS PERTINENT TO NOTE THAT THIS SECTION DOES NOT RESTRICT PAYING OUT OF EXPENDITURE IN CASH ALONE. WHEN THE DEFINITION OF THE WORD 'PAID' UNDER SECTION 43(2) IS READ IN JUXTAPOSITION TO SECTION 37(1), THE POSITION WHICH EMERGES IS THAT IT IS NOT ONLY PAYING OF EXPENDITURE, BUT ALSO INCURRING OF THE EXPENDITURE WHICH ENTAILS DEDUCTION UNDE R SECTION 37(1) SUBJECT TO THE FULFILMENT OF OTHER CONDITIONS. THEREFORE, BY UNDERTAKING TO ISSUE SHARES AT DISCOUNTED PREMIUM, THE COMPANY DOES NOT PAY ANYTHING TO ITS EMPLOYEES, BUT INCURS OBLIGATION OF ISSUING SHARES AT A DISCOUNTED PRICE ON A FUTURE DA TE IN LIEU OF THEIR SERVICES, WHICH IS NOTHING BUT AN EXPENDITURE UNDER SECTION 37(1). [PARA 9.2.7] 7 ITA NO. 2320 TO 2325 /MUM/2019 (A.Y. 2013 - 14) M/S. MAHINDRA CIE AUTOMOTIVE LTD., WHETHER DISCOUNT IS A CONTINGENT LIABILITY IT IS A TRITE LAW THAT DEDUCTION IS PERMISSIBLE IN RESPECT OF AN ASCERTAINED LIABILITY AND NOT A CONTINGENT LIABI LITY. FROM THE STAND POINT OF THE COMPANY, THE OPTIONS UNDER ESOP VEST WITH THE EMPLOYEES AT THE RATE OF 25 PER CENT ONLY ON PUTTING IN SERVICE FOR ONE YEAR BY THE EMPLOYEES. UNLESS SUCH SERVICE IS RENDERED, THE EMPLOYEES DO NOT QUALIFY FOR SUCH OPTIONS. I N OTHER WORDS, RENDERING OF SERVICE FOR ONE YEAR IS SINE QUA NON FOR BECOMING ELIGIBLE TO AVAIL THE BENEFIT UNDER THE SCHEME. ONCE THE SERVICE IS RENDERED FOR ONE YEAR, IT BECOMES OBLIGATORY ON THE PART OF THE COMPANY TO HONOUR ITS COMMITMENT OF ALLOWING T HE VESTING OF 25 PER CENT OF THE OPTION. IT IS AT THE END OF THE FIRST YEAR THAT THE COMPANY INCURS LIABILITY OF FULFILLING ITS PROMISE OF ALLOWING PROPORTIONATE DISCOUNT, WHICH LIABILITY WOULD ACTUALLY BE DISCHARGED AT THE END OF THE FOURTH YEAR WHEN THE OPTIONS ARE EXERCISED BY THE EMPLOYEES. [PARA 9.3.2] THE PRINCIPLE LAID DOWN IN THE CASE OF BHARAT EARTH MOVERS V. CIT [20001 245 ITR 428/112 TAXMAN 61 (SC) WAS THAT A LIABILITY DEFINITELY INCURRED BY AN ASSESSEE IS DEDUCTIBLE NOTWITHSTANDING THE FACT THAT ITS QUANTIFICATION MAY TAKE PLACE IN A LATER YEAR. THE MERE FACT THAT THE QUANTIFICATION IS NOT PRECISELY POSSIBLE AT THE TIME OF INCURRING THE LIABILITY WOULD NOT MAKE AN ASCERTAINED LIABILITY A CONTINGENT. ALMOST TO THE SIMILAR EFFECT IS THE JUDGMENT OF THE SUPREME COURT IN THE CASE ROTORK CONTROLS INDIA (P.) LTD, V. CIT [20091 314 ITR 62/180 TAXMAN 422. [PARAS 9.3.3 AND 9.3.4] CONSIDERING THE FACTS OF THE PRESENT CASE IN THE BACKDROP OF THE RATIO LAID DOWN BY THE SUPREME COURT IN BHARAT EARTH MOVERS (SU PRA) AND ROTORK CONTROLS INDIA (P.) LTD. (SUPRA), IT BECOMES VIVID THAT THE MANDATE OF THESE CASES IS APPLICABLE WITH FULL FORCE TO THE DEDUCTIBILITY OF THE DISCOUNT ON INCURRING OF LIABILITY ON THE RENDITION OF SERVICE BY THE EMPLOYEES. THE FACTUM OF THE EMPLOYEES BECOMING ENTITLED TO EXERCISE OPTIONS AT THE END OF THE VESTING PERIOD AND IT IS ONLY THEN THAT THE ACTUAL AMOUNT OF DISCOUNT WOULD BE DETERMINED, IS AKIN TO THE QUANTIFICATION OF THE PRECISE LIABILITY TAKING PLACE AT A FUTURE DATE, THEREBY NOT D ISTURBING THE OTHERWISE LIABILITY WHICH STOOD INCURRED AT THE END OF EACH YEAR ON AVAILING THE SERVICES. IT IS, THEREFORE, HELD THAT THE DISCOUNT IN RELATION TO OPTIONS VESTING DURING THE YEAR CANNOT BE HELD AS A CONTINGENT LIABILITY. [PARAS 9.3.5 AND 9.3. 6] WHETHER DEDUCTION IS ALLOWABLE ALSO, IT IS DISCERNIBLE FROM THE ABOVE PROVISIONS OF FRINGE BENEFIT TAX THAT THE LEGISLATURE ITSELF CONTEMPLATES THE DISCOUNT ON PREMIUM UNDER ESOP AS A BENEFIT PROVIDED BY THE EMPLOYER TO ITS EMPLOYEES DURING THE COURSE O F SERVICE. IF THE LEGISLATURE CONSIDERS SUCH 8 ITA NO. 2320 TO 2325 /MUM/2019 (A.Y. 2013 - 14) M/S. MAHINDRA CIE AUTOMOTIVE LTD., DISCOUNTED PREMIUM TO THE EMPLOYEES AS A FRINGE BENEFIT OR 'ANY CONSIDERATION FOR EMPLOYMENT', IT IS NOT OPEN TO ARGUE CONTRARY. ONCE IT IS HELD AS A CONSIDERATION FOR EMPLOYMENT, THE NATURAL COROLLARY WHICH FOL LOWS IS THAT SUCH DISCOUNT I) IS AN EXPENDITURE; II) SUCH EXPENDITURE IS ON ACCOUNT OF AN ASCERTAINED (NOT CONTINGENT) LIABILITY; AND III) IT CANNOT BE TREATED AS A SHORT CAPITAL RECEIPT. THEREFORE, DISCOUNT ON SHARES UNDER THE ESOP IS AN ALLOWABLE DEDUCTI ON. [PARA 9.4.1] QUANTUM OF DEDUCTION AN EMPLOYEE BECOMES ENTITLED TO THE SHARES AT A DISCOUNTED PREMIUM OVER THE VESTING PERIOD DEPENDING UPON THE LENGTH OF SERVICE PROVIDED BY HIM TO THE COMPANY. IN ALL SUCH SCHEMES, IT IS AT THE END OF THE VESTING PERIOD THAT OPTION IS EXERCISABLE ALBEIT THE PROPORTIONATE RIGHT TO OPTION IS ACQUIRED BY RENDERING SERVICE AT THE END OF EACH YEAR. [PARA 10.3] SIMILAR IS THE POSITION FROM THE STAND POINT OF THE COMPANY. AN OBLIGATION FALLS UPON THE COMPANY TO ALLOT SHARES AT THE TIME OF EXERCISE OF OPTION DEPENDING UPON THE LENGTH OF SERVICE RENDERED BY THE EMPLOYEE DURING THE VESTING PERIOD. THE INCURRING OF LIABILITY TOWARDS THE DISCOUNTED PREMIUM, BEING COMPENSATION TO EMPLOYEE, IS DIRECTLY LINKED WITH THE SPAN OF SERVICE PUT IN BY THE EMPLOYEE. IT, THEREFORE, TRANSPIRES THAT A COMPANY, UNDER THE MERCANTILE SYSTEM CAN LAWFULLY CLAIM DEDUCTION FOR TOTAL DISCOUNTED PREMIUM REPRESENTING THE EMPLOYEES COST OVER THE VESTING PERIOD AT THE RATE AT WHICH THERE IS VESTING O F OPTIONS IN THE EMPLOYEES. [PARA 10.4] THEREFORE, IT IS APPARENT THAT THE COMPANY INCURS LIABILITY TO ISSUE SHARES AT THE DISCOUNTED PREMIUM ONLY DURING THE VESTING PERIOD. THE LIABILITY IS NEITHER INCURRED AT THE STAGE OF THE GRANT OF OPTIONS NOR WHEN SU CH OPTIONS ARE EXERCISED. [PARA 10.5] CONSIDERING THE QUESTIONS OF 'WHEN' AND 'HOW MUCH 1 OF DEDUCTION FOR DISCOUNT ON OPTIONS IS TO BE GRANTED, IT IS HELD THAT THE LIABILITY TO PAY THE DISCOUNTED PREMIUM IS INCURRED DURING THE VESTING PERIOD AND THE AMOUNT OF SUCH DEDUCTION IS TO BE FOUND OUT AS PER THE TERMS OF THE ESOP SCHEME BY CONSIDERING THE PERIOD AND PERCENTAGE OF VESTING DURING SUCH PERIOD. THEREFORE, DEDUCTION OF THE DISCOUNTED PREMIUM IS TO BE ALLOWED DURING THE YEARS OF VESTING ON A STRAIGHT LINE BASIS. [PARA 10.8] SUBSEQUENT ADJUSTMENT TO DISCOUNT REGARDING THE ADJUSTMENT OF DISCOUNT WHEN THE OPTIONS REMAIN UNVESTED OR LAPSE AT THE END OF THE EXERCISE PERIOD, IT IS BUT NATURAL THAT THERE IS NO EMPLOYEE COST TO THAT EXTENT AND, HENCE, THERE CAN 9 ITA NO. 2320 TO 2325 /MUM/2019 (A.Y. 2013 - 14) M/S. MAHINDRA CIE AUTOMOTIVE LTD., BE NO DEDUCTION OF DISCOUNT QUA SUCH PART OF UNVESTED OR LAPSING OPTIONS. BUT, AS THE AMOUNT WAS CLAIMED AS DEDUCTION BY THE COMPANY DURING THE PERIOD STARTING WITH THE DATE OF GRANT TILL THE HAPPENING OF THIS EVENT, SUCH DISCOUNT NEEDS TO BE REVERSED AND TA KEN AS INCOME. IT IS SO BECAUSE LOGICALLY WHEN THE OPTIONS HAVE NOT EVENTUALLY VESTED IN THE EMPLOYEES, TO THAT EXTENT, THE COMPANY HAS INCURRED NO EMPLOYEE COST. AND IF THERE IS NO COST TO THE COMPANY, THE TENTATIVE AMOUNT OF DEDUCTION EARLIER CLAIMED ON THE BASIS OF THE MARKET PRICE AT THE TIME OF GRANT OF OPTION CEASES TO BE ADMISSIBLE AND, HENCE, NEEDS TO BE REVERSED. [PARA 11.1.3] THE SECOND SITUATION IS WHEN THE OPTIONS ARE EXERCISED BY THE EMPLOYEES AFTER PUTTING IN SERVICE DURING THE VESTING PERIOD. IN SUCH A SCENARIO, THE ACTUAL AMOUNT OF REMUNERATION TO THE EMPLOYEES WOULD BE ONLY THE AMOUNT OF ACTUAL DISCOUNTED PREMIUM AT THE TIME OF EXERCISE OF OPTION. THE SUPREME COURT IN THE CASE OF C/TV. INFOSYS TECHNOLOGIES LTD. [20081 297 ITR 167/116 TAXMAN 204 HELD THAT THE ALLOTMENT OF SHARES TO EMPLOYEES UNDER ESOP, SUBJECT TO A LOCK IN PERIOD OF FIVE YEARS AND OTHER CONDITIONS COULD NOT BE TREATED AS A PERQUISITE AS THERE WAS NO BENEFIT AND THE VALUE OF BENEFIT, IF ANY, WAS UNASCERTAINABLE AT THE TIME WHE N OPTIONS WERE EXERCISED. [PARA 11.1.4] FROM THE PROVISIONS OF SECTION 17(2), TWO THINGS SURFACE. FIRST, THAT THE PERQUISITE ARISES ON THE 'ALLOTMENT' OF SHARES AND SECOND, THE VALUE OF SUCH PERQUISITE IS TO BE COMPUTED BY CONSIDERING THE FAIR MARKET VALUE OF THE SHARES ON 'THE DATE ON WHICH THE OPTION IS EXERCISED BY THE ASSESSEE AS REDUCED BY THE AMOUNT ACTUALLY PAID. THE POSITION THAT SUCH AMOUNT WAS OR WAS NOT TAXABLE DURING SOME OF THE YEARS IN THE HANDS OF THE EMPLOYEES IS NOT RELEVANT IN CONSIDERING THE OCCASION AND THE AMOUNT OF BENEFIT ACCRUING TO THE EMPLOYEE UNDER ESOP, ANY EXEMPTION OR THE DEDUCTIBILITY OF AN ALLOWANCE OR BENEFIT TO EMPLOYEE FROM TAXATION DOES NOT OBLITERATE THE BENEFIT ITSELF. IT SIMPLY MEANS THAT THE BENEFIT ACCRUED TO THE ASSE SSEE BUT THE SAME DID NOT ATTRACT TAX. THE POSITION HAS NOW BEEN CLARIFIED BEYOND DOUBT BY THE LEGISLATURE THAT THE ESOP DISCOUNT, WHICH IS NOTHING BUT THE REWARD FOR SERVICES, IS A TAXABLE PERQUISITE TO THE EMPLOYEE AT THE TIME OF EXERCISE OF OPTION, AND ITS VALUATION IS TO BE DONE BY CONSIDERING THE FAIR MARKET VALUE OF THE SHARES ON THE DATE ON WHICH THE OPTION IS EXERCISED. [PARA 11.1.4] IT IS PALPABLE THAT SINCE THE REMUNERATION TO THE EMPLOYEES UNDER THE ESOP IS THE AMOUNT OF DISCOUNT WITH RESPECT TO THE MARKET PRICE OF SHARES AT THE TIME OF EXERCISE OF OPTION, THE EMPLOYEE COST IN THE HANDS OF THE COMPANY SHOULD ALSO BE WITH RESPECT TO THE SAME BASE. [PARA 11.1.5] 10 ITA NO. 2320 TO 2325 /MUM/2019 (A.Y. 2013 - 14) M/S. MAHINDRA CIE AUTOMOTIVE LTD., THE AMOUNT OF DISCOUNT AT THE STAGE OF GRANTING OF OPTIONS WITH RESPECT TO THE MARKET PR ICE OF SHARES AT THE TIME OF GRANT OF OPTIONS IS ALWAYS A TENTATIVE EMPLOYEE COST BECAUSE OF THE IMPOSSIBILITY IN CORRECTLY VISUALIZING THE LIKELY MARKET PRICE OF SHARES AT THE TIME OF EXERCISE OF OPTION BY THE EMPLOYEES, WHICH, IN TURN, WOULD REFLECT THE CORRECT EMPLOYEES COST. SINCE THE DEFINITE LIABILITY IS INCURRED DURING THE VESTING PERIOD, IT HAS TO BE QUANTIFIED ON SOME LOGICAL BASIS. IT IS THIS MARKET PRICE AT THE TIME OF THE GRANT OF OPTIONS WHICH IS CONSIDERED FOR WORKING OUT THE AMOUNT OF DISCOUN T DURING THE VESTING PERIOD. BUT, SINCE ACTUAL AMOUNT OF EMPLOYEE COST CAN BE PRECISELY DETERMINED ONLY AT THE TIME OF THE EXERCISE OF OPTION BY THE EMPLOYEES, THE PROVISIONAL AMOUNT OF DISCOUNT AVAILED AS DEDUCTION DURING THE VESTING PERIOD NEEDS TO BE AD JUSTED IN THE LIGHT OF THE ACTUAL DISCOUNT ON THE BASIS OF THE MARKET PRICE OF THE SHARES AT THE TIME OF EXERCISE OF OPTIONS. [PARA 11.1.6] TAXATION VIS - A - VIS ACCOUNTING PRINCIPLES THE SUBMISSIONS PUT FORTH BY THE ASSESSEE THAT, IN THE ABSENCE OF ANY SPECI FIC PROVISION IN THE ACT, THE ACCOUNTING PRINCIPLES SHOULD BE FOLLOWED FOR DETERMINING THE TOTAL INCOME OF THE ASSESSEE ARE NOT ACCEPTABLE. WHAT IS TRUE FOR ACCOUNTING PURPOSE NEED NOT NECESSARILY BE TRUE FOR TAXATION. TAX ATION PRINCIPLES ARE ENSHRINED IN THE LEGISLATURE. POWER TO LEGISLATE LIES WITH THE PARLIAMENT. ACCOUNTING STANDARDS OR GUI DANCE NOTE OR GUIDELINES ETC., ISSUED BY ANY AUTONOMOUS OR EVEN STATUTORY BODIES INCLUDING THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA, OR THE SEBI ARE MEANT ONLY TO PRESCRIBE THE WAY IN WHICH THE TRANSACTIONS SHOULD BE RECORDED IN BOOKS OR REFLECTED IN THE ANNUAL ACCOUNTS. THESE GUIDELINES DO NOT HAVE THE FORCE OF AN ACT OF PARLIAMENT. SINCE THE SUBJECT MATTER OF TAX ON INCOME FALLS IN THE UNION LIS T AS PER PART X I OF THE INDIAN CONSTITUTION, IT IS ONLY THE PARLIAMENT WHICH CAN LEGISLATE ON ITS SCOPE. [PARA 11.2.3]' IN VIEW OF THE DECISION QUOTED ABOVE AND THE DECISIONS OF JURISDICTIONAL TRIBUNAL IN THE CASE OF DCIT VS. KOTAK MAHINDRA BANK LTD [2018] 89 TAXMANN.CO M 223 (MUMBAI - TRIB), ACCENTURE SERVICES PRIVATE LTD [2010 TIOL 409 ITAT MUMBAI] AND HON BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. PVP VENTURES LIMITED (TC(A) NO. 1023 OF 02005 DATED 19 JUNE 2012 AND OTHER DECISIONS QUOTED BY THE APPELLANT DISALLOWANCE O F RS. 4,62,26,300/ - MADE BY THE AO IS DIRECTED TO BE DELETED. THIS GROUND OF APPEAL THEREFORE IS ALLOWED. 11 ITA NO. 2320 TO 2325 /MUM/2019 (A.Y. 2013 - 14) M/S. MAHINDRA CIE AUTOMOTIVE LTD., 7. ON READING OF THE ORDER OF THE LD.CIT(A) WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD.CIT(A). THUS , THE GROUNDS RAISE D BY THE REVENUE ARE DISMISSED. 8. THE ONLY COMMON GROUND IN THE APPEALS OF THE REVENUE FO R A.Y. 2010 - 11 TO A.Y. 2013 - 14 IS IN RESPECT O F DISALLOWANCE OF INTEREST U/S.36(1)(III) OF THE ACT. 9. THE REVENUE HAS RAISED FOLLOWING COMMON GROUNDS IN ALL THESE APPEALS EXCEPT FOR THE FIGURES: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN FACT AND LAW IN HOLDING THAT THE AO HAS NOT ESTABLISHED ANY NEXUS BETWEEN BORROWED FUNDS AND CAPITAL WORK IN PROGRE SS AND HENCE ERRED IN DIRECTING THE AO TO DELETE THE ADDITION OF RS.6,81,00,000/ - UNDER SECTION 36(L)(III) WHICH WAS MADE BY THE AO TO THE CLOSING WORK IN PROGRESS OUT OF THE INTEREST COST CLAIMED AS REVENUE EXPENSE BY THE ASSESSEE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED BY NOT APPRECIATING THE VERY CLEAR FINDING BROUGHT ON RECORD BY THE AO THAT THERE WAS ALWAYS A NEGATIVE BALANCE IN THE BANK ACCOUNT OF THE ASSESSEE ON THE BASIS OF WHICH IT WAS CONCLUDED TH AT WHENEVER THERE WAS A WITHDRAWAL OF FUNDS FOR ADDITION TO CLOSING WORK IN PROGRESS, THE ASSESSEE USED LOAN FUNDS WHICH CLEARLY ESTABLISHED THAT THERE WAS A NEXUS BETWEEN THE BORROWED FUNDS AND CAPITAL WORK IN PROGRESS. 10. LD. COUNSEL FOR THE ASSESSEE AT TH E OUTSET SUBMITTED THAT THE ISSUE IN APPEAL S IS SQUARELY COVERED BY THE DE CISION OF THE COORDINATE BENCH IN ASSESSEES OWN CASE FOR THE A.Y. 2014 - 15 IN ITA.NO. 3121/MUM/2018 12 ITA NO. 2320 TO 2325 /MUM/2019 (A.Y. 2013 - 14) M/S. MAHINDRA CIE AUTOMOTIVE LTD., DATED 21.11.2019, WHEREIN AN IDENTICAL ISSUE CAME UP FOR CONSIDERATION AND THE TRIBUNAL UPHELD THE ORDER OF THE LD.CIT(A). IT HAS BEEN HELD THAT THE ASSESSEE H A S OWN FUNDS IN THE FOR M OF SHARE CAPITAL AND RESERVES OTHER THAN MONEYS UTILIZED IN CAPITAL WORK - IN - PROGRESS ON VARIOUS OTHER ENTITIES , THUS NO D ISALLOWANCE IS WARRANTED. 11. LD. DR FAIRLY SUBMITTED THAT THE ISSUE IS DECIDED IN FAVOUR OF T HE ASSESSEE IN THE A.Y. 201 - 15. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW. ON A PERUSAL OF THE ORD ER OF THE TRIBUNAL FOR THE A. Y. 2014 - 15 WE NOTICE THAT THE TRIBUNAL UPHELD THE ORDER OF THE LD.CIT(A) IN DELETING THE DISALLOWANCE MADE U/S. 36(1)(III) OF THE ACT AS THE ASSESSEE HAD SUFFICIENT OWN FUNDS IN THE FORM OF SHARE CAPITAL AND RESERVES, OBSERVING AS UNDER: 4. IN THE APPELLA TE PROCEEDINGS, LD.CIT(A) ALLOWED THIS ISSUE AFTER TAKING INTO CONSIDERATION OF SUBMISSIONS AND CONTENTIONS AS RAISED DURING THE COURSE OF APPELLATE PROCEEDINGS BY OBSERVING AND HOLDING AS UNDER: - 4.2 I HAVE EXAMINED THE SUBMISSION MADE BY THE APPELLANT AND THE REASONS RECORDED BY THE AO. I AM IN AGREEMENT WITH THE SUBMISSION OF THE APPELLANT THAT THE AO SHOULD HAVE EXAMINED THE STANDALONE ACCOUNTS OF THE MERGED ENTITIES BEFORE DRAWING ANY ADVERSE INFERENCE. IF WE EXAMINE THE STANDALONE ACCOUNTS WE FIND T HAT CAPITAL WORK IN PROGRESS OF MCIE IS 13 ITA NO. 2320 TO 2325 /MUM/2019 (A.Y. 2013 - 14) M/S. MAHINDRA CIE AUTOMOTIVE LTD., RS.11,79,64,135 AND OWN FUNDS OF THIS ENTITY IN FORM OF SHARE CAPITAL AND RESERVE ARE RS.931,51,30,000. SIMILARLY, CAPITAL WORK IN PROGRESS OF MCL IS RS.91,95,418 AND OWN FUNDS OF THIS ENTITY IN FORM OF SHARE CAPITAL AND RESERVES ARE RS.15,42,05,700. CAPITAL WORK IN PROGRESS OF MHIL IS RS.1,20,36,692 AND OWN FUNDS OF THIS ENTITY IN FORM OF SHARE CAPITAL AND RESERVES ARE RS.154,20,10,000 AND CAPITAL WORK IN PROGRESS OF MUSCO IS RS.6,42,23,223 AND OWN FUNDS OF THIS ENTI TY IN FORM OF SHARE CAPITAL AND RESERVES ARE RS.357,65,00,000. MUSCO HAS NO BORROWED FUNDS. THUS, IT CAN BE SEEN THAT INTEREST - FREE FUNDS ARE AVAILABLE WITH THESE COMPANIES IN FORM OF SHARE CAPITAL AND RESERVES ARE MUCH MORE THAN THE CAPITAL WORK IN PROGRE SS. LOOKING TO THIS FACT AND THE FACT THAT FUNDS FOR CAPITAL WORK IN PROGRESS HAVE BEEN PAID OUT OF A COMMON ACCOUNT IN WHICH ALL RECEIPTS ARE ALSO CREDITED, I AM OF THE OPINION THAT NO PART OF INTEREST CAN BE DISALLOWED. ACCORDINGLY, DISALLOWANCE OF INTER EST AMOUNTING TO RS.1,77,00,000 AND ADDITION OF THE SAME TO THE WORK IN PROGRESS IS DIRECTED TO BE DELETED. RELIANCE IN THIS REGARD IS PLACED ON THE DECISIONS OF THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT VS. RELIANCE UTILITIES & POWER LTD (2009) 313 ITR 340 (BOM) AND IN THE CASE OF CIT VS.HDFC BANK LTD (IT APPEAL NO.330 OF 2012) AND ALSO HON'BLE SUPREME COURT DECISION IN THE CASE OF MUNJAL SALES CORPORATION VS. ANOTHER (2008) 298 ITR 298(SC), ITAT MUMBAI IN THE CASE OF SHRENUJ & CO. LTD A.Y. 2006 - 07 (IN ITA NO.8189/MUM/2010 AND A.Y. 2007 - 08 (IN ITA NO.7948/MUM/2011) AND ITAT, DELHI IN THE CASE OF LAKHANI INIDA LTD., A.Y. 2006 - 07 (ITA NO.2057/DELHI/2011) 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD, WE OBSERVE THAT THE A SSESSEE HAS SUFFICIENT FUNDS IN THE FORM OF SHARE CAPITAL AND RESERVES. LD.CIT(A) NOTED THAT IN THE CASE OF MCIE , CWIP WAS RS.11,79,64,135 AND OWN FUNDS OF THIS ENTITY IN FORM OF SHARE CAPITAL AND RESERVES WERE RS.931,51,30,000. IN MCL, CWIP WAS RS.91,95, 418 AND OWN FUNDS OF THIS ENTITY IN FORM OF SHARE CAPITAL AND RESERVES WERE RS.15,42,05,700. SIMILARLY, CWIP IN MHIL WAS RS.1,20,36,692 AND OWN FUNDS OF THIS ENTITY IN FORM OF SHARE CAPITAL AND RESERVES WERE 14 ITA NO. 2320 TO 2325 /MUM/2019 (A.Y. 2013 - 14) M/S. MAHINDRA CIE AUTOMOTIVE LTD., RS.154,20,10,000. WE FIND THAT CLEAR CUT FINDING S HAVE BEEN RECORDED BY THE LD.CIT(A) AND CAME TO A CONCLUSION THAT NO INTEREST DISALLOWANCE CAN BE MADE AS THE FUNDS USED FOR WORK IN PROGRESS H AS BEEN PAID OUT OF OWN SOURCES . LD.CIT(A) WHILE DELETING THE ADDITION RELIED ON THE DECISIONS OF HON'BLE JURIS DICTIONAL HIGH COURT IN CIT VS. RELIANCE UTILITIES & POWER LTD (2009) 313 ITR 340 (BOM) AND IN THE CASE OF CIT VS. HDFC BANK LTD (IT APPEAL NO.330 OF 2012) AND ALSO HON'BLE SUPREME COURT DECISION IN THE CASE OF MUNJAL SALES CORPORATION VS. ANOTHER (2008) 2 98 ITR 298(SC) AND OTHER VARIOUS ITAT DECISIONS. WE FIND THAT THE LD.CIT(A) HAS PASSED A SPEAKING AND REASONABLE ORDER WHILE RELYING ON THE VARIOUS DECISIONS AS CITED SUPRA AND ACCORDINGLY, WE ARE INCLINED TO UPHOLD THE SAME BY DISMISSING THE GROUNDS OF TH E REVENUE RELATING TO DELETION OF DISALLOWANCE U/S.36(1)(III) OF THE ACT. 13. FOR A.Y. 2010 - 11 THE LD.CIT(A) DELETED THE DISALLOWANCE FOR THE REASON THAT THE ASSESSEE HAS SHARE CAPITAL AND RESERVES MUCH MORE THAN THE CAPITAL WORK - IN - PROGRESS AND IT IS THE FIN DING OF THE LD.CIT(A) THAT NO NEXUS BETWEEN BORROWED FUNDS AND CAPITAL WORK - IN - PROGRESS HAS BEEN ESTABLISHE D BY THE ASSESSING OFFICER AND T HEREFORE LD.CIT(A) HELD THAT NO PART OF INTEREST CAN BE DISALLOWED. HE ALSO PLACED RELIANCE ON THE DECISION OF THE H ON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT V . RELIANCE UTILITIES & POWER LTD., [313 ITR 340] AND CIT V. HDFC BANK LTD., (IT APPEAL NO. 330 OF 2012). THESE FINDINGS OF THE LD.CIT(A) COULD NOT BE REBUTTED BY THE REVENUE WITH EVIDENCES. IN THE CIRCUMSTANCE S, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD.CIT(A) FOR A.Y. 2010 - 11. 15 ITA NO. 2320 TO 2325 /MUM/2019 (A.Y. 2013 - 14) M/S. MAHINDRA CIE AUTOMOTIVE LTD., 14. FACTS BEING IDENTICAL, FOR THE A.Y. 2011 - 12 TO A.Y. 2013 - 14 WE UPHOLD THE ORDERS OF THE LD.CIT(A) FOR ALL THESE ASSESSMENT YEARS AND REJECT THE GROUNDS RAISED BY THE REV ENUE. 15. IN THE RESULT, APPEALS OF THE REVENUE FOR A.Y. 2010 - 11 TO A.Y.2013 - 14 ARE DISMISSED. ORDER PRONOUNCED ON 08 . 12 .2020 AS PER RULE 34(4) OF ITAT RULES BY PLACING THE PRONOUNCEMENT LIST IN THE NOTICE BOARD. SD/ - SD/ - (S. RIFAUR RAHMAN) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 0 8 / 1 2 / 2020 GIRIDHAR , S R. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER ( ASSTT. REGISTRAR) ITAT, MUM