BROTHER INTERNATIONAL (INDIA) P.LTD, MUMBAI V. ASST CIT 10(3), MUMBAI

ITA 2371/MUM/2014

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4879 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 09-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 143(3); 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B, MU MBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.2371/MUM/2014 FOR A Y : 2008-09 ITA NO.5347/MUM/2015 FOR A Y : 2009-10 BROTHER INTERNATIONAL (INDIA) PVT LTD, UNIT NO.111-115, 1ST FLOOR, C- WING, 215 ATRIUM, ANDHERI KURLA ROAD, ANDHERI (EAST), MUMBAI- 400059 PAN : AADCB0263E VS. ACIT, RANGE -10(3) (2), ROOM NO. 451, 4TH FLOOR AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-400020 (APPELLANT) (RESPONDENT) ASSESSEE REPRESENTED BY : SH. VINAY DESHMANE WITH SH. PAWAN SHARMA (ARS) REVENUE REPRESENTED BY : SH. SUMAN KUMAR AND SH. NISHANT SAMAIYA (SR. DRS) DATE OF HEARI NG: 17.05.2019 DATE OF PRONOUNCEMENT: 22.05.2019 ORDER UNDER SECTION 254(1) OF INCOME-TAX ACT PER PAWAN SINGH JUDICIAL MEMBER ; 1. THESE TWO APPEALS UNDER SECTION 253 OF INCOME TAX A CT BY ASSESSEE ARE DIRECTED AGAINST SEPARATE ORDERS OF COMMISSIONER (A PPEALS) MUMBAI, DATED 08.01.2014 AND 28.08.2015 FOR ASSESSMENT YEAR 2008- 09 AND 2009-10 RESPECTIVELY. IN BOTH THE APPEALS THE ASSESSEE HAS RAISED CERTAIN COMMON GROUND OF APPEAL, THUS, BOTH THE APPEAL WERE CLUBBE D, HEARD AND ARE DECIDED BY COMMON ORDER FOR THE SAKE OF CONVENIENCE. FOR AP PRECIATION OF FACTS, FIRST ITA NO. 2371/M/2014 & 53 47/M/2015 BROTHER INTERNATIONAL 2 WE ARE REFERRING THE FACTS OF ASSESSMENT YEAR 2008- 09. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL. (1) THE LEARNED COMMISSIONER (APPEALS) ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF ADVERTISEMENT EXPENSES OF RS.33,65, 007/-MADE BY ASSESSING OFFICER ON THE GROUND THAT INVOICES IN RESPECT OF S UCH EXPENSES WERE RAISED IN THE SUBSEQUENT FINANCIAL YEAR 2008-09. THE LEARNED COMM ISSIONER (APPEALS) OUGHT TO HAVE APPRECIATED THE FACT THAT THE SAID EXPENSES RELATES TO THE ADVERTISEMENTS RELEASED IN THE FINANCIAL YEAR 2007-08. (2) THE LEARNED COMMISSIONER (APPEALS) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING DISALLOWANCE OF PROVISION FOR WARRANTY OF RS.44,57, 867/- MADE BY LEARNED ASSESSING OFFICER. THE LEARNED COMMISSIONER (APPEALS) OUGHT TO HAV E APPRECIATED THE FACT THAT OUT OF THE DISALLOWANCE OF RS.44,57,867/-, AN AMOUN T OF RS.18,19,487/- PERTAINS TO ACTUAL EXPENSES ON AFTER SALES SERVICE AND SUCH ACTUAL EXPENSES SHOULD BE ALLOWABLE. (3) THE LEARNED COMMISSIONER (APPEALS) HAS ERRED IN LA W AND ON FACTS IN CONFIRMING DISALLOWANCE OF PROVISION FOR GRATUITY O F RS. 13,37,283/-MADE BY THE ASSESSING OFFICER. THE LEARNED COMMISSIONER (APPEAL S) OUGHT TO HAVE CONSIDERED THE ASSESSING OFFICERS FINDING IN REMAND REPORT THA T THE SAID PROVISIONS WERE NOT ROUTED THROUGH THE PROFIT AND LOSS ACCOUNT. (4) THE LEARNED COMMISSIONER (APPEALS)HAS ERRED IN LAW AND ON FACTS IN CONFIRMING DISALLOWANCE OF PROVISIONS FOR WARRANTY OF RS.44,57 ,867/- WHILE COMPUTING THE BOOK PROFIT UNDER SECTION 115 JB OF THE ACT. THE LEARNED COMMISSIONER (APPEALS) OUGHT TO HAVE AP PRECIATED THE FACT THAT OUT OF THE DISALLOWANCE OF RS. 44,57,867/-, AN AMOUNT O F RS. 18,19,487/- PERTAINS TO ACTUAL EXPENSES ON AFTER SALES SERVICES AND THIS AC TUAL EXPENSES SHOULD BE ALLOWABLE. (5) THE LEARNED COMMISSIONER (APPEALS) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING DISALLOWANCE OF PROVISION FOR WARRANTY OF RS.1,33,2 83/-WHILE COMPUTING THE BOOK PROFIT UNDER SECTION 115JB OF THE ACT. THE LEA RNED COMMISSIONER (APPEALS) OUGHT TO HAVE CONSIDERED THE ASSESSING OFFICERS FIN DING IN REMAND REPORT THAT THE SAID PROVISION WAS NOT ROUTED THROUGH THE PROFIT AN D LOSS ACCOUNT . ITA NO. 2371/M/2014 & 53 47/M/2015 BROTHER INTERNATIONAL 3 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE COMPANY I S ENGAGED IN THE BUSINESS OF TRADING OF COMPUTER PERIPHERALS VIZ PRINTERS, FAX MACHINES, MULTIFUNCTION CENTRE, FILED ITS RETURN OF INCOME FOR ASSESSMENT Y EAR 2008-09 ON 26.09.2008 DECLARING TOTAL LOSS OF RS. 1,22,47,548/-. THE ASSE SSMENT WAS COMPLETED ON 20 DECEMBER 2011 UNDER SECTION 143(3) OF THE ACT. T HE ASSESSING OFFICER WHILE PASSING ASSESSMENT ORDER BESIDES OTHER DISALL OWANCE, DISALLOWED ADVERTISEMENT EXPENSES OF RS. 33,65,007/-, DISALLOW ED PROVISION FOR WARRANTY RS.44,57,867/- AND PROVISION FOR GRATUITY OF RS. 13,37,283/-. ON APPEAL BEFORE COMMISSIONER (APPEALS) THE ACTION OF ASSESSING OFFICER FOR ALL DISALLOWANCES WAS CONFIRMED. FURTHER, AGGRIEVED BY THE ORDER OF COMMISSIONER (APPEALS) THE ASSESSEE HAS FILED PRESE NT APPEAL BEFORE US. 3. WE HAVE HEARD LEARNED AR OF THE ASSESSEE AND LEARNE D DR FOR REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. GROUND NO .1 RELATES TO DISALLOWANCE OF ADVERTISEMENT EXPENSES OF RS.33,65, 007/-. THE LEARNED AR OF THE ASSESSEE SUBMITS THAT THE ASSESSEE COMPANY H AS BEEN CONSISTENTLY FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING. THE ASSESSING OFFICER DISALLOWED THE EXPENSES ON THE GROUND THAT EXPENSES PERTAINS TO THE SUBSEQUENT YEAR AS THE DATES ON THE BILLS OF THE S AID EXPENSES IS OF APRIL AND MAY 2008, WHICH DOES NOT FALL IN PREVIOUS YEAR RELE VANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. THE ASSESSEE RECEIVED THE INVOICES IN RESPECT OF EXPENSES INCURRED ON SUCH EXPENSES IN THE MONTH OF APRIL AND MAY 2008 AND THE SAID EXPENSES WERE CREDITED IN THE ACCOUNTS OF RESPECTIVE PARTIES. ITA NO. 2371/M/2014 & 53 47/M/2015 BROTHER INTERNATIONAL 4 THE LEARNED COMMISSIONER (APPEALS) DESPITE OBSERVIN G THE FACT THAT INVOICES WERE RECEIVED IN MONTH OF APRIL AND MAY 20 08 CONFIRMED THE DISALLOWANCE. ON THE OTHER HAND LEARNED DR FOR THE REVENUE SUPPORTED THE ORDER OF AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE CONSIDERED THE ORDERS OF AUTHORITIES BELOW. THERE IS NO DISPUT E THAT THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. FURTHER IT IS NOT IN DISPUTE THAT INVOICES RELATED TO THE ADVERTISEMENT EXPENSES WERE RECEIVED BY THE ASSESSEE IN THE MONTH OF APRIL AND MAY 2008, THOUGH THE EXPE NSES RELATES TO THE ADVERTISEMENT MADE PRIOR TO MARCH 2008. CONSIDERING THE FACT THAT EXPENSES RELATES TO THE ADVERTISEMENT EXPENSES ARE RELATED W ITH THE ASSESSMENT YEAR UNDER CONSIDERATION, THE DISALLOWANCE MADE BY ASSES SING OFFICER AND CONFIRMED BY LEARNED COMMISSIONER (APPEALS) ARE DE LETED. IN THE RESULT GROUND NUMBER 1 OF THE APPEAL IS ALLOWED. 5. GROUND NO.2 RELATES TO THE PROVISION FOR WARRANTY. THE LEARNED AR FOR THE ASSESSEE SUBMITS THAT THE ASSESSEE HAS THE PRACTICE FOR MAKING PROVISION FOR WARRANTY ON THE BASIS OF PERCENTAGE OF TURNOVER. TH E AMOUNT OF PROVISION FOR WARRANTY IS DETERMINED ON THE BASIS OF ANALYSES OF EMPIRICAL DATA FAILURE RATE. THE ASSESSEE HAS MADE PROVISION FOR WARRANTY AT THE RATE OF 1.5% OF THE TURNOVER WHICH IS QUITE REASONABLE. THIS YEAR PROVI SION HAS BEEN REVISED TO THE EXTENT OF 1.42% OF THE TURNOVER. THE LEARNED AN D AR OF THE ASSESSEE TO BUTTRESS ITS SUBMISSION RELIED UPON THE DECISION OF HONBLE SUPREME COURT ITA NO. 2371/M/2014 & 53 47/M/2015 BROTHER INTERNATIONAL 5 IN CASE OF ROTORK CONTROL INDIA PVT LIMITED VERSUS CIT (2009) (180 TAXMAN 422)(SC). 6. ON THE OTHER HAND LEARNED DR FOR THE REVENUE SUPPOR TED THE ORDER OF AUTHORITIES BELOW. IT WAS SUBMITTED THAT ASSESSEE I S NOT THE MANUFACTURER OF THE EQUIPMENT. THE ASSESSEE IS IN THE BUSINESS OF S ALES AND SERVICES. EVEN OTHERWISE, IT WAS THE FIRST YEAR FOR OF BUSINESS FO R THE ASSESSEE INTO THE TRADING OF THE COMPUTER EQUIPMENTS. THE PROVISION F OR WARRANTY IS RECOGNIZED WHEN THE MANUFACTURER HAS OBLIGATION AS A RESULT OF PAST EVENT, THUS NO PROVISION CAN BE RECOGNIZED. 7. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE PARTI ES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTED THAT ASSESSEE HAS DEBIT ED RS. 44,57,867/- UNDER THE HEAD PROVISIONS FOR WARRANTY. THE ASSESSEE WAS ASKED TO JUSTIFY THE CLAIM. THE ASSESSEE FILED ITS REPLY DATED 29/11.201 1 AND CONTENDED THAT THE ASSESSEE COMPANY MADE A PROVISION FOR WARRANTY OF R S.44,57,867/- BEING 1.54% (APPROX) OF TURNOVER AS PER THEIR POLICY. THE ASSESSEE IS IN THE BUSINESS OF TRADING IN INFORMATION COMMUNICATION EQ UIPMENTS SUCH AS PRINTERS AND FACSIMILE MACHINE. THESE ELECTRONIC IT EMS ALWAYS SUBJECT TO REPAIR, DAMAGE ETC. OVER A PERIOD OF TIME. HENCE, T HE ASSESSEE-COMPANY PROVIDES ADDITIONAL SERVICES AFTER SALE SERVICE TO ITS CUSTOMERS. THE ASSESSEE- COMPANY ALSO PROVIDES WARRANTY FOR ITS PRODUCTS, WH ICH IS GENERAL BUSINESS PRACTICE. THE SAME IS ALLOWABLE DEDUCTION. THE CONT ENTION OF THE ASSESSEE ITA NO. 2371/M/2014 & 53 47/M/2015 BROTHER INTERNATIONAL 6 WAS NOT ACCEPTED BY ASSESSING OFFICER HOLDING THAT THE WORKING OF THE PROVISIONS FOR WARRANTY IS NOT BASED ON METHODOLOGY . THE ASSESSEE HAS NOT SHOWN ANY EVIDENCE THAT THE ITEMS MANUFACTURED OR S OLD BY ASSESSEE COMPANY WERE DEFECTIVE AND ANY SUCH AMOUNT WAS INCU RRED ON SUCH DEFECTS. NO MANUFACTURING YEAR WISE DATA IS PROVIDED BY THE ASSESSEE. THE LD. COMMISSIONER (APPEALS) ALSO OBSERVED THAT THE ASSES SEE IS IN THE TRADING OF INFORMATION AND COMMUNICATION EQUIPMENTS E.G. PRINT ER, FAX MACHINE ON WHICH THEY PROVIDES WARRANTY AS ADDITIONAL SERVICE AS A PART OF AFTER SALES SERVICES TO THEIR CUSTOMERS. IT WAS FURTHER OBSERVE D THAT THE ASSESSEE IS NOT THE MANUFACTURE OF THE ITEMS. THE LD. COMMISSIONER (APPEALS) WAS ALSO OF THE VIEW THAT THE WARRANTY IS NOT PASSED BY THE MAN UFACTURE TO THE TRADER. THE ASSESSEE HAS NOT FILED ANY EVIDENCE TO SUBSTANT IATE THAT AFTER SALES SERVICE, THE ASSESSEE MADE EXPENSES ON ACCOUNT OF W ARRANTY. THE LD. COMMISSIONER (APPEALS) ALSO EXAMINED AFTER SALE SER VICE EXPENSES, FOR THE RELEVANT PERIOD, WHICH IS 1.03% OF THE TOTAL TURNOV ER. THE LD. COMMISSIONER (APPEALS) ALSO OBSERVED THAT IT WAS THE FIRST YEAR OF THE ASSESSEE INTO THE TRADING. 8. IN OUR VIEW A PROVISION IS RECOGNIZED WHEN A ENTERP RISES HAS A FUTURE OBLIGATION AS A RESULT OF PAST EVENTS, IT IS PROBAB LE THAT A OUT FLOW OF THE RECOURSES WILL BE REQUIRED TO SETTLE THE OBLIGATIO N AND A RELIABLE ESTIMATION CAN BE MADE FOR SUCH OBLIGATION. ALL SUCH FACTORS ARE MISSING IN THE PRESENT CASE. IN OUR HUMBLE VIEW, THE RATIO OF THE DECISION OF HONBLE SUPREME ITA NO. 2371/M/2014 & 53 47/M/2015 BROTHER INTERNATIONAL 7 COURT IN ROTROK CONTROL P LTD (SUPRA) RELIED BY LD. AR FOR THE ASSESSEE IS NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE. AS THE RATIO LAID DOWN BY HONBLE COURT IN SAID CASE THAT A PRESENT OBLIGATI ON AS A RESULT OF A PAST EVENT IS NOT SATISFIED. NEITHER THE ASSESSEE IS MANUFACTURER NOR HAVE A PAST HISTORY IN RESPECT OF THE CLAIM OF WARRANTY. THUS, WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER OF LD. COMMISS IONER (APPEALS) FOR OUR INTERFERENCE. IN THE RESULT THIS GROUND OF APPEAL I S DISMISSED. 9. GROUND NO.3 RELATES TO PROVISION OF GRATUITY. THE L D AR FOR THE ASSESSEE ARGUED THE AO DISALLOWED THE PROVISION OF GRATUITY HOLDING THAT MERE PROVISION COVERED BY SECTION 40A(7) AND HAS NOT BEE N DEBITED IN PROFIT & LOSS A/C. THE LD. COMMISSIONER (APPEALS) ALSO CONFI RMED THE ACTION OF AO HOLDING THAT THE PROVISION IS NOT ROUTED THROUGH PR OFIT & LOSS A/C AS IT WAS A BALANCE-SHEET ITEM. THE LD. AR OF THE ASSESSEE ARGU ED THAT IN SCHEDULE-11 OF PROFIT & LOSS A/C, THE ASSESSEE HAS SHOWN THE PROVI SIONS OF GRATUITY (PAGE 54 OF PB). 10. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPO RTED THE ORDER OF THE AUTHORITIES BELOW. IT IS SUBMITTED THAT NOTE IN THE PROFIT & LOSS A/C IN SCHEDULE-11 SPEAKS ABOUT TAKING THE LIABILITY FROM BROTHER INTERNATIONAL SINGAPORE PVT. LTD. 11. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. REPRE SENTATIVES OF THE PARTIES AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. THE AO DISALLOWED THE PROVISION OF GRATUITY HOLDING THAT SAME IS NOT DEBI TED TO THE PROFIT & LOSS ITA NO. 2371/M/2014 & 53 47/M/2015 BROTHER INTERNATIONAL 8 A/C AS IT RELATED TO THE ERSTWHILE LIAISON OFFICE O F THE JAPANESE COMPANY. THE ASSESSEE FURTHER EXPLAINED THAT IT HAS NOT DEBITED THE PROVISION OF GRATUITY TO THE PROFIT & LOSS A/C AS THERE IS REVERSAL OF THE P ROVISION DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE HAS SHOWN THE SAM E IN CLAUSE-17(I) OF TAX AUDIT REPORT, WHEREIN PROVISION OF PAYMENT OF G RATUITY DISALLOWANCE IS REPORTED AS NIL. THE ASSESSEE ALSO CONTENDED THAT A O HAS NOT ASKED FOR ANY DETAILS OR EXPLANATIONS NOR ANY OPPORTUNITY WAS GIV EN BEFORE DISALLOWING THE PROVISIONS OF GRATUITY. THE SUBMISSION OF ASSESSEE WAS FORWARDED TO THE AO OR HIS REMAND REPORT. THE AO SUBMITTED HIS REMAND R EPORT. IN THE REMAND REPORT, THE AO CONTENDED THAT THE PROVISION FOR GRA TUITY IS A BALANCE-SHEET ITEM AND HAS NOT BEEN ROUTED THROUGH PROFIT & LOSS ACCOUNT. THE ACTUARIAL CERTIFICATE FURNISHED BY ASSESSEE WAS VERIFIED, WHI CH SHOW THAT AN AMOUNT OF RS. 16,12,347/- HAS BEEN REFLECTED IN THE BALANCE-S HEET. THE AO ADDED RS. 13,37,283/- BEING DIFFERENCE OF OPENING AND CLOSING BALANCE AS ON 1 ST APRIL 2007 (RS. 2,75,064/-). THE AO ARRIVED AT THE FIGURE OF RS. 13,37,283/- (RS. 16,22,347 RS. 2,75,064/-). THE AO CONFIRMED THAT THE PROVISION OF GRATUITY IS NOT ROUTED THROUGH PROFIT & LOSS ACCOUN T AND A BALANCE-SHEET ITEM. THE LD. COMMISSIONER (APPEALS) ON THE BASIS O F REMAND REPORT FURNISHED BY ASSESSEE CONFIRMED THE ACTION OF AO HO LDING THAT THE PROVISION OF GRATUITY ARE NOT ROUTED THROUGH PROFIT & LOSS AC COUNT AS IT WAS A BALANCE- SHEET ITEM. WE HAVE NOTED THAT THE LD. COMMISSIONER (APPEALS) CONFIRMED THE ACTION AFTER VERIFICATION OF THE FACT THAT PROV ISION FOR GRATUITY IS NOT ITA NO. 2371/M/2014 & 53 47/M/2015 BROTHER INTERNATIONAL 9 ROUTED THROUGH PROFIT & LOSS ACCOUNT. THE ASSESSEE HAS SHOWN THE PROVISIONS OF GRATUITY AS ON 31.03.2008 AS A LIABIL ITY TAKEN OVER FROM ITS ASSOCIATED ENTERPRIESES (BROTHER INTERNATIONAL SING APORE PVT. LTD.). IN OUR VIEW, THE DISALLOWANCE MADE BY ASSESSING OFFICER AN D CONFIRMED BY LD. CIT(A) IS NOT CORRECT. THE DISALLOWANCE WAS MADE ON LY ON THE GROUND THAT IT WAS NOT ROUTED THROUGH PROFIT & LOSS A/C AND WAS A BALANCE-SHEET ITEM. WE ARE CONSCIOUS OF THE FACT THAT BALANCE-SHEET ARE NO T SACROSANCT. THE ASSESSEE CLAIMED THE PROVISION OF GRATUITY OF RS. 13,37,283/ -. DURING THE REMAND PROCEEDING ASSESSEE FURNISHED ACTUARIAL CERTIFICATE SHOWING AMOUNT OF RS. 16,12,347/- WHICH HAS BEEN REFLECTED IN THE BALANCE -SHEET. THE ASSESSEE CLAIMED PROVISION FOR PAYMENT OF GRATUITY ON THE BA SIS OF ACTUARIAL VALUATION. THE ASSESSING OFFICER AT THE TIME OF PASSING ASSESS MENT ORDER ON 20.12.2011 HAS NOT VERIFIED, IF THE SIMILAR AMOUNT IS CLAIMED IN NEXT ASSESSMENT YEAR, THEREFORE, THIS ISSUE IS RESTORED TO THE FILE OF ASSESSING OFFICER TO DECIDE IT AFRESH IN ACCORDANCE WITH LAW. NEEDLESS TO ORDER THAT BEFORE PASSING THE ORDER, THE ASSESSING OFFICER SHA LL ALLOW PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. 12. IN THE RESULT, THIS GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 13. GROUND NO. 4 &5 RELATES TO ADDITION OF PROVISION OF WARRANTY AND GRATUITY TO THE BOOK PROFIT WHILE COMPUTING INCOME UNDER SECTIO N 115JB. THE LD. AR OF THE ASSESSEE SUBMITS THAT THESE GROUNDS OF APPEAL A RE CONSEQUENTIAL. IN CASE, ITA NO. 2371/M/2014 & 53 47/M/2015 BROTHER INTERNATIONAL 10 THE ASSESSEE SUCCEEDS IN GROUND NO. 2 & 3 NO ADDITI ON UNDER TO THE BOOK PROFIT UNDER SECTION 115JB IS WARRANTED. 14. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE RELIE D UPON THE ORDER OF LOWER AUTHORITIES. 15. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE PARTI ES. WE HAVE ALREADY CONFIRMED THE ADDITION IN GROUND NO.2 AND RESTORED THE ADDITION/DISALLOWANCE IN GROUND NO. 3. THEREFORE, T HE ASSESSING OFFICER IS DIRECTED TO MAKE CONSEQUENTIAL ADJUSTMENT ACCORDING LY WITH REGARD TO THE DISALLOWANCE OF GRATUITY. AS WE HAVE DIRECTED THE A SSESSING OFFICER TO DECIDE THE ISSUE OF PROVISION OF GRATUITY AFRESH. T HEREFORE, THE ASSESSING OFFICER SHALL PASS THE ORDER FOR ADJUSTMENT UNDER S ECTION 115JB WITH REGARD TO PROVISION OF GRATUITY AFTER DECIDING THE ISSUE A FRESH. 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO. 5347/M/2015 FOR AY 2009-10 BY ASSESSEE. 17. AS WE HAVE ALREADY NOTED THAT THE ASSESSEE HAS RAI SED CERTAIN COMMON GROUNDS OF APPEAL AS RAISED IN APPEAL FOR AY 2008-0 9. WE HAVE NOTED THAT THE GROUND NO.1 OF THE PRESENT APPEAL IS IDENTICAL TO THE GROUND NO.2 OF APPEAL FOR AY 2008-09, WHICH WE HAVE ALREADY DISMIS SED IN APPEAL FOR AY 2008-09, HENCE FOLLOWING THE PRINCIPLE OF CONSISTEN CY, THIS GROUND OF APPEAL IS ALSO DISMISSED. ITA NO. 2371/M/2014 & 53 47/M/2015 BROTHER INTERNATIONAL 11 18. GROUND NO.2 OF THE PRESENT APPEAL IS CONSEQUENTIAL IN NATURE TO THE GROUND NO.1, THUS, NEEDS NO SPECIFIC ADJUDICATION AS WE HA VE ALREADY ALLOWED THE GROUND NO.1 OF THE APPEAL. 19. GROUND NO.3 IS IDENTICAL TO THE GROUND NO.5 IN APPE AL FOR AY 2008-09. AS WE HAVE ALREADY DIRECTED TO DECIDE THE ISSUE OF PRO VISION OF GRATUITY AFRESH AND MADE ADJUSTMENT UNDER SECTION 115JB ONLY THEREA FTER. HOWEVER, THERE IS NO GROUND OF APPEAL RELATES WITH THE DISALLOWANCE O F GRATUITY, THEREFORE, THE ADJUSTMENT UNDER SECTION 115JB IS CONSEQUENTIAL. TH EREFORE, THIS GROUND OF APPEAL IS DISMISSED. 20. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF MAY, 2019. SD/- SD/- (G.S.PANNU) (PAWAN SINGH) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI; DATED 22/05/2019 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/