B.P.CHEMICALS, MUMBAI V. JT CIT 13(2), MUMBAI

ITA 2443/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8956 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 29-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S K PODAR
• Keywords: Question of law; Fair market value; Capital expenditure
• Section: 143(3); 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN , JUDICIAL MEMBER ITA NO. 2443/MUM/2015 (ASSESSMENT YEAR: 2011-12) M/S. B.P. CHEMICALS VS. J C I T 13(2) 3, 1 ST FLOOR, VITHAL CHAMBERS 65, KAZI SAYED STREET MUMBAI 400003 MUMBAI PAN AAAFB0982G APPELLANT RESPONDENT APPELLANT BY: SHRI HARESH P. SHAH RESPONDENT BY: SHRI S.K. PODAR DATE OF HEARING: 22.12.2016 DATE OF PRONOUNCEMENT: 11.01.2017 O R D E R PER JASON P. BOAZ, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)- 28, MUMBAI DATED 09.03.2015 FOR A.Y. 2011-12. 2. THE FACTS OF THE CASE, BRIEFLY, ARE AS UNDER: - 2.1 THE ASSESSEE, A FIRM ENGAGED IN THE BUSINESS OF TRADING IN RUBBER, RUBBER CHEMICALS, SOLVENTS, ETC., FILED ITS RETURN OF INCOME FOR A.Y. 2011-12 ON 22.09.2012 DECLARING INCOME OF ` 6,15,82,930/-. THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') VIDE ORDE R DATED 05.02.2014 WHEREIN THE INCOME OF THE ASSESSEE WAS DETERMINED A T ` 6,71,33,340/- IN VIEW OF THE FOLLOWING ADDITIONS/DISALLOWANCES: - (I) INTEREST RECEIVED AS PER AIR INFORMATION ` 60,746/- BUT NOT DISCLOSED (II) CAPITAL EXPENDITURE INTEREST ON ` 5,13,806/- BORROWED CAPITAL (III) EXCESS INTEREST TO RELATIVES ` 45,77,640/- (IV) EXPENSES DISALLOWED ` 2,00,000/- (V) PERSONAL EXPENDITURE ` 1,98,220/- ITA NO. 2443/MUM/2015 M/S. B.P. CHEMICALS 2 2.2 AGGRIEVED BY THE ORDER OF ASSESSMENT FOR A.Y. 2 011-12 DATED 05.02.2014, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A)-28, MUMBAI WHO DISPOSED OFF THE APPEAL VIDE THE IMPUGNE D ORDER DATED 09.03.2015 ALLOWING THE ASSESSEE PARTIAL RELIEF. 3. AGGRIEVED BY THE ORDER OF THE CIT(A)-28, MUMBAI DAT ED 09.03.2015, THE ASSESSEE PREFERRED THIS APPEAL RAISING THE FOLL OWING GROUNDS: - (I) DISALLOWANCE OUT OF INTEREST OF RS. 45,77,640/- U/S. 40A(2)(B) (1). ON THE FACTS & CIRCUMSTANCES AND IN LAW, THE LEARNE D COMMISSIONER OF INCOME TAX (APPEALS)- 28, MUMBAI [R EFERRED AS CIT(A)'] ERRED IN CONFIRMING DISALLOWANCE OF RS. 45 ,77,640/- OUT OF INTEREST UNDER THE PROVISIONS OF SECTION 40A(2)(B) MERELY FOLLOWING EARLIER YEAR'S DECISION OF THE HON'BLE ITAT FOR THE A.Y. 2004-05. (2). ON THE FACTS AND CIRCUMSTANCES AND IN THE INTEREST OF JUSTICE, THE LEARNED CIT(A) OUGHT TO HAVE CONSIDERED THE REL EVANT EVIDENCES SUBMITTED IN VIEW OF THE CBDT CIRCULAR NO. 6-P, DAT ED 6/7/1968. IT IS HUMBLY STATED THAT THEY WERE SUBMITTED PURELY WI TH A VIEW TO SUBSTANTIATE THAT THE CONDITIONS OF THE SAID CIRCUL AR AND THE JUDGMENTS RELIED UPON WERE FULFILLED. (3). ON THE FACTS AND CIRCUMSTANCES AND IN LAW YOUR APPE LLANT PRAYS THAT THE ADDITION ON ACCOUNT OF THE ALLEGED D ISALLOWANCE MAY BE DELETED. (II) AD-HOC DISALLOWANCE OF RS. 2,00,000/- OUT OF CONVEYANCE, STAFF WELFARE, OFFICE & ENTERTAINMENT EXPENSES - (1) ON THE FACTS AND CIRCUMSTANCES, THE LEARNED CIT (A) ERRED IN CONFIRMING AD-HOC DISALLOWANCE OF RS. 2,00,000/- OU T OF CONVEYANCE, STAFF WELFARE, OFFICE AND ENTERTAINMENT EXPENSES. (2) ON THE FACTS & CIRCUMSTANCES YOUR APPELLANT PRA YS THAT THE ALLEGED ADDITION OF RS. 2,00,000/- MAY BE DELETED. (III) DISALLOWANCE OF RS. 1,25,125/- OUT OF TOTAL R S. 1,98,220/- OUT OF VARIOUS EXPENSES ON THE GROUND OF PERSONAL NATURE (1) ON THE FACTS AND CIRCUMSTANCES THE LEARNED CIT( A) ERRED IN CONFIRMING DISALLOWANCE AT 15% OUT OF MOTOR CAR, TE LEPHONE AND TRAVELLING TOTALING TO RS.1,25,125/- OUT OF RS. 1,9 8,220/- ARBITRARILY ON THE GROUND OF PERSONAL USE. (2) ON THE FACTS & CIRCUMSTANCES YOUR APPELLANT PRA YS THAT THE ALLEGED ADDITION OF RS. 1,25,125/- MAY BE DELETED. (IV) DISALLOWANCE OF RS. 1,25,426/- U/S. 37- (1) THE LEARNED CIT(A) ERRED IN CONFIRMING DISALLOW ANCE OF RS. 1,25,426/- [ERRED IN MENTIONING RS. 12,75,426/-] U/ S. 37 OF THE ACT ITA NO. 2443/MUM/2015 M/S. B.P. CHEMICALS 3 DISREGARDING THE FACT THAT THE WAS NO FINDING OR AN Y BASIS IN THE IMPUGNED ASSESSMENT ORDER. (3) ON THE FACTS & CIRCUMSTANCES YOUR APPELLANT PRA YS THAT THE ALLEGED ADDITION OF RS. 1,25,426/- MAY BE DELETED. (V) DISALLOWANCE OF BONUS TO PARTNERS RS. 65,000/- (1) ON THE FACTS AND CIRCUMSTANCES AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING DISALLOWANCE OF RS. 65,0 00/-, BEING BONUS TO PARTNERS UNDER THE PROVISIONS OF SECTION 3 7 OF THE ACT. (3) ON THE FACTS & CIRCUMSTANCES YOUR APPELLANT PRA YS THAT THE ALLEGED ADDITION OF RS. 65,000/- MAY BE DELETED. (VI) ADDITION OF RS. 60,746/- AS PER AIR INFORMATION (1) ON THE FACTS AND CIRCUMSTANCES AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING ADDITION MADE MERELY ON THE BASIS OF THE AIR INFORMATION. (2) ON THE FACTS & CIRCUMSTANCES YOUR APPELLANT PRA YS THAT THE ALLEGED ADDITION OF RS. 60,746/- MAY BE DELETED. (VII) YOUR APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER A ND/OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 4. GROUNDS II TO VII (SUPRA) 4.1 AT THE OUTSET OF THE HEARING, THE LEARNED A.R. OF THE ASSESSEE SUBMITTED THAT THE GROUNDS RAISED AT II TO VII IN T HIS APPEAL (SUPRA) ARE NOT BEING PRESSED. SINCE THE AFORESAID GROUNDS ARE NOT BEING PRESSED, THEY ARE RENDERED INFRUCTUOUS AND ACCORDINGLY DISMISSED. 5. GROUND I (1 & 2) DISALLOWANCE OF INTEREST UNDER S ECTION 40A(2)(B) 5.1 IN THIS GROUND, THE ASSESSEE ASSAILS THE FINDIN G OF THE LEARNED CIT(A) IN THE IMPUGNED ORDER CONFIRMING THE DISALLOWANCE O F ` 44,77,640/- OUT OF INTEREST UNDER THE PROVISIONS OF SECTION 40A(2)(B) OF THE ACT. IT IS FURTHER CONTENDED THAT THE LEARNED CIT(A) OUGHT TO HAVE CON SIDERED THE RELEVANT EVIDENCES SUBMITTED IN VIEW OF CBDT CIRCULAR NO. 6 -P DATED 06.07.1968 AND JUDGEMENTS RELIED UPON BY THE ASSESSEE, THE LEA RNED A.R. SUBMITTED THAT THIS ISSUE WAS CONSIDERED AND HELD IN FAVOUR O F THE ASSESSEE BY THE DECISIONS OF THE COORDINATE BENCH OF THE TRIBUNAL I N THE ASSESSEES OWN CASE IN ITA NO. 466/MUM/2013 DATED 18.05.2016 FOR A .Y. 2009-10 AND IN ITA NO. 6214/MUM/2013 DATED 22.08.2016 FOR A.Y. 201 0-11. THE LEARNED A.R. FURTHER SUBMITTED THAT THE COORDINATE BENCH DE CISION FOR A.Y. 2004- 05, RELIED ON BY THE LEARNED CIT(A) IN THE IMPUGNED ORDER HAS BEEN DISCUSSED BY THE COORDINATE BENCH IN ITS ORDER FOR A.Y. 2009-10 (SUPRA) ITA NO. 2443/MUM/2015 M/S. B.P. CHEMICALS 4 AND THEREFORE THIS ISSUE IS COVERED IN FAVOUR OF AS SESSEE. IT WAS PRAYED THAT THE ASSESSEES APPEAL ON THIS ISSUE BE ACCORDINGLY ALLOWED. 5.2 PER CONTRA, THE LEARNED D.R. FOR REVENUE SUPPOR TED THE ORDERS OF THE AUTHORITIES BELOW. 5.3.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD; INCLUDING THE JU DICIAL PRONOUNCEMENTS CITED. WE FIND FROM A PERUSAL OF THE CITED JUDGEMEN TS THAT THE ISSUE BEFORE US IN RESPECT OF DISALLOWANCE OF INTEREST UNDER SEC TION 40A(2)(B) OF THE ACT IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISIO NS OF THE COORDINATE BENCH IN THE ASSESSEES OWN CASE IN ITA NO. 466/MUM /2013 DATED 18.05.2016 FOR A.Y. 2009-10 AND IN ITA NO. 6214/MUM /2013 DATED 22.08.2016 FOR A.Y. 2010-11. IN ITS ORDER FOR A.Y. 2010-11 (SUPRA), THE COORDINATE BENCH HAS CONSIDERED THIS ISSUE, INCLUDI NG THE TRIBUNALS ORDER FOR A.Y. 2004-05 IN THE ASSESSEES CASE RELIED ON B Y THE LEARNED CIT(A) AND FOLLOWING THE COORDINATE BENCH ORDER FOR A.Y. 2009- 10 HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE, HOLDING AS UNDER A T PARAS 3 TO 5 THEREOF: - 3. AT THE TIME OF HEARING, THE LD.AR SUBMITTED THA T THE PRESENT CASE OF THE ASSESSEE IS COVERED BY THE DECISION OF CO-O RDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.466/MUM/2 013 (AY-2009- 10) VIDE ORDER DATED 18.5.2016. THE LD. AR FURTHER SUBMITTED THAT THE DECISION OF THE LD.CIT(A) BASED ON ASSESSMENT YEAR 2004-05 CONFIRMING THE DISALLOWANCE HAS ALSO BEEN DISCUSSED BY THE CO- ORDINATE BENCH OF THE TRIBUNAL IN ITS DECISION FOR THE ASSESSMENT YEAR 2009-10 AND THEREFORE THE ISSUE IS DIRECTLY COVERED IN FAVOUR OF THE ASSESSEE AND ACCORDINGLY THE DISALLOWANCE BE DELET ED. ON THE CONTRARY, THE LD.DR REITERATED THE SUBMISSIONS AS M ADE BEFORE THE LD.CIT(A) AND HEAVILY RELIED ON THE DECISIONS OF AU THORITIES BELOW. 4. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE PARTIES, PERUSED THE MATERIAL PLACED BEFORE US INCLUDING THE ORDERS OF AUTHORITIES BELOW. WE FIND THAT THE DECISION REFERR ED BY THE LD.AR IN THE CASE OF ITA NO.466/MUM/2013 (SUPRA) IN ASSESSEE S OWN CASE WAS PASSED BY THE CO-ORDINATE BENCH OF THE TRIBUNAL AFTER CONSIDERING THE DECISION FOR THE ASSESSMENT YEAR 2004-05 WHICH WAS THE BASIS FOR DISMISSING THE APPEAL OF THE ASSESSEE AND THUS, THE FACTS OF THE CASE IN HAND AND RELIED UPON BY THE ASSESSEE ARE ID ENTICAL. FOR THE SAKE OF CONVENIENCE AND CLARITY WE REPRODUCE BELOW THE OPERATION PART OF THE DECISION AS UNDER : 4. THE CIT(A) RELYING ON ITAT DECISION IN ASSESSEE S OWN CASE FOR ASSESSMENT YEAR 2004-05 CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY OBSERVING IN PARA 3.3.4 AS UNDER:- ITA NO. 2443/MUM/2015 M/S. B.P. CHEMICALS 5 3.3.4 THE ISSUE RELATING TO GENUINENESS OF THE PA YMENT OF INTEREST IS NOT RELEVANT WHILE DECIDING THE AMOUNT OF DEDUCTION ALLOWABLE TO THE ASSESSEE U/S 40A(2) OF THE LT. ACT , 1961. THE DISALLOWANCE HAS NOT BEEN MADE FOR THE REASON THAT THE EXPENDITURE IS NOT GENUINE. THE DISALLOWANCE HAS BE EN MADE BY VIRTUE OF THE PROVISIONS OF SEC. 40A(2) WHEREBY ANY EXPENDITURE WHICH IS EXCESSIVE OR UNREASONABLE IS REQUIRED TO B E DISALLOWED. THE ASSESSEE HAS NOT SHOWN AS TO HOW THE INTEREST @ 18% PAID TO PERSONS SPECIFIED U/S 40A(2)(B) WAS NOT EXCESSIVE A ND UNREASONABLE IN LIGHT OF THE OPINION OF THE ASSESSI NG OFFICER THAT THE INTEREST AT THE RATE OF 12% WAS REASONABLE AND THE FINDINGS OF THE HON'BLE TRIBUNAL IN THE CASE OF THE ASSESSEE IT SELF FOR THE A.Y. 2004-05 ON THE SAME SET OF FACTS. CHARGING OF INTER EST AT A GIVEN RATE FROM TRADE DEBTORS CANNOT BE TAKEN TO BE THE M ARKET RATE FOR THE PURPOSES OF LOANS SINCE THESE ARE NOT COMPARABL ES. THE ASSESSEE HAS NOT BEEN ABLE TO DEMONSTRATE AS TO HOW THE INTEREST RATE OF 18% WAS THE MARKET RATE. AGGRIEVED, NOW ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE TH ROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. BEFORE US, LD. COUNSEL FOR THE ASSESSEE CLEARLY STATED THAT THE INTEREST PAYMENT I S NEITHER DOUBTED BY THE LOWER AUTHORITIES OR ITAT IN ASSESSM ENT YEAR 2004-05. THE ONLY ISSUE, ACCORDING TO LD. COUNSEL F OR THE ASSESSEE IS THAT INTEREST PAYMENT IS EXCESSIVE I.E. 18% AND TRIBUNAL HAS RESTRICTED THE SAME AT 12%. HOWEVER, L D. COUNSEL FOR THE ASSESSEE STATED THAT IN ASSESSMENT YEAR 2004-05 ASSESSEES APPEAL IS PENDING BEFORE THE HON'BLE BOMBAY HIGH CO URT, WHEREIN THE SUBSTANTIAL QUESTION OF LAW ON THIS ISSUES HAS BEEN ADMITTED BY HONBLE HIGH COURT. HE ALSO ARGUED THAT THE TRIB UNAL HAS NOT CONSIDERED THE DECISION OF HON'BLE BOMBAY HIGH COUR T IN THE CASE OF CIT VS. INDO SAUDI SERVICES (TRAVEL) PVT. LTD. 3 10 ITR 306(BOM), WHEREIN CBDT CIRCULAR NO.6-P DATED 06/07/1968 WAS CONSIDERED, WHEREIN THE BOARD HAS TAKEN CATEGORICAL VIEW THAT NO DISALLOWANCE IS TO BE MADE IN RESPECT OF INTEREST P AYMENT TO SISTER CONCERN WHERE THERE IS NO ATTEMPT TO EVADE TAX. LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO ASSESSEES PAPER BOOK PAGE 22, WHEREIN COMPARATIVE CHART OF INTEREST PAID TO F AMILY MEMBERS AND OTHERS AND ALSO DETAILS OF INTEREST PAID TO VAR IOUS PERSONS DURING THE RELEVANT ASSESSMENT YEARS ARE FILED. ACC ORDING TO LD. COUNSEL THOSE PERSONS HAVE INCLUDED THE INTEREST PA ID BY ASSESSEE AS INCOME IN THEIR RESPECTIVE RETURN OF IN COME AND PAID TAXES ACCORDINGLY. THE DETAILS ARE ENCLOSED AT PAGE S 22 TO 24 OF ASSESSEES PAPER BOOK. ACCORDING TO THE LD. COUNSEL FOR THE ASSESSEE, THE INTEREST PAYMENT WAS GENUINE AND INCU RRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND THE LOWER AUTHORITIES HAVE NOT ELABORATED THAT HOW THIS EXPEN DITURE OF INTEREST IS EXCESSIVE OR UNREASONABLE HAVING REGARD TO THE FAIR MARKET VALUE OF THE GOODS, SERVICES OR FACILITIES F OR WHICH THE PAYMENT IS MADE. ITA NO. 2443/MUM/2015 M/S. B.P. CHEMICALS 6 6. ON THE OTHER HAND, LD. SR.DR ARGUED THAT THIS IS SUE IS COVERED BY THE TRIBUNALS ORDER IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2004- 05 AND WHICH HAS BEEN FOLLOWED IN ASSESS MENT YEAR 2005-06, 2006-07, 2007-08 AND 2008-09. ACCORDING TO HIM, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONF IRMED BY CIT(APPEALS) IS PERFECTLY AS PER THE PROVISIONS OF THE ACT. 7. WE HAVE GONE THOUGH THE DETAILS OF INTEREST PAID TO THE FAMILY MEMBERS AND NOTICED THAT THESE PARTIES HAVE INCLUDE D THE RECEIPTS OF INTEREST IN THEIR RESPECTIVE RETURN OF INCOME. T HE DETAILS ARE FILED AT PAGES 23-24 OF THE ASSESSEES PAPER BOOK. WE FIN D THAT MOST OF THE PAYEES ARE TAXED IN HIGHEST TAX BRACKET AND THE RE IS NO ATTEMPT MADE BY THE ASSESSEE TO EVADE TAX BY EXCESS IVE PAYMENT TO RELATED PARTIES. WE FIND THAT THE ASSESSEE HAS B EEN PAYING SUCH INTEREST TO SOME OF THE PARTIES RIGHT FROM TH E BEGINNING AND IN THE PAST NO SUCH DISALLOWANCE WAS MADE BY THE DE PARTMENT I.E. THE ASSESSING OFFICER WHILE FRAMING ASSESSMENT UNDER SECTION 143(3) OF THE ACT HIMSELF HAS ALLOWED INTEREST AT 2 1% TO THE ASSESSEE FOR THE ASSESSMENT YEAR 2001-02 AND 2002-0 3, WE ARE OF THE VIEW THAT PAYMENT OF INTEREST TO ALL THE PAR TIES IS PURELY OUT OF BUSINESS NECESSITY AND DECISION TO PAY INTEREST @18% PER ANNUM IS GUARDED BY COMMERCIAL CONSIDERATION AND IN THE INTERTIES OF ITS BUSINESS NECESSITIES AND EXIGENCIE S. LD. COUNSEL FOR THE ASSESSEE BEFORE US DEMONSTRATED THAT THE PR EVAILING RATE OF INTEREST OF COMMERCIAL TRANSACTION IS 18% OR MORE A ND FOR THIS PURPOSE HE PRODUCED SOME BILLS ISSUED TO THE ASSESS EE BY VARIOUS SUPPLIERS FOR THIS YEAR, IN WHICH IT IS CLEARLY MEN TIONED THAT IN CASE OF LATE PAYMENT INTEREST @18% TO 26% TO BE CHA RGED. SIMILARLY, HE HAS ALSO EXPLAINED THAT THE ASSESSEE ITSELF HAS STIPULATED THE CHARGING OF INTEREST @24% FROM ITS C USTOMERS FOR LATE PAYMENT. BEFORE US LD. COUNSEL FOR THE ASSESSE E ALSO EXPLAINED THAT THE INTEREST RATE CHARGED BY BANKS @ 12% TO 15% ON C.C LIMITS OR BANK LOANS, WHICH INCLUDES SOME OT HER HIDDEN CHARGES AND IT IS ALSO FACT THAT BANK WHILE SANCTIO NING LOAN PUT QUITE ONEROUS LIABILITIES LIKE SUBMISSION OF STOCK STATEMENTS, PROJECT REPORT BY CHARTERED ACCOUNTANT, TIMELY PAYM ENT OF INSTALMENTS AND ALSO SATISFACTORY SECURITIES OF EQU AL AMOUNT OR MORE OF LOAN. ACCORDING TO LD. COUNSEL FOR THE ASSE SSEE THIS LOAN TAKEN FROM BANK IS FOR FIXED PERIOD AND PAYMENT IS MADE BY THE END OF THE PERIOD WITH CONSTANT MONITORING AND CHEC KS. WHEREAS, THE LOAN FROM THE FAMILY MEMBERS AND RELATIVES CAN BE OBTAINED AND RETURNED WITHOUT ANY HUSTLES SO THERE IS PREMIU M ON THE SAME AND THIS A NORMAL MARKET PRACTICE. WE FIND THA T THE ASSESSEE HAS TRIED TO EXPLAIN HIS CASE FROM ALL ANG LES AND MOREOVER THE DECISION RELIED UPON BY LD. COUNSEL FO R THE ASSESSEE OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF INDO SA UDI SERVICES (TRAVEL) PVT. LTD.(SUPRA), WHEREIN IT IS HELD AS UN DER:- 5. IN VIEW OF THE AFORESAID ADMITTED FACTS WE ARE OF THE VIEW THAT THE TRIBUNAL WAS CORRECT IN COMING TO THE CONCLUSIO N THAT THE COMMISSIONER OF INCOME TAX(APPEALS) WAS WRONG IN DI SALLOWING ITA NO. 2443/MUM/2015 M/S. B.P. CHEMICALS 7 HALF PERCENT COMMISSION TO THE SISTER CONCERN OF TH E ASSESSEE DURING THE ASSESSMENT YEARS 1991-92 AND 1992-93. TH E LEARNED ADVOCATE APPEARING FOR THE APPELLANT IS ALSO NOT IN A POSITION TO POINT OUT HOW THE ASSESSEE EVADED PAYMENT OF TAX BY THE ALLEGED PAYMENT OF HIGHER COMMISSION TO ITS SISTER CONCERN WAS ALSO PAYING TAX AT A HIGHER RATE AND COPIES OF THE PAYME NT ORDERS OF THE SISTER CONCERN WERE TAKEN ON RECORD BY THE TRIB UNAL. SIMILAR VIEW IS TAKEN BY HONBLE GUJARAT HIGH COUR T IN THE CASE OF CIT VS. GUJARAT GAS FINANCIAL SERVICES LTD. (201 5) TAXMAN 532 (GUJ). IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES , WE ARE OF THE VIEW THAT SINCE THE ASSESSEE AS WELL AS THE RELATIV ES, TO WHOM ASSESSEE HAS PAID INTEREST ARE BEING TAXED HIGHER R ATES, THE ENTIRE EXERCISE UNDERTAKEN BY THE ASSESSING OFFICER IS NEU TRAL EXERCISE AS FAR AS THE PAYMENT OF TAX IS CONCERNED AND THERE IS NO QUESTION OF EVADING OF PAYMENT OF TAX BY ANY OF THE PARTIES. FURTHER, HON'BLE BOMBAY HIGH COURT HAS CLEARLY LAID DOWN THA T CBDT IN ITS CIRCULAR NO.6-P DATED 06/07/1968 DEBARS THE ASS ESSING OFFICER FROM NOT ALLOWING SUCH PAYMENT MADE TO RELA TIVES AND SISTER CONCERNS, WHERE THERE IS NO ATTEMPT TO EVADE THE TAX. RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE BOMBAY HIGH COURT (SUPRA) AND GOING BY THE FACTS OF THE CASE, W E ALLOW THE CLAIM OF THE ASSESSEE. 5. IN VIEW OF THE ABOVE DECISION OF THE TRIBUNAL I N ASSESSEES OWN CASE, WE SET ASIDE THE ORDER OF THE LD.CIT(A) AND D IRECT THE AO TO DELETE THE ADDITION. 5.3.2 FOLLOWING THE DECISION OF THE COORDINATE BENC H OF THE TRIBUNAL IN THE ASSESSEES OWN CASE IN ITA NO. 466/MUM/2013 DATED 1 8.05.2016 FOR A.Y. 2009-10 AND ITA NO. 6214/MUM/2013 DATED 22.08.2016 FOR A.Y. 2010-11, WE SET ASIDE THE ORDER OF THE LEARNED CIT(A) AND AL LOW THE ASSESSEES CLAIM ON THIS ISSUE. THE AO IS ACCORDINGLY DIRECTED. CONS EQUENTLY, GROUND NO. 1 OF ASSESSEES APPEAL IS ALLOWED. 6. IN THE RESULT, THE ASSESSEES APPEAL FOR A.Y. 2011- 12 IS ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH JANUARY, 2017. SD/ - SD/ - (SANDEEP GOSAIN) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 11 TH JANUARY, 2017 ITA NO. 2443/MUM/2015 M/S. B.P. CHEMICALS 8 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -28, MUMBAI 4. THE CIT - 17, MUMBAI 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.