MAHINDRA INTERTRADE LTD, MUMBAI V. DCIT CIR 2(2), MUMBAI

ITA 269/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7826 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: K
• Next Hearing Date: 08-03-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 10-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAURABH DESH
• Keywords: Depreciation; Transfer pricing; International transaction
• Section: 43B; 14A; 37(1)

Judgement Text

, DS DSDS DS INCOME TAX APPELLATE TRIBUNAL,MUMBAI - K BENCH , IOU IOUIOU IOU , BEFORE S/SH. RAJENDRA, ACCOUNTANT MEMBER & P AWAN SINGH, JUDICIAL MEMBER /.ITA NO. 269/MUM/2014, /ASSESSMENT YEAR-2008-09 M/S MAHINDRA INTERTRADE LTD. MAHINDRA TOWERS, 6 TH FLOOR, WORLI, MUMBAI-400018. PAN: AACCM4745P VS. DCIT , CIRCLE 2(2) AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020. ( / APPELLANT) ( / RESPONDENT) ! / ASSESSEE BY : SHRI BHAVIN SHAH WITH MS. VAIBHAV I PATEL (AR) / REVENUE BY : SHRI SAURABH DESHPANDE (DR ) ' / DATE OF HEARING : 08 -03-2017 ! '( / DATE OF PRONOUNCEMENT : 15 -03-2017 , 1961 ' 254(1) #$ ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER PAWAN SINGH, J.M. IOU IOUIOU IOU : 1. THIS APPEAL BY ASSESSEE U/S. 253 OF THE INCOME-TAX ACT (THE ACT) IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-1 5, MUMBAI (FOR SHORT THE CIT(A) DATED 25.10.2013 FOR ASSESSMENT YEAR (AY) 2008-09. THE AS SESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: (I) THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 2,16,986/- ON CORPORATE GUARANTEE GIVEN TO ASSOCIATED ENTERPRISE (AE). (II) THE LD. CIT(A) ERRED IN NOT ACCEPTING THE CLAIM OF DEPRECIATION OF RS. 11,90,285/- ON INTANGIBLE ASSETS ACQUIRED IN EARLIER YEAR. (III) THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF EXPENSES AMOUNTING TO RS. 1,56,87,826/- U/S 14A R.W.RULE 8D(III). (IV) THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 71,99,65/- IN RESPECT OF PROVISION FOR POST RETIREMENT MEDICAL SCHEME TREA TING A CONTINGENT LIABILITY. (V) THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE S OF RS. 5,24,659/- AS PRIOR PERIOD EXPENSES. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-COMPA NY IS ENGAGED IN THE BUSINESS OF EXPORT/IMPORT OF ALUMINA/ALUMINIUM, FERRO ALLOYS, S TEEL, MACHINE TOOLS ETC., FILED ITS RETURN OF INCOME FOR RELEVANT AY ON 29.09.2008. THE ASSESSING OFFICER (AO) WHILE FRAMING THE ASSESSMENT ORDER NOTICED THAT ASSESSEE HAS ENTE RED INTO INTERNATIONAL TRANSACTION WITH ITS AE. THUS, REFERENCE U/S 92CA(3) WAS MADE TO THE TRA NSFER PRICING OFFICER (TPO) FOR COMPUTATION OF ARMS LENGTH PRICE (ALP) IN RELATION TO INTERNATIONAL TRANSACTION WITH ITS AE. THE LD. TPO AFTER GIVING OPPORTUNITY OF HEARING TO THE ASSESSEE SUBMITTED ITS 2 ITA NO. 269/M/2014 M/S MAHINDRA INTERTRADE LTD. REPORT/ORDER DATED 20.01.2011 TO THE AO. THE LD. TP O DETERMINED THE ALP OF INTERNATIONAL TRANSACTION RELATING TO COST OF GUARANTEE FOR RS. 2 ,16,986/-. ON THE BASIS OF ORDER PASSED U/S 92CA(3) OF THE ACT BY TPO, THE AO ADDED RS. 2,16,98 6/- ON ACCOUNT OF CORPORATE GUARANTEE. THE AO FURTHER DISALLOWED A SUM OF RS. 1 ,56,87,826/- U/S 14A, DISALLOWED THE DEPRECIATION ON INTANGIBLE ASSETS AMOUNTING TO RS. 11,90,285/- AND RS. 7,19,695/- IN RESPECT OF PROVISION FOR POST RETIREMENT MEDICAL SCHEME AND RS. 5,24,659/- ON ACCOUNT OF PRIOR PERIOD EXPENSES. ON APPEAL BEFORE THE LD. CIT(A), T HE ADJUSTMENT ON ACCOUNT OF CORPORATE GUARANTEE AS WELL AS DISALLOWANCE WAS SUSTAINED. TH US, FURTHER AGGRIEVED BY THE ORDER OF LD. CIT(A), THE ASSESSEE HAS FILED THE PRESENT APPEAL B EFORE US. 3. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVE (AR ) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. FIRST GROUND OF APPEAL RELATES TO TRANSFER PRICING ADJUST MENT OF RS. 2,16,986/- ON ACCOUNT OF COMMISSION ON CORPORATE GUARANTEE. THE LD. AR OF TH E ASSESSEE ARGUED THAT THIS GROUND OF APPEAL IS COVERED IN FAVOUR OF ASSESSEE BY A NUMBER OF DECISION BY THE TRIBUNAL INCLUDING THE DECISION OF OF EVEREST KANTO CYLINDER LTD. IT W AS FURTHER ARGUED BY LD. AR OF THE ASSESSEE THAT THE TRIBUNAL IN CASE OF EVEREST KANTO CYLINDER LTD. VS. ACIT UPHELD THE GUARANTEE COMMISSION RATE BY .5% WHICH HAS BEEN CON FIRMED BY HONBLE JURISDICTIONAL HIGH COURT IN EVEREST KANTO CYLINDER LTD. (2012) 34 TAXMAN 19. ON THE OTHER HAND, LD. DR FOR THE REVENUE ARGUED THAT EACH AND EVERY CASE HAS TO BE ADJUDGED ON ITS OWN CASE AND THERE ARE VARIOUS CORPORATE GUARANTEE COMMISSIONS @ 2 TO 3% HAVE BEEN ACCEPTED. 4. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PART IES. BEFORE THE TPO WHILE CONSIDERING THE ADJUSTMENT OF ALP OBSERVED THAT ASSESSEE HAD GI VEN A CORPORATE GUARANTEE FOR THE BENEFIT OF ITS AE IN UNITED ARAB AMIRAT WHICH PRIMA-FACIE QUALIFIED AS AN INTERNATIONAL TRANSACTION. THE ASSESSEE HOWEVER, HAD NOT CONSIDER ED THE SAME TO BE AN INTERNATIONAL TRANSACTION. THE TPO FURTHER OBSERVED THAT ASSESSEE HAS GIVEN A CORPORATE GUARANTEE OF RS. 5.5 CRORE TO M/S MAHINDRA MIDDLE EAST SERVICES CENT RE (FZC). THE LD. TPO CALLED THE INFORMATION FROM THE UNION BANK OF INDIA. THE UNION BANK OF INDIA FURNISHED ITS REPLY AND DISCLOSED THAT BANK GUARANTEE WAS GIVEN FOR IMPORT OF L.C. OF RS. 5.5 CRORE AND THE BANK GUARANTEE WAS ENFORCED FROM 01.04.2009 TO 24.04.200 7. THE ASSESSEE FURTHER ASKED TO ESTABLISH THE ARMS LENGTH NATURE OF BANK GUARANTEE. THE ASSESSEE FURTHER FILED ITS REPLY AND CONTENDED THAT THE GUARANTEE DOES NOT FALL WITHIN T HE AMBIT OF INTERNATIONAL TRANSACTION OF HYDERABAD TRIBUNAL IN CASE OF M/S FOUR SOFT LTD. TH E CONTENTION OF ASSESSEE WAS NOT ACCEPTED BY TPO. THE TPO CONCLUDED THAT PROVIDING O F CORPORATE GUARANTEE IS AN INTERNATIONAL TRANSACTION. THE ASSESSEE HAS NOT ANY KIND OF BENCH MARK, THE TPO CONCLUDED 3 ITA NO. 269/M/2014 M/S MAHINDRA INTERTRADE LTD. THAT ASSESSEE HAS NOT DISCHARGED HIS PRIMARY ONUS O F BENCH MARKING FOR TRANSACTION AND PROCEEDED TO DETERMINE THE ALP. THE TPO FURTHER CON CLUDED THAT DURING THE RELEVANT YEAR, THE BANK RATE WAS 6% AND FOR THE WEEK ENDED ON 28.0 9.2007 UPTO 05.10.2007, THE RATE WAS 6% WHILE AVERAGE PLR RATE FOR THIS PERIOD WAS IN BE TWEEN 12.75 TO 13.25% AND WORKED OUT THE ALP ON CUP METHOD OF RS. 2,16,986/-. THE TPO SU GGESTED THE UPWARD ADJUSTMENT OF RS. 2,16,984/-. ON APPEAL BEFORE THE LD. CIT(A), TH E ADJUSTMENT WAS SUSTAINED HOLDING THAT RATE OF 6% ADOPTED BY TPO IS QUITE REASONABLE. 5. WE HAVE SEEN THAT RECENTLY THE SIMILAR GROUND OF AP PEAL CAME UP CONSIDERATION BEFORE THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN VIDEOCON INDU STRIES VS. DCIT IN ITA NO. 1310/MUM/2016 AND THE TRIBUNAL VIDE ORDER DATED 24. 02.2017 PASSED THE FOLLOWING ORDER: 10. HOWEVER, WE ARE NOT ENTERING INTO SEMANTICS OF THIS ARGUMENT AS TO WHETHER CORPORATE GUARANTEE IS AN INTERNATIONAL TRANSACTIO N OR NOT, BECAUSE BEFORE US, THE LD. COUNSEL MR. SONDE HAS MAINLY RAISED THE ISSUE THAT, BENCHMARKING IF AT ALL IS REQUIRED TO BE DONE, THEN SAME SHOULD BE DONE BY TAKING THE COR PORATE GUARANTEE COMMISSION RATE BETWEEN 0.25% AND 0.50% AND IN SUPPORT OF WHICH HE RELIED ON VARIOUS DECISIONS. HE HAS NOT STRESSED ON THIS ISSUE, WHETHER CORPORATE G UARANTEE IS AN INTERNATIONAL TRANSACTION OR NOT. WHENCE ASSESSEE BEFORE US IS NOT PURSUING T HE MATTER, WE ARE ALSO NOT INCLINED TO ADJUDICATE THE ISSUE. ON MERITS, LD. CIT DR TRIED T O JUSTIFY THE CHARGING OF TAXPUNDIT.ORG ITA NO.1310/M/2016 M/S. VIDECON INDUS TRIES LTD. 11 CORPORATE GUARANTEE COMMISSION @ 3% AND SUBMITTED THAT THERE ARE VARIOUS DECISIONS WHEREIN CORPORATE GUARANTEE COMMISSION OF 2% TO 3% HAVE BEE N ACCEPTED. 11. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND ON PERUSAL OF THE IMPUGNED ORDERS, WE FIND THAT IT IS AN UNDISPUTED FACT THAT THE ASSESSE E HAS GIVEN CORPORATE GUARANTEES TO FINANCIAL INSTITUTION/BANKS IN RESPECT OF LOAN OR C REDIT FACILITIES EXTENDED TO ITS TWO AES AND LETTER OF UNDERTAKING TO THE LENDERS IN THE CAS E OF ANOTHER AE. FOR PROVIDING SUCH CORPORATE GUARANTEE IT HAS RECOVERED 0.25% AS GUARA NTEE COMMISSION. IN SUPPORT OF CHARGING OF 0.25%, THE ASSESSEE, FIRST OF ALL, CONT ENDED THAT THE LOANS FOR WHICH THE ASSESSEE HAS GIVEN GUARANTEE ARE PRIMARILY COVERED BY PLEDGED SECURITIES, HYPOTHECATION OF DEBTORS BALANCES AND OTHER ASSETS OF THE AE, TH EREFORE, IT CANNOT BE SAID THAT THE ENTIRE SECURITY OF THE LOAN WAS BASED ON CORPORATE GUARANTEE GIVEN BY THE ASSESSEE. THE DETAILS OF LOANS VIS--VIS THE SECURITY THEREOF HAD ALREADY BEEN REPRODUCED ABOVE. IT HAS ALSO BEEN BROUGHT ON RECORD THAT STATE BANK OF INDI A HAS CHARGED BANK GUARANTEE COMMISSION TO ASSESSEE BY GIVING 50% CONCESSION ON THE RATE OF 1.75% WHICH WORKS OUT TO APPROXIMATELY 0.875%. IF VARIOUS FACTORS AND RISK INVOLVED ARE EVALUATED WHICH IS QUITE NORMAL UNDER THE FOREIGN GUARANTEE LIKE, COUN TRY RISK, CURRENCY RISK AND ENTITY RISK ETC., THEN CHARGING OF CORPORATE GUARANTEE COMMISSI ON WOULD FALL DOWN BELOW 0.5%. THUS, THIS CONSTITUTES A KIND OF INTERNAL CUP AVAIL ABLE TO THE ASSESSEE TO BENCHMARK THE TRANSACTION OF GIVING CORPORATE GUARANTEE/LETTER OF UNDERTAKING. MOREOVER, THERE ARE CATENA OF DECISIONS WHEREIN THIS TRIBUNAL HAS HELD THAT CORPORATE GUARANTEE COMMISSION AROUND 0.50% CAN BE ACCEPTED AS ALP. ACCORDINGLY, W E HOLD THAT THE CORPORATE GUARANTEE COMMISSION FEE WHICH IS TO BE RECOVERED F ROM AE SHOULD BE 0.50% WHICH WOULD MEET THE ARMS LENGTH REQUIREMENT. THUS, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DIRECT THE TPO/ASSESSING OFFICER TO TAKE T HE CORPORATE GUARANTEE FEE @ 0.50% AND MAKE THE ADJUSTMENT ACCORDINGLY. THUS, THE ISSU E OF CORPORATE GUARANTEE AS RAISED VIDE GROUND NOS. 1.1 TO 1.5 IS TREATED AS PARTLY AL LOWED. CONSIDERING THE DECISION OF CO-ORDINATE BENCH ON SI MILAR ISSUE, WE DIRECT THE AO TO EXCEED THE CORPORATE GUARANTEE FEES @ .5% AND MADE THE ADJ USTMENT ACCORDINGLY. THUS, GROUND 4 ITA NO. 269/M/2014 M/S MAHINDRA INTERTRADE LTD. NO.1 IS PARTLY ALLOWED. 6. GROUND NO.2 RELATES TO DISALLOWANCE OF DEPRECIATION OF RS. 11,90,285/- ON INTANGIBLE ASSETS. THE LD. AR OF THE ASSESSEE FAIRLY CONCEDED THAT THI S GROUND OF APPEAL IS COVERED AGAINST THE ASSESSEE IN ASSESSEES OWN CASE FOR AY 2009-10 IN I TA NO. 1822/MUM/2013 DATED 31.07.2015. THE LD. DR FOR THE REVENUE CONFIRMED TH E CONTENTION OF LD. AR OF THE ASSESSEE. CONSIDERING THE CONTENTION OF LD. AR OF THE ASSESSE E, THE GROUND NO.2 RAISED BY ASSESSEE IS DISMISSED. 7. GROUND NO.3 RELATES TO THE DISALLOWANCE OF RS. 1,56 ,87,826/- U/S 14A R.W. RULE 8D(III) OF THE ACT. THE LD. AR OF THE ASSESSEE ARGUED THAT THI S GROUND OF APPEAL IS COVERED IN FAVOUR OF ASSESSEE BY THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2009-10 IN ITA NO. 1822/MUM/2013 DATED 31 ST JULY 2015. IT WAS FURTHER ARGUED THAT ASSESSEE HAS OPENING SHARE CAPITAL ON FREE RESERVE OF RS. 9011.3 LAKHS AS AGAI NST THE INVESTMENT OF RS. 0.01 LAKHS ONLY AND CLOSING SHARE CAPITAL AND FREE RESERVE OF RS. 1 2389.88 LAKHS AS PER PAGE 9-14 OF PAPER BOOK (PB). ON THE OTHER HAND, LD. DR FOR THE REVENU E SUPPORTED THE ORDER OF AUTHORITIES BELOW. WE HAVE CONSIDERED THE RIVAL CONTENTION OF T HE PARTIES AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF THE PAR TIES AND NOTICED THAT THE SIMILAR ISSUE WAS ADJUDICATED BY THE TRIBUNAL FOR AY 2009-10 IN I TA NO. 1310/M/2013 AND IN CROSS APPEAL OF REVENUE VIDE ITA NO.1822/M/2013 DECIDED O N 31.07.2015. HENCE, WE RESTORE THIS GROUND OF APPEAL TO THE FILE OF AO TO DECIDE T HE ISSUE AFRESH IN ACCORDANCE WITH THE DIRECTION OF TRIBUNAL IN ORDER DATED 31.07.2015. BE FORE, PASSING ORDER THE AO SHALL GRANT OPPORTUNITY TO THE ASSESSEE TO PROVIDE NECESSARY I NFORMATION AND EVIDENCES IN THEIR POSSESSION. IN THE RESULT THIS GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 9. GROUND NO.4 RELATES TO DISALLOWANCE OF RS. 7,19,965 /- ON ACCOUNT OF PROVISIONS FOR POST RETIREMENT MEDICAL SCHEME. THE LD. AR OF THE ASSESS EE ARGUED THAT THIS ISSUE IS COVERED AGAINST THE ASSESSEE IN ASSESSEES OWN CASE FOR AY 2009-10 IN ITA NO. 1822/MUM/2013 DATED 31.07.2015. THE LD. DR FOR THE REVENUE NOT DI SPUTED THE CONTENTION OF LD. AR OF THE ASESSEE. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PARTIES AND SEEN THAT SIMILAR DISALLOWANCE WAS MADE AGAINST THE ASSESSEE IN THE A Y 2009-10 AND THE SAME WAS UPHELD BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL HOLDING AS U NDER: 6. THE THIRD ISSUE IN THIS APPEAL IS WITH REGARD T O AN AMOUNT OF RS. 9,46,480/- WHICH REPRESENTED LIABILITY TOWARDS POST RETIREMENT MEDIC AL CLAIM FOR THE EMPLOYEES. THE AO AS WELL AS THE LD. CIT(A) DECLINED THE CLAIM FOR DE DUCTION ON THE GROUND THAT IT WAS A CONTINGENT LIABILITY WHOSE OUTCOME WAS DEPENDENT ON CONTINGENT FACTORS OF FUTURE OBLIGATIONS. THE LD. CIT(A) FURTHER NOTICED THAT TH E IMPUGNED AMOUNT WAS NEITHER PAID TO THE EMPLOYEES DURING THE YEAR AND NOR IT WAS SET APART IN A SEPARATE FUND AND, 5 ITA NO. 269/M/2014 M/S MAHINDRA INTERTRADE LTD. THEREFORE, IT WAS AN UNASCERTAINED LIABILITY. 6.1 BEFORE US THE LD. REPRESENTATIVE FOR THE ASSESS EE FAIRLY CONCEDED THAT SIMILAR ISSUE CAME BEFORE THE TRIBUNAL IN THE CASE OF THE GROUP C ONCERN M/S. MAHINDRA &MAHINDRA LTD. FOR ASSESSMENT YEAR 2007-08 AND VIDE ORDER DAT ED 8/6/2012 IN ITA NO.7999/MUM/2011, SIMILAR LIABILITY HAS BEEN HELD T O BE AN UNASCERTAINED LIABILITY WHICH WAS NOT ALLOWABLE AS A DEDUCTION UNDER SECTIO N 37(1) OF THE ACT. FOLLOWING THE AFORESAID PRECEDENT, WE HEREBY AFFIRM THE STAND OF THE LOWER AUTHORITIES IN DECIDING THE ISSUE AGAINST THE ASSESSEE. THUS, ON THIS ASPECT AL SO ASSESSEE FAILS. 10. CONSIDERING THE DECISION OF CO-ORDINATE BENCH IN AS SESSEES OWN CASE FOR AY 2009-10, WHEREIN ORDER OF AY 2007-08 WAS FOLLOWED. THUS, FOL LOWING THE PRECEDING YEAR, THIS GROUND OF APPEAL IS DISMISSED. 11. GROUND NO.5 RELATES TO DISALLOWANCE OF PRIOR PERIOD EXPENSES. THE LD. AR OF THE ASSESSEE ARGUED THAT PRIOR PERIOD EXPENSES WERE RELATED WITH SERVICE TAX COVERED U/S 43B AND IS ALLOWABLE EXPENSES IN THE YEAR WHEN PAYMENT WAS MAD E. ON THE OTHER HAND, LD. DR FOR THE REVENUE RELIED UPON THE ORDERS OF AUTHORITIES BELOW . 12. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PART IES AND GONE THROUGH THE ORDER OF AUTHORITIES BELOW. THE AO DURING THE ASSESSMENT OBS ERVED FROM THE TAX AUDIT REPORT (TAR) THAT ASSESSEE HAS CLAIMED SERVICE TAX EXPENSE S OF RS. 5,24,659/- UNDER THE PRIOR PERIOD EXPENSES. THE ASSESSEE WAS ASKED TO GIVE EXP LANATION WITH REGARD TO THE SAID EXPENSES, THE ASSESSEE FILED ITS REPLY AND CONTENDE D THAT ALTHOUGH THE STATUTORY EXPENSES RELATES TO PRIOR YEARS WHEN THOSE WERE ADOPTED TO P & L A/C OF FY 2007-08 AND CRYSTALLIZES IN THE ORDER UNDER REFERENCE. IT WAS FURTHER CONTEN DED THAT THESE EXPENSES ARE REGULAR IN NATURE AND CANNOT BE DISALLOWED AS EXPENSES FOR THI S YEAR. THE AO NOT ACCEPTED THE CONTENTION OF THE ASSESSEE HOLDING THAT ASSESSEE IS FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING AND THE AMOUNT IS INADMISSIBLE AS IT DOE S NOT PERTAIN TO THE PERIOD FOR WHICH INCOME IS BEING ASSESSED. THE LD. CIT(A) WHILE CONS IDERING THIS GROUND OF APPEAL CONCLUDED THAT ASSESSEE CONTENDED THAT THIS AMOUNT HAS BEEN PAID ON 07.05.2007 AND CLAIMED DEDUCTION U/S 43B OF THE ACT. HOWEVER, THE ASSESSEE HAS NOT BROUGHT ON RECORD THE EVIDENCE THAT THIS EXPENDITURE WAS DEBITED TO THE P & L A/C ON PRECEDING YEAR AND CONFIRMED THE ACTION OF AO. 13. WE HAVE NOTICED THAT ASSESSEE HAS NOT FILED ANY DOC UMENTARY EVIDENCE EVEN BEFORE US TO SUBSTANTIATE HIS CLAIM OR THE PAYMENT RECEIPT WITH REGARD TO SERVICE TAX FOR CLAIMING EXEMPTION U/S 43B OF THE ACT. HOWEVER, CONSIDERING THE CONTENTION OF LD. AR OF THE ASSESSEE, WE RESTORE THIS GROUND OF APPEAL TO THE F ILE OF AO TO EXAMINE THE ISSUE AFRESH, IF THE CLAIM OF THE ASSESSEE IS COVERED BY THE PREVISI ON OF SECTION 43B OF THE ACT AND PASSED THE ORDER IN ACCORDANCE WITH LAW. NEEDLESS TO SAY T HAT THE AO SHALL PROVIDE SUFFICIENT OPPORTUNITY TO THE ASSESSEE BEFORE PASSING THE ORDE R. THE ASSESSEE IS ALSO DIRECTED TO FILE THE 6 ITA NO. 269/M/2014 M/S MAHINDRA INTERTRADE LTD. COMPLETE/DETAILS INFORMATION AND EVIDENCE WITH REGA RD TO ADMISSIBILITY OF CLAIM BEFORE THE AO. THUS, THIS GROUND OF APPEAL IS ALLOWED FOR STAT ISTICAL PURPOSE. 14. AS A RESULT, APPEAL FILED BY ASSESSEE IS PARTLY ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH MARCH 2017. + ! , - 15 EKPZ , 201 7 ! 12 3 SD/- SD/- ( / RAJENDRA ( IOU IOUIOU IOU / PAWAN SINGH)) ( / ACCOUNTANT MEMBER # ( / JUDICIAL MEMBER 2 /MUMBAI, - /DATE: 15.03.2017 SK ' )*+ ,+ / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ 45 ( 6' , 4. THE CONCERNED CIT / 45 6' 5. DR K BENCH, ITAT, MUMBAI / 781 '95 DS DSDS DS , . . . 2 6. GUARD FILE/ 1 2 7' /TRUE COPY// + / BY ORDER, / DY./ASST. REGISTRAR ( 95 , 2 /ITAT, MUMBAI