TOKHEIM INDIA PVT. LTD., NAVI MUMBAI V. DCIT CIR. - 10 (3), MUMBAI

ITA 2737/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0760 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 15-02-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 13-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: JITENDRA SINGH
• Keywords: Capital asset; Depreciation; Bad and doubtful debts; Corroborative evidences; Revenue expenditure
• Section: 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA NO .2737 /MUM. /2016 ( ASSESSMENT YEAR : 2010 11 ) M/S. TOKHEIM INDIA PVT. LTD. A 174, TTC INDUSTRIAL AREA KHARINE VILLAGE, MIDC NAVI MUMBAI 400 709 PAN AACCK3414F . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CIRCLE 10(3), MUMBAI . RESPONDENT ITA NO .2668/MUM./2016 ( ASSESSMENT YEAR : 2010 11 ) DY. COMMISSIONER OF INCOME TAX CIRCLE 10(3), MUMBAI . APPELLANT V/S M/S. TOKHEIM INDIA PVT. LTD. A 174, TTC INDUSTRIAL AREA KHARINE VILLAGE, MIDC NAVI MUMBAI 400 709 PAN AACCK3414F . RESPONDENT 2 M/S. TOKHEIM INDIA PVT. LTD. C.O. NO.81/MUM./2017 ( ARISING OUT OF ITA NO .2668 /MUM./2016 ) ( ASSESSMENT YEAR : 2010 11 ) M/S. TOKHEIM INDIA PVT. LTD. A 174, TTC INDUSTRIAL AREA KHARINE VILLAGE, MIDC NAVI MUMBAI 400 709 PAN AACCK3414F . CROSS OBJECTOR (ORIGINAL RESPONDENT) V/S DY. COMMISSIONER OF INCOME TAX CIRCLE 15(3)(1), MUMBAI . RESPONDENT (ORIGINAL APPELLANT) ASSESSE E BY : SHR I JITENDRA SINGH REVENUE BY : SHR I SAURABH KUMAR RAI DATE OF HEARING 10.01.2018 DATE OF ORDER 19.01.2018 O R D E R PER SAKTIJIT DEY, J.M. CAPTIONED APPEALS AND THE CROSS OBJECTION ARIS E OUT OF COMMON ORDER DATED 14 TH JANUARY 2016, PASSED BY THE LEARNED COMMISSIONER (APPEALS) 24, MUMBAI, FOR THE ASSESSMENT YEAR 2010 11. ITA NO. 2737 /MUM./201 6 ASSESSEES APPEAL 2 . GROUND NO.4 IS OF GENERAL IN NATURE, HENCE, DOES NOT REQUIRE ADJUDICATION. 3 . IN GROUND NO.1, THE ASSESSEE HAS CHALLENGED DISALLOWANCE OF BAD DEBT OF ` 35,50,044. 3 M/S. TOKHEIM INDIA PVT. LTD. 4 . BRIEF FACTS ARE, THE ASSESSEE A COMPANY IS STATED TO BE ENGAGED IN THE BUSINESS OF ASSEMBLING AND SELLING RANGE OF FUEL DISPENSERS, OIL STATION MANAGEMENT SYSTEM AND PROVIDING MAINTENANCE SERVICE CATERING TO DOWN STREAM OIL RETAIL INDUSTRIES. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 30 TH SEPTEMBER 2010, DECLARING LOSS OF ` 1,54,68,900. DURING THE ASSESSMENT PROCEEDING, THE ASSESSING OFFICER NOTICING THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF ` 35,50,044, TO THE PROFIT & LOSS ACCOUNT TOWARDS BAD DEBT WRITTEN OFF CALLED UPON THE ASSESSEE TO FURNISH NECESSARY DETAILS AND JUSTIFY THE CLAIM . A LLEGING THAT THE ASSESSEE FAILED TO FURNISH ANY DETAILS JUSTIFYING ITS CLAIM THE ASSESSING OFFICER DISALLOWED THE DEDUCTION CLAIMED. BEING AGGRIEVED OF THE DISALLOWANCE MADE, ASSESSEE PREFERRED APPEAL BEFO RE THE FIRST APPELLATE AUTHORITY. 5 . IN THE COURSE OF HEARING OF APPEAL BEFORE THE LEARNED COMMISSIONER (APPEALS), THE ASSESSEE PRODUCED SUPPORTING EVIDENCE TO JUSTIFY THE DEDUCTION CLAIMED. ON THE BASIS OF EVIDENCE PRODUCED BY THE ASSESSEE, THE LEARNED COMM ISSIONER (APPEALS) DIRECTED TH E ASSESSING OFFICER TO EXAMINE THEM AND SUBMIT HIS REPORT. AFTER VERIFYING THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER, THE LEARNED COMMISSIONER (APPEALS) OBSERVED THAT IN RESPECT OF IMPUGNED ASSESSMENT YEAR NEITHER T HE ASSESSEE HAS SUBMITTED ANY SUPPORTING 4 M/S. TOKHEIM INDIA PVT. LTD. EVIDENCE TO JUSTIFY THE CLAIM NOR HAS FILED ANY REJOINDER AGAINST THE REMAND REPORT. ACCORDINGLY, HE CONFIRMED THE DISALLOWANCE. 6 . LEARNED AUTHORISED REPRESENTATIVE SUBMITTED BEFORE US , ALL THE DETAILS RELATING TO CLAIM OF BAD DEBT WAS FILED NOT ONLY AT THE ASSESSMENT STAGE BUT ALSO BEFORE THE FIRST APPELLATE AUTHORITY AND DURING THE REMAND PROCEEDINGS. IN THIS CONTEXT, HE DREW OUR ATTENTION TO THE PARTY WISE DETAILS OF BAD DEBT AS ENCLO SED IN THE PAPER BOOK. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED, THOUGH, THE ASSESSEE SUBMITTED THE DETAILS OF BAD DEBT FOR THE ASSESSMENT YEARS 2009 10 AND 2010 11, HOWEVER, THE LEARNED COMMISSIONER (APPEALS) ACCEPTING THE GENUINENESS OF THE EVIDEN CES SUBMITTED, THOUGH, ALLOWED THE CLAIM OF THE ASSESSEE IN THE ASSESSMENT YEAR 2009 10, HOWEVER, HE SUSTAINED THE DISALLOWANCE FOR THE IMPUGNED ASSESSMENT YEAR. IN THIS CONTEXT, HE DREW OUR ATTENTION TO THE OBSERVATIONS OF THE FIRST APPELLATE AUTHORITY IN THE APPEAL ORDER PASSED FOR THE ASSESSMENT YEAR 2009 10. LEARNED AUTHORISED REPRESENTATIVE DRAWING OUR ATTENTION TO THE WRITTEN SUBMISSION FILED BEFORE THE FIRST APPELLATE AUTHORITY ON 16 TH APRIL 2015 SUBMITTED, THOUGH, THE ASSESSEE MADE SUBMISSIONS JUSTI FYING IT S CLAIM OF DEDUCTION OF BAD DEBT WITH SUPPORTING EVIDENCE, THE LEARNED COMMISSIONER (APPEALS) COMPLETELY IGNORED THE CLAIM OF THE ASSESSEE. HE SUBMITTED , THE DETAILS SUBMITTED CLEARLY REVEALED THAT THE BAD DEBTS AROSE IN THE COURSE OF REGULAR 5 M/S. TOKHEIM INDIA PVT. LTD. BUSIN ESS OF THE ASSESSEE AND WERE OFFERED AS INCOME IN THE EARLIER ASSESSMENT YEARS. HE SUBMITTED, SINCE THE AMOUNT WAS ACTUALLY WRITTEN OFF IN THE BOOKS OF ACCOUNT NO DISALLOWANCE CAN BE MADE IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN TRF LTD. V/S CIT, [2010] 230 ITR 14 (SC). 7 . LEARNED DEPARTMENTAL REPRESENTATIVE RELYING UPON THE OBSERVATIONS OF THE DEPARTMENTAL AUTHORITIES SUBMITTED , IN THE ABSENCE OF SUPPORTING EVIDENCE, ASSESSEE S CLAIM COULD NOT HAVE BEEN ALLOWED. 8 . WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED MATERIAL ON RECORD. AS IT APPEARS FROM FACTS ON RECORD, DISALLOWANCE OF CLAIM OF BAD DEBT WAS MADE IN IDENTICAL MANNER FOR THE ASSESSMENT YEARS 2009 10 AND 2010 11. BEFORE THE FIRST APPELLATE AUTHORITY, THE ASSESSEE PRODUCED SUPPORT ING EVIDENCE JUSTIFYING ITS CLAIM OF BAD DEBT IN BOTH THESE ASSESSMENT YEARS AND ON THE BASIS OF EVIDENCES SUBMITTED BY THE ASSESSEE, FIRST APPELLATE AUTHORITY CALLED UPON THE ASSESSING OFFICER TO EXAMINE THE EVIDENCE AND SUBMIT HIS REPORT. ON A PERUSAL OF THE REMAND REPORT DATED 14 TH OCTOBER 2015 SUBMITTED BY THE ASSESSING OFFICER IT APPEARS THAT IT IS A COMBINED REPORT FOR THE ASSESSMENT YEAR S 2009 10 AND 2010 11. FURTHER, ON A PERUSAL OF THE SAID REMAND REPORT, IT IS EVIDENT THE ASSESSING OFFICER HAS NOT MADE ANY COMMENT WITH REGARD TO ASSESSEES CLAIM OF BAD DEBT. HOWEVER, THE FIRST 6 M/S. TOKHEIM INDIA PVT. LTD. APPELLATE AUTHORITY ON INDEPENDENTLY EXAMINING THE EVIDENCE BROUGHT ON RECORD AND TAKING NOTE OF THE FACT THAT THE ASSESSING OFFICER HAS NOT MADE ANY ADVERSE COMMENT IN THE R EMAND REPORT ALLOWED ASSESSEES CLAIM OF BAD DEBT IN ASSESSMENT YEAR 2009 10 . ON A PERUSAL OF SUBMISSIONS DATED 16 TH APRIL 2015, A COPY OF WHICH IS AT PAGE 24 OF THE PAPER BOOK, IT IS EVIDENT IN PARA 7.1 OF THE SAID SUBMISSIONS, THE ASSESSEE HAS NOT ONLY J USTIFIED ITS CLAIM OF BAD DEBT BUT HAS ALSO FURNISHED SUPPORTING EVIDEN CE LIKE PARTY WISE DETAILS OF BAD DEBT , AMOUNT WRITTEN OFF, ETC. WHEN, ON THE BASIS OF SIMILAR EVIDENCE THE FIRST APPELLATE AUTHORITY HAS ALLOWED ASSESSEES CLAIM FOR THE ASSESSMENT YEA R 2009 10, WE FAIL TO UNDERSTAND WHY IT WAS NOT ALLOWED FOR THE IMPUGNED ASSESSMENT YEAR. FURTHER, WHEN THE ASSESSING OFFICER HAS NOT OFFERED ANY ADVERSE COMMENT WITH REGARD TO CLAIM OF BAD DEBT IN THE REMAND REPORT , WHAT FURTHER REJOINDER WAS EXPECTED FRO M THE ASSESSEE. AS IT APPEARS, THE FIRST APPELLATE AUTHORITY WITHOUT PROPERLY APPLYING HIS MIND TO THE EVIDENCE S BROUGHT ON RECORD HAS SUSTAINED THE DISALLOWANCE. THEREFORE, WE ARE OF THE OPINION THAT NO DISALLOWANCE IS REQUIRED TO BE MADE. ACCORDINGLY, WE DELETE THE ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE FIRST APPELLATE AUTHORITY. GROUND NO.1 IS ALLOWED. 9 . IN G ROUND NO.2, ASSESSEE HAS CHALLENGED DISALLOWANCE OF ` 4,22,090, REPRESENTING WRITE OFF OF ADVANCE TO EMPLOYEES. 7 M/S. TOKHEIM INDIA PVT. LTD. 10 . BRIEF FACTS ARE, DURING THE ASSESSMENT PROCEEDING, THE ASSESSING OFFICER NOTICING THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF ` 4,22,090 TOWARDS WRITE OFF OF ADVANCE GIVEN TO EMPLOYEES CALLED UPON THE ASSESSEE TO JUSTIFY ITS CLAIM . A LLEGING THAT THE ASSESSE E FAILED TO FURNISH SUPPORTING DETAILS THE ASSESSING OFFICER DISALLOWED AND ADDED BACK THE AMOUNT OF ` 4,22,090. THE ASSESSEE CHALLENGED THE DISALLOWANCE BEFORE THE FIRST APPELLATE AUTHORITY. 11 . THE LEARNED COMMISSIONER (APPEALS) AFTER PERUSING THE REMAND RE PORT SUBMITTED BY THE ASSESSING OFFICER SUSTAINED THE DISALLOWANCE BY FOLLOWING HIS ORDER ON IDENTICAL ISSUE PASSED FOR THE ASSESSMENT YEAR 2009 10. 12 . LEARNED AUTHORISED REPRESENTATIVE SUBMITTED BEFORE US THAT AS PER THE DEMANDS OF ITS BUSINESS, THE ASSESSE E HAS TO GIVE ADVANCE TO ITS EMPLOYEES FOR TRAVELLING EXPENSES FOR PURCHASE OF RAW MATERIAL, SPARE PARTS, ETC. HE SUBMITTED THAT SOME OF THE EMPLOYEES LEFT THEIR JOB WITHOUT SUBMITTING THE DETAILS OF EXPENSES INCURRED BY THEM AGAINST THE ADVANCE RECEIVED. THEREFORE, AMOUNT OF ADVANCE WHICH REMAINED UNADJUSTED AND OUTSTANDING HAD TO BE WRITTEN OFF IN THE BOOKS AS THEY CANNOT BE RECOVERED. HE SUBMITTED , ALL THE DETAILS WERE FURNISHED BEFORE THE DEPARTMENTAL AUTHORITIES , WITHOUT PROPERLY EXAMINING THEM DISALLO WANCE HAS BEEN MADE. HOWEVER, THE LEARNED 8 M/S. TOKHEIM INDIA PVT. LTD. AUTHORISED REPRESENTATIVE FAIRLY SUBMITTED THAT SIMILAR DISALLOWANCE MADE IN ASSESSMENT YEAR 2009 10, THOUGH, WAS SUSTAINED BY THE FIRST APPELLATE AUTHORITY, THE ASSESSEE HAS NOT CON TESTED THE SAME. 13 . LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE DECISION OF THE LEARNED COMMISSIONER (APPEALS). 14 . WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED MATERIAL ON RECORD. AS COULD BE SEEN, THE DISALLOWANCE OF ADVANCE GIVEN TO EMPLOYEES BEING WRITTEN OFF WAS PRIMARILY MADE IN THE ABSENCE OF SUPPORTING DETAILS AND EVIDENCE. FOR THIS VERY REASON, SIMILAR DISALLOWANCE WAS MADE IN ASSESSMENT YEAR 2009 10, WHICH HAS BEEN ACCEPTED BY THE ASSESSEE. IN THE IMPUGNED ASSESSMENT YEAR ALSO, THE FACTUAL POSITION IS NO DIFFEREN T. E XCEPT FURNISH ING THE NAME OF SOME PERSONS WITH AMOUNTS WRITTEN AGAINST THEIR NAMES NO OTHER DETAILS OR SUPPORTING EVIDENCE HAVE BEEN PRODUCED BY THE ASSESSEE TO DEMONSTRATE ADVANCEMENT OF MONEY TO THE CONCERNED PERSONS. NO SUPPORTING BILLS / VOUCHERS HAVE BEEN P RODUCED EITHER BEFORE THE DEPARTMENTAL AUTHORITIES OR BEFORE US. IN VIEW OF THE AFORESAID, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) ON THIS ISSUE. GROUND NO.2, IS DISMISSED. 15 . IN GROUND NO.3, THE ASSESSEE HAS CHALLENGED DISALLOWANCE OF ` 52,329, TOWARDS DELAYED PAYMENT OF EMPLOYEES CONTRIBUTION TO P.F. 9 M/S. TOKHEIM INDIA PVT. LTD. 16 . BRIEF FACTS ARE, DURING THE ASSESSMENT PROCEEDING, THE ASSESSING OFFICER NOTICING THAT EMPLOYEES CONTRIBUTION TO PROVIDENT FU ND (P.F) AMOUNTING TO ` 52,329, WAS NOT PAID WITHIN THE DUE DATE AS PER EXPLANATION TO SECTION 36(1)(VA) OF THE ACT DISALLOWED THE SAME. 17 . THE LEARNED COMMISSIONER (APPEALS) ALSO SUSTAINED THE DISALLOWANCE. 18 . WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED MATERIAL ON RECORD. IT IS EVIDENT, THE ONLY REASON FOR DISALLOWANCE OF PAYMENT MADE TOWARDS EMPLOYEES CONTRIBUTION TO P.F. IS , SUCH PAYMENT WAS NOT MADE WITHIN THE DUE DATE AS PROVIDED UNDER EXPLANATION 2 TO SECTION 36(1)(VA) OF THE ACT. HOWEVER, THERE IS NO DISPUTE TO THE FACT THAT SUCH PAYMENTS WERE MADE BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR. THAT BEING THE CASE, FOLLOWING THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN HINDUSTAN ORGANICS LTD. V/S CIT , 366 ITR 001 WE ALLOW ASSESSEES CLAIM OF DEDUCTION. THE ADDITION MADE IS DELETED. GROUND NO.3, IS ALLOWED. 19 . IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. ITA NO.2668/MUM./2016 REVENUES APPEAL 20 . IN GROUND NO.1, THE REVENUE HAS CHALLENGED ALLOWANCE OF WARRANTY EXPENDITURE CLAIMED BY THE ASSESSEE. 10 M/S. TOKHEIM INDIA PVT. LTD. 21 . BRIEF FACTS ARE, DURING THE COURSE OF ASSESSMENT PROCEEDING, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF ` 32,55,695, TOWARDS WARRANTY EXPENSES. WHEN HE CALLED UPON THE ASSESSEE TO JUSTIFY THE SAME, IT WAS FOUND THAT SUCH CLAIM WAS COMPUTED ON PROVISIONAL BASIS @ 3% OF THE SALES. THE ASSESSING OFFICER BEING OF THE VIEW THAT THE EXPENDITURE CLAIMED WAS MERELY A PROVISION , DISALLOWED THE SAME AND ADDED BACK TO THE INCOME OF THE ASSESSEE. 22 . THE LEARNED COMMISSIONER (APPEALS) FOLLOWING HIS DECISION IN ASSESSEES OWN CASE FOR A.Y. 2009 10, ALLOWED ASSESSEES CLAIM. 23 . LEARNED DEPARTMENTAL REPRESENTATIVE RELYING UPON T HE OBSERVATIONS OF THE ASSESSING OFFICER SUBMITTED THAT THE DEDUCTION CLAIMED BEING IN THE NATURE OF A PROVISION CANNOT BE ALLOWED UNDER SECTION 37(1) OF THE ACT. 24 . LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , THOUGH THE ASSESSEE HAS COMPUTED THE EXPENSES T OWARDS WARRANTY @ 3% OF THE SALES, HOWEVER, IT CANNOT BE CONSIDERED TO BE PROVISIONAL / UN ASCERTAINED IN NATURE SINCE IT HAS BEEN COMPUTED ON A SCIENTIFIC BASIS. HE SUBMITTED, IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2007 08, THE TRIBUNAL ALLOWED ASSESS EES CLAIM , SINCE , IT WAS ON THE BASIS OF PAST EXPERIENCE AND SCIENTIFIC BASIS. IN THIS CONTEXT, HE DREW OUR 11 M/S. TOKHEIM INDIA PVT. LTD. ATTENTION TO THE ORDER PASSED BY THE TRIBUNAL IN ITA NO.7351/MUM./2010 DATED 1 ST JULY 2015. WITHOUT PREJUDICE TO THE AFORESAID CONTENTION, LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , THE ASSESSEE THOUGH HAS CLAIMED DEDUCTION OF PROVISIONS MADE TOWARDS WARRANTY EXPENSES AMOUNTING TO ` 32,55,695 IN THE IMPUGNED ASSESSMENT YEAR, HOWEVER , IT HAS OFFERED IT AS INCOME IN ASSESSMENT YEAR 2011 12. THEREFORE, ANY DISALLOWANCE IN THE IMPUGNED ASSESSMENT YEAR WOULD AMOUNT TO DOUBLE TAXATION OF THE SAME INCOME. 25 . WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED MATERIAL ON RECORD. IT IS THE SPECIFIC C ONTENTION OF THE ASSESSEE BEFORE US THAT THE DISPUTED AMOUNT CLAIMED AS DEDUCTION IN THE IMPUGNED ASSESSMENT YEAR HAS BEEN OFFERED AS INCOME IN THE SUBSEQUENT ASSESSMENT YEAR I.E., ASSESSMENT YEAR 2011 12. IF THE AFORESAID CLAIM OF THE ASSESSEE IS CORRECT , THEN , UPHOLDING OF DISALLOWANCE IN THE IMPUGNED ASSESSMENT YEAR WOULD AMOUNT TO ADDITION OF THE SAME INCOME IN TWO ASSESSMENT YEARS , WHICH IN OUR VIEW SHOULD NOT BE MADE. CONSIDERING THE AFORESAID FACTUAL POSITION, WE DIRECT THE ASSESSING OFFICER TO ALLOW ASSESSEES CLAIM OF DEDUCTION OF PROVISIONS MADE FOR WARRAN T Y EXPENSES IN THE IMPUGNED ASSESSMENT YEAR SUBJECT TO VERIFICATION OF THE FACT THAT THE AMOUNT IN QUESTION WAS OFFERED AS INCOME IN 12 M/S. TOKHEIM INDIA PVT. LTD. ASSESSMENT YEAR 2011 12. THIS GRO UND IS CONSIDERED TO BE ALLOWE D FOR STATISTICAL PURPOSES. 26 . IN GROUND NO.2, REVENUE HAS CHALLENGED THE DECISION OF THE LEARNED COMMISSIONER (APPEALS) IN ALLOWING THE EXPENDITURE ON CONSUMABLES. 27 . BRIEF FACTS ARE, DURING THE ASSESSMENT PROCEEDING, THE ASSESSING OFFICER NOTICING THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF ` 6,73,089, AS CONSUMABLE EXPENDITURE CALLED FOR THE NECESSARY DETAILS FROM THE ASSESSEE AND ALSO DIRECTED THE ASSESSEE TO JUSTIFY THE CLAIM. IN RESPONSE, IT WAS SUBMITTED BY THE ASSESSEE THAT IT HAD PURCHASED A MATERIAL CALLED I SOPAR FOR TESTING OF DISPENSARY. IT WAS SUBMITTED , SINCE , THE MATERIAL PURCHASED WAS CONSUMED IN THE PROCESS FOR THE PURPOSE THE ASSESSEE HAS CLAIMED IT AS RE VENUE EXPENDITURE. THE ASSESSING OFFICER WAS, HOWEVER, NOT CONVINCED WITH THE SUBMISSIONS OF THE ASSESSEE. HE WAS OF THE VIEW THAT THE MATERIAL PURCHASED BY THE ASSESSEE IS A CAPITAL ASSET, HENCE, IS TO BE CAPITALIZED. ACCORDINGLY, DISALLOWING ASSESSEES C LAIM OF REVENUE EXPENDITURE HE ALLOWED DEPRECIATION @ 7.5% ON THE AMOUNT EXPENDED WHICH WORKED OUT TO ` 50,482. 13 M/S. TOKHEIM INDIA PVT. LTD. 28 . THE LEARNED COMMISSIONER (APPEALS) FOLLOWING HIS DECISION ON IDENTICAL ISSUE IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009 10, ALLOWED ASSESS EES CLAIM. 29 . WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED MATERIAL ON RECORD. AFTER CONSIDERING THE FACTUAL ASPECT OF THE ISSUE, WE ARE OF THE VIEW THAT THE EXPENDITURE INCURRED BY THE ASSESSEE IS IN RESPECT OF A MATERIAL WHICH IS IN THE NATURE OF CONSUMABL E. THIS FACT IS VERY MUCH EVIDENT FROM THE DISCUSSION OF THE FIRST APPELLATE AUTHORITY WHILE DEALING WITH IDENTICAL ISSUE IN ASSESSEES OWN C ASE FOR ASSESSMENT YEAR 2009 10, ACOPY OF WHICH WAS PLACED BEFORE US. THE ASSESSING OFFICER WITHOUT PROPERLY VERIFY ING THE FACTS HAS DISALLOWED ASSESSEES CLAIM. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE DECISION OF THE FIRST APPELLATE AUTHORITY ON THIS ISSUE. GROUND NO.3 IS DISMISSED. 30 . IN THE RESULT, REVENUES APPEAL IS DISMISSED. C.O. NO. 81 /MUM./201 7 BY ASSESSEE 31 . IN VIEW OF OUR DECISION IN GROUND NO.1, RAISED BY THE REVENUE IN ITS APPEAL BEING ITA NO.2668/MUM./2016, GROUND RAISED BY THE ASSESSEE IN THE PRESENT CROSS OBJECTION BECOMES INFRUCTUOUS, HENCE, DISMISSED. 32 . IN THE RESULT, CROSS OBJECTION IS DISMISSED. 14 M/S. TOKHEIM INDIA PVT. LTD. 33 . TO SUM UP, ASSESSEES APPEAL IS PARTLY ALLOWED, REVENUES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT O N SD/ - MANOJ KUMAR AGGARWAL ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED : 19.01.2018 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 (DY./ASSTT. REGISTRAR) ITAT, MUMBAI . 15 M/S. TOKHEIM INDIA PVT. LTD. DATE INITIAL 1. DRAFT DICTATED ON 12. 01.2018 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 15 . 01.2018 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 19 . 01.2018 SR.PS 6. DATE OF PRONOUNCEMENT 19 . 01.2018 SR.PS 7. FILE SENT TO THE BENCH CLERK 19 . 01.2018 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER