M/s. OCL India Ltd., New Delhi V. Addl. CIT, New Delhi

ITA 3202/DEL/2011

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0108 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 16-06-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 14-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Capital asset; Depreciation; Revenue expenditure; Capital expenditure
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E , NEW DELHI EFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO. 2843 /DEL/201 1 AY: 2005 - 06 ACIT, CIRCLE 1 3(1) VS. OCL INDIA LTD. ROOM NO.406 B 47, C.P. C.R.BDLG., IP ESTATE NEW DELHI 110 001 NEW DELHI PAN: AA ACO 1354 J ITA NO. 3202 /DEL/201 1 AY: 2005 - 06 OCL INDIA LTD., NEW DELHI VS. ACIT, NEW DELHI ITA NO. 3203/DEL/2011 AY: 2006 - 07 OCL INDIA LTD. VS. ACIT, N.DELHI NEW DELHI (APPELLANT) (RESPONDENT) A SSESSEE BY : SH . RAM MEHTA, ADV. DEPT. BY : SH. P.DAMKANUNJA, SR.D.R. ORDER PER J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA 2843/DEL/11 AND ITA 3202/DEL/11 ARE CROSS APPEALS PERTAINING TO THE A.Y. 2005 - 06 AND ITA 3203/DEL/11 IS FILED BY THE ASSESSEE FOR THE A.Y. 2006 - 07 AGAINST THE ORDER OF LD.CIT(A) - XVIII, NEW DELHI DATED 24.2.2011. ITA 2843/DEL/2011 ITA 3202 & 3203 /DEL/2011 A.Y. 2005 - 06 AND 2006 - 07 OCL INDIA LTD., NEW DELHI 2 2. FACTS IN BRIEF: - THE ASSESSEE IS A COMPANY ENGAGED IN THE MANUFACTURE AND SALE OF CEMENT, REFRACTORY AND SPONGE IRON. THE ISSUES THAT ARISE FOR OUR CONSIDERATION IN THE ASSESSEE S APPEAL ARE DISALLOWANCES MADE BY THE A.O. AND CONFIRMED BY THE FIRST APPELLATE AUTHORITY. WE SHALL DEAL W ITH THEM IN SERIATIM. 3. WE HAVE HEARD SHRI R.M.MEHTA, THE LD.COUNSEL FOR THE ASSESSEE AND SHRI P.DHAMKANUNJNA, LD.SR.D.R. ON BEHALF OF THE REVENUE . 4. WE HAVE GONE THROUGH THE ELABORATE SUBMISSIONS FURNISHED AS WELL AS THE PAPERS REFERRED TO IN THE PAPER BOOK FILED BEFORE US. WE HAVE PERUSED THE DECISIONS CITED BY BOTH THE SIDES. 5. ITA 3202/DEL/2011: THIS IS ASSESSEE S APPEAL. 5.1. THE FIRST DIS ALLOWANCE IS OF PAYMENT ON ACCOUNT OF TECHNICAL KNOW - HOW. THE FACTS ARE BROUGHT OUT IN A NOTE DT. 23 RD JANUARY, 2008 WHICH IS AT PAGE 3 OF THE ASSESSEE S PAPER BOOK WHICH IS EXTRACTED FOR READY REFERENCE. M/S OCL INDIA LTD. ENTERED INTO AN AGREEMENT WITH M/S. GLENN RAY TRAPP IN NOVEMBER, 2005 FOR A PERIOD OF 4 YEARS I.E. UPTO NOVERNBER 2009. MR GLENN TRAPP HAS BEEN ENGAGED TO HAVE HIS KNOWLEDGE IN REGARD TO CONTINUOUS CASTING REFRACTORIES. THIS KNOWLEDGE IS BEING PROVIDED BY HIM PURELY FROM HI S MEMORY AND EXPERIENCE AND NOT BY WAY OF ANY WRITTEN MANUAL. THE MOST IMPORTANT REASON FOR ENGAGING HIM WAS THAT HE HAD CLAIMED TO PROVIDE NIL REJECTION I.E. 100% RECOVERY AND THERE BY INCREASE IN THROUGHPUT. BUT TILL DATE THERE HAS NEITHER BEEN ANY C ONSISTENT DECREASE IN REJECTION RATE NOR INCREASE IN PRODUCTION USING THE KNOWLEDGE PROVIDED BY HIM IN TITS AND BITS. GIVEN BELOW IS THE DATE OF THE MONTH WISE PRODUCTION AND RECOVERY % STARTING FROM 1 ST APRIL, 2005 TO TILL DATE WHICH WILL SHOW THAT THERE HAS BEEN NO IMPROVEMENT IN RECOVERY %. IN FACT, EVEN THE PRODUCTS THAT WERE PRODUCED USING THE KNOWLEDGE PROVIDED BY HIM, HAVE FAILED. AS THERE HAS BEEN NO COMMERCIAL PRODUCTION FROM THE KNOWLEDGE SH ARED BY HIM TILL DATE, HENCE THE PAYMENTS MADE TO HIM HAS NOT RESULTED IN ANY ASSET OF ENDURING NATURE FOR OCL INDIA LTD. AND IS REVENUE EXPENDITURE. WE HOPE YOU WILL AGREE THAT KNOWLEDGE TILL BECOMING SUCCESSFUL IS OF NO USE TO THE COMPANY AND WILL TH EREFORE BE REVENUE EXPENDITURE. ITA 2843/DEL/2011 ITA 3202 & 3203 /DEL/2011 A.Y. 2005 - 06 AND 2006 - 07 OCL INDIA LTD., NEW DELHI 3 AS TILL DATE THAT KNOWLEDGE SHARED BY HIM HAS NOT RESULTED IN ANY CONCRETE RESULTS, HENCE THERE HAS BEEN NO COMMERCIAL EXPLOITATION OF KNOWLEDGE SHARED BY HIM. WE HAVE NOT SUB - LICENSED THE KNOWLEDGE SHARED BY HIM WITH US TILL DATE. 5.2. THE A.O. HAD HELD THAT THE ASSESSEE HAS ACQUIRED ADDITIONAL ASSETS IN THE FORM OF TECHNICAL KNOW - HOW , AS THE TERM TECHNICAL KNOW - HOW IS COVERED IN EXPLANATION 4 TO SEC.32(1), WHICH IS AN IN TANGIBLE ASSET AND DEPRECIATION @ 25% WAS A LLOWED. 5.3. THE FIRST APPELLATE AUTHORITY HAD UPHELD THE ORDER OF THE A.O., ON THE GROUND THAT THE ASSESSEE WOULD HAVE ENDURING BENEFIT. 5.4. THE ASSESSEE SUBMITS THAT TECHNICAL ASSISTANCE IS RECEIVED FOR REGULAR UPGRADATION AND CONTINUOUS IMPROVEMENT AND THAT TECHNOLOGY CAN NOT REMAIN CONSTANT AND NEEDS TO BE UPGRADED WITH TIME. HENCE HE ARGUED THAT THERE IS NO BENEFIT OF ENDURING NATURE. HE RELIED ON THE FOLLOWING CASE LAWS. (I) BEAM GLOBAL SPIRITE & WINE (INDIA) VS. DIT (ITA NO.393/DEL/2012); (II) GOODYEAR INDIA LTD. VS ITO (2000) 73 ITD 189 (DEL.) FOR THE PROPOSITION THAT ENDURING NATURE IS NOT A RELEVANT TEST IN DETERMINING THE NATURE OF EXPENDITURE, HE RELIED ON THE FOLLOWING CASE LAWS. ( I ) CIT VS. ASAHI INDIA SAFETY GLASS LTD. (2012) 346 ITR 329 (DEL.); ( II ) CIT VS. ACL WIRELESS LTD. (2014) 361 ITR 0210(DEL.) HE SUBMITTED THAT THE EXPENDITURE DID NOT RESULT IN THE GENERATION OF ANY CAPITAL ASSET AND HENCE IT CANNOT BE CLASSIFIED AS CAPITAL EXPENDITURE. FOR THIS PROPOSITION HE RELIED ON THE FOLLOWIN G CASE LAWS. ( I ) CIT VS. T.E.L.TECHNOLOGIES P.LTD. (2008) 304 ITR 262 (DEL.); ( II ) GANNON NORTON METAL DIAMOND DIES LTD. VS. CIT (1987) 163 ITR 606 (BOM.) ITA 2843/DEL/2011 ITA 3202 & 3203 /DEL/2011 A.Y. 2005 - 06 AND 2006 - 07 OCL INDIA LTD., NEW DELHI 4 HE FURTHER SUBMITTED THAT A CLAUSE OF SUB - LICENSING IN THE AGREEMENT DOES NOT LEAD TO ABSOLUTE TRANSFER. FO R THIS PROPOSITION HE RELIED ON THE JUDGEMENT OF HON BLE DELHI HIGH COURT IN THE CASE OF SHRIRAM PISTONS & RINGS LTD. VS. CIT (2008) 307 ITR 363 (DEL.). 5.5. THE LD.SR.D.R. RELIED ON THE ORDER OF THE FIRST APPELLATE AUTHORITY AS WELL AS THE ORDER OF THE A. O. HE TOOK THIS BENCH THROUGH THE AGREEMENT ENTERED BY THE ASSESSEE WITH MR.GLENN RAY TRAPP WHICH IS AT PAGES 5 TO 11 OF THE ASSESSEE S PAPER BOOK AND SUBMITTED THAT THERE IS TRANSFER OF KNOW - HOW AND TECHNOLOGY BETWEEN MR.GLENN RAY TRAP AND THE ASSESSE E. 6. RIVAL CONTENTIONS HEARD. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, ON PERUSAL OF MATERIAL ON RECORD, ORDERS OF THE AUTHORITIES BELOW, CASE LAWS CITED, WE HOLD AS FOLLOWS. 7. THE AGREEMENT FOR TECHNICAL KNOW - HOW TRANSFER BETWEEN MR.GLENN RAY TRAPP AND THE ASSESSEE PROVIDES FOR TRANSFER OF TECHNOLOGY AND TECHNICAL KNOW - HOW IN ADDITION TO TECHNICAL AS SISTANCE . CLAUSE NO. 1.1 OF THE AGREEMENT DEMONSTRATES THE SAME. CLAUSE NO. 4 AND 5 READ AS FOLLOWS. CLAUSE 4. EXCLUSIVITY : 4.1. MR.TRAPP HEREBY GRANTS TO OCL AND EXCLUSIVE RIGHT TO MANUFACTURE, USE AND SELL IN INDIA AND IN OVERSEAS MARKETS THE CC REFRACTORIES MANUFACTURED BY APPLICATION OF TECHNICAL KNOW - HOW/TECHNOLOGY TRANSFERRED BY HIM TO OCL AND TECHNICAL ASSI STANCE PROVIDED BY HIM IN TERMS OF AND AS CONTEMPLATED HEREIN. THE RIGHT SO HEREBY GRANTED IN FAVOUR OF OCL SHALL BE PERPETUAL AND SHALL NOT TERMINATE WITH THE EXPIRY OF THIS AGREEMENT. 4.2. DURING THE TERM OF THIS AGREEMENT, MR.TRAPP SHALL NOT COLLABORAT E IN ANY MANNER, WITH ANY OTHER PARTY FOR MANUFACTURE OF CC REFRACTORIES IN INDIA. CLAUSE 5. SUB - LICENSING: OCL SHALL BE FREE TO SUB - LICENSE THE TECHNICAL KNOW - HOW/TECHNOLOGY FOR THE MANUFACTURE OF CC REFRACTORIES AND BAG MANUFACTURE TO ANY OF ITS ASSOCIAT ES IN INDIA. IN ADDITION, OCL SHALL BE FREE TO SUB - LICENSE SUCH KNOW - HOW/TECHNOLOGY TO ANY OTHER INDIA PARTY. ITA 2843/DEL/2011 ITA 3202 & 3203 /DEL/2011 A.Y. 2005 - 06 AND 2006 - 07 OCL INDIA LTD., NEW DELHI 5 7.1. A PERUSAL OF THESE AGREEMENTS CLEARLY DEMONSTRATE THAT THE ASSESSEE HAS ACQUIRED TECHNICAL KNOW - HOW BY WAY OF TRANSFER FROM MR.TRAPP. THE ISSUE TO BE CONSIDERED IS WHETHER THE EXPENDITURE INCURRED FOR THE ACQUISITION IN QUESTION IS IN THE CAPITAL FILED OR REVENUE FILED. THE AGREEMENT WITH MR.GLENN TRAPP IS FOR A PERIOD OF 04 YEARS. A PERUSAL OF THIS AGREEMENT FURTHER DEMONSTRATES THAT TH E EXPENDITURE IN QUESTION WAS INCURRED FOR ACQUIRING KNOW - HOW WITH AN OBJECT OF IMPROVING THE MANUFACTURING PROCESS OF CONTINUOUS CASTING ACTIVITIES. THUS, IT IS A CASE OF IMPROVING THE MANUFACTURING PROCESS, INCREASING EFFICIENCY AND CONSEQUENT PROFIT ABILITY BY INCURRING EXPENDITURE FOR ACQUIRING TECHNICAL KNOW - HOW AND TECHNICAL ASSISTANCE. AS REGARDS THE ISSUE AS TO WHETHER THERE IS ENDURING BENEFIT, THE COMPANY REPRESENTED BEFORE THE A.O. THAT THERE WAS NO POSITIVE RESULTS CONSEQUENT TO THIS AGREEME NT AND IN FACT THE EXPENDITURE WAS INFRUCTUOUS EXPENDITURE. ON FACTS WE ARE OF THE OPINION THAT THE ASSESSEE HAS NOT ACQUIRED ANY CAPITAL ASSET NOR ANY ENDURING BENEFIT IN THIS CASE. THUS, IN OUR VIEW THE EXPENDITURE IN QUESTION IS IN THE REVENUE FIELD. THUS, WE ALLOW THIS GROUND OF THE ASSESSEE. 8. GROUND NO.2 IS AGAINST THE DISALLOWANCE OF ENVIRONMENTAL STUDY EXPENSES BY TREATING THE SAME AS CAPITAL EXPENDITURE. THE ASSESSEE IN THIS CASE HAS INCURRED AN EXPENDITURE OF RS.12,10,000/ - TOWARDS CARRYING OUT ENVIRONMENTAL IMPACT ASSESSMENT STUDY FOR THE PROPOSED MODERNISATION CUM EXPANSION OF ITS EXISTING RAJGANGPUR CEMENT PLANT. BOTH THE A.O. AS WELL AS THE LD.CIT(A) HELD THAT THE EXPENDITURE WAS IN THE CAPITAL FIELD. 8.1 . AFTER HEARING RIVAL CONTENTI ONS, WE OBSERVE THAT THE EXPENDITURE WAS INCURRED FOR MODERNISATION CUM EXPANSION OF ITS EXISTING RAJGANGPUR CEMENT PLANT. THE ASSESSEE HAS TO STATUTORILY OBTAIN CERTAIN ENVIRONMENTAL CLEARANCES, FOR WHICH THE STUDY HAS TO BE MADE AS PER THE GUIDELINES O F THE MINISTRY OF ENVIRONMENT AND THE ORISSA POLLUTION CONTROL BOARD. UNDER THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION, THAT THE EXPENDITURE IN QUESTION IS IN THE REVENUE FIELD. WHILE COMING TO SUCH CONCLUSION WE RELY ON THE FOLLOWING DECISION S OF THE JURISDICTIONAL HIGH COURT. ITA 2843/DEL/2011 ITA 3202 & 3203 /DEL/2011 A.Y. 2005 - 06 AND 2006 - 07 OCL INDIA LTD., NEW DELHI 6 (I) CIT VS. EURO INDIA LTD. (2014) 45 TAXMANN 173 (DEL.) (II) CIT VS. PRIYA VILLAGE ROAD SHOWS LTD. (2011) 332 ITR 0594 (DEL.) IN THE RESULT THIS GROUND OF THE ASSESSEE IS ALLOWED. 9. GROUND NO.3 IS AGAINST THE PARTIAL DISALLOWANCE OF EXPENDITURE INCURRED BY THE ASSESSEE ON FOREIGN TRAVEL. THE A.O. DISALLOWED 80% OF THE EXPENSES ON AD - HOC BASIS ON THE GROUND THAT THE ASSESSEE HAS NOT FURNISHED THE REQUISITE DETAILS. THE LD.CIT(A) RESTRICTED THE DISALLOWANCE TO 20% ON A D - HOC BASIS, ON THE GROUND THAT PERSONAL COMPONENT IN THE FOREIGN TRAVEL EXPENSES CANNOT BE RULED OUT. 9.1. LD.COUNSEL FOR THE ASSESSEE CONTENDS THAT ALL THE PERSONS WHO HAVE TRAVELLED ARE PERSONS WHO ARE EMPLOYED IN THE COMPANY AND WHO ARE HOLDING SENIOR POSITIONS. IT WAS SUBMITTED THAT MR. M.H.DALMIA WAS APPOINTED ON 1.1.1970, MR.R.H.DALMIA WAS APPOINTED ON 19.9.1980, MR.GAURAV DALMIA WAS APPOINTED ON 21.8.1987 AND SMT.ABHA DALMIA WAS APPOINTED ON 17.9.1982. IT WAS FURTHER SUBMITTED THAT THERE WAS SUBST ANTIAL INCREASE IN THE EXPORTS FROM YEAR TO YEAR FROM THE A.Y. 2003 - 04 TO 2008 - 09. IT WAS ARGUED THAT THE EXPENDITURE INCURRED BY ALL THE EMPLOYEES OF THE ASSESSEE COMPANY, INCLUDING THESE SENIOR EXECUTIVES COMES TO ONLY 5.9% OF THE VALUE OF TOTAL EXPORTS DURING THE YEAR WHICH IS RS.1660.59 LAKHS. IT WAS ARGUED THAT THE A.O. HAS TAKEN A VERY NARROW VIEW OF THE FACT THAT DURING ONE OF THE FOREIGN VISITS MR.R.H.DALMIA HAD TO VISIT A DOCTOR AT BOSTON, USA. IT WAS ARGUED THAT NO ADVERSE INFERENCE CAN BE DRA WN AS A PERSON COULD FALL SICK DURING FOREIGN TOUR AND SEEK MEDICAL ASSISTANCE. REFERENCE WAS MADE TO THE VOLUMINOUS DOCUMENTS PRODUCED BEFORE THE A.O. AS WELL AS THE LD.CIT(A) IN SUPPORT OF THIS EXPENDITURE. IT WAS FURTHER ARGUED THAT IN ALL THE EARLIER A.YS SIMILAR EXPENDITURE HAS BEEN ALLOWED EXCEPT IN THE A.Y. 1986 - 87 WHEREIN THE DISALLOWANCE WAS MADE ON EXPENDITURE INCURRED ON FOREIGN TRAVEL BY MR.M.H.DALMIA AND SMTL.ABHA DALMIA. HE FILED COPY OF THE ORDER OF THE LD.CIT(A) - IX, NEW DELHI DT. 25.3.199 2 AND SUBMITTED THAT THE FIRST APPELLATE AUTHORITY DELETED TH IS ADDITION ON MERITS AND THE REVENUE HAS NOT GONE ON APPEAL TO THE TRIBUNAL. HE RELIED ON A NUMBER OF CASE LAWS AND ARGUED THAT ITA 2843/DEL/2011 ITA 3202 & 3203 /DEL/2011 A.Y. 2005 - 06 AND 2006 - 07 OCL INDIA LTD., NEW DELHI 7 THE DISALLOWANCE IS BAD IN LAW. HE SUBMITTED THAT COURTS HAVE H ELD IN THE CASE OF UEM INDIA P.LTD. VS. ACIT (2015) 53 TAXMANN.COM 387 (DEL.) THAT NO ADHOC DISALLOWANCE COULD BE MADE WHEN ALL THE RELEVANT DOCUMENTS HAVE BEEN FURNISHED BY THE ASSESSEE AND NO DISCREPANCY HAS BEEN FOUND WITH REGARD TO THE SAME. 9.2. LD.SR.D.R. VEHEMENTLY OPPOSED THE CONTENTIONS OF THE ASSESSEE AND SUBMITTED THAT PERSONAL ELEMENT CANNOT BE RULED OUT IN THIS CASE. HE ARGUED THAT THE TRAVEL WAS UNDERTAKEN BY THE FAMILY MEMBERS OF DALMIA FAMILY WHO HAVE CONTROLLING INTEREST IN THE COMPAN Y AND WHO ARE ALSO EMPLOYEES OF THE ASSESSEE COMPANY. HE REFERRED TO E - MAILS TO POINT OUT SHRI RH DALMIA VISITED A DOCTOR AT BOSTON, USA FOR MEDICAL CHECK - UP. 9.3. AFTER HEARING RIVAL CONTENTIONS WE FIND THAT THE FIRST APPELLATE AUTHORITY HAS RECORDED AT PAGE 23 OF HIS ORDER THAT THE ASSESSEE HAD FURNISHED THE DETAILS OF BUSINESS TRANSACTED BY THESE PERSONS, DURING THE ABOVE FOREIGN TRAVEL. THIS FACTUAL FINDING OF THE FIRST APPELLATE AUTHORITY COULD NOT BE CONTROVERTED BY THE LD.SR.D.R. THUS THE DISALL OWANCE OF 80% MADE BY THE A.O. WHICH IS ADHOC AND ARBITRARY IN OUR VIEW CANNOT BE SUSTAINED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THIS BRINGS US WITH THE ISSUE WHETHER THE FIRST APPELLATE AUTHORITY HAS RIGHT IN MAKING A DISALLOWANCE OF 20% OF THE TO TAL FOREIGN TRAVEL EXPENSES ON THE GROUND THAT THERE IS A POSSIBILITY OF PERSONAL COMPONENT IN SUCH EXPENDITURE. IN OUR VIEW ADHOC DISALLOWANCES CANNOT BE SUSTAINED, UNLESS THERE IS EVIDENCE . THE ASSESSEE HAS FURNISHED TRIP WISE DETAILS OF ITS SR.EXE CUTIVES AND HAS ALSO FURNISHED THE BUSINESS TRANSACTED IN EACH TRIP, EXPORT DETAILS, CUSTOMER WISE DETAILS OF EXPORTS TO VARIOUS COUNTRIES. EVEN COPIES OF DISCUSSIONS HELD AND COPIES OF TOUR REPORTS WERE FURNISHED. IN THE FACE OF SUCH OVERWHELMING EVID ENCES, TO MAKE AN ADHOC DISALLOWANCE ON SURMISES AND CONJECTURES CANNOT COUNTENANCED. IN THE RESULT THIS GROUND OF THE ASSESSEE IS ALLOWED AND THE DISALLOWANCE OF 20% IS DELETED. ITA 2843/DEL/2011 ITA 3202 & 3203 /DEL/2011 A.Y. 2005 - 06 AND 2006 - 07 OCL INDIA LTD., NEW DELHI 8 10. GROUND NO.4 IS ON DISALLOWANCE MADE U/S 14A OF THE ACT. IN VIEW OF TH E SMALLNESS OF THE DISALLOWANCE, THE LD.COUNSEL FOR THE ASSESSEE DID NOT PRESS FOR THE SAME ON THE CONDITION THAT THE FINDING OF THE A.O. AS CONFIRMED BY THE LD.CIT(A) WOULD NOT BE CONSIDERED AS A PRECEDENCE, SPECIFICALLY IN VIEW OF THE DECISIONS OF THE TR IBUNAL THAT NO NOTIONAL DISALLOWANCE CAN BE MADE U/S 14A ON ESTIMATE BASIS. RELIANCE WAS PLACED ON THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF D CIT VS. JINDAL PHOTO LTD. (ITA NO.814 OF 2011 (DEL.)) AND OTHER CASE LAWS. 10.1. IN VIEW OF TH E ABOVE SUBMISSION OF THE LD.COUNSEL FOR THE ASSESSEE, WE DISMISS THIS GROUND AS NOT PRESSED . AS WE HAVE NOT ADJUDICATED THE ISSUE ON MERITS, THIS DECISION OF OURS ON THIS GROUND SHALL NOT HAVE ANY PRECEDENCE VALUE. 11. GROUND NO.5 IS DISMISSED AS NO T PRESSED AND GROUND NO.6 IS CONSEQUENTIAL IN NATURE. 12. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED IN PART. 13. THE APPEAL IN ITA 2843/DEL/2011 BY THE REVENUE IS ON THE PARTIAL DELETION OF DISALLOWANCE OF FOREIGN TRAVEL EXPENSES BY THE LD.CIT(A). IN VIEW OF OUR DECISION WHILE ADJUDICATING GROUND NO.3 OF THE ASSESSEE S APPEAL, WE DISMISS THIS GROUND OF REVENUE. 13.1 . IN THE RESULT REVENUE S APPEAL STANDS DISMISSED. 14. ITA 3203/DEL/2011: GROUND NO.1 IS AGAINST DISALLOWANCE OF PAYMENT ON ACCOUNT OF TECHNICAL KNOW - HOW FEE TO MR.GLENN RAY TRAPP. WE HAVE DISCUSSED THIS ISSUE WHILE DISPOSING OF THE ASSESSEE S APP EAL FOR THE A.Y. 2005 - 06. CONSISTENT WITH THE VIEW TAKEN WHILE DISPOSING OF GROUND NO.1 IN ITA 3202/DEL/11 WE ALLOW THIS GROUND OF THE ASSESSEE. ITA 2843/DEL/2011 ITA 3202 & 3203 /DEL/2011 A.Y. 2005 - 06 AND 2006 - 07 OCL INDIA LTD., NEW DELHI 9 15. GROUND NO.2 IS ON THE DISALLOWANCE ON ENVIRONMENTAL STUDY EXPENSES. CONSISTENT WITH THE VIEW TAKEN BY US WHILE DISPOSING OF GROUND NO.2 FOR THE A.Y. 2005 - 06 WE ALLOW THIS GROUND OF THE ASSESSEE. 16. GROUND NO.3 IS ON THE ISSUE OF DISALLOWANCE U/S 14A OF THE ACT. THE LD.CIT(A) HAS SET ASIDE THE ISSUE TO THE FILE OF THE A.O. HENCE THE ASSESSEE CHOSE NOT TO PRESS THIS GROUND. HENCE THIS GROUND IS DISMISSED AS NOT PRESSED. 17. GROUND NO.5 IS ON THE LEVY OF INTEREST AND IS CONSEQUENTIAL IN NATURE. IN THE RESULT ASSESSEE S APPEAL IS ALLOWED IN PART. 18 . IN THE RESULT ASSESSEE S APPEALS FOR BOTH THE A.YS 2005 - 06 AND 2006 - 07 ARE PARTLY ALLOWED AND REVENUE S APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH J UNE, 2015. SD/ - S D/ - ( I.C. SUDHIR ) (J. SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29 TH JUNE, 2015 MANGA ITA 2843/DEL/2011 ITA 3202 & 3203 /DEL/2011 A.Y. 2005 - 06 AND 2006 - 07 OCL INDIA LTD., NEW DELHI 10 COPY FORWARDED TO: - 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR