ACIT, Gurgaon V. M/s Honda Motorcycle and Scooter India Pvt. Ltd., Gurgaon

ITA 3237/DEL/2011

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7296 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 26-07-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 15-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset; Depreciation; Business expenditure; Rule of consistency; Revenue expenditure; Capital expenditure
• Section: 37(1); 37; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C: NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER, AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ITA NO. 3073/DEL /2011 ASSESSMENT YEAR: 2003-04 ITA NO. 3074/DEL /2011 ASSESSMENT YEAR: 2004-05 ITA NO. 3075/DEL /2011 ASSESSMENT YEAR: 2005-06 HONDA MOTORCYCLE & SCOOTER INDIA [P] LTD VS. THE ADDL. CIT PLOT NO. 1, SECTOR 3 GURGAON RANGE IMT, MANESAR, GURGAON PAN : AAACH 7467 D ITA NOS. 3237/DEL /2011 ASSESSMENT YEAR: 2003-04 ITA NOS. 3460/DEL /2013 ASSESSMENT YEAR: 2007-08 THE ADDL. CIT VS. HONDA MOTORCYCLE & SCOOTER INDIA [P] LTD GURGAON RANGE PLOT NO. 1, SECTOR 3, IMT, MAN ESAR, GURGAON PAN : AAACH 7467 D [APPELLANT] [RESPONDENT] DATE OF HEARING : 03.08.2016 DATE OF PRONOUNCEMENT : 31.08.2016 APPELLANT BY : SHRI DEEPAK CHOP RA, ADV SHRI AMIT SRIVASTAVA, ADV SHRI ANKU L GOYAL, ADV RESPONDENT BY : SHRI A.K. SAROHA, C IT-DR SHRI RAJE SH KUMAR 2 HONDA MOTORCYCLE & SCOOTERS INDIA LTD. 2 ORDER PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THESE ARE A BUNCH OF FIVE APPEALS FILED BY THE ASSE SSEE FOR A.YS 2003-04 TO 2005-06 AND 2007-08 AND CROSS APPEAL BY THE REVENUE FOR A.Y 2007-08, DIRECTED AGAINST THE ORDERS OF THE LD. CIT(A), PANCHKULA DATED 16.03.2011 IN THE CASE OF THE ASSES SEE AND 26.3.2013 IN REVENUES APPEAL. SINCE THE ISSUES INV OLVED IN ALL THESE APPEALS ARE SIMILAR AND THE APPEALS WERE HEAR D TOGETHER, SO THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATE D ORDER FOR THE SAKE OF CONVENIENCE. WE SHALL DISPOSE THEM OF ONE B Y ONE. FIRST WE TAKE UP REVENUES APPEAL FOR A.Y 2007-08 ITA NO. 3460/DEL/2013 [A.Y 2007-08] 2. THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE RE VENUE IN THIS APPEAL: 1. THE LD. CIT(A) ERRED IN TREATING THE ASSESSEE C OMPANY ELIGIBLE FOR CLAIMING DEPRECIATION AT A HIGHER RATE ON MOULDS, HIGHER RATE OF DEPRECIATION ON MOULDS IS AP PLICABLE ONLY TO RUBBER AND PLASTICS MANUFACTURERS, WHEREAS THE PRESENT ASSESSEE IS A TWO WHEELER MANUFACTURER. 2. THE LD. CIT(A) ERRED IN DELETING THE ADDITION MA DE ON ACCOUNT OF NON DEDUCTION OF TDS ON PAYMENTS MADE TO NON RESIDENTS. 3 HONDA MOTORCYCLE & SCOOTERS INDIA LTD. 3 3. THE LD. CIT(A) ERRED IN DELETING THE ADDITION MA DE ON ACCOUNT OF SALES TOOLS EXPENSES, WHICH COULD NOT BE ESTABLISHED A BEING EXPENSES INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS, AND WHICH THE ASSESSEE WAS UNDER NO OBLIGATION TO INCUR, AS PER I TS AGREEMENT WITH VENDORS. 3. THE LD. COUNSEL OF THE REVENUE SUPPORTING THE AC TION OF THE A.O CONTENDED THAT THE ASSESSEE COMPANY IS NOT ENTI TLED TO CLAIM DEPRECIATION @ 30% AS IT IS NOT MANUFACTURER OF RUB BER AND PLASTIC GOODS. THE LD. COUNSEL OF THE REVENUE CONTE NDED THAT CIT(A) ERRED IN TREATING THE ASSESSEE COMPANY ELIGI BLE FOR CLAIMING DEPRECIATION AT A HIGHER RATE ON MOULDS, H IGHER RATE OF DEPRECIATION ON MOULDS IS APPLICABLE ONLY TO RUBBER AND PLASTICS MANUFACTURERS, WHEREAS THE PRESENT ASSESSEE IS A TW O WHEELER MANUFACTURER. THE LD. COUNSEL OF THE REVENUE FURTHE R CONTENDED THAT THE ASSESSEE HAD PROVIDED MOULDS TO ITS SUPPLI ERS FOR MANUFACTURE OF PLASTIC/RUBBER COMPONENTS, TO BE MAN UFACTURED AS PER ASSESSEES SPECIFICATIONS IN ITS FACTORY PRE MISES AND THE MOULDS HAVE NOT BEEN USED BY THE ASSESSEE IN ITS OW N FACTORY AND FOR THE PURPOSE OF CLAIMING DEDUCTION @ 30%, MOULDS SHOULD BE USED IN THE ASSESSEES FACTORY. THEREFORE, THE CLAI M OF DEPRECATION @ 30% IS NOT ALLOWABLE. HOWEVER, THE L D. COUNSEL OF THE REVENUE FAIRLY CONTENDED THAT THE A.O ALLOWED D EPRECATION @ 4 HONDA MOTORCYCLE & SCOOTERS INDIA LTD. 4 15% WHEREAS THE ASSESSEE CLAIMED DEPRECIATION @ 30% AS PER ENTRY VII OF THE SCHEDULE OF DEPRECIATION. THE LD. COUNSEL OF THE REVENUE FINALLY SUBMITTED THAT THE IMPUGNED ORDER O F LD. CIT(A) WAS WITHOUT ANY BASIS AND THE SAME MAY BE SET ASIDE BY THE RESTORING THAT OF THE A.O. 4. PER CONTRA, THE LD. COUNSEL OF THE ASSESSEE FIRS T OF ALL CONTENDED THAT THE REVENUE HAS NOT CHALLENGED THIS GROUND IN ANY EARLIER OR SUBSEQUENT A.Y. EXCEPT A.Y 2007-08 W HEREIN THE LD. CIT(A) ACCEPTED THE STAND OF THE ASSESSEE AND D IRECTED THE A.O TO ALLOW DEPRECIATION @ 30% ON PLASTIC MOULDS. THE LD. AR PLACING RELIANCE ON THE DECISION OF THE ITAT PUNE B ENCH IN THE CASE OF KINETIC HONDA MOTOR LTD VS. JCIT REPORTED A T 72 TTJ 72 PARA 14 AND SUBMITTED THAT IN ORDER TO CLAIM DEPREC IATION @ 30% IT IS NECESSARY THAT THE MACHINES MUST BE OWNED AND USED BY THE ASSESSEE. THE LD. AR FURTHER SUBMITTED THAT IN THE PRESENT CASE THE MOULDS WERE OWNED BY THE ASSESSEE AND THESE WER E GIVEN TO VENDORS FOR THE PURPOSE OF MANUFACTURING OF VARIOUS PARTS OF TWO WHEELERS AS SPECIFIED BY THE ASSESSEE AND THE ONLY QUESTION WHICH REMAINS TO BE CONSIDERED IS WHETHER SUCH MOUL DS WERE USED IN PLASTIC FACTORIES FOR THE PURPOSE OF BUSINE SS OF THE ASSESSEE. TO SUPPORT THIS CONTENTION, THE LD. AR A LSO PLACED RELIANCE ON THE DECISION OF THE HON'BLE HIGH COURT OF GUJARAT IN THE CASE OF CIT VS. SANSKRUT COMFORT LTD DATED 21.1 2.2005 IN TAX 5 HONDA MOTORCYCLE & SCOOTERS INDIA LTD. 5 APPEAL NOS. 852 & 853/2005, DECISION OF THE MADRAS HIGH COURT IN THE CASE OF AREVA T & D VS. JCIT REPORTED AT [20 13] 29 TAXMAN 255 AND ORDER OF THE ITAT AHMADABAD HIGH BENCH IN THE CASE OF ITO VS. SYMPHONY COMFORT SYSTEMS LTD DATED 20.5.200 5 PASSED IN ITA NO. 777 AND 4499[AHD/2003. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON RECORD BEFO RE US. FIRST OF ALL WE MAY POINT OUT THAT THE A.O HAS NOT MADE ANY ADDI TION OR DISALLOWANCE IN ANY OF THE EARLIER OR SUBSEQUENT A. YS. SECONDLY, WE OBSERVE THAT THE A.O HAS ALLOWED DEPRECIATION @ 15% WHEREAS THE ASSESSEE IS CLAIMING DEPRECATION @ 30% BY ALLEGING THAT THE ASSESSEE HAS MADE ARRANGEMENT WITH VENDORS WHO, IN TURN, ARE ENGAGED IN MANUFACTURING RUBBER AND PLASTIC GOODS AS PER SPECI FICATIONS GIVEN BY THE ASSESSEE. THE MAIN CONTENTION OF THE A.O IS TH AT THE ASSESSEE IS NOT A MANUFACTURER OF PLASTIC OR RUBBER GOODS AND T HE ASSESSEE IS IN THE MANUFACTURE AND SALE OF TWO WHEELERS AND IT CAN NOT BE DEEMED TO BE MANUFACTURER OF PLASTIC/RUBBER PARTS. ACCORDING LY, IT IS NOT ENTITLED TO DEPRECIATION AT A HIGHER RATE. THUS, A DMITTEDLY AND UNDISPUTEDLY, THE ASSESSEE IS OWNER OF PLASTIC MOUL DS, THAT IS WHY THE A.O ALLOWED DEPRECATION @ 15% AND DENIED HIGHER RAT E OF DEPRECIATION AS CLAIMED BY THE ASSESSEE ON THE ALLEGATION THAT P LASTIC MOULDS HAVE NOT BEEN USED IN ITS OWN FACTORY PREMISES AND THE S AME WERE GIVEN TO VENDORS FOR USE IN THEIR RESPECTIVE MANUFACTURING U NITS/FACTORIES. AT 6 HONDA MOTORCYCLE & SCOOTERS INDIA LTD. 6 THIS JUNCTURE, WE FIND IT APPROPRIATE TO CONSIDER T HE PROPOSITION LAID DOWN BY THE AHMADABAD BENCH OF THE TRIBUNAL IN THE CASE OF SYMPHONY COMFORT SYSTEMS LTD [SUPRA] WHEREIN IT WAS HELD AS BELOW: 4.3. I HAVE CONSIDERED CAREFULLY THE OBSERVATION O F THE AO AND THE SUBMISSION OF THE COUNSEL ALONGWITH THE APPELLA TE ORDER PASSED FOR ASST. YR. 1991-92. THE CIT(A)-XIV WHILE DECIDING THE ISSUE FOR ASST. YR. 1991-92 HAS DISCUSSED THE MATTE R AT LENGTH AND OBSERVED THAT IN THE PRESENT 'CASE, INSTEAD OF HAVING A SEPARATE DIVISION, THE APPELLANT IS HAVING PLASTIC COMPONENTS MANUFACTURED USING ITS OWN MOULDS AND UNDER ITS SUP ERVISION AT THE FACTORIES OF ITS VENDORS WHO ARE EXCLUSIVE PLAS TIC GOODS FACTORIES, APPLYING THE SAME RATIO THAT THE MOULDS HAVE IN FACT BEEN USED IN PLASTIC GOODS FACTORIES, THE APPELLANT WOULD ALSO BE ENTITLED TO DEPRECIATION AT THE HIGHER RATE OF 5 0 PER CENT ON SUCH MOULDS, THE VIEW TAKEN BY THE KARNATAKA HIGH C OURT HAS ALSO BEEN FOLLOWED IN THE DECISION OF THE TRIBUNAL DELHI BENCH, WHEREIN, THOUGH THE END PRODUCT, VIZ. VACUUM GLASS WAS NOT A PLASTIC PRODUCT, IT WAS HELD THAT THE PLASTIC MOULD S USED FOR MANUFACTURING PLASTIC COVERS OF THE VACUUM GLASSES IN EXACTLY THE SAME MANNER AS MANUFACTURING IS CARRIED OUT BY ANY OTHER PLASTIC FACTORY, WERE ENTITLED TO DEPRECIATION AT T HE HIGHER RATE UNDER APPENDIX-I OF THE IT RULES. IN VIEW OF THE CO NCLUSION ARRIVED AT BY THE CIT(A) WHILE PASSING THE ORDER FO R ASST. YR. 1991-92, I HOLD THAT THE APPELLANT IS ENTITLED TO D EPRECIATION @ 40 PER CENT' AS CLAIMED BY THE APPELLANT ON PLASTIC MOULDS AND, THEREFORE, THE AO IS DIRECTED TO DELETE THE DISALLO WANCE OF RS. 42,08,947/-. 7 HONDA MOTORCYCLE & SCOOTERS INDIA LTD. 7 6. IN VIEW OF THE ABOVE, WE ARE INCLINED TO HOLD TH AT THE CONCLUSION ARRIVED BY THE LD. CIT(A) IN PARA 5.2 OF THE IMPUGNED ORDER IS QUITE CORRECT AND JUSTIFIED AND WE ARE UNA BLE TO SEE ANY VALID REASON TO INTERFERE WITH THE IMPUGNED ORDER O N THIS ISSUE AS ADMITTEDLY AND UNDISPUTEDLY THE ASSESSEE IS OWNER O F THE PLASTIC MOULD WHICH WERE USED IN THE PREMISES OF VARIOUS VE NDORS FOR MANUFACTURING OF PLASTIC AND RUBBER GOODS FOR USE O F ASSESSEE. IN OUR CONSIDERED OPINION, IT IS IMMATERIAL WHETHER TH E PLASTIC /RUBBER MOULDS WERE USED IN THE FACTORY PREMISES OF THE ASSESSEE OR VENDORS. PRIME REQUIREMENT IS THAT MOULDS SHOUL D BE OWNED BY THE ASSESSEE, THE SAME SHOULD BE PART OF BLOCK A SSETS SHOWN BY THE ASSESSEE AND THESE WERE PUT TO USE FOR THE P URPOSE OF BUSINESS OF THE ASSESSEE AND THE THREE REQUISITE CO NDITIONS HAVE BEEN FULFILLED BY THE ASSESSEE IN THE PRESENT CASE AND THUS IT IS ENTITLED TO CLAIM DEPRECIATION @ 30% WHICH WAS RIGH TLY ALLOWED BY THE LD. CIT(A). HENCE GROUND NO. 1 OF THE REVEN UE BEING DEVOID OF MERITS IS DISMISSED. GROUND NO. 1.1 7. APROPOS THIS GROUND, WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND CAREFULLY PERUSED THE RELEVANT MATERI AL ON RECORD INTER ALIA THE RELEVANT PAPER BOOK AND RATIO OF DEC ISION AS RELIED UPON BY THE LD. DR. 8 HONDA MOTORCYCLE & SCOOTERS INDIA LTD. 8 8. THE LD. DR TOOK US THROUGH PARA 6.2 AT PAGE 14 O F THE IMPUGNED FIRST APPELLATE ORDER AND CONTENDED THAT S INCE THE PAYMENTS WERE MADE BY THE ASSESSEE OUTSIDE INDIA IN THE FORM OF REIMBURSEMENT OF EXPENSES WHICH ATTRACTS TDS PROVIS IONS AND THE ASSESSEE HAS NOT DEDUCTED ANY TDS AT THE TIME OF PA YMENTS AND THE IMPUGNED PAYMENTS MADE BY THE ASSESSEE ARE SQUA RELY COVERED UNDER THE PROVISIONS OF SECTION 40(A)(IA) O F THE INCOME- TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' . THEREFORE, THE SAME WAS RIGHTLY DISALLOWED AND ADDED BACK TO THE I NCOME OF THE ASSESSEE. THE LD. DR LASTLY SUBMITTED THAT THE IMP UGNED ORDER MAY BE SET ASIDE BY RESTORING THAT OF THE AO. 9. REPLYING TO THE ABOVE, THE LD. AR SUBMITTED THAT THE PAYMENTS MADE BY THE ASSESSEE ARE COST TO COST REIM BURSEMENT WITHOUT ANY MARK UP TO THE NON RESIDENT AND SINCE T HE PAYMENTS MADE BY IT WERE OUTSIDE INDIA TO NON RESIDENT WERE IN THE FORM OF REIMBURSEMENT OF EXPENSES AND WERE NOT CHARGEABLE T O TAX IN INDIA, THEREFORE THE CIT(A) WAS RIGHT IN GRANTING R ELIEF TO THE ASSESSEE BY FOLLOWING THE ORDER OF THE DRP FOR A.Y 2006-07. THE LD. AR ALSO DREW OUR ATTENTION TOWARDS THE RELEVANT OPERATIVE PARA 6.2 AT PAGES 14 AND 15 OF THE IMPUGNED ORDER A ND SUBMITTED THAT THE CIT(A) HAS GRANTED PART RELIEF TO THE ASSE SSEE AND THE DISALLOWANCE ON THE ISSUE OF PAYMENT TO AMERICAN EM BASSY SCHOOL 9 HONDA MOTORCYCLE & SCOOTERS INDIA LTD. 9 TOWARDS SCHOOL FEES OF DAUGHTER, REIMBURSEMENT ON A CCOUNT OF TRAVEL EXPENSES OF MR. TAKESHI MIYASHITA AND PAYMEN T TO M/S HONDA MOTOR COMPANY LTD, JAPAN TOWARDS SERVICE FEES OF NEW MODELS HAVE BEEN DISALLOWED AND THE ASSESSEE HAS AC CEPTED THIS STAND OF THE REVENUE AS THERE IS NO APPEAL BY THE A SSESSEE AGAINST THESE DISALLOWANCES. 10. IN REJOINDER, THE LD. DR SUBMITTED THAT IF THE ASSESSEE IS PAYING THROUGH ITS PRINCIPAL AT JAPAN, THEN TDS OF THIS PAYMENT AND HAVE TO BE APPLIED. HOWEVER, THE LD. DR CANDID LY AND FAIRLY ACCEPTED THAT FOR INVOKING TDS PROVISIONS AND MAKIN G DISALLOWANCE U/S 40(A)(IA) OF THE ACT, INCOME SHOUL D BE CHARGEABLE TO TAX IN INDIA, THEN ONLY TDS PROVISION S CAN BE HELD AS APPLICABLE. 11. ON CAREFUL CONSIDERATION OF THE ABOVE RIVAL SUB MISSIONS, AT THE VERY OUTSET, WE MAY POINT OUT THAT THE AO MADE DISALLOWANCE ON THE ALLEGATION THAT THE ASSESSEE HAS NOT MADE TA X DEDUCTION AT SOURCE ON THE PAYMENTS MADE TO NON RESIDENT OUTSIDE INDIA WHEREAS THE CIT(A) GRANTED PART RELIEF TO THE ASSES SEE BY OBSERVING THAT SINCE PAYMENTS HAVE BEEN MADE OUTSID E INDIA IN THE FORM OF REIMBURSEMENT OF EXPENSES, THUS THEY AR E NOT CHARGEABLE TO TAX IN INDIA AND THE AO SHOULD NOT HA VE MADE DISALLOWANCE IN THIS REGARD. THE CIT(A) WAS QUITE JUSTIFIED AND 10 HONDA MOTORCYCLE & SCOOTERS INDIA LTD. 10 PASSED A BALANCED ORDER WHILE UPHOLDING THE ADDITIO N UNDER THREE HEADS AND GRANTING RELIEF TO THE ASSESSEE BY FOLLOW ING THE ORDER OF THE DRP FOR A.Y 2006-07. IT IS WELL ACCEPTED PR OPOSITION THAT THE RULE OF CONSISTENCY SHOULD BE FOLLOWED BY THE R EVENUE AUTHORITIES UNLESS THERE IS SUBSTANTIAL CHANGE IN T HE FACTS AND CIRCUMSTANCES. IN THE PRESENT CASE, THE CIT(A) FOL LOWED THE ORDER OF DRP FOR EARLIER A.Y 2006-07 WHEREIN CLAIM OF THE ASSESSEE REGARDING PAYMENT IN THE NATURE OF REIMBUR SEMENT OF EXPENSES WAS ALLOWED. WE ARE UNABLE TO SEE ANY VAL ID REASON TO INTERFERE WITH THE CONCLUSION OF THE CIT(A) ESPECIA LLY WHEN THE AO COULD NOT ESTABLISH THAT THE IMPUGNED PAYMENTS M ADE BY THE ASSESSEE TO NON RESIDENTS OUTSIDE INDIA WERE CHARGE ABLE TO TAX IN INDIA AND IN THIS SITUATION, TDS PROVISIONS ARE NOT APPLICABLE TO THE PAYMENTS MADE BY THE ASSESSEE AND HENCE WE ARE UNABLE TO SEE ANY AMBIGUITY OR PERVERSITY IN THE ORDER OF THE CIT(A) AND THUS WE UPHOLD THE SAME. ACCORDINGLY, GROUND NO. 2 OF THE REVENUE BEING DEVOID OF MERITS STANDS DISMISSED. GROUND NO. 3 OF THE REVENUE 12. APROPOS THIS GROUND, WE HAVE HEARD THE ARGUMENT S OF BOTH THE SIDES AND HAVE PERUSED THE RELEVANT MATERIAL ON RECORD. THE LD. DR DREW OUT ATTENTION TOWARDS PARA 6 AT PAGE 3 OF THE ASSESSMENT ORDER AND SUBMITTED THAT THE ASSESSEE CO MPANY HAS 11 HONDA MOTORCYCLE & SCOOTERS INDIA LTD. 11 CLAIMED SALES TOOLS EXPENSES ON ACCOUNT OF AUTO SPA RE PARTS TRADED AMOUNTING TO RS. 77,85,401/-. THE LD. DR FU RTHER POINTED OUT THAT AO NOTICED THAT THERE WAS AN AGREEMENT BET WEEN THE ASSESSEE COMPANY AND ITS DEALERS UNDER THE HEAD GE NERAL OBLIGATIONS OF THE COMPANY AT PARA 11.2 UNDER THE S UB-HEAD ADVERTISING SUPPORT. THE LD. DR SUBMITTED THAT AS PER CLAUSE 11.2, THE ASSESSEE HAS TO PROVIDE NECESSARY INFORMA TION, MATERIALS AND SUCH OTHER ASSISTANCE FROM TIME TO TI ME, AT THE DEALERS COST AND EXPENSES, THEREFORE, THERE WAS NO OBLIGATION ON THE ASSESSEE TO INCUR THESE EXPENSES, HENCE THE SAM E WERE RIGHTLY DISALLOWED. THE LD. DR FURTHER POINTED OUT THAT THE CIT(A) GRANTED RELIEF TO THE ASSESSEE WITHOUT ANY B ASIS AS THERE WAS NO AGREEMENT BETWEEN THE ASSESSEE AND THE DEALE RS THAT 50% OF SALES TOOLS EXPENSES WOULD BE SUBSIDIZED TO THE DEALERS. THEREFORE, THE IMPUGNED ORDER MAY BE SET ASIDE BY R ESTORING THAT OF THE AO. 13. REPLYING TO THE ABOVE, THE LD. AR SUBMITTED THA T THE ASSESSEE WAS UNDER OBLIGATION TO SUPPORT THE DEALER S AND IMPUGNED SALES TOOLS EXPENSES REPRESENTS 50% SUBSID Y GIVEN TO DEALERS ON ACCOUNT OF BASIC COST OF STANDARD SALES TOOLS, TOOLS/FEATURES FOR STANDARDIZATION OF HONDA EXCLUSI VE DEALER OUTLETS. THEREFORE, THE AO WAS INCORRECT IN HOLDIN G THAT THE APPELLANT WAS UNDER NO OBLIGATION TO INCUR THESE EX PENSES. THE 12 HONDA MOTORCYCLE & SCOOTERS INDIA LTD. 12 LD. AR SUBMITTED THAT THE ACID TEST OF SECTION 37 O F THE ACT IS THAT THE EXPENSES SHOULD HAVE BEEN INCURRED FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE AND AS PER DEALERSHIP AGRE EMENT AVAILABLE AT PAGES 382 TO 391 OF ASSESSEES PAPER B OOK, CLAUSE 12, THE ASSESSEE WAS UNDER OBLIGATION TO SUPPORT DE ALERS AND UNDER THIS OBLIGATION SALES TOOLS EXPENSES HAVE BEE N INCURRED. THE LD. AR ALSO POINTED OUT THAT THE AO HAS NOT DOU BTED THE GENUINENESS OF THE EXPENSES AND IT IS NOT ALSO THE CASE OF THE AO THAT IT WAS NOT FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. THEREFORE, THE SAME SHOULD BE ALLOWED. THE LD. AR COUNSEL DREW OUR ATTENTION TOWARDS PAGE 403 ONWARDS OF THE ASSES SEES PAPER BOOK AND SUBMITTED THAT AS PER THE DECISION OF HON' BLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF T UPPERWARE INDIA [P] LTD VS. CIT REPORTED AT [2015] 60 TAXMANN.COM 3 50 [DELHI] WHERE CONTRACT MANUFACTURERS WERE CARRYING OUT MANU FACTURING ACTIVITIES FOR THE ASSESSEE AND IT WAS IN ASSESSEE S BUSINESS NECESSITY THAT ALL THE TAX LIABILITIES OF MANUFACTU RERS WERE DULY SATISFIED BY THE ASSESSEE THEN THE PAYMENTS IN THIS REGARD HAS TO BE CONSIDERED AS BUSINESS EXPENSES OF THE ASSESSEE AND THUS THE SAME ARE ALLOWABLE U/S 37(1) OF THE ACT. 14. THE LD. DR ALSO PLACED REJOINDER TO THE ABOVE S UBMISSIONS OF THE ASSESSEE AND SUBMITTED THAT THE TEST OF WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OF THE ASSE SSEE IS A 13 HONDA MOTORCYCLE & SCOOTERS INDIA LTD. 13 MATTER OF FACT AND ISSUE OF LAW. THE LD. DR POINTE D OUT THAT IN THE CASE OF TUPPERWARE INDIA [P] LTD [SUPRA], FACT S IN PARA 10 ARE THAT SINCE THE ASSESSEE WAS NOT PERMITTED TO MA NUFACTURE PRODUCTS IN INDIA AND IT HAD DIRECT INTEREST IN THE PROPER FUNCTIONING/PROTECTION OF BUSINESS OF CONTRACT MANU FACTURERS IN AS MUCH AS WITHOUT THEM, THE ASSESSEE COULD NOT RUN ITS BUSINESS OF TRADING IN INDIA. THEREFORE, LAW OF ADDITIONAL EXCISE DUTY LEVIED UPON THE CONTRACT MANUFACTURERS WAS DISCHARG ED BY THE ASSESSEE AND IN THIS SITUATION IT WAS HELD THAT IT WAS FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. THE LD. DR PO INTED OUT THAT THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE ARE QUITE SIMILAR AND DISTINCT. THEREFORE, THE RATIO OF THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF TUPPERWARE INDIA LTD [SUP RA] CANNOT BE APPLIED TO THE FACTS OF THE PRESENT CASE IN FAVOUR OF THE ASSESSEE. THE LD. DR ALSO POINTED OUT THAT IT IS TRITE LAW AN D FOR ALLOWING CLAIM OF THE ASSESSEE IT HAS TO BE SEEN THAT THE CO NDITION STIPULATED IN SECTION 37 HAS BEEN COMPLIED OR NOT. THE LD. DR VEHEMENTLY CONTENDED THAT THE ASSESSEE IS A COMPANY AND IT HAS TO SHOW THAT IT HAS TO SHOW THAT EXPENSES ON SALES TOOLS EXPENSES INCURRED BY IT WAS UNDER AN OBLIGATION AS PER AGREE MENT BUT THERE WAS NO SEPARATE CONTRACT ON THIS ISSUE AND TH E ASSESSEE WAS NOT UNDER OBLIGATION TO BEAR THIS LIABILITY TO INCU R EXPENSES ON SALES TOOLS EXPENSES. THEREFORE, IT WAS RIGHTLY DI SALLOWED BY THE 14 HONDA MOTORCYCLE & SCOOTERS INDIA LTD. 14 AO. THE LD. DR ALSO CONTENDED THAT AS PER CONTRACT , LIABILITY TO BEAR THE EXPENSES WAS ON THE DEALER AND THE ASSESSE E AND THE ASSESSEE HAS NOT DISCHARGED ITS ONUS TO SUPPORT THE CLAIM AS REQUIRED U/S 37 OF THE ACT. 15. ON CAREFUL PERUSAL OF THE ABOVE RIVAL SUBMISSIO NS, FIRST OF ALL WE MAY POINT OUT THAT THE LD. AR HAS NOT DISPUT ED THIS FACT THAT THERE WAS A DEALERSHIP AGREEMENT BETWEEN THE A SSESSEE AND ITS DEALERS AND AS PER CLAUSE 11.2 UNDER THE HEAD GENERAL OBLIGATIONS OF THE ASSESSEE COMPANY IT WAS AGREED BETWEEN THE ASSESSEE AND THE DEALERS AS UNDER: 11.2 THE COMPANY SHALL PROVIDE NECESSARY INFORMAT ION, MATERIALS AND SUCH OTHER ASSISTANCE FROM TIME TO TI ME, AT THE DEALERS COST AND EXPENSE WHEREVER APPLICABLE, WHICH SUPPORT THE DEALERS ADVERTISING AND SALES PROMOTION EFFORTS FOR THE PRODUCTION IN ACCORDANCE WITH THE PROVISION S OF POLICY, GUIDELINES AND OPERATIONAL STANDARDS WITH R EGARDS TO ADVERTISING ISSUE BY THE COMPANY FROM TIME TO TIME. 16. IN VIEW OF THE ABOVE, THE ASSESSEE COMPANY WAS UNDER OBLIGATION TO PROVIDE NECESSARY INFORMATION, MATERI AL AND SUCH OTHER ASSISTANCE FROM TIME TO TIME AT THE DEALERS C OST AND THE EXPENSES AND THERE WAS NO OBLIGATION ON THE ASSESSE E COMPANY TO SUBSIDIZE 50% OF THE SALES TOOLS EXPENSES OR 50% IN THE FORM OF SUBSIDY TO THE DEALERS ON ACCOUNT OF BASIC COST OF STANDARD SALES 15 HONDA MOTORCYCLE & SCOOTERS INDIA LTD. 15 TOOLS, TOOLS/FEATURES FOR STANDARDIZATION OF HONDA EXCLUSIVE DEALER OUTLETS. ON SPECIFIC QUERY FROM THE BENCH, THE LD. AR COULD NOT SHOW US ANY OTHER ADDENDA OR AMENDMENT TO THIS AGREEMENT BETWEEN THE ASSESSEE AND THE DEALERS AND TO ESTABLISH THAT THE EXPENSES INCURRED ON SALES TOOLS EXPENSES WAS MADE BY THE ASSESSEE UNDER AN OBLIGATION OF AN AGREEMENT. I T WAS THE CONTENTION OF THE LD. AR THAT EVEN IF AGREEMENT IS NOT ON RECORD, EXPENSES COULD HAVE BEEN INCURRED BY THE ASSESSEE B Y AMENDING THE AGREEMENT AND AS PER CLAUSE (C) OF CLAUSE 3 AT PAGE 386 OF THE ASSESSEES PAPER BOOK, THE ASSESSEE COMPANY WAS UNDER OBLIGATION TO COMPENSATE THE DEALERS SUITABLY IN CO NSIDERATION FOR COOPERATION/SERVICES/ASSISTANCE AS AND WHEN RENDERE D BY DEALERS IN RESPECT OF SALES. THE LD. AR ALSO SUBMITTED THA T SUCH COMPENSATION WAS TO BE DECIDED AS PER POLICY OF THE COMPANY IN SUCH MATTERS. FIRST OF ALL, WE MAY POINT OUT THAT THE SAID CLAUSE (C) OF CLAUSE (3) OF THE AGREEMENT STIPULATES THE L IABILITY OF THE ASSESSEE COMPANY TO COMPENSATE DEALERS SUITABLY IN CONSIDERATION FOR COOPERATION/SERVICES/ASSISTANCE I N RESPECT OF DIRECT SALES AND THUS THE SALES TOOLS EXPENSES WERE NOT RELATED TO DIRECT SALES BUT IT WAS FOR THE PURPOSE OF STANDARD SALES TOOLS, TOOLS/FEATURES FOR STANDARDIZATION OF HONDA EXCLUSI VE DEALER OUTLETS AS SUCH. HOWEVER, THERE IS NO FURTHER POLI CY DECISION OR ANY OTHER DOCUMENT BEFORE US WHICH COULD SHOW US TH AT THERE WAS 16 HONDA MOTORCYCLE & SCOOTERS INDIA LTD. 16 LIABILITY ON THE ASSESSEE TO INCUR 50% SUBSIDY ON S ALES TOOLS EXPENSES TO THE DEALERS AND IN THE ABSENCE OF ANY S UCH AMENDMENT OR DOCUMENT, WE DECLINE TO ACCEPT THE CON TENTION OF THE ASSESSEE WHEN IT WAS UNDER NO OBLIGATION OF AGR EEMENT BETWEEN DEALERS AND THUS THE IMPUGNED CLAIM OF EXPE NSES COULD NOT BE HELD AS ALLOWABLE TO THE ASSESSEE. AT THIS JUNCTURE, WE MAY POINT OUT THAT RATIO OF THE DECISION IN THE CAS E OF TUPPERWARE INDIA LTD [SUPRA] IS NOT AVAILABLE TO TH E APPELLANT IN THE PRESENT CASE AS IT WAS A CASE PERTAINING TO LIA BILITY OF PAYMENT OF ADDITIONAL EXCISE DUTY IN PURSUANCE OF C ESCS ORDER AND THE APPELLANT OF THAT CASE DISCHARGED LIABILITY FOR PROPER FUNCTIONING/PROTECTION OF BUSINESS OF CONTRACT MANU FACTURERS IN AS MUCH AS WITHOUT THEM, THE ASSESSEE COULD NOT RUN ITS BUSINESS OF TRADING IN INDIA. OBVIOUSLY, WHEN A COMPANY IS O UT OUTSOURCING MANUFACTURING ACTIVITY TO THE VARIOUS VENDORS, CONT RACT MANUFACTURERS, THEN ANY LIABILITY REGARDING EXCISE DUTY AND ADDITIONAL EXCISE DUTY HAS TO BE BORNE BY THE CONTR ACTEE AS PER EXCISE LAWS AND THE SAME HAS TO BE HELD FOR THE PUR POSE OF BUSINESS OF THE ASSESSEE, BECAUSE EXCISE DUTY OR AD DITIONAL EXCISE DUTY WAS PAID AS PER MANDATORY TAXATION LEGISLATION WHICH CANNOT BE AVOIDED. IN THE PRESENT CASE, PAYMENT OF SALES TOOLS EXPENSES WAS NOT UNDER LEGAL OBLIGATION OR LIABILITY AND SAM E HAS BEEN INCURRED WITHOUT ANY AGREEMENT. AT THE RISK OF REP ETITION, WE 17 HONDA MOTORCYCLE & SCOOTERS INDIA LTD. 17 MAY POINT OUT THAT AS PER CLAUSE 11.2 OF AGREEMENT BETWEEN THE ASSESSEE AND THE DEALER, ALL EXPENSES HAVE TO BE BO RNE BY THE DEALERS IN REGARD TO ADVERTISEMENT SUPPORT SERVICES , WHICH INCLUDES SALES TOOLS EXPENSES ALSO. THUS WE ARE UN ABLE TO ACCEPT THE REASONS RECORDED BY THE CIT(A) FOR GRANTING REL IEF TO THE ASSESSEE ON THIS COUNT AND WE SET ASIDE THE SAME AN D ORDER OF THE AO IS RESTORED. CONSEQUENTLY GROUND NO. 3 SUCC EEDS. 17. IN THE RESULT THE APPEAL OF THE REVENUE IS PART LY DISMISSED ON GROUND NO. 1 AND 2 AND PARTLY ALLOWED ON GROUND NO. 3. ITA NO. 3074/DEL /2011 [A.Y 2004-05] ITA NO. 3075/DEL /2011[A.Y 2005-06] 18. BOTH THE PARTIES CONCURRED THAT GROUND NO 1 IN A.Y 2004-05 AND 2005-06 ARE SIMILAR TO THE FACTS OF A.Y 2007-08 . SINCE BY THE EARLIER PART OF THIS ORDER WE HAVE DISMISSED GROUND NO. 2 OF THE REVENUE WHEREIN THE ASSESSEE GOT RELIEF FROM THE FI RST APPELLATE ORDER ON THE ISSUE OF PAYMENTS TO NON RESIDENTS AND OUR SAID CONCLUSION WOULD APPLY MUTATIS MUTANDIS TO GROUND N O. 1 IN A.Y 2004-05 AND 2005-06. CONSEQUENTLY, GROUND NO 1 OF T HE ASSESSEE IN BOTH THE YEARS ARE ALLOWED AND THE AO IS DIRECTE D TO DELETE THE ADDITION MADE U/S 40(A)(IA) OF THE ACT. 18 HONDA MOTORCYCLE & SCOOTERS INDIA LTD. 18 GROUND NO. 2 IN A.Y 2004-05] 19. APROPOS GROUND NO. 2, THE LD. AR SUBMITTED THAT THE CIT(A) HAS ERRED IN FACTS AND IN LAW IN DISALLOWING A SUM OF RS. 19,05,993/- BEING TRIAL RUN EXPENSES HOLDING THE SA ME TO BE CAPITAL EXPENDITURE. THE LD. AR FURTHER SUBMITTED THAT THE CIT(A) AND THE AO ERRED IN NOT APPRECIATING THAT TH E TRIAL RUN EXPENSES INCURRED FOR INTRODUCING THE NEW MODELS OF MOTORCYCLE AS PART OF THE EXISTING BUSINESS WERE ALLOWABLE A R EVENUE DEDUCTION. THE LD. AR DREW OUR ATTENTION TOWARDS PA RA 7 AT PAGE 3 OF THE ASSESSMENT ORDER AND CONTENDED THAT THE AO BY PASSING A CRYPTIC ORDER MADE DISALLOWANCE WITHOUT LOOKING INT O THE FACTS OF THE CASE. THE LD. AR FURTHER CONTENDED THAT THE CI T(A) IN PARA 8.3 DISMISSED THE GROUND OF THE ASSESSEE BY INCORRE CTLY OBSERVING THAT THE GENERAL LEDGER DETAILS REVEALS THAT THE EX PENSES HAVE BEEN BOOKED AS TRIAL RUN COST AND TRIAL PARTS PURCH ASED ETC. THEREFORE, THE AO RIGHTLY TREATED THE SAME AS CAPIT AL EXPENDITURE AND DISALLOWED THE SAME. THE LD. AR PL ACED RELIANCE ON THE DECISION OF THE HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. SONATA SOFTWARE LTD REPORTED AT [2012] 2 1 TAXMANN.COM 23 [BOM] AND SUBMITTED THAT THE EXPENDI TURE INCURRED ON INDIGENISATION OF SOFTWARE HAS BEEN RIG HTLY HELD TO BE ALLOWABLE AS REVENUE EXPENDITURE. THE LD. AR ALSO DREW OUR ATTENTION TOWARDS THE ASSESSEES PAPER BOOK PAGE 13 1 AND 19 HONDA MOTORCYCLE & SCOOTERS INDIA LTD. 19 SUBMITTED THAT THE TRIAL RUN EXPENSES NEITHER RELAT ED TO SETTING UP OF A NEW PLANT AND WERE NOT INCURRED ON PURCHASE OF ANY CAPITAL ASSET, SUCH EXPENSES WERE NOT INCURRED IN C APITAL AND WERE ALLOWABLE REVENUE EXPENSES AS PER THE TEST LAI D DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF EMPIRE JUTE CO MPANY LIMITED VS. CIT REPORTED AT 124 ITR 1. 20. THE LD. AR LASTLY CONTENDED THAT THE ASSESSEE I NCURRED TRIAL RUN EXPENSES ON THE ACTIVITY OF INDIGENISATION OF S OFTWARE AND CONSEQUENTLY THIS ACTIVITY BOOSTED INDIAN ECONOMY. THEREFORE, THE SAME HAS TO BE ALLOWED AS REVENUE EXPENDITURE I NSTEAD OF CAPITAL EXPENDITURE AS WRONGLY AND INCORRECTLY OBSE RVED BY THE AUTHORITIES BELOW. 21. PER CONTRA, THE LD. DR STRONGLY SUPPORTED THE A CTION OF THE AO AND THE IMPUGNED ORDER AND SUBMITTED THAT AS PER THE AUDITORS REPORT SUBMITTED BY THE ASSESSEE ITSELF, IT WAS SEEN THAT THE AUDITORS HAVE MENTIONED THAT THESE EXPENSE S WERE OF CAPITAL IN NATURE. THEREFORE, THE SAME COULD NOT B E TREATED AS REVENUE EXPENDITURE AND THE AO WAS QUITE JUSTIFIED AND CORRECT IN DISALLOWING THE SAME. 22. AFTER CAREFUL CONSIDERATION OF THE ABOVE RIVAL SUBMISSIONS AND PERUSING THE RELEVANT MATERIAL ON RECORD AS WEL L AS THE CITED DECISIONS, WE FIND THAT IT IS AN ADMITTED FACT THAT THE ASSESSEE 20 HONDA MOTORCYCLE & SCOOTERS INDIA LTD. 20 INCURRED TRIAL RUN EXPENSES FOR INTRODUCING THE NEW MODELS OF MOTORCYCLE AS PART OF THE EXISTING BUSINESS WHICH T HE ASSESSEE CLAIMED ALLOWABLE AS REVENUE DEDUCTION WHEREAS THE CIT(A) AND THE AO CAME TO THE CONCLUSION THAT THESE EXPENSES W ERE CAPITAL EXPENDITURE. WE FIND THAT AS PER THE ASSESSEE, TRIA L RUN EXPENSES NEITHER RELATED TO SETTING UP OF A NEW PLANT AND WE RE NOT INCURRED ON PURCHASE OF ANY CAPITAL ASSET, SUCH EXP ENSES WERE NOT INCURRED IN CAPITAL AND WERE ALLOWABLE REVENUE EXPENSES AS PER THE TEST LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF EMPIRE JUTE COMPANY LIMITED [SUPRA]. THE HON'BL E APEX COURT IN THIS CASE HAS HELD AS UNDER: THERE MAY BE CASES WHERE EXPENDITURE, EVEN IF INCURRED FOR OBTAINING ADVANTAGE OF ENDURING BENEFIT, MAY, NONE- THE-LESS, BE ON REVENUE ACCOUNT AND THE TEST ONE DURING BENEFIT MAY BREAK DOWN. IT IS NOT EVERY ADVANTAGE OF ENDURING NATURE ACQUIRED BY AN ASSESSEE THAT BRINGS THE CASE WITHIN THE PRINCIPLE LAID DOWN IN THIS TEST. WHAT IS MATERIAL TO CONSIDER IS THE NATURE OF THE ADVANT AGE IN A COMMERCIAL SENSE THAT IT IS ONLY WHERE THE ADVANTAG E IS IN THE CAPITAL FIELD THAT THE EXPENDITURE WOULD BE DISALLOWABLE ON AN APPLICATION OF THIS TEST. IF THE ADVANTAGE CONSISTS MERELY IN FACILITATING THE ASSESSES'S TRADING OPERATIONS OR ENABLING THE MANAGEMENT AND CONDUCT OF THE ASSESSEE'S BUSINESS TO BE CARR IED ON MORE EFFICIENTLY OR MORE PROFITABLY WHILE LEAVING THE FIXED CAPITAL UNTOUCHED. THE EXPENDITURE WOULD BE ON REVENUE ACCO UNT, EVEN THOUGH THE ADVANTAGE MAY ENDURE FOR AN INDEFINITE FUTURE. 21 HONDA MOTORCYCLE & SCOOTERS INDIA LTD. 21 23. IN THE PRESENT CASE, WE FIND THAT THE EXPENSES WERE ESSENTIAL EXPENSES INCURRED ON PURCHASE OF SPARE PA RTS FOR THEIR TRIAL AND INDIGENISATION IN INDIA. THE ASSESSEE HA S NEITHER SET UP A NEW PLANT NOR PURCHASED ANY CAPITAL ASSET. ACCOR DINGLY, IN VIEW OF THE ABOVE DECISION OF THE HON'BLE SUPREME C OURT, WE FIND NO MERIT IN THE ORDER OF THE AO NOR IN THE IMPUGNED ORDER OF THE CIT(A) HOLDING THE ABOVE EXPENSES TO BE CAPITAL IN NATURE. CONSEQUENTLY, GROUND NO. 2 OF THE ASSESSEE IS ALLOW ED. 24. IN THE RESULT, THE APPEAL STANDS ALLOWED. REVENUE APPEAL ITA NO. 3237/DEL/2011 [A.Y 2003-04] 25. BOTH THE PARTIES CONCURRED THAT GROUND NOS 1 AN D 2 IN A.Y 2003-04 ARE SIMILAR TO THE FACTS AND CIRCUMSTANCES OF GROUND NO. 3 OF A.Y 2007-08. SINCE BY THE EARLIER PART OF THI S ORDER WE HAVE ALLOWED GROUND NO. 3 OF THE REVENUE WHEREIN THE ASS ESSEE GOT RELIEF FROM THE FIRST APPELLATE ORDER ON THE ISSUE OF PAYMENTS REGARDING SALES TOOLS EXPENSES HAS BEEN DECIDED IN FAVOUR OF THE REVENUE AND THE ORDER OF AO HAS BEEN RESTORED. THU S OUR CONCLUSION ON GROUND NO. 3 IN A.Y 2007-08 FAVOURING THE REVENUE WOULD APPLY MUTATIS MUTANDIS TO GROUND NO. 1 AND 2 OF THE REVENUE AND THUS GROUND NO. 1 AND 2 IN A.Y 2003-04. CONSEQUENTLY, GROUND NO 1 & 2 OF THE REVENUE STAND ALLOWED. 26. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS ALLOWED. 22 HONDA MOTORCYCLE & SCOOTERS INDIA LTD. 22 ASSESSEES APPEAL ITA NO. 3073/DEL/2011 [A.Y 2003- 04] 27. GROUND NO. 1 AND 1.1 RAISED IN THIS APPEAL OF T HE REVENUE STAND COVERED BY GROUND NO. 2 OF A.Y 2007-08, THE D ECISION OF WHICH HAS BEEN GIVEN BY US IN THE EARLIER PART OF T HIS ORDER WHEREIN WE HAVE DISMISSED GROUND NO. 2 ON SIMILAR I SSUE IN A.Y 2007-08. FOLLOWING THE SAME, WE DISMISS GROUND N. 1 AND 1.1 IN THIS A.Y ALSO. 28. IN THE RESULT, THE APPEAL OF THE ASSESSEE STAND S DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 31.08 .2016. 29. TO SUM UP, IN THE RESULT, ITA NO. 3073/DEL/2011 [A.Y 2003-04] IS ALLOWED. ITA NO. 3074/DEL/2011 [A.Y 2004-05] IS ALLOWED. ITA NO. 3075/DEL/2011 [A.Y 2005-06] IS ALLOWED. ITA NO. 3460/DEL/2013 [A.Y 2007-08] IS PARTLY ALLOW ED. ITA NO. 3237/DEL/2011 [A.Y 2003-04] IS ALLOWED. SD/- SD/- (S.V. MEHROTRA) (C.M. GAR G) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31 ST AUGUST, 2016 VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR