SC Johnson Products Pvt. Ltd., Gurgaon V. DCIT, New Delhi

ITA 3340/DEL/2015

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4251 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2007-2008
• Appeal Filed On: 25-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHEFALI SWAROOP
• Keywords: Business income; Speculation loss; Revenue expenditure; Speculative transactions
• Section: 14A; 80IB; 43(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : E : NEW DELHI BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NOS.3340 & 3341/DEL/2015 ASSESSMENT YEARS : 2007-08 & 2008-09 SC JOHNSON PRODUCTS PVT. LTD., 5 TH FLOOR, PLOT NO.68, SECTOR-44, GURGAON. PAN: AAACL3128M VS. DCIT, CIRCLE-22(2), NEW DELHI. ITA NOS.3759 &4255/DEL/2015 ASSESSMENT YEAR : 2007-08 & 2008-09 DCIT, CIRCLE-22(2), NEW DELHI. VS. SC JOHNSON PRODUCTS PVT. LTD., 5 TH FLOOR, PLOT NO.68, SECTOR-44, GURGAON. PAN: AAACL3128M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.M. GUPTA, ADVOCATE DEPARTMENT BY : MS SHEFALI SWAROOP, CIT, DR DATE OF HEARING : 08.10.2018 DATE OF PRONOUNCEMENT : 10.10.2018 ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 2 ORDER PER R.S. SYAL, VP: THESE FOUR CROSS APPEALS TWO BY THE ASSESSEE AND THE OTHER TWO BY THE REVENUE RELATE TO ASSESSMENT YEARS 2007-08 AND 2008-09. SINCE SOME OF THE ISSUES RAISED IN THESE APPEALS ARE COMMON, W E ARE, THEREFORE, DISPOSING THEM OFF BY THIS CONSOLIDATED ORDER FOR T HE SAKE OF CONVENIENCE. ASSESSMENT YEAR 2007-08 2. THE FIRST ISSUE RAISED BY THE ASSESSEE IN ITS AP PEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF HEDGING PREMIUM AMO UNTING TO RS.13,61,36,388/-. THE REVENUE, THROUGH GROUND NO. 1, IS AGGRIEVED BY THE DELETION OF DISALLOWANCE OF INTEREST EXPENSES OF RS .2,67,95,720/- ON HEDGING CONTRACT, WHICH THE ASSESSING OFFICER (AO) HELD TO BE COVERED UNDER SECTION 45(3) OF THE INCOME-TAX ACT, 1961 (HE REINAFTER ALSO CALLED `THE ACT). THE FACTUAL PANORAMA OF THESE GROUNDS IS THAT THE ASSESSEE, INTER ALIA, CLAIMED A DEDUCTION OF RS.16,29,32,108/- COMPRISIN G OF TWO PARTS, NAMELY, INTEREST ON ECB FROM SC JOHNSON EURO PE BV AT RS.2,67,95,720/- AND PREMIUM EXPENSE ON HEDGING CON TRACT AT RS.13,61,36,388/-. THE ASSESSEE MENTIONED IN THE N OTES TO ACCOUNTS ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 3 ANNEXED TO THE BALANCE SHEET THAT THE PREMIUM OR DI SCOUNT ARISING AT THE INCEPTION OF FORWARD EXCHANGE CONTRACT WAS AMORTISE D AS EXPENSE OVER THE LIFE OF THE CONTRACT. ON BEING CALLED UPON TO EXPL AIN THE POSITION, THE ASSESSEE SUBMITTED THAT IT TOOK A LOAN OF JAPANESE YEN (JPY 4127100000) FROM SCJ EUROPE BV IN THE FINANCIAL YEAR 2002-03. IN ORDER TO HEDGE ITSELF AGAINST FOREIGN CURRENCY FLUCTUATION IN JPY, THE AS SESSEE ENTERED INTO AGREEMENTS WITH CITI BANK NA AND BARCLAYS BANK PLC. AS PER THE AGREEMENT WITH CITI BANK, THE ASSESSEE SOLD JPY 176 8500000 FOR RS.715087500 AND AGREED TO PAY THE SAME AMOUNT PAID FOR PURCHASING JPY 1768500000 AT THE TIME OF MATURITY. CITI BANK UNDE RTOOK TO PAY INTEREST @ 1.7% ON JPY 1768500000 ON BEHALF OF THE ASSESSEE TO SCJ EUROPE BV AND THE CITI BANK AGREED TO CHARGE RS.34,91,20,000/- FR OM THE ASSESSEE FOR PAYING INTEREST TO SCJ EUROPE BV AND BEARING THE FO REIGN EXCHANGE FLUCTUATION. SIMILARLY, ON IDENTICAL TERMS, THE ASS ESSEE ENTERED INTO ANOTHER AGREEMENT WITH BARCLAYS BANK, WHEREIN IT SOLD JPY 2358600000 FOR RS.95,30,00,000/- AND AGREED TO PAY THE SAME AMOUNT TO BE PAID FOR PURCHASING JPY 2358600000 AT THE TIME OF MATURITY. BARCLAYS BANK UNDERTOOK TO PAY INTEREST @ 1.7% ON JPY 2358600000 ON BEHALF OF THE ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 4 ASSESSEE TO SCJ EUROPE BV. THE BARCLAYS BANK AGREED TO CHARGE RS.46,55,40,500/- FROM THE ASSESSEE FOR PAYING INTE REST TO SCJ EUROPE BV AND BEARING FOREIGN EXCHANGE FLUCTUATION RISK. THE ASSESSEE FURNISHED COPIES OF THE AGREEMENTS ENTERED INTO WITH BOTH THE BANKS IN SUPPORT OF THE ABOVE AVERMENTS. THE ASSESSING OFFICER OPINED THAT THE TRANSACTIONS UNDER CONSIDERATION WITH THESE BANKS WERE IN THE NATURE O F SPECULATIVE TRANSACTIONS U/S 43(5) OF THE ACT AND, HENCE, THE L OSS WAS NOT DEDUCTIBLE. ALTERNATIVELY, HE OPINED THAT THE ASSESSEE WAS REQU IRED TO DEDUCT TAX AT SOURCE BEFORE MAKING PAYMENT OF INTEREST AND PREMIU M TO THE TWO BANKS U/S 195 OF THE ACT. IN THE ABSENCE OF THE ASSESSEE HAVING DEDUCTED TAX AT SOURCE, THE AO HELD THE AMOUNT TO BE NOT DEDUCTIBLE IN TERMS OF THE PROVISIONS OF SECTION 40(A)(IA) READ WITH SECTION 1 95 OF THE ACT. HE, THEREFORE, MADE DISALLOWANCE OF TOTAL DEDUCTION CLA IMED BY THE ASSESSEE AT RS.16,29,32,108/-. THE ASSESSEE FILED CERTAIN ADDI TIONAL EVIDENCE BEFORE THE LD. CIT(A) TO THE EFFECT THAT DEDUCTION OF TAX AT S OURCE WAS MADE WITH REFERENCE TO THE AMOUNT OF INTEREST COMPONENT OF RS .2.67 CRORE AND ODD. THE LD. CIT(A) CALLED FOR THE REMAND REPORT FROM TH E ASSESSING OFFICER. ON THE BASIS OF SUCH REMAND REPORT, THE LD. CIT(A) DELETED THE ADDITION OF ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 5 RS.2,67,95,720/-. AS REGARDS THE OTHER COMPONENT OF PREMIUM ON HEDGING CONTRACT AT RS.13.61 CRORE, THE LD. CIT(A) HELD IT BE OTHERWISE AN ALLOWABLE EXPENDITURE BEING PREMIUM PAID ON HEDGING CONTRACT AND, HENCE, IT WAS NOT A SPECULATION LOSS. HE, HOWEVER, HELD THAT THE PRE MIUM WAS PAYABLE TO THE BANKS ON 25.03.2008, THAT IS, AT THE TIME OF MATURI TY WHEN THE LOAN WAS TO BE REPAID, AND, HENCE, THE DEDUCTION SHOULD BE ALL OWED ONLY IN THE SUCCEEDING YEAR AT THE TIME OF MATURITY AND NOT IN THE YEAR UNDER CONSIDERATION. BOTH THE SIDES ARE IN APPEAL ON THE IR RESPECTIVE STANDS. 3. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE REL EVANT MATERIAL ON RECORD. THE ASSESSEE TOOK A LOAN FROM ITS RELATED C ONCERN, NAMELY, SCJ EUROPE BV OF JPY 4127100000. SUCH LOAN WAS TAKEN I N THE FINANCIAL YEAR 2002-03. THE LOAN WAS REPAYABLE AFTER A PERIOD OF F IVE YEARS. IN ORDER TO SECURE ITSELF AGAINST FLUCTUATION IN THE FOREIGN CU RRENCY RATE, THE ASSESSEE ENTERED INTO HEDGING CONTRACTS WITH TWO BANKS, NAME LY, CITI BANK AND BARCLAYS BANK. THESE BANKS UNDERTOOK TO SAVE THE A SSESSEE AGAINST ANY FOREIGN EXCHANGE FLUCTUATION RISK IN JAPANESE YEN VIS--VIS THE INDIAN RUPEE. FURTHER, BOTH THE BANKS UNDERTOOK TO PAY INTEREST A T THE FIXED RATE OF 1.70% ON THE LOAN AMOUNT TO SCJ EUROPE BV. IN LIEU OF THI S, CITI BANK AND ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 6 BARCLAYS BANK AGREED TO CHARGE A FIXED AMOUNT OF RS .34,91,20,000/- AND RS.46,55,40,500/- RESPECTIVELY. THE LD. AR EXPLAIN ED THAT TOTAL SUM OF RS.81,46,60,500 (RS.34,91,20,000/- PLUS RS.46,55, 40,500/-) PAYABLE BY THE ASSESSEE TO THE TWO BANKS WAS DETERMINED ON TH E BASIS OF INTEREST AND HEDGING RISK TO BE SERVED BY THE BANKS DURING THE P ERIOD OF FIVE YEARS. IN OTHER WORDS, IT WAS EXPLAINED THAT THE SUM PAYABLE WAS DEPENDENT UPON THE PERIOD FOR WHICH THE RISK WAS UNDERTAKEN, THAT IS, HIGHER THE PERIOD, HIGHER THE AMOUNT OF COMPENSATION TO THE BANKS AND VICE VERSA. THUS, IT FOLLOWS THAT BOTH THE BANKS UNDERTOOK TO SERVE THE LOAN IN TWO WAYS, VIZ., FIRSTLY, BY PAYING INTEREST ON LOAN AT 1.70% TO THE LENDER AND HEDGE THE ASSESSEE FROM ANY FOREIGN CURRENCY FLUCTUATION IN JAPANESE YEN. SINCE THE LOAN WAS TAKEN IN THE FINANCIAL YEAR 2002-03 AND WAS TO BE REPAID AFTER FIVE YEARS, IT WAS AT THAT INITIAL TIME THAT THE ASSESSEE ENTERED INTO AG REEMENTS WITH THE TWO BANKS AND THEN SPREAD OVER THE AMOUNT OF PREMIUM PA YABLE TO THESE TWO BANKS OVER A PERIOD OF FIVE YEARS. THE AMOUNT RELA TABLE TO THE YEAR UNDER CONSIDERATION IS RS.16.29 CRORE, WHICH HAS INTEREST COMPONENT OF RS.2.67 CRORE AND PREMIUM FOR HEDGING AT RS.13.61 CRORE. ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 7 4. THE FIRST QUESTION TO BE DECIDED IS AS TO WHETHER THE AMOUNT IN QUESTION IS A SPECULATION LOSS HIT BY SECTION 43(5) AS HELD BY THE ASSESSING OFFICER. IN THIS REGARD, IT IS RELEVANT TO NOTE TH AT THE OPENING PART OF SECTION 43(5) DEFINES `SPECULATIVE TRANSACTION TO MEAN: `A TRANSACTION IN WHICH CONTRACT FOR PURCHASE OR SALE OF ANY COMMODITY, IN CLUDING STOCKS AND SHARES IS PERIODICALLY OR ULTIMATELY SETTLED OTHERW ISE THAN ACTUAL DELIVERY OR TRANSFER OF THE COMMODITY OR SCRIPS. THUS IN ORDER TO BE COVERED WITHIN THE AMBIT OF SECTION 43(5), IT IS SINE QUA NON THAT CONTRACT FOR PURCHASE OR SALE OF ANY COMMODITY SHOULD HAVE BEEN SETTLED OTHERWISE THAN BY ACTUAL DELIVERY. IF THERE IS NO TRANSACTION OF PURCHASE O R SALE COUPLED WITH THE OBLIGATION TO SETTLE IT OTHERWISE THAN BY ACTUAL DE LIVERY, IT CEASES TO BE A SPECULATIVE TRANSACTION. WHEN WE ADVERT TO THE FACT S OF THE INSTANT CASE, IT TURNS OUT THAT THE INGREDIENTS OF SPECULATIVE TRANS ACTION ARE LACKING. THE ASSESSEE, DID NOT ENTER TO AGREEMENTS WITH THE TWO BANKS FOR SALE OR PURCHASE OF ANY COMMODITY, WHICH WAS TO BE SETTLED OTHERWISE THAN BY THE ACTUAL DELIVERY. ON THE OTHER HAND, IT IS A CASE O F A HEDGING TRANSACTION AND THE CONSIDERATION IS FOR SECURING THE ASSESSEE AGAI NST ANY FLUCTUATION LOSS IN FOREIGN CURRENCY AND SERVICE OF LOAN BY MEANS OF IN TEREST. THUS, IT IS CLEAR ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 8 THAT THE PROVISIONS OF SECTION 43(5) OF THE ACT ARE CLEARLY NOT ATTRACTED. IN OUR CONSIDERED OPINION, THE LD. CIT(A) WAS RIGHT IN HOLDING SO. 5. NOW WE ESPOUSE THE DELETION OF ADDITION OF RS.2. 67 CRORE. THIS AMOUNT REPRESENTS INTEREST COMPONENT ON ECB FROM SC J EUROPE BV. THE ASSESSEE, IN FACT, DID NOT PAY ANY INTEREST TO SCJ EUROPE BV. RATHER, INTEREST WAS PAID @ 1.7% BY THE BANKS TO SCJ EUROPE BV. THIS AMOUNT IS PART OF OVERALL REMUNERATION OF RS.81.46 CRORE PAY ABLE TO THE BANKS, WHICH THE ASSESSEE SEPARATELY TREATED AS INTEREST IN ITS ACCOUNTS. DURING THE COURSE OF FIRST APPELLATE PROCEEDINGS, THE LD. CIT(A) SOUG HT REMAND REPORT FROM THE ASSESSING OFFICER ON THE ASSESSEES CLAIM OF HAVIN G DEDUCTED TAX AT SOURCE ON SUCH INTEREST PAYMENT, WHICH FACT HAS NOT BEEN D ENIED BY THE ASSESSING OFFICER. THUS, IT BECOMES APPARENT THAT THE ASSESS EE DID DEDUCT TAX AT SOURCE ON THE INTEREST OF RS.2.67 CRORE TO THE TWO BANKS IN LIEU OF SERVICE OF LOAN TAKEN FROM SCJ EUROPE BV. AS THE LOAN WAS TAK EN, ADMITTEDLY, FOR THE BUSINESS PURPOSE, INTEREST THEREON, WHICH IS A PART OF THE OVERALL COMPENSATION TO THE BANKS, THUS HAS TO BE ALLOWED A S DEDUCTION. AS TAX WAS PROPERLY DEDUCTED ON SUCH INTEREST COMPONENT AND PA ID TO THE EXCHEQUER, ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 9 WE HOLD THAT THE LD. CIT(A) RIGHTLY APPRECIATED TH E FACTS IN DELETING ADDITION OF RS.2.67 CRORE. 6. NEXT IS THE OTHER COMPONENT OF PREMIUM ON HEDGIN G CONTRACT AT RS.13.61 CRORE. WE HAVE NOTED ABOVE THAT THE ASSES SEE TOOK LOAN IN THE FINANCIAL YEAR 2002-03 WHICH WAS REPAYABLE AFTER A PERIOD OF FIVE YEARS AND THUS ENTERED INTO AGREEMENTS WITH THE BANKS FIXING THE FINAL EXCHANGE DATE AS 25.03.2008. THE LD. CIT(A) HELD THE AMOUNT TO B E OTHERWISE DEDUCTIBLE, WHICH FINDING HAS NOT BEEN CHALLENGED BY THE REVENU E IN ITS APPEAL. HE, HOWEVER, OPINED THAT SUCH AMOUNT WAS TO BE ALLOWED AS DEDUCTION AT THE TIME OF SETTLEMENT WHICH EVENT WAS TO TAKE PLACE IN THE SUCCEEDING YEAR, THAT IS, 2008. THIS SHOWS THAT THE OTHERWISE DEDUCT IBILITY OF THE PREMIUM IS NOT UNDER CHALLENGE. WHAT IS UNDER CHALLENGE IS THE TIMING OF ALLOWING DEDUCTION. WE HAVE NOTED SUPRA THE UNCONTROVERTED CONTENTION OF THE LD. AR THAT THE AMOUNT OF COMPENSATION TO THE BANKS DEP ENDS UPON THE PERIOD COVERED UNDER THE HEDGING CONTRACT, THAT IS, HIGHER THE PERIOD, HIGHER THE REMUNERATION AND VICE VERSA . THIS SHOWS THAT THE AMOUNT OF PREMIUM IS DIRECTLY LINKED WITH THE PERIOD COVERED UNDER HEDGI NG. FOR EXAMPLE, IF THE PERIOD IS ONE YEAR AND THE AMOUNT OF PREMIUM IS RS. 100; IF THE PERIOD IS ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 10 TWO YEARS, THEN THE AMOUNT OF PREMIUM IS RS.200; AN D IF THE PERIOD IS FIVE YEARS, THEN THE AMOUNT OF PREMIUM IS RS.500. THIS S HOWS THAT THE PREMIUM COMPONENT OF THE OVERALL AMOUNT PAYABLE TO THE BANK S IS IN RESPECT OF A PERIOD OF FIVE YEARS, WHICH IS THE TERM OF THE CONT RACTS. THE ASSESSEE AMORTIZED TOTAL AMOUNT OF PREMIUM PAYABLE DURING TH E CURRENCY OF HEDGING BY AMORTIZING THE TOTAL AMOUNT IN FIVE INSTALLMENTS COVERING EACH YEAR. NO DOUBT, THE ASSESSEE WAS LIABLE TO PAY THE AMOUNT AT THE END OF THE FIFTH YEAR, BUT, THE LIABILITY TO PAY SUCH PREMIUM WAS INCURRED ON YEAR TO YEAR BASIS. UNDER THE MERCANTILE SYSTEM OF ACCOUNTING, AN AMOUN T OF EXPENDITURE BECOMES DEDUCTIBLE WHEN LIABILITY TO PAY IS INCURRE D. EVEN THOUGH THE AMOUNT BECOMES DUE OR PAYABLE AT A LATER DATE, BUT, THE DECISIVE CRITERION FOR DEDUCTIBILITY IS THE INCURRING OF LIABILITY AND NOT ITS ACTUAL PAYMENT. THE HON'BLE SUPREME COURT IN TAPARIA TOOLS LTD. VS. JCIT (2015) 372 ITR 605 (SC), HAS HELD THAT THE ORDINARY RULE IS THAT : `REVENUE EXPENDITURE INCURRED IN A PARTICULAR YEAR IS TO BE ALLOWED IN THAT YEAR. THUS, IF THE ASSESSEE CLAIMS THAT EXPENDITURE IN THAT YEAR, THE IT DEPARTMENT CA NNOT DENY THE SAME. HOWEVER, IN THOSE CASES WHERE THE ASSESSEE HIMSELF WANTS TO SPREAD THE EXPENDITURE OVER A PERIOD OF ENSUING YEARS, IT CAN BE ALLOWED ONLY IF THE ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 11 PRINCIPLE OF 'MATCHING CONCEPT' IS SATISFIED, WHICH UP TO NOW HAS BEEN RESTRICTED TO THE CASES OF DEBENTURES. REVERTING T O THE FACTS OF THE INSTANT CASE, WE FIND THAT THE ASSESSEE INCURRED A MATCHING LIABILITY DURING THE PERIOD OF FIVE YEARS AND ALSO SPREAD THE AMOUNT OF PREMIUM OVER A PERIOD OF FIVE YEARS. EVEN THOUGH THE AMOUNT WAS ACTUALLY PAYABLE AFTER A PERIOD OF FIVE YEARS, BUT THE LIABILITY WAS INCURRED ON YE AR TO YEAR BASIS, AND THE ASSESSEE SPREAD IT OVER SUCH A PERIOD ON PROPORTION ATE BASIS, THEREBY MAKING THE PROPORTIONATE PART ELIGIBLE FOR DEDUCTIO N IN THE YEAR IN QUESTION. 7. THERE IS ANOTHER STRONG REASON WHICH JUSTI FIES DEDUCTION OF PREMIUM IN THE YEAR UNDER CONSIDERATION ON THE PROPORTIONAT E BASIS. THE ASSESSEE CLAIMED SIMILAR PROPORTIONATE DEDUCTIONS IN PRECEDI NG THREE YEARS WHICH WERE ALLOWED BY THE ASSESSING OFFICER HIMSELF. IF NOW WE HOLD TO ALLOW DEDUCTION FOR THE ENTIRE AMOUNT AT THE END OF THE F IFTH YEAR, AS HAS BEEN HELD BY THE LD. CIT(A), IT WOULD MEAN THAT THE ENTIRE AM OUNT WOULD HAVE TO BE ALLOWED AT THE END OF THE FIFTH YEAR. AS AGAINST TH AT, THE DEDUCTIONS HAVE ALREADY BEEN ALLOWED BY THE ASSESSING OFFICER IN T HE PRECEDING THREE YEARS, WHICH ASSESSMENTS HAVE ATTAINED FINALITY. TO THAT EXTENT, THERE WILL BE DOUBLE DEDUCTION IN THE FIFTH YEAR, WHICH CANNOT BE PERMITTED. WE, ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 12 THEREFORE, HOLD THAT THE ASSESSEE WAS JUSTIFIED IN CLAIMING DEDUCTION OF THE PROPORTIONATE PART OF THE PREMIUM ON YEAR TO YEAR BASIS. 8. NOW COMES THE QUESTION OF DISALLOWANCE U/S 40(A) (IA) IN RESPECT OF SUCH PREMIUM. THE ASSESSING OFFICER HELD THAT THE AMOUNT WAS DISALLOWABLE FOR THE FAILURE OF THE ASSESSEE TO WIT HHOLD TAX AT SOURCE AT THE TIME OF BOOKING THE EXPENDITURE IN ITS ACCOUNTS. EV EN HAVING CROSSED THE OTHERWISE DEDUCTIBILITY OF THE AMOUNT, DEDUCTION CA N ACTUALLY BE ALLOWED ONLY IF THE ASSESSEE HAS EITHER RIGHTLY DEDUCTED TA X AT SOURCE OR THE AMOUNT IS FOUND TO BE NOT SUBJECT TO TAX DEDUCTION. ON FA ILURE OF PROPER TAX WITHHOLDING ON SUCH EXPENDITURE, THE AMOUNT OTHERW ISE DEDUCTIBLE ALSO BECOMES NON-DEDUCTIBLE. 9. IN THIS REGARD, IT IS RELEVANT TO NOTE THAT CITI BANK N.A. APPLIED FOR CERTIFICATE U/S 195(3) OF THE INCOME-TAX ACT AUTHOR IZING RECEIPT OF INTEREST AND OTHER SUMS WITHOUT DEDUCTION OF TAX AT SOURCE. JOINT DIRECTOR OF INCOME-TAX (INTERNATIONAL TAXATION) VIDE HIS ORDER DATED 27.04.2006 AUTHORISED CITI BANK TO RECEIVE THROUGH ALL ITS BRA NCHES SITUATED IN INDIA THE FOLLOWING AMOUNTS WITHOUT DEDUCTION OF INCOME-TAX U /S 195(1) OF THE ACT ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 13 VIZ., (A) INTEREST; AND (B) ANY SUMS NOT BEING INTE REST OR DIVIDENDS. IT IS FURTHER PROVIDED IN SUCH ORDER THAT: THIS CERTIFIC ATE COVERS ONLY SUMS AS ARE RECEIVABLE BY THE AFORESAID BRANCH (ES) ON ITS/THEI R ACCOUNT AND NOT THOSE WHICH ARE RECEIVABLE ON BEHALF OF YOUR HEAD OFFICE OR ANY OTHER BRANCH OUTSIDE INDIA OR ANY OTHER PERSON. TO SIMILAR EFF ECT IS THE CERTIFICATE ISSUED TO BARCLAYS BANK WHICH IS DATED 22.03.2006. ON GOI NG THROUGH THE ABOVE CERTIFICATES ISSUED U/S 195(3) TO BOTH THE BANKS, I T IS PALPABLE THAT NO DEDUCTION OF TAX AT SOURCE IS REQUIRED IN CASE THEY , INTER ALIA , RECEIVE ANY SUM NOT BEING INTEREST OR DIVIDEND AND, FURTHER, S UCH SUM IS RECEIVED BY THE RESPECTIVE BRANCHES ON THEIR OWN ACCOUNT AND N OT ON BEHALF OF HEAD OFFICE OR ANY OTHER BRANCH OUTSIDE INDIA OR ANY OTH ER PERSON. ADVERTING TO THE FACTS OF THE INSTANT CASE, WE FIND THAT BOTH TH E BANKS RECEIVED THE PREMIUM WHICH IS, OBVIOUSLY, A SUM NOT BEING INTER EST OR DIVIDEND AND, FURTHER, SUCH SUM WAS RECEIVABLE BY THE RESPECTIVE BRANCHES ON THEIR OWN ACCOUNT. HAVING ISSUED CERTIFICATES U/S 195(3) OF T HE ACT TO THE TWO BANKS, THE REVENUE WAS NOT WITHIN ITS POWER TO REQUIRE DED UCTION OF TAX AT SOURCE FROM THE AMOUNT OF PREMIUM PAYABLE TO THESE TWO BAN KS, WHICH WAS CLAIMED AS DEDUCTION. WE, THEREFORE, HOLD THAT THE ASSESSEE RIGHTLY CLAIMED ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 14 DEDUCTION FOR THE PROPORTIONATE PART OF THE PREMIUM PAYABLE TO CITI BANK N.A. AND BARCLAYS BANK. THE SUSTENANCE OF ADDITION BY THE LD. CIT(A) TO THE TUNE OF RS.13.61 CRORE AND ODD IS ERGO, SET ASI DE. THE GROUND RAISED BY THE ASSESSEE IS ALLOWED AND THAT BY THE REVENUE IS DISMISSED. 10. THE ONLY OTHER ISSUE RAISED BY THE ASSESSEE IN ITS APPEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF RS.2,02,75,187/- IN UNIT 2 AND RS.2,53,90,930/- IN UNIT 3 OUT OF TOTAL DEDUCTION CLAIMED U/S 80IB OF THE ACT. 11. THE FACTS APROPOS THIS GROUND ARE THAT THE ASSE SSEE CLAIMED DEDUCTION U/SS 80IB AND 80IC OF THE ACT AMOUNTING TO RS.9,10, 68,686/- AND RS.63,69,15,825/- RESPECTIVELY. THE ASSESSEE CLAI MED DEDUCTION U/S 80IB ON THE NET INCOME OF UNIT NOS. 2 AND 3, BOTH AT BAD DI, HIMACHAL PRADESH AND DEDUCTION U/S 80IC ON INCOME FROM UNIT NOS. 4 A ND 6, BOTH AT GUWAHATI. THERE IS NO DISPUTE INSOFAR AS DEDUCTION U/S 80IC IS CONCERNED. THE ASSESSING OFFICER OBSERVED THAT ANOTHER UNIT I. E., UNIT 1 WAS FULLY FUNCTIONAL IN BADDI WHICH, ADMITTEDLY, DID NOT Q UALIFY FOR TAX HOLIDAY. HE DEPUTED INSPECTOR OF HIS CHARGE FOR SPOT INQUIRY TO KNOW ABOUT THE ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 15 MANUFACTURING PROCESS AT THE THREE UNITS IN IN BADD I. THE INSPECTOR VISITED THE UNITS AND REPORTED THAT THE UNIT 1 IS ENGAGED I N THE PRODUCTION OF HEATERS ONLY WHICH, AFTER FINAL ASSEMBLY AND TESTIN G ARE TRANSFERRED TO UNIT NOS.2 AND 3; UNIT 2 IS ENGAGED IN THE PRODUCTION O F REFILLS CONTAINING THE CHEMICAL OF MOSQUITO REPELLANTS AND GETS THE SUPPLY OF HEATERS FROM UNIT 1; COMBO PACKS CONTAINING REFILL AND HEATER ARE THEN P ACKED FROM THIS UNIT FOR SALE ; AN UNIT NO. 3 IS ENGAGED IN THE PRODUCTION OF REFILLS CONTAINING CHEMICALS FOR MOSQUITO REPELLANTS AND GET SAME SUPP LY OF HEATERS HAVING CORD (CMD) FROM UNIT NO. 1. THE ASSESSEE WAS CALLE D UPON TO EXPLAIN AS TO WHY DEDUCTION U/S 80IB SHOULD NOT BE RESTRICTED TO THE NET INCOME OF UNIT NOS.2 AND 3. THE ASSESSEE SUBMITTED THAT UNIT NOS.2 AND 3 ARE INDEPENDENT AND THE APPARATUS IS TRANSFERRED FROM UNIT-1AT EXCI SABLE VALUE AND IS USED AS INPUT/RAW MATERIAL FOR MANUFACTURING THE FINAL PROD UCTS. THE ASSESSING OFFICER HELD THAT PRODUCTION OF HEATERS AT UNIT NO. 1 WAS NOT ELIGIBLE FOR DEDUCTION U/S 80-IB. HE OBSERVED THAT OUT OF TOTAL SALES OF UNIT-2, 48% WAS DIRECTLY ATTRIBUTABLE TO THE BATTERY COMPONENT SALES FROM UNIT-1 AND FROM TOTAL SALES OF UNIT-3, 52% WAS ATTRIBUTABLE TO BATTERY COMPONENT SALE FROM UNIT-1. HE, THEREFORE, RESTRICTED THE AMOUNT OF DEDUCTION U/S 80IB TO ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 16 BOTH THE UNITS ACCORDINGLY AND A SUM OF RS.4,54,02, 569/- WAS DISALLOWED FROM THE DEDUCTION CLAIMED U/S 80IB IN RESPECT OF U NITS-2 AND 3 WHICH RELATED TO SUPPLY OF HEATERS FROM NON-ELIGIBLE UNIT -1. NO RELIEF WAS ALLOWED IN THE FIRST APPEAL. 12. HAVING HEARD BOTH THE SIDES AND PERUSED THE REL EVANT MATERIAL ON RECORD, IT IS FOUND AS AN ADMITTED POSITION THAT UN IT-1 OF THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB IN WHICH MANUFACTUR ING OF HEATERS IS DONE. THE ELIGIBLE UNITS ARE 2 AND 3 WHICH USE THE OUTPUT OF UNIT-1 AS THEIR INPUT. NO BILLING IS DONE SEPARATELY BY UNIT-1 AND ITS OUT PUT IS TRANSFERRED TO UNIT NOS.2 AND 3 AT EXCISABLE VALUE. IT IS ONLY UNIT NO S.2 AND 3, WHICH MAKE THE SALE OF THE COMBINED PRODUCT INCLUDING THE HEATERS SUPPLIED BY UNIT-1 AND RAISE INVOICES ACCORDINGLY. IN THIS VIEW OF THE MA TTER, IT BECOMES EXPLICITLY CLEAR THAT THE INCOME RELATABLE TO THE GOODS MANUFA CTURED IN UNIT-1 CANNOT BE ALLOWED DEDUCTION U/S 80IB, EVEN THOUGH THE ULTI MATE SALE IS MADE BY UNIT NOS.2 AND 3 USING, INTER ALIA, THE OUTPUT OF UNIT-1 AS THEIR RESPECTIVE INPUT. THE CONTENTION OF THE ASSESSEE FOR ALLOWING DEDUCTION ON THE TOTAL INCOME FROM UNIT NOS. 2 AND 3, THUS, CANNOT BE ACCE PTED. ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 17 13. NEXT COMES THE QUESTION OF DETERMINATION OF THE AMOUNT OF INCOME NOT ELIGIBLE FOR DEDUCTION U/S 80IB. ADMITTEDLY, U NIT NO. 1 HAS NOT RAISED ANY INVOICES. FURTHER, OUR ATTENTION HAS NOT BEEN DRAWN TOWARDS ANY MATERIAL SHOWING SEGREGATION OF INCOME PERTAINING T O UNIT NO. 1 FROM THE TOTAL INCOME OF UNIT NOS. 2 AND 3, WHICH ARE MAKIN G SALES AND RAISING COMPOSITE INVOICES. IT IS FOUND THAT UNIT NO. 1 IS SENDING ITS OUTPUT TO UNIT NOS. 2 AND 3 AT A PARTICULAR EXCISABLE VALUE. SIMI LARLY, UNIT NOS. 2 AND 3 ALSO DETERMINE THE EXCISABLE VALUE OF THEIR OUTPUT. IN THE ABSENCE OF ANY OTHER RATIONAL BASIS FOR ALLOCATING INCOME TO THE U NIT 1 FROM THE COMBINED INCOME OF UNITS NOS. 2 AND 3, WE ARE SATISFIED THA T THE RATIO OF THE EXCISABLE VALUE OF THE OUTPUT OF UNIT 1 VIS--VIS THAT OF UNITS 2 AND 3 WILL CONSTITUTE A GOOD BASIS FOR BIFURCATION OF INCOME. WE HOLD ACCOR DINGLY AND DIRECT THE ASSESSING OFFICER TO FIRST FIND OUT THE AMOUNT OF P ROFIT FROM SALES MADE BY UNIT NO. 2. THEN, FIND OUT SEPARATE EXCISABLE VALU E OF GOODS TRANSFERRED FROM UNIT NO. 1 TO THE UNIT NO. 2. THE TOTAL PROFI T OF UNIT 2 SHOULD BE APPORTIONED TO UNIT NO. 1 IN THE RATIO OF EXCISABLE VALUE OF GOODS IN UNIT 1 AS TOTAL OF EXCISABLE VALUE OF UNITS 1 AND 2. SIMI LAR EXERCISE SHOULD BE ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 18 DONE FOR DETERMINING THE SHARE OF INCOME OF UNIT 1 IN THE INCOME OF UNIT NO. 3 SEPARATELY. 14. GROUND NO.2 OF THE REVENUES APPEAL HAS BEEN WO RDED AS DIRECTED AGAINST DELETION OF ADDITION OF RS.48,05,198/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SALE OF MUTUAL FUNDS, THOUGH, IN FACT, IT IS NOT A CASE OF DELETION OF ADDITION BUT SIMPLY A CHANGE OF HEAD UNDER WHICH THE INCOME SHOULD BE ASSESSED. THE FACTUAL MATRIX OF THIS GRO UND IS THAT THE ASSESSEE DECLARED SHORT-TERM CAPITAL GAIN OF RS.48,05,198/-. ON BEING CALLED UPON TO EXPLAIN AS TO WHY SUCH SHORT-TERM CAPITAL GAIN BE N OT TREATED AS `BUSINESS INCOME, THE ASSESSEE FURNISHED REPLY, WHICH HAS BE EN DISCUSSED IN THE ASSESSMENT ORDER. THE ASSESSING OFFICER HELD THAT THE ENTIRE GAIN AMOUNTING TO RS.48.05 LAC, DERIVED BY THE ASSESSEE FROM PURCHASE AND SALE OF SHARES WAS BUSINESS INCOME. THE LD. CIT(A) OVER TURNED THE ASSESSMENT ORDER ON THIS POINT. 15. HAVING HEARD BOTH THE SIDES AND PERUSED THE REL EVANT MATERIAL ON RECORD, IT IS OBSERVED THAT PURSUANT TO THE ORDER O F THE HON'BLE DELHI HIGH COURT, M/S KARAMCHAND APPLIANCES PVT. LTD. (KAPL) WAS AMALGAMATED ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 19 WITH THE ASSESSEE COMPANY W.E.F. 01.06.2005. AS A RESULT OF SUCH MERGER ALL INVESTMENTS IN THE MUTUAL FUNDS AS DONE BY KAPL GOT TRANSFERRED TO THE ASSESSEE AT BOOK VALUE. IT IS FROM THE TRANSFER OF SUCH MUTUAL FUNDS THAT THE INSTANT CAPITAL GAIN OF RS.48.04 LAC HAS RESULTED I N THE YEAR IN QUESTION. PRIOR TO AMALGAMATION KAPL WAS SHOWING SUCH MUTUAL FUNDS UNDER THE HEAD INVESTMENTS AS HAS BEEN RECORDED BY THE CIT( A) IN PARA 4.1 OF THE IMPUGNED ORDER AND PURSUANT TO THE AMALGAMATION, T HE ASSESSEE CONTINUED TO SHOW INVESTMENT IN SUCH MUTUAL FUNDS AS INVESTME NT AND NEVER TREATED THE SAME AS STOCK-IN-TRADE. THE AMOUNT UNDER CONSI DERATION IS ONLY A PROFIT FROM THE TRANSFER OF SUCH MUTUAL FUNDS AND NOT FROM ANY SHARES ETC. THE ASSESSEE TRANSFERRED ALL THE MUTUAL FUNDS ACQUIRED FROM KAPL WITHIN TWO YEARS AND THERE WERE NO FREQUENT TRANSACTIONS IN TH ESE MUTUAL FUNDS. THE ASSESSING OFFICER TREATED PROFIT FROM TRANSFER OF S UCH MUTUAL FUNDS AS `BUSINESS INCOME IN COMPLETING THE ASSESSMENT FOR THE ASSESSMENT YEAR 2006-07. THE LD. CIT(A) ACCEPTED THE ASSESSEES CL AIM, A COPY OF WHICH ORDER HAS BEEN PLACED ON RECORD. THOUGH THE DEPART MENT PREFERRED APPEAL AGAINST THE ORDER, BUT, DID NOT ASSAIL THE CORRECTN ESS OF THE ORDER OF THE LD. FIRST APPELLATE AUTHORITY ON THIS ISSUE. IN VIEW O F THE FOREGOING DISCUSSION, ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 20 WE ARE SATISFIED THAT THE LD. CIT(A) WAS JUSTIFIED IN TREATING RS.48.04 LAC, BEING, PROFIT FROM SALE OF MUTUAL FUNDS, AS SHORT- TERM CAPITAL GAIN. 16. GROUND NO.3 OF THE REVENUES APPEAL IS AGAINST THE DELETION OF DISALLOWANCE OF RS.1,32,15,178/- MADE BY THE ASSESS ING OFFICER ON ACCOUNT OF DAMAGES AND SHORTAGES. THE ASSESSEE CLAIMED DED UCTION ON ACCOUNT OF SHORTAGES AND DAMAGES TO THE TUNE OF RS.1.32 CRORE IN ITS PROFIT & LOSS ACCOUNT, WHICH THE ASSESSING OFFICER DID NOT ALLOW. THE LD. CIT(A) CONCURRED WITH THE ASSESSEES SUBMISSIONS AND ALLOW ED SUCH DEDUCTION. 17. HAVING HEARD BOTH THE SIDES AND PERUSED THE REL EVANT MATERIAL ON RECORD, IT IS SEEN THAT THE ASSESSEE MADE A TURNOVE R OF MORE THAN RS.300 CRORE AND THE DAMAGES ARE ONLY RS.1.32 CRORE. THER E IS NO DOUBLE DEDUCTION AS MADE OUT BY THE ASSESSING OFFICER. SU CH DEDUCTION OF RS.1.32 CRORE IS TOWARDS ABNORMAL LOSS. CONSIDERING THE EN TIRETY OF FACTS AND CIRCUMSTANCES OF THE INSTANT CASE, WE ARE SATISFIED THAT THE LD. CIT(A) WAS JUSTIFIED IN DELETING THIS ADDITION. WE, ERGO, COUN TENANCE THE VIEW TAKEN BY THE LD. CIT(A) ON THIS ISSUE. ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 21 18. THE LAST GROUND OF THE REVENUES APPEAL IS AGAI NST RESTRICTING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER U/S 14A TO 1% OF THE DIVIDEND INCOME. THE ASSESSING OFFICER APPLIED THE PROVISIO NS OF RULE 8D AND COMPUTED DISALLOWANCE ACCORDINGLY U/S 14A. THE LD. CIT(A) HELD THAT RULE 8D WAS NOT APPLICABLE TO THE YEAR IN QUESTION. HE, THEREFORE, FOLLOWING HIS DECISION FOR THE ASSESSMENT YEAR 2006-07, RESTR ICTED THE DISALLOWANCE TO 1% OF THE DIVIDEND INCOME. THE REVENUE IS AGGRIEVE D AGAINST THE REDUCTION IN THE AMOUNT OF DISALLOWANCE. 19. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PER USING THE RELEVANT MATERIAL ON RECORD, IT IS OBSERVED THAT ASSESSMENT YEAR UNDER CONSIDERATION IS 2007-08. THE PROVISIONS OF RULE 8D, FOR MAKING DISALLOWANCE U/S 14A OF THE ACT, CANNOT BE APPLIED IN ANY YEAR PRIOR TO A.Y. 2008-09 AS HAS BEEN HELD BY THE HON'BLE SUPREME COURT IN THE CASE GODREJ & BOYCE MANUFACTURING COMPANY LTD. VS. DCIT (2017) 394 ITR 449 (SC). IT IS OBSERVED THAT THE LD. CIT(A) FOLLOWED HIS OWN ORDER FOR THE ASSESSMENT YEAR 2006-07 AND RESTRICTED THE DISALLOWANCE TO 1% OF THE DIVIDEND INCOME. SUCH ORDER WAS ASSAILED BY THE REVENUE BEFORE THE T RIBUNAL. VIDE ORDER DATED 19.08.2005, A COPY PLACED ON PAGE 227 OF THE PAPER BOOK, THE ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 22 TRIBUNAL UPHELD THE ACTION OF THE LD. CIT(A) IN RE STRICTING THE DISALLOWANCE TO 1% OF THE DIVIDEND INCOME. IN THE ABSENCE OF AN Y FACTS JUSTIFYING THE DEPARTURE FROM THE ORDER PASSED BY THE TRIBUNAL FOR THE IMMEDIATELY PRECEDING YEAR, WE UPHOLD THE SAME. 20. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED AND THAT OF THE REVENUE IS DISMISSED. ASSESSMENT YEAR 2008-09 21. THE FIRST GROUND OF THE ASSESSEES APPEAL IS AG AINST THE REDUCTION OF THE ASSESSEES ADDITIONAL CLAIM OF HEDGING PREMIUM OF RS.13.61 CRORE RELATING TO ASSESSMENT YEAR 2007-08. FIRST TWO GRO UNDS OF THE REVENUES APPEAL ARE AGAINST THE DELETION OF ADDITION OF RS.1 5,26,33,459/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF PRE MIUM AND INTEREST. THESE ARE DIRECTED AGAINST THE VIEW POINT OF THE LD . CIT(A) THAT PROVISIONS OF SECTION 40(A)(IA) ARE NOT ATTRACTED. 22. SIMILAR TO THE ASSESSMENT YEAR 2007-08, THE ASSESSEE CLAIMED DEDUCTION ON ACCOUNT OF INTEREST AND PREMIUM TO CIT I BANK AND BARCLAYS BANK. THE AO MADE DISALLOWANCE OF BOTH THE ITEMS B Y TREATING THE SAME AS ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 23 SPECULATION LOSS AND ALSO COVERED IT U/S 40(A)(IA) OF THE ACT ON ACCOUNT OF FAILURE OF THE ASSESSEE TO WITHHOLD TAX AT SOURCE. THE LD. CIT(A) ALLOWED DEDUCTION FOR BOTH THE INTEREST AND PREMIUM. HE, H OWEVER, REFUSED TO ENTERTAIN THE ASSESSEES CLAIM IN RESPECT OF DISALL OWANCE SUSTAINED BY HIM IN THE PROCEEDINGS FOR THE ASSESSMENT YEAR 2007-08. 23. WHILE DISPOSING OFF THE APPEALS OF THE ASS ESSEE AND REVENUE FOR THE ASSESSMENT YEAR 2007-08, WE HAVE HELD THAT BOTH THE INTEREST AND PREMIUM COMPONENTS ARE DEDUCTIBLE AND, FURTHER, THE PROVISI ONS OF SECTION 40(A)(IA) ARE NOT ATTRACTED. THE LD. AR HAS POINTED OUT THAT CERTIFICATES U/S 195(3) HAVE BEEN ISSUED TO BOTH THE BANKS FOR THIS YEAR AS WELL ON THE SAME LINES. IN VIEW OF THE FOREGOING, IT BECOMES CLEAR THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION OF RS.15.26 CRORE. THE GROUNDS TAKEN BY THE REVENUE ARE, THEREFORE, DISMISSED. AS REGARDS THE ASSESSEES CL AIM, WE FIND THAT THE SAME HAS BECOME INFRUCTUOUS IN VIEW OF OUR DECISION IN A LLOWING SUCH DEDUCTION IN THE PRECEDING YEAR ITSELF. 24. GROUND NO.2 OF THE ASSESSEES APPEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF DEDUCTION U/S 80IB IN RESPECT OF UN IT NO.3. BOTH THE SIDES ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 24 ARE IN AGREEMENT THAT THE FACTS AND CIRCUMSTANCES O F THIS GROUND ARE SIMILAR TO THOSE OF THE PRECEDING YEAR. FOLLOWING THE VIEW TAKEN HEREINABOVE, WE HOLD THAT THE ASSESSEE CANNOT BE ALLOWED DEDUCTION U/S 80IB IN RESPECT OF INCOME ARISING FROM THE MANUFACTURING OF UNIT-I. T HE COMPUTATION PART IS DIRECTED TO BE RE-DONE IN ACCORDANCE WITH THE GUIDE LINES LAID DOWN IN OUR ORDER FOR THE PRECEDING YEAR. 25. GROUND NO. 3 OF THE REVENUES APPEAL IS AGAINST THE DELETION OF ADDITION OF RS.2,77,55,869/- ON ACCOUNT OF DAMAGES AND SHORTAGES. BOTH THE SIDES ARE IN AGREEMENT THAT THE FACTS AND CIRCU MSTANCES OF THIS GROUND ARE MUTATIS MUTANDIS SIMILAR TO THOSE OF THE PRECEDING YEAR. FOLLOWING T HE VIEW TAKEN HEREINABOVE FOR THE PRECEDING YEAR, WE H OLD THAT THE LD. CIT(A) WAS JUSTIFIED IN DELETING THIS ADDITION. 26. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED AND THAT OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . THE ORDER PRONOUNCED IN THE OPEN COURT ON 10.10.201 8. SD/- SD/- [LALIET KUMAR] [R.S. SYAL] JUDICIAL MEMBER VICE PRESIDENT DATED, 10 TH OCTOBER, 2018. ITA NOS.3759, 4255, 3340 & 3341/DEL/2015 25 DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.