ACIT 3(1), MUMBAI V. ASIAN ELECTRONICS LTD, MUMBAI

ITA 3376/MUM/2012

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8908 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-07-2017
• Assessment Year: 1999-2000
• Appeal Filed On: 14-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MEENA
• Keywords: Business expenditure
• Section: 145

Judgement Text

P A G E | 1 ITA NO. 3376 /MUM/20 12 AY: 1999 - 00 DCIT VS. M/S ASIAN ELECTRONICS LTD. IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, M UMBAI BEFORE SHRI G.S. PANNU , AM AND SHRI RAVISH SOOD, JM ITA NO. 3376 /MUM/201 2 ( / ASSESSMENT YEAR: 1999 - 00 ) DCIT, CIRCLE 3(1), ROOM NO. 607 , 6 TH FLOOR, AAYKAR BHAVAN, M.K. ROAD, MUMBAI - 400 020 / VS. M/S ASIAN ELECTRONICS LTD., 144, MEHAR NAAZ, CUFFE PAR A DE, MUMBAI - 400 0 21 ./ ./ PAN NO. AA BCA0832C ( / REVENUE) : ( / ASSESSEE ) / REVENUE BY : SHRI R.P. M EENA , D.R / ASSESSEE BY : NONE / DATE OF HEARING : 25.10 .2017 / DATE OF PRONOUNCEMENT : 27 .10.2017 / O R D E R PER RAVISH SOOD, JUDICIAL MEMBER: THE PRESENT APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST T HE ORDER PASSED BY THE CIT(A) - 5 , MUMBAI, DATED 22.02.2012 , WHICH IN ITSELF ARISES FROM THE ORDER PASSED BY THE A.O U/S 1 43(3) OF THE P A G E | 2 ITA NO. 3376 /MUM/20 12 AY: 1999 - 00 DCIT VS. M/S ASIAN ELECTRONICS LTD. INCOME - TAX ACT,1961 (FOR SHORT ACT) , DATED 26.03.2002 . THE REVENUE ASSAILING THE ORDER PASSED BY THE CIT(A) HAD RAISED BEFORE US THE FOLLOWING GROUNDS OF AP PEAL: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO ALLOW THE EXPENDITURE OF RS. 9,18,23,048/ - CLAIMED TOWARDS LEASE RENTALS EVEN THOUGH THE LEASE RENT RECEIVABLE HAS NOT BEEN ACCOUNTED FOR AND OFFERED FOR TAXATION AN D LIABILITY WAS A CONTINGENT/FUTURE LIABILITY. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY WAY OF DISALLOWANCE OF LEASE RENT PAYMENTS FOLLOWING THE DECISION OF HONBLE ITAT I BENCH IN ASSESSEES OWN CASE FOR A.Y. 1997 - 98 & 1998 - 99, WITHOUT APPRECIATING THE FACT THAT THE DECISION OF THE HONBLE ITAT FOR THESE YEARS WAS NOT ACCEPTED BY THE DEPARTMENT AND AN APPEAL TO HONBLE BOMBAY HIGH COURT IS FILED. 3. ON THE FACTS AND CIRCUMSTANCE S OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO ALLOW HIGHER DEDUCTION U/S 80IA OF THE I.T. ACT, WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS NOT PROPERLY ALLOCATED THE EXPENSES ATTRIBUTABLE TO SILVASSA UNIT. 4. THE APPELL ANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 5. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. BRIEFLY STATED, THE FACTS OF TH E CASE ARE THAT THE ASSESSEE COMPANY WHICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF SWITCHED CAPACITORS AND AUTOMATIC LOAD MONITORING SYSTEMS HAD FILED ITS RETURN OF INCOME ON 30.12.1999 SHOWING TOTAL INCOME OF RS. 20,52,640/ - . THE RETURN OF INCOME WAS REVISED BY THE ASSESSEE AT THE SAME INCOME. THE CASE OF THE ASSESSEE WAS THEREAFTER TAKEN UP FOR SCRUTINY ASSESSMENT UNDER SEC. 143(2) OF THE ACT. 3. THE ASSESSEE COMPANY WHICH WAS ENGAGED IN THE BUSINESS OF MANUFACTURING AUTOMATIC LOAD MONITORIN G SYSTEMS (FOR SHORT ALMS) WOULD IN THE NORMAL COURSE OF ITS BUSINESS SELL THE SAME TO VARIOUS FINANCIAL COMPANIES AND INSTITUTIONS , WHICH THEREAFTER WERE TAKEN P A G E | 3 ITA NO. 3376 /MUM/20 12 AY: 1999 - 00 DCIT VS. M/S ASIAN ELECTRONICS LTD. BACK BY THE ASSESSEE ON LEASE FROM THE SAID PARTIES . THE ASSESSEE LEASED THE AFORESAID ALMS T O VARIOUS ELECTRICITY BOARDS UNDER THE STATE GOVERNMENTS . THE ASSESSEE WOULD PAY LEASE RENT TO THE FINANCE COMPANIES AND INSTITUTIONS FROM THE DATE OF WHICH THE SAME HAD BEEN TAKEN ON LEASE, HOWEVER, IN TERMS OF THE SUB LEASE AGREEMENT WITH THE S TATE ELECT RICITY BOARD THE LEASE RENT WOULD BE RECEIVED BY THE ASSESSEE ONLY AFTER INSTALLATION OF THE ALMS IN TERMS OF THE CONTRACT, WHICH WOULD NORMALLY INVOLVE A PERIOD OF A YEAR OR MORE DEPENDING ON THE VOLUMES INVOLVED. THAT PURSUANT TO THE AFORESAID ARRANGEMEN T AS CERTAIN TIME GAP WOULD BE INVOLVED IN TAKING OF THE ALMS BY THE ASSESSEE ON LEASE FROM THE AFOREMENTIONED FINANCE COMPANIES AND SUB LEASING OF THE SAME TO THE STATE ELECTRICITY BOARDS, THEREFORE, THOUGH THE LEASE RENT WOULD BE PAYABLE BY THE ASSESSEE ON THE SAID ALMS , HOWEVER, THE INCOME FROM SUB LEASING THE SAME TO THE STATE ELECTRICITY BOARDS WOULD ACCRUE ONLY ON THE INSTALLATION AND COMMISSIONING OF THE SAID ASSETS. THE ASSESSEE WOULD THOUGH DEBIT THE LEA SE RENT ON THE ALMS ON THE BASIS OF MATCHING PRINCIPAL , BUT WOULD CLAIM THE SAME AS AN EXPENDITURE ARISING OUT OF CONTRACTUAL LIABILITIES AND PAYMENTS MADE IN ITS RETURN OF INCOME. THE ASSESSEE DURING THE YEAR ON THE AFORESAID BASIS CLAIMED IN ITS RETURN O F INCOME AN AMOUNT OF RS. 9,18,23,408/ - AS DEDUCTION ON ACCOUNT OF LEASE RENT PAYABLE/PAID , AS THE SAID AMOUNT HAD ACCRUED AND WAS PAYABLE AS PER THE AGREEMENTS. THE A.O HOWEVER NOT FINDING FAVOR WITH THE AFORESAID CLAIM OF THE ASSESSEE DISALLOWED THE SAME BY HOLDING A CONVICTION THAT IN VIEW OF THE PROVISIONS OF SEC. 145 OF THE INCOME TAX ACT, 1961, THE REGULAR METHOD OF ACCOUNTING FOLLOWED SHOULD BE ADHERED TO . THE AFORESAID DISALLOWANCE MADE BY THE A.O WAS BACKED BY THE REASONING ON THE BASIS OF WHICH SIMILAR DISALLOWANCES WERE MADE IN THE HANDS OF THE ASSESSEE IN THE EARLIER YEARS. P A G E | 4 ITA NO. 3376 /MUM/20 12 AY: 1999 - 00 DCIT VS. M/S ASIAN ELECTRONICS LTD. 4. THE A.O FURTHER DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE HAD CLAIM ED IN ITS RETURN OF INCOME 100% DEDUCTION U/S 80IA IN RESPECT OF PROF IT OF S ILVASSA UNIT AMOUNTING TO RS.23,00,48,370/ - , BUT HAD RESTRICTED THE SAME TO THE EXTENT OF PROFIT OF RS. 5,97,49,227/ - . THE A.O HOWEVER RESTRICTED THE AFORESAID ENTITLEMENT OF DEDUCTION OF THE ASSESSEE TO RS. 18,25,79,005/ - . THE A.O WHILE RESTRICTING THE CLAIM OF THE ASSESSEE TOWARDS D EDUCTION U/S 80IA CALCULATED THE DEEMED ROYALTY @ 5% I.E. RS. 1,42,63,365/ - ON THE TURNOVER OF ALMS AND SWITCH CAPACITORS AT S ILVASSA , AS PER THE LAST YEAR . THE A.O FURTHER REDUCED THE PROFIT OF S ILVASSA UNIT BY AN AMOUN T OF RS. 3,32,06,000/ - ON THE GROUND THAT THE EXPENSES WERE NOT CORRECTLY ALLOCATED TO THE S ILVASSA UNIT. THE A.O AFTER DELIBERATING ON CERTAIN OTHER ISSUES ASSESSED THE INCOME OF THE ASSESSEE AT RS. 22,52,639/ - VIDE HIS ORDER PASSED U/S 143(3), DATED 26.0 3.2002. 5. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE ASSESSEE ASSAILING THE DISALLOWANCE OF LEASE RENT OF RS. 9 ,18,23,408/ - SUBMITTED THAT THOUGH ON THE BASIS OF MATCHING PRINCIPLE THE LEASE RENTAL EXPENDITURE WAS NOT DEBITED IN THE PROFIT AND LOSS ACCOUNT AS NO INCOME BY WAY OF SUB LEASING OF THE ASSETS HAD ACCRUED, THE CLAIM OF THE AFORESAID AMOUNT OF RS. 9,18,23,408/ - AS AN EXPENDITURE INCURRED BY THE ASSESSEE AS PER CONTRACTUAL LIABILITY AND PAYMENT MADE IN ITS RETURN OF INCOME WAS WELL IN ORDER AND HAD WRONGLY BEEN DISLODGED BY THE A.O. IT WAS SUBMITTED BY THE ASSESSEE THAT A SIMILAR DISALLOWANCE OF THE LEASE RENTAL WAS MAD E BY THE A.O WHILE FRAMING THE ASSESSMENT IN THE CASE OF THE ASSESSEE FOR A.Y 1997 - 98 AND A.Y. 1998 - 99, WHICH HOWEVER WAS DELETED BY THE CIT(A) AND THE LATTERS ORDER HAD THEREAFTER BEEN APPROVED BY THE TRIBUNAL , VIZ. ITAT, MUMBAI BENCH I, VIDE ITS CONSOL IDATE ORDER DATED 04.04.2008 IN ITA NO. 3599/MUM/2002 FOR A.Y. 1997 - 98 AND ITA NO. P A G E | 5 ITA NO. 3376 /MUM/20 12 AY: 1999 - 00 DCIT VS. M/S ASIAN ELECTRONICS LTD. 3600/MUM/2002 FOR A.Y. 1998 - 99. THE CIT(A) AFTER DELIBERATING ON THE CONTENTION S OF THE ASSESSEE IN THE BACKDROP OF THE FACTS OF THE CASE OBSERVED THAT AS THE FACTS AND THE ISSUE INVOLVED IN THE PRESENT CASE WERE IDENTICAL TO THOSE INVOLVED IN THE CASE OF THE ASSESSEE FOR A.Y. 1997 - 98 AND A.Y. 1998 - 9 9, THEREFORE, FOLLOWING THE ORDER OF HIS PREDECESSOR, WHICH HAD BEEN APPROVED BY THE TRIBUNAL, THEREIN DELETED THE DISALLOWANCE OF RS. 9,18,23,408/ - MADE BY THE A.O. 6. THE ASSESSEE FURTHER ASSAILED THE RESTRICTING OF THE ENTITLEMENT TOWARDS DEDUCTION U/S 80IA TO AN AMOUNT OF RS. 18,25,79,005/ - INSTEAD OF RS. 23,00,48,370/ - RAISED BY THE ASSESSEE . IT WAS SUBMITTED BY THE ASSESSEE THAT ON THE VERY SAME BASIS ON WHICH THE ENTITLEMENT OF THE ASSESSEE TOWARDS CLAIM OF DEDUCTION UNDER SEC. 80IA HAD BEEN RESTRICTED BY THE A.O DURING THE YEAR UNDER CONSIDERATION , VIZ. REDUCTION OF THE ELIGIBLE PROFIT ON ACCOUNT OF ROYALTY AS WELL AS REDUC TION ON ACCOUNT OF ALLOCATION OF EXPENSES , THE SAID CLAIM OF DEDUCTION RAISED BY THE ASSESSEE U/S 80IA WAS REDUCED BY THE A.O IN ITS CASE FOR A.Y. 1997 - 98 AND A.Y. 1998 - 99. IT WAS SUBMITTED BY THE ASSESSEE THAT ON APPEAL THE CIT(A) HAD SET ASIDE THE RESTRICTING OF THE ENTITLEMENT OF THE DEDUCTION RAISED BY THE ASSESSEE U/S 80IA WHILE DISPOSING OF THE APPEALS FOR A.Y. 1997 - 98 AND A.Y. 1998 - 99, AS A RESULT WHEREOF THE CONSEQUENTIAL ADDITION WAS DELETED. THE CIT(A) AFTER DELIBERATING ON THE AFORESAID CONTENTION S OF THE ASSESSEE IN THE BACKDROP OF THE FACTS OF THE CASE OBSERVED THAT AS HIS PREDECESSOR WHILE DISPOSING OF THE APPEAL S OF THE ASSESSEE FOR THE PRECEDING YEARS, VIZ. A.Y. 1997 - 98 AND A.Y. 1998 - 99 HAD CONCLUD ED THAT THE REDUCTION FROM ELIGIBLE PROFIT ON ACCOUNT OF ROYA LTY WAS RIGHTLY DONE BY THE A.O, THUS CONFIRMED THE SAME, BUT HOWEVER DELETED THE REDUCTION ON ACCOUNT OF ALLOCATION OF EXPENSES . IT WAS FURTHER OBSERVED BY THE CIT(A) THAT HIS PREDECESSOR HAD F URTHER HELD THAT 5% ROYALTY WHICH P A G E | 6 ITA NO. 3376 /MUM/20 12 AY: 1999 - 00 DCIT VS. M/S ASIAN ELECTRONICS LTD. WAS REDUCED FROM THE TURNOVER OF THE S ILVASSA UNIT WOULD NOT APPLY TO THE TURNOVER PERTAINING TO ALMS. THUS, THE CIT(A) FINDING HIMSELF AS BEING IN AGREEMENT WITH THE VIEW TAKEN BY HIS PREDECESSOR ADOPTED THE SAID OBSERVATIONS AND PARTLY ALLOWED THE CLAIM OF THE ASSESSEE TOWARDS DEDUCTION UNDER SEC. 80IA IN TERMS OF HIS AFORESAID OBSERVATIONS. 7. THE REV ENUE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAD CARRIED THE MATTER IN APPEAL BEFORE US. WE FIND THAT DESPITE THE ASSESSEE RESPONDENT HAVING BEEN INTIMATED ABOUT THE DATE OF HEARING OF THE APPEAL HAD N EITHER APPEARED ON THE DATE OF HEARING, NOR ANY AP PLICATION SEEKING AN ADJOURNMENT HAD BEEN FILED . WE THUS IN LIGHT OF THE AFORESAID CIRCUMSTANCES THUS DISPOSE OF THIS APPEAL IN TERMS OF RULE 25 OF APPELLATE TRIBUNAL RULES, 1963, AFTER HEARING THE APP ELLANT REVENUE AND PERUSING THE ORDERS OF THE LOWER AUT HORITIES . 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED O N THE ORDER OF THE A.O AND SUBMITTED THAT THE DISALLOWANCE OF DEDUCTION OF RS. 9,18,23,408/ - CLAIM ED BY THE ASSESSEE IN RESPECT OF LEASE RENT, AS WELL AS THE RESTRICTION OF THE CLAIM OF THE ASSESSEE TOWARDS DEDUCTION UNDER SEC. 80IA WAS RIGHTLY DONE BY THE A.O AND WAS WELL IN ORDER. IT WAS SUBMITTED BY THE LD. D.R. THAT THE CIT(A) HAD ERRED IN VACATING THE DISALLOWANCE OF RS. 9,18,23,408/ - (SUPRA) AS WELL AS PARTLY ALLOWING THE CLAIM OF DEDUCTION U/S 80IA BY THE ASSESSEE. IT WAS SUBMITTED BY THE LD. D.R. THAT AS THE DECISION OF THE TRIBUNAL FOR A.Y. 1997 - 98 AND A.Y. 1998 - 98 HAD NOT BEEN ACCEPTED BY THE DEPARTMENT AND HAD BEEN ASSAILED BEFORE THE HONBLE HIGH COURT, THEREFORE, THE CIT(A) HAD ERRED IN DELETING THE DISALLOWANCE OF LEASE RENT EXPENDITURE BY FOLLOWING THE ORDER OF THE TRIBUNAL. 9. WE HAVE HEARD THE LD. D.R. AND PERUSED THE ORDER OF THE LOWER AUTHORITIES. WE FIND THAT THE CIT(A) TAKING COGNIZANCE OF THE FACT THAT A P A G E | 7 ITA NO. 3376 /MUM/20 12 AY: 1999 - 00 DCIT VS. M/S ASIAN ELECTRONICS LTD. SIMILAR DISALLOWANCE OF THE LEASE RENT EXPENDITURE MADE BY THE A.O WHILE FRAMING THE ASSESSMENT IN THE CASE OF THE ASSESSEE FOR A.Y. 1997 - 98 AND A.Y. 1998 - 99 HAD BEEN VACATED BY HIS PREDECESSOR, WHICH THEREAFTER HAD BEEN APPROVED BY THE TRIBUNAL, VIZ. ITAT , MUMBAI BENCH I, WHICH VIDE ITS CONSOLIDATE ORDER DATED 04.04.2008 IN ITA NO. 3599/MUM/2002 FOR A.Y. 1997 - 98 AND ITA NO. 36 00/MUM/2002 FOR A.Y. 1998 - 99 HAD DELETED THE ADDITION BY OBSERVING AS UNDER : 9. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS A ND GONE THROUGH RECORD CAREFULLY. THE A.O HAS NOT DOUBTED THE TRANSACTION. HIS EXPECTATION IS THAT ASSESSEE SHOULD HAVE SHOWN CORRESPONDING INCOME TO THE EXPENSES. ACCORDING TO THE ASSESSEE IT HAS INCURRED EXPENSES OVER THE INCOME IN THE INITIAL YEARS BUT ULTIMATELY IT EARNED PROFIT FROM THIS TRANSACTION. IT IS A SETTLED POSITION THAT FOR ALLOWING BUSINESS EXPENSES IT IS NOT NECESSARY THAT THE BUSINESS SHOULD HAVE PRODUCED CORRESPONDING INCOME. THE EXPENSES IS TO BE ALLOWED IF IT IS ESTABLISHED THAT THEY AR E INCURRED FOR THE PURPOSE OF THE BUSINESS. IN THIS CASE THE OBJECT AND THE INCURRENCE OF THE EXPENSES IS NOT IN DOUBT. THE LD. CIT(A) HAS CONSIDERED THE ISSUE WITH ALL POSSIBLE ANGLE AND TAKING INTO CONSIDERATION HIS FINDING RECORDED IN PARA 7.4 AND 7.5 W E DO NOT FIND ANY ERROR IN IT. THEREFORE, THIS GROUND IN BOTH THE YEARS IS REJECTED WE HAVE DELIBERATED ON THE AFORESAID FACTUAL POSITION AND FIND OURSELVES AS BEING IN AGREEMENT WITH THE VIEW TAKEN BY THE COORDINATE BENCH OF THE TRIBUNAL WHILE DELETIN G THE AFORESAID DISALLOWANCE IN THE CASE OF THE ASSESSEE F OR A.Y. 1997 - 98 AND A.Y. 1998 - 99 . WE ARE OF THE P A G E | 8 ITA NO. 3376 /MUM/20 12 AY: 1999 - 00 DCIT VS. M/S ASIAN ELECTRONICS LTD. CONSIDERED VIEW THAT NO INFIRMITY EMERGES FROM THE ORDER OF THE CIT(A) , WHO WE FIND HAD FOLLOWED THE AFORESAID ORDER OF THE TRIBUNAL . WE ARE OF THE CONSIDERED VIEW THAT AS TH E AFORESAID ORDER OF THE TRIBUNAL HAD NEITHER BEEN SET ASIDE OR STAYED BY THE HONBLE HIGH COURT, THEREFORE, WE ARE NOT PERSUADED TO BE IN AGREEMENT WITH THE LD. D.R. THAT THE CIT(A) HAD ERRED IN FOLLOWING THE ORDER OF THE TRIBUNA L AND DELETING THE ADDITION IN THE HANDS OF THE ASSESSEE. WE THUS UPHOLD THE ORDER OF THE CIT(A) IN RESPECT OF THE DELETION OF THE DISALLOWANCE OF LEASE EXPENSES OF RS. 9,18,23,408/ - BY HIM . THE GROUND OF APPEAL NO. 1 & 2 ARE DISMISSED IN TERMS OF OUR AFOR ESAID OBSERVATIONS. 10. THAT AS REGARDS THE RELIEF GRANTED BY THE CIT(A) IN RESPECT OF THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 80IA, WE FIND THAT THE CIT(A) HAD FOLLOWED THE ORDER OF HIS PREDECESSOR FOR A.Y. 1998 - 99 AND IN TERMS OF THE OBSERVATIONS RECO RDED BY HIM HAD MODIFIED THE CLAIM OF DEDUCTION RAISED BY THE ASSESSEE U/S 80IA. WE FIND THAT THE CIT(A) WHILE DELIBERATING ON THE ISSUE UNDER CONSIDERATION HAD OBSERVED AS UNDER : 53 I HAVE CONSIDERED THE FACTS OF THE CASE. ON THE SIMILAR FACTS AND ISSU E THE LD. CIT(A) - I IN THE A.Y 1998 - 99 HELD AS UNDER THE NEXT GROUND OF APPEAL IS AGAINST THE ASSESSING OFFICERS ORDER IN RESTRICTING THE DEDUCTION U/S 80IA AT RS. 21,86,23,055/ - INSTEAD OF RS. 31,52,89,055/ - CLAIMED BY THE APPELLANT. FOR THE REASON FULL Y DISCUSSED IN MY APPELLATE ORDER FOR A.Y. 1997 - 98, THE REDUCTION FROM ELIGIBLE PROFIT ON ACCOUNT OF ROYALTY IS CONFIRMED AND THE REDUCTION ON ACCOUNT OF ALLOCATION OF EXPENSES IS DELETED. SIMILAR, 5% ROYALTY WHICH IS BEING REDUCED FROM THE TURNOVER OF SIL VASSA UNIT WOULD NOT APPLY TO P A G E | 9 ITA NO. 3376 /MUM/20 12 AY: 1999 - 00 DCIT VS. M/S ASIAN ELECTRONICS LTD. THE TURNOVER PERTAINING TO ALMS. THIS GROUND OF APPEAL IS PARTLY ALLOWED. RESPECTFULLY FOLLOWING THE SAME, IT IS HELD THAT THE REDUCTION FROM ELIGIBLE PROFIT ON ACCOUNT OF ROYALTY IS CONFIRMED AND THE REDUCTION ON ACCOUNT OF ALLOCATION OF EXPENSES IS DELETED. SIMILAR, 5% ROYALTY WHICH IS BEING REDUCED FROM THE TURNOVER OF SILVASSA UNIT WOULD NOT APPLY TO THE TURNOVER PERTAINING TO ALMS. THUS, THIS GROUND OF APPEAL IS PARTLY ALLOWED. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ISSUE UNDER CONSIDERATION BEFORE US AND ARE PERSUADED TO BE IN AGREEMENT WITH THE VIEW TAKEN BY THE CIT(A). THE LD. D.R . HAD NOT BEEN ABLE TO DISLODGE THE OBSERVATIONS OF THE CIT(A) ON THE BASIS OF WHICH THE CLAIM OF DEDUCTION RAISED BY THE ASSESSEE U/S 80IA HAD BEEN ALLOWED BY THE CIT(A) SUBJECT TO CERTAIN MODIFICATIONS. WE THUS NOT FINDING ANY INFIRMITY WITH THE ORDER OF THE CIT(A), THEREIN UPHOLD THE VIEW TAKEN BY HIM AS REGARDS TH E ENTITLEMENT OF THE ASSESSEE TOWARDS CLAIM OF DEDUCTION U/S 80IA. THE GROUND OF APPEAL NO. 3 IS DISMISSED IN TERMS OF OUR AFORESAID OBSERVATIONS. 11. THE GROUND OF APPEAL NO. 4 & 5 BEING GENERAL IN NATURE ARE DISMISSED AS NOT PRESSED. 12 . THE APPEAL O F THE REVENUE IS DISMISSED IN TERMS OF OUR AFORESAID OBSERVATIONS . ORDER PRONOUNCED IN THE OPEN COURT ON 27 /10/2017 SD/ - SD/ - ( G.S.PANNU ) (RAVISH SOOD) ACC OUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 27 . 10 .2017 P A G E | 10 ITA NO. 3376 /MUM/20 12 AY: 1999 - 00 DCIT VS. M/S ASIAN ELECTRONICS LTD. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI