M/s Siemens Ltd.( as successor to Siemens VAI Metal Technologies Pvt Ltd) Formerly Known as Vai Engineering and Automotation private Limited., Kolkata V. I.T.O Wd - 2(4),kolkata., Kolkata

ITA 360/KOL/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1077 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 27-06-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 22-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTACHERJEE
• Assessee Lawyers: SAURABH KEDIA
• Keywords: Question of law; Revenue expenditure
• Section: 143(3); 37(1)

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.360/KOL/2013 ASSESSMENT YEAR:2004-05 M/S SIEMENS LTD., [AS SUCCESSOR TO SIEMENS VAI METAL TECHNOLOGIES PVT LTD.( FORMERLY KNOWN AS VAI ENGINEERING AND AUTOMATION (P) LTD.) ] BLOCK EP, PLOT-Y5, COMMERCIAL COMPLEX, SECTOR-V, SALT LAKE CITY, KOLKATA-700 009 [ PAN NO.AABCV 8348 D ] / V/S . INCOME TAX OFFICER, WARD-2(4), P-7, CHOWRINGHEE SQUARE, KOLKATA-69 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI SAURABH KEDIA, /BY RESPONDENT SHRI ARINDAM BHATTACHERJEE /DATE OF HEARING 05-10-2017 /DATE OF PRONOUNCEMENT 08-11-2017 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-XX, KOLKATA DATED 18.12.2012. ASSESSM ENT WAS FRAMED BY ITO WARD- 2(4), KOLKATA U/S 143(3) OF THE INCOME TAX ACT, 196 1 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 28.12.2006 FOR ASSESSMEN T YEAR 2004-05. ITA NO.360/KOL/2013 A.Y. 2004- 05 M/S SIEMENS LTD. VS. ITO WD-2(4) KOL. PAGE 2 SHRI SAURABH KEDIA, LD. AUTHORIZED REPRESENTATIVE A PPEARED ON BEHALF OF ASSESSEE AND SHRI ARINDAM BHATTACHERJEE, LD. DEPARTMENTAL RE PRESENTATIVE APPEARED ON BEHALF OF REVENUE. 2. THE GROUNDS OF APPEAL AND ADDITIONAL GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS FOLLOWS:- 1.THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS) ERRED IN LAW IN CONFIRMING THE DISALLOWANCE OF CONTRIBUTI ON TO THE GRATUITY FUND AMOUNTING TO RS.4,00,438/- WHICH WAS PENDING FOR APPROVAL, WI THOUT APPRECIATING THE FACT THAT THE FUND WAS APPROVED HOWEVER DUE TO CHANGE IN NAME OF THE FUND, THE REVISED PETITION FOR APPROVAL HAD BEEN FILED WITH THE COMMI SSION. 2. THAT ON THE FACTS AN IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(APPEALS) ERRED IN NOT APPRECIATING THE FACT THAT THE APPELLANT AD FIL ED THE PETITIONS FOR GRANTING OF APPROVAL AND CONDUCTED REGULAR FOLLOW-UPS IN CONNEC TION WITH THE APPROVAL PROCESS, IN SPITE OF WHICH NO FORMAL APPROVAL HAD BEEN GRAN TED TO THE APPELLANT AND HAS THUS PENALIZED THE APPELLANT WITHOUT ANY VIOLATIONS BEIN G COMMITTED. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD TO AND/OR AMEND, ALTER, MODIFY OR RESCIND THE GROUNDS HEREINABOVE BEFORE OR AT THE HEARING OF THE APPEAL. ADDITIONAL GROUND : THE APPELLANT COMPANY BEGS TO TAKE THE FOLLOWING AD DITIONAL GROUNDS OF APPEAL IN THE SUBJECT APPEAL, WHICH DO NOT INVOLVE ANY FRESH INVESTIGATION OF FACTS, BUT PERTAINS TO QUESTION OF LAW AND THEREFORE MAY PLEASE BE ADMI TTED AND ADJUDICATED UPON BASED ON THE DECISION OF THE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER COMMISSION. LTD. REPORTED IN 229 ITR 383. 1.(A) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE APPELLANT IS ENTITLED TO DEDUCTION OF RS.7,57,713/- ON ACCOUNT OF PROPORTIO NATE CLAIM BEING 1/5 TH OF THE RESTRUCTURING EXPENSES INCURRED IN AY 2002-03 AMOUN TING TO RRS.37,88,563/-, IN THE RELEVANT ASSESSMENT YEAR UN DER CONSIDERATION. (B) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT MAY PLEASE CONSIDER AND ALLOW THE CLAIM OF THE APPELLANT ON AC COUNT OF CLAIM OF 1/5 TH OF THE RESTRICTING EXPENDITURE INCURRED IN AY 2002-03, FOL LOWING THE PRINCIPLES LAID DOWN BY HON'BLE ITTA IN THE CASE OF VAI ENGG & AUTOMATION (P.) LD-VS-ITO[2008] 21 SOT 1 (KOL) 2. (A) THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE APPELLANT IS ENTITLED TO DEDUCTION OF RS.12,61,664/ ON ACCOUNT OF PROPOR TIONATE CLAIM BEING 1/5 TH OF THE RESTRICTING EXPENSES INCURRED IN AY 2003-04 AMOUNTI NG TO RS.63,08,319/-, IN THE RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION. (B) THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT MAY PLEASE CONSIDER AND ALLOW THE CLAIM OF THE APPELLANT ON AC COUNT OF CLAIM OF 1/5 TH OF THE RESTRICTING EXPENDITURE INCURRED IN AY 2003-04, FOL LOWING THE PRINCIPLES LAID DOWN BY HON'BLE ITAT IN THE CASE OF VAI ENGG & AUTOMATION (PP.) LTD-VS-ITO[2008] 21 SOT 1 (KOL). 3. THAT THE APPELLANT CRAVES LEAVE TO ADD TO AND TO ALTER, AMEND, RESCIND OR MODIFY THE GROUNDS RAISED HEREINABOVE BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. ITA NO.360/KOL/2013 A.Y. 2004- 05 M/S SIEMENS LTD. VS. ITO WD-2(4) KOL. PAGE 3 3. THE ASSESSEE HAS RAISED THE ADDITIONAL GROUNDS O F APPEAL BEFORE US AND WE FOR THE SAKE OF CONVENIENCE ARE TREATING THE SAME IN CO NTINUATION OF EARLIER GROUNDS WHILE CONSIDERING THE SAME ON MERITS. THE LD. DR RAISED N O OBJECTION ON THE ADMISSION OF ADDITIONAL GROUNDS OF APPEAL. THEREFORE THE ADDITIO NAL GROUNDS HAVE BEEN ADMITTED AFTER HAVING RELIANCE ON THE PRINCIPLES LAID DOWN I N THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER COMPANY REPORTED IN 229 ITR 383 (SC). 4. THE ISSUE RAISED IN ITS GROUNDS OF APPEAL IS THA T LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF ASSESSING OFFICER BY SUSTAINING DISALL OWANCE OF 4,00,438/- ON ACCOUNT OF CONTRIBUTION MADE TO THE GRATUITY FUND. 5. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS A LIMI TED COMPANY AND ENGAGED IN THE BUSINESS OF CONSULTANCY, ENGINEERS AND RELATED SERV ICES. THE OLD NAME OF ASSESSEE WAS VAI ENGINEERING & AUTOMATION (P) LTD. WHICH WAS RE- NAMED AS VAI ENGINEERING AND AUTOMATION (P) LTD. VIDE ORDER DATED 14.08.2003 BY ROC. 6. THE ASSESSEE (VAI (P) LTD) WAS MAINTAINING A GRA TUITY FUND FOR ITS EMPLOYEES WHICH WAS APPROVED BY LD. CIT VIDE ORDER DATED 27.0 1.2003 WITH EFFECT FROM 01.01.1997. THE ASSESSEE IN THE YEAR UNDER CONSIDER ATION CONTRIBUTED A SUM OF 4,00,438/- TOWARDS THE GRATUITY FUND AND CLAIMED TH E DEDUCTION IN THE PROFIT AND LOSS ACCOUNT BUT OFFERED THE SAME TO TAX IN THE COMPUTAT ION OF INCOME. 7. HOWEVER, ASSESSEE DURING THE COURSE OF ASSESSMEN T PROCEEDINGS CLAIMED THE DEDUCTION FOR THE AMOUNT CONTRIBUTED TO THE GRATUIT Y FUND BUT THE SAME WAS DISALLOWED BY THE AO WITHOUT ADDUCING ANY REASON AND ACCORDING LY, SAME WAS ADDED TO THE TOTAL INCOME OF ASSESSEE. 8. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A). THE ASSESSEE BEFORE LD. CIT(A) SUBMITTED THAT THE AMOUNT CONTRIB UTED TO GRATUITY FUND WAS OFFERED TO TAX IN THE COMPUTATION OF INCOME INADVERTENTLY. BUT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE CLAIM OF EXPENDITURE WAS MADE BEFO RE THE AO. BUT THE CLAIM OF IT ITA NO.360/KOL/2013 A.Y. 2004- 05 M/S SIEMENS LTD. VS. ITO WD-2(4) KOL. PAGE 4 WAS REJECTED BY THE AO WITHOUT ADDUCING ANY REASONS THEREON. THE EXPENDITURE WAS CLAIMED DURING THE ASSESSMENT PROCEEDINGS ON THE GR OUND THAT IT ALREADY HAD THE APPROVAL FOR ITS GRATUITY FUND FROM THE INCOME TAX AUTHORITY. INDEED, THE NAME OF THE ASSESSEE WAS CHANGED AND THIS WAS DULY INTIMATED TO THE COMMISSIONER OF INCOME TAX VIDE LETTER DATED 04.02.2005 AND 01.02.2006 RESPECT IVELY AND THE NECESSARY CHANGES WERE ALSO MADE IN THE DEED OF GRATUITY FUND ON 19.1 1.2004. 9. THE BASIC OBJECT OF THE ASSESSMENT IS TO COMPUTE THE INCOME ACCURATELY AND AS PER THE PROVISION OF LAW. THE ASSESSEE SHOULD NOT B E PENALISED FOR THE MISTAKE DONE BY IT INADVERTENTLY. HOWEVER, LD. CIT(A) DISREGARDED T HE CONTENTION OF ASSESSEE AND CONFIRMED THE ORDER OF AO BY OBSERVING AS UNDER:- 6-2 I HAVE PERUSED THE ASSESSMENT ORDER AND CONSIDE RED THE SUBMISSION OF THE APPELLANT. THE APPELLANT COMPANY CLAIMED THE CONTRI BUTION OF GRATUITY AS DEDUCTION BEFORE THE AO WHICH WAS ERRONEOUSLY OFFERED FOR TAX ATION WHILE COMPUTING THE TAXABLE INCOME. THE APPELLANT COMPANY MADE AN ADDIT IONAL CLAIM AT THE TIME OF ASSESSMENT PROCEEDINGS ON THE GROUND THAT VAI INDIA PVT. LTD. WHICH WAS SUBSEQUENTLY RENAMED AS VAI ENGINEERING & AUTOMATIO N (P) LTD I.E. HAD THE APPROVAL FROM THE INCOME TAX AUTHORITIES FOR SUCH F UND. I FIND THAT THE COMPANY M/S VAI ENGG. & AUTOMATION (P) LTD DID NOT HAVE APPROVA L FOR SUCH FUND AND THOSE FUNDS BELONGED TO THAT PERIOD PRIOR TO RENAME OF THE COMP ANY. IN VIEW OF THE FACTS THAT THE COMPANY DID NOT HAVE RECOGNITION FOR SUCH FUND FROM THE COMPETENT AUTHORITIES, THE CLAIM OF THE APPELLANT IS NOT FOUND TO BE ALLOWABLE . AGGRIEVED BY THIS, THE ASSESSEE HAS COME UP IN APPE AL BEFORE US. 10. LD. AR BEFORE US REITERATED THE SAME SUBMISSION S THAT WERE MADE BEFORE LD. CIT(A). LD. AR FURTHER SUBMITTED THAT THE SAME ISSU E AROSE IN THE ASSESSMENT YEAR 2009-10 IN THE OWN CASE OF THE ASSESSEE WHERE THE T RIBUNAL WAS PLEASED TO ALLOW THE CLAIM OF ASSESSEE IN ITA NO.1944/KOL/2013 FOR A.Y 2009-10 VIDE ORDER DATED 28.02.2017. ON THE OTHER HAND, LD DR BEFORE US SUBMITTED THAT H ON'BLE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.1944/KOL/2013 (SUPRA) WAS PLEASED TO RESTORE THE MATTER BACK TO THE FILE OF AO FOR VERIFICATION OF THE FACTS WHETHER NE CESSARY CHANGES HAS BEEN APPROVED BY THE CIT IN THE DEED OF GRATUITY FUND OF ASSESSEE . IN REJOINDER LD. AR SUBMITTED THAT MATTER CAN BE RESTORED BACK TO THE FILE OF AO WITH A DIRECTION TO ALLOW THE CLAIM OF ASSESSEE IF LD. CIT APPROVED THE CHANGE MADE IN THE DEED OF GRATUITY FUND ITA NO.360/KOL/2013 A.Y. 2004- 05 M/S SIEMENS LTD. VS. ITO WD-2(4) KOL. PAGE 5 SUBSEQUENTLY. IN THIS REGARD LD. DR DID NOT RAISE A NY OBJECTION IF THE MATTER BE RESTORED BACK TO THE FILE OF AO. 11. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE CASE BEFORE US THE DEDUCTION WAS CLAIMED BY ASSESSEE DURING THE ASSESSMENT PROCEEDINGS FOR THE AMOUNT CONTRIBUTED TOWARDS THE GRATUITY FUND BUT AUTHORITIES BELOW DENIED TO ENTER TAIN THE CLAIM OF ASSESSEE FOR THE REASON AS DISCUSSED ABOVE. HOWEVER, WE FIND THAT IN THE ASSESSEES OWN CASE IN ITA NO.1944/KOL/2013 (SUPRA) MATTER WAS RESTORED BACK TO THE FILE OF AO FOR FRES H VERIFICATION OF THE CASE. FOR THE SAKE OF CLARITY, THE RELEVANT OPERATIVE PORTION OF THIS ORDER IS REPRODUCED BELOW:- 2. WE HAVE HEARD SHRI R.S. BISWAS, ID. CLT, D.R. AN D MS. AKSHATA MEHTA, ID. COUNSEL FOR THE ASSESSEE. THE FIRST APPELLATE AUTHORITY IN HIS ORDER AT PARA 2.3 OBSERVED AS FOLLOWS:- '2.3. I HAVE CAREFULLY CONSIDERED THE ABOVE OBSERVA TION OF THE ASSESSING OFFICER AND ALSO THE SUBMISSION OF THE LD. AIR. DURING THE COURSE OF THE APPELLATE PROCEEDINGS, THE LD. AIR HAS EXPLAINED THAT THE GRA TUITY FUND OF THE APPELLANT COMPANY IS MAINTAINED WITH LIFE INSURANCE CORPORATI ON OF INDIA. DURING F. Y. 2008-09, THE APPELLANT COMPANY INCURRED RS.46,33,57 71- ON ACCOUNT OF GRATUITY FUND. THE FUND OF THE APPELLANT COMPANY IS IN THE NAME OF ' VAI INDIA PVT. LTD. ' AND NOT IN ITS PRESENT NAME I.E. ' SIEMENS VAI METALS TECHNOLOGIES PVT. LTD. ' ACCORDINGLY, THE A.O. HAS HELD THAT THE APPELLANT DID NOT HAVE ANY GRATUITY FUND OF ITS OWN AND DISALLOWE D THE CONTRIBUTION OF RS.46,33,5771-. THE LD. AIR HAS FURTHER EXPLAINED T HAT AS PER THE ORDER OF THE HON'BLE CALCUTTA HIGH COURT, THE APPELLANT COMPANY WAS MERGED WITH VAI INDIA PVT. LTD. WITH EFFECT FROM 01.01.2002 AND ITS PRESENT NAME IS M/S. ' SIEMENS VAI METALS TECHNOLOGIES PVT. 'LTD .' THE APPELLANT HAS FILED A LETTER BEFORE THE CIT ON 27.01.2012 INFORMING THE A BOVE CHANGES WITH NECESSARY DOCUMENTS. THE LD. AR HAS ALSO FURNISHED A COPY OF THE LETTER NO. CIT KOL-IIGF ISF 112- 1317390 DATED 18.02.2013 ISSU ED BY THE A.C.LT. HQRS-1, KOLKAT:A WHICH IS REPRODUCED AS UNDER:- ' SUB: APPROVAL OF DEED OF VARIATION OF SIEMENS VAI M ETALS TECHNOLOGIES PVT. LTD. EMPLOYEES SUPERANNUATION FUN D & SIEMENS VAI METALS TECHNOLOGIES PVT. LTD. EMPLOYEES GRATUIT Y FUND. REF: YOUR LETTER DATED 23.01.2013. SIR, WITH REFERENCE TO THE CAPTIONED LETTER THIS TO INFO RM YOU THAT THE MATTER IS BEING CONSIDERED AND THE APPROVAL OF DEED OF VAR IATIONS ARE UNDER PROCESS.' THE L.D. A/R HAS ALSO EXPLAINED THAT THE NECESSARY APPROVALS FOR THE SIEMENS VAI METALS TECHNOLOGIES PVT, LTD EMPLOYEES SUPERANNUATI ON FUND AND SIEMENS VAI METALS TECHNOLOGIES PVT LTD. EMPLOYEES GRATUITY FUN D WOULD BE RECEIVED SHORTLY. IN VIEW OF THE ABOVE, THE A.O IS DIRECTED TO DELETE (I ) THE ADDITION OF RS.23,42,193/- ON ACCOUNT OF CONTRIBUTION TO SUPERANNUATION FUND AND (II) THE ADDITION OF ITA NO.360/KOL/2013 A.Y. 2004- 05 M/S SIEMENS LTD. VS. ITO WD-2(4) KOL. PAGE 6 RS.46,33,577/- ALL ACCOUNT OF CONTRIBUTION TO GRATU ITY FUND SUBJECT TO THE CONDITION THAT THE DEED OF VARIATION OF AFORESAID SUPERANNUAT ION FUND AND THE GRATUITY FUND OF THE APPELLANT COMPANY ARE APPROVED BY THE COMMI SSIONER OF INCOME-TAX AT TIME OF GIVING EFFECT TO THIS ORDER, IF THE COMMISSIONER OF INCOME-TAX DOES NOT APPROVE THE DEED OF VARIATION OF AFORESAID SUPERANNUATION FUND AND THE GRATUITY FUND, THE ADDITIONS OF RS.23,42,193/- AND RS.46,33,577/- ON A CCOUNT OF CONTRIBUTIONS TO THE SUPERANNUATION FUND AND THE GRATUITY FUND RESPECTIV ELY ARE TO BE TREATED AS CONFIRMED. FOR STATISTICAL PURPOSE, THESE GROUNDS O F APPEAL ARE ALLOWED'. 3. WE DO NOT FIND ANY INFIRMITY IN THIS ORDER OF TH E FIRST APPELLATE AUTHORITY. THE ID. CIT(APPEALS) HAS DIRECTED THE ASSESSING OFFICER TO VERIFY THE FACTS AND PASS NECESSARY CONSEQUENTIAL ORDERS. THE DIRECTIONS ARE SPECIFIC. UNDER THESE CIRCUMSTANCES, WE SEE NO REASON TO INTERFERE WITH THE SAME. RESPECTFULLY FOLLOWING THE SAME, WE REMIT THE APPEA L TO THE FILE OF AO FOR FRESH VERIFICATION IN TERMS OF OUR ABOVE DIRECTION AND IN ACCORDANCE WITH THE LAW. HENCE, THIS GROUND OF ASSESSEES APPEAL IS ALLOWED FOR STA TISTICAL PURPOSE. NOW COMING TO THE ADDITIONAL GROUNDS OF APPEAL: 12. THE ISSUE RAISED IN ADDITIONAL GROUND IS THAT A SSESSEE IS ENTITLED FOR DEDUCTION OF 7,57,713/- AND 12,61,664/- BEING 1/5 TH OF THE RESTRUCTURING EXPENSES OF 37,88,563/- AND 63,08,319/- RESPECTIVELY. THE ASSESSEE IN ITS ADDIT IONAL GROUND SOUGHT THE DEDUCTION OF RESTRUCTURING EXPENSES FOR 7,57,713/- AND 12,51,664/- BEING 1/5 TH OF TOTAL RESTRICTING EXPENSE IN VIEW OF THE ORDER OF H ON'BLE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 874/KOL/2007 FOR A.Y 2002-03 DATED 28.09.2007. AT THE THRESHOLD IT IS IMPORTANT TO UNDERSTAND THE HISTORY OF THE CASE WHICH GOES AS UNDER:- THE ASSESSEE IN THE ASSESSMENT YEARS 2002-03 AND 20 03-04 CLAIMED THE RESTRUCTURING EXPENSES FOR 37,88,563/- AND 63,08,319/- RESPECTIVELY. THESE EXPENSES WERE INCURRED BY ASSESSEE IN PURSUANT TO T HE TRANSFER OF ITS REGISTERED OFFICE FROM DELHI TO KOLKATA. FOR BOTH THE YEARS, THE EXPENSES CLAIMED BY ASSESSE E WERE DISALLOWED BY AO UNDER THE PROVISION OF 37(1) OF THE ACT. BUT THE AO ALLOW ED THE DEDUCTION OF SAME U/S. 35D OF THE ACT I.E. 1/5 TH OF THE TOTAL EXPENSES CLAIMED BY ASSESSEE IN RESPE CTIVE YEARS. 13. THE ASSESSEE AGAINST THE ORDER FOR THE AY 2002- 03 PREFERRED AN APPEAL BEFORE LD. CIT(A) WHO UPHELD THE ORDER OF AO AND SUBSEQUEN TLY ORDER OF AUTHORITIES BELOW WAS AFFIRMED BY HON'BLE TRIBUNAL IN ITA NO.874/KOL/ 2007 (SUPRA) THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED BELOW:- ITA NO.360/KOL/2013 A.Y. 2004- 05 M/S SIEMENS LTD. VS. ITO WD-2(4) KOL. PAGE 7 .. IN THE LIGHT OF THESE FACTS OF THIS CASE, WE A RE OF THE CONSIDERED OPINION THAT THE EXPENDITURE OF RS.37,88,563/- WAS INCURRED FOR PURPOSES OF AMALGAMATION/MERGER OF THE TWO COMPANIES AND, THERE FORE, THE LD. CIT WAS JUSTIFIED IN HOLDING THAT THIS EXPENDITURE WAS NOT ALLOWABLE AS REVENUE EXPENDITURE US/S 37 OF THE ACT AND WAS TO BE ALLOWE D ON PROPORTIONATE BASIS AS PENALTY THE PROVISION OF SECTION 35DD. HOWEVER, ASSESSEE ALSO PREFERRED AN APPEAL FOR AY 2 003-04 BEFORE LD. CIT(A) WHICH IS STILL PENDING BEFORE HIM. HOWEVER, IN AY 2003-04 AO DISALLOWED THE CLAIM OF ASSESSEE U/S. 37(1) OF THE ACT BUT ALLOWED THE SAME UNDER THE PROVISION OF 35DD OF THE ACT. 14. AS THE MATTER WAS NOW SUB JUICE BEFORE THE TRIB UNAL, THEREFORE, THE ASSESSEE DID NOT MAKE ANY CLAIM BEING 1/5 TH OF RESTRUCTURING EXPENSES IN THE SUBSEQUENT YEAR. HOWEVER, ASSESSEE IS VERY MUCH ENTITLED FOR 1/5 TH OF THE EXPENDITURE IN THE FIVE ASSESSMENT YEARS AS HELD BY THE HON'BLE TRIBUNAL IN ITA NO.874/KOL/2007 (SUPRA). IN VIEW OF ABOVE, LD. AR BEFORE US SUBMITTED A SPECIFI C DIRECTION CAN BE ISSUED TO THE AO FOR ALLOWING THE DEDUCTION OF RESTRUCTURING EXPE NSES @ 1/5 TH PERTAINING TO THE YEAR UNDER CONSIDERATION. ON THE OTHER HAND, LD. DR RAISED NO OBJECTION IF TH E MATTER IS RESTORED BACK TO THE FILE OF AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW . 15. AFTER HEARING BOTH SIDES AND PERUSING THE MATER IAL AVAILABLE ON RECORD, WE NOTE THAT ASSESSEE IS VERY MUCH ENTITLE FOR RESTRUCTURIN G EXPENSE U/S. 35DD OF THE ACT. ACCORDINGLY, WE DIRECT THE AO TO ALLOW THE RESTRUCT URING EXPENSE CLAIM AS PER PROVISION OF LAW AND IN THE LIGHT OF ABOVE DISCUSSI ON. HENCE, THIS ADDITIONAL GROUND OF ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOS E. 16. IN THE RESULT, FOR STATISTICAL PURPOSE, THE APPEAL OF ASSESSEE IS TREATED AS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 08/11/2017 SD/- SD/- ( % ') ( ') (S.S.VISWANETHRA RAVI) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP, SR.P.S ) - 08/11/2017 / KOLKATA ITA NO.360/KOL/2013 A.Y. 2004- 05 M/S SIEMENS LTD. VS. ITO WD-2(4) KOL. PAGE 8 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-M/S SIEMENS LTD. [FORMERLY KNOWN AS VAI ENGINEERING & AUTOMATION (P) LTD] BLOCK EP, PLOT-Y5, COMMERCIAL COMPLEX SECTOR-V, S ALT LAKE CITY, KOLKATA-09 2. /RESPONDENT-ITO WARD-2(4), P-7, CHOWRINGHEE SQ, KOL KATA-69 3. , - / CONCERNED CIT 4. - - / CIT (A) 5. . %%, , , / DR, ITAT, KOLKATA 6. 2 / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY HEAD OF OFFICE/DDO ,,