ACIT CC 6(4), MUMBAI V. ARSHIYA LTD, MUMBAI

ITA 3951/MUM/2015

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2724 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2007-2008
• Appeal Filed On: 24-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKUNDRAJ CHARE
• Keywords: Unexplained investment; Capital asset; Transfer pricing; Residential status; International transaction; Rule of consistency; Earning of tax free income; Proportionate interest; Retrospective amendment; Question of law; Wholly owned subsidiary; Accommodation entries; Notional interest; Capital receipt; Rule 8D; Set aside
• Section: 69C; 143(3); 14A; 147; 68; 148

Judgement Text

1 IN THE INCOME-TAX APPELLATE TRIBUNAL K BENCH MUMB AI BEFORE SHRI G.S. PANNU, VICE- PRESIDENT AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 3951/MUM/2015 (ASSESSMENT YEAR 2007-08 ) ACIT, CC-6(4), ROOM NO. 32(1), GROUND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 VS. M/S ARSHIYA LTD. 308, LEVEL 3, CEEJAY HOUSE, F BLOCK, SHIV SAGAR ESTATE, DR. A.B. ROAD, WORLI, MUMBAI-400018. PAN: AAACI2679A APPELLANT RESPONDE NT ITA NO. 4763/MUM/2015 (ASSESSMENT YEAR 2008-09 ) DCIT CC-6(4), ROOM NO. 32(1), GROUND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 VS. M/S ARSHIYA INTERNATIONAL LTD. 7 TH FLOOR, TWIN ARCADE, C WING, MILITARY ROAD, MAROL MAROSHI, ANDHERI (E), MUMBAI-400059 . PAN: AAACI2679A APPELLANT RESPONDE NT ITA NO. 4297/MUM/2015 (ASSESSMENT YEAR 2008-09 ) M/S ARSHIYA LTD. [FORMERLY KNOWN AS ARSHIYA INTERNATIONAL LTD.] 3021, CEEJAY HOUSE, LEVEL- 3, SHIV SAGAR ESTATE, F-BLOCK, DR. A.B. ROAD, WORLI, MUMBAI-400018. PAN: AAACI2679A VS. DCIT CC-6(4), ROOM NO. 32(1), GROUND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 APPELLANT RESPONDE NT ITA NO. 4298/MUM/2015 (ASSESSMENT YEAR 2009-10 ) M/S ARSHIYA LTD. [FORMERLY KNOWN AS ARSHIYA INTERNATIONAL LTD.] 3021, CEEJAY HOUSE, LEVEL- 3, SHIV SAGAR ESTATE, F-BLOCK, DR. A.B. ROAD, WORLI, MUMBAI-400018. VS. DCIT CC-6(4), ROOM NO. 32(1), GROUND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 2 PAN: AAACI2679A APPELLANT RESPONDE NT ITA NO. 4764/MUM/2015 (ASSESSMENT YEAR 2009-10 ) DCIT CC-6(4), ROOM NO. 32(1), GROUND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 VS. M/S ARSHIYA INTERNATIONAL LTD. 7 TH FLOOR, TWIN ARCADE, C WING, MILITARY ROAD, MAROL MAROSHI, ANDHERI (E), MUMBAI-400059 . PAN: AAACI2679A APPELLANT RESPONDE NT ITA NO. 4765/MUM/2015 (ASSESSMENT YEAR 2010-11 ) DCIT CC-6(4), ROOM NO. 32(1), GROUND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 VS. M/S ARSHIYA INTERNATIONAL LTD. 7 TH FLOOR, TWIN ARCADE, C WING, MILITARY ROAD, MAROL MAROSHI, ANDHERI (E), MUMBAI-400059 . PAN: AAACI2679A APPELLANT RESPONDE NT ITA NO. 4299/MUM/2015 (ASSESSMENT YEAR 2009-10 ) DCIT CC-6(4), ROOM NO. 32(1), GROUND F LOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 VS. M/S ARSHIYA INTERNATIONAL LTD. 7 TH FLOOR, TWIN ARCADE, C WING, MILITARY ROAD, MAROL MAROSHI, ANDHERI (E), MUMBAI-400059. PAN: AAACI2679A APPELLANT RESPONDE NT APPELLANT BY : SHRI MUKUNDRAJ CHARE (DR) RESPONDENT BY : SHRI J.P. BAIRAGRA (AR) DATE OF HEARING : 18.06.2019 DATE OF PRONOUNCEMEN T : 27.08.2019 ORDER UNDER SECTION 254(1)OF INCOME TAX ACT ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 3 PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS GROUP OF SEVEN APPEALS BY REVENUE AS WELL AS A SSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-55 [THE LD. CIT(A)], MUMBAI FOR ASSESSMENT YEARS 2007- 08 TO 2010-11. OUT OF SEVEN APPEALS THERE ARE CROSS APPEALS FOR AY 2008-0 9 TO 2010-11 AND REVENUES APPEAL FOR AY 2007-08. IN ALL APPEALS THE PARTIES HAVE RAISED CERTAIN COMMON GROUNDS OF APPEAL; FACTS IN ALL THE YEARS AR E IDENTICAL, THEREFORE, WITH THE CONSENT OF PARTIES ALL APPEALS WERE CLUBBED TOG ETHER HEARD AND ARE DECIDED BY COMMON ORDER FOR THE SAKE OF CONVENIENCE AND TO AVOID THE CONFLICTING DECISIONS. 2. SINCE, ON SIMILAR SET OF FACTS THE CERTAIN COMMON G ROUNDS OF APPEAL ARE RAISED IN ALL YEARS, THEREFORE, WE HAVE CATEGORIZED THE G ROUNDS IN THE FOLLOWING MANNER; (I) ADDITIONS UNDER SECTION 68 IN RESPECT OF AMOUNT REC EIVED FROM M/S THEMIS INVESTMENT PTE LTD (TIPL) (GROUND NO.1 & ADD ITIONAL GROUND IN APPEAL FOR AY 2007-08, GROUND NO.3 IN AY 2008-09 & 2009-10.) (II) DISALLOWANCE UNDER SECTION 14A R.W.R. 8D. (GROUND N O. 1&2 IN APPEAL BY ASSESSEE AND GROUND NO. 2 BY REVENUE FOR AY 2008 -09, GROUND NO. 1&2 IN APPEAL BY ASSESSEE AND GROUND NO. 2 BY REVENUE FOR AY 2009-10 & GROUND NO. 1 & 2 IN APPEAL BY ASSESSEE A ND GROUND NO. 2 BY REVENUE FOR 2010-11), (III) ADDITIONS UNDER SECTION 69C WITH REGARD TO TRANSACT ION WITH NAND LAL NAGPAL (GROUND NO. 1 IN APPEAL BY REVENUE FOR AY 20 08-09 TO 2010- 11) ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 4 (IV) ADDITIONS ON ACCOUNT OF TRANSFER PRICING (GROUND N O. 3 TO 6 IN AY 2008-09 AND GROUND NO. 3 TO 5 IN AY 2009-10 TO 2010 -11, APPEAL IN ALL ASSESSMENT YEARS BY ASSESSEE), (V) ADDITIONS ON ACCOUNT OF INTEREST RECEIVED (EARNED) WHICH REDUCED FROM WORK IN PROGRESS (WIP), GROUND NO. 4 IN APPEAL BY R EVENUE FOR AY 2008-09. 3. NOW, WE SHALL DISCUSS THE FACTS LEADING TO VARIOUS ADDITIONS IN THE RESPECTIVE AYS AND THE RESULT BY LD. FIRST APPELLATE AUTHORIT Y. (I) ADDITIONS UNDER SECTION 68 4. THE FACTS LEADING TO THE ADDITIONS UNDER SECTION 68 OF THE CASE ARE THAT THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDE R UNDER SECTION 143(3) FOR ASSESSMENT YEAR (AY) 2008-09 NOTED THAT THE ASSESSE E HAS RECEIVED SHARE CAPITAL OF RS. 10,01,50,000/- IN AY 2008-09 AND RS. 9,98,50,000/- IN AY 2009-10, THE ASSESSEE RECEIVED THE AMOUNT AND ALLO TTED SHARES IN THE FOLLOWING MANNER; AY AMOUNT RECEIVED (RS.) NUMBER OF SHARE ALLOTTED AMOUNT UTILIZED RS. 2007-08 2,00,11,967/- NILL NILL 2008-09 9,01,35,000/- 10,01,500 10,01,50,000/- 2009-10 8,98,65,000/- 9,98,500 9,98,50,000/- 5. THE ASSESSING OFFICER WHILE PASSING ASSESSMENT ORDE R MADE ADDITIONS 68 OF RS. 10,01,50,000/- IN AY 2008-09 AND RS. 9,98,50,00 0/- IN AY 2009-10. SUBSEQUENTLY, THE ASSESSMENT FOR AY 2007-08 WAS ALS O REOPENED UNDER SECTION 147 BY ISSUING NOTICE UNDER SECTION 148 DAT ED 28.03.2013 ON THE BASIS ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 5 OF THE ALLEGATION THAT THE ASSESSEE ALSO RECEIVED R S. 2,00,00,000/- IN THIS ASSESSMENT YEAR (AY 2007-08), WHICH IS OVER AND ABO VE THE AMOUNT RECEIVED BY THE ASSESSEE IN AYS 2008-09 AND 2009-10. THE AO MADE ADDITION OF RS.2.00 CRORE IN ASSESSMENT ORDER PASSED UNDER SECT ION 143(3) RWS 147 DATED 31.01.2014. 6. ON APPEAL BEFORE LD. CIT(A) THE ADDITIONS UNDER SE CTION 68 IN AYS 2008-09 & 2009-10 WERE DELETED. THE LD CIT(A) WHILE DELET ING THE ADDITIONS IN AYS 2008-09&2009-10 HELD THAT THE AO MADE ADDITION S ON THE BASIS OF ENQUIRY REPORT OF JT. SECRETARY (FT& T). THE ASSESS EE HAS FILED DETAILED REPORT ABOUT IDENTITY, CAPACITY AND CREDITWORTHY OF TIPL. THE ASSESSEE GOT POST FACTO APPROVAL FROM FOREIGN INVESTMENT PROMOTION BO ARD (FIPB) VIDE ITS APPROVAL DATED 22.01.2013. THEREFORE, THE AO WAS NO T JUSTIFIED IN MAKING ADDITIONS UNDER SECTION 68. THE LD CIT(A) ALSO Q UASHED THE RE-ASSESSMENT DATED 31.01.2014 FOR AY 2007-08. WHILE QUASHING TH E REASSESSMENT ORDER THE LD CIT(A) CONCLUDED THAT INITIAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(3), CASE CANNOT BE REOPENED WITHOUT OBTAINING T HE PRIOR APPROVAL OF PCIT/ CIT, NO SUCH APPROVAL WAS OBTAINED BY THE AO. THE LD. CIT(A) RELIED ON THE DECISION OF BOMBAY HIGH COURT IN GHANSHYAM K . KHABRANI VS ACIT (346 ITR 443) EVEN ON MERITS ADDITIONS OF SECTION 68 OF RS. 2.0 CRORE WAS DELETED HOLDING THAT INVESTMENT MADE BY TIPL WAS EX AMINED BY FTTR & FIPB. THUS, AGGRIEVED BY THE ORDER OF THE LD CIT(A) THE REVENUE HAS CHALLENGED THE CORRECTNESS OF HIS ORDER IN DELETIN G THE ADDITIONS. ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 6 7. WE HAVE HEARD THE SUBMISSION OF LD. AUTHORIZED REPR ESENTATIVE (AR) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) F OR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. D R FOR THE REVENUE SUPPORTED THE ORDER OF THE AO. THE LD. DR FURTHER S UBMITS THAT THE ASSESSEE FAILED TO PROVE THE IDENTITY AND CREDITWORTHY OF TH E CREDITOR AND THE GENUINENESS OF THE TRANSACTION. THE INQUIRY CONDUCT ED BY THE JT. SECRETARY (FT& T), OF INDIAN HIGH COMMISSION, SINGAPORE REVEA LS THAT THE TIPL IS A PAPER COMPANY. THE SAID TIPL WAS NOT FUNCTIONING OF THE ADDRESS PROVIDED BY THE ASSESSEE. 8. ON THE CONTRARY THE LD AR FOR THE ASSESSEE SUPPORTE D THE ORDER OF THE LD CIT(A). TO SUPPORT THE ORDER OF LD CIT(A) IN AY 2 007-08 THE LD AR FOR THE ASSESSEE SUBMITS THAT ASSESSMENT UNDER SECTION 143( 3) RWS 144C(13) WAS PASSED 19.01.2011. THE ASSESSMENT WAS REOPENED UNDE R SECTION 147. THE ASSESSEE WAS SERVED WITH THE NOTICE UNDER SECTION 1 48 DATED 28.03.2013, I.E. AFTER FOUR YEAR FROM THE END OF RELEVANT ASSESSMENT YEAR. NO APPROVAL OF CIT/ PCIT WAS OBTAINED BY THE ASSESSING OFFICER AS REQUIRED UNDER SECTION 151 OF THE ACT. THE AO FAILED TO SPECIFY THAT THE INCOME OF THE ASSESSEE ESCAPED ASSESSMENT DUE TO THE FAILURE ON THE PART O F ASSESSEE IN DISCLOSING FULLY AND TRULY ALL THE PARTICULARS OF INCOME. THE ASSESSEE DISCLOSED ALL THE PARTICULARS OF THE INCOME WHILE FILING THE RETURN O F INCOME OF AY 2007-08 AND OR THERE WAS NO FAILURE ON THE PART OF ASSESSEE IN DISCLOSING ALL THE FACTS FULLY AND TRULY. IT WAS FURTHER ARGUED BY THE LD. AR FOR THE ASSESSEE THAT EVEN ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 7 ON MERIT, NO ADDITION WAS ATTRACTED, AS THE AO HAS ALREADY MADE ADDITION OF THE ENTIRE SHARE APPLICATION MONEY OF RS. 20 CRORE IN AY 2008-09 & 2009-10 AND FURTHER ADDITION OF RS. 2.0 CRORE WAS A DOUBLE ADDITION. THE LD. CIT(A) AFTER APPRECIATIONS OF THE FACTS RIGHTLY DELETED TH E ADDITIONS ON MERIT AS WELL. 9. AGAINST THE ADDITIONS UNDER SECTION 68 IN AY 2008-0 9 & 2009-10, THE LD. AR FOR THE ASSESSEE SUBMITS THAT THE ASSESSEE RECEIVED CAPITAL MONEY OF R. 20 CRORE FROM TIPL. THE ASSESSEE COMPANY IN ITS BOARD MEETING DATED 12 TH FEBRUARY 2007 APPROVED THE ISSUE OF EQUITY SHARE AN D WARRANT ON A PREFERENTIAL BASIS. TIPL WAS ISSUED 4 LAKHS WARRANT S CONVERTIBLE IN TO EQUITY SHARES OF FACE VALUE OF RS.10/- AT THE PREMIUM OF R S.490/- . THE VALUATION OF SHARE WAS MADE BY M/S RSM & CO. IN ACCORDANCE WITH SEBI (DISCLOSER & INVESTOR PROTECTION) GUIDELINES 2000. ALL THE PAYME NTS WERE RECEIVED THROUGH BANKING CHANNELS. THE AMOUNT WAS RECEIVED W ITH THE APPROVAL OF RESERVE BANK OF INDIA (RBI). RBI DIRECTED THE ASSES SEE TO GET THE POST FACT APPROVAL OF FIPB FOR ISSUANCE OF WARRANT TO TIPL. T HE ASSESSEE FILED PROPER APPLICATION BEFORE FIPB ON 03.02.2010. THE ASSESSEE WAS GRANTED APPROVAL BY FIPB VIDE THEIR ORDER DATED 22.01.2013. ALL THE DOCUMENTARY EVIDENCES ABOUT THE PERMISSIONS OF RBI AND APPROVAL OF FIPB W ERE FURNISHED TO THE LD CIT(A). THE ASSESSEE HAS RECEIVED THE AMOUNT THROUG H BANKING CHANNEL FROM THE AUTHORIZED DEALERS BANK I.E HDFC BANK LIMITED, WHO HAS ISSUED KYC DOCUMENTS SHOWING THE ADDRESS OF THE CREDITORS AT 101 CECIL STREET # 23-12 TONG ENG BUILDING, SINGAPORE 069533. THE COPIES OF THE INCOME TAX ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 8 RETURNS FILED BY THE TIPL WERE ALSO FURNISHED FROM FY 2006-07 TO FY 2009- 10. THEREFORE, THE ASSESSEE PROVED THE IDENTITY OF THE CREDITOR, CREDITWORTHY AND GENUINENESS OF THE TRANSACTION. REGARDING THE E NQUIRY CONDUCTED BY THE FIRST SECRETARY (ECONOMICS) HIGH COMMISSION OF INDI A, ABOUT THE TIPL THE LD AR FOR THE ASSESSEE SUBMITS THAT THE NO NOTICE O R SUMMON OR SHOW CAUSE NOTICE OR LETTER WAS ISSUED FROM THE OFFICER/ FIRS T SECRETARY. THE PROPER INQUIRY WAS CONDUCTED BY THE SINGAPORE INCOME TAX A UTHORITY, AND THEY WERE FULLY SATISFIED WITH THE CREDENTIAL OF TIPL. THE LD AR FOR THE ASSESSEE SUBMITS THAT THE LD. CIT(A) AFTER CONSIDERING THE D ETAILS REGARDING THE IDENTITY, CREDITWORTHY AND GENUINITY OF THE TRANSAC TION, WHICH WAS DULY CORROBORATED WITH THE PERMISSIONS OF RBI AND APPROV AL OF FIPB, DELETED THE ADDITION. THE LD. AR FOR THE ASSESSEE PRAYED FOR DI SMISSAL OF THE APPEAL OF THE REVENUE FOR ALL THREE AYS. IN SUPPORT OF HIS SUBM ISSIONS THE LD AR FOR THE ASSESSEE RELIED ON THE DECISIONS OF DELHI HIGH COUR T IN CIT VS DWARKADHISH INVESTMENT P LTD (330 ITR 298 DELHI), RAJASTHAN HIG H COURT IN LABH CHAND BHORA VS ITO (219 CTR 571), BOMBAY HIGH COURT IN VE EDDHATA TOWER PVT LTD (403 ITR 415 BOM), GUJARAT HIGH COURT IN MURLID HAR LAHORIMAL VS CIT (280 ITR 512) DEVINE, BOMBAY HIGH COURT IN NUPOWER RENEWABLES (P) LTD VS ACIT (104 TAXMANN.COM 307), PCIT VS ADITYA BIRLA TELECOM LTD (105 TAXMANN.COM 206), MUMBAI TRIBUNAL IN ACIT VS VERTA S (INDIA) LTD (ITA NO. 3276/MUM/2016) ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 9 10. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE HAVE AL SO DELIBERATED ON THE VARIOUS CASE LAWS RELIED BY LD. REPRESENTATIVES OF THE PARTIES AS WELL AS BY THE LOWER AUTHORITIES. THE ASSESSMENT FOR AY 2007-08 WA S INITIALLY COMPLETED ON 19.01.2011 UNDER SECTION 143(3) R.W.S. 144C(13). TH E ASSESSMENT WAS REOPENED BY ASSESSING OFFICER UNDER SECTION 147. NO TICE UNDER SECTION 148 DATED 28.03.2014 WAS SERVED ON THE ASSESSEE. ADMITT EDLY, THE ASSESSMENT WAS REOPENED AFTER FOUR YEAR FROM THE END OF RELEVANT A SSESSMENT YEAR. WE HAVE PERUSED THE REASONS RECORDED BY THE ASSESSING OFFIC ER, WHICH ARE DULY EXTRACTED BY THE AO IN PARA 2 OF THE ASSESSMENT ORD ER PASSED UNDER SECTION 147/143(3) DATED 31.012014. THE AO NOWHERE HAS RECO RDED THAT THAT THE INCOME ESCAPED ASSESSMENT ON FAILURE ON THE PART OF ASSESSEE IN DISCLOSING FULLY AND TRULY THE MATERIAL FACTS BY THE ASSESSEE. THEREFORE, IN OUR VIEW THE REASONS OF REOPENING WERE NOT VALID. MOREOVER, NO S ANCTION OF COMMISSIONER OF INCOME-TAX WAS OBTAINED BY THE AO BEFORE ISSUANC E OF THE NOTICE UNDER SECTION 148. 11. THE HONBLE BOMBAY HIGH COURT IN HINDUSTAN LIVER LT D. VS R.B. VADEKAR (268 ITR 322 BOM) HELD THAT WHEN IN THE REASONS REC ORDED THE AO NOWHERE STATED THAT THERE WAS FAILURE ON THE PART OF THE AS SESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT O F THAT ASSESSMENT YEAR AND NOTICE WAS CLEARLY BEYOND THE PERIOD OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR. IN SUCH CASE, THE JURISDICTIONAL C ONDITION PRECEDENT ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 10 STIPULATED BY THE PROVISO TO SECTION 147 IS A FAILU RE ON THE PART OF ASSESSEE TO FULLY AND TRULY DISCLOSE ALL MATERIAL FACTS NECESSA RY FOR ASSESSMENT FOR THAT ASSESSMENT YEAR CONSEQUENT UPON WHICH INCOME CHARGE ABLE TO TAX HAD ESCAPED ASSESSMENT. IN ABSENCE OF EXISTENCE OF JURI SDICTIONAL CONDITION PRECEDENT, THE ASSESSMENT COULD NOT BE RE-OPENED BE YOND THE FOUR YEARS AFTER THE EXPIRY OF RELEVANT ASSESSMENT YEAR. FURTHER, TH E JURISDICTIONAL HIGH COURT IN GHANSHAYAM K KHABRANI VS. ACIT (346 ITR 44 3 BOM) THE HONBLE COURT HELD THAT WHEN STATUTE MANDATE SATISFACTION O F A PARTICULAR FUNCTION FOR EXERCISE OF POWER, SATISFACTION OF THAT AUTHORITY I S MUST. IN THE PRESENT CASE, THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) A ND IT WAS RE-OPENED AFTER EXPIRY OF FOUR YEAR FROM THE RELEVANT ASSESSM ENT YEAR FROM THE END OF RELEVANT ASSESSMENT YEAR WITHOUT OBTAINING APPROVAL OF COMPETENT PERSON. THE LD. CIT(A) CANCEL THE RE-OPENING AFTER EXAMININ G THE ISSUE THAT NO APPROVAL WAS OBTAINED BY ASSESSING OFFICER. CONSIDE RING THE ABOVE LEGAL POSITION, WE AFFIRM THE ACTION OF THE LD CIT(A). NO CONTRARY FACTS OR LAW IS BROUGHT TO OUR NOTICE TO TAKE OTHER VIEW. 12. SO FAR AS DELETION OF ADDITIONS ON MERIT IS CONCERN ED, WE HAVE NOTED THAT THE ASSESSEE HAS RECEIVED ONLY RS. 20.00 CRORE ON ACCOU NT OF THE SHARE APPLICATION, WHICH IS THE SUBJECT MATTER OF APPEAL FOR SUBSEQUENT YEARS I.E. IN AY 2008-09 &2009-10. THEREFORE, THE SAME AMOUNT CAN NOT BE ADDED TWICE, SIMILAR VIEW WAS TAKEN BY LD CIT(A), HENCE, WE DO N OT FIND ANY MERIT IN THE ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 11 GROUND OF APPEAL BY REVENUE IN DELETING THE ADDITIO NS OF RS. 2.00 CRORE ON MERIT AS WELL. 13. NOW, COMING TO THE ADDITIONS UNDER SECTION 68 FOR AY 2008-09 & 2009-10. THE AO DURING THE ASSESSMENT OF AY 2008-09 NOTED T HAT GENERAL RESERVE OF THE ASSESSEE HAS INCREASED FROM RS.91,52,62,909/- T O RS.488,80,09,805/- THUS INCREASED BY RS. 397,27,46,986/-. ON PERUSAL OF PRO FIT AND LOSS ACCOUNT THE AO FOUND THAT THE ASSESSEE HAS RECEIVED SHARE APPLI CATION MONEY FROM TIPL, A SINGAPORE BASED ENTITY. THE AO MADE ENQUIRY REGAR DING TIPL THROUGH JT. SECRETARY (FT &TR) INDIAN HIGH COMMISSION SINGAPORE . IN THE INQUIRY IT WAS REVEALED THAT THE SAID TIPL IS A BRIEF CASE E NTITY, THE GIVEN PHONE NUMBER GOES TO OTHER ENTITY NAMELY AURION PRO SOLU TION PTE LTD. AURION PRO SOLUTION PTE LTD IS LOCATED AT OTHER ADDRESS. DURIN G THE INQUIRY IT WAS FURTHER FOUND THAT ANOTHER ENTITY ARSHIYA INTERNATIONAL SIN GAPORE PTE LTD LOCATED AT 39 ROBINSON ROAD # 09-01, ROBINSON POINT SINGAPORE. THE BUSINESS PROFILE OF ARSHIYA INTERNATIONAL SINGAPORE PTE. LTD SHOWS M R. PARESH CHANDULAL ZAVERI IS DIRECTOR. FURTHER VERIFICATION SHOWS THAT ARSHIYA INTERNATIONAL SINGAPORE PTE LTD IS WHOLLY OWNED SUBSIDIARY OF IND IAN COMPANY ARSHIYA INTERNATIONAL LIMITED LOCATED AT THE SAME ADDRESS. THE AO HAS EXTRACTED THE ENTIRE REPORT IN PARA7.3 OF HIS ORDER. ON THE BASIS OF THE REPORT OF FIRST SECRETARY (ECONOMIC HIGH COMMISSIONS) SINGAPORE, TH E AO ISSUED SHOW CAUSE NOTICE DATED 16.07.2012 AND AGAIN ON 10.08.20 12 TO THE ASSESSEE AS TO WHY THE ENTIRE AMOUNT SHOULD NOT BE ADDED AS INCOM E OF ASSESSEE UNDER ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 12 SECTION 68 OF THE ACT. THE ASSESSEE FILED ITS DETAI LED REPLY, VIDE REPLY DATED 17.08.2012. THE REPLY THE ASSESSEE AS RECORDED BY THE AO IN PARA 7.5 OF HIS ORDER IS EXTRACTED BELOW: WITH REFERENCE TO CAPTIONED LETTER AND IN CONTINUA TION TO OUR EARLIER SUBMISSIONS, WE WOULD LIKE TO STATE AND SUBMIT AS U NDER: 1. INVESTMENTS MADE BY THEMIS INVESTMENT PTE LIMITED ( THEMIS) IN ASSESSEE COMPANY WITH REGARD TO THE INFERENCES DRAWN BY YOUR GOODSEL F ON THE AFORESAID INVESTMENTS, WE WOULD LIKE TO STATE AND SUBMIT AS U NDER; (A) IDENTITY OF THE INVESTOR OF THEMIS (I) THE COMPANY HAS RECEIVED ALE FUNDS FROM THEMIS THROUGH NORMAL BANKING CHANNELS FROM THE AUTHORISED DEALER BANK. F URTHER, IT MAY BE PERTINENT TO NOTE THAT THE AUTHORISED DEALER BANK I .E. M/S HDFC BANK LIMITED HAS ISSUED TILE KYC DOCUMENTS WHEREIN THE R EGISTERED ADDRESS OF '101 CECIL STREET, # 23-12 TONG ENG BUILDING, SINGA PORE 069533' (WHICH IS DISPUTED BY YOUR GOODSELF) HAS BEEN CONFIRMED BY THEM. THE COPY OF KYC IS ENCLOSED HEREWITH VIDE AUNEXURE B FOR YOUR R EADY REFERENCE. (II) WE WISH TO DRAW YOUR KIND ATTENTION TOWARDS YO UR NOTICE DATED 23 RD DECEMBER, 2011 ATTACHED AS ANNEXURE C AND OUR LETTE R DATED 28 TH DECEMBER, 2011 WRITTEN TO FT&TR WITH A COPY TO YOUR GOOD OFFICE ATTACHED AS ANNEXURE D. WE REFER TO 4'1 PARAGRAPH O F THE SAID LETTER AND HOPE YOU WOULD APPRECIATE THAT THE ENQUIRY BY THE F IRST SECRETARY, SINGAPORE (ECONOMICS), HIGH COMMISSION OF INDIA WAS DONE AT WRONG ADDRESS AND ACCORDINGLY A WRONG INFERENCE WAS DRAWN . INCIDENTALLY THIS VERY IMPORTANT FACT FINDS NO PLAC E IN YOUR CURRENT SHOW CAUSE NOTICE DATED 10TH AUGUST, 2012. (III) THE BENEFICIAL OWNER OF THEMIS IS MR. PARESH CHANDULAL ZHAVERI AND MS. V VASANTHI IS HOLDING THE SHARES IN TRUST FOR M R. PARESH CHANDULAL ZAVERI. THE COPY OF TRUST DEED IS ENCLOSED HEREWITH VIDE ANNEXURE E FOR YOUR READY REFERENCE. (IV) THEMIS IS A PASSIVE INVESTMENT HOLDING COMPANY . ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 13 (V) FURTHER, WE WISH TO ALSO PLACE ON RECORD THAT A RSHIYA INTERNATIONAL SINGAPORE PTE LIMITED A WHOLLY OWNED SUBSIDIARY OF THE ASSESSEE, IS SITUATED IN SINGAPORE. THE FINANCIALS OF THE SAID C OMPANY ARE REFLECTED IN CONSOLIDATED ACCOUNTS OF ASSESSEE. THE PRINTED ACCO UNTS OF ASSESSEE WHICH IS IN PUBLIC DOMAIN HAS BEEN SUBMITTED WITH Y OUR GOOD OFFICE. (VI) THEMIS IS ALSO HOLDING INDIAN PERMANENT ACCOUN T NUMBER. A COPY OF ITS PAN CARD IS ATTACHED AS ANNEXURE F. (VII) THE DIRECTORS OF ARSHIYA INTERNATIONAL SINGAP ORE PIE LIMITED ARE AS UNDER: AS ON NAME OF DIRECTORS MARCH, 2009 MR. PARESH CHANDULAL ZAVERI MR. JASHAY MEHTA MARCH, 2010 MR. PARESH CHANDULAL ZAVERI MR. SHIVKUMAR VENKATESHWARAM MARCH, 2011 MR. PARESH CHANDULAL ZAVERI MR. SHIVKUMAR VENKATESHWARAM (B) GENUINENESS OF TILE TRANSACTIONS (I) AS MENTIONED HEREINABOVE, MS. V. VASANTHI IS HO LDING THE SHARES OF THEMIS IN THE TRUST OF MR. PARESLI CHANDULAL ZAVERI AND HENCE SHE WOULD NOT BE THE CORRECT PERSON TO ASK FOR TILE BUSINESS AFFAIRS AND SOURCES OF THE INVESTMENT MADE IN ASSESSEE COMPANY. (II) THE BASIC ENQUIRY WAS SUPPOSE TO BE DONE WITH MR. PARESH CHANDULAL ZAVERI WHICH HAS RIOT BEEN GROSSLY IGNORED. (III) THE AFORESAID ENQUIRY SOURCES OF INVESTMENT M ADE IN ASSESSEE COMPANY WAS MADE BY THE SINGAPORE COMPTROLLER OF IN COME TAX. IN THIS REGARD, THEMIS HAS SUBMITTED DETAILS AND DOCUMENTS VIDE THEIR LETTER DATED 19 TH MARCH, 2012 (THROUGH THEIR CPA M/S. SHANKER IYER & CO., SINGAPORE), A COPY OF THE SAID LETTER ALONG WITH EN CLOSURES IS ENCLOSED VIDE ANNEXURE C. (IV) ON PERUSAL OF LETTER DATED 19TH, MARCH, 2012 F ILED BY THEMIS THROUGH THEIR CPA M/S. SHANKER IYER & CO., SINGAPORE WITH SINGAPORE COMPTROLLER OF INCOME TAX, YOU WOULD APPRECIATE THA T: A. INVESTMENT BY THEMIS IN ASSESSEE COMPANY IS DONE THROUGH ACCUMULATED SHAREHOLDERS ADVANCES. ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 14 B. INVESTMENT BY THEMIS IN ASSESSEE COMPANY IS DONE THROUGH UNITED OVERSEAS BANK, SHENTON WAY BRANCH, SINGAPORE. C. THE BENEFICIAL OWNER OF THEMIS IS MR. PARESH CHA NDULAL ZAVERI AND THEMIS IS A PASSIVE INVESTMENT HOLDING COMPANY. D. MS. V VASANTHI IS HOLDING THE SHARES IN TRUST FO R MR. PARESH CHANDULAL ZAVERI. (V) DURING THE YEAR UNDER CONSIDERATION, ASSESSEE C OMPANY HAS PAID THE DIVIDEND AMOUNTING TO RS. 9,68,000/- TO THEMIS. (VI) THE AFORESAID DIVIDEND HAS BEEN REMITTED THROU GH NORMAL BANKING CHANNELS. THE COPIES OF RETURNS FILED WITH RESERVE BANK OF IN DIA UNDER FORM RCD1 AND RCD2 ARE ENCLOSED HEREWITH MARKED AS ANNEXURE H . (VII) KINDLY FIND ATTACHED HEREWITH A COPY OF LETTE R DATED 31TH JULY, 2012 RECEIVED FROM MR. PARESH ZAVERI ALONG WITH ENCLOSUR ES THEREOF MARKED AS ANNEXURE I. (VIII) ON PERUSAL OF THE ABOVE SAID LETTER, THE REL EVANT EXTRACT OF BANK STATEMENT OF THEMIS INVESTMENT PIE. LIMITED EVIDENC ING THE CREDIT OF AFORESAID DIVIDEND IS ENCLOSED HEREWITH MARKED AS A NNEXURE J. (C) CAPACITY OF THE THEMIS, TO INVEST THE AMOUNT (I) AS MENTIONED HEREINABOVE, INVESTMENT BY THEMIS IN ASSESSEE COMPANY IS DONE THROUGH ACCUMULATED SHAREHOLDERS AD VANCES. (II) YOUR GOOD SELF WOULD APPRECIATE THAT THE BOOKS OF ACCOUNTS OF THEMIS ARE MAINTAINED ON A REGULAR BASIS. THE COPIES OF FI NANCIAL STATEMENTS FROM F. Y. 2006-07 TO F. Y. 2009-10 ARE ENCLOSED HEREWIT H MARKED AS ANNEXURE K. (III) FURTHER, THE DIRECTORS IN THEMIS FROM F. Y. 2 006-07 TO F. Y. 2009-10 ARE AS UNDER. PERIOD NAME OF DIRECTORS FROM 2007 TO OCTOBER, 2008 MR. JASHAY MEHTA MS. V. VASANTHI FROM OCTOBER, 2008 TO MARCH 2009 MR. PARESH CHANDULAL ZAVERI MS. V. VASANTHI FROM MARCH 2009 TILL DATE MS. V. VASANTHI ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 15 (IV) THE COPIES OF INCOME TAX RETURNS FILED BY THEM IS WITH STATUTORY AUTHORITIES OF SINGAPORE FROM F. Y. 2006-2007 TO F. Y. 2009-2010 ARE ENCLOSED HEREWITH MARKED AS ANNEXURE L. (V) ARSHIYA INTERNATIONAL LIMITED BEING A LISTED CO MPANY - ALL COMPLIANCES IN TERMS OF SEBI, STOCK EXCHANGES, COMPANIES ACT, E TC. HAS BEEN DONE WITH RESPECT TO ALL ITS SHAREHOLDERS INCLUDING THEM IS. (VI) WE REFER TO 2 ND PARAGRAPH OF POINT C OF PAGE 3 OF THE CURRENT NOTI CE DATED 10 TH JULY, 2012, WHICH IS REPRODUCED AS UNDER: 'THEREFORE IN ORDER TO ESTABLISH TILE IDENTITY, GEN UINENESS OF TRANSACTION AND THE CREDIT WORTHINESS OF TIPL, CERTAIN DETAILS WERE CALLED VIDE LETTER DATED 16.07.2012. HOWEVER TILL DATE, A FULL AND FIN AL COMPLIANCE HAS RIOT BEEN MADE.' WE DISAGREE TO ABOVE AS ALL DETAILS AND DOCUMENTS H AVE BEEN SUBMITTED VIDE OUR LETTER DATED 03.08.2012, A COPY OF WHICH I S HEREBY ATTACHED AS ANNEXURE M. BASED ON THE ABOVE SUBMISSIONS, YOUR GOOD SELF WOUL D APPRECIATE THAT THEMIS HAS INVESTED THE AMOUNT ILL THE ASSESSEE COM PANY THROUGH ITS OWN FUND WHICH IS GENUINE. THE QUESTION OF THEMIS NOT H AVING NOMINAL INCOME AND FURTHER HAVING A TWO DOLLAR CAPITAL ONLY IS NOW ADDRESSED, AS THE INVESTMENTS ARE DONE FROM ACCUMULATED SHAREHOLD ERS ADVANCES. WE TRUST YOUR GOODSELF WILL FIND THE ABOVE IN ORDER AND HOPE ALL DETAILS, DOCUMENTS, CLARIFICATIONS, CONFIRMATION RELATED TO THEMIS ARE IN PLACE. FURTHER, THE ASSESSEE MAY BE ADVISED IMMEDIATELY FO R ANY FURTHER DETAIL, DOCUMENT, CLARIFICATION OR CONFIRMATION. WITH RESPECT TO TILE ENQUIRIES DONE BY THE FIRST SE CRETARY (ECONOMICS), HIGH COMMISSION OF INDIA, SINGAPORE, KINDLY NOTE TH AT: A. WE HAVE BEEN GIVEN TO UNDERSTAND FROM OUR ASSOCI ATES IN SINGAPORE TOWARDS ABOVE SAID DETAILS AND / OR DOCUMENTS. B. ACCORDING TO THEMIS, MR. PARESH CNANDUIAL ZAVERI AND MS. V. VASANTHI: I. NEITHER THEMIS NOR MS. V. VASANTHI OR MR. PARESH CHANDUIAL ZAVERI HAS RECEIVED ANY NOTICE / SUMMONS / SHOW CAUSE NOTICE / LETTER FROM FIRST SECRETARY (ECONOMICS), HIGH COMMISSION OF INDIA, SI NGAPORE. ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 16 II. HOW CAN AN ENQUIRY BE DONE WITHOUT (A) ABOVE? III. THE ENQUIRY DONE BY SINGAPORE INCOME TAX AUTHO RITIES HAS BEEN PROMPTLY RESPONDED BY THEMIS. A COPY OF THE SAID RE PLY DONE BY THEMIS HAS BEEN SUBMITTED WITH YOUR GOOD OFFICE. AF TER THIS REPLY, THERE IS NO COMMUNICATION BY SINGAPORE TAX AUTHORIT IES TO THEMIS. WE BELIEVE THEY ARE SATISFIED WITH THE REPLY. IV. THE VISIT OF MS. V VASANTHI TO FIRST SECRETARY (ECONOMICS), HIGH COMMISSION OF INDIA, SINGAPORE WAS DONE BY HER SUO- MOTO TO CLARIFY THEM ABOUT THE CORRECT ADDRESS OF THEMIS, AS ENQUIR Y WAS DONE AT A WRONG ADDRESS. NO STATEMENT WAS TAKEN FROM MS. V. V ASANTHI. C. THE COPY OF TILL' ENQUIRY REPORT AND THE MATERIA L COLLECTED AT SINGAPORE MAY KINDLY BE PROVIDED WE HAVE SUBMITTED EACH AND EVERY DETAIL / DOCUMENT RELATED TO THEMIS. WE ONCE AGAIN REITERATE AS TO WHAT MORE DETAIL OR D OCUMENT IS REQUIRED BY YOUR GOOD SELF TO JUSTIFY IDENTITY OF THEMIS, GENUI NENESS OF TRANSACTION AND CAPACITY OF THEMIS TO INVEST? 14. THE REPLY OF THE ASSESSEE WAS NOT ACCEPTED BY THE A O. THE AO CONCLUDED THAT THE ASSESSEE FAILED TO PROVE THE IDENTITY, CRE DITWORTHY AND GENUINENESS OF THE TRANSACTION WITHIN THE MEANING OF SECTION 68 AND THE AMOUNT OF RS. 10,01,50,000/- FOR AY 2008-09 AND RS. 9,98,50,000/- FOR AY 2019-10 WAS TREATED AS UNEXPLAINED INVESTMENT. ON APPEAL BEFOR E LD CIT(A) THE ASSESSEE FILED DETAILED WRITTEN SUBMISSIONS EXPLAINING THE F ACTS THAT TIPL WAS ISSUED 4,00,000 WARRANTS CONVERTIBLE IN TO EQUITY SHARES, THE COPY OF NOTICE AND THE RESOLUTION PASSED BY THE GENERAL BODY MEETING HELD ON 12 TH FEBRUARY 2007 WAS FILED. IT WAS SUBMITTED THAT BESIDES TIPL, THE ASSESSEE ALSO ISSUED SHARES TO THE OTHER PARTIES, WHOSE DETAILS WERE PROVIDED. AS TIPL WAS NON RESIDENT APPLICANT IN THE ISSUES OF WARRANT THE SAID ISSUES WERE GOVERNED BY RBI ROUTE. THE ASSESSEE IN COMPLIANCE OF FEMA GUIDELINES REPOR TED THE ISSUE TO RBI. ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 17 DURING THE ASSESSMENT THE AO CONDUCTED ENQUIRY THRO UGH FIRST SECRETARY, SINGAPORE AT WRONG ADDRESS AND ACCORDINGLY A WRONG INFERENCE WAS DRAWN. THE ASSESSEE VIDE ITS LETTER DATED 12.01.2012, REQU ESTED TO FIRST SECRETARY (ECONOMIC) AND JT. SECRETARY FT & TR AT SINGAPORE T O RE-ENQUIRE AT REGISTERED OFFICE ADDRESS OF TIPL. THE ASSESSEE EXP LAINED THE IDENTITY, CREDITWORTHY AND GENUINENESS OF THE TRANSACTION. IT WAS EXPLAINED THAT THE TIPL MADE THE INVESTMENT IN ASSESSEE COMPANY THROUG H ACCUMULATED SHAREHOLDER ADVANCES; INVESTMENT WAS DONE THROUGH U NITED OVERSEAS BANK, SHENTON, WAY BRANCH, SINGAPORE. THE BENEFICIAL OWNE R IS MR. PARESH CHANDULAL ZAVERI. MS VASANTHI IS HOLDING SHARE IN T RUST FOR MR. PARESH CHANDULAL ZAVERI. THE ASSESSEE HAS PAID DIVIDEND TO TIPL OF RS. 8,01,200/- IN AY 2008-09 AND RS. 9,68,000/- IN AY 2009-10. THE ASSESSEE HAS FURTHER EXPLAINED THE FACTS AS LD. AR FOR THE ASSESSEE MADE SUBMISSIONS BEFORE US. 15. THE LD. CIT (A) AFTER CONSIDERING THE SUBMISSIONS A ND THE DOCUMENTARY EVIDENCES CONCLUDED THAT THE AO MADE ADDITIONS ON T HE BASIS OF THE REPORT OF JT. SECRETARY (FT &TR), HOWEVER, THE ASSESSEE HAS F ILED DETAIL REPORT AND EVIDENCE ABOUT THE IDENTITY, CREDITWORTHY OF TIPL A ND GENUINENESS OF THE TRANSACTION. IT WAS ALSO CONCLUDED THAT THE ASSESSE E GOT EX-POST FACTO APPROVAL FROM FIPB VIDE APPROVAL DATED 22.01.2013; THEREFORE , THE AO WAS NOT JUSTIFIED TO MAKE THE ADDITIONS UNDER SECTION 68. 16. THE LD. CIT(A) WHILE DELETING THE ADDITION PASSED T HE FOLLOWING ORDER: ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 18 3.3 I HAVE CONSIDERED THE AO'S ORDER AS WELL AS THE APPELLANT AR'S SUBMISSIONS. HAVING TAKEN NOTE TO THE SAME, I FIND THAT THE AO H AS MADE THE AFORESAID ADDITION U/ S.68 OF THE I.T. ACT BASED ON THE ENQUIRY REPORT OF JT. SECRETARY (FT & TR) BUT THE FACT REMAINED THAT THE APPELLANT'S AR HAS FILED DETAILED REPORT I1N RESPECT OF IDENTITY, CAPACITY AND CREDIT WORTHINESS OF THE THE MIS INVESTMENT PTE. LTD., SINGAPORE AS DETAILED IN APPELLANT'S SUBMISSION IN PARA 3.8.12 WHICH HAS BEEN ENUMERATED BY THE APPELLANT IN HIS SUBMISSION. BESI DES THIS, I ALSO FIND THAT SUBSEQUENTLY, THE INVESTMENT SO MADE IN THE APPELLA NTS COMPANY HAS GOT POST FACTO APPROVAL FROM VARIOUS FOREIGN INVESTMENT PROM OTION BOARD (FIPB) VIDE ITS APPROVAL LETTER NO. 127(2012)/245(2010) DATED 22.01 .2013. 3.4 IN THESE GIVEN FACTS OF THE APPELLANT'S CASE AN D ALSO AFTER TAKING NOTE OF DECISION OF SUPREME COURT IN THE CASE OF CIT VS. LO VELY EXPORTS P. LTD. AND HON'BLE DELHI HC IN THE CASE OF CIT VS. DIVINE LEAS ING & FINANCE LTD. 299 ITR 268 AND CIT VS. DWARKADISH INVESTMENT P. LTD. 330 I TR 298, I CONSIDER IT PROPER AND APPROPRIATE TO HOLD THAT THE AO WAS NOT JUSTIFI ED IN HIS ACTION WHILE MAKING THE AFORESAID ADDITION U/ S.68 OF THE ACT. ACCORDIN GLY, THE ADDITION SO MADE BY THE AO STANDS DELETED. THUS, THE APPELLANT'S THIS GROUN D OF APPEAL IS ALLOWED. 17. SIMILARLY ,WHILE DELETING THE ADDITIONS IN APPEAL FOR AY 209-10 THE LD CIT(A) PASSED THE FOLLOWING ORDER: 3.3. I HAVE CONSIDERED THE AOS ORDER AS WELL AS TH E APPELLANTS ARS SUBMISSION. HAVING TAKEN NOTE OF THE SAME, I FIND THAT THE AO H AS MADE THE AFORESAID ADDITION UNDER SECTION 68 OF THE IT ACT BASED ON THE ENQUIRY REPORT OF JOINT SECRETARY (FT& TR) BUT THE FACT REMAINED THAT APPELLANTS AR HAS F ILED DETAILED REPORT IN RESPECT OF IDENTITY, CAPACITY AND CREDITWORTHINESS OF THEMI S INVESTMENT PTE LIMITED, SINGAPORE AS DETAILED IN THE APPELLANTS SUBMISSION S IN PARA 3.8.12 WHICH HAS BEEN ENUMERATED BY THE APPELLANT IN HIS SUBMISSION. BESI DES THIS, I ALSO FIND THAT SUBSEQUENTLY, THE INVESTMENT SO MADE BY APPELLANTS COMPANY HAS GOT POST FACTO APPROVAL FROM FOREIGN INVESTMENT PROMOTION BOARD (F IPB) VIDE ITS APPROVAL LETTER NO. 127(2012)/245(2010) DATED 22.01.2013. 3.4 IN THESE GIVEN FACTS OF THE APPELLANTS CASE AN D ALSO AFTER TAKING NOTE OF THE DECISION OF SUPREME COURT IN CASE OF CIT VS LOVELY EXPORTS P. LTD. AND HONBLE DELHI HIGH COURT IN CASE OF CIT VS DIVINE LEASING A ND FINANCE LTD. 299 ITR 268 AND CIT VS CIT VS. DWARKADISH INVESTMENT P. LTD . 330 ITR 298, I CONSIDER IT PROPER AND APPROPRIATE TO HOLD THAT AO WAS NOT JUST IFIED IN HIS ACTION WHILE MAKING THE AFORESAID ADDITION U/S 68 OF THE ACT. AC CORDINGLY, THE ADDITION SO ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 19 MADE BY AO STANDS DELETED. THUS, THE APPELLANTS TH IS GROUND OF APPEAL IS ALLOWED . 18. WE HAVE NOTED THAT THE DURING THE ASSESSMENT THE AS SESSEE HAS PROVED THE IDENTITY OF THE CREDITOR BY FILING COMPLETED DETAIL S, PAN, ADDRESS AND KYC FURNISHED BY THE BANKER OF THE CREDITOR, CREDITWORT HY BY FILING THE INCOME TAX RETURN AS PER THE STATUTORY PROVISION OF SINGAPORE, AND THE GENUINENESS OF THE TRANSACTION AS ALL THE MONEY WAS RECEIVED THROUGH B ANKING CHANNEL, WITH THE PERMISSION OF RBI AND APPROVAL OF FIPB. 19. THE HONBLE JURISDICTIONAL HIGH COURT IN PCIT VS AD ITYA BIRLA TELECOM LTD (SUPRA) ON SIMILAR QUESTION OF LAW HELD THAT WHERE INVESTMENT IN ASSESSEE- COMPANY WAS MADE BY US BASED GLOBAL PRIVATE INVESTM ENT GROUP WITH PERMISSION OF GOVERNMENT AUTHORITIES, SAME COULD NO T BE BRANDED AS SHAM TRANSACTION MERELY BECAUSE IT INVOLVED HUGE INVESTM ENT AND INVESTOR WOULD NOT EARN ANY DIVIDEND INCOME IMMEDIATELY AND INVEST MENT WAS DIVESTED TO GROUP COMPANIES BY ASSESSEE-COMPANY. 20. THE HONBLE BOMBAY HIGH COURT IN NUPOWER RENWABLES (P) LTD VS ACIT (SUPRA) HELD THAT WHERE ASSESSMENT IN CASE OF ASSESSEE WAS REOPENED ON GROUND THAT IT HAD RECEIVED HUGE AMOUNT FROM A MAURITIUS BASED COMPANY 'F' TOWARDS SHARE ALLOTMENT, HOWEVER, GENUINENESS AND CREDITWORTHINESS OF SAID COMPANY WAS IN DOUBT, IN V IEW OF FACT THAT ASSESSEE HAD DULY SUPPLIED CERTIFICATE OF FOREIGN I NWARD REMITTANCE OF FUNDS, TAX RESIDENCE CERTIFICATE OF FOREIGN COMPANY , COPY OF LEDGER ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 20 ACCOUNT SHOWING SHARE APPLICATION MONEY BEING CREDI TED IN BANK ACCOUNT AND SOURCE THEREOF, IMPUGNED REASSESSMENT PROCEEDIN GS DESERVED TO BE SET ASIDE. 21. CONSIDERING THE ABOVE FACTUAL AND LEGAL DISCUSSION, WE AFFIRM THE ORDER OF THE LD CIT(A) IN DELETION THE ADDITION UNDER SEC TION 68 FOR AY 2008- 09 AND IN AY 2009-10. IN THE RESULT THE CORRESPONDI NG GROUNDS OF APPEAL RAISED BY THE REVENUE ARE DISMISSED. (II) DISALLOWANCES UNDER SECTION 14A READ WITH RULE 8D . (AY 2008-09) 22. IN THE RETURN OF INCOME, THE ASSESSEE CLAIMED DIVID END INCOME OF RS. 3,49,85,521/- EXEMPT UNDER SECTION 10(34). THE ASSE SSING OFFICER ASKED THE ASSESSEE TO PROVIDE THE DETAILS OF EXPENSES INCURRE D FOR EARNING EXEMPT INCOME AND AS TO WHY THE DISALLOWANCE BE NOT MADE I N ACCORDANCE WITH RULE 8D. THE ASSESSEE FILED ITS REPLY DATED 26.09.2011, WHICH WAS NOT ACCEPTED BY ASSESSING OFFICER. THE ASSESSING OFFICER INVOKED TH E PROVISIONS OF RULE 8D AND MADE A DISALLOWANCE OF RS. 36,24,147/- UNDER SE CTION 14A R.W. RULE 8D, WHICH CONSIST OF PROPORTIONATE INTEREST EXPENDITURE DISALLOWANCE UNDER CLAUSE (II) OF RULE 8D(2) OF RS. 281730/- AND DISALLOWANCE UNDER CLAUSE (III) OF RULE 8D(2) OF RS. 33,42,417/-. ON APPEAL BEFORE THE LD. CIT(A), THE DISALLOWANCE UNDER CLAUSE (II) OF RULE 8D(2) WAS DELETED BY HOLD ING THAT INVESTMENT MADE BY ASSESSEE IS OUT OF OWN FUNDS AS THE ASSESSEE HAS RESERVE AND SURPLUS AND ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 21 SHARE CAPITAL OF RS. 458.35 CRORE AGAINST THE INVES TMENT IN SHARE OF RS. 145.89 CRORE. THE LD. CIT(A) DELETED THE DISALLOWAN CE BY FOLLOWING THE DECISION OF HONBLE BOMBAY HIGH COURT IN RELIANCE U TILITY AND POWER LTD. (313 ITR 340) AND CIT VS. HDFC BANK LTD. (366 ITR 5 05). HOWEVER, ADDITION/DISALLOWANCES UNDER CLAUSE (III) OF RULE 8 D(2) OF RS. 33,42,417/- WAS CONFIRMED BY LD. CIT(A). AGGRIEVED BY THE ORDER OF LD. CIT(A) IN DELETING THE ADDITION OF RS. 281370/- UNDER RULE 8D (2)(II), THE REVENUE HAS FILED APPEAL BEFORE THE TRIBUNAL. THE ASSESSEE HAS CHALLENGED THE DISALLOWANCE UNDER RULE 8D(2)(III) CONFIRMED BY LD. CIT(A) OF RS. 33,42,417/-. 23. THE LD. AR OF THE ASSESSEE SUBMITS THAT THE ASSESSE E EARNED EXEMPT INCOME OF RS. 3.49 CRORE BEING DIVIDEND INCOME FROM MUTUAL FU NDS AND FOR EARNING SUCH INCOME NO EXPENSES WERE INCURRED. THE LD. AR SUBMIT S THAT THE ASSESSEE HAS SUFFICIENT OWN FUND OUT OF WHICH INVESTMENT HAVE BE EN MADE, HENCE NO DISALLOWANCE UNDER SECTION 14A R.W. RULE 8D SHOULD BE MADE. IN SUPPORT OF HIS SUBMISSION, THE LD. AR OF THE ASSESSEE RELIED U PON THE DECISION OF HONBLE BOMBAY HIGH COURT IN PCIT VS. RELIANCE CAPITAL ASSE T MANAGEMENT LTD. (400 ITR 217), CIT VS. RELIANCE UTILITY (313 ITR 34 0), HONBLE SUPREME COURT IN PCIT VS. SINTEX INDUSTRIAL LTD. (255 TAXMA N 171) AND DECISION OF TRIBUNAL IN MACROTECH CONSTRUCTION (P.) LTD. VS. AC IT (176 ITD 530). ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 22 24. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPO RTED THE ORDER OF ASSESSING OFFICER ON DISALLOWANCE UNDER RULE 8D(2)( II) AND ORDER OF LD. CIT(A) ON DISALLOWANCE OF RULE 8D(2)(III). 25. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE LD. R EPRESENTATIVES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. SO FAR AS DISALLOWANCE UNDER SECTION 14A R.W. RULE 8D(2)(II) ARE CONCERNED, WE HAVE NOTE D THAT THE LD. CIT(A) DELETED THE DISALLOWANCES BY FOLLOWING THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN RELIANCE UTILITY AND POWER LTD. (SUPR A) AND IN CIT VS. HDFC LTD.(SUPRA). THE LD. CIT(A) ALSO EXAMINED THE RESER VE AND SURPLUS FUND AVAILABLE WITH THE ASSESSEE COMPANY, WHICH IS MORE THAN THE INVESTMENT MADE BY ASSESSEE FOR EARNING EXEMPT INCOME. NO CONT RARY FACT OR LAW IS BROUGHT TO OUR NOTICE TO TAKE THE OTHER VIEW. THERE FORE, THE GROUND OF APPEAL RAISED BY REVENUE IN ITS APPEAL FOR A.Y. 2008-09 IS DISMISSED. 26. SO FAR AS DISALLOWANCE UNDER RULE 8D(2)(III) OF RS. 33,42,417/-, WHICH IS THE SUBJECT MATTER OF GROUNDS OF APPEAL OF ASSESSEE, IS CONCERNED, WE HAVE NOTED THAT THE ASSESSEE HAS EARNED EXEMPT INCOME OF RS. 3 .49 CRORE. THE ASSESSING OFFICER WORKED OUT THE DISALLOWANCE AS PER RULE 8D( 2)(III) AND ACCORDINGLY WORKED OUT ADDITION/DISALLOWANCE OF RS. 33,42,417/- . WE HAVE NOTED THAT NEITHER THE ASSESSEE HAS PROVIDED THE WORKING OF SU O-MOTO DISALLOWANCE UNDER SECTION 14A R.W. RULE 8D. HOWEVER, IN THE REP ORT UNDER FORM NO. 3CD (AUDIT REPORT), THE ASSESSEE STATED THAT NO EXPENDI TURE INCURRED BY THE ASSESSEE FOR EARNING DIVIDEND INCOME AND ACCORDINGL Y NO AMOUNT IS ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 23 INADMISSIBLE IN TERM OF SECTION 14A. THE ASSESSING OFFICER AFTER CONSIDERING THE REPLY OF ASSESSEE CONCLUDED THAT ASSESSEE FAILE D TO BRING ADEQUATE EVIDENCE ON RECORD TO SUBSTANTIATE ITS CLAIM FOR NO T INCURRING EXPENDITURE IN EARNING EXEMPT INCOME AND ACCORDINGLY INVOKED THE F ORMULA PRESCRIBED UNDER RULE 8D. THE LD. CIT(A) CONFIRMED THE ACTION OF ASSESSING OFFICER BY FOLLOWING THE DECISION OF HONBLE BOMBAY HIGH COURT IN GODREJ BOYCE LTD. (SUPRA). BEFORE US, THE LD. AR OF THE ASSESSEE STRO NGLY RELIED UPON THE DECISION OF HONBLE BOMBAY HIGH COURT IN PCIT VS. R ELIANCE CAPITAL ASSET MANAGEMENT LTD. (SUPRA), WHEREIN THE ASSESSEE COMPA NY EARNED DIVIDEND INCOME OF RS. 8.33 CRORE AND LTCG OF RS. 68.88 LAKH S, WHICH WERE CLAIMED AS EXEMPT. IN THE RETURN OF INCOME, THE SUO-MOTO DI SALLOWANCE WAS WORKED OUT OF RS. 125605/- . THE ASSESSING OFFICER DISALLO WED INDIRECT EXPENSES BY CALCULATING AT .5% OF AVERAGE VALUE OF INVESTMENT A ND WORKED OUT THE DISALLOWANCE OF RS. 14678090/- IN TERM OF RULE 8D. ON APPEAL BEFORE THE LD. CIT(A), THE DISALLOWANCE WAS RESTRICTED TO RS. 1256 6793/- AGAINST THE AMOUNT DISALLOWED BY ASSESSING OFFICER. ON FURTHER APPEAL BY BOTH THE PARTIES BEFORE THE TRIBUNAL, THE DISALLOWANCE WAS R ESTRICTED TO RS. 3.50 LAKHS. ON FURTHER APPEAL BY REVENUE BEFORE HONBLE HIGH CO URT, THE APPEAL OF REVENUE WAS DISMISSED. CONSIDERING THE PECULIARITY OF FACTS OF THE PRESENT CASE AND BY APPLYING THE DECISION OF JURISDICTIONAL HIGH COURT IN PCIT VS. RELIANCE CAPITAL ASSET MANAGEMENT LTD., WE ARE OF T HE VIEW THAT A REASONABLE DISALLOWANCE OF 5% OF EXEMPT INCOME EARN ED BY ASSESSEE WOULD ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 24 MEET THE END OF JUSTICE. THEREFORE, WE DIRECT THE A SSESSING OFFICER TO RESTRICT THE DISALLOWANCE UNDER RULE 8D(2)(III) AT RS. 5% OF THE EXEMPT INCOME. IN THE RESULT, THE GROUND OF APPEAL RAISED BY ASSESSEE IS PARTLY ALLOWED. A.Y. 2009-10 27. IN THE RETURN OF INCOME, THE ASSESSEE HAS SHOWN EXE MPT INCOME OF RS. 304,54,208/- BEING DIVIDEND INCOME FROM MUTUAL FUND S. THE ASSESSEE CLAIMED THAT NO EXPENSES WERE INCURRED FOR EARNING SUCH EXEMPT INCOME AS THE ASSESSEE HAS SUFFICIENT FUND OUT OF WHICH INVES TMENT WERE MADE FOR EARNING EXEMPT INCOME. THE ASSESSING OFFICER INVOKE D THE PROVISION OF RULE 8D AND MADE A DISALLOWANCE OF RS. 80,49,606/- UNDER SECTION 14A R.W. RULE 8D, WHICH CONSIST OF PROPORTIONATE INTEREST EXPENDI TURE DISALLOWANCE UNDER RULE 8D(2)(II) OF RS. 47,07,172/- AND DISALLOWANCE UNDER RULE 8D(2)(III) OF RS. 33,42,434/-. ON APPEAL BEFORE THE LD. CIT(A), T HE DISALLOWANCE UNDER RULE 8D(2)(II) WAS DELETED, HOWEVER, THE DISALLOWAN CE UNDER RULE 8D(2)(III) WAS CONFIRMED. BEING AGGRIEVED, BOTH THE PARTIES AR E IN APPEAL BEFORE THE TRIBUNAL. THE REVENUE HAS CHALLENGED THE DELETION O F DISALLOWANCE UNDER RULE 8D(2)(II) OF RS. 4707172/-, SIMILARLY THE ASSE SSEE HAS CHALLENGED THE CONFIRMATION OF DISALLOWANCE OF RULE 8D(2)(III) OF RS. 33,42,417/-. 28. THE LD. REPRESENTATIVES OF BOTH THE PARTIES ARGUED ON THE SIMILAR LINE AS PER THEIR SUBMISSION ON IDENTICAL GROUND FOR A.Y. 2008- 09. 29. WE HAVE NOTED THAT THE GROUNDS OF APPEAL RAISED BY REVENUE IN CHALLENGING THE DELETION OF THE DISALLOWANCE UNDER RULE 8D(2)(I I) IS IDENTICAL TO THE ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 25 GROUNDS OF APPEAL RAISED IN APPEAL FOR A.Y. 2008-09 . THE LD. CIT(A) DELETED THE DISALLOWANCES BY FOLLOWING THE DECISION OF HON BLE BOMBAY HIGH COURT IN RELIANCE UTILITY AND POWER LTD. (SUPRA) AND IN H DFC BANK LTD. (SUPRA), WHICH WE HAVE CONFIRMED. WE HAVE FURTHER NOTED THAT THE FACT FOR THE YEAR UNDER CONSIDERATION IS NOT AT VARIANCE. THE ASSESSE E HAS SUFFICIENT INTEREST FREE FUNDS AVAILABLE WITH THEM FOR MAKING INVESTMEN T FOR EARNING EXEMPT INCOME. NO CONTRARY FACT IS BROUGHT TO OUR NOTICE B Y REVENUE. THEREFORE, FOLLOWING THE PRINCIPLE OF CONSISTENCY, THE GROUND OF APPEAL RAISED BY REVENUE IS DISMISSED. 30. SO FAR AS GROUND OF APPEAL IN CONFIRMING THE DISALL OWANCE RULE 8D(2)(III) IS CONCERNED, WE HAVE NOTED THAT THIS GROUND OF APPEAL IS IDENTICAL TO THE GROUND OF APPEAL RAISED BY ASSESSEE IN APPEAL FOR A.Y. 200 8-09, WHEREIN WE HAVE RESTRICTED THE DISALLOWANCE AT 5% OF THE EXEMPT INC OME. THEREFORE, FOLLOWING THE PRINCIPLE OF CONSISTENCY, THIS GROUND OF APPEAL IS ALSO ALLOWED WITH SIMILAR DIRECTION. IN THE RESULT, THIS GROUND OF AP PEAL IS PARTLY ALLOWED. A.Y. 2010-11 31. IN THE RETURN OF INCOME, THE ASSESSEE CLAIMED EXEMP T INCOME OF RS. 2,23,323/-. THE ASSESSING OFFICER INVOKED THE PROVI SIONS OF RULE 8D AND MADE A DISALLOWANCE OF RS. 98,82,038/-, WHICH CONSI ST OF PROPORTIONATE INTEREST EXPENSES UNDER RULE 8D(2)(II) OF RS. 48,07 ,921/- AND UNDER RULE 8D(2)(III) OF RS. 50,74,126/-. ON APPEAL BEFORE THE LD. CIT(A), DISALLOWANCE UNDER RULE 8D(2)(II) WAS DELETED, HOWEVER, THE DISA LLOWANCE UNDER RULE ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 26 8D(2)(III) WAS CONFIRMED. AGGRIEVED BY THE ORDER OF LD. CIT(A), BOTH THE PARTIES HAVE FILED THE PRESENT APPEAL BEFORE US. TH E REVENUE HAS CHALLENGED THE DELETION OF DISALLOWANCE OF RULE 8D(2)(II), SIM ILARLY, THE ASSESSEE HAS CHALLENGED THE CONFIRMATION OF DISALLOWANCE OF RULE 8D(2)(III). 32. THE LD. AR OF THE ASSESSEE SUBMITS THAT DURING THE YEAR, THE ASSESSEE EARNED EXEMPT INCOME OF RS. 2,23,323/-. THE ASSESSEE COMPA NY HAS SUFFICIENT FUND, THEREFORE, NO DISALLOWANCE WAS WARRANTED AGAINST TH E ASSESSEE. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPORTED THE ORDE R OF ASSESSING OFFICER. 33. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE PARTI ES AND FIND THAT THE GROUND OF APPEAL RAISED BY REVENUE IS IDENTICAL AS RAISED IN APPEAL FOR A.Y. 2008-09 & 2009-10, WHICH WE HAVE DISMISSED. CONSIDE RING THE PRINCIPLE OF CONSISTENCY AS THERE IS NO VARIANCE IN FACT, THEREF ORE, THE GROUND OF APPEAL RAISED BY REVENUE IS DISMISSED. 34. SO FAR AS GROUND OF APPEAL RAISED BY ASSESSEE IS CO NCERNED, WE HAVE NOTED THAT THE ASSESSEE HAS EARNED EXEMPT INCOME OF RS. 2 ,23,323/- AND IT IS SETTLED LAW THAT DISALLOWANCE UNDER SECTION 14A R.W. RULE 8 D CANNOT EXCEED THE EXEMPT INCOME. HOWEVER, CONSIDERING OUR DECISION F OR A.Y. 2008-09 & 2009-10, ON IDENTICAL GROUND OF APPEAL THE DISALLOW ANCE UNDER RULE 8D(2)(III) IS RESTRICTED TO 5% OF THE EXEMPT INCOME EARNED DURING THE YEAR. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. (III) ADDITION UNDER SECTION 69C ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 27 A.Y. 2008-09 BY REVENUE 35. THE REVENUE HAS RAISED GROUND OF APPEAL FOR RESTRIC TING THE ADDITION TO RS. 2,47,201/- AGAINST THE ADDITION OF RS. 4,40,351/- P AID TO SHRI NAND LAL NAGPAL. 36. THE ASSESSING OFFICER ON THE BASIS OF INFORMATION R ECEIVED FROM DDIT (INV.), UNIT 1(4), MUMBAI THAT TRANSACTION OF ASSES SEE WITH NAND LAL NAGPAL WAS BOGUS AS NAND LAL NAGPAL ALLEGEDLY ADMITTED THA T NO BUSINESS ACTIVITY WAS CARRIED OUT BY HIM WITH THE ASSESSEE. THE ASSES SING OFFICER ALSO CONCLUDED THAT THE ASSESSEE MERELY DEBITED AND CRED ITED THE ENTRIES IN ITS BOOKS OF ACCOUNT AND LOSS WAS CLAIMED ON SUCH TRANS ACTION. THE DDIT (INV.) FURTHER INFORMED THAT THE DIFFERENCE OF THE DEBITS AND CREDIT ENTRIES OF THE TRANSACTION CARRIED OUT BY NAND LAL NAGPAL FROM F.Y . 2007-08 TO 2010-11 IN THE FOLLOWING MANNER: FINANCIAL YEAR CREDIT AMOUNT DEBIT AMOUNT AMOUNT (LOSS) (DIFFERENCE IN DEBIT AND CREDIT. 2007-08 9,84,40,328 9,88,80,589 -4,40,351 2008-09 38,03,77,049 38,33,94,464 -30,51,415 2009-10 72,59,81,702 73,10,55,828 -50,74,126 2010-11 13,30,27,996 13,40,77,130 -1049,134 TOTAL -96,15,026 37. THE ASSESSING OFFICER ADDED RS. 4,40,350/- TO THE I NCOME OF ASSESSEE. THE LD. CIT(A) RESTRICTED THE ADDITION TO RS. 2,47,201/ -. THE LD. CIT(A) RESTRICTED THE ADDITION TO .25% OF CREDIT OF THE AMOUNTS ON TH E BASIS OF STATEMENT OF ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 28 NAND LAL NAGPAL AND DIRECTED THE ASSESSING OFFICER TO RESTRICT THE ADDITION TO RS. 2,47,201/- BEING .25% OF CREDIT OF AMOUNT OF RS . 9,88,80,589/-. 38. THE LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF A SSESSING OFFICER AND PRAYED TO RESTORE THE ORDER OF ASSESSING OFFICER BY REVERSING THE ORDER OF LD. CIT(A). LD. DR FURTHER SUBMITS THAT THE ASSESSEE HA S AVAILED THE ACCOMMODATION ENTRIES BY ROTATING THE FUNDS THROUGH VARIOUS ENTITIES OPERATED BY NAND LAL NAGPAL AND THE ENTIRE LOSS CLA IMED BY ASSESSEE SHOULD BE SUSTAINED. 39. ON THE OTHER HAND, THE LD. AR OF THE ASSESSEE SUBMI TS THAT AS PER THE STATEMENT OF NAND LAL NAGPAL, THE COMMISSION PAID O N THESE TRANSACTIONS WAS 0.20% OF THE SAID TRANSACTIONS. THE LD. CIT(A) HAS RESTRICTED/ADDED .25% OF THE SAID TRANSACTION. THE LD. AR PRAYED FOR DISM ISSAL OF GROUNDS OF APPEAL. 40. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE REPRE SENTATIVES AND PERUSED THE RECORD. WE HAVE NOTED THAT THE ASSESSING OFFICE R IN PARA-4.5 OF THE ASSESSMENT ORDER HAS RECORDED THAT NAND LAL NAGPAL HAD ADMITTED THAT HE WAS PAID COMMISSION @ 0.1% TO 0.2% IN CASH FOR THE ALLEGED TRANSACTIONS. THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER ADDED THE DIFFERENCE OF CREDIT AND DEBIT OF THE TRANSACTED AM OUNT. THE LD. CIT(A) RESTRICTED THE ADDITION TO 0.25% OF THE ALLEGED TRA NSACTIONS. WE HAVE NOTED THAT LD. CIT(A) AFTER APPRECIATING THE REPORT OF DD IT (INV.), UNIT-4, MUMBAI AND CONSIDERING THE ALLEGED TRANSACTION RESTRICTED THE ADDITION BY HOLDING THAT THE DIFFERENCE ON ACCOUNT OF CREDIT AND DEBIT HAS A LREADY BEEN DISALLOWED ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 29 UNDER SECTION 28 AND ACCORDINGLY RESTRICTED THE DIS ALLOWANCE TO 0.25% OF CREDIT AMOUNT. NO CONTRARY FACT OR LAW IS BROUGHT T O OUR NOTICE TO TAKE ANY OTHER VIEW. THEREFORE, WE DO NOT FIND ANY JUSTIFICA TION FOR INTERFERING WITH THE FINDING OF LD. CIT(A). IN THE RESULT, THE GROUND OF APPEAL RAISED BY REVENUE IS DISMISSED. A.Y. 2009-10 BY REVENUE 41. THE ASSESSING OFFICER MADE ADDITION UNDER SECTION 6 9C OF RS. 30,51,415/-, THE LD. CIT(A) RESTRICTED/CONFIRMED TO THE EXTENT O F RS. 9,58,486/- (REVENUE HAS WRONGLY MENTIONED THE FIGURE OF RS. 2,47,201/- IN ITS GROUND OF APPEAL. WE HAVE NOTED THAT THIS GROUND OF APPEAL IS IDENTIC AL TO THE GROUND OF APPEAL RAISED BY REVENUE IN APPEAL FOR A.Y. 2008-09 EXCEPT VARIATION OF DISALLOWANCE OF FIGURE. CONSIDERING THE FACT THAT W E HAVE UPHELD THE ADDITION RESTRICTED BY LD. CIT(A) IN APPEAL FOR A.Y. 2008-09 , THEREFORE, FOLLOWING THE PRINCIPLE OF CONSISTENCY, THE GROUND OF APPEAL RAIS ED BY REVENUE IS DISMISSED WITH SIMILAR OBSERVATION. A.Y. 2010-11 BY REVENUE 42. THE ASSESSING OFFICER MADE ADDITION UNDER SECTION 6 9C OF RS. 50,74,126/-, THE LD. CIT(A) RESTRICTED/CONFIRMED TO THE EXTENT O F RS. 18,27,640/- (REVENUE HAS WRONGLY MENTIONED THE FIGURE OF RS. 2,47,201/- IN ITS GROUND OF APPEAL. WE HAVE NOTED THAT THIS GROUND OF APPEAL IS IDENTIC AL TO THE GROUND OF APPEAL RAISED BY REVENUE IN APPEAL FOR A.Y. 2008-09 AND 20 09-10 EXCEPT VARIATION OF DISALLOWANCE OF FIGURE. CONSIDERING THE FACT THAT W E HAVE UPHELD THE ADDITION ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 30 RESTRICTED BY LD. CIT(A) IN APPEAL FOR A.Y. 2008-09 & 2009-10, THEREFORE, FOLLOWING THE PRINCIPLE OF CONSISTENCY, THE GROUND OF APPEAL RAISED BY REVENUE IS ALSO DISMISSED WITH SIMILAR OBSERVATION. (IV) ADDITION ON ACCOUNT OF TRANSFER PRICING A.Y. 2008-09 BY ASSESSEE 43. BRIEF FACTS THAT THE ASSESSEE IS COMPANY INCORPORAT ED IN INDIA AND TAX RESIDENT OF INDIA. THE ASSESSEE IS ENGAGED IN THE BUSINESS O F PROVIDING AIR AND OCEAN FREIGHT FORWARDING INTEGRATED SUPPLY CHAIN MANAGEME NT AND VALUE ADDED SERVICES TO OFFER END TO END LOGISTIC SOLUTIONS ACR OSS THE WORLD. DURING THE ASSESSMENT, THE ASSESSING OFFICER NOTED THAT THE AS SESSEE ENTERED INTO INTERNATIONAL TRANSACTION WITH THE ASSOCIATED ENTER PRISES (AE). THE ASSESSEE IN ITS AUDIT REPORT FURNISHED IN FORM NO. 3CEB, BES IDES OTHER TRANSACTION WITH ITS AE REPORTED BUSINESS ADVANCES OF RS. 8.34 CRORE. THE ASSESSING OFFICER MADE A REFERENCE TO TRANSFER PRICING OFFICE R (TPO) UNDER SECTION 92CA. THE TPO VIDE ITS ORDER DATED 31.03.2008 SUGGE STED ADJUSTMENT @ USD LIBOR + 3%. THE LD. CIT(A) CONFIRMED THE ADJUST MENT PROPOSED BY ASSESSING OFFICER/TPO. THE LD. CIT(A) WHILE CONFIRM ING THE ADDITION/ADJUSTMENT RELIED UPON THE ORDER OF HIS PR EDECESSOR FOR A.Y. 2007- 08 DATED 20.12.2012. 44. THE LD. AR OF THE ASSESSEE SUBMITS THAT THE LD. CIT (A) RELIED UPON THE ORDER OF HIS PREDECESSOR IN ASSESSEES OWN CASE FOR A.Y. 2007-08. THE LD. AR FOR ASSESSEE SUBMITS THAT AGAINST THE ADDITION/ADJUSTME NT SUGGESTED BY TPO AND ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 31 CONFIRMED BY LD. CIT(A), THE ASSESSEE FILED APPEAL BEFORE THE TRIBUNAL VIDE ITA NO. 659/MUM/2013 WHEREIN THE TRIBUNAL HELD THAT NOTIONAL INTEREST IS TO BE CALCULATED ON THE BASIS OF LIBOR OF HONG KONG AN D SINGAPORE AS THE CASE MAY BE + 2%. THE LD. AR OF THE ASSESSEE SUBMITS TH AT THIS GROUND OF APPEAL IS INFACT COVERED BY THE DECISION OF TRIBUNAL DATED 30.10.2015 IN ITA NO. 659/MUM/2013. 45. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE RELIE D UPON THE ORDER OF LOWER AUTHORITIES. 46. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE PARTI ES AND PERUSED THE RECORD. WE HAVE NOTED THAT ON IDENTICAL GROUNDS OF APPEAL, THE CO-ORDINATE BENCH OF TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2 007-08 IN ITA NO. 659/MUM/2013 PASSED THE FOLLOWING ORDER: 6. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE AN D PERUSED THE PAPERS PLACED BEFORE US. CONSIDERING THE ABOVE AND AFTER HERING B OTH THE PARTIES, WE FIND THAT THERE IS NO DISPUTE ON THE NATURE OF LOANS AS INTE RNATIONAL TRANSACTION IN VIEW OF RETROSPECTIVE AMENDMENT CITED ABOVE. REGARDING THE CHARGING OF INTEREST ON SUCH INTEREST FREE LOANS GIVEN TO THE SUBSIDIARIES, IT I S NOW DECIDED ISSUE, BY VIRTUE OF THE ABOVE CITED JUDGMENT OF THE JURISDICTIONAL HIGH COU RT, THAT THE SAID LOAN AMOUNTS ARE REQUIRED TO BE BENCHMARKED CONSIDERING THE LIBO R OF THE SINGAPORE AND HONG KONG, AS THE CASE MAY BE. NOW THE QUESTION IS WHAT IS THE RATE OF INTEREST WHICH CONSTITUTES ALP IN THIS CASE. IT IS THE DECISION OF THE COORDINATE BENCH IN THE CASE OF MELSTAR INFORMATION TECHNOLOGIES LTD. (SUPRA) THAT LIBOR + 2% IS FOLLOWED BY THE TRIBUNAL OF BOMBAY BENCHES, NO CONTRARY DECISION OF BOMBAY BENCHES OF THE TRIBUNAL IS BROUGHT TO OUR NOTICE BY THE LD AR. THE REFORE, WE ARE OF THE OPINION THAT AO /TPO IS DIRECTED TO BENCHMARK THE IMPUGNED TRANSACTION BY APPLYING THE ARMS LENGTH RATE OF INTEREST AT LIBOR OF THE RESPE CTIVE COUNTRIES SHOULD BE CONSIDERED. ACCORDINGLY, THIS PART OF THE GROUND IS PARTLY ALLOWED. ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 32 47. CONSIDERING THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE ON IDENTICAL GROUNDS OF APPEAL AND RESPECTFULLY FOLLOWING THE SA ME, WE DIRECT THE ASSESSING OFFICER TO WORK OUT THE NOTIONAL INTEREST ACCORDINGLY. IN THE RESULT, THIS GROUND OF APPEAL IS PARTLY ALLOWED. A.Y. 2009-10 & 2020-11 BY ASSESSEE 48. THE ASSESSEE HAS RAISED THE IDENTICAL GROUNDS OF AP PEAL FOR BOTH THE A.Y. AS RAISED IN APPEAL FOR A.Y. 2008-09, WHICH WE HAVE PA RTLY ALLOWED BY FOLLOWING THE ORDER OF TRIBUNAL IN ASSESSEES OWN C ASE FOR A.Y. 2007-08. THEREFORE, RESPECTFULLY FOLLOWING THE PRINCIPLE OF CONSISTENCY, THE GROUNDS OF APPEAL RAISED BY ASSESSEE IN APPEAL FOR A.Y. 2009-1 0 AND 2020-11 ARE ALLOWED WITH SIMILAR DIRECTION. IN THE RESULT, GROU NDS OF APPEAL RAISED BY ASSESSEE ARE PARTLY ALLOWED. (V) DELETING THE ADDITION IN RESPECT OF INTEREST IN COME RECEIVED, WHICH IS REDUCED FROM WORK-IN-PROGRESS (WIP). A.Y. 2008-09 BY REVENUE (GROUND NO.4) 49. THE DURING THE ASSESSMENT, THE ASSESSING OFFICER HA S NOTED THAT ASSESSEE HAS EARNED INTEREST INCOME OF RS. 13,40,444/- ON CAPITA L ADVANCES MADE AND THE SAID INTEREST INCOME IS REDUCED FROM WIP OF RS. 194 ,01,71,203/- INSTEAD OF SHOWING THE INTEREST INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. THE ASSESSING OFFICER ISSUED A SHOW-CAUSE NOTICE TO THE ASSESSEE AS TO WHY SUCH INTEREST INCOME SHOULD NOT BE TREATED AS INCOM E FROM OTHER SOURCES. THE ASSESSEE EXPLAINED THAT THEY ARE SETTING FREE T RADE WAREHOUSING ZONE IN ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 33 PANVEL AND THE ASSESSEE EARNED INTEREST ON THE CAPI TAL ADVANCES WHICH IS REDUCED FROM CAPITAL WORK IN PROGRESS AS BUSINESS O F FREE TRADE WAREHOUSING ZONE IS NOT COMMENCED. THE EXPLANATION OF ASSESSEE WAS NOT ACCEPTED BY ASSESSING OFFICER. THE ASSESSING OFFICE R TREATED THE INTEREST EARNED BY ASSESSEE AS INCOME FROM OTHER SOURCES. ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE WAS GRANTED RELIEF DIRECTING T HE ASSESSING OFFICER TO REDUCE THE INTEREST INCOME FROM WORK-IN-PROGRESS. A GGRIEVED BY THE ORDER OF LD. CIT(A), THE REVENUE HAS FILED THE PRESENT APPEA L BEFORE US. 50. THE LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF A SSESSING OFFICER AND PRAYED THAT ORDER OF LD CIT(A) BE REVERSE AND ASSE SSING OFFICER BE RESTORED. 51. ON THE OTHER HAND, THE LD. AR OF THE ASSESSEE SUPPO RTED THE ORDER OF ASSESSING OFFICER. THE LD. AR SUBMITS THAT THE GROU NDS OF APPEAL RAISED BY REVENUE IS COVERED BY THE DECISION OF HONBLE SUPRE ME COURT IN CIT VS. BOKARO STEEL (236 ITR 315) WHEREIN IT WAS HELD THAT THE AMOUNTS DIRECTLY CONNECTED TO AN INCIDENTAL TO CONSTRUCTION OF PLANT BY ASSESSEE AND INTEREST EARNED ON ADVANCES TO CONTRACTOR IS A CAPITAL RECEI PT AND NOT THE INCOME FROM INDEPENDENT SOURCES. IN SUPPORT THE SUBMISSION, THE LD. AR RELIED UPON THE DECISIONS OF CIT VS. BOKARO STEEL LTD. 236 ITR 315 (SC), INDIAN PANIPAT POWER CONSORTIUM VS. ITO (315 ITR 255, CIT VS. KARN AL CO-OP SUGAR MILLS LTD. (243 ITR 2) AND PCIT VS. FACOR POWER LTD. (380 ITR 474). 52. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF BOTH THE PARTIES AND PERUSED THE RECORD. DURING THE ASSESSMENT ASSESSING OFFICER H AS NOTED THAT ASSESSEE HAS ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 34 EARNED INTEREST INCOME OF RS. 13,40,444/- ON CAPITA L ADVANCES MADE AND THE SAID INTEREST INCOME WAS REDUCED FROM WIP OF RS. 19 4,01,71,203/- INSTEAD OF SHOWING THE INTEREST INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. THE ASSESSING OFFICER ISSUED A SHOW-CAUSE NOTICE TO THE ASSESSEE AS TO WHY SUCH INTEREST INCOME SHOULD NOT BE TREATED AS INCOM E FROM OTHER SOURCES. THE ASSESSEE EXPLAINED THAT THEY ARE SETTING FREE T RADE WAREHOUSING ZONE IN PANVEL AND THE ASSESSEE EARNED INTEREST ON THE CAPI TAL ADVANCES WHICH IS REDUCED FROM CAPITAL WORK IN PROGRESS AS BUSINESS O F FREE TRADE WAREHOUSING ZONE IS NOT COMMENCED. THE EXPLANATION FURNISHED BY THE ASSESSEE WAS NOT ACCEPTED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER CONCLUDED THAT THIS INCOME IS ACCRUED TO THE ASSESS EE. THE COST OF THE CAPITAL WORK IN PROGRESS OR ANY OTHER CAPITAL ASSET CAN ONL Y BE REDUCED BY THE PORTION OF THE COST THEREOF, IVE ANY AS HAS BEEN MADE DIRE CTLY OR INDIRECTLY BY ANY OTHER PERSON OR AUTHORITY LIST OF THE ASSESSEE HAS RECEIVED THE INCOME IN THE FORM OF INTEREST, SUCH INTEREST INCOME IS NOTHING B UT INCOME FROM OTHER SOURCES. THE LEARNED CIT(A) DIRECTED THE ASSESSING OFFICER TO REDUCE THE SAID INTEREST INCOME FROM WORK IN PROGRESS BY FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN CIT VS. BOKARO STEEL (SUPRA), WHER EIN IT WAS HELD THAT THE AMOUNTS DIRECTLY CONNECTED TO AN INCIDENTAL TO CONS TRUCTION OF PLANT BY ASSESSEE AND HENCE INTEREST ON ADVANCES TO CONTRACT OR SAYS CAPITAL RECEIPT AND NOT INCOME FROM ANY INDEPENDENT SOURCES. THE LEARNE D COMMISSIONER (APPEALS) PASSED THE FOLLOWING ORDER: ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 35 6.3 I HAVE CONSIDERED THE ASSESSING OFFICERS ORDER AS WELL AS APPELLANTS SUBMISSIONS. HAVING CONSIDERED BOTH, I FIND THAT CL AIM OF THE APPELLANT IS JUSTIFIED AND CORRECT IN VIEW OF THE DECISION OF SU PREME COURT IN CASE OF CIT VERSUS BOKARO STEEL LIMITED (1999) 236 ITR 315 WHER EIN HONBLE APEX COURT HAVE CATEGORICALLY HELD THAT THE AMOUNTS DIRECTLY C ONNECTED TO AND INCIDENTAL TO CONSTRUCTION OF PLANT BY ASSESSEE AND HENCE INTERES T ON ADVANCES TO CONTRACTORS IS CAPITAL RECEIPT AND NOT INCOME OF THE ASSESSEE F ROM ANY INDEPENDENT SOURCE. IN VIEW OF THE SAME, I CONSIDER IT PROPER AND APPRO PRIATE TO HOLD THAT THE ADDITION MADE BY THE AO IS NOT JUSTIFIED AND ACCORD INGLY, THE SAME STAND DELETED. THUS, THE APPELLANTS THIS GROUND OF APPEAL IS ALLOWED. 53. THE HONBLE DELHI HIGH COURT IN INDIAN OIL PANIPAT POWER CONSORTIUM VS ITO (SUPRA) HELD THAT IF INCOME IS EARNED, WHETHER BY WAY OF INTEREST OR IN ANY OTHER MANNER ON FUNDS WHICH ARE OTHERWISE 'INEX TRICABLY LINKED' TO THE SETTING UP OF THE PLANT, SUCH INCOME IS REQUIRED TO BE CAPITALIZED TO BE SET OFF AGAINST PRE-OPERATIVE EXPENSES. IT WAS HELD THAT TH E TEST IS WHETHER THE ACTIVITY WHICH IS TAKEN UP FOR SETTING UP OF THE BUSINESS AN D THE FUNDS WHICH ARE GARNERED ARE INEXTRICABLY CONNECTED TO THE SETTING UP OF THE PLANT, THE CLUE IS AVAILABLE IN SECTION 3 OF THE ACT WHICH STATES THAT FOR NEWLY SET-UP BUSINESS THE PREVIOUS YEAR SHALL BE THE PERIOD BEGINNING WIT H THE DATE OF SETTING UP OF THE BUSINESS. THEREFORE, AS PER THE PROVISION OF SE CTION 4 OF THE ACT WHICH IS THE CHARGING SECTION INCOME WHICH ARISES TO AN ASSE SSEE FROM THE DATE OF SETTING OF THE BUSINESS BUT PRIOR TO COMMENCEMENT I S CHARGEABLE TO TAX DEPENDING ON WHETHER IT IS OF A REVENUE NATURE OR C APITAL RECEIPT. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY LD ITA NO. 4764, 4765, 4299, 3951, 4763, 4297 & 4298 MUM 2015 M/S ARSHIYA INTERNATIONAL LTD. 36 CIT(A), WHICH WE AFFIRM. IN THE RESULT THE GROUND O F APPEAL RAISED BY THE REVENUE IS DISMISSED. 54. IN THE RESULT FOLLOWING RESULT IS EMERGES; ASSESSMENT YEARS ASSESSEES APPEAL REVENUES APPEA L 2007-08 ---------- DISMISSED 2008-08 PARTLY ALLOWED DISMISSED 2009-10 PARTLY ALLOWED DISMISSED 2010-11 PARTLY ALLOWED DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 27/08/2019. SD/- SD/- G.S. PANNU, PAWAN SINGH VICE-PRESIDENT JUDICIAL MEMBER MUMBAI, DATE: 27.08.2019 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR K BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI