CARGOTEC INDIA PVT LTD., NAVI MUMBAI V. ASST CIT 15(1)(2), MUMBAI

ITA 399/MUM/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6992 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 15-01-2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Bad and doubtful debts; Revenue expenditure; TDS; CHAPTER IV
• Section: 43B; 244A; 142(1); 37(1); 10B; 205; 201; 274; 72; 13; 22; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , C BENCH MUMBAI BEFORE : SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI M.BALAGANESH, A CCOUNTANT MEMBER ITA NO. 399 /MUM/ 20 20 ( ASSESSMENT YEAR : 2013 - 14 ) ITA NO. 400 /MUM/ 2020 ( ASSESSMENT YEAR : 2010 - 11 ) & ITA NO. 401 /MUM/ 2020 ( ASSESSMENT YEAR : 2011 - 12 ) M/S. CARGOTEC INDIA PVT. LTD WE - WORK 11 TH FLOOR, 11C - 140 TO 146 TOWER 1, SEAWOODS GRAND CENTRAL, SECTOR 40 SEAWOODS NAVI MUMBAI VS. THE ASSISTANT COMMISSIONER OF INCOME TAX - 15(1)(2) MUMBAI PAN/GIR NO. AA BCH8289A (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY SHRI KETAN VED REVENUE BY MS. SHREEKALA PARDESHI DATE OF HEARING 11/08/ 2021 DATE OF PRONOUNCEMENT 18 / 08 /202 1 / O R D E R PER M. BALAGANESH (A.M) : ITA NO. 399/MUM/2020 THIS APPEAL IN ITA NO. 399/MUM/2020 FOR A.Y. 2011 - 12 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 24, MUMBAI IN APPEAL NO. CIT(A) - 24/ACIT - 15(1)(2)/IT - 158/2016 - 17 DATED 31/10/2019 ITA NO.399/MUM/2020 M/S. CARGOTEC INDIA PVT. LTD., 2 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) DATED 29/03/2016 BY THE LD. ASST. COMMISSIONER OF INCOME TAX - 15(1)(2), MUMBAI (HEREINAFTER REFERRED TO AS LD. AO). ITA NO. 400/MUM/2020 THIS APPEAL IN ITA NO. 400/MUM/2020 F OR A.Y. 2010 - 11 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 24, MUMBAI IN APPEAL NO. CIT(A) - 24/10085/2014 - 15 DATED 31/10/2019 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961 (HER EINAFTER REFERRED TO AS ACT) DATED 19/03/2014 BY THE LD. DY. COMMISSIONER OF INCOME TAX (OSD) - 10(3), MUMBAI (HEREINAFTER REFERRED TO AS LD. AO). ITA NO. 401/MUM/2020 THIS APPEAL IN ITA NO. 401/MUM/2020 FOR A.Y. 2011 - 12 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 24, MUMBAI IN APPEAL NO. CIT(A) - 24/ACIT - 15(1)(2)/IT - 235/15 - 16 DATED 31/10/2019 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) DATED 28 /03/2015 BY THE LD. ASST. COMMISSIONER OF INCOME TAX - 15(1)(2), MUMBAI (HEREINAFTER REFERRED TO AS LD. AO). IDENTICAL ISSUES ARE INVOLVED IN THESE APPEALS AND HENCE THEY ARE TAKEN UP TOGETHER AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIEN CE. 2. WITH THE CONSENT OF BOTH THE PARTIES, THE APPEAL FOR THE ASST YEAR 2010 - 11 IN ITA NO. 399/MUM/2020 IS TAKEN AS THE LEAD YEAR AND THE ITA NO.399/MUM/2020 M/S. CARGOTEC INDIA PVT. LTD., 3 DECISION RENDERED THEREON WOULD APPLY WITH EQUAL FORCE FOR OTHER ASSESSMENT YEARS ALSO IN RESPECT OF IDENTICAL ISS UES , EXCEPT WITH VARIANCE IN FIGURES. 3. THE GROUND NOS. 1 TO 4 AND 11 RAISED BY THE ASSESSEE FOR THE ASST YEAR 2010 - 11 WERE STATED TO BE NOT PRESSED BY THE LD AR AT THE TIME OF HEARING BEFORE US. THE SAME IS RECKONED AS A STATEMENT MADE FROM THE BAR AN D ACCORDINGLY THOSE GROUNDS ARE DISMISSED AS NOT PRESSED. 4. THE GROUND NOS. 5 & 6 RAISED BY THE ASSESSEE IS CHALLENGING THE DISALLOWANCE OF PAYMENT OF LIQUIDATED DAMAGES AND INTEREST ON DELAYED PAYMENT OF VALUE ADDED TAX (VAT), AS DEDUCTION. 4.1. WE H AVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING, TRADING, SERVICING, DISTRIBUTING , RE - ENGINEERING AND DESIGNING OF MATERIAL HAND LING EQUIPMENT AND MACHINERY PARTS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO SUBMIT THE DETAILS OF MISCELLANEOUS EXPENSES WHICH WERE SUBMITTED BY THE ASSESSEE VIDE LETTER DATED 17.12.2013. IN RESPONSE TO THE SHOW CAUSE NOTIC E, THE ASSESSEEEXPLAINED THAT THE AMOUNT OF RS 1,02,603/ - COMPRISED OF RS 25,983/ - CHARGED BY GATEWAY TERMINALS INDIA PRIVATE LIMITED TOWARDS LIQUIDATED DAMAGES ON ACCOUNT OF DEFICIENCY IN SERVICE OF MAINTAINING FUEL EFFICIENCY UNDER OPERATION AND MAINTENA NCE CONTRACT AND RS 76,620/ - TOWARDS INTEREST ON DELAYED PAYMENT OF VAT. THE LD AO DID NOT HEED TO THE CONTENTIONS OF THE ASSESSEE AND PROCEEDED TO DISALLOW THE SAME BY APPLYING THE EXPLANATION 1 TO SECTION 37(1) OF THE ACT, WHICH WAS UPHELD BY THE LD CIT A. ITA NO.399/MUM/2020 M/S. CARGOTEC INDIA PVT. LTD., 4 4.2. WE FIND FROM THE FACTS NARRATED BEFORE THE LOWER AUTHORITIES, THE ASSESSEE HAD INCURRED THIS LIQUIDATED DAMAGES OF RS 25,983/ - PURSUANT TO ADDENDUM DATED 27.7.2009 TO AGREEMENT DATED 9.6.2006 WITH JNPT FOR OPERATION AND MAINTENANCE OF RUBBER TYRE D GANTRY CRANES, WHEREIN THE ASSESSEE HAD TO FULFIL CERTAIN PERFORMANCE PARAMETERS IN RESPECT OF FUEL EFFICIENCY, WHICH WAS NOT DONE BY THE ASSESSEE. THE SAID ADDENDUM ALSO PROVIDED THAT IN CASE IF THE ASSESSEE DOES NOT MEET DIESEL FUEL UTILISATION CRITER IA, JNPT WILL CHARGE BACK TO THE ASSESSEE, THE EXCESS FUEL UTILISED AT PREVAILING MARKET RATE LIMITED TO 12% OF THE BILL AMOUNT CHARGED DURING THE MONTHS. THE ASSESSEE HAD RAISED AN INVOICE OF RS 1,40,000/ - TO JNPT ON 30.4.2009 IN RESPECT OF SERVICES PROV IDED DURING THE PERIOD 1.4.2009 TO 24.4.2009, AGAINST WHICH , JNPT MADE PAYMENT OF RS 1,14,017/ - AND DEDUCTED AN AMOUNT OF RS 25,983/ - TOWARDS LIQUIDATED DAMAGES ON ACCOUNT OF DEFICIENCY IN SERVICE FOR NON - FULFILMENT OF THE OBLIGATION REGARDING ADHERENCE T O A PARTICULAR QUALITY OF SERVICE OF FUEL EFFICIENCY. HENCE IT IS PAYMENT MADE FOR BREACH OF CONTRACTUAL OBLIGATION BY THE ASSESSEE. THESE FACTS ARE NOT DISPUTED BY THE REVENUE. HENCE WE HOLD THAT ANY PAYMENT MADE FOR BREACH OF CONTRACTUAL OBLIGATION IN THE FORM OF LIQUIDATED DAMAGES, CANNOT BE CONSTRUED AS PENAL IN NATURE. HENCE THE PROVISIONS OF EXPLANATION 1 TO SECTION 37(1) OF THE ACT CANNOT BE BROUGHT INTO OPERATION AT ALL IN THE FACTS OF THE INSTANT CASE. ACCORDINGLY, WE DIRECT THE LD AO TO GRA NT DEDUCTION OF RS 25,983/ - TOWARDS LIQUIDATED DAMAGES. 4.3. WE FIND THAT THE ASSESSEE HAD REMITTED THE VAT DUES TO THE GOVERNMENT WITH SOME DELAY FOR WHICH IT HAD DULY SUFFERED INTEREST UPTO THE DATE OF PAYMENT. THIS INTEREST PAYMENT OF RS 76,620/ - IS PURELY COMPENSATORY IN NATURE AND BECOMES AN ALLOWABLE DEDUCTION. THE SAME CANNOT BE CONSTRUED AS PENAL IN NATURE AND DOES NOT FALL WITHIN THE ITA NO.399/MUM/2020 M/S. CARGOTEC INDIA PVT. LTD., 5 PROVISIONS OF EXPLANATION 1 TO SECTION 37(1) OF THE ACT. RELIANCE IN THIS REGARD HAS BEEN RIGHTLY PLACED BY THE LD AR ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF LACHMANDAS MATHURADAS REPORTED IN 254 ITR 799 (SC) , WHEREIN IT WAS HELD THAT THE INTEREST ON SALES TAX IS COMPENSATORY IN NATURE AND WOULD BE ALLOWABLE AS DEDUCTION IN COMPUTING PROFITS OF THE BUSINESS. ACCORDINGLY, WE DIRECT THE LD AO TO GRANT DEDUCTION OF RS 76,620/ - TOWARDS INTEREST ON DELAYED PAYMENT OF VAT. 4.4. THE GROUND NOS. 5 & 6 RAISED BY THE ASSESSEE ARE ALLOWED. 5. THE GROUND NO. 7 RAISED BY THE ASSESSEE IS CHALLENGING THE DI SALLOWANCE OF BAD DEBTS WRITTEN OFF. 5.1. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO SUBMIT THE DETAILS OF BAD DEBTS WRITTEN OFF, WHICH WERE DULY SUBMITTED VIDE LETTER DATED 17.12.2013. THE BAD DEBTS REPRESENTED EXCISE DUTY PAID OF RS 6,36,480/ - AND DEPOSITS WRITTEN OFF OF RS 67,350/ - . THE ASSESSEE SUBMITTED THE SUPPLEMENTARY CENTRAL EXCISE AUDIT REPORT DATED 16.12.2005 IN WHICH O BSERVATION WAS MADE THAT GOODS WERE UNDERVALUED AND THEREFORE EXCISE DUTY OF RS 6,24,000/ - AT THE RATE OF 16% PLUS EDUCATION CESS OF RS 12,480/ - WAS LEVIED ON THE DIFFERENTIAL VALUE IN RESPECT OF THE FOLLOWING CUSTOMERS: - CUSTOMERS STANDARD INVOICE DIF FERENTIAL VALUE VALUE VALUE ROAD WINGS 1,20,00,000 1,11,00,000 9,00,000 HARI & CO 1,20,00,000 1,13,00,000 7,00,000 FLY JACK 2,40,00,000 2,26,00,000 14,00,000 KANISHKA STEEL 1,20,00,000 1,11,00,000 9,00,000 ITA NO.399/MUM/2020 M/S. CARGOTEC INDIA PVT. LTD., 6 5.2. THE ASSESSEE SUBMI TTED THAT IT WAS UNABLE TO RECOVER THE EXCISE DUTY ON THE DIFFERENTIAL SALE AMOUNT FROM THE CUSTOMERS AND HAD THEREFORE WRITTEN OFF THE AMOUNT OF EXCISE DUTY IN THE SUM OF RS 6,36,480/ - BEING 16% OF RS 39,00,000/ - (RS 6,24,000/ - ) AND EDUCATION CESS OF RS 12,480/ - THESE CONTENTIONS WERE NOT APPRECIATED BY THE LD AO ON THE GROUND THAT THE SAME FALLS WITHIN THE EXPLANATION 1 TO SECTION 37(1) OF THE ACT AND HENCE THE LD AO PROCEEDED TO DISALLOW THE SAME, WHICH ACTION WAS UPHELD BY THE LD CITA. 5.3. WITH REGA RD TO DEPOSITS WRITTEN OFF OF RS 67,350/ - ,THE ASSESSEE SUBMITTED THE BREAK UP OF DEPOSITS WRITTEN OFF AS UNDER: - DEPOSIT WITH SALES TAX DEPARTMENT RS 20,000/ - TELEPHONE DEPOSIT RS 37,350/ - CYLINDER DEPOSIT WITH SRI SAI ENTERPRISES RS 10,000/ - --------------- RS 67,350/ - 5.3.1. WE FIND THAT THE ASSESSEE HAD SUBMITTED THAT THE AFORESAID DEPOSITS WERE PAID BY THE ASSESSEE COMPANY IN THE ORDINARY COURSE OF ITS BUSINESS AND SINCE THE SAME COULD NOT BE RECOVERED FROM THE CONCERNED PARTIES, THE SAM E WERE SOUGHT TO BE WRITTEN OFF BY THE ASSESSEE BY DEBITING BAD DEBTS WRITTEN OFF. THE LD AO PROCEEDED TO DISALLOW THE SAME BY STATING THAT THE SAME FALLS WITHIN THE EXPLANATION 1 TO SECTION 37(1) OF THE ACT. THIS WAS UPHELD BY THE LD CITA. WE FIND THAT UNDER INVOICING OF SALE AMOUNTS GOT TRIGGERED PURSUANT TO THE CENTRAL EXCISE AUDIT CONDUCTED IN EARLIER YEARS AND AUDIT REPORT DATED 16.12.2005 WAS SUBMITTED WHEREIN THE UNDER INVOICING OF SALES TO THE EXTENT OF RS 39 LACS WAS POINTED OUT TO THE ASSESSEE, WHICH FASTENED AN EXCISE DUTY LIABILITY OF RS 6,36,480/ - ON THE ASSESSEE. WE FIND THAT THIS PAYMENT OF RS 6,36,480/ - TOWARDS EXCISE DUTY DOES NOT INCLUDE ANY PENALTY FOR ANY ITA NO.399/MUM/2020 M/S. CARGOTEC INDIA PVT. LTD., 7 VIOLATION OF ANY LAW IN FORCE. SINCE THE ADDITIONAL EXCISE DUTY LIABILITY FAST ENED ON THE ASSESSEE COMPANY COULD NOT BE RECOVERED FROM THE CUSTOMERS, BUT STILL THE ASSESSEE HAD TO PAY THE SAME TO THE GOVERNMENT, THE SAID EXCISE DUTY OF RS 6,36,480/ - WAS DULY PAID BY THE ASSESSEE AND CLAIMED AS DEDUCTION DURING THE YEAR ON THE GROUND OF BAD DEBTS WRITTEN OFF. THIS IS IN OUR CONSIDERED OPINION, IS SQUARELY ALLOWABLE AS DEDUCTION BOTH U/S 43B AS WELL AS U/S 36(1)(VII) OF THE ACT. HENCE WE DIRECT THE LD AO TO ALLOW THE SAME AS DEDUCTION. 5.4. WITH REGARD TO DEPOSITS WRITTEN OFF IN THE SUM OF RS 67,350/ - , WE FIND THAT THESE ARE REGULAR BUSINESS DEPOSITS PAID BY THE ASSESSEE IN ITS ORDINARY COURSE AND SINCE THE SAID DEPOSITS WERE NOT RECOVERABLE BY THE ASSESSEE COMPANY, THE SAME WERE SOUGHT TO BE WRITTEN OFF BY THE ASSESSEE IN ITS BOO KS OF ACCOUNTS AND CLAIM THE SAID BUSINESS LOSS AS DEDUCTION. THE FACT OF THOSE DEPOSITS BECOMING IRRECOVERABLE IS NOT DISPUTED BY THE REVENUE BEFORE US. HENCE THE REGULAR BUSINESS DEPOSITS WHICH BECAME IRRECOVERABLE, WHEN WRITTEN OFF, WOULD BE SQUARELY ALLOWABLE AS DEDUCTION U/S 28 OF THE ACT AS A BUSINESS LOSS. WE DIRECT THE LD AO ACCORDINGLY. 5.5. ACCORDINGLY, THE GROUND NO. 7 RAISED BY THE ASSESSEE IS ALLOWED. 6. THE GROUND NO. 8 RAISED BY THE ASSESSEE IS CHALLENGING THE DISALLOWANCE OF ADVANCES WRITTEN OFF. 6.1. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO SUBMIT THE DETAILS OF ADVANCES / WRITTEN OFF IN THE SUM OF RS 24,77,2 25/ - , WHICH WERE DULY SUBMITTED BY THE ASSESSEE VIDE LETTER DATED 17.12.2013. THE DETAILS OF ADVANCES / ITA NO.399/MUM/2020 M/S. CARGOTEC INDIA PVT. LTD., 8 DEPOSITS WRITTEN OFF BY THE ASSESSEE IN ITS BOOKS, AS SUBMITTED BEFORE THE LD AO ARE AS UNDER: - PARTY NAME CL. BAL RECOVERABLE FROM GVK 12,18,607 .75 B.B PATIL 2.00 AVINASH GOKHALE 2,763.00 TRINITY AIR TRAVEL & TOURS PVT LTD - MAC 21.00 ST. JOHN TRANSPORT & HEAVY EQUIPMENT P LTD - 1.00 ARMUGAM PERUMAL - ADVANCE 5.000.00 AMRITA CONSULTANCY 9,96,419.00 ALLCARGO GLOBAL LOGISTIC LIMITE D 2,33,759.52 VISAKAPATNAM PORT TRUST 4.00 SEABRIDGE MARITIME AGENCIES PVT LTD. 22.00 MACGREGOR HVDRAMARINE, AS - STPI 165.45 WRITE - OFF AGAINST PUNE OFFICE PREMISES 21,192.35 HIND TERMINAL PVT. LTD. - 727.00 IMMATERIAL ROUNDING - OFF DIFFERE NCES - 2.92 TOTAL RS. 24,77,225.15 ITA NO.399/MUM/2020 M/S. CARGOTEC INDIA PVT. LTD., 9 6.2. THE ASSESSEE HAD SUBMITTED BEFORE THE LOWER AUTHORITIES THAT THE TRADE ADVANCES / DEPOSITS WRITTEN OFF WERE ADVANCED IN THE ORDINARY COURSE FOR BUSINESS PURPOSES ONLY AND SUBMITTED THE LEDGER ACCOUNT OF TH E PARTIES WHEREIN ADJUSTMENT WAS MADE IN RESPECT OF ADVANCES / DEPOSITS WRITTEN OFF. THE LD AR BEFORE US SUBMITTED THE PARTY WISE DETAILS OF VARIOUS ADVANCES / DEPOSITS THAT WERE SOUGHT TO BE WRITTEN OFF TOGETHER WITH THE REASONS FOR THE WRITE - OFF AND DECI SIONS RELIED UPON BY HIM FOR ALLOWABILITY OF THE SAME, AS UNDER: - SR. NO. PARTICULARS AMOUNT (IN RS.) NATURE OF ADVANCE/DEPOSIT COMMENTS 1. RECOVERABLE FROM G VIJAY KUMAR (DIRECTOR OF THE APPELLANT) 12,18,608 1 . SECURITY DEPO SIT FOR VASHI AND BANGALORE OFFICE RS.6,75,000 2 . DEPOSIT FOR VEHICLE RS.46,315 3 . FUNDS WERE UTILIZED FOR THE FOLLOWING PURPOSE: HIS PERSONAL TDS LIABILITY - RS.22,613 TRAVEL CREDIT CARD BILL, CAR EXPENSES - RS.2,37,647 ADVANCE FOR I MPORT T RANSACTION C HEQUE EN CASHED IN HIS PERSONAL ACCOUNT - RS. 1,72,850 1. RELIANCE IS PLACED ON THE MUMBAI TRIBUNAL DECISION IN CASE OF UNITED MOTORS (INDIA) LTD. 6 TAXMANN.COM 32 FOR WRITTEN OFF OF SECURITY DEPOSIT PAID FOR OFFICE PREMISES IS LOSS INCIDENTAL TO BUSINESS AND A LLOWED AS BUSINESS LOSS. 2. VEHICLE DEPOSIT WAS GIVEN FOR OFFICIAL PURPOSE AND ACCORDINGLY, ADVANCE WRITTEN OFF IS BUSINESS LOSS. 3. FUNDS OF THE APPELLANT GIVEN FOR OFFICIAL PURPOSE WERE WRONGLY ENCASHED / UTILIZED BY DIRECTORS FOR HIS PERSONAL PURPOSES . THE SAME COULD NOT BE RECOVERED FROM THE DIRECTOR AND HENCE, WRITTEN OFF. IN THIS CONNECTION, THE APPELLANT PLACES RELIANCE ON THE CALCUTTA HIGH COURT IN CASE OF BISHNAUTH TEA ITA NO.399/MUM/2020 M/S. CARGOTEC INDIA PVT. LTD., 10 CO. LTD. [1994] 205 ITR 578. THE HIGH COURT HELD THAT IN CASE OF EMBEZZLEMENT OF MONEY BY SERVANTS OR AGENTS OF ASSESSEE GIVEN FOR EXCISE DUTY PAYMENT, LOSS OF MONEY MUST BE REGARDED AS HAVING ARISEN IN COURSE OF CARRYING ON BUSINESS OF ASSESSEE. FURTHER, RELIANCE IN THIS CONNECTION IS PLACED ON KERALA HIGH COURT DECISION IN CASE OF CHURAKULAM TEA ESTATES (P.) LTD. [1995] 81 TAXMAN 214. 2. B.B. PATIL 2 ROUNDING OFF D IFFERENCE PROFESSIONAL SERVICES OBTAINED FROM THE SAID PARTIES IN ORDINARY COURSE OF BUSINESS. 3. AVINASH GOKHALE 309 TDS WAS PAID ON BEHALF OF THE PARTIES W HICH WAS NOT RECEIVED FROM THE PARTIES. 4. HI - TECH TELE ACCESS SERVICE LTD 830 5. XPS 685 6. OCEAN ENTERPRISES 939 7. TRINITY AIR TRAVEL & TOURS PVT. LTD. - MAC 21 ROUNDING OFF DIFFERENCE 8. ST. JOHN TRANSPORT & HEAVY EQUIPMENT .P LTD. (1) ROUNDING OFF DIFFERENCE 9. ARMUGAM PERUMAL ADVANCE 5,000 ADVANCE GIVEN TO EMPLOYEE FOR OFFICIAL VISIT TO COCHIN. HOWEVER, EMPLOYEE HAS NOT SUBMITTED SUPPORTING EXPENSES CLAIM AND HENCE WRITTEN OFF. ITA NO.399/MUM/2020 M/S. CARGOTEC INDIA PVT. LTD., 11 10. AMRITA CONSULTANCY 9,96,419 ADVANCE GIVEN FOR INTERIOR WORK OF VASHI OFFICE IN THE YEAR UNDER CONSIDERATION, THE APPELLANT WAS MAINTAINING SEPARATE BOOKS OF ACCOUNTS FOR HEAD OFFICE (MUMBAI) AND BRANCH OFFICE (BANGALORE). IN BRANCH BOOKS OF ACCOUNTS, INTERIOR WORK RELATED EXPENDITURES WERE BOOKED AND PAYMENTS WERE MADE EXCEPT LAST PAYMENT OF RS. 9,69,419. FURTHER, IN BRANCH BOOKS OF ACCOUNTS, THERE WAS AN EXPENSE ACCOUNT NAMED MUMBAI - OFFICE EXPENSES, ALL THE EXPENSES RELATED TO HEAD OFFICE WERE DEBITED TO THIS ACCOUNT AND WAS SHOWN UNDER THE HEAD MISCELLANEOUS EXPENSES IN THE FINANCIALS. IN THE FINANCIAL YEAR 2008 - 09, INTERIOR EXPENSE OF RS. 43,96,419 WAS CAPITALIZED AS AGAINST INVOICE OF RS. 34,00,000. CREDIT BALANCE OF RS. 9,96,419 HAD OV ERALL REDUCED MISCELLANEOUS EXPENSES. THEREFORE, DEBIT BALANCE OF RS. 9,96,419 WAS WRITTEN OFF IN FINANCIAL YEAR 2009 - 10. LEDGER ACCOUNT OF MUMBAI - OFFICE EXPENSES AND AMRITA CONSULTANCY IS ENCLOSED AT PAGES 36 AND 37 OF THE ENCLOSED COMPILATION. IN THIS CONNECTION, THE APPELLANT PLACES RELIANCE ON THE DECISION OF SUPREME COURT IN CASE OF EXCEL INDUSTRIES LTD. [2013] 358 ITR 295 WHEREIN IT HELD THAT IF THERE IS NO DIFFERENCE IN THE RATE OF TAX, THE CONTROVERSY ABOUT THE YEAR OF ASSESSABILITY IS UNNECESSARY AND SHOULD BE ITA NO.399/MUM/2020 M/S. CARGOTEC INDIA PVT. LTD., 12 AVOIDED. 11. ALLCARGO GLOBAL LOGISTIC LIMITED 2,33,760 WRITE - OFF PERTAINS TO AMOUNT COULD NOT RECOVERED IN RESPECT OF SALE OF SPARE PARTS AND SERVICES OFFERED TO TAX DURING THE FINANCIAL YEARS 2008 - 09 AND 2009 - 10 JOURNAL ENTRY IN RESPE CT OF AMOUNT WRITTEN OFF IS ENCLOSED AT PAGE 38 OF THE ENCLOSED COMPILATION. 12. VISAKAPATNAM PORT TRUST 4 ROUNDING OFF DIFFERENCE 13. SE ABRIDGE MARITIME AGENCIES PVT. LTD. 22 ROUNDING OFF DIFFERENCE 14. MACGREGOR HYDRAMARINE AS - STPI 165 ROUNDING OFF DIFFERENCE 15. WRITE - OFF AGAINST PUNE OFFICE 21,192 ADVANCE FOR PETTY CASH EXPENSES VARIOUS CASH EXPENSES OF PUNE OFFICE FOR WHICH NO VOUCHERS WERE BOOKED AND HENCE, WRITTEN - OFF. 16. HIND TERMINAL PVT. LTD. (727) ROUNDIN G OFF DIFFERENCE 17. IMMATERIAL ROUNDING OFF DIFFERENCES (3) ROUNDING OFF DIFFERENCE TOTAL 24,77,225 ITA NO.399/MUM/2020 M/S. CARGOTEC INDIA PVT. LTD., 13 6.3. WE FIND THAT THE AFORESAID DEPOSITS / ADVANCES WRITTEN OFF WERE SOUGHT TO BE DISALLOWED BY THE LD AO ON THE GROUND THAT NO EVID ENCES WERE FURNISHED BY THE ASSESSEE. BUT WE FIND THAT FROM THE BARE PERUSAL OF THE AFORESAID CHART, ALL THE ADVANCES / DEPOSITS WERE GIVEN ONLY IN THE ORDINARY COURSE OF ITS BUSINESS BY THE ASSESSEE COMPANY. HOWEVER, SINCE THE SAME WERE NOT PROPERLY EXA MINED BY THE LD AO IN THE ORIGINAL ASSESSMENT PROCEEDINGS, IN THE INTEREST OF JUSTICE AND FAIRPLAY, WE DEEM IT FIT AND APPROPRIATE, TO RESTORE THIS ISSUE TO THE FILE OF LD AO FOR DENOVO ADJUDICATION IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION THAT THE ASSE SSEE BE GIVEN REASONABLE OPPORTUNITY OF BEING HEARD. THE ASSESSEE IS ALSO AT LIBERTY TO FURNISH FRESH EVIDENCES, IF ANY, IN SUPPORT OF ITS CONTENTIONS. ACCORDINGLY, THE GROUND NO. 8 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7. THE GROU ND NO. 9 RAISED BY THE ASSESSEE IS WITH REGARD TO REDUCED CLAIM OF DEDUCTION U/S 10A OF THE ACT. THE ISSUE IS WHETHER DEDUCTION U/S 10A OF THE ACT IS TO BE GRANTED QUA THE ELIGIBLE UNIT BEFORE SETTING OFF LOSSES OF OTHER NON - 10A UNITS. 7.1. WE HAVE HE ARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE BEING ELIGIBLE FOR DEDUCTION U/S 10A OF THE ACT IS ABSOLUTELY NOT IN DISPUTE. WE FIND THAT THE ASSESSEE HAS A UNIT CARGOTEC ENGINEERING INDIA IN THE SOFT WARE TECHNOLOGY PARK OF INDIA (STPI) AT PUNE ENGAGED IN THE BUSINESS OF EXPORT OF SOFTWARE. FOR THE ASST YEAR 2010 - 11, THE ASSESEE CLAIMED DEDUCTION U/S 10A OF THE ACT AMOUNTING TO RS 30,85,488/ - . THE ASSESSEE DULY SUBMITTED FORM 56F, COMPUTATION OF DEDU CTION U/S 10A OF THE ACT, SEGMENT REPORT AND TRIAL BALANCE OF STPI UNIT VIDE LETTER DATED 1.10.2013 ITA NO.399/MUM/2020 M/S. CARGOTEC INDIA PVT. LTD., 14 BEFORE THE LD AO. THE LD AO RESTRICTED THE CLAIM OF DEDUCTION U/S 10A OF THE ACT BY SETTING OFF THE LOSS INCURRED BY THE NON - ELIGIBLE UNIT OF THE ASSESSEE W ITH THE PROFITS MADE BY THE STPI UNIT WHICH IS ELIGIBLE FOR DEDUCTION U/S 10A OF THE ACT, WHICH ACTION WAS UPHELD BY THE LD CITA ALSO. WE FIND THAT THIS ISSUE IS NO LONGER RES INTEGRA IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS YOKOGAWA INDIA LTD REPORTED IN 391 ITR 274 (SC) WHEREIN IT WAS HELD AS UNDER: - 16. FROM A READING OF THE RELEVANT PROVISIONS OF SECTION 10A IT IS MORE THAN CLEAR TO US THAT THE DEDUCTIONS CONTEMPLATED THEREIN IS QUA THE ELIGIBLE UNDERTAKING OF AN ASSE SSEE STANDING ON ITS OWN AND WITHOUT REFERENCE TO THE OTHER ELIGIBLE OR NON - ELIGIBLE UNITS OR UNDERTAKINGS OF THE ASSESSEE. THE BENEFIT OF DEDUCTION IS GIVEN BY THE ACT TO THE INDIVIDUAL UNDERTAKING AND RESULTANTLY FLOWS TO THE ASSESSEE. THIS IS ALSO MORE THAN CLEAR FROM THE CONTEMPORANEOUS CIRCULAR NO. 794 DATED 9.8.2000 WHICH STATES IN PARAGRAPH 15.6 THAT, 'THE EXPORT TURNOVER AND THE TOTAL TURNOVER FOR THE PURPOSES OF SECTIONS 10A AND 10B SHALL BE OF THE UNDERTAKING LOCATED IN SPECIFIED ZONES OR 100% EXP ORT ORIENTED UNDERTAKINGS, AS THE CASE MAY BE, AND THIS SHALL NOT HAVE ANY MATERIAL RELATIONSHIP WITH THE OTHER BUSINESS OF THE ASSESSEE OUTSIDE THESE ZONES OR UNITS FOR THE PURPOSES OF THIS PROVISION.' 17. IF THE SPECIFIC PROVISIONS OF THE ACT PROVIDE [FI RST PROVISO TO SECTIONS 10A(1); 10A (1A) AND 10A (4)] THAT THE UNIT THAT IS CONTEMPLATED FOR GRANT OF BENEFIT OF DEDUCTION IS THE ELIGIBLE UNDERTAKING AND THAT IS ALSO HOW THE CONTEMPORANEOUS CIRCULAR OF THE DEPARTMENT (NO. 794 DATED 09.08.2000) UNDERSTOOD THE SITUATION, IT IS ONLY LOGICAL AND NATURAL THAT THE STAGE OF DEDUCTION OF THE PROFITS AND GAINS OF THE BUSINESS OF AN ELIGIBLE UNDERTAKING HAS TO BE MADE INDEPENDENTLY AND, THEREFORE, IMMEDIATELY AFTER THE STAGE OF DETERMINATION OF ITS PROFITS AND GAIN S. AT THAT STAGE THE AGGREGATE OF THE INCOMES UNDER OTHER HEADS AND THE PROVISIONS FOR SET OFF AND CARRY FORWARD CONTAINED IN SECTIONS 70, 72 AND 74 OF THE ACT WOULD BE PREMATURE FOR APPLICATION. THE DEDUCTIONS UNDER SECTION 10A THEREFORE WOULD BE PRIOR TO THE COMMENCEMENT OF THE EXERCISE TO BE UNDERTAKEN UNDER CHAPTER VI OF THE ACT FOR ARRIVING AT THE TOTAL INCOME OF THE ASSESSEE FROM THE GROSS TOTAL INCOME. THE SOMEWHAT DISCORDANT USE OF THE EXPRESSION 'TOTAL INCOME OF THE ASSESSEE' IN SECTION 10A HAS ALR EADY BEEN DEALT WITH EARLIER AND IN THE OVERALL SCENARIO UNFOLDED BY THE PROVISIONS OF SECTION 10A THE AFORESAID DISCORD CAN BE RECONCILED BY UNDERSTANDING THE EXPRESSION 'TOTAL INCOME OF THE ASSESSEE' IN SECTION 10A AS 'TOTAL INCOME OF THE UNDERTAKING'. 1 8. FOR THE AFORESAID REASONS WE ANSWER THE APPEALS AND THE QUESTIONS ARISING THEREIN, AS FORMULATED AT THE OUTSET OF THIS ORDER, BY HOLDING THAT THOUGH SECTION 10A, AS AMENDED, IS A PROVISION FOR DEDUCTION, THE STAGE OF DEDUCTION WOULD BE WHILE COMPUTING T HE GROSS TOTAL INCOME OF THE ELIGIBLE UNDERTAKING UNDER ITA NO.399/MUM/2020 M/S. CARGOTEC INDIA PVT. LTD., 15 CHAPTER IV OF THE ACT AND NOT AT THE STAGE OF COMPUTATION OF THE TOTAL INCOME UNDER CHAPTER VI. ALL THE APPEALS SHALL STAND DISPOSED OF ACCORDINGLY. 7.2. RESPECTFULLY FOLLOWING THE AFORESAID DECISION , WE DECIDE THIS GROUND NO. 9 IN FAVOUR OF THE ASSESSEE. 8. THE GROUND NO. 10 RAISED BY THE ASSESSEE IS THAT GROUND NO. 14 RAISED BEFORE THE LD CITA WAS NOT ADJUDICATED AT ALL. WE FIND THAT THIS IS REGARDING THE EXPORT PROCEEDS BROUGHT INTO INDIA WITHIN THE PRESCRIBED TIME IN THE PRESCRIBED MANNER, WHICH HAS GOT RELEVANCE FOR COMPUTATION OF DEDUCTION U/S 10A OF THE ACT. BEFORE US, THE LD AR STATED THAT THE LD AO HAD DENIED DEDUCTION U/S 10A OF THE ACT IN RESPECT OF EXPORT PROCEEDS IN THE SUM OF RS 17.33 LACS WHICH WAS REALISED BEYOND THE PRESCRIBED PERIOD . IN THIS REGARD, THE LD AR SUBMITTED THAT THE LD AO VERIFY THE FOREIGN INWARD REMITTANCE CERTIFICATE (FIRC) AND DECIDED THE ISSUE OF ALLOWABILITY OF DEDUCTION U/S 10A OF THE ACT FOR THE SAME IN ACCORD ANCE WITH LAW. THIS WAS FAIRLY AGREED BY THE LD DR BEFORE US. ACCORDINGLY, WE RESTORE THIS ISSUE TO THE FILE OF LD AO TO VERIFY THE FIRC AND DECIDE THE ISSUE OF ALLOWABILITY OF DEDUCTION U/S 10A OF THE ACT FOR THE SAME IN ACCORDANCE WITH LAW.NEEDLESS TO MENTION THAT THE ASSESSEE BE GIVEN REASONABLE OPPORTUNITY OF BEING HEARD. THE ASSESSEE IS ALSO AT LIBERTY TO FURNISH FRESH EVIDENCES, IF ANY, IN SUPPORT OF ITS CONTENTIONS. ACCORDINGLY, THE GROUND NO. 10 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 9. THE GROUND NO. 12 RAISED BY THE ASSESSEE IS WITH REGARD TO QUANTIFICATION OF CARRY FORWARD OF LOSSES. AT THE TIME OF HEARING, THE LD AR STATED THAT THE ASSESSEE HAD ALREADY PREFERRED A RECTIFICATION APPLICATION U/S 154 OF THE ACT BEFORE THE LD AO WHICH IS PENDING ADJUDICATION. HENCE WE DIRECT THE LD AO TO DISPOSE OF THE SAID RECTIFICATION APPLICATION U/S 154 ITA NO.399/MUM/2020 M/S. CARGOTEC INDIA PVT. LTD., 16 OF THE ACT WHILE PASSING THE ORDER GIVING EFFECT TO THIS TRIBUNAL ORDER. THE LD AO IS ALSO DIRECTED TO DETERMINE THE FIGURE OF CARRY FORWARD OF LOSSES IN ACCORDANCE WITH LAW. ACCORDINGLY, THE GROUND NO. 12 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 10. THE GROUND NO. 13 RAISED BY THE ASSESSEE IS WITH REGARD TO GRANTING OF INTEREST U/S 244A OF THE ACT. AT THE TIME OF H EARING, THE LD AR STATED THAT THE ASSESSEE HAD ALREADY PREFERRED A RECTIFICATION APPLICATION U/S 154 OF THE ACT BEFORE THE LD AO WHICH IS PENDING ADJUDICATION. HENCE WE DIRECT THE LD AO TO DISPOSE OF THE SAID RECTIFICATION APPLICATION U/S 154 OF THE ACT W HILE PASSING THE ORDER GIVING EFFECT TO THIS TRIBUNAL ORDER. THE LD AO IS ALSO DIRECTED TO GRANT INTEREST U/S 244A OF THE ACT IN ACCORDANCE WITH LAW. ACCORDINGLY, THE GROUND NO. 13 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 11. THE GRO UND NOS. 14 & 15 RAISED BY THE ASSESSEE ARE GENERAL IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO. 400/MUM/2020 FOR THE ASST YEAR 2010 - 11 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. IT A NO. 401/MUM/2020 ASST YEAR 2011 - 12 13. THE GROUND NOS. 1 TO 5 AND 9 RAISED BY THE ASSESSEE FOR THE ASST YEAR 2011 - 12 WERE STATED TO BE NOT PRESSED BY THE LD AR AT THE TIME OF HEARING BEFORE US. THE SAME IS RECKONED AS A STATEMENT MADE FROM THE BAR AND ACCORDINGLY THOSE GROUNDS ARE DISMISSED AS NOT PRESSED. ITA NO.399/MUM/2020 M/S. CARGOTEC INDIA PVT. LTD., 17 14. THE GROUND NO. 6 RAISED BY THE ASSESSEE FOR THE ASST YEAR 2011 - 12 IS CHALLENGING THE DISALLOWANCE OF INTEREST U/S 36(1)(III) OF THE ACT. 14.1. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO SUBMIT THE DETAILS OF CAPITAL WORK IN PROGRESS, WHICH WERE DULY SUBMITTED VIDE LETTER DATED 27.1.2015. THE COPY OF AUDITED FINANCIAL RES ULTS WERE ALSO SUBMITTED TO THE LD AO BY THE ASSESSEE. THE LD AO PRESUMED THAT CAPITAL WORK IN PROGRESS OF RS 1,13,49,361/ - WAS INVESTED OUT OF INTEREST BEARING BORROWED FUNDS AND ACCORDINGLY DISALLOWED INTEREST U/S 36(1)(III) OF THE ACT IN THE SUM OF RS 4 ,15,922/ - ON PROPORTIONATE BASIS, ALLEGING THAT THE BORROWED FUNDS WERE DIVERTED FOR NON - BUSINESS PURPOSES. THIS ACTION WAS UPHELD BY THE LD CITA. WE FIND FROM THE PERUSAL OF THE BALANCE SHEET OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, THAT THE ASS ESSEE IS HAVING SUFFICIENT OWN FUNDS OF RS 77.04 CRORES WHICH IS SEVERAL TIMES MORE THAN THE CAPITAL WORK IN PROGRESS FIGURE OF RS 1.13 CRORES. HENCE IT COULD BE SAFELY PRESUMED THAT THE CAPITAL WORK IN PROGRESS HAD BEEN INVESTED ONLY OUT OF OWN FUNDS AND NOT OUT OF BORROWED FUNDS, BY FOLLOWING THE RATIO LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF HDFC BANK REPORTED IN 366 ITR 505 (BOM). RESPECTFULLY FOLLOWING THE SAME, WE DIRECT THE LD AO TO DELETE THE DISALLOWANCE OF INTEREST U/S 3 6(1)(III) OF THE ACT. ACCORDINGLY, THE GROUND NO. 6 RAISED BY THE ASSESSEE FOR THE ASST YEAR 2011 - 12 IS HEREBY DIRECTED TO BE ALLOWED. 15. THE GROUND NO. 7 RAISED BY THE ASSESSEE FOR THE ASST YEAR 2011 - 12 IS IDENTICAL TO GROUND NO. 7 RAISED FOR ASST YEA R 2010 - 11 AND HENCE THE DECISION RENDERED THEREON WOULD APPLY WITH EQUAL FORCE FOR THIS ASST YEAR ALSO , EXCEPT WITH VARIANCE IN FIGURES. ITA NO.399/MUM/2020 M/S. CARGOTEC INDIA PVT. LTD., 18 16. THE GROUND NO. 8 RAISED BY THE ASSESSEE IS WITH REGARD TO DEDUCTION FOR SHARE ISSUE EXPENSES. 16.1. WE HAVE HE ARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD INCURRED AN AMOUNT OF RS 40,00,020/ - TOWARDS SHARE ISSUE EXPENSES. IN THE RETURN OF INCOME, IT HAD DISALLOWED ONLY AN AMOUNT OF RS 8,00,000/ - . HENCE THE LD AO DISALLOWED THE REMAINING SUM OF RS 32,00,020/ - IN THE ASSESSMENT AS THE SAME WAS INCURRED TOWARDS STAMP DUTY AND FILING FEES FOR INCREASE IN AUTHORISED SHARE CAPITAL OF THE ASSESSEE COMPANY. THIS ACTION WAS UPHE LD BY THE LD CITA. WE FIND THAT THERE IS NO DISPUTE THAT THE AMOUNTS SPENT ON ACCOUNT OF SHARE ISSUE EXPENSES WERE INCURRED ONLY FOR INCREASING THE AUTHORISED SHARE CAPITAL OF THE ASSESSEE COMPANY. WE FIND THAT THE HONBLE SUPREME COURT IN THE CASE OF BR OOKE BOND INDIA LTD VS CIT REPORTED IN (1997) 12 SCL 83 (SC) DATED 27.2.1997, HAD HELD THAT EXPENDITURE INCURRED ON ISSUING SHARE TO INCREASE SHARE CAPITAL BY A COMPANY WOULD NOT BE ALLOWABLE AS REVENUE EXPENDITURE AND IT WOULD ONLY BE CAPITAL IN NATURE. RESPECTFULLY FOLLOWING THE SAID DECISION, THE GROUND NO. 8 RAISED BY THE ASSESSEE IS HEREBY DISMISSED. 17. THE GROUND NO. 10 RAISED BY THE ASSESSEE FOR THE ASST YEAR 2011 - 12 IS IDENTICAL TO GROUND NO. 13 RAISED FOR ASST YEAR 2010 - 11 AND HENCE THE DECISI ON RENDERED THEREON WOULD APPLY WITH EQUAL FORCE FOR THIS ASST YEAR ALSO , EXCEPT WITH VARIANCE IN FIGURES. 18. THE GROUND NO. 11 RAISED BY THE ASSESSEE FOR THE ASST YEAR 2011 - 12 IS POINTING OUT CERTAIN FACTUAL ERRORS IN THE ORDER OF THE LD CITA. WE FI ND ITA NO.399/MUM/2020 M/S. CARGOTEC INDIA PVT. LTD., 19 THAT IF THERE ARE CERTAIN FACTUAL ERRORS IN THE ORDER OF THE LD CITA, THE ASSESSEE SHOULD SEEK APPROPRIATE REMEDY BEFORE THE LD CITA IN THE MANNER KNOWN TO LAW. ACCORDINGLY, THE GROUND NO. 11 RAISED BY THE ASSESSEE FOR THE ASST YEAR 2011 - 12 IS DISMISS ED WITH LIBERTY GIVEN TO THE ASSESSEE TO TAKE APPROPRIATE REMEDY, IF IT SO DESIRES, BEFORE THE APPROPRIATE FORUM, IN THE MANNER KNOWN TO LAW. 19. THE GROUND NOS. 12& 13 RAISED BY THE ASSESSEE ARE GENERAL IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUDI CATION. 20. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO. 401/MUM/2020 FOR THE ASST YEAR 2011 - 12 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 399 /MUM/2020 ASST YEAR 201 3 - 14 21. THE GROUND NOS. 1 TO 5 RAISED BY THE ASSESSEE FOR THE ASST YEAR 2013 - 14 WERE STATED TO BE NOT PRESSED BY THE LD AR AT THE TIME OF HEARING BEFORE US. THE SAME IS RECKONED AS A STATEMENT MADE FROM THE BAR AND ACCORDINGLY THOSE GROUNDS ARE DISMISSED AS NOT PRESSED. 22. THE GROUND NOS. 6 & 7 RAISED BY THE ASSESSEE F OR THE ASST YEAR 2013 - 14 ARE CHALLENGING THE DISALLOWANCE MADE ON ACCOUNT OF PROVISION FOR WARRANTIES. 22.1. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT IN THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE CO MPANY FOR THE YEAR UNDER CONSIDERATION, AN AMOUNT OF RS 22,30,66,072/ - WAS DEBITED IN RESPECT OF OTHER EXPENSES , WHICH INCLUDED AN AMOUNT OF RS 20,54,889/ - TOWARDS PROVISION FOR WARRANTIES. DURING THE ITA NO.399/MUM/2020 M/S. CARGOTEC INDIA PVT. LTD., 20 COURSE OF ASSESSMENT PROCEEDINGS, THE LD AO VIDE NOTIC E U/S 142(1) OF THE ACT DATED 4.3.2016 DIRECTED THE ASSESSEE TO PROVIDE DETAILS AS UNDER: - 2. JUSTIFY THE CLAIM OF RS 22.30 UNDER THE HEAD OTHER EXPENSES . WHY THE SAME SHOUD NOT BE DISALLOWED ADHOC BASIS. 22.2. WE FIND THAT THE ASSESSEE HAD FILED ITS REPLY VIDE LETTER DATED 14.3.2016 STATING THAT THERE WERE MULTIPLE ACCOUNTS GROUPED UNDER THE HEAD OTHER EXPENSES AND PROVIDED ACCOUNT WISE LEDGER EXTRACT FOR EACH OF THE ACCOUNTS. BUT IN THE ASSESSMENT ORDER, THE LD AO OBSERVED THAT NO EXPLANATION WAS OFFERED BY THE ASSESSEE REGARDING PROVISION FOR WARRANTIES TO THE TUNE OF RS 20,54,889/ - AND HENCE PROCEEDED TO DISALLOW THE SAME ON THAT COUNT. THE MAIN GRIEVANCE OF THE ASSESSEE WAS THAT NO OPPORTUNITY WAS PROVIDED TO THE ASSESSEE IN THIS REGARD BY THE LD AO IN THE ASSESSMENT PROCEEDINGS. WE FIND THAT THE ASSESSEE HAD FURNISHED DETAILED EXPLANATION WITH REGARD TO THE PROVISION FOR WARRANTIES BEFORE THE LD CITA TOGETHER WITH THE BASIS OF MAKING THE PROVISION, ITS ALLOWABILITY AS DEDUCTION IN THE EARLIER ASSESSMENT YEARS AND WITH VARIOUS DECISIONS OF HONBLE SUPREME COURT AND HONBLE HIGH COURTS. WE FIND THAT THE LD CITA HAD SIMPLY BRUSHED ASIDE ALL THE ARGUMENTS OF THE ASSESSEE AND MADE GENERAL OBSERVATIONS WHICH ARE NOT AT ALL GERMANE TO THE ISSUE IN D ISPUTE BEFORE HIM AND UPHELD THE ACTION OF THE LD AO. WE FIND THAT SINCE SUFFICIENT OPPORTUNITY WAS NOT GIVEN TO THE ASSESSEE BY THE LD AO IN THE ASSESSMENT PROCEEDINGS ITSELF, WE DEEM IT FIT AND APPROPRIATE, IN THE INTEREST OF JUSTICE AND FAIRPLAY, TO RE STORE THIS ISSUE TO THE FILE OF LD AO FOR DENOVO ADJUDICATION IN ACCORDANCE WITH LAW BY DULY CONSIDERING ALL THE SUBMISSIONS OF THE ASSESSEE IN THIS REGARD. NEEDLESS TO MENTION THAT THE ASSESSEE BE GIVEN REASONABLE OPPORTUNITY OF BEING HEARD. THE ASSESS EE IS ALSO AT LIBERTY TO FURNISH FRESH EVIDENCES, IF ANY, IN SUPPORT OF ITS ITA NO.399/MUM/2020 M/S. CARGOTEC INDIA PVT. LTD., 21 CONTENTIONS. ACCORDINGLY, THE GROUND NOS. 6 & 7 RAISED BY THE ASSESSEE FOR THE ASST YEAR 2013 - 14 ARE ALLOWED FOR STATISTICAL PURPOSES. 23. THE GROUND NO. 8 RAISED BY THE ASSESSE E FOR THE ASST YEAR 2013 - 14 IS POINTING OUT CERTAIN FACTUAL ERRORS IN THE ORDER OF THE LD CITA. WE FIND THAT IF THERE ARE CERTAIN FACTUAL ERRORS IN THE ORDER OF THE LD CITA, THE ASSESSEE SHOULD SEEK APPROPRIATE REMEDY BEFORE THE LD CITA IN THE MANNER KNO WN TO LAW. ACCORDINGLY, THE GROUND NO. 8 RAISED BY THE ASSESSEE FOR THE ASST YEAR 2013 - 14 IS DISMISSED WITH LIBERTY GIVEN TO THE ASSESSEE TO TAKE APPROPRIATE REMEDY, IF IT SO DESIRES, BEFORE THE APPROPRIATE FORUM, IN THE MANNER KNOWN TO LAW. 24. THE GR OUND NOS. 9& 10 RAISED BY THE ASSESSEE ARE GENERAL IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. 25. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO. 399/MUM/2020 FOR THE ASST YEAR 2013 - 14 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 26. TO SUM UP, ALL THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 18 / 08 /202 1 BY WAY OF PROPER MENTIONING IN THE NOTICE BOARD. SD / - ( VIKAS AWASTHY ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 18 / 08 / 2021 KARUNA , SR.PS ITA NO.399/MUM/2020 M/S. CARGOTEC INDIA PVT. LTD., 22 COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE CO PY//