TATA INTERNATIONAL LTD, MUMBAI V. ADDL CIT 7(3), MUMBAI

ITA 4376/MUM/2010

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6066 (ITAT-MUMBAI)
• Duration Of Justice: 9 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: K
• Next Hearing Date: 13-04-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 28-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A MOHAN
• Keywords: Transfer pricing; International transaction; Earning of tax free income; Bad and doubtful debts; Rule 8D; Set aside; Liquidation
• Section: 143(3); 92B; 14A; 143(2); 13; 92

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL J BENCH, MUM BAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 4376/MUM/2010 (ASSESSMENT YEAR 2005-06 ) TATA INTERNATIONAL LIMITED, BLOCK A, SHIVSAGAR ESTATES, DR. ANNIE BESANT ROAD, WORLI, MUMBAI-400018 PAN: AAACT3198F VS. ACIT-7(3), ROOM NO. 675, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 APPELLANT RESPONDE NT ITA NO. 4451/MUM/2010 (ASSESSMENT YEAR 2005-06 ) ACIT-7(3), ROOM NO. 675, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 VS. TATA INTERNA TIONAL LIMITED, BLOCK A, SHIVSAGAR ESTATES, DR. ANNIE BESANT ROAD, WORLI, MUMBAI-400018 PAN: AAACT3198F APPELLANT RESPONDE NT CROSS OBJECTION NO. 223/MUM/2013 IN I TA NO. 4451/MUM/2010 TATA INTERNATIONAL LIMITED, BLOCK A, SHIVSAGAR ESTATES, DR. ANNIE BESANT ROAD, WORLI, MUMBAI-400018 PAN: AAACT3198F VS. ACIT-7(3), ROOM NO. 675, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 APPELLANT RESPONDE NT APPELLANT BY : SHRI P.J. PARDIWALA, SHRI NIT ESH JOSHI, SHRI MILIN THAKORE & MS. ASTHA SHAH (AR) RESPONDENT BY : SHRI A. MOHAN (CIT- DR) DATE OF HEARING : 27.01.2020 DATE OF PRONOUNCEMEN T : 29.01.2020 ORDER UNDER SECTION 254(1) OF INCOME-TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER ; 1. THESE TWO CROSS APPEAL AND ONE CROSS OBJECTION BY A SSESSEE ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A)-15 DATED 15.03.2010 FOR ASSESSMENT YEAR 2005-06. THE ASSESSEE HAS RAISED THE FOLLOWING GROU NDS OF APPEAL: ITA NO. 4376, 4451 MUM 2010 & C.O. NO . 223 MUM 2013-TATA INTERNATIONAL LIMITED. 2 THE APPELLANT FILED ITS APPEAL UNDER SECTION 253 OF THE INCOME-TAX ACT (THE ACT) BEFORE THE TRIBUNAL, AGAINST ORDER DATED 15.03.2010 PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-15, MUMBAI (TH E CIT(A)), ON 28.05.2010. SUBSEQUENT THERETO, ADDITIONAL GROUNDS HAVE BEEN FILED IT ON 27.01.2016, 10.05.2016 AND 19.03.2018. SINCE, THE S AID GROUNDS COULD BE REGARDED AS ARGUMENTATIVE AND WITH A VIEW TO PLACE THE ORIGINAL AS WELL AS THE ADDITIONAL GROUNDS TOGETHER, THE APPELLANT FILES TH ESE GROUNDS IN A CONCISE FORM. THE APPELLANT SUBMITS THAT EACH OF THESE GROUNDS AR E IN THE ALTERNATIVE AND WITHOUT PREJUDICE TO ANY OF THE OTHERS: ORIGINAL GROUNDS 1. THE CIT(A) ERRED IN UPHOLDING THE DISALLOWANCE O F A SUM OF RS.60,45,662 BEING CLAIMS SETTLED BY THE APPELLANT DURING THE YE AR AND OUGHT TO HAVE HELD THAT THE SAID AMOUNT MAY BE ALLOWED AS A DEDUCTION EITHE R AS BAD DEBTS OR AS BUSINESS LOSS. 2. THE CIT(A) ERRED IN UPHOLDING DISALLOWANCE OUT OF PAYMENTS MADE TO EXTENT OF RS.34,500. 3.1 THE CIT(A) ERRED IN NOT HOLDING THAT IN ANY EVE NT THE LD. AO HAD NOT RECORDED SATISFACTION WITH THE CORRECTNESS OF THE C LAIM OF THE APPELLANT IN RESPECT OF THE DISALLOWANCE UNDER SECTION 14A AND THEREFORE HE DID NOT SATISFY THE CONDITION PRECEDENT FOR APPLICATION OF SUB-SECTION (II) & (III) OF SECTION 14A AND RULE 8D. 3.2 THE CIT(A) ERRED IN APPLYING RULE 8D OF THE INC OME-TAX RULES, 1962 (THE RULES) FOR THE PURPOSES OF COMPUTING THE AMOUNT OF DISALLOWANCE UNDER SECTION 14A OF THE ACT AND OUGHT TO HAVE APPRECIATED THAT T HE SAID RULE HAD NO APPLICATION TO THE YEAR UNDER CONSIDERATION. 3.3 THE CIT(A) OUGHT TO HAVE HELD THAT THE APPELLAN T HAD UTILIZED INTEREST FREE OWNED FUNDS FOR MAKING INVESTMENTS IN SECURITIES YI ELDING TAX FREE INCOME, AND HENCE, THE AO ERRED IN DISALLOWING ANY PART OF THE INTEREST EXPENDITURE UNDER SECTION 14A OF THE ACT. 3.4 THE CIT (A) OUGHT TO HAVE HELD THAT IN ANY CASE , THE FOREIGN INVESTMENTS MADE BY THE APPELLANT HAVE TO BE EXCLUDED IN COMPUT ING THE DISALLOWANCE UNDER SECTION 14A OF THE ACT AS THE DIVIDEND IN RESPECT O F THE SAME IS LIABLE TO TAX UNDER THE ACT. ITA NO. 4376, 4451 MUM 2010 & C.O. NO . 223 MUM 2013-TATA INTERNATIONAL LIMITED. 3 3.5 THE CIT(A) ERRED IN NOT APPRECIATING THAT THE A PPELLANT'S OLD INVESTMENTS PERTAINING TO PERIOD PRIOR TO 31 ST MARCH, 1999 WERE NOT REQUIRED TO BE CONSIDERED FOR THE PURPOSE OF COMPUTING DISALLOWANCE UNDER SEC TION 14A OF THE INCOME TAX ACT, 1961 (THE ACT). 3.6 THE CIT(A) OUGHT TO HAVE HELD THAT ALL INVESTM ENTS WHICH DID NOT YIELD ANY TAX FREE INCOME IN THE FORM OF DIVIDEND WERE REQUIR ED TO BE EXCLUDED FROM THE AVERAGE VALUE OF THE INVESTMENTS FOR COMPUTING DISA LLOWANCE UNDER SECTION 14A OF THE ACT. 3.7 WITHOUT PREJUDICE TO THE EACH OF THE EARLIER G ROUNDS, THE CIT(A) ERRED IN NOT HOLDING THAT IN ANY CASE, EVEN IF ONE WERE TO ACCEP T THE METHOD FOLLOWED BY THE REVENUE IN COMPUTING THE DISALLOWANCE THE WEIGHTED AVERAGE COST OF INVESTMENTS AGGREGATING TO RS. 2,981.90 LACS WAS RE QUIRED TO BE EXCLUDED BEING THE INVESTMENTS RECEIVED BY THE APPELLANT UPON AMAL GAMATION OF CAMEO INVESTMENT AND FINANCE LIMITED, IT'S ERSTWHILE SUBS IDIARY. 3.8 WITHOUT PREJUDICE TO THE ALTERNATIVE GROUNDS E ARLIER, THE CIT(A) ERRED IN NOT APPRECIATING THAT THE DISALLOWABLE INTEREST WAS REQ UIRED TO BE COMPUTED BY CONSIDERING INTEREST APPORTIONABLE TO THE EXEMPT IN COME IN THE SAME PROPORTION THAT THE GROSS INVESTMENT INCOME BY WAY OF DIVIDEND RECEIVED BORE TO THE GROSS REVENUE OF THE APPELLANT AS HELD BY HON. SUPREME CO URT IN CONSOLIDATED COFFEE LTD. V. STATE OF KAMATAKA [2001] 248 ITR 432 (SC). 4. THE CIT(A) ERRED IN UPHOLDING THE DISALLOWANCE AS MADE BY THE AO UNDER THE FOLLOWING HEADS: A. SERVICE CHARGE - RS.3,16,388 B. LEGAL AND PROFESSIONAL CHARGES - RS. 43,06,375 C. REPAIRS & MAINTENANCE OWNED RESIDENTIAL PREMISES RS. 4,524 D. REPAIRS AND MAINTENANCE OTHERS - RS. 13,23,679 E. COMMISSION PAID ON EXPORTS-FOREIGN RS. 4,32,73 0 F. REPAIRS AND MAINTENANCE PLANT AND MACHINERY - RS . 5,000 G. REPAIRS AND MAINTENANCE LEASED RESIDENTIAL PREMI SES - RS. 12,989 ADDITIONAL GROUNDS DT. 27.01.2016 5. THAT, IN THE PRESENT CASE, THE REFERENCE MADE BY THE AO TO THE TPO UNDER SECTION 92CA(I) OF THE ACT FOR DETERMINATION OF ARM 'S LENGTH PRICE WAS WITHOUT FULFILLING THE JURISDICTIONAL PRE-CONDITIONS UNDER THE ACT ESPECIALLY CHAPTER X THEREOF, RENDERING THE TRANSFER PRICING ORDER DATED 29.01.2008 AND THE ITA NO. 4376, 4451 MUM 2010 & C.O. NO . 223 MUM 2013-TATA INTERNATIONAL LIMITED. 4 ADJUSTMENT DETERMINED THEREIN IN RESPECT OF ISSUE O F LETTERS OF COMFORT TO BE ILLEGAL AND BAD IN LAW. 6. THAT NO TRANSFER PRICING ADJUSTMENT WITH RESPECT TO ISSUE OF 'LETTERS OF COMFORT' COULD BE MADE IN THE PRESENT CASE, AS THER E WAS NO EVASION OF TAX OR SHIFTING OF PROFITS FROM INDIA IN RESPECT OF THE SA ME. 7. ASSUMING WITHOUT ADMITTING THAT THE ISSUE OF 'LE TTER OF COMFORT' BY THE APPELLANT TO THE BANKS IS REGARDED AS AN INTERNATIO NAL TRANSACTION AND IT IS HELD THAT A TRANSFER PRICING ADJUSTMENT IS REQUIRED TO B E MADE IN RESPECT THEREOF, COMPUTATION OF SUCH ADJUSTMENT SHOULD BE RESTRICTED TO THE AMOUNT OF CREDIT FACILITY ACTUALLY UTILISED BY THE RESPECTIVE ASSOCI ATED ENTERPRISE/SO 8. ASSUMING WITHOUT ADMITTING THAT A TRANSFER PRICI NG ADJUSTMENT IN RESPECT OF ISSUE OF 'LETTER OF COMFORT' IS REQUIRED TO BE MADE IN THE PRESENT CASE, COMMISSION CHARGED BY BANKS FOR ISSUING GUARANTEE C ANNOT BE REGARDED AS A COMPARABLE WHILE APPLYING THE CUP METHOD. ADDITIONAL GROUNDS DT. 10.05.2016 9. THAT THE ISSUE OF 'LETTERS OF COMFORT' BY THE A PPELLANT TO THE BANKS CANNOT BE REGARDED AS AN 'INTERNATIONAL TRANSACTION' UNDER SECTION 92B OF THE ACT 10. THAT THE ASSESSMENT ORDER DATED 24.03.2008 PASS ED BY THE ADDITIONAL COMMISSIONER OF INCOME-TAX UNDER SECTION 143(3) OF THE ACT IS WITHOUT JURISDICTION, AND HENCE, IS ILLEGAL AND BAD IN LAW. 11. ASSUMING WITHOUT ADMITTING THAT THE AD WAS JUST IFIED IN MAKING A DISALLOWANCE UNDER SECTION 14A OF THE ACT IN RESPEC T OF THE INTEREST EXPENDITURE, HE OUGHT TO HAVE EXCLUDED STRATEGIC INVESTMENTS THA T IS INVESTMENTS IN SUBSIDIARIES/ASSOCIATES/JOINT VENTURE COMPANIES FOR THE PURPOSES OF MAKING ANY DISALLOWANCE. ADDITIONAL GROUNDS DT. 20.03.2018 12. ASSUMING WITHOUT ADMITTING THAT THE ADDITIONAL COMMISSIONER OF INCOME TAX WAS JUSTIFIED IN EXERCISING JURISDICTION OVER T HE APPELLANT TO PASS THE ASSESSMENT ORDER FOR THE CURRENT YEAR, THEN, THE AS SESSMENT PROCEEDINGS WOULD BE ILLEGAL AND BAD IN LAW AS THE JURISDICTIONAL NOT ICE UNDER SECTION 143(2) OF THE ACT HAS BEEN ISSUED BY THE DEPUTY COMMISSIONER OF I NCOME TAX WHO COULD NOT SIMULTANEOUSLY HAVE THE SAME JURISDICTION. 13. ASSUMING WITHOUT ADMITTING THAT A DISALLOWANCE OF INTEREST EXPENDITURE COULD BE MADE UNDER SECTION 14A OF THE ACT, INTERES T PAID ON CREDIT FACILITIES BY ITA NO. 4376, 4451 MUM 2010 & C.O. NO . 223 MUM 2013-TATA INTERNATIONAL LIMITED. 5 WAY OF PACKING CREDIT AND POST SHIPMENT CREDIT COUL D NOT BE CONSIDERED FOR THE PURPOSES OF MAKING ANY SUCH DISALLOWANCE AS NO PART OF THE SAID BORROWINGS HAD BEEN UTILISED FOR THE PURPOSES OF MAKING ANY INVEST MENTS. 2. THE REVENUE IN ITS CROSS APPEAL HAS RAISED THE FOLL OWING GROUNDS OF APPEAL: 1. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE CIT(A) WAS CORRECT IN LAW IN HOLDING THAT LOC DOES NOT CONSTIT UTE AN AGREEMENT OR CONTRACT ONLY BECAUSE IT IS NOT ACCEPTED BY THE BANK' 2. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE CIT(A) WAS CORRECT IN LAW IN HOLDING THAT SUCH LOC IS NOT AN A GREEMENT OR CONTRACT WHEN ACTUALLY IT CONSTITUTES AN AGREEMENT' 3. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE CIT(A) WAS CORRECT IN LAW IN HOLDING THAT LOC HAS NO BINDING F ORCE WHEN IT MORALLY BINDS THE ASSESSEE AND THE AE AND FAILURE TO HONOUR THIS WILL HAVE WIDESPREAD REPERCUSSIONS ON THEIR BUSINESS' 4. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE CIT(A) WAS CORRECT IN LAW IN HOLDING THAT LOC CAN'T BE TREATED AS EQUIVALENT TO GUARANTEES MERELY BECAUSE THEY ARE NOT ENFORCEABLE NOTWITHSTAN DING VARIOUS CONSEQUENCES ATTACHED WITH IT IN CASE OF FAILURE TO HONOUR IT' 5. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO RESTORED. THE APPELLANT CR AVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND THAT MAY BE NECESSAR Y.' 3. ON SERVICE OF NOTICE OF APPEAL BY REVENUE, THE ASSE SSEE HAS FILED CROSS OBJECTION RAISING THE FOLLOWING GROUNDS OF APPEAL/I N ITS C.O. THE GROUNDS SET OUT HEREAFTER ARE WITHOUT PREJUDICE TO ONE ANOTHER. 1. TRANSFER PRICING ADJUSTMENT 1.1 THE TRANSFER PRICING ADJUSTMENT MADE BY THE ASS ESSING OFFICER IS BAD IN LAW, ILLEGAL AND UNSUSTAINABLE ON THE BASIS OF THE FOLLOWING GROUNDS, TAKEN SINGLY OR CUMULATIVELY, AND, THEREFORE, ITS DELETION BY TH E LD CIT(A) OUGHT TO BE UPHELD. 1.1.1 A) THE CONDITIONS STIPULATED IN SECTION 92CA( 1) OF THE INCOME TAX ACT, 1961 ('ACT') ARE MANDATORY AND THE ASSESSING OFFICE R IS EXPECTED TO RECORD HIS ITA NO. 4376, 4451 MUM 2010 & C.O. NO . 223 MUM 2013-TATA INTERNATIONAL LIMITED. 6 SATISFACTION IN THAT RESPECT BEFORE MAKING THE REFE RENCE TO THE TRANSFER PRICING OFFICER ('TPO'). B) FURTHER, THE TPO HAS FAILED TO PROVE THAT ANY OF THE CONDITIONS LAID DOWN IN SECTION 92CA(1) OF THE ACT HAD BEEN SATISFIED, WHIC H MADE OUT A CASE FOR TAX EVASION. 1.1.2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, A TRANSFER PRICING ADJUSTMENT CANNOT BE MADE WITHOUT ARRIVING AT THE F INDING THAT THE INTENTION OF THE ASSESSEE WAS TO EVADE TAX AND SHIFT PROFITS OUT SIDE OF INDIA. FURTHER, SUCH FINDING OF TAX EVASION AND OF SHIFTING OF PROFITS C ONSTITUTES A CONDITION PRECEDENT FOR MAKING THE TRANSFER PRICING ADJUSTMENT. 1.1.3 THE TRANSFER PRICING ADJUSTMENT MADE BY THE A SSESSING OFFICER IS BAD IN LAW, ILLEGAL, WITHOUT JURISDICTION AND CONTRARY TO AND / OR BEYOND AND IN EXCESS OF THE EXPRESS STATUTORY PROVISIONS OF THE ACT INCLUDI NG SECTIONS 4,5,9,92, 92C, 92CA, ETC. THE APPROVAL OF THE CIT UNDER SECTION 92 CA(1) IS ALSO NOT IN ACCORDANCE WITH LAW AND HENCE THE ADJUSTMENT MUST B E QUASHED. 4. THE ASSESSEE VIDE APPLICATION 27.01.2016 HAS RAISED ADDITIONAL GROUND NO. 5 TO 8, VIDE APPLICATION DATED 10.05.2016 THE ASSESSE E HAS RAISED THE ADDITIONAL GROUND OF APPEAL VIDE GROUND NO. 9, 10 & 11 AND FUR THER, VIDE APPLICATION DATED 20.03.2018, THE ADDITIONAL GROUND NO. 12 & 13 WAS RAISED. THE LD. AR OF THE ASSESSEE SUBMITS THAT FOR ADJUDICATION OF ADDITIONAL GROUND OF APPEAL, NO NEW FACTS ARE NECESSARY TO BE BROUGHT ON RECORD. ALL THE FACT RELATED TO ADDITIONAL GROUND OF APPEAL ARE EMANATIN G FROM THE RECORD OF LOWER AUTHORITIES. 5. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE HAS N OT SERIOUSLY OBJECTED FOR ADMISSION OF ADDITIONAL GROUND OF APPEAL RAISED BY ASSESSEE VIDE ITS APPLICATION DATED 27.01.2016, 10.05.2016 & 20.03.20 16. ITA NO. 4376, 4451 MUM 2010 & C.O. NO . 223 MUM 2013-TATA INTERNATIONAL LIMITED. 7 6. WE HAVE CONSIDERED THE CONTENTION OF REPRESENTATIVE OF THE PARTIES AND PERUSED THE ADDITIONAL GROUND OF APPEAL. PERUSAL OF ADDITIONAL GROUND OF APPEAL REVEALS THAT NO NEW FACTS OR CLAIM IS RAISED BY ASSESSEE. THE FACTS RELATING TO ADDITIONAL GROUND OF APPEAL ARE EMANATI NG FROM THE ORDER OF LOWER AUTHORITIES. EVEN OTHERWISE, THE ADDITIONAL G ROUNDS OF APPEAL ARE RELATED WITH THE ORIGINAL GROUND OF APPEAL RAISED E ITHER BY ASSESSEE OR BY REVENUE. 7. CONSIDERING THE POSITION UNDER THE LAW, SINCE NO NE W FACTS IS NECESSARY TO BE BROUGHT ON RECORD, THEREFORE, THE ADDITIONAL GRO UND OF APPEAL RAISED BY ASSESSEE ARE ADMITTED FOR ADJUDICATION. 8. AT THE OUTSET OF HEARING, THE LD. AR OF THE ASSESSE E SUBMITS THAT HE IS NOT PRESSING GROUND NO. 4, 5, 10 & 11. CONSIDERING THE CONTENTION/SUBMISSION OF LD. AR OF THE ASSESSEE, GROUND NO. 4, 5, 10 & 11 ARE DISMISSED AS NOT PRESSED. 9. GROUND NO.1 RELATES TO DISALLOWANCE OF EXPENDITURE BY WAY OF CLAIMS SETTLED. THE LD. AR OF THE ASSESSEE SUBMITS THAT TH IS GROUND OF APPEAL IS COVERED BY THE DECISION OF TRIBUNAL IN ASSESSEES O WN CASE FOR ASSESSMENT YEAR 2004-05 IN ITA NO. 1009 OF 2009 DATED 13.08.20 15. THE LD. AR OF THE ASSESSEE FURTHER SUBMITS THAT THE LD. CIT(A) FOLLOW ED THE ORDER OF HIS PREDECESSOR FOR ASSESSMENT YEAR 2003-04 & 2005-05. THE APPEAL FOR ASSESSMENT YEAR 2003-04 & 2004-05 HAS BEEN DECIDED BY TRIBUNAL AS ITA NO. 4376, 4451 MUM 2010 & C.O. NO . 223 MUM 2013-TATA INTERNATIONAL LIMITED. 8 STATED ABOVE VIDE ORDER DATED 13.08.2015. THUS, THI S GROUND OF APPEAL MAY BE ALLOWED IN FAVOUR OF ASSESSEE. 10. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE AFTER GOING THROUGH THE ORDER OF LD. CIT(A) AND ORDER OF TRIBUNAL FOR ASSESSMENT YEAR 2003-04 RELIED UPON THE ORDER OF LOWER AUTHORITIES. 11. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE PARTI ES AND PERUSED THE RECORD AND FIND THAT ON SIMILAR GROUND OF APPEAL, T HE CO-ORDINATE BENCH OF TRIBUNAL BY FOLLOWING THE ORDER OF ASSESSMENT YEARS 2000-01, 2001-02 & 2003-04 PASSED THE FOLLOWING ORDER: 6.1 THIS ISSUE HAS BEEN DISCUSSED BY THE AO AT PAG ES 4 & 5 OF THE ASSESSMENT ORDER. THE LD. CIT(A) HAS CONSIDERED THIS ISSUE AT PAGE 3 OF HIS ORDER. AN IDENTICAL ISSUE WAS CONSIDERED BY THE TRIBUNAL IN A .Y. 2003-04 IN ITA NO. 3016/MUM/07 AND AT PARA-8 AND 8.1 THE TRIBUNAL HAS FOLLOWED THE EARLIER ORDER OF THE TRIBUNAL FOR A.YRS 2000-01, 2001-02 AND 2002-03 . RESPECTFULLY FOLLOWING THE ORDERS OF THE CO-ORDINATE BENCH IN ASSESSEES OWN C ASE, THE DISALLOWANCE MADE BY THE AO IS DELETED. THESE GROUNDS ARE ACCORDINGLY AL LOWED. 12. CONSIDERING THE ORDER OF TRIBUNAL ON SIMILAR GROUND ON SIMILAR SET OF FACT AND RESPECTFULLY FOLLOWING THE ORDER OF CO-ORDINATE BENCH IN ASSESSEES OWN CASE, THE DISALLOWANCE MADE BY ASSESSING OFFICER IS DELETED. HENCE, THIS GROUND OF APPEAL IS ALLOWED. 13. GROUND NO.2 RELATES TO DISALLOWANCE OUT OF PAYMENT MADE TO CLUB. THE LD. AR OF THE ASSESSEE SUBMITS THAT THIS GROUND OF APPE AL IS ALSO COVERED BY HONBLE BOMBAY HIGH COURT AND DECISION OF VARIOUS B ENCHES OF TRIBUNAL IN OTIS ELEVATOR (195 ITR 682). THE LD. AR OF THE ASSE SSEE SUBMITS THAT THE ASSESSEE CLAIMED TOTAL EXPENSES OF RS. 3,52,200/- O UT OF WHICH, THE ITA NO. 4376, 4451 MUM 2010 & C.O. NO . 223 MUM 2013-TATA INTERNATIONAL LIMITED. 9 ASSESSING OFFICER ALLOWED RS. 52,000/- PAID TO DEVA S OFFICE AND REST OF THE AMOUNT OF RS. 2,99,500/- FOR SUBSCRIPTION FEES, ANN UAL CONTRIBUTION AND MEMBERSHIP OF VARIOUS CLUB AND OTHER EXPENSES PAID ON CLUB WERE DISALLOWED. THE LD. CIT(A) GRANTED PART RELIEF REST RICTING THE DISALLOWANCE TO RS. 2,65,000/-. THE LD. AR OF THE ASSESSEE SUBMITS THAT THE ISSUE IS STAND COVERED BY THE DECISION OF JURISDICTIONAL HIGH COUR T IN OTIS ELEVATOR (SUPRA). 14. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPO RTED THE ORDER OF LOWER AUTHORITIES. 15. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE PARTI ES AND PERUSED THE RECORD AND FIND THAT THE HONBLE BOMBAY HIGH COURT IN OTIS ELEVATOR (SUPRA) HELD THAT THE PAYMENT MADE TO CLUBS ARE REV ENUE IN NATURE AND ARE ALLOWABLE AS SUCH. WE HAVE FURTHER NOTED THAT IN AS SESSEES OWN CASE FOR ASSESSMENT YEAR 1996-97, 1997-98 & 1998-99, THE CO- ORDINATE BENCH OF TRIBUNAL IN ITA NO. 4976, 4977 & 4978/MUM/2005 VIDE ORDER DATED 26.03.2009 ALLOWED SIMILAR CLAIM IN FAVOUR OF ASSES SEE. THEREFORE, CONSIDERING THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 1996-97, 1997-98 & 1998-99 AND DECISION OF JUR ISDICTIONAL HIGH COURT, THIS GROUND OF APPEAL IS ALLOWED IN FAVOUR O F ASSESSEE. 16. GROUND NO.3 RELATES TO DISALLOWANCE UNDER SECTION 1 4A. THE LD. AR OF THE ASSESSEE SUBMITS THAT THE ASSESSING OFFICER MADE AD DITION/DISALLOWANCE OF RS. 4.5 CRORE ON PRO-RATA BASIS. THE ASSESSING OFFI CER ALSO FOLLOWED THE ITA NO. 4376, 4451 MUM 2010 & C.O. NO . 223 MUM 2013-TATA INTERNATIONAL LIMITED. 10 DECISION OF CIT(A)-XXXIII, MUMBAI DATED 02.01.2006. THE LD. CIT(A) AFFIRMED THE ACTION OF ASSESSING OFFICER BY FOLLOWI NG THE DECISION OF ITO VS. DAGA CAPITAL [(2009) 117 ITD 169 (MUM SB)]. THE LD. AR OF THE ASSESSEE SUBMITS THAT IT IS AN ADMITTED POSITION UN DER LAW THAT RULE 8D IS PROSPECTIVE IN NATURE AND CANNOT BE MADE APPLICABLE FOR ASSESSMENT YEARS PRIOR TO A.Y. 2008-09. THE LD. AR FURTHER SUBMITS T HAT IN ASSESSEES OWN CASE FOR SIMILAR DISALLOWANCE, THE CO-ORDINATE BENC H IN APPEAL FOR A.Y. 2000-01, 2001-02 & 2002-03 IN ITA NO. 3957, 3958 & 3959/MUM/2006 DATED 08.06.2012, RESTRICTED THE DISALLOWANCE UNDER SECTION 14A TO 5% OF THE EXEMPT INCOME. FURTHER IN A.Y. 2004-05 ON SIMIL AR DISALLOWANCE, THE TRIBUNAL FOLLOWED THE DECISION IN A.Y. 2000-01 TO 2 002-03 IN ITA NO. 3957 TO 3959/MUM/2006 IN ITA NO. 1009/MUM/2009 DATED 13. 08.2015. THE LD. AR INVITED OUR ATTENTION ON THE SUMMARIZED COMPARAT IVE BALANCE-SHEET FILED AT PAGE NO. 29 OF PAPER BOOK (PB) AND WOULD SUBMIT THAT NO BORROWED COST IS INCURRED BY ASSESSEE. THE LD. AR SUBMITS THAT TH E ORDER OF TRIBUNAL IN EARLIER YEARS MAY BE FOLLOWED FOR MAKING DISALLOWAN CE UNDER SECTION 14A. 17. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE RELIE D UPON THE ORDER OF LOWER AUTHORITIES. 18. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE PARTI ES, PERUSED THE RECORD. WE HAVE NOTED THAT IN ASSESSEES OWN CASE ON IDENTI CAL ISSUES HAVE BEEN CONSIDERED BY TRIBUNAL FROM A.Y. 2000-01 TO 2002-03 AND 2004-05 WHEREIN THE ASSESSING OFFICER IS DIRECTED TO COMPUTE THE DI SALLOWANCE UNDER SECTION ITA NO. 4376, 4451 MUM 2010 & C.O. NO . 223 MUM 2013-TATA INTERNATIONAL LIMITED. 11 14A AT 5% OF THE EXEMPT INCOME. NO MATERIAL CHANGE IN THE FACT IS BROUGHT TO OUR NOTICE FOR THE YEAR UNDER CONSIDERATION. THE REFORE, FOLLOWING THE ORDER OF TRIBUNAL FOR A.Y. 2000-01 TO 2002-03, WHIC H WAS FOLLOWED IN A.Y. 2004-05, HENCE, WE DIRECT THE ASSESSING OFFICER TO COMPUTE THE DISALLOWANCE UNDER SECTION 14A AT 5% OF EXEMPT INCO ME. IN THE RESULT, THIS GROUND OF APPEAL IS PARTLY ALLOWED. 19. GROUND NO.6 TO 9 RELATES TO TRANSFER PRICING ADJUST MENT WITH RESPECT TO ISSUANCE OF LETTER OF COMFORT. THIS ISSUE IS INTE RCONNECTED WITH THE GROUNDS OF APPEAL RAISED BY REVENUE IN ITS CROSS AP PEAL. THE LD. AR OF THE ASSESSEE SUBMITS THAT LD. CIT(A) DELETED THE ADJUST MENT AGAINST WHICH THE REVENUE HAS FILED ITS CROSS APPEAL. THE LD. AR OF T HE ASSESSEE SUBMITS THAT THE ASSESSEE ISSUED LETTER OF COMFORT TO BANKERS OF ASSOCIATED ENTERPRISES (AE) OF ASSESSEE. THE ASSESSEE NOT REPORTED THIS TR ANSACTION (ISSUANCE OF LETTER OF COMFORT) IN ITS TRANSFER PRICING STUDY RE PORT (TPSR). THE ASSESSING OFFICER MADE REFERENCE TO TRANSFER PRICIN G OFFICER (TPO) FOR COMPUTATION OF ARMS LENGTH PRICE (ALP) OF TRANSACTI ON REPORTED BY ASSESSEE WITH ITS AE IN ITS REPORT FURNISHED UNDER FORM 3CEB. THE TPO NOTED THAT THE ASSESSEE HAS NOT REPORTED ABOUT ISSU ANCE OF LETTER OF COMFORT TO THE BANKER OF AE. THE TPO ISSUED SHOW CAUSE NOTI CE FOR DETERMINATION OF ALP WITH REGARD TO ISSUANCE OF LETTER OF COMFORT . THE ASSESSEE FILED ITS REPLY VIDE REPLY DATED 07.01.2008 & 18.01.2008. IN REPLY TO THE SHOW-CAUSE, THE ASSESSEE SUBMITTED THAT NO ADJUSTMENT IS OUGHT TO BE MADE AS LETTER OF ITA NO. 4376, 4451 MUM 2010 & C.O. NO . 223 MUM 2013-TATA INTERNATIONAL LIMITED. 12 COMFORT WOULD NOT REPRESENT INTERNATIONAL TRANSACTI ON WITHIN THE MEANING OF SECTION 92B(1). IT WAS FURTHER STATED THAT MERELY A N UNEQUIVOCAL STATEMENT OF INTENTION EXPRESSED BY ASSESSEE NOT BEING BILATE RAL, IS NOT A TRANSACTION AND LETTER IS A PRIVATE AFFAIR BETWEEN THE ASSESSEE AND THE LENDER/BANKER (NON ASSOCIATE AND IS NOT A TRANSACTION BETWEEN TWO ASSO CIATE). THE CONTENTION OF ASSESSEE WAS NOT ACCEPTED BY TPO BY TAKING VIEW THA T TRANSACTION RELATING TO PROVISION FOR LETTER OF COMFORT AND PAYMENT OF C OMMISSION FOR THE SERVICES BY AE TO THE ASSESSEE WOULD FALL WITHIN TH E DEFINITION IN TERM OF INTERNATIONAL TRANSACTION 92B OF THE ACT. THE TPO MADE ADJUSTMENT OF RS. 8.70 CRORE ON ACCOUNT OF ISSUANCE OF LETTER OF COMF ORT. THE LD. CIT(A) AFTER APPRECIATING THE CONTENTION OF ASSESSEE CONCLUDED T HAT ISSUANCE OF LETTER OF COMFORT DOES NOT CONSTITUTE AN INTERNATIONAL TRANSA CTION. THE LD. CIT(A) APPRECIATED THE DIFFERENCE BETWEEN CORPORATE GUARAN TEE AND LETTER OF COMFORT. THE LD. AR FURTHER SUBMITS THAT THERE IS A BASIC DIFFERENCE BETWEEN CORPORATE GUARANTEE AND LETTER OF COMFORT. IN A LET TER OF COMFORT, THE PARTY ISSUES ONLY A LETTER THAT A SUBSIDIARY OR GROUP COM PANY WOULD COMPLY TERM OF FINANCIAL TRANSACTION AND HAVE NO OBLIGATION TO INDEMNIFY, HOWEVER, IN CASE OF CORPORATE GUARANTEE, THE PARTY ISSUING GUAR ANTEE IS UNDER OBLIGATION TO THE LENDER. THE LD. AR FURTHER SUBMITS THAT INFA CT THIS GROUND OF APPEAL IS ALSO COVERED BY THE DECISION OF TRIBUNAL IN CASE OF THE INDIA HOTEL COMPANY LTD. VS. DCIT IN ITA NO. 9087/MUM/2010 DATE D 06.09.2019, WHEREIN SIMILAR GROUND OF APPEAL WAS CONSIDERED AND BY FOLLOWING THE ITA NO. 4376, 4451 MUM 2010 & C.O. NO . 223 MUM 2013-TATA INTERNATIONAL LIMITED. 13 DECISION OF EARLIER YEARS IN THAT ASSESSEE AND DECI SION OF HONBLE KARNATAKA HIGH COURT IN UNITED BRAVERIES HOLDING LTD. KARNATA KA STATE INDUSTRIAL INVESTMENT AND DEVELOPMENT CORPORATION LTD. (M.F.A. NO. 4234 OF 2007 (SFC), WHEREIN IT WAS HELD THAT LETTER OF COMFORT M ERELY INDICATES THE PARTIES ASSURANCE THAT RESPONDENT WOULD COMPLY WIT H THE TERM OF FINANCIAL TRANSACTION WITHOUT GUARANTEEING PERFORMANCE IN THE EVENT OF DEFAULT. 20. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPP ORTED THE ORDER OF ASSESSING OFFICER/TPO. THE LD. DR SUBMITS THAT THE ASSESSEE RENDERED SERVICES TO ITS AE BY ISSUING LETTER OF COMFORT TO THE LENDER OF ITS AE AND THEREFORE, THE ISSUANCE OF LETTER OF COMFORT IS AN INTERNATIONAL TRANSACTION AS HELD BY HONBLE BOMBAY HIGH COURT IN CIT VS. IN EVE REST KENTO CYLINDERS LTD. [378 ITR 57]. THE LD. DR FURTHER SUBMITS THAT AFTER AMENDMENT IN EXPLANATION IN SECTION 92B, ANY CAPITAL FINANCING, LENDING ON GUARANTEE HAVE BECOME INTERNATIONAL TRANSACTION. 21. IN THE REJOINDER SUBMISSION, THE LD. AR OF THE ASSE SSEE SUBMITS THAT IN EVEREST KENTO CYLINDERS LTD. THERE WAS NO QUESTION BEFORE THE HONBLE HIGH COURT, IF GIVING A CORPORATE GUARANTEE IS AN I NTERNATIONAL TRANSACTION OR NOT. IN WITHOUT PREJUDICE SUBMISSION, THE LD. AR FU RTHER SUBMITS THAT THE CO- ORDINATE BENCH OF MUMBAI TRIBUNAL IN SIRO CLINPHARM (P.) LTD. VS. DCIT [(2017) 88 TAXMANN.COM 338 (MUM. TRIB.)] THAT AMEND MENT IN EXPLANATION TO SECTION 92B BY FINANCE ACT IS TO BE TREATED AS E FFECTIVE AT THE BEST FROM ITA NO. 4376, 4451 MUM 2010 & C.O. NO . 223 MUM 2013-TATA INTERNATIONAL LIMITED. 14 A.Y. 2013-14 AND SO ISSUANCE OF CORPORATE GUARANTEE PRIOR TO 01.04.2012 DOES NOT COME WITHIN THE DEFINITION OF INTERNATIONA L TRANSACTION. 22. WE HAVE CONSIDERED THE SUBMISSION OF LD. REPRESENTA TIVE OF THE PARTIES AND PERUSED THE ORDER OF LOWER AUTHORITIES. DURING THE REFERENCE PENDING BEFORE TPO, IT WAS NOTED BY TPO THAT ASSESSEE HAS ISSUED A LETTER OF COMFORT TO THE BANKER OF AE OF ASSESSEE. THE TPO HAS NOTED THE REL EVANT CLAUSE OF LETTER OF COMFORT IN PARA-3.5.8 OF ITS ORDER, CONSISTING T HE FOLLOWING UNDERTAKING/ASSURANCE: A) IT WOULD BE ITS ENDEAVOR NOT TO PERMIT THE AE TO ENTER INTO LIQUIDATION (WHETHER VOLUNTARY OR COMPULSORY); B) TO ENTER INTO AN ARRANGEMENT WITH ITS CREDITORS WITHOUT ITS LIABILITY TO THE BANK AND ITS SUBSIDIARY AND / OR ASSOCIATED COMPANIES BE ING COMPLETELY DISCHARGED; C) THE ASSESSEE WILL NOT DISPOSE OFF ANY SHARES IN THE AE WHICH WOULD RESULT IN ITS SHAREHOLDING IN THE AE BEING REDUCED TO A MINOR ITY AND NON-CONTROLLING SHAREHOLDING WITHOUT FIRST HAVING RECEIVED THE BANK 'S WRITTEN CONSENT OR HAVING ENSURED THAT THE AE'S LIABILITY TO THE BANK IS DISC HARGED IN FULL; D) IT WOULD BE ITS ENDEAVOR THAT AE AT ALL TIMES HA S' .ADEQUATE FINANCIAL RESOURCES TO MEET ITS OBLIGATIONS PROMPTLY AND IT SHALL BE IT S ENDEAVOR THAT AE WILL BE IN A FINANCIAL POSITION TO PAY THE MONEYS FROM TIME TO T IME DUE TO THE BANK; E) IT WOULD AGREE NOT TO PRESS FOR REPAYMENT OF AMO UNTS DUE TO IT, IN PREFERENCE TO THE AMOUNTS DUE BY THE AE TO THE BANK, FROM TIME TO TIME; F) THE ASSESSEE WOULD FURNISH ITS ANNUAL AUDITED F INANCIAL STATEMENT OF ACCOUNTS AND WILL PROCURE THAT THE AE WILL ALSO FURNISH WITH ANNUAL AUDITED INFORMATION AS MAY BE REASONABLY REQUIRED. 23. THE TPO CONCLUDED THAT THIS LETTER OF COMFORT PROVI DE BENEVOLENT ADVANTAGE TO THE AES IN OBTAINING CREDIT FACILITY F ROM THE BANKS ON BETTER TERM. THE TPO TREATED THE LETTER OF COMFORT AS A GU ARANTEE. THE TPO BY TAKING VIEW THAT TRANSACTION RELATING TO PROVISION FOR LETTER OF COMFORT AND ITA NO. 4376, 4451 MUM 2010 & C.O. NO . 223 MUM 2013-TATA INTERNATIONAL LIMITED. 15 PAYMENT OF COMMISSION FOR THE SERVICES BY AE TO THE ASSESSEE WOULD FALL WITHIN THE DEFINITION IN TERM OF INTERNATIONAL TRAN SACTION 92B OF THE ACT. THE TPO MADE ADJUSTMENT OF RS. 8.70 CRORE ON ACCOUN T OF ISSUANCE OF LETTER OF COMFORT. THE TPO PROCEEDED TO DETERMINE A RMS LENGTH PRICE (ALP) OF SUCH GUARANTEE COMMISSION AND SELECTED COM PARABLE UNCONTROLLED PRICE METHOD (CUP) AS MOST APPROPRIATE METHOD. THE TPO NOTED THAT HSBC BANK CHARGED FEES RANGING FROM .15% TO 3% OF THE VALUE OF GUARANTEE GIVEN TO ITS CUSTOMER DEPENDING UPON R ISK INVOLVED. THE TPO DETERMINED ARMS LENGTH COMMISSION @ 50% OF 3% AND A RRIVED AT THE FIGURE OF 1.5% AND PROPOSED ADJUSTMENT OF RS. 8,70, 62,438/-. THE TPO MADE THE ADJUSTMENT IN THE FOLLOWING MANNER: SUMMARY OF LETTER OF COMFORT/AWARENESS ISSUED WITH CORRESPONDING UTILIZATION BY AE AS OF 31/03/2005 S. NO. LOC ISSUED BY TIL TO NAME OF BANK AE VALUE OF LOC ISSUED FOR US $ MILL EXCHANGE RATE 1US$= RS. 43,805 COMMISSION RATE @ 1.5% 1 STANDARD CHARTERED BANK TATA SOUTH EAST ASIA LTD. , HONGKONG 5.00 21,90,25,000 32,85,373 2 STANDARD CHARTERED BANK TATA ZAMBIA LTD., ZAMBIA 6.50 28,47,32,500 42,70,387.5 3 STANDARD CHARTERED BANK TATA INTERNATIONAL (PTY) LTD., AUSTRALIA 9.00 39,42,45,000 59,13,675 4 BANK OF INDIA TATA SOUTH EAST ASIA LTD. , HONGKONG 22.50 98,56,12,500 1,47,84,187.5 5 STATE BANK OF INDIA TATA AFRICA HOLDINGS LTD. , SOUTH AFRICA 30.00 131,41,50,000 1,97,12,250 6 HSBC TATA SOUTH ASIA LTD., HONGKONG 48.00 210,26,40,000 3,15,39,600 7 HSBC TATA WEST ASIA FZE, UAE 6.50 28,47,32,500 42,70,987.5 8 BANK OF BARODA TATA SOUTH EAST ASIA LTD., HONGKONG 5.00 21,90,25,000 32 ,85,375 TOTAL 132.50 580,41,62,500 8,70,62,437.5 R/O 8,70,62,438 ITA NO. 4376, 4451 MUM 2010 & C.O. NO . 223 MUM 2013-TATA INTERNATIONAL LIMITED. 16 24. BEFORE LD. CIT(A), THE ASSESSEE MADE ELABORATE SUBM ISSION AND EXPLAINED THE DIFFERENCE BETWEEN LETTER OF COMFORT WITHIN INT RA GROUP AS WELL AS THE CORPORATE GUARANTEE. THE LD. CIT()A) AFTER CONSIDER ING THE SUBMISSION OF ASSESSEE CONCLUDED THAT BY ISSUING LETTER OF COMFOR T TO THE BANKERS OF AE, THE ASSESSEE DID NOT INCURRED ANY COST. THE ISSUANC E OF LETTER OF COMFORT BY ASSESSEE HAVE NO BEARING ON THE PROFIT, INCOME OR L OSS AS THE ASSESSEE DID NOT INCUR ANY COST OR EXPENDITURE FOR ISSUING SUCH LETTER OF COMFORT AND IT DOES NOT CONSTITUTE INTERNATIONAL TRANSACTION UNDER SECTION 92B OF THE ACT. THE LD. CIT(A) CONCLUDED THAT THERE IS A FUNDAMENTA L BETWEEN GUARANTEE AND LETTER OF COMFORT. GUARANTEE IS A LEGAL ENFORCE ABLE; HOWEVER, LETTER OF COMFORT IS NOT. WE HAVE NOTED THAT HONBLE KARNATAK A HIGH COURT IN UNITED BRAVERIES (HOLDING) LTD. VS. KARNATAKA STATE INDUSTRIAL INVESTMENT AND DEVELOPMENT CORPORATION (SUPRA) HELD THAT LETTE R OF COMFORT MERELY INDICATES THE APPELLANTS ASSURANCE THAT RESPONDENT WOULD COMPLY THE TERM OF FINANCIAL TRANSACTION WITHOUT GUARANTEEING PERFO RMANCE IN THE EVENT OF DEFAULT. THE CO-ORDINATE BENCH OF TRIBUNAL IN INDIA HOTELS CO. LTD. (SUPRA) ON SIMILAR GROUND OF APPEAL BY FOLLOWING THE DECISI ON OF HONBLE KARNATAKA HIGH COURT HELD THAT LETTER OF COMFORT DOES NOT CON STITUTE INTERNATIONAL TRANSACTION. SO FAR AS CONTENTION OF LD. DR FOR THE REVENUE THAT AFTER AMENDMENT IN EXPLANATION TO SECTION 92B IS CONCERNE D, WE HAVE NOTED THAT CO-ORDINATE BENCH IN SIRO CLINPHARM P. LTD. (SUPRA) HELD THAT AMENDMENT IN EXPLANATION TO SECTION 92B BY FINANCE ACT, EFFEC TIVE FROM 01.04.2002 IS ITA NO. 4376, 4451 MUM 2010 & C.O. NO . 223 MUM 2013-TATA INTERNATIONAL LIMITED. 17 TO BE TREATED AS EFFECTIVE AT THE BEST FROM A.Y. 20 13-14. THUS, IN VIEW OF THE AFORESAID DISCUSSION, WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER PASSED BY LD. CIT(A). IN THE RESULT, GROUND NO. 6 T O 9 (ADDITIONAL GROUND) OF ASSESSEES APPEAL ARE ALLOWED AND CONSEQUENTLY THE GROUNDS OF APPEAL RAISED BY REVENUE ARE DISMISSED. 25. GROUND NO.12 RELATES TO JURISDICTION OF ADDL. COMMI SSIONER. WE HAVE NOTED THAT NO SUBMISSION ON GROUND NO. 12 WAS MADE BY LD. AR OF THE ASSESSEE. THEREFORE, THIS GROUND OF APPEAL IS TREATED AS NOT PRESSED AND RESULTANTLY DISMISSED. GROUND NO. 13 RELATES TO DISALLOWANCE OF INTEREST EXPENDITURE UNDER SECTION 14A. CONSIDERING THE FACT THAT WE HAV E RESTRICTED THE DISALLOWANCE UNDER SECTION 14A TO 5% OF EXEMPT INCO ME, THEREFORE, FURTHER ADJUDICATION ON THIS GROUND OF APPEAL HAVE BECOME A CADEMIC. 26. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALL OWED AND APPEAL OF THE REVENUE IS DISMISSED. C.O. NO. 223/MUM/2013 27. THE LD. AR OF THE ASSESSEE SUBMITS THAT HE IS NOT P RESSING THE GROUNDS OF APPEAL RAISED IN THE CROSS OBJECTION AS THE ASSESSE E HAS RAISED ADDITIONAL GROUND OF APPEAL. CONSIDERING THE SUBMISSION OF LD. AR OF THE ASSESSEE, THE CROSS OBJECTION FILED BY ASSESSEE IS DISMISSED AS N OT PRESSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29/01/2020. SD/- S D/- S. RIFAUR RAHMAN PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 29.01.2020 ITA NO. 4376, 4451 MUM 2010 & C.O. NO . 223 MUM 2013-TATA INTERNATIONAL LIMITED. 18 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR J BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI