ACIT, New Delhi V. M/s. Ochoa Laboratories Ltd., New Delhi

ITA 4530/DEL/2013

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2942 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 22-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 31-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R SENAPATI
• Assessee Lawyers: P N MONGA ADV SH MANU MONGA
• Keywords: Reopening of assessment; Depreciation; Difference of opinion; Assessment record; Reason to believe; Change of opinion; Revenue expenditure; Reassessment proceedings; Capital expenditure
• Section: 37(1); 32; 147; 148; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : E NEW DELHI BEFORE SHRI R.K.PANDA , ACCOUNTANT MEMBER AND SMT. BEENA A PILLAI, JUDICIAL MEMBER ITA NO. 6435 /DEL/2013 A.Y. 2007 - 08 OCHOA LABORATORIES LTD. E 360, GREATER KAILASH II NEW DELHI 110 048 PAN: AAACO1370J VS . DCIT, CIRCLE 13(1) NEW DELHI ITA NO. 2 4 1/DEL/201 4 A.Y. 20 07 - 08 ACIT, CIRCLE 13(1) NEW DELHI VS . OCHOA LABORATORIES LTD. E 360, GREATER KAILASH II NEW DELHI 110 048 ITA NO. 4543 /DEL/2013 A.Y. 200 9 - 10 OCHOA LABORATORIES LTD. E 360, GREATER KAILASH II NEW DELHI 110 048 PAN: AAACO1370J VS . DCIT, CIRCLE 13(1) NEW DELHI ITA NO. 4530 /DEL/201 3 A.Y. 20 09 - 10 ACIT, CIRCLE 13(1) NEW DELHI VS . OCHOA LABORATORIES LTD. E 360, GREATER KAILASH II NEW DELHI 110 048 (APPELLANT) (RESPONDENT) A SSESSEE BY SH. P.N.MONGA, ADV. SH. MANU MONGA, ADV. DEPARTMENT BY SH. S.R.SENAPATI, SR.D.R. DATE OF HEARING 2 1.02. 2018 DATE OF PRONOUNCEMENT 14.03.18 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER PRESENT C ROSS A PPEALS FILED BY ASSESSEE AS WELL AS REVENUE AGAINST ORDER DATED 15/10/13 AND 28/05/13 PASSED BY ITA 6435/DEL/2013 A.Y. 2007 - 08 OCHOA LABORATORIES LTD. VS. DCIT ITA 241/DEL/2014 A.Y. 2007 - 08 ACIT VS. OCHOA LABORATORIES LTD. ITA 4543/DEL/2013 A.Y. 2009 - 10 OCHOA LABORATORIES LTD. VS. DCIT ITA 4530/DEL/2013 A.Y. 2009 - 10 ACIT VS. OCHOA LABORATORIES LTD. 2 LD.CIT(A) - 16, NEW DELHI FOR ASSESSMENT YEAR S 2007 - 08 AND 2009 - 10 RESPECTIVELY ON THE FOLLOWING GROUNDS OF APPEAL: ASSESSMENT YEAR 2007 - 08 ITA NO . 6435/ D EL/2013 GROUNDS OF APPEAL 1. THAT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) XVI, NEW DELHI HAS LEGALLY AND FACTUALLY ERRED IN SUSTAINING THE PROCEEDINGS INITIATED UNDER SECTION 147 OF THE INCOME - TAX ACT, 1961 BY THE DY.CIT CIRCLE 13(1), NEW DELHI.', 2. THAT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) XVI, NEW DELHI, HAS FAILED TO APPRECIATE THE FACT THAT THE CONDITION PRECEDENT FOR INVOKING THE JURISDICTION UNDER SECTION 147 IS CONSPICUOUSLY ABSENT AND THE ASSUMPTION OF JURISDICTION IS DEVOID OF ANY LEGAL SANCTITY. 3. THAT, THE RE LIANCE PLACED ON THE DECISIONS OF DELHI HIGH COURT IS MISPLACED AND HAS NO APPLICABILITY TO THE FACTS AND CIRCUMSTANCES OF THE CASE. THE INTERPRETATION PLACED BY SUPREME COURT ON SECTION 147 HAS NOT AT ALL ADVERTED TO WHICH SQUARELY COVER THE CASE OF THE A PPELLANT. 4.THAT, THE REASON RECORDED BY THE DY.CIT WAS VAGUE, WHIMSICAL, ERRONEOUS AND BASED UPON DOUBTS AND SUSPICION. THE PROCEEDINGS INITIATED ARE ARBITRARY, CAPRICIOUS AND UNWARRANTED IN THE EYES OF L A W. WITHOUT PREJUDICE TO ABOVE 5.A) THAT , THE L EARNED CIT (A) XVI, HAS GONE WRONG IN SUSTAINING THE ADDITION OF RS.14,87,323/ - UNDER THE HEAD 'LEGAL & PROFESSIONAL EXPENSES' TREATING THE SAME TO BE OF CAPITAL IN NATURES. B) THAT, THE ENTIRE EXPENDITURE HAS BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND SAME QUALIFY FOR DEDUCTIONS UNDER SECTION 37(1) OF THE I.T. ACT. 6.A) THAT, THE LEARNED CIT (A) XVI, HAS FURTHER GONE WRONG IN SUSTAINING THE ADDITION OF RS.20,96,878/ - UNDER THE HEAD' FEES & SUBSCRIPTION' TREATING THE SAME TO BE O F CAPITAL IN NATURE. ITA 6435/DEL/2013 A.Y. 2007 - 08 OCHOA LABORATORIES LTD. VS. DCIT ITA 241/DEL/2014 A.Y. 2007 - 08 ACIT VS. OCHOA LABORATORIES LTD. ITA 4543/DEL/2013 A.Y. 2009 - 10 OCHOA LABORATORIES LTD. VS. DCIT ITA 4530/DEL/2013 A.Y. 2009 - 10 ACIT VS. OCHOA LABORATORIES LTD. 3 ITA NO. 241/ D EL/2014 1. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN REDUCING THE DISALLOWANCE OF DEFERRED REVENUE EXPENDITURE FROM RS.1,83,96,739/ - TO RS.35,84,201/ - TREATING THE SAME AS REVENUE EXPEN SES WITHOUT APPRECIATING THE REASONS MENTIONED BY THE A O IN THE ASSESSMENT ORDER ITSELF. 1.1 ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN REDUCING THE DISALLOWANCE OF DEFERRED REVENUE EXPENDITURE FROM RS.1,83,96,739/ - TO RS.35,84,201/ - BY IGNORING THE FACT THAT THE ASSESSEE HAD ITSELF ADMITTED IN ITS VARIOUS REPLIES THAT ALL THE EXPENSES MENTIONED ABOVE WERE MADE IN CREATING MARKET SURVEYS AND DEVELOPMENT OF BRANDS THAT ARE VERY MUCH OF CAPITAL NATURE. ' 1.2 ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN REDUCING THE DISALLOWANCE OF DEFERRED REVENUE EXP ENDITURE FROM RS.1,83,96,739/ - TO RS.35,84,201/ - BY IGNORING THE FACT THAT THE REMAINING EXPENSES AMOUNTING TO RS. 1,48,12,538/ - IS AN AMOUNT SPENT TO ACQUIRE INTANGIBLE ASSET WHICH WILL BRING LONG LASTING BENEFIT IN THE SUCCEEDING YEARS. 1.3 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN REDUCING THE DISALLOWANCE OF DEFERRED REVENUE EXPENDITURE IGNORING THE OBSERVATION OF THE A O THAT THE EXPENSES ON ADVERTISEMENT IN ANY SOUVENIR, BROCHURE, TRACT, PAMPHLET ET C . PUBLISHED ARE NOT REVENUE EXPENDITURE AND NOT ALLOWABLE UNDER SECTION 37 OF THE ACT. 2.THE APPELLANT CRAVES TO BE ALLOWED TO ADD ANY FRESH GROUNDS OF APPEAL AND/OR DELETE OR AMEND ANY OF THE GROUNDS OF APPEAL. ASSESSMENT YEAR 2009 - 10 ITA NO. 4543/ D EL/2013 1 .A) THAT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) XVI, HAS LEGALLY AND FACTUALLY ERRED IN SUSTAINING THE DISALLOWANCE OF RS.45,60,824/ - UNDER THE HEAD' SALES PROMOTION' B) THAT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)XVI, FAILED TO APPRE CIATE THE FACT THAT ENTIRE MATERIAL IN THE FORM OF ITA 6435/DEL/2013 A.Y. 2007 - 08 OCHOA LABORATORIES LTD. VS. DCIT ITA 241/DEL/2014 A.Y. 2007 - 08 ACIT VS. OCHOA LABORATORIES LTD. ITA 4543/DEL/2013 A.Y. 2009 - 10 OCHOA LABORATORIES LTD. VS. DCIT ITA 4530/DEL/2013 A.Y. 2009 - 10 ACIT VS. OCHOA LABORATORIES LTD. 4 EVIDENCE WAS PLACED BEFORE THE ASSESSING AUTHORITY TO JUSTIFY THE ADMISSIBILITY OF THE EXPENDITURE UNDER THE H EAD' SALES PROMOTION' C) THAT, THE LEARNED CIT(A) DID NOT AFFORD SUFFICIENT OPPORTUNITY TO ENA BLE APPELLANT TO ADDUCE EVIDENCE IN SUPPORT OF ITS CLAIM OF DEDUCTION UNDER THE H EAD 'SALES PROMOTION' D) THAT, THE PRINCIPLE OF RES - JUDICATA IS APPLICABLE TO THE FACTS OF THE PRESENT CASE AND LEARNED CIT (A) SHOULD HAVE FOLLOWED THE ORDER OF THE PRECEDIN G YEARS PASSED B Y PREDECESSOR ON THE SAID ISSUE. 2.THAT, THE LEARNED CIT(A) HAS GONE WRONG IN SUSTAINING THE IMPUGNED ACTION OF ACIT IN RESTRICTING DEPRECIATION ON UPS, RACK AND BATTERY @ 15% AS AGAINST THE CLAIM OF 60% BY THE APPELLANT. 3. THAT, THE ORD ER OF THE CIT(A)XVI IS BAD IN LAW AND AGAINST THE FACTS OF THE CASE. 4. THAT, THE APPELLANT CRAVE LEAVE FOR THE AMENDMENT AND ALSO TO RAISE ADDITIONAL GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING. ITA NO. 4530/ D EL/2013 1 . THE LD.CIT(A) HAS ERRED IN L AW AND ON FACTS IN DELETING THE ADDITION MADE BY THE A.O. UNDER SECTION 2(24)( X ) OF THE INCOME TAX ACT 1961 AMOUNTING TO RS.29,44,538/ - ; 2 . THE LD.CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER AMOUNTING TO RS. 21,64,588/ - BEING EXCESS PROVISION MADE UNDER THE HEAD OF FRINGE BENEFIT TAX WITHOUT APPRECIATING THE FACT THAT AS PER REPORT OF STATUTO RY AUDITOR THE SAID AMOUNT WAS PENDING FOR MORE THAN SIX MONTHS AND THE ASSESSEE COMPANY COULD NOT FURNISH ANY SUPPORTING DOCUMENTS TO SHOW IT WAS PAID WITHIN DUE TI ME; 3 . THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN NOT CLARIFYING IN HIS ORDER WHETHER ANY SUPPORTING DOCUMENTS OR PROOF OF PAYMENT OF STATUTORY LIABILITIES WITHIN DUE TIME WERE SUBMITTED BY THE ASSESSEE COMPANY DURING APPELLATE PROCEEDINGS AND IF YES, NO REPORT WAS ASKED FROM THE ASSESSING OFFICER IN THIS REGARD; ITA 6435/DEL/2013 A.Y. 2007 - 08 OCHOA LABORATORIES LTD. VS. DCIT ITA 241/DEL/2014 A.Y. 2007 - 08 ACIT VS. OCHOA LABORATORIES LTD. ITA 4543/DEL/2013 A.Y. 2009 - 10 OCHOA LABORATORIES LTD. VS. DCIT ITA 4530/DEL/2013 A.Y. 2009 - 10 ACIT VS. OCHOA LABORATORIES LTD. 5 4 . THE APPELLANT CRAVES TO BE ALLOWED TO ADD ANY FRESH GROUNDS OF APPEAL AND/OR DELETE OR AMEND ANY OF THE GROUNDS OF APPEAL. 2. BRIEF FACTS OF THE CASE ARE AS UNDER: ASST. YR. 2007 - 08 AS SESSEE FILED ITS RETURN OF INCOME ON 31/10/07 DECLARING LOSS OF RS.24,22,907/ - . THE ASSESSMENT WAS FRAMED UNDER SECTION 143 (3) OF THE INCOME TAX ACT, 1961 (THE ACT) , VIDE ORDER DATED 24/12/2009 WHEREIN INCOME WAS DETERMINED AT RS.42,10,920/ - BY MAKING VARIOUS ADDITIONS/DISALLOWANCES. AGGRIEVED BY THE ADDITIONS MADE BY LD.AO, ASSESSEE PREFERRED APPEAL BEFORE LD.CIT(A) WHO ALLOWED PARTIAL RELIEF. AGAINST THE ORDER O F LD.CIT(A) REVENUE AS WELL AS ASSESSEE PREFERRED APPEAL S BEFORE THE TRIBUNAL. THIS T RIBUNAL V IDE CONSOLIDATED ORDER DATED 25/08/17 PASSED ORDER FOR ASSESSMENT YEAR 2007 - 08 AND 2008 - 09. BE THAT AS IT MAY , WHILE THE APPEAL WAS PENDING BEFORE LD. CIT (A) I N FIRST ROUND OF ASSESSMENT PROCEEDINGS, LD. AO ISSUED NOTICE DATED 26/03/12 UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 (THE ACT) BY RECORDING THE FOLLOWING REASONS: 3. THE PERUSAL OF ASSESSMENT RECORDS OF M/S OCHOA LABORATORIES LTD. FOR THE A.Y. 200 7 - 08 REVEALED THAT AS PER COMPUTATION, ASSESSEE HAS CLAIMED DEFERRED REVENUE EXPENDITURE OF RS.1,83,96,739/ - INSTEAD OF RS.1,21,14,765/ - . THE MISTAKE RESULTED IN UNDER ASSESSMENT OF LOSS OF RS.62,81,974/ - INVOLVING POTENTIAL TAX OF RS.21,14,512/ - . I, THER EFORE, HAVE REASONS TO BELIEVE THAT ON ACCOUNT OF FAILURE ON THE PART OF ASSESSEE TO DISCLOSE TRULY AND FULLY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT FOR THE A.Y. 2007 - 08 AN INCOME OF ITA 6435/DEL/2013 A.Y. 2007 - 08 OCHOA LABORATORIES LTD. VS. DCIT ITA 241/DEL/2014 A.Y. 2007 - 08 ACIT VS. OCHOA LABORATORIES LTD. ITA 4543/DEL/2013 A.Y. 2009 - 10 OCHOA LABORATORIES LTD. VS. DCIT ITA 4530/DEL/2013 A.Y. 2009 - 10 ACIT VS. OCHOA LABORATORIES LTD. 6 RS.62,81,974/ - HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF PROVISO TO S.147 OF THE ACT. 2.1. APPELLANT FILED O BJECTIONS FOR REOPENING OF ASSESSMENT CHALLENGING THE VERY JURISDICTION OF ISSUING NOTICE UNDER SECTION 148 OF THE A CT. IT WAS SUBMITTED THAT THERE EXISTED NO REASON TO BELIEVE THAT INCOME HA S ESCAPED ASSESSMENT . 2.2. LD. AO REJECTED THE SUBMISSIONS ADVANCED BY ASSESSEE VIDE ORDER DATED 28/01/13 WHEREIN IT IS HELD THAT ASSESSEE S CASE FALLS WITHIN THE PURVIEW OF EXPLANATION 2 TO S ECTION 147, WHEREIN THE ACT STIPULATES CIRCUMSTANCES IN WHICH I NCOME CHARGEABLE TO TAX SHALL BE DEEMED TO HAVE ESCAPED ASSESSMENT. THE LD. AO WAS OF THE OPINION THAT SUB CLAUSE (C) TO EXPLANATION 2 TO INCLUDE CASES, WHEREIN INCOME CHARGEABLE TO TAX HAS BEEN UNDER ASSESSED OR ASSESSED AT TOO LOW RATE OR CASES IN WHI CH INCOME HAS BEEN MADE THE SUBJECT OF EXCESSIVE RELIEF UNDER THE A CT WHERE EXCESSIVE LOSS OR DEPRECIATION ALLOWANCE OR ANY OTHER ELEMENTS UNDER THE A CT HA VE BEEN COMPUTED. LD. AO PLACED RELIANCE UPON THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF CA LCUTTA DISCOUNT COMPANY LTD VS. ITO REPORTED IN (1961) 41 ITR 191 WHEREIN HON BLE COURT HAD HELD THAT: WHILE IT WAS THE DUTY OF THE ASSESSEE TO DISCLOSE ALL FACTS WHICH HAD A BEARING ON THE QUESTION, WHAT INFERENCE SHOULD BE DRAWN FROM THE FACTS SO DISCLO SED WAS A MATTER TO BE EXAMINED BY THE INCOME TAX OFFICER. THE COURT FURTHER HELD THAT THE INCOME TAX OFFICER COULD ISSUE A NOTICE FOR REOPENING THE ASSESSMENT IF HE HAD REASONS TO BELIEVE THAT THE INCOME, PROFITS OR GAINS HAD BEEN UNDER - ASSESSED AND THAT SUCH UNDER - ASSESSMENT WAS DUE TO NON DISCLOSURE OF MATERIAL FACTS BY THE ASSESSEE. THE COURT OBSERVED THAT WHETHER THE INCOME TAX OFFICER HAD PRIMA FACIE REASONABLE ITA 6435/DEL/2013 A.Y. 2007 - 08 OCHOA LABORATORIES LTD. VS. DCIT ITA 241/DEL/2014 A.Y. 2007 - 08 ACIT VS. OCHOA LABORATORIES LTD. ITA 4543/DEL/2013 A.Y. 2009 - 10 OCHOA LABORATORIES LTD. VS. DCIT ITA 4530/DEL/2013 A.Y. 2009 - 10 ACIT VS. OCHOA LABORATORIES LTD. 7 GROUNDS FOR BELIEVING THAT THERE HAS BEEN A NON DISCLOSURE OF MATERIAL OF PRIMARY FACT, THA T WAS BY ITSELF SUFFICIENT TO GIVE JURISDICTION TO HIM TO ISSUE A NOTICE FOR THAT WAS BY ITSELF SUFFICIENT TO GIVE JURISDICTION TO HIM TO ISSUE A NOTICE FOR REOPENING THE ASSESSMENT. THE ADEQUACY OR OTHERWISE ON THE GROUNDS OF SUCH BELIEF WAS NOT OPEN TO I NVESTIGATION BY THE COURT. THE COURT FURTHER HELD THAT IF THERE ARE IN FACT SOME REASONABLE GROUNDS FOR THE INCOME TAX OFFICER TO BELIEVE THAT THERE HAD BEEN A NON DISCLOSURE AS REGARDS ANY FACT WHICH COULD HAVE A MATERIAL BEARING ON THE QUESTION OF UNDER ASSESSMENT, IT WOULD BE SUFFICIENT TO GIVE JURISDICTION TO THE OFFICER TO ISSUE A NOTICE WHETHER THE GROUNDS WERE ADEQUATE OR NOT IS NOT A MATTER FOR THE COURT TO INVESTIGATE. THE SUFFICIENCY ON THE GROUNDS, DECLARED THE COURT, WAS NOT A JUSTIFIABLE ISSU E . 2. 3 . AGGRIEVED BY THE ADDITIONS MADE BY LD. AO IN THE REASSESSMENT PROCEEDINGS, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A). 2. 4 . LD. CIT (A) UPHELD THE JURISDICTION OF A SSESSING O FFICER IN REOPENING THE ASSESSMENT, HOWEVER , GRANTED SUBSTANTIAL RELIEF ON MERITS TO ASSESSEE. 2. 5 . AGGRIEVED BY THE ORDER OF LD. CIT (A) ASSESSEE AS WELL AS REVENUE ARE IN APPEAL BEFORE US NOW . 2. 6 . T HE ISSUE RAISED BY ASSESSEE IN ITS APPEAL IS REGARDING THE JURISDICTION OF LD. AO IN REOPENING O F ASSESSMENT. AS THIS ISSUE GOES TO THE ROOT OF THE CASE , WE ARE INCLINED TO DECIDE THE APPEAL FILED BY THE ASSESSEE IN ITA NO. 6435/ D EL/2013. 3. ITA NO. 6435/DEL/2013. (A.Y. 2007 - 08) LD.COUNSEL WHILE ADVANCING HIS SUBMISSIONS ARGUED THAT THE ONLY CONDITION WHICH CONFERS JURISDICTION ON LD. AO TO INITIATE PROCEEDINGS UNDER SECTION 147 OF THE ACT IS THAT HE SHOULD HAVE ITA 6435/DEL/2013 A.Y. 2007 - 08 OCHOA LABORATORIES LTD. VS. DCIT ITA 241/DEL/2014 A.Y. 2007 - 08 ACIT VS. OCHOA LABORATORIES LTD. ITA 4543/DEL/2013 A.Y. 2009 - 10 OCHOA LABORATORIES LTD. VS. DCIT ITA 4530/DEL/2013 A.Y. 2009 - 10 ACIT VS. OCHOA LABORATORIES LTD. 8 REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. LD. COUNSEL SUBMITTED THAT THE REASSESSMENT IN THE CASE O F ASSESSEE IS A MERE CHANGE OF OPINION , WHICH IS PROHIBITED UNDER LAW. HE SUBMITTED THAT THE REASONS RECORDED ARE MANIFESTATION OF MIND OF ASSESSING OFFICER AND THEREFORE MUST BE SELF EXPLAINING ENTRY. LD.COUNSEL SUBMITTED THAT IN THE GARB OF ADMISSIBIL ITY OF DEFERRED REVENUE EXPENSES CLAIMED BY ASSESSEE, ASSESSING OFFICER IS TRYING CAPRICIOUSLY TO REOPEN CONCLUDED ASSESSMENT, AS THE REASONS RECORDED ARE VAGUE, WHIMSICAL AND NOT SPECIFIC. LD.COUNSEL SUBMITTED THAT THE AMOUNT OF RS.1,21,14,765/ - MENTIONED IN THE REASONS RECORDED REPRESENTS DEFERRED REVENUE EXPENDITURE FOR THE PRECEDING ASSESSMENT YEAR I.E. 2005 - 06 AND 2006 - 07, THE BENEFIT OF WHICH HAS ALREADY BEEN TAKEN IN THE PRECEDING YEARS. HE FURTHER SUBMITTED THAT THE SUM OF RS.1,21,14,765/ - IS NOT THE COMPONENT OF RS. 1,83,96,739/ - WHICH ACTUALLY IS THE DEFERRED REVENUE EXPENDITURE FOR ASSESSMENT YEAR UNDER CONSIDERATION. LD.COUNSEL SUBMITTED THAT THE SAID DEFERRED REVENUE EXPENSES AS PER REGULAR PRACTICE IS BEING DEFERRED THAT A CCRUES IN THE FUTURE Y EARS AND IS NOT CHARGED TO PROFIT AND LOSS ACCOUNT BUT IS TAKEN TO THE BALANCE SHEET UNDER THE HEAD MISCELLANEOUS EXPENSES. 3.1. FURTHER THE LD.COUNSEL SUBMITTED THAT AS THE NATURE OF EXPENSES BEING REVENUE IN NATURE, IT IS CLAIMED IN THE YEAR IN WHICH IT WAS INCURRED AND THE SAME HAS BEEN CLAIMED AS D EDUCTION IN THE COMPUTATION OF INCOME FOR THE YEAR UNDER CONSIDERATION, AND THE DEFERRED REVENUE EXPENDIT URE FOR PRECEDING ASSESSMENT YEAR AMOUNTING TO RS.1 ,21,14,765/ - WAS ITA 6435/DEL/2013 A.Y. 2007 - 08 OCHOA LABORATORIES LTD. VS. DCIT ITA 241/DEL/2014 A.Y. 2007 - 08 ACIT VS. OCHOA LABORATORIES LTD. ITA 4543/DEL/2013 A.Y. 2009 - 10 OCHOA LABORATORIES LTD. VS. DCIT ITA 4530/DEL/2013 A.Y. 2009 - 10 ACIT VS. OCHOA LABORATORIES LTD. 9 CHARGED TO PROFIT AND LOSS ACCOUNT FOR THE YEAR UNDER CONSIDERATION BUT ADDED IN THE COMPUTATION OF INCOME. LD.COUNSEL SUBMITTED THAT THERE HAS BEEN NO ESCAPEMENT OF INCOME ON ACCOUNT OF F AILURE TO DISCLOSE TRULY AND FULLY ALL MATERIAL FACTS ON THE BASIS OF WHICH ASSESSING OFFICER HAS FORMED REASON TO BELIEVE. LD. COUNSEL PLACES RELIANCE UPON VARIOUS DECISIONS OF HON BLE SUPREME COURT AND VARIOUS H IGH C OURTS AS WELL AS C OORDINATE B ENCHES OF THIS T RIBUNAL . 3.2. ON THE CONTRARY LD. DR SUBMITTED THAT IN THE QUESTIONNAIRE ISSUED BY LD. AO DURING THE ORIGINAL ASSESSMENT PROCEEDINGS THERE HAS BEEN NO QUERY RAISED IN RESPECT OF THE DEFERRED REVENUE EXPENSES. HE THUS SUBMITTED THAT ASSESSING OFFICE R WHILE FRAMING THE ORIGINAL ASSESSMENT DID NOT FORM ANY OPINION ON THE RELEVANT ISSUE AND THEREFORE THE REOPENING IS CORRECTLY MADE AS PER SUB CLAUSE (C) OF EXPLANATION 2 TO SECTION 147 OF THE ACT. HE FURTHER SUBMITTED THAT ASSESSEE HAS ALLEGED TO HAVE CO NSIDERED SALARY AND WAGES, TRAVELLING EXPENSES, LE GAL AND PROFESSIONAL EXPENSES, F EES AND S UBS CRIPTION, ADVERTISEMENT, P RINTING AND S TATIONERY UNDER THE HEAD DEFERRED REVENUE E XPENSES . IT HAS BEEN SUBMITTED BY LD. DR THAT THESE EXPEN SES ANYWAY QUALIFI ES FOR DEDUCTION UNDER SECTION 37 (1) OF THE A CT. LD. DR FURTHER SUBMITTED THAT UNDER INCOME T AX A CT THERE IS NO CONCEPT OF DEFERRED REVENUE EXPENDITURE. THE EXPENDITURE IS EITHER REVENUE IN NATURE OR CAPITAL IN NATURE DEPENDING UPON THE CONDITIONS LAID DO WN IN SECTION 30 TO SECTION 37 OF THE A CT. FURTHER LD. DR SUBMITTED THAT THE ISSUE REGARDING DEFERRED REVENUE EXPENSES HAS NEVER BEEN EXAMINED BY ASSESSING OFFICER AT THE TIME OF ITA 6435/DEL/2013 A.Y. 2007 - 08 OCHOA LABORATORIES LTD. VS. DCIT ITA 241/DEL/2014 A.Y. 2007 - 08 ACIT VS. OCHOA LABORATORIES LTD. ITA 4543/DEL/2013 A.Y. 2009 - 10 OCHOA LABORATORIES LTD. VS. DCIT ITA 4530/DEL/2013 A.Y. 2009 - 10 ACIT VS. OCHOA LABORATORIES LTD. 10 ORIGINAL ASSESSMENT UNDER SECTION 143 (3) OF THE A CT AND THERE IS NO DISCUSSI ON ON THE ISSUE IN THE ASSESSMENT ORDER AS NO DETAILS WERE CALLED FOR BY LD.A.O. N OR FILED BY ASSESSEE. HE PLACED RELIANCE UPON VARIOUS DECISIONS OF HON BLE SUPREME COURT AS WELL AS JURISDICTIONAL HIGH COURT , WHEREIN IT HAS BEEN HELD THAT IT IS ENOUGH IF THE MATERIAL ON THE BASIS OF WHICH REASSESSMENT PROCEEDINGS ARE SOUGHT TO BE INITIATED CAME TO THE NOTICE OF ASSESSING OFFICER SUBSEQUENT TO THE ORIGINAL ASSESSMENT. HE F URTHER SUBMITTED THAT THE C OURTS HAVE ALSO HELD THAT IF A SSESSING O FFICER HAS CONSIDERED AND FORMED AN OPINION ON THE SAID MATERIAL IN THE ORIGINAL ASSESSMENT ITSELF ONLY THEN HE WOULD BE POWERLESS TO START THE PROCEEDINGS FOR THE REASSESSMENT. WHERE HOWEVER THE ASSESSING OFFICER HAS NOT CONSI DERED THE MATERIAL AND SUBSEQUENTLY CAME BY THE MATERIAL WOULD FORM A REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT WHICH WOULD FALL WITHIN THE SCOPE OF SECTION 147 OF THE ACT. IT WAS THEREFORE LD. AO IN THE REASONS RECORDED HAS OBSERVED THAT ASSES SEE IN COMPUTATION OF INCOME HAD ADDED BACK DEFERRED REVENUE EXPENDITURE AMOUNTING TO RS.1,21,14,765/ - AND REDUCED DEFERRED REVENUE EXPENDITURE OF RS. 1,83,96,738/ - THEREBY A N UNDERSTATEMENT OF L OSS OF RS. 62,81,974/ - WHICH IS THE DIFFERENCE BETWEEN THE TWO HAS OCCURRED. SINCE TH IS ISSUE HAD NOT BEEN ADDRESSED BY ASSESSING OFFICER WHILE PASSING THE ORIGINAL ASSESSMENT LD. DR EMPHASISED THAT THE REOPENING OF ASSESSMENT TO VERIFY THIS FACT WAS RIGHTLY INITIATED. 3.3. WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOTH THE SIDES IN THE LIGHT OF THE RECORDS PLACED BEFORE US. ITA 6435/DEL/2013 A.Y. 2007 - 08 OCHOA LABORATORIES LTD. VS. DCIT ITA 241/DEL/2014 A.Y. 2007 - 08 ACIT VS. OCHOA LABORATORIES LTD. ITA 4543/DEL/2013 A.Y. 2009 - 10 OCHOA LABORATORIES LTD. VS. DCIT ITA 4530/DEL/2013 A.Y. 2009 - 10 ACIT VS. OCHOA LABORATORIES LTD. 11 3.4. ADMITTEDLY ASSESSING OFFICER HAS NOT RAISED ANY QUERY REGARDING THE DEFERRED REVENUE EXPENDITURE IN THE QUESTIONNAIRE ISSUED ALONG WITH NOTICE U/S 143 (1) OF THE A CT DURING THE ORIGINAL ASSESSMENT PROCEEDINGS. THUS IN OUR OPINION THERE IS NO VIEW FORMED BY ASSESSING OFFICER ON THIS ISSUE AT THE TIME OF ORIGINAL ASSESSMENT . FURTHER FROM THE STATEMENT OF AUDITED ACCOUNTS, MORE PARTICULARLY IN THE NOTES TO ACCOUNT, AT PAGE 122 - 127, WE OBSERVE THAT DEFERRED REVENUE EXPENDITURE HAS BEEN HELD TO BE: EXPENDITURE INCURRED TO ACCESS NEW MARKET FOR COMPANIES PRODUCTS, THE BENEFIT WHERE OF IS EXPECTED TO ACCRUE IN FUTURE YEARS IN ADDITION TO THE YEAR IN WHICH SUCH EXPENDITURE IS INCURRED, IS CONSIDERED IN THE NATURE OF DEFERRED REVENUE EXPENDITURE AND THE SAME IS AMORTISED EQUALLY OVER A PERIOD OF 5 YEARS. AND ASSESSEE HAS CLAIMED AT PAGE 128 REGARDING THE DET AILS OF ITEMS CONSIDERED UNDER THE HEAD DEFERRED REVENUE EXPENDITURE AS ON YEAR ENDING TO THE ASSESSMENT YEAR UNDER CONSIDERATION TO BE SALARY AND WAGES, TRAVELLING EXPENSES, LEGAL AND PROFESSIONAL EXPENSES, FEES AND SUBSCRIPTION, ADVERTISEMENT, PRINTIN G AND STATIONERY. THESE ARE THE EXPENSES WHICH ASSESSEE HAS CAP TIONED IN THE ADMINISTRATIVE EXPENSES BEING SCHEDULED 7 AT PAGE 121 OF THE PAPER BOOK AND SCHEDULE 15 BEING CAPITAL WORK IN PROGRESS AT PAGE 124 OF PAPER BOOK. THIS OVERLAPPING OF EXPENSES WITH DEFERRED REVENUE EXPENSES IN OUR CONSIDERED OPINION HAS NOT BEEN VERIFIED BY ASSESSING OFFICER DURING THE ORIGINAL ASSESSMENT PROCEEDINGS. 3.5. FURTHER, W E AGREE WITH THE SUBMISSION S ADVANCED BY LD.DR THAT UNDER I NCOME T AX A CT THERE IS NO CONCEPT OF DEFERRED ITA 6435/DEL/2013 A.Y. 2007 - 08 OCHOA LABORATORIES LTD. VS. DCIT ITA 241/DEL/2014 A.Y. 2007 - 08 ACIT VS. OCHOA LABORATORIES LTD. ITA 4543/DEL/2013 A.Y. 2009 - 10 OCHOA LABORATORIES LTD. VS. DCIT ITA 4530/DEL/2013 A.Y. 2009 - 10 ACIT VS. OCHOA LABORATORIES LTD. 12 REVENUE EXPENDITURE AND THE NATURE OF DEFERRED REVENUE EXPENDITURE IN THE PRESENT CASE COULD HAVE BEEN OTHERWISE SHOWN AS REVENUE OR CAPITAL EXPENDITURE BY ASSESSEE AS THE CASE MAY BE. THUS IT IS DIFFICULT T O ACCEPT THE CONTENTIONS OF LD.C OUNSEL ON THIS ISSUE REGARDING CHANGE OF OPINION BY ASSESSING OFFICER WHILE INITIATING THE REASSESSMENT PROCEEDINGS. FURTHER WE FI ND FORCE IN THE ARGUMENT OF LD. DR REGARDING APPLICATION OF SUB CLAUSE (C) TO EXPLANATION 2 TO SECTION 147 OF THE ACT. THUS IN OUR C ONSIDERED OPINION THE REASONS RECORDED TO FORM BASIS FOR INITIATING REASSESSMENT PROCEEDINGS AS IT FALLS UNDER (I ), (III) AND (IV) OF SUB CLAUSE (C) TO EXPLANATION 2 TO SECTION 147 OF THE ACT. THUS RESPECTFULLY FOLLOWING THE DECISION OF HON BLE SUPREME C OURT IN THE CASE OF CALCUTTA D ISCOUNT C OMPANY LTD VERSUS ITO (SUPRA) , WE HOLD REOPENING OF THE ASSESSMENT TO BE VALID. 3.6. ACCORDINGLY THE PRELIMINARY ISSUE RAISED BY ASSESSEE IN GROUND NO. 1 - 4 STANDS DISMISSED. 4. GROUND NUMBER 5A DEALS WITH THE DISALLOW ANCE OF EXPENSES MADE BY ASSESSEE UNDER L EGAL AND P ROFESSIONAL HEAD TREATING THE SAME AS CAPITAL IN NATURE. 4.1. ON PERUSAL OF THE RECORDS PLACED BEFORE US IT IS OBSERVED THAT ASSESSEE INCURRED EXPENDITURE OF RS.14,87,323/ - FOR REGISTRATION OF PRODUCT WITH THE TRADEMARK AUTHORITY. IT IS OBSERVED THAT ASSESSEE IS ENGAGED IN THE ACTIVITY OF MANUFACTURING AND MARKETI NG OF PHARMACEUTICAL FORMULATIONS. LD. C OUNSEL SUBMITTED THAT ASSESSEE IS THE OWNER OF NUMBER OF BRANDS AND ALSO ACQUIRES OTHER BRANDS WHICH IT INTENDS TO LAUNCH IN FUTURE. THUS IT IS INCUMBENT UPON ASSESSEE TO REGISTER THE ITA 6435/DEL/2013 A.Y. 2007 - 08 OCHOA LABORATORIES LTD. VS. DCIT ITA 241/DEL/2014 A.Y. 2007 - 08 ACIT VS. OCHOA LABORATORIES LTD. ITA 4543/DEL/2013 A.Y. 2009 - 10 OCHOA LABORATORIES LTD. VS. DCIT ITA 4530/DEL/2013 A.Y. 2009 - 10 ACIT VS. OCHOA LABORATORIES LTD. 13 TRADEMARKS SO THAT NO OTHER COMP ANY CAN INFRINGE ON THE BRAND PRODUCT OF THE ASSESSEE. LD. C OUNSEL HAS ALSO SUBMITTED THAT THE LEGAL AND PROFESSIONAL EXPENSES INCURRED TOWARDS REGISTRATION OF THE TRADEMARKS ARE AN ALLOWABLE EXPENDITURE UNDER SECTION 32 (1) (II) OF THE A CT. 4.2. ON THE CO NTRARY LD. DR PLACED RELIANCE UPON THE ORDERS OF THE AUTHORITIES BELOW. 4.3. WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOTH THE SIDES AND THE LIGHT OF THE RECORDS PLACED BEFORE US. IT IS VERY MUCH RELEVANT FOR ASSESSEE IN ITS TYPE OF BUSINESS TO REGISTER ITS BRAND WITH THE T RADEMARK R EGISTRY AS THERE WOULD BE MANY OTHER PHARMACEUTICAL COMPANIES COMING OUT WITH A SIMILAR TYPE OF PRODUCTS WHICH COULD INFRINGE THE RIGHTS OF ASSESSEE IN CASE THE SAME IS NOT PROPERLY REGISTERED WITH THE APPROPRIATE AUTHORITY. UNDER SUCH CIRCUMSTANCES WE DO NOT SEE ANY REASON TO CONFIRM THIS ADDITION , AS THESE ARE GENUINE EXPENDITURE INCURRED BY ASSESSEE FOR THE PURPOSES OF BUSINESS. FURTHER SECTION 32 (1) (II) OF THE ACT NOW CATEGORICALLY CONSIDERS TRADEMARK TO BE AN ELIGIBLE EXPENDITURE IN THE CATEGORY OF INTANGIBLE ASSETS. 4.4. THUS IN OUR CONSIDERED OPINION THE ADDITION MADE BY LD. AO DESERVES TO BE DELETED. 4.5. THIS GROUND RAISED BY THE ASSESSEE STANDS ALLOWED. 5. GROUND NO. 6 HAS BEEN RAISED IN RESPECT OF THE DISALLOWANC E CONF IRMED BY LD. CIT (A) TOWARDS THE EXPEN DITURE INCURRED UNDER THE HEAD FE ES AND S UBSCRIPTION AMOUNTING TO RS.20,96,878/ - . ITA 6435/DEL/2013 A.Y. 2007 - 08 OCHOA LABORATORIES LTD. VS. DCIT ITA 241/DEL/2014 A.Y. 2007 - 08 ACIT VS. OCHOA LABORATORIES LTD. ITA 4543/DEL/2013 A.Y. 2009 - 10 OCHOA LABORATORIES LTD. VS. DCIT ITA 4530/DEL/2013 A.Y. 2009 - 10 ACIT VS. OCHOA LABORATORIES LTD. 14 5.1. IT HAS BEEN SUBMITTED THAT THIS EXPENDITURE HAS BEEN INCURRED BY ASSESSEE TOWARDS REGISTRATION OF A PARTICULAR DRUG/PRODUCT MANUFACTURED BY ASSESSEE WITH THE D RUG ASSOCIATION, FOR WHICH ASSESSEE HAS TO MAKE CERTAIN STATUTORY PAYMENTS. ASSESSEE HAS ALSO TO OBTAIN PERMIT FROM THE APPROPRIATE AUTHORITY TO TRADE IN RESPECT OF THE PRODUCTS MANUFACTURED BY ASSESSEE. FOR ALL THESE PERMISSIONS, ASSESSEE HAS TO MAKE STATUTORY PAYMENTS WHICH ARE BEING INCLUDED UNDER THE HEAD FEES AND SUBSCRIPTION . 5.2. LD. DR PLACED RELIANCE UPON THE ORDERS OF AUTHORITIES BELOW. 5.3. AS ASSESSEE IS INTO MANUFACTURING AND MARKE TING OF PHARMA PRODUCTS, IT HAS TO HAVE A LICENSE TO TRADE IN THE PRODUCTS WHICH IS TO BE OBTAINED FROM APPROPRIATE AUTHORITY IN THE STATE. WE DO NOT FIND ANY CONTRARY OBSERVATION MADE BY AUTHORITIES BELOW IN RESPECT OF THE NATURE OF PAYMENT WHICH ASSESSE E HAS TO INCUR TIME AND AGAIN FOR THE PURPOSES OF CARRYING ON ITS BUSINESS. IN OUR CONSIDERED VIEW THESE EXPENSES DO NOT CATEGORISE TO BE IN THE NATURE OF ENDURING BENEFIT ARISING TO ASSESSEE AS THE LICENSES ISSUED BY THE S TATE G OVERNMENT ARE FOR A FIXED P ERIOD OF TIME WHICH ARE REVOKE A WILL UPON VIOLATION OF THE CONDITIONS STIPULATED THERE. THUS IN OUR CONSIDERED OPINION THESE EXPENSES INCURRED BY ASSESSEE WOULD BE ELIGIBLE FOR DEDUCTION UNDER SECTION 37 (1) OF THE ACT. 5.4. ACCORDINGLY THIS GROUND RAISED BY ASSESSEE STANDS ALLOWED. 6. IN THE RESULT APPEAL FILED BY ASSESSEE STANDS PARTLY ALLOWED. ITA 6435/DEL/2013 A.Y. 2007 - 08 OCHOA LABORATORIES LTD. VS. DCIT ITA 241/DEL/2014 A.Y. 2007 - 08 ACIT VS. OCHOA LABORATORIES LTD. ITA 4543/DEL/2013 A.Y. 2009 - 10 OCHOA LABORATORIES LTD. VS. DCIT ITA 4530/DEL/2013 A.Y. 2009 - 10 ACIT VS. OCHOA LABORATORIES LTD. 15 7. ITA NO. 241/D EL/2014 (REVENUE) D EPARTMENTAL APPEAL IS IN RESPECT OF THE EXPENDITURE ALLOWED BY LD. CIT (A) BY CONSIDERING IT TO BE REVENUE IN NATURE. 7.1. LD. CIT (A) HAD ALLOWED EXPENDITURE UNDER THE HEAD SA LARY AND WAGES AMOUNTING TO RS.46,80, 847/ - , TRAVE LLING EXPENSES AMOUNTING TO RS.22,34, 939/ - , ADVERTISEMENT EXPENSES AT RS.19,94, 690/ - AND PRINTING AND STATIONARY AT RS.59,02, 063/ - TO BE REVENUE IN NATURE. 7 .2. LD. C IT (A) DELETED THE ADDITION OF T RAVEL EXPENSES AMOUNTING TO RS. 22,34,939/ - , AS ACCORDING TO LD. CIT (A) THEY WERE INCURRED ON THE PRODUCT DEVELOPMENT TEAM WHO HAS TO TRAVEL ALL OVER INDIA TO VISIT DOCTORS , CONDUCT SEMINARS AND TO IMPART MARKETIN G STRATEGIES, KNOWLEDGE OF PRODUCTS TO ITS SALES FORCE WHO IS INSTRUMENTAL IN PROMOTING THE SALES OF THE PRODUCT. HOWEVER, I T IS OBSERVED FROM THE STATEMENT OF ACCOUNTS THAT IN SCHEDULE 17 AT PAGE 121 OF PAPER BOOK ASSESSEE HAS CLAIMED TRAVE LLING EXPENSES AMOUNTING TO RS. 50, 996, 740/ - . THUS WE DO NOT FIND THE REASON, AS TO WHY ASSESSEE CONSIDERED TRAVEL EXPENSES AMOUNTING TO RS.22,34,939/ - UNDER THE HEAD DEFERRED REVENUE EXPENSES AGAIN . THIS AMOUNTS TO DOUBLE DEDUCTION CLAIMED BY ASSESSEE . 7.3. THEREFOR E THE DISALLOWANCE OF TRAVEL EXPENSES STANDS UPHELD. 8. IN RESPECT OF THE EXPENSES UNDER THE HEAD S ALARY AND WAGES AT RS.46,80, 847/ - , LD. CIT(A) DELETED THE ADDITION AS THESE EXPENSES HAVE BEEN INCURRED BY THE P RODUCT DEPARTMENT, SOLELY TO PROMOTE THE SALE OF THE APPELLANT S PRODUCT AND TO FORMULATE MARKETING STRATEGY FOR INCREASING THE SALE OF THE PRODUCTS. ITA 6435/DEL/2013 A.Y. 2007 - 08 OCHOA LABORATORIES LTD. VS. DCIT ITA 241/DEL/2014 A.Y. 2007 - 08 ACIT VS. OCHOA LABORATORIES LTD. ITA 4543/DEL/2013 A.Y. 2009 - 10 OCHOA LABORATORIES LTD. VS. DCIT ITA 4530/DEL/2013 A.Y. 2009 - 10 ACIT VS. OCHOA LABORATORIES LTD. 16 8.1. IT IS OBSERVED THAT ASSESSEE HAS ALREADY CLAIMED SALARY AND OTHER BENEFITS UNDER THE HEAD CAPITAL WORK IN PROGRESS AT RS.15,861,326/ - , THUS WE DO NOT FIND THE REASON AS TO WHY ASSESSEE HAS CONSIDERED SALARY AND WAGES AMOUNTING TO RS.46,80,847/ - UNDER THE HEAD DEFERRED REVENUE EXPENSES AGAIN . THIS AMOUNTS TO DOUBLE DEDUCTION CLAIMED BY ASSESSEE . 8.2. THEREFORE THE DI SALLOWANCE OF SALARY AND WAGES STANDS UPHELD. 9. IN RESPECT OF THE EXPENSES INCURRED BY ASSESSEE AS PRINTING AND S TATIONARY TO THE EXTENT OF RS.59,02,063/ - , A SIMILAR OBSERVATION IS MADE , AS ASSESSEE HAS CLAIMED UNDER THE HEAD A DMINISTRATIVE E XPENSES IN SCHEDULE 17 TO THE STATEMENT OF ACCOUNTS , PRINTING AND STATIONARY EXPENSES AMOUNTING TO RS.75,07,888/ - . THIS AMOUNTS TO DOUBLE DEDUCTION AS CLAIMED BY ASSESSEE 9.1. THEREFORE THE DISALLOWANCE OF PRINTING AND STATIONARY EXPENSES AMOUNTING TO RS.59,02,063/ - STANDS UPHELD. 9.2. IN RESPECT OF ADVERTISEMENT EXPENSES AMOUNTING TO RS.19,94,690/ - IS CONCERNED, LD.CIT(A) DELETED THE ADDITION AS IT IS INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS. IT IS OBSERVED THAT ASSESSEE HAS ALREADY CLAIMED ADVER TISEMENT EXPENSES UNDER THE HEAD SELLING AND DISTRIBUTION EXPENSES BEING SCHEDULE 19 TO THE STATEMENT OF ACCOUNTS AMOUNTING TO RS.21,95,824/ - . T HUS WE DO NOT FIND THE REASON AS TO WHY ASSESSEE CONSIDERED ADVERTISEMENT EXPENSES AMOUNTING TO RS.19,94,690/ - UNDER THE HEAD DEFERRED REVENUE EXPENSES . THIS AMOUNTS TO DOUBLE DEDUCTION AS CLAIMED BY ASSESSEE. ITA 6435/DEL/2013 A.Y. 2007 - 08 OCHOA LABORATORIES LTD. VS. DCIT ITA 241/DEL/2014 A.Y. 2007 - 08 ACIT VS. OCHOA LABORATORIES LTD. ITA 4543/DEL/2013 A.Y. 2009 - 10 OCHOA LABORATORIES LTD. VS. DCIT ITA 4530/DEL/2013 A.Y. 2009 - 10 ACIT VS. OCHOA LABORATORIES LTD. 17 9.3. THEREFORE THE DISALLOWANCE OF ADVERTISEMENT EXPENSES STANDS UPHELD. 9.4. FU RTHER IT IS OBSERVED THAT THIS T RIBUNAL VIDE ORDER DATED 25/08/17/ FOR ASSE SSMENT YEAR 2007 - 08 (A COPY OF WHICH HAS BEEN PLACED AT PAGE 19 - 49 OF PAPER BOOK DATED 21/02/18) HAS ALREADY DISMISSED THE CLAIM OF ASSESSEE. 9.5. ACCORDINGLY THE APPEAL FILED BY REVENUE STANDS ALLOWED. ITA NO. 4543/ D EL/2013 ( ASSESSMENT YEAR 2009 - 10 ) 10. P RESENT APPEAL HAS BEEN FILED BY ASSESSEE AGAINST THE ADDITION CONFIRMED BY LD. CIT (A) UNDER THE HEAD SALES PROMOTION EXPENSES AS WELL AS RESTRICTING THE DEPRECIATION ON UPS AND BATTERY AT 15% AS AGAINST THE CLAIM OF 60% BY ASSESSEE. GROUND NO. 1 , IS RE GARDING THE DISALLOWANCE OF SALES PROMOTION EXPENSES . W E ARE OF THE CONSIDERED OPINION THAT THIS TRIBUNAL VIDE CONSOLIDATED ORDER DATED 25/08/ 17 , PASSED FOR ASSESSMENT YEAR 2006 - 07 AND 2007 - 08 HAS DEALT WITH THIS ISSUE EXTENSIVELY IN PARAGRAPHS 13 - 22. THIS TRIBUNAL HAS DISMISSED THE CLAIM OF ASSESSEE. 10.1. RESPECTFULLY FOLLOWING THE SAME, THIS GROUND RAISED BY ASSESSEE STANDS DISMISSED. 10.2. GROUND NO. 2 IS IN RESPECT OF THE DEPRECIATION CLAIMED ON COMPUTER PERIPHERALS SUCH AS UPS, BATTERY ETC. 10.3. IN OUR CONSIDERED OPINION THIS ISSUE NOW SQUARELY STANDS COVERED IN FAVOUR OF ASSESSEE BY ORDER OF JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V S. BSES YAMUNA POWERS LTD IN ITA NO. 1 267 /2010 WHEREIN IT HAS BEEN HELD THAT COMPUTE R ACCESSORIES AND PERIPHERALS SUCH AS PRINTERS , SCANNERS AND SERVERS ETC . FORM ITA 6435/DEL/2013 A.Y. 2007 - 08 OCHOA LABORATORIES LTD. VS. DCIT ITA 241/DEL/2014 A.Y. 2007 - 08 ACIT VS. OCHOA LABORATORIES LTD. ITA 4543/DEL/2013 A.Y. 2009 - 10 OCHOA LABORATORIES LTD. VS. DCIT ITA 4530/DEL/2013 A.Y. 2009 - 10 ACIT VS. OCHOA LABORATORIES LTD. 18 AN INTEGRAL PART OF COMPUTER SYSTEM AND CANNOT BE USED WITHOUT THE COMPUTER, THUS THESE ARE PART OF THE COMPUTER SYSTEM AND ELIGIBLE FOR DEPRECIATION AT THE RATE OF 60%. 10.4. ACCORDINGLY WE ALLOW THIS GROUND RAISED BY ASSESSEE. 10.5. IN THE RESULT THE APPEAL FILED BY ASSESSEE STANDS PARTLY ALLOWED. 11. ITA NO. 4530/ D EL/2013 (REVENUE) G ROUND NO. 1 HAS BEEN RAISED BY REVENUE AGAINST THE ADDITION DELETED BY LD. CIT (A) TOWARDS THE EMPLOYER S CONTRIBUTION IN PF AND ESI , AS IT WAS PAID BEFORE DUE DATE OF RETURN AND WAS CLAIMED BY ASSESSEE AS PER SECTION 43 (B) (B) OF THE A CT. 11.1. LD. AO OBSERVED THAT PART OF THE PAYMENTS HAVE BEEN PAID AFTER THE DUE DATE OF THE RELEVAN T ACT AND THEREFORE WAS NOT ADMISSIBLE UNDER SECTION 36 (1) (VA) OF THE A CT. IT IS SUBMITTED THAT IN THE COMPUTATION OF INCOME ASSESSEE HAS ADDED BACK THE EMPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUND AMOUNTING TO RS.31,85,550/ - AND EMPLOYEES CONTRIBUTION T OWARDS ESI AMOUNTING TO RS.6, 19,088/ - . 11.2. ON PERUSAL OF THE ORDER PASSED BY LD. CIT (A) , IT IS OBSERVED THAT A DIRECTION HAS BEEN GIVEN TO LD. AO FOR VERIFICATION OF THE CLAIM OF PAYMENTS MADE BY ASSESSEE. 11.3. WE DO NOT FIND ANY INFIRMITY IN THE OBSERVATIONS OF LD. CIT (A) AS THE SAME NEEDS VERIFICATION. 11.4. ACCORDINGLY THIS GROUND RAISED BY REVENUE STANDS DISMISSED. ITA 6435/DEL/2013 A.Y. 2007 - 08 OCHOA LABORATORIES LTD. VS. DCIT ITA 241/DEL/2014 A.Y. 2007 - 08 ACIT VS. OCHOA LABORATORIES LTD. ITA 4543/DEL/2013 A.Y. 2009 - 10 OCHOA LABORATORIES LTD. VS. DCIT ITA 4530/DEL/2013 A.Y. 2009 - 10 ACIT VS. OCHOA LABORATORIES LTD. 19 11.5 . GROUND NO. 2 RAISED BY REVENUE IS IN RESPECT OF THE ADDITION DELETED BY LD. CIT (A) ON EXCESS PROVISION MADE UNDER THE HEAD F RINGE B ENEFIT T AX (FBT) . 11.6. LD. AO DISALLOWED RS.21,64, 80/ - ON ACCOUNT OF EX CESS PROVISION MADE UNDER FBT. IT WAS SUBMITTED BY ASSESSEE T HAT IT WAS A LOSS OF RS.20,64,67,024/ - AND ACCORDINGLY THE PROVISION MADE FOR EXCESS FBT HAS NOT BEEN CLAIMED AS DEDUCTION AT ALL. 11.7. IN THE ORDER OF LD. CIT (A) THERE IS A CATEGORICAL OBSERVATION THAT FROM THE COMPUTATION OF INCOME AND PROFIT AND LOSS ACCOUNTS SUBMITTED BY ASSESSEE IT HAS BEEN OBSERVED THAT NO SUCH PROVISION FOR EXCESS FBT HAS BEEN CLAIMED AS DEDUCTION BY ASSESSEE. IN VIEW OF THE ABOVE OBSERVATION LD. CIT (A) DELETED THE ADDITION MADE BY LD. AO. 11.8. BEFORE US LD. DR HAS NOT BEE N ABLE TO DISPROVE THE OBSERVATIONS OF LD. CIT (A). ACCORDINGLY WE UPHOLD FINDINGS OF LD. CIT (A) AND THE GROUND RAISED BY REVENUE STANDS DISMISSED. 12. IN THE RESULT THIS APPEAL FILED BY THE REVENUE STANDS DISMISSED . 13. IN THE RESULT APPEAL NO.ITA 6435/ DEL/2013 FILED BY ASSESSEE FOR A.Y. 2007 - 08 IS PARTLY ALLOWED , AND ITA 241/DEL/14 FILED BY REVENUE IS ALLOWED, ITA NO.4543/DEL/2013 FILED BY ASSESSEE FOR A.Y. 2009 - 10 IS ALLOWED AND ITA 4530/DEL/13 FILED BY REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE O PEN COURT ON 1 4 . 0 3 . 2 0 1 8 . S D / - S D / - ( R.K.PANDA ) (BEENA A PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 4 T H MARCH , 2018. *MV ITA 6435/DEL/2013 A.Y. 2007 - 08 OCHOA LABORATORIES LTD. VS. DCIT ITA 241/DEL/2014 A.Y. 2007 - 08 ACIT VS. OCHOA LABORATORIES LTD. ITA 4543/DEL/2013 A.Y. 2009 - 10 OCHOA LABORATORIES LTD. VS. DCIT ITA 4530/DEL/2013 A.Y. 2009 - 10 ACIT VS. OCHOA LABORATORIES LTD. 20 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASST. REGISTRAR ITAT, DELHI BENCHES, NEW DELHI