ASST CIT(LTU) 1, MUMBAI V. ADITYA BIRLA NUVO LTD, MUMBAI

ITA 4704/MUM/2015

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4583 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2020
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: K
• Assessment Year: 2010-2011
• Appeal Filed On: 19-08-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Depreciation; Transfer pricing; International transaction; Additional depreciation; Earning of tax free income; Question of law; Capital receipt; Revenue expenditure; Capital expenditure; TDS; Rule 8D; Set aside
• Section: 271(1)(c); 43B; 14A; 115JB; 40(a)(ia); 13; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH K , MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI N.K.PRADHAN, ACCOUNTANT MEMBER ITA NO.4220/MUM/2015(A.Y. 2010-11) ADITYA BIRLA NUVO LIMITED, A4, ADITYA BIRLA CENTER, S.K.AHIRE MARG, WORLI, MUMBAI 400 020 PAN:AAACI 1747H ...... APPELLANT VS. ADDL. COMMISSIONER OF INCOME TAX- LTU-1 WORLD TRADE CENTRE, 29 TH FLOOR, CENTRE -1, CUFFE PARADE, MUMBAI 400 005. ..... RESPONDENT ITA NO.4704/MUM/2015(A.Y. 2010-11) ASSTT. COMMISSIONER OF INCOME TAX- LTU-1 WORLD TRADE CENTRE, 29 TH FLOOR, CENTRE -1, CUFFE PARADE, MUMBAI 400 005. ..... APPELLANT VS. ADITYA BIRLA NUVO LIMITED, A4, ADITYA BIRLA CENTER, S.K.AHIRE MARG, WORLI, MUMBAI 400 020 PAN:AAACI 1747H ...... RESPONDENT ASSESSEE BY : S/SHRI JAHANGIR D. MISTRI/ HARDIK NIR MAL/ROUNAK DOSHI/ RIDDHI MARU REVENUE BY : SHRI ANAND MOHAN DATE OF HEARING : 06/01/2020 DATE OF PRONOUNCEMENT : 24/0 2/2020 2 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) ORDER PER VIKAS AWASTHY, JM: THESE CROSS APPEALS BY THE ASSESSEE AND THE REVENU E ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (AP PEALS)-55, MUMBAI [ IN SHORT THE CIT(A)] DATED 31/03/2015 FOR THE ASS ESSMENT YEAR 2010-11. 2. THE GROUNDS RAISED BY THE ASSESSEE IN ITS APPEA L ARE TAKEN FIRST FOR ADJUDICATION IN SERIATIM. DISALLOWANCE UNDER SECTION 14A:- 3. GROUND NO.1 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX-APPEALS (HEREINAFTER REF ERRED AS CIT(A)) HAS ERRED IN- I) DISREGARDING THE QUANTIFICATION OF INDIRECT EXPENSES OF RS. 1,48,32,243/- MADE UNDER RULE 8D(2)(III) BY THE APPELLANT HAVING REGARD TO THE ACCOUNTS OF THE APPELLANT AND SUPPORTED BY REPORT OF AN INDEPEN DENT CHARTERED ACCOUNTANT. II) WITHOUT PREJUDICE TO THE ABOVE, LEARNED CIT( A) ERRED IN THE QUANTIFICATION OF THE AMOUNT ATTRIBUTABLE TOWARDS EARNING EXEMPT INCO ME: I. THE LEARNED CIT(A) ERRED IN TREATING ENTIRE SA LARY, WAGES & EMPLOYEE BENEFIT EXPENSES OF CFD (HEAD OFFICE) AMOUNTING TO RS. 10,66,53,497 /- AS INDIRECT EXPENSES ATTRIBUTABLE TO EARNING THE EX EMPT INCOME FOR THE PURPOSE OF 14A DISALLOWANCE, II. THE LEARNED CIT(A) ERRED IN TREATING 50% OF A UDIT FEES AMOUNTING TO RS 53,42,728/- AS INDIRECT EXPENSES CONNECTED WITH EARNING THE EXEMPT INCOME FOR THE PURPOSE OF 14A DISALLOWANCE, III. THE LEARNED CIT(A) ERRED IN TREATI NG COMMON EXPENSES OF RS 5,84,73,070/- AS INDIRECT EXPENSES FOR THE PURPO SE OF 14A DISALLOWANCE WITHOUT ANY REASONABLE BASIS. THE LEARNED ADDITIONAL COMMISSIONER OF INCOME TAX ( HEREINAFTER REFERRED AS 'AO') BE DIRECTED TO RESTRICT THE ADDITION TO RS. 1 ,48,32,243/- UNDER RULE 8D(2)(III) FOR 14A DISALLOWANCE OR TO SUBSTANTIALLY REDUCE THE DISALLOWANCE HAVING REGARD TO THE FACTS AND CIRCUMSTANCES AND TH E LAW. 3 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) ADDITIONAL GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO HAS ERRED IN DISALLOWING THE INTEREST COST OF RS . 91.33 CRS U/S 14A, TREATING THE SAME AS INTEREST ATTRIBUTABLE TOWARDS EXPENDITU RE INCURRED IN RELATION TO THE INVESTMENT. THE AO MAY BE DIRECTED TO REDUCE TH E DISALLOWANCE U/S 14A ACCORDINGLY. 2. THE APPELLANT CRAVES LEAVE TO ADD AND/OR TO AM END AND/OR TO ALTER THE ABOVE GROUND OF APPEAL 3.1 SHRI JEHANGIR D. MISTRI, APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT GROUND NO.1 AND THE ADDITIONAL GROUN DS NO.1 & 2 OF THE APPEAL BY THE ASSESSEE ARE IN RESPECT OF DISALLOWAN CE MADE UNDER SECTION 14A OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT ). THE REVENUE HAS ALSO ASSAILED THE FINDINGS OF CIT(A) IN RESPECT OF SECTI ON 14A OF THE ACT IN GROUND NO.1 OF ITS APPEAL. THE LD. AUTHORIZED REPR ESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS EARNED D IVIDEND INCOME OF RS.8,00,92,335/-. DURING THE PERIOD RELEVANT TO TH E ASSESSMENT YEAR UNDER APPEAL THE ASSESSEE MADE SUO-MOTU DISALLOWANC E UNDER RULE 8D(2)(II) RS. 91.32 LAKHS AND UNDER RULE 8D(2)(III) RS.1.48 CRORES IN RESPECT OF EXEMPT INCOME EARNED. THE ASSESSING OFFICER INV OKED THE PROVISIONS OF SECTION 8D(2) R.W.S. 14A(2) OF THE ACT AND ENHANCE D DISALLOWANCE UNDER RULE 8D(2)(III) BY RS.24.55 CRORES. THE LD. AUTHOR IZED REPRESENTATIVE FOR THE ASSESSEE ASSAILING THE FINDINGS OF ASSESSING OF FICER SUBMITTED THAT IN THE FIRST INSTANCE, THE ASSESSING OFFICER HAS NOT R ECORDED SATISFACTION AS ENVISAGED UNDER SECTION 14A(2) OF THE ACT. A PERUS AL OF THE ASSESSMENT ORDER WOULD SHOW THAT THE ASSESSING OFFICER HAS NOW HERE GIVEN REASONS FOR REJECTING SUO-MOTU DISALLOWANCE MADE BY THE AS SESSEE. IT IS A WELL SETTLED LAW THAT BEFORE MAKING DISALLOWANCE UNDER S ECTION 14A OF THE ACT, 4 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) THE ASSESSING OFFICER HAS TO RECORD SATISFACTION RE JECTING THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE IN RESPECT OF EXPENDIT URE IN RELATION TO EXEMPT INCOME EARNED. IN SUPPORT OF HIS CONTENTION S, THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE PLACED RELIANCE ON THE FOLLOWING DECISIONS:- (1) GODREJ & BOYCE MFG. CO.LTD. VS DCIT,394 ITR 449(SC) (2) PCIT VS. BAJAJ FINANCE LTD. IN INCOME TAX APPEAL N O.237 OF 2017 DECIDED ON 02/04 2019 BY THE HONBLE HON'BLE BOMBAY HIGH COURT. 3.2 THE SECOND ARGUMENT RAISED BY THE LD. AUTHORIZE D REPRESENTATIVE FOR THE ASSESSEE AGAINST DISALLOWANCE UNDER SECT ION 14A OF THE ACT WAS THAT OWN FUNDS OF THE ASSESSEE COMPRISING OF SHARE CAPITAL, RESERVES AND SURPLUS AND PROFITS ARE MUCH MORE THAN THE INVESTME NTS MADE. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITT ED THAT NOW IT IS A WELL SETTLED LAW THAT WHERE OWN FUNDS OF THE ASSESS EE ARE SUFFICIENT TO COVER INVESTMENTS, NO DISALLOWANCE U/R.8D(2)(II) IS WARRANTED. IN SUPPORT OF HIS CONTENTION LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE PLACED RELIANCE ON THE FOLLOWING DECISIONS:- (1) CIT VS. HDFC BANK LTD., 366 ITR 505 (BOM) (2) HDFC BANK LTD. VS.DCIT,383 ITR 529 (BOM) 3.3 THE THIRD ARGUMENT MADE BY LD. AUTHORIZED REPRE SENTATIVE FOR THE ASSESSEE ON THE ISSUE OF DISALLOWANCE UNDER SECTION 14A OF THE ACT WAS THAT ONLY THOSE INVESTMENTS WHICH HAVE YIELDED EXEM PT INCOME SHOULD BE CONSIDERED FOR MAKING DISALLOWANCE. THE LD. AUTHO RIZED REPRESENTATIVE FOR THE ASSESSEE FURNISHED A CHART GIVING DETAILS O F THE SECURITIES ON WHICH 5 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) THE ASSESSEE HAS EARNED DIVIDEND INCOME. AS PER TH E CHART THE ASSESSEE HAS EARNED DIVIDEND INCOME ON FOLLOWING INVESTMENTS :- (I) HINDALCO INDUSTRIES LTD. - RS.4,52,33,555/- (II) KOTAK MAHINDRA BANK LTD. - RS. 770/- (III) AADITYA BIRLA FINANCE LTD. PRAF. SHARE - RS.3 ,29,10,960/- (IV) MUTUAL FUNDS BIRLA SUNLIFE CASH BALANCE- RS 19, 47,050/- TO SUPPORT HIS THIRD CONTENTION, THE LD. AUTHORIZE D REPRESENTATIVE FOR THE ASSESSEE PLACED RELIANCE ON THE FOLLOWING DECISIONS :- (1) ACIT VS. VIREET INVESTMENTS LTD. (2017) 165 ITD 27 (DEL) (SB) (2) GODREJ AGROVAT LTD. VS. DCIT IN ITA NO.4375/MUM /2017 DECIDED ON 13/03/2019. (3) PCIT VS. SHRENO LTD.(SUPRA) 408 ITR 401 (GUJ) THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER SUBMITTED THAT IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR I.E. 2009-10, THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.2525/M/2014 (SUPRA ) HAS RESTORED THIS ISSUE TO THE FILE OF ASSESSING OFFICER FOR RECOMPUT ATION OF DISALLOWANCE U/R 8D(2)(III) OF THE RULES. 4. SHRI. ANAND MOHAN REPRESENTING THE DEPARTMENT FA IRLY ADMITTED THAT THE ISSUE OF DISALLOWANCE UNDER SECTION 14A OF THE ACT WAS THE SUBJECT MATTER OF DISPUTE IN THE APPEAL BY THE REVE NUE AS WELL AS BY THE ASSESSEE IN ASSESSMENT YEAR 2009-10. THE LD. DEPA RTMENTAL REPRESENTATIVE POINTED THAT THE ISSUE WAS RESTORED BACK TO THE FILE OF 6 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) ASSESSING OFFICER FOR RECOMPUTATION OF DISALLOWANCE IN THE LIGHT OF VARIOUS DECISIONS OF HONBLE HIGH COURTS AND THE TRIBUNAL. THE LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY CONTROVERTED THE CONTENTI ONS OF THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT BEF ORE MAKING DISALLOWANCE NO SATISFACTION WAS RECORDED BY THE AS SESSING OFFICER. THE LD. DEPARTMENTAL REPRESENTATIVE POINTED THAT THE ASSESS ING OFFICER IN PARA 3.1OF THE ASSESSMENT ORDER HAS CATEGORICALLY OBSER VED THAT HE IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM MADE BY THE ASSESSEE UNDER THE PROVISIONS OF RULE 8D(2)(III). THE ASSESSING OFFICE R ACCEPTED THE DISALLOWANCE MADE BY ASSESSEE UNDER RULE 8D(2)(II). 5. WE HAVE HEARD THE SUBMISSIONS MADE BY RIVAL SIDE S AND HAVE PERUSED THE ORDER OF AUTHORITIES BELOW. THE ASSESS EE, AS WELL AS THE REVENUE IN THEIR RESPECTIVE APPEALS HAVE ASSAILED T HE FINDINGS OF CIT(A) IN CONFIRMING/RESTRICTING DISALLOWANCE UNDER SECTION 14A R.W.R. 8D. UNDISPUTEDLY, ASSESSEE HAS EARNED TAX FREE DIVIDEND INCOME OF RS.8,00,92,335/-. THE ASSESSEE MADE SOU-MOTU DISAL LOWANCE UNDER SECTION 14A R.W..R. 8D(2) (III) OF RS.1.48 CRORES. WE FURTHER OBSERVE THAT THE ASSESSEE HAS ALSO MADE SUO-MOTU DISALLOWANCE I N RESPECT OF INTEREST EXPENDITURE U/R 8D(2)(II) RS.91.32 CRORES. THE ASS ESSING OFFICER ACCEPTED ASSESSEES SUO-MOTU DISALLOWANCE MADE U/R. 8D(2)(II ). AS REGARDS U/R. 8D(2)(III), THE ASSESSING OFFICER ENHANCED THE DISA LLOWANCE BY RS.24.55 CRORES. THE ASSESSEE CARRIED THE ISSUE IN APPEAL B EFORE CIT(A). THE CIT(A) RESTRICTED THE DISALLOWANCE U/R. 8D(2)(III) TO RS.1 7,04,69,294/- (INCLUDING SUO-MOTU DISALLOWANCE OF RS.1.48 CRORES). 7 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) 5.1 THE FIRST CONTENTION OF THE ASSESSEE IS THAT B EFORE REJECTING ASSESSEES COMPUTATION OF DISALLOWANCE U/R. 8D, THE ASSESSING OFFICER HAS NOT RECORDED SATISFACTION. WE HAVE EXAMINED THE AS SESSMENT ORDER. THE ASSESSING OFFICER AFTER REPRODUCING THE EXTRACTS OF THE ASSESSEES SUBMISSION HAS NEGATED THE CONTENTION OF THE ASSESS EE BY EXPRESSING HIS VIEW IN PARA 3.5 OF THE ASSESSMENT ORDER. THEREAFT ER, IN PARA 3.7 THE ASSESSING OFFICER HAS COMPUTED THE DISALLOWANCE U/R . 8D(2). THE ASSESSING OFFICER AFTER EXAMINING BOOKS OF THE ASSE SSEE ACCEPTED DISALLOWANCE MADE BY ASSESSEE IN RESPECT OF INTERES T EXPENDITURE. THE MANNER OF RECORDING SATISFACTION UNDER SECTION. 1 4A R.W.R.8D(2) IS SUBJECTIVE. THERE IS NO SPECIFIED METHOD OR PERFOR MA FOR RECORDING OF SATISFACTION BY THE ASSESSING OFFICER. IF THE ASSE SSING OFFICER HAS RECORDED HIS EXPRESS SATISFACTION IN WHATSOEVER MANNER IN RE JECTING ASSESSEES SUO MOTU DISALLOWANCE, THE CONDITION AS ENVISAGED IN SE CTION 14A(2) IS COMPLIED WITH. WE DO NOT CONCUR WITH THE CONTENTIO N OF THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT THE ASSESSING OFFICER HAS NOT RECORDED SATISFACTION BEFORE REJECTING ASSESSEE S METHOD OF COMPUTATION OF SUO-MOTU DISALLOWANCE. HENCE, THE F IRST CONTENTION OF THE ASSESSEE FAILS. 5.2 THE SECOND CONTENTION OF THE ASSESSEE IS THAT NO DISALLOWANCE U/R.8D(2)(II) IS WARRANTED AS THE ASSESSEE IS HAVIN G OWN INTEREST FREE FUNDS IN THE SHAPE OF SHARE CAPITAL, RESERVES & SURPLUS AND PROFITS MORE THAN THE INVESTMENTS MADE. HENCE, THERE IS NO INTEREST EXPENDITURE. THE ASSESSEE BY WAY OF ADDITIONAL GROUND OF APPEAL IS S EEKING RELIEF IN RESPECT OF DISALLOWANCE OF INTEREST EXPENDITURE UNDER RULE 8D(2)(II). THE ASSESSEE SUO MOTU DISALLOWED RS.91.32 CRORES UNDER RULE 8D(2 )(II). THE SAME WAS 8 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) ACCEPTED BY THE ASSESSING OFFICER. THE HON'BLE BOMB AY HIGH COURT IN THE CASE OF CIT VS. HDFC BANK LTD.(SUPRA) HAS HELD THAT WHERE THE ASSESSEE IS HAVING BORROWED FUNDS AND OWN INTEREST FREE FUNDS, PRESUMPTION IS THAT THE INVESTMENTS ARE MADE BY UTILIZING OWN INTEREST FREE FUNDS. THE SAME VIEW HAS BEEN REITERATED BY THE HONBLE HIGH COURT IN THE CASE OF HDFC VS. DCIT(SUPRA) AND PCIT VS. SHRENO LTD.(SUPRA). THUS, IN PRINCIPLE WE HOLD THAT NO DISALLOWANCE UNDER SECTION 14A R.W.R. 8D(2) (II) IS WARRANTED IF, THE ASSESSEE IS HAVING SUFFICIENT OWN INTEREST FREE FUN DS TO COVER THE INVESTMENTS MADE. HOWEVER, FOR THE PURPOSE OF VERI FICATION OF THIS FACT, WE DEEM IT APPROPRIATE TO RESTORE THIS ISSUE BACK T O THE FILE OF ASSESSING OFFICER. THE ASSESSING OFFICER AFTER EXAMINING THE FINANCIAL STATEMENTS OF THE ASSESSEE, IF SATISFIED, THAT OWN INTEREST FREE FUNDS OF THE ASSESSEE ARE MORE THAN THE INVESTMENTS MADE, SHALL MAKE NO DISAL LOWANCE U/R.8D(2)(II). 5.3 THE THIRD CONTENTION OF THE ASSESSEE IS THAT FO R THE PURPOSE OF COMPUTING DISALLOWANCE U/R.8D(2)(III) ONLY THOSE IN VESTMENTS ARE TO BE CONSIDERED WHICH HAVE YIELDED EXEMPT INCOME. THIS CONTENTION OF THE ASSESSEE IS SUPPORTED BY THE DECISION RENDERED IN T HE CASE OF ACIT VS.VIREET INVESTMENTS PVT. LTD.(SUPRA). THE ASSESS EE HAS FILED FACT SHEET LISTING THE INVESTMENTS WHERE THE ASSESSEE HAS EARN ED DIVIDEND INCOME. WE DEEM IT APPROPRIATE TO RESTORE THIS ISSUE TO THE FILE OF ASSESSING OFFICER FOR RECOMPUTATION OF DISALLOWANCE U/R.8D(2) (III) IN LINE WITH THE DECISION OF SPECIAL BENCH IN THE CASE OF DCIT VS. VIREET INVESTMENTS PVT. LTD.(SUPRA). THUS IN VIEW OF OUR ABOVE FINDING, GR OUND NO.1 AND ADDITIONAL GROUND NO.1 OF THE APPEAL BY THE ASSESSE E ARE PARTLY ALLOWED FOR STATISTICAL PURPOSE. 9 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) DISALLOWANCE U/S.14A VIS-A-VIS COMPUTATION OF BOOK PROFITS U/S.115JB: 6. GROUNDS -2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN :- I) APPLYING THE DISALLOWANCE QUANTIFIED AS P ER RULE 8D TO BOOK PROFIT ALSO, II) NOT RESTRICTING THE DISALLOWANCE OF RS. 1, 48,32,2437- UNDER RULE 8D(2)(III) R.W.S.14A FOR COMPUTING BOOK PROFIT U/S 115JB. THE LEARNED AO BE DIRECTED TO ALLOW THE DEDUCTION O F THE ABOVE AMOUNT FROM MAT INCOME AND REDUCE THE TOTAL INCOME ACCORDINGLY. 6.1 IN THIS GROUND, THE ASSESSEE HAS ASSAILED THE O RDER OF CIT(A) IN UPHOLDING THE FINDINGS OF ASSESSING OFFICER IN COMP UTING DISALLOWANCE U/R.8D(2)(III) R.W.S.14A OF THE ACT ON BOOK PROFITS . THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE CONTENDED THAT THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF BENGAL FINANCE & INVESTMENTS P VT. LTD., IN INCOME TAX APPEAL NO.337 OF 2013 DECIDED ON 10/02/2015 HAS HEL D THAT AMOUNT DISALLOWED UNDER SECTION 14A OF THE ACT CANNOT BE A DDED TO ARRIVE AT A BOOK PROFIT FOR THE PURPOSE OF SECTION 115JB OF THE ACT. SIMILAR VIEW HAS BEEN TAKEN BY THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. VIREET INVESTMENTS PVT. LTD.(SUPRA). 7. WE FIND MERIT IN THE CONTENTIONS OF THE LD. AUT HORIZED REPRESENTATIVE FOR THE ASSESSEE. FOR THE PURPOSE O F COMPUTATION OF BOOK PROFITS UNDER SECTION115JB, DISALLOWANCE MADE UNDER SECTION 14A R.W.R. 8D CANNOT BE ADDED. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. BENGAL FINANCE & INVESTMENT PVT. LTD.(SUPRA ) WHILE ANSWERING THE SUBSTANTIAL QUESTION OF LAW ON THIS ISSUE AFFIRMING FINDINGS OF TRIBUNAL OBSERVED : 10 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) 4. SO FAR AS QUESTION (B) IS CONCERNED, THE IMPUGN ED ORDER OF THE TRIBUNAL FOLLOWED ITS DECISION IN M/S ESSAR TELEHOLDINGS LTD . V/S. DCIT IN ITA NO. 3850/MUM/2010 TO HELD THAT AN AMOUNT DISALLOWED UND ER SECTION 14-A OF THE ACT CANNOT BE ADDED TO ARRIVE AT BOOK PROFIT FOR P URPOSES OF SECTION 115JB OF THE ACT. THE REVENUES APPEAL AGAINST THE ORDER OF THE TRIBUNAL IN M/S. ESSAR TELEHOLDINGS (SUPRA) WAS DISMISSED BY THIS COURT IN INCOME TAX APPEAL NO. 438 OF 2012 RENDERED ON 7 TH AUGUST, 2014. IN VIEW OF THE ABOVE, QUESTION (B) D OES NOT RAISE ANY SUBSTANTIAL QUESTION OF LAW. THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF VI REET INVESTMENTS PVT. LTD.(SUPRA) REITERATED THE VIEW BY HOLDING THAT COM PUTATION UNDER CLAUSE (F) OF EXPLANATION 1 TO SECTION 115JB(2), IS TO BE MADE WITHOUT RESORTING TO THE COMPUTATION AS CONTEMPLATED UNDER SECTION 14A R .W.R. 8D. THUS, IN THE LIGHT OF THE ABOVE DECISIONS, GROUND NO.2 OF THE APPEAL BY THE ASSESSEE IS ALLOWED. ADDITIONAL DEPRECIATION: 8. GROUND NO. 3 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE ACTION OF THE LEA RNED AO FOR DISALLOWING ADDITIONAL DEPRECIATION OF RS. 5,71,08,316/- BEING 10% ON THE ASSETS ACQUIRED AND PUT TO USE FOR LESS THAN 180 DAYS IN EARLIER AS SESSMENT YEAR I.E AY 2009-10. THE LEARNED AO BE DIRECTED TO ALLOW THE REMAINING C LAIM OF ADDITIONAL DEPRECIATION IN THIS ASSESSMENT YEAR AND TO REDUCE THE TOTAL INCOME ACCORDINGLY. 8.1 THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSES SEE SUBMITTED THAT THE CIT(A) HAS ERRED IN UPHOLDING THE ACTION OF ASS ESSING OFFICER IN DISALLOWING ADDITIONAL DEPRECIATION ON ASSETS ACQUI RED AND PUT TO USE FOR LESS THAN 180 DAYS IN EARLIER ASSESSMENT YEARS. TH E LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT SIM ILAR ISSUE HAD COME UP 11 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) BEFORE THE TRIBUNAL IN ASSESSEES APPEAL FOR ASSESS MENT YEAR 2009-10 IN ITA NO.2525/MUM/2014(SUPRA). THE TRIBUNAL FOLLOWIN G THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF PCIT VS. G ODREJ INDUSTRIES LTD., INCOME TAX APPEAL NO.511 OF 2016 DECIDED ON 24/04/2 018 HAS ALLOWED THE SIMILAR GROUND RAISED BY THE ASSESSEE. 9. WE FIND THAT THE ASSESSING OFFICER HAS DISALLOWE D THE ASSESSEES CLAIM OF ADDITIONAL DEPRECIATION AMOUNTING TO RS.5, 71,08,316/- IN RESPECT OF THE ASSETS ACQUIRED AND PUT TO USE FOR LESS THAN 180 DAYS IN THE EARLIER ASSESSMENT YEARS. THE ASSESSING OFFICER HAS ALLOWED 50% CLAIM OF ADDITIONAL DEPRECIATION IN THE CURRENT ASSESSMENT Y EAR AND HAS DIRECTED TO REDUCE THE TOTAL INCOME ACCORDINGLY. WE OBSERVE TH AT IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR SIMILAR ISSUE HAD COME U P BEFORE THE TRIBUNAL. THE CO-ORDINATE BENCH OF THE TRIBUNAL AFTER PLACING RELIANCE ON THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN T HE CASE OF PCIT VS. GODREJ INDUSTRIES (SUPRA) ALLOWED THE CLAIM OF THE ASSESSE E. 9.1 THE LD. DEPARTMENTAL REPRESENTATIVE HAS NOT BEE N ABLE TO CONTROVERT THE FINDINGS OF CO-ORDINATE BENCH OF THE TRIBUNAL ON THIS ISSUE IN ASSESSEES OWN CASE. WE FIND NO REASON TO TAKE A DIFFERENT VIEW, HENCE, FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEE S OWN CASE IN THE IMMEDIATE PRECEDING ASSESSMENT YEAR, GROUND NO.3 O F THE APPEAL IS ALLOWED IN SIMILAR TERMS. EXPENDITURE ON CORPORATE ADVERTISEMENT: 10. GROUND NO.4: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS ES AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE ACTION OF THE LEA RNED AO BY TREATING THE 12 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) EXPENSES OF RS. 72,79,283/- INCURRED TOWARDS CORPOR ATE ADVERTISEMENT AS CAPITAL EXPENDITURE. THE LEARNED AO BE DIRECTED TO ALLOW THE CLAIM OF THE CORPORATE ADVERTISING OF RS.72,79,2837- AS REVENUE EXPENSES AND TO REDUCE THE TOTAL INCOME ACCORDINGLY 10.1 THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSE SSEE SUBMITTED THAT ASSESSEE HAD INCURRED ADVERTISEMENT EXPENDITURE RS .72,79,283/- DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER A PPEAL. THE ASSESSING OFFICER DISALLOWED THE ADVERTISEMENT EXPENDITURE ST ATING IT TO BE EXPENDITURE IN THE NATURE OF CORPORATE BRAND BUILD ING AND HELD THE SAME TO BE CAPITAL IN NATURE. THE LD. AUTHORIZED REPRES ENTATIVE FOR THE ASSESSEE SUBMITTED THAT SIMILAR DISALLOWANCE OF EXPENDITURE WAS MADE IN ASSESSMENT YEAR 2009-10. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL IN ITA NO.2525/MUM/2014(SUPRA). THE TRIBUNAL ALLOWED THE SAME HOLDING IT TO BE REVENUE EXPENDITU RE. 11. WE HAVE HEARD THE SUBMISSIONS MADE BY RIVAL SID ES AND HAVE EXAMINED THE ORDERS OF AUTHORITIES BELOW. THE EXPE NDITURE INCURRED BY ASSESSEE TOWARDS CORPORATE ADVERTISEMENT WAS DISALL OWED HOLDING IT TO BE CAPITAL IN NATURE. WE FIND THAT SIMILAR DISALLOWAN CE OF ADVERTISEMENT EXPENDITURE WAS MADE IN ASSESSMENT YEAR 2009-10. THE CO-ORDINATE BENCH OF THE TRIBUNAL, FOLLOWING THE DECISION OF HO N'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. ASIAN PAINTS (INDIA) LTD., REPORTED AS 243 TAXMAN 348(BOM) HELD THE EXPENDITURE AS REVENUE IN NATURE. THE LD. DEPARTMENTAL REPRESENTATIVE HAS NOT BEEN ABLE TO CO NTROVERT THE FINDINGS OF THEN CO-ORDINATE BENCH OF THE TRIBUNAL IN ASSESS EES OWN CASE ON THE SAME ISSUE. FOLLOWING THE SAME REASONING, WE HOLD CORPORATE 13 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) ADVERTISEMENT EXPENDITURE AS REVENUE EXPENDITURE. THUS, GROUND NO.4 OF THE APPEAL OF THE ASSESSEE IS ALLOWED. ESOP EXPENSES:- 12. GROUND NO.5: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF ESOP EXPENSES OF RS. 9,83,7727- BY TREATING THE EXPENSES TO BE CAPITAL I N NATURE. THE LEARNED AO BE DIRECTED TO TREAT ESOP EXPENSES OF RS. 9,83,7727- A S REVENUE EXPENDITURE AND TO REDUCE THE TOTAL INCOME ACCORDINGLY [ 12.1 THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSE SSEE SUBMITTED THAT THE ASSESSEE HAD CLAIMED ESOP EXPENDITURE OF RS.9,8 3,772/-. THE ASSESSING OFFICER HELD THE EXPENDITURE TO BE ON CAP ITAL ACCOUNT AND DISALLOWED ASSESSEES CLAIM. THE LD. AUTHORIZED R EPRESENTATIVE FOR THE ASSESSEE POINTED THAT SIMILAR EXPENDITURE WAS CLAIM ED BY THE ASSESSEE IN ASSESSMENT YEAR 2009-10 AND THE SAME WAS DISALLOWE D BY THE ASSESSING OFFICER FOR IDENTICAL REASONS. THE TRIBUNAL IN ASS ESSEES APPEAL FOR ASSESSMENT YEAR 2009-10 IN ITA NO.2525/MUM/2014(SU PRA) ALLOWED THE ASSESSEES CLAIM HOLDING THE EXPENDITURE TO BE ON R EVENUE ACCOUNT. 13. WE HAVE HEARD THE SUBMISSIONS MADE BY RIVAL SID ES. WE FIND THAT IDENTICAL ISSUE WAS RAISED IN AN APPEAL BY THE AS SESSEE BEFORE THE TRIBUNAL IN ASSESSMENT YEAR 2009-10. THE TRIBUNAL IN TURN FOLLOWING THE ORDER OF CO-ORDINATE BENCH IN ASSESSEES OWN CASE I N ITA NO.3033/MUM/2012 FOR ASSESSMENT YEAR 2008-09 DECID ED ON 09/12/2015 ALLOWED ASSESSEES CLAIM AND HELD HE EXP ENDITURE IN RESPECT OF ESOP AS REVENUE IN NATURE. NO CONTRARY DECISION HAS BEEN PLACED BY LD. 14 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) DEPARTMENTAL REPRESENTATIVE. RESPECTFULLY FOLLOWIN G THE DECISIONS OF CO- ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CA SE FOR THE PRECEDING ASSESSMENT YEARS WE HOLD ESOP EXPENDITURE AS REVE NUE IN NATURE. THE GROUND NO.5 OF THE APPEAL IS ALLOWED FOR PARITY OF REASONS. CORPORATE GUARANTEE TO SUBSIDIARIES:- 14. GROUND NO.6: 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED :- I. TREATING THE CORPORATE GUARANTEE GIVEN BY THE APPELLANT FOR ITS OVERSEAS SUBSIDIARY AS AN INTERNATIONAL TRANSACTION U7S 92 O F THE INCOME TAX ACT, 1961. THE LEARNED TPO BE DIRECTED NOT TO TREAT THE SAME A S AN INTERNATIONAL TRANSACTION AND DELETE THE ABOVE ADDITION. II. PARTLY CONFIRMING THE ADDITIONS IN TRANSFER P RICING TO ARRIVE AT ARM'S LENGTH PRICE APPLYING RATE OF 0.5% TOWARDS COMMISSION ON C ORPORATE GUARANTEE/ PERFORMANCE GUARANTEE ON LOAN TAKEN FROM FOREIGN BA NK BY ABMWI. 14.1 THE LD. AUTHORIZED REPRESENTATIVE FOR THE AS SESSEE SUBMITTED THAT THE TPO HAS ERRED IN HOLDING CORPORATE GUARANTEE GIVEN TO SUBSIDIARIES AS INTERNATIONAL TRANSACTION. THE CIT(A) HAS UPHELD THE FINDINGS OF TPO AND HAS PARTLY CONFIRMED THE ADDITION BY APPLYING 0.5% RATE ON PAYMENT OF COMMISSION AND CORPORATE GUARANTEE ON LOANS TAKEN F ROM FOREIGN BANKS. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FAIRLY ADMITTED THAT THE TRIBUNAL IN THE CASE OF ASSESSEES GROUP CONCE RN M/S. ADITYA BIRLA MINACS WORLDWIDE VS DCIT REPORTED AS 56 TAXMANN.C OM 317(MUM)(TRIB) HAS ADOPTED 0.5% AS ARMS LENGTH GUARANTEE COMMISSI ON CHARGES IN RESPECT OF CORPORATE GUARANTEE GIVEN BY ASSESSEE FO R ITS FOREIGN ASSOCIATED ENTERPRISE. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER 15 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) POINTED THAT ASSESSEE HAS FILED APPEAL ON THIS ISSU E BEFORE THE HON'BLE BOMBAY HIGH COURT AND THE HON'BLE HIGH COURT HAS ADMITTED THE APPEAL OF ASSESSEE. 15. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY DEFENDING THE ORDER OF CIT(A) ON THE ISSUE OF CORPO RATE GUARANTEE SUBMITTED THAT THERE ARE SEVERAL DECISIONS WHEREIN CORPORATE GUARANTEE GIVEN TO FOREIGN BANKS FOR AE HAS BEEN HELD TO BE I NTERNATIONAL TRANSACTION AND HAS UPHELD ARMS LENGTH PRICE OF SUCH TRANSACT ION AT 0.5%. THE LD. DEPARTMENTAL REPRESENTATIVE, TO SUBSTANTIATE HIS C ONTENTIONS REFERRED TO FOLLOWING DECISIONS:- 1. INSTRUMENTARIUM CORPORATION LTD. VS. ADIT, 71 T AXMANN.COM 193 (KOL) (TRIB)(S.B) 2. MAHINDRA & MAHINDRA LTD. VS. DCIT, 24 TAXMANN. COM 267 (MUM) 3. CIT VS. EVEREST KANTO CYLINDER LTD.,58 TAXMANN .COM 254(BOM) 4. ADITYA BIRLA MINACS WORLDWIDE LTD. VS. DCIT, 5 6 TAXMANN.COM 317 (MUM- TRIB) 16. BOTH SIDES HEARD. THE GROUND NO.6 OF THE APPEA L IS AGAINST CONFIRMING OF ADDITION IN RESPECT OF CORPORATE GUAR ANTEE GIVEN BY THE ASSESSEE FOR ITS FOREIGN AE. THE CIT(A) HAS CONFIRM ED THE ADDITION BY ADOPTING 0.5% COMMISSION RATE. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS FAIRLY ADMITTED THAT IN THE CASE O F ASSESSEES SISTER CONCERN, SIMILAR ADDITION HAS BEEN CONFIRMED BY THE TRIBUNAL. FOR THE SAKE OF COMPLETENESS THE RELEVANT EXTRACT OF TRIBUN ALS DECISION IN THE CASE OF ADITYA BIRLA MINACS WORLDWIDE LTD. IS REPR ODUCED BELOW:- 16 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) 2.5 HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD, WE AGREE WITH THE ALTERNATIVE PLEA OF THE L D. AR THAT THE ARMS LENGTH GUARANTEE COMMISSION CHARGES CAN BE CONSIDERED AT T HE RATE OF 0.5% AS HELD BY THIS TRIBUNAL IN A SERIES OF DECISIONS REFERRED ABO VE. IN THE CASE OF EVEREST KANTO CYLINDER LTD (SUPRA), THE TRIBUNAL WHILE CONSIDERIN G AN IDENTICAL ISSUE HAS HELD IN PARA 9 AS UNDER:- 9. NOW, COMING TO THE MERIT OF THE ADDITION SO MAD E, WE FOUND THAT THE ISSUE HAS ALREADY BEEN DECIDED BY THE TRIBUNAL IN I MMEDIATELY PRECEDING YEAR IN ASSESSEES OWN CASE, WHEREIN CHARGING OF 0. 5% GUARANTEE COMMISSION FROM AE WAS HELD TO BE QUITE NEAR TO 0.6 %, WHERE ASSESSEE HAS PAID INDEPENDENTLY TO THE ICICI BANK AND CHARGI NG OF GUARANTEE COMMISSION @0.5% FROM ITS AE WAS HELD TO BE AT ARM S LENGTH. THE PRECISE OBSERVATION OF THE BENCH FOR THE ASSESSMENT YEAR 2007-08 ARE AS UNDER :- 'THE UNIVERSAL APPLICATION OF RATE OF 3 PE RCENT FOR GUARANTEE COMMISSION CANNOT BE UPHELD IN EVERY CASE AS IT IS LARGELY DEPENDENT UPON THE TERMS AND CONDITIONS, ON WHICH LOAN HAS BE EN GIVEN, RISK UNDERTAKEN, RELATIONSHIP BETWEEN THE BANK AND THE C LIENT, ECONOMIC AND BUSINESS INTEREST ARE SOME OF THE MAJOR FACTORS WHI CH HAS TO BE TAKEN INTO CONSIDERATION. ' .IN THIS CASE, THE ASSESSEE HAS ITSELF CHARGED 0.5% GUARANTEE COMMISSION FROM ITS AE, THEREFORE, I T IS NOT A CASE OF NOT CHARGING OF ANY KIND OF COMMISSION FROM ITS AE. THE ONLY POINT WHICH HAS TO BE SEEN IN THIS CASE IS WHETHER THE SAME IS AT ALP OR NOT. WE HAVEALREADY COME TO A CONCLUSION IN THE FOREGOING P ARAS THAT THE RATE OF 3% BY TAKING EXTERNAL COMPARABLE BY THE TPO, CANNOT BE SUSTAINED IN FACTS OF THE PRESENT CASE. WE ALSO FIND THAT IN AN INDEPENDENTTRANSACTION, THE ASSESSEE HAS PAID 0.6% GUARANTEE COMMISSION TO IGIGI BANK INDIA FOR ITS CREDIT ARRAN GEMENT. THIS COULD BE A VERY GOOD PARAMETER AND A COMPARABLE FOR TAKING I T AS INTERNAL GUP AND COMPARING THE SAME WITH THE TRANSACTION WITH TH E AE. THE CHARGING OF 0.5% GUARANTEE COMMISSION FROM THE AE IS QUITE N EAR TO 0.6%, WHERE THE ASSESSEE HAS PAID INDEPENDENTLY TO THE IGIGI BA NK AND CHARGING OF GUARANTEE COMMISSION AT THE RATE OF 0.5% FROM ITS A E CAN BE SAID TO BE AT ARMS LENGTH. THE DIFFERENCE OF 0.1% CAN BE IGNOR ED AS THE RATE OF INTEREST ON WHICH IGIGI BANK, BAHRAIN BRANCHHAS GIV EN LOAN TO AE (I.E. SUBSIDIARY COMPANY) IS AT 5.5%, WHEREAS THE ASSESSE E IS PAYING INTEREST RATE OF MORE THAN 10% ON ITS LOAN TAKEN WITH IGIGI BANK IN INDIA. THUS, SUCH A MINOR DIFFERENCE CAN BE ON ACCOUNT OF DIFFER ENTIAL RATE OF INTEREST. THUS, ON THESE FACTS, WE DO NOT FIND ANY REASON TO UPHOLD ANY KIND OF UPWARD ADJUSTMENT IN ALP IN RELATION TO CHARGING OF GUARANTEE COMMISSION. AS THE FACTS AND CIRCUMSTANCES OF THE CASE DURING T HE YEAR UNDER CONSIDERATION ARE PARI MATERIA, RESPECTFULLY FOLLOWING THE DECISI ON OF THE TRIBUNAL IN ASSESSEES OWN CASE, WE DIRECT THE AO TO COMPUTE ARMS LENGTH PRICE OF TRANSACTION AS PER THE DIRECTION GIVEN BY THE TRIBUNAL IN THE ABOVE OR DER FOR A.Y. 2007-08. 17 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) 2.6 SIMILAR VIEW HAS BEEN TAKEN BY THE TRIBUNAL IN ALL ABOVE REFERRED DECISIONS. ACCORDINGLY, FOLLOWING THE EARLIER DECISIONS OF THI S TRIBUNAL, WE DIRECT THE AO/TPO TO ADOPT 0.5% AS ARMS LENGTH GUARANTEE COMM ISSION CHARGES IN RESPECT OF THE GUARANTEE PROVIDED BY THE ASSESSEE F OR OBTAINING THE LOAN BY THE AE. THUS, IN VIEW OF ABOVE FINDINGS OF TRIBUNAL IN ASSE SSEES GROUP CONCERN AND THE NATURE OF TRANSACTION IN THE PRESENT CASE B EING SIMILAR, THE GROUND NO.6 OF THE APPEAL IS DECIDED AGAINST THE ASSESSEE, FOR PARITY OF REASONS. INTEREST UNDER SECTION.234B,234C & 234C:- 17. GROUND NO.7: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO HAS ERRED IN CHARGING INTEREST U/S 234B, 234C & 234 D. THE LEARNED AO BE DIRECTED TO DELETE / REDUCE THE INTEREST U/S 234B, 234C & 234D ACCORDINGLY 17.1 CHARGING OF INTEREST UNDER SECTION. 234B,234C & 234D IS MANDATORY AND CONSEQUENTIAL. ACCORDINGLY, THE GROUND NO. 7 I S DISMISSED SANS-MERIT. . PENALTY UNDER SECTION 271(1)(C) 18. GROUND NO.8: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED AO HAS ERRED IN INITIATING PENALTY PROCEEDINGS U/S 271 (L)(C) OF THE INCOME TAX ACT, 1961. THE LEARNED AO BE DIRECTED TO DROP THE PENALT Y PROCEEDINGS INITIATED U/S 271(L)(C) 18.1 THE GROUND NO.8 OF THE APPEAL ASSAILING INI TIATION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT, IS PREMATURE AT THIS STAGE. HENCE, THE SAME IS DISMISSED AS SUCH. 18 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) EDUCATION CESS: (ADDITIONAL GROUND NO.3) 19. THE ASSESSEE RAISED ADDITIONAL GROUND NO.3 ASSA ILING DISALLOWANCE OF EDUCATION CESS AND SECONDARY HIGHER EDUCATION CE SS. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTE D THAT SIMILAR DEDUCTION WAS CLAIMED IN ASSESSMENT YEAR 2009-10. THE SAME WAS ALLOWED BY THE TRIBUNAL IN ITA NO. 2525/MUM/2014 (S UPRA). THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FILED A SHEET GIVING DETAILS OF EDUCATION CESS AND SECONDARY HIGHER EDUCATION CESS, THE SAME IS REPRODUCED HEREIN BELOW:- EDUCATION CESS AND SECONDARY HIGHER EDUCATION CESS ON INCOME TAX. RS.1,74,67,120 EDUCATION CESS AND SECONDARY HIGHER EDUCATION CESS ON DIVIDEND DISTRIBUTION TAX RS. 12,91,630 TOTAL CLAIM OF EDUCATION CESS RS. 1,87,58,750 20. WE FIND THAT THE CO-ORDINATE BENCH OF THE TRIBU NAL IN ASSESSEES APPEAL FOR ASSESSMENT YEAR 2009-10 IN ITA NO.2525/ MUM/2014 (SUPRA) HAS ALLOWED ASSESSEES CLAIM OF EDUCATIONAL CESS F OLLOWING THE DECISION OF HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CHAMPA L FERTLIZERS AND CHEMICALS LTD. VS JCIT IN INCOME TAX APPEAL NO.52 & 68 OF 2018 DECIDED ON 31/07/2018. WE DEEM IT APPROPRIATE TO RESTORE T HIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER FOR VERIFICATION OF THE A SSESSEES CLAIM AND ALLOW THE SAME IN LINE WITH THE AFORESAID DECISION OF THE HON'BLE RAJASTHAN HIGH COURT. THE ADDITIONAL GROUND NO.3 OF THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 19 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) 21. THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED IN THE TERMS AFORESAID. ITA NO.4704/MUM/2015(A.Y.2010-11): 22. THE REVENUE HAS ASSAILED THE FINDINGS OF CIT(A) BY RAISING 11 GROUNDS OF APPEAL. THE GROUNDS RAISED BY THE REVEN UE ARE TAKEN UP FOR ADJUDICATION IN SERIATIM. 23. GROUNDS NO.1: 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A), RELYING ON SUBMISSIONS OF THE ASSESSEE, ERRED IN DIRECTING THE AO TO RESTRICT THE DISALLOWANCE U/S 14A OF THE I. T. ACT AT RS. 17,04, 69,294/- WITHOUT APPRECIATING THE FACT THAT, THE AO HAS COMPUTED THE DISALLOWANCE CORRECTLY AS PER PROVISIONS OF SECTION 14A R.W.R. 8D OF THE I. T. ACT.' 23.1 GROUND NO.1 OF APPEAL IS CORRESPONDING TO GRO UND NO.1 AND ADDITIONAL GROUND NO.1 & 2 OF THE ASSESSEES APPEAL . SINCE, THE GROUND NO.1 AND ADDITIONAL GROUNDS NO. 1 &2 OF THE ASSESSE E IN RESPECT OF DISALLOWANCE UNDER SECTION 14A R.W.R. 8D, HAVE BEEN ALLOWED FOR STATISTICAL PURPOSES, THE GROUND NO.1 OF THE APPEAL BY REVENU E IS ALSO ALLOWED FOR STATISTICAL PURPOSE. 24. GROUND NO.2: 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A), ERRED IN DECIDING THAT THE TDS PROVISIONS WERE NOT APPLICABLE FOR THE PROVISIONS MADE AT THE YEAR-END RELYING ON THE DECISION THE HO N'BLE TRIBUNAL IN ASSESSEE'S OWN CASE FOR A. Y. 2006-07 WHICH INTERALIA RELIED U PON THE CASES OF THE HON'BLE TRIBUNALS NAMELY, MAHINDRA & MAHINDRA LTD ('MAHINDR A') AND INDUSTRIAL DEVELOPMENT BANKING COMPANY ('IDBI'), IGNORING THE FACT THAT, THE FACTS AND CIRCUMSTANCES OF THE RELIED UPON CASES OF MAHINDRA & IDBI WERE COMPLETELY DIFFERENT FROM THAT OF THE ASSESSEE.' 20 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) 24.1 THE GROUND NO.2 OF THE APPEAL BY REVENUE IS WITH RESPECT TO DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT ON THE PROVISION MADE AT THE END OF THE YEAR RS.5,84,07,299/-. THE LD.AUTH ORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED THAT IDENTICAL ISSUE WAS R AISED IN THE APPEAL BY THE REVENUE IN ASSESSMENT YEAR 2009-10, ITA NO.2963 /MUM/2014 DECIDED ON 20/12/2019. WE FIND THAT THE CO-ORDINATE BENCH OF THE TRIBUNAL FOLLOWING THE DECISION IN ASSESSEES OWN CASE IN ITA NO.3033/MUM/ 2012 FOR ASSESSMENT YEAR 2008-09 DECIDED ON 09/12/2015 DELETED THE DISA LLOWANCE MADE UNDER SECTION 40(A)(IA) OF THE ACT. THE LD.DEPARTM ENTAL REPRESENTATIVE HAS NOT BEEN ABLE TO DISTINGUISH THE FINDINGS OF TH E CO-ORDINATE BENCH OF THE TRIBUNAL ON THIS ISSUE IN IMMEDIATELY PRECEDIN G ASSESSMENT YEAR IN ASSESSEES CASE. THE CIT(A) HAS DELETED THE ADDITIO N BY FOLLOWING THE ORDER OF TRIBUNAL IN ASSESSEES CASE IN ITA NO. 8427/MUM/ 2010 FOR A.Y. 2006-07 DECIDED ON 17-09-2014. WE OBSERVE THAT THIS ISSUE I S RECURRING AND THE TRIBUNAL HAS BEEN CONSISTENTLY DECIDING THE ISSUE I N FAVOUR OF ASSESSEE. SINCE, THE FACTS IN IMPUGNED A.Y. ARE SIMILAR, WE S EE NO REASON TO TAKE A DIFFERENT VIEW. WE UPHOLD THE FINDINGS OF THE CIT(A ) AND DISMISS GROUND NO.2 OF THE APPEAL BY REVENUE IN THE LIGHT OF TRIBU NAL ORDER IN ASSESSEES CASE FOR A.Y. 2009-10.. 25. GROUND NO.3: 3. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 1,72,54,631/- MADE ON ACCOUNT OF CENVAT CREDIT IGNORING THE FACT THAT THE ADDITION WAS MADE ON NET BASIS AND THE ASSESSEE, ITSELF, FOR THE AY 2006-07 WITHDREW ITS G ROUND BEFORE THE ITAT.' 21 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) 25.1 THE ASSESSING OFFICER MADE ADDITION OF RS.17,5 7,56,385/- ON ACCOUNT OF CENVAT CREDIT IN RESPECT OF CLOSING STOC K. THE CIT(A) ALLOWED ASSESSEES CLAIM BY FOLLOWING THE DECISION OF HIS P REDECESSOR IN ASSESSMENT YEAR 2005-06 TO 2008-09, WHEREIN THE CIT (A) HAD IN TURN FOLLOWED THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF CIT VS.INDO NIPPON CHEMICAL CO. LTD., REPORTED AS 261 ITR 275(S C). THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER POINTED TH AT THE TRIBUNAL IN ASSESSMENT YEAR 2008-09 IN ITA NO.3033/MUM/2012(SUP RA) HAD DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE. WE DO NOT FIND ANY INFIRMITY IN THE FINDINGS OF CI T(A) IN DELETING THE ADDITION BY FOLLOWING THE DECISION OF HONBLE APEX COURT. THE CO-ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A SSESSMENT YEAR 2008-09 HAS AFFIRMED THE FINDING OF CIT(A) IN DELETING THE ADDITION IN THE PAST. NO MATERIAL HAS BEEN BROUGHT BEFORE US BY THE LD.DEPAR TMENTAL REPRESENTATIVE DISTINGUISHING FACTS OR THE FINDING S OF TRIBUNAL ON THIS ISSUE IN A.Y. 2008-09. WE SEE NO REASON TO INTERFER E WITH THE FINDINGS OF CIT(A) ON THIS ISSUE. ACCORDINGLY, THE SAME ARE C ONFIRMED AND GROUND NO.3 OF APPEAL IS DISMISSED. 26. GROUND NO.4: 4. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING THE PROVISION FOR LEAVE SALARY RE LYING ON THE DECISION OF THE ID. TRIBUNAL IN ASSESSEE'S OWN CASE FOR A. Y. 2002-03 T O 2006-07 WHICH INTERALIA RELIED UPON THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF BHARAT EARTH MOVERS (245 ITR 428) WHICH WAS DELIVERED BEFORE THE INTRODUCTION OF SECTION 43(B)F. THE JUDGMENT OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF EXIDE INDUSTRIES LTD. HAS ALSO BEEN STAYED BY THE HON'BLE APEX COURT 22 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) 26.1 THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSE SSEE SUBMITTED THAT GROUND NO.4 OF THE APPEAL BY THE REVENUE IS AGAINST PROVISION MADE FOR LEAVE SALARY UNDER SECTION 43B(F) OF THE ACT. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE IS PERENNIAL IN NATURE. THE TRIBUNAL HAS CONSIDERED THIS ISSUE IN THE APPEALS BY THE ASSESSEE FOR A.Y. 2002-03 TO 2008-09, RESPECTIVELY AND HAS DELETED THE DISALLOWANCE. OF PROVISION OF LEAVE SALARY UNDER SE CTION 43B(F). THIS ISSUE HAD AGAIN EMERGED IN ASSESSMENT YEAR 2009-10. THE TRIBUNAL IN THE APPEAL BY THE ASSESSEE HAD RESTORED THIS ISSUE TO T HE FILE OF ASSESSING OFFICER FOR FRESH ADJUDICATION IN THE LIGHT OF D ECISION OF HON'BLE SUPREME COURT OF INDIA IN THE CASE OF EXIDE INDUSTRIES LTD. VS. UNION OF INDIA IN SPECIAL LEAVE TO APPEAL(CIVIL) NO.CC 22889/2008 DAT ED 08-05-2009. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURT HER SUBMITTED THAT A BARE PERUSAL OF PROVISION OF SECTION 43B(F) WOULD S HOW THAT DEDUCTION IS ALLOWABLE WHERE THE SUM IS PAYABLE BY THE ASSESSEE AS EMPLOYER IN LIEU OF ANY LEAVE AT THE CREDIT OF THE EMPLOYEE. EXPLANATI ON-2 TO SECTION 43B OF THE ACT FURTHER CLARIFIES THAT ANY SUM PAYABLE ME ANS A SUM FOR WHICH THE ASSESSEE INCURRED LIABILITY IN THE PREVIOUS YEA R EVEN THOUGH SUCH SUM MIGHT NOT HAVE BEEN PAYABLE WITHIN THAT YEAR UNDER THE RELEVANT LAW. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBM ITTED THAT THOUGH THE PROVISIONS OF CLAUSE (F) HAVE BEEN STRUCK DOWN BY THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF EXIDE INDUSTRIES VS. UNIO N OF INDIA REPORTED AS 292 ITR 470(CAL), THE SAID JUDGMENT HAS NOW BEEN ST AYED BY HON'BLE SUPREME COURT OF INDIA. EVEN IF THE PROVISIONS OF CLAUSE(F) ARE HELD TO BE VALID STILL THE ASSESSEE WOULD BE ENTITLED TO RELI EF IN THE LIGHT OF EXPLANATION -2. 23 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) 27. THE LD.DEPARTMENTAL REPRESENTATIVE SUBMITTED TH AT CO-ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN 20 09-10 HAS RESTORED THIS ISSUE TO THE FILE OF ASSESSING OFFICER FOR ADJUDICA TION AFTER THE SLP IN THE CASE OF EXIDE INDUSTRIES LTD. (SUPRA) PENDING BEFOR E THE HONBLE APEX COURT IS FINALLY DECIDED. THE LD.DEPARTMENTAL REPRE SENTATIVE PRAYED THAT THIS GROUND OF APPEAL MAY BE RESTORED TO THE ASSESS ING OFFICER WITH SIMILAR DIRECTION. 28. BOTH SIDES HEARD. THE CO-ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN APPEAL BY THE REVENUE IN ITA NO.3033/MUM/2012 FOR ASSESSMENT YEAR 2008-09(SUPRA) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER:- 7.NEXT GROUND IS ABOUT DISALLOWANCE OF RS.2.07 CRO RES U/S.43B(F), BEING PROVISION MADE FOR LEAVE SALARY.THE AR AND THE DR A GREED THAT IDENTICAL ISSUE WAS STANDS DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL BY EARLIER YEARS ORDERS. WE FIND THAT THE TRIBUNAL HAD DEALT THE ISS UE AS UNDER,WHILE DECIDING THE APPEAL FOR THE AY.2006-07(ITA/8427 & 8483/MUM/1 0 DT.17/09/2014): 4.GROUND NO.4 DEALS WITH DISALLOWANCE OF RS. 1.73 CRORES,MADE U/S.43B(F) OF THE ACT,BEING PROVISION MADE FOR LEAV E SALARY.WE FIND THAT SIMILAR ISSUE HAD ARISEN IN THE AY 2002-03, 2003-04 , 2004-05 AND 2005- 06 ALSO.WHILE DECIDING THE APPEAL FOR THE LAST THRE E AY.S.,THE TRIBUNAL HAD DEALT THE ISSUE AS UNDER: 4.SECOND COMMON GROUND IS ABOUT DISALLOWANCE OF PRO VISIONS MADE FOR THE LEAVE SALARY U/S.. 43F OF THE ACT AND THE AMOUN T INVOLVED ARE RS. 2.48 CRORES, 1.76 CRORES AND 2.6 CRORES.DURING THE COURSE OF HEARING BEFORE US,REPRESENTATIVES OF BOTH THE SIDES CONCEDE D THAT ISSUE WAS DECIDED BY THE TRIBUNAL IN THE YEAR 2002-03 (SUPRA) . 4.1.WE FIND THAT TRIBUNAL IN ITS ORDER HAS DECIDED THE ISSUE AS UNDE R: '15.7.WE HAVE CAREFULLY PERUSED THE ORDERS OF THE L OWER AUTHORITIES AND THE CLAIM OF THE ASSESSEE VIS--VIS SEC.43B(F).A PE RUSAL OF SEC. 43B(F) SHOWS THAT THE EXPLANATION TO SEC. 43B REFERRING TO THE AMENDMENT OF THE WORD ANY SUM PAYABLE IS APPLICABLE ONLY FOR CLA USE (A) OF SEC.43B WHICH MEANS THAT IT IS NOT APPLICABLE FOR CLAUSE (F ).HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF SRIKAKOLLU SHUBBA RAO & CO.173 ITR 708 HAS HELD THAT IN ORDER TO APPLY THE PROVISIONS OF SEC. 43B NOT ONLY 24 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) SHOULD BE THE LIABILITY TO PAY THE TAX OR DUTY BE I NCURRED IN THE ACCOUNTING YEAR BUT ALSO SHOULD BE STATUTORILY PAYA BLE IN THE ACCOUNTING YEAR. IN OUR CONSIDERED OPINION, THE PROVISION FOR LEAVE SALARY IS NOT A STATUTORY LIABILITY BUT ONLY A CONTRACTUAL LIABILIT Y WHICH IS PAYABLE ONLY IF THE EMPLOYEES RESIGNS OR RETIRED FROM THE SERVICES. WE ALSO FIND THAT THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF EXCIDE I NDUSTRIES LTD. (SUPRA) HAS STRUCK DOWN SEC. 43B(F) BEING ARBITRARY, UNCONS CIONABLE AND DEHORS THE APEX COURT DECISION IN THE CASE OF BHARAT EARTH MOVERS 245 ITR 428. IT IS RELEVANT TO STATE THAT THE TRIBUNAL IN THE CA SE OF CIT VS UNIVERSAL MEDICARE IN ITA NO. 6191/M/08, HAS FOLLOWED THE DEC ISION OF THE HONBLE SUPREME COURT IN THE CASE OF BHARAT EARTH M OVERS AND DIRECTED THE AO TO ALLOW THE AMOUNTS SO CLAIMED. RESPECTFULL Y FOLLOWING THE AFORE DISCUSSED DECISIONS, WE DIRECT THE AO TO ALLO W THE CLAIM OF PROVISIONS FOR LEAVE SALARY. GROUND NO. 6 IS ACCORD INGLY ALLOWED. RESPECTFULLY FOLLOWING THE ABOVE,GROUNDS NO.4,2 AND 2 FOR THE AY.S.UNDER APPEAL ARE DECIDED IN FAVOUR OF THE ASSE SSEE-COMPANY. IN VIEW OF THE ABOVE,GROUND NO.4 IS DECIDED IN FAVOUR OF THE ASSESSEE. RESPECTFULLY,FOLLOWING THE ABOVE DECISION,GROUND NO .3 IS DECIDED IN FAVOUR OF THE ASSESSEE . 29. THEREAFTER THIS ISSUE HAD AGAIN COME UP IN ASS ESSMENT YEAR 2009- 10.THE TRIBUNAL RESTORED THIS ISSUE BACK TO THE FIL E OF ASSESSING OFFICER WITH FOLLOWING OBSERVATIONS:- 4. WE HAVE HEARD RIVAL SUBMISSIONS. BOTH THE PARTI ES FAIRLY AGREED THAT THIS ISSUE IS COVERED BY THE ORDER OF THIS TRIBUNAL IN A SSESSEES OWN CASE IN ITA NO.3033/MUM/2012 DATED 09/12/2015 FOR A.Y.2008-09. BUT WE FIND THAT THOUGH THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF EXIDE INDUSTRIES LTD. VS UNION OF INDIA REPORTED IN 292 ITR 470 (CAL) HAD ST RUCK DOWN THE PROVISIONS OF SECTION 43B CLAUSE (F) OF THE ACT AS UNCONSTITUTION AL, THE REVENUE HAD CARRIED THE MATTER FURTHER TO THE HONBLE SUPREME COURT WHI CH INITIALLY IN SPECIAL LEAVE TO APPEAL (CIVIL) CC12060/2008 DATED 08/09/2008 HAD HELD AS UNDER:- THE PETITION WAS CALLED ON FOR HEARING TODAY. UPON HEARING THE COUNSEL, THE COURT MADE FOLLOWING ORDER. ISSUE NOTI CE IN THE MEANTIME, THERE SHALL BE STAY OF THE IMPUGNED JUDGMENT, UNTIL FURTHER ORDERS. 4.1. LATER, THE HONBLE SUPREME COURT IN SPECIAL L EAVE TO APPEAL (CIVIL) NO.(S) CC22889/2008 DATED 08/05/2009 HAD HELD AS UNDER:- THE PETITION WAS CALLED ON FOR HEARING TODAY. UPON HEARING THE COUNSEL, THE COURT MADE FOLLOWING ORDER. DELAY COND ONED LEAVE GRANTED. UPON HEARING THE FINAL DISPOSAL OF THE CIV IL APPEAL, THE DEPARTMENT IS RESTRAINED FROM RECOVERING PENALTY AN D INTEREST WHICH HAS 25 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) ACCRUED TILL DATE. IT IS MADE CLEAR THAT AS FAR AS THE OUTSTANDING INTEREST DEMAND AS ON DATE IS CONCERNED, IT WOULD BE OPEN TO THE DEPARTMENT TO RECOVER THAT AMOUNT IN CASE CIVIL APPEAL OF THE DEP ARTMENT IS ALLOWED. WE FURTHER MAKE IT CLEAR THAT THE ASSESSEE WOULD DU RING THE PENDENCY OF THIS CIVIL APPEAL PAY TAX AS IF SECTION 43B(F) I S ON THE STATUTE BOOK BUT AT THE SAME TIME IT WOULD BE ENTITLED TO MAKE A CLA IM IN ITS RETURNS 4.2 HENCE, FROM THE AFORESAID HONBLE SUPREME COU RT JUDGMENT, IT CAN BE INFERRED THAT THE HONBLE SUPREME COURT IN THE SUBS EQUENT ORDER HAD NOT STAYED THE JUDGEMENT OF HONBLE CALCUTTA HIGH COURT . WE FIND THAT THE HONBLE SUPREME COURT HAD PASSED AN INTERIM ORDER GIVING TH E AFORESAID OBSERVATIONS. HENCE, WE DEEM IT FIT AND APPROPRIATE, IN THE INTER EST OF JUSTICE AND FAIR PLAY, TO REMAND THIS ISSUE TO THE FILE OF THE LD. AO TO PASS ORDERS BASED ON THE OUTCOME OF THE MAIN APPEAL ON MERITS BY THE HONBLE SUPREME COURT AS STATED SUPRA. ACCORDINGLY, THE GROUND NO.3 OF ORIGINAL GROUNDS OF APPEAL RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 30. WE OBSERVED THAT THAT THE CO-ORDINATE BENCH O F THE TRIBUNAL WHILE DECIDING THE APPEAL OF THE ASSESSEE FOR ASSES SMENT YEAR 2008-09 DECIDED THE ISSUE ON MERITS IN TURN BY PLACING RELI ANCE ON TRIBUNAL ORDER FOR A.Y. 2008-09. THE TRIBUNAL ALLOWED RELIEF TO TH E ASSESSEE BY FOLLOWING THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF BHARAT EARTH MOVERS VS. CIT REPORTED AS 245 ITR 428(SC). DEHORS THE ISS UE OF CONSTITUTIONAL VALIDITY OF CLAUSE(F) TO SECTION 43B OF THE ACT, TH E CO-ORDINATE BENCH AFTER CONSIDERING THE ISSUE ON MERITS HAS DELETED THE ADD ITION. TAKING INTO CONSIDERATION, ENTIRETY OF FACTS WE RESPECTFULLY FO LLOW THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008-09 AND CONFIRM THE FINDINGS OF CIT(A) IN DELETING THE DISALLOWANCE . CONSEQUENTLY, GROUND NO.4 OF THE APPEAL BY THE REVENUE IS DISMISSED. 31. GROUND NO.5: 5. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE HEAD OFFICE EXPENSES CANN OT BE ALLOCATED TO PROFITS DERIVED FROM 100% EXPORT ORIENTED UNITS FALLING UND ER SECTION 1OB AND IN DIRECTING TO REDUCE INTEREST INCOME?' 26 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) 31.1 THIS ISSUE IS IDENTICAL TO THE ONE ALREADY AD JUDICATED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009-10 (SUPRA). THE RELEVANT EXTRACT OF THE FINDING OF THE TRIBUNAL REA D AS UNDER:- 5. WE HAVE HEARD RIVAL SUBMISSIONS. WE FIND THAT T HIS ISSUE IS ALREADY COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDERS OF THIS TRI BUNAL FROM A.YRS 2003-04 TO 2008-09. WE ALSO FIND THAT FOR A.Y.2006-07, THE REV ENUE HAD CARRIED THIS MATTER TO THE HONBLE JURISDICTIONAL HIGH COURT AND THE HO NBLE JURISDICTIONAL HIGH COURT IN INCOME TAX APPEAL NO.433/2015 DATED 15/01/ 2018 HAD HELD THAT THE QUESTION RAISED BY THE REVENUE DOES NOT GIVE RAISE TO ANY SUBSTANTIAL QUESTION OF LAW AND ACCORDINGLY, DID NOT ENTERTAIN THE SAME. THIS GOES TO PROVE THAT THE ORDER PASSED BY THIS TRIBUNAL ON THE IMPUGNED ISSUE HAD ATTAINED FINALITY. RESPECTFULLY FOLLOWING THE SAME, THE GROUND NO. 4 R AISED BY THE ASSESSEE IS ALLOWED. THE CIT(A) HAS ALLOWED RELIEF TO THE ASSESSEE BY FO LLOWING THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2003-04 TO 2006-07. WE FIND NO INFIRMITY IN THE IMPUGNED ORDER. ACCORD INGLY, GROUND NO.5 OF THE APPEAL IS DISMISSED. 32. GROUND NO.6: 6. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING THE DEPRECIATION OF RS. 33 ,42,442/- ON GOODWILL ON ACCOUNT OF ACQUISITION OF MADURA GARMENTS DIVISI ON FROM MADURA COATS LTD IN THE A. Y. 2000-01 WITHOUT APPRECIATING THE FACTS OF THE CASE.' 32.1 THIS ISSUE IS IDENTICAL TO THE ONE ALREADY ADJ UDICATED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009-10. THE RELEVANT EXTRACT OF THE FINDING OF THE TRIBUNAL READ AS UNDER:- 15. THE GROUND NO.2 RAISED BY THE REVENUE IS WITH REGARD TO DELETION OF DEPRECIATION ON GOODWILL AMOUNTING TO RS.1,11,98,38 2/-. WE FIND THAT THIS ISSUE HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE IN ASSESSEES OWN CASE BY THE ORDER OF THIS TRIBUNAL IN ITA NO.3033/MUM/2012 DATED 09/12/2015 WHEREIN IT WAS HELD AS UNDER:- 27 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) 11.GROUND NO.9 DEALS WITH DISALLOWANCE OF DEPRECIA TION ON GOODWILL ON ACQUISITION OF MADURA GARMENTS DIVISION. AS AGREED BY THE AR AND THE DR, THE ISSUE HAS BEEN DEALT WITH BY THE TRIBUNAL, WHILE DECIDING THE APPEAL FOR THE AY.2006-07(SUPRA).PARAGRAPH 6 OF THE SAID ORDER READS AS UNDER: '6.NEXT GROUND IS ABOUT DISALLOWANCE OF DEPRECIATIO N ON GOODWILL ON ACQUISITION OF MADURA GARMENTS DIVISION ONGOING CONCERN BASIS. WE FIND THAT IN THE EARLIER IDENTICA L ISSUE HAD BEEN DECIDED IN FAVOUR OF THE ASSESSEE AS FOLLOWING: 3.1.WE FIND THAT SUM OF RS. 3.33 CRORES,RS.2.50 CRO RES AND RS.1.87 CRORES WAS FOUND TO BE INCURRED BY THE ASSESSEE FOR THE AY .S.2003-04.2004-05 AND 2005-06 RESPECTIVELY ON ACCOUNT OF MARKETING AN D KNOWHOW INCURRED ON ACQUISITION OF MADURA GARMENTS DIVISION .WE FIND THAT THE IDENTICAL ISSUE WAS DELIBERATED UPON BY THE TRIBUNA L WHILE DECIDING THE APPEAL FOR EARLIER AY. WE ARE REPRODUCING THE RELEV ANT PARAGRAPH OF THAT ORDER AND SAME READS AS UNDER: 18.GROUND NO. 8 READS AS UNDER: 'THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO HAS ERRED IN DISALLOWING DEPREC IATION OF RS. 3,33,86,719 CLAIMED BY THE APPELLANT ON GOODWILL OF RS.20.35 CRORES ACQUIRED ON ACQUISITION OF 'MADURA GARMENTS' DIVISION FROM MADURA COASTS LTD. ON A GOING CONCERN BASIS AN D LEARNED CIT (A) HAS ERRED IN CONFIRMING THE ORDER OF THE LE ARNED AO. THE LEARNED AO BE DIRECTED TO ALLOW THE DEPRECIATION ON GOODWILL AND TO REDUCE THE TOTAL INCOME ACCORDINGLY.' 18.1.WE FIND THAT THIS ISSUE HAS ALREADY BEEN ALLOW ED IN ASSESSEE'S OWN CASE IN ITA NO.5421/ M/05 FOR A.Y.2000-01.RESPECTFU LLY FOLLOWING THE DECISION OF THE CO ORDINATE BENCH, WE DIRECT THE AO TO ALLOW THE CLAIM OF DEPRECIATION ON GOODWILL. GROUND NO. 8 IS ACCORDING LY ALLOWED.' FOLLOWING THE ABOVE ORDER OF THE TRIBUNAL FOR EARLI ER YEARS,GROUND NO.5,9,AND 3 FOR THE AY.2003 -04,2004-05,2005-06 AR E DECIDED IN FAVOUR OF THE ASSESSEE. IN VIEW OF THE ABOVE,GROUND NO.6 I S DECIDED IN FAVOUR OF THE ASSESSEE.' CONSIDERING THE ABOVE, WE ARE DECIDI NG GROUND NO.9 IN FAVOUR OF THE ASSESSEE. 15.1. RESPECTFULLY FOLLOWING THE SAID DECISION, WE DO NOT FIND ANY INFIRMITY IN THE ACTION OF THE LD. CIT(A) GRANTING RELIEF TO THE ASS ESSEE. ACCORDINGLY, THE GROUND NO.2 RAISED BY THE REVENUE IS DISMISSED. 32.2 THE CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE BY FOLLOWING THE ORDER OF HIS PREDECESSOR IN ASSESSMENT YEAR 2009-10, THE FINDINGS OF CIT(A) IN A.Y. 2009-10 HAVE NOW BEEN UPHELD BY THE TRIBUNAL. WE FIND NO INFIRMITY 28 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) IN THE IMPUGNED ORDER. ACCORDINGLY, GROUND NO.6 OF THE APPEAL IS DISMISSED. 33. GROUND NO.7 : 7. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING THE PROCEEDINGS FROM SALE OF CERT IFIED EMISSION REDUCTION OF RS. 4,11,58,512/- RELYING UPON THE DECISION IN THE CASE OF MY HOME POWER LTD VS. DCIT, CENTRAL CIRCLE - 7 (2012) 27 TAXMANN.COM.27, WITHOUT APPRECIATING THE FACTS OF THE CASE.' 33.1 THIS ISSUE IS IDENTICAL TO THE ONE ALREADY ADJ UDICATED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009-10. THE RELEVANT EXTRACT OF THE FINDING OF THE TRIBUNAL ON THIS ISSUE READ A S UNDER:- 16. THE GROUND NO.3 RAISED BY THE REVENUE IS WITH REGARD TO CHALLENGING THE ACTION OF THE LD. CIT(A) IN TREATING THE RECEIPT ON ACCOUNT OF SALE OF CERTIFIED EMISSION AS CAPITAL RECEIPT (CARBON CREDIT RECEIPTS ). WE FIND THAT THE HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF CIT VS. MY HOME POWER LTD. REPORTED IN 365 ITR 82; HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SUBHASH KABINI POWER CORPORATION LTD REPORTED IN 385 ITR 59 2; HONBLE ALLAHABAD HIGH COURT IN THE CASE OF PCIT VS L.H. SUGAR FACTORY PVT . LTD. REPORTED IN 392 ITR 568 HAD HELD THAT CARBON CREDIT RECEIPTS ARE TO BE CONS TRUED AS CAPITAL RECEIPTS. WHEN THIS WAS PUT TO THE LD. DR, THE LD. DR FAIRLY CONCEDED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY VARIOUS HIGH C OURTS, BUT HE HOWEVER, PRAYED FOR VERIFICATION OF THESE FIGURES BY THE LD. AO. THE LD. AR ALSO FAIRLY AGREED THAT VERIFICATION OF THE FIGURES BY THE LD. AO BE MADE. ACCORDINGLY, WE DEEM IT FIT AND APPROPRIATE, TO SET ASIDE THIS ISSU E TO THE FILE OF THE LD. AO, TO VERIFY THE ACTUAL FIGURES OF CARBON CREDIT RECEIPTS AND DECIDE THE TAXABILITY OF THE SAME IN THE LIGHT OF THE AFORESAID DECISIONS OF THE HONBLE HIGH COURTS. ACCORDINGLY, THE GROUND NO.3 RAISED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES THE CIT(A) IN THE IMPUGNED ASSESSMENT YEAR GRANTED RELIEF TO THE ASSESSEE BY FOLLOWING THE ORDER OF HIS PREDECESSOR FOR ASSESSMENT YEAR 2009-10, WHICH HAS NOW BEEN CONFIRMED BY THE TRIBUN AL. SINCE, THERE HAS 29 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) BEEN NO CHANGE IN THE FACTS IN THE ASSESSMENT YEAR UNDER CONSIDERATION, THIS GROUND OF APPEAL BY REVENUE IS DISMISSED FOR S IMILAR REASONS. 34. GROUND NO.8 8. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN REDUCING THE TOTAL INCOME BY RS.11, 32,604/- BEING REVERSAL OF THE PROVISION FOR PENSION LIABILITY IGNORING THE FACT THAT SIMILAR ISSUE WAS DISALLOWED BY THE LD. CIT(A) FOR A. Y. 2008-09 AND THE ASSESSEE IS CONTESTING THE ISSUE BEFORE THE HON'BLE ITAT.' 34.1 THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSE SSEE FAIRLY SUBMITTED THAT THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE APPEAL BY THE ASSESSEE FOR ASSESSMENT YEAR 2007-08 IN ITA NO.3703/MUM/2011 HAS ALLOWED THE PENSION LIABILITY. THEREFORE, THE WRITE BACK OF TH E PROVISION OUGHT TO BE TREATED AS ITS INCOME. 34.2 THE DEPARTMENT HAS CHALLENGED THE ORDER OF TRI BUNAL FOR ASSESSMENT YEAR 2007-08 BEFORE THE HONBLE HIGH COU RT IN AN APPEAL. HOWEVER, THE APPEAL IS STILL PENDING AT ADMISSION S TAGE. 34.3 BOTH SIDES HEARD. THE LD. AUTHORISED REPRESEN TATIVE HAS FAIRLY ADMITTED THAT THE PROVISION FOR PENSION WAS ALLOWED TO THE ASSESSEE AS DEDUCTION BY THE TRIBUNAL IN ASSESSMENT YEAR 2007-0 8. HENCE, WRITE BACK OF SAID PROVISION WOULD AMOUNT TO INCOME OF ASSESSE E. WE OBSERVE THAT THE IMPUGNED ORDER OF CIT(A) GRANTING RELIEF TO THE ASSESSEE (DATED 31-03- 2015) WAS PASSED PRIOR TO THE ORDER OF TRIBUNAL FOR ASSESSMENT YEAR 2007- 08 (DATED 24-11-2015) ALLOWING ASSESSEES CLAIM OF DEDUCTION IN RESPECT OF PROVISION FOR PENSION LIABILITY. THE CIT(A) HAD NO OCCASION TO CONSIDER THE ORDER OF TRIBUNAL ON THIS ISSUE. SINCE, THE ASSESS EE GOT BENEFIT OF DEDUCTION AT THE TIME WHEN PROVISION WAS CREAT ED IN THE 30 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) ASSESSMENT YEAR 2007-08, THE REVERSAL OF PROVISION WOULD AMOUNT TO INCOME OF THE ASSESSEE. IF THE REVERSAL OF PROVISIO N IS NOT TAXED, IT WOULD RESULT IN DOUBLE DEDUCTION TO THE ASSESSEE. THUS, I N VIEW OF UNDISPUTED FACTS, THE FINDINGS OF CIT(A) ON THIS ISSUE ARE REV ERSED. THE GROUND NO. 8 OF THE APPEAL BY REVENUE IS ALLOWED. 35. GROUND NO.9& 10: 9. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN RESTRICTING THE ALP OF GUARANTEE FEES IN R ESPECT OF CORPORATE GUARANTEE GIVEN BY THE ASSESSEE TO ITS AE VIZ. ADITYA BIRLA M INACS WORLDWIDE TO ENABLE THE AE TO BORROW FUNDS FROM FOREIGN BANKS TO 0.5% AS AG AINST 2.42% AS HELD BY THE AO/TPO.' 10. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) ERRED IN RESTRICTING THE ALP OF PERFORMANCE GUARANTEE FEES IN RESPECT OF PERFORMANCE GUARANTEE GIVEN BY THE ASSESSEE TO ITS AE VIZ. ADITYA BIRLA MINACS WORLDWIDE TO ENABLE THE AE TO BORROW FUNDS FROM FOR EIGN BANKS TO 0.5% AS AGAINST 1.74% AS HELD BY THE AO/TPO. 35.1 THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSE SSEE SUBMITTED THAT BY VIRTUE OF VARIOUS JUDICIAL PRONOUNCEMENTS IT IS A WELL SETTLED THAT THE ALP OF CORPORATE GUARANTEE FEE/PERFORMANCE GUARANTE E AS A NORM HAS BEEN ACCEPTED AT 0.5%. IN SUPPORT OF HIS CONTENTIO N, THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE REFERRED TO THE DEC ISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS.EVEREST KAN TO CYLINDER LTD., REPORTED AS 58 TAXMANN.COM254(BOM). THE LD. AUTHOR IZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT CIT(A) IN A VERY RE ASONED AND FAIR MANNER HAS RESTRICTED THE ADJUSTMENT FOR CORPORATE GUARAN TEE COMMISSION AND PERFORMANCE GUARANTEE TO 0.50%. 31 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) 36. ON THE OTHER HAND, THE LD.DEPARTMENTAL REPRESEN TATIVE PLACED RELIANCE ON THE DECISION OF MUMBAI TRIBUNAL IN THE CASE OF OMNI ACTIVE TECHNOLOGIES LTD. VS. DCIT, REPORTED AS 92 TAXMANN. COM 88 (MUM)(TRIB) TO CONTEND THAT THE ALP OF THE CORPORATE GUARANTEE/PER FORMANCE GUARANTEE SHOULD BE FIXED AT 1.5%. 37. BOTH SIDES HEARD. THE CIT(A) DETERMINED ALP OF THE CORPORATE GUARANTEE/PERFORMANCE GUARANTEE AT 0.5% BY FOLLOWIN G VARIOUS DECISION OF THE TRIBUNAL INCLUDING THE DECISION OF THE TRIBU NAL RENDERED IN EVEREST KANTO CYLINDER LTD. THE HONBLE BOMBAY HIGH COURT HAS UPHELD THE ORDER OF THE TRIBUNAL IN THE CASE OF EVEREST KANTO LTD.(S UPRA) WHEREIN THE RATE OF GUARANTEE COMMISSION @ 0.5% WAS ACCEPTED. WE SEE NO REASON TO INTERFERE WITH THE FINDINGS OF CIT(A) ON THIS ISSUE . ACCORDINGLY, THE SAME ARE UPHELD AND GROUNDS NO.9& 10 IN THE APPEAL BY RE VENUE ARE DISMISSED. 38. GROUND NO. 11: 11. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) ERRED IN DIRECTING TO TREAT THE INTEREST SUBSIDY OF RS. 15,23,25,727/- AS CAPITAL IN NATURE.' 38.1 IN GROUND NO.11 THE REVENUE HAS ASSAILED THE FINDINGS OF CIT(A) IN HOLDING INTEREST SUBSIDY FROM TECHNOLOGY UPGRADATI ON FUND(TUF) RS.15,23,25,727/- AS CAPITAL IN NATURE. THE LD. AU THORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE HONBLE RAJASTH AN HIGH COURT IN THE CASE OF PCIT VS. NITIN SPINNERS LTD. IN DB INCOME TAX APPEAL NO.31/2019 DECIDED ON 19/09/2019 HAS HELD SUBSIDY RECEIVED UND ER TUF AS CAPITAL IN NATURE. SIMILAR VIEW HAS BEEN TAKEN BY MUMBAI TRIB UNAL IN THE CASE OF 32 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) ACIT VS. SVG FASHIONS LTD. IN ITA NO.704/MUM/2016 F OR ASSESSMENT YEAR 2012-13 DECIDED ON 17/07/2018. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE TO FURTHER BUTTRESS HIS SUBMISSIONS PL ACED RELIANCE ON THE FOLLOWING DECISIONS:- (1) CIT VS. GLOSTER JUTE MILLS LTD. ,96 TAXMANN.COM 30 3 (CAL) (2) CIT VS. SSHYAM LAL BANSAL, 200 TAXMAN 14 (P&H) 38.2 THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASS ESSEE FURTHER SUBMITTED THAT CIT(A) HAS DECIDED THIS ISSUE AFTER SEEKING REMAND REPORT OF ASSESSING OFFICER AND EXAMINING TUF SCHEME IN DE TAILS. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER SUBMITTED THAT THE TRIBUNAL IN ASSESSEES APPEAL FOR ASSESSMENT YEAR 2009-10 (SUPRA) HAS ADMITTED THIS ISSUE RAISED IN ADDITIONAL GROUND OF APPEAL AND HAS RESTORED TO ASSESSING OFFICER FOR FRESH ADJUDICATION. 39. THE LD.DEPARTMENTAL REPRESENTATIVE SUBMITTED TH AT THE ISSUE MAY BE RESTORED TO ASSESSING OFFICER FOR RECONSIDERATIO N IN LINE WITH TRIBUNAL ORDER IN ASSESSEES APPEAL FOR ASSESSMENT YEAR 2009 -10. 40. BOTH SIDES HEARD. THE ASSESSEE HAS RECEIVED SU BSIDY UNDER TUF SCHEME. THE ASSESSEE HAS CLAIMED THE SUBSIDY AS CA PITAL RECEIPT, WHEREAS, THE DEPARTMENT TREATED THE SUBSIDY AS REVENUE IN N ATURE. WE FIND THAT THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF PCI T VS. NITIN SPINNERS LTD.(SUPRA) EXAMINED THE SCHEME IN THE LIGHT OF VAR IOUS DECISIONS AND HELD THE SUBSIDY UNDER TUF SCHEME AS CAPITAL IN NAT URE. SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE CALCUTTA HIGH COURT IN TH E CASE OF CIT VS.GLOSTER JUTE MILLS LTD.(SUPRA). THUS, IN VIEW O F ABOVE JUDGEMENTS OF 33 ITA NO.4220/MUM/2015(A.Y. 2010-11) ITA NO.4704/MUM/2015(A.Y. 2010-11) HONBLE HIGH COURTS, WE SEE NO INFIRMITY IN THE FI NDINGS OF CIT(A). THE SAME ARE UPHELD AND GROUND NO.11 OF THE APPEAL IS D ISMISSED. 41. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 42. TO SUM UP, APPEAL OF THE ASSESSEE AS WELL AS RE VENUE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY THE DAY OF FEBRUARY,2020. SD/- SD/- (N.K.PRADHAN ) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 24/02/2020 VM , SR. PS(O/S) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI