HERCULES INDUSTRIAL CHEMICALS PVT. LTD. (MERGED WITH ASHLAND INDIA PVT. LTD. W.E.F. 01-04-2013), NAVI MUMBAI V. DCIT - 10(3), MUMBAI

ITA 5077/MUM/2016

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4067 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 09-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NISHANT SAMAIYA
• Keywords: Depreciation
• Section: 154

Judgement Text

HERCULES INDUSTRIAL CHEMICALS PVT. LTD. VS. DCIT ITA NO. 5077/MUM/2016 A.Y 2011 - 12 1 IN THE INCOME TAX APPELLATE TRIBUNAL ' G ' BENCH, MUMBAI BEFORE SHRI B.R BASKARAN , ACCOUNTANT MEMBER AND SHRI RAVISH SOOD , JUDICIAL MEMBER IT A NO. 5077 /MUM/201 6 ( ASSESSMENT YEAR : 2011 - 12) HERCULES INDUSTRIAL CHEMICALS PVT PVT. PVT. LTD. (MERGED WITH ASHLAND INDIA PVT. LTD W.E.F 01.04.2013); 601, 606 - 608, PLATINUM TECHNOPARK, PLOT NO. 17 - 18, SECTOR 30A, VASHI, NAVI MUMBAI - 400 705 VS. DCIT, 10(3) AAYKAR BHAWAN, M.K ROAD , MUMBAI . PAN AABCH3827Q (APPELLANT) ( RESPONDENT ) APPELLANT BY: SHRI KETAN VED , A.R. RESPONDENT BY: SHRI NISHANT SAMAIYA , D.R DATE OF HEARING: 0 1 . 10 .2018 DATE OF PRONOUNCEMENT: 10 . 10 .2018 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 2 4 , MUMBAI, DATED 26.05.2016 , WHICH IN TURN ARISES FROM THE ASSESSMENT ORDER PASSED BY THE A.O UNDER 143(3)(II) OF THE INCOME TAX ACT, 1961 (FOR SHORT ACT), DATED 13.12.2014 . THE ASSESSEE ASSAILING THE ORDER OF THE CIT(A), HAS RAISED BEFORE US THE FOLLOWIN G GROUNDS OF APPEAL: THE APPELLANT, HERCULES INDUSTRIAL CHEMICALS PRIVATE LIMITED (SINCE MERGED WITH ASHLAND INDIA PVT. LIMITED W.E.F APRIL, 2013), OBJECTS TO THE ORDER DATED 25 MAY, 2016 (RECEIVED ON 15 JUNE, 2016) UNDER SECTION 250 OF THE INCOME - TAX ACT, 1961 (THE ACT) PASSED BY THE COMMISSIONER OF INCOME - TAX (APPEALS) - 24, MUMBAI, FOR THE AFORESAID ASSESSMENT YEAR ON THE FOLLOWING A MONG OTHER GROUNDS: - 1. AD - HOC DISALLOWANCE OF EMPLOYEE COST, ADMINISTRATIVE EXPENSES, DEPRECIATION AND INTEREST EXPENSE AGGREGATING TO RS. 2,54,61,231/ - : HERCULES INDUSTRIAL CHEMICALS PVT. LTD. VS. DCIT ITA NO. 5077/MUM/2016 A.Y 2011 - 12 2 1.1 THE COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING ON AD - HOC BASIS THE EMPLOYEE COST, ADMINISTRATIVE EXPENSES, DEPRECIATION AND INTEREST EXPENSE AGGREGATING TO RS. 2,54,61,231/ - . 1.2 THE APPELLANT SUBMITS THAT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW PREVAILING ON THE SUBJECT , THE EXPENSES IN QUESTION ARE WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF ITS BUSINESS AND HENCE NO DISALLOWANCE WHATSOEVER WAS CALLED FOR AND THE COMMISSIONER OF INCOME - TAX (APPEALS) OUGHT TO HAVE HELD AS SUCH. 1.3 THE APPELLANT PRAYS THAT THE ASSESSING OFFI CER BE DIRECTED TO DELETE THE DISALLOWANCE SO MADE BY HIM AND TO RE - COMPUTE ITS TOTAL INCOME ACCORDINGLY. 2. CREDIT FOR TAX DEDUCTED AT SOURCE : 2.1 THE COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN NOT DIRECTING THE ASSESSING OFFICER TO GRANT CREDIT FOR TAX DEDUCTED AT SOURCE OF RS. 28,97,906/ - . 2.2 THE APPELLANT SUBMITS THAT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE LAW PREVAILING ON TH SUBJECT IT IS ELIGIBLE FOR CREDIT OF TAX DEDUCTED AT SOURCE OF RS. 28,97,906/ - AND THE COMMISSIONER OF I NCOME - TAX (APPEALS) OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER AS SUCH. 2.3 THE APPELLANT PRAYS THAT THE ASSESSING OFFICER BE DIRECTED TO ALLOW THE CREDIT FOR TAX DEDUCTED AT SOURCE OF RS. 28,97,906/ - . 3. GENERAL : 3.1 EACH OF THE ABOVE GROUNDS OF APPEAL I S WITHOUT PREJUDICE TO THE OTHER. 3.2 THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, AMEND, VARY, OMIT OR SUBSTITUTE ANY OF THE AFORESAID GROUNDS OF APPEAL OR ADD A NEW GROUND OR GROUNDS OF APPEAL AT ANY TIME BEFORE OR AT THE TIME OF HEARING OF THE APPEAL AS IT MAY BE ADVISED. 2. BRIEFLY STATED, THE ASSESSEE COMPANY WHICH IS ENGAGED IN THE BUSINESS OF PROVIDING TECHNICAL KNOW - HOW FOR MANUFACTURING CHEMICAL PRODUCTS FOR PULP & PAPER PRODUCTS HAD E - FILED ITS RETURN OF INCOME FOR A.Y 2011 - 12 ON 29.11.2011 , DECLARING INCOME OF RS. 10,93,203/ - . SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER SEC. 143(2) OF THE ACT. 3. ON A PERUSAL OF THE PROFIT & LOSS ACCOUNT , IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE WAS IN RECEIPT OF R OYALTY INCOME OF RS. 2,62,72,942/ - ; SERVICE FEE INCOME OF RS. 3,73,31,027/ - ; AND OTHER INCOME OF RS. HERCULES INDUSTRIAL CHEMICALS PVT. LTD. VS. DCIT ITA NO. 5077/MUM/2016 A.Y 2011 - 12 3 5,06,36,724/ - . IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE HAD DEBITED EXPENSES OF RS. 1,34,62,240/ - FOR EARNING OF ROYALTY INCOME. T HE A.O BEING OF THE V IEW THAT THE EARNING OF THE ROYALTY INCOME NECESSITATED INCURRING OF EXPENSES, THUS ALLOCATED 50% OF THE ADMINISTRATIVE EXPENSES OF RS. 95,26,140/ - FOR EARNING OF THE SAME BY THE ASSESSEE. ON THE BASIS OF HIS AFORESAID DELIBERATIONS THE A.O CONCLUDED THAT THE ASSESSEE HAD FOR EARNING OF THE ROYALTY INCOME OF RS. 2,62,72,942/ - , INCURRED EXPENSES OF RS. 2,29,88,380/ - [I.E RS. 1,34,62,240/ - (+) RS. 95,26,140/ - ]. 4. AS PER THE DETAILS FURNISHED BY THE ASSESSEE, ROYALTY INCOME OF R S . 2,62,72,942/ - WAS EARNED B Y IT FROM SUB - LICENSING OF TECHNOLOGY TO AN UNRELATED PARTY I.E M/S CONNEL BROTHERS COMPANY (INDIA) PVT. LTD. T HE SAID TECHNOLOGY WAS LICENSED TO THE ASSESSEE BY ITS HOLDING COMPANY VIZ. M/S HERCULES INC. IN TERMS OF AN AGREEMENT DATED 01.01.2003 (WHICH WA S TWICE AMENDED ON 22.03.2005 ) . A S PER THE TERMS OF THE AGREEMENT, THE ASSESSEE COMPANY WHICH WAS REQUIRED TO MAKE PAYMENT OF ROYALTY TO M/S HERCULES INC. @ 5% OF THE NET SALE VALUE OF THE PRODUCTS , HAD ACCOUNTED FOR RS. 1,34,62,240/ - AS ROYALTY EXPENSE FO R THE YEAR UNDER CONSIDERATION. 5 . THE ASSESSEE SUBMITTED THAT DURING THE YEAR UNDER CONSIDERATION VIZ. A.Y 2011 - 12 M/S HERCULES INC. H AD WAIVED OFF THE ENTIRE ROYALTY EXPENDITURE OF RS. 5,04,59,534/ - (I.E FROM A.Y 2003 - 04 TO A.Y 2011 - 12), AND THE SAME WAS OFFERED FOR TAX BY THE ASSESSEE AS ITS OTHER INCOME FOR THE YEAR UNDER CONSIDERATION VIZ. A.Y 2011 - 12. 6 . FURTHER, THE ASSESSEE HAD ENTERED INTO A SERVICE AGREEMENT, DATED 01.07.2007 WITH M/S HERC ULES ASIA PACIFIC REGIONAL COMPANY LIMITED (FOR SHORT HAP) . IN TERMS OF THE SAID AGREEMENT, THE ASSESSEE COMPANY WHICH WAS ELIGIBLE FOR A SERVICE FEE AT COST PLUS 15% MARK UP HAD EARNED SERVICE INCOME OF RS. 3,73,31,027/ - DURING THE YEAR UNDER CONSIDER ATION . 7 . DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, IT WAS SUBMITTED BY THE ASSESSEE THAT THE EMPLOYEE COST OF RS. 4,59,46,708/ - , AND HERCULES INDUSTRIAL CHEMICALS PVT. LTD. VS. DCIT ITA NO. 5077/MUM/2016 A.Y 2011 - 12 4 ADMINISTRATIVE AND OTHER EXPENSES AMOUNTING TO RS. 1,90,52,281/ - WERE INCURRED FOR THE PURPOSE OF EARNING OF INCO ME FROM VARIOUS STREAMS VIZ. ROYALTY INCOME, SERVICE INCOME AND UNDERTAKING MARKETING AND BUSINESS DEVELOPMENT ACTIVITIES. IT WAS THE CLAIM OF THE ASSESSEE THAT OUT OF TOTAL EMPLOYEE COST OF RS. 4,59,46,708/ - , AN AMOUNT OF RS. 2,99,85,844/ - WAS INCURRED FO R EARNING OF SERVICE INCOME. SIMILARLY, OUT OF THE TOTAL ADMINISTRATIVE AND OTHER EXPENSES AMOUNTING TO RS. 1,90,52,281/ - , AN AMOUNT OF RS. 24,75,919/ - WAS INCURRED FOR EARNING OF SERVICE INCOME. THE ASSESSEE FURNISHED THE CALCULATION OF THE SERVICE IN COME WITH THE A.O, AS UNDER: PARTICULARS AMOUNT (IN RS.) EMPLOYEE COST 2,99,85,844/ - ADMINISTRATIVE AND OTHER EXPENSES 24,75,919/ - TOTAL SERVICE COST 3,24,61,763/ - ADD: MARK UP @15% 48,69,264/ - SERVICE FEE 3,73,31,027/ - 8 . HOWEVER, THE A.O DECLINED TO ACCEPT THE CLAIM OF THE ASSESSEE THAT EMPLOYEE COST AND OTHER EXPENSES WERE INCURRED ALSO FOR EARNING ROYALTY INCOME AND UNDERTAKING MARKETING AND BUSINESS DEVELOPMENT ACTIVITIES. FURTHER, BEING OF THE VIEW THAT THE ENTIRE EMPLOYEE COST OF RS. 4,59,46,708/ - , 50% OF THE ADMINISTRATIVE EXP ENSES OF RS. 95,26,140/ - , INTEREST COST OF RS. 24,00,419/ - , AND DEPRECIATION OF RS. 49,729/ - WERE INCURRED/BORNE BY THE ASSESSEE EXCLUSIVELY FOR EARNING THE SERVICE INCOME, ACCORDINGLY MADE THE DISALLOWANCE IN ITS HANDS, AS UNDER: PARTICULARS AMOUNT (IN RS.) AMOUNT (IN RS.) EMPLOYEE COST 4,59,46,708/ - 50% OF ADMINISTRATIVE EXPENDITURE. 95,26,140/ - INTEREST COST 24,00,419/ - DEPRECIATION 49,726/ - HERCULES INDUSTRIAL CHEMICALS PVT. LTD. VS. DCIT ITA NO. 5077/MUM/2016 A.Y 2011 - 12 5 TOTAL COST (A) 5,79,22,993/ - COST ATTRIBUTABLE TO SERVICE INCOME AS PER THE A.O . (RS. 3,73,31,027/115*100) [B] 3,24,61,762/ - EXCESS EXPENDITURE DISALLOWED BY THE A.O [A - B] 2,54,61,231/ - THE A.O , WHILE FRAMING THE ASSESSMENT ALSO DID NOT ALLOW CREDIT OF TDS OF RS. 28,97,906/ - THAT WAS DEDUCTED IN RESPECT OF THE ROYALTY INCOME OF RS. 2,62,72,942/ - THAT WAS EARNED BY THE ASSESSEE FROM SUB - LICENSING OF THE TECHNOLOGY TO M/S CONNEL BROTHERS COMPANY (I NDIA) PVT. LTD. 9 . AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER DELIBERATING ON THE CONTENTIONS ADVANCED BY THE ASSESSEE, DID NOT FIND FAVOUR WITH THE SAME. THE CIT(A) WAS OF THE VIEW, THAT THOUGH AN A.O CANN OT GET INTO THE SHOES OF AN ASSESSEE, BUT THEN THE ASSESSEE ALSO CANNOT BE ALLOWED TO ARRANGE ENTIRE EXPENDITURE IN SUCH A WAY THAT THE ENTIRE ROYALTY INCOME GETS WIPED OFF. THUS, THE CIT(A) NOT FINDING ANY INFIRMITY IN THE ALLOCATION OF THE EXPENSES , WHIC H AS PER HIM WAS CARRIED OUT BY THE A.O ON A SCIENTIFIC BASIS, CONCURRED WITH HIS VIEW AND UPHELD THE DISALLOWANCE. FURTHER, IT WAS ALSO OBSERVED BY THE CIT(A) THAT THE ISSUE INVOLVED IN THE PRESENT CASE WAS COVERED AGAINST THE ASSESSEE BY THE ORDER PASSED BY HIS PREDECESSOR WHILE DISPOSING OFF ITS APPEALS FOR A.Y 2009 - 10 AND A.Y 2010 - 11. A S REGARDS THE CLAIM OF THE ASSESSEE THAT THE A.O HAD ERRED IN NOT ALLOWING CREDIT FOR TH E TDS THE CIT(A) DIRECTED THE A.O TO DISPOSE OFF THE RECTIFICATION APPLICATION BY WAY OF A SPEAKING ORDER IN A TIME BOUND MANNER. 10 . THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. THE LD. AUTHORISED REPRESENTATIVE (FOR SHORT A.R) TAKING US THROUGH THE ORDERS OF THE LOWER AUTHORITIES SUBMITTED, THAT THE ISSUE INVOLVED IN THE APPEAL WAS COVERED BY THE ORDER PASSED BY THE HERCULES INDUSTRIAL CHEMICALS PVT. LTD. VS. DCIT ITA NO. 5077/MUM/2016 A.Y 2011 - 12 6 TRIBUNAL WHILE DISPOSING OFF THE APPEAL OF THE ASSESSEE FOR A .Y 2010 - 11 (COPY PLACED ON RECORD). I T WAS AVERRED BY THE LD. A.R, THAT THE TRIBUNAL WHILE DISPOSING OFF THE AFORESAID APPEAL HAD FOLLOWED ITS EARLIER ORDER PASSED IN THE ASSESSES OWN CASE FOR A.Y 2009 - 10. FURTHER, THE LD. A.R REQUESTED, THAT NECESSARY DIR ECTIONS BE ISSUED TO THE A.O TO ALLOW CREDIT OF THE TDS ON THE ROYALTY INCOME IN THE HANDS OF THE ASSESSEE. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) DID NOT CONTROVERT THE CLAIM OF THE LD. A.R THAT THE CORE ISSUE INVOLVED IN THE PR ESENT APPEAL WAS COVERED BY THE EARLIER ORDERS OF THE TRIBUNAL IN THE ASSESSES OWN CASE FOR A.YS 2009 - 10 AND 2010 - 11. 11. WE HAVE HEARD THE AUTHORISED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAIL ABLE ON RECORD. WE MAY HEREIN OBSERVE THAT THE VERY BASIS OF RECOMPUTING OF THE COST ATTRIBUTABLE TO THE SERVICE INCOME BY THE A.O , DOES NOT INSPIRE ANY CONFIDENCE. ON A PERUSAL OF THE FACTS, IT EMERGES THAT THE ASSESSEE HAD EARNED INCOME FROM DIFFERENT S TREAMS OF ACTIVITIES VIZ. (I). ROYALTY INCOME FROM SUB - LICENSING OF THE TECHNOLOGY TO AN UNRELATED PARTY I.E M/S CONNEL BROTHERS COMPANY (INDIA) PVT. LTD; (II). SERVICE INCOME AS PER THE AGREEMENT ENTERED INTO WITH HAP; AND (III). UNDERTAKING MARKETING AN D BUSINESS DEVELOPMENT ACTIVITIES. WE FIND, THAT THOUGH THE ASSESSEE HAD FURNISHED WITH THE A.O THE BIFURCATED DETAILS OF THE EXPENSES VIZ. (I). EMPLOYEE COST (RS. 2,99,85,844/ - ); AND (II). ADMINISTRATIVE AND OTHER EXPENSES (RS. 24,75,919/ - ) , WHICH WERE C LAIMED TO HAVE BEEN INCURRED IN CONTEXT OF EARNING OF THE SERVICE INCOME, HOWEVER, THE SAME WERE SUMMARILY SCRAPPED BY HIM. RATHER, THE A.O LOOSING SIGHT OF THE FACT THAT EXPENSES WOULD ALSO HAVE BEEN INCURRED BY THE ASSESSEE IN EARNING OF ROYALTY INCOME AND UNDERTAKING MARKETING AND BUSINESS DEVELOPMENT ACTIVITIES, THEREIN MOST ARBITRARILY RELATED THE ENTIRE EMPLOYEE COST (RS. 4,59,46,708/ - ); 50% OF ADMINISTRATIVE EXPENSES (RS. 95,26,140/ - ); INTEREST COST (RS. 24,00,419/ - );AND DEPRECIATION (RS. 49,726/ - ) TO EARNING OF SERVICE INCOME BY THE ASSESSEE. WE ARE OF THE CONSIDERED VIEW, THAT AS THE A.O HAD WITHOUT ANY BASIS DISLODGED THE CLAIM OF THE ASSESSEE, WHEREIN HE HAD RELATED SPECIFIC EXPENSE TO EARNING OF THE HERCULES INDUSTRIAL CHEMICALS PVT. LTD. VS. DCIT ITA NO. 5077/MUM/2016 A.Y 2011 - 12 7 SERVICE INCOME, THUS, HIS VIEW CANNOT BE UPHEL D. FURTHER, WE FIND THAT THE CIT(A) ALSO FAILED TO APPRECIATE THAT THE A.O HAD WHIMSICALLY ALLOCATED THE EXPENSES TO EARNING OF THE SERVICE INCOME BY THE ASSESSEE. THE CIT(A) ADOPTING THE AMOUNT OF RS. 5,79,22,993/ - AS THE EXPENDITURE ALLOCABLE TO EARNING OF THE SERVICE INCOME, AS DETERMINED BY THE A.O, HAD THUS ON THE BASIS OF SUCH MISCONCEIVED FACTS DRAWN ADVERSE INFERENCE S IN THE HANDS OF THE ASSESSEE. WE THUS, ARE UNABLE TO PERSUADE OURSELVES TO SUBSCRIBE TO THE OBSERVATIONS OF THE LOWER AUTHORITIES. S TILL FURTHER, WE FIND THAT AS OBSERVED BY THE CIT(A), DISALLOWANCES OF EXPENSES INVOLVING IDENTICAL FACTS WAS MADE BY THE A.O IN THE CASE OF THE ASSESSEE FOR A.Y 2009 - 10 AND A.Y 2010 - 11, WHICH WERE UPHELD BY THE CIT(A). RATHER, T HE CIT(A) WHILE DISPOSING O FF THE APPEAL OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION VIZ. A.Y 2011 - 12., HAS RELIED ON THE OBSERVATIONS OF HIS PREDECESSOR IN A.Y 2009 - 10 AND A.Y 2010 - 11. WE FIND, THAT THE ORDER OF THE CIT(A) IN THE SAID RESPECTIVE YEARS VIZ. A.Y 2009 - 10 AND A.Y 2010 - 11 ON A FURTHER APPEAL BY THE ASSESSEE HAD BEEN SET ASIDE BY THE TRIBUNAL AND THE DISALLOWANCES OF THE EXPENSES HAD BEEN DELETED. WE THUS, IN THE BACKDROP OF THE OUR AFORESAID OBSERVATIONS, AND THE VIEW TAKEN BY THE TRIBUNAL IN THE ASSESSES OWN CASE F OR THE AFOREMENTIONED PRECEDING YEARS, DELETE THE DISALLOWANCE OF RS. 2,54,61,231/ - MADE BY THE A.O. 12. WE SHALL NOW ADVERT TO THE CONTENTION OF THE LD. A.R, THAT THE A.O WHILE COMPUTING THE TAX LIABILITY OF THE ASSESSEE HAD ERRED IN NOT ALLOWING CREDIT FOR THE TAX DEDUCTED AT SOURCE OF RS. 28,97,906/ - BY M/S CONNEL BROTHERS COMPANY (INDIA) PVT. LTD., WHILE MAKING THE PAYMENT OF ROYALTY INCOME OF R S . 2,62,72,942/ - TO THE ASSESSEE . IT IS THE CONTENTION OF THE LD. A.R, THAT THOUGH IT HAD FILED AN APPLICATIO N UNDER SEC. 154 SEEKING RECTIFICATION OF THE SAID MISTAKE WITH THE A.O, HOWEVER, THE SAME DESPITE A SPECIFIC DIRECTION BY THE CIT(A) TO DISPOSE OF THE SAME , IS STILL PENDING EVEN AFTER LAPSE OF MORE THAN TWO YEARS FROM THE DATE OF THE ORDER OF THE CIT(A) . THE LD. A.R SUBMITTED THAT A SUITABLE DIRECTION BE ISSUED TO THE A.O. WE HAVE DELIBERATED ON THE ISSUE, AND FIND THAT THE CIT(A) HAD VIDE HIS ORDER DATED 26.05.2016 DIRECTED THE A.O TO DISPOSE OFF THE RECTIFICATION APPLICATION HERCULES INDUSTRIAL CHEMICALS PVT. LTD. VS. DCIT ITA NO. 5077/MUM/2016 A.Y 2011 - 12 8 OF THE ASSESSEE BY WAY OF SPEAKING ORDER IN A TIME BOUND MANNER. WE ARE OF THE CONSIDERED VIEW, THAT AS THE FAILURE ON THE PART OF THE A.O TO COMPLY WITH THE DIRECTIONS OF THE CIT(A) EMERGES FROM THE IMPUGNED ORDER, AND HA S BEEN ASSAILED BY THE ASSESSEE BE FORE US, THUS, IN ALL FAIRNESS DIRECT THAT THE A.O WHILE GIVING APPELLATE EFFECT TO OUR ORDER SHALL ALLOW CREDIT OF THE TDS, IF ANY, AS PER LAW. 1 3 . THE APPEAL OF THE ASSESSEE IS ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS. ORDER PRONOUNCE D IN THE OPEN COURT ON 10. 10.2018. SD/ - SD/ - ( B.R BASKARAN ) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 10 . 10 .2018 PS. ROHIT / 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 . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . HERCULES INDUSTRIAL CHEMICALS PVT. LTD. VS. DCIT ITA NO. 5077/MUM/2016 A.Y 2011 - 12 9