Thermax Limited, Pune V. Deputy Commissioner of Income-tax,

ITA 510/PUN/2014

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8768 (ITAT-PUNE)
• Duration Of Justice: 5 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 24-06-2019
• Assessment Year: 2007-2008
• Appeal Filed On: 14-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RELATE TO ASSESSMENT YEARS AND
• Assessee Lawyers: AND EQUAL NUMBER OF APPEALS
• Keywords: Depreciation; Rule 8D
• Section: 14A; 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER . / ITA NOS.510 & 511/PUN/2014 / ASSESSMENT YEARS : 2007-08 AND 2008-09 THERMAX LIMITED, 14, MUMBAI PUNE ROAD, WAKDEWADI, PUNE 411 003 PAN : AAACT3910D VS. DCIT, CIRCLE-10, PUNE, ACIT, CIRCLE-10, PUNE APPELLANT RESPONDENT . / ITA NOS.715 & 716/PUN/2014 / ASSESSMENT YEARS : 2007-08 AND 2008-09 ACIT, CIRCLE-10, PUNE VS. THERMAX LIMITED, 14, MUMBAI PUNE ROAD, WAKDEWADI, PUNE 411 003 PAN : AAACT3910D APPELLANT RESPONDENT / ORDER PER BENCH : THIS BATCH OF FOUR CROSS APPEALS COMPRISING OF TWO APP EALS BY THE ASSESSEE AND EQUAL NUMBER OF APPEALS BY THE REVENUE RELATE TO THE ASSESSMENT YEARS 2007-08 AND 2008-09. SINCE SOME O F THE ASSESSEE BY SHRI H.P. MAHAJANI REVENUE BY MRS. NANDITA KANCHAN DATE OF HEARING 11-09-2019 DATE OF PRONOUNCEMENT 13-09-2019 ITA NOS.510 & 511/PUN/2014 ITA NOS. 715 & 716/PUN/2014 THERMAX LTD., 2 ISSUES RAISED IN THESE APPEALS ARE COMMON, WE ARE, THERE FORE, PROCEEDING TO DISPOSE THEM OFF BY THIS CONSOLIDATED ORDER FO R THE SAKE OF CONVENIENCE. 2. BEFORE PROCEEDING WITH THESE APPEALS, IT IS PERTINENT TO MENTION THAT THE CROSS APPEALS OF THE ASSESSEE FOR THE A.Y. 2006- 07 WERE SIMULTANEOUSLY ARGUED, FOR WHICH WE HAVE PASSED A SEPA RATE DETAILED ORDER. SOME OF THE ISSUES RAISED IN THE INSTANT APPEALS ARE SIMILAR TO THOSE OF THE EARLIER YEARS INCLUDING THE IMMEDIATELY PRECEDING YEAR. BOTH THE SIDES ARE IN AGREEMENT THAT FACTS A ND CIRCUMSTANCES OF SUCH SIMILAR GROUNDS ARE MUTATIS MUTANDIS SIMILAR TO THE EARLIER YEARS, EXCEPT WHERE SEPARATELY ARGUED. A.Y. 2007-08 : 3. GROUND NO.1 OF THE ASSESSEES APPEAL AND GROUND NO.1 OF THE REVENUES APPEAL ARE AGAINST THE SUSTENANCE/DELETION OF ADDI TION ON ACCOUNT OF REVENUE RECOGNITION IN RESPECT OF FREIGHT AND CON TRACT ACTIVITY. 4. GROUND NO.3 OF THE ASSESSEES APPEAL IS AGAINST TH E ADDITION ON ACCOUNT OF LIQUIDATED DAMAGES. GROUND NO. 2 OF THE REVEN UES APPEAL IS ALSO ON THE SAME ISSUE. ITA NOS.510 & 511/PUN/2014 ITA NOS. 715 & 716/PUN/2014 THERMAX LTD., 3 5. GROUND NO.4 OF THE ASSESSEES APPEAL IS AGAINST THE ADDITION ON ACCOUNT OF CLAIM OF DEPRECIATION AT 80% ON CERTAIN PLANT AND MACHINERY. 6. GROUND NO.6 OF THE ASSESSEES APPEAL AND GROUND NO.4 OF THE REVENUES APPEAL ARE AGAINST THE CONFIRMATION/DELETION OF ADD ITION TOWARDS PROVISION OF WARRANTY. 7. BOTH THE SIDES AGREE THAT SIMILAR GROUNDS HAVE CONSIS TENTLY BEEN DECIDED BY THE TRIBUNAL IN ASSESSEES FAVOUR FOR THE EARLIE R ASSESSMENT YEAR. FOLLOWING THE PRECEDENTS, WE DECIDE THESE GROUNDS OF THE APPEALS IN ASSESSEES FAVOUR. 8. GROUND NO. 2 OF THE ASSESSEES APPEAL IS AGAINST TH E CONFIRMATION OF ADDITION IN RESPECT OF PRIOR PERIOD EXPENSES AMOUNTING TO RS.60,67,695/-. SUCH GROUND HAS BEEN DISMIS SED BY THE TRIBUNAL IN EARLIER YEARS. FOLLOWING THE SAME, WE DISMISS THIS GROUND OF APPEAL AS WELL. 9. GROUND NO.5 OF THE ASSESSEES APPEAL IS AGAINST THE CONFIRMATION OF SALES COMMISSION @10% AMOUNTING TO RS.1,18,13,080/-. THIS GROUND IS SIMILAR TO THE GROUND N O.1 OF THE ASSESSEES APPEAL FOR A.Y. 2006-07 WHICH WE HAVE RESTO RED FOR FRESH CONSIDERATION. HOWEVER, UNLIKE THE IMMEDIATELY PRECED ING ITA NOS.510 & 511/PUN/2014 ITA NOS. 715 & 716/PUN/2014 THERMAX LTD., 4 YEAR, THE ASSESSEE DID PRODUCE BOOKS OF ACCOUNT BEFORE THE AO FOR THE YEAR UNDER CONSIDERATION, WHO HAD FULL OPPORTUNITY OF EX AMINING THE SAME AND FINDING OUT ANYTHING ADVERSE BEFORE MAKING AN Y ADDITION OUT OF THE EXPENSES. DESPITE THAT, THE AO COULD NOT POINT OUT ANY SPECIFIC DEFECT QUA THE EXPENSE AND CHOSE TO MAKE AN AD HOC ADDITION. FOLLOWING THE VIEW TAKEN BY THE TRIBUNAL IN EARLIER YEARS DELETING SUCH AD HOC ADDITIONS, EXCEPT THE IMMEDIATELY PRECEDING YEAR FOR THE SPECIAL REASONS AS DISCUSSED IN OU R ORDER FOR THE A.Y 2006-07, WE ORDER TO DELETE THE SUSTENANCE OF AD HOC DISALLOWANCE OUT OF THE COMMISSION EXPENSE. 10. GROUND NO.7 OF THE ASSESSEES APPEAL IS AGAINST TH E CONFIRMATION OF ADDITION OF RS.4.21 CRORE TOWARDS LEGAL AND PROFESSIONAL FEES PAID TO BAKER & MCKINSEY LLP AND OTHERS. THE FACTUAL SCENARIO OF THIS GROUND IS THAT THE ASSESSEE PAID A SUM OF RS.8.42 CRORE TOWARDS LEGAL FEES PAID FOR PUROLITE LITIGATION IN USA TO BAKER AND MCKINSEY AND SILVERMAN BERHHEIM & VOGEL AND WILENTZ GOLDMAN & SPITZER P.A. THE ASSESSEE WAS CALLED UPON TO EXPLAIN THE NATURE OF SUCH PAYMENT, IN RESPONSE TO WHICH IT WAS SUBMITTED THAT PUROLITE FILED A CIVIL ACTION AGAINST THE ASSESSEE COMPANY AND ITS USA SUBSIDIARY IN THE EASTERN DISTRICT OF PENNSYLVANIA, USA ON THE GROUND THAT CERTAIN EMPLOYEES LEAV ING ITA NOS.510 & 511/PUN/2014 ITA NOS. 715 & 716/PUN/2014 THERMAX LTD., 5 PUROLITE JOINED THERMAX LTD. AND SHARED SECRET DETAILS OF PUR OLITE WITH THE ASSESSEE AND ITS USA SUBSIDIARY. THE ASSESSEE SUB MITTED THAT THIS EXPENDITURE WAS INCURRED TO DEFEND THE LITIGATION. NOT CONVINCED, THE AO HELD THAT SUCH EXPENDITURE WAS COVERED B Y THE EXPLANATION TO SECTION 37(1) OF THE ACT AS IT INVOLVED INFRINGEME NT OF RIGHTS. HE, THEREFORE, DISALLOWED THE FULL AMOUNT OF EXP ENDITURE. THE LD. CIT(A) DID NOT APPROVE THE ACTION OF THE AO IN INVO KING THE EXPLANATION TO SECTION 37. HE, HOWEVER, OBSERVED THAT THE PARTIES TO THE LITIGATION WERE NOT ONLY THE ASSESSEE BUT ALSO ITS SUBSIDIARY IN USA. IT WAS, THEREFORE, HELD THAT 50% OF THE EXPENSE SHOU LD BE ALLOWED AS DEDUCTION. THIS IS HOW, THE ASSESSEE IS AGGRIEV ED BY THE CONFIRMATION OF ADDITION TO THE EXTENT OF RS.4,21,00,000/-. 11. WE HAVE HEARD BOTH THE SIDES AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD. IT IS AN ADMITTED POSITION THAT THE ASSES SEE INCURRED RS.8.42 CRORE TO DEFEND THE LITIGATION CREATED BY PU ROLITE. SUCH LITIGATION WAS INITIATED NOT ONLY AGAINST THE ASSESSEE BUT ALSO ITS USA SUBSIDIARY. THE BENEFIT OF SUCH EXPENDITURE IN THE S HAPE OF FEE PAID TO BAKER AND MCKINSEY LLP AND OTHERS, HAS OBVIOU SLY GONE TO THE ASSESSEE IN ASMUCHAS IT HAD DEFENDED ITSELF. THE M ERE FACT THAT THE SUBSIDIARY IN THE USA ALSO GOT BENEFITTED BY THE EXPENDITURE, CANNOT COME IN THE WAY OF ALLOWING DEDUCTION IN TH E ITA NOS.510 & 511/PUN/2014 ITA NOS. 715 & 716/PUN/2014 THERMAX LTD., 6 HANDS OF THE ASSESSEE. EVEN IN THE ABSENCE OF ITS USA EN TITY BEING A PARTY TO THE LITIGATION, THE ASSESSEE WAS BOUND TO INCUR SUCH EXPENDITURE TO DEFEND ITSELF. THE HONBLE SUPREME COURT IN SASSOON J. DAVID & COMPANY PRIVATE LIMITED VS. CIT (1979) 118 ITR 261 (SC) HAS HELD THAT DEDUCTION HAS TO BE ALLOWED FOR THE EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS EVEN IF BENEFIT OF SUCH EXPENDITURE PERCOLATES TO S OMEONE ELSE ALSO. RESPECTFULLY FOLLOWING THE PRECEDENT, WE DECIDE TH IS GROUND IN THE ASSESSEES FAVOUR AND ORDER TO DELETE THE A DDITION OF RS.4.21 CRORE. 12. GROUND NO.3 OF THE REVENUES APPEAL IS AGAINST TH E DELETION OF DISALLOWANCES MADE ON ACCOUNT OF PUBLIC RELATION EXPENSES, MEMBERSHIP & SUBSCRIPTION, GARDEN EXPENSES, MISC. EXPENS E, HOUSE MAGAZINE EXPENSES, VEHICLE EXPENSES, MISC FOREIGN T RAVEL EXPENSES AND TELEPHONE EXPENSES. 13. BOTH THE SIDES AGREE THAT THIS GROUND IS SIMILAR TO THE G ROUNDS TAKEN BY THE REVENUE IN EARLIER YEARS IN WHICH THE AD HOC A DDITIONS MADE BY THE AO HAVE BEEN FINALLY DELETED BY THE TRIBUNAL. FOLLOWING THE ORDERS OF THE TRIBUNAL IN THE ASSESSEES OWN C ASE FOR EARLIER YEARS, THIS GROUND OF REVENUE IS NOT ALLOWED. ITA NOS.510 & 511/PUN/2014 ITA NOS. 715 & 716/PUN/2014 THERMAX LTD., 7 14. GROUND NO.5 OF THE REVENUES APPEAL IS AGAINST THE DELETION OF ADDITION OF RS.40,00,930/- ON ACCOUNT OF PROVISION FOR MED ICAL AND LTA EXPENSES. BOTH THE SIDES AGREE THAT THE FACTS AND CIRC UMSTANCES OF THIS GROUND ARE SIMILAR TO THE GROUND NO.6 OF THE REVE NUES APPEAL FOR THE A.Y. 2004-05. RELEVANT DISCUSSION HAS BEE N MADE IN PARAS 58 TO 60 ON PAGES 39 & 40 OF THE TRIBUNAL ORDER DATED 25-05- 2009 IN WHICH SUCH AN ISSUE HAS BEEN DETERMINED IN ASSES SEES FAVOUR. FOLLOWING THE SAME, WE UPHOLD THE IMPUGNED ORDER ON THIS SCORE. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND THAT OF THE DEPARTMENT IS DISMISSED. A.Y. 2008-09 : 16. GROUND NO.1 OF THE ASSESSEES APPEAL AND GROUN D NO. 1 OF THE REVENUES APPEAL ARE AGAINST THE CONFIRMATION OF ADDITION ON ACCOUNT OF INCOME RECOGNITION FROM CONTRACT ACTIVITY. 17. BOTH THE SIDES AGREE THAT SIMILAR ISSUE HAS BEEN DEC IDED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE A.Y. 2005-06 IN THE ASSESSEES FAVOUR. RELEVANT DISCUSSION HAS BEEN MADE IN PARA 8.1 PAGES 9 TO 12 OF THE ORDER. FOLLOWING THE PRECEDENT, WE DE CIDE THIS ITA NOS.510 & 511/PUN/2014 ITA NOS. 715 & 716/PUN/2014 THERMAX LTD., 8 ISSUE IN FAVOUR OF THE ASSESSEE. THE GROUND OF THE ASS ESSEE IS ALLOWED AND THAT OF THE REVENUE IS DISMISSED. 18. GROUND NO.2 OF THE ASSESSEES APPEAL IS AGAINST T HE DENIAL OF DEDUCTION ON ACCOUNT OF PRIOR PERIOD EXPENSES. HERE AGAIN , BOTH THE SIDES ARE IN AGREEMENT THAT THE FACTS AND CIRCUMSTANCES OF TH IS GROUND ARE MUTATIS MUTANDIS SIMILAR TO THE GROUND NO.2 FOR THE A.Y. 2005-06 IN WHICH SUCH ISSUE HAS BEEN DECIDED AGAINS T THE ASSESSEE. FOLLOWING THE SAME VIEW, WE DECIDE THIS GROUND AG AINST THE ASSESSEE. 19. GROUND NO.3 OF THE ASSESSEES APPEAL AND GROUN D NO.2 OF THE REVENUES APPEAL ARE AGAINST THE LIQUIDATED DAMAGES. THE ASSESSEES GROUND IS IN TWO PARTS VIZ., A SUM OF RS.6,98 ,07,700/- PAID TO ARSMETA CAPTIVE POWER COMPANY AND THE REMAINING AMO UNT OF RS.1,40,46,812/-. IN SOFARAS THE SECOND PART OF TH E ASSESSEES GROUND AND THE GROUND OF THE REVENUE ARE CONCERNED, TH E ISSUE HAS BEEN CONSISTENTLY DECIDED BY THE TRIBUNAL IN FAVOUR OF THE A SSESSEE. FOLLOWING THE VIEW TAKEN BY THE TRIBUNAL IN THE PRECEDING YEAR S, WE ALLOW THIS PART OF THE ASSESSEES GROUND AND DISMISS THAT OF THE REVENUE. ITA NOS.510 & 511/PUN/2014 ITA NOS. 715 & 716/PUN/2014 THERMAX LTD., 9 20. THE SECOND COMPONENT OF THIS GROUND IS AGAINST TH E LIQUIDATED DAMAGES OF RS.6.98 CRORE TOWARDS INVOCATION OF BANK GUA RANTEE BY THE ARSMETA CAPTIVE POWER COMPANY. THE LD. CIT(A) CONFIR MED THE ADDITION. 21. WE HAVE HEARD BOTH THE SIDES AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD. IT IS NOTICED THAT THE ASSESSEE CLAIMED DEDUCTION ON A MERE INVOCATION OF PERFORMANCE BANK GUARANTEE ON 2 8-04- 2007. THEREAFTER, THE ASSESSEE SOUGHT LEGAL REMEDY AND THE INJUNCTION GRANTED BY THE CITY CIVIL COURT WAS VACATED. THE MATTE R WAS FINALLY SETTLED IN A LATER YEAR ON THE ASSESSEE PAYING A SUM OF RS.6.00 CRORE TO ARSMETA CAPTIVE POWER COMPANY. TILL THAT TI ME, THE ASSESSEE COULD NOT HAVE CLAIMED DEDUCTION OF CONTRAC TUAL LIQUIDATED DAMAGES TO ARSMETA CAPTIVE POWER COMPANY. NO DEDUCTION OF RS.6.98 CRORE IS PERMISSIBLE FOR THE YEAR UND ER CONSIDERATION AS NO LIABILITY ON ACCOUNT OF LIQUIDATED DAMAGES WA S FINALLY INCURRED. THE LD. AR CONTENDED THAT THE ASSESSEE VOLU NTARILY CREDITED RS.6.98 CRORE TO ITS PROFIT AND LOSS ACCOUNT IN SUCC EEDING YEAR WHEN IT CLAIMED DEDUCTION OF PAYMENT OF RS.6.00 CROR E. IF THE ASSESSEE HAD ERRONEOUSLY CREDITED ITS INCOME IN THE SUCCEED ING YEAR, THE SAME CAN BE REVERSED SUBJECT TO THE RELEVANT PROVISION. WE, THEREFORE, UPHOLD THE IMPUGNED ORDER ON THIS SCORE. ITA NOS.510 & 511/PUN/2014 ITA NOS. 715 & 716/PUN/2014 THERMAX LTD., 10 22. GROUND NO.4 OF THE ASSESSEES APPEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF DEPRECIATION AT 80% IN RESPEC T OF CERTAIN ITEMS OF PLANT AND MACHINERY INSTEAD OF ALLOWING DEPRECIATION @25%. 23. HERE AGAIN, IT IS FOUND AS AN ADMITTED POSITION THAT SI MILAR ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN THE ASSESSEES F AVOUR FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR AND EARLIER YEAR S. RESPECTFULLY FOLLOWING THE PRECEDENT, WE DECIDE THIS ISSUE IN ASSESSEES FAVOUR. 24. GROUND NO.5 OF THE ASSESSEES APPEAL IS AGAINST THE DISALLOWANCE U/S.14A. THE ASSESSEE EARNED EXEMPT DIVIDEN D INCOME OF RS.34.25 CRORE. THE AO INVOKED THE PROVISION S OF SECTION 14A R.W. RULE 8D AND ACCORDINGLY COMPUTED THE NET DISALLOWANCE AT RS.244.14 LAKH, AFTER ALLOWING THE BENEFIT OF RS.85.63 LAKHS AS DISALLOWED BY THE ASSESSEE. THE LD. CI T(A) RESTORED THE MATTER TO THE FILE OF AO WITH DIRECTION TO RECOMPUTE THE DISALLOWANCE BY HOLDING THAT IN COMPUTING THE AVERAGE VALUE OF INVESTMENTS, THE INVESTMENTS WHICH YIELD TAXABLE INCOME, SHOULD BE EXCLUDED. HE JETTISONED THE CONTENTION OF THE ASSESSEE THAT THE FIXED ASSETS SHOULD BE CONSIDERED AT THEIR GROSS VALUE WITHOUT EXC LUDING DEPRECIATION. HE FURTHER DIRECTED THE AO TO EXCLUDE INTEREST OF ITA NOS.510 & 511/PUN/2014 ITA NOS. 715 & 716/PUN/2014 THERMAX LTD., 11 RS.19.99 LAKH INCURRED IN POST SHIPMENT PACKING CREDIT. ALL THE ABOVE THREE DIRECTIONS GIVEN BY THE LD. CIT(A) ARE PERFEC TLY IN ORDER. SINCE THE ISSUE HAS BEEN RESTORED TO THE AO, WE UPHOLD THE IMPUGNED ORDER TO THIS EXTENT THEREBY AFFIRMING THE SPECIFIC DIRECTIONS GIVEN IN THE IMPUGNED ORDER. 25. GROUND NO. 6 OF THE ASSESSEES APPEAL IS AGAINST TH E CONFIRMATION OF ADDITION OF RS.1,15,00,653/- ON ACCOUNT O F PAYMENT OF COMMISSION TO NISCHAL CORPORATE SERVICES. 26. HAVING HEARD BOTH THE SIDES AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD, WE FIND THAT FACTS AND CIRCUMSTANCE OF THIS GROUND ARE SIMILAR TO GROUND NO.1 OF THE ASSESSEES APP EAL FOR A.Y. 2006-07. IN OUR ORDER FOR THE SAID EARLIER YEAR, WE HA VE RESTORED THE MATTER TO THE FILE OF AO WITH CERTAIN DIRECTIONS FOR DECIDING THE ISSUE AFRESH. FOLLOWING THE SAME VIEW, WE SET-ASIDE THE IMPUGNED ORDER AND REMIT THE MATTER TO THE FILE OF AO FOR DECIDING THIS ISSUE AFRESH IN ACCORDANCE WITH OUR DIRECTIONS RENDERED THEREIN. 27. GROUND NO.7 OF THE ASSESSEES APPEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE ON ACCOUNT OF LEGAL EXPENSES A ND FEES PAID TO BAKER & MCKINSERY LLP AMOUNTING TO RS.9.74 CRORE I N RESPECT OF USA LITIGATION. BOTH THE SIDES AGREE THAT THE FACTS AND ITA NOS.510 & 511/PUN/2014 ITA NOS. 715 & 716/PUN/2014 THERMAX LTD., 12 CIRCUMSTANCES OF THIS GROUND ARE SIMILAR TO GROUND NO.7 TAK EN FOR THE A.Y. 2007-08. FOLLOWING THE VIEW TAKEN HEREINABOVE, WE ALLOW THIS GROUND OF APPEAL. 28. GROUND NO.8 OF THE ASSESSEES APPEAL AND GROU ND NO.4 OF THE REVENUES APPEAL ARE AGAINST THE CONFIRMATION/DELETION OF ADD ITION TOWARDS PROVISION OF WARRANTY. 29. BOTH THE SIDES AGREE THAT SIMILAR GROUNDS HAVE CO NSISTENTLY BEEN DECIDED BY THE TRIBUNAL IN ASSESSEES FAVOUR IN THE E ARLIER ASSESSMENT YEARS. FOLLOWING THE PRECEDENTS, WE ALLOW THIS GR OUND OF APPEAL IN ASSESSEES FAVOUR AND DISMISS THE REVENUE S GROUND. 30. GROUND NO.3 OF THE REVENUES APPEAL IS AGAINST THE AD HOC DISALLOWANCE OF PUBLIC RELATION EXPENSES, MISCELLANEOUS VEHICLE EXPENSES, FOREIGN TRAVEL EXPENSES AND TELEPHONE EXPENSE S. 31. HERE AGAIN, BOTH THE SIDES AGREE THAT THE FACTS AND CIRCUMSTANCES OF THIS GROUND ARE SIMILAR TO GROUND NO.3 FO R THE A.Y. 2005-06 IN WHICH THE ISSUE HAS BEEN DECIDED IN ASSES SEES FAVOUR. FOLLOWING THE SAME, WE DISMISS THIS GROUND OF APPEA L. ITA NOS.510 & 511/PUN/2014 ITA NOS. 715 & 716/PUN/2014 THERMAX LTD., 13 32. GROUND NO.5 OF THE REVENUES APPEAL IS AGAINST THE RELIEF ALLOWED BY THE LD. CIT(A) IN THE PROVISION FOR MEDICAL AND L TA EXPENSES AMOUNTING TO RS.90,36,835/-. 33. BOTH THE SIDES AGREE THAT THE FACTS AND CIRCUMSTANCES OF THIS GROUND ARE SIMILAR TO GROUND NO. 6 OF THE REVENUES APP EAL FOR THE A.Y. 2004-05 WHEREIN THIS GROUND WAS DECIDED IN FAVOUR O F THE ASSESSEE. FOLLOWING THE SAME, WE UPHOLD THE IMPUGNED ORD ER AND DISMISS THIS GROUND AS WELL. 34. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH SEPTEMBER, 2019. SD/- SD/- (S.S. VISWANETHRA RAVI) (R.S. SYAL) JUDICIAL MEMBER VICE P RESIDENT PUNE; DATED : 13 TH SEPTEMBER, 2019 ITA NOS.510 & 511/PUN/2014 ITA NOS. 715 & 716/PUN/2014 THERMAX LTD., 14 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-2, NASHIK 4. 5. 6. THE CCIT, NASHIK , , / DR B, ITAT, PUNE; / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR P RIVATE SECRETARY , / ITAT, PUNE DATE 1. DRAFT DICTATED ON 11-09-2019 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 13-09-2019 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *