M/s Keihin Penalfa Limited, New Delhi V. ACIT, New Delhi

ITA 5141/DEL/2010

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6373 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 19-05-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 19-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R K KAPOOR
• Keywords: Transfer pricing; Business expenditure
• Section: 43B; 143(3)

Judgement Text

ITA NOS. 5141/DEL/2010, 4309/DEL/2011 & 4937/DEL/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH I NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NOS. 5141/DEL/2010, 4309/DEL/2011 & 4937/DEL /2012 A.YRS. : 2006-07, 2007-08 & 2008-09 M/S KEIHIN PENALFA LIMITED, M-34, 2 ND FLOOR, GREATER KAILASH, PART-II MARKET, NEW DELHI 110 048 PAN: AAACK5968J) VS. ACIT, RANGE - 5(1), NEW DELHI (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : S H. PRADEEP DINODIA, ADV. & SH. R.K. KAPOOR, CA DEPARTMENT BY : SH. YOGESH KUMAR VERMA, CIT(DR) ORDE ORDE ORDE ORDER R R R PER PER PER PER BENCH BENCH BENCH BENCH THESE ARE THE APPEALS BY THE ASSESSEE AGAINST THE R ESPECTIVE ORDERS OF THE ASSESSING OFFICER PASSED U/S. 143(3) OF THE I.T. ACT READ WITH SECTION 144C FOR THE ASSTT. YEARS 2006-07, 200 7-08 & 2008-09 2. ONE ONE ONE ONE COMMON COMMON COMMON COMMON ISSUE ISSUE ISSUE ISSUE RAISED RAISED RAISED RAISED IS THAT LD. TPO HAS GROSSLY ERRED IN LAW IS THAT LD. TPO HAS GROSSLY ERRED IN LAW IS THAT LD. TPO HAS GROSSLY ERRED IN LAW IS THAT LD. TPO HAS GROSSLY ERRED IN LAW FOR DETERMINING ARMS LENGTH PRICE (ALP) OF ROYALT Y PAYMENT TO AES OF FOR DETERMINING ARMS LENGTH PRICE (ALP) OF ROYALT Y PAYMENT TO AES OF FOR DETERMINING ARMS LENGTH PRICE (ALP) OF ROYALT Y PAYMENT TO AES OF FOR DETERMINING ARMS LENGTH PRICE (ALP) OF ROYALT Y PAYMENT TO AES OF THE ASSESSEE AT NIL. THE ASSESSEE AT NIL. THE ASSESSEE AT NIL. THE ASSESSEE AT NIL. 2.1 ON THIS ISSUE AT THE OUTSET LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOR OF THE ASSESSEE BY THE ORDER OF THE ITAT IN ASSESSEES OWN CASE FOR ASSTT. YEAR 2004-05 AND 2005-06 ITA NOS. 5141/DEL/2010, 4309/DEL/2011 & 4937/DEL/2012 2 ON SIMILAR FACTS. LD. DR COULD NOT CONTROVERT THE SU BMISSIONS OF THE ASSESSEE. UPON CAREFUL CONSIDERATION, WE NOTE THAT ON THE ISSUE PERTAINING TO ARMS LENGTH PRICE (ALP) OF ROYALTY PAYM ENT THE ISSUE HAS BEEN ADJUDICATED BY THE TRIBUNAL IN ASSESSEES OWN C ASE IN ITA NO. 3287/DEL/2011 AND 5546/DEL/2112 FOR ASSTT. YEAR 2004- 05 AND 2005-06 VIDE ORDER DATED 6.5.2014. THE TRIBUNAL HAS DEALT W ITH THE ISSUE AS UNDER:- 5.11 FACTS AND CIRCUMSTANCES OF THIS TP ADJUSTMENTS ARE SIMILAR TO AY 2004-05, LD. CIT(A) HAS ALSO SUBSTANTIALLY RELIED ON THE ORDER FOR AY 2005-06 WHILE GRANTING THE RELIEF. LD. CIT(A) HAS SUPPLEMENTED HIS ORDER ON THE NECESSITY OF PAYING THE ROYALTY WHICH IS TO BE DECIDED FROM BUSINESSMAN POINT OF VIEW. THIS PROPOSITION HAS BEEN UPHELD BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. EKL APPLIANCES 2012-TII-01- HC-DEL-TP. THE ACCEPTED HISTORY OF THE CASE REGARDING PAYMENT OF ROYALTY IS THAT IN ASSESSMENT YEAR 2003-04 ALSO THE MATTER TRAVELLED UPTO THE HIGH COURT. IT IS HELD IN FAVOR OF THE ASSESSEE THAT THE PAYMENT OF RUNNING ROYALTY IS ON REVENUE ACCOUNT. THEREFORE, IN VIEW OF THE HONBLE DELHI HIGH COURT JUDGMENT IN ASSESSEES OWN CASE THE NECESSITY OF ROYALTY CANNOT BE QUESTIONED OR DOUBTED. 5.12 BESIDES SIMILAR ISSUE OF ROYALTY PAYMENT IS DECIDED IN FAVOR OF THE ASSESSEE IS DECIDED BY ITA NOS. 5141/DEL/2010, 4309/DEL/2011 & 4937/DEL/2012 3 THE ITAT IN THE CASE OF LUMAX INDUSTRIES LTD. 2013-TII-123-ITAT-DEL-TP HOLDING THAT: PAYMENT OF ROYALTY WAS BEING CLAIMED AND ALLOWED RIGHT FROM 1984 TO ASSESSMENT YEAR 2003-04, AS BUSINESS EXPENDITURE OF THE ASSESSEE AND NEW CIRCUMSTANCE HAS BEEN POINTED OUT BY EITHER OF THE AUTHORITIES BELOW TO HOLD THAT IN THE YEARS THEREAFTER, THE BENEFIT ACCRUED TO THE ASSESSEE BY THE PAYMENT OF SUCH ROYALTY HAS DRIED UP; 5.13 OUR AFORESAID VIEW IS FORTIFIED BY THE AFORESA ID JUDGMENT OF LUMAX INDUSTRIES (SUPRA). SINCE THE ROYALTY WAS BEING PAID FROM 1997 AND WAS CONTINUOUSLY EXAMINED BY THE AO, THEN IN THE ABSENCE OF ANY NEW FACTS TO HOLD THAT THERE WAS NO NEED TO PAY THE ROYALTY WAS UNCALLED FOR. 5.14 AFTER HEARING THE PARTIES AND ON PERUSAL OF TH E RECORD IN OUR CONSIDERED VIEW NO INTERFERENCE IS CALLED FOR IN THE ORDER PASSED BY THE CIT(A) ON THIS ISSUE AND THE APPEAL OF THE REVENUE FOR A.Y. 2005-06 IS DISMISSED. 2.2 SINCE THERE IS NO DISPUTE, THAT THE FACTS IN TH E PRESENT CASES ARE SIMILAR TO THE ONE DEALT WITH BY THE TRIBUNAL AS AFO RESAID, THE ISSUE HEREIN HAS TO BE DECIDED IN FAVOR OF THE ASSESSEE. RESPECTFULLY, ITA NOS. 5141/DEL/2010, 4309/DEL/2011 & 4937/DEL/2012 4 FOLLOWING THE PRECEDENT AS ABOVE, WE SET ASIDE TH E ORDER OF THE AO AND DECIDE THE ISSUE IN FAVOR OF THE ASSESSEE. 3. ANOTHER COMMON ISSUE RAISED IN A.Y. 2006 ANOTHER COMMON ISSUE RAISED IN A.Y. 2006 ANOTHER COMMON ISSUE RAISED IN A.Y. 2006 ANOTHER COMMON ISSUE RAISED IN A.Y. 2006- -- -07 AND 2008 07 AND 2008 07 AND 2008 07 AND 2008- -- -09 09 09 09 PERTAINS TO THE DISALLOWANCE OF CONTRIBUTION TO GRO UP GRATUITY FUND PERTAINS TO THE DISALLOWANCE OF CONTRIBUTION TO GRO UP GRATUITY FUND PERTAINS TO THE DISALLOWANCE OF CONTRIBUTION TO GRO UP GRATUITY FUND PERTAINS TO THE DISALLOWANCE OF CONTRIBUTION TO GRO UP GRATUITY FUND THE ASSESSEE HAS TAKEN A SCHEME FROM LIC OF GROUP GRATUITY FUND. THE PAYMENT ACTUALLY MADE TO GROUP GRATUITY F UND WERE CLAIMED AS DEDUCTION U/S. 43B OF THE I.T. ACT. THE PAYMENTS WERE MADE BEFORE THE FILING OF THE TAX RETURN. THE CLAIM WAS MADE BASED ON PROVISION BUT IT IS ACTUAL PAYMENT. HOWEVER, PROVISI ONS OF SECTION 40A(7) ARE NOT APPLICABLE. FURTHERMORE, WE NOTE THAT ON SIMILAR FACTS DRP HAS ALLOWED THE SAME IN THE A.Y. 2007-08. FURTHE RMORE, THE ISSUE IS FOUND TO BE COVERED BY THE DECISION OF THE HONB LE APEX COURT IN THE CASE OF CO COCO COMMISSIONER OF INCOME TAX VS. TEXTOOL CO. LTD. MMISSIONER OF INCOME TAX VS. TEXTOOL CO. LTD. MMISSIONER OF INCOME TAX VS. TEXTOOL CO. LTD. MMISSIONER OF INCOME TAX VS. TEXTOOL CO. LTD. 263 CTR 257. 263 CTR 257. 263 CTR 257. 263 CTR 257. IN THIS CASE, IT WAS HELD THAT FROM A BARE READING O F SECTION 36(1)(V), IT IS MANIFEST THAT THE REAL INTENTION BEHIND THE PRO VISION IS THAT THE EMPLOYER SHOULD NOT HAVE ANY CONTROL OVER THE FUNDS OF THE IRREVOCABLE TRUST CREATED EXCLUSIVELY FOR THE BENEFIT OF THE EMP LOYEES. IN THE INSTANT CASE, IT IS EVIDENT FROM THE FINDINGS RECORD ED BY THE COMMISSIONER AND AFFIRMED BY THE TRIBUNAL THAT THE A SSESSEE HAD ABSOLUTELY NO CONTROL OVER THE FUND CREATED BY THE LIC FOR THE BENEFIT OF THE EMPLOYEES OF THE ASSESSEE AND FURTHER ALL THE CO NTRIBUTION MADE BY THE ASSESSEE IN THE SAID FUND ULTIMATELY CAME BAC K TO THE ASSESSEES EMPLOYEES GRATUITY FUND, APPROVED BY THE COMMISSIONER. THUS, THE CONDITIONS STIPULATED IN SECTION 36(1)(V) STOOD SATISFIED. HAVING REGARD TO THE FACTS FOUND BY THE COMMISSIONER AND AFFIRMED BY THE TRIBUNAL, NO FAULT CAN BE FOUND WITH THE OPINIO N EXPRESSED BY THE ITA NOS. 5141/DEL/2010, 4309/DEL/2011 & 4937/DEL/2012 5 HIGH COURT, WARRANTING ANY INTERFERENCE. RESULTANTL Y, THE APPEAL IS DISMISSED. 3.1 SINCE IN THIS CASE ASSESSEE HAD MADE THE PAYMEN T TO THE LIC AND THE PAYMENTS WERE MADE BEFORE THE FILING OF THE INC OME TAX RETURN. HENCE, RESPECTFULLY FOLLOWING THE PRECEDENT AS ABOV E, WE HOLD THAT THE CLAIM OF THE ASSESSEE IS ALLOWABLE. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE AO AND DECIDE THE ISSUE IN FAVOR OF THE ASSE SSEE. 4. ANOTHER ISSUE RAISED IN A.Y. 2006 ANOTHER ISSUE RAISED IN A.Y. 2006 ANOTHER ISSUE RAISED IN A.Y. 2006 ANOTHER ISSUE RAISED IN A.Y. 2006- -- -07 IS THAT ADDITION OF RS. 07 IS THAT ADDITION OF RS. 07 IS THAT ADDITION OF RS. 07 IS THAT ADDITION OF RS. 77,789/ 77,789/ 77,789/ 77,789/- -- - ON ACCOUNT OF ALLEGED DIFFERENCE IN THE BALANCE OF ONE OF THE PARTIES IS ON ACCOUNT OF ALLEGED DIFFERENCE IN THE BALANCE OF ONE OF THE PARTIES IS ON ACCOUNT OF ALLEGED DIFFERENCE IN THE BALANCE OF ONE OF THE PARTIES IS ON ACCOUNT OF ALLEGED DIFFERENCE IN THE BALANCE OF ONE OF THE PARTIES IS BAD IN LAW. BAD IN LAW. BAD IN LAW. BAD IN LAW. ON THIS ISSUE AO NOTED THAT ASSESSEE COMPANY WAS AS KED TO PROVIDE BALANCE CONFIRMATION FROM THE CREDITORS. IN THE CREDIT BALANCE CONFIRMATION PROVIDED BY ONE PARTY M/S SANDEN VIKAS INDIA LTD., THERE WAS A DIFFERENCE OF RS. 77,789/-. AO HELD THAT THE ASSESSEE HAS NOT OFFERED ANY RECONCILIATION /CLARIFICATION ABOUT THE SAME AND HENCE, THE SAME AMOUNT WAS ADDED TO THE INCOME OF THE ASSESSEE. ON THIS ISSUE IT IS THE SUBMISSION OF THE ASSESSEE THAT AO NEVER GAVE AN OPPORTUNITY TO THE ASSESSEE TO RECONCILE. THE RECONCILIATION IN THIS REGARD WAS DULY SUBMITTED BEFORE THE DRP, BUT THE DRP DID NOT LOOK IN TO THE RECONCILIATION. IT HAS BEEN SUBMITTED THAT THE DIFF ERENCE WAS DUE TO BONAFIDE REASONS THAT CERTAIN CLAIMS AND INVOICES W ERE RAISED, WHICH WERE ACCOUNTED FOR BY THE ASSESSEE, BUT WERE NOT BE EN ACCOUNTED FOR BY THE PARTY. 4.1 WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT THE AO HAS NOT GIVEN ANY OPPORTUNITY TO THE ASSESSEE TO FILE THE RECONCILIATION AND THE RECONCILIATION FILED BEF ORE THE DRP WAS NOT EXAMINED. HENCE, WE DEEM IT APPROPRIATE TO REMIT THIS ISSUE TO THE FILE ITA NOS. 5141/DEL/2010, 4309/DEL/2011 & 4937/DEL/2012 6 OF THE AO. AO SHALL EXAMINE THE RECONCILIATION SUB MITTED BY THE ASSESSEE IN THIS REGARD AND ORDER ACCORDINGLY. NEE DLESS TO ADD THAT THE ASSESSEE SHOULD BE GIVEN ADEQUATE OPPORTUNITY O F BEING HEARD IN THIS REGARD. 5. ANOTHER COMMON ISSUE RAISED FOR ASSTT. YEARS 20 06 ANOTHER COMMON ISSUE RAISED FOR ASSTT. YEARS 2006 ANOTHER COMMON ISSUE RAISED FOR ASSTT. YEARS 2006 ANOTHER COMMON ISSUE RAISED FOR ASSTT. YEARS 2006- -- -07 AND 2007 07 AND 2007 07 AND 2007 07 AND 2007- -- - 08 PERTAINS 08 PERTAINS 08 PERTAINS 08 PERTAINS TO THE DISALLOWANCE OF UNUTILISED MODV AT CREDIT OUTSTANDING TO THE DISALLOWANCE OF UNUTILISED MODVAT CREDIT OUT STANDING TO THE DISALLOWANCE OF UNUTILISED MODVAT CREDIT OUT STANDING TO THE DISALLOWANCE OF UNUTILISED MODVAT CREDIT OUT STANDING AT THE END OF THE YEAR U/S. 43B OF THE I.T. ACT. AT THE END OF THE YEAR U/S. 43B OF THE I.T. ACT. AT THE END OF THE YEAR U/S. 43B OF THE I.T. ACT. AT THE END OF THE YEAR U/S. 43B OF THE I.T. ACT. 5.1 ON THIS ISSUE THE SUBMISSIONS OF THE ASSESSEE S COUNSEL ARE AS UNDER:- THE AO HAS MISINTERPRETED THE JUDGMENT OF HONBLE SPECIAL BENCH IN THE CASE OF DCIT VS. GLAXO SMITHKLI NE CONSUMER HEALTHCARE 107 ITD 343, 390 (CHANDIGARH SPECIAL BENCH). THE ASSESSEE EXPLAINED THAT AS PE R JUDGMENT OF HONBLE SUPREME COURT IN EICHER MOTORS LTD. VS. UNION OF INDIA 106 ELT 3 (SUPREME COURT), THE MODVAT CREDIT AVAILABLE TO THE ASSESSEE HAS BEEN SET OFF. THE SAME IS TREATED AS PAYMENT. MOREOVER, HONBLE SUPREME COURT IN THE FOLLOWING JUDGMENTS HAVE HELD THAT MODVAT CREDIT IS TO BE TREATED AS EXC ISE DUTY PAID, SO THIS ISSUE IS COVERED BY THESE JUDGME NTS IN FAVOR OF THE ASSESSEE. - CIT VS. SHRIRAM HONDA EQUIPMENT LTD. 353 ITR 481 (SC). - CIT VS. INDO NIPPON CHEMICALS LTD. 161 ITR 275 (SC) - CIT VS. MODIPAN LTD. 303 ITR 438 (DEL.) ITA NOS. 5141/DEL/2010, 4309/DEL/2011 & 4937/DEL/2012 7 - CIT VS. MARUTI UDYOG LTD. 255 CTR 140 (DEL.) THE ASSESSEE FILED EVIDENCE TO PROVE THAT ASSESSEE ACTUALLY UTILIZED MODVAT TILL 3 RD MAY, 2006 TO THE EXTENT OF RS. 55,78,462/- AND RETURN OF INCOME WAS FILED ON 29 TH NOVEMBER, 2006. THEREFORE, NO AMOUNT WAS DISALLOWABLE. DRP HAS UPHELD AOS VIEWS IN A SUMMARY MANNER AS PER PARA 5.5 OF ITS ORDER. HOWEVER, DRP ITSELF HAS ALLOWED RELIEF IN ASSTT. YE AR 2007-08, ON THIS ISSUE AND DELETED SIMILAR DISALLOWANCE. 5.2 WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT THE ISSUE RELATES TO DISALLOWANCE U/S. 43 B REGARDING MODVAT CREDIT. THE ASSESSEE HAD A SUM OF RS. 50,32,440/- FOR ASSTT. YEAR 2006-07 AND RS. 68,66,312/- FOR ASSTT. YEAR 2008-09 AS AMOUNT OF MODVAT CREDIT AVAILABLE ON THE LAST DATE OF THE PRE VIOUS YEAR ON THE AMOUNT OF FINISHED GOODS. THE ASSESSEE HAS CLAIMED TH AT THE SAID AMOUNT HAD BEEN PAID / ADJUSTED AGAINST THE MODVAT CR EDIT AVAILABLE BEFORE THE DUE DATE OF FILING OF INCOME RETURN. HOWEVER, THIS VIEW WAS NOT ACCEPTED BY THE ASSESSING OFFICER. HE REJEC TED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT ASSESSEE HAD NOT ISSUED ANY CHEQUE OR MADE ANY PAYMENT IN CASH IN RESPECT OF THE SAID AMOUN T IN THE FOLLOWING YEARS. 5.3 NOW WE FIND THAT THIS DISALLOWANCE BY THE ASSES SING OFFICER IS NOT TENABLE IN VIEW OF THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF EICHER MOTORS LTD. VS. UNION OF INDIA (SUPRA). IN T HIS CASE IT WAS HELD THAT THE SET OFF OF EXCISE DUTY AGAINST MODVAT CRED IT AVAILABLE TO THE ASSESSEE IS TO BE TREATED AS PAYMENT OF EXCISE DUTY AT THE TIME OF SET ITA NOS. 5141/DEL/2010, 4309/DEL/2011 & 4937/DEL/2012 8 OFF. SIMILAR VIEW HAS BEEN EXPRESSED IN OTHER CASE L AWS SUBMITTED ABOVE. 5.4 HENCE, PRINCIPALLY WE ARE IN AGREEMENT WITH THE PROPOSITION THAT AMOUNT OF EXCISE DUTY ADJUSTED AGAINST THE MODVAT AV AILABLE BEFORE THE DUE DATE OF FILING OF INCOME TAX RETURN HAS TO B E TREATED AS PAYMENT MADE U/S. 43B AND THE SAME IS ALLOWABLE. HEN CE, WE REMIT THIS ISSUE TO THE FILE OF THE AO. THE ASSESSING OF FICER SHALL EXAMINE THE ADJUSTMENTS OF EXCISE DUTY WITH THE MODVAT CREDIT AV AILABLE AND ACCORDINGLY ALLOW THE ASSESSEES CLAIM, AS PER THE E XPOSITION ARISING OUT OF THE HONBLE APEX COURT DECISION AS ABOVE. I N THE RESULT, THIS ISSUE IS ALLOWED FOR STATISTICAL PURPOSES. 6. AN ANAN ANOTHER OTHER OTHER OTHER COMMON ISS COMMON ISS COMMON ISS COMMON ISSUE RAISED IS THAT THE ADDITION OF RS. UE RAISED IS THAT THE ADDITION OF RS. UE RAISED IS THAT THE ADDITION OF RS. UE RAISED IS THAT THE ADDITION OF RS. 21,48,535/ 21,48,535/ 21,48,535/ 21,48,535/- -- - U/S. 40A(2)() OF THE I.T. ACT IS BAD IN LAW AND IS AGAINST THE U/S. 40A(2)() OF THE I.T. ACT IS BAD IN LAW AND IS AGAINST THE U/S. 40A(2)() OF THE I.T. ACT IS BAD IN LAW AND IS AGAINST THE U/S. 40A(2)() OF THE I.T. ACT IS BAD IN LAW AND IS AGAINST THE ORDER OF THE ORDER OF THE ORDER OF THE ORDER OF THE ITAT IN THE ASSESSEES OWN CASE FOR ASSTT. YEAR 20 03 ITAT IN THE ASSESSEES OWN CASE FOR ASSTT. YEAR 200 3 ITAT IN THE ASSESSEES OWN CASE FOR ASSTT. YEAR 200 3 ITAT IN THE ASSESSEES OWN CASE FOR ASSTT. YEAR 200 3- -- -04. 04. 04. 04. 6.1 ON THIS ISSUE AT THE OUTSET LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOR OF THE ASSESSEE BY THE DECISION IN ASSESSEES OWN CASE FOR ASSTT. YEAR 200 3-04 AND ALSO FOR ASSTT. YEAR 2004-05 AND 2005-06. LD. DR COULD NOT C ONTROVERT THESE SUBMISSIONS. 6.2 WE FIND THAT THE IDENTICAL ISSUE WAS CONSIDER ED BY THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSTT. YEAR 2004-05 AND 2005-06 (SUPRA). THE TRIBUNAL HAS HELD AS UNDER:- THE ASSESSEE HAD INCURRED EXPENSES FOR MAKING PAYMENT TO A RELATED CONCERN PANALFA INVESTMENTS PVT. ITA NOS. 5141/DEL/2010, 4309/DEL/2011 & 4937/DEL/2012 9 LTD. TOWARDS VARIOUS FACILITIES SUCH AS RENT, ELECT RICITY, WATER, GENERATOR EXPENSES AND ALSO PROVIDING MANPOWER TEC. AO MADE HIS OWN ESTIMATES AND HELD THE EXPENDITURE TO EXCESSIVE AND UNREASONABLE. THE AVAILING OF FACILITIES IS NOT IN DISPUTE. THE AO DI SPUTED THE REASONABLENESS OF PAYMENTS AND MADE HIS OWN GUESS WORK TO CONCLUDE THAT THE PAYMENTS MADE WAS EXCESSIVE. THIS ISSUE ALSO CAME UP IN AY 2003-04, BEFORE THE ITAT, ON SIMILAR FACTS THIS ISSUE WAS DEC IDED IN FAVOR OF THE ASSESSEE HOLDING THAT THERE WAS NO EXCESSIVENESS OR UNREASONABLENESS QUA THIS EXPENDITURE. LD. CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE BY FOLLOWING THIS DECISION OF ITAT IN ASSESSEES OWN CASE IN A.Y. 2003-04 IN ITA NO. 3714/DEL/2006M A COPY OF WHICH HAS BEEN FILED BEFORE US. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD AND FIND NO INFIRMITY IN THE ORDER OF LD. CIT (A) THAT AO HAS NOT BROUGHT ANY COGENT MATERIAL ON RECOR D TO COME TO A CONCLUSION THAT THIS EXPENDITURE IS EXCESSIVE OR UNREASONABLE. BESIDES, THIS ISSUE IS ALREADY DECIDED BY THE ITAT IN FAVOR OF ASSESSEE IN A.Y. 2003-04. RESPECTFULLY FOLLOWING THE SAME, THIS GROUND OF THE REVENUE IS DISMISSED. ITA NOS. 5141/DEL/2010, 4309/DEL/2011 & 4937/DEL/2012 10 6.3 SINCE THE FACTS ARE IDENTICAL, RESPECTFULLY FO LLOWING THE PRECEDENT AS ABOVE, WE SET ASIDE THE ORDER OF THE AO AND DE CIDE THE ISSUE IN FAVOR OF THE ASSESSEE. 7. IN THE RESULT, ALL THE THREE APPEALS FILED BY TH E ASSESSEE STAND ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23/5/2014. SD/- SD/- [ [[ [R.P. TOLANI R.P. TOLANI R.P. TOLANI R.P. TOLANI] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE:- 23/5/2014 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES