KOKUYO CAMLIN LTD, MUMBAI V. ASST CIT 10(1)(2), MUMBAI

ITA 5190/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8360 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2014-2015
• Appeal Filed On: 07-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RUCHIRA PARREKH
• Keywords: Capital asset; Business expenditure; Wholly owned subsidiary; Commercial expediency; Revenue expenditure; TDS; FORM 26AS
• Section: 28; 143(3); 37(1); 201

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL H BENCH MUMB AI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH JUDICIAL MEMBER ITA NO. 5190/MUM/2018 (ASSESSMENT YEAR 2014-15 ) KOKUYO CAMLIN LIMITED 48/2, HILTON HOUSE, CENTRAL ROAD, MIDC, ANDHERI (E), MUMBAI- 400093. PAN: AAACC1647E VS. ACIT - 10(1)(2) AAYAKAR BHAWAN, M. K. ROAD, MUMBAI-400020. APPELLANT RESPONDE NT APPELLANT BY : SHRI RAJESH S. ATHAVALE WITH MS. RUCHIRA PAREKH (A R) RESPONDENT BY : SHRI MANOJ KUMAR SINGH (DR) DATE OF HEARING : 29.08.2019 DATE OF PRONOUNCEMEN T : 04.10.2019 ORDERUNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. CIT(A)-17, MUMBAI DATED 06.07.2018 WHICH IN TURN ARISES FROM T HE ASSESSMENT ORDER DATED 31.08.2016 PASSED UNDER SECTION 143(3) FOR ASSESSMENT YEAR 2014-15. THE ASSESSEE HAS RAISED THE FOLLOWIN G GROUNDS OF APPEAL: THE APPELLANT OBJECTS TO THE ORDER DATED 6 JULY 201 8 PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-17 ['CIT(A)'] FOR THE AFORESAID ASSESSMENT YEAR ON THE FOLLOWING GROUNDS: 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTIO N OF THE LEARNED ASSESSING OFFICER ('AO') BY DISALLOWING THE WRITE O FF OF ADVANCES GIVEN TO CAMLIN ALPHAKIDS LIMITED (CAL'), A WHOLLY OWNED SU BSIDIARY AMOUNTING TO INR 3,05,32,140 CLAIMED AS BUSINESS DEDUCTION. ITA NO. 5190 MUM 2018-KOKUYO CAMLIN LIMITED. 2 2. THE LEARNED CIT(A) ERRED IN UPHOLDING THE OBSERV ATION OF THE AO THAT GRANTING OF ADVANCES TO THE WHOLLY OWNED SUBSIDIARY HAS NOT DIRECTLY SPRUNG FROM THE BUSINESS OF THE APPELLANT. 3. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDIT ION OF INTEREST INCOME AMOUNTING TO INR 2,56,442/- RECEIVED FROM KOTAK MAH INDRA BANK ('THE BANK') TO THE INCOME OF THE APPELLANT. 4. THE LEARNED CIT(A) HAS FAILED TO APPRECIATE THAT THE APPELLANT HAS CONSISTENTLY FOLLOWED THE POLICY OF RECOGNIZING THE INTEREST INCOME ON THE BASIS OF THE TDS CERTIFICATES AND NOT ON THE BASIS OF FORM 26AS AND ON THE BASIS OF SUCH POLICY, THE AFORESAID INTEREST HAS BE EN ACCOUNTED AND OFFERED FOR TAX IN THE SUBSEQUENT AY I.E AY 2015-16. 2. FACTS IN BRIEF OF THE CASE ARE THAT THE ASSESSEE I S A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF STATIO NARY AND ART MATERIAL PRODUCTS, FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2014-15 ON 30.11.2013 DECLARING LOSS OF RS. 11.27 CRORE (APPRO X). THE ASSESSEE DECLARED BOOK PROFIT WAS DECLARED AT (-) RS. 10.77 CRORE. THE CASE WAS SELECTED FOR SCRUTINY. THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER DISALLOWED WRITE OFF OF RS. 3.05 C RORE AND ADDITION OF RS. 2,56,445/- ON ACCOUNT OF INTEREST INCOME. ON AP PEAL BEFORE THE LD. CIT(A), BOTH THE ADDITIONS/DISALLOWANCE WERE CONFIR MED. THUS, FURTHER AGGRIEVED BY THE ORDER OF LD. CIT(A), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE THIS TRIBUNAL. 3. WE HAVE HEARD THE SUBMISSION OF LD. AUTHORIZED REPR ESENTATIVE (AR) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (D R) FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. GROUN D NO.1 & 2 RELATES TO DISALLOWANCE OF WRITE OFF OF ADVANCES MADE TO SU BSIDIARY. THE LD. AR ITA NO. 5190 MUM 2018-KOKUYO CAMLIN LIMITED. 3 OF THE ASSESSEE SUBMITS THAT ASSESSEE IS ONE OF THE PIONEER COMPANIES IN STATIONARY BUSINESS IN INDIA. INITIALLY THE ASSESSE E-COMPANY STARTED ITS BUSINESS AS A PROPRIETORSHIP FIRM NAMELY DANDEKAR & CO. IN 1946; CAMLIN PVT. LTD. ACQUIRED THE BUSINESS OF DANDEKAR & CO. AS ON ONGOING CONCERN IN 1998, THE COMPANY LISTED IN BOMB AY STOCK EXCHANGE. IN 2009, THE ASSESSEE HAS SET UP WHOLLY O WNED SUBSIDIARY NAMELY CAMLIN ALPHAKIDS LIMITED (CAL), WHICH IS IN THE BUSINESS OF PRE-SCHOOLING ACTIVITIES. THE INCORPORATION OF CAL IN PRE-SCHOOLING ACTIVITIES WAS EXPECTED TO WORK AS A FORWARD INTEGR ATION OF THE ASSESSEES BUSINESS. THEREFORE, THE ASSESSEE-COMPAN Y MADE A SUPPORT TO ITS SUBSIDIARY IN INITIAL YEAR. THE ADVANCES GIVEN TO CAL TO FIND ITS WORKING CAPITAL REQUIREMENT, WHEN SEEKING EXTERNAL FINANCIAL AID WAS DIFFICULT FOR CAL. IN 2011 KOKUYO S & T COMPANY, A MAJOR JAPANESES STATIONARY CORPORATION ACQUIRED MAJORITY STEP IN TH E ASSESSEE AND THE NAME OF ASSESSEE AS ON TODAY CAME INTO EXISTENCE. I N A.Y. 2014-15, THE ASSESSEE INVESTED A TOTAL OF RS. 535.32 LAKHS BY WA Y OF EQUITY CAPITAL, RS. 230.00 LAKHS BY WAY OF PREFERENCE CAPITAL HAD G IVEN ADVANCE OF RS. 305.32 LAKHS. IN A.Y. 2004-05 AFTER FIVE YEAR OF IN CORPORATION OF CAL, THE ASSESSEE DID NOT FORESEE ANY TURN OUT OF THIS B USINESS IN NEAR FUTURE AND THEREFORE, DECIDED TO DISENGAGE FROM BUSINESS O F CAL AND WROTE OFF OF ADVANCES OF RS. 305.32 LAKHS GIVEN TO CAL. ITA NO. 5190 MUM 2018-KOKUYO CAMLIN LIMITED. 4 4. THE LD. AR OF THE ASSESSEE FURTHER SUBMITS THAT THE ASSESSEE IS ALSO ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADIN G OF STATIONARY PRODUCT IN SCHOOL GOING CHILDREN. THE INCORPORATION OF PRE-SCHOOLING ACTIVITIES WAS EXPECTED TO WORK AS A FORWARD INTEGR ATION FOR THE ASSESSEES BUSINESS. THE CASH ADVANCED TO CAL ON AC COUNT OF COMMERCIAL EXPEDIENCY FOR MEETING WORKING CAPITAL R EQUIREMENT. THE DECISION TO WRITE OFF OF THE ADVANCES AND DISENGAGE ITSELF FROM THE ACTIVITIES OF CAL WAS TAKEN BY NEW MANAGEMENT OF TH E ASSESSEE AS THE NEW MANAGEMENT/BOARD OF DIRECTORS WAS OF THE VIEW T HAT MAKING CONTINUOUS LOSS YEAR AFTER YEAR, THERE WAS NO HOPE THAT THE SUBSIDIARY CAN BE REVIVED WHICH IS EVIDENT FROM THE FINANCIAL POSITION OF THE SUBSIDIARY. 5. THE LD. AR OF THE ASSESSEE SUBMITS THAT THE CASE LA W OF HONBLE BOMBAY HIGH COURT RELIED BY ASSESSING OFFICER IN SALEM MAG NESITE PVT. LTD VS. CIT [(2009) 180 TAXMAN 545 (BOM)] IS DISTINGUISHABL E ON THE FACT. IN THE SAID CASE THE MONEY ADVANCED TO SUBSIDIARY WAS REALIZED FOR PURCHASE OF CAPITAL ASSET, WRITE OFF OF CAPITAL ASS ET, WRITE OFF OF THOSE AMOUNT BY HOLDING COMPANIES ARE NOT ALLOWED AS REVE NUE DEDUCTION. HOWEVER, IN THE CASE OF ASSESSEE, THE ADVANCES WERE MADE TO MEET THE WORKING CAPITAL. FURTHER, THE CASE LAW RELIED UPON BY CIT(A) IN DCM LTD. 9123 TTJ 145 (DEL.) IS ALSO NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE AS IN THE SAID CASE, THE LOAN WAS GIVE N BY THE ASSESSEE TO ITA NO. 5190 MUM 2018-KOKUYO CAMLIN LIMITED. 5 SUBSIDIARY COMPANY TO ACQUIRE THE SHARE OF JOINT VE NTURE PARTNER. THUS, LOAN WAS GIVEN TO ENHANCE THE CAPITAL BASE. HOWEVER , IN THE PRESENT CASE, THE ASSESSEE HAS GIVEN ADVANCE TO ITS SUBSIDI ARY TO FINANCE ITS WORKING CAPITAL NEEDS AND THIS TRANSACTION IS OF RE VENUE NATURE. FURTHER, THE DECISION OF BOMBAY TRIBUNAL IN GRINDWELL NORTON LTD. (91 ITD 412 (BOM) IS ALSO NOT APPLICABLE ON THE FACTS OF THE PR ESENT CASE. IN THE SAID CASE, THE LOAN WAS GIVEN TO SUBSIDIARY COMPANY TO E ARN INTEREST INCOME. HOWEVER, IN THE PRESENT CASE, THE ASSESSEE HAS GIVE N INTEREST FREE ADVANCES. FURTHER, THE ORDER OF HYDERABAD TRIBUNAL IN VST INDUSTRIES (ITA NO. 691/HYD/2005 IS ALSO NOT APPLICABLE. IN TH E SAID CASE, THE ADVANCES ARE NOT IN THE COURSE OF BUSINESS OF THE A SSESSEE, HOWEVER, IN THE PRESENT CASE, THE ASSESSEE HAS ESTABLISHED THAT ADVANCES WERE PROVIDE FOR FURTHERANCE OF BUSINESS OF THE ASSESSEE. 6. IN SUPPORT OF HIS SUBMISSION, THE LD. AR OF THE AS SESSEE RELIED UPON THE FOLLOWING CASE LAW: 1. S.A. BUILDERS LTD. VS. CIT (158 TAXMAN 74(SC). 2. CIT VS. AMALGAMATION (P.) LTD. [1997] 92 TAXMAN 132 (SC). 3. CIT VS. SPENCERS AND CO. LTD. (2014) 47 TAXMANN.CO M 55 (MADRAS). 4. CIT VS. ABDUL RAZAK & CO. (136 ITR 825). 5. CIT VS. GILLANDERS ARBUTHNOT & CO. LTD. (138 ITR 76 3 KOL). 6. JACKIE SHROFF VS. ACIT (2019) 101 TAXMANN.COM 455 ( MUM. TRIB.). 7. ACIT VS. OSN INFRASTRUCTURE & PROJECTS PVT. LTD. (I TA NO. 345/DEL/2015). 8. PEPSICO INDIA HOLDINGS PVT. VS. DCIT (ITA NO. 147/D EL/2010). 9. ACIT VS. BEST & CROMPTION ENGINEERING LTD. [2013] 3 6 TAXMANN.COM 555. 10. M/S SUMMIT INVESTMENTS LTD. VS. JCIT (ITA NO. 338/K OL/1999 . ITA NO. 5190 MUM 2018-KOKUYO CAMLIN LIMITED. 6 7. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPO RTED THE ORDER OF LOWER AUTHORITIES. THE ALLEGED ADVANCES CANNOT BE A LLOWED EITHER UNDER SECTION 28, 29 & UNDER SECTION 37(1). THE ASSESSEE HAS NOT GIVEN ANY EVIDENCE TO PROVE THAT THE ADVANCES ARE WRITE OFF O F BY THE ASSESSEE AS NO SUCH EVIDENCE IS PLACED ON RECORD. THE ASSESSEE HAS NOT FILED ANY RESOLUTION OF BOARD OF DIRECTOR OF ASSESSEE-COMPANY OR ANY OTHER EVIDENCE EVIDENCING THE DECISION TO WRITE OFF BY TH E NEW MANAGEMENT. THE SUBSIDIARY COMPANY HAS A SEPARATE AND DIFFERENT BUSINESS WHICH IS NOT DIRECTLY SPRUNG OUT FROM THE BUSINESS OF ASSESS EE. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF BOTH THE PARTIES AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE HAVE AL SO DELIBERATED ON VARIOUS CASE LAW RELIED BY LOWER AUTHORITIES AND BY LD. AR OF THE ASSESSEE. DURING THE ASSESSMENT, THE ASSESSING OFFI CER ON PERUSAL OF PROFIT & LOSS A/C NOTED THAT ASSESSEE HAS WRITTEN O FF OF LOANS ADVANCES TO ITS SUBSIDIARY OF RS. 305.32 LAKHS. THE ASSESSEE WAS ISSUE SHOW-CAUSE NOTICE AND TO EXPLAIN THE GIST OF ITS CLAIM ON WRIT E OFF. THE ASSESSEE FILED ITS REPLY DATED 28.01.2016. THE ASSESSING OFFICER H AS RECORDED THAT CONTENT OF REPLY IN PARAGRAPH-4.2 OF HIS ORDER. IN THE REPLY, THE ASSESSEE IN SUM AND SUBSTANCE STATED THAT CONSIDERING GROWTH IN THE INDUSTRY, THE ASSESSEE EXPECTED WITH IS SUBSIDIARY WILL REAP THE BENEFIT OF START OF NEAR FUTURE. HOWEVER, DURING THE FINANCIAL YEAR 2012-13 & 2013-14, THE ASSESSEES PERFORMANCE WAS NOT ENCOURAGING AND THE ASSESSEE INCURRED ITA NO. 5190 MUM 2018-KOKUYO CAMLIN LIMITED. 7 LOSSES AND IT BECAME DIFFICULT TO CONTINUE FUNDING THE CAL AND IT WAS ALSO RELIED THAT LOSSES IN CAL WERE DETERIORATING T HE ASSESSEES FINANCIAL POSITION. LOOKING ON THE FINANCIAL POSITION OF CAL AND ASSESSEE, THE ASSESSEE DID NOT FORESEE ANY TURN OUT OF BUSINESS N EAR FUTURE. THEREFORE, THE BOARD OF DIRECTORS DECIDED TO DISENGAGE FROM TH E ACTIVITY OF ADVANCING AND WRITE OFF OF THE ADVANCES OF RS. 305. 32 LAKHS. IT WAS FURTHER STATED THAT THE ASSESSEE GIVEN ADVANCE TO C AL FOR ITS BUSINESS AND THEREFORE, THE WRITE OFF OF SUCH ADVANCE IS INC IDENTAL TO THE BUSINESS AND SHOULD BE ALLOWED AS BUSINESS LOSS OF COMMERCIA L EXPEDIENCY EITHER UNDER SECTION 28 & 29. THE REPLY OF ASSESSEE WAS NO T ACCEPTED BY ASSESSING OFFICER. THE ASSESSING OFFICER CONCLUDED THAT THE ASSESSEE HAS STATED IN ITS REPLY THAT THE ADVANCES GIVEN TO SUBSIDIARY TO START NEW BUSINESS. THE BUSINESS OF SUBSIDIARY IS DIFFERENT F ROM THE BUSINESS OF ASSESSEE. IT WAS FURTHER CONCLUDED THAT ADVANCES WE RE GIVEN TO SUBSIDIARY TO FIND ITS WORKING CAPITAL REQUIRED WHE N EXTERNAL FINANCIAL AID WAS DIFFICULT FOR SUBSIDIARY. THE ASSESSING OFF ICER FURTHER CONCLUDED THAT AS PER THE VERSION OF ASSESSEE THAT BOARD OF D IRECTOR DECIDED TO DISENGAGE FROM THE ACTIVITIES OF SUBSIDIARY AND DEC IDED TO WRITE OFF OF AS THE ASSESSEE COMPANY IS WANTED TO IMPROVE THE EPS A ND SHAREHOLDER VALUE AND TO DISENGAGE ITSELF FROM LOSS MAKING SUBS IDIARY. THUS, THE ACTION OF CLAIMING ALLOWABLE DEDUCTION AS BUSINESS EXPENDITURE EITHER UNDER SECTION 28, 29 & 37(1) IS NOT JUSTIFIED. THE BUSINESS OF SUBSIDIARY ITA NO. 5190 MUM 2018-KOKUYO CAMLIN LIMITED. 8 STILL GOING. THE ASSESSEE COMPANY JUST TO REDUCE TH E TAX LIABILITY HAD CLAIMED THE WRITE OFF OF ADVANCES TO SUBSIDIARY AS REVENUE EXPENDITURE. THE ASSESSING OFFICER ALSO CONCLUDED THAT WRITE OFF OF THE LOAN TO SUBSIDIARY, RUNNING IN LOSS THE ASSESSEE COMPANY HA S TRANSFERRED THE LOAN OF SUBSIDIARY COMPANY TO ITSELF, WHEREAS THE SUBSID IARY SEPARATELY ASSESSED THE TAX AND DISALLOWED THE DEDUCTION OF RS . 305. 21 LAKHS. 9. BEFORE THE LD CIT(A), THE ASSESSEE MAD SIMILAR SUBM ISSION AS MADE BEFORE US AND BEFORE THE ASSESSING OFFICER. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION OF ASSESSEE CONCLUDED TH AT WRITE OFF OF ADVANCES TO SUBSIDIARY COMPANY WHICH HAS DIFFERENT BUSINESS ALTOGETHER HAS NOT DIRECTLY SPRUNG OUT FROM THE BUSINESS OF AS SESSEE-COMPANY AND AS SUCH CANNOT BE ALLOWED UNDER SECTION 28, 29 & 37 (1). THE LD. CIT(A) ALSO CONCLUDED THAT THE DECISION OF HONBLE BOMBAY HIGH COURT IN SALEM MAGNESITE PVT. LTD (SUPRA) IS APPLICABLE ON T HE FACTS OF THE CASE. IT WAS FURTHER CONCLUDED THAT IN BOTH THE CASES ADV ANCES WERE GIVEN TO WHOLLY SUBSIDIARY COMPANY. THE BUSINESS OF ASSESSEE WAS MINING AND ADVANCE WAS GIVEN TO SUBSIDIARY FOR CONSTRUCTING A JETTY, THE HONBLE HIGH COURT HELD THAT THE CONSTRUCTION OF JETTY IS N OT BUSINESS OF ASSESSEE/LENDER COMPANY. THUS, ON THE SAID PRINCIPL E, THE NATURE OF BUSINESS OF THE ASSESSEE AND SUBSIDIARY IS DIFFEREN T. IN BOTH THE CASES ADVANCES AND LOANS WERE GIVEN TO CREATE A CAPITAL B ASE SUBSIDIARY ITA NO. 5190 MUM 2018-KOKUYO CAMLIN LIMITED. 9 COMPANY. THE LOSS IN SALEM MAGNESITE PVT. LTD. (SUP RA) WAS TREATED AS CAPITAL LOSS AND IN CASE OF APPELLANT/ASSESSEE; THE LOSS IS ALSO CAPITAL LOSS. 10. BEFORE US, THE LD. AR OF THE ASSESSEE VEHEMENTLY AR GUED THAT THE NEW MANAGEMENT HAS DECIDED TO WRITE OFF OF THE ADVANCES AND DISENGAGE ITSELF FROM THE ACTIVITIES OF THE ASSESSEE. HOWEVER , NO DOCUMENTARY EVIDENCE IN THE FORM OF ANY COMMUNICATION OR RESOLU TION OF BOARD OF DIRECTOR IS PLACED ON RECORD. THE LD. AR OF THE ASS ESSEE THOUGH FILED A NUMBER OF DECISIONS IN SUPPORT OF HIS SUBMISSION; H OWEVER, THE LD. AR OF THE ASSESSEE MAINLY RELIED UPON THE DECISION OF MUMBAI TRIBUNAL IN JACKIE SHROFF (SUPRA) AND DELHI TRIBUNAL IN ACIT VS . OSN INFRASTRUCTURE & PROJECTS PVT. LTD. (SUPRA). 11. IN OUR VIEW, BOTH THE DECISION ARE DISTINGUISHABLE ON THE FACTS OF THE PRESENT CASE IN JACKIE SHROFF (SUPRA) CASE THE MONE Y WAS ADVANCED FOR BUSINESS EXPEDIENCY, HOWEVER IN THE CASE IN HAND TH E ASSESSEE FUNDED THE CAPITAL WORKING REQUIREMENT OF CAL. FURTHER, I N ACIT VS. OSN INFRASTRUCTURE & PROJECTS PVT. LTD. (SUPRA), THE SA ID ASSESSEE WAS ENGAGED IN THE BUSINESS OF DEVELOPMENT OF INFRASTRU CTURE, CONSTRUCTION AND REAL ESTATE TRADING, ADVANCE/ MONEY TO VARIOUS PARTIES TO BUY LAND, THE SAID PARTIES FAILED TO BUY LAND AND PAY MONEY, HOWEVER IN THE CASE IN HAND THE ASSESSEE FUNDED THE CAPITAL WORKING RE QUIREMENT. THUS, THE ADVANCE WAS MADE FOR BUSINESS EXPEDIENCY. THUS, BOT H THE CASE IS BASED ON PECULIAR FACTS OF THOSE CASES AND IS NOT APPLICA BLE ON THE PRESENT CASE. ITA NO. 5190 MUM 2018-KOKUYO CAMLIN LIMITED. 10 THEREFORE, IN VIEW OF THE AFORESAID DISCUSSION, WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER PASSED BY LOWE R AUTHORITIES, WHICH WE AFFIRMED. 12. IN THE RESULT, GROUND NO.1 & 2 OF THE APPEAL IS DIS MISSED. 13. GROUND NO. 3 & 4 RELATES TO ADDITION OF INTEREST IN COME OF RS. 2,56,442/-. THE LD. AR OF THE ASSESSEE SUBMITS THAT THE ASSESSEE OFFERED THE SAID INTEREST INCOME IN SUBSEQUENT A.Y. I.E. A. Y. 2015-16. THE LD. AR OF THE ASSESSEE SUBMITS THAT INTEREST REFLECTED IN FORM 26-AS OF A.Y. 2014-15 WAS RECEIVED BY ASSESSEE IN SUBSEQUENT YEARS RELEVANT TO A.Y. 2015-16. THEREFORE, THE SAID INCOME WAS CONSID ERED IN THE NEXT A.Y. THE ASSESSEE HAS NOT EVADED THE TAX. SINCE THE TDS CERTIFICATE WAS RECEIVED SUBSEQUENTLY, THEREFORE, THE INCOME WAS OF FERED IN SUBSEQUENT A.Y. IN THE PAST, THE ASSESSEE RECOGNIZED THE INTER EST INCOME AS PER TDS CERTIFICATE AND NOT AS PER FORM 26-AS. 14. IN ALTERNATIVE SUBMISSION, THE LD. AR OF THE ASSESS EE SUBMITS THAT THERE IS NO LOSS TO THE REVENUE WHETHER THE INCOME IS CONSID ERED BY THE ASSESSEE IN THE YEAR OF REFLECTION IN FORM 26-AS OR RECEIPT OF TDS AS THE TAX RATE REMAINED UNIFORM OVER THE SAID PERIOD IN THE BOOKS OF ACCOUNT. THUS, THE ENTIRE EXERCISE OF REVENUE IS NATURAL. THE LD. AR OF THE ASSESSEE FURTHER SUBMITS THAT TIME LIMIT FOR INITIAL RE-ASSE SSMENT PROCEEDING FOR A.Y. 2015-16 HAS LAPSED. THEREFORE, THE LD. AR PRAY ED TO GIVE DIRECTION ITA NO. 5190 MUM 2018-KOKUYO CAMLIN LIMITED. 11 TO THE ASSESSING OFFICER AND MADE THE ADDITION IN T HE INCOME FOR THE YEAR UNDER CONSIDERATION ITSELF. 15. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPO RTED THE ORDER OF AUTHORITIES BELOW. 16. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE PARTI ES AND PERUSED THE RECORD. DURING THE ASSESSMENT, THE ASSESSEE WAS ASK ED TO RECONCILE THE ENTRIES IN FORM 26-AS. THE ASSESSEE FILED ITS REPLY DATED 22.07.2016 WHEREIN THE ASSESSEE STATED THAT ACCEPT THE AMOUNT OF RS. 2,56,442/- AS THE TDS WAS RECEIVED IN SUBSEQUENT F.Y. I.E. F.Y. 2 014-15, THE ASSESSEE OFFERED THE SAME ON THE BASIS OF ACCRUAL BASIS DUE TO NON-AVAILABILITY OF EXACT FIGURE. THE ASSESSING OFFICER ON THE BASIS OF DETAILS OF FORM 26- AS MADE THE ADDITION OF RS. 2,56,442/-. THE LD. CIT (A) UPHELD THE ACTION OF ASSESSING OFFICER HOLDING THAT THE NON-RE CEIPT OF TDS DOES NOT HOLDING ANY GROUND AND CONFIRMED THE ACTION OF ASSE SSING OFFICER. 17. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE , WE DIRECT THE ASSESSING OFFICER TO VERIFY THE FACT, IF THE INTERE ST OF RS. 2,56,442/- IS OFFERED IN THE SUBSEQUENT YEAR THEN THE SAME BE DEL ETED FROM THE YEAR UNDER CONSIDERATION. HOWEVER, IF ANY DIFFERENCE IS FOUND IN OFFERING THE INTEREST INCOME, THE SAME BE TAXED IN THE YEAR UNDE R CONSIDERATION AND CORRESPONDING SET OF REMAINING AMOUNT OFFERED IN SU BSEQUENT YEAR BE GIVEN TO THE ASSESSEE. HENCE, GROUND NO. 3 & 4 ARE ALLOWED FOR STATISTICAL PURPOSE. ITA NO. 5190 MUM 2018-KOKUYO CAMLIN LIMITED. 12 18. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COU RT ON 04/10/2019. SD/- SD/- R.C. SHARMA PAWAN SINGH ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATE: 04.10.2019 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR H BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI