MAHINDRA & MAHINDRA LTD, MUMBAI V. DCIT CIR 2(2), MUMBAI

ITA 6074/MUM/2013

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9735 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: K
• Next Hearing Date: 01-10-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 17-10-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M V RAJGURUDR
• Assessee Lawyers: H P MAHAJANI
• Keywords: Capital asset; Transfer pricing; International transaction; Notional interest; Capital receipt; Revenue expenditure; Capital expenditure
• Section: 154; 92

Judgement Text

, INCOME-TAX APPELLATE TRIBUNAL -KBENCH MUMBAI , , BEFORE S/SH.RAJENDRA,ACCOUNTANT MEMBER AND AMARJIT SINGH,JUDICIAL MEMBER ./ I.T.A./6074/MUM/2013, / ASSESSMENT YEAR: 2004-05 M/S. MAHINDRA & MAHINDRA LTD. GROUND FLOOR, MAHINDRA TOWERS, WORLI ROAD NO.13, WORLI MUMBAI-400 018. PAN:AAACM 3025 E VS. DCIT- CIRCLE-2(2) ROOM NO.545, 5TH FLOOR, AAYAKAR BHAVAN M.K. ROAD, MUMBAI-400 001. ( /APPELLANT ) ( / RESPONDENT) ./I.T.A./6360/MUM/2013, / ASSESSMENT YEAR: 2004-05 DCIT- CIRCLE-2(2) MUMBAI-400 001. VS. M/S. MAHINDRA & MAHINDRA LTD. MUMBAI-400 018. ( /APPELLANT ) ( / RESPONDENT) / REVENUE BY: SHRI M.V. RAJGURU-DR /ASSESSEE BY: SHRI H.P. MAHAJANI / DATE OF HEARING: 19/01/2018 / DATE OF PRONOUNCEMENT: 21/03/2018 , - PER RAJENDRA, AM - CHALLENGING THE ORDER,DTD.30/08/2013 OF THE CIT(A)- 15,MUMBAI,THEASSESSING OFFICER(AO) AND ASSESSEE HAVE FILED CROSS APPEALS.ASSESSEE,A P UBLIC LIMITED COMPANY,ENGAGED IN MANUF -ACTURING OF AUTOMOBILE VEHICLE,DEALING IN DEVELOPM ENT/CONSTRUCTION ACTIVITIES,TRANSPORT SOLUTI -ONS ETC.,FILED ITS RETURN OF INCOME ON 27/10/2004, DECLARING TOTAL INCOME OF RS.123,94,95, 060/-.THE AO COMPLETED THE ASSESSMENT U/S.143(3) OF THE ACT AND DETERMINED THE INCOME OF THE ASSESSEE AT RS.24,64,270,265/- VIDE ORDER DATED 18/12/2006. ITA/6074/MUM/2013: 2. DURING THE COURSE OF HEARING BEFORE US,THE REPRESEN TATIVES OF BOTH THE SIDES AGREED THAT EXCEPT FOR THE GROUNDS NO.1.,3.,3B. AND 6.ALL THE R EMAINING GROUNDS ARE COVERED-I.E. THEY STAND DECIDED IN FAVOUR OF THE ASSESSEE OR AGAINST IT OR HAVE BEEN SET ASIDE-BY THE ORDERS FOR THE TRIBUNAL FOR THE AY.S.1999-2000(ITA.S/2344&3037 /MUM/2009),2000-01(ITA.S.3998 & 4542/MUM/2010),2001-02(ITA.S7581&7846/MUM/2011),200 6-07(ITA/8597/MUM/2010)AND 2008-09(ITA/586/ MUM/ 2015). GOA ISSUE ISSUE COVERED IN FAVOUR /AGAINST ASSESSEE 2. EXPENDITURE ON PAYMENT TO CLUB-RS. 1.30 CRORES F AVOUR 3.A. EXPENSES TOWARDS PROFESSIONAL SERVICES IN CON NECTION WITH PROPOSED INVESTMENTS-RS. 2.44 CRORES AGAINST 4. DEVELOPMENT EXPENSES-HORIZON III AND HORIZON IV PROJECT EXPENSES TRACTOR DIVISION-RS. 9.20 CRORES AGAINST 6074/M/13(04-05);6360/M/13(04-05)- MAHINDRA & MAHINDRA LTD. 2 4.A. IN-HOUSE REVENUE EXPENDITURE- STAFF COST, MATE RIAL OF RS. 8.88 CRORESS INCURRED AS PART OF DEVELOPMENT PROJEC TS FAVOUR 5. TECHNICAL SERVICES FEES-RS. 64.97 LAKHS AGAINST 7. DISALLOWANCE U/S. 40A (9)-RS. 8.42 LAKHS FAVOUR 8. PROVISIONS FOR WARRANTIES-RS. 21.43 CRORES SET A SIDE 9. INTEREST ON INCOME TAX REFUND-RS. 46.91 LAKHS AG AINST 10 EMPLOYEES COMPENSATION EXPENSES ON ACCOUNT OF ES OP- RS.5.09 LAKHS SET ASIDE 2.1. RESPECTFULLY FOLLOWING THE ORDERS OF THE ABOVE REFE RRED FIVE AY.S.,WE DECIDE GROUNDS NO. 3A.,4.,5.AND 9 AGAINST THE ASSESSEE.GROUNDS NO. 8 A ND 10 ARE SET ASIDE AND REMAINING GROUNDS ARE DECIDED IN FAVOUR OF THE ASSESSEE. 2.2. GS.OA. 1.,3.,3B. AND 6. WILL BE DEALT IN THE SUBSEQ UENT PARAGRAPHS. 3. IN THE APPEAL,FILED BY THE AO(ITA/6360/MUM/2013),IT WAS AGREED BY THE DEPARTMENTAL REPRESENTATIVE(DR)AND THE AUTHORISED RESPRESENTATIV E(AR)THAT THE SOLITARY GROUND OF APPEAL ,DEALING WITH PROVISION FOR PENDING LABELLED AMOUNT , AMOUNTING RS. 3.42 CRORES,STAND DECIDED AGAINST THE AO,BY THE ORDERS OF THE TRIBUNAL FOR TH E AY.S 2000 -01 AND 2001-02. RESPECTFULLY,FOLLOWING ORDERS OF THE ITAT FOR THE E ARLIER YEARS,WE DISMISS THE EFFECTIVE GROUND OF APPEAL RAISED BY THE AO FOR THE YEAR UNDE R CONSIDERATION. 4 .FIRST GROUND OF APPEAL IS ABOUT TRANSFER PRICING(T P)ADJUSTMENT,AMOUNTING TO RS.31.20 LAKHS.DURING THE ASSESSMENT PROCEEDINGS,THE AO FOUN D THAT THE ASSESSEE HAD ENTERED INTO INTERNATIONAL TRANSACTIONS (IT.S)WITH ITS ASSOCIATE ENTERPRIS(AE).HE MADE A REFERENCE TO THE TPO TO DETERMINE THE ARMS LENGTH PRICE(ALP)OF SUCH TRANSACTIONS. 4.1. THE TPO FOUND THAT THE ASSESSEE HAD ENTERED INTO FO LLOWING IT.S DURING THE YEAR UNDER CONSIDERATION: SN. NATURE OF TRANSACTION AMOUNT IN (RS.) METHOD APPLIE D 1. SALE OF TRACTORS 138.01 CRORESS COST PLUS 2. SALE OF SPARE PARTS & MANUALS 3.58 CRORESS COST PLUS 3. REIMBURSEMENT OF WARRANTY CHARGES 2.20 CRORESS A CTUALS 4. REIMBURSEMENT OF LEGAL CHARGES 28.94 LAKHS ACTUA LS 5. PURCHASE OF TRACTOR (ON COST TO COST) 9.74 LAKHS ACTUALS HE FURTHER FOUND THAT THE ASSESSEE HAD GRANTED PAYM ENT TERMS TO ITS AE IN USA NAMELY MAHINDRA USA(MUSA)AT 175 DAYS,THAT IT HAD MADE TOTA L SALES OF RS.141.59 CRORESS.HE DIRECTED THE ASSESSEE TO EXPLAIN AS TO WHY SHOULD AN ADJUSTMENT NOT BE MADE FOR NOTIONAL INTEREST INCOME RELATING TO DELAYS BEYOND AGREED CR EDIT PERIOD.AFTER CONSIDERING THE SUBMISSION OF ASSESSEE,THE TPO HELD THAT IN ARMS L ENGTH SITUATION EXTENDED CREDIT PERIOD WOULD ENTAIL INTEREST COST, THAT THE ASSESSEE FAIL ED TO CHARGE SUCH COSTS, THAT SALES TO AE WERE 6074/M/13(04-05);6360/M/13(04-05)- MAHINDRA & MAHINDRA LTD. 3 MORE THAN NON-AE EXPORT.HE HELD THAT ASSESSEES COS T OF CAPITAL WAS 6.75% . TAKING IT AS THE BASE,THE TPO SUGGESTED AN UPWARD ADJUSTMENT OF RS.3 1.20 LAKHS ON DELAYED RECEIPTS OF EXPORTS.THE AO ACCORDINGLY MADE THE ADDITION TO THE TOTAL INCOME OF THE ASSESSEE. 4.1. DURING THE APPELLATE PROCEEDINGS,BEFORE THE FIRST A PPELLATE AUTHORITY (FAA),THE ASSESSEE MADE SUBMISSIONS IN THAT REGARD.HE,AFTER CONSIDERIN G THE ORDER OF THE AO/TPO AND THE SUBMISSION THE ASSESSEE,HELD THAT THERE COULD NOT B E DIFFERENTIAL TERMS TO THE AE.S AND NON- AE.S THAT, THE CREDIT PERIOD ALLOWED TO AE WAS 175 DAYS, THAT TO NON-AE.S THE PERIOD WAS 60 DAYS ONLY,THAT TPO WAS JUSTIFIED IN MAKING ADJUSTME NTS. 4.2. BEFORE US,THE AUTHORISED REPRESENTATIVE(AR)STATED THAT THE ASSESSEE WAS NOT CHARGING INTEREST FROM THE NON-RESIDENT BUYERS INCLUDING THE AE,THAT THE ASSESSEE HAD RECEIVED ALL RECEIVABLES FROM AE,THAT THERE WAS DELAY OF 1 TO 77 DAYS, THE METHOD FOLLOWED BY THE ASSESSEE WAS AS PER THE PROVISIONS OF SECTION 92 OF THE ACT.ALTERNATIVELY, IT WAS ARGUED THAT THE AO SHOULD HAVE CONSIDERED EXPORT PACKING CREDIT RATE OF 1.92% AS COST OF CAPITAL AS AGAINST THE RATE OF 6.75%,THAT FOLLOWING THE EXPORT PACKING RATE THE DISALLOWANCE SHOULD BE RESTRICTED TO RS.8.82 LAKHS,AS PER THE WORKING SUBM ITTED TO THE TPO. THE DEPARTMENTAL REPRESENTATIVE (DR) SUPPORTED THE ORDER OF THE FAA AND STATED THAT 90% OF THE EXPORT WAS TO THE AE,THAT THE AO HAD FOUND THAT THE ASSESSEE HAD NOT CHARGED INTEREST FOR THE DELAYED PAYMENTS. 4.3. WE HAVE HEARD THE RIVAL SUBMISSIONS.WE FIND THAT TH E ASSESSEE WAS NOT CHARGING INTEREST FROM AE AS WELL AS NON-AE.S FOR DELAYED PAYMENTS,TH AT IN CERTAIN CASES THE DELAY WAS BEYOND THE CREDIT LIMIT PERIOD,THAT THE DELAY IN THE CASE OF NON-AE.S AS OBSERVED BY DEPARTMENTAL AUTHORITIES WAS LESS THAN THE DELAY IN REALIZATION FROM AE.CONSIDERING THESE FACTS WE ARE OF THE OPINION THAT ADJUSTMENT ON DELAYED PAYMENT OF I NTEREST SHOULD BE MADE.HOWEVER, WE ARE NOT CONVINCED THAT COST OF CAPITAL RATE (@6.75%) SH OULD BE APPLIED FOR THE DELAYED PAYMENTS. WE FIND FORCE IN THE ALTERNATE SUBMISSIONS OF THE A SSESSEE I.E. ADOPTING THE EXPORT PACKING CREDIT RATE (1.92%) FOR DELAYED PAYMENTS.AO IS DIRE CTED TO RESTRICT THE ADDITION ACCORDINGLY. FIRST GROUND OF APPEAL IS ALLOWED IN FAVOUR OF THE ASSESSEE,IN PART. 5. DISALLOWANCE OF RS.97.28 LAKHS UNDER THE HEAD REPAI RS TO BUILDING AND TREATING IT A CAPITAL EXPENDITURE IS THE SUBJECT MATTER OF NEXT UNDECIDED GROUND OF APPEAL.DURING THE ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE HAD INC URRED AN EXPENDITURE OF RS. 97, 28, 202/- FOR REPAIRING THE BUILDING. AFTER GETTING EXPLANATI ON IN THAT REGARD, HE HELD THAT THE 6074/M/13(04-05);6360/M/13(04-05)- MAHINDRA & MAHINDRA LTD. 4 EXPENDITURE WAS INCURRED TO UNDERTAKE MAJOR REPAIRS , THAT IT HAD TO BE TREATED AS CAPITAL IN NATURE. 5.1. IN THE APPELLATE PROCEEDINGS, BEFORE THE FAA, THE A SSESSEE MAY SUBMISSIONS CONTESTING THAT EXPENDITURE WAS OF REVENUE NATURE. AFTER PERUS ING THE DETAILS OF EXPENDITURE, THE F AA HELD THAT RS. 49.08 LAKHS WERE INCURRED TOWARDS CON SULTATION FEES PAID TO OLD WORLD HOSPITAL, THAT THE ASSESSEE FAILED TO EXPLAIN AS TO HOW THE P AYMENT TO THE HOSPITAL WAS FOR THE BUSINESS PURPOSES,THAT OTHER ITEMS OF EXPENDITURE WERE OF CA PITAL NATURE, THAT THE COST OF BUILDING SHOWN IN THE BOOKS OF ACCOUNTS WAS RS. 22.76 LAKHS ONLY, THAT THE ASSESSEE HAD CLAIMED HUGE REPAIRS FOR THE SAID BUILDING. 5.2. BEFORE US,THE AR STATED THAT REPAIRING WORK WAS CAR RIED OUT IN CASE OF A BUSINESS ASSET, THAT THE BUILDING IN QUESTION WAS OFFICE OF THE ASS ESSEE.THE DR SUPPORTED THE ORDER OF THE FAA. 5.3. WE FIND THAT THE FAA HAS GIVEN A FINDING OF FACT TH AT MAJOR EXPENDITURE(RS. 49.08 LAKHS) WAS INCURRED TOWARDS CONSULTATION FEES PAID TO A PA RTICULAR INSTITUTION, THAT THE ASSESSEE HAD NOT EXPLAINED THE BUSINESS CONNECTION OF THE HOSPIT AL WITH ITS BUSINESS.THE ASSESSEE HAD NOT CHALLENGED THE FINDING OF FACTS,GIVEN BY THE FAA,IN FORM OF A RECTIFICATION APPLICATION FILED UNDER SECTION 154 OF THE ACT.THEREFORE, IT HAS TO B E PRESUMED THAT FINDINGS GIVEN BY THE FAA DOES NOT SUFFER FROM ANY FACTUAL OR LEGAL INFIRMITY .CONFIRMING HIS ORDER,WE DECIDE THE ISSUE AGAINST THE ASSESSEE,AS IT HAS NOT BROUGHT ON RECOR D ANY EVIDENCE THAT EXPENDITURE INCURRED UNDER THE HEAD REPAIRING WAS OF REVENUE NATURE. 6. GROUND NO.3(B)IS ABOUT DISALLOWANCE OF RS.64.85LAKH S REPRESENTING WRITE-OFF OF CAPITAL ADVANCES.DURING THE ASSESSMENT PROCEEDINGS,THE AO H ELD THAT ADVANCES WRITTEN OFF ON ACCOUNT OF ACQUISITION OF BUSINESS WAS TO BE DISALL OWED. 6.1. DURING APPELLATE PROCEEDINGS BEFORE FAA THE ASSESSE E MADE SUBMISSIONS TO DELETE THE ADDITIONS.HOWEVER,THE FAA REFERRING TO THE ORDER OF THE TRIBUNAL FOR THE AY-2006-07(SUPRA) HELD THAT THE EXPENDITURE IN QUESTION REPRESENTED W RITE OFF OF CAPITAL ADVANCE.HE UPHELD THE DISALLOWANCE. 6.2 .BEFORE US THE AR STATED THAT THE ASSESSEE HAD WRIT TEN OFF RS.4.52 LAKHS AND RS.60.32 LAKHS FOR IGATPURI DIVISION AND NASHIK DIVISION RESPECTF ULLY, THAT THE EXPENDITURE WAS CLAIMED AS DEDUCTION U/S.37(1) OF THE ACT,THAT THE CLAIM WAS A LLOWABLE U/S.28 OF THE ACT ALSO AS A BUSINESS LOSS,THAT THE LOANS WERE ADVANCED IN THE N ORMAL COURSE OF BUSINESS, THAT THE ASSESSEE HAD MADE ADVANCES FOR PROCUREMENT FROM VARIOUS SUPP LIERS/SUB CONTRACTORS, THAT ON MANY AN OCCASIONS THE FUNDS OF THE ASSESSEE WOULD GET LOCK ED,THAT THE ACCOUNTS WOULD REMAIN 6074/M/13(04-05);6360/M/13(04-05)- MAHINDRA & MAHINDRA LTD. 5 UNADJUSTED FOR VARIOUS REASONS,THAT PERIODICALLY AN EXERCISE WAS MADE TO CLEAR THE DEBIT AND CREDIT ENTRIES WHICH WERE NO LONGER ALIVE, THAT THE ADJUSTMENT WOULD AFFECT BOTH THE SIDES.THE DR REFERRED TO THE ORDER OF THE TRIBUNAL FOR THE AY .2006-07(SUPRA)RELIED UPON BY THE FAA. 6.3. CONSIDERING THE FACT THAT THE FAA HAD MADE THE DISA LLOWANCE IN PURSUANCE OF THE ORDER OF THE TRIBUNAL,WE DISMISS THE GROUND OF APPEAL NO.3(B ). 7 .GROUND NO.6PERTAINS TO WAIVER OF LIABILITY ON PREP AYMENT OF SICOM LOAN.DURING THE ASSESSMENT PROCEEDINGS,THE AO FOUND THAT THE ASSESS EE HAD GOT BENEFIT OF LOAN WAIVER IN RESPECT OF SICOM LOAN LIABILITY TO THE EXTENT OF RS . 25.58 CRORES,THAT IN THE RETURN OF INCOME IT HAD CLAIMED THE DEDUCTION FOR THE SAID WAIVER CO NTENDING THAT THE BENEFIT WAS THE NATURE OF CAPITAL RECEIPTS.HE DIRECTED IT TO FILE EXPLANATION IN THAT REGARD. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE,THE AO HELD THAT THE OB JECT OF GOVERNMENT OF MAHARASHTRA TO GRANT SALES TAX EXEMPTION WAS TO INCREASE SALE AND NOT THE CAPITAL INVESTMENT IN THE STATE, THAT THE SALES TAX EXEMPTION IN RESPECT OF THE UNIT S IN THE BACKWARD AREAS COULD NEVER BE BRANDED AS A CAPITAL RECEIPT,THAT THE INCENTIVE WAS GIVEN TO THE ASSESSEE FOR THE PURPOSE OF COMPENSATING FOR THE HANDICAP OF THE BACKWARD AREAS AND NOT FOR CREATING ANY CAPITAL ASSET, THAT UNDER THE SCHEME THE ASSESSEE WAS NOT REQUIRED TO PAY THE AMOUNT OF SALES TAX,THAT SALES TAX EXEMPTION WAS A REVENUE RECEIPT AND THAT SAME W AS PART OF TAXABLE PROFIT OF THE BUSINESS. ACCORDINGLY,WAIVER OF LIABILITY ON REPAYMENT OF SIC OM LOAN WAS TREATED AS CAPITAL RECEIPT AND WAS TAXED ACCORDINGLY. 7.1. DURING THE APPELLATE PROCEEDINGS BEFORE THE FAA THE ASSESSEE MADE DETAILED SUBMISSIONS AND RELIED UPON THE JUDGMENT OF HONBLE BOMBAY HIGH COURT DELIVERED IN ITS OWN CASE (261 ITR 501).AFTER CONSIDERING THE AVAILABLE MATERIAL, THE FAA HELD THAT THE ASSESSEE HAD GOT BENEFIT OF LOAN WAIVER IN RESPECT OF SICOM LOAN LIA BILITY, THAT THE ASSESSEE HAD BECOME ENTITLED FOR DEFERRAL OF SALES TAX COLLECTED THAT T HEY WERE REPAYABLE IN FIVE (5) EQUAL MONTHLY INSTALMENTS,THAT THE ACCUMULATION OF SALES TAX GOT CONVERTED INTO LOAN LIABILITY DUE TO SICON WHICH GOT EXTINGUISHED BY CREATING A LOAN LIABILITY , THAT THE LIABILITY WAS WAIVED BY GOVERNMENT OF MAHARASHTRA, THAT IN THE CASE UNDER C ONSIDERATION A SORT OF BENEFIT HAD ARISEN TO ASSESSEE FROM THE BUSINESS CARRIED OUT IT, THAT THE JUDGMENT RELIED UPON BY THE ASSESSEE I.E. 261 ITR 501 DEALT WITH THE PROVISIONS OF SECTION 41 (1) OF THE ACT, THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD RECEIVED SALES TAX E XEMPTION,THAT IT WAS NEITHER A SUBSIDY NOR IT WAS RELATED TO CAPITAL INVESTMENT, THAT IT COULD NOT BE TREATED AS A CAPITAL RECEIPT, THAT THE BENEFIT AVAILED BY IT BY WAY OF ST EXEMPTION WAS OF REVENUE NATURE,THAT SAME WAS TAXABLE U/S.28(IV) OF THE ACT.HE RELIED UPON THE CASE OF PU NJAB DISTILLERY INDUSTRIES LTD.(35 ITR 519). 6074/M/13(04-05);6360/M/13(04-05)- MAHINDRA & MAHINDRA LTD. 6 7.2. BEFORE US,THE AR RELIED UPON THE CASES OF GRINDWELL NORTON LTD. (ITA 528/MUM/2012 AND 5800/MUM/2013,AY.S07-08 AND 08-09 & OTHER APPEA LS DTD. 27/7/16); SULZER INDIA LTD. 369 ITR 717).THE DR RELIED UPON THE CASE OF RAMANIY AM HOMES P.LTD (384ITR530); AKAY ORGANICS LTD.(218 TAXMAN154)AND SOLID CONTAINERS LT D.(308 ITR 417). 7.3 .WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL BEFORE US.WE FIND THAT THE AO BROUGHT TO TAX AN AMOUNT OF RS.25,58,42,609/-BEI NG THE SUM THAT WAS WAIVED ON PREPAYMENT OF SICOM LOAN,THAT THE AO AND THE FAA HE LD THAT LOAN WAIVER WAS NOT A CAPITAL RECEIPT,THAT SAME WAS TO BE TAXED AS REVENUE RECEIP T.IT IS TRUE THAT THE HONBLE BOMBAY HIGH COURT HAS IN ASSESSEES OWN CASE DEALT WITH THE ISS UE OF WAIVER OF LOAN REPAYMENT.BUT,WE FIND THAT THE QUESTION RAISED BEFORE THE HONBLE CO URT WAS AS UNDER: WHETHER THE TRIBUNAL WAS RIGHT IN HOLDING THAT WAI VER OF LOAN REPAYMENT WAS NOT RELATED TO STOCK IN TRADE BUT TO CAPITAL ASSET AND,THEREFORE,I T DID NOT FALL WITHIN SECTION 28(IV)OF THE INCOME TAX ACT. WE ARE OF THE OPINION THAT THE HONBLE COURT HAD DE CIDED THE ISSUE RELATED TO CESSATION OF LIABILITY AND THUS THE ORDER OF THE COURT IS OF NO HELP TO ADJUDICATE THE ISSUE BEFORE US.IT IS A KNOWN FACT THAT STATE GOVERNMENTS LAUNCH VARIOUS IN CENTIVE SCHEMES TO GIVE IMPETUS TO INDUSTRIALIZATION OF BACKWARD AREAS.GOVT.OF MAHARAS HTRA HAS TIME TO TIME GIVEN INCENTIVES TO INDUSTRIES IN THAT REGARD.UNTIL AND UNLESS THE ENTI RE SCHEME IS ANALYSED IT CANNOT BE HELD THAT A PARTICULAR INCENTIVE IS OF CAPITAL NATURE OR REVENU E NATURE.IN THE CASE OF RELIANCE INDUSTRIES,THE ISSUE OF NATURE OF SALES TAX SUBSIDY HAD TRAVELLED UP TO THE HONBLE SUPREME COURT AND THE MATTER WAS REMITTED BACK TO THE HONB LE HIGH COURT WITH A DIRECTION THAT THE INCENTIVE SCHEME AS A WHOLE SHOULD BE ANALYSED.WE F IND THAT NEITHER THE DEPARTMENTAL AUTHORITIES NOR THE ASSESSEE HAD ANALYSED THE SCHEM E IN DETAIL.SO,IN OUR OPINION,ISSUE NEEDS FURTHER VERIFICATION AND INVESTIGATION.WE ARE RESTO RING BACK THE ISSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION.HE WOULD AFFORD A REASONABLE OPP ORTUNITY OF HEARING TO THE ASSESSEE AND CARRY OUT A DETAILED EXAMINATION OF THE SCHEME.GROU ND NO.6 IS DECIDED IN FAVOUR OF THE ASSESSEE,IN PART. AS A RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED AND THE APPEAL OF THE AO STANDS DISMISSED. . ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST MARCH , 2018. 21 , 2018 SD/- SD/- /- ( / AMARJIT SINGH ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; /DATED : 21.03.2018. JV.SR.PS. 6074/M/13(04-05);6360/M/13(04-05)- MAHINDRA & MAHINDRA LTD. 7 / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR K BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.