PARLE AGRO P.LTD, MUMBAI V. ACIT CEN CIR 25, MUMBAI

ITA 6209/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2126 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 23-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PERMANAND J
• Keywords: Business income; Business expenditure; Double taxation relief; Bad and doubtful debts; Capital receipt; Revenue expenditure; Capital expenditure
• Section: 143(3); 37(1)

Judgement Text

PARLE AGRO P LTD ITA 6209 /M/20 1 3 ITA 5694/M/201 3 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C , MUMBAI . . , , BEFORE SHRI G S PANNU ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIA L MEMBER ITA NO. : 6 209 /MUM/20 1 3 ( ASSESSMENT YEAR: 2010 - 11 ) PARLE AGRO P LTD, WESTERN EXPRESS HIGHWAY, CHAKALA ANDHERI(EAST), MUMBAI - 400 099 .: PAN: A ABCP 8416 G VS ACIT CENTRAL CIRCLE 25, R. NO. 494, 4 TH FLOOR, AAYAKAR BHAVAN, MUMBAI 400 020 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI FIROZ ANDHYARUJINA RESPONDENT BY : SHRI PERMANAND J ITA NO. : 5694 /MUM/20 1 3 ( ASSESSMENT YEAR: 20 1 0 - 11 ) ACIT CENTRAL CIRCLE 25, R. NO. 4 94, 4 TH FLOOR, AAYAKAR BHAVAN, MUMBAI 400 020 VS PARLE AGRO P LTD, WESTERN EXPRESS HIGHWAY, CHAKALA ANDHERI(EAST), MUMBAI - 400 099 .: PAN: A A BCP 8416 G (APPELLANT) (RESPONDENT) APPELLANT BY : SH RI PERMANAND J RESPONDENT BY : SHRI FIROZ ANDHYARUJINA /DATE OF HEARING : 16 - 10 - 201 5 / DATE OF PRONOUNCEMENT : 30 - 11 - 201 5 ORDER , . . : PER AMIT SHUKLA, J M : THE AF ORESAID CROSS APPEAL S FILED BY THE ASSESSEE AND THE REVENUE ARE AGAINST THE ORDER OF THE CIT(A - 24, MUMBAI DATED 0 1 .07.2013 FOR THE QUANTUM OF ASSESSMENT PASSED U/S 143(3) OF THE ACT FOR THE AY 2010 - 11. PARLE AGRO P LTD ITA 6209 /M/20 1 3 ITA 5694/M/201 3 2 2. WE WILL FIRST TAKE - UP ASSESSEES APPEAL BEING ITA NO. 6209/MUM/2013 VIDE WHICH FOLLOWING GROUNDS HAVE BEEN RAISED : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ERRED IN UPHOLDING THE ACTION OF ASSESSING OFFICER IN DISALLOWING THE BUS INESS ADVANCES OF RS. 5,40,607/ - WRITTEN OFF AND CLAIMED AS DEDUCTION UNDER SECTION 37(1) OF THE INCOME TAX ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ERRED IN UPHOLDING THE ACTION OF ASSESSING OFFICER IN DISALLOWING FOREIGN TRAVEL EXPENDITURE OF RS. 6,04,421/ - . 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ERRED IN ENHANCING THE DISALLOWANCE BY APPLYING PRO VISION OF SECTION 195 AND ADDING ENTIRE EXPENDITURE OF RS. 12,25,938/ - TO TOTAL INCOME. THE ACTION OF ASSESSING OFFICER FOR TREATING THE MARKET RESEARCH EXPENDITURE OF RS. 12,25,938/ - AS CAPITAL EXPENSES IS ALSO BAD IN LAW. 4. ON THE FACTS AND IN THE CIRC UMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ERRED IN UPHOLDING THE ACTION OF ASSESSING OFFICER IN TREATING CAPITAL SUBSIDY OF RS. 1,16,48,027/ - . 3. BRIEF FACTS OF THE CASE ARE THAT, THE ASSESSEE COMPANY IS ENGAGED I N THE BUSINESS OF MANUFACTURING OF NON ALCOHOLIC BEVERAGE BASE (NABB), FRUIT JUICE BASED DRINK, MANUFACTURING OF PACKED DRINKING WATER, MANUFACTURING OF PET PERFORMS, CONFECTIONARIES , ETC. THE RELEVANT FACTS QUA THE ISSUE RAISED IN GROUND NO. 1 ARE THAT, T HE AO NOTED THAT ASSESSEE HAD CLAIMED BUSINESS ADVANCES WRITTEN OFF AS DEDUCTIONS U/S 37. THE ASSESSEE HAD CLAIMED SUM OF RS. 5,40,607/ - AS BAD DEBTS ON THE GROUND THAT SAME W E RE IN THE NATURE OF ADVANCES TO THE PARTIES D URING THE ORDINARY COURSE OF THE BU SINESS AND THE SAID ADVANCES BECAME IRRECOVERABLE. HOWEVER, THE AO DISALLOWED THE CLAIM ON THE GROUND THAT SAME DOES NOT FALL WITHIN THE CATEGORY OF BAD DEBTS. 4. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT AN ADVANCE OF RS. 1,08,268/ - WAS GIVEN TO M /S CANFRUIT EXPORTS FOR PURCHASE OF MANGO PULP AND RS. 4,32,339/ - WAS PAID TO M/S SANTHOM FRUITS PARLE AGRO P LTD ITA 6209 /M/20 1 3 ITA 5694/M/201 3 3 FOR PROCESSING MANGO PULP. SINCE THE ADVANCES COULD NOT BE RECOVERED OR THE ASSESSEE COULD NOT GOT THE PRODUCTS /SERVICES, THEREFORE, THE SAME WERE WRITTEN OFF. THE LD. CIT(A) HELD THAT THE ASSESSEE IS NOT IN THE BUSINESS OF ADVANCING MONEY NOR IN FINANCES THEREFORE, IT CANNOT BE HELD THAT IT HAD ARISEN IN THE COURSE OF BUSINESS, HE DISALLOWED THE CLAIM OF THE ASSESSEE. 5. AFTER CONSIDERING THE RIVAL CONTENTIONS AND ON PERUSAL OF THE IMPUGNED ORDERS, WE FIND THAT ASSESSEE DURING THE COURSE OF ITS BUSINESS HAS GIVEN ADVANCES TO 2 PARTIES FOR SUMS AGGREGATING TO RS. 5,40,607/ - FOR THE PURPOSE OF PURCHASE OF MANGO PULP AND FOR THE PROCESSING OF MANGO PULP . T HESE ARE THE RAW MATERIALS USED FOR FRUIT JUICES LIKE FROOTI MANUFACTURED BY THE ASSESSEE . IT HAS NOT BEEN DISPUTED BY THE DEPARTMENT THAT THE AMOUNT WHICH WAS ADVANCE D WAS NOT FOR THE PURCHASE OF RAW MATERIAL I.E., NOT F OR BUSINESS PURPOSE OR THE ADVANCE GIVEN HAS BEEN RECEIVED BACK BY THE ASSESSEE , RATHER THEIR CASE IS THAT THE ASSESSEE IS NOT IN THE BUSINESS OF GIVING ADVANCE, THEREFORE SUCH A BAD DEBT OF ADVANCE IS NOT ALLOWABLE. IF THE ASSESSEE HAS CLAIMED THAT THESE ADVANCES HAVE BECOME BAD I.E. NEITHER THE RAW MATERIAL HAS BEEN SUPPLIED NOR ADVANCE HAS BEEN GIVEN BACK, THE N THE SAME AMOUNTS TO LOSS INCURRED DURING THE ORDINARY COURSE OF BUSINESS AND SAME HAS TO BE ALLOWED U/S 37(1) AS BUSINESS EXPENDITURE. WE DO NOT FIND ANY MERIT IN THE REASONING OF THE CI T(A) THAT SUCH AN ADVANCE CAN ONLY BE GIVEN WHEN THE ASSESSEE IS IN THE BUSINESS OF FINANCING OR ADVANCING MONEY. THE ADVANCE CAN BE GIVEN TO A SUPPLIER IN THE ORDINARY COURSE OF BUSINESS AND IF SUCH AN ADVANCE HA S BEEN TURNED OUT TO BE BAD OR IRRECOVERABL E, THEN IT HAS TO BE ALLOWED AS LOSS . ACCORDINGLY, THE ADDITION OF RS. 5,40,607/ - IS DELETED AND GROUND 1 RAISED BY THE ASSESSEE IS ALLOWED. 6. IN THE SECOND GROUND, THE ASSESSEE HAS RAISED THE DISALLOWANCE OF FOREIGN TOUR TRAVEL EXPENDITURE OF RS. 6,04,4 21/ - . 7. THE AO REQUIRED THE ASSESSEE TO SUBMIT THE FOREIGN TRAVEL EXPENDITURE OF THE DIRECTORS DEBITED TO THE PROFIT AND LOSS PARLE AGRO P LTD ITA 6209 /M/20 1 3 ITA 5694/M/201 3 4 AGGREGATING TO RS. 6,04,421/ - AND REQUIRED THE JUSTIFICATION FOR SUCH AN EXPENDITURE FOR THE PURPOSE OF THE BUSINESS. IN RESPONSE , THE ASSESSEE FURNISHED THE DETAILS OF FOREIGN TRAVELLING EXPENSES, HOWEVER, THE AO HELD THAT IT CANNOT BE ESTABLISHED ON FACTS THAT THE EXPENDITURE WAS INCURRED FOR THE PURPOSE OF BUSINESS. ACCORDINGLY , HE DISALLOWED THE CLA I M . 8. THE LD. CIT(A) TOO HAS CONFIRMED THE ACTION OF THE AO ON THE GROUND THAT SPECIFIC DETAILS OF THE TOUR UNDERTAKEN AS THE DIRECTORS AND EMPLOYEES COULD NOT BE FURNISHED. 9. BEFORE US, THE LD. COUNSEL SUBMITTED THAT THE ENTIRE DETAILS AND THE EXPLANATION FOR FOREIGN TRAVEL UNDERT AKEN BY THE DIRECTOR SHRI PRAKASH CHAVAN AND EMPLOYEES WERE GIVEN BEFORE THE AUTHORITIES BELOW. IT WAS STATED THAT TRAVEL WAS UNDERTAKEN FOR EXPLORING THE PROSPECTIVE BUSINESS FOR ACQUISITION OF LATEST MACHINERY. HE FURTHER SUBMITTED THAT IN THE AY 2008 - 09 THE TRIBUNAL HAS DISCUSSED THE SIMILAR DISALLOWANCE MADE ON SIMILAR GROUNDS AND HAS DELETED THE SAID ADDITION, THEREFORE, SUCH ADDITION SHOULD BE DELETED IN THIS YEAR ALSO . ON THE OTHER HAND, LD. DR STRONGLY RELIED UPON THE ORDER OF THE CIT(A). 10. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE FIND THAT THE LD. CIT(A) HAS SPECIFICALLY POINTED OUT THAT SPECIFIC DETAILS OF THE TOUR UNDERTAKEN HAS NOT BEEN FURNISHED. EVEN BEFORE US, THE SPECIFIC PURPOSE FOR WHICH THE FOREIGN TOURS WERE UNDERTAKEN BY THE DIRECT ORS ARE NOT AVAILABLE ON RECORDS. NO DOUBT IF THE DIRECTORS OR THE EMPLOYEES HAVE UNDERTAKEN TO FOREIGN TRAVELLING FOR EXPLORING OF PROSPECTIVE BUSINESS, ACQUISITION OF LATEST MACHINERY AND FOR OTHER BUSINESS PURPOSE THEN SAME HAS TO BE ALLOWED. HOWEVER, T HERE HAS TO BE SOME PRIMA FACIE EVIDENCE TO SUBSTANTIATE SUCH AN EXPLANATION. FOR THE AY 2008 - 09, THE TRIBUNAL HAS NOTED DOWN THE SPECIFIC DETAILS OF THE TOUR UNDERTAKEN BY VARIOUS PERSONS AND BASED ON THAT, FINDING WAS GIVEN IN FAVOUR OF THE ASSESSEE. IN THE INTEREST OF JUSTICE AND FOR PROPER EXAMIN ATION OF THIS MATTER, WE PARLE AGRO P LTD ITA 6209 /M/20 1 3 ITA 5694/M/201 3 5 RESTORE THIS ISSUE TO THE FILE OF THE AO WHO SHALL CONSIDER THE NECESSARY EXPLANATION AND EVIDENCES AND DECIDE THE SAME AFRESH. ACCORDINGLY, THE ISSUE OF FOREIGN TRAVELLING EXPENSES IS S ET ASIDE TO THE FILE OF THE AO TO BE DECIDED AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. GROUND NO.2 IS THUS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 11. IN GROUND NO. 3 THE ASSESSEE HAS CHALLENGED THE ENHANCEMENT OF DISALLOWANCE BY CIT(A) OF MARKET RESEARCH EXPENDITURE OF RS. 12,25,938/ - U/S 40(A)(I) FOR MAKING THE PAYMENT TO AN AE WITHOUT DEDUCTING TDS AS REQUIRED U/S 195. THE AO HA D MADE THE ADDITION IN THE ASSESSMENT ORDER ON THE GROUND THAT THE PAYMENTS MADE TO THE ENTITY FOR CARRYING OUT MARKET ACTIVITY AND MARKET RESEARCH HAS NOT BEEN PROPERLY EXPLAINED BY THE ASSESSEE AND NO DETAILS WERE FURNISHED. THE LD. AO HAD DISALLOWED THE EXPENDITURE AS CAPITAL EXPENDITURE. THE ASSESSEES CASE BEFORE THE AO AS WELL AS CIT(A) IS THAT, IT I S A FMCG COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING AND SALE OF VARIOUS KINDS OF BEVERAGES, FRUIT JUICES AND CONFECTIONARIES. IN SUCH TYPE OF INDUSTRY, THERE IS HUGE COMPETITION IN THE MARKET AND REQUIRES LOT OF MARKET AND CONSUMER INPUTS . IN ORDER TO DECIDE THE STRATEGY TO PENETRATE THE MARKET AND TO STAY IN THE MARKET THE ASSESSEE HAS TO GATHER VARIOUS DATA FROM THE MARKET WITH REGARD TO THE COMPETITORS AND ALSO WITH REGARD TO ITS OWN PRODUCTS RESPONSE IN THE MARKET. FOR THIS PURPOSE, IT HA S MADE PAYMENT TO A NON - RESIDENT COMPANY. M/S MINTEL INTERNATIONAL GROUP LTD. THE LD. CIT(A) NOTED THAT, SIMILAR DISALLOWANCE OF EXPENDITURES HAVE BEEN ALLOWED IN THE EARLIER YEARS, HOWEVER, IN THIS YEAR THE PECULIAR FACT IS THAT THE ASSESSEE HAS MADE THE PAYMENT TO NON - RES IDENT WITHOUT DEDUCTION OF TDS WHICH IS IN CONTRAVENTION OF SECTION 195. ACCORDINGLY, HE SHOW CAUSED THE ASSESSEE AS TO WHY THE ENTIRE SUM SHOULD NOT BE DISALLOWED U/S 40(A)(I). IN RESPONSE, THE ASSESSEE HAD SUBMITTED THAT, IT HAS PAID SUBSCRIPTION TO M/S MINTEL INTERNATIONAL GROUP LTD. WHICH PROVIDES GLOBAL MARKET DATA BASE ABOUT THE VARIOUS PARLE AGRO P LTD ITA 6209 /M/20 1 3 ITA 5694/M/201 3 6 PRODUCTS AND MARKET RELATED INFORMATION IN THE FORM OF REP O R T S. THE SAID AMOUNTS REPRESENTS THE BUSINESS INCOME OF THE SAID ENTITY AND SINCE , IT DID NOT HAD ANY PLACE OF BUSINESS IN INDIA OR PE IN INDIA, THEREFORE, SAME WAS NOT TAXABLE AS PER ARTICLE 7 R.W. ARTICLE 5 OF INDO - AUSTRALIA - DTAA. HOWEVER, THE LD. CIT(A) CONFIRMED THE SAID ADDITION ON THE GROUND THAT M/S MINTEL INTERNATIONAL GROUP LTD. HAD A HUGE BUSINESS IN I NDIA WITH OFFICES LOCATED AT VARIOUS PLACES. THEREFORE, IT IS NOT CORRECT TO HOLD THAT IT DOES NOT HAVE A PLACE OF BUSINESS IN INDIA FOR CARRYING OUT RESEARCH IN LOCAL MARKET . T HE SAID ENTITY HAS TO EMPLOY RESEARCH ANALYSTS IN INDIA AND, THEREFORE, SUCH A PAYMENT IS IN THE NATURE OF BUSINESS INCOME ON ACCOUNT OF OPERATIONS CARRI ED OUT IN INDIA AND HENCE , SAME I S TAXABLE IN INDIA WITH IN THE AMBIT OF SECTION 9(1) (I) . FAILURE TO DEDUCT TDS U/S 195 ENTAILS DISALLOWANCE U/S 40(A)(I) , A CCORDINGLY, HE DISALLOWED T HE ENTIRE SUM OF RS. 12,25,838/ - U/S 40(A)(I) AS AGAINST DISALLOWANCE OF RS. 9,19,378/ - MADE BY THE AO ON THE GROUND THAT IT IS A CAPITAL EXPENDITURE. 12. BEFORE US, THE LD. COUNSEL SUBMITTED THAT , M/S MINTEL INTERNATIONAL GROUP LTD. HAS GIVEN A LETTER THAT THEY DO NOT HAVE ANY PE OR BUSINESS CONNECTION IN INDIA, THEREFORE, IN VIEW OF THIS FACT, THE ASSESSEE WAS NOT LIABLE TO DEDUCT TDS U/S 195. IN SUPPORT OF HIS CONTENTION, HE RELIED UPON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS UHDE INDIA P. LTD., REPORTED IN [2013] 358 ITR 395 AND OTHER DECISIONS OF THE TRIBUNAL . 13. ON THE OTHER HAND, LD. DR STRONGLY RELIED UPON THE ORDER OF THE CIT(A). 14. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND ON PERUSAL OF THE IMPUGNED ORDERS, WE FIND THAT IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS PAID A SUM OF RS. 12,25,838/ - TO M/S MINTEL INTERNATIONAL GROUP LTD. WHICH IS A NON - RESIDENT COMPANY F OR THE PURPOSE OF CARRYING OUT MARKET RESEARCH ACTIVITY AND TO PROVIDE VARIOUS MARKET RELATED PRO DUCT RESPONS E AND VARIOUS MARKET RELATED PARLE AGRO P LTD ITA 6209 /M/20 1 3 ITA 5694/M/201 3 7 INFORMATIONS. THE AO HAS DISALLOWED THESE EXPENDITURES BEING C APITAL IN NATURE , WHEREAS THE LD. CIT(A) THOUGH HAS TREATED IT TO BE OF REVENUE EXPENDITURE . HOWEVE R, HAS DISALLOWED THE SAME ON THE GROUND THAT ASSESSE E HAS NOT DEDUCTED TDS U/S 195 AND, THEREFORE, BY INVOKING THE PROVISIONS OF SECTION 40(A)(I), HE HAS CONFIRMED THE DISALLOWANCE OF THE WHOLE OF THE AMOUNT. THE LD. CIT(A) HAS FURTHER NOT DISPUTED THAT THE AMOUNT PAID TO M/S MINTEL INTERNATIONAL GROUP LTD. IS A BUSINESS INCOME OF THE SAID ENTITY . HOWEVER, HE HELD THAT TDS WAS REQUIRED TO BE DEDUCTED ON SUCH A PAYMENT, BECAUSE THE SAID ENTITY H AS A BUSINESS CONNECTIN IN INDIA BY VIRTUE OF HAVING OFFICES LOCATED AT VARIOUS PLACES AS NOTED BY HIM AND ALSO HAD A HELP - DESK ETC. SUCH AN OBSERVATION OF LD. CIT (A) FOR MAKING THE DISALLOWANCE CANNOT BE UPHELD, BECAUSE IF THE PAYMENT MADE TO M/S MINTEL INTERNATIONAL GROUP LTD. I S A BUSINESS INCOME , THEN IT HAS TO BE ESTABLISHED AS A MATTER OF FACT THAT THE SAID ENTITY DOES HAS A BUSINESS CONNECTION IN INDIA OR HAS A PE IN TERMS OF ARTICLE 5 OF DTAA. NOWHERE IT HAS BEEN BROUGHT ON RECORD THAT M/S MINTEL INTERNATIONAL GROUP LTD. HAD ANY KIND OF PE IN INDIA OR ANY KIND OF BUSINESS CONNECTION IN INDIA . RATHER THERE IS A LE TTER O N RECORD , WHEREIN , M/S MINTEL INTERNATIONAL GROUP LTD. HAS CATEGORICALLY STATED AND CERTIFIED THAT IT HAS NO PE OR BUSINESS CONNECTION IN INDIA . O NCE THAT IS SO, THEN ASSESSEE WAS NOT REQUIRED TO DEDUCT TDS ON SUCH A PAYMENT AND, THEREFORE, THERE IS NO VIOLATION OF SECTION 195 AND CONSEQUENTLY NO DISALLOWANCE U/S 40(A)(I) CAN BE MADE IN THE HANDS OF THE ASSESSEE. THUS , GROUND NO. 3 RAISED BY THE ASSESSEE IS ALLOWED. 15. LASTLY , THE ASSESSEE HAS CHALLENGED THE TREATMENT OF SUBSIDY OF RS. 1,16,48,027/ - AS REVENUE RECEIPT. 16. RELEVANT FACTS QUA THE ISSUE INVOLVED ARE THAT ASSESSEE HAD SET UP AN INDUSTRIAL UNIT IN THE STATE OF MADHYA PRADESH IN PURSUANCE OF INDUSTRIAL PROMOTION POLICY, NAMES AS MADHYA PRADESH UDYOG NIVESH SAMVARDHAN YOGNA 2004 . A S PER THE PARLE AGRO P LTD ITA 6209 /M/20 1 3 ITA 5694/M/201 3 8 SCHEME, THE SUBSIDY WAS TO BE OFFERED IN THE FORM OF REFUND OF VAT OR CST PAID IF THE INVESTMENT IN SETTING UP OF INDUSTRIAL UNIT IS MADE . THE AOS CASE HAS BEEN THAT, THE SUBSIDY HAS BEEN RECEIVED SUBSEQUENT TO THE ESTABLISHMENT OF PLANT AND MACHINER Y AND IS IN THE NATURE OF VAT PAID, THEREFORE, IT IS A REVENUE RECEIPT. WHEREAS, THE ASSESSEES CASE HAD BEEN THAT THE SUBSIDY WAS GIVEN FOR MAKING THE CAPITAL INVESTMENT FOR SETTING UP OF AN INDUSTRIAL UNIT , THEREFORE, THE SAME HAS TO BE TREATED AS CAPIT AL RECEIPT. THE LD. CIT(A) HAS UPHELD THE ACTION OF THE AO AFTER OBSERVING AND HOLDING AS UNDER : - I HAVE CONSIDERED THE MATTER. IN PURSUANCE OF THE INDUSTRIAL PROMOTION POLICY OF GOVERNMENT OF MADHYA PRADESH, THE APPELLANT WAS GRANTED SUBSIDY STATED TO BE TOWARDS THE COST OF PLANT AND MACHINERY. THE SUBSIDY WAS IN THE FORM OF REFUND OF 50% OF THE AMOUNT OF COMMERCIAL TAX/CENTRAL SALES TAX DEPOSITED BY THEM. THE SUBSIDY WAS FOR FIVE YEARS IN BACKWARD DISTRICTS. AS PER THE SCHEME OF THE SUBSIDY, THE AMOUN T OF ASSISTANCE WOULD NOT EXCEED MORE THAN THE FIXED CAPITAL INVESTMENT. IN BOOKS OF ACCOUNTS THE APPELLANT HAS TREATED THE SAME AS REVENUE IN NATURE, HOWEVER, IN THE RETURN OF INCOME THE SAME HAD BEEN CLAIMED AS CAPITAL RECEIPT ON THE GROUND THAT THE SUBS IDY WAS GRANTED TO MEET THE COST OF PLANT AND MACHINERY. I AM UNABLE TO AGREE TO THE SAID CONTENTIONS AS MADE BY THE APPELLANT. FROM THE SCHEME WHICH IS PLACED ON RECORD IT IS OBSERVED THAT THE SUBSIDY HAS BEEN GRANTED IN ORDER TO PROMOTE INVESTMENT IN THE STATE AND WAS IN THE FORM OF REFUND OF A PART OF COMMERCIAL TAXES PAID. FROM THE SCHEME OF THE SUBSIDY IT FOLLOWS THAT THE SUBSIDY HAS BEEN GRANTED IN ORDER TO AUGMENT PROFITS SO AS TO MAKE THE INDUSTRY LOCATED IN BACKWARD AREAS VIABLE. THE COLLECTION OF TAXES IS A NECESSARY ADJACENT OF BUSINESS, STATUTORILY IMPOSED AND HENCE CAN BE STATED TO BE INCIDENTAL TO BUSINESS CARRIED ON. IT IS THIS STATUTORY LEVY WHICH THE SUBSIDY RECOUPS AND THE PURPOSE OF RECOUPMENT IS TO MAKE UP FOR A POSSIBLE PROFIT DEFICIT FO R OPERATING IN THE BACKWARD AREA. UNDOUBTEDLY, THE SUBSIDY IS INSEPARABLY CONNECTED WITH THE PROFITABLE CONDUCT OF THE BUSINESS AND THEREFORE, IS REVENUE AND LIABLE TO TAX. IT IS ANOTHER MATTER THAT A CEILING HAS BEEN FIXED IN THAT THE AMOUNT OF SUBSIDY WO ULD NOT EXCEED THE FIXED CAPITAL INVESTMENT, BUT THAT IN ITSELF WILL NOT MAKE THE SUBSIDY CAPITAL IN NATURE. THE ACTION OF THE AO IN BRINING TO TAX SUBSIDY RECEIVED OF RS. 1,16,48,027/ - IS CONFIRMED. 17. BEFORE US, THE LD. COUNSEL SUBMITTED A COPY OF THE SCHEME AND SUBMITTED THAT PREAMBLE OF THE SAID SCHEME WAS FOR THE PURSUANCE OF SETTING UP O F AN INDUSTRIAL PLANT FOR EMPLOYMENT GENERATION AND FOR BETTER INFRASTRUCTURE. THE OBJECTS OF THE INDUSTRIAL PROMOTION POLICY OF THE MADHYA PRADESH UDYOG NIVESH PARLE AGRO P LTD ITA 6209 /M/20 1 3 ITA 5694/M/201 3 9 SA MVARDHAN YOGNA WAS TO ACCELERATE THE PACE OF INDUSTRIALIZATION, TO MAXIMIZE THE EMPLOYMENT PROSPECTS AND TO DEVELOP THE INFRASTRUCTURE ETC. IN THE BACKWARD AREAS. THE PREAMBLE AND THE OBJECTS OF INDUSTRIAL PROMOTION POLICY (ENGLISH VERSION) WAS ALSO FILED BEFORE US AND SUBMITTED THAT ONCE THE PURPOSE OF SUBSIDY WAS FOR SETTING UP OF INDUSTRY AND FOR INFRASTRUCTURAL GROWTH , THEN SAME HAS TO BE RECKONED AS CAPITAL SUBSIDY. IN SUPPORT OF HIS CONTENTION, HE STRONGLY RELIED UPON THE DECISION OF CIT VS. PONNI SU GAR S & CHEMICALS LTD, REPORTED IN [ 2 0 0 8] 306 ITR 392 AND ALSO UPON THE DECISION OF DELHI HIGH COURT IN THE CASE OF ITO VS. BOUGAIN BLLIEA MULTIPLEX ENTERTAIN CENTRE PVT LTD, REPORTED IN [2015| 317 ITR 14 (DELHI). THUS , HE SUBMITTED THAT THE PURPOSE FOR WHI CH SUBSIDY HAS BEEN GIVEN HAS TO BE EXAMINED AND HER E IN THIS CASE IT WAS FOR SETTING UP OF AN INDUSTRIAL UNIT , THEREFORE, IT HAS TO BE TREATED AS CAPITAL RECEIPT. 18. ON THE OTHER HAND LD. DR SUBMITTED THAT THE INTENTION OF THE SCHEME IS NOT IMPORTANT BU T WHAT HAS TO BE SEEN IS HOW THE SUBSIDY HAS BEEN GIVEN AND HOW IT HAS BEEN UTILIZED. IF THE SUBSIDY HAS BEEN GIVEN IN THE FORM OF VAT OF CST, THEN IT GOES TO ENHANCE THE PROFIT OF THE ASSESSEE AND, THEREFORE, IT HAS TO BE TREATED AS REVENUE RECEIPT. 19. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE FINDING GIVEN IN THE IMPUGNED ORDERS. THE SUBSIDY GIVEN BY THE MP GOVERNMENT IN PURSUANCE OF MADHYA PRADESH UDYOG NIVESH SAMVARDHAN YOGNA WAS FOR SETTING - UP OF AN INDUSTRIAL UNIT IN THE BACKWARD AREA O F STATE OF MADHYA PRADESH AND SUBSIDY OFFERED WAS IN THE FORM OF REFUND OF VAT / CST PAID. THE SAID SUBSIDY WAS PURELY FOR INVESTMENT IN THE SETTING - UP OF INDUSTRIAL UNIT. THE LD. CIT(A) AND THE AO HAVE TREATED IT AS A REVENUE RECEIPT ON THE GROUND THAT SUBSIDY HAS BEEN GRANTED TO PROMOTE INDUSTRIES IN THE STATE AND IN THE FORM OF A REFUND OF COMMERCIAL TAXES PAID. SINCE T HE SUBSIDY WA S FOR AUGMENT OF PROFIT AND HENCE IT HAS TO BE TREATED AS REVENUE RECEIPT. WHILE ADJUDICATING SUCH KIND OF CASES, PARLE AGRO P LTD ITA 6209 /M/20 1 3 ITA 5694/M/201 3 10 WHAT IS TO BE SEEN IS THE PURPOSE FOR WHICH SUBSIDY IS GIVEN AND NOT THE FORM OR MANNER IN WHICH SUBSIDY IS GIVEN. THE HONBLE SUPREME COURT IN THE CASE OF PON NI SUGAR MILLS ( SUPRA ) HA S LAID DOWN A VERY IMPORTANT PROPOSITION THAT THE TEST OF CHARACTER OF THE RECEI PTS IN THE HANDS OF THE ASSESSEE HAS TO BE DETERMINED WITH RESPECT TO THE PURPOSE FOR WHICH THE SUBSIDY IS GIVEN. HENCE, THE PURPOSE TEST HAS TO BE APPLIED. THE POINT OF TIME AT WHICH SUBSIDY IS PAID IS NOT RELEVANT , NEITHER T HE SOURCE N OR THE FORM OF SU BSIDY IS MATERIAL. IN THAT CASE, THE HONBLE SUPREME COURT HELD THAT IF THE SUBSIDY HAS BEEN GIVEN FOR SETTING UP OF NEW UNITS OR SUBSTANTIAL EXPAN S ION OF THE EXISTING UNIT, THEN SAME IS TO BE TREATED AS CAPITAL ACCOUNT. IF THE OBJECT OF THE SUBSIDY SCHEME IS TO ENABLE THE ASSESSEE TO RUN THE BUSINESS MORE PROFITABLY THEN THE RECEIPTS IS ON REVENUE ACCOUNT. HENCE IN THIS CASE IF WE SEE THE P REFACE OF THE MADHYA PRADESH UDYOG NIVESH SAMVARDHAN YOGNA OF I NDUSTRIAL P ROMOTION P OLICY OF 2004 OF THE MADHYA PR ADESH GOVERNMENT, IT PROVIDES THAT THE SUBSIDY WOULD BE GIVEN FOR SETTING UP OF A NEW INDUSTRIAL UNITS AT VARIOUS PLACES FOR EMPLOYMENT GE NERATION AND TO ACCELERATE THE PACE OF INDUSTRIALIZATION IN MADHYA PRADESH. FROM THE READING OF THE ENTIRE SCHEME, IT IS ABSOLUTELY CLEAR THAT THE SUBSIDY PROVIDED IS NOT FOR ASSISTING THE ASSESSEE FOR AUGMENTING THE PROFIT OR HELP IN RUNNING OF THE BUSINESS, ALBEIT IT IS FOR SETTING UP OF NEW INDUSTRIAL UNIT, FOR PROMOTION OF EMPLOYMENT, GROWTH, INFRASTRUCTURE IN THE BAC KWARD AREAS OF MADHYA PRADESH. THUS, SUCH A SUBSIDY THOUGH GIVEN IN THE FORM OF REFUND OF VAT OR CST IS ON CAPITAL ACCOUNT. ACCORDINGLY, WE HOLD THAT THE SUBSIDY RECEIVED BY THE ASSESSEE CANNOT BE TAXED AS REVENUE, AS IT IS ON CAPITAL ACCOUNT , HENCE CAPITA L RECEIPT. ACCORDINGLY, GROUND NO. 4 IS ALLOWED. 20. NOW, WE WILL TAKE - UP REVENUES APPEAL IN ITA NO. 5964/MUM/2010 VIDE WHICH FOLLOWING GROUNDS HAVE BEEN RAISED : - (I) THAT THE LD. CIT(A) ERRED IN LAW AND FACTS IN DELETING THE DISALLOWANCE OF RS. 18,13, 946/ - MADE BY THE AO AS ON PARLE AGRO P LTD ITA 6209 /M/20 1 3 ITA 5694/M/201 3 11 DETAILS OF THE EXPENDITURE WERE FILED BEFORE THE AO IN SUPPORT OF THE CLAIM THAT THE SAME WERE REVENUE IN NATURE. 2. THE APPELLANT CRAVES TO LEAVE, TO ADD TO AMEND AND / OR TO ALTER ANY OF THE GROUNDS OF APPEAL, IF NEED BE. 3. THE APPELLANT, THEREFORE, PRAYS THAT ON THE GROUNDS STATED ABOVE, THE ORDER OF THE CIT(A) - 39, MUMBAI, MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 21. IT HAS BEEN ADMITTED BY BOTH THE PARTIES THAT THIS ISSUE IS SIMILAR TO THE ISSUE DE CIDED BY THE TRIBUNAL IN ASSESSEES APPEAL FOR AY 2008 - 09 , WHEREIN THE PRODUCT DEVELOPMENT EXPENSES HAVE BEEN HELD TO BE ALLOWABLE. 22. THE AO HAD TREATED THE PRODUCT DEVELOPMENT EXPENSES AS CAPITAL EXPENDITURE WHEREAS THE ASSESSEES CASE HAS BEEN THAT TH ESE EXPENSES ARE REQUIRED FOR REMAIN IN THE MARKET AND IS PURELY FOR THE BUSINESS PURPOSE. THE LD. CIT(A) HAS DELETED THE SAID ADDITION AFTER OBSERVING AND HOLDING AS UNDER : - I HAVE CONSIDERED THE MATTER. FROM THE DETAILS SUBMITTED IT IS OBSERVED THAT T HE APPELLANT HAD PURCHASED VARIOUS PRODUCTS SUCH AS CONCENTRATES, PULPS, JUICES SO AS TO SUBJECT THEM TO RESEARCH IN THE LABORATORY TO EXPLORE WHETHER THE SAID INGREDIENTS OR WHETHER THE IMPACT OF THE SAID INGREDIENTS MAY HELP TO DEVELOP NEW PRODUCTS. SUCH RESEARCH IS CARRIED OUT IN ORDER TO STUDY THE INGREDIENTS, TO SOLVE COMPLAINTS RELATING TO EXISTING PRODUCTS, TO EXPLORE THE COMPOSITION OF THE PRODUCT OF A COMPETITOR, TO PRODUCE THE MARKET SIMILAR PRODUCTS AS THAT OF THE COMPETITOR, IN OTHER WORDS RESEA RCH IS CARRIED OUT TO DEVELOP NEW PRODUCTS, TO STABILIZE EXISTING PRODUCTS, TO RECTIFY SHORTCOMINGS IN THE EXISTING PRODUCTS AS WELL AS TO STUDY THE COMPOSITION OF COMPETITORS PRODUCT. THE APPELLANT BEING IN THE FMCG INDUSTRY THE SAID EXPERIMENTS/RESEARCH HAS TO BE CARRIED OUT AT A FAST PACE AND HENCE HAS TO BE TREATED AS INCIDENTAL TO THE BUSINESS CARRIED OUT AND BY ITS VERY NATURE IS REVENUE IN NATURE. THE AO ERRED IN TREATING THE SAME CAPITAL IN NATURE. THE SAID EXPENDITURE IS ALLOWABLE UNDER S. 37(I) O F THE ACT. 23. WE FIND THAT THIS ISSUE IS RECURRING ISSUE WHICH HAS BEEN DECIDED BY THE TRIBUNAL IN EARLIER YEARS. IN AY 2008 - 09, THE TRIBUNAL HAS DEALT AND DECIDED THIS ISSUE IN THE FOLLOWING MANNER : - 18. GROUND NO. 4 THE ASSESSEE HAS CHALLENGED TH E DISALLOWANCE OF 'PRODUCT DEVELOPMENT EXPENSES' OF RS.13,58,256/ - WHICH INCLUDES DESIGN CHARGES. THE PRODUCT DEVELOPMENT EXPENSES HAVE BEEN INCURRED BY THE ASSESSEE TO STUDY THE COMBINATION OF INGREDIENTS OF DIFFERENT PRODUCTS AND TO STUDY THE POSSIBLE NE W IDEA OF THE PARLE AGRO P LTD ITA 6209 /M/20 1 3 ITA 5694/M/201 3 12 PRODUCT. THESE EXPENDITURES HAVE BEEN INCURRED FOR THE PURCHASE OF VARIOUS INGREDIENTS OF THE PRODUCTS LIKE PULP JUICE, CONCENTRATE AND OTHER PRODUCTS FOR IN HOUSE TESTING AND R&D. THE EXPENSES ALSO INCLUDE COLD STORAGE CHARGES TO PRESERVE TH E PULP AND THE CONCENTRATE. THE ASSESSING OFFICER WITHOUT ASSIGNING ANY PROPER REASON, HELD IT TO BE CAPITAL EXPENDITURE. 19. BEFORE THE LD.CIT(A), THE ASSESSEE HAS FILED EXHAUSTIVE EXPLANATION WHICH HAS BEEN INCORPORATED FROM PAGES 20 TO 25 OF THE APPEL LATE ORDER. THE LD.C1T(A) AFTER GOING THROUGH THE DETAILS OF THE PRODUCT DEVELOPMENT EXPENSES, HELD THAT OUT OF DISALLOWANCES OF RS. 21,20,897/ - AS MADE BY THE AO, SUM OF RS.13,58,256/ - HAS BEEN DEBITED BY THE ASSESSEE AS EXPENDITURE ON 31.03.2008. MOREOVE R THERE IS INCREASE BY THE ASSESSEE AS EXPENDITURE ON 31.03.2008. MOREOVER THERE IS INCREASE IN THE EXPENSES UNDER THIS HEAD FROM THE LAST YEAR. THUS, SAID AMOUNT DEBITED ON THE LAST DAY, REFLECTS ABNORMALITY OF THE EXPENDITURE DEBITED ON THE LAST DAY, REF LECTS ABNORMALITY OF THE EXPENDITURE CLAIMED BY THE ASSESSEE. ACCORDINGLY HE HELD THAT 75% OF RS. 13,58,256/ - SHOULD BE DISALLOWED. 20. BEFORE US, THE LEARNED SENIOR COUNSEL SUBMITTED THAT THE EXPENDITURES WERE INCURRED DURING THE YEAR ONLY. FOR EXAMPLE, ASSESSEE HAS GIVEN ADVANCES OF THE PRODUCTS TO ITS MANUFACTURING UNIT/FACTORY FOR TESTING PURPOSE AND R&D AND THE SAID ADVANCES AFTER CONSUMPTION HAS BEEN DEBITED ON THE LAST DATE. THE LIST OF ENTIRE EXPENSES WERE GIVEN BEFORE THE AO AND ALSO BEFORE THE L D.CIT(A). FURTHER THE LD.CIT(A) HAS ALSO DISALLOWED EXPENSES WHERE THE ASSESSEE HAS CARRIED OUT EXPENSES ON 'DESIGN CHARGES' ON VARIOUS PRODUCTS AS CAPITAL EXPENDITURE. SUCH EXPENSES INCURRED FOR DESIGN CHARGES HAS BEEN HELD TO BE ALLOWABLE AS BUSINESS EXP ENDITURE BY THE TRIBUNAL IN A.Y. 2007 - 2008. THUS NO DISALLOWANCE IS CALLED FOR. 21. LD. DR STRONGLY RELIED UPON THE ORDER OF THE LD.CIT(A) AND ALSO POINTED OUT THE RELEVANT REASON GIVEN BY THE LD.C I T(A). 22. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND ON PERUSAL OF THE IMPUGNED ORDER, WE FIND THAT, UNDER THIS HEAD, THE LD.CIT(A) HAS CONFIRMED CERTAIN EXPENSES WHICH WERE ON ACCOUNT OF DESIGN CHARGES OF CERTAIN PACKING MATERIAL OF THE PRODUCTS, ON THE GROUND THAT THESE EXPENDITURE ARE ENDURING IN NATURE AND OTHERS FOR PRODUCT DEVELOPMENT. SO FAR AS THE EXPENSES INCURRED ON 'DESIGN CHARGES', THIS ISSUE HAD COME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN A.Y. 2007 - 08. THE TRIBUNAL AFTER DISCUSSING THE ENTIRE ISSUE ON ACCOUNT OF DEVELOPMENT OF NEW PRODUCTS AND ALSO THE DESIGN CHARGES HAS DELETED THE SAID DISALLOWANCE BY HOLDING IT TO BE REVENUE IN NATURE, AFTER OBSERVING IT HOLDING IN NATURE 'WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE RELEVANT FINDINGS OF THE AUTHORITIES BELOW AND THE MATERIAL AVAILA BLE ON RECORD. THE ONLY ISSUE BEFORE US IS ON ACCOUNT OF EXPENDITURE INCURRED FOR THE DESIGNING CHARGES OF PACKAGED DRINKING WATER BOTTLE AND CHANGING OF COLOUR OF THE CAP OF THE BEVERAGES BOTTLES. THE ASSESSEE'S CONTENTION IS THAT THE PARLE AGRO P LTD ITA 6209 /M/20 1 3 ITA 5694/M/201 3 13 EXPENDITURE INCURRED FOR DESIGNING OF PRODUCTS, ETC., IS REQUIRED TO BE MADE VERY FREQUENTLY I.E., IN ONE TO TWO YEARS TO STAY IN THE COMPETITIVE MARKET AND TO KEEP PACE WITH THE MARKET TRENDS. THE ASSESSEE INTO MANUFACTURING AND SALE OF FMCG PRODUCTS AND HAS VARIOUS COMPETIT ORS IN THE MARKET HAVING SIMILAR LINE OF PRODUCTS. KEEPING WITH THE MARKET TRENDS AND PACE OF CONSUMER PREFERENCES, PROFIT. SUCH AN EXPENDITURE INCURRED FOR DESIGNING THE PRODUCT CANNOT THE CHANGES IN THE DESIGN OF THE PRODUCTS AND ALSO THE QUALITY OF THE PRODUCTS IS AN ESSENTIAL PART OF MARKET STRATEGY TO AUGMENT SALE AND BE HELD TO BE OF ENDURING BENEFIT. EVEN OTHERWISE ALSO, IF THE ADVANTAGE OF SUCH EXPENDITURE IS MERELY FOR AUGMENTING THE ASSESSEE'S TRADING / BUSINESS OPERATIONS OR TO CARRY ON THE BUSIN ESS MORE EFFICIENTLY FOR PROFITABILITY, LEAVING THE FIXED CAPITAL UNTOUCHED, HERE IN THIS CASE, THE ASSESSEE HAS CHANGED THE DESIGN OF THE BOTTLE THE EXPENDITURE WOULD GENERALLY BE ON THE REVENUE ACCOUNT, EVEN THOUGH THE ADVANTAGE MAY HAVE AN ENDURING BENE FIT FOR A BRIEF PERIOD AND THE COLOUR OF THE CAP AS IS A REGULAR PHENOMENON TO BE CARRIED OUT BETWEEN ONE TO TWO YEARS WHICH CANNOT BE HELD TO BE FOR AN ENDURING BENEFIT OR MAJOR CHANGE IN THE PROFIT MAKING APPARATUS. SUCH, EXPENDITURES ARE REQUIRED FOR EI THER AUGMENTING THE SALE OR TO SURVIVE IN THE MARKET THE MARKET UNDER STIFF COMPETITION. THEREFORE, SUCH EXPENDITURE HAS TO BE TREATED AS REVENUE EXPENDITURE AND, ACCORDINGLY, THE DISALLOWANCE AS CONFIRMED BY THE LEARNED COMMISSIONER (APPEALS) UNDER THE HE AD PRODUCT DEVELOPMENT EXPENDITURE IS ALLOWED. ACCORDINGLY, GROUND NO.2, IS ALLOWED.' IN THIS YEAR ALSO SO FAR AS THE EXPENDITURE INCURRED ON PRODUCT DEVELOPMENT AND DESIGN CHARGES, WE DELETE THE DISALLOWANCE AS THESE ARE P UREL Y REVENUE EXPENDITURE. SO F AR AS THE FINDING OF THE LD.CIT(A) THAT CERTAIN EXPENDITURE HAS BEEN CLAIMED ON THE LAST DATE OF THE ACCOUNTING YEAR, WE FIND THAT LEARNED SENIOR COUNSEL HAS POINTED OUT THAT, THE ASSESSEE WAS ISSUING VARIOUS PRODUCT INGREDIENTS TO ITS MANUFACTURING UNIT/F ACTORY FOR TESTING PURPOSE DURING THE YEAR AND SAME HAS BEEN ACCOUNTED FOR AFTER RECEIVING THE DETAILS OF CONSUMPTION. WHATEVER HAS BEEN CONSUMED, IS ACCOUNTED FOR IN THE BOOKS OF ACCOUNT AND CLAIMED AS EXPENDITURE. CERTAIN ADVANCES OF PRODUCTS GIVEN IN TH E LATER HALF OF THE ACCOUNTING YEAR HAS BEEN DEBITED ON THE LAST DAY. SO FAR AS THE FACTUM OF INCURRING THE EXPENDITURE, THE SAME HAS NOT BEEN DOUBTED. THE LD.CIT(A) HAS ONLY GONE BY THE PREMISE THAT SUBSTANTIAL AMOUNT HAS BEEN DEBITED ON THE LAST DAY, TH EREFORE, THESE EXPENSES CAN BE SAID TO BE OVER STATED. ACCORDINGLY, HE DISALLOWED 75% OF THE EXPENSES WHICH WERE DEBITED ON 31.03.2008, STATING THAT IT DOES NOT RELATE TO THIS YEAR. SUCH A FINDING OF THE LD.CIT(A) CANNOT BE UPHELD WITHOUT THERE BEING A CON CRETE FINDING THAT THESE EXPENSES PERTAINED TO SUBSEQUENT YEAR OR HAS NOT BEEN INCURRED DURING THE YEAR. THUS WE DO NOT FIND ANY REASON TO CONFIRM SUCH A DISALLOWANCE AS MADE BY THE LD. C I T(A). ACCORDINGLY THE SAME IS DELETED. GROUND NO. 4 IS TREATED AS DI SALLOWED. PARLE AGRO P LTD ITA 6209 /M/20 1 3 ITA 5694/M/201 3 14 24. THE AFORESAID FINDING IS APPLICABLE ON THE FACTS OF THE PRESENT YEAR ALSO THEREFORE, IN VIEW OF THE SAID FINDING, WE DELETE THE SAID ADDITION. 25. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. TO SUM - UP : ASSESSEES APPEAL STANDS AL LOWED AND THAT OF THE REVENUES STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER, 2015. SD/ - SD/ - ( . . ) ( ) ( G S PANNU ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 30 TH NOVEMBER , 2015 / COPY TO: - 1 ) / THE APPELLANT. 2 ) / THE RESPONDENT. 3) THE CIT (A) - 39 , MUMBAI. 4 ) THE CIT CENTRAL - II , MUMBAI. 5 ) , , / THE D.R . C BENCH, MUMBAI. 6 ) \ COPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * . . *CHAVAN, SR.PS