DCIT CIR 2, KALYAN V. RAMESH V. KISHNANI, ULHASNAGAR

ITA 6214/MUM/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4525 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 21-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BHAVYA GOYAL
• Keywords: Gift
• Section: 37(1); 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H , MUMBAI BEFORE S HRI RAJESH KUMAR (AM ) AND SHRI RAM LAL NEGI (JM) ITA NO. 6 214/MUM/2016 ASSESSMENT YEAR: 2009 - 2010 ITA NO. 6215/MUM/2016 ASSESSMENT YEAR: 2010 - 2011 & ITA NO. 6216/MUM/2016 ASSESSMENT YEAR: 2011 - 2012 THE DY. COMMISSIONER OF INCOME TAX, CIRCLE - 2, 2 ND FLOOR, MOHAN PLAZA, KHADAKPADA, WAYALE NAGAR, KALYAN (W) - 421301 VS. SHRI RAMESH V KISHNANI, SHOP NO. 2, RADHA COMPLEX, NR. DASSERA MAIDAN, ULHASNAGAR - 421002 PAN: ABHPK4072E (A PPELLANT) (RESPONDENT) REVENUE BY : SHRI MANOJ KUMAR (D R) ASSESSEE BY : SHRI BHAVYA GOYAL (A R) DATE OF HEARING: 18 /01 /201 9 DATE OF PRONOUNCEMENT: 22 / 03 /201 9 O R D E R PER RAM LAL NEGI, JM THE REVENUE HAS FILED THESE APPEALS AGAINST THE THREE ORDERS DATED 04.07.2016 PASSED BY THE LD. COMMISS IONER OF INCOME TAX (APPEALS) - 3 , THANE (FOR SHORT THE CIT (A)) , PERTAINING TO THE ASSESSMENT YEAR S 2009 - 10, 2010 - 11 AND 2011 - 12, WHEREBY THE LD . CIT (A) HAS PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE AGAINST ASSESSMENT ORDER PASSED U/S 144 READ WITH SECTION 147 OF THE ACT PERTAINING TO THE ASSESSMENT YEAR 2009 - 10 AND ALLOWED THE APPEALS FILED BY THE ASSESSEE AGAINST ASSESSMENT ORDERS PASSED U/S 143 (3) OF THE ACT PERTAINING TO THE ASSESSMENT YEAR 2010 - 11 AND 2011 - 12. 2 ITA NO S . 6214, 6215 & 6216/MUM/2016 ASSESSMENT YEAR S : 2009 - 10, 2010 - 11 AND 2011 - 12 SINCE, THESE APPEALS PERTAIN TO THE SAME ASSESSEE AND ISSUES INVOLVED ARE IDENTICAL IN ALL THE THREE APPEALS , THESE WERE CLUBBED, HEARD TOGETHER AND ARE BEING DISPOSED OF BY TH IS COMMON AND CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. BRIEF FACTS OF THE CASE PERTAINING TO THE ASSESSMENT YEAR 2009 - 10 ARE THAT THE ASSESSEE ENGAGED IN THE BUSINESS OF TRADING OF IMFL AND BEER ON WHOLESALE BASIS , FILED ITS RETURN OF INCOME F OR THE ASSESSMENT YEAR UNDER CONSIDERATION, DECLARING THE TOTAL INCOME OF RS. 2,20,18,843/ - . THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT ORDER WAS PASSED U/S 143 (3) OF THE ACT ACCEPTING THE RETURNED INCOME. 3. SUBSEQUENTLY, DURING THE SCRUTINY ASSESSMENT PROCEEDINGS FOR THE A.Y. 2010 - 11, IT WAS NOTICED THAT ASSESSEE HAD PURCHASED CIGARETTE AND GUTKA AMOUNTING TO RS. 1,83,05,518/ - , DISTRIBUTED THE SAME FREE OF COST AND CLAIMED DEDUCTION OF SAID AMOUNT UNDER THE HEAD SALES PROMOTION. ACCORDINGLY , THE AO RE - OPENED THE ASSESSMENT AFTER ISSUING NOTICE U/S 148 OF THE ACT. IN RESPONSE TO THE NOTICE U/S 148, THE ASSESSEE FILED RETURN AT THE INCOME ALREADY DECLARED IN THE ORIGINAL RETURN. THE AO ISSUED NOTICES U/S 143 (2) AND 142 (1) , H OWEVER, THE ASSES SEE DID NOT FURNISH THE DETAILS CALLED FOR. THE AO FURTHER ISSUED NOTICE U/S 14 4 OF THE ACT AND ULTIMATELY PASSED THE ASSESSMENT ORDER U/S 144 R.W.S 147 OF THE ACT DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 4,03,24,360/ - AFTER MAKING ADDITION OF R S. 1,83,05,518/ - CLAIMED BY THE ASSESSEE IN ORIGINAL RETURN AS DEDUCTION UNDER THE HEAD SALES PROMOTION . THE AO MADE THE ADDITION ON THE GROUND THAT ASSESSEE HAD DISTRIBUTED THE TOBACCO PRODUCTS AMOUNTING TO RS. 1,83,05,518/ - IN CONTRAVENTION OF CIGARET TES AND OTHER TOBACCO PRODUCTS (PROHIBITION OF ADVERTISEMENT AND REGULATION AND TRADE AND COMMERCE, PRODUCTION SUPPLY AND DISTRIBUTION ACT) (COTPA) AND THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION IN RESPECT OF THE SAID EXPENDITURE. 3 ITA NO S . 6214, 6215 & 6216/MUM/2016 ASSESSMENT YEAR S : 2009 - 10, 2010 - 11 AND 2011 - 12 4. THE ASSESSEE CHALLE NGED THE ASSESSMENT ORDER BEFORE THE LD. CIT (A). THE LD. CIT (A) AFTER HEARING THE ASSESSEE PARTLY ALLOWED THE APPEAL OF THE ASSESSEE AND DELETED THE ADDITION OF RS. 1,83,05,518/ - MADE BY THE AO. THE REVENUE IS IN APPEAL AGAINST THE SAID FINDINGS OF THE L D. CIT (A). 5. THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) BY RAISING THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) - 3, THANE, ERRED IN DELETING THE ADDITION O F RS. 1,83,05,518/ - MADE ON ACCOUNT OF DISALLOWANCE OF SALES PROMOTION EXPENSES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) - 3, THANE, ERRED IN ALLOWING THE EXPENSES CLAIMED ON CIGARETTE TOBACCO PURCHASES EVEN WITHOUT VERI FYING THE GENUINENESS OF THESE PURCHASES. 3. THE LD. CIT (A) ERRED IN ALLOWING THE EXPENSES CLAIMED ON CIGARETTE TOBACCO PURCHASES WHILE NO DETAILS OF PURCHASES AND THEIR SUBSEQUENT SUPPLIES TO THE DISTRIBUTORS HAVE BEEN FURNISHED BY THE ASSESSEE DURING THE A SSESSMENT PROCEEDING. 6. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ONLY ISSUE RAISED BY THE REVENUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE F BENCH OF THE ITAT, MUMBAI RENDERED IN THE CASE OF DCIT VS. SHRI V INOD NARAINDAS KISHNANI ITA NO. 6227/MUM/2016 FOR THE A.Y. 2011 - 12. SINCE, TH E ORDER PASSED BY THE LD. CIT (A ) IS IN ACCORDANCE WITH THE DECISION OF THE MUMBAI TRIBUNAL, THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT (A) TO INTERFERE WITH. 7. ON THE O THER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) RELYING ON THE ORDER DATED 20.07.2018 PASSED BY THE I BENCH OF THE MUMBAI TRIBUNAL IN ITA NO. 6209/MUM/2016 A.Y. 2008 - 09, ITA NO. 6225/MUM/2016, A.Y. 2012 - 13, ITA NO. 6210 TO 6212/MUM/2016 , A.Y. 2009 - 10 , 2010 - 11 AND 2012 - 13 RESPECTIVELY, ITA NO. 6222/MUM/2016, A.Y. 2011 - 12 ITA NO. 6221/MUM/2016 A.Y. 2009 - 10 AND ITA NO. 6223/MUM/2016 A.Y. 2012 - 13, SUBMITTED THAT THIS ISSUE IS COVERED AGAINST THE ASSESSEE AND THE TRIBUNAL HAS REVERSED THE ORDER 4 ITA NO S . 6214, 6215 & 6216/MUM/2016 ASSESSMENT YEAR S : 2009 - 10, 2010 - 11 AND 2011 - 12 PASSED B Y THE CIT (A) AND UPHOLD THE ADDITION MADE BY THE AO TOWARDS DISALLOWANCE OF SALE PROMOTION EXPENSES. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO GONE THROUGH THE RELEVANT RECORD INCLUDING THE CASES RELIED UPON BY THE PARTIES. AS POINTED OUT BY THE LD . COUNSEL FOR THE ASSESSEE , THE ORDER DATED 20.07.2018 PASSED BY THE I BENCH OF THE TRIBUNAL IS AN EX - PARTE ORDER, WHEREAS THE ORDER PASSED BY THE F BENCH OF THE MUMBAI TRIBUNAL IN ITA NO. 6227/MUM/2016 (SUPRA) HAS BEEN PASSED ON MERITS AFTER HEARING B OTH THE PARTIES. WE FURTHER NOTICE THAT IN THE SAID CASE, THE REVENUE CHALLENGED THE ACTION OF CIT (A) IN DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF SALE PROMOTION EXPENSES. THE COORDINATE BENCH HAS DECIDED THE ISSUE IN QUESTION HOL DING AS UNDER: - 5. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. DURING THE ASSESSMENT PROCEEDING THE ASSESSING OFFICER DISALLOWED THE SALE PROMOTION EXPENSES HOLDING THAT THE EXPENDITURE INCURRED ON PURCHASE OF CIGARETTE AND TOBACCO PRODUCT IS NOT ALLOWABLE EXPENDITURE DUE TO DISABLING PROVISION IN SECTION 37(1) OF ACT AS DISTRIBUTION OF TOBACCO PRODUCT IS NOT ALLOWED UNDER SECTION 53) - OF COTP ACT. WE HAVE PERUSED THE PROVISIONS OF SECTIO N 5 &6 OF COTP ACT, WHICH IS REPRODUCED BELOW: 5. PROHIBITION OF ADVERTISEMENT OF CIGARETTES AND OTHER TOBACCO PRODUCTS. - (1) NO PERSON ENGAGED IN, OR PURPORTED TO HE ENGAGED IN THE PRODUCTION, SUPPLY OR DISTRIBUTION OF CIGARETTES OR ANY OTHER TOBACCO PROD UCTS SHALL ADVERTISE AND NO PERSON HAVING CONTROL OVER A MEDIUM SHALL CAUSE TO BE ADVERTISED CIGARETTES OR ANY OTHER TOBACCO PRODUCTS THROUGH THAT MEDIUM AND NO PERSON SHALL TAKE PART IN ANY ADVERTISEMENT WHICH DIRECTLY OR INDIRECTLY SUGGESTS OR PROMOTES T HE USE OR CONSUMPTION OF CIGARETTES OR ANY OTHER TOBACCO PRODUCTS. (2) NO PERSON, FOR ANY DIRECT OR INDIRECT PECUNIARY BENEFIT, SHALL (A) DISPLAY, CAUSE TO DISPLAY, OR PERMIT OR AUTHORISE TO DISPLAY ANY ADVERTISEMENT OF CIGARETTES OR ANY OTHER TOBACCO PRO DUCT; OR (B) SELL OR CAUSE TO SELL, OR PERMIT OR AUTHORISE TO SELL A FILM OR VIDEO TAPE CONTAINING ADVERTISEMENT OF CIGARETTES OR ANY OTHER TOBACCO PRODUCT; OR (C) DISTRIBUTE, CAUSE TO DISTRIBUTE, OR PERMIT OR AUTHORISE TO DISTRIBUTE TO THE PUBLIC ANY LEAF LET, HAND - BILL OR DOCUMENT WHICH IS OR WHICH 5 ITA NO S . 6214, 6215 & 6216/MUM/2016 ASSESSMENT YEAR S : 2009 - 10, 2010 - 11 AND 2011 - 12 CONTAINS AN ADVERTISEMENT OF CIGARETTES OR ANY OTHER TOBACCO PRODUCT; OR (D) ERECT, EXHIBIT, FIX OR RETAIN UPON OR OVER ANY LAND, BUILDING, WAIL, HOARDING, FRAME, POST OR STRUCTURE OR UPON OR IN ANY VEHICLE OR S HALL DISPLAY IN ANY MANNER WHATSOEVER IN ANY PLACE ANY ADVERTISEMENT OF CIGARETTES OR ANY OTHER TOBACCO PRODUCT: PROVIDED THAT THIS SUB - SECTION SHALL NOT APPLY IN RELATION TO (A) AN ADVERTISEMENT OF CIGARETTES OR ANY OTHER TOBACCO PRODUCT IN OR ON A PACKA GE CONTAINING CIGARETTES OR ANY OTHER TOBACCO PRODUCT; (B) ADVERTISEMENT OF CIGARETTES OR ANY OTHER TOBACCO PRODUCT WHICH IS DISPLAYED AT THE ENTRANCE OR INSIDE A WAREHOUSE OR A SHOP WHERE CIGARETTES AND ANY OTHER TOBACCO PRODUCTS ARE OFFERED FOR DISTRIBUT ION OR SALE. (3) NO PERSON. SHALL, UNDER A CONTRACT OR OTHERWISE PROMOTE OR AGREE TO PROMOTE THE USE OR CONSUMPTION OF (A) CIGARETTES OR ANY OTHER TOBACCO PRODUCT; OR (B) ANY TRADE MARK OR BRAND NAME OF CIGARETTES OR ANY OTHER TOBACCO PRODUCT IN EXCHANGE FOR A SPONSORSHIP, GIFT, PRIZE OR SCHOLARSHIP GIVEN OR AGREED TO BE GIVEN BY ANOTHER PERSON. 6. PROHIBITION ON SALE OF CIGARETTE OR OTHER TOBACCO PRODUCTS TO A PERSON BELOW THE AGE OF EIGHTEEN YEARS AND IN PARTICULAR AREA. - NO PERSON SHALL SELL, OFFER FOR SALE, OR PERMIT SALE OF CIGARETTE OR ANY OTHER TOBACCO PRODUCT - (A) TO ANY PERSON WHO IS UNDER EIGHTEEN YEARS OF AGE, AND (B) IN AN AREA WITHIN A RADIUS OF ONE HUNDRED YARDS OF ANY EDUCATIONAL INSTITUTION. 6. ON CAREFUL PERUSAL OF SECTION 5(1) OF COTP ACT MAKES IT CLEAR THAT ADVERTISEMENT OF TOBACCO PRODUCTS ARE PROHIBITED UNDER THE LAW ON THE PURCHASES WHO ARE ENGAGED IN PRODUCTION, SUPPLY OR DISTRIBUTION, DIRECTLY OR INDIRECTLY. SUBSECTION (2) OF SECTION 5, FURTHER PUTS A CONDITION THAT NO PERSON FOR ANY DIRECT OR INDIRECT PECUNIARY BENEFIT SHALL DISPLAY, CAUSE TO DISPLAY, OR PERMIT OR AUTHORISE TO DISPLAY ANY ADVERTISEMENT OF CIGARETTES OR ANY OTHER TOBACCO ,PRODUCT; OR FOR SALE OR CAUSE TO SALE , OR PERMIT OR AUTHORISE TO SELL A FILM OR VIDEO TAPE CONTAI NING ADVERTISEMENT OF CIGARETTES OR ANY OTHER TOBACCO PRODUCT OR TO DISTRIBUTE, CAUSE TO DISTRIBUTE, OR PERMIT OR AUTHORISE TO DISTRIBUTE TO THE PUBLIC ANY LEAFLET, HAND - BILL OR DOCUMENT WHICH IS OR WHICH CONTAINS AN ADVERTISEMENT OF CIGARETTES OR ANY OTHE R TOBACCO PRODUCT; OR ERECT, EXHIBIT, FIX OR RETAIN UPON OR OVER ANY LAND, BUILDING, WALL, 6 ITA NO S . 6214, 6215 & 6216/MUM/2016 ASSESSMENT YEAR S : 2009 - 10, 2010 - 11 AND 2011 - 12 HOARDING, FRAME, POST OR STRUCTURE OR UPON OR IN ANY VEHICLE OR SHALL DISPLAY IN ANY MANNER WHATSOEVER IN ANY PLACE ANY ADVERTISEMENT OF CIGARETTES OR ANY OTHER TOBA CCO PRODUCT. THE PROVISO ATTACHED WITH THIS SUB - SECTION FURTHER PRESCRIBES THAT AN ADVERTISEMENT OF CIGARETTES OR ANY OTHER TOBACCO PRODUCT IN OR ON A PACKAGE CONTAINING CIGARETTES OR ANY OTHER TOBACCO PRODUCT; ADVERTISEMENT OF CIGARETTES OR ANY OTHER TOB ACCO PRODUCT WHICH IS DISPLAYED AT THE ENTRANCE OR INSIDE A WAREHOUSE OR A SHOP WHERE CIGARETTES AND ANY OTHER TOBACCO PRODUCTS ARE OFFERED FOR DISTRIBUTION OR SALE. SUB SECTION 3 OF SECTION 5 OF THIS ACT PRESCRIBE THAT NO PERSON, SHALL, UNDER A CONTRACT O R OTHERWISE PROMOTE OR AGREE TO PROMOTE THE USE OR CONSUMPTION OF CIGARETTES OR ANY OTHER TOBACCO PRODUCT; OR ANY TRADE MARK OR BRAND NAME OF CIGARETTES OR ANY OTHER TOBACCO PRODUCT IN EXCHANGE FOR A SPONSORSHIP, GIFT, PRIZE OR SCHOLARSHIP GIVEN OR AGREED TO BE GIVEN BY ANOTHER PERSON. FURTHER SECTION 6 OF THE COTP ACT PUT CERTAIN CONDITION ON SALE OF TOBACCO PRODUCT TO THE PERSON OF BELOW THE AGE OF 18 YEARS OR WITHIN RADIUS OF HUNDRED METRES OF EDUCATIONAL INSTITUTIONS. 7. WE HAVE SEEN THAT THE ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL ON RECORD WHICH MAY SHOW THAT ASSESSEE HAS UNDERTAKEN THE PROMOTION OF SPECIFIC TOBACCO PRODUCT OR SPONSORED THEM. 8. THE LEARNED COMMISSIONER (APPEALS) ON CONSIDERING THE CONTENTION OF ASSESSEE CONCLUDED THAT SECTION 5 (3) OF COTP ACT APPLIES ONLY WHERE A PERSON BY CONTACT OR OTHERWISE PROMOTE AGREE TO PROMOTE THE CONSUMPTION OF TOBACCO PRODUCTS, HOWEVER THE ASSESSEE IN NO NOWHERE HAS ENTERED INTO A CONTRACT FOR ANY SPECIFIED BRAND OF TOBACCO PRODUCT. THE ASSESSEE IS NOT MANUFACTURER OR DEALER OR ADVERTISER OF ANY SUCH PRODUCT THE ASSESSEE IS PROMOTING OF SALE OF LIQUOR BY DISTRIBUTING THE TOBACCO ITEMS. THE GOVERNMENT HAS NOT PROHIBITED IT THE MANUFACTURING OF TOBACCO PRODUCT, THE ASSESSEE IS ALSO NOT A MANUFACTURER THER EOF, AND THEREFORE, THE PROVISION OF SECTION 5 OF COT P ACT ARE NOT APPLICABLE ON THE ASSESSEE. THE LEARNED COMMISSIONER (APPEALS) ALSO OBSERVED THAT ASSESSEE IS NOT CONCERNED WHETHER THE PRODUCT DISTRIBUTED BY ASSESSEE IS CONSUMED OR NOT MERE DISTRIBUTION DOES NOT TANTAMOUNT TO PROMOTION OF CONSUMPTION, UNLESS THE DISTRIBUTOR ACTIVELY PROMOTES THE PRODUCT. THE LEARNED COMMISSIONER (APPEALS) ALSO OBSERVED THAT IF THE PROVISION OF COPT ACT IS INTERPRETED IN SUCH A MANNER, EVERY SHOPKEEPER WHO SALES TOBACCO P RODUCT WILL BECOME AN OFFENDER. 7 ITA NO S . 6214, 6215 & 6216/MUM/2016 ASSESSMENT YEAR S : 2009 - 10, 2010 - 11 AND 2011 - 12 THEREFORE, WE ARE ALSO IN AGREEMENT WITH THE OCNCLUSION ARRIVED BY LEARNED COMMISSIONER (APPEAL). 9. THE HON'BLE BOMBAY HIGH COURT IN THE MAHARASHTRA SUGAR SYNDICATE VERSUS DCIT (SUPRA) WHILE CONSIDERING THE ISSUE WHETHER TH E REIMBURSEMENT OF THE LIQUOR DRAWN AND PAID BY THE REGIMENT/UNIT ON AN OCCASION LIKE CELEBRATING THE REGIMENTS ANNUAL DAY WHICH IS REIMBURSED CAN BE SAID TO BE AGAINST THE PUBLIC POLICY OR NOT. THE HON'BLE BOMBAY HIGH COURT ON THE FACTS THAT ASSESSEE - COMP ANY WAS MANUFACTURER OF INDIAN MADE FOREIGN LIQUOR (IMFL). IT WAS DEPENDING TO A LARGE EXTENT ON ORDERS FROM MILITARY CANTEEN FOR THE SALE OF ITS PRODUCTS. DURING THE RELEVANT ASSESSMENT YEAR, IT OFFERED SAMPLES OF ITS PRODUCTS AT VARIOUS MILITARY FUNCTION S SO THAT THE PERSONNEL COULD DEVELOP A TASTE FOR IT AND IT COULD SECURE BIGGER ORDERS FROM THE CSD (CANTEEN STORES DEPARTMENT). THE MODUS OPERANDI OF OFFERING SUCH SAMPLES WAS THAT THE CONCERNED DEFENCE ESTABLISHMENT USED TO BUY THE REQUISITE QUANTITY OF COMPANY'S LIQUOR FROM THE ARMY LIQUOR SHOPS ON ACTUAL PAYMENT AND LATER ON THE REGIMENT OR THE DEFENCE ESTABLISHMENT FORWARDED THE CASH MEMOS TO THE ASSESSEE - COMPANY FOR REIMBURSEMENT. THE ASSESSEE CLAIMED SAID AMOUNTS AS BUSINESS PROMOTION EXPENSES. THE A SSESSING OFFICER DISALLOWED SUCH EXPENSES ON GROUND THAT IT WAS CLEAR ENTERTAINMENT OF CUSTOMERS. ON APPEAL, THE COMMISSIONER (APPEALS) UPHELD THE DISALLOWANCE ON THE GROUND THAT SUCH EXPENSES WERE AGAINST THE PUBLIC POLICY. THE TRIBUNAL UPHELD THE ORDER O F THE COMMISSIONER (APPEALS). ON APPEAL TO THE HIGH COURT IT WAS HELD THAT THE TRIBUNAL WAS NOT JUSTIFIED IN HOLDING THAT THE EXPENDITURE INCURRED BY THE ASSESSEE FOR SALES PROMOTION WAS NOT ALLOWABLE. THE HON'BLE COURT CONCLUDED THAT THE ARMY UNIT COULD N OT DIRECTLY PURCHASE LIQUOR FROM A MANUFACTURER. LIQUOR HAD TO BE PURCHASED THROUGH CSD. THIS WAS DONE BY THE ARMY UNIT. THE SECOND ASPECT WAS THAT THE AMOUNTS SPENT BY THE UNIT TOWARDS PURCHASE OF THAT LIQUOR WAS REIMBURSED BY THE ASSESSEE NOT TO ANY INDI VIDUAL BUT TO THE ARMY UNIT ITSELF AND WHICH WENT INTO THE COFFERS OF THE GOVERNMENT. THERE WAS NO BAR IN TAKING SUCH REIMBURSEMENT AS EVIDENCED BY RECEIPT. IN OTHER WORDS, SUCH A CONTRACT WAS NOT PROHIBITED BY LAW NOR WAS IT IN THE NATURE OF BRIBE TO AN O FFICER. THE PUBLIC POLICY WOULD INVOLVE THAT INCOME AND EXPENDITURE WHICH IS FROM AN ACTIVITY WHICH IS PROHIBITED BY LAW OR IS IMMORAL. ONLY THEN, THE EXPENDITURE COULD HAVE BEEN DISALLOWED, IN THE INSTANT CASE, THE 8 ITA NO S . 6214, 6215 & 6216/MUM/2016 ASSESSMENT YEAR S : 2009 - 10, 2010 - 11 AND 2011 - 12 AMOUNT HAD BEEN SPENT BY WAY OF COMMERCI AL EXPEDIENCY FOR PROMOTING THE ASSESSEES PRODUCTS. THE FINDING WAS THAT IT WAS BY WAY OF SALES PROMOTION. SUCH EXPENDITURE WAS NOT AGAINST PUBLIC POLICY. ONCE THAT BE THE CASE, THE DEDUCTION WAS ALLOWABLE. 10. CONSIDERING THE DECISION OF HONBLE JURISDIC TIONAL HIGH COURT THAT AND IN VIEW OF THE DISCUSSION REFERRED ABOVE, WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER PASSED BY LEARNED COMMISSIONER (APPEALS) WHICH WE AFFIRMED. HENCE, THE GROUND OF APPEAL RAISED BY REVENUE ARE DISMISSED. 9. SINCE , THE COORDINATE BENCH HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE AND THE ORDER PASSED BY THE LD.CIT (A) IS IN ACCORDANCE WITH THE DECISION OF THE COORDINATE BENCH , WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD.CIT (A). HENCE , RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH, WE UPHOLD THE ORDER PASSED BY THE LD. CIT (A) AND DISMISS ALL THE GROUNDS OF APPEAL OF THE REVENUE. 10 . WE HAVE DISMISSED THE APPEAL FILED BY THE REVENUE PERTAINING TO THE A.Y. 2009 - 10 BY FOLLOWING THE DECISION OF THE COORDINATE BENCH . S INCE THE ISSUES INVOLVED IN THE REVENUE S APPEAL PERTAINING TO THE A.Y. 2010 - 11 AND 2011 - 12 ARE IDENTICAL AND THERE IS NO MATERIAL CHANGE IN THE FACTS OF THE CASE EXCEPT THE FACT THAT ASSESSMENTS IN THESE Y EARS WERE COMPLETED U/S 143 (3) OF THE ACT , CONSISTENT WITH OUR FINDINGS IN THE APPEAL PERTAINING TO THE A.Y. 2009 - 10, WE DISMISS THE APPEAL S FILED BY THE REVENUE PERTAINING TO THE A.Y 2010 - 11 AND 2011 - 12 FOR THE SAME REASONS. IN THE RESULT, ALL THE THR EE APPEALS FILED BY THE REVENUE FOR ASSESSMENT YEAR S 2009 - 10, 2010 - 11 AND 2011 - 12 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND MARCH , 2019 . SD/ - SD/ - ( RAJESH KUMAR ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 22 / 03 / 2019 ALINDRA PS 9 ITA NO S . 6214, 6215 & 6216/MUM/2016 ASSESSMENT YEAR S : 2009 - 10, 2010 - 11 AND 2011 - 12 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPE LLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI