ACIT, New Delhi V. M/s. Glencore India Pvt. Ltd., New Delhi

ITA 6369/DEL/2016

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 4316 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 13-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Transfer pricing; International transaction
• Section: 143(3); 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DLEHI BEFORE SHRI G.S. PANNU, VICE-PRESIDENT AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA NO.6369/DEL/2016 ASSESSMENT YEAR: 2012-13 ACIT, CENTRAL CIRCLE-28, VS. M/S. GLENCORE INDIA PV T. LTD., NEW DELHI. 806, MEGHDOOT, 94, NEHRU PLACE, NEW DELHI. PAN : AAACG3787B C.O. NO. 106/DEL/2019 (IN ITA NO.6369/DEL/2016 ASSESSMENT YEAR: 2012-13 M/S. GLENCORE INDIA PVT. LTD., VS. ACIT, CENTRAL CI RCLE-28, 806, MEGHDOOT, 94, NEHRU PLACE, NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) REVENUE BY : MS. RAKHI VIMAL, SR. DR ASSESSEE BY : SH.TARANDEEP SINGH, ADV. DATE OF HEARING: 09.02.2021 DATE OF ORDER : 09.02.2021 ORDER PER K. NARASIMHA CHARY, J.M. AGGRIEVED BY ORDER DATED 30/9/2016 PASSED IN APPEAL NO. 23/2016-17/CIT (A)-29 PASSED BY THE LEARNED COMMISS IONER OF INCOME TAX (APPEALS)-29, NEW DELHI (LD. CIT(A)) IN THE C ASE OF GLENCORE INDIA 2 PRIVATE LIMITED (THE ASSESSEE), FOR THE ASSESSMEN T YEAR 2012-13, BOTH THE REVENUE AND THE ASSESSEE PREFERRED THE APPEAL A ND CROSS OBJECTIONS. 2. BRIEFLY STATED ADMITTED FACTS OF THE CASE ARE TH AT ASSESSEE IS ENGAGED IN PROVIDING CONSULTANCY SERVICES WITH RESP ECT TO METAL, MINERALS, ENERGY AND AGRI-COMMODITIES TO GLENCORE I NTERNATIONAL AG I.E THE ASSOCIATED ENTERPRISE (AE). IT PROVIDES SERVICE S REGARDING MARKET CONDITIONS IN INDIA, LIASONING WITH THE CUSTOMERS, MONITORING DELIVERY SCHEDULES TO THE CUSTOMERS AS WELL AS ORGANIZES FOR SPEEDY RECOVERY OF PAYMENTS. M/S GLENCORE INTERNATIONAL AG IS PARENT C OMPANY OF ASSESSEE. FOR THE ASSESSMENT YEAR 2012-13, ASSESSEE FILED THE RETURN OF INCOME ON 21/11/2012 DECLARING AN INCOME OF RS. 6, 63, 75, 87 5/-. FOR A DETERMINATION OF THE ARMS LENGTH PRICE (ALP), A R EFERENCE WAS MADE TO THE LD. TRANSFER PRICING OFFICER (LD. TPO) AND THE LD. TPO BY ORDER DATED 20/1/2016 PASSED UNDER SECTION 92 CA(3) OF THE INCO ME TAX ACT, 1961 (FOR SHORT THE ACT) DID NOT DRAWN ANY ADVERSE INF ERENCE IN RESPECT OF THE INTERNATIONAL TRANSACTION. ASSESSMENT UNDER SEC TION 143(3) OF THE ACT WAS COMPLETE BY ORDER DATED 16/3/2016 AT RS. 10, 19 , 75, 050/-AFTER MAKING TWO ADDITIONS, NAMELY, RS. 3, 05, 73, 000/-O N ACCOUNT OF ADVANCE INCOME RECEIVED BY THE ASSESSEE AND RS. 50, 26, 177 /-ON ACCOUNT OF THE DISALLOWANCE OF BUSINESS PROMOTION EXPENSES. 3. ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). LD. CIT(A) BY WAY OF IMPUGNED ORDER DELETED THE ADDITION OF RS. 3, 05 , 73, 000/-BY ACCEPTING THE CONTENTION OF THE ASSESSEE THAT THE R EVENUE HAS BEEN BOOK OR TO THE EXTENT OF SERVICES RENDERED BY THE A SSESSEE TO ITS AE DURING THE RELEVANT FINANCIER, WHICH IS ALSO AS PER THE AGREEMENT BETWEEN THE ASSESSEE AND ITS PARENT COMPANY AND THE SAME IS HIGHER THAN THE MARK UP PERCENTAGE OF THE EXPENDITURE, WHI CH WAS NOT ADVERSELY COMMENTED BY THE LD. TPO. LD. CIT(A) HOWE VER, GAVE RELIEF TO THE ASSESSEE IN RESPECT OF THE BUSINESS PROMOTION E XPENSES TO THE EXTENT OF RS. 33, 50, 785/-BY RESTRICTING THE DISALLOWANCE TO 20% AS AGAINST 60% 3 DISALLOWED BY THE LEARNED ASSESSING OFFICER, BUT SU STAINED THE ADDITION TO THE TUNE OF RS. 16, 75, 392/-. CHALLENGING THE DELE TION OF THE ADDITION MADE ON ACCOUNT OF THE ADVANCE AMOUNT PAID AND THE GRANTING RELIEF TO THE ASSESSEE BY RESTRICTING THE DISALLOWANCE OF THE BUSINESS PROMOTION EXPENSES TO 20% ONLY, REVENUE IS IN THIS APPEAL; WH EREAS THE ASSESSEE PREFERRED THE CROSS APPEAL IN RESPECT OF THE ADDITI ON ON ACCOUNT OF BUSINESS PROMOTION EXPENSES TO THE EXTENT THEY ARE SUSTAINED BY THE LD. CIT(A). 4. COMING TO THE GROUNDS NO. 1 TO 3 OF REVENUES AP PEAL RELATING TO THE ADDITION OF RS. 3, 05, 73, 000/-MADE BY THE LEA RNED ASSESSING OFFICER BY TREATING THE ADVANCE, RECEIVED FROM THE PARENT C OMPANY AS THE INCOME FOR THE RELEVANT ASSESSMENT YEAR IS CONCERNE D, IT IS THE ARGUMENT OF THELD. DR THAT THE ASSESSEE FAILED TO COMMUNICAT E ABOUT HOW SUCH AMOUNT WAS TREATED BY THE PARENT COMPANY OF THE ASS ESSEE; THAT NO CORRESPONDENCE HAS BEEN PRODUCED BY THE ASSESSEE RE GARDING WHAT WAS THE FINAL AMOUNT TO BE DECIDED AS THE FINAL ADJUSTM ENT AS MENTIONED IN CLAUSE 5.2 (C) OF THE CONTRACT BETWEEN THE ASSESSEE AND THE PARENT COMPANY; THAT THE ASSESSEE ON THE BASIS FOR PAYMENT FOR THE PERIOD BETWEEN 1/10/2011 AND 31/3/2012 WHICH WAS TO BE AGR EED AND DETERMINED BY THE PARTIES AS THE SAME WAS NOT A PIC KS REPAYMENT AS IN THE CASE OF THE PERIOD BETWEEN 1/4/2011 AND 30/9/20 11; THAT EACH ASSESSMENT YEAR IS DIFFERENT AND THE PRINCIPLE OF R ES JUDICATA IS NOT APPLICABLE TO THE INCOME TAX PROCEEDINGS; THAT THE LD. CIT(A) FAILED TO NOTICE ALL THESE THINGS WHILE GRANTING RELIEF TO TH E ASSESSEE, AND THEREFORE, THE FINDINGS OF THE ASSESSING OFFICER ON THIS ASPECT HAVE TO BE UPHELD. 5. PER CONTRA, WHILE DRIVING OUR ATTENTION TO THE F INANCIALS OF THE ASSESSEE, LD. AR ARGUED THAT AS ON 1/4/2011 THERE W AS AN OPENING BALANCE OF INCOME RECEIVED IN ADVANCE OF RS. 2.67 CRORES AND AS ON 31/3/2012 THERE WAS A CLOSING BALANCE OF INCOME RE CEIVED IN ADVANCE 4 OF RS. 3.05 CRORES; THAT THE ASSESSEE SUBMITTED ALL THE DETAILS OF CONSULTANCY FEES RECEIVED BY IT FROM THE AE WITH CO PIES OF FIRC; THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HA D RECEIVED 12 MONTHLY INSTALMENTS OF FOREIGN REMITTANCES OF US TH E 6 ENDED, 000/-FROM ITS AE; THAT THE OPENING BALANCE OF INCOME RECEIVED IN ADVANCE TO THE TUNE OF RS. 2.67 CRORES WAS OFFERED TO TAX THIS YEA R WHEREAS THE CLOSING BALANCE OF INCOME RECEIVED IN ADVANCE TO THE TUNE O F RS. 3.05 CRORES AS ON 31/3/2012 WAS OFFERED TO TAX IN THE SUBSEQUENT Y EARS THEREFORE, THE QUESTION OF BRINGING TO TAX THE ADVANCE AMOUNT DOES NOT ARISE. HE FURTHER SUBMITTED THAT THE REMITTANCES OF RS. 3.05 CRORE PAN OFFERED TO TAX IN THE ASSESSMENT YEAR 2013-14, IT WAS ACCEPTED BY THE LEARNED ASSESSING OFFICER IN THE ORDER DATED 20/12/2016 WIT HOUT MAKING ANY OBJECTION. HE FURTHER SUBMITTED THAT THE LD. TPO IN HIS ORDER DATED 20/1/2016 FOR THE ASSESSMENT YEAR 2012-13 HAS ACCEP TED THE ARMS LENGTH PRICE (ALP) OF THE REMUNERATION RECEIVED B Y THE ASSESSEE AND ON CONSIDERATION OF ALL THESE FACTS THE LD. CIT(A) GRANTED RELIEF TO THE ASSESSEE. HE THEREFORE, SUBMITTED THAT THERE ARE NO MERITS IN THE ARGUMENT OF THE LD. DR AND PRAYED TO DISMISS THE AP PEAL OF THE REVENUE. 6. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF THE SUBMISSIONS MADE ON EITHER SIDE. AS COULD BE SEEN FROM THE AGRE EMENT ENTERED INTO WITH ITS PARENT ENTITY, THE ASSESSEE IS RECEIVING S ERVICE INCOME FROM ITS AE PURSUANT TO THE TERMS OF CONSULTING AND SERVICE AGREEMENT DATED 24/3/2011.ACCORDING TO THE TERMS OF AGREEMENT, FOR THE PERIOD BETWEEN 1/4/2011 AND 30/9/2011 A FEE OF USD 600, 000/-PER M ONTH WILL BE INVOICE AND PAID ON QUARTERLY BASIS TO THE ASSESSEE BY THE AE, FOR THE PERIOD BETWEEN 1/10/2011 AND 31/3/2012 FEES WILL BE DETERMINED AND AGREED TO BETWEEN THE ASSESSEE AND THE AE IN THE 1 ST WEEK OF OCTOBER, 2011 AND SHALL BE INVOICE AND PAID ON QUARTERLY BAS IS, AND A FINAL ADJUSTMENT BASED UPON THE ACTUAL COST FOR THE PERIO D BETWEEN 1/4/2011 AND 31/3/2012 FOR THE SERVICES RENDERED BY THE ASSE SSEE COMPANY WILL 5 BE INVOICE AND PAID IN THE 2 ND QUARTER OF 2012. 7. IS NOT IN DISPUTE THAT THE OPENING BALANCE MENTI ONED AS INCOME RECEIVED IN ADVANCE TO THE TUNE OF RUPEES TO THE T UNE OF RS. 2.67 CRORES AS ON 1/4/2011 WAS OFFERED TO TAX IN THE ASSESSMENT YEAR 2012-13, WHEREAS THE CLOSING BALANCE AS ON 31/3/2012 MENTION ED AS INCOME RECEIVED IN ADVANCE TO THE TUNE OF RS. 3.05 CRORES WAS OFFERED TO TAX IN THE ASSESSMENT YEAR 2013-14 WHICH WAS ACCEPTED BY T HE LEARNED ASSESSING OFFICER IN THAT YEAR WITHOUT RISING ANY E YEBROW. FURTHER THE AGREEMENT READS THAT THE ASSESSEE HAS TO BE REMUNER ATED BY THE AE AT COST PLUS BASIS, WITH A MINIMUM MARKUP OF 15%, WHIC H IS AGAIN SUBJECT TO THE ADJUSTMENT BY MUTUAL AGREEMENT TO COMPLY WITH T HE ARMS LENGTH PRINCIPLE. AGREEMENT ALSO PROVIDES FOR THE MECHANIS M FOR CHARGING THIS FREE UNDER PARA 5.2 OF THE AGREEMENT.FURTHER WHILE DETERMINING THE ARMS LENGTH PRICE OF THIS RECEIPT, LD. TPO DID NOT DRAW ANY ADVERSE INFERENCE AND ACCEPTED ALP OF THE REMUNERATION RECE IVED BY THE ASSESSEE. 8. IMPUGNED ORDER CLEARLY SHOWS THAT THE LD. CIT(A) CONSIDERED THE CHARTS FURNISHED BY THE ASSESSEE SHOWING THE OPENIN G BALANCE AND CLOSING BALANCE ALONG WITH THE WORKING OF THE RECEI PTS BEING TREATED AS REVENUE AND THE BALANCE WAS SHOWN AS ADVANCE AND SU CH A PRACTICE WAS ESTABLISHED BY THE FACT THAT IN THE ASSESSMENT YEAR 2011-12 THE ADVANCE WAS NOT TAXABLE AS INCOME WHILE COMPLETING THE ASSE SSMENT UNDER SECTION 143(3) OF THE ACT. 9. IT IS NOT THE CASE OF THE LEARNED ASSESSING OFF ICER THAT THE AGREEMENT BETWEEN THE PARTIES IS A SHAM DOCUMENT AR E THAT THE PARTIES ACTED IN VIOLATION OF THE TERMS THEREOF. IN SUCH AN EVENT WHEN THE ASSESSEE SAYS THAT THE SERVICES CORRESPONDING TO TH E AMOUNT OF RS. 3, 05, 73, 000/-RECEIVED IN ADVANCE WERE NOT RENDERED DURI NG THAT YEAR, THERE IS NO REASON FOR THE LEARNED ASSESSING OFFICER TO S USPECT THE SAME AND TO 6 BRING INTO TAX. WHEN THE TAX RATES PER THE ASSESSME NT YEAR 2011-12, 2012-13 AND 2013-14 ARE SAME, IT CANNOT BE SAID THA T IS NOT A REVENUE NEUTRAL TRANSACTION. IN THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT, IT DOES NOT FIT IN THE ORDER OF THE T HINGS THAT HAVING ACCEPTED THE OFFERING OF RS. 2.67 CRORES RECEIVED B Y THE ASSESSEE IN THE FINANCIAL YEAR 2010-11 TO TAX IN THE ASSESSMENT YEA R 2012-13 AND ALSO HAVING ACCEPTED THE OFFERING OF RS. 3.05 CRORES REC EIVED BY THE ASSESSEE IN THE FINANCIAL YEAR 2011-12 TO TAX IN THE ASSESSM ENT YEAR 2013-14, THE LEARNED ASSESSING OFFICER WOULD HAVE HELD THAT ALL THE AMOUNTS THAT WERE RECEIVED DURING THE FINANCIAL YEAR 2011-12, IRRESPE CTIVE OF THE FACT THAT CORRESPONDING SERVICES WERE RENDERED DURING THAT YE AR ARE NOT, SHOULD BE BROUGHT TO TAX IN THE ASSESSMENT YEAR 2012-13 IT SELF. 10. IN THE LIGHT OF OUR DISCUSSION IN THE FOREGOIN G PARAGRAPHS, WE HOLD THAT THE REASONING ADOPTED BY THE LD. CIT(A) AND TH E CONCLUSIONS REACHED BY HIM IN DELETING THIS AMOUNT OF RS. 3.05 CRORES W HICH IS IN FACT THE ADVANCE AMOUNT BUT RETREATED BY THE LEARNED ASSESSI NG OFFICER AS INCOME FOR THE ASSESSMENT YEAR 2012-13, ARE PERFECT LY LEGAL AND NOT WARRANT ANY INTERFERENCE. WE, ACCORDINGLY, DECLINED TO INTERFERE WITH THE SAME AND DISMISS GROUNDS 1 TO 3 REVENUES APPEAL. 11. NOW COMING TO THE 2 ND ADDITION ON ACCOUNT OF THE DISALLOWANCE OF BUSINESS PROMOTION EXPENSES, LEARNED ASSESSING OFFI CER OBSERVED THAT THE ASSESSEE COULD NOT PROVIDE ANY PROPER JUSTIFICA TION AND THE NEED FOR BUSINESS PROMOTION EXPENSES ESPECIALLY WHEN THE ASS ESSEE COMPANY IS NOT REQUIRED TO ATTRACT ANY CUSTOMERS THROUGH BUSIN ESS PROMOTION AND ITS ONLY CLIENT IS ITS HUNDRED PERCENT HOLDING COMP ANY TO WHICH IT PROVIDES MARKET INFORMATION; AND ALSO THAT THE ASSE SSEE FAILED TO FURNISH THE DETAILS RECORDING THE PERSONS TO WHOM THE GIFTS CATEGORISED AS BUSINESS PROMOTION WERE GIVEN ALONG WITH THE DETAIL S OF THE BUSINESS RELATIONS WITH SUCH PERSONS. LEARNED ASSESSING OFFI CER HOWEVER TOOK A VIEW THAT, CONSIDERING THE FACT OF OFFERING THE GIF TS ON THE FESTIVE 7 OCCASIONS OF DIWALIETC, IT IS CUSTOMARY UNDER INDIA N TRADITION, 40% OF SUCH BUSINESS PROMOTION EXPENSES COULD BE ALLOWED A ND THE REST OF THE SAME WERE TO BE DISALLOWED. 12. LD. CIT(A), IN APPEAL, FOUND THAT THE ASSESSEE HAD TO INCUR CERTAIN EXPENSES TOWARDS CUSTOMARY GIFTS ON VARIOUS OCCASIO NS TO PROCURE AND MAINTAIN ITS BUSINESS RELATIONSHIP AND ALSO IN ORDE R TO OBTAIN THE MARKET INFORMATION, CERTAIN EXPENSES WERE REQUIRED TO BE I NCURRED TOWARDS LISTENING AND ENTERTAINMENT; THAT THE ASSESSEE PROV IDED SOME OF THE BILLS TO SHOW THAT THESE EXPENSES WERE INCURRED TO BY THE GIFTS LIKE DRY FRUITS, SWEETS ETC AND ALSO PROVIDED THE LIST OF COMPANIES AND ORGANISATIONS WITH THE CATEGORY OF GIFTS AND NAME OF THE PERSONS TO WHOM THE GIFTS WERE GIVEN, THE PERUSAL OF WHICH REVEALS THAT IT WA S NOT CLEAR THAT WHAT IS THE MEANING AND RANGE OF SUCH CATEGORY FOR GIFTS AN D WHEN THE SAME WAS GIVEN. LD. CIT(A) FURTHER HELD THAT LOOKING AT THE BUSINESS EXPEDIENCY, PROVIDING CUSTOMARY GIFTS ON DIFFERENT FESTIVE OCCA SIONS TO PROCURE AND MAINTAIN GOOD RELATIONS FOR A BETTER BUSINESS ENVIR ONMENT, NATURE OF SERVICES BEING PROVIDED BY THE ASSESSEE TO ITS PARE NT COMPANY ETC 60% WAS A HIGHLY ESTIMATE OF DISALLOWANCE AND, THEREFOR E, RESTRICTED THE SAME TO 20% THEREOF. 13. LD. DR SUBMITTED THAT THE LEARNED ASSESSING OFF ICER ELABORATELY DISCUSSED THE VERACITY OF THE CLAIM MADE BY THE ASS ESSEE FILED DISALLOWING 60% OF THE EXPENSES AND IS ALSO A FACT THAT THE ASS ESSEE FAILED TO GIVE PROPER JUSTIFICATION FOR THESE EXPENSES WHEN ENTIRE SALES OR MADE ONLY TO THE PARENT COMPANY OF THE ASSESSEE. SHE FURTHER SUB MITTED THAT THEY GIFTS BY THE ASSESSEE PERHAPS WERE GIVEN TO PROCURE INSIDER INFORMATION OF THE MARKET AND COULD BE BARRED BY LAW. 14. PER CONTRA, IT IS THE SUBMISSION OF THE LD. AR THAT THE DISALLOWANCE BY BOTH THE AUTHORITIES IS ON AD HOC BASIS AND NOT IN CONSONANCE WITH ANY APPLICABLE LEGAL PROVISIONS. HE FURTHER SUBMITTED T HAT THE ORDERS OF THE 8 AUTHORITIES BELOW CLEARLY ESTABLISH THAT THE DETAIL S AND DOCUMENTS LIKE SAMPLE INVOICES, COPY OF LEDGER ACCOUNT, SUMMARY ME NTIONING CATEGORY OF GIFTS AND THE LIST OF PEOPLE TO WHOM THE GIFTS W ERE GIVEN ETC WERE FURNISHED AND WITHOUT BRINGING ON RECORD ANY OBJECT IVE MATERIAL TO SHOW THAT THERE ARE ANY DEFECTS IN THE DETAILS FURNISHED BY THE ASSESSEE, ANY DISALLOWANCE AT WHATSOEVER PERCENTAGE IS UNSUSTAINA BLE. HE FURTHER SUBMITTED THAT OFFERING GIFT IS NOT BANNED BY LAW. 15. HE FURTHER SUBMITTED THAT DURING THIS ASSESSMEN T YEAR THE ASSESSEE DERIVED A MARKUP OF COST PLUS 22.81% FROM ITS AE, EVEN BUSINESS PROMOTION EXPENSES OF RS. 83, 76, 961/-, ASSESSEE W AS COMPENSATED BY ITS AE WITH A MARKUP OF 22.81% AND, THEREFORE, THE ENTIRE EXPENSE HAS BEEN INCURRED FOR THE PURPOSE OF BUSINESS CARRIED O N BY THE ASSESSEE. 16. AT THIS STAGE THERE IS NO DISPUTE THAT THE ASSE SSEE PRODUCED THE DETAILS AND DOCUMENTS LIKE SAMPLE INVOICES, COPY OF LEDGER, SUMMARY MENTIONING THE CATEGORY OF GIFTS AND THE LIST OF PE OPLE TO WHOM GIFTS WERE GIVEN ETC WERE FURNISHED BEFORE THE AUTHORITIE S AND NO DISCREPANCIES ARE SPECIFICALLY POINTED OUT WITH ANY OF THESE DOCUMENTS. FURTHER AO HIMSELF ADMITTED THAT IT IS CUSTOMARY UN DER INDIAN TRADITION TO OFFER GIFTS ON THE FESTIVE OCCASIONS LIKE DIWALI FESTIVAL. LD. CIT(A) HELD THAT MAINTENANCE OF CORDIAL RELATIONS WITH CUSTOMER S ARE REQUIRED FOR OBTAINING THE MARKET INFORMATION WHICH IS FOR THE F URTHERANCE OF THE ASSESSEES BUSINESS. BY NO STRETCH OF IMAGINATION C OULD BE SAID THAT OFFERING OF GIFTS BY A BUSINESSMAN TO IS CUSTOMERS IS BARRED BY ANY LAW FOR THE TIME BEING IN FORCE. 17. NOW COMING TO THE QUANTUM OF DISALLOWANCE LEARN ED ASSESSING OFFICER MADE IT AT 60% WHEREASTHE LD. CIT(A) RESTRI CTED THE SAME TO 20%. AS OBSERVED BY IS ABOUT, NO DISCREPANCIES FOUND WIT H THE BOOKS OF ACCOUNTS OF THE ASSESSEE AS TO THE INCURRING OF THE SE EXPENSES OR TO SHOW THAT THERE IS ANY ILLEGALITY OF PURPOSE OF THIS EXP ENSE. IN THE ABSENCE OF 9 ANY CONCRETE BASIS TO DETERMINE THE DISALLOWANCE OF THE EXPENSE AND IN THE ABSENCE OF A SPECIFIC FINDING THAT THE EXPENSES WERE NOT EXCLUSIVELY AND FULLY FOR THE PURPOSE OF BUSINESS, WE FIND IT D IFFICULT TO SUSTAIN THE DISALLOWANCE YEAR AT 60% OR 20%. WITH THIS VIEW OF THE MATTER WE DELETE THE ADDITION MADE BY DISALLOWING THE BUSINESS PROMO TION EXPENSES. GROUND NO. 4 OF REVENUES APPEAL IS DISMISSED AND G ROUNDS OF C.O. NO ARE ALLOWED. 18. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED AND CROSS OBJECTIONS FILED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 9 TH DAY OF FEBRUARY 2021 IMMEDIATELY AFTER CONCLUSION OF THE HEARING BY WAY OF VIRTUAL MODE. SD/- SD/- (G.S. PANNU) (K. NARASIMHA CHARY) VICE-PRESIDENT JUDICIAL MEMBER DATED: 09/02/2021 AKS