A.C.I.T.-10(1), MUMBAI V. IL & FS INVESTMENT MANAGERS LTD., MUMBAI

ITA 6830/MUM/2011

• Counselvise Citation: 683019914 RSA 2011
• Duration Of Justice: 3 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 01-12-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 10-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACCHIDANAND DUBEY
• Assessee Lawyers: DILIP V LAKHANI
• Keywords: Depreciation; Business expenditure; Additional evidence; Valuation report; Commercial expediency; Capital expenditure
• Section: 32; 37

Judgement Text

1 , INCOME TAX APPELLATE TRIBUNAL,MUMBAI - I BENCH. , ,, , ! ! ! ! ' , BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER &VIV EK VARMA,JUDICIAL MEMBER ./ ITA 6289/MUM/2011 # # # # $ $ $ $ / ASSESSMENT YEAR 2007-08 IL& FS INVESTMENT MANAGERS LTD. PLOT NO.C-22,G BLOCK, BANDRA- KURLA COMPLEX, BANDRA (E), MUMBAI-400051 PAN:AAAC14829C # V/S. ADDL CIT RG 10(1) MUMBAI-20 ./ ITA 6830/MUM/2011 # # # # $ $ $ $ / ASSESSMENT YEAR 2007-08 ADDL CIT RG 10(1) MUMBAI- # V/S. IL& FS INVESTMENT MANAGERS LTD.PLOT NO.C-22, G BLOCK, BANDRA-KURLA COMPLEX, BANDRA (E), MUMBAI-400051 ./ ITA 5621/MUM/2012 # # # # $ $ $ $ / ASSESSMENT YEAR 2008-09 IL& FS INVESTMENT MANAGERS LTD. PLOT NO.C-22, G BLOCK, BANDRA- KURLA COMPLEX, BANDRA (E), MUMBAI-400051 # V/S. DCIT RG 10(1) MUMBAI-20 ./ ITA 5164/MUM/2012 # # # # $ $ $ $ / ASSESSMENT YEAR 2008-09 DCIT -10(1) MUMBAI- # V/S. IL& FS INVESTMENT MANAGERS LTD.PLOT NO.C- 22, G BLOCK, BANDRA-KURLA COMPLEX, BANDRA (E), MUMBAI-400051 ( %& / APPELLANT) ( '(%& / RESPONDENT) ASSESSEE BY :SHRI. DILIP V. LAKHANI REVENUE BY : SHRI SACCHIDANAND DUBEY # ) *+ / DATE OF HEARING : 01-12-2014 ,-$ ) *+ /DATE OF PRONOUNCEMENT : 01 -12-201 4 # # # # , 1961 ) )) ) 254(1) *.* *.* *.* *.* / / / / ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM- , # # # # : CROSS APPEALS HAVE BEEN FILED BY THE ASSESSING OFFI CER AND THE ASSESSEE FOR ABOVE REFERRED TWO ASSESSMENT YEARS.GROUNDS OF APPEAL FILED BY THE AO, FOR THE YEAR 2007-08,READ AS UNDER: 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION OF RS.89,46,348/ ON INTANGIBLE ASSETS,WITHOUT APPRECIATING THE FACT THAT THE DEPRECIATION IS NOT ALLOWABLE ON THE INTANGIBLE ASSETS AS THESE WERE IN THE NATURE OF GOODWILL. 2.ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, T HE LD.CIT(A) ERRED IN DELETING THE ADDITIONS 2 MADE ON ACCOUNT OF EXPENSES OF RS.43,53,426/-ON LEG AL AND PROFESSIONAL FEES/ REPAIRS AND MAINTENANCE EXPENSES WITHOUT APPRECIATING THE FACT THAT AS PER RULE 46A OF IT.ACT,THE CIT(A) HAS NO POWER TO TAKE ADDITIONAL EVIDENCE WITHOUT GIVING AN OPPORTUNITY TO THE A.O. 3.ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, T HE LD.CIT(A) ERRED IN DELETING ADDITIONS MADE ON ACCOUNT OF EXPENSES OF RS.45,65,435/-WITHOUT APP RECIATING FACTS THAT THE EXPENSES BORNE BY THE COMPANY WERE ON ACCOUNT OF A THIRD PARTY. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUNDS OR ADD A NEW-GROUND WHICH MAY BE NECESSARY. ITA 6830/MUM/2011 THE ASSESSEE HAS FILED FOLLOWING GROUNDS OF APPEAL FOR THE AY.2007-08: 1)ON THE FACTS & CIRCUMSTANCES OF THE CASE THE LEAR NED COMMISSIONER OF INCOME TAX (APPEALS)HAS ERRED IN CONCLUDING THAT THE APPELLANT IS NOT ENTITLED TO DEPRECIATION ON THE WRITTEN DOWN VALUE OF THE GOODWILL,WHOSE ORIGINAL COST OF A CQUISITION IN ASSESSMENT YEAR 2003-04 IS 82.30 LACS.THE APPELLANT SUBMITS THAT THE CONCLUSIO N REACHED BY THE LEARNED COMMISSIONER OF INCOME TAX IS ERRONEOUS AND IS CONTRARY TO THE PROV ISIONS OF LAW. 2)THE APPELLANT PRAYS THAT THEY ARE ENTITLED TO CLA IM DEPRECIATION ON THE WRITTEN DOWN VALUE OF THE GOODWILL FOR A.Y. 2007-08 IS RS.651,006/-. 3)ON THE FACTS & CIRCUMSTANCES OF THE CASE THE APPE LLANT SUBMIT THAT THEY ARE ENTITLED TO THE DEPRECIATION ON THE WRITTEN DOWN VALUE OF THE GOODW ILL IN ASSESSMENT YEAR 2007-08. THE APPELLANT PRAYS THAT DEPRECIATION OF RS.651,006/-MA YBE ALLOWED. 4)ON THE FACTS & CIRCUMSTANCES OF THE CASE THE LEAR NED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF CLUB ME MBERSHIP FEES OF RS.3,35, 336/-.THE APPELLANT PRAYS THAT THEY ARE ENTITLED TO DEDUCTION OF RS.3,3 5,336/-AND THE DISALLOWANCE MADE BY THE LEARNED COMMISSIONER OF INCOME TAX MAY BE DELETED. 5)ON THE FACTS & CIRCUMSTANCES OF THE CASE THE LEAR NED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.98,5 8,720/- BEING THE COST OF COMPENSATION IN RELATION TO ESOP SCHEME. THE APPELLANT PRAYS THAT T HEY ARE ENTITLED TO DEDUCTION OF RS.98,58,720/- AND THE DISALLOWANCE MADE BY THE LEA RNED COMMR. OF INCOME TAX (APPEALS) MAY BE DELETED. 6)THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND THE GROUNDS OF APPEAL WHICH ARE WITHOUT PREJUDICE TO ONE OTHER. ITA/5164/MUM/2012-AY.2008-09 GROUNDS OF APPEAL FILED BY THE AO FOR THE AY.2008-0 9 READ AS UNDER: 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) ERRED IN DIRECTING THE A.O. TO VERIFY THE CLAIM OF THE ASSESSEE AND ALLOW DEPRECIA TION ON INTANGIBLE ASSETS INCLUDING GOODWILL. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY G ROUNDS OR ADD A NEW-GROUND WHICH MAY BE NECESSARY. ITA/5621/MUM/2011-AY.2008-09 THE ASSESSEE HAS FILED FOLLOWING GROUNDS : 1)ON THE FACTS & CIRCUMSTANCES OF THE CASE THE LEAR NED COMMISSIONER OF INCOME TAX (APPEALS)HAS ERRED IN CONCLUDING THAT THE APPELLANT IS NOT ENTITLED TO DEPRECIATION ON THE WRITTEN DOWN VALUE OF THE GOODWILL,WHOSE ORIGINAL COST OF A CQUISITION IN ASSESSMENT YEAR 2003-04 IS 82.30 LACS.THE APPELLANT SUBMITS THAT THE CONCLUSIO N REACHED BY THE LEARNED COMMISSIONER OF INCOME TAX IS ERRONEOUS AND IS CONTRARY TO THE PROV ISIONS OF LAW. 2)THE APPELLANT PRAYS THAT THEY ARE ENTITLED TO CLA IM DEPRECIATION ON THE WRITTEN DOWN VALUE OF 3 THE GOODWILL FOR A.Y. 2008-09 IS RS.4,88,254/-. 3)ON THE FACTS & CIRCUMSTANCES OF THE CASE THE APPE LLANT SUBMIT THAT THEY ARE ENTITLED TO THE DEPRECIATION ON THE WRITTEN DOWN VALUE OF THE GOODW ILL IN ASSESSMENT YEAR 2007-08. THE APPELLANT PRAYS THAT DEPRECIATION OF RS. 4,88,254/- MAYBE ALLOWED. 4)ON THE FACTS & CIRCUMSTANCES OF THE CASE THE LEAR NED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF CLUB ME MBERSHIP FEES OF RS.8,02,744/-.THE APPELLANT PRAYS THAT THEY ARE ENTITLED TO DEDUCTION OF RS. 8, 02,744/-AND THE DISALLOWANCE MADE BY THE LEARNED COMMISSIONER OF INCOME TAX MAY BE DELETED. 5)ON THE FACTS & CIRCUMSTANCES OF THE CASE THE LEAR NED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.16,3 7,780/- BEING THE COST OF COMPENSATION IN RELATION TO ESOP SCHEME. THE APPELLANT PRAYS THAT T HEY ARE ENTITLED TO DEDUCTION OF RS. 16,37,780/-AND THE DISALLOWANCE MADE BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) MAY BE DELETED. 6) ON THE FACTS & CIRCUMSTANCES OF THE CASE THE LEA RNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE LEVY OF INTEREST U/S.23 4B.THE APPELLANT DENIES THE LIABILITY FOR PAYMENT OF INTEREST ON THE FACTS OF THE CASE.THE AP PELLANT PRAYS THAT INTEREST U/S.234B MAY BE DELETED. 7)THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND THE GROUNDS OF APPEAL WHICH ARE WITHOUT PREJUDICE TO ONE OTHER. ASSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF ASSE T MANAGEMENT FOR VENTURE CAPITAL AND PRIVATE EQUITY FUNDS.DETAILS OF DATES OF FILING OF RETURNS,INCOMES RETURNED, DATES OF ASSESSMENT, ASSESSED INCOMES,DATES OF ORDERS OF THE CIT(A)CAN B E SUMMARISED AS UNDER : AY. DT.OF FILING OF RETURN RETURNED INCOME (RS.) DATE OF ASSESSMENT ASSESSED INCOME DT. OF ORDERS OF CIT(A) 2007-08 24.10.2007 28,71,42,514/- 28.12.2010 32,00, 33,080/- 26.07.2011 2008-09 29.09.2008 44,86,87,260/- 23.12.2011 45,85, 78,611/- 02.05.2012 ITA/6289/MUM/2011AY.2007-08 2. FIRST GROUND OF APPEAL DEALS WITH DISALLOWANCE OF D EPRECIATION OF RS.89,46,348/- ON INTANGIBLE ASSETS.DURING THE HEARING BEFORE US,REPRESENTATIVES OF BOTH THE SIDES AGREED THAT ISSUE OF DISALLOWANCE OF DEPRECIATION ON INTANGIBLE ASSETS W AS DECIDED BY THE TRIBUNAL IN EARLIER AY.S.IN FAVOUR OF THE ASSESSEE.WE FIND THAT WHILE ADJUDICAT ING APPEALS FOR THE AY.S.2003-04.2004-05, 2005-06 AND 2006-07(ITA/3146-48&5466/MUM/2010-DATED 03.06.2014) I BENCH OF THE MUMBAI TRIBUNAL HAS DELIBERATED AND DECIDED THE ISSUE AS U NDER: 2.THE COMMON ISSUE INVOLVED IN THE ASSESSEES APPEAL PERTAINS TO THE ALLOWABILITY OF DEPRECIATION ON THE VALUE OF GOODWILL AMOUNTI NG TO RS.82.30 LAKHS.THE RELEVANT FACTS ARE THAT THE ASSESSEE VIDE TRANSFER AGREEMENT DAT ED 12TH APRIL,2002 HAD PURCHASED ASSETS I.E., BUSINESS FROM ITS ASSOCIATE CONCERN.AFTER THE PURCHASE/TRANSFER OF THE BUSINESS ASSET, THE ASSESSEE HAD CLAIMED THE DEPRECIATION @ 25% OF 11.13 CRORES,BEING THE VALUE FOR ASSET MANAGEMENT RIGHTS/INTANGIBLE ASSETS WHICH INCLUDED THE CLAIM OF DEPRECIATION ON THE VALUE OF GOODWILL AMOUNTING TO RS.82.30 CRORES ON THE BASI S OF THE VALUATION REPORT FROM M/S. SSPA & COMPANY OBTAINED BY THE ASSESSEE. IN THE ASSESSMENT FRAMED,THE AO WHILE NOT ACCEPTING THE VALUATION REPORT FILED BY THE ASSESSEE, REJECTED TH E CLAIM OF DEPRECIATION.ON APPEAL, LD.CIT(A) WHILE ACCEPTING THE VALUATION REPORT, HAS DENI ED THE DEPRECIATION ON GOODWILL FOR THE REASON THAT GOODWILL IS NOT LISTED IN THE SIX ITEMS MENTIONED,NAMELY KNOW-HOW, PATENT, COPYRIGHTS,TRADEMARKS, LICENSES, FRANCHISES, IN CLA USE (II)OF SECTION 32(1).ACCORDING TO THE LD. CIT(A),THE ASSET GOODWILL WAS NOT A BUSINESS OR C OMMERCIAL RIGHTS SIMILAR IN NATURE TO SIX ITEMS MENTIONED IN CLAUSE (II) OF SECTION 32(1) OF THE AC T. THEREFORE, THE CONSIDERATION PAID BY THE ASSESSEE AT RS.82.30 LAKHS AS VALUED BY THE VALUER WAS NOT ELIGIBLE FOR DEPRECIATION. 4 3.HAVING HEARD BOTH THE SIDES AND PERUSED THE MATER IAL ON RECORD ON THE ISSUE OF ALLOWABILITY OF DEPRECIATION ON GOODWILL, IT IS PERTINENT TO MENTIO N THAT THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SMIFS SECURITIES LTD. [2012] 24 TAXMA NN.COM 222(SC)HAS HELD THAT EXPLANATION 3 TO SECTION 32 STATES THAT THE EXPRESSION ASS ET SHALL MEAN INTANGIBLE ASSET BEING KNOW-HOW, COPYRIGHTS,TRADE-MARKS,LICENSES,FRANCHISES OR ANY O THER BUSINESS ARE COMMERCIAL RIGHTS OF SIMILAR NATURE. THE WORDS ANY OTHER BUSINESS OR COMMER CIAL RIGHTS OF SIMILAR NATURE STATED IN EXPLANATION 3 INCLUDES THAT GOODWILL WOULD F ALL UNDER THE EXPRESSION ANY OTHER BUSINESS OF COMMERCIAL RIGHTS OF A SIMILAR NATURE. F URTHER, THE PRINCIPLE OF EJUSDEM GENERIS WOULD STRICTLY APPLY WHILE INTERPRETING THE S AID EXPRESSION WHICH FIND PLACE IN EXPLANATION 3(B).CONSEQUENTLY, GOODWILL IS AN ASSET UNDER THE EXPLANATION 3(B) TO SECTION 32(1) AND ELIGIBLE FOR THE DEPRECIATION.IN VIEW OF THIS SET TLED LEGAL POSITION,WE ARE OF THE CONSIDERED VIEW THAT THE LD.CIT(A) IS NOT JUSTIFIED IN D ENYING THE BENEFIT OF DEPRECIATION CLAIMED BY THE ASSESSEE ON THE GOODWILL. ACCORDINGLY, WE DIRECT THE AO TO ALLOW CLAIM OF DEPRECIA - TION ON THE GOODWILL IN ALL THE FOUR ASSESSME NT YEARS IN WHICH THE SAID ISSUE IS INVOLVED. RESPECTFULLY,FOLLOWING THE ORDER OF THE TRIBUNAL FO R EARLIER YEARS,WE DECIDE GROUND NO.1AGAISNT THE AO. 3. SECOND GROUND OF APPEAL PERTAINS TO ADDITIONS MADE ON ACCOUNT OF EXPENSES OF RS.43,53,426/- ON LEGAL AND PROFESSIONAL FEES/REPAIRS AND MAINTENA NCE EXPENSES.DURING THE ASSESSMENT PROCEED - INGS,THE AO FOUND THAT THE ASSESSEE HAD CLAIMED CER TAIN LEGAL AND PROFESSIONAL FEES/REPAIRS AND MISCELLANEOUS EXPENSES.FORM THE DETAILS OF LEGAL AN D PROFESSIONAL FEES/REPAIRS AND MISCELLANEOUS EXPENSES, THE AO NOTICED THAT THESE EXPENSES INCLUD ED CERTAIN PROVISION WHICH WERE NOT ADDED BY THE ASSESSEE IN DETERMINING THE INCOME.HE ASKED THE ASSESSEE TO JUSTIFY THE ALLOWABILITY OF EXPENSES.THE ASSESSEE SUBMITTED ITS REPLY DT.03.12. 2010 FURNISHING AGAIN THE DETAILS OF EXPENSES BY STATING THAT EVERY EXPENDITURE INCURRED WAS REVE NUE IN NATURE AND INCURRED FOR THE PURPOSES OF BUSINESS.THE AO WAS NOT SATISFIED WITH ASSESSEES S UBMISSIONS.HE HELD THAT AS PER THE ACT PROVISIONS WERE NOT ALLOWABLE AS DEDUCTION,THAT THE ASSESSEE HAD NOT EXPLAINED WHETHER THE PROVISIONS WERE ACTUALLY INCURRED.FINALLY,THE AO MA DE DISALLOWANCE OF RS.43.54 LACS. 3.1. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA).DURING APPELLATE PROCEEDINGS,THE ASS ESSEE EXPLAINED THAT DURING ASSESSMENT PROCEEDINGS, THE DETAILS WERE FURNISHED TO THE AO,T HAT THE ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING,THAT THE EXPENDITURE INCURRED FOR A.Y.2007-08 HAD TO BE ACCOUNTED IN THE BOOKS OF ACCOUNTS UNDER THE RESPECTIVE HEAD,THAT TH E ASSESSEE HAD GIVEN THE WORKING OF PROVISIONS MADE IN RESPECT OF LEGAL & PROFESSIONAL EXPENSES,REPAIRS & MAINTENANCE EXPENSES, AUDIT FEE AND THE EXPENDITURE TO BE PAID TO REGISTR AR FOR PROVIDING SERVICES.DURING APPELLATE PROCEEDINGS THE ASSESSEE AGAIN SUBMITTED THE DETAIL S OF PROVISIONS ALONGWITH THE INVOICES ON THE BASIS OF WHICH THE PROVISIONS WERE MADE.IT WAS FURT HER EXPLAINED THAT EACH AND EVERY EXPENDITURE WAS SUPPORTED WITH INVOICES AND WAS INC URRED PRIOR TO 31ST MARCH, 2007,THAT THE AO IGNORED THE FACT THAT THE EXPENDITURE INCURRED WAS RELEVANT TO AY.2007-08,THAT THE ASSESSEE HAD RIGHTLY MADE THE PROVISIONS IN THE BOOKS OF ACCOUNT ON 31.03.2007,THAT THE DISALLOWANCE MADE WERE IDENTICAL TO THE ISSUES IN THE EARLIER YEARS W HEREIN THE SAME HAS BEEN DELETED IN THE APPELLATE PROCEEDINGS. 3.2. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE A ND ASSESSMENT ORDER,THE FAA HELD THAT THE ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNT ING,THAT AS PER MERCANTILE SYSTEM OF ACCOUNTING EXPENDITURE PERTAINING TO THE YEAR UNDER CONSIDERATION WAS REQUIRED TO BOOKED IN THE SAME YEAR IRRESPECTIVE OF THE BILLS/INVOICES FOR TH E SAME MIGHT HAVE BEEN RECEIVED IN SUBSEQUENT 5 YEAR,IT THE GOODS/SERVICES HAD BEEN RECEIVED DURING THE YEAR AND THE BILLS/INVOICES HAD NOT BEEN RECEIVED THE EXPENSES WERE REQUIRED TO BE BOOKED ON PROVISION BASIS,THAT THE ASSESSEE HAD FURNISHED THE INVOICES DURING THE ASSESSMENT AND AP PELLATE PROCEEDINGS,THAT EVERY PROVISION WAS SUPPORTED BY INVOICES,THAT INVOICES PROVED THAT EXP ENSES WERE INCURRED FOR SERVICES GOODS OBTAINED FOR THE YEAR,THAT BILLS WERE NOT RECEIVED DURING THE YEAR,THAT THE ASSESSEE WAS JUSTIFIED IN CLAIMING THE EXPENDITURE ABOUT THE PROVISIONS.HE DE LETED THE ADDITION MADE BY THE AO. 3.3. BEFORE US,THE DEPARTMENTAL REPRESENTATIVE(DR)SUPPOR TED THE ORDER OF THE AO.AUTHORISED REPRESENTATIVE(AR) STATED THAT THE ASSESSEE HAD FUR NISHED ALL THE DETAILS BEFORE BOTH THE AUTHORITIES. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL.WE FIND THAT THE ASSESSEE HAD FILED NOT ONLY THE BILLS AND INVOICES ABOUT THE SERVICES AVAILED OR GOODS RECEIVED,BUT IT HAD MADE THE CLAIM AS PER THE SYSTEM OF ACCOUNTING FOLLOWED BY I T REGUALRY.ON A SPECIFIC QUERY BY THE BENCH THE DR COULD NOT PIN POINT THE MATERIAL THAT WAS AD MITTED BY THE FAA IN VIOLATION OF RULE 46 A OF THE ACT.THE ACT ALLOWS DEDUCTION FOR PROVISION M ADE FOR THE EXPENSES OF A PARTICULAR YEAR,IF THE BILLS ARE RECEIVED AFTER THE EXPIRY OF THE AY.C ONCERNED.IT IS A NORMAL BUSINESS PRACTICE THAT IN MANY A CASES BILLS/INVOICES ARE RECEIVED AFTER THE YEAR IS OVER BUT THE GOOD AND SERVICES ARE AVAILED OR RECEIVED BEFORE THE YEAR END.NO DISALLOW ANCE CAN BE MADE ONLY BECAUSE THE ASSESSEE MAKES PROVISIONS. IN THE CASE UNDER CONSIDERATION E ACH AND EVERY PROVISION WAS SUPPORTED BY INVOICES,AS STATED BY THE FAA.CONSIDERING THE FINDI NG OF FACT GIVEN BY THE FAA,WE ARE OF THE OPINION THAT HE HAD RIGHTLY REVERSED THE ORDER OF T HE AO.CONFIRMING HIS ORDER,WE DECIDE GROUND NO.2 AGAINST THE AO. 4. LAST GROUND OF APPEAL,FILED BY THE AO,IS ABOUT ADDI TIONS MADE ON ACCOUNT OF EXPENSES OF RS. 45,65,435/-.DURING THE ASSESSMENT PROCEEDINGS,THE A O FOUND THAT THE ASSESSEE HAD DEBITED AMOUNT OF RS.45,65,435/-ON ACCOUNT OF REIMBURSEMENT OF FUND SET UP EXPENSES.HE ASKED THE ASSESSEE AS TO WHY THE SAME SHOULD NOT BE DISALLOWE D.THE ASSESSEE EXPLAINED TO THE AO THAT IN FY.2006-07, THE COMPANY HAD ESTABLISHED A PRIVATE E QUITY REALITY FUND WITH AGGREGATE COMMITMENT OF RS.310 CRORES,THAT THE INVESTOR TO TH E FUNDS WERE DOMESTIC INSTITUTIONAL INVESTORS AND COMMERCIAL BANKS,THAT LIC MADE A COMMITMENT OF RS. 100 CRORES AND IN TERMS OF ARRANGEMENT WITH LIC IT AGREED TO PAY LIC ITS PRORA TA SHARE OF FUND SET UP COST IN EXCESS OF 1% OF ITS COMMITMENT TO THE FUND.THE AO DID NOT AGREE WITH THE ASSESSEES SUBMISSIONS.HE HELD THAT THE ASSESSEE WAS AN INVESTMENT MANAGER BY VIRTUE OF WHICH IT SET UP A FUND,THAT ON THE BASIS OF FUND MANAGEMENT IT GOT ITS INCOME,THAT THOUGH THE I NCOME OF ASSESSEE WAS LINKED WITH THE FUND BUT IT DID NOT MEAN THAT THE COMPANY COULD BEAR THE EXPENSES OF SOME THIRD PARTIES FOR THIS PURPOSE,THAT THE AMOUNT OF RS.45.65 LAKHS INCURRED BY ASSESSEE WAS AN EXPENSE OF LIC WHICH WAS PAID TO THE LIC BY THE COMPANY BY A SPECIAL ARR ANGEMENT BETWEEN LIC AND ASSESSEE,THAT THE SAID EXPENSE WAS NOWHERE DIRECTLY OR INDIRECTLY REL ATED TO EXPENDITURE INCURRED BY THE ASSESSEE IN ITS NORMAL COURSE OF BUSINESS.ACCORDINGLY,HE DISALL OWED THE CLAIM OF EXPENDITURE OF RS.45, 65, 435/-. 4.1. IN THE APPELLATE PROCEEDINGS, DURING APPELLATE PROC EEDINGS, THE ASSESSEE CONTENDED BEFORE THE FAA THAT IT WAS ENGAGED IN THE BUSINESS OF PROVIDIN G ADVISORY SERVICES TO VARIOUS FUNDS AND EARNED ADVISORY FEES,THAT ONE NEW FUND VIZ. INFRAST RUCTURE LEASING AND FINANCIAL SERVICES REALITY FUND WAS TO BE SET UP WITH THE TOTAL COST OF RS.310 CRORES,THAT FOR SETTING UP THE SAID FUND THE EXPENDITURE UNDER DIFFERENT HEADS WERE TO BE INCURR ED AND FOR SETTING UP OF THAT PARTICULAR FUND 6 THE TOTAL EXPENDITURE INCURRED WAS RS.4,51,52,850/- ,THAT THE LIC AGREED TO CONTRIBUTE RS.100 CRORES AND THE PRORATE SET UP COST TO BE BORNE BY T HEM WAS RS. 1.45 CRORES,THAT THE TOTAL FUND SET UP COST WAS RS.4.52 CRORES AND PRORATE SHARE OF LIC WAS RS.1.52 CRORES,THAT LIC AGREED TO BEAR THE FUND SET UP COST AT 1% OF THE CORPUS TO BE CONT RIBUTED BY THEM AND EXCESS AMOUNT WAS TO BE BORNE BY THE ASSESSEE,THAT AS PER THE ARRANGEMENT W ITH LIC THE ASSESSEE-COMPANY PAID RS.45 LAKHS TO LIC,THAT THE AMOUNT IN QUESTION WAS ELIGIB LE FOR DEDUCTION U/S. 37 ON THE BASIS OF COMMERCIAL EXPEDIENCY.IT WAS FURTHER ARGUED THAT TH E ASSESSEE WAS ENTITLED TO THE MANAGEMENT FEES OF 2% OF THE CORPUS AMOUNT,THAT IF LIC WOULD N OT HAVE INVESTED RS.100 CRORES THE FUND SIZE WOULD HAVE BEEN REDUCED TO RS.210 CRORES,THAT THE A SSESSEE EARNED THE FEES AT 2% ON RS.100 CRORES CONTRIBUTED BY LIC.THE ASSESSEE FILED DETAIL S OF TOTAL FEES WHICH IT HAD EARNED FROM SUCH FUND FROM A.Y.2007-08 TO 2009-10.IT WAS EXPLAINED T HAT IT WAS A COMMERCIAL DECISION OF THE ASSESSEE TO BEAR THE EXPENSE OF RS.45,65,435/-AS IT HAD EARNED SUBSTANTIAL INCOME BY WAY OF ADVISORY FEES. THE FAA AFTER CONSIDERING THE FACTS OF THE CASE,HEL D THAT AS PER AGREEMENT THE LIC HAD AGREED TO BEAR THE COST AT RS. 1.45 CRORE ONLY,THAT THE BALAN CE EXPENSES OF RS.45,65,435/- WAS TO BE REIMBURSED BY THE ASSESSEE TO THE LIC,THAT THE ASSE SSEE WAS ENGAGED IN THE BUSINESS OF PROVIDING ADVISORY SERVICES TO VARIOUS FUNDS AND WAS EARNING INCOME BY WAY OF ADVISORY FEE FROM THOSE FUNDS,THAT THE EXCESS AMOUNT WERE REIMBURSED TO THE LIC ON ACCOUNT OF COMMERCIAL EXPEDIENCY, THAT THE EXPENSES WERE BORNE BY ASSESSEE KEEPING IN VIEW THE FUTURE INCOME GENERATION POTENTIAL OF THE FUND,THAT THE ASSESSEES ONE OF SOURCE OF IN COME WAS ADVISORY FEE RECEIVED FROM THE FUNDS SO SET UP,THAT FROM THE FUND SET UP IT EARNED ADVIS ORY FEE @ 2%DURING THE YEAR AS WELL AS IN SUBSEQUENT YEARS,THAT IN AY.2007-08 TO 2009-10 IT H AD EARNED INCOME OF MORE THAN RS.10 CRORES ON THE CONTRIBUTION MADE BY LIC,THAT EXPENDITURE WA S INCURRED FOR EARNING INCOME WERE ALLOWABLE ON THE PRINCIPLE OF COMMERCIAL EXPEDIENCY ,THAT EXPENSES WERE NOT OF CAPITAL NATURE.AS A RESULT,THE FAA HELD THAT THE EXPENDITURE WAS AN A LLOWABLE ITEM. 4.2. BEFORE US,THE DR ARGUED THAT THERE WAS NO JUSTIFICA TION IN MAKING PAYMENT TO LIC,THAT THE ASSESSEE HAD MADE PAYMENT TO DISCHARGE THE BURDEN O F THE THIRD PARTY,THAT THERE WAS NO DIRECT RELATION BETWEEN THE EXPENDITURE INCURRED BY THE AS SESSEE AND THE BUSINESS CARRIED OUT BY IT.AR SUPPORTED THE ORDER OF THE FAA. WE HAVE HEARD THE RIVAL SUBMISSIONS.UNDISPUTED FACT S OF THE CASE ARE THAT THE ASSESSEE HAD,AS PER AN AGREEMENT WITH LIC,COMMITTED TO INCUR CERTAIN EX PENDITURE,THAT IT WAS EARNING INCOME FROM ITS ADVISORY SERVIES,THAT THE INCOME WAS OFFERED FO R TAXATION,THAT LIC PAID ONLY PART OF THE EXPENDITURE INCURRED AND THE BALANCE WAS PAID BY TH E ASSESSEE.IN OUR OPINION,IT WAS A PURE AND SIMPLE BUSINESS DECISION,THAT IT HAD DIRECT NEXUS W ITH THE BUSINESS OF THE ASSESSEE CARRIED OUT DURING YEAR UNDER CONSIDERATION.COURTS ENVISAGE THA T ALLOWABILITY OF AN EXPENDITURE IS TO BE DECIDED FROM THE POINT OF VIEW OF THE ASSESSEE,AS T HE ASSESSEE IS THE RIGHT PERSON TO DECIDE WHETHER TO INCUR ANY EXPENDITURE OR NOT.THE DISPUTE D SUM WAS NOT CAPITAL IN NATURE NOR THE PAYMENT WAS PROHIBITED BY THE PROVISION OF LAW.THER E IS NO EVIDENCE THAT IT WAS NOT INCURRED WHOLLY AND EXCLUSIVELY FOR THE BUSINESS OF THE ASSE SSEE.THE AO WANTS TO TAX THE INCOME OF THE ACTIVITY,BUT DOES NOT WANT TO ALLOW THE EXPENDITURE INCURRED BY IT.IT IS AGAINST THE CANONS OF ESTABLISHED TAXATION LAWS.THEREFORE,WE ARE OF THE O PINION THAT THE FAA HAD RIGHTLY ALLOWED THE EXPENDITURE IN QUESTION.CONFIRMING HIS ORDRE,WE DEC IDE GROUND NO.3 AGAINST THE AO. ITA/6830/MUM/2011AY.2007-08 5. FIRST THREE GROUNDS OF APPEAL(GOA 1-3),FILED BY THE ASSESSEE ARE ABOUT DEPRECIATION ON THE WRITTEN DOWN VALUE OF THE GOODWILL.BEFORE US,BOTH T HE REPRESENTATIVE AGREED THAT THE ISSUE HAD 7 DIRECT NEXUS WITH THE GROUND NO.1 FILED BY THE AO.W HILE DECIDING THE DEPARTMENTAL APPEAL WE HAVE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE.IN OUR OPINION THE FAA WAS NOT JUSTIFIED IN RESTRICTING THE DEPRECIATION FOR THE YEAR UNDER APP EAL.THE WDV OF THE ASSETS FOR THE INITIAL YEAR WAS 82.30 LACS AND THE WDV FOR THE YEAR HAS TO CALC ULATED AFTER CONSIDERING THE ABOVE FIGURE.AO IS DIRECTED TO CALCULATE THE DEPRECIATION ACCORDING LY.GROUNDS NO.1 TO 3 ARE DECIDED IN FAVOUR OF THE ASSESSEE. 6. NEXT GROUND OF APPEAL(GOA.4)PERTAINS TO DISALLOWANC E OF CLUB MEMBERSHIP FEES OF RS.3,35, 336/-.DURING THE ASSESSMENT PROCEEDINGS,THE AO FOUN D THAT ASSESSEE HAD DEBITED RS.2.06 LAKHS TO THE P & L ACCOUNT FOR ENTRANCE FEE AND SUBSCRIPT ION,THAT RS.2.46 LAKHS WERE CLAIMED UNDER THE HEAD COST FOR CLUB SERVICES AND FACILITIES USED.THE AO HELD THAT THE ASSESSEE WAS NOT ABLE TO ESTABLISH THAT CLUB MEMBERSHIP AND RESULTED IN PROM OTION OF ITS BUSINESS.HE DISALLOWED THE CLAIM MADE BY THE ASSESSEE. 6.1. IN THE APPELLATE PROCEEDINGS THE FAA,AFTER CONSIDER ING THE SUBMISSIONS OF THE ASSESSEE AND THE ASSESSMENT ORDER,HELD THAT THE ASSESSEE HAS PAI D RS.2.35 LAKHS AS MEMBERSHIP FEE OF ROYAL PALMS KARNATAKA GOLF MIG,THAT RS.1 LAKHS WERE PAID FOR MEMBERSHIP OF BOMBAY GYMKHANA,THAT AMOUNT PAID FOR OBTAINING MEMBERSHIP OF CLUB GIVES BENEFIT OF ENDURING NATURE TO THE BENEFICIARY,THAT THE EXPENDITURE INCURRED BY THE ASSESSEE WAS CAPITAL IN NATURE.REST OF THE EXPENSES WERE ALLOWED BY THE FAA AS REVENUE EXPENDI TURE. 6.2. BEFORE US,THE AR STATED THAT MEMBERSHIP OF CLUBS HE LP THE ASSESSEE TO CULTIVATE BUSINESS RELATIONSHIP FOR LATTER BUSINESS OPERATIONS,THAT OB JECT OF EXPENDITURE WAS TO PROMOTE BUSINESS,THAT THE EXPENDITURE WAS ALLOWABLE U/S.37 OF THE ACT.HE RELIED UPON THE JUDGMENT OF THE HONBLE APEX COURT DELIVERED IN THE CASE OF UNITED GLASS MF G CO.LTD.(APPEAL NO.6447/2012 DTD. 12. 09.2012),WHEREIN CLUB MEMBERSHIP EXPENSES HAD BEEN ALLOWED AS BUSINESS EXPENDITURE.DR SUPPORTED THE ORDER OF THE FAA. 6.3. HAVING HEARD THE RIVAL SUBMISSIONS,WE ARE OF THE OP INION,THAT THE ISSUE OF EXPENDITURE INCURRED BY AN ASSESSEE FOR CLUB MEMBERSHIP FOR ITS EMPLOYEES HAD BEEN DECIDED BY THE HONBLE SUPREME COURT IN THE CASE OF UNITED GLASS MFG CO.LT D.(SUPRA)CONCLUSIVELY.RESPECTFULLY FOLLOWING THE SAME AND REVERSING THE ORDER OF THE F AA,WE DECIDE GROUND NO.4 IN FAVOUR OF THE ASSESSEE. 7. LAST GROUND OF APPEAL (GOA-5)IS ABOUT THE DISALLOWA NCE OF RS.98,58,720/- BEING THE COST OF COMPENSATION IN RELATION TO EMPLOYEE STOCK OPTION ( ESOP)SCHEME.THE FACTS OF THE CASE WERE THE THAT FROM TAX AUDIT REPORT THE AO NOTICED THAT AN AMOUNT RS.98,58,720/-WAS SHOWN AS AMORTISATION OF STOCK BASED COMPENSATION DEBITED BY ASSESSEE IN THE P&L ACCOUNT AS PER SEBI GUIDELINES.THE AO INTENDED TO TREAT THE SAID EXPEND ITURE AS CAPITAL IN NATURE.AFTER CONSIDERING THE RESPONSE OF THE ASSESSEE,IN THAT REGARD,HE HELD THAT IN THE SCHEME OF ESOPS THE COMPANY WOULD GIVE AN OPTION TO ITS EMPLOYEES TO PURCHASE T HE SECURITY AT THE PRICE LOWER THAN THE MARKET PRICE,THAT AS PER SCHEME THE DIFFERENCE BETWEEN THE EXERCISE VALUE AND THE MARKET VALUE WAS PAID BY THE COMPANY,THAT IT WOULD LEAD TO THE CHANGE IN NUMBER OF SHARES OR THE SHARE CAPITAL,THAT SUCH A CHANGE DIRECTLY AFFECTED THE CAPITAL OF THE COMPANY,THAT RESULTANT EFFECT SHOULD BE SHOWN IN THE BALANCE SHEET AND NOT IN THE P&L ACCOUNT,THA T THE EXPENDITURE WAS CAPITAL IN NATURE WHICH WAS NOT ALLOWABLE AS PER PROVISIONS OF THE ACT.HE R ELIED UPON THE DECISIONS OF SUPREME COURT IN 8 THE CASES OF BROOKE BOND INDIA LTD.(225 ITR 798),HI NDUSTAN INSECTICIDES LTD.(250ITR338)AND PUNJAB STATE NATIONAL DEVELOPMENT CORPORATION(225IT R792)IN HOLDING THAT ANY AMOUNTS SPENT FOR CHANGE IN CAPITAL WAS A CAPITAL EXPENDITURE.FIN ALLY,THE AO DISALLOWED ASSESSEES CLAIM OF EXPENSE OF RS.98.58 LAKHS. 7.1. DURING APPELLATE PROCEEDINGS, THE ASSESSEE ARGUED T HAT THE AMOUNT OF RS.98,58,720/- WAS AN ALLOWABLE DEDUCTION,THAT THE SCHEME OF ESOP WAS IMP LEMENTED FOR ITS EMPLOYEES AND DIRECTORS IN ACCORDANCE WITH THE SEBI GUIDELINES,THAT ESOP WA S AN EMPLOYEE COMPENSATION SCHEME INTENDED TO INCULCATE A SENSE OF BELONGINGS AND FEE LING OF OWNERSHIP IN THE EMPLOYEES,THAT IN SUCH CASES THE ASSESSEE WOULD GRANTS OPTION TO EMPL OYEES/DIRECTORS TO EXERCISE PRICE OF WHICH WAS LOWER THAN THE MARKET PRICE AS ON THE DATE OF G RANT,THAT THE DIFFERENCE WAS REQUIRED TO BE ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS AND AMORTISE D AS EMPLOYEE COMPENSATION OVER THE VESTING PERIOD OF SUCH OPTION,THAT ESOPS WERE GIVEN TO THE EMPLOYEE AS A PART OF REMUNERATION PACKAGE WHICH HELPED EMPLOYEES RETENTION IN THE COMPANY. AFTER CONSIDERING THE ASSESSMENT ORDER AND THE SUBM ISSIONS OF THE ASSESSEE,THE FAA HELD THAT DURING THE YEAR THE ASSESSEE HAD GRANTED ESOPS TO I TS EMPLOYEES/DIRECTORS,THAT THE MARKET PRICE OF SHARES AS ON DATE OF GRANT WAS RS.106 PER SHARE, THAT AS PER ESOP SCHEME THE ASSESSEE GRANTED SHARES TO ITS EMPLOYEES/ DIRECTORS @ RS.36 PER SHARE,THAT THE DIFFERENCE IN MARKET PRICE AND GRANT PRICE WAS RS.70/-PER SHARE,THAT THE VALUE OF SUCH B ENEFIT TO THE EMPLOYEES (I.E. DIFFERENCE BETWEEN MARKET PRICE AND GRANT PRICE OF SHARES)WAS AT RS.1.14CRORES WHICH WAS AMORTISED DURING THE YEAR AT RS.98,58,720/- AND DEBITED TO P&L ACCOU NT,THAT THE ASSESSEE HAD NOT INCURRED EXPENDITURE OF RS.98,58,720/-,THAT THE AMOUNT REPRE SENTED ONLY THE DIFFERENCE BETWEEN THE MARKET PRICE AND THE GRANT PRICE OF THE SHARES ISSU ED TO THE EMPLOYEES, THAT THE DISPUTED AMOUNT REPRESENTED THE AMOUNT RECEIVABLE HAD THE SHARES BE EN ISSUED AT MARKET PRICE,THAT THE ASSESSEE DID NOT INCUR ANY SUCH EXPENDITURE,THAT AS PER THE PRINCIPLES OF ACCOUNTING ONLY THOSE EXPENSES WERE ALLOWED TO BE DEBITED IN THE P&L ACCOUNT OR AL LOWED UNDER THE ACT WHICH HAD BEEN INCURRED BY THE ASSESSEE FOR THE PURPOSE OF BUSINES S,THAT FOR THE PURPOSE OF CLAIMING ANY EXPENDITURE THE AMOUNT SHOULD BE INCURRED/SPENT BY THE ASSESSEE ON CASH BASIS OR LIABILITY TO SUCH EXPENSES SHOULD HAVE BEEN ACCRUED ON MERCANTILE BAS IS.HE FURTHER HELD THAT THE TERM EXPENDITURE MEANT THE ACT OR PROCESS OF PAYING OU T/DISBURSEMENT,THAT IN THE CASE UNDER CONSIDERATION THE ASSESSEE HAD NOT INCURRED THE EXP ENDITURE,THAT AMOUNT OF RS.98,58,720/- REPRESENTED ONLY NOTIONAL DIFFERENCE BETWEEN THE MA RKET PRICE AND GRANT PRICE OF THE SHARE AND DID NOT REPRESENT ANY MONEY WHICH HAD GONE OUT OF T HE APPELLANTS POCKET,THAT THE CLAIM MADE BY THE ASSESSEE WAS NOT AN ALLOWABLE EXPENDITURE,THAT THE AMOUNT OF RS.98,58,720/- PERTAINED TO THE CAPITAL STRUCTURE OF THE COMPANY,THAT THE AO WAS JU STIFIED IN DISALLOWING ASSESSEES CLAIM. 7.2. BEFORE US,THE AR CONTENDED THAT THE ASSESSEE HAD FL OATED ESPO SCHEME FOR ITS EMPLOYEES AND DIRECTORS AS PER THE GUIDELINES ISSUED BY THE S EBI,THAT IT HAD ISSUE 1,64,237 OPTIONS AT AN EXERCISE PRICE LOWER THAN MARKET VALUE,THAT INTRINS IC VALUE OF THOSE OPTIONS WAS RS.1,14,96,950/-, THAT THE AMOUNT WAS AMORTISED OVER THE VESTING PERI OD,THAT ACCORDINGLY AN AMOUNT OF RS.98.58 LAKHS WAS CHARGED TO THE P&L ACCOUNT FOR THE YEAR U NDER APPEAL,THAT ESPO WERE PART OF REMUNERATION PACKAGE OF THE EMPLOYEES.HE RELIED UPO N THE DECISION OF HONBLE MADRAS HIGH COURT DELIVERED IN THE MATTER OF PVP VENTURES LIMIT ED(TC(A)-NO.1023OF 2005 DATED 19. 06. 2012)AND THE ORDER OF M/S.BIOCON LIMITED THE SPECIA L BENCH OF BANGLORE TRIBUNAL (ITA/ BANG/ 368/2010,AY.2007-08-DATED 16.07.2013) IN SUPPORT OF HIS CONTENTIONS.DR SUPPORTED THE ORDER OF THE FAA. 9 7.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD.WE FIND THAT THE CASE OF PVP VENTURES LIMITED(SUPRA)THE HON BLE MADRAS HIGH COURT HAS HELD AS UNDER: 29.AS FAR AS THE EMPLOYEES STOCK OPTION PLAN IS C ONCERNED, AS RIGHTLY POINTED OUT BY THE TRIBUNAL, THE ASSESSEE HAD TO FOLLOW SEBI DIRECTION AND BY FOLLOWING SUCH DIRECTION, THE ASSESSEE CLAIMED THE ASCERTAINED AMOUNT AS LIABILITY FOR DED UCTION. WE DO NOT FIND THAT THERE EXISTS ANY ERROR TO DISTURB THE ORDER OF THE TRIBUNAL AND IN T URN THE ASSESSING AUTHORITY. IN THE CIRCUMSTANCES, WE AGREE WITH THE SUBMISSION OF LEAR NED SENIOR COUNSEL APPEARING FOR THE ASSESSEE IN THIS REGARD BY UPHOLDING THE ORDER OF T HE TRIBUNAL. RESPECTFULLY FOLLOWING THE ABOVE JUDGMENT OF THE HO NBLE MADRAS HIGH COURT,WE DECIDE GROUND NO.5 IN FAVOUR OF THE ASSESSEE. ITA/5164/MUM/2012AY.2008-09 8. SOLITARY EFFECTIVE GROUND OF APPEAL FILED BY THE AO IS ABOUT THE DEPRECIATION ON INTANGIBLE ASSETS. FOLLOWING OUR ORDER FOR THE EARLIER YEAR(PA RA 2 OF OUR ORDER)WE DECIDE GROUND NO.1 AGAINST THE AO. ITA/5621/MUM/2012AY.2008-09 9. FIRST THREE GROUNDS OF APPEAL FOR THE YEAR ARE SAME AS THAT OF EARLIER YEAR-THE ONLY DIFFERENCE IS AMOUNT INVOLVED.FOLLOWING OUR ORDER(PARAGRAPH 5)FOR THE AY.2007-08,WE DECIDED GOA 1-3 IN FAVOUR OF THE ASSESSEE. GROUND NO.4 IS DECIDED IN FAVOUR OF THE ASSESSEE,IN LIGHT OF OUR DISCUSSION HELD AT PARAGRAPH NO.6.3 FOR THE LAST AY. GROUND NO.5 DEALS WITH ESPOS AND WE HAVE ALREADY DE CIDED THE ISSUE IN FAVOUR OF THE ASSESSEE WHILE ADJUDICATING THE APPEAL FOR AY.2007-08.FOLLOW ING THE SAME GROUND NO.5 STANDS ALLOWED. GROUND NO. 6 IS CONSEQUENTIAL IN NATURE AND IS ALLO WED FOR STATISTICAL PURPOSES. AS A RESULT,APPEALS FILED BY THE ASSESSEE STAND ALL OWED AND APPEALS FILED BY THE AO STAND DISMISSED. 0*1 #2* 3 4 ) . 5 6 ) * 78 9 #2* + 3 4 ) . 5 #6 ) * 78 . ORDER PRONOUNCED IN THE OPEN COURT ON 01 ST ,DECEMBER 2014 / ) ,-$ 5 01.12.2014 - ) . . SD/- SD/- ( VIVEK VARMA) ( / RAJENDRA) JUDICIAL MEMBER/ /ACCOUNTANT MEMBER / MUMBAI, :# /DATE:.01.12.2014 / / / / ) )) ) '*' '*' '*' '*' ;'$* ;'$* ;'$* ;'$* / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / %& 2. RESPONDENT / '(%& 3. THE CONCERNED CIT(A)/ < = , 4. THE CONCERNED CIT / < = 10 5. DR ITAT,I BENCH,MUMBAI/ '>. '*# , . . . - . 6. GUARD FILE/ . 0 . ('* '* //TRUE COPY// /# / BY ORDER, ? / 7 DY./ASST. REGISTRAR , /ITAT, MUMBAI.