Hero Moto Corp Ltd., New Delhi V. NeAC, Delhi

ITA 706/DEL/2021

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 7555 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2021
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: I1
• Assessment Year: 2016-2017
• Appeal Filed On: 13-06-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Business income; Depreciation; Transfer pricing; Business expenditure; Double taxation relief; Bonafide belief; Additional evidence; Question of law; Non-deduction of tax; Difference of opinion; Commercial expediency; Revenue expenditure; Capital expenditure; TDS; Rule 8D; Capital Gains
• Section: 92C; 143(3); 244A; 2(22)(e); 14A; 115JB; 40(a)(ia); 37(1); 205; 195; 144C; 274; 80IC; 143(2); 207; 64; 113; 80IC; 43; 48; 194J; 73; 72; 13; 22; 92CA; 2(22); 20

Judgement Text

Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL [DELHI BENCH “I–1”: NEW DELHI] BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER (Through Video Conferencing) ITA. No. 706/Del/2021 (Assessment Year : 2016-17) M/s. Hero Moto Corp. Ltd., The Grand Plaza, Plot No. 2, Nelson Mandela Road, Vasant Kunj, Phase – II, New Delhi – 110 070. PAN: AAACH0812J Vs. National e-Assessment Centre, Delhi. AND STAY APP. No. 127/Del/2021. [ in ITA. No. 706/Del/2021 ] (Assessment Year : 2016-17) M/s. Hero Moto Corp. Ltd., The Grand Plaza, Plot No. 2, Nelson Mandela Road, Vasant Kunj, Phase – II, New Delhi – 110 070. PAN: AAACH0812J Vs. National e-Assessment Centre, Delhi. (Appellant) (Respondent) Assessee by : Shri Ajay Vohra, Sr. Advocate; Shri Rohit Jain, Advocate; & Ms. Manisha Sharma, Adv. Department by : Shri Surendra Pal, [CIT] – DR; Date of Hearing : 13/10/2021 Date of pronouncement : 26/11/2021 O R D E R PER PRASHANT MAHARISHI, A. M. 1. This appeal is filed by the assessee against the order passed by National e- Assessment Centre, Delhi, under Section 143(3) read with Section 144C(13) Page | 2 read with Section 144B of the Income Tax Act, 1961 (the Act) passed on 30 th April, 2021. The assessee has raised the following grounds of appeal:- “1. That the assessing officer erred on facts and in law in completing assessment under section 143(3) read with section 144C of the Income-tax Act, 1961 ('the Act'), vide order dated 30.04.2021, at an income of Rs. 31,66,82,06,82 1-/- under the normal provisions and at book profit of Rs. 43,79,43,08,839 under section 1l5JB of the Act. Re: Transfer Pricing Adjustment under section 92CA relating to inter unit transfer 2. That the assessing officer/ Transfer Pricing Officer („TPO‟) erred on facts and in law in partly disallowing claim of deduction under section 80IC to the extent of Rs.2,20,89,180 by reducing profits of the eligible undertaking by making transfer pricing adjustment on inter-unit transfer price of goods procured by the eligible unit from non-eligible unit during the relevant previous year. 2.1 That the assessing officer/ TPO erred on facts and in law in holding that the inter-unit transactions undertaken between the eligible unit and the non-eligible units of the assessee during the relevant previous year, were not undertaken at arm‟s length price. 2.2 That the assessing officer/ TPO erred on facts and in law in determining transfer pricing adjustment of Rs.2,20,89,180, by applying a markup of 7.77%, 4.13% and 18.24%, being the NP of Dharuhera, Gurgaon and Page | 3 Neemrana units respectively, to the purchases of Rs.14.71 crores, 25.68 crores and Rs.2.88 lacs made from the respective units by applying the provisions of section 80IA(8) read with section 80IC(7) of the Act. f 2.3 Without prejudice that the TPO erred on facts and in law in computing the adjustment to total income on an adhoc basis, without following any acceptable method for determining arm‟s length price prescribed under section 92C of the Act. Re: Addition of freight inward/import clearing expenses to cost of closing inventory 3. That the assessing officer erred on facts and in law in enhancing the value of closing inventory of raw materials/components by Rs. 241.69 lacs (net addition of Rs. 85.04 lacs after adjusting opening stock) in respect of freight inward expenses and import, clearing charges incurred in relation to procurement of raw- material/components and attributable to the closing stock of the aforesaid goods on the ground that the aforesaid cost needs to be added to the value of closing stock in accordance with accounting standard-2 read with section 145 A of the Act. 3.1 That on the facts and circumstances of the case, the assessing officer failed to appreciate that in accordance with the consistent, regular and accepted method of valuation of inventory followed by the appellant, the aforesaid costs being incurred in exceptional situations, are not to be considered for the purposes of valuation of closing inventory. Page | 4 Re: Addition on account of scrap generated during the year by estimating value of scrap on notional basis. 4. That the assessing officer erred on facts and in law in making an addition of Rs. 1,40,000 by estimating the value of scrap lying in stock as at the end of the relevant previous year, on hypothetical / notional basis. Re: Disallowance of prior period expenses 5. That the assessing officer erred on facts and in law in disallowing various expenses to the extent of Rs. 11,69,14,125, which pertained to services availed from vendors in the immediately preceding year, and were claimed as deduction during the year under consideration, since bills for such expenses were received or liabilities were recognized during the year, alleging the same to be prior period expenditure and not business expenditure of the relevant previous year. 5.1 That the assessing officer erred on facts and in law in failing to appreciate that the liability in respect of aforesaid expenses aggregating to Rs.11,69,14,125 pertaining to services rendered by various vendors/creditors in the earlier years, crystallized during the relevant year only on receipt of bills and acceptance of same by the appellant and, therefore, the same did not constitute prior period expenditure. 5.2 Without Prejudice, the assessing officer erred on facts and in law in not allowing or directing to allow the aforesaid expenses in the relevant preceding year(s). Re: Disallowance of advertisement provisions of Head office 6. That the assessing officer erred on facts and in law in disallowing a sum of Rs.8,92,49,490 in respect of provision for advertisement expenses incurred at the head Page | 5 office at end of the relevant previous year, which were reversed in the succeeding year, alleging the same to be excessive. 6.1 That the assessing officer erred on facts and in law in alleging that the provision tor expenses at the end of relevant previous year was not made on scientific basis and was not a reasonable estimate and, therefore, contingent in nature. 6.2 That the assessing officer erred on facts and in law in observing that the appellaiit failed to substantiate the method of creating the aforesaid provision. 6.3 That the assessing officer erred on facts and in law in adding back the provision for advertisement expenses incurred at head office, aggregating to Rs.8,92,49,490 (inadvertently Rs.2,89,94,000 has been added), while computing „book profit‟ under section 115 JB of the Act holding the same to be an unascertained liability. Re: Disallowance of alleged excessive purchases from related parties as per AS-18 7. That the assessing officer erred on facts and in law in disallowing purchases to the extent of Rs. 39.90 crores (Rs. 16.38 crores from multiple source purchases and Rs.23.52 crores with respect to single source purchases) made from certain parties related with the appellant, in terms of Accounting Standard 18 issued by the Institute of Chartered Accountants of India, alleging the same to be, excessive, without appreciating the commercial expediency behind such purchases. 7.1 That on the facts and circumstances of the case, the assessing officer erred in not appreciating that the aforesaid parties were not related to the appellant in Page | 6 terms of section 40A(2)(b) of the Act and hence no disallowance of expense on the ground that payment made to such parties was excessive, could be made. 7.2 That the assessing officer erred on facts and in law in alleging that the appellant had maintained its relationship with the parties in a manner that they do not qualify for being related parties as per the provisions of section 40A(2) of the Act. 7.3 Without Prejudice, that the assessing officer erred on facts and in law in disallowing j purchases to the extent of Rs. 23.52 crores, with respect to purchases from aforesaid? related parties (in terms of AS-18) for which no comparable instance supporting the allegation of excessive payment, was available, on pure estimate basis. Re: Payment received on behalf of Hero Honda FinCorp. Ltd. (HFCL) deemed as dividend under section 2(22)(e) 8. Thatthe assessing officer erred on facts and in law in making addition of Rs.71,97,00,000 to the income of the appellant under section 2(22)(e) of the Act on account of payments given by the customers of Hero FinCorp Ltd. (“HFCL”) to the appellant. 8.1 That on the facts and circumstances of the case, the assessing officer failed to appreciate that the payment given by the customers of HFCL to the appellant was not in the nature of loan or advance given by HFCL to appellant so as to constitute deemed dividend under section 2(22)(e) of the Act. 8.2 Without prejudice, that on the facts and circumstances of the case, the assessing officer failed to appreciate that the provisions of section 2(22)(e) of the Act were not applicable to the aforesaid transaction, since the loan or advance allegedly given by HFCL to the appellant Page | 7 was in the ordinary course of business of HFCL. 8.3 That the assessing officer erred on facts and in law in observing that the loan was not advanced by HFCL in the ordinary course of business of money lending. Re; Disallowance of quarterly target and turnover discount and sales discount on account of non-deduction of TPS 9. That the assessing officer erred on facts and in law in disallowing expenditure of Rs.54,16,55,012 (being 30% of total amount of Rs. 1,80,55,16,707) incurred towards quarterly target/turnover discount and trade discount of Rs. 17,07,28,214 (being 30% of total amount of Rs.56,90,94,045) given to the dealers/customers under section 40(a)(ia) on the ground that the appellant failed to deduct tax at source therefrom under section 194H of the Act. 9.1 That the assessing officer erred on facts and in law inobserving that since the impugned payments were not in the nature of „discount‟ to dealers, but incentives for meeting targets, the same was in the nature of „commission‟, which was subject TDS under section 194H of the Act. 9.2 That the assessing officer erred on facts and in law in not appreciating that the aforesaid discounts were offered under contracts entered into with the dealers on principal to principal to basis, and did not constitute „commission‟ as referred to section 194H of the Act. 9.3 Without prejudice, that the assessing officer erred on facts and in law in not appreciating that since the appellant was under a bona fide belief that no tax was required to be deducted therefrom, no disallowance was warranted under section 40(a)(ia) of the Act. 9.4 Without prejudice, the assessing officer erred on Page | 8 facts and in law in not appreciating that since the payees had paid tax on the income receivable from the appellant, no disallowance could be made under section 40(a)(ia) of the Act for alleged default in deduction of tax at source by the appellant. Re: Disallowance of reimbursement of expenses to vendors on account of nondeduction of TPS 10. That the assessing officer erred on facts and in law in disallowing reimbursement of expenses aggregating to Rs. 4,98,880 (being 30% of the entire expenditure of: Rs. 16,62,935) under section 40(a)(ia), on the ground that the appellant failed to deduct tax at source therefrom under section 194J of the Act. 10.1 That the assessing officer erred on fact and in law in not accepting the invoices raise by the vendors for reimbursement of expenses on the ground that the said claims were raised on the basis of sell- serving vouchers. 10.2 Without prejudice, that the assessing officer erred on facts and in law in not appreciating that since the appellant was under a bona fide belief that no tax wag required to be deducted therefrom, no disallowance was warranted under section? 40(a)(ia) of the Act. 10.3 Without prejudice, the assessing officer erred on facts and in law in not appreciating that since the payees had paid tax on the income receivable from the appellant, no disallowance could be made under section 40(a)(ia) of the Act for alleged default in deduction of tax at source by the appellant. Page | 9 Re: Gains from sale of investments treated as business income 11. That the assessing officer erred on facts and in law in treating gains arising from sale of investments made during the year as business income, instead of “capital gains” as considered by the appellant and consequently making an addition of Rs.2,04,53,53,362 under the head business income, as opposed to income of Rs.1,24,86,76,723 disclosed by the appellant under the head „capital gains‟. 11.1 That the assessing officer erred on facts and in law in observing that investments were made by the appellant with a view to earn profit from selling the same at a later stage and, therefore, profits were taxable under the head “business income”. 11.2 That the assessing officer erred on facts and in law in observing that the appellant had earned substantial turnover from sale of investments and was engaged in day to day monitoring of investments, therefore, the appellant was primarily engaged in | activity of investments, which was to be regarded as business activity and, accordingly, income arising therefor was taxable under the head “business income”. Re: Disallowance under section 14A, as per Rule 8D 12. That the assessing officer erred on facts and in law in making additional disallowance of Rs. 2,89,94,000 under section 14A of the Act, by applying provisions of Rule 8D of the Income Tax Rules, 1962 („the Rules‟). Page | 10 12.1 That the assessing officer erred on facts and in law in applying provisions of Rule 8D of the Rules, without reaching a finding/recording satisfaction as to the incorrectness of the suo moto disallowance of expenses made by the appellant under section 14Af of the Act. 12.2 That the assessing officer erred on facts and in law in attributing entire interest expenditure incurred during the year towards earning of exempt income by mechanically applying provisions of Rule 8D of the Rules. Re: Disallowance of depreciation on model fee on the ground that the same was attributable to closing stock of finished goods. 13.That the assessing officer erred on facts and in law in enhancing the value of closing inventory and thereby income of appellant by Rs. 40,87,000 in respect of proportionate amount of depreciation on model fee incurred during the year and debited to the profit and loss account, alleging the same to be directly related to manufacture of finished goods and, therefore, attributable to the closing stock of such goods. Re: Disallowance of reimbursement of foreign traveling expenses 14. That the assessing officer erred on facts and in law in making disallowance of Rs.6,81,54,657 (comprising of Rs.2,65,30,809 in respect of Dharuhera, Gurgaon, Haridwar, Neemrana plants, Rs.20,58,108 in respect of Jaipur CIT and Rs. 3,95,65,741 in respect of head office expenses) out of expenditure incurred towards re- imbursement of foreign travel expenses incurred by Page | 11 employees, on the ground that the same were not supported with evidences/ bills of expenditure incurred abroad. Re: Disallowance of expenditure on account of Royalty expenses on the ground of being capital in nature 15. That the assessing officer erred on facts and in law in holding that expenditure aggregating to Rs. 82,83,96,425 (net disallowance of Rs. 62,12,97,318 after allowing depreciation @ 25%), incurred by the appellant during the relevant previous year on account of royalty paid to Honda Motor Co., Japan, („Honda‟) under the „License and Technical Assistance Agreement‟ (“LTAA”) was capital in nature and not allowable deduction. 15.1 That the assessing officer erred on facts andin law in observing that the assessee acquired capital assets in the nature of intellectual property rights and patents from Honda on payment of royalty and technical guidance fees under the License B Agreement. 15.2 That the assessing officer erred on facts and in law in observing that the assessee received benefit of enduring nature under theLicense B Agreement, since - (i) the appellant obtained exclusive right to manufacture and sell the products within the territory of India and, (ii) the license had a degree of perpetuity, as it was being renewed and extended year after year. Re: Disallowance of deduction under section 80-IC of the Act on account of profit attributable to brand value and marketing activities carried out at Head Office 16. That the assessing officer erred on facts and in law in disallowing deduction under section 80IC of the Act by an Page | 12 amount of Rs.241.79 crores on the ground that part of profits earned by the eligible unit should have been attributed to advertisement and marketing activities carried out at head-office, and such profits wefre not derived from the business of manufacturing, which were only eligible for deduction under the aforesaid section. 16.1 That the assessing officer erred on facts and in law in holding that part of extraordinary profits earned by eligible unit at Haridwar were attributable to profit earned from marketing of products and brand value. 16.2 That the assessing officer erred on facts and in law in holding that since marketing activities were carried out at Head Office, therefore, the appellant should have transferred goods to Head Office at cost plus reasonable margin and the head-office should have earned higher profit on account of sales and marketing activities. 16.3 That the assessing officer erred on facts and in law in holding that the assets, such as, brand value and marketing network, were not owned by the eligible undertaking at Haridwar. 16.4 Without prejudice, that the assessing officer erred on facts and in law in attributing profits to the manufacturing activities at Haridwar by applying net profit rate of 6.85%, on an arbitrary basis. 16.5 Without prejudice, that the assessing officer erred on facts and in law in holding that the net profit rate of the first year of operation of business would be the rate of profit derived solely from manufacturing activities. 16.6 Without prejudice, that the assessing officer erred on facts and in law in computing the net profit rate of 6.85% for attributing profits to the manufacturing activity at Haridwar, by computing net profit rate for the first year of operation of the appellant company on an arbitrary 1 Page | 13 basis. Re: Disallowance of deduction under section 80-IC of the Act in respect of interest income earned by eligible unit on loans given to employees/vendors 17. That the assessing officer erred on facts and in law in disallowing deduction under section 80IC of the Act by an amount of Rs. 2,05,97,466 in respect of interest incomes earned by the eligible unit on (i) loan given to the employees at subsidized rates and (ii) loan provided for working capital support to vendors, on the ground that such interest income was not derived from the business of manufacturing. 17.1 That the assessing officer erred on facts and in law in holding that the other income aggregating to Rs. 2,05,97,466 is taxable under the head “income from other sources”. Re: Disallowance of depreciation of CED Paint Shop - Put to use test not satisfied 18. That the assessing officer erred on facts and in law in disallowing depreciation of 1 Rs. 1,83,75,000 claimed on plant and machinery namely “CED Paint shop” installed ; during the year on the ground that the appellant failed to substantiate that the said I plant and machinery was purchased and put to use by the appellant on 31.03.2016. 18.1 That the assessing officer erred on facts and in law in not appreciating the contemporaneous evidence(s) placed on record by the appellant establishing that the said plant was installed and commissioned in the month of October - November, 2015 and was even used in manufacture of Duet Scooters launched in that very year. 18.2 That the assessing officer erred on facts in holding that since the plant was capitalized in the books of accounts on 31.03.2016, the same could not have been 17. 17.1 18. 18.1 18.2 Page | 14 put to use during the relevant year, without appreciating that the evidences furnished by the appellant which substantiated that the asset was installed and actually used during the year. Re; Disallowance of excess depreciation on software 19. That the assessing officer erred on facts and in law in disallowing depreciation to the extent of Rs.6,25,17,452, out of total depreciation of Rs. 10,71,72,776 claimed on computer software at the rate of 60% on the ground that such Software was an intangible asset eligible for depreciation at normal rate of 25% applicable thereto and the same had even been classified as an „intangible asset‟ in the books of accounts of the appellant. 19.1 That the assessing officer erred on facts and in law in not appreciating that the software was in the nature of a tangible asset classified under the heading „plant‟ in Appendix I to the Rules and consequently cannot be treated as an „intangible asset‟ for the purpose of claiming depreciation under the Act. 19.2 That the assessing officer erred on facts and in law in not appreciating that computer software has been specifically included as an item of machinery and plant under clause (5) of Appendix I to the Rules and is eligible for depreciation at the rate, of 60% of written down value as specified therein. 19.3 That the assessing officer erred in holding that only software which was purchased as an integral part of the computer system would be eligible for depreciation @ 60%. Page | 15 Re: Disallowance of deduction under section 80-IC on account of interest income earned by eligible unit from loan and security deposit 20. That the assessing officer erred on facts and in law in disallowing deduction under section 80IC of the Act by an amount of Rs.2,30,00,000 in respect of interest income earned by the eligible unit on (i) loan given to the employees at subsidized rates, (ii) loan provided for working capital support to vendors and (iii) security deposit given to Uttarakhand Power Corporation Limited, on the ground that such incomes were not derived from the business of manufacturing. 20.1 Without prejudice, the assessing officer erred in making double disallowance of deduction under section 80-IC to the extent of Rs.2,05,97,466 on account of interest income earned by the eligible unit on loan given at subsidized rates to the employees and loan given for providing working capital loan to vendors. Re: Non-allowance of depreciation on iease-hold rights in land 21. That the assessing officer erred on facts and in law in not allowing depreciation of Rs. 19,11,47,917 on „leasehold rights‟ in land under section 32(l)(ii) of the Act claimed by the appellant in accordance with the directions of the Hon‟ble Tribunal in earlier assessment years. 21.1 That the assessing officer erred on facts and in law in not allowing the aforesaid claim of depreciation on the ground that the same was not claimed in the return of income but was claimed during the course of assessment proceedings. 21.2 Without prejudice, that the assessing officer erred on facts and in law in not appreciating that a legitimate Page | 16 claim of the assessee cannot be denied merely because the same was not claimed in the return of income. 21.3 Without prejudice, on the facts and the circumstances of the case and in law the aforesaid claim of depreciation of Rs. 19,11,47,917 on „leasehold rights‟ in land under section 32(1 )(ii) of the Act can even otherwise be allowed as additional ground by the Hon‟ble Tribunal. Re: Deduction of education cess on income tax 22. That the assessing officer/ Hon‟ble Dispute Resolution Panel („DRP‟) erred on facts and in law in not allowing deduction of education cess on income tax amounting to Rs.24,23,94,333 claimed in terms of law clarified by the Hon‟ble Rajasthan High Court in the case of Chambal Fertilisers and Chemicals Ltd vs JCIT: D.B. Income-tax Appeal No.52/2018 and Hon‟ble Bombay High Court in the case of Sesa Goa Ltd. vs. JCIT: 117 taxmann.com 96. 22.1 Without prejudice, on the facts and the circumstances of the case and in law the aforesaid claim of deduction of education cess on income tax amounting to Rs.24,23,94,333 can even otherwise be allowed as additional ground by the Hon‟ble Tribunal. Re: TPS credit short allowed 23. That the assessing officer erred on facts and in law, in not allowing credit for TDS of Rs. 2,66,630/- out of aggregate amount of TDS credit of Rs.21,02,52,980 claimed in the Return of Income, without providing any reason therefor. Re: Interest charged 24. That the assessing officer erred in withdrawing interest of Rs.6,55,50,889 granted under section 244A of Page | 17 the Act. The appellant craves leave to add, amend or vary the above grounds of appeal on or before the date of hearing. “ 2. The assessee is a company engaged in the business of manufacturing of two-wheelers. Assessee filed its return of income on 30.11.2016 declaring total income of Rs.2553,81,27,894/- after claiming deduction under Section 80IC of the Act of Rs.457,44,72,520/-. The book profit income under Section 115JB of the Act was shown at Rs.4376,53,14,839/-. Notice under Section 143(2) was issued on 11.07.2017. The details were filed by the assessee on-line and they were duly examined by the National e-Assessment team. 3. The assessee company entered into certain international and specified domestic transactions. The Transfer Pricing Officer was referred to for determination of the Arms Length Price of the international transactions and TP adjustment of Rs. 2,20,89,180/- was made. Consequently, the assessment order was passed and total income of the assessee was determined at Rs. 3166,82,06,821/-. Twenty one different adjustments / additions were made in the assessment order. Thus, assessee is aggrieved with the same and has preferred this appeal before us. 4. At the time of hearing, the ld. AR, Shri Ajay Vohra, Senior Advocate, Shri Rohit Jain, Advocate and Ms. Manisha Sharma, Advocate, filed a detailed chart of the various issues covered in the grounds of appeal. According to that chart, it was submitted that all the issues covered in these grounds of appeal are covered by the decision of the co-ordinate bench in assessee‟s own case for assessment years 2010-11 and 2011-12 dated 24.10.2016 and further by the order dated 14.04.2021 for assessment year 2015-16. Thus, it was submitted that the issues are squarely covered in favour of the assessee. 5. The ld. [CIT] – DR also perused the chart and stated that the grounds of appeal in this appeal are covered. However, still he wants to place his arguments on record. These arguments would be dealt with when individual grounds of appeal would be discussed. Page | 18 6. During the course of hearing, the assessee submitted two volumes of the paper book. 7. We have heard both the parties in detail and considered the various documents ground number placed before us as well as several judicial precedents relied upon. 8. Ground No. 1 is general in nature and, therefore, it is dismissed. 9. Ground number 2 is with respect to the transfer pricing adjustment. The appellant is engaged in the business of manufacturing two-wheelers and has four manufacturing plants at Gurgaon, Dharuhera, Haridwar and Neemrana. The appellant is entitled for deduction under section 80IC of the Act in respect of profit derived from the undertaking located at Haridwar. For the aforesaid manufacturing activity, the appellant purchases various components required to be used in the assembly of two-wheelers, like gear box, fuel tank, etc., from third party vendors. In the present transaction, the aforesaid components were first purchased by non-eligible units at Gurgaon or Dharuhera from third parties, due to proximity of location of such units with third parties, business relationship, etc. and were thereafter transferred at the same purchase price to the eligible unit at Haridwar. In such a transaction, no value addition in such components was carried out by the non-eligible unit. In the books of accounts of the plant at Haridwar, which is eligible for deduction under section 80IC of the Act, goods aggregating to Rs. 40.42 crores, were shown to have been procured from other units, i.e., Gurgaon, Neemrana and Dharuhera plants. All the aforesaid goods/ components were procured by the aforesaid non-eligible units from third parties and were transferred as it is without processing to the eligible unit at material cost. Freight charges on transfer of the aforesaid items were always booked at the receiving unit. In the transfer pricing study report the appellant company benchmarked the aforesaid inter-unit transaction(s) between eligible and non-eligible units applying Comparable uncontrolled price („CUP‟) method, being the most appropriate and preferred method in the facts of the present case. Alternatively, the appellant also applied Transactional Net Margin Method („TNMM‟) considering itself to be the tested party. It was submitted that since the operating profit margin of the comparable companies at 13.55% was within +/- 3% of the operating Page | 19 profit margin of the appellant 11.29%, the transaction of inter-unit transfer was considered to be at arm‟s length price. The AO/TPO ignored the CUP method, being one of the methods prescribed under section 92C of the Act, and held the impugned inter-unit purchases to be not at arm‟s length price on the ground that the profit margin of the non-eligible units, viz., Dharuhera, Gurgaon and Neemran aunits at 7.77%, 4.13% and 18.24% respectively ought to have been charged on such transfer of components. Accordingly, the TPO/AO concluded that the appellant has shifted profits from non-eligible unit to the eligible unit in order to claim higher deduction under section 80IC of the Act without benchmarking inter-unit transfer price with any contemporaneous evidence or acceptable method for determining arm‟s length price. The TPO/AO worked out an adjustment of Rs. 2,20,89,180 in the following manner: S. No . Particulars of goods Value of such goods (in Rs.) Margi n of non- eligibl e units Value of mark up or margin should have earned while transferring to eligible units (in Rs.) 1 Transfer of goods from Dharuhera to Haridwar 14,70,99,3 99 7.77% 1,14,29,623 2 Transfer of goods from Gurgaon to Haridwar 25,68,24,7 96 4.13% 1,06,06,864 3 Transfer of goods from Neemrana 2,88,887 18.24 % 52,693 Page | 20 to Haridwar Total 2,20,89,180 10. The learned authorised representative submitted that goods were not purchased by the eligible unit at Haridwar from non-eligible unit(s) owned by the appellant since in respect of inter-unit transfer of goods, what had happened is that the aforesaid components were first purchased by non- eligible units at Gurgaon, Neemrana and Dharuhera from third parties and were thereafter transferred at the same purchase price to the eligible unit at Haridwar. In such a transaction, no value addition in such components was carried out by the non-eligible units. The non-eligible units in the aforesaid transaction merely incurred the cost of purchase on behalf of the eligible unit, which was subsequently debited to such unit. Accordingly, the aforesaid transaction was not in the nature of inter-unit purchase and sale of goods, covered within the provisions of section 80IA(8) read with section 80IC(7) of the Act. Accordingly, in the absence of any enhancement in the market price of the aforesaid component, no substitution of actual material cost was warranted by applying provision of section 80IA(8) read with section 80IC(7) of the Act for the purpose of computing deduction under the latter section. It was further submitted that It would be pertinent to point out that the aforesaid issue stands squarely covered in favour of the assessee, by the order passed by Hon‟ble Tribunal in the preceding assessment years, i.e. AY 2010-11 to AY 2013-14, wherein identical disallowance made by the assessing officer has been deleted. The Tribunal, in allowing the claim of the assessee under section 80-IC of the Act, held that for the purpose of computing market price of inter-unit transfer of goods, when the non-eligible units procured goods at market price from third party vendors and supplied the same to the eligible unit at the same purchase price no further substitution of such price is warranted in terms of section 80IA(8) of the Act and the transaction was a genuine business transaction borne out of commercial expediency. While deciding the appeal for the assessment year 2009-10 and 2015-16, the Hon‟ble Tribunal has decided the issue in favor of the assessee by following the orders passed for the assessment years 2010-11 to 2013-14. Page | 21 11. The learned departmental representative relied upon the orders of the lower authorities. 12. We have carefully considered the rival contention and perused the orders of the lower authorities. The identical issue has been considered by the coordinate bench in the assessee‟s own case for the earlier assessment years that is assessment year 2000 – 11 to assessment year 2013 – 14. In view of this respectfully following the order of the coordinate bench in assessee‟s own case, thus Ground no 2 is allowed. 13. Ground number 3 is with respect to inclusion of the freight amount in the valuation of the closing stock. Appellant ordinarily purchases raw material on CIF basis and, therefore, freight cost for delivery of goods is ordinarily included in purchase price and are factored in the value of closing inventory; In exceptional circumstances viz. material shortage, where appellant has to immediately lift material, transport charges are paid, which are not loaded to the purchase price, but are separately debited to profit and loss account, since invoices of transporters are received after consumption of material. Such freight amount is not included in the valuation of closing stock, as per regularly and consistently followed method of valuation of stock accepted by the Revenue in the past. The AO/DRP held that proportionate amount of Rs. 241.69 lacs out of the total amount of freight inward charges and import clearing charges incurred as attributable to the value of closing stock on account of above expenses. However, since the assessing officer had made similar addition of Rs. 156.54 lacs on account of above in the closing stock of the last year, which constituted opening stock of the year under consideration, the assessing officer allowed deduction for the said amount, resulting in net addition of 85.04 lacs (i.e. Rs. 241.69 – 156.54 lacs). 14. The learned authorised representative submitted that It would be pertinent to point out that the aforesaid issue stands decided in favour of the assessee by the order of the Delhi Bench of the Tribunal in the assessee‟s own case for the assessment year 2007-08, 2008-09, 2010-11 and 2011-12. The Tribunal, in the aforesaid cases, deleted the impugned addition on the ground that the assessee was following consistent system of accounting, which was unnecessarily disturbed by the Revenue, without change in facts. Page | 22 It was further held that, tinkering with the accounting method was unjustified, when the exercise did not materially alter the profits of the assessee company. Following the orders for the assessment years 2010-11 and 2011-12, the Hon‟ble Tribunal vide recent orders dated 13.06.2018 and 20.06.2018 decided the aforesaid issue in favour of the assessee in the assessment years 2012-13 and 2013-14 respectively. Further, in the order passed for assessment year 2009-10 and 2015-16, the Hon‟ble Tribunal has decided the issue in favor of the appellant by following the orders passed for the assessment years 2010-2011 to 2013-14. 15. We have carefully considered the rival contention and find that the identical issue is decided in favour of the assessee for the assessment year 2012 – 13 and 2013 – 14 also following the order of the coordinate bench in assessee‟s own case for assessment year 2010 – 11 and 2011 – 12. No change in the facts and circumstances of the case were pointed out before us. Therefore, respectfully following the decision of the coordinate bench in assessee‟s own case we allow ground number 3 of the appeal. 16. Ground number 4 of the appeal of the assessee shows the fact that In the course of the business of manufacturing; the process generates some scrap because of rejection of components, obsolescence of components, etc. In the course of manufacturing process, scrap is generated mainly because of grinding scrap in machining process of various components. Such scrap generated in the course of manufacturing is not separately debited to the profit and loss account but is claimed as the part of cost of material consumed in the course of manufacturing. The wastage generated in the manufacturing process is negligible compared to the overall consumption of material during the year. Further, such wastage is normal and inherent in the manufacturing process and, in any case, within tolerable limits. Scrap generated in the aforesaid manner is transferred to scrap yard with proper approval of respective „Shop head‟ and „Process, Planning & Control department‟ in the manufacturing unit and sold after necessary processing (e.g. crushing of components), if any. The sale proceeds from sale of scrap is directly credited to the profit and loss account and shown as income. Having regard to the nature of scrap/wastage generated during the course of business i.e. empty oil drums, corrugated wooden boxes, plastic bags, Page | 23 etc., it is not possible to maintain scrap register at the shop floor containing item wise details of scrap generated. However, the appellant maintains record/register of each item of scrap sold during the year. In the assessment order, the assessing officer has alleged that the appellant has erred in not estimating the value of scrap lying in the factory premises as on the last date of the previous year, viz., 31.3.2016, which should have been credited to profit and loss account as part of the closing stock. The assessing officer estimated the value of such scrap at an amount of Rs. 1,40,000 (computed on the basis of average scrap sales in the last 15 days of the relevant year and first 15 days of next year, vis-à-vis, after reducing the scrap sale as on the last days of the relevant year) and made addition of the same to the closing stock and consequently to the income of the appellant. 17. The ld AR submitted that It would be pertinent to point out that the aforesaid issue has been decided in favour of the appellant passed by the Hon‟ble Tribunal in appellant‟s own case for the assessment year 2010-11 and 2011-12, wherein the Tribunal accepted the method as followed by the appellant of accounting income on sale of scrap on a consistent basis and deleted the impugned addition on the ground that the appellant was not dealing in scrap and/or holding the scrap as inventory, and thus was not required to value the closing stock after taking into account the value of scrap. The Tribunal, in coming to the aforesaid conclusion, laid emphasis on the fact that such transaction was revenue-neutral and held that considering the size of the appellant company, it could not be expected to keep quantitative tally of miniscule items. It is pointed out that the Tribunal in appellant‟s own case for the AY 2007-08 and 2008-09, had restored the matter back to the file of the assessing officer to compute the value of closing stock on consistent basis, as per method to be followed by the assessing officer in the set-aide order. The appellant had filed an appeal against the aforesaid order of the Tribunal, which was admitted by the High Court vide order dated 19.1.2015 as involving substantial question of law. 18. We have carefully considered the rival contention and perused the orders of the lower authorities. As the issue is squarely covered in favour of the assessee by the order of the coordinate bench in assessee‟s own case for assessment year 2010 – 11 and 2011 – 12, the facts are not distinguishable, Page | 24 therefore respectfully following the decision of the coordinate bench in assessee‟s own case we allow ground number 4 of the appeal of the assessee. 19. Ground number 5 is with respect to the disallowance of the prior period expenditure. The fact shows that the appellant is a large size manufacturing company, which receives services from several vendors, running into hundreds. The appellant makes reasonable attempt to quantify the liability incurred towards expenses during the relevant previous years and provide for it. It is not humanly possible to consider and provide for all expenses, in absence of relevant details/material/information for various reasons like non-receipt of bills/invoices from the vendors, the contract terms with vendors not being settled, disputes in relation to bills received, services contracted by zonal/regional/branch officer not intimated to the head office, etc. Accordingly, the appellant claimed deduction for miscellaneous expenses aggregating to Rs. 11,69,14,125 pertaining to prior period. Such details are available at page number 7032 961 of the paper book filed by the assessee. In the assessment order, the assessing officer/DRP has disallowed the aforesaid expenses, on the ground that same pertained to prior period and are not allowable revenue expenditure against income of the relevant year. 20. The learned authorised representative submitted that The aforesaid issue is covered by the order passed by the Hon‟ble Tribunal in the appellant‟s own case for assessment year 2008-09, wherein, the Hon‟ble Tribunal taking into consideration the finding of the DRP principally decided the issue in favor of the appellant and remanded the matter to the file of the assessing officer for correcting calculation errors. Further, the aforesaid issue has been decided in favour of the appellant by the order of the Hon‟ble Tribunal for assessment year 2010-11 and 2011-12. While deciding the appeal for the assessment years 2012-13 and 2013-14, the Hon‟ble Tribunal decided the issue in favor of the appellant following the orders for the assessment years 2010-11 and 2011-12. Further, in the order passed for assessment year 2009-10 and 2015-16, the Hon‟ble Tribunal has decided the issue in favor of the appellant by following the orders passed for the assessment years 2010-2011 to 2013-14. Page | 25 21. We have carefully considered the rival contention and perused the orders of the lower authorities. This issue squarely covered in favour of the assessee by the decision of the coordinate bench in assessee‟s own case for assessment year 2010 – 11 as well as assessment year 2012 – 13 and 2013 – 14. No distinguishing features of the facts during this year were shown to the assessee and therefore respectfully following the decision of the coordinate bench we allow ground number 5 of the appeal of the assessee. 22. Ground number 6 of the appeal of the assessee is with respect to the disallowance of advertisement expenditure. The fact shows that at the end of year, the appellant makes provision for various expenses incurred during the year based on reasonable estimate, since in the absence of receipt of bills/invoices from the vendors, which are received in the succeeding year, the exact amount payable there against was not ascertainable. In the succeeding year, on receipt of bills from vendors, exact amount payable to vendors was ascertained. The amount of provision in excess of actual amount payable was reversed in the books of account. In case of shortfall, the profit and loss account is debited with the amount of shortfall. The aggregate provision for advertisement expenses incurred at the head office made at the end of the relevant previous year, which was reversed in succeeding year amounted to Rs. 8,92,49,490 crores. In the assessment order, the assessing officer disallowed the provisions made at the end of the year, to the extent of Rs.8,92,49,490, which were reversed in the succeeding year on receipt of bills from the vendors on conclusion of negotiations with the vendors, on the ground that the provisions to that extent were excessive and represented contingent liability, which is not allowable deduction. That apart, the assessing officer also added back the aforesaid total provision of Rs.8,92,49,490 (inadvertently Rs.2,89,94,000 has been added), while computing „book profit‟ under section 115JB, holding the same to be an unascertained liability. 23. The learned authorised representative submitted that provision for advertisement expenses, in the year under consideration as well, has been made on the basis of actual Purchase orders and agreements and thus, has been made on reasonable and scientific basis. He also referred to page number 962 – 981 of the paper book where the details of such provisions Page | 26 are placed. He submitted that It would be pertinent to point out that the Hon‟ble Tribunal, in the immediately preceding assessment years, viz. AY 2010-11 and 2011-12, has decided the issue in favour of the appellant following the order for assessment year 2008-09 holding that the provision was made on rational and scientific basis, and thus the same was to be allowed as business deduction, notwithstanding that part thereof was reversed in the succeeding year. The Tribunal, in coming to the aforesaid conclusion, also held that the disallowance cannot be made on the issues, which are revenue neutral. The aforesaid issue, it would be noted, is also covered in favour of the appellant by the decision of the Hon‟ble Tribunal in appellant‟s own case for the assessment year 2008-09, wherein the Tribunal reversed the action of assessing officer in disallowing provision on the ground that the amount reversed there against in the succeeding year exceeded 15% of the amount of provision. The Tribunal held that the said approach followed by the AO had no valid basis and was purely ad-hoc. The Tribunal also held that the assessing officer was bound to follow the practice and stand taken by the Department on this issue in the earlier years and, accordingly, restored the matter back to the file of the assessing officer to reconsider the issue, having regard to the method of making provisions followed by the appellant and accepted by the Revenue in preceding years. The assessing officer, in the set-aside proceedings, vide order dated 26.02.2015, accepted the claim of the appellant and allowed relief on the aforementioned identical issue by observing that the appellant had computed the provision on the basis of actual Purchase Orders, which was scientific and logical in nature. While deciding the appeal for the assessment years 2012-13 and 2013-14, the Hon‟ble Tribunal decided the issue in favor of the appellant following the orders for the assessment years 2010-11 and 2011-12. Further, in the order passed for assessment year 2009-10 and 2015-16, the Hon‟ble Tribunal has decided the issue in favor of the appellant by following the orders passed for the assessment years 2010-11 to 2013-14. In the aforesaid order, the Tribunal also held that the provision for advertisement expenses was also allowable while computing book profit under section 115JB of the Act. Page | 27 24. We have carefully considered the rival contention and perused the orders of the lower authorities. We have also considered that the identical issue has been decided in the case of the assessee itself for assessment year 2012 – 13 and 2013 – 14 following the order of the coordinate bench for assessment year 2010 – 11 and 2011 – 12, therefore respectfully following the decision of the coordinate bench in assessee‟s own case, as no other distinguishing features four pointed out before us, we allow ground number 6 of the appeal of the assessee. 25. Ground number 7 of the appeal of the assessee is with respect to the disallowance of the excessive purchase consideration paid to the related parties. 26. The fact shows that In the course of business of manufacturing two- wheelers, the appellant, inter alia, procures certain critical components like shock absorbers, carburetors, etc., which are fitted in the two-wheelers manufactured by the appellant, from a single vendor, having the requisite technology to manufacture the same, in accordance with the specifications given by the appellant. The appellant, it may be pertinent to point out, does not procure such components from any other vendor. The purchase price of components which are purchased from various suppliers are based upon negotiations with such vendors and are different due to various factors, like level of automation of vendor, amount of investment by vendor, age of the plant, capacity utilization (impacting fixed cost recovery), volume of supply, geographical differences (which could impact cost of freight, labour, power), lead time, indirect tax costs (CST vs. VAT) etc. Further, the appellant also prefers purchasing material from certain suppliers, due to business/commercial expediency, viz., de-risking the supply chain to reduce dependence, inability of existing supplier to meet demand increase, etc. The said parties are not related to appellant, in terms of the provisions of section 40A(2)(b) of the Act. In addition to above, the appellant in the course of manufacturing two wheelers, places purchase orders on vendors of certain customized intermediary products like wheel assembly, seat assembly, etc. The appellant, while placing aforesaid purchase orders to the vendors, also specifies the specifications of the raw materials/components to be used in manufacture of customized intermediary products as also the name of Page | 28 suppliers from whom the former vendor would purchase such materials/components at prices predetermined by the appellant. The learned assessing officer after comparing purchase price of certain products, which were purchased from the aforesaid related parties as also from unrelated parties, alleged that the purchase price from related parties was excessive in order to reduce the taxable income. The AO also alleged that the appellant has conducted itself in such a manner that the parties do not qualify as „related party‟ under section 40A(2) of the Act, even though said parties were related to appellant in terms of AS- 18. It was observed that the assessing officer had the power to lift the corporate veil, to disallow excessive purchase price paid to the aforesaid parties, notwithstanding that the said parties were not related, in terms of provisions of section 40A(2) of the Act. Accordingly, the AO computed excessive purchase price at Rs.16.38 crores in respect of purchases from related parties for which internal comparable of similar products purchased from related parties were available. In respect of other category of purchases from related parties for which no internal comparable was available, the AO worked out an amount of Rs. 23.52 crores, in the same proportion as that of purchases for which internal comparable were available alleging the same to be excessive. Thus, AO made total disallowance of Rs. 39.90 crores out of related parties purchases. 27. The learned authorised representative submitted that It would be appreciated that the aforesaid issue is squarely covered in favour of the appellant by the decision of the Delhi Bench of Tribunal in the appellant‟s own case for assessment year 2007-08 and 2008-09, wherein identical disallowance made in that year was deleted on the ground that since in the first place, the parties were not related to the appellant company in terms of section 40A (2), disallowance on ground of excessive purchase price could not have been made under that section. Further, the Tribunal held that the transactions were entered by the appellant on account of commercial expediency and when the recipients had paid tax on payments received from the appellant company, disallowance could not be made by applying provisions of section 40A(2) of the Act. It would be pertinent to point out that similar disallowance made in the immediately preceding two Page | 29 assessment years, viz. AY 2010-11 and 2011-12 was also reversed by the Hon‟ble Tribunal, following the aforementioned order of the Tribunal for assessment years 2007-08 and 2008-09. While deciding the appeal for the assessment years 2012-13 and 2013-14, the Hon‟ble Tribunal decided the issue in favor of the appellant following the orders for the assessment years 2010-11 and 2011-12 Further, in the order passed for assessment years 2009-10 and 2015-16, the Hon‟ble Tribunal has decided the issue in favor of the appellant by following the orders passed for the assessment years 2010-11 to 2013-14. 28. We have carefully considered the rival contention and perused the orders of the lower authorities. We find that the identical issue has been decided by the coordinate bench in the assessee‟s own case for assessment year 2010 – 11 and 2011 – 12 and further those orders were also passed after following the orders of the coordinate bench in assessee‟s own case for assessment year 2007 – 08 and 2008 – 09. Accordingly, we allow ground number seven of the appeal. 29. Ground number 8 of the appeal is with respect to Payment received on behalf of Hero Honda FinCorp. Ltd. (HFCL) deemed as dividend under section 2(22)(e). The fact shows that Hero FinCorp Limited (HFCL) is a related company, which is engaged primarily in the business of financing of vehicles. In pursuance of the said business, HFCL extends to the dealers of the appellant company, facility of financing vehicles purchased by the dealers from the appellant company. The dealers on purchase of vehicles from the appellant, get the bill of purchase raised by the appellant, discounted from HFCL and remit payment to the appellant. The dealers are required to make payment of aforesaid discounted bills to HFCL on maturity thereof. Subsequently, when payments by dealers to HFCL are due, the dealers, due to convenience of facility of collection centers of the appellant available all over India, make payment into the appellant‟s bank account, for and on behalf of HFCL, which is in turn remitted by the appellant to HFCL in 2-3 days. The learned AO held the aforesaid amount received by appellant from dealers as loan/advance given by HFCL to appellant and consequently deemed the same as dividend under section 2(22) (e) of the Act. It was further observed that the aforesaid advances were not given by Page | 30 HFCL to the appellant in the ordinary course of business since the aforesaid payments were given by customers of HFCL and not by HFCL directly. 30. The learned authorised representative submitted that In AY 2007-08, the Hon‟ble Tribunal decided the issue in favour of the appellant holding that appellant‟s intention did not reflect that the amount was received as loan or advance to as to attract the provisions of section 2(22)(e) of the Act. The Hon‟ble Tribunal further held that the appellant was holding the money as a custodian and the amount would be exempted in terms of clause (ii) section 2(22)(e) since the amount was given in the ordinary course of business. In assessment year 2008-09, 2010-11 and 2011-12, the Hon‟ble Tribunal following the order for assessment year 2007-08 deleted the disallowance. While deciding the appeal for the assessment years 2012-13 and 2013-14, the Hon‟ble Tribunal decided the issue in favor of the appellant following the orders for the assessment years 2010-11 and 2011-12. Further, in the order passed for assessment years 2009-10 and 2015-16, the Hon‟ble Tribunal has decided the issue in favor of the appellant by following the orders passed for the assessment years 2010-2011 to 2013-14. 31. We have carefully considered the rival contentions and perused the orders of the lower authorities. It was contested that the coordinate bench has decided the identical issue in favour of the assessee by the decision of the coordinate bench for assessment year 200 7 – 08 and deleted the disallowance. The order of the coordinate bench was also followed in the assessee‟s own case for subsequent years. No distinguishing features of the facts were pointed out before us. Accordingly, we allow ground number 8 of the appeal of the assessee. 32. Ground number 9 of the appeal of the assessee is with respect to Disallowance under section 40(a)(ia) for alleged default of non-deduction of TDS on quarterly target and turnover discount and Sales Discount. During the relevant year, the appellant incurred expenditure of Rs. 237,46,10,752 on account of various incentives/discounts offered to dealers under various schemes on purchase of spare parts/vehicles from the appellant. The aforesaid expenditure, aggregating to Rs. 180,55,16,707, relates to amount of discounts offered by the company to various stockiest/dealers on purchase of spare parts made by the latter in accordance with sales Page | 31 incentive/discount scheme prevalent during the relevant previous year. The appellant has further given trade discount amounting to Rs. 56,90,94,045 to the dealers on the sales invoice at the time of sales. Assessee submitted such details, which are placed at page number 1062 onwards of the paper book. The learned assessing officer held that the appellant was liable to deduct tax from aforesaid discounts/incentives under section 194H of the Act since the payments made were on the basis of performance of dealers and targets achieved by dealers which was not in the nature of “discount” as the same was not given at the time of taking delivery of goods by the dealers but was given subsequently. In view of above, the assessing officer held that incentive paid by the appellant to dealers was not in the nature of „discount‟, but was paid as reward for effecting sale of vehicles of appellant by the dealers and, therefore, fell within the meaning of the term „commission‟ as defined in section 194H of the Act. Since, the appellant failed to deduct tax at source from the aforesaid incentive under section 194H, the assessing officer disallowed 30% of the entire expenditure of Rs. 180,55,16,707/- under section 40(a)(ia) of the Act. Further, the assessing officer disallowed 30% of total trade discount of Rs. 56,90,94,045 given to dealers on sales invoice at the time of sale while alleging that the same was based on achievement of turnover targets, which represented commission on which TDS under section 194H was liable to be deducted. 33. The learned authorised representative submitted that The Tribunal in assessment year 2007-08 decided the issue in favour of the appellant relying on the decision of Delhi High Court in the case of CIT vs. Mother Dairy Ltd. (ITA No. 1925/2010) and Jai Drinks Pvt. Ltd. (336 ITR 383), holding that the discount in question is not in the nature of commission but an incentive for higher sale targets. It is respectfully submitted that the aforesaid finding was followed by the Hon‟ble Tribunal in the AY 2010-11 and 2011-12, wherein similar disallowance made by the assessing officer was deleted. While deciding the appeal for the assessment years 2012-13 and 2013-14, the Hon‟ble Tribunal decided the issue in favor of the appellant following the orders for the assessment years 2010-11 and 2011- 12 . Further, in the order passed for assessment years 2009-10 and 2015- 16, the Hon‟ble Tribunal has decided the issue in favor of the appellant by Page | 32 following the orders passed for the assessment years 2010-11 to 2013-14. Further, the Courts have in the following decisions rendered after the order passed by the Tribunal also reiterated the aforesaid legal positions: i. Ahmedabad Stamp Vendor Association v. Union of India [2002] 257 ITR 202 - affirmed by the Hon‟ble Supreme Court in 348 ITR 378. ii. Bharti Airtel Ltd. v. DCIT: [2015] 372 ITR 33 (Karnataka HC) iii. PCIT v. Gujarat Narmada Valley Fertilizer And Chemicals Ltd.:[2019] 266 Taxman 19 (Gujarat)(MAG) iv. CIT (TDS) v. OCM India Ltd. – [2018] 408 ITR 369 (P&H) v. Hindustan Coca Cola Beverages (P.) Ltd. v. CIT: [2018] 402 ITR 539 (Raj. HC) 34. Without prejudice, it is submitted that the appellant was under the bonafide belief that no tax was required to be deducted there from. Reliance in this regard is also placed on the decision of Bombay High Court CIT v. Kotak Securities Ltd.: 245 CTR 3, wherein it was held that an expenditure cannot be disallowed under section 40(a)(ia) of the Act, where the failure on the part of assessee in not deducting tax at source was on the basis of bonafide belief. Further, it is submitted, that non-deduction of tax at source on a bona fide difference of opinion, would result in disallowance of expenditure in the hands of payer in perpetuity, which is not the intent of the provisions of section 40(a)(ia) of the Act. In the present case, as submitted above, the appellant appoints various dealers and provides various incentives/discounts from time to time under various schemes in order to increase sales to dealers and ultimate customers and during the relevant previous year, the appellant incurred expenditure of Rs. 237,46,10,752/- on account of various incentives/discounts given to dealers, out of which, expenditure aggregating to Rs. 180,55,16,707/- related to discounts offered by the company to various stockiest/dealers and Rs. 56,90,94,045/- on account of trade incentives, The Revenue, on the other hand, on the basis of the aforesaid facts, contends that incentives/discounts were not given by Page | 33 way of reduction in the sales invoice at the time of delivery of the vehicle, the same consequentially fall within the meaning of word „commission‟ as defined in section 194H of the Act and the appellant thus was under obligation to deduct tax at source there from, in terms of the said section. There is thus bona fide difference of opinion between the appellant and the Revenue regarding obligation to deduct tax at source out of the payment made. As a result of the view formed by the Revenue, the appellant would not be deducting tax at source, in future as well (out of such expense payment) and there would, in terms of the proviso, be no occasion for the appellant to be deducting / making payment of tax deducted at source to be entitled to deduction therefore in a later year(s). Section 40(a)(ia) of the Act would operate to deny deduction for an expense for all times to come. In other words, deduction for the amount of expense would be lost forever, notwithstanding that the deductee / recipient of income out of whose income tax had to be deducted at source, has already paid tax on such income. In our respectful submission, to the aforesaid extent, provisions of section 40(a)(ia) of the Act are harsh and seek to discriminate against an assessee, who has failed to deduct tax altogether vis-à-vis another assessee who has defaulted in depositing tax deducted at source in time. Although, the latter default is more serious in as much as the tax payer enjoys moneys legitimately belonging to Government. The provisions of section 40(a)(ia) of the Act only seek to defer the deduction for expenditure in the hands of such payer to the year(s) in which tax deducted is ultimately deposited, whereas in the case of a payer who has failed to deduct tax at source, the deduction or expenditure is lost in perpetuity. It is submitted, that considering the aforesaid is not the legislative intent, expenditure cannot be disallowed under section 40(a)(ia), where tax has not been deducted on account of bonafide belief. 35. Further, without prejudice, it is submitted, that since the payees have also paid tax on the income receivable from the appellant, no disallowance could be made under section 40(a)(ia) of the Act for alleged default in deduction of tax at source by the assessee. The aforesaid legal position has been endorsed by the Finance Act, 2012 whereby section 40(a)(ia) of the Act has been amended to provide that the assessee shall be deemed to have Page | 34 deducted and deposited tax, on the amount on which tax was deductible but was, in fact, not deducted, on the date of furnishing of return of income by the resident payee, if the resident payee has included the said amount in its taxable income and has furnished certificate from a Chartered Accountant in the prescribed form, to this effect. It is further submitted that the onus is on the assessing officer to establish whether tax has been paid or not by the recipient. [Refer: Jagran Prakashan Ltd. v. Dy. CIT 345 ITR 288 (All. HC) and Aligarh Muslim University v. ITO: 189 TTJ 794 (Agra ITAT)] In view of the aforesaid, since the AO has not established that the recipients have not discharged their tax liability qua receipt from the appellant, no disallowance under section 40(a)(ia) of the Act is called for. For the aforesaid cumulative reasons, no portion of the aforesaid expenditure incurred during the year calls for being deleted during the year under section 40(a)(ia). 36. We have carefully considered the rival contention and perused the orders of the lower authorities. We find that the identical issue has been decided by the coordinate bench in assessee‟s own case for earlier years holding that no disallowance u/s 40 a(ia) could have been made for non-deduction of tax in the hence of the assessee. The coordinate bench followed the decision of the honourable jurisdictional High Court. No distinguishing features were shown to the assessee, which shows that there are changes in the facts and circumstances of the case or under the provisions of the law. Therefore, the judicial precedent deserves to be followed. In view of this, we respectfully following the decision of the coordinate bench in assessee‟s own case for assessment year, we also hold that the above sum is not in the nature of discount on which tax is required to have been deducted by the assessee Under the provisions of Section 194H of the act. Therefore, without looking into the alternative arguments raised by the learned authorised representative, this ground of appeal is decided in favour of the assessee and the disallowances directed to be deleted. 37. Ground number 11 is with respect to Gains from sale of investments income treated as business income. The fact shows that The appellant invests surplus funds arising in the course of business under various modes of investment like mutual funds/PMS, shares, etc., The gains realized from Page | 35 sale of such various instruments, amounting to Rs.204.54 crores during the relevant previous year, were disclosed under the head 'capital gains'. The AO held that, having regard to the magnitude/volume of total turnover from sale of investments, the aforesaid income was taxable under the head „business income‟. Therefore, the assessing officer made an addition of Rs.204.54 crores under the head „business income‟ instead of “capital gains” as declared by the appellant. 38. The learned authorised representative submitted that The aforesaid issue is squarely covered in favour of the appellant by the decision of the Delhi bench of the tribunal in the appellant‟s own case for the AY 2007-08 and 2008-09, wherein after considering the legal position and intention of the appellant company, the Tribunal came to the conclusion that income from sale of shares/mutual funds/PMS etc. would be taxable as capital gains, instead of business income brought to tax by the assessing officer on the basis that the appellant (a) was not a trader in stock; (b) had no intention of holding the shares as stock; (c) sales were effected by delivery (d) that the department had itself in earlier years taxed such transactions under the head capital gains. It would be apposite to note that the Tribunal, vide order dated 24.10.2016 passed in the appellant‟s own case for AY 2010-11 and 2011-12, reversed the action of AO in changing the head of income and held that in cases where an appellant treats investments made in shares as capital assets, in view of Circular 6/2016 of the Board, gains/profits on sale of such investments shall be treated as capital gains and not income from business/profession. While deciding the appeal for the assessment years 2012-13 and 2013-14, the Hon‟ble Tribunal decided the issue in favor of the appellant following the orders for the assessment years 2010-11 and 2011- 12. Further, in the order passed for assessment years 2009-10 and 2015- 16, the Hon‟ble Tribunal has decided the issue in favor of the appellant by following the orders passed for the assessment years 2010-11 to 2013-14. 39. We have carefully considered the rival contention and perused the orders of the lower authorities. The learned departmental representative could not show that the facts in this case are different from the facts for which the coordinate benches have decided the issue in favour of the assessee for several earlier years. It was also not shown to us that the assessee has Page | 36 changed the it‟s characteristics from investor to the trader or holding those shares on mutual funds as stock in trade. Further when the Department had itself in earlier years taxed such transaction Under the head capital gains, respectfully following the decision of the coordinate bench in assessee‟s own case for earlier years we also hold that the income is chargeable to tax Under the head the capital gains and not income from business of profession. Accordingly, ground number 11 of the appeal of the assessee is allowed. 40. Ground number 12 of the appeal of the assessee is with respect to the disallowance u/s 14 A of the income tax act with respect to the computation of such disallowance under rule 8D of the income tax rules 1962. The fact shows that During the relevant previous year, the appellant company earned dividend/interest income of Rs. 22.32 crores from investments in shares, bonds, and mutual funds, which was exempt under section 10(34)/10(35)/10(15)(iv)(h) of the Act. In view of the provisions of section 14A of the Act, the appellant suo moto disallowed Rs.79.15 lacs in the return of income, being salary of two employees of the company who were involved in treasury function along with portfolio management fee. Assessee submitted working of the disallowance offered as per page number 1298 – 1299 of the paper book. In the assessment order, the assessing officer, without giving any reasons, did not accept the method of disallowance computed by the appellant under section 14A and made further disallowance of Rs. 289.94lacs invoking provisions of Rule 8D of the Rules after reducing the suo moto disallowance of Rs. 66.88 lacs made by the appellant in the return of income. 41. The learned authorised representative submitted that as per section 14A(2), disallowance under that section as per Rule 8D can be made only if the assessing officer records satisfaction/finding as to the incorrectness in the method of disallowance followed by the appellant. In the absence of any satisfaction recorded in the assessment order, the disallowance as per Rule 8D needs to be deleted. Reliance in this regard is placed on the following decisions: i. CIT vs. Walfort Share & Stock Brokers 326 ITR 1(SC) Page | 37 ii. Godrej & Boyce Manufacturing Company Ltd. VS. DCIT: 394 ITR 449(SC) iii. Maxopp Investment Ltd: 347 ITR 272 (Del.)- Affirmed by the Hon‟ble Supreme Court in 402 ITR 640 iv. CIT v. Essar Teleholdings Ltd.: 401 ITR 445 (SC) v. PCIT v. Vedanta Ltd.:[2019] 261 Taxman 179 (Delhi) vi. H.T. Media Limited v. PCIT: 399 ITR 576 (Del) vii. Eicher Motors Ltd. vs. CIT: 398 ITR 51 (Del) viii. PCIT vs. U.K. Paints (India) (P.) Ltd.: 392 ITR 552 (Del.) ix. CIT v. Abhishek Industries Ltd.: 380 ITR 652 (P&H) x. CIT vs. I.P. Support Services India (P) Ltd: 378 ITR 240 (Del) xi. Joint Investments (P.) Ltd. v. CIT: 372 ITR 694 (Del) xii. CIT v. Taikisha Engg. India Ltd.: 370 ITR 338 (Del.) 42. It was further submitted that even otherwise, there is no nexus of expenses, like interest expenditure and other administrative expenses with investments, warranting disallowance under section 14A. 43. With respect to the interest expenditure, it was submitted that the appellant is a cash rich company, which does not borrow funds for making investment. The marginal interest expenditure of Rs. 2.15 crores was incurred on other temporary loans/dealers deposit, having nexus with main business function. Further, no direct nexus of interest expenditure with investments or earning of dividend income was established by the assessing officer, for which the initial burden was on the assessing officer. The appellant, it is submitted, had substantial free reserves of Rs 6,500.72 crores at the beginning of the relevant previous year and had also generated substantial surplus/interest free funds of Rs. 3,913.79 crores during the year, against which additional investments made during the year was of Rs. 2,271.34 crores only. In such circumstances, it is to be presumed that only interest free funds have been utilized for making investments during the year. Reference, in this regard, is made to the following decisions: Page | 38 i. East India Pharmaceutical Works Ltd. v. CIT: 224 ITR 627 (SC) ii. CIT v. Reliance Industries Ltd.: 410 ITR 466 (SC) iii. CIT v. UTI Bank Ltd.: 215 Taxman 8 - The Supreme Court dismissed the revenue‟s SLP in Civil Appeal No. 468/2014 iv. Woolcombers of India Ltd. v. CIT: 134 ITR 219 (Cal.) v. PCIT v. Basti Sugar Mills Co. Ltd.: ITA No. 205 of 2018 (Del HC) vi. PCIT v. Reebok India Company: [2018] 259 Taxman 100 (Delhi) vii. Indian Explosives Ltd. V. CIT: 147 ITR 392 (Cal.) viii. Alkali & Chemicals Corp of India Ltd. v CIT: 161 ITR 820 (Cal) ix. CIT v RadicoKhaitanLtd : 274 ITR 354 (All) x. CIT v Dhampur Sugar Mills Ltd : 274 ITR 370 (All) xi. CIT v. United Collieries Ltd. : 49 Taxman 227 (Cal) xii. CIT v. Enamour Investment Ltd.: 72 Taxman 370 (Cal) xiii. CIT v. Caroline Investment Ltd.: 87 Taxman 238 (Cal) xiv. CIT v. Kanoria Investment (P) Ltd.: 232 ITR 7 (Cal) xv. CIT vs. Hotel Savera: 239 ITR 795 (Mad) xvi. Smt. Chanchal Katyal v. CIT: 298 ITR 182 (All.) xvii. CIT v. Reliance Utilities and Power Ltd.: 313 ITR 340 (Bom) xviii. CIT v. HDFC Bank Ltd.: 284 CTR 414 (Bom.) xix. Hero Honda Finlease Ltd vs. ACIT: ITA No. 3726 & 6102/Del/2012 (Del) 44. Reliance is also placed on the following cases, wherein, the Courts have repeatedly held that interest expenditure cannot be disallowed under section 14A of the Act, where the appellant had sufficient surplus funds and there was no finding by the assessing officer of any direct nexus of borrowed funds with investments: Page | 39 i. Godrej & Boyce Manufacturing Company Ltd. VS. DCIT: 394 ITR 449(SC) ii. Pr. CIT vs. GMM Pfaulder Ltd.: ITA No. 506 of 2017 dated 31.07.2017 (Guj) iii. CIT v. Max India Ltd.: 388 ITR 81 (P&H) iv. CIT vs. Suzlon Energy Ltd.:[2013] 215 Taxman 272 (Gujarat) v. CIT vs. M/s. Ashok Commercial Enterprises: ITA No. No.2985 of 2009 (Bom) vi. LubiSubmeribles Ltd.: ITA No.868 of 2010 (Guj) vii. CIT vs. K. Raheja Corporation Pvt Ltd: ITA No.1260 of 2009 viii. Gujarat State Fertilizers and Chemicals Ltd : Tax Appeal No. 82 of 2013 (Guj HC) ix. Hero Honda Finlease Ltd vs. ACIT: ITA No. 3726/Del/2012 (Del) x. EimcoElecon (India) Ltd. v. Addl. CIT: 142 ITD 52 (Ahd.) 45. With respect to the administrative expenditure it is submitted that expenses debited in the profit and loss account (other than those suo moto disallowed) pertains to main business activity of manufacturing of two wheelers; revenue earned wherefrom was Rs. 28,599.30 crores as against Rs. 22.32 crores earned by way of dividend from investments which is only 0.0780% of the total revenue. The appellant company instead of keeping idle the liquid funds generated from the aforesaid business, temporarily lying-in bank accounts, invests them in various shares/mutual funds/portfolio management schemes. The decision to make such temporary investment, which is part of daily cash management, is not taken by the directors of the company, who are involved in the core business functions carried out by the company. The board of directors has delegated the aforesaid task to the treasury department. It would be appreciated that the treasury department was responsible for managing the overall fund flow of the company and different roles had been assigned to different people Page | 40 depending on their caliber and expertise. Accordingly, a team of certain persons (2 employees during the relevant year) in the treasury department, who on the basis of broad investment guidelines/policy of the company, invest idle/liquid funds on daily basis in various schemes, depending upon the funds requirement. Apart from salary of the aforesaid two employees, which was suo moto disallowed in the return of income, no other expenditure, including interest expenditure, was incurred in relation to earning of exempt income nor has the same been pointed out by the assessing officer. 46. It was submitted that for the aforesaid cumulative reasons, additional disallowance made in the assessment order under section 14A of the Act calls for being deleted. 47. He further submitted that it is pertinent to point out, that the Tribunal in the appellant‟s own case for the assessment year 2007-08 and 2008-09 set- aside the matter to the file of the assessing officer to be decided afresh as per law, having regard to the satisfaction to be recorded qua correctness of the suo-moto disallowance made by the appellant in the return of income. It would further be appreciated that similar addition made by the assessing officer in the assessment year, viz., AY 2014-15 was deleted by the CIT(A) vide recent order dated 31.12.2018 following the orders of the Hon‟ble Tribunal for assessment years 2010-11 and 2011-12. 48. We have carefully considered the rival contention and perused the orders of the lower authorities. We find that the issue is squarely covered in favour of the assessee by the order of the coordinate bench wherein for assessment year 2007 – 08 and 2008 – 09 the issue is set-aside to the file of the learned assessing officer to decide the issue afresh with respect to the satisfaction recorded by the learned assessing officer with respect to the SUO Moto disallowance made by the assessee in the returned income. The learned assessing officer is further directed to consider the arguments raised by the assessee. The learned assessing officer is also required to note the fact that the assessee has huge interest free funds available more than the amount invested in the securities that resulted into earning of tax-free income during the year therefore, no interest disallowances u/s 14 A read with rule Page | 41 8D of the income tax rules could be made. Further, if the learned assessing officer crosses the threshold of showing that the satisfaction was recorded with respect to the disallowance offered by the assessee about its correctness, then also the learned assessing officer is further directed to only take into consideration those investments which resulted into tax free income during the year for purpose of working out any further disallowance Under this Section. Accordingly, respectfully following the decision of the coordinate bench in assessee‟s own case for assessment year 2007 – 08 and 2008 – 09 we set-aside this ground of appeal back to the file of the learned assessing officer. 49. Ground number 13 is with respect to Proportionate cost of Model Fee considered in valuation of closing stock. 50. The fact shows that The appellant manufactures two-wheelers under technical collaboration agreement entered into with Honda Motor Co. Ltd., Japan („Honda‟). In accordance with the above collaboration agreement, the appellant pays model fee to Honda to obtain design / know-how to manufacture a new model of two-wheeler. The said expenditure is incurred prior to commencement of production of the new model. The assessing officer held that expenditure incurred by the appellant towards model fee is directly related to manufacture of new models of two-wheelers and, therefore, needs to be attributed to the value of closing stock of finished goods of two-wheelers. Accordingly, the assessing officer on proportionate basis, worked out a sum of Rs. 40,87,000 out of depreciation on model fee debited to the profit and loss account, as attributable to the value of closing stock and made addition of the said amount to the income of appellant. 51. The learned authorised representative submitted that the aforesaid issue is squarely covered in favour of the appellant by the decision of the Delhi Bench of the Tribunal in appellant‟s own case for assessment years 2010-11 and 2011-12 wherein following the order for assessment year 2008-09, similar disallowance of depreciation on model fee was deleted by the Tribunal on the ground that expenditure was incurred on new model fees prior to commencement of production of new models of two wheelers, and even otherwise this exercise would be revenue neutral in a broader perspective as the same adjustment would be required to be made to the Page | 42 opening stock of finished goods for the year under consideration. While deciding appeal for the assessment years 2012-13 and 2013-14, the Hon‟ble Tribunal decided the issue in favor of the appellant following the orders for the assessment years 2010-11 and 2011-12. Further, in the order passed for assessment years 2009-10 and 2015-16, the Hon‟ble Tribunal has decided the issue in favor of the appellant by following the orders passed for the assessment years 2010-2011 to 2013-14. 52. We have carefully considered the rival contention and perused the orders of the lower authorities. The argument of the learned authorised representative that this issue is squarely covered in favour of the assessee for the assessment year 2010 – 11 and 2011-12 and further for assessment year 2012 – 13 and 2013 – 14 no distinguishing features were pointed out before us. It was not shown before us that the expenditure incurred by the assessee is for any new line of business. In view of this respectfully following the decision of the coordinate bench in assessee‟s own case for earlier years we allow this ground of appeal and direct the learned assessing officer to delete the disallowance. 53. Ground number 14 of the appeal is with respect to the disallowance Disallowance of reimbursement of foreign traveling expenses to directors/employees. The fact shows that in the course of discharge of official duties, the employees of the company are required to travel abroad and incur incidental expenses in foreign currency like local conveyance, boarding and lodging expenses, telephone expenses etc. The appellant had introduced a policy fixing per diem allowance payable to employees, depending upon the grade/category of the employees and the place/country of travel. Assessee also produced the copy of the policy. The employees are not entitled to any extra allowance in the event actual expenditure incurred by the employee is in excess of such per diem allowance. For payment of per diem allowance, as per policy, the appellant does not require the expenses to be necessarily supported / backed by bills considering the practical difficulties/impossibilities in producing invoices for petty expenses like local conveyance, telephone bills, etc. The employees are only required to submit details of expenditure incurred in specified form, on basis of which travel bill is settled. In the assessment order, the AO made disallowance of Page | 43 Rs.6,81,54,657 (comprising of Rs.2,65,30,809 in respect of Dharuhera, Gurgaon, Haridwar, Neemrana plants, Rs.20,58,108 in respect of Jaipur CIT and Rs. 3,95,65,741 in respect of head office expenses) out of expenditure incurred towards re-imbursement of foreign travel expenses incurred by employees, on the ground that declaration furnished by the employees was not a sufficient evidence to establish incurrence of actual expenses, which were required to be supported with bills/invoices of factual expenditure incurred by the employees. Summary of disallowance with list of foreign travelling expenses and copies of sample invoices for Dharuheraplant, Gurgaon plant, Haridwar plant and Head Office are at page number 1300 and 135 of the paper book 54. The learned authorised representative submitted that aforesaid issue is squarely covered in favour of the appellant by the decision of Delhi bench of tribunal in the appellant‟s own case for the AY 2007-08 and 2008-09, wherein the Tribunal held that disallowance cannot be made merely on the basis that vouchers were not produced by the employees, which has been reaffirmed by the Tribunal in the order dated 24.10.2016 passed for the assessment years 2010-11 and 2011-12. While deciding appeal for the assessment years 2012-13 and 2013-14, the Hon‟ble Tribunal decided the issue in favor of the appellant following the orders for the assessment years 2010-11 and 2011-12. Further, in the order passed for assessment years 2009-10 and 2015-16, the Hon‟ble Tribunal has decided the issue in favor of the appellant by following the orders passed for the assessment years 2010-2011 to 2013-14. 55. We have carefully considered the rival contention and perused the orders of the lower authorities. We find that the identical issue has been decided in favour of the assessee deleting the above disallowance for the earlier assessment year. The learned departmental representative could not point out that any of such expenditure are incurred which are disallowable u/s 37 (1) of the act or after in nature. In view of this respectfully following the decision of the coordinate bench for earlier years we direct the learned assessing officer to delete the disallowances out of travelling expenditure. 56. Ground number 15 is with respect to Disallowance of expenditure on account of Royalty on the ground of being capital in nature, The appellant, Page | 44 on the basis of technology provided by M/s. Honda Motors Co. Ltd., Japan ("HM"), has been manufacturing and selling two wheelers in the Indian Market since 1985. HM being a global player has strong R & D Centre and has inter alia developed various automobile products from time to time. As per the said agreement, HM provided know how, technical information and necessary technical support to use such intellectual property rights with respect to the parts and products. The appellant has since launched various models of motorcycles by obtaining the technology provided by the associated enterprises. The appellant company has been manufacturing two wheelers in India on the basis of technology provided by the associated enterprise. However, during financial year 2010-11, because of commercial considerations, HM decided to exit the joint venture. Consequently, a Memorandum of Understanding („MOU‟) dated December 16, 2010 was entered into between the appellant and HM and the license agreement was mutually terminated. (Copy Memorandum of Understanding dated 16.12.2010 entered for share transfer agreement is enclosed at page no. 1440-1448 of PB on Merits - Vol 2) Further, in terms of the MOU two new license agreements were entered into between the appellant and HM. (Copy Memorandum of Understanding dated16.12.2010 for New License agreement is enclosed at page no. 1449-1477 of PB on Merits - Vol 2) Copy of License Agreement (License A product) and License Agreement (License B product) dated 22.01.2011 are enclosed at page no. 1478-1521 and 1522- 1558 of PB on Merits - Vol 2, respectively. In terms of the license agreement for License „A‟ Products, the appellant received the following rights: (i) Rights to use the technology, design and drawings for manufacture of 18 specific models of motor cycles till perpetuity (ii) Right to make modifications to the technology, design and drawings (iii) Unrestricted right to export such products in the overseas markets. 57. The appellant, subsequently had entered into a new License Agreement (for License B products) dated 22.01.2011 for the purpose of providing appellant with transitional support and under the said agreement the appellant was provided right to manufacture 4 new models (namely (a) Passion XPRO, (b) Page | 45 Ignitor, (c) Maestro and d) Impulse) using the technology provided by HM on payment of lump sum model fee and royalty. Since the right to manufacture the aforesaid 4 models of motorcycles was not included in the License A agreement and therefore, in order to be able to manufacture the said models of motorcycles the appellant had to enter into separate agreement for manufacture of License „B‟ products. 58. The appellant after separation from Honda Motors Corporation, Japan, was not in a position to independently develop and launch new models of motorcycles immediately. Therefore, in order to survive in a highly competitive market the appellant requested the associated enterprise to provide right and technology for manufacture of four new models of motor cycles. Accordingly, the appellant and the associated enterprise entered into license B agreement allowing the appellant the right to manufacture a) Passion XPRO, (b) Ignitor, (c) Maestro and d) Impulse models of motorcycles. 59. During the relevant previous year, in terms of the aforesaid license B agreement, the appellant booked Rs. 82.84 crores as royalty, to Honda, which was claimed as revenue deduction. The aforesaid payments were made after deducting tax at source @10% being the rate of tax applicable in relation to payment of royalty and fees for technical services under Article 12 of Indo-Japan DTAA. 60. In the assessment order, the AO treated the aforesaid expenditure incurred by way of royalty paid to Honda as capital expenditure on the ground that the appellant had received benefit of enduring nature. The assessing officer, accordingly, disallowed Rs. 62.13 crores, out of total expenditure of Rs. 82.84 crores on account of royalty after allowing depreciation @ 25% thereof, amounting to Rs. 20.71 crores. 61. The learned authorised representative submitted that the same is not a capital expenditure. His arguments were as Under:- Royalty– not capital expenditure Page | 46 No ownership rights - only limited right to use During the currency of the agreement, the appellant only had a limited right to use the technology of Honda. Ownership/proprietary rights in the technical know-how continued to vest in Honda and the appellant was not authorized to transfer, assign or convey the know- how/technical information to any third party as the appellant only acquired limited right to use and exploit the know-how. Non-exclusive license The aforesaid right vested with the appellant was not exclusive in as much as, in terms of Article 2 and article 9 of License B agreement, Honda reserved the right to provide technology to its affiliates to manufacture motorcycles. That aforesaid limited right were available to the appellant and the fact of such rights being not exclusive can be gathered from the following clauses of the agreement:- - ARTCILE 2 – Grant of License and Exclusivity - ARTICLE 17 – Maintenance of Secrecy - ARTICLE 18 – Limitation of Use, and other Prohibition - ARTICLE 21 – Validity and Infringement - ARTICLE 27 –Trademarks - ARTICLE 33 - Effect of Expiry and Termination Re: Continuing use of know-how after expiration of the contract: Further, on perusal of Article 22 of the License B agreement, it would be appreciated that on termination of the agreement, the appellant was required to return all the documents and materials to Honda and promptly discontinue the use of trademarks licensed by Honda and the appellant did not have Page | 47 any right to continue using such know-how. It is thus clear that there is no explicit or implied intention to transfer or create ownership in the technical know-how /technical information in the appellant. On the contrary, it is unequivocally agreed to between the parties that the know- how should at all times remain the property of Honda. Further, the conditions in the agreement as to non- assignability, confidentiality and the secrecy of the know-how also indicate that the appellant merely obtained the right to use the know-how during the currency of the agreement. Payment under the agreement – allowable revenue expenditure As per the various clauses of the agreement, it would be appreciated that the royalty payable to Honda is only for the purpose of use of technical assistance in the manufacture and sale of products and the appellant has not acquired any capital asset, much less in the nature of intellectual property rights or patents belonging to Honda, which, in unequivocal terms, as provided in the agreement vested in absolute ownership of Honda at all times. Reliance in this regard is placed on the following decisions wherein it has been held that where payment is made to simply use the technical know-how/knowledge provided by the foreign collaborator as opposed to acquisition of ownership rights therein, the payment made would be regarded as revenue expenditure.  CIT v. Ciba India Ltd.: 69 ITR 692 (SC)  CIT vs. British India Corp. Ltd. [1987] 165 ITR 51 (SC)  Alembic Chemical Works Co. Ltd. v. CIT: 177 ITR 377 (SC) Page | 48  Shriram Refrigeration Industries Ltd. v. CIT: 127 ITR 746 (Del HC)  Triveni Engineering Works Ltd. vs. CIT : 136 ITR 340 (Del)  Addl. CIT vs. Shama Engine Valves Ltd. : 138 ITR 217 (Del)  CIT vs. Bhai Sunder Dass& Sons P. Ltd. : 158 ITR 195 (Del)  CIT vs. Lumax Industries Ltd. : 173 Taxman 390 (Del)  Shriram Pistons & Rings Ltd. vs. CIT : 171 Taxman 81 (Del)  CIT vs. Shri Ram Pistons and Rings Ltd. : 220 CTR 404 (Del)  Goodyear India Ltd. vs. ITO : 73 ITD 189 (Del)(TM)  ITO vs. Shivani Locks : 118 TTJ 467 (Del)  Climate Systems India Ltd. vs. CIT: 319 ITR 113 (Del-HC)  CIT vs. Sharda Motor Industries Ltd: 319 ITR 109 (Del-HC)  CIT vs. EsselPropack 325 ITR 185 (Bom)  CIT v. Modi Revlon (P) Ltd: (2012) 9 TMI 48 (Del.)  Mafatlal Denim Ltd. V. DCIT: 2011 (12) TMI 351 (Mum.)  Climate Systems India Ltd. vs. CIT: 319 ITR 113 (Del-HC)  Goodyear India Ltd. vs. ITO : 73 ITD 189 (Del)(TM)  CIT v. Avery India Ltd. 207 ITR 813 (Cal)  CIT v. Bhai Sunder Dass& Sons P. Ltd.:158 ITR 195 (Del)  CIT v. DCM Ltd.: ITA No. 87-89/1992 (Del.)(HC)  CIT v. Denso India P. Ltd.: ITA 16/2008 (Del.) (HC)  CIT v. Eicher Motors Ltd.: 293 ITR 464 (MP)(Indore Bench) Since, no proprietary rights in the know how vested in the appellant, the appellant being a mere licensee with limited rights to use the technical assistance during the currency of the agreement, there is no explicit or implied intention to Page | 49 transfer or create ownership in the technical know-how /technical information in the appellant. In view of the aforesaid, expenditure by way of royalty incurred by the appellant was allowable revenue deduction since-  payment was made for limited license to use the know-how provided by Honda, as the proprietary and ownership rights in the same continued to remain vested with Honda at all times and, therefore, there was no absolute parting of know-how in favour of the appellant resulting in acquisition of any asset,  no benefit of enduring nature in the capital field accrued to the appellant, even if the license to manufacture and sell products in India is assumed to be exclusive, except for grant of license to HMSI,  the subject payment made did not cover consideration paid for setting up of the manufacturing facility in India,  On termination of the agreement, the appellant was required to return all the documents and materials to Honda and promptly discontinue the use of trademarks licensed by Honda and the appellant did not have any right to continue using such know-how. The aforesaid issue is covered in favour of the appellant by the decision of Tribunal in the assessment years 2000-01, 2001- 02, 2002-03, 2006-07, 2007-08, 2008-09, 2009-10, 2010-11 and 2015-16 wherein the Tribunal has held that annual payment of royalty was allowable revenue expenditure. It would be pertinent to note that he aforesaid orders of the Tribunal relating to assessment years 2000-01 to 2002-03 Page | 50 have been affirmed by the Delhi High Court in the appellant‟s own case reported as CIT v. Hero Honda Motors Ltd.: 372 ITR 481. In orders passed by the Tribunal for assessment years 2011- 12 to 2013-14 and 2015-16, the royalty paid in terms of license B agreement has been held to be an allowable revenue deduction. 62. We have carefully considered the rival contention and perused the orders of the lower authorities. This issue has been considered by the coordinate bench in assessee‟s own case for assessment year 2011 – 12 to 2013 – 14 and 2015 – 16 where the royalty payment made in terms of license agreement has been held to be an allowable revenue deduction. Therefore respectfully following the decision of the coordinate bench we also hold that the royalty paid by the assessee is allowable revenue expenditure and cannot be held to be a capital expenditure accordingly ground number 15 of the appeal of the assessee is allowed. 63. Ground number 16 of the appeal of the assessee is with respect to Disallowance under section 80IC of the Act on account of profit attributable to advertisement and marketing activities carried out at Head Office. Facts shows that in the business of manufacturing and selling two-wheelers, including goods manufactured at eligible unit, the appellant was required to incur marketing expenses. The said expenses were incurred by the Head Office at Delhi. The common expenses, including advertisement/brand creation expenses, etc. incurred at Head Office were allocated to various manufacturing units of the appellant-company, including the unit eligible for deduction under section 80IC, on a rational and scientific basis. In that view of the matter, the expenses on brand /advertisement, etc. incurred at Head Office were duly allocated to manufacturing units and have been deducted, while computing profits of the unit eligible for claim of deduction under section 80IC of the Act. The price realized on sale of the products, i.e., two wheelers, is credited to the profit and loss account and direct and indirect expenses, including advertisement expenses, incurred in relation to sale of the products are reduced there from, for purpose of computing Page | 51 profits of the eligible unit and corresponding claim of deduction under section 80IC of the Act. The learned AO held that profits are derived by the appellant-company because of three assets, viz., (1) manufacturing assets, (2) brand assets and (3) marketing assets whereas deduction under section 80IC is available only on profits derived from business of manufacturing of specified articles or things. It was further observed that the manufacturing and marketing activities were carried out at Head Office and, therefore, the brand developed was not owned by the eligible unit, which came into existence much later than the existence of the appellant-company as a whole. Thus, part of the profits earned by eligible unit should have been attributed to advertisement/marketing activities carried out by head office. In order to attribute profits to marketing/advertisement activities, AO computed rate of net profit for the financial year 1984-85, being the first year of operations of the appellant company, at 6.85% on an arbitrary basis and applied the same to arrive at the profit solely attributable to the manufacturing activity of Haridwar unit. On the basis of above, the assessing officer computed profit attributable to the manufacturing activity at Rs.215.66 crores. Accordingly, deduction under section 80IC qua remaining profit of Rs. 241.79 crores, allegedly attributable to marketing and advertisement activity was disallowed. 64. The learned authorised representative submitted that that the issue is squarely covered in favor of the appellant by the order dated 24.10.2016 passed by the Tribunal for immediately preceding assessment years, i.e. AY 2010-11 and AY 2011-12, wherein identical disallowance made by the AO has been deleted. The Tribunal, in coming to the aforesaid discussion, reiterated that the head office is not a separate profit centre and, therefore, no profit is to be separately attributed to such activity. It further observed that, for the purpose of working out eligible deduction under section 80-IC of the Act, actual expenses incurred at the head office are to be allocated between various profit centres on a rational and scientific basis. While deciding the appeal for the assessment years 2012-13 and 2013-14, the Hon‟ble Tribunal decided the issue in favor of the appellant following the orders for the assessment years 2010-11 and 2011-12. Further, in the order passed for assessment years 2009-10 and 2015-16, the Hon‟ble Page | 52 Tribunal has decided the issue in favor of the appellant by following the orders passed for the assessment years 2010-2011 to 2013-14 65. We have carefully considered the rival contention and perused the orders of the lower authorities. We find that identical issue has been decided by the coordinate bench in the case of the assessee for assessment year 2000 – 11 in assessment year 2011 – 12 in order dated 24/10/2016 where the coordinate bench has held that for the purpose of working out eligible deduction u/s 80 IC of the income tax act the actual expenses incurred at the head office are to be a located between various profit centres on a rational and scientific basis accordingly the coordinate bench deleted the disallowance. For the similar reasons respectfully following the decision of the coordinate bench we also direct the learned assessing officer to delete the above disallowance. Accordingly ground number 16 of the appeal of the assessee is allowed. 66. Ground number 17 of the appeal of the assessee is with respect to the disallowance of deduction under section 80-IC of the Act in respect of interest income earned by eligible unit on loans given to employees/vendors. During the relevant previous year, the eligible unit at Haridwar earned the following interest income, which were credited in the Profit and Loss Account of that unit: S.No . Name /Type of Other Income Amount (in Rs.) 1 Interest on loan given at subsidized rates to the employees 19,11,048 2 Interest on loan provided for working capital support to vendors 1,86,86,418 TOTAL 2,05,97,466 Page | 53 In the return of income, the appellant claimed deduction under section 80IC on the aforesaid „other incomes‟ since the said receipts had direct and immediate nexus with the business of manufacturing and selling of specific articles or things. The assessing officer, without considering the nature of each of the aforesaid receipts, held that the aforesaid interest income were not derived from the business of manufacturing of articles or things and were, therefore, taxable under the head “income from other sources”. Accordingly, the assessing officer disallowed deduction under section 80IC by an amount of Rs.2,05,97,466. 67. The learned authorised representative submitted that It would be pertinent to point out that similar disallowance made by the assessing officer in the preceding assessment years, i.e. AY 2010-11 and AY 2011-12 has been deleted by the Hon‟ble Tribunal vide consolidated order dated 24.10.2016. The Tribunal, after examining the nature of the aforesaid incomes, held that other incomes in the nature of Interest on loan to employees, interest on loan to vendors for working capital support, freight recovery, sundry sales, cash discounting from vendors and exchange fluctuation gain, etc. earned by a unit eligible for deduction under Section 80IC of the Act shall be considered as incidental to the activity of carrying out manufacturing and thus eligible for deduction under that section. Accordingly, the aforesaid issue stands squarely covered in favour of the appellant. While deciding the appeal for the assessment years 2012-13 and 2013-14, the Hon‟ble Tribunal decided the issue in favor of the appellant following the orders for the assessment years 2010-11 and 2011-12 , Further, in the order passed for assessment years 2009-10 and 2015-16, the Hon‟ble Tribunal has decided the issue in favor of the appellant by following the orders passed for the assessment years 2010-2011 to 2013-14. 68. We have carefully considered the rival contention and perused the orders of the lower authorities. This issue is also decided by the coordinate bench in assessee‟s own case for assessment year 2012 – 13 and 2013 – 14 wherein the coordinate bench decided the issue in favour of the appellant. In absence of any change in the circumstances and facts of the case of in law, we respectfully following the decision of the coordinate bench decided Page | 54 ground number 17 and direct the learned assessing officer to delete the disallowance of deduction u/s 80 IC by an amount of Rs 20 5,97,466/–. 69. Ground number 18 is with respect to the disallowance of depreciation Disallowance of depreciation of CED Paint Shop - Put to use test not satisfied. Facts shows that appellant is engaged in the business of manufacture and sale of two wheelers. During the course of relevant assessment year, the appellant launched a new model of scooter namely, „Duet‟. Unlike the other scooter models manufactured by the appellant, who had plastic body parts, the new model was designed with metal body parts. Since the metal body parts were prone to corrosion, it was necessary to paint the metal parts with a primer before applying the desired colour, in order to make the parts resistant to corrosion. Cathode Electro-Deposition („CED‟) is the process used in surface finishing and painting of the metal parts by positively charged paint particles suspended in aqueous medium under direct current. This technology is widely used in automobile industry for painting of various sheet metal parts to give high corrosion resistance of the body parts. The appellant had, during the year, incurred expenditure of Rs. 24.50 crores towards purchase, installation, and commissioning of “CED Paint Shop”, i.e., a complete plant comprising of various machineries, installed at its Gurgaon Plant. Copy of major invoices for purchase of various machineries forming the CED paint shop substantiating that the machinery was purchased and installed during the year are were also submitted placed at page number 221 – 238 of the paper book. The steps towards construction of the said plant were initiated way back in January 2015 and pending capitalization, the expenditure incurred during such stage was accounted under the head of „capital work in progress‟. The said plant was successfully installed and commissioned in the month of October - November 2015 and was even used in manufacture of Duet Scooters during the second half of the year. Since the various parts of machinery comprising in the CED paint shop were delivered and installed in parts, and some of the invoices were received in March 2016, the appellant capitalized an amount of Rs.24.50 crores incurred towards installation and commissioning of- “CED Paint Shop” acquired and commissioned installed at its Gurgaon Plant as on 31.03.2016. Accordingly, since the plant was Page | 55 put to use, albeit for less than 180 days, the appellant claimed depreciation @ 7.50% (half of 15%) under section 32 of the Act amounting to Rs.1,83,75,000 in the return of income. In the draft assessment order, the assessing officer however, denied the aforesaid claim of depreciation amounting to Rs.1,83,75,000 by holding that the appellant failed to place on record documentary evidence to substantiate that the said plant and machinery was purchased and put to use by the appellant on 31.03.2016, despite ample opportunities being provided to the appellant. Before the DRP, the appellant filed certain additional evidences to substantiate that CED paint shop was installed during the year and was used in the manufacture of „Duet‟ model of scooters during the relevant year, and thus, it could not be said that the paint shop was not put to use during the relevant year. The DRP after noting the submissions of the assessee specifically observed that the CED paint shop was being established at Gurgaon plant and for that machinery would have been installed and test run of the shop would have been done. However, contrary to the aforesaid observations, the DRP confirmed the disallowance merely on the ground that the assessing officer has particularly noted that the appellant has purchased and capitalized the machinery on 31.03.2021 and thus, the said machinery could not be said to be put to use on the same day. The assessing officer, in the final assessment order, disregarded the additional evidences filed before the DRP and reiterated the basis for disallowance recorded in the draft order that appellant had failed to place on record documentary evidence to substantiate that the said plant and machinery was purchased and put to use by the appellant on 31.03.2016, despite ample opportunities being provided to the appellant. 70. The learned authorised representative submitted that In this regard, it is submitted as under: (i) CED paint shop was put to use in the relevant year As submitted supra, CED is a deposition of layer of primer coat on pre-treated metal parts by dipping the components inside the positively charged paint bath. CED Paint-shop is used for painting the finished goods of the appellant with a primer coat in order to Page | 56 make the same resistance to corrosion, and is, therefore directly related to business of the appellant. CED Paint Shop was supplied by M/s Durr India Pvt. Ltd. in May 2015 and the installation process had begun in the month of June 2015. The Final Acceptance Report dated 16.10.2015 alongwith the Minutes of Meeting held between Durr India Pvt. Ltd. and the appellant company on 23.11.2015 annexed herewith at page nos. 243 to 247 of the paper book (Merits) Vol -1, states that the plant was installed and commissioned as on 16.10.2015 subject to completion of certain incidental aspects which were fulfilled on 23.11.2015. The aforesaid Report further states that the CED paint shop was ready for production. In the Board‟s Report forming part of the Annual Report for the relevant assessment year, there was a specific mention regarding the CED paint shop [Refer page no. 16 of the paper book (Merits) Vol 1], which is extracted hereunder: “Further, your Company has expanded its capacity by adding a Cathodic Electro Deposition (CED) paint shop and other balancing equipment in a record time of nine months. This paint shop is able to handle quick set up change integration.” Since the CED paint shop was specifically installed in relation to manufacture of specific model of Scooters viz., Duet, the fact that the said model was launched and sold during the year unequivocally proves that the said plant was actually put to use in the relevant assessment year. In this regard, attention is invited to the Annual Report for the relevant year, wherein it was stated that the appellant company had launched the Duet scooters in the month of October, 2015 [Refer page 12 of the paper book (Merits) Vol 1], which is extracted hereunder: “This fiscal year also marks two very significant milestones in Hero’s solo journey as a company. Firstly, in October 2015, Hero introduced the Maestro Edge and Duet scooters - the very first products to have Page | 57 been completely designed and developed by our in-house R&D team. Attractively designed with contemporary styling and loaded with a host of unique features, Maestro Edge and Duet have been well received by customers, helping our company increase its market share in the scooter segment.” Further, the Duet model of scooters has been featured in the Annual Report with the following introduction [Refer page 14 of the paper book (Meris) Vol 1]: “DUET The attractive 110cc Duet comes with a metal body, making it sturdy and durable. Designed for a wide customer spectrum, its features (under-seat mobile charging port, remote seat opening, remote fuel-lid opening, among others) ensure a great riding experience.” It is further stated in the Annual Report that over 1 lakh units of the Duet model have been sold as on 31.03.2016. In view of the aforesaid, it is respectfully submitted that CED paint shop which was specifically installed and commissioned for manufacturing Duet model of scooters was in fact actually used in manufacture and sale of Duet scooters during the relevant year. (ii) Date of capitalisation of CED paint shop not relevant in determining the date of put to use The assessing officer/DRP has, it appears, overlooked the aforesaid evidences furnished by the appellant and summarily denied the claim of depreciation swaying by the fact that capitalization in the books of accounts took place on 31.03.2016. In this regard, it is respectfully submitted that Conveyor for facilitating transfer of components from/to CED Paint Shop was installed in the month of December-January, 2016, however, bills in respect of the same were received in the month of March, 2016, thus the appellant company had capitalised the entire amount in the books as on 31.03.2016. For the same reason, the appellant had recorded the said date as date of put to use of the aforesaid plant Page | 58 and machinery in the Tax Audit Report as well. [Refer, page 130 of the paper book (Merits) Vol 1] Even otherwise, merely because the asset was capitalized in the books on the last day of the year would not be conclusively suggest that the asset was not put to use during the year, specifically when evidence has been furnished substantiating that the asset was installed and actually used during the year. Rebuttal to AO/DRP As submitted supra, the appellant had submitted copy of the Final Acceptance Report dated 16.10.2015 alongwith the Minutes of Meeting held between Durr India Pvt. Ltd. and the appellant company on 23.11.2015 before DRP which clearly substantiated the fact that the said machinery was purchased, installed during the relevant year. Further, the fact the Duet model of scooters was launched, sold during the year as evidenced from the Annual Report and Report of Board of Directors, leaves no doubt that the said machinery was actually put to use in that year itself. In our respectful submission, the aforesaid evidences/submissions have been disregarded by the DRP and disallowance has been confirmed merely on the ground that the machinery was capitalized in the books on 31.03.216. It is further submitted that the observation of the assessing officer in the final assessment order that the appellant did not place on record any evidence to substantiate that CED paint shop was put to use by the appellant on 31.03.2016, is factually and patently erroneous since additional evidences in this regard were submitted before the DRP and the same were even forwarded to the assessing officer for his comments. The assessing officer, in our respectful submission, failed to appreciate the additional evidences submitted by the appellant and merely repeated the perfunctory finding rendered in the draft order. In view of the aforesaid, it is submitted, that the action of the assessing officer/DRP in disallowing depreciation claimed by the Page | 59 appellant on CED paint shop is incorrect and unsustainable, which calls to be deleted. 71. We have carefully considered the rival contention and perused the orders of the lower authorities. In this case it is not in dispute that the assessee has purchased the CED plant. The learned assessing officer has disallowed the depreciation only for the reason that the assessee is accounted for the capitalisation of the asset in the books of account as on 31/3/2016. Merely the accounting entry in the books of accounts of the capitalisation of the asset is at the end of the financial year, the depreciation cannot be disallowed. Even otherwise the assessee has claimed depreciation for half of the year and looking at the number of the units produced by the assessee it cannot be said that the CED plant was not setup/installed/put to use on or before 31/3/2016. The assessee has produced overwhelming evidences of setting up of and putting the asset to use on or before 31/3/2016. In view of this we direct the learned assessing officer to delete the disallowance of the depreciation. Accordingly ground number 18 of the appeal of the assessee is allowed. 72. Ground number 19 of the appeal is with respect to Disallowance of excess depreciation on intangible assets in form of software. During the relevant assessment year, the assessee had acquired software from third parties, which was installed in the computer system of the executives working in different departments and the software so installed was used by them for the purpose of business. Assessee submitted the details of the software acquired by the assessee during the year at page number 248 of the paper book. The aforesaid software so acquired and installed by the appellant was a tangible asset forming integral part of computer, which acted as a tool of trade; or in other words, was in the nature of „plant and machinery‟ used by the appellant for the purpose of business. Accordingly, the computer software did not fall within the meaning of intangible asset under clause (ii) of section 32(1) of the Act rather the same has been specifically classified as a tangible asset under the heading "Plant" in Appendix-I to the IT Rules entitled to depreciation at 60 per cent. Thus, the appellant claimed depreciation of Rs.10,71,72,776 @ 60 percent in respect of such computer software. The assessing officer/DRP disallowed depreciation to the extent of Page | 60 Rs.6,25,17,452, out of total depreciation of Rs.10,71,72,776 claimed on computer software at the rate of 60% on the ground that such software constituted intangible assets which was eligible for depreciation at normal rate of 25% thereto. It was also held that only software which is purchased as a part of the computer system would be eligible for depreciation @ 60% and since the appellant has purchased the software from third parties for business use, the same would not eligible for depreciation @ 60%. The assessing officer had also drawn adverse inference on the ground that the appellant had itself disclosed software as an „intangible asset‟ in its books of accounts. 73. The learned authorised representative submitted as Under :- In this regard, it is respectfully submitted that that the aforesaid software was in the nature of tangible asset under the heading „plant‟ in Appendix I to the Rules and consequently cannot be treated as an „intangible asset‟. Further, since the Rules specifically provide for depreciation on software at the rate of 60% of written down value, the assessing officer was not correct in holding such software, fell in the general category of intangible assets and was thus, eligible for depreciation at normal rate of 25% applicable to intangible assets. Re: Computer Software is the nature of a tangible asset It is respectfully submitted that the software so acquired from third parties and installed by the assessee was a tangible asset, which act as a tool of trade; or in other words, is in the nature of „plant and machinery‟ used by the assessee for the purpose of business. Such software, therefore, it is respectfully submitted, does not fall within the meaning of intangible asset covered under clause (ii) of section 32 (1) of the Act. Page | 61 Further, on perusal of the details of software acquired by the appellant during the year, it is apparent that the software licences acquired by the appellant such as SAP Licences, MS Office License, PTC Software License, Google Apps etc., are in the nature of canned software/off the shelf software. In this regard, attention is invited to decision of the Hon‟ble Supreme Court in the case of Tata Consultancy Services v. State of Andhra Pradesh: 271 ITR 401 (SC) wherein the Court held that intellectual property put on to a media, whether it be in form of books or canvas (in case of paintings) or computer discs or cassettes, and marketed, was in the nature of 'goods' and accordingly, a transaction of sale of off the shelf computer software/canned software, whether branded and unbranded, would be sale of "goods" assessable to Sales Tax. The aforesaid decision was reiterated by the Hon‟ble apex Court in the recent decision case of Engineering Analysis Centre of Excellence Private Limited v. CIT: Civil (Appeal) No. 8733-8734 of 2018. In view of the aforesaid, off the shelf computer software/canned software have categorically been held to be a tangible asset and not intangible asset by the Hon‟ble Supreme Court in the case of TCS (supra) and Engineering Analysis (supra) and accordingly, the assessing officer erred in holding that the software was in the nature of intangible asset and not tangible asset. Re: Computer software has been specifically included as an item of machinery and plant under clause (5) of Appendix I Page | 62 It is further pertinent to point out that Appendix I of Income Tax Rules lists out various depreciable assets and prescribe rate of depreciation there against. On perusal of the same, it would be appreciated that computer software has been specifically included as an item of machinery and plant under clause (5) thereof. Further notes 7 appended to the aforesaid Rules define computer software as „any computer program recorded on any desk, tape, perforated media or other information storage device‟. Accordingly, the software acquired by the assessee clearly meets the definition of „computer software‟ prescribed in the aforesaid Rule and therefore the same is eligible for depreciation at the rate prescribed under the aforesaid appendix as part of plant and machinery. Special provisions prevail over general It is well established that when a general law and a special law dealing with some aspect dealt with by the general law are in question, the rule adopted and applied is one of harmonious construction whereby the general law, to the extent dealt with by the special law, is impliedly repealed. This principle finds its origins in the latin maxim of generaliaspecialibus non derogant, i.e., general law yields to special law should they operate in the same field on same subject. The maxim generaliaspecialibus non derogantis dealt with in Volume 44 (1) of the 4th ed. of Halsbury's Laws of England at paragraph 1300 as follows: “The principle descends clearly from decisions of the House of Lords in Seward v. Owner of “The Vera Cruz”, (1884) 10 App Cas 59 and the Privy Council in Barker v Edger, [1898] AC 748 and has been affirmed and put into effect on many occasions.... If Parliament has considered all the circumstances of, and made special provision for, a particular case, the presumption is that a Page | 63 subsequent enactment of a purely general character would not have been intended to interfere with that provision; and therefore, if such an enactment, although inconsistent in substance, is capable of reasonable and sensible application without extending to the case in question, it is prima facie to be construed as not so extending. The special provision stands as an exceptional proviso upon the general. If, however, it appears from a consideration of the general enactment in the light of admissible circumstances that Parliament's true intention was to establish thereby a rule of universal application, then the special provision must give way to the general.” In Pretty v. Solly (quoted in Craies on Statute Law at p.m. 206, 6th Edn.) Romilly, M.R., mentioned the rule thus: “The rule is, that whenever there is a particular enactment and a general enactment in the same statute and the latter, taken in its most comprehensive sense, would overrule the former, the particular enactment must be operative, and the general enactment must be taken to affect only the other parts of the statute to which it may properly apply.” Applying the aforesaid rule of construction or statute, it follows that in cases of conflict between a specific provision and a general provision, the specific provision prevails over the general provision and the general provision applies only to such cases which are not covered by the special provision. The Courts have consistently applied the aforesaid rule of construction while deciding which provisions would prevail where there may appear apparent conflict in two applicable provisions [(Refer Sultana Begum (1997)1SCC 373): CIT vs. Copes Vulcan Inc.:167 ITR 884(Mad), Meteov Satellite Ltd vs. ITO: 121 ITR 311(Gujarat). In view of the above, since computer software is specifically covered as an item of machinery and plant under Clause (5) of Appendix I of Income Tax Rules, the same is eligible for Page | 64 depreciation at the rate prescribed under the aforesaid appendix as part of plant and machinery. Specific reliance in this regard, is placed on the following decisions wherein the Courts/Tribunals have held that computer software were covered as an item of machinery and plant under Clause (5) of Appendix I of Income Tax Rules and eligible for depreciation at 60 per cent instead of 25 per cent applicable to intangible assets: The Hon‟ble Madras High Court in the case of CIT v. Computer Age Management Services (P.) Ltd.: 267 Taxman 146 (Madras) held that software license acquired by appellant was in nature of software application, appellant was eligible to claim depreciation at 60 per cent in terms of Entry 5 of Part A of New appendix-I read with Note 7. The relevant observations of the Court are as under: “7. As noticed above, the assessee is in the business of registrar and transfer agent as licensed by the SEBI handling large volume of market sensitive data and information, which is available only through general customized application software. The assessee acquired software licenses capitalized during the relevant years in the books of accounts and claimed depreciation at 60%. In paragraph 20 of the order passed by the Tribunal, the nature of items, on which, the assessee claimed depreciation at 60%, has been listed out and they are 17 in number, from which, we find that substantial amount of server licences, which have been obtained by the assessee are customized and some of which are single user licenses. 8. The question would be as to whether the software application, which was acquired by the assessee would fall under Entry 5 of Part A of New Appendix I, which states that computers including computer software are entitled to depreciation at 60%. Note 7 of the Appendix defines the expression 'computer software' to mean Page | 65 any programs recorded on CD or disc, tape, perforated media or other information storage devices. 9. The case of the Revenue is that software are licences and that they are intangible assets and would fall under Part B of New Appendix I, which deals with knowhow, patents, copyrights, trademarks, licenses, francises or any other business or commercial rights of similar nature. 10. We find that Part B of New Appendix I is a general entry whereas Entry 5 of Part A of New Appendix I is a specific entry read with Note 7. In the instant case, the Tribunal, in our considered view, rightly held that the assessee is eligible to claim depreciation at 60%. 11. In the decision rendered by a Division Bench of this Court in the case of CIT v. Cactus Imaging India (P.) Ltd. [2018] 93 taxmann.com 396/256 Taxman 32/406 ITR 406 (Mad.) to which, one of us (TSSJ) was a party, an identical question came up for consideration wherein the object was printer (computer printer). This Court, after taking into consideration as to how the entries would be interpreted, referred to the decision in the case of Bimetal Bearings Ltd. v. State of Tamil Nadu [1991] 80 STC 167 (Mad.) and held as hereunder : "9. The Hon'ble Division Bench took note of the decision of the Hon'ble Supreme Court pointing out that the 'entry' to be interpreted is in a taxing statute; full effect should be given to all words used therein and if a particular article would fall within a description, by the force of words used, it is impermissible to ignore the description, and denote the article under another entry, by a process of reasoning. 10. It was further pointed out that the rule of construction by reference to contemporaneaexpositio is a well-established rule for interpreting a statute by reference to the exposition it has received from contemporary authority, though it must give way where the language of the statute is plain and unambiguous. Page | 66 11. By applying the rule of interpretation, we find that the relevant entry under old appendix I Clause III (5) states computers including computer software and the Notes under the Appendix defines 'computer software' in Clause 7 to mean any computer program recorded on disc, tape, perforated media or other information storage device. Noteworthy to mention that the notes contained in the appendix, the term 'computer' has not been defined. Therefore, as pointed out by the Division Bench in Bimetal Bearings Ltd. (supra), if a particular article would fall within the description by the force of words used, it is impermissible to ignore the word description. Thus, going by the usage of the equipment purchased by the petitioner, we have to take a decision." 12. As held in the above decision, if a particular article would fall within the description by the force of the words used, it is impermissible to ignore the word 'description' and going by the usage of the equipment purchased by the assessee, a decision has to be arrived at. We find that there is no error in the decision arrived at by the Tribunal by taking note of the specific entry in contra distinction with the general entry. Therefore, the first substantial question of law has to be necessarily answered against the Revenue.” (emphasis supplied) The Special bench of the Tribunal in the case of Amway India Enterprises vs. DCIT: [2008] 111 ITD 112 (Delhi) also held as under: “61. We have already discussed as to how computer software is a tangible property. Though a licensee, the person purchasing the disk or other medium containing the software is owner to the extent of the rights comprised in the license. The decision of the Hon'ble Supreme Court in the case of Tata Consultancy Services (supra) supports the view that software contained in a disk is tangible property by itself. The use by the assessee of such software in his business is enough to allow the claim for depreciation. The rights which an assessee acquires by Page | 67 purchasing the disk or magnetic medium containing the computer software with limited or absolute right to use the same by itself would satisfy the requirements of the Plant. The assessee's ownership of limited right over the tangible asset is sufficient to conclude that the assessee is the owner of the Plant. There is therefore no difficulty in allowing depreciation claim at 25 per cent under section 32(1)(i) read with Appendix-I, Part-A Division III (1) to the IT Rules, 1962. With effect from 1-4-2003, Computer Software has been classified as a tangible asset under the heading "Plant" in Appendix-I to the IT Rules entitled to depreciation at 60 per cent. The assessee would be entitled to depreciation at 60 per cent from 1-4-2003. 62. The argument raised on behalf of the assessees in this context was that the rate of depreciation on computer software from 1-4- 1999 should be 60 per cent. The basis of this argument was that depreciation on computers was originally allowed treating them as a plant only at 25 per cent. With effect from 1-4-1999, computers were treated as a different class of asset falling within the description of Plant and depreciation was allowed at 60 per cent. With effect from 1-4-2003, computer software was also included along with computers. The argument of the assessee was that the amendment to the rules was merely clarificatory and therefore, even on computer software with effect from 1-4-1999, 60 per cent depreciation should be allowed. We do not agree with the submissions of the assessee in this regard. The amendment is prospective. It is not clarificatory for the reason that computer and computer software are two different items of assets. If the Legislature wanted to allow depreciation at 60 per cent with effect from 1-4-1999 on computer software, it would have said so specifically by making the provisions retrospective. In this regard, we agree with the view expressed by the Delhi Bench of the ITAT in the case of Maruti Udyog Ltd. ( supra) wherein similar view has been taken. Page | 68 The Delhi bench of the Tribunal in the case of HCL Comnet Systems and Services Ltd. v. CIT: ITA No. 5906/Del/2010, held as under: “We have carefully considered the issue. We find that the issue under consideration is depreciation of computer software, and effective from A.Y. 2003-04. Computer software has to be treated as part of computer only and depreciation is allowable on the same @ 60%. Depreciation claim of assessee is appearing in page 37 of the paper book. 60% depreciation has been claimed on computers. By way of a note it has been mentioned that computer includes input/output devices, UPS and systems software. In page 41 of the paper book the details of assets capitalized on software items has been disclosed as ORA401CA.OFO.V9.264 bit software. We find ourselves in agreement with the contention of the assessee that 60% rate of depreciation has been prescribed in the Act itself on computer software, hence allowing such a depreciation which is in accordance with the law cannot make the AO’s order erroneous and prejudicial to the interest of Revenue.” To the same effect is the decision of Delhi bench of the tribunal in the case of ACIT vs. Globe Capital Market Ltd.:ITA No. 2926/Del/2012. In that view of the matter, computer software acquired by the appellant was in the nature of tangible asset under the heading „plant‟ in Appendix I to the Rules and consequently cannot be treated as an „intangible asset‟. Rebuttal to AO/DRP The AO has drawn adverse inference from the fact that the appellant has in its books of accounts shown the software under the head „intangible assets‟. (Refer pg. 60 of PB on Merits - Vol 1) In this regard, it is respectfully submitted that although in the books off accounts, the software was shown as „intangible assets‟, for tax purposes, the assessee has treated the computer software as part of Plant and Machinery in the Tax Audit Report Page | 69 and claimed depreciation @ 60% thereon. (Refer pg. 95 of PB on Merits - Vol 1) It is well settled that the accounting treatment in the books of account is not determinative of deductibility of an item of expense / taxability of income under the Act, which has to be independently adjudged having regard to the nature of expense or income, as the case maybe, the method of accounting, etc. [Refer: Kedarnath Jute Mfg. Co. Ltd. v. CIT: 82 ITR 363 (SC); Sutlej Cotton Mills Ltd. v. CIT: 116 ITR 1 (SC)]. The AO/DRP has held that the computer software ought to form an integral part of the computer to be eligible for deprecation @ 60%. In this regard, it is respectfully submitted that computer software cannot function independently and the same is required to be installed on the computer. Merely because the computer software has been procured independently would not militate against the same being treated as „computer software‟ eligible for depreciation @ 60%. 74. In view of the above, it is submitted that depreciation has been correctly claimed by the appellant at the rate prescribed in the Appendix and thus, the action of the assessing officer in restricting the claim of depreciation to 25 percent instead of 60 per cent as claimed by the appellant, needs to be reversed and disallowance made calls for being deleted. 75. We have carefully considered the rival contention and perused the orders of the lower authorities. We find that the assessee has purchased the software, used it on computers. Merely because the software so purchased independently of the computer they cannot be held to be not called software eligible for depreciation at the rate of 60%. Accordingly we allow ground number 19 of the appeal of the assessee and direct the learned assessing officer to allow the depreciation on the computer software at the rate of 60%. Ground number 19 of the appeal of the assessee is allowed. 76. Ground number 20 of the appeal of the assessee is with respect to Disallowance of deduction under section 80-IC because of interest income earned by eligible unit from loan to employees/vendors and security deposit. During the relevant previous year, the eligible unit at Haridwar earned the Page | 70 following other incomes, which were credited to the Profit and Loss Account of that unit: S. No. Name /Type of Other Income Amount (in Rs.) 1 Interest on loan given at subsidized rates to the employees 19,11,048 2 Interest on loan provided for working capital support to vendors 1,86,86,41 8 3 Interest income on security deposit 24,37,431 TOTAL 2,30,34,89 7 In the return of income, the assessee claimed deduction under section 80IC of the Act on the aforesaid „other incomes‟ since the said receipts had direct and immediate nexus with the business of manufacturing and selling of specific articles or things. In the assessment order, the assessing officer without considering the nature of each of the aforesaid receipts, held that the aforesaid incomes were not derived from the business of manufacturing of articles or things and were, therefore, taxable under the head “income from other sources”. Further, the assessing officer without appreciating that disallowance of Rs.2,05,97,466 on account of interest income earned by the eligible unit on loan given at subsidized rates to the employees and loan given for providing working capital loan to vendors has already been made vide para no. 20 of the assessment order, repeated the aforesaid disallowance and also made disallowance of interest on security deposit of Rs.24,37,431. 77. Learned authorised representative submitted that interest on loans given to subsidized rate to the employees and interest on loan provided for working capital support to the vendors as well as interest income on security deposit couldn‟t be considered as other income. He submitted as Under:- Page | 71 Re: Interest on Loan given at subsidized rates to employees and Interest on loan provided for working capital support to vendors It is, at the outset, submitted that the assessing officer has disallowed Rs.2,05,97,466 on account of interest income earned by the eligible unit on loan given at subsidized rates to the employees and loan given for providing working capital loan to vendors vide para no. 20 of the assessment order which has been challenged vide by the appellant ground of appeal nos. 17 to 17.1 above. To that extent, there has been a double disallowance of interest income earned by the eligible unit on loans, which is untenable in law and calls for being deleted. On merits, the appellant relies upon the submission placed in ground nos. 17 to 17.1 above at page no. 53-57 of this Chart, wherein it is submitted that the aforesaid issue is covered in favour of the appellant by the orders passed by the Tribunal for AYs 2009-10 to 2013-14 and 2015-16. Re: Interest on Security Deposits It would be pertinent to point out that similar disallowance of deduction under section 80IC of the Act on account of interest on security deposit made by the assessing officer in preceding assessment year, i.e. AY 2011-12 has been deleted by the Hon‟ble Tribunal vide order dated 24.10.2016. Following the orders for the assessment year 2011-12, the Hon‟ble Tribunal vide orders dated 13.06.2018 and 20.06.2018 decided the aforesaid issue in favour of the assessee in the assessment years 2012-13 and 2013-14 respectively. Page | 72 Further, it would be pertinent to point out that the Department has accepted the order passed by the Hon‟ble Tribunal for assessment years 2011-12 to 2013-14 and no appeal has been filed on this issue before the Hon‟ble Delhi High Court. In assessment years 2009-10, 2014-15 and 2015-16, the assessing officer has also not made any disallowance in this regard. In view of the above, it is respectfully submitted that the disallowance made by the assessing officer calls for being deleted. 78. We have carefully considered the rival contention and perused the orders of the lower authorities. The identical issue has been considered by the coordinate bench in assessee‟s own case for assessment year 2011 – 12 to assessment year 2013 – 14. This order of the coordinate bench has been accepted by the revenue and no appeal is been preferred before the honourable High Court. In view of this we decide this issue in favour of the assessee and allow ground number 20 of the appeal. 79. Ground number 21 of the appeal of the assessee is with respect to Non- allowance of depreciation on lease-hold rights in land. Facts of the case shows that The appellant was allotted land at Haridwar, Neemrana and Jaipur on lease for a period of 99 years. The aforesaid leases were granted on a payment of premium of Rs.48,45,87,780 (Haridwar Land), Rs.13,09,98,710 (Neemrana Land) and Rs.78,36,08,533 (Jaipur Land). The appellant was, vide allotment letter dated 8.8.2006 allotted land at Haridwar by State Industrial Development Corporation of Uttaranchal Ltd. (SIDCUL) on lease for a period of 99 years. The aforesaid lease was granted on payment of premium of Rs. 48,45,87,780. In accordance with the aforesaid letter, the land was allotted to the appellant for which lease deed was executed subsequently on 17th February 2014 for remaining lease period of 90 years at that time. As per the lease agreement, in addition to the amount of premium paid, the lessee was required to pay annual rent at Rs.5 per Page | 73 sq.m. Since assessment year 2009-10, the appellant had been apportioning the amount of premium paid on taking land on lease, over the period of lease, and claiming deduction for the proportionate amount as revenue expenditure, which was disallowed by the assessing officer by treating the same to be capital expenditure. In the appellate order passed by the Hon‟ble Tribunal for assessment years 2009-10 to 2011-12 and 2013-14, the Tribunal held the payment of lease premium to be in the nature of „capital expenditure‟, however, the Tribunal allowed the alternate claim of the appellant and allowed depreciation thereon by holding that premium paid for acquisition of leasehold rights in land was an intangible asset in the nature of „business or commercial right‟ eligible for depreciation under section 32(1)(ii) of the Act. Further, the appellant was, vide allotment letter dated 06.07.2005 allotted land at Neemrana by Rajasthan State Industrial Development and Investment Corporation Ltd. (RICCO) on lease for a period of 99 years. The aforesaid lease was granted on payment of development charges of Rs. 12,34,50,000/-. The total amount capitalized in the books of accounts was Rs. 13,09,98,710/- which included development charges, security deposit, registration and stamp duty and other misc. charges. In accordance with the aforesaid allotment letter, a lease deed was executed subsequently on 7th October 2005 whereby land at Neemrana was leased to the appellant for a period of 99 year, As per the lease deed, in addition to the amount of development charges and other charges as mentioned above, the lessee was also required to pay annual rent of Rs.19,735 (Rs. 237 per acre per annum). Since the industrial unit at Neemrana began commercial production on 25.06.14, the appellant is eligible for claiming depreciation on leasehold rights in the said land from assessment year 2015-16, in accordance with the order of the Tribunal for A.Y. 2015-16. The appellant was, vide allotment letters dated 24.11.2005, 26.12.2011 & 10.05.2012 allotted parcels of land at Jaipur by RIICO on lease for a period of 99 years. The aforesaid lease was granted on payment of development charges of Rs.77,58,50,033/-. The total amount capitalized in the books of accounts was Rs.78,36,08,533/- comprising of development charges and security deposit. In accordance with the aforesaid letters, the possession of land was given to the appellant on 29th June 2012 for lease period of 99 years. As per Page | 74 the terms of the lease, in addition to the amount of development charges and security deposit, the lessee was also required to pay annual rent @ Rs. 387 per 4000 sqm. per annum. Since the industrial unit at Jaipur started manufacturing from assessment year 2016-17, the appellant is eligible for claiming depreciation on leasehold rights in the said land from the present assessment year, i.e., 2016-17. In the return of income filed for the relevant assessment year, the appellant, out of abundant caution, deviated from its past practice and did not claim deduction of amount of premium amortized for the year pertaining to the leasehold land at Haridwar. Further, the appellant also inadvertently did not claim depreciation on premium paid for acquisition of leasehold rights in lands at Neemrana and Jaipur. The appellant, however, during the course of assessment proceedings, claimed depreciation @ 25% on leasehold rights in land at Haridwar (Rs.6,86,34,592), Neemrana (Rs.9,79,51,067) and Jaipur (Rs.2,45,62,258) under section 32(1)(ii) of the Act aggregating to Rs.19,11,47,917 in accordance with the order passed by the Hon‟ble Tribunal for assessment years 2009-10, 2011-12 and 2013-14. The ld assessing officer disallowed the aforesaid claim on the ground that the Department did not accept the orders passed by the Hon‟ble Tribunal for assessment years 2009-10 to 2013-14 allowing deprecation @ 25 % on leasehold rights in land by treating the same as an intangible asset and has contested the same in appeal before the Hon‟ble High Court. Further, the assessing officer also held that since the appellant did not claim depreciation in the return of income for the relevant assessment year, the same cannot be claimed/allowed in assessment proceedings. 80. The learned authorised representative submitted that:- Re:Authorities bound to consider legitimate claim, though not claimed in the original return of income Attention in this regard is invited to Article 265 of the Constitution of India which clearly mandates that tax can be imposed only by authority of law. The said Article reads as under: “265. Taxes not to be imposed save by authority of law. No tax shall be levied or collected except by authority of law.” Page | 75 In view of the aforesaid Article, it is amply clear that no tax can be imposed/ collected by the State, otherwise than by authority of law, notwithstanding the position taken by the taxpayer. In view of the aforesaid, a deduction/claim, which is legally/ legitimately allowable to the assessee, could not, it is submitted, be denied merely because the same was not claimed in the return of income inasmuch as retention of tax, contrary to the provisions of the Act, would tantamount to retention without the authority of law. That apart, it is respectfully submitted, that the purpose of assessment is to compute the correct taxable income of the assessee as per the provisions of the Act and even if any deduction/ claim is not made in the return of income by the assessee, which is clearly allowable in law, the assessing officer is duty bound to consider and allow such claim suo-motu, while framing the assessment. Kind attention, in this regard is invited to the Circular No. 14 (XL- 35) dated 11.04.1955 issued by the Board of Revenue under the Income-Tax Act, 1922 explaining the role to be played by the assessing officers while conducting assessments. The said circular provided that the assessing officers must not take advantage of ignorance of the assessee and in case, the assessee omits to claim any relief or refund, which he is entitled to, the assessing officer should draw attention of the assessee towards such omitted claim/ relief/ refund. In terms of the aforesaid, in case an assessee out of ignorance or otherwise, fails to make a claim which he is legally entitled to make, it would be the duty of the assessing officer to draw attention of the assessee to such omission. Reliance in this regard is further made to the following decisions, wherein the Courts have, while following the aforesaid circular, held that the assessing officer is duty bound to grant benefits and reliefs Page | 76 during assessment proceedings, even if the same were not claimed by the assessee in the return of income:  Chokshi Metal Refinery vs. CIT: 107 ITR 63 (Guj)  CIT vs. Geo Industries and Insecticides (I) Pvt Ltd: 234 ITR 541 (Mad)  Subhash Chandra Sarvesh Kumar v. CIT: 132 ITR 619 (All.) Even independent of the aforesaid circular, the Courts have in various decisions held that the assessing officer is duty bound to compute income of the assessee in accordance with law and should allow all reliefs and claims, which an assessee is entitled to, even if the assessee has not claimed the same in the return of income:  CIT v Simon Carves Ltd.: 105 ITR 212 (SC)  Anchor Pressings (P) Ltd. vs. CIT and Ors.: 161 ITR 159 (SC)  CIT v Bharat General Reinsurance: 81 ITR 303 (Del)  CIT vs. Hiranand: 136 Taxman 66 (Raj)  CIT v. Ahmedabad Keiser-e-Hind Mills Co. Ltd.: 128 ITR 486 (Guj.)  CIT v Archana R. Dhanwatay: 136 ITR 355 (Bom.)  Sneh Lata Jain vs. CIT: 140 Taxman 156 (J&K) To put it simply, in the aforesaid decisions it has repeatedly been held that the purpose of assessment is to compute the correct taxable income of the assessee as per the provisions of the Act and even if any deduction/ claim is not made in the return of income by the assessee, it is open to the assessee to resile from the said position. The assessing officer was duty bound to consider and allow such claim suo moto, while framing the draft assessment order. In view of the above, the assessing officer ought to have allowed depreciation claimed by the appellant under section 32(1)(ii) of the Page | 77 Act on leasehold rights acquired in land in accordance with the finding of the Hon‟ble Tribunal in appellant‟s own case for earlier years. Re: Power of Tribunal to admit adjudicate additional ground It is respectfully submitted that the Tribunal has plenary powers to admit fresh claim made for the first time during the course of the assessment proceedings, as has been held in Supreme Court decision in the case of National Thermal Power Company: 229 ITR 383 (SC). The Delhi High Court in the case of CIT vs. Jai Parabolic Springs Ltd: 306 ITR 42 has held that the Tribunal has the power to adjudicate a fresh claim raised for the very first time. In that case, the assessee incurred certain expenditure because of customer introduction charges, which were shown as "Deferred Revenue Expenses" in the balance sheet. The expenditure was written off over a period of five years starting from the assessment year 1990- 91 and accordingly, the assessee claimed proportionate reduction in the return. The claim was allowed by the assessing Officer. The assessee company filed an appeal before the CIT (A). In the appeal before CIT(A), the assessee claimed, by way of additional ground, the entire deferred revenue expenditure as allowable deduction. The CIT (A) allowed the appeal. On appeal to the Tribunal by the Department, the Tribunal restored the issue to the file of the assessing officer for examination. The assessing officer pursuant to the order of the Tribunal allowed deduction in respect of the amount claimed in the return of income and not of the full amount as claimed before the CIT(A). The order of the assessing officer was reversed by the CIT(A) and the same was upheld by the Tribunal. Aggrieved, the Department raised the following question before the High Court: Page | 78 “Whether the Tribunal was right in law in allowing relief of Rs.15,58,500 in the assessment year under consideration when no such claim was made by the assessee in the return of income”. The Court observed as under: “In the case of Jute Corporation of India Ltd. v. Commissioner of Income Tax (1991) 187 ITR 688, while dealing with the powers of the Appellate Assistant Commissioner, the Supreme Court observed that:- An appellate authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations, if any, prescribed by the statutory provisions. In the absence of any statutory provision, the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter. There is no good reason to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income-tax Officer. This Court further observed that there may be several factors justifying the raising of a new plea in an appeal and each case has to be considered on its own facts. The Appellate Assistant Commissioner must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also. 17. In Goetze (India) Limited v. Commissioner of Income Tax (2006) 284 ITR 323 (SC) wherein deduction claimed by way of a letter before Assessing Officer, was disallowed on the ground that there was no provision under the Act to make amendment in the return without filing a revised return. Appeal to the Supreme Court, as the decision was upheld by the Tribunal and the High Court, was dismissed making clear that the decision was limited to the power of assessing Page | 79 authority to entertain claim for deduction otherwise than by revised return, and did not impinge on the power of Tribunal.” Useful reference in this regard can also be made to the decision of Special Bench of Tribunal in the case of All Cargo Global Logistics Ltd.: 137 ITD 26. To the same effect are the following decisions:  CIT v. Pruthvi Brokers and Shareholders P. Ltd. 349 ITR 336 (Bom.)  CIT vs. Rose Services Apartment India (P.) Ltd.: 326 ITR 100 (Del)  CIT v. Aspentech India (P) Ltd.: ITA No. 1233/2011 (Del.)(HC)  CIT v. Sam Global Securities Ltd.: (2014) 360 ITR 0682 (Del.)(HC)  JCIT v Hero Honda Finlease Ltd.: 115 TTJ 752 (Del. Trib.)  SNC-Lavalin/Acres Inc.: 110 TTJ 13 (Del.) In view of the aforesaid, the Hon‟ble Tribunal is empowered to consider and allow the claim of depreciation on leasehold right in land notwithstanding that the said additional claim was not made in the return of income. On merits, issue of depreciation on leasehold right in land is squarely covered by the orders of the Tribunal in earlier years It would be appreciated, that the appellant is engaged in the business of manufacturing two-wheelers and the subject lands were taken, and was permitted under the lease agreement to be used, only for the purposes of constructing factory and carrying on business operations thereon. The new factory to be constructed on the leasehold land was in connection with extension of existing business of manufacturing two wheelers by the appellant and, therefore, the leasehold right obtained on payment of impugned premium was a right obtained in connection with business of the appellant company, which is covered within the meaning of „business or commercial right‟ under section 32(1)(ii) of the Act. Page | 80 It would be pertinent to point out that the Hon‟ble Tribunal, while adjudicating upon Revenue‟s appeal for assessment years 2010-11 and 2011-12, vide consolidated order dated 26.10.2016, held the payment of lease premium in relation to the land at Haridwar to be in the nature of „capital expenditure‟ following the decision of Delhi High Court in the case of GAIL India: 211 Taxman 587. However, the Tribunal, considered and allowed the alternate claim of the appellant regarding allowance of depreciation on such payment. In coming to the aforesaid conclusion, the Tribunal held that premium paid for acquiring of leasehold rights of land to be used for the purpose of business is an asset which is different from land and would be considered as an intangible asset in the nature of „business or commercial right‟ which is eligible for depreciation under Section 32(1)(ii) of the Act. Similarly, in assessment years 2009-10 and 2013-14, the assessing officer had held the payment of lease premium to be in the nature of „capital expenditure‟. The Hon‟ble DRP, however, allowed the appellant depreciation on the premium paid for acquiring of leasehold rights of land, considering the same as an intangible asset in the nature of „business or commercial right‟ which is eligible for depreciation under Section 32(1)(ii) of the Act. The Assessing officer, however, erred in not giving effect to such binding directions of the DRP. On appeal, the Hon‟ble Tribunal directed the assessing officer to pass necessary orders give effect to the direction of the Hon‟ble DRP. Recently, the Hon‟ble Tribunal has in the order dated 14.04.2021 passed for assessment year 2015-16, allowed the claim for depreciation on leasehold right in land which was not claimed in the return of income but raised by way of additional ground before the Tribunal, by observing as under: Page | 81 “63.0.0 We have heard both the parties and have perused the material available on record. Though this claim was not made before the lower authorities, we find that the additional ground raised by the assessee raises a pure question of law, facts for the same are on record. We accordingly admit the additional ground of appeal raised by the assessee following the decision of the Hon’ble Supreme Court in the case of National Thermal Power Co Ltd vs CIT: 229 ITR 383 (SC). 63.0.1 We also find that the issue on merits is squarely covered in favour of the assessee by the order dated 24.10.2016 passed by Tribunal in the preceding assessment years, i.e. AY 2010-11 and AY 2011-12 wherein the Tribunal held that lease premium charges were not allowable revenue deduction. However, the Tribunal allowed the alternate plea raised by the assessee company and held the premium paid for acquisition of leasehold rights to be an intangible asset, independent from the land itself, eligible for depreciation under Section 32(1)(ii) of the Act. 63.0.2 Accordingly, we hold that the assessee is eligible for depreciation at 25% on lease hold rights acquired in Haridwar and Neemrana. As regards the land at Haridwar, the AO is directed to allow the claim of depreciation as per opening WDV carry forward from the earlier years. In so far as the depreciation of land at Neemrana is concerned the same shall be allowed after verification of the relevant payments claimed to have been made by the assessee.” In view of the above, the aforesaid issue is squarely covered in favour of the appellant by orders passed by the Hon‟ble Tribunal for assessment years 2009-10 to 2011-12, 2013-14 and 2015-16. Page | 82 81. We have carefully considered the rival contention and perused the orders of the lower authorities. We find that the assessee has though not claim the amortisation expenses in the return of income made the claim before the learned assessing officer. Such claim is required to be adjudicated in accordance with the law as it has already been decided in the assessee‟s own case for earlier years. In the earlier years, the coordinate bench has allowed the claim of the assessee for assessment year 2009 – 10 to 2011 – 12, 2013 – 14 and 2015 – 16. Therefore, the issue squarely covered in favour of the assessee. Accordingly, we allow ground number 21 of the appeal and direct the learned assessing officer to grant deduction of the amortization expenses to the assessee. 82. Ground number 22 of the appeal is with respect to the claim of education cess as a deductible expenditure. The appellanthad raised an additional ground before the DRP claiming deduction of education cess of Rs.24,23,94,333 [levied on tax on total income after claiming deduction of education cess relatable to business income] paid during the previous year relevant to captioned assessment year as deductible expenditure while computing taxable income under the head “profits & gains from business or profession” notwithstanding the treatment made at the time of filing of return of income. After claiming the deduction of education cess of Rs.24,23,94,333, the total income would be determined at Rs.2529,57,33,561 resulting into a tax liability of 874,57,22,684 and accordingly, the appellant would be eligible for refund of Rs.8,38,87,831. The DRP admitted the additional ground of objection claiming deduction of education cess, however, did not allow the aforesaid additional claim made by the appellant holding on the ground that the said claim failed the fundamental test of deductibility under section 37(1) and was also hit by mischief of section 40(a)(ii) of the Act. 83. The learned authorised representative submitted that:- It is respectfully submitted that Education Cess is allowable as deduction as has been held in the following decisions: The Rajasthan High Court in the case of Chambal Fertilisers and Chemicals Ltd vs JCIT: D.B Income-tax Appeal Page | 83 No.52/2018 dated 31.07.2018 held that education cess is an allowable deduction while computing the income under the head “profits and gains from business or profession” as it does not fall within the disallowing section 40(a)(ii) of the Act. In that case, the Court while answering the question whether Tribunal erred in holding that the education cess is a disallowable expenditure under section 40(a) (ii) of the Act, held as under: “13. On the third issue in appeal no.52/2018, in view of the circular of CBDT where word "Cess" is deleted, in our considered opinion, the tribunal has committed an error in not accepting the contention of the assessee. Apart from the Supreme Court decision referred that assessment year is independent and word Cess has been rightly interpreted by the Supreme Court that the Cess is not tax in that view of the matter, we are of the considered opinion that the view taken by the tribunal on issue no.3 is required to be reversed and the said issue is answered in favour of the assessee.” The Bombay High Court in the case of Sesa Goa Ltd vs. JCIT: [2020] 423 ITR 426 (Bom), while dealing with the question as to whether Education Cess is allowable as deduction while computing income under the head profits and gains of business or profession in the year of payment, held as under: “........................ 22. Applying the aforesaid principles, we find that the legislature, in Section 40(a)(ii) has provided that "any rate or tax levied" on "profits and gains of business or profession" shall not be deducted in computing the income chargeable under the head "profits and gains of business or profession". There is no reference to any "cess". Obviously therefore, there is no scope to accept Ms. Linhares's contention that "cess" being in the nature of a "Tax" is equally not deductable in computing the income chargeable under the Page | 84 head "profits and gains of business or profession". Acceptance of such a contention will amount to reading something in the text of the provision which is not to be found in the text of the provision in Section 40(a)(ii) of the IT Act. 23. If the legislature intended to prohibit the deduction of amounts paid by a Assessee towards say, "education cess" or any other "cess", then, the legislature could have easily included reference to "cess" in clause (ii) of Section 40(a) of the IT Act. The fact that the legislature has not done so means that the legislature did not intend to prevent the deduction of amounts paid by a Assessee towards the "cess", when it comes to computing income chargeable under the head "profits and gains of business or profession". 24. The legislative history bears out that the Income Tax Bill, 1961, as introduced in the Parliament, had Section 40(a)(ii) which read as follows:....... 25. However, when the matter came up before the Select Committee of the Parliament, it was decided to omit the word "cess" from the aforesaid clause from the Income-tax Bill, 1961. The effect of the omission of the word "cess" is that only any rate or tax levied on the profits or gains of any business or profession are to be deducted in computing the income chargeable under the head "profits and gains of business or profession". Since the deletion of expression "cess" from the Income-tax Bill, 1961, was deliberate, there is no question of reintroducing this expression in Section 40(a)(ii) of IT Act and that too, under the guise of interpretation of taxing statute. 26. In fact, in the aforesaid precise regard, reference can usefully be made to the Circular No. F. No. 91/58/66-ITJ(19), dated 18th May, 1967 issued by the CBDT which reads as follows :-........................................... 27. The CBDT Circular, is binding upon the authorities under the IT Act like Assessing Officer and the Appellate Authority. Page | 85 The CBDT Circular is quite consistent with the principles of interpretation of taxing statute. This, according to us, is an additional reason as to why the expression "cess" ought not to be read or included in the expression "any rate or tax levied" as appearing in Section 40(a)(ii) of the IT Act. 28. In the Income-tax Act, 1922, Section 10(4) had banned allowance of any sum paid on account of 'any cess, rate or tax levied on the profits or gains of any business or profession'. In the corresponding Section 40(a)(ii) of the IT Act, 1961 the expression "cess" is quite conspicuous by its absence. In fact, legislative history bears out that this expression was in fact to be found in the Income-tax Bill, 1961 which was introduced in the Parliament. However, the Select Committee recommended the omission of expression "cess" and consequently, this expression finds no place in the final text of the provision in Section 40(a)(ii) of the IT Act, 1961. The effect of such omission is that the provision in Section 40(a)(ii) does not include, "cess" and consequently, "cess" whenever paid in relation to business, is allowable as deductible expenditure. ............................ 33. The ITAT, in the impugned judgment and order, has reasoned that since "cess" is collected as a part of the income tax and fringe benefit tax, therefore, such "cess" is to be construed as "tax". According to us, there is no scope for such implications, when construing a taxing statute. Even, though, "cess" may be collected as a part of income tax, that does not render such "cess", either rate or tax, which cannot be deducted in terms of the provisions in Section 40(a)(ii) of the IT Act. The mode of collection, is really not determinative in such matters. ............................... 36. The aforesaid means that the Supreme Court refused to regard the levy of education cess, higher education cess and Page | 86 NCCD as "duty of excise" when it came to construing exemption Notification. Based upon this, Mr. Ramani contends that similarly amounts paid by the Appellant - Assessee towards the "cess" can never be regarded as the amounts paid towards the "tax" so as to attract provisions of Section 40(a)(ii) of the IT Act. All that we may observe is that the issue involved in Unicorn Industries (supra) was not at all the issue involved in the present matters and therefore, the decision in Unicorn Industries (supra) can be of no assistance to the Respondent - Revenue in the present matters. 42. For all the aforesaid reasons, we hold that the substantial question of law No. (iii) in Tax Appeal No. 17 of 2013 and the sole substantial question of law in Tax Appeal No. 18 of 2013 is also required to be answered in favour of the Appellant - Assessee and against the Respondent-Revenue. To that extent therefore, the impugned judgments and orders made by the ITAT warrant interference and modification. 43. Thus, we answer all the three substantial questions of law framed in Tax Appeal No. 17 of 2013 in favour of the Appellant - Assessee and against the Respondent -Revenue. Similarly, we answer the sole substantial question of law framed in Tax Appeal No. 18 of 2013, in favour of the Appellant - Assessee and against the Respondent - Revenue.” (emphasis supplied) The aforesaid decisions of the Rajasthan High Court in the case of Chambal (supra) and the Bombay High Court in the case of Sesa Goa (supra), wherein education cess has been allowed as deduction, have been unanimously followed by various benches of Tribunal: Reference may be made to the decision of the Delhi Bench of the Tribunal in the case of Havells India Limited vs. ACIT: ITA No.4695/Del/2012 vide order dated 10.11.2020, wherein the issue of deduction of education cess was allowed in favour of Page | 87 the assessee. The relevant extracts of the decision are reproduced hereunder for ready reference: “17. We have heard both the parties and perused the material available on record. It is pertinent to note that the levy of education cess on Income tax is distinct from that of an income tax or surcharge since the letter to form part of part one of the First Schedule which defines income tax and provides rate of levy thereof. Unlike income tax and surcharge which are levied for general purpose, Government has explained an education cess and is admittedly levied for specific purpose that is to fulfill the commitment of the government to provide quality health services and finance universalized quality basic education and secondary and higher education. Unlike surcharge which was an exclusive component of income tax, education cess as introduced vide Finance Act, 2004 was also imposed an additional levy on indirect taxes namely Customs, Excise and Service Tax. Education cess does not part take the care of being a component of income tax per say as levied under the provisions of the Act. The decision of the Hon’ble Supreme Court in case of Goetz India (supra) will not be applicable in the present case. The claim of the assessee in respect of the education cess is allowable as deduction for the purpose of computation of taxable profits under the Act as held in the Hon’ble Bombay High Court’s decision in case of Cesa Goa Ltd. (supra). Thus, Ground No. 5 and 5.1 are allowed.”(emphasis supplied) Similar view is taken by the Delhi, Kolkata, Mumbai and Pune Benches of the Tribunal in the following cases: - Thomson Press India Pvt Ltd vs. ACIT: ITA No. 2561/Del/2017 (Del) - Crystal Crop Protection (P.) Ltd vs DCIT: ITA No. 1539/Del/2016 (Del) - MUFG Bank Ltd vs ACIT: ITA No.7895/Del/2019 (Del) Page | 88 - Sicpa India Private Limited vs ACIT: ITA No.704/Kol/2015 (Del) - Reckitt Benckiser (I) Pvt. Ltd. vs. DCIT: ITA No.404/Kol/2015 & 625/Kol/2016 (Kol) - ITC Limited vs. ACIT: ITA No. 685/Kol/2014 (Kol) - Peerless General Finance & Investment Co. Ltd. vs. DCIT: ITA No. 937/Kol/2018 (Kol) - Tega Industries vs. ACIT: ITA no. 404/Kol/2017 (Kol) - DCIT vs. Bajaj Allianz General Insurance Company Ltd.: ITA No. 1111/Pun/2017 - Atlas Copco (India) Limited: ITA No.736/Pun/2011 (Pune) - Voltas Ltd. vs. ACIT, ITA No. 6612/Mum/2018 dated June 30, 2020 (Pune) - Aditya Birla Nuvo Ltd. vs. Add. CIT: ITA No. 4220/Mum/2015 (Mum) - Asian Paints Ltd vs. AddlCIT: ITA No.2754/Mum/2014 (Mum Trib.) - P. N. GadgilJewellers P. Ltd. vs. ACIT: 113 taxmann.com 354 (Pune) - Symantic Software India P. Ltd. vs. DCIT: 114 taxmann.com 435 (Pune) - M/s. Paharpur Cooling Towers Ltd. vs. DCIT: ITA No. 217 to 219/ Kol/2018 - ITC Infotech India Ltd. vs. DCIT: ITA No. 67/ Kol/2015 (Kol) - Bajaj Allianz General Insurance Company Ltd.: ITA No. 1111 & 1112/ Pun/2017 - Persistent Systems Pvt. Ltd. vs ACIT: ITA No. 1232/ Pun/2017 (Pune) As regard claim of allowability under section 37(1) of the Act, Page | 89 in terms of the said provision, in order to be allowable as deduction thereunder, any outlay is required to fulfil the following characteristics – (a) should not be of the nature described in sections 30 to 36 of the Act; (b) should not be in the nature of capital expenditure; (c) should have been laid out or expended wholly and exclusively for the purpose of business or profession; and (d) should not be in the nature of personal expense. In terms of the aforesaid, expenditure incurred out of commercial necessity and in order to facilitate, directly or indirectly, carrying on of business, which is, inter alia, not in the nature of capital expenditure, is allowable business deduction. Reference in this regard is invited to the judgment in the case of CIT vs. Malayalam Plantations Ltd: 53 ITR 140 (SC), wherein this Hon‟ble Court, in the context of section 10(2)(xv) of the Indian Income Tax Act, 1922 (corresponding to section 37(1) of the Act), explained that the expression „for the purpose of the business‟ is wider in scope than the expression „for the purpose of earning profits‟. In that view of the matter, any expenditure not in the nature of capital expenditure, incurred by an assessee on grounds of commercial expediency, for advancing business interest and not necessarily towards earning of profits directly is allowable business deduction under section 37(1) of the Act [Refer also: CIT vs. Birla Cotton Spinning. & Weaving Mills Ltd. 82 ITR 166 (SC); Madhav Prasad Jatia vs. CIT 118 ITR 200 (SC)]. Attention may also be invited to the judgment in the case of CIT vs. Rajendra Prasad Moody 115 ITR 519 (SC), wherein this Hon‟ble Court, even in the context of narrower scope of section 57(iii) (as compared to section 37(1) of the Act) held that irrespective of actual receipt of income in any particular year, expenditure incurred wholly and exclusively for the Page | 90 purpose of earning income is allowable as deduction under that section. Applying the aforesaid legal position to the deduction claimed on account of „education cess‟, payment of such cess is a necessary expenditure required to be incurred on account of the statutory mandate. Such expenditure is required to be incurred by every commercial enterprise and hence an allowable business expenditure. Analogy for the aforesaid can be drawn from the following decisions wherein it was held that where taxes have been paid by the assessee in foreign jurisdiction for the purpose of earning global income on which tax is payable in India, then, such foreign taxes paid to the extent credit for the same is not granted to the assessee shall be allowed as business expenditure:  Reliance Infrastructure Ltd vs. CIT: 390 ITR 271(Bom.)  Tata Sons Ltd. v. DCIT [2011] 10 taxmann.com 87 (Mum.) Virmati Software and Telecommunication Ltd vs DCIT: ITA  Bank of India v. ACIT [2021] 125 taxmann.com 155 (Mumbai - Trib.)  Tata Consultancy Services Ltd vs ACIT: [2019] 111 taxmann.com 42 (Mum Trib.)  Tata Motors Ltd vs CIT: [2019] ITA No.3802/Mum/2018 (Mum Trib.) Considered in this light, it cannot be disputed that the outlay in the form of „education cess‟ is covered within the four corners of section 37(1) of the Act and allowable as such. The argument thus sought to be advanced by the DRP is without any basis and liable to be rejected. Page | 91 In view of the aforesaid, the education cess amounting to Rs.24,23,94,333 paid during the previous year relevant to assessment year 2016-17 ought be allowed as deduction while computing taxable income under the head “Profits & Gains from Business or Profession”. 84. We have carefully considered the rival contention and perused the orders of the lower authorities. We find that the above issue is squarely covered in favour of the assessee by the decision of honourable Rajasthan High Court in the case of Chambal (supra) and the Honourable Bombay High Court in the case of Sesa Goa (supra), wherein education cess has been allowed as deduction, . In view of this, we allow ground number 22 of the appeal of the assessee and direct the learned assessing officer to grant the deduction of education cess to the assessee. 85. Ground number 23 is with respect to The assessing officer erred on facts and in law, in not allowing credit for TDS of Rs. 2,66,630/- out of aggregate amount of TDS credit of Rs.21,02,52,980 claimed in the Return of Income, without providing any reason therefore. We direct the learned assessing officer to verify the tax deduction at source credit claimed by the assessee and grant credit of the same in accordance with the law. Accordingly, ground number 23 of the appeal of the assessee is allowed. 86. Ground number 24 is with respect to the withdrawal of interest u/s 244A of the act. This ground of appeal is consequential in nature and therefore same is dismissed. 87. Accordingly, appeal of the assessee is partly allowed. 88. Stay petition filed by the assessee in this appeal becomes infructuous in view of the decision in the appeal. Hence same is dismissed. Order pronounced in the open court on 26/11/2021. -Sd/- -Sd/- ( KUL BHARAT ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 26/11/2021. *MEHTA* Copy forwarded to Page | 92 1. Appellant; 2. Respondent 3. CIT 4. CIT (Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, New Delhi