TOSHBRO MEDICALS P.LTD, MUMBAI V. DCIT 1(3), MUMBAI

ITA 7064/MUM/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3632 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 24-02-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 26-11-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A RAMACHANDRANDR
• Keywords: Business expenditure; Charitable institution; Principle of natural justice; Commercial expediency; Revenue expenditure
• Section: 143(3); 37(1); 80G; 37

Judgement Text

E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO. 7064 /MUM/2012 ( / ASSESSMENT YEAR : 2009-10) M/S TOSHBRO MEDICALS PRIVATE LIMITED, 8 MOHATTA BHAVAN, OFF DR. E. MOSES ROAD, WORLI, MUMBAI 400 018. / V. DCIT 1(3), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. ./ PAN : AABCT4483C ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE COMPANY BY SHRI MIHIR NANIWADEKAR REVENUE BY : SHRI A. RAMACHANDRAN,DR / DATE OF HEARING : 24-2-2016 / DATE OF PRONOUNCEMENT :13-05-2016 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE ASSESSEE COMPANY, BEING ITA NO. 7064/MUM/2012, IS DIRECTED AGAINST THE ORDER DATED 31-10-2012 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 2, MU MBAI (HEREINAFTER CALLED THE CIT(A) ), FOR THE ASSESSMENT YEAR 2009-10, TH E APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) ARISING FROM THE ASSESSME NT ORDER DATED 20-12-2011 PASSED BY THE LEARNED ASSESSING OFFICER (HEREINAFTE R CALLED THE AO) U/S 143(3) OF THE INCOME TAX ACT,1961(HEREINAFTER CALLE D THE ACT). ITA 7064/MUM/2012 2 2. THE GROUNDS RAISED BY THE ASSESSEE COMPANY IN TH E MEMO OF APPEAL FILED WITH THE INCOME TAX APPELLATE TRIBUNAL, MUMBA I (HEREINAFTER CALLED THE TRIBUNAL) READS AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED I N SUSTAINING DISALLOWANCE OF RS. 25,00,000 (BEING PAYMENT MADE B Y THE APPELLANT TO GLOBAL VIPASSANA FOUNDATION), WITHOUT APPRECIATING THA T THE PAYMENT WAS MADE UNDER AN AGREEMENT ENTITLING THE APPELLANT TO C ERTAIN BENEFITS, AND WAS A PAYMENT MADE OUT OF COMMERCIAL EXP EDIENCY AND WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF ITS BUSINE SS. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN HOLDING THAT THE AMOUNT WAS A 'DONATION' PAID ON BY TH E APPELLANT'S DIRECTORS ONLY FOR THEIR SPIRITUAL SATISFACTION, WITHO UT APPRECIATING THE CORRECT INTERPRETATION OF THE AGREEMENT BETWEEN THE APPE LLANT AND GLOBAL VIPASSANA FOUNDATION, WHICH MAKES IT CLEAR THA T THE PAYMENT WAS MADE ON ACCOUNT OF COMMERCIAL EXPEDIENCY. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED EVEN IN HIS ALTERNATIVE REASONING THAT THE PAYMENT WAS A CAPITA L EXPENDITURE AND THAT NO TDS HAD BEEN MADE. HE FAILED TO APPRECIATE THAT THE PAYMENT WAS WHOLLY OF REVENUE CHARACTER AND ALLOWABL E U/S 37 OF THE INCOME TAX ACT. EVEN IF THE PAYMENT WAS ASSUMED TO BE IN THE NATURE OF 'ROYALTY, EVEN THEN, IT WAS NOT OPEN TO THE LEARNED CO MMISSIONER OF INCOME-TAX (APPEALS) TO INVOKE S. 40(A)(IA) AND DISA LLOW THE AMOUNT. 4. WITHOUT PREJUDICE TO THE ABOVE, HAVING HELD THAT IN SU BSTANCE THE APPELLANT HAD ONLY MADE A 'DONATION', THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN REJECTING THE APPELLANT 'S ALTERNATIVE PLEA THAT THE APPELLANT WOULD BE ENTITLED TO DEDUCTION U/S 80 G. 5. REASONS ASSIGNED BY LEARNED COMMISSIONER OF INCO ME-TAX (APPEALS) ARE WRONG, INSUFFICIENT AND CONTRARY TO LAW . 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY IS ENGAGED IN TRADING OF MEDICAL EQUIPMENTS, SUPPLY OF SPARES AND ACCESSORIES, PROVIDING SERVICES AND ACTING AS COMMISSION AGENTS , HAVING I NCOME UNDER THE HEAD INCOME FROM BUSINESS. 4. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS U/S 143(3) R.W.S. 143(2) OF THE ACT, THE A.O. OBSERVED FROM THE PERUSAL OF THE P&L ACCOUNT THAT AN ITA 7064/MUM/2012 3 AMOUNT OF RS. 25 LACS HAVE BEEN DEBITED I.E. RS. 20 LACS TOWARDS BUSINESS PROMOTION EXPENSES AND RS. 5 LACS TOWARDS STAFF WEL FARE EXPENSES, WHICH WAS CLAIMED AS BUSINESS EXPENDITURE. THE ASSESSEE COMPANY SUBMITTED THAT THE ASSESSEE CO MPANY HAS PAID TO GLOBAL VIPASSANA FOUNDATION , A CHARITABLE TRUST OW NING GLOBAL PAGODA , RS. 20 LACS TOWARDS BUSINESS PROMOTION EXPENSES AND RS. 5 LACS TOWARDS STAFF WELFARE EXPENSES FOR THE USE OF GLOBAL PAGODA MAR K BY THE ASSESSEE COMPANY. THE COPY OF THE AGREEMENT ENTERED INTO BET WEEN THE ASSESSEE COMPANY AND GLOBAL VIPASSANA FOUNDATION WAS ALSO AT TACHED. THE ASSESSEE COMPANY SUBMITTED THAT GLOBAL VIPASSANA FOUNDATION HAS TREMENDOUS FOLLOWING IN THE WORLD AND ITS GLOBAL PAGODA MARK IS WORLD FAMOUS. THE ASSESSEE COMPANY OBTAINED THE PERMISSION TO USE THI S FAMOUS MARK TO REACH ITS CUSTOMERS. THE PAYMENT HAS BEEN MADE FOR THE U SE OF THIS MARK AND THERE IS NO CAPITAL ELEMENT IN IT. THE ASSESSEE CO MPANY SUBMITTED THAT THE AMOUNT OF RS. 25 LACS HAS BEEN PAID KEEPING IN VIEW THE BUSINESS INTEREST. IN SUPPORT THE ASSESSEE COMPANY RELIED UPON THE DECISI ON IN THE CASE OF MYSORE KIRLOSKAR V. CIT, 166 ITR 836. THE ASSESSEE COMPAN Y SUBMITTED THAT BY AVAILING THE RIGHT TO USE OF THE GLOBAL PAGODA MAR K, THE ASSESSEE COMPANYS INTEREST HAVE BEEN SERVED VERY WELL AND THE PRODUCT S OF THE COMPANY HAVE REACHED ACROSS TO THE PEOPLE WHO HAVE RESPECT FOR G LOBAL PAGODA AND VIPASSANA COURSES. IT WAS SUBMITTED BY THE ASSESSE E COMPANY THAT MANY COMPANIES ORGANIZED MEDITATION COURSES FOR ITS EMPL OYEES AND VIPASANNA IS A VERY POWERFUL AND EFFECTIVE METHOD OF MEDITATION WH ICH HAS TRANSFORMED THE LIVES OF NUMEROUS PEOPLE. THE ASSESSEE COMPANY SUBM ITTED THAT THE MONEY HAS BEEN PAID TO ENSURE ACCESS TO VARIOUS VIPASSANA COURSES FOR ITS EMPLOYEES , WHICH ARE AN IMPORTANT MANAGEMENT/REFRE SHER COURSES. THUS, THE ASSESSEE COMPANY SUBMITTED THAT THE EXPENSES HA VE BEEN INCURRED FOR BUSINESS EXPEDIENCY AND ARE ALLOWABLE AS A BUSINESS EXPENDITURE. IT WAS ITA 7064/MUM/2012 4 SUBMITTED THAT THERE IS NO CAPITAL ELEMENT IN IT AN D THE SAME SHOULD BE ALLOWED. THE A.O. REJECTED THE CONTENTIONS OF THE ASSESSEE C OMPANY AND OBSERVED THAT THE ASSESSEE COMPANY HAS CLAIMED THAT THE PAYMENTS HAVE BEEN MADE TO GLOBAL VIPASSANA FOUNDATION TOWARDS USE OF THE GLO BAL PAGODA MARK BY THE ASSESSEE COMPANY FOR ITS EXISTING BUSINESSES AND IN CONJUNCTION WITH ANY OTHER BUSINESS FOR A PERIOD OF TEN YEARS, VIDE AGRE EMENT DATED 23/03/2009. IT WAS OBSERVED BY THE AO THAT IT HAS NOT BEEN SPECIF IED BY THE ASSESSEE COMPANY AS HOW THE VALUATION OF RS. 20 LACS WAS ARR IVED AT AND HOW IT CAN BE QUANTIFIED VIS--VIS THE FUTURE POTENTIAL OF THE EX PANSION OF THE BUSINESS OF THE ASSESSEE COMPANY . THE AO OBSERVED THAT NO SUC H JUSTIFICATION HAS BEEN PROVIDED BY THE ASSESSEE COMPANY AS TO HOW THE MARK OF GLOBAL PAGODA IS USEFUL FOR ENHANCING ASSESSEE COMPANYS BUSINESS AN D THERE IS NO LOGO PLACED ON THE ASSESSEE COMPANYS LETTER HEADS OR IN ITS BU SINESS CORRESPONDENCE. THE A.O. OBSERVED THAT RS. 5 LACS HAS BEEN PAID TO ACCESS VIPASSANA COURSES FOR ITS EMPLOYEES WHEREAS NONE OF THE EMPLOYEES WER E SENT FOR THE MEDITATION COURSES CONDUCTED BY GLOBAL VIPASSANNA FOUNDATION D URING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR. THE AO HELD THAT THE RELIANCE PLACED BY THE ASSESSEE COMPANY IN THE CASE OF MYSORE KIRLOSKA R LIMITED (SUPRA) , WHEREBY MYSORE KIRLOSKAR LTD. DONATED THE MONEY TO MYSORE KIRLOSKAR EDUCATION TRUST BELONGING TO THE SAME GROUP AND THE CHILDREN OF THE EMPLOYEES OF THE COMPANY REPRESENTED 61% OF THE CHI LDREN OF THE SCHOOL ESTABLISHED BY THE TRUST, HENCE, THE FACTS ARE ENTI RELY DIFFERENT IN THE INSTANT CASE. THE ASSESSEE COMPANY HAS FAILED TO EXPLAIN T HE BUSINESS OR COMMERCIAL EXPEDIENCY OF THE EXPENDITURE CLAIMED AND NO DOCUME NTARY EVIDENCES WERE PROVIDED BY THE ASSESSEE COMPANY. THUS , THE CLAIM OF THE ASSESSEE COMPANY U/S 37(1) OF THE ACT WAS DENIED BY THE A.O. AND IN SUPPORT THE AO RELIED UPON THE DECISIONS OF HONBLE BOMBAY HIGH COURT IN THE C ASES OF GOODLASS NEROLAC PAINTS LTD. V. CIT (BOM), 137 ITR 58 AND INDIAN HUM E PIPE CO. LTD. V. DCIT ITA 7064/MUM/2012 5 (BOM), 311 ITR 146, VIDE ASSESSMENT ORDERS DATED 20 .12.2011 PASSED BY THE AO U/S 143(3) OF THE ACT. 5. AGGRIEVED BY THE ASSESSMENT ORDERS DATED 20.12.2 011 PASSED BY THE A.O. U/S. 143(3) OF THE ACT, THE ASSESSEE COMPANY HAS FI LED FIRST APPEAL BEFORE THE LEARNED CIT(A). 6. BEFORE THE LEARNED CIT(A) THE ASSESSEE COMPANY S UBMITTED THAT AN AMOUNT OF RS. 25 LACS WAS PAID TO GLOBAL VIPASSANA FOUNDATION UNDER AN AGREEMENT, WHEREBY IT WILL GET THE BENEFIT OF WORKS HOP/COURSES FOR ITS EMPLOYEES FOR PROFESSIONAL AN INTELLECTUAL DEVELOPM ENT. THUS, THIS IS A MATTER OF COMMERCIAL EXPEDIENCY HENCE THE PAYMENTS HAVE BE EN MADE. THE ASSESSEE COMPANY SUBMITTED THAT IT HAS THE RIGHT TO USE THE FAMOUS GLOBAL PAGODA MARK AND ALL RIGHTS, BENEFIT AND INTEREST IN RELAT ION THERETO. THE ASSESSEE COMPANY WAS ENTITLED TO USE THE SAID MARK ON ITS PR ODUCTS FOR ITS EXISTING BUSINESS. THE ASSESSEE COMPANY SUBMITTED THAT THE GLOBAL VIPASSANA FOUNDATION IS A SYMBOL OF TRUST AND THE MARK GLOBA L PAGODA MARK IS ALSO A RENOWNED MARK/SYMBOL AND BENEFITED THE ASSESSEE COM PANY TO PROMOTE RECOGNITION AND TRUST OF THE ASSESSEE COMPANYS PRO DUCTS IN THE MARKET, THUS, IT IS A BUSINESS PROMOTION EXPENSE WHICH SHOULD BE ALLOWED AS REVENUE EXPENDITURE. THE ASSESSEE COMPANY SUBMITTED THAT A N AGREEMENT WAS ENTERED INTO BETWEEN ASSESSEE COMAPNY AND GLOBAL VI PASSANA FOUNDATION AND THE PAYMENTS WERE MADE IN THE MONTH OF MARCH, 2 009 TOWARDS THE END OF THE RELEVANT PREVIOUS YEAR WHICH WAS FOR RIGHT TO USE FOR A PERIOD OF 10 YEARS AND FOR ACCESS FOR THE EMPLOYEES AND THERE WAS NO C ONDITION THAT THE MARK HAD NECESSARILY TO BE ACTUALLY USED . THE ASSESSEE COMPANY SUBMITTED THAT RELIEF MAY BE ALLOWED U/S 80G OF THE ACT. THE ASSE SSEE COMPANY RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CA SE OF SASSOON J. DAVID & COMPANY PRIVATE LIMITED V. CIT, (1979)118 ITR 261( SC), IN THE CASE OF CIT V. DHANRAJGIRJI, (!973)91 ITR 544(SC), ITAT DECISION I N THE CASE OF BRIGHTEST ITA 7064/MUM/2012 6 CIRCLE JEWELLERY V. ACIT IN ITA NO. 4511/MUM/2011 . THE ASSESSEE COMPANY ALSO RELIED UPON THE DECISION IN THE CASE OF CIT V . PRUTHVI BROKERS IN ITXA NO. 3908/2010 DECIDED BY THE HONBLE BOMBAY HIGH CO URT ON 21.6.2912. THE LEARNED CIT(A) OBSERVED THAT AN AMOUNT OF RS. 2 5 LACS WAS PAID TO GLOBAL VIPASSANA FOUNDATION AS DONATION. THE GLOBAL VIPAS SANA FOUNDATION HAS RECENTLY CONSTRUCTED A PAGODA IN MUMBAI AND THE PAY MENT AS PER THE LEARNED CIT(A) IN SUBSTANCE IS A DONATION THE CIT(A) HELD T HAT THE ASSESSEE COMPANY HAS IN FORM SHOWN IT AS PAYMENT FOR THE USE OF GLOB AL VIPASSANA FOUNDATIONS MARK IN THE ASSESSEE COMPANYS BUSINES S RECORDS, BUT IN SUBSTANCE THE PAYMENT IS DONATION. THE ASSESSEE CO MPANY WAS ASKED BY THE LEARNED CIT(A) TO PRODUCE THE RECEIPTS ISSUED BY GL OBAL VIPASSANA FOUNDATION BUT THE ASSESSEE COMPANY DID NOT PRODUCED THE RECEI PT FOR MAKING PAYMENT TO GLOBAL VIPASSANA FOUNDATION BEFORE THE LEARNED C IT(A). THE CONCLUSION OF THE LEARNED CIT(A) IS THAT THE PAYMENT MADE BY THE ASSESSEE COMPANY IS A DONATION . THE LEARNED CIT(A) OBSERVED THAT EVEN IF FOR ARGUMENT SAKE , IT IS ASSUMED THAT THE RIGHT TO USE THE MARKS IS FOR 10 Y EARS, THE PAYMENT IS MADE FOR BENEFIT OF AN ENDURING NATURE, WHICH IS A CAPIT AL EXPENDITURE . THE LEARNED CIT(A) FURTHER OBSERVED THAT EVEN IF IT IS TAKEN A S REVENUE EXPENDITURE THEN IT PARTAKES THE CHARACTER OF ROYALTY AND FEES FOR TECH NICAL SERVICES PAYMENTS , AND NO TAX HAS BEEN DEDUCTED AT SOURCE BY THE ASSES SEE COMPANY AS PER PROVISIONS OF THE ACT AND HENCE IT CANNOT BE ALLOWE D AS DEDUCTION AS PER SECTION 40(A)(IA) OF THE ACT. THE LEARNED CIT(A) C ONCLUDED THAT THIS IS A DONATION PAID BY THE DIRECTORS FOR THEIR SPIRITUAL SATISFACTION AND NOT AT ALL RELATED TO THE BUSINESS CARRIED ON BY THE ASSESSEE COMPANY . THE ADDITIONS MADE BY THE AO WERE SUSTAINED BY THE LEARNED CIT(A ) VIDE APPELLATE ORDERS DATED 31.10.2012. 7.AGGRIEVED BY THE APPELLATE ORDER DATED 31.10.2012 OF THE LEARNED CIT(A), THE ASSESSEE COMPANY FILED SECOND APPEAL BEFORE THE TR IBUNAL. ITA 7064/MUM/2012 7 8. BEFORE THE TRIBUNAL, THE LD. COUNSEL FOR THE ASS ESSEE COMPANY SUBMITTED THAT PAYMENT OF RS. 25 LACS WAS MADE TO G LOBAL VIPASSANA FOUNDATION WHICH WAS MEANT FOR MEDITATION FOR THE E MPLOYEES AND FOR THE GLOBAL PAGODA MARKS TO BE USED BY THE ASSESSEE COMP ANY FOR ITS BUSINESS PURPOSES . THE LD. COUNSEL FOR THE ASSESSEE COMPAN Y SUBMITTED THAT IN THE CASE OF SISTER CONCERN OF THE ASSESSEE COMPANY I.E. CHEMITO TECHNOLOGIES P. LTD. V. ADDL. CIT IN ITA NO. 447/MUM/2013 FOR THE A SSESSMENT YEAR 2009-10 , THE MUMBAI TRIBUNAL VIDE ITS ORDERS DATED 16-10-2 015 , HAS HELD THAT THIS IS A DONATION OF RS. 50 LACS TO GLOBAL VIPASSANA FO UNDATION WHICH HAS BEEN RIGHTLY ALLOWED U/S 80G OF THE ACT BY THE CIT(A) AN D THE TRIBUNAL REFUSED TO INTERFERE WITH THE ORDERS OF THE CIT(A) IN THE CASE OF SISTER CONCERN OF THE ASSESSEE COMPANY, M/S. CHEMITO TECHNOLOGIES PRIVATE LIMITED(SUPRA). THE LEARNED CIT(A) IN THE INSTANT CASE OF THE ASSESSEE TREATED THE AMOUNT AS DONATION AND NOT BUSINESS EXPENSES VIDE PARA 2.4 OF THE CIT(A) ORDERS DATED 31.10.2012. THE LD. COUNSEL SUBMITTED THAT THE SAID PAYMENT MAY BE ALLOWED AS DEDUCTIONS U/S. 80G OF THE ACT SUBJECT TO THE FU LFILLMENT OF ALL THE CONDITIONS PRESCRIBED FOR AVAILING THE DEDUCTION U/ S. 80G OF THE ACT. 9. THE LD. D.R. SUBMITTED THAT THE ASSESSEE COMPANY WAS ASKED BY THE LEARNED CIT(A) TO PRODUCE THE RECEIPT BUT THE SAME WAS NOT PRODUCED BY THE ASSESSEE COMPANY. THE ASSESSEE COMPANY MAY BE DIRE CTED TO PRODUCE THE RECEIPTS ISSUED BY GLOBAL VIPPASSANA FOUNDATION. 10. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND AL SO PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE RELIED UPON CASE LAWS. WE HAVE OBSERVED THAT THE ASSESSEE COMPANY HAS MADE PAYMENT OF RS. 2 5 LACS TO GLOBAL VIPASSANA FOUNDATION DURING THE PREVIOUS YEAR RELEV ANT TO THE ASSESSMENT YEAR AND THE ASSESSEE COMPANY HAS CLAIMED IT AS BUS INESS PROMOTION EXPENSES (RS. 20 LACS) AND STAFF WELFARE EXPENSES ( RS. 5 LACS) IN ITS BOOKS OF ITA 7064/MUM/2012 8 ACCOUNTS AND ALSO IN THE RETURN OF INCOME FILED WIT H THE REVENUE. THE PAYMENT OF RS. 25 LACS WAS STATED TO BE MADE FOR U SE OF THE GLOBAL PAGODA MARK AND THE COURSES OF MEDITATION TO BE HELD BY TH E GLOBAL VIPASSANA FOUNDATION. NO RECEIPT ISSUED BY THE GLOBAL VIPAS SANA FOUNDATION FOR PAYMENT OF RS. 25 LACS MADE BY THE ASSESSEE COMPANY TO GLOBAL VIPASSANA FOUNDATION HAS BEEN PRODUCED BY THE ASSESSEE COMPAN Y BEFORE THE LEARNED CIT(A) DESPITE BEING ASKED BY THE LEARNED CIT(A) TO PRODUCE THE SAME. THE SAID RECEIPT IS ALSO NOT PRODUCED BEFORE US. THE AS SESSEE COMPANY IS DIRECTED TO PRODUCE THE RECEIPT AND ALL OTHER RELEVANT DOCUM ENTS IN CONNECTION WITH THE PAYMENT OF RS.25 LACS TO GLOBAL VIPASSANA FOUND ATION TO SUBSTANTIATE ITS CLAIM BEFORE THE LEARNED CIT(A) FOR EXAMINATION AND VERIFICATION BY THE AUTHORITIES BELOW AS PER THE MANDATE OF THE ACT AND THE RULES MADE THEREOF. ACCORDINGLY , WE SET ASIDE AND RESTORE THIS ISSUE TO THE FILE OF THE LEARNED CIT(A) FOR THE PURPOSE OF DE-NOVO DETERMINATION OF THE ISSUE ON MERITS IN ACCORDANCE WITH LAW AFTER VERIFICATION AND EXAMINAT ION OF THE RECEIPT AND OTHER RELEVANT DOCUMENTS CONNECTED WITH THE PAYMENT OF RS. 25 LACS TO GLOBAL VIPASSANA FOUNDATION BY THE ASSESSEE COMPANY DURIN G THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR IN ACCORDANCE WITH THE ACT AND RULES MADE THEREOF AND IF THE CLAIM OF THE ASSESSEE COMPANY IS FOUND TO BE GENUINE AND CORRECT IN ACCORDANCE WITH THE LAW, THEN THE CLAIM OF THE ASSESSEE COMPANY MAY BE ALLOWED BY THE LEARNED CIT(A) ON MERITS IN A CCORDANCE WITH THE LAW. THE LEARNED CIT(A) WHILE DECIDING THE APPEAL IN SET ASIDE DE-NOVO PROCEEDINGS SHALL KEEP IN VIEW THE DECISION OF THE CO-ORDINATE BENCHES OF THE TRIBUNAL , MUMBAI IN THE CASE OF CHEMITO TECHNOLOGIES P. LTD. (SUPRA) WHEREBY THE MUMBAI TRIBUNAL IN ITA NO. 447/MUM/2013 FOR THE ASS ESSMENT YEAR 2009- 10 VIDE ORDERS DATED 16.10.2015 HAS GIVEN THE FOLLO WING FINDINGS:- KEEPING IN VIEW OF THE ARGUMENTS ADVANCED BY THE L EARNED REPRESENTATIVES OF BOTH THE PARTIES AND ON CAREFUL PERUSAL OF THE RECORDS, WE FIND IT IS NOT M DISPUTE THAT THE ASSESSEE MADE PAYMENT TO THE TUNE OF RS.50,00,000/- TO GVF AND CLAIMED THAT THE SAID AMOUNT WAS PAID FOR ITA 7064/MUM/2012 9 THE WELFARE AND MEDITATIONAL COURSES OF ITS EMPLOYE ES I.E FOR BUSINESS PURPOSE. THERE IS NOTHING ON RECORD WHICH MAY SPEAK ABOUT THE NEXUS OF THE BUSINESS OF THE ASSESSEE WITH THE GVF. MOREOVER , ON APPRAISAL OF THE ASSESSMENT ORDER, IT REVEALS THAT THE AO HAS RIGHTL Y DECLINED THE CLAIM OF ASSESSEE ON SEEING THE CASE OF THE ASSESSEE FROM DI FFERENT ANGLES. IN FACT THE ACTUAL CLAIM OF THE ASSESSEE WAS TO THE TUNE OF RUPEES SIXTY LACS WHICH WAS PAID TO GVF AND ON SEEING THE ACCOUNT BOO K OF ASSESSEE THE CLAIM TO THE TUNE OF RUPEES TEN LACS WAS ALLOWED WH ICH WAS THE ACTUAL EXPENDITURE OF THE ASSESSEE UPON THE EMPLOYEE. NO E XPENDITURE OF ANY KIND UPON THE EMPLOYEE OF THE ASSESSEE WAS SHOWN BE FORE ANY AUTHORITY. THE ASSESSEE MAY PAY ANY AMOUNT TO ANYON E BUT THE RELEVANCY WITH THE BUSINESS IS LIABLE TO BE VIEWED. IF ASSESSEE DONATED CERTAIN FUND TO THE CHARITABLE INSTITUTION THEN HE CAN RAISE THE CLAIM UNDER SECTION 80G.THE ALTERNATE CLAIM OF THE ASSESS EE U/S 80G OF THE ACT HAS RIGHTLY BEEN ALLOWED BY THE LEARNED CIT(A) IN H IS ORDER. THEREFORE, IN THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE LEARNED CIT(A) HAS PASSED THE ORDER IN QUESTION RIGHTLY AND CORRECTLY WHICH DOES NOT REQUIRE TO BE INTERFERED WITH AT THIS STAGE. ACCORDINGLY, W E UPHOLD HIS ORDER ON THIS COUNT AND DISMISS GROUND NO. L OF THE APPEAL O F THE ASSESSEE. WE DECIDE THE APPEAL ACCORDINGLY AS PER DETAILED RE ASONING AND DISCUSSIONS AS SET OUT ABOVE BY SETTING ASIDE THE ORDERS OF THE LEARNED CIT(A) DATED 31.10.2012 AND RESTORING THE ISSUE TO THE FILE OF T HE LEARNED CIT(A) FOR DE-NOVO DETERMINATION OF THE ISSUE ON MERITS AS INDICATED I N THE PRECEDING PARAS OF THIS ORDER. NEEDLESS TO SAY PROPER AND ADEQUATE OPP ORTUNITY OF HEARING WILL BE GIVEN BY THE LEARNED CIT(A) TO THE ASSESSEE COMPANY IN ACCORDANCE WITH THE PRINCIPLES OF NATURAL JUSTICE IN ACCORDANCE WITH LA W AND THE ASSESSEE COMPANY WILL BE ALLOWED TO PRODUCE EVIDENCES/EXPLAN ATIONS IN ITS DEFENSE. WE ORDER ACCORDINGLY. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE COMPANY IN ITA N0. 7064/MUM/2012 FOR THE ASSESSMENT YEAR 2009-10 IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ITA 7064/MUM/2012 10 ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH MAY , 2016. # $% &' 13-05-2016 ( ) SD/- SD/- (SAKTIJIT DEY) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 13-05-2016 [ .9../ R.K. R.K. R.K. R.K. , EX. SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ / DR, ITAT, MUMBAI E BENCH 6. (BC D / GUARD FILE. / BY ORDER, = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI