EMERSON ELECTRIC COMPANY (I) P . LTD, MUMBAI V. DCIT (OSD) RG 3(1), MUMBAI

ITA 7613/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1918 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: K
• Next Hearing Date: 20-11-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 26-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N K CHAND
• Assessee Lawyers: SHRI DHANESH BAFNA
• Keywords: Related party transaction; Transfer pricing; Rectification of order; Opportunity of being heard; International transaction
• Section: 143(3); 234B; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL K BENCH, MUMBAI , , BEFORE SHRI JASON P. BOAZ, A M AND SHRI AMIT SHUKLA , J M ./ ITA NO. 7613/MUM/2012 ( / ASSESSMENT YEAR: 2008 - 09 ) M/S. EMERSON ELECTRIC COMPANY (INDIA) P. LTD. /APPELLANT 301, SOLITAIRE CORPORATE PARK 151, M.V. ROAD, ANDHERI (E) MUMBAI 400093 / VS. DCIT (OSD), RANGE - 3(1) AAYAKAR BHAVAN, M.K. ROAD / RESPONDENT MUMBAI 400020 ./ PAN - AAACE1260B / APPELLANT BY: SHRI SHRI DHANESH BAFNA & MS. CHANDNI SHAH / RESPONDENT BY : SHRI N.K. CHAND / DATE OF HEARING : 02 . 12 . 2015 / DATE OF PRONOUNCEMENT : 18 . 12 .2015 / O R D E R PER JASON P. BOAZ , A.M. THIS APPEAL BY THE ASSESSEE IS DIRECT ED AGAINST THE FINAL ORDER OF ASSESSMENT PASSED BY THE DCIT(OSD) - 3(1), MUMBAI UNDER SECTION 143(3) R.W.S. 144C(13) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 22 . 10.2012 IN PURSUANCE OF THE DIRECTIONS ISSUED BY THE DISPUTE RESOLUTION PANEL (IN SHORT DRP) UNDER SECTION 144C(5) OF THE ACT VIDE ORDER DATED 04.09.2012. THE RELEVANT ASSESSMENT YEAR IS 2008 - 09. 2 . THE FACTS OF THE CASE, BRIEFLY, ARE AS UNDER: - 2 ITA NO. 7613/MUM/2012 M/S. EMERSON ELECTRIC COMPANY (INDIA) P. LTD. 2.1 THE ASSESSEE, A COMPANY ENGAGED, INTER ALIA, IN THE PROVISION OF FACILITATION SUPPORT SERVICES TO ITS ASSOCIATED ENTERPRISES (AE IN SHORT) I.E. ITS PARENT COMPANY, EMERSON ELECTRIC CO., USA WITH A MARKUP OF 10%. FOR A.Y. 2008 - 09, ASSESSEE FILED ITS RETURN OF INCOME ON 30.09.2008 DECLARING TOTAL INCOME OF ` 19,13,01,378 / - . THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE ACT AND THE CASE WAS SUBSEQUENTLY TAKEN UP FOR SCRUTINY. IN THE PERIOD UNDER CONSIDERATION, SINCE IT WAS OBSERVED THAT ASSESSEE HAD REPORTEDLY ENTERED INTO A NUMBER OF INTERNATIONAL TRANSACTIONS, ASS ESSING OFFICER (AO IN SHORT) MADE A REFERENCE UNDER SECTION 92CA OF THE ACT TO THE TRANSFER PRICING OFFICER (TPO IN SHORT) FOR DETERMINING THE ARMS LENGTH PRICE (ALP) OF THESE INTERNATIONAL TRANSACTIONS REPORTED IN FORM 3CEB FILED ASSESSEE. THE TPO, VIDE ORDER UNDER SECTION 92CA(3) OF THE ACT DATED 28.03.2011 PROPOSED AN ADJUSTMENT OF ` 17,77,486/ - ON ACCOUNT OF THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE IN RESPECT OF THE RENDERING OF FACILITATION SUPPORT SERVICES. THE AO THEN ISSUED A DRAFT ASSESS MENT ORDER UNDER SECTION 143(3) OF THE ACT DATED 12.12.2011 WHEREIN THE INCOME OF THE ASSESSEE WAS DETERMINED AT ` 20,59,36,610/ - IN VIEW OF THE FOLLOWING ADDITIONS/ DISALLOWANCES MADE WITH REFERENCE TO THE RETURNED INCOME: - I) PROPOSED ADDITION ON ACCOUNT OF ` 17,17,486/ - T.P. ADJUSTMENT TO ALP II) DISALLOWANCE ON ACCOUNT OF FOREIGN ` 1,28,57,745/ - TRAVEL EXPENSES 2.2 AGGRIEVED BY THE DRAFT ORDER OF ASSESSMENT FOR A.Y. 2008 - 09 DATED 12.12.2011, ASSESSEE FILED ITS OBJECTIONS THERETO BEFORE THE DRP. T HE DRP ISSUED ITS DIRECTIONS UNDER SECTION 144C(5) OF THE ACT VIDE ORDER DATED 04.09.2012 UPHOLDING THE T.P. ADJUSTMENT OF ` 17,77,486/ - PROPOSED BY THE TPO AND UPHELD THE DISALLOWANCE ON ACCOUNT OF FOREIGN TRAVEL EXPENDITURE TO THE EXTENT OF 50% I.E. 3 ITA NO. 7613/MUM/2012 M/S. EMERSON ELECTRIC COMPANY (INDIA) P. LTD. ` 64,2 8,873/ - . IN PURSUANCE OF THE DIRECTIONS OF THE DRP IN ITS ORDER DATED 04.09.2 012, ASSESSING OFFICER COMPLETE D THE FINAL ORDER OF ASSESSMENT UNDER SECTION 143(3) R.W.S. 144C(3) OF THE ACT VIDE ORDER DATED 22.10.2012 WHEREIN THE INCOME OF ASSESSEE WAS DETERMINED AT ` 19,95,07,740/ - . 3 . AGGRIEVED BY THE FINAL ORDER OF ASSESSMENT FOR A.Y. 2008 - 09 DATED 22.10.2012, ASSES SEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL RAISING THE FOLLOWING GROUNDS: - I GROUND NO. 1 1.1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE DEPUTY COMMISSIONER OF INCOME TAX (O.S.D.), RANGE 3(1), MUMBAI (AO), UNDER THE DIREC TIONS ISSUED BY THE HON'BLE DISPUTE RESOLUTION PANEL (DRP), ERRED IN CONFIRMING THE ADDITION MADE TO THE APPELLANTS INCOME BY THE AO. II. GROUND NO. 2 2.1 THE AO ERRED IN FACTS AND IN LAW IN CONCLUDING THE ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 144C(13) OF THE INCOME TAX ACT, 1962 ('THE ACT'), IN: 2.1.1 MAKING AN INCOME ADJUSTMENT TO THE APPELLANT'S INTERNATIONAL TRANSACTIONS OF PROVISION OF FACILITATION SUPPORT SERVICES AT RS.17,77,486; AND 2.1.2 NOT ALLOWING THE USE OF MULTIPLE YEAR DAT A AS PRESCRIBED UNDER RULE 10B(4) OF THE INCOME - TAX RULES, 1962 READ WITH THE OECD TRANSFER PRICING GUIDELINES, AND DETERMINING THE ARM'S LENGTH PRICE ON THE BASIS OF FINANCIAL INFORMATION OF THE COMPARABLES FOR THE YEAR ENDED 31 MARCH, 2008 IDENTIFIED PUR SUANT TO AN UPDATED SEARCH FOR COMPARABLES PERFORMED DURING THE ASSESSMENT PROCEEDINGS. THE AO/ TRANSFER PRICING OFFICER ('TPO')/ HON'BLE DRP ERRED IN REJECTING THE CONTEMPORANEOUS DOCUMENTATION MAINTAINED BY THE APPELLANT AS REQUIRED UNDER THE INDIAN TRAN SFER PRICING REGULATIONS. 2.2 THE APPELLANT PRAYS THAT THE BOOK VALUE OF THE INTERNATIONAL TRANSACTION FOR PROVISION OF FACILITATIONS SUPPORT SERVICES, SHOULD BE HELD TO BE THE ARM'S LENGTH PRICE OF THE SAID 4 ITA NO. 7613/MUM/2012 M/S. EMERSON ELECTRIC COMPANY (INDIA) P. LTD. TRANSACTION AS PER THE APPELLANT'S TP DOCUMENTA TION, AND THE AO BE DIRECTED TO DELETE THE ADDITIONS MADE KEEPING THE AFORESAID GROUNDS IN PERSPECTIVE. III GROUND NO. 3 3.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO, UNDER THE DIRECTIONS ISSUED BY THE HON'BLE DRP, ERRED IN DISALLOWING FOREIGN TRAVEL EXPENSES OF RS.64,28,873, BEING 50% OF 1,28,57,745. 3.2 THE APPELLANT PRAYS THAT THE AO BE DIRECTED TO DELETE THE DISALLOWANCE FOR FOREIGN T RAVEL EXPENSES OF RS.62,28,873 , BEING 50% OF RS.1,28,57,745. IV GROUND NO. 4 4.1 WITHOU T PREJUDICE TO GROUND NO. 3 ABOVE, THE AO, UNDER THE DIRECTIONS ISSUED BY THE HON'BLE DRP, ERRED IN CONSIDERING THE AMOUNT OF FOREIGN TRAVEL EXPENSES AT RS.1,28,57,745 AS AGAINST RS. 60,47,745. 4.2 THE APPELLANT PRAYS THAT THE AO BE DIRECTED TO DISALLOW 50% OF RS.60,47,745 . V GROUND NO. 5 5.1 WITHOUT PREJUDICE TO GROUND NO. 3 AND GROUND NO. 4 ABOVE, THE AO, UNDER THE DIRECTIONS ISSUED BY THE HON'BLE DRP, ERRED IN NOT INCREASING THE PROPORTIONATE DEDUCTION UNDER SECTION 10A OF THE ACT CORRESPONDING TO THE DISALLOWANCE OF FOREIGN TRAVEL EXPENSES RELATING TO UNIT CLAIMING DEDUCTION UNDER SECTION 10A OF THE ACT. 5.2 THE APPELLANT PRAYS THAT THE AO BE DIRECTED TO INCREASE THE PROPORTIONATE DEDUCTION UNDER SECTION 10A OF THE ACT FOR DISALLOWANCE MADE FOR THE FO REIGN TRAVEL EXPENSES. VI GROUND NO. 6 6.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO ERRED IN NOT GRANTING CREDIT OF ADVANCE TAX PAID OF RS.5,66,80,000 AS CLAIMED BY THE APPELLANT. 6.2 THE APPELLANT PRAYS THAT THE AO BE DIRECTED TO GIVE THE CREDIT IN RESPECT OF ADVANCE TAX PAID OF RS. 5,66,80,000. VII GROUND NO. 7 7.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO ERRED IN GRANTING CREDIT OF TAX DEDUCTED AT SOURCE ('TDS') TO THE EXTENT OF RS.56,20,664 ONLY AS 5 ITA NO. 7613/MUM/2012 M/S. EMERSON ELECTRIC COMPANY (INDIA) P. LTD. AGAINST RS.60,95,231 CLAIMED BY THE APPELLANT. 7.2 THE APPELLANT PRAYS THAT THE AO BE DIRE CTED TO GIVE THE BALANCE CREDIT IN RESPECT OF TDS OF RS. 4,74,567. VIII GROUND NO. 8 8.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO ERRED IN NOT GRANTING CREDIT OF TAXES WITHHELD IN FOREIGN JURISDICTION OF RS.58,38,788 AS CLAIMED BY THE APPELLANT. 8.2 THE APPELLANT PRAYS THAT THE AO BE DIRECTED TO GIVE THE CREDIT IN RESPECT OF TAXES WITHHELD IN FOREIGN JURISDICTION OF RS.58,38,788. IX GROUND NO. 9 9.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO ERRED IN C HARGING INTEREST UNDER SECTION 234B OF THE ACT OF RS.3,42,05,609. 9.2 THE APPELLANT PRAYS THAT THE AO BE DIRECTED TO DELETE THE INTEREST CHARGED UNDER SECTION 234B OF THE ACT. X GROUND NO. 10 10.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO ERRED IN CHARGING INTEREST UNDER SECTION 234C OF THE ACT OF RS.29,99,835. 1 0.2 THE APPELLANT PRAYS THAT THE AO BE DIRECTED TO DELETE THE INTEREST CHARGED UNDER SECTION 234C OF THE ACT. 3.1 VIDE APPLICATION DATED 24.11.2015 ASSESSEE HAS FILED THE FOLLOWING ADDITIONAL GROUNDS OF APPEAL ON TRANSFER PRICING: - 2.3 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED TRANSFER PRICING OFFICER (LD. TPO) ERRED IN INCLUDING THE COMPARABLE K C MARITIME (INDIA) LIMITED (K C MARITIME) IN ITS COMPARABILITY ANALYSIS WHICH IS FUNCTIONALLY DISSIMILAR TO THE APPELLANT FOR BENCHMARKING THE INTERNATIONAL TRANSACTION OF PROVISIONS OF FACILITATION SUPPORT SERVICES BY THE APPELLANT TO ITS ASSOCIATED ENTERPRISES. 2.4 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. TPO ERRED IN INCLUDING THE COMPARABLE GREENACRE HOLDINGS LIMITED (GREENACRE) HAVING RELATED PARTY TRANSACTION (RPT) > 25% FOR BENCHMARKING THE 6 ITA NO. 7613/MUM/2012 M/S. EMERSON ELECTRIC COMPANY (INDIA) P. LTD. INTERNATIONAL TRANSACTION OF PROVISIONS OF FACILITATION SUP PORT SERVICES BY THE APPELLANT TO ITS ASSOCIATED ENTERPRISE. THE APPELLANT PRAYS THAT THE COMPARABLE GREENACRE OUGHT TO BE EXCLUDED FROM THE FINAL SET OF COMPARABLE COMPANIES CONSIDERED BY THE LD. TPO FOR COMPARABILITY ANALYSIS ON ACCOUNT OF HIGH RPT. 4 . GR OUND NO. 1 IS GENERAL IN NATURE AND THEREFORE NO SPECIFIC ADJUDICATION IS CALLED FOR THEREON. 5 . GROUNDS AT S.NOS. 6 TO 9: A T THE OUTSET OF THE HEARING BEFORE US, THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT THESE GROUNDS AT NOS. 6 TO 9 ARE NOT BEING PRES SED IN THE INSTANT APPEAL AS THE RELIEF SOUGHT FOR BY ASSESSEE HAS BEEN ALLOWED TO IT BY WAY OF A RECTIFICATION ORDER PASSED BY AO UNDER SECTION 154 OF THE ACT. IN THE ABOVE, CIRCUMSTANCES, THESE GROUNDS ARE RENDERED INFRUCTUOUS AND ARE ACCORDINGLY DISMISS ED AS NOT PRESSED. 6 . GROUND NO. 10: CHARGE OF INTEREST UNDER SECTION 234C OF THE ACT. 6.1 ASSESSEE DENIES ITSELF LIABLE TO THE CHARGE OF INTEREST UNDER SECTION 234C OF THE ACT. THE CHARGING OF INTEREST IS CONSEQUENTIAL AND MANDATORY AND AO HAS NO DISCRETION IN THE MATTER. THIS PROPOSITION HAS BEEN UPHELD BY THE HON'BLE APEX COURT IN THE CASE OF ANJUM H. GHASWALA IN 252 ITR 1 (SC). WE, THEREFORE UPHOLD THE ACTION OF THE AO IN CHARGING THE SAID INTEREST. THE AO IS, HOWEVER, DIRECTED TO RECOMP UTE THE INTEREST CHARGEABLE UNDER SECTION 234C, IF ANY, WHILE GIVING EFFECT TO THIS ORDER. TRANSFER PRICING ISSUE 7 . GROUND NO. 2 (2.1 TO 2.2) 7 . 1 THE GROUND AT 2.1.1 IS GENERAL IN NATURE AND THEREFORE, NO SPECIFIC ADJUDICATION IS CALLED FOR THEREON. 7 ITA NO. 7613/MUM/2012 M/S. EMERSON ELECTRIC COMPANY (INDIA) P. LTD. 7 . 2 GROUND NO. 2.1.2 IS RAISED WITH RESPECT TO THE ACTION OF THE TPO/DRP IN NOT ALLOWING ASSESSEE THE USE OF MULTIPLE YEA R DATA FOR DETERMINING THE ALP OF THE INTERNATIONAL TRANSACTIONS. THIS GROUND WAS NOT URGED BEFORE US AND WE THEREFORE DISMISS THIS GROUND AS INFRUCT UOUS. 7.2.1 EVEN OTHERWISE, THIS GROUND IS LIABLE TO BE DISMISSED. RULE 10B(4) OF THE I.T. RULES, 1962 SPECIFIES THE REQUIREMENT REGARDING THE DATA TO BE USED FOR ANALYZING THE COMPARABILITY OF AN UNCONTROLLED TRANSACTION WITH AN INTERNATIONAL TRANSACTION. THE USE OF THE WORD SHALL IN THE MAIN PROVISIONS OF THE RULE MAKES IT ABUNDANTLY CLEAR THAT THE USE OF DATA OF THE CURRENT FINANCIAL YEAR (I.E. OF THE FINANCIAL YEAR IN WHICH THE INTERNATIONAL TRANSACTION WAS ACTUALLY ENTERED INTO) IS A MAND ATORY REQUIREMENT OF LAW IN THE COMPARABILITY ANALYSIS TO BE UNDERTAKEN AS PER INDIAN T.P. REGULATIONS. IT IS ONLY THE PROVISO TO RULE 10B(4) THAT MAKES AN EXCEPTION IN ALLOWING THE US E OF DATA OF THE TWO PRECEDING YEARS IF, AND ONLY IF, IT IS ESTABLISHED THAT THE DATA REVEALS FACTS WHICH COULD HAVE AN INFLUENCE ON THE DETERMINATION OF TRANSFER PRICE. THE MANDATORY REQUIREMENT OF LAW FOR THE USE OF DATA OF THE CURRENT FINANCIAL YEAR CANNOT BE DISPENSED WITH EVEN IF THE RELEVANT DATA WAS NOT AVAILABLE TO THE ASSESSEE IN THE PUBLIC DATA BASE AT THE TIME OF THE PREPARATIO N OF T.P. REPORT. AT BE ST, NON AVAILABILITY OF INFORMATION IN THE PUBLIC DATA BASE CAN BE RELEVANT TO EXPLAIN THE DISCHARGE OF THE ASSESS EES OBLIGATION OF MAINTAINING THE PRESCRIBED DOCUMENTATION UNDER SECTION 92D(I) OF THE ACT READ WITH RULE 10D OF THE I.T. RULES, 1962. HOWEVER, SUCH NON - AVAILABILITY WILL NOT DISPENSE WITH THE MANDATORY REQUIREMENT OF RULE 10 B(4) FOR USING CURRENT FINANCI AL YEAR DATA IN CONDUCTING COMPARABILITY ANALYSIS AND IN DETERMINING THE ALP IN ACCORDANCE WITH SECTIONS 92C(2) AND 92C(2) OF THE ACT. 8 ITA NO. 7613/MUM/2012 M/S. EMERSON ELECTRIC COMPANY (INDIA) P. LTD. 7.2.2 AS IT IS MANDATORY REQUIREMENT OF LAW TO UTILIZE DATA OF THE CURRENT FINANCIAL YEAR TO CONDUCT THE COMPARABILITY AN ALYSIS AT THE TIME OF T.P. PROCEEDINGS, THE TPO IS NOT ONLY EMPOWERED BUT ALSO DUTY BOUND TO DETERMINE THE ALP USING SUCH CONTEMPORANEOUS DATA FOR THIS PURPOSE EVEN IF SUCH DATA WAS NOT AVAILABLE TO ASSESSEE IN THE PUBLIC DATA BASES AT THE TIME OF PREPARAT ION OF ITS T.P. STUDY. FURTHER, WE ARE ALSO OF THE VIEW THAT THE DRP/TPO RIGHTLY REJECTED THE USE OF EARLIER YEARS DATA BY ASSESSEE, AS ASSESSEE FAILED TO ESTABLISH BEFORE THE TPO/DRP OR EVEN URGE BEFORE US HOW SUCH EARLIER YEARS DATA HAD AN INFLUENCE ON THE PRICES OF THE CURRENT FINANCIAL YEAR. 7.3 ADDITIONAL GROUNDS OF APPEAL 7.3.1 IN THE ADDITIONAL GROUNDS OF APPEAL RAISED AT S. NOS. 2.3 AND 2.4 (SUPRA), ASSESSEE SEEKS THE EXCLUSION OF THE FOLLOWING TWO COMPARABLES FROM THE TPOS LIST OF COMPARABLES: - I) KC. MARITIME (INDIA) LTD., ON GROUNDS OF BEING FUNCTIONALLY DISSIMILAR TO THE ASSESSEE; AND II) GREENACRE HOLDINGS LTD., ON GROUNDS OF HAVING RELATED PARTY TRANSACTIONS (RPT IN SHORT) IN EXCESS OF 25% WHICH IS THE THRESHOLD/FILTER FOR BENCHMARKING I NTERNATIONAL TRANSACTIONS. 7.3.1 IN ITS APPLICATION FOR ADMISSION OF ADDITIONAL GROUNDS, IN RESPECT TO THE EXCLUSION OF THE AFORESAID TWO COMPANIES FROM THE LIST OF COMPARABLES, IT IS ALSO SUBMITTED THAT THE CONSIDERATION OF THESE GROUNDS WOULD NOT REQUIR E ANY INVESTIGATIONS INTO FRESH FACTS. BEFORE US, THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT ASSESSEE PLEADS FOR THE EXCLUSION OF THE TWO AFORESAID COMPANIES (SUPRA). IT IS SUBMITTED THAT M/S. K.C. MARITIME (INDIA) LTD. OUGHT TO BE EXCLUDED ON GROUND S OF FUNCTIONAL DISSIMILARITY. THE LEARNED A.R. FOR THE 9 ITA NO. 7613/MUM/2012 M/S. EMERSON ELECTRIC COMPANY (INDIA) P. LTD. ASSESSEE POINTED OUT THAT AS PER THE ANNUAL REPORT OF THIS COMPANY (PLACED AT PAGES 60 TO 80 OF PAPER BOOK) SCHEDULE K EVIDENCES THAT ITS INCOME WAS ENTIRELY FROM CHARTER HIRE OF SHIPS/MARITIME VESSEL S WHEREAS ASSESSEE IN THE CASE ON HAND WAS INTO FACILITATION SUPPORT SERVICES TO ITS AES. WITH REGARD TO M/S. GREENACRE HOLDINGS LTD., THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT AS PER THE ANNUAL REPORT OF THIS COMPANY (PLACED AT PAGES 53 TO 59 OF A SSESSEES PAPER BOOK) IN THE NOTES TO ACCOUNTS AT PAGE 58 REGARDING THE DISCLOSURE OF TRANSACTIONS WITH RELATED PARTIES, ITS RPT ON ACCOUNT OF LEASE RENTAL AND MAINTENANCE INCOME WAS APPROX. ` 2.10 CRORES OUT OF THE TOTAL REVENUE/TURNOVER OF APPROX. 2.90 CR ORES. IT WAS PRAYED THAT SINCE IT WAS FACTUALLY EVIDENT THAT THE RPT OF GREENACRE HOLDINGS LTD. WAS IN EXCESS OF 25% WHICH IS THE FILTER FOR BENCHMARKING OF INTERNATIONAL TRANSACTIONS, THIS COMPANY OUGHT TO BE EXCLUDED FROM THE TPOS LIST OF COMPARABLES. I T IS SUBMITTED THAT ASSESSEE HAD OBJECTED TO THE INCLUSION OF COMPANY M/S. GREENACRE HOLLINGS LTD. IN THE LIST OF COMPARABLES BEFORE THE DRP ALSO. THE LEARNED A.R. FOR THE ASSESSEE SUBMITS THAT THOUGH ASSESSEE HAD NOT OBJECTED TO THE INCLUSION OF M/S. K.C. MARITIME (INDIA) LTD. BEFORE THE AUTHORITIES BELOW, IT IS CLEAR FROM THE ANNUAL REPORT OF THE COMPANY THAT ITS REVENUES ARE FROM FUNCTIONS AND SOURCES THAT ARE NOT SIMILAR TO THAT OF ASSESSEE. THE LEARNED A.R. FOR THE ASSESSEE PRAYS THAT IN VIEW OF THE FA CTS OF THE MATTER, AS MENTIONED ABOVE, THE BENCH MAY BE PLEASED TO ADMIT THE ADDITIONAL GROUNDS RAISED FOR EXCLUSION OF THE AFOREMENTIONED TWO COMPANIES FOR CONSIDERATION AND ADJUDICATION IN THIS APPEAL. IN SUPPORT OF ITS ARGUMENTS, ASSESSEE PLACED RELIANC E ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: - I) CIT VS. NELLIAPPAN 66 ITR 722 (SC) II) JUTE CORPORATION OF INDIA LTD. 187 ITR 688 (SC) 10 ITA NO. 7613/MUM/2012 M/S. EMERSON ELECTRIC COMPANY (INDIA) P. LTD. III) AHMEDABAD ELECTRICITY CO. LTD. AND GODAVARI SUGAR MILLS LTD. VS. CIT 199 ITR 351 (BOM) IV) NATIONAL THERMAL POWER CO. LTD. VS. CIT 229 ITR 383 (SC) V) CIT VS. GOVINDRAM BROS. P. LTD. 141 ITR 626 (BOM) 7.4 PER CONTRA, THE LEARNED D.R. FOR REVENUE STRONGLY OPPOSED THE ADMISSION OF THE ADDITIONAL GROUNDS RAISED BY ASSESSEE. IT WAS SUBMITTED THAT WHILE ASSESSEE HAD CHALL ENGED THE INCLUSION OF GREENACRE HOLDINGS LTD. BEFORE THE DRP, IT WAS NOT ON THE GROUND OF RPT FILTER. IT WAS COUNTERED THAT IF GREENACRE HOLDING LTD. WAS TO BE EXCLUDED ON GROUND OF RPT, THEN ANOTHER COMPARABLE M/S. TATA SERVICES LTD. SHOULD ALSO BE EXCLU DED FROM THE COMPARABLES ON THE BASIS OF RPT FILTER. IN RESPECT OF THE COMPANY M/S. K C MARITIME (INDIA) LTD., THE LEARNED D.R. SUBMITTED THAT ITS EXCLUSION WAS NEVER CHALLENGED BEFORE THE DRP AND THEREFORE THE ADDITIONAL GROUND RAISED IN THIS REGARD SHOU LD NOT BE ADMITTED. 7.5 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD, INCLUDING THE JUDICIAL DECISIONS LISTED. ON AN APPRECIATION OF THE FACTS BEFORE US, WE ARE OF THE OPINION THAT THE ADMISSION OF ADDITIO NAL GROUNDS RAISED BY THE ASSESSEE IN RESPECT OF THE ISSUE OF EXCLUSION OF THE TWO COMPANIES M/S. K C MARITIME (INDIA) LTD. AND M/S. GREENACRE HOLDINGS LTD. FROM THE LIST OF COMPARABLES SELECTED BY THE TPO ARE TO BE ADMITTED AS THEY WOULD NOT REQUIRE INVES TIGATION INTO FRESH FACTS AS THE DETAILS/ ARGUMENTS PUT FORTH IN RESPECT OF THESE TWO COMPANIES, LIKE THEIR ANNUAL REPORTS, ETC. WOULD ALREADY BE PART OF THE RECORDS OF THE AUTHORITIES BELOW. IN COMING TO THIS DECISION, WE DRA W SUPPORT FROM THE JUDICIAL PR ONOUNCEMENTS CITED AND PLACED BEFORE US (SUPRA) WHICH MADE IT CLEAR THAT THE TRIBUNAL MAY ALLOW ASSESSEE TO URGE GROUNDS THAT ARE NOT RAISED IN THE MEMORANDUM OF APPEAL. THE TRIBUNAL, IN ITS 11 ITA NO. 7613/MUM/2012 M/S. EMERSON ELECTRIC COMPANY (INDIA) P. LTD. JUR ISDICTION, IF IT THINKS IT NECESSARY MAY ADMIT THE GROUNDS IN ORDER TO CORRECTLY ASSESS THE ASSESSEES INCOME. WE, THEREFORE, IN THE INTEREST OF EQUITY AND JUSTICE AND FOLLOWING THE JUDICIAL PRECEDENTS IN THIS REGARD DRAWN FROM THE CASES CITED BY ASSESSEE (SUPRA), ADMIT THE ADDITIONAL GROUNDS OF APPEAL T 2.3 AND 2.4 RAISED BY ASSESSEE FOR CONSIDERATION AND ADJUDICATION THEREON. GROUNDS 2.2 TO 2.4: EXCLUSION OF COMPARABLES REQUESTED FOR BY ASSESSEE 8 . K C MARITIME (INDIA) LTD. ( KCM) 8.1 THIS COMPANY, I.E. KCM, WAS SELECTED AS A COMPARABLE BY THE TPO. BEFORE US, THE LEARNED A.R. FOR THE ASSESSEE CONTENDED THAT THIS COMPANY SHOULD BE EXCLUDED FROM THE FINAL SET OF COMPARABLES AS IT WAS FUNCTIONALLY DISSIMILAR TO ASSESSEE IN THE CASE ON HAND. THE LEARNED A.R. FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE ANNUA L REPORT OF KCM PLACED AT PAGES 60 TO 80 OF ASSESSEES PAPER BOOK. IT WAS SUBMITTED THAT THIS COMPANY WAS IN THE BUSINESS OF HIRING AND CHARTERING OF SHIPS/MARITIME VESSELS FROM WHICH IT DERIVED ITS OPERATING INCOME/REVENUES AS IS EVIDENT FROM SCHEDULE K ON PAGE 74 OF THE PAPER BOOK AND FROM SCHEDULE C OF FIXED ASSETS WHICH CONFIRM THE SAME. THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT ON THE OTHER HAND, ASSESSEE IN THE CASE ON HAND WAS, INTER ALIA, IN THE BUSINESS OF PROVIDING FACILITATION SUPPORT SER VICES FOR ITS AES AT A MARKUP OF 10% ON COST. IT WAS SUBMITTED THAT IN THESE F ACTUAL CIRCUMSTANCES KCM, BEING FUNCTIONALLY DIFFERENT/DISSIMILAR FROM ASSESSEE IN THE CASE ON HAND, BE REMOVED FROM THE FINAL SET OF COMPARABLES. 8.2 THE LEARNED D.R. SUPPOR TED THE ORDERS OF THE TPO IN INCLUDING THIS COMPANY, I.E. KCM IN THE LIST OF COMPARABLES TO THE ASSESSEE. IT IS SUBMITTED THAT SINCE ASSESSEE HAD NOT OBJECTED TO THE INCLUSION OF THIS COMPARABLE BEFORE THE DRP, ASSESSEES PLEA FOR EXCLUSION OF THIS 12 ITA NO. 7613/MUM/2012 M/S. EMERSON ELECTRIC COMPANY (INDIA) P. LTD. COMPANY FROM THE LIST OF COMPARABLES OUGHT TO BE REJECTED. IF AT ALL, ASSESSEES PLEA IS ACCEPTED, THEN THE MATTER SHOULD BE REMANDED TO THE FILE OF THE TPO FOR EXAMINATION AND ADJUDICATION THEREOF. 8.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED AND CAREFULL Y CONSIDERED THE MATERIAL ON RECORD. THIS COMPANY, I.E. KCM WAS SELECTED AS A COMPARABLE TO ASSESSEE BY THE TPO AND NOT BY ASSESSEE. AS SUBMITTED BY THE LEARNED A.R. FOR THE ASSESSEE OF ASSESSEE, IT IS SEEN FROM THE ANNUAL REPORT OF THIS COMPANY, KCM, THAT IT WAS IN THE BUSINESS OF HIRING AND CHARTERING OF SHIPS/MARITIME VESSELS FROM WHICH IT EARNED ALMOST ALL OF ITS REVENUE IN THE FORM OF CHARTER HIRE CHARGES. IT IS ALSO SEEN FROM THE SCHEDULE OF FIXED ASSETS THAT ITS FIXED ASSETS ARE LARGELY SHIPS/VESSELS . IN RESPECT OF ASSESSEE IN THE CASE ON HAND, THE TPO OBSERVED THAT, INTER ALIA, IT IS INTO THE PROVISION OF FACILITATION SUPPORT SERVICES, SUCH AS ADMINISTRATIVE SUPPORT IN PROVIDING DEMO FOR THE PRODUCTS, HELPING DISTRIBUTORS GET THE ORDERS, TRACKING LOG ISTICS, ETC. TO ITS AES. IT APPEARS TO US, FROM A PERUSAL OF THE TPOS ORDER, THAT THIS ASPECT OF FUNCTIONAL DISSIMILARITY/ DIFFERENCE HAS NOT BEEN EXAMINED BY THE TPO WHILE DECIDING TO INCLUDE THIS COMPANY IN THE LIST OF COMPARABLES TO ASSESSEE. IN THIS FACTUAL MATRIX OF THE CASE, WE ARE OF THE VIEW THAT IN THE INTEREST OF EQUITY AND JUSTICE, THE MATTER OF THE COMPARABILITY OF THIS COMPANY, KCM TO ASSESSEE, IN THE CONTEXT OF ASSESSEES CLAIM THAT IT IS FUNCTIONALLY DISSIMILAR FROM ASSESSEE, REQUIRES TO BE EXAMINED BY THE TPO AND THEREFORE RESTORE THIS ISSUE TO THE FILE OF THE TPO. NEEDLESS TO ADD, ASSESSEE BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEARD AND TO FILE DETAILS/SUBMISSION IN THIS REGARD WHICH WILL BE DULY CONSIDERED BY THE TPO BEFORE TAKING A DE CISION IN THE MATTER. IT IS ORDERED ACCORDINGLY. 13 ITA NO. 7613/MUM/2012 M/S. EMERSON ELECTRIC COMPANY (INDIA) P. LTD. 9 . GREENACRE HOLDING LTD. (GREENACRE) 9.1 THIS COMPANY, I.E. GREENACRE WAS SELECTED AS A COMPARABLE BY THE TPO. IT WAS SUBMITTED THAT THE INCLUSION OF THIS COMPANY IN THE FINAL LIST OF COMPARABLES CHALLENG ED BY ASSESSEE BEFORE THE DRP FOR BEING INCLUDED WITHOUT ANY PROPER SCIENTIFIC SEARCH APPROACH. BEFORE US, THE LEARNED A.R. FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE ANNUAL REPORT OF THE COMPANY GREENACRE (PLACED AT PAGES 53 TO 59 OF THE PAP ER BOOK) AND MORE SPECIFICALLY TO THE NOTES ON ACCOUNTS ON PAGE 58 REGARDING THE DISCLOSURE OF RPT TO SHOW THAT ITS RPT ON ACCOUNT OF LEASE RENTALS AND MAINTENANCE INCOME WAS ALMOST ` 2.10 CRORES OUT OF TOTAL REVENUES OF APPROX. ` 2.90 CRORES. IT IS SUBMIT TED THAT THE APPLICATION OF THE RPT FILTER AT 25% HAS NOT BEEN CONSIDERED BY THE TPO WHILE INCLUDING THIS COMPANY IN THE LIST OF COMPARABLES TO ASSESSEE. IT IS SUBMITTED BY THE LEARNED A.R. FOR THE ASSESSEE THAT IN VIEW OF THE ABOVE FACTUAL MATRIX, THE RPT BEING IN EXCESS OF 25%, GREENACRE REQUIRES TO BE EXCLUDED FROM THE LIST OF COMPARABLES TO ASSESSEE. 9.2 PER CONTRA, THE LEARNED D.R. SUPPORTED THE ORDERS OF AUTHORITIES BELOW IN INCLUDING THIS COMPANY IN THE LIST OF COMPARABLES TO ASSESSEE. THE LEARNED D .R. SUBMITTED THAT IN THE EVENT OF GREENACRE BEING EXCLUDED FROM THE LIST OF COMPARABLES, THEN THE COMPARABLE TATA SERVICES LTD. ALSO REQUIRES TO BE EXCLUDED ON GROUND OF RPT. 9.3 IN REJOINDER, THE LEARNED A.R. FOR THE ASSESSEE FOR THE ASSESSEE SUBMITTED T HAT THE LEARNED D.RS PLEA FOR EXCLUSION OF TATA SERVICES LTD. FROM THE LIST OF COMPARABLES IS NOT MAINTAINABLE AND IS TO BE REJECTED, AS IT HAS BEEN INCLUDED AS A COMPARABLE BY THE REVENUE AUTHORITIES THEMSELVES AND ITS INCLUSION THEREIN IS ACCEPTED BY 14 ITA NO. 7613/MUM/2012 M/S. EMERSON ELECTRIC COMPANY (INDIA) P. LTD. AS SESSEE. IT WAS ALSO POINTED OUT THAT AS PER THE NOTES TO ACCOUNTS AT S. NO. 15, RELATED PARTY TRANSACTIONS WITH AES WERE ZERO. 9.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. IT IS A MATTER OF RECORD THAT THIS COMPANY, GREENACRE WAS SELECTED AS A COMPARABLE TO ASSESSEE BY THE TPO. IT IS ALSO SEEN THAT BEFORE THE DRP ASSESSEE HAS OBJECTED TO THE INCLUSION OF THIS COMPANY IN THE LIST OF COMPARABLES. WE FIND THAT APART FROM RECORDING ASSESSEES OBJECTION TO THE INCLUSION OF GREENACRE AT PARA 4.2 OF ITS ORDER, THE DRP HAS NOT ADJUDICATED THE MATTER. AS SUBMITTED BY THE LEARNED A.R. FOR THE ASSESSEE, WE OBSERVE FROM A PERUSAL OF THE ANNUAL REPORT OF GREENACRE (PLACED AT PAGES 53 TO 59 OF PAPER BOOK) THAT IN THE NOTES TO ACCOUNTS AT PAGE 58, ON DISCLOSURE IN REPORT OF RPT THAT REVENUES ON ACCOUNT OF LEASE RENTALS AND MAINTENANCE INCOME WAS APPROX. ` 2.10 CRORES OUT OF THE TOTAL TURNOVER OF APPROX. ` 2.90 CRORES. IN THIS FACTUAL MATRIX IT WOULD APPEAR PRIMA FACIE THAT GREENACRE WOULD FAIL THE APPLICATION OF THE TURNOVER FILTER @25%. WE, HOWEVER, OBSERVE FROM THE ORDERS OF THE AUTHORITIES BELOW THAT THE RPT FILTER ASPECT OF THE COMPARABILITY OF GREENACRE HAS NOT BEEN CONSIDERED OR EXAMINED BY BOTH TPO AND DRP. IN THAT VIEW OF THE MATTER, WE ARE OF THE OPINION AND HOLD THAT THE ISSUE OF THE COMPARABILITY OF GREENACRE WITH RESPECT TO THE APPLICATION OF THE RPT FILTER @25% RE QUIRES TO BE REMANDED TO THE FILE OF THE TPO FOR DE NOVO CONSIDERATION AND ADJUDICATION THEREON, AFTER AFFORDING ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD AND TO FILE DETAILS/SUBMISSIONS REQUIRED IN THIS REGARD, WHICH SHALL BE DULY CONSIDERED BY THE TPO . IT IS ORDERED ACCORDINGLY. 9.5 THE LEARNED D.RS PLEA FOR EXCLUSION OF TATA SERVICES LTD. FROM THE LIST OF COMPARABLES IS NOT MAINTAINABLE, AS IT IS REVENUES CHOICE 15 ITA NO. 7613/MUM/2012 M/S. EMERSON ELECTRIC COMPANY (INDIA) P. LTD. OF COMPARABLE AND NO GRIEVANCE IN THIS REGARD HAS BEEN RAISED BEFORE US BY WAY OF AN APP EAL. 9.6 CON SEQUENTLY GROUNDS AT S. NOS 2.3 AND 2.4 ARE ALLOWED FOR STATISTICAL PURPOSES. 10 . GROUNDS NO. 3 TO 5: DISALLOWANCE OF FOREIGN TRAVEL EXPENSES 10.1.1 IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT OUT OF TRAVEL AND CONVEYANCE EXPENDIT URE CLAIMED AMOUNTING TO ` 3,27,27,237/ - , FOREIGN TRAVEL EXPENDITURE INCURRED FOR SHRI M.M. LOHIA AND OTHER OFFICIALS OF THE COMPANY AMOUNTED TO ` 1,28,57,745/ - . ON BEING REQUIRED TO FURNISH DETAILS LIKE TRAVEL PERIOD, PLACE OF VISIT, AMOUNT SPENT AND JUSTIF ICATION THAT VISIT WAS FOR BUSINESS PURPOSE, THE AO OBSERVED THAT THESE DETAILS WERE FURNISHED BY ASSESSEE BY WAY OF A CHART, BUT NOTED THAT ASSESSEE EXPECT FOR STATING THAT THE TRAVEL WAS FOR BUSINESS PURPOSES, HAD FURNISHED NO EVIDENCE TO ESTABLISH THAT THESE EXPENSES WERE INCURRED WHOLLY AND EXCLUSIVELY FOR BUSINESS PURPOSES. IN THAT VIEW OF THE MATTER, THE AO DISALLOWED THE ENTIRE EXPENDITURE CLAIMED. 10.1.2 BEFORE THE DRP, ASSESSEE SUBMITTED THAT THE FOREIGN TRAVEL EXPENSES INCURRED WERE WHOLLY AND EXC LUSIVELY FOR PROMOTING ASSESSEES BUSINESS AND THE COMPANYS EXPORT REVENUES HAD INCREASED BY 30.79% IN THE SAID PERIOD. IT WAS ALSO SUBMITTED THAT THE COMPANYS OFFICIALS TRAVELLED ALONE ON THEIR FOREIGN BUSINESS VISITS AND WERE NOT ACCOMPANIED BY THEIR F AMILY MEMBERS. IT WAS ALSO SUBMITTED THAT THE FOREIGN TRAVEL EXPENDITURE INCURRED WAS ` 60,47,745/ - AND NOT ` 1,28,57,745/ - AS SUBMITTED IN THE DETAILS. THE DRP, WHILST NOTING THAT FOR THE TYPE AND MAGNITUDE OF BUSINESS ASSESSEE IS ENGAGED IN, FOREIGN TRAVEL WOULD BE REQUIRED TO FURTHER ITS BUSINESS PROSPECTS, WENT ON TO UPHOLD THE DISALLOWANCE OF FOREIGN 16 ITA NO. 7613/MUM/2012 M/S. EMERSON ELECTRIC COMPANY (INDIA) P. LTD. TRAVEL EXPENDITURE INCURRED TO THE EXTENT OF 50% ON GROUNDS THAT ASSESSEE HAS NOT BEEN TO ESTABLISH THAT THE EXPENSES INCURRED WERE WHOLLY AND EXCLUSIVELY F OR BUSINESS PURPOSES. THE DRP ALSO DIRECTED THE AO TO ASCERTAIN WHETHER THE FOREIGN TRAVEL EXPENSES INCURRED WERE ACTUALLY ` 60,47,745/ - AS SUBMITTED BEFORE THE DRP OR WHETHER IT WAS ` 128,57,745/ - AS SUBMITTED BEFORE THE AO. 10.2 BEFORE US, THE LEARNED A.R. FOR THE ASSESSEE REITERATED THE SUBMISSIONS PUT FORTH BEFORE THE DRP. IT WAS SUBMITTED THAT THE FOREIGN TRAVEL EXPENDITURE INCURRED ON THE FOREIGN TOURS OF ITS EMPLOYEES WAS WHOLLY AND EXCLUSIVELY FOR BUSINESS PURPOSES OF ASSESSEE COMPANY WHICH HAD RESULT ED IN EXPORT REVENUES INCREASING BY 30.79%. IT WAS ALSO SUBMITTED THAT ON THESE FOREIGN TOURS, THE COMPANYS OFFICIALS WERE NOT ACCOMPANIED BY THEIR FAMILY MEMBERS. IN VIEW OF THE ABOVE IT WAS PRAYED THAT THE DISALLOWANCE UPHELD BY THE LEARNED DRP @50% THE REOF BE DELETED. THE LEARNED A.R. FOR THE ASSESSEE FURTHER ADDED THAT THE AO BE DIRECTED TO FOLLOW THE DRP DIRECTIONS AND ADOPT THE FIGURE OF ` 60,47,745/ - AS THE FOREIGN TRAVEL EXPENDITURE INCURRED AND NOT ` 1,28,57,745/ - AS SUBMITTED BY ASSESSEE AND ADOPTE D BY AO. 10.3 PER CONTRA, THE LEARNED D.R. SUPPORTED THE FINDINGS OF THE AUTHORITIES BELOW IN CONFIRMING THE DISALLOWANCE ON ACCOUNT OF FOREIGN TRAVEL EXPENDITURE FOR LACK OF EVIDENCE AND FAILURE TO ESTABLISH THAT THE SAID EXPENDITURE WAS INCURRED FOR BUSI NESS PURPOSES OF ASSESSEE COMPANY. 10.4.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. IT IS SEEN THAT IN ASSESSMENT PROCEEDINGS THE AO, ON EXAMINATION OF THE DETAILS OF TRAVEL AND CONVEYANCE, REQUIRED TH E ASSESSEE TO FURNISH DETAILS OF FOREIGN TRAVEL 17 ITA NO. 7613/MUM/2012 M/S. EMERSON ELECTRIC COMPANY (INDIA) P. LTD. EXPENDITURE INCURRED BY THE ASSESSEE COMPANY SUCH AS, NAME OF OFFICIALS WHO TRAVELLED, TRAVEL PERIOD, PLACE OF VISIT, AMOUNT SPENT AND JUSTIFICATION THAT THE FOREIGN VISIT/TOUR WAS FOR BUSINESS PURPOSES. IN R ESPONSE THERETO, WE FIND THAT ASSESSEE HAS VIDE LETTER DATED 22.11.2011 AT ANNEXURE - 33 THERETO FILED A CHART (COPY PLACED AT PAGE 86 OF THE PAPER BOOK) GIVING THE NAME AND DESIGNATION OF OFFICIALS TRAVELLING, TRAVEL PERIOD, PLACE OF VISIT, EXPENDITURE INCU RRED AND THE PURPOSE OF VISIT IS SIMPLY STATED AS BUSINESS. WE FIND THAT AS PER THE CHART THE TOTAL OF THE SAID EXPENDITURE AS FURNISHED BY ASSESSEE IS ` 1,28,57,745/ - . OTHER DETAILS IN SUPPORT OF THE CLAIM APPEAR TO HAVE BEEN FILED VIDE LETTER DATED 06.1 2.2011. BEFORE THE DRP ALSO ASSESSEE, VIDE LETTER DATED 12.07.2012 INITIALLY SUBMITTED THAT THE SAID FOREIGN TRAVEL EXPENDITURE INCURRED WAS ` 1,28,57,745/ - . IT IS ONLY THEREAFTER THAT A CLAIM WAS MADE THAT THE FOREIGN TRAVEL EXPENDITURE WAS ACTUALLY ` 60.47 ,745/ - AND NOT ` /1,28,57,745/ - AS SUBMITTED DUE TO A TYPOGRAPHICAL ERROR. HOW SUCH AN ERROR AROSE, IF AT ALL, HAS NOT BEEN EXAMINED BY THE DRP. FROM A PERUSAL OF THE CHART FILED BY ASSESSEE BEFORE THE AO, I.E. AT ANNEXURE 33 TO THE ASSESSEES LETTER DATED 22.11.2011 (PLACED AT PAGE 86 OF THE PAPER BOOK), WE ARE NOT ABLE TO COMPREHEND THE TYPOGRAPHICAL ERROR CLAIMED. THE DIFFERENCE INDICATED OF ` 68,10,000/ - (I.E. ` 1,28,57,745/ - LESS ` 60,47,475/ - ) DOES NOT SEEM TO ARISE OR EMANATE FROM THE SAID CHART AS THE DETAILS SUBMITTED THEREIN ARE ALL IN RESPECT OF VARIOUS OFFICIALS GOING ON FOREIGN TOURS, WITH THE PLACES OF VISIT, PERIOD OF TRAVEL AND THE AMOUNTS INCURRED IN THIS REGARD. 10.4.2 WHILE WE HAVE NO QUARREL WITH THE OBSERVATIONS OF THE DRP THAT FOR A BUSINESS LIKE ASSESSEES IT WOULD NOT BE REASONABLE TO CONCLUDE THAT FOREIGN VISITS BY THE COMPANYS OFFICIALS FOR BUSINESS PURPOSES WOULD NOT BE REQUIRED TO BE UNDERTAKEN. WE FIND THAT THE AUTHORITIES BELOW HAVE NOT EXAMINED THE EVIDENCES/DETAILS OF THE PURPOSES FOR 18 ITA NO. 7613/MUM/2012 M/S. EMERSON ELECTRIC COMPANY (INDIA) P. LTD. WHICH THE FOREIGN TRAVEL EXPENDITURE WAS CLAIMED. WE ALSO FIND ASSESSEES CLAIM THAT THE FOREIGN TRAVEL EXPENDITURE INCURRED WAS ACTUALLY ` 60,47,475/ - AND NOT ` 1,28,57, 745/ - AS ORIGINALLY CLAIMED BY IT ON ACCOUNT OF A TYPOGRAPHICAL ERROR HAS NOT BEEN EXAMINED BY THE DRP WHILE CONFIRMING THE DISALLOWANCE OF 50% OF EXPENDITURE AND ALSO BY THE AO IN THE IMPUGNED FINAL ORDER OF ASSESSMENT PASSED PURSUANT TO THE DRPS DIRECTI ONS. IN THIS FACTUAL MATRIX OF THE CASE, WE, IN THE INTEREST OF EQUITY AND JUSTICE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THE MATTER OF FOREIGN TRAVEL EXPENSES CLAIMED BY ASSESSEE TO THE FILE OF THE AO FOR DE NOVO EXAMINATION OF ASSESSEE S CLAIM THAT THE SAID EXPENSES HAVE BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF ASSESSEES BUSINESS AND ALSO WITH REFERENCE TO THE FRESH CLAIM OF ASSESSEE BEFORE THE DRP THAT THE FOREIGN TRAVEL EXPENSES ARE ` 60,47,745/ - AND NOT ` 1,28,57,745/ - AS PER DETAILS ORIGINALLY SUBMITTED BY ASSESSEE BEFORE THE AO. NEEDLESS TO ADD THAT ASSESSEE BE GIVEN ADEQUATE OPPORTUNITY OF BEING HEARD AND TO FILE DETAILS/SUBMISSIONS REQUIRED WHICH SHALL BE DULY CONSIDERED BY THE AO BEFORE DECIDING THE MATTER. CONSEQU ENTLY, GROUNDS AT S. NO. 3 AND 4 ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 11 . IN THE RESULT, ASSESSEES APPEAL FOR A.Y. 2008 - 09 IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH DECEMBER , 2015. 18.12.2015 SD/ - SD/ - ( AMIT SHUKLA ) ( JASON P. BOAZ ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI , DATED 18 TH DECEMBER , 2015 19 ITA NO. 7613/MUM/2012 M/S. EMERSON ELECTRIC COMPANY (INDIA) P. LTD. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. DRP - 1 4. / THE CIT /DIT CONCERNED 5. , , / DR, K BENCH ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER //TRUE COPY// /ASSTT. REGISTRAR) , /ITAT, MUMBAI N.P.