DCIT, Bangalore V. M/s GE Medical Systems (I) Pvt. Ltd., Bangalore

ITA 770/BANG/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60809 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 06-06-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 10-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K AMBASTHA CIT DR I
• Assessee Lawyers: P J PARDIWALA SR
• Keywords: Business income; Depreciation; Revenue expenditure
• Section: 80HHC; 32

Judgement Text

PAGE 1 OF 19 ITA NOS.767, 769 & 770/BANG/2 010 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A BEFORE SHRI GEORGE GEORGE K, J.M AND SHRI JASON P BOAZ, ACCOUNTANT MEMBER ITA NO. ASST. YEAR APPELLANT RESPONDENT 767/BANG/2010 2000-01 M/S GE MEDICAL SYSTEMS (I) (P) LTD., 122 (PART-1) EPIP, WHITE FIELD ROAD, BANGALORE-66. PA NO.AAACG 7655 G THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE- 1(1), PUNE. 769/BANG/2010 2000-01 THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE- 11(3), BANGALORE. M/S GE MEDICAL SYSTEMS (I) (P) LTD., 122 (PART-1) EPIP, WHITE FIELD ROAD, BANGALORE-66. PA NO.AAACG 7655 G 770/BANG/2010 2002-03 THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE- 11(3), BANGALORE. M/S GE MEDICAL SYSTEMS (I) (P) LTD., 122 (PART-1) EPIP, WHITE FIELD ROAD, BANGALORE-66. PA NO.AAACG 7655 G DATE OF HEARING : 06.06.2012 DATE OF PRONOUNCEMENT : 13.07.2012 ASSESSEE BY : SHRI P J PARDIWALA, SR. COUNSEL REVENUE BY : SHRI S K AMBASTHA, CIT (DR-I) , ITAT OR DER PER GEORGE GEORGE K : THESE THREE APPEALS INSTITUTED (I) ONE BY THE ASSESSEE COMPANY; AND (II) ANOTHER TWO APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE CONSOLIDATED ORDER OF THE CIT(A)-I, BANGALORE D ATED 18.2.2010. THE RELEVANT ASSESSMENT YEARS ARE 2000-01 AND 2002.03. PAGE 2 OF 19 ITA NOS.767, 769 & 770/BANG/2 010 2 I. ITA NO.767/10 AY 2000-01 BY THE ASSESSEE: 2. THE ASSESSEE COMPANY HAD RAISED A SOLITARY GROUN D IN AN ELABORATE AND NARRATIVE MANNER WHICH HAS BEEN, FOR THE SAKE OF CLARITY, IS REFORMULATED AS UNDER: THAT THE CIT (A) ERRED IN CONFORMING (I) IN REDUCIN G 100% OF THE INCOME FROM SERVICES RENDERED OF RS.3,40,44,255/-; AND (II) GAIN ON EXCHANGE FLUCTU ATIONS OF RS.99,97,852/- WHILE COMPUTING PROFIT OF BUSINES S FOR THE PURPOSES OF S. 80HHC AND TREATING THE SAME AS INCOME FROM OTHER SOURCES. II. ITA NO.769/10 AY 2000-01 BY THE REVENUE: 3. FOR THIS ASSESSMENT YEAR, THE REVENUE HAD RAISE D SIX GROUNDS. G ROUND NOS.1, 5 & 6 ARE GENERAL IN NATURE AND NO SPECIFIC ADJUDICATION IS CALLED FOR; HENCE, THEY ARE DISMISSED. IN THE REMAI NING GROUNDS, THE ISSUES RAISED ARE AS UNDER: (I) THAT THE CIT (A) HAD ERRED IN DELETING THE ADDITION OF RS.34,38,502/- BEING PROVISION FOR WARRANTY WITHOUT EXAMINING THE DETAILS, THE BASIS OF WHICH, THE PROV ISION WAS MADE; (II) THAT THE CIT (A) ERRED IN DELETING THE ADDITIONS OF RS.7,41,13,368/- AND RS.3,38,80,000/- BEING VRS 199 8 AND VRS 2000 RESPECTIVELY WITHOUT APPRECIATING THE FACTS AS DETAILED IN THE ASSESSMENT ORDER; & (III) THAT THE CIT (A) ERRED IN HOLDING THAT THE CLAIM OF DEPRECIATION OF RS.8,09,578/- ON PLANT AND MACHINER Y WAS JUSTIFIED. PAGE 3 OF 19 ITA NOS.767, 769 & 770/BANG/2 010 3 III . ITA NO.770/10 AY 2002-03 BY THE REVENUE: 4. FOR THIS ASSESSMENT YEAR, THE ISSUES RAISED AR E TWO FOLD, THEY ARE AS UNDER: (I) THAT THE CIT (A) ERRED IN DELETING THE ADDITIO N OF RS.6,68,08,261/- BEING VRS WITHOUT APPRECIATING THE FACTS AS DETAILED IN THE ASSESSMENT ORDER; & (II) THAT THE CIT (A) ERRED IN HOLDING THAT THE CL AIM OF DEPRECIATION OF RS.4,55,388/- ON PLANT AND MACHINER Y WAS JUSTIFIED. 5. AS THE ISSUES RAISED IN THESE APPEALS PERTAIN TO THE SAME ASSESSEE, FOR THE SAKE OF CONVENIENCE, THEY WERE HEA RD TOGETHER AND DISPOSED OFF IN THIS CONSOLIDATED ORDER. I. ITA NO.767/10 AY 2000-01 BY THE ASSESSEE: 6. THE FACTS, IN BRIEF, ARE AS FOLLOWS: THE ASSESSEE COMPANY [THE ASSESSEE IN SHORT] HA S BEEN IN THE BUSINESS OF MANUFACTURE AND MARKETING OF X-RAY MEDIC AL EQUIPMENTS AND OTHER ALLIED ACTIVITIES. THE RETURN OF INCOME, DEC LARING RE.NIL INCOME AND BOOK PROFIT OF RS.94.85 LAKHS WAS INITIALLY PROCESS ED U/S 143(1) OF THE ACT. SUBSEQUENTLY, THE ASSESSMENT IN QUESTION WAS CONCLUD ED, AFTER, DETERMINING ITS INCOME AT RS.6.05 CRORES WHEREBY MAKING SEVERAL ADDITIONS AS DETAILED IN THE IMPUGNED ASSESSMENT ORDER. 6.1 AGGRIEVED, THE ASSESSEE TOOK UP VARIOUS ISSUE S BEFORE THE LEARNED CIT (A) FOR RELIEF. AFTER ANALYZING THE CON TENTIONS PUT-FORTH BY THE PAGE 4 OF 19 ITA NOS.767, 769 & 770/BANG/2 010 4 ASSESSEE AS RECORDED IN HIS IMPUGNED ORDER, THE LEA RNED CIT (A) HAD, AMONG OTHERS, OBSERVED ON THE FOLLOWING ISSUES THUS: 9.1. THE SECOND LIMB OF THIS GROUND OBJECTS TO RED UCTION OF ENTIRE FLUCTUATION GAIN AND 90% OF SERVICE RENDE RED FROM THE BUSINESS PROFITS SHOWN BY THE APPELLANT FOR THE PURPOSE OF CALCULATING DEDUCTION U/S 80HHC OF ITAT. THE AO CONSIDERED SUCH INCOME AS INCOME FROM OTHER SOURCES AND NOT DERIVED FROM EXPORT BUSINESS AND, THEREFORE, REDUCED THE SAME FROM BUSINESS PROFITS. THE A R ON THE OTHER HAND PLEADS THAT BOTH THESE ITEMS ARE RELATED TO SALES OF THE APPELLANT AND, THEREFORE, S HOULD HAVE FORMED PART OF BUSINESS PROFITS. 9.2. THE ABOVE WAS CONSIDERED. PROFITS OF THE BU SINESS U/S 8-HHC HAS TO BE COMPULSORILY DERIVED FROM EXPORT S OF GOODS AND MERCHANDISE. IN OTHER WORDS, THE NEXU S SHOULD BE DIRECT AND NOT REMOTE. THE INCOME FROM SERVICES RENDERED AND FOREX (SIC) FOREIGN FLUCTUATI ON IS NO DOUBT RELATED (ATTRIBUTABLE) TO EXPORT BUSINESS BUT HAVE NO DIRECT NEXUS WITH EXPORT OF GOODS. FLUCTUA TION GAIN IS DEPENDENT UPON THE INTERNATIONAL MARKET CON DITION AND SERVICE RENDERED HAS VERY REMOTE CONNECTION WITH EXPORT BUSINESS. THEREFORE, I HOLD THE AO IS JUSTI FIED IN REDUCING SUCH AMOUNTS FROM BUSINESS PROFITS FOR DETERMINING THE DEDUCTION U/S 80HHC OF I.T. ACT. 6.2 AGGRIEVED, THE ASSESSEE HAS COME UP WITH THE PRESENT APPEAL. DURING THE COURSE OF HEARING, THE SUBMISSIONS MADE BY THE LEARNED AR ARE SUMMARIZED AS UNDER: (I) THAT WHILE CALCULATING TOTAL PROFIT OF THE ASSE SSEE, THE AO HAD CONSIDERED THE ENTIRE AMOUNT OF INCOME FROM SERVICES RENDERED TO BE REDUCED FROM THE PROFITS F OR THE PURPOSES OF COMPUTING DEDUCTION U/S 80HHC THOUG H PAGE 5 OF 19 ITA NOS.767, 769 & 770/BANG/2 010 5 THIS WAS NOT COVERED BY THE EXPLANATION TO THE SAID SECTION; (II) THAT THE AO HAD ALSO REDUCED THE ENTIRE GAIN ON EXCHANGE FLUCTUATION THOUGH THIS WAS NOT COVERED B Y EXPLANATION TO S.80HHC; - THAT EXPLANATION (BA) TO S. 80HHC CANNOT BE SAID TO PROVIDE AN EXHAUSTIVE DEFINITION OF THE TERM TOTAL TURNOVER SINCE IT ONLY LIMITS THE DEFINITION OF TU RNOVER, AS GENERALLY UNDERSTOOD, BY SPECIFYING THAT IT SHALL NOT INCLUDE FREIGHT, INSURANCE ATTRIBUTABLE TO THE TRA NSPORT OF GOODS BEYOND THE CUSTOMS STATION, THAT THE LEGISLATURE USES THE WORD MEANS WHEN THE INTENTIO N IS TO EXHAUST THE SIGNIFICANCE OF THE TERM DEFINED AND US ES THE WORD INCLUDES WHEN THE INTENTION IS TO WIDEN THE SCOPE BY SPECIFIC ENUMERATION IN ADDITION TO THE ORD INARY MEANING; THAT IN THE ABSENCE OF AN EXHAUSTIVE DEFIN ITION, THE TERM TURNOVER MUST BE UNDERSTOOD IN THE CONTE XT IN WHICH HAS BEEN USED BY THE LEGISLATURE. THE PROVISI ONS OF S.80HHC BEING BENEFICIAL PROVISIONS, ENACTED TO PROMOTE EXPORTS OF GOODS OR MERCHANDISE OUT OF INDI A, THEY HAVE TO BE INTERPRETED TO ADVANCE THE OBJECTIVE ; RELIES ON THE CASE OF BAJAJ TEMPO LIMITED V. CIT (1 992) 196 ITR 188 (SC) - THAT THE TURNOVER SHOULD BE RESTRICTED TO SUCH RE CEIPTS ONLY WHICH HAVE ELEMENT OF PROFIT IN IT; THAT IT WAS THE ONLY ACTUAL SALE PRICE WHICH WAS RELEVANT AND, THERE FORE, ANYTHING CHARGED BY THE ASSESSEE BY WAY OF STATUTORY LEVIES COLLECTED BY THE ASSESSEE HAVE NO ELEMENT OF PROFIT; - THAT ACCORDING TO THE ACCOUNTING PRINCIPLES ALSO, IT DOES NOT FORM PART OF TRADING AND PROFIT AND LOSS ACCOUN T, IN AS MUCH S THESE LEVIES WERE CHARGED SEPARATELY IN ADDIT ION TO THE PRICE AND THE SAME WERE CREDITED TO THEIR PAGE 6 OF 19 ITA NOS.767, 769 & 770/BANG/2 010 6 RESPECTIVE ACCOUNTS; THAT SUCH AMOUNT WHENEVER PAID TO THE GOVERNMENT WERE DEBITED TO SUCH ACCOUNT AND THE BALANCE WAS SHOWN IN THE BALANCE SHEET AS LIABILITY. THEREFORE, IT WAS ARGUED THAT, THESE STATUTORY LEVIE S HAVE NO EFFECT ON THE DETERMINATION OF PROFIT OF TH E BUSINESS. IT WAS FOR THIS REASON, IT WAS ARGUED TH AT THE WORD TURNOVER COULD NOT INCLUDE ELEMENT OF EXCISE AND SALES TAX; THAT SUCH INTERPRETATION WOULD ADVANCE THE OBJECT TO BE ACHIEVED BY THE LEGISLATURE. IF CONSTR UED OTHERWISE AS CONTENDED BY THE REVENUE, IT WAS SUBMIT TED THAT IT WOULD DEFEAT THE OBJECT TO BE ACHIEVED AS I T WOULD REDUCE THE REAL PROFITS EARNED BY THE ASSESSEE ON EXPORTS OUTSIDE INDIA; (III) THAT A READING OF CLAUSE OF (B) AND (BA) OF T HE EXPLANATION TO S.80HHC OF THE ACT CLEARLY INDICATES THAT THE LEGISLATURE HAS BROUGHT ON PART THE COMPONENTS OF EXPORT TURNOVER AND SALE TURNOVER; THAT BOTH NUMERA TOR AND DENOMINATOR SHOW THAT THEY REFER TO SALE PROCEED S; THAT ANY RECEIPT WHICH DOES NOT FORM PART OF SALE PROCEEDS CANNOT COME WITHIN THE AMBIT OF THE ABOVE RATIO. THIS WAS ALSO IN VIEW OF THE FACT THAT PROP ORTION APPLIES TO BUSINESS PROFITS IN ORDER TO WORK OUT TH E EXPORT PROFITS. THEREFORE, THE NUMERATOR AN THE DENOMINATOR WERE REQUIRED TO HAVE A COMMON ELEMENT WHICH WAS THE SALE PROCEEDS; - WHILE CALCULATING PROFITS OF THE BUSINESS, ENTIRE AMOUNT OF INCOME FROM SERVICES RENDERED AND GAIN ON EXCHA NGE FLUCTUATION THOUGH THESE ITEMS WERE NOT SQUARELY COVERED BY EXPLANATION (BAA) TO S.80HHC; & - WITHOUT PREJUDICE TO THE ABOVE, INSTEAD OF CONSID ERING 90% OF INCOME FROM SERVICES RENDERED AND GAIN ON EXCHANGE FLUCTUATION 100% AMOUNT HAS BEEN CONSIDER ED WHILE OUT TOTAL PROFITS OF THE BUSINESS FOR WORKING OUT THE DEDUCTION U/S 80HHC OF THE ACT. PAGE 7 OF 19 ITA NOS.767, 769 & 770/BANG/2 010 7 RELIES ON THE FOLLOWING CASE LAWS: (A) CIT V. SUDARSHAN CHEMICAL INDUSTRIES LTD 245 ITR 769 (BOM); & (B) CIT V. KANTILAL CHHOTALAL 246 ITR 439 (BOM). 6.3 IN CONCLUSION, IT WAS SUBMITTED THAT THE CIT (A) HA D FAILED TO APPRECIATE THAT THESE ITEMS WERE NOT COVERED BY E XPLANATION (BAA) TO S. 80HHC AND THAT THERE WAS NO OTHER PROVISION IN S.80 HHC TO REDUCE SUCH INCOME FROM PROFITS OF THE BUSINESS AND ALSO ERRED IN STATING THAT INCOME FROM SERVICES AND GAINS ON EXCHANGE FLUCTUATIONS DO ES NOT HAVE A DIRECT NEXUS WITH EXPORT OF GOODS. THE CIT(A) OUGHT TO HAV E APPRECIATED THAT INCOME FROM SERVICES AND GAINS ON EXCHANGE FLUCTUA TIONS WERE IN THE NATURE OF BUSINESS INCOME OF THE ASSESSEE AND, HENCE, ELIG IBLE WHILE COMPUTING THE AMOUNT OF DEDUCTION U/S 80HHC OF THE ACT. 6.4 ON THE OTHER HAND, THE LEARNED D R HAD FULLY S UPPORTED THE STAND OF THE AUTHORITIES BELOW ON THE ISSUE. 6.5 WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE MATERIALS ON RECORD. AT THE OUTSET, WE WOULD LIKE TO HIGHLIGHT THAT THE ASSESSEE HAD OBJECTED TO THE REDUCTION OF ENTIRE FLUCTUATION GAIN AND 90% OF SERVICE RENDERED FROM THE BUSINESS PROFI TS SHOWN BY THE ASSESSEE FOR THE PURPOSE OF CALCULATION OF DEDUCTIO N U/S 80HHC OF THE ACT. AS FAR AS THE ISSUE OF GAIN ON EXCHANGE FLUCTUATION OF RS.99,97,852/- IS CONCERNED, WE WOULD LIKE TO REITERATE THAT TRIBUNAL IN THE CASE OF SUJATA GROVER (2002) 74 TTJ 347 (DEL.) AND IN THE CASE OF PRIYANKA GEMS (2005) 3 SOT 817 HAVE HELD THAT GAINS DUE TO FLUCTUATION IN THE FOREIGN EXCHANGE RATE EMANATING FROM EXPORT IS ITS INTEGRAL PART AND CANNOT BE DIFFERENTIATED PAGE 8 OF 19 ITA NOS.767, 769 & 770/BANG/2 010 8 FROM THE EXPORT PROCEEDS AND IT IS THE PART OF PROF ITS OF BUSINESS. IN THE ABOVE CASES CONSIDERED BY THE TRIBUNAL, THE ASSESSEE INCLUDED THE EXCHANGE FLUCTUATION IN THE EXPORT TURNOVER FOR THE PURPOSE OF CLAIMING DEDUCTION UNDER SECTION 80HHC. THE REVENUE AUTHORITIES HELD T HAT 90% OF THIS AMOUNT WAS LIABLE TO BE DEDUCTED FROM THE PROFITS OF BUSIN ESS IN TERMS OF EXPLANATION (BAA) BELOW SECTION 80HHC(4C), AS IT WA S IN THE NATURE OF INCOME FROM OTHER SOURCES. THE TRIBUNAL IN THE A BOVE MENTIONED CASES DID NOT ACCEPT THE VIEW POINT OF THE DEPARTMENT AND HEL D THAT THE FOREIGN EXCHANGE DIFFERENCE IS PART OF THE EXPORT TURNOVER . IN THE LIGHT OF THE TRIBUNALS ORDER IN THE CASES OF SUJATA GROVER & PR IYANKA GEMS (SUPRA), IT IS CLEAR THAT THE FOREIGN EXCHANGE FLUCTUATION/GAINS A ROSE ONLY FROM EXPORT INVOICE VALUE AND IS DIRECTLY RELATABLE TO EXPORT BU SINESS OF THE ASSESSEE AND THE SAME CANNOT BE EXCLUDED FROM THE EXPORT TURNOVE R. THEREFORE, WE HOLD THAT THE INCOME-TAX AUTHORITIES HAVE ERRED IN REDUC ING 90% OF GAINS ON ACCOUNT OF EXCHANGE FLUCTUATION FROM PROFITS OF BUS INESS. IT IS ORDERED ACCORDINGLY. 6.5.1 HOWEVER, WITH REGARD TO THE AOS ACTION AND SUBSEQUENT CONFIRMATION OF THE LEARNED CIT (A) IN REDUCING 100 % OF INCOME FROM THE SERVICES RENDERED, WE ARE OF THE FIRM VIEW, THERE IS NO DISCUSSION BY THE ASSESSING OFFICER AND THE CIT(A) WITH REGARD TO THE NATURE OF TRANSACTION. THE AMOUNT OF RS.3,40,44,255/- CAPTIONED UNDER SER VICE RENDERED, WHETHER IT IS INTEGRALLY CONNECTED WITH EXPORT BUSINESS AND WHETHER 90% OF THE SAME SHOULD BE REDUCED FROM THE PROFIT OF BUSINESS, HAS NOT BEEN ELABORATELY DISCUSSED EITHER IN THE ORDERS OF THE ASSESSING OFF ICER OR OF THE CIT(A). THEREFORE, THE ISSUE REQUIRES THOROUGH EXAMINATION AT THE AOS LEVEL TO PAGE 9 OF 19 ITA NOS.767, 769 & 770/BANG/2 010 9 VERIFY AS TO WHETHER THIS CLAIM IS INTEGRALLY CONNECT ED WITH EXPORT BUSINESS AND ALSO AS TO WHETHER UNDER EXPLANATION (BAA), 90% OF SUCH PROFIT HAS TO BE REDUCED FROM THE BUSINESS INCOME FOR THE PURPOSES O F CALCULATION TO ARRIVE AT THE PROFIT OF THE BUSINESS IN ORDER TO CALCULATE DEDUCTION U/S 80HHC OF THE ACT. FOR THE ABOVE EXERCISE, THIS ISSUE IS REM ITTED BACK TO THE FILE OF THE AO FOR FRESH CONSIDERATION AND TO TAKE APPROPRI ATE ACTION, KEEPING IN VIEW THE EXPLANATION (BAA) TO S.80HHC OF THE ACT. IT IS ORDERED ACCORDINGLY. II. ITA NO.769/10 AY 2000-01 BY THE REVENUE: (1) ADDITION OF RS.34,38,502/- ON ACCOUNT OF PROVIS ION FOR WARRANTY: 7. INCIDENTALLY, SIMILAR ISSUE TO THAT OF THE ONE UNDER CONSIDERATION HAD CROPPED UP BEFORE THE HONBLE PUN E A BENCH IN THE ASSESSEES OWN CASE FOR THE AYS 1998-99 AND 1999-00 IN ITA NOS.1073 & 1074/PN/2003 DATED 22.6.2007. AFTER CONSIDERING T HE RIVAL SUBMISSIONS, REASONING OF THE AUTHORITIES BELOW AND FOLLOWING TH E FINDINGS OF THE EARLIER BENCH IN THE CASE OF AUTOMAG INDIA PVT. LTD IN ITA NO.1633/PN/2004 DATED 25.5.2007, THE HONBLE BENCH HAD OBSERVED THUS: 17. ..THE SUBMISSIONS OF BOTH THE SIDE S ARE VERY LIMITED AND CERTAIN QUESTIONS IN RESPECT OF METHODOLOGY ADOPTED FOR CLAIM OF THE WARRANTY REMAINE D UNANSWERED. IN SUCH CIRCUMSTANCES, MORE PARTICULAR LY IN THE ABSENCE OF PROPER DETAILS AND FACTS, WE DEEM IT PROPER TO RESTORE THIS ISSUE BACK TO THE STAGE OF A O BECAUSE, IN OUR OPINION, THE AO WAS EXPECTED TO ENQ UIRE CERTAIN BASIC FACTS AND SHOULD NOT HAVE DISALLOWED THE CLAIM SUMMARILY. THIS ISSUE HAS CROPPED UP BEFORE U S IN THE CASE OF AUTOMAG INDIA PRIVATE LIMITED, CONSTITU TING B BENCH, ITAT, PUNE IN ITA NO.1633/PN/2004 AY 199 9- PAGE 10 OF 19 ITA NOS.767, 769 & 770/BANG/ 2010 10 2000 ORDER DT. 25 TH MAY 2007 WHEREIN VIDE PARA 5, WE HAVE HELD AS UNDER: 5. AFTER HEARING THE SUBMISSIONS OF BOTH THE SIDES, WE HAVE NOTICED THAT THE ISSUE IS COVERED BY ITAT A BENCH, PUNE IN THE CASE OF DCIT V. KIRLOSKAR CUMMINS LTD, PUNE ITAST NO.255/PN/93 AY 1998-99, ORDER DT. 21 ST JUNE 2005 WHEREIN IT WAS OBSERVED BY THE RESPECTED BENCH THAT THE ESTIMATION SHOULD BE ON A REASONABLE BASIS AS WELL AS ON A SCIENTIFIC BASIS, SO THAT ON THE BASIS OF CERTAIN INFORMATION GATHERED IN DUE COURSE OF TIME, THE CLAIM CAN BE ASCERTAINED. WE HAVE ALSO OBSERVED THAT ON ONE HAND, THE LD CIT (A) HAS MENTIONED THAT THE APPELLANT DID NOT MAINTAIN ANY RECORD WHATSOEVER TO ENABLE HIM TO COME TO A CONCLUSION THAT PARTICULAR PERCENTAGE OF SALES COULD BE ESTIMATED LIABILITY TOWARDS THE EXPENDITURE ON PERFORMANCE GUARANTEE. THE OBSERVATION OF THE RESPECTED CO-ORDINATE BENCH FROM PARA 9.1. IS PRODUCED AS FOLLOWS: I) THE ALLOWABLE LIABILITY FOR A PARTICULAR YEAR SHOULD BE ONLY IN RELATION THE SALES MADE IN THAT YEAR AND SHOULD BE ESTIMATED ON A REASONABLE BASIS TAKING INTO CONSIDERATION THE RELEVANT FIGURES RELATING TO THE CLAIMS SETTLED IN EARLIER YEARS; II) IF OUT OF THE PROVISION MADE IN A PARTICULAR YEAR IN RESPECT OF THE SALES MADE IN THAT YEAR, ANY SURPLUS IS FOUND IN THE SUBSEQUENT YEAR(S) THEN THAT SURPLUS WOULD BE OFFERED FOR TAX. SIMILARLY, IF THERE IS A SHORTAGE, IT WILL BE ALLOWED; PAGE 11 OF 19 ITA NOS.767, 769 & 770/BANG/ 2010 11 III) THE SURPLUS OR SHORTAGE IN RELATION TO THE PROVISION MADE IN A PARTICULAR YEAR WILL HAVE TO BE WORKED OUT ONLY WITH REFERENCE TO THE SALES MADE IN THAT PARTICULAR YEAR AND THE ASSESSEE WILL HAVE TO PRODUCE THE RELEVANT RECORDS BEFORE THE AO FOR VERIFICATION. IN THE LIGHT OF THE ABOVE DISCUSSION, WE DEEM IT PR OPER TO REMIT THIS ISSUE BACK TO THE FILE OF AO WITH A DIRE CTION TO DETERMINE THE ACCRUED LIABILITY BASED UPON THE WARRA NTY AND THE GUIDELINES GIVEN ABOVE. THE AO IS ALSO REQ UIRED TO VERIFY THE METHOD AND THE BASIS OF THE ASSESSEE S INCE THE CLAIM IS MADE FOR THE FIRST TIME BY THE ASSESSEE . ON THE BASIS OF THE PAST RECORD AND THE HISTORY OF PERCENTAGE OF CLAIM OVER TOTAL TURNOVER, IN THE PAS T YEARS, THE AO IS EXPECTED TO ASCERTAIN THE LIABILITY AND SHOULD ALSO REMOVE THIS CONFUSION THAT WHETHER THE ASSESSEE HAS MAINTAINED PROPER RECORDS ON THE BASIS OF WHICH THE PROVISION FOR WARRANTY CAN BE ESTABLISHED. HE IS ALSO REQUIRED TO ASCERTAIN THE SCIENTIFIC METHOD AND THE PAST HISTORY OF THE ASSESSEE WHETHER ANY CLAIM HA S BEEN MADE THEREIN SO AS TO ARRIVE AT THE CORRECT PERCENTAGE OF THE CLAIM. WE ARE RESTORING THIS GRO UND BACK TO AO AS PER THE DIRECTIONS SUPRA, HENCE MAY BE TREATED AS ALLOWED ONLY FOR STATISTICAL PURPOSES. THE GUIDELINES HAVE BEEN ISSUED, SO NOW THE AO IS EXPECTED TO PROVIDE AN OPPORTUNITY OF HEARING TO THE APPELLAN T TO ENABLE HIM TO FURNISH THE BASIS ON WHICH THE COMPU TATION FOR PROVISION OF WARRANTY WAS MADE. WE MAY ALSO LIKE TO ADD THAT THE GENUINENESS AS WELL AS THE CORRECTNESS OF THE CLAIM CAN FURTHER BE JUSTIFIED BY PRODUCING NECESSARY EVIDE NCE OF THE CLAIM IN THE SUBSEQUENT YEARS. WITH THESE REMAR KS, THIS ISSUE DESERVES TO BE DECIDED DENO VO BY AO.. 7.1 IN CONFORMITY WITH THE OBSERVATIONS OF HONBLE PUNE BENCH OF THE ITAT IN THE ASSESSEES OWN CASE IN AN IDENTI CAL ISSUE, WE REMIT BACK PAGE 12 OF 19 ITA NOS.767, 769 & 770/BANG/ 2010 12 THE ISSUE TO THE FILE OF THE AO WITH A SPECIFIC DIR ECTION TO VERIFY THE DETAILS OF THE BASIS ON WHICH THE COMPUTATION FOR PROVISION OF WARRANTY AND TO TAKE APPROPRIATE ACTION IN ACCORDANCE WITH THE PROVISION S OF THE ACT. SUCH DETAILS SHALL, HOWEVER, BE PRODUCED BY THE ASSESSEE WITH NECESSARY EVIDENCE TO JUSTIFY THE GENUINENESS AND CORRECTNESS OF THE SA ID CLAIM. IT IS ORDERED ACCORDINGLY. HENCE, GROUND NO.2 OF REVENUES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. (2) ADDITION OF RS.7.41 CRORES AND RS.3.38 CRORES BEING VRS 1998 & VRS 2000: 7.2 AN IDENTICAL ISSUE TO THAT OF THE PRESENT ISSU E HAD ALSO COME UP BEFORE THE HONBLE PUNE BENCH IN THE ASSESS EES OWN CASE REFERRED SUPRA. AFTER DUE CONSIDERATION OF THE ISSUE RAISED BY THE ASSESSEE COMPREHENSIVELY, THE REASONS RECORDED BY THE AO IN D ENYING THE CLAIM AND ALSO EXTENSIVELY QUOTING (I) THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. BHOR INDUSTRIES REPORTED IN 264 ITR 180 (BOM); A ND (II) BOARDS CIRCULAR F.NO.200/79/2000-ITA-I DATED 23.1.2001 WITH REGARD TO THE ADMISSIBILITY OF EX-GRATIA AMOUNT OF VRS WHICH HAS BEEN HELD TO B E ULTRA VIRES BY THE HONBLE MADRAS HIGH COURT IN THE CASE OF MADURA COA TS V. DCIT (273 ITR 32-MAD), THE HONBLE PUNE BENCH HAD OBSERVED THUS: 5. IN THE LIGHT OF THE ABOVE DISCUSSION AND CONSID ERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE C ASE, WE HEREBY HOLD THAT IT WAS WRONG ON THE PART OF THE REVENUE AUTHORITIES TO TREAT THE VRS EXPENDITURE AS CAPITAL IN NATURE BY DRAWING SUPPORT FROM THE CASE O F M/S BHOR INDUSTRIES (SUPRA) AND OTHER SEVERAL REASO NS ASSIGNED HEREIN-ABOVE PARAS. PAGE 13 OF 19 ITA NOS.767, 769 & 770/BANG/ 2010 13 6. THERE ARE CERTAIN ANCILLARY QUESTIONS WHICH HAVE ALSO BEEN RAISED BY THE REVENUE AUTHORITIES, REQUIRES OUR ADJUDICATION, SUMMARIZED AS FOLLOWS: A) THE FACTS AND THE EVIDENCES PLACED ON RECORD HAV E CLEARLY INDICATED THAT THE DETERMINATION OF THE QUAN TUM OF THE VRS AMOUNT WAS NOT SOLELY ON THE BASIS OF THE SERVICES RENDERED BY THE EMPLOYEE TO THE ERSTWHILE M/ S. ELPRO INTERNATIONAL INDI. THE FACTS AND FIGURES HA VE ESTABLISHED THAT THE QUANTUM WAS DETERMINED IN RESP ECT OF THE PAST SERVICES AS WELL AS CONSIDERING THE FUT URE PERIOD OF EMPLOYMENT WITH THE ASSESSEE COMPANY FOR REFERENCE CLAUSE 3 OF THE SCHEME IS REPRODUCED BELO W: RETIREMENT BENEFITS: THE ELIGIBLE EMPLOYEE WHO DESIRES TO BE VOLUNTARILY RETIRED FROM THE SERVICES OF THE COMPANY WILL BE PAID AN EX-GRATIA NOT EXCEEDING (A) AN AMOUNT EQUAL TO 50 DAYS SALARY FOR EACH COMPLETED YEAR OF SERVICE AS ON THE DATE OF VOLUNTARY RETIREMENT; (B) AN AMOUNT EQUAL TO 45 DAYS SALARY FOR EACH REMAINING YEAR OF SERVICE WITH THE COMPANY FROM THE DATE OF VOLUNTARY RETIREMENT TILL THE NORMAL AGE OF RETIREMENT OF 60 YEARS. B) FURTHER, THERE WAS A MAXIMUM LIMIT OF RS.3,25,00 0/- TO BE PAID TO THE EACH EMPLOYEE UNDER VOLUNTARY RETIREMENT SCHEME, SO THE POSSIBILITY CANNOT BE RULE D OUT THAT THE AMOUNT SO SETTLED MIGHT HAVE PERTAINE D TO THE REMAINING YEARS OF SERVICE TILL RETIREMENT WITH THE ASSESSEE EMPLOYER. PAGE 14 OF 19 ITA NOS.767, 769 & 770/BANG/ 2010 14 C) IT IS INCORRECT ON THE PART OF THE REVENUE AUTHO RITIES TO DRAW AN ADVERSE INFERENCE THAT THE PAYMENT WAS ON ACCOUNT OF SPA DT. 26.5.97. THE CORRECT FACTUAL PO SITION IS THAT THERE WAS A EQUIPMENT SALE AND EMPLOYEES ABSORPTION AGREEMENT WHICH WAS DT. 20 TH DAY OF JUNE 1997 (SEE PAGE 5 TO 44 OF THE PAPER BOOK). THROUGH THIS AGREEMENT, IT WAS DECIDED TO ABSORB ALL THE EMPLOYEE S OF ERSTWHILE ELPRO INTERNATIONAL INDIA. CLAUSE 5 CAN BE REPRODUCED FOR REFERENCE AS FOLLOWS: . (D) ONCE THE ASSESSEE COMPANY WAS TAKING OVER THE ASSETS OF M/S. ELPRO HENCE THE ATTACHED LIABILITIES HAVE ALSO BEEN AGREED TO BE TAKEN OVER WHICH RESULTED IN TO ABSORPTION OF 184 EMPLOYEES OF THE SAID ERSTWHILE COMPANY. (E) AS THE SCHEME SUGGESTED, IT WAS A VOLUNTARY DECI SION OF THE EMPLOYEES AND THERE WAS NO COMPULSORY RETIREMENT OR RETRENCHMENT OF THE EMPLOYEES, THEREFORE, IT WAS INCORRECT ON THE PART OF THE AO T O MAKE AN OBSERVATION THAT THE ASSESSEE COMPANY, IN FA CT, WAS NOT IN NEED OF THOSE EMPLOYEES. THIS IS SIMPLY A CASE OF FLOATING AN OPTIONAL SCHEME ENTIRELY DEPENDENT UP ON THE DECISION OF THE EMPLOYEES. (F) THE REVENUE AUTHORITIES HAVE ALSO COMMENTED THA T IT WAS NOT IN THE COURSE OF BUSINESS, HOWEVER, WE RE U NABLE TO UNDERSTAND WHY IT WAS NOT IN THE COURSE OF BUSINE SS. WE MAY LIKE TO STRENGTHEN OUR OPINION BY CITING A DEC ISION OF CIT V. ASSAM OIL COMPANY, 154 ITR 647 WHEREIN EXPENDITURE OF RETRENCHMENT COMPENSATION WAS HELD A S ALLOWABLE AS REVENUE EXPENDITURE. THE HONBLE COUR T HAS REFERRED THAT SUCH EXPENDITURE WAS FOR THE PURPOSE OF RATIONALIZATION AND KEEPING IN MIND THE ECONOMY OF T HE COMPANY. TO FURTHER BUTTRESS OUR VIEW, WE MAY ALSO L IKE TO CITE A DECISION OF HONBLE MADRAS HIGH COURT IN THE PAGE 15 OF 19 ITA NOS.767, 769 & 770/BANG/ 2010 15 CASE OF CIT V. SIMPSON & CO., 230 ITR 794 WHEREIN I T WAS HELD THAT WHEN THE PAYMENT IS MADE FOR THE PURPOSE OF RETRENCHMENT OF WORKERS, IT WAS FOR THE PURPOSE OF REDUCING THE STAFF AND BRING ABOUT A REDUCTION IN W AGE BILL AS WELL. THE COURT HAS OPINED THAT SUCH DECIS IONS WERE MATTERS OF MANAGEMENT PERTAINING TO BUSINESS CONSIDERATIONS AND EXPEDIENCY. SO, THE EXPENDITURE INCURRED WAS FOR THE PURPOSE OF BUSINESS AND ALSO W ITH A VIEW TO MAINTAIN GOOD RELATIONSHIP WITH THE LABOURE R. SO, THE HONBLE COURT HAS CONCLUDED THAT SUCH AN EXPEND ITURE WAS NOTHING BUT HAVE BEEN LAID OUT WHOLLY AND EXCLUS IVELY FOR BUSINESS PURPOSES OF THE ASSESSEE AND THE AMOUN T PAID UNDER THE VOLUNTARY RETIREMENT SCHEME WAS DEDUCTIBLE. (G) THE LABOUR DISPUTE COULD ALSO BE THE REASON OF FLOATING THE SCHEME TO AVOID CONFRONTATION WITH THE LABOURERS. THE DISPUTE WAS ADMITTEDLY RESOLVED ON 19/1/98 AND IMMEDIATELY THEREAFTER IN FEBRUARY 98, TH E PAYMENT OF VRS AMOUNT WAS DISBURSED. SO THE DECISIO N OF FLOATING OF THIS SCHEME CAN BE SAID TO BE A DECI SION IN THE INTEREST OF THE BUSINESS SO AS TO GET RID OFF T HE ERRANT LABOURERS. IN THIS MANNER, WE HAVE DULY ADJUDICATED UPON THE DO UBTS RAISED BY THE REVENUE AUTHORITIES AND ON APPLICATION OF LAW AS WELL AS ON FACTS, CONCLUDED IN THE FOREGOING PARAS. GROUND NO.1 IS ALLOWED. 7.3 IN CONSONANCE WITH THE FINDINGS OF THE HONBLE PUNE BENCH IN THE ASSESSEES OWN CASE REFERRED SUPRA, WE HELD THAT THE CIT(A) IS JUSTIFIED IN DELETING THE ADDITION OF RS.7,41,13,36 8/- BEING VRS 1998 AND RS.3,33,80,000/- BEING VRS 2000. THEREFORE, THE G ROUND NO.3 RAISED IN REVENUES APPEAL (ITA NO.769/10 AY 2000-01) IS RE JECTED. PAGE 16 OF 19 ITA NOS.767, 769 & 770/BANG/ 2010 16 (3) CLAIM OF DEPRECIATION OF RS.8,09,578/- ON PLANT AND MACHINERY: 7.4 THE HONBLE PUNE BENCH IN ASSESSEES OWN CASE (SUPRA) HAD AN OCCASION TO DEAL WITH A SIMILAR SITUATION. AFTE R TAKING INTO ACCOUNT THE AUTHORITIES BELOW IN DENYING THE ASSESSEE S CLAIM, THE HONBLE BENCH, WEIGHING THE PROS AND CONS OF THE ISSUE AS RECORDED THEREIN, THE ISSUE WAS RESTORED TO THE FILE OF THE AO FOR DE NOVO CONSIDER ATION. THE RELEVANT PORTIONS OF FINDINGS, FOR APPRECIATION OF FACTS, AR E EXTRACTED AS UNDER: 9. NOW BEFORE US, LEARNED A R MR S.E. DASTUR HAS SPECIFICALLY MENTIONED THAT THE ISSUE IS RELATED TO THE PRINCIPLE OF ACCOUNTANCY WHICH HAS NOT BEEN PROPERTY UNDERSTOOD BY THE REVENUE AUTHORITIES. HE HAS NARRA TED THAT ON ONE HAND, THE ISSUE WAS TO MAKE PAYMENT TO T HE SAID ERSTWHILE COMPANY AND ON THE OTHER HAND, IN TER MS OF THE AGREEMENT HE HAS TO RECEIVE SOME PAYMENT FROM THE SAID ERSTWHILE COMPANY SO THE ACCOUNT WAS SETTLE D BY TRANSFERRING ONLY THE BALANCE AMOUNT PERTAINING TO T HE VALUE SETTLED FOR PLANT AND MACHINERY. DURING THE C OURSE OF HIS ARGUMENTS, WE WANTED FURTHER ELABORATION IN TERMS OF THE ACTUAL ACCOUNT ENTRIES MADE IN THE BOOKS OF ACCOUNTS. HOWEVER, ON HEARING THE SUBMISSIONS OF B OTH THE SIDES AND SINCE LD. D R HAS ALSO SUGGESTED THAT INSTEAD OF EXAMINING THOSE ACCOUNTS AT THIS STAGE O F APPEAL, THE MATTER REQUIRES RE-INVESTIGATION AS WEL L AS RECONSIDERATION AT THE STAGE OF AO, HENCE WE DEEM IT PROPER TO RESTORE IT BACK TO THE AO. WE WANT TO MA KE IT CLEAR THAT IF THE AMOUNT PERTAINS TO THE DIFFERENCE OF THE GRATUITY FUND TRANSFERRED TO THE BALANCE-SHEET A ND THE ASSESSEE WANTS TO CLAIM DEPRECIATION ON THIS AM OUNT, THEN DEFINITELY, IT IS OUT OF THE PURVIEW OF SECTION 32 OF I T ACT, SO NO DEPRECIATION DESERVES TO BE ALLOWED. THE ALTERNATE SUBMISSION IS THAT IT WAS THE DIFFERENCE PAGE 17 OF 19 ITA NOS.767, 769 & 770/BANG/ 2010 17 PERTAINING TO THE COST OF PLANT AND MACHINERY THEN I N THAT CASE, THE AO HAS TO SEE THE ALLEGED ANNEXURE TO EQUIPMENT PURCHASE AND EMPLOYEES ABSORPTION AGREEMEN T. DEFINITELY, THE AO HAS TO EXAMINE THE VALUE OF THE A SSET IN TERMS OF THE SAID AGREEMENT VIS--VIS THE VALUE OF THE PLANT AND MACHINERY SHOWN IN THE BOOKS OF ACCOUNTS F OR THE YEAR UNDER CONSIDERATION. THE AO HAS ALSO TO EXAMINE THE DETAILS OF THE TOTAL ADDITIONS MADE TO PLANT AND MACHINERY FOR THE YEAR UNDER CONSIDERATION SO AS TO DETERMINE WHETHER THAT VALUE INCLUDED ONLY THE DIFFERENCE ALLEGED TO BE RS.3.10 LAKHS AND THE DIFF ERENCE OF RS.57.57 LAKHS WAS OVER AND ABOVE THE SAID AMOUN T BUT IN RESPECT TO THE VALUE OF THE ASSETS TRANSFERRED. ONE MORE ASPECT HAS YET TO BE DEALT WITH BY US WHICH WAS AN ALTERNATE SUBMISSION GOVERNED BY THE PROVISIONS OF SECTION 40A(7) OF I.T. ACT. EVEN THIS CLAIM HAS NO T BEEN EXAMINED BY THE REVENUE AUTHORITIES RATHER LIMITED T HEIR DECISION TO THE FIRST PLANT OF CLAIM I.E., THE DEPR ECIATION U/S 32 OF I T ACT. IN TERMS OF SEC. 40A(7) OF I T ACT, NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF ANY PROV ISION MADE BY THE ASSESSEE FOR THE PAYMENT OF GRATUITY TO HI S EMPLOYEES ON THEIR RETIREMENT. THIS ASPECT NEEDS FURTHER DELIBERATION IN TERMS OF THE ENTRIES MADE I N THE BOOKS. HOWEVER, WE WANT TO DISCARD THE SAID ARGUME NT OF AO THAT THOSE EMPLOYEES BELONGED TO ERSTWHILE ELPRO INTERNATIONAL INDIA, HENCE THE EXPENDITURE WAS NOT WHOLLY AND EXCLUSIVELY RELATED TO THE BUSINESS OF THE ASSESSEE. IN OUR HUMBLE OPINION, ONCE THE ASSESSEE HAS TAKEN OVER ALL THE ASSETS AND LIABILITIES OF THE SA ID ERSTWHILE COMPANY ALONG WITH THE LIABILITY OF ABSORBI NG ALL THOSE EMPLOYEES OF THE SAID ERSTWHILE COMPANY, THEN, ANY DEVELOPMENT THEREAFTER RELATED TO THOSE EMPLOYEES IS DEFINITELY RELATED TO THE BUSINESS OF THE ASSESSEE. THIS OPINION HAS ALREADY BEEN REFERRED IN ABOVE PARA WHI LE DISCUSSING THE EXPENDITURE INCURRED ON VRS AND ONCE WE WERE CONVINCED WITH THE EXPENDITURE RELATED TO THE BUSINESS OF THE ASSESSEE, ONLY THEREAFTER, WE HAVE PROCEEDED TO EXAMINE THE NATURE OF THE EXPENDITURE PAGE 18 OF 19 ITA NOS.767, 769 & 770/BANG/ 2010 18 ANTE. FOLLOWING THOSE REASONS, AS ALREADY ASSIGNED HEREINABOVE, WE AGAIN ENDORSE THE PRINCIPLE OF ADMISSIBILITY OF THE DEDUCTION, IF IT PERTAINED TO T HE PAYMENT OF GRATUITY TO THE RETIRING EMPLOYEES. WITH THESE REMARKS AND DIRECTIONS, THESE GROUNDS ARE RESTORED FOR DENOVO CONSIDERATION; HENCE, ALLOWED O NLY FOR STATISTICAL PURPOSES. 7.5 TAKING INTO ACCOUNT THE FACTS AND CIRCUMSTANCE S OF THE ISSUE AS DELIBERATED UPON IN THE FORE-GOING PARAGRA PHS AND ALSO IN CONSISTENCY WITH THE FINDINGS OF THE HONBLE PUNE BE NCH (SUPRA), WE REMIT BACK THE ISSUE TO THE FILE OF THE AO FOR FRESH CONS IDERATION. HENCE, REVENUES 4 TH GROUND RAISED IN ITA NO.769/2010 IS ALLOWED FOR ST ATISTICAL PURPOSES. III . ITA NO.770/10 AY 2002-03 BY THE REVENUE: 8. AT THE OUTSET, WE WOULD LIKE TO AFFIRM THAT THE ISSUES OF (I) THE DELETION OF ADDITION OF RS.6,68,08,2612/- BEING VRS ; & (II) THE CLAIM OF DEPRECIATION OF RS.4,55,388/- ON PLANT AND MACHINER Y RAISED IN THIS APPEAL HAVE SINCE BEEN DELIBERATED UPON BY THIS BENCH IN TH E REVENUES APPEAL FOR THE AY 2000-01 IN THE ASSESSEES OWN CASE (SUPRA), THE FINDINGS RECORDED THEREIN HOLD GOOD FOR THIS AY AS WELL. IT IS ORDER ED ACCORDINGLY. IN THE RESULT: (I) THE ASSESSEES APPEAL IN ITA NO.767/10 FOR THE AY 2000-01 IS PARTLY ALLOWED AS INDICATED ABOVE & PAGE 19 OF 19 ITA NOS.767, 769 & 770/BANG/ 2010 19 (II) THE REVENUES APPEALS IN ITA NOS.769 & 770/10 FOR THE AYS 2000-01 AND 2002-03 ARE PARTLY ALLOWED FOR STAT ISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH DAY OF JULY, 2012 SD/- SD/- (JASON P BOAZ) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER COPY TO : 1. THE REVENUE 2. THE ASSESSEE 3. THE CIT CONCERNE D. 4. THE CIT(A) CONCERNED. 5. DR 6. GF MSP/ BY ORDER SENIOR PRIVATE SECRETARY, ITAT, BANGALORE.