WARTSILA INIDA LTD, MUMBAI V. DCIT RG 3(3), MUMBAI

ITA 7893/MUM/2010

• Counselvise Citation: 789319914 RSA 2010
• Duration Of Justice: 3 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2006-2007
• Appeal Filed On: 15-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J D MISTRY; SANJIV M SHAH
• Keywords: Opportunity of being heard; Earning of tax free income; Bad and doubtful debts
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G , MUMBAI BEFORE SHRI R.C. SHARMA , ACCOUNTANT MEMBER AND SHRI SANJAY GARG , JUDICIAL MEMBER ITA NO. 7893/M/2010 ASSESSMENT YEAR: 2006 - 07 M/S. WARTSILA INDIA LTD., 48, NECO CHAMBERS, SECTOR - 11, CBD BEL APUR, NAVI MUMBAI 400 614. PAN: AAACW0345D VS. DCIT, RANGE 3(3), AAYAKAR BHAVAN, MUMBAI - 400020 (APPELLANT) (RESPONDENT) ITA NO. 8039/M/2010 ASSESSMENT YEAR: 2006 - 07 DCIT, CIRCLE - 3(3), ROOM N O.609, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S. WARTSILA INDIA LTD., 48, NECO CHAMBERS, SECTOR - 11, CBD BELAPUR, NAVI MUMBAI 400 614. PAN: AAACW0345D (APPELLANT) (RESPONDENT) A SSESSEE BY : SHRI J.D. MISTRY & SHRI SANJIV M. SHAH REVENUE BY : SHRI JAVED AKHTAR, D.R. & SHRI RAVI PRAKASH, D.R. DATE OF HEARING : 10.02. 201 4 DATE OF PRONOUNCEMENT : 12.03.2014 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE ABOVE TITLED CROSS APPEALS, ONE FILED BY THE ASSESSEE AND THE OTHER FILED BY THE REVENUE ARE DIRECTED AGAINST THE ORDER OF THE CIT(A) DATED 03.09.10 RELE VANT TO ASSESSMENT YEAR 2006 - 07 AND THE SAME, FOR THE SAKE OF ITA NO S. 7893/M/2010 & 8039/M/2010 M/S. WARTSILA INDIA LTD. 2 CONVENIENCE , ARE DISPOSED OF WITH THIS COMMON ORDER. FIRST WE TAKE UP THE APPEAL OF THE ASSESSEE. ITA NO.7 8 93/M /2010 THE ASSESSEE HAS TAKEN THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL. A. DISALLOWANCE UNDER SECTION 14A RS.45,52,438/ - 1 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT( A) ERRED IN CONFIRMING THE ACTION OF THE LEARNED DCIT IN DISALLOWING AN AMOUNT OF RS.45,52,438/ - U/S.14A ON THE PLEA THAT ADMINISTRATIVE AND OTHER EXPENSES HAD BEEN INCURRED FOR EARNING EXEMPT INCOME. 2 . IN VIEW OF THE ABOVE, THE LEARNED DCIT BE DIRECTED T O DELETE THE WHOLE OF THE ABOVE ADDITION MADE. B. DISALLOWANCE OF SET OFF OF LONG TERM CAPITAL LOSS OF RS.2,74,442/ - 3 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE LEARNED DCIT IN DISALLOW ING THE SET OFF OF BROUGHT FORWARD CAPITAL LOSS OF RS.2,74,442/ - AGAINST THE SHORT TERM CAPITAL GAIN OF THE RELEVANT ASSESSMENT YEAR, ON THE PLEA THAT IN VIEW OF THE AMENDMENT TO SECTION 74 OF THE ACT, BROUGHT FORWARD LONG TERM CAPITAL LOSS CANNOT BE SET O FF AGAINST CURRENT YEARS SHORT TERM CAPITAL GAIN. 4 . IN VIEW OF THE ABOVE, THE LEARNED DCIT BE DIRECTED TO ALLOW THE SET OFF OF THE BROUGHT FORWARD CAPITAL LOSS AGAINST THE SHORT TERM CAPITAL GAIN OF THE RELEVANT ASSESSMENT YEAR. C. DISALLOWANCE OF OBS OLESCENCE IN STORES & SPARES RS.3,66,000/ - 5 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE LEARNED DCIT IN DISALLOWING AN AMOUNT OF RS.3,66,000/ - ON THE PLEA THAT THE SAME IS IN NATURE OF P ROVISION FOR DIMINUTION IN VALUE OF STOCK, WITHOUT CONSIDERING THE SUBMISSION OF THE APPELLANT IN THIS RESPECT. ITA NO S. 7893/M/2010 & 8039/M/2010 M/S. WARTSILA INDIA LTD. 3 6 . IN VIEW OF TH4E ABOVE, THE LEARNED DCIT BE DIRECTED TO DELETE THE WHOLE OF THE ABOVE ADDITION MADE AND ACCEPT THE CLAIM MADE BY THE APPELLANT IN THE RETURN OF INCO ME. GROUND A: 2. DURING THE ASSESSMENT PROCEEDINGS , THE AO NOTICED THAT THE ASSESSEE HAD EARNED EXEMPT INCOME. HE THEREFORE MADE THE DISALLOWANCE UNDER SECTION 14A OF THE INCOME TAX ACT APPLYING RULE 8D OF THE INCOME TAX RULES. IN FIRST APPEAL THE CIT(A) CONFIRMED THE DISALLOWANCE SO MADE BY THE AO. THE ASSESSEE IS THUS IN APPEAL BEFORE US ON THIS ISSUE. THE LD. CO U NSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE OBSERVATION OF THE CIT(A) THAT THE ASSESSEE ITSELF CALCULATED AND OFFERED THE DISALLOWANCE OF THE EXPENSES UNDER RULE 8 D WAS WRONG. INFACT THE ASSESSEE ON THE ASKING OF THE AO HAD SUBMITTED THE CALCULATION AND AT THE SAME TIME HAD OBJECTED AGAINST THE APPLICATION OF RULE 8D SUBMITTING THAT THE DISALLOWANCE SO CALCULATED WAS TOO HIGH WHEREAS THE ASSESSEE HAD NOT INCURRED ANY EXPENSES FOR EARNING EXEMPT INCOME. HOWEVER SOME REASONABLE DISALLOWANCE WAS AGREED TO AT THE DISCRETION OF THE LOWER AUTHORITIES. THE LD. COUNSEL HAS DRAWN OUR ATTENTION TO COP Y OF THE LETTER DATED 14.9.2009 ALONG WITH ANNEXTURE, WHICH WAS SUBMITTED TO THE AO AND FURTHER COPY OF LETTER DATED 22.3.2010 SUBMITTED BEFORE THE CIT(A) IN THIS RESPECT. ON THE OTHER HAND THE LD. DR HAS RELIED UPON THE DECISION OF THE LOWER AUTHORITIES. 3. WE HAVE CONSIDERED THE SUBMI SSIONS OF THE LD. REPRESENTATIVES OF BOTH THE PARTIES AND HAVE ALSO GONE THROUGH THE RECORDS. IT MAY BE OBSERVED THAT IN THE CASE OF GODREJ & BOYCE MANUFACTURING CO. LTD. (SUPRA) THE HON'BLE BOMBAY HIGH COURT HAS HELD THAT RULE 8D R.W.S. 14A(2) IS NOT ARBI TRARY OR UNREASONABLE BUT CAN BE APPLIED ONLY IF THE ASSESSEE'S METHOD IS NOT SATISFACTORY. IT HAS BEEN FURTHER HELD THAT RULE 8D IS NOT RETROSPECTIVE AND ITA NO S. 7893/M/2010 & 8039/M/2010 M/S. WARTSILA INDIA LTD. 4 APPLIES FROM A.Y. 2008 - 09. FOR THE YEARS FOR WHICH RULE 8D IS NOT APPLICABLE AND IN THE EVENT OF THAT THE AO IS NOT SATISFIED WITH THE EXPLANATION/WORKING GIVEN BY THE ASSESSEE, DISALLOWANCE UNDER SECTION 14A HAS TO BE MADE ON A REASONABLE BASIS. ALMOST SIMILAR VIEW HAS BEEN EXPRESSED BY HON'BLE DELHI HIGH COURT IN THE CASE OF 'MAXOPP INVESTMENT LTD. & OT HERS' VS. CIT (247 ITR 162). IT MAY BE FURTHER OBSERVED THAT IT IS NOT A CASE WHERE NO EXEMPT INCOME WAS RECEIVED BY THE ASSESSEE DESPITE MAKING INVESTMENTS FOR EARNING EXEMPT INCOME. IT IS ALSO NOT THE CASE OF THE REVENUE THAT THE EXEMPT INCOME EARNED BY THE ASSESSEE WAS VERY LESS OR NOT IN PROPORTION TO THE INVESTMENTS MADE BY THE ASSESSEE FOR THIS PURPOSE. UNDER SUCH CIRCUMSTANCES THE DIFFERENT CO - ORDINATE BENCHES OF THIS TRIBUNAL HAVE OBSERVED THAT IN SUCH CASES CERTAIN PERCENTAGE OF EXEMPT INCOME CAN C ONSTITUTE A REASONABLE ESTIMATE FOR MAKING DISALLOWANCE FOR THE YEARS EARLIER TO ASSESSMENT YEAR 2008 - 09. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. 'GODREJ AGROVET LTD.' (ITA NO.934/2011) DECIDED ON 08.01.13 HAS UPHELD THE ORDER OF THE TRIBUNAL DIRECTING THE AO TO RESTRICT THE DISALLOWANCE TO THE EXTENT OF 2% OF THE TOTAL EXEMPT INCOME EARNED BY THE ASSESSEE. IN VIEW OF THE ABOVE, THE STRAIGHTWAY APPLICATION OF RULE 8D IN THE CASE OF THE ASSESSEE BY THE LOWER AUTHORITIES IS NOT SUSTAINABLE. TAK ING INTO CONSIDERATION THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE, I N OUR VIEW, THE EXPENSES EQUAL TO 4% OF THE EXEMPT INCOME EARNED BY THE ASSESSEE WOULD CONSTITUTE BE REASONABLE DISALLOWANCE AND THE SAME IS RESTRICTED TO THAT EXTENT ACCORDINGLY. T HIS GROUND OF APPEAL OF THE ASSESSEE IS THUS PARTLY ALLOWED. GROUND.B: 4 . GROUND B AS REPRODUCED ABOVE IS IN RELATION TO DISALLOWANCE OF SET OFF OF LONG TERM CAPITAL LOSS OF RS.2,74,442/ - AGAINST THE SHORT TERM CAPITAL GAINS. AT ITA NO S. 7893/M/2010 & 8039/M/2010 M/S. WARTSILA INDIA LTD. 5 THE OUTSET THE LD. A.R. H AS SUBMITTED THAT THE IDENTICAL ISSUE CAME INTO CONSIDERATION BEFORE THE TRIBUNAL IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 2005 - 06. THE TRIBUNAL WHILE DISCUSSING THE ISSUE IN DETAIL FINALLY DIRECTED AS UNDER: 20 WE HAVE CONSIDERED THE RIVAL SUBMI SSIONS MADE BY BOTH THE PARTIES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. THE ISSUE, IN THE INSTANT CASE IS NON ALLOWANCE O F SET OFF OF BROUGHT FORWARD LONG TERM CAPITAL LOSS AGAINST SHORT TERM CAPITAL GAINS OF THE YEAR ON ACCOUNT OF SALE OF DEPRECIABLE ASSET. IN OUR OPINION, THE MATTER REQUIRES FRESH ADJUDICATION AT THE LEVEL OF THE AO SINCE THE CLAIM OF THE ASSESSEE HAS NOT BEEN ADJUDICATED IN THE LIGHT OF THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF ACE BUILDERS P LTD (SUPRA) AND IN THE LIGHT OF THE DECISION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF S S C SHOES LTD (SUPRA). SINCE THE FACTS OF THE IMPUGN ED ASSESSMENT YEAR ARE DIFFERENT FROM THE FACTS FOR ASSESSMENT YEAR 2004 - 05; THEREFORE, WE FIND MERIT IN THE SUBMISSION OF THE LD COUNSEL FOR THE ASSESSEE THAT THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2004 - 05 CANNOT BE FOLLOWED FOR THIS YEAR. 21 . CONS IDERING THE TOTALITY OF THE FACTS OF THE CASE, WE DEEM IT PROPER TO RESTORE THIS ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE ISSUE AFRESH AND IN ACCORDANCE WITH LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSES SEE. WE HOLD AND DIRECT ACCORDINGLY. THE GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSE. APART FROM THE ABOVE OBSERVATIONS, THE LD. A.R. HAS ALSO RELIED UPON THE DECISIONS OF THE CO - ORDINATE BENCH ES OF THE TRIBUNAL I.E. IN T HE CASE OF KOTAK MAHINDRA CAPITAL CO . LTD. V. ACIT (2012) 138 ITD 57 (MUMBAI) (SB) , IN THE CASE OF ASK INVESTMENT MANAGER PVT. LTD. VS. DCIT IN ITA NO.7102/MUM/08 DECIDED ON 20.04.10 AND IN THE CASE OF GEETANJALI TRADING LTD. VS. ITO IN ITA NO.5428/M UM/2007 DECIDED ON 01.06.07. IN VIEW OF THE DECISION OF THE TRIBUNAL IN THE OWN CASE OF THE ASSESSEE IN ITA NO. 2027/MUM/2009 IN THE IMMEDIATE PROCEEDING YEAR I.E. A.Y.2005 - 06 DECIDED ON 27.04.11 , THIS ISSUE IS RESTORED TO THE FILE OF THE AO ACCORDINGLY WI TH A DIRECTION TO DECIDE IT AFRESH IN ACCORDANCE WITH LAW , TAKING INTO CONSIDERATION THE RELEVANT CASE LAWS ON THE ISSUE. THIS GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO S. 7893/M/2010 & 8039/M/2010 M/S. WARTSILA INDIA LTD. 6 GROUND C: 5 . GROUND C IS RELATING TO DISALLOWA NCE OF OB SOLESCENCE IN STORES & SPARES. THE LD. A.R. OF THE ASSESSEE HAS EXPLAINED THAT THE ASSESSEE COMPANY HAS BEEN FOLLOWING THE REGULAR POLICY OF PROVIDING FOR NON - MOVING STORES AND SPARES ON THE BASIS OF MOVEMENT IN THE PREVIOUS 3 YEARS. ACCORDINGLY , THE PROVISION MADE IS ON THE BASIS OF ITEMS NOT MOVED FOR MORE THAN 3 YEARS @ 100%, ITEMS NOT MOVED FOR MORE THAN 2 YEARS @ 50% AND ITEMS NOT MOVED FOR MORE THAN 1 YEAR @ 25%. ON THE BASIS OF THIS POLICY BEING FOLLOWED, A PROVISION OF RS.3,66,000/ - WAS MADE. 6 . ON THE OTHER HAND, THE LD. D.R. HAS SUBMITTED THAT THE OBSOLETE STOCK WAS NOT SOLD BY THE ASSESSEE DURING THE YEAR AND SUCH TYPE OF PROVISION WAS NOTHING BUT PROVISION FOR DIMINUTION IN THE VALUE OF STOCK. HE HAS RELIED UPON THE FINDINGS OF TH E LOWER AUTHORITIES. 7 . WE HAVE CONSIDERED THE RESPECTIVE SUBMISSIONS OF THE LD. REPRESENTATIVES OF BOTH THE PARTIES. ALMOST IDENTICAL ISSUE HAS COME INTO CONSIDERATION BEFORE THE DELHI BENCH OF THIS TRIBUNAL IN THE CASE OF BHARAT HEAVY ELECTRICALS LT D. VS. DCIT (2006) 9 SOT 89 (DEL HI ) (URO) WHEREIN THE ASSESSEE COMPANY WAS ALSO ENGAGED IN SIMILAR TYPE OF BUSINESS AS IN THE CASE OF ASSESSEE IN THE PRESENT CASE I.E. MANUFACTURE OF POWER GENERATING EQUIPMENTS AND THE DEDUCTION WAS CLAIMED ON ACCOUNT OF PROVISION MADE FOR NON MOVING STORES. THE CO - ORDINATE BENCH OF THE TRIBUNAL WHEN FACED WITH THE IDENTICAL FACTS ALLOWED THE CLAIM OF THE ASSESSEE OBSERVING AS UNDER: THE NOTE REGARDING THE PROCEDURE FOLLOWED BY THE ASSESSEE FOR CHARGING OF NON - MO VING STORES INDICATED THAT ONLY WHEN ALL THE EFFORTS TO DISPOSE OF THE MATERIAL WOULD FAIL THE COMMITTEE WOULD RECOMMEND THE WRITE OFF IN THE BOOKS OF ACCOUNT. NO DEFECT IN THE PROCEDURE ADOPTED BY THE ASSESSEE HAD BEEN POINTED OUT. AS RIGHTLY ITA NO S. 7893/M/2010 & 8039/M/2010 M/S. WARTSILA INDIA LTD. 7 POINTED OU T BY THE ASSESSEE, THE ACCOUNTS WERE SUBJECT TO SCRUTINY NOT ONLY BY THE STATUTORY AUDITORS BUT ALSO BY THE C&AG. IN THOSE CIRCUMSTANCES, THE BONA FIDE OF THE PROCEDURE OR GENUINENESS OF THE CLAIM COULD NOT BE DOUBTED. EVEN ON MERITS, WHEN THE STOCK OF M ATERIALS WAS ACTUALLY FOUND TO BE DEAD STOCK FROM WHICH NOTHING COULD BE REALIZED BECAUSE OF THE TOTAL ABSENCE OF ANY DEMAND THEREFOR, ITS VALUE FELL DRASTICALLY. THE SAME HAD BEEN TAKEN NOTE OF BY THE COMMITTEE FORMED FOR RECOMMENDING WHETHER ANY ITEM RE PRESENTED DEAD STOCK. THEREFORE, THE ASSESSEES CLAIM WAS TO BE ACCEPTED. 8 . THE HONBLE SUPREME COURT IN THE CASE OF UNITED COMMERCIAL BANK VS. CIT (1999) 240 ITR 355 HAS OBSERVED THAT THE METHOD OF ACCOUNTING NAMELY ON COST OR MARKET VALUE WHICHEVE R IS LOWER FOR VALUING STOCK IN TRADE FOR INCOME TAX PURPOSES IS THE CORREC T AND PERMISSIBLE METHOD IN LAW, IF THE SAID METHOD FOLLOWED BY THE ASSESSEE IS ACTUALLY FOLLOWED AND ADOPTED BY HIM REGULARLY AND CONSISTENTLY. IN THE CASE IN HAND ALSO THE ASSESS EE IS CONSISTENTLY FOLLOWING THE METHOD OF VALUING THE STOCK AT COST OR MARKET VALUE WHICHEVER IS LOWER AND WHICH HAS BEEN ACCEPTED BY THE REVENUE EXCEPT THE PRESENT ASSESSMENT YEAR IN QUESTION. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF HEAVY INDUSTRY OF MANUFACTURING OF POWER PLANTS AND THE STORE ITEMS WHICH ARE NOT USED/MOVED OVER THE YEARS BECOME OBSOLETE AND AS SUCH THE ASSESSEE IS REGULARLY FOLLOWING THE METHOD OF DEDUCTION IN THE VALUE OF THE STOCK OVER THE YEARS AND AS SUCH IN VIEW OF THE DECISION OF THE CO - ORDINATE BENCH OF THE TRIBUNAL AND ALSO IN VIEW OF THE PRINCIPLE OF LAW LAID DOWN BY THE HONBLE SUPREME COURT AS OBSERVED ABOVE , THE CLAIM OF THE ASSESSEE DESERVED TO BE ALLOWED. ACCORDINGLY, THE DISALLOWANCE MADE UNDER THIS HEAD IS HEREBY ORDE RED TO BE DELETED. ITA NO. 8039/MUM/2010 THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCES OF LIQUIDATED DAMAGES CLAIM RECEIVABLE FROM GUJARAT AMBUJA CEMENTS LTD. OF RS.3,23,669/ - ITA NO S. 7893/M/2010 & 8039/M/2010 M/S. WARTSILA INDIA LTD. 8 AND RS.30,00,000/ - FROM M/S. HUKUMCHAND JUTE INDUSTRIES LTD., TOTALING RS.33,23,669/ - . 2. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFI CER BE RESTORED. 9 . THE SOLE ISSUE TAKEN IN THE GROUND S OF APPEAL RELATES TO DISALLOWANCE OF LIQUID ATED DAMAGES. THE ASSESSEES CLAIM IN THE EARLIER YEARS I.E. UP TO ASSESSMENT YEAR 2004 - 05 WAS ALLOWED ON THE GROUND THAT THE BAD DEBTS AND LIQUIDATED DAM AGES WHEN WRITTEN OFF IN THE BOOKS OF ACCOUNT ARE ALLOWABLE AS DEDUCTION. HOWEVER, IT MAY BE OBSERVED THAT THE WRITING OFF IN THE BOOKS OF ACCOUNT CAN BE MADE IN RESPECT OF THE RECEIVABLES NOT IN RESPECT OF PAYABLES. THE CLAIM IN THE CASE OF THE ASSE SSEE IS IN RESPECT TO LIQUIDATED DAMAGES EITHER PAID OR PAYABLE DURING THE ASSESSMENT YEAR. THE AO DISALLOWED THE SAME ON THE GROUND THAT THE ASSESSEE HAD NOT FURNISHED ANY EVIDENCE OF PAYMENT OF SUCH LIQUIDATED DAMAGES. EVEN BEFORE US FROM THE DOCUMENTS RELIED UPON BY THE ASSESSEE , I T IS NOT DECIPHERABLE AS TO WHETHER SUCH DAMAGES WERE ACTUALLY PAID BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE OWN CASE OF THE ASSESSEE FOR THE IMMEDIATE PROCEEDING YEAR I.E. FOR ASSESSMENT YEAR 2005 - 06 WHILE DEALING WITH THE IDENTICAL ISSUE HAS DIRECTED AS UNDER: 29 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY BOTH THE PARTIES, PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THE ASSESSEE, ADMITTEDLY HAS NOT F URNISHED THE FULL DETAILS BEFORE THE AO. WE FIND THE CIT(A) DELETED THE ADDITION MERELY ON THE STATEMENT OF THE ASSESSEE THAT SUCH DAMAGES CLAIMED IN EARLIER YEAR HAVE BEEN ALLOWED BY THE CIT(A) CONSISTENTLY. SINCE THE ONUS CAST UPON THE ASSESSEE WAS NOT D ISCHARGED AND THE CIT(A) MERELY ON THE BASIS OF STATEMENT GIVEN BY THE ASSESSEE HAS DELETED THE DISALLOWANCE; THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THE SAME IS NOT SUSTAINABLE IN LAW. FOR CLAIMING ANY EXPENSE AS DEDUCTION, THE ONUS IS ALWAYS ON THE ASSESSEE TO SUBSTANTIATE WITH EVIDENCE TO THE SATISFACTION OF THE ASSESSING OFFICER THAT THE SAME IS DEDUCTIBLE. IN THE INSTANT CASE, THE ASSESSEE FAILED TO DISCHARGE THE ONUS CAST ON IT. THE LD CIT(A) MERELY ON THE BASIS OF THE STATEMENT BY THE ASSESS EE DELETED THE DISALLOWANCE WHICH IS NOT SUSTAINABLE IN LAW. WE, THEREFORE, DEEM IT PROPER TO RESTORE THIS ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE WITH EVIDENCE TO THE SATISFACTION OF THE ASSESSING OFFICER THAT LIABILITY FOR LIQUIDATED ITA NO S. 7893/M/2010 & 8039/M/2010 M/S. WARTSILA INDIA LTD. 9 DAMAGES WERE ACTUALLY INCURRED BY THE ASSESSEE. THE ASSESSING OFFICER SHALL DECIDE THE ISSUE AFRESH AND IN ACCORDANCE WITH LAW AFTER ALLOWING REASONABLE OPPORTUNITY OF BEING HEARD TO THE A SSESSEE. WE HOLD AND DIRECT ACCORDINGLY. GROUNDS OF APPEAL NO.2 BY THE REVENUE, IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSE . 10 . FOLLOWING THE DECISION OF THE CO - ORDINATE BENCH OF THE TRIBUNAL, FOR THE SAKE OF CONSISTENCY, WE RESTORE THIS ISSUE TO THE FILE OF THE AO ACCORDINGLY WITH A DIRECTION TO DECIDE THE SAME FOR THIS YEAR ALSO IN TERMS OF THE ORDER OF THE TRIBUNAL D ATED 27.04.11 AS REPRODUCED ABOVE. 1 1 . IN VIEW OF THE ABOVE, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 1 2 . IN THE RESULT, THE APPEAL OF THE ASSESSEE AS WELL AS APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12.03. 201 4 . SD/ - SD/ - ( R.C. SHARMA ) (SANJAY GARG) ACCOUNT ANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 12.03. 201 4 . * KISHORE COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT ( A) CONCERNED, MUMBAI THE DR C BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.