ACIT, Circle-4(1), Kolkata, Kolkata V. M/s. M. K. Shah Exports Ltd, Kolkata

ITA 978/KOL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2604 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 08-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: ROHIT SHUKLA
• Keywords: Transfer pricing; International transaction; Wholly owned subsidiary
• Section: 14A; 154; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENCH KOLKATA BEFORE SHRI S. S. GODARA, JM &DR. A.L.SAINI, AM ./ITA NOS.977 & 978/KOL/2017 ( [ [ / ASSESSMENT YEARS: 2011-12& 2012-13) A.C.I.T, CIRCLE-4(1), KOLKATA P-7, CHOWRINGHEE SQUARE, 8 TH FLOOR, KOLKATA 700 069. VS. M/S. M. K. SHAH EXPORTS LTD. 2/2. JUSTICE DWARKANATH ROAD, KOLKATA 700 020. ./ ./PAN/GIR NO. : AACCM 0884 H (ASSESSEE) .. (RESPONDENT) ASSESSEE BY :SHRI S. DASGUPTA, ADDL. CIT(DR) RESPONDENT BY :SHRI ROHIT SHUKLA, FCA / DATE OF HEARING : 29/05/2018 /DATE OF PRONOUNCEMENT : 17/08/2018 / O R D E R PER DR. A. L. SAINI: THE CAPTIONED TWO APPEALS FILED BY THE REVENUE, PERTAINING TO ASSESSMENT YEARS2011-12&2012-13, ARE DIRECTED AGAINST THE ORDERS PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)- 22, KOLKATA, WHICH IN TURN ARISE OUT OF ASSESSMENT ORDERS PASSED BY THE ASSESSING OFFICER U/S 143(3)/92CA(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. SINCE, THESE TWO APPEALS FILED BY THE REVENUE RELATE TO SAME ASSESSEE, DIFFERENT ASSESSMENT YEARS, COMMON AND IDENTICAL ISSUES ARE INVOLVED, THEREFORE, THESE HAVE BEEN CLUBBED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN ITA NO.977/KOL/2017 FOR ASSESSMENT YEAR 2011-12ARE AS FOLLOWS: M/S. M. K. SHAH EXPORTS LTD. ITA NOS.977 & 978/KOL/2017 ASSESSMENT YEARS: 2011-12 & 2012-13 PAGE | 2 1. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED INALLOWING THE GROUND TAKEN AGAINST THE UPWARD ADJUSTMENT UNDER ARM'S LENGTH ON LOANADVANCE IN FOREIGN CURRENCY TO ITS 100% FOREIGN SUBSIDIARY.' 2. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS JUSTIFIEDIN HOLDING THAT COMPANY HAD ADVANCED A LOAN IN FOREIGN CURRENCY TO ITS SUBSIDIARY ON WHICHIT CHARGED INTEREST @5% WHICH IS WELL ABOVE THE LIBOR RATE WITHOUT CONSIDERING THE OTHERISSUES E.G. CREDIT RATING OF THE DEBTOR, LOAN TERM TO MATURITY/ PURPOSE OF LOAN, THE CURRENCYIN WHICH THE ISSUED LOAN IS DENOMINATED, THE SECURITY PROVIDED, THE COUNTRY IN WHICH THEDEBTOR IS LOCATED THE INDUSTRY IN WHICH THE DEBTOR OPERATE, BUSINESS OF THE CREDITOR.' 3, 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS JUSTIFIEDIN DELETING THE UPWARD ADJUSTMENT TO THE ARM'S LENGTH PRICE MADE TO THE TUNE OFRS.1,25,98,533/-.' 4. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS JUSTIFIEDWHILE REFERRING THE CASE SIVA INDUSTRIES AND HOLDINGS LTD (SUPRA), WHEREIN IT WAS HELD THATONCE THE TRANSACTION IS BETWEEN THE ASSESSEE AND THE AES IS IN FOREIGN CURRENCY, THETRANSACTION WOULD HAVE TO BE LOOKED UPON BY APPLYING COMMERCIAL PRINCIPAL IN REGARD TOINTERNATIONAL TRANSACTION WITHOUT DEFINING 'COMMERCIAL PRINCIPAL' IN THIS KIND OF TRANSACTION.' 5. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS JUSTIFIEDWHILE REFERRING THE AURIONPRO SOLUTIONS LIMITED VS. ADDITIONAL COMMISSIONER OF INCOME TAXIN ITA NO.7872/MUM/2011 WHEREIN IT WAS OBSERVED THAT APPROPRIATE RATE WOULD BE LIBORPLUS 2% AND THE LD.CIT(A) WAS ALSO OBSERVED EVEN IF A MARK-UP IS GIVEN THE RATE WOULD BE 2.901241667% WHEREAS THE ASSESSEE HAS CHARGED 5% ON THE LOAN GIVEN ITS AES, HOWEVER,IT IS PERTINENT TO MENTION THAT THE INSTANT CASE IS NOT RELATED TO BANK OR NBFC NOR THECOMPANY IS IN THE BUSINESS OF MONEY LENDING.' 6. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN ALLOWING THE GROUND TAKEN AGAINST DISALLOWANCE MADE TO THE TUNE OF RS.70,301- UNDER SEC.14A READ WITH RULE 8D. 7. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED INALLOWING THE GROUND TAKEN AGAINST DISALLOWANCE MADE U/S.14A WITHOUT CONSIDERING THE BOARDCIRCULAR 5/2014.' 8. 'THAT THE ASSESSEE CRAVES FOR LEAVE TO ADD, DELETE, AMEND OR MODIFY ANY GROUND BEFORE ORAT THE TIME OF APPELLATE PROCEEDINGS.' 4. THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN ITA NO.978/KOL/2017 FOR ASSESSMENT YEAR 2012-13 ARE AS FOLLOWS: 1. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)HAS ERRED INALLOWING THE GROUND TAKEN AGAINST THE UPWARD ADJUSTMENT UNDER ARM'S LENGTH ON LOANADVANCE IN FOREIGN CURRENCY TO ITS 100% FOREIGN SUBSIDIARY (AE).' 2. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS JUSTIFIED INHOLDING THAT COMPANY HAD ADVANCED A LOAN IN FOREIGN CURRENCY TO ITS SUBSIDIARY ON WHICH ITCHARGED INTEREST @5% WHICH IS WELL ABOVE THE LIBOR RATE WITHOUT CONSIDERING THE OTHERISSUES E.G, CREDIT RATING OF THE DEBTOR, LOAN TERM TO MATURITY, PURPOSE OF LOAN, THE CURRENCYIN WHICH THE ISSUED LOAN IS DENOMINATED, THE SECURITY PROVIDED, THE COUNTRY IN WHICH THEDEBTOR IS LOCATED THE INDUSTRY IN WHICH THE DEBTOR OPERATE, BUSINESS OF THE CREDITOR.' M/S. M. K. SHAH EXPORTS LTD. ITA NOS.977 & 978/KOL/2017 ASSESSMENT YEARS: 2011-12 & 2012-13 PAGE | 3 3. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS JUSTIFIED INDELETING THE UPWARD ADJUSTMENT MADE IN THE ORDER OF RS.67,83,169/- ON ACCOUNT OFADVANCED A LOAN IN FOREIGN CURRENCY TO ITS FOREIGN SUBSIDIARY (AE).' 4. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS JUSTIFIEDWHILE REFERRING THE CASE SIVA INDUSTRIES AND HOLDINGS LTD (SUPRA), WHEREIN IT WAS HELD THATONCE THE TRANSACTION IS BETWEEN THE ASSESSEE AND THE AES IS IN FOREIGN CURRENCY, THETRANSACTION WOULD HAVE TO BE LOOKED UPON BY APPLYING COMMERCIAL PRINCIPAL IN REGARD TOINTERNATIONAL TRANSACTION WITHOUT DEFINING 'COMMERCIAL PRINCIPAL' 5. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS JUSTIFIEDWHILE REFERRING THE AURIONPRO SOLUTIONS LIMITED VS. ADDITIONAL COMMISSIONER OF INCOME TAX IN ITA NO.7872/MUM/2011 WHEREIN IT WAS OBSERVED THAT APPROPRIATE RATE WOULD BE LIBOR PLUS 2% AND THE LD.CIT(A) WAS ALSO OBSERVED THE ASSESSEE HAS CHARGED 5% ON THE LOANGIVEN TO ITS AES WITHOUT CONSIDERING THE CASE IS NOT RELATED TO BANK OR NBFC.' 6. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS JUSTIFIED INHOLDING THAT METHOD USED I.E., TNMN TO DETERMINE ALP WAS APPROPRIATE.' 7. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD.CIT(A) HAS JUSTIFIED INHOLDING THAT IF INTEREST DETERMINED BY THE ASSESSEE UNDER ALP IS MORE THAN 2% ABOVE OFLIBOR THEN NO UPWARD ADJUSTMENT IS NECESSARY.' 8. 'THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN DELETINGTHE ADDITION OF RS.16,26,43,864/- MADE BY THE AO ON ACCOUNT OF DELAYED DEPOSIT OF EMPLOYEES CONTRIBUTION TOWARD PF WITHOUT CONSIDERING SECTION 2(24)(X) READ WITH SECTION 36(1)(VA).' 9. 'THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN ALLOWINGTHE GROUND TAKEN AGAINST DISALLOWANCE MADE TO THE TUNE OF RS.1,11,600/- U/S.14A READ WITHRULE 8D.' 10. 'THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN ALLOWINGTHE GROUND TAKEN AGAINST DISALLOWANCE MADE U/S.144 WITHOUT CONSIDERING CIRCULAR NO.5/2014 ISSUED BY THE BOARD. 11. THAT THE ASSESSEE CRAVES FOR LEAVE TO ADD, DELETE, AMEND OR MODIFY ANY GROUND BEFORE OR AT THE TIME OF ASSESSEE PROCEEDINGS. 5. WE NOTE THAT IN THESE TWO APPEALS, THE REVENUE HAS RAISED A MULTIPLE GROUNDS OF APPEAL, AS MENTIONED ABOVE, BUT AT THE TIME OF HEARING THE MAIN GRIEVANCE OF REVENUE HAS BEEN SUMMARIZED ISSUE-WISE AS FOLLOWS: (I) GROUND NOS.1 TO 5 RAISED BY THE REVENUE IN ITA NO.977/KOL/2017, FOR ASSESSMENT YEAR 2011-12 AND GROUND NOS.1 TO 7 RAISED BY THE REVENUE IN ITA NO.978/KOL/2017, FOR ASSESSMENT YEAR 2012-13, RELATE TO THE ISSUE ABOUT UPWARD ADJUSTMENT MADE IN THE ARMS LENGTH PRICE ON ACCOUNT OF LOAN ADVANCED IN FOREIGN CURRENCY TO ITS FOREIGN SUBSIDIARY COMPANIES. (II) GROUND NOS. 6 & 7 RAISED BY THE REVENUE IN ITA NO.977/KOL/2017 FOR ASSESSMENT YEAR 2011-12 AND GROUND NOS.9 AND 10 RAISED BY THE REVENUE IN ITA M/S. M. K. SHAH EXPORTS LTD. ITA NOS.977 & 978/KOL/2017 ASSESSMENT YEARS: 2011-12 & 2012-13 PAGE | 4 NO.978/KOL/2017, FOR ASSESSMENT YEAR 2012-13, RELATE TO DISALLOWANCE MADE U/S 14A R.W.R. 8D OF THE I.T. RULES. (III) GROUND NO.8 RAISED BY THE REVENUE IN ITA NO.978/KOL/2017, FOR ASSESSMENT YEAR 2012-13, RELATES TO ADDITION OF RS.16,26,43,864/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DELAYED DEPOSIT OF EMPLOYEES CONTRIBUTION TOWARD PF WITHOUT CONSIDERING SECTION 2(24)(X) R.W.S 36(1)(VA). 6. NOW, WE SHALL TAKE ISSUE NO. RAISED BY THE REVENUE, WHICH READS AS FOLLOWS: (I)GROUND NOS.1 TO 5 RAISED BY THE REVENUE IN ITA NO.977/KOL/2017, FOR ASSESSMENT YEAR 2011-12 AND GROUND NOS.1 TO 7 RAISED BY THE REVENUE IN ITA NO.978/KOL/2017, FOR ASSESSMENT YEAR 2012-13, RELATE TO THE ISSUE ABOUT UPWARD ADJUSTMENT MADE IN THE ARMS LENGTH PRICE ON ACCOUNT OF LOAN ADVANCED IN FOREIGN CURRENCY TO ITS FOREIGN SUBSIDIARY COMPANIES. 7. THE FACTS OF THE ISSUE WHICH CAN BE STATED QUITE SHORTLY ARE AS FOLLOWS: T HE ASSESSEE IS HAVING ELEVEN TEA ESTATES IN ASSAM AND EXPORTS TEA TO CUSTOMERS INCLUDING TO ITS SUBSIDIARY ZAO CLASSIC IN RUSSIAN FEDERATION. ON EXAMINATION OF THE DETAILS AVAILABLE IN THE FORM NO. 3CEB AND TP STUDY REPORT FOR THE ASSESSMENT YEAR 2012-13, IT WAS NOTED BY TPO THAT THE ASSESSEE COMPANY HAS DISCLOSED RECEIPT OF INTEREST ON LOAN ADVANCED TO IT'S SUBSIDIARY ZAO CLASSIC IN RUSSIA. ON PERUSAL OF THE A.Y. 2011-12, IT WAS NOTED THAT THE ASSESSEE HAD CHARGED INTEREST @5% ON THE LOAN FROM 01/01/2010 ONWARDS. THE LOAN WAS REPORTED IN THE FORM NO.3CEB FOR THE A.Y.2011-12 AND CUP METHOD WAS USED AS A MOST APPROPRIATE METHOD. AS PER DETAILS AVAILABLE NO FRESH LOAN WAS ADVANCED DURING THE F.Y. 2011-12. IT WAS SEEN BY TPO THAT THROUGH AN AGREEMENT TITLED 'CREDIT AGREEMENT NO. 2' DATED 08 DECEMBER, 2003, THE ASSESSEE HAD ADVANCED A LOAN OF USD 800,000 TO ITS SUBSIDIARY ZAO CLASSIC IN RUSSIA, A COMPANY INCORPORATED UNDER THE LAWS OF THAT COUNTRY. THE PRINCIPAL AMOUNT WAS INCREASED TO 1,500,000 USD BY AN AMENDMENT DATED 19.02.2004. THE RATE OF INTEREST CHARGED ON THE LOAN WAS INCREASED FROM 4% P.A. TO 8% P.A. THROUGH AN AMENDMENT DATED 02.04.2007, I.E. DURING THE FINANCIAL YEAR PERTAINING TO ASSESSMENT YEAR 2008-09. THIS AGREEMENT WAS EXTENDED FOR FURTHER 5 YEARS VIDE MINUTES OF MEETING OF BOARD OF DIRECTORS ON 23.11.2007 REGARDING 'LOAN TO WHOLLY OWNED SUBSIDIARY (WOS) ABROAD UNDER THE AUTOMATIC ROUTE' AND THE CEILING FOR THE LOAN AMOUNT WAS INCREASED TO USD 25,00,000 (RATE OF INTEREST REMAINED UNALTERED), M/S. M. K. SHAH EXPORTS LTD. ITA NOS.977 & 978/KOL/2017 ASSESSMENT YEARS: 2011-12 & 2012-13 PAGE | 5 FURTHER, ON ACCOUNT OF THIS EXTENSION AND UPWARD REVISION OF THE CEILING, ADDITIONAL USD 4,05,000 WERE ADVANCED DURING F.Y. 2008-09. NET USD 206014 WAS ADVANCED IN F.Y. 2009-10 ALSO. THE BASIC TERMS OF THIS AGREEMENT, CAN BE CONSTRUED AS FOLLOWS: SL. NO. DESCRIPTION DETAILS 1 LOAN AMOUNT/CURRENCY 800,000/USD (ORIGINAL AGREEMENT); CEILING REVISED ON 19.02.2004 TO 15,00,000 USD; CEILING FURTHERREVISED ON23.11.2007 TO 25,00,000 USD. NET USD 2,06,014 ADVANCED IN F.Y. 2009-10 ALSO. 2 TERM OF THE LOAN 5 YEARS (AS PER ORIGINAL AGREEMENT); EXTENDED TOFURTHER 5 YEARS ON 23.11.2007. 3 PURPOSE OF LOAN TO EXPAND OPERATIONS, PURCHASE OF GOODS 4 BORROWERS COUNTRY RUSSIA 5 YEAR OF LOAN FY 2003-04; HOWEVER, THE CRITICAL CONDITION OFPRICING OF THE LOAN, I.E., THE RATE OF INTEREST WAS REVISED IN FY 2007-08, ALONG WITH FURTHEREXTENSION OF TERM FOR 5 YEARS. 6 RATE 4% PA (ORIGINAL AGREEMENT); INCREASED TO 8% ON02.04.2007; REDUCED TO 5% FROM 01.01.2010 7 PUT OR CALL OPTION BOTH OPTIONS 8 SECURITY UNSECURED 9 SENIORITY N.A. 10 ANY OTHER CONDITION N.A THE LOAN WAS ADVANCED IN THE EARLIER ASSESSMENT YEARS AND NO FRESH LOAN WAS ADVANCED IN THE F.Y. 2011-12 PERTAINING TO A.Y. 2012-13 UNDER CONSIDERATION THEREFORE IN ABSENCE OF ANY DISBURSEMENT OF FRESH LOAN DURING THE F.Y. 2011-12 NO FRESH BENCHMARKING OF THE INTEREST ON SUCH LOAN WAS WARRANTED. THE LD TPO NOTED THAT THE TP PROCEEDINGS FOR THE A.Y. 2010-11 & 2011-12, THE ISSUE OF LOAN WAS DULY EXAMINED BY THE TPO AND ARM'S LENGTH INTEREST ON SUCH LOAN WAS DETERMINED AT 19% P.A. 8. THE RATE OF INTEREST WAS 5% P.A. ON LOANS IN FOREIGN CURRENCY (US DOLLARS) ADVANCED TO ZAO CLASSIC. THE AGGREGATE AMOUNT OF INTEREST OF RS.24,46,612/- WAS EARNED DURING THE YEAR. DURING THE TPO ( TRANSFER PRICING OFFICER) PROCEEDINGS, THE TPO, DISREGARDED THE ASSESSEES SUBMISSION DATED 21.12.2015 SUPPORTED BY ORDERS OF VARIOUS ITATS AND HIGH M/S. M. K. SHAH EXPORTS LTD. ITA NOS.977 & 978/KOL/2017 ASSESSMENT YEARS: 2011-12 & 2012-13 PAGE | 6 COURTS AND PASSED ORDER UNDER SECTION 92CA(3) AND RE-WORKED THE RATE OF INTEREST OF 19% ON THE OPENING BALANCE OF THE LOAN ADVANCED TO THE ASSESSEE'S SUBSIDIARY DURING THE PREVIOUS YEAR ENDED 31.03.2012 AS 'ARM'S LENGTH PRICE' AGGREGATING TO RUPEE EQUIVALENT TO RS.1,30,51,586 AND RECOMMENDED AN UPWARD ADJUSTMENT TO THE TUNE OF RS. 1,06,04,974 [RS.1,30,51,586 MINUS RS.24,46,612]. SUBSEQUENTLY, THE LEARNED TPO RECTIFIED HIS ORDER DATED 31.12.2015 THROUGH HIS ORDER DATED 14.03.2016 UNDER SECTION 154 READ WITH SECTION 92CA(3) OF THE ACT RECOMMENDING THE UPWARD ADJUSTMENT OF RS,67,83,169/- FROM EARLIER UPWARD ADJUSTMENT OF RS.1,06,04,974/. 9. AGGRIEVED BY THE STAND OF THELD TPO/AO, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) WITH SUCCESS. THE LD CIT(A) AFTER CONSIDERING THE VARIOUS PRECEDENTS CITED BY THE ASSESSEE NOTED THAT IN THE FOREIGN CURRENCY LOAN THE RATE OF INTEREST IS TO BE ADOPTED ON LIBOR AND AT THE MOST LIBOR PLUS 2%. THE AVERAGE LIBOR RATE FOR THE PREVIOUS YEAR WAS 0.89821667% AND TAKING INTO ACCOUNT MARK UP OF 2%, THE RATE WOULD BE 2.89826667% WHEREAS THE ASSESSEE CHARGED 5% ON THE LOAN GIVEN TO ASSOCIATE ENTERPRISE (AE), THEREFORE, LD CIT(A) DELETED THE UPWARD TP ADJUSTMENT TO THE TUNE OF RS.67,83,169/-. 10. THE REVENUE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE THIS TRIBUNAL. 11. WHEN THIS APPEAL WAS CALLED OUT FOR HEARING, LEARNED COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO THE ORDER DATED ORDER DATED 12.05.2017, IN ITA NO.2149/KOL/2014, PASSED BY THE DIVISION BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2008-09 WHEREBY THE UPWARD TP ADJUSTMENT WAS DELETED. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PRESENT APPEAL IS SQUARELY COVERED BY THE AFORESAID ORDER OF THE TRIBUNAL, A COPY OF WHICH WAS ALSO PLACED BEFORE THE BENCH: 12. LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT HAVE MUCH TO SAY BUT HE NEVERTHELESS RELIED UPON THE ORDERS OF THE LD TPO/AO. 13. WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE DIVISION BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE VIDE ORDER DATED 12.05.2017, IN ITA NO.2149/KOL/2014, (SUPRA) . IN THIS ORDER, THE TRIBUNAL HAS INTER ALIA OBSERVED AS FOLLOWS: M/S. M. K. SHAH EXPORTS LTD. ITA NOS.977 & 978/KOL/2017 ASSESSMENT YEARS: 2011-12 & 2012-13 PAGE | 7 4. AS FAR AS GROUND NO.1 RAISED BY THE REVENUE IS CONCERNED THE FACTS ARE AS FOLLOWS :- THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF GROWING AND MANUFACTURING OF TEA AND ARE ALSO BLENDERS, PACKERS AND EXPORTERS OF TEA. THE ASSESSEE ENTERED INTO INTERNATIONAL TRANSACTION OF GIVING OF LOANS TO ITS SUBSIDIARY AZO CLASSIC RUSSIA. IT IS NOT IN DISPUTE THAT THE TRANSACTION OF GIVING LOAN TO A SUBSIDIARY WAS AN INTERNATIONAL TAXATION AND THE RATE OF INTEREST THAT HAS TO BE CHARGED BY THE ASSESSEE ON SUCH LOAN HAS TO CONFIRM TO THE ARMS LENGTH TEST LAID DOWN IN SECTION 92 OF THE INCOME TAX ACT, 1961 (ACT). IT IS NOT IN DISPUTE THAT THE LOAN IN QUESTION WAS GIVEN IN FOREIGN CURRENCY I.E., US$ AND THE RATE OF INTEREST THAT WAS CHARGED WAS AT 4% P.A. WHICH WAS INCREASED TO 8% ON 02.04.2007. THE BASIC DETAILS OF THE LOAN AGREEMENT WERE AS FOLLOWS :- 'UNDER AN AGREEMENT TITLED 'CREDIT AGREEMENT NO.2' DATED 08 DECEMBER, 2003, THE ASSESSEE HAD ADVANCED A LOAN OF USD 800,000 TO ITS SUBSIDIARY ZAO CLASSIC IN RUSSIA. THE PRINCIPAL AMOUNT WAS INCREASED TO 1,500,000 USD BY AN AMENDMENT DATED 19,02.2004. THE RATE OF INTEREST CHARGED ON THE LOAN WAS INCREASED FROM 4% P.A. TO 8% P.A. THROUGH AN AMENDMENT DATED 02.04.2007, I.E. DURING THE FINANCIAL YEAR PERTAINING TO ASSESSMENT YEAR 2008-09. THE BASIC TERMS OF THIS AGREEMENT WERE AS FOLLOWS: S.NO. DESCRIPTION DETAILS 1. LOAN MOUNT/CURRENCY 800 000/USD(ORIGINAL AGREEMENT); AMENDED ON 19.02.2004 TO 15,00,000 USD 2. TERM OF THE LOAN 5 YEARS (AS PER THE ORIGINAL AGREEMENT); 3. PURPOSE OF LOAN TO EXPAND OPERATIONS, PURCHASE OF GOODS 4. BORROWER'S COUNTRY RUSSIA 5 YEAR OF LOAN 8 DECEMBER, 2003 6. RATE 4% P.A. (ORIGINAL AGREEMENT); INCREASED TO 8% ON 02.04.2008 7. PUT OR CALL OPTION BOTH OPTIONS 8. SECURITY UNSECURED 9. SENIORITY N.A. 10. ANY OTHER CONDITION N.A. 5. THE TRANSFER PRICING OFFICER (TPO) EXAMINED THE RATE OF INTEREST CHARGED ON THE LOAN BY THE ASSESEE IN THE LIGHT OF MANDATE LAID DOWN IN SECTION 92 OF THE ACT THAT THE RATE OF INTEREST ON SUCH LOANS MUST BE AT ARMS LENGTH I.E. RATE AT WHICH SIMILAR LOAN WOULD BE GIVEN OR TAKEN BY UNRELATED PARTIES. 6. THE PLEA OF THE ASSESSEE BEFORE THE AO WAS THAT THE LOAN TO THE SUBSIDIARY ZAO CLASSIC WAS A TRADE INVESTMENT IN FORM OF FOREIGN CURRENCY LOAN WHICH IN TURN PROVIDES BENEFIT TO THE PARENT COMPANY I.E. THE ASSESSEE IN THE FORM OF INCREASED MARKET SHARE. IT WAS SUBMITTED BY THE ASSESSEE THAT BORROWINGS IN THE HANDS OF ZAO CLASSIC WAS EXTERNAL COMMERCIAL BORROWING (ECBS) AND THE RANGE OF RATES OF INTEREST VARY BETWEEN LIBOR PLUS 100 BPS TO 200 BPS. THE EUROPEAN CENTRAL BANK HAS RECOMMENDED RATES RANGING FROM 2.00% TO 5.25% ON ECBS. FOREIGN CURRENCY LOANS ARE GIVEN BY BANKS GLOBALLY BEARING LIBOR BASED RATE. THE AVERAGE OF THE LIBOR BASED RATE FOR THE PERIOD FROM 01.4.2007 TO 3L.03.2008 WAS 4.68 %. IT HAS BEEN COMPARED BY TAKING AVERAGE MONTHLY OPENING AND CLOSING RATE FOR THE PERIOD FROM 01.04.2007 TO 31.03.2008. THE ASSESSEE ENCLOSED A COPY OF DATA SOURCED FROM GLOBAL-RATES .COM IN SUPPORT OF ITS PLEA. THE ASSESSEE POINTED OUT THAT IT HAD CHARGED 8% ON THE LOAN GIVEN TO ZAO CLASSIC FOR 01.04.2007 TO 31.03.2008 WHICH WAS HIGHER THAN THE USD LIBOR RATE. THE ASSESSEE PLACED RELIANCE ON THE DECISION OF HON'BLE ITAT CHENNAI (2011) 46 SOT 2 (CHENNAI) (URO)/] 1 TAXMAN. COM 404 (SIVA INDUSTRIES & HOLDINGS LIMITED VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE - VI (4), CHENNAI) WHEREIN IT WAS HELD THAT WHERE LOAN IS GIVEN TO THE ASSOCIATED ENTERPRISES IN US DOLLARS THEN THE TRANSACTION WOULD HAVE TO BE LOOKED UPON THE APPLYING THE COMMERCIAL PRINCIPLES IN REGARD TO INTERNATIONAL TRANSACTION. IF THAT WAS SO, THEN THE DOMESTIC PRIME LENDING RATE WOULD HAVE NO APPLICABILITY AND THE INTERNATIONAL RATE FIXED BEING LIBOR RATE HAD TO BE CONSIDERED WHILE DETERMINING THE ARM'S LENGTH INTEREST M/S. M. K. SHAH EXPORTS LTD. ITA NOS.977 & 978/KOL/2017 ASSESSMENT YEARS: 2011-12 & 2012-13 PAGE | 8 RATE IN RESPECT OF THE TRANSACTION BETWEEN THE ASSESSEE AND THE ASSOCIATED ENTERPRISES. THE ASSESSEE CLAIMED THAT THE FACTS OF ITS CASE FAIRLY AND SQUARELY MATCH WITH THAT OF THE CASE DECIDED BY ITAT, CHENNAI AND CONSIDERING THE INTEREST RATE OF 8% CHARGED ON LOAN GIVEN TO SUBSIDIARY ZAO CLASSIC, THE PROVISIONS RELATING TO ARM'S LENGTH TRANSACTION HAVE NO APPLICABILITY. 7. THE TPO WAS OF THE VIEW THAT THE RATE OF INTEREST HAS BEEN CHARGED BY THE ASSESSEE ON THE LOAN TO ITS SUBSIDIARY KEEPING IN MIND THE ARMS LENGTH RATE WOULD BE 14.12% AND HE ACCORDINGLY SUGGESTED AN ADJUSTMENT OF RS.40,32,011/- AND THE SAID SUM SHOULD BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE BY WAY OF ADJUSTMENT TO ALP. CONSEQUENTLY A SUM OF RS.40,32,011/- WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 8. ON APPEAL BY THE ASSESSEE THE CIT(A) DELETED THE ADDITION MADE BY THE AO BY FOLLOWING THE DECISION OF ITAT CHENNAI IN THE CASE OF SIVA INDUSTRIES & HOLDINGS LIMITED VS. THE ASSISTANT COMMISSIONER OF INCOME TAX (SUPRA) . THE FOLLOWING WERE THE RELEVANT OBSERVATIONS OF CIT(A): '4.2. I HAVE CONSIDERED THE FACTS OF THE CASE. THE ASSESSEE HAD ADVANCED A LOAN IN FOREIGN CURRENCY TO ITS SUBSIDIARY ZAO CLASSIC, RUSSIA ON WHICH IT WAS CHARGED INTEREST AT THE RATE OF 8% P.A. THE TPO WAS OF THE VIEW THAT PRICE OF THE LOAN I.E. THE INTEREST CHARGED HAS TO BE WORKED OUT ON THE BASIS OF TAKING TWO PARTIES AS SEPARATE AND BENCH-MARKING THE PRICE OF THE LOAN ON THE BASIS OF WHAT AN INDEPENDENT THIRD PARTY WOULD CHARGE FROM ZAO CLASSIC, RUSSIA BASED ON ITS ANALYSIS OF RISK ASSOCIATED WITH THE LOAN. THE ASSESSEE STATED IN REPLY TO SHOW CAUSE NOTICE ISSUED BY THE TPO, THAT FOREIGN CURRENCY LOANS ARE GIVEN BY BANKS BEARING UBOR BASED RATE AS A GLOBAL PRACTICE. THE AVERAGE OF LIBOR BASED RATE FOR THE YEAR UNDER CONSIDERATION WAS 4.68%. THUS THE RATE OF 8% CHARGED BY THE ASSESSEE WAS HIGHER THAN THE LIBOR RATE. THE ASSESSEE ALSO RELIED UPON A NUMBER OF DECISIONS, IN PARTICULAR THE DECISION OF ITAT, CHENNAI IN THE CASE OF SIVA INDUSTRIES AND HOLDINGS LTD VS ACIT, CENTRAL CIRCLE-6(1) CHENNAI 46 SOT 112. IN THE APPELLATE PROCEEDINGS THE ASSESSEE HAS CITED SOME MORE DECISIONS SUCH AS FOUR SOFT LTD VS DCIT IN ITA NO. 1495/HYD 12010, COTTON NATURAL (I) PVT LTD. VS DCIT IN ITA NO. 5855/DE1/2012. IN THE CASE OF SIVA INDUSTRIES AND HOLDINGS LTD. (SUPRA), IT HAS BEEN HELD BY THE HON'BLE TRIBUNAL THAT ONCE THE TRANSACTION IS BETWEEN THE ASSESSEE AND THE AES IS IN FOREIGN CURRENCY, THE TRANSACTION WOULD HAVE TO BE LOOKED UPON BY APPLYING COMMERCIAL PRINCIPLE IN REGARD TO INTERNATIONAL TRANSACTION. IF THIS IS SO, THEN THE DOMESTIC PRIME LENDING RATE WOULD HAVE NO APPLICABILITY AND THE INTERNATIONAL RATE FIXED BEING LIBOR WOULD COME INTO PLAY. SAME VIEW WAS TAKEN BY TRIBUNAL IN THE CASE OF FOUR SOFT LTD (SUPRA) AND SOME OTHER CASES CITED BY THE ASSESSEE. FURTHER, IT HAS BEEN HELD IN THE DECISION IN THE CASE OF COTTON NATURAL (I) PVT LTD. (SUPRA), THAT FINANCIAL POSITION AND CREDIT RATING OF THE SUBSIDIARY WOULD BE BROADLY SAME AS THE HOLDING COMPANY AND LIBOR SHOULD BE TAKEN AS BENCH- MARK WITHOUT GOING INTO ASPECTS LIKE FINANCIAL HEALTH OF SUBSIDIARY. IN ONE OF THE CITED CASES, VIZ. AURIONPRO SOLUTION LTD. VS ADDL. CIT IN ITA NO.7872/MUM/2011, HON'BLE TRIBUNAL HAS OBSERVED THAT APPROPRIATE RATE WOULD BE LIBOR PLUS 2%. IN THE ASSESSEE'S CASE, THE TPO HAS NOT COUNTERED THE DECISION IN THE CASE OF SIVA INDUSTRIES AND HOLDINGS LTD (SUPRA) CITED BY THE ASSESSEE BEFORE HIM, NOR CITED ANY AUTHORITY IN SUPPORT OF HIS VIEW. THE RATIO GIVEN BY THE HON'BLE TRIBUNAL IN THE CASES CITED BY THE ASSESSEE IS, THAT IN THE FOREIGN CURRENCY LENDING, RATE OF INTEREST TO BE ADOPTED IS TO BE BASED ON LIBOR AND AT THE MOST LIBOR PLUS 2%. AS PER DOCUMENTS GIVEN BY THE ASSESSEE, THE AVERAGE LLBOR RATE FOR THE PREVIOUS YEAR WAS 4.68%. EVEN IF A MARK UP OF 2% IS GIVEN, THE RATE WOULD BE 6.68% WHEREAS THE ASSESSEE HAS CHARGED 8% ON THE LOAN GIVEN TO ITS AES. IT IS ALSO NOT IN DISPUTE THAT THE COST OF FUNDS IN THE HANDS OF THE ASSESSEE IS LOWER THAN 8% CHARGED FROM THE AE. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWING THE RATIO GIVEN BY THE VARIOUS BENCHES OF HON'BLE TRIBUNAL, THE ADJUSTMENT PRICE OF RS.40,32,011/- IS DELETED.' 9. AGGRIEVED BY THE ORDER OF CIT(A) THE REVENUE HAS RAISED GROUND NO.1 BEFORE THE TRIBUNAL. 10. AFTER HEARING THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE WE ARE OF THE VIEW THAT THERE IS NO MERIT IN GROUND NO.1 RAISED BY THE REVENUE. IT HAS BEEN CONSISTENTLY HELD IN SEVERAL DECISIONS BY THE TRIBUNAL THAT WHEREVER THE TRANSACTION OF LOAN BETWEEN THE ASSOCIATED ENTERPRISES IS IN FOREIGN CURRENCY THEN THE TRANSACTION WOULD HAVE TO BE LOOKED UPON BY APPLYING THE COMMERCIAL PRINCIPLES IN REGARD TO INTERNATIONAL TRANSACTION. THEREFORE THE DOMESTIC PRIME LENDING RATE WOULD HAVE NO APPLICABILITY AND THE INTERNATIONAL RATE LIBOR WOULD COME INTO PLAY. IT HAS THEREFORE BEEN HELD THAT LIBOR RATE HAS TO BE CONSIDERED WHILE DETERMINING THE ARMS LENGTH RATE OF INTEREST IN RESPECT OF TRANSACTIONS OF LOAN IN FOREIGN CURRENCY BETWEEN THE ASSOCIATED ENTERPRISES. THIS VIEW HAS ALSO BEEN ACCEPTED BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS COTTON NATURALS (I) LTD . 276 CTR 445 (DELHI) AND BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF TATA AUTO COMP SYSTEM M/S. M. K. SHAH EXPORTS LTD. ITA NOS.977 & 978/KOL/2017 ASSESSMENT YEARS: 2011-12 & 2012-13 PAGE | 9 LTD APPROVING THE DECISION OF ITAT IN THE CASE OF TATA AUTO COMP VOL.52 SOT 48 (MUM). IN VIEW OF THE ABOVE SETTLED LEGAL POSITION WE FIND NO MERITS IN GROUND NO.1 AND DISMISS THE SAME. 14.RESPECTFULLY FOLLOWING THE ABOVE BINDING PRECEDENT, WE UPHOLD THE CONTENTION OF THE ASSESSEE, SINCE THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE COORDINATE BENCH IN ITA NO.2149/KOL/2014 FOR ASSESSMENT YEAR 2008-09 (SUPRA) AND THERE IS NO CHANGE IN FACTS AND LAW AND THE REVENUE IS UNABLE TO PRODUCE ANY MATERIAL TO CONTROVERT THE AFORESAID FINDINGS AND THE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE. WE FIND NO REASON TO INTERFERE IN THE SAID ORDER OF THE LD. CIT(A) AND THE SAME IS HEREBY UPHELD. THEREFORE, THIS GROUND OF APPEAL OF REVENUE IS DISMISSED. 15. THE NEXT GROUND NOS. 6 & 7 RAISED BY THE REVENUE IN ITA NO.977/KOL/2017, FOR ASSESSMENT YEAR 2011-12 AND GROUND NOS.9 & 10 RAISED BY THE REVENUE IN ITA NO.978/KOL/2017, FOR ASSESSMENT YEAR 2012-13, RELATE TO DISALLOWANCE MADE U/S 14A R.W.R. 8D OF THE I.T. RULES. 16. AT THE OUTSET ITSELF, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ISSUE UNDER CONSIDERATION IN RESPECT OF DISALLOWANCE U/S 14A R.W.R. 8D IS FULLY COVERED BY THE JUDGMENT OF THE HONBLE ITAT IN THE CASE OF DCIT VS. ASHIS JHUNJHUNWALA IN ITA NO.1809/KOL/2012 FOR ASSESSMENT YEAR 2009-10. BASED ON THE JUDGMENT OF THE COORDINATE BENCH OF ITAT, KOLKATA, THE LD. CIT(A) HELD AS FOLLOWS: 1.I HAVE CAREFULLY CONSIDERED THE ACTION OF THE LD. ASSESSING OFFICER IN MAKING AN ADDITION OF RS.70,301/- FURTHER AND IN ADDITION TO THE SUOMOTU DISALLOWANCE MADE BY THE ASSESSEE-COMPANY. THERE APPEARS TO BE NO DISPUTE THAT THERE WAS NO ADDITIONAL EXPENDITURE INCURRED BY THE ASSESSEE IN ORDER TO EARN THE TAX FREE INCOME. I FIND THAT THE LD. ASSESSING OFFICER HAS NOT MENTIONED ANY COGENT REASONS IN HIS ORDER WHILE MAKING THE ASSESSMENT OF THE ASSESSEE AND ROUTINELY APPLIED THE PROVISIONS OF SECTION 14A READ WITH RULE 8D. 2.I FIND THAT THE CASE OF THE ASSESSEE IS FULLY COVERED BY THE DECISION OF THE HONBLE ITAT A BENCH, KOLKATA IN ITA NO.1809/KOL/2012 FOR ASSESSMENT YEAR 2009-10 IN THE CASE OF DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE XXVII, KOLKATA VS. ASHISH JHUNJHUNWALA. IN VIEW OF NON-SPEAKING ORDER, THE DISALLOWANCE U/S 14A IS RESTRICTED TO RS.22,980/- THAT IS THE AMOUNT OF DISALLOWANCE MADE BY THE ASSESSEE COMPANY IN ITS RETURN OF INCOME. THE GROUND OF APPEAL IS THEREFORE ADJUDICATED ALL ALLOWED IN FAVOUR OF THE ASSESSEE-ASSESSEE. M/S. M. K. SHAH EXPORTS LTD. ITA NOS.977 & 978/KOL/2017 ASSESSMENT YEARS: 2011-12 & 2012-13 PAGE | 10 17. AS THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE COORDINATE BENCH IN ITA NO.1809/KOL/2012 FOR ASSESSMENT YEAR 2009-10 (SUPRA) AND THERE IS NO CHANGE IN FACTS AND LAW AND THE REVENUE IS UNABLE TO PRODUCE ANY MATERIAL TO CONTROVERT THE AFORESAID FINDINGS AND THE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE TRIBUNAL ON IDENTICAL ISSUES.WE FIND NO REASON TO INTERFERE IN THE SAID ORDER OF THE LD. CIT(A) AND THE SAME IS HEREBY UPHELD. THEREFORE, THIS GROUND OF APPEAL OF REVENUE IS DISMISSED. 18. GROUND NO.8 RAISED BY THE REVENUE IN ITA NO.978/KOL/2017 FOR ASSESSMENT YEAR 2012-13 RELATES TO ADDITION OF RS.16,26,43,864/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DELAYED DEPOSIT OF EMPLOYEES CONTRIBUTION TOWARD PF WITHOUT CONSIDERING SECTION 2(24)(X) R.W. SECTION 36(1)(VA). 19. AT THE OUTSET ITSELF, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THIS ISSUE IS ALSO NO MORE RES INTEGRA AND IT HAS ALREADY DECIDED IN FAVOUR OF THE ASSESSEE BY SEVERAL JUDGMENTS OF HIGH COURTS AND ITAT. THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF ITO VS. JAIPUR VIDYUT VITRAN NIGAM LTD. IN INCOME TAX APPEAL NO.278/2011AND THE JUDGMENT OF THE HONBLE KOLKATA HIGH COURT IN THE CASE OF CIT VS. VIJAY SHREE LIMITED ITAT NO.245 OF 2011, GA NO.2607 OF 2011, DECIDED ON 06.09.2011, IN RELATION TO THE ASSESSMENT YEAR 2006- 07. THEREFORE, BASED ON THESE JUDGMENTS, THE LD. CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE, AS THE ISSUE INVOLVED IS ABOUT THE EMPLOYEES` CONTRIBUTION TOWARDS PF, PAID WITHIN DUE DATE OF SUBMISSION OF RETURN OF INCOME FILED BY THE ASSESSEE U/S 139(1) OF THE ACT. THEREFORE, IT WAS HELD THAT SINCE THE PAYMENT HAS BEEN MADE BY THE ASSESSEE WITHIN THE DUE DATE OF FURNISHING RETURN OF INCOME U/S 139(1) OF THE ACT. THEREFORE, NO DISALLOWANCE IS ATTRACTED U/S 36(1)(VA) R.W.S. 2(24)(X) OF THE ACT. 20. AS THE ISSUE IS SQUARELY COVERED BY THE VARIOUS JUDGMENTS OF HONBLE HIGH COURTS AND TRIBUNALS IN ASSESSEES CASE WHEREIN IT WAS HELD THAT IF THE ASSESSEE PAID THE EMPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUND WITHIN THE DUE DATE OF FILING RETURN OF INCOME U/S 139(1) OF THE ACT. THEN THERE SHOULD NOT BE ANY M/S. M. K. SHAH EXPORTS LTD. ITA NOS.977 & 978/KOL/2017 ASSESSMENT YEARS: 2011-12 & 2012-13 PAGE | 11 DISALLOWANCE. SINCE THE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE BY FOLLOWING THE RATIO LAID DOWN IN THE JUDGMENTS OF HON`BLE CALCUTTA HIGH COURT,IN THE CASE OF CIT VS. VIJAY SHREE LIMITED ITAT NO.245 OF 2011, GA NO.2607 OF 2011, DECIDED ON 06.09.2011, THEREFORE, RESPECTFULLY FOLLOWING THE JUDGMENT OF THE JURISDICTIONAL KOLKATA HIGH COURT IN THE CASE OF CIT VS. VIJAY SHREE LTD. IN ITA NO.245 OF 2011 DATED 06.09.2011, WE ALLOW THE CLAIM OF THE ASSESSEE AND DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A), HIS ORDER ON THIS ISSUE IS HEREBY UPHELD AND THE GROUNDS RAISED BY THE REVENUE IS DISMISSED. 21. IN THE RESULT, THE APPEALS FILED BY THE REVENUE IN ITA NO.977/KOL/2017 AND ITA NO.978/KOL/2017 ARE DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 17.08.2018. SD/- ( S. S. GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; / DATE: 17/08/2018 (RS, SR.PS) / COPY OF THE ORDER FORWARDED TO : TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/D.D.O, I.T.A.T, KOLKATA BENCHES, KOLKATA . 1. /THE ASSESSEE- A.C.I.T, CIRCLE-4(1), KOLKATA 2. / THE RESPONDENT-M/S. M. K. SHAH EXPORTS LTD. 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, KOLKATA 6. [ / GUARD FILE.