Coca Cola India Pvt. Ltd., Pune V. DCIT, Pune

MA 150/PUN/2010

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 1291 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 3 month(s) 23 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-12-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 06-07-2012
• Assessment Year: misc
• Appeal Filed On: 13-08-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S E DASTUR; R MURLIDHAR
• Keywords: Capital asset; Depreciation; Business expenditure; Question of law; Revenue expenditure; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI R.K. PANDA ACCOUNTANT MEMBER MA NO. 156 /PN/2010 ARISING OUT OF ITA NOS.1257, 1269/PN/2003) (ASST.YEAR : 1997-98) M/S. COCA COLA INDIA PVT. LTD., PLOT NO.1107, VILLAGE PIRANGUT, TAL : MULSHI, PUNE PAN NO. AAACB8573G .. APPLICANT VS. DCIT, CIRCLE-1(1), PUNE. .. RESPONDENT M.A. NO.119/PN/2010 (ARISING OUT OF ITA NO.1257/PN/2003 (ASST. YEAR 1997-98) DCIT, CIRCLE-1(1), PUNE. .. APPLICANT VS. M/S. COCA COLA INDIA PVT. LTD., PLOT NO.1107, VILLAGE PIRANGUT, TAL : MULSHI, PUNE PAN NO. AAACB8573G .. RESPONDENT MA NO. 150 /PN/2010 ARISING OUT OF ITA NOS.1258/PN/2003, 182 & 610/PN/2 004, 256 AND 144/PN/2007, 1103/PN/2005 AND 896/PN/2008) (ASST.YEARS : 1998-99 TO 2004-05) M/S. COCA COLA INDIA PVT. LTD., PLOT NO.1107, VILLAGE PIRANGUT, TAL : MULSHI, PUNE PAN NO. AAACB8573G .. APPLICANT VS. DCIT, CIRCLE-1(1), PUNE. .. RESPONDENT ASSESSEE BY : SHRI S.E.DASTUR AND SHRI R. MURLIDHAR REVENUE BY : SHRI SUNIL GANOO DATE OF HEARING : 11-09-2013 DATE OF PRONOUNCEMENT : 06-12-2013 2 ORDER PER R.K.PANDA, AM : MA NO.119/PN/2010 FILED BY THE REVENUE AND M.A. NO.156/PN/2010 FILED BY THE ASSESSEE ARE DIRECTED A GAINST THE ORDER DATED 30-06-2008 OF THE TRIBUNAL FOR THE A.Y. 1997-98. M .A.NO.150/PN/2010 FILED BY THE ASSESSEE IS DIRECTED AGAINST THE CONSO LIDATED ORDER DATED 31-03- 2010 OF THE TRIBUNAL FOR A.Y. 1998-99 TO 2004-05. FOR THE SAKE OF CONVENIENCE ALL THE MISCELLANEOUS APPLICATIONS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. MA NO.156/PN/2010 (BY ASSESSEE) (A.Y. 1997-98): 2. THE ASSESSEE THROUGH THIS MISCELLANEOUS APPLICAT ION REQUESTS THE TRIBUNAL TO RECTIFY CERTAIN APPARENT MISTAKES WHICH HAVE CREPT IN THE ORDER OF THE TRIBUNAL REQUIRING RECTIFICATION U/S.254(2) OF THE I.T. ACT. 3. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO TH E MISCELLANEOUS APPLICATION SUBMITTED THAT THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HAS DISALLOWED AN AMOUNT OF RS.17,99,74,343/- ON AC COUNT OF MARKETING EXPENSES INCURRED BY THE ASSESSEE FOR VARIOUS REASO NS WHICH WAS RESTRICTED TO RS.10 CRORES BY THE LD.CIT(A). WHILE SUSTAINING THE ABOVE ADDITION THE CIT(A) AT PARA 7.17 OF HIS ORDER HAS GIVEN THE BREA K- UP OF THE SAME WHICH ARE AS UNDER : 7.17 IN THE LIGHT OF THESE FACTS, THE DISALLOWANCES MA DE UNDER THE HEAD MARKETING EXPENSES BY THE ASSESSING OFFICER IS SUSTAINED A T RS.10 CRORES IN THIS PARTICULAR ASSESSMENT YEAR AS THE APPELLANT WAS ENGAG ED IN THE MANUFACTURE OF BEVERAGES IN AHMEDABAD AND PUNE AS WEL L. THE ABOVE DISALLOWANCE SUSTAINED AT RS.10 CRORES IS MADE UP OF FOUR COMPONENTS VIZ- (I) RS.4,42,81,637/- BECAUSE OF EXTERNAL INQUIRIES AND AS ADMITTED BY THE APPELLANT IN VIEW OF ITS INABILITY TO GIVE EVIDENCE IN SUPPORT OF ITS CLAIM. 3 (II) RS.2 CRORES ADHOC DISALLOWANCE AS THE APPELLANT HAS NOT BEEN ABLE TO SUBMIT FULL AND COMPLETE DETAILS DURING THE ASSESSMENT PROCEEDINGS AND APPELLATE PROCEEDINGS. (III) ON ACCOUNT OF CAPITAL EXPENDITURE IN THE FORM OF PRODUCTION OF T.V. CINEMA, RADIO AND POSTERS DEVELOPMENT AND (IV) DISALLOWANCE ON ACCOUNT OF WHOLE EXPENDITURE ON MARKETING EXPENSES BEING PARTLY TOWARDS BUILDING AND EQUITY AND GOODWILL OF TCCC BRAND ETC.. 3.1 HE SUBMITTED THAT THE TRIBUNAL WHILE DECIDING T HE ISSUE AT PARA 34 OF THE ORDER HAS MENTIONED AS UNDER : 34. THE CIT(A) REDUCED THE ABOVE ADDITION OF RS.17, 99,74,343/- TO RS.10,00,00,000/- COMPUTED AS UNDER : PARTICULARS AO CIT(A) DIFF (11 PARTIES) 2,12,04,099 31,19,919 NO REPLY (14 PARTIES) 3,90,28,917 CASHER YEAR (7 PARTIES) 9,97,41,327 4,11,61,718 ADHOC 2,00,00,000 2,00,00,000 CAPITAL EXPENDITURE -- 3,37,18,863 (BALANCING FIGURE) 17,99,74,343 10,00,00,000 REFERRING TO THE ABOVE, HE SUBMITTED THAT THE FIGUR E OF RS.3,37,18,863 WHICH IS THE BALANCING FIGURE IS WRONG AND THE CORR ECT FIGURE ON ACCOUNT OF DISALLOWANCE OF CAPITAL EXPENDITURE WOULD BE RS.3,5 7,18,363/-. 3.2 REFERRING TO PARA 36.9 OF THE ORDER OF THE TRIB UNAL, THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE FOLLOWING OBSERVATION OF THE TRIBUNAL : 36.9 IT APPEARS THAT THE CIT(A) FIRST DECIDED THE Q UANTUM OF ADDITION THAT HE WANTED TO SUSTAIN AND THEN HE PROCEE DED TO GIVE ITS BREAK- UP. IT WAS FOR THIS REASON THAT THE LAST COMPONENT OF RS.10,00,00,000 THAT HE DECIDED TO SUSTAIN WAS A BALANCING FIGURE WORKED OUT AT RS.3,37,18,000/-. THE REASON GIVEN BY THE CIT(A) FOR THE LAST COMPONENT WHICH WAS A BALANCING FIGURE WAS THAT IT REPRESENTED THE CAPITAL EXPENDITURE IN THE FORM OF PRODUCTION OF TV, CINEMA, RADIO AND POSTERS DEVELO PMENT. IN OUR OPINION, THE REASON GIVEN BY THE CIT(A) IS TOO GENERA L AND VAGUE AND IS THEREFORE UNSUSTAINABLE. ONE DOES NOT KNOW WHAT SPECIF IC ITEMS OF EXPENSES THE CIT(A) WAS TALKING ABOUT; WHICH ADVERTISEM ENTS ON T.V./CINEMA/RADIO HE HAD IN MIND AND, WHAT WAS THE B ASIS FOR ARRIVING AT THE BALANCING FIGURE OF RS.3,37,18,000/- . . . .. 4 3.3 REFERRING TO PARA 37 OF THE ORDER OF THE TRIBUN AL, THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE FOLLOWING : TO CONCLUDE, THE ADDITION OF RS.10,00,00,000 SUSTAINE D BY THE CIT(A), IN RESPECT OF MARKETING EXPENSES IS REDUCED TO RS.4,42,81 ,637/- (RS.4,11,61,718 + RS.31,19,319). IN OTHER WORDS, THE A SSESSEE GETS RELIEF OF RS.5,37,18,863/- (RS.2,00,00,000 + RS.3,37,18,863). . . . HE ACCORDINGLY SUBMITTED THAT THE BALANCING FIGURE OF RS.3,37,18,863/- AS MENTIONED BY THE TRIBUNAL SHOULD BE SUBSTITUTED TO RS.3,57,18,363/- WHICH IS THE BALANCING FIGURE AND THE CORRECT FIGURE. SI NCE THIS IS A MISTAKE APPARENT FROM RECORD THE LD. COUNSEL FOR THE ASSESS EE SUBMITTED THAT THE ORDER OF THE TRIBUNAL TO THIS EXTENT BE MODIFIED. 4. THE LD. SPECIAL COUNSEL FOR THE REVENUE WHILE OP POSING THE MISCELLANEOUS APPLICATION SUPPORTED THE ORDER OF TH E TRIBUNAL. 5. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES. WE FIND THE LD.CIT(A) WHILE SUSTAINING THE DISALLOWANC E OF RS.10 CRORES OUT OF DISALLOWANCE OF RS.17,99,74,343/- MADE UNDER THE HE AD MARKETING EXPENSES BY THE ASSESSING OFFICER HAD CATEGORISED THE DISALL OWANCE ON ACCOUNT OF 4 ITEMS. WHILE HE HAD DISALLOWED AN AMOUNT OF RS.4,4 2,81,637/- AND RS.2,00,00,000/- UNDER 2 SPECIFIC HEADS HE DID NOT GIVE THE BIFURCATION FOR THE BALANCE AMOUNT UNDER THE REMAINING 2 HEADS BEIN G CAPITAL EXPENDITURE IN THE FORM OF PRODUCTION TV, CINEMA, RADIO AND POS TERS DEVELOPMENT AND DISALLOWANCE ON ACCOUNT OF WHOLE EXPENDITURE ON MAR KETING EXPENSES AND BUILDING EQUITY AND GOODWILL OF TCCL BRANDS ETC. W E FIND THE TRIBUNAL WHILE DECIDING THE ISSUE AT PARA 34 OF THE ORDER HA S TAKEN THE BALANCING FIGURE OF RS.3,37,18,863/- AS AGAINST RS.3,57,18,36 3/-. THUS, THERE IS AN APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL IN TH E SHAPE OF ARITHMETICAL 5 INACCURACY. WE, THEREFORE, DIRECT THAT THE FIGURE OF RS.3,37,18,863/- APPEARING AT PARA 34 TO 37 OF THE ORDER BE READ AS RS.3,57,18,363/-. FURTHER, PARA 37 OF THE ORDER BE READ AS UNDER : TO CONCLUDE, THE ADDITION OF RS.10,00,00,000 SUSTAINE D BY THE CIT(A), IN RESPECT OF MARKETING EXPENSES IS REDUCED TO RS.4,42,81 ,637/- (RS.4,11,61,718 + RS.31,19,319). IN OTHER WORDS, THE A SSESSEE GETS RELIEF OF RS.5,57,18,363/- (RS.2,00,00,000 + RS.3,57,18,363). . . . THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS ACCORDINGLY ALLOWED. M.A.NO.119/PN/2010 (BY REVENUE) (A.Y. 1997-98): 6. THE REVENUE THROUGH THIS MISCELLANEOUS APPLICATI ON REQUESTS THE TRIBUNAL TO RECTIFY CERTAIN MISTAKES WHICH HAS CREP T IN THE ORDER OF THE TRIBUNAL. 6.1 THE LD. SPECIAL COUNSEL FOR THE REVENUE DREW TH E ATTENTION OF THE BENCH TO THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE WHICH READS AS UNDER : IN ITA NO. 1257/PN/03, THE HON'BLE ITAT DECIDED THE APPEAL A S PARTLY ALLOWED IN FAVOUR OF THE ASSESSEE. THE MISC. APPLICATION FILED IS IN REGARD TO DISALLOWAN CE OF MARKETING EXPENSES. THE ASSESSING OFFICER IN HIS ORDER HAD DISA LLOWED IN TOTAL THE FOLLOWING EXPENSES UNDER THE HEAD MARKETING EXPENSES: - 1. DIFFERENCE ON ACCOUNT OF EXPENSES I.E. EXCESS RS.2,12,04,099/- AMOUNT SHOWN BY THE ASSESSEE AS AGAINST DETAILS RECEIVED FROM PARTIES. 2. EXPENSES PERTAINING TO EARLIER YEARS RS. 9,97,41, 327/- 3. EXPENSES IN RESPECT OF WHICH LETTERS WERE RETURNED BACK RS. 3,90,28,970/- 4. ADHOC DISALLOWANCES RS. 2,00,00,000/- ------------------------- TOTAL: RS. 17,99,74,343/- 6 THE ASSESSEE FILED AN APPEAL AGAINST THE ABOVE SAID D ISALLOWANCES TO CIT(A). THE CIT(A) IN HIS ORDER AT PARA 7.17 CONFIRMED THE DISALLOWA NCE OF RS.10,00,00,000/- AND GAVE A RELIEF OF RS.7,99,74,343/- TO THE ASSESSEE. AN ALLOCATION OF ADDITIONS ON ACCOUNT OF DISALLOWED EXPENSES AS CONFIRMED BY THE CIT( A) IS AS BELOW: - SR. NO. AMOUNT (IN RS.) REASONS OF DISALLOWANCE I) 44,28,16,371/ - BECAUSE OF EXTERNAL ENQUIRIES AND AS ADMITTED BY THE APPELLANT IN VIEW OF ITS INABILITY TO GIVE EVIDENCE S IN SUPPORT OF ITS CLAIM. II) 2,00,00,000/ - ADHOC DISALLOWANCE AS THE APPELLANT HAS NOT BEEN ABLE TO SUBMIT FULL AND COMPLETE DETAILS DURING THE ASSESSMENT PROCEEDINGS AND APPELLATE PROCEEDINGS. III) ON ACCOUNT OF CAPITAL EXPENDITURE IN FORM OF PRODUCTI ON OF TV, CINEMA, RADIO AND POSTERS DEVELOPMENT AND. IV) DISALLOWANCE ON ACCOUNT OF WHOLE EXPENDITURE ON MARKETING EXPENSES BEING PARTLY TOWARDS BUILDING THE EQUITY AND GOODWILL OF TCCC BRANDS ETC. 10,00,00,000/ - TOTAL WHILE CONFIRMING DISALLOWANCE OF ABOVE EXPENSES THE CIT(A) IN HIS ORDER AT PARA 7.3 STATED THAT THE ASSESSEE HAS ADMITTED SEVERAL DIFFER ENCES BETWEEN THE CLAIMS OF MARKETING EXPENSES BY THE ASSESSEE AND FOUND NOT VERIFIABLE BY A.O. THESE ADMISSIONS OF ASSESSEE ARE CONTAINED IN INFORMA TION SUPPLIED BY THE ASSESSEE AVAILABLE AS ANNEXURE-2 TO THE ORDER OF THE CI T(A) DATED 14.08.2003. THE ACTUAL FIGURES OF EXPENSES FIT FOR DISALLOWANCE ADMITTED BY THE ASSESSEE WERE: I) EXPENSES OF PRIOR PERIOD RS. 5,62,32,085 /- II) DIFFERENCES IN EXPENSES CLAIMED AND VERIFIED R S. 65,64,134/- THE HON'BLE CIT(A) WHILE CONFIRMING THE DISALLOWANCE OF RS.10,00,00,000/- HAS NOWHERE IN THE ORDER GIVEN A COMPLETE BIFURCA TION OF PRIOR PERIOD EXPENDITURES AND DIFFERENCE ON ACCOUNT OF EXPENDI TURES CLAIMED BY THE ASSESSEE. ON VERIFICATION OF THE ADMISSIONS MENTIONED IN ANNEXURE-2 FORMING PART OF THE SUBMISSIONS MADE BY THE ASSESSEE COMPANY AND THE OR DER OF THE CIT(A) THE DISALLOWANCES SHOULD HAVE BEEN OF RS.5,62,32,085/- A S 'PRIOR PERIOD EXPENDITURES' AND RS.65,64,134/- OUT OF THE 'DIFFEREN CES ON ACCOUNT OF EXPENDITURES CLAIMED AND VERIFIED'. THE DEPARTMENT HAD FILED AN APPEAL AGAINST THIS TO THE HON'BLE ITAT. THE HON'BLE ITAT IN ITS ORDER AT PARA 36.2 HAS DISM ISSED THE GROUND OF DEPARTMENT CITING THAT THE ID. D.R. DID NOT MAKE AN Y PARTICULAR SUBMISSION TO SUPPORT THE FIGURE OF RS.5,76,75,624/- IN PLACE RS.4, 11,61,718/-. THE HON'BLE ITAT HAS NOT EXAMINED THE ANNEXURE-2 SUBMITTED BY THE ASSESS EE COMPANY. THE FIGURES AS MENTIONED IN THE ANNEXURE-2 SHOU LD HAVE BEEN CONFIRMED BY THE HONBLE ITAT INSTEAD OF MERELY REJECTING THE MO ST OPTIMUM FIGURE QUOTED BY THE D.R. WHILE ARGUING ITS CASE. EVEN IF DEPARTMENT COULD NOT SUPPORT ITS CLAIM, THE ASSESSEE ALSO NEVER MADE A CASE THAT FIGURE OF EXPENSE S TO BE DISALLOWED AS EXPENSES OF EARLIER YEAR WAS RS.4,11,71,718/-. THE ANNEXURE-2 OF THE CIT(A)'S ORDER DATED 14.08.20 03 IS REGARDING THE STATEMENT OF MARKETING EXPENSES TO BE DISALLOWED, SUB MITTED BY THE ASSESSEE TO CIT(A). THE STATEMENT HAS THE DETAILS OF (I) AMOUNTS DE BITED TO P&L AS PER RETURN, (II) AS PER INQUIRIES MADE BY THE ASSESSING OFFICER & (I II) AMOUNTS DISALLOWABLE AS PER RECORD SUBMITTED BY THE ASSESSEE WITH THE CIT(A) OF THE 15 P ARTIES. AS PER THE RECORDS SUBMITTED BY THE ASSESSEE THE TOTAL OF AMOUNTS IN THE 'DIFFERENCE COLUMN' 7 ARE RS.65,64,134/- & AMOUNT IN THE 'PRIOR YEAR COLUM N' IS RS.5,62,32,085/-. THE ADMITTED AMOUNTS SHOULD HAVE BEEN CONFIRMED BY THE HON'B LE ITAT INSTEAD OF UNSUBSTANTIATED FIGURES OF RS.4,41,61,718/- AND RS.31 ,19,919/- AS 'EXPENSES OF PRIOR PERIOD' AND 'DIFFERENCE IN EXPENSES CLAIMED AND VE RIFIED' RESPECTIVELY. TO THIS EXTENT THE FINDINGS OF THE HON'BLE ITAT ARE AT VARIANCE WITH THE RECORD BEFORE IT AND THUS SUFFER FROM AN ERROR APPARENT FROM RECORD. IN VIEW OF THE ABOVE IT IS REQUESTED FOR THE RECTIFICAT ION OF THE HON'BLE ITAT'S ORDER ITA NO. 1257/PN/03 ORDER DATED 30.06.2008 IN T HE LIGHT OF THE ABOVE STATED FACTS. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE TRIB UNAL BE RECALLED OR RECTIFICATION MAY BE MADE TO THE ORDER PASSED BY TH E TRIBUNAL IN ITA NO.1257/PN/2003. 7. THE LD. SENIOR COUNSEL FOR THE ASSESSEE ON THE O THER HAND STRONGLY OPPOSED THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE. HE SUBMITTED THAT THE MISTAKE IN THE INSTANT CASE HAS BEEN COMMI TTED BY THE CIT(A) IN HIS ORDER DATED 14-03-2003 AND THE ORDER OF THE TRIBUNA L WAS PASSED ON 13-06- 2008. HE SUBMITTED THAT ANY MISTAKE APPARENT FROM RECORD CAN BE RECTIFIED WITHIN A PERIOD OF 4 YEARS U/S.154 OF THE I.T. ACT. HOWEVER, THE REVENUE INSTEAD OF FILING RECTIFICATION PETITION BEFORE THE LD.CIT(A) HAS FILED APPLICATION U/S.254(2) BEFORE THE TRIBUNAL ON 02-12 -2010. REFERRING TO THE ORDER OF THE TRIBUNAL AT PARA 36.2 THE LD. SENIOR C OUNSEL FOR THE ASSESSEE SUBMITTED THAT THE TRIBUNAL HAD GIVEN A CATEGORICAL OBSERVATION THAT DURING THE HEARING THE DEPARTMENTAL REPRESENTATIVE DID NOT MAKE ANY PARTICULAR SUBMISSION TO SUPPORT THE FIGURE OF RS.5,76,75,624/ - IN PLACE RS.4,11,61,718/- FOR WHICH THE TRIBUNAL DISMISSED T HE APPEAL FILED BY THE REVENUE. HE SUBMITTED THAT WHEN THE MATTER WAS NOT ARGUED BEFORE THE TRIBUNAL AND WHEN NO AFFIDAVIT HAS BEEN FILED BY TH E DEPARTMENT THAT THEY HAD ARGUED AND THEIR ARGUMENT WAS NOT CONSIDERED BY THE TRIBUNAL, THEN IT IS NOT FAIR ON THE PART OF THE TRIBUNAL TO ENTERTAI N THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE. HE SUBMITTED THA T ORIGINALLY THE TRIBUNAL 8 PASSED THE ORDER ON 05-10-2005. SUBSEQUENTLY, A MI SCELLANEOUS APPLICATION WAS FILED BY THE ASSESSEE AS WELL AS TH E REVENUE IN RELATION TO THE ORDER OF THE TRIBUNAL DATED 05-10-2005 WHICH WE RE DISPOSED OF BY THE TRIBUNAL IN ITS ORDER DATED 07-07-2006 AND 05-07-20 07 RESPECTIVELY. HE SUBMITTED THAT THE ASSESSEE THEN FILED A WRIT PETIT ION BEFORE THE HONBLE BOMBAY HIGH COURT CHALLENGING THE ORDER OF THE TRIB UNAL DATED 05-10- 2005 AND 07-07-2006 AND THE HONBLE HIGH COURT REST ORED THE MATTER TO THE TRIBUNAL WITH CERTAIN DIRECTIONS. THE TRIBUNAL THE RE AFTER PASSED THE ORDER ON 30-06-2008. HE SUBMITTED THAT WHEN THERE IS NO APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL AND THE YEAR OF ALLOWABILITY WAS NEVER ARGUED BEFORE THE ITAT NOW THIS MISCELLANEOUS APPLICATION FILED B Y THE REVENUE BEING DEVOID OF MERIT HAS TO BE DISMISSED. 7.1 THE LD. SENIOR COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE REVENUE HAS FILED THE FIRST MISCELLANEOUS APPLICATI ON ON 22-04-2010 REQUESTING THE TRIBUNAL TO REVIEW THE ORDER. SUBSE QUENTLY, THEY FILED THE PRESENT MISCELLANEOUS APPLICATION STATING THAT SINC E THERE WAS A TYPOGRAPHICAL ERROR MENTIONING REVIEW AS AGAINST THE MISTAKE APPARENT FROM RECORD, THEREFORE, THIS APPLICATION IS BEING F ILED. HE SUBMITTED THAT THE TRUTH HAS COME OUT AND THE REVENUE IN THE GARB OF T HIS MISCELLANEOUS APPLICATION WANTS THE TRIBUNAL TO REVIEW ITS OWN OR DER WHICH IS NOT PERMISSIBLE IN LAW. HE ACCORDINGLY SUBMITTED THAT THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE HAS TO BE DISMISSE D. 8. THE LD. SPECIAL COUNSEL FOR THE REVENUE IN HIS R EJOINDER SUBMITTED THAT THE MISCELLANEOUS APPLICATION PERTAINS TO THE ORDER OF THE ITAT PASSED ON 30-06-2008 AND NOT ON THE EARLIER ORDER DATED 05 -10-2005, THEREFORE, IT IS WELL WITHIN TIME. HE SUBMITTED THAT IT IS AN UNDIS PUTED FACT THAT IT WAS NOT 9 ARGUED BEFORE THE TRIBUNAL AT THE TIME OF HEARING. HOWEVER, SINCE THE TRIBUNAL IS THE FINAL FACT FINDING AUTHORITY AND SI NCE THERE IS A CLEAR CUT ADMISSION BY THE ASSESSEE BEFORE THE CIT(A), THEREF ORE, THE INCOME HAS TO BE CORRECTLY ASSESSED. HE SUBMITTED THAT IT IS NOT KNOWN AS TO WHAT PREVENTED THE ASSESSEE TO KEEP QUIET OR NOT BRINGIN G THE FACTS TO THE NOTICE OF THE TRIBUNAL. HE ACCORDINGLY SUBMITTED THAT SIN CE THE ORDER OF THE TRIBUNAL CONTAINS AN APPARENT MISTAKE, THEREFORE, T HE SAME SHOULD BE RECTIFIED AND NECESSARY ORDERS BE PASSED. 9. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES. WE FIND MERIT IN THE SUBMISSION OF THE LD. SENIOR COUN SEL FOR THE ASSESSEE THAT THE MISTAKE WAS IN THE ORDER OF THE CIT(A) AND THE PROPER COURSE OF ACTION SHOULD HAVE BEEN THROUGH RECTIFICATION PETITION BEF ORE THE CIT(A). NO OTHER MISTAKE HAS BEEN POINTED OUT BY THE REVENUE A GAINST THE ORDER OF THE TRIBUNAL. NO AFFIDAVIT WAS FILED BEFORE US BY THE REVENUE STATING THAT THEY HAD INFACT ARGUED TO SUPPORT THE FIGURE OF RS.5,76, 75,624/- IN PLACE OF RS.4,11,61,718/- AND THE TRIBUNAL HAS NOT CONSIDERE D THE SAME. THEREFORE, WE FIND NO APPARENT MISTAKE IN THE ORDER OF THE TRI BUNAL. WE ACCORDINGLY DISMISS THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE BEING DEVOID OF ANY MERIT. 10. THE MISCELLANEOUS APPLICATION FILED BY THE REVE NUE IS ACCORDINGLY DISMISSED. MA NO.150/PN/2010 (BY ASSESSEE) (A.YRS. 1998-99 TO 2004-05) : 11. AT THE TIME OF HEARING THE LD. SPECIAL COUNSEL FOR THE REVENUE RAISED A PRELIMINARY OBJECTION STATING THAT THE ASSESSEE A S WELL AS THE REVENUE 10 HAVE FILED APPEALS BEFORE THE HONBLE HIGH COURT AG AINST THE ORDER OF THE TRIBUNAL. 11.1 REFERRING TO THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF TATA COMMUNICATIONS VS. CIT REPORTED IN 121 ITD 384 THE LD. SPECIAL COUNSEL FOR THE REVENUE SUBMITTED THAT ONC E AN APPEAL IS FILED BEFORE THE HONBLE HIGH COURT, THE TRIBUNAL BECOMES FUNCTUS OFFICIO AND HAS NO JURISDICTION TO DECIDE THE MISCELLANEOUS APPLICATION. REFERRING TO THE FOLLOWING DECISIONS HE SUBMITTED THAT THE MI SCELLANEOUS APPLICATION FIELD BY THE ASSESSEE SHOULD NOT BE ADMITTED SINCE THE SAME IS NOT MAINTAINABLE. 1. TIRUPATI BALAJI DEVELOPERS LTD. VS. STATE OF BIHAR AND OTHERS REPORTED IN AIR 2004 (SC) 2351 2. SHETH ENTERPRISES PVT. LTD. & ANOTHER REPORTED IN 1999-(082)-ECR-0467-GUJ,/ 2000-(115)-ELT-0053-GUJ 3. RAJA KULKARNI AND OTHERS VS. THE STATE OF BOMBAY- 1954(000)-SCJ- 0050-SC 4. CIT VS. SHATRUSAILYA DIGVIJAYSINGH JADEGA REPORTED IN 277 ITR 435 (SC) HE ACCORDINGLY SUBMITTED THAT THE MISCELLANEOUS APP LICATION FILED BY THE ASSESSEE BE DISMISSED. 11.2 THE LD. SENIOR COUNSEL APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT ALTHOUGH THE ASSESSEE AS WELL AS THE REVENUE H AVE FILED APPEALS BEFORE THE HONBLE HIGH COURT AGAINST THE ORDER OF THE TRI BUNAL DATED 31-03-2010 FOR THE A.Y. 1998-99 TO 2004-05 HOWEVER THE SAID AP PEALS HAVE NOT YET BEEN ADMITTED BY THE HONBLE HIGH COURT TILL DATE. HE SUBMITTED THAT THE PENDENCY OF AN APPEAL BEFORE THE HIGH COURT U/S.260 A OF THE ACT DOES NOT CREATE ANY BAR ON THE JURISDICTION OF THE TRIBUNAL U/S.254(2) OF THE ACT TO RECTIFY A MISTAKE WHICH IS APPARENT FROM THE RECORD AND THE SUB-SECTION IS FRAMED IN THE WIDEST POSSIBLE TERMS, I.E. THE TRIBU NAL CAN RECTIFY ANY 11 MISTAKE APPARENT FROM THE RECORD IN ITS ORDER AND S UBJECT TO THE APPLICATION FOR RECTIFICATION BEING FILED WITHIN 4 YEARS FROM T HE DATE OF THE ORDER OF THE TRIBUNAL. HE SUBMITTED THAT UNLESS THE TRIBUNAL RE CTIFIES THE APPARENT MISTAKE IN ITS ORDER THE HIGH COURT WILL NOT BE UNA BLE TO TAKE UP THE APPEAL FOR HEARING. THE TRIBUNAL HAS THE JURISDICTION AND THE DUTY TO RECTIFY AN APPARENT MISTAKE IN ITS ORDER EVEN DURING THE PENDE NCY OF AN APPEAL BEFORE THE HONBLE HIGH COURT. 11.3 REFERRING TO THE DECISION OF THE HONBLE BOMBA Y HIGH COURT IN THE CASE OF ACCRA INVESTMENT PVT. LTD. VS. ITO VIDE IT A NO.953/PN/2012 ORDER DATED 15-01-2013 (A COPY OF WHICH WAS FILED D URING THE COURSE OF HEARING) THE LD. SENIOR COUNSEL FOR THE ASSESSEE SU BMITTED THAT IN THAT CASE THE MISCELLANEOUS APPLICATION U/S.254(2) WAS FILED BEFORE THE TRIBUNAL ON 30-08-2012. THE ASSESSEE HAS ALSO FILED AN APPEAL U/S.260A BEFORE THE HONBLE HIGH COURT WHICH WAS ADMITTED ON 25-09-2012 . WHEN THE HIGH COURT TOOK UP THE MATTER FOR FINAL HEARING IT OBSER VED THAT SOME OF THE ALLEGED MISTAKES POINTED OUT IN THE MISCELLANEOUS A PPLICATION GO TO THE ROOT OF THE MATTER AND ARE CRUCIAL TO DETERMINE THE ISSUES ARISING IN THE APPEAL. ACCORDINGLY, IT WAS HELD THAT IT WOULD BE IN THE INTEREST OF JUSTICE FOR THE PROPER DISPOSAL OF THE APPEAL, THE MISCELLA NEOUS APPLICATION SHOULD BE FIRST DISPOSED OF BY THE TRIBUNAL. HE SUBMITTED THAT THE HIGH COURT WOULD NOT HAVE DIRECTED THE TRIBUNAL TO DISPOSE OF THE MISCELLANEOUS APPLICATION EVEN AFTER THE ADMISSION OF THE APPEAL BY THE HIGH COURT IF IT WAS CONTRARY TO LAW. 11.4 REFERRING TO THE DECISION OF THE CHANDIGARH BE NCH OF THE TRIBUNAL IN THE CASE OF VESTA INVESTMENT AND TRADING CO. PVT. L TD. VS. ACIT REPORTED IN 104 TTJ 284 HE SUBMITTED THAT THE TRIBUNAL IN TH E SAID DECISION HAS LAID 12 DOWN THE LAW THAT THERE IS NO BAR FOR THE TRIBUNAL TO EXERCISE ITS JURISDICTION U/S.254(2) WHEN THE PARTY HAS APPROACHED THE HIGH C OURT U/S.260A AGAINST THE ORDER OF THE TRIBUNAL IN AN APPEAL ON A SUBSTAN TIAL QUESTION OF LAW YET TO BE ADMITTED. 12. SO FAR AS THE VARIOUS DECISIONS RELIED ON BY TH E LD. SPECIAL COUNSEL FOR THE REVENUE ARE CONCERNED HE SUBMITTED THAT ALL THOSE DECISIONS ARE DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. HE SUBMITTED THAT IN THE CASE OF TIRUPATI BALAJI DEVEL OPERS PVT. LTD. (SUPRA) THE APPEAL WAS FILED BY THE PERSON WHO WAS NOT THE PARTY IN THE LOWER COURT. THEREFORE, THE QUESTION IN THAT CASE WAS WHETHER SU CH PERSON CAN FILE AN APPEAL. IN THAT CONTEXT THE DECISION WAS RENDERED. IN THE CASE OF SHETH ENTERPRISES PVT. LTD. AND ANOTHER VS. CC & ANOTHER (GUJARAT HIGH COURT) (SUPRA) THERE WAS NO REFERENCE TO PENDING OR NO APP EAL PENDING REFERRING TO THE DECISION IN THE CASE OF RAJA KULKARNI AND OT HERS VS. THE STATE OF BOMBAY (SUPRA) HE SUBMITTED THAT WE ARE NOT CONCERN ED WITH INTERPRETING A PENDING APPEAL. SO FAR AS THE DECISION IN THE CASE OF CIT VS. SHATRUSAILYA DIGVIJAYSINGH JADEGA REPORTED IN 277 ITR 435 (SUPRA ) IS CONCERNED HE SUBMITTED THAT ONE CANNOT PICK UP A SENTENCE OR TWO FROM A DECISION RENDERED FOR DECIDING THE ISSUE IN HAND. HE SUBMIT TED THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE JURISDICTIO NAL HIGH COURT CITED EARLIER. 12.1 HE SUBMITTED THAT IN THE INSTANT CASE THE APPE ALS FILED BY THE ASSESSEE AS WELL AS THE REVENUE ARE YET TO BE ADMITTED BY TH E HONBLE HIGH COURT. THEREFORE, THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF TATA COMMUNICATIONS (SUPRA) CANNOT BE APPLIED SINCE IN THAT CASE THE APPEALS WERE ADMITTED BY THE HONBLE HIGH COURT. E VEN OTHERWISE ALSO, IN 13 VIEW OF THE DECISION OF THE JURISDICTIONAL HIGH COU RT IN THE CASE OF ACCRA INVESTMENT PVT. LTD. (SUPRA) WHERE THE HONBLE HIGH COURT HAS DIRECTED THE TRIBUNAL TO RECTIFY THE MISTAKE EVEN AFTER ADMISSIO N OF THE APPEAL THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS MAINTAINABLE. HE ACCORDINGLY SUBMITTED THAT THE MISCELLANEOUS APPLIC ATION FILED BY THE ASSESSEE U/S.254(2) OF THE ACT IS MAINTAINABLE AND THE TRIBUNAL HAS THE JURISDICTION AND THE DUTY TO RECTIFY THE MISTAKES P OINTED OUT BY THE ASSESSEE. 13. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES. BOTH THE SIDES FAIRLY CONCEDED THAT THE APPEALS FIL ED BY THEM BEFORE THE HONBLE HIGH COURT AGAINST THE ORDER OF THE TRIBUNA L ARE YET TO BE ADMITTED. THEREFORE, WE DO NOT FIND ANY MERIT IN THE SUBMISSI ON OF THE LD. SPECIAL COUNSEL FOR THE REVENUE THAT IN VIEW OF THE DECISIO N OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF TATA COMMUNICATIONS (SU PRA), ONCE AN APPEAL IS FILED BEFORE THE HIGH COURT THE TRIBUNAL BECOMES F UNCTUS OFFICIO AND HAS NO JURISDICTION TO DECIDE THE MISCELLANEOUS APP LICATION. 13.1 WE FIND THE CHANDIGARH BENCH OF THE TRIBUNAL I N THE CASE OF VESTA INVESTMENT AND TRADING COMPANY PVT. LTD. (SUPRA) HA S HELD THAT THERE IS NO BAR TO EXERCISE JURISDICTION U/S.254(2) WHEN THE PA RTY HAS APPROACHED THE HIGH COURT U/S.260A AGAINST THE ORDER OF THE TRIBUN AL IN AN APPEAL ON A SUBSTANTIAL QUESTION OF LAW YET TO BE ADMITTED. 13.2 SIMILARLY, WE FIND THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE ACCRA INVESTMENT PVT. LTD.(SUPRA) HAS DIRECTED THE TRIBUNAL TO DISPOSE OF THE MISCELLANEOUS APPLICATION EVEN AFTER THE APPEAL WAS ADMITTED. FOR THE SAKE OF CLARITY, THE RELEVANT ORDER OF THE HONBLE HIGH COURT IS REPRODUCED WHICH READS AS UNDER : 14 THIS APPEAL AGAINST THE ORDER DATED 25-04-2012 OF TH E TRIBUNAL FOR ASSESSMENT YEAR 2006-07 WAS ADMITTED ON 25-09-2012. THE APPELLANT HAD ALSO TAKEN OUT THE ABOVE. NOTICE OF MOTION SEEKING A STAY OF RECOVERY OF THE DISPUTED TAX AND INTEREST AS A CONSEQUENCE OF THE IMPU GNED ORDER OF THE TRIBUNAL TILL THE DISPOSAL OF THE APPEAL. 2. THE APPEAL WAS PLACED ON BOARD TODAY FOR FINAL HE ARING OF THE APPEAL ALONG WITH THE NOTICE OF MOTION. DURING THE COURSE OF THE HEARING TODAY IT WAS POINTED OUT TO US THAT CONSEQUENT TO THE IMPUGNED ORDER OF THE TRIBUNAL, THE APPELLANT HAD ON 13-08-2012 FILED A MISC . APPLICATION UNDER SECTION 254(2) OF THE INCOME TAX ACT, 1961 SEEKING TO RECTIFY SOME INADVERTENT ERRORS WHICH ACCORDING TO THE RESPONDENT H AD CREPT IN THE IMPUGNED ORDER. WE FIND THAT SOME OF THE ALLEGED ER RORS POINTED OUT IN THE MISC. APPLICATION WOULD GO TO THE ROOT OF THE MATTER A ND IF THE ALLEGED ERRORS ARE FOUND TO BE CORRECT THEN THE APPRECIATION OF THE IMPUGNED ORDER WOULD BE ENTIRELY DIFFERENT WHILE CONSIDERING WHETHER THE INVES TMENT IN SHARES OF MILLENNIUM ALCOBEV PVT. LTD. (MAPL) WAS A CAPITAL ASSE T OR NOT. FOR INSTANCE, IN THE MISC. APPLICATION IT HAS BEEN POINTED OUT THAT THE IMPUGNED ORDER RECORDS THAT THE RESPONDENT HAD PURCHASED THE SHARES AT A VERY HIGH PRICE OF RS.21/- AND THAT NO INVESTOR WOULD PURCHASE SHARE AT SUCH HIGH PRICE. IT IS THE CASE OF THE RESPONDENT THAT ONE OF THE OTHER INVESTORS IN MAPL HAD INVESTED AT THE RATE OF RS.87.95 PER SHARE WHILE SUBSCRIBING TO 40% OF THE SHAREHOLDING OF MAPL. THE AFORESAID FACT OF HIGH PRICE WAS ONE OF THE FACTOR WHICH SEEMS TO HAVE WEIGHED WITH THE TRIB UNAL TO HOLD THAT THE APPELLANT WAS TRADER IN THE SHARES OF MAPL AND NOT AN INVESTOR. SIMILAR OTHER SUCH ERRORS HAVE BEEN POINTED OUT IN THE RESPON DENTS MISC. APPLICATION WHICH WOULD BE CRUCIAL TO DETERMINE THE ISSUE S ARISING IN THIS APPEAL. THEREFORE, IT WOULD BE IN THE INTEREST OF JUS TICE THAT FOR THE PROPER DISPOSAL OF THE APPEAL THE MISC. APPLICATION FILED IN AUG UST 2012 IS FIRST DISPOSED OF BY THE TRIBUNAL AND ONLY THEREAFTER THIS A PPEAL BE HEARD. 3. WE ARE INFORMED THAT MISC. APPLICATION FILED BY THE R ESPONDENT HAS BEEN FIXED ON 22-03-2012 BEFORE THE TRIBUNAL. COUNSE L FOR THE PARTIES ARE AT LIBERTY TO MENTION THE MISC. APPLICATION BEFORE THE TRIBU NAL AND HAVE THE MATTER PLACED FOR HEARING BEFORE THE TRIBUNAL ON A DA TE EARLIER TO 22-03- 2012 SUBJECT TO THE CONVENIENCE OF THE TRIBUNAL. 4. AS WE ARE OF THE VIEW THAT THE MISC. APPLICATION MUS T BE DISPOSED OF FIRST BEFORE THE APPEAL CAN BE HEARD ON MERITS, IT WOU LD BE APPROPRIATE THAT THE REVENUE NOT COMMERCE ANY RECOVERY PROCEEDING CON SEQUENT TO THE IMPUGNED ORDER TILL THE MISC. APPLICATION HAS BEEN DISPOS ED AND FOR A PERIOD OF THREE WEEKS THEREAFTER, IF THE ORDER IS ADVERSE TO THE RESPONDENT. ACCORDINGLY, WE DISPOSE OF THE NOTICE OF MOTION BY THE ABOVE DIRECTIONS. NOTICE OF MOTION IS DISPOSED OF ACCORDINGLY. IN VIEW OF THE DECISIONS CITED ABOVE, WE ARE OF THE CONSIDERED OPINION THAT THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS MAINTAINABLE. ACCORDINGLY, THE PRELIMINARY OBJECTION RAISED BY TH E SPECIAL COUNSEL FOR THE DEPARTMENT IS DISMISSED. 14. THE FIRST ISSUE RAISED BY THE ASSESSEE THROUGH THIS MISCELLANEOUS APPLICATION IS REGARDING THE ORDER OF THE TRIBUNAL IN RESTORING THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE ISS UE AFRESH REGARDING SERVICE 15 CHARGES. THE LD. SENIOR COUNSEL FOR THE ASSESSEE R EFERRING TO THE MISCELLANEOUS APPLICATION SUBMITTED THAT SERVICE CH ARGES AND MARKETING EXPENSES PAID BY THE ASSESSEE TO CCI INC. WERE CLAI MED FOR A.Y. 1998-99 TO 2004-05 AS DEDUCTION. IDENTICAL CLAIMS WERE ALSO M ADE IN A.Y. 1997-98 WHICH WAS ALLOWED BY THE TRIBUNAL FOLLOWING THE DIR ECTION OF THE HONBLE BOMBAY HIGH COURT TO DISPOSE OF THE GROUNDS CHALLEN GING THE BASIS OF DISALLOWANCE AS SUSTAINED BY THE CIT(A). ALTHOUGH THE BASIS OF THE DISALLOWANCE FOR A.Y. 1998-99 TO 2004-05 AND FOR A. Y. 1997-98 WAS THE SAME, THE TRIBUNAL DID NOT FOLLOW THE ORDER PASSED BY IT FOR A.Y. 1997-98 BY OVERLOOKING THE CRUCIAL FACTS WHICH WERE CONSIDE RED WHILE ALLOWING DEDUCTION FOR SERVICE CHARGE IN A.Y. 1997-98 PURSUA NT TO THE ORDER AND DIRECTION OF THE HONBLE BOMBAY HIGH COURT BUT HAS SENT BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR VERIFYING THE GENUINENESS OF THE SERVICE CHARGE. HE SUBMITTED THAT GENUINENESS OF THE EXPENDITURE WAS NEVER RAISED BY THE ASSESSING OFFICER OR THE CIT(A) AND INDEED COULD NOT HAVE BEEN RAISED AS FOR THE A.Y. 1998-99 THE ASSESS ING OFFICER HAD DISALLOWED 10% OF THE EXPENDITURE AND FOR THE SUBSE QUENT YEARS 100% ON THE GROUND OF ALLEGED BENEFIT THERE FROM TO OTHERS AND NOT ON THE GROUND OF GENUINENESS OF THE EXPENDITURE. FOLLOWING THE SAME REASONING, THE CIT(A) DISALLOWED 25% OF THE EXPENDITURE FOR A.Y. 1998-99, 30% FOR A.Y. 1999- 2000 TO 2004-05 AND 33% FOR A.Y. 2001-02 ON THE GRO UND OF BENEFIT TO OTHERS. THERE IS NO DISPUTE REGARDING THE GENUINE NESS OF THE EXPENDITURE FOR A.Y. 1997-98 TO 2004-05. HE SUBMITTED THAT ALT HOUGH THE ASSESSEE DID NOT PRODUCE THE VOUCHERS SUPPORTING THE INVOICES IS SUED BY CCI INC. BEFORE THE ASSESSING OFFICER FOR A.Y. 1998-99, HOWEVER, VO LUMINOUS VOUCHERS WERE PRODUCED BEFORE THE CIT(A) WHO HAS RECORDED TH AT HE HAS MADE A DETAILED ENQUIRY AND ALSO CALLED FOR A REMAND REPOR T FROM THE ASSESSING 16 OFFICER. AFTER EXAMINING THE DETAILS INCLUDING THE REMAND REPORT THE CIT(A) CONCLUDED THAT WHILE MAJOR PART OF THE BENEF IT AND THE SERVICES RENDERED BY CCI INC. COMES TO THE ASSESSEE A PART O F THE BENEFIT GOES TO THE BOTTLERS AND TCCC, THE OWNER OF THE ASSETS AND HE A CCORDINGLY CONCLUDED THAT THE 25% OF THE SERVICE CHARGE HAS TO BE DISALL OWED AND HE ALLOWED THE BALANCE. 15. SO FAR AS THE A.Y. 1999-2000 TO 2004-05 ARE CON CERNED HE SUBMITTED THAT THE ASSESSEE HAS FILED VOLUMINOUS BOX FILES OF VOUCHERS BEFORE THE ASSESSING OFFICER HIMSELF. HOWEVER, THE TRIBUNAL H AS PROCEEDED ON A TOTAL MISCONCEPTION BY PROCEEDING ON THE BASIS THAT FOR A .Y. 1999-2000 TO 2004- 05 NO VOUCHERS WERE PRODUCED BEFORE THE ASSESSING O FFICER. HE SUBMITTED THAT THE GROUND OF APPEAL RAISED BY THE ASSESSEE BE FORE THE TRIBUNAL WAS WHETHER THE CIT(A) WAS JUSTIFIED IN DISALLOWING THE EXPENDITURE ON THE GROUND THAT SOME BENEFIT HAD ALSO ACCRUED TO THE BO TTLERS AND TCCC. HOWEVER, THE TRIBUNAL IN THE ORDER DATED 31-03-2010 HAS RESTORED THE ISSUE TO THE ASSESSING OFFICER ON THE BASIS THAT AS THE V OUCHERS WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER FOR A.Y. 1998-99 THE A SSESSEE HAS NOT PROVED THE GENUINENESS OF THE EXPENDITURE. IN DOING SO, T HE TRIBUNAL HAS LOST SIGHT OF THE FACT THAT THE VOUCHERS WERE PRODUCED BEFORE THE CIT(A) WHO HAD CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFIC ER AND THE ISSUE OF GENUINENESS OF THE EXPENDITURE WAS NEVER IN DISPUTE BEFORE THE LOWER AUTHORITIES. IT WAS ALSO NOT THE GRIEVANCE OF THE REVENUE THAT THE VOUCHERS WERE NOT PRODUCED. THEREFORE, INSTEAD OF FOLLOWING THE ORDER OF THE TRIBUNAL FOR A.Y. 1997-98 UNDER SIMILAR FACTS THE T RIBUNAL HAS COMMITTED THE ERROR BY RESTORING THE MATTER TO THE FILE OF TH E ASSESSING OFFICER. 17 15.1 HE SUBMITTED THAT PURSUANT TO THE ORDER OF THE HIGH COURT THE TRIBUNAL PASSED THE ORDER ON 30-06-2008 FOR THE A.Y . 2007-08 IN WHICH IT HAS CONSIDERED ALL THE FINDINGS OF THE CIT(A) AND T HE SUBMISSION OF THE DEPARTMENT AND CONCLUDED THAT THE EXPENDITURE ON SE RVICE CHARGES WAS FOR THE BUSINESS PURPOSE OF THE ASSESSEE AND THE FACT T HAT SOME BENEFIT HAD BEEN DERIVED BY THE BOTTLERS AND TCCC DID NOT MEAN THAT THE EXPENDITURE COULD BE DISALLOWED IN THE ASSESSEES HANDS. HE SUBMITTE D THAT THE TRIBUNAL AT PARA 76 (PAGE 62 OF THE ORDER) HAS REJECTED THE CON TENTION OF THE DEPARTMENT THAT THE FACTS FOR A.Y. 1997-98 ARE DISTINGUISHABLE FROM THE FACTS FOR A.Y. 1998-99 TO 2004-05 AND HAS HELD THAT THERE WERE NO REASONS TO DEVIATE FROM THE FINDINGS GIVEN BY THE TRIBUNAL FOR A.Y. 1997-98 . HAVING HELD SO, THE TRIBUNAL HAS RESTORED THE ISSUE OF SERVICE CHARGE TO THE FILE OF THE ASSESSING OFFICER ON THE GROUND TO EXAMINE THE GEN UINENESS OF THE EXPENDITURE. HE SUBMITTED THAT THE DECISION OF THE TRIBUNAL TO REMAND THE MATTER ON THE ISSUE OF SERVICE CHARGE TO THE ASSESS ING OFFICER TO LOOK INTO THE GENUINENESS OF THE EXPENDITURE HAS ALSO BEEN CHALLENGED BY THE REVENUE BEFORE THE HIGH COURT IN AN APPEAL FILED U/ S.260A OF THE ACT. HE SUBMITTED THAT EVEN AFTER THE MATTER WAS RESTORED T O THE FILE OF THE ASSESSING OFFICER, THE ASSESSING OFFICER IN HIS ORDER DATED 3 0-12-2011 WHILE GIVING EFFECT TO THE TRIBUNALS ORDER HAS REPEATED THE ADD ITION AND HELD THAT THE ISSUE WAS THOROUGHLY EXAMINED AND IT IS CLEAR THAT THE ONLY BASIS OF DISALLOWANCE IS THE BENEFIT FLOWING TO THIRD PARTIE S AND NOT THAT THE EXPENDITURE IS NOT GENUINE. HE ACCORDINGLY SUBMITT ED THAT WHEN IT IS THE CASE OF THE REVENUE AS WELL AS THE ASSESSEE THAT FU LL FACTUAL POSITION HAS BEEN CONSIDERED BY THE ASSESSING OFFICER AND THE CI T(A), THEREFORE, THE DECISION OF THE TRIBUNAL TO RESTORE THE MATTER TO T HE ASSESSING OFFICER CLEARLY AND UNEQUIVOCALLY SHOWS THAT IT IS A MISTAK E APPARENT FROM THE 18 RECORD, I.E. BOTH THE PARTIES TO THE DISPUTE AGREE THAT THE LOWER AUTHORITIES HAVE CONSIDERED THE ENTIRE ISSUE AND THE COMMON GRI EVANCE IS THE FAILURE ON THE PART OF THE TRIBUNAL TO ADJUDICATE ON THE GROUN D RAISED BY THE ASSESSEE IN RESPECT OF WHICH VERY MATTER, THE DIRECTION WAS GIVEN BY THE HIGH COURT ON IDENTICAL FACTS FOR A.Y. 1997-98. HE ACCORDINGL Y SUBMITTED THAT THE TRIBUNAL SHOULD WITHDRAW THE DIRECTIONS IN PARA 76 (PAGE 62 & 63 OF THE ORDER) FOR A.Y. 1998-99 WHICH HAS BEEN FOLLOWED IN SUBSEQUENT YEARS AND FOLLOWING THE ORDER FOR THE TRIBUNAL FOR A.Y. 1997- 98 SHOULD ALLOW THE ASSESSEES APPEAL FOR A.Y. 1998-99 TO 2004-05. 16. THE LD. SPECIAL COUNSEL FOR THE REVENUE ON THE OTHER HAND HEAVILY OPPOSED THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE. HE SUBMITTED THAT THERE IS NO APPARENT MISTAKE IN THE ORDER OF T HE TRIBUNAL AND THE ASSESSEE THROUGH THIS MISCELLANEOUS APPLICATION REQ UESTS THE TRIBUNAL TO RECTIFY ITS ORDER WHICH AMOUNTS TO REVIEW OF ITS OW N ORDER WHICH IS NOT PERMISSIBLE IN LAW. HE ACCORDINGLY SUBMITTED THAT THE IST GROUND RAISED BY THE ASSESSEE IN THE MISCELLANEOUS APPLICATION SHOUL D BE DISMISSED. 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND AFTER THOROUGHLY DISCUSSING THE ISSUE THE TRIBUNAL HAD HELD THAT THE REASONS GIVEN BY THE LD. DR NOT TO FOLLOW THE ORDER OF THE TRIBUNAL FOR A.Y. 1997-98 ARE NOT AT ALL CONVINCING IN VIEW OF THE POINT-WISE COUNTER REPLY GIVEN BY THE LD. COUNSEL FOR THE ASSESSEE TO PROVE THAT THOSE OBJECT IONS HAVE ALREADY BEEN CONSIDERED BY THE TRIBUNAL. ACCORDINGLY, THE DISAL LOWANCE OF MARKETING EXPENSES WAS DELETED. HOWEVER, AS REGARDS THE SERV ICE CHARGES THE TRIBUNAL AFTER CONSIDERING THE FACT THAT ASSESSEE H AS NOT FURNISHED THE FULL DETAILS BEFORE THE ASSESSING OFFICER IN RESPECT OF THE COPY OF THE SERVICE AGREEMENT AND THE DEBIT NOTES AND AFTER CONSIDERING THE OBSERVATION GIVEN 19 BY THE LD.CIT(A) AT PARA 8.1 OF HIS ORDER THAT THE CLAIM OF THE ASSESSEE IN VARIOUS SUBMISSIONS THAT ALL EXPENSES BY THE CCI IN C. WOULD HAVE TO BE INCURRED BY THE ASSESSEE COMPANY IN RUNNING THE BUS INESS IS NOT ENTIRELY CORRECT AS HAS BEEN SEPARATELY BROUGHT OUT AT DIFFE RENT PLACES OF THE APPEAL ORDERS HAS RESTORED THE ISSUE TO THE FILE OF THE AS SESSING OFFICER WITH A DIRECTION TO DECIDE THE ISSUE AFRESH AFTER GIVING A N OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE THE CLAIM WITH EVIDENCE. THE LD. COUNSEL FOR THE ASSESSEE WAS GIVING UNNECESSARY EMPHASIS TO THE WOR D GENUINENESS OF THE EXPENDITURE. IT WAS CLARIFIED DURING THE HEARING O F THE M.A. ITSELF THAT WHILE TYPING THE OPERATIVE PORTION OF THE ORDER, INADVERT ENTLY THE WORD ALLOWABILITY WAS OMITTED AFTER THE WORD GENUINEN ESS. IT IS TO BE MENTIONED HERE THAT THE TRIBUNAL WHILE PASSING THE ORDER HAS CONSCIOUSLY RESTORED THE ISSUE TO THE FILE OF THE ASSESSING OFF ICER WITH A DIRECTION TO DECIDE THE ISSUE AFRESH AFTER GIVING AN OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE THE CLAIM WITH EVIDENCE SINCE FULL DET AILS WERE NEVER PRODUCED BEFORE THE ASSESSING OFFICER. THEREFORE, THE FIRST ISSUE RAISED BY THE ASSESSEE IN THE MISCELLANEOUS APPLICATION DESERVES TO BE DISMISSED. HOWEVER, TO OVERCOME THE HARDSHIP THAT THE ASSESSEE MAY FACE WE MODIFY OUR ORDER AT PARA 76 WHICH HAS TO BE READ AS UNDER : 76. WE FIND THE REASONS GIVEN BY THE LD. DR NOT TO F OLLOW THE DECISION OF THE TRIBUNAL ORDER FOR THE A.Y. 1997-98 ARE NOT AT A LL CONVINCING IN VIEW OF THE POINT WISE COUNTER REPLY GIVEN BY THE LD. COUNSEL FOR THE ASSESSEE TO PROVE THAT THOSE OBJECTIONS HAVE ALREADY BEEN CONSIDE RED BY THE TRIBUNAL. THE VARIOUS REASONS GIVEN BY THE LD. DR TO DEVIATE FR OM THE DECISION OF THE TRIBUNAL FOR THE A.Y. 1997-98 HAVE BEEN REPLIED BY T HE LD. SENIOR COUNSEL FOR THE ASSESSEE WHICH ARE ALREADY MENTIONED AT PARAG RAPHS 50 TO 71 OF THIS ORDER AND THESE NEED NOT BE INCORPORATED HERE TO AVO ID REPETITION. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FO R THE IMMEDIATELY PRECEDING ASSESSMENT YEAR, WE ARE OF THE OPINION THAT THE MARKETING EXPENSES CLAIMED BY THE ASSESSEE HAS TO BE ALLOWED. HOWEVER, AS REGARD SERVICE CHARGES, UNDOUBTEDLY THE ASSESSEE HAS NOT FU RNISHED THE FULL DETAILS BEFORE THE ASSESSING OFFICER EXCEPT THE COPY OF THE S ERVICE AGREEMENT AND THE DEBIT NOTES. IT IS THE SETTLED PROPOSITION OF LAW THAT FOR CLAIMING ANY EXPENDITURE, THE ONUS IS ALWAYS ON THE ASSESSEE TO SA TISFY THE ASSESSING OFFICER WITH DOCUMENTARY EVIDENCE REGARDING THE GENUINENESS AND 20 ALLOWABILITY OF THE EXPENDITURE. THE ASSESSEE IN THE INSTANT CASE HAS FAILED TO DISCHARGE THE ONUS. FURTHER, THE LD. CIT(A) HAS GI VEN A FINDING AT PARA 8.1 OF HIS ORDER THAT THE CLAIM OF THE ASSESSEE IN VARIOUS SUB MISSIONS THAT ALL EXPENSES AS INCURRED BY CCI INC. WOULD HAVE TO BE INCU RRED BY ASSESSEE COMPANY IN RUNNING THE BUSINESS IS NOT ENTIRELY CORRECT AS HAS BEEN SEPARATELY BROUGHT OUT AT DIFFERENT PLACES OF THE APP EAL ORDERS. WE, THEREFORE, IN THE INTEREST OF JUSTICE, DEEM IT PROPER TO RESTORE THE ISSUE RELATING TO SERVICE CHARGES TO THE FILE OF THE ASSESSIN G OFFICER WITH A DIRECTION TO DECIDE THE ISSUE AFRESH AFTER GIVING AN O PPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE THE CLAIM WITH EVIDENCE. THE ASSESSING OFFICER SHALL ALSO KEEP IN MIND THE ORDER OF THE TRIBUNAL F OR A.Y. 1997-98 WHILE DECIDING THE ISSUE. WE HOLD AND DIRECT ACCORDINGLY. THE GROUND RAISED BY THE ASSESSEE ON MARKETING EXPENSES ARE ACCORDING LY ALLOWED WHEREAS THE GROUND RELATING TO SERVICE CHARGES IS ALLOW ED FOR STATISTICAL PURPOSES. 17.1 SO FAR AS THE DISALLOWANCE OF SERVICE CHARGES FOR OTHER YEARS ARE CONCERNED, IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT HE HAD FILED VARIOUS VOUCHERS IN 19 BOX FILES. MERE F ILING OF VOUCHERS IN THE BOX FILES IN OUR OPINION IS NOT SUFFICIENT FOR ALLO WABILITY OF THE CLAIM SINCE THE SAME HAS TO BE THOROUGHLY VERIFIED BY THE ASSE SSING OFFICER. WE FIND THE CIT(A) HAD GIVEN A FINDING THAT THERE ARE EXPEN SES WHICH HAVE BEEN CLAIMED BY CCI INC. UNDER THE GARB OF SERVICE CHAR GE BUT THE SAME ARE NOT ALLOWABLE AS PER LAW AS BUSINESS EXPENDITURE UNDER DIFFERENT PROVISIONS OF I.T. ACT AND HAS FURTHER OBSERVED THAT SUCH EXPENDI TURE CONTAIN FOREIGN TRAVEL EXPENSES OF THE SPOUSE OF THE EMPLOYEES, CAP ITAL EXPENDITURE AND EXPENSES INCURRED FOR OTHER THAN BUSINESS CONSIDERA TION INCLUDING SECURITY DEPOSIT WRITTEN OFF ETC. THEREFORE, THE TRIBUNAL FO LLOWING THE ORDER FOR A.Y. 1998-99 HAD TAKEN THE CONSCIOUS DECISION BY RESTORI NG THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO EXAMIN E THE GENUINENESS AS WELL AS ALLOWABILITY OF THE EXPENDITURE. THEREFORE , THERE IS NO APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL. THE FIRST IS SUE RAISED BY THE ASSESSEE IN THE MISCELLANEOUS APPLICATION IS ACCORDINGLY DIS MISSED. 21 18. SO FAR AS THE SECOND ISSUE IS CONCERNED THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AN AMOUNT OF RS.9,59,49,374 /- WAS DISALLOWED BY THE ASSESSING OFFICER BEING REIMBURSEMENT OF TRAVEL LING EXPENSES BY THE ASSESSEE TO CCI INC. THE CIT(A) UPHELD THE DISALLO WANCE MADE BY THE ASSESSING OFFICER ON THE GROUND THAT SUCH EXPENSES ARE SEPARATELY REIMBURSED AND IT IS NOT A PART OF SERVICE AGREEMEN T AND THE ASSESSEE FAILED TO PROVE THAT THESE HAVE BEEN REIMBURSED IN TERMS O F SERVICE AGREEMENT. THE TRIBUNAL ACCORDINGLY RESTORED THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION WITH A DIRECTION TO THE ASSESSEE TO SUBSTANTIATE ITS CLAIM. THE LD. COUNSEL FOR THE ASSESSEE REFERR ING TO THE MISCELLANEOUS APPLICATION AND THE WRITTEN SYNOPSIS SUBMITTED THAT THE TRIBUNAL WHILE ADJUDICATING THE ISSUE FAILED TO TAKE NOTE OF CLAUS E (6) OF THE AGREEMENT WHICH READ AS UNDER : IN CONSIDERATION OF THE SERVICES PROVIDED BY CCI, CCI L SHALL REIMBURSE THE OUT OF POCKET EXPENSES INCURRED IN RENDERING THE SERVI CES ON PRODUCTION OF SUPPORTING. IN ADDITION, CCIL SHALL PAY TO CCI A FEE ON THE BASIS OF ACTUAL COSTS INCURRED BY CCI UNDER EXPENSE HEADS LISTED IN EXH IBIT A, IN PROVIDING SUCH SERVICES PLUS A MARKUP OF 5% ON SUCH ACTUAL COSTS. 18.1 HE SUBMITTED THAT EXHIBIT A SETS OUT ONLY FOUR ITEMS OF EXPENSES BEING EXPENSES ON SALARIES AND ALLOWANCES, MOVING AND RELOCATION, SERVICE CHARGES FOR USE OF ASSETS AND STAFF WELFARE EXPENSES. TRAVELLING EXPENSES ARE NOT LISTED HERE AND ARE INCURRED IN TH E COURSE OF RENDERING SERVICES TO THE APPELLANT AND ACCORDINGLY REIMBURSE D WITHOUT A MARKUP AS PER THE CLAUSE 6 OF THE SERVICE AGREEMENT DATED 9 TH MAY 2000. INDEED FOR THE A.Y. 1997-98 TO 1999-00 THE TRAVEL EXPENSES WER E ALLOWED AS A PART OF THE SERVICE CHARGES AND 5% MARK-UP WAS MADE. FOR A .Y. 2000-01 TO 2004-05 ALSO THE TRAVEL EXPENSES WERE REIMBURSED AS IN THE EARLIER YEARS BUT WITHOUT A MARK-UP. 22 18.2 HE SUBMITTED THAT SINCE BY RESTORING THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION THE TRIBUN AL HAS NOT CONSIDERED THE SAID CLAUSE OF THE AGREEMENT, THEREFORE, THIS IS AN APPARENT MISTAKE WHICH HAS OCCURRED IN THE ORDER OF THE TRIBUNAL. HE ACCO RDINGLY SUBMITTED THAT THE ORDER OF THE TRIBUNAL ON THIS ISSUE BE RECALLED FOR FRESH ADJUDICATION OR THE EXPENDITURE BE ALLOWED BY SUITABLY MODIFYING TH E ORDER. 19. THE LD. SPECIAL COUNSEL FOR THE REVENUE ON THE OTHER HAND STRONGLY OPPOSED THE GROUND RAISED BY THE ASSESSEE. HE SUBM ITTED THAT THE TRIBUNAL HAS CORRECTLY RESTORED THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO GIVE AN OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE ITS CLAIM. THEREFORE, ANY FURTHER ORDER ON THIS ISSUE WILL AMO UNT TO REVIEW OF ITS OWN ORDER BY THE TRIBUNAL WHICH IS NOT PERMISSIBLE. HE ACCORDINGLY SUBMITTED THAT THIS GROUND BY THE ASSESSEE SHOULD BE DISMISSE D. 20. WE HAVE HEARD THE RIVAL ARGUMENTS. IN OUR OPIN ION, THERE IS NO APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL BY RE STORING THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO G IVE AN OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE THE CLAIM TO HIS SATISFACT ION. SINCE THE ASSESSEE HAD FAILED BEFORE THE CIT(A) TO PROVE THAT THE AMOUNT O F RS.9,59,49,374/- WAS REIMBURSED IN TERMS OF THE SERVICE AGREEMENT, THERE FORE, THE TRIBUNAL IN THE INTEREST OF JUSTICE HAD RESTORED THE ISSUE TO THE F ILE OF THE ASSESSING OFFICER WITH A DIRECTION TO GIVE AN OPPORTUNITY TO THE ASSE SSEE TO SUBSTANTIATE THE CLAIM. THERE IS NO APPARENT MISTAKE IN THE ORDER O F THE TRIBUNAL ON THIS ISSUE. THE ASSESSEE THROUGH THIS MISCELLANEOUS APP LICATION REQUESTS THE TRIBUNAL TO RECTIFY THE ORDER WHICH AMOUNTS TO REVI EW OF ITS OWN ORDER WHICH IN OUR OPINION IS NOT PERMISSIBLE UNDER THE L AW. WE THEREFORE FIND NO 23 MERIT IN THE ABOVE GROUND. ACCORDINGLY, THE SECOND ISSUE IN THE MISCELLANEOUS APPLICATION IS DISMISSED. 21. THE THIRD ISSUE IN THE MISCELLANEOUS APPLICATIO N FILED BY THE ASSESSEE RELATES TO WRITE-OFF OF SECURITY DEPOSIT A S PER GROUND OF APPEAL NO.4 FOR A.Y. 1998-99. THE LD. COUNSEL FOR THE ASS ESSEE REFERRING TO THE MISCELLANEOUS APPLICATION SUBMITTED THAT DISALLOWAN CE OF LOSS ON ACCOUNT OF SECURITY DEPOSIT WRITE-OFF AMOUNTING TO RS.1.30 CRORES WAS UPHELD BY THE CIT(A) WHICH WAS THE SUBJECT MATTER OF APPEAL BEFOR E THE TRIBUNAL IN THE CONCISE GROUND OF APPAL NO.4. DURING THE COURSE OF HEARING THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF RICHARDSON HINDUSTAN LTD. VS. CIT REPORTED IN 169 ITR 516 WAS RELIED UPON TO THE PROPOSITION THAT TAKING PREMISES ON LEASE DOES NOT AMOUNT TO ACQUISITION OF CAPITAL ASSET NOR ADVANTAGE OF AN ENDURING NATURE AND THAT THE EXPEND ITURE INCURRED IN CONNECTION WITH THE LEASE (INCLUDED WAS WRITE-OFF O F SECURITY DEPOSIT) WAS ALLOWABLE AS REVENUE EXPENDITURE. HOWEVER, THE TRI BUNAL WHILE ADJUDICATING THE ISSUE HAS NOT CONSIDERED THE ABOVE DECISION AND LOST SIGHT OF THE SAID JUDGMENT OF THE JURISDICTIONAL HIGH COU RT. THEREFORE, THE DECISION OF THE TRIBUNAL BEING INCONSISTENT WITH TH E LAW LAID DOWN BY THE JURISDICTIONAL HIGH COURT CONSTITUTES MISTAKE APPAR ENT FROM RECORD WHICH REQUIRES RECTIFICATION. HE ACCORDINGLY SUBMITTED T HAT THE ORDER OF THE TRIBUNAL ON THIS ISSUE BE RECALLED OR NECESSARY ORD ER MAY BE PASSED RECTIFYING APPARENT MISTAKE. 22. THE LD. SPECIAL COUNSEL FOR THE REVENUE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE TRIBUNAL AND SUBMITTED T HAT THERE IS NO APPARENT MISTAKE AND THEREFORE THIS GROUND IN THE MISCELLANE OUS APPLICATION SHOULD BE DISMISSED. 24 23. AFTER HEARING BOTH THE SIDES, WE FIND THE TRIBU NAL WHILE DECIDING THE ISSUE HAS SIMPLY UPHELD THE ORDER OF THE CIT(A) HOL DING THAT THIS IS A CAPITAL LOSS AND NOT AN ALLOWABLE EXPENDITURE. HOWEVER, TH E VARIOUS ARGUMENTS INCLUDING THE DECISION OF THE JURISDICTIONAL HIGH C OURT IN THE CASE OF RICHARDSON HINDUSTAN LTD. (SUPRA) WHICH WAS RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING HAV E NOT BEEN CONSIDERED. NON-CONSIDERATION OF SUBMISSION INCLUDING DECISION OF JURISDICTIONAL HIGH COURT CITED AT THE TIME OF HEARING IN THE ORDER PAS SED BY THE TRIBUNAL CONSTITUTE APPARENT MISTAKE. WE, THEREFORE, RECALL THE ORDER OF THE TRIBUNAL FOR THE LIMITED PURPOSE OF ADJUDICATING ISSUE NO.II I OF THE MISCELLANEOUS APPLICATION, I.E. DISALLOWANCE OF SECURITY DEPOSIT AS PER GROUND OF APPEAL NO.4 FOR A.Y. 1998-99. THIS GROUND BY THE ASSESSEE IS ACCORDINGLY ALLOWED IN TERMS INDICATED ABOVE. 24. THE FOURTH ISSUE IN THE GROUNDS RAISED BY THE A SSESSEE IN THE MISCELLANEOUS APPLICATION RELATES TO DEPRECIATION O N COOLERS AS PER GROUND NO.4 FOR A.Y. 2000-01 AND SIMILAR GROUNDS FOR A.Y. 2002-03 TO 2004-05. THE LD. SENIOR COUNSEL FOR THE ASSESSEE REFERRING T O THE MISCELLANEOUS APPLICATION SUBMITTED THAT IN GROUND OF APPEAL NO.4 FOR A.Y. 2000-01 THE ASSESSEE HAS RAISED THE ISSUE WHETHER DEPRECIATION ON COOLERS OWNED BY THE ASSESSEE COULD BE DENIED ON THE GROUND THAT THE COO LERS WERE USED TO STORE BEVERAGES AND KEPT AT THE RETAILERS LOCATION. HE S UBMITTED THAT THE ASSESSEE HAD MADE 2 FOLD SUBMISSIONS WHICH ARE RECORDED AT P AGE 73 PARA 104 OF THE TRIBUNALS ORDER ACCORDING TO WHICH IT WAS SUBMITTE D THAT (I) THE COOLERS HELP INCREASE THE SALES OF BEVERAGES. THE SALE OF BEVERAGES LEADS TO AN INCREASE IN THE SALES OF CONCENTRATE. ACCORDINGLY, THE COOLERS ARE USED FOR THE BUSINESS OF THE APPLICANT (II) NO DISALLOWANCE OF DEPRECIATION ON 25 COOLERS HAS BEEN MADE IN THE PAST. ONCE AN ASSET E NTERS THE BLOCK, IT LOSES ITS IDENTITY AND DEPRECIATION ON INDIVIDUAL ASSETS CANNOT BE DISALLOWED. THE EVIDENCE NECESSARY TO SHOW THAT THE SAID COOLERS FO RMED PART OF THE BLOCK OF ASSETS WAS FILED. HE SUBMITTED THAT THE TRIBUNAL C ONFIRMED THE DISALLOWANCE AT PAGE 74, PARA 107 BY HOLDING AS UND ER : 'WE DO NOT FIND ANY MERIT IN THE SUBMISSION OF THE LEA RNED COUNSEL FOR THE ASSESSEE THAT USER FOR BEVERAGE IS USER FOR CONC ENTRATE IN VIEW OF DIRECT NEXUS BETWEEN THE TWO. IT IS THE SETTLED PRO POSITION OF LAW THAT FOR CLAIMING DEPRECIATION THE ASSETS MUST BE OWNED BY THE ASSESSEE AND MUST BE USED FOR BUSINESS PURPOSES. ALTHOUGH THE COOLERS IN THE INSTANT CASE HAVE BEEN OWNED BY THE ASSESSE E BUT THE FACT REMAINS THAT THESE ARE USED BY THE VENDORS / BOTTL ERS WHO SOLD THE BEVERAGES MANUFACTURED BY CONCERNS OTHER THAN THE ASSESSEE. THEREFORE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT (A) AND ACCORDINGLY UPHOLD THE SAME.' 24.1 HE SUBMITTED THAT IT WAS NOT THE SUBMISSION TH AT USER OF THE COOLERS FOR BEVERAGES IS USER FOR THE CONCENTRATE BUT THAT USER OF THE COOLERS AT THE RETAIL OUTLETS INCREASES THE CONSUMPTION OF THE BEV ERAGES AND CONSEQUENTLY THE SALES OF THE APPLICANT'S CONCENTRATE. THIS VIEW HAS BEEN FOLLOWED IN THE ASSESSMENT YEARS 2001-02 TO 2004-05. REFERRING TO THE WRITTEN SYNOPSIS HE DREW THE ATTENTION OF THE BENCH TO THE FOLLOWING AN D SUBMITTED THAT THERE ARE TWO MISTAKES APPARENT IN THE SAID CONCLUSION : (I) FIRST, THE HON'BLE TRIBUNAL APPEARS TO HAVE LO ST SIGHT OF ITS OWN FINDING IN AY 1997-98 IN THE CONTEXT OF SERVICE EXPENSES THAT 'IT IS AN ADMITTED FACT THAT THE BOTTLERS MANUFACTURE BEVERAGES FROM THE 'CONCENT RATES' PURCHASED FROM THE ASSESSEE COMPANY. AN INCREASE IN THE VOLUME OF BUSIN ESS OF THE BOTTLERS HAS A DIRECT EFFECT OF INCREASING THE VOLUME OF BUSINE SS OF THE ASSESSEE. IT CAN BE NOBODY'S CASE THAT THE VOLUME OF THE BUSINESS OF THE ASSESSEE COMPANY AND OF THE BOTTLERS WAS NOT INTRICATELY LINKE D WITH EACH OTHER ...' (SEE PARA 26 OF THE AY 1997-98 ORDER AT PAGE 148 OF THE COMPILATION); (II) THE PRINCIPLE THAT ANYTHING DONE IN RESPECT OF BEVERAGES HAS A DIRECT NEXUS TOWARDS CONCENTRATE HAS BEEN ACCEPTED BY THE TRIBUNAL ALSO IN THE CONTEXT OF MARKETING AND ADVERTISEMENT EXPENSES. I T WAS HELD THAT EXPENSES FOR ADVERTISEMENT OF BEVERAGES IS INCURRED FOR THE BUSI NESS OF MANUFACTURE OF CONCENTRATE AND DEDUCTIBLE (PAGE 63 OF THE ORDER FO R A.Y. 1998-99 TO 2004- 05); (III) THE BOMBAY HIGH COURT IN THE APPLICANT'S O WN CASE (COCA COLA INDIA PVT. LTD VS. CCE 242 ELT 168 - COPY HANDED OVER AT THE TIME OF HEARI NG AND REFERRED TO AT PAGE 27 OF THE ORDER FOR A.Y. 1998-99 TO 2004 -05) HAS HELD (PARA 21) 26 'THAT ADVERTISEMENT OF SOFT DRINK ENHANCES THE MARK ETABILITY OF THE CONCENTRATE IN OUR OPINION IS NO LONGER RES INTEGRA '; (IV) IT IS RESPECTFULLY SUBMITTED THAT AFTER THE FINDING THAT THERE IS A DIRECT NEXUS BETWEEN THE BUSINESS OF MARKETING BEVERAGES A ND THE BUSINESS OF MANUFACTURING CONCENTRATES, IT IS AN APPARENT MISTA KE TO TAKE THE VIEW THAT COOLERS WHICH ARE USED FOR STORING BEVERAGES ARE NO T USED FOR THE BUSINESS OF THE APPLICANT. (V) SECONDLY, AND IN ANY EVENT THE HON'BLE TRIBUNAL APPEARS TO HA VE TOTALLY LOST SIGHT OF THE ALTERNATIVE SUBMISSION URGED BY THE AP PLICANT THAT ONCE AN ASSET IS PART OF THE BLOCK, THE USER OF THE BLOCK HAS TO BE SEEN AND NOT THAT OF INDIVIDUAL ASSETS. (VI) THIS ISSUE IS COVERED IN FAVOUR OF THE APPL ICANT BY THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN GR SHIPPING LTD. (INCO ME TAX APPEAL NO 598 OF 2009 DATED 20 TH JULY 2009). IN THIS CASE, THE ASSESSEE'S BARGE HAD SUFFERED AN ACCIDENT AND SUNK. AS THE BARGE WAS NOT USED DURING ANY PART OF THE YEAR, THE AO AND CIT(A) HELD THAT THE ASSESSEE IS NOT ENTITLED T O CLAIM DEPRECIATION THEREON. HOWEVER, THE ITAT MUMBAI BENCH VIDE AN ORDER DATED 17 TH JULY 2008 IN ITA NO 822/MUM/2005 HELD THAT UNDER THE CONCEPT OF THE 'BLOCK OF ASSET' INTRODUCED WITH EFFECT FROM 0104.1988 INDIVIDUAL ASSETS HAVE LOST THEIR IDENTITY AND FOR THE PURPOSE OF ALLOWING THE DEPRECIATION THE TEST OF US E HAS TO BE APPLIED TO THE ENTIRE BLOCK AND NOT TO INDIVIDUAL ASSET. THE HIGH COURT APPROVED THE SAID VIEW OF THE TRIBUNAL VIDE ITS ORDER DATED 29 TH JULY 2009 IN ITA NO 598 OF 2009. (VII) ATTENTION WAS INVITED TO THE DEFINITION OF THE TERM 'BLOCK OF ASSETS' IN SECTION 2(11) OF THE ACT AND TO 32(1)(I)(II) WHICH P ROVIDES THAT DEPRECIATION SHALL BE ALLOWED AT THE PRESCRIBED PERCENTAGE ON THE WRIT TEN DOWN VALUE OF THE BLOCK OF ASSETS. THE RESULT IS THAT THE INDIVIDUAL ASSETS LOSE THEIR IDENTITY ONCE THEY ENTER THE BLOCK OF ASSETS. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE TRIB UNAL ON THIS ISSUE BE RECALLED OR NECESSARY ORDER MODIFYING THE ORDER OF THE TRIBUNAL BE PASSED. 25. THE LD. SPECIAL COUNSEL FOR THE REVENUE ON THE OTHER HAND STRONGLY OPPOSED THIS GROUND AND SUBMITTED THAT THE TRIBUNAL HAD CONSCIOUSLY TAKEN A VIEW AND THERE IS NO MISTAKE APPARENT FROM RECORD WHICH REQUIRES RECTIFICATION. 26. WE HAVE CONSIDERED THE RIVAL ARGUMENTS AND FIND SOME FORCE IN THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE. IT W AS URGED AT THE TIME OF HEARING BY THE LD. COUNSEL FOR THE ASSESSEE THAT ON CE AN ASSET IS PART OF THE BLOCK, THE USER OF THE BLOCK HAS TO BE SEEN AND NOT THAT OF INDIVIDUAL ASSETS. WE FIND THE TRIBUNAL WHILE DECIDING THE ISSUE HAS U PHELD THE ORDER OF THE 27 CIT(A) ON THE GROUND THAT FOR CLAIMING DEPRECIATION THE ASSET MUST BE OWNED BY THE ASSESSEE AND MUST BE USED FOR THE BUSI NESS PURPOSES AND HELD THAT IN THE INSTANT CASE ALTHOUGH COOLERS ARE OWNED BY THE ASSESSEE BUT THESE ARE NOT USED BY THE ASSESSEE BUT USED BY VENDORS OR BOTTLERS WHO SOLD THE BEVERAGES MANUFACTURED BY CONCERNS OTHER THAN ASSES SEE. HOWEVER, THE ALTERNATE CONTENTION THAT ONCE AN ASSET IS PART OF THE BLOCK, THE USER OF THE BLOCK HAS TO BE SEEN AND NOT THAT OF INDIVIDUAL ASS ET HAS NOT BEEN CONSIDERED. THEREFORE, TO THIS EXTENT A MISTAKE AP PARENT FROM RECORD HAS CREPT IN THE ORDER OF THE TRIBUNAL WHICH IN OUR OPI NION REQUIRES RECTIFICATION. THEREFORE, THE FOURTH ISSUE IN THE MISCELLANEOUS APPLICATION BY THE ASSESSEE, I.E. DEPRECIATION ON COOLERS FOR A .Y. 2000-01 TO 2004-05 REQUIRES FRESH ADJUDICATION. THE ORDER OF THE TRIB UNAL IS RECALLED FOR THE LIMITED PURPOSE OF ADJUDICATION OF GROUND OF APPEAL NO.4 BY THE ASSESSEE FOR A.Y. 2000-01 AND SIMILAR GROUNDS FOR OTHER YEAR S. 27. THE FIFTH ISSUE IN THE MISCELLANEOUS APPLICATIO N FILED BY THE ASSESSEE RELATES TO MISTAKE IN REMAND OF GROUND RELATING TO MARKETING EXPENSES FOR A.Y. 2004-05. 28. AFTER HEARING BOTH THE SIDES, WE FIND THAT FOR THE EARLIER ASSESSMENT YEARS, I.E. A.Y. 1999-2000 TO 2003-04 THE TRIBUNAL HAS NOTED THAT THE GROUND RAISED BY THE ASSESSEE RELATING TO MARKETING EXPENSES HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE IN A.Y. 1998-99 A ND HAS FOLLOWED THE SAME. HOWEVER, FOR A.Y. 2004-05 THE ISSUE OF MARKE TING EXPENSES HAS BEEN ERRONEOUSLY RESTORED TO THE FILE OF THE ASSESS ING OFFICER. WE, THEREFORE, MODIFY PARA 175 OF THE ORDER OF THE TRIB UNAL AND DIRECT THE SAME TO BE READ AS UNDER : 28 WE FIND SIMILAR ISSUES HAVE BEEN DECIDED IN ASSESSEES APPE AL VIDE ITA NO.1258/PN/2003. WE HAVE ALREADY DECIDED THESE ISSUES AND THE GROUNDS RAISED BY THE ASSESSEE RELATING TO MARKETING EXPENSES HAVE BEEN ALLOWED AND THE GROUNDS RELATING TO SERVICE CHARGES HAVE BEEN RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. FOLLOWING THE SAME RATIO, THE ISSUES IN THE GROUNDS OF ASSESSEE FOR THE IMPUGNED ASSESSMENT Y EAR RELATING TO MARKETING EXPENSES ARE ALLOWED AND THAT OF SERVICE CHARGES ARE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICAT ION. 29. IN THE RESULT, M.A. NO.156/PN/2010 BY THE ASSES SEE FOR A.Y. 1997- 98 IS ALLOWED, M.A. NO.119/PN/2010 BY THE REVENUE F OR A.Y. 1997-98 IS DISMISSED AND M.A. NO.150/PN/2010 BY THE ASSESSEE F OR A.Y. 1998-99 TO 2004-05 IS PARTLY ALLOWED IN THE TERMS INDICATED TH EREIN. PRONOUNCED IN THE OPEN COURT ON 06-12-2013. SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PANDA) JUDICIAL MEMBER ACCOUN TANT MEMBER SATISH PUNE DATED: 06 TH DECEMBER 2013 COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A)-I, PUNE 4. CIT-I, PUNE 5. THE D.R, A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE