MAHINDRA AND MAHINDRA LTD, V. CIT 2(2),

MA 397/MUM/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 9416 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-10-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 20-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K G KUTTY
• Assessee Lawyers: H P MAHAJANI
• Keywords: Revenue expenditure
• Section: 14A; 194C

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B MUMBAI . , , BEFORE SHRI D. MANMOHAN, VICE PRESIDENT / AND !'# , !$ %& SHRI RAJENDRA, ACCOUNTANT MEMBER M.A. NO. 397/MUM/2012 (ARISING OUT OF ITA NO. 7999/MUM/2011) ASSESSMENT YEAR 2007-08 MAHINDRA & MAHINDRA LIMITED, MAHINDRA TOWERS, GROUND FLOOR, CORPORATION TAXATION, WORLI ROAD NO.13,WORLI, MUMBAI 400 018. PAN: AAACM 3025 E VS. THE DY. COMMISSIONER OF INCOME TAX - 2(2), AAYAKAR BHAVAN, M.K. MARG, MUMBAI-400 020. (APPLICANT) ( RESPONDENT) APPLICANT BY : SHRI H.P. MAHAJANI RESPONDENT BY : SHRI K.G. KUTTY ' ($ / DATE OF HEARING : 03-08-2012 )* ' ($ / DATE OF PRONOUNCEMENT : 03-10-2012 %!+ / O R D E R PER RAJENDRA, A.M. ASSESSEE-COMPANY FILED ITS RETURN OF IN COME FOR AY.2007-08 ON 29.10.2007 DECLARING INCOME OF RS. 9,58,35,15,817/-.ASSESSMENT ORDER U/S.143(3) R.W.S.144C (13) OF THE INCOME-TAX ACT, 1961 (ACT) WAS PASSED B Y THE ASSESSING OFFICER (AO) ON 24.10.2011 DETERMINING THE TOTAL INCOME AT RS. 25,8 8,51,62,830/-. AO MADE CERTAIN ADDITIONS/DISALLOWANCES WHILE FINALISING THE INCOME OF THE APPELLANT-COMPANY. AGAINST THE SAID ORDER ASSESSEE PREFERRED AN APPEAL BEFORE THE TRIBUNAL VIDE ORDER DTD. 08.06.2012 APPEAL FILED BY THE ASSESSEE WAS PARTLY ALLOWED. 2. WITH REFERENCE TO THE SAID ORDER ASSESSEE HAS FILED AN APPLICATION U/S. 254 (2) OF THE ACT. IN THAT APPLICATION ASSESSEE-COMPANY H AS OPINED THAT CERTAIN MISTAKES WERE APPARENT FROM RECORD IN THE ORDER PASSED ON 08 .06.2012, THAT SAID MISTAKES M.A. NO. 397/MUM/2012 MAHINDRA & MAHINDRA LIMITED 2 SHOULD BE ACCORDINGLY RECTIFIED. FIRST MISTAKE POI NTED OUT BY THE ASSESSEE PERTAINS TO GROUND NO.2 THAT DEALT WITH CLAIM FOR DEVELOPMENT E XPENSES IN RESPECT OF COMPACT PROJECT FOR TRACTORS. IT WAS POINTED OUT THAT FOLL OWING THE ORDER FOR A.Y. 2006-07 GROUND NO.2 WAS DECIDED AGAINST THE ASSESSEE, THAT IN THE A.Y. 2006-07 EXPENDITURE AMOUNTING TO RS.69.37 LAKHS WAS ALLOWED AS REVENUE EXPENDITURE OUT OF THE TOTAL EXPENDITURE OF RS. 1.89 CRORES, THAT DIRECTION SHOU LD HAVE BEEN GIVEN FOR ALLOWING REVENUE PORTION OF EXPENDITURE FOR THE A.Y. 2007-08 . 2.1. WE HAVE PERUSED THE MATERIAL BEFORE US. IT IS A FA CT THAT WHILE PASSING ORDER FOR THE A.Y. 2006-07OUT OF THE TOTAL EXPENDITURE IN CURRED BY THE ASSESSEE-COMPANY, UNDER THE HEAD DEVELOPMENT EXPENSES INCURRED FOR COMPACT PROJECT FOR TRACTORS , A PORTION OF THE EXPENDITURE WAS ALLOWED AS REVENUE E XPENDITURE BY US. IT IS FOUND THAT IN THE PREVIOUS AY ASSESSEE-COMPANY HAS CLAIMED THA T EXPENDITURE OF RS.69.37 LAKHS INCURRED BY IT WAS REVENUE IN NATURE. AS THE DETAI LS FILED BY THE ASSESSEE PROVED THAT THE CLAIM MADE BY IT WAS FACTUALLY CORRECT, SO, SAM E WAS ALLOWED. IN THE YEAR UNDER CONSIDERATION ASSESSEE-COMPANY IS REQUESTING FOR AL LOWING THE SIMILAR DEDUCTION. WE FIND THAT IT HAS NOT FILED ANY DETAILS OF REVENUE E XPENDITURE BEFORE US, HENCE SAME COULD NOT BE ALLOWED. IN THE SUMMARY OF ISSUES IN APPEAL, DIRECTIONS OF THE DRPS AND FINAL ASSESSMENT FILED FOR THE AY 2007-08, THE RE IS NO MENTION OF REVENUE EXPENDITURE, WHEREAS IN THE SUMMARY OF ISSUES FOR A Y 2006-07 CLAIM ABOUT REVENUE EXPENDITURE AMOUNTING TO RS.69.37 LAKHS WAS SPECIFI CALLY MADE. IN ABSENCE OF DETAILS OF EXPENDITURE FALLING UNDER THE HEAD REVENUE EXPEN DITURE, WE ARE NOT IN A POSITION TO AMEND OUR ORDER. WE HAVE PERUSED THE PAGE NOS. 210 -211 OF THE PAPER BOOK. IT CONTAINS THE DETAILS OF TOTAL EXPENDITURE, AMOUNTIN G TO RS.3.91 CRORES, INCURRED TOWARDS NEW PRODUCT DEVELOPMENT. FROM THESE DETAIL S IT IS NOT POSSIBLE FOR US TO DETERMINE THE AMOUNT OF EXPENDITURE INCURRED UNDER THE HEAD REVENUE EXPENDITURE. HOWEVER, AO IS DIRECTED TO VERIFY THE CLAIM MADE BY THE ASSESSEE IN THIS REGARD AND IF ANY PORTION OF THE EXPENDITURE IS FOUND TO BE REVEN UE-NATURE, SAME MAY BE ALLOWED AS PER THE ORDERS PASSED BY US FOR AY 2006-07 (PARA NO S. 4 AND 4.1 OF THE SAID ORDER). 3. NEXT SUBMISSION OF THE ASSESSEE IS ABOUT DISALLOWAN CE MADE U/S. 14A OF THE ACT (GROUND NO.8). FOLLOWING THE ORDER FOR THE EAR LIER A.Y., MATTER WAS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER (AO). AU THORISED REPRESENTATIVE (AR) SUBMITTED THAT THE SAID GROUND OF APPEAL WAS NOT PR ESSED, HENCE SHOULD HAVE BEEN TREATED AS DISMISSED. AS THE ASSESSEE DID NOT PRES S THE GROUND OF APPEAL NO.8, OPERATIVE PART OF THE ORDER WITH REGARD TO THE SAID GROUND SHOULD BE READ AS UNDER: GROUND NO.8 PERTAINS TO DISALLOWANCE MADE BY THE A SSESSING OFFICER ON ACCOUNT OF SECTION 14A OF THE ACT.AR SUBMITTED THAT THE ASSESS EE COMPANY DOES NOT WANT TO PRESS THE SAID GROUND OF APPEAL. AS THE ASSESSEE IS NOT P RESSING IT, SAME SHOULD BE TREATED AS DISMISSED. 4. NEXT SUBMISSION IN THE RECTIFICATION APPLICATION AB OUT GROUND NO.12 THAT DEALS WITH THE DISALLOWANCE MADE U/S. 40A (IA) OF THE ACT . AR SUBMITTED THAT AMOUNT INVOLVED WAS RS. 9.42 CRORES NOT RS.9.42 LAKHS AS M ENTIONED IN THE ORDER. 4.1. AFTER PERUSING THE MATERIAL BEFORE US, WE FIND THAT SUBMISSION MADE BY THE AR IS FACTUALLY CORRECT. ACCORDINGLY, WE DIRECT THAT OPERATIVE PART WITH REGARD TO GROUND NO. 12 SHOULD BE READ AS UNDER: M.A. NO. 397/MUM/2012 MAHINDRA & MAHINDRA LIMITED 3 GROUND NO.12 PERTAINS TO DISALLOWANCE MADE BY THE AO UNDER SECTION 40A(IA)IN RESPECT OF THE YEAR END PROVISIONS AMOUNTING TO RS. 9.42 CRORES. SAME ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE. AS THE FACTS AN D CIRCUMSTANCES REMAIN THE SAME, WE ALLOW THE APPEAL OF THE ASSESSEE WITH REFERENCE TO GROUND NO.12. 5. NEXT SUBMISSION OF THE ASSESSEE-COMPANY IS ABOUT GR OUND NO.13 WHICH DEALS WITH DEDUCTION U/S. 35(2AB) OF THE ACT. IT WAS POI NTED OUT BY THE AR WHILE ALLOWING THE CLAIM MADE BY THE ASSESSEE NAMES OF NASIK AND K ANDIVILI UNITS WERE SWAPPED. 5.1. IT IS FOUND FROM THE RECORDS THAT CLAIM MADE BY THE ASSESSEE U/S. 35 (2AB) WAS ALLOWED IN THE A.Y. 2006-07. WHILE ALLOWING THE CLA IM, IT WAS HELD THAT ASSESSEE WAS ENTITLED FOR CLAIM WITH REFERENCE TO NASHIK R & D U NITS.AO WAS FURTHER DIRECTED THAT THE CLAIM FOR KANDIVALI UNIT SHOULD BE ALLOWED AS A ND WHEN APPROVAL WAS RECEIVED FROM DSIR. FOLLOWING THE ORDERS OF A.Y. 2006-07, WE ALLOW THE CLAIM MADE BY THE ASSESSEE FOR NASIK R&D UNIT. AO IS DIRECTED TO ALL OW CLAIM IN RESPECT OF KANDIVALI UNIT AS AND WHEN APPROVED BY THE DSIR. 6. SUBMISSIONS WITH REGARD TO GROUND NO.10 WERE NOT PR ESSED BY THE AR DURING HEARING PROCEEDINGS BEFORE US. SO, SAME STAND DISM ISSED. 6.1 THE NEXT ERROR POINTED BY THE APPLICATION IS ABOUT GROUND NO. 14 THAT DEALS WITH DISALLOWANCE MADE U/S. 40A (IA) OF THE ACT. I T IS POINTED OUT THAT AT PG. 21 OF THE ORDER, LAST LINE OF THE PARAGRAPH WAS NOT COMPLETED . WE HAVE PERUSED THE MATERIAL AND FIND THAT THERE IS TYPOGRAPHICAL ERROR IN THE S ENTENCE AND IT HAS TO BE COMPLETED AS INDICATED BY THE ASSESSEE-COMPANY. EFFECTIVE PART OF THE SAID PARAGRAPH SHOULD BE READ AS UNDER: SALE ON BEHALF OF THE PRINCIPAL NEXT SUBMISSION MADE IN 254(2) IS ALSO RELATED TO G ROUND NO.14 AND IT IS ABOUT SERVICE COUPONS. AS PER THE ASSESSEE THAT IS SUE WITH REGARD TO SECTION 194 C OF THE ACT WAS NOT ADJUDICATED UPON. AS PER THE ASSES SEE-COMPANY ONLY GROUND ON WHICH DISALLOWANCE WAS MADE WAS ABOUT DISALLOWANCE U/S.40 A (IA) OF THE ACT. IT WAS FURTHER SUBMITTED THAT LIMITED ISSUE BEFORE THE TRI BUNAL WAS WHETHER DISALLOWANCE WAS WARRANTED U/S.40A (IA) OF THE ACT, THAT ISSUE WITH REFERENCE TO SEC.194H WAS DECIDED IN FAVOUR OF THE ASSESSEE, THAT TRIBUNAL HAD HELD T HAT THERE WAS NO PRINCIPAL AGENT RELATION BETWEEN THE ASSESSEE-COMPANY AND THE DEALE RS. WE HAVE PERUSED THE MATERIAL AVAILABLE TO US. WE W OULD LIKE TO GO THE BASIS OF CONTROVERSY WITH REGARD TO PAYMENTS MADE BY THE ASSESSEE COMPANY TO THE DEALERS TOWARDS SERVICE COUPONS. DEALER INCENTIVE AND SERV ICE COUPON COMMISSION HAS BEEN DEALT BY THE AO AT PG NOS. 49-56 OF THE ASSESSMENT ORDER. AS PER THE AO, ASSESSEE HAD INCURRED EXPENDITURE AMOUNTING TO RS. 3549.01 L AKHS ON ACCOUNT OF SERVICE COUPONS TO DEALERS. AO ENQUIRED FROM THE ASSESSEE COMPANY WAS WHY THE EXPENSES INCURRED ON SERVICE COUPONS SHOULD NOT BE DISALLOWE D, BECAUSE TAX WAS NOT DEDUCTED WHILE MAKING PAYMENTS TO THE DEALERS. THE ASSESSEE REPLIED AS UNDER : WITH RESPECT TO ISSUE OF SERVICE COUPONS WE SUBMIT AS FOLLOWS: WHEN COMPANY SELLS VEHICLES TO THE DEALERS,IT ALSO PROVIDES WHAT ARE KNOWN AS SERVICE COUPONS WHICH THE DEALER ENDORSES TO THE CUSTOMER. THESE SERVICE COUPONS WHICH THE DEALER ENDORSES TO THE CUSTOMERS. THESE SERVICE COUPONS E NABLE THE ULTIMATE CUSTOMER TO OBTAIN M.A. NO. 397/MUM/2012 MAHINDRA & MAHINDRA LIMITED 4 FROM THE DEALER CERTAIN NUMBER OF FREE SERVICES FOR THE VEHICLE. THE CUSTOMER HAS TO PRESENT THE SERVICE COUPONS TO THE DEALER AT THE TIME OF AV AILING THE FREE SERVICE. THE DEALER IN TURN PRESENTS THE COUPONS TO COMPANY WHICH THEN PAYS TH E DEALER A PRE-DETERMINED SUM OF MONEY BY WAY OF REIMBURSEMENT OF COST OF SERVICING THE VE HICLES. FROM THE MECHANISM OF SERVICE COUPONS STATED ABOVE IT IS CLEAR THAT SERVICING IS ESSENTIALLY A POST-SALE ACTIVITY THOUGH THE COMMITMENT TO PROVIDE REIMBURSEMENT TO THE DEALER FOR THE COST OF THE FREE SERVICES IS FACTORED INTO THE SELLING P RICE; THIS CANNOT BE VIEWED AS AN ACTIVITY CARRIED OUT IN THE COURSE OF BUYING OR SELLING OF V EHICLES. SECONDLY AND MORE IMPORTANTLY IN THIS CASE THE DEAL ER DOES NOT RENDER ANY SERVICE OR CARRY OUT ANY WORK FOR THE COMPANY. IF AT ALL, THE DEALER RENDERS SERVICE TO THE CUSTOMER WHOSE VEHICLE HE SERVICES IN EXCHANGE FOR FREE SERVICE CO UPONS. THE ONLY CONTRACTUAL OBLIGATION THAT THE COMPANY AGREES TO DISCHARGE IS TO REIMBURSE THE DEALER A SPECIFIED SUM OF MONEY IN EXCHANGE FOR SERVICE COUPONS. SINCE THE DEALER NEITHER PROVIDES ANY SERVICE TO TH E COMPANY NOR DOES HE CARRY OUT ANY WORK FOR THE COMPANY WE SUBMIT THAT QUESTION OF APP LYING TDS ON SERVICE COUPONS DOES NOT ARISE. AFTER CONSIDERING THE REPLY OF THE ASSESSEE COMPANY , AO HELD AS UNDER: THE SERVICE COUPON COMMISSION GETS SQUARELY COVERE D BY THE PROVISIONS OF SECTION 194C AS THE ASSESSEE HAS GIVEN A CONTRACT OF DOING FREE SERVICE OF THE VEHICLES TO THE FINAL CONSUMERS ON ITS BEHALF TO THE DEALERS. THE MONEY FOR SERVICE CHARGES IS ULTIMATELY PAID BY THE FINAL BUYER OF THE VEHICLE AND IS PART AND PARC EL OF THE INVOICE TO IT. THIS AMOUNT IS PASSED ON BY THE ASSESSEE COMPANY TO THE DEALER ONLY WHEN THE SERVICES ARE RENDERED BY THE DEALER TO FINAL BUYER. THIS AMOUNT IS THUS ESSENTIALLY SERVI CE CHARGES PAID BY THE ASSESSEE COMPANY TO THE DEALERS FOR GIVING FREE SERVICE TO THE CUSTOMER . ASSESSEE HAS FAILED TO DEDUCT ANY TDS AS PER THE PROVISIONS OF LAW AND THEREFORE THIS AMOUNT IS NOT ALLOWABLE AS PER THE PROVISIONS OF SECTION 40(A)(IA.) HE FINALLY HELD THAT THE ASSESSEE HAD FAILED TO DED UCT TDS ON SERVICE COUPONS COMMISSION OF RS.3,549.01 LAKHS-AS PER THE PROVISIO NS OF SECTION 40(A)(IA) (PARA17.6 PG.54 OF THE ORDER) 6.1.1. WHILE DECIDING THE APPEAL, WE HAVE DEALT SEPARATELY WITH SECTION 194H AND 194C R.W.S.40A (IA) OF THE ACT. WE HAVE HELD THAT DEALERS INCENTIVE WAS NOT COVERED BY PROVISIONS OF SECTION 194 H AS THE SALE WAS ON P RINCIPAL TO PRINCIPAL BASIS. AS FAR AS 194C IS CONCERNED, WE WERE OF THE OPINION THAT FULL FACTS ABOUT THE SERVICE COUPON COMMISSION WERE NOT AVAILABLE ON THE FILE AND HENCE MATER SHOULD BE RESTORED BACK TO THE FILE OF THE AO. AFTER HEARING THE RIVAL SUBMISSIONS IN THIS REGARD WE FOUND THAT ISSUE NEEDED TO BE RELOOKED AT THE LE VEL OF THE AO. DECISION GIVEN WITH REGARD TO DEALERS INCENTIVE SCHEME (194H) CANNOT BE IMPORTED FOR DECIDING THE ISSUE OF SERVICE COUPON COMMISSION (194C). BOTH DO NOT O PERATE IN THE SAME FIELDS. IN THESE CIRCUM- STANCES WE ARE OF THE OPINION THAT TH ERE IS NO MISTAKE APPARENT FROM RECORD WITH REGARD TO REMITTING BACK THE MATTER TO THE FILE OF THE AO. SUBMISSIONS MADE BY THE ASSESSEE-COMPANY ABOUT SERVICE COUPONS STAND REJECTED. 6.2. AS FAR AS PAYMENT OF RS. 8,22,74,390/- BEING FINANC IAL SUBVENTION CHARGES IS CONCERNED, IN RESPECT OF WHICH, TAX WAS DEDUCTED, A O IS DIRECTED TO MAKE VERIFICATION M.A. NO. 397/MUM/2012 MAHINDRA & MAHINDRA LIMITED 5 ABOUT THE CLAIM MADE BY THE ASSESSEE-COMPANY. HE I S FURTHER DIRECTED TO CALCULATE TAX LIABILITY OF THE ASSESSEE ONLY AFTER CONSIDERING TH E SAID CLAIM OF THE COMPANY. 7. NEXT SUBMISSION OF THE ASSESSEE IS ABOUT DISALLOWAN CE MADE U/S.40A (IA) OF THE ACT AMOUNTING TO RS.1349.89 CRORES. AS PER THE APP LICANT ORDER OF THE CIT(A) NASIK WAS NOT CONSIDERED WHILE DECIDING THE ISSUE ABOVE D ISALLOWANCE. DURING THE ASSESSMENT PROCEEDINGS AO FOUND THAT IN THE CASE OF NASIK UNIT THERE WAS A DEFAULT WITH REGARD TO PROVISIONS OF TDS. HE OBSERVED THAT TDS AO HAD PASSED AN ORDER UNDER SECTION 194C R.W.S.20(1) AND 201(1)A OF THE A CT. IT WAS FURTHER MENTIONED THAT THE CIT(A) HAD CONFIRMED THE ORDER OF THE TDS AO. THE ASSESSEE APPROACHED THE TRIBUNAL. THE ITAT IN ITS ORDER DATED 01.06.2010 R EMITTED THE MATTER BACK TO THE FILE OF THE CIT(A). WE FIND THAT THE CLAIM MADE BY THE A SSESSEE IS FACTUALLY CORRECT- CIT(A) NASIK HAD VIDE ITS ORDER DATED 11.11.2011 HA D ACCEPTED THE CLAIM OF THE ASSESSEE-COMPANY. PARTIALLY MODIFYING OUR ORDERS W E DIRECT THAT OPERATIVE PART FOR THE SAID ISSUE (PARA 6.1 OF PG. NO. 22 OF THE ORDER) SH OULD BE READ AS UNDER : AS THE MATTER HAS BEEN DECIDED IN FAVOUR OF THE AS SESSEE-COMPANY BY THE CIT(A) VIDE HIS ORDER DATED 11.11.2011.HE HAS HELD, AFTER OBTAINING A REMAND REPORT FROM THE AO, THAT NO DEFAULT WAS COMMITTED BY THE ASSESS EE-COMPANY WITH REGARD TO TAX DEDUCTED AT SOURCE. CONSIDERING THE ABOVE FACT WE D ECIDE GROUND NO.16 IN FAVOUR OF THE ASSESSEE. 8. IN THE ADDITIONAL GROUNDS OF MISCELLANEOUS APPLICAT ION, ASSESSEE-COMPANY FURTHER SUBMITTED THAT GROUND NOS. 21 & 22 WERE DIS MISSED BY THE TRIBUNAL RELYING ON THE DECISION OF THE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. (284 ITR 323), THAT JURISDICTIONAL HIGH COURT IN THE CASE OF PRUTHVI BROKERS & SHAREHOLDERS PVT. LTD. HAD HELD THAT EVEN IF A CLAIM WAS NOT MAD E BEFORE THE AO IT COULD BE MADE BEFORE THE APPELLATE AUTHORITIES, THAT JUDGMENT IN THE CASE OF GOETZE (INDIA) LTD. DID NOT IMPINGE THE POWERS OF THE TRIBUNAL U/S. 254. I N THE LIGHT OF THE SUBSEQUENT DECISION OF THE JURISDICTIONAL HIGH COURT DT. 21.06 .2012 I.E. PRUTHVI BROKERS (SUPRA)ORDER DT. 08.06.2012 PASSED BY THE TRIBUNAL COULD BE SAID TO SUFFER FROM MISTAKE APPARENT FROM RECORD, THAT FOLLOWING THE DE CISION OF THE HONBLE SUPREME COURT IN THE CASE OF SAURASHTRA KUTCH STOCK EXCHANG E LTD (305 ITR 227) MISTAKES APPEARING IN GROUND NOS. 21 & 22 SHOULD BE RECTIFIE D. WE HAVE PERUSED THE MATTER BEFORE US. IT IS FOUND THAT HONBLE BOMBAY HIGH C OURT VIDE ITS ORDER DT. 08.06.2012 IN THE CASE OF PRUTHVI BROKERS & SHAREHOLDERS PVT. LTD., (SUPRA) HAS HELD THAT APPELLATE AUTHORITIES CAN ACCEPT THE NEW CLAIMS THA T WERE NOT MADE BEFORE THE AO. WE WOULD LIKE TO RE-PRODUCE THE PARA 11(B) OF THE O RDER: IT IS CLEAR, THEREFORE, THAT AN ASSESSEE IS ENTITLE D TO RAISE NOT MERELY ADDITIONAL LEGAL SUBMISSIONS BEFORE THE APPELLATE AUTHORITIES, BUT I S ALSO ENTITLED TO RAISE ADDITIONAL CLAIMS BEFORE THEM. THE APPELLATE AUTHORITIES HAVE THE DISCRETION WHETHER OR NOT TO PERMIT SUCH ADDITIONAL CLAIMS TO BE RAISED. IT CANN OT, HOWEVER, BE SAID THAT THEY HAVE NO JURISDICTION TO CONSIDER THE SAME. THEY HAVE THE JURISDICTION TO ENTERTAIN THE NEW CLAIM. THAT THEY MAY CHOOSE NOT TO EXERCISE THEIR J URISDICTION IN A GIVEN CASE IS ANOTHER MATTER. THE EXERCISE OF DISCRETION IS ENTIR ELY DIFFERENT FROM THE EXISTENCE OF JURISDICTION. RESPECTFULLY FOLLOWING THE ABOVE ORDER OF THE BOMBA Y HIGH COURT, WE DIRECT THE AO TO ALLOW THE CLAIM MADE FOR DEDUCTION U/S. 3 5 OF THE ACT AFTER VERIFICATION OF M.A. NO. 397/MUM/2012 MAHINDRA & MAHINDRA LIMITED 6 THE EVIDENCES PRODUCED BY THE ASSESSEE-COMPANY. ASS ESSEE IS DIRECTED TO FILE THE DETAILS OF EXPENDITURE BEFORE THE AO. AS FAR AS GR OUND NO. 22 IS CONCERNED, AO IS DIRECTED TO ALLOW THE CLAIM MADE BY THE ASSESSEE-CO MPANY. MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE-COM PANY STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD OCTOBER, 2012. SD/- SD/- ( . / D. MANMOHAN) ( !'# / RAJENDRA) / VICE PRESIDENT !$ %& / ACCOUNTANT MEMBER MUMBAI, ,% DATE: 3 RD OCTOBER, 2012. TNMM %!+ %!+ %!+ %!+ ' '' ' -(. -(. -(. -(. /!.*( /!.*( /!.*( /!.*( / COPY OF THE ORDER FORWARDED TO : 1. APPLICANT 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR B BENCH, ITAT, MUMBAI 6. GUARD FILE 0.( -( //TRUE COPY// %!+ %!+ %!+ %!+ / BY ORDER, / DY./ASSTT. REGISTRAR , / ITAT, MUMBAI