Rexcel Pharmaceutical Ltd.,, New Delhi vs Assessee

M/s. Rexcel Pharmaceuticals Ltd. Vs. The CIT(Appeals)-XVIII, 12th Floor, Devika Towers, New Delhi. 6, Nehru Place, New Delhi-110 019

(PAN AAACR 5708 F)

(Appellant) (Respondent)

Date of hearing : 19.02.2015 Date of Pronouncement : 29.04.2015

Appellant by : Sri V.P. Gupta & Anurav Kumar, Advocate Sh. Ameresh Chaudhary & Sh. Subirs,ARs. Respondent by : Shri Vikram Sahay, Sr. DR

ORDER

PER SHRI C.M. GARG, AM:

1. This appeal has been preferred by the assessee against the order of the

Commissioner of Income Tax (Appeals)-XVIII, New Delhi dated 04.01.2013 in

Appeal No.315/11-12 for AY 2009-10.

2. The assessee has raised the following grounds in this appeal:-

"1. That the CIT(A) erred in not correctly appreciating the facts and the documents submitted by the Appellant in respect of employment as well as aggregate payment of Rs. 12,60,194/- made to the ex-employees, namely, Ms. Christen D'Mello and Mr. Chetan Madan and upholding the ITA No.1625/Del /2013 2

disallowance by wrongly observing that appointment letter had been filed for different person and no evidence for payment had been filed.

2. That the CIT(A) also erred in discussing the allowability of sum of Rs.2,42,543/- written off in the Books of Account in respect of which amount there was not even a ground before her as the deduction had been allowed by the Assessing Officer himself.

3.1 That the CIT(A) also failed to appreciate the legal and factual position in respect of disallowance made by the Assessing Officer of Rs.63,74,000/- under clause (iii) of Rule 80(2) of the Income Tax Rules on account of administrative expenses @ 0.5% of average investment of Rs. 127.48 crores in the partnership firm and upholding the disallowance to the extent of full amount of Rs.63,74,000/-, which amount was in excess of actual expenses debited to Profit & Loss Account on account of administrative activities.

3.2 That the CIT(A) also failed to appreciate that total expenses debited to Profit & Loss Account on account of personal cost and administrative expenses were only Rs.17,99,167/- and a. amount of Rs. 12,60,194/- being the ex-gratia debited as personal cost had been already' disallowed by the Assessing Officer and disallowance has also been separately upheld by CIT(A);

b. amount of Rs.3,25,315/- was debited on account of bad debt written off which in any case cannot be said to be the expenditure incurred during the year in relation to investment activities and out of the same an amount of Rs.82,722/- had also been separately disallowed by the Assessing Officer and disallowance has also been upheld by CIT(A); and c. after excluding the amount of ex-gratia payment and bad debts written off there was only an amount of Rs. 2,13,668/- debited to Profit & Loss account, which was on account of legal compliances and could not be said to be related to investment activities and, therefore, no disallowance in respect thereof was also called for.

3.3 That keeping in view the facts and circumstances of the case no disallowance under clause (iii) of Rule 80(2) of Income Tax Rules was called for in the facts and circumstances of the case of the appellant. 3.4 That CIT(A) also erred in holding that the Rule 80 does not provide for limiting the amount of disallowance computed by applying the formula specified in the said Rule to the extent of total expenses claimed by the appellant as deduction.

4. That the CIT(A) also erred in upholding the disallowance made by the Assessing Officer for amount of Rs. 82,772/- being the deposits of Rs.10,000/- each with four Government Departments and of Rs. 5,000/- each with two Government Departments aggregating to Rs. 50,000/- and interest thereon accrued of Rs.32,722/- which could not be recovered without appreciating that the amounts had been written off by the company in the Books of account for the reason that the same could not be recovered ITA No.1625/Del /2013 3

for quite long period and the cost of following up the recovery thereof would have been more than the amount of deposits with each of the Department and accordingly deduction for the same is allowable either as bad debts or business loss."

3. Apropos Ground no.1, the Ld. counsel for the assessee submitted that the

CIT(A) has erred in not correctly appreciating the facts and the documents

submitted by the assessee before the Assessing Officer as well as First Appellate

Authority in respect of employment as well as aggregate payment of

Rs.12,60,194/- made to ex-employees Ms. Christen D'Mello and Mr. Chetan

Madan. Ld. counsel further pointed out that the CIT(A) wrongly observed that the

appointment letter had been filed related different persons and no evidence for

payment had been filed. Ld. counsel pointed out that before the AO the assessee

submitted a copy of the letter dated 15.11.2011 and also submitted that the assessee

company had paid ex-gratia payment to Mr. Chetan Madan and Ms. Christen

D'Mello amounting to Rs.12,59,591/- and Rs.603/- was the contribution to the

provident fund and other funds and the said amount is related to deduction made

out of amount paid to Mr. Chetan Madan. Ld. counsel further pointed out that the

assessee company filed copies of appointment letters of these employees vide

written submission dated 28.11.2011 before the AO but the same were not

considered properly. Ld. counsel also pointed out PB. Pages 33 to 36 and

submitted that Ms. Christen D'Mello was appointed as Secretary w.e.f. 6.10.1999

and on her death ex-gratia payment was made to her legal heir/successor Mr.

Trevor D'Mello amounting to Rs.5,28,427/- by way of Cheque dated 23.07.2008. ITA No.1625/Del /2013 4

4. Ld. counsel further pointed out PB. Pages 37 to 40 and submitted that Mr.

Chetan Madan was appointed as marketing executive to be posted at Ratlam,

Madhya Pradesh w.e.f. 01.4.1997 and a payment of ex-gratia was made to him of

Rs.7,02,832/- which cannot be doubted in any manner. Ld. counsel also pointed

out that the Assessing Officer disallowed these amounts without any basis wrongly

holding that the assessee company bore ex-gratia liability either on behalf of M/s

Ranbaxy Laboratories or M/s Solrex Pharmaceuticals Company because

appointment letters issued by the companies were placed before the AO which

were not properly considered.

5. Replying to the above, Ld. Departmental Representative (DR) pointed out

that the assessee company claiming the payment of ex-gratia to the heirs of Late

Ms. Christen D'Mello and appointment letter has been addressed to Ms. Christen

D'Souza which created suspicion and therefore, the same was rightly disallowed

by the AO. Ld. DR further pointed out that no evidence was placed by the assessee

in regard to payment made to Mr. Chetan Madan and appointment letter filed by

the assessee in regard to Ms. Christen D'Mello was in respect of differently named

persons i.e. Mr. Christen D'Souza, therefore, these ex-gratia payments were rightly

disallowed.

6. On careful consideration of above submissions, we clearly observed that the

assessee company filed appointment letters of Ms. Christen D'Souza and Mr.

Chetan Madan before the AO and ex-gratia payment was made to the heirs of Late ITA No.1625/Del /2013 5

Ms. Christen D'Mello and no evidence regarding payment to Mr. Chetan Madan

has been furnished before the authorities below. However, we are of the considered

view that the Assessing Officer has raised allegation against the assessee that no

employee was on the role of assessee company and impugned payment has been

made either on behalf of M/s Ranbaxy Laboratories Ltd. or M/s Solrex

Pharmacetuicals Company but this allegation has been made on the basis of doubt

without bringing out any sufficient material or evidence. In this situation, when the

quantum of payment has not been doubted and the assessee company is contended

that Ms. Christen D'Souza worked as a Secretary from 6.10.1999 and Mr. Chetan

Madan worked as marketing executive posted at Ratlam from 01.04.1997. We,

therefore, are of the considered view that it would be just and proper to allow

assessee to show evidence of services rendered by them and evidence payment of

ex-gratia payment as claimed by the assessee for the assessment year under

consideration. Accordingly, this issue requires examination and verification at the

end of AO and therefore, the same is restored to the file of AO for proper

verification and examination in the manner as indicated above and after affording

due opportunity of hearing to the assessee and without being prejudice with the

earlier assessment order and observation in the impugned order. Accordingly,

Ground No.1 of the assessee is deemed to be allowed for statistical purposes. ITA No.1625/Del /2013 6 Ground Nos. 2 & 4

7. Apropos Ground Nos. 2 &4, Ld. counsel for the assessee submitted that the

Assessing Officer was not justified in disallowing the amount of Rs.82,772/-

debited to the P&L account as irrecoverable dues from Government department

cannot be ascertained unrecoverable. Ld. counsel pointed out that assessee

company deposited Rs.10,000/- each with four government department and

Rs.5000/- each with two Government departments aggregating to Rs.50,000/- and

interest thereon accrued of Rs.32,722/- could not be recovered due to bad

mechanism of working of the relevant government departments. Accordingly,

deduction for the same is allowable either as bad debts or as business loss. Ld.

counsel further pointed out that the Assessing Officer in Para 5 of the assessment

order has noted past dues to their employees amounting to Rs.2,42,543/- but the

same was not disallowed and not added to the taxable income of the assessee and

CIT(A) without any basis picked this figure for also upholding and making

disallowance in this regard. Ld. counsel further contended that the Assessing

Officer did not ask any details/explanation of evidence in this regard and the

CIT(A) was not correct in holding that assessee has not submitted any detail like

name of the assessee or amount dues from the employee for the claim of expenses.

Ld. counsel vehemently contended that without any examination and verification

by the AO or by the CIT(A) herself, the impugned amount cannot be disallowed

and hence, the CIT(A) was not justified in holding that the amount does not ITA No.1625/Del /2013 7

represented a bad debts as the same amounts were never been claimed as business

assets and therefore, on the basis of principal accountancy the same cannot be

claimed as bad debts. Ld. counsel also pointed out that the assessee is prepared to

submit all required details and evidence to support his claim.

8. Ld. DR replied that the assessing Officer did not ask any detail or

explanation about the amount of bad debt shown by the assessee and the Assessing

Officer also did not make any disallowance in this regard but the CIT(A) enjoying

co terminus powers with the AO, rightly disallowed the claim in absence of details

or expenditure, names of employees and amount dues to them for the claim of bad

debts, therefore, the impugned disallowance is sustainable. Ld. DR vehemently

contended that the deposit and interest recoverable from Government department

cannot be held as bad debt if the assessee is not making any effort to recover this

amount from the relevant government department.

9. In this regard to issue of allowability of Rs.2,42,543/-, we clearly observed

that the Assessing Officer has pointed out this amount but has not made any

addition or disallowance in this regard. But the CIT(A) picked up this issue and

made a disallowance by holding that the requires details names of the employees

and amount dues is not ascertainable. It was contended by the Ld. DR that there

was no issue before the CIT(A) in regard to Ground No.2 but Form No.35, we

clearly observe that this issue has been raised by the assessee before the CIT(A) as

Ground No.1. We further note that the Assessing Officer ignored to adjudicate the ITA No.1625/Del /2013 8

allowability amount of bad debt to the employees and the CIT(A) made the

addition by holding that no details and evidence have been filed in this regard

without providing any opportunity of being heard for the assessee. Therefore, this

issue was not properly adjudicated by the Revenue authorities below and the

disallowance and addition has been made in a casual manner. We may point out

that if the Assessing Officer has raised same issue it has not made any addition

then the CIT(A) cannot picked up this issue making further disallowance and

enhancement without adopting due opportunity of hearing of the assessee by

simply holding that no details or evidence have been filed. In this situation, we

have no alternate to restore to the file of the AO for proper examination and

verification and affording due opportunity of hearing for the assessee and without

being prejudice by the earlier assessment order or impugned order. Accordingly,

Ground No.2 of the assessee is deemed to be allowed for statistical purposes as

indicated above.

10. In respect to disallowance of Rs.82,722/-, ld. counsel for the assessee has

placed reliance on the decision of ITAT Chennai 'C' Bench in the case of

Quintegra Solutions (P) Ltd. Vs. ITO reported in (2012) 75 DTR (Chennai) (Trib.)

302 and submitted that there is no distinction between private debts and

government debts for the purpose of Section 36(1) of the Act and if despite of

several application the assessee is not able to recover deposit and interest from the

Government departments then the same should be allowed as bad debts and the ITA No.1625/Del /2013 9

same cannot be disallowed. Ld. DR supported the order of the authorities below

and submitted that without showing any efforts for recovery it cannot be

ascertained that the amount dues from government departments have become

irrecoverable.

11. On careful consideration of above submission, we note that the order of the

ITAT, Chennai Bench in the case of Quintegra Solutions (P) Ltd. (supra) has

observed as under:-

"7.1. The first ground raised by the revenue in the present appeal is that the CIT(A) has erred in deleting the addition made by the AO of 70,54,506/- against bad debts written off. The main grievance of the Revenue is that the assessee has written off even the amounts receivable from the Government of India. The assessee has satisfied all the conditions for writing off of the debts as provided under s. 36(1) of the Income-tax Act, 1961. When the debts are so written off, it has been held by the Hon'ble Bombay High Court in the case of Director of IT (International Taxation) vs. Oman International Bank SAOG (2009) 223 CTR (Bom) 382 : (2009) 21 DTR (Bom) 193 : (2009) 313 ITR 128 (Bom), that the bad debts are deductible. This judgment of the Hon'ble Bombay High Court has been upheld by the Hon'ble Supreme Court by dismissing the SLP filed by the Revenue [(2009) 313 ITR (St.) 3]. There is no distinction between private debts and Government debts for the purpose of s. 36(1) of the Act. So also there is no guarantee that the assessee may get the payment from the Government companies within a reasonable time. Therefore, Government debts as such do not make any difference in the present case. The CIT(A)) has rightly deleted the addition."

12. In view of above, we are inclined to hold that the CIT(A) was not justified in

holding that the government departmental dues cannot be claimed as irrecoverable,

until and unless such a decision is taken by the respective government department

and a letter to this effect issued by it. However, we are of the considered view

neither the Assessing Officer nor the CIT(A) has examined the issue properly as

they have not asked any explanation from the assessee to show that the claim

amount of deposit and interest is due from which department, from which date and ITA No.1625/Del /2013 10

what efforts have been made by the assessee company to recover this amount.

Even the details of departments and the dates of deposit and interest accrued

thereon has not been given, therefore, we again find it appropriate, just and proper

to restore this issue to the file of the AO for proper verification and examination in

the light of observation made by the coordinate Bench of the Tribunal in the case

of Quintegra Solutions (P) Ltd. (supra). Accordingly Ground No.4 of the assessee

is deemed to be allowed for statistical purposes as indicated above.

Ground No.3

13. Apropos this ground, Ld. counsel for the assessee drawn our attention to PB.

Page 79, the P&L account for the year ended on 31.03.2009, and submitted that the

assessee has claimed personal cost of Rs.12,60,194/- being ex-gratia debited as

personal cost and amount of Rs.3,25,315/- on account of bad debt written off and

after excluding amount of ex-gratia payment and bad debts written off there was

only an amount of Rs.2,13,668/- debited to P&L account, on account of legal

compliances and the same could not be said to be related to investment activities

and therefore, no disallowance in respect thereof can be made u/s 14A of the Act

r.w.c.(iii) of Rule 8D(2) of IT Rules, 1962. Ld. DR fairly accepted that the assessee

has shown personal cost of Rs.12,60,194/- and general and administrative expenses

amounting to Rs.5,38,983/- as per schedule 15 to the statement of the account,

which include amount of bad debts written off Rs.3,25,315/- expenditure on ITA No.1625/Del /2013 11

general and administrative remained of Rs.2,13,668/- actually debited to the profit

and loss account.

14. Ld. counsel for the assessee placing rejoinder to the above submission

submitted that the disallowance cannot exceed the expenditure actually claimed by

the assessee. He placed reliance on the decision of ITAT 'C' Bench dated

23.03.2012 in the case of M/s Gillette Group India Pvt. Ltd. Vs. ACIT reported in

2012-(ID1)-GJX-0207-TDEL.

15. On careful consideration of rival submissions and contention, at the very

outset, we note that the Hon'ble jurisdictional Delhi High Court in Company

Petition No.385 of 2012 judgment dated 07.12.2012 has sanctioned the claim of

amalgamation u/s 391 & 394 of the Companies Act 1956 between the assessee

company and other four companies in to Ranbaxy Drug Ltd. lying their respective

share holders and creditors. From the order of the Hon'ble Punjab & Haryana High

Court dated 06.0.2013 in Company Petition No.80 of 2012 (O&M) connected with

company petition no. 57 of 2012, we also observed that the scheme of

amalgamation of the assessee company and Solrex Pharmaceuticals company Ltd.

has been sanctioned. In the light of these judgments, we in safely noted that the

assessee company and M/s Solrex Pharmaceuticals Ltd. have been amalgamated

with Ranbaxy Drug Ltd. subsequently.

16. In view of decision of ITAT Bench in the case of M/s Gillette Group India

Pvt. Ltd. (supra), we respectfully accept this preposition that the disallowance u/s ITA No.1625/Del /2013 12

14A r.w.r. 8D of the IT Rules cannot exceed the amount which has been actually

claimed by the assessee in the P&L account on general and administrative

expenses. In the present case, the Assessing Officer has made disallowance of

Rs.64,23,249/-. From the impugned order of the CIT(A), we note that the addition

was upheld the disallowance made by the AO was confirmed by the first appellate

authority with the following observation and conclusion:-

"5.2 I have carefully considered the assessment order and the submissions filed by the appellant. The facts of the case as per assessment order are that the assessee Company has invested interest bearing funds borrowed from M/s. Ranbaxy Laboratories Ltd. in its partnership firm M/s. Solrex Pharmaceuticals Company from which it has earned exempt income. The Assessing Officer computed a disallowance of Rs. 49,249/- under clause (i) and Rs.63,74,000/- under clause (iii). The appellant has mainly submitted that the amount of disallowance under clause

(iii) are more than the total expenses debited by it to the Profit & Loss Account.

Perusal of the assessment order shows that the Assessing Officer has expressed his satisfaction before taking recourse to rule 8D. On careful examination of the matter, I find that any income, whether exempt or not, can only be earned after incurring some expenditure. However, usually such expenditure is not segregated in the accounts of the assessee and remains clubbed with overall administrative financial and other expenses of the business as a whole. If any income is exempt from tax because it is not included in the total income by virtue of section 10 of the Income-tax Act, 1961, section 14A of the Act prohibits allowance of any expenditure incurred in relation thereto. Income from deployment of funds in shares earned by way of dividend is not included in total income by virtue of the provisions contained in section 10(34) of the Act, whether the shares are held as stock-in-trade or as investment. As dividend income does not form part of total income under the Act, the provisions of section 14A are applicable. The allowance of expenditure in relation to dividend income is thus not admissible in computing the income of an assessee whether the shares are held as investment or they are held on trading account as stock-in-trade.

When the expenditure of interest is incurred in relation to income which does not form part of total income, disallowance is made irrespective of the fact whether any income is earned by the assessee or not as Section 14A does not envisage any such exception. The provisions of section 14A, controls the computation of income under the provisions of the Act and has overriding effect over other provisions. Therefore, even if the expenditure is allowable under any other provision of the Act, disallowance is made because of the overriding effect of section 14A of the Act.

5.3 The Legislature by using the expression "expenditure in relation to income which does not form part of the total income" in section 14A of the Act, in no way ITA No.1625/Del /2013 13

indicates that it does not encompass disallowance of expenditure incurred in relation to the income in the absence of actual receipt of income during the relevant previous year. On the contrary, the term "in relation to" is wide enough to include in its sweep expenditure both "for making or earning income" and "incurred wholly and exclusively for the purposes of business carried on by the assessee".

When there is no income, it cannot form part of anything and certainly it does not, in any case form part of total income. When dividend is not taxable at all, the interest pertaining to that would also not be allowable because there is no taxable income of the assessee against which such interest can be allowed. 5.4 Further, sub-section (2) of section 14A empowers the AO to determine the amount of expenditure incurred in relation to exempt income in accordance with the method as may be prescribed. The method has since been prescribed by insertion of rule 80 of the LT. Rules, 1962 w.e.f. 24.03.2008. Sub-section (3) of section 14A mandates that the above provisions of sub-section (2) shall also apply to a case where an assessee claims that no expenditure has been incurred by him in relation to exempt income. The constitutional validity of section 14A read with sub-sections (1), (2) and (3) thereof has since been upheld by the Hon'ble Bombay High Court vide its order dated 12.08.2010 in the case of Godrej & Boyee Mfg. Co. Ltd. vs. DCIT in ITA No. 626 of 2010 and writ petition no. 758 of 2010 after dwelling on the above issue in great details and considering decisions of various Courts and Tribunals on the matter including that of Hon'ble ITAT, Mumbai (Special Bench) in the case of ITO vs. Oaga Capital Management Pvt. Ltd. (2009) 117 ITO 169. The Hon'ble High Court has also upheld the validity of Rule 80, w.e.f. AY 2008-09. The relevant portion of the aforesaid order of the Hon'ble High Court is reproduced hereunder:

74. Our conclusions in this judgment are as follows:

i. Dividend income and income from mutual funds falling within the ambit of Section 10(33) of the Income Tax Act 1961, as was applicable for Assessment Year 2002-03 is not includible in computing the total income of the assessee. Consequently, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to such income which does not form part of the total income under the Act, by virtue of the provisions of Section 14A(1);

ii) The payment by a domestic company under Section 1150(1) of additional income tax on profits declared, distributed or paid is a charge on a component of the profits of the company. The company is chargeable to tax on its profits as a distinct taxable entity and it pays tax in discharge of its own liability and not on behalf of or as an agent for its shareholders. In the hands of the shareholder as the recipient of dividend, income by way of dividend does not form part of the total income by virtue of the provisions of Section 10(33). Income from mutual funds stands on the same basis;

iii) The provisions of sub section (2) and (3) of Section 14A of the Income Tax Act 1961 are constitutionally valid;

iv) The provisions of Rule 80 of the Income Tax Rules as inserted by the Income Tax (Fifth Amendment) Rules 2008 are not ultra vires the provisions of ITA No.1625/Del /2013 14 Section 14A, more particularly sub section (2) and do not offend Article 14 of the Constitution;

v) The provisions of Rule 80 of the Income Tax Rules which have been notified with effect from 24 March 2008 shall apply with effect from Assessment Year 2008-09;"

In ACIT v Citicorp Finance (India) Limited [300 ITR 398(AT Mum)) it was held that the provisions of sub sections (2) & (3) are procedural in nature and therefore section 14A will apply to all pending matters.

The Hon'ble Calcutta High Court in Dhanuka & Sons vs. CIT 12 Taxmann.com 227 (Cal.) held that:

"In our opinion, the mere fact that those shares were old ones and not acquired recently is immaterial. It is for the assessee to show the source of acquisition of those shares by production of materials that those were acquired from the funds available in the hands of the assessee at the relevant point of time without taking benefit of any loan. If those shares were purchased from the amount taken in loan, even for instance, five or ten years ago, it is for the assessee to show by the production of documentary evidence that such loaned amount had already been paid back and for the relevant assessment year, no interest is payable by the assessee for acquiring those old shares. In the absence of any such materials placed by the assessee, in our opinion, the authorities below rightly held that proportionate amount should be disallowed having regard to the total income and the income from the exempt source. In the absence of any material disclosing the source of acquisition of shares which is within the special knowledge of the assessee, the assessing authority took a most reasonable approach in assessment."

The claim of the appellant that the amount of disallowance under clause (iii) is more than the total expense claimed by it is not accepted as section 14A is a overriding section and rule 80 does not provide a limit to the amount of disallowance to be computed after applying the formula specified in the said rule. Considering the above, the impugned addition of Rs.64,23,249/- made by the AO by applying rule 80 read with section 14A of the Act is confirmed. This ground of appeal is dismissed."

17. In view of above, we observed that the CIT(A) has rejected the contention of

the assessee that the disallowance u/s 14A of the Act r.w.r. 8D of the IT Rules

cannot exceed the amount of actual general and administrative expenses claimed

by the assessee. This is not a proper justifiable approach and contrary to the basic

principal vivid from the order of the Tribunal in the case of Gillette India Pvt. Ltd. ITA No.1625/Del /2013 15

(Supra). We may further point out that the Assessing Officer has noted that the

excess amount of Rs.64,23,249/- debited to P&L account is being added back to

the net profit but we are unable to see any basis for this segregation by the

Assessing Officer for calculating and making and disallowance u/s 14A of the Act

r.w.r. 8D(2) of the IT Rules 1962.

18. At this juncture, we respectfully take cognizance on the decision of Hon'ble

jurisdictional High Court of Delhi in the case of CIT Vs. Taikisha Engineering

India Ltd. reported in (2015) 370 ITR 338 (Delhi) wherein a clear mode of

calculation of disallowance has been given. Under the above facts and

circumstances of the case, we find it appropriate that the issue of disallowance u/s

14A of the Act r.w.r. 8D of the IT Rules 1962 requires proper examination and

verification at the end of AO and we restore the same to the file of AO with a

direction that the issue should be decided afresh. In the light of decision of Hon'ble

jurisdictional High Court of Delhi in the case of Taikisha Engineering India

Ltd.(Supra) and decision of coordinate Bench of the ITAT Delhi in the case of M/s

Gillette Group India Pvt. Ltd. (supra). Accordingly Ground No.3 & 3.1 to 3.4 are

also restore to the file of the AO for afresh adjudication as per our aforesaid

directions and after affording due opportunity of hearing for the assessee and

without being prejudiced from the earlier assessment and impugned order.

Accordingly, Ground Nos. 3 & 3.1 to 3.4 of the assessee are deemed to be allowed

for statistical purposes as indicated above.

ITA No.1625/Del /2013 16

19. In the result, appeal of the assessee is deemed to be allowed in the manner as

mentioned and stated above.

The Order pronounced in the open Court on 29th April, 2015.

Sd/- Sd/- (B.C. MEENA) (C.M. GARG) Accountant Member Judicial Member

Dated: 29th April, 2015. Aks/-

Copy forwarded to 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi