Income Tax Appellate Tribunal - Mumbai
Galxo India Ltd., Mumbai vs Department Of Income Tax on 24 August, 1999
IN THE INCOME TAX APPELLATE TRIBUNAL
"E" BENCH, MUMBAI
BEFORE SHRI D.K. AGARWAL, JUDICIAL MEMBER, AND
SHRI J. SUDHAKAR REDDY, JUDICIAL MEMBER
ITA no. 6027/Mum./1999
(Assessment Year : 1996-97)
Glaxo India Limited
Dr. Annie Besant Road
Worli, Mumbai 400 020
PAN - AAACG4414B ....................... Appellant
v/s
Jt. Commissioner of Income Tax
Special Range-53, Aayakar
Bhavan, 101, M.K. Road
Mumbai 400 020 ................... Respondent
ITA no. 5392/Mum./1999
(Assessment Year : 1996-97)
Jt. Commissioner of Income Tax
Special Range-53, Aayakar
Bhavan, 101, M.K. Road
Mumbai 400 020 ....................... Appellant
v/s
Glaxo India Limited
Dr. Annie Besant Road
Worli, Mumbai 400 020
PAN - AAACG4414B ................... Respondent
2 Glaxo India Limited
ITA no. 6027/Mum./1999
ITA no. 5392/Mum./1999
C.O. no. 005/Mum./2000
C.O. no.005/Mum./2000
(Arising out of ITA no. 5392/Mum./2000)
(Assessment Year : 1996-97)
Glaxo India Limited
Dr. Annie Besant Road
Worli, Mumbai 400 020
PAN - DC-SR-53 ....................... Cross Objector
v/s
Jt. Commissioner of Income Tax
Special Range-53, Aayakar
Bhavan, 101, M.K. Road
Mumbai 400 020 ................... Respondent
Revenue by : Mr. B. Jaya Kumar
Assessee by : Mr. Percy J. Pardiwalla a/w
Mr. Niraj Sheth
Date of Hearing - 21.11.2011 Date of Order - 23.12.2011
ORDER
PER BENCH These cross appeals are directed against the impugned order dated 24th August 1999, passed by the Commissioner (Appeals)-XII, Mumbai, for assessment year 1996-97, and the cross objection preferred by the assessee, is arising out of Revenue's appeal in ITA no.5392/Mum./1999. The appeals and cross objection are clubbed together and for the sake of convenience these are being disposed off by way of this consolidated order.
We first proceed to dispose off the appeal preferred by the assessee in ITA no.6027/Mum./1999.
2. Ground no.1, is on the issue of disallowance of gift articles.
3 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000
3. The assessee had given gifts exceeding ` 1,000 per article to doctors, stockiest, dealers, employees and business associates, which do not bear the logo of the assessee company. The auditors made a remark in their report under section 44AB of the Income Tax Act, 1961 (for short "the Act") that gift articles which do not bear company's logo, are not considered for disallowance under section 6B. However, the Assessing Officer made disallowance under section 6B to the extent of ` 50,854.
4. Being aggrieved, the assessee-company carried the matter before the first appellate authority, wherein the Commissioner (Appeals), while relying on CBDT Circular dated 6th May 1943, confirmed the disallowance under section 37(1) of the Act, holding that there is no evidence to show that these gift articles were presented to persons for the purpose of business of the assessee. Aggrieved, the assessee is in further appeal before the Tribunal.
5. After hearing both the parties and on perusal of the records available before us, we find that the issue for our adjudication is covered in favour of the assessee and against the Revenue by a co-ordinate bench decision of this Tribunal in assessee's own case for all the earlier assessment years i.e., i.e., from 1984-85 to 1995-96. The facts being same, we hold that the expenditure is incurred for the purpose of business. Keeping in view the aforesaid findings of the Tribunal, we set aside the impugned order passed by the Commissioner (Appeals) and allow the ground raised by the assessee.
6. Ground no.2, is on the issue of disallowance of guest house expenses under section 37(4) of the Act.
7. The assessee-company had been maintaining accommodations at Calcutta, Bharuch and New Delhi. During the year under assessment, the assessee-company incurred expenditure to the tune of ` 15,63,417 and claimed deduction accordingly. The Assessing Officer made disallowance to the extent of 60% of the total expenditure holding that some of the areas of these accommodations are used for holding conferences, staff training 4 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000 programmes, briefing sessions, business meetings, interviews, etc. The Assessing Officer, while following the estimate made by his predecessor-in- office for assessment year 1982-83, made disallowance under section 37(4) @ ` 9,36,050.
8. The assessee, being aggrieved, carried the matter before the first appellate authority, wherein the Commissioner (Appeals), while following his own order for assessment year 1994-95, confirmed the disallowance made by the Assessing Officer. Aggrieved, the assessee is in further appeal before the Tribunal.
9. Both the parties agree before us that this issue is partially covered in favour of the assessee by the decisions of co-ordinate bench of the Tribunal in assessee's own case for assessment years 1992-93 to 1993-94, 1994-95 and 1995-96, wherein the Tribunal has allowed the deduction to the extent of canteen expenses only and the balance were disallowed. Consequently, we set aside the impugned order passed by the Commissioner (Appeals) and direct the Assessing Officer to allow expenditure to the extent of canteen expenses only, as has been done by the Tribunal in assessee's own case for the aforesaid assessment years. Accordingly, the assessee succeeds on this issue.
10. Ground no.3, is on the issue of disallowance of depreciation on share dilution expenses.
11. The Assessing Officer observed that the claim of assessee-company that part of the expenditure should be capitalized and depreciation and investment allowance should be allowed, were rejected in assessment year 1984-85 and 1986-87 on the ground that the assessee is not in a position to prove nexus between the money raised and the capital projects to be undertaken. He held that since the amount capitalized cannot be apportioned to the cost of building or plant and machinery to be purchase, the question of allowing depreciation and investment allowance does not arise.
5 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000
12. On appeal, the Commissioner (Appeals) confirmed the action of Assessing Officer.
13. Before us, both the learned representatives agree that the issue of disallowance of depreciation on share dilution expenses is covered in favour of the assessee and against the Revenue by the co-ordinate bench decisions rendered in assessee's own case for assessment years 1984-85, 1986-87 to 1988-89, 1989-90 to 1991-92, 1992-93 to 1993-94, 1994-95 and 1995-96 respectively. Consistent with the view taken therein, we set aside the impugned order passed by the Commissioner (Appeals) and allow the ground raised by the assessee.
14. Ground no.4, is on the issue of disallowance under section 43B of the Act, on excise duty on finished goods.
15. The Assessing Officer noticed that the assessee offered for taxation the amount of excise duty of ` 4,27,07,623, claimed in earlier year and claimed the deduction of ` 4,52,91,000. Thus, the net amount of ` 25,83,377, was claimed in the return of income. He, however, held that since the claim of the assessee for deduction of excise duty under section 43B, relating to closing stock of finished goods was rejected in assessment year 1995-96, on the ground that the same had already been claimed as deduction by virtue of non-inclusion of excise duty in the valuation of finished goods, the same was not added to the income in this year in working out the disallowance under the provisions of section 43B.
16. On appeal, the Commissioner (Appeals), while relying on his own orders passed in assessment years 1994-95 and 1995-96, in assessee's own case, dismissed the claim made by the assessee. Aggrieved, the assessee is in further appeal before the Tribunal.
17. Before us, both the parties agree that this issue is covered in favour of the assessee and against the Revenue by the judgment of Hon'ble Supreme 6 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000 Court in Berger Paints India Ltd. v/s CIT, [2004] 266 ITR 099 (SC), wherein Their Lordships have held that the entire amount of excise duty/customs duty paid by the assessee in a particular accounting year is allowable under section 43B of the Act, as a deduction in respect of that year, irrespective of the amount of excise duty/customs duty included in the valuation of the assessee's closing stock at the end of the accounting year as relating thereto. Respectfully following the aforesaid judgment of the Hon'ble Supreme Court, we set aside the impugned order passed by the Commissioner (Appeals) and allow the ground raised by the assessee.
18. The assessee has also pointed out that the Assessing Officer has refused to follow the decision of the Tribunal for assessment year 1984-85. In view of our above decision, the Assessing Officer is directed to implement the decision of the Tribunal. We order accordingly.
19. Ground no.5(a), is on the issue of reduction of estimated written down value of block of assets of Family Product Undertaking which was transferred as a going concern at a sump price of ` 180,00,00,000, in the previous year relevant to the assessment year 1995-96.
20. Both the parties submitted that the issue has been set aside by the Tribunal in the earlier assessment year in ITA no.1420/Mum./1999 and ITA no.1514/Mum./1999, for assessment year 1995-96, order dated 16th June 2006, wherein the Tribunal, at Para-36/Page-33, held that the transaction was not exigible to capital gain tax. However, as regard the WDV of the block of assets of the assessee, the Assessing Officer was directed to deduct from such block, the WDV of assets transferred to M/s. HEINZ before allowing depreciation to the assessee. This direction was given as the Tribunal felt that otherwise the assessee will claim depreciation on the assets which were transferred. We set aside the impugned order passed by the Commissioner (Appeals) and restore this issue back to the file of Assessing Officer with similar directions. We order accordingly. This ground is, thus, allowed for statistical purposes.
7 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000
21. Ground no.5(b), is on the issue of disallowance of depreciation in respect of part of building 72 leased to M/s. Stock Holding Corporation of India.
22. The Assessing Officer, in his assessment order, stated as follows:-
The claim of the assessee is scrutinized. Out of the supplemental depreciation claim, an amount of ` 4,000 being depreciation on depreciation allowed in A.Y. 1995-96 on the office building given on lease by the company is to be disallowed. Also to be disallowed is the depreciation included in the main schedule in respect of asset of family products undertaking of the assessee sold during A.Y. 1995-96. The submissions of the assessee are subject to the above observations, depreciation claim is allowed as under:-
Depreciation claimed as per ` 12,50,45,137
Main Schedule attached to
return of income
Depreciation claimed as per ` 24,648
Supplemental Statements
12,50,69,785
Less: Deprecation to be
disallowed as discussed
above. Out of supple-
mental statements ` 4,000
In respect of family
products undertaking sold ` 1,50,80,000 ` 1,50,84,000
during the A.Y. 1995-96
Depreciation to be allowed ` 10,99,85,785
==========
23. On appeal, the Commissioner (Appeals) held that the said building has been taxed as income from house property and, therefore, does not form part of block of assets under the head "Building" in respect of the business of the assessee. Since the leased assets are not part of the block of the assets of the business, the Assessing Officer has rightly disallowed the assessee's claim for depreciation. Aggrieved, the assessee is in further appeal before the Tribunal.
8 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000
24. After hearing both the parties, we find that the issue for our adjudication is covered against the assessee and in favour of the Revenue by the decisions of Mumbai Bench of the Tribunal in assessee's own case for assessment years 1994-95 and 1995-96, wherein the Tribunal has held as follows:-
ITA no.4494/Mum./1999 and ITA no.4356/Mum./1999 "40. We have heard the learned representatives of the parties and perused the record. We find that this issue is covered against the assessee by the decision of the ITAT in assessee's own case for AY 1990-91 to 1991-92 in ITA Nos. 8341/Bom/93 and 7742/Bom/94, order dated 3i January, 2007 wherein the ITAT held that since the assessee has leased the part of the building, therefore, the same was not used for the purpose of business or profession, no deduction on account of depreciation is allowed. Since the facts in the case under consideration is similar as that of AY 1990-91 and 1991-92, we respectfully following the decision of the ITAT and in the light of that we confirm the order of the CIT(A) in sustained the disallowance of ` 40,000 made on account of depreciation on leased building."
25. Keeping in view the aforesaid findings of the Tribunal in assessee's own case, the ground raised by the assessee is hereby dismissed.
26. Ground no.6, is on the issue of disallowance of value of closing stock of diesel oil and coal.
27. The Assessing Officer disallowed the claim made by the assessee by holding that since the said items have not been consumed in the year under appeal, the value of diesel oil as on 31st March 1996, amounting to ` 12,24,538, was added to the income of the current year.
28. On appeal, the Commissioner (Appeals), following his own order for assessment years 1994-95 and 1995-96, in assessee's own case and dismissed the appeal of the assessee. Aggrieved, the assessee is in further appeal before the Tribunal.
29. After hearing both the parties and on perusal of the records available before us, we find that the issue for our adjudication is covered in favour of 9 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000 the assessee by the decision of Mumbai Bench of the Tribunal in assessee's own case for assessment years 1986-87 to 1988-89, 1989-90 to 1991-92, 1992-93 to 1993-94, 1994-95 and 1995-96. Consistent with the view taken therein, we set aside the impugned order passed by the Commissioner (Appeals) and allow the ground raised by the assessee.
30. Ground no.7, is on the issue of disallowance of interest as income from other sources.
31. Before us, both the parties agree that this issue was earlier decided by the Tribunal in assessee's own case for assessment years 1989-90 to 1991-
92, 1992-93 to 1993-94, 1994-95 and 1995-96 respectively, wherein the Tribunal restored the issue back to the file of Assessing Officer for adjudication afresh by observing as follows:-
A.Y. 1988-89 "57. Learned counsel for the assessee supported the order of the learned CIT (A). We have considered the rival submissions as also the judicial pronouncements relied upon by the learned DR. In the case of Shree Krishna Polyester Ltd. (supra), the Bombay High Court held that interest income from investment in short-term deposit of surplus funds acquired in public issue of shares, is assessable as "income from other sources". In the case of Tuticorin Alkali Chemicals & Fertilizers Ltd.
(supra), the Supreme Court held that interest on investment of borrowed funds prior to commencement of business is to be assessed under the head "income from other sources". The decision of Punjab & Haryana High Court in the case of Rani Paliwal is not relevant as the High Court was concerned with only applicability of clause (baa) of the Explanation under section 8OHHC. In the case of Pandian Chemicals Ltd. (supra) the Madras High Court held that interest on deposits with Electricity Board made out of statutory compulsion was not profit derived from industrial undertaking. This judgment has since been confirmed by the Supreme Court (262 ITR 278). In the case of Autokast Ltd., the assessee company borrowed money for purchase of plant and machinery and earned interest income by placing it in short- term deposits with Banks till payment was made for plant and machinery. These deposits were used in bill discounting. The Supreme Court held that the interest income earned was taxable as income from other sources. In our view, the present issue has to be considered n the light of the aforesaid judgments. The relevant part of the order of the CIT (A) for the assessment year 1989-90 has been reproduced (supra). For the assessment years 1990-91 and 1991-92 also the facts are similar. We find that the exact nature of the interest 10 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000 income is not clear from the orders of the revenue authorities. In our view this issue requires reconsideration by the Assessing Officer after bringing on record the correct factual position with regard to the nature of the interest income, after allowing opportunity to the assessee. Accordingly, we restore this issue to the Assessing Officer for readjudication."
32. Consistent with the view taken by the Tribunal, we set aside the impugned order passed by the Commissioner (Appeals) and restore the issue back to the file of Assessing Officer for adjudication afresh in accordance with law. This ground is, thus, allowed for statistical purposes.
33. Ground no.8, is on the issue of disallowance under section 80HHC of the Act.
34. The Assessing Officer included the income received on sale of products and scrap of ` 2,43,00,00,000, to the total turnover. On appeal by the assessee, the Commissioner (Appeals) upheld the Assessing Officer's action by following his own order passed for assessment year 1995-96 in assessee's own case. Aggrieved, the assessee is in further appeal before the Tribunal.
35. After hearing both the parties and the material available on record, we find that the issue for our adjudication is covered against the assessee and in favour of the Revenue by the decision of this Tribunal in assessee's own case for assessment years 1989-90 to 1991-92, 1992-93 to 1993-94, 1994-95 and 1995-96, wherein the Tribunal has held as follows:-
A.Y. 1988-89 "41. The next issue pertains to only assessment year 1988-89 as per Ground No. 1 raised by the assessee regarding inclusion of sale proceeds of by-products in the total turnover, for the purpose of section 8OHHC. We have heard both the sides and have gone through the facts. In our view, no distinction can be made with regard to sale of finished product or by-product. The profit embedded in the sale of by-product forms part of the manufacturing account and, therefore, included in the business profits. Therefore, the sale should form part of the total turnover. We, therefore, confirm the order of the learned CIT(A) on this Issue."
11 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000
36. Consistent with the view taken by the Tribunal in various assessment years in assessee's own case, we dismiss the ground raised by the assessee.
37. Ground no.9, is on the issue of disallowance of interest on DPEA liability.
38. The original demand as well as the enhanced demands raised by the Revenue for DPEA liability, were challenged by the assessee by filing a writ petition before the Hon'ble Delhi High Court. Recovery of these demands including the interest demand of ` 1,17,66,00,000, was stayed by the Hon'ble Delhi High Court. The assessee, neither debited any amount in the Profit & Loss account nor paid to the Govt. The Assessing Officer was of the opinion that the interest liability has neither been accrued nor arose during the previous year in question. He, accordingly, held that, at best, it constitute a contingent liability and, therefore, the claim was disallowed since the interest has not been actually paid.
39. On appeal by the assessee, the Commissioner (Appeals), relying on his own order passed in assessee's own case for assessment year 1995-96, upheld the order of the Assessing Officer. Aggrieved, the assessee is in further appeal before the Tribunal.
40. After hearing both the parties, we find that similar issue arose in assessee's own case for earlier assessment years and the issue was decided in favour of the assessee on principle but as the amount has to be divided between two years, the matter was restored back to the file of Assessing Officer for adjudication afresh. This matter came up before the Tribunal for assessment years 1986-87, 1987-88 and 1988-89, in ITA no.959/Bom./ 1990, 4308/Bom./1991, 4908/Mum./1993 and other cases and in its order dated 6th December 2006, at Para-35/Page-137, the Tribunal held as follows:-
"In respect of assessment year 1986-87, the assessee has raised additional ground of appeal with regard to deduction of enhanced DPEA liability. Similar issue has been raised by the assessee for the 12 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000 assessment year 1987-88 by filing C.O. no.746. After considering the facts the additional ground for the assessment year 1986-87 is admitted.
(f) For all the 3 assessment years additional grounds have been raised regarding allowing deduction for interest on DPEA liability. After considering the facts these additional grounds are also admitted.
34. For the sake of convenience, the above mentioned issues reflected in the cross appeals arc dealt with together. The learned counsel for the assessee submitted that these issues have been dealt with by the Tribunal in assessee's own case for the assessment year 1984-85 vide order dated 10th March 2006 (copy at pages 1 to 20 of the Paper Book). The learned counsel invited our attention to pras 9 to 12 of the order which may be reproduced below:-
"9. Next we will consider the solitary ground to be considered in the appeal filed by the Revenue raised as item No. 10 of its grounds of appeal. The ground is that the CIT(A) has erred in allowing deduction of Rs.4,81,13,000 being liability under the Drugs (Price Control) Order 1979. This issue has already been considered by the Tribunal in assessee's own case for the assessment years 198283 and 1983-84, i.e., for the immediately preceding two assessment years. This issue was raised by the Revenue in its appeals filed before the Tribunal in ITA No. 4110/Bom./1987, for the assessment year 1982-83 and in ITA No.411/Bom/1987 for the assessment year 1983-84. While disposing of those appeals through its orders dated 31.07.1992 and 27.01.1993 respectively, the Tribunal considered the issue in detail and held that the CIT(A) was right in his finding that the said amount was to be deducted in computing the taxable income of the assessee-company. We find that the facts and circumstances relating to the issue considered by the Tribunal in its earlier orders for assessment years 1982-83 and 1983-84 are exactly similar to the facts and circumstances of the case coming up for the impugned assessment year under appeal. Therefore, we are following the earlier orders of the Tribunal passed for the assessment years 1982-83 and 1983-84 and hold that the CIT(A) has rightly allowed the claim of the assessee towards the deduction of the liability payable to the Government under the Drugs (Price Control) Order 1979. This ground of the Revenue is accordingly dismissed.
10. Next we will consider the additional grounds raised by the assessee omitted to he considered by the Tribunal in its earlier order. The first additional ground raised by the assessee is as follows:
13 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000 In view of the facts annexed to the additional ground, the Appellants submit that they are entitled to a deduction of an additional amount of Rs. 524 lakhs (Rs. 1005.13 lakhs less Rs. 481.13 Lakhs allowed vide the CIT(A)'s directions in assessment year 1984-85 being the enhanced liability as per the letter / order dated 16.11.1990 from the Government of India."
The second additional ground raised by the assessee is as follows:-
In view of the facts annexed to the additional ground, the appellants submit that they arc entitled to a deduction of Rs.184.05 lakhs in assessment year 1984-85 being interest for the period 1.7.82 to 30.6.83 on the DPEA liability as per letter / order dated 29th October 1996 from the Government of India.
Without prejudice to the above, the appellants submit that if the interest demand relating to the period 1.7.82 to 30.6.83 is held to be not allowable in the assessment year under appeal, then the same is allowable in the assessment year 1997-98, i.e., the assessment year relevant to the previous year in which the interest demand was raised against the appellants.
11. Not much pondering over the issue is necessary. As already held, the liability created by Government direction is an allowable expenditure in the hands of the assessee-
company. The character of the additional demand raised by the Government is that of the same demand originally raised by the Government. The original demand as well as the additional demand are all matter of computational details. The character of the liability is one and the same. The original demand as well as the additional demand arose out of the same context and standing orders issued by Government of India under Drugs (Price Control) 1979. The case of the interest liability is also the same. The interest payment is raised by the Government on the outstanding balance of the demand/additional demand raised under the Drugs (Price Control) Order 1979. The interest also partakes the character of principal demand. Therefore, it is also to be allowed as a deduction. We direct accordingly.
12. At the time of hearing it was brought to our notice that the additional liabilities have been allowed by the CIT(A) for the assessment year 1997-98. If the additional liability as well as the interest on liability have already been allowed by the CIT(A) for the assessment year 1997-98, the matter should rest there and they will not allowed again for the impugned assessment year 14 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000 1984-85 as it would amount to duplication. But per chance, the deductions already allowed in the assessment year 1997-98 by the CIT(A) is disturbed and vacated, then the deductions must be allowed in the impugned assessment year 1984-85 by making necessary amendments in the assessment order."
35. We have heard the learned DR and in our view the relevant issues ate settled by the Tribunals order referred to above. Accordingly, we record our finding on the relevant issues as under:-
(a) DPEA liability will be allowable, in the year in which such liability accrues. The orders of the ld. CIT(A) with regard to Ground Nos. 4, 5 and 5 of the Department, respectively fur the assessment years 1986.87, 1987-88 and 1988-89 arc confirmed.
(b) Regarding applicability of section 43B, we agree with the finding of the learned CIT(A) for the assessment year 1988-89 that this liability is not a tax, duty, cess or fee under any law leviable. Therefore, we uphold the order of the learned CIT(A) on this issue for the assessment year 1988-89.
(c) Additional claim for DPEA would be admissible on the same footing on accrual basis.
(d) Regarding determination of profits for the purpose of section 80-I, as and when any order of higher judicial forum comes, the Assessing Officer shall give effect to such order.
(e) Enhanced DPEA liability, as per additional ground of appeal raised by the assessee for the assessment year 1986-87 and the assessee's C.O. for the assessment year 1987-88, would be allowable on accrual basis.
(f) Interest liability accrues from year to year and, therefore, such liability may be allowed on this basis during each assessment year.
This disposes of the various issues mentioned above, raised by the assessee as also by the Department with regard to DPEA liability."
41. Keeping in view the aforesaid findings of the Tribunal, we set aside the impugned order passed by the Commissioner (Appeals) and restore the issue back to the file of Assessing Officer for denovo adjudication in accordance with law. Thus, this ground is allowed for statistical purposes.
15 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000
42. Ground no.10, is on the issue of disallowance of interest under section 244A of the Act.
43. Before us, the learned Counsel for the assessee relied on the Special Bench decision of the Tribunal in Avada Trading Co. (P.) Ltd. v/s ACIT, [2006] 100 ITD 131 (SB), wherein it has been held as under:-
"7. Rival contentions have been considered carefully. The question for consideration is whether interest U/s 244A granted to assessee in the proceedings U/s 143(1)(a) of the Act is taxable in the year of its receipt or in the year in which proceedings U/s 143(1)(a) attains finality. According to the charging provisions of Section 4 and 5 of the Act, the income is chargeable in the year in which it is either accrued or received as the case may be. The issue regarding accrual of income is concluded by the judgment of the Hon'ble Supreme Court in the case of E.D. Sassoon & Co. Ltd. 26 ITR 27, wherein it has been held that income accrues when right to receive is acquired and such right can be said to have been acquired when an enforceable debt is created in favour of the assessee. This legal position has been applied by the Courts including the Apex Court in various cases.
8. Let us now look at the relevant provisions of Section 244A of the Act which for the benefit of this order are stated below:
"244A. (1) Where refund of any amount becomes due to the assessee under this Act, he shall, subject to the provisions of his section, be entitled to receive, in addition to the said amount, simple interest thereon calculated in the following manner, namely:-
(a) Where the refund is out of any tax paid under section 115WJ or collected at source under section 206C or paid by way of advance tax or treated as paid under section 199, during the financial year immediately preceding the assessment year, such interest shall be calculated at the rate of one-half per cent for every month or part of a month comprised in the period from the 1st day of April of the assessment year to the date on which the refund is granted.
Provided that no interest shall be payable if the amount of refund is less than ten per cent of the tax as determined under sub-section (1) of section 115WE or sub-section (1) of section 143 or on regular assessment;
(b) in any other case, such interest shall be calculated at the rate of one-half pre cent for every month or part of a month comprised in the period or periods from the date 16 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000 or, as the case may be, dates of payment of the tax or penalty to the date on which the refund is granted.
(3) Where, as a result of an order under sub-section (3) of section 115WE or section 115WF or section 115WG or sub-section (3) of section 143 or section 144 or section 147 or section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264 or an order of the Settlement Commission under sub-section (4) of section 245D, the amount on which interest was payable under sub-section (1) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and in a case where the interest is reduced, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed form specifying the amount of the demand shall be deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly."
A bare look at the provisions of S/Section (1) reveals that as soon as any refund becomes due under any provisions of the Act, the assessee becomes entitled to receive the interest in respect of such refund calculated in the manner provided in Clause (a) and (b) of such provisions. Therefore, the moment the refund is granted, an enforceable debt is created in favour of assessee in respect of interest due on such refund. Consequently, income can be said to accrue on the date of refund itself. Therefore, when such interest is actually granted along with the refund then, in our opinion, the requirement of Section 4 and 5 of the Act are fully satisfied and the same can be taxed in the year of receipt.
9. The main contention of the assessee's Counsel is that such right is contingent as the interest so received can be varied or withdrawn after the assessment U/s 143(3). We are unable to accept such contention of assessee for the reasons given hereafter. According to the dictionary meaning, a right or an obligation can be said to be contingent when such right or obligation is dependent on something not yet certain. According to Section 244A, the only condition for grant of interest is that there must be a refund due to assessee under any provision of the Act. There is no other condition in the said provision affecting such right. Therefore, the moment a refund become due to assessee, an enforceable debt is created in favour of assessee and assessee acquires a right to receive the interest. Sub- section 3 of Section 244A only affects its quantification under certain circumstances and not the right of interest. The Hon'ble Supreme Court in the case of Shri Goverdhan Ltd., 69 ITR 675, has observed at Page-681 that once a debt is created, then the liability cannot be said to be contingent merely because it is to be quantified at later date. Under Section 244A, even the interest is quantified immediately whenever a refund is issued. In our view, the right to grant interest is absolute since existence of such right is not dependent on any event. For example, assessee is granted interest of Rs.1,000/- on the date of 17 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000 granting refund. Subsequently, U/s 244A(3), it is reduced to Rs.600/- by virtue of assessment U/s 143(3). Can it be said that right to interest did not accrue on the date of refund? In our opinion, the right of interest came into existence on the date of refund by virtue of Section 244A(1) though its quantification may or may not vary depending upon the outcome of assessment.
12. The ratio of the above judgment is clearly applicable to the present case. According to the above judgment, if an enforceable debt is created under a statute then any subsequent event would not affect the existence of such right / obligation despite the fact that such debt is subject matter of appeal. The right to interest U/s 244A is not dependent upon any assessment in as much as there is no compulsion or obligation upon the Assessing Officer to make an assessment U/s 143(3). The moment the return is processed U/s 143(1)(a) and refund is issued on the basis of intimation U/s 143(1)(a), an enforceable legal right is created in favour of assessee U/s 244A and simultaneously the Assessing Officer is under legal obligation to grant the interest. Merely because quantum of such interest may vary on assessment made U/s 143(3), it cannot be said that legal right was not acquired on the date of refund. The effect of assessment U/s 143(3) would be that interest on refund U/s 244A would get substituted in terms of S/Section (3) of Section 244A without affecting right already accrued.
13. At this stage, it would appropriate to refer to the judgment of the Hon'ble Supreme Court in the case of CIT Vs Chunilal V. Mehta & Sons (P) Ltd., 82 ITR 54. In that case, assessee was the managing agent of a company "Century" (in short) under an agreement which provided that assessee would be entitled to compensation if its services were terminated before the period of 21 years except for the reasons mentioned in Clause 15 of the agreement. In April 1951, the services of assessee were terminated and assessee became entitled to compensation. Assessee claimed compensation of Rs.50.00 lacs but the managed company offered to pay only Rs.2,34,000/-. The assessee refused to accept the same and filed suit against the said company in the High Court of Bombay. The suit was decreed on 17.11.1955, in the sum of Rs.2,34,000/- and the decree was affirmed in appeal. Assessee received the said amount in December 1955.
In the income tax proceedings for Assessment Year 1956-57, this amount was considered as business profits and consequently the Assessing Officer assessed the same in that year. The assessee challenged the same before the Appellate Authority on the ground that compensation became due to assessee in the year 1951 when its services were terminated and, therefore, could not be assessed in the Assessment Year 1956-57. The matter reached the Apex Court. The Hon'ble Supreme Court rejected the appeal of the Revenue by observing as under:
"It was urged on behalf of the department that, as the assessee disputed the quantum of compensation to which it was entitled, we must hold that its right to get the
18 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000 amount arose when the dispute was determined by the Hon'ble High Court. We are unable to exceed to this contention. As mentioned earlier, the right of the assessee to get compensation for unlawful termination of its services and the quantum of compensation to which it was entitled were clearly prescribed in the agreement. It was also so held by the High Court in the suit between the assessee and the managed company. The fact that the assessee was claiming an exorbitant sum to which it was not entitled will not convert its right into a contingent right. In Thiagaraja Chettiar & Co. v. Commissioner of Income-tax, the High Court of Madras held that, where a managing agent is entitled under the terms of the managing agency agreement to remuneration at a certain percentage on the annual net profits of the company, the remuneration payable to the managing agent accrued when the net profits of the company for the year are ascertained. The mere fact that, owning to disputes between the company and the managing agent the company had not credited the managing agent with the remuneration due to the latter in its accounts would not entitle the managing agent to claim that the remuneration due to him had not accrued and should not be assessed to Income-tax until the company had credited him in its accounts with the amount of commission due to him. We are in agreement with the ratio of that decision and that ratio governs the facts of the present case.
The ratio of the decision of the Bombay High Court in F.E. Hardcastle & Co. (Private) Ltd., Vs Commissioner of Incoma-tax is also to the same effect."
The above judgment clearly shows that once a right accrues under an agreement, then such accrual is not affected by dispute between the parties. Further, in case of dispute, the final outcome would ultimately relate back to the year of accrual.
14. It has been apprehended by assessee's Counsel that assessee would be without remedy if the interest is reduced by virtue of assessment U/s 143(3). This apprehension, in our opinion, is unfounded. If interest is reduced by virtue of S/Section (3) of Section 244A on account of assessment U/s 143(3), the interest granted in earlier year gets substituted and it is the reduced amount of interest that would form part of income of that year. Thus, it would amount to mistake rectifiable U/s 154 of the Act. In our opinion, if the basis, on which income was assessed is varied or ceases to exist, then such assessment would become erroneous and can be rectified. This can be explained with an example. For instance, land in a village belonging to various persons is acquired by Govt. for some development works and the compensation is awarded by the Collector with interest if any. But one of the land holders challenges the acquisition proceedings in the 19 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000 High Court and later on succeeds as the acquisition is declared illegal. By virtue of such High Court order, such compensation has to be returned and Govt. will have to restore the land to the villagers. Therefore, if capital gain has been assessed in the hands of some of the persons where lands were acquired, such assessment would become patently erroneous, as the basis itself has ceased to exist. Such assessment would, therefore, amount to mistake, which in our opinion, can be rectified. Similarly, any income assessed may become non taxable by virtue of retrospective amendment and consequently, erroneous assessment can be rectified. Therefore, in our humble opinion, if the interest granted U/s 244(A)(1) is varied under S/Section (3) of such Section, then the interest originally granted would be substituted by the reduced / increased amount as the case may be. Thus, income on account of interest if assessed can be rectified U/s
154.
15. In view of the above discussion, we are of the view that interest on refund U/s 244A(1) would be assessable in the year in which it is granted and not in the year in which proceedings U/s 143(1)(a) attains finality."
44. Respectfully following the aforesaid findings of the Special Bench of the Tribunal, we set aside the impugned order passed by the Commissioner (Appeals) and restore the issue back to the file of Assessing Officer for denovo adjudication in accordance with law.
45. Ground no.11, is on the issue of disallowance of ` 1,00,00,000, paid in accordance with the directions of BIFR.
46. The assessee, in accordance with the BIFR order, complied with all the requirements and paid an amount of ` 1,00,00,000, towards their contribution and also transferred the entire shareholding to the new promoters at a token price of ` 1, and claimed the said amount as expenditure in revenue field. The Assessing Officer, however, treated the same as capital in nature. On appeal, the Commissioner (Appeals) upheld the order passed by the Assessing Officer.
47. After hearing both the parties, we find that a co-ordinate bench of this Tribunal in assessee's own case for assessment year 1993-94, has restored an identical issue back to the file of Assessing Officer for denovo adjudication. Consistent with the view taken therein, we set aside the 20 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000 impugned order passed by the Commissioner (Appeals) and restore the issue back to the file of Assessing Officer for adjudication afresh in accordance with law. This ground is, thus allowed for statistical purposes.
48. The issue arising out of ground no.12, relates to exclusion of excise duty element from the total turnover while computing the deduction u/s 80HHC of the Act.
49. After hearing both the parties, we find that this issue is covered by the judgment of the Hon'ble Supreme Court in CIT v/s Lakshmi Machine Works, [2007] 290 ITR 667 (SC), for the following proposition:-
"Section 80HHC of the Income-tax Act, 1961 is a beneficial section: it was intended to provide incentive to promote exports. The intention was to exempt profits relatable to exports. Just as commission received by the assessee is relatable to exports and yet it cannot form part of "turnover" for the purposes of section 80HHC, excise duty and sales tax also cannot form part of "turnover". Just as interest, commission etc., do not emanate from the "turnover" so also excise duty and sales tax do not emanate from such turnover. Since excise duty and sales tax did not involve any such turnover such taxes had to be excluded. Commission, interest, rent etc. do yield profits, but they do not partake of the character of turnover and therefore they are not includible in the "total turnover". If so, excise duty and sales tax also cannot form part of the "total turnover" under section 80HHC(3).
One cannot interpret the words "total turnover" with reference to the definition of the word "turnover" in other laws like the Central sales tax or as defined in accounting principles.
Excise duty and sales tax are indirect taxes. They are recovered by the assessee on behalf of the Government.
By the Court: The principal reason for enacting a formula in section 80HHC of the Income-tax Act, 1961 is to disallow a part of the concession thereunder when the entire deduction claimed cannot be regarded as relating to exports. Therefore, while interpreting the words "total turnover" in the formula in section 80HHC one has to give a schematic interpretation. The various amendments made therein show that receipts by way of brokerage, commission, rent, rent etc. do not form part of business profits as they have no nexus with the activity of export. Amendments made from to time to time indicate that they became necessary in order to make the formula workable. If so, excise duty and sales tax also cannot form part of the "total turnover" under section 80HHC(3): otherwise the formula becomes unworkable."
21 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000
50. Respectfully following the aforesaid judgment of the Hon'ble Supreme Court, we set aside the impugned order passed by the Commissioner (Appeals) and allow the ground raised by the assessee.
51. Ground no.13, is on the issue of demand of ` 1,05,82,638, raised by the Department of Chemicals and Petrochemicals attributable to the sale of Betnelan.
52. Both the parties agree that the issue before us is identical to the issue decided by this Tribunal in assessee's own case in ITA no.1420/Mum./ 1999, for assessment year 1995-96, order dated 30th November 2011, wherein the Tribunal, vide Paras-3 and 4, restored the issue back to the file of Assessing Officer for denovo adjudication in accordance with law. Consistent with the view taken therein, we set aside the impugned order passed by the Commissioner (Appeals) and restore the issue back to the file of Assessing Officer for denovo adjudication in accordance with law.
53. Ground no.14, is on the issue of an amount of ` 18,06,887, being demand of interest charged for the period from 1st April 1995 to 31st March 1996.
54. Consistent with the view taken by this Tribunal in assessee's own case for in ITA no.1420/Mum./1999, for assessment year 1995-96, order dated 30th November 2011, wherein the Tribunal, vide Paras-3 and 4, restored the issue back to the file of Assessing Officer for denovo adjudication in accordance with law. Consequently, we set aside the impugned order passed by the Commissioner (Appeals) and restore the issue back to the file of Assessing Officer for denovo adjudication in accordance with law.
55. Ground no.15, reads as follows:-
"In the event the trade advances made to M/s. K.G. Gluco Biols Ltd. claimed as deduction in A.Y. 1993-94, are not allowed, this should be allowed in A.Y. 1996-97 i.e., year in which order of the BIFR is received and the advances actually written-off in the books by the appellant."
22 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000
56. Consistent with the view taken by this Tribunal in Paras-44 and 45 above, we set aside the impugned order passed by the Commissioner (Appeals) and restore the issue back to the file of Assessing Officer for denovo adjudication in accordance with law.
57. In the result, assessee's appeal in ITA no.6027/Mum./1999, is partly allowed.
58. We now take up Revenue's appeal in ITA no.5392/Mum./1999, for assessment year 1996-97.
59. The issue arising out of ground no.1, relates to disallowance of clubs' subscription.
60. Learned Departmental Representative conceded that the issue before is covered against the Revenue and in favour of the assessee.
61. After hearing both the parties and on perusal of the records available before us, we find that an identical issue had been decided by this Tribunal in assessee's own case in ITAs no.949 and 694/Bom./1986, for assessment year 1981-82, wherein the Tribunal has allowed the ground raised by the assessee. Consistent with the view taken by the Tribunal in earlier assessment years, we uphold the order passed by the Commissioner (Appeals) and dismiss the ground raised by the Revenue.
62. The issue arising out of ground no.2, relates to disallowance of deduction under section 80M of the Act in respect of gross dividend.
63. After hearing both the parties and on perusal of the records available before us, we find that this issue is covered against the Revenue and in favour of the assessee by the judgment of Hon'ble Jurisdictional High Court in CIT v/s General Insurance Corporation of India, (2002) 254 ITR 204 (Bom.), as well as the decision of Chandigarh Special Bench of the Tribunal 23 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000 in Punjab State Industrial Corporation Ltd., (2006), 102 ITD 001 (Chandi.). Consistent with the view taken by the Tribunal in earlier assessment years, we set aside the impugned order passed by the Commissioner (Appeals) and restore the issue back to the file of Assessing Officer. The Assessing Officer is directed to allow assessee's claim in the light of the aforesaid Jurisdiction High Court's judgment as well as the decision of the Chandigarh Special Bench of this Tribunal. This ground is, thus, allowed for statistical purposes.
64. The issue arising out of ground no.2, relates to adjustment of profits in respect of unutilised MODVAT credit.
65. After hearing both the parties and on perusal of the records available before us, we find that the issue for our adjudication is covered against the Revenue and in favour of the assessee by the judgment of Hon'ble Supreme Court in CIT v/s Indo Nippon Chemicals Co. Ltd. [2003] 261 ITR 0275 (SC), wherein Their Lordships have held as follows:-
"Held, affirming the decision of the High Court, (i) that merely because the Modvat credit was an irreversible credit available to manufacturers upon purchase of duty-paid raw material, that would not amount to income which was liable to be taxed under the Act : income was not generated to the extent of the Modvat credit on unconsumed raw material;
(ii) that it was not permissible for the Assessing Officer to adopt the "gross method" for valuation of raw materials at the time of purchase and the "net method" for valuation of stock on hand.
Decisions of the Bombay High Court in CIT v/s Indo Nippon Chemical Co. Ltd. [2000] 245 ITR 384 and CIT v/s Antifriction Bearings Corporation Ltd. [2000] 246 ITR 295 affirmed."
66. Respectfully following the aforesaid judgment of the Hon'ble Supreme Court, we dismiss the ground raised by the Revenue.
67. The issue arising out of ground no.4, relates to disallowance made under section 40A(9)/37(2A) of the Act for the payment made to M/s. Glaxo Sports Club.
24 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000
68. Before us, both the parties agree that this issue was earlier decided by the Tribunal in assessee's own case for assessment years 1989-90 to 1991- 92, 1992-93 to 1993-94, 1994-95 and 1995-96 respectively, wherein the Tribunal allowed the deduction in respect of payment made to M/s. Glaxo Sports Club. Consistent with the view taken by the Tribunal, we uphold the order passed by the Commissioner (Appeals) and dismiss the ground raised by the Revenue.
69. The next issue arising out of ground no.5, relates to disallowance of claim under section 80I / 80IA of the Act.
70. After hearing both the parties and on perusal of the records available before us, we find that an identical issue has been decided by this Tribunal in assessee's own case in an appeal filed by the Revenue in ITA no.8341/Bom./ 1993, for assessment year 1990-91, order dated 31st January 2007, wherein the Tribunal directed the Assessing Officer to allow the claim made by the assessee. The concluding Para-35, of the aforesaid order is extracted below:-
"35 After considering rival submissions and the facts as also the legal position, in our view the assessee must succeed on this point. In the assessment year 1989-90, only trial production was carried out and there were no profits and no deduction under section 80I was allowed. The initial assessment year is, therefore, the assessment year 1990-91. This view is supported from the cases cited by the learned Counsel for the assessee. The provisions of sub-section (6) are absolutely clear and would, therefore, be applicable to the assessee's case only from assessment year 1991-92. We, therefore, direct the Assessing Officer not to set-off depreciation brought forward from the assessment year 1989-90 and re-compute deduction allowable accordingly."
71. Keeping in view the aforesaid co-ordinate bench decision of this Tribunal, we uphold the order passed by the Commissioner (Appeals) and dismissed the ground raised by the Revenue.
72. The next issue arising out of ground no.6, relates to interest income being assessed under the head "Income From Other Sources".
25 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000
73. Both the parties agree before us that this issue is covered against the Revenue and in favour of the assessee by the decision of this Tribunal in assessee's own case in ITA no.1420/Mum./1999, order dated 21st October 2008, for assessment year 1995-96, wherein the Tribunal restored the issue back to the file of Assessing Officer for re-adjudication. Consistent with the view taken by the Tribunal in earlier years, we set aside the impugned order passed by the Commissioner (Appeals) and direct the Assessing Officer to re- examine the factual nature of interest income and decide as to whether the interest income is to be computed under the head "Income from Other Sources" or under the head "Income from Business". Needless to mention here that the Assessing Officer shall grant adequate opportunity of being heard to the assessee. This ground is, thus, allowed for statistical purposes.
74. The next two issues viz. (i) the Commissioner (Appeals) erred in directing the Assessing Officer to work out the indirect cost in the case of export of trading good by not allocating the head office expenses including interest to the export division and (ii) the Commissioner (Appeals) erred in directing the Assessing Officer to recompute relief for export of trading goods after adjusting, arose out of ground no.7.
75. After hearing both the parties and on a perusal of the records available before us, we find that the head office administrative expenses, etc., have been allocated to arrive at the indirect cost in the case of export of trading goods. The net interest charges ought to have been allowed by the authorities below. These issues have been decided by this Tribunal in assessee's own case in ITAs no.3464 & 3465/Mum./1996, etc., for assessment years 1992-93 and 1993-94, etc., order dated 29th March 2007, wherein the Tribunal, vide Para-11, held as follows:-
"11. After hearing both the parties, we find that this aspect of the issue was never adjudicated by the assessing officer. No doubt, the assessee had given a note regarding deduction u/s 80HHC vis-à-vis indirect cost in respect of trading goods for export but the assessing officer did not record any finding in this regard as he was of the view that the assessee was not eligible for deduction u/s 80HHC as there 26 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000 was huge loss in trading ground which was much more than profits of export of manufactured goods. On appeal, the learned CIT(A) has held that loss in trading goods could not be adjusted against the profits in respect of export of manufactured goods. In view of this finding, the learned CIT(A) proceeded to dispose of the issue regarding indirect cost. On these facts, we are of the view that this issue requires fresh adjudication. The legislature has amended the provisions of Section 80HHC with retrospective effect. According to such amendment, the loss in trading goods requires to be adjusted against profits from export of manufactured goods. Computation of indirect cost is necessary ingredient for computing the export profit from trading goods as well as manufactured goods. The assessing officer has not made any observation on this aspect of the issue. However, such exercise may not be required to be made if the loss in traded goods as per the computation of assessee itself is more than the profits from export of manufactured goods in as much as in such situation, the assessee would not be entitled to deduction u/s 80HHC as per the amended provisions. On the other hand, if the profits from export of manufactured goods, as per the calculation of assessee, is more than the loss in traded goods export, then the assessing officer would be required to determine the indirect cost. Accordingly, we set aside the order of the learned CIT(A) on this aspect of the issue and remit the matter to the file of assessing officer for fresh deduction for both the years. The assessee would be at liberty to furnish all the details regarding this aspect of the issue."
76. Consistent with the view taken by the co-ordinate bench of this Tribunal in assessee's own case for earlier assessment years, we set aside the impugned order passed by the Commissioner (Appeals) and restore the issue back to the file of Assessing Officer for adjudication afresh in accordance with law and after providing adequate opportunity of being heard to the assessee. This ground is, thus, allowed for statistical purposes.
77. In the result, Revenue's appeal in ITA no.5392/Mum./1999, is partly allowed.
78. We now take up assessee's cross objection which is arising out of Revenue's appeal in ITA no.5392/Mum./2000.
79. The sole issue arising in this cross objection relates to unutilized MODVAT.
27 Glaxo India Limited ITA no. 6027/Mum./1999 ITA no. 5392/Mum./1999 C.O. no. 005/Mum./2000
80. Since we have dismissed ground no.2, raised by the Revenue, vide Paras-63 and 64 above, which relates to adjustment of profits in respect of unutilised MODVAT credit, the ground raised by the assessee by way of cross objection becomes infructuous. Consequently, this ground is dismissed.
81. In the result, assessee's cross objection is dismissed.
82. To sum up, assessee's appeal as well as Revenue's appeal are partly allowed, whereas assessee's cross objection is dismissed as infructuous.
Order pronounced in the open Court on 23rd December 2011 Sd/- Sd/-
D.K. AGARWAL J. SUDHAKAR REDDY JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 23rd December 2011 Copy to:
(1) The Assessee; (2) The Respondent; (3) The CIT(A), Mumbai, concerned; (4) The CIT, Mumbai City concerned; (5) The DR, "E" Bench, ITAT, Mumbai.
TRUE COPY
BY ORDER
Pradeep J. Chowdhury ASSISTANT REGISTRAR
Sr. Private Secretary ITAT, MUMBAI BENCHES, MUMBAI
28 Glaxo India Limited
ITA no. 6027/Mum./1999
ITA no. 5392/Mum./1999
C.O. no. 005/Mum./2000
Date Initial
1. Draft dictated on 29.11.2011 Sr.PS
2. Draft placed before author 1-16.12.11 Sr.PS
3. Draft proposed & placed 19.12.2011 JM/AM
before the second
member
4. Draft discussed/approved 19.12.2011 JM/AM
by Second Member
5. Approved Draft comes to 19.12.2011 Sr.PS
the Sr.PS/PS
6. Date of pronouncement 23.12.2011 Sr.PS
7. File sent to the Bench 29.12.2011 Sr.PS
Clerk
8. Date on which file goes to
the Head Clerk
9. Date of dispatch of Order