Income Tax Appellate Tribunal - Mumbai
Hitech Corporation Limited ,Mumbai vs Dcit, 10(3), Mumbai on 29 April, 2026
IN THE INCOME TAX APPELLATE TRIBUNAL "E" BENCH MUMBAI
BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER
AND
SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER
ITA Nos. 8503, 8504, 8505, 8506 and 8507/MUM/2025
Assessment Years: 2011-12 to 2015-16
Hitech Corporation Limited DCIT/ACIT-10(3),
Unit No. 201, 2 Floor
nd Mumbai
Welspun House, Kamala City Vs.
Senapati Bapat Marg, Lower
Parel West, Mumbai-400 013
(PAN : AAACH5161N)
(Appellant) (Respondent)
ITA Nos. 536 and 537/MUM/2026
Assessment Years: 2011-12 and 2013-14
DCIT/ACIT-10(3), Hitech Corporation Limited
Mumbai Unit No. 201, 2nd Floor
Vs. Welspun House, Kamala City
Senapati Bapat Marg, Lower
Parel West, Mumbai-400 013
(PAN : AAACH5161N)
(Appellant) (Respondent)
Present for:
Assessee : Shri H.N. Motiwalla
and Shri Dalpat Shah, CAs
Revenue : Shri Ritesh Misra and
Shri Hemanshu Joshi, Sr. DR
Date of Hearing : 09.04.2026
Date of Pronouncement : 29.04.2026
ORDER
PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:
All these seven appeals filed by Revenue as well as assessee comprising of relevant Assessment Years are against the orders of ld.
2 ITA No. 8503/Mum/2025 and ors.Hitech Corporation Limited AYs 2011-12 to 2015-16 CIT(A), National Faceless Appeal Centre, Delhi passed against the assessment orders by ACIT-15(2)(1), Mumbai. Consolidated details of these appeals are tabulated below:
Sr. ITA No. Order of CIT(A) Assessment order Assessme Appeal by No nt year . No. Date Passed by Date Passed u/s.
1 8503/Mum/2025 ITBA/NFAC/S/250/2025- 15.10.2025 ACIT-15(2)(1), 25.03.2014 143(3) 2011-12 Assessee
26/1081779624(1) Mumbai
2 8504/Mum/2025 ITBA/NFAC/S/250/2025- 15.10.2025 ACIT-15(2)(1), 07.03.2015 143(3) 2012-13 Assessee
26/1081780142(1) Mumbai
3 8505/Mum/2025 ITBA/NFAC/S/250/2025- 15.10.2025 ACIT-15(2)(1), 02.03.2016 143(3) 2013-14 Assessee
26/1081780574(1) Mumbai
4 8506/Mum/2025 ITBA/NFAC/S/250/2025- 15.10.2025 ACIT-15(2)(1), 27.12.2016 143(3) 2014-15 Assessee
26/1081781159(1) Mumbai
5 8507/Mum/2025 ITBA/NFAC/S/250/2025- 15.10.2025 ACIT-15(2)(1), 29.12.2017 143(3) 2015-16 Assessee
26/1081781687(1) Mumbai
6 536/Mum/2026 ITBA/NFAC/S/250/2025- 15.10.2025 ACIT-15(2)(1), 25.03.2014 143(3) 2011-12 Revenue
26/1081779624(1) Mumbai
7 537/Mum/2026 ITBA/NFAC/S/250/2025- 15.10.2025 ACIT-15(2)(1), 02.03.2016 143(3) 2013-14 Revenue
26/1081780574(1) Mumbai
2. This bunch of five appeals filed by the assessee and two appeals by the Revenue have certain common issues with similar facts pattern and therefore, are taken up together for adjudication by passing this consolidated order.
2.1. There is a delay of 21 days in filing the two appeals by the Revenue for which petition for condonation of the said delay is placed on record. We have perused the same and after considering the explanations therein, find it appropriate to condone the brief delay of 21 days and take them up for adjudication.
3. We first take up the appeals for A.Y. 2011-12, wherein both the assessee and Revenue are in appeals on their respective grounds.
3.1. Brief facts of the case in this regard are that assessee is engaged in the business of manufacturing plastic containers, bottles, caps, jars 3 ITA No. 8503/Mum/2025 and ors. Hitech Corporation Limited AYs 2011-12 to 2015-16 and cans. Return of income was filed on 29.9.2011, reporting total income at Rs. 11,65,88,210/-. Ld. Assessing Officer applied section 14A read with Rule 8D of the Income-tax Rules, 1962 (the Rules) and made disallowance of Rs. 48,32,799/- by holding that this expenditure was attributable to investments made by the assessee which yield exempt income. The contention of the assessee is that it has not earned any exempt income during the year. According to it, the only investment made by it is of Rs. 34.08 crores in shares of its subsidiary companies which are also engaged in the manufacturing of bottles. Assessee made this strategic investment out of its own funds for which no borrowings were made. According to the assessee, when no exempt dividend income is earned during the year, no disallowance under section 14A is warranted. It is a settled position of law as held in plethora of decisions including that of Hon'ble Supreme Court as well as Hon'ble Jurisdictional High Court of Bombay and also the Coordinate Benches of ITAT who have followed these orders of higher forum and have taken consistent view in favor of the assessee. Juridical decisions in this regard are listed below:-
i. Pr. CIT v. Oil Industry Development Board 103 taxmann.com 326 (SC) ii. HDFC Bank Ltd. v. DCIT 383 ITR 529 (Bom) iii. CIT v. Reliance Utilities & Power Ltd. 313 ITR 340 (Bom) iv. Cheminvest Ltd. v. CIT 378 ITR 33 (Del) v. CIT v. Chettinad Logistics (P) Ltd. 248 Taxman 55 (Mad) 3.2. Ld. CIT(A) by making reference to the amendment brought in by the Finance Act, 2022 by which Explanation 2 was inserted to section 14A, observed that the said amendment is stated to operate prospectively none the less, it is declaratory in nature and indicative of true scope of section 14A from its inception. He also referred to the decision of Hon'ble Supreme Court in the case of Maxopp Investment Ltd. v. CIT(A) (2018) 402 ITR 640 (SC), Walfort Share and Stock Brokers 4 ITA No. 8503/Mum/2025 and ors. Hitech Corporation Limited AYs 2011-12 to 2015-16 (2010) 326 ITR 1 (SC) and Redington (India) Ltd. v. CIT(A) (2017) 77 taxmann.com 257 (Mad) to confirm the disallowance made by the ld.
AO. In respect of the decision of Coordinate Bench in assessee's own case for A.Y. 2010-11 in ITA no. 7342/Mum/2017 dated 10.5.2022, he noted that this appeal by the Revenue was dismissed on the ground of low tax effect as prescribed by the CBDT in its circular.
4. Before us, ld. Counsel for the assessee referred to the audited financial statement forming part of paper book to evidently demonstrate that there is no exempt income earned and reported by the assessee for the year under consideration. He placed reliance on the decision of Hon'ble Supreme Court in the case of Oil Industry Development Board (supra) as well as on the decision of Cheminvest Ltd. (supra) which squarely covers the case of the assessee, according to which section 14A will not apply if no exempt income is received during the year relevant to the previous year, by the assessee.
4.1. In the factual matrix before us, there is nothing contrary which has been brought on record by the Revenue to evidently demonstrate that assessee has in fact earned any exempt income during the year. We find that the position of law is settled in favor of the assessee and no disallowance under section 14A is warranted. We also take note of the decision of Hon'ble High Court of Delhi in the case of Era Infra Engineering Ltd. 288 Taxman 384 (Del) which has categorically held that amendment brought in by the Finance Act, 2022 by insertion of Explanation 2 to section 14A is prospective. Stance taken by the ld. CIT(A) by referring to this amendment is misplaced in view of the said judgment. Accordingly, ground no. 1 raised by the assessee is allowed. Since there is only one ground raised by the assessee in its appeal, in the result, appeal of the assessee in A.Y. 2011-12 is allowed.
5 ITA No. 8503/Mum/2025 and ors.Hitech Corporation Limited AYs 2011-12 to 2015-16
5. We now take up appeal filed by the Revenue for A.Y. 2011-12. Ground no. 1(a) is in respect of disallowance of rent paid to Coating Specialities (India) Ltd. (CSIL) of Rs. 26,30,000/- by applying provisions of section 40A(2)(a). Facts in this regard are that assessee has made payment of rent for Unit No. 30, Unit No. 130 to 135 and Unit No. 311 to 312 to CSIL. According to the assessee, this entity does not come under the definition of person to whom section 40A(2)(a) applies. This issue had come up before the Coordinate Bench in assessee's own case for A.Y. 2010-11 in ITA No. 6770/Mum/2017 dated 10.5.2022, whereby identical disallowance was deleted by holding that rent paid by the assessee was genuine and provision under section 40A(2)(a) cannot be invoked. Relevant extract of the decision of the Coordinate Bench in this regard is reproduced below:-
"2.3. From the aforesaid narration of facts, it could be safely concluded that the contentions of the ld. AO that assessee had not paid any rent to Coating Specialities (India) Ltd., in earlier years is not appreciated. The reasons for assessee not paying the rent in earlier years are duly explained hereinabove. We find that assessee had even pleaded before the ld. CIT(A) that it had paid rent at Rs.39.23 per sq.ft per month to Coating Specialities (India) Ltd., and the comparable instance for similarly placed property was Rs.41.57 sq.ft per month which was charged by Mrs. Vandana G. Pahilwani and Mr. Ghanshyam L Pahilwani. The ld. CIT(A) had not addressed this fact at all. We find that even assuming that Coating Specialities (India) Ltd., is a related party of the assessee, still the rent paid by the assessee @Rs.39.23 per sq.ft per month is lesser than rent paid to an unrelated party i.e. Mrs.Vandana G. Pahilwani and Mr. Ghanshyam L. Pahilwani. On this count itself, the rent paid by the assessee cannot be treated as excessive to invoke the provisions of Section 40A(2) of the Act. As stated supra, in any case, the ld. AO had not brought any evidence on record by way of comparable instances of fair market value of rent to drive home the point that rent paid by the assessee is excessive or unreasonable. Hence, we have no hesitation in directing the ld. AO to delete the disallowance made u/s.40A(2)(a) of the Act in the sum of Rs.23,15,000/- towards rent. Accordingly, the ground No.1 raised by the assessee is allowed."
5.1. CIT(A) has taken cognizance of the factual position which is identical to what has already been dealt with by the Coordinate Bench in assessee's won case (supra) except for variation in the quantum.
6 ITA No. 8503/Mum/2025 and ors.Hitech Corporation Limited AYs 2011-12 to 2015-16 Furthermore, no contrary material has been brought on record by the Revenue to demonstrate anything otherwise. It is also placed on record that no appeal is pending before Hon'ble High Court against the order of the Coordinate Bench as noted by the ld. CIT(A) while giving his finding in paragraph 5.1.3. We find no infirmity in the findings arrived at by the ld. CIT(A). Accordingly, ground no. 1(a) raised by the Revenue is dismissed.
6. Ground no. 1(b) is towards disallowance of management fees of Rs. 93,00,000 under section 40A(2)(a). Facts in this regard are that assessee had appointed CSIL for consultancy services such as marketing strategies for plastic containers, product development, product costing, product pricing etc. since 2003. Similar claims were made in earlier year which have been accepted by the Revenue. According to the assessee, CSIL is in the business of import and distribution of chemical, construction chemicals, paints accessories etc. and has been helpful in introducing new customers as well as enhance sales to already introduced new customers. According to the assessee, in the year under consideration, sales of non-Asian Paints customers has increased by 26% as compared to preceding year.
6.1. We note that this issue had come up before the Coordinate Bench in assessee's own case (supra), whereby it was held that services were actually rendered, payments were genuine and not excessive, disallowance so made was deleted. Relevant extract in this regard from the said order is reproduced as under :-
"3.3. It is pertinent to note that similar payment of management fees was allowed by the ld. AO u/s.143(3) of the Act in earlier as well as in subsequent years. It is not in dispute that the agreement for marketing consultancy dated 18/06/2009 entered into by the assessee with Coating Specialities (India) Ltd., were duly filed before the ld. AO. It is not in dispute that the said agreement clearly provides the scope of services to be provided by Coating Specialities (India) Ltd., to the 7 ITA No. 8503/Mum/2025 and ors. Hitech Corporation Limited AYs 2011-12 to 2015-16 assessee beyond doubt and the consideration payable thereon by the assessee. Subsequently, M/s. Coating Specialities (India) Ltd., vide letter dated 27/10/2009 had even reduced the consultancy fee payable from Rs.8,50,362/- per month to Rs.7,75,000/- per month for the period 01/04/2009 to 31/03/2010. A Confirmation letter to this effect is enclosed in page 30 of the paper book. The assessee had even bothered to furnish the reconciliation statement of management fees as per TDS Certificate, books of accounts stating the month wise details thereon, which is enclosed in page 31 of the paper book. The aforesaid payment of management fees had been duly subjected to deduction of tax at source by the assessee. The ld. CIT(A) considering the fact that the sales to non-Asian Paints customers had increased only by 25%, held that the management fees also would be eligible for increase only to the extent of 25% and since Rs.24,00,000/- was paid in earlier year, the payment of management fees during the year would be reasonable if the same is fixed at Rs.30,00,000/- (Rs.24,00,000 x 25% of Rs.24,00,000). Against this finding of the ld. CIT(A), there is no appeal by the Revenue preferred before us and only assessee is in appeal for deletion of disallowance of remaining Rs.63,00,000/- (Rs.93,00,000/- - Rs.30,00,000/-). As stated earlier in ground No.1, even for this disallowance, the ld. AO had not brought any evidence on record any comparable instances to drive home the point that the payment of management fees paid by the assessee to Coating Specialities (India) Ltd., is excessive or unreasonable to invoke the provisions of Section 40A(2) of the Act. Hence, in our considered opinion, the provisions of Section 40A(2) of the Act could not be brought into operation at all in the instant case without bringing in any comparable instances of fair market value of management fees. Hence, we have no hesitation in deleting the disallowance of management fees of Rs.63,00,000/- made herein. Accordingly, the ground No.2 raised by the assessee is allowed."
6.2. Since the factual matrix remains identical in the year under consideration with those dealt by the Coordinate Bench in assessee's own case (supra), ld. CIT(A) by following the said judicial pronouncement, deleted the disallowance made by the ld. AO as nothing contrary was brought on record. Having gone through the factual matrix, we do not find any reason to interfere with the findings arrived at by ld. CIT(A) in this regard. Accordingly, ground no. 1(b) raised by the Revenue is dismissed.
7. Ground no. 1(c) is in respect disallowance of commission of Rs.6,86,127/- paid to Mipak Polymers Ltd. (MPL) under provisions of section 40A(2)(a). Brief facts of the case in this regard are that assessee has been availing services of MPL since year 2008 for effecting of sales of certain products. It is a 100% subsidiary of the assessee who 8 ITA No. 8503/Mum/2025 and ors. Hitech Corporation Limited AYs 2011-12 to 2015-16 procured sales orders for small jars. Assessee pays commission to MPL through proper banking channel and by making compliance with TDS provisions under section 194H. Ld. AO disallowed the entire commission of Rs. 6,86,127/-.
7.1. This issue had come up before the Coordinate Bench in assessee's own case in appeal for A.Y. 2010-11 (supra), whereby disallowance so made by the ld. AO was deleted. In the year under consideration, CIT(A) by noting identical fact pattern except for variation in the quantum and since nothing contrary was brought on record by the Revenue, deleted the disallowance made by the ld. AO, by following said judicial pronouncement. Relevant extract of the decision of Coordinate Bench is reproduced below:-
"4.2. We find that the assessee has been making payment of commission on per piece basis to MIPAC Polymers Ltd., commencing from A.Y.2009- 10 onwards. The sales made in A.Y.2009-10 was Rs.63,25,307/- and commission paid thereon was Rs.4,65,446/- which works out to Rs.7.36% of sales. Whereas in A.Y.2010-11, the sales effected through MIPAC Polymers Ltd., was Rs.1,68,33,316/- and commission paid thereon was Rs.7,17,681/- which works out to 4.26% of sales. This goes to prove that the commission percentage actually had decreased during the year under consideration when compared to earlier year. In any case, the commission paid by the assessee to the very same party on the same per piece basis was duly allowed as deduction by the ld. AO in the A.Y.2009- 10. It is not in dispute that the said payment of commission was duly subjected to deduction of tax at source by the assessee. As stated earlier, in ground No.2 hereinabove, even for this disallowance the ld. AO had not brought any evidence on record any comparable instance to drive home the point that the payment of commission made by the assessee to MIPAC Polymers Ltd., is excessive or unreasonable to invoke the provisions of Section 40A(2) of the Act. Hence, in our considered opinion, the provisions of Section 40A(2) of the Act could not be brought into operation at all in the instant case without bringing in any comparable instances on fair market value of commission payment. Hence, we have no hesitation in deleting the disallowance of commission payment of Rs.7,17,681/- made herein. Accordingly, the ground No.3 raised by the assessee is allowed."
7.2. We have taken note of identical fact pattern and thus, following principles of consistency, there being no change in material facts, do not find any infirmity in the findings of the ld. CIT(A), dismiss the ground raised by the Revenue.
9 ITA No. 8503/Mum/2025 and ors.Hitech Corporation Limited AYs 2011-12 to 2015-16
8. Ground no. 2 raised by the Revenue is on account of addition made by the ld. AO under section 68 towards fixed deposits received by the assessee amounting to Rs. 34,17,000/-. Facts in this regard are that assessee received new fixed deposits from 99 depositors amounting to Rs. 1,11,94,000/-. Out of these deposits, ld. AO added Rs. 34,17,000/-, received from 64 deposit holders by treating the same as unexplained deposits. According to the assessee, it had submitted all the details which include PAN, confirmation letter and bank statement, to establish genuineness of the transaction. Assessee had established identity, genuineness and creditworthiness of the deposit holders. Before the ld. CIT(A), assessee contended that in the first instance, ld. AO had called for details in respect of deposits received by the assessee in excess of Rs. 2 lakhs only. Thereafter, details were called for in respect of all the new depositors which were also furnished. Assessee furnished the same also in the first appellate proceedings as additional evidence under rule 46A of the Rules. In this regard, ld. CIT(A) took note of the submission made by the assessee. He also noted identical issue had come up before the Coordinate Bench in assessee's own case (supra). Relevant portion of the said decision is extract below for ready reference:
"6.5. The ld. AR before us pleaded that the entire list of deposits including the list of depositors who had invested less than Rs 5,00,000/- were also provided to the ld. AO. Moreover, in respect of remaining sum received of R.1,88,73,000/-, the same were received from 129 depositors below Rs.5,00,000/- per person. The details of deposits received from 129 depositors were duly provided before the ld. AO and the ld. CIT(A) together with name, address, folio number of deposit, PAN, amount received and mode of receipt of deposit. These details are enclosed in pages 54-63 of the paper book. From the perusal of the said details, we find that all the deposits were received only by cheques and assessee had furnished the entire details regarding the same before the lower authorities. When the deposits are sought to be raised by the assessee company pursuant to a public advertisement in statutory prescribed format, the assessee cannot be expected to provide confirmation from all the depositors who are general public. The assessee could at best possess only the deposit application form and the mode of receipt of deposit in its records. Of course, due diligence should be taken by the assessee 10 ITA No. 8503/Mum/2025 and ors. Hitech Corporation Limited AYs 2011-12 to 2015-16 to ensure that all the necessary columns in the deposit application form are duly filled by the concerned depositors. In the instant case, we find all the columns in the deposit application form are duly filled which alone enabled the assessee to provide the complete list of names of the depositors, address of the depositors, PAN of the depositors and mode of receipt of deposit together with the amount thereon. Beyond this, the assessee cannot be expected to provide any further details as the deposits were raised from the general public. This is akin to share capital raised by the limited company pursuant to public issue or initial public offer. In fact, wherever the details of PAN are not available, the assessee had deducted TDS @20% while making payment of interest to them. In view of these observations, we have no hesitation in deleting the addition made in the sum of Rs.1,88,73,000/- in respect of deposits less than Rs.5,00,000/- received from 129 depositors. Since, the deposit amount has been accepted as genuine, the ad hoc disallowance of interest made by the ld. AO in the sum of Rs.15,00,000 also stands automatically deleted. Accordingly, the ground No.5 raised by the assessee is allowed."
8.1. Ld. CIT(A) took into consideration the documentary evidences placed on record along with explanation furnished. He also called for the remand report from the ld. AO in respect of additional evidence furnished by the assessee for which no response was received by him. Since there was no response from the ld. AO, he took cognizance of additional evidence furnished before him and held that this needs factual verification. From para 5.5.4 of the first appellate order, it is noted that he directed the ld. AO to examine the documents filed during assessment proceedings as well as additional evidence furnished during first appellate proceedings.
8.2. We find that this issue had come up before the Coordinate Bench in assessee's own case and has been dealt with elaborately on similar fact pattern. Assessee had made similar submissions discharging its onus casted under section 68, in the matter before the Coordinate Bench for A.Y. 2010-11 based on which, relief was granted to the assessee. In the present case before us, similar submissions are placed on record. Accordingly, considering documentary evidence placed on record and explanation furnished as well as judicial precedents in 11 ITA No. 8503/Mum/2025 and ors. Hitech Corporation Limited AYs 2011-12 to 2015-16 assessee's own case, we delete the addition made by the ld. AO. Ground no. 2 raised by the Revenue is dismissed.
9. Ground no. 3 is towards deduction under section 80IB on scrap sales, sundry balances written back and foreign exchange gain, which resulted in reduction of deduction claimed by the assessee. Facts of the matter is that assessee claimed deduction of Rs.2,01,73,575/- under section 80IB(4) in respect of its Masat and Pondicherry units, which was restricted to Rs. 1,38,43,749/- by making adjustment towards other income, allocation of interest and bank charges, inter-unit transfer and processing charges. Assessee claimed that its receipts towards scrap sales, processing charges and foreign exchange fluctuation gain are intrinsically connected with the manufacturing operations of the undertakings and hence, are eligible for deduction under section 80IB. Also, inter-unit transfers are recorded at market price in accordance with section 80IB(8) and therefore, no reduction is warranted in the claim made by the assessee. This is also a legacy issue already dealt with by the Coordinate Bench in assessee's own case for A.Y. 2010-11, wherein it was held that the sale of scrap, foreign exchange fluctuation and processing charges have direct nexus with the business of industrial undertaking and are eligible for deduction under section 80IB. It also held that inter-unit transfers are required to be valued at market price as per section 80IA(8). According to it, substituting cost basis for such transfers is not justified. This reduction made by the ld. AO was deleted. Relevant extract in this regard from the said decision are as under :-
"7. The ground No.6.1 raised by the assessee is seeking deduction u/s.80IB of the Act in respect of sale of scrap, exchange gain, sundry balances written back and miscellaneous income by treating the same as profits and gains derived from eligible industrial undertaking.12 ITA No. 8503/Mum/2025 and ors.
Hitech Corporation Limited AYs 2011-12 to 2015-16 7.1. We have heard rival submissions and perused the materials available on record. We find that assessee had claimed deduction u/s.80IB of the Act as under:-
(i) For Masat (Silvassa) Unit Rs.1,25,43,599/-
(ii) For Pondicherry Unit Rs.1,09,34,445/-
Total Rs.2,34,78,045/-
=============
7.2. The deduction u/s.80IB was claimed @30% of profits and gains of industrial undertaking located in the backward district. The ld. AO observed that in respect of sale of scrap, exchange gain, sundry balances written back and miscellaneous income, they are not profits derived from the manufacturing activity and hence not eligible for deduction u/s.80IB of the Act. The assessee submitted that the sale of scrap, exchange gain, sundry balances written back and miscellaneous income are totally business receipts derived from the manufacturing activity and hence, would be eligible for deduction u/s.80IB of the Act. We find that the Hon'ble Jurisdictional High court in the case of CIT vs. Rachna Udhyog Ltd., reported in 230 CTR 72 where the issue of exchange rate difference in the context of allowability of deduction u/s.80IB was held in favour of the assessee. We find that the Hon'ble Delhi High Court in the case of CIT vs. Sadhu Forging Ltd., reported in 11 taxmann.com 322 had held scrap sales to be part of business receipts of eligible business undertaking and hence, eligible for deduction u/s.80IB of the Act. Similar was the view taken by the Hon'ble Allahabad High Court in the case of CIT vs. Modi Xerox Ltd., reported in 365 ITR 200 and the Hon'ble Punjab and Haryana High Court in the case of CIT vs. Micro Turners reported in 205 Taxman 18. In respect of sundry balances written back, there is absolutely no dispute with the same represents amounts lying in creditors' account which were treated as no longer payable and hence, written back to P & L Account. There is no dispute that when these creditors were created originally, they belong only to the eligible undertaking. Hence, when those credit balances lying in creditors account are written back to income, the same would only constitute business receipts of the eligible undertaking, thereby making the assessee company eligible for claim of deduction u/s.80IB of the Act. In view of the above, the ground No.6.1 raised by the assessee is allowed."
9.1. CIT(A) has taken cognizance of the decision of the Coordinate Bench which squarely covers the case of the assessee for the year under consideration, there being no change in material fact except for variation in quantum as well as nothing contrary was brought on record by the Revenue. Having perused the said order as well as relevant material placed on record, we do not find any infirmity in the findings arrived at by the ld. CIT(A). Ground no. 3 raised by the Revenue is dismissed.
13 ITA No. 8503/Mum/2025 and ors.Hitech Corporation Limited AYs 2011-12 to 2015-16
10. In the result, appeal filed by the Revenue is dismissed.
11. We now take up appeal for A.Y. 2012-13 filed by the assessee. Ground raised by the assessee is only in respect of disallowance of Rs. 41,33,147/- made under section 14A. Stand of the assessee is that it has not earned any exempt income during the year and therefore, disallowance is not warranted, which is a settled position of law. This issue has already been adjudicated upon by us in appeal for A.Y. 2011- 12 in the above paragraphs. There being no change in material fact and position and law except for variation in quantum, our observation and findings in this regard applies mutatis mutandis. Accordingly, ground no. 1 raised by the assessee is allowed.
12. In the result, appeal by the assessee is allowed.
13. We now take up appeals filed by the assessee and Revenue for A.Y. 2013-14. Ground no. 1 raised by the assessee towards disallowance made under section 14A of Rs. 1,67,97,725/- has identical fact pattern which we have already dealt with in the above paragraphs in appeal for A.Y. 2011-12. There is nothing contrary brought on record to controvert the same. Our above stated observations and findings apply mutatis mutandis. Accordingly, ground no. 1 raised by the assessee is allowed.
14. Ground no. 2 raised by the assessee is in respect of addition made towards fixed deposits received by the assessee amounting to Rs. 76,51,000/- for which provisions of section 68 has been applied by the ld. AO. Also, disallowance of Rs. 7,65,100/- has been made towards interest on the said deposits. Assessee has placed all the relevant documentary evidence both, before the ld. AO as well as in the remand proceedings directed by the ld. CIT(A). Assessee in this regard has 14 ITA No. 8503/Mum/2025 and ors. Hitech Corporation Limited AYs 2011-12 to 2015-16 contended that ld. AO had asked details of deposit holders above Rs. 2 lakhs only, all of which were submitted. However, he made the addition respect of deposits below Rs. 2 lakhs on the ground that no details were furnished by the assessee. The contention of the assessee is that these details were never asked by the ld. AO and therefore, he is grossly incorrect by taken such a stance for making addition. In the first appeal, assessee furnished all the relevant documentary evidence as additional evidence under Rule 46A of the Rules for which remand report was called for. However, ld. AO did not respond to the direction by CIT(A) in this regard. According to the assessee, ld. CIT(A) despite referring the matter to the ld. AO by calling remand report on the additional evidence, observed that assessee has not filed supporting evidence. He dismissed the ground raised by the assessee and confirmed the addition made by the ld. AO.
14.1. We have perused the material placed on record in the paper book containing 135 pages which evidently demonstrates the discharge of onus casted under section 68 by the assessee. Also, it is undisputed that reference was made by the ld. CIT(A) to the ld. AO calling for remand report on the additional evidence furnished by the assessee. Compliance was made by the assessee by furnishing required documents in the remand proceedings also. We note that ld. CIT(A) is in gross error by making such an observation that the assessee has failed to substantiate its claim by not furnishing supporting documentation. Also, we note that this issue is squarely covered by the decision of the Coordinate Bench in assessee's own case for A.Y. 2010- 11 (supra), wherein on similar discharge of onus by the assessee by furnishing documentary evidence and explanation, addition so made was deleted including interest component on the said deposits. In the given set of facts, duly supported by the decision of the Coordinate 15 ITA No. 8503/Mum/2025 and ors. Hitech Corporation Limited AYs 2011-12 to 2015-16 Bench in assessee's own case, we delete the addition made both, in respect of deposits as well as interest thereon. Ground no. 2 raised by the assessee is allowed.
15. Ground no. 3 is towards disallowance of provision for doubtful debts of Rs. 18,67,000/-. Before us, it was pointed out that ld. CIT(A) has erroneously typed amount of Rs. 34,20,657/-, whereas the correct amount of disallowance is Rs. 18,67,000/-. Facts of the matter is that the assessee claimed expenditure of Rs. 18,67,000/- on account of provisions for doubtful debts in its profit and loss account. The said claim was denied to the assessee, being 'provision' which is not allowable. Ld. CIT(A) on this observed that the assessee has not filed any supporting evidence to substantiate the claim so as to demonstrate that it has actually written off doubtful debts in its books of account. He thus, confirmed the disallowance made by the ld. AO by holding that only actual write off qualifies for deduction under section 36(1)(vii).
15.1. Before us, ld. Counsel for the assessee evidently demonstrated from the paper book that the assessee has reported provision for doubtful debts in its profit and loss account under the head 'other expenses'. Against this, the same was reduced from the 'trade receivables' as reported in Schedule 15 of the balance sheet. It was pointed out that since the said amount was reduced from the trade debtors, it is in compliance with the provisions contained in section 36(1)(vii) read with section 36(2). Assessee referred to the decision of Hon'ble Supreme Court in the case of Vijaya Bank v. CIT(A) [2010] 323 ITR 166 (SC), which has held that provisions of section 36(1)(vii) cover banking as well as non-banking assessees. Assessee also placed reliance on the decision of Hon'ble Apex Court in the case of Southern Technologies Ltd. v. JCIT 320 ITR 577 (SC). We take note of the findings 16 ITA No. 8503/Mum/2025 and ors. Hitech Corporation Limited AYs 2011-12 to 2015-16 of the Hon'ble Supreme Court in the case of Vijaya Bank (supra) to consider the contention of the assessee, which is reproduced as under:
"Provision for bad debts mere reduction in the Loans and Advances or Debtors on the asset side of Balance Sheet to the extent of the provision for bad debt would be sufficient to constitute a write off: The first question is no more res integra. Recently, a Division Bench of this Court in the case of Southern Technologies Limited vs. Joint Commissioner of Income Tax, had an occasion to deal with the first question and it has been answered, accordingly, in favour of the assessee and held, "one must understand 'how to write off'. If an assessee debits an amount of doubtful debt to the profit and loss account and credits the asset account like sundry debtor's account, it would constitute a write off of an actual debt. However, if an assessee debits 'provision for doubtful debt' to the profit and loss account and makes a corresponding credit to the current liabilities and provisions' on the liabilities side of the balance-sheet, then it would constitute a provision for doubtful debt. In the latter case, the assessee would not be entitled to deduction after April 1, 1989.' Further, it has been held that coming to the second question, we may reiterate that it is not in dispute that Section 36(1)(vii) of 1961 Act applies both to Banking and Non-Banking businesses. The manner in which the write off is to be carried out has been explained hereinabove."
15.2. It is pertinent to note that this issue has also been dealt by the Coordinate Bench in the case of Asian Paints Ltd in ITA nos. 2700, 2697 and 2696/Mum/2023, dated 26.07.2024 for A.Y. 2016-17 to 2018-19. In this judicial pronouncement, reliance was placed on the decision of Hon'ble Jurisdictional High Court of Bombay in the case of CIT v. Tainwala Chemicals & Plastics India Ltd. [2013] 215 Taxman 153. Relevant extracts from the decision of the Coordinate Bench (supra) are as under:
"38. In ground Nos. IX & X, assessee has challenged the disallowance of provision for doubtful debts under normal computation and adjustment to book profits u/s.115JB of the Act.
39. The brief facts are that during the year consideration, the assessee had made an incremental provision for doubtful debts of Rs. 3.34 Crores. The said provision was created by debiting the profit and loss account and correspondingly credit has been reflected the under the sundry debtors account in balance sheet. These provisions for doubtful debts is made at an individual debtor level and not at consolidated level based on percentage of total value of debtors. Further, the said 17 ITA No. 8503/Mum/2025 and ors. Hitech Corporation Limited AYs 2011-12 to 2015-16 treatment of reduction from Sundry Debtors is an effective write off as observed by Hon'ble SC in the case of Vijaya Bank Ltd. vs. CIT (2010) 322 ITR 166 and accordingly the assessee has claimed provision for doubtful debts.
40. However, the ld. AO disallowed such provision observing that judgement of Vijaya Bank only applies to banking companies, further, also made an observation that the provision was created on an estimated basis considering the percentage of the total value of receivables and the individual debtor's account have also not been adjusted with provision amount and also that the assessee had shown its debtors in the balance sheet at full value and the provision amount was shown on the liability side of balance sheet. Further, the ld. CIT(A) upheld the disallowance made by the ld. AO by holding that it was not actual write off as irrecoverable bad debts and hence not allowable.
40.1 Ld. Counsel submitted that this issue is decided by the Tribunal in assessee's own case for A.Y.2015-16 and observed that if the assessee claims deduction of provision for doubtful debts, without any write-off of irrecoverable debt and it is contrary to section 36(1) (vii) of the Act. Further, Vijaya Bank (supra) is not applicable in the case of the Assessee, as the said decision was rendered in case of banking company. Accordingly, the provision for doubtful debts was disallowed holding that bad debts written off are allowable in the year in which it is actually written off. Thus this issue was decided against. However, Ld. Counsel for the assessee relied upon by the decision of the Hon'ble Jurisdictional High Court in the case of C1T v. Tainwala Chemicals & Plastics India Ltd. [2013] 215 Taxman 153 wherein assessee-company made provision for doubtful debt given to its group concern and had debited same to profit and loss account and correspondingly reduced assets by reducing amount of unsecured loans, doubtful debt qualified for deduction under section 36(1)(vii) following Vijaya Bank (supra). This judgment was not considered in the earlier AY 2015-16 ITAT order
41. Further, the Hon'ble Supreme Court in Vijaya Bank (supra) itself observed at Pg. 383 and Para 8 of LPB that 'it is not in dispute that section 36(1)(vii) of the Act applies both to the Banking and Non- Banking business'. Accordingly, it appears that the Tribunal in earlier year in assessee's own case inadvertently did not consider this observation. Further, decision of Tainwala (supra) rendered by Jurisdictional High Court was not cited and therefore not considered.
42. Further, decision of Vijaya Bank (supra) is in the context of section 11 5JB qua provision for doubtful debts also followed by Karnataka High Court in CIT v. Kirloskar Systems Ltd 220 Taxman I and Hon'ble Gujarat High Court in the case of CIT v. Vodafone Essar Gujarat Ltd [2017] 397 ITR 55 for doubtful debt while computing book profit u/s.II5JB).
43. He also submitted that similar issue has arisen in the Joint venture company M/s Asian Paints PPG Pvt Ltd. The ld. CIT (A) had ruled the issue in favour of 18 ITA No. 8503/Mum/2025 and ors. Hitech Corporation Limited AYs 2011-12 to 2015-16 company. The department had challenged the order of the ld.CIT (A) before the Mumbai Tribunal which was dismissed by the Tribunal.
44. Ld. DR strongly relied upon the order of the ld. AO and ld. CIT(A) and also the decision of the Tribunal in assessee's own case for A.Y.2015-16.
45. We have heard both the parties and also perused the relevant finding given in the impugned orders. Assessee has made incremental provision for Rs. 3.34 Crores. The said provision was created by debiting the profit and loss account and correspondingly credit has been reflected the under the sundry debtors account in balance sheet. One very important fact is that the provision for doubtful debts is made at an individual data level and on consolidated level based on percentage of total value of debtors. Though this issue has been decided by this Tribunal in A.Y.2015-16, however, we find that Hon'ble Bombay High Court in the case of CIT vs. Tainwala Chemicals & Plastics India Ltd. (supra), following the principle laid down by the Hon'ble Supreme Court in the case of Vijaya Bank Ltd. held that where assessee company made provision for doubtful debts given to its group concern and debited the same to the profit and loss account and correspondingly reduced the assets by reducing the amount of unsecured loans, doubtful debts is qualified for deduction u/s.36(1)(vii). We find that the Tribunal had not considered the judgment of the Hon'ble Jurisdictional High Court and held that judgment of Vijaya Bank is not applicable in the case of assessee as it is applicable on the banking business. Further, we find that the Hon'ble Supreme Court in para 8 of its judgment have held that u/s.36(1)(vii) applies both for banking and non-banking business. Another important fact is that principle of Vijaya Bank in the context of u/s.115JB for the provision of doubtful debts had also been followed by the Karnataka High Court in the case of CIT vs. Kirloskar Systems Ltd(supra), the Hon'ble Gujarat High Court in the case of Vodafone Essar Gujarat Ltd. (supra) wherein the Hon'ble High Courts have allowed the provision for doubtful debts while computing the book profit u/s.115JB. Apart from that in sister concern, this Tribunal has decided this issue in favour of the assessee.
46. The ld. AO has added provision for doubtful debts to the book profit u/s.115JB. However, under earlier provisions of u/s.115JB any amount set aside for meeting liabilities, other were to be added back. The than ascertained liabilities Department used to add back provision of doubtful debt in said category. However, the Supreme Court in CIT v. HCL Comnet Systems & Services [2008] 174 Taxman 118 decided matter in favour of Assessee. Thereafter, the Act was amended and a provision for diminution in the value of the asset was categorically inserted vide Finance Act 2009 (i.e. under clause (i) However, even after such amendment, Jurisdictional HC in 8. "Whether, on Tainwala Chemicals above observed that the facts and circumstances of the case, the Tribunal was justified in upholding the decision of the CIT (A), in deleting the addition on account of provision for doubtful debts to the book profit under Section 115JB of the Act without appreciating that the disallowance / addition on account of diminution in the value of assets 19 ITA No. 8503/Mum/2025 and ors. Hitech Corporation Limited AYs 2011-12 to 2015-16 is mandatory in view of Explanation (I) to Section115JB of the Act ? In so far as question (k) is concerned, the grievance of the Revenue is that for the purpose of computing profits under Section 115JB, the provision of doubtful debts has to be added. In view of our decision to question (u) above, issue of adding back the provisions for the purpose of computing book profits does not survive. This is particularly so in view of the fact that the Tribunal has recorded a finding of fact that the provision has been written off. Accordingly, we see no reason to entertain question (k)'.
47. This principle of Hon'ble Bombay High Court has been followed by the Hon'ble Karnataka High Court and Hon'ble Gujarat High Court wherein post amendment to Section 115JB also even for the book profit provision for doubtful debts has been allowed as deduction. Therefore, in view of the principles laid down by the Hon'ble Jurisdictional High Court and other High Courts as noted above, we hold that the provision for doubtful debts is deductible not only under normal provisions of law but also u/s.115JB. Accordingly, ground No. IX and X are allowed.
15.3. Similar issue had arisen in the case of Asian Paints PPG Pvt Ltd also for A.Y. 2012-13, wherein matter travelled before the Tribunal in ITA no. 6548/Mum/2017, dated 22.05.2019 in the appeal filed by the Revenue which was held in favour of the assessee.
15.4. Taking into consideration the provisions of section 36(1)(vii) read with section 36(2), assessee has evidently demonstrated that it has reduced the trade receivables from its balance sheet in respect of provision for doubtful debts and thus, its case gets covered by the judicial precedent noted above. In the given set of facts, forfeited by the said judicial precedents, ground no. 3 raised by the assessee is allowed.
16. Ground no. 4 is on account of addition of employees' contribution to PF/ESIC under section 36(1)(va) read with section 2(24)(x) of Rs. 47,52,669/-. According to the assessee, contribution amounting to Rs. 40,17,091/- was actually paid within the due date as provided in PF and ESIC Act. The delay is only in respect of amount of Rs. 7,35,578/- for which assessee placed on record all relevant documentary evidence 20 ITA No. 8503/Mum/2025 and ors. Hitech Corporation Limited AYs 2011-12 to 2015-16 forming part of the paper book. Details in this regard is tabulated below for ready reference:-
Sr Month Unit Employee's Date of Due Date of Delay
No. Contribution Payment Payment in
Days
1 Jan -13 Corp 95,131/- 16/02/2013 15/02/2013 1
2 Sep-12 Masat 24,221/- 16/10/2013 15/10/2012 1
3 Dec- 12 SPMBR 35,922/- 18/01/2013 15/01/2013 3
4 Jul-12 Rohtak 44,764/- 16/08/2012 15/08/2012 1
5 Aug-12 Rohtak 53,260/- 17/02/2012 15/02/2012 2
6 Jan -13 Rohtak 51,287/- 18/02/2013 15/02/2013 3
7 April -12 Chinchwad 49,668/- 16/02/2012 15/02/2012 1
8 May- 12 Chinchwad 49,018/- 18706/2012 15/06/2012 3
9 June- 12 Chinchwad 48,566/- 16/07/2012 15/07/2012 1
10 Sep-12 Chinchwad 49,749/- 16/10/2012 15/10/2012 1
11 Oct. -12 Chinchwad 49,298/- 19/11/2012 15/11/2012 4
12 Dec. -12 Chinchwad 51,875/- 16/01/2013 15/01/2013 1
13 Jan -13 Chinchwad 52,825/- 16/02/2013 15/02/2013 1
14 Jan -13 Khandala 9,225/- 09/08/2013 15/02/2013 175
15 Feb-13 Khandala 21,410/- 09/08/2013 15/03/2013 147
16 Mar -13 Khandala 28,678/- 09/08/2013 15/04/2013 116
Total 7,14,897/-
16.1. Considering the facts on record as tabulated above, what ought to be disallowed is amount of Rs. 7,14,897/- instead of disallowance made of the entire amount of Rs. 47,52,669/-. Since these details need factual verification, we find it appropriate to remit this specific issue for limited purpose of verification to the file of ld. Jurisdictional Assessing Officer (JAO) to verify the facts with corroborative documentary evidence and consider the claim of the assessee. Ld. JAO is directed to keep in 21 ITA No. 8503/Mum/2025 and ors. Hitech Corporation Limited AYs 2011-12 to 2015-16 perspective the decision of Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. (2022) 440 ITR 518 (SC). Accordingly, ground no. 4 raised by the assessee is allowed for statistical purposes.
17. In the result, appeal of the assessee is allowed for statistical purposes.
18. Appeal by the Revenue for A.Y. 2013-14 is on the grounds which have already been dealt by us while adjudicating appeal for A.Y. 2011-
12 in the above paragraphs in ITA no. 536/Mum/2026. Fact pattern remains the same on all the grounds raised by the Revenue and nothing contrary has been brought on record to demonstrate material change in the same as well as in the position of law. Since we have already adjudicated on all these issues in A.Y. 2011-12, our observations and findings on the issues raised in A.Y. 2013-14 applies mutatis mutandis. Accordingly, appeal by the Revenue is dismissed.
19. We now take up appeal for A.Y. 2014-15 filed by the assessee. Ground no. 1 relates to disallowance under section 14A amounting to Rs. 1,62,21,849/-. The contention of the assessee in this respect is that there is no exempt income earned during the year as in the preceding years, which we have adjudicated upon in the above paragraphs. Facts being identical except variation in the quantum, our observations and findings on this issue in the above paragraphs applies mutatis mutandis. Ground no. 1 raised by the assessee is allowed.
20. Similarly, ground no. 2 in respect of addition made u/s 68 of Rs.7,35,000/- towards deposits received during the year and of Rs.73,500/- towards interest thereon and ground no. 3 in respect of disallowance of provision for doubtful debts of Rs.22,91,661/- are the 22 ITA No. 8503/Mum/2025 and ors. Hitech Corporation Limited AYs 2011-12 to 2015-16 issues which we have already adjudicated upon in the appeal for immediately preceding assessment years i.e. A.Y. 2013-14. Facts remain same except for the variation in the quantum and nothing contrary brought on record by the Revenue. Our observations and findings on these two issues given in appeal for A.Y. 2013-14 applies mutatis mutandis. Accordingly ground nos. 2 and 3 are allowed.
21. Ground no. 4 is in respect of set off claimed by the assessee for brought forward MAT credit under section 115JAA of Rs. 80,42,465/- which has not been allowed to the assessee. Contention of the assessee in this regard is that assessment for the immediately preceding year i.e. A.Y. 2013-14 has been completed under section 143(3), wherein MAT credit claimed by the assessee is accepted and available to it for set off in the subsequent years in accordance with provisions of section 115JAA. In this regard, reference was made to the assessment order for A.Y. 2013-14 placed on record. Assessee had raised this issue before the ld. CIT(A) who did not deal with the same. Taking into consideration material on record, on this issue we direct the ld. AO to consider the claim of the assessee for set off of MAT credit available to it which has been accepted in the assessment completed under section 143(3) for A.Y. 2013-14, against the tax liability under the normal provisions for the year under consideration. Ground no. 4 raised by the assessee is allowed.
22. In the result, appeal by the assessee for A.Y. 2014-15 is allowed.
23. Now we take up appeal by the assessee for A.Y. 2015-16. Ground no. 1 relates to disallowance of provision for doubtful debts amounting to Rs. 34,20,657/-. Issue raised through this ground has already been adjudicated upon by us in the above paragraphs while dealing with 23 ITA No. 8503/Mum/2025 and ors. Hitech Corporation Limited AYs 2011-12 to 2015-16 ground no. 3 in appeals for A.Y. 2013-14 and 2014-15. Facts in the present case are similar to what we have already dealt with except for variation in the quantum. Nothing contrary has been brought on record by the Revenue for this year. Accordingly, our observations and findings in the preceding years dealt by us applies mutatis mutandis. This ground raised by the assessee is allowed.
24. Ground no. 2 raised by the assessee is towards claiming credit of tax which has not been considered in respect of advance tax and TDS as these are duly reflected in Form 26AS placed on record by the assessee. Assessee evidently demonstrated that TDS done by Mipak Packaging Solutions Ltd. i.e. merged entity with the assessee appears in Form 26AS which has not been considered for giving credit. Similarly, assessee has deposited advance tax of Rs. 4.43 crores though credit allowed to it is of Rs. 3.53 crores only, resulting in short credit of Rs. 90 lakhs.
24.1. The issue raised before us is factual one as evident from Form 26AS available on record. Considering the same, ld. AO is directed to grant credit for TDS and advance tax as claimed by the assessee and appearing in Form 26AS. Accordingly, ground no. 2 raised by the assessee is allowed.
25. In the result, appeal of the assessee for A.Y. 2015-16 is allowed.
26. Before parting, we also taking into consideration ground raised by the assessee in all of its appeals relating to interest charged under section 234B and 234C through their respective ground numbers. This ground is consequential in nature since interest chargeable under section 234B and 234C will have a bearing while giving effect to this 24 ITA No. 8503/Mum/2025 and ors. Hitech Corporation Limited AYs 2011-12 to 2015-16 appellate order by the ld. AO. Hence, does not need separate adjudication.
27. In the result, summary of results in all these captioned appeals is tabulated below:
ITA No. Assessment Appeal by Result of the
Sr. Year appeal
No.
8503/Mum/2025 2011-12 Assessee Allowed
8504/Mum/2025 2012-13 Assessee Allowed
8505/Mum/2025 2013-14 Assessee Allowed
8506/Mum/2025 2014-15 Assessee Allowed
8507/Mum/2025 2015-16 Assessee Allowed
536/Mum/2026 2011-12 Revenue Dismissed
537/Mum/2026 2013-14 Revenue Dismissed
Order pronounced in the open court on 29.04.2026.
Sd/- Sd/-
(Sandeep Gosain) (Girish Agrawal)
Judicial Member Accountant Member
Dated: 29 April, 2026
Sr. P.S.
Copy of the order forwarded to:
1. The appellant
2. The respondent
3. CIT-concerned
4. DR, ITAT, Mumbai
5. Guard file
By order
Dy/Asstt. Registrar
ITAT, Mumbai