M/s. SABERO ORGANICS GUJARAT LTD., MUMBAI v. ITO 7(2)(4), MUMBAI

ITA 3940/MUM/2005 | 2001-2002
Pronouncement Date: 16-07-2010 | Result: Partly Allowed

Appeal Details

RSA Number 394019914 RSA 2005
Assessee PAN AABCS5313C
Bench Mumbai
Appeal Number ITA 3940/MUM/2005
Duration Of Justice 5 year(s) 1 month(s) 22 day(s)
Appellant M/s. SABERO ORGANICS GUJARAT LTD., MUMBAI
Respondent ITO 7(2)(4), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 16-07-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted J
Tribunal Order Date 16-07-2010
Date Of Final Hearing 07-07-2010
Next Hearing Date 07-07-2010
Assessment Year 2001-2002
Appeal Filed On 25-05-2005
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J : MUMBAI BEFORE SHRI D.K. AGARWAL (JM) AND SHRI PRAMOD KUM AR (AM) ITA NO.3940/MUM/2005 ASSESSMENT YEAR : 2001-02 SABERO ORGANICS GUJARAT LTD. A-302 PHOENIX HOUSE 3 RD FLOOR 462 SENAPATI BAPAT MARG WORLI (E) MUMBAI-400 013. ..( APPELLANT ) P.A. NO. (AABCS 5313 C) VS. INCOME TAX OFFICER-7(2)(4) AAYAKAR BHAVAN MUMBAI. ..( RESPONDENT ) APPELLANT BY : MS. VASANTI PATEL RESPONDENT BY : SHRI S. T. BIDARI O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 21.3.2005 PASSED BY THE LD. CIT(A) FOR TH E ASSESSMENT YEAR 2001-02. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE COM PANY IS ENGAGED IN THE BUSINESS OF MANUFACTURE OF ORGANIC AND IN ORGANIC CHEMICALS AND PESTICIDES. THE RETURN WAS FILED DECLARING A LOSS OF RS.2 26 71 458/-. HOWEVER THE ASSESSMENT WAS COMPLETED A T A LOSS ITA NO.3940/M/05 A.Y:01-02 2 OF RS.2 11 62 060/- INCLUDING THE DISALLOWANCE U/S.40A( 3) RS.29 973/- DISALLOWANCE OF PROMOTION EXPENSES RS.2 22 825/- AND DEF ERRED REVENUE EXPENSES RS.93 89 328/- VIDE ORDER DATED 26.3 .2004 PASSED U/S.143(3) OF THE INCOME TAX ACT 1961 (THE ACT). ON A PPEAL THE LD. CIT(A) PARTLY ALLOWED THE APPEAL. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US . 4. GROUND NO.1 IS AGAINST THE SUSTENANCE OF DISALLOWANCE U/S.40A(3) RS.23 405/-. 5. THE BRIEF FACTS OF THE ABOVE ISSUE ARE THAT ON VERI FICATION OF BOOKS AND VOUCHERS PRODUCED ON TEST CHECK BASIS IT WAS FOUN D BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS EXPENDED RS.22 375/- O N 24.5.2000 RS.21 868/- ON 12.6.2000 RS.32 841/- ON 1 7.2.2001 RS.20 150/- ON 21.2.2001 AND RS.52 629/- ON 8.3.2001 TOTALLING TO RS.1 49 863/- IN CASH EXCEEDING RS.20 000/-. ACCORDING TO THE ASSESSING OFFICER AS THE PAYMENTS ARE DIRECTLY IN CONTRAVENT ION OF THE PROVISIONS OF SECTION 40A (3) HE DISALLOWED RS.29 973/ - BEING 20% OF THE SAME AND ADDED TO THE INCOME OF THE ASSESSEE . ON AP PEAL THE LD. CIT(A) OBSERVED THAT IN VIEW OF THE RATIO OF DECI SION IN SUMAN PRAKASHAN PVT. LTD. VS. CIT 195 ITR (ST.) 150 (DEL.) THE SUM TOTAL OF ALL THE PAYMENTS MADE IN THE COURSE OF A DAY TO A SINGL E PARTY HAS TO ITA NO.3940/M/05 A.Y:01-02 3 BE CONSIDERED FOR DISALLOWANCE U/S.40A(3). HE FURTHER OB SERVED THAT THE INCOME TAX RULE 6DD(J) COVERING THE EXCEPTIONAL CIR CUMSTANCES UNDER WHICH THE PAYMENT CAN BE MADE IN CASH STANDS AMEN DED W.E.F. 1.4.1988 AND NOW THE DISALLOWANCE U/S.40A(3) IS MANDATO RY IF THE PAYMENT DOES NOT FALL IN ANY OF THE SUB-CLAUSES MENTION ED IN CLAUSE (B) OF RULE 6DD. HE FURTHER OBSERVED THAT ON PERUSAL OF DETAILS OF PAYMENTS GIVEN IN THE WRITTEN SUBMISSIONS ONLY THE PAYME NT OF RS.32 841/- IS COVERED BY CLAUSE (B) AS THE PAYMENT OF R S.32 841/- IN RESPECT OF 48 RAILWAY TICKETS IS TO GOVERNMENT DEPARTM ENT AND HENCE HE DELETED THE DISALLOWANCE OF RS.6 568/- BEING 20% OF THE AMOUNT OF RAILWAY TICKETS AND CONFIRMED THE BALANCE DISALLOWANCE. 6. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSE SSEE SUBMITS THAT THE CASH PAYMENT OF RS.22 375/- ON 24.5.2000 WAS M ADE BY WAY OF TWO SEPARATE PAYMENT VOUCHERS I.E. RS.10 000/- AS AD VANCE PAID AND RS.12 375/- AS BALANCE AMOUNT PAID FOR PURCHASE OF FOREIGN EXCHANGE OF US $ 500 FOR THE FOREIGN TRIP OF THE MAN AGING DIRECTOR. THE PAYMENTS WERE MADE TO THE REGULAR KNOWN PARTY VI Z. TRADE WINGS LTD. THE PAYMENTS WERE MADE IN TWO SEPARATE SUMS. TH E ONLY FLAW FOUND BY THE ASSESSING OFFICER IS THAT THE BILL IS ONLY O NE. SHE FURTHER SUBMITS HAT CASH PAYMENT OF RS.21 868/- ON 12.6.2000 CO NSISTS OF 13 NUMBER OF DOCUMENTS/BILLS/CMS WHICH INDIVIDUALLY AR E VERY SMALL AMOUNTS. THESE ARE BUNCHED TOGETHER BY THE TRAVELING E XECUTIVE AND ITA NO.3940/M/05 A.Y:01-02 4 THE EXPENDITURE INCURRED BY HIM ON DAY TO DAY BASIS OF HIS TRAVEL IS REIMBURSED TO HIM ON HIS RETURN FROM TOUR AT ONE TIM E. NO INDIVIDUAL PAYMENT IS IN EXCESS OF RS.20 000/-. THE REIMBURSEMENT I S MADE TO THE ASSESSEE'S OWN EMPLOYEE WHO IS GM-MARKETING AND THUS THE PAYEE IS WELL KNOWN TO THE COMPANY. BUSINESS EXPEDIENCY (RULE 6DD) AND THE NORMAL REIMBURSEMENT PROCEDURE GOVERNS THESE RO UTINE PAYMENTS. THESE ARE NOT THIRD PARTY PAYMENTS AS CONT EMPLATED U/S.40A(3) AND SUCH REIMBURSEMENTS ARE NOT INTENDED TO BE BROUGHT WITHIN THE MISCHIEF OF SECTION 40A(3) READ WITH THE REL EVANT RULES. SHE FURTHER SUBMITS THAT CASH PAYMENTS OF RS.20 150/- ON 21.2 .2001 WAS MADE TO LABOURER/CARPENTER IN TWO PARTS AS SEPARATE PAY MENTS (I)ADVANCE-RS.10 000/- (II)BALANCE RS.10 150/-. THE CARPENTER DOES NOT HAVE A BANK ACCOUNT THEREFORE HAS INSISTED FOR ADVA NCE AND THE REST OF THE FINAL PAYMENT ALSO IN CASH. NORMALLY THE SE CASUAL LABOURERS/CONTRACTORS DO INSIST ON CASH PAYMENTS. SINCE THE AMOUNTS ARE SMALL AND THE TIME IS NOT THERE TO TAKE CHEQUES AND REALIZE THOSE AND MAKE PAYMENTS FOR MATERIALS ETC. THIS IS A GENUINE B USINESS EXPENDITURE AND IS INCURRED IN THE NORMAL COURSE OF THE BUSINESS. SHE FURTHER SUBMITS THAT CASH PAYMENT OF RS.52 629/- ON 8.3. 2001 CONSISTS OF TWO INDEPENDENT PAYMENTS I.E. RS.17 000/- AN D RS.35 629/- . THE AMOUNT OF RS.17 000/- TRANSFERRED TO THE FACTORY IS ONLY INTERNAL TRANSFER AND IS NOT AN EXPENDITURE. IT CANNOT BE BROUGHT ITA NO.3940/M/05 A.Y:01-02 5 UNDER THE SCOPE OF SECTION 40A(3) OF THE ACT. AS REGARD S THE CONFERENCE EXPENSES RS.35 629/- IT IS MERELY A REIMBURSEM ENT TO ASSESSEE'S OWN EMPLOYEE AND THAT TOO NO SINGLE ITEM OF EXPENSE HAS EXCEEDED RS.20 000/-. SHE THEREFORE SUBMITS THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CI T(A) BE DELETED. 7. ON THE OTHER HAND THE LD. DR SUPPORTS THE ORDER OF THE ASSESSING OFFICER AND THE CIT(A). 8. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. SEC.40A (3) OF THE ACT PROVIDES THAT WHERE A PAYMENT IS MADE FOR A SUM EXCEEDI NG RS.20 000/- OTHERWISE THAN BY A CROSSED CHEQUE DRAWN ON A BANK OR A CROSSED BANK DRAFT 20% OF SUCH EXPENDITURE SHALL NOT B E ALLOWED AS A DEDUCTION. SECOND PROVISO PROVIDES THAT NO DISALLOWAN CE UNDER THIS SUB-SECTION SHALL BE MADE WHERE ANY PAYMENT IN A SUM EXCE EDING RS.20 000/- IS MADE OTHERWISE THAN BY A CROSSED CHEQUE DRA WN ON A BANK OR A CROSSED BANK DRAFT IN SUCH CASES AND UNDER SUCH CIRCUMSTANCES AS MAY BE PRESCRIBED HAVING REGARD TO THE NA TURE AND EXTENT OF BANKING FACILITIES AVAILABLE CONSIDERATIONS O F BUSINESS EXPEDIENCY AND OTHER RELEVANT FACTORS. IT MAY BE NOTE D THAT RULE 6DD(J) HAS SINCE BEEN OMITTED BY THE INCOME TAX (FOURTE ENTH ITA NO.3940/M/05 A.Y:01-02 6 AMENDMENT) RULES 1995 W.E.F. 25.7.1995 AND NEW CLAU SES (J) TO (L) ARE INSERTED IN RULE 6DD W.E.F. 1.12.1995. IN THE CA SE BEFORE US THE ASSESSEE HAS BROUGHT NO MATERIAL ON RECORD TO SHOW THE EXCE PTIONAL CIRCUMSTANCES AS PROVIDED UNDER THE ABOVE PROVISO TO SECTIO N 40A(3) OR UNDER NEW CLAUSE OF RULE 6DD(J) TO (L) OF THE I.T. RULES 1961. THIS BEING SO AND IN THE ABSENCE OF ANY CONTRARY MATERIAL PL ACED ON RECORD BY THE LD. COUNSEL FOR THE ASSESSEE FOR THE ASSESSEE AGAINST THE FINDING OF THE LD. CIT(A) WE ARE OF THE VIEW THAT THE ASSESSEE HAS VIOLATED THE PROVISIONS OF SECTION 40A(3) OF THE ACT AND HENCE THE LD . CIT(A) WAS FULLY JUSTIFIED IN SUSTAINING THE DISALLOWANCE. HOWEVER KEEPING IN VIEW THAT THE ENTRY OF RS.17 000/- IS AN INTERNAL TRANSFER AND CONTRA ENTRY AND IT IS NOT A PAYMENT ON THE SAID DATE WE ARE OF TH E VIEW THAT THE DISALLOWANCE OF 20% OF RS.17 000/- IS UNCALLED FOR. ACCOR DINGLY THE ASSESSING OFFICER IS DIRECTED TO ALLOW A RELIEF OF RS.3 400 /- ON THIS ACCOUNT. THE GROUND TAKEN BY THE ASSESSEE IS THEREFORE P ARTLY ALLOWED. 9. GROUND NO.2 IS AGAINST THE SUSTENANCE OF DISALLOWANCE OF PROMOTION EXPENSES OF RS.2 22 825/-. 10. THE BRIEF FACTS OF THE ABOVE ISSUE ARE THAT IT WAS O BSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS CLAIMED PURCHASE OF GOLD COINS WORTH RS.2 22 825/- FROM CHOKSI ARVIND JEWELLERS AND O THERS MUMBAI. ITA NO.3940/M/05 A.Y:01-02 7 THE ASSESSEE WAS ASKED TO PRODUCE PROOF REGARDING THE USE OF THE SAID GOLD COINS AND DETAILS OF DISTRIBUTION IF SO DONE. IN THE ABSENCE OF SAID DETAILS THE ASSESSING OFFICER WAS OF THE VIEW THAT THE PURCHASES WERE NOT FOR BUSINESS PURPOSES AND ACCORDINGLY HE DISALLOW ED RS.2 22 825/- AS BEING NON-BUSINESS EXPENDITURE. ON APP EAL BEFORE THE LD. CIT(A) IT WAS SUBMITTED BY THE ASSESSEE THAT THE GOLD COINS ARE ONLY DISTRIBUTED AS GIVE-AWAY OR PRESENTATION ARTICLES BY WAY OF INCENTIVES FOR PROMOTING THE SALES. IT WAS FURTHER SUBMI TTED THAT REGARDING PROOF OF SUCH ITEMS HAVING BEEN ACTUALLY DISTR IBUTED THE FACT IS THAT THESE ITEMS ARE ALLOCATED TO VARIOUS DISTRIBUTORS BASED ON THEIR BUSINESS SIZE AND IMPORTANCE AND IT IS THEY WHO REACH TH E ITEMS TO THE DEALERS IN THE MARKET. IT WAS FURTHER ARGUED THA T CONSIDERING THE TURNOVER OF RS.7 959.27 LACS THE EXPENDITURE OF RS.2 2 2 825/- COMES TO ONLY 0.028% AND SHOULD NOT BE DISALLOWED. THE LD. CIT(A) AFTER CONSIDERING THE ASSESSEE'S SUBMISSION OBSERVED THAT THE ASSESSEE HAS NOT FURNISHED ANY PROOF OF THE DISTRIBUTION OF GOLD CO INS NOT EVEN THE DETAILS OF THE DISTRIBUTORS TO WHOM THE GOLD COINS WER E ASSIGNED FOR DISTRIBUTION TO THE DEALERS HELD THAT THE ASSESSEE HAD FA ILED IN DISCHARGING THE BURDEN CAUSED ON IT TO ESTABLISH THE CLAI M OF EXPENSES AND HENCE CONFIRMED THE DISALLOWANCE. 11. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSESSEE WHILE REITERATING THE SAME SUBMISSIONS AS SUBMITTED BEFORE THE LD. CIT(A) ITA NO.3940/M/05 A.Y:01-02 8 FURTHER SUBMITS THAT SINCE THE EXPENDITURE HAS BEEN INCUR RED FOR THE PROMOTION OF BUSINESS ALLOWABLE AS REVENUE EXPENDITURE AND HENCE THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(A) BE DELETED. 12. ON THE OTHER HAND THE LD. DR SUBMITS THAT SINCE T HE ASSESSEE HAS NOT DISCHARGED HIS BURDEN THE DISALLOWANCE MADE BY ASSESSING OFFICER AND SUSTAINED BY LD. CIT(A) BE UPHELD. 13. HAVING CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVA L PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD WE FIND THAT THE ASSESSEE VIDE WRITTEN SUBMISSION DATED 16.3.2005 FILED BE FORE THE LD. CIT(A) HAS ENCLOSED THE LIST OF GOLD COINS DISTRIBUTED T O VARIOUS BUSINESS ASSOCIATES. THE LD. CIT(A) WITHOUT CONSIDERING T HE SAME OR ASKING FOR FURTHER DETAILS HAS UPHELD THE DISALLOWANCE O F RS.2 22 825/- MADE BY THE ASSESSING OFFICER. CONSIDERING THE TOTALITY O F THE FACTS AND CIRCUMSTANCES OF THE CASE AND KEEPING IN VIEW THAT THE GOL D COINS WERE DISTRIBUTED AS A SALES PROMOTION TO THE VARIOUS DISTRIBUT ORS BASED ON THEIR VOLUME OF BUSINESS WITH THE ASSESSEE THE EXPENDITUR E OF RS.2 22 825/- COMES TO ONLY 0.028% SUCH EXPENSES WAS ALLOWE D IN PAST AND IN THE ABSENCE OF ANY MATERIAL TO SHOW THAT SU CH EXPENSES ARE PERSONAL OR CAPITAL IN NATURE WE ARE OF THE VIEW THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE DISALLOWANCE OF RS.2 22 825/- AND ITA NO.3940/M/05 A.Y:01-02 9 ACCORDINGLY THE SAME IS DELETED. THE GROUND TAKEN BY TH E ASSESSEE IS THEREFORE ALLOWED. 14. GROUND NO.3 IS AGAINST THE SUSTENANCE OF DISALLOWANCE OF DEFERRED REVENUE EXPENDITURE RS.93 89 328/-. 15. THE BRIEF FACTS OF THE ABOVE ISSUE ARE THAT DURING THE COURSE OF THE ASSESSMENT IT WAS OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS CLAIMED AN AMOUNT OF RS.93 89 328/- UNDER THE HEAD DEFERRED REVENUE EXPENSES. ON BEING ASKED IT WAS SUBMITT ED BY THE ASSESSEE THAT RS.93.89 LACS TREATED AS REVENUE EXPENDITURE HAVE BEEN INCURRED NOT ON SET UP OF ANY PARTICULAR PLANT BUT IS ON ACCOUNT OF CHANGE IN THE LAYOUT OF EXISTING PLANTS VIZ. GLYPHOSATE PLANT AND ACEPHATE AND MONOCROTOPHOS PLANT. THESE HAVE BEEN ALRE ADY WORKING PLANTS AND NO NEW ASSET IS CREATED BY THIS EXPENDITURE. THE EXPENDITURE THEREFORE IS NOT OF CAPITAL NATURE. THE ASSESSEE HAS ALSO FILED PLANT-WISE DETAILS OF EXPENSES WHICH HAS BEEN EXTRA CTED BY THE ASSESSING OFFICER AT PAGE-6 OF HIS ORDER. THE ASSESSING OFFICE R AFTER CONSIDERING THE ASSESSEE'S SUBMISSIONS OBSERVED THAT THE ASSESSE E HAS CAPITALISED THE SAID EXPENDITURE IN THE BOOKS OF ACCOUNTS AND FOR INCOME TAX PURPOSES IT HAS CLAIMED THE SAME EXPENSE AS DEFE RRED REVENUE EXPENSES. THIS SHOWS THAT THE ASSESSEE HAS GIVEN T WO SEPARATE TREATMENTS TO THE SAME AMOUNTS IN THE COMPANYS BOOKS OF ITA NO.3940/M/05 A.Y:01-02 10 ACCOUNT AND FOR THE INCOME TAX PURPOSES WHICH IS NOT ALLO WABLE. THE ASSESSING OFFICER AFTER SUPPORTING HIS VIEWS BY THE DECISION IN M/S. SHREYAS SHIPPING LTD. 86 ITD 566 WHEREIN IT IS MENTIO NED THAT THE ASSESSEE CANNOT ASK FOR TWO DIFFERENT METHODS ONE FOR WR ITING BOOKS OF ACCOUNTS FOR THE PURPOSES OF ITS BUSINESS AND ANOTHER FOR HAVING A TAX LIABILITY DETERMINED UNDER THE ACT WAS OF THE VI EW THAT (PAGE 8 OF ASSESSMENT ORDER ): TAKING IN VIEW OF THE FACTS AND CIRCU MSTANCES MENTIONED AS ABOVE ASSESSEES ACCOUNTING METHOD FOR THE P URPOSE OF CLAIMING OF INTEREST IS REJECTED U/S. 145(3) OF INCOME-TA X ACT AND THIS INTEREST IS CAPITALIZED AS PART OF THE PROJECT COST IN TH E BOOKS OF ACCOUNTS. ASSESSEE IS NOT ALLOWED DEDUCTION OF THIS INTEREST FOR THE PURPOSE OF REDUCING THE TAX LIABILITY U/S. 36(1)(III) OF THE I.T. ACT. HENCE RS.93 89 328/- ON ACCOUNT OF INTEREST IS TREATED AS CAPITAL EXPENDITURE AND ADDED IN THE INCOME OF THE ASSESSEE .. .. ON APPEAL THE LD. CIT(A) HELD VIDE PENULTIMATE PARA OF HIS ORD ER AS UNDER : IN THE APPEAL PROCEEDINGS ASSESSEES SUBMISSION MADE BEF ORE THE ASSESSING OFFICER IN THIS REGARD WERE REITERATED. I T WAS SUBMITTED THAT THE EXPENDITURE WAS INCURRED NOT ON SET UP OF ANY PARTICULAR PLANT BUT IS ON ACCOUNT OF CHANGE IN TH E LAY OUT OF THE EXISTING PLANT NAMELY GLYPHOSATE PLANT AND ACEPHAT E AND MONOCROTOPHOS PLANT. IN THE COURSE OF THE HEARING OF T HE APPEAL AS PER ORDER SHEET ENTRY DATED 7 TH FEBRUARY 2005 THE LEARNED COUNSEL WAS ASKED TO PRODUCE THE TECHNICAL PROJECT REPORTS I N THIS REGARD SO AS THE NATURE OF THE EXPENDITURE CAN BE PROPERLY APPRECIATED. THE ASSESSEE HAS NOT PRODUCED THE TECHNICAL PR OJECT REPORTS. IN THE ABSENCE OF THE SAME IT IS NOT POSSIBLE TO FIND OUT AS TO WHETHER THE EXPENDITURE IN QUESTION IS OF CAPITAL NATURE OR IT IS OF REVENUE NATURE. IN THE ABSENCE OF THE TECHNI CAL PROJECT ITA NO.3940/M/05 A.Y:01-02 11 REPORTS BEING PRODUCED BY THE ASSESSEE THIS GROUND OF APP EAL IS DISMISSED. 16. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE SUBMITS THAT WHILE MAKING THE DISALLOWANCE THE ASSESSING OFFICER HAS TREATED THE DEFERRED REVENUE EXPENSES OF RS.93.89 LACS AS INTEREST NOT ALLOWABLE U/S.36(1)(III) OF THE ACT AND THE LD. CIT(A ) IN THE ABSENCE OF ANY TECHNICAL REPORT CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER . SINCE THE DISALLOWANCE WAS MADE ON ACCOUN T OF DIFFERENT REASONS WITHOUT CONSIDERING THE FACTS OF THE CA SE THEREFORE IN THE INTEREST OF JUSTICE THE ISSUE MAY BE SET ASIDE TO T HE FILE OF THE ASSESSING OFFICER. 17. ON THE OTHER HAND THE LD. DR WHILE RELYING ON T HE ORDER OF THE LD. CIT(A) SUBMITS THAT HE HAS NO OBJECTION IF THE ISSUE IS RESTORED BACK TO THE ASSESSING OFFICER. 18. AFTER HEARING THE RIVAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD WE FIND THAT THE DISALLOWANCE OF RS.93.89 LACS WAS MADE BY THE ASSESSING OFFICER ON DIFFERENT GROUND I.E. RS.93 89 328/- IS ON ACCOUNT OF INTEREST TREATED AS CAPITAL EXPENDITU RE WHICH DOES NOT BORNE OUT FROM THE RECORDS AND THE LD. CIT(A) WIT HOUT REJECTING THE FINDING OF THE ASSESSING OFFICER HAS SUSTAINED THE DISALLOW ANCE FOR DIFFERENT REASON THAT THE ASSESSEE HAS NOT PRODUCED THE T ECHNICAL ITA NO.3940/M/05 A.Y:01-02 12 PROJECT REPORTS DESPITE THE FACT THAT THE ASSESSEE HAS FILE D CERTIFICATE FOR THE CHANGE IN PROCESS DATED 20.4.2002 APPEARING AT PAGE-6 OF ASSESSEE'S PAPER BOOK THEREFORE WE ARE OF THE VIEW THA T IN THE INTEREST OF JUSTICE THE MATTER SHOULD GO BACK TO THE FI LE OF THE ASSESSING OFFICER AND ACCORDINGLY WE SET ASIDE THE ORDERS PASSE D BY THE REVENUE AUTHORITIES ON THIS ACCOUNT AND SEND BACK TH E MATTER TO THE FILE OF THE ASSESSING OFFICER WHO SHALL DECIDE THE SAM E AFRESH IN THE LIGHT OF OUR OBSERVATIONS HEREIN ABOVE AND ACCORDI NG TO LAW AFTER PROVIDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUND TAKEN BY THE ASSESSEE IS THEREFORE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 19. IN THE RESULT ASSESSEE'S APPEAL STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16.07.2010. SD/- SD/- (PRAMOD KUMAR) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 16.07.2010. JV. ITA NO.3940/M/05 A.Y:01-02 13 COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT(A) CONCERNED MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 7.7.10 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 8.7.10 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 16.7.10 SR.PS/PS 7. FILE SENT TO THE BENCH CLERK 20.7.10 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER