TMI Blog2015 (11) TMI 1745X X X X Extracts X X X X X X X X Extracts X X X X ..... inclusion of damaged stock in valuation of closing stock - Held that:- An identical issue was considered by the Tribunal in assessee’s own case [2011 (10) TMI 629 - ITAT, MUMBAI]wherein the Tribunal has followed the finding of the Co-ordinate Bench given in earlier years and concluded by holding that “ consistent with the above stand we uphold the order of the CIT(A) and dismiss Ground No.3 of the assessee Disallowance u/s 14A r.w. Rule 8D - Held that:- Assessing Officer has not recorded any satisfaction nor he has made any observation on the computation of disallowance made by the assessee and the disallowance is confirmed by the CIT(A). We accordingly set aside the finding of the CIT(A) and direct the Assessing Officer to delete the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer . The Assessing Officer is directed to decide the issue in the light of the DTAA. The additional ground is treated as allowed for statistical purposes. - ITA No. 7253/MUM/2012, ITA No. 23/MUM/2013 - - - Dated:- 20-11-2015 - Shri Saktijit Dey,Judicial Member And Shri N.K.Billaiya, Accountnt Member Assessee by : Shri K. Shivram Revenue by : Shri Pawan Kumar ORDER Per N.K.Billaiya,AM: ITA No.7253/Mum/20012 and 23/Mum/2013 are cross appeals by the assessee and the Revenue against the very same order of the CIT(A)-15, Mumbai dated 25/10/2012 pertaining to the assessment year 2008-09. Since both these appeals are heard together, they are disposed of by this common order for the sake of convenience. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich we find the Assessing Officer has done, therefore, this ground is decided against the assessee. 5. Ground No.2 relates to an adhoc addition of ₹ 15.40 lacs being 0.5% of value of closing stock of finished goods after reducing the opening stock on account of non-inclusion of damaged stock in valuation of closing stock. 5.1 An identical issue was considered by the Tribunal in assessee s own case in ITA No.408/Mum/2010 at Para-15 of its order, wherein the Tribunal has followed the finding of the Co-ordinate Bench given in earlier years and concluded by holding that consistent with the above stand we uphold the order of the CIT(A) and dismiss Ground No.3 of the assessee . Respectfully following the finding of the Co-ordinate B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2012 and 4795/Mum/2012. Per contra, the Ld. DR strongly relied upon the findings of the lower authorities. 6.3 We have carefully perused the orders of the authorities below. We have also given thoughtful consideration to the computation of disallowance made by the assessee. It is an undisputed fact that the Assessing Officer has simply invoked the provisions of section 14A r.w. Rule 8D of the Act without making any observation on the computation of disallowance made by the assessee. By doing so, the Assessing Officer has completely ignored clause (2) of section 14A, which mandates the Assessing Officer to record his satisfaction before proceeding further. In the instant case, we find that the Assessing Officer has not recorded any satis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e expenditure as a revenue expenditure, hence the claim of depreciation by the assessee becomes otiose. 8.2 We find force in the contention of the Ld. Senior Counsel. The Tribunal has at Para-5 of its order in ITA No.2126/Mum/2012 has followed the findings of the Co-ordinate Bench for assessment year 2006-07 and deleted the disallowance made by the Assessing Officer on account of expenditure incurred on television advertisement. Since the entire expenditure has been allowed as revenue expenditure, the claim of depreciation becomes otiose. Ground No.5 is accordingly dismissed. 9. Coming to the additional ground raised by the assessee by which the assessee has claimed that royalty income of ₹ 3.17 lacs is received from overseas su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he first mentioned state. Admitting the additional ground of appeal, we restore this issue to the files of the Assessing Officer . The Assessing Officer is directed to decide the issue in the light of the DTAA. The additional ground is treated as allowed for statistical purposes. 10. In the result, the appeal filed by the assessee is partly allowed. ITA NO.23/MUM/2013-Revenue s Appeal:- 11. Ground No.1 relates to the deletion of the addition made on account of advertisement expenditure and the claim of depreciation thereon. This issue has been considered and discussed at length in assessee s appeal, qua Ground No.5 of that appeal. For the reasons discussed therein, Revenue s appeal on this ground is dismissed. 12. Ground No.2 r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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