Reversal write-backs, foreign exchange losses, and secondment reimbursements are non-taxable, while transfer pricing adjustments require re-examination.

ORDER

Gagan Goyal, Accountant Member. – There is a Cross appeal by the assessee and the Revenue against the order of Ld. Commissioner of Income Tax (A)-18, Chennai, (hereinafter referred as the ‘Ld. CIT(A)’) dated 07.03.2023 for the Assessment Year (hereinafter referred as the ‘AY’) 2016-17.

Adjustment – INR 88, 68, 93,849/- Notional Tax Effect -INR 30, 69, 36,223/-

Erred in not appreciating the fact that the capacity of the past years of the Appellant is underutilized and that the Appellant had also claimed an idle capacity adjustment for those past years.

Erred in not appreciating the fact that the very basis for claiming the idle capacity adjustment is to eliminate the disparity in capacity utilization of comparable companies in the industry.

Erred in law and on facts in not appreciating that the provisions were considered as an operating expense in the assessment years when they were created.

Adjustment -INR 8, 73, 12,318/- Notional Tax Effect -INR 3, 02, 17,047/

Erred in not appreciating the fact that the capacity of the past years of the Appellant is underutilized and that the Appellant had also claimed an idle capacity adjustment for those past years.

Erred in not appreciating the fact that the very basis for claiming the idle capacity adjustment is to eliminate the disparity in capacity utilization of comparable companies in the industry.

Erred in law and on facts by not appreciating that for transfer pricing economic analysis, the comparability has to be established based on the functionality irrespective of the level of exports or employee costs.

Adjustment -INR 11, 63, 03, 363/-

Notional Tax Effect -INR 4, 02, 50,268/-

The Appellant prays that directions be given to grant all such relief arising from the above grounds and also all relief consequential thereto.

The Appellant craves leave to add, alter, amend and/or withdraw any of the above grounds of appeal and to submit such statements, documents and papers as may be considered necessary either at or before the hearing of this appeal as per law.

In addition to the above, the assessee has taken an additional ground also vide its letter as under:

On the facts and circumstances of the case and in the law, the Ld. AO erred in not passing the final assessment order within the time limit prescribed under section 153 of the Act which is the outer time limit for passing the final assessment order and hence, the assessment proceedings are time-barred and liable to be quashed.

On the facts and circumstances of the case and in the law, the Ld. TPO out to have provided the adjustment for higher non-Cenvatable customs duty paid by the appellant amounting to INR 56, 54, 58, 767/- on imports in the manufacturing of Earthmoving equipment segment, in the light of the decision of the coordinate bench of Chennai Tribunal in appellant’s own case for A.Y. 2014-15 (ITA No.717/Chny/2023).

3.1.1. The Ld. Assessing Officer (‘Ld.AO’) has erred in not re-computing the opening stock of inventory on the basis of disallowance of provision for obsolescence of inventory made in the prior years which is in line with the decision of the coordinate bench of Chennai Tribunal in Company’s own case for A.Y. 2014-15 (ITA No.717/Chny/2023).

Hence, the appellant wishes to raise the above ground before Your Honors to determine the legal principle surrounding the issue and further submits that the basic facts pertaining to the additional ground of appeal raised before Your Honors are already on record.”

2. The brief facts of the case are that the assessee – Caterpillar India Private Limited is a wholly owned subsidiary of Caterpillar Commercial S.A, Belgium which in turn is a wholly owned subsidiary of Caterpillar Inc. The company is engaged in the activities of manufacture and sale of earthmoving equipment including excavators, bull dozers, dumpers and loaders and spares for the same, manufacture and sale of diesel engines and gen-sets, provision of engineering design and related services, provision of marketing support services, provision of software development services (IT) and provision of shared services / information technology enabled services (ITES) to AE located in the Asia Pacific Region.

3. The assessee under consideration filed its return of income u/s. 139 of the Act and then filed revised return of income vide dated 21.01.2018 declaring total income at Rs. 81, 44, 26, 680/-. It is also pertinent to mention that there was a survey operation u/s. 133A of the Act on the premises of the assessee on 14.11.2018. As the assessee is involved in International Transactions and specific domestic transactions, a reference u/s. 92CA (1) of the Act was made to the TPO, Circle-1(1), Chennai. Based on the order u/s. 92CA (3) of the Act case of the assessee was assessed u/s. 143(3) r.w.s. 144C of the Act and following adjustments and disallowances were made to the return income as under:

4. The assessee being aggrieved with the above order preferred an appeal before the Ld. CIT (A), who in turn Partly Allowed the appeal of the assessee, hence, both the Revenue as well as the assessee is in appeal before us. For sake of convenience, we are taking the assessee’s appeal first for adjudication. We have gone through the order of the AO along with the order of the TPO, order of the Ld. CIT (A) and submissions of both the parties along with ground taken before us.

5. Ground nos. 1(a) and 1(b) are general in nature, hence no specific adjudication is required. Ground Nos. 2(a) to 2(e) pertains to adjustment on account of claim for idle capacity. On this issue the Coordinate Benches for the A.Y. 2014-15 and A.Y. 2015-16 discussed the fine points involved and restored the matter back to the file of the Transfer Pricing Officer (TPO) for reconsideration de-novo. As the facts of the year under consideration are similar to those of A.Y. 2014-15 and A.Y. 201516, following principle of consistency and judicial discipline, we are also respectfully following the decisions rendered by the Coordinate Benches in the earlier years, remit the issue to the file of the TPO for reconsideration based on the evidence and explanations of the assessee which confirms that this ground raised by the assessee, has in fact relevant even after almost four years of operations. The TPO is directed to examine the issue in the light of various factors like cost audit report, data of comparables in similar business, agreement between the assessee and its AE and Non-AE customers. The assessee is directed to come forward with a substantial explanation along with corroborative evidence to substantiate its claim, as a substantial time period has already been crossed and the claim of the assessee depends crucially on time factor. In view of the above, ground nos. 2(a) to 2(e) raised by the assessee are allowed for statistical purposes only.

6. Ground nos. 3(a) and 3(b) pertains to provisions no longer required, written back. This issue also discussed by the Coordinate Benches in their earlier orders in A.Y. 2007-08 and A.Y. 2015-16. It is brought to our notice that on this issue the claim of the assessee was rejected on a presumption that it pertains to reversal of provision relates to excise duty and the assessee also not able to produce any evidence in favour of its claim. It is observed the provision no longer required, written back pertains to excess provisions created in earlier years towards obligations arising from ICS maintenance and repair contracts and return of parts provisions, based on prudent estimates and accounting standards. The corresponding provisions were disallowed and offered to tax in the years of creation. Therefore, treating the write-back as non-operating would result in double adjustment, as the amounts have already suffered tax in earlier years. Though the provisions were disallowed in the year of creation, the same was considered as operating expense for Transfer pricing purposes.

7. We are in agreement with the contentions of the assessee that in the year of creation, the provisions under consideration were treated as operating expense, hence in the year of reversal also same treatment is to be given. We confirm the stand of the assessee in treating the same as operating expense and also hold that the same is not liable for tax as already disallowed in the earlier year and considered for tax purposes. Although the nature of the provision is yet to be ascertained with relevant evidence, so for limited purpose we set aside the matter back to the file of the AO and direct the AO to verify the evidences filed by the assessee to crystalise the amount and nature. The assessee is also directed to follow the direction of the Bench and come forward with relevant ledger reconciliation and evidence to crystalise the amount and nature. In view of the above observations and directions, ground nos. 3(a) & 3(b) are allowed after fulfilment of directions and consequently grounds are also allowed for statistical purposes only.

8. On ground nos. 4(a) & 4(b) as the facts are similar to what we have discussed, observed and directed in para 6 & 7 (supra), directions will apply mutatis mutandis here also. In view of this, ground nos. 4(a) & 4(b) are allowed for statistical purposes only.

9. On ground nos. 5(a) & 5(b) relating to business support service income, a coordinate bench in A.Y. 2015-16, in assessee’s own case treated the same as nonoperating income, consequently, the matching expenses are also to be excluded for the purposes of comparison. We have gone through the relevant orders on this issue and respectfully follow the order of the Coordinate Bench’s in A.Y. 2015-16. In view of the above, matter is set aside to the file of the TPO with direction to exclude the relevant expenses after giving a proper opportunity of being heard to the assessee and the assessee is directed to come forward with relevant details required by the TPO. In view of this, ground nos. 5(a) & 5(b) are allowed for statistical purposes only.

10. As the issue raised in ground nos. 6(a) & 6(b) is concerned, are similar to what we have discussed and adjudicated in para 9 (supra), our directions will apply mutatis mutandis here also. In view of this, ground nos. 6(a) & 6(b) are allowed for statistical purposes only.

11. Ground nos. 7(a) to 7(e) are nothing but the duplication of ground nos. 2(a) to 2(e), already discussed and decided (supra) vide para 5, hence the same need not be adjudicated again, hence our findings w.r.t. ground nos. 2(a) to 2(e) will apply mutatis mutandis for ground nos. 7(a) to 7(e) also. In view of this, ground nos. 7(a) to 7(e) are allowed for statistical purposes only.

12. As far as ground nos. 8(a) to 8(c), 9(a) to 9(b) and 10(a) to 10(e) are concerned, it is observed that the assessee has a common grievance in all the grounds that despite of availability of relevant information on record of the TPO, still were not considered appropriately, we found that the grounds raised by the assessee are relevant, hence the matter needs re-examination in the light of the grounds taken by the assessee, in view of the above, issues raised in ground nos. 8(a) to 8(c), 9(a) to 9(b) and 10(a) to 10(e) are restored back to the file of the TPO with direction to cope up with the grounds taken by the assessee after giving a proper opportunity of being heard and the assessee is directed to come forward with relevant evidence to substantiate its grounds, on which we are also relying. In view of this, ground nos. 8(a) to 8(c), 9(a) to 9(b) and 10(a) to 10(e) are allowed for statistical purposes only.

13. In the result, all the general grounds raised by the assessee are allowed for statistical purposes only. Now, we are taking up the additional grounds raised by the assessee in coming part of our order of even date.

14. Additional Ground No. 1 – Legal Ground (ROCA limitation issue): – Ground not pressed by the Appellant, hence the same is dismissed as not pressed.

15. Additional Ground No. 2, Custom Duty Adjustment. CIPL incurred substantial Customs duty on imports as compared to comparable companies selected in the notice that have largely indigenized the operations with majority of the raw materials procured locally. The appellant’s import-to-total-purchase ratio is 44%, whereas the comparables’ average is only 15.42%, demonstrating a significant difference in import intensity. In view of the above disparity, customs-duty adjustment ought to have been granted, as permitted in law and supported by judicial precedent. Further, the Coordinate Bench in appellant’s own for A.Y. 2014-15 Caterpillar India (P.) Ltd. v. Dy. CIT (Chennai – Trib.)/(IT(TP)A No. 42/Chny/2023, Para 12) and for A.Y. 2015-16 (IT(TP)A No. 12/Chny/2024, Para 14), which was issued after the CIT(A) order was issued, has directed following the principle laid down in Doowon Automotive Systems India (P.) Ltd. v. ACIT [IT(TP)A No. 7 (Chny) of 2018, dated 24-5-2022], where such an adjustment was accepted. Hence, it is prayed by the assessee that this additional ground be admitted and coordinate bench’s order for A.Y. 2014-15 and A.Y. 2015-16 be followed. The relevant extract from the Coordinate Bench’s direction for A.Y. 2014-15 (para 12) is as under –

“Since the primary issue is remitted to the file of the TPO, we also direct the TPO to examine the issue of necessity of granting custom duty adjustment in light of the principle laid down by the jurisdictional Tribunal in the case of Doowon Automotive Systems India Pvt Ltd [IT(TP)A. NO. 7/Chny/2018. “

16. In view of the above, we follow the decision of the Coordinate Bench in the case of the assessee for A.Y. 2014-15 and restore the matter back to the file of the TPO for reconsideration of the matter in the light of Doowon Automotive Systems India Pvt Ltd (supra). The additional ground no. 2 raised by the assessee is allowed for statistical purposes only.

17. Additional Ground No. 3 – Alternate ground on provision for obsolescence. AO disallowed the provision for obsolescence. While Coordinate Bench for A.Y. 2015-16 had disallowed the provision for obsolescence. The Ld. CIT (A) allowed the provisions for obsolescence as allowable expense. Coordinate Bench for A.Y. 201516 order has, however allowed the alternate ground for adjusting the opening stock and closing stock on the basis that the provision is disallowed (IT(TP)A No.: 12/Chny/2024 (Para 44-45)). Hence, the Company alternatively seeks a corresponding adjustment to the opening inventory for A.Y. 2016-17. In view of the above, matter is restored back to the file of AO for limited purpose only i.e. allow corresponding adjustments to the opening inventory after verification. The additional ground no. 3 raised by the assessee is allowed for statistical purposes only.

18. Additional Ground No. 4 – AE and Non-AE segmentation. The Assessee was asked to substantiate the basis for allocation of significant forex gain to the AE segment. Since no satisfactory explanation was provided, the TPO regarded the allocation to AE as ad hoc and self-serving. Accordingly, the TPO held that the AE and non-AE segmental results could not be relied upon for benchmarking. Further, for export transactions of ? 292.78 crore, the assessee did not clarify the role of the AEs, including whether they actually took delivery of goods, performed resale functions, or merely acted as invoicing entities. Therefore, the TPO rejected the segmental results for benchmarking purposes. The TPO’s rejection of the AE and non-AE segmental results is solely based on the allegation that the allocation of foreign exchange gain to the AE segment was not substantiated. However, this observation is factually incorrect since the Appellant has incurred a net foreign exchange loss during the year and not a gain (unrealized net exchange loss of Rs.

6.31 Crs (Rs. 27.30 Crs net exchange loss (-) Rs 33.61 Crs realized exchange loss). The foreign exchange loss has been allocated between the AE and non-AE segments in proportion to gross sales, which is a reasonable and consistent allocation key. Moreover, the TPO’s observation is devoid of factual and economic basis, since allocation of a higher foreign exchange loss to the AE segment would only reduce the margin of the AE segment. Therefore, it cannot be alleged that such allocation has artificially improved or distorted the AE segment results. The observation that the Appellant failed to clarify the functional profile of the AE and non-AE segments is also factually incorrect. The Appellant had already submitted a detailed functional analysis of the AE and non-AE segments before the authorities below. For perusal of the bench, the collated relevant screenshots/extracts from the paper book submission pertaining to each of the pages referred to herein have been compiled and enclosed as Annexure 5. Likewise, the manner of sales to AEs was specifically explained at Pg. 1221, PB Vol. III.

19. Accordingly, the observation that the role of AEs or the manner of sales has not been clarified is contrary to the material available on record. Without prejudice, relying on the Coordinate Bench’s order in the Appellant’s own case for A.Y. 2015-16. The relevant extract from the Coordinate Bench’s ruling in Appellant’s own case for A.Y. 2015-16 (para 24) on this ground is as follows-

“Since we have already remitted the main issue in relation to redetermination of margin of the Assessee in manufacturing segment, we feel that in the interest of justice and fair play that the allocation between the AE segment and the Non-AE segment could also be remitted back to the file of the TPO for re-examination. It is the bounden duty of the Assessee to clarify each and every point raised by the TPO as well as by the ld. CIT (A) and furnish necessary document to substantiate its stand in case, if the TPO is satisfied with the explanation provided by the assessee, the TPO may consider the Segmentation of AE and Non-AE and decide the issue in accordance with law. “

20. In view of the above, this additional ground raised by the assessee is allowed.

21. Ground 2, 2.1 – Foreign Exchange loss on account of restatement of ECB loan

22. As default rule, section 36(1) (iii) of the Act allows interest paid on capital borrowed as a revenue expenditure. The only limited exception to this is Proviso to section 36(1) (iii) of the Act. As per this, interest expense deduction is not granted till the capital asset is not ‘put to use’. After the capital asset is ‘put to use’, interest deduction is granted. This clearly suggests that deduction for interest paid for the period after the asset is put to use, even if the same pertains to capital asset. Likewise, foreign exchange loss in relation to fixed asset, incurred after the asset is put to use, is a revenue expenditure under section 37(1). As per Hon’ble Supreme Court judgment in the case of CIT, Delhi v. Woodward Governor India (P.) Ltd. [2009] 223 CTR 1/312 ITR 254  (SC), the foreign exchange loss suffered by an assessee is allowable as revenue expenditure under section 37(1) of the Act unless it is specifically prohibited by sections 30 to 36 of the Act –

“…Therefore, in the instant case, the ‘loss’ suffered by the assessee on account of the exchange difference as on the date of the balance sheet was an item of expenditure under section 37(1). [Para 15]”

23. Notwithstanding the above, section 43A of the Act is a non-obstante clause. The provisions of section 43A of the Act provides only for treatment of exchange rate differences in respect of the amounts payable or loan borrowed where the assessee acquires assets from a country outside India. The section is reproduced below –

“43A. Notwithstanding anything contained in any other provision of this Act, where an assessee has acquired any asset in any previous year from a country outside India for the purposes of his business or profession and, in consequence of a change in the rate of exchange during any previous year after the acquisition of such asset, there is an increase or reduction in the liability of the assessee as expressed in Indian currency (as compared to the liability existing at the time of acquisition of the asset) at the time of making payment.”

24. From the above section, while section 43A of the Act overrides section 36(1) (ii) of the Act, it is only to the extent of foreign exchange difference in respect of imported assets (assets acquired from a country outside India). However, in respect of the capital assets acquired domestically/indigenously out of the ECB proceeds, the provisions of section 43A of the Act are not applicable, as the exchange differences arise on translation/repayment of a foreign currency loan attributable to the acquisition of domestic capital assets. The Company submits that the rationale for availing ECBs was to reduce the incurrence of interest costs. Therefore, the resultant foreign exchange fluctuation loss arises from the borrowing transaction and not from the acquisition of the capital assets. Given the same, the consequent foreign exchange fluctuation loss assumes the character of revenue expenditure and shall be a deductible expenditure.

25. Further to the above, the Chennai Tribunal ruling in the case of Hyundai Motor India Ltd. v. Dy. CIT, LTU – II Chennai [2017]  187 TTJ 97 (Chennai – Trib.) (see page 220-222 of CIT (A) order) wherein it was held that foreign exchange losses recognized in accordance with AS-11 represent accrued and ascertained liabilities and are allowable as revenue expenditure, notwithstanding that the underlying borrowings were utilized for acquisition of capital assets. In the context of applicability of section 43A of the Act to only imported assets (and not domestic procured assets), the Chennai ITAT followed the Pune ITAT judgment in Cooper Corporation (P.) Ltd. v. Dy. CIT, Satara 180 TTJ 727/159 ITD 165 (Pune – Trib.) which held as follows –

“A bare reading of the aforesaid provision of Section 43A, which opens with a non-obstante and overriding clause, would show that it comes into play only when the assets are acquired from a country outside India and does not apply to acquisition of indigenous assets. (Para 10.4)”

26. Further, obtaining of loan and the subsequent utilization of the loan are independent transactions and ought to be evaluated separately. The exchange fluctuation arises due to variation in the foreign currency liability and not due to any change in the value or cost of the underlying fixed assets. In the absence of any specific provision mandating capitalization of such losses in respect of domestic assets, the tax treatment of the exchange fluctuation should be determined with reference to the borrowing transaction itself and not based on the end use of the funds. The Company submits that the impugned foreign exchange fluctuation loss is neither capital nor personal in nature and has been incurred wholly and exclusively for the purposes of its business. As the Act does not contain any specific provision requiring capitalization of such loss in relation to domestic assets, the same qualifies for deduction under the residuary provisions of section 37(1) of the Act.

27. The Company consistently followed the practice of recognizing foreign exchange gains and losses arising on restatement of ECBs through the profit and loss account. While exchange gains arising in earlier years have been offered to tax and accepted by the Revenue, a contrary treatment cannot be adopted for exchange losses arising from the same transactions. Accordingly, applying the settled principle of consistency, the foreign exchange fluctuation loss ought to be allowed as a deductible expenditure. Accordingly, the forex loss on restatement of ECB is to be allowed as revenue expenditure and not disallowed either under section 36 or 43A of the Act.

28. In this regard, in Appellant’s own case for AY 2014-15 (IT(TP)A No. 42/Chny/2023 – para 22), the Coordinate Bench restored the matter to the file of the Assessing Officer with a direction to verify whether the relevant assets were acquired domestically and had been put to use. The Coordinate Bench further directed the AO to adjudicate the issue in accordance with the ratio laid down by the jurisdictional Coordinate Bench in the case of Hyundai Motor India (supra). The relevant extract of the Coordinate Bench’s order is reproduced below:

“Respectfully following the same, we remit this issue to the file of the AO for fresh adjudication for bringing on record the facts such as the whether the assets were purchased in India and it has already been put to use and then decide this issue in light of the ratio laid down by jurisdictional Tribunal in the case of Hyundai Motor India Ltd v. DCIT . Hence, the corresponding ground is allowed for statistical purposes. “

29. Hence, Department’s ground on this issue is dismissed, as the issue in earlier year was set-aside for fresh adjudication and there is nothing on record, which negates the contentions of the assessee or any factual deviation.

30. Ground 3 – Disallowance of excess depreciation claimed on software The said issue has been adjudicated by the Coordinate Bench in the Company’s own case by dismissing Department ground in following years:

31. The relevant extract from the Coordinate Bench’s order for A.Y. 2015-16 is as under:

“46 Ground No.4. The AO has restricted that rate of depreciation on software as according to him it is in the nature of intangibles. The Id. CIT(A) allowed higher depreciation on software by following the jurisdictional High Court decision in the case of CIT v. Computer Age Management Services P. Ltd . This issue is squarely covered in favor of the Assessee by the decision of this Tribunal in ITA No.2749/Chny/2017 dated 11.06.2024.

“We find that this issue is covered in assessee’s favor by the decision of Hon’ble High Court of Madras in the case of Computer Age Management Services   wherein it has been held that where software license acquired by assessee was in nature of software application, the assessee would be eligible to claim depreciation at 60%. “

“47. Respectfully following the same we decide this issue against the revenue and in favour of the Assessee. This ground of appeal no.4 is dismissed.”

32. Hence, Department’s ground on this issue is dismissed, as the issue in earlier year was settled in favour of the assessee and there is nothing on record, which negates the contentions of the assessee or any factual deviation.

33. Ground 4, 4.1 and 4.2 – Disallowance of secondment payments to AEs.

34. The Assessee has deducted tax under section 192 of the Act on the salary payments accruing to the seconded employees. Given the above, the Company places reliance on the following rulings wherein it has been held that tax shall be withheld only under one section (i.e. in the instant case, under provisions of section 192 of the Act) and accordingly, tax shall not be withheld under section 195 of the Act on the reimbursements made. Consequently, no disallowance under section 40(a) (i) of the Act is warranted.

35. The Ld. DR submitted a note referring to the Delhi High Court judgment in the case of Centrica Offshore. This judgment has also been taken cognizance of by the Hon’ble Tribunal in assessee own case and the argument of the Ld. DR has been rejected. The relevant extract from the ITAT’s direction for A.Y. 2015-16 is as under:

“48 . Ground Nos.5, 5.1 & 5.2 The AO disallowed the reimbursement as according to him it is in the nature of “fees for technical services”. The ld. CIT (A) allowed the same basis the fact that tax has already been deducted TDS u/s.192 of the Act and also by following the Tribunal decision in Assessee’s own case for AY 2008-09. The Ld. DR vehemently argued that employees are that of the overseas entity and as such deduction of tax at source u/s. 192 has no relevance. In this regard, the Ld. DR relied on Delhi High Court decision in the case of Centrica India Offshore Ltd 374 ITR 336 and SLP dismissed by the Hon’ble Supreme Court.

49. We have heard the rival contentions and perused the material on record. All the aspects pointed by the Ld. DR have already been considered by this Tribunal in Assessee’s own case and we find this issue is squarely covered in favor of the Assessee by the decision of this Tribunal in ITA.No. 2749/Chny/2017 dated 11.06.2024.

“Upon perusal of agreement, it emerges that the assessee has availed services of employees of its group entities. The same was to facilitate business operations of the assessee. These seconded employees have worked under the control and supervision of the assessee which is evident from the fact that the assessee, as an employer, has deducted due TDS u/s.192. Therefore, these payments have already suffered TDS. The assessee has merely reimbursed actual salary to its AE. The same were merely in the nature of reimbursements only and do not include any element of income. The risk and reward of the work performed by the deputed employees was with assessee. Therefore, Ld. DRP, in our opinion, is not correct to treat the same as Fees for Technical Services which would require separate TDS. Accordingly, impugned disallowance as made u/s 40(a) (i) stand deleted. “

50. Respectfully following the same, we decide this issue against the revenue and in favor of the Assessee. This ground of appeal Nos.5, 5.1 & 5.2 are dismissed.”

36. Hence, Department’s ground on this issue is dismissed, as the issue in earlier year was settled in favour of the assessee and there is nothing on record, which negates the contentions of the assessee or any factual deviation.

37. In the result of the above, in nutshell, all the grounds raised by the assessee are allowed for statistical purposes only, whereas the grounds raised by the Revenue are dismissed.