IN HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDITION INCOME TAX APPEAL NO.1746 OF 2014 Commissioner of Income Tax 8 ... Appellant V/s. M/s.Aventis Pharma Limited ... Respondent ..... Mr.Arvind Pinto, Advocate for Appellant. Mr.Sanjiv M. Shah, Advocate for Respondent. .... CORAM : S.V.GANGAPURWALA & A.M.BADAR JJ. DATED : 12th July 2017. P.C. 1 present appeal pertains to Assessment year 2000 01. Revenue has filed appeal raising following grounds : a) Whether in facts and circumstances of case, ITAT is justified in deleting dis allowance made u/s.14A of Act without appreciating fact that Assessee company has not proved that entire interest bearing funds were wholly and exclusively for its business purpose and only non interest bearing funds Gaikwad RD 1/5 ::: Uploaded on - 13/07/2017 ::: Downloaded on - 14/07/2017 09:40:36 ::: (46)ITXANo.17462014 were utilized for impugned investment ? b) Whether in facts and circumstances of case, ITAT is justified in deleting dis allowance made u/s.14A of Act without appreciating decision of Hon'ble ITAT Delhi B Special Bench in case of Cheminvest Limited vs. ITO (2009) 124 TTJ (del) (SB) 577 and decision of Hon'ble Jurisdictional High Court in case of Godrej & Boyce Mfg. Co. Limited. vs. DCIT, Range 10(2), Mumbai (2012) 194 Taxman 2003 ? c) Whether in facts and circumstances of case, ITAT is justified in deleting dis allowance on account of VRS expenses holding that same are incurred for business by incorrectly observing that manufacturing unit of Assessee at Mulund, Mumbai is still working when Assessee itself had admitted that it has stopped manufacturing unit at Mulund as mentioned para 11 of CIT(A)'s order ? d) Whether in facts and circumstances of case, ITAT is justified in holding that VRS expenses are incurred by Assessee for purpose of carrying on business when only purpose for these expenses is to close manufacturing unit to facilitate sale of land Gaikwad RD 2/5 ::: Uploaded on - 13/07/2017 ::: Downloaded on - 14/07/2017 09:40:36 ::: (46)ITXANo.17462014 of this unit and not for any business purpose ? e) Whether in facts and circumstances of case, ITAT has erred in holding that Assessee is entitled to expenditure incurred on VRS by relying on order of Supreme Court in case of K.Ravindranathan Nair (supra) and on decision of Bombay High Court in case of M/s.Foseco India Limited (supra) when facts of these cases are not identical to facts of present case ? f) Whether in facts and circumstances of case, ITAT has erred in holding that VRS expenses are incurred for purpose of business ignoring decisions of Supreme Court in case of CIT vs. Gemini and on decision of Madras High Court in case of Coimbatore Premier Corporation Pvt. Ltd. 244 ITR 753 ? 2 Mr.Pinto, learned counsel submits that Tribunal was not justified in deleting dis allowance made under Section 14A of Act without appreciating fact that Assessee Company has not proved that entire interest was wholly and exclusively for its business purpose and only non interest bearing funds were utilized for investment. Judgment relied by Tribunal in this regard is erroneous. learned Counsel further submitted that as far as VRS expenses is Gaikwad RD 3/5 ::: Uploaded on - 13/07/2017 ::: Downloaded on - 14/07/2017 09:40:36 ::: (46)ITXANo.17462014 concerned, Tribunal was not justified in deleting dis allowance on account of VRS expenses. It has incorrectly observed that manufacturing unit of Assessee at Mulund, Mumbai is functioning, when Assessee itself had admitted that it has stopped manufacturing unit at Mulund. 3 Mr.Shah, learned counsel for Respondent supports order and submits that as far as question with regard to dis allowance under Section 14A of Act is concerned, in previous Assessment Order, similar issue had arisen and same is decided in favour of Assessee. learned counsel further submits that expenses towards VRS are rightly allowed inasmuch as factories at Ankeleshwar and other places were still functioning and operating. learned counsel placed reliance on Judgment of Apex Court in case of Commissioner of Income Tax v. Foseco India Ltd. reported in [2013] 352 ITR 320 (Bom)., so also Judgment of Apex Court in case of K.Ravindranathan Nair v. Commissioner of Income Tax, reported in ITR Volume 247 page.178. 4 We have perused Order passed by Tribunal, so also have considered submissions canvassed by learned counsel for respective parties. 5 As far as dis allowance under Section14A of Act is Gaikwad RD 4/5 ::: Uploaded on - 13/07/2017 ::: Downloaded on - 14/07/2017 09:40:36 ::: (46)ITXANo.17462014 concerned, question does not subsist as in Assessee's own case for previous assessment year, said aspect has been considered in favour of Assessee and said order has become final. As far as expenses of VRS scheme is concerned, it has been held on fact by Tribunal that business of Assessee has not closed down and same is continuing. This Court in case of Commissioner of Income Tax v. Foseco India Ltd. (referred to supra) has observed that expenditure incurred relating to VRS scheme is available as revenue expenses. 6 In light of above, Appeal is bereft of any substantial question of law. 7 As such, Appeal is dismissed. 8 No costs. ( A.M.BADAR J.) ( S.V.GANGAPURWALA J.) Gaikwad RD 5/5 ::: Uploaded on - 13/07/2017 ::: Downloaded on - 14/07/2017 09:40:36 ::: TheCommissionerofIncome-tax-8 v. AventisPharmaLimited