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Income Tax Appellate Tribunal, MUMBAI BENCH “K” MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI N.K. PRADHAN
ORDER
PER N.K. PRADHAN, AM
The captioned appeals filed by the assessee are directed against the order of the against the order of the Commissioner of Income Tax (Appeals)-15, Mumbai [in short CIT(A)] and arise out of the order passed by the Deputy Commissioner of Income Tax 3(1), Mumbai (hereinafter the ‘AO’) u/s 143(3) r.w.s. 144C(3) of the Income Tax Act 1961, (the ‘Act’).
M/s ANZ Capital Pvt. Ltd. 4664/Mum/2015 Since some of the issues raised in these appeals are common, we are, therefore, disposing them by this consolidated order for the sake of convenience. Assessment Year: 2009-10 2. The 1st ground of appeal
On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the Deputy Commissioner of Income Tax, Circle - 3(1), Mumbai ('AO')/ Deputy Commissioner of Income Tax, Transfer Pricing - I(6), Mumbai (TPO’) in disallowing the entire expenditure of Rs.1,56,12,766 incurred by Appellant, in relation to allocation of regional office expenses and determining the arm's length price of the international transaction at NIL .The Appellant prays that the book value that the said transaction be held to be the arm's length and that the aforesaid adjustment be deleted. 2.1 Briefly stated, the facts are that the assessee operates as a non- banking financial advisory company which facilitates access to specified financial services for its customers in India. Also, it is engaged in the business of rendering marketing support services to its overseas associated enterprises (‘AE’) in connection with trade finance and loan provided by AE to its customers in India. It filed its return of income for the assessment year (AY) 2009-10 on 30.09.2009 declaring total income of Rs.17,84,52,414/-. In the transfer pricing study report (‘TP Report’), the assessee determined the arm’s length price (ALP) of its international transaction by selecting Transaction Net Margin Method (TNMM) as the most appropriate method, and Operating Profit/Total Cost (‘OP/TC’) as the Profit Level Indicator (‘PLI’). A reference u/s 92CA(1) of the Act was M/s ANZ Capital Pvt. Ltd. 4664/Mum/2015 made by the Assessing Officer (AO) to the Transfer Pricing Officer (TPO) for determination of arm’s length price (ALP). The TPO issued a notice u/s 92CA(2) to the assessee for furnishing necessary evidence in support of the ALP. It is noted by the TPO that in the impugned assessment year the assessee has entered into the following international transactions : S.N. Nature of Transactions Value (in Rs.) Method adopted by the assessee
1. Rendering of origination & 16,49,55,356 TNMM related support services (marketing services)
2. Rendering of origination & 3,38,56,781 TNMM related support and advisory services
3. Allocation of regional office 1,56,12,766 TNMM expenses Total 21,44,24,903 In response to a query raised by the TPO to submit the details, the assessee filed a written submission which is reproduced below: “It is submitted that during the year ended 31 March 2009, ANZ India was allocated total regional office expenses of Rs.15,612,766/-. Out of this, ANZ India paid an amount Rs.548,506/-. Please find enclosed as Annexure 3, Invoices relating to the regional office expenses. Since ANZ India was operating under the ‘cost plus’ remuneration model, the entire costs of Rs.15,612,766/- was charged by ANZ India to ANZ Singapore, along with a mark-up. It was realized in the subsequent year that the balance amount of Rs.15,028,260/- was no longer payable by ANZ India. Hence, the company has reversed an amount of Rs.15,028,260/-, during the subsequent year, i.e. 2010-11. Please find enclosed as Annexure 4, Form 3CEB for AY 10-11 disclosing the transaction for reversal of these expenses.
M/s ANZ Capital Pvt. Ltd. 4664/Mum/2015 Thus, amount of Rs.15,028,260/-written back in the profit and loss account was subsequently offered to tax in the next year i.e., AY 10-11. Please find enclosed the ROIs for AY 09-10 and AY 10-11, as Annexure 5.” The TPO, after considering the above submission of the assessee observed that they have submitted the inter-company invoices dated 26.09.2008 of Australian dollar 17,400 (being STP charges from April 2008 to September 2008) and of Australian dollar 113.80 dated 26.09.2008 (being staff employees assistance programme and this comes to around Rs.7.18 lakhs only). The TPO noted that no other document or any other inter-company invoices were produced during the transfer pricing proceedings by the assessee. Also the assessee has not produced any justification whatsoever for raising of this invoice by the AE during the year under consideration. As per the TPO, it is an admitted fact by the assessee that Rs.15,612,766/- was not payable to the AE for any corresponding services or benefit. Therefore, the TPO observed that the ALP of the transaction is to be determined. By observing that no corresponding services have been rendered by the AE for which the assessee has debited the profit and loss account (P&L account) for Rs.15,612,766/-, the TPO determined the ALP as ‘Nil’. Accordingly, the TPO required the AO to make an adjustment of the above amount to the total income of the assessee. The AO passed his order in line with the ALP so determined by the TPO. 2.2 In appeal, the Ld. CIT(A) held that : “The appellant has not submitted any report of the country of the AE in respect of the cost of such services and as such even the allocation is not authenticated in terms of their actual cost in the open market, leave aside the M/s ANZ Capital Pvt. Ltd. 4664/Mum/2015 quantification of the services received by the appellant. The appellant not submitted any letters and other correspondence documenting any terms negotiated between the assessee and the associated enterprise. Further the appellant has not submitted the documents normally issued in connection with various transactions under the accounting practices followed. There is no evidences submitted demonstrating the receipt of services, their quantification, their actual costs etc. Further the appellant in its entire submission has not been able to point with any evidences regarding the any cost savings in its operations owing to receipt of so called services from the AE. As such there has been no factual demonstration based on any evidence regarding the benefit test in respect of receipt of so called services. iii. In the absence of such documents, and further that the appellant has not been able to give any-details of either the quantum of services, their actual costs incurred by the AE, their costs in the open market and further in view of the facts of the case and discussion here in above, the contentions of the appellant are not found to be acceptable. Under such facts and circumstances of the case the conclusion reached by the TPO is found be justifiable and hence the adjustment made by the TPO/AO is upheld.” 2.3 Before us, the Ld. counsel for the assessee submits that during the year ended 31.03.2009, the assessee was allocated total regional office expenses of Rs.15,612,766/- by ANZ Singapore. Out of this, the assessee paid an amount of Rs.5,84,506/-. Since, ANZ India was operating under the ‘cost plus’ remuneration model, the entire costs of Rs.15,612,766/- was charged by the assessee to ANZ Singapore, along with a mark-up. It is submitted that it was realized in subsequent year that the balance amount of Rs.15,028,260/- was no longer payable by the assessee. Hence, the assessee reversed an amount of Rs.15,028,260/- during the subsequent year i.e. AY 2010-11. In this regard the Ld. counsel refers to M/s ANZ Capital Pvt. Ltd. 4664/Mum/2015 Form 3CEB for AY 2010-11, disclosing the transaction for reversal of these expenses. The Ld. counsel submits that the above was given effect in the assessee’s books of accounts and tax returns. It is stated by him that as the assessee-company has debited such regional expenses to its P&L account, the same formed part of the ‘cost base’ which was charged to the AE along with a mark-up and the same was offered to tax in AY 2009-10. In this regard, reference was made to the return of income for the AY 2009-10. Thus it is stated by him that for AY 2009-10, it can be seen that the assessee-company claimed a deduction for the regional office expenses and at the same time correspondingly offered to tax the amount recovered from its AE towards such regional expense offices plus the mark-up. Therefore, it is stated that the above addition made by the AO be deleted. 2.4 On the other hand, the Ld. DR submits that as the assessee had not filed documents normally issued in connection with various transactions under the accounting practices followed and also as it failed to submit evidence demonstrating the receipt of services, their quantification, their actual costs etc., the Ld. CIT(A) has rightly confirmed the adjustment made by the TPO/AO. 2.5 We have heard the rival submissions and perused the relevant materials on record. We observe that the assessee vide reply dated 19.09.2013 filed before the TPO ledger extracts of the expenses payable for the AY 2009-10 & AY2010-11, in which the amount of regional office expenses were accounted for.
M/s ANZ Capital Pvt. Ltd. 4664/Mum/2015 Admittedly, during the year ended 31.03.2009, the assessee was allocated total regional office expenses of Rs.15,612,766/- by ANZ Singapore. Out of this, the assessee paid an amount of Rs.5,84,506/-. Further, we find that since the assessee was operating under the ‘cost plus’ remuneration model, the entire costs of Rs.15,612,766/- was charged by the assessee to ANZ Singapore, along with the mark-up. The assessee realized it in the subsequent year that the balance amount of 15,028,260/- was no long payable by it. Therefore, the assessee reversed an amount of Rs.15,028,260/- during the subsequent year i.e. AY 2010-11. A perusal of Form 3CEB for AY 2010-11 clearly indicates disclosure of the transaction for reversal of these expenses. Further, it is found that as the assessee had debited such regional office expenses to its P&L account, the same formed part of the ‘cost base’ which was charged to the AE along with a mark-up and the same was offered to tax in AY 2009-10. Thus in the impugned assessment year the assessee- company claimed a deduction for the regional office expenses and at the same time correspondingly offered to tax the amount recovered from AE towards such regional office expenses plus the mark-up. In view of the factual scenario, we direct the AO to delete the disallowance of Rs.15,612,766/- made towards transfer pricing adjustment. Thus the 1st ground of appeal is allowed.
3. The 2nd ground of appeal On the facts and circumstances of the case and in law, the AO and the Ld. CIT(A) erred in disallowing on an ad-hoc basis 25% of foreign travel M/s ANZ Capital Pvt. Ltd. 4664/Mum/2015 expenses amount to Rs.431,124/- incurred by Appellant. The Appellant prays that the entire expenditure relating thereto, be allowed as a deduction. 3.1 During the course of assessment proceedings, in respect of the claim of expenses of Rs.17,24,495/- on account of foreign travel, accommodation and meals etc., the AO asked the assessee to furnish details regarding name of the persons making foreign trip, countries visited, duration of the trip, purpose of visit of each such person. Also the assessee was asked to provide the details of other persons, such as family members, who accompanied the person in whose respect the expenses of foreign trip have been debited. In response to it, as recorded by the AO, the assessee furnished part details of foreign travel but details related to the duration of the visit were not submitted. Further, the assessee did not mention whether any family member accompanied the person or not on the trip. As recorded by the AO, the assessee did not provide any detail about the work performed during such trips, which would have substantiated that the expenditure was incurred wholly and exclusively for the purpose of business. Therefore, observing that part of the expenses were incurred for non-business purposes, the AO made ad disallowance of 25% of Rs.17,24,495/- and it comes to Rs.4,31,124/-.
3.2 In appeal, the Ld. CIT(A) held that : “i. The appellant contended that it had submitted the details of foreign travel expenses to the AO. However, as mentioned in assessment order that in its letter dated 22/2/2013 only part details were submitted. Details of foreign travel called for by AO such as the duration of visit, -whether family member accompanied the person or not on the trip made, details of work M/s ANZ Capital Pvt. Ltd. 4664/Mum/2015 performed during such trip to substantiate that expenditure was incurred wholly and exclusively for the purpose of business, were not given. ii. These details were not been furnished even during the course of appellate proceedings and hence there is no change in the facts. Accordingly, I have no reason to deviate from the findings of the AO. Reliance in this regard is placed on the recent judgment of Hon'ble Bombay High Court in the case of Umakant B. Agrawal [2014] 46 taxmann.com 338. Further, in the case of Raj Kumar Wadhwa v. CIT [2014] 42 taxmann.com 177, it was held by Hon'ble Punjab and Haryana High Court that where assessee failed to bring on record exact nature of services rendered with quantitative details of services provided date-wise, and party-wise details of supply etc., claim had rightly been disallowed. Consequently, the disallowance made by the AO is upheld.”
3.3 Before us, the Ld. counsel submits that the assessee vide submission dated 22.02.2013 filed the following details with respect to foreign travel expenses incurred by it : i. Name of the employee, ii. Date of foreign travel iii. Place of travel iv. Purpose of travel However, the Ld. counsel submits that the AO disregarded the above documents submitted and held that 25% (on ad-hoc basis) of the foreign travel expenses were for non-business purpose, thus making an adjustment of Rs.4,31,124/-.
M/s ANZ Capital Pvt. Ltd. 4664/Mum/2015 3.4 On the other hand, the Ld. DR submits that as observed by the CIT(A) the assessee could not file before the AO the details such as the duration of visit, whether family member accompanied the person or not on the trip made, details of work performed during such trip to substantiate that the expenditure was incurred wholly and exclusively for the purpose of business. It is stated by him that the assessee failed to furnish the above details before the CIT(A) during the course of appellate proceedings. Therefore, the Ld. DR submits that the disallowance of Rs.4,31,124/- confirmed by the CIT(A) be upheld. 3.5 We have heard the rival submissions and perused the relevant materials on record. It is found that in response to the query raised by the AO, the assessee vide submission dated 22.02.2013 had filed the details with respect to foreign travel expenses incurred by it, which has been extracted at para 4.3 hereinabove. After receipt of the above details, the AO could have made inquiry and verified the contentions of the assessee. He has not done so. Without finding any fault in the details submitted by the assessee, the AO has resorted to an ad-hoc disallowance @ 25% of the foreign travel expenses. As the disallowance made by the AO is not based on any inquiry or evidence, we delete the addition of Rs.4,31,124/- and allow the 2nd ground of appeal
4. The 3rd ground of appeal On the facts and circumstances of the case, the AO erred by not considering the direction of the Ld. CIT(A) to decide on the pending rectification application filed by the Appellant under Section 154 of the Act. In the assessment order passed for assessment year 2005-06, expenditure of M/s ANZ Capital Pvt. Ltd. 4664/Mum/2015 Rs.57,74251 on severance payments allowed by the AO in five equal instalments u/s 35DDA of the Act. The rectification application was filed by the Appellant (dated 4 May 2013) claiming deduction for Rs.11,54,850 the year under appeal, being 1/5thof total expenditure of 57,74,251 on severance payments.The Appellant prays that the expenditure of Rs.11,54,850 be allowed as a deduction. 4.1 The Ld. CIT(A) vide order dated 24.07.2014 has observed that there is no discussion on the above issue in the assessment order passed by the AO, whereas it is the submission of the assessee that it has filed rectification application dated 04.05.2013 before the AO on which no action has been taken so far. Considering the above matter, the Ld. CIT(A) directed the AO to dispose off the petition of the assessee expeditiously pending before him.
As crystal clear from the above, there is a specific direction from the Ld. CIT(A) to the AO to dispose off the rectification application expeditiously pending before him. Therefore, the 3rd ground of appeal is allowed for statistical purposes.
In the result, the appeal is partly allowed. Assessment Year: 2010-11 6. The 1st ground of appeal On the facts and in the circumstanceof the case and in law, the Ld. CIT(A) erred in confirming the action of the Deputy Commissioner of Income Tax, Circle - 3(1), Mumbai ('AO')/ Assistant Commissioner of Income Tax, Transfer Pricing - I(7), Mumbai (‘TPO') in not allowing the reduction of reversal / M/s ANZ Capital Pvt. Ltd. 4664/Mum/2015 write back of the regional office expenses from the cost base while computing the Appellant's operating margin in respect of provision of services of marketing of financial products to its Associated Enterprise. The Appellant prays that appropriate deduction should be allowed from the cost base in respect of reversal / write back of the regional office expenses and the resulting operating margin i.e. 15.75% as computed by the Appellant should be restored instead of 8.5% as computed by the AO / TPO. 6.1 The assessee-company filed its return of income for AY 2010-11 on 30.10.2010 declaring taxable at Rs.12,48,50,353/-. As mentioned earlier the assessee had provided during the AY 2009-10 for Rs.15,612,766/- towards regional office expenses. However, it realized during the AY 2010-11 that out of this, amount of Rs.15,028,260/- was no longer payable by the assessee and hence the same was reversed by crediting it in the P&L account during the financial year 2009-10 relevant to the assessment year 2010-11. The same was reflected in the assessee’s P&L account under the head ‘other income-provision written back’. This is evident from the income tax return for AY 2010-11. Thus, the regional expenditure of Rs.15,028,260/- which was included in the ‘cost base’ and recovered by the assessee along with a mark-up from its AE for AY 2009-10, was reduced by it from its ‘cost base’ to arrive at the ‘cost plus mark-up’ recoverable from AE for AY 2010-11. The TPO did not consider the reversal of regional office expenses amounting to Rs.15,028,260/- while computing the OP/TC margin workings of the assessee for AY 2010-11. This resulted in revising the assessee’s OP/TC margins from 15.75% to 8.50%.
M/s ANZ Capital Pvt. Ltd. 4664/Mum/2015 The Ld. counsel submits that the TPO’s stand resulted in assessee being incorrectly taxed for the same amount in AY 2009-10 as well as AY 2010-11 i.e. (i) not deducting Rs.15,028,260/- from the cost base of AY 2010-11 would mean that this amount plus mark-up would be taxed again, this amount had already been taxed in AY 2009-10 and (ii) further, the assessee has voluntarily reversed the deduction (Rs.15,028,260/-) it had claimed in the previous year and offered the same to tax during AY 2010-11. Reliance is placed by him on the order of the Tribunal in Logica Pvt. Ltd. v. ACIT (ITA No. 1129/Bang/2011 for AY 2007-08). The Ld. DR reiterates the submission made in this regard for AY 2009-10 and supports the order passed by the Ld. CIT(A). 6.2 We have heard the rival submissions and perused the relevant materials on record. We observe that the assessee vide reply dated 19.09.2013 filed before the TPO ledger extracts of the expenses payable for the AY 2009-10 & AY2010-11, in which the amount of regional office expenses were accounted for. A similar issue arose before the ITAT ‘A’ Bench, Bangalore in the case of Logica Pvt. Ltd. v. ACIT (ITA No. 1129/Bang/2011 for AY 2007- 08). The Tribunal vide order dated 28.02.2013 held : “The relevant extract of the order has been produced below: 8. The ld. counsel for the assessee brought to our notice that a sum of Rs.4,27,16,385 was reversal of expenses and these had to be reduced from the operating and other expenses. In this regard, the ld .counsel for the M/s ANZ Capital Pvt. Ltd. 4664/Mum/2015 assessee pointed out that while making the adjustment to the ALP, the AO took the operating cost at Rs.219,19,46,556 and further added a sum of Rs.4,27,16,385 which was reversal of expenses received. He therefore arrived at an operating cost of Rs.223,46,62,941. It was pointed out by him that the correct operating profit to total cost of the assessee should have been worked out in the following manner:-
Services Rs.234,26,60,885/- Less : Operating and other Rs.219,19,46,556/- expenses including depreciation Less : Liability no longer Rs.4,27,16,385/- Rs.214,92,30,171/- required written back Operating profit Rs.19,34,30,714/- Operating profit/Total cost 9%
In this regard, the ld. counsel pointed out that while computing the arm’s length price, the TPO added the provision amount of Rs.4,27,16,385/- to the operating cost of Rs.219,19,46,556/-. Also while computing the transfer pricing adjustment, the TPO added the amount of provision to the operating revenue of Rs.234,26,60,885/- ( Page 493 of the paper book). The Tribunal in the case of Sony India Private Ltd. reported in (2009) 315 ITR (80) 150 (Del.) (Paras 146 to 149) held that provisions written back should not be excluded from the P & L account when computing the operating profit. The learned counsel for the assessee Page 10 of 49 therefore submitted that its net margin should be taken as 9% and not 6.88% as computed by the TPO. Similarly, the additions made by the TPO to the M/s ANZ Capital Pvt. Ltd. 4664/Mum/2015 operating cost while computing the arm’s length price and to the operating revenue when computing the adjustment is erroneous. Therefore in computing the arm’s length price as well as any adjustment, the assessee’s operating revenue would still be Rs.234,26,60,885/- and operating cost would be Rs.214,92,30,171/-.
To the above submissions, the ld. DR could not make any counter submissions. 11. We are of the view that the submissions made by the ld. counsel for the assessee have to be accepted and the operating profit to the total cost of the assessee should be adopted at 9% on the basis of the assessee’s operating revenue and operating cost as given in the above chart.” The finding of the Tribunal in the case of Logica Pvt. Ltd. (supra) is applicable in the present case. Moreover, as reflected in the P&L account of the assessee for the impugned assessment year under the head ‘other income-provision written back’, it has reversed the deduction it had claimed in the earlier year and offered the same to tax during the AY 2010-11. Therefore, the reversal of regional office expenses amounting to Rs.15,028,260/- while computing the OP/TC margins of the company for AY 2010-11 would be 15.75%, thus the said international transaction would meet arm’s length criteria. Thus the 1st ground of appeal is allowed.
In the additional grounds of appeal filed for the AY 2010-11, the Ld. counsel submits that Companies like (i) Asian Business & Exhibition and Conferences Ltd., (ii) Empire Industries Ltd. and Priya International Ltd. be excluded from the set of comparables considered for comparability analysis as done by the AO. During the course of hearing it M/s ANZ Capital Pvt. Ltd. 4664/Mum/2015 is argued by the Ld. counsel that if the reversal of regional office expenses amounting to Rs.15,028,260/- is considered, while computing the OP/TC margin workings for AY 2010-11, then there is no necessity of adjudicating the above additional grounds of appeal as the OP/TC margins of the assessee-company would be 15.75% and the said international transaction would meet arm’s length criteria. As we have allowed the 1st ground of appeal which relates to the reduction of reversal/written back of the regional office expenses from the cost base, the additional grounds of appeal becomes academic in nature.
7. The 2nd ground of appeal On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the AO in disallowing expenses on foreign travel including the accommodation and meals expenses on an ad-hoc basis amounting to Rs.13,60,895.The Appellant prays that the entire expenditure relating to foreign travel including the accommodation and meals expenses be allowed as a deduction. 7.1 During the AY 2010-11, the assessee has claimed expenses amounting to Rs.54,43,579/- on account of foreign travel, accommodation and meals, air fare other miscellaneous expenses etc. On the same reasons on the basis of which disallowance was made for AY 2009-10, the AO made a disallowance of Rs.13,60,895/- (25% of Rs.54,43,579/-) in AY 2010-11. It is found that similar details as for AY 2009-10 were filed by the assessee before the AO for AY 2010-11. Facts being identical, we follow our decision for AY 2009-10 mentioned at para 3.5 hereinabove and M/s ANZ Capital Pvt. Ltd. 4664/Mum/2015 delete the ad-hoc disallowance of Rs.13,60,895/- made by the AO and allow the 2nd ground of appeal
8. The 3rd ground of appeal On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the AO of erroneously disallowing an amount of Rs.4,71,375 by considering the same as depreciation on leased motor cars without taking cognizance of the fact that the depreciation claimed by the Appellant in its return of income is in respect of vehicles owned by the Appellant. 8.1 During the course of the assessment proceedings, the assessee had submitted before the AO that in accordance with the prescribed accounting standard, the lease assets were capitalized in the books of accounts; the lease rental payment was split into finance charges and principal charges, with the finance charges being charged to the P&L account. Further, it was submitted that the assessee had not claimed depreciation u/s 32 of the Act on cars taken on finance lease due to lack of ownership. However, the AO was not convinced with the above explanation of the assessee and from the total deduction of Rs.11,46,925/- claimed by the assessee towards car lease rentals disallowed an amount of Rs.758,609/- towards the principal repayments of such rentals (this is reflected as addition of total lease rental of Rs.11,46,925/- less interest portion of Rs.3,88,316/-); disallowed the depreciation on motor cars amounting to Rs.4,71,375/-. Thus the AO made an adjustment of Rs.12,30,994/-.
M/s ANZ Capital Pvt. Ltd. 4664/Mum/2015 In appeal, the Ld. CIT(A) confirmed the above adjustment made by the AO. 8.2 Before us, the Ld. counsel of the assessee submits that the appellant had not claimed any depreciation on leased cars in the return of income and this is evident from the notes appearing in depreciation schedule provided as part of the tax audit report in Form 3CD. Further, it is stated that in the appellate order for the earlier assessment year 2007-08, the AO was directed to allow depreciation on leased cars. On the other hand, the Ld. DR supports the order passed by the Ld. CIT(A). 8.3 We have heard the rival submissions and perused the relevant materials on record. We find that in the instant case the assessee has split the lease rental payment into finance charges and principal charges, with the finance charges being charged to the P&L account. The assessee has not claimed depreciation u/s 32 of the Act on cars taken on finance lease due to lack of ownership. This is evident from the depreciation schedule which is a part of the tax audit report in Form No. 3CD. In view of the above facts, we direct the AO to delete the disallowance of Rs. 4,71,375/- made by him towards depreciation on leased motor cars. Accordingly, the 3rd ground of appeal is allowed.
9. To sum up, the appeal for the AY 2009-10 is partly allowed; the appeal for AY 2010-11 is allowed.