Appeal partly allowed for statistical purposes. Specific grounds restored, others rejected or not adjudicated.

The appeal was partly allowed for statistical purposes. Ground no-1 was restored to the AO, grounds no-2 and 3 were rejected, and ground no-4 was allowed. Ground no-7 was consequential, and grounds no-8 and 9 were general and did not require adjudication.

---

---

Issues Involved:
1. Disallowance of Rs. 2,98,99,503/- on an ad hoc basis.
2. Disallowance of Rs. 29,30,504/- out of legal and professional expenses.
3. Disallowance of Rs. 7,60,621/- out of traveling expenses.
4. Disallowance of Rs. 6,02,000/- relating to accrued loss on account of foreign fluctuations.

Issue-wise Detailed Analysis:

1. Disallowance of Rs. 2,98,99,503/- on an ad hoc basis:
The assessee contended that the disallowance should be reconsidered in light of the Jurisdictional High Court's judgment in the case of Maxop Investments, ensuring no double disallowance. The CIT DR agreed, and the matter was restored to the AO for reconsideration. The AO had noted that the assessee's principal business was to establish Gillette's business in India through investments. The AO questioned the nature of the business and the income derived, concluding that the expenses should be disallowed as they were not incurred for earning business income. The CIT(A) upheld this view but directed the AO to avoid double disallowance. The Tribunal restored the issue to the AO, directing compliance with the High Court's guidelines and ensuring no double disallowance.

2. Disallowance of Rs. 29,30,504/- out of legal and professional expenses:
The assessee claimed legal and professional expenses related to exiting a joint venture due to the sale of Gillette USA's Parker Pen Division. The AO disallowed these expenses, arguing they were incurred for Gillette USA's benefit. The CIT(A) upheld this, noting the expenses were not for the assessee's business purposes. The Tribunal agreed, emphasizing the expenses were for Gillette USA's global interests. The Tribunal upheld the disallowance but reiterated the CIT(A)'s direction to ensure no double disallowance.

3. Disallowance of Rs. 7,60,621/- out of traveling expenses:
The traveling expenses were also linked to the legal and professional expenses for exiting the joint venture. The AO and CIT(A) disallowed these expenses for the same reasons as the legal expenses. The Tribunal upheld the disallowance, reiterating the expenses were for Gillette USA's benefit and not the assessee's business. The Tribunal maintained the CIT(A)'s direction to avoid double disallowance.

4. Disallowance of Rs. 6,02,000/- relating to accrued loss on account of foreign fluctuations:
The assessee claimed a loss due to foreign exchange fluctuations, which included a restatement of liability. The AO disallowed this, considering it a notional loss. The CIT(A) upheld the disallowance. The assessee argued that the issue was covered in its favor by previous Tribunal orders and the Supreme Court's judgment in Woodward Governor. The Tribunal agreed, citing the previous orders and the Supreme Court judgment, and allowed the assessee's claim.

Conclusion:
The appeal was partly allowed for statistical purposes. Ground no-1 was restored to the AO, grounds no-2 and 3 were rejected, and ground no-4 was allowed. Ground no-7 was consequential, and grounds no-8 and 9 were general and did not require adjudication. The order was pronounced in open court on 22.3.2013.

---