M/s. Deep Management & Eco Consultants Pvt. Ltd., Kanpur V. Dy. Commissioner of Income Tax-6, Kanpur

CO 68/LKW/2012

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9731 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 10 month(s) 22 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 04-07-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-06-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 13-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Depreciation; Earning of tax free income; Cost of acquisition
• Section: 50C; 14A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.641/LKW/2011 ASSESSMENT YEAR:2008 - 09 DY.C.I.T. - 6, KANPUR. VS. M/S DEEP MANAGEMENT & ECO CONSULTANT PVT. LTD., 15/212 - B, CIVIL LINES, KANPUR. PAN:AABCD0652P (APPELLANT) (RESPONDENT) C.O. NO.68/LKW/2012 (IN ITA NO.641/LKW/2011) ASSESSMENT YEAR:2008 - 09 M/S DEEP MANAGEMENT & ECO CONSULTANT PVT. LTD., 15/212 - B, CIVIL LINES, KANPUR. PAN:AABCD0652P VS. DY.C.I.T. - 6, KANPUR. (OBJECTOR) (RESPONDENT) REVENUE BY SHRI ALOK MITRA, D.R. ASSESSEE BY SHRI RAKESH GARG, ADVOCATE DATE OF HEARING 09/06/2014 DATE OF PRONOUNCEMENT 0 4 /0 7 /2014 O R D E R PER A. K. GARODIA, A.M. THE APPEAL IS FILED BY THE REVENUE AND THE CROSS OBJECTION IS FILED BY THE ASSESSEE, WHICH ARE DIRECTED AGAINST THE ORDER OF CIT (A) - I, KANPUR DATED 15/07/2011 FOR ASSESSMENT YEAR 2008 - 2009. 2. FIRST WE TAKE UP THE APPEAL OF THE REVENUE. GROUND NO. 1 & 2 ARE INTER - CONNECTED, WHICH READ AS UNDER: 2 1. THE LD. CIT (A) - II, KANPUR HAS ERRED IN LAW AND ON FACTS BY IGNORING THE FACTS AND FINDINGS OF THE ASSESSING OFFICER THAT THE ASSESSEE COMPANY HAS DEDUCTED TDS ON PAYMENT OF COMMISSION IN THE CASE OF SOME P ERSONS AND ON THE OTHER HAND TDS HAS NOT BEEN DEDUCTED IN THE CASE OF SUB AGENTS WITHOUT ANY BASE. 2. THE LD. CIT(A) - II, KANPUR HAS ERRED IN LAW AND ON FACTS BY IGNORING THE FACT THAT THE ASSESSEE HAS NOT DEDUCTED TDS AGAINST PAYMENT OF COMMISSION, THEREF ORE, COMMISSION IS NOT ALLOWABLE U/S. 40 (A)(IA) OF THE INCOME TAX ACT, 1961. 3. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER. AS AGAINST THIS , LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF CIT(A). HE ALSO SUBMITTED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF LUCKNOW BENCH OF TRIBUNAL RENDERED IN THE CASE OF ACIT VS. M/S TANDON & MAHENDRA IN I.T.A. NO.66/LKW/201 1 DATED 24/10/2013. HE FURTHER SUBMITTED THAT THE COPY OF THE TRIBUNAL DECISION IS AVAILABLE ON PAGE NO. 53 TO 58 OF THE PAPER BOOK. HE ALSO SUBMITTED THAT THIS TRIBUNAL DECISION HAS BEEN APPROVED BY HON'BLE ALLAHABAD HIGH COURT AS PER DECISION REPORTED IN 45 TAXMAN.COM 183 (ALL.) DATED 13/03/2014. HE SUBMITTED A COPY OF THIS JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND WE FIND THAT THE ISSUE INVOLVED AS PER THESE TWO GROUNDS OF APPEAL IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL DECISION RENDERED IN THE CASE OF ACIT VS. M/S TANDON & MAHENDRA (SUPRA) AND THIS TRIBUNAL DECISION WAS APPROVED BY HON'BLE ALLAHABAD HIGH COURT ALSO AS PER JUDGMENT DATED 13/03/2014. LEARNED D.R. OF THE REVENUE COULD NOT POINT OUT ANY DIFFERENCE IN FACTS AND THEREFORE, RESPECTFULLY FOLLOWING THIS JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT, WE DECLINE TO INTERFERE IN THE ORDER OF CIT(A) ON THIS ISSUE. ACCORDINGLY, GROUND NO. 1 & 2 OF THE REVENUES APPEAL ARE REJECTED. 3 5. GROUND NO. 3 & 4 ARE ALSO INTER - CONNECTED, WHICH READ AS UNDER: 3. THE LD. CIT (A) - II, KANPUR HAS ERRED IN LAW AND ON FACTS BY NOT ACCEPTING THE FACT THAT THE FLAT WAS NOT A DEPRECIABLE ASSET. 4. THAT THE ORDER OF LD. COMMISSIONER OF INCOME TAX (A) - 1, KANPUR BEING ERRONEOUS UNJUST AND BAD IN LAW BE VACATED AND THE ORDER OF ASSESSING OFFICER BE RESTORED. 6. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF CIT(A). 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THIS ISSUE WAS DECIDED BY CIT(A) AS PER PARA 8.1.2 OF HIS ORDER, WHICH IS REPRODUCED BELOW FOR THE SAKE O F READY REFERENCE: 8.1.2 DISCUSSION & DECISION AFTER GOING THROUGH THE OBSERVATIONS MADE BY THE AO AND ALSO THE SUBMISSIONS FILED BY THE A.R, I FIND THAT AS PER THE FIXED ASSETS CHART FILED BY THE APPELLANT ALONG WITH THE RETURN OF INCOME, THE OFFICE PREMISES IN QUESTION APPEARS AS PART OF BLOCK OF ASSETS. THE IMPUGNED PREMISES SOLD IS PART OF BLOCK OF ASSETS AND AS SUCH, THE SALE OF THE SAME IS TO BE TREATED AS PER SECTION 50 OF THE INCOME TAX ACT. AS PER SECTION 50 OF THE INCOME TAX ACT, WHERE AN AS SETS FORMS PART OF BLOCK OF ASSETS, THE SALE CONSIDERATION HAS TO BE ADJUSTED AGAINST THE RESIDUAL AMOUNT APPEARING IN THE SAID ITEM OF BLOCK OF ASSETS. THE AO IS DIRECTED TO RECOMPUTE THE INCOME ARISING FROM THE SALE OF OFFICE PREMISES TREADING IT AS PART OF BLOCK OF ASSETS. 7.1 WE ALSO FIND THAT IN PARA 8.1 OF HIS ORDER, THE CIT(A) HAS REPRODUCED THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE HIM. AS PER THIS SUBMISSION, WE FIND THAT IT IS STATED BY THE ASSESSEE THAT THE ASSESSEE COMPANY HAD ACQUIRED AN OFFICE PREMISES AT LUCKNOW ON 14/10/2005 FOR TOTAL COST OF RS.21,55,600/ - . THE ASSESSEE HAS ALSO SUBMITTED THAT THE COST OF THE OFFICE PREMISES WAS CAPITALIZED WITH THE BLOCK OF A SSETS. THE ASSESSEE SUBMITTED 4 THAT THE SAME WAS APPEARING YEAR AFTER YEAR IN THE BLOCK OF ASSETS AND NO DEPRECIATION WAS CLAIMED ON THE SAME. THE ASSESSEE ALSO SUBMITTED THAT THE SAME WAS SOLD ON 15/11/2007 FOR RS.20 LAC S AND NECESSARY ENTRIES WERE MADE TO THE B OOKS OF A CCOUNT S. HE ALSO SUBMITTED THAT THE ASSESSING OFFICER HAS HELD THAT THE SURPLUS ON SALE OF LUCKNOW OFFICE I S SHORT TERM CAPITAL GAIN. FROM THE ASSESSMENT ORDER, WE FIND THAT IT IS NOTED BY ASSESSING OFFICER IN PARA 8 OF THE ASSESSMENT OR DER THAT ALTHOUGH THE PROPERTY WAS SOLD FOR RS.20 LAC S BUT THE VALUE OF THIS PROPERTY HAS BEEN DETERMINED AT RS.24,51,960/ - FOR STAMP DUTY PURPOSES. THE ASSESSING OFFICER HAS COMPUTED THE CAPITAL GAIN BY ADOPTING THIS SALE VALUE AS PER STAMP DUTY PURPOSES AS PROVIDED IN SECTION 50C OF THE ACT AND AFTER REDUCING THE COST OF ACQUISITION, THE DIFFERENCE OF RS.2,96,360/ - HAS BEEN ASSESSED AS INCOME FROM SHORT TERM CAPITAL GAIN. NOW UNDER THESE FACTS, WE EXAMINE THE APPLICABILITY OF THE PROVISION S OF SECTION 5 0 OF THE INCOME TAX ACT BEING SPECIAL PROVISION FOR COMPUTING THE CAPITAL GAIN IN CASE OF DEPRECIABLE ASSET BECAUSE RELIEF HAS BEEN ALLOWED BY CIT(A) AS PER THE PROVISIONS OF SECTION 50 OF THE ACT. THE PROVISIONS OF SECTION 50 READ AS UNDER: 50. SPECIA L PROVISION FOR COMPUTATION CAPITAL GAINS IN CASE OF DEPRECIABLE ASSETS. -- NOTWITHSTANDING ANYTHING CONTAINED IN CLAUSE (42A) OF SECTION 2, WHERE THE CAPITAL ASSET IS AN ASSET FORMING PART OF A BLOCK OF ASSETS IN RESPECT OF WHICH DEPRECIATION HAS BEEN ALLOW ED UNDER THIS ACT OR UNDER THE INDIAN INCOME - TAX ACT, 1922 (11 OF 1922), THE PROVISIONS OF SECTIONS 48 AND 49 SHALL BE SUBJECT TO THE FOLLOWING MODIFICATIONS: -- (1) WHERE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF THE ASSET TOGETHER WITH THE FULL VALUE OF SUCH CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF ANY OTHER CAPITAL ASSET FALLING WITHIN THE BLOCK OF ASSETS DURING THE PREVIOUS YEAR, EXCEEDS THE AGGREGATE OF THE FOLLOWING AMOUNTS , NAMELY: -- 5 (I) EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH SUCH TRANSFER OF TRANSFERS ; (II) THE WRITTEN DOWN VALUE OF THE BLOCK OF ASSETS AT THE BEGINNING OF THE PREVIOUS YEAR ; AND (III) THE ACTUAL COST OF ANY ASSET FALLING WITH IN THE BLOCK OF ASSETS ACQUIRED DURING THE PREVIOUS YEAR, SUCH EXCESS SHALL BE DEEMED TO BE THE CAPITAL GAINS ARISING FROM THE TRANSFER OF SHORT - TERM CAPITAL ASSETS ; (2) WHERE ANY BLOCK OF ASSETS CEASES TO EXIST AS SUCH, FOR THE REASON THAT ALL THE AS SETS IN THAT BLOCK ARE TRANSFERRED DURING THE PREVIOUS YEAR, THE COST OF ACQUISITION OF THE BLOCK OF ASSETS SHALL BE THE WRITTEN DOWN VALUE OF THE BLOCK OF ASSETS AT THE BEGINNING OF THE PREVIOUS YEAR, AS INCREASED BY THE ACTUAL COST OF ANY ASSET FALLING W ITHIN THAT BLOCK OF ASSETS, ACQUIRED BY THE ASSESSEE DURING THE PREVIOUS YEAR AND THE INCOME RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER OR TRANSFERS SHALL BE DEEMED TO BE THE CAPITAL GAINS ARISING FROM THE TRANSFER OF SHORT - TERM CAPITAL ASSETS. 7.1.1 FROM THE PROVISIONS OF SECTION 50, AS REPRODUCED ABOVE, WE FIND THAT THE SAID PROVISIONS ARE APPLICABLE IN THOSE CASES WHERE THE CAPITAL ASSET SOLD IS AN ASSET FORMING PART OF THE BLOCK ASSET ON WHICH DEPRECIATION HAS BEEN ALL OWED UNDER THE INDIAN I. T. ACT . HENCE, FOR THE PURPOSE OF APPLYING SECTION 50 OF THE ACT, THERE ARE TWO REQUIREMENTS. THE FIRST REQUIREMENT IS THAT THE PROPERTY IN QUESTION SOLD SHOULD BE SUCH AN ASSET WHICH IS FORMING PART OF A BLOCK OF ASSETS. THE SECOND REQUIREMENT IS THAT IN RESPECT OF SUCH ASSET, DEPRECIATION HAS BEEN ALLOWED UNDER THIS ACT. IN THE PRESENT CASE, THE CASE OF THE ASSESSEE IS THAT THE PROPERTY WAS FORMING PART OF THE BLOCK OF ASSETS BUT REGARDING SECOND REQUIREMENT, DEPRECIATION SHOULD HAVE BEEN ALLOWED ON S UCH ASSET. IT IS SUBMITTED BY THE ASSESSEE BEFORE THE CIT(A) THAT NO DEPRECIATION WAS CLAIMED ON THIS ASSET. THIS IS ALSO NOT A CASE OF THE ASSESSEE THAT WITHOUT CLAIMING THE DEPRECIATION BY THE ASSESSEE, THE DEPRECIATION ON THIS ASSET HAS BEEN ALLOWED B Y THE ASSESSING OFFICER IN 6 COMPUTATION OF INCOME IN THE PRESENT YEAR OR IN ANY EARLIER YEAR. IN OUR CONSIDERED OPINION, UNDER THESE FACTS, SECTION 50 IS NOT APPLICABLE. THE CIT(A) HAS DECIDED THE ISSUE BY EXAMINING ONLY FIRST REQUIREMENT OF SECTION 50 T HAT THE ASSET IN QUESTION SHOULD BE PART OF BLOCK OF ASSET BUT HE HAS FAILED TO EXAMINE THE FULFILLMENT OF SECOND REQUIREMENT OF SECTION 50 THAT THE DEPRECIATION SHOULD HAVE BEEN ALLOWED UNDER THIS ACT IN RESPECT OF SUCH ASSET. SINCE NO DEPRECIATION HAS B EEN CLAIMED OR ALLOWED, SECTION 50 IS NOT APPLICABLE IN RESPECT OF THIS ASSET. HENCE, WE REVERSE THE ORDER OF CIT(A) AND RESTORE THAT OF THE ASSESSING OFFICER. ACCORDINGLY, GROUND NO. 3 & 4 OF THE REVENUES APPEAL ARE ALLOWED. 8. IN THE RESULT, THE APPE AL OF THE REVENUE STANDS PARTLY ALLOWED. 9. NOW WE TAKE UP THE CROSS OBJECTION FILE BY THE ASSESSEE I.E. C.O. NO.68/LKW/2012. IN ITS CROSS OBJECTION, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. BECAUSE THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN DIRECTING THE ASSESSING OFFICER TO COMPUTE THE DISALLOWANCE OF ADMINISTRATIVE EXPENDITURE IN TERMS OF SECTION 14A(2)/(33) READ WITH RULE 8D, WITHOUT APPRECIATING THAT NO EXPENDITURE HAS BEEN INCURRED BY THE APPELLANT TOWARDS EARNING OF ANY TAX EXEMPT INCO ME. THE FINDING OF THE CIT(A) IS ERRONEOUS, CONTRARY TO THE PROVISIONS OF LAW AND BE DELETED. 10. LEARNED A.R. OF THE ASSESSEE PLACED RELIANCE ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: (I) I.T.A.T. MUMBAI DECISION IN THE CASE OF JM FINANCIAL LIMITED VS . ADDL.CIT IN I.T.A. NO.4521/MUM/2012 DATED 26/03/2014 (II) I.T.A.T. MUMBAI DECISION IN THE CASE OF GARWARE WALL ROPES LIMITED VS. ADDL. CIT IN I.T.A. NO.5408/MUM/2012 DATED 15/01/2014 (III) CANARA BANK VS. ACIT [2014] 99 DTR (KAR) 36 (IV) CIT VS. DEEPAK M ITTAL [2013] 38 TAXMAN.COM 83 (PUNJAB & HARYANA) 7 11. A SPECIFIC QUERY WAS RAISED BY THE BENCH AS TO WHETHER THE ASSESSEE HAS MADE INVEST MENT IN SUBSIDIARY COMPANIES OR SPV AND IN REPLY , IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT INVESTMENT WAS NOT MADE IN ANY SUBSIDIARY COMPANY BUT INVESTMENT WAS MADE IN MUTUAL FUNDS BECAUSE THE ASSESSEE IS ENGAGED IN THE BUSINESS MOTIVATING INVESTMENT IN MUTUAL FUND S. HE ALSO SUBMITTED THAT I F THE ASSESSEE ITSELF DOES NOT MAKE SUCH INVESTMENT, SHE CANNOT MOTIVATE THE CUSTOMERS AND THEREFORE, THESE JUDGMENTS ARE APPLICABLE IN THE PRESENT CASE. 12. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. HE ALSO SUBMITTED THA T IN THE FACTS OF THE PRESENT CASE, THESE JUDGMENTS CITED BY LEARNED A.R. OF THE ASSESSEE ARE NOT APPLICABLE. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE TRIBUNAL DECISION CITED BY LEARNED A.R. OF THE ASSESSEE HAVING BEEN RENDERED IN T HE CASE OF JM FINANCIAL LIMITED VS. ADDL.CIT (SUPRA) IS NOT APPLICABLE BECAUSE THE FACTS ARE DIFFERENT. IN THAT CASE, THE INVESTMENT WAS MADE BY THE ASSESSEE IN SUBSIDIARY COMPANY AND JOINT VENTURE COMPANIES. UNDER THESE FACTS, IT WAS HELD BY THE TRIBUNA L THAT NO EXPENDITURE WAS INCURRED FOR MAINTAINING THE PORTFOLIO OF THESE INVESTMENTS OR FOR HOLDING THE SAME. IT WAS ALSO A CASE OF THE ASSESSEE THAT THESE INVESTMENTS ARE LONG TERM INVESTMENT AND NO DECISION IS REQUIRED IN MAKING THE INVESTMENT OR DISIN VESTMENTS ON REGULAR BASIS BECAUSE THESE INVESTMENTS ARE STRATEGIC IN NATURE IN THE SUBSIDIARY COMPANIES ON LONG TERM BASIS AND THEREFORE, NO DIRECT OR INDIRECT EXPENDITURE IS INCURRED. SINCE IN THE PRESENT CASE, THERE IS NO INVESTMENT IN SUBSIDIARY OR SP V, THIS TRIBUNAL DECISION IS NOT APPLICABLE. 13.1 THE SECOND DECISION CITED BY LEARNED A.R. OF THE ASSESSEE HA S BEEN RENDERED IN THE CASE OF GARWARE WALL ROPES LIMITED VS. ADDL. CIT (SUPRA) . I N THIS CASE ALSO , IT WAS NOTED BY THE TRIBUNAL THAT NO EXPENDI TURE HAS BEEN 8 INCURRED BY THE ASSESSEE FOR EARNING THE EXEMPT INCOME BECAUSE THE INVESTMENT HAS BEEN MADE IN THE GROUP CONCERN AND NO T IN THE SHARE OF ANY UNRELATED PARTY. THIS FINDING IS ALSO GIVEN THAT THE PRIMARY OBJECT OF INVESTMENT IS HOLDING CONTROL LING STAKE IN THE GROUP CONCERN AND NOT EARNING ANY INCOME OUT OF INVESTMENT. IT WAS ALSO HELD THAT THE INVESTMENT WAS MADE LONG BACK. BUT MAINLY BECAUSE OF THIS REASON THAT THE INVESTMENTS ARE IN GROUP CONCERN, IT WAS HELD BY THE TRIBUNAL THAT THE DISAL LOWANCE IS NOT JUSTIFIED . IN THE PRESENT CASE, THE FACTS ARE DIFFERENT AND THEREFORE, THIS TRIBUNAL DECISION IS ALSO NOT APPLICABLE. 13.2 THE THIRD DECISION CITED BY LEARNED A.R. OF THE ASSESSEE WAS RENDERED IN THE CASE OF CANARA BANK VS. ACIT (SUPRA) . I N THAT CASE , THE ASSESSMENT YEAR INVOLVED WAS 1998 - 99 AND 2000 - 2001 AND THEREFORE, RULE 8D WAS NOT APPLICABLE IN THAT CASE. THE ASSESSING OFFICER DISALLOWED 2% OF THE GROSS RECEIPTS BY HOLDING THAT IT IS AN EXPENDITURE FOR EXEMPT INCOME AND THIS DISALLOWA NCE WAS DELETED BY HON'BLE KARNATAKA HIGH COURT BY HOLDING THAT THIS ADDITION IS UNSUSTAINABLE IN LAW. IN THE PRESENT CASE, THE ASSESSMENT YEAR INVOLVED IS 2008 - 09 AND THEREFORE, RULE 8D IS APPLICABLE . BECAUSE OF THIS DIFFERENCE IN FACTS, THIS JUDGMENT IS ALSO NOT APPLICABLE. 13.3 THE FOURTH DECISION CITED BY LEARNED A.R. OF THE ASSESSEE WAS RENDERED IN THE CASE OF CIT VS. DEEPAK MITTAL (SUPRA) . I N THAT CASE , THE ASSESSMENT YEAR INVOLVED WAS 2007 - 08. HENCE, RULE 8D WAS NOT APPLICABLE IN THAT CASE ALSO BECAUSE THE SAME HAS BEEN MADE APPLICABLE FROM ASSESSMENT YEAR 2008 - 09. THEREFORE, THIS JUDGMENT IS ALSO NOT APPLICABLE IN THE PRESENT CASE. 14. AS PER ABOVE DISCUSSION, WE HAVE SEEN THAT NONE OF THE JUDGMENTS CITED BY LEARNED A.R. IS REN DERING ANY HELP TO THE ASSESSEE. MOREOVER, WE FIND THAT IN THE PRESENT CASE, IT IS HELD BY CIT(A) THAT THERE CANNOT BE ANY DISALLOWANCE ON ACCOUNT OF INTEREST EXPENDITURE U/S 14A BECAUSE THE 9 ASSESSEE HAS INVESTED ITS OWN SURPLUS FUND. BUT IT WAS HELD BY CIT(A) THAT AS PER THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT RENDERED IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD. VS. DY. CIT [2010] 234 CTR (BOM) 1, RULE 8D IS APPLICABLE FROM ASSESSMENT YEAR 2008 - 09 AND SINCE THE ASSESSMENT YEAR INVOLVED IS 2008 - 09, HE D IRECTED THE ASSESSING OFFICER TO COMPUTE THE DISALLOWANCE OF ADMINISTRATIVE EXPENSES IN TERMS OF SECTION 14A(2)(III) READ WITH RULE 8D. CONSIDERING T HIS FACT THAT RULE 8D IS APPLICABLE IN THIS ASSESSMENT YEAR, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A). ON THIS ISSUE. HENCE, WE DECLINE TO INTERFERE IN HIS ORDER. THIS GROUND OF CROSS OBJECTION IS REJECTED. 15. IN THE RESULT, THE CROSS OBJECTION OF THE ASSESSEE STANDS DISMISSED. 16. IN THE COMBINED RESULT, THE APPEAL OF THE REVENUE IS PARTLY ALLO WED AND CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 4 /0 7 /2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR