Dy. Commissioner of Income Tax , Circle-16(2), Hyderabad V. Ramoji Rao(HUF), Hyderabad

ITA 1009/Hyd/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4301 (ITAT-HYDERABAD)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 10-04-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 18-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M H NAIK
• Assessee Lawyers: V RAGHAVENDRA RAO
• Keywords: Earning of tax free income; Notional interest; Rule 8D
• Section: 143(3); 142(1); 14A; 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A ', HYDERABAD BEFORE S MT. P. MADHAVI DEVI , JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO S . 1 008 & 1009 / HYD/201 8 ASSESSMENT YEAR: 20 13 - 14 AND 2014 - 15 DY. COMMISSIONER OF INCOME - TAX, CIRCLE 16 ( 2 ), HYDERABAD. VS. RAMOJI RAO (HUF), HYDERABAD. PAN AADHR 6836E ASSESSEE RESPONDENT REVENUE BY: S HRI M.H. NAIK ASSESSEE BY: SHRI V. RAGHAVENDRA RAO DATE OF HEARING: 1 0 / 0 4 / 201 9 DATE OF PRONOUNCEMENT: 1 0 /05 /201 9 O R D E R PER S. RIFAUR RAHMAN , AM: BOTH T H E S E APPEAL S FILED BY THE REVENUE ARE DIRECTED AGAINST THE ORDER S OF CIT(A) 4 , HYDERABAD , BOTH DATED, 19 / 0 2 / /201 8 FOR AY S 2013 - 14 AND 2014 - 15 . AS IDENTICAL ISSUES ARE INVOLVED IN BOTH THESE APPEALS, THE SAME WERE CLUBBED AND HEARD TOGETHER AND THEREFORE A COMMON ORDER IS PASSED FOR THE SAKE OF CONVENIENCE. 2. ON PERUSAL OF RECORD, WE FIND THAT THERE WAS A DELAY OF 11 DAYS IN FILING THESE APPEALS. TO THIS E FFECT, THE ASSESSEE FILED AN AFFIDAVIT , AFFIRMING THEREIN , THAT DUE TO MIX UP THE APPEAL PAPERS PERTAINING TO THESE APPEALS WITH OTHER RECORDS , COULD NOT TRACE THE SAME IMMEDIATELY, DUE TO WHICH, THE SAID DELAY OCCURRED, WHICH MAY KINDLY BE CONDONED. AS TH E ASSESSEE WAS PREVENTED BY SUFFICIENT REASON IN NOT FILING THESE APPEALS WITHIN THE STIPULATED TIME, WE CONDONE THE SAID DELAY AND ADMIT THE APPEALS FOR HEARING AND ADJUDICATION. I.T.A. NO S . 1008 & 1009 HYD/1 8 RAMOJI RAO (HUF), HYD. 2 3 . BRIEF FACTS OF THE CASE , AS TAKEN FROM AY 2013 - 14 ARE, THE ASSESSEE , A HUF, FILED ITS RETURN OF INCOME FOR THE AY 201 3 - 14 ON 30 / 11 /2013 DECLARING TOTAL INCOME OF RS. 3,47,41,356/ - AND THE SAME WAS PROCESSED U/S 143(1) OF THE INCOME - TAX ACT, 1961 ( IN SHORT THE ACT) SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND ACCORDINGLY, NOTICES U/S 143(2) AND 142(1) WERE ISSUED, IN RESPONSE TO WHICH, THE AR OF THE ASSESSEE FILED THE INFORMATION AS CALLED FOR. THE AO AFTER VERIFICATION OF THE INFORMATION FILED, COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT BY MAKING THE FOLLOWING DISALLOWANCES: 1. DISALLOWANCE OF EXPENDITURE U/S 14A OF THE ACT RS. 1,20,53,646/ - 2. DISALLOWANCE OF DRAWINGS AND INTEREST ON DRAWINGS USED FOR PERSONAL PURPOSES - RS. 45,41,244/ - 3. DISALLOWANCE OF EXPENDITURE DEBITED IN THE HUF UNIT OF USHAKIRON PROPERTIES - RS. 75,92,998/ - 4 . WHEN THE ASSESSEE PREFERRED AN APPEAL AGAINST THE ORDER OF CIT(A), THE CIT(A) RESTRICTED THE DISALLOWANCE OF EXPENDITURE U/S 14A, DELETED THE DISALLOWANCE OF DRAWINGS AND AS REGARDS THE DISALLOWANCE OF EXPENDITURE DEBITED IN THE HUF UNIT, HE OBSERVED THA T THE SAME WAS ACCEPTED BY THE ASSESSEE AND DID NOT CONTEST THE SAME BEFORE HIM. 5 . AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE CIT(A) ERRED IN RESTRICTING THE DISALLOWANCE U/S 14A FROM RS. 1,20,53,646/ - TO RS. 33,282/. 2. THE CIT(A) ERRED IN DELETING THE DISALLOWANCE OF INTEREST ON DRAWINGS. 3. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. I.T.A. NO S . 1008 & 1009 HYD/1 8 RAMOJI RAO (HUF), HYD. 3 6 . AS REGARDS GROUND NO. 1 RELATING TO DISALLOWANCE U/S 14A, D URING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HUF HAS BORROWED FUNDS FROM THE PUBLIC, THROUGH VARIOUS DEPOSIT SCHEMES ON WHICH THE HUF IS CLAIMING INT EREST EXPENDITURE. THE ASSESSING OFFICER FURTHER OBSERVED THAT DURING THE FINANCIAL YEAR 2012 - 13 RELEVANT TO ASSESSMENT YEAR 2013 - 14, HUF CLAIMED INTEREST ON BORROWED FUNDS AT RS. 21,78,230 / - IN ITS PROFIT AND LOSS ACCOUNT AND THE FUNDS BORROWED WER E UTI LIZED BY THE HUF FOR INVESTMENT IN MUTUAL FUNDS SHARE APPLICATION MONEY DEPOSIT, INVESTMENT IN INTRA UNITS, INVESTMENT IN LANDED PROPERTIES & RESIDENTIAL BUILDINGS AND FOR HUF DRAWINGS. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE HUF IS RUNNING ON BORR OWED FUNDS AND HAS NO CAPITAL OF ITS OWN AND THE HUF IS INCURRING LOSSES YEAR AFTER YEAR FOR THE REASON THAT THE BORROWED FUNDS ARE INVESTED IN NON - INCOME YIELDING ASSETS AND INTEREST HAS TO BE PAID ON NOT ONLY ON THE SE BORROWED FUNDS BUT ALSO ON FRESH BOR ROWINGS YEAR AFTER YEAR. THUS, THE ASSESS ING OFFICER CONCLUDED THAT COMPOUND ING I NTEREST HAS TO BE DISALLOWED ON TH E INVESTMENTS MADE IN NON - INCOME YIELDING ASSETS U/S 14A OF THE I.T. ACT, 1961 TO ARRIVE AT THE CORRECT INCOME OF THE ASSESSEE. THE ASSESSING OFFICER ALSO OBSERVED THAT THE ASSESSEE HAS MADE INVESTMENT IN INTRA UNITS OF HUF TOWARDS CAPITAL AND GROUPED UNDER INVESTMENTS IN INTRA UNITS OUT OF BORROWED FUNDS AND NO INCOME IS GENERATED OUT OF ABOVE INVESTMENT. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE ASSESSEE HAS NOT ONLY INVESTED IN SHARE APPLICATION MONEY BUT ALSO ON LANDS, CONSTRUCTION OF RESIDENCE FOR FAMILY OCCUPATION AND PERSONAL WITHDRAWALS. REGARDING THE ASSESSEE 'S SUBMISSION THAT PART OF THE INVESTMENTS ARE FROM BORROWED FUNDS AND T HE BALANCE IS MET OUT OF INTERNAL GENERATION OF OTHER DIVISIONS OF HUF UNITS IS NOT ACCEPTED BY THE ASSESSING OFFICER ON THE GROUND THAT EACH I.T.A. NO S . 1008 & 1009 HYD/1 8 RAMOJI RAO (HUF), HYD. 4 DIVISION OF HUF IS NOT A SEPARATE LEGAL ENTITY AND THEREFORE, THE HUF AS A WHOLE IS RUNNING ONLY ON BORROWED FUNDS AND RETURNING HUGE LO SSES.THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO FURNISH THE YEAR - WISE DETAILS OF VARIOUS INVESTMENTS MADE BY THE HUF AS A WHOLE, ALONG WITH THE PROFIT AVAILABLE FOR THE HUF TO MAKE SUCH INVESTMENT. THE ASSESSEE WAS ALSO REQUIRED TO FURNISH THE CASH FLOW STATEMENT OF THE HUF AS A WHOLE SINCE THE YEAR IN WHICH THE ABOVE INVESTMENT WE RE MADE IN ORDER TO SHOW THE UTILIZATION OF INCOME/PROFIT GENERATED BY THE HUF FOR THE PURPOSE OF MAKING THE ABOVE INVESTMENTS. BUT T HE REPLY SUBMITTED BY THE ASSESSEE WAS FOUND TO BE INCOMPLETE BY THE ASSESSING OFFICER. THUS, THE ASSESSING OFFICER WORKED OUT THE DISALLOWANCE U/ S 14A AT RS. 1 ,20,53,646 / - AND ADDED THE SAME TO THE INCOME RETURNED. 6 . 1 BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT A SUM OF RS.1,20,53,646/ - WAS DISALLOWED NOTIONALLY ON AN INVESTMENT OF SHARE APPLICATION MONEY DEPOSIT OF RS.32,86,10,050/ - AND THE NOTIONAL INTEREST WAS COMPUTED ON COMPOUNDING BASIS WHEN THE AVERAGE BORROWING RATE WORKS OUT TO A MERE 3.2 7% IN RESPECT OF BORROWED FUNDS OF MARGADARSI FINANCIERS. THUS, THE NOTIONAL INTEREST OF RS, 1,20,53,646/ - WAS DISALLOWED AGAINST ACTUAL INTEREST OF RS.33,282 / - DEBITED TO PROFIT AND LOSS ACCOUNT OF M/S. MARGADARSI FINANCIERS FOR THE RELEVANT YEAR. THE ASS ESSEE FURTHER SUBMITTED THAT THE AMOUNT INVESTED IN VARIOUS GROUP COMPANIES IS IN THE FORM OF SHARE APPLICATION MONEY DEPOSIT AND NOT SHARE CAPITAL WHICH E ARNS DIVIDEND WHICH DO NOT FORM PART OF TOTAL INCOME AND THE SHARE APPLICATION MONEY DEPOSITS BE COMES SHARE CAPITAL ONLY AFTER THE ALLOTMENT IS MADE WHICH UNTIL THAT POINT OF TIME DOES NOT QUALIFY AS INVESTMENT MADE TO EARN DIVIDEND INCOME WHICH DOES NOT FORM PART OF TOTAL INCOME. IN THIS REGARD THE ASSESSEE RELIED ON THE DECISION OF I.T.A. NO S . 1008 & 1009 HYD/1 8 RAMOJI RAO (HUF), HYD. 5 MUMBAI TRIBUNAL IN THE CASE OF RAINY INVESTMENTS PVT. LTD. VS. ASST. CIT (2013) 30 TAXMANN.COM 169 WHEREIN IT WAS CATEGORICALLY HELD THAT SECTION 14A IS NOT APPLICABLE IN RESPECT OF SHARE APPLICATION MONEY. THE ASSESSEE ALSO SUBMITTED THAT THE ASSESSING OFFICER FAILED TO APPRECIATE THE FACT THAT DEPOSIT LIABILITY REMAINING AS AT THE END OF THE YEAR IS RS.6.06 CRORES WHICH THE ASSESSEE STRONGLY CONTENDS IS REPRESENTED BY DEPOSITS HELD IN ESCROW ACCOUNT WITH UNION BANK OF INDIA AMOUNTING TO RS.6.65 CRORES (MATURED DEPOSIT) A ND RS.0.99 CRORES IN THE FORM OF FIXED DEPOSITS BOTH TOTALLING TO RS. 7.64 CRORES AND HENCE, THE QUESTION OF DISALLOWANCE OF NOTIONAL INTEREST ON THE ABOVE LIABILITY DOES NOT ARISE AT ALL SINCE THE ENTIRE DEPOSITS BORROWED ARE HELD IN BANK ACCOUNT AND DEPO SITS WITH BANK. 6 . 2 AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE CIT(A) OBSERVED THAT ON VERIFICATION OF THE DETAILS AND CASH FLOW STATEMENT FURNISHED BY THE ASSESSEE, IT WAS FOUND THAT THE ASSESSEE HAS NOT UTILIZED THE BORROWED FUNDS FOR THE PURPOSE OF INVESTMENTS WHICH EARN INCOME WHICH DOES NOT FORM PART OF TOTAL INCOME AND HENCE, THE APPLICABILITY OF SECTION 14A IS NOT ATTRACT ED IN THIS CASE. ACCORDINGLY, HE DELETED THE ADDITION MADE BY AO. 6 . 3 FURTHER, CIT(A) OBSERVED THAT THE ASSESSEE HAS CLAIMED INTEREST OF RS. 33,282/ - IN THE PROFIT AND LOSS ACCOUNT. SINCE THE ASSESSEE IS HAVING SUFFICIENT FUNDS BUT STILL BORROWED FUNDS AND THE BORROWED FUNDS HAD BEEN UTILIZED F OR PURPOSES OTHER THAN BUSINESS, THE INTEREST OF RS. 33,282/ - IS NOT ALLOWED AS EXPENDITURE AND THEREFORE, THE INTEREST AMOUNT WAS CONFIRMED. I.T.A. NO S . 1008 & 1009 HYD/1 8 RAMOJI RAO (HUF), HYD. 6 6 . 4 BEFORE US, LD. DR SUBMITTED THAT CIT(A) HAS DELETED THE DISALLOWANCE MADE BY THE AO WITH THE OBSERVATION THA T ASSESSEE HAS NOT UTILIZED THE BORROWED FUNDS FOR THE PURPOSE OF INVESTMENTS, WHICH DOES NOT FORM PART OF THE TOTAL INCOME, THEREFORE, 14A DISALLOWANCE IS NOT ATTRACTED IN THIS CASE. HE RELIED ON THE ORDER OF AO AND SUBMITTED THAT ASSESSEE HAS NO EXEMPT I NCOME, STILL AO CAN MAKE 14A DISALLOWANCE CONSIDERING THE FACT THAT ASSESSEE HAS MADE HUGE INVESTMENT I N OTHER COMPANIES. THEREFORE, HE OBJECTED THE CONCLUSION REACHED BY CIT(A). 6 . 5 ON THE OTHER HAND, LD. AR SUBMITTED A PAPER BOOK AND SUBMITTED THAT AS SESSEE HAS NOT INVESTED DURING AY UNDER CONSIDERATION AND ALL THE INVESTMENTS WERE MADE IN THE EARLIER YEARS AND MAJORITY OF THE BORROWED FUNDS ARE FROM MARGADARSI FINANCIERS AND THERE IS NO OUTFLOW OF INTEREST IN ALL THESE COMPANIES. HE BROUGHT TO OUR NOT ICE THE INVESTMENT PATTERN OF THE ASSESSEE, AS PER WHICH, ONLY SHARES AND APPLICATION MONEY INVESTED IN OTHER COMPANIES. HOWEVER, HE BROUGHT TO OUR NOTICE, IN FACT, THE ASSESSEE IS IN RECEIPT OF DIVIDEND INCOME FROM COMPANIES AND HE SUBMITTED THAT ALL THE INVESTMENTS MADE IN THOSE COMPANIES ARE OUT OF INTEREST FREE FUNDS. FURTHER, HE SUBMITTED THA T THESE INVESTMENTS WERE MADE IN EARLIER AYS. THEREFORE, HE SUBMITTED THAT PROVISIONS OF SECTION 14A WILL NOT BE APPLICABLE TO THE ASSESSEES CASE. 6 . 6 CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE NOTICE THAT ASSESSEE HAS CLAIMED INTEREST ON BORROWED FUNDS AND BANK CHARGES AT RS. 21,78,230/ - IN P&L A/C. FURTHER, ASSESSING OFFICER NOTICED THAT ASSESSEE HAS LOAN FUNDS TO THE EXTENT OF RS. 6,06,84,830/ - AND INVESTMENT OF RS. 46,63,21,591/ - . THEREFORE, HE INVOKED SECTION 14A AND DISALLOWED INTEREST EXPENDITURE TO THE EXTENT I.T.A. NO S . 1008 & 1009 HYD/1 8 RAMOJI RAO (HUF), HYD. 7 OF RS. 1,20,53,646/ - , BUT, WITHOUT FOLLOWING RULE 8D OF IT RULES. HE ADOPTED OTHER METHOD TO DETERMINE INTEREST EXPENDITURE TO THE COMPAN Y. EVEN THOUGH ASSESSEE HAS CLAIMED ONLY INTEREST EXPENDITURE TO THE EXTENT OF RS. 10,69,752/ - , AT THE SAME TIME, WE NOTICE THAT CIT(A) AFTER CONSIDERING ASSESSEES SUBMISSIONS GAVE RELIEF TO THE ASSESSEE WITH THE OBSERVATION THAT ON VERIFICATION OF DETAIL S AND CASH FLOW STATEMENT FURNISHED BEFORE H ER , IT WAS FOUND THAT ASSESSEE HAS NOT UTILIZED BORROWED FUNDS FOR THE PURPOSE OF INVESTMENT, WHICH EARN INCOME, WHICH DOES NOT FORM PART OF TOTAL INCOME AND SHE REACHED A CONCLUSION THAT PROVISIONS OF SECTION 14 A ARE NOT ATTRACTED IN THE CASE OF ASSESSEE. IN OUR CONSIDERED VIEW, AO AS WELL AS CIT(A) HAVE NOT FOLLOWED THE PROVISIONS OF SECTION 14A AS WELL RULE 8D. AS PER THE RECORDS, ASSESSEE HAS EARNED EXEMPT INCOME TO THE EXTENT OF RS. 16,14,41,459/ - AND WE NOTI CE THAT ASSESSEE HAS CLAIMED ACTUAL INTEREST EXPENDITURE IN THE P&L A/C. WE DIRECT THE AO TO CALCULATE THE EXPENDITURE WHICH IS RELATING TO EXEMPT INCOME STRICTLY FOLLOWING THE RULE 8D AND DISALLOW THE EXPENDITURE CLAIMED BY THE ASSESSEE AS PER RULE 8D(1)( II) & (III) OF THE ACT. AO HAS TO TAKE ON RECORD ONLY THE ACTUAL EXPENDITURE CLAIMED BY THE ASSESSEE IN THE P&L A/C AND APPLY THE FORMULA GIVEN IN RULE 8D AND NOT TO APPLY ANY PRESUMPTION S AS HE CANNOT QUESTION THE METHOD APPLIED BY THE ASSESSEE TO RUN ITS A FFAIRS . FURTHER, THE AO IS DIRECTED TO TAKE THE INVESTMENT, WHICH HAS YIELDED THE EXEMPT INCOME AND NOT TO CONSIDER ANY OTHER INVESTMENT, WHICH IS NOT YIELDED ANY INCOME DURING THE AY. WE ORDER ACCORDINGLY AND NEEDLESS TO SAY THAT PROPER OPPORTUNITY OF BEI NG HEARD TO THE ASSESSEE IN THE MATTER S HOULD BE GIVEN . THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. I.T.A. NO S . 1008 & 1009 HYD/1 8 RAMOJI RAO (HUF), HYD. 8 7 . AS REGARDS GROUND NO. 2 RELATING TO DISALLOWANCE OF INTEREST ON DRAWINGS, O N VERIFICATION OF DETAILS FURNISHED BY THE ASSESSEE, THE AO OBSERVED THAT THE ASSESSEE - HUF HAS MADE WITHDRAWALS AMOUNTING TO RS.3,78,43,698/ - FOR ITS PERSONAL PURPOSES. THESE DRAWINGS WE RE MADE FROM THE BORROWED FUNDS AND THE INTEREST DISALLOWABLE ON THI S COUNT COMES TO RS.45,41,244/ - (12% ON RS. 3,78,43, 698/ - ) AND ACCORDINGLY THE SAME WA S DISALLOWED. 7 . 1 BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT DRAWINGS WERE MET OUT OF PROFITS OF HUF AND THERE IS NO INTERLACING OF FUNDS OR NEXUS BETWEEN BORROWAL S MADE IN MARGADARSI FINANCIERS AND DRAWINGS FROM OTHER UNITS OF HUF WHEREIN NO BORROWED FUNDS EXIST. THE ASSESSEE FURTHER SUBMITTED THAT THE DRAWINGS WERE INCURRED OUT OF PROFITS GENERATED IN THE UNIT OF HUF I.E. USHODAYA NEWS AGENCIES, WHERE SEPARATE BOO KS OF ACCOUNT ARE MAINTAINED AND THERE IS NO INTERLACING OF FUNDS OR NEXUS BETWEEN MARGADARSI FINANCIERS AND USHODAYA NEWS AGENCIES AND FURTHER, THERE ARE NO BORROWINGS IN THE UNIT FROM WHICH DRAWINGS WERE MADE. 7 . 2 AFTER CONSIDERING THE SUBMISSIONS OF T HE ASSESSEE, THE CIT(A) OBSERVED THAT S INCE THE INTEREST AMOUNTING TO RS.33,282/ - WHICH WAS DEBITED BY THE ASSESSEE TO PROFIT AND LOSS ACCOUNT IS NOT ALLOWED AS EXPENDITURE , THE INTEREST AT THE RATE OF 12% CALCULATED BY THE ASSESSING OFFICER ON DRAWINGS FO R PERSONAL PURPOSE AMOUNTING TO RS 4 5,41,244/ - IS DELETED. 7. 3 CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE OBSERVE THAT LD. CIT(A) HAS CONSIDERED ONLY RS. 33,282/ - AS THE INTEREST EXPENSES BUT WE NOTICE FROM THE FINANCIAL REC ORDS SUBMITTED BEFORE US, WHICH SHOWS THAT ASSESSEE HAS AN INTEREST EXPENDITURE OF RS. 10,69,752/ - AND I.T.A. NO S . 1008 & 1009 HYD/1 8 RAMOJI RAO (HUF), HYD. 9 BANK CHARGES OF RS. 11,06,586/ - . SIMILAR ISSUE CAME UP FOR CONSIDERATION BEFORE THE COORDINATE BENCHES OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR EARLIE R YEARS. IN AY 2010 - 11, THE COORDINATE BENCH IN ITA NO. 60/HYD/2015 FOLLOWING ITS EARLIER ORDER IN AY 2006 - 07 IN ASSESSEES OWN CASE, REMITTED THE ISSUE BACK TO THE FILE OF THE AO WITH A DIRECTION TO VERIFY THE CLAIM OF THE ASSESSEE DENOVO AFTER GIVING THE ASSESSEE A FAIR OPPORTUNITY TO ESTABLISH ITS CLAIM THAT THE WITHDRAWALS FOR THE HOUSEHOLD EXPENSES WERE MADE OUT OF THE PROFITS GENERATED AND NOT OUT OF THE BORROWED FUNDS. SINCE THE ISSUE UNDER CONSIDERATION IS SIMILAR TO THAT OF EARLIER YEARS, FOLLOWING THE SAME, WE REMIT THIS ISSUE TO THE AO TO DECIDE THE SAME FOLLOWING THE SAID DIRECTIONS. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, APPEAL OF THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 9. IN AY 2014 - 15, THE REVENUE HAS RAISED ONLY ONE GROUND REGARDING RESTRICTING THE DISALLOWANCE U/S 14A FROM RS. 79,63,952/ - TO RS. 3,631/ - BY THE CIT(A). SINCE THIS GROUND IS SIMILAR TO THE GROUND NO. 1 I N AY 2013 - 14 9(SUPRA), FOLLOWING THE CONCLUSIONS DRAWN THEREIN, WE REMIT THIS ISSUE TO THE FILE OF AO TO DECIDE THE SAME AS PER THE DIRECTIONS GIVEN IN PARA 5.7(SUPRA) . 10. TO SUM UP , BOTH THE APPEALS OF THE REVENUE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 10 TH MAY , 201 9. SD/ - ( P. MADHAVI DEVI ) JUDICIAL MEMBER SD/ - ( S. RIFAUR RAHMAN ) ACCOUNTANT MEMBER HYDERABAD, DATED 10 TH MAY , 201 9. I.T.A. NO S . 1008 & 1009 HYD/1 8 RAMOJI RAO (HUF), HYD. 10 KV COPY FORWARDED TO: 1. DCIT, CIRCLE 16(2), 2 ND FLOOR, B BLOCK, IT TOWERS, AC GUARDS, MASAB TANK, HYDERABAD. 2 . RAMOJI RAO HUF, NO.3, CHIKOTI GARDENS, BEGUMPET, HYDERABAD . 3 . CIT (A) 4 , HYDERABAD 4. PR. CIT 4 , HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE