Dy Commissioner of income Tax, Panchkula V. M/s Haryana State Co-op Supply & Marketing, Panchkula

ITA 1074/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7014 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 13-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI SARANGA L
• Keywords: Opportunity of being heard; Capital expenditure
• Section: 14A; 32; 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.1074/CHD/2016 (ASSESSMENT YEAR : 2007-08) THE D.C.I.T., VS. M/S HARYANA STATE C-OP SUPPLY & PANCHKULA CIRCLE, MARKETING FEDERATION LTD., SECTOR 5, PANCHKULA. PANCHKULA. PAN: AAAJH0022R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAVI SARANGAL, CIT DR RESPONDENT BY : SHRI AMAN PARTI DATE OF HEARING : 03.07.2017 DATE OF PRONOUNCEMENT : 01.08.2017 O R D E R PER ANNAPURNA GUPTA, A.M . : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF CIT(APPEALS), PANCHKULA DATED 12.8.201 6 RELATING TO ASSESSMENT YEAR 2007-08. 2. THE REVENUE HAS RAISED FOLLOWING EFFECTIVE GROU ND OF APPEAL: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) HAS ERRED TO ALLOWED THE APPEAL OF THE ASS ESSEE AND RESTRICTED THE DISALLOWANCE OF THE AMOUNT COMPUTED AS P ER RULE 80D OR THE ESTIMATED DISALLOWANCE @ 20% AS PER ASSESSMENT ORDER, WHICHEVER IS LOWER WHICH IS NOT C ORRECT BECAUSE THAT THE ASSESSEE HAS CLAIMED 100% DEDU CTION ON THE ABOVE INCOMES WITHOUT REDUCING AN Y PROPORTIONATE EXPENDITURE WHICH IS HIGHLY IMPOSSIBLE F OR EARNING ANY INCOME. 2 3. AT THE OUTSET IT IS PERTINENT TO POINT OUT THAT THE ISSUE HAS COME UP BEFORE US IN THE THIRD ROUND. BRI EF FACTS LEADING TO THE PRESENT APPEAL ARE THAT, DURING THE ORIGINAL ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT ASSESSEE HAD EARNED DIVIDEND INCOME AMOUNTING TO RS.5,94,05,460/-, ON THE ENTIRE AMOUNT OF WHICH DED UCTION U/S 80P(2)(D) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) WAS CLAIMED, WITHOUT REDUCING ANY PROPORTIONA TE EXPENDITURE. THE ASSESSING OFFICER NOTED THAT WHILE DECIDING APPEALS FOR A.YS. 2004-05 AND 2005-06 ON IDENTICAL ISSUE, THE HON'BLE ITAT HAD RESTORED THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER FOR FRESH ADJ UDICATION. THE ASSESSING OFFICER ALSO NOTED THAT ASSESSEE HAD MADE INVESTMENTS IN SHARES OF NATIONAL APEX COOPERATIVE SOCIETIES WHICH WERE PART OF THE BUSINESS ACTIVITY OF THE ASSESSEE AND COMMON FUNDS WHICH INCLUDED INTEREST B EARING FUNDS, WERE USED FOR MAKING AFORESAID INVESTMENTS. THE ASSESSING OFFICER DID NOT ACCEPT THE ASSESSEES PLE A THAT THERE WAS NO COST ATTACHED TO THESE INVESTMENTS A ND THEREFORE, PROCEEDED TO ALLOCATE EXPENSES AGAINST THE SAID INCOME IN THE RATIO OF PROFITS EARNED FROM DIFFEREN T SECTORS. THUS, AN EXPENDITURE OF RS.2,91,55,456/- WAS ALLOC ATED TO THE EARNING OF THE SAID INCOME AND CONSEQUENTLY THE DEDUCTION CLAIMED U/S 80P(2)(D) OF THE ACT WAS REDU CED BY THE SAID AMOUNT. THE LD.CIT(APPEALS) FOUND THE METH OD ADOPTED BY THE ASSESSING OFFICER FOR ALLOCATING THE INDIVIDUAL EXPENSES TO BE RATIONAL AND REASONABLE A ND THUS, UPHELD THE DISALLOWANCE MADE BY THE ASSESSING OFFIC ER. THE 3 HON'BLE ITAT ON FINDING THE FACTS IDENTICAL AS IN T HE ASSESSEES OWN CASE RELATING TO ASSESSMENT YEARS 20 04-05 & 2005-06, REMITTED THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION IN ACCORDANCE WITH L AW. THEREAFTER, IN THE SECOND ROUND, THE ASSESSING OFFI CER FOLLOWED HIS PREDECESSOR'S ORDERS IN ASSESSMENT YEA RS 2004- 05, 2005-06 & 2006-07 AND CALCULATED THE EXPENSES ATTRIBUTABLE TO EARNING THE DIVIDEND INCOME BY EST IMATING THE SAME, APPLYING A RATE OF 20% TO THE INCOME EARN ED FROM DIVIDEND/INTEREST, WHICH WORKED OUT TO RS. 1,18,81, 092/-. THUS, THE DEDUCTION CLAIMED U/S 80P(2)(D) WAS REDUC ED BY RS.1,18,81,092/-.AND CONSEQUENT ADDITION MADE TO TH E INCOME OF THE ASSESSEE . ON APPEAL, THE LD.CIT(APPE ALS) FOUND THAT ASSESSING OFFICER HAD NOT GIVEN ANY BASI S FOR HIS ESTIMATE OF EXPENSES AT 20% AND THEREFORE DIRECTED THE ASSESSING OFFICER TO COMPUTE THE DEDUCTION IN VIEW OF THE EXPENSES INCURRED BY THE ASSESSEE BY WAY OF COMMISSION/REMUNERATION PAID TO BANKER OR ANY OTHER PERSONS FOR REALIZING SUCH DIVIDEND AND EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY FOR EARNING SUCH IN COME. HOWEVER, THE ASSESSING OFFICER, WHILE GIVING EFFECT TO THE APPELLATE ORDER, COMPUTED THE ALLOCABLE EXPENSES BY APPLYING SECTION 14A READ WITH RULE 8D AND CALCULAT ED THE SAME AT RS.3,67,01,217/-. THE SAID AMOUNT WAS THUS ADDED TO THE INCOME OF THE ASSESSEE. THE ASSESSEES SUBSE QUENT APPEAL AGAINST THE ASSESSING OFFICER'S ORDER WAS DI SMISSED BY LD.CIT(APPEALS) WHICH IN TURN WAS RESTORED BACK BY THE 4 TRIBUNAL WITH THE DIRECTION TO RE-DECIDE THE APPEAL OF THE ASSESSEE ON MERITS. 4. AS A CONSEQUENCE THEREOF THE MATTER CAME UP BEFORE THE LD.CIT(A) FOR THE THIRD TIME. BEFORE THE LD.CIT(APPEALS), THE ASSESSEE CONTENDED THAT THE AP PEAL EFFECT ORDER PASSED BY THE ASSESSING OFFICER ALLOCA TING EXPENSES INCURRED FOR EARNING DIVIDEND/INTEREST INC OME ELIGIBLE FOR DEDUCTION U/S 80P(2)(D) BY APPLYING TH E PROVISIONS OF SECTION 14A READ WITH RULE 8D HAD NOT FOUND FAVOUR WITH THE I.T.A.T. ALSO. THE ASSESSEE FURTHER SUBMITTED THAT NO EXPENDITURE HAD BEEN INCURRED FOR EARNING DIVIDEND OR INTEREST INCOME SINCE THE ASSES SEE HAD NEITHER BORROWED ANY LOANS FOR MAKING INVESTMENTS I N COOPERATIVE INSTITUTION, NOR HAD INCURRED ANY EXPEN DITURE DIRECTLY OR INDIRECTLY. THE LD.CIT(APPEALS) AFTER CONSIDERING ASSESSEES SUBMISSIONS HELD THAT THE DISALLOWANCE U /S 14A IS APPLICABLE ON THE CLAIM OF DEDUCTION MADE U/S 80 P(2)(D) OF THE ACT AND DIRECTED THE ASSESSING OFFICER TO CO MPUTE THE DISALLOWANCE AS PER THE METHODOLOGY PRESCRIBED UNDE R RULE 8D. FURTHER THE LD.CIT(APPEALS) DIRECTED THE ASSES SING OFFICER TO RESTRICT THE DISALLOWANCE TO 20% OF THE DIVIDEND INCOME AS PER THE ASSESSMENT ORDER PASSED. THE REL EVANT FINDINGS OF THE LD.CIT(APPEALS) AS PER PARA 6.4 OF THE ORDER ARE AS UNDER: 6.4 THEREFORE, IN VIEW OF THE FACTS OF THE CASE F OR THE YEAR UNDER CONSIDERATION AND THE JUDICIAL PRONOUNCEMENT OF HON'BLE JURISDICTIONAL HIGH COURT, I FIND THAT THE DISALLOWAN CE U/S 14A IS APPLICABLE ON THE CLAIM OF DEDUCTION MADE U/S 80P( 2)(D) OF 5 THE ACT. IN THIS REGARD, THE AO IS DIRECTED TO COMPUTE THE DISALLOWANCE AS PER PRESCRIBED METHODOLOGY UNDER RU LE 8D. FURTHER, CONSIDERING THE APPELLANT APPEALED BEFORE HON'BLE ITAT FOR RELIEF AND NOT TO PUT THE APPELLANT AT ANY DISA DVANTAGEOUS POSITION, THE AO IS DIRECTED TO RESTRICT THE DISALL OWANCE OF THE AMOUNT COMPUTED AS PER RULE 8D OR THE ESTIMATED DIS ALLOWANCE @ 20% AS PER ASSESSMENT ORDER, WHICHEVER IS LOWER. TH US, THE GROUND OF APPEAL IS PARTLY ALLOWED. 5. AGGRIEVED BY THE RESTRICTION OF DEDUCTION TO TH E LOWER OF 20% OF THE DIVIDEND INCOME AND THE AMOUNT AS CALCULATED AS PER SECTION 14A READ WITH RULE 8D, TH E REVENUE HAS NOW COME UP IN APPEAL BEFORE US. DURIN G THE COURSE OF HEARING BEFORE US, THE LD. DR RELIED UPON THE ORDER OF THE ASSESSING OFFICER PASSED WHILE GIVING EFFECT TO THE CIT(APPEALS)S ORDER, WHILE THE LD. COUNSEL FOR ASSESSEE RELIED UPON THE ORDER OF THE LD.CIT(APPEALS) AND ST ATED THAT THE LD.CIT(APPEALS) HAD RIGHTLY RESTRICTED THE DISA LLOWANCE TO 20% OF THE INTEREST AND DIVIDEND INCOME EARNED A S COMPUTED BY THE ASSESSING OFFICER IN HIS ORDER PASS ED DATED 11.8.2011. 6. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTI ES AND GONE THROUGH THE ORDERS AND DOCUMENTS PLACED BE FORE IN CONSIDERABLE DETAIL. THE ISSUE BEFORE US RELATE S TO DETERMINATION OF THE QUANTUM OF EXPENDITURE INCURRE D FOR EARNING INTEREST/DIVIDEND INCOME BY THE ASSESSEE SO CIETY FROM OTHER COOPERATIVE SOCIETIES AND THE CONSEQUENT REDUCTION OF THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 80P(2)(D) OF THE ACT, WHICH WAS ORIGINALLY CLAIMED BY THE 6 ASSESSEE ON THE GROSS AMOUNT OF INTEREST AND DIVIDE ND RECEIVED. 7. IN THE FIRST ROUND, THE ASSESSING OFFICER CALCULATED THE SAID EXPENSE BY ALLOCATING THE TOTAL EXPENSE IN THE RATIO OF PROFIT EARNED IN VARIOUS ACTIVITIES CARRIED OUT BY THE ASSESSEE WHICH WAS REJECTED BY THE I.T.A.T. AND SENT BACK TO THE ASSESSING OFFICER FOR RE-CALCULATION. IN THE SECOND ROUND, THE ASSESSING OFFICER CALCULATED THE SAME BY ESTIMATING IT AT 20% OF THE GROSS AMOUNT OF DIVIDEN D AND INTEREST INCOME EARNED. THIS WAS REJECTED BY THE LD.CIT(APPEALS) BY HOLDING AT PARA 7 TO 7.1 OF THE SAID ORDER AS UNDER: 7. THE FACTS OF THE CASE AS WELL AS THE SUBMISSIONS OF THE APPELLANT HAVE BEEN CONSIDERED BY THE UNDERSIGNED. T HE APPELLANT IS IN SECOND ROUND OF APPEAL. THE APPELLA NT RECEIVED INCOME FROM DIVIDENDS WHICH IS EXEMPT FROM TAX. NO EXPENSES WERE CLAIMED AGAINST THIS INCOME. THE EXPE NSES INCURRED BY THE APPELLANT ON EARNING DIVIDEND AND : INTEREST INCOME HAVE BEEN ESTIMATED BY THE LD. AO AT 20% OF T HE GROSS DIVIDEND AND INCOME RECEIVED ON THE BASIS OF OR DER OF HIS PREDECESSOR IN PRECEDING A.Y. 2004-05 AND 2005-0 6, THE LD. AO HAS NOT GIVEN ANY BASIS FOR HIS ESTIMATE OF E XPENSES AT 20%. THE APPELLANT HAS RECEIVED INCOME FROM DIVIDEND WHI CH FALLS UNDER THE HEAD 'OTHER SOURCES' U/S 56 OF THE IT. ACT. THE DED UCTIONS ARE ALLOWABLE AGAINST INCOME CHARGEABLE UNDER THE HEAD 'INCOME FROM OTHER SOURCES' U/S 57 WHICH READS AS UNDER :- '57 -- THE INCOME CHARGEABLE UNDER THE HEA D 'INCOME FROM OTHER SOURCES' SHALL BE COMPUTED AFTER MAKING THE F OLLOWING DEDUCTIONS, NAMELY:- (I) IN THE CASE OF DIVIDENDS, OTHER THAN DIVID ENDS REFERRED TO IN SECTION 115-O, OR INTEREST ON SECURITIES, ANY REASO NABLE SUM PAID BY WAY OF COMMISSION OR REMUNERATION TO A BAN KER OR ANY OTHER PERSON FOR THE PURPOSE OF REALISING SUCH DI VIDEND OR INTEREST ON BEHALF OF THE ASSESSEE; (IA) IN THE CASE OF INCOME OF THE NATURE REFERRED TO IN SUB-CLAUSE (X) OF CLAUSE (24) OF SEC TION 2 WHICH IS CHARGEABLE TO INCOME-TAX UNDER THE HEAD INCOME FRO M OTHER SOURCES', DEDUCTIONS, SO FAR AS MAY BE, IN ACCORDAN CE WITH THE PROVISIONS OF CLAUSE (VA) OF SUB-SECTION (1) OF SEC TION 36; 7 (II) IN THE CASE OF INCOME OF THE NATURE REFERRED TO IN CLAUSES (II) AND (III) OF SUB-SECTION (2) OF SECTION 56, DEDUC TIONS, SO FAR AS MAY BE, IN ACCORDANCE WITH THE PROVISIONS OF SUB-CLA USE (II) OF CLAUSE (A) AND CLAUSE (C) OF SECTION 30, SECTION 3 1 AND SUB- SECTIONS (1) AND (2) OF SECTION 32 AND SUBJECT TO THE PROVISIONS OF SECTION 38; (IIA) IN THE CASE OF INCOME IN THE NATURE OF FAMILY PENSION, A DEDUCTION OF A SUM EQUAL TO THIRTY-THREE AND ONE-THI RD PER CENT OF SUCH INCOME OR FIFTEEN THOUSAND RUPEES, WHI CHEVER IS LESS. EXPLANATION.- FOR THE PURPOSES OF THIS CLAUSE, 'FAMI LY PENSION' MEANS A REGULAR MONTHLY AMOUNT PAYABLE BY THE EMPLOY ER TO A PERSON BELONGING TO THE FAMILY OF AN EMPLOYEE IN TH E EVENT OF HIS DEATH; (III) ANY OTHER EXPENDITURE (NOT BEING IN THE NATUR E OF CAPITAL EXPENDITURE) LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF MAKING OR EARNING SUCH INCOME.' THEREFORE THE LD. AO IS DIRECTED TO COMPUTE THE DEDUCTIONS IN VIEW OF THE EXPENSES INCURRED BY THE APPELLANT BY WAY OF COMMISSION/REMUNERATION PAID TO A BANKER OR ANY OTHER PERSON FOR REALIZING SUCH DIVID END AND EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY FOR EARNING SUCH INCOME. AS A RESULT, THESE GROUNDS OF APPEAL ARE PARTLY ALLOWED 8. ON GOING THROUGH THE ABOVE ORDER OF THE LD.CIT(APPEALS), WE FIND THAT THE LD.CIT(APPEALS) HAD DIRECTED THE ASSESSING OFFICER TO COMPUTE THE DEDUC TION ALLOWABLE U/S 80P(2)(D),IN VIEW OF THE EXPENSES INC URRED FOR EARNING THE DIVIDEND AND INTEREST INCOME, BY CONSID ERING ONLY THOSE EXPENSES WHICH WERE INCURRED WHOLLY AND EXCLUSIVELY FOR EARNING SUCH INCOME. THE LD.CIT(AP PEALS) HAD HELD THAT THE DIVIDEND INCOME EARNED BY THE ASS ESSEE AGAINST DEDUCTION U/S 80P(2)(D) OF THE ACT HAD BEEN CLAIMED BY THE ASSESSEE WAS ASSESSABLE UNDER THE HEAD INCO ME FROM OTHER SOURCES U/S 56 OF THE ACT, AS A CONSEQU ENCE THEREOF, THE LD.CIT(APPEALS) HELD THAT THE DEDUCTIO NS WHICH ARE ALLOWABLE AGAINST THE SAID INCOME WOULD BE GOVE RNED BY 8 THE PROVISIONS OF SECTION 57 OF THE ACT WHICH CATEG ORICALLY STATES THAT THE EXPENDITURE LAID OUT OR EXTENDED WH OLLY AND EXCLUSIVELY FOR THE PURPOSE OF MAKING AND EARNING S UCH INCOME ARE TO BE DEDUCTED FROM THE SAME. IN VIEW O F THE SAME, THE LD.CIT(APPEALS) HELD THAT THE EXPENSES TO BE REDUCED FROM THE DIVIDEND AND INTEREST INCOME EARNE D BY THE ASSESSEE WAS TO BE CALCULATED AS PER THE PROVIS IONS OF SECTION 57 OF THE ACT. 9. THE ASSESSING OFFICER WHILE GIVING APPEAL EFFEC T TO THE ORDER OF THE LD.CIT(APPEALS) CALCULATED THE SAM E BY APPLYING SECTION 14A READ WITH RULE 8D. WHEN THE M ATTER CAME UP BEFORE THE TRIBUNAL IN THE SECOND ROUND, TH E TRIBUNAL VIDE ITS ORDER IN ITA NO.791/CHD/2013 DATE D 16/06/2015 REJECTED THE APPLICATION OF SECTION 14A READ WITH RULE 8D AND CATEGORICALLY STATED THAT IT WAS A CONTRAVENTION OF THE DIRECTIONS GIVEN BY THE CIT(AP PEALS). THE RELEVANT FINDINGS OF THE I.T.A.T. AT PARA 8 OF THE ORDER ARE AS UNDER: 8. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THE ORDER OF THE LEARNED CIT (APPEALS) CANNOT BE SUSTAINED IN LAW. THE LEARNED CIT (APPEALS) EARLIER DIRECTED THE ASSESSING OFFICER TO COMPUTE THE DEDUCTION IN VIEW OF THE EXPENSES INCURRED BY WAY OF COMMISSION/REMUNERATION PAID TO BANKERS OR TO ANY OTHER PERSON FOR REALIZING SUCH DIVIDEND INCOME. APPARENTLY, THE LEARNED CIT (APPEALS) HAS NOT ISSUED ANY DIRECTION TO THE ASSESSING OFFICER FOR APPLYING THE PROVISIONS OF SECTION 14A OF THE ACT. THEREFORE, IF THE ASSESSING OFFICER HAS APPLIED THE PROVISIONS OF SECTION 14A OF THE ACT AS PER THE CONTENTION OF THE LEARNED COUNSEL FOR ASSESSEE, IT SHOULD BE CONSIDERED AS APPEAL EFFECT GIVEN IN DEFIANCE OF THE ORDER OF THE LEARNED CIT (APPEALS). THUS THE APPEAL EFFECT ORDER PASSED BY THE ASSESSING OFFICER IS 9 APPEALABLE AND APPEAL LIES AGAINST HIS ORDER BEFORE THE LEARNED CIT (APPEALS). THE DECISIONS RELIED UPON BY THE LEARNED COUNSEL FOR ASSESSEE IN THE CASE OF BAKELITE HYLAM LTD. (SUPRA) AND IN THE CASE OF CALTEX OIL REFINING (INDIA) LTD. (SUPRA) CLEARLY SUPPORT THE CONTENTION OF LEARNED COUNSEL FOR ASSESSEE. THE LEARNED CIT (APPEALS) WAS, THEREFORE, NOT JUSTIFIED IN HOLDING THAT NO APPEAL LIES AGAINST THE APPEAL EFFECT ORDER PASSED WRONGLY UNDER SECTION 250/154 OF THE ACT BY THE ASSESSING OFFICER. THE APPEAL EFFECT ORDER PASSED BY THE ASSESSING OFFICER IN CONTRAVENTION OF THE ORDER OF THE LEARNED CIT (APPEALS) IS APPEALABLE ORDER AND APPEAL LIES AGAINST THE ORDER OF THE ASSESSING OFFICER BEFORE THE LEARNED CIT (APPEALS). THE ORDER OF THE LEARNED CIT (APPEALS) IS THUS SET ASIDE AND CONSEQUENTLY THE MATTER IN ISSUE IS RESTORED TO THE FILE OF THE LEARNED CIT (APPEALS), PANCHKULA WITH DIRECTION TO REDECIDE THE APPEAL OF THE ASSESSEE ON MERITS BY GIVING REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 10. THE MATTER WAS THEREAFTER RESTORED TO THE CIT(APPEALS). THE CIT(APPEALS) IN THE THIRD ROUND UPHELD THE APPLICABILITY OF RULE 8D BUT RESTRICTED THE QUA NTUM OF EXPENDITURE TO 20% OF THE GROSS RECEIPTS PERTAINING TO INTEREST AND DIVIDEND. THE REVENUE NOW WANTS THE QUANTUM OF EXPENDITURE TO BE COMPUTED AS PER SECTIO N 14A READ WITH RULE 8D WHICH WAS DONE BY THE ASSESSING O FFICER WHILE GIVING APPEAL EFFECT. 11. IT IS ABUNDANTLY CLEAR FROM THE SEQUENCE AND DETAILS OF EVENTS NARRATED ABOVE, THAT THE APPLICAB ILITY OF SECTION 14A READ WITH RULE 8D WAS CATEGORICALLY REJ ECTED BY THE I.T.A.T. IN THEIR ORDER PASSED IN ITA NO.791/CH D/2013 DT.16/06/2015,WHEREIN THEY HAD CATEGORICALLY STAT ED THAT THE APPLICATION OF THE PROVISIONS OF SECTION 14A W AS IN DEFIANCE OF THE ORDER OF THE LD.CIT(APPEALS). SINC E THIS IS 10 THE ONLY PLEA OF THE REVENUE BEFORE US, WE REJECT T HE SAME AND DISMISS THE APPEAL OF THE REVENUE. GROUND OF A PPEAL RAISED BY THE REVENUE IS, THEREFORE, REJECTED. 12. HOWEVER WE FIND THAT THE ORIGINAL DIRECTION OF THE LD.CIT(A) TO COMPUTE THE EXPENSES AS PER THE PROVIS IONS OF SECTION 57 STILL REMAIN UNCOMPLIED WITH.IN VIEW THE REOF WE DIRECT THE AO TO PASS AN ORDER AFRESH ,COMPLYING WI TH THE AFORESAID DIRECTIONS OF THE LD.CIT(A). IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 1 ST AUGUST, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH