Dy. Commissioner of Income Tax, Circle-1(2), Hyderabad V. BNR Udyog Limited, , Hyderabad

ITA 1110/Hyd/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2284 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-11-2017
• Assessment Year: 2013-2014
• Appeal Filed On: 29-06-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S PRAVEENA
• Assessee Lawyers: A V RAGHURAM
• Keywords: Opportunity of being heard; Earning of tax free income; Additional evidence
• Section: 143(3); 142(1); 14A; 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 1110/HYD/2017 AND C.O. NO. 22/HYD/2017 ASSESSMENT YEAR: 2013-14 DY. COMMISSIONER OF INCOME-TAX, CIRCLE 1(2), HYDERABAD. VS. BNR UDYOG LTD., HYDERABAD. PAN AAACB 9756 H APPELLANT RESPONDENT/CROSS OBJECTOR REVENUE BY: SMT. S. PRAVEENA ASSESSEE BY: SHRI A.V. RAGHURAM DATE OF HEARING: 23/11/2017 DATE OF PRONOUNCEMENT: 13 /12/2017 O R D E R PER S. RIFAUR RAHMAN, AM: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF CIT(A) - 1, HYDERABAD DATED 09/03/2017 RELATES TO T HE AY 2013-14. THE ASSESSEE ALSO FILED C.O. AGAINST THE S AID ORDER OF THE CIT(A). 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE COMPANY IS A LISTED PUBLIC LIMITED COMPANY ENGAGED IN THE BUSINESS OF PROVIDING INFORMATION TECHNOLOGY AND RE LATED SERVICES, MEDICAL TRANSCRIPTION, E-GOVERNANCE PROJE CT, TRADING IN SHARES AND COMMODITIES AND INVESTMENTS. THE ASSE SSEE COMPANY FILED ITS RETURN OF INCOME FOR THE AY 2013- 14 ON 05/09/2013 DECLARING TOTAL INCOME OF RS. 67,79,590/ -. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTIC ES WERE ISSUED U/S 143(2) AND 142(1) OF THE ACT. THE ASSESS MENT WAS I.T.A. NO. 1110/HYD/2017 & C.O. NO. 22/H/17 BNR UDYOG LTD. 2 COMPLETED ON 04/01/2016 U/S 143(3) BY DETERMINING T OTAL INCOME AT RS. 1,20,52,407 BY MAKING VARIOUS ADDITIO NS. 3. ON APPEAL BEFORE THE CIT(A), THE CIT(A) CONFIRME D SOME ADDITIONS AND DELETED SOME ADDITIONS IN WHICH HE DE LETED THE DISALLOWANCE OF RS. 50,80,764/- U/S 40(A)(IA) OF TH E ACT, WHICH IS THE SUBJECT MATTER OF THE PRESENT APPEAL. 4. BRIEFLY THE FACTS ARE THAT DURING THE ASSESSMEN T PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAD D EBITED TO P&L A/C RS. 66,12,186/- AS BUSINESS SUPPORT CHARGES . THE SAME BEING ASKED TO EXPLAIN, THE ASSESSEE MENTIONED THAT THESE WERE SUBCONTRACT PAYMENTS. THE ASSESSEE FURNI SHED A STATEMENT OF TDS DEDUCTED AND PAID. THE AO NOTICED FROM THE SAID STATEMENT THAT TDS HAD BEEN DEDUCTED ON SUBCON TRACT PAYMENT OF ONLY RS. 15,31,422/- AS AGAINST THE CLAI MED EXPENDITURE OF RS. 66,12,186/-. HE OBSERVED THAT TH E ASSESSEE HAD FAILED TO SUBSTANTIATE THE SAME AND NOT PROVIDE D COMPLETE DETAILS OF BUSINESS SUPPORT CHARGES. THUS, THE AO C ONCLUDED THAT THE ASSESSEE HAD FAILED TO DEDUCT TDS U/S 194C ON SUBCONTRACT PAYMENTS OF RS. 50,80,764/- AND HENCE DISALLOWED THE SAME U/S 40(A)(IA) OF THE ACT. 5. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE CIT(A) AND SUBMITTED THAT IT WAS ASSOCIATED WITH THE GOVERNMENT FOR THE PURPOSE OF SOCIO ECONOM IC AND CASTE CENSUS (SECC) AT VARIOUS PLACES IN SURAT DIST RICT, FOR WHICH SERVICES OF NUMBER OF PERSONS WERE AVAILED BY THE ASSESSEE. IT WAS SUBMITTED THAT THESE ARE THE TECHN ICAL PEOPLE INDIVIDUALLY CONTRACTED BY THE COMPANY AND S ERVICES PROCURED. AS SUCH THERE IS NO SUB-CONTRACT GIVEN TO ANY PERSON AS WRITTEN BY ASSESSING OFFICER IN ASSESSMEN T ORDER. THE ASSESSEE SUBMITTED THAT DURING THE COURSE OF TH E I.T.A. NO. 1110/HYD/2017 & C.O. NO. 22/H/17 BNR UDYOG LTD. 3 ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS A SKED TO PROVIDE DETAILS OF TDS PAID DURING THE YEAR AND THE Y HAVE FURNISHED THE DETAILS OF TDS PAID. FROM THE DETAILS , ASSESSING OFFICER TOOK OUT AMOUNT ON WHICH TDS MADE AS RS.15, 31,422/- TOWARDS CONTRACT PAYMENTS AND ASSUMED THE SAME TO B E TOWARDS PAYMENTS MADE FOR SECC PROJECTS. THE ASSESS EE SUBMITTED THAT DURING THE YEAR IT HAD MADE AN EXPEN SES OF RS. 66,12,186/- TOWARDS THE AMOUNT PAID FOR SECC PROJEC T AND THE SAME WAS REFLECTED UNDER BUSINESS SUPPORT CHARGES I N THE PROFIT AND LOSS ACCOUNT. AS THE INDIVIDUAL PAYMENTS WERE BELOW THE EXEMPTION LIMIT FOR THE PURPOSE OF TDS, H ENCE TDS NOT MADE. FURTHER, IT WAS SUBMITTED THAT THE ASSESS EES ACCOUNTS ARE AUDITED U/S. 44AB AND THE AUDITORS HAV E ALSO NOT QUALIFIED FOR NON-COMPLIANCE RELATING TO TDS. 6. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE CIT(A) OBSERVED THAT THERE IS A FORCE IN THE SUBMIS SIONS OF THE ASSESSEE AND EVIDENCE SUBMITTED BY ASSESSEE HAVE DE TAILS WHICH SHOW PAYMENT TO INDIVIDUALS HAD BEEN LESS THA N TAXABLE LIMIT. HE FURTHER OBSERVED THAT THE PAYMENTS MADE T O EMPLOYEES AND THE SAME WERE PAID DURING THE FY 2012 -13. IN VIEW OF THE ABOVE OBSERVATIONS AND RELYING ON THE D ECISION IN THE CASE OF M/S MERILYN SHIPPING & TRANSPORT, THE C IT(A) DELETED THE ADDITION MADE ON THIS COUNT. 7. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF A PPEAL: (L)THE LD. CIT(APPEALS) ERRED IN ADMITTING ADDITIO NAL EVIDENCE AND DELETING THE ADDITION OF RS. 50,80,764 /- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF BUSINESS SUPPORT CHARGES U/S. 40(A) (IA) FOR NON-COMPLIANCE WITH TDS PROVISIONS. (2)THE LD. CIT(A) OUGHT TO HAVE PROVIDED AN OPPORTU NITY TO THE ASSESSING OFFICER AS MANDATED UNDER RULE 46A OF I.T. RULES BEFORE ADMITTING ADDITIONAL EVIDENCE IN THE I.T.A. NO. 1110/HYD/2017 & C.O. NO. 22/H/17 BNR UDYOG LTD. 4 FORM OF SALARY PAYMENT REGISTER AND HOLDING THAT TH E PAYMENTS ARE TO THE EMPLOYEES AND THE AMOUNT PAID I N EACH CASE IS MUCH BELOW THE EXEMPTION LIMIT FOR TDS . (3)THE LD. CIT(A) ALSO ERRED IN LAW IN HOLDING THAT THE PAYMENTS TOWARDS BUSINESS SUPPORT CHARGES WERE AIREADY MADE DURING THE YEAR AND IN VIEW OF THE DEC ISION OF THE ITAT SPECIAL BENCH IN THE CASE OF M/S. MERIL YN SHIPPING & TRANSPORTS VS. ACIT, PROVISIONS OF SECTI ON 40(A)(IA) ARE NOT APPLICABLE TO SUCH PAYMENTS MADE. (4)THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE LEG AL POSITION THAT THE WORD 'PAYABLE' OCCURRING IN SECTI ON 40(A)(IA) NOT ONLY COVERS CASES WHERE AMOUNT IS YET TO BE PAID BUT ALSO THOSE CASES WHERE AMOUNT HAS ACTUA LLY BEEN PAID AS ON 31' MARCH OF THE RELEVANT PREVIOUS YEAR AS OBSERVED BY APEX COURT IN THE CASE OF M/S PALAM GAS SERVICES VS. CIT (394 ITR 300). (5)THE APPELLANT CRAVES LEAVE TO ADD, DELETE, SUBST ITUTE AND AMEND ANY GROUND OF APPEAL BEFORE AND/OR AT THE TIME OF HEARING OF THE APPEAL. (6)FOR THESE AND OTHER GROUNDS THAT MAY BE URGED BEFORE/AT THE TIME OF HEARING OF THE APPEAL, IT IS PRAYED THAT THE ADDITION OF RS. 50,80,764/- MADE BY THE ASSESSING OFFICER U/S 40(A)(IA) BE RESTORED. 8. LD. DR SUBMITTED THAT LD. CIT(A) HAS ACCEPTED TH E ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE WITHO UT GIVING OPPORTUNITY TO THE AO BEFORE ACCEPTING THE SAME AS PER RULE 46A. FURTHER, SHE SUBMITTED THAT LD. CIT(A) HAS ACC EPTED THE CONTENTION OF THE ASSESSEE BY RELYING ON THE MERILY N SHIPPING (SUPRA). CONSIDERING THE LATEST DEVELOPMENT THAT PA ID/PAYABLE ISSUE IS PUT TO REST BY THE HONBLE SUPREME COURT, SHE SUBMITTED THAT THIS MAY BE REMITTED BACK TO THE FIL E OF AO FOR FURTHER VERIFICATION. 9. LD. AR RELIED ON THE ORDER OF CIT(A) AND SUBMITT ED THAT THE PAYMENTS ARE RELATING TO THE SALARY FOR THE SER VICES RENDERED BY THE INDIVIDUALS FOR THE PROJECT SECC. I.T.A. NO. 1110/HYD/2017 & C.O. NO. 22/H/17 BNR UDYOG LTD. 5 10. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL FACTS ON RECORD. LD. CIT(A) HAS VERIFIED T HE SALARY REGISTER SUBMITTED BY THE ASSESSEE IN THE FORM OF L ETTER, HOWEVER FROM THE ORDER, IT IS NOT CLEAR WHETHER IT IS VERIFIED THOROUGHLY WITH THE DATA SHEETS, PROGRAMME SHEETS A ND AGREEMENTS WITH THE EMPLOYEES, IF ANY. LD. AR HAS C ONFIRMED THAT THIS INFORMATION IS AVAILABLE WITH THE ASSESSE E TO PROVE THE GENUINENESS OF THE TRANSACTION. LD. CIT(A) DELE TED THE ADDITION RELYING ON THE CASE OF MERILYN SHIPPING (S UPRA). HOWEVER, THIS DECISION WAS REVERSED BY THE HONBLE SUPREME COURT AND FURTHER, THIS TRANSACTION NEEDS VERIFICAT ION AT THE AO LEVEL, ACCORDINGLY, THIS ISSUE IS REMITTED TO THE F ILE OF THE AO TO VERIFY THE GENUINENESS OF THE TRANSACTION AND ALLOW THE SAME AS PER THE PROVISIONS OF LAW. ASSESSEE MAY BE GIVEN OPPORTUNITY OF BEING HEARD. ACCORDINGLY, GROUNDS RA ISED BY THE REVENUE ON THIS ARE ALLOWED FOR STATISTICAL PURPOSE S. C.O NO. 22/HYD/17 BY ASSESSEE 11. IN THE C.O. THE ASSESSEE HAS RAISED THE FOLLOWI NG OBJECTIONS: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME -TAX (APPEALS) IS ERRONEOUS BOTH IN FACTS AND LAW TO THE EXTENT IT IS PREJUDICIAL TO THE ASSESSEE. 2. THE LEARNED CIT(A) HAVING GIVEN A FINDING OF FAC T THAT THE SUBMISSIONS ON DISALLOWANCE U/S.40(A)(IA) ARE T O BE ACCEPTED THAT THE PAYMENTS ARE LESS THAN TAXABLE LI MIT, ERRED IN RELYING ON THE DECISION OF THE SPECIAL BEN CH IN THE CASE OF MERILYN SHIPPING & TRANSPORT THOUGH THE RE IS NO SUCH REQUIREMENT OF RELYING ON ANY DECISION AS T HE PROVISIONS OF SEC.40(A)(IA) ITSELF ARE NOT ATTRACTE D IN THE ABSENCE OF LIABILITY TO MAKE TDS. 3. THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE MADE U/S.14A STATING THAT THE AO HAS TAKEN A JUDICIOUS VIEW WITHOUT APPRECIATING THE FAC TS THAT THE CLAIM OF THE ASSESSEE IS THAT THE EXPENSES DOES NOT I.T.A. NO. 1110/HYD/2017 & C.O. NO. 22/H/17 BNR UDYOG LTD. 6 RELATE TO EXEMPT INVESTMENTS BUT FOR CARRYING ON BUSINESS. 4. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME O F HEARING. 12. GROUND NOS. 1 & 4 ARE GENERAL IN NATURE, HENCE, NEED NO ADJUDICATION. 13. GROUND NO. 2 HAS BEEN DECIDED BY US IN REVENUE S APPEAL, THEREFORE, THIS GROUND BECOMES INFRUCTUOUS AND THE SAME IS DISMISSED AS INFRUCTUOUS. 14. AS REGARDS GROUND NO. 3 RELATING TO DISALLOWANC E U/S 14A OF THE ACT, D URING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED FROM THE BALANCE SHEET TH AT THE ASSESSEE HAS MADE INVESTMENTS TO THE TUNE OF RS.L,55,26,107/- IN THE EQUITIES OF CERTAIN COMPANI ES. THE DIVIDEND FROM WHICH HAS BEEN CLAIMED EXEMPT U/S L0( 34), IN ITS COMPUTATION OF INCOME. THE ASSESSEE HAD INCURRED EXPENDITURE OF RS.3,73,231/- IN THE FORM OF INTERES T PAYMENTS AND DIRECT EXPENDITURE ON THESE INVESTMENTS IN THE FORM OF SHARE TRANSFER EXPENSES (RS. 41,029/-) & DEMAT EXP ENSES (RS.1,21,026/-). THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS SUO-MOTO, MADE A DISALLOWANCE OF RS.1, 66,096/- U/S.14A. SINCE THE EXPENDITURE CLAIMED WAS INAPPROP RIATE, THE ASSESSING OFFICER CALCULATED DISALLOWANCE U/S.14A B Y APPLYING RULE 8D OF RS.3,20,549/- AND ADDED THE BALANCE OF RS.1,54,453/- (RS.3,20,549 - RS.1,66,096) U/S.14A T O THE INCOME RETURNED. 15. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEF ORE THE CIT(A) AND SUBMITTED THAT COMPANY IS DEALING IN THE TRADING OF SHARES/DERIVATIVES/COMMODITIES ETC. IT HAS GOT INVE STMENT (TRADE INVESTMENTS) IN THE FORM OF SHARES TO THE TU NE OF I.T.A. NO. 1110/HYD/2017 & C.O. NO. 22/H/17 BNR UDYOG LTD. 7 RS.1,55,26,107/-. THE PROFIT/LOSS ON THE TRADING OF THE SHARES/DERIVATIVES/COMMODITIES IS CONSIDERED AS INC OME FROM BUSINESS AND COMPANY IS NOT AVAILING ANY EXEMPTION ON PROFIT/LOSS ON SALE OF THESE OF SHARES/DERIVATIVES/ COMMODITIES. DURING THE YEAR, THE COMPANY HAS EARNED DIVIDEND ON SHARES AMOUNTING TO RS.89,543/-. AS THE SAME IS EXEMPTED U NDER SECTION 10(34), THE COMPANY HAS CLAIMED THE EXEMPTI ON. CONSERVATIVELY, THOUGH NOT REQUIRED, COMPANY ON ITS OWN, CALCULATED THE DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D AND ACCORDINGLY DISALLOWED A SUM OF RS.L,66,096/ - WHILE COMPUTING THE TOTAL INCOME. 16. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESS EE, THE CIT(A) ELABORATELY DISCUSSED THE ISSUE AT LENGTH WI TH VARIOUS CASE LAW AND HELD THAT THE ASSESSEE HAS WORKED OUT DISALLOWANCES OF RS. 1,66,096/- U/S 14A RELATING TO DIRECT EXPENDITURES OF SHARE TRANSFER AND PAYMENT TO M/S K ARVY COMPUTER SHARE PVT. LTD. HE FURTHER HELD THAT THE AO HAS TAKEN MORE JUDICIOUS VIEW BY APPLYING RULE 8 D IN CALCULATING THE EXPENDITURE RELATING TO THIS INVEST MENT AND APPROVED THE VIEW OF THE AO THAT DIRECT AND INDIREC T EXPENDITURE BOTH SHOULD BE DISALLOWED U/S 14A. HE, ACCORDINGLY, UPHELD THE ACTION OF THE AO. 17. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 18. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL FACTS ON RECORD. THE ASSESSEE HAS NOT SUBM ITTED ANY COMPUTATION IN SUPPORT OF DISALLOWANCE U/S 14A. HOW EVER, WE FIND THAT SIMILAR ISSUE CAME UP FOR CONSIDERATION B EFORE THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF TR ANSPORT CORPORATION OF INDIA LTD. IN ITA NO. 117/HYD/2016 V IDE ORDER I.T.A. NO. 1110/HYD/2017 & C.O. NO. 22/H/17 BNR UDYOG LTD. 8 DATED 21 ST SEPTEMBER, 2016 WHEREIN THE COORDINATE BENCH HAS HELD AS UNDER: 11.1 WHILE CAREFULLY READING THE RULE 8D(2)(II), T HE FORMULA GIVEN ARE: A X B/C WHERE A = AMOUNT OF EXPENDITURE BY WAY OF INTEREST OTHER THAN THE AMOUNT OF INTEREST INCLUDED IN CLAUSE (I) INCURRED DURING THE PREVIOUS YEAR: B = THE AVERAGE OF VALUE OF INVESTMENT, INCOME FROM WHICH DOES NOT OR SHALL NOT FORM PART OF THE TOTAL INCOME, AS APPEARING IN THE BALANCE SHEET OF THE ASSESSEE, ON THE FIRST DAY AND THE LAST DAY OF THE PREVIOUS YEAR; C = THE AVERAGE OF TOTAL ASSETS AS APPEARING IN THE BALANCE SHEET OF THE ASSESSEE, ON THE FIRST DAY AND THE LAST DAY OF THE PREVIOUS YEAR; IN PARTICULAR, THE NOTES FOR B CLEARLY STATES THA T THE AVERAGE VALUE OF INVESTMENT, INCOME FROM WHICH DOES NOT OR SHALL NOT FORM PART OF THE TOTAL INCOME. IT IS C LEAR THAT WE HAVE TO INCLUDE THOSE INVESTMENTS WHICH HAS GENERATED INCOME AND EXCLUDE THOSE INVESTMENTS, WHI CH HAVE NOT GENERATED INCOME. IN THE PRESENT CASE, AO HAD TAKEN THE TOTAL INVESTMENT INSTEAD OF THOSE INVESTM ENTS, WHICH HAVE GENERATED INCOME. ACCORDINGLY, WE DIRECT THE AO TO CALCULATE THE DISALLOWANCE OF INTEREST AS BEL OW ( AS PER RULE 8D): INTEREST X INVESTMENT( WHICH GENERATED INCOME) AVERAGE TOTAL ASSETS THE MAIN REASON IS THAT AS PER SECTION 14A, NO DEDU CTION SHALL BE ALLOWED IN RESPECT OF EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO INCOME, WHICH IS EXEMPT FRO M TAX. THE RELEVANCE IS THE EXPENDITURE IN RELATION TO INC OME. THE QUANTIFICATION HAS TO BE UNDERTAKEN IN RELATION TO THE EXEMPT INCOME. THE INVESTMENT WHICH HAS NOT GENERAT ED EXEMPT INCOME SHOULD BE EXCLUDED FROM THE CALCULATI ON OF RATIO TO DETERMINE THE DISALLOWANCE. 11.2 SIMILARLY, FOR THE ADMINISTRATIVE EXPENSES, 0. 5% OF AVERAGE INVESTMENTS FROM WHICH THE EXEMPT INCOME IS RECEIVED SHOULD BE CONSIDERED INSTEAD OF AVERAGE OF THE TOTAL INVESTMENTS. 11.3 CONSIDERING THE ABOVE DISCUSSION, WE DIRECT TH E AO TO RECALCULATE THE DISALLOWANCE AS PER RULE 8D A S PER I.T.A. NO. 1110/HYD/2017 & C.O. NO. 22/H/17 BNR UDYOG LTD. 9 THE ABOVE GUIDANCE. ACCORDINGLY, GROUND RAISED BY ASSESSEE IS ALLOWED. AS THE ISSUE UNDER CONSIDERATION IS MATERIALLY IDEN TICAL TO THAT OF THE SAID CASE, FOLLOWING THE CONCLUSIONS DRAWN T HEREIN WE DIRECT THE AO TO RECALCULATE THE DISALLOWANCE AS PE R RULE 8D AS PER THE GUIDELINES GIVEN ABOVE IN THE CASE OF TRAN SPORT CORPORATION OF INDIA AND CALCULATE THE DISALLOWANCE OF EXPENDITURE UNDER RULE 8D(2)(II) & (III) TAKING THE AVERAGE INVESTMENT FROM WHICH THE EXEMPT INCOME IS RECEIVED . BY CALCULATING AS PER THE ABOVE DIRECTION, IN CASE, TH E DISALLOWANCE ARRIVED U/S 14A IS LESS THAN THE DISAL LOWANCE MADE BY ASSESSEE, THE DISALLOWANCE MADE BY THE ASSE SSEE MAY BE SUSTAINED. ACCORDINGLY, GROUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 19. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES AND THE C.O. FILED BY THE ASSE SSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 13 TH DECEMBER, 2017 SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER SD/- (S. RIFAUR RAHMAN) ACCOUNTANT MEMBER HYDERABAD, DATED 13 TH DECEMBER, 2017 KV I.T.A. NO. 1110/HYD/2017 & C.O. NO. 22/H/17 BNR UDYOG LTD. 10 COPY FORWARDED TO: 1. DCIT, CIRCLE 1(2), B-BLOCK, 7 TH FLOOR, IT TOWERS, AC GUARDS, MASAB TANK, HYDERABAD. 2. BNR UDYOG LTD., 6-3-650, 218, 2 ND FLOOR, MAHESWARI CHAMBES, SOMAJIGUDA, HYD. 3. CIT(A) - 1, HYDERABAD 4 PR. CIT - 1, HYDERABAD 5 THE DR, ITAT, HYDERABAD