Maharashtra State Ware Housing Corporation, Pune V. ITO, Pune

ITA 1140/PUN/2012

• Counselvise Citation: 114024514 RSA 2012
• Duration Of Justice: 2 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-02-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 31-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VERMA
• Assessee Lawyers: R G NAHAR
• Keywords: Business income; Earning of tax free income
• Section: 14A; 263; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.1140/PN/2012 (A.Y: 2002-03) MAHARASHTRA STATE WAREHOUSING CORPORATION, 583/B, MARKET YARD, PUNE 411037 PAN: AABCM3988M APPELLANT VS. DY.CIT-I, CIRCLE11(2), PUNE RESPONDENT APPELLANT BY : SHRI R.G. NA HAR RESPONDENT BY : SMT. M.S. VERMA, CIT DATE OF HEARING: 08.08.2014 DATE OF ORDER : 25.08.2014 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER PASSED U/S.263 OF THE I.T. ACT BY COMMISSIONER OF I NCOME TAX-I, PUNE, DATED 26.03.2012 FOR A.Y. 2002-03 ON THE FOLL OWING GROUNDS. 1. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE A ND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT, THE ORDER PASSED BY LEARNED COMMISSIONER OF INCOME TAX U/S.263 IS WITHOUT SATISFYING THE REQUIREMENTS OF T HE SAID SECTION AND WITHOUT PROPERLY RESUMING THE JURISDICT ION OF THE SAID SECTION. THE ORDER PASSED U/S.263 BE HELD TO BE UNWARRANTED, UNJUSTIFIED, AND CONTRARY TO THE PROVI SIONS OF THE ACT. THE ORDER SO PASSED BE CANCELLED. 2. THE APPELLANT PRAYS TO BE ALLOWED TO ADD, AMEND, MODIFY, RECTIFY, DELETE, RAISE ANY GROUNDS OF APPEA L AT THE TIME OF HEARING. 2 ITA NO.1140 OF 12 MAHARASHTRA STATE WAREHOUSING CORPORATION 2. THE ASSESSEE IS A STATE WAREHOUSING CORPORATION. THE BACKGROUND OF THE CASE IS THAT THE ASSESSMENT ORDER U/S.143(3) OF THE ACT WAS ORIGINALLY PASSED ON 31.01.2005 DETE RMINING THE TAXABLE INCOME OF RS.5,90,35,236/- WHEREIN EXEMPTIO N U/S.10(29) OF THE ACT WAS ALLOWED ON INCOME FROM WA REHOUSING & FUMIGATION AMOUNTING TO RS.5,41,41,410/- AND THE RE MAINING BUSINESS INCOME & INCOME FROM OTHER SOURCES WAS BRO UGHT TO TAX. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESS EE PREFERRED AN APPEAL AND THE CIT(A) UPHELD THE COMPUTATION OF BUSINESS INCOME. IN SECOND APPEAL, ITAT, PUNE SET ASIDE THE ASSESSMENT ORDER AND RESTORED IT BACK TO THE ASSESSING OFFICER WITH A DIRECTION TO RE-COMPUTE DENOVO THE INCOME. ACCORDI NGLY, THE ORDER U/S.143(3) R.W.S. 254 OF THE ACT WAS PASSED O N 14.12.2009 DETERMINING TOTAL LOSS AT RS.13,25,00,239/-. IN TH IS ORDER, THE HANDLING CHARGES OF RS.17,30,89,840/- WERE ALLOWED AS EXPENSES AGAINST INCOME FROM TAXABLE ACTIVITIES THOUGH IT PE RTAINED TO BOTH I.E. INCOME FROM EXEMPT ACTIVITY AS WELL AS TAXABLE ACTIVITY. ACCORDING TO THE CIT, AS THE DIRECT EXPENSES ON ACC OUNT OF HANDLING CHARGES PERTAIN TO BOTH EXEMPT AND TAXABLE ACTIVITIES, THE SAID EXPENSES SHOULD HAVE BEEN APPORTIONED AMON GST EXEMPT AND TAXABLE INCOME ON PRO RATA BASIS TO WORK OUT DI RECT EXPENSES RELATED TO EXEMPTED INCOME AS PROVIDED IN RULE 8D(2 )(I) OF INCOME TAX RULES, 1962. 3. AS A RESULT OF THE FAILURE OF THE ASSESSING OFFI CER TO APPORTION THE DIRECT EXPENSE AMONGST EXEMPT AND TAX ABLE INCOME, THEREBY ALLOWING EXCESS EXEMPTION U/S.10(29 ) OF THE ACT, THE ORDER PASSED BY THE ASSESSING OFFICER FOR A.Y. 2002-03 WAS FOUND ERRONEOUS SO AS TO PREJUDICIAL TO THE INTERES TS OF REVENUE. THE ASSESSEE WAS ACCORDINGLY ASKED VIDE NOTICE DATE D 02.02.2011 TO EXPLAIN AS TO WHY A REVISION ORDER U/S.263 OF TH E ACT SHOULD NOT BE PASSED REVISING THE ORDER PASSED BY THE ASSE SSING OFFICER 3 ITA NO.1140 OF 12 MAHARASHTRA STATE WAREHOUSING CORPORATION U/S.143(3) R.W.S. 254 OF THE ACT DATED 14.12.2009 A S DISCUSSED ABOVE. 4. IN RESPONSE TO NOTICE OF HEARING, THE LEARNED AU THORIZED REPRESENTATIVE ON BEHALF OF THE ASSESSEE HAD MADE S UBMISSIONS BEFORE THE CIT, WHICH READ AS UNDER: THE HANDLING CHARGES OF RS.17,30,89,840/- ARE DIRE CTLY RELATED TO THE INCOME FROM TAXABLE ACTIVITY OF RS.18,58,63,814/-. WE ARE ENCLOSING HEREWITH THE C HART SUBMITTED DURING THE COURSE OF FRESH ASSESSMENT PAS SED IN PURSUANCE TO ITATS ORDER. FROM THE PERUSAL OF THI S WORKING IT MAY PLEASE BE OBSERVED THAT THE TAXABLE INCOME OF RS.18,58,63,814/- PERTAINS TO TRANSPORT AND HAND LING CHARGES WHEREAS THE DIRECT EXPENSES INCURRED IN CON NECTION WITH THE SAME UNDER THE HEAD HANDLING CHARGES OF RS.17,30,89,840/- IS HAVING DIRECT NEXUS WITH THE S AME. THE EXPENSES ON HANDLING CHARGES ARE NOT INCURRED O N DERIVING THE TAX FREE INCOME. IT IS THEREFORE CORR ECTLY DEDUCTED FROM THE TAXABLE INCOME ONLY. THERE IS NO INFIRMITY IN THE ORDER OF THE A.O. THE ORDER PASSE D BY THE A.O IS APPARENTLY ON APPLICATION OF MIND AFTER VERI FYING THE REQUIRED DETAILS AND HENCE CANNOT BE HELD AS ERRONE OUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. MOREOVER, THE PROVISIONS OF RULE 8D OF THE INCOME T AX RULES DO NOT APPLY TO A.Y. 2002-03. IT HAS BEEN HELD BY BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE, 328 ITR 8 1 THAT RULE 8D DOES NOT HAVE RETROSPECTIVE APPLICATION AND WILL APPLY FROM PROSPECTIVELY THAT IS A.Y. 2008-09. THE M.S.W.C AS A PART OF THEIR BUSINESS UNDERTAKES THE ACTIVITY OF PROVIDING THE SERVICES OF TRANSPORTATIO N AND HANDLING CHARGES TO VARIOUS CLIENTS SUCH AS FOOD CORPORATION OF INDIA, FERTILISER COMPANIES SUCH AS RCF, VARIOUS MARKING FEDERATIONS FOR STORAGE OF FOOD GRA INS, FERTILIZER, COTTON BALES, ETC. THE MSWC RESERVES T HE GODOWNS OF VARIOUS CLIENTS AS PER THEIR REQUIREMENT S. THE VARIOUS CLIENTS SENT THEIR GOODS TO NEAREST RAILWAY STATION. IT IS FROM THIS SPOT, THE MSWC PROVIDE THE SERVICES OF ENGAGING TRANSPORTATION FROM RAILWAY STATION TO WAR EHOUSE AND UNLOADING THE GOODS AT RAILWAY STATION AND LOAD ING THE SAME INTO TRUCKS. SAME ACTIVITY IS REPEATED WHEN T HE DELIVERY OF THE GOODS IS GIVEN. FOR DOING THIS WOR K THE MSWC ENGAGES CONTRACTORS. THE SAMPLE SCHEDULE OF S UCH CONTRACT IS ENCLOSED FOR YOUR PERUSAL. 4 ITA NO.1140 OF 12 MAHARASHTRA STATE WAREHOUSING CORPORATION ONCE THESE CHARGES ARE INCURRED THE RECOVERY OF THE SAME IS MADE ON ACTUAL BASIS FROM VARIOUS CLIENTS. ONLY FO R ENGAGING THESE SERVICES THE MSWC CHARGES THE SUPERV ISION CHARGES WHICH VARY FROM 7 TO 10% DEPENDING UPON THE NATURE OF WORK, CLIENT AND TERMS AGREED WITH SUCH C LIENT. THE TOTAL TRANSPORT AND HANDLING RECEIPT APPEAR IN THE ACCOUNTS IS RS.18,58,63,814/- IS INCLUSIVE OF SUCH SERVICE CHARGES. THE TOTAL HANDLING CHARGES APPEARING ON EXPENDITURE SIDE OF RS.17,30,89,840/- IS THE ACTUAL SUM PAID TO VARIOUS CONTRACTORS (AFTER CONSIDERING THE TDS). THUS, THERE IS A DIRECT NEXUS BETWEEN THE EXPENDITU RE INCURRED AND THE INCOME IS DEDUCTED FROM THE TRANSP ORT AND HANDLING RECEIPTS. THE EXPENDITURE AND HANDLING CH ARGES DO NOT PERTAINED TO DERIVING ANY OF THE EXEMPTED IN COME. THE VARIOUS WORKING SUBMITTED DURING THE COURSE OF ASSESSMENT HAVE BEEN VERIFIED BY THE ASSESSING OFFI CER AND THERE IS NOTHING TO CONCLUDE THAT HANDLING CHARGES OF RS.17,30,89,840/- PERTAINS TO INCOME FROM EXEMPT AC TIVITIES AS WELL AS TAXABLE ACTIVITIES. THERE IS NO MATERIA L ON RECORDS TO COME TO SUCH CONCLUSION AND EVEN ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE THESE EXPENSES PERTAIN TO EARNING OF TAXABLE INCOME ONLY. THE ASSESSEE HAS FILED THE APPEAL U/S.260A TO BOMBA Y HIGH COURT FOR A.Y. 2002-03 VIDE LODGING NO.1082/2009, I NTER ALIA CHALLENGING THE FACT THAT THE PROVISIONS OF SE C.10(29) FALL IN CHAPTER III OF THE ACT WHICH SPEAKS ABOUT INCOME S WHICH DO NOT FORM PART OF THE TOTAL INCOME WHILE SEC.14A THOUGH INSERTED BY FINANCE ACT, 2001, EFFECTIVE FROM 1-04- 62 FALLS IN CHAPTER IV OF THE ACT, WHICH SPEAKS ABOUT HEADS OF INCOME. THE PROVISIONS OF SEC.14A START WITH THE WORD FOR THE PURPOSE OF COMPUTING TOTAL INCOME UNDER THIS CH APTER. CHAPTER III COMMENCING WITH THE WORDS IN COMPUTING THE TOTAL INCOME OF THE PREVIOUS YEAR OF ANY PERSON, AN Y INCOME FALLING WITHIN ANY OF THE FOLLOWING CLAUSES SHALL N OT BE INDUCED. THE CHAPTER III PRECEDES CH.IV OF THE AC T. UNLESS THE CLAIM U/S.10(29) IS ADJUDICATED THE JUDICIAL FO RUM IS NOT EXPECTED TO JUMP TO CHAPTER IV. THEREFORE, THE ORDER PASSED BY THE A.O ON 14/12/200 9 IS PROPER AND IS AS PER PROVISIONS OF LAW AND NOT ERRO NEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE PR OPOSED ACTION IN TERMS OF SEC.263 MAY PLEASE BE DROPPED. 5. THE CIT HAVING CONSIDERED THE SAME DID NOT AGREE WITH THE CONTENTIONS RAISED ON BEHALF OF THE ASSESSEE AND HE OBSERVED THAT THERE WAS A CLAIM OF RS.17,30,89,840/- PERTAINING T O HANDLING 5 ITA NO.1140 OF 12 MAHARASHTRA STATE WAREHOUSING CORPORATION CHARGES. THE ASSESSING OFFICER AT THE TIME OF COMP LETION OF ASSESSMENT UNDER CONSIDERATION HAS NOT EXAMINED THE ISSUE AS TO WHETHER THESE EXPENSES PERTAIN AND ARE RELATABLE TO EXEMPT INCOME OR TAXABLE INCOME. THE ASSESSING OFFICERS DECISION NOT TO PROPERLY EXAMINE SUCH EXPENSES AS ABOVE AMOUNTS TO FAILURE TO EXAMINE THE APPLICABILITY OF PROVISIONS OF SECTION 14A TO THE FACTS OF THE CASE AND HAS RENDERED THE ASSESSMENT ERRONEO US AND PREJUDICIAL TO THE INTERESTS OF REVENUE. ACCORDING TO THE CIT, THE ASSESSING OFFICER WAS DUTY BOUND TO DETERMINE THE E XPENDITURE WHICH HAD BEEN INCURRED IN RELATION TO INCOME WHICH DID NOT FORM PART OF THE TOTAL INCOME UNDER ACT BY ADOPTING A REASONABLE BASIS OR METHOD CONSISTENT WITH ALL RELEVANT FACTS AND CIRCUMSTANCES. SINCE THE ASSESSING OFFICER FAILED TO DO SO, THE ORDER PASSED BY HIM WAS FOUND ERRONEOUS AND SO AS T O PREJUDICIAL TO THE INTERESTS OF REVENUE. THEREFORE , THE SAME WAS SET ASIDE BEING ERRONEOUS AND PREJUDICIAL TO THE IN TERESTS OF REVENUE WITH A DIRECTION TO PASS A FRESH ORDER AFTE R PROPERLY EXAMINING THE ISSUES REFERRED TO AND GIVING EFFECT TO THE PROVISIONS OF SECTION 14A OF THE ACT IN RESPECT OF EXPENSES PERTAINING TO EXEMPT INCOME. THE SAME HAS BEEN OPP OSED BEFORE US ON BEHALF OF THE ASSESSEE, INTER ALIA, THE LEARN ED AUTHORIZED REPRESENTATIVE HAS SUBMITTED THAT ON FACTS AND CIRC UMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS & SCHE ME OF THE ACT IT BE HELD THAT, THE ORDER PASSED BY LEARNED COMMIS SIONER OF INCOME TAX U/S.263 IS WITHOUT SATISFYING THE REQUIR EMENTS OF THE SAID SECTION AND WITHOUT PROPERLY RESUMING THE JURI SDICTION OF THE SAID SECTION. THE ORDER PASSED U/S.263 BE HELD TO BE UNWARRANTED, UNJUSTIFIED, AND CONTRARY TO THE PROVI SIONS OF THE ACT. THE ORDER SO PASSED BE CANCELLED. ON THE OTH ER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS SUPPORTED T HE ORDER PASSED U/S.263 BY THE CIT. 6. AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND MA TERIAL ON RECORD, WE FIND THAT ORIGINAL RETURN WAS FILED U/S. 139 OF THE ACT 6 ITA NO.1140 OF 12 MAHARASHTRA STATE WAREHOUSING CORPORATION ON 30.10.2002 ON WHICH ORIGINAL ASSESSMENT U/S.143( 3) WAS PASSED ON 31.01.2005 DETERMINING THE TAXABLE INCOME OF RS.5,90,35,236/- WHEREIN EXEMPTION U/S.10(29) OF TH E ACT WAS ALLOWED ON INCOME FROM WAREHOUSING & FUMIGATION AMO UNTING TO RS.5,41,41,410/- AND THE REMAINING BUSINESS INCOME & INCOME FROM OTHER SOURCES WAS BROUGHT TO TAX. THE MATTER WAS CARRIED BEFORE FIRST APPELLATE AUTHORITY, WHEREIN THE VARIO US CONTENTIONS WERE RAISED ON BEHALF OF THE ASSESSEE AND HAVING CO NSIDERED THE SAME, THE CIT(A) UPHELD THE COMPUTATION OF BUSINESS INCOME. IN SECOND APPEAL, THE TRIBUNAL HAD SET ASIDE THE ASSES SMENT ORDER AND RESTORED IT BACK TO THE ASSESSING OFFICER WITH A DIRECTION TO RE-COMPUTE DENOVO THE INCOME. FOR THE SAKE OF CONV ENIENCE, THE RELEVANT PORTION OF ITAT ORDER IS REPRODUCED HEREUN DER: 6. NOW THE SITUATION IS THAT NEITHER BEFORE THE A. O NOR BEFORE THE CIT(A) RULE 8D WAS PLACED WHICH PROVIDES METHOD FOR DETERMINING AMOUNT OF EXPENDITURE IN REL ATION TO INCOME NOT INCLUDED IN TOTAL INCOME. IT SAYS THAT W HERE THE A.O HAVING REGARD TO THE ACCOUNTS OF THE ASSESSEE O F PREVIOUS YEAR IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF EXPENDITURE MADE BY THE ASSESSEE OR THE CL AIM MADE BY THE ASSESSEE THAT NO EXPENDITURE HAS BEEN INCURRED IN RELATION TO INCOME WHICH DOES NOT FORM A PART OF THE TOTAL INCOME UNDER THE IT ACT, FOR SUCH PREVIOU S YEAR, THEN THE A.O SHALL DETERMINE THE AMOUNT OF EXPENDIT URE IN RELATION TO SUCH INCOME IN ACCORDANCE WITH THE METH OD AS PRESCRIBED IN SUB-RULE OF RULE 8. DUE TO THE ENACTM ENT OF THIS RULE, IT IS NOW MANDATORY ON THE PART OF THE R EVENUE AUTHORITIES TO FOLLOW THE PRESCRIBED METHOD FOR SUC H DETERMINATION. RESPECTED SPECIAL BENCH HAS ALSO HE LD THAT THE A.O HAS TO COMPUTE THE DISALLOWANCE NOT ONLY IN TERMS OF SECTION 14A BUT ALSO TO BE READ WITH RULE 8D OF I.T. RULE. FOLLOWING THE ABOVE PRECEDENT, WE HEREBY RESTORE TH E ISSUE RAISED IN THE GROUND BACK TO THE STAGE OF A.O TO RE COMPUTED DENOVO IN TERMS AS DIRECTED ABOVE. RESULTANTLY, TH E GROUND MAY BE TREATED AS ALLOWED FOR STATISTICAL PURPOSE. 7. IN THE RESULT, THE APPEAL IS ALLOWED ONLY FOR ST ATISTICAL PURPOSE. 6.1 CONSEQUENTLY, THE ORDER WAS PASSED BY THE ASSES SING OFFICER GIVING EFFECT TO THE ORDER OF ITAT WHICH IS PLACED ON PAGES 7 ITA NO.1140 OF 12 MAHARASHTRA STATE WAREHOUSING CORPORATION 47 TO 50 OF THE PAPER BOOK FILED BY THE ASSESSEE. IN PARA 3.1 OF THE ASSESSMENT ORDER, THE CALCULATION OF TAXABLE IN COME AS PER SECTION 14A R.W.R.8D HAS BEEN REFERRED WHEREIN, IND IRECT EXPENSES ALLOCATED AS PER ASSESSMENT ORDER HAS BEEN MENTIONED AT RS.17,30,93,440/-. IN RESPONSE TO SHOW CAUSE NO TICE DT. 02.02.2011 OF CIT, THE ASSESSEE REPLIED VIDE LETTER S DATED 31.10.2011 AND 04.12.2012. THE STAND OF THE ASSESS EE HAS BEEN THAT THE HANDLING CHARGES OF RS.17,30,89,840/- WERE DIRECTLY RELATED TO INCOME FROM TAXABLE ACTIVITIES OF RS.18, 58,63,814/-. THE SAME HAS BEEN FILED DURING THE COURSE OF FRESH ASSESSMENT PASSED IN PURSUANCE OF ITAT ORDER AS DISCUSSED ABOV E. FROM THE PERUSAL OF THIS WORKING, WE FIND THAT THE TAXABLE I NCOME OF RS.18,58,63,814/- PERTAINS TO TRANSPORT AND HANDING CHARGES, WHEREAS DIRECT EXPENSES INCURRED IN CONNECTION WITH SAME UNDER THE HEAD HANDLING CHARGES OF RS.17,30,89,840/- WAS HAVING DIRECT NEXUS WITH THE SAME. THE EXPENSES ON HANDLI NG CHARGES WERE NOT INCURRED ON EARNING TAX FREE INCOME. SO, THE SAME WAS CLAIMED TO BE CORRECTLY DEDUCTED FROM TAXABLE INCOM E ONLY AND THE ASSESSING OFFICER HAS ALLOWED THE SAME AFTER CO NSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE. HE HAS AP PLIED HIS MIND AFTER VERIFYING THE REQUIRED DETAILS AND HENCE THE SAME CANNOT BE SAID TO BE ERRONEOUS AND PREJUDICIAL TO T HE INTERESTS OF REVENUE. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ AND BOYCE MFG. CO. LTD. VS. DEPUTY COMMISSIONER OF INCOME-TAX (2010) 328 ITR 81 (BOM) HELD THAT THE PROVISIONS OF RULE 8D DID NOT HAVE APPLICATION FOR A.Y. 2002-03 BECAUSE THE S AME HAS NO RETROSPECTIVE, THEY APPLY PROSPECTIVELY I.E. W.E.F. A.Y. 2008-09. THE TOTAL TRANSPORT AND HANDLING CHARGES APPEARS IN THE ACCOUNTS IS RS.18,58,63,814/- IS INCLUSIVE OF TRANS PORT AND SERVICE CHARGES. THE TOTAL HANDLING CHARGES APPEAR ING ON EXPENDITURE SIDE OF RS.17,30,89,840 IS THE ACTUAL S UM PAID TO VARIOUS CONTRACTORS (AFTER CONSIDERING THE TDS). T HUS, THERE IS A DIRECT NEXUS OF EXPENDITURE INCURRED AND INCOME REF LECTED IN THE 8 ITA NO.1140 OF 12 MAHARASHTRA STATE WAREHOUSING CORPORATION ACCOUNTS. SINCE THIS ACTIVITY PERTAINS TO TAXABLE INCOME, THE EXPENDITURE WAS DEDUCTED FROM TRANSPORT AND HANDLIN G RECEIPT. THE EXPENDITURE AND HANDLING CHARGES DO NOT PERTAIN ED TO DERIVING ANY OF THE EXEMPTED INCOME. THE VARIOUS W ORKING SUBMITTED DURING THE COURSE OF ASSESSMENT HAVE BEEN VERIFIED BY THE CONCERNED ASSESSING OFFICER AT RELEVANT POINT O F TIME AND THERE IS NOTHING ON RECORD TO CONCLUDE THAT HANDLIN G CHARGES OF RS.17,30,89,840/- PERTAINS TO INCOME FROM EXEMPT AC TIVITIES AS WELL AS TAXABLE ACTIVITIES. THE ASSESSING OFFICER HAS PASSED THE ORDER AFTER APPLYING HIS MIND TO THE FACTS OF THE C ASE. IN SUCH A SITUATION, THE ORDER OF ASSESSING OFFICER CANNOT BE SAID TO BE ERRONEOUS SO AS TO PREJUDICIAL TO THE INTERESTS OF REVENUE TO INVOKE THE PROVISIONS OF SECTION 263 OF THE ACT. S O, THE SAME IS SET ASIDE. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 25 TH DAY OF AUGUST, 2014. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 25 TH AUGUST, 2014 GCVSR COPY TO:- 1) DEPARTMENT 2) ASSESSEE 3) THE CIT-I, PUNE 4) THE DR, A BENCH, I.T.A.T., PUNE. 5) GUARD FILE BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE