ACIT, Ludhiana V. M/s Sunder Forging, Ludhiana

ITA 1251/CHANDI/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68380 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-07-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 29-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR
• Keywords: Earning of tax free income
• Section: 14A; 80IB; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R. SOOD, A.M AND MS. SUSHMA CHOWLA, JM ITA NO. 1042/CHD/2012 ASSESSMENT YEAR : 2009-10 SUNDER FORGING V ADDL CIT, RANGE I INDUSTIRAL AREA C LUDHIANA SUA ROAD LUDHIANA AANFS 7430H ITA NO. 1251/CHD/2012 ASSESSMENT YEAR : 2009-10 A.C.I.T. C-I V SUNDER FORGING LUDHIANA INDUSTIRAL AREA C SUA ROAD LUDHIANA (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI ASHWANI KUMAR DEPARTMENT BY: SHRI J.S.NAGAR DATE OF HEARING 1 0.7.2013 DATE OF PRONOUNCEMENT 2.8.2013 O R D E R PER T.R.SOOD, A.M THESE ARE CROSS APPEALS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-I, LUDHIANA DATED 6.9.2011. THESE WERE H EARD TOGETHER AND ARE DISPOSED OFF BY THIS COMMON ORDER FOR THE SAME OF CONVENIENCE. ITA NO. 1042/CHD/2012 2 IN THIS APPEAL THE ASSESSEE HAS FILED THE FOLLOWI NG GROUND: THAT ORDER PASSED U/S 250(6) OF INCOME-TAX ACT BY THE LD. CIT(A)-I, LUDHIANA IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH HE WAS NOT JUSTIFIED TO UPHOLD DISALLOWANCE U/S 14A TO THE EXTENT OF RS. 13,27,503/-. 2 3 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURIN G ASSESSMENT PROCEEDINGS THE AO NOTICED THAT THE ASSE SSEE HAS MADE CERTAIN INVESTMENTS IN THE MUTUAL FUND. THERE FORE, THE ASSESSING OFFICER INVOKED SECTION 14A READ WITH RUL E 8D OF IT RULE AND WORKED OUT THE DISALLOWANCE AT RS. 13,27,5 03/-. 4 ON APPEAL THE DISALLOWANCE HAS BEEN CONFIRMED BY THE LD. CIT(A). 5 BEFORE US, THE LD. COUNSEL OF THE ASSESSEE SUBMIT TED THAT THE ISSUE IS COVERED AGAINST THE ASSESSEE BY THE OR DER OF THE TRIBUNAL IN EARLIER YEARS IN ITA NO. 803/CHD/2011 A ND 1059/CHD/2011. 6 ON THE OTHER HAND, THE LD. DR FOR THE REVENUE ST RONGLY SUPPORTED THE ORDER OF THE LD. CIT(A). 7 WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY. W E FIND THAT IDENTICAL ISSUE CAME UP FOR CONSIDERATION OF T HE TRIBUNAL AND THE SAME WAS DECIDED AGAINST THE ASSESSEE VIDE PARA 29 TO 33 WHICH READ AS UNDER: 29. WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY. WE FIND THAT THE DECISION OF HON'BLE JURISDICTIONAL HIGH CO URT IN THE CASE OF CIT V. HERO CYCLES LTD, 323 ITR 518 WAS REN DERED FOR ASSESSMENT YEAR 2004-05. LATER ON HON'BLE BOMBAY H IGH COURT IN CASE OF GODREJ AND BOYCE MANUFACTURING CO. LTD V. DCIT, 328 ITR 81 HAS CONSIDERED THE IMPLICATIONS OF SECTION 14A EVEN THE CONSTITUTIONAL VALIDITY AND APPLICABIL ITY OF RULE 8D IN GREAT DETAIL ULTIMATELY HON'BLE HIGH COURT HA S GIVEN THE FOLLOWING CONCLUSION: 88 OUR CONCLUSION IN T HIS JUDGMENT ARE AS FOLLOW S : (I) DIVIDEND INCOME AND INCOME FROM MUTUAL FUNDS FA LLING WITHIN THE AMBIT OF SECTION 10(33) OF THE INCOME-TA X ACT, 1961, AS WAS APPLICABLE FOR THE ASSESSMENT YEAR 2002-03 I S NOT INCLUDIBLE IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE. CONS EQUENTLY, NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF EXPENDITUR E INCURRED BY THE ASSESSEE IN RELATION TO SUCH INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT, BY VIRTUE OF THE PROVIS IONS OF SECTION 14A(1) ; (II) THE PAYMENT BY A DOMESTIC COMPANY UNDER SECTIO N 115- O(1) OF ADDITIONAL INCOME-TAX ON PROFITS DECLARED, DISTRIBUTED OR PAID IS A CHARGE ON A COMPONENT OF THE PROFITS O F THE COMPANY. THE 3 COMPANY IS CHARGEABLE TO TAX ON ITS PROFITS AS A DI STINCT TAXABLE ENTITY AND IT PAYS TAX IN DISCHARGE OF ITS OWN LIAB ILITY AND NOT ON BEHALF OF OR AS AN AGENT FOR ITS SHAREHOLDERS. IN T HE HANDS OF THE SHAREHOLDER AS THE RECIPIENT OF DIVIDEND, INCOME BY WAY OF DIVIDEND DOES NOT FORM PART OF THE TOTAL INCOME BY VIRTUE OF THE PROVISIONS OF SECTION 10(33). INCOME FROM MUTUAL FUNDS STANDS ON THE SAME BASIS ; (III) THE PROVISIONS OF SUB-SECTIONS (2) AND '(3) O F SECTION 14A OF THE INCOME-TAX ACT 1961 ARE CONSTITUTIONALLY VALID ; (IV) THE PROVISIONS OF RULE 8D OF THE INCOME-TAX RU LES AS INSERTED BY THE INCOME-TAX (FIFTH AMENDMENT) RULES, 2008, ARE NOT ULTRA VIRES THE PROVISIONS OF SECTION 14A, MORE PARTICULARLY SUB-SECTION (2) AND DO NOT OFFEND ARTI CLE 14 OF THE CONSTITUTION ; (V) THE PROVISIONS OF RULE 8D OF THE INCOME-TAX RUL ES WHICH HAVE BEEN NOTIFIED WITH EFFECT FROM MARCH 24, 2008, SHALL APPLY WITH EFFECT FROM THE ASSESSMENT YEAR 2008-09 ; (VI) EVEN PRIOR TO THE ASSESSMENT YEAR 2008-09, WHE N RULE 8D WAS NOT APPLICABLE, THE ASSESSING OFFICER HAS TO ENFORCE TH E PROVISIONS OF SUB- SECTION (1) OF SECTION 14A. FOR THAT PURPOSE, THE A SSESSING OFFICER IS DUTY BOUND TO DETERMINE THE EXPENDITURE WHICH HAS BEEN INCURRED IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT. THE ASSESSING OFFICER MUST ADOPT A R EASONABLE BASIS OR METHOD CONSISTENT WITH ALL THE RELEVANT FA CTS AND CIRCUMSTANCES AFTER FURNISHING A REASONABLE OPPORTU NITY TO THE ASSESSEE TO PLACE ALL GERMANE MATERIAL ON THE RECOR D ; (YII) THE PROCEEDINGS FOR THE ASSESSMENT YEAR 2002- 03 SHALL STAND REMANDED BACK TO THE ASSESSING OFFICER. THE ASSESSING OFFICE R SHALL DETERMINE AS TO WHETHER THE ASSESSEE HAS INCURRED ANY EXPENDITURE ( DIRECT OR INDIRECT) IN RELATION TO DIVIDEND INCOME/INCOME FROM MUTUAL FUND S WHICH DOES NOT FORM PART OF THE TOTAL INCOME AS CONTEMPLATED UNDER SECT ION 14A. THE ASSESSING OFFICER CAN ADOPT A REASONABLE BASIS FOR EFFECTING THE APPORTIONMENT. WHILE MAKING THAT DETERMINATION, THE ASSESSING OFFICER SH ALL PROVIDE A REASONABLE OPPORTUNITY TO THE ASSESSEE OF PRODUCING ITS ACCOUN TS AND RELEVANT OR GERMANE MATERIAL HAVING A BEARING ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 30. THE ABOVE DECISION HAS BEEN RENDERED AFTER CONS IDERING THE DECISION OF HON'BLE SUPREME COURT IN CASE OF CI T V. WALFORT SHARE AND STOCK BROKERS P LTD (2010) 326 IT R 1 (S.C), THEREFORE, IN OUR OPINION, THE RATIO OF THIS DECIS ION IS APPLICABLE TO THE CASE OF THE ASSESSEE AND RULE 8D WOULD BE APPLICABLE IN THE PRESENT CASE WHICH RELATES TO ASS ESSMENT YEAR 2008-09. 31. THOUGH THE LD. CIT(A) DELETED THE ADDITION BY O BSERVING THAT INVESTMENT IN MUTUAL FUND IS OUT OF CURRENT AC COUNT BUT IT WAS NOT DENIED BEFORE US THAT ALL THE RECEIPTS ARE BEING CREDITED TO THE CURRENT ACCOUNT WHICH MEANS CURRENT ACCOUNT IS DEALING WITH THE COMBINED FUND OF THE ASSESSEE-COMP ANY. THE ASSESSEE HAS NOWHERE SHOWN THAT THE INTEREST FREE F UNDS WERE AVAILABLE FOR INVESTMENT IN MUTUAL FUND. IN FACT B EFORE THE PROVISION OF SECTION 14A THE ASSESSEE HAD THE RIGHT TO CLAIM ALL THE EXPENSES IF SUCH EXPENSES COULD NOT BE BIFU RCATED IN TERMS OF NORMAL TAXABLE INCOME AND EXEMPTED INCOME IN VIEW 4 OF THE DECISION OF HON'BLE SUPREME COURT IN CASE OF RAJASTHAN STATE WAREHOUSING CORPORATION V. CIT, 242 ITR 450 B UT THIS POSITION CHANGED AFTER THE INTRODUCTION OF SECTION 14A BY FINANCE ACT, 2001. THE MEMORANDUM EXPLAINING THE PROVISIONS OF FINANCE BILL READS AS UNDER: CERTAIN INCOME ARE NOT INCLUDIBLE WHILE COMPUTATIN G THE TOTAL INCOME AS THESE ARE EXEMPT UNDER VARIOUS PROVISIONS OF THE ACT. THERE HAVE BEEN CASES WHERE DEDUCTIONS HAVE B EEN CLAIMED IN RESPECT OF SUCH EXEMPT INCOME. THIS IN EFFECT MEANS THAT THE TAX INCENTIVE GIVEN BY WAY OF EXEMPT IONS TO CERTAIN CATEGORIES OF INCOME IS BEING USED TO REDUC E ALSO THE TAX PAYABLE ON THE NON-EXEMPT INCOME BY DEBITING TH E EXPENSES INCURRED TO EARN THE EXEMPT INCOME AGAINST TAXABLE INCOME. THIS IS AGAIN THE BASIC PRINCIPLES OF TAXA TION WHEREBY ONLY THE NET INCOME, I.E., GROSS INCOME MINUS THE E XPENDITURE IS TAXED. ON THE SAME ANALOGY, THE EXEMPTION IS AL SO IN RESPECT OF THE NET INCOME. EXPENSES INCURRED CAN B E ALLOWED ONLY TO THE EXTENT THEY ARE RELATABLE TO THE EARNIN G OF TAXABLE INCOME. IT IS PROPOSED TO INSERT A NEW SECTION 14A SO AS TO CLARIFY THE INTENTION OF THE LEGISLATURE SINCE THE INCEPTION OF THE INCOME- TAX ACT, 1961, THAT NO DEDUCTION SHALL BE MADE IN R ESPECT OF ANY EXPENDITURE INCURRED BYTHE ASSESSEE IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE INCOME- TAX ACT. THE PROPOSED AMENDMENT WILL TAKE EFFECT RETROSPECTI VELY FROM APRIL 1, 1962 AND WILL ACCORDINGLY, APPLY IN RELATI ON TO THE ASSESSMENT YEAR 1962-63 AND SUBSEQUENT ASSESSMENT Y EAR. 32. IN FACT THE HON'BLE BOMBAY HIGH COURT HAS NOTED THIS POSITION AND THEN CONFIRMED THAT THEORY OF APPORTIO NMENT OF EXPENSES IS VERY MUCH APPLICABLE IN SECTION 14A. I N FACT AT PLACITUM 28 IT HAS OBSERVED AS UNDER: DURING THE COURSE OF THIS JUDGMENT, IT WOULD BE NECESSARY TO REVISIT THE DECISION OF HON'BLE SUPREM E COURT IN WALFORT. AT THIS STAGE, HOWEVER, IT NEEDS TO BE EMPHASIZED THAT THE PROVISIONS OF SECTION 14A WERE CONSTRUED IN WALFORT TO EVINCE PARLIAMENTARY INTENT NOT TO ALLOW DEDUCTION IN RESPECT OF ANY EXPENDITURE INCUR RED BY THE ASSESSEE IN RELATION TO INCOME WHICH DOES NOT F ORM PART OF THE TOTAL INCOME UNDER THE ACT AGAINST TAXA BLE INCOME. SECTION 14A IS CLARIFICATORY OF THE POSITIO N THAT EXPENSE CAN BE ALLOWED ONLY TO THE EXTENT THAT THEY ARE RELATABLE TO THE EARNING OF TAXABLE INCOME. ONLY T HOSE EXPENSES WHICH ARE IN RESPECT OF THE EARNING OF TA XABLE INCOME CAN BE ALLOWED. THE SECTION 14A BROADENS TH E THEORY OF APPORTIONMENT OF EXPENDITURE BETWEEN TAXABLE AND NON-TAXABLE INCOME IS EVIDENT FROM THE FOLLOWING OBSERVATIONS OF THE HON'BLE SUPREME COURT : THE THEORY OF APPORTIONMENT OF EXPENDITURE BETWEEN TAXABLE AND NON-TAXABLE HAS, IN PRINCIPLE, BEEN NOW WIDENED U/S 14A. READING SECTION 14 IN JUXTAPOSITI ON WITH SECTIONS 15 TO 59, IT IS CLEAR THAT THE WORDS 5 EXPENDITURE INCURRED IN SECTION 14A REFERS TO EXPENDITURE ON RENT, TAXES, SALARIES, INTEREST, ETC ., IN RESPECT OF WHICH ALLOWANCES ARE PROVIDED FOR (SEE SECTIONS 30 TO 37). THUS ON THE BASIS OF ABOVE, IT WAS HELD THAT AFTER INTRODUCTION OF SECTION 14A, IT WAS POSSIBLE TO APPORTIONED THE EXPENDITURE BETWEEN TAXABLE INCOME AND EXEMPTED INCOME. RULE 8D READS AS UNDER: (1) WHERE THE ASSESSING OFFICER HAVING REGARD TO T HE ACCOUNT OF THE ASSESSEE OF A PREVIOUS YEAR, IS NOT SATISFIED WITH (A) THE CORRECTNESS OF THE CLAIM OF EXPENDITURE MAD E BY THE ASSESSEE; OR (B) THE CLAIM MADE BY THE ASSESSEE THAT NO EXPENDIT URE HAS BEEN INCURRED IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT FOR SUCH PREVIOUS YE AR, HE HALL DETERMINE THE AMOUNT OF EXPENDITURE IN RELATION TO SUCH INCOME IN ACCORDANCE WITH THE PROVISIONS OF SUB-RUL E (2). (2) THE EXPENDITURE IN RELATION TO INCOME WHICH DOE S NOT FORM PART OF THE TOTAL INCOME SHALL BE THE AGGREGAT E OF FOLLOWING AMOUNTS, NAMELY:- (I) THE AMOUNT OF EXPENDITURE DIRECTLY RELATING TO INCOME WHICH DOES NOT FORM PART OF TOTAL INCOME; (II) IN A CASE WHERE THE ASSESSEE HAS INCURRED EXPE NDITURE BY WAY OF INTEREST DURING THE PREVIOUS YEAR WHICH I S NOT DIRECTLY ATTRIBUTABLE TO ANY PARTICULAR INCOME OR R ECEIPT, AN AMOUNT COMPUTED IN ACCORDANCE WITH THE FOLLOWING FO RMULA, NAMELY:- A X B C WHERE A = AMOUNT OF EXPENDITURE BY WAY OF INTEREST OTHER THAN THE AMOUNT OF INTEREST INCLUDED IN CLAUSE (I) INCUR RED 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 ASSET AS APPEARING IN THE BALANCE SHEET OF THE ASSESSEE, ON THE FIRST DAY AND THE LAS T DAY OF THE PREVIOUS YEAR; (III) AN AMOUNT EQUAL TO ONE-HALF PER CENT OF THE A VERAGE OF THE 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 LAS T DAY OF THE PREVIOUS YEAR. 6 (3) FOR THE PURPOSES OF THIS RULE, THE TOTAL ASSET S SHALL MEAN, TOTAL ASSET AS APPEARING IN THE BALANCE SHEET EXCLUDING THE INCREASE ON ACCOUNT OF REVALUATION OF ASSET BU T INCLUDING THE DECREASE ON ACCOUNT OF REVALUATION OF ASSETS.) . CLAUSE (B) OF SUB-SECTION (2) CLEARLY SHOWS THAT IF ASSESSEE DOES NOT SHOW THAT THE INTEREST HAS BEEN INCURRED S PECIFICALLY FOR A PARTICULAR ITEM OF INCOME THEN IT HAS TO BE A PPORTIONED. IN CASE BEFORE US SINCE THE ASSESSEE HAD INCURRED E XPENSES ON INTEREST WHICH CAN NOT BE DIRECTLY RELATED TO PA RTICULAR TYPE OF INCOME, THEREFORE, INTEREST IS REQUIRED TO BE A PPORTIONED. 33. PERUSAL OF ASSESSMENT ORDER SHOWS THAT THE DISALLOWANCE U/S 14A IS BASED ON RULE 8D WHICH HAS BEEN NOTED ABOVE WAS APPLICABLE DURING THE YEAR UNDER CONSIDERATION AND WHICH IS IN CONSONANCE WITH THE DECISION OF HON'BLE BOMBAY HIGH COURT. THEREFORE, WE SET ASID E THE ORDER OF LD. CIT(A) AND RESTORE THAT OF THE ASSESSI NG OFFICER BY CONFIRMING THE DISALLOWANCE U/S 14A. FOLLOWING THE ABOVE WE DECIDE THIS ISSUE AGAINST TH E ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ITA NO. 1251/CHD/2012 8 IN THIS APPEAL THE REVENUE HAS FILED THE FOLLOWIN G GROUND: 1 THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE DEDUCTION U/S 80IB OF RS. 86,12,650 /- WHEREAS THE ASSESSING OFFICER HAS RIGHTLY DISALLOW THE CLAIM OF DEDUCTION U/S 80IB OF THE INCOME-TAX ACT, 1961. 2 THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON THE F ACTS IN DELETING THE ADDITION OF RS.9,98,060/- MADE BY T HE ASSESSING OFFICER U/S 40A(2)(B) OF THE INCOME-TAX A CT, 1961. 9 AFTER HEARING BOTH THE PARTIES WE FIND THAT THE A SSESSEE HAD CLAIMED DEDUCTION U/S 80IB OF THE ACT WHICH WAS DENIED BECAUSE THE INVESTMENTS BY THE ASSESSEE HAD EXCEEDE D THE LIMIT OF RS. 1 CRORE AND THUS THE ASSESSEE WAS NO M ORE A SMALL SCALE INDUSTRY. 10 ON APPEAL THE CLAIM OF THE ASSESSEE WAS ALLOWED BY THE LD. CIT(A). 11 ON THE OTHER HAND, THE LD. DR FOR THE REVENUE S TRONGLY SUPPORTED THE ORDER OF THE LD. CIT(A). 7 12 BEFORE US, THE LD. COUNSEL OF THE ASSESSEE SUBMI TTED THAT THE ISSUE IS COVERED BY THE DECISION OF THE TRIBUNA L IN EARLIER YEARS IN ITA NO. 803/CHD/2011 AND 1059/CHD/2011 IN FAVOUR OF THE ASSESSEE. 13 WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY. WE FIND THAT IDENTICAL ISSUE CAME UP FOR CONSIDERATION O TH E TRIBUNAL AND THE SAME WAS DECIDED AGAINST THE REVENUE VIDE P ARA 9 WHICH READ AS UNDER: 9. WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY AN D FIND FORCE IN THE SUBMISSIONS OF THE LD. COUNSEL OF THE ASSESSEE. WE HAVE PERUSED THE NOTIFICATION NO. 1642(E) DATED 29.9.29006 AND FIND THAT THERE IS NO CONDITION THAT NEW DEFINITION IS APPLICABLE TO THE NEW UNITS ONLY. IN FACT, SECTION 80IB(14)(G) READS AS UNDER: SMALL-SCALE INDUSTRIAL UNDERTAKING MEANS AN INDUS TRIAL UNDERTAKING WHICH IS, AS ON THE LAST DAY OF THE PRE VIOUS YEAR, REGARDED AS A SMALL SCALE INDUSTRIAL UNDERTAK ING UNDER SECTION 11B OF THE INDUSTRIES (DEVELOPMENT AN D REGULATION) ACT, 1951 (65 OF1951). THE ABOVE CLEARLY SHOWS THAT THE AMOUNT OF INVESTME NT HAS TO BE SEEN AS ON THE LAST DATE OF PREVIOUS YEAR. IN T HE CASE BEFORE US, THE LAST DATE OF THE PRECEDING YEAR IS 3 1.3.2007 AND THE NEW LIMIT OF RS. 5.00 CRORE WAS APPLICABLE FROM 2.10.2006. THEREFORE, AS ON 31.3.2007 THE ASSESSEE WAS CLEARL Y COVERED BY THE NEW DEFINITION. ACCORDINGLY WE FIND THAT TH E LD. CIT(A) HAS CORRECTLY ADJUDICATED THE ISSUE AND HIS ORDER D OES NOT REQUIRE ANY INTERFERENCE. FOLLOWING THE ABOVE WE DECIDE THIS ISSUE AGAINST TH E REVENUE. 14 GROUND NO. 2 - AFTER HEARING BOTH THE PARTIES W E FIND THAT DURING ASSESSMENT PROCEEDINGS THE AO NOTICED THAT T HE ASSESSEE HAD RAISED CERTAIN UNSECURED LOANS. THE A SSESSING OFFICER WAS OF THE OPINION THAT INTEREST PAID WAS E XCESSIVE AND THEREFORE, RESTRICTED THE ALLOWANCE OF INTEREST TO 12%. 15 ON APPEAL THE CLAIM OF INTEREST WAS ACCEPTED AT1 5%. 16 BEFORE US, THE LD. DR FOR THE REVENUE RELIED ON THE ORDER OF THE ASSESSING OFFICER. 8 17 ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSES SEE SUBMITTED THAT THIS ISSUE HAS BEEN DECIDED BY THE T RIBUNAL IN ASSESSMENT YEAR 2007-08 IN FAVOUR OF THE ASSESSEE. 18 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT THIS ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE VIDE P ARA NO. 20 OF ITAS NO. 803 & 1059/CHD/2011. ACCORDINGLY WE D ECIDE THIS ISSUE AGAINST THE REVENUE. 19 IN THE RESULT, APPEALS OF THE ASSESSEE AS WELL A S REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2.8.2013 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 2.8.2013 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR