Sri Mukesh Gupta , Bangalore V. The Deputy Commissioner of Income Tax Circle-6(1)(2), Bangalore

ITA 1453/BANG/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7640 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 07-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S VENKATESH
• Keywords: Business income; Depreciation; Opportunity of being heard; Principle of natural justice; Earning of tax free income
• Section: 234B; 14A; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO S . 1452 & 1453 /BANG/201 8 ASSESSMENT YEAR S : 201 1 - 12 & 2012 - 13 SHRI MUKESH GUPTA, NO. 32, ASHAGEET, SHESHADRI ROAD, HOTEL SUPRABHAT COMPLEX, SHESHADRIIYER ROAD, ANANDRAO CIRCLE, BANGALORE 560 009. PAN: AANPG1383P VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 12 (3), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI RAVI SHANKAR, ADVOCATE RESPONDENT BY : SHRI S. VENKATESH, JCIT (DR) DATE OF HEARING : 0 2 .0 7 .2018 DATE OF PRONOUNCEMENT : 20 .0 7 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THESE TWO APPEALS ARE FILED BY THE ASSESSEE WHICH A RE DIRECTED AGAINST TWO SEPARATE ORDERS OF LD. CIT(A)-6, BANGALORE BOTH DAT ED 08.12.2017 FOR ASSESSMENT YEARS 2011-12 AND 2012-13. BOTH THESE A PPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS C OMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE GROUNDS RAISED BY THE ASSESSEE IN ASSESSMENT YEAR 2011-12 ARE AS UNDER ALONG WITH THE ADDITIONAL GROUNDS. 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN SO FAR AS IT IS AGAINST THE APPELLANT ARE OPPOSE D TO LAW, EQUITY AND WEIGHT OF EVIDENCE, NATURAL JUSTICE, FACTS AND CIRC UMSTANCES OF THE CASE. 2. THE APPELLANT DENIES HIMSELF LIABLE TO BE ASSESS ED TO TOTAL INCOME OF RS. 12,19,234/- AS AGAINST THE RETURNED INCOME OF R S. 7,55,230/- ON THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NOS. 1452 & 1453/BANG/2018 PAGE 2 OF 8 3. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN NOT DELE TING THE ENTIRE DISALLOWANCE UNDER SECTION 14A OF THE ACT, WHEN THE AO HAS CATEGORICALLY STATED THAT THERE WAS NO EXPENDITURE INCURRED FOR EARNING THE DIVIDEND INCOME ON THE FACTS AND CIRCUM STANCES OF THE CASE. 4. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN RESTRICT ING THE ITEMS OF INVESTMENT AS STATED IN THE ORDER, RATHER ALL SUCH INVESTMENTS NOT EARNING DIVIDEND OUGHT TO HAVE BEEN DIRECTED TO BE DELETED IN COMPUTING THE DISALLOWANCE UNDER SECTION 14A READ W ITH RULE 8D, AS HELD IN THE DECISION OF THE SPECIAL BENCH OF THE IT AT, DELHI IN VIREET INVESTMENT P LTD, 58 ITR(T) 313 ON THE FACTS AND CI RCUMSTANCES OF THE CASE. 5. WITHOUT PREJUDICE THE DISALLOWANCE WAS EXCESSIVE AND WAS TO BE SUBSTANTIALLY REDUCED ON THE FACTS AND CIRCUMSTANCE S OF THE CASE. 6. THE APPELLANT CRAVES LEAVE OF THIS HON'BLE TRIBU NAL, TO ADD, ALTER, DELETE, AMEND OR SUBSTITUTE ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL AS MAY BE NECESSARY AT THE TIME OF HEARING. 7. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF APPEAL, THE APPELLANT PRAYS THAT THE APP EAL MAY BE ALLOWED FOR THE ADVANCEMENT OF SUBSTANTIAL CAUSE OF JUSTICE AND EQUITY. ADDITIONAL GROUNDS OF APPEAL 1. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN APPRECIA TING THAT THE AO HAS NOT RECORDED PROPER SATISFACTION BEFORE PROCEED ING TO COMPUTE THE DISALLOWANCE IN RELATION TO EXEMPT INCOME ON THE FA CTS AND CIRCUMSTANCES OF THE CASE. 2. WITHOUT PREJUDICE AND NOT CONCEDING THAT NO DISA LLOWANCE WAS CALLED FOR, THE DISALLOWANCE IF ANY OUGHT TO BE RES TRICTED TO RS.13,300/- BEING 0.5% OF RS.26,60,085/-, BEING THE VALUE OF IN VESTMENT WHICH HAVE EARNED DIVIDEND DURING THE YEAR, ON THE FACT A ND CIRCUMSTANCES OF THE CASE. 3. WITHOUT FURTHER PREJUDICE, THE DISALLOWANCE HAS TO BE RESTRICTED TO THE EXEMPT INCOME EARNED ON THE FACTS AND CIRCUMSTA NCES OF THE CASE. 4. THE LEARNED AO HAS ERRED ON FACTS IN NOT ALLOWIN G THE TDS ON INTEREST OF RS.5,293/- AS STATED IN THE ASSESSMENT ORDER AND HAS CHOSEN TO ADD ONLY THE INTEREST EARNED ON THE FACTS AND CI RCUMSTANCES OF THE CASE. 5. THE APPELLANT DENIES THE LIABILITY TO PAY INTERE ST UNDER SECTION 234B AND 234C OF THE ACT IN VIEW OF THE FACT THAT THERE IS NO LIABILITY TO ADDITIONAL TAX AS DETERMINED BY THE ASSESSING OFFIC ER. WITHOUT PREJUDICE, THE RATE, PERIOD AND ON WHAT QUANTUM THE INTEREST HAS BEEN ITA NOS. 1452 & 1453/BANG/2018 PAGE 3 OF 8 LEVIED ARE NOT IN ACCORDANCE WITH THE LAW AND ARE N OT DISCERNABLE FROM THE ORDER AND HENCE DESERVES TO BE CANCELLED O N THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. THE APPELLANT CRAVES LEAVE OF THIS HON'BLE TRIBU NAL, TO ADD, ALTER, DELETE, AMEND OR SUBSTITUTE ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL AS MAY BE NECESSARY AT THE TIME OF HEARING. 7. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF APPEAL, THE APPELLANT PRAYS THAT THE APP EAL MAY BE ALLOWED FOR THE ADVANCEMENT OF SUBSTANTIAL CAUSE OF JUSTICE AND EQUITY. 3. SIMILARLY, THE GROUNDS RAISED BY THE ASSESSEE IN ASSESSMENT YEAR 2012-13 ALONG WITH THE ADDITIONAL GROUNDS ARE AS UNDER. 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN SO FAR AS IT IS THE APPELLANT ARE OPPOSED TO LAW , EQUITY AND WEIGHT OF EVIDENCE, NATURAL JUSTICE, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE APPELLANT DENIES HIMSELF LIABLE TO BE ASSESS ED TO TOTAL INCOME OF RS. 20,89,262/- AS AGAINST THE RETURNED INCOME OF R S. 13,79,620/- ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN NOT DELE TING THE ENTIRE DISALLOWANCE UNDER SECTION 14A OF THE ACT, WHEN THE AO HAS CATEGORICALLY STATED THAT THERE WAS NO EXPENDITURE INCURRED FOR EARNING THE DIVIDEND INCOME ON THE FACTS AND CIRCUM STANCES OF THE CASE. 4. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN RESTRICT ING THE ITEMS OF INVESTMENT AS STATED IN THE ORDER, RATHER ALL SUCH INVESTMENTS NOT EARNING DIVIDEND OUGHT TO HAVE BEEN DIRECTED TO BE DELETED IN COMPUTING THE DISALLOWANCE UNDER SECTION 14A READ W ITH RULE 8D, AS HELD IN THE DECISION OF THE SPECIAL BENCH OF THE IT AT, DELHI IN VIREET INVESTMENT P LTD, 58 ITR(T) 313 ON THE FACTS AND CI RCUMSTANCES OF THE CASE. 5. WITHOUT PREJUDICE THE DISALLOWANCE WAS EXCESSIVE AND WAS TO BE SUBSTANTIALLY REDUCED ON THE FACTS AND CIRCUMSTANCE S OF THE CASE. 6. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE DISALLOWANCE OF EXPENDITURE AT 10% OF TOTA L EXPENDITURE ON AN ESTIMATE BASIS WAS NOT PERMITTED, WHEN THE BOOKS OF THE APPELLANT WAS NOT REJECTED, ON THE FACTS AND CIRCUMSTANCE OF THE CASE. 7. THE APPELLANT CRAVES LEAVE OF THIS HON'BLE TRIBU NAL, TO ADD, ALTER, DELETE, AMEND OR SUBSTITUTE ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL AS MAY BE NECESSARY AT THE TIME OF HEARING. ITA NOS. 1452 & 1453/BANG/2018 PAGE 4 OF 8 8. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF APPEAL, THE APPELLANT PRAYS THAT THE APP EAL MAY BE ALLOWED FOR THE ADVANCEMENT OF SUBSTANTIAL CAUSE OF JUSTICE AND EQUITY. ADDITIONAL GROUNDS OF APPEAL 1. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN APPRECIA TING THAT THE AO HAS NOT RECORDED PROPER SATISFACTION BEFORE PROCEED ING TO COMPUTE THE DISALLOWANCE IN RELATION TO EXEMPT INCOME ON THE FA CTS AND CIRCUMSTANCES OF THE CASE. 2. WITHOUT PREJUDICE AND NOT CONCEDING THAT NO DISA LLOWANCE WAS CALLED FOR, THE DISALLOWANCE IF ANY OUGHT TO BE RES TRICTED TO RS.12,436/- BEING 0.5% OF RS.24,87,160/-, BEING THE VALUE OF IN VESTMENT WHICH HAVE EARNED DIVIDEND DURING THE YEAR, ON THE FACT A ND CIRCUMSTANCES OF THE CASE. 3. WITHOUT FURTHER PREJUDICE, THE DISALLOWANCE HAS TO BE RESTRICTED TO THE EXEMPT INCOME EARNED ON THE FACTS AND CIRCUMSTA NCES OF THE CASE. 4. THE APPELLANT DENIES THE LIABILITY TO PAY INTERE ST UNDER SECTION 234B AND 234C OF THE ACT IN VIEW OF THE FACT THAT THERE IS NO LIABILITY TO ADDITIONAL TAX AS DETERMINED BY THE ASSESSING OFFIC ER. WITHOUT PREJUDICE, THE RATE, PERIOD AND ON WHAT QUANTUM THE INTEREST HAS BEEN LEVIED ARE NOT IN ACCORDANCE WITH THE LAW AND ARE N OT DISCERNABLE FROM THE ORDER AND HENCE DESERVES TO BE CANCELLED O N THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE APPELLANT CRAVES LEAVE OF THIS HONBLE TRIBU NAL, TO ADD, ALTER, DELETE, AMEND OR SUBSTITUTE ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL AS MAY BE NECESSARY AT THE TIME OF HEARING. 6. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF APPEAL, THE APPELLANT PRAYS THAT THE APP EAL MAY BE ALLOWED FOR THE ADVANCEMENT OF SUBSTANTIAL CAUSE OF JUSTICE AND EQUITY. 4. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT IN A SSESSMENT YEAR 2011-12, THE FIRST ISSUE TO BE DECIDED IS REGARDING DISALLOWANCE MADE BY THE AO U/S. 14A OF IT ACT. THE SECOND ISSUE TO BE DECIDED IS REGARDIN G NOT ALLOWING CREDIT OF TDS ON INTEREST OF RS. 5,293/-. 5. REGARDING THE FIRST ISSUE, HE SUBMITTED THAT AS PER THE DETAILS AVAILABLE ON PAGE NO. 31 OF PAPER BOOK, THE DIVIDEND OF RS. 50,952.10 WAS RECEIVED FROM 21 COMPANIES AND THE VALUE OF INVESTMENT IN SHARES OF THESE COMPANIES IS ONLY ITA NOS. 1452 & 1453/BANG/2018 PAGE 5 OF 8 RS. 26,60,085/-. HE SUBMITTED THAT FOR THE PURPOSE OF MAKING DISALLOWANCE U/S. 14A OF IT ACT, ONLY THOSE INVESTMENTS SHOULD BE CON SIDERED FROM WHICH THE DIVIDEND HAS BEEN RECEIVED IN THE RELEVANT YEAR. I N SUPPORT OF HIS CONTENTION, HE PLACED RELIANCE ON JUDGEMENT OF SPECIAL BENCH OF TRIBUNAL RENDERED IN THE CASE OF ACIT VS. VIREET INVESTMENT (P) LTD. AS REPO RTED IN (2017) 154 DTR (DEL) (SB) 241, COPY AVAILABLE ON PAGES 60 TO 85 OF PAPER BOOK AND MY ATTENTION WAS DRAWN TO PARA NO. 11.16 OF THIS ORDER OF THE SPECIAL BENCH OF THE TRIBUNAL. AT THIS JUNCTURE, THE BENCH WANTED TO KN OW AS TO WHETHER ANY JUDGEMENT OF HIGH COURT ON THIS ASPECT OF THE MATTE R IS AVAILABLE AND IN REPLY, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT HIGH COURT JUDGEMENT IS AVAILABLE AND AT THE TIME OF HEARING, HE UNDERTOOK THAT AFTER COMPLETION OF HEARING, HE WILL FILE THE COPY OF JUDGMENT OF HONBLE HIGH COURT ON THIS ASPECT OF THE ISSUE. BUT NO SUCH JUDGMENT COPY WAS SUBMITTED TILL THE DATE O F PASSING OF THIS ORDER. THE LD. DR OF REVENUE SUPPORTED THE ORDERS OF AUTHORITI ES BELOW. 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST OF ALL, I REPRODUCE PARA 11.16 OF THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL RENDE RED IN THE CASE OF ACIT VS. VIREET INVESTMENT (P) LTD. (SUPRA). THE SAME IS AS UNDER. 11.16.THEREFORE, IN OUR CONSIDERED OPINION, NO CONT RARY VIEW CAN BE TAKEN UNDER THESE CIRCUMSTANCES. WE, ACCORDINGLY, H OLD THAT ONLY THOSE INVESTMENTS ARE TO BE CONSIDERED FOR COMPUTIN G AVERAGE VALUE OF INVESTMENT WHICH YIELDED EXEMPT INCOME DURING TH E YEAR. 7. RESPECTFULLY FOLLOWING THIS DECISION OF SPECIAL BENCH OF TRIBUNAL, I DIRECT THE AO TO RECOMPUTE THE AMOUNT OF DISALLOWANCE U/S. 14A BY FOLLOWING THIS DECISION OF SPECIAL BENCH OF THE TRIBUNAL. IF ANY JUDGEMENT OF ANY HIGH COURT IS AVAILABLE BY THE TIME THE ISSUE IS DECIDED BY THE AO THEN THE SAME MAY ALSO BE CONSIDERED FOR DECIDING THIS ISSUE. ACCORDINGLY, T HIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE FOR STATISTICAL PURPOSES. 8. REGARDING THE SECOND ISSUE IN RESPECT OF NON-GRA NTING OF TDS CREDIT, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT ON PAGE NO. 5 OF ASSESSMENT ORDER, THE AO HAS MADE ADDITION OF RS. 42,644.94 IN RESPECT OF INTEREST RECEIVED FROM BANKS AND THE AO HAS NOTED THAT TDS OF RS. 5,293/- WAS DEDUCTED BUT AS PER THE LEARNED AR OF THE ASSESSEE AND AS PER ADDITIONA L GROUND, NO CREDIT OF SUCH ITA NOS. 1452 & 1453/BANG/2018 PAGE 6 OF 8 TDS WAS ALLOWED BY AO AND HE ALLOWED CREDIT OF ONLY RS. 6,428/- BEING THE TDS AS CLAIMED IN THE RETURN OF INCOME. HE SUBMITT ED THAT WHEN THE INCOME IS ADDED, CREDIT FOR TDS SHOULD ALSO BE ALLOWED BY AO. THE LD. DR OF REVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 9. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND THAT ON PAGE NO. 5 OF ASSESSMENT ORDER, THE AO HAS MADE ADDITION OF INTER EST INCOME OF RS. 42,644.94 AND THE AO HAS NOTED THAT TDS OF RS. 5,29 3/- WAS DEDUCTED AGAINST THIS INCOME. BUT BEFORE ALLOWING CREDIT OF TDS FOR THIS AMOUNT, IT HAS TO BE SEEN WHETHER TDS WAS PAID TO CREDIT OF CENTRAL GOVE RNMENT BY CONCERNED DEDUCTORS OR NOT. HENCE I FEEL IT PROPER TO RESTOR E THIS MATTER ALSO BACK TO THE FILE OF AO FOR FRESH DECISION ON THIS ASPECT AND TO ALLOW CREDIT OF SUCH TDS OF RS. 5,293/- AS PER LAW AFTER PROVIDING ADEQUATE OPP ORTUNITY OF BEING HEARD TO THE ASSESSEE. 10. THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2011-12 IS ALLOWED FOR STATISTICAL PURPOSES IN THE TERMS INDICATED ABOVE. 11. NOW I TAKE UP THE APPEAL OF THE ASSESSEE FOR AS SESSMENT YEAR 2012-13. IN THIS YEAR, IT WAS SUBMITTED BY LD. AR OF ASSESSEE T HAT ONE ISSUE IS REGARDING DISALLOWANCE U/S. 14A WHICH IS IDENTICAL TO ASSESSM ENT YEAR 2011-12 AND SHOULD BE DECIDED ON SIMILAR LINE. HE FURTHER SUBM ITTED THAT THERE IS ONE MORE GROUND NO. 6 AS PER WHICH THIS IS THE GRIEVANCE OF THE ASSESSEE THAT LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF EXPENDITURE AT 10% OF TOTAL EXPENDITURE ON AN ESTIMATE BASIS. IN THIS REGARD, HE SUBMITTED THAT THE P&L ACCOUNT FOR ASSESSMENT YEAR 2012-13 IS AVAILABLE ON PAGE NO. 45 OF PAPER BOOK AS PER WHICH THERE IS INDIRECT INCOME OF RS. 4 2,96,932/- AND INDIRECT EXPENSES OF RS. 28,13,386.86 AND THE AO HAS DISALLO WED 10% OF ENTIRE INDIRECT EXPENSES. AT THIS JUNCTURE, THE BENCH OBSERVED THA T THE INCOME REPORTED IN THIS YEAR IS CREDITORS WRITTEN OFF, DIRECTOR -PROFESSION AL FEE, DIVIDEND RECEIVED, INTEREST RECEIVED FROM BANKS, INTEREST RECEIVED -K. G. ENTERPRISES AND PROFIT ON SALE OF SHARES. THE BENCH OBSERVED THAT THERE IS N O BUSINESS INCOME IN THE PRESENT YEAR AND THEN HOW ANY EXPENDITURE IS ALLOWA BLE IN THE PRESENT YEAR ITA NOS. 1452 & 1453/BANG/2018 PAGE 7 OF 8 INCLUDING ACCOUNTANCY CHARGE RS. 19,000/-, CLUB E XPENSES-RS. 7,327/-, COMMISSION PAID RS. 2 LAKHS, DEPRECIATION RS. 1 ,50,389/-, ELECTRICITY CHARGES RS. 1,13,366/-, INTEREST-SUNDARAM FINANCE HOUSING LOAN RS. 14,29,951/-, PROCESSING FEE-LOAN SUNDARAM FINANCE RS. 4,19,981/-, TELEPHONE CHARGES RS. 55,623.56, TRAVELLING EXPEN SES RS. 48,500/- ETC. IN REPLY IT WAS SUBMITTED BY LD. AR OF ASSESSEE THA T UP TO ASSESSMENT YEAR 2011-12, THE ASSESSEE WAS HAVING INCOME ON ACCOUNT OF COMMISSION RECEIVED WHICH WAS RS. 17.45 LAKHS IN ASSESSMENT YEAR 2011-1 2 AND ASSESSMENT YEAR 2012-13 IS THE LAST YEAR OF ASSESSEES BUSINES S AND THEREFORE, THE EXPENSES WERE REQUIRED BY ASSESSEE AND HENCE, THE SAME SHOULD BE ALLOWED IN FULL. THE LD. DR OF REVENUE SUPPORTED THE ORDER S OF AUTHORITIES BELOW. 12. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS NO TED ABOVE, THERE IS NO BUSINESS INCOME IN THE PRESENT YEAR. THE MAJOR EXPENSES DEB ITED IN P&L ACCOUNT IS RS. 14,29,951/- BEING INTEREST ON ACCOUNT OF SUNDAR AM FINANCE HOUSING LOAN AND RS. 4,19,981/- BEING PROCESSING FEE IN RESPECT OF LOAN FROM SUNDARAM FINANCE. THE INTEREST ON HOUSING LOAN IS ALLOWABLE IF THE HOUSE PROPERTY IS ACQUIRED BY USING SUCH HOUSING LOAN AND RENTAL INCO ME IS EARNED AND/OR IF SUCH PROPERTY IS USED FOR BUSINESS PURPOSES. AS PER P&L ACCOUNT, NO RENTAL INCOME HAS BEEN RECEIVED AND THERE IS NO BUSINESS INCOME O R BUSINESS ACTIVITY AND THEREFORE, SUCH INTEREST ON SUNDARAM FINANCE HOUSIN G LOAN AND PROCESSING FEES FOR LOAN FROM SUNDARAM FINANCE ARE NOT AN ALLO WABLE EXPENDITURE. SIMILARLY, COMMISSION PAID OF RS. 2 LAKHS IS ALSO N OT ALLOWABLE IN THE ABSENCE OF ANY BUSINESS ACTIVITY. HOWEVER THE AO HAS MADE DISALLOWANCE OF ONLY 10% OF THE TOTAL EXPENSES DEBITED IN P&L ACCOUNT OF RS. 28.13 LAKHS BEING DISALLOWANCE OF RS. 2,81,338/- ONLY WHEREAS IN MY C ONSIDERED OPINION, THE EXPENSES OF RS. 2 LAKHS ON ACCOUNT OF COMMISSION PA ID, RS. 14,29,951/- BEING INTEREST IN RESPECT OF SUNDARAM FINANCE HOUSING LOA N AND RS. 4,19,981/- BEING PROCESSING FEE FOR LOAN FROM SUNDARAM FINANCE ETC, ARE NOT ALLOWABLE AT ALL BUT THE TRIBUNAL IS NOT SUPPOSED TO INCREASE TH E DISALLOWANCE WHILE DECIDING THE APPEAL OF THE ASSESSEE AND THEREFORE, I HOLD TH AT NO INFERENCE IS CALLED FOR IN THE ORDER OF CIT(A) ON THIS ISSUE. REGARDING TH E DISALLOWANCE U/S. 14A, THE MATTER IS RESTORED BACK TO THE FILE OF AO FOR FRESH DECISION IN THE LIGHT OF THE ITA NOS. 1452 & 1453/BANG/2018 PAGE 8 OF 8 ORDER OF SPECIAL BENCH OF THE TRIBUNAL RENDERED IN THE CASE OF ACIT VS. VIREET INVESTMENT (P) LTD. (SUPRA) AFTER PROVIDING ADEQUAT E OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IF ANY HIGH COURT JUDGEMENT IS AV AILABLE ON THIS ISSUE BY THAT POINT OF TIME, THEN THE SAME SHOULD ALSO BE CONSIDE RED. THIS ISSUE IS ALLOWED FOR STATISTICAL PURPOSES. 13. THE APPEAL OF ASSESSEE FOR ASSESSMENT YEAR 2012 -13 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 14. IN THE COMBINED RESULT, THE APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2011-12 IS ALLOWED FOR STATISTICAL PURPOSES AND THE APPEAL FOR ASSESSMENT YEAR 2012-13 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DA TE MENTIONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 20 TH JULY, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.