Ch.Ramoji Rao(HUF), Secunderabad V. ACIT, Hyderabad

ITA 1506/HYD/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87380 (ITAT-HYDERABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 03-02-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 03-12-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G APARNA RAO
• Assessee Lawyers: K GOPAL CHOUDHARY
• Keywords: Capital asset; Business expenditure
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND SMT.ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. ASST YEAR APPELLANT RESPONDENT 1087/HYD/2010 1460/HYD/2010 1461/HYD/2010 1451/HYD/2011 2005 - 06 2006 - 07 2007 - 08 2008 - 09 ASSISTANT COMMISSIONER OF INCOME - TAX CIRCLE 16(2), HYDERABAD M/S. CH. RAMOJI RAO - (HUF), HYDERABAD (PAN AADHR 6836 E) 1 5 0 6 /HYD/2010 1507/HYD/2010 1536/HYD/2011 2006 - 07 2007 - 08 2008 - 09 M/S. CH. RAMOJI RAO (HUF), HYDERABAD (PAN AADHR 6836 E) ASSISTANT COMMISSIONER OF INCOME - TAX CIRCLE 16(2), HYDERABAD ASSESSEE BY : SHRI K.GOPAL CHOUDHARY RE VENUE BY : S MT. G.APARNA RAO DR DATE OF HEARING 04 . 2 .201 5 DATE OF PRONOUNCEMENT 20. 2.2015 O R D E R PER P.M.JAGTAP, ACCOUNTANT MEMBER : OUT OF THESE SEVEN APPEALS, SIX APPEALS ARE CROSS APPEALS FOR ASSESSMENT YEAR 2006 - 07, 2007 - 08 AND 2008 - 09, WHILE THE REMAINING ONE IS THE APPEAL OF THE REVENUE FILED FOR ASSESSMENT YEAR 2005 - 06. SINCE SOME OF THE ISSUES INVOLVED IN TH E SE APPEALS ARE COMMON, THE SAME H A VE BEEN H E ARD TOGETHER AND ARE BEING DISPOSED OF BY A SINGLE CONSO L IDATED ORDER FOR THE SAKE OF CONVENIENCE. I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 2 REVEN UES APPEAL FOR ASSESSMENT YEAR 2005 - 06 : 2. FIRST, WE SHALL TAKE UP THE APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2005 - 067, BEING I TA N O. 1087/HYD/ 2010, WHICH IS DI R ECTED AGAINST T H E ORD E R OF THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) V, HYDERABAD D A TED 20.5.2010. 3. GRO U N DS NO.1 AND 7 RAISED BY THE RE VENUE IN THIS APPEAL ARE GENERAL, REQUIRING NO SPECIFIC ADJU D I C ATION. 4. THE COMMON ISSUE RELATING TO THE DISALLOWANCE OF INTEREST ATTRIBUTABLE TO THE SHARE APPLICATION MONEY MADE BY THE ASSESSI NG OFFICER AND PARTLY SUSTAINED BY THE LEARNED CIT(A) IS RAISED BY THE RE VENUE IN GROUNDS NO.2 TO 4 OF THIS APPEAL, WHICH READ AS UNDER - 2. THE LEARNED CIT(A) RELYING ON THE HON'BLE PUNJAB & HARYANA HIGH COURT DECISION IN THE CASE OF HARYANA LAND RECLAMATION AND DEVELOPMENT VS. CIT(2008) 302 ITR 218, ERRED IN HOLDING THAT SECTION 14A IS NOT APPLICABLE TO DISALLOWANCE OF INTEREST ON INVESTMENT IN SHARE APPLICATION MONEY. 3. THE LEARNED CIT(A) OUGHT TO HAVE RECOGNISED THAT IN VIEW OF CLOSE PROXIMIT Y OF THE ASSESSEE - HUF LAND ITS SISTER CONCERNS, NO SHARES HAVE BEEN ALLOTTED AND THE BORROWED FUNDS ARE LYING IN SHARE APPLICATION MONEY DEPOSIT. AS SUCH, THE CIT(A) SHOULD HAVE UPHELD THE ACTION OF THE ASSESSING OFFICER IN INVOKING THE PROVISIONS OF SECIR TON14A. 4. THE LEARNED CIT(A) SHOULD HAVE RECOGNIZED THAT THE ASSESSEE IS BORROWING FUNDS TO PLAY THE INTEREST COSTS AND HELD THAT THE ASSESSING OFFICER IS CORRECT IN CALCULATING THE DISALLOWED INTEREST ON CUMULATIVE BASIS. 5. THE ASSESSEE IN THE PR E SEN T CASE IS A HUF WHICH FI L ED ITS RETURN OF INCOME FOR THE YEAR UN D ER CONSIDERATION ON 27.10.2005 DECLARING A LOSS OF R S .252.59 CRORES, APART FROM THE CAPITAL LOSS OF I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 3 RS.35.72 LAKHS. DURING THE COU R SE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE - HUF HAS BORROWED SUBSTANTIAL INTEREST B E ARING FUN D S AND TH E SAME ARE PARTLY INVESTED IN THE SHARE APPLICATION MONEY PAID TO THE OTHER GROUP CONCERNS. HE ALSO NOTICED THAT THE SHARE APPLI C ATION MONEY S O PAID HAS B E EN KEP T PENDING OVER THE YEARS WITH THE SISTER CONCERNS, WITHOUT ALLOTMENT OF ANY SHARES AND EVEN FOR MAKING PAYMENT OF INTEREST ON THE BORROWED FUN D S UTILIZED FOR MAKING INVESTMENT IN THE SHARE APPLICATION MONEY, THE ASSESSEE HAS BORROWED MORE FUN D S AND PA ID INTEREST THEREON. HE HELD HAT SINCE NO INCOME WAS GENERATED OUT OF THE IN VE STMENTS MADE BY THE ASSESSEE IN THE SHARE APPLICATION MONEY PAID TO THE SI S TER CONCERNS, NOT ONLY THE INTEREST PAID ON BORROWED FUNDS FOR MAKING SUCH INVESTMENTS WAS LIABLE TO B E DISALLOWED UN D ER S.14A, BUT EVEN THE INTEREST PAID ON TH E FUN D S FURTHER BORROWED BY THE ASSESSEE TO MAKE SUCH PAY ME NT WAS ALSO LIABLE TO BE DISALLOWED ON A COMPOUNDING BASIS. ACCOR D INGLY, HE WORKED OUT SUCH INTEREST ON COMPOUNDING BASIS ATTRIBUTABLE TO THE INVESTMENTS MADE BY TH E ASSESSEE IN TH E SH A RE APPLICATION MONEY P A ID TO THE SISTER CONCERNS AT RS.54,03,88,060 AND MADE A DISALLO W AN C E TO THAT EXTENT UN D ER S.14A. 6. THE DISALLOWANCE OF RS.54,03,88,060 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF I NTEREST ATTRIBU T ABLE TO THE INVESTMENTS MADE IN SHARE APPLICATION MONEY ON COMPOUNDING BASIS WAS CHALLENGED BY THE ASSESSEE IN AN APPEAL FIL E D BEFORE THE LEARNED CIT(A), AND AFTER CONSIDERING THE SUBMI S SION S MADE ON BEHALF OF THE ASSESSEE AS WELL AS THE MATERIAL AVAILABLE ON R E CORD, THE LEARNED CIT(A) HELD THAT TH E RE BEING NO INCOME EARNED BY TH E ASSESSEE EITHER EXEMPT OR OTHERWISE , FROM THE SHARE APPLICATION MONEY PAID TO THE SISTER CONCERNS, THE P R OVI S ION S OF S.14A WERE NOT APPLICABLE, TO MAKE A DISALLOWANCE ON ACCOUNT OF INTEREST ATTRIBUTABLE TO THE IN V ESTM E NT MADE IN TH E SH A RE APPLICATION I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 4 MONEY. HE, HOW E VER, HELD THAT BORROWING THE FUNDS AND UTILISING THE SAME FOR M A KING IN V ESTMENT IN THE SHARE APPLICAT ION MONEY O F THE SIST E R CON C ERN WAS NOT THE BU S IN E SS ACTIVITY OF THE ASSESSEE, AND THER EF OR E , INTEREST PAID BY THE ASSESSEE ON THE BORROWED FUN D S TO THE EXTENT ATTRIBUTABLE TO THE I NVESTMENTS MADE IN TH E SH A RE APPLICATION MONEY WAS LIABLE TO B E DISALLOWED. ACCOR D INGLY, THE LEARNED CIT(A) CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INTEREST ATTRIBU T ABLE TO THE IN V ESTM E N T S MADE IN TH E SH A RE A PPLI CA TION MONEY , ALTHOUGH ON A DIFFERENT GROUND. 7. AS REGARDS THE ALTERNATIVE CONTENTION OF TH E ASSESSEE THAT THE QUAN T UM O F DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INTEREST ON COMPOUNDING BASIS IS NO T JUSTIFIED, AS THE SAME CONS T ITUTES ONLY A NOTIONAL DISALLOWANCE AND THAT IT SHOULD B E RESTRICTED TO THE INTERES T ACTUALLY P A ID BY THE ASSESSEE ON THE B O R R OWED FUN D S WHICH WERE UTILI S ED FOR MAKIN G PAYM E NT OF SHARE APPLICATION MONEY, THE LEARNED CIT(A) FOUN D MERIT IN THE SAME . HE ACCORDINGLY DIRECTED THE ASSESSING OFFICER TO VERIFY THE EXACT AMOUNT OF INTEREST EXPE NDITURE CLAIMED BY THE ASSESSEE, WITH RESPECT TO THE CORRESPONDING BORROWINGS AND RESTRICT THE DISALLOWANCE TO THAT EXTENT. 8. AGGRIEVED BY THE ORDER OF THE LD CIT(A) ON THIS ISSUE, REVENUE IS IN APPEAL BEFORE US. 9. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. AS RIGHTLY CONTENDED BY THE LEARNED COUNSEL FOR THE ASSESSEE, IN VE STMENT MADE IN THE SHARE APPLICATION MONEY TILL ITS CONVERSION INTO SHA R ES BEING NOT CAPABLE OF EARNING ANY INCOME, WHICH IS EXEMPT F R OM TAX, EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO THE MAKING OF SUCH INVESTMENTS INCLUDING INTEREST PAID ON THE BORROWED FUNDS TO I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 5 THE EXTENT INVESTED IN SHARES APPLICATION MONEY CANNOT BE DISALLOWED BY INVOKING THE PROVISIONS OF S.14A. THE LEARNED CIT(A), IN OUR OPINION, THEREFORE, WAS CORRECT IN HOLDING THAT T HE PROVISION S OF S.14A WERE NOT APPLICABLE FOR MAKING DISALLOWANCE ON ACCOUNT OF INTEREST ATTR I B U TABLE TO THE INV E STM E N T S MADE BY THE ASSESSEE IN SHARE APPLICATION MONEY, BUT FINALLY CONFIRMIN G THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON AC C OUN T OF SUCH INTEREST BY HOL D IN G THAT THE SAME DID NO T REPRESENT THE EXPENDITURE WHOLLY AND EXCLUSIVELY INCURRED BY TH E ASSESSEE FOR T H E PU R PO S E OF ITS BUSINESS. AS REGARDS QUANTU M OF INTEREST DISALLOWED BY THE ASSESSING OFFICER, WE FIND THAT THE DISALLOWANCE OF INTEREST COMPUTED BY THE ASSESSING OFFICER ON COM P O U NDING BASIS WA S NO T SUSTAINABLE, AS THE SAME R E SULTED IN NOTIONAL DISALLOWANCE, WHICH IS NOT P ERMISSIBLE IN LAW, AND T HE LEARNED CIT(A) TH E R E FORE, WAS FULLY JU S TIFIED IN DIRECTING THE ASSESSING OFFICER TO V E RIFY THE ACTUAL EXPENDITURE INCURRED BY TH E ASSESSEE ON ACCOUNT OF INTEREST ON THE BORROWED FUNDS UTILI S ED FOR MAKING PAYMENT OF SHARE APPLICATION MONEY AND TO REST RICT THE DISALLOWANCE TO THAT EXTENT. WE THEREFORE, FIND NO M E R I T IN GROUN D NO S . 2 TO 4 RAISED BY THE REVENUE IN ITS APPEAL AND DISMISS THE SAME. 10. IN G R OUNDS NO.5 AND 6, THE REVENUE HAS CHALL E N G ED THE ACTION OF THE LEARNED CIT(A) IN DELETING THE ADDI TION MADE BY TH E ASSESSING OFFICER BY WAY OF DISALLOWANCE ON ACCOUNT OF INTEREST ATTRIBUTABLE TO THE INVESTMENT MADE BY TH E ASSESSEE IN LANDED PROPERTY. 11. AS NOTICED BY TH E ASSESSING OFFICER DURING TH E COU R SE OF ASSESSMENT P R OCEE D IN G S, THE ASSESSEE HAD UTILI S ED THE B ORROWED FUNDS PAR T LY FOR MAKING IN V ES T MENT IN LANDED PROPERTY. ACCO RD ING TO HIM, INTEREST ATTRIBU T ABLE TO SUCH INVESTMENTS WAS LIABL E TO BE DISALLOWED UN D ER S.14A OF THE ACT. HE ALSO HELD T H AT THE LANDED I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 6 PROPERTY HAVING NOT BEEN USED BY TH E ASSESSEE FOR THE PU R PO S ES OF ITS BU S IN E SS, INTER E ST ATTRIBUTABLE TO THE INVESTMENT MA D E IN TH E LANDED PROPERTY WAS NO T ALLOWABLE AS DEDUCTION EVEN AS PER S.36(1)( III ) OF THE ACT. HE FURTHER HELD THAT SUCH INTEREST , IN ANY CA S E , WAS REQUIRED TO BE CA PITALIZED TO THE RESPECTIVE LAND ACCOUNT TILL THE SAME W AS PUT TO USE FOR THE PU R POS E OF BUSINESS. ACCORDINGLY, INTEREST ATTRIBUTABLE TO THE INVESTMENT MADE IN THE LANDED PROPERTY TO THE EXTENT OF R S .5,70, 68, 7 2 8 W A S DISALLOWED BY TH E ASSESSING OFFICER. 12. DU R IN G TH E COURSE OF AP PE LLATE PROCE E DIN G S BEFORE THE LEARNED CIT(A), IT WAS SUBMITTED BY TH E ASSESSEE THAT THE P R OVI SI ON S O F S.14A WERE NO T APPLICABLE TO MAKE DISALLOWANCE ON ACCOUNT OF INTEREST ATTRIBUTABLE TO THE IN V ESTM E N T MADE IN THE LANDED PRO P ER TY. IT WAS ALSO SUBMITTED THAT THE LANDED PROP E RTIES IN QUESTION WERE PURCHASED BY TH E ASSESSEE FOR ITS BUSINESS PURPO S ES AND THE SAME WERE DULY REFLECTED IN THE BALANC E SHEET AS CAPITAL ASSETS PERTAINING TO THE BU S IN E SS. THE LEARNED CIT(A) FOUN D MERIT IN TH E CONTENTION S RAISED ON BEHALF OF THE ASSESSEE AND H E LD THAT THE P R OVIS I ON S OF S.14A WERE NO T AP P LI C ABL E TO MAKE DISALLOWANCE ON ACCOUNT OF INTEREST ATTRIBUTABLE TO THE IN V ESTM E N T S MA D E IN THE LANDED PROPERTY AS THE SAID INVESTMENT WAS NO T GOING TO YIELD ANY IN C OM E , WH I CH WOULD EXEMPT F R OM TAX. HE ALSO HELD THAT THE ASSESSEE H A VING PURCHASED THE LANDED PROP E R T IES FOR THE PURPOSES OF HIS BU S IN E SS AND THE ASSESSING OFFICER HAVING FAILED TO SHOW THAT THE SAID PROPERTIES WERE NON - BUSINESS CAPITAL ASSET S OF THE ASSESSEE, INTEREST EXPENDITURE INCURRED BY THE ASSESSEE FOR MAKING INVESTMENT IN LANDED PROPERTIES WAS ALLOWABLE AS BUSINESS EXPENDITURE. 13. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. THE L EARNED COUNSEL I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 7 FOR TH E ASSESSEE HAS FURNI S HED BEFO R E US DETAILS SHOWING THAT INVESTM E N T WAS MADE IN FOUR LANDED PROPERTIES BY TH E ASSESSEE DURING THE RELEVANT PERIOD AT TIRUPATI INDUSTRIAL ESTATE, SHAMSHABAD, GACHCHIBOWLI AND AT RAMOJI FILM CITY. HE H AS SUBMI T TED T HAT OUT OF THESE FOUR PROPERTIES, TWO PROPERTIES AT TIRPUATI INDU S TRIAL ESTATE AND AT RAMOJI FILM CITY W E RE ALREADY PUT TO USE BY THE ASSESSEE FOR THE PURPOSE OF HIS BUSINESS, WH E REAS THE REMAINING TWO PROP E RT I ES AT SHAMSHABAD AND GACHCHIBO WLI WERE ACQUIRED BY TH E ASSESSEE FROM I T S OWN FUNDS , IN THE FORM OF ACCUMULATED PROFITS OVER THE YEARS. HE HAS CONTENDED THAT NO DISALLOWANCE ON ACCOUNT OF INTEREST ATTRIBUTABLE TO THE INVESTMEN T S MADE IN THE LANDED PROP E RTIES , THEREFORE, CAN JU S TIFIABLY BE MADE. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND, H AS CONTENDED THAT SIN C E THIS SUBMISSION MADE BY THE LEARNED COUN SE L FOR THE ASSESSEE NOW BEFORE THE T RIBUNAL W AS NO T M A DE SPECIFICALLY IN THAT MANNER BEFORE THE AUTHO R ITI E S BELOW , THE ASSESSING OFFICER MAY BE ALLOWED AN OPPORTUNITY TO VERIFY THE SAME. SIN C E THE LEARNED COUN S EL FOR THE ASSESSEE HAS NO OBJECTION IN THIS RE G ARD, WE RESTORE THIS I S SUE TO THE FILE O F THE ASSESSING OFFICER FOR DECI D IN G THE SAME AFRESH , AFT E R VERIFYING T HE SPECIFIC SUBMI S SION S MADE BY TH E LEARNED COUN S EL FO R THE ASSESSEE BEFORE US , IN ACCORDANCE WITH LAW AND AFTER GIVING SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESSEE . GROUNDS NO.5 AND 6 ARE ACCORDINGLY TR E ATED AS ALLOWED FOR STATISTICAL PURPOSES. 14 . IN THE RESULT, REVENUES APPEAL FOR ASSESSMENT YEAR 2005 - 06, BEING ITA NO. 1087 /HYD/2010, IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. CROSS APPEALS FOR ASSESSMENT YEAR 2006 - 07 15. NOW, WE SHALL TAKE UP THE CROSS APPEALS FOR ASSESSMENT YEAR 2006 - 07, BEING ITA NO.146 0 /HYD/2010 OF THE R E VENU E AND I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 8 ITA NO.1506/HYD/2010 OF THE ASSESSEE, WHICH ARE DIRECTED AGAINST THE O R DER OF THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) V, HYDERABAD DATED 3.9.2010. REVENUES APPEAL: 16. IN THE APPEAL O F TH E REVENUE, GROUNDS NO.1 AND 7 ARE GENE R AL, SEEKING NO SPECIF I C ADJU DI CATION, WHIL E REMAINING GROUNDS NO.2 TO 6 READ AS UN D ER - 2. THE LEARNED CIT(A) RELYING ON THE HON'BLE PUNJAB & HARYANA HIGH COURT DECISION IN THE CASE OF HARYANA LAND RECLAMATION AND DEVELOPMENT V S. CIT(2008) 302 ITR 218, ERRED IN HOLDING THAT SECTION 14A IS NOT APPLICABLE TO DISALLOWANCE OF INTEREST ON INVESTMENT IN SHARE APPLICATION MONEY. 3. THE LEARNED CIT(A) OUGHT TO HAVE RECOGNISED THAT IN VIEW OF CLOSE PROXIMITY OF THE ASSESSEE - HUF LAND ITS SISTER CONCERNS, NO SHARES HAVE BEEN ALLOTTED AND THE BORROWED FUNDS ARE LYING IN SHARE APPLICATION MONEY DEPOSIT. AS SUCH, THE CIT(A) SHOULD HAVE UPHELD THE ACTION OF THE ASSESSING OFFICER IN I NVOKING THE PROVISIONS OF SECIRTON14A. 4. THE LEARNED CIT(A) SHOULD HAVE RECOGNIZED THAT THE ASSESSEE IS BORROWING FUNDS TO PLAY THE INTEREST COSTS AND HELD THAT THE ASSESSING OFFICER IS CORRECT IN CALCULATING THE DISALLOWED INTEREST ON CUMULATIVE BASIS. 5. THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION MADE TOWARDS DISALLOWANCE OF INTEREST ON INVESTMENT IN LANDS ON THE GROUND THAT NO INCOME IS YIELDED DURING THE CURRENT YEAR. 6. THE LEARNED CIT(A) OUGHT TO HAVE UPHELD THE ACTION OF THE ASSESS ING OFFICER IN DISALLOWING DRAWINGS & INTEREST ON DRAWINGS IN VIEW OF THE FACT THAT THE ENTIRE HUF IS RUNNING ON BORROWED FUNDS; THE INVESTMENTS MADE IN VARIOUS UNITS OF HUF ARE OUT OF THESE BORROWED FUNDS ONLY; AND THE ASSESSEE - HUF ON THE WHOLE IS RETURN ING LOSSES YEAR AFTER YEAR THEREBY THERE ARE NO ACCUMULATED PROFITS/INTERNAL ACCRUALS. I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 9 17. AS AGREED AT THE TIME OF HEARING BEFORE US, BY THE LEARNED REPRESENTATIVES OF BOTH THE SIDES, THE COMMON ISSUE INVOLVED IN GROU N DS NO.2 TO 4 RELATIN G TO DISALLOW ANCE MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LEARNED CIT(A) ON ACCOUNT OF INTEREST ATTRIBUTABL E TO TH E INVESTMENTS MADE IN SHARE APPLICATION MONEY, IS SIMILAR TO THE ONE INVOLVED IN ASSESSMENT YEAR 2005 - 06, WHICH HAS ALREADY B E EN DECIDED BY US IN THE FO R EGOING PARAS OF THI S ORDER. AS THE MATERIAL F ACTS RELATING TO THIS ISSUE AS INVOLVE D IN TH E Y E AR UN D ER CON S I D E R ATION AS WELL AS THE ARGUM E N T S OF BOTH THE SIDES ARE SIMILAR TO ASSESSMENT YEAR 2005 - 06, WE FOLLOW OUR CONCLUSION DRAWN IN ASSESSMENT YEAR 2005 - 06 AND UPHOL D TH E IMPU G N E D ORDER O F THE LEARNED CIT(A). GROUNDS NO.2 TO 4 ARE ACCORDINGLY DISMISSED. 1 8 . AS REGARDS THE ISSUE INVOLVED IN GROUND NO.5, IT RELATES TO DISALLOWANCE OF INTEREST ATTRIBUTABLE TO THE INVESTMENTS MADE IN LAN DED PROPERTIES. AS AGREED AT THE TIME OF HEARING BEFORE US BY THE LEARNED REPRESENTATIVES OF BOTH THE SIDES, THIS ISSUE IS SIMILAR TO THE ONE INVOLVED IN ASSESSMENT YEAR 2005 - 06, WHICH HAS ALREADY BEEN DECIDED BY US IN THE FOREGOING PARAS OF THIS ORDER. AS THE MATERIAL FACTS RELATING TO THIS ISSUE AS INVOLVE D IN THE YEAR UNDER CONSIDERATION AS WELL AS THE ARGUMENTS OF BOTH THE SIDES ARE SIMILAR TO ASSESSMENT YEAR 2005 - 06, WE FOLLOW OUR CONCLUSION DRAWN IN ASSESSMENT YEAR 2005 - 06 AND RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH, AFTER VERIFYING THE SPECIFIC SUBMISSIONS MADE BY THE LEARNED COUNSEL FOR THE ASSESSEE BEFORE US, IN ACCORDANCE WITH LAW AND AFTER GIVING SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESSEE. GROUNDS NO.5 IS ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 1 9 . AS R E GARDS THE ISSUE INVOLVED IN GROUND NO.6 R E LATING TO DISALLOWANCE OF INTEREST ATTRIBUTABLE TO THE WITHDRAWALS MADE BY I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 10 THE ASSESSEE OUT OF BORROWED FUNDS, IT IS OB SE RVED TH AT THE ASSESSEE - H UF DURING THE YEAR UNDER CONSIDERATION HA D MADE WITHDRAWALS FROM USHAKIRON MOVIES AS W ELL AS FORM OTHER CONCERNS FOR PERSONAL PU R PO SE S. ACCOR D ING TO THE ASSESSING OFFICER, THESE WITHDR A WALS W E RE MADE FROM THE BORROWED FUN D S AND THEREFORE, INTEREST PAID ON THE BORROWED FUN D S TO THE EXTENT ATTRIBUTABLE TO THE WITHD R AWALS MADE WAS LIABLE TO B E DISALLOWED ON COMPOUNDING B AS IS. HE , TH E R E FORE, COMPU T ED SUCH INTEREST AT RS.39,37,464 AND MADE A DISALLOWANCE TO THAT EXTENT. ON APPEAL, THE DISALLOWED CIT(A), DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON THIS ISSUE, ACCEPTING TH E CONTENTION O F THE ASSESSEE T HAT WITHDRAWALS FOR PERSONAL AND HOUSEHOLD PURPOSE WER E MADE OUT O F P ROFITS GENERATED IN USHODAYA NEWS AGENCY AND NOT OUT OF BORROWED FUNDS. 20 . WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD.. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS CON T EN D ED THAT TH E CLAIM OF TH E ASSESSEE OF HAVING MADE THE WITHDRAWALS FOR HOUSEHOLD PURPOSES OUT OF THE PROFITS GENERATED IN M/S. USHODAYA NEWS AGENCY WAS NO T SUPPORTED BY A N Y EVIDENCE AND STILL THE LEARNED CIT(A) ACCEPTED THE SAME WITHOUT DISCUSSING THE RELEVAN T FACTS AND FIGURES AND WITHOUT R E FE R RING TO ANY DOCUM E N T ARY EVI DE NCE. WE FIND MERIT IN THIS CON T EN T ION OF THE LEARNED DEPARTMENTAL REPRESENTATIVE. I T I S OBSERVED T H A T NO CASE WAS MADE OUT BY THE ASSESSEE BEFORE THE ASSESSING OFFICER TO SHOW THAT THE WI T H D RAWALS FOR HOU SE HOL D PU RP O S ES WERE M ADE BY THE ASSESSEE OUT O F THE PROFITS GENERATED IN M /S. USHODAYA NEWS A G ENCY AND THIS CLAIM APPARENTLY MADE BY TH E ASSESSEE FOR THE FIRST TIME BEFORE HIM WAS ACCEPTED BY THE LEARNED CIT(A) WITHOUT DISCUSSING TH E RELEVANT FAC TS AND FIGURES AND WITHOUT REFERRING TO ANY DOCUM E N T ARY EVIDENCE, WHICH SUPPO R TED THE CLAIM O F THE ASSESSEE. AS CONTENDED BY THE LEARNED COUNSEL FOR I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 11 TH E ASSESSEE , THE ASSESSEE , HOWEVER, IS IN A POSITION TO ESTABLI S H HIS CLAIM B Y PRODUCING THE RELEVANT EVID ENCE AS WELL AS BY FURN I SHIN G THE RELEVANT FACTS AND FIGURES . HEW HAS REQUESTED THAT ONE MORE OPPORTUNITY MAY , THEREFORE, BE GIVEN TO THE ASSESSEE TO MAKE OUT ITS CASE B E FORE THE ASSESSING OFFICER. SIN C E THE LEARNED DEPARTMENTAL REPRESENTATIVE ALSO HAS NO OBJECTION IN THIS REGARD, WE SET ASIDE THE ORDER OF LEARNED CIT(A) ON THIS ISSUE AND RESTORE THIS SAME TO THE FILE O F THE ASSESSING OFFICER FOR DECIDING IT AFRESH, AFTER G I VING THE ASSESSEE SUFFIC I ENT OPP O R T UNITY TO ESTABLISH ITS CLAIM TH A T THE WITH D R A WALS FOR HOU S E HOL D EXPEN S ES WERE MADE OUT OF THE P R O F ITS GENERATED IN USHODAYA NEWS AGENCY AND NOT OUT OF THE BORROWED FUN D S. GROUND NO.6 OF THE REVENUES APPEAL FOR ASSESSMENT YEAR 2006 - 07 IS ACCORDINGLY TREATED AS PAR T LY ALL OW ED FOR STATISTICAL PURPOSES . 2 1. IN THE RESULT, REVENUES APPEAL FOR ASSESSMENT YEAR 2006 - 07, BEING I TA N O . 1460/HYD/2010 , IS PARTLY ALLO WE D FOR STATISTICAL PURPOSES. ASSESSEES APPEAL: 22 . GROUNDS NO.1 AND 5 RAISED I N THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2006 - 07, BEING ITA NO.1506/HYD/2010, ARE GENERAL SEEKING NO SP EC IFIC ADJU D I C ATION. GROUN D NO.2 REL A TING TO THE DISALLOWANCE OF INTEREST MADE BY THE ASSESSING OFFICER A ND SUSTAIN E D BY THE LEARNED CIT(A) TO THE EXTENT O F RS.59,29 CRORES ON ACCOUN T OF INTEREST ATTR IBUTABLE TO THE INVESTMENT MADE IN SH A RE APPLICATION MONEY, I S N O T PRESSED BY THE LEARNED COUN S EL FO R TH E ASSESSEE AT THE TIME OF H E ARING B E FORE US. THE SAME IS ACCO RD INGLY DISMISSED. 23 . THE ISSUE INVOLVED IN GROUND N O.3 OF THE ASSESSEES APPEAL FOR AS SESSMENT YEAR 2006 - 07 R E LATES TO TH E DISALLOWANCE I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 12 MADE BY THE ASSESSING OFFICER AND SU S TAI N ED BY THE LEARNED CIT(A) TO THE EXTENT OF RS.4.39 CRORES ON ACCOUN T OF INTEREST ATTRIBUTABLE TO THE INV E STM E NT ALLEGEDLY MADE B Y THE ASSESSEE IN TH E RESIDENTI A L BUILDING OUT OF BORROWED FUN D S. 24 . AS NOTICED BY THE ASSESSING OFFICER DURING TH E COUR S E OF ASSESSMENT PROCEEDINGS, TH E ASSESSEE - HUF HAD CONSTRUCTED RESIDENT IA L BUILDING FOR ITS OWN OCCUPATION AT RAMOJI FILM CITY AND THE COST OF THE SAID CONSTRUCTION WAS MET FROM THE BORROWED FUN D S. SIN C E THE SAID INVESTMENT WAS NO T MADE BY THE ASSESSEE FOR ITS B U SINESS PURPOSES, THE ASSESSING OFFICER HELD THAT THE INTEREST ATTRIBUTABLE TO THE INVESTMENT MADE IN THE R E SIDENTIAL BUIL D IN G AT RAMOJI FILM CITY WAS LIABL E TO BE DISALLOWED ON COMPOUN D ING BASIS. ACCOR D INGLY, HE WORKED OUT TH E INTEREST TO BE DISALLO WE D AT RS.4 .39 CRORES AND MADE A DISALLOWANCE TO THAT EXTENT. 25 . ON APPEAL, THE LEARNED CIT(A) FOUND THAT A SIMILAR ISSUE INVOLVING IDE N TICAL FACTS AN D CIRCUMSTANCES WAS ALREADY DECIDED BY HIM I N ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2005 - 06 VIDE ORDER D A TE D 28.5.2010 AS UN D ER - 6.1 I HAVE CONSIDERED THE ARGUMENTS AND FACTS AND I FIND THAT ONCE AGAIN THERE IS NO APPLICABILITY OF SECTION 14A OF THE AC T IN THIS CASE BECAUSE THERE IS NO INCOME GENERATED OUT OF THIS ASSET. FURTHER, IT IS DEFINITELY NOT A BUSINESS ASSET BEING A RESIDENTIAL HOUSE MEANT FOR OWN OCCUPATION. EVEN THE APPELLANT HAS ADMITTED THE SAME IN HIS REPLY GIVEN ABOVE. THEREFORE, IN PRIN CIPLE, THE ASSESSING OFFICER IS CORRECT IN DISALLOWING THE AFOREMENTIONED INTEREST. HOWEVER, THE APPELLANT HAS STATED THAT THE CALCULATIONS OF THE ASSESSING OFFICER ARE INCORRECT AND OUT OF RS.29 CRORES INVESTMENT, RS.18 CRORES WAS MADE OUT OF OWN FUNDS. HOWEVER, DURING APPEAL PROCEEDINGS, THE APPELLANT COULD NOT BRING ANY EVIDENCE TO PROVE ITS POINT. THE ONUS LAY SQUARELY ON THE APPELLANT TO STATE CLEARLY THE AMOUNT OF INTEREST IT HAD CLAIMED WITH RESPECT TO THE AFOREMENTIONED PROPERTY. THIS SIMPLE DET AIL WAS NOT PROVIDED BY THE APPELLANT. ACCORDINGLY, GIVEN THE FACTS AND CIRCUMSTANCES, THE ASSESSING OFFICER IS DIRECTED TO VERIFY THE EXACT AMOUNT OF INTEREST CLAIMED BY THE APPELLANT WITH RESPECT TO THE RESIDENTIAL BUILDING AT RAMOJI FILM CITY AND DISALL OW THE SAME. I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 13 FOLLOWIN G THE AFORESAID DECISION RENDERED IN ASSESSEE S OWN CASE FOR THE IMM E DIATELY P R E CE DING YEAR, THE LEARNED CIT(A) DIRECTED THE ASSESSING OFFICER TO VERIFY THE EXACT AMOUNT OF INTEREST CLAIMED BY TH E ASSESSEE WITH RESPECT TO THE RESID ENTIAL BUILDING AT RAMOJI FILM CITY AND MAKE A DISALLOWANCE ACCORDINGLY. 2 6 . WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. THE LEARNED COUN S EL FOR TH E ASSESSEE HAS REITERATED B E FORE US THE SUBMI S SION S M ADE BY THE ASSESSEE ON SIMILAR IS S UE BEFORE THE LEARNED CIT(A) FOR ASSESSMENT YEAR 2005 - 06, THAT OUT OF THE TOTAL INV E STMENT OF R S .29.68 C R ORES MADE IN THE RESIDENTIAL BUIL D ING, A SUM OF RS.18.68 C R OR E S WAS OUT OF OWN FUNDS, WHEREAS THE BALANCE AMOUNT O F R S .11 CRORES ONLY WAS UTILISED OUT OF THE FU N DS BORROWED ON INTEREST . HE HAS CONTENDED THAT INTEREST ATTRIBUTABLE ONLY TO THE BORROWED FOUNDS , TH E R E FORE , IS LIABLE TO BE DISALLOWED AND TH E DISALLOWANCE OF R S . 4,39,25,177 M ADE BY THE ASSESSING OFFICER ON THI S COUNT IS EXCESSIVE AND UNREASONABLE. IN THIS REGARD, IT IS OB S ERVED THAT KEEPING IN VIEW THE SIMILAR STAND TAKEN BY TH E ASSESSEE IN ASSESSMENT YEAR 2005 - 06, A DIRECTION W AS GIVEN BY THE LEARNED CIT(A) TO TH E ASSESSING OFFICER TO VERIFY THE EXACT AM OUNT OF INTEREST EXPENDITURE INCURRED BY THE ASSESSEE WITH RESPECT TO THE RESIDENTIAL BUILDING AT RAMOJI FILM CITY AND MAKE A DISALLOWANCE TO THAT EXTENT. IN HIS IMPUGNED ORDER FOR ASSESSMENT YEAR 2006 - 07, THE LEARNED CIT(A) HAS FOLLOWED HIS OWN ORDER FO R THE ASSESSMENT YEAR 2005 - 06 AND HAS GIVEN A SIMILAR DIRECTION TO THE ASSESSING OFFICER T O VERIFY THE EXACT AMOUNT OF INTEREST EXPENDITURE CL A IM E D BY THE ASSESSEE WITH RESPECT TO THE RESIDENTIAL BUIL DING A T RAMOJI FILM CITY AND MAKE DISALLOWANCE TO THAT EXTENT. WE TH E R EF ORE, FIND NO INFIRMITY IN THE IMPU G N E D O R D E R O F THE LEARNED CIT(A) ON THIS ISSUE AND UPHOL D IN G TH E SAME, WE DISMISS G R OUND NO.3 OF THE ASSESSEE S APPEAL. I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 14 2 7 . THE ISSUE INVOL V ED IN GROUND NO.4 OF THE ASSESSEE S APPEAL FOR ASSESSMENT YEAR 2006 - 07 R E LATES TO THE DISALLOWANCE MA D E BY THE ASSESSING OFFICER AND SUSTAINED BY THE LEARNED CIT(A) TO THE EXTENT OF RS.3,47,76,217 ON ACCOUN T OF INTEREST ATTRIBUTABLE TO THE INVESTMENT MADE BY THE ASSESSEE OUT O F BORROWED FUN D S IN FIXED ASSETS CREATED FOR THE PU R PO S E OF TOURISM , BUT NOT PUT TO BUSINESS USE. 28. AS NOTICED BY THE ASSESSING OFFICER DURING TH E COU R SE OF ASSESSMENT PROCEEDINGS, THE FUNDS BORROWED ON INTEREST WERE PARTLY UTILISED BY THE ASSESSEE FOR THE CONST R U CTI ON OF FIXED ASSETS WHICH HAD NOT B E EN PUT TO USE DURIN G THE Y E AR UN D ER CON S I D E R ATION. RELYING ON THE P R OVIS I ONS OF S.36(1)(III), HE THEREFORE WORKED OUT THE INTEREST ATTRIBUTABLE TO THE FUN D S UTILI S ED FOR SUCH AS S ETS AT R S .3,47,36,217 AND DI S ALLO WA N C E TO THAT EXTENT W A S MADE BY HIM. ON APPEAL, THE LEARNED CIT(A) CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON THIS ISSUE OBSERVING THAT THE ASSESSEE COULD NO T DEMONSTRATE THAT TH E SE AS S ETS WERE ACTUALLY PUT TO USE DURIN G THE Y E AR UN D ER CONSIDERATION. 29 WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED T HAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INTEREST ATTRIBUTAB L E T O THE AS SE TS NOT PUT TO USE IS CORREC T IN P R INCIPLE. HE , HOW E VER , HAS CONTEN D ED THAT THE DISALLOWANCE OF SUCH INTEREST W AS WORKED OUT BY THE ASSESSING OFFICER ON COMPOUNDING BASIS , WHICH IS NO T CORRECT AND THE SAME HAS TO BE WORKED OUT ON THE BASIS OF INTEREST ACTUAL LY PAID BY TH E ASSESSEE ON THE BORROWED FUN D S UTILI S ED FOR SUCH ASSETS. HE HAS SUBMI T TED THAT A SIMILAR EX E RCISE HAS BEEN DON E BY TH E ASSESSING OFFICER IN ASSESSMENT YEAR 2005 - 06, AS P E R THE DIRECTION I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 15 OF THE LEARNED CIT(A), AND A SIMILAR DIRECTION MAY BE GIVEN TO THE ASSESSING OFFICER TO DO SUCH EXER C ISE EVEN FOR TH E YEAR UNDER CONSIDERATION. SINCE THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS NO OBJECTION IN THIS REGARD, WE SET ASIDE THE IMPUGNED ORDERS OF THE LOWER AUTHORITIES ON THIS ISSUE, AND RESTORE TH E MATTER TO THE FILE OF THE ASSESSING OFFICER FOR THE LIMITED PURPOSE OF WORKING OUT, AS DONE IN THE PRECEDING YEAR AS PER THE DIRECTIONS OF THE LEARNED CIT(A) FOR THAT YEAR, THE ACTUAL QUANTUM OF INTEREST ACTUALLY PAID BY THE ASSESSEE ON THE BORROWED FUN DS UTILISED FOR THE CONSTRUCTION OF THE RELEVANT ASSETS WHICH WERE NOT PUT TO USE IN THE YEAR UNDER CONSIDERATION AND RESTRICT THE DISALLOWANCE TO THAT EXTENT . HE SHALL ACCORDINGLY REDECIDE THIS ISSUE AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. GROUND NO.4 IS ACCORDINGLY TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 30. IN THE RESULT, APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2006 - 07, BEING ITA NO.1506/HYD/2010, IS PARTLY ALLOWED FOR STATISTICAL PURPOSE S . CROSS APPEAL S FOR ASSESSMENT YEAR 2007 - 08 3 1. NOW, WE SHALL TAKE UP THE CROSS APPEALS FOR ASSESSMENT YEAR 2007 - 08, BEING ITA NO.1461/HYD/2010 OF THE REVENUE AND ITA NO.1507/HYD/2010 OF THE ASSESSEE, WHICH ARE DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) V, HYDERABAD DATED 3.9.2010. REVENUES APPEAL: 32. IN THE APPEAL OF THE REVENUE, GROUNDS NO.1 AND 7 ARE GENERAL, SEEKING NO SPECIFIC ADJUDICATION, WHILE REMAINING GROUNDS NO.2 TO 6 READ AS UNDER - 2. THE LEARNED CIT(A) RELYING ON THE HON'BLE PUNJAB & HARYANA HIGH COURT DECISION IN THE CASE OF HARYANA I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 16 LAND RECLAMATION AND DEVELOPMENT VS. CIT(2008) 302 ITR 218, ERRED IN HOLDING THAT SECTION 14A IS NOT APPLICABLE TO DISALLOWANCE OF INTEREST ON INVESTMENT IN SHARE APPLICATION MONEY. 3. THE LEARNED CIT(A) OUGHT TO HAVE RECOGNISED THAT IN VIEW OF CLOSE PROXIMITY OF THE ASSESSEE - HUF LAND ITS SISTER CONCERNS, NO SHARES HAVE BEEN ALLOTTED AND THE BORROWED FUNDS ARE LYING IN SHARE APPLICATION MONEY DEPOSIT. AS SUCH, THE CIT(A) SHOULD HAVE U PHELD THE ACTION OF THE ASSESSING OFFICER IN INVOKING THE PROVISIONS OF SECIRTON14A. 4. THE LEARNED CIT(A) SHOULD HAVE RECOGNIZED THAT THE ASSESSEE IS BORROWING FUNDS TO PLAY THE INTEREST COSTS AND HELD THAT THE ASSESSING OFFICER IS CORRECT IN CALCULATIN G THE DISALLOWED INTEREST ON CUMULATIVE BASIS. 5. THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION MADE TOWARDS DISALLOWANCE OF INTEREST ON INVESTMENT IN LANDS ON THE GROUND THAT NO INCOME IS YIELDED DURING THE CURRENT YEAR. 6. THE LEARNED CIT(A) OUGH T TO HAVE UPHELD THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING DRAWINGS & INTEREST ON DRAWINGS IN VIEW OF THE FACT THAT THE ENTIRE HUF IS RUNNING ON BORROWED FUNDS; THE INVESTMENTS MADE IN VARIOUS UNITS OF HUF ARE OUT OF THESE BORROWED FUNDS ONLY; AN D THE ASSESSEE - HUF ON THE WHOLE IS RETURNING LOSSES YEAR AFTER YEAR THEREBY THERE ARE NO ACCUMULATED PROFITS/INTERNAL ACCRUALS. 33. AS AGREED AT THE TIME OF HEARING BEFORE US BY THE LEARNED REPRESENTATIVES OF BOTH THE SIDES, THE COMMON ISSUE INVOLVED I N GROUNDS NO.2 TO 4 RELATING TO DISALLOWANCE MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LEARNED CIT(A) ON ACCOUNT OF INTEREST ATTRIBUTABLE TO THE INVESTMENTS MADE IN SHARE APPLICATION MONEY, IS SIMILAR TO THE ONE INVOLVED IN ASSESSMENT YEAR 2005 - 0 6, WHICH HAS ALREADY BEEN DECIDED BY US IN THE FOREGOING PARAS OF THIS ORDER. AS THE MATERIAL FACTS RELATING TO THIS ISSUE AS INVOLVE D IN THE YEAR UNDER CONSIDERATION AS WELL AS THE ARGUMENTS OF BOTH THE SIDES ARE SIMILAR TO ASSESSMENT YEAR 2005 - 06, WE FOLLOW OUR CONCLUSION DRAWN IN ASSESSMENT YEAR 2005 - 06 AND UPHOLD THE I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 17 IMPUGNED ORDER OF THE LEARNED CIT(A). GROUNDS NO.2 TO 4 ARE ACCORDINGLY DISMISSED. 34 . AS REGARDS THE ISSUE INVOLVED IN GROUND NO.5, IT RELATES TO DISALLOWANCE OF INTEREST ATTRIBUT ABLE TO THE INVESTMENTS MADE IN LANDED PROPERTIES. AS AGREED AT THE TIME OF HEARING BEFORE US BY THE LEARNED REPRESENTATIVES OF BOTH THE SIDES, THIS ISSUE IS SIMILAR TO THE ONE INVOLVED IN ASSESSMENT YEAR 2005 - 06, WHICH HAS ALREADY BEEN DECIDED BY US IN T HE FOREGOING PARAS OF THIS ORDER. AS THE MATERIAL FACTS RELATING TO THIS ISSUE AS INVOLVE D IN THE YEAR UNDER CONSIDERATION AS WELL AS THE ARGUMENTS OF BOTH THE SIDES ARE SIMILAR TO ASSESSMENT YEAR 2005 - 06, WE FOLLOW OUR CONCLUSION DRAWN IN ASSESSMENT Y EAR 2005 - 06 AND RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH, AFTER VERIFYING THE SPECIFIC SUBMISSIONS MADE BY THE LEARNED COUNSEL FOR THE ASSESSEE BEFORE US, IN ACCORDANCE WITH LAW AND AFTER GIVING SUFFICIENT OPPORT UNITY OF HEARING TO THE ASSESSEE. GROUNDS NO.5 IS ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 35 . AS REGARDS THE ISSUE INVOLVED IN GROUND NO.6 RELATING TO DISALLOWANCE OF INTEREST ATTRIBUTABLE TO THE WITHDRAWALS MADE BY THE ASSESSEE OUT OF BORROWED FUNDS, THE LEARNED REPRESENTATIVES OF BOTH THE SIDES HAVE AGREED THAT THIS ISSUE IS SIMILAR TO THE ONE INVOLVED IN ASSESSMENT YEAR 2006 - 07, WHICH HAS ALREADY BEEN DECIDED BY US IN THE FOREGOING PARAS OF THIS ORDER. AS THE MATERIAL FACTS RELATING TO THIS ISSUE AS INVOLVE D IN THE YEAR UNDER CONSIDERATION AS WELL AS THE ARGUMENTS OF BOTH THE SIDES ARE SIMILAR TO ASSESSMENT YEAR 2006 - 07, WE FOLLOW OUR CONCLUSION DRAWN IN ASSESSMENT YEAR 2006 - 07 AND RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OF FICER FOR DECIDING THE SAME AFRESH, AFTER GIVING THE ASSESSEE SUFFICIENT OPPORTUNITY TO ESTABLISH ITS CLAIM THAT THE WITHDRAWALS FOR HOUSE HOLD EXPENSES WERE MADE OUT OF THE PROFITS GENERATED IN USHODAYA I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 18 NEWS AGENCY AND NOT OUT OF THE BORROWED FUNDS. GROUN D NO.6 OF THE REVENUES APPEAL FOR ASSESSMENT YEAR 200 7 - 0 8 IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 36 . IN THE RESULT, REVENUES APPEAL FOR ASSESSMENT YEAR 200 7 - 0 8 , BEING ITA NO.146 1 /HYD/2010, IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ASSESSEES APPEAL: 37 . IN THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 200 7 - 0 8 , BEING ITA NO.150 7 /HYD/2010, GROUNDS NO.1 AND 6 ARE GENERAL SEEKING NO SPECIFIC ADJUDICATION. GROUND NO.2 RELATING TO THE DISALLOWANCE OF INTEREST MADE BY THE ASSESSING O FFICER A ND SUSTAINED BY THE LEARNED CIT(A) TO THE EXTENT OF RS. 68,85,96,134 ON ACCOUNT OF INTEREST ATTRIBUTABLE TO THE INVESTMENT MADE IN SHARE APPLICATION MONEY, IS NOT PRESSED BY THE LEARNED COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING BEFORE US. TH E SAME IS ACCORDINGLY DISMISSED. 3 8 . T HE ISSUE INVOLVED IN GROUND NO.3 OF THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 200 7 - 0 8 RELATES TO THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LEARNED CIT(A) TO THE EXTENT OF RS. 5,10,03,729 ON ACCOUNT OF INTEREST ATTRIBUTABLE TO THE INVESTMENT ALLEGEDLY MADE BY THE ASSESSEE IN THE RESIDENTIAL BUILDING OUT OF BORROWED FUNDS. AS AGREED AT THE TIME OF HEARING BEFORE US BY THE LEARNED REPRESENTATIVES OF BOTH THE SIDES, THIS ISSUE IS SIMILAR TO THE ONE INVOLVED IN ASSESSMENT YEAR 2006 - 07, WHICH HAS ALREADY BEEN DECIDED BY US IN THE FOREGOING PARAS OF THIS ORDER. AS THE MATERIAL FACTS RELATING TO THIS ISSUE AS INVOLVE D IN THE YEAR UNDER CONSIDERATION AS WELL AS THE ARGUMENTS OF BOTH THE SIDES ARE SIMILAR TO ASSESSMENT YEAR 2006 - 07, WE FOLLOW THE I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 19 CONCLUSION DRAWN IN ASSESSMENT YEAR 2006 - 07, AND UPHOLD THE IMPUGNED ORDER OF THE LEARNED CIT(A) ON THIS ISSUE . G ROUND NO.3 OF THE ASSESSEES APPEAL IS ACCORDINGLY DISMISSED. 3 9 . THE ISSUE INVOLVED I N GROUND NO.4 OF THE ASSESSEE S APPEAL FOR ASSESSMENT YEAR 200 7 - 0 8 RELATES TO THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LEARNED CIT(A) TO THE EXTENT OF RS. 4,44,52,660 ON ACCOUNT OF INTEREST ATTRIBUTABLE TO THE INVESTMENT MADE BY THE ASSESSEE OUT OF BORROWED FUNDS IN FIXED ASSETS CREATED FOR THE PURPOSE OF TOURISM, BUT NOT PUT TO BUSINESS USE. AS AGREED AT THE TIME OF HEARING BEFORE US BY THE LEARNED REPRESENTATIVES OF BOTH THE SIDES, THIS ISSUE IS SIMILAR TO THE ONE INVOLVED IN A SSESSMENT YEAR 2006 - 07, WHICH HAS ALREADY BEEN DECIDED BY US IN THE FOREGOING PARAS OF THIS ORDER. AS THE MATERIAL FACTS RELATING TO THIS ISSUE AS INVOLVED IN THE YEAR UNDER CONSIDERATION AS WELL AS THE ARGUMENTS OF BOTH THE SIDES ARE SIMILAR TO ASSESSME NT YEAR 2006 - 07, WE FOLLOW THE CONCLUSION DRAWN IN ASSESSMENT YEAR 2006 - 07, AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR THE LIMITED PURPOSE OF WORKING OUT, AS DONE IN THE ASSESSMENT YEAR 2005 - 06 AS PER THE DIRECTIONS OF THE LEARNED CIT(A) FOR THAT YEAR, THE ACTUAL QUANTUM OF INTEREST ACTUALLY PAID BY THE ASSESSEE ON THE BORROWED FUNDS UTILISED FOR THE CONSTRUCTION OF THE RELEVANT ASSETS WHICH WERE NOT PUT TO USE IN THE YEAR UNDER CONSIDERATION A ND RESTRICT THE DISALLOWANCE TO THAT EXTENT. HE SHALL ACCORDINGLY REDECIDE THIS ISSUE AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. GROUND NO.4 IS ACCORDINGLY TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 40 . GROUND NO.5 OF T HE ASSESSEES APPEAL RELATING TO THE TREATMENT GIVEN BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) WITH REGARD TO INCOME OF RS.773,67,56,036 FROM SALE OF TV/FILM SOFTWARE, AS INCOME FROM CAPITAL GAINS, WAS NOT PRESSED BY I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 20 THE LEARNED COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING BEFORE US . THE SAME IS ACCORDINGLY DISMISSED. 4 1 . IN THE RESULT, APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 200 7 - 0 8 , BEING ITA NO.150 7 /HYD/2010, IS PARTLY ALLOWED FOR STATISTICAL PURPOSE S . CROSS APPEALS FOR ASSESSM ENT YEAR 200 8 - 0 9 4 2 . NOW, WE SHALL TAKE UP THE CROSS APPEALS FOR ASSESSMENT YEAR 200 8 - 0 9 , BEING ITA NO.14 5 1/HYD/201 1 OF THE REVENUE AND ITA NO.15 36 /HYD/201 1 OF THE ASSESSEE, WHICH ARE DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX(A PPEALS) V, HYDERABAD DATED 1 . 6 .201 1 . REVENUES APPEAL: 4 3 . IN THE APPEAL OF THE REVENUE, GROUNDS NO.1 AND 7 ARE GENERAL, SEEKING NO SPECIFIC ADJUDICATION, WHILE REMAINING GROUNDS NO.2 TO 6 READ AS UNDER - 2. THE LEARNED CIT(A) RELYING ON THE HON'BLE PUNJAB & HARYANA HIGH COURT DECISION IN THE CASE OF HARYANA LAND RECLAMATION AND DEVELOPMENT VS. CIT(2008) 302 ITR 218, ERRED IN HOLDING THAT SECTION 14A IS NOT APPLICABLE TO DISALLOWANCE OF INTEREST ON INVESTMENT IN SHARE APPLICATION MONEY. 3. THE LEARNED CIT(A) OUGHT TO HAVE RECOGNISED THAT IN VIEW OF CLOSE PROXIMITY OF THE ASSESSEE - HUF LAND ITS SISTER CONCERNS, NO SHARES HAVE BEEN ALLOTTED AND THE BORROWED FUNDS ARE LYING IN SHARE APPLICATION MONEY DEPOSIT. AS SUCH, THE CIT(A) SHOULD HAVE UPHE LD THE ACTION OF THE ASSESSING OFFICER IN INVOKING THE PROVISIONS OF SECIRTON14A. 4. THE LEARNED CIT(A) SHOULD HAVE RECOGNIZED THAT THE ASSESSEE IS BORROWING FUNDS TO PLAY THE INTEREST COSTS AND HELD THAT THE ASSESSING OFFICER IS CORRECT IN I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 21 CALCULATING T HE DISALLOWED INTEREST ON CUMULATIVE BASIS. 5. THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION MADE TOWARDS DISALLOWANCE OF INTEREST ON INVESTMENT IN LANDS ON THE GROUND THAT NO INCOME IS YIELDED DURING THE CURRENT YEAR. 6. THE LEARNED CIT(A) OUGHT T O HAVE UPHELD THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING DRAWINGS & INTEREST ON DRAWINGS IN VIEW OF THE FACT THAT THE ENTIRE HUF IS RUNNING ON BORROWED FUNDS; THE INVESTMENTS MADE IN VARIOUS UNITS OF HUF ARE OUT OF THESE BORROWED FUNDS ONLY; AND T HE ASSESSEE - HUF ON THE WHOLE IS RETURNING LOSSES YEAR AFTER YEAR THEREBY THERE ARE NO ACCUMULATED PROFITS/INTERNAL ACCRUALS. 4 4 . AS AGREED AT THE TIME OF HEARING BEFORE US BY THE LEARNED REPRESENTATIVES OF BOTH THE SIDES, THE COMMON ISSUE INVOLVED IN G ROUNDS NO.2 TO 4 RELATING TO DISALLOWANCE MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LEARNED CIT(A) ON ACCOUNT OF INTEREST ATTRIBUTABLE TO THE INVESTMENTS MADE IN SHARE APPLICATION MONEY, IS SIMILAR TO THE ONE INVOLVED IN ASSESSMENT YEAR 2005 - 06, WHICH HAS ALREADY BEEN DECIDED BY US IN THE FOREGOING PARAS OF THIS ORDER. AS THE MATERIAL FACTS RELATING TO THIS ISSUE AS INVOLVE D IN THE YEAR UNDER CONSIDERATION AS WELL AS THE ARGUMENTS OF BOTH THE SIDES ARE SIMILAR TO ASSESSMENT YEAR 2005 - 06, WE F OLLOW OUR CONCLUSION DRAWN IN ASSESSMENT YEAR 2005 - 06 AND UPHOLD THE IMPUGNED ORDER OF THE LEARNED CIT(A) ON THIS ISSUE . GROUNDS NO.2 TO 4 ARE ACCORDINGLY DISMISSED. 4 5 . AS REGARDS THE ISSUE INVOLVED IN GROUND NO.5, IT RELATES TO DISALLOWANCE OF INTERES T ATTRIBUTABLE TO THE INVESTMENTS MADE IN LANDED PROPERTIES. AS AGREED AT THE TIME OF HEARING BEFORE US BY THE LEARNED REPRESENTATIVES OF BOTH THE SIDES, THIS ISSUE IS SIMILAR TO THE ONE INVOLVED IN ASSESSMENT YEARS 2005 - 06, WHICH HAS ALREADY BEEN DECIDE D BY US IN THE FOREGOING PARAS OF THIS ORDER. AS THE MATERIAL FACTS RELATING TO THIS ISSUE AS INVOLVE D IN THE YEAR UNDER I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 22 CONSIDERATION AS WELL AS THE ARGUMENTS OF BOTH THE SIDES ARE SIMILAR TO ASSESSMENT YEAR 2005 - 06, WE FOLLOW OUR CONCLUSION DRAWN IN ASSESSMENT YEAR 2005 - 06 AND RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH, AFTER VERIFYING THE SPECIFIC SUBMISSIONS MADE BY THE LEARNED COUNSEL FOR THE ASSESSEE BEFORE US, IN ACCORDANCE WITH LAW AND AFTER GIVING SUFFI CIENT OPPORTUNITY OF HEARING TO THE ASSESSEE. GROUNDS NO.5 IS ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 4 6 . AS REGARDS THE ISSUE INVOLVED IN GROUND NO.6 RELATING TO DISALLOWANCE OF INTEREST ATTRIBUTABLE TO THE WITHDRAWALS MADE BY THE ASSE SSEE OUT OF BORROWED FUNDS, THE LEARNED REPRESENTATIVES OF BOTH THE SIDES HAVE AGREED THAT THIS ISSUE IS SIMILAR TO THE ONE INVOLVED IN ASSESSMENT YEAR 2006 - 07, WHICH HAS ALREADY BEEN DECIDED BY US IN THE FOREGOING PARAS OF THIS ORDER. AS THE MATERIAL FA CTS RELATING TO THIS ISSUE AS INVOLVE D IN THE YEAR UNDER CONSIDERATION AS WELL AS THE ARGUMENTS OF BOTH THE SIDES ARE SIMILAR TO ASSESSMENT YEAR 2006 - 07, WE FOLLOW OUR CONCLUSION DRAWN IN ASSESSMENT YEAR 2006 - 07 AND RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH, AFTER GIVING THE ASSESSEE SUFFICIENT OPPORTUNITY TO ESTABLISH ITS CLAIM THAT THE WITHDRAWALS FOR HOUSE HOLD EXPENSES WERE MADE OUT OF THE PROFITS GENERATED IN USHODAYA NEWS AGENCY AND NOT OUT OF THE BORROWED FUNDS. GROUND NO.6 OF THE REVENUES APP EAL FOR ASSESSMENT YEAR 2007 - 08 IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 4 7 . IN THE RESULT, REVENUES APPEAL FOR ASSESSMENT YEAR 200 8 - 0 9 , BEING ITA NO.14 5 1/HYD/201 1 , IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 23 ASSESSEES APPEAL: 4 8 . IN THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 200 8 - 0 9 , BEING ITA NO.15 36 /HYD/201 1 , GROUNDS NO.1 AND 5 ARE GENERAL SEEKING NO SPECIFIC ADJUDICATION. GROUND NO.2 RELATING TO THE DISALLOWANCE OF INTEREST MADE BY THE ASSESSING OFFICER AND SUSTAINED BY TH E LEARNED CIT(A) TO THE EXTENT OF RS. 53 , 93 ,96 0 ON ACCOUNT OF INTEREST ATTRIBUTABLE TO THE INVESTMENT MADE IN SHARE APPLICATION MONEY, IS NOT PRESSED BY THE LEARNED COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING BEFORE US. THE SAME IS ACCORDINGLY DISMISS ED. 4 9 . THE ISSUE INVOLVED IN GROUND NO.3 OF THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 200 8 - 0 9 RELATES TO THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LEARNED CIT(A) TO THE EXTENT OF RS. 8,54,31,999 ON ACCOUNT OF INTEREST ATTRIBUT ABLE TO THE INVESTMENT ALLEGEDLY MADE BY THE ASSESSEE IN THE RESIDENTIAL BUILDING OUT OF BORROWED FUNDS. AS AGREED AT THE TIME OF HEARING BEFORE US BY THE LEARNED REPRESENTATIVES OF BOTH THE SIDES, THIS ISSUE IS SIMILAR TO THE ONE INVOLVED IN ASSESSMENT Y EAR 2006 - 07, WHICH HAS ALREADY BEEN DECIDED BY US IN THE FOREGOING PARAS OF THIS ORDER. AS THE MATERIAL FACTS RELATING TO THIS ISSUE AS INVOLVED IN THE YEAR UNDER CONSIDERATION AS WELL AS THE ARGUMENTS OF BOTH THE SIDES ARE SIMILAR TO ASSESSMENT YEAR 200 6 - 07, WE FOLLOW THE CONCLUSION DRAWN IN ASSESSMENT YEAR 2006 - 07, AND UPHOLD THE IMPUGNED ORDER OF THE LEARNED CIT(A) ON THIS ISSUE . G ROUND NO.3 OF THE ASSESSEES APPEAL IS ACCORDINGLY DISMISSED . 50 . THE ISSUE INVOLVED IN GROUND NO.4 OF THE ASSESSEE S APPEAL FOR ASSESSMENT YEAR 200 8 - 0 9 RELATES TO THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LEARNED CIT(A) TO THE EXTENT OF RS. 6,26,44,482 ON ACCOUNT OF INTEREST ATTRIBUTABLE I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 24 TO THE INVESTMENT MADE BY THE ASSESSEE OUT OF BORROWED FU NDS IN FIXED ASSETS CREATED FOR THE PURPOSE OF TOURISM, BUT NOT PUT TO BUSINESS USE. AS AGREED AT THE TIME OF HEARING BEFORE US BY THE LEARNED REPRESENTATIVES OF BOTH THE SIDES, THIS ISSUE IS SIMILAR TO THE ONE INVOLVED IN ASSESSMENT YEAR 2006 - 07, WHICH H AS ALREADY BEEN DECIDED BY US IN THE FOREGOING PARAS OF THIS ORDER. AS THE MATERIAL FACTS RELATING TO THIS ISSUE AS INVOLVED IN THE YEAR UNDER CONSIDERATION AS WELL AS THE ARGUMENTS OF BOTH THE SIDES ARE SIMILAR TO ASSESSMENT YEAR 2006 - 07, WE FOLLOW THE CONCLUSION DRAWN IN ASSESSMENT YEAR 2006 - 07, AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR THE LIMITED PURPOSE OF WORKING OUT, AS DONE IN THE ASSESSMENT YEAR 2005 - 06 AS PER THE DIRECTIONS OF THE LEARNED CIT(A) FOR THAT YEAR, THE ACTUAL Q UANTUM OF INTEREST ACTUALLY PAID BY THE ASSESSEE ON THE BORROWED FUNDS UTILISED FOR THE CONSTRUCTION OF THE RELEVANT ASSETS WHICH WERE NOT PUT TO USE IN THE YEAR UNDER CONSIDERATION AND RESTRICT THE DISALLOWANCE TO THAT EXTENT. HE SHALL ACCORDINGLY REDE CIDE THIS ISSUE AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. GROUND NO.4 IS ACCORDINGLY TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 5 1 . IN THE RESULT, APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 200 8 - 0 9 , BEING ITA NO.15 36 /HYD/201 1 , IS PARTLY ALLOWED FOR STATISTICAL PURPOSE S . 5 2 . TO SUM UP: ( A ) REVENUES APPEAL FOR ASSESSMENT YEAR 2005 - 06, BEING ITA NO.1087/HYD/2010, IS PARTLY ALLOWED FOR STATISTICAL PURPOSE S . ( B ) OUT OF CROSS APPEALS FOR ASSESSMENT YEAR 2006 - 07, R EVENUES A PPEAL , BEING ITA I TA NO. 1087/H YD/20 10 & OTHERS M/S. CH. RAMOJI RAO (HUF), HYDERABAD 25 NO.1460/HYD/2010, AS WELL AS ASSESSEES APPEAL, BEING ITA NO.1506/HYD/2010 , ARE PARTLY ALLOWED FOR STATISTICAL PURPOSE S . ( C ) OUT OF CROSS APPEALS FOR ASSESSMENT YEAR 200 7 - 0 8 , R EVENUES APPEAL , BEING ITA NO.146 1 /HYD/2010, AS WELL AS ASSESSEES APPEAL, BEING ITA NO.1507/HYD/2010, ARE PARTLY ALLOWED FOR STATISTICAL PURPOSE S . ( D ) OUT OF CROSS APPEALS FOR ASSESSMENT YEAR 200 8 - 0 9 , R EVENUES APPEAL , BEING ITA NO.14 51 /HYD/201 1 , AS WELL AS ASSESSEES APPEAL, BEING ITA NO.1536/HYD/2011, ARE PARTLY ALLOWED FOR STATISTICAL PURPOSE . ORDER PRONOUNCED IN THE COURT ON 20 TH FEBRUARY, 2015 SD/ - SD/ - ( ASHA VIJAYARAGHAVAN ) ( P.M.JAGTAP ) VICE PRESIDENT ACCOUNTANT MEMBER D T/ - 20 TH FEBRUARY, 2015 COPY FORWARDED TO: 1. M/S. CH. RAMOJI RAO - (HUF), NO.3, CHIKOTI GARDENS, BEGUMPET HYDERABAD 2 . ASSTT COMMISSIONER OF INCOME - TAX CIRCLE 16(2) , HYDERABAD 3. 4. COMMISSIONER OF INCOME - TAX(APPEALS) V , HYDERABAD COMMISSIONER OF INCOME - TAX I V HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S