IL & FS INVESTMENT LTD ( NOW KNOWN AS HSBC INVEST DIRECT (INDIA) LTD), MUMBAI V. ADDL CIT RG 4(1), MUMBAI

ITA 168/MUM/2010

• Counselvise Citation: 16819914 RSA 2010
• Duration Of Justice: 3 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 19-08-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 07-01-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: O P SINGH
• Assessee Lawyers: DILIP V LAKHANI
• Keywords: Business expenditure; Earning of tax free income; Bad and doubtful debts
• Section: 234B; 14A; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH I, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO. 168/MUM/2010 ASSESSMENT YEAR : 2006-07 IL&FS INVESTSMART LTD. NOW KNOWN AS HSBC INVEST DIRECT (INDIA) LTD. DHANASINGH PROCESSOR PREMISES J.B. NAGAR, ANDHERI KURLA ROAD ANDHERI (E) MUMBAI-400 059. PAN NO.AAACI 3364 A VS. ADDL. COMMISSIONER OF INCOME TAX RANGE-4(1) MUMBAI. (APPELLANT) (RESPONDENT) ITA NO. 1102/MUM/2010 ASSESSMENT YEAR : 2006-07 DCIT - 4(1) 6 TH FLOOR, ROOM NO.640 AAYAKAR BHAVAN MUMBAI-20. VS. IL&FS INVESTSMART LTD. NOW KNOWN AS HSBC INVEST DIRECT (INDIA) LTD. C-22, G-BLOCK, BANDRA KURLA COMPLEX, BANDRA (E) MUMBAI-400 051. PAN NO.AAACI 3364 A (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI DILIP V. LAKHANI REVENUE BY : SHRI O.P. SINGH DATE OF HEARING : 19/08/2013 DATE OF PRONOUNCEMENT : 23 /0 8 /20 13 ITA NO.168 & 1102/M/10 A.Y.06-07 2 O R D E R PER B. RAMAKOTAIAH, AM: THESE ARE CROSS APPEALS BY THE ASSESSEE AND REVENUE AGAINST THE ORDERS OF THE CIT(A), MUMBAI DATED 04.11.2009 FOR T HE ASSESSMENT YEAR 2006-07. 2. WE HAVE HEARD THE LD. AR AND THE LD. DR. ITA NO.168/M/10 3. THE ASSESSEE HAS RAISED SIX GROUNDS ON FO UR ISSUES IN ITS APPEAL. THE ASSESSEE IS IN THE BUSINESS OF SHARE AND STOCK BROKING, MERCHANT BANKING, UNDERWRITING OF SECURITIES AND DISTRIBUTIO N OF FINANCIAL PRODUCTS ETC. IT FILED TOTAL INCOME OF RS.89.54 CRORES. IN T HE COURSE OF ASSESSMENT PROCEEDINGS, THE AO DISALLOWED ENTRANCE FEE PAID TO THE CLUB OF RS.15,68,750/- AND ALSO STT PAID TO AN EXTENT OF RS .55,88,717/-, BAD DEBTS TO THE EXTENT OF RS.15,93,763/- AND AN AMOUNT OF RS.6,52,460/- STATED TO BE PENALTY IN VIOLATION OF BYE-LAWS OF ST OCK EXCHANGE AND DISALLOWANCE UNDER SECTION 14A INVOKING RULE 8D AT RS.33,51,001/-. AO ALSO LEVIED INTEREST U/S 234B. THE ASSESSEE CONTEST ED THE SAME BEFORE CIT(A) WHO DELETED THE DISALLOWANCE OF PENALTY AND ALSO GAVE RELIEF ON INTEREST UNDER SECTION 234B WHILE CONFIRMING ADDITI ON OF OTHER DISALLOWANCES. REVENUE IS IN APPEAL IN DELETION OF AMOUNT OF PENALTY AND INTEREST UNDER SECTION 234B WHEREAS THE ASSESSEE IS IN APPEAL ON THE DISALLOWANCES MADE IN THE ASSESSMENT ORDER. 4. GROUND NO.1 PERTAINS TO DISALLOWANCE OF AN AMOUN T OF RS.33,53,001/- UNDER SECTION 14A R.W. RULE 8D. THE AO NOTICED THAT THE ASSESSEE HAS EARNED AN AMOUNT OF RS.12,06,10,934/- AS DIVIDEND INCOME AND CLAIMED EXEMPT UNDER SECTION 10(34) OF THE ACT. INVOKING PROVISIONS OF RULE 8D, AO COMPUTED DISALLOWANCE AT RS.33,51,00 1/- WHICH WAS CONFIRMED BY THE LD. CIT(A). ITA NO.168 & 1102/M/10 A.Y.06-07 3 5. IT WAS CONTENDED THAT APPLICATION OF RULE 8D IS NOT PERMITTED FOR ASSESSMENT YEAR 2006-07 AS THE SAID PROVISION CAME INTO EFFECT W.E.F. ASSESSMENT YEAR 2008-09 AND THE HON'BLE JURISDICTIO NAL HIGH COURT IN THE CASE OF GODREJ & BOYCE MANUFACTURING CO. LTD. 328 ITR 81 (B OM) STATED THAT REASONABLE AMOUNT CAN BE DISALLOWED UND ER SECTION 14A BUT CANNOT BE DONE UNDER RULE 8D WHICH HAS ONLY PROSPEC TIVE APPLICABILITY. COMING TO THE MERITS, IT WAS SUBMITTED THAT OUT OF THE TOTAL DIVIDEND EARNED AN AMOUNT OF RS.11.36 CRORES WAS EARNED FROM MUTUAL FUNDS WHEREIN THE AGENT COMMISSION WAS BORNE BY THE MUTUA L FUND ITSELF AND THERE IS NO EXPENDITURE BY THE ASSESSEE IN EARNING THAT DIVIDEND. FURTHER, IT WAS SUBMITTED THAT THE ASSESSEE HAS MOR E THAN RS.658.78 CRORES OF RESERVES AND SURPLUS AND INVESTMENTS ONLY RS.37.43 CRORES AS AGAINST RS.16.04 CRORES AT THE BEGINNING OF THE YEA R. IT WAS SUBMITTED THAT THE ASSESSEE HAS OWN FUNDS MANY MORE TIMES AND ITS PROFIT IN THE YEAR ITSELF IS MORE THAN INVESTMENTS. THEREFORE, TH ERE IS NO UTILIZATION OF BORROWED FUNDS WHICH ARE EXCLUSIVELY USED FOR THE B USINESS PURPOSES. IT WAS THE CONTENTION THAT NO AMOUNT NEED BE DISALLOWE D UNDER SECTION 14A. THE LD. DR HOWEVER SUPPORTED THE ORDERS OF THE AO. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS. AS HEL D BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF GODREJ & BOYCE MANUFACTURING CO. LTD. (SUPRA) RULE 8D CANNOT BE INVOKED FOR ASSESSMENT Y EAR 2006-07. EVEN AS SEEN FROM THE COMPUTATION THE AO ARRIVED AT AVERAGE INVESTMENT AT RS.39.88 CRORES WHEREAS AVERAGE OF INVESTMENTS A T THE END OF THE YEAR AND BEGINNING OF THE YEAR COMES TO ABOUT RS.27.00 C RORES ONLY. THEREFORE, EVEN WORKING SEEMS TO BE WRONG. BE THAT AS IT MAY, RULE 8D CANNOT BE INVOKED FOR THIS ASSESSMENT YEAR AND ONLY A REASONABLE AMOUNT CAN BE CONSIDERED FOR DISALLOWANCE FOR EARNI NG EXEMPT INCOME. AS SEEN FROM THE RESERVES AND PROFITS ASSESSEE HAS MORE FUNDS THAN INVESTMENTS, SO DISALLOWANCE OF INTEREST WITHOUT ES TABLISHING NEXUS DOES NOT ARISE. CONSIDERING THAT ASSESSEE HAS EARNED DIV IDEND INCOME OF RS.12.06 CRORES, WE ARE OF THE OPINION THAT 1% OF T HE AMOUNT CAN BE ITA NO.168 & 1102/M/10 A.Y.06-07 4 CONSIDERED AS REASONABLE, AS HAS BEEN HELD BY THE V ARIOUS CO-ORDINATE BENCHES IN SIMILAR CASES FOR THE RELEVANT ASSESSMEN T YEAR. EVEN THOUGH THE LD. COUNSEL SUBMITTED THAT AN AMOUNT OF RS.11.3 6 CRORES PERTAINED TO DIVIDEND ON MUTUAL FUNDS, THIS FACT WAS NEITHER RECORDED BY AO NOR CANVASSED BEFORE AUTHORITIES. THEREFORE, THIS CONTE NTION CAN NOT BE ACCEPTED. WE ARE OF THE OPINION THAT 1% OF THE DIVI DEND EARNED CAN BE CONSIDERED AS REASONABLE AMOUNT FOR DISALLOWANCE UN DER SECTION 14A ON THE GIVEN FACTS. THE GROUND IS PARTIALLY ALLOWED AN D AO IS DIRECTED TO DISALLOW ACCORDINGLY. 7. GROUND NO.2 PERTAINS TO DISALLOWANCE OF STT PAID ON BEHALF OF CLAINTS AMOUNTING TO RS.55,88,717/-. IT WAS THE CON TENTION OF AO THAT STT PAID ON BEHALF OF THE CLAINTS CAN NOT BE ALLOWE D AS DEDUCTION IN VIEW OF THE PROVISIONS OF SECTION 40(A)(IB) OF THE INCOM E TAX ACT. SAME WAS CONFIRMED BY CIT(A). 8. IT WAS FAIRLY ADMITTED THAT THE CIT(A) HAS FOLLO WED THE ORDER IN ASSESSMENT YEAR 2005-06 AND DISMISSED THE GROUND AN D IN ASSESSMENT YEAR 2005-06 THE MATTER WAS RESTORED TO AO FOR EXAM INATION OF THE CONTENTIONS RAISED BY THE ASSESSEE. THE ORDER OF IT AT IN ITA NO.5372/MUM/2008 AND ITA NO.5992/MUM/2008 FOR ASSES SMENT YEAR 2005-06 IS AS UNDER :- 16. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. WE FIN D SOME FORCE IN THE CONTENTION OF THE COUNSEL FOR THE ASSESSEE SO F AR AS THE TREATMENT OF BROKERAGE INCLUSIVE OF STT IS CONCERNE D. HOWEVER, IN ALL FAIRNESS, IN OUR HUMBLE OPINION, THIS ISSUE DESERVE S TO BE LOOKED AFRESH. THEREFORE, WE RESTORE THIS ISSUE BACK TO TH E FILE OF AO WITH A DIRECTION TO EXAMINE THE BOOK ENTRIES IN THE LIGHT OF DEMONSTRATION MADE BY THE COUNSEL FOR THE ASSESSEE BEFORE US. NEE DLESS TO MENTION THAT A REASONABLE OPPORTUNITY OF BEING HEAR D SHOULD BE GIVEN TO ASSESSEE. RESPECTFULLY FOLLOWING THE ABOVE, WE RESTORE THIS I SSUE TO THE FILE OF AO FOR FRESH EXAMINATION AS IN EARLIER YEAR. ITA NO.168 & 1102/M/10 A.Y.06-07 5 9. GROUND NO.3 PERTAINS TO THE ISSUE OF DISALLOWANC E OF BAD DEBTS. ASSESSING OFFICER DISALLOWED TOTAL AMOUNT OF RS.15, 93,763/- AS BAD DEBT OUT OF WHICH AN AMOUNT OF RS.14,71,960/- IS ON ACCO UNT OF BROKERAGE WHICH HAS BEEN TAKEN INTO COMPUTATION OF INCOME BY THE ASSESSEE IN EARLIER YEARS. THE LD. CIT(A) GAVE RELIEF TO THAT E XTENT, WHILE CONFIRMING THE BALANCE AMOUNT OF RS.1,21,803/- WHICH ACCORDING TO HIM IS NOT COVERED BY THE PROVISIONS OF SECTION 36(2). IT WAS THE SUBMISSION THAT THIS AMOUNT WAS RECEIVABLE FROM THE CLIENTS IN THE BUSINESS OF SHARE TRADING AND BROKERAGE AND AMOUNT IS ALLOWABLE AS DE DUCTION IN VIEW OF THE HON'BLE JURISDICTIONAL HIGH COURT DECISION IN THE C ASE OF CIT VS. SHREYAS S. MORAKHIA (342 ITR 285). SINCE, IN THE BUSINESS OF SHARE BROKING, THE AMOUNT PAYABLE BY THE CLIENTS ARE ALSO CONSIDERED AS AMOUNT TAKEN INTO ACCOUNT, FOLLOWING THE PRINCIPL ES LAID DOWN BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE ABOVE REF ERRED CASE, WE DIRECT AO TO ALLOW THE AMOUNT AS BAD DEBT OF RS. 1,21,803. ACCORDINGLY, GROUND NO.3 IS ALLOWED. 10. GROUND NO.4 IS ALTERNATE GROUND CLAIMING THE AM OUNT OF BAD DEBT AS BUSINESS LOSS. THIS GROUND BECOMES ACADEMIC IN V IEW OF ALLOWING GROUND NO.3. 11. GROUND NO.5 AND 6 PERTAIN TO ISSUE OF ENTRANCE FEE PAID TO CLUB. AO DISALLOWED TOTAL AMOUNT OF RS.15,68,750/- AS AMO UNT PAID TO CLUB M/S WELLINGTON GYMKHANA. THE ASSESSEE RELIED ON THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF OTIS ELEVATOR CO.(I) LTD. (195 ITR 682) WHICH ASSESSING OFFICER DID NOT AGREE AND HELD THAT EXPENDITURE WAS CAPITAL IN NATURE AND HENCE CAN NOT BE ALLOWED. THE LD. CIT(A) WHILE ALLOWING HOARDING CHARGES OF RS.68,750/- HOWEVER, CONFIRMED THE AMOUNT OF RS.15.00 LACS. IT WAS SUBMITTED THAT THIS AMOUNT WAS PAID FOR EMPLOYEE-DIRECTOR AND THE AMOUNT IS ALLOWABLE BY VI RTUE OF THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF CIT, BANGALORE VS. UNITED GLASS MFG CO. LTD. IN CIVIL APPEAL NO. 6447 OF 2012 AND ALSO BY THE DECISION OF ITA NO.168 & 1102/M/10 A.Y.06-07 6 HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. SAMTEL COLOR LTD. (326 ITR 425) . THE LD. DR HOWEVER SUBMITTED THAT THE AMOUNT IS P AID TOWARDS ENTRANCE FEE FOR A PERIOD OF TEN YEARS. SINCE THERE IS ENDURING BENEFIT THE AMOUNT IS CAPITAL IN NATURE. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. SAMTEL COLOR LTD (SUPR A), CONSIDERED SIMILAR FACTS AND HELD THAT ADMISSION FEE PAID TOWARDS CORP ORATE MEMBERSHIP WAS AN EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND NOT TOWARDS CAPITAL ACCOUNT AS IT FACI LITATED THE SMOOTH AND EFFICIENT RUNNING OF A BUSINESS AND DID NOT ADD TO THE PROFIT EARNING APPARATUS OF A BUSINESS ENTERPRISE. THE HON'BLE DEL HI HIGH COURT FOLLOWED THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF OTIS ELEVATOR CO.(I) LTD. (195 ITR 682), RELIED ON BY AS SESSEE BEFORE THE AUTHORITIES. IN VIEW OF THE ABOVE, WE DIRECT THE A O TO ALLOW THE AMOUNT AS EXPENDITURE U/S. 37(1). THE GROUNDS ARE ALLOWED . 13. IN THE RESULT, ASSESSEE APPEAL IS PARTLY ALLOWE D. ITA NO.1102/M/10 14. IN THE REVENUE APPEAL GROUND NO.1-5 PERTAIN TO THE ISSUE OF ALLOWING AN AMOUNT OF RS.6,52,450/- PAID TO STOCK EXCHANGE, CONSIDERED BY AO AS IN VIOLATION OF BYE-LAWS OF STOCK EXCHANGE AND AS I NFRINGEMENT OF LAW. 14.1 IT WAS SUBMITTED THAT THIS ISSUE WAS SQUARELY COVERED BY THE ORDERS OF ITAT IN ASSESSMENT YEAR 2005-06 IN ITA N O.5372/M/08 AND ITA NO.5992/M/08 DATED 30.10.2012 WHEREIN IT WAS HE LD AS UNDER :- 4. GROUND NO. 8 TO 13 RELATES TO THE DISALLOWANCE OF PENALTY OF RS.25,82,779/- BEING DEBITED BY THE ASSESSEE ON VIO LATION OF THE BYE LAWS OF THE STOCK EXCHANGE. THE COUNSEL ONCE AGAIN POINT ED OUT THAT THE ISSUES INVOLVED IN THESE GROUNDS ARE ALSO COVERED BY THE V ERY SAME DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT (SUPRA) WHERE IN ON THE FOLLOWING QUESTION RAISED BY THE REVENUE, THE HONBLE HIGH CO URT HELD IN PARA-3 AS UNDER: 3. AS REGARD QUESTION (C) IS CONCERNED THE FINDI NG OF FACT RECORDED BY THE I.T.A.T. IS THAT THE AMOUNT PAID AS PENALTY WAS ON ACCOUNT OF IRREGULARITIES COMMITTED BY THE ASSESSEE S CLIENTS. SUCH PAYMENTS WERE NOT ON ACCOUNT OF ANY INFRACTION OF L AW AND HENCE ALLOWABLE AS BUSINESS EXPENDITURE. IN SUCH A CASE T HE EXPLANATION TO ITA NO.168 & 1102/M/10 A.Y.06-07 7 SECTION 37 WOULD NOT APPLY. ACCORDINGLY QUESTION (C ) RAISED BY THE REVENUE CANNOT BE ENTERTAINED. 5. THE LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO P OINTED OUT THAT THE ISSUE IS ALSO COVERED BY THE DECISION OF T HE HONBLE TRIBUNAL IN THE CASE GODREJ & BOYCE MFG. CO. LTD. VS. I.T.ACT (2010 ) 2 ITR (TRIBU) 355 (MUM.) AND CLASSIC SHARE & STOCK BROKING SERVICES L TD. VS. DCIT (2007) 11 SOT 377 (MUM.). 6. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE LOW ER AUTHORITIES AND THE DECISIONS CITED ABOVE. WE FIND THAT THE PEN ALTY WAS ON ACCOUNT OF IRREGULARITIES COMMITTED BY THE ASSESSEES CLIENTS. MOREOVER, THE CAPITAL MARKET REGULATIONS OF THE STOCK EXCHANGES WERE IN T HE NATURE OF INDOOR MANAGEMENT GOVERNING RELATIONS BETWEEN THE MEMBER A ND THE STOCK EXCHANGE AND NOT AN OFFENCE PUNISHABLE BY THE STATU TE. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS, WE HOLD THAT THE CIT (A) HAS RIGHTLY DELETED THE ADDITION. THEREFORE, WE DO NOT FIND ANY MERIT T O INTERFERE WITH THE FINDINGS OF THE CIT(A). GROUND NO. 8 TO 13 ARE ACCO RDINGLY DISMISSED. RESPECTFULLY FOLLOWING THE SAME , WE DO NOT SEE ANY REASON TO DIFFER FROM THE ORDER OF CIT(A) ON THE ISSUE. ACCORDINGLY GROU NDS ARE REJECTED. 15. GROUND NOS. 6 TO 9 PERTAIN TO ISSUE OF CALCULAT ING INTEREST U/S 234B ON AMOUNT DISALLOWED U/S. 14A. THE LD. CIT(A) CONSIDERED THE GROUND PLACED BEFORE HIM AS UNDER : 8. GROUND NO. 10 IS REGARDING INTEREST U/S 234B OF RS.40,28,558/-. THE APPELLANT SUBMITTED THAT THE PROVISONS OF RULE 8D WERE NOT IN EXISTENCE AT THE TIME OF FILING OF RETURN HENCE, TH E APPELLANT COULD NOT BE CHARGED WITH THE DEFAULT OF MAKING LESS PAYMENT OF ADVANCE TAX. THE APPELLANT RELIED UPON THE DECISION IN THE CASE SEDC O FOREX INTERNATIONAL DRILLIN CO. LTD. 264 ITR, PAGE 320. THE RETURN OF I NCOME WAS FILED ON 30.11.2006. THE CBDT, VIDE NOTIFICATION NO. 45/2008 IS DATED 24.3.08, THE SPECIAL BENCHS DECISION OF ITAT, MUMBAI DATED 20.10.2008 IN THE CASE OF M/S DAGA CAPITAL MANAGEMENT PVT. LTD. IN IT A NO. 8057/M/03. UNDER THE CIRCUMSTANCES, IT IS HELD THAT THE APPELL ANT COULD NOT HAVE VISUALIZED THE DISALLOWANCE U/S 14A IN ACCORDANCE W ITH RULE 8D AMOUNTING TO RS33,51,001/- AT THE TIME OF FILING OF RETURN. THE LAW DOES NOT ENVISAGE IMPOSSIBLE. THE A.O. IS, THEREFORE, DI RECTED TO EXCLUDE THE AMOUNT OF DISALLOWANCE U/S 14A FOR LEVY OF INTEREST U/S 234B. 15.1 THE LD. DR SUBMITTED THAT INTEREST U/S. 234B I S MANDATORY AND PROVISIONS OF SECTION 14A ARE ALREADY ON STATUTE, T HEREFORE, LD. CIT(A) IS NOT CORRECT IN DELETING THE INTEREST. THE LD. COUNS EL HOWEVER SUPPORTED THE ORDERS OF CIT(A) TO SUBMIT THAT RULE 8D WAS NOT APPLICABLE FOR THE ITA NO.168 & 1102/M/10 A.Y.06-07 8 YEAR AND SO THE DISALLOWANCE MADE UNDER THE SECTION SHOULD NOT BE CONSIDERED FOR CALCULATING THE INTEREST U/S 234B. 16. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE NOT IN AGREEMENT WITH THE ORDER OF CIT(A). IN PRINCIPLE, THE LEVY OF INTEREST U/S. 234B IS MANDATORY AS HELD BY THE HONBLE SUPREME COURT IN T HE CASE OF CIT VS ANJUM M H GHASWALA 252 ITR 1(SC) AND IS TO BE CALCU LATED ON THE ASSESSED INCOME. AS HELD BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS INSILCO LTD 321 ITR 105 LEVY OF INTEREST U/S 234B IS COMPENSATORY IN NATURE AND IS CHARGEABLE NOT-WITHSTANDING THE FA CT THAT DEFAULT IS BONAFIDE. NO DISCRETION CAN BE EXERCISED IN MATTER OF LEVY OF INTEREST U/S 234B AS CONSIDERED BY THE COORDINATE BENCH IN THE C ASE OF ACIT VS PRIME SECURITIES LTD 95 ITD 249. THEREFORE, EXCLUSION OF THE AMOUNT AS CONSIDERED BY THE CIT(A) IS NOT ACCORDING TO THE PR OVISIONS OF LAW. THEREFORE, MODIFYING THE ORDER OF CIT(A), WE DIRECT AO TO LEVY INTEREST U/S. 234B, IF APPLICABLE AT THE TIME OF GIVING EFFE CT TO THIS ORDER, ON THE BASIS OF ASSESSED INCOME AS PER THE PROVISIONS OF L AW. GROUNDS ARE ALLOWED 17. REVENUE APPEAL IS PARTLY ALLOWED. 18. IN THE RESULT, BOTH THE APPEALS ARE PARTLY ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD AUGUST, 2013. SD/- SD/- (SANJAY GARG ) JUDICIAL MEMBER (B. RAMAKOTAIAH ) ACCOUNTANT MEMBER MUMBAI, DATED: 23/08/2013. JV. ITA NO.168 & 1102/M/10 A.Y.06-07 9 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.