Goyal & Co. (Const.) Pvt.Ltd., Ahmedabad V. DCIT Circle-2(1) (1), Ahmedabad

ITA 1757/AHD/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6372 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 19-07-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: L P JAIN
• Assessee Lawyers: V R CHOKSHI
• Keywords: Earning of tax free income; Rule 8D
• Section: 14A; 115JB; 201; 139

Judgement Text

PAGE 1 OF 17 , IN THE INCOME TAX APPELLATE TRIBUNAL , C BENCH, AHMEDABAD BEFORE , SHR I WASEEM AHMED , ACCOUNTANT MEMBER AND MS . MADHUMITA ROY , JUDICIAL MEMBER ./ ITA NO S.1757 - 1758/AHD/2017 / ASSTT. YEAR S : 2013 - 2014 & 2014 - 15 GOYAL & CO. (CONST.) PVT. LTD. , 10, FLOOR , COMMERCE HOUSE, 100 , FT ROAD, PRAHLAD NAGAR, SATELLITE , AHMEDABAD . PAN: AABCG5459R VS . D .C.I.T , CIRCLE 2(1)(2) , AHMEDABAD . (APPLICANT) ( RESPON D ENT ) ASSESSEE BY : SHRI V.R. CHOKSHI , A.R REVENUE BY : SHRI L.P. JAIN , SR . DR / DATE OF HEARING : 29 / 07 / 201 9 / DATE OF PRONOUNCEMENT: 16 /10 /2 01 9 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL S HAVE BEEN FILED AT THE INSTANCE OF THE AS SESSEE AGAINST THE ORDER S OF THE LEARNED COMMISS IONER OF INCOME TAX (APPEALS) - 2 , AHMEDABAD [ LD. CIT (A) IN SHORT] , DATED 25 / 04 / 2016 AND 27/10/2016 ARISING IN THE MATTER OF ASSESSMENT ORDER PASSED UNDER S. 143 (3) OF THE INCOME TAX ACT, 1961 ( HERE - IN - AFTER REFERRED TO AS 'THE ACT') DATED 28 / 03 / 201 6 & 27/09 /2016 RELEVANT TO ASSESSMENT YEAR (A . Y S ) 2013 - 14 & 20 14 - 15 RESPECTIVELY . ITA NOS.1757 - 1758/AHD/2017 AS STT. YEARS 2013 - 14 & 2014 - 15 PAGE 2 OF 17 FIRST, WE TAKE UP ASSESSEE S APPEAL BEARING ITA NO. 1757/AHD/2017. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS.8,33,606/ - UNDER SECTION 14A R.W.R.8D OF THE INCOME TAX ACT,1961 EVEN WHEN NO SUCH ADDITION IS CALLED FOR. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN CONFIRMING DISALLOWANCE U/S.14A OF THE ACT TO THE BOOK PROFIT U/S. 115JB OF THE ACT EVEN WHEN NO SUCH ADDITION IS CALLED FOR. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT (APPEALS) HAS ERRED IN CONFIRMING DISALLOWANCE AT RS. 9,26,942/ - U/S. 36(1 )(VA) OF THE ACT ON ACCOUNT OF LATE PAYMENT OF EMPLOYEE'S CONTRIBUTION TO PF WITHOUT APPRECIATING THE FACTS THAT THE SAME WERE DEPOSITED BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME, HENCE NOT SUBJECT TO DISALLOWANCE. 4. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, AMEND AND/OR WITHDRAW ANY GROUND OR GROUNDS OF APPEAL EITHER BEFORE OR DURING THE COURSE OF HEARING OF THE APPEAL. THE 1 ST ISSUE RAISED BY THE A SSESSEE IS THAT THE LD. CIT (A) ERRED IN CONFIRMING THE AD DITION MADE BY THE AO FOR RS. 8,33,606/ - ONLY UNDER SECTION 14A READ WITH RULE 8D OF THE INCOME TAX RULES WHILE COMPUTING THE INCOME UNDER NORMAL COMPUTATION AS WELL AS MAT COMPUTATION UNDER SECTION 115JB OF THE ACT. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN THE PRESENT CASE IS A PRIVATE LIMITED COMPANY AND ENGAGED IN THE BUSINESS OF CONSTRUCTION AND DEVELOPMENTS OF HOUSING AS WELL AS COMMERCIAL PROJECTS. THE ASSESSEE IS A PARTNER IN VARIOUS PARTNERSHIP FIRMS. THE ASSESSEE IN RESPECT TO SOME OF THE PARTNERSHIP FIRMS HAS SHOWN INVESTMENTS (POSITIVE) AS WELL AS IN RESPECT T O SOME PARTNERSHIP FIRMS, IT HAS SHOWN INVESTMENT IN NEGATIVE. THE DETAILS OF SUCH PARTNERSHIP FIRMS NUMBERING 16 WHERE IT H AS SHOWN POSITIVE AS WELL AS NEGATIVE INVESTMENTS ARE AVAILABLE ON PAGE - 3 OF THE ASSESSMENT ORDER. THE NET ITA NOS.1757 - 1758/AHD/2017 AS STT. YEARS 2013 - 14 & 2014 - 15 PAGE 3 OF 17 POSITIVE INVESTMENT IN THE PARTNERSHIP FIRMS AS ON 31 ST MARCH 2013 IS OF RS. 188,86,62,515.00 ONLY. 2.1 THE ASSESSEE FROM SOME OF THE PARTNERSHIP FI RMS HAS EARNED INTEREST INCOME ON ITS INVESTMENT AS WELL AS SHARE OF PROFIT. THE ASSESSEE FURTHER CLAIMED THAT IT HAS EARNED TAXABLE INTEREST INCOME FROM 11 PARTNERSHIP FIRMS OUT OF 16 PARTNERSHIP FIRMS. THE LIST OF SUCH PARTNERSHIP FIRM IS AVAILABLE ON PA GE 5 AND 6 OF THE ASSESSMENT ORDER. 2.2 SIMILARLY, THE ASSESSEE ALSO CLAIMED THAT THERE WAS NEGATIVE INVESTMENT AS ON 31 ST MARCH, 2013 IN 2 PARTNERSHIP FIRMS NAMELY 1. DEEP GALAXY DEVELOPERS AND 2. RIVIERA DEVELOPERS 2.3 THE ASSESSEE, SIMILARLY, FURTHER CLAIMED THAT IT HAS NOT MADE ANY INVESTMENT IN THE PARTNERSHIP FIRM DURING THE YEAR NAMELY M/S WHITEFIELD PROJECTS. AS PER THE ASSESSEE WHATEVER INVESTMENT WAS SHOWN IN SUCH FIRM WAS OUT OF ITS SHARE OF PROFIT CREDITED TO I TS ACCOUNT. 2.4 BESIDES THE ABOVE, THE ASSESSEE ALSO SUBMITTED THAT IT HAS SHOWN INVESTMENT IN SHARES OF THE COMPANY NAMELY SGV INFRASTRUCTURE PVT. LTD. AMOUNTING TO RS. 4,13,26,400/ - AS ON 31 MARCH 2013. 2.5 THE ASSESSEE DURING THE ASSESSMENT PROCEED INGS FURTHER CLAIMED THAT THERE CANNOT BE THE ANY DISALLOWANCE OF INTEREST EXPENSES AS ITS OWN FUNDS EXCEEDS THE AMOUNT OF INVESTMENT IN THE PARTNERSHIP FIRMS. SIMILARLY, THE ASSESSEE ALSO CLAIMED THAT IT HAS NOT INCURRED ANY EXPENDITURE FOR THE EARNING OF EXEMPTED INCOME FROM SUCH PARTNERSHIP FIRMS. ITA NOS.1757 - 1758/AHD/2017 AS STT. YEARS 2013 - 14 & 2014 - 15 PAGE 4 OF 17 2.6 HOWEVER, THE ASSESSEE TO AVOID THE LITIGATION OFFERED THE DISALLOWANCE AGAINST THE EXEMPTED INCOME WITH RESPECT TO 2 PARTNERSHIP FIRMS FROM WHICH THERE WAS NO INTEREST INCOME EARNED AND THERE WAS POSITIVE INVESTMENT IN SUCH FIRMS. THE ASSESSEE ALSO OFFERED TO MAKE THE DISALLOWANCE WITH RESPECT TO THE INVESTMENT IN THE SHARES. IN VIEW OF THE ABOVE THE ASSESSEE CLAIMED THAT THE DISALLOWANCE CAN BE MADE UNDER SECTION 14A READ WITH RULE 8D OF INCOME TAX RULES WITH RESPECT TO 2 PARTNERSHIP FIRMS AND THE INVESTMENT IN SHARES. THE DETAILS OF SUCH PARTNERSHIP FIRMS AND INVESTMENT IN TH E COMPANY STAND AS UNDER: WORKING FOR AVERAGE INVESTMENT IS AS UNDER: PARTICULARS 31.03.2013 31.03.2012 INVESTMENT IN FIRMS FROM WHERE NO INTEREST INCOME/NO PROFIT HAS BEEN DERIVED 17,47,497 GOYAL HARIYANA CONSTRUCTION 1,00,00,000 - 34,50,000 SAHIBAUG ORCHID DEVELOPERS 4,76,908,537 4,75,68,537 INVESTMENT IN EQUITY SHARES SGV SHARES 4,13,26,400 4,13,26,400 TOTAL INVESTMENTS 9,90,24,937 8,54,44,937 AVERAGE INVESTMENTS 9,22,34,937 PARTICULARS 31.03.2013 31.03.2012 TOTAL ASSETS 3,10,84,82,769 3,63,44,24,240 AVERAGE TOTAL ASSETS 337,14,53,505 2.7 THE ASSESSEE ACCORDINGLY MADE THE DISALLOWANCE OF THE EXPENSES AGAINST THE EXEMPTED INCOME EARNED FROM THE PARTNERSHIP FIRMS ON ACCOUNT OF E XEM PTED INCOME BY WAY OF SHARE OF PROFIT IN THE MANNER AS DETAILED BELOW: PARTICULARS AMOUNT (RS) PROPORTIONATE DISALLOWANCE OF INTEREST [INTEREST ON LOANS * AVERAGE INVESTMENTS/AVERAGE ASSETS = 6,57,03,694* 9,22,34,937/337,1453,505] 17,47,497 ADMINISTRATIVE EXPENDIT URE DISALLOWED VOLUNTARILY 50,000 TOTAL DISALLOWANCE MADE U/S.14A (A+B+C) 18,47,497 ITA NOS.1757 - 1758/AHD/2017 AS STT. YEARS 2013 - 14 & 2014 - 15 PAGE 5 OF 17 2.8 HOWEVER, THE AO, BESIDES THE INVESTMENT IN THE SHARES OF THE COMPANY, HAS CONSIDERED ONLY THOSE PARTNERSHIP FIRMS FROM WHICH THE ASSESSEE HAS EARNED ONLY TAX FREE INCOME AFTER EXCLUDING THE PARTNERSHIP FIRM S FROM WHERE INTEREST INCOME WAS EARNED AS WELL THE FIRMS WHERE THE INVESTMENT WAS IN NEGATIVE . THE DETAILS OF SUCH PARTNERSHIP FIRMS AND THE COMPANY CONSIDERED FOR THE PURPOSE OF THE DISALLOWANCE UNDER SECTION 14 A R.W.R. 8D OF INCOME TAX RULES STAND AS UNDER: STATEGIC INVESTMENT 31.03.2013 31.03.2012 GOYAL HARIYANA CONSTRUCTION 1,00,00,000 - 34,50,000 SAHIBAUG ORCHID DEVELOPERS 4,76,98,537 4,75,68,537 WHITEFIELD PROJECTS 3,49,00,079 - 4,00,774 INVESTMENT IN SHARES OF SGV 4,13,26,400 4,13,26,400 TOTAL 13,39,25,016 8,50,42,363 2.9 ACCORDINGLY, THE AO APPLIED THE PROVISIONS OF SECTION 14A READ WITH RULE 8D OF INCOME TAX RULE AND MADE THE DISALLOWANCE AS DETAILED UNDER: SERIAL NO. PARTICULARS AMOUNT 1 . DIRECT EXPENSES NIL 2 . INTEREST EXPENSES RS. 21,33,662/ - 3 . ADMINISTRATIVE EXPENSES RS. 5,47,423/ - TOTAL RS. 26,81,085/ - LESS: - THE AMOUNT ALREADY DISALLOWED BY THE ASSESSEE: RS. 18,47,479/ - NET DISALLOWANCE RS. 8,33,606/ - 2.10 THUS THE AO MADE THE DISALLOWANCE OF RS. 8,33,606/ - AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. ITA NOS.1757 - 1758/AHD/2017 AS STT. YEARS 2013 - 14 & 2014 - 15 PAGE 6 OF 17 2.11 THE AO ALSO ADDED THE AMOUNT DISALLOWED UNDER SECTION 14A READ WITH RULE 8D OF INCOME TAX RULE OF RS. 8,33,606/ - WHILE COMPUTING THE BOOK PROFIT UNDER THE HEAD MAT COMPUTATION IN SECTION 115JB OF THE ACT. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LD. CIT (A). 3. THE ASSESSEE BEFORE THE LD. CIT (A) , AMONG OTHER SUBMISSIONS, CONTENDED THAT THE AO DID NOT POIN T OUT ANY DEFECT IN THE SUO - MOTO DISALLOWANCE MADE BY IT. AS SUCH, THE AO WAS UNDER THE OBLIGATION TO RECORD THE DISSATISFACTION FOR THE DISALLOWANCE MADE BY IT FOR RS. 18,47,479/ - . 3.1 THE ASSESSEE FURTHER SUBMITTED THAT THERE WAS NO INVESTMENT MADE IN THE PARTNERSHIP F I RM NAMELY M/S WHITEFIELD PROJECTS DURING THE YEAR. AS SUCH THE INVESTMENT SHOWN THEREIN REPRESENTS THE SHARE OF PROFIT ALLOCATED TO THE ASSESSEE BY THE FIRM. THEREFORE, THE SAME SHOULD NOT HAVE BEEN CONSIDERED FOR THE PURPOSE OF DISALLOWA NCE UNDER SECTION 14A R . W . R . 8D OF INCOME TAX RULES . 3.2 THE ASSESSEE ALSO CLAIMED THAT THE SHARE OF PROFIT RECEIVED BY IT FROM THE PARTNERSHIP FIRMS HAS A LREADY SUFFERED THE TAX IN THE HANDS OF SUCH FIRMS. THEREFORE THERE CANNOT BE MADE THE DISALLOWANCE OF ANY EXPENSE UNDER THE PROVISIONS OF SECTION 14A READ WITH RULE 8D OF INCOME TAX RULE AGAINST SUCH SHARE OF PROFIT. 3.3 HOWEVER, THE LD. CIT (A) DISREGARDED THE CONTENTION OF THE ASSESSEE BY OBSERVING THE FACT THAT SIMILAR DISALLOWANCE WAS MADE IN THE CASE OF THE ASSESSEE FOR THE IMMEDIATE PRECEDING ASSESSMENT YEAR BY HIS PREDECESSOR. ACCORDINGLY, THE LD. CIT (A) CONFIRMED THE ORDER OF THE AO WHILE COMPUTING ITA NOS.1757 - 1758/AHD/2017 AS STT. YEARS 2013 - 14 & 2014 - 15 PAGE 7 OF 17 THE INCOME UNDER NORMAL COMPUTATION AND UNDER MAT COMPUTATION UNDER SECTION 115JB OF THE ACT. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT (A), THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LD. AR BEFORE US FILED A PAPER BOOK RUNNING FROM PAGES 1 TO 44 AND SUBMITTED THAT THE ASSESSEE HAS MADE THE SUO - MOTO DISALLOWANCE OF THE INTEREST AND ADMINISTRA TIVE EXPENSES AMOUNTING TO RS. 18,47,479/ - BUT THE AO, WITHOUT POINTING OUT ANY DEFECT IN SUCH DISALLOWANCE HAS REJECTED THE SAME AND MADE THE DISALLOWANCE AS PER THE PROVISIONS OF SECTION 14A READ WITH RULE 8D OF INCOME TAX RULE . 4.1 THE LD. AR ALSO SUBMITTED THAT ITS OWN FUNDS EXCEEDS THE AMOUNT OF INVESTMENT, THEREFORE THERE CANNOT BE ANY DISALLOWANCE OF INTEREST EXPENSES. THE LD. AR IN SUPPORT OF HIS CONTENTION DREW OUR ATTENTION ON PAGE 14 OF THE PAPER BOOK WHERE THE DETAILS OF THE AMOUNT OF INVESTMENT AND OWN FUNDS W ERE AVAILABLE. THE LD. AR ALSO CONTENDED THAT THE OWN FUNDS AVAILABLE WITH THE ASSESSEE SHOULD BE COMPARED WITH RESPECT TO THE INVESTMENT MADE IN THE PARTNERSHIP FIRMS WHICH WERE CONSIDERED FOR THE PURPOSE OF THE DISALL OWANCE. 5. ON THE OTHER HAND, THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THE INSTANT CASE RELATES TO THE DISALLOWANCES MADE BY THE AO UNDER SECTION 14A READ WITH RULE 8D OF INCOME TAX RULES. THE ASSESSEE HAS MADE INVESTMENT IN VARIOUS PARTNERSHIP ITA NOS.1757 - 1758/AHD/2017 AS STT. YEARS 2013 - 14 & 2014 - 15 PAGE 8 OF 17 FIRMS BESIDES THE INVESTMENT IN THE SHARES IN PRIVATE LIMITED COMPANY . THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS ALSO SHOWN THE AMOUNT OF EXEMPTED INCOME AMOUNTING TO RS. 15,02,40,401/ - ONLY . BUT THE ASSESSEE CLAI MED THAT IT HAS NOT INCURRED ANY EXPENDITURE AGAINST SUCH INCOME EITHER IN THE FORM OF INTEREST OR ADMIN ISTRATIVE EXPENSES. HOWEVER THE ASSESSEE, TO AVOID THE LITIGATION WITH THE DEPARTMENT HAS SUO - MOTO MADE THE DISALLOWANCE OF RS. 18,47,497/ - COMPRISING O F INTEREST OF RS. 17,47,497/ - AND ADMINISTRATIVE EXPENSES OF RS. 50,000/ - ONLY . (NOTE WE FIND A CALCULATION ERROR IN THE AMOUNT DISALLOWED BY THE ASSESSEE FOR RS. 50,000.00 WHICH THE AO WILL TAKE CARE IN THE GIVING EFFECT ORDER.) 6.1 HOWEVER, THE AO W ITHOUT REJECTING THE DISALLOWANCE MADE BY THE ASSESSEE SUO - MOTO BASED ON COGENT REASONS HAS INVOKED THE PROVISIONS OF SECTION 14A READ WITH RULE 8D AND MADE THE DISALLOWANCE OF RS. 26,81,085/ - ONLY . 6.2 NOW THE CONTROVERSY ARISES, WHETHER THE AO CAN RESO RT TO THE PROVISIONS OF SECTION 14A READ WITH RULE 8D WITHOUT REJECTING THE SUO - MOTO DISALLOWANCE MADE BY THE ASSESSEE. IN THIS REGARD, WE FIND THAT THE PROVISIONS OF SECTION 14A OF THE ACT REQUIRES THE AO TO RECORD THE SATISFACTION AFTER HAVING REGARD TO THE ACCOUNTS AS WELL AS CORRECTNESS OF THE CLAIM OF THE ASSESSEE IN RESPECT OF THE EXPENDITURE INCURRED IN CONNECTION WITH THE EXEMPTED INCOME. ADMITTEDLY, THERE WAS THE DISALLOWANCE MADE BY THE ASSESSEE FOR RS. 18,47,479/ - AGAINST THE EXEMPTED INCOME. BUT THE AO HAS NOT POINTED OUT ANY DEFECT IN THE DISALLOWANCE MADE BY THE ASSESSEE. THUS IN OUR CONSIDERED VIEW SUCH A CT OF THE AO IS IN VIOLATION OF THE PROVISIONS OF SECTION 14A READ WITH RULE 8D OF INCOME TAX RULE . AS SUCH, THE AO WAS UNDER THE OBLIGATION TO RECORD THE DISSATISFACTION ABOUT THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE. ITA NOS.1757 - 1758/AHD/2017 AS STT. YEARS 2013 - 14 & 2014 - 15 PAGE 9 OF 17 6.3 IN THIS REGARD, WE ALSO FIND SUPPORT AND G UIDANCE FROM THE ORDER OF HON BLE MUMBAI TRIBUNAL IN THE CASE OF DCIT V/S PIDILITE INDUSTRIES LTD. REPORTED IN 107 TAXMANN.COM 91 WHEREIN IT WAS HELD THAT THE AO IS TO FORM AN OPINION AS TO WHY THE DISALLOWANCE OFFERED BY THE ASSESSEE, HAVING REGARDS TO ITS ACCOUNTS, WAS NOT SATISFACTORY OR CORRECT. THE AFORESAID SATISFACTION OF THE AO I S SINE - QUA - NON, BEFORE ACQUIRING JURISDICTION UNDER SECTION 14A R.W. RULE 8D OF INCOME TAX RULES . THE RELEVANT HEADNOTES OF THE ORDER IS REPRODUCED HEREUNDER; WHERE ASSESSEE DECLARED TAX EXEMPT INCOME AND OFFERED SUO - MOTO DISALLOWANCE OF CERTAIN EXPENDITU RE UNDER SECTION 14A, SINCE ASSESSING OFFICER DID NOT SPECIFY ANY CAUSE OF DISSATISFACTION WITH ASSESSEE'S WORKING OF DISALLOWANCE UNDER SECTION 14A, ASSESSING OFFICER WAS NOT JUSTIFIED IN RECOMPUTING DISALLOWANCE. 6.4 WE FURTHER NOTE THAT THE AO MADE TH E DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D CONSIDERING ONLY THOSE PARTNERSHIP FIRMS FROM WHERE THE ASSESSEE HAS NOT EARN ED ANY TAXABLE INCOME. IT IS SETTLED LAW THAT THE FIRMS WHICH HAVE GIVEN RISE TO THE EXEMPTED INCOME SHOULD ONLY BE CONSIDERED F OR THE PURPOSE OF THE COMPUTING THE AVERAGE VALUE INVESTMENTS FOR THE DISALLOWANCE. THE HON BLE ITAT AHMEDABAD IN THE CASE OF GATEWAY TECHNOLABS (P) LTD. V/S DCIT REPORTED IN 100 TAXMANN.COM 147 HAS HELD THAT FOR THE PURPOSE OF MAKING THE DISALLOWANCE UNDE R SECTION 14A READ WITH RULE 8D OF INCOME TAX RULE, THE INVESTMENTS WHICH HAVE YIELDED THE EXEMPTED INCOME SHOULD ONL Y BE CONSIDERED. THE RELEVANT HEADNOTES OF THE ORDER IS REPRODUCED AS UNDER: EXPENDITURE INCURRED IN RELA TION TO EXEMPT INCOME NOT INCLUDIBLE IN TOTAL INCOME (GENERAL) - WHETHER FOR PURPOSE OF COMPUTING ADMINISTRATIVE EXPENSES TO BE DISALLOWED UNDER SECTION 14A, READ WITH RULE 8D, ONLY SUCH INVESTMENTS ARE TO BE TAKEN INTO ACCOUNT WHICH YIELD TAX EXEMPT INCOME ITA NOS.1757 - 1758/AHD/2017 AS STT. YEARS 2013 - 14 & 2014 - 15 PAGE 10 OF 17 AT THIS JUNCTURE, WE A RE ALSO INCLINED TO REFER THE PROVISIONS OF SECTION 14A OF THE ACT WHICH READS AS UNDER: 14A. (1) FOR THE PURPOSES OF COMPUTING THE TOTAL INCOME UNDER THIS CHAPTER, NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF EXPENDITURE INCURRED BY THE ASSESSEE IN RELATI ON TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THIS ACT.] (2) THE ASSESSING OFFICER SHALL DETERMINE THE AMOUNT OF EXPENDITURE INCURRED IN RELATION TO SUCH INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THIS ACT IN ACCORDANCE WIT H SUCH METHOD AS MAY BE PRESCRIBED, IF THE ASSESSING OFFICER, HAVING REGARD TO THE ACCOUNTS OF THE ASSESSEE, IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE IN RESPECT OF SUCH EXPENDITURE IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THIS ACT. THE ABOVE PROVISION REQUIRES TO MAKE THE DISALLOWANCE IN RELATION TO SUCH INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT. SUCH INCOME DENOTES ONLY THAT INCOME WHICH HAS BEEN GENERATED IN THE YEAR UNDER CONSIDERATION. THUS, SUCH INCOME SH OULD BE READ WITH RESPECT TO THE CORRESPONDING INVESTMENTS. THEREFORE, ONLY THOSE INVESTMENTS NEEDS TO BE CONSIDERED WHICH HAVE GENERATED THE EXEMPTED INCOME. 6.5 IN VIEW OF THE ABOVE WE HOLD THAT THE OWN FUND OF THE ASSESSEE SHOULD BE COMPARED WITH THE INVESTMENTS WHICH HAVE YIELDED DIVIDEND INCOME FOR MAKING THE DISALLOWANCE ON ACCOUNT OF INTEREST EXPENSES. ADMITTEDLY, THE OWN FUND OF THE ASSESSEE STANDS AT RS. 115,45,31,645/ - AS ON 31 ST MARCH, 2013 WHEREAS THE INVESTMENT IN THE ALLEGED PARTNERSHIP FIR MS STANDS AT RS. 9,90,24,937/ - . THUS IT IS CLEAR THAT THE OWN FUND OF THE ASSESSEE EXCEEDS THE INVESTMENT. THEREFORE IN OUR CONSIDERED VIEW THERE CANNOT BE ANY DISALLOWANCE OF INTEREST EXPENSES. IN THIS REGARD WE PLACE OUR RELIANCE ON THE JUDG MENT OF HON B LE HIGH COURT OF GUJARAT IN THE CASE OF CIT V/S GUJARAT STATE FERTILIZERS AND CHEMICALS LIMITED REPORTED IN 36 TAXMANN.COM 230 WHEREIN IT WAS HELD AS UNDER; EXPENSES INCURRED CAN BE ALLOWED ONLY TO THE EXTENT THEY ARE RELATABLE TO THE EARNING OF TAXABLE INCOME. IN ABSENCE OF SECTION 14A, THE EXPENDITURE ITA NOS.1757 - 1758/AHD/2017 AS STT. YEARS 2013 - 14 & 2014 - 15 PAGE 11 OF 17 INCURRED IN RESPECT OF EXEMPT INCOME WAS ALSO BEING CLAIMED AGAINST TAXABLE INCOME AND SUCH PRACTICE, SINCE WAS TO BE CURBED, SECTION 14A WAS INSERTED. IT IS CLARIFIED THAT SUB - SECTION (1) OF SECTION 14A CLEARLY STIPULATES THAT FOR THE PURPOSE OF COMPUTING TOTAL INCOME UNDER CHAPTER IV, NO DEDUCTION IS PERMISSIBLE IN RESPECT OF THE EXPENDITURE INCURRED IN RELAT ION TO THE INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME. IN THE PRESENT CASE, THE DIVIDEND INCOME EARNED WAS OF RS. 1.14 CRORES AND THE ESTIMATE OF EXPENDITURE WAS ASSESSED AT THE RATE OF 10 PER CENT OF THE TOTAL INCOME. HAD THE REVENUE BEEN SUCCE SSFUL IN ESTABLISHING THAT THE ASSESSEE HAD INCURRED THE EXPENSES TO EARN THE DIVIDEND INCOME FROM THE BORROWED FUNDS, THE ENTIRE DISCUSSION OF APPLICATION OF SECTION 14A COULD BE UNDERSTOOD. HOWEVER, WHEN BOTH THE COMMISSIONER (APPEALS)AND THE TRIBUNAL HA VE NOTED THAT THE ASSESSEE HAD SUFFICIENT FUNDS AVAILABLE WITH IT, WHICH WAS MORE THAN THE AMOUNT IT INVESTED FOR EARNING THE DIVIDEND INCOME, BOTH THESE AUTHORITIES CORRECTLY APPROACHED THE ISSUE BY SETTING ASIDE THE ORDER OF DISALLOWANCE UNDER SECTION 14 A IN RESPECT OF INTEREST EXPENDITURE. WHEN THE VERY BASIS FOR EMPLOYING SECTION 14A ON FACTUAL MATRIX IS LACKING, THE DISALLOWANCE TO THE EXTENT OF 10 PER CENT OF DIVIDEND INCOME WAS NOT PERMISSIBLE. WHEN IT TRANSPIRES FROM RECORD THAT THE ASSESSEE'S OWN F UNDS WERE AT HIGHER THAN THE INVESTMENT MADE BY IT, WITH NOTHING TO INDICATE THAT THE BORROWED FUNDS WERE UTILISED FOR THE PURPOSE OF INVESTMENT IN SHARES AND FOR EARNING DIVIDENDS, THE TRIBUNAL COMMITTED NO ERROR. 6.6 ACCORDINGLY, WE FURTHER HOLD THAT T HE DISALLOWANCES ON ACCOUNT OF INTEREST EXPENSES IN THE CASE ON HAND CANNOT BE MADE IN VIEW OF THE FACT THAT THE OWN FUND OF THE ASSESSEE EXCEEDS THE IMPUGNED INVESTMENTS. 6.7 HOWEVER, WE HAVE ALREADY HELD THAT THERE CANNOT BE MADE ANY DISALLOWANCE OF AN Y INTEREST AS WELL AS ADMINISTRATIVE EXPENSES IN THE GIVEN FACTS AND CIRCUMSTANCES DUE TO THE FACT THAT THE AO HAS NOT POINTED OUT ANY DEFECT IN THE DIS ALLOWANCES MADE BY THE ASSESSEE AS WELL AS NO SATISFACTION WAS RECORDED AS MAND ATED UNDER SECTION 14A R. W.R. 8D OF INCOME TAX RULES. 6.8 REGARDING THE ADDITION IN THE BOOK PROFIT UNDER SECTION 115JB OF THE ACT, WE NOTE THAT THE AO IN THE INSTANT CASE HAS MADE THE DISALLOWANCE U/S 14A R.W.R. 8D OF THE INCOME TAX RULES FOR RS. 8,33,606/ - WHILE DETERMINING TH E INCOME UNDER NORMAL COMPUTATION OF INCOME. FURTHER, THE AO WHILE ITA NOS.1757 - 1758/AHD/2017 AS STT. YEARS 2013 - 14 & 2014 - 15 PAGE 12 OF 17 DETERMINING THE INCOME UNDER MINIMUM ALTERNATE TAX (MAT) AS PER THE PROVISIONS OF SECTION 115JB OF THE ACT, HAS ADDED THE DISALLOWANCE MADE UNDER THE NORMAL COMPUTATION OF INCOME UNDER SECT ION 14A R.W.R. 8D OF INCOME TAX RULE FOR RS. 8,33,606/ - IN PURSUANCE TO THE CLAUSE (F) OF EXPLANATION 1 TO SECTION 115JB OF THE ACT. 6.9 HOWEVER, WE NOTE THAT IN THE RECENT JUDGMENT OF SPECIAL BENCH OF HON BLE DELHI TRIBUNAL IN THE CASE OF ACIT VS. VIREE T INVESTMENT PVT. LTD. REPORTED IN 82 TAXMANN.COM 415 HAS HELD THAT THE DISALLOWANCES MADE U/S 14A R.W.R. 8D CANNOT BE THE SUBJECT MATTER OF DISALLOWANCES WHILE DETERMINING THE BOOK PROFIT U/S 115JB OF THE ACT. THE RELEVANT PORTION OF THE SAID ORDER IS REP RODUCED BELOW: IN VIEW OF ABOVE DISCUSSION, THE COMPUTATION UNDER CLAUSE (F) OF EXPLANATION 1 TO SECTION 115JB(2), IS TO BE MADE WITHOUT RESORTING TO THE COMPUTATION AS CONTEMPLATED UNDER SECTION 14A, READ WITH RULE 8D OF THE INCOME - TAX RULES, 1962. 6 .10 THE RATIO LAID DOWN BY THE HON BLE TRIBUNAL IS SQUARELY APPLICABLE TO THE FACTS OF THE CASE ON HAND. THUS IT CAN BE CONCLUDED THAT THE DISALLOWANCE MADE UNDER SECTION 14A R.W.R. 8D CANNOT BE RESORTED WHILE DETERMINING THE EXPENSES AS MENTIONED UNDER CL AUSE (F) TO EXPLANATION 1 TO SECTION 115JB OF THE ACT. 6.11 HOWEVER, IT IS ALSO CLEAR THAT THE DISALLOWANCE NEEDS TO BE MADE WITH RESPECT TO THE EXEMPTED INCOME IN TERMS OF THE PROVISIONS OF CLAUSE (F) TO SECTION 115JB OF THE ACT WHILE DETERMINING THE BOOK PROFIT. IN HOLDING SO, WE DRAW SUPPORT FROM THE JUDGMENT OF HON BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. JAYSHREE TEA INDUSTRIES LTD. IN GO NO.1501 OF 2014 (ITAT NO.47 OF 2014) DATED 19.11.14 WHEREIN IT WAS HELD THAT THE DISALLOWANCE REGARDING ITA NOS.1757 - 1758/AHD/2017 AS STT. YEARS 2013 - 14 & 2014 - 15 PAGE 13 OF 17 THE EXEMPTED INCOME NEEDS TO BE MADE AS PER THE CLAUSE (F) TO EXP LANATION - 1 OF SEC. 115JB OF THE ACT INDEPENDENTLY. THE RELEVANT EXTRACT OF THE JUDGMENT IS REPRODUCED BELOW: - WE FIND COMPUTATION OF THE AMOUNT OF EXPENDITURE RELATABLE TO EXEMPTED INCOME OF THE ASSESSEE MUST BE MADE SINCE THE ASSESSEE HAS NOT CLAIMED SUC H EXPENDITURE TO BE NIL. SUCH COMPUTATION MUST BE MADE BY APPLYING CLAUSE (F) OF EXPLANATION 1 UNDER SECTION 115JB OF THE ACT. WE REMAND THE MATTER FOR SUCH COMPUTATION TO BE MADE BY THE LD. TRIBUNAL. WE ACCEPT THE SUBMISSION OF MR. KHAITAN, LD. SENIOR ADV OCATE THAT THE PROVISION OF SECTION 115JB IN THE MATTER OF COMPUTATION IS A COMPLETE CODE IN ITSELF AND RESORT NEED NOT AND CANNOT BE MADE TO SECTION 14A OF THE ACT. GIVEN ABOVE, WE HOLD THAT THE DISALLOWANCES MADE UNDER THE PROVISIONS OF SEC. 14A R.W.R. 8D OF THE IT RULES, CANNOT BE APPLIED TO THE PROVISION OF SEC. 115JB OF THE ACT AS PER THE DIRECTION OF THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. JAYSHREE TEA INDUSTRIES LTD. (SUPRA) . 6.12 NOW THE QUESTION ARISES TO DETERMINE THE DISALLOWANCE AS PER THE CLAUSE (F) TO EXPLANATION - 1 OF SEC. 115JB OF THE ACT INDEPENDENTLY. IN THIS REGARD , WE NOTE THAT THERE IS NO MECHANISM/ MANNER GIVEN UNDER THE CLAUSE (F) TO EXPLANATION - 1 OF SEC. 115JB OF THE ACT TO WORKOUT/ DETERMINE THE EXPENSES WITH RESPECT TO THE EXEMPTED INCOME. THEREFORE IN THE GIVEN FACTS & CIRCUMSTANCES, WE FEEL THAT AD - HOC DISALLOWANCE WILL SERVE THE JUSTICE TO THE REVENUE AND ASSESSEE TO AVOID THE MULTIPLICITY OF THE PROCEEDINGS AND UNNECESSARY LITIGATION. THUS WE DIRECT THE AO TO MAKE THE DISALLOWANCE OF 1% OF THE EXEMPTED INCOME AS DISCUSSED ABOVE UNDER CLAUSE (F) TO EXPLANATION - 1 OF SEC. 115JB OF THE ACT. WE ALSO FEEL TO BRING THIS FACT ON RECOR D THAT WE HAVE RESTORED OTHER CASES INVOLVING IDENTICAL ISSUES TO THE FILE OF AO FOR MAKING THE DISALLOWANCE AS PER THE CLAUSE (F) TO EXPLANATION - 1 OF SEC. 115JB OF THE ACT INDEPENDENTLY. BUT NOW WE NOTE THAT THERE IS NO MECHANISM PROVIDED UNDER THE CLAUSE (F) TO EXPLANATION - 1 OF SEC. 115JB OF ITA NOS.1757 - 1758/AHD/2017 AS STT. YEARS 2013 - 14 & 2014 - 15 PAGE 14 OF 17 THE ACT TO MAKE THE DISALLOWANCE INDEPENDENTLY. THEREFORE OUR ACTION FOR RESTORING BACK THE ISSUE TO THE FILE OF AO WOULD UNNECESSARILY CAUSE FURTHER LITIGATION. THUS WE LIMIT THE DISALLOWANCE ON AN AD - HOC BASIS @ 1 % OF THE EXEMPTED INCOME AS PER THE CLAUSE (F) TO EXPLANATION - 1 OF SEC. 115JB OF THE ACT SUBJECT TO THE CONDITION THAT THE DISALLOWANCE SHALL NOT EXCEED THE AMOUNT OF DISALLOWANCE DETERMINED BY THE AUTHORITIES BELOW . HENCE THE GROUND OF APPEAL OF THE ASSESS EE IS PARTLY ALLOWED. THE 2 ND ISSUE RAISED BY THE ASSESSEE IS THAT THE LD. CIT (A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 9,26,942/ - ON ACCOUNT OF LATE PAYMENT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND. 7. THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS DEPOSITED THE EMPLOYEES PROVIDENT FUND AND ESIC AFTER THE DUE DATE AS SPECIFIED UNDER THE RELEVANT ACT AMOUNTING TO RS. 9,26,942.00 ONLY . THE AO ACCORDINGLY FOUND THAT THE IMPUGNED EXPENSES IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 36(1 )(VA) READ WITH SECTION 2(24)(X) OF THE ACT. ACCORDINGLY THE AO DISALLOWED THE SAME AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 8. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A) WHO HAS CONFIRMED THE ORDER OF THE AO. 9. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT - A, THE ASSESSEE IS IN APPEAL BEFORE US. THE LD. AR BEFORE US SUBMITTED THAT THE AMOUNT OF EMPLOYEES PF CONTRIBUTION WAS DEPOSITED BEFORE THE DUE DATE OF FILING INCOME TAX RETURN AS SPECIFIED UNDER SECTION 139 OF THE ACT . ITA NOS.1757 - 1758/AHD/2017 AS STT. YEARS 2013 - 14 & 2014 - 15 PAGE 15 OF 17 10. ON THE OTHER HAND, THE LEARNED DR BEFORE US VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 11. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE DELAY IN DEPOSIT MADE TO THE EMPLOYEES PROVIDENT FUND AND ESIC IS NOT ELIGIBLE FOR DEDUCTION BY VIRTUE OF THE DECISION OF HON BLE GUJARAT HIGH COURT IN THE CASE OF CIT VERSUS GSRTC REPORTED IN 366 ITR 170 WHEREIN IT WAS HELD AS UNDER: IN VIEW OF THE ABOVE AND CONSIDERING SECTION 36(1)(VA), READ WITH SUB - CLAUSE (X) OF CLAUSE (24) OF SECTION 2, IT IS TO BE HELD THAT WITH RESPECT TO THE SUM RECEIVED BY THE ASSESSEE FROM ANY OF HIS EMPLOYEES TO WHICH PROVISIONS OF SUB - CLAUSE (X) OF CLAUSE (24) OF SECTION 2 APPLIES, THE ASSESSEE SHALL BE ENTITLED TO DEDUCTION IN COMPUTING THE INCOME REFERRED TO IN SECTION 28 WITH RESPECT TO SUCH SUM CREDITED BY THE ASSESSEE TO THE EMPLOYEES ACCOUNT IN THE RELEVANT FUND OR FUNDS ON OR BEFORE THE 'DUE DATE' MENTIONED IN EXPLANATION TO SECTION 36(1)(VA). CONSEQUENTLY , IT IS HELD THAT THE TRIBUNAL HAS ERRED IN DELETING RESPECTIVE DISALLOWANCES BEING EMPLOYEES' CONTRIBUTION TO PF ACCOUNT/ESI ACCOUNT MADE BY THE ASSESSING OFFICER AS, AS SUCH, SUCH SUMS WERE NOT CREDITED BY THE RESPECTIVE ASSESSEE TO THE EMPLOYEES 'ACCOUN TS IN THE RELEVANT FUND OR FUNDS ON OR BEFORE THE DUE DATE AS PER THE EXPLANATION TO SECTION 36(1)(VA) OF THE ACT I.E. DATE BY WHICH THE CONCERNED ASSESSEE WAS REQUIRED AS AN EMPLOYER TO CREDIT EMPLOYEES' CONTRIBUTION TO THE EMPLOYEES ACCOUNT IN THE PROVID ENT FUND UNDER THE PROVIDENT FUND ACT AND/OR IN THE ESI FUND UNDER THE ESI ACT. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE AUTHORITIES BELOW. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. IN THE RESULT TH E APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. COMING TO THE ITA NO. 1758 /AHD/2017 , T HE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: ITA NOS.1757 - 1758/AHD/2017 AS STT. YEARS 2013 - 14 & 2014 - 15 PAGE 16 OF 17 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS.79,28,690/ - UNDER SECTION 14A R.W.R.8D OF THE INCOME TAX ACT, 1961 EVEN WHEN NO SUCH ADDITION IS CALLED FOR. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN CONFIRMING DISALLOWANCE U/S.14A OF THE ACT TO THE BOOK PR OFIT U/S. 115JB OF THE ACT EVEN WHEN NO SUCH ADDITION IS CALLED FOR. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT (APPEALS) HAS ERRED IN CONFIRMING DISALLOWANCE AT RS. 26,880/ - U/S. 36(1)(VA) OF THE ACT ON ACCOUNT OF LATE PAYMENT OF EMPLOYEE'S CONTRIBUTION TO PF WITHOUT APPRECIATING THE FACTS THAT THE SAME WERE DEPOSITED BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME, HENCE NOT SUBJECT TO DISALLOWANCE. 4. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, AMEND AND/OR WITHDRAW ANY GROUND OR GROUNDS OF APPEAL EITHER BEFORE OR DURING THE COURSE OF HEARING OF THE APPEAL. THE 1 ST ISSUE RAISED BY THE ASSESSEE IS THAT THE LD. CIT - A ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE AO FOR RS. 79,28,690.00 ONLY. 12. A T THE OUTSET, WE NOT E THAT THE ISSUE RAISED BY THE ASSESSEE AS DISCUSSED ABOVE IS IDENTICAL TO THE ISSUE RAISED IN ITA NO. 1757/AHD/2017 WHICH HAS BEEN DECIDED BY US IN FAVOUR OF THE ASSESSEE V IDE PARAGRAPH NUMBER 6 TO 6.5 OF THIS ORDER . F OR THE DETAILED DISCUSSION, PLEASE REFER THE RELEVANT PARAGRAPH. RESPECTFULLY FOLLOWING THE SAME WE ALLOW THE GROUND OF APPEAL OF THE ASSESSEE IN PART. 13. THE 2 ND ISSUE RAISED BY THE ASSESSEE IS THAT THE LD. CIT - A ERRED IN CONFIRMING THE ADDITION FOR THE DISALLOWANCE MADE UNDER SECTION 1 4A R.W.R. 8D OF INCOME TAX RULES WHILE DETERMINING THE INCOME UNDER THE MAT PROVISIONS. 14 . A T THE OUTSET, WE NOTE THAT THE ISSUE RAISED BY THE ASSESSEE AS DISCUSSED ABOVE IS IDENTICAL TO THE ISSUE RAISED IN ITA NO. 1757/AHD/2017 WHICH HAS ITA NOS.1757 - 1758/AHD/2017 AS STT. YEARS 2013 - 14 & 2014 - 15 PAGE 17 OF 17 BEEN DECIDED B Y US AGAINST THE ASSESSEE IN PART V ID E PARAGRAPH NUMBER 6.6 TO 6.9 OF THIS ORDER. F OR THE DETAILED DISCUSSION, PLEASE REFER THE RELEVANT PARAGRAPH. RESPECTFULLY FOLLOWING THE SAME WE DISMISS THE GROUND OF APPEAL OF THE ASSESSEE IN PART . 15. THE 3 RD ISSUE RAISED BY THE ASSESSEE IS THAT THE LD. CIT - A ERRED IN CONFIRMING THE ADDITION FOR THE DISALLOWANCE MADE FOR RS. 26,880.00 ON ACCOUNT OF LATE DEPOSIT OF EMPLOYEES PF AND ESI. 16 . A T THE OUTSET, WE NOTE THAT THE ISSUE RAISED BY THE ASSESSEE AS DISCUSSED A BOVE IS IDENTICAL TO THE ISSUE RAISED IN ITA NO. 1757/AHD/2017 WHICH HAS BEEN DECIDED BY US AGAINST THE ASSESSEE V ID E PARAGRAPH NUMBER 11 OF THIS ORDER. F OR THE DETAILED DISCUSSION, PLEASE REFER THE RELEVANT PARAGRAPH. RESPECTFULLY FOLLOWING THE SAME WE DI SMISS THE GROUND OF APPEAL OF THE ASSESSEE. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 17 . IN THE COMBINED RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. O RDER PRONOUNCED IN THE COURT ON 16 /10 / 2019 AT AHMEDABAD. - SD - - SD - (MS MADHUMITA ROY) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (TRUE COPY) A HMEDABAD; DATED 16 / 10 /2019 M ANISH