DCIT, Circle-4, Kolkata, Kolkata V. M/S. Jay Shree Tea & Industries Ltd., Kolkata

ITA 2009/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1672 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 31-10-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B K CHATURVEDI
• Assessee Lawyers: MD GHAYAS UDDIN J; GOUTEN HANGSHING
• Keywords: Business expenditure; Earning of tax free income; Proportionate interest; Notional interest
• Section: 143(3); 14A; 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 2009 - 2010 / KOL / 2014 ASSESSMENT YEARS :2010-11 & 2011-12 DCIT, CIRCLE-4 P-7, CHOWRINGHEE SQUARE, KOLKATA-69 V/S . M/S JAY SHREE TEA & INDUSTRIES LTD., 10, CAMAC STREET, INDUSTRY HOUSE, 15 TH FLOOR, KOLKATA-17 [ PAN NO.AAACJ 7788 C ] /APPELLANT .. / RESPONDENT /BY ASSESSEE SHRI GOUTEN HANGSHING, CIT-DR & MD. GHAYAS UDDIN, JCIT-DR /BY RESPONDENT SHRI B.K. CHATURVEDI, AR /DATE OF HEARING 27-04-2017 ! /DATE OF PRONOUNCEMENT 02-06-2017 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- BOTH APPEAL BY THE REVENUE ARE DIRECTED AGAINST TH E DIFFERENT ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)-IV, KOLKATA OF EVEN DATED I.E. 11.08.2014. ASSESSMENTS WERE FRAMED BY DCIT, CIRCLE -4, KOLKATA U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED T O AS THE ACT) VIDE THEIR ORDERS DATED 26.03.2013 & 04.12.2013 FOR ASSESSMENT YEARS 2010-11 & 2011- 12 RESPECTIVELY. SHRI GOUTEN HANGSHING & MD. GHAYAS UDDIN, LD. DEPAR TMENTAL REPRESENTATIVES REPRESENTED ON BEHALF OF REVENUE AN D SHRI B.K. CHATURVEDI, LD. AUTHORIZED REPRESENTATIVE APPEARED ON BEHALF OF ASSESSEE. ITA NO.2009-2010/KOL/2014 A.YS. 2010-11 & 201 -12 DCIT CIR-4 KOL. VS. M/S JAY SHREE TEA & INDS. LTD . PAGE 2 2. BOTH THE APPEALS ARE HEARD TOGETHER AND ARE BEIN G DISPOSED OF BY WAY OF A CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE . FIRST WE TAKE UP ITA NO. 2009/KOL/2014 FOR A.Y. 10- 11 . 3. FIRST ISSUE RAISED BY REVENUE IN THIS APPEAL IS THAT LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER FOR 59,75,517/- UNDER THE PROVISION OF SEC. 14A R.W.R RULE-8D OF IT RULES, 19 62. 4. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS A LIMI TED COMPANY AND ENGAGED IN PRODUCTION OF GREEN LEAF AND MANUFACTURING OF TE A, CHEMICALS AND FERTILIZERS ETC. THE ASSESSEE IN THE YEAR UNDER CONSIDERATION H AS DISALLOWED A SUM OF 45,15,400/- UNDER THE PROVISION OF SEC. 14A R.W.S. RULE 8D OF THE IT RULES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESS ING OFFICER OBSERVED THAT ASSESSEE HAS NOT MADE ANY DISALLOWANCE ON ACCO UNT OF INTEREST EXPENSE. THUS, AO WORKED OUT THE DISALLOWANCE OF THE INTERES T AS PER THE PROVISION OF RULE8D(2)(II) WHICH COMES OUT FOR 59,75,517/- AND THE IMPUGNED AMOUNT OF INTEREST WAS DISALLOWED AND ADDED TO THE TOTAL INCO ME OF ASSESSEE. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A). THE ASSESSEE BEFORE LD CIT(A) SUBMITTED THAT NO BORROWE D FUND HAS BEEN UTILIZED IN THE IMPUGNED INVESTMENT AS THERE WAS SUFFICIENT OWN FUND AVAILABLE WITH IT. LD. CIT(A) AFTER CONSIDERING THE SUBMISSION OF ASSE SSEE DELETED THE ADDITION MADE BY AO BY OBSERVING AS UNDER:- 3.1 I HAVE EXAMINED THE ASSESSMENT ORDER AND THE W RITTEN SUBMISSION MADE BY THE AR OF THE APPELLANT. THE APPELLANT HAS SUBMITTED ITS BALANCE SHEET AND P&L A/C. FOR THE YEAR UNDER REVIE W FROM WHERE IT IS EVIDENT THAT THE APPELLANT WAS HAVING SUFFICIENT RE SERVE I.E. RS.152.41 CRORES AS ON 31.03.2009 AND RS.206.67 CRORES AS ON 31.03.2010 WHEREAS TOTAL INVESTMENT AS ON 01.04.2009 WAS RS.10 0.71 CRORES AND ON 31.03.2010 WAS RS.84.85 CRORES. FROM THE ABOVE F ACTS IT IS CLEAR THAT THERE IS CONSIDERABLE FORCE IN THE ARGUMENT ADVANCE D BY THE APPELLANT THAT THE INVESTMENT WAS MADE OUT OF OWN FUND AND NO T FORM THE BORROWED FUND. THEREFORE, THE QUESTION OF DISALLOWA NCE OF PROPORTIONATE INTEREST UNDER RULE 8D(2)(II) DOES NOT ARISE. THE REVENUE, BEING AGGRIEVED, IS IN APPEAL BEFORE U S ON THE FOLLOWING GROUND:- ITA NO.2009-2010/KOL/2014 A.YS. 2010-11 & 201 -12 DCIT CIR-4 KOL. VS. M/S JAY SHREE TEA & INDS. LTD . PAGE 3 I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.597 5517/- AS DISALLOWANCE MADE U/S. 14A R.W.R 8D OVERLOOKING THE FACT THAT THE SAME WAS MADE IN ACCORDANCE WITH THE PROVISIONS OF IT AC T, 1961. 6. THE LD. DR SUBMITTED THAT IT IS THE DUTY OF THE ASSESSEE TO JUSTIFY ON THE BASIS OF DOCUMENTARY EVIDENCE WHETHER OWN FUND WAS UTILIZED IN MAKING THE INVESTMENT IN SECURITIES. LD. DR IN SUPPORT OF HIS CLAIM HAS RELIED IN THE ORDER OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF DHUNKA AND SONS REPORTED IN 12 TAXMAN 227. THE LD. DR RELIED IN THE ORDER OF AO. ON THE OTHER HAND, THE LD. AR FOR THE ASSESSEE SUBM ITTED THAT THERE WAS SUFFICIENT OWN FUND AVAILABLE WITH THE ASSESSEE FOR MAKING THE INVESTMENT IN THE SECURITIES. THEREFORE, THERE IS NO QUESTION OF MAKING DISALLOWANCE ON ACCOUNT OF INTEREST EXPENSE. THE LD. AR VEHEMENTLY SUPPORTED THE ORDER OF LD. CIT(A). 7. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PART IES AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD; INCLUD ING THE JUDICIAL PRONOUNCEMENTS CITED AND PLACED RELIANCE UPON. AT T HE OUTSET, WE FIND THAT ISSUE RAISED BY REVENUE IS COVERED IN ASSESSEES OW N CASE IN ITA NO. 675/KOL/2014 FOR A.Y. 2009-10 DATED 03.02.2017, THE RELEVANT EX TRACT OF ORDER IS REPRODUCED BELOW:- IT IS OBSERVED THAT A SIMILAR DISALLOWANCE ON ACCOU NT OF PROPORTIONATE INTEREST EXPENDITURE BY APPLYING RULE 8D(2)(II) WAS MADE IN ASSESSEES CASE FOR A.Y. 2008-09 AND THE OR DER OF THE LD. CIT(APPEALS) DELETING THE SAID DISALLOWANCE WAS UPH ELD BY THE TRIBUNAL VIDE ITS ORDER DATED 13.07.2016 PASSED IN ITA NO. 2773/KOL/2013 FOR THE FOLLOWING REASONS GIVEN IN PA RAGRAPHS NO. 6 & 7 OF ITS ORDER:- 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE FACTS STATED HEREINABOVE REMAIN UNDISPUTED AND HENCE THE SAME AR E NOT REITERATED FOR THE SAKE OF BREVITY. ADMITTEDLY THE DISALLOWANCE U/S 14A TO THE TUNE OF RS.92,89,825/- HAVE BEEN MADE BY THE LD. AO BY INVOKING THE PROVISIONS OF RULE 8D(2)(II) OF THE RULES. WE FIND THAT THE ASSES SEE COMPANY IS HAVING SHARE CAPITAL OF RS.10.67 CRORES AND SUFFICIENT FREE RESERVES OF RS.123.67 CRORES AS ON 31.3.2007 AND RS.137.99 CRORES AS ON 31.3.2008, BUT WHEREAS THE TOTAL INVESTMENTS AS ON 1.4.2007 WAS ITA NO.2009-2010/KOL/2014 A.YS. 2010-11 & 201 -12 DCIT CIR-4 KOL. VS. M/S JAY SHREE TEA & INDS. LTD . PAGE 4 RS.105.86 CRORES AND AS ON 31.3.2008 WAS RS.94.68 CRORES. WE FIND THAT THE LD. CIT(A) HAD GIVEN RELIE F AFTER GOING THROUGH THE COPY OF THE AGREEMENT OF CONSORTI UM OF THE BANKS AND SANCTION LETTERS OF THE BANKS SUBMITT ED BY THE ASSESSEE THAT THE LOAN WAS SANCTIONED FOR THE P URPOSE OF WORKING CAPITAL AND PURCHASE OF FIXED ASSETS. WE HOLD THAT THE ASSESSEE HAS GOT SUFFICIENT OWN FUNDS TO M AKE THE INVESTMENTS AND WHEN THAT POINT IS NOT IN DISPU TE, NO DISALLOWANCE COULD BE MADE U/S 14A OF THE ACT READ WITH RULE 8D(2)(II) OF THE RULES. RELIANCE IN THIS REGAR D IS PLACED ON THE FOLLOWING DECISIONS:- CIT-VS.- RELIANCE UTILITIES & POWER LTD. REPORTED I N 313 ITR 340 (BOM.) INTEREST ON BORROWED CAPITAL- INVESTMENTS BY ASSESSEE- FINDING THAT INVESTMENTS WERE FROM INTERE ST FREE FUNDS AVAILABLE WITH ASSESSEE-BORROWED CAPITAL FOR THE PURPOSES OF BUSINESS-INTEREST DEDUCTIBLE UNDER INCO ME TAX ACT U/S 36(1)(III). G.D. METSTEEL PVT. LTD. VS.- ACIT REPORTED IN 142 TTJ 641 (MUMBAI TRIBUNAL) HELD THAT THE INVESTMENTS ARE MADE BY THE ASSESSEES OWN FUNDS AND HAVE BEEN MADE IN THE EARL IER YEARS, NO DISALLOWANCE U/S 14A IS REQUIRED TO BE MA DE. THE HEAD NOTE READS AS UNDER:- BUSINESS EXPENDITURE-DISALLOWANCE UNDER SECTION 14A-APPORTIONMENT OF EXPENDITURE- WHEN INVESTMENTS ARE MADE FROM OWN FUNDS, MERELY BECAUSE THE ASSESSEE HAD TO SUBSEQUENTLY BORROW THE FUNDS FOR BUSINESS USE, IT CANNOT BE SAID THAT THE BORROWED FUNDS HAVE BEEN USED FOR THE PURPOSES OF INVESTMENTS . CIT VS.- HDFC BANK LTD REPORTED IN 366 ITR 505 (BO M.) HELD, DISMISSING THE APPEAL, (I) THAT THE FINDING O F FACT GIVEN BY THE TRIBUNAL WAS THAT THE ASSESSEES OWN F UNDS AND OTHER NON-INTEREST BEARING FUNDS WERE MORE THAN THE INVESTMENT IN THE TAX-FREE SECURITIES. THIS FACTUAL POSITION WAS NOT ONE THAT WAS DISPUTED. UNDISPUTEDLY, THE ASSESSEES CAPITAL, PROFIT RESERVES, SURPLUS AND CU RRENT ACCOUNT DEPOSITS WERE HIGHER THAN THE INVESTMENT IN THE TAX FREE SECURITIES. IN VIEW OF THIS FACTUAL POSITI ON, IT WOULD HAVE TO BE PRESUMED THAT THE INVESTMENT MADE BY THE ASSESSEE WOULD BE OUT OF THE INTEREST FREE FUNDS AV AILABLE WITH THE ASSESSEE. 6.1. SIMILAR VIEWS WERE EXPRESSED IN THE FOLLOWING DECISIONS:- ITA NO.2009-2010/KOL/2014 A.YS. 2010-11 & 201 -12 DCIT CIR-4 KOL. VS. M/S JAY SHREE TEA & INDS. LTD . PAGE 5 WOOLCOMBERS OF INDIA LTD. VS.- CIT REPORTED IN 134 ITR 219 (CAL.) EAST INDIA PHARMACEUTICALS WORKS LTD. VS.- CIT REP ORTED IN (1997) 224 ITR 627 (SC). 6.2. WE FIND THAT THOUGH THE DECISION IN THE CASE O F RELIANCE UTILITIES POWER LTD. WAS RENDERED IN THE C ONTEXT OF ALLOWABILITY OF INTEREST U/S 36(1)(III) OF THE A CT, THE ANALOGY DRAWN THEREON WOULD APPLY WITH EQUAL FORCE FOR ADJUDICATING THE ISSUE OF DISALLOWANCE U/S 14A OF T HE ACT. WE ALSO FIND THAT THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS.- HDFC BANK LTD. REPORTED IN 366 IT R 505 (BOM.) HAD ALSO HELD THE SAME VIEW. 7. IN VIEW OF THE AFORESAID FACTS AND FINDINGS AND RESPECTFULLY FOLLOWING THE JUDICIAL PRECEDENTS RELI ED UPON HEREINABOVE, WE HOLD THAT THE LD. CIT(A) HAD RIGHTL Y DELETED THE DISALLOWANCE U/S 14A OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE TO THE TUNE OF RS.92,89,825/-. ACCORDINGLY, THE GROUND NO. 1 RAISE D BY THE REVENUE IS DISMISSED. AS THE ISSUE INVOLVED IN THE YEAR UNDER CONSIDERATI ON AS WELL AS ALL THE MATERIAL FACTS RELEVANT THERETO ARE SIMILAR TO THAT OF A.Y. 2008-09, WE RESPECTFULLY FOLLOW THE DECISION OF THE COORDINATE BENCH RENDERED IN A.Y. 2008-09 AND UPHOLD THE IMPUG NED ORDER OF THE LD. CIT(APPEALS) DELETING THE DISALLOWANCE M ADE BY THE ASSESSING OFFICER ON ACCOUNT OF PROPORTIONATE INTER EST UNDER RULE 8D(2)(II). GROUND NO. 1 OF THE REVENUES APPEAL IS ACCORDINGLY DISMISSED. RESPECTFULLY FOLLOWING THE DECISION OF CO-ORDINATE BENCH IN ASSESSEES OWN CASE (SUPRA) AS THERE WAS NO CHANGE IN THE FACTS OF THE CASE. WE UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A). HENCE, AO IS DIRE CTED ACCORDINGLY. THIS GROUND OF REVENUES APPEAL IS DISMISSED. 8. NEXT ISSUE RAISED BY REVENUE IN THIS APPEAL IS T HAT LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE AO FOR 1,77,41,778/- ON ACCOUNT OF CESS PAID ON GREEN TEA LEAF. 9. AT THE OUTSET, WE FIND THAT SIMILAR ISSUE IS DEC IDED BY THIS CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.684/KOL/2012 FOR A.Y. 2008-09 DATED 08.02.2013 WHEREIN THE NECESSARY OBSERVATION IN RESPECT OF THE ISSUE INVOLVED AS UNDER:- ITA NO.2009-2010/KOL/2014 A.YS. 2010-11 & 201 -12 DCIT CIR-4 KOL. VS. M/S JAY SHREE TEA & INDS. LTD . PAGE 6 4. LD. CIT (DR) STATED THAT THIS ISSUE IS COVERED I N FAVOUR OF THE ASSESSEE IN ASSESSEES OWN CASE IN ITA NO.2248/K/2010 FOR AY 20 06-07 FOLLOWING THE JUDGMENT OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF AFT INDUSTRIES LTD. VS. CIT (2004) 270 ITR 167 BUT HE PLACED RELIANCE ON ASSES SMENT ORDER. WE FIND THAT THE ISSUE IS AS REGARDS TO DISALLOWANCE O F CESS ON GREEN TEA LEAF. WE FIND THAT THE IDENTICAL ISSUE IS COVERED BY THE JUD GMENT HON'BLE CALCUTTA HIGH COURT IN THE CASE OF AFT INDUSTRIES LTD . (SUPRA) AND ALSO WE HAVE A COORDINATE BENCH DECISION IN ASSESSEES OWN CASE FO R AY 2006-07, WHEREIN SIMILAR DISALLOWANCE WAS DELETED. HENCE, WE DISMISS THIS ISSUE OF REVENUES APPEAL AS A COVERED MATTER. TAKING A CONSISTENT VIEW OF CO-ORDINATE BENCH IN AS SESSEES OWN CASE, WE UPHOLD THE ORDER OF LD. CIT(A) AND THIS GROUND OF R EVENUES APPEAL IS DISMISSED. 10. NEXT ISSUE RAISED BY REVENUE IN THIS APPEAL IS THAT LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE AO FOR 37.50 LAKH ON ACCOUNT OF INTEREST ON STICKY LOAN. 11. AT THE OUTSET, WE FIND THAT SIMILAR ISSUE IS DE CIDED BY THIS CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.684/KOL/2012 FOR A.Y. 2008-09 DATED 08.02.2013 WHEREIN THE NECESSARY OBSERVATION IN RESPECT OF THE ISSUE INVOLVED AS UNDER:- 5. THE SECOND ISSUE IN THIS APPEAL OF REVENUE IS AS REGARDS TO THE ORDER OF CIT(A) DELETING THE DISALLOWANCE ON ACCOUNT OF NOT IONAL INTEREST ON STICKY LOANS. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUN D NO.2: 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , LD. CIT(A) ERRED IN LAW IN DELETING THE DISALLOWANCE OF RS.36,25,000/- ON ACCOUNT OF NOTIONAL INTEREST ON STICKY LOAN NOT ACCOUNTED FOR THOUGH THE AO HAS ADDED IT BACK ON THE BASIS OF NOTE ON ACCOUNT OF 2 4D OF THE ANNUAL REPORT. 6. THE LD. CIT(DR) HAS STATED THAT THIS ISSUE IS AL SO COVERED IN ASSESSEES OWN CASE BY TRIBUNALS DECISION IN ITA NO.2248/K/2010 FOR AY 2006-07 BUT HE PLACED RELIANCE ON ASSESSMENT ORDER. WE HAVE GON E THROUGH THE TRIBUNALS DECISION AS WELL AS THE ORDER OF CIT(A) FOR THIS ASSESSMENT YEAR AND FIND THAT THIS ISSUE IS COVERED IN FAVOUR OF AS SESSEE AND BASED ON THAT THE ADDITION IS DELETED. TAKING A CONSISTENT VIEW, WE C ONFIRM THE ORDER OF CIT(A) ON THIS ISSUE AND REVENUES GROUND OF APPEAL IS DIS MISSED. IN THE BACKGROUND OF THE ABOVE DISCUSSIONS AND PREC EDENT AND RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH IN ASSESSEES OWN CASE ITA NO.2009-2010/KOL/2014 A.YS. 2010-11 & 201 -12 DCIT CIR-4 KOL. VS. M/S JAY SHREE TEA & INDS. LTD . PAGE 7 (SUPRA) WE DO NOT FIND ANY INFIRMITY IN THE ORDER O F LD. CIT(A) AND ACCORDINGLY WE UPHOLD THE SAME. THIS GROUND OF REVENUES APPEAL IS DISMISSED. 12. LAST ISSUE RAISED BY REVENUE IN THIS APPEAL IS THAT LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE AO FOR 59,75,517/- ON ACCOUNT OF EXPENSES RETABLE TO EXEMPT INCOME UNDER THE PROVISI ON OF SEC.115JB OF THE ACT. 13. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDI NGS WHILE DETERMINING THE BOOK PROFIT U/S 115JB OF THE ACT, H AS ADDED THE EXPENSE DISALLOWED U/S 14A R.W.R RULE 8D OF IT RULES UNDER THE PROVISION OF CLAUSE (F) TO EXPLANATION-1 OF SEC. 115JB OF THE ACT. THE AMOU NT DISALLOWED U/S. 14A R.W.S. RULE 8D OF THE IT RULES WAS DETERMINED FOR A SUM OF 59,75,517/-ONLY. THE AO HAS MADE THE ADDITION OF THE SAME AMOUNT WHI LE DETERMINING THE BOOK PROFIT U/S. 115JB OF THE ACT. 14. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A) WHO DELETED THE ADDITION MADE BY AO BY OBSERVING AS UND ER:- 8.1 SIMILAR ADDITION MADE EARLIER IN THE APPELLANT S OWN CASE WAS DELETED BY MY PREDECESSOR VIDE ORDER DATED 23.12.2011 IN APPEA L NO.87/CIT(A)-IV/2010- 11 FOR THE A.Y 2008-09 WHICH WAS FURTHER UPHELD BY THE HON'BLE ITAT, KOLKATA IN ITA NO. 684/KOL/2012. 8.2 RESPECTFULLY FOLLOWING THE ABOVE, THE ADDITION MADE BY AO IN THIS REGARD IS DELETED. THE REVENUE, BEING AGGRIEVED, IS IN APPEAL BEFORE U S ON THE FOLLOWING GROUND:- IV) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.5975517/- MADE IN CO MPUTATION OF INCOME U/S. 115JB OVERLOOKING THE FACT THAT THE SAME WAS MADE I N ACCORDANCE WITH THE PROVISIONS OF IT ACT, 1961. 15. BEFORE US BOTH PARTIES RELIED ON THE ORDER OF A UTHORITIES BELOW AS FAVOURABLE TO THEM. 16. WE HAVE HEARD RIVAL CONTENTIONS OF THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. ISSUE IN THE INSTANT CASE IS WITH REGARD TO THE DISALLOWANCE MADE BY AO UNDER THE PROVISION OF CLAU SE (F) TO EXPLANATION-1 OF ITA NO.2009-2010/KOL/2014 A.YS. 2010-11 & 201 -12 DCIT CIR-4 KOL. VS. M/S JAY SHREE TEA & INDS. LTD . PAGE 8 SEC. 115JB OF THE ACT. THE AO WHILE DETERMINING THE PROFIT UNDER THE NORMAL PROVISION OF THE ACT HAS DISALLOWED THE INTEREST EX PENSES UNDER SEC. 14A R.W.R. 8D(2)(II) OF INCOME TAX RULES 1962. THE AO I N HIS ASSESSMENT ORDER AT THE SAME TIME, WHILE DETERMINING THE PROFIT UNDER T HE PROVISION OF MAT ALSO ADDED THE SAME AMOUNT OF DISALLOWANCE MADE U/S. 14A R.W.S 8D(2)(II) OF IT RULES. IN THIS REGARD, WE FIND THAT VARIOUS COURTS HAS HELD THAT THE DISALLOWANCE MADE UNDER THE NORMAL PROVISION U/S.1 4A OF THE ACT CANNOT BE IMPORTED OR CANNOT BE EQUATED TO THE DISALLOWANCE M ADE U/S. 115JB OF THE ACT. IT IS BECAUSE THE PROVISIONS OF MAT ARE SELF-C ONTAINED CODE AND BEGINS WITH NON-OBSTANTE CLAUSE. THEREFORE IT HAS NO RELAT ION WITH OTHER PROVISION OF THE ACT. INDEED, THE IMPUGNED ISSUE OF ASSESSEE IS COVERED IN ITS FAVOUR IN ASSESSEES OWN ASSESSMENT IN ITA NO.684/KOL/2012 FO R AY 2008-09 DATED 08.02.2013 AND THERE IS NO DISPUTE WITH REGARD TO T HAT. HOWEVER SUBSEQUENT TO THE ITAT ORDER IN THE OWN CASE OF THE ASSESSEE, THE HON'BLE JURISDICTIONAL 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 HAS HEL D THAT THE DISALLOWANCE IN RELATION TO EXEMPTED INCOME NEEDS TO BE MADE AS PER THE CLAUSE (F) TO EXPLANATION-1 OF SEC. 115JB OF THE ACT INDEPENDENTL Y. THE RELEVANT EXTRACT OF THE JUDGMENT IS REPRODUCED BELOW:- WE FIND COMPUTATION OF THE AMOUNT OF EXPENDITURE R ELATABLE TO EXEMPTED INCOME OF THE ASSESSEE MUST BE MADE SINCE THE ASSES SEE HAS NOT CLAIMED SUCH EXPENDITURE TO BE NIL. SUCH COMPUTATION MUST B E 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 LEARN ED TRIBUNAL. WE ACCEPT THE SUBMISSION OF MR. KHAITAN, LEARNED SE NIOR ADVOCATE THAT THE PROVISION OF SECTION 115JB IN THE MATTER OF COMPUTA TION IS A COMPLETE CODE IN ITSELF AND RESORT NEED NOT AND CANNOT BE MADE TO SE CTION 14A OF THE ACT. THEREFORE, THE ARGUMENT PLACED BY LD. AR FOR THE AS SESSEE THAT THE INSTANT ISSUE IS ALREADY COVERED IN FAVOUR OF ASSESSEE DOES NOT HOLD GOOD. INDEED THE DISALLOWANCES MADE UNDER THE PROVISIONS OF SEC. 14A R.W.S 8D OF THE IT RULES, CANNOT BE APPLIED TO THE PROVISION OF SEC. 1 15JB OF THE ACT AS PER THE DIRECTION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. JAYSHREE TEA INDUSTRIES LTD. (SUPRA). THEREFORE, THE AO SHALL WORK OUT THE ITA NO.2009-2010/KOL/2014 A.YS. 2010-11 & 201 -12 DCIT CIR-4 KOL. VS. M/S JAY SHREE TEA & INDS. LTD . PAGE 9 DISALLOWANCES IN TERMS OF THE CLAUSE (F) TO EXPLANA TION-1 OF SEC. 115JB OF THE ACT INDEPENDENTLY AFTER CONSIDERING THE EXPENSES DE BITED IN THE PROFIT & LOSS ACCOUNT AS MANDATED UNDER THE PROVISIONS OF LAW. TH US THIS GROUND OF APPEAL OF THE REVENUE IS PARTLY ALLOWED. 17. IN THE RESULT, REVENUES APPEAL IS PARTLY ALLOW ED. COMING TO REVENUES APPEAL IN ITA NO.2010/KOL/2014 FOR A.Y. 11-12 . 18. AS STATED EARLIER, THE ISSUES IN THIS YEAR IS S AME AS THAT OF THE LAST YEAR (2010-11). THE ONLY DIFFERENCE IS OF THE AMOUNT INV OLVED. SINCE THE FACTS ARE EXACTLY IDENTICAL, BOTH PARTIES ARE AGREED WHATEVER VIEW WILL BE TAKEN IN THE ABOVE APPEAL IN ITA NO.2009/KOL/2014 OF REVENUE MAY BE APPLIED IN THIS APPEAL OF REVENUE ALSO, WE HOLD ACCORDINGLY. 19. IN THE RESULT, REVENUES APPEAL IS PARTLY ALLOW ED. 20. IN COMBINE RESULT, BOTH THE APPEALS OF REVENUE STAN D PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 02 /06/2017 SD/- SD/- (#$) () (N.V.VASUDEVAN) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP, SR.P.S &'(- 02 / 06 /201 7 / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-M/S JAY SHREE TEA & INDUSTRIES LTD. 10, C AMAC STREET, INDUSTRY HOUSE, 15 TH FLOOR, KOLKATA-17 2. /REVENUE-DCIT, CIRCLE-4, P-7, CHOWRINGHEE SQUARE, K OLKATA-69 3.'0'12 3 / CONCERNED CIT KOLKATA 4. 3- / CIT (A) KOLKATA 5.6 78$$12, 12!, / DR, ITAT, KOLKATA 6.8;<=> / GUARD FILE. BY ORDER/ , /TR UE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO 12!,