ACIT, New Delhi V. Sh. Rajan Berry, New Delhi

ITA 2012/DEL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6483 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 04-10-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 04-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: F R MEENA
• Keywords: Earning of tax free income; Corroborative evidences; Assessment record
• Section: 14A; 133(6); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SMT. BEENA PILLAI , JM ITA NO. 2012/DEL/2014 : ASSTT. YEAR : 2010 - 11 ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE - 27( 1), NEW DELHI VS SH. RAJAN BERRY, B - 67, NARAINA INDL. AREA, PHASE - 2, NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. A A IPB0802B ASSESSEE BY : SH. RAHUL KHARE , ADV. REVENUE BY : SH. F. R. MEENA , SR. DR DATE OF HE ARING : 04.10 .201 6 DATE OF PRONOUNCEMENT : 16 . 12 .201 6 ORDER PER N. K. SAINI, AM: THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORDER DATED 02.01.2014 OF LD. CIT(A) - XXIV , NEW DELHI . 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN LAW CIT(A) HAS ERRED IN: - 1. DELETING THE DISALLOWANCE/ADDITION OF RS.46,64,671/ - WITHOUT CONSIDERING THE FACTS THAT THE ASSESSEE FAILED TO PRODUCE ANY CONFIRMATION FROM THE PARTIES. 2. RESTRICTING THE DISALLOWANCE FROM RS.5,10,159/ - TO RS.1,62,500/ - MADE U/S 14A READ WITH RULE 8D. ITA NO. 201 2 /DEL /201 4 RAJAN BERRY 2 3. THE APPELLANT CRAVES THE RIGHT TO ADD, ALTER OR AMEND ANY OTHER GROUNDS OF APPEAL. 3. VIDE GROUND NO. 1, THE GRIEVANCE OF THE ASSESSEE RELATES TO THE DELETION OF ADD ITION OF RS.46,64,671/ - . 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 29.09.2010 DECLARING AN INCOME OF RS.45,81,873/ - WHICH WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). LA TER ON, THE CASE WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO ASKED THE ASSESSEE TO PRODUCE CONFIRMATIONS OF SUNDRY CREDITORS AND DETAILS OF THE PURCHASES. THE AO ALSO ISSUED NOTICES U/S 133(6) OF THE ACT TO VARIOUS PARTIE S FOR VERIFICATION. HOWEVER, THE NOTICES ISSUED TO M/S S.K. ENTERPRISES, M/S FAB INDIA AND M/S AARTI FABS RETURNED BACK WITH THE POSTAL REMARK NO SUCH PERSON AND NO REPLY WAS RECEIVED FROM THOSE PARTIES. THE ASSESSEE FURNISHED NEW ADDRESS ES OF THE PARTIE S AND THE AO AGAIN ISSUED SUMMONS U/S 131 OF THE ACT FOR PERSONAL EXAMINATION WHICH AGAIN CAME BACK AND NO ONE ATTENDED. THE AO WAS OF THE VIEW THAT THE IDENTITY AND GENUINENESS FOR THE PAYMENTS AND CREDIT BALANCE S OF THOSE PARTIES WERE NOT ESTABLISHED. HE , THEREFORE, MADE THE ADDITION AS PER FOLLOWING DETAILS: ITA NO. 201 2 /DEL /201 4 RAJAN BERRY 3 S. NO. NAME OF THE PARTY AMOUNT OF PURCHASE/ BALANCE (RS) 1 M/S S.K. ENTERPRISES 9,23,567 2 M/S FAB INDIA 20,90,293 3 M/S AARTI FABS 16,50,811 TOTAL 46,64,671 5. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE IMPUGNED ADDITION WAS MADE ON ACCOUNT OF NON - APPEARANCE OF THE PARTY WHICH ARE STATIONED IN PANIPAT, HARYANA. IT WAS FURTHER STATED THAT THOSE PARTIES WERE VERY OLD SUPPLIER AND PURCHASES WERE MA DE THROUGH THEM BY THE ASSESSEE FOR MORE THAN 10 YEARS, C OMPLETE DETAILS INCLUDING THEIR BILLS, CHEQUES ISSUED TO THEM ALONGWITH PHOTO COPY OF BANK STATEMENT SHOWING ENCASHMENT OF CHEQUES WERE FILED. IT WAS ALSO STATED THAT THE PARTIES CONFIRMED THAT NO SU MMONS WERE SERVED ON THEM AND IF ANY INFERENCE WAS TO BE DRAWN THEN THE AO SHOULD HAVE SHOW N PROOF OF NON DELIVERY AND IF THE AO HAD ANY DOUBT HE SHOULD HAVE ISSUED LETTE R TO THE LOCAL INCOME TAX OFFICER FOR VERIFICATION AS HE HAD ENOUGH TIME BUT THE AO FO R THE REASON BEST KNOWN TO HIM, HE CHOSE TO MAKE THE ADDITION. THE ASSESSEE FURNISHED A LETTER DATED 15.03.2013 TO THE LD. CIT(A) WHICH READ AS UNDER: THIS IS TO BRING TO YOUR KIND NOTICE THAT ASSESSMENT IS IN PROGRESS IN THE CASE OF CAPTIONED ASSESSEE FOR A.Y 2010 - 11 BEFORE ACIT CIRCLE 27(1), NEW DELHI. THAT THE CONSTRUCTIVE HEARING WAS STARTED IN ITA NO. 201 2 /DEL /201 4 RAJAN BERRY 4 AUGUST,2012 WHICH IS STILL CONTINUING AS ON DATE, THAT TILL TODAY , THROUGH VARIOUS LETTERS ( DATED 24/08/2012,20/10/2012,10/11/2012,20/11/2012 ,28/12/ 2012,16/ 01/2013,31/01/2013,31/01/2013,08/02/2013 AND 27/02/2 013), DETAILS RUNNING INTO 739 ANNEXURE WERE FILED, BOOKS OF ACCOUNTS WERE PRODUCED AND VOUCHERS WERE PRESENTED ON TEST CHECK BASIS. THE ACIT (THE REASONS BEST KNOW TO HIM) HAD STARTED ISSUING SUMMONS NO T ONLY TO SUPPLIERS BUT ALSO TO OUR OLD EMPLOYEES (TO WHOM , DUE TO HEAVY RECESSION IN THE INTERNATIONAL MARKET, SERVICES WERE TERMINATED, PAYMENTS INCLUDING G RATUITY PAID) . IN THE CASES WHERE THE REPLY WERE SENT BY THE SUPPLIERS, SUMMONS WERE AGA IN SEND FO R PERSONAL APPEARANCE . THROUGH THIS LETTER, UNDERSIGNED WOULD LIKE TO BRING TO YOUR KIND NOTICE TH AT THE ACIT BE TOLD TO LET US KNOW IN WRITING WHAT CLARIFICATION HE WANTS WHICH WE HAD NOT GIVEN. AS A MATTER OF PRECEDENT, SUMMONS ARE ONLY ISSUED IF THE AS SESSEE IS UNAB LE TO GIVE PROPER CLARIFICATION . IN OUR CASE AT NO POINT OF TIME WE HAD WITHHOLD THE INFORMATION, IN FACT ALL DOCUMENTS AND DETAILS, AS REQUIRED, WERE FILED RUNNING INTO 739 ANNEXURE AND IF THE A CIT IS NOT CONVINCED, AT LEAST HE SHOULD ISSUE A LETTER IN WRITING ASKING FOR A PARTICULAR CLARIFICATION INSTEAD OF TAKING SUCH ACTION WHICH IS RESULTING INTO UNNECESSARY HARASSMENT TO THE ASSESSEE. THROUGH THIS LETTER, WE REQUEST YOUR GOOD SELF TO KINDLY CALL FOR THE ASSESSMENT RECORDS FROM WHICH YO UR GOODSEIF WILL OBSERVE THAT HOW THE ASSESSMENT PROCEEDINGS ARE CONDUCTED FOR WHICH UNDERSIGNED IS EXTREMELY GRATEFUL. ITA NO. 201 2 /DEL /201 4 RAJAN BERRY 5 6. THE ASSESSEE FURTHER STATED BEFORE THE LD. CIT(A) THAT COMPLETE CONFIRMED COPY OF ACCOUNT S WERE FILED WITH SUPPORTING EVIDENCES INC LUDING PROOF OF PAYMENT, COPIES OF BANK STATEMENT ETC. VIDE LETTER DATED 18.03.2013. HOWEVER, THE AO WHILE MAKING THE DISALLOWANCE HAD MADE AN ASSERTION THAT ASSESSEE WAS NOT ABLE TO ESTABLISH THE GENUINENESS OF THE PARTY NOR FILED ANY SATISFACTORY EXPLANA TION HENCE THOSE ENTITIES WERE IN THE NATURE OF PAPER ENTITIES WITHOUT DOING ANY BUSINESS, IN SPITE OF THE FACT THAT THE COMPLETE DETAILS WERE FILED. IT WAS FURTHER SUBMITTED THAT AS THE PARTIES WERE OUT OF STATION , IT WAS OBLIGATORY TO APPOINT LOCAL INCOM E TAX AUTHORITY TO VERIFY THE CLAIM AND RECORD THE STATEMENT BUT IN THIS CASE, THE AO DECIDED TO MAKE THE ADDITION FOR THE REASON BEST KNOWN TO HIM. THE ASSESSEE INFORMED THAT HE WAS DOING BUSINESS WITH THE SAID PARTIES FOR THE LAST 10 YEARS AND FURNISHED COPIES OF ACCOUNT FOR THE LAST 3 YEARS AND COPY OF THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2009 - 10 TO SUBSTANTIATE HIS CLAIM AND STATED THAT IN EARLIER YEARS ALL THE FACTS AND FIGURES WERE ACCEPTED BY THE DEPARTMENT IN THE SCRUTINY ASSESSMENT. 7. TH E LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE ASSESSEE VIDE LETTER DATED 10.10.2012 FURNISHED COPIES OF ACCOUNT DULY CONFIRMED BY THE CREDITOR S BEFORE THE AO IN THE SAID CONFIRMATION OF ACCOUNTS ITA NO. 201 2 /DEL /201 4 RAJAN BERRY 6 THOSE CREDITORS HAD CONFIR MED THE SALE MADE TO THE ASSESSEE DURING THE RELEVANT ASSESSMENT YEAR AND THE PAYMENT RECEIVED THROUGH BANKING CHANNELS, THEY HAD ALSO GIVEN THE DETAILS OF THEIR PAN NUMBER. HE FURTHER OBSERVED THAT THE ASSESSEE HAD REGULARLY PURCHASED MATERIAL FROM THOSE PARTIES AND THE PURCHASES HAD BEEN ACCEPTED BY THE AO IN THE EARLIER YEARS. HOWEVER, IN THE YEAR UNDER CONSIDERATION THE AO HAD ISSUED SUMMONS WHICH COULD NOT BE SERVED AND MERELY DUE TO NON - SERVICE OF SUMMONS, THE AO DISALLOWED THE ENTIRE PURCHASES MADE F ROM M/S AARTI FABS, M/S FAB INDIA AND M/S S.K. ENTERPRISES. THE LD. CIT(A) POINTED OUT THAT THE SUMMONS WERE RECEIVED BACK BY THE AO ON 07.03.2013 BUT WITHOUT CONFRONTING THE ASSESSEE AND CONSIDERING THE OTHER MATERIAL AVAILABLE ON RECORD SUCH AS THE PAST PURCHASES, PAYMENTS THROUGH BANKING CHANNELS ETC., THE AO HAD MADE THE DISALLOWANCE. THE LD. CIT(A) OPINED THAT MERELY BECAUSE OF THE NON - SERVICE OF SUMMONS, THE ENTIRE PURCHASE COULD NOT HAVE BEEN DISALLOWED BY IGNORING THE OTHER EVIDENCES ON RECORD. ACCO RDINGLY, ADDITION MADE BY THE AO WAS DELETED. 8. NOW THE DEPARTMENT IS IN APPEAL. THE LD. DR STRONGLY SUPPORTED THE ORDER OF THE AO AND FURTHER SUBMITTED THAT SINCE THE PARTIES WERE NOT PRODUCED BY THE ASSESSEE FOR CONFIRMATION OF THE OUTSTANDING BALANCE S AND THE SUMMONS ISSUED TO THOSE ITA NO. 201 2 /DEL /201 4 RAJAN BERRY 7 PARTIES WERE RETURNED. THEREFORE, THE AO HAD NO OPTION EXCEPT TO MAKE THE ADDITION AND THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE SAME . 9. IN HIS RIVAL SUBMISSIONS THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBM ISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE AO ACCEPTED THE PURCHASE OF GOODS FROM THOSE PARTIES AND DID NOT CONFRONT THE ASSESSEE WITH THE UNDELIVERED SUMMONS OR LETTERS AND WHEN THE PURCHASES WERE ACCEPTED AND PAYMENTS WERE T HROUGH BANKING CHANNELS , T HE ADDITIONS MADE BY THE AO WAS NOT JUSTIFIED AND THE LD. CIT(A) RIGHTLY DELETED THE SAME. 10 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT APPEARS THAT THE AO MADE THE ADDITION FOR THE REASONS THAT THE SUMMONS ISSUED TO THE PARTIES RETURNED BACK , ON THE OTHER HAND, THE CLAIM OF THE ASSESSEE WAS THAT NO SUCH SUMMONS WERE ISSUED TO THOSE PARTIES WHO ARE STATIONED AT PANIPAT, HARYANA A ND THAT THE CONFIRMATION S FROM THOSE PARTIES WERE FURNISHED BEFORE THE AO ALONGWITH THEIR PAN NUMBER. IN THE PRESENT CASE, THE AO DID NOT MAKE ANY EFFORTS THROUGH THE LOCAL AO IN WHOSE JURISDICTION THOSE PARTIES WERE ASSESSED AND DID NOT CONFRONT UNDELIVER ED ITA NO. 201 2 /DEL /201 4 RAJAN BERRY 8 SUMMONS/LETTERS TO THE ASSESSEE. HE DID NOT DOUBT THE PURCHASE MADE FROM THOSE PARTIES WHICH WERE DULY ACCOUNTED FOR. THEREFORE, THE ADDITION MADE BY THE AO ON ACCOUNT OF OUTSTANDING BALANCE AGAINST THE ACCEPTED PURCHASES WAS NOT JUSTIFIED AND THE LD. C IT(A) RIGHTLY DELETED THE SAME. WE DO NOT SEE ANY VALID GROUND TO INTERFERE WITH THE IMPUGNED ORDER PASSED BY THE LD. CIT(A). 11. THE NEXT ISSUE VIDE GROUND NO. 2 RELATES TO THE RESTRICTING THE DISALLOWANCE TO RS.1,62,500/ - FROM RS.5,10,159/ - MADE BY THE AO U/S 14A OF THE ACT R.W. RULE 8D OF THE INCOME TAX RULES, 1962. 12. THE FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT THE ASSESSEE HAD MADE INVESTMENT IN SHARES/MUTUAL FUNDS AMOUNTING TO RS .2,50,00,000/ - . HE ASKED THE ASSESSEE TO EXPLAIN AS TO WHY DISALLOWANCE U/S 14A OF THE ACT R.W. RULES 8D OF THE INCOME TAX RULES, 1962 SHOULD NOT BE MADE AS THE ASSESSEE HAD CLAIMED EXPENDITURE ON ACCOUNT OF INTEREST PAID AND INCOME WAS NOT BECOMING PART O F TOTAL INCOME OF THE ASSESSEE. IN RESPONSE, THE ASSESSEE FURNISHED THE CALCULATIONS FOR DISALLOWANCE OF RS.1,62,500/ - . HOWEVER, THE AO RE - WORKED THE DISALLOWANCE AT RS.5,10,159/ - AS UNDER: ITA NO. 201 2 /DEL /201 4 RAJAN BERRY 9 (A) INTEREST CLAIMED RS.8,53,989/ - (B) AVERAGE VALUE OF INVESTMENT IN SHARES /MUTU AL FUNDS RS.3,25,00,000/ - (C) AVERAGE OF BALANCE SHEET RS. 7,98,32,932/ - DISALLOWANCE = INVESTMENT_X INTEREST AVERAGE OF BALANCE SHEET 3,25,00,000 X 8,53,989 3,47,659/ - 7,98,32,932 ADD AS PER RULE 8D @ 0.5% ON RS.3,25,00,000/ - = 1,62,500/ - TOTAL RS.5,10,159/ - ACCORDINGLY, ADDITION OF RS.5,10,159/ - WAS MADE. 13. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE AO MADE THE IMPUGNED DISALLOWANCE WITHOUT BRINING ANY COGENT MATERIAL ON RECORD IN AN ARBITRARY MANNER. THE ASSESSEE ALSO FURNISHED CALCULATIONS FOR DISALLOWANCE UNDER RULE 8D OF THE INCOME TAX RULES, 1962 AND COPY OF THE AUDITED BALANCE SHEET. 14. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE RESTRICTED THE DISALLOW ANCE TO RS.1,62,500/ - BY OBSERVING AS UNDER: NOW ADVERTING TO THE CASE OF THE APPELLANT COMPANY, IT IS SEEN THAT THE APPELLANT IN HIS BALANCE SHEET HAS SHOWN TOTAL INVESTMENT OF RS 7,16,31,104.39 AS ON 31.03.2010. THESE INVESTMENTS HAS BEEN MADE IN FDR'S OF CANARA BANK, FIXED DEPOSIT PLANS OF DWS MIP FUND, ICICI PRUDENTIAL AND KOTAK MAHINDRA FUND, IN THE IMMEDIATELY PRECEDING YEAR I.E. ASSESSMENT YEAR 2009 - 10, THE INVESTMENT WAS SHOWN AT ITA NO. 201 2 /DEL /201 4 RAJAN BERRY 10 RS. 6,70,83,594.27 . ON COMPARING THE INVESTMENTS AS ON 31.03.2009 AND AS ON 31.03.2010, IT IS NOTED THAT DURING THE RELEVANT ASSESSMENT YEAR IN QUESTION, THE INVE STMENT HAS INCREASED BY RS. 45,47, 510/ - . HENCE, THE FINDING OF THE AO THAT THE APPELLANT HAS MADE INVESTMENT IN THE RELEVANT ASSESSMENT YEAR 2010 - 11 OF RS 2,50,00, 000/ - IS FACTUALLY INCORRECT. IT IS FURTHER NOTED THAT ALL THE INVESTMENTS HAS BEEN MADE BY THE APPELLANT FROM HIS OWN FUNDS AND NO BORROWED FUNDS WERE UTILIZED BY THE APPELLANT FOR INVESTMENT PURPOSES. THE INTEREST EXPENDITURE DEBITED IN THE PROFIT AND LO SS A/C HAS BEEN WHOLLY AND EXCLUSIVELY UTILIZED BY THE APPELLANT FOR HIS BUSINESS PURPOSES AND IT HAS NO NEXUS WITH THE INVESTMENTS MADE BY THE APPELLANT. HENCE, NO PART OF INTEREST EXPENDITURE CAN BE ATTRIBUTED FOR THE PURPOSES OF DISALLOWANCE U/S 14A REA D WITH RULE 8D OF THE IT RULES. NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER TO SHOW THAT THE INTEREST EXPENDITURE WAS INCURRED FOR THE PURPOSES OF INVESTMENTS. FURTHER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE APPELLANT HAD CLAI MED BEFORE THE ASSESSING OFFICER OF INCURRING EXPENDITURE OF RS. 1,62,500/ - FOR THE PURPOSES OF EARNING EXEMPT INCOME, NO MATERIAL HAS BEEN BROUGHT ON THE RECORD BY THE ASSESSING OFFICER TO SHOW THAT THE AFORESAID CLAIM OF EXPENDITURE (TO BE DISALLOWED SUO MOTO BY THE APPELLANT) WAS EITHER WRONG OR INADEQUATE. THE ASSESSING OFFICER HAS NOT ASSIGN ANY REASON IN HIS ORDER ABOUT THE INCORRECTNESS OF THE CLAIM OF APPELLANT REGARDING THE COMPUTATION OF DISALLOWANCE U/S 14A OF THE IT ACT. THEREFORE, THE AFORESAID ADDITION OF RS 5,10,159/ - MADE BY THE ASSESSING OFFICER CANNOT BE SUSTAINED AND DIRECTED TO BE RESTRICTED TO RS. 1,62,500/ - ONLY WHICH CAN ITA NO. 201 2 /DEL /201 4 RAJAN BERRY 11 REASONABLY BE ATTRIBUTABLE AS EXPENDITURE INCURRED FOR THE PURPOSES OF EARNING EXEMPT INCOME. 15. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: MAXOPP INVESTMENT LTD. VS CIT (2012) 347 ITR 272 (DEL.) CIT VS HERO CYCLES LTD. (2010) 323 ITR 518 (P & H) ACIT VS SIL INVESTMENT LTD. (2012) 54 SOT 54 (DEL.) JUSTICE SAM P BARUCHA VS ACIT IN ITA NO. 3889/MUM/2011 DATED 25.07.2012 ACIT VS EICHER LTD. (2006) 101 TTJ 369 (DEL.) 16. NOW THE DEPARTMENT IS IN APPEAL. THE LD. DR STRONGLY SUPPORTED THE ORDER OF THE AO AND REITERATED THE OBSERVATIONS MADE IN THE ASSESSMENT ORDER DATED 22.03.2013. 17. IN HIS RIVAL SUBMISSIONS TH E LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND STRONGLY SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A). IT WAS FURTHER SUBMITTED THAT THE ASSESSEE PAID THE INTEREST FOR THE BUSINESS PURPOSES ON THE L/ C ACCOUNT AND NO INTEREST WAS PAID ON THE FUNDS RAISED TO MAKE THE INVESTMENT. IT WAS FURTHER STATED THAT THE CALCULATIONS MADE BY THE ASSESSEE WAS IN ACCORDANCE WITH SECTION 14A OF THE ACT AND RULE 8D OF THE INCOME TAX RULES, 1962. THEREFORE, THE LD. CIT( A) RIGHTLY DIRECTED THE AO TO MAKE THE DISALLOWANCE OF RS.1,62,500/ - . ITA NO. 201 2 /DEL /201 4 RAJAN BERRY 12 18. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, THE LD. CIT(A) HAD GIVEN A CATEGORICAL F INDING THAT NO MATERIAL WAS BROUGHT ON RECORD BY THE AO TO SHOW THAT THE CLAIM OF EXPENDITURE TO BE DISALLOWED AT RS.1, 62,500/ - WAS EITHER WRONG OR IN ADEQUATE AND THAT THE AO HAD NOT ASSIGNED ANY REASON IN HIS ORDER ABOUT THE INCORRECTNESS OF THE CLAIM OF THE ASSESSEE REGARDING THE COMPUTATION OF DISALLOWANCE U/S 14A OF THE ACT. THE SAID OBSERVATION OF THE LD. CIT(A) WAS NOT REBUTTED. WE, THEREFORE, DO NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A) ON THIS ISSUE . 1 9 . IN THE RESUL T, THE APPEAL OF THE DEPARTMENT IS DISMISSED. ( ORDER PRON O UNCED IN THE COURT ON 16 /12 /2016 ) SD/ - SD/ - ( BEENA PILLAI ) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DAT ED : 16 /12 /2016 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR