Vivimed Labs Ltd., Hyd, Hyderabad V. DCIT, Circle 17(2), Hyderabad, Hyderabad

ITA 212/HYD/2016

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1100 (ITAT-HYDERABAD)
• Duration Of Justice: 4 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 16-11-2020
• Assessment Year: 2011-2012
• Appeal Filed On: 25-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: Y V S T SAI
• Assessee Lawyers: P MURALI MOHANA RAO
• Keywords: Transfer pricing; International transaction; Earning of tax free income; Question of law; Assessment record; Rule 8D; Set aside
• Section: 143(3); 92B; 14A; 115JB; 250; 201; 13; 92CA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING ) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER ITA NO. 212 /HYD/ 2016 ASSESSMENT YEAR: 201 1 - 12 M/S VIVIMED LABS LIMITED 2 ND FLOOR VEERNAG TOWERS HABSIGUDA H YDERABAD 500 0 07 PAN: AA BC13550P VS. DCIT, CIRCLE 17 ( 2 ) HYDERABAD (APPELLANT) (RESPONDENT) A PPELLANT BY: SH. P.MURALI MOHANA RAO , A DV. RESPONDENT BY : S H. YVST SAI, CIT, D.R. DATE OF HEARING: 16 / 11 /2020 DATE OF PRONOUNCEMENT: 17 / 1 2 /2020 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y. 201 1 - 12 AGAINST THE FINAL ASSESSMENT ORDER DATED 29.01.2016 PASSED U/S 143(3) R.W.S. 144C( 13 ) OF THE I.T. ACT, 1961. THIS APPEAL WAS TAKEN UP FOR HEARING ON 16 .11.2020 THROUGH VIDEO CONFERENCING AND BOTH THE PARTIES WERE HEARD. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF SPECIALISED CHEMICALS AND PHARMACEUTICALS. IT FILED ITS RETURN OF INCOME ON 28.09.2011 FOR THE A.Y. 2011 - 12 DECLARING TOTAL INCOME OF RS.18,25,00,634/ - AF TER CLAIMING ITA NO. 212/HYD/2016 AY: 2011 - 12 M/S VIVIMED LABS LTD. VS. DCIT, CIRCLE 17(2) 2 DEDUCTION OF RS.1,34,55,929/ - U/S 80 IC OF THE I.T.ACT, 1961 (THE ACT) IN RESPECT OF ITS UNIT LOCATED AT HARIDWAR. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, THE AO OBSERVED THAT THE ASSESSEE HA S ENTERED INTO INTERNATIONAL TRANSACTIONS WITH ITS ASSOCIATED ENTERPRISE (A.E.) WHICH REQUIRES THE DETERMINATION OF ALP. THEREFORE, THE MATTER WAS REFERRED TO THE TRANSFER PRICING OFFICER (TPO) WHO PASSED THE ORDER U/S 92CA(3) OF THE ACT ON 30.12.2014 PROP OS ING A TOTAL ADJUSTMENT OF RS.4,57,95,675/ - ON ACCOUNT OF (I) INTEREST ON WORKING CAPITAL ADVANCE GIVEN ; AND (II) CORPORATE GUARANTEE FEE RECEIVABLE. ACCORDINGLY , THE DRAFT ASSESSMENT ORDER WAS PROPOSED IN WHICH ALONG WITH THE T.P. ADJUSTMENT , THERE WA S A PROPOSAL FOR DISALLOWANCE OF RS.7,15,634/ - TOWARDS EXPENDITURE RELATING TO EARNING OF EXEMPT INCOME U/S 14A OF THE ACT. AGGRIEVED BY THE DRAFT ASSESSMENT ORDER , THE ASSESSEE PREFERRED ITS OBJECTIONS BEFORE THE DISPUTE RESOLUTION PANEL (DRP) WHO CONFI RMED THE DRAFT ASSESSMENT ORDER AND ACCORDINGLY , FINAL ASSESSMENT ORDER WAS PASSED. 2.1. AGGRIEVED BY THE FINAL ASSESSMENT ORDER , ASSESSEE IS IN APPEAL BEFORE US BY RAISING VARIOUS GROUNDS OF APPEAL. SINCE THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE FOUND TO BE ARGUMENTATIVE, ASSESSEE WAS DIRECTED TO FILE PRECISE GROUNDS OF APPEAL. ACCORDINGLY, THE ASSESSEE HAS FILED FOLLOWIN G PRECISE GROUNDS OF APPEAL : EACH OF THE GROUNDS OF APPEAL IS MUTUALLY EXCLUSIVE OF, INDEPENDENT AND WITHOUT PREJUDICE TO OTHER. BASED ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED ASSESSING OFFICER (AO), LEARNED TRANSFER PRICIN G OFFICER (TPO) AND THE HONOURABLE DISPUTE RESOLUTION PANEL (DRP) - 1. ERRED IN PASSING THE ORDER U /S 143(3) R.W.S 144C(13) DATED 29.01.2016, WHICH IS BEYOND ONE MONTH FROM THE END OF THE MONTH IN WHICH SUCH DRP DIRECTIONS ARE RECEIVED. ITA NO. 212/HYD/2016 AY: 2011 - 12 M/S VIVIMED LABS LTD. VS. DCIT, CIRCLE 17(2) 3 2. THE AO HAS ER RED IN LAW IN MAKING THE REFERENCE TO THE TPO WITHOUT MEETING THE PRECONDITIONS FOR SUCH REFERENCE UNDER SECTION 92CA OF THE LT. ACT, 1961. 3. ERRED IN MAKING THE ADDITION OF RS.3,18,73,275 / - TOWARDS INTEREST ON ADVANCES GIVEN TOWARDS INVESTMENT IN EQUI TY OF AE TO VIVIMED LABS USA INC., AE OF RS.25,20, 00,000/ - AND VIVIMED HOLDING LTD., HONG KONG., OF RS.81,40, 000/ - . 4. ERRED IN MAKING ADDITION OF RS.1,21,82,100 - BY CHARGING CORPORATE GUARANTEE FEES @ 1.75% TOWARDS CORPORATE GUARANTEE PROVIDED IN RESPE CT OF VIVIMED HOLDINGS LTD., HONG KONG OF RS.57,16,10, 000/ - & VIVIMED LABS EUROPE LTD OF RS.12,45,10, 000/ - . 5. OUGHT TO HAVE APPRECIATED THE FACT THAT THE GUARANTEE W AS PROVIDED IN THE NATURE OF PARENTAL OBLIGATION TO ITS S U B S IDIARY FOR WORKING CAPITAL FACILITY AND ASSESSEE HAS NOT INCURRED ANY COST FOR P ROVIDING SUCH GUARANTEE. 6. ERRED IN MAKING THE ADDITION OF RS. 5,66,728 / - U/S 1 4A OF THE ACT WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS NOT EARNED ANY E X EMPTED INCOME FROM THE INVESTMENTS. EACH OF THE GROUNDS OF APPEAL IS MUTUALLY EXCLUSIVE OF, INDEPENDENT AND WITHOUT PREJUDICE TO OTHER. 7. WE WOULD LIKE TO SUBMIT THAT AS PER THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF NATI ONAL THERMAL POWER CO. LTD VS. CIT (1998) 229 ITR 383 (SC) THE ITAT HAS JURISDICTION TO EXAMINE THE QUESTION OF LAW WHICH THOUGH NOT AROSE BEFORE THE LOWER AUTHORITIES BUT AROSE BEFORE THE IT AT FOR THE FIRST TIME. 2.2. IN ADDITION TO THE ABOVE, THE ASSESSEE HAS ALSO RAISED THE FOLLOWING ADDITIONAL GROUNDS OF APPEAL. ITA NO. 212/HYD/2016 AY: 2011 - 12 M/S VIVIMED LABS LTD. VS. DCIT, CIRCLE 17(2) 4 8. ERRED IN ADDING DISALLOWANCE CALCULAT ED U/ S. 14A OF THE ACT OF RS. 5,66,728/ - TO THE BOOK PROFITS CALCULATED U/ S. 115JB OF THE ACT. 9. OUGHT TO HAVE APPRECIATED THE FACT THAT THE COMPUTATION UNDER EXPLANATION 1 TO SECTION 115J B OF THE ACT SHALL BE MADE WITHOUT RESORTING TO DISALLOWANCE AS CONTEMPLATED U/ S. 14A READ WITH RULE 8D OF THE ACT. 10. THE AO ERRED IN NOT ISSUING DRAFT ASSESSMENT ORDER AS PER PROCEDURE LAID DOWN U/S 144C(1) OF THE ACT. 11. THE AO GROSSLY ERRED IN ISSUING NOTICE DEMAND U/ S. 156 OF THE ACT ALONG WITH DRAFT ASSES SMENT ORDER DATED 26.02.2015, THIS TANTAMOUNT TO PASSING OF FINAL ASSESSMENT ORDER. 12. THE ASSESSEE MAY ADD, ALTER OR MODIFY ANY OTHER POINT TO THE GROUNDS OF APPEAL AT ANY TIME BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 2.3. AT THE TIME OF HEARING , THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT GROUND NOS. 1 AND 2 ARE NOT PRESSED BY THE ASSESSEE. 2.4. WITH REGARD TO ADDITIONAL GROUND S OF APPEAL, THE LD.COUNSEL FOR T HE ASSESSEE SUBMITTED THAT THE ASSESSEE IS NOT PRESSING GROUND NOS. 10 AND 11. 2.5. ACCORDINGLY, GROUND NOS. 1 AND 2, AND GROUND NOS. 10 AND 11 ARE DISMISSED AS NOT PRESSED. 3 . WITH REGARD TO THE ADDITIONAL GROUNDS OF APPEAL NOS. 7 TO 9, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THEY ARE LEGAL GROUNDS RELATING TO ISSUES ARISING OUT OF ASSESSMENT ORDER AND PRAYED THAT THEY BE ADMITTED AND ADJUDICATED. 3. 1. LD.DR , ON THE OTHER HAND , OPPOSED THE ADMISSION OF ADDITIONAL GROUNDS. 4 . AFTER HEARING THE RIVAL CONTENTIONS AND MATERIAL PLACED ON RECORD, WE FIND THAT THE AO HAS ADDED THE DISALLOWANCE MADE U/S 14A ALSO TO ITA NO. 212/HYD/2016 AY: 2011 - 12 M/S VIVIMED LABS LTD. VS. DCIT, CIRCLE 17(2) 5 BOOK PROFITS CALCULATED U/S 115 JB OF THE ACT WHICH IS BEING CHALLENGED BY THE ASSESSEE IN THESE ADDITIONAL GROUNDS OF APPEAL. SINCE ALL THE FACTS ARE ON RECORD AND THE ISSUE IS A LEGAL ISSUE, WE ADMIT THE SAME AND PROCEED TO ADJUDICATE THE SAME HERE UNDER : 5. AS REGARDS GROUND NO.3 , THE BRIEF FACTS ARE THAT DURING THE TRANSFER PRICING PROCEEDINGS , IN THE T.P. DOCUMENTATION OF ASSESSEE , THE AO FOUND THAT THE ASSESSEE HAD STATED THAT IT HAD PROVIDED WORKING CAPITAL AD VANCE OF RS. 252.06 MILLION TO VIVIMED HONG KONG AND ALSO OF RS.8.41 MILLIONS TO VIVIMED , US I.E. TOTAL AMOUNT OUTSTANDING WAS RS.26,01,90,000/ - AND IT WAS STATED THAT THE ADVANCE IS FOR ADMINISTRATIVE CONVENIENCE AN D THERE WAS NO INTEREST ACCRUED DURING THE YEAR AND HENCE DETERMINATION OF ALP IS NOT WARRANTED. AO NOTICED THAT ASSESSEE HAD NOT CHARGED INTEREST FROM ITS A.E. THOUGH INTEREST @ 6% WAS CHARGED FROM VIVIMED HONGKONG IN THE EARLIER YEAR, AND AL SO THAT T HERE IS NO INTEREST CHARGED IN THIS YEAR. THEREFORE , HE PROPOSED TO CHARGE INTEREST ON THE OUTSTANDING BALANCES AND THE TAXPAYER WAS ISSUED A LETTER ACCORDINGLY. AFTER CONSIDERING THE ASSESSEES SUBMISSIONS AT LENGTH , THE AO HELD THAT THE INTEREST IS CHAR GEABLE ON THE INTEREST FREE ADVANCES GIVEN BY THE ASSESSEE TO ITS SUBSIDIAR IES TOWARDS WORKING CAPITAL ADVANCES. THUS , HE CHARGED 12.25% ON THE WORKING CAPITAL ADVANCES AS RATE OF INTEREST AND BROUGHT IT TO TAX. 5.1 . FURTHER , HE ALSO TREATED CORPORATE GUARANTEE AS AN INTERNATIONAL TRANSACTION AND PROPOSED ADDITION BY CHARGING CORPORATE CREDIT AT 2% OF THE CORPORATE GUARANTEE GIVEN BY ASSESSEE. IN ACCORDANCE WITH THESE FINDINGS OF THE TPO , THE FINAL ASSESSMENT ORDER WAS PASSED AND THE ASSESSEE HAS FILED SECOND APPEAL BEFORE THE TRIBUNAL. 5. 2 THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THOUGH TPO HAS STATED THAT THESE ARE WORKING CAPITAL ADVANCES GIVEN TO ITS SUBSIDIARIES , THEY ARE NOT ADVANCES BUT ARE THE INVESTMENTS MADE BY ASSESSEE IN THE ITA NO. 212/HYD/2016 AY: 2011 - 12 M/S VIVIMED LABS LTD. VS. DCIT, CIRCLE 17(2) 6 EQUITY OF ITS SUBSIDIARIES AND THE SAID COMPANIES HAVE ALSO SUBSEQUENTLY ALLOTTED SHARES TO THE ASSESSEE. 5. 3 . LD.DR , ON THE OTHER HAND , SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND DREW OUR ATTENTION TO THE PAPER BOOK FILED BY A SSESSEE WHEREIN IN ITS LETTER ADDRESSED TO THE AO, THE ASSESSEE HAD CLEARLY STATED AND THAT IT HAD ADVANCED WORKING CAPITAL TO ITS SISTER CONCERN S. THEREFORE, ACCORDING TO HIM, THE ADVANCES WERE NOT EQUITY AT ALL. HE FURTHER SUBMITTED THAT DOCUMENTS FILED BY ASSESSEE TOWARDS INVESTMENT SUCH AS BOARD RESOLUTION S AND EVIDENCE OF ALLOTMENT OF SHARES TO ASSESSEE WE RE NEVER FILED BEFORE THE AUTHORITIES BELOW NOR DOES THE ASSESSMENT RECORD SHOW THAT THEY WERE ON RECORD. THEREFORE, ACCORDING TO HIM, THESE EVIDENCE S SHOULD NOT BE CONSIDERED AT ALL. 5. 4 . HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL PLACED ON RECORD, WE FIND THAT THE ASSESSEE , NOT ONLY IN ITS T.P. DOCUMENTATION , BUT ALSO IN ITS REPLY TO NOTICE OF THE TPO , HAS CLEARLY STATED THAT THESE ARE WORKING CAPITAL ADVANCES , THOUGH AT PARA 2.5 OF ITS SUBMISSIONS BEFORE THE TPO , ASSESSEE HAD STAT ED THAT IT HAD INVESTED IN ITS SISTER CONCERNS. HOWEVER, NEITHER THE TPO NOR THE DRP HA VE GONE INTO THIS ASPECT, NOR HAS THE ASSESSEE FILED ANY EVIDENCE IN THIS CONTEXT BEFORE THE AUTHORITIES BELOW. THE BOARD RESOLUTION S AND THE EVIDENCE THAT ASSESSEE HA S BEEN ALLOTTED E QUITY SHARES IN THE SUBSEQUENT YEAR WERE NEVER PUT BEFORE THE AUTHORITIES BELOW. IN VIEW OF THESE FACTS, WE DEEM IT FIT AND PROPER TO SET ASIDE THE ISSUE TO THE FILE OF AO/ TPO W IT H A DIRECTION TO CONSIDER THE EVIDENCE FILED BY ASSESSEE TO TH E EFFECT THAT ASSESSEE HAD INVESTED MONEY IN EQUITY SHARES OF ITS SUBSIDIARIES AND HAS NOT GIVEN WORKING CAPITAL ADVANCES AND IF IT IS FOUND THAT THESE TRANSACTIONS WERE IN FACT INVESTMENTS IN EQUITY SHARES OF THE SUBSIDIARIES, THEN NO T.P. ADJUSTMENT SH AL L BE MADE. HOWEVER, IF IT IS FOUND THAT THE FUNDS TRANSFERRED BY THE ASSESSEE TO ITS SUBSIDIARIES DURING THE YEAR WERE WORKING CAPITAL AD VANCES, WHICH WERE LATER DECIDED ITA NO. 212/HYD/2016 AY: 2011 - 12 M/S VIVIMED LABS LTD. VS. DCIT, CIRCLE 17(2) 7 TO BE TREATED AS INVESTMENTS, THEN THE T.P. ADJUSTMENT ALREADY MADE BY THE AO SHALL B E REVIVED AND THE ASSESSMENT SHALL BE COMPLETED ACCORDINGLY. 5. 5 . THEREFORE , ASSESSEES GROUND OF APPEAL NO.3 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 6. AS REGARDS GROUND NO.4 REGARDING CORPORATE GUARANTEE FEE, LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE A.Y. BEFORE US IS 2011 - 12 AND THAT AMENDMENT TO S.92B BRINGING THE CORPORATE GUARANTEE FEE INTO THE AMBIT OF INTERNATIONAL TRANSACTION DOES NOT APPLY TO THE RELEVANT AY. IN SUPPORT OF HIS CONTENTIONS HE SUBMITTED BEFORE US A COPY OF THE ORDER OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE FOR A.Y 2010 - 11 TO WHICH, ONE OF US (J.M) IS A SIGNATORY AND ALSO FURTHER RELIED UPON THE FOLLOWING OTHER DECISIONS: I) M/S. BATRONICS INDIA LTD VSS. DCIT IN ITA NO.259/HYD/2017 II) M/S.CURA TECHNOLOGIES LTD VS. DCIT IN ITA NO.301/HYD/2017 III) M/S.CCL PRODUCTS P LTD VS DCIT IN ITA NO.348/VIZ/2018 IV) ASSESSEES OWN CASE IN ITA NO.404/HYD2015 6.1 . LD.DR ALSO PLACED RELIANCE UP ON THE ORDER OF AUTHORITIES BELOW AND PLACED RELIANCE UPON THE FOLLOWING DECISIONS IN SUPPORT OF HIS CONTENTION THAT EVEN PRIOR TO THE AMENDMENT TO SEC 92B OF THE ACT, THE CORPORATE GUARANT EE WAS A N INTERNATIONAL TRANSACTIONS : I) ITAT HYDERABAD IN THE CASE OF FOUR SOFT (P) LTD VS. DCIT REPORTED IN 44 TAXMANN.COM 479 DATED 28.3.2014 II) PROLIFICS CORPORATION LTD VSS. DCIT REPORTED IN 55 TAXMANN.COM 226 DATED 31.12.2014 6.2 . HAVING GONE THROUGH THE DECISIONS QUOTED BY BOTH THE PARTIES, WE FIND THAT THE A.Y BEFORE US IS 2011 - 12, I.E. PRIOR TO THE AMENDMENT OF SEC 92B OF THE ACT, WHILE IN THE DECISIONS RELIED UPON BY THE DR, IT HAS BEEN HELD THAT EVEN PRIOR TO THE AMENDMENT, THE CORPORATE GUARANTEE IS AN INTERNATIONAL TRANSACTION , IN THE DECISIONS RELIED UPON BY THE LD ITA NO. 212/HYD/2016 AY: 2011 - 12 M/S VIVIMED LABS LTD. VS. DCIT, CIRCLE 17(2) 8 COUNSEL FOR THE ASSESSEE, IT HAS BEEN HELD OTHERWISE. WE FIND THAT IN THE ASS ESSEES OWN CASE FOR THE AY 2010 - 11, THIS TRIBUNAL HAS HELD THE ISSUE IN FAVOUR OF THE ASSESSEE. THEREFORE, FOLLOWING THE PRINCIPLE OF UNIFORMITY AND CONSISTENCY, WE HOLD THAT CORPORATE GUARANTEE IS NOT INTERNATIONAL TRANSACTION PRIOR TO AMENDMENT OF S.92B W.E.F. 1.4.2012. THEREFORE, GROUND S OF APPEAL NO.4 AND 5 ARE ALLOWED. 7. AS REGARDS GROUND NO.6, IT IS CASE OF THE ASSESSEE THAT ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME DU RING RELEVANT A.Y. AND THEREFORE, NO DISALLOWANCE U/S 14A IS CALLED FOR. HE HOWEVER SUBMITTED THAT EVEN IF THERE IS A DISALLOWANCE U/S 14A UNDER NORMAL PROVISIONS OF THE ACT, NO ADDITION SHOULD BE MADE TO THE INCOME U/S 115 JB OF THE ACT. HE PLACED RELIA NCE UPON THE FOLLOWING DECISIONS IN SUPPORT OF HIS CONTENTION. I) SRI ASL FINVEST PVT. LTD VS. ITO IN ITA NO.294/HYD/2018 II) ACIT VS.VIREET INVESTMENT (P) LTD REPORTED IN 82 TAXMANN.COM 415. III)AGILA SPECIALITIES P LTD VS. ACIT IN ITA NO.987/HYD /2018 7.1. LD.DR SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 7.2. HAVING REGARD TO RIVAL CONTENTIONS AND MATERIAL PLACED ON RECORD, WE FIND THAT THE ISSUE OF DISALLOWANCE U/S 14A WHERE THERE IS NO EXEMPT INCOME EARNED DURING THE RELEVANT FINANCIAL YEAR , IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF CIT (CENTRAL)1 VS. CHETTINAD LOGISTICS (P) LTD. (2018) 95 TAXMA N .COM 250 (SC) WH EREIN IT WAS CONFIRMED THAT WHERE THERE IS NO EXEMPT INCOME EARNED BY THE ASSESSEE, NO DISALLOWANCE U/S 14A SHALL BE MADE. 7.3 . FURTHER, WITH REGARD TO COMPUTATION OF INCOME U/S 115 JB OF THE ACT AND ADDI TIO N OF DISALLOWANCE U/S 14A TO THE SAID INCOME , WE FIND THAT THIS ISSUE ALSO IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECI SION OF THE SPECIAL BENCH OF THE ITAT AT DELHI IN THE CASE OF VIREET INVESTMENTS (CITED SUPRA) WHICH HAS BEEN FOLLOWED BY US IN OUR ORDER S ITA NO. 212/HYD/2016 AY: 2011 - 12 M/S VIVIMED LABS LTD. VS. DCIT, CIRCLE 17(2) 9 IN OTHER CASES CITED SUPRA . RESPECTFULLY FOLLOWING THE SAME, WE HOLD THAT NO ADDITION OF THE DISALLOWANCE U/S 14A IS CALLED FOR WHILE COMPUTING THE INCOME U/S 115JB OF THE ACT . ACCORDINGLY, GROUND NOS. 6, 7 AND 8 ARE ALLOWED. 8. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED ON 17 TH DECEMBER , 2020. SD/ - SD/ - ( D.S. SUNDER SINGH ) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 17 TH DECEMBER , 2020. *GMV /PVV COPY TO: 1. M/S. VIVIMED LABS LTD., 2 ND FLOOR, VEERNAG TOWERS, HABSIGUDA, H YDERABAD 500 007 2. DCIT, CIRCLE 17 ( 2 ) , HYDERABAD 3. ACIT, RANGE 17 , HYDERABAD 4. PR. CIT 5 , HYDERABAD 5. THE DR, ITAT HYDERABAD 6 GUARD FILE