CYRUS INVESTMENT P.LTD, MUMBAI V. ACIT 1(1)(1), MUMBAI

ITA 2137/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9054 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 06-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUMAR PADMA
• Assessee Lawyers: BEHARILAL
• Keywords: Business expenditure; Earning of tax free income; Rule 8D
• Section: 143(3); 14A; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI G. MANJUNATHA , HON'BLE ACCOUNTANT MEMBER ITA NO. 2137 /MUM/201 8 (A.Y: 2009 - 10 ) M/S. CYRUS INVESTMENT PVT. LTD., ESPLAN A DE HOUSE HAZARIMAL SOMANI MARG, FORT MUMBAI 400001 PAN: AAACC2880P V. ASST. COMMISSIONER OF INCOME - TAX CIRCLE 1(1)(1) AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400 020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI BEHARILAL DEPARTMENT BY : KUMAR PADMAPANI BORA DATE OF HEARING : 27 .11.2019 DATE OF PRONOUNCEMENT : 10 . 01.2020 O R D E R PER C. N. PRASAD (JM) 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) 2, MUMBAI [HEREINAFTER FOR SHORT LD. CIT(A)] DATED 15.01.2018 FOR THE A.Y. 2009 - 10. 2. WE FIND FROM THE RECORDS THAT IN THE FIRST ROUND OF APPEAL THE TRIBUNAL IN ITA NO. 270 5 /MUM/2013 DATED 19.01.2015 RESTORED THE ISSUE OF DISALLOWANCE MADE U/S. 14A R.W RULE 8D(2)(II) OF I.T. RU LES TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO VERIFY THE CORRECTNESS OF THE CLAIM 2 ITA NO. 2137/MUM/2018 (A.Y: 2009 - 10) M/S. CYRUS INVESTMENT PVT. LTD., OF THE ASSESSEE AS THE ASSESSEE ITSELF MADE SUOMOTO DISALLOWANCE OF .1,16,36,172/ - U/S. 14A OF THE ACT WHILE COMPUTING ITS INCOME . IN THE CONSEQUENTIAL ASSESSMENT MADE BY THE ASSESSING OFFICER U/S. 143(3) R.W.S. 254 OF THE ACT DATED 05.03.2016 THE ASSESSING OFFICER RESTRICTED THE DISALLOWANCE U/S. 14A OF THE ACT TO .37,89,0 19 / - AS AGAINST .60,01,670/ - MADE IN THE O RIGINAL ASSESSMENT, O VER AND ABOVE THE SUOMOTO DISALLOWANCE OF . 1,16,36,172 / - MADE BY THE ASSESSEE . IN THE CONSEQUENTIAL ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ACCEPTED WITHOUT PREJUDICE CLAIM OF THE ASSESSEE THAT IT HAD ALREADY DISALLOWED . 22,1 2 ,6 5 1/ - TOWARDS ADMINISTRATIVE EXPENSES WHILE COMPUTING THE SUOMOTO DISALLOWANCE AND THEREFORE IT SHOULD NOT BE AGAIN DISALLOWED U/S. RULE 8D (2)(III) OF I.T. RULES. THE ASSESSING OFFICER DID NOT POINT OUT IN CLEAR TERMS AS TO WHY THE SUOMOTO DISALLOWANCE OF .1,16,36,175/ - MADE BY THE ASSESSEE IS NOT CORRECT WITH REFERENCE TO THE BOOKS OF ACCOUNTS OF THE ASSESSEE. ASSESSING OFFICER ALL ALONG STATED IN THE ASSESSMENT ORDER THAT ONLY PARTIAL APPLICATION OF RULE 8D HAS BEEN APPLIED BY THE ASSESSEE AND HE HAS NOT POINTED THE INCORRECTNESS OF THE S UOMOTO DISALLOWANCE MADE BY THE ASSESSEE OR AS TO WHY THIS IS NOT ADEQUATE DISALLOWANCE U/S. 14A OF THE ACT TO MEET THE EXPENSES ATTRIBUTABLE FOR EARNING DIVIDEND INCOME. THE LD. CIT(A) SUSTAINED THE SAME. 3 ITA NO. 2137/MUM/2018 (A.Y: 2009 - 10) M/S. CYRUS INVESTMENT PVT. LTD., 3. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE IS NO OBJECTIVE SATISFACTION RECORDED BY THE ASSESSING OFFICER IN INVOKING PROVISIONS OF RULE 8D OF I.T. RULES, EVEN THOUGH THE ASSESSEE ITSELF DISALLOWED SUOMOTO DISALLOWANCE OF . 1,16,36,175/ - . FURTH ER, LD. COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN ITS OWN CASE IN ITA.NO. 6191/MUM/2016 DATED 25.07.2018 FOR THE A.Y. 2011 - 12 WHEREIN A SIMILAR ISSUE HAS COME UP FOR CONSIDERATION AND THE TRIB UNAL FOLLOWING ITS ORDER FOR THE A.Y. 2012 - 13 IN ITA NO. 6414/MUM/2016 RESTRICTED THE DISALLOWANCE U/S. 14A TO THE SUOMOTO DISALLOWANCE MADE BY THE ASSESSEE. 4. LD. DR VEHEMENTLY SUPPORTED THE OR DERS OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL SUBMISSI ONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEE'S OWN CASE. WE FIND THAT, MORE OR LESS AN IDENTICAL ISSUE HAS COME UP BEFORE THE TRIBUNAL IN ASSESSEE'S OWN CASE FOR THE A.Y. 2011 - 12 IN ITA NO. 6191/MUM/2016 DATED 25.07. 2018 AND THE TRIBUNAL RESTRICTED THE DISALLOWANCE U/S. 14A TO THE EXTENT OF SUOMOTO DISALLOWANCE MADE BY THE ASSESSEE OBSERVING AS UNDER: - ' 5. THE C IT(A), AFTER CONSIDERING RELEVANT SUBMISSIONS OF THE ASSESSEE AND ALS O BY FOLLOWING THE DECISION OF ITAT, MUMBAI BENCHES IN THE CASE OF GRAVISS HOSPITALITY LTD IN.LTA 4 ITA NO. 2137/MUM/2018 (A.Y: 2009 - 10) M/S. CYRUS INVESTMENT PVT. LTD., NO.3542/MUM/2013 DELETED ADDITION MADE BY THE AO TOWARDS DISALLOWANCE OF EXPENDITURE DETERMINED IN ACCORDANCE WITH RULE 8D(2) OVER AND ABOVE THE SUO MOTO DISA LLOWANCE MADE BY THE ASSESSEE. THE RELEVANT PORTION OF THE ORDER OF TH E LD.CIT(A) IS EXTRACTED BELOW: - 'DECISION: THE AO HAS ADDED SUM OF RS. 1,56,86,1627 - U/S 14A READ WITH RULE 8D OF THE INCOME - TAX ACT STATING THE REASONS THAT DI SALLOWANCE MADE OF RS.86,57,565/ - IS NOT PROPER. ON THE OTHER HAND, THE AR OF THE APPELLANT ARGUES THAT FOLLOWING EXPENDITURE HAS BEEN DISALLOWED U/S 14A OF THE ACT. I INTEREST RS. 63,82,177/ - II. LEGAL AND PROFESSIONAL E XPENSES RS. 1,19,492/ - III DEMAT CHARG ES RS. 2 ,45,276 IV DIVIDEND COLLECTION CHARGES RS 18,80,620 / - RS. 86,57,565/ - FURTHER, THE AR OF THE APPELLANT RELIES ON THE FOLLOWING JURISDICTIONAL IT AT DECISION IN THE CASE OF DCIT, RANGE 1(1) VS. GRAVISS HOSPITALITY LTD. FOR A.Y.2009 - 10 - DATED 21.11.2014 VIDE 1TA NO. 3542/MUM/2013 WHEREIN IT IS HELD THAT 11. ONCE ALL THESE DETAILS WERE MADE AVAILABLE ALONG WITH THE ENTIRE ACCOUNTS OF THE ASSESSEE, THE A.O. WAS REQUIRED TO RECORD HIS SATISFACTION OR SATIS FIED HIMSELF THAT HAVING REGARD TO THE ACCOUNTS OF THE ASSESSEE, THE CLAIM OF THE ASSESSEE IN RESPECT OF EXPENDITURE DEBITED IS NOT CORRECT AND THERE COULD HAVE BEEN CERTAIN OTHER EXPENDITURES WHICH CAN BE SAID TO HAVE BEEN INCURRED IN RELATION TO THE EARN ING OF EXEMPT INCOME. THE DISALLOWANCE U/S 14A (1) CAN ONLY BE TRIGGERED, ONCE THE CONDITIONS UNDER SUB SECTION (2) ARE SATISFIED. TO WORK OUT THE DISALLOWANCE U/R 8 - D, THE A.O. HAS TO FIRST EXAMINE THE ACCOUNTS OF THE ASSESSEE AND THE CORRECTNESS OF THE C LAIM AND THEN, IF HAVING REGARD TO SUCH ACCOUNTS AND THE CLAIM HE IS NOT SATISFIED WITH EITHER THE CORRECTNESS OF THE CLAIM MADE BY THE ASSESSEE OR MADE A CLAIM THAT NO EXPENDITURE AT ALL HAS BEEN INCURRED FOR THE PURPOSE OF EARNING THE EXEMPT INCOME, THEN ONLY HE CAN RESORT TO RULE 8 - D. IN THE PRESENT CASE, WE FIND THAT THE A.O. HAS STRAIGHTAWAY PROCEEDED TO APPLY RULE 8 - D FOR THE PURPOSE OF DISALLOWANCE U/S 14A WITHOUT SATISFYING OR COMPLYING WITH THE MANDATORY 5 ITA NO. 2137/MUM/2018 (A.Y: 2009 - 10) M/S. CYRUS INVESTMENT PVT. LTD., REQUIREMENT OF SECTION 14A(2) OR RULE 8 - D(1) . ONCE THE A.O. HAS FAILED TO COMPLY THE STATUTORY REQUIREMENT, THEN HE CANNOT PROCEED TO MAKE THE DISALLOWANCE U/S 14A(1) AND ACCORDINGLY, THE DISALLOWANCE MADE BY T HE A.O. AND PARTLY SUSTAINED BYB THE LD. CIT(A) OVER AND ABOVE THE DISALLOWANCE MADE BY TH E ASSESSEE IS DELETED. RESPECTFULLY FOLLOWING THE ITAT DECISION CITED ABOVE, THE DISALLOWANCE MADE BY THE APPELLANT COMPANY SUO MOTO OF RS.86,57,565/ - IS MORE THAN SUFFICIENT AND FURTHER ADDITION MADE U/S 14A OF RS. 1, 56,86, 162/ - IS DELETED. HENCE, THE G ROUND OF APPEAL IS ALLOWED.' 6. THE LD.AR FOR THE ASSESSEE, AT THE TIME OF HEARING SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT, MUMBAI BENCH 'C' IN ASSESSEE'S OWN CASE FOR AY 2012 - 13 IN ITA NO.6414/MUM/201 6 WHEREIN UNDER SIMILAR CIRCUMSTANCES, THE ITAT HAS DELETED FURTHER DISALLOWANCE MADE BY THE AO OVER AND ABOVE SUO MOTO DISALLOWANCE MADE BY THE ASSESSEE BY HOLDING THAT THE AO HAS NOT RECORDED ANY SATISFACTION REQUIRED U/S 14A(2) AS TO WHY DISALLOWANCE OF FERED BY THE ASSESSEE VOLUNTARILY IS NOT A CORRECT DISALLOWANCE U/S 14A AND THE SAME NEEDS TO BE DISCARDED. THE AO HAS MECHANICALLY APPLIED RULE 8D(2) TO DETERMINE FURTHER DISALLOWANCE WITHOUT ARRIVING AT A SATISFACTION AS TO INCORRECTNESS OF DISALLOWANCE QUANTIFIED, BY THE ASSESSEE. FACTS BEING IDENTICAL FOR THE YEAR UNDER CONSIDERATION, BY F OLLOWING THE EARLIER DECISION OF THE ITAT, THE ADDITION MADE BY THE AO NEEDS TO BE DELETED. 7. ON THE OTHER HAND, THE LD.DR FAIRLY ACCEPTED THAT THE ISSUE IS COVERED I N FAVOUR OF THE ASSESSEE BY THE DECISION OF THE ITAT FOR EARLIER ASSESSMENT YEAR. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ISSUE OF DISALLOWANCE OF EXPENDITURE INCURRED IN RELATION TO EXEMPT INCOME U/S 14A HAS BEEN CONSIDERED BY THE ITAT. IN ASSESSEE'S OWN CASE FOR AY 2012 - 13 IN ITA NO.6414/MUM/20 16 AND AFTER CONSIDERING RELEVANT FACTS DELETED FURTHER DISALLOWANCE MADE BY THE AO OVER AND ABOVE SUO MOTO DISALLOWANCE MADE BY THE ASSESSEE TOWARDS EXPENDITURE INCURRED IN RELATION TO EXEMPT INCOME U/S 14A OF THE ACT. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED BELOW: - 8. WE HAVE CONSIDERED RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD INCLUDING ORDERS OF AUTHORITIES BELOW AND PAPER BOOK FILED BY THE ASSESSEE . WE HAVE OBSERVED THAT THE ASSESSEE IS AN RBI REGISTERED (NBFC) INVESTMENT COMPANY . THE ASSESSEE HAS RECEIVED DIVIDEND OF RS. 32.57 CRORES 6 ITA NO. 2137/MUM/2018 (A.Y: 2009 - 10) M/S. CYRUS INVESTMENT PVT. LTD., WHICH WAS CLAIMED AS AN EXEMPT INCOME . THE ASSESSEE SUO - MOTU DISALLOWED EXPENDITURE OF RS. 5,44,975/ - OF ITS OWN VOLUNTARILY U/S 14A OF THE 1961 ACT BEING INCURRED IN RELATION TO EARNING OF AN EXEMPT INCOME, WHICH INCLUDED DIRECT EXPENSES OF RS. 143/ - AND BALANCE RS. 5,44,832/ - TOWARDS INDIRECT EXPENSES WHICH WERE DISALLOWED BY THE ASSESSEE VOLUNTARILY SUO - MOTU U/S 14A. THE AO INVOKED PROVISION OF SECTION 14A R.W.R. 8D AND DISALLOWED RS. 2,41,07,023/ - MAINLY BY INVOKING RULE 8D(2)(III) R.W.S. 14A OF THE 1961 ACT DESPITE THE FACT THAT THE ASSESSEE HAS INCURRED TOTAL EXPENSES OF RS. 15.03 LAC DURING THE ENTIRE YEAR WHICH IS REFLECTED IN PROFIT AND LOSS ACCOUNT, OUT OF WHICH RS. 4,13,486/ - WAS VOLUNTARILY DISALLOWED BY THE ASSESSEE AND NEVER CLAIMED AS BUSINESS DEDUCTION, WHILE OUT OF THE BALANCE REMAINING EXPENSES TO THE TUNE OF RS. 10,89,665/ - , 50% OF THE SAID EXPENSES AGGREGATING TO RS. 5,44,832/ - WERE DISALLOWED BY THE ASSESSEE VOLUNTARILY U/S 14A OF T HE 1961 ACT WHILE REST 50% OF THE EXPENSES WERE CLAIMED BY THE ASSESSEE AS AN BUSINESS EXPENSES/DEDUCTION .(REFER PAGE 8 - 17/PB) . THE ASSESSEE ALSO DISALLOWED RS. 143/ - TOWARDS DEMAT CHARGES BEING DIRECT EXPENSES FOR EARNING AN EXEMPT INCOME WHICH IS NOT A MATTER OF DISPUTE BETWEEN RIVAL PARTIES. THE TOTAL DISALLOWANCE OF EXPENDITURE OF RS. 5,44,975/ - U/S 14A IS ALSO CERTIFIED BY TAX - AUDITORS IN THEIR TAX AUDIT REPORT TO BE CORRECT DISALLOWANCE OF EXPENDITURE U/S 14A INCURRED IN RELATION TO EARNING OF EXEM PT INCOME (REFER PAGE 63 AND 75/PB). WE HAVE OBSERVED FROM THE PERUSAL OF THE BALANCE SHEET THAT THE ASSESSEE HAS INVESTMENTS IN PROPERTIES AS WELL AS IN SHARES, DEBENTURES, PARTNERSHIP FIRMS, MUTUAL FUNDS, AND INCOME IS ARISING FROM THESE ACTIVITIES. THE AO HAS NOT RECORDED ANY SATISFACTION U/S 14A(2) AS TO WHY DISALLOWANCE OFFERED BY THE ASSESSEE SUO MOTU VOLUNTARILY IS NOT A CORRECT DISALLOWANCE U/S 14A AND THE SAME NEEDS TO BE DISCARDED . THE AO MECHANICALLY APPLIED RULE 8D AND ARRIVED AT DISALLOWANCE OF RS. 2,41,07,023/ - U/S 14A R.W.R. 8D NOTWITHSTANDING THAT THE ASSESSEE HAS INCURRED TOTAL EXPENSES OF RS. 15,03,151/ - DURING RELEVANT YEAR WHICH WAS CLAIMED AS AN EXPENSES IN PROFIT AND LOSS ACCOUNT (PB/PAGE 40). OUT OF THESE TOTAL EXPENSES OF RS. 15,03, 151/ - , THE ASSESSEE VOLUNTARILY DISALLOWED RS. 4,13,486/ - AND NEVER CLAIMED THE SAME AS BUSINESS DEDUCTION , WHILE OUT OF THE BALANCE REMAINING EXPENSES OF RS. 10,89,665 , THE ASSESSEE COMPUTED DISALLOWANCE OF RS. 5,44,832/ U/S 14A TOWARDS INDIRECT EXPENS ES RELATABLE TO EARNING OF AN EXEMPT INCOME WHILE ALSO THE ASSESSEE VOLUNTARILY ADDITIONAL DISALLOWED AN EXPENDITURE OF RS. 143/ - DIRECTLY RELATABLE TO AN EXEMPT INCOME, THUS TOTAL DISALLOWANCE OF EXPENDITURE TO THE TUNE OF 7 ITA NO. 2137/MUM/2018 (A.Y: 2009 - 10) M/S. CYRUS INVESTMENT PVT. LTD., RS. 5,44,975/ - WAS OFFERED BY TH E ASSESSEE SUO MOTU VOLUNTARILY U/S 14A TO HAVE BEEN INCURRED FOR EARNING AN EXEMPT INCOME. THE AO DID NOT RECORDED ANY SATISFACTION U/S 14A(2) AS TO WHY DISALLOWANCE OFFERED BY THE ASSESSEE TO THE TUNE OF RS. 5,44,975/ - U/S 14A WHICH WAS WORKED OUT BY THE ASSESSEE HAVING REGARDS TO ITS ACCOUNTS IS NOT A CORRECT WORKING OF DISALLOWANCE OF EXPENDITURE IN RELATION TO EARNING OF AN EXEMPT INCOME HAVING REGARDS TO ACCOUNTS OF THE ASSESSEE AND THE SAME NEEDED TO BE DISCARDED AND RULE 8D IS TO BE APPLIED INSTEAD. THE SAID WORKING OF THE ASSESSEE WAS ALSO APPROVED BY TAX - AUDITORS OF THE ASSESSEE IN THEIR TAX AUDIT REPORT SUBMITTED WHICH IS PART OF PAPER BOOK(PAGE 63 AND 75). THE AO HAS NOT RECORDED ANY REASONING FOR DISCARDING THE WORKING SUBMITTED BY THE ASSESSEE AS TO DISALLOWANCE OF EXPENDITURE OF RS. 5,44,975/ - U/S 14A. THE AO MECHANICALLY APPLIED RULE 8D AND MADE DISALLOWANCE TO THE TUNE OF RS. 2.14 CRORES WITHOUT UNDERSTANDING THAT SECTION 14A CLEARLY SPEAKS OF DISALLOWANCE OF THE EXPENDITURE INCURRED BY THE A SSESSEE IN RELATION TO EARNING OF AN EXEMPT INCOME AND NO NOTIONAL EXPENDITURE CAN BE DISALLOWED U/S 14A WHICH HAD NOT EVEN BEEN INCURRED AT ALL BY THE ASSESSEE. ALSO THERE IS NO ALLEGATION OR INCRIMINATING MATERIAL ON RECORD THAT THE ASSESSEE INCURRED ANY EXPENDITURE OUT OF BOOKS OF ACCOUNTS WHICH WAS NOT RECORDED IN BOOKS OF ACCOUNTS WARRANTING ANY ADDITIONS TO INCOME TO BRING TO TAX THE SAID UNRECORDED EXPENDITURE. UNDER THESE FACTS SITUATION KEEPING IN VIEW TOTALITY OF THE CIRCUMSTANCES AND SUO MOTU DIS ALLOWANCE OF 50% EXPENSES OFFERED BY THE ASSESSEE AND NON RECORDING OF SATISFACTION BY THE AO U/S 14A(2) BEFORE INVOKING RULE 8D, WE ARE OF THE CONSIDERED VIEW THAT THE APPELLATE ORDER OF LEARNED CIT(A) NEEDS TO BE UPHELD/SUSTAINED WHICH WE SUSTAIN AND HE NCE THE DISALLOWANCE OFFERED BY THE ASSESSEE U/S 14A SUO - MOTU VOLUNTARILY TO THE TUNE OF RS. 5,44,975/ - STOOD ACCEPTED. REVENUE FAILS ON THIS GROUND AND HENCE GROUND NO. 3 IS ADJUDICATED AGAINST REVENUE. WE ORDER ACCORDINGLY . 9. IN VIEW OF THE O MATTER AN D CONSISTENT WIT H THE VIEW TAKEN BY THE COORDINATE BENCH , WE ARE OF THE CONSIDERED VIEW THAT THE AO WAS ERRED IN INVOKING RULE 8D(2) TO COMPUTE DISALLOWANCE CONTEMPLATED U/S 14A WITHOUT RECORDING HIS SATISFACTION AS TO INCORRECTNESS IN DISALLOWANCE QUANTIF IED BY THE ASSESSEE. THE LD.CIT(A), AFTER CONSIDERING RELEVANT SUBMISSIONS OF THE ASSESSEE HAS RIGHTLY DELETED FURTHER ADDITION MADE BY THE AO. HENCE, WE ARE INCLINED TO UPHOLD THE FINDINGS OF THE LD.CIT(A) AND DISMI SS APPEAL FILED BY THE REVENUE. 8 ITA NO. 2137/MUM/2018 (A.Y: 2009 - 10) M/S. CYRUS INVESTMENT PVT. LTD., 6. IN THE YEAR UNDER CONSIDERATION T HE ASSESSING OFFICER DID NOT POINT OUT IN CLEAR TERMS AS TO WHY THE SUOMOTO DISALLOWANCE OF .1,16,36,175/ - MADE BY THE ASSESSEE IS NOT CORRECT WITH REFERENCE TO THE BOOKS OF ACCOUNTS OF THE ASSESSEE. ASSESSING OFFICER ALL ALONG STATED IN THE ASSESSMENT ORDER THAT ONLY PARTIAL APPLICATION OF RULE 8D HAS BEEN APPLIED BY THE ASSESSEE AND HE HAS NOT POINTED THE INCORRECTNESS OF THE SUOMOTO DISALLOWANCE MADE BY THE ASSESSEE OR AS TO WHY THIS IS NOT ADEQUATE DISALLOWANCE U/S. 14A OF TH E ACT TO MEET THE EXPENSES ATTRIBUTABLE FOR EARNING DIVIDEND INCOME. IN THE CIRCUMSTANCES, R ESPECTFULLY FOLLOWING THE SAID DECISION, WE DI RECT THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE U/S. 14A OF THE ACT ONLY TO THE SUOMOTO DISALLOWANCE ALREADY MADE BY THE ASSESSEE AND DELETE THE BALANCE DISALLOWANCE. 7. IN THE RESULT, APP EAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 10 TH JANUARY, 2020 SD/ - SD/ - ( G. MANJUNATHA ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 10 / 01/2020 GIRIDHAR, SR.PS 9 ITA NO. 2137/MUM/2018 (A.Y: 2009 - 10) M/S. CYRUS INVESTMENT PVT. LTD., COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM