The Dy. Commissioner of Income Tax, Circle-4(2), Ahmedabad V. Shri Karsanbhai Kanji Raghvani, Ahmedabad

ITA 2174/AHD/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9729 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 28-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Rule 8D
• Section: 143(3); 142(1); 14A; 147

Judgement Text

, B - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B BEFORE SHRI PRAMOD KUMAR, VICE PRESIDENT & SMT. MADHUMITA ROY, JUDICIAL MEMBER . ITA NOS.2173 & 2174/AHD/2017 / ASSTT. YEARS: 2013-14 & 2014-15 DCIT CIR-4(2), AHMEDABAD- 380015 VS. KARSAN KANJI RAGHVANI 71, TIRTHNAGAR SOCIETY, PART 1, NR. NEW NIKITA PARK, SOLA ROAD, GHATLODIYA, AHMEDABAD PAN:AAK PR1 351 D / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI MUDIT NAGPAL, SR. DR REVENUE BY : SHRI MEHUL TALERA, AR ' #$% /DATE OF HEARING : 13/06/2019 &' $% /DATE OF PRONOUNCEMENT: 01/07/2019 () / O R D E R PER MADHUMITA ROY- JM : BOTH THE APPEALS FILED BY REVENUE ARE DIRECTED AGA INST THE ORDER DATED 10.07.2017 PASSED BY THE CIT(A)-4, AHMEDABAD ARISIN G OUT OF THE ORDER PASSED BY THE AO U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HERE INAFTER REFERRED TO AS THE ACT) FOR FINANCIAL YEARS 2013-14 & 2014-15 RESPECT IVELY. 2. THE ORDER OF THE LD. CIT(A) IN DELETING THE ADDITI ON MADE BY THE LD. AO ON ACCOUNT OF DISALLOWANCE UNDER SEC. 14A READ WITH RU LE 8D OF THE ACT, 1961 HAS BEEN CHALLENGED BEFORE US. THE BRIEF FACTS LEADING TO THE CASE THIS THAT THE ASSESSEE BEING FILED HIS RETURN OF INCOME ON 27.09.2013 DECL ARING TOTAL INCOME AT RS. 28,92,850/- ALONGWITH COMPUTATION OF INCOME, PROFIT & LOSS ACCOUNT, BALANCE ITA NOS. 2173 & 2174/AHD/2017 A.YS. 2013-14 & 2014-15 2 SHEET, TAX AUDIT REPORT IN THE FORM NO. 3CB & 3CD. UNDER SCRUTINY NOTICE WAS ISSUED UNDER SEC. 142(1) OF THE ASSESSEE ON 29.05.2 015 & 03.07.2015 ALONGWITH DETAIL QUESTIONNAIRE. 3. ASSESSEE IS A BUILDER AND DEVELOPER ENGAGED IN T HE BUSINESS OF REAL ESTATE ALSO HAVING PARTNERSHIP FIRMS, DIVIDEND INCOME AS W ELL AS SALARY, INTEREST & PROFIT FROM VARIOUS PARTNERSHIP FIRMS DURING THE YEAR UNDE R CONSIDERATION. UPON VERIFICATION OF THE BALANCE SHEET IT APPEARS THAT T HE ASSESSEE INVESTED A SUM OF RS. 21,60,18,051/- IN SHARES/SECURITIES/MUTUAL FUNDS OF DIFFERENT COMPANIES AND VARIOUS PARTNERSHIP FIRMS. AN AMOUNT OF INTEREST E XPENDITURE DEBITED IN THE PROFIT AND LOSS ACCOUNT OF RS. 70,89,595/- WAS ALSO NOTICE D. DIVIDEND INCOME AS EXEMPT UNDER SEC. 10(34/35) OF THE ACT,1961 OF RS. 4,50,70 6/- WAS ALSO CLAIMED BY THE ASSESSEE AND SHARE IN PROFIT FROM VARIOUS PARTNERSH IP FIRMS AS EXEMPT INCOME OF RS. 1,58,93,427/- WAS ALSO CLAIMED. THE LD. AO WAS OF THE VIEW THAT DEDUCTION OF THE EXPENDITURE CANNOT BE ALLOWED IF THE SAME IS IN CURRED ON ACCOUNT OF EXEMPT INCOME WHICH DOES NOT FORM THE PART OF TOTAL INCOME AND THEREFORE, THE PROVISION OF SEC. 14A WOULD BE APPLICABLE. EXPLANATION WAS CALLE D FOR TO THAT EFFECT. HOWEVER, SUCH EXPLANATION WAS NOT FOUND ACCEPTABLE ON THE GR OUND THAT THE ASSESSEE HAS DEBITED INTEREST EXPENSES IN THE PROFIT & LOSS ACCOU NT AND ALSO MADE LARGE INVESTMENT ON WHICH HE EARNED TAX FREE INCOME WHICH IS NOT FORMING A PART OF THE TOTAL INCOME. THE PROVISION OF SEC. 14A RULE 8D TH E LD. AO, THEREFORE, DISALLOWED RS. 67,48,401/-. IN APPEAL THE SAME WAS DELETED BY THE LD. CIT(A) HENCE, THE INSTANT APPEAL BEFORE US. 4. AT THE TIME OF THE HEARING OF THE INSTANT APPEAL THE LD. AR SUBMITTED BEFORE US THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE WHICH HAS NOT BEEN CONTROVERTED BY THE LD. DR. HENCE, THE PRAYER MADE FOR CONFIRMATION OF THE ORDER BY THE LD. AR. ITA NOS. 2173 & 2174/AHD/2017 A.YS. 2013-14 & 2014-15 3 5. HEARD THE RESPECTIVE PARTIES PERUSED THE RELEVAN T MATERIALS AVAILABLE ON RECORD. IT APPEARS FROM THE RECORDS THAT BEFORE TH E LD. CIT(A) SUBMITTED AS FOLLOWS:- 4. DURING THE COURSE OF APPELLATE PROCEEDING, THE APPELLANT FILED WRITTEN SUBMISSION AS UNDER: THE APPELLANT IS A BUILDER AND DEVELOPER OF RESIDEN TIAL AND COMMERCIAL PROJECTS. IT WAS NOTED BY THE AO THAT THE APPELLANT IS A PARTNER IN SEVERA L PARTNERSHIP FIRMS. IT WAS NOTED BY THE AO THAT FOR A.Y. 2013-14, THE APPELLANT HAS INVESTE D A SUM OF RS. 21,60,18,051/- IN SHARE/SECURITIES/MUTUAL FUNDS OF DIFFERENT COMPANIE S AND PARTNERSHIP FIRMS. IT IS NOTICED THAT AMOUNT OF INTEREST EXPENDITURE DEBITED FROM THE P&L ACCOUNT OF RS. 70,89,595/-, FURTHER THE APPELLANT HAS CLAIMED DIVIDEND INCOME AS EXEMPT U/S . 10(34/35) OF THE ACT OF RS. 4,50,706/-. THE EARNED PROFIT FROM THOSE PARTNERSHIP FIRMS IS RS. 1,58,93,427/-. THE SAID PROFIT WAS CLAIMED AS EXEMPT U/S. 10(2A) OF THE IT ACT. NOW WE ARE PRODUCING THE CHART SHOWING THE PROFIT, INTEREST, REMUNERATION EARNED FROM THE PARTNERSHIP FIRM AND INVESTMENT IN THE PARTNERSHIP FIRM FROM WHOM EXEMPTED PROFIT WAS EARN DURING THE YEAR. OPENING BALANCE AS ON 01/04/2012 PARTICULARS PROFIT INVESTMENT AS ON 31/03/2013 INTEREST INCOME REMUNERATION DIVIDEND 12,80,78,464 SHALIGRAM CORPORATION 49,77,717 19,46,78,671 91,44,657 53,28,530 RESHAM INFRASTRUCTURE 50,690 53,54,045 1,32,284 -51,62,209 SHALIGRAM ASSOCIATES 1,01,81,806 96,71,380 50,50,161 SHALIGRAM DEVELOPERS 6,82,214 -5,14,893 13,32,94,946 TOTAL 1,58,93,427 20,91,89,203 91,44,657 1,32,284 4,50,706 CAPITAL AS ON 31/03/2013 6,38,88,830 NON-INTEREST BEARING FUND 10,13,99,660 TOTAL 16,52,88,490 INVESTMENT AS ON 31/03/2013 FROM WHICH EXEMPT PROFIT EARNED 20,91,89,203 ITA NOS. 2173 & 2174/AHD/2017 A.YS. 2013-14 & 2014-15 4 INTEREST PAID (A) 70,89,595 INTEREST RECEIVED FROM PARTNERSHIP FIRM FROM WHOM EXEMPT PROFIT RECEIVED RS. 1,58,93,427 91,44,657 INTEREST RECEIVED FROM OTHERS 8,32,766 TOTAL INTEREST RECEIVED (B) 99,77,423 NET INTEREST FROM PARTNERSHIP FIRM 91,44,657 70,8 9,595 = 20,55,062 NET INTEREST INCOME (A)-(B) 99,77,423 70,89,595 = 28,87,828 THE APPELLANTS INVESTMENT IN THOSE FIRMS WHICH ARE CONTRIBUTING TO THE EXEMPT INCOME AS ON 31 ST OF MARCH, 2013 WAS RS. 20,91,89,203/-. THOUGH IN THE BALANCE SHEET INVESTMENT IN THE PARTNERSHIP FIRM HAS SHOWN RS. 21,59,67,051/-. THE BALANCE INVESTMENT IN PARTNERSHIP FIRM IS RS. 67,77,487/- WHICH HAS NOT GIVEN ANY PROFIT DURI NG THE YEAR. HENCE NOT TAKEN IN THE FIGURE OF RS.20,91,89,203/-. INVESTMENT IN COMPANY IS RS. 45,00,000/- INVESTED EARLIER THERE IS DIVIDEND RECEIVED ON THESE SHARES RS. 4,50,000/-. H ENCE INVESTMENT SHOULD NOT BE INCLUDED. THEREFORE WE HAVE NOT INCLUDED THIS HERE ALSO. SIMI LARLY INVESTMENT IN PARTNERSHIP FIRM WAS RS. 13,32,94,946/-. (CONSIDERING ONLY THOSE INVESTMENTS WHICH DERIVE EX EMPT INCOME SARABHAI HOLDINGS PVT. LTD. V. ACIT, ITA NO. 2328/A HD/2012, DATED 11/4/2014 (AHD.)(TRIB.)- ONLY AVERAGE OF VALUE OF INVESTMENT FROM WHICH EXEM PT INCOME HAS BEEN EARNED IS TO BE CONSIDERED AND NOT TOTAL INVESTMENT AT BEGINNING OF YEAR AND AT END OF YEAR IN DISALLOWING ADMINISTRATIVE EXPENSES [AY 2009-10].) FOR YOUR READY REFERENCE WE ARE REPRODUCING SECTION 14A AND RULE 8D WHICH IS AS UNDER. 14A. EXPENDITURE INCURRED IN RELATION TO INCOME NO T INCLUDIBLE IN TOTAL INCOME.-(1) FOR THE PURPOSES OF COMPUTING THE TOTAL INCOME UNDER THIS C HAPTER, NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THIS ACT. (2) THE ASSESSING OFFICER SHALL DETERMINE THE AMOUN T OF EXPENDITURE INCURRED IN RELATION TO SUCH INCOME WHICH DOES NOT FORM PART OF THE TOTAL I NCOME UNDER THIS ACT IN ACCORDANCE WITH 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 N OT FORM PART OF THE TOTAL INCOME UNDER THIS ACT. (3) THE PROVISIONS, OF SUB-SECTION (2) SHALL ALSO A PPLY IN RELATION TO A CASE WHERE AN ASSESSEE CLAIMS THAT NO EXPENDITURE HAS BEEN INCURRED BY HIM IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THIS ACT: PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SHA LL EMPOWER THE ASSESSING OFFICER EITHER TOREASSESS UNDER SECTION 147 OR PASS AN ORDER ENHAN CING THE ASSESSMENT OR REDUCING A REFUNDALREADY MADE OR OTHERWISE INCREASING THE LIAB ILITY OF THE ASSESSEE UNDER SECTION 154, FOR ANYASSESSMENT YEAR BEGINNING ON OR BEFORE THE 1 ST DAY OF APRIL. 2001. 21 [METHOD FOR DETERMINING AMOUNT OF EXPENDITURE IN RE LATION TO INCOME NOT INCLUDIBLE IN TOTAL INCOME. ITA NOS. 2173 & 2174/AHD/2017 A.YS. 2013-14 & 2014-15 5 8D. (1) WHERE THE ASSESSING OFFICER, HAVING REGARD TO THE ACCOUNTS OF THE ASSESSEE OF A PREVIOUSYEAR, IS NOT SATISFIED WITH (A) THE CORRECTNESS OF THE CLAIM OF EXPENDITU RE MADE BY THE ASSESSEE; OR (B) THE CLAIM MADE BY THE ASSESSEE THAT NO EXP ENDITURE HAS BEEN INCURRED, IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT FOR SUCH PREVIOUS YEAR, HE SHALL DETERMINE THE AMOUNT OF EXPENDITURE IN RELATI ON TO SUCH INCOME IN ACCORDANCE WITH THE PROVISIONS OF SUB-RULE (2). (2) THE EXPENDITURE IN RELATION TO INCOME WHICH DOE S NOT FORM PART OF THE TOTAL INCOME SHALL BE THE AGGREGATE OF FOLLOWING AMOUNTS, NAMELY :- (I) THE AMOUNT OF EXPENDITURE DIRECTLY RELATING TO INCOME WHICH DOES NOT FORM PART OF TOTAL INCOME; (II) IN A CASE WHERE THE ASSESSEE HAS INCURRED EXPE NDITURE BY WAY OF INTEREST DURING THE PREVIOUS YEAR WHICH IS NOT DIRECTLY ATTRIBUTABLE TO ANY PARTICULAR INCOME OR RECEIPT, AN AMOUNT COMPUTED IN ACCORDANCE WITH THE FOLLOWING FO RMULA, NAMELY: A X B C WHERE A= AMOUNT OF EXPENDITURE BY WAY OF INTEREST OTHER THAN THE AMOUNT OF INTEREST INCLUDED IN CLAUSE (I) INCURRED DURING THE PREVIOUS YEAR; B= THE AVERAGE OF VALUE OF INVESTMENT, INCOME F ROM WHICH DOES NOT OR SHALL NOT FORM PART OF THE TO TAL INCOME, AS APPEARING IN THE BALANCE SHEET OF TH E ASSESSEE, ON THE FIRST DAY AND THE LAST DAY OF T HE PREVIOUS YEAR; C= THE AVERAGE OF TOTAL ASSETS AS APPEARING IN THE BALANCE SHEET OF THE ASSESSEE, ON THE FIRSTDAY AND THE LAST DAY OF THE PREVIOUS YEAR; (III) AN AMOUNT EQUAL TO ONE-HALF PER CENT OF THE A VERAGE OF THE VALUE OF INVESTMENT, INCOME FROM WHICH DOES NOT OR SHALL NOT FORM PART O F THE TOTAL INCOME, AS APPEARING IN THE BALANCE SHEET OF THE ASSESSEE, ON THE FIRST DAY AND THE LAST DAY OF THE PREVIOUS YEAR. (3) FOR THE PURPOSE OF THIS RULE, THE TOTAL ASSETS SHALL MEAN, TOTAL ASSETS AS APPEARING IN THE BALANCE SHEET EXCLUDING THE INCREASE ON ACCOUNT REV ALUATION OF ASSETS BUT INCLUDING THE DECREASE ON ACCOUNT OF REVALUATION OF ASSETS.] AFTER READING SEC. 14A AND RULE 8D OUR SUBMISSION I S AS UNDER:- AS PER CHART, THE APPELLANT HAS EARNED INTEREST INC OME RS. 99,77,423 AND INTEREST EXPENDITURE RS. 70,89,595. NET INTEREST INCOME IS RS. 28,87,82 8. HERE THERE IS NO EXPENDITURE CLAIMED BUT THERE IS INTEREST INCOME HENCE DISALLOWANCE IS NOT POSSIBLE. ONCE THE INTEREST INCOME WAS MORE THAN THE INTEREST EXPENDITURE THEN IT WAS WRON G ON THE PART OF THE AO TO INVOKE THE PROVISIONS OF RULE 8D OF THE ACT. WE ARE RELYING U PON THE FOLLOWING DECISIONS:- ITA NOS. 2173 & 2174/AHD/2017 A.YS. 2013-14 & 2014-15 6 SAFAL REALITY PVT. LTD. V/S. ACIT(OSD), CIRCLE 8, AHMEDABAD; ITA NO. 2334/AHD/2012 & 1842/AHD/2013. (PG. NO. 67 TO 71) ADITYA MEDISALES LIMITED V/S. ACIT RANGE 1, BARODA. (PG. NO. 72 TO 75) DCIT, CIRCLE-4, KOLKATA V/S. M.S. TRADE APARTMENT L TD. (PG. NO. 76 TO 77) MORGAN STANLEY INDIA SECURITIES V/S. ACIT CIRCLE 1( 2), MUMBAI (PG. NO. 78 TO 82) ITAT DELHI MODERN INFO TECHNOLOGY PVT. LTD. V/S. IT O; ITA NO. 4294/DEL/2012 (PG. NO. 83 TO 86) AS PER THE RULE, AS REPRODUCED ABOVE, THE AO HAS TO DETERMINE THE DISALLOWANCE HAVING REGARD TO THE ACCOUNTS OF THE APPELLANT TO SATISFY HIMSELF IN RESPECT OF THE CLAIM OF EXPENDITURE MADE BY THE APPELLANT AS WELL AS IN RESPECT OF THE CLAIM WHETHER ANY EXPENDITURE WAS INCURRED IN RELATION TO THE INCOME WHICH DOES NOT F ORM PART OF THE TOTAL INCOME; HENCE, EXEMPT UNDER THE ACT. THE AO IS FIRST REQUIRED TO D ETERMINE THE AMOUNT OF EXPENDITURE IN RELATION TO SUCH EXEMPTED INCOME. THE APPELLANT HAS ALSO NOTED THAT EVEN FOR A.Y. 2008-09 THE RESPECTED CO-ORDINATE BENCH 'D' ITAT AHMEDABAD IN THE CASE OF KARNAVATI PETROCHEM PVT. LTD. (SUPRA) HAS HELD AS UNDER: WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL ON RECORD. WE FIND THAT CIT(A) WHILE GRANTING RELIEF TO THE ASSESSEE HAS GI VEN A FINDING THAT NO NEXUS HAS BEEN ESTABLISHED BY THE AO WHICH THE AMOUNT INCURRED BY THE ASSESSEE FOR EARNING THE TAX FREE INCOME. HE HAS FURTHER NOTED THAT IN THE ASSESSEES CASE THE INTEREST INCOME WAS MORE THAN INTEREST EXPENSE AND THUS THE ASSESSEE WAS HAVING N ET POSITIVE INTEREST INCOME AND THEREFORE THE SAME CANNOT BE CONSIDERED FOR DISALLOWANCE AND FOR WHICH HE PLACE RELIANCE ON THE DECISION OF KOLKATA TRIBUNAL IN THE CASE OF TRADING APARTMENT LIMITED AND THE DECISION OF TRIBUNAL IN THE CASE MORGAN STANLEY INDIA SECURITIE S PRIVATE LIMITED. HE HOWEVER CONSIDERED THE ADMINISTRATIVE EXPENSES TO BE 0.5% OF THE AVERA GE INVESTMENTS AND DISALLOWED THE SAME. FURTHER, WE WOULD LIKE TO REPRODUCE A PORTION OF TH E ORDER OF HON'BLE DELHI HIGH COURT PRONOUNCED IN THE CASE OF MAXOPP INVESTMENT LTD, AN D OTHERS VS. CIT AS FOLLOWS: SUB-S. (2) OF S. 14A PROVIDES THE MANNER IN WHICH THE AO IS TO DETERMINE THE AMOUNT OF EXPENDITURE INCURRED IN RELATION TO INCOME WHICH DO ES NOT FORM PART OF THE TOTAL INCOME. HOWEVER, IF ONE EXAMINES THE PROVISION CAREFULLY, O NE WOULD FIND THAT THE AO IS REQUIRED TO DETERMINE THE AMOUNT OF SUCH EXPENDITURE ONLY IF TH E AO. HAVING REGARD TO THE ACCOUNTS OF THE ASSESSES, IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE IN RESPECT OF SUCH EXPENDITURE IN RELATION TO INCOME WHICH DOES NOT FO RM PART OF THE TOTALINCOME UNDER THE ACT. IN OTHER WORDS, THE REQUIREMENT OF THE AO EMBARKING UPON A DETERMINATION OF THE AMOUNT OF EXPENDITURE INCURRED IN RELATION TO EXEMPT INCOME W OULD BE TRIGGERED ONLY IF AO RETURNS A FINDING THAT HE IS NOT SATISFIED WITH THE CORRECTNE SS OF THE CLAIM OF THE ASSESSEE IN RESPECT OF SUCH EXPENDITURE. SUB-S. (3) IS NOTHING BUT AN OFFSHOOT OF SUB-S. (2) OF S. I4A, SUB-S. (3) APPLIES TO CASES WHERE THE ASSESSEE CLAIMS THAT NO EXPENDITURE HAS BEEN IN CURRED IN RELATION TO INCOME WHICH DOES NOT FORM CART OF THE TOTAL INCOME UNDER THE ACT. IN OTHER WORDS, SUB-S. (2) DEALS WITH CASES WHERE THE ASSESSEE SPECIFIES A POSITIVE AMOUNT OF E XPENDITURE IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE AC T AND SUB-5. (3) APPLIES TO CASES WHERE THE ASSESSES ASSERTS THAT NO EXPENDITURE HAD BEEN INCUR RED IN RELATION TO EXEMPT INCOME. IN BOTH CASES, THE AO, IF SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE IN RESPECT OF SUCH EXPENDITURE OR NO EXPENDITURE, AS THE CASE MAY BE, CANNOT EMBARK UPON A DETERMINATION OF THE AMOUNT OF EXPENDITURE IN ACCORDANCE WITH ANY PR ESCRIBED METHOD, AS MENTIONED IN SUB-S. (2) OF S. 14A. IT IS ONLY IF THE AO IS NOT SATISFIE D WITH THE CORRECTNESS OF THE CLAIM OF THE ITA NOS. 2173 & 2174/AHD/2017 A.YS. 2013-14 & 2014-15 7 ASSESSEE. IN BOTH CASES, THAT THE AO GETS JURISDICT ION TO DETERMINE THE AMOUNT OF EXPENDITURE INCURRED IN RELATION TO SUCH INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT IN ACCORDANCE WITH THE PRESCRIBED METHOD, THE P RESCRIBED METHOD BEING THE METHOD STIPULATED IN R. 8D. WHILE REJECTING THE CLAIM OF T HE ASSESSEE WITH REGARD TO THE EXPENDITURE OR NO EXPENDITURE, AS THE CASE MAY BE, IN RELATION TO EXEMPT INCOME, THE AO WOULD HAVE TO INDICATE COGENT REASONS FOR THE SAME. IT IS, THERE FORE, CLEAR THAT DETERMINATION OF THE AMOUNT OF EXPENDITURE IN RELATION TO EXEMPT INCOME UNDER R ULE 8D WOULD ONLY COME INTO PLAY WHEN THE ASSESSING OFFICER REJECTS THE CLAIM OF THE ASSE SSEE IN THIS REGARD. IF ONE EXAMINES SUB-RULE (2) OF RULE 8D, THE METHOD FOR DETERMINING THE EXPENDITURE IN RELATION TO EXEMPT INCOME HAS THREE COMPONENTS. THE FIRST COMPONENT IS THE AMOUNT OF EXPENDITURE DIRECTLY RELATING TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME. THE SECOND IS BEING COMPUTED ON THE BASIS OF THE FORMUL A GIVEN THEREIN IN A CASE WHERE THE ASSESSEE INCURS EXPENDITURE BY WAY OF INTEREST WHIC H IS NOT DIRECTLY ATTRIBUTABLE TO ANY PARTICULAR INCOME OR RECEIPT. THE FORMULA ESSENTIAL LY APPORTIONS THE AMOUNT OF EXPENDITURE BY WAY OF INTEREST (OTHER THAN THE AMOUNT OF INTEREST INCLUDED IN CLAUSE (I) INCURRED DURING THE PREVIOUS YEAR IN THE RATIO OF THE AVERAGE VALUE OF INVESTMENT, INCOME FROM WHICH DOES NOT OR SHALL NOT FORM PART OF THE TOTAL INCOME, TO THE AVE RAGE OF THE TOTAL ASSETS OF THE ASSESSEE.THE THIRD COMPONENT IS AN ARTIFICIAL FIGURE-ONE HALF PE RCENT OF THE AVERAGE OF THE INVESTMENT, INCOME FROM WHICH DOES NOT OR SHALL NOT FORM PART O F THE TOTAL INCOME, APPEARING IN THE BALANCE-SHEETS OF THE ASSESSEE, ON THE FIRST DAY AN D THE LAST DAY OF THE PREVIOUS YEAR. IT IS THE AGGREGATE OF THESE THREE COMPONENTS WHICH WOULD CON STITUTE THE EXPENDITURE IN RELATION TO EXEMPT INCOME AND IT IS THIS AMOUNT OF EXPENDITURE WHICH WOULD BE DISALLOWED UNDER SECTION 14A OF THE ACT. IT IS, THEREFORE, CLEAR THAT IN TER MS OF THE RULE, THE AMOUNT OF EXPENDITURE IN RELATION TO EXEMPT INCOME HAS TWO ASPECTS- (A)DIREC T, AND (B) INDIRECT. THE DIRECT EXPENDITURE IS STRAIGHTAWAY TAKEN INTO ACCOUNT BY VIRTUE OF CLA USE (I) OF SUB-RULE(2) OF RULE 8D. THE INDIRECT EXPENDITURE, WHERE IT IS BY WAY OF INTERES T, IS COMPUTED THROUGH THE PRINCIPLE OF APPORTIONMENT. SECTION 14A EVEN PRIOR TO THE INTRODUCTION OF SUB-S ECTIONS (2) AND (3) WOULD REQUIRE THE ASSESSING OFFICE TO FIRST REJECT THE CLAIM OF THE A SSESSEE WITH REGARD TO THE EXTENT OF SUCH EXPENDITURE AND SUCH REJECTION MUST BE TOR DISCLOSE D COGENT REASONS. IT IS THEN THAT THE QUESTION OF DETERMINATION OF SUCH EXPENDITURE BY TH E ASSESSING OFFICER WOULD ARISE. THE REQUIREMENT OF ADOPTING A SPECIFIC METHOD OF DETERM INING SUCH EXPENDITURE HAS BEEN INTRODUCED BY VIRTUE OF SUB-SECTION (2) OF SECTION 14A. PRIOR TO THAT, THE ASSESSEE WAS FREE TO ADOPT ANY REASONABLE AND ACCEPTABLE METHOD. SO, EV EN FOR THE PRE-RULE 8D PERIOD, WHENEVER THE ISSUE OF SECTION 14A ARISES BEFORE AN ASSESSING OFFICER, HE HAS, FIRST OF ALL, TO ASCERTAIN THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE IN RESPECT OF THE EXPENDITURE INCURRED IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT. EVEN WHERE THE ASSESSEE CLAIMS THAT NO EXPENDITURE HAS BEEN INCURRED IN REL ATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME, THE ASSESSING OFFICER WILL HAV E TO VERITY THE CORRECTNESS OF SUCH CLAIM. IN CASE, THE ASSESSING OFFICER IS SATISFIED WITH THE CLAIM OF THE ASSESSEE WITH REGARD TO THE EXPENDITURE OR NO EXPENDITURE, AS THE CASE MAY BE, THE ASSESSING OFFICER IS TO ACCEPT THE CLAIM OF THE ASSESSEE IN SO FAR AS THE QUANTUM OF D ISALLOWANCE UNDER SECTION 14A IS CONCERNED. IN SUCH EVENTUALITY, THE ASSESSING OFFI CER CANNOT EMBARK UPON A DETERMINATION OF THE AMOUNT OF EXPENDITURE FOR THE PURPOSES OF SECTI ON 14A (1). IN CASE, THE ASSESSING OFFICER IS NOT ON THE BASIS OF THE OBJECTIVE CRITERIA AND A FTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY, SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE, HE SHALL HAVE TO REJECT THE CLAIM AND STATE THE REASONS FOR DOING SO. HAVI NG DONE SO, THE ASSESSING OFFICER WILL HAVE TO DETERMINE THE AMOUNT OF EXPENDITURE INCURRED IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT. HE IS REQUI RED TO DO SO ON THE BASIS OF A REASONABLE AND ACCEPTABLE METHOD OF APPORTIONMENT. UNDER THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WHEN THE INTEREST INCOME WAS MORE THAN THE INTEREST EXPENDITURE THEN THE AO WAS ITA NOS. 2173 & 2174/AHD/2017 A.YS. 2013-14 & 2014-15 8 NOT JUSTIFIED TO INVOKE THE PROVISIONS OF SECTION 1 4A READ WITH RULE 8D OF IT ACT. HENCE WE REQUEST PL DELETE THE ADDITION MADE UNDER RULE 8D(2 )(II)OF IT ACT OF RS. 58,55,888/- BEFORE INVOKING THE PROVISIONS OF SEC 14A THE AO IS REQUIRED TO SATISFY HIMSELF REGARDING CORRECTNESS OF CLAIM OF ASSESSEE IN RESPECT OF SUCH EXPENDITURE IN RELATION TO INCOME WHICH DOESN'T FORM PART OF TOTAL INCOME UNDER THIS ACT. H ERE NO SUCH SATISFACTION WAS DEMONSTRATED BY THE AO IN THE ASSESSMENT ORDER. PARTICULARLY WHE N THERE IS NO INTEREST EXPENDITURE WAS CLAIMED BUT THERE IS NET INTEREST INCOME OF RS. 28, 87,828 ( 99,77,423 - 70,89,595 ) AND ALSO THERE IS NO ANY ADMINISTRATIVE EXPENSE INCURRED AS SHOWN IN THE P&L A/C ATTACHED HEREWITH(PG. NO.03). AS PER THE CHART SHOWN ABOVE THE APPELLANT HAS RECE IVED TAXABLE INCOME FROM FIRMS THAT IS INTEREST INCOME RS. 91,44,657/-AND REMUNERATION RS. 1,32,284/- TOTAL RS. 92,76,941/-AND TAX FREE INCOME I.E. PROFIT FROM PARTNERSHIP FIRM BEING RS. 1,58,93,427/-. IN THIS SCENARIO THE AHMEDABAD TRIBUNAL IN CASE OF SHRI VISHNU ANANTMAHA JAN V/S ACIT BARODA [2012]16ITR 621 (PAGE NO. 87 TO 93) HAS HELD AS UNDER:- 'IN SUCH A SITUATION, PROVISION CONTAINED IN SECTIO N 14A WILL COME INTO OPERATION AND ANY EXPENDITURE INCURRED IN EARNING THE SHARE INCOME WI LL HAVE TO BE DISALLOWED. THUS, WE AGREE WITH THE LEARNED CIT(A) THAT THE PROVISION CONTAINE D IN SECTION 14A IS APPLICABLE TO THE FACTS OF THE CASE. FURTHER, IT HAS BEEN HELD IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD. (SUPRA) THAT ALL FACTS MAY BE TAKEN INTO CONSIDERATION FOR DETER MINING THE QUANTUM OF DISALLOWANCE TO BE MADE. THIS PORTION OF THE JUDGMENT IS APPLICABLE ON LY IN RESPECT OF DETERMINATION OF QUANTUM OFDISALLOWANCE. THE LEARNED CIT(A) HAS DISALLOWED T HE EXPENDITURE IN THE RATIO OF INCOME NOT ELUDED IN THE TOTAL INCOME AND THE INCOME RECEIVED FROM THE FIRM. IN THE ABSENCE OF ANY ARGUMENT REGARDING ANY ERROR IN THIS PART OF THE DE CISION, IT IS HELD THAT HE WAS RIGHT IN DOING SO. (PG.NO.87-93) ITS OUR CONTENTION THAT THE APPELLANT HAD MAJOR POR TION INTEREST FREE FUND AND THAT THE AO HAD NOT ESTABLISHED ANY NEXUS BETWEEN THE FUNDS INVESTE D FOR EARNING THE INTEREST FREE INCOME. FURTHER AS PER CHART THERE IS ONLY FEW FUND WAS INV ESTED IN THE PARTNERSHIP FIRM DURING THE YEAR.(OPENING BALANCE AS ON 01/04/2012 INVESTMENT W AS RS. 13,32,94,946/- AND AS ON 31/03/2013 RS. 20,91,89,203/-). DISALLOWANCE U/S 14 A R.W. RULE 8D - HELD THAT HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. HDF C BANK LTD. 2014 (8) TMI 119 - BOMBAY HIGH COURT HAS LAID DOWN THE PROPOSITION THA T, IF THE ASSESSEE S CAPITAL, PROFITS, RESERVES AND SURPLUS AND CURRENT ACCOUNT DEPOSITS A RE HIGHER THAN THE INVESTMENTS IN TAX FREE SECURITIES, THEN IT WOULD BE PRESUMED THAT THE INVE STMENTS MADE BY THE ASSESSEE WOULD BE OUT OF INTEREST FREE FUNDS AVAILABLE WITH THE APPELLANT . THE APPELLANT FURTHER SUBMITS THAT THE APPELLANT HA S CONTRIBUTED RS. 20.92 CRORES IN THE FOUR PARTNERSHIP FIRMS AS MENTIONED ABOVE, THE APPELLANT HAS RECEIVED INTEREST OF RS. 91,44,657 FROM A FIRM FROM WHOM INPROFIT WAS ALSO RECEIVED, A GAINST THIS THE APPELLANT HAS CLAIMED INTEREST EXPENSES OF RS. 70,89,595 ONLY LEAVING A S URPLUS OF RS. 20,55,062. INTEREST OF RS. 8,32,766 RECEIVED FROM OTHERS HENCE NET INTEREST IN COME SURPLUS IS RS. 28,87,828. THE APPELLANT FURTHER STATES THAT THERE IS NO CONNECTIO N BETWEEN THE FUNDS CONTRIBUTED BY THE APPELLANT AND THE SHARE OF PROFIT RECEIVED FROM THE PARTNERSHIP FIRMS AS MENTIONED IN CHART ABOVE, BEING A PARTNERSHIP FIRM, IS GOVERNED BY THE INDIAN PARTNERSHIP ACT 1932. THERE IS NO PROVISION IN THE SAID ACT AS REGARDS THE CONTRIBUTI ON OF CAPITAL BY THE PARTNERS. IN OTHER WORDS, THE ACT DOES NOT CONTEMPLATE OR STIPULATE CA PITAL CONTRIBUTION BY THE PARTNER AS ONE OF THE CONDITIONS FOR A PARTNERSHIP FIRM. SECTION 4 OF THE INDIAN PARTNERSHIP ACT DEFINES PARTNERSHIP TO MEAN THE RELATION BETWEEN THE PERSON S WHO HAVE AGREED TO SHARE PROFIT OF BUSINESS CARRIED ON BY ALL OR ANY OF THEM ACTING FO R ALL THEREFORE, THE SHARING'OF PROFIT OR LOSSES IS THE DETERMINATIVE FACTOR FOR THE EXISTENC E OF THE PARTNERSHIP FIRM, ALL THE FOUR PARTNERSHIP FIRMS WERE FORMED AS PARTNERSHIP FIRMS VIDE PARTNERSHIP DEEDS ATTACHED ON PAGE NO. AS MENTIONED AT THE LAST OF THE SUBMISSION GIVEN THE REF. OF ENCLOSURES. NOWHERE IN ITA NOS. 2173 & 2174/AHD/2017 A.YS. 2013-14 & 2014-15 9 THE ANY CLAUSES OF THE PARTNERSHIPS DEEDS THAT CONT RIBUTION OF MONEY TOWARDS CAPITAL OR LOAN WERE THE CONDITIONS OF ADMITTANCE OF THE NEW PARTNE RS FOR SHARING OF PROFITS BY THE PARTNERS ALT THE PARTNERS, INCLUDING THE APPELLANT ARE ENTIT LED TO THE PROFIT SHARING AS PER THE PARTNERSHIP DEEDS AND THE SAME WERE NOT DEPENDENT O N CONTRIBUTION OF FUNDS MADE BY THE PARTNERS. CLAUSES OF THE PARTNERSHIP DEEDS DEALS WITH THE, CAPITA/LOANS INTRODUCED BY THE PARTNERS TO THE FIRM, RELEVANT CLAUSES OF THE PARTN ERSHIP DEEDS CLEARLY STATES THAT THE PARTNERS MAY INTRODUCE CAPITAL AND OR GIVE LOAN TO THE FIRM WHICH SHALL CARRY INTEREST @ 9%,12% OR 18% ANNUM OR ANY OTHER RATE HAS BEEN MUTUALLY AGREE D UPON'. THE APPELLANT HAS EARNED RS. 91,44,657/- FROM A TR IM WHOSE PROFIT IS EXEMPT, IN COMPARISON TO INTEREST PAID RS. 70,89,595 AND FURTH ER THE PROFIT SHARING IS NOT DEPENDENT ON CONTRIBUTION OF CAPITAL THIS VIEW HAS BEEN ACCEPTED IN THE CASE ASSTT. COMMISSIONER OF LT. 12(3) VS. M/S. NOVEL ENTERPRISES. (PL. SEE PAGE NO. 5 TO 7 OF THE ENCLOSURES) REGARDING DISALLOWANCE OF RS. 8,92,513/- U/S 14A R.W. RULE 8D (2)(III). WITHOUT PREJUDICE, THE DISALLOWANCE AS PER THIRD LIMB AS CONTAINED IN RULE 8D(2)(III) COULD NOT HAVE BEEN COMPUTED AT RS.8.92,513/- WHEN THE TOTAL EXPENSES INCURRED B Y THE APPELLANT (OTHER THAN THE AMOUNT COVERED BY RULE 8D(2)(I) & 8D(2)(II)) WERE TO THE T UNE OF RS.32,235/-(30000+2235) ONLY. THUS THE AO ERRED IN DISALLOWING WHAT THE APPELLANT HAS NOT EVEN CLAIMED. THE TOTAL EXPENDITURE DEBITED UNDER THE HEAD BANK CHARGES. LE GAL AND CONSULTATION FEES TOTAL OF RS, 32,235/-. THUS, THE APPELLANT HAS CLAIMED ONLY A SU M OF RS.32,235/-. IT IS OUR SUBMISSION THAT CERTAIN EXPENDITURE IS NECESSARY TO RUN THE BUSINES S LIKE BANK CHARGES. LEGAL AND CONSULTATION FEES THEREFORE, THIS EXPENDITURE OF RS .32,235/- CLAIMED WAS JUSTIFIED. THE ASSESSING OFFICER MECHANICALLY APPLIED THE RULE 8D( 2)(III) AND CALCULATED THE DISALLOWANCE OF RS.8,92,513/- WHICH WAS MORE THAN THE TOTAL EXPENDI TURE CLAIMED BY THE ASSESSEE. IN AN ALTERNATIVE SUBMISSION, WE WOULD LIKE TO SUBMIT THA T THE DISALLOWANCE CANNOT BE MORE THAN CLAIMED IN THE PROFIT AND LOSS ACCOUNT ON THIS ISSU E WE RELY ON THE DECISION OF ITAT, DELHI BENCH MANSAROVER INVESTMENT LTD. NEW ... VS DEPARTM ENT OF INCOME TAX ON 7 FEBRUARY, 2013 ; ITAT, DELHI BENCH F IN THE CASE OF RENUKA FINANCIAL SERVICES LTD, IN ITA NO.3467/DEL/2011 DATED 09.08.2012 AND ALSO ON THE D ECISION OF ITAT, 7 ITA NO.2306/DEU 2013 ITA NO.2395/DEL/ 2013 DELHI BENCH 'D' IN JINDA L EQUIPMENT LEASING & CONSULTANCY SERVICES LTD. IN ITA NO.4222/DEL/2012 DATED 12.04.2 013. ITAT DELHI MODERN INFO TECHNOLOGY PVT. LTD. VS ITO; ITA NO.:4294/DEL/2012. HERE IN OUR CASE THE EXPENDITURE INCURRED IS ONLY RS. 32,235/- AND ON THE CONTRARY T HE LD. AO DISALLOWED UNDER RULE 8D(2)(III) RS. 8,92,513/-.THE DISALLOWANCE CANNOT BE MORE THEN THE EXPENDITURE INCURRED BY THE APPELLANT. RULE CANNOT OVER RIDE THE PROVISION OF S EC. 14A. ACE TO SEC 14A DISALLOWANCE FROM THE EXPENDITURE INCURRED THIS MEANS EXPENDITURE TO BE DISALLOWED ONLY UPTO THE EXPENDITURE INCURRED ONLY. IT IS ILLOGICAL TO DISALLOW WHICH HA S NOT BEEN CLAIMED. HENCE AT THE MOST RS.32,235/- CAN BE DISALLOWED UNDER RULE 8D(2)(III) R.W.S 14A. REPRODUCING LAST PARA FROM ITAT DELHI MODERN INFO TECHNOLOGY PVT. LTD. VS ITO; ITANO.:4294/DEL/2012 12. BY APPLYING THE PROPOSITIONS LAID DOWN, TO THE FACTS OF THE CASE WE HOLD THAT THE DISALLOWANCE CANNOT EXCEED THE TOTAL ACTUAL EXPENDI TURE INCURRED AND CLAIMED BY THE ASSESSEE. IN THIS CASE THE TOTAL EXPENDITURE CLAIME D BY THE ASSESSEE IN THE PROFIT AND LOSS ACCOUNT IS RS.45,977/-. THUS THE DISALLOWANCE SHOULD BE RESTRICTED TO THIS AMOUNT. THUS WE ALLOW THIS GROUND INPART. HERS IN OUR CASE THE EXPENDITURE CLAIMED IN PROFIT AND LOSS ACCOUNT IS RS, 32,235/-. HENCETHE DISALLOWANCE CANNOT BE MORE THAN RS. 32.23 5/-, ALSO THESE EXPENDITURES ARE NOT RELATED TO THEINCOME WHICH IS NOT FORMING PART OF T OTAL INCOME. PLS. SEE RECENT CIRCULAR NOTIFICATION NO. SO 1949 (E) [F.NO.370142/7/2016-TPL], DATED 2-6-2016. (SECTION 14A DISALLOWANCE CANT EX CEED TOTAL EXP.; CBDT SPECIFIES NEW METHOD FOR DISALLOWANCE COMPUTATION) IN EXERCISE OF THE POWERS CONFERRED BY SECTION 295 READ WITH SUB-SECTION (2) OF SECTION 14A OF THE INCOME-TAX ACT, 1961 (43 OF 1961), THE CENTR AL GOVERNMENT HEREBY MAKES THE FOLLOWING ITA NOS. 2173 & 2174/AHD/2017 A.YS. 2013-14 & 2014-15 10 RULES FURTHER TO AMEND THE INCOME-TAX RULES, 1962, NAMELY: IN THE INCOME-TAX RULES 1962, IN RULE 8D,-I. FOR SUB-RULE (2), THE FOLLOWING SUB-RUL E SHALL BE SUBSTITUTED, NAMELY:- (2) THE EXPENDITURE IN RELATION TO INCOME WHICH DO ES NOT FORM PART OF THE TOTAL INCOME SHALL BE THE AGGREGATE OF FOLLOWING AMOUNTS, NAMELY:- (I) THE AMOUNT OF EXPENDITURE DIRECTLY RELATING TO INCO ME WHICH DOES NOT FORM PART OF TOTAL INCOME; AND (II) AN AMOUNT EQUAL TO ONE PER CENT OF THE ANNUAL AVERA GE OF THE MONTHLY AVERAGES OF THE OPENING AND CLOSING BALANCES OF THE VALUE OF INVESTMENT, INCOME FROM WHICH DOES NOT OR SHALL NOT FORM PART OF TOTAL INCO ME: PROVIDED THAT THE AMOUNT REFERRED TO IN CLAUSE (I) AND CLAUSE (II) SHALL NOT EXCEED THE TOTAL EXPENDITURE CLAIMED BY THE ASSESSEE. II. SUB-RULE (3) SHALL BE OMITTED. HENCE THERE IS NO NEED TO MAKE ANY DISALLOWANCE. THEREFORE, TOTAL DISALLOWANCE OF RS. 58,55,888/- + 8,92,513/- = 67,48,401/- SHOULD B E DELETED. PL. DELETE THE SAME AND OBLIGE. 6. IT IS THE CASE OF THE ASSESSEE THAT THE ASSESSEE HAS EARNED INTEREST INCOME 99,77,425/- AND INTEREST EXPENDITURE RS. 70,89,595/ - LEAVING SURPLUS OF RS. 28,87,828/-. SINCE INTEREST RECEIPTS ARE EXCESS TH AN THE EXPENDITURE ON INTEREST THERE SHOULD NOT BE ANY DISALLOWANCE IN RULE 14A OF THE ACT IN VIEW OF SEVERAL JUDICIAL PRONOUNCEMENTS INCLUDING SAFAL REALTY PVT. LTD. VS. ACIT PASSED BY THE COORDINATE BENCH IN 2334/AHD/2012 AND 1842/AHD/2013 FOR A.YS. 2009-10 AND 2010-11 RESPECTIVELY. IT IS ALSO SETTLED PRINCIPAL THAT DISALLOWANCE CANNOT EXCEED THE TOTAL EXPENDITURE CLAIMED BY THE ASSESSEE. THE APPELLANT HAD INCURRED AND CLAIMED TOTAL EXPENDITURE OF RS. 32,235/- (RS. 2235 + 30,000). IN THAT VIEW OF THE RATIO LAID DOWN BY THE JUDICIAL PRONOUNCEMENTS AS D ISCUSSED ABOVE, THE CIT(A) CORRECTLY RESTRICTED DISALLOWANCE OF RS. 32,235/- B EING THE TOTAL EXPENDITURE CLAIMED BY THE ASSESSEE DELETING THE REMAINING ADDI TION OF RS. 8,60,278/-. WE, THUS, FIND NO INFIRMITY IN SUCH ORDER SO AS TO WARR ANT INTERFERENCE. HENCE, THE ORDER IS PASSED IN AFFIRMATIVE I.E. IN FAVOUR OF THE ASSE SSEE AND AGAINST THE REVENUE. HENCE, REVENUES APPEAL IS DISMISSED. 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ITA NOS. 2173 & 2174/AHD/2017 A.YS. 2013-14 & 2014-15 11 ITA NO. 2174/AHD/2017 A.Y. 2014-15(REVENUES APPEAL ):- 8. THIS GROUND OF APPEAL IS IDENTICAL TO THAT OF THE ISSUE ALREADY BEEN DEALT WITH BY US IN ITA NO. 2173/AHD/2017 FOR A.Y. 2013-14 AND IN THE ABSENCE OF ANY CHANGED CIRCUMSTANCES THE SAME SHALL APPLY MUTATIS MUTANDIS . HENCE, REVENUES APPEAL IS DISMISSED. 9. IN THE RESULT REVENUES APPEAL IS DISMISSED. [ORDER PRONOUNCED IN THE COURT ON 01-07-2019.] SD/- SD/- ( PRAMOD KUMAR ) ( MADHUMITA ROY ) VICE PRESIDENT JUDICIAL MEMBER AHMEDABAD; DATED 01/07/2019 TANMAY TRUE COPY ()$*+,(+ /COPY OF THE ORDER FORWARDED TO : () ' / BY ORDER - / . (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION : 18-06- 2019&26.06.2019 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER. : 24-06-2019 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S./P.S : 26-06-2019 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT. : 28-06-2019 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER : 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S. : 01-07-2019 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK. : 01-07-2019 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK. : 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER. : 10. DATE OF DESPATCH OF THE ORDER : 1. / THE APPELLANT 2. / / THE RESPONDENT. 3. ' 0 / CONCERNED CIT 4. ' 0 ( ) / THE CIT(A) 5. +12 , / DR, ITAT, 6. 234# / GUARD FILE.