Betex India Limited, Surat V. The Dy.CIT.,Circle-1, Surat

ITA 2280/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89449 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 09-09-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Keywords: Depreciation; Earning of tax free income; Revised return; Unabsorbed depreciation
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD (BEFORE SHRI SHAILENDRA KR. YADAV, J.M. & SHRI ANIL CHATURVEDI, A.M.) I.T. A. NO. 2280/AHD/2011 (ASSESS MENT YEAR: 2008-09) M/S. BETEX INDIA LTD. 504, TRIVIDH CHAMBERS, RING ROAD, SURAT V/S THE D.C.I.T., CIRCLE-1, SURAT (APPELLANT) (RESPONDENT) PAN: AABCB2413L APPELLANT BY : SMT. URVASHI SODHAN, A.R. RESPONDENT BY : SMT. SONIA KUMAR, SR. D.R. ( )/ ORDER DATE OF HEARING : 22-04-2015 DATE OF PRONOUNCEMENT : 15 -05-2015 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF CIT(A)-I, SURAT DATED 28.06.2011 FOR A.Y. 2008-09. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN THE B USINESS OF DYEING AND PRINTING OF SYNTHETIC CLOTH ON JOB WORK BASIS. ASSE SSEE INITIALLY ELECTRONICALLY FILED ITS RETURN OF INCOME FOR A.Y. 2008-09 ON 30.09.2008 DECLARING TOTAL INCOME AT RS. NIL. SUBSEQUENTLY IT FILED REVISED RETURN OF INCOME ON 17.08.2009 SHOWING TOTAL INCOME AT NIL AN D THE REASON FOR ITA NO 2280/ AHD/2011 . A.Y. 2008-0 9 2 REVISING THE RETURN OF INCOME WAS STATED TO BE MIST AKE IN CALCULATION OF DEPRECIATION. THE CASE WAS SELECTED FOR SCRUTINY AN D THEREAFTER THE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) VIDE ORD ER DATED 30.06.2010 AND THE TOTAL INCOME WAS DETERMINED AT RS. NIL AFTE R MAKING CERTAIN DISALLOWANCES/ADDITIONS AND AFTER ADJUSTING THE BRO UGHT FORWARD UNABSORBED DEPRECIATION OF RS. 2,18,61,594/-. AGGRIEVED BY TH E ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO VIDE ORDER DATED 28.06.2011 DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS;- (1) ADDITION ON ACCOUNT OF CLOSING WORK- IN -PROCESS:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LD. CIT(A)-I, SURAT HAS ERRED IN UPHOLDING THE ACTION O F THE LD. DCIT, CIRCLE-1, SURAT, OF MAKING AN ADDITION ON ACCOUNT OF CLOSING WORK-IN- P ROCESS OF RS. 9,16,858/-, EVEN THOUGH THE APPELLANT STATED THAT IT IS ENGAGED IN T HE BUSINESS OF DYEING & PRINTING OF SYNTHETIC CLOTH ON JOB WORK BASIS ONLY. (2) ADDITION U/S 14A OF THE INCOME TAX ACT 1961. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LD. CIT(A)-I, SURAT HAS ERRED IN UPHOLDING THE ACTION O F THE LD. DCIT, CIRCLE-1, SURAT, OF MAKING AN ADDITION U/S. 14A OF THE I.T. ACT 1961 OF RS. 5,18,888/-. 4. 1 ST GROUND IS WITH RESPECT TO ADDITION ON ACCOUNT OF C LOSING WORK IN PROGRESS. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ON PERUSING THE BALANCE SHEET, A.O NOTICED THAT ASSESSEE HAD NOT SHOWN CLOS ING STOCK OF WORK IN PROGRESS. THE ASSESSEE WAS ASKED TO EXPLAIN THE SAM E TO WHICH ASSESSEE INTERALIA SUBMITTED THAT ASSESSEE DOES JOB WORK AND THE RAW MATERIALS ARE NOT OWNED BY THE ASSESSEE BUT BELONG TO THE PARTY WHO G IVES THE WORK FOR PROCESSING. IT WAS FURTHER SUBMITTED THAT THE PROCE SSING CYCLE WAS 2 TO 3 DAYS AND THEREFORE THE COLORS, CHEMICALS AND LABOUR USED FOR THE GREY WHICH ARE ON MACHINES AT THE YEAR END WAS VERY INSIGNIFIC ANT. IT WAS FURTHER ITA NO 2280/ AHD/2011 . A.Y. 2008-0 9 3 SUBMITTED THAT THE ASSESSEE WAS FOLLOWING THE SAME METHOD CONSISTENTLY. THE SUBMISSIONS OF THE ASSESSEE WAS NOT FOUND ACCEP TABLE TO THE A.O AS HE WAS OF THE VIEW THAT VALUATION OF CLOSING STOCK WAS AN IMPORTANT COMPONENT AND UNLESS THE CORRECT VALUE OF STOCK AT THE YEAR E ND IS CREDITED TO THE TRADING ACCOUNT, A DISTORTED PICTURE AND THE TRADING RESULT S WILL EMERGE. HE THEREAFTER TAKING INTO CONSIDERATION THE TOTAL CLOTH PROCESSED BY THE ASSESSEE AND ON THE BASIS OF 26 WORKING DAYS PER MONTH, WORKED OUT THE AVERAGE OF PROCESS OF CLOTH PER DAY AND AFTER CONSIDERING THE PROCESSI NG CYCLE TO BE OF 5 DAYS, WORKED OUT THE CLOSING STOCK OF WORK IN PROGRESS AN D MADE ADDITION OF RS. 2,47,678/-. AGGRIEVED BY THE ORDER OF A.O., ASSESSE E CARRIED THE MATTER BEFORE LD. CIT(A) WHO UPHELD THE ORDER OF A.O BY HO LDING AS UNDER:- 7.DECISION: THE ASSESSING OFFICER HAS GIVEN SOUND REASONS FOR M AKING THIS ADDITION. IN FACT, OUT OF VALUE OF CLOSING STOCK WORKED OUT AT RS.9,16,858/-. A.O. HAS GIVEN CREDIT FOR OPENING STOCK OF RS.6,69,180/- WHICH WAS ADDED LAST YEAR AS CLOSING WIP. THE ACTION OF THE A.O'. LAST YEAR WAS UPHELD BY CIT(A). ACCORDINGLY, A.O. F OLLOWED THIS PRACTICE THIS YEAR ALSO. IN FACT, A.O. HAS BEEN VERY REASONABLE IN GIVING CR EDIT OF ADDITION MADE LAST YEAR. THE APPELLANT HAS NOT LED ANY CREDIBLE ARGUMENT WHICH W OULD CALL FOR INTERFERENCE WITH A.O.'S ORDER. IN VIEW OF THE ABOVE, ACTION OF THE A.O. IS HELD CORRECT AND ADDITION OF RS.2,47,678/- (RS.9,16,858-RS.6,69,180) IS UPHELD. THUS, THIS GROUND OF APPEAL IS DISMISSED. 6. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE IS N OW IN APPEAL BEFORE US. 7. BEFORE US, AT THE OUTSET THE LD. A.R. SUBMITTED THA T IDENTICAL ISSUE AROSE IN THE CASE OF ASSESSEE IN A.Y. 05-06 AND WHEN THE MATTER WAS CARRIED BEFORE HONBLE TRIBUNAL, HONBLE ITAT AFTER CONSIDERING TH E VARIOUS DECISIONS CITED IN THE ORDER DECIDED THE ISSUE IN FAVOUR OF T HE ASSESSEE. SHE ALSO PLACED ON RECORD THE COPY OF THE AFORESAID DECISION IN ITA NO. 799/AHD/2009 ORDER DATED 22.07.2011. SHE THEREFORE SUBMITTED THAT SINCE THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE YEAR UNDER APPEAL ARE IDENTICAL ITA NO 2280/ AHD/2011 . A.Y. 2008-0 9 4 TO THAT OF A.Y. 05-06 AND SINCE THE ISSUE HAS BEEN DECIDED IN EARLIER YEAR IN ASSESSEES FAVOUR, THE GROUND BE DECIDED IN FAVOUR OF THE ASSESSEE. LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF A.O A ND LD. CIT(A). 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT AN IDENTICAL ISSUE OF VALUATION OF CLOSIN G STOCK OF WORK IN PROGRESS AROSE IN THE ASSESSEES OWN CASE IN A.Y. 05-06 BEFO RE THE CO-ORDINATE BENCH OF TRIBUNAL. THE CO-ORDINATE BENCH OF TRIBUNA L AFTER RELYING ON THE VARIOUS DECISIONS CITED IN THE ORDER, DECIDED THE I SSUE IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER:- 5.3 INDISPUTABLY, THE ASSESSEE IS DOING THE JOB WOR K AND THE GREY CLOTH LYING IN THE PREMISES OR IN THE MACHINE AT THE END OF ACCOUNTING YEAR BELONGS TO OTHER PARTIES. THE ASSESSEE CONSISTENTLY FOLLOWING THE METHOD OF VALUA TION RIGHT SINCE ITS INCEPTION AND HAS BEEN ACCEPTED BY THE DEPARTMENT. THE ASSESSEE NEVER REFLECTED ANY OPENING STOCK OF WORK IN PROGRESS NOR CLOSING STOCK THEREOF. THE ITAT IN THE CASE OF GAGAN SILK MILLS. P. LTD. (SUPRA) ALLOWED A SIMILAR CLAIM OF THE ASSESSEE WHI LE HOLDING THAT THE A.O WAS NOT CORRECT IN LAW IN VALUING THE WORK IN PROGRESS IN R ESPECT OF VARIOUS EXPENSES INCURRED BY THE ASSESSEE RELATING TO FABRIC IN PROCESS OF DYEIN G AND PRINTING. IN THE LIGHT OF CONSISTENT VIEW TAKEN IN THE AFORESAID DECISIONS BHAGWATI SYNT EX P. LTD. (SUPRA), VARDHAMAN FABRICS P. LTD. (SUPRA) AND M/S. BAJRANG PROCESSORS P. LTD. (SUPRA) ON IDENTICAL FACTS AND CIRCUMSTANCES, WE HAVE NO ALTERNATIVE BUT TO AL LOW THE CLAIM OF THE ASSESSEE IN THE INSTANT CASE. THEREFORE, GROUND NO. 1 IN THE APPEAL IS ALLOWED. 9. BEFORE US, REVENUE HAS NOT POINTED OUT ANY DISTINGU ISHING FEATURE IN THE CASE YEAR UNDER APPEAL AND THAT OF A.Y. 05-06 NOR HAS PL ACED ON RECORD ANY CONTRARY BINDING DECISION IN ITS SUPPORT. IN VIEW O F THE AFORESAID FACTS AND RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDIN ATE BENCH OF TRIBUNAL IN THE CASE OF ASSESSEE FOR A.Y. 05-06 AND FOR SIMILAR REASONS, WE ARE OF THE VIEW THAT NO ADDITION CAN BE MADE IN THE PRESENT CA SE. WE THUS ALLOW THIS GROUND OF ASSESSEE. 10. 2 ND GROUND IS WITH RESPECT TO ADDITION U/S. 14A OF THE ACT. ITA NO 2280/ AHD/2011 . A.Y. 2008-0 9 5 11. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A.O N OTICED THAT ASSESSEE HAS EARNED EXEMPT INCOME IN THE FORM OF DIVIDEND INCOME OF RS. 2,96,200/- AND LONG TERM CAPITAL GAIN ON LISTED SECURITIES OF RS. 1,80,792/- BUT NO EXPENDITURE IN RELATION TO THE EXEMPT INCOME WAS SH OWN BY THE ASSESSEE. THE ASSESSEE WAS THEREFORE ASKED TO SHOW CAUSE AS T O WHY EXPENDITURE ON EARNING THE EXEMPT INCOME NOT BE DISALLOWED TO WHIC H ASSESSEE INTERALIA SUBMITTED THAT IT HAS INCURRED NO EXPENDITURE FOR E ARNING EXEMPT INCOME. THE SUBMISSION OF THE ASSESSEE WAS NOT FOUND ACCEPT ABLE TO THE A.O. HE THEREAFTER ON THE BASIS OF METHOD PRESCRIBED UNDER RULE 8D, WORKED OUT THE DISALLOWANCE OF RS. 5,18,888/- U/S. 14A. 12. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), ASS ESSEE IS NOW IN APPEAL BEFORE US. 13. BEFORE US, LD. A.R. REITERATED THE SUBMISSIONS MADE BEFORE A.O AND LD. CIT(A) AND FURTHER SUBMITTED THAT THE INVESTMENTS H AVE BEEN MADE FROM INTEREST FREE FUNDS WHICH ARE AVAILABLE IN THE FORM OF CAPITAL AND RESERVES AND NO PART OF INTEREST BEARING FUNDS HAVE BEEN UTI LIZED FOR THE PURPOSE OF MAKING INVESTMENT WHICH GENERATED EXEMPT INCOME. SH E FURTHER SUBMITTED THAT THE INTEREST FREE FUNDS AVAILABLE IN THE FORM OF SHARE CAPITAL AND RESERVES AND SURPLUS WERE FAR IN EXCESS OF THE INVE STMENTS AND THEREFORE IT IS TO BE PRESUMED THAT THE INVESTMENTS HAVE BEEN MA DE OUT OF INTEREST FREE FUNDS AND NO DISALLOWANCE ON ACCOUNT OF INTEREST WA S CALLED FOR. FOR THE AFORESAID PROPOSITION SHE ALSO PLACED RELIANCE ON T HE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF TORRENT POWER 363 ITR 474. WITH RESPECT TO THE DISALLOWANCE ON ACCOUNT OF ADMINISTRATIVE EX PENSES, SHE SUBMITTED ITA NO 2280/ AHD/2011 . A.Y. 2008-0 9 6 THAT THE DISALLOWANCE OF RS. 61,497/- AS WORKED OUT BY A.O AS PER RULE 8D WAS ON A HIGHER SIDE AND THEREFORE A REASONABLE DIS ALLOWANCE AS CONSIDERED APPROPRIATE BE MADE BY THE HONBLE BENCH AND FOR WH ICH SHE ALSO PLACED RELIANCE ON THE DECISION BY THE CO-ORDINATE BENCH I N THE CASE OF CHUDGAR RANCHODLAL JETHALAL ( ITA NO. 245/AHD/2013) ORDER D ATED 27.03.2015. LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF A.O A ND LD. CIT(A) AND FURTHER SUBMITTED THAT PROVISIONS OF RULE 8D ARE AP PLICABLE FROM ASSESSMENT YEAR 08-09 AND THEREFORE THE A.O WAS FULLY JUSTIFIE D IN WORKING OUT THE DISALLOWANCE U/S. 14A. SHE THUS SUPPORTED THE ORDER OF A.O AND LD. CIT(A). 14. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO DISALL OWANCE U/S. 14A. IT IS AN UNDISPUTED FACT THAT THE YEAR UNDER CONSIDERATION I S A.Y. 08-09 AND THEREFORE IN THE LIGHT OF THE RATIO LAID DOWN BY HONBLE BOMB AY HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD. VS. DCIT (2010) 328 ITR 81 (BOM), PROVISIONS OF RULE 8D, WHICH PRESCRIBES THE METHOD FOR DETERMINING THE EXPENDITURE INCURRED IN RELATION TO THE INCOME WHIC H DOES NOT FORM PART OF THE TOTAL INCOME BEING APPLICABLE FROM A.Y. 08-09 I S APPLICABLE TO THE YEAR UNDER CONSIDERATION. THE METHOD FOR DETERMINING THE EXPENDITURE IN RELATION TO EXEMPT INCOME UNDER RULE 8D WHICH IS TO BE DISAL LOWED U/S. 14A HAS THREE COMPONENTS. THE FIRST COMPONENT OF RULE 8D IS THE AMOUNT OF EXPENDITURE DIRECTLY RELATING TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME. THE SECOND COMPONENT OF RULE 8D BASICALLY A PPORTIONS THE AMOUNT OF EXPENDITURE OF INTEREST [OTHER THAN THE INTEREST INCLUDED IN CLAUSE (I)] INCURRED DURING THE PREVIOUS YEAR IN THE RATIO OF T HE AVERAGE VALUE OF INVESTMENTS THE INCOME FROM WHICH DOES NOT FORM PAR T OF TOTAL INCOME, TO THE AVERAGE OF TOTAL ASSETS. THE THIRD COMPONENT OF RULE 8D IS AN ARTIFICIAL ITA NO 2280/ AHD/2011 . A.Y. 2008-0 9 7 FIGURE OF ONE HALF PERCENT OF THE AVERAGE VALUE OF THE INVESTMENTS AS APPEARING IN THE BALANCE SHEETS ON THE FIRST AND LA ST DAY OF PREVIOUS YEAR. THE AGGREGATE OF THE AFORESAID 3 COMPONENTS WOULD C ONSTITUTE THE EXPENDITURE IN RELATION TO EXEMPT INCOME AND IT IS THIS AMOUNT OF EXPENDITURE WHICH WOULD BE DISALLOWED U/S. 14A OF T HE ACT. IN THE PRESENT CASE, A.O HAS WORKED OUT THE AGGREGATE DISALLOWANCE BY FOLLOWING THE FORMULA PRESCRIBED UNDER RULE 8D AT RS. 5,18,888/- WHICH COMPRISES OF FIRST COMPONENT NAMELY EXPENDITURE DIRECTLY RELATED TO EX EMPT INCOME AT RS. NIL, INDIRECT INTEREST EXPENSES ON THE BASIS OF SECOND C OMPONENT OF RULE 8D AT RS. 4,57,391/- AND THE THIRD COMPONENT (ON THE BASI S OF % OF AVERAGE INVESTMENTS) AT RS. 61,497/-. AS FAR AS FIRST COMPO NENT OF RULE 8D WITH RESPECT TO DIRECT EXPENDITURE IS CONCERNED, THERE I S NO DISPUTE BETWEEN THE PARTIES ABOUT THE AMOUNT OF RS. NIL CONSIDERED BY A .O. AS FAR AS SECOND COMPONENT OF DISALLOWANCE ON ACCOUNT OF INTEREST OF RS. 4,57,391/- IS CONCERNED, IT IS ASSESSEES SUBMISSION THAT ITS INT EREST FREE FUNDS IN THE FORM OF SHARE CAPITAL AND RESERVES ARE IN EXCESS OF INVE STMENTS AND APPLYING THE RATIO OF THE DECISION OF TORRENT POWER (SUPRA) AND OTHER DECISIONS, NO DISALLOWANCE ON ACCOUNT OF INTEREST IS CALLED FOR. ON PERUSING THE AUDITED BALANCE SHEET AS AT 31.03.2008 PLACED ON RECORD, WE FIND THAT THE INTEREST FREE FUNDS IN THE FORM OF SHARE CAPITAL AND RESERVE S AND SURPLUS ARE TO THE EXTENT OF RS. 3.90 CRORES AS AGAINST THE INVESTMEN TS OF RS. 1.59 CRORES MEANING THEREBY THAT THE INTEREST FREE FUNDS ARE FA R IN EXCESS OF THE INVESTMENTS. THE AFORESAID FACTS HAVE NOT BEEN DISP UTED BY THE REVENUE. ON THE ISSUE OF DISALLOWANCE ON ACCOUNT OF INTEREST EX PENDITURE AS PER RULE 8D, WE FIND THAT THE HONBLE GUJARAT HIGH COURT IN THE CASE OF TORRENT POWER (SUPRA) HAS HELD WHEN THE ASSESSEE HAD SUFFICIENT F UNDS FOR MAKING THE INVESTMENTS AND IT HAD NOT USED BORROWED FUNDS FOR SUCH PURPOSE, A.O WAS ITA NO 2280/ AHD/2011 . A.Y. 2008-0 9 8 NOT JUSTIFIED IN DISALLOWING INTEREST EXPENSES FOR EARNING EXEMPT INCOME. CONSIDERING THE FACTS OF THE PRESENT CASE WITH RESP ECT TO SECOND COMPONENT OF RULE 8D AND IN THE LIGHT OF THE AFORESAID DECISI ON OF HONBLE GUJARAT HIGH COURT, WE ARE OF THE VIEW THAT IN THE PRESENT CASE NO DISALLOWANCE ON ACCOUNT OF INTEREST CAN BE MADE. WITH RESPECT TO TH E DISALLOWANCE ON ACCOUNT OF ADMINISTRATIVE EXPENSES I.E. THIRD COMPONENT IS CONCERNED, WE FIND THAT THE SAME HAS BEEN WORKED OUT AT RS. 61,497/- ON THE BASIS OF THE AVERAGE VALUE OF INVESTMENTS. BEFORE US, LD. A.R. HAS RELIE D ON THE DECISION IN THE CASE OF CHUDGDAR RANCHODLAL JETHALAL (SUPRA). WE HO WEVER FIND THAT THE RATIO OF THE AFORESAID DECISION WOULD NOT BE FULLY APPLICABLE TO THE FACTS OF THE PRESENT CASE BECAUSE IN THAT CASE, THE DISALLOW ANCE U/S. 14A MADE BY APPLYING THE FORMULA PRESCRIBED UNDER RULE 8D WAS M UCH HIGHER THAN DIVIDEND INCOME EARNED BY THE ASSESSEE AND THEREFOR E THE TRIBUNAL AFTER RELYING ON THE DECISION IN THE CASE OF JOINT INVEST MENT PVT. LTD. VS. CIT CITED THEREIN AND ON THE BASIS OF THE ALTERNATE SUBMISSIO N OF THE LD. A.R. TO MAKE A REASONABLE DISALLOWANCE U/S. 14A MADE THE DISALLOWA NCE OF RS. 5,000/-. IN THE PRESENT CASE, OF THE TOTAL DISALLOWANCE U/S. 14 A OF RS. 5,18,888/- THAT HAS BEEN WORKED OUT BY THE A.O AND FROM WHICH AFTER DEL ETING THE ADDITION ON ACCOUNT OF INTEREST OF RS. 4,57,391/-(BEING SECOND COMPONENT OF RULE 8D) AS HELD BY US HEREINABOVE, THE ADDITION ON ACCOUNT OF THIRD COMPONENT OF RULE 8D REMAINS AT RS. 61,497/- AND THUS THE TOTAL REVIS ED TOTAL DISALLOWANCE U/S. 14A AS WORKED OUT, IS NOT HIGHER THAN THE EXEMPT IN COME EARNED BY THE ASSESSEE. FURTHER, BEFORE US NO DETAILS OF THE TOTA L INVESTMENTS MADE, THE PERIOD SINCE THE INVESTMENTS ARE HELD BY THE ASSESS EE, THE NUMBER OF TRANSACTIONS IN THOSE INVESTMENTS ETC HAS BEEN PLAC ED ON RECORD TO SUPPORT ITS CONTENTION OF NON INCURRING OF ADMINISTRATIVE EXPEN SES. FURTHER ASSESSEE HAS ALSO NOT PLACED ANY MATERIAL ON RECORD TO SUPPORT I TS CONTENTION OF NON ITA NO 2280/ AHD/2011 . A.Y. 2008-0 9 9 INCURRING OF ADMINISTRATIVE EXPENSES FOR EARNING OF EXEMPT INCOME. IN VIEW OF THE AFORESAID AND CONSIDERING THE TOTALITY OF TH E FACTS, WE ARE OF THE VIEW THAT NO INTERFERENCE ON ACCOUNT OF DISALLOWANCE OF ADMINISTRATIVE EXPENSES (BEING THE THIRD COMPONENT OF RULE 8D) WHICH HAS BE EN WORKED OUT AT RS. 61,497/- BY THE A.O IS CALLED FOR. IN THE RESULT TH IS GROUND OF ASSESSEE IS PARTLY ALLOWED. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 15 - 05 - 2015. SD/- SD/- (SHAILENDRA KR. YADAV) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT ,AHMEDABAD