SAMYAK CONSULTANCY P.LTD, MUMBAI V. ITO WD 9(3)(1), MUMBAI

ITA 2303/MUM/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2915 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 06-05-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 22-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KAILASH GAIKWAD
• Assessee Lawyers: K P KAPADIA
• Keywords: Business income; Earning of tax free income
• Section: 143(3); 14A; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E, MUMBAI , ,, , , ,, , BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. : 2303/MUM /2011 (ASSESSMENT YEAR: 2007-08) SAMYAK CONSULTANCY PRIVATE LIMITED, 304-B MARRY VILLA, JAWAHAR NAGAR, GAJANAN COLONY RD., GOREGAON (WEST), MUMBAI -400 062 .: PAN: AAECS 8480 R VS INCOME-TAX-OFFICER WD 9(3)(1), AAYAKAR BHAVAN , MUMBAI -400 020 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K P KAPADIA RESPONDENT BY : SHRI KAILASH GAIKWAD & ' () /DATE OF HEARING : 11-05-2016 & ' () / DATE OF PRONOUNCEMENT : 24-06-2016 ORDER , ,, , : :: : PER PAWAN SINGH, (JUDICIAL MEMBER) : PRESENT APPEAL FILED BY THE ASSESSEE AGAINST THE OR DER OF THE CIT(A)-20, MUMBAI DATED 10 TH JANUARY, 2011 IN RESPECT OF AY 2007-08. THE ASSESSEE HAS RAISED BASICALLY TWO GROU NDS OF APPEAL IN THE PRESENT CASE. I) THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE AS SESSING OFFICER TO TREAT THE SHORT-TERM-CAPITAL-GAIN (STCG) AS BUSINESS INCOME. 2 SAMYAK CONSULTANCY PRIVATE LIMITED ITA 2303/MUM/2011 II) THE CIT(A) ERRED IN APPLYING PROVISIONS OF SECTION 14A R.W. RULE 8D OF THE I.T. ACT WHEN RULE ITSELF WAS N OTIFIED PROSPECTIVELY W.E.F. 24.03.2008. THE CIT(A) CONFIRM ING THE DISALLOWANCE OF RS.75,685/- UNDER SECTION 14A R .W. RULE 8D EXEMPT INCOME EARNED BY WAY OF DIVIDEND AMOUNTED TO RS.54,760/-. 2. THE BRIEF FACTS OF THE CASE ARE THAT, THE ASSESS EE WHO IS SUB- BROKER OF M/S SHAREKHAN FILED ITS RETURN OF INCOME ON 27.10.2007 DECLARING TOTAL INCOME OF RS. 15,96,581/-. THE RETU RN OF INCOME WAS SELECTED FOR SCRUTINY WHILE FRAMING THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT BY THE AO WHO MADE DISALLOWANCE O F RS.75,685/- UNDER SECTION 14A AND FURTHER TREATED STCG AS A BUS INESS INCOME, BY THE ASSESSMENT ORDER DATED 20 TH NOVEMBER, 2009. AGGRIEVED BY THE ORDER OF THE ASSESSMENT, ASSESSEE FILED AN APPE AL BEFORE THE FIRST APPELLATE AUTHORITY WITHOUT ANY SUCCESS. CONSEQUENT UPON THE ASSESSEE FILED PRESENT APPEAL BEFORE US. 3. FIRST GROUND OF APPEAL FOR OUR CONSIDERATION IS TREATMENT OF STCG EARNED BY THE ASSESSEE AS A BUSINESS INCOME. T HE LD. AR OF THE ASSESSEE ARGUED THAT ASSESSEE IS SUB-BROKER OF M/S SHAREKHAN IS MEMBER OF MSE & BSE. THE ASSESSEE IS A TRADER IN DE RIVATIVE COMMODITY AND INVESTMENT IN SHARES. ON THE BASIS O F THE NUMBER OF TRANSACTIONS, PERIOD OF HOLDING AND PERIOD OF INVES TMENT THE ASSESSEE HAS SHOWN LTCG & STCG. LTCG WAS ACCEPTED BY THE AO, HOWEVER, STCG WAS TREATED AS A BUSINESS INCOME BY HIM. THE AR OF THE ASSESSEE FURTHER RELIED UPON THE CBDT CIRCULAR NO.4 OF 2007 DATED 15 TH JUNE, 2007. THERE WAS NO MOTIVE FOR TRADING IN SHA RE, SHARE WAS HELD AS ASSETS, AND ACCORDINGLY THE GAIN DERIVED BY SUCH ACTIVITY IS CHARGEABLE UNDER CAPITAL GAIN. 4. ON THE OTHER HAND, LD. DR FOR THE REVENUE ARGUED THAT FOR CONSIDERING THE FREQUENCY IN THE TRANSACTIONS, THE CASE OF THE 3 SAMYAK CONSULTANCY PRIVATE LIMITED ITA 2303/MUM/2011 ASSESSEE CLEARLY FALLS UNDER SECTION 28 R.W.S. 2(13 ) OF THE IT ACT. THE ASSESSEE WAS, IN FACT, ENGAGED IN THE BUSINESS OF S ALE AND PURCHASE OF SHARE AS WAS CORRECTLY APPRECIATED BY THE AO, WH O TREATED THE PROFIT OF SUCH SHARE TRADING ACTIVITY AS A BUSINESS INCOME OF THE ASSESSEE. 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF THE PARTIES AND PERUSED AVAILABLE MATERIAL ON RECORD. AFTER PERUSAL OF THE P&L ACCOUNT AND COMPUTATION OF INCOME, THE AO OBSERVED THAT, ASSESSEE HAS SHOWN STCG OF RS.5,36,042/- AND THE ASSESSEE WA S SHOW CAUSED AS TO WHY THIS INCOME SHOULD NOT BE TREATED AS BUSINESS INCOME. THE ASSESSEE, VIDE HIS REPLY DATED 09.11.20 09, CONTENDED THAT THE ASSESSEE HAS CLASSIFIED THE INCOME AS A BU SINESS INCOME AS WELL AS SPECULATION INCOME WHEREVER THE SAME IS ENT ERED WITH THE SAID INTENTION. THIS ALSO REFLECTS THAT THE ASSESSE E IS VERY MUCH ALERT AND CONSCIOUS FOR GIVING TREATMENT OF TRANSACTION W HILE ACCOUNTING. THE DETAILS OF SUCH TRANSACTIONS ARE GIVEN BELOW:- NATURE OF TRANSACTION NO. OF TRANSACTIONS DURING THE YEAR SHORT TERM BUY 228 SALE 195 LONG TERM BUY 26 SALE 13 DERIVATIVE BUY 616 SALE 702 INTRADAY 37 THE ASSESSEE HAS FURTHER SUBMITTED THAT THERE HAVE BEEN REASONABLE HOLDING PERIOD AFTER THE PURCHASE OF SHARES AND SAL ES FROM THE INVESTMENT PORTFOLIO:- 4 SAMYAK CONSULTANCY PRIVATE LIMITED ITA 2303/MUM/2011 SR.NO. NO. OF INSTANCES HOLDING PERIOD 1 55 INSTANCES UPTO 1 MONTH 2 40 INSTANCES 1 MONTH TO 2 MONTHS 3 61 INSTANCES 2 MONTHS TO 3 MONTHS 4 36 INSTANCES 3 MONTHS TO 4 MONTHS 5 21 INSTANCES 4 MONTHS TO 5 MONTHS 6 22 INSTANCES 5 MONTHS TO 6 MONTHS 7 78 INSTANCES 6 MONTHS TO 12 MONTHS THE ASSESSEE ALSO RELIED UPON THE CIRCULAR NO.4 OF 2007. THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY THE AO AND THE AO CONCLUDED FROM THE STATEMENT OF STCG, IT IS SEEN TH AT THE MAJORITY OF SHARES WERE SOLD WITHIN SHORT PERIOD OF DATE OF PUR CHASE. IT CLEARLY INDICATES THAT ASSESSEE HAS INTENTION OF CHURNING T HE SHARES WITH THE SOLE OBJECTIVE OF EARNING THE PROFIT. THE TOTAL TRA NSACTIONS MADE BY THE ASSESSEE ARE 423 DURING THE YEAR. THUS, THE NUM BERS OF FREQUENCY IS VERY HIGH. SUCH HIGH NUMBER OF FREQUEN CY CANNOT BE CONSIDERED AS INVESTMENT. THE AO FURTHER CONCLUDED THAT, THE INTENTION OF THE ASSESSEE IS THE PRIME CRITERIA FOR DECIDING THE NATURE OF TRANSACTION. FROM THE FACTS AVAILABLE WITH THE AO, HE CONCLUDED THAT, PRIME INTENTION OF THE ASSESSEE WAS TO TRADE IN SHARES. WHEREFROM THE ASSESSEE HAD OPPORTUNITY TO EARN THE PROFIT, THE ASSESSEE SOLD THE SHARE AND BUY THE SAME SHARE AT T HE LOWER RATE. THUS, THE MOTIVE OF ASSESSEE WAS TO EARN MAXIMUM PR OFIT AND THE ENTIRE ACTIVITY OF THE ASSESSEE WAS CONSIDERED AS B USINESS OF TRADING IN SHARES. 6. LD. CIT(A) WHILE CONSIDERING THIS GROUND HAS OBS ERVED THAT, ASSESSEE IS A SUB-BROKER OF M/S SHERKHAN. THE ASSES SEE OFFERED TO TAX THE STCG ON SHARE AT RS.5,63,042/-. THE ASSESSE E EXPLAINED THE TRANSACTION ON WHICH THE CAPITAL GAIN DECLARED ARE IN RELATION TO THESE SALES OF SHARES TREATED AS INVESTMENT IN ITS BOOK. HOWEVER, THE 5 SAMYAK CONSULTANCY PRIVATE LIMITED ITA 2303/MUM/2011 BALANCE-SHEET DOES NOT SHOW ANY INVENTORY OR STOCK- IN-TRADE OF SHARE. THE ASSESSEE HAS NOT BEEN ENGAGED IN THE TRA DING ACTIVITY FROM THE LAST 2 YEARS AND WAS ONLY A FRANCHISE OF (SHERK HAN) ALL THESE SHARES WERE PURCHASED ON INVESTMENT ACCOUNT THROU GH DEMAT ACCOUNT. THE LD. CIT(A) FURTHER CONSIDERED THE DETA IL FURNISHED BY THE ASSESSEE. THESE DETAILS SO FURNISHED BY THE ASSESSE E SHOWS THAT THE ASSESSEE ENTERED INTO MULTIPLE SHARE TRANSACTION AN D THE SAME SHARE ON THE CURRENT YEAR. AFTER CONSIDERING THE FREQUENC IES OF PURCHASE AND SALE, POSSESSION / PERIOD OF HOLDING, IT WAS CO NCLUDED THAT ASSESSEE IS A TRADER IN SHARE. THE ASSESSEE IS ENGA GED IN MULTIPLE TRANSACTIONS IN DIFFERENT SHARE AND IN LARGE VOLUME S. THE CIT(A) CITED THAT THE ASSESSEE IS ENGAGED IN TRADING IN LARGE VO LUMES, ALSO INVOLVING IN INTRA-DAY TRANSACTION AS WELL AS MULTI PLE TRANSACTION IN THE SAME SHARE. THE CIT(A) HAD CITED INSTANCES TOWA RDS THIS AS ASSESSEE PURCHASED 950 SHARES OF CENTURION BANK ON ACCOUNT OF FORWARD TRADE DURING 10 TH JANUARY, 2006 TO 27 TH JANUARY, 2006 AND THE ASSESSEE SOLD ALL OF THEM ON TWO DATES, THAT IS ON 10.04.2006 AND 10.05.2006. THE ASSESSEE AGAIN BOUGHT 2000 SHARES O N 20.09.2006 AND ON 01.11.2006 AND SOLD THEM ON 13.02.2007 AND 0 7.03.2007. SIMILAR WAS THE POSITION IN RESPECT OF CORAL LABORA TORIES. THE ASSESSEE HAD 45 TRANSACTIONS OF PURCHASES DURING TH E PERIOD FROM 23.08.2005 TO 03.04.2006 AND 43 TRANSACTIONS OF SAL E DURING THE PERIOD FROM 04.04.2006 TO 09.03.2007 WITH PURCHASES AGAIN IN BETWEEN ON 07.04.2006 AND 11.05.2006 WHICH SHOWS TH AT THE VOLUME AND THE FREQUENCY OF TRANSACTIONS COUPLED WITH SHOR TER PERIOD OF HOLDING ONLY FOR 3 MONTHS, EVIDENCED THAT ASSESSEE HAD PROFIT MOTIVE ELEMENT WHILE TRANSACTING WITH SUCH SHARES. 7. IN CIRCULAR NO.4 OF 2007 DATED 15.06.2007, THE C BDT MADE DISTINCTION BETWEEN SHAREHOLDER AND STOCK-IN-TRADE AND SHARE 6 SAMYAK CONSULTANCY PRIVATE LIMITED ITA 2303/MUM/2011 HOLDING AS INVESTMENT IN PARA 8, THREE CONDITIONS W ERE ENUMERATED, WHICH ARE REPRODUCED HERE IN BELOW:- (I) WHERE A COMPANY PURCHASE AND SELLS SHARES, IT M UST BE SHOWN THAT THEY WERE HELD AS STOCK-IN-TRADE AND THA T EXISTENCE OF THE POWER TO PURCHASE AND SELL SHARES IN THE MEMORANDUM OF ASSOCIATION IS NOT DECISIVE OF THE NA TURE OF TRANSACTIONS; (II) THE SUBSTANTIAL NATURE OF TRANSACTIONS, THE MA NNER OF MAINTAINING BOOKS OF ACCOUNTS, THE MAGNITUDE OF PUR CHASE AND SALES AND THE RATIO BETWEEN PURCHASE AND SALES AND THE HOLDING WOULD FURNISH A GOOD GUIDE TO DETERMINE THE NATURE OF TRANSACTIONS; (III) ORDINARILY THE PURCHASE AND SALE OF SHARES WI TH THE MOTIVE OF EARNING A PROFIT, WOULD RESULT IN THE TRANSACTIO N BEING IN THE NATURE OF TRADE/ADVENTURE IN THE NATURE OF TRAD E; BUT WHERE THE OBJECT OF THE INVESTMENT IN SHARES OF A C OMPANY IS TO DERIVE INCOME BY WAY OF DIVIDEND ETC. THEN TH E PROFITS ACCRUING BY CHANGE IN SUCH INVESTMENT (BY SALE OF S HARES) WILL YIELD CAPITAL GAIN AND NOT REVENUE RECEIPT. THE WORD BUSINESS IS ONE OF LARGE AND INDEFINITE IMPORT AND CONNOTES SOMETHING WHICH OCCUPIES THE TIME, ATTENTI ON AND LABOUR OF A PERSON NORMALLY WITH THE OBJECT OF MAKING PROFIT. T HE WORD IS OF WIDE IMPORT, THE UNDERLYING IDEA BEING OF CONTINUOUS EXE RCISE OF AN ACTIVITY. THE DEFINITION IS INFACT NOT EXHAUSTIVE, AND IS TO BE CONSTRUED IN A BROAD SENSE [REFER, INTER ALIA , VISHWANATH JHUNJHUNWALA V. STATE OF U.P ., (2004) 4 SCC 437; CIT V. A. DHARMA REDDY (1969) 73 ITR 751, 755, (SC); VENKATARAMAN AIYAR, J., SPEAKING FOR THE COURT IN MAZAGAON DOCK LTD. V. CIT(A) [(1958) 34 ITR 368, 376 (SC); AND NATIONAL MUTUAL LIFE ASSOCIATION OF AUSTRALASIA LTD ., (1993) 1 ITR 350 (BOM)]. THE WORD MEANS ALMOST ANYTHING WHICH IS AN OCCUPATION OR DUTY REQUIRING A TTENTION AS 7 SAMYAK CONSULTANCY PRIVATE LIMITED ITA 2303/MUM/2011 DISTINGUISHED FROM SPORT OR PLEASURE AND IS USED IN THE SENSE OF AN OCCUPATION CONTINUOUSLY CARRIED ON FOR THE PURPOSE OF PROFIT [ ROGERS PYATT SHELLAC & CO. V. SECRETARY OF STATE , AIR 1925 CAL 34 = 1 TC 363]. THE QUESTION WHETHER PARTICULAR SOURCE OF INCOME IS BUSINESS OR INVESTMENT MUST BE DECIDED ACCORDING TO THE ORDINAR Y NOTIONS OF WHAT A BUSINESS IS. IF THE MOTIVE FOR CARRYING SUCH ACTIVI TY IS TO EARN PROFIT AND NOT SORT OF MERE INVESTMENT, IT IS OBVIOUSLY A BUSI NESS. IN THE PRESENT CASE, THE ASSESSEE HAS ENTERED AS MANY AS 263 TRANS ACTIONS OUT OF WHICH, 55 INSTANCES WHERE THE HOLDING PERIOD IS LE SS THAN 1 MONTH; AND IN 40 INSTANCES THE HOLDING PERIOD IS MORE THAN 1 M ONTH AND LESS THAN 2 MONTHS; IN 61 INSTANCES THE HOLDING PERIOD IS MORE THAN 2 MONTHS AND LESS THAN 3 MONTHS; IN 36 INSTANCES THE HOLDING PER IOD WERE MORE THAN 3 MONTHS AND LESS THAN 4 MONTHS; IN 21 INSTANCES THE HOLDING PERIOD WERE MORE THAN 4 MONTHS AND LESS THAN 5 MONTHS; IN 22 IN STANCES THE HOLDING PERIOD WERE MORE THAN 5 MONTHS AND LESS THAN 6 MONT HS; AND IN 78 INSTANCES THE HOLDING PERIOD WERE MORE THAN 6 MONTH S AND LESS THAN 12 MONTHS. INTERESTINGLY, IN SOME OF THE INSTANCES, T HE PURCHASE AND SALES WERE MADE ON THE SAME DAY. THE VOLUME, FREQUENCY AN D HOLDING PERIOD (OF THE SHARES) OF THE TRANSACTIONS (OF THE PURCHAS E AND SALE OF SHARES), THUS REVEALS A REGULAR ENGAGEMENT BY AND OCCUPATION OF THE ASSESSEE IN THIS TRADE. RATHER, EVEN A FAR LESSER NUMBER OF TRA NSACTIONS, INASMUCH AS THE SAME IS PRECEDED BY A CONSTANT VIGIL OF THE MAR KET AND MARKET TREND, WOULD SIGNIFY A VOCATION AND CONTINUOUS EXERCISE OF ACTIVITY. THE LD. CIT(A) HAS IN FACT ELABORATELY DEALT WITH THIS ISS UE IN HIS ORDER, ISSUING CATEGORICALLY FINDINGS. IN VIEW OF OUR FOREGOING, HIS ORDER DOES NOT REQUIR E ANY INTERFERENCE AT OUR END AND, THUS, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. 8. THE NEXT GROUND FOR OUR CONSIDERATION IS DISALLO WANCE OF SUM OF RS.75,685/- UNDER SECTION 14A OF THE ACT. 8 SAMYAK CONSULTANCY PRIVATE LIMITED ITA 2303/MUM/2011 9. THE LD. AR FOR THE ASSESSEE ARGUED THAT, ASSESSE E HAD CLAIMED EXEMPT DIVIDEND INCOME OF RS.54,760/-. THE ASSESSEE HAS NOT MADE ANY VOLUNTARY DISALLOWANCE ATTRIBUTABLE TO EARNING OF EXEMPT INCOME. DURING THE ASSESSMENT, ASSESSEE WAS ASKED TO PROVID E DETAILS OF INTEREST BEARING FUNDS INVESTED IN SHARES AND TO EX PLAIN AS TO WHY THE CORRESPONDING INTEREST PORTIONS SHOULD NOT BE DISAL LOWED UNDER THE PROVISIONS OF SECTION 14A OF THE I.T. ACT. IN RESPO NSE TO THE AOS QUERY, THE ASSESSEE FURNISHED THE DETAILS OF INTERE ST AND WORKING OF DISALLOWANCE UNDER SECTION 14A. HOWEVER, THE SAME W AS NOT ACCEPTED BY THE AO AND THE AO ON THE BASIS OF SPECIAL BENCH DECISION OF THE ITAT, MUMBAI IN M/S DAGA MANAGEMENT PVT LTD. (ITA NO.8057/MUM/2003) HELD THAT THE PROVISIONS OF SECTO IN14A WOULD APPLY TO THE DIVIDEND INCOME EARNED BY THE ASSESSEE WHEREIN IT WAS HELD THAT SECTION 14A(2) & (3) ARE RETROSPECTIVE IN NATURE ALONG WITH RULE 8D AND APPLY THE SAME IN RESPECT OF THE ASSESS MENT YEAR 2007-08 AS WELL. THE AO CONCLUDED THAT, ASSESSEE IS ENGAGED IN THE BUSINESS OF DEALING IN SHARES SECURITIES AND UNITS AND, THEREFORE, STOCK-IN-TRADE IS TREATED AS INVESTMENT AND NOTIFIC ATION NO.45/2008 DATED 24 TH MARCH, 2008 AND CALCULATED THE AMOUNT OF DISALLOWA NCE AT RS.75,685/- ON THE BASIS OF .5% OF AVERAGE VALUE OF INVESTMENT. THE LD. CIT(A) WHILE CONSIDERING THIS GROUND OF APPEAL OBSERVED THAT, IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD. VS DCIT, R EPORTED IN [2010] 234 CTR (BOM) 1 IS APPLICABLE W.E.F. THE ASSESSMENT YEAR 2008-09. THE RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION IS 2007-08 AND THUS RULE 8D IS NOT APPLICABLE, HOWEVER, IT WAS CON CLUDED THAT AO IS COMPETENT TO DETERMINE AND DISALLOW SUCH EXPENDITUR E AS MAY BE REASONABLE HAVING PROXIMATE NEXUS WITH THE EXEMPT I NCOME. IN ABSENCE OF ANY OTHER PARAMETER TO ARRIVE AT SUCH PR OXIMITY, THE AO WAS WELL WITHIN THE RIGHT TO MAKE A REASONABLE ESTI MATE OF SUCH 9 SAMYAK CONSULTANCY PRIVATE LIMITED ITA 2303/MUM/2011 EXPENDITURE KEEPING IN VIEW THE METHOD PRESCRIBED U NDER RULE 8D EVEN THOUGH THE SAME WAS NOT APPLICABLE TO THE CURR ENT YEAR. THERE IS NO DISPUTE THAT, ASSESSEE EARNED EXEMPT INCOME. ASSESSEE HAS NOT EXPLAINED IT. ASSESSEE OWNED SUFFICIENT FUND TO MAK E INVESTMENT TO EARN EXEMPT INCOME. NO VOLUNTARY DISALLOWANCE WAS O FFERED BY THE ASSESSEE WHILE FILING OF RETURN. ONCE THE ASSESSEE CLAIMED THAT, ASSESSEE EARNED EXEMPT INCOME, THERE MUST BE SOME E XPENDITURE NECESSARILY TO EARN SUCH EXEMPT INCOME. ASSESSEE HA S NOT SHOWN THAT, HE HAS HAVING SUFFICIENT RESERVE FUND FOR INV ESTMENT FOR EARNING THE EXEMPT INCOME. THUS, THE AO WAS FULLY COMPETENT TO DETERMINE THE REASONABLE EXPENSES FOR EARNING THE EXEMPT INCO ME. THE ASSESSEE EARNED DIVIDEND INCOME OF RS.54,760/- AND CLAIMED E XEMPTED UNDER SECTION 10(34) OF THE ACT. THE AO WHILE APPLYING RU LE 8D FOR REASONABLE ESTIMATE OF SUCH EXPENDITURE DISALLOWED RS.75,685/- WHICH IS NO DOUBT MORE THAN THE EXEMPT DIVIDEND INC OME. IN ABSENCE OF VOLUNTARY DISALLOWANCE UNDER SECTION 14A, NON-AV AILIABILITY OF SURPLUS FUND AND MOREOVER THE ASSESSEE PAID INTERES T ON THE MONEY BORROWED FOR THE PURPOSE OF EARNING EXEMPT INCOME, THE DISALLOWANCE MADE BY AO CANNOT BE CALLED AS UNJUSTIFIED. THUS, W E DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER OF AO AS WELL AS OF CIT(A), THUS, THIS GROUND OF APPEAL IS ALSO DISMISSED. 10. IN THE RESULT, APPEAL FILED BY THE ASSESSEE STA NDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH JUNE, 2016. SD/- SD/- ( ) ( ) (SANJAY ARORA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 24 TH JUNE, 2016 1'/ COPY TO:- 10 SAMYAK CONSULTANCY PRIVATE LIMITED ITA 2303/MUM/2011 1) / THE APPELLANT. 2) / THE RESPONDENT. 3) THE CIT(A) -20, MUMBAI. 4) THE CIT9, MUMBAI. THE D.R. E BENCH, MUMBAI. 6) 2 \ COPY TO GUARD FILE. ( / BY ORDER / ( ( ) 9:( , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN, SR.PS