The ACIT, Circle-2(1)(2), Ahmedabad V. M/s. Mundra International Container Terminal Pvt.Ltd., Kutch

ITA 2618/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9816 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 11-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D V SINGH
• Assessee Lawyers: MRUNAL SHAH
• Keywords: Earning of tax free income; Question of law; Tax effect
• Section: 143(3); 14A; 115JB; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC A BE NCH (BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER) ITA NO: 2618/AHD/2015 (ASSESSMENT YEAR: 2011-12) ACIT,CIRCLE-2(1)(2), AHMEDABAD V/S M/S. MUNDRA INTERNATIONAL CONTAINER TERMINAL PVT. LTD. NAVINAL, NEW MUNDRA PORT, POST BAG NO. 8, MUNDRA KUTCH-370421 (APPELLANT) (RESPONDENT) PAN: AADCA 0917C APPELLANT BY : SHRI D.V. SINGH, D.R. RESPONDENT BY : MRUNAL SHAH, A.R. ( )/ ORDER DATE OF HEARING : 04-01-2016 DATE OF PRONOUNCEMENT : 08-01-2016 PER ANIL CHATURVEDI, ACCOUNTANT MEMBER 1. THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF CIT(A)-2, AHMEDABAD DATED 08.06.2015 FOR A.Y. 2011-12. ITA NO. 2618 /AHD/2015 . A.Y. 2011-20 12 2 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 OPERATING CONTAINER HANDLING TERMINAL AND CONTAINER FREIGHT S TATION OPERATIONS. ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y. 2011-1 2 ON 27-10-2011 DECLARING INCOME AT RS. NIL. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) R.W.S. 144 VIDE ORDER DATED 27.02.2015 AND THE TOTAL TAXABLE INCOME WAS DETERMINED AT RS. 3,52,422/- AND BOOK PROFIT U/S. 115JB AT RS. 6,95,7 4,403/-. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE L D. CIT(A) WHO VIDE ORDER DATED 08.06.2015 GRANTED SUBSTANTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), REVENUE IS NOW IN A PPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUND:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE DISALLOWANCE OF RS. 35,00,000/- MADE BY THE ASSESSING OFFICER U/S. 14A OF THE I.T. ACT, 1961, WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A.O NO TICED THAT DURING THE YEAR, ASSESSEE HAD INVESTMENT OF RS. 70 CRORE IN TH E SHARES OF CONTAINER RAIL ROADS SERVICES PVT. LTD. AND HAD ALSO DEBITED INTER EST AMOUNTING TO RS. 70.90 CRORE IN ITS PROFIT AND LOSS ACCOUNT. THE ASS ESSEE WAS ASKED TO SHOW CAUSE AS TO WHY BY APPLYING THE PROVISIONS OF SECTI ON 14A READ WITH RULE 8D, DISALLOWANCE NOT BE MADE, TO WHICH ASSESSEE INT ERALIA SUBMITTED THAT THE INVESTMENTS HAVE BEEN MADE OUT OF INTEREST FREE FUN DS AND THEREFORE NO DISALLOWANCE OF INTEREST EXPENSES COULD BE MADE. IT FURTHER SUBMITTED THAT DURING THE YEAR, ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME AND THEREFORE ALSO NO DISALLOWANCE U/S. 14A COULD BE MADE. THE SU BMISSIONS OF THE ITA NO. 2618 /AHD/2015 . A.Y. 2011-20 12 3 ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE A.O. AS H E WAS OF THE VIEW THAT CIRCULAR NO. 5 OF 2014 ISSUED BY CBDT MANDATES THAT DISALLOWANCE OF EXPENDITURE U/S.14A HAS TO BE MADE EVEN WHEN THERE IS NO EXEMPT INCOME. HE ACCORDINGLY WORKED OUT THE DISALLOWANCE OF EXPEN DITURE ON ACCOUNT OF ADMINISTRATIVE EXPENSES AT RS. 35 LACS AND DISALLOW ED THE SAME U/S. 14A OF THE ACT. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE C ARRIED THE MATTER BEFORE LD. CIT(A) WHO DECIDED THE ISSUE BY HOLDING AS UNDE R:- 3.3 I HAVE CAREFULLY PERUSED THE ORDER AND THE WRIT TEN SUBMISSION FILED BY THE APPELLANT. THE AO HAS MADE A DISALLOWANCE OUT OF ADMINISTRATIV E EXPENDITURE UNDER SECTION 14A BY APPLYING THE PROVISIONS OF RULE 8D. IT HAS BEEN HEL D BY HIM THAT THE APPELLANT HAS NOT KEPT ANY ACCOUNT OR RECORD TO SHOW THAT NO ADMINIST RATIVE EXPENDITURE HAS BEEN INCURRED FOR THE PURPOSE OF EARNING EXEMPT INCOME OR MAINTAI NING THE TAXES AND INVESTMENT. SOME ADMINISTRATIVE ACTION SUCH AS THE REVIEW OF INVESTM ENT OR MONITORING OF THE ACTIVITIES OF THE COMPANIES IN WHICH THE ASSESSEE COMPANY HAS MAD E INVESTMENT MIGHT HAVE BEEN DONE BY THE DIRECTOR OF THE ASSESSEE COMPANY, AND THE SU PPORTING EMPLOYEES MUST HAVE DONE SOME ACTIVITY BY SPENDING SOME TIME ON THE ISSUE. T HE APPELLANT WAS HAVING HUGE AMOUNT OF INVESTMENT IN EXEMPT INCOME EARNING SECURITIES A ND HAS EARNED EXEMPT INCOME. HE HAS, THEREFORE, APPLIED THE PROVISIONS OF RULE 8D B Y REFERRING TO CIRCULAR NO. 5/2014 OF CBDT, WHEREIN IT WAS CLARIFIED THAT THE DISALLOWANC E IS TO BE MADE EVEN WHEN NO EXEMPT INCOME HAS BEEN EARNED IN THAT PARTICULAR YEAR. THE APPELLANT ON THE OTHER HAND HAS SUBMITTED THAT IT HAS INCURRED NO EXPENDITURE FOR T HE INVESTMENT IN TAX-EXEMPT ASSETS. THE FINDING GIVEN BY THE AO THAT IT HAS EARNED INCOME H AS ALSO BEEN DISPUTED BY THE APPELLANT. IT HAS BEEN SUBMITTED THAT IT HAS NOT EA RNED ANY INCOME OUT OF ITS INVESTMENT IN TAX-EXEMPT ASSETS. THE APPELLANT HAS ALSO PLACED RE LIANCE ON THE JUDGMENT OF HONOURABLE GUJARAT HIGH COURT IN THE CASE OF CORRTECH ENERGY P RIVATE LIMITED (SUPRA). ON A CAREFUL CONSIDERATION OF THE ENTIRE FACTS AND THE LEGAL ASPECTS OF THE CASE, IT IS NOTED THAT THE APPELLANT HAS NOT BEEN ABLE TO PROVE THAT IT HAS NOT MADE ANY EXPENDITURE IN MAKING THE INVESTMENT IN TAX-EXEMPT ASSETS. THE APP ELLANT HAS NOT KEPT SEPARATE ACCOUNTS TO PROVE THAT NO EXPENDITURE WAS INCURRED FOR MAINT AINING THE INVESTMENT IN TAX-EXEMPT ASSETS. THEREFORE, THE DISALLOWANCE MADE BY THE AO APPEARS TO BE JUSTIFIED AS THE ITA NO. 2618 /AHD/2015 . A.Y. 2011-20 12 4 ACCOUNTS OF THE APPELLANT IN THIS RESPECT CANNOT BE RELIED AND PROVISIONS OF SECTION 14A(2) ARE TO BE INVOKED. HOWEVER, THE RECENT JUDGMENT OF HONOURABLE GUJARAT HIGH COURT IN THE CASE OF CORRTECH ENERGY PRIVATE LIMITED, ON WHI CH THE APPELLANT HAS PLACED RELIANCE, IS IN FAVOUR OF THE APPELLANT. THE HONOURABLE COURT HAS HELD THAT, IF NO EXEMPTION HAS BEEN CLAIMED, THERE WAS NO QUESTION OF DISALLOWANCE UNDER SECTION 14A OUT OF THE INTEREST AND THE EXPENDITURE. THE HONOURABLE COURT HAS PLACE D RELIANCE ON THE JUDGMENT OF PUNJAB AND HARYANA HIGH COURT ON THE ISSUE. THE REL EVANT EXTRACTS FROM THE JUDGEMENT ARE QUOTED AS UNDER: - 'SECTION 14A(1) PROVIDES THAT FOR THE PURPOSE OF CO MPUTING TOTAL INCOME UNDER CHAPTER IV, NO DEDUCTION SHALL BE ALLOWED IN RESPEC T OF EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO INCOME WHICH DOES NOT F ORM PART OF THE TOTAL INCOME UNDER THE ACT. IN THE INSTANT CASE, THE TRIBUNAL HA S RECORDED THE FINDING OF FACT THAT THE ASSESSEE DID NOT MAKE ANY CLAIM FOR EXEMPT ION OF ANY INCOME FROM PAYMENT OF TAX. IT WAS ON THIS BASIS THAT THE TRIBU NAL HELD THAT DISALLOWANCE UNDER SECTION 14A COULD NOT BE MADE. IN THE PROCESS TRIBU NAL RELIED ON THE DECISION OF DIVISION BENCH OF PUNJAB AND HARYANA HIGH COURT IN CASE OF CIT V. WINSOME TEXTILE INDUSTRIES LTD. 12009] 319 ITR204 IN WHICH ALSO THE COURT HAD OBSERVED THAT WHERE THE ASSESSEE DID NOT MAKE ANY CLAIM FOR EXEMPTION, SECTION 14A COULD HAVE NO APPLICATION.' IN VIEW OF THE ABOVE DISCUSSION AND RESPECTFULLY FO LLOWING THE JUDGMENT OF HONOURABLE GUJARAT HIGH COURT WHICH IS BINDING ON THE AUTHORIT IES OPERATING UNDER ITS TERRITORIAL JURISDICTION, I AM CONSTRAINED TO DELETE THE DISALL OWANCE MADE BY THE AO, UNDER SECTION 14 A. REGARDING, THE PLEA OF THE APPELLANT THAT NO ADDITI ON UNDER SECTION 115 JB SHOULD BE MADE, IT IS NOTED THAT THE AO HAS RIGHTLY MADE THE ADDITION UNDER SECTION 115 JB FOR THE DISALLOWANCE MADE UNDER SECTION 14A. ON A CAREFUL C ONSIDERATION OF ENTIRE FACTS AND LEGAL ASPECTS OF THE ISSUE, THE CLAIM OF THE APPELL ANT THAT NO ADDITION FOR THE DISALLOWANCE MADE UNDER SECTION 14A SHOULD BE MADE WHILE COMPUTI NG THE BOOK PROFIT IS NOT ACCEPTABLE. AS PER THE EXPLANATION-1 BELOW SECTION 115 JB OF THE ACT, THE BOOK PROFIT AS PER THE PROFIT AND LOSS ACCOUNT FOR THE RELEVANT PR EVIOUS YEAR AS PREPARED UNDER SUB SECTION (2) OF SECTION 115 JB OF THE ACT SHALL BE I NCREASED BY THE AMOUNT OR AMOUNTS OF ITA NO. 2618 /AHD/2015 . A.Y. 2011-20 12 5 EXPENDITURE RELATABLE TO ANY INCOME TO WHICH SECTIO N 10 APPLIES. THE PROVISIONS OF THE ACT CLEARLY PRESCRIBES THE ADDITION TO THE BOOK PRO FIT BY THE AMOUNT OF EXPENDITURE RELATABLE TO THE EXEMPT INCOME. THEREFORE, THE DISA LLOWANCE MADE UNDER SECTION 14A FOR EARNING THE EXEMPT INCOME SHOULD BE ADDED TO THE BO OK PROFIT. FURTHER, THE PROVISIONS OF THE ACT ALSO PRESCRIBE THE QUANTUM OF DISALLOWANCE TO BE MADE UNDER SECTION 14A. THE LANGUAGE OF EXPLANATION-1 PROVIDES IN UNEQUIVOCAL T ERMS THAT THE AMOUNT OF EXPENDITURE 'RELATABLE TO THE EXEMPT INCOME SHALL BE ADDED BAC K. NEITHER THE LANGUAGE OF CLAUSE (F) EXPRESSLY REFERS TO THE AMOUNT WHICH IS SPECIFICALL Y DEBITED TO THE PROFIT AND LOSS ACCOUNT, NOR THERE BE AN IMPLICATION IN THIS REGARD . WHAT HAS BEEN CONTEMPLATED BY THE PROVISIONS OF THE AMOUNT OF THE EXPENDITURE 'RELATA BLE TO' THE EXEMPT INCOME. THE AMOUNT DISALLOWABLE UNDER SECTION 14A IS ALWAYS PART OF TH E EXPENSES DEBITED TO THE PROFIT AND LOSS ACCOUNT. IT CANNOT BE ACCEPTED THAT UNLESS ANY EXPENDITURE IS INCURRED AND CLAIMED AS DEDUCTION, THERE CANNOT BE ANY QUESTION OF ANY H YPOTHETICAL DISALLOWANCE UNDER SECTION 14A. THE VIEW FINDS SUPPORT FROM THE FOLLOW ING ORDERS OF ITAT: - I)RAJKOT BENCH IN THE CASE OF SEABIRD MARINES SERVI CES PVT LTD ITA NO.1083 & 1084/RJT/2010 &ITA 343/RJT/2012(PARA 12) II) MUMBAI BENCH IN THE CASE OF HINDUSTAN CONSTRUCT ION COMPANY LTD REPORTED IN 29 TAXMANN.COM 82(2013)(PARA72.1). III) MUMBAI BENCH IN THE CASE OF ESQUIRE PVT LTD ITA NO. F688/MUM/2011 (PARA 16). IV) MUMBAI BENCH IN THE CASE OF RBK SHARE BROKING PRIVATE LIMITED ITA NO. 6678/MUM/2011 REPORTED IN 37 TAXMAN.COM 128 (PARA 6 ). THE APPELLANT HAS ALSO PLACED RELIANCE ON THE JUDGM ENT OF HONOURABLE ITAT AHMEDABAD IN THE CASES OF RELIANCE PETROPRODUCTS PVT. LTD. VS . ACIT BEARING ITA NO.2324/A/2009. I HAVE CAREFULLY PERUSED THE JUDGMENTS GIVEN BY THE H ONOURABLE BENCH. IT IS NOTED THAT THE HONOURABLE BENCH HAS DECIDED THE ISSUE AFTER FOLLOW ING THE JUDGMENT OF ITAT DELHI BENCH IN THE CASE OF GOETZE (INDIA) LTD 32 SOT 101 (IT APPEAL NOS. 208 (DELHI) AND 1031 (DELHI) OF 2007), WHEREIN IT WAS HELD THAT THE PROVISIONS OF SECTION 14A CANNOT BE IMPORTED INTO CLAUSE (F) OF THE EXPLANATI ON TO SECTION 115 JA OF THE ACT. THE DECISION HAS BEEN OVERRULED IN THE RECENT JUDGMENT BY THE HONOURABLE HIGH COURT OF DELHI. IN THE SAME CASE OF GOETZE (INDIA) LTD. REPO RTED IN [2014] 44 TAXMANN.COM 138 ITA NO. 2618 /AHD/2015 . A.Y. 2011-20 12 6 (DELHI), HAS HELD THAT THE BOOK PROFIT SHOULD BE IN CREASED BY THE AMOUNT OF DISALLOWANCE UNDER SECTION 14A. ACCORDINGLY, THE DECISION GIVEN BY THE DELHI ITAT, IS NO MORE A GOOD LAW AND STANDS OVERRULED. CONSEQUENTLY THE RELIANCE PLACED BY HONOURABLE ITAT AHMEDABAD BENCH, ON THE DECISION IS NOT OF ANY CONS EQUENCE. FURTHER, THE DECISION WAS IN RESPECT OF SECTION 115 JA AND THE PRESENT SECTIO N IS 115JB. THE JUDGMENT OF HONOURABLE ITAT AHMEDABAD BENCH RELIED BY THE APPEL LANT ARE, THEREFORE, RESPECTFULLY DISTINGUISHED. FURTHER THERE ARE CONTRARY JUDGMENTS AVAILABLE ON THE ISSUE FROM THE RAJKOT BENCH OF ITAT, AND ALSO THE MUMBAI BENCH OF ITAT. THEREFORE, IN VIEW OF THE ABOVE DISCUSSION, THE ADDITION MADE BY THE AO TO TH E BOOK PROFIT ON ACCOUNT OF DISALLOWANCE MADE UNDER SECTION 14 A WAS JUSTIFIED. I HAVE ALSO COME ACROSS A DECISION OF HONOURABLE GUJARAT HIGH COURT IN THE CASE OF COM MISSIONER OF INCOME-TAX-1 V. GUJARAT STATE FERTILIZERS & CHEMICALS LTD [2013] 36 TAXMANN.COM 230 /358 ITR 323 (GUJARAT), WHEREIN THE HONOURABLE HIGH COURT HAS UP HELD THE ADDITION OF THE DISALLOWANCE MADE UNDER SECTION 14A FOR THE PURPOSE OF COMPUTING THE BOOK PROFIT. THEREFORE, HONOURABLE GUJARAT HIGH COURT HAS UPHELD THE ADDITION TO BOOK PROFIT ON ACCOUNT OF DISALLOWANCE MADE UNDER SECTION 14 A. SI NCE THE DECISION IS OF THE JURISDICTIONAL HIGH COURT AND IT IS IN FAVOUR OF TH E REVENUE AND ON THAT GROUND ONLY, THE DISALLOWANCE MADE BY THE AO SHOULD BE SUSTAINED. HOWEVER, SINCE THE ADDITION UNDER SECTION 14A HAS B EEN DIRECTED TO BE DELETED BY ME IN THE PRECEDING DISCUSSION BY FOLLOWING THE JUDGMENT OF HONOURABLE GUJARAT HIGH COURT IN THE CASE OF CORRTECH ENERGY PRIVATE LIMITED (SUPRA) , NO ADDITION TO BOOK PROFIT UNDER SECTION 115 JB IS REQUIRED TO BE MADE. THE GROUND OF APPEAL IS ACCORDINGLY ALLOWED 5. AGGRIEVED BY THE ORDER OF LD. CIT(A), REVENUE IS N OW IN APPEAL BEFORE US. 6. BEFORE US, LD. D.R. SUPPORTED THE ORDER OF A.O AND FURTHER SUBMITTED THAT CBDT CIRCULAR NO. 5 OF 2014 CLARIFIED THAT DISALLOW ANCE U/S. 14A IS TO BE MADE EVEN WHEN NO EXEMPT INCOME HAS BEEN EARNED BY THE ASSESSEE. HE FURTHER SUBMITTED THAT WHILE DECIDING THE ISSUE IN THE CASE OF CORRTECH ITA NO. 2618 /AHD/2015 . A.Y. 2011-20 12 7 ENERGY PVT. LTD. REPORTED IN 2014. 45 TAXMAN.COM 11 6 (GUJ.) THE AFORESAID CIRCULAR OF CBDT WAS NOT BROUGHT TO THE NOTICE OF T HE HONBLE HIGH COURT. HE THUS SUPPORTED THE ORDER OF LD. CIT(A). ON THE O THER HAND LD. A.R. SUBMITTED THAT THE APPEAL OF THE REVENUE NEEDS TO B E DISMISSED ON ACCOUNT OF LOW TAX EFFECT. EVEN ON THE MERITS, HE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN ASSESSEES FAVOUR BY THE DECISION OF JUR ISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. CORRTECH ENERGY PVT. LTD. (SUPR A). HE ALSO PLACED ON RECORD THE COPY OF THE AFORESAID ORDER. HE THUS SUP PORTED THE ORDER OF LD. CIT(A). IN THE REJOINDER WITH RESPECT TO THE DISMI SSAL OF APPEAL ON ACCOUNT OF LOW TAX EFFECT, LD. D.R. SUBMITTED THAT THE TAX EFFECT ON THE ADDITION AFTER CONSIDERING THE SURCHARGE ON INCOME TAX IS MORE THA N THE MONETARY LIMIT PRESCRIBED BY THE CBDT CIRCULAR. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS ABOUT DISALLOWANCE OF EXPENDITURE U/S. 14A. IT IS AN UNDISPUTED FACT THAT DURING THE YEAR UNDER CONSI DERATION ASSESSEE HAS NOT EARNED ANY INCOME WHICH IS EXEMPT FROM TAX. WE FIND THAT HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. CORRTECH ENERGY P VT. LTD. (SUPRA) HAS HELD THAT WHERE ASSESSEE DID NOT MAKE ANY CLAIM FOR EXEM PTION OF INCOME FROM PAYMENT OF TAX, DISALLOWANCE U/S. 14A COULD NOT BE MADE. THE RELEVANT OBSERVATION OF HONBLE HIGH COURT READS AS UNDER:- 4. COUNSEL FOR THE REVENUE SUBMITTED THAT THE ASSES SING OFFICER AS WELL AS CIT(APPEALS) HAD APPLIED FORMULA OF RULE 8D OF THE INCOME TAX RU LES, SINCE THIS CASE AROSE AFTER THE ASSESSMENT YEAR 2009-2010. SINCE IN THE PRESENT CAS E, WE ARE CONCERNED WITH THE ASSESSMENT YEAR 2009-2010, SUCH FORMULA WAS CORRECT LY APPLIED BY THE REVENUE. WE HOWEVER, NOTICE THAT SUB-SECTION(L) OF SECTION 14A PROVIDES THAT FOR THE PURPOSE OF COMPUTING TOTAL INCOME UNDER CHAPTER IV OF THE ACT, NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO INCOME WHICH DOES NOT FORM ITA NO. 2618 /AHD/2015 . A.Y. 2011-20 12 8 PART OF THE TOTAL INCOME UNDER THE ACT. IN THE PRES ENT CASE, THE TRIBUNAL HAS RECORDED THE FINDING OF FACT THAT THE ASSESSEE DID NOT MAKE ANY CLAIM FOR EXEMPTION OF ANY INCOME FROM PAYMENT OF TAX. IT WAS ON THIS BASIS THAT THE TRIBU NAL HELD THAT DISALLOWANCE UNDER SECTION 14A OF THE ACT COULD NOT BE MADE. IN THE PROCESS TR IBUNAL RELIED ON THE DECISION OF DIVISION BENCH OF PUNJAB AND HARYANA HIGH COURT IN CASE OF CIT V WINSOME TEXTILE INDUSTRIES LTD. [2009] 319 ITR 204 IN WHICH ALSO THE COURT HAD OBSERVED AS UNDER : '7. WE DO NOT FIND ANY MERIT IN THIS SUBMISSION. TH E JUDGEMENT OF THIS COURT IN ABHISHEK INDUSTRIES LTD (2006) 286 ITR 1 WAS ON THE ISSUE OF ALLOWABILITY OF INTEREST PAID ON LOANS GIVEN TO SISTER CONCERNS, WI THOUT INTEREST. IT WAS HELD THAT DEDUCTION FOR INTEREST WAS PERMISSIBLE WHEN LOAN WA S TAKEN FOR BUSINESS PURPOSE AND NOT FOR DIVERTING THE SAME TO SISTER CONCERN WI THOUT HAVING NEXUS WITH THE BUSINESS. THE OBSERVATIONS MADE THEREIN HAVE TO BE READ IN THAT CONTEXT. IN THE PRESENT CASE, ADMITTEDLY THE ASSESSEE DID NOT MAKE ANY CLAIM FOR EXEMPTION. IN SUCH A SITUATION SECTION 14A COULD HAVE NO APPLICAT ION.' 5. WE DO NOT FIND ANY QUESTION OF LAW ARISING, TAX APPEAL IS THEREFORE DISMISSED. 8. BEFORE US, REVENUE HAS NOT BROUGHT ON RECORD ANY CO NTRARY BINDING DECISION IN ITS SUPPORT. WE THEREFORE FIND NO REASON TO INTE RFERE WITH THE ORDER OF LD. CIT(A) AND THUS THE GROUND OF REVENUE IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 08- 01 - 2016. SD/- SD/- (S.S. GODARA) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT.