M/s Haryana State Industrial & Infrastructure Development Corpn., Panchkula V. ACIT, Panchkula

ITA 275/CHANDI/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 2173 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-02-2021
• Assessment Year: 2006-2007
• Appeal Filed On: 24-06-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A K JINDAL
• Keywords: Earning of tax free income; Source of fund; Proportionate interest; Rule 8D
• Section: 14A; 13

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH A, CHANDIGARH , ! ' , # $ % & ' , ' BEFORE: SMT.DIVA SINGH, JUDICAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NOS.275 TO 279/CHD/2020 / ASSESSMENT YEARS : 2006-07 TO 2010-11 M/S HARYANA STATE INDUSTRIAL AND INFRASTRUCTURE DEVELOPMENT CORPORATION LTD., C-13-14, SECTOR 6, PANCHKULA. THE A.C.I.T., PANCHKULA CIRCLE, PANCHKULA. ./PAN NO: AAACH4114R /APPELLANT /RESPONDENT /ASSESSEE BY : SHRI A.K. JINDAL, CA ! / REVENUE BY : SMT.MEENAKSHI VOHRA, ADDL.CIT ' # $ /DATE OF HEARING : 11.02.2021 %&'( $ /DATE OF PRONOUNCEMENT: 04.03. 2021 (VIRTUAL COURT) / ORDER PER BENCH : THE ABOVE APPEALS RELATE TO THE SAME ASSESSEE CHAL LENGING TWO CONSOLIDATED ORDERS OF THE COMMISSIONER OF INCO ME TAX (APPEALS), PANCHKULA RELATING TO ASSESSMENT YEARS 2 006-07 & 2007-08 AND 2008-09 TO 2010-11 BOTH DATED 13.03.202 0 PASSED U/S 250(6)) OF THE INCOME TAX ACT, 1961 (HER EINAFTER REFERRED TO AS ACT. ITA NOS.275 TO 279/CHD/2020 A.YS. 2006-07 TO 2010-11 PAGE 2 OF 20 2. AT THE OUTSET ITSELF, IT WAS POINTED OUT THAT T HE ISSUE INVOLVED IN ALL THE APPEALS WAS COMMON, RELATING TO DISALLOWANCE OF EXPENSES INCURRED FOR THE PURPOSE O F EARNING EXEMPT INCOME AS PER THE PROVISIONS OF SECTION 14A OF THE ACT. THEREFORE, ALL THE APPEALS WERE TAKEN UP TOGETHER F OR HEARING. 3. THE LD.COUNSEL FOR THE ASSESSEE POINTED OUT THAT IN ALL THE APPEALS THIS WAS THE SECOND ROUND BEFORE THE ITAT. THAT IN THE FIRST ROUND THE ITAT HAD HELD THE PROVISIONS OF S ECTION 14A OF THE ACT, FOR THE PURPOSES OF DISALLOWING EXPENSES R ELATING TO EXEMPT INCOME, APPLICABLE IN THE FACTS OF THE PRES ENT CASES ON NOTING THAT THE ASSESSEE HAD EARNED EXEMPT INCOME I N THE FORM OF DIVIDEND. THAT AFTER HOLDING SO, THE ITAT HAD R ESTORED THE ISSUE OF CALCULATING THE DISALLOWANCE OF EXPENSES TO THE AO WITH THE DIRECTION TO DECIDE THE SAME IN ACCORDANC E WITH THE PROVISIONS OF SECTION 14A OF THE ACT AND AS PER LAW . THAT SUBSEQUENTLY THE AO, AFTER GIVING DUE OPPORTUNITY O F HEARING TO THE ASSESSEE, HAD WORKED OUT THE DISALLOWANCE BY AP PLYING THE MATHEMATICAL FORMULA PROVIDED IN RULE 8D OF THE INC OME TAX RULE, 1962 FOR THE SAID PURPOSE, MAKING DISALLOWANC E OF EXPENSES FOR THE IMPUGNED ASSESSMENT YEARS AS UNDER : ASSTT. YEAR DISALLOWANCE OF DISALLOWANCE OF TOTAL INTEREST EXPENSES ADMINISTRATION EXPENSES 2006-07 RS.40,54,400/- RS.12,49,257/- RS.5 3,03,657/- 2007-08 RS.21,30,672/- RS.10,75,091/- RS.32,05,76 3/- ITA NOS.275 TO 279/CHD/2020 A.YS. 2006-07 TO 2010-11 PAGE 3 OF 20 2008-09 RS.11,96,147/- RS.8,83,523/- RS.20,79,67 0/- 2009-10 RS.6,66,301/- RS.7,94,186/- RS.14,60,4 87/- 2010-11 RS. 3,06,973/- RS.7,89,686/- RS.10,96,6 59/- 4. THAT THE ASSESSEE FILED APPEAL IN ALL THESE YEAR S BEFORE THE LD.CIT(A) WHO RESTRICTED THE DISALLOWANCE TO THE EX TENT OF EXEMPT INCOME EARNED BY WAY OF DIVIDEND IN ALL THE YEARS, FOLLOWING HIS DECISION IN THE CASE OF THE ASSESSEE FOR A.Y 2014- 15 RENDERED IN ACCORDANCE WITH THE VIEW OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF PCIT VS EM PIRE PACKAGE PVT. LTD(2017) 81 TAXMANN.COM 108(P&H). THAT THE DISALLOWANCE WAS ACCORDINGLY RESTRICTED IN THE IMPU GNED YEARS AS UNDER: DISALLOWANCE RESTRICTED TO THE EXTENT OF ASSTT. YEAR EXEMPT INCOME 2006-07 RS.2,97,432/- 2007-08 RS.2,48,224/- 2008-09 RS.5,10,594/- 2009-10 RS.4,44,910/- 2010-11 RS.3,27,060 (SUO MOTO BY ASSESSEE 1,14,791 ADDITIONAL DISALLOWANCE 2,11,270) 5. THE LD.COUNSEL FOR THE ASSESSEE DREW OUR ATTENTI ON TO THE FINDINGS OF THE LD.CIT(A) IN HIS ORDER PASSED IN AS SESSMENT YEAR 2006-07, POINTING OUT THAT HIS FINDING FOR THE SUBSEQUENT YEARS ALSO WAS IDENTICALLY WORDED. THE RELEVANT FIN DINGS OF THE LD.CIT(A) AT PARAS 5.2 AND 5.2.1 OF HIS CONSOLIDATE D ORDER IS AS UNDER: ITA NOS.275 TO 279/CHD/2020 A.YS. 2006-07 TO 2010-11 PAGE 4 OF 20 5.2 HELD: I HAVE PERUSED THE ORDER OF THE ASSESSIN G OFFICER AND EXAMINED THE REPLY OF THE ASSESSEE. IDENTICAL I SSUE ON IDENTICAL FACTS WAS DECIDED BY ME IN THE APPEAL NO.58/PKL/17- 18 FOR AY 2014-15 VIDE ORDER DATED 27.08.2019 AT PA RA 12.2. WHICH IS REPRODUCED HEREUNDER FOR READY REFERENCE: 12.2 HELD: I HAVE PERUSED THE ORDER OF THE ASSESSING OFFICER AND EXAMINED THE REPLY OF THE ASSESSEE. BRIEF FACTS OF THE ISSUE AT HAND IS THAT APPELLANT HAS EARNED DIVIDEND INCOME OF RS.4,61,378/- WHICH IS EXEMPT IN COME. APPELLANT WHILE COMPUTING THE TAXABLE INCOME HAS DISALLOWED ON HIS OWN AN AMOUNT OF RS.5,59,228/- BE ING 0.5% OF AVERAGE INVESTMENT AS EXPENDITURE TOWARDS EARNING OF EXEMPT DIVIDEND INCOME. AO HAS MECHANICA LLY HELD THAT SINCE THE ASSESSEE HAS NOT MAINTAINED THE DETAILS OF SUCH EXPENSES INCURRED IN ORDER TO EARN EXEMPT INCOME AND THEREFORE THE DISALLOWANCE U/S 14A SHOULD BE CALCULATED IN ACCORDANCE WITH THE PROVISIONS OF RUL E 8D OF THE ACT. LDAR HAS ARGUED THAT APPELLANT HAS ITSELF MADE DISALLOWANCE OF RS.5,59,228/- BEING 0.5% OF AVERAGE INVESTMENT AS EXPENDITURE TOWARDS EARNING OF EXEMPT DIVIDEND INCOME AND HAS DISALLOWED THE SAME WHILE COMPUTING THE TAXABLE INCOME BUT THE AO HAS MADE FU RTHER DISALLOWANCE OF RS.28,28,207/- BEING PROPORTIONATE INTEREST EXPENDITURE. HE FURTHER ARGUES THAT THE DISALLOWANCE CANNOT EXCEED THE EXEMPT INCOME. HE PL ACED RELIANCE ON VARIOUS CASES. HE FURTHERMORE SUBMITS T HAT AO HAS NOT BROUGHT ON RECORD ANY EXPENDITURE WHICH HAS BEEN INCURRED BY THE ASSESSEE TO EARN THE EXEMPT INCOME BUT HAS APPLIED RULE 8-D OF THE RULES IN A MECHANICAL M ANNER. AND LASTLY HE ARGUED THAT THE ASSESSEE HAD NOT MADE INVESTMENTS IN THE SHARES OF THE BORROWED FUNDS. TH E INVESTMENTS HAVE BEEN MADE OUT OF THE INTEREST FREE FUNDS OF THE ASSESSEE. 12.2.1 ON CAREFUL PERUSAL OF FACTS OF THE CASE, I F IND MERIT IN THE ARGUMENTS OF THE APPELLANT ARS. FIRST AND FOREMOST, AO HAS FAILED TO BRING ON RECORD THAT BOR ROWED FUNDS HAVE BEEN USED TO MAKE INVESTMENT IN THE SHAR ES. MOREOVER, IT HAS BEEN DECIDED BY VARIOUS JUDICIAL AUTHORITIES THAT DISALLOWANCE CANNOT EXCEED THE EXEMPT INCOME. THE DELHI HIGH COURT IN JOINT INVESTMENTS PVT LTD V CIT (LTA NO.117/2015) HAS HELD THAT SECTION 14A OR RULE 8D CANNOT BE INTERPRETED S O AS TO MEAN THAT THE ENTIRE TAX EXEMPT INCOME IS TO BE DIS ALLOWED. THE WINDOW FOR DISALLOWANCE IS INDICATED IN SECTION 14A OF THE ACT, AND IS ONLY TO THE EXTENT OF DISALLOWANCE OF ITA NOS.275 TO 279/CHD/2020 A.YS. 2006-07 TO 2010-11 PAGE 5 OF 20 EXPENDITURE 'INCURRED BY THE ASSESSEE IN RELATION TO TAX EXEMPT INCOME'- ACCORDINGLY, THE TAX EXEMPT INC OME CANNOT BE DISALLOWED ENTIRELY. SUPREME COURT HAS DISMISSED SLP OF THE DEPARTMENT AGAINST THE JUDGMEN T OF DELHI HIGH COURT. SIMILAR VIEW HAS BEEN TAKEN BY TH E JURISDICTIONAL HIGH COURT IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME-TAX-!, CHANDIGARH VS. EMPIRE PACKAGE (P.) LTD. [2017] 81 TAXMANN.COM 108 (PUNJAB & HARYANA) DATED 12.01.2016. THE FACTS OF THE CASE ARE THAT INCOME FROM DIVIDEND HAD BEEN SHOWN AT RS.1,11,564 WHEREAS DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D OF THE RULES WORKED OUT BY THE ASSESSI NG OFFICER CAME TO RS.4,09,675. THE HON'BLE HIGH COUR T HAS HELD THAT WHEN THE ASSESSEE CLAIMED THAT IT HAD NOT MADE ANY EXPENDITURE ON EARNING EXEMPT INCOME, THE ASSES SING OFFICER IN TERMS OF SUBSECTION (2) OF SECTION 14A W AS REQUIRED TO COLLECT SUCH MATERIAL EVIDENCE TO DETER MINE EXPENDITURE IF ANY INCURRED BY THE ASSESSEE IN RELA TION TO EARNING OF EXEMPT INCOME. THE ASSESSING OFFICER DISALLOWED THE ENTIRE TAX EXEMPT INCOME WHICH IS NO T PERMISSIBLE AS PER SETTLED POSITION OF LAW. IN VIEW OF DECISION IN CI1 VS. DEEPAK MITTAL [2013138 TAXMANN. COM 83/219 TAXMAN 314/120141361ITR 131 (PUNJ. & HAR.) HOLDING THAT THE WINDOW FOR DISALLOWANCE IS INDICAT ED IN SECTION 14A AND IS ONLY TO THE EXTENT OF DISALLOWIN G EXPENDITURE 'INCURRED BY THE ASSESSEE IT RELATION T O THE TAX EXEMPT INCOME', THE DISALLOWANCE UNDER SECTION 14A READ WITH RULE 3D AS WORKED OUT BY THE ASSESSING OFFICER WAS NOT IN ACCORDANCE WITH LAW AND AS SUCH WORKING WAS NOT SUSTAINABLE. BY RESPECTFULLY FOLLOWING THE ABOVE DE CISIONS DISALLOWANCE EXCEEDING THE EXEMPT INCOME IS DELETED . THE GROUND OF APPEAL NO.13 IS PARTLY ALLOWED.' 5.2.1. ON PERUSAL OF THE ORDER OF THE ASSESSING OFF ICER AND THE REPLY OF THE ASSESSE, IT IS UNDISPUTED FACT THAT RU LE 8D IS APPLICABLE FROM AY 2008-09. HON'BLE ITAT WHILE DECI DING THE ISSUE HAS HELD THAT SINCE THE DIVIDEND INCOME IS EX EMPT FROM TAX THE PROVISIONS OF SECTION 14A DISALLOWING EXPENSES INCURRED FOR EARNING THE SAME ARE ATTRACTED. THEY RESTORED THE I SSUE TO THE AO FOR THE LIMITED PURPOSE OF APPLYING THE PROVISIONS OF SECTION 14A. IDENTICAL ISSUE ON IDENTICAL FACTS WAS DECIDED BY M E IN THE APPEAL NO.58/PKL/17-18 FOR AY 2014-15 VIDE ORDER DA TED 27.08.2019 AT PARA 12.2. EXEMPT INCOME IN THE PRESENT CASE IS RS.2,97,432/-. SINCE THE ISSUE HAS ALREADY BEEN DEC IDED BY THE UNDERSIGNED IN THE AY 2014-15 SUPRA, BY FOLLOWING T HE SAME FINDINGS ON IDENTICAL FACTS, AO IS DIRECTED TO DELE TE THE ADDITION ITA NOS.275 TO 279/CHD/2020 A.YS. 2006-07 TO 2010-11 PAGE 6 OF 20 EXCEEDING THE EXEMPT INCOME. THE GROUNDS OF APPEAL NOS.1 TO 3 ARE PARTLY ALLOWED. 6. AGGRIEVED BY THE SAME, THE ASSESSEE HAS FILED TH E PRESENT APPEALS RELATING TO THE IMPUGNED YEARS BEFORE US. THE GROUNDS RAISED FOR ASSESSMENT YEARS 2006-07 AND 2007-08, IT WAS POINTED OUT, WERE IDENTICALLY WORDED CHALLENGING TH E APPLICATION BY THE AO OF RULE 8D OF THE INCOME TAX RULES, 1962, FOR WORKING OUT DISALLOWANCE U/S 14A OF THE A CT AS ALSO CHALLENGING ON MERITS THE UPHOLDING OF DISALLOWAN CE BY THE LD.CIT(A) TO THE EXTENT OF EXEMPT INCOME EARNED. FO R THE SAKE OF CONVENIENCE THE GROUNDS RAISED IN ASSESSMENT YE AR 2006-07 ARE REPRODUCED HEREUNDER: 1. THAT THE CIT(A) HAS ERRED IN LAW & FACTS OF THE CASE IN UPHOLDING DISALLOWANCE UNDER SECTION 14A R. W. RULE 8D OF THE INCOME TAX ACT/RULES IGNORING THAT T HE PROVISIONS OF RULE 8D ARE NOT APPLICABLE TO THE RELEVANT ASSESSMENT YEAR WHICH IS HIGHLY UNJUSTIFIE D AND UNCALLED FOR. 2. THAT THE CIT(A) HAS ERRED IN LAW & FACTS OF THE CASE IN UPHOLDING DISALLOWANCE TO THE EXTENT OF RS.2,97,432/- WHICH IS HIGHLY UNJUSTIFIED AND UNCALLED FOR. 7. IT WAS POINTED OUT THAT FOR ASSESSMENT YEARS 200 8-09, 2009-10 AND 2010-11 THE ASSESSEE HAD RAISED THE SOL ITARY GROUND CHALLENGING THE ORDER OF THE LD.CIT(A) ON ME RITS, AS RAISED IN ASSESSMENT YEARS 2006-07. FOR THE SAKE O F CONVENIENCE THE GROUND RAISED IN A.Y 2008-09 IS REP RODUCED HEREUNDER: ITA NOS.275 TO 279/CHD/2020 A.YS. 2006-07 TO 2010-11 PAGE 7 OF 20 1. THAT THE CIT(A) HAS ERRED IN LAW & FACTS OF THE CASE IN UPHOLDING THE DISALLOWANCE TO THE EXTENT OFRS.4,33,381/- OVER AND ABOVE THE DISALLOWANCE OF RS.77,213/- MADE BY THE ASSESSEE WHICH IS HIGHLY UNJUSTIFIED AND UNCALLED FOR. 8. TAKING UP FIRST THE ISSUE RAISED IN GROUND NO.1 OF THE APPEALS PERTAINING TO ASSESSMENT YEARS 2006-07 AND 2007- 08,RELATING TO THE APPLICABILITY OF RULE 8D FOR CAL CULATING THE DISALLOWANCE OF EXPENSES U/S 14A OF THE ACT, THE LD .COUNSEL FOR THE ASSESSEE CONTENDED THAT THE SAID RULES WERE NOT IN FORCE FOR THE IMPUGNED YEAR AND, THEREFORE, THE DISALLOWA NCE OF EXPENSES MADE BY APPLYING THE SAID RULES OUGHT TO B E DELETED IN ENTIRETY. THE LD.COUNSEL FOR THE ASSESSEE DREW O UR ATTENTION TO HIS SUBMISSIONS MADE IN THIS REGARD BEFORE THE L D.CIT(A) AS UNDER: AT THE VERY OUTSET WE WOULD LIKE TO SUBMIT THAT THE PROVISIONS OF SECTION 14A(2), 14(3) AND RULE 8D ARE NTO APPLICABLE TO THE YEAR UNDER CONSIDERATION, FOR WHICH WE MAKE OUR SUBMISSIONS AS UNDER:- THE SUB-SS.(2) AND (3) OF SECTION 14A OF THE INCOME TAX ACT HAVE BEEN INSERTED BY THE FINANCE ACT, 2006 W.E.F. 1 ST APRIL, 2007. SUB-S.(2) LAYS DOWN THAT IF THE AO, HAVING REGARD TO THE ACCOUNTS OF THE ASSESSEE IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE IN RESPECT OF EXPENDITURE INCURRED IN RELA TION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INC OME UNDER THE ACT, THEN THE AO SHALL DETERMINE THE AMOU NT OF SUCH EXPENDITURE IN ACCORDANCE WITH METHOD AS MAY BE PRESCRIBED . SUB-S.(3) DECLARES THAT PROVISIONS OF SUB-S.(2) WOULD ALSO APPLY IN RELATION TO A CASE WHERE ASSESSEE CLAIMS THAT NO EXPENDITURE HAS BEEN INCURRED BY HIM IN RELATION TO INCOME WHICH DOES NOT FORM PART OF TOTAL INCOME. ITA NOS.275 TO 279/CHD/2020 A.YS. 2006-07 TO 2010-11 PAGE 8 OF 20 THUS THE SUB-SS.(2) AND (3) OF S. 14A ARE APPLICABL E FROM THE ASST. YR. 2007-08 ONWARDS. HOWEVER, SUB-S. 14A REMAINED AN EMPTY SHELL UNTIL THE INTRODUCTION OF R.8D ON 24 TH MARCH, 2008 WHICH GAVE CONTENT TO THE EXPRESSION SUCH METHOD AS MAY BE PRESCRIBED APPEARING IN S. 14A(2). THE RULE 8D BECAME OPERATIONAL AND APPLICABLE FROM AY 2008-09. IT IS WELL SETTLED LAW THAT THE PROVISIONS OF SECTI ON 14A AND RULE 8D WOULD OPERATE PROSPECTIVELY. FOR TH IS RELIANCE IS BEING PLACED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS:- COMMISSIONER OF INCOME-TAX V. ESSAR TELEHOLDINGS LTD. (2018) 401 ITR 445 (SC.. GODREJ & BOYCE MFG. CO. LTD. VS. COMMISSIONER OF INCOME TAX & ANR. 328 ITR 0081 (BOM.).. MAXOPP INVESTMENT LTD. & ORS. VS. COMMISSIONER OF INCOME TAX* (2012) 247 CTR 0162:.. IN VIEW OF ABOVE, WE SUBMIT THAT THE PROVISIONS OF SECTION 14(2), SECTION 14(3) AND RULE 8D ARE NOT APPLICABLE TO THE YEAR UNDER CONSIDERATION. THUS THE DISALLOWANCE MADE BY THE AO APPLYING RULE 8D BE DELETED. 9. THE LD.DR, ON THE OTHER HAND, CONTENDED THAT MER E APPLICABILITY OF RULE 8D, WHICH WAS NOT ENFORCEABLE OR ATTRACTED IN THOSE YEARS, WOULD NOT NEGATE THE ENTIRE DISALLO WANCE SINCE EVEN THE ITAT IN THE FIRST ROUND HAD HELD THAT THE DISALLOWANCE WITH RESPECT TO THE EXEMPT INCOME EARNED HAD TO BE CALCULATED. THAT MERELY BECAUSE THE AO HAD APPLIED A FORMULA WH ICH WAS NOT APPLICABLE IN THE IMPUGNED YEARS WOULD NOT MEAN THAT THE ENTIRE DISALLOWANCE CALCULATED BY HIM NEEDED TO BE DELETED. ITA NOS.275 TO 279/CHD/2020 A.YS. 2006-07 TO 2010-11 PAGE 9 OF 20 10. THEREAFTER ON THE MERITS OF THE CASE, THE LD.CO UNSEL FOR THE ASSESSEE CONTENDED THAT IN THE FACTS OF THE CAS E NO DISALLOWANCE OF EXPENSES WAS LIABLE TO BE MADE SINC E IT HAD BEEN DEMONSTRATED TO THE AUTHORITIES BELOW THAT THE INVESTMENTS MADE WERE VERY OLD, HAVING BEEN MADE SO ME 20-25 YEARS BACK OUT OF INTEREST FREE FUNDS IN THE FORM O F SHARE CAPITAL INVESTED BY THE GOVERNMENT IN THE ASSESSEE S CONCERN. THAT THE MATTER REGARDING THE SOURCE OF FUNDS ALREA DY STOOD SETTLED BY THE ITAT IN THE ASSESSEE CASE IN A.Y 200 3-04 & 2004-05 AND THE AO AFTER DUE VERIFICATION HAD DELET ED THE DISALLOWANCE OF INTEREST IN THOSE YEARS. OUR ATTEN TION WAS DRAWN TO THE SUBMISSIONS MADE BEFORE THE LD.CIT(A) IN THIS REGARD AS UNDER: HOWEVER ON MERITS WE SUBMIT AS UNDER:- DURING THE YEAR THE ASSESSEE HAS EARNED DIVIDEND INCOME OF RS.2,97,432/- I.E. RS.5760/- FROM UNI PRODUCTS LIMITED, RS.1,25,000/- FROM GRM OVERSEAS LIMITED, RS.1,,25,632/- FROM JBM AUTO COMPONENTS LTD. AND RS.41,040/- FROM INDUSTRIAL DEVELOPMENT BANK OF INDIA. THE DIVIDED INCOME RECEIVED DURING EH YEAR HAS BEEN DECLARED AS EXEMPT INCOME AS PER THE PROVISIONS OF INCOME TAX ACT. DUR ING THE YEAR THE ASSESSEE HAS NOT INCURRED ANY EXPENDITURE TO EARN THE DIVIDEND INCOME. HOWEVER HE AO HAS MADE THE DISALLOWANCE OF RS.53,03,657/- APPLYING RULE 8D(2)(II) AND RULE 8D2)(III) IGNORING THE SUBMISSIONS OF THE ASSESSEE WHICH ARE PLACED AT PB PAGE 15-18. IN THIS REGARD WE WOULD LIKE TO FIRST REFER TO THE PROVISIONS OF SECTION 14- A OF THE ACT WHICH ARE REPRODUCED AS BELOW: ITA NOS.275 TO 279/CHD/2020 A.YS. 2006-07 TO 2010-11 PAGE 10 OF 20 14A. FOR THE PURPOSES OF COMPUTING THE TOTAL INCOME UNDER THIS CHAPTER, 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. ON PERUSAL OF THE ABOVE, IT CAN BE SEEN THAT TO APPLY PROVISIONS OF SECTION 14A OF THE ACT, THE ASSESSEE MUST HAVE INCURRED EXPENDITURE IN RELATION TO EXEMPT INCOME. IN THIS REGARD WE SUBMIT AS UNDER:- THE ASSESSEE DURING THE YEAR HAS EARNED DIVIDEND INCOME FROM UNI PRODUCTS LIMITED, GRM OVERSEAS LIMITED, JBM AUTO COMPONENTS LTD. & INDUSTRIAL DEVELOPMENT BANK OF INDIA. THE INVESTMENTS IN THE SHARES OF M/S UNI PRODUCTS LIMITED WAS MADE IN THE YEAR 1987-88, GRM OVERSEAS LIMITED IN THE YEAR 1995-96, JBM AUTO COMPONENTS LTD. IN THE YEAR 1996-97 AND INDUSTRIAL DEVELOPMENT BANK OF INDIA IN THE EYAR 1995-96. IT IS PERTINENT TO MENTION HERE THAT NO INVESTMENT HAS BEEN MADE BY THE ASSESSEE DURING THE YEAR.(PB PAGE 19-22). THESE INVESTMENTS WERE MADE WAY BACK APPROXIMATELY 25 TO 35 YEARS AGO. THE WHOLE EXERCISE DOES NSTO REQUIRE ANY EXPENSE TO BE INCURRED. THE INVESTMENTS WERE MADE YEARS AGO AND THE DIVIDEND IS AUTOMATICALLY CREDITED THROUGH ECS MODE. THUS ONCE THE INVESTMENTS WERE MADE, THERE ARE HARDLY ANY EXPENSES WHICH ARE REQUIRED TO BE INCURRED . IT IS LIKE MAKING AN FDR OUT OF SURPLUS FUNDS, KEEP INVESTED, EARN INTEREST UNTIL FUNDS ARE REQUIRED. ONCE THE FDR IS MADE, INTEREST IS AUTOMATICALLY ACCRUING WHICH DOES NOT REQUIRE ANY AMOUNT OF EXPENSE TO BE INCURRED. THUS THE ASSESSEE HAS NOT INCURRED ANY EXPENSE DURING THE YEAR TO EARN EXEMPT INCOME. HOWEVER THE AO HAS MADE THE DISALLOWANCE IGNORING THE AFORESAID FACT. IT IS WELL SETTLED THA T THE DISALLOWANCE CAN BE MADE ONLY IT IS PROVED THAT THE ASSESSEE HAS INCURRED EXPENDITURE FOR EARNING THE EXEMPT INCOME. FOR THIS RELIANCE IS BEING PLACED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS:- ITA NOS.275 TO 279/CHD/2020 A.YS. 2006-07 TO 2010-11 PAGE 11 OF 20 IN THE DECISION IN THE CASE OF GODREJ & BOYCE MANUFACTURING CO. LTD. V. DY.CIT & ANR. (2017) 394 ITR 449 (SC) (PARA 36).. AGAIN IN THE JUDGMENT OF MAXOPP INVESTMENT LTD. V. COMMISSIONER OF INCOME TAX (2018) 402 ITR 640 (SC) VIDE PARA 32 IN VIEW OF THE ABOVE, THE FIRST CONDITION TO APPLY PROVISIONS OF SEC 14A OF THE ACT IS THAT THE ASSESSEE MUST HAVE INCURRED EXPENDITURE WHICH CAN BE SAID TO BE RELATED TO EXEMPT INCOME IS NOT BEING FULFILLED. SECONDLY, THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY EXPENDITURE WHICH HAS BEEN INCURRED BY THE ASSESSEE TO EARN THE EXEMPT INCOME. INSTEAD HAS SIMPLY APPLIED RULE 8D OF THE RULES IN A MECHANICAL MANNER AS A FORMULA AND CALCULATED THE DISALLOWANCE WHICH IS NOT APPLICABLE TO THE YEAR UNDER CONSIDERATION. IT IS WELL SETTLED THAT BEFORE ANY DISALLOWANCE IS MADE BY THE ASSESSING OFFICER, THE AO SHOULD BRING ON RECORD CERTAIN EXPENDITURE WHICH MUST HAVE BEEN INCURRED BY THE ASSESSEE, WHICH IN THE PRESENT CASE IS MISSING. FOR THIS RELIANCE IS PLACED ON THE FOLLOWING:- MAXOPP INVESTMENT LTD. & ORS. VS. CIT (2012) 247 CTR (DEL) 162 (2012) 347 ITR 272(DELHI) IN VIEW OF THE ABOVE IT IS STATED THAT THE AO HAS ERRED IN MAKING DISALLOWANCE WITHOUT BRINGING ON RECORD ANY EXPENDITURE WHICH HAS BEEN INCURRED FOR EARNING EXEMPT INCOME AND HAS ALSO FAILED TO RECORD ANY SATISFACTION BEFORE MAKING DISALLOWANCE. IT IS PERTINENT TO MENTION THAT THE AO INSTEAD OF RECORDING SATISFACTION HAS ONLY INSISTED ON THE FACT THAT THE DISALLOWANCE U/S 14A IS MADE AS PER THE DIRECTIONS OF THE HONORABLE ITAT. THE AO HAS FAILED TO CONSIDER THAT THE ITAT HAS RESTORED THE MATTER FOR LIMITED ITA NOS.275 TO 279/CHD/2020 A.YS. 2006-07 TO 2010-11 PAGE 12 OF 20 PURPOSE OF VERIFICATION TO THE AO TO SEE THE APPLICABILITY OF SECTION 14A ON THE ASSESSEE . THE AO WAS REQUIRED TO SEE WHETHER SECTION 14A WAS TO BE APPLIED ON THE ASSESSEE OR NOT BUT AO SIMPLY PROCEEDED TO APPLY THE SAME WITHOUT ANY APPLICATION OF MIND & WITHOUT RECORDING ANY SATISFACTION. THE AO NEITHER CONTROVERTED THE CONTENTION OF THE ASSESSEE NOR HAS BROUGHT ANY FALLACY IN THE CLAIM OF THE ASSESSEE. CONSIDERING THE FACT THAT THERE WAS ABSENCE OF SATISFACTION OF THE ASSESSING OFFICER REGARDING INCORRECTNESS OF CLAIM OF THE ASSESSEE AS THE AO HAS NOT POINTED OUT EVEN A SINGLE EXPENDITURE TO HAVE BEEN INCURRED FOR EARNING DIVIDEND INCOME WE PRAY THAT THE AO COULD NOT HAVE PROCEEDED TO DISALLOW EXPENDITURE INCURRED FOR EARNING EXEMPT INCOME U/S 14A APPLYING RULE 8D AND WE REQUEST THAT THE DISALLOWANCE MADE BY THE AO IS UNWARRANTED AND NEEDS TO BE DELETED. IT IS PERTINENT TO MENTION FURTHER THAT THE ASSESSEE HAD AMPLE RESERVES AND SURPLUS AND ALL THE INVESTMENTS WERE MADE BY THE ASSESSEE OUT OF THE INTEREST FREE FUNDS OF THE ASSESSEE. THE ASSESSEE HAD NOT MADE BY INVESTMENTS IN THE SHARES OUT OF THE BORROWED FUNDS. THE INVESTMENTS HAVE BEEN MADE BY THE ASSESSEE IN THE SHARES MORE THAN 25-35 YEARS AGO OUT OF THE FUNDS RECEIVED FROM THE STATE GOVERNMENT FOR THE PURPOSE OF INVESTING THE SAME. IT IS PERTINENT TO MENTION HERE THAT NO INVESTMENT HAS BEEN MADE BY THE ASSESSEE IN THE AFORESAID SHARES DURING THE YEAR(PB PAGE 19-22). ALSO, THE MATTER REGARDING THE SOURCE OF FUNDS FROM WHICH THE INVESTMENT HAS BEEN MADE IS ALREADY SETTLED BY THE ITAT IN THE ASSESSEES CASE ITSELF IN AY 2003-04 & AY 2004-05. FOR THIS, WE WOULD LIKE TO BRING ON RECORD THE FACTS OF THE CASE WHICH ARE AS UNDER.. ITA NOS.275 TO 279/CHD/2020 A.YS. 2006-07 TO 2010-11 PAGE 13 OF 20 THE AO AFTER DUE VERIFICATION HAD DELETED THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF INTEREST IN THE AFORESAID YEARS. THE COPY OF ORDER OF ITAT AND THE AO GIVING APPEAL EFFECT IS ENCLOSED HEREWITH AT PAGE 23-60. IT IS SETTLED FACT THAT THE NO INTEREST BEARING FUNDS HAVE BEEN INVESTED BY THE ASSESSEE IN SHARES. THE ENTIRE INCOME FROM WHICH DIVIDEND WAS EARNED DURING THE YEAR WAS FROM THE INVESTMENTS WHICH WERE EXISTING AS ON 01.04.2005. IN THE CASE, WHERE THE ASSESSEE HAD ENOUGH OWN SURPLUS FUNDS FOR THE PURPOSE OF MAKING THE SAID INVESTMENTS WHICH WERE INTEREST FREE, NO DISALLOWANCE CAN BE MADE U/S 14A READ WITH RULE 8D. FOR THIS RELIANCE IS PLACED ON THE FOLLOWING:- THE HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS. MAX INDIA LTD., ITA NO.186 OF 2013 (O&M) DATED 6.9.2016, .. CIT VS. WINSOME TEXTILE INDUSTRIES LIMITED 319 ITR 204 (P&H ). PRINCIPAL COMMISSIONER OF INCOME TAX VS. INDIA GELATINE AND CHEMICALS LTD.(2015)93 CCH 253 GUJHC. FURTHER IT HAS BEEN SETTLED BY THE APEX COURT THAT NO DISALLOWANCE ON ACCOUNT OF INTEREST EXPENSE IF BORROWED FUNDS HAVE NOT BEEN USED FOR INVESTMENTS.. THUS, THE AO HAS ERRED IN MAKING DISALLOWANCE ON ACCOUNT OF INTEREST AS PER THE PROVISIONS OF RULE 8D(2(II) OF THE INCOME TAX ACT. THEREFORE, WE REQUEST THAT THE ADDITION MADE BE DELETED. WITHOUT PREJUDICE TO THE ABOVE WE SUBMIT AS UNDER : IT IS WELL SETTLED THAT THE DISALLOWANCE CANNOT EXCEED THE EXEMPT INCOME . THE DELHI HIGH COURT IN JOINT INVESTMENTS PVT. ITA NOS.275 TO 279/CHD/2020 A.YS. 2006-07 TO 2010-11 PAGE 14 OF 20 LTD V CIT (ITA NO.117/2015) HELD THAT SECTION14A OR RULE 8D CANNOT BE INTERPRETED SO AS TO MEAN THAT THE ENTIRE TAX EXEMPT INCOME IS TO BE DISALLOWED. THE WINDOW FOR DISALLOWANCE IS INDICATED IN SECTION 14A OF THE ACT, AND IS ONLY TO THE EXTENT OF DISALLOWANCE OF EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO TAX EXEMPT INCOME. ACCORDINGLY,, THE TAX EXEMPT INCOME CANNOT BE DISALLOWED ENTIRELY. RELIANCE IS ALSO PLACED ON:- PRINCIPAL COMMISSIONER OF INCOME TAX VS. EMPIRE PACKAGE (P) LLTD. 136 DTR 0342 (P&H). PRINCIPAL CIT V. STATE BANK OF PATIALA.. PEST CONTROL INDIA PVT LIMITED (ITA NO.5048/MUM/2016). IT IS PERTINENT TO MENTION FURTHER THAT IN THE ASSESSEES OWN CASE FOR AY 2014-15 TO AY 2016-17, THE CIT(A) HAS HELD AS UNDER:- 12.2.1 ON CAREFUL PERUSAL OF FACTS OF THE CASE, I FIND MERIT IN THE ARGUMENTS OF THE APPELLANT ARS. FIRST AND FOREMOST, AO HAS FAILED TO BRING ON RECORD THAT BORROWED FUNDS HAVE BEEN USED TO MAKE INVESTMENT IN THE SHARES. MOREOVER IT HAS BEEN DECIDED BY VARIOUS JUDICIAL AUTHORITIES THAT DISALLOWANCE CANNOT EXCEED THE EXEMPT INCOME. THE DELHI HIGH COURT IN JOINT INVESTMENTS PVT LTD V CIT (ITA NO.117/2015) HAS HELD THAT SECTION 14A OR RULE 8D CANNOT BE INTERPRETED SO AS TO MEAN THAT THE ENTIRE TAX EXEMPT INCOME IS TO BE DISALLOWED. THE WINDOW FOR DISALLOWANCE IS INDICATED IN SECTION 14A OF THE ACT, AND IS ONLY TO THE EXTENT OF DISALLOWANCE OF EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO TAX EXEMPT INCOME. ACCORDINGLY, THE TAX EXEMPT INCOME CANNOT BE DISALLOWED ENTIRELY. SUPREME COURT HAS DISMISSED SLP ITA NOS.275 TO 279/CHD/2020 A.YS. 2006-07 TO 2010-11 PAGE 15 OF 20 OF THE DEPARTMENT AGAINST THE JUDGMENT OF DELHI HIGH COURT. SIMILAR VIEW HAS BEEN TAKEN BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME- TAX-1, CHANDIGARH VS. EMPIRE PACKAGE(P) LTD.(2017) 81 TAXMANN.COM 108 (PUNJAB & HARYANA) DATED 12.01.2016. THE FACTS OF THE CASE ARE THAT INCOME FROM DIVIDEND HAD BEEN SHOWN AT RS.1,11,564 WHEREAS DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D OF THE RULES WORKED OUT BY THE ASSESSING OFFICER CAME TO RS.4,09,675. THE HONBLE HIGH COURT HAS HELD THAT WHEN THE ASSESSEE CLAIMED THAT IT HAD NOT MADE ANY EXPENDITURE ON EARNING EXEMPT INCOME, THE ASSESSING OFFICER IN TERMS OF SUB-SECTION (2) OF SEC 14A WAS REQUIRED TO COLLECT SUCH MATERIAL EVIDENCE TO DETERMINE EXPENDITURE IF ANY INCURRED BY THE ASSESSEE IN RELATION TO EARNING OF EXEMPT INCOME. THE ASSESSING OFFICER DISALLOWED THE ENTIRE TAX EXEMPT INCOME WHICH IS NOT PERMISSIBLE AS PER SETTLED POSITION OF LAW. IN VIEW OF DECISION IN CIT VS. DEEPAK MITTAL [2013] 38TAXMANN.COM 83/219 TAXMAN 314/2014] 361 ITR 131 (PUNJ. & HAR) HOLDING THAT THE WINDOW FOR DISALLOWANCE IS INDICATED INSECTION14A, AND IS ONLY TO THE EXTENT OF DISALLOWING EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO THE TAX EXEMPT INCOME, THE DISALLOWANCE UNDER SEC 14A READ WITH RULE 8D AS WORKED OUT BY THE ASSESSING OFFICER WAS NOT IN ACCORDANCE WITH LAW AND AS SUCH WORKING WAS NOT SUSTAINABLE. BY RESPECTFULLY FOLLOWING THE ABOVE DECISIONS DISALLOWANCE EXCEEDING THE EXEMPT INCOME IS DELETED. IN VIEW OF THE AFORESAID JUDGMENTS WHEREIN IT HAS BEEN CATEGORICALLY HELD THAT THE DISALLOWANCE CANNOT EXCEED DIVIDEND INCOME AND ALSO EXEMPT INCOME CANNOT BE DISALLOWED ENTIRELY, IT IS REQUESTED THAT THE DISALLOWANCE BE RESTRICTED TO THE EXEMPT INCOME AS THE ASSESSING OFFICER HAS ITA NOS.275 TO 279/CHD/2020 A.YS. 2006-07 TO 2010-11 PAGE 16 OF 20 DISALLOWED RS.53,03,657/- U/S 14A AS AGAINST DIVIDEND INCOME OF RS.3,26,060/-. 11. THE LD.COUNSEL FOR THE ASSESSEE FURTHER POINTED OUT THAT THE DISALLOWANCE OF ADMINISTRATIVE EXPENSES IN ANY CASE WAS TO BE CALCULATED ONLY WITH RESPECT TO THE INVESTMENTS WHICH HAD EARNED EXEMPT INCOME IN THE FORM OF DIVIDEND. IN TH IS REGARD HE DREW OUR ATTENTION TO THE ORDER OF HONBLE DELHI HIGH COURT IN THE CASE OF ACB INDIA LIMITED VS. ACIT (2015) 37 4 ITR 108(DEL). 12. AT THIS JUNCTURE, ATTENTION WAS DRAWN OF BOTH T HE PARTIES TO THE FINDINGS OF THE LD.CIT(A) AS REPRODUCED ABOV E AND IT WAS POINTED OUT THAT THERE WERE NO CLARITY AS TO WHETH ER THE DISALLOWANCE OF EXPENSES RESTRICTED BY THE LD.CIT (A) TO THE EXTENT OF EXEMPT INCOME EARNED RELATED TO INTEREST EXPENSES OR ADMINISTRATIVE EXPENSES. IT WAS POINTED OUT THAT IN THE ABSENCE OF THE SAME IT WAS VIRTUALLY IMPOSSIBLE TO ADJUDICA TE THE ISSUE IN THE CONTEXT OF DISALLOWANCE OF INTEREST EXPENSES OR ADMINISTRATIVE EXPENSES AS ARGUED BY THE LD.COUNSEL . BOTH THE PARTIES AGREED TO THE SAME. 13. IT WAS, THEREFORE, STATED AT BAR THAT THE MATTE R NEEDED RECONSIDERATION AT THE END OF THE LD.CIT(A) TO GIVE CLEAR FINDINGS IN ALL THE IMPUGNED YEARS WITH RESPECT TO THE ITA NOS.275 TO 279/CHD/2020 A.YS. 2006-07 TO 2010-11 PAGE 17 OF 20 DISALLOWANCE UPHELD WHETHER IT RELATED TO INTEREST EXPENSES OR ADMINISTRATIVE EXPENSES. BOTH THE PARTIES FAIRLY AGPREED WITH THE SAME. 14. IN VIEW OF THE ABOVE, SINCE THE SUBMISSIONS OF THE LD.COUNSEL FOR THE ASSESSEE BEFORE US AGAINST THE DISALLOWANCE UPHELD U/S 14A OF THE ACT BEING EXPENSE SPECIFIC A ND THE LD.CIT(A) HAVING GIVEN NO FINDING REGARDING THE NAT URE OF DISALLOWED EXPENSES UPHELD BY HIM, WE RESTORE THE ISSUE RAISED BY THE ASSESSEE ON MERITS AGAINST THE SAID DISALLOWANCE BACK TO THE LD.CIT(A) FOR ADJUDICATION AFRESH. THE LD.CIT(A) IS DIRECTED TO CONSIDER THE SUBMISSIONS MADE BY THE AS SESSEE AND THEREAFTER ADJUDICATE THE ISSUE GIVING CLEAR FINDI NG REGARDING THE NATURE OF DISALLOWED EXPENSES UPHELD IF ANY. NE EDLESS TO ADD THE ASSESSEE BE GRANTED DUE OPPORTUNITY OF HE ARING. 15. VIS--VIS THE GROUND NO.1 RAISED BY THE ASSESS EE IN ITS APPEAL FILED RELATING TO ASSESSMENT YEARS 2006-07 A ND 2007-08 URGING THAT THE ENTIRE DISALLOWANCE MADE U/S 14A OF THE ACT NEEDED TO BE DELETED SINCE RULE 8D WAS NOT APPLICAB LE IN THE IMPUGNED YEARS, WE ARE NOT CONVINCED WITH THE SAME. MERELY BECAUSE THE AO HAD ADOPTED AN INCORRECT METHOD FOR WORKING OUT THE DISALLOWANCE DOES NOT MEAN THAT THE ENTIRE DISALLOWANCE WAS NOT TENABLE IN LAW, MORE PARTICULA RLY WHEN THE ITAT HAD IN THE FIRST ROUND HELD THAT IN THE LI GHT OF THE FACT ITA NOS.275 TO 279/CHD/2020 A.YS. 2006-07 TO 2010-11 PAGE 18 OF 20 THAT THE ASSESSEE HAD EARNED EXEMPT INCOME, SECTION 14A OF THE ACT WAS ATTRACTED AND THE AO WAS ONLY REQUIRED TO WORK OUT THE DISALLOWANCE AS PER THE PROVISIONS OF LAW. 16. HAVING HELD SO, HOWEVER, WE ARE OF THE VIEW THA T THE INCORRECT APPLICATION OF FORMULA BY THE AO FOR THE IMPUGNED YEARS NEEDS TO BE LOOKED INTO AND A PROPER METHOD F OR WORKING OUT THE DISALLOWANCE NEED TO BE ARRIVED AT IN THE S AID TWO YEARS I.E. 2006-07 AND 2007-08. THIS ISSUE, THEREFORE, A LSO NEEDS RECONSIDERATION AT THE END OF THE LD.CIT(A). 17. FOR THE AFORESAID REASONS, THEREFORE, ALL THE A PPEALS ARE RESTORED BACK TO THE LD.CIT(A) WITH THE DIRECTION T O REWORK THE AMOUNT OF DISALLOWANCE OF EXPENSES U/S 14A FOR ALL THE ASSESSMENT YEARS IN ACCORDANCE WITH LAW, GIVING A C LEAR FINDING OF THE NATURE OF THE EXPENSES DISALLOWED. 18. IN EFFECT IN ITA NOS.275 & 276/CHD/2020, GROUND NO.1 CHALLENGING THE APPLICATION OF RULE 8D FOR CALCULAT ING DISALLOWANCE OF EXPENSES U/S 14A OF THE ACT, IS RES TORED BACK TO THE LD.CIT(A) WITH THE DIRECTIONS TO CALCULATE T HE SAME AS PER APPROPRIATE METHOD, IN ACCORDANCE WITH LAW. NEE DLESS TO ADD DUE OPPORTUNITY OF HEARING BE GIVEN TO THE ASSE SSEE. GROUND NO.2 RAISED BY THE ASSESSEE CHALLENGING THE MERITS OF THE DISALLOWANCE U/S 14A OF THE ACT, UPHE LD IS ALSO RESTORED BACK TO THE LD.CIT(A) TO ADJUDICATE AFRESH THE ISSUE IN ITA NOS.275 TO 279/CHD/2020 A.YS. 2006-07 TO 2010-11 PAGE 19 OF 20 ACCORDANCE WITH LAW GIVING CLEAR FINDING REGARDING THE NATURE OF DISALLOWED EXPENSES U/S 14A OF THE ACT, UPHELD B Y HIM IF ANY. DUE OPPORTUNITY OF HEARING BE GIVEN TO THE ASS ESSEE. THE APPEALS IN ITA NO.275 & 276/CHD/2020 ARE ALLOW ED FOR STATISTICAL PURPOSES. 19. IN ITA NOS.277 TO 279/CHD/2020 GROUND NO.1 RAISED BY THE ASSESSEE CHALLENGING THE MERITS OF THE DISALLOW ANCE U/S 14A OF THE ACT, UPHELD IS RESTORED BACK TO THE CIT( A) TO ADJUDICATE THE ISSUE IN ACCORDANCE WITH LAW GIVING CLEAR FINDING REGARDING THE NATURE OF DISALLOWED EXPENSES U/S 14A OF THE ACT, UPHELD BY HIM IF ANY. DUE OPPORTUNITY OF HEARING BE GIVEN TO THE ASSESSEE THE APPEALS IN ITA NO.277 TO 279/CHD/2020 ARE ALLOW ED FOR STATISTICAL PURPOSES. 20. IN THE RESULT, ALL THE ABOVE APPEALS OF THE ASS ESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 04.03.2021. SD/- SD/- (DIVA SINGH) (ANNAPURNA GUPTA) !'/ JUDICIAL MEMBER ()'/ ACCOUNTANT MEMBER DATED: 4 TH MARCH, 2021 * * ITA NOS.275 TO 279/CHD/2020 A.YS. 2006-07 TO 2010-11 PAGE 20 OF 20 *+ ,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' - / CIT 4. ' - ( )/ THE CIT(A) 5. +./ 0 , $ 0 , 123/4 / DR, ITAT, CHANDIGARH 6. /3 / GUARD FILE ' / BY ORDER, / ASSISTANT REGISTRAR