M/s. Amtek Ring Gears Ltd., New Delhi V. DCIT, New Delhi

ITA 2790/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97144 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 07-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVINDER MAINI
• Keywords: Search and seizure; Earning of tax free income; Condonation of delay
• Section: 14A; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A : NEW DELHI BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO . 2788 /DEL/201 3 ASSESSMENT YEAR: 2008 - 09 AMTEK CRANK SHAFTS INDIA LTD. VS. ADDL. CIT, 4, LSC, BHANOT APARTMENTS, RANGE - 1, NEW DELHI PUSHP VIHAR, NEW DELHI (PAN: AACCA7535P ) (APPELLANT) (RESPONDENT) AND ITA NO. 27 89 /DEL/2013 ASSESSMENT YEAR: 2008 - 09 AMTEK INDIA LTD. VS. D CIT, 4, LSC, BHANOT APARTMENTS, CIRCLE - 1, NEW DELHI PUSHP VIHAR, NEW DELHI (PAN: AAACA8504G ) (APPELLANT) (RESPONDENT) AND ITA NO. 2790 /DEL/2013 ASSESSMENT YEAR: 2008 - 09 AMTEK RING GEARS LTD. VS. DCIT, 4, LSC, BHANOT APARTMENTS, CIRCLE - 1, NEW DELHI PUSHP VIHAR, NEW DELHI (PAN:AAACA8504G) (APPELLANT) (RESPONDENT) APPELLANT BY : DR. RAKESH GUPTA, ADV., SH. TARUN KUMAR, ADV. RESPONDENT BY : SH. RAVINDER MAINI, SR. DR DATE OF HEARING: 08.07.2015 DATE OF PRONOUNCEMENT: 02.09.2015 2 ORDER PER INTURI RAMA RAO, A.M. : THESE ARE THREE APPEALS FILED BY THE ASSESSEE COMPANY FOR THE ASSESSMENT YEAR 2008 - 09 DIRECTED AGAINST DIFFERENT ORDERS OF CIT(A) , EACH DATED 23.03.2012. SINCE COMMON ISSUES ARE INVOLVED IN ALL THE APPEAL S, WE PROCEED TO DECIDE THE APPEALS BY A CONSOLIDATED ORDER. THE GROUNDS OF APPEAL RAISED IN ITA NO. 2788/DEL/2013 ARE AS UNDER: 1. THAT THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS) - IV , NEW DELHI, THE COMMISSIONER (APPEAL) , DATED 23.03.2012 , THE IMPUGNED ORDER, I S WRONG ON FACTS AND BAD IN LAW; 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE 2. COMMISSIONER (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE OF EXPEN DITURE OF RS. 67,45,880/ - UNDER SECTION 14A OF THE ACT BY APPLYING RULE 8D OF THE RULES; 2.1 THAT THE COMMISSIONER (APPEALS) FAILED TO APPRECIATED THAT RULE 8D OF THE RULES WAS APPLICABLE AFTER RECORDED WITH REASONS AS TO WHY THE CLAIM OF THE APPELLANT THA T NO EXPENDITURE WAS INCURRED OR THE EXPENDITURE INCURRED WAS NOT MORE THAN THE EXPENDITURE ADDED BY THE APPELLANT FOR THE DIVIDEND INCOME WAS INCORRECT. HE FAILED TO APPRECIATE THAT RULE 8D OF THE RULES WAS NOT APPLICABLE IN THE INSTANT CA SE AS THERE WAS NO SUCH FINDING; 2.2 THAT THE COMMISSIONER (APPEALS) FAILED TO APPRECIATE THAT THE ENTIRE EXPENDITURE WAS INCURRED BY THE APPELLANT FOR THE PURPOSES OF ITS BUSINESS AND NO EXPENDITURE WAS INCURRED FOR THE DIVIDEND INCOME EARNED AND AS SUCH NO EXPENDITURE W AS TO BE DEDUCTED UNDER THE SAI D PROVISIONS; 2.3 THAT THE COMMISSIONER (APPEALS) ERRED IN DETERMINING THE DISALLOWANCE AT RS. 9,08,951/ - UNDER RULE 8D (2)(II) OF THE RULES; 2.4 THAT THE COMMISSIOENR (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE UNDER RULE 8D(2)(III) OF THE RULES AT RS. 59,76,929/ - ; 2.5 THAT THE DISALLOWANCE OF RS. 67,45,880/ - UNDER SECTION 14A OF THE ACT S EXCESSIVE AND UNREASONABLE; 3. THAT THE RELIEFS PRAYED FOR MAY KINDLY BE ALLOWED AND THE ORDERS(S) OF THE ASSESSING OFFICER AND/OR COMMISSIONER (APPEALS) MAY KINDLY BE QUASHED, SET ASIDE, ANNULLED OR MODIFIED; 4. THAT THE AFORESAID GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER; 3 5. THAT THE APPELLANT CRAVES LEAVE TO VARY, ALTER, AMEND OR ADD TO THE AFORESAID GROUNDS OF APPEAL B EFORE OR AT THE TIME OF HEARING OF THE ABOVE APPEAL. 2. FOR THE SAKE OF CONVENIENCE AND BREVITY, THE FACTS IN ITA NO. 2788/DEL/2013, ARE STATED AS BELOW: 2.1 BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY WAS HOLDING SOME INVESTMENTS I N THE FORM OF UNQUOTED EQUITY SHARES OF GROUP COMPANIES WHICH HELD ONLY FOR THE PURPOSE OF CONTROL MANAGEMENT AND ONE OF THE ASSOCIATE S OF THE GROUP COMPANIES. THE APPELLANT ITSELF MADE A SUO MOTU DISALLOWANCE OF SOME EXPENDITURE AS RELATING TO EXEMPT INCO ME WHEREAS THE ASSESSING OFFICER APPLIED THE PROVISIONS OF RULE 8D OF INCOME TAX RULES, 1962 FOR THE PURPOSE OF WORKING OF TH E DISALLOWANCES UNDER SECTION 14 A OF THE ACT. THE CONTENTION OF THE APPELLANT COMPANY IS THAT THE INTENTION OF THE INVESTMENT HAD N EVER BEEN TO EARN THE DIVIDEND AND THEREFORE, THE PROVISIONS OF RULE 8D CANNOT BE APPLIED, NOT BEEN ACCEPTED BY THE ASSESSING OFFICER. BEING AGGRIEVED , AN APPEAL WAS FILED BEFORE THE CIT(A), WHO WHILE UPHOLDING THE APPLICABILITY OF THE PROVISIONS OF RU LE 8D , HAD GRANTED THE PART RELIEF WHILE WORKING OUT THE DISALLOWANCE. BEING AGGRIEVED, THE PRESENT APPEALS HAVE BEEN FILED BY THE APPELLANT COMPANY BEFORE US. 3. BEFORE WE PROCEED WITH THE DISPOSAL OF THE GROUNDS OF APPEAL, IT IS NECESSARY TO DEAL WITH THE APPLICATION FILED BY THE APPELLANT FOR CONDONATION OF DELAY. THERE IS DELAY OF 344 DAYS IN FILING OF THESE APPEALS. THE APPELLANT HAD FILED THE APPLICATION DATED 28.10.2013 PRAYING FOR CONDONATION OF DELAY IN THE 4 CIRCUMSTANCES THAT THE DELAY HAD OCCURR ED BECAUSE OF PRESSURE OF WORK ON ACCOUNT OF SEVERAL NOTICES FROM THE INCOME TAX DEPARTMENT OWING TO SEARCH AND SEIZURE OPERATIONS CONDUCTED IN THE GROUP OF COMPANIES OF THE APPELLANT. AFTER PERUSAL OF THE APPLICATION FOR CONDONATION OF DELAY, WE ARE OF TH E CONSIDERED OPINION THAT IN THE INTEREST OF JUSTICE, THE DELAY OF 344 DAYS SHOULD BE CONDONED AS WE APPRECIATE THE DIFFICULTIES FACED BY THE APPELLANT COMPANY ON ACCOUNT OF 598 NOTICES RECEIVED FROM THE INCOME TAX DEPARTMENT FOLLOWING THE SEARCH AND SEIZU RE OPERATION. ACCORDINGLY, THE DELAY OF 344 DAYS IN FILLING THE PRESENT APPEALS IS CONDONED. 4. THIS BRINGS US TO THE GROUNDS RELATING TO THE APPLICABILITY OF SECTION 14A READ WITH RULE 8D OF THE INCOME TAX RULES, 1962 IN THESE APPEALS. 5. LEARNED COUNSEL FOR THE APPELLANT SUBMITTED THAT THE INVESTMENTS ARE MADE ONLY FOR THE PURPOSE OF CONTROLLED MANAGEMENT OF THE GROUP OF THE COMPANIES. THE INTENTION HAD NEVER BEEN TO E A R N THE DIVIDEND INCOME. THEREFORE, THE PROVISIONS OF SECTION 14A CANNOT BE APPLIED. 6. ANOTHER LIMB OF THE ARGUMENTS OF THE LEARNED COUNSEL FOR THE ASSESEE IS THAT THERE ARE INVESTMENTS WHICH NEVER YIELDED ANY DIVIDEND INCOME AND THEREFORE WHILE CALCULATING THE VALUE OF INVESTMENTS AS PER RULE 8D AS ONLY THOSE INVESTMENTS W HICH YIELDED DIVIDEND INCOME A L O N E TO BE CONSIDERED. IN THIS REGARD, HE PLACED RELIANCE ON THE DECISIONS OF COORDINATE BENCH OF AHMEDABAD ITAT IN THE CASE OF SARABHAI HOLDINGS PVT. LTD. VS. ACIT, ITA NO. 2328/AHD/2012, DATED 11.04.2014 (AHD.)(TRIB.) AS WELL ON THE DECISION OF 5 COORDINATE BENCH OF KOLKATA ITAT IN THE CASE OF DCIT VS. SALVEL ADVERTISING PVT. LTD. [2015] 58 TAXMANN.COM 196 (KOLKATA) (TRIB.) , IN SUPPORT OF THE PROPOSITION THAT WHEN THE INVESTMENTS ARE MADE FOR STRATEGIC PURPOSES, NO DISAL LOWANCES UNDER SECTION 14A SHOULD BE MADE AND FINALLY SUBMITTED THAT NO SATISFACTION WAS RECORDED BY THE ASSESSING OFFICER AS TO HOW THE DISALLOWANCE MADE BY THE APPELLANT ITSELF WAS UNREASONABLE AND UNSATISFACTORY AND IN SUPPORT OF THIS PROPOSITION, HE RE LIED UPON THE COORDINATE BENCH OF THE TRIBUNAL, DELHI IN THE CASE OF M/S MINDA CAPITAL LTD. VS. DCIT, ITA NO. 1568/DEL/2013, DATED 11.03.2015 . 7. ON THE OTHER HAND, THE LD. SENIOR DR RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 8. WE HAVE HEARD THE RIV AL SUBMISSIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. IN THESE APPEALS, WE HAVE TO ADJUDICATE WHETHER THE PROVISIONS OF SECTION 14A CAN BE APPLIED TO THE FACTS OF THE PRESENT CASES. WE NOTICE FROM THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER P ROCEDED WITH THE CALCULATION AS PER RULE 8D FOR THE PURPOSES OF WORKING OUT THE DISALLOWANCE UNDER SECTION 14A OF THE ACT. WITHOUT RENDERING ANY FINDING AS TO HOW THE DISALLOWANCES OFFERED BY THE APPELLANT IS UNREASONABLE AND UNSATISFACTORY. NOW IT IS SETT LED PRINCIPLE OF LAW THAT WITHOUT RECORDING THE SATISFACTION IN THIS BEHALF THE DISALLOWANCES WORKED OUT BY THE ASSESSING OFFICER CANNOT BE UPHELD. THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. TAIKISHA ENGINEERING 6 INDIA LTD. IN ITA NO. 115/ 2014 AND 119/2014, DT. 25.11.2014, VIDE PARA 10 ONWARDS HELD AS FOLLOWS : 10. HAVING HEARD THE COUNSEL FOR THE PARTIES, WE FEEL THAT THE RESPONDENT ASSESSEE IS ENTITLED TO SUCCEED ON SOMEWHAT DIFFERENT GROUNDS AND REASONS, THAN THOSE ELUCIDATED BY THE TRI BUNAL. 11. SECTION 14A OF THE ACT IS RELEVANT AND REPRODUCED BELOW: - 14A. (1) 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 WHIC H DOES NOT FORM PART OF THE TOTAL INCOME UNDER THIS ACT. (2) THE ASSESSING OFFICER SHALL DETERMINE THE AMOUNT OF EXPENDITURE INCURRED IN RELATION TO SUCH INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME 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 NOT FORM PART OF THE TOTAL INCOM E UNDER THIS ACT. (3) THE PROVISIONS OF SUB - SECTION (2) SHALL ALSO APPLY 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. PROV IDED THAT NOTHING CONTAINED IN THIS SECTION SHALL EMPOWER THE ASSESSING OFFICER EITHER TO REASSESS UNDER SECTION 147 OR PASS AN ORDER ENHANCING THE ASSESSMENT OR REDUCING A REFUND ALREADY MADE OR OTHERWISE INCREASING THE LIABILITY OF THE ASSESSEE UNDER SEC TION 154, FOR ANY ASSESSMENT YEAR BEGINNING ON OR BEFORE THE 1ST DAY OF APRIL, 2001. SECTION 14A OF THE ACT POSTULATES AND STATES THAT NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF EXPENDITURE INCURRED BY AN ASSESSEE IN RELATION TO INCOME WHICH DOES NOT F ORM PART OF THE TOTAL INCOME UNDER THE ACT. UNDER SUB SECTION (2) TO SECTION 14A OF THE ACT, THE ASSESSING OFFICER IS REQUIRED TO EXAMINE THE ACCOUNTS OF THE ASSESSEE AND ONLY WHEN HE IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE IN RE SPECT OF EXPENDITURE IN RELATION TO EXEMPT INCOME, THE ASSESSING OFFICER CAN DETERMINE THE AMOUNT OF EXPENDITURE WHICH SHOULD BE DISALLOWED IN ACCORDANCE WITH SUCH METHOD AS PRESCRIBED, I.E. RULE 8D OF THE RULES (QUOTED AND ELUCIDATED BELOW). THEREFORE, T HE ASSESSING OFFICER AT THE FIRST INSTANCE MUST EXAMINE THE DISALLOWANCE MADE BY THE ASSESSEE OR THE CLAIM OF THE ASSESSEE THAT NO EXPENDITURE WAS INCURRED TO EARN THE EXEMPT INCOME. IF AND ONLY IF THE ASSESSING OFFICER IS NOT SATISFIED ON THIS COUNT AFTER MAKING REFERENCE TO THE ACCOUNTS, THAT HE IS ENTITLED TO ADOPT THE METHOD AS PRESCRIBED I.E. RULE 8D OF THE RULES. THUS, RULE 8D IS NOT ATTRACTED AND APPLICABLE TO ALL ASSESSEE WHO HAVE EXEMPT INCOME AND IT IS NOT COMPULSORY AND NECESSARY THAT AN ASSESSEE MUST VOLUNTARILY COMPUTE DISALLOWANCE AS PER RULE 8D OF THE RULES. WHERE THE DISALLOWANCE OR NIL DISALLOWANCE MADE BY THE ASSESSEE IS FOUND TO BE UNSATISFACTORY ON EXAMINATION OF ACCOUNTS, THE ASSESSING OFFICER IS ENTITLED AND AUTHORISED TO COMPUTE THE D EDUCTION UNDER RULE 8D OF THE RULES. THIS PRE - CONDITION AND STIPULATION AS NOTICED BELOW IS ALSO MANDATED IN SUB RULE (1) TO RULE 8D OF THE RULES. 12. RULE 8D OF THE RULES, AGAIN FOR THE SAKE OF CONVENIENCE, IS REPRODUCED BELOW: - 8D. (1) WHERE THE ASSE SSING OFFICER, HAVING REGARD TO THE ACCOUNTS OF THE ASSESSEE OF A PREVIOUS YEAR, IS NOT SATISFIED WITH (A) THE CORRECTNESS OF THE CLAIM OF EXPENDITURE MADE BY THE ASSESSEE; OR (B) THE CLAIM MADE BY THE ASSESSEE THAT NO EXPENDITURE HAS BEEN INCURRED, I N 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 7 EXPENDITURE IN RELATION TO SUCH INCOME IN ACCORDANCE WITH THE PROVISIONS OF SUB - RULE (2). (2) THE EXPENDITURE IN RELATI ON TO INCOME WHICH DOES 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 IN CURRED EXPENDITURE 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 FORMULA, NAMELY : A B/C WHERE A = AMOUNT OF EXPENDITURE BY WAY O F INTEREST OTHER THAN THE AMOUNT OF INTEREST INCLUDED IN CLAUSE (I) INCURRED DURING THE PREVIOUS YEAR ; B = THE AVERAGE OF VALUE OF INVESTMENT, INCOME FROM WHICH DOES NOT OR SHALL NOT FORM PART OF THE TOTAL INCOME, AS APPEARING IN THE BALANCE SHEET OF THE ASSESSEE, ON THE FIRST DAY AND THE LAST DAY OF THE PREVIOUS YEAR ; C = THE AVERAGE OF TOTAL ASSETS AS APPEARING IN THE BALANCE SHEET OF THE ASSESSEE, ON THE FIRST DAY AND THE LAST DAY OF THE PREVIOUS YEAR ; (III) AN AMOUNT EQUAL TO ONE - HALF PER C ENT OF THE AVERAGE OF THE VALUE OF INVESTMENT, INCOME FROM WHICH DOES NOT OR SHALL NOT FORM PART OF 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 PURPOSES OF THIS RU LE, THE TOTAL ASSETS SHALL MEAN, TOTAL ASSETS AS APPEARING IN THE BALANCE SHEET EXCLUDING THE INCREASE ON ACCOUNT OF REVALUATION OF ASSETS BUT INCLUDING THE DECREASE ON ACCOUNT OF REVALUATION OF ASSETS. SUB RULE (1) CATEGORICALLY AND SIGNIFICANTLY STA TES THAT THE ASSESSING OFFICER HAVING REGARD TO THE ACCOUNT OF THE ASSESSEE AND ON NOT BEING SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF EXPENDITURE MADE BY THE ASSESSEE OR CLAIM THAT NO EXPENDITURE WAS INCURRED IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT, CAN GO ON TO DETERMINE THE DISALLOWANCE UNDER SUB RULE (2) TO RULE 8D OF THE RULES. SUB RULE (2) WILL NOT COME INTO OPERATION UNTIL AND UNLESS THE SPECIFIC PRE - CONDITION IN SUB RULE (1) IS SATISFIED. THUS, SECTION 1 4A(2) OF THE ACT AND RULE 8D(1) IN UNISON AND AFFIRMATIVELY RECORD THAT THE COMPUTATION OR DISALLOWANCE MADE BY THE ASSESSEE OR CLAIM THAT NO EXPENDITURE WAS INCURRED TO EARN EXEMPT INCOME MUST BE EXAMINED WITH REFERENCE TO THE ACCOUNTS, AND ONLY AND WHEN THE EXPLANATION/CLAIM OF THE ASSESSEE IS NOT SATISFACTORY, COMPUTATION UNDER SUB RULE (2) TO RULE 8D OF THE RULES IS TO BE MADE. 13. WE NEED NOT, THEREFORE, GO ON TO SUB RULE (2) TO RULE 8D OF THE RULES UNTIL AND UNLESS THE ASSESSING OFFICER HAS FIRST R ECORDED THE SATISFACTION, WHICH IS MANDATED BY SUB SECTION (2) TO SECTION 14A OF THE ACT AND SUB RULE (1) TO RULE 8D OF THE RULES. 14. THE VIEW AND LEGAL RATIO EXPRESSED ABOVE IS NOT BEING ELUCIDATED FOR THE FIRST TIME. THE DELHI HIGH COURT IN MAXOPP INVE STMENT LTD. VS. COMMISSIONER OF INCOME TAX [2012] 347 ITR 272, HAS OBSERVED: - SCOPE OF SUB - SECTIONS (2) AND (3) OF SECTION 14A SUB - SECTION (2) OF SECTION 14 A OF THE SAID ACT PROVIDES THE MANNER IN WHICH THE ASSESSING OFFICER IS TO DETERMINE THE AMOUNT OF EXPENDITURE INCURRED IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME. HOWEVER, IF WE EXAMINE THE PROVISION CAREFULLY, WE WOULD FIND THAT THE ASSESSING OFFICER IS REQUIRED TO DETERMINE THE AMOUNT OF SUCH EXPENDITURE ONLY IF THE ASSESS ING 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 NOT FORM PART OF THE TOTAL INCOME UNDER THE SAID ACT. IN OTHER WO RDS, THE REQUIREMENT OF THE ASSESSING OFFICER EMBARKING UPON A DETERMINATION OF THE AMOUNT OF EXPENDITURE INCURRED IN RELATION TO EXEMPT INCOME WOULD BE TRIGGERED ONLY IF THE ASSESSING OFFICER RETURNS A FINDING THAT HE IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE IN RESPECT OF SUCH EXPENDITURE. THEREFORE, THE CONDITION PRECEDENT FOR THE ASSESSING OFFICER ENTERING UPON A DETERMINATION OF THE AMOUNT OF THE EXPENDITURE INCURRED IN RELATION TO EXEMPT INCOME IS THAT THE ASSESSING OFFICER MU ST RECORD THAT HE IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE 8 ASSESSEE IN RESPECT OF SUCH EXPENDITURE. SUB - SECTION (3) IS NOTHING BUT AN OFFSHOOT OF SUB - SECTION (2) OF SECTION 14A. SUB - SECTION (3) APPLIES TO CASES WHERE THE ASSESSEE CLAIMS TH AT NO EXPENDITURE HAS BEEN INCURRED IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE SAID ACT. IN OTHER WORDS, SUB - SECTION (2) DEALS WITH CASES WHERE THE ASSESSEE SPECIFIES A POSITIVE AMOUNT OF EXPENDITURE IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE SAID ACT AND SUB - SECTION (3) APPLIES TO CASES WHERE THE ASSESSEE ASSERTS THAT NO EXPENDITURE HAD BEEN INCURRED IN RELATION TO EXEMPT INCOME. IN BOTH CASES, THE ASSESSING OFFICER, 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 PRESCRIBED METHOD, AS MENTIONED IN SUB - SECTION (2) OF SECT ION 14A OF THE SAID ACT. IT IS ONLY IF THE ASSESSING OFFICER IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE, IN BOTH CASES, THAT THE ASSESSING OFFICER GETS JURISDICTION TO DETERMINE THE AMOUNT OF EXPENDITURE INCURRED IN RELATION TO SUCH INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE SAID ACT IN ACCORDANCE WITH THE PRESCRIBED METHOD. THE PRESCRIBED METHOD BEING THE METHOD STIPULATED IN RULE 8D OF THE SAID RULES. WHILE REJECTING THE CLAIM OF THE ASSESSEE WITH REGARD TO THE E XPENDITURE OR NO EXPENDITURE, AS THE CASE MAY BE, IN RELATION TO EXEMPT INCOME, THE ASSESSING OFFICER WOULD HAVE TO INDICATE COGENT REASONS FOR THE SAME. RULE 8D AS WE HAVE ALREADY NOTICED, SUB - SECTION (2) OF SECTION 14A OF THE SAID ACT REFERS TO THE MET HOD OF DETERMINATION OF THE AMOUNT OF EXPENDITURE INCURRED IN RELATION TO EXEMPT INCOME. THE EXPRESSION USED IS SUCH METHOD AS MAY BE PRESCRIBED . WE HAVE ALREADY MENTIONED ABOVE THAT BY VIRTUE OF NOTIFICATION NO.45 OF 2008, DATED MARCH 24, 2008, THE CE NTRAL BOARD OF DIRECT TAXES INTRODUCED RULE 8D IN THE SAID RULES. THE SAID RULE 8D ALSO MAKES IT CLEAR THAT WHERE THE ASSESSING OFFICER, HAVING REGARD TO THE ACCOUNTS OF THE ASSESSEE OF A PREVIOUS YEAR, IS NOT SATISFIED WITH (A) THE CORRECTNESS OF THE CLAI M OF EXPENDITURE MADE BY THE ASSES SEE; OR (B) THE CLAIM MADE BY THE ASSESSEE THAT NO EXPENDITURE HAS BEEN INCURRED IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE SAID ACT FOR SUCH PREVIOUS YEAR, THE ASSESSING OFFICER SHALL DE TERMINE THE AMOUNT OF THE EXPENDITURE IN RELATION TO SUCH INCOME IN ACCORDANCE WITH THE PROVISIONS OF SUB - RULE (2) OF RULE 8D. WE MAY OBSERVE THAT RULE 8D(1) PLACES THE PROVISIONS OF SECTION 14A(2) AND (3) IN THE CORRECT PERSPECTIVE. AS WE HAVE ALREADY SEE N, WHILE DISCUSSING THE PROVISIONS OF SUBSECTIONS (2) AND (3) OF SECTION 14A, THE CONDITION PRECEDENT FOR THE ASSESSING OFFICER TO HIMSELF DETERMINE THE AMOUNT OF EXPENDITURE IS THAT HE MUST RECORD HIS DISSATISFACTION WITH THE CORRECTNESS OF THE CLAIM OF E XPENDITURE MADE BY THE ASSESSEE OR WITH THE CORRECTNESS OF THE CLAIM MADE BY THE ASSESSEE THAT NO EXPENDITURE HAS BEEN INCURRED. IT IS ONLY WHEN THIS CONDITION PRECEDENT IS SATISFIED THAT THE ASSESSING OFFICER IS REQUIRED TO DETERMINE THE AMOUNT OF EXPENDI TURE IN RELATION TO INCOME NOT INCLUDABLE IN TOTAL INCOME IN THE MANNER INDICATED IN SUB - RULE (2) OF RULE 8D OF THE SAID RULES. IT IS, THEREFORE, CLEAR THAT DETERMINATION OF THE AMOUNT OF EXPENDITURE IN RELATION TO EXEMPT INCOME UNDER RULE 8D WOULD ONLY COME INTO PLAY WHEN THE ASSESSING OFFICER REJECTS THE CLAIM OF THE ASSESSEE IN THIS REGARD. IF ONE EXAMINES SUB - RULE (2) OF RULE 8D, WE FIND THAT THE METHOD FOR DETERMINING THE EXPENDITURE IN RELATION TO EXEMPT INCOME HAS THREE COMPONENTS. THE FIRST COMPON ENT BEING THE AMOUNT OF EXPENDITURE DIRECTLY RELATING TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME. THE SECOND COMPONENT BEING COMPUTED ON THE BASIS OF THE FORMULA GIVEN THEREIN IN A CASE WHERE THE ASSESSEE INCURS EXPENDITURE BY WAY OF INTEREST W HICH IS NOT DIRECTLY ATTRIBUTABLE TO ANY PARTICULAR INCOME OR RECEIPT. THE FORMULA ESSENTIALLY 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 RATI O OF THE AVERAGE VALUE OF INVESTMENT, INCOME FROM WHICH DOES NOT OR SHALL NOT FORM PART OF THE TOTAL INCOME, TO THE AVERAGE 9 OF THE TOTAL ASSETS OF THE ASSESSEE. THE THIRD COMPONENT IS AN ARTIFICIAL FIGURE ONE HALF PERCENT OF THE AVERAGE VALUE OF THE INVE STMENT, INCOME FROM WHICH DOES NOT OR SHALL NOT FORM PART OF THE TOTAL INCOME, AS APPEARING IN THE BALANCE SHEETS OF THE ASSESSEE, ON THE FIRST DAY AND THE LAST DAY OF THE PREVIOUS YEAR. IT IS THE AGGREGATE OF THESE THREE COMPONENTS WHICH WOULD CONSTITUTE THE EXPENDITURE IN RELATION TO EXEMPT INCOME AND IT IS THIS AMOUNT OF EXPENDITURE WHICH WOULD BE DISALLOWED UNDER SECTION 14A OF THE SAID ACT. IT IS, THEREFORE, CLEAR THAT IN TERMS OF THE SAID RULE, THE AMOUNT OF EXPENDITURE IN RELATION TO EXEMPT INCOME HA S TWO ASPECTS (A) DIRECT AND (B) INDIRECT. THE DIRECT EXPENDITURE IS STRAIGHTAWAY TAKEN INTO ACCOUNT BY VIRTUE OF CLAUSE (I) OF SUB - RULE (2) OF RULE 8D. THE INDIRECT EXPENDITURE, WHERE IT IS BY WAY OF INTEREST, IS COMPUTED THROUGH THE PRINCIPLE OF APPORT IONMENT, AS INDICATED ABOVE. AND, IN CASES WHERE THE INDIRECT EXPENDITURE IS NOT BY WAY OF INTEREST, A RULE OF THUMB FIGURE OF ONE HALF PERCENT OF THE AVERAGE VALUE OF THE INVESTMENT, INCOME FROM WHICH DOES NOT OR SHALL NOT FORM PART OF THE TOTAL INCOME, I S TAKEN. 15. EVEN EARLIER THE BOMBAY HIGH COURT IN GODREJ AND BOYCE MFG. CO. LTD. VERSUS DEPUTY COMMISSIONER OF INCOME TAX (2010) 328 ITR 81 (BOM.) HAD REFERRED TO SECTION 14(2) OF THE ACT AND OBSERVED: - UNDER SUB - SECTION (2), THE ASSESSING OFFICER I S REQUIRED TO DETERMINE THE AMOUNT OF EXPENDITURE INCURRED BY AN ASSESSEE IN RELATION TO SUCH INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT IN ACCORDANCE WITH SUCH METHOD AS MAY BE PRESCRIBED. THE METHOD, HAVING REGARD TO THE MEANING OF THE EXPRESSION 'PRESCRIBED' IN SECTION 2(33), MUST BE PRESCRIBED BY RULES MADE UNDER THE ACT. WHAT MERITS EMPHASIS IS THAT THE JURISDICTION OF THE ASSESSING OFFICER TO DETERMINE THE EXPENDITURE INCURRED IN RELATION TO SUCH INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME, IN ACCORDANCE WITH THE PRESCRIBED METHOD, ARISES IF THE ASSESSING OFFICER IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE IN RESPECT OF THE EXPENDITURE WHICH THE ASSESSEE CLAIMS TO HAVE INCURRED IN RELATION TO INCOME WHICH DOES NOT PART OF THE TOTAL INCOME. MOREOVER, THE SATISFACTION OF THE ASSESSING OFFICER HAS TO BE ARRIVED AT, HAVING REGARD TO THE ACCOUNTS OF THE ASSESSEE. HENCE, SUB - SECTION (2) DOES NOT IPSO FACTO ENABLE THE ASSESSING OFFICER TO APPLY THE METHOD P RESCRIBED BY THE RULES STRAIGHTAWAY WITHOUT CONSIDERING WHETHER THE CLAIM MADE BY THE ASSESSEE IN RESPECT OF THE EXPENDITURE INCURRED IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME IS CORRECT. THE ASSESSING OFFICER MUST, IN THE FIRST IN STANCE, DETERMINE WHETHER THE CLAIM OF THE ASSESSEE IN THAT REGARD IS CORRECT AND THE DETERMINATION MUST BE MADE HAVING REGARD TO THE ACCOUNTS OF THE ASSESSEE. THE SATISFACTION OF THE ASSESSING OFFICER MUST BE ARRIVED AT ON AN OBJECTIVE BASIS. IT IS ONLY W HEN THE ASSESSING OFFICER IS NOT SATISFIED WITH THE CLAIM OF THE ASSESSEE, THAT THE LEGISLATURE DIRECTS HIM TO FOLLOW THE METHOD THAT MAY BE PRESCRIBED. IN A SITUATION WHERE THE ACCOUNTS OF THE ASSESSEE FURNISH AN OBJECTIVE BASIS FOR THE ASSESSING OFFICER TO ARRIVE AT A SATISFACTION IN REGARD TO THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE OF THE EXPENDITURE WHICH HAS BEEN INCURRED IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME, THERE WOULD BE NO WARRANT FOR TAKING RECOURSE TO THE METHOD PRESCRIBED BY THE RULES. FOR, IT IS ONLY IN THE EVENT OF THE ASSESSING OFFICER NOT BEING SO SATISFIED THAT RECOURSE TO THE PRESCRIBED METHOD IS MANDATED BY LAW. SUB - SECTION (3) OF SECTION 14A PROVIDES FOR THE APPLICATION OF SUB - SECTION (2) ALSO TO A SITUA TION WHERE THE ASSESSEE CLAIMS THAT NO EXPENDITURE HAS BEEN INCURRED BY HIM IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT. UNDER THE PROVISO, IT HAS BEEN STIPULATED THAT NOTHING IN THE SECTION WILL EMPOWER THE ASSESSING O FFICER, FOR AN ASSESSMENT YEAR BEGINNING ON OR BEFORE APRIL 1, 2001, EITHER TO REASSESS UNDER SECTION 147 OR PASS AN ORDER ENHANCING THE ASSESSMENT OR REDUCING THE REFUND ALREADY MADE OR OTHERWISE INCREASING THE LIABILITY OF THE ASSESSEE UNDER SECTION 154. 10 16. EQUALLY ILLUMINATING ARE THE FOLLOWING OBSERVATIONS IN GODREJ AND BOYCE MFG. CO. LTD. (SUPRA) HOWEVER, IF THE ASSESSEE DOES NOT MAINTAIN SEPARATE ACCOUNTS, IT WOULD BE NECESSARY FOR THE ASSESSING OFFICER TO DETER - MINE THE PROPORTION OF EXPENDITUR E INCURRED IN RELATION TO THE DIVIDEND BUSINESS (I.E., EARNING EXEMPT INCOME). IT IS FOR EXACTLY SUCH SITUATIONS THAT A MACHINERY/METHOD FOR COMPUTING THE PROPORTION OF EXPENDITURE INCURRED IN RELATION TO THE DIVIDEND BUSINESS HAS BEEN PROVIDED BY WAY OF S ECTION 14A(2)/(3) AND RULE 8D. 17. MORE IMPORTANT AND RELEVANT FOR US ARE THE OBSERVATIONS IN GODREJ AND BOYCE MFG. CO. LTD. (SUPRA) ON REQUIREMENT AND STIPULATION OF SATISFACTION BEING RECORDED BY THE ASSESSING OFFICER WITH REFERENCE TO THE ACCOUNTS UN DER SECTION 14(2) OF THE ACT AND RULE 8D(1) OF THE RULES. IT WAS OBSERVED: - PARLIAMENT HAS PROVIDED AN ADEQUATE SAFEGUARD TO THE INVOCATION OF THE POWER TO DETERMINE THE EXPENDITURE INCURRED IN RELATION TO THE EARNING OF NON - TAXABLE INCOME BY ADOPTION OF THE PRESCRIBED METHOD. THE INVOCATION OF THE POWER IS MADE CONDITIONAL ON THE OBJECTIVE SATISFACTION OF THE ASSESSING OFFICER IN REGARD TO THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE, HAVING REGARD TO THE ACCOUNTS OF THE ASSESSEE. WHEN A STATUTE POSTULAT ES THE SATISFACTION OF THE ASSESSING OFFICER 'COURTS WILL NOT READILY DEFER TO THE CONCLUSIVENESS OF AN EXECUTIVE AUTHORITY'S OPINION AS TO THE EXISTENCE OF A MATTER OF LAW OR FACT UPON WHICH THE VALIDITY OF THE EXERCISE OF THE POWER IS PREDICATED'. (M. A. RASHEED V. STATE OF KERALA [1974] AIR 1974 SC 2249*). A DECISION BY THE ASSESSING OFFICER HAS TO BE ARRIVED AT IN GOOD FAITH ON RELEVANT CONSIDERATIONS. THE ASSESSING OFFICER MUST FURNISH TO THE ASSESSEE A REASONABLE OPPORTUNITY TO SHOW CAUSE ON THE CORRE CTNESS OF THE CLAIM MADE BY HIM. IN THE EVENT THAT THE ASSESSING OFFICER IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM MADE BY THE ASSESSEE, HE MUST RECORD REASONS FOR HIS CONCLUSION. THESE SAFEGUARDS WHICH ARE IMPLICIT IN THE REQUIREMENTS OF FAIRNESS AND FAIR PROCEDURE UNDER ARTICLE 14 MUST BE OBSERVED BY THE ASSESSING OFFICER WHEN HE ARRIVES AT HIS SATISFACTION UNDER SUB - SECTION (2) OF SECTION 14A. AS WE SHALL NOTE SHORTLY HEREAFTER, SUB - RULE (1) OF RULE 8D HAS ALSO INCORPORATED THE ESSENTIAL REQUIRE MENTS OF SUB - SECTION (2) OF SECTION 14A BEFORE THE ASSESSING OFFICER PROCEEDS TO APPLY THE METHOD PRESCRIBED UNDER SUB - RULE (2). 18. IT IS IN THIS CONTEXT WE FEEL THAT THE FINDINGS RECORDED BY THE CIT(A) AND THE TRIBUNAL ARE APPROPRIATE AND RELEVANT. THE CLEAR FINDINGS ARE THAT THE ASSESSEE HAD SUFFICIENT FUNDS FOR MAKING INVESTMENTS IN SHARES AND MUTUAL FUNDS. THE SAID FINDINGS COUPLED WITH THE FAILURE OF THE ASSESSING OFFICER TO HOLD AND RECORD HIS SATISFACTION CLINCHES THE ISSUE IN FAVOUR OF THE RES PONDENT ASSESSEE AND AGAINST THE REVENUE. THE SELF OR VOLUNTARY DEDUCTIONS MADE BY THE ASSESSEE WERE NOT REJECTED AND HELD TO BE UNSATISFACTORY, ON EXAMINATION OF ACCOUNTS. JUDGMENTS IN TIN BOX CO. (SUPRA), RELIANCE UTILITIES AND POWER LTD. (SUPRA), SUZLON ENERGY LTD. (SUPRA) AND EAST INDIA PHARMACEUTICAL WORKS LTD. (SUPRA) WOULD BE RELEVANT IF THE SATISFACTION OF THE ASSESSING OFFICER IS IN ISSUE, AND SUCH QUESTION OF SATISFACTION IS WITH REFERENCE TO THE ACCOUNTS. 19. HOWEVER, THE DECISIONS RELIED UPON B Y THE TRIBUNAL IN THE CASE OF TIN BOX CO. (SUPRA), RELIANCE UTILITIES AND POWER LTD. (SUPRA), SUZLON ENERGY LTD. (SUPRA) AND EAST INDIA PHARMACEUTICAL WORKS LTD. (SUPRA) COULD NOT BE NOW APPLICABLE, IF WE APPLY AND COMPUTE THE DISALLOWANCE UNDER RULE 8D OF THE RULES. THE SAID RULE IN SUB RULE (2) SPECIFICALLY PRESCRIBES THE MODE AND METHOD FOR COMPUTING THE DISALLOWANCE UNDER SECTION 14A OF THE ACT. THUS, THE INTERPRETATION OF CLAUSE (II) TO SUB RULE (2) TO RULE 8D OF THE RULES BY THE CIT(A) AND THE TRIBUN AL IS NOT SUSTAINABLE. THE SAID CLAUSE EXPRESSLY STATES THAT WHERE THE ASSESSEE HAS INCURRED EXPENDITURE BY WAY OF INTEREST IN THE PREVIOUS YEAR AND THE INTEREST PAID IS NOT DIRECTLY ATTRIBUTABLE TO ANY PARTICULAR INCOME OR RECEIPT THEN THE 11 FORMULA PRESCRI BED WOULD APPLY. UNDER CLAUSE (II) TO RULE 8D(2) OF THE RULES, THE ASSESSING OFFICER IS REQUIRED TO EXAMINE WHETHER THE ASSESSEE HAS INCURRED EXPENDITURE BY WAY OF INTEREST IN THE PREVIOUS YEAR AND SECONDLY WHETHER THE INTEREST PAID WAS DIRECTLY ATTRIBUTAB LE TO PARTICULAR INCOME OR RECEIPT. IN CASE THE INTEREST PAID WAS DIRECTLY ATTRIBUTABLE TO ANY PARTICULAR INCOME OR RECEIPT, THEN THE INTEREST ON LOAN AMOUNT TO THIS EXTENT OR IN ENTIRETY AS THE CASE MAY BE, HAS TO BE EXCLUDED FOR MAKING COMPUTATION AS PER THE FORMULA PRESCRIBED. PERTINENTLY, THE AMOUNT TO BE DISALLOWED AS EXPENDITURE RELATABLE TO EXEMPT INCOME, UNDER SUB RULE (2) IS THE AGGREGATE OF THE AMOUNT UNDER CLAUSE (I), CLAUSE (II) AND CLAUSE (III). CLAUSE (I) RELATES TO DIRECT EXPENDITURE RELATING TO INCOME FORMING PART OF THE TOTAL INCOME AND UNDER CLAUSE (III) AN AMOUNT EQUAL TO 0.5% OF THE AVERAGE AMOUNT OF VALUE OF INVESTMENT, APPEARING IN THE BALANCE SHEET ON THE FIRST DAY AND THE LAST DAY OF THE ASSESSEE HAS TO BE DISALLOWED. 20. HOWEVER, IN THE PRESENT CASE WE NEED NOT REFER TO SUB RULE (2) TO RULE 8D OF THE RULES AS CONDITIONS MENTIONED IN SUB SECTION (2) TO SECTION 14A OF THE ACT READ WITH SUB RULE (1) TO RULE 8D OF THE RULES WERE NOT SATISFIED AND THE ASSESSING OFFICER ERRED IN INVOKING S UB RULE (2), WITHOUT ELUCIDATING AND EXPLAINING WHY THE VOLUNTARY DISALLOWANCE MADE BY THE ASSESSEE WAS UNREASONABLE AND UNSATISFACTORY. WE DO NOT FIND ANY SUCH SATISFACTION RECORDED IN THE PRESENT CASE BY THE ASSESSING OFFICER, BEFORE HE INVOKED SUB RULE (2) TO RULE 8D OF THE RULES AND MADE THE RE - COMPUTATION. THEREFORE, THE RESPONDENT ASSESSEE WOULD SUCCEED AND THE APPEAL SHOULD BE DISMISSED. 9. THE RATIO LAID DOWN IN THE ABOVE CASE IS THAT UNLESS THE SATISFACTION IS RECORDED BY THE ASSESSING OFFIC ER TO THE EFFECT THAT THE DISALLOWANCES OFFERED BY THE ASSESSEE IS UNSATISFACTORY, NO DISALLOWANCE CAN BE MADE UNDER THE PROVISIONS OF SECTION 14A OF THE ACT. THIS RATIO WAS FOLLOWED BY SEVERAL COORDINATE BENCHES OF ITAT, WHICH ARE AS FOLLOWS: I. CIT VS. HERO MANAGEMENT SERVICES LTD. [2014] 360 ITR 68 (DEL.) (HC) [AY 2007 - 08] II. KODAK INDIA PVT. LTD. VS. ACIT [2013] 155 TTJ 697 (MUM.) (TRIB.) [AY 2008 - 09. III. JK INVESTORS (BOMBAY) LIMITED (MUM.) (TRIB.) ( WWW.ITATONLINE.ORG ) [AY 2008 - 09] IV. AUCHTEL PRODUCTS LIMITED VS. ACIT [2012] 52 SOT 39 (MUM.) (TRIB.) [2003 - 04, 2007 - 08, 2008 - 09] V. PRIYA EXHIBITORS PVT. LTD. VS. ACIT [2012] 54 SOT 356 (DEL.) (TRIB.) [AY 2008 - 09] VI. DCIT VS. REI AGRO LTD. (KOL.) (TRIB.) ( WWW.ITATONLINE.ORG ) [AY 2009 - 10]. THIS DECISION HAS BEEN UP HELD BY THE CALCUTTA HIGH COURT IN GA 3022 OF 2013, DATED 23/12/2013 ( WWW.ITATONLINE.ORG ); 12 VII. ACIT VS. IQBAL M. CHAGLA (MUM.) (TRIB.) ( WWW.ITATONLINE.ORG ) [AY 2009 - 10] 10. RESPECTFULLY FOLLOWING THE SAME PARITY OF THE REASON, WE HEREBY DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITIONS MADE UNDER SECTION 14A OF THE ACT. 11. IN THE RESULT, ALL THE THREE APPEALS FILED BY THE APPELLANT ARE ALLOWED. THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 2 N D S E P T E M B E R , 2015. S D / - S D / - ( I.C. SUDHIR ) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 N D S E P T E M B E R , 2015. RK/ - COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI