Kanchan Pharma Pvt. Ltd., Ahmedabad V. The Dy.CIT, Circle-2(1)(2), Ahmedabad

ITA 29/AHD/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0944 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 04-01-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DEELIPKUMAR
• Assessee Lawyers: P B PARMAR
• Keywords: Fair market value; Rule 8D; Set aside
• Section: 14A; 115JB; 192; 13; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT & SHRI WASEEM AHMED, ACCOUNTANT MEMBER) ITA. NO: 29/AHD/2016 (ASSESSMENT YEAR: 2012-13) KANCHAN PHARMA PVT. LTD., BASEMENT HARIKRUPA SHOPPING CENTRE, NR. DEEPALI CINEMA, ASHRAM ROAD, AHMEDABAD V/S DCIT, CIRCLE-2(1)(2), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AABCK 6444J APPELLANT BY : SHRI P.B. PARMAR, A.R. RESPONDENT BY : SHRI DEELIP KUMAR, SR. D.R. ( )/ ORDER DATE OF HEARING : 19 -02-202 0 DATE OF PRONOUNCEMENT : 01 -06-2020 PER WASEEM AHMED, ACCOUNTANT MEMBER 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. CIT(A)- 2, AHMEDABAD DATED 24.09.2015 PERTAINING TO A.Y. 20 12-13. ITA NO. 29/A HD/2016 . A.Y. 2012-1 3 2 2. THE 1ST ISSUE RAISED BY THE ASSESSEE IS THAT THE LE ARNED CIT (A) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE AO FOR RS. 17,44,117/- ON ACCOUNT OF INTEREST EXPENSES PAID TO THE RELATED PARTIES BEING EXCESSIVE. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS A PRIVA TE LIMITED COMPANY AND ENGAGED IN THE BUSINESS OF DISTRIBUTION OF PHARMACEUTICAL P RODUCT, C&F AGENT, AND CONSIGNEE AGENT AND RENTAL INCOME. THE AO DURING TH E ASSESSMENT PROCEEDINGS FOUND THAT THE ASSESSEE HAD PAID INTEREST ON THE BO RROWED FUND AT DIFFERENT RATES RANGING FROM 12% TO 24% PER ANNUM. ACCORDINGLY, THE A O WORKED OUT THE REASONABLE RATE OF INTEREST BEING 18% ON THE FUND BO RROWED FROM THE RELATIVES. AS SUCH THE AO DISALLOWED THE AMOUNT OF INTEREST EX PENSES WITH RESPECT TO 7 PARTIES WHICH WAS IN EXCESS OF 18% BEING RS. 17,44, 117/- AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 4. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARN ED CIT (A). 5. THE ASSESSEE BEFORE THE LEARNED CIT (A) SUBMITTED T HAT IT HAS BORROWED FUND FROM THE RELATIVES WITHOUT FURNISHING ANY SECURITY. FURTHERMORE, IT HAS BORROWED FUND FROM SUCH PARTIES ON LONG-TERM BASIS AND THERE FORE IT HAS NO PRESSURE FOR THE PAYMENT OF THE SAME. 6. THE ASSESSEE ALSO CLAIMED THAT THERE IS A RESTRICTI ON UNDER THE COMPANIES ACT FOR BORROWING THE FUND FROM THE OUTSIDE PARTIES. TH EREFORE IT HAD NO OPTION EXCEPT TO BORROW THE FUND FROM THE RELATIVES. 7. HOWEVER, THE LEARNED CIT (A) DISREGARDED THE CONTEN TION OF THE ASSESSEE AND CONFIRMED THE ORDER OF THE AO BY OBSERVING AS UNDER : 3.4. HAVING CONSIDERED THE APPELLANT'S SUBMISSION, IT IS NOTICED THAT THE APPELLANT'S PLEA THAT AS PER NORMS OF ROC THEY CANNOT ACCEPT UNSECUR ED LOANS OTHER THAN FROM RELATIVE SHAREHOLDERS AND DIRECTORS IS FACTUALLY FOUND NOT C ORRECT FOR THE REASON THAT THE APPELLANT ITA NO. 29/A HD/2016 . A.Y. 2012-1 3 3 ITSELF HAS TAKEN SUCH .UNSECURED LOANS FROM OUTSID E PARTIES. HENCE, NO SUCH RESTRICTION, IF ANY, IMPOSED BY ROC HAVE BEEN OBEYED BY THE APPE LLANT. FURTHER, THERE IS 'NOTHING ON RECORD ON FACTS PLACED BY THE APPELLANT THAT VARIOU S LOANS TAKEN FROM RELATIVES AND OUTSIDE PARTIES WERE FOR THE PURPOSE OF SHORT PERIO D OR FOR LONG TERM. NO DISTINCTION BETWEEN THEM HAS BEEN EXPLAINED BY THE APPELLANT. M OREOVER, THE HIGH RATE OF INTEREST ON LOANS FROM PRIVATE LENDERS AND NBFC WOULD NOT DE CIDE THE RATE OF INTEREST, BUT THE COMPARABLE RATES GIVEN BY THE APPELLANT TO THE OUTS IDERS FROM WHOM LOANS TAKEN HAVE TO BE CONSIDERED FOR DECIDING THE REASONABLE RATE .'OF INTEREST PAYABLE TO THE RELATIVES. 3.4. HAVING CONSIDERED THE APPELLANT'S SUBMISSION, IT IS NOTICED THAT THE APPELLANT'S PLEA THAT AS PER NORMS OF ROC THEY CANNOT ACCEPT UNSECUR ED LOANS OTHER THAN FROM RELATIVE SHAREHOLDERS AND DIRECTORS IS FACTUALLY FOUND NOT C ORRECT FOR THE REASON THAT THE APPELLANT ITSELF HAS TAKEN SUCH .UNSECURED LOANS FROM OUTSID E PARTIES. HENCE, NO SUCH RESTRICTION, IF ANY, IMPOSED BY ROC HAVE BEEN OBEYED BY THE APPE LLANT. FURTHER, THERE IS 'NOTHING ON RECORD ON FACTS PLACED BY THE APPELLANT THAT VARIOU S LOANS TAKEN FROM RELATIVES AND OUTSIDE PARTIES WERE FOR THE PURPOSE OF SHORT PERIO D OR FOR LONG TERM. NO DISTINCTION BETWEEN THEM HAS BEEN EXPLAINED BY THE APPELLANT. M OREOVER, THE HIGH RATE OF INTEREST ON LOANS FROM PRIVATE LENDERS AND NBFC WOULD NOT DE CIDE THE RATE OF INTEREST, BUT THE COMPARABLE RATES GIVEN BY THE APPELLANT TO THE OUTS IDERS FROM WHOM LOANS TAKEN HAVE TO BE CONSIDERED FOR DECIDING THE REASONABLE RATE .'OF INTEREST PAYABLE TO THE RELATIVES. . 3.5. THE APPELLANT HAS NOT SUBMITTED ANY JUSTIFIABL E REASONS OF MAKING THE PAYMENT OF INTEREST AT HIGHER RATES AT 24%, WHILE SIMILARLY IT WAS PAYING THE INTEREST @ 12% TO THE OUTSIDE PARTIES. SINCE THE PREVAILING INTEREST RATE IN THE MARKET WAS OBVIOUSLY 12% WHICH WAS PAID TO THE OUTSIDERS. EVEN THOUGH THE AO GRANT ED THE INTEREST @ 18% P.A. IN PLACE OF 24% WHICH IS FAIR AND REASONABLE AND ACCORDINGLY , THE DIFFERENTIAL INTEREST RATE OF 6% WAS WORKED OUT IN RESPECT OF SEVEN PARTIES AMOUNTIN G TO RS. 17,44,117/- AS PER THE TABLE PROVIDED ON PAGE 3 OF THE ASSESSMENT ORDER AND THE SAME WAS DISALLOWED. THE AOS OBSERVATIONS ARE FOUND REASONABLE, CONSIDERING THE FAIR INTEREST RATE PREVALENT ON THE TIME AND THE DISALLOWANCE WAS CORRECTLY MADE BY THE AO. IN OTHER WORDS, THE AO HAS GRANTED EVEN THE INTEREST @18% TO THE RELATED PARTI ES EVEN THOUGH THE APPELLANT HIMSELF WAS PAYING THE INTEREST @ 12% TO THE OUTSIDE PARTIE S. THEREFORE, THE AOS APPROACH IN THIS REGARD IS WAS CORRECT AND REASONABLE, AND HENC E, THE DISALLOWANCE MADE BY THE AO IS CONFIRMED. THE GROUND OF THE APPEAL IS DISMISSED . 8. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) , THE ASSESSEE IS IN APPEAL BEFORE US. 9. THE LEARNED AR BEFORE US FILED A PAPER BOOK RUNNING FROM PAGES 1 TO 58 AND SUBMITTED AS UNDER: NO DISALLOWANCE CAN BE MADE U/S 40A(2) UNLESS AO BR INGS ON RECORD 'FAIR MARKET VALUE' OF SIMILAR SERVICES: AO AND CIT(A) FAILED TO BRING ON RECORD ANY COMPA RABLE CASE AS TO THE 'FAIR MARKET VALUE' OF SIMILAR SERVICES (I.E. PREVALENT MARKET RATE OF INTEREST). IN ABSENCE OF THE SAME, NO DISALLOWANCE CAN BE MADE U/S 40A(2). RELIA NCE IS PLACED ON FOLLOWINGS: > CIT VS. SARJAN REALITIES - (2014) 50 TAXM ANN.COM 52 (GUJ) (ANNEXURE 'A'); ITA NO. 29/A HD/2016 . A.Y. 2012-1 3 4 > KASHI EXPORTS PVT. LTD. VS. DCIT - TAX APPEAL N O.156 OF 2003(GUJ. HC) (ANNEXURE 'B'); > ANILKUMAR P. SONI - ITA 2511/AHD/2013 (ANNEXURE 'C'); ON THIS SHORT COUNT, IMPUGNED DISALLOWANCE DESERV ES TO BE DELETED. EVEN ON MERITS, 'INTEREST (A), 24%' TO 'RELATED PAR TIES' IS 'REASONABLE': AO AND CIT(A) TO APPRECIATE THAT INTEREST @ 24% T O 'RELATED PARTIES' IS ABSOLUTELY REASONABLE ON ACCOUNT OF FOLLOWINGS: > FUNDS OBTAINED FROM RELATED PARTIES ARE WITHOUT ANY SECURITY; > SUCH FUNDS ARE NOT TO BE REPAID IN THE NEAR FUT URE; > SINCE SUCH LOANS ARE WITHOUT ANY SECURITY AND A RE NOT BE REPAID SHORTLY, THE SAME FALL WITHIN HIGH RISK CATEG ORY: ON ACCOUNT OF ABOVE FACTORS, LOANS OBTAINED FROM 'RELATED PARTIES' DESERVE SOME PREMIUM AS COMPARED TO LOANS OBTAINED FROM OUTSIDER S WHICH ARE USUALLY AGAINST ANY SECURITY, NEED TO BE REPAID IN THE SPECIFIED TIME A ND DO NOT FALL WITHIN THE HIGH RISK CATEGORY. HENCE, INTEREST @ 24% TO RELATED PARTIES IS REASO NABLE. RELIANCE IS PLACED ON 'ANILKUMAR P. SONI - ITA 2511/AHD/20I3' (ANNEXURE ' C'). IN ANY CASE, AO IS NOT SUPPOSED TO DECIDE THE 'RE ASONABLENESS' OF ANY EXPENDITURE. IT IS THE PREROGATIVE OF A BUSINESSMAN TO DETERMINE TH E AMOUNT OF EXPENDITURE. AO CANNOT STEP INTO THE SHOES OF A BUSINESSMAN TO DETERMINE Q UANTUM OF SUCH EXPENDITURE. ALTERNATIVELY, INTEREST ON OPENING BALANCE DESERVES TO BE DELETED: ALTERNATIVELY, ASSESSEE HAS PAID INTEREST TO SEVEN PARTIES AND THEIR LEDGERS HAVE BEEN PLACED ON RECORD. SUBSTANTIAL LOANS WERE OBTAINED I N EARLIER YEARS AND ASSESSEE HAD PAID INTEREST ON LOANS IN THE IMMEDIATELY PRECEDING YEAR (I.E. AY 11-12) AS WELL. HOWEVER, NO DISALLOWANCE WAS MADE IN EARLIER YEAR. IF FUNDS HAV E BEEN BORROWED IN EARLIER YEARS AND NO DISALLOWANCE HAS BEEN MADE IN RESPECT OF INTERES T PAID ON BORROWED FUNDS IN EARLIER YEARS, THEN IN SUBSEQUENT YEARS, WHEREIN INTEREST H AS BEEN PAID ON OPENING BALANCES OF SUCH LOANS, INTEREST EXPENSES CANNOT BE DISALLOWED. RELIANCE IS PLACED ON: > CIT VS. SRIDEV ENTERPRISE - 192 ITR 165 (KAR) > VIRENDRA R. GANDHI VS. ACIT (GUJ HC) (ANNEXURE ' D'); IN LIGHT OF THE ABOVE, INTEREST ON OPENING BALANCE S DESERVES TO BE ALLOWED. 10. ON THE OTHER HAND THE LEARNED DR BEFORE US VEHEMENT LY SUPPORTED THE STAND OF THE AUTHORITIES BELOW BY REITERATING THE FINDINGS C ONTAINED IN THE RESPECTIVE ORDERS WHICH WE HAVE ALREADY ADVERTED TO IN THE PRE CEDING PARAGRAPH. THEREFORE WE ARE NOT REPEATING THE SAME FOR THE SAKE OF BREVI TY. 11. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PAR TIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THE PRE SENT CASE RELATES TO THE DISALLOWANCE OF THE INTEREST EXPENSES PAID ON THE M ONEY BORROWED FROM THE RELATED PARTIES AS SPECIFIED UNDER SECTION 40A(2)(B ) OF THE ACT. THE ASSESSEE HAS ITA NO. 29/A HD/2016 . A.Y. 2012-1 3 5 PAID INTEREST AT THE RATE OF 24% WHEREAS THE REVENU E WAS OF THE VIEW THAT THE RATE OF INTEREST AT 18% IS REASONABLY ENOUGH. ACCORD INGLY THE INTEREST PAID OVER AND ABOVE THE RATE OF 18% ON THE MONEY BORROWED WAS DISALLOWED BY THE AO WHICH WAS SUBSEQUENTLY CONFIRMED BY THE LEARNED CIT (A). 12. UNDER THE PROVISION OF SECTION 40A OF THE ACT THE A O CAN MAKE THE DISALLOWANCE UNDER SECTION 40A OF THE ACT, IF HE IS OF THE OPINI ON THAT THE EXPENDITURE IN RESPECT OF WHICH PAYMENT HAS BEEN MADE TO THE RELAT ED PARTIES IS EXCESSIVE OR UNREASONABLE AFTER HAVING REGARD TO THE FAIR MARKET VALUE. BUT THE AO IN THE CASE ON HAND HAS NOT BROUGHT SUCH COMPARABLE CASES. THER EFORE WE ARE OF THE VIEW THAT THERE CANNOT BE ANY DISALLOWANCE UNDER THE PRO VISIONS OF SECTION 40A(2) OF THE ACT WITHOUT BRINGING ANY COMPARABLE CASES BASED ON COGENT MATERIAL. 13. IT IS ALSO PERTINENT TO NOTE THAT THE MONEY WAS BOR ROWED FROM THE RELATED PARTIES IN THE EARLIER YEARS AND THE INTEREST PAID TO THEM WAS ACCEPTED IN THOSE YEARS. THEREFORE IN OUR CONSIDERED VIEW THERE CANNOT BE AN Y DISALLOWANCE FOR THE YEAR UNDER CONSIDERATION ON THE MONEY BORROWED IN THE EA RLIER YEAR. IN THIS REGARD WE FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HON BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS.SRIDEV ENTERPRISE REPORTED IN 19 2 ITR 165 WHEREIN IT WAS HELD AS UNDER: IN THE INSTANT CASE THE STATUS OF THE AMOUNT STANDI NG AS OUTSTANDING DUE FROM N ON THE FIRST DAY OF THE ACCOUNTING YEAR WAS THE AMOUNT THA T STOOD OUTSTANDING ON THE LAST DAY OF THE PREVIOUS ACCOUNTING YEAR; THEREFORE, ITS NATURE AND STATUS COULD NOT BE DIFFERENT ON THE FIRST DAY OF THE CURRENT ACCOUNTING YEAR, FROM ITS NATURE AND STATUS AS ON THE LAST DAY OF THE PREVIOUS ACCOUNTING YEAR. REGARDING THE PAST YEARS, THE ASSESSEES CLAIMS FOR DEDUCTIONS WERE ALLOWED IN RESPECT OF THE SUMS ADVA NCED DURING THOSE YEARS; THIS COULD BE ONLY ON THE ASSUMPTION THAT THOSE ADVANCES WERE NOT OUT OF BORROWED FUNDS OF THE ASSESSEE. THIS FINDING DURING THE PREVIOUS YEARS WA S THE VERY BASIS OF THE DEDUCTIONS PERMITTED DURING THE PAST YEARS, WHETHER A SPECIFIC FINDING WAS RECORDED OR NOT. A DEPARTURE FROM THE FINDING IN RESPECT OF THE SAID A MOUNTS ADVANCED DURING THE PREVIOUS YEAR, WOULD RESULT IN A CONTRADICTORY FINDING; IT W OULD NOT BE EQUITABLE TO PERMIT THE REVENUE TO TAKE A DIFFERENT STAND NOW, IN RESPECT O F THE AMOUNTS WHICH WERE THE SUBJECT- MATTER OF PREVIOUS YEARS ASSESSMENTS CONSISTENCY A ND DEFINITENESS OF APPROACH BY THE REVENUE WAS NECESSARY IN THE MATTER OF RECOGNISING THE NATURE OF AN ACCOUNT MAINTAINED BY THE ASSESSEE SO THAT THE BASIS OF A CONCLUDED AS SESSMENT WOULD NOT BE IGNORED WITHOUT ACTUALLY REOPENING THE ASSESSMENT. THE PRIN CIPLE IS SIMILAR TO THE CASES WHERE IT ITA NO. 29/A HD/2016 . A.Y. 2012-1 3 6 HAS BEEN HELD THAT A DEBT WHICH HAD BEEN TREATED BY THE REVENUE AS A GOOD DEBT IN A PARTICULAR YEAR CANNOT SUBSEQUENTLY BE HELD BY IT T O HAVE BECOME BAD PRIOR TO THAT YEAR. THE TRIBUNAL WAS, THEREFORE, JUSTIFIED IN HOLDING T HAT SINCE NO ADDITIONS HAD BEEN MADE IN EARLIER YEARS, THE OPENING DEBIT BALANCE COULD NOT BE CONSIDERED DURING THE CURRENT YEAR AND THE ENQUIRY HAD TO BE LIMITED TO THE INCREASE I N THE CURRENT YEAR ONLY. 14. IN VIEW OF THE ABOVE, WE HOLD THAT THERE CANNOT BE ANY DISALLOWANCE ON ACCOUNT OF INTEREST EXPENSES BEING EXCESSIVE PAID TO THE RE LATED PARTIES UNDER SECTION 40A OF THE ACT. HENCE WE SET ASIDE THE FINDING OF T HE LEARNED CIT (A) AND DIRECT THE AO TO DELETE THE ADDITION MADE BY HIM. HENCE TH E GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 15. THE 2ND ISSUE RAISED BY THE ASSESSEE IS THAT THE LE ARNED CIT (A) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE AO IN PART AMOUNTING TO RS 70695/- ONLY. 16. THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS EA RNED EXEMPTED INCOME AMOUNTING TO RS. 70,695/- BUT MADE NO DISALLOWANCE UNDER THE PROVISIONS OF SECTION 14A READ WITH RULE 8D OF INCOME TAX RULES. ACCORDINGLY THE AO INVOKED THE PROVISIONS OF RULE 8.D. R.W.S. 14A OF THE ACT, AND MADE THE FOLLOWING DISALLOWANCES: I. DIRECT EXPENSES NIL II. INTEREST EXPENSES RS. 3,69,786/- III. ADMINISTRATIVE EXPENSES RS. 37,725/- 17. ACCORDINGLY THE AO MADE THE TOTAL DISALLOWANCE OF R S. 4,07,511/- AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 18. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARN ED CIT (A) WHO RESTRICTED THE DISALLOWANCE TO THE TUNE OF RS. 70,695/-ONLY BE ING EXEMPTED INCOME. 19. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) , THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO. 29/A HD/2016 . A.Y. 2012-1 3 7 20. THE LEARNED AR BEFORE US SUBMITTED THAT THE OWNED F UND OF THE ASSESSEE FOR RS. 5,36,43,221 EXCEED THE AMOUNT OF INVESTMENTS OF RS. 75,45,186/- ONLY. THUS THE LEARNED AR CONTENDED THAT THERE CANNOT BE ANY DISAL LOWANCE OF INTEREST EXPENSES. 21. ON THE OTHER HAND THE LEARNED DR VEHEMENTLY SUPPORT ED THE ORDER OF THE AUTHORITIES BELOW. 22. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PAR TIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD BEFORE US. IT IS THE SETTLED LAWS THAT THERE CANNOT BE ANY DISALLOWANCE OF INTEREST EXPENSES IF THE OWN FUND OF THE ASSESSEE EXCEEDS THE AMOUNT OF INVESTMENTS. ADMITTEDLY THE O WN FUND OF THE ASSESSEE EXCEEDS THE AMOUNT OF INVESTMENT IN THE PRESENT CAS E. IN THIS CONNECTION, WE FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HON BLE BOMBAY HIGH COURT IN THE CASE OF RELIANCE UTILITIES AND POWER LTD. REPOR TED IN 313 ITR 340 WHEREIN IT WAS HELD AS UNDER:- THE PRINCIPLE THEREFORE WOULD BE THAT IF THERE ARE FUNDS AVAILABLE BOTH INTEREST-FREE AND OVERDRAFT AND/OR LOANS TAKEN, THEN A PRESUMPTION WO ULD ARISE THAT INVESTMENTS WOULD BE OUT OF THE INTEREST-FREE FUND GENERATED OR AVAILABL E WITH THE COMPANY, IF THE INTEREST-FREE FUNDS WERE SUFFICIENT TO MEET THE INVESTMENTS. IN T HIS CASE THIS PRESUMPTION IS ESTABLISHED CONSIDERING THE FINDING OF FACT BOTH BY THE CIT(A) AND TRIBUNAL. 23. SIMILARLY, WE ALSO RELY ON THE JUDGMENT OF THE HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. HDFC BANK LTD REPORTED IN 366 ITR 5 05 (BOM). THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCEDBELOW:- WHERE ASSESSEE'S CAPITAL, PROFIT RESERVES, SURPLUS AND CURRENT ACCOUNT DEPOSITS WERE HIGHER THAN THE INVESTMENT IN TAX-FREE SECURITIES, IT WOULD HAVE TO BE PRESUMED THAT INVESTMENT MADE BY THE ASSESSEE WOULD BE OUT OF THE INTEREST-FREE FUNDS AVAILABLE WITH ASSESSEE AND NO DISALLOWANCE WAS WARRANTED U/S 14A. 24. SIMILARLY, WE ALSO FIND SUPPORT FROM THE JUDGMENT O F HONBLE GUJARAT HIGH COURT IN THE CASE OF UTI BANK LTD. REPORTED IN 32 TAXMANN .COM 370 WHERE THE HEADNOTE READS AS UNDER : ITA NO. 29/A HD/2016 . A.Y. 2012-1 3 8 IF THERE ARE SUFFICIENT INTEREST FREE FUNDS TO MEE T TAX FREE INVESTMENTS, THEY ARE PRESUMED TO BE MADE FROM INTEREST FREE FUNDS AND NO T LOANED FUNDS AND NO DISALLOWANCE CAN BE MADE UNDER SECTION 14A. 25. IN VIEW OF THE ABOVE PROPOSITION, WE HOLD THAT NO D ISALLOWANCE OF INTEREST EXPENSE CLAIMED BY THE ASSESSEE CAN BE MADE ON ACCO UNT OF INVESTMENTS AS DISCUSSED ABOVE UNDER THE PROVISION OF SECTION 14A R.W.R. 8D OF INCOME TAX RULES. HENCE, WE REVERSE THE ORDER OF THE AUTHORITI ES BELOW. THE AO IS DIRECTED TO DELETE THE ADDITION MADE BY HIM ON ACCOUNT OF TH E INTEREST EXPENSES. 26. REGARDING THE ADMINISTRATIVE EXPENSES, WE NOTE THAT THE LEARNED AR AT THE TIME OF HEARING HAS NOT ADVANCED ANY ARGUMENT ABOUT THE DISALLOWANCE MADE BY THE AUTHORITIES BELOW. ACCORDINGLY WE CONFIRM THE DISAL LOWANCE FOR THE ADMINISTRATIVE EXPENSES MADE BY THE AUTHORITIES BELOW. HENCE THE G ROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 27. THE NEXT ISSUE RAISED BY THE ASSESSEE IS THAT THE L EARNED CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS. 70,695/- WHILE WORKI NG OUT THE BOOK PROFIT UNDER THE PROVISIONS OF SECTION 115 JB OF THE ACT. 28. THE AO DURING THE ASSESSMENT PROCEEDING HAS MADE TH E DISALLOWANCE OF RS. 4,07,511/- UNDER THE PROVISIONS OF SECTION 14A READ WITH RULE 8D OF INCOME TAX RULE AGAINST THE EXEMPTED INCOME. THE AO SUBSEQUENT LY DISALLOWED THE SAME AMOUNT WHILE DETERMINING THE BOOK PROFIT UNDER THE PROVISIONS OF SECTION 115JB OF THE ACT. 29. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LD. C IT(A) WHO RESTRICTED THE ADDITION TO THE EXTENT OF THE EXEMPTED INCOME OF RS . 70,695/- ONLY. THUS THE LEARNED CIT (A) PARTLY CONFIRMED THE ORDER OF THE A O. ITA NO. 29/A HD/2016 . A.Y. 2012-1 3 9 30. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 31. THE LD. AR BEFORE US SUBMITTED THAT THERE CANNOT BE ANY APPLICATION OF THE PROVISIONS FOR SECTION 14A R.W.R.8D WHILE DETERMINI NG THE INCOME UNDER SECTION 115JB OF THE ACT. 32. ON THE CONTRARY, THE LD. DR VEHEMENTLY SUPPORTED TH E ORDER OF THE AUTHORITIES BELOW. 33. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PAR TIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. REGARDING THE ADDITI ON IN THE BOOK PROFIT UNDER SECTION 115JB OF THE ACT, WE NOTE THAT THE DISALLOW ANCE WAS MADE U/S 14AR.W.R. 8D OF THE INCOME TAX RULES FOR RS. 70,695/- WHILE D ETERMINING THE INCOME UNDER NORMAL COMPUTATION OF INCOME. FURTHER, THE AUTHORIT IES BELOW WHILE DETERMINING THE INCOME UNDER MINIMUM ALTERNATE TAX (MAT) AS PER THE PROVISIONS OF SECTION 115JB OF THE ACT, HAS ADDED THE DISALLOWANCE MADE U NDER THE NORMAL COMPUTATION OF INCOME UNDER SECTION 14A R.W.R. 8D O F INCOME TAX RULE FOR RS. 70,695/- IN PURSUANCE TO THE CLAUSE (F) OF EXPLANAT ION 1 TO SECTION 115JB OF THE ACT. 34. HOWEVER, WE NOTE THAT IN THE RECENT JUDGMENT OF SPE CIAL BENCH OF HONBLE DELHI TRIBUNAL IN THE CASE OF ACIT VS. VIREET INVESTMENT PVT. LTD. REPORTED IN 82 TAXMANN.COM 415 HAS HELD THAT THE DISALLOWANCES MAD E U/S 14A R.W.R. 8D CANNOT BE THE SUBJECT MATTER OF DISALLOWANCES WHILE DETERMINING THE BOOK PROFIT U/S 115JB OF THE ACT. THE RELEVANT PORTION OF THE S AID ORDER IS REPRODUCED BELOW: ITA NO. 29/A HD/2016 . A.Y. 2012-1 3 10 35. THE RATIO LAID DOWN BY THE HONBLE TRIBUNAL IS SQUA RELY APPLICABLE TO THE FACTS OF THE CASE ON HAND. THUS IT CAN BE CONCLUDED THAT THE DISALLOWANCE MADE UNDER SECTION 14A R.W.R. 8D CANNOT BE RESORTED WHILE DETE RMINING THE EXPENSES AS MENTIONED UNDER CLAUSE (F) OF EXPLANATION 1 TO SECT ION 115JB OF THE ACT. 36. HOWEVER, IT IS ALSO CLEAR THAT THE DISALLOWANCE NEE DS TO BE MADE WITH RESPECT TO THE EXEMPTED INCOME IN TERMS OF THE PROVISIONS OF C LAUSE (F) TO SECTION 115JB OF THE ACT WHILE DETERMINING THE BOOK PROFIT. IN HOLDI NG SO, WE DRAW SUPPORT FROM THE JUDGMENT OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. JAYSHREE TEA INDUSTRIES LTD. IN GO NO.1501 OF 2014 (ITAT NO.47 O F 2014) DATED 19.11.2014 WHEREIN IT WAS HELD THAT THE DISALLOWANCE REGARDING THE EXEMPTED INCOME NEEDS TO BE MADE AS PER THE CLAUSE (F) TO EXPLANATION-1 O F SEC. 115JB OF THE ACT INDEPENDENTLY. THE RELEVANT EXTRACT OF THE JUDGMENT IS REPRODUCED BELOW:- IN VIEW OF ABOVE DISCUSSION, THE COMPUTATION UNDER CLAUSE (F) OF EXPLANATION 1 TO SECTION 115JB(2), IS TO BE MADE WITHOUT RESORTING T O THE COMPUTATION AS CONTEMPLATED UNDER SECTION 14A, READ WITH RULE 8D OF THE INCOME- TAX RULES, 1962. 37. IN VIEW OF THE ABOVE, WE HOLD THAT THE DISALLOWANCE S MADE UNDER THE PROVISIONS OF SEC. 14A R.W.R. 8D OF THE IT RULES, CANNOT BE AP PLIED TO THE PROVISION OF SEC. 115JB OF THE ACT AS PER THE DIRECTION OF THE HON'BL E CALCUTTA HIGH COURT IN THE CASE OF CIT VS. JAYSHREE TEA INDUSTRIES LTD. (SUPRA ). 38. NOW THE QUESTION ARISES TO DETERMINE THE DISALLOWAN CE AS PER THE CLAUSE (F) TO EXPLANATION-1 OF SEC. 115JB OF THE ACT, INDEPENDENT LY. IN THIS REGARD, WE NOTE THAT THERE IS NO MECHANISM/ MANNER GIVEN UNDER THE CLAUSE (F) TO EXPLANATION-1 OF SEC. 115JB OF THE ACT TO WORKOUT/ DETERMINE THE EXPENSES WITH RESPECT TO THE EXEMPTED INCOME. THEREFORE IN THE GIVEN FACTS &CIRC UMSTANCES, WE FEEL THAT AD- HOCDISALLOWANCE WILL SERVE THE JUSTICE TO BOTH THE REVENUE AND ASSESSEE TO AVOID THE MULTIPLICITY OF THE PROCEEDINGS AND UNNECESSARY LITIGATION. THUS WE DIRECT THE AO TO MAKE THE DISALLOWANCE OF 1% OF THE EXEMPTED IN COME AS DISCUSSED ABOVE ITA NO. 29/A HD/2016 . A.Y. 2012-1 3 11 UNDER CLAUSE (F) TO EXPLANATION-1 OF SEC. 115JB OF THE ACT. WE ALSO FEEL TO BRING THIS FACT ON RECORD THAT WE HAVE RESTORED OTHER CAS ES INVOLVING IDENTICAL ISSUES TO THE FILE OF AO FOR MAKING THE DISALLOWANCE AS PER T HE CLAUSE (F) TO EXPLANATION-1 OF SEC. 115JB OF THE ACT INDEPENDENTLY. BUT NOW WE NOTE THAT THERE IS NO MECHANISM PROVIDED UNDER THE CLAUSE (F) TO EXPLANAT ION-1 OF SEC. 115JB OF THE ACT TO MAKE THE DISALLOWANCE INDEPENDENTLY. THEREFO RE OUR ACTION FOR RESTORING BACK THE ISSUE TO THE FILE OF AO WOULD UNNECESSARIL Y CAUSE FURTHER LITIGATION. THUS WE LIMIT THE DISALLOWANCE ON AN AD-HOC BASIS @ 1 % O F THE EXEMPTED INCOME UNDER THE CLAUSE (F) TO EXPLANATION-1 OF SEC. 115JB OF THE ACT, SUBJECT TO THE CONDITION THAT THE DISALLOWANCE SHALL NOT EXCEED TH E AMOUNT OF DISALLOWANCE DETERMINED BY THE AUTHORITIES BELOW UNDER THE PROVI SIONS OF SECTION 14A R.W.R. 8D OF INCOME TAX RULES. HENCE, THE GROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 39. THE LAST ISSUE RAISED BY THE ASSESSEE IS THAT THE L EARNED CIT (A) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE AO FOR RS. 1,57,139/- ON ACCOUNT OF DELAY IN DEPOSIT THE EMPLOYEES CONTRIBUTION UNDER SECTION 36(1)(VA) OF THE ACT. 40. AT THE OUTSET, THE LEARNED AR FOR THE ASSESSEE AGRE ED THAT THE DELAY IN DEPOSIT MADE TO THE EMPLOYEES PROVIDENT FUND AND ESIC IS NO T ELIGIBLE FOR DEDUCTION BY VIRTUE OF THE DECISION OF HONBLE GUJARAT HIGH COUR T IN THE CASE OF CIT VS. GSRTC REPORTED IN 366 ITR 170 WHEREIN IT WAS HELD AS UNDE R: IN VIEW OF THE ABOVE AND CONSIDERING SECTION 36(1) (VA), READ WITH SUB-CLAUSE (X) OF CLAUSE (24) OF SECTION 2, IT IS TO BE HELD THAT WIT H RESPECT TO THE SUM RECEIVED BY THE ASSESSEE FROM ANY OF HIS EMPLOYEES TO WHICH PROVISI ONS OF SUB-CLAUSE (X) OF CLAUSE (24) OF SECTION 2 APPLIES, THE ASSESSEE SHALL HAS ERRED IN DELETING RESPECTIVE DISALLOWANCES BEING EMPLOYEES' CONTRIBUTION TO PF ACCOUNT/ESI BE ENTITLED TO DEDUCTION IN COMPUTING THE INCOME REFERRED TO IN SECTION 28 WITH RESPECT T O SUCH SUM CREDITED BY THE ASSESSEE TO THE EMPLOYEES ACCOUNT IN THE RELEVANT FUND OR FUNDS ON OR BEFORE THE 'DUE DATE' MENTIONED IN EXPLANATION TO SECTION 36(1)(VA). CONS EQUENTLY, IT IS HELD THAT THE TRIBUNAL ACCOUNT MADE BY THE ASSESSING OFFICER AS, AS SUCH, SUCH SUMS WERE NOT CREDITED BY THE RESPECTIVE ASSESSEE TO THE EMPLOYEES 'ACCOUNTS IN T HE RELEVANT FUND OR FUNDS ON OR BEFORE THE DUE DATE AS PER THE EXPLANATION TO SECTI ON 36(1)(VA) OF THE ACT I.E. DATE BY WHICH THE CONCERNED ASSESSEE WAS REQUIRED AS AN EMP LOYER TO CREDIT EMPLOYEES' CONTRIBUTION TO THE EMPLOYEES ACCOUNT IN THE PROVID ENT FUND UNDER THE PROVIDENT FUND ACT AND/OR IN THE ESI FUND UNDER THE ESI ACT. ITA NO. 29/A HD/2016 . A.Y. 2012-1 3 12 41. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE AUTHORITIES BELOW. HENCE THE GROUND OF APPEAL OF TH E ASSESSEE IS DISMISSED. 42. BEFORE WE PART WITH THE ISSUE/APPEAL AS DISCUSSED A BOVE, IT IS PERTINENT TO NOTE THAT THE CLAUSE (C) OF RULE 34 OF THE APPELLATE TRI BUNAL RULES 1963 REQUIRES THE BENCH TO MAKE ENDEAVOUR TO PRONOUNCE THE ORDER WITH IN 60 DAYS FROM THE CONCLUSION OF THE HEARING. HOWEVER THE PERIOD OF 60 DAYS CAN BE EXTENDED UNDER EXCEPTIONAL CIRCUMSTANCES BUT THE SAME SHOULD NOT O RDINARILY BE FURTHER EXTENDED BEYOND ANOTHER 30 DAYS. IN SIMPLE WORDS TH E TOTAL TIME AVAILABLE TO THE BENCH IS OF 90 DAYS UPON THE CONCLUSION OF THE HEARING. HOWEVER, DURING THE PREVAILING CIRCUMSTANCES WHERE THE ENTIRE WORLD IS FACING THE UNPRECEDENTED CHALLENGE OF COVID 2019 OUTBREAK, RESULTING THE LOCKDOWN IN THE COUNTRY, THE ORDERS THOUGH SUBSTANTIALLY PREPAR ED BUT COULD NOT BE PRONOUNCED FOR THE UNAVOIDABLE REASONS WITHIN THE M AXIMUM PERIOD OF 90 DAYS. IN SUCH CIRCUMSTANCES WE FIND THAT THE HONBLE MUMB AI TRIBUNAL IN THE CASE OF JSW LIMITED VS DEPUTY COMMISSIONER OF INCOME TAX IN ITA NO. 6103/MUM/2018 VIDE ORDER DATED 14-5-2020 EXTENDED THE TIME FOR PRONOUNCING THE ORDER WITHIN 90 DAYS OF TIME BY OBS ERVING AS UNDER: 9. LET US IN THIS LIGHT REVERT TO THE PREVAILING SI TUATION IN THE COUNTRY. ON 24TH MARCH, 2020, HONBLE PRIME MINISTER OF INDIA TOOK THE BOLD STEP OF IMPOSING A NATIONWIDE LOCKDOWN, FOR 21 DAYS, TO PREVENT THE SPREAD OF COV ID 19 EPIDEMIC, AND THIS LOCKDOWN WAS EXTENDED FROM TIME TO TIME. AS A MATTER OF FACT , EVEN BEFORE THIS FORMAL NATIONWIDE LOCKDOWN, THE FUNCTIONING OF THE INCOME TAX APPELLA TE TRIBUNAL AT MUMBAI WAS SEVERELY RESTRICTED ON ACCOUNT OF LOCKDOWN BY THE MAHARASHTR A GOVERNMENT, AND ON ACCOUNT OF STRICT ENFORCEMENT OF HEALTH ADVISORIES WITH A VIEW OF CHECKING SPREAD OF COVID 19. THE EPIDEMIC SITUATION IN MUMBAI BEING GRAVE, THERE WAS NOT MUCH OF A RELAXATION IN SUBSEQUENT LOCKDOWNS ALSO. IN ANY CASE, THERE WAS U NPRECEDENTED DISRUPTION OF JUDICIAL WOK ALL OVER THE COUNTRY. AS A MATTER OF FACT, IT H AS BEEN SUCH AN UNPRECEDENTED SITUATION, CAUSING DISRUPTION IN THE FUNCTIONING OF JUDICIAL MACHINERY, THAT HONBLE SUPREME COURT OF INDIA, IN AN UNPRECEDENTED ORDER I N THE HISTORY OF INDIA AND VIDE ORDER DATED 6.5.2020 READ WITH ORDER DATED 23.3.2020, EXT ENDED THE LIMITATION TO EXCLUDE NOT ONLY THIS LOCKDOWN PERIOD BUT ALSO A FEW MORE DAYS PRIOR TO, AND AFTER, THE LOCKDOWN BY OBSERVING THAT IN CASE THE LIMITATION HAS EXPIRED AFTER 15.03.2020 THEN THE PERIOD FROM 15.03.2020 TILL THE DATE ON WHICH THE L OCKDOWN IS LIFTED IN THE JURISDICTIONAL AREA WHERE THE DISPUTE LIES OR WHERE THE CAUSE OF ACTION ARISES SHALL BE EXTENDED FOR A PERIOD OF 15 DAYS AFTER THE LIFTING OF LOCKDOWN . HONBLE ITA NO. 29/A HD/2016 . A.Y. 2012-1 3 13 BOMBAY HIGH COURT, IN AN ORDER DATED 15TH APRIL 202 0, HAS, BESIDES EXTENDING THE VALIDITY OF ALL INTERIM ORDERS, HAS ALSO OBSERVED T HAT, IT IS ALSO CLARIFIED THAT WHILE CALCULATING TIME FOR DISPOSAL OF MATTERS MADE TIME- BOUND BY THIS COURT, THE PERIOD FOR WHICH THE ORDER DATED 26TH MARCH 2020 CO NTINUES TO OPERATE SHALL BE ADDED AND TIME SHALL STAND EXTENDED ACCORDINGLY , AND ALSO OBSERVED THAT ARRANGEMENT CONTINUED BY AN ORDER DATED 26TH MARCH 2020 TILL 30TH APRIL 2020 SHALL CONTINUE FURTHER TILL 15TH JUNE 2020 . IT HAS BEEN AN UNPRECEDENTED SITUATION NOT ONLY IN INDIA BUT ALL OVER THE WORLD. GOVERNMENT OF INDIA HAS, VIDE NOTIFICATION DATED 19TH FEBRUARY 2020, TAKEN THE ST AND THAT, THE CORONAVIRUS SHOULD BE CONSIDERED A CASE OF NATURAL CALAMITY AND FMC (I.E. FORCE MAJEURE CLAUSE) MAYBE INVOKED, WHEREVER CONSIDERED APPROPRIATE, FOLLOWING THE DUE PROCEDURE. THE TERM FORCE MAJEURE HAS BEEN DEFINED IN BLACKS LAW DICTIONARY, AS AN EVENT OR EFFECT THAT CAN BE NEITHER ANTICIPATED NOR CONTROLLED WHEN SUCH IS THE POSITION, AND IT IS OFFICIALLY SO NOTIFIED BY THE GOVERNMENT OF INDIA A ND THE COVID-19 EPIDEMIC HAS BEEN NOTIFIED AS A DISASTER UNDER THE NATIONAL DISASTER MANAGEMENT ACT, 2005, AND ALSO IN THE LIGHT OF THE DISCUSSIONS ABOVE, THE PERIOD DURING W HICH LOCKDOWN WAS IN FORCE CAN BE ANYTHING BUT AN ORDINARY PERIOD. 10. IN THE LIGHT OF THE ABOVE DISCUSSIONS, WE ARE O F THE CONSIDERED VIEW THAT RATHER THAN TAKING A PEDANTIC VIEW OF THE RULE REQUIRING PRONOU NCEMENT OF ORDERS WITHIN 90 DAYS, DISREGARDING THE IMPORTANT FACT THAT THE ENTIRE COU NTRY WAS IN LOCKDOWN, WE SHOULD COMPUTE THE PERIOD OF 90 DAYS BY EXCLUDING AT LEAST THE PERIOD DURING WHICH THE LOCKDOWN WAS IN FORCE. WE MUST FACTOR GROUND REALIT IES IN MIND WHILE INTERPRETING THE TIME LIMIT FOR THE PRONOUNCEMENT OF THE ORDER. LAW IS NOT BROODING OMNIPOTENCE IN THE SKY. IT IS A PRAGMATIC TOOL OF THE SOCIAL ORDER. TH E TENETS OF LAW BEING ENACTED ON THE BASIS OF PRAGMATISM, AND THAT IS HOW THE LAW IS REQ UIRED TO INTERPRETED. THE INTERPRETATION SO ASSIGNED BY US IS NOT ONLY IN CON SONANCE WITH THE LETTER AND SPIRIT OF RULE 34(5) BUT IS ALSO A PRAGMATIC APPROACH AT A TI ME WHEN A DISASTER, NOTIFIED UNDER THE DISASTER MANAGEMENT ACT 2005, IS CAUSING UNPRECEDEN TED DISRUPTION IN THE FUNCTIONING OF OUR JUSTICE DELIVERY SYSTEM. UNDOUBTEDLY, IN THE CA SE OF OTTERS CLUB VS DIT [(2017) 392 ITR 244 (BOM)] , HONBLE BOMBAY HIGH COURT DID NOT APPROVE AN ORDE R BEING PASSED BY THE TRIBUNAL BEYOND A PERIOD OF 90 DAYS, BUT THEN IN THE PRESENT SITUATION HONBLE BOMBAY HIGH COURT ITSELF HAS, VIDE JUDGMENT DATED 15TH APRIL 2020, HELD THAT DIRECTED WHILE CALCULATING THE TIME FOR DISPOSAL OF MATTERS MADE TIME-BOUND BY THIS COURT, THE PERIOD FOR WHICH THE ORDER DATED 26TH MARCH 2020 CONTINUES TO OPERATE SHALL BE ADDED AND TIME SHALL STAND EXTE NDED ACCORDINGLY . THE EXTRAORDINARY STEPS TAKEN SUO MOTU BY HONBLE JURIS DICTIONAL HIGH COURT AND HONBLE SUPREME COURT ALSO INDICATE THAT THIS PERIOD OF LOC KDOWN CANNOT BE TREATED AS AN ORDINARY PERIOD DURING WHICH THE NORMAL TIME LIMITS ARE TO REMAIN IN FORCE. IN OUR CONSIDERED VIEW, EVEN WITHOUT THE WORDS ORDINARILY , IN THE LIGHT OF THE ABOVE ANALYSIS OF THE LEGAL POSITION, THE PERIOD DURING WHICH LOCKOUT WAS IN FORCE IS TO EXCLUDED FOR THE PURPOSE OF TIME LIMITS SET OUT IN RULE 34(5) OF THE APPELLATE TRIBUNAL RULES, 1963. VIEWED THUS, THE EXCEPTION, TO 90-DAY TIME-LIMIT FOR PRONO UNCEMENT OF ORDERS, INHERENT IN RULE 34(5)(C), WITH RESPECT TO THE PRONOUNCEMENT OF ORDE RS WITHIN NINETY DAYS, CLEARLY COMES INTO PLAY IN THE PRESENT CASE. OF COURSE, THERE IS NO, AND THERE CANNOT BE ANY, BAR ON THE DISCRETION OF THE BENCHES TO REFIX THE MATTERS FOR CLARIFICATIONS BECAUSE OF CONSIDERABLE TIME LAG BETWEEN THE POINT OF TIME WHEN THE HEARING IS CONCLUDED AND THE POINT OF TIME WHEN THE ORDER THEREON IS BEING FINALIZED, BUT THEN , IN OUR CONSIDERED VIEW, NO SUCH EXERCISE WAS REQUIRED TO BE CARRIED OUT ON THE FACT S OF THIS CASE. 11. TO SUM UP, THE APPEAL OF THE ASSESSEE IS ALLOWE D, AND APPEAL OF THE ASSESSING OFFICER IS DISMISSED. ORDER PRONOUNCED UNDER RULE 34(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1962, BY PLACING THE DETAILS ON THE NOTICE B OARD. ITA NO. 29/A HD/2016 . A.Y. 2012-1 3 14 CONSIDERING THE ABOVE, WE EXPRESS TO PRONOUNCE THE ORDER BEYOND THE PERIOD OF 90 DAYS. ACCORDINGLY, WE PROCEED TO PRONOUNCE THE O RDER AS ON DATE. 43. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED ORDER PRONOUNCED IN OPEN COURT ON 01- 06- 2020 SD/- SD/- (RAJPAL YADAV) (WASEEM AHMED) VICE PRESIDENT TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 01/06/2020 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD